SHIPSALES CONTRACT FOR CONSTRUCTION AND SALE OF A 87,000 MTDW SINGLE SCREW DIESEL DRIVEN BULK CARRIER (THE FUTURE-87) HULL NO. 3254 BETWEEN ENIAPROHI SHIPPING CORPORATION AND ITOCHU CORPORATION
EXHIBIT
10.29
SHIPSALES
CONTRACT
FOR
OF
A
87,000 MTDW SINGLE SCREW
DIESEL
DRIVEN BULK CARRIER
(THE
FUTURE-87)
HULL
NO. 3254
BETWEEN
ENIAPROHI
SHIPPING CORPORATION
AND
ITOCHU
CORPORATION
I
INDEX
|
PAGE
|
||
|
PREAMBLE
|
P-1
|
|
|
ARTICLE
I — SPECIFICATIONS AND CLASS OF VESSEL
|
||
|
1.
|
Specifications
|
P-2
|
|
2.
|
Principal
Particulars
|
P-2
|
|
3.
|
Class
and Rules
|
P-3
|
|
4.
|
Places
of Assembly and Construction
|
P-4
|
|
5.
|
Subcontracting
|
P-4
|
|
6.
|
Registration
of Vessel
|
P-4
|
|
7.
|
Obligations
of the Builder
|
P-4
|
|
ARTICLE
II — CONTRACT PRICE AND TERMS OF PAYMENT
|
||
|
1.
|
Contract
Price
|
P-5
|
|
2.
|
Adjustment
of Contract Price
|
P-5
|
|
3.
|
Currency
|
P-5
|
|
4.
|
Due
Date and Due Amount of Payment
|
P-5
|
|
5.
|
Method
of Payment
|
P-6
|
|
6.
|
Notice
of Payment
|
P-7
|
|
7.
|
Performance
Guarantee
|
P-7
|
|
8.
|
Prepayment
|
P-8
|
|
ARTICLE
III —ADJUSTMENT OF CONTRACT PRICE
|
||
|
1.
|
Delayed
Delivery
|
P-9
|
|
2.
|
Insufficient
Speed
|
P-10
|
|
3.
|
Excessive
Fuel Consumption
|
P-10
|
|
4.
|
Deficiency
in Deadweight
|
P-11
|
|
5.
|
Duty
to Mitigate
|
P-11
|
|
6.
|
Expedited
Delivery
|
P-11
|
II
|
ARTICLE
IV — MODIFICATIONS AND CHANGES
|
||
|
1.
|
Modifications
to Specifications
|
P-13
|
|
2.
|
Changes
in Class, etc
|
P-13
|
|
3.
|
Substitution
of Materials
|
P-15
|
|
ARTICLE
V — APPROVAL OF DRAWINGS AND INSPECTION
|
||
|
1.
|
Appointment
of Xxxxx’s Representative
|
P-16
|
|
2.
|
Approval
of Drawings
|
P-16
|
|
3.
|
Inspection
by Buyer
|
P-16
|
|
4.
|
Facilities
|
P-17
|
|
5.
|
Liability
of Seller and/or Builder
|
P-18
|
|
6.
|
Responsibility
of Buyer
|
P-18
|
|
ARTICLE
VI — SEA TRIAL
|
||
|
1.
|
Notice
|
P-19
|
|
2.
|
Weather
Condition
|
P-19
|
|
3.
|
How
conducted
|
P-19
|
|
4.
|
Method
of Acceptance or Rejection
|
P-20
|
|
5.
|
Effect
of Acceptance
|
P-20
|
|
6.
|
Disposition
of Remaining Consumable Stores
|
P-21
|
|
ARTICLE
VII —DELIVERY
|
||
|
1.
|
Time
and Place
|
P-22
|
|
2.
|
When
and How Effected
|
P-22
|
|
3.
|
Documents
to be Delivered to Buyer
|
P-22
|
|
4.
|
Title
and Risk
|
P-23
|
|
5.
|
Removal
of Vessel
|
P-23
|
|
ARTICLE
VIII — DELAY AND EXTENSION OF TIME FOR DELIVERY (FORCE
MAJEURE)
|
||
|
1.
|
Clause
of Delay
|
P-24
|
III
|
2.
|
Notice
|
P-24
|
|
3.
|
Right
to Rescind for Excessive Permissible Delay
|
P-25
|
|
4.
|
Right
to Rescind for Excessive Delay
|
P-25
|
|
5.
|
Definition
of Permissible Delay
|
P-26
|
|
ARTICLE
IX — WARRANTY
|
||
|
1.
|
Warranty
and Warranty Period
|
P-27
|
|
2.
|
Notice
of Defects
|
P-27
|
|
3.
|
Extent
of Seller’s and Builder’s Liability
|
P-27
|
|
4.
|
Remedy
of Defects Covered by Warranty
|
P-28
|
|
5.
|
Freight
Charges
|
P-28
|
|
6.
|
Conditions
of Warranty
|
P-29
|
|
7.
|
Warranty
to be Exclusive
|
P-29
|
|
8.
|
Assignment
of Rights
|
P-29
|
|
9.
|
Arbitration
|
P-29
|
|
ARTICLE
X — RESCISSION BY BUYER
|
||
|
1.
|
Notice
|
P-30
|
|
2.
|
Refund
to Buyer
|
P-30
|
|
3.
|
Discharge
of Obligations
|
P-30
|
|
4.
|
Refund
Guarantee
|
P-30
|
|
ARTICLE
XI — BUYER’S DEFAULT
|
||
|
1.
|
Definition
of Default
|
P-32
|
|
2.
|
Interest
and Charge
|
P-32
|
|
3.
|
Effect
of Default
|
P-32
|
|
4.
|
Disposal
of Vessel
|
P-33
|
|
ARTICLE
XII — BUILDER’S INSURANCE
|
||
|
1.
|
Extent
of Insurance Coverage
|
P-34
|
IV
|
2.
|
Application
of Recovered Amount
|
P-34
|
|
3.
|
Termination
of Seller’s and Builder’s Obligation to Insure
|
P-35
|
|
ARTICLE
XIII — DISPUTES AND ARBITRATION
|
||
|
1.
|
Disputes
|
P-36
|
|
2.
|
Arbitration
|
P-36
|
|
3.
|
Alteration
of Expected Delivery Date
|
P-36
|
|
ARTICLE
XIV — RIGHT OF ASSIGNMENT
|
P-38
|
|
|
ARTICLE
XV — TAXES AND DUTIES
|
||
|
1.
|
Taxes
and Duties Imposed in Japan
|
P-39
|
|
2.
|
Taxes
and Duties Imposed outside Japan
|
P39
|
|
ARTICLE
XVI — PATENTS, TRADEMARKS AND COPYRIGHTS, ETC.
|
||
|
1.
|
Patents,
Trademarks and Copyrights
|
P-40
|
|
2.
|
Specifications,
Plans and Drawings
|
P-40
|
|
ARTICLE
XVII — BUYER’S SUPPLIES
|
||
|
1.
|
Responsibility
of Buyer
|
P-41
|
|
2.
|
Responsibility
of Seller and/or Builder
|
P-41
|
|
3.
|
Running
Spares, Stores, Provisions and Other Supplies
|
P-42
|
|
ARTICLE
XVIII — NOTICE
|
P-43
|
|
|
ARTICLE
XIX — EFFECTIVE DATE OF CONTRACT
|
P-44
|
|
|
ARTICLE
XX — SELLER’S AND/OR BUILDER’S DEFAULT
|
P-45
|
|
|
ARTICLE
XXI — INTERPRETATION
|
||
|
1.
|
Law
and Regulations Applicable
|
P-46
|
|
2.
|
Discrepancies
|
P-46
|
|
3.
|
Entire
Agreement
|
P-46
|
|
END
OF CONTRACT
|
P-47
|
|
|
EXHIBIT
“A” — Stage Certificate
|
||
V
|
EXHIBIT
“B” — Performance Guarantee
|
||
|
EXHIBIT
“C” — Refund Guarantee
|
||
VI
SHIPSALES
CONTRACT
OF
A 87,000 MTDW SINGLE SCREW
DIESEL
DRIVEN BULK CARRIER
HULL
NO. 3254
THIS
CONTRACT,
made
and entered into this 28th day of August, 2006 by and between ENIAPROHI
SHIPPING CORPORATION,
a
corporation organized and existing under the laws of Liberia having its
registered office at 00 Xxxxx Xxxxxx, Monrovia (hereinafter called the “Buyer”),
the party of the first part, and ITOCHU
CORPORATION,
a
corporation organized and existing under the laws of Japan, having its
registered office at 0-0, Xxxx-Xxxxxx 0 xxxxx, Xxxxxx-xx, Xxxxx, 000-0000,
Xxxxx, (hereinafter called the “Seller), the party of the second
part.
WITNESSETH:
In
consideration of the mutual covenants herein contained, the Seller agrees to
cause IHI
MARINE UNITED INC.,
a
corporation organized and existing under the laws of Japan, having its
registered office at 00-00, Xxxxxx 0-xxxxx, Xxxxxx-xx, Xxxxx 000-0000, Xxxxx
(hereinafter called the “Builder”) to construct, equip and complete one (1) unit
of Bulk Carrier as more fully described in Article I hereof (hereinafter called
the “Vessel”) at one of the Builder’s shipyards in Yokohama or Kure, Japan
(hereinafter called the “Shipyard”) and sell and deliver the Vessel to the
Buyer, and the Buyer agrees to purchase and take delivery of the Vessel from
the
Seller and to pay for the same, subject to and in accordance with the terms
and
conditions hereinafter set forth.
1
ARTICLE
I — SPECIFICATIONS AND CLASS OF VESSEL
| 1. |
Specifications:
|
The
Vessel which has been designed by the Builder shall have the Builder’s Hull No.
3254 and shall be constructed, equipped and completed in compliance with the
following documents:
Specifications
(Dwg. No. K0000301)
General
Arrangement (Dwg. No. K2000401)
(The
above two (2) documents are hereinafter collectively called the
“Specifications”)
The
Shipbuilding Process and Inspection Standard, 2002 (SPAIS
2002)
Quality
& Inspection.
Standard
for Ship’s Painting, 2002 (QISSP
2002)
(The
above two (2) documents are hereinafter collectively called the “Inspection
Standards”)
The
Specifications and the Inspection standards signed by the parties hereto are
attached hereto for identification and form an integral part
hereof.
| 2. |
Principal
Particulars:
|
The
principal particulars of the Vessel shall be as follows:
| (a) |
Hull:
|
|
Length
overall
|
approx. |
229.00
m
|
|
Length
between perpendiculars
|
219.90
m
|
|
|
Xxxxxxx,
moulded
|
36.50
m
|
|
|
Xxxxx,
moulded
|
19.90
m
|
|
|
Designed
draught, moulded
|
12.40
m
|
|
|
Xxxxxxxxx
draught, moulded
|
14.10
m
|
| (b) |
Propelling
Machinery:
|
|
Type
|
DU
WARTSILA 6RTA58T
|
|
No.
of Set
|
One
(1)
|
|
Normal
Output
|
8,550
KW at about 89.3 RPM
|
2
|
Maximum
Continuous Output
|
10,300
KW at about 95.0 RPM
|
| (c) |
Deadweight:
|
For
the
purposes of reduction or increase in the Contract Price (as defined in Paragraph
1 of Article II hereof) or rescission by the Buyer of this Contract, only under
Article III hereof, the Builder guarantees that the deadweight of the Vessel
at
the xxxxxxxxx draught as determined in accordance with the Specifications shall
not be less than 86,800 metric tons (hereinafter called the “Guaranteed
Deadweight”).
The
actual deadweight of the Vessel when completed shall be calculated by the
Builder in accordance with the Specifications.
| (d) |
Speed:
|
For
the
purposes of reduction in the Contract Price or rescission by the Buyer of this
Contract, only under Article III hereof, the Builder guarantees that the trial
speed of the Vessel as determined in accordance with the Specifications shall
not be less than 15.45 knots (hereinafter called the “Guaranteed Speed”) at a
normal output of the main engine in clean bottom, calm and deep
sea.
In
case
of rough sea and/or shallow water condition at sea trial, the speed results
shall be corrected to calm and deep sea condition according to the method
prescribed in the Specifications.
| (e) |
Fuel
Consumption:
|
For
the
purposed of reduction in the Contract Price or rescission by the Buyer of this
contract, only under Article III hereof, the Builder guarantees that the fuel
consumption of the main engine as determined in accordance with the
Specifications shall not be more than 167.7 grams/kWh (hereinafter called the
“Guaranteed Fuel Consumption”) at a normal output of the main engine using fuel
oil having net calorific value of 42,700Kj/kg based on shop trial under ISO
reference condition.
| 3. |
Class
and Rules:
|
The
Vessel, including its machinery, equipment and outfitting shall be constructed
in accordance with the rules and requirements and under survey of Lloyd’s
Register of Shipping (hereinafter called the “Classification Society”) and shall
be distinguished in the register of the Classification Society by the symbols
of
Δ100A1
Bulk Carrier, BC-A, Strengthened for Heavy Cargoes, Holds Nos. 2, 4 & 6
may be empty, ShipRight (SDA, FDA, CM), ESN, ESP, LI, ΔLMC,
UMS,
*IWS.
The
Vessel shall also comply with the rules, regulations and requirements of other
regulatory bodies as described in the Specifications. The Seller or the Builder
shall provide the Buyer with a copy of all correspondence e-mails
and
3
notes
of
meetings with the Classification Society in respect of any particular matter
whenever requested in writing by the Buyer.
All
the
foregoing rules, regulations and requirements including those of the
Classification Society applicable to the Vessel shall be those which are
published as of the date of this Contract and which are in force or will have
mandatory application to the Vessel.
All
fees
and charges incidental to compliance with the foregoing rules, regulations
and
requirements shall be for the account of the Builder.
| 4. |
Places
of Assembly and Construction:
|
Save
as
provided in paragraph 5 the Vessel shall be assembled, constructed,
equipped, launched and completed at the Shipyard. The Builder may not without
the Buyer’s prior written consent fabricate, assemble or manufacture any parts
and/or any components of the Vessel at any places other than the Shipyard or
at
one of its other facilities in Japan at the Builder’s discretion and
responsibility.
| 5. |
Subcontracting:
|
In
addition to any parts of the Vessel specified and agreed in the Specification
the Builder may also at its sole discretion and responsibility subcontract
the
construction of any part of the vessel in Japan. The Builder shall not
subcontract the construction of the hull structure, superstructure and rudder
of
the Vessel outside Japan in excess of 250 metric tons without the Buyer’s prior
written consent (which consent shall not be unreasonably withheld).
| 6. |
Registration
of Vessel:
|
The
Vessel shall be registered by the Buyer at its own cost and expense under the
laws of Cyprus with its home port of Limassol.
| 7. |
Obligations
of the Builder:
|
Any
obligations hereunder of the Builder are obligations of the Seller. The Seller
is fully responsible hereunder for the due performance of all the Builder’s
rights and obligations as “Builder” in accordance with the terms and conditions
of this Contract. A copy of this Contract will be provided by the Seller to
the
Builder and the Seller warrants that the Builder will comply with its
obligations hereunder.
(End
of
Article)
4
ARTICLE
II — CONTRACT PRICE AND TERMS OF PAYMENT
| 1. |
Contract
Price:
|
The
total
purchase price of the Vessel net receivable by the Seller and exclusive of
the
Buyer’s Supplies (as defined in Paragraph 1 of Article XVII hereof but inclusive
of the cost of storing, insuring, handling and installing the same in the
vessel) is Four Billion Two Hundred Sixty Million Japanese Yen
(JPY4,260,000,000.-) (hereinafter called the “Contract Price”) subject only to
upward or downward adjustment, if any, as hereinafter set forth in this
Contract.
| 2. |
Adjustment
of Contract Price:
|
Adjustment
of the Contract Price, if any, in accordance with the provisions of this
Contract shall be made by way of addition to or subtraction from the instalment
due and payable upon delivery of the Vessel in the manner as hereinafter
provided.
| 3. |
Currency:
|
Any
and
all payments by the Buyer to the Seller under this Contract shall be made in
Japanese Yen.
| 4. |
Due
Date and Due Amount of Payment:
|
The
Contract Price shall be payable by the Buyer to the Seller on and in the
following due dates and instalments without any deduction
whatsoever.
Any
and
all expenses for remittance and any other charges of any nature whatsoever
connected with the following payments by the Buyer to the Seller shall be for
the account of the Buyer.
| (a) |
First
Instalment:
|
Five
Hundred Fifty Million Japanese Yen (JPY550,000,000.-) shall be due and payable
upon the later of (i) the execution of this Contract and the Performance
Guarantee relating hereto by all parties; and (ii) the date of delivery of
the
original letter of Refund Guarantee specified in Article X hereof to the Buyer
at its address as set out in Article XVIII.
| (b) |
Second
Instalment
|
Four
Hundred Million Japanese Yen (JPY400,000,000.-) shall be due and payable upon
the later of (i) eighteen (18) months after the execution of this Contract;
and (ii) the date of delivery of the original letter of Refund Guarantee in
relation to the Second Instalment specified in Article X hereof to the Buyer
at
its address as set out in Article XVIII.
5
| (c) |
Third
Instalment:
|
Four
Hundred Million Japanese Yen (JPY400,000,000.-) shall be due and payable upon
the later of (i) the date of delivery to the Buyer’s Representative of a
Stage Certificate in the form of Exhibit “A” attached hereto confirming keel
laying of the Vessel has been completed and such Certificate being signed by
the
Classification Society Surveyor, the Builder and the Buyer’s Representative
(provided however that in the event the Buyer’s Representative is absent from
the Shipyard on the date the said Stage Certificate is to be signed, then the
Buyer’s Representative’s signature will not be required in relation to the
execution of such Stage Certificate); and (ii) the date of delivery of the
original letter of Refund Guarantee in relation to the Third Instalment
specified in Article X, paragraph 4 hereof to the Buyer at its address as set
out in Article XVIII.
| (d) |
Fourth
Instalment:
|
Four
Hundred Million Japanese Yen (JPY400,000,000.-) shall be due and payable upon
the later of (i) the date of delivery to the Buyer’s Representative of a Stage
Certificate in the form of Exhibit “A” attached hereto confirming launching of
the Vessel has been completed and such Certificate being signed by the
Classification Society Surveyor, the Builder and the Buyer’s Representative
(provided however that in the event the Buyer’s Representative is absent from
the Shipyard on the date the said Stage Certificate is to be signed, then the
Buyer’s Representative’s signature will not be required in relation to the
execution of such Stage Certificate); and (ii) the date of delivery of the
original letter of Refund Guarantee in relation to the Fourth Instalment
specified in Article X, paragraph 4 hereof to the Buyer at its address as set
out in Article XVIII.
| (e) |
Fifth
Instalment:
|
Two
Billion Five Hundred Ten Million Japanese Yen (JPY2,510,000,000.), plus any
addition to or (as the case may be) less any deduction from the Contract Price
due to adjustments of the Contract Price as set forth in this Contract, shall be
due and payable upon delivery and acceptance of the Vessel by the Buyer in
accordance with the terms of this Contract.
PROVIDED
HOWEVER,
that
none of the above instalments shall be payable if the Refund Guarantee referred
to in Article X, paragraph 4 ceases to be in force and no substitute Refund
Guarantee has been provided in accordance with the provisions of this
Contract.
The
date
on which any of the above instalments becomes due and payable pursuant to
Article II, paragraph 4 of this Contract shall be herein referred to as the
“Due
Date”.
6
| 5. |
Method
of Payment:
|
| (a) |
First
Instalment:
|
Within
three (3) Banking days (as defined in Paragraph 1(a) of Article XI hereof)
after
the Due Date of the First Instalment, the Buyer shall remit the First Instalment
by telegraphic transfer to the Seller’s account at a Japanese bank to be
designated by the Seller (“the Seller’s Bank Account”) and advised to the Buyer
reasonably in advance of the date of payment (such Japanese bank being
hereinafter called “the Bank”).
| (b) |
Second
Instalment:
|
Within
three (3) Banking Days after the Due Date of the Second Instalment the Buyer
shall remit the Second Instalment by telegraphic transfer to the Seller’s Bank
Account.
| (c) |
Third
Instalment:
|
Within
three (3) Banking Days after the Due Date of the Third Instalment the Buyer
shall remit the Third Instalment by telegraphic transfer to the Seller’s Bank
Account.
| (d) |
Fourth
Instalment
|
Within
three (3) Banking Days after the Due Date of the Fourth Instalment the Buyer
shall remit the Fourth Instalment by telegraphic transfer to the Seller’s Bank
Account.
| (e) |
Fifth
Instalment:
|
At
least
three (3) Banking Days prior to the anticipated delivery of the Vessel, the
Buyer shall remit the Fifth Instalment as adjusted in accordance with the
provisions of this Contract by telegraphic transfer to the Bank with an
irrevocable instruction that the amount so remitted shall be paid into the
Seller’s Bank Account upon presentation by the Seller to the Bank, of a copy of
Protocol of Delivery and Acceptance of the Vessel executed by the Buyer and
the
Seller pursuant to Paragraph 2 of Article VII hereof.
No
payment under this Contract shall be delayed, suspended or withheld by the
Buyer
on account of any dispute or disagreement between the parties
hereto.
| 6. |
Notice
of Payment:
|
With
exception of the First Instalment, the Seller shall give the Buyer seven (7)
days prior notice in writing of the anticipated due date of payment of each
instalment.
7
| 7. |
Performance
Guarantee:
|
As
security for (i) due and punctual payments of all of the instalments of the
Contract Price and all other sums of money due to the Seller hereunder and
(ii) due and punctual performance of any and all other obligations of the
Buyer whatsoever, the Buyer shall, upon signing of this Contract, furnish the
Seller with a performance guarantee (hereinafter called the “Performance
Guarantee”) in the form of Exhibit “B” attached to this Contract to be
executed by a company nominated by the Buyer and approved by the
Seller.
Both
the
Seller and the Builder agree and undertake to safeguard, treat as confidential
and not disclose to any person, authority or entity the existence and/or terms
and conditions of the Performance Guarantee and this obligation of
confidentiality shall continue even after the return of the Performance
Guarantee to the issuer thereof.
The
Seller further agrees and undertakes to return to the issuer of the Performance
Guarantee, the original thereof and all copies in their possession upon the
earlier of (i) delivery and acceptance of the Vessel or (ii) rescission of
this
Contract by the Buyer in accordance with the terms hereof.
| 8. |
Prepayment:
|
Prepayment
of any instalment shall be subject to mutual agreement between the parties
hereto.
(End
of
Article)
8
ARTICLE
III — ADJUSTMENT OF CONTRACT PRICE
The
Contract Price shall be subject to adjustment as hereinafter set forth in the
event of the following contingencies (it being understood by the parties hereto
that any reduction in the Contract Price to be made hereunder 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 delay in delivery of the Vessel beyond
the
Expected Delivery Date (as defined in Article VII hereof) as postponed
and/or extended under the provisions of this Contract (ending as
of twelve
o’clock midnight of the thirtieth (30th)
day of delay).
|
|
(b)
|
If
delivery of the Vessel is delayed more than thirty (30) days after
the
Expected Delivery Date as postponed and/or extended under the provisions
of this Contract, the Contract Price shall be reduced by deducting
therefrom the amount of One Million One Hundred Eighty Three Thousand
Japanese Yen (JPY1,183,000) for each day of delay over the aforesaid
grace
of thirty (30) days. However, the maximum reduction in the Contract
Price
shall in no event be more than the amount in the case of a delay
of one
hundred eighty (180) days after the aforesaid grace of thirty (30)
days.
|
|
(c)
|
If
delay in delivery of the Vessel continues for a period of one hundred
eighty (180) days from the thirty-first (31st)
day after the Expected Delivery Date as postponed and/or extended
under
the provisions of this Contract, then, the Buyer shall have the option
either to accept the Vessel at a maximum reduction in the Contract
Price
as above provided or to rescind this Contract in accordance with
the
provisions of Article X hereof as alternative to receiving the aforesaid
liquidated damages. At any time after the expiry of the aforementioned
one
hundred eighty (180) day period of delay in delivery the Seller may,
if
the Buyer has not served notice of rescission, propose a new delivery
date
and demand in writing that the Buyer shall make an election, in which
case
the Buyer shall, within fifteen (15) days after such proposal and
demand
is received by the Buyer, notify the Seller of its intention either
to
rescind this Contract or to consent to delivery of the Vessel at
a future
date to be mutually agreed failing which it will be deemed that it
has
elected that the delivery of the Vessel takes place on the proposed
new
delivery date; it being understood and agreed upon by the parties
hereto
that (i) if the Buyer does not elect to rescind the Contract it shall
be
without prejudice to its right to accrued liquidated damages; and
(ii) if
the Vessel is not delivered by such future date (agreed or proposed),
the
Buyer shall have the same right of rescission to take effect immediately
after the said further date upon the same terms as hereinabove
provided.
|
|
(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
all
postponements of the Expected Delivery Date by reason of
permissible
|
9
| delays defined in Article VIII hereof and/or extension of the Expected Delivery Date by other reasons under this Contract, is not delivered by the Expected Delivery Date so postponed or extended. |
| 2. |
Insufficient
Speed:
|
|
(a)
|
The
Contract Price shall not be affected or changed by reason of the
trial
speed, as determined in accordance with the Specifications, being
less
than the Guaranteed Speed, if such deficiency is not more than
three-tenths (3/10) of a knot.
|
|
(b)
|
However,
if such deficiency is more than three-tenths (3/10) of a knot, then,
the
Contract Price shall be reduced by deducting therefrom the amount
of Seven
Million One Hundred Thousand Japanese Yen (JPY7,100,000) per one-tenth
(1/10) of a knot or deficiency over the aforesaid grace of three-tenths
(3/10) of a knot (fractions of one-tenth (1/10) of a knot to be prorated).
However, the maximum reduction in the Contract Price shall in no
event be
more than the amount in the case of a deficiency of seven-tenths
(7/10) of
a knot below the Guaranteed Speed.
|
|
(c)
|
If
deficiency in the trial speed of the Vessel (as so determined) is
more
than seven-tenths (7/10) of a knot below the Guaranteed Speed, then,
the
Buyer shall have the option either to accept the Vessel at a maximum
reduction in the Contract Price as above provided or to reject the
Vessel
and to rescind this Contract in accordance with provisions of Article
X
hereof as alternative to receiving the aforesaid liquidated
damages.
|
| 3. |
Excessive
Fuel Consumption:
|
|
(a)
|
The
Contract Price shall not be affected or changed, by reason of the
fuel
consumption of the main engine, as determined in accordance with
the
Specifications, being more than the Guaranteed Fuel Consumption,
if such
excess is not more than three percent (3%) over the Guaranteed Fuel
Consumption.
|
|
(b)
|
However,
if such excess is more than three percent (3%), then, the Contract
Price
shall be reduced by deducting therefrom the amount of Seven Million
One
Hundred Thousand Japanese Yen (JPY7,100,000) for each one percent
(1%)
increase in fuel consumption above the aforesaid grace of three percent
(3%) (fractions of one percent (1%) to be prorated). However, the
maximum
reduction in the Contract Price shall in no event be more than the
amount
in the case of an excess of eight percent (8%) over the aforesaid
Guaranteed Fuel Consumption.
|
|
(c)
|
If
the fuel consumption of the main engine exceeds the Guaranteed Fuel
Consumption by more than eight percent (8%), then, the Buyer shall
have
the option either to accept the Vessel at a maximum reduction in
the
Contract Price as above provided or to reject the Vessel and to rescind
this Contract in accordance with provisions of Article X hereof as
alternative to receiving the aforesaid liquidated
damages.
|
10
| 4. |
Deficiency
in Deadweight:
|
|
(a)
|
The
Contract Price shall not be affected or changed by reason of the
deadweight of the Vessel, as determined in accordance with the
Specifications, being less than the Guaranteed Deadweight, if such
deficiency is not more than 800 metric tons of the Guaranteed
Deadweight.
|
|
(b)
|
However,
if such deficiency is more than 800 metric tons, the Contract Price
shall
be reduced by deducting therefrom the amount of Fifty Five Thousand
Two
Hundred Japanese Yen (JPY55,200) for each full metric ton of such
deficiency over the aforesaid grace of 800 metric tons (in this case
disregarding fractions of one (1) metric ton).
|
|
However,
the maximum reduction in the Contract Price shall in no event be
more than
the amount in the case of a deficiency of 1,800 metric tons below
the
Guaranteed Deadweight.
|
|
|
(c)
|
In
the event that such deficiency in the Vessel’s deadweight is more than
1,800 metric tons the Buyer shall have the option either to accept
the
Vessel at a maximum reduction in the contract Price as above provided
or
to reject the Vessel and to rescind this Contract in accordance with
provisions of Article X hereof as alternative to receiving the aforesaid
liquidated damages.
|
| 5. |
Duty
to Mitigate:
|
Notwithstanding
the provisions of this Article III, the Seller and/or the Builder shall have
a
duty to investigate and if possible rectify the cause of an insufficiency in
speed, deadweight or an excess in fuel consumption prior to the delivery of
the
Vessel to the Buyer. It is hereby understood and agreed by the seller and/or
the
Builder that the Seller will seek to deliver the Vessel by adjusting the
Contract Price, if necessary, in accordance with the provisions of this Article
III, only if after using their best endeavors such insufficiency or excess
cannot be corrected.
| 6. |
Expedited
Delivery:
|
|
(a)
|
If
the Buyer requests in writing that the delivery of the Vessel be
made
earlier than the Expected Delivery Date and if the Vessel is delivered,
in
response to such request of the Buyer, then, in such event, the Contract
Price shall be increased by adding thereto the amount of One Million
One
Hundred Eighty Three Thousand Japanese Yen (JPY1,183,000) for each
day
that such earlier delivery is effected in advance of the Expected
Delivery
Date or from an earlier delivery date as declared in writing by the
Seller
to the Buyer if such earlier delivery date is already declared before
being so requested by the Buyer; it being understood that acceptance
by
the Seller of the Buyer’s request for earlier delivery shall, in no way,
be construed as change of the Expected Delivery
Date.
|
11
|
(b)
|
Should
the Builder deliver the Vessel earlier than the Expected Delivery
Date
without request by the Buyer, the Buyer shall accept such earlier
delivery
of the Vessel, always provided that the Seller or the Builder has
given
the Buyer three (3) months notice in writing or by fax or telex of
the
proposed earlier delivery date.
|
(End
of
Article)
12
ARTICLE
IV — MODIFICATIONS AND CHANGES
| 1. |
Modifications
to Specifications:
|
|
(a)
|
Upon
the Buyer’s request in writing, the Specifications may be modified and /or
changed provided that such modifications or changes or an accumulation
of
such modifications or changes will in the Builder’s reasonable judgment
neither adversely affect the Builder’s design of the Vessel nor adversely
affect the Builder’s construction schedule of the Vessel or program in
relation to the Builder’s other binding commitments, provided always that
the Buyer shall first agree, before such modifications or changes
are
carried out, to adjustments reasonably required by the Seller and/or
the
Builder to the Contract Price, the Expected Delivery Date, the Guaranteed
Speed, the Guaranteed Fuel Consumption, the Guaranteed Deadweight
and/or
other terms and conditions of this Contract and the Specifications,
if
any, caused by such modifications or changes. Such modifications
or
changes and adjustment shall be confirmed by written agreement between
the
parties hereto, or by exchange of fax messages and thereafter effected
by
the Builder. The Builder will exert its best efforts to accommodate
such
request of the Buyer so that the said changes and modifications shall
be
made at the Builder’s lowest possible cost and within the shortest period
of time as is reasonably possible.
|
|
(b)
|
Without
impairing the intent of the Specifications, the Builder may make
minor
modifications or changes to the Specifications if found necessary
for the
introduction of improved design, construction methods or otherwise,
provided that there shall be no change in the Contract Price as a
result
of such changes unless otherwise agreed upon between the parties
hereto
and that the Seller shall first obtain the Buyer’s approval in writing
which shall not be unreasonably
withheld.
|
| 2. |
Changes
in Class. etc.:
|
|
(a)
|
If,
after the date of this Contract, any requirements as to class, to
which
the construction of the Vessel is required to conform, are altered
or
changed by the Classification Society, and the classification certificate
cannot be obtained without conformity with such alterations or changes,
then, any Party (including the Builder) who becomes aware of the
change
shall forthwith transmit such information in full to the other in
writing
and then the Builder shall promptly incorporate such alterations
or
changes into the construction of the Vessel, provided that the Buyer
shall
first agree to adjustments reasonably required by the Seller and/or
the
Builder in the Contract Price, the Expected Delivery Date, the Guaranteed
Speed, the Guaranteed Fuel Consumption, the Guaranteed Deadweight
and
other terms and conditions of this Contract and the Specifications,
if
any, caused by the application of such alterations or
changes.
|
|
Such
alterations or changes and adjustments shall be confirmed by written
agreement between the parties hereto, or by exchange of
faxes.
|
13
|
Notwithstanding
the foregoing provisions, the Buyer may, at its sole discretion first
apply to the Classification Society for a formal waiver of compliance
with
such alterations or changes provided however that the Buyer shall
take
into account the Builder’s request that the Buyer applies for a
waiver.
|
|
|
(b)
|
If,
after the date of this Contract, any requirements under the rules
and
regulations other than those of the Classification Society, to which
the
construction of the Vessel is required in the Specifications to conform,
are altered or changed by the regulatory bodies authorized to make
such
alterations or changes, and the certificates of such regulatory bodies
cannot be obtained without conformity with such alterations or changes,
then any Party (including the Builder) who becomes aware of the change
shall forthwith transmit such information in full to the other in
writing
and then the Builder shall promptly incorporate such alterations
or
changes into the construction of the Vessel, provided that the Buyer
shall
first agree to the adjustment reasonably required by the Seller and/or
the
Builder in the Contract Price, the Expected Delivery Date, the Guaranteed
Speed, the Guaranteed Fuel Consumption, the Guaranteed Deadweight
and
other terms and conditions of this Contract and the Specifications
if any,
caused by the application of such alterations or
changes.
|
|
Such
alterations or changes and adjustments shall be confirmed by written
agreement between the parties hereto, or by exchange of
faxes.
|
|
|
Notwithstanding
the foregoing provisions, the Buyer may, at its sole discretion first
apply to such regulatory body or bodies for a formal waiver of compliance
with such alterations or changes provided however that the Buyer
shall
take into account the Builder’s request that the Buyer applies for a
waiver.
|
|
|
(c)
|
If,
after the date of this Contract, any requirements as to class, or
under
the other rules and regulations which are irrelevant to or unnecessary
in
obtaining the classification certificates or the certificates of
such
other regulatory bodies are altered or changed by the Classification
Society or such other regulatory bodies, and the Buyer desires to
incorporate such alterations or changes into the construction of
the
Vessel, then, the Buyer shall give a written notice of such intention
to
the Seller and the Builder. The Builder will in the Builder’s reasonable
judgment accept such alterations or changes, if those alterations
or
changes will neither adversely affect the Builder’s design of the Vessel
nor adversely affect the Builder’s construction schedule of the Vessel
and/or program in relation to the Builder’s other binding commitments,
provided always that the Buyer shall first agree to adjustments reasonably
required by the Seller and/or the Builder in the Contract Price,
the
Expected Delivery Date, the Guaranteed Speed, the Guaranteed Fuel
Consumption, the Guaranteed Deadweight and other terms and conditions
of
this Contract and the Specifications, if any, caused by application
of
such alterations or changes.
|
14
|
Such
alterations or changes and adjustments shall be confirmed by written
agreement between the parties hereto, or by exchange of letters or
cables
confirmed in writing.
|
| 3. |
Substitution
of Materials:
|
In
the
event that any of the materials, or machinery or equipment required by the
Specifications or otherwise under this Contract for the construction of the
Vessel cannot be procured to meet the Builder’s construction schedule of the
Vessel, or are in short supply, the Builder may supply other materials or
machinery or equipment of equivalent quality, capable of meeting the
requirements of the Classification Society and of the other rules, regulations
and requirements with which the construction of the Vessel must comply, provided
that the Seller and/or the Builder shall first give the Buyer a notice to that
effect, and shall first obtain the Buyer’s approval which shall not be
unreasonably withheld and that there shall be no alteration to the Contract
Price, Expected Delivery Date, the Guaranteed Speed, the Guaranteed Fuel
Consumption or the Guaranteed Deadweight of the Vessel.
(End
of
Article)
15
ARTICLE
V — APPROVAL OF DRAWINGS AND INSPECTION
| 1. |
Appointment
of Xxxxx’s Representative:
|
The
Buyer
may send to and maintain at the Shipyard, at the Buyer’s own cost and expense,
one (1) representative who shall be duly authorized in writing by the Buyer
(hereinafter called the “Representative” and an assistant or assistants (any
experts appointed by the Representative are to be considered as the
Representative’s assistants) to the Representative at the Buyer’s own cost and
expense to act on behalf of the Buyer in connection with inspections, tests
and
trials, or any of them at the Buyer’s sole discretion and any other matters in
respect of which he is specifically authorized by the Buyer in
writing.
| 2. |
Approval
of Drawings:
|
|
(a)
|
The
Builder shall submit to the Head Office of the Buyer at its address
as set
out in Article XVIII for its approval three (3) copies each of the
drawings listed in the Specifications in hard copy. The Buyer shall,
as
soon as possible but within twenty one (21) days after dispatch thereof
by
the Builder at the latest, return to the Builder one (1) copy of
such
drawings with its approval or comments written thereon. Any alteration
to
the specifications resulting from such comments shall be dealt with
in
accordance with Article IV hereof. A list of the Plans and Drawings
to be
so submitted to the Buyer and the order of submission thereof shall
be
mutually agreed upon between the Builder and the Buyer.
|
|
(b)
|
In
the event that the Buyer shall fail to return the drawings to the
Builder
within the time limit hereinabove provided, the said drawings shall
be
deemed to have been approved without any
comments.
|
| 3. |
Inspection
by Buyer:
|
The
construction of the Vessel, its machinery, equipment and outfitting shall be
subjected, throughout the entire period of construction, to a planned system
of
quality control inspections administered and recorded by a quality control
department of the Shipyard in accordance with the Inspection Standards to ensure
that the Vessel complies with the Specification and the Contract. The necessary
tests and inspections of the Vessel, the machinery, equipment and outfitting
by
the Classification Society and other regulatory bodies concerned shall also
be
carried out and recorded. The Representative may attend any or all of the said
inspections at the Buyer’s cost and expense, during construction of the Vessel;
and/or testing and inspection of the Vessel, its machinery and equipment in
accordance with the Inspection Standards.
The
Builder shall give to the Representative at lease twenty-four (24) hours advance
notice stating particulars of any tests or inspections to be carried out and
the
date and place at which they are to be carried out, provided that in exceptional
circumstances the manner in which such notice is given may be modified by mutual
agreement. The Builder shall try to ensure that there is no overlapping between
any such tests and inspections.
16
Failure
of the Representative to be present at the tests and inspections after due
notice to him or to one of his assistants in case of his absence shall be deemed
to be a waiver of his right to be present.
During
working hours in the course of construction of the Vessel until delivery
thereof, the Buyer may carry out its own inspections and the Representative
and
his assistant(s) shall be given free and ready access to the Vessel, its
machinery and equipment, and to any other place where work is being done, or
materials are being processed or stored, in connection with construction of
the
Vessel, including the yards, workshops, stores and offices of the Builder,
and
the premises of subcontractors of the Builder, who are doing work or processing
or storing materials in connection with construction of the Vessel, save and
except areas which are controlled for purposes of national security or
otherwise, provided that the Representative or his assistant(s) shall not
disturb or obstruct the Builder or its subcontractors in construction of the
Vessel.
In
the
event that the Representative discovers any material or workmanship which does
not conform to the requirements of this Contract and the Specifications, the
Representative shall promptly give the Seller and/or the Builder a notice in
writing as to such non-conformity, upon receipt of which the Builder shall
correct such non-conformity or if the Builder does not agree it shall respond
in
writing within seven (7) days of receipt of the notice stating the reasons
why
it does not agree.
In
the
event that a difference of opinion between the parties hereto arises during
construction of the Vessel or prior to delivery of the Vessel concerning
technical matters in respect of the construction of the Vessel, its machinery
and equipment, or in respect of the materials or workmanship thereof, or in
respect of interpretations of the Specifications and/or the Inspection
Standards, such difference of opinion may be referred to the Classification
Society for disputes in respect of whether the Vessel complies with the
classification rules and regulations or to a mutually agreed expert for any
other issued and the opinion of the Classification Society or expert whichever
may apply thereon shall be final and binding upon the parties
hereto.
In
case
agreement is not reached between the parties for a reference to the
Classification Society or a mutually agreed expert or a reference is made but
no
opinion can be obtained as to the dispute then either of the parties hereto
may
commence an arbitration in accordance with the provisions of Article XIII
hereof.
| 4. |
Facilities:
|
The
Builder shall provide the Representative and his assistant(s) (up to a total
of
five (5) persons at a time) with adequate office space and necessary facilities,
dedicated telephone services, fax lines, fixed and portable computer outlets,
and normal office furnishings at, or in the immediate vicinity of the
Shipyard.
Long
distance telephone, postage, cable charges and other miscellaneous expenses
incurred by the Representative and/or his assistant(s) shall be for the Buyer’s
account but otherwise the said office facilities shall be provided free of
charge to the Buyer. The Builder and/or the Seller shall render all
reasonable
17
assistance
to the Representative and his assistants in obtaining visas for Japan and
assisting them to familiarise themselves with the Shipyard and the
Vessel.
| 5. |
Liability
of Seller and/or Builder:
|
The
Representative and his assistant(s) shall at all times be deemed to be the
Buyer’s employees. The Seller and the Builder shall be under no liability
whatsoever to the Buyer, the Representative or his assistant(s), for their
personal injuries, including death, during the time when he, or any of them,
is
on the Vessel, or within the premises of either the Builder or its
subcontractors, or are otherwise engaged in and about the construction of the
Vessel, unless, however, such personal injuries, including death, were caused
by
negligence of the Seller and/or the Builder, or of any of the Seller’s and/or
the Builder’s employees or agents or subcontractors. Nor shall the Seller and
the Builder be under any liability whatsoever to the Buyer, the Representative
or his assistant(s) for damage to, or loss or destruction of property of the
Buyer, the Representative, his assistant(s), or of the Buyer’s employees or
agents, unless such damage, loss or destruction was caused by negligence of
the
Seller and/or the Builder, or of any of the employees or agents or
subcontractors of the Seller and/or the Builder.
| 6. |
Responsibility
of Buyer:
|
|
(a)
|
The
Buyer undertakes and assures that the Representative shall attend
tests
and inspections in the manner provided in the Inspection Standards
and
also in such a way as will neither increase building costs nor cause
delay
or disturbance in the construction and delivery of the
Vessel.
|
|
(b)
|
In
the event that the Seller and/or the Builder considers any act or
acts of
the Representative to be an abuse of his or the Buyer’s rights under the
terms of this Contract, the Seller and/or the Builder may request
the
Buyer to replace such Representative by written notice, whereupon
the
Buyer shall investigate the matter and if such Seller’s and/or Builder’s
request is found justified, the Buyer shall effect such
replacement.
|
|
(c)
|
The
Buyer may not entrust the approval of plans and drawings or attendance
to
the inspections, tests and trials to any firm(s) or person(s) outside
its
organization unless prior written consent of the Seller and/or the
Builder
are given.
|
(End
of
Article)
18
ARTICLE
VI — SEA TRIAL
| 1. |
Notice:
|
The
Buyer
shall receive from the Seller and/or the Builder at least twenty-one (21) days
prior notice by cable confirmed in writing of the time and place of the sea
trial of the Vessel and the Buyer shall promptly acknowledge receipt of such
notice.
The
Buyer
shall have the right to have the Representative and/or his assistant(s)
appointed by the Buyer on board the Vessel to witness the sea trial, and to
ascertain that the Vessel meets the requirements of this Contract and the
Specifications. Failure of the Representative and/or his assistant(s) to attend
the sea trial of the Vessel after due notice to the Buyer as provided above
shall be deemed to be a waiver by the Buyer of its right to have the
Representative on board the vessel at the sea trial, and the Builder shall
conduct the sea trial without the Representative being present, and in such
case
the Buyer shall be obligated to accept the Vessel on the basis of (i) the Sea
Trial Report as defined in paragraph 4 of this Article; and (ii) a certificate
of the Builder that the Vessel, upon sea trial (and subject to completion of
alterations and corrections, if necessary, required following such sea trial)
has been found to conform to this Contract and the Specifications. The sea
trial
shall be carried out with the attendance of surveyors from the Classification
Society who must also issue a certificate that all Class requirements have
been
complied with.
| 2. |
Weather
Condition:
|
The
sea
trial shall be carried out under such weather condition as the Builder in his
reasonable judgment has deemed favourable. In the event of unfavourable weather
on the date specified for the sea trial, the same shall take place on the first
available day thereafter that the weather permits. It is agreed that if during
the sea trial of the Vessel the weather should suddenly become unfavourable
to
continue the sea trial, the sea trial shall be discontinued and postponed until
the first favourable day next following, unless the Buyer shall assent in
writing to its acceptance of the Vessel on the basis of the sea trial made
before such discontinuance has occurred.
Any
delay
of the sea trial caused by such unfavourable weather condition shall operate
to
postpone the Expected Delivery Date by the period of delay involved and such
delay shall be deemed to be a permissible delay in delivery of the
Vessel.
| 3. |
How
Conducted:
|
|
(a)
|
All
expenses in connection with the sea trial of the Vessel shall be
for the
account of the Builder who during the sea trial shall provide necessary
crew for safe navigation. The sea trial shall be conducted by the
Builder
in Japanese waters in the manner prescribed in the
Specifications.
|
|
(b)
|
Notwithstanding
the foregoing, fuel oil, lubricating oils and greases necessary for
the
sea trial of the Vessel shall be supplied by the Buyer
at
|
19
|
the
Shipyard at the time designated by the Builder prior to the sea trial,
and
the Seller shall pay to the Buyer the cost of the quantities thereof
consumed during the sea trial at the original purchase price. In
measuring
the consumed quantity, lubricating oils and greases remaining in
the main
engine, other machinery, their sumps and pipes, xxxxx tube and the
like,
shall be excluded. Payment therefore shall be effected as provided
in
Paragraph 2 of Article II hereof. The specifications of fuel oil,
lubricating oils and greases shall be in accordance with the
Specifications and also the instruction of the
Builder.
|
| 4. |
Method
of Acceptance or Rejection:
|
|
(a)
|
Upon
completion of the sea trial, the Builder shall give the Buyer’s
Representative a sea trial report containing the results of all tests
performed during such trial as per the Specification (“the Sea Trial
Reports”). Thereafter the Buyer shall, within three (3) days after receipt
of such report from the Builder, notify the Seller and the Builder
by
cable confirmed in writing of its acceptance or rejection of the
Vessel.
|
|
(b)
|
If
the Buyer rejects the Vessel, the Buyer shall indicate in its notice
in
what respect the Vessel or any part thereof does not conform to this
Contract and/or the Specifications. If the Seller and the Builder
are in
agreement with the Buyer’s contention as to such non-conformity, the
Builder shall make such alterations or corrections as may be necessary
to
rectify such non-conformity and shall arrange a further sea trial
or test
whichever is appropriate to demonstrate that the Vessel conforms
to the
Specifications to be attended by the Buyer’s Representative and/or his
assistants and/or Class Representative. Following the Sea Trial or
test
the Builder shall deliver to the Buyer an amended Sea Trial Report
or a
report of the test results whichever is applicable. The Buyer shall,
within three (3) Business Days after receipt of such amended Sea
Trial
Report notify the Seller of its acceptance or rejection of the Vessel.
If
the Buyer rejects the Vessel, the Buyer shall indicate in its notice
in
what respect the Vessel or any part thereof does not conform to this
Contract and/or the Specifications. The Buyer shall accept the Vessel
after repair of the Vessel and successful testing or sea trial as
above.
|
|
(c)
|
If
the Buyer fails to notify the Seller or the Builder in writing of
its
acceptance or rejection of the Vessel together with the reasons therefore
within the period as provided in the above Sub-paragraph (a), the
Buyer
shall be deemed to have accepted the Vessel.
|
|
(d)
|
Any
dispute arising between the parties hereto as the Vessel’s conformity or
non-conformity to requirements of this Contract and/or the Specifications
shall be resolved in accordance with the provisions of Article XIII
hereof.
|
| 5. |
Effect
of Acceptance:
|
The
Buyer’s notification of acceptance of the Vessel as set forth above shall be
final and binding so far as conformity of the Vessel with this Contract and
the
20
Specifications
is concerned shall preclude the Buyer from refusing the formal delivery of
the
Vessel, as hereinafter provided, if the Builder completes the construction
and
final fitting out of the Vessel as per the Contract and Specification and the
Seller and the Builder comply with the delivery formalities as provided in
Paragraphs 2 and 3 of Article VII hereof. However, the Buyer’s acceptance of the
Vessel shall not affect the Buyer’s rights under this Contract and in particular
the Buyer’s rights under Article IX hereof.
| 6. |
Disposition
of Remaining Consumable Stores:
|
Should
fresh water or other consumable stores furnished by the Builder for the sea
trial remain on board the Vessel at the time of acceptance thereof by the Buyer,
the Buyer shall purchase the same from the Builder at the original purchase
price thereof. Payment therefor by the Buyer shall be effected upon delivery
of
the Vessel as provided in Paragraph 2, Article II hereof.
(End
of
Article)
21
ARTICLE
VII — DELIVERY
| 1. |
Time
and Place:
|
The
Vessel shall be delivered by the Seller to the Buyer at the Shipyard on or
before 31st
January,
2009 (31st
January,
2009 being hereinafter called the “Expected Delivery Date”), subject to
postponement and/or extension thereof as provided in this Contract.
| 2. |
When
and How Effected:
|
Provided
that the Buyer shall have effected all payments hereunder due on and before
delivery of the Vessel and both parties hereto have fulfilled all of their
obligations under this Contract, (including delivery to the Buyer of the
documents specified in paragraph 3 of his Article) delivery of the Vessel shall
be effected forthwith by the concurrent delivery by each of the parties hereto
to the other of the Protocol of Delivery and Acceptance, acknowledging delivery
of the Vessel by the Seller and acceptance thereof by the Buyer.
| 3. |
Documents
to be Delivered to Buyer:
|
|
(i)
|
The
Builder shall deliver to the Buyer at least twenty-one (21) days
prior to
the proposed delivery date of the Vessel the duly notarized and apostilled
Builder’s Certificate.
|
|
(ii)
|
Upon
delivery and acceptance of the Vessel, the Seller 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 in accordance with the Sea Trial Report
pursuant to the Specifications.
|
|
(b)
|
Protocol
of Inventory of the equipment of the Vessel, including spare parts
and the
like, all as specified in the Specifications.
|
|
(c)
|
Protocol
of Stores of Consumable Nature made pursuant to Article VI
hereof.
|
|
(d)
|
Drawings
and Plans pertaining to the Vessel as stipulated in the
Specifications.
|
|
(e)
|
All
Certificates other than the Builder’s Certificate to be furnished pursuant
to this Contract and the Specifications.
|
|
It
is agreed that if, through no fault on the part of the Seller and
the
Builder, 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 the formal certificates as promptly as possible after
such
formal certificates have been
issued.
|
22
|
(f)
|
Declaration
of Warranty of the Seller and/or the Builder that the Vessel is delivered
to the Buyer free and clear of any liens, charges, 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 any authority of the prefecture or country
of
the port of delivery, as well as of all liabilities of the Builder
to its
subcontractors, employees and crew, and of all liabilities arising
out of
the operation of the Vessel in the sea trial, or otherwise, prior
to
delivery and acceptance thereof.
|
|
(g)
|
Commercial
Invoice
|
|
(h)
|
Bill
of Sale duly notarized and apostilled in the form required by the
laws of
the country under the flag of which the Vessel is to be
registered.
|
|
(i)
|
A
certificate confirming that no registration of the Vessel has been
effected by the Builder or the Seller prior to delivery and acceptance
of
the Vessel by the Buyer.
|
|
(j)
|
Certificate
certifying the lightship weight of the
Vessel.
|
| 4. |
Title
and Risk:
|
Title
to
and risk of loss of the Vessel shall pass to the Buyer upon delivery and
acceptance thereof as stated above. Prior to such delivery and acceptance title
to and risk of loss of the Vessel and her equipment shall be vested in the
Builder. Notwithstanding this Article title to the Buyer’s supplies shall always
vest with the Buyer.
| 5. |
Removal
of Vessel:
|
The
Buyer
shall take possession of the Vessel immediately upon delivery and acceptance
thereof, and shall remove the vessel from the premises of the Shipyard within
three (3) days after delivery and acceptance thereof is effected. If the Buyer
shall not remove the Vessel from the premises of the Shipyard within the
aforesaid three (3) days, then, in such event, the Buyer shall thereafter pay
to
the Seller or the Builder the reasonable expenses occasioned as a result of
such
delay over the aforesaid three (3) days. The Builder shall provide to the Buyer
free of charge any tug, linesman and/or dock master assistance required for
the
Vessel to leave the Shipyard.
(End
of
Article)
23
ARTICLE
VIII — DELAY AND EXTENSION OF TIME FOR DELIVERY
(FORCE
MAJEURE)
| 1. |
Clauses
of Delay:
|
If,
at
any time before actual delivery of the Vessel either the construction of the
Vessel or any performance required as a prerequisite of delivery of the Vessel
is delayed due to Acts of God; engagement in war or other hostilities or
preparations therefore; civil war; civil commotions; revolutions; riots or
insurrections; requirements of civil or governmental authorities; blockades;
embargoes; vandalism; sabotage; plague or other epidemics, quarantines strikes;
lockouts or other labour disturbances (in respect of which a maximum of 45
days
shall qualify as a force majeure event pursuant to this clause); acute labour
shortage; earthquakes; tidal waves; landslides; floods; typhoons; storms or
other weather condition not included in normal planning; prolonged failure,
shortage or restrictions in supply of electric current, oil or gas; damages
by
lightning; explosions; collisions or strandings; fires; import restrictions;
shortage of substitute materials, machinery or equipment or inability to obtain
delivery thereof provided that such materials, machinery and equipment at the
time of ordering could reasonably be expected by the Builder to be delivered
in
time; defects in materials, machinery and equipment which could not have been
detected by the Builder using reasonable care; casting, forging or machining
rejects or the like; delays caused by the Classification Society or other bodies
whose documents are required; delays in the Builder’s other commitments
resulting from any causes herein described which in turn delay the construction
of the Vessel or the Builder’s performance under this Contract provided that all
the foregoing events could not have been reasonably foreseen and avoided by
the
Seller or Builder; any cause of delay whatsoever whether or not of a kind
previously specified in this Article or of a different kind reasonably to be
considered beyond the control of the Builder always provided that these events
occur before the Expected Delivery Date then and in any such case, the Expected
Delivery Date shall be postponed for a period of time which shall not exceed
the
total accumulated time of all such delays provided always that no postponement
shall be granted under this contract if the event causing such a delay has
resulted from any negligence of the Builder or Seller.
| 2. |
Notice:
|
Within
fifteen (15) days after the date of commencement of any events as described
in
the preceding Paragraph 1 of this Article on account of which the Seller and/or
the Builder claim that it is entitled under this Contract to a postponement
of
the Expected Delivery Date, the Seller and/or the Builder shall advise the
Buyer
in writing of the date such events commenced, the nature of the cause, the
expected duration of the delay and the steps taken to mitigate the same
(provided such expected duration or mitigation steps can be ascertained at
the
time such notice is given).
Likewise,
within fifteen (15) days after such events have ceased to exist, the Seller
shall notify the Buyer in writing or by telex or fax of the date on which such
events ceased to exist and shall specify in such notice the period of time
by
24
which
the
Expected Delivery Date shall be postponed by reason of such events. Failure
of
the Seller to make any of the above said notifications in time shall be deemed
to be a waiver of the Seller’s and the Builder’s right to claim postponement of
the Expected Delivery Date in respect of such delay. Failure of the Buyer to
object to the Seller’s and/or the Builder’s claim for postponement of the
Expected Delivery Date, within fifteen (15) days after receipt by the Buyer
of
such notice from the Seller and/or the Builder, shall be deemed to be a waiver
by the Buyer of its right to object to such postponement of the Expected
Delivery Date.
| 3. |
Right
to Rescind for Excessive Permissible Delay:
|
If
the
total accumulated time for all permissible delays pursuant to paragraph 5
excluding (i) delays due to arbitration as provided in Article XIII, (ii) delays
due to negligence, failure or omission on the part of the Buyer including delays
on account of the Buyer’s Supplies defined in Article XVII hereof and (iii)
adjustment of the Expected Delivery Date due to modifications or changes of
the
Specifications made pursuant to Article IV hereof, amount to one hundred and
twenty (120) days or more, then, in such event, the Buyer may at its sole option
rescind this Contract in accordance with the provisions of Article X hereof.
The
Seller and the Builder may, at any time after the accumulated time of the
aforementioned delays justifying rescission by the Buyer as above provided,
propose a new delivery date and demand in writing that the Buyer shall make
an
election, in which case the Buyer shall, within thirty (30) days after such
demand is received by the Buyer, either notify the Seller of rescission of
this
Contract or consent to delivery of the Vessel on an agreed specific future
date
provided that if it consents to a postponement it shall maintain its right
to
receive any liquidated damages payable under Article Ill hereof as adjustment
of
the Contract Price; it being understood and agreed by the parties hereto that,
if any further delay occurs on account of causes justifying rescission as
specified in this Article, the Buyer shall have the right of rescinding this
Contract forthwith.
| 4. |
Right
to Rescind for Excessive Delay:
|
If
the
total accumulated lime of all delays whether permissible pursuant to paragraph
5
or non permissible, excluding (i) delays due to arbitration as provided in
Article XIII, (ii) delays due to negligence, failure or omission on the part
of
the Buyer including delays on account of the Buyer’s Supplies defined in Article
XVII hereof and (iii) adjustment of the Expected Delivery Date due to
modifications or changes of the Specifications made pursuant to Article IV
hereof, amount to two hundred and seventy (270) days or more, then, in such
event, the Buyer may at its sole option rescind this Contract in accordance
with
the provisions of Article X hereof. The Seller and the Builder may, at any
time
after the accumulated time of the aforementioned delays justifying rescission
by
the Buyer as above provided, propose a new delivery date and demand in writing
that the Buyer shall make an election, in which case the Buyer shall, within
thirty (30) days after such demand is received by the Buyer, either notify
the
Seller of rescission of this contract or consent to delivery of the Vessel
on an
agreed specific future date provided that if it consents to a postponement
it
shall maintain its right to receive any liquidated damages payable under Article
III hereof as adjustment of the Contract Price; it being understood and agreed
by
25
the
parties hereto that, if any further delay occurs on account of causes justifying
rescission as specified in this Article, the Buyer shall have the right of
rescinding this Contract forthwith.
| 5. |
Definition
of Permissible Delay:
|
Delays
on
account of the causes as specified in Paragraph 1 of this Article shall be
understood to be permissible delays and are to be distinguished from
unauthorized delays on account of which the Contract Price is subject to
adjustment as provided in Article III hereof.
(End
of
Article)
26
ARTICLE
IX — WARRANTY
| 1. |
Warranty
and Warranty Period:
|
For
the
period of twelve (12) months after the date of delivery of the Vessel to the
Buyer (hereinafter called the “Warranty Period”), the Seller and the Builder to
warrant the Vessel, its engines and accessories and all parts and equipment
thereof which are manufactured or supplied by the Builder or its subcontractors
under this Contract, but excluding the Buyer’s Supplies against defects which
are due to defective workmanship, defective material or defective construction
which defects are discovered within the Warranty Period shall have existed
at
the time of delivery of the Vessel to the Buyer (the said warranty, subject
to
all the terms and conditions of this Article, being hereinafter called the
‘Warranty”).
The
Builder and the Seller further guarantee the repairs or replacements to the
Vessel which are made under this guarantee for a further period of twelve (12)
months from the date of completion of such repair or replacement, provided
however, that the Builder’s and/or the Seller’s liability hereunder shall
terminate eighteen (18) months after the date of delivery and acceptance of
the
Vessel.
| 2. |
Notice
of Defects:
|
The
Buyer
shall notify the Seller and the Builder in writing, or by cable thereafter
confirmed in writing, as promptly as possible after discovery of any condition
as to which a claim of defect is made under the Warranty.
Such
notice shall include full particulars as to the nature of the claimed defect.
The Seller and the Builder shall have no obligation under the Warranty with
respect to defects discovered after the expiration of the Warranty Period;
nor
shall the Seller and the Builder have any obligation under the Warranty with
respect to defects discovered prior to the expiration of the Warranty Period,
unless notice of such defect is received by the Seller and the Builder as
provided herein not later than thirty (30) days after the expiration of the
Warranty Period or in relation to repairs or replacements to the Vessel made
under this Warranty unless notice is received under the eighteen (18) month
period set out in paragraph 1 hereof.
| 3. |
Extent
of Seller’s and Builder’s Liability:
|
|
(a)
|
The
Seller and the Builder shall in no event be liable for any special
or
consequential losses, expenses or damages including but not limited
to
loss of time, loss of profit or loss of earning (whether of the Vessel,
its master, officers or crew, or of the Buyer, its officers, agents
or
employees) or demurrage or towing or pilot charges or dockage incurred
by
the Buyer by reason of any defects specified in Paragraph 1 of this
Article.
|
|
(b)
|
The
Seller and the Builder shall in no event be liable for any damage
to the
Vessel, or any part of equipment thereof, caused or aggravated by
perils
of the sea, inland waters or navigation, or by normal wear and tear
or
depreciation, or by fire or other accident on board or ashore, or
by
improper maintenance, negligence or willful conduct on the part of
the
|
27
|
Buyer,
its employees or agents, or any other persons other than the Seller
and
the Builder, its employees or subcontractors engaged in work upon
the
Vessel.
|
|
|
(c)
|
The
Seller and the Builder shall in no event be liable for any defect
in or
damage to the Vessel, or any part or equipment thereof, caused or
aggravated by repairs, alterations, additions or renewals other than
those
made by the Builder. Promptly after making of any repairs to the
Vessel
during the Warranty Period by any party other than the Seller and
the
Builder, the Buyer shall give the Seller and the Builder prompt written
notice containing particulars as to the nature of such repairs,
accompanied by the report of an independent surveyor or a classification
surveyor.
|
| 4. |
Remedy
of Defects Covered by Warranty:
|
|
(a)
|
The
Seller or the Builder shall, at its expense, remedy any defects covered
by
the Warranty by repairing or replacing the defective part or parts
at the
Shipyard, or at any other repair facility of the Builder in Japan,
at the
Builder’s option.
|
|
(b)
|
If
it is impracticable to bring the Vessel to Japan for remedy of defects
under the Warranty, the Buyer may cause necessary repairs or replacements
to be made elsewhere suitable for the purpose, provided, however,
that the
Builder may furnish, or cause to be furnished, replacement parts
or
materials at its own expense, if to do so would not unduly affect
the
operation of the Vessel. Prior to making of any such repairs other
than by
the Seller and the Builder, the Buyer shall give notice in writing
of the
nature of the proposed repairs and the scheduled time and place thereof
(except in an emergency, but in such event notice shall be given
as soon
as possible thereafter), and, if practicable, the Seller and/or the
Builder shall be given opportunity to verify the Buyer’s claim of defect
under the Warranty by sending a representative at its own expense.
If the
Seller and/or Builder fail to send a representative having been given
notice of the scheduled time and place of the repairs they will be
deemed
to have accepted them.
|
|
(c)
|
With
respect to any defect covered by the Warranty which is remedied elsewhere
than at the Shipyard or in other facility of the Builder in Japan,
the
Seller or Builder shall pay to the Buyer the Buyer’s cost thereof, not
exceeding the cost of providing the same remedy at the Shipyard (deducting
the cost of any replacement parts or materials actually furnished
by the
Seller and/or the Builder to the Buyer for making of such repairs),
such
payment to be made not later than sixty (60) days after submission
to the
Builder of repair invoices and other appropriate evidence to substantiate
the claim under the Warranty.
|
| 5. |
Freight
Charges:
|
Replacement
parts or materials to be furnished to the Buyer by the Seller and/or the Builder
for making of repairs under the Warranty elsewhere than at the Shipyard or
in
other facility of the Builder in Japan shall be transported to the
28
place
of
repairs at the Builder’s expense. Such transportation shall be by the most
expeditious public surface transportation. If request is made in time by the
Buyer, the Seller shall cause the Builder to transport heavy or bulky parts
or
materials by air transportation upon the Buyer paying to the Seller or the
Builder the difference between the surface and air costs. The Seller shall
cause
the Builder to, in every case, use its best efforts to expedite the furnishing
to the Buyer of replacement parts or materials required under the
Warranty.
| 6. |
Conditions
of Warranty:
|
|
(a)
|
The
Buyer shall exercise the care of a prudent shipowner in keeping the
Vessel
in good condition, working order and repairs, and shall use the Vessel,
its machinery and equipment only for the purpose intended and as
described
in this Contract during the Warranty Period.
|
|
(b)
|
The
Buyer shall follow the recommendations contained in operating and
maintenance manuals (in English language) provided by the Builder
prior to
delivery of the Vessel.
|
In
the
event that the Buyer or its employees or agents shall fail to operate the
Vessel, its machinery or equipment, in accordance with the conditions specified
herein, the Seller and the Builder shall be entitled to withdraw the Warranty
as
to the part or parts of the Vessel affected by such failure upon giving written
notice to this effect to the Buyer, accompanied by substantiation of such
claimed failure.
| 7. |
Warranty
to be Exclusive:
|
The
Warranty shall replace and exclude any and all other liability, guarantee or
warranty, expressed or implied, pursuant to law, custom, statute or otherwise,
by reason of the construction and sale of the Vessel to the Buyer by the
Seller.
| 8. |
Assignment
of Rights:
|
The
Buyer
shall have the right on or after delivery and acceptance of the Vessel to assign
its rights under Article IX hereof to any purchaser or bareboat charterer or
financier of the Vessel with the prior written consent of the Builder. The
Builder retains the right to reject the assignment in its fair judgment. Notice
of any such assignment shall be given by the Buyer to the Builder and the
Seller.
| 9. |
Arbitration:
|
Any
dispute under this Article shall be referred to Arbitration in accordance with
the provisions of Article XIII hereof.
(End
of
Article)
29
ARTICLE
X — RESCISSION BY BUYER
| 1. |
Notice:
|
The
payments made by the Buyer prior to delivery of the Vessel under this Contract
shall be in the nature of advances to the Seller. In the event that the Buyer
shall exercise its right of rescission of this Contract under and pursuant
to
any of the provisions of this Contract whereby the Buyer is specifically
entitled to do so then the Buyer shall notify the Seller in writing of such
rescission which shall be effective as of the date when notice thereof is
received by the Seller.
| 2. |
Refund
to Buyer:
|
Within
twelve (12) Business Days from the date of receipt by the Seller of such notice
of rescission of this Contract, unless the Seller duly contests such rescission
by the Buyer and proceeds to arbitration within the said period pursuant to
Article XIII hereof, the Seller shall refund by telegraphic transfer to the
Buyer the full amount of the sums paid by the Buyer to the Seller under this
Contract and the cost of the Buyer’s Supplies, if any. In such event, the Seller
shall in addition pay to the Buyer interest at the rate of ten percent (10%)
per
annum on the amount required to be refunded to the Buyer computed from the
respective dates on which such sums were paid by the Buyer to the Seller to
the
date of remittance thereof by the Seller, provided, however, that if the said
rescission by the Buyer is made under the provisions of Paragraphs 3 and 4
of
Article VIII hereof, then, in such event, the Seller shall not be required
to
pay any interest for the period of time equal to that of the permissible
delays.
If
the
contract is rescinded by the Buyer under the provisions of Article III hereof,
the Buyer shall in no event be entitled to any liquidated damages.
| 3. |
Discharge
of Obligations:
|
Upon
such
refund pursuant to paragraph 2 hereof by the Seller to the Buyer, all
obligations, duties and liabilities of each of the parties hereto to the other
under this Contract shall be forthwith completely discharged.
| 4. |
Refund
Guarantee:
|
Shortly
prior to the Seller’s receipt of each of the First, Second, Third, and Fourth
Instalment referred to in Article II (Contract Price and Terms of Payment)
of
this Contract, as security for refund of instalments paid prior to the delivery
of the Vessel, the Seller shall furnish the Buyer with the original of an
assignable letter of guarantee (the “Refund Guarantee”) in the form of Exhibit
“C” attached hereto issued by one of the first class Japanese Banks to be
accepted by the Buyer in favour of the Buyer guaranteeing the Seller’s refund to
the Buyer of the relevant pre-delivery instalment and interest payable thereon
in case of contingencies as described in this Article.
Each
Refund Guarantee shall cover the relevant pre-delivery instalment plus interest
accrued thereon as described in this Article and shall remain in full
force
30
and
effect throughout the duration of the Contract from the date such Refund
Guarantee is issued until:
|
(a)
|
receipt
by the Buyer of all sums together with interest accrued thereon guaranteed
by the said Refund Guarantee; or
|
|
(b)
|
upon
acceptance by the Buyer of the delivery of the Vessel at the Shipyard
in
accordance with the terms of this
Contract,
|
whichever
comes earlier and in such event the Refund Guarantee shall be promptly returned
to the Seller.
If
for
whatsoever reason, other than the Buyer’s default under Article XI hereof, any
of the Refund Guarantees ceases to be in full force and effect, or the issuing
bank’s financial condition deteriorates, the Seller shall have the obligation to
deliver to the Buyer within ten (10) Business Days from the date on which such
Refund Guarantee ceased to be in full force and effect or the issuing bank’s
financial condition deteriorated, a substitute letter of guarantee issued by
a
bank acceptable to the Buyer and being in a form and substance acceptable to
the
Buyer. In the event that the Seller fails to deliver to the Buyer such
substitute letter of guarantee as aforesaid, the Buyer shall be entitled to
rescind the Contract in accordance with the provisions of this Article
X.
The
costs
for obtaining and maintaining the Refund Guarantee and any substitute thereof
shall be paid by the Seller on behalf of the Buyer, provided however that the
Seller shall have no obligation to cover such costs until it receives sufficient
funds from the Buyer in order to pay the same (and for which prior notice will
be given to the Buyer by the Seller) and provided also however that the Seller
shall be reimbursed by the Buyer for such cost in every six (6) months after
the
issuance of each Refund Guarantee and provided further that the Buyer’s
obligation hereunder shall not exceed an amount equal to three quarters of
one(1) per cent(0.75%) per annum of the amount of each pre-delivery instalment
actually paid and guaranteed under the relevant Refund Guarantee or substitute
thereof.
(End
of
Article)
31
ARTICLE
XI — BUYER’S DEFAULT
| 1. |
Definition
of Default:
|
The
Buyer
shall be deemed to be in default of its obligations under this Contract in
the
following cases:
|
(a)
|
If
any of the instalments due and payable before delivery of the Vessel
is
not paid to the Seller within five (5) Banking days (excluding Bank
Holidays in New York, London, Athens and Tokyo) after the Due Date
as
provided in Article II hereof; or
|
|
(b)
|
If
the instalment due and payable upon delivery of the Vessel is not
paid
concurrently with delivery of the Vessel as provided in Article
II hereof;
or
|
|
(c)
|
If
the Buyer, when the Vessel is duly tendered for delivery by the Seller
in
accordance with the provisions of this Contract, fails to take delivery
of
the Vessel without specific and valid ground therefore under this
Contract.
|
| 2. |
Interest
and Charge:
|
If
the
Buyer is in default of payment of any of the instalments, then in such event,
the Buyer shall pay to the Seller interest on such amount unpaid at the rate
of
ten percent (10%) per annum from the Due Date thereof to the date of full
payment; in the event that the Buyer shall fail to take delivery of the Vessel
without any specific and valid ground under this Contract as provided in
Paragraph 1 (c) of this Article, the Buyer shall be deemed to be in default
of
payment of the instalment due on delivery of the Vessel and shall pay interest
thereon at the same rate as aforesaid and from the day on which the Vessel
is
tendered for delivery by the Seller to the day on which the Vessel has been
delivered.
Upon
payment to the Seller of the relevant instalment or instalments together with
interest accrued thereon and reasonable expenses incurred by the Seller for
recovering the same, the Seller or the Builder shall have no other claim for
damages against the Buyer.
| 3. |
Effect
of Default:
|
|
(a)
|
If
any default by the Buyer as provided hereinbefore occurs, the Expected
Delivery Date shall be automatically postponed for the period of
such
default by the Buyer.
|
|
(b)
|
If
any default by the Buyer continues for a period of fifteen (15) days,
the
Seller may, at its option, rescind this Contract by giving notice
of such
effect to the Buyer in writing.
|
|
Upon
dispatch by the Seller of such notice of rescission, this Contract
shall
be forthwith rescinded and terminated, and the Buyer’s Supplies, if any,
shall become the sole property of the
Seller.
|
32
|
In
the event of such rescission of this Contract, the Seller shall be
entitled to retain any instalment or instalments already paid by
the Buyer
to the Seller under this contract provided always that in the case
of the
sale of the Vessel the Seller shall take into account such instalments
in
accordance with the provisions of Paragraph 4 of this
Article.
|
| 4. |
Disposal
of Vessel:
|
|
(a)
|
In
the event that this Contract is rescinded by the Seller under the
provisions of Paragraph 3 of this Article, the Seller may, at its
sole
discretion, either complete the Vessel and sell the same, or sell
the
Vessel in its incompleted state, free from any right or claim of
the
Buyer. Such sale of the Vessel by the Seller shall be by public auction
or
private contract if the sale by private contract is deemed in the
sole
judgment of the Seller to be more advisable and shall be made on
such
terms and conditions as the Seller shall deem fit without any liability
whatsoever upon the Seller for any loss or damage sustained by the
Buyer
as a result of such sale.
|
|
(b)
|
In
the event of sale of the Vessel in its completed state, the proceeds
of
sale received by the Seller shall be applied firstly to payment of
all
expenses attending such sale or otherwise incurred by the Seller
as a
result of the Buyer’s default and then to payment of the unpaid
instalments of the Contract Price and interest on such unpaid instalments
at the rate of ten percent (10%) per annum from the respective due
dates
thereof to the date of receipt of the proceeds.
|
|
(c)
|
In
the event of sale of the Vessel in its incompleted state, the proceeds
of
sale received by the Seller shall be applied firstly to all expenses
attending such sale or otherwise incurred by the Seller as a result
of the
Buyer’s default and then to payment of all costs and expenses of
construction of the Vessel incurred by the Seller less the instalments
already paid by the Buyer and compensation to the Seller for a reasonable
loss of profit due to rescission of this Contract.
|
|
(d)
|
In
either of the above events of sale, if the proceeds of sale exceeds
the
total amount against which such proceeds are to be applied as aforesaid,
the Seller shall pay the excess to the Buyer without interest, provided
that the amount of such payment to the Buyer shall in no event exceed
the
total amount of instalments already paid by the Buyer to the Seller
and
cost of the Buyer’s Supplies, if any.
|
|
(e)
|
If
the proceeds of sale are insufficient to pay such total amount, the
Buyer
shall promptly pay the deficiency to the Seller upon
demand.
|
(End
of
Article)
33
ARTICLE
XII — BUILDER’S INSURANCE
| 1. |
Extent
of Insurance Coverage:
|
The
Seller warrants that the Builder shall, at its own cost and expense, keep the
Vessel and all machinery, materials, equipment, appurtenances and outfit
delivered to the Shipyard for the Vessel or built into, or installed in or
upon
the Vessel including the Buyer’s Supplies, fully insured with first class
Japanese insurance companies designated by the Builder, from the date of
keel-laying of the Vessel until the Vessel is completed, delivered to and
accepted by the Buyer, under coverage corresponding to the Japanese Builders’
Risks Insurance Clause.
The
amount of such insurance coverage shall, up to the date of delivery of the
Vessel, be in an amount at lease equal to, but not limited to, (i) the
aggregated amount of all instalments of the Contract Price paid by the Buyer
to
the Seller and (ii) the value of the Buyer’s Supplies. The policy referred to
hereinabove shall be taken out in the name of the Builder and all losses under
such policy shall be payable to the Builder. The Builder shall furnish the
Buyer
with a copy of the said insurance policy or policies on request.
| 2. |
Application
of Recovered Amount:
|
| (a) |
Partial
Loss
|
In
the
event that the Vessel, any parts, materials, machinery, equipment, appurtenances
and outfits thereof shall be damaged by any insured cause whatsoever prior
to
acceptance thereof by the Buyer and in the further event that such damage shall
not constitute an actual or a constructive total loss of the Vessel, the Seller
shall cause the Builder to apply the insurance moneys recovered under said
insurance policy to the repair of such damage, satisfactory to the
Classification Society and the Buyer shall accept the Vessel under this Contract
if completed in accordance with this Contract and Specifications and free of
class recommendations and notations. The Buyer shall not, on account of any
such
damage or any repair thereof, make any claim for alleged consequential loss
or
depreciation.
| (b) |
Total
Loss
|
However,
in the event that the Vessel is determined to be an actual or constructive
total
loss, by the mutual agreement between the parties hereto, either:
|
(i)
|
the
Builder shall proceed in accordance with the terms of this Contract,
in
which case the amount recovered under the said insurance policy shall
be
applied to the reconstruction of the Vessel’s damage, provided the parties
hereto shall have first agreed in writing as to such reasonable
postponement of the Expected Delivery Date and adjustment of other
terms
of this
|
34
Contract
including the Contract Price as may be necessary for the completion of such
reconstruction; or
|
(ii)
|
the
Seller shall refund immediately to the Buyer the amount of all instalments
paid to the Seller under this contract together with interest at
the rate
of five percent (5%) per annum, provided however that in the case
of such
total loss being due to causes described in Article VIII, Paragraph
1 no
interest shall be payable, whereupon this contract shall be rescinded
and
all rights, duties, liabilities and obligations of each of the parties
to
the other shall terminate
forthwith.
|
If
the
parties hereto fail to reach such agreement within two (2) months after the
Vessel is determined to be an actual or constructive total loss, the provisions
of sub-paragraph (b)(ii) above shall be applied.
| 3. |
Termination
of Seller’s and Builder’s Obligation to Insure:
|
The
Seller’s obligation to cause the Builder to insure the Vessel hereunder shall
cease and terminate forthwith upon delivery thereof to the Buyer.
(End
of
Article)
35
ARTICLE
XIII — DISPUTES AND ARBITRATION
| 1. |
Disputes:
|
If
any
dispute arises between the parties hereto relating to the construction of the
Vessel including equipment, machinery, materials and workmanship or in relation
to compliance with the rules and regulations of the Classification Society
or
other applicable regulations or in relation to the contract or the
Specifications, the parties may either by mutual agreement refer the dispute
to
the Classification Society for disputes in respect of whether the Vessel
complies with the classification rules and regulations or to a mutually agreed
expert for any other issued whose decision shall be final and binding upon
the
parties hereto or may refer the dispute to arbitration pursuant to paragraph
2
hereof.
| 2. |
Arbitration:
|
All
disputes, unless settled in accordance with Paragraph 1 of this Article XIII,
arising out of or in connection with this Contract or its rescission shall
be
referred to arbitration in London, in accordance with the provisions of
Arbitration Act 1996 or any statutory modification or re-enactment thereof
for
the time being in force. The arbitration shall be conducted, in English language
in accordance with the London Maritime Arbitrators Association (LMAA) Terms
current at the time when the arbitration proceedings are commenced, with
reference to three (3) arbitrators (hereinafter called the “Arbitration Board”),
where each party shall appoint an arbitrator and the two arbitrators so
appointed shall appoint a third arbitrator.
Either
party may demand arbitration of any such dispute by giving notice to the other
party. Any demand for arbitration by either of the parties hereto shall state
the name of the arbitrator appointed by such party. Within fourteen (14) days
after receipt of notice of such demand for arbitration, the other party shall
in
turn appoint a second arbitrator and give notice in writing of such appointment
to the party demanding arbitration. If a party fails to appoint an arbitrator
as
aforementioned within fourteen (14) days following receipt of notice of demand
for arbitration by the other party, the party failing to appoint an arbitrator
shall be deemed to have accepted and appointed, as its own arbitrator, the
arbitrator appointed by the party demanding arbitration and the arbitration
shall proceed before this sole arbitrator who alone in such event shall
constitute the Arbitration Board.
If
the
two arbitrators are unable to agree upon a third Arbitrator within twenty (20)
days after appointment of the second arbitrator, either of the said two
arbitrators may apply to the President for the time being of the London Maritime
Arbitrators Association to appoint the third arbitrator.
The
award
of the arbitrators shall be final and binding on the parties.
| 3. |
Alteration
of Expected Delivery Date:
|
In
the
event of reference to arbitration of any dispute arising out of matters
occurring prior to delivery of the Vessel, the award may include
any
36
postponement
of the Expected Delivery Date which the Arbitration Board may deem appropriate
and/or a determination by the Arbitration Board as to whether a delay is
classified as permissible or non-permissible for the purposes of Article VIII
and/or III hereof.
(End
of
Article)
37
ARTICLE
XIV — RIGHT OF ASSIGNMENT
In
addition to Article IX hereof, neither of the parties hereto shall assign this
Contract to a third party unless prior consent of the other party is given
in
writing, provided however, that such consent will not be required in the case
of
the Buyer assigning this Contract to a bank or financial institution financing
any of the instalments payable hereunder and for which prior written notice
is
given to the Seller and the Builder or to a company nominated and guaranteed
by
the Buyer and notified by the Buyer to the Seller prior to the delivery of
the
Vessel.
In
case
of assignment by the Buyer, such assignment shall be notified to the Japanese
Government, and the Buyer shall remain liable under this Contract.
This
Contract shall inure to the benefit of and shall be binding upon the lawful
successors or the legitimate assignees of the parties hereto.
(End
of
Article)
38
ARTICLE
XV — TAXES AND DUTIES
| 1. |
Taxes
and Duties Imposed in Japan:
|
The
Seller shall bear and pay all taxes and duties imposed in Japan in connection
with execution and/or performance of this Contract excluding any taxes and
duties imposed in Japan upon the Buyer’s Supplies.
| 2. |
Taxes
and Duties Imposed outside Japan:
|
The
Buyer
shall bear and pay all taxes and duties imposed outside Japan in connection
with
execution and/or performance of this Contract except for taxes and duties
imposed upon those items and services to be procured by the Builder or the
Seller for construction of the Vessel (and the Seller hereby agrees to indemnify
and hold harmless the Buyer in relation to such taxes and duties).
(End
of
Article)
39
ARTICLE
XVI
— PATENTS, TRADEMARKS AND COPYRIGHTS, ETC
| 1. |
Patents,
Trademarks and Copyrights:
|
Machinery
and equipment of the Vessel may bear the patent number, trademarks or trade
names of the manufacturers.
The
Seller and the Builder shall indemnify and hold harmless the Buyer from patent
liability or claims of patent infringement of any nature or kind including
costs
and expenses for or on account of any patented or patentable invention made
or
used in the performance of this Contract and from any claims for breaches of
trademarks, copyright or design rights or any other third party rights in
respect of the Vessel and raw materials, machines or devices used for or in
the
construction of the Vessel. The Seller and/or the Builder may at their
discretion take over the defence of any such proceedings brought against the
Buyer.
Nothing
contained herein shall be construed as transferring any patent or trademark
rights or copyright in equipment covered by this Contract and all such rights
are hereby expressly reserved to the true and lawful owners
thereof.
The
Seller’s and the Builder’s warranty hereunder does not extend to the Buyer’s
Supplies, if any.
| 2. |
Specifications.
Plans and Drawings:
|
The
Builder retains all rights in and to the Specifications, plans and drawings,
technical descriptions, calculations, test results and other data, information
and documents concerning the design and construction of the Vessel and the
Buyer
undertakes therefore not to bring them to the knowledge of any third parties
without the prior written consent of the Builder exception where it is necessary
for normal operation, repair and maintenance of the Vessel.
(End
of
Article)
40
ARTICLE
XVII — BUYER’S SUPPLIES
| 1. |
Responsibility
of Buyer:
|
|
(a)
|
The
Buyer shall, at its own risk, cost and expense, supply and deliver
to the
Builder all items of equipment and supplies specified in the
Specifications as being furnished by the Buyer (herein called the
“Buyer’s
Supplies”) at warehouses or other storages of the Shipyard or other places
designated by the Builder in the proper condition ready for installation
in or on the Vessel in accordance with the time schedule designated
by the
Builder.
|
|
(b)
|
In
order to facilitate installation by the Builder of the Buyer’s Supplies in
or on the Vessel, the Buyer shall furnish the Builder with necessary
specifications, plans, drawings, instruction books, manuals, test
reports
and certificates required by the rules and regulations. The Buyer,
if so
requested by the Builder, shall, without any charge to the Builder,
cause
the representative of the manufacturers of the Buyer’s Supplies to assist
the Builder in installation thereof in or on the Vessel and/or to
carry
out installation thereof by themselves and/or to make necessary
adjustments thereof at the Shipyard or other places designated by
the
Builder.
|
|
(c)
|
Any
and all of the Buyer’s Supplies shall be subject to the Seller’s and/or
the Builder’s reasonable right of rejection, as and if they are found to
be unsuitable or in improper condition for installation. However,
if so
requested by the Buyer, the Seller may cause the Builder to repair
or
adjust the Buyer’s Supplies without prejudice to the Seller’s and the
Builder’s other rights hereunder and without being responsible for any
consequences therefrom. In such case, the Buyer shall reimburse the
Seller
and/or the Builder for all costs and expenses incurred by the Seller
and/or the Builder in such repair or adjustment and the Expected
Delivery
Date shall be automatically extended for a period of time necessary
for
such repair or replacement.
|
|
(d)
|
Should
the Buyer fail to deliver any of the Buyer’s Supplies within the time
designated, and as a result of this delay the Builder cannot deliver
the
vessel on the Expected Delivery Date, the Expected Delivery Date
shall be
postponed by the period of the actual delay caused by the delay in
delivery of the Buyer’s Supplies.
|
|
If
delay in delivery of any of the Buyer’s Supplies exceeds thirty (30) days,
then, the Seller and/or the Builder shall be entitled to proceed
with
construction of the Vessel without installation thereof in or on
the
Vessel and the Buyer shall accept and take delivery of the Vessel
so
constructed, unless otherwise mutually agreed upon between the parties
hereto.
|
| 2. |
Responsibility
of Seller and/or Builder:
|
The
Builder shall be responsible for storing, insuring and handling with reasonable
care the Buyer’s Supplies after delivery thereof at the Shipyard and shall, at
its own cost and expense, thereafter install them in or on the
Vessel,
41
unless
otherwise provided herein or agreed upon by the parties hereto; provided,
however, that the Seller and the Builder shall not be responsible for quality,
efficiency and/or performance of any of the Buyer’s Supplies.
| 3. |
Running
Spares, Stores, Provisions and Other Supplies:
|
Running
spares, stores, provisions and other supplies necessary to be kept or stored
on
board the Vessel for operation of the Vessel including those provided for in
the
Specifications are not construed as the Buyer’s Supplies under this
Article.
These
spares, stores, provisions and supplies shall be furnished to and placed on
board the Vessel at the Buyer’s cost and expense.
(End
of
Article)
42
ARTICLE
XVIII — NOTICE
Any
and
all notices and communications in connection with this Contact shall be
addressed as follows:
|
To
the Buyer:
|
ENIAPROHI
SHIPPING CORPORATION
c/o
SAFETY MANAGEMENT OVERSEAS S.A.
00
XXXXXX XXXXXXXXX
X.X.XXX
70837
GR-16605
VOULA
Phone: x00
000 000 0000
Fax: x00
000 000 0000
|
|
To
the Seller:
|
ITOCHU
Corporation
0-0,
Xxxx-Xxxxxx 0-Xxxxx, Xxxxxx-xx,
Xxxxx
000-0000, Xxxxx
Attention: Marine
Group No.1 of Marine Department
TOKBR
Section
Phone: 00-0-0000-0000
Fax
: 00-0-0000-0000
|
Any
and
all notices and communications in connection with this Contract shall be written
in English language. For the avoidance of doubt, all references to notices
in
writing shall include notices given by fax. Every notice, request, demand or
other communication under this Contract shall be given by first class registered
air-mail or other fast delivery postal service or fax or telex and be deemed
to
have been received (a) in the case of letter posted on the earlier of (i) actual
receipt and (ii) five (5) days after being posted and a receipt being obtained
from the relevant postal service and (b) in the case of a telefax at the time
of
dispatch thereof (provided that if the date of receipt or, as the case may
be,
dispatch is not a business day in the country of the addressee it shall be
deemed to have been received at the opening of business on the next such
business day).
(End
of
Article)
43
ARTICLE
XIX — EFFECTIVE DATE OF CONTRACT
|
1.
|
This
Contract shall become effective on the date of execution hereof.
Notwithstanding the foregoing, in the event that the Construction
Permit
for the Vessel is not obtained from the Japanese Government prior
to
keel-laying of the Vessel (i.e. the first structural assembly of
the
Vessel has been placed in the building dock or on the building berth),
then, this Contract shall automatically become null and void, unless
otherwise mutually agreed upon in writing between the parties hereto
and
the parties hereto shall be immediately and completely discharged
from all
of their obligations to each other under this Contract as though
this
Contract had never been entered into at all. In such event, the Seller
shall refund to the Buyer full amount of the First Instalment as
defined
in Article II of this Contract together with interest at the rate
of six
percent (6%) per annum from the date of receipt of such amounts by
the
Seller until the date of refund thereof within thirty (30) days after
the
date on which this Contract shall have become null and
void.
|
(End
of
Article)
44
ARTICLE
XX—
SELLER’S AND/OR BUILDER’S DEFAULT
The
Buyer
shall be entitled to terminate this Contract forthwith whereupon the provisions
of Article X hereof shall apply, by the giving of notice to the Seller by letter
or facsimile should any of the following events occur:
|
(a)
|
the
cessation of the carrying on of business or the filing of a petition
or
the making of an order or the passing of an effective resolution
for the
winding-up of or the appointment of a receiver of the undertaking
or
property of, or the insolvency of, the Seller or the Builder unless
(i)
the Builder or the Seller (whichever is relevant) provide to the
Buyer
within forty five (45) days of written notice from the Buyer evidence
that
it remains able to complete the Vessel in accordance with the terms
of
this Contract and (ii) such evidence is accepted in the fair judgement
of
the Buyer, or
|
|
(b)
|
the
placing of the Seller or the Builder under court protection or analogous
proceedings or corporate reorganization unless (i) the Builder or
the
Seller (whichever is relevant) provide to the Buyer within one hundred
and
twenty (120) days of written notice from the Buyer evidence that
it
remains able to complete the Vessel in accordance with the terms
of this
Contract and (ii) such evidence is accepted in the fair judgement
of the
Buyer.
|
(End
of
Article)
45
ARTICLE
XXI — INTERPRETATION
| 1. |
Laws
and Regulations Applicable:
|
The
parties hereto agree that this Contract shall be governed by, and the validity
and interpretation of this Contract and of each Article and part thereof shall
be construed and interpreted in accordance with, the laws of
England.
| 2. |
Discrepancies:
|
All
general language or requirements embodied in the Specifications are intended
to
amplify, explain and implement the requirements of this Contract. However,
in
the event that any language or requirements so embodied permit of an
interpretation inconsistent with any provisions of this Contract, then, in
each
and every such event, the applicable provisions of this Contract shall govern.
The Specifications and the Plans and Drawings (which expression for the purposes
of this Paragraph shall include the Plan) are also intended to explain each
other, and anything shown on the Plans and Drawings and not stipulated in the
Specifications or stipulated in the Specifications and not shown on the Plans
and Drawings shall be deemed and considered as if embodied in both.
| 3. |
Entire
Agreement:
|
This
Contract contains the entire agreement and understanding between the parties
hereto and supersedes all prior negotiations, representations, undertakings
and
agreements on any matter of this Contract.
(End
of
Article)
46
IN
WITNESS WHEREOF,
the
parties hereto have caused this Contract to be duly executed on the day and
year
first above written.
|
Buyer:
|
Seller:
|
|
|
/s/Xxxxxx
Xxxxxxxxxxxx
|
/s/
Y. Nishimuro
|
|
|
ENIAPROHI
SHIPPING CORPORATION
|
ITOCHU
CORPORATION
|
|
|
Xxxxxx
Xxxxxxxxxxxx
|
X.
Xxxxxxxxx
|
|
|
By:
|
By:
|
|
|
Title:
Attorney-in-fact
|
Title:
Attorney-in-fact
|
|
|
Witness:
|
Witness:
|
|
|
/s/
X.X. Xxxxxxxx
|
/s/
X. Xxxxxxxx
|
|
|
By:
|
By:
|
|
|
Name:
X.X. Xxxxxxxx
|
Name:
X. Xxxxxxxx
|
|
|
Title:
|
Title:
|
47
EXHIBIT
“A”
STAGE
CERTIFICATE
Hull
No.
3254 of IHI
MARINE UNITED INC.
(the
“Builder”)
under
the Shipbuilding Contract dated the 28th day of August 2006 (the “Shipbuilding
Contract”)
made
between the Builder and ITOCHU
CORPORATION
(the
“Seller”),
and
the Shipsales Contract dated the 28th day of August 2006 (the “Shipsales
Contract”)
made
between ENIAPROHI
SHIPPING CORPORATION
(the
“Buyer”)
and the
Seller (both the “Contracts”)
We
hereby
certify in connection with the Contracts of the above Vessel that
[____________________]
|
The
Builder
|
The
Buyer
|
|
|
Authorised
Representative
|
Authorised
Representative
|
|
|
For
and on behalf of
The
Classification Society
Dated
|
48
EXHIBIT
“B”
PERFORMANCE
GUARANTEE
Messrs.
ITOCHU Corporation
Dear
Sirs
We
hereby
irrevocably and unconditionally, and jointly and severally with ENIAPROHI
SHIPPING CORPORATION
(hereinafter called the “BUYER”),
guarantee to you (i) the due and punctual payment of each instalment of the
Contract Price and all other sums of money owing to you by the Buyer under
the
Shipsales Contract (hereinafter called the “Contract”)
dated
15 March 2006 in respect of one (1) unit of D/W 87,000M.T. Type Bulk
Carrier bearing the Hull No.3254 (hereinafter called the “Vessel”)
of
IHI
MARINE UNITED INC.,
Japan
and (ii) the due and punctual performance of any other obligations of the Buyer
under the Contract, and theretofore, we hereby irrevocably and unconditionally
(save as provided below) agree that should there be any default in payment
of
any sum or any default of performance of any obligation thereunder, we shall,
immediately upon your simple demand (to be addressed in writing to us at 00
Xxxxxx Xxxxxxxxx, XX-00000 Xxxxx, Xxxxxx, Xxxxxx, Telefax: x00-000-000-0000),
make payment of such sum or perform such other obligation in your favour in
accordance with the terms thereof.
This
Performance Guarantee shall become effective upon execution by us and shall
become null and void upon rescission by the BUYER of the Contract or delivery
to
and acceptance by the Buyer of the Vessel, and in either case this Guarantee
and
any copies thereof in your possession shall be immediately returned to
us.
The
existence of this Performance Guarantee and Its terms and conditions shall
be
treated by you as confidential and shall not be disclosed by you to any person,
authority or entity and your obligation of confidentiality hereunder shall
continue even after the return of this Performance Guarantee to
us.
This
Performance Guarantee shall be governed by and construed in accordance with
the
laws of England and any dispute arising under or in connection with this
Performance Guarantee shall be submitted to arbitration on terms similar to
those provided pursuant to the provisions of Article XIII of the Contract,
which
Article shall be incorporated mutatis mutandis in this Performance
Guarantee.
|
Dated: _______________________________
|
|
By:
|
|
Title:
|
49
EXHIBIT
“C”
ENIAPROHI
SHIPPING CORPORAITION
c/o
SAFETY MANAGEMENT OVERSEAS S.A.
00
Xxxxxx
Xxxxxxxxx
GR-16605
Voula, Athens, Greece
REFUND
GUARANTEE
Gentlemen:
We
hereby
open our irrevocable Letter of Guarantee number in favour of ENIAPROHI
SHIPPING CORPORATION
(hereinafter called the “Buyer”)
for
account of ITOCHU
CORPORATION
(hereinafter called the “Seller’)
as
follows in connection with the Shipsales Contract dated
(hereinafter called the “Contract”)
made by
and between the Buyer and the Seller for the construction and sale of one (1)
D/W 87,000 M.T. Type Bulk Carrier having Hull No. 3254 of IHI
MARINE UNITED INC.
(hereinafter called the “Vessel”).
If
in
connection with the terms of the Contract the Buyer shall become entitled to
a
refund of the
instalment paid to the Seller prior to the delivery of the Vessel (not exceeding
JP¥
(say
Japanese Yen only)), we hereby irrevocably guarantee the repayment of the same
to the Buyer within fifteen (15) business days after demand by the Buyer
together with interest thereon at the rate of ten per cent (10%) per annum
or,
in relation to a period of time during which a force majeure event operated,
without any interest for the duration of “permissible delays” pursuant to
Article VIII, from the date following the date of receipt by the Seller to
the
date of remittance by telegraphic transfer of such refund.
Payments
will be made by us against Xxxxx’s written demand and signed statement
certifying that Xxxxx’s demand for refund has been made in conformity with
Article X of the Contract and the Seller has failed to make the
refund.
This
Letter of Guarantee is assignable to any third party.
This
Letter of Guarantee is valid from the date of this Letter of Guarantee until
the
earlier of (i) receipt by the Buyer of the sum guaranteed hereby or (ii)
acceptance by the Buyer of the delivery of the Vessel in accordance with the
terms of the Contract.
This
Letter of guarantee shall be governed by and construed in accordance with the
laws of England and the undersigned hereby submits to the exclusive jurisdiction
of the High Court of Justice of England and Wales in relation to any dispute
or
difference arising hereunder or connected herewith.
All
demands, statements or notices in connection with this Letter of Guarantee
shall
be validly given if sent to us by telefax to our office at [country and town
of
office] as follows:
[ ]
Fax:
50
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 be equal to the amount
that
would have been received if such deduction or withholding were not
required.
This
Letter of Guarantee shall remain in full force and effect, notwithstanding
any
amendments made to the Contract by the parties thereto.
Very
truly yours
51
