Common use of Contract Performance Security Clause in Contracts

Contract Performance Security. A. Builder shall provide the following as security for Builder’s performance under this Contract, which Buyer may draw upon for an undisputed or adjudged event of default relating solely to performance of the portion of the Contract providing for construction and delivery of the Units: 1. A stand-by letter of credit in the amount of $[**] million, issued by a financial institution reasonably satisfactory to Buyer on behalf of Builder for the benefit of Buyer and containing in substance the terms and conditions set forth in Exhibit F hereto (“the Letter of Credit”), 2. An escrow agreement entered into by Builder, Buyer and a financial institution reasonably satisfactory to Buyer and substantially in the form of Exhibit G hereto (“the Escrow Agreement”). 3. A corporate guaranty issued by Builder substantially in the form of Exhibit H hereto (“the Builder Guaranty”). 4. [**]. B. Prior to the date the initial payment from Buyer to Builder is due in accordance with Article II.B.3.a above, the Letter of Credit shall have been delivered to Buyer, the Escrow Agreement shall have been entered into by the parties thereto and the Builder Guaranty and the [**] shall have been delivered to Buyer. C. Notwithstanding any other provision in this Contract, in the event of default by Builder hereunder, Buyer shall exhaust its remedies in the order set out in Paragraph A above. By way of example, prior to enforcing its rights under the Escrow Agreement, Buyer shall have first exhausted its rights under the Letter of Credit. D. As regards the Escrow Agreement, the Parties agree that: 1. Deposits made from progress payments in accordance with Article II.B shall equal [**] percent ([**]%) of each progress payment, subject to an aggregate limit of $[**] for each Unit. In no event shall the total Deposits made by Buyer for all three Units exceed $[**]. 2. Buyer will execute and deliver the “proper written request to disburse” required under the Escrow Agreement to disburse the portion of the Deposits applicable to a Unit upon Builder’s delivery of the Unit for which such Deposits are made to Buyer. 3. In the event of a Builder default and failure to cure, or any other dispute with Builder, the Buyer will execute and deliver the “proper written request [**] Confidential Treatment 45 to disburse” required under the Escrow Agreement to disburse all of the Deposits except for such amount as equals the monetary value of Buyer’s claims under this Contract arising from such default or dispute. 4. Any dispute pertaining to the Deposits, disbursement thereof and/or the Escrow Agreement shall be subject to final resolution pursuant to the arbitration procedures set out in Article XIV only and shall not be subject to the “opt out” option thereof to withdraw from arbitration.

Contract Performance Security. A. Builder shall provide the following as security for Builder’s performance under this Contract, which Buyer may draw upon for an undisputed or adjudged event of default relating solely to performance of the portion of the Contract providing for construction and delivery of the UnitsTugs: 1. A stand-by letter The existing Irrevocable Standby Letter of credit Credit in the amount of $[****] million, issued by a financial institution reasonably satisfactory to Buyer on behalf of Builder for the benefit of Buyer and containing (“the Letter of Credit”) as security for Builder’s performance under the contract dated as of September 2, 2005 for the construction of three (3) 342,000 BBL double-hull ATB Tank Barges (“the ATB Contract”). The Letter of Credit shall be amended so that it contains in substance the terms and conditions set forth in Exhibit F hereto (“the Amended Letter of Credit”), 2. An escrow agreement entered into by Builder, Buyer and a financial institution reasonably satisfactory to Buyer and substantially in the form of Exhibit G hereto (“the Escrow Agreement”).. [****] Confidential Treatment 3. A corporate guaranty issued by Builder substantially in the form of Exhibit H hereto (“the Builder Guaranty”). 4. [****]. B. Prior to the date the initial payment from Buyer to Builder is due in accordance with Article II.B.3.a above, the Amended Letter of Credit shall have been delivered to Buyer, the Escrow Agreement shall have been entered into by the parties thereto and the Builder Guaranty and the [****] shall have been delivered to Buyer. C. Notwithstanding any other provision in this Contract, in the event of default by Builder hereunder, Buyer shall exhaust its remedies in the order set out in Paragraph A above. By way of example, prior to enforcing its rights under the Escrow Agreement, Buyer shall have first exhausted its rights under the Amended Letter of Credit. D. As regards the Escrow Agreement, the Parties agree that: 1. Deposits made from progress payments in accordance with Article II.B shall equal [****] percent ([****]%) of each progress payment, subject to an aggregate limit of $[****] ,for each UnitTug. In no event shall the total Deposits made by Buyer for all three Units Tugs exceed $[****]. 2. Buyer will execute and deliver the “proper written request to disburse” required under the Escrow Agreement to disburse the portion of the Deposits applicable to a Unit Tug upon Builder’s delivery of the Unit Tug for which such Deposits are made to Buyer. 3. In the event of a Builder default and failure to cure, or any other dispute with Builder, the Buyer will execute and deliver the “proper written request [**] Confidential Treatment 45 to disburse” required under the Escrow Agreement to disburse all of the Deposits except for such amount as equals the monetary value of Buyer’s claims under this Contract arising from such default or dispute. 4. Any dispute pertaining to the Deposits, disbursement thereof and/or the Escrow Agreement shall be subject to final resolution pursuant to the arbitration procedures set out in Article XIV only and shall not be subject to the “opt out” option thereof to withdraw from arbitration.