FORM OF SHIPBUILDING CONTRACT FOR THE CONSTRUCTION OF ONE (1) 170,500 DWT CLASS BULK CARRIER (HULL NO. HN-101[ ]) BETWEEN GOLDEN OCEAN GROUP LIMITED
Exhibit
4.1
FORM
OF
FOR
THE
CONSTRUCTION
OF
ONE
(1) 170,500 DWT CLASS BULK CARRIER
(HULL
NO. HN-101[ ])
BETWEEN
GOLDEN
OCEAN GROUP LIMITED
OR
ITS NOMINEE
(AS
BUYER)
AND
DAEHAN
SHIPBUILDING CO., LTD.
(AS
BUILDER)
INDEX
| ARTICLE | PAGE | |||
|
PREAMBLE
|
1
|
|||
|
ARTICLE
I - DESCRIPTION AND CLASS
|
2
|
|||
|
1.
|
Description
|
2
|
||
|
2.
|
Basic
Dimensions And Principal Particulars Of The Vessel
|
2
|
||
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3.
|
Classification,
Rules And Regulations
|
3
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||
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4.
|
Subcontracting
|
3
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||
|
5.
|
Nationality
Of The Vessel
|
3
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||
|
ARTICLE
II - CONTRACT PRICE
|
4
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|||
|
ARTICLE
III - ADJUSTMENT OF THE CONTRACT PRICE
|
5
|
|||
|
1.
|
Delayed
Delivery
|
5
|
||
|
2.
|
Insufficient
Speed
|
5
|
||
|
3.
|
Excessive
Fuel Consumption
|
6
|
||
|
4.
|
Deadweight
Below Contract Requirements
|
6
|
||
|
5.
|
Effect
Of Cancellation
|
8
|
||
|
ARTICLE
IV - INSPECTION AND APPROVAL
|
9
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|||
|
1.
|
Appointment
Of The Buyer’s Representative
|
9
|
||
|
2.
|
Authority
Of The Buyer’s Representative
|
9
|
||
|
3.
|
Approval
Of Drawings
|
10
|
||
|
4.
|
Salaries
And Expenses
|
11
|
||
|
5.
|
Responsibility
Of The Builder
|
11
|
||
|
6.
|
Responsibility
Of The Buyer
|
11
|
||
|
ARTICLE
V - MODIFICATIONS, CHANGES AND EXTRAS
|
13
|
|||
|
1.
|
How
Effected
|
13
|
||
|
2.
|
Substitution
Of Material
|
13
|
||
|
3.
|
Changes
In Rules And Regulations
|
13
|
||
|
ARTICLE
VI - TRIALS AND COMPLETION
|
15
|
|||
|
1.
|
Notice
|
15
|
||
|
2.
|
Weather
Condition
|
15
|
||
|
3.
|
How
Conducted
|
15
|
||
|
4.
|
Consumable
Stores
|
15
|
||
|
5.
|
Acceptance
Or Rejection
|
16
|
||
|
6.
|
Effect
Of Acceptance
|
17
|
||
|
ARTICLE
VII - DELIVERY
|
18
|
|||
|
1.
|
Time
And Place
|
18
|
||
|
2.
|
When
And How Effected
|
18
|
||
|
3.
|
Documents
To Be Delivered To The Buyer
|
18
|
||
|
4.
|
Tender
Of The Vessel
|
19
|
||
|
5.
|
Title
And Risk
|
19
|
||
|
6.
|
Removal
Of The Vessel
|
19
|
||
|
ARTICLE
VIII - DELAYS AND EXTENSIONS OF TIME (FORCE MAJEURE)
|
21
|
|||
|
1.
|
Causes
Of Delay
|
21
|
||
|
2.
|
Notice
Of Delays
|
21
|
||
|
3.
|
Right
To Cancel For Excessive Delay
|
21
|
||
|
4.
|
Definition
Of Permissible Delays
|
22
|
||
|
ARTICLE
IX - WARRANTY OF QUALITY
|
23
|
|||
|
1.
|
Guarantee
Of Material And Workmanship
|
23
|
||
|
2.
|
Notice
Of Defects
|
23
|
||
|
3.
|
Remedy
Of Defects
|
23
|
||
|
4.
|
Extent
Of The Builder’s Liability
|
24
|
||
|
ARTICLE
X - PAYMENT
|
27
|
|||
|
1.
|
Currency
|
27
|
||
|
2.
|
Terms
Of Payment
|
27
|
||
|
3.
|
Demand
For Payment
|
28
|
||
|
4.
|
Method
Of Payment
|
28
|
||
|
5.
|
Refund
By The Builder
|
29
|
||
|
6.
|
Total
Loss
|
29
|
||
|
7.
|
Discharge
Of Obligations
|
29
|
||
|
8.
|
Refund
Guarantee
|
30
|
||
|
9.
|
Performance
Guarantee
|
30
|
||
|
ARTICLE
XI - BUYER’S DEFAULT
|
31
|
|||
|
1.
|
Definition
Of Default
|
31
|
||
|
2.
|
Effect
Of The Buyer’s Default On Or Before The Delivery Of The
Vessel
|
31
|
||
|
ARTICLE
XII - BUYER’S SUPPLIES
|
34
|
|||
|
1.
|
Responsibility
Of The Buyer
|
34
|
||
|
2.
|
Responsibility
Of The Builder
|
34
|
||
|
ARTICLE
XIII - ARBITRATION
|
36
|
|||
|
1.
|
Appointment
Of The Arbitrator
|
36
|
||
|
2.
|
Laws
Applicable
|
36
|
||
|
3.
|
Proceedings
|
36
|
||
|
4.
|
Alteration
Of Delivery Of The Vessel
|
37
|
||
|
ARTICLE
XIV - SUCCESSORS AND ASSIGNS
|
38
|
|||
|
ARTICLE
XV - TAXES AND DUTIES
|
39
|
|||
|
1.
|
Taxes
|
39
|
||
|
2.
|
Duties
|
39
|
||
|
ARTICLE
XVI - PATENTS, TRADEMARKS AND COPYRIGHTS
|
40
|
|||
|
1.
|
Patents,
Trademarks And Copyrights
|
40
|
||
|
2.
|
Rights
to the Specifications, Plans, etc.
|
40
|
||
|
ARTICLE
XVII - INTERPRETATION AND GOVERNING LAW
|
41
|
|||
|
ARTICLE
XVIII - NOTICE
|
42
|
|||
|
ARTICLE
XIX - EFFECTIVENESS OF THIS CONTRACT
|
43
|
|||
|
ARTICLE
XX - EXCLUSIVENESS
|
44
|
|||
|
EXHIBIT
“A”
|
A-1
|
|||
|
EXHIBIT
“B”
|
B-1
|
|||
THIS
CONTRACT, made on this 30th day of November, 2006 by and between GOLDEN OCEAN
GROUP LIMITED or its nominee, a corporation organized and existing under the
laws of Bermuda with its principal office at Xxx-xx-Xxxxx Xxxxx, 00 Xxx-xx-Xxxxx
Xxxx, Xxxxxxxx XX 00, Xxxxxxx (hereinafter called the “BUYER”), the party of the
first part and DAEHAN SHIPBUILDING CO., LTD., a corporation organized and
existing under the laws of the Republic of Korea, having its principal office at
000, Xxxxxx-Xx, Xxxxxx-Xx, Xxxxx Xxxx, Xxxxxxx, Xxxxx (hereinafter called the
“BUILDER”), the party of the second part,
WITNESSETH:
In
consideration of the mutual covenants contained herein, the BUILDER agrees to
design, build, launch, equip and complete one (1) 170,500 DWT Class Bulk Carrier
as described in Article I hereof (hereinafter called the “VESSEL”) at the
BUILDER’s shipyard in Haenam, Korea (hereinafter called the “SHIPYARD”) and to
deliver and sell the VESSEL to the BUYER, and the BUYER agrees to accept
delivery of and purchase from the BUILDER the VESSEL, according to the terms and
conditions hereinafter set forth :
(End
of Preamble)
1
ARTICLE I - DESCRIPTION AND
CLASS
|
1.
|
DESCRIPTION
|
The
VESSEL shall have the BUILDER’s Hull No, HN-101[ ] and shall be
constructed, equipped and completed in accordance with the Specifications for
Hull Nos. HN-1015/1016, dated 30th November, 2006 and General Arrangement Plan
attached thereto (hereinafter called respectively the “SPECIFICATIONS” and the
“PLAN”) signed by both parties, which shall constitute an integral part of this
CONTRACT although not attached hereto.
The
SPECIFICATIONS and the PLAN are intended to explain each other and anything
shown on the PLAN and not stipulated in the SPECIFICATIONS or anything
stipulated in the SPECIFICATIONS and not shown on the PLAN shall be deemed and
considered as if included in both. Should there be any inconsistencies or
contradictions between the SPECIFICATIONS and the PLAN, the SPECIFICATIONS shall
prevail. Should there be any inconsistencies or contradictions between this
CONTRACT and the SPECIFICATIONS, this CONTRACT shall prevail.
|
2.
|
BASIC DIMENSIONS AND
PRINCIPAL PARTICULARS OF THE
VESSEL
|
|
(a)
|
The
basic dimensions and principal particulars of the VESSEL shall
be
|
|
Length,
overall
|
about
|
289.0
M
|
|
|
Length,
between perpendiculars
|
about
|
279.0
M
|
|
|
Breadth,
moulded
|
about
|
45.0
M
|
|
|
Depth
to Upper Deck, moulded
|
about
|
24.2
M
|
|
|
Design
draft, moulded, in seawater
of specific gravity of 1.025 |
about
|
16.5
M
|
|
|
Xxxxxxxxx
draft, moulded, in
seawater of specific gravity of 1.025 |
about
|
17.8
M
|
|
|
Deadweight
on the above moulded design draft of 16.5 M
|
155,000
M/T
|
||
|
Deadweight
on the above moulded xxxxxxxxx draft of 17.8 M
|
about
|
170,500
M/T
|
|
|
Cubic
capacity of cargo hold (incl. hatch coaming)
|
about
|
191,500
M3
|
|
Main
propulsion engine
|
MAN
B&W 6S70MC-C
MCR: 18,660KW
x 91.0 RPM
NCR: 16,794KW
x 87.9 RPM
|
||
|
Service
speed at 16.5 meters design draft at the condition of clean bottom and in
calm and deep sea with main engine developing a NCR of 16,794 KW with 15.0
per cent (15.0%) sea margin. |
15.4
Knots |
||
|
Specific
fuel consumption of the main engine with tolerance of +5% applying I.S.O.
reference conditions to the result of official shop test at a MCR of
18,660 KW using marine diesel oil having lower calorific value of 10,200
Kcal per Kg. |
169.0
gr/XX.XX |
2
The
details of the above particulars as well as the definitions and method of
measurements and calculations are as indicated in the
SPECIFICATIONS.
|
(b)
|
The
dimensions may be slightly modified by the BUILDER, who also reserves the
right to make changes to the SPECIFICATIONS and the PLAN if found
necessary to suit the local conditions and facilities of the SHIPYARD, the
availability of materials and equipment, the introduction of improved
production methods or otherwise, subject to the approval of the BUYER
which the BUYER shall not withhold
unreasonably.
|
|
3.
|
CLASSIFICATION, RULES
AND REGULATIONS
|
|
(a)
|
The
VESSEL shall be built in compliance with the rules and regulations of Det
Norske Veritas (hereinafter called the “CLASSIFICATION SOCIETY”), in force
as of the date of this CONTRACT, to be classed and registered as +1A1,
Bulk Carrier ESP, CSR, BC-A, Holds 2, 4, 6 and 8 may be empty, X0, XXX,
XXXX(00), XX(X) and also to comply with the rules and regulations, in
force as of the date of this CONTRACT, as described in the
SPECIFICATIONS,
|
|
(b)
|
The
BUILDER shall arrange with the CLASSIFICATION SOCIETY for the assignment
by the CLASSIFICATION SOCIETY of representative(s) to the VESSEL during
construction. All fees and charges incidental to classification of the
VESSEL in compliance with the above specified rules, regulations and
requirements of this CONTRACT shall be for the account of the
BUILDER.
|
|
(c)
|
The
decision of the CLASSIFICATION SOCIETY as to whether the VESSEL complies
with the regulations of the CLASSIFICATION SOCIETY shall be final and
binding upon the BUILDER and the
BUYER.
|
|
4.
|
SUBCONTRACTING
|
The
BUILDER may, at its sole discretion and responsibility, subcontract any portion
of the construction work of the VESSEL.
|
5.
|
NATIONALITY OF THE
VESSEL
|
The
VESSEL shall be registered by the BUYER at its own cost and expense under the
laws of the Republic of the Xxxxxxxx Islands with its home port of Majuro at the
time of its delivery and acceptance hereunder.
(End
of Article)
3
ARTICLE II - CONTRACT
PRICE
The
contract price of the VESSEL delivered to the BUYER at the SHIPYARD shall be
United States Dollars Eighty One Million only (US$81,000,000.-) (hereinafter
called the “CONTRACT PRICE”) which shall be paid plus any increases or less any
decreases due to adjustment or modifications, if any, as set forth in this
CONTRACT. The above CONTRACT PRICE shall include payment for services in the
inspection, tests, survey and classification of the VESSEL which will be
rendered by the CLASSIFICATION SOCIETY and shall not include the cost of the
BUYER’s supplies as stipulated in Article XII.
The
CONTRACT PRICE also includes all costs and expenses for supplying all necessary
drawings as stipulated in the SPECIFICATIONS except those to be furnished by the
BUYER for the VESSEL in accordance with the SPECIFICATIONS.
(End
of Article)
4
ARTICLE III - ADJUSTMENT OF THE CONTRACT
PRICE
The
CONTRACT PRICE of the VESSEL shall be adjusted as hereinafter set forth in the
event of the following contingencies. It is hereby understood by both parties
that any adjustment of the CONTRACT PRICE as provided for in this Article is by
way of liquidated damages and not by way of penalty.
|
1.
|
DELAYED
DELIVERY
|
|
(a)
|
No
adjustment shall be made and the CONTRACT PRICE shall remain unchanged for
the first thirty (30) days of the delay in delivery of the VESSEL [ending
as of 12 o’clock midnight Korean Standard Time on the thirtieth (30th) day
of delay] beyond the Delivery Date calculated as provided in Article
VII.1. hereof.
|
|
(b)
|
If
delivery of the VESSEL is delayed more than thirty (30) days beyond the
date upon which the delivery is due from the BUILDER under the terms of
this CONTRACT, then, beginning at midnight of the thirtieth (30th) day
after such due date, the CONTRACT PRICE of the VESSEL shall be reduced by
U.S. Dollars Twenty Five Thousand (US$25,000.-) for each full day of
delay.
|
||
| However, unless the parties agree otherwise, the total amount of deduction from the CONTRACT PRICE shall not exceed the amount due to cover the delay of one hundred and eighty (180) days after thirty (30) days of the delay in delivery of the VESSEL at the rate of deduction as specified hereinabove. |
|
(c)
|
But,
if the delay in delivery of the VESSEL continues for a period of more than
two hundred and ten (210) days beyond the date upon which the delivery is
due from the BUILDER under the terms of this CONTRACT then, in such event,
and after such period has expired, the BUYER may, at its option, cancel
this CONTRACT by serving upon the BUILDER a notice of cancellation by
facsimile to be confirmed by a registered letter via airmail directed to
the BUILDER at the address given in this CONTRACT. Such cancellation shall
be effective as of the date the notice thereof is received by the BUILDER.
If the BUYER has not served the notice of cancellation after the
aforementioned two hundred and ten (210) days delay in delivery, the
BUILDER may demand the BUYER to make an election in accordance with
Article VIII.3. hereof,
|
|
(d)
|
For
the purpose of this Article, the delivery of the VESSEL shall be deemed to
be delayed when and if the VESSEL, after taking into full account
extension of the Delivery Date or permissible delays as provided in
Article X-0, XX-0, XXXX-0, XX-0 or elsewhere in this CONTRACT, is
delivered beyond the date upon which delivery would then be due under the
terms of this CONTRACT.
|
|
2.
|
INSUFFICIENT
SPEED
|
|
(a)
|
The
CONTRACT PRICE of the VESSEL shall not be affected or changed, if the
actual speed, as determined by trial runs more fully described in Article
VI hereof, is less than the speed required under the terms of this
CONTRACT and the SPECIFICATIONS provided such deficiency in actual speed
is not more than three-tenths (3/10) of a knot below the guaranteed
speed.
|
|
(b)
|
However,
commencing with and including a deficiency of more than three-tenths
(3/10) of a knot in actual speed below the speed guaranteed under this
CONTRACT, the CONTRACT PRICE shall be reduced for each full one tenth
(1/10) of a knot in excess of the said three tenths (3/10) of a knot of
deficiency in speed [fractions of less than one-tenth (1/10) of a knot
shall be regarded as a full one-tenth (1/10) of a knot] as
follows.
|
5
|
For
three tenths (3/10) of a knot
|
a
total sum of US$60,000.-
|
|
|
For
four tenths (4/10) of a knot
|
a
total sum of US$120,000.-
|
|
|
For
five tenths (5/10) of a knot
|
a
total sum of US$180,000.-
|
|
|
For
six tenths (6/10) of a knot
|
a
total sum of US$240,000.-
|
|
|
For
seven tenths (7/10) of a knot
|
a
total sum of US$300,000.-
|
|
|
For
eight tenths (8/10) of a knot
|
a
total sum of US$360,000.-
|
|
|
For
nine tenths (9/10) of a knot
|
a
total sum of US$420,000.-
|
|
|
For
one (1) knot
|
a
total sum of US$480,000.-
|
|
| The above figures are not cumulative. |
| However, unless the parties agree otherwise, the total amount of reduction from the CONTRACT PRICE shall not exceed the amount due to cover the deficiency of one (1) full knot below the guaranteed speed at the rate of reduction as specified above. |
|
(c)
|
If
the deficiency in actual speed of the VESSEL is more than one (1) full
knot below the speed guaranteed under this CONTRACT, then the BUYER, at
its option, may, subject to the BUILDER’s right to effect alterations or
corrections as provided in Article VI.5. hereof, cancel this CONTRACT or
may accept the VESSEL at a reduction in the CONTRACT PRICE as above
provided for one (1) full knot of deficiency
only.
|
|
3.
|
EXCESSIVE FUEL
CONSUMPTION
|
|
(a)
|
The
CONTRACT PRICE shall not be affected or changed by reason of the fuel
consumption of the VESSEL’s main engine, as determined by the engine
manufacturer’s shop trial as per the SPECIFICATIONS being more than the
guaranteed fuel consumption of the VESSEL’s main engine, if such excess is
not more than five per cent (5%) over the guaranteed fuel
consumption.
|
|
(b)
|
However,
as for the excess of more than five per cent (5%) in the actual fuel
consumption over the guaranteed fuel consumption of the VESSEL’s main
engine, the CONTRACT PRICE shall be reduced by U.S. Dollars Seventy
Thousand (US$70,000.-) for each full one per cent (1%) increase in fuel
consumption in excess of the said five per cent (5%) increase in fuel
consumption [fractions of less than one per cent (1%) shall be regarded as
a full one per cent (1%)]. However, unless the parties agree otherwise,
the total amount of reduction from the CONTRACT PRICE shall not exceed the
amount due to cover the excess of ten per cent (10%) over the guaranteed
fuel consumption of the VESSEL’s main engine at the rate of reduction as
specified above.
|
|
(c)
|
If
such actual fuel consumption exceeds the guaranteed fuel consumption of
the VESSEL’s main engine by more than ten per cent (10%), the BUYER, at
its option, may, subject to the BUILDER’s right to effect alterations or
corrections as specified in Article VI.5. hereof, cancel this CONTRACT or
may accept the VESSEL at a reduction in the CONTRACT PRICE as above
provided for the ten per cent (10%) increase
only.
|
|
4.
|
DEADWEIGHT BELOW
CONTRACT REQUIREMENTS
|
|
(a)
|
The
CONTRACT PRICE of the VESSEL shall not be affected or changed, if actual
deadweight, determined as provided in this CONTRACT and the
SPECIFICATIONS, is below the deadweight of 170,500 metric tons on the
moulded xxxxxxxxx draft of 17.8 meters required by this CONTRACT and the
SPECIFICATIONS by an amount of 1,500 metric tons or less. However, should
the deficiency in the actual deadweight of the VESSEL be more than 1,500
metric tons below the said required deadweight, then the CONTRACT PRICE of
the VESSEL shall be reduced for each full one (1) metric ton [fractions of
less than one (1) metric ton shall be disregarded] of decreased deadweight
in excess of 1,500 metric tons by the sum of U.S. Dollars Five Hundred
(US$500.-) per metric ton.
|
6
| However, unless the parties agree otherwise, the total amount of deduction from the CONTRACT PRICE shall not exceed the amount due to cover the deficiency of 3,500 metric tons below the said required deadweight hereinabove. |
|
(b)
|
If
the deficiency in the deadweight of the VESSEL is more than 3,500 metric
tons below the said required deadweight, then the BUYER, at its option,
may, subject to the BUILDER’s right to effect alterations or corrections
without the BUYER’s prior consent as specified in Article VI.5. hereof,
cancel this CONTRACT or may accept the VESSEL at a reduction in the
CONTRACT PRICE as above provided for 3,500 metric tons of deficiency
only.
|
7
EFFECT OF
CANCELLATION
It
is expressly understood and agreed by the parties hereto that in any case, if
the BUYER cancels this CONTRACT under this Article, the BUYER shall not be
entitled to any liquidated damages.
(End
of Article)
8
ARTICLE IV — INSPECTION AND
APPROVAL
|
1.
|
APPOINTMENT OF THE
BUYER’S REPRESENTATIVE
|
The
BUYER shall timely despatch to and maintain at the SHIPYARD, at its own cost,
expense and risk, one or more representatives (hereinafter called the “BUYER’S
REPRESENTATIVE”), who shall be duly accredited in writing by the BUYER to
supervise adequately the construction by the BUILDER of the VESSEL, her
equipment and all accessories. Before the commencement of any item of work under
this CONTRACT, the BUILDER shall, whenever reasonably required, previously
exhibit, furnish to, and within the limits of the BUYER’S REPRESENTATIVE’s
authority, secure the approval from the BUYER’S REPRESENTATIVE of any and all
plans and drawings prepared in connection therewith. Upon appointment of the
BUYER’S REPRESENTATIVE, the BUYER shall notify the BUILDER in writing of the
name and the scope of the authority of the BUYER’S REPRESENTATIVE.
|
2.
|
AUTHORITY OF THE
BUYER’S REPRESENTATIVE
|
Such
BUYER’S REPRESENTATIVE shall, at all times during working hours of the
construction until delivery of the VESSEL, have the right to inspect the VESSEL,
her equipment and all accessories, and work in progress, or materials utilized
in connection with the construction of the VESSEL, wherever such work is being
done or such materials are stored, for the purpose of determining that the
VESSEL, her equipment and accessories are being constructed in accordance with
the terms of this CONTRACT and/or the SPECIFICATIONS and the PLAN.
The
BUILDER will endeavor to arrange for the inspection by the BUYER’S
REPRESENTATIVE during working hours of the BUILDER. However, such inspection may
be arranged beyond the BUILDER’s normal working hours, including weekend and/or
holiday if this is considered necessary by the BUILDER in order to meet the
BUILDER’s construction schedule, on the condition that the BUILDER will inform
the BUYER’S REPRESENTATIVE at least three (3) days in advance of such
inspection.
The
BUYER’S REPRESENTATIVE shall, within the limits of the authority conferred upon
him by the BUYER, make decisions or give advice to the BUILDER on behalf of the
BUYER promptly on all problems arising out of, or in connection with, the
construction of the VESSEL and generally act in a reasonable manner with a view
to cooperating to the utmost with the BUILDER in the construction process of the
VESSEL.
The
decision, approval or advice of the BUYER’S REPRESENTATIVE shall be deemed to
have been given by the BUYER and once given shall not be withdrawn, revoked or
modified except with consent of the BUILDER. Provided that the BUYER’S
REPRESENTATIVE or his assistants shall comply with the foregoing obligations, no
act or omission of the BUYER’S REPRESENTATIVE or his assistants shall, in any
way, diminish the liability of the BUILDER under Article IX (WARRANTY OF
QUALITY). The BUYER’S REPRESENTATIVE shall notify the BUILDER promptly in
writing of his discovery of any construction or materials, which he believes do
not or will not conform to the requirements of the CONTRACT and the
SPECIFICATIONS or the PLAN and likewise advise and consult with the BUILDER on
all matters pertaining to the construction of the VESSEL, as may be required by
the BUILDER, or as he may deem necessary.
However,
if the BUYER’S REPRESENTATIVE fails to submit to the BUILDER without delay any
such demand concerning alterations or changes with respect to the construction,
arrangement or outfit of the VESSEL, which the BUYER’S REPRESENTATIVE has
examined, inspected or attended at the test thereof under this CONTRACT or the
SPECIFICATIONS, the BUYER’S REPRESENTATIVE shall be deemed to have approved the
same and shall be precluded from making any demand for alterations, changes, or
complaints with respect thereto at a later date,
9
The
BUILDER shall comply with any such demand which is not contradictory to this
CONTRACT and the SPECIFICATIONS or the PLAN, provided that any and all such
demands by the BUYER’S REPRESENTATIVE with regard to construction, arrangement
and outfit of the VESSEL shall be submitted in writing to the authorised
representative of the BUILDER. The BUILDER shall notify the BUYER’S
REPRESENTATIVE of the names of the persons who are from time to time authorised
by the BUILDER for this purpose.
It
is agreed upon between the BUYER and the BUILDER that the modifications,
alterations or changes and other measures necessary to comply with such demand
may be effected at a convenient time and place at the BUILDER’s reasonable
discretion in view of the construction schedule of the VESSEL.
In
the event that the BUYER’S REPRESENTATIVE shall advise the BUILDER that he has
discovered or believes the construction or materials do not or will not conform
to the requirements of this CONTRACT and the SPECIFICATIONS or the PLAN, and the
BUILDER shall not agree with the views of the BUYER’S REPRESENTATIVE in such
respect, either the BUYER or the BUILDER may, with the agreement of the other
party, seek an opinion of the CLASSIFICATION SOCIETY or failing such agreement,
request an arbitration in accordance with the provisions of Article XIII hereof.
The CLASSIFICATION SOCIETY or the arbitration tribunal, as the case may be,
shall determine whether or not a nonconformity with the provisions of this
CONTRACT, the SPECIFICATIONS and the PLAN exists. If the CLASSIFICATION SOCIETY
or the arbitration tribunal, as the case may be, enters a determination in
favour of the BUYER, then in such case the BUILDER shall make the necessary
alterations or changes, or if such alterations or changes cannot be made in time
to meet the construction schedule for the VESSEL, the BUILDER shall make fair
and reasonable adjustment of the CONTRACT PRICE in lieu of such alterations and
changes. If the CLASSIFICATION SOCIETY or the arbitration tribunal, as the case
may be, enters a determination in favour of the BUILDER, then the time for
delivery of the VESSEL shall be extended for the period of delay in
construction, if any, occasioned by such proceedings, and the BUYER shall
compensate the BUILDER for the proven loss and damages incurred by the BUILDER
as a result of the dispute herein referred to.
|
3.
|
APPROVAL OF
DRAWINGS
|
|
(a)
|
The
BUILDER shall submit to the BUYER three (3) copies of each of the plans
and drawings to be submitted to the BUYER for its approval at its address
as set forth in Article XVIII hereof. The BUYER shall, within fourteen
(14) days after receipt thereof return to the BUILDER one (1) copy of such
plans and drawings with the approval or comments, if any, of the BUYER. A
list of the plans and drawings to be so submitted to the BUYER shall be
mutually agreed upon between the parties
hereto.
|
|
(b)
|
When
and if the BUYER’S REPRESENTATIVE shall have been sent by the BUYER to the
SHIPYARD in accordance with Paragraph 1 of this Article, the BUILDER may
submit the remainder, if any, of the plans and drawings in the agreed
list, to the BUYER’S REPRESENTATIVE for his approval, unless otherwise
agreed upon between the parties
hereto.
|
| The BUYER’S REPRESENTATIVE shall, within seven (7) days after receipt thereof, return to the BUILDER one (1) copy of such plans and drawings with his approval or comments written thereon, if any. Approval by the BUYER’S REPRESENTATIVE of the plans and drawings duly submitted to him shall be deemed to be the approval by the BUYER for all purposes of this CONTRACT, |
|
(c)
|
In
the event that the BUYER or the BUYER’S REPRESENTATIVE shall fail to
return the plans and drawings to the BUILDER within the time limit as
hereinabove provided, such plans and drawings shall be deemed to have been
automatically approved without any comment. In the event the plans and
drawings submitted by the BUILDER to the BUYER or the BUYER’S
REPRESENTATIVE in accordance with this Article do not meet with the
BUYER’s or the BUYER’S REPRESENTATIVE’s approval, the matter may be
submitted by either party hereto for determination pursuant to Article
XIII hereof. If the BUYER’s comments on the plans and drawings that are
returned to the BUILDER by the BUYER within the said time limit are not
clearly specified or detailed, the BUILDER shall be entitled to place its
own interpretation on such comments in implementing
them.
|
10
|
4.
|
SALARIES AND
EXPENSES
|
All
salaries and expenses of the BUYER’S REPRESENTATIVE or any other person or
persons employed by the BUYER hereunder shall be for the BUYER’s
account.
|
5.
|
RESPONSIBILITY OF THE
BUILDER
|
|
(a)
|
The
BUILDER shall provide the BUYER’S REPRESENTATIVE and his assistants free
of charge with suitably furnished office space at, or in the immediate
vicinity of, the SHIPYARD together with access to telephone and facsimile
facilities as may be necessary to enable the BUYER’S REPRESENTATIVE and
his assistants to carry out their work under this CONTRACT. However, the
BUYER shall pay for the telephone or facsimile facilities used by the
BUYER’S REPRESENTATIVE or his
assistants.
|
| The BUILDER, its employees, agents and subcontractors, during its working hours until delivery of the VESSEL, shall arrange for them to have free and ready access to the VESSEL, her equipment and accessories, and to any other place (except the areas controlled for the purpose of national security) where work is being done, or materials arc being processed or stored in connection with the construction of the VESSEL including the premises of sub-contractors. |
| The BUYER’S REPRESENTATIVE or his assistants or employees shall observe the work’s rules, regulations and the guidances prevailing at the BUILDER’s and its sub-contractor’s premises. The BUILDER shall promptly provide to the BUYER’S REPRESENTATIVE and/or his assistants and shall ensure that its sub-contractors shall promptly provide all such information as he or they may reasonably request in connection with the construction of the VESSEL and her engines, equipment and machinery. |
|
(b)
|
The
BUYER’S REPRESENTATIVE and his assistants shall at all times remain the
employees of the BUYER. The BUILDER shall not be liable to the BUYER or
the BUYER’S REPRESENTATIVE or to his assistants or to the BUYER’s
employees or agents for personal injuries, including death, during the
time they, or any of them, are on the VESSEL, or within the premises of
either the BUILDER or its sub-contractors, or are otherwise engaged in and
about the construction of the VESSEL, unless, however, such personal
injuries, including death, are caused by the gross negligence of the
BUILDER, its sub-contractors, or its or their employees or agents. The
BUILDER shall not be liable to the BUYER for damages to, or destruction of
property of the BUYER or of the BUYER’S REPRESENTATIVE or his assistants
or the BUYER’s employees or agents, unless such damages, loss or
destruction is caused by the gross negligence of the BUILDER, its
sub-contractors, or its or their employees or
agents.
|
|
6.
|
RESPONSIBILITY OF THE
BUYER
|
The
BUYER shall undertake and assure that the BUYER’S REPRESENTATIVE and his
assistants shall carry out their duties hereunder in accordance with the normal
shipbuilding practice and SHIPYARD quality standard and in such a way as to
avoid any unnecessary increase in building cost, delay in the construction of
the VESSEL, and/or any disturbance in the construction schedule of the
BUILDER.
11
The
BUILDER has the right to request the BUYER to replace any of the BUYER’S
REPRESENTATIVE and/or his assistants who are deemed unsuitable and
unsatisfactory for the proper progress of the VESSEL’s
construction.
(End
of Article)
12
ARTICLE V - MODIFICATIONS, CHANGES AND
EXTRAS
|
1.
|
HOW
EFFECTED
|
Minor
modifications or changes to the SPECIFICATIONS and the PLAN under which the
VESSEL is to be constructed may be made at any time hereafter by written
agreement of the parties hereto. Any modification or change requested by the
BUYER which does not affect the frame-work of the SPECIFICATIONS shall be agreed
to by the BUILDER if the BUYER agrees to adjustment of the CONTRACT PRICE,
deadweight and/or cubic capacity, speed requirements, the Delivery Date and
other terms and conditions of this CONTRACT reasonably required as a result of
such modification or change. The BUILDER has the right to continue construction
of the VESSEL on the basis of the SPECIFICATIONS and the PLAN until the BUYER
has agreed to such adjustments. The BUILDER shall be entitled to refuse to make
any alteration, change or modification of the SPECIFICATIONS and/or the PLAN
requested by the BUYER, if the BUYER does not agree to the aforesaid adjustments
within seven (7) days of the BUILDER’s notification of the same to the BUYER,
or, if, in the BUILDER’s judgement, the compliance with such request of the
BUYER would cause an unreasonable disruption of the normal working schedule of
the SHIPYARD.
The
BUILDER, however, agrees to exert its efforts to accommodate such reasonable
request by the BUYER so that the said change and modification shall be made at a
reasonable cost and within the shortest period of time reasonably possible. The
aforementioned agreement to modify and change the SPECIFICATIONS and the PLAN
may be effected by exchange of letters or facsimiles manifesting the
agreement.
The
letters and facsimiles exchanged by the parties pursuant to the foregoing shall
constitute an amendment to this CONTRACT and the SPECIFICATIONS or the PLAN
under which the VESSEL shall be built. Upon consummation of such an agreement to
modify and change the SPECIFICATIONS or the PLAN, the BUILDER shall alter the
construction of the VESSEL in accordance therewith including any addition to, or
deduction from, the work to be performed in connection with such
construction.
|
2.
|
SUBSTITUTION OF
MATERIAL
|
If
any materials, machinery or equipment required for the construction of the
VESSEL by the SPECIFICATIONS and the PLAN or otherwise under this CONTRACT can
not be procured in time to meet the BUILDER’s construction schedule for the
VESSEL, or are in short supply, or are unreasonably high in price compared with
the prevailing international market price, the BUILDER may supply, subject to
the BUYER’s prior approval, other materials, machinery or equipment of equal
quality and effect capable of meeting the requirements of the CLASSIFICATION
SOCIETY and the rules, regulations and requirements with which the construction
of the VESSEL must comply.
|
3.
|
CHANGES IN RULES AND
REGULATIONS
|
If
the specified rules and regulations with which the construction of the VESSEL is
required to comply are altered or changed by the CLASSIFICATION SOCIETY or
bodies authorised to make such alterations or changes after the CONTRACT date,
either the BUYER or the BUILDER, upon receipt of due notice thereof, shall
forthwith give notice thereof to the other party in writing. Thereupon, within
ten (10) days after giving the notice to the BUILDER or receiving the notice
from the BUILDER, the BUYER shall advise the BUILDER as to the alterations and
changes, if any, to be made on the VESSEL which the BUYER, in its sole
discretion, shall decide. The BUILDER shall not be obliged to comply with such
alterations and/or changes if the BUYER fails to notify the BUILDER of its
decision within the time limit stated above,
The
BUILDER shall comply promptly with the said request of the BUYER, provided that
the BUILDER and the BUYER shall first agree to :
13
|
(a)
|
any
increase or decrease in the CONTRACT PRICE of the VESSEL that is
occasioned by such compliance ;
|
|
(b)
|
any
extension or advancement in the Delivery Date of the VESSEL that is
occasioned by such compliance ;
|
|
(c)
|
any
increase or decrease in the deadweight and/or cubic capacity of the
VESSEL, if such compliance results in any increase or reduction in the
deadweight and/or cubic capacity ;
|
|
(d)
|
adjustment
of the speed requirements if such compliance results in any increase or
reduction in the speed ; and
|
|
(e)
|
any
other alterations in the terms of this CONTRACT or of the SPECIFICATIONS
or the PLAN or both, if such compliance makes such alterations of the
terms necessary.
|
Any
delay in the construction of the VESSEL caused by the BUYER’s delay in making a
decision or agreement as above shall constitute a permissible delay under this
CONTRACT. Such agreement by the BUYER shall be effected in the same manner as
provided above for modification and change of the SPECIFICATIONS and the
PLAN.
(End
of Article)
14
ARTICLE VI - TRIALS AND
COMPLETION
|
1.
|
NOTICE
|
The
BUILDER shall notify the BUYER in writing or by facsimile at least fourteen (14)
days in advance of the time and place of the trial run of the VESSEL. Such
notice shall specify the place from which the VESSEL will commence her trial run
and approximate date upon which the trial run is expected to take place. Such
date shall be further confirmed by the BUILDER five (5) days in advance of the
trial run in writing or by facsimile.
The
BUYER’S REPRESENTATIVE, who is to witness the performance of the VESSEL during
such trial run, shall be present at such place on the date specified in such
notice. Should the BUYER’S REPRESENTATIVE fail to be present after the BUILDER’s
due notice to the BUYER as provided above, the BUILDER shall be entitled to
conduct such trial run with the presence of the representative(s) of the
CLASSIFICATION SOCIETY only without the BUYER’S REPRESENTATIVE being present. In
such case, the BUYER shall be obliged to accept the VESSEL on the basis of a
certificate issued by the BUILDER that the VESSEL, after the trial run, subject
to alterations and corrections, if necessary, has been found to conform with the
SPECIFICATIONS and this CONTRACT and is satisfactory in all respects, provided
the BUILDER first makes such corrections and alterations promptly.
|
2.
|
WEATHER
CONDITION
|
In
the event of unfavourable weather on the date specified for the trial run, the
trial run shall take place on the first available day that weather conditions
permit. The parties hereto recognize that the weather conditions in Korean
waters, in which the trial run is to take place, are such that great changes in
weather may arise momentarily and without warning and therefore, it is agreed
that if, during the trial run, the weather should become so unfavourable that
the trial run cannot be continued, then the trial run shall be discontinued and
postponed until the first favourable day next following, unless the BUYER shall
assent to the acceptance of the VESSEL by notification in writing on the basis
of such trial run so far made prior to such change in weather conditions. Any
delay of the trial run caused by such unfavourable weather conditions shall also
operate to extend the Delivery Date of the VESSEL for the period of delay
occasioned by such unfavourable weather conditions.
|
3.
|
HOW
CONDUCTED
|
All
expenses in connection with the trials of the VESSEL are to be for the account
of the BUILDER, which, during the trials, is to provide at its own expense the
necessary crew to comply with conditions of safe navigation. The trials shall be
conducted in the manner prescribed in this CONTRACT and the SPECIFICATIONS, and
shall prove fulfilment of the performance requirements for the trials as set
forth in the SPECIFICATIONS.
The
BUILDER shall be entitled to conduct preliminary sea trials, during which the
propulsion plant and/or its appurtenance shall be adjusted according to the
BUILDER’s judgement. The BUILDER shall have the right to repeat any trial
whatsoever as it deems necessary.
|
4.
|
CONSUMABLE
STORES
|
The
BUILDER shall load the VESSEL with the required quantity of fuel oil,
lubricating oil, hydraulic oil and greases, fresh water, and other stores
necessary to conduct the trials as set forth in the SPECIFICATIONS. The
necessary ballast (fuel oil, fresh water and such other ballast as may be
required) to bring the VESSEL to the trial load draft, as specified in the
SPECIFICATIONS, shall be supplied and paid for by the BUILDER whilst lubricating
oil and greases shall be supplied and paid for by the BUYER within the time
advised by the BUILDER for the conduct of sea trials as well as for use before
the delivery of the VESSEL to the BUYER. The fuel oil as well as lubricating oil
and greases shall be in accordance with the specifications of the main engine
and other machinery and the BUYER shall decide and advise the BUILDER of the
supplier’s name for lubricating oil, hydraulic oil and greases before the
work-commencement of the VESSEL, provided that the supplier shall be acceptable
to the BUILDER and/or the makers of all the machinery,
15
Any
fuel oil, fresh water or other consumable stores furnished and paid for by the
BUILDER for trial runs remaining on board the VESSEL, at the time of acceptance
of the VESSEL by the BUYER, shall be bought by the BUYER from the BUILDER at the
BUILDER’s purchase price for such supply in Korea and payment by the BUYER
thereof shall be made at the time of delivery of the VESSEL. The BUILDER shall
pay the BUYER at the time of delivery of the VESSEL for the consumed quantity of
any lubricating oil, hydraulic oil and greases which were furnished and paid for
by the BUYER at the BUYER’s purchase price thereof. The consumed quantity of
lubricating oils, hydraulic oil and greases shall be calculated on the basis of
the difference between the remaining amount, including the same remaining in the
main engine, other machinery and their pipes, xxxxx tube and the like, and the
supplied amount.
|
5.
|
ACCEPTANCE OR
REJECTION
|
|
(a)
|
If,
during any sea trial, any breakdown occurs entailing interruption or
irregular performance which can be repaired on board, the trial shall be
continued after such repairs and be valid in all
respects.
|
|
(b)
|
However,
if, during or after the trial run, it becomes apparent that the VESSEL or
any part of her equipment requires alterations or corrections which but
for this provision would or might entitle the BUYER to cancel this
CONTRACT, the BUILDER shall notify the BUYER promptly in writing or by
facsimile to such effect and shall simultaneously advise the BUYER of the
estimated additional time required for the necessary alterations or
corrections to be made.
|
| The BUYER shall, within three (3) days of receipt from the BUILDER of notice of completion of such alterations or corrections and after such further trials or tests as necessary, notify the BUILDER in writing or by facsimile confirmed in writing of its acceptance, qualified acceptance or rejection of the VESSEL, all in accordance with the SPECIFICATIONS, the PLAN and this CONTRACT, and shall not be entitled to reject the VESSEL on such grounds until such time. |
|
(c)
|
Save
as above provided, the BUYER shall, within two (2) days after completion
of the trial run, notify the BUILDER in writing or by facsimile confirmed
in writing of its acceptance of the VESSEL or of the details in respect of
which the VESSEL does not conform to the SPECIFICATIONS or this
CONTRACT.
|
| If the BUILDER is in agreement with the BUYER’s determinations as to non-conformity, the BUILDER shall make such alterations or changes as may be necessary to correct such non-conformity and shall prove the fulfilment of this CONTRACT and the SPECIFICATIONS by such tests or trials as may be necessary. |
| The BUYER shall, within two (2) days after completion of such tests and/or trials, notify the BUILDER in writing or by facsimile confirmed in writing of its acceptance or rejection of the VESSEL. |
|
(d)
|
However,
the BUYER shall not be entitled to reject the VESSEL by reason of any
minor or insubstantial items judged from the point of view of standard
shipbuilding and shipping practice as not being in conformity with the
SPECIFICATIONS, but, in that case, the BUILDER shall not be released from
the obligation to correct and/or remedy such minor or insubstantial items
as soon as practicable after the delivery of the
XXXXXX.
|
00
|
0.
|
EFFECT OF
ACCEPTANCE
|
The
BUYER’s written or facsimiled notification of acceptance delivered to the
BUILDER as above provided, shall be final and binding insofar as conformity of
the VESSEL with the SPECIFICATIONS is concerned and shall preclude the BUYER
from refusing formal delivery of the VESSEL as hereinafter provided, if the
BUILDER complies with all conditions of delivery, as herein set forth and
provided that, in the case of qualified acceptance, any matters which were
mentioned in the notice of the qualified acceptance by the BUYER as requiring
correction have been corrected satisfactorily.
If
the BUYER fails to notify the BUILDER of its acceptance or rejection of the
VESSEL as hereinabove provided, the BUYER shall be deemed to have accepted the
VESSEL. Nothing contained in this Article shall preclude the BUILDER from
exercising any and all rights which the BUILDER has under this CONTRACT if the
BUILDER disagrees with the BUYER’s rejection of the VESSEL or any reasons given
for such rejection, including arbitration provided in Article XIII
hereof.
(End
of Article)
17
ARTICLE VII –
DELIVERY
|
1.
|
TIME AND
PLACE
|
The
VESSEL shall be delivered by the BUILDER to the BUYER at the SHIPYARD, safely
afloat on or before 30th September, 2009 (hereinafter called the “DELIVERY
DATE”) after completion of satisfactory trials and acceptance by the BUYER in
accordance with the terms of Article VI, except that, in the event of delays in
delivery of the VESSEL by the BUILDER due to causes which under the terms of
this CONTRACT permit extensions of the time for delivery of the VESSEL, the
aforementioned DELIVERY DATE shall be extended accordingly.
|
2.
|
WHEN AND HOW
EFFECTED
|
Provided
that the BUYER shall concurrently with delivery of the VESSEL release to the
BUILDER the fifth instalment as set forth in Article X.2 hereof and shall have
fulfilled all of its obligations provided for in this CONTRACT, delivery of the
VESSEL shall be forthwith effected upon acceptance thereof by the BUYER, as
hereinabove provided, by the concurrent delivery by each of the parties hereto
to the other of a PROTOCOL OF DELIVERY AND ACCEPTANCE acknowledging delivery of
the VESSEL by the BUILDER and acceptance thereof by the BUYER, which PROTOCOL
shall be prepared in duplicate and signed by each of the parties
hereto.
|
3.
|
DOCUMENTS TO BE
DELIVERED TO THE BUYER
|
Upon
delivery and acceptance of the VESSEL, the BUILDER shall deliver to the BUYER
the following documents, which shall accompany the aforementioned PROTOCOL OF
DELIVERY AND ACCEPTANCE :
|
(a)
|
PROTOCOL
OF TRIALS of the VESSEL made pursuant to this CONTRACT and the
SPECIFICATIONS,
|
|
(b)
|
PROTOCOL
OF INVENTORY of the equipment of the VESSEL, including spare parts, all as
specified in the SPECIFICATIONS,
|
|
(c)
|
PROTOCOL
OF DEADWEIGHT DETERMINATION AND INCLINING
EXPERIMENT.
|
|
(d)
|
PROTOCOL
OF STORES OF CONSUMABLE NATURE, such as all fuel oil and fresh water
remaining in tanks if its cost is charged to the BUYER under Article VI.4.
hereof,
|
|
(e)
|
DRAWINGS
AND PLANS pertaining to the VESSEL as stipulated in the SPECIFICATIONS,
which shall be furnished to the BUYER at no additional
cost,
|
|
(f)
|
ALL
CERTIFICATES required to be furnished upon delivery of the VESSEL pursuant
to this CONTRACT, the SPECIFICATIONS and the customary shipbuilding
practice, including
|
|
(i)
|
Classification
Certificate
|
|
(ii)
|
Safety
Construction Certificate
|
|
(iii)
|
Safety
Equipment Certificate
|
|
(iv)
|
Safety
Radio Certificate
|
18
|
(v)
|
International
Loadline Certificate
|
|
(vi)
|
International
Tonnage Certificate
|
|
(vii)
|
BUILDER’s
Certificate
|
|
(viii)
|
De-ratting
Exemption Certificate
|
|
(ix)
|
International
Oil Pollution Prevention
Certificate
|
|
(x)
|
Deadweight
Certificate
|
|
(xi)
|
Certificate
for Life Boats and Life Saving
Equipments
|
| However, it is agreed by the parties that if the Classification Certificate and/or other certificates are not available at the time of delivery of the VESSEL, provisional certificates shall be accepted by the BUYER, provided that the BUILDER shall furnish the BUYER with formal certificates as promptly as possible after such formal certificates have been issued. |
|
(g)
|
DECLARATION
OF WARRANTY of the BUILDER that the VESSEL is delivered to the BUYER free
and clear of any liens, claims, mortgages, or other encumbrances upon the
BUYER’S title thereto, and in particular, that the VESSEL is absolutely
free of all burdens in the nature of imposts, taxes, or charges imposed by
the prefecture or country of the port of delivery, as well as of all
liabilities of the BUILDER to its sub-contractors and employees and of all
liabilities arising from the operation of the VESSEL in trial runs, or
otherwise, prior to delivery except as otherwise provided under this
CONTRACT.
|
|
(h)
|
COMMERCIAL
INVOICE.
|
|
(i)
|
XXXX
OF SALE.
|
|
4.
|
TENDER OF THE
VESSEL
|
If
the BUYER fails to take delivery of the VESSEL after completion thereof
according to this CONTRACT and the SPECIFICATIONS, the BUILDER shall have the
right to tender delivery of the VESSEL after compliance with all procedural
requirements as provided above.
|
5.
|
TITLE AND
RISK
|
Title
and risk shall pass to the BUYER upon delivery of the VESSEL being effected as
stated above and the BUILDER shall be free of all responsibility or liability
whatsoever related with this CONTRACT except for the warranty of quality
contained in Article IX and the obligation to correct and/or remedy, as provided
in Article VI. 5. (d), if any, it being expressly understood that, until such
delivery is effected, the VESSEL and equipment thereof are at the entire risk of
the BUILDER including but not confined to, risks of war, insurrection and
seizure by Governments or Authorities, whether Korean or foreign, and whether at
war or at peace. The title to the BUYER’s supplies as provided in Article XII
shall remain with the BUYER and the BUILDER’s responsibility for such BUYER’s
supplies shall be as described in Article XII.2.
|
6.
|
REMOVAL OF THE
VESSEL
|
The
BUYER shall take possession of the VESSEL immediately upon delivery thereof and
shall remove the VESSEL from the SHIPYARD within three (3) days after delivery
thereof is effected. Port dues and other charges levied by the Korean Government
Authorities after delivery of the VESSEL and any other costs related to the
removal of the VESSEL shall be borne by the BUYER.
19
(End
of Article)
20
ARTICLE VIII - DELAYS AND EXTENSIONS OF
TIME (FORCE MAJEURE)
|
1.
|
CAUSES OF
DELAY
|
If
at any time after signing this CONTRACT, either the construction or delivery of
the VESSEL or any performance required hereunder as a prerequisite to the
delivery thereof is delayed by any of the following events; namely war involving
Korea, acts of state or government, blockade, revolution, insurrections,
mobilization, civil commotion, riots, strikes, sabotage, lockouts, Acts of God
or the public enemy, plague or other epidemics, quarantines, shortage or
prolonged failure of electric current, freight embargoes, or delays in delivery
of materials, machinery or equipment or hull blocks or outfitting works ,
provided that at the time of ordering the same could reasonably be expected by
the BUILDER to be delivered in time or defects in materials, machinery or
equipment which could not have been detected by the BUILDER using reasonable
care or earthquakes, tidal waves, typhoons, hurricanes, prolonged or unusually
severe weather conditions or destruction of the premises or works of the BUILDER
or its sub-contractors, or of the VESSEL, or any part thereof, by fire,
landslides, flood, lightning, explosion which in turn delay the construction of
the VESSEL or the BUILDER’s performance under the CONTRACT, or delays caused by
the CLASSIFICATION SOCIETY or the BUYER’s faulty action or omission, or for any
other causes which, under the terms of this CONTRACT, authorise and permit
extension of the time for delivery of the VESSEL, then, in the event of delays
due to the happening of any of the aforementioned contingencies, the DELIVERY
DATE of the VESSEL under this CONTRACT shall be extended for a period of time
which shall not exceed the total accumulated time of all such
delays.
|
2.
|
NOTICE OF
DELAYS
|
As
soon as practicably possible after commencement of any delay on account of which
the BUILDER claims that it is entitled under this CONTRACT to an extension of
the DELIVERY DATE of the VESSEL, excluding delays due to arbitration, the
BUILDER shall advise the BUYER in writing or by facsimile of the date such delay
commenced, the reasons thereof and, if possible, its estimated duration of the
probable delay in the delivery of the VESSEL, and shall supply the BUYER if
reasonably available with relevant information or evidence to justify the delay
claimed, Within one (1) week after such delay ends, the BUILDER shall likewise
advise the BUYER in writing or by facsimile of the date that such delay ended,
and also, shall specify the period of time by which the BUILDER claims the
DELIVERY DATE should be extended by reason of such delay. Failure of the BUYER
to object to the BUILDER’s notification of any claim for extension of the date
for delivery of the VESSEL within one (1) week after receipt by the BUYER of
such notification shall be deemed to be a waiver by the BUYER of its right to
object to such extension.
|
3.
|
RIGHT TO CANCEL FOR
EXCESSIVE DELAY
|
If
the total accumulated time of all permissible and non-permissible delays,
excluding delays due to (i) arbitration under Article XIII, (ii) the BUYER’s
defaults under Article XI, (iii) modifications and changes under Article V or
(iv) delays or defects in the BUYER’s supplies as stipulated in Article XII,
aggregates three hundred and sixty-five (365) days or more, then, the BUYER may,
at any time thereafter, cancel this CONTRACT by giving a written notice of
cancellation to the BUILDER. Such cancellation shall be effective as of the date
the notice thereof is received by the BUILDER.
If
the BUYER has not served the notice of cancellation as provided in the above or
Article III.1 hereof, the BUILDER may, at any time after expiration of the
accumulated time of the delay in delivery, either three hundred and sixty-five
(365) days in case of the delay in this Paragraph or two hundred and ten (210)
days in case of the delay in Article III.1, notify the BUYER of the future date
upon which the BUILDER estimates the VESSEL will be ready for delivery and
demand in writing or by facsimile that the BUYER make an election either to
cancel this CONTRACT or to consent to the delivery of the VESSEL at such future
date, in which case the BUYER shall, within seven (7) days after receipt of such
demand, make and notify the BUILDER of such election. If the BUYER elects to
consent to the delivery of the VESSEL at such future date (or other future date
as the parties may agree):
21
|
(a)
|
Such
future date shall become the contractual delivery date for the purposes of
this CONTRACT and shall be subject to extension by reason of permissible
delays as herein provided, and
|
|
(b)
|
If
the VESSEL is not delivered by such revised contractual delivery date (as
extended by reason of permissible delays), the BUYER shall have the same
right of cancellation upon the same terms as provided in the above and
Article III. 1.
|
If
the BUYER shall not make an election within seven (7) days as provided
hereinabove, the BUYER shall be deemed to have accepted such extension of the
DELIVERY DATE to the future delivery date indicated by the BUILDER.
|
4.
|
DEFINITION OF
PERMISSIBLE DELAYS
|
Delays
on account of the foregoing causes shall be understood to be permissible delays,
and are to be distinguished from non-permissible unauthorised delays on account
of which the CONTRACT PRICE of the VESSEL is subject to adjustment as provided
in Article III hereof.
(End
of Article)
22
ARTICLE IX - WARRANTY OF
QUALITY
|
1.
|
GUARANTEE OF MATERIAL
AND WORKMANSHIP
|
The
BUILDER, for the period of twelve (12) months from the date of delivery of the
VESSEL to the BUYER, guarantees the VESSEL and all parts and equipment thereof
that are manufactured or furnished by the BUILDER under this CONTRACT against
all defects which are directly due to defective materials, construction
miscalculation and/or poor workmanship, provided such defects have not been
caused by perils of the sea, rivers or navigations, or by normal wear and tear,
overloading, improper loading or stowage, corrosion of the materials, fire,
accidents at sea or elsewhere, or by incompetence, mismanagement, negligence or
wilful neglect or any alteration or addition to the VESSEL which has not
previously been approved by the BUILDER and provided that the cost of repairs of
such defects is not recoverable from insurers.
The
BUILDER will be responsible for all machinery or parts of machinery and all
constructions which are supplied by sub-contractors and will guarantee the above
mentioned for a period of twelve (12) months on the basis as laid down in this
Paragraph.
The
BUILDER further guarantee any repairs or replacements to the VESSEL made within
the Guarantee Period of twelve (12) months by it pursuant to this Article IX for
an independent period of twelve (12) months from the date of completion of such
repairs or replacements provided that the total accumulated period of guarantee
shall not exceed eighteen (18) months from the date of delivery of the
VESSEL.
|
2.
|
NOTICE OF
DEFECTS
|
The
BUYER or its duly authorized representative will notify the BUILDER in writing
or by e-mail or facsimile promptly after discovery of any defect for which a
claim is to be made under this guarantee.
The
BUYER’s written notice shall include full particulars as to the nature of the
defect and the extent of the damage caused thereby, but excluding consequential
damage as hereinafter provided. The BUILDER will be under no obligation with
respect to this guarantee in respect of any claim for defects discovered prior
to the expiry date of the guarantee, unless notice of such defects is received
by the BUILDER before the expiry date. However, e-mail or facsimile advice
received by the BUILDER within three (3) days after such expiry date that a
claim is forthcoming will be sufficient compliance with the requirement as to
time, provided that such e-mail or facsimile advice shall include at least a
brief description of the defect including the identity of the equipment, extent
of damage, name and number of any replacement part and description of any
remedial work required, and that full particulars are given to the BUILDER not
later than seven (7) days after the expiry date.
|
3.
|
REMEDY OF
DEFECTS
|
|
(a)
|
The
BUILDER shall remedy, at its expense, any defects, against which the
VESSEL is guaranteed under this Article, by making all necessary and
reasonably practicable repairs or replacements at the SHIPYARD or
elsewhere as provided for in (b)
hereinbelow.
|
| In such case, the VESSEL shall be taken at the BUYER’s cost and responsibility to the place selected, ready in all respects for such repairs or replacements and in any event, the BUILDER shall not be responsible for towage, dockage, wharfage, port charges and anything else incurred for the BUYER’s getting and keeping the VESSEL ready for such repairing or replacing. |
23
|
(b)
|
However,
if it is impractical (which shall include, but not be limited to, an
emergency) to bring the VESSEL to the SHIPYARD, the BUYER may cause the
necessary repairs or replacements to be made elsewhere which is deemed by
the BUYER with the consent of the BUILDER which shall not be unreasonably
withheld, to be suitable for the purpose, provided that, in such event,
the BUILDER may forward or supply replacement parts or materials under the
terms described in (c) hereinbelow, unless forwarding or supplying thereof
under the terms described in (c) hereinbelow would impair or delay the
operation or working schedule of the VESSEL. In the event that the BUYER
proposes to cause the necessary repairs or replacements to be made to the
VESSEL at any shipyard or works other than the SHIPYARD, the BUYER shall
first (but in all events as soon as reasonably possible) give the BUILDER
notice in writing or by e-mail or facsimile of the time and place such
repairs will be made, and if the VESSEL is not thereby delayed, or her
operation or working schedule is not thereby impaired, the BUILDER shall
have the right to verify by its own representative(s) the nature and
extent of the defects complained of. The BUILDER shall, in such case,
promptly advise the BUYER by e-mail or facsimile, after such examination
has been completed, of its acceptance or rejection of the defects as ones
that are covered by the guarantee herein provided. Upon the BUILDER’s
acceptance of the defects as justifying remedy under this Article, or upon
award of the arbitration so determining, the BUILDER shall compensate the
BUYER an amount equal to the reasonable cost of making the same repairs or
replacements at the SHIPYARD.
|
|
(c)
|
In
the event that it is necessary for the BUILDER to forward a replacement
for a defective part under this guarantee, replacement parts shall be
shipped to the BUYER under the terms of F.O.B. port of the country where
they are to be purchased.
|
|
(d)
|
The
BUILDER reserves the option to retrieve, at the BUILDER’s cost, any of the
replaced equipment/parts in case defects are remedied in accordance with
the provisions in this Article.
|
|
(e)
|
Any
dispute under this Article shall be referred to arbitration in accordance
with the provisions of Article XIII
hereof.
|
|
4.
|
EXTENT OF THE
BUILDER’S LIABILITY
|
|
(a)
|
After
delivery of the VESSEL the responsibility of the BUILDER in respect of
and/or in connection with the VESSEL and/or this CONTRACT shall be limited
to the extent expressly provided in the Paragraph of this Article. Except
as expressly provided in the foregoing Paragraph, in no circumstances and
on no ground whatsoever shall the BUILDER have any responsibility or
liability whatsoever or howsoever arising in respect of or in connection
with the VESSEL or this CONTRACT after the delivery of the VESSEL.
Further, but without in any way limiting the generality of the foregoing,
the BUILDER shall have no liability or responsibility whatsoever or
howsoever arising for or in connection with any consequential or special
losses, damages or expenses (including but not limited to loss of time,
loss of profit or earnings or demurrage directly or indirectly caused),
any pecuniary loss or expense, any liability to any third party or any
fine, compensation, penalty or other payment or sanction incurred by or
imposed upon the BUYER or any other party whatsoever in relation to or in
connection with this CONTRACT or the
VESSEL.
|
|
(b)
|
The
BUILDER shall be under no obligation with respect to defects in respect of
which the BUILDER has not received notice in accordance with Paragraph 2
of this Article by the expiry date of the guarantee specified in Paragraph
1, nor in any event shall the BUILDER be liable for any worsening of the
defects after the expiry date of the
guarantee.
|
|
(c)
|
The
BUILDER shall under no circumstances be liable for defects in the VESSEL
or any part of equipment thereof caused by perils of the sea, rivers or
navigations, or by normal wear and tear, overloading, improper loading or
stowage, corrosion of the materials, fire, accidents at sea or elsewhere,
or by incompetence, mismanagement, negligence or wilful neglect or any
alteration or addition on the part of the BUYER, its employees or agents
or any other person on or doing work on the VESSEL, including the VESSEL’s
officers, crew and passengers. Likewise, the BUILDER shall not be liable
for defects in the VESSEL or any part of equipment thereof that are due to
|
24
| repairs carried out by any other than the BUILDER or which have not been carried out in accordance with the procedure set out in Paragraph 3 (b) of this Article, |
25
|
(d)
|
The
BUILDER shall not be obliged to repair, not be liable for, damage to the
VESSEL or any part of the equipment thereof, which after delivery of the
VESSEL, is caused other than by the defects of the nature specified in
this Article. The guarantees contained as hereinabove in this Article
replace and exclude any other liability, guarantee, warranty and/or
condition imposed or implied by statute, common law, custom, contract
(including this CONTRACT) or otherwise on the part of the BUILDER by
reason of the construction and sale of the VESSEL for and to the BUYER or
for any other reason whatsoever.
|
(End
of Article)
26
ARTICLE X -
PAYMENT
|
1.
|
CURRENCY
|
All
payments under this CONTRACT shall be made in United States
Dollars.
|
2.
|
TERMS OF
PAYMENT
|
The
payments of the CONTRACT PRICE shall be made as follows :
|
(a)
|
First
Instalment
|
| Twenty per cent (20%) of the CONTRACT PRICE amounting to U.S. Dollars Sixteen Million Two Hundred Thousand (US$16,200,000.-) shall be paid within five (5) business days after receipt by the BUYER’s bank of a tested telex or a SWIFT confirmation of the refund guarantor that the Refund Guarantee mentioned in Paragraph 8 of this Article has been issued. |
| Under this CONTRACT, in counting the business days, only Saturdays and Sundays are excepted. When a due date falls on a day when banks are not open for business in New York, N.Y., U.S.A. or Oslo, Norway, such due date shall fall due upon the first business day next following. |
|
(b)
|
Second
Instalment
|
| Twenty per cent (20%) of the CONTRACT PRICE amounting to U.S. Dollars Sixteen Million Two Hundred Thousand (US$16,200,000.-) shall be paid within five (5) business days of receipt by the BUYER of an e-mail or a facsimile advice from the BUILDER that the steel cutting of the VESSEL has been commenced. |
|
(c)
|
Third
Instalment
|
| Twenty per cent (20%) of the CONTRACT PRICE amounting to U.S. Dollars Sixteen Million Two Hundred Thousand (US$16,200,000.-) shall be paid within five (5) business days of receipt by the BUYER of an e-mail or facsimile advice from the BUILDER that the first block of the keel has been laid. |
|
(d)
|
Fourth
Instalment
|
| Twenty per cent (20%) of the CONTRACT PRICE amounting to U.S. Dollars Sixteen Million Two Hundred Thousand (US$16,200,000,-) shall be paid within five (5) business days of receipt by the BUYER of an e-mail or a facsimiled advice from the BUILDER that the launching of the VESSEL has been completed. |
|
(e)
|
Fifth
Instalment
|
| Twenty per cent (20%) of the CONTRACT PRICE amounting to U.S. Dollars Sixteen Million Two Hundred Thousand (US$16,200,000.-) plus or minus any increase or decrease due to modifications and/or adjustment, if any, arising prior to delivery of the VESSEL of the CONTRACT PRICE under Articles III and V of this CONTRACT shall be paid to the BUILDER concurrently with the delivery of the VESSEL. (The date stipulated for payment of each of the five instalments mentioned above is hereinafter in this Article and in Article XI referred to as the “DUE DATE” of that instalment). |
27
It
is understood and agreed upon by the BUILDER and the BUYER that all payments
under the provisions of this Article shall not be delayed or withheld by the
BUYER due to any dispute or disagreement of whatsoever nature arising between
the BUILDER and the BUYER. Should there be any dispute in this connection, the
matter shall be dealt with in accordance with the provisions of arbitration in
Article XIII hereof. Expenses for remitting payments and any other expenses
connected with such payments shall be for the account of the BUYER.
|
3.
|
DEMAND FOR
PAYMENT
|
At
least fourteen (14) days prior to the date of each event provided in Paragraph 2
of this Article on which any payment shall fall due hereunder, with the
exception of the payment of the first instalment, the BUILDER shall notify the
BUYER by e-mail or facsimile of the date such payment shall become
due.
The
BUYER shall immediately acknowledge receipt of such notification by e-mail or
facsimile to the BUILDER, and make payment as set forth in this Article. If the
BUILDER fails to receive the BUYER’s said acknowledgement within three (3) days
after sending the aforementioned notification, the BUILDER shall promptly e-mail
or facsimile to the BUYER a second notification of similar import. The BUYER
shall immediately acknowledge by e-mail or facsimile receipt of the foregoing
second notification regardless of whether or not the first notification was
acknowledged as aforesaid.
|
4.
|
METHOD OF
PAYMENT
|
|
(a)
|
All
the pre-delivery payments and the payment due on delivery in settlement of
the CONTRACT PRICE as provided for in Paragraph 2 of this Article shall be
made in U.S. Dollars on or before the DUE DATE thereof by telegraphic
transfer as follows;
|
|
(i)
|
The
payment of the first, second, third and fourth instalments shall be made
to the account of XXXXXX Bank (hereinafter called the “BUILDER’s Bank”)
(Account No.: XXX-XXXXXX) with XXXXXX Bank as described in the following
reference in favor of the BUILDER, as designated and notified by the
BUILDER at least three (3) business days prior to the DUE
DATE.
|
|
Reference to the
BUILDER’s Bank
|
||
|
Name
: XXXXXX Bank
Address
: XXXXXXXXXX
Telex
Number: XXXXXXXXX
Telefax
Number: XXXXXXXX
Swift
Code: XXXXXXXXXXX
Account
Number: XXX-XXXXXX
Through
Bank: XXXXXX Bank
|
|
(ii)
|
The
fifth instalment as provided for in Paragraph 2.(e) of this Article shall
be deposited at the account of the BUILDER’s Bank or, if the BUILDER
requires, at the account of the BUILDER with any other bank by telegraphic
transfer remittance at least three (3) business days prior to the
scheduled delivery date of the VESSEL notified by the BUILDER, with
instructions that the said instalment is payable to the BUILDER against
presentation by the BUILDER to the BUILDER’s Bank or any other bank, as
the case may be, of a duplicate original copy of the PROTOCOL OF DELIVERY
AND ACCEPTANCE of the VESSEL signed by the BUILDER and the
BUYER.
|
|
(b)
|
Simultaneously
with each of such payments, the BUYER shall advise the BUILDER of the
details of the payments by e-mail or facsimile and at the same time, the
BUYER shall cause the BUYER’s remitting Bank to advise the BUILDER’s Bank
of the details of such payments by authenticated bank cable or
telex.
|
28
|
5.
|
REFUND BY THE
BUILDER
|
The
payments made by the BUYER to the BUILDER prior to delivery of the VESSEL shall
constitute advances to the BUILDER. If the VESSEL is rejected by the BUYER in
accordance with the terms of this CONTRACT, or except in the case of rescission
or cancellation of this CONTRACT by the BUILDER under the provisions of Article
XI hereof, if the BUYER terminates, cancels or rescinds this CONTRACT pursuant
to any of the provisions of this CONTRACT specifically permitting the BUYER to
do so, the BUILDER shall forthwith refund to the BUYER, in U.S. Dollars, the
full amount of total sums paid by the BUYER to the BUILDER in advance of
delivery together with interest thereon as herein provided.
The
transfer and other bank charges of such refund shall be for the BUILDER’s
account. The interest rate of the refund, as above provided, shall be six per
cent (6%) per annum from the date following the date of receipt by the BUILDER
of the pre-delivery instalment(s) to the date of remittance by telegraphic
transfer of such refund.
It
is hereby understood by both parties that payment of any interest provided
herein is by way of liquidated damages due to cancellation of this CONTRACT and
not by way of compensation for use of money.
If
the BUILDER is required to refund to the BUYER the instalments paid by the BUYER
to the BUILDER as provided in this Paragraph, the BUILDER shall return to the
BUYER all of the BUYER’s supplies as stipulated in Article XII which were not
incorporated into the VESSEL and pay to the BUYER an amount equal to the cost to
the BUYER of those supplies incorporated into the VESSEL.
|
6.
|
TOTAL
LOSS
|
If
there is a total loss or a constructive total loss of the VESSEL prior to
delivery thereof, the BUILDER shall proceed according to the mutual agreement of
the parties hereto either:
|
(a)
|
to
build another vessel in place of the VESSEL so lost and deliver it under
this CONTRACT to the BUYER, provided that the parties hereto shall have
agreed in writing to a reasonable cost and time for the construction of
such vessel in place of the lost VESSEL;
or
|
|
(b)
|
to
refund to the BUYER the full amount of the total sums paid by the BUYER to
the BUILDER under the provisions of Paragraph 2 of this Article together
with interest thereon at the rate of six per cent (6%) per annum from the
date following the date of receipt by the BUILDER of such pre-delivery
instalment(s) to the date of payment by the BUILDER to the BUYER of the
refund.
|
| If the parties hereto fail to reach such agreement within one (1) month after the VESSEL is determined to be a total loss or constructive total loss, the provisions of (b) hereinabove shall be applied. |
|
7.
|
DISCHARGE OF
OBLIGATIONS
|
Such
refund as provided in the foregoing Paragraphs 5 and 6 by the BUILDER to the
BUYER shall forthwith discharge all the obligations, duties and liabilities of
each of the parties hereto to the other except the claims of the BUILDER against
the BUYER, if any, under this CONTRACT. Any and all refunds or payments due to
the BUYER under this CONTRACT shall be effected by telegraphic transfer to the
account specified by the BUYER.
29
|
8.
|
REFUND
GUARANTEE
|
The
BUILDER shall furnish to the BUYER by a tested telex or SWIFT through the
BUYER’s bank an assignable letter of guarantee issued by the BUILDER’s Bank for
the refund of the pre-delivery instalments plus interest as aforesaid to the
BUYER under or pursuant to Paragraph 5 above in the form annexed hereto as
Exhibit “A”. All expenses in issuing and maintaining the letter of guarantee
described in this Paragraph shall be borne by the BUILDER. In case of SWIFT, the
BUYER shall advise the BUILDER of the details of the BUYER’s bank including the
SWIFT address upon execution of this CONTRACT.
|
9.
|
PERFORMANCE
GUARANTEE
|
Upon
signing this CONTRACT, the BUYER shall provide the BUILDER with an irrevocable
and unconditional Corporate Guarantee issued by a Corporate Guarantor acceptable
to the BUILDER for the due and faithful performance by the BUYER of all its
liabilities and responsibilities under the CONTRACT including, but not limited
to, the payment of the CONTRACT PRICE and taking delivery of the VESSEL, in the
form annexed hereto as Exhibit “B”.
(End
of Article)
30
ARTICLE XI - BUYER’S
DEFAULT
|
1.
|
DEFINITION OF
DEFAULT
|
The
BUYER shall be deemed to be in default under this CONTRACT in the following
cases:
|
(a)
|
If
the first, second, third, or fourth instalment is not paid to the BUILDER
within respective DUE DATE of such instalments;
or
|
|
(b)
|
If
the fifth instalment is not deposited at the account of the BUILDER’s Bank
or at the account of the BUILDER with any other bank designated by the
BUILDER in accordance with Article X.4. (a)(ii) hereof or if the said
fifth instalment deposit is not released to the BUILDER against
presentation by the BUILDER of a duplicate original copy of the PROTOCOL
OF DELIVERY AND ACCEPTANCE; or
|
|
(c)
|
If
the BUYER fails to take delivery of the VESSEL when the VESSEL is duly
tendered for delivery by the BUILDER under the provisions of Article VII
hereof; or
|
|
(d)
|
If
an order or an effective resolution shall be passed for winding up of the
BUYER (except for the purpose of reorganization, merger or amalgamation);
or
|
|
(e)
|
If
the BUYER fails to be in punctual, due and full compliance with any of its
obligations under this CONTRACT.
|
In
case the BUYER is in default of any of its obligations under this CONTRACT, the
BUILDER is entitled to and shall have the following rights, powers and remedies
in addition to such other rights, powers and remedies as the BUILDER may have
elsewhere in this CONTRACT and/or at law, at equity or otherwise.
|
2.
|
EFFECT OF THE BUYER’S
DEFAULT ON OR BEFORE THE DELIVERY OF THE
VESSEL
|
If
the BUYER shall be in default as provided in Paragraph 1 above of its
obligations under this CONTRACT, then;
|
(a)
|
The
DELIVERY DATE of the VESSEL shall be extended automatically for the actual
period of such default and the BUILDER shall not be obliged to pay any
liquidated damages for the delay in delivery of the VESSEL caused
thereby.
|
|
(b)
|
The
BUYER shall pay to the BUILDER interest at the rate of six per cent (6%)
per annum in respect of the instalment(s) in default from the respective
DUE DATE to the date of actual receipt by the BUILDER of the full amount
of such instalment(s).
|
|
(c)
|
If
the BUYER is in default in payment of any of the instalment(s) due and
payable prior to or simultaneously with the delivery of the VESSEL, the
BUILDER shall, in writing or by facsimile, notify the BUYER to that
effect, and the BUYER shall, upon receipt of such notification, forthwith
acknowledge in writing or by facsimile to the BUILDER that such
notification has been received.
|
|
(d)
|
If
any of the BUYER’s default continues for a period of seven (7) days after
the BUILDER’s notification to the BUYER of such default, the BUILDER may,
at its option, rescind this CONTRACT by serving upon the BUYER a written
notice or a facsimile notice of rescission confirmed in
writing.
|
31
|
(e)
|
In
the event of such cancellation by the BUILDER of this CONTRACT due to the
BUYER’s default as provided for in paragraph 1 above, the BUILDER shall be
entitled to retain and apply the instalments already paid by the BUYER to
the recovery of the BUILDER’s loss and damage including, but not being
limited to, reasonable estimated profit due to the BUYER’s default and the
cancellation of this CONTRACT and at the same time the BUILDER shall have
the full right and power either to complete or not to complete the VESSEL
which is the sole property of the BUILDER as it deems fit, and to sell the
VESSEL at a public or private sale on such terms and conditions as the
BUILDER thinks fit without being answerable for any loss or
damage.
|
The
proceeds received by the BUILDER from the sale shall be applied in addition to
the instalment(s) retained by the BUILDER as mentioned hereinabove as
follows:
|
First,
|
in
payment of all reasonable costs and expenses of the sale of the VESSEL,
including interest thereon at six per cent (6%) per annum from the
respective date of payment of such costs and expenses aforesaid to the
date of sale on account of the BUYER’s
default.
|
|
Second,
|
if
the VESSEL has been completed, in or towards satisfaction of the unpaid
balance of the CONTRACT PRICE, to which shall be added the cost of all
additional work and extras agreed by the BUYER including interest thereon
at six per cent (6%) per annum from the respective DUE DATE of the
instalment in default to the date of sale, or if the VESSEL has not been
completed, in or towards satisfaction of the unpaid amount of the cost
incurred by the BUILDER prior to the date of sale on account of
construction of the VESSEL, including work, labour, materials and
reasonably estimated profit which the BUILDER would have been entitled to
receive if the VESSEL had been completed and delivered plus interest
thereon at six per cent (6%) per annum from the respective DUE DATE of the
instalment in default to the date of
sale.
|
|
Third,
|
the
balance of the proceeds, if any, shall belong to the BUYER, and shall
forthwith
be paid over to the BUYER by the
BUILDER.
|
32
In
the event of the proceeds from the sale together with instalment(s) retained by
the BUILDER being insufficient to pay the BUILDER, the BUYER shall be liable for
the deficiency and shall pay the same to the BUILDER upon its
demand.
(End
of Article)
33
ARTICLE XII - BUYER’S
SUPPLIES
|
1.
|
RESPONSIBILITY OF THE
BUYER
|
The
BUYER shall, at its cost and expense, supply all the BUYER’s supplies as
specified in Paragraph 1.7.2 of the SPECIFICATIONS (hereinafter called the
“BUYER’S SUPPLIES”), to the BUILDER at the SHIPYARD in perfect condition ready
for installation and in accordance with the time schedule to be furnished by the
BUILDER to meet the building schedule of the VESSEL.
In
order to facilitate the installation of the BUYER’S SUPPLIES by the BUILDER, the
BUYER shall furnish the BUILDER with the necessary plans, instruction books,
test report and all test certificates required by the BUILDER and shall cause
the representative(s) of the makers of the BUYER’S SUPPLIES to give the BUILDER
any advice, instructions or assistance which the BUILDER may reasonably require
in the installation or adjustment thereof at the SHIPYARD, all without cost or
expense to the BUILDER.
The
BUYER shall be liable for any expense incurred by the BUILDER for repair of the
BUYER’S SUPPLIES due to defective design or materials, poor workmanship or
performance or due to damage in transit and the DELIVERY DATE of the VESSEL
shall be extended for the period of such repair if such repair shall affect the
delivery of the VESSEL.
Commissioning
into good order of the BUYER’S SUPPLIES during and after installation on board
shall be made at the BUYER’s expense by the representative of respective maker
or the person designated by the BUYER in accordance with the BUILDER’s building
schedule.
Should
the BUYER fail to deliver to the BUILDER the BUYER’S SUPPLIES and the necessary
document or advice for such supplies within the time specified by the BUILDER,
the DELIVERY DATE of the VESSEL shall automatically be extended for the period
of such delay if such delay in delivery shall affect the delivery of the VESSEL.
In such event, the BUYER shall pay to the BUILDER all losses and damages
sustained by the BUILDER due to such delay in the delivery of the BUYER’S
SUPPLIES and such payment shall be made upon delivery of the VESSEL, provided,
however, that the BUILDER shall have:
|
(a)
|
furnished
the BUYER with the time schedule referred to above, two (2) months prior
to installation of the BUYER’S SUPPLIES
and
|
|
(b)
|
given
the BUYER written notice of any delay in delivery of the BUYER’S SUPPLIES
and the necessary document or advice for such supplies as soon as the
delay occurs which might give rise to a claim by the BUILDER under this
Paragraph.
|
Furthermore,
if the delay in delivery of the BUYER’S SUPPLIES and the necessary document or
advice for such supplies should exceed ten (10) days from the date specified by
the BUILDER, the BUILDER shall be entitled to proceed with construction of the
VESSEL without installation of such items (regardless of their nature or
importance to the BUYER or the VESSEL) in or on the VESSEL without prejudice to
the BUILDER’s right hereinabove provided, and the BUYER shall accept the VESSEL
so completed.
|
2.
|
RESPONSIBILITY OF THE
BUILDER
|
The
BUILDER shall be responsible for storing, safekeeping and handling the BUYER’S
SUPPLIES which the BUILDER is required to install on board the VESSEL under the
SPECIFICATIONS after delivery of such supplies to the SHIPYARD, and shall
install such supplies on board the VESSEL at the BUILDER’s expense unless
otherwise specified in the SPECIFICATIONS.
34
However,
the BUILDER shall not be responsible for the quality, performance or efficiency
of any equipment included in the BUYER’S SUPPLIES and is under no obligation
with respect to the guarantee of such equipment against any defects caused by
poor quality, performance or efficiency of the BUYER’S SUPPLIES. If any of the
BUYER’S SUPPLIES is lost or damaged while in the custody of the BUILDER, the
BUILDER shall, if the loss or damage is due to wilful default or negligence on
its part, be responsible for such loss or damage.
(End
of Article)
35
ARTICLE XIII –
ARBITRATION
|
1.
|
APPOINTMENT OF THE
ARBITRATOR
|
If
any dispute or difference shall arise between the parties hereto concerning any
matter or thing herein contained, or the operation or construction thereof, or
any matter or thing in any way connected with this CONTRACT or the rights,
duties or liabilities of either party under or in connection with this CONTRACT,
then, in every such case, the dispute or difference shall be referred to
arbitration in London by a sole arbitrator. The arbitrator shall be appointed by
agreement within fourteen (14) days of first written notification of either
party to the other of intention to arbitrate such dispute or difference, or in
default of such agreement, upon the application of either of the parties, by the
President for the time being of the London Maritime Arbitrators Association who
shall in making any such appointment have due regard to the requirement for an
expeditious resolution of the dispute and in particular the availability of any
arbitrator so appointed for an early hearing date.
|
2.
|
LAWS
APPLICABLE
|
Any
arbitration arising hereunder shall be governed by and construed in accordance
with the Arbitration Xxx 0000 of England or any statutory modification or
re-enactments thereof for the time being in force. The award of the arbitrator
shall be final and binding upon parties hereto.
|
3.
|
PROCEEDINGS
|
In
the event of any dispute or difference arising or occurring prior to delivery to
or acceptance by, the BUYER of the VESSEL being referred to arbitration, the
parties hereby acknowledge that time is of the essence in obtaining an award
from the arbitrator on such dispute or difference and the parties hereby agree
that the arbitration shall be conducted according to the following
timetable:
|
(a)
|
The
claimant in the arbitration to serve points of claim within fourteen (14)
days of the appointment of the
arbitrator.
|
|
(b)
|
The
respondent in the arbitration to serve points of defence and points of
counterclaim, if any, within fourteen (14) days
thereafter.
|
|
(c)
|
The
claimant to serve points of reply and defence to counterclaim, if any,
within seven (7) days thereafter and the hearing of the arbitration to
commence within twelve (12) weeks of the appointment of the
arbitrator.
|
36
|
4.
|
ALTERATION OF DELIVERY
OF THE VESSEL
|
In
the event of the arbitration of any dispute or difference arising or occurring
prior to delivery to, or acceptance by the BUYER of the VESSEL, the award by the
arbitrator shall include a finding as to whether or not the contractual delivery
date of the VESSEL should, as a result of such dispute, be in any way altered
thereby.
(End
of Article)
37
ARTICLE XIV - SUCCESSORS AND
ASSIGNS
The
BUILDER agrees that, prior to delivery of the VESSEL, this CONTRACT may, with
the prior written approval of the BUILDER, which the BUILDER shall not
unreasonably withhold, be transferred to and the title thereof may be taken by
another company. In the event of any assignment pursuant to the terms of this
CONTRACT, the assignee, its successors and assigns shall succeed to all the
rights and obligations of the BUYER under this CONTRACT. However, the BUYER
shall remain responsible for performance by the assignee, its successors and
assigns of all the BUYER’s obligations, liabilities and responsibilities under
this CONTRACT. It is understood that any expenses or charges incurred due to the
transfer of this CONTRACT shall be for the account of the BUYER.
The
BUILDER shall have the right to assign this CONTRACT at any time after the
effective date hereof, provided that prior written agreement is obtained from
the BUYER.
(End
of Article)
38
ARTICLE XV - TAXES AND
DUTIES
|
1.
|
TAXES
|
Unless
otherwise expressly provided for in this CONTRACT, all costs and taxes including
stamp duties, if any, incurred in or levied by any country except Korea in
connection with this CONTRACT shall be borne by the BUYER and corresponding
costs and taxes in Korea, before delivery of the VESSEL, if any, shall be borne
by the BUILDER.
|
2.
|
DUTIES
|
The
BUILDER shall hold the BUYER harmless from any payment of duty imposed in Korea
upon materials or supplies which, under the terms of this CONTRACT, or
amendments thereto, may be supplied by the BUYER from abroad for the
construction of the VESSEL.
The
BUILDER shall likewise hold the BUYER harmless from any payment of duty imposed
in Korea in connection with materials or supplies for operation of the VESSEL,
including running stores, provisions and supplies necessary to stock the VESSEL
for its operation. This indemnity does not, however, extend to any items
purchased by the BUYER for use in connection with the VESSEL which are not
absolutely required for the construction or operation of the
VESSEL.
(End
of Article)
39
ARTICLE XVI - PATENTS, TRADEMARKS AND
COPYRIGHTS
|
1.
|
PATENTS, TRADEMARKS
AND COPYRIGHTS
|
Machinery
and equipment of the VESSEL, whether made or furnished by the BUILDER under this
CONTRACT, may bear the patent numbers, trademarks, or trade names of the
manufacturers. The BUILDER shall defend and save harmless the BUYER from all
liabilities or claims for or on account of the use of any patents, copyrights or
design of any nature or kind, or for the infringement thereof including any
unpatented invention made or used in the performance of this CONTRACT and also
for any costs and expenses of litigation, if any in connection therewith. No
such liability or responsibility shall be with the BUILDER with regard to
components and/or equipment and/or design supplied by the BUYER.
Nothing
contained herein shall be construed as transferring any patent or trademark
rights or copyrights in equipment covered by this CONTRACT, and all such rights
are hereby expressly reserved to the true and lawful owners
thereof.
|
2.
|
RIGHTS TO THE
SPECIFICATIONS, PLANS, ETC.
|
The
BUILDER retains all rights with respect to the SPECIFICATIONS, plans and working
drawings, technical descriptions, calculations, test results and other data,
information and documents concerning the design and construction of the VESSEL
and the BUYER shall not disclose the same or divulge any information contained
therein to any third parties, including but not limited to any other
shipbuilders, without the prior written consent of the BUILDER, excepting where
it is necessary for usual operation, repair and maintenance of the VESSEL. In
case the BUYER is in breach of its obligation under this Article, the BUILDER
shall be entitled to any rights, powers and remedies in this CONTRACT and/or at
law, at equity or otherwise to recover any damages caused by the breach of the
BUYER.
(End
of Article)
40
ARTICLE XVII - INTERPRETATION AND
GOVERNING LAW
This
CONTRACT has been prepared in English and shall be executed in duplicate and in
such number of additional copies as may be required by either party
respectively. The parties hereto agree that the validity and interpretation of
this CONTRACT and of each Article and part thereof shall be governed by the laws
of England.
(End
of Article)
41
ARTICLE XVIII – NOTICE
Any
and all notices, requests, demands, instructions, advices and communications in
connection with this CONTRACT shall be written in English, sent by registered
air mail or e-mail or facsimile and shall be deemed to be given when first
received whether by registered mail or facsimile. They shall be addressed as
follows, unless and until otherwise advised :
|
To
the BUILDER:
|
DAEHAN
SHIPBUILDING CO., LTD.
|
|
|
000,
Xxxxxx-Xx, Xxxxxx-Xx, Xxxxx Xxxx, Xxxxxxx, Xxxxx
x/x
0xx Xxxxx, Xxxxxxxx Xxxxxxxx, 00-0, 0-Xx, Xxxxxx-Xx,
Xxxx-Xx,
Xxxxxxx, Xxxxx
Attn: [
]
Tel
:
[
]
Facsimile
:
[
]
E-mail
:
[
]
|
||
|
To
the BUYER :
|
GOLDEN
OCEAN GROUP LIMITED
|
|
|
Par-la-Ville
Place, 00 Xxx-xx-Xxxxx Xxxx, Xxxxxxxx XX 08,
Bermuda
c/o
GOLDEN OCEAN MANAGEMENT ASIA PTE LTD.
000
Xxxxxxxx Xxxx, #00-00 Xxxxxxx Xxxxx, Xxxxxxxxx 000000
Attn: [
]
Tel
:
[
]
Facsimile:
[
]
E-mail:
[
]
|
The
said notices shall become effective upon receipt of the letter or e-mail or
facsimile communication by the receiver thereof. Where a notice by e-mail or
facsimile is concerned which is required to be confirmed by letter, then, unless
the CONTRACT or the relevant Article thereof otherwise requires, the notice
shall become effective upon receipt of the e-mail or facsimile.
(End
of Article)
42
ARTICLE XIX - EFFECTIVENESS OF THIS
CONTRACT
This
CONTRACT shall become effective upon signing by the parties hereto.
(End
of Article)
43
ARTICLE XX –
EXCLUSIVENESS
This
CONTRACT shall constitute the only and entire agreement between the parties
hereto, and unless otherwise expressly provided for in this CONTRACT, all other
agreements, oral or written, made and entered into between the parties prior to
the execution of this CONTRACT shall be null and void.
(End
of Article)
44
IN
WITNESS WHEREOF, the parties hereto have caused this CONTRACT to be duly
executed on the date and year first above written.
|
BUYER
|
BUILDER
|
||||||
|
For
and on behalf of
|
For
and on behalf of
|
||||||
|
GOLDEN
OCEAN GROUP LIMITED
|
DAEHAN
SHIPBUILDING CO., LTD.
|
||||||
|
By:
|
By:
|
||||||
|
Name:
|
Xxxxxx
Xxxx
|
Name:
|
Min
Ho Song
|
||||
|
Title:
|
Attorney-in-fact
|
Title:
|
Attorney-in-fact
|
||||
| WITNESS: | WITNESS: |
45
EXHIBIT
“A”
LETTER
OF GUARANTEE
Date
:_______________
Gentlemen:
We
hereby open our irrevocable letter of guarantee number ______________ in favor
of GOLDEN OCEAN GROUP LIMITED or its nominee (hereinafter called the “BUYER”)
for account of DAEHAN SHIPBUILDING CO., LTD., Korea (hereinafter called the
“BUILDER”) as follows in connection with the shipbuilding contract dated 30th
November, 2006 (hereinafter called the “CONTRACT”) made by and between the BUYER
and the BUILDER for the construction of one (1) 170,500 DWT Class Bulk Carrier
having the BUILDER’s Hull No. HN-101[ ] (hereinafter called the
“VESSEL”).
If,
in connection with the terms of the CONTRACT, the BUYER shall become entitled to
a refund of the advance payments made to the BUILDER prior to the delivery of
the VESSEL, we hereby irrevocably guarantee the repayment of the same to the
BUYER within thirty (30) days after demand not exceeding US$16,200,000.- (Say
U.S. Dollars Sixteen Million Two Hundred Thousand only) together with interest
thereon at the rate of six per cent (6%) per annum from the date following the
date of receipt by the BUILDER to the date of remittance by telegraphic transfer
of such refund.
The
amount of this guarantee will be automatically increased upon the BUILDER’s
receipt of the second, third and fourth instalments plus interest thereon as
provided in the CONTRACT, but in any eventuality the amount of this guarantee
shall not exceed the total sum of US$64,800,000.- (Say U.S. Dollars Sixty Four
Million Eight Hundred Thousand only) plus interest thereon at the rate of six
per cent (6%) per annum from the date following the date of the BUILDER’s
receipt of each instalment to the date of remittance by telegraphic transfer of
the refund.
The
payment by the undersigned under this guarantee (subject to the second and third
paragraph hereof) shall be made upon simple receipt by us of written demand from
you including a signed statement certifying that the BUYER’s demand for refund
has been made in conformity with Article X of the CONTRACT and the BUILDER has
failed to make the refund.
Notwithstanding
the provisions hereinabove, in the event that within thirty (30) days from the
date of your claim to the BUILDER referred to above, we receive notification
from you or the BUILDER accompanied by written confirmation to the effect that
your claim to cancel the CONTRACT or your claim for refundment thereunder has
been disputed and referred to arbitration in accordance with the provisions of
the CONTRACT, we shall under this guarantee, refund to you the sum adjudged to
be due to you by the BUILDER pursuant to the award made under such arbitration
immediately upon receipt from you of a demand for the sums so adjudged and a
copy of the award. And in any case the sum will not exceed US$64,800,000.- (Say
U.S. Dollars Sixty Four Million Eight Hundred Thousand only) together with
interest thereon at the rate of six per cent (6%) per annum from the date
following the date of receipt by the BUILDER to the date of remittance by
telegraphic transfer of such refund.
This
letter of guarantee shall become null and void upon receipt by the BUYER of the
sum guaranteed hereby or upon acceptance by the BUYER of the delivery of the
VESSEL in accordance with the terms of the CONTRACT and, in either case, the
BUYER shall return this letter of guarantee to us or shall arrange with their
bank to confirm us by SWIFT (our SWIFT address : ______________________ ) that
this letter of guarantee has been null and void.
This
letter of guarantee is assignable and valid from the date of this Letter of
Guarantee until such time as the VESSEL is delivered by the BUILDER to the BUYER
in accordance with the provisions of the CONTRACT.
This
guarantee shall be governed by and construed in accordance with the laws of
England and the undersigned hereby submits to the non-exclusive jurisdiction of
the Courts of England.
|
Very
truly yours,
|
|
|
For
and on behalf of
XXXXXX
Bank
|
|
|
By:__________________________
Name:
Title:
|
A-1
EXHIBIT
“B”
DAEHAN
SHIPBUILDING CO., LTD.
000,
Xxxxxx-Xx, Xxxxxx-Xx, Xxxxx Xxxx
Xxxxxxx,
Xxxxx
Date
:___________________
PERFORMANCE
GUARANTEE
Gentlemen,
In
consideration of your executing a shipbuilding contract (hereinafter called the
“CONTRACT”) dated 30th November, 2006 with GOLDEN OCEAN GROUP LIMITED or its
nominee (hereinafter called the “BUYER”) providing for the construction of one
(1) 170,500 DWT Class Bulk Carrier haying the BUILDER’s Hull No.
HN-101[ ] (hereinafter called the “VESSEL”), and providing, among
other things, for payment of the contract price amounting to United States
Dollars Eighty One Million only (US$81,000,000.-) for the VESSEL, prior to, upon
and after the delivery of the VESSEL, the undersigned, as a primary obligor and
not as a surety merely, hereby unconditionally and irrevocably guarantees to
you, your successors and assigns, the due and faithful performance by the BUYER
of all its liabilities and responsibilities under the CONTRACT and any
supplements, amendments, changes or modifications hereinafter made thereto
including but not limited to, due and prompt payment of the contract price
(whether on account of principal, interest or otherwise) by the BUYER to you,
your successors and assigns under the CONTRACT, notwithstanding any obligation
of the BUYER being or becoming unenforceable by defect in or want of its powers,
(hereby expressly waiving notice of any such supplement, amendment, change or
modification as may be agreed to by the BUYER) and confirms that this guarantee
shall be fully applicable to the CONTRACT whether so supplemented, amended,
changed or modified and if it shall be assigned by the BUYER in accordance with
the terms of the CONTRACT. This guarantee will expire on delivery of the VESSEL
to the BUYER.
The
undersigned hereby certifies, represents and warrants that all acts, conditions
and things required to be done and performed and to have occurred precedent to
the creation and issuance of this guarantee, and to constitute the guarantee the
valid and legally binding obligation of the undersigned enforceable in
accordance with its terms have been done and performed and have occurred in due
and strict compliance with applicable laws.
The
payment by the undersigned under this guarantee shall be made forthwith upon
receipt by us of written demand from you including a statement that the BUYER is
in default of payment of the amounts (including, but not limited to, the
instalment(s) payable prior to or upon delivery of the VESSEL) that were due
under the CONTRACT, without requesting you to take any or further procedure or
step against the BUYER. In the event that any withholding or deduction is
imposed by any law, the undersigned will pay such additional amount as may be
necessary in order that the actual amount received after deduction or
withholding shall equal to the amount that would have been received if such
deduction or withholding were not required.
This
guarantee shall be governed by and interpreted in accordance with the laws of
England and the undersigned hereby submits to the non-exclusive jurisdiction of
the Courts of England and appoints __________________________________ to receive
service of proceedings in such courts on its behalf.
|
Very
truly yours,
|
|
|
For
and on behalf of BUYER
|
|
|
By:__________________________
Name:
Title:
|
B-1
FORM OF
NOVATION
AGREEMENT
THIS AGREEMENT is dated 21
June, 2007 and is made BETWEEN:
|
(I)
|
Golden
Ocean Group Ltd., a corporation incorporated and existing under the laws
of Bermuda having its registered office at Par-la-Ville Place, 14
Par-la-Ville Road, Xxxxxxxx XX 08, Bermuda (the “BUYER”),
and
|
|
(II)
|
Daehan
Shipbuilding Co. Ltd. a corporation incorporated and existing under the
laws of the Republic of Korea (the “BUILDER”) having its
registered office at 748, Woodoo-Ri, Dolsand-Up, Yeosu City, Jeonnam,
Korea, and
|
|
(III)
|
KTL
Belgravia [ ] Inc, a corporation incorporated and existing
under the laws of Liberia having
its registered office at 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx (the “SUBSTITUTED
BUYER”).
|
WHEREAS:
|
1.1
|
Under
an agreement made on 30 November 2006 between the Buyer and the Builder
the Builder has agreed to construct a 170,500 dwt class bulk carrier
vessel for the Buyer with hull no. HN-101[ ] (the “Shipbuilding
Contract”).
|
|
1.2
|
Under
Article XIV of the Shipbuilding Contract the Buyer is permitted to
transfer the Shipbuilding Contract, with the consent of the
Builder.
|
|
1.3
|
The
Buyer wishes to transfer its rights and obligations under the Shipbuilding
Contract to the Substituted Buyer which is a company in the same group as
the Buyer, and the Builder has agreed to this on the condition that the
Buyer provides the Builder with a performance guarantee pursuant to
Article X, clause 9, guaranteeing the performance of the Substituted Buyer
under the Shipbuilding
Contract.
|
|
1.4
|
In
accordance with recital (C) herein, the terms of Article XIV of the
Shipbuilding Contract and the terms hereof the Builder has agreed to
release and discharge the Buyer of its rights and obligations under the
Shipbuilding Contract. The Substituted Buyer has agreed to assume, the
obligations of the Buyer to the Builder under the Shipbuilding Contract,
and the Buyer has agreed to release and discharge the Builder from its
rights and obligations to the Buyer under the Shipbuilding Contract, in
each case on the terms and subject to the conditions contained in this
Agreement.
|
|
1.5
|
Pursuant
to Article X, Clause 8 of the Shipbuilding Contract a refund guarantee has
been issued by XXXXXX Bank (the “Refund Guarantor”) in
favour of the Buyer or its nominee (the “Refund Guarantee”). The
nomination and novation under the Shipbuilding Contract is subject to all
rights of the Buyer under a new refund guarantee on the same terms as the
Refund Guarantee (the “Substituted Refund Guarantee”)
is issued to the Substituted Buyer as set out below as soon as the
existing Refund Guarantee has been discharged by the Substituted Buyer’s
bank by SWIFT as set out
below.
|
AGREEMENT
1.1
Novation
With
effect from 21 June 2007 (“Novation
Date”):
|
(i)
|
The
Substituted Buyer agrees with the Builder to assume all the rights and
obligations of the Buyer to the Builder under or arising from the
Shipbuilding Contract, (except any rights or obligations that have been
fully and properly performed prior to the Novation
Date);
|
|
(ii)
|
the
Buyer releases and discharges the Builder from all its rights and
obligations and liability to the Buyer under the Shipbuilding Contract and
from all (if any) liability to the Buyer arising from any act or omission
of the Builder in the performance of all or any of the Builder’s
obligations to the Buyer under the Shipbuilding
Contract;
|
|
(iii)
|
on
the condition that the Buyer has issued a performance guarantee in favour
of the Builder as set out in Article X, Clause 9 of the Shipbuilding
Contract prior to the entering into of this Novation Agreement, the
Builder releases and discharges the Buyer from all its rights and
obligations and liability to the Builder under the Shipbuilding Contract
and from all (if any) liability to the Builder arising from any act or
omission of the Buyer in the performance of all or any of the Buyer’s
obligations to the Builder under the Shipbuilding
Contract;
|
|
(iv)
|
the
Builder agrees to ensure that the Substituted Refund Guarantee is issued
in writing to the Substituted Buyer as soon as possible after the
Substituted Buyer’s bank, the XXXXXX, having confirmed by swift message to
the Builder’s bank, XXXXXX Bank (swift address XXXXXXXXXXX) that the
existing Refund Guarantee is considered null and void;
and
|
|
(iv)
|
the
Builder agrees with the Substituted Buyer to be bound by its rights and
obligations under the Shipbuilding Contract (to the extent that they have
not been fully and properly performed prior to the Novation Date) in every
way as if the Substituted Buyer had been a party to the Contract in place
of the
Buyer.
|
1.2
Obligations
The
parties acknowledge and agree that:
|
(i)
|
any
obligations of the Buyer to the Builder pursuant to the terms of the
Shipbuilding Contract which are not performed as at the Novation Date
shall not be deemed to be
waived by the Builder by virtue of the novation of the Shipbuilding
Contract pursuant to the terms of this Agreement, but shall be performed
by the Substituted Buyer;
|
|
(ii)
|
any
obligations of the Builder pursuant to the terms of the Shipbuilding
Contract which are not performed as at the Novation Date shall not be
deemed to be waived by the Substituted Buyer by virtue of the novation of
the Shipbuilding Contract pursuant to the terms of this Agreement, but
shall be performed by the Builder.
|
2
AMENDMENTS
The
Builder and the Substituted Buyer hereby agree that, with effect from the
Novation Date, the Shipbuilding Contract shall be amended so that all references
to the Buyer shall be interpreted as references to the Substituted
Buyer.
3
GOVERNING LAW AND DISPUTES
This
Agreement shall be governed and interpreted in accordance with the laws of
England. The terns relating to disputes and arbitration as contained In Article
XIII of the Shipbuilding Contract shall apply to this Agreement.
The
parties have entered into this Agreement the day and year first above
written.
Signed
by Xxxxxx Xxxx
For
and on behalf of the Buyer
______________________________
Signed
by [name]
For
and on behalf of the Builder
______________________________
Signed
by Xxxxxx Xxxx
For
and on behalf of the Substituted Buyer
______________________________
Novation
agreement hull 101[ ]
