AMENDED AND RESTATED
SHIPBUILDING CONTRACT
for
CONSTRUCTION OF ONE (1) 22,000 CUBIC METERS
LIQUEFIED ETHYLENE GAS CARRIER
(HULL NO. 2245)
Date: June 26, 1997
between
NAVIGATOR HOLDINGS PLC
as BUYER
and
CHINA SHIPBUILDING TRADING COMPANY, LIMITED
and
JIANGNAN SHIPYARD
Collectively as SELLER
Amended and Restated
Shipbuilding Contract H2245
AMENDED AND RESTATED
SHIPBUILDING CONTRACT
FOR
CONSTRUCTION OF ONE (1) 22,000 CUBIC METERS
LIQUEFIED ETHYLENE GAS CARRIER
(HULL NO. 2245)
This AMENDED AND RESTATED SHIPBUILDING CONTRACT (the "Contract"),
entered into this 26th day of June, 1997 by and between Navigator Holdings PLC
(formerly named Navigator Holdings, Ltd.), a company organized and existing
under the laws of the Isle of Man, having its registered office at 15-19 Athol
Street, Douglas, Isle of Man, (hereinafter called the "BUYER") on one part; and
CHINA SHIPBUILDING TRADING COMPANY, LIMITED, a corporation organized and
existing under the Laws of the People's Republic of China, having its registered
office at 10 Yue Tan Bei Xiao Jie, Beijing 100861, the People's Republic of
China (hereinafter called "CSTC"), and JIANGNAN SHIPYARD, a corporation
organized and existing under the laws of the People's Republic Of China, having
its registered office at 2 Gao Xiong Road, Shanghai 200011, the People's
Republic of China (hereinafter called the "BUILDER" and collectively with CSTC,
the "SELLER") on the other part.
The BUYER and SELLER are parties to the SHIPBUILDING CONTRACT for the
construction of one (1) 22,000 cubic meter liquified ethylene gas carrier (Hull
No. 2245), dated February 4th, 1997, and desire to amend and restate the terms
thereof in accordance with the terms and provisions of this AMENDED AND RESTATED
SHIPBUILDING CONTRACT.
This AMENDED AND RESTATED SHIPBUILDING CONTRACT is being executed and
delivered simultaneously with the execution and delivery of four separate and
individual Shipbuilding Contracts as restated and amended (the "Related
Contracts") between the SELLER and the BUYER each dated as of the date hereof
with respect to the construction of four sister vessels which will have the
BUILDER's Hull designation numbers 2246, 2247, 2248 and 2249 (collectively, the
"SISTER VESSELS").
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Shipbuilding Contract H2245
WITNESSETH
In consideration of the mutual covenants contained herein, the SELLER
agrees to build, launch, equip and complete at the BUILDER's Shipyard and to
sell and deliver to the BUYER after completion and successful trial one (1)
22,000 Cubic Meters Liquefied Ethylene Gas Carrier (hereinafter called the
"VESSEL") as more fully described in Article I hereof to be registered under the
flag of Liberia and the BUYER agrees to purchase and take delivery of the
aforesaid VESSEL from the SELLER and to pay for the same all in accordance with
the terms and subject to the conditions hereinafter set forth.
ARTICLE I
DESCRIPTION AND CLASS
1. DESCRIPTION
The BUILDER shall, at its Jiangnan Shipyard, located at 2 Gao Xiong
Road, Shanghai 200011, the People's Republic of China (hereinafter called the
"Shipyard"), construct, launch, equip, supply, and in all respects complete so
as to be ready for immediate operation (subject to the gas trials as set forth
in Article VII, Section 7), and deliver to the BUYER a 22,000 cubic meter
liquefied ethylene gas carrier with 22,800 deadweight tons of carrying VCM on
scantling draft of 10.90 meters and the class described below in Article I,
Section 2 (hereinafter called the "VESSEL"), to be designated as Hull No. 2245,
together with all machinery, materials, parts, supplies, equipment,
appurtenances, and all other items necessary to and for the said construction,
completion, delivery, and operation of the VESSEL.
The VESSEL shall be built and completed in accordance with the
following:
(1) Specifications (Drawing No. 2LG970104)
(2) General Arrangement (Drawing No. 2LG970102) (preliminary)
(3) Maker List (Drawing No. 2LG970105)
attached hereto and made a part hereof and signed by each of the parties to this
Contract (items 1 through 3 of this Article, Section 1 are collectively referred
to herein as the "Specifications").
Should there be any discrepancy between this Contract and the
Specifications, the provisions in this Contract shall prevail. When there is no
specific description in the Specifications a standard of workmanship and
practices
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equivalent to the BUILDER's shipbuilding standards as practicable, generally
applicable to the construction of similar size and types of vessels, shall be
applicable to the construction of the VESSEL.
The BUILDER, at its expense, shall, unless otherwise specifically
provided herein, procure and furnish all items and permissions necessary to
perform its obligations hereunder including, but not limited to, (i) plans and
specifications (in addition to the Specifications), labor, machinery, materials,
parts, supplies, equipment, appurtenances, and (ii) licenses, permits,
inspections, surveys and approvals.
2. CLASS AND RULES
The VESSEL, including its machinery and equipment, shall be constructed
in accordance with the rules and regulations of Germanischer Lloyd (hereinafter
called the "Classification Society") shall be distinguished in the record by the
symbol of +100 A5 E "Liquefied Gas Carrier Type 2G" +MC E, AUT INERT and shall
also comply with the rules and regulations as fully described in the
Specifications.
The requirements of the authorities as fully described in the
Specifications including that of the Classification Society are to include the
rules or circulars issued and becoming effective as at the date this Contract is
executed and delivered (the "Effective Date").
The SELLER shall arrange with the Classification Society to assign a
representative or representatives (hereinafter called the "Classification
Surveyor") to the BUILDER's Shipyard for supervision of the construction of the
VESSEL.
All fees and charges incidental to Classification and to comply with the
rules, regulations issued and becoming effective as of the Effective Date as
well as royalties, if any, payable on account of the construction of the VESSEL
shall be for the account of the SELLER. The key plans, materials and workmanship
entering into the construction of the VESSEL shall at all times be subject to
inspections and tests in accordance with the rules and regulations of the
Classification Society.
Decisions of the Classification Society as to compliance or
noncompliance with Classification rules and regulations shall be final and
binding upon the parties hereto.
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3. PRINCIPAL PARTICULARS AND DIMENSIONS OF THE VESSEL
(a) The basic dimensions of the VESSEL shall be
Length Overall: abt. 171.50m
Length between perpendiculars: 160.50m
Breadth moulded: 24.20m
Depth moulded: 16.70m
Scantling Draft moulded (VCM): 10.90m
Deadweight (VCM): 22,800mt
Draught moulded (Ammonia): 9.35m
Deadweight (Ammonia): 17,150mt
Design Draught moulded (Ethylene): 8.80m
Deadweight (Ethylene): 15,100mt
Cargo Tanks Volume: 22,000cbm
The above mentioned dimensions may be changed, if calculations of intact
stability and damage stability show necessity and/or possibility during
development of the design. But the guaranteed performance of the vessel such as
speed, fuel consumption, deadweight and cargo tank volume as stipulated in
following Clause 4, 5, 6 and 7 shall remain unchanged.
(b) Propelling Machinery:
The VESSEL shall be equipped, in accordance with the
Specifications, with one (1) set of MAN B&W 6S50MC or Sulzer 6RTA52 type Main
Engine.
(c) Gas Plant
The VESSEL shall be equipped with a complete set of gas plant
including four (4) cargo tanks of a total volume of 22,000 cubic meters
(hereinafter called the "GAS PLANT") as fully described in the Specifications.
4. GUARANTEED SPEED
The SELLER guarantees that the service speed of the VESSEL on ethylene
condition with draft of 8.80 meters as stipulated in the Specifications at 90%
MCR of main engine with 15% sea margin is to be not less than 16.5 nautical
miles per hour.
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The above guaranteed speed shall be deemed having been achieved if the
speed in sea trial condition as determined by the trial run is reached after
correction according to the Specifications. The speed in sea trial condition,
i.e. calm weather with wind not exceeding 6 knots (two degrees Beaufort scale)
and sea state maximum 2 with clean bottom and running in deep smooth water,
shall be determined as per the result of model test at ballast condition (about
20% deadweight at design draft (ethylene) of 8.8 m).
The trial speed shall be corrected for wind speed and shallow water
effect. The correction method of the speed shall be as specified in the
Specifications.
5. GUARANTEED FUEL CONSUMPTION
The SELLER guarantees that the fuel oil consumption of the Main Engine
is not to exceed 128 grams/brake horse power/hour at MCR of main engine at shop
trial based on diesel fuel oil having a lower calorific value of 10,200
kilocalories per kilogram according to the Specifications.
6. GUARANTEED DEADWEIGHT
The SELLER guarantees that the VESSEL is to have a deadweight of not
less than 22,800 metric tons at the scantling draft of carrying VCM of 10.90
meters in sea water of 1.025 specific gravity.
The term, "Deadweight", as used in this Contract, shall be as defined in
the Specifications.
The actual deadweight of the VESSEL expressed in metric tons shall be
based on calculations made by the BUILDER and checked by the BUYER, and all
measurements necessary for such calculations shall be performed in the presence
of the BUYER's supervisor(s) or the party authorized by the BUYER.
Should there be any dispute between the BUILDER and the BUYER in such
calculations and/or measurements, the decision of the Classification Society
shall be final.
7. GUARANTEED CARGO TANK CAPACITY
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The SELLER guarantees that the VESSEL is to have a total cargo tank
capacity of not less than 22,000 cubic meters geometric including the volume of
tank domes with ambient temperature as described in the Specifications.
8. SUBCONTRACTING
The SELLER may, at its sole discretion and responsibility, subcontract
any portion of the construction work of the VESSEL to experienced
subcontractors, but final assembly into the VESSEL of any such work
subcontracted shall be at the BUILDER's Shipyard. The SELLER shall remain
primarily responsible for such subcontracted work.
9. REGISTRATION
The VESSEL shall be registered by the BUYER at its own cost and expenses
under the laws of the Republic of Liberia at the time of delivery and acceptance
thereof.
ARTICLE II
CONTRACT PRICE & TERMS OF PAYMENT
1. CONTRACT PRICE
The net purchase price of the VESSEL is United States Dollars Forty Nine
Million, Nine Hundred Thirty Seven Thousand (US$49,937,000) (hereinafter called
the "Contract Price"), to be paid by the BUYER to SELLER for the construction
and completion of the VESSEL which is exclusive of the cost for the BUYER's
Supplies as provided in Article V hereof. The Contract Price shall be fixed,
with no escalation and subject to upward or downward adjustment, if any, as
expressly set forth in this Contract and in Schedule 1 attached hereto. To the
extent that the SELLER may, under applicable law, regulation or decree
(including those of the People's Republic of China), have any right(s) to
escalate or change the Contract Price, such right(s) are hereby waived. The
Contract Price includes all costs and expenses incurred by SELLER performing
engineering calculations for designing and supplying all necessary drawings for
the VESSEL, in accordance with the Specifications.
2. CURRENCY
Any and all payments by the BUYER to the SELLER under this Contract
shall be made in United States Dollars ("US$").
3. TERMS OF PAYMENT
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The Contract Price shall be paid by the BUYER to the SELLER in
installments as indicated on Schedule 1 attached hereto.
4. METHOD OF PAYMENT
(a) First Installment:
On or prior to July 21, 1997 (except as may be
provided in Schedule 1), the BUYER shall remit by telegraphic
transfer the first installment in the amount set forth on
Schedule 1 to the account of Bank of China, New York Branch,
410 Madison Avenue, New York, N.Y. 10017, U.S.A. as receiving
bank nominated by the SELLER, for credit to the account of
CSTC with Bank of China, Head Office, Banking Department,
Beijing, the People's Republic of China with SWIFT advice from
Bank of China, New York Branch to Bank of China, Head Office,
or through any other receiving bank to be nominated by the
SELLER.
(b) Each subsequent Installment:
Except as may be provided in Schedule 1, the BUYER
shall remit by telegraphic transfer each subsequent
installment on the date and in the amount set forth in
Schedule 1 to the account of Bank of China, New York Branch,
410 Madison Avenue, New York, N.Y. 10017, U.S.A. as receiving
bank nominated by the SELLER, for credit to the account of
CSTC with Bank of China, Head Office, Banking Department,
Beijing, the People's Republic of China with SWIFT advice from
Bank of China, New York Branch to Bank of China, Head Office,
or through any other receiving bank to be nominated by the
SELLER from time to time and such nomination shall be notified
to the BUYER at least 10 banking days prior to the due date
for payment ("SELLER's Bank").
Upon receipt of a facsimile or telex notice from the
SELLER not less than six (6) banking days in New York prior to
the scheduled Delivery Date, notifying the BUYER of such date,
the BUYER shall deposit the amount payable upon Delivery of
the VESSEL by telegraphic transfer to account of the SELLER's
Bank at least three (3) banking days in the People's Republic
of China prior to the scheduled Delivery of the VESSEL, with
irrevocable instructions to be confirmed by the SELLER's Bank
that the said deposit shall be payable to the
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SELLER against presentation by the SELLER of either (i) a
duplicate original copy of the Protocol of Delivery and
Acceptance of the VESSEL signed by the SELLER and the BUYER or
(ii) a Certificate of Completion (in the form of Exhibit D
hereto) signed by the SELLER, the Classification Society and
Tractebel Gas Engineering GmBH (the "Certificate of
Completion"), and that, in the event that the actual delivery
and acceptance of the VESSEL shall not take place within seven
(7) banking days following such scheduled Delivery, the said
deposit shall be returned to the BUYER's bank, together with
interest thereon. The SELLER's Bank shall hold the deposit in
an interest bearing account and the BUYER shall be entitled to
receive interest thereon.
5. PREPAYMENT
The BUYER shall have the right to make prepayment of any and all
installments before delivery of the VESSEL, by giving to the SELLER at least
thirty (30) days prior written notice, without any price adjustment of the
VESSEL for such prepayment.
6. SECURITY FOR PAYMENT OF INSTALLMENTS BEFORE DELIVERY
The BUYER shall, concurrently with the payment of the first installment
of the Contract Price, deliver to the SELLER a Trustee's Commitment Letter
executed by a bank organized under the laws of the United States or any State
thereof (the "Trustee Bank"), in the form annexed hereto as Exhibit "E" (the
"Trustee's Commitment Letter") which shall indicate the amounts held by the
Trustee Bank for the payment of the first through fifth installments of the
Contract Price. Such Trustee Bank shall be an international banking institution
acceptable to the SELLER.
7. REFUNDS
(a) All payments made by the BUYER hereunder in United States Dollars
and prior to Delivery and BUYER's acceptance of the VESSEL shall be in the
nature of installments to the SELLER. In the event that, the VESSEL is rejected
by the BUYER, or this Contract is canceled or terminated by the BUYER, all in
accordance with the terms of this Contract, or if the SELLER should default in
Delivery of the VESSEL or is guilty of breach of this Contract justifying a
rescission thereof by the BUYER then, and in any such event, the SELLER shall
refund to the BUYER an amount equal to the sum of the following:
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(i) the amounts set forth on Schedules 2 and 3 hereto
calculated as of the first day of the calendar month in which
the Date of Rejection occurs,
(ii) an amount equal to the product of (x) the
difference between (1) the amount set forth on Schedule 2
hereto calculated as of the first day of the calendar month
immediately succeeding the month in which the Date of
Rejection occurs and (2) the amount set forth on Schedule 2
hereto as of the first day of the month in which the Date of
Rejection occurs and (y) a fraction the numerator of which is
the numeric day of the month of the Date of Rejection and the
denominator of which is 30, and
(iii) an amount equal to the product of (x) the
difference between (1) the amount set forth on Schedule 3
hereto calculated as of the first day of the calendar month
immediately succeeding the month in which the Date of
Rejection occurs and (2) the amount set forth on Schedule 3
hereto as of the first day of the month in which the Date of
Rejection occurs and (y) a fraction the numerator of which is
the numeric day of the month of the Date of Rejection and the
denominator of which is 30.
If the amount as calculated above is not paid on the Date of Rejection there
shall be added to such amount interest at the rate of ten percent (10%) per
annum from and including the Date of Rejection to but not including the date
such amount is paid. Such refunds by the SELLER to the BUYER shall forthwith
discharge all obligations, duties, and liabilities of each of the parties hereto
to the other under this Contract. Any and all refunds made to the BUYER under
this Article II, Section 7 shall be made in United States Dollars. Throughout
this Contract, whenever interest is due on any amounts to be paid or refunded by
either party, said interest shall be calculated as simple interest, based on the
actual number of days divided by 360.
For purposes of this Section 7(a) Date of Rejection means the date on
which written notice of rejection, cancellation or rescission is delivered by
BUYER to SELLER.
All refunds made by the SELLER to the BUYER under this contract shall be
paid in United States Dollars by telegraphic transfer to the BUYER's account or
its assignee's account as set forth in a written notice to the SELLER from such
party.
(b) Upon the payment of the first installment and the delivery of the
Trustee's Commitment Letter in the form of Exhibit E hereto, the SELLER shall,
at its cost, furnish the BUYER with (i) an Irrevocable Letter of Guarantee given
by a bank acceptable to the
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BUYER (hereinafter referred to as "Guarantor"), substantially in the form of
Exhibit A attached hereto as to the amounts set forth in Schedule 2 hereto,
together with an acknowledgement of assignment to the Trustee Bank by the
Guarantor and (ii) Irrevocable Performance Bonds given by The Export Import Bank
of China and Generale de Banque (hereinafter collectively referred to as
"Performance Guarantor"), substantially in the form of Exhibit B and Exhibit C,
respectively, attached hereto which in the aggregate are equal to the aggregate
amount set forth in Schedule 3 hereto and each Schedule 3 attached to the
Related Contracts as to the Sister Vessels, together with an acknowledgement of
assignment to the Trustee Bank by each Performance Guarantor. The Irrevocable
Letters of Guarantee and the Irrevocable Performance Bonds shall guarantee
payment to the BUYER of an amount in United States Dollars, at such place as the
BUYER or its assignee may designate, which is sufficient to cover all sums
payable or repayable by the SELLER to the BUYER under this Contract with
interest thereon as provided in Article II, Section 7(a) above, upon receipt by
said Guarantor and each Performance Guarantor, respectively, from the BUYER of a
written claim that it is entitled to such payment or repayment and that the
SELLER has failed to make same.
ARTICLE III
ADJUSTMENT OF THE CONTRACT PRICE
The Contract Price of the VESSEL as provided for in Schedule 1 shall be
subject to adjustments as hereinafter set forth. It is hereby understood by both
parties that any reduction of the Contract Price is by way of liquidated damages
and not by way of penalty.
1. DELIVERY
(a) Delayed Delivery Price Adjustment:
(i) For purposes of this Contract the Original
Delivery Date for the Vessel shall mean the date set forth in
Article VII, Section (1) below.
(ii) If the Delivery is not made on the Original
Delivery Date (subject to a Permissible Delay as defined
below), the SELLER shall pay the BUYER, as liquidated damages
(not as penalty), the amount of $10,000 for each calendar day
for the first ninety (90) calendar days of delay beyond the
Extended Delivery Date (as hereinafter defined) and the amount
of $13,500 for each calendar day of delay thereafter up to and
including the 210th day from the Original Delivery Date
("Original Delay
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Period"). Liquidated damages calculated with respect to the
Original Delay Period shall be recovered by the BUYER through
a reduction in the Fifth Installment payable by the BUYER to
the SELLER in an amount equal to such Liquidated Damages.
(iii) If delivery of the VESSEL is delayed for any
reason beyond the Original Delay Period, the Builder may elect
to further postpone delivery of the Vessel beyond the Original
Delay Period until March 31, 2001 provided SELLER pays
liquidated damages monthly in advance to the BUYER at the rate
of US$18,000 per day from the end of the Original Delay Period
to a date which is 6 months thereafter (the "First Penalty
Date"), and US$20,000 per day from the First Penalty Date to
the date which is 6 months thereafter (the "Second Penalty
Date"), and US$22,000 per day from the Second Penalty Date
until March 31, 2001. If the SELLER fails to make any
liquidated damages payment, BUYER, in its sole discretion, may
either (i) reject the VESSEL or (ii) waive its right to
receive the payment of liquidated damages and further reduce
the Contract Price for the VESSEL by an amount equal to the
liquidated damages which would have been payable.
Notwithstanding any other provision contained in this Contract
to the contrary, this Contract shall be deemed rescinded on
April 1, 2001 and the Buyer shall be entitled to receive the
amounts set forth in Article II, Section 7(a) above.
Any waiver by the BUYER of its right to receive
liquidated damages monthly in advance is not a waiver of the
BUYER's right to (a) demand payment of such liquidated damages
at a later date, (b) demand monthly advances as to Liquidated
Damages for any subsequent months of delay or (c) reject the
VESSEL at such later date if liquidated damages are not paid
upon demand. The liquidated damages calculated pursuant to
this paragraph are in addition to the reduction in the fifth
installment of the Contract Price as calculated pursuant to
(ii) above for the Original Delay Period.
(iv) In the event that the BUYER elects to reject the
VESSEL as allowed under this Article III, Section 1(a), the
SELLER shall immediately repay to the BUYER the amounts set
forth in Article II, Section 7, whereupon this Contract shall
terminate and such payment shall forthwith discharge all
obligations, duties and liabilities of each party hereto to
the other under this Contract.
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(v) For the purpose of this Article, the delivery of
the VESSEL shall not be deemed delayed and the Contract Price
shall not be reduced when and if the Original Delivery Date of
the VESSEL is extended by reason of a Permissible Delay. For
purposes of this Article a Permissible Delay means a delay
caused by reason of causes and provisions of (1) Section 2 of
Article V (but only as to days of extension beyond 12 days),
(2) Article VIII, and (3) any delay caused by any action or
inaction on the part of SELLER; provided such Permissible
Delay shall be subject to the following provisions:
(A) The maximum Permissible Delay for the
Vessel and each Sister Vessel shall be as follows:
(i) Hull No. 2245 - 60 days
(ii) Hull No. 2246 - 45 days
(iii) Hull No. 2247 - 30 days
(iv) Hull No. 2248 - 30 days
(v) Hull No. 2249 - 30 days
(B) For purposes of this Contract the
Extended Delivery Date for a Vessel shall mean the
Original Delivery Date plus the Permissible Delay for
such Vessel,
(C) The aggregated Permissible Delay for the
Vessel and the Sister Vessels shall not exceed 150
days, and
(D) Subject to the limitations set forth in
(A) above, SELLER shall have the right in its sole
discretion to designate either the Vessel or any
Sister Vessel as to which Vessel will be subject to a
Permissible Delay.
(b) Early Delivery Price Adjustment:
If the SELLER notifies the BUYER by facsimile that the
delivery of the VESSEL shall be made earlier than the Original
Delivery Date and such notification is given not less than two
(2) months prior to the newly planned delivery date, a certain
amount of bonus shall be given by the BUYER to the SELLER as
follows:
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In the event that the delivery shall be made earlier
than the Original Delivery Date and notice is properly given,
then a bonus shall be added to the Contract Price at a rate of
United States Dollars Thirteen Thousand (US$13,000) per day
for each full day earlier than the Original Delivery Date.
The total increase of the Contract Price for the
earlier delivery shall be added to the fifth installment of
the Contract Price.
2. INSUFFICIENT SPEED
(a) The Contract Price of the VESSEL shall not be affected nor changed
by reason of the actual speed (as determined by the Trial Run after correction
according to the Specifications) being equal to or less than three-tenths (3/10)
of one knot below the guaranteed speed as specified in Section 4 of Article I of
this Contract.
(b) However, commencing with a deficiency of three-tenths (3/10) of one
knot in actual speed (as determined by the Trial Run after correction according
to the Specifications) below the guaranteed speed as specified in Section 4,
Article I of this Contract, the Contract Price shall be reduced as follows:
IN CASE OF DEFICIENCY: LIQUIDATED DAMAGE
above 0.3 but below or at 0.40 knot US$100,000
above 0.40 but below or at 0.50 knot US$200,000
above 0.50 but below or at 0.60 knot US$600,000
above 0.60 but below or at 0.70 knot US$1,000,000
above 0.70 but below or at 0.80 knot US$1,400,000
above 0.80 but below or at 0.90 knot US$1,800,000
above 0.90 but below or at 0.99 knot US$2,200,000
(c) If the deficiency in actual speed (as determined by the Trial Run
after correction according to the Specifications ) of the VESSEL upon the Trial
Run, is one (1) knot or more below the guaranteed speed of sixteen and half
(16.5) knots, then the BUYER may at its option reject the VESSEL, rescind this
Contract in accordance with provisions of Article X of this Contract and receive
the amounts payable by SELLER to BUYER as provided in Article II, Section 7(a)
above.
(d) No payment shall be made for any increase in the speed of the
VESSEL.
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3. EXCESSIVE FUEL CONSUMPTION
(a) The Contract Price of the VESSEL shall not be affected nor changed
if the actual fuel consumption of the Main Engine, as determined by shop trial
in manufacturer's works, as per the Specifications, is greater than the
guaranteed fuel consumption as specified and required under the provisions of
this Contract and the Specifications if such actual excess is equal to or less
than three percent (3%).
(b) However, if the actual fuel consumption as determined by shop trial
is greater than three percent (3%) above the guaranteed fuel consumption then,
the Contract Price shall be reduced by the sum of United States Dollars
Seventy-Five Thousand (US$75,000 ) for each full one percent (1%) increase in
fuel consumption in excess of the above said three percent (3%) (fractions of
one percent to be prorated).
(c) If as determined by shop trial such actual fuel consumption of the
Main Engine is eight percent (8%) or more in excess of the guaranteed fuel
consumption set forth in the Specifications the BUYER may, at its option, reject
the VESSEL, rescind this Contract, in accordance with the provisions of Article
X of this Contract and receive the amounts payable by SELLER to BUYER as
provided in Article II, Section 7(a) above.
(d) No payment shall be made for any improvements in fuel consumption
less than that specified and required under the provisions of this Contract and
the Specifications.
4. INSUFFICIENT DEADWEIGHT
(a) In the event that there is a deficiency in the actual deadweight of
the VESSEL determined as provided in the Specifications, the Contract Price
shall not be decreased if such deficiency is Four Hundred (400) metric tons or
less below the guaranteed deadweight of 22,800 metric tons at draft moulded.
(b) However, the Contract Price shall be decreased by the sum of United
States Dollars One Thousand (US$1,000) for each full metric ton of such
deficiency being more than Four Hundred (400) metric tons.
(c) In the event that there should be a deficiency in the VESSEL's
actual deadweight which exceeds Eight Hundred (800) metric tons below the
guaranteed deadweight, the BUYER may, at its option, reject the VESSEL, rescind
this Contract
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in accordance with the provisions of Article X of this Contract and receive the
amounts payable by SELLER to BUYER as provided in Article II, Section 7(a)
above.
5. INSUFFICIENT CARGO TANK CAPACITY
(
a) In the event there is a deficiency in the actual capacity of the cargo tanks
determined as provided in the Specifications, the Contract Price shall not be
decreased if such deficiency is One Hundred (100) cubic meters or less below the
guaranteed cargo tank capacity.
(b) However, the Contract Price shall be decreased by the sum of United
States Dollars Three Thousand Five Hundred (US$3,500) for each full cubic meter
of such deficiency being more than One Hundred (100) cubic meters but equal to
or less than Four Hundred (400) cubic meters.
(c) In the event that there should be a deficiency in the VESSEL's
actual cargo tank capacity which exceeds Four Hundred (400) cubic meters below
the guaranteed cargo tank capacity the BUYER may, at its option, reject the
VESSEL, rescind this Contract in accordance with the provisions of Article X and
receive the amounts payable by SELLER to BUYER as provided in Article II,
Section 7(a) above.
(d) No payment shall be made if the actual capacity of the cargo tanks
determined as provided in the Specifications exceeds the cargo tank capacity set
forth in the Specifications.
6. EFFECT OF RESCISSION
It is hereby expressly understood and agreed by the parties hereto that
in any case as stated herein, if the BUYER rescinds this Contract pursuant to
any provision under this Article, the BUYER, saving its rights and remedy set
out in Article X hereof, shall not be entitled to any liquidated damage set
forth in this Article, other than liquidated damages payable pursuant to Article
III Section 1(a)(iii) above.
7. SCHEDULE OF PAYMENTS DUE TO PRICE ADJUSTMENTS
All adjustments in the Contract Price, if any, pursuant to this Article
III shall be applied against the Fifth Installment of the Contract Price payable
to SELLER on Delivery as defined in Article VII, Section 1.
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ARTICLE IV
SUPERVISION AND INSPECTION
1. APPOINTMENT OF THE BUYER'S SUPERVISOR
The BUYER shall in good time send to and maintain at the BUILDER's
Shipyard, at the BUYER's own cost and expense, one or more representative(s) who
shall be duly accredited in writing by the BUYER (such representative(s) being
hereinafter collectively and individually called the "Supervisor") to supervise
and survey the construction by the BUILDER of the VESSEL, her engines and
accessories. The SELLER hereby warrants that, the necessary visa for the
Supervisor to enter China will be issued in order on demand and without delay
provided that the Supervisor meets with the rules, regulations and laws of the
People's Republic of China. The BUYER undertakes to give the SELLER adequate
notice for the application of visa.
2. APPROVAL OF PLANS AND DRAWINGS
The parties hereto shall, within a reasonable period of time after
signing of this Contract, mutually agree upon a list of all the plans and
drawings, which are to be sent to the BUYER for approval (hereinbelow called
"the LIST"). Before the arrival of the Supervisor at the BUILDER's Shipyard, the
plans and drawings specified in the LIST shall be sent to the BUYER, and the
BUYER shall, within fourteen (14) days after receipt thereof (excluding mailing
time), return such plans and drawings submitted by the SELLER with approval or
remarks, if any.
Concurrently with the arrival of the Supervisor at the BUILDER's
Shipyard, the BUYER shall notify the BUILDER, in writing, of the authority the
Supervisor shall have with regard to the approval or modification of plans and
drawings (that is, which of the drawing and plans specified in the LIST but not
yet sent to the BUYER can be submitted to and approved by the Supervisor).
Nevertheless in line with the Supervisor's authority, the Supervisor shall,
within five (5) days after receipt thereof, return those submitted plans and
drawings with approval or remarks, if any.
Unless notification is given to the BUILDER by the Supervisor or the
BUYER of approval or disapproval of any plans and drawings within the above
designated period of time for each case, the said plans and drawings shall be
deemed to have been automatically approved.
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The plans and drawings approved by the BUYER or Supervisor shall be
final, and any alteration thereof shall be regarded as modification specified in
Article V of this Contract.
3. SUPERVISION AND INSPECTION BY THE SUPERVISOR
The necessary inspection of the VESSEL, its machinery, equipment and
outfittings shall be carried out by the Classification Society, and/or
inspection team of the BUILDER throughout the entire period of construction in
order to ensure that the construction of the VESSEL is duly performed in
accordance with the Contract and Specifications.
The Supervisor shall have, at all times until delivery of the VESSEL,
the right to attend tests according to the mutually agreed test list and inspect
the VESSEL, her engines, accessories and materials at the BUILDER's Shipyard,
its subcontractors or any other place where work is done or materials stored in
connection with the VESSEL. In the event that the Supervisor discovers any
construction or material or workmanship which does not or will not conform to
the requirements of this Contract and the Specifications, the Supervisor shall
promptly give the BUILDER a notice in writing as to such nonconformity, upon
receipt of which the BUILDER shall correct such nonconformity if the BUILDER
agrees with the BUYER. However the BUYER undertakes and assures the SELLER that
the Supervisor shall carry out his inspections in accordance with the agreed
inspection procedure and Schedule and usual shipbuilding practice and in a way
as to minimize any increase in building costs and delays in the construction of
the VESSEL.
The BUILDER agrees to furnish, free of charge, the Supervisor with
office space, and other reasonable facilities according to BUILDER's practice
at, or in the immediate vicinity of the BUILDER's Shipyard, but the fees for the
international communication like telephone and telefax, etc. shall be borne by
the BUYER. At all times, during the construction of the VESSEL until delivery
thereof, the Supervisor shall be given free and ready access to the VESSEL, her
engines and accessories, and to any other place where the work is being done, or
the materials are being processed or stored, in connection with the construction
of the VESSEL, including the yards, workshops, stores of the BUILDER, and the
premises of subcontractors of the BUILDER, who are doing work, or storing
materials in connection with the VESSEL's construction. The travel expenses for
the said access to SELLER's subcontractors outside of Shanghai shall be at
BUYER's account. The transportation within Shanghai shall be provided to the
Supervisor by the SELLER.
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4. LIABILITY OF THE SELLER
The Supervisor engaged by the BUYER under this Contract shall at all
times be deemed to be in the employment of the BUYER. The SELLER shall be under
no liability whatsoever to the BUYER, or to the Supervisor or the BUYER's
employees or agents for personal injuries, including death, during the time when
they, or any of them, are on the VESSEL, or within the premises of either the
SELLER 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, or of any of the SELLER's
employees or agents or subcontractors of the SELLER. Nor shall the SELLER be
under any liability whatsoever to the BUYER for damage to, or loss or
destruction of property in China of the BUYER or of the Supervisor, or of the
BUYER's employees or agents, unless such damage, loss or destruction was caused
by negligence of the SELLER, or of any of the employees, or agents or
subcontractors of the SELLER.
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5. SALARIES AND EXPENSES
All salaries and expenses of the Supervisor, or any other employees
employed by the BUYER under this Article, shall be for the BUYER's account.
6. REPLACEMENT OF SUPERVISOR
The SELLER has the right to request the BUYER in writing to replace any
of the Supervisor who is deemed unsuitable and unsatisfactory for the proper
progress of the VESSEL's construction together with reasons. The BUYER shall
investigate the situation by sending its representative to the BUILDER's yard,
if necessary, and if the BUYER considers that such SELLER's request is
justified, the BUYER shall effect the replacement as soon as conveniently
arrangable.
ARTICLE V
MODIFICATION, CHANGES AND EXTRAS
1. HOW EFFECTED
The Specifications in accordance with which the VESSEL is constructed,
may be modified and/or changed at any time hereafter by written agreement of the
parties hereto, provided that such modifications and/or changes or an
accumulation thereof will not, in the BUILDER's reasonable judgment, adversely
affect the BUILDER's other commitments and provided further that the BUYER shall
assent to adjustment of the Contract Price, time of delivery of the VESSEL and
other terms of this Contract, if any, as hereinafter provided. Subject to the
above, the SELLER hereby agree to exert their best efforts to accommodate such
reasonable requests by the BUYER so that the said changes and/or modifications
may be made at a reasonable cost and within the shortest period of time which is
reasonable and possible. Any such agreement for modifications and/or changes
shall include an agreement as to the increase or decrease, if any, in the
Contract Price of the VESSEL together with an agreement as to any extension or
reduction in the time of delivery, providing to the SELLER additional securities
satisfactory to the SELLER, or any other alterations in this Contract, or the
Specifications occasioned by such modifications and/or changes. The
aforementioned agreement to modify and/or to change the Specifications may be
effected by an exchange of duly authenticated letters, telex and telefaxes,
manifesting such agreement. The letters, telexes as well as telefaxes exchanged
by the parties hereto pursuant to the foregoing shall constitute an amendment of
the Specifications under which the VESSEL shall be built, and such letters,
telexes and telefaxes shall be deemed to be incorporated into this Contract and
the Specifications by reference and
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made a part hereof. Upon consummation of the agreement to modify and/or to
change the Specifications, the SELLER shall alter the construction of the VESSEL
in accordance therewith, including any additions to, or deductions from, the
work to be performed in connection with such construction. If due to whatever
reasons, the parties hereto shall fail to agree on the adjustment of the
Contract Price or extension of time of delivery or providing additional security
to the SELLER or modification of any terms of this Contract which are
necessitated by such modifications and/or changes, then the SELLER shall have no
obligation to comply with the BUYER's request for any modification and/or
changes.
2. CHANGES IN RULES AND REGULATIONS
(a) If, after the Effective Date, any requirements as to the rules and
regulations as specified in this Contract and the Specifications to which the
construction of the VESSEL is required to conform, are altered or changed by the
Classification Society or the other regulatory bodies authorized to make such
alterations or changes, the SELLER and/or the BUYER, upon receipt of the notice
thereof, shall transmit such information in full to each other in writing,
whereupon within twenty one (21) days after receipt of the said notice by the
BUYER from the SELLER or vice versa, the BUYER shall instruct the SELLER in
writing as to the alterations or changes, if any, to be made in the VESSEL which
the BUYER, in its sole discretion, shall decide. The SELLER shall promptly
comply with such alterations or changes, if any in the construction of the
VESSEL, provided that the BUYER shall first agree:
(i) As to any increase or decrease in the guaranteed
deadweight and/or cargo tank capacity and for speed of the VESSEL, if
such compliance results in increased or reduced deadweight and/or cargo
tank capacity and speed; and/or
(ii) As to any other alterations in the terms of this Contract
or of Specifications or both, if such compliance makes such alterations
of the terms necessary.
Agreement as to such alterations or changes under this Paragraph shall
be made in the same manner as provided above for modifications and/or changes of
the Specifications and/or Plans.
(b) If, due to whatever reasons, the parties shall fail to agree
on the increase or decrease of the guaranteed speed, deadweight and cargo tank
capacity,
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or any alteration of the terms of this Contract, if any, then the SELLER shall
be entitled to proceed with the construction of the VESSEL in accordance with,
and the BUYER shall continue to be bound by, the terms of this Contract and
Specifications without making any such alterations or changes.
(c) The BUYER and the SELLER hereby agree to make best efforts to avoid
the application and/or minimize the effect of any change in the rules and
regulations of the Classification Society as to the Specifications. If the BUYER
and the SELLER are unsuccessful in avoiding the application of such change in
rules and regulations, then the SELLER shall effect any modifications and/or
changes in Specifications without adjustment to the Contract Price and the BUYER
shall grant to the SELLER the right to extend the Delivery Date (if necessary)
for a maximum period of up to twelve (12) days.
3. SUBSTITUTION OF MATERIALS AND/OR EQUIPMENT
In the event that any of the materials and/or equipment required by the
Specifications or otherwise under this Contract for the construction of the
VESSEL cannot be procured in time to effect delivery of the VESSEL, the SELLER
may, provided the SELLER shall provide adequate evidence and the BUYER so agrees
in writing, supply other materials and/or equipment of the equivalent quality,
capable of meeting the requirements of the Classification Society and of the
rules, regulations, requirements and recommendations with which the construction
of the VESSEL must comply.
4. BUYER'S SUPPLIED ITEMS
The BUYER shall deliver to the SELLER at its shipyard the items as
specified in the Specifications which the BUYER shall supply for its own account
(the "BUYER's Supplies") by the time designated by the SELLER.
The delay in the delivery or the failure to deliver by the BUYER of any
BUYER's Supplies within the time specified shall not extend the Delivery Date.
However, if the delay in delivery of the BUYER's Supplies should exceed
fifteen (15) days, the SELLER shall be entitled to proceed with construction of
the VESSEL without installation of such items in or onto the VESSEL and the
BUYER shall accept the VESSEL so completed.
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The BUILDER shall be responsible for storing and handling of the BUYER's
Supplies as specified in the Specifications after delivery to the BUILDER and
shall install them on board the VESSEL at the BUILDER's expenses.
Upon arrival of such shipment of the BUYER's Supplies, both parties
shall undertake an joint unpacking inspection. If any damaged BUYER's supplies
are found to be unsuitable for installation, the BUILDER shall be entitled to
refuse to accept the BUYER's Supplies.
ARTICLE VI
TRIALS
1. NOTICE
The BUYER and the Supervisor shall receive from the SELLER at least
thirty (30) days notice in advance and seven (7) days definite notice in advance
in writing by telex or telefax, of the time and place of the VESSEL's sea trial
as described in the Specifications (hereinafter referred to as "the Trial Run")
and the BUYER and the Supervisor shall promptly acknowledge receipt of such
notice. The BUYER's representatives and/or the Supervisor shall be on board the
VESSEL to witness such Trial Run, and to check upon the performance of the
VESSEL during the same. Failure of the BUYER's representatives to be present at
the Trial Run of the VESSEL, after due notice to the BUYER and the Supervisor as
provided above, shall have the effect to extend the date for delivery of the
VESSEL by the period of delay caused by such failure to be present. However, if
the Trial Run is delayed more than five (5) days by reason of the failure of the
BUYER's representatives to be present after receipt of due notice as provided
above (other than due to the failure by the BUYER's representative to obtain a
visa to enter China), then in such event, the BUYER shall be deemed to have
waived its right to have its representatives on board the VESSEL during the
Trial Run, and the BUILDER may conduct such Trial Run without the BUYER's
representatives being present, and in such case the BUYER shall be obliged to
accept the VESSEL on the basis of a certificate jointly signed by the BUILDER
and the Classification Society certifying that the VESSEL, after Trial Run
subject to minor alterations and corrections as provided in this Article, if
any, is found to conform to the Contract and Specifications and is satisfactory
in all respects. The SELLER hereby warrants that the necessary visa for the
BUYER's representatives to enter China will be issued in order on demand and
without delay otherwise the Trial Run shall be postponed until the BUYER's
representatives have arrived at the BUILDER's Shipyard. However, should the
nationalities and other personal particulars of the BUYER's representatives be
not acceptable to the SELLER in accordance with its best understanding of the
relevant
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rules, regulations and/or Laws of the People's Republic of China then
prevailing, then the SELLER shall so notify the BUYER and the BUYER shall
endeavor to effect the replacement of all or any of such representatives. The
Delivery Date as stipulated in Article VII hereof shall not be extended by any
delays caused by the BUYER's replacement of its representatives pursuant to the
SELLER's request. In the event of unfavorable weather on the date scheduled for
the Trial Run, the same shall take place on the first available day thereafter
that the weather conditions permit. The parties hereto recognize that the
weather conditions in Chinese waters in which the Trial Run is to take place are
such that great changes in weather may arise momentarily and without warning
and, therefore, it is agreed that if during the Trial Run of the VESSEL, the
weather should suddenly become unfavorable, as would have precluded the
continuance of the Trial Run, the Trial Run of the VESSEL shall be discontinued
and postponed until the first favorable day next following, unless the BUYER
assents in writing by telex or telefax of its acceptance of the VESSEL on the
basis of the Trial Run made prior to such sudden change in weather conditions.
In the event that the Trial Run is postponed because of unfavorable weather
conditions, the Delivery Date shall not be extended other than pursuant to
Article VIII hereof.
2. HOW CONDUCTED
(a) All expenses in connection with Trial Run of the VESSEL are to be
for the account of the BUILDER, who, during the Trial Run and when subjecting
the VESSEL to Trial Run, is to provide, at its own expense, the necessary crew
to comply with conditions of safe navigation. The Trial Run shall be conducted
in the manner prescribed in the Specifications and shall prove fulfillment of
the performance required for the Trial Run as set forth in the Specifications.
The course of Trial Run shall be determined by the BUILDER and shall be
conducted within the trial waters equipped with speed measuring facilities.
(b) The BUILDER shall provide the VESSEL with the required quantities of
water and fuel oil with exception of lubrication oil, hydraulic oil and greases
which shall be supplied by the BUYER according to the BUILDER's schedule which
shall be forwarded to the BUYER by the BUILDER for the conduct of the Trial Run
or Trial Runs as prescribed in the Specifications. The fuel oil supplied by the
SELLER, and lubricating oil, hydraulic oil and greases supplied by the BUYER
shall be in accordance with the applicable engine Specifications, and the cost
of the quantities of water, fuel oil, lubricating oil, hydraulic oil and greases
consumed during the Trial Run or Trial Runs shall be for the account of the
BUILDER.
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3. TRIAL LOAD DRAFT
In addition to the supplies provided by the BUYER in accordance with
sub-paragraph (b) of the preceding Section 2 of this Article VI, the BUILDER
shall provide the VESSEL with the required quantity of fresh water and other
stores necessary for the conduct of the Trial Run. The necessary ballast (fresh
water, sea water or any other ballast as may be required) to bring the VESSEL to
the trial load draft as specified in the Specifications, shall be for the
BUILDER's account.
4. METHOD OF ACCEPTANCE OR REJECTION
(a) Upon notification of the BUILDER of the completion of the Trial Run
of the VESSEL attached with the trial result, the BUYER or the BUYER's
Supervisor shall within six (6) business days thereafter, notify the BUILDER in
writing by telex or telefax of its acceptance of the VESSEL or of its rejection
of the VESSEL together with the reasons therefor.
(b) However, should the result of the Trial Run indicate that the VESSEL
or any part thereof including its equipment does not conform to the requirements
of this Contract and Specifications the BUILDER shall investigate with the
Supervisor the cause of failure and shall take proper steps to remedy the same
and shall make whatever corrections and alterations and/or re-Trial Run or Trial
Runs as may be necessary without extra cost to the BUYER, and upon notification
by the BUILDER of completion of such alterations or corrections and/or re-trial
or re-trials, the BUYER shall, within six (6) business days thereafter, notify
the SELLER in writing by telex or telefax of its acceptance of the VESSEL or of
its rejection of the VESSEL together with the reason therefor on the basis of
the alterations and corrections and/or re-Trial Run or re-Trial Runs by the
BUILDER.
(c) In the event that the BUYER fails to notify the SELLER in writing by
telex or telefax of its acceptance or rejection of the VESSEL together with the
reason therefor within six (6) business days period as provided for in the above
sub-paragraphs (a) and (b), the BUYER shall be deemed to have accepted the
VESSEL.
(d) Any dispute arising among the parties hereto as to the result of any
Trial Run or further tests or trials, as the case, may be, of the VESSEL shall
be referred to the Classification Society as provided in Article XIII Section 2
hereof.
(e) Nothing herein shall preclude the BUYER from accepting the VESSEL
with its qualifications and/or remarks following the Trial Run and/or further
tests or trials as
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aforesaid and the SELLER shall be obliged to comply with and/or remove such
qualifications and/or remarks (if such qualifications and/or remarks are
acceptable to the SELLER) at the time before effecting delivery of the VESSEL to
the BUYER under this Contract.
5. DISPOSITION OF SURPLUS CONSUMABLE STORES
Should any amount of fuel oil, fresh water, or other unbroached
consumable stores furnished by the BUILDER for the Trial Run or Trial Runs
remain on board the VESSEL at the time of acceptance thereof by the BUYER, the
BUYER agrees to buy the same from the SELLER at the purchasing price at the port
of delivery thereof, and payment by the BUYER shall be effected, together with
the payment of the fifth installment, as provided in Article II, Section 4 of
this Contract.
The BUYER shall supply lubricating oil, hydraulic oil and greases for
the purpose of Trial Runs at its own expenses and the SELLER will reimburse for
the amount of lubricating oil, hydraulic oil and greases actually consumed for
the said Trial Run or Trial Runs at the purchasing price incurred by the BUYER
and payment by the SELLER shall be effected by deducting from the fifth
installment the amount of such payment as provided in Article II, Section 4 of
this Contract.
6. EFFECT OF ACCEPTANCE
The BUYER's acceptance of the VESSEL in writing by telex or telefax
notification sent to the SELLER, in accordance with the provisions set out
above, shall be final and binding so far as conformity of the VESSEL to this
Contract and the Specifications is concerned, and shall preclude the BUYER from
refusing Delivery (as defined below) by the SELLER of the VESSEL, as hereinafter
provided, if the SELLER complies with all other procedural requirements for
delivery as hereinafter set forth.
ARTICLE VII
DELIVERY
1. TIME AND PLACE
The VESSEL shall be delivered safely afloat by the SELLER to the BUYER
(the "Delivery") at the BUILDER's Shipyard, in accordance with this Contract and
the Specifications and with all Classification and statutory certificates (as
required by Section 3 below) on or before August 1, 1999, as may be extended
pursuant to Schedule 1 (the "Original Delivery Date").
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2. WHEN AND HOW EFFECTED
Provided that the BUYER and the SELLER shall each have fulfilled all of
their respective obligations as stipulated in this Contract, Delivery of the
VESSEL shall be effected forthwith by the concurrent delivery by each of the
parties hereto, one to the other, of either (i) the Protocol of Delivery and
Acceptance, acknowledging delivery of the VESSEL by the SELLER and acceptance
thereof by the BUYER, which Protocol of Delivery and Acceptance shall be
prepared in triplicate and executed by each of the parties hereto or (ii) a
Certificate of Completion executed by the Seller, Tractebel Gas Engineering GmbH
and the Classification Society, which Certificate of Completion shall be
prepared in multiple copies (5) and executed by the parties thereto.
It is mutually understood and agreed that the Gas Plant of the VESSEL
(the "GAS PLANT") shall be mechanically completed by the SELLER and that a
running test for the equipment of the Gas Plant and a function test of its
system shall be made by the SELLER prior to Delivery of the VESSEL as per clause
7 (a) of this Article whilst the full gas trial shall be made after Delivery of
the VESSEL as more fully described in Section 7 of this Article.
3. DOCUMENTS TO BE DELIVERED TO THE BUYER
Upon acceptance of the VESSEL by the BUYER, the SELLER shall deliver to
the BUYER the following documents which shall accompany the aforementioned
Protocol of Delivery and Acceptance or Certificate of Completion:
(a) PROTOCOL OF TRIALS of the VESSEL made by the BUILDER 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, made by the BUILDER.
(c) PROTOCOL OF STORES OF CONSUMABLE NATURE made by the BUILDER
referred to under Section 5 of Article VI hereof.
(d) FINISHED DRAWINGS AND PLANS pertaining to the VESSEL as
stipulated in the Specifications, made by the BUILDER.
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(e) PROTOCOL OF DEADWEIGHT AND INCLINING EXPERIMENT, made by
the BUILDER.
(f) ALL CERTIFICATES required to be furnished upon delivery of the
VESSEL pursuant to the Specifications. It is agreed that if
formal certificates are not available at the time of delivery
of the VESSEL, provisional certificates issued by
Classification Society or other relevant authorities shall be
accepted by the BUYER, provided that the SELLER shall furnish
the BUYER with the formal certificates as promptly as possible
after such formal certificates have been issued.
(g) DECLARATION OF WARRANTY issued by the SELLER that the VESSEL
is delivered to the BUYER free and clear of any liens,
charges, claims, mortgages, rights in rem or other
encumbrances of any nature upon the VESSEL and the BUYER's
title thereto, and in particular, that the VESSEL is
absolutely free of all burdens in the nature of imposts,
taxes or charges imposed by the province or country of the
port of delivery, as well as of all liabilities of the
SELLER to its sub-contractors, employees and crews and/or
all liabilities arising from the operation of the VESSEL in
Trial Run or Trial Runs, or otherwise, prior to Delivery.
(h) COMMERCIAL INVOICE made by the SELLER.
(i) BILL OF SALE made by the SELLER.
(j) BUILDER's CERTIFICATE.
4. TITLE AND RISK
Title to and risk of the VESSEL shall pass to the BUYER only upon
Delivery thereof to and acceptance thereof by the BUYER as stated above, it
being expressly understood that, until such Delivery is effected, title to the
VESSEL, and her equipment, shall remain at all times with the SELLER and are at
the entire risk of the SELLER.
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
BUILDER within seven (7) days after Delivery and acceptance thereof is effected.
If the BUYER shall not remove the VESSEL from the premises of the BUILDER within
the aforesaid
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seven (7) days, then, in such event, without prejudice to the SELLER's right to
require the BUYER to remove the VESSEL immediately at any time thereafter, the
BUYER shall pay to the SELLER the reasonable mooring charge of the VESSEL.
6. TENDER OF THE VESSEL
If the BUYER fails to take Delivery of the VESSEL after completion
thereof according to this Contract and the Specifications without justified
reason, the SELLER shall have the right to tender the VESSEL for Delivery after
compliance with all procedural requirements as above provided.
7. GAS TRIAL
(a) Prior to delivery of the VESSEL a running test of the equipment of
the Gas Plant and a function test of its system shall be carried out utilizing
either inert gas or dry air. These tests shall be repeated until its results are
deemed by the Classification Society and any other relevant authority to be in
conformity with this Contract and the Specifications, and the VESSEL shall not
be deemed ready for Delivery by the SELLER to the BUYER pursuant to the terms of
the Contract unless until the results of the aforesaid tests shall have been
certified by the Classification Society.
(b) After Delivery of the VESSEL at the Shipyard quay, the BUYER shall
arrange at its own cost and expense to proceed the VESSEL to either Jin Shan
Terminal, Shanghai or to the first load port, in the BUYER's option, in order to
carry out the gas trial in accordance with the trial program furnished by the
BUILDER's gas plant supplier (the "Supplier") under the supervision of the
Supplier. The Supplier shall give qualified guidance, instruction and
consultations with regard to the gas trial, all of which shall be arranged by
the SELLER under the terms of its contract with the Supplier. The SELLER shall
at its own expense dispatch its representative(s) to attend such gas trial as
witness. The BUYER shall give the SELLER twenty (20) days advance notice in
connection with the time and place for such trial. The gas trial shall be made
latest forty-five (45) days after delivery of the VESSEL (unless the trial must
be postponed until a later date not to exceed 90 days after Delivery for reasons
beyond the BUYER's control) and shall be witnessed and certified by the
Classification Society.
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(c) The SELLER shall pay all costs and charges of its own
representative(s) and of the Classification Society and shall arrange at their
expense for the Supplier to send at least one representative to the gas trial.
(d) The BUYER shall at its own cost and expense provide suitable product
in sufficient and satisfactory quantity and quality as well as utilities and
consumables for operation.
(e) Should the Gas Plant not be in conformity with this Contract and the
Specifications, the SELLER shall remedy any such non-conformity to the
satisfaction of the BUYER, the Classification Society and any other relevant
authority. After the remedial works are completed the SELLER shall arrange to
re-run the gas trial to the extent which will be necessary to demonstrate that
the rectified part of the Gas Plant is then in conformity with this contract and
the Specifications and the proper functioning of the Gas Plant as a whole is
secured.
(f) All direct costs and expenses of remedying the non-conformity and
re-running the gas trial (including provision of suitable product, utilities and
consumables) shall be for the account of the SELLER.
(g) If delays are incurred relating to the use of the VESSEL, caused by
an unsuccessful gas trial, remedial works and retrials for which the SELLER is
responsible, with the consequence that the classification certificate has not
been issued, will exceed more than twenty (20) days as from the commencement of
the Gas Trials, the SELLER shall, notwithstanding the provisions contained in
Article IX Section 2 and Section 4, pay to the BUYER as liquidated damages
United States Dollars Ten Thousand (US$10,000) for each day of such excess delay
up to a maximum amount of United States Dollars Two Hundred Thousand
(US$200,000).
ARTICLE VIII
DELAYS AND EXTENSION OF TIME FOR DELIVERY
1. CAUSE OF DELAY
If, at any time before actual Delivery, either the construction of the
VESSEL, or any performance required hereunder as a prerequisite of delivery of
the VESSEL, is delayed due to war, blockade, revolution, insurrection,
mobilization, civil commotions, riots, strikes, sabotage, lockouts, local
temperature higher than 35 degree centigrade, Acts of God or the public enemy,
plague or other epidemics, quarantines, prolonged failure or restriction of
electric current from an outside source, freight embargoes, if
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any, earthquakes, tidal waves, typhoons, hurricanes, storms or other causes
beyond the control of the BUILDER or of its sub-contractors, as the case may be,
or by force majeure of any description, whether of the nature indicated by the
forgoing or not, or by destruction of the BUILDER or works of the BUILDER or its
sub-contractors, or of the VESSEL or any part thereof, by fire, flood, or other
causes beyond the control of the SELLER or its sub-contractors as the case may
be, then, in the event of delay due to the happening of any of the
aforementioned contingencies, the SELLER shall not be liable for such delay and
the time for delivery of the VESSEL under this Contract shall be extended
without any reduction in the Contract Price subject nevertheless to (i) the
provisions of Section 1(a) of Article III as to reduction in Contract Price,
(ii) the BUYER's right of termination under Section 1(a) of Article III and
(iii) all relevant provisions of this Contract which authorize and permit
extension of the time of delivery of the VESSEL.
2. NOTICE OF DELAY
Within fourteen (14) days from the date of commencement of any delay on
account of which the SELLER claims that it is entitled under this Contract to an
extension of the time for delivery of the VESSEL, the SELLER shall advise the
BUYER in writing by telex or telefax of the date such delay commenced, and
reasons therefor.
Likewise within fourteen (14) days after such delay ends, the SELLER
shall advise the BUYER in writing by telex or telefax of the date such delay
ended, and also shall specify the maximum period of the time by which the date
for delivery of the VESSEL is extended by reason of such delay. Failure of the
BUYER to acknowledge the SELLER's notification of any claim for extension of the
Delivery Date within fourteen (14 ) days after receipt by the BUYER of such
notification, shall be deemed to be a waiver by the BUYER of its right to object
to such extension.
ARTICLE IX
WARRANTY OF QUALITY
1. GUARANTEE OF MATERIAL AND WORKMANSHIP
The SELLER, for a period of twelve (12) months following delivery to the
BUYER of the VESSEL, guarantees the VESSEL, her hull and machinery and all parts
and equipment thereof that are manufactured or furnished or supplied by the
SELLER and/or its sub-contractors under this Contract including material,
equipment (however excluding any parts for the VESSEL which have been supplied
by or on behalf of the BUYER) against all defects which are due to defective
materials, and/or poor workmanship or failure to construct in conformity with
the Specifications.
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2. NOTICE OF DEFECTS
The BUYER shall notify the SELLER in writing by telex or telefax, as
promptly as possible, after discovery of any defect or deviations for which a
claim is made under this guarantee. The BUYER's written notice shall describe
the nature of the defect and the extent of the damage caused thereby. The SELLER
shall have no obligation under this guarantee for any defects discovered prior
to the expiry date of the guarantee, unless notice of such defects is received
by the SELLER not later than thirty (30) days after such expiry date. Telexed or
telefaxed advice with brief details explaining the nature of such defect and
extent of damage within thirty (30) days after such expiry date and that a claim
is forthcoming will be sufficient to comply with the requirements as to time.
3. REMEDY OF DEFECTS
The SELLER shall remedy at its expense any defect, against which the
VESSEL or any part of the equipment thereof is guaranteed under this Article by
making all necessary repairs and/or replacement. Such repairs and/or replacement
will be made by the SELLER.
However, if it is impractical to make the repair by the SELLER, and if
forwarding by the SELLER of replacement part, and materials cannot be
accomplished without impairing or delaying the operation of the VESSEL, then, in
any such event, the BUYER shall cause the necessary repairs or replacements to
be made elsewhere at the discretion of the BUYER provided that the BUYER shall,
as soon as possible, give the SELLER notice in writing by telex or telefax of
the time and place such repairs will be made, provided always that the burden of
proof as to the necessity for such repairs and replacements shall rest with the
BUYER, and a written confirmation for such repairs or replacement shall be
obtained from the SELLER. Defects that affect the safety of the VESSEL or her
crew and/or constitute an emergency shall be repaired either by the crew or a
BUYER selected contractor in a manner reasonable under the circumstances without
the SELLER's prior approval and the SELLER shall be notified as to the nature
and extent of repairs as soon as possible after the repairs are undertaken and
such repair work will be subject to the mutual agreement between the parties. If
the VESSEL is not thereby delayed or her operation is not thereby delayed or
impaired, the SELLER shall have the right to verify the nature and extent of the
defects complained of by its own representative(s) or that of Classification
Society. The SELLER shall, in such cases, promptly advise the BUYER, by telex or
telefax, after such examination has been completed, of its acceptance or
rejection of the defects as ones justifying the
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remedy under this Article. In all minor cases, the Guarantee Engineer, as
hereinafter provided for, will act for and on behalf of the SELLER.
In any circumstances, the SELLER shall immediately pay to the BUYER in
United States Dollars by telegraphic transfer the actual cost for such repairs
or replacements including forwarding charges, or at the average cost for making
similar repairs or replacements including forwarding charges as quoted by a
leading shipyard each in China, Singapore, Korea and Spain, whichever is lower:
(a) upon the SELLER's acceptance of the defects as justifying
remedy under this Article, or
(b) If the SELLER neither accepts nor rejects the defects as
above provided, nor requests arbitration within thirty (30) days after
its receipt of the BUYER's notice of defects.
Any dispute shall be referred to arbitration in accordance with the
provisions of Article XIII hereof.
4. EXTENT OF THE SELLER'S LIABILITY
The SELLER shall have no obligation and/or liabilities with respect to
defects discovered after the expiration of the period of guarantee specified
above.
The SELLER shall be liable to the BUYER for defects and damages caused
by any of the defects specified in Section 1 of this Article provided that such
liability of the SELLER shall be limited to damage occasioned within the
guarantee period specified in Paragraph 1 above. The SELLER shall not be
obligated to repair, or to be liable for, damages to the VESSEL, or to any part
of the equipment thereof, due to ordinary wear and tear or caused by defects
other than those specified in Paragraph 1 above, nor shall there be any SELLER's
liability hereunder for defects in the VESSEL, or any part of the equipment
thereof, caused by fire or accidents at sea or elsewhere, or mismanagement,
accidents, negligence, or willful neglect, on the part of the BUYER, its
employees or agents including the VESSEL's officers, crew and passengers, or any
persons on or doing work on the VESSEL other than the SELLER, its employees,
agents or sub-contractors. Likewise, the SELLER shall not be liable for defects
in the VESSEL, or the equipment or any part thereof, due to repairs or
replacement which were made by those other than the SELLER and/or their
sub-contractors, employees or agents.
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Upon delivery of the VESSEL to the BUYER, in accordance with the terms
of the Contract, the SELLER shall thereby and thereupon be released of all
responsibility and liability whatsoever and howsoever arising under or by virtue
of this Contract (save in respect of those obligations to the BUYER expressly
provided for in this Article IX) including without limitation, any
responsibility or liability for defective workmanship, materials or equipment,
design or in respect of any other defects whatsoever and any loss or damage
resulting from any act, omission or default of the SELLER. Neither CSTC nor the
BUILDER shall, in any circumstances, be liable for any consequential loss or
special loss, or expenses arising from any cause whatsoever including, without
limitation, loss of time, loss of profit or earnings or demurrage directly from
any commitments of the BUYER in connection with the VESSEL other than pursuant
to the express terms of this Contract.
The Guarantee provided in this Article and the obligations and the
liabilities of the SELLER hereunder are exclusive and in lieu of and the BUYER
hereby waives all other remedies, warranties,guarantees or liabilities, express
or implied, arising by Law or otherwise (including without limitation any
obligations of the SELLER with respect to fitness, merchantability and
consequential damages) or whether or not occasioned by the SELLER's negligence.
This guarantee shall not be extended, altered or varied except by a written
instrument signed by the duly authorized representatives of the SELLER, and the
BUYER.
5. GUARANTEE ENGINEER
The BUILDER shall appoint one guarantee engineer (the "Guarantee
Engineer") to serve the VESSEL as the BUILDER's representative for a period of
six (6) months from the delivery of the VESSEL. The BUYER and its employees
shall give such Guarantee Engineer full co-operation in carrying out his duties
as the representative of the BUILDER on board the VESSEL. The BUYER shall accord
the Guarantee Engineer(s) the treatment comparable to the VESSEL's Chief
Engineer, and shall provide him/them with accommodation and subsistence at no
cost to the BUILDER and/or the Guarantee Engineer.
The BUYER shall pay to the Guarantee Engineer the sum of United States
Dollars Three Thousand Five Hundred only (US$3,500 ) per month/per person to
cover his wages and miscellaneous expenses. The BUYER shall also pay the expense
of his repatriation to Shanghai, the People's Republic of China by air upon
termination of his service, the expense of his communications with the BUILDER
when made in performance of his duties as the Guarantee Engineer and the
expenses, if any, of his medical and hospital care. The BUYER, its successor(s)
and/or assignee(s), shall be
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liable to and indemnify the BUILDER and/or the Guarantee Engineer for personal
injuries, including death and damages to, or loss or destruction of property of
the Guarantee Engineer, if such death, injuries, damages, loss and/or
destruction were caused by gross negligence or willful misconduct of the BUYER,
its successor(s) and/or assignee(s) or its employees and/or agents.
Pertaining to the detailed particulars of this Paragraph, an agreement
will be made to this effect between the parties hereto upon delivery of the
VESSEL.
ARTICLE X
CANCELLATION BY THE BUYER
All payments made by the BUYER prior to the delivery of the VESSEL shall
be in the nature of advances to the SELLER. In the event the BUYER shall
exercise its right of rejection, cancellation and/or rescission of this Contract
under and pursuant to any of the provisions of this Contract specifically
permitting the BUYER to do so, then the BUYER shall notify the SELLER in writing
by telex or telefax, and such rejection, cancellation and/or rescission shall be
effective as of the date the notice thereof is delivered by the BUYER. BUYER
shall be entitled to receive from SELLER the amounts provided for in Article II,
Section 7(a) above.
In addition to Buyer's Right of Rejection, cancellation and/or
rescission set forth in the preceding paragraph, Buyer shall cancel this
Contract and Receive from the Seller the amounts provided for in Article II,
Section 7(a) above, if any of the Related Contracts have been cancelled,
rescinded or terminated pursuant to the Terms of such Related Contracts.
ARTICLE XI
BUYER'S DEFAULT
1. DEFINITION OF DEFAULT
The BUYER shall be deemed in default of its obligation under this
Contract if any of the following events occurs:
(a) The BUYER fails to pay any one of the first, second, third
and fourth installments to the SELLER when any such installment becomes
due and payable under the provisions of Article II hereof; or
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(b) The BUYER fails to pay the fifth installment to the SELLER
in accordance with Article II hereof, provided the BUYER shall have
received the SELLER's notification in accordance with Article II hereof;
or
(c) The BUYER fails to take delivery of the VESSEL, when the
VESSEL is duly tendered for delivery by the SELLER under and pursuant to
the provisions of this Contract.
2. NOTICE OF DEFAULT
If the BUYER is in default of payment or in performance of its
obligations as provided hereinabove, the SELLER shall notify the BUYER to that
effect by telex or telefax after the date of occurrence of the default as per
Section 1 of this Article and the BUYER shall forthwith acknowledge by telex to
the SELLER that such notification has been received. In case the BUYER does not
give the aforesaid telex or telefax acknowledgment to the SELLER within five (5)
banking days it shall be deemed that such notification has been duly received by
the BUYER.
3. INTEREST AND CHARGE
(a) If the BUYER is in default of payment as to any installment as
provided in Paragraph 1 (a) and/or 1 (b) of this Article, the BUYER shall pay
interest on such installment at the rate of ten (10%) per annum until the date
of the payment of the full amount, including all aforesaid interest. In case the
BUYER shall fail to take delivery of the VESSEL when required to as provided in
Section 1 (c) of this Article, the BUYER shall be deemed in default of payment
of the fifth installment and shall pay interest thereon at the same rate as
aforesaid from and including the day on which the VESSEL is tendered for
delivery by the SELLER, as provided in Article VII Section 6 hereof.
(b) In any event of default by the BUYER under Section 1 (a), (b) or (c)
above, the BUYER shall also pay all costs, charges and expenses incurred by the
SELLER in consequence of such default.
4. DEFAULT BEFORE DELIVERY OF THE VESSEL
(a) If any default by the BUYER occurs as defined in Section 1 (a), (b)
or (c) of this Article, the Delivery Date shall, at the SELLER's option, be
postponed for a period of continuance of such default by the BUYER.
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(b) If any such default as defined in Section 1 (a), (b) or (c) of this
Article committed by the BUYER continues for a period of fifteen (15) banking
days, then, the SELLER shall have all following rights and remedies:
(i) The SELLER may, at its option, cancel or rescind this
Contract, provided the SELLER has notified the BUYER of such default
pursuant to Section 2 of this Article, by giving notice of such effect
to the BUYER in writing by telex or telefax. Upon receipt by the BUYER
of such telex or telefax notice of cancellation or rescission, all of
the BUYER's Supplies shall forthwith become the sole property of the
SELLER, and the VESSEL and all its equipment and machinery shall be at
the sole disposal of the SELLER for sale or otherwise; and
(ii) In the event of such cancellation or rescission of this
Contract, the SELLER shall be entitled to retain any installment or
installments of the Contract Price paid by the BUYER to the SELLER on
account of this Contract; and
(iii) With respect to any default defined in Section 1(a) of
this Article, without prejudice to the SELLER's right to recover from
the BUYER the Fifth installment, interest, costs and/or expenses by
applying the proceeds to be obtained from the sale of the VESSEL in
accordance with the provisions set out in this Contract, the SELLER
shall have the right to declare all unpaid second, third and fourth
installments to be forthwith due and payable.
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5. SALE OF THE VESSEL
(a) In the event of cancellation or rescission of this Contract as above
provided, the SELLER shall have full right and power either to complete or not
to complete the VESSEL as it deems fit and to sell the VESSEL at the best price
available at a public or private sale advertised internationally. Such sale may
include an invitation to the BUYER to participate, but will be otherwise on such
terms and conditions as the SELLER may determine.
In the case of sale of the VESSEL, the SELLER shall give telex or
telefax or written notice to the BUYER.
(b) In the event of the 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 and otherwise incurred by the SELLER as a
result of the BUYER's default, and then to payment of all unpaid installments
and/or unpaid balance of the Contract Price and interest on such installment at
the same interest rate as specified in Section 3 of this Article from the
respective due dates thereof to the date of application.
(c) In the event of the sale of the VESSEL in its incomplete state, the
proceeds of sale received by the SELLER shall be applied firstly to all expenses
attending such sale and otherwise incurred by the SELLER as a result of the
BUYER's default, and then to payment of all costs of construction of the VESSEL
(such costs of construction, as herein mentioned, shall include but are not
limited to all costs of labor and/or prices paid or to be paid by the SELLER for
the equipment and/or technical design and/or materials purchased or to be
purchased, installed and/or to be installed on the VESSEL) and/or any fees,
charges, expenses and/or royalties incurred and/or to be incurred for the VESSEL
less the installments so retained by the SELLER, and compensation to the SELLER
for a reasonable sum of loss of profit due to the cancellation or rescission of
this Contract.
(d) In either of the above events of sale, if the proceeds of sale
exceeds the total of the amounts to which such proceeds are to be applied as
aforesaid, the SELLER shall promptly pay the excess to the BUYER, provided,
however that the amount of such payment to the BUYER shall in no event exceed
the total amount of installments already paid by the BUYER and the cost of the
BUYER's supplies, if any, without interest.
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(e) If the proceeds of the sale are insufficient to pay such total
amounts payable as aforesaid, the BUYER shall promptly pay the deficiency to the
SELLER upon request.
ARTICLE XII
INSURANCE
1. EXTENT OF INSURANCE COVERAGE
From the time of keel-laying of the first section or block of the VESSEL
until the same is completed, delivered to and accepted by the BUYER, the SELLER
shall, at its own cost and expense, keep the VESSEL and all machinery,
materials, equipment, appurtenances and outfit, delivered to the BUILDER for the
VESSEL or built into, or installed in or upon the VESSEL, including the BUYER's
Supplies, fully insured with first class Chinese insurance companies for
BUILDER's risk.
The amount of such insurance coverage shall, up to the date of delivery
of the VESSEL, be in an amount at least equal to, but not limited to, the
aggregate of the payments made by the BUYER to the SELLER including the value of
the BUYER's Supplies. The policy referred to hereinabove shall be taken out in
the name of the SELLER and all losses under such policy shall be payable to the
SELLER.
2. APPLICATION OF RECOVERED AMOUNT
(a) Partial Loss:
In the event the VESSEL shall be damaged by any insured cause
whatsoever prior to acceptance and delivery 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 apply the amount
recovered under the insurance policy referred to in Section 1 of this
Article to the repair of such damage satisfactory to the Classification
Society and other institutions or authorities as described in the
Specifications without additional expenses to the BUYER.
(b) Total Loss:
However, in the event that the VESSEL is determined to be an
actual or constructive total loss, the SELLER shall either:
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(i) By the mutual agreement between the parties
hereto, proceed in accordance with terms of this Contract, in
which case the amount recovered under said insurance policy
shall be applied to the reconstruction and/or repair of the
VESSEL's damages and/or reinstallation of BUYER's supplies
without additional expenses to the BUYER, provided the parties
hereto shall have first agreed in writing as to such
reasonable extension of the Delivery Date and adjustment of
other terms of this Contract including the Contract Price as
may be necessary for the completion of such reconstruction; or
(ii) If due to whatever reasons the parties fail to
agree on the above, then the BUYER shall deliver a written
notice of rejection to SELLER and the SELLER shall refund
immediately to the BUYER the amount described in Article II,
Section 7, whereupon this Contract shall be deemed to be
canceled and all rights, duties, liabilities and obligations
of each of the parties to the other shall terminate forthwith.
(iii) Notwithstanding the provisions of (i) and (ii)
above, Seller may elect to postpone delivery of the Vessel
subject to the provisions of Article III, Section (1)(a).
Within thirty (30) days after receiving telex or telefax
notice of any damage to the VESSEL constituting an actual or a
constructive total loss, the BUYER shall notify the SELLER in writing or
by telex of its agreement or disagreement under this sub-paragraph. In
the event the BUYER fails to so notify the SELLER, then such failure
shall be construed as a disagreement on the part of the BUYER. This
Contract shall be deemed as rescinded and canceled and the BUYER shall
receive the refund as hereinabove provided and the provisions hereof
shall apply.
3. TERMINATION OF THE SELLER'S OBLIGATION TO INSURE
The SELLER's obligation to insure the VESSEL hereunder shall cease and
terminate forthwith upon Delivery thereof to and acceptance by the BUYER.
ARTICLE XIII
DISPUTES AND ARBITRATION
1. PROCEEDINGS
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Should any dispute of any nature arise in respect of this Contract, its
performance or interpretation which is not decided in accordance with Article
XIII, Section 2 below, such dispute shall be settled by arbitration in London,
England in accordance with the rules of the London Maritime Arbitrators
Association Inc. and otherwise in accordance with the provisions of the Laws of
England. The party who desires arbitration of any such dispute shall give
written notice to the other party. The notice shall state the name and address
of the arbitrator whom it appoints and describe the specific nature of the
particular dispute. Such notice shall be sent by registered air mail and shall
be addressed in the manner set forth in Article XIX, and the other party shall,
within thirty (30) days following the receipt of said notice, give written
notice to the party requesting the arbitration as to the name and address of the
arbitrator whom it appoints, which notice shall be sent by registered air mail
and shall be addressed in the manner set forth in Article XIX, provided that if
the other party should fail to so appoint its arbitrator, the arbitrator
appointed by the party desiring the arbitration may proceed with the arbitration
hearing and issue an award. Otherwise the two arbitrators so chosen shall select
a third arbitrator. The applicable law of England on all matters at issue shall
apply. A judgement based upon the decision of the majority of the arbitrators or
the sole arbitrator, as the case may be, may be entered in the appropriate court
of any country having jurisdiction of either party. The arbitrators shall also
decide which party, or the extent to which each party, shall pay costs of
arbitration. Unless and to the extent otherwise determined by the arbitrator(s),
reference to arbitration shall not relieve the BUILDER of its obligation
diligently to proceed with the construction, completion and delivery of the
VESSEL, but the majority of the arbitrators or the sole arbitrator, as the case
may be, shall decide the extent to which the Delivery Date shall be extended by
virtue of the dispute having been referred to arbitration.
2. ALTERNATIVE ARBITRATION BY AGREEMENT
Notwithstanding the preceding provisions of this Article, it is
recognized that in the event of any dispute or difference of opinion arising in
regard to the construction of the VESSEL, her machinery and equipment, or
concerning the quality of materials or workmanship thereof or thereon, such
dispute may be referred to the Classification Society upon mutual agreement of
the parties hereto. In such case, the opinion of the Classification Society
shall be final and binding on the parties hereto.
3. NOTICE OF AWARD
Notice of any award shall immediately be given in writing or by telex
confirmed in writing to the SELLER and the BUYER.
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ARTICLE XIV
RIGHT OF ASSIGNMENT
Neither of the parties hereto shall assign this Contract to any other
individual, firm, company or corporation unless prior consent of the other party
is given in writing; provided, however, the BUYER may assign this Contract to
one of its affiliates and the BUYER and its assignee may assign this Contract to
the Trustee Bank providing the Trustee's Commitment Letter described in Article
II, Section 6. In the event of an assignment of the BUYER's rights and
obligations hereunder with respect to the VESSEL said assignee or the substitute
party shall have all the rights and assume all the obligations of the BUYER
hereunder with respect to said VESSEL and the responsibility of the BUYER
hereunder, with respect to such VESSEL, shall terminate. The BUYER shall deliver
to the SELLER an agreement which will guarantee performance by any assignee of
this Contract. The BUYER shall deliver to the SELLER a Notice of Assignment and
Acknowledgement as to any assignment of this Contract to the Trustee Bank.
ARTICLE XV
TAXES AND DUTIES
1. TAXES
The SELLER shall be responsible for and pay, without recourse to the
BUYER, any and all taxes, assessments, duties or other similar levies or
charges, imposed by the Chinese authorities, whether national, municipal or
local, with respect to the period up to and including Delivery (even though
assessed, determined or imposed thereafter), on or in respect of (i) this
Contract or any act or transaction hereunder, (ii) the VESSEL or any part
thereof, or (iii) any imports of material or equipment, and including without
limitation, any tax imposed with respect to the sale or Delivery to the BUYER or
the VESSEL's export from China. Should the BUYER, at any time before or after
Delivery, be assessed or required to pay any such taxes, assessments, duties or
other similar levies or charges imposed by the Chinese authorities, the SELLER
shall reimburse the BUYER therefor.
2. DUTIES
The SELLER shall indemnify the BUYER for, and hold it harmless against,
any duties imposed in the People's Republic of China upon materials and
equipment which under the terms of this Contract and/or the Specifications will,
or may be, supplied by the BUYER from the abroad for installation in the VESSEL
as well as any duties
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imposed in the People's Republic of China upon running stores, provisions and
supplies furnished by the BUYER from abroad to be stocked on board the VESSEL
and also from the payment of export duties, if any, to be imposed upon the
VESSEL as a whole or upon any of its parts or equipment.
Any tax or duty other than those described hereinabove, if any, shall be
borne by the BUYER.
ARTICLE XVI
GOVERNMENTAL PERMITS, LICENSES, LAWS, AND PATENTS
GOVERNMENTAL APPROVALS AND LICENSES
(a) To the extent there is a change in the laws now in effect in the
People's Republic of China, the SELLER shall obtain necessary Chinese Government
approvals and licenses, if any, required for the SELLER's performance under this
Contract. The SELLER shall assist the BUYER in obtaining any licenses, permits,
or other authorizations, or waivers, necessary for the BUYER to enter and/or
reside in China to perform his functions as set forth herein or attend the Trial
Runs.
(b) The SELLER shall proceed as soon as possible to obtain from the
Chinese Government the aforementioned licenses and permits (if any) for the
VESSEL to be constructed, delivered and be exported from China, as provided
herein and shall notify the BUYER as to the issuance thereof by facsimile or
cable, subsequently confirmed in writing accompanied by copies of the said
licenses and permits. In the event that the said licenses and permits for the
VESSEL shall not have been granted by the Chinese authorities within thirty (30)
days following the attempted Delivery, unless otherwise mutually agreed to by
the SELLER and the BUYER, the SELLER shall be required to refund within twenty
(20) days thereafter, to the BUYER the amounts set forth in Article II, Section
7 and upon payment of such amounts by Seller this Contract shall thereupon
automatically become null and void and each of the parties hereto shall be
forthwith and completely discharged from all of its obligations to the other or
the SELLER elects to postpone the DELIVERY of the VESSEL in accordance with the
provisions of Article III, Section 1(a). Notwithstanding the provisions of this
paragraph (b), Delivery of the Vessel is not made on or before April 1, 2001,
SELLER shall refund to the Buyer the amounts set forth in Article II Section
7(a) and April 1 shall be deemed the Date of Rejection.
(c) In case the VESSEL, during construction or prior to Delivery, should
be requisitioned or seized by the Chinese Government, the SELLER shall forthwith
pay to
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the BUYER the amounts set forth in Article II, Section 7 hereof, and the payment
of such refund by the Seller shall forthwith release both parties from all
obligations under this Contract; provided, Seller may elect to postpone the
delivery of the Vessel in accordance with the provisions of Article III, Section
1(a).
ARTICLE XVII
LAWS AND PERMITS
The SELLER shall exercise due diligence to ensure that the SELLER, its
employees and representatives, shall at all times comply with all applicable
laws, ordinances, statutes, rules, and regulations, including those relating to
wages, hours and working conditions and insurance, adopted by any governmental
authority within the People's Republic of China. The SELLER, at its expense,
shall procure all priorities, permits, licenses, inspections, approvals and
certificates required in connection with the construction and completion of the
VESSEL and Delivery in its Jiangnan Shipyard. If required to permit performance
of the work, the SELLER shall furnish any bond, security or deposits so required
for its employees and representatives.
ARTICLE XVIII
PATENTS, TRADEMARKS AND COPYRIGHTS
The machinery and equipment of the VESSEL may bear the patent number,
trademarks or trade names of the manufacturers. The SELLER shall defend and save
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
also including cost and expense of litigation, if any.
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.
Notwithstanding any provisions contained herein to the contrary, the SELLER's
obligation under this Article should not be terminated by the passage of any
specified period of time.
The SELLER indemnity hereunder does not extend to equipment or parts
supplied by the BUYER to the BUILDER if any.
ARTICLE XIX
NOTICE
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Any and all notices and communications in connection with this Contract
shall be addressed as follows:
To the BUYER: Navigator Holdings PLC
c/o Cambridge Partners LLC
535 Madison Avenue
19th Floor
New York, New York 10022
Telephone: 01-212-508-6500
Telefax No.: 01-212-508-6501
To CSTC: China Shipbuilding Trading Company, Limited
10 Yue Tan Bei Xiao Jie
Beijing 100861
the People's Republic of China
Telex No.: 22029 CSSC CN
Telefax No.: 86-10-68583380 or 68582420
To the BUILDER: Jiangnan Shipyard
2, Gao Xiong Road
Shanghai 200011
the People's Republic of China
Telex No.: 33027 JINAS CN
Telefax No.: 86-21-63770297 or 63140128
Any notices and communications sent by CSTC and the BUILDER alone to the
BUYER shall be deemed as having being sent by both CSTC and the BUILDER.
Any change of address shall be communicated in writing by registered
mail by the party making such change to the other party and in the event of
failure to give such notice of change communications addressed to the party at
their last known address shall be deemed sufficient.
Any and all notices, requests, demands, instructions, advice and
communications in connection with this Contract shall be deemed to be given at,
and shall become effective from, the time when the same is delivered to the
address of the party to be served, provided, however, that registered airmail
shall be deemed to be delivered ten (10) days after the date of dispatch,
express courier service shall be deemed to be
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delivered five (5) days after the date of dispatch, and telex or telefax
acknowledged by the answerbacks shall be deemed to be delivered upon dispatch.
Any and all notices, communications, Specifications and drawings in
connection with this Contract shall be written in the English language and each
party hereto shall have no obligation to translate them into any other language.
ARTICLE XX
EFFECTIVE DATE OF CONTRACT
This Contract shall become effective upon the execution and delivery of
this Contract and the Specifications.
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ARTICLE XXI
INTERPRETATION; MISCELLANEOUS
1. LAW APPLICABLE
The parties hereto agree that the validity, enforcement and
interpretation of this Contract and of each Article and part hereof be governed
by 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 in the
Specifications permit an interpretation inconsistent with any provision of this
Contract, then in each and every such event the applicable provisions of this
Contract shall govern. The Specifications and plans are also intended to explain
each other, and anything shown on the plans and not stipulated in the
Specifications or stipulated in the Specifications and not shown on the plans,
shall be deemed and considered as if embodied in both. In the event of conflict
between the Specifications and plans, the Specifications shall govern.
However, with regard to such inconsistency or contradiction between this
Contract and the Specifications as may later occur by any change or changes in
the Specifications agreed upon by and among the parties hereto after execution
of this Contract, then such change or changes shall govern.
3. DEFINITION
In absence of stipulation of "banking day(s)" or "business day(s)", the
"day" or "days" shall be taken as "calendar day" or "calendar days".
4. 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 subject matter of this Contract after signing
of the Contract.
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5. REGISTRATION OF VESSEL
The BUYER intends to register the VESSEL under Liberian flag but may
elect an alternate registry within a reasonable time prior to Delivery (subject
to mutual agreement on necessary modifications as provided for in Article V,
Section 1.
6. LANGUAGE
This Contract and the Plan and Specifications have been prepared in the
English language, which shall control. The Contract has been signed in
triplicate, one counterpart being retained by the BUILDER, one by CSTC and one
by the BUYER. The Plan and Specifications have been signed in duplicate, one
counterpart being retained by the BUILDER and one by the BUYER.
7. AMENDMENTS
No representative of either party shall have authority to make, and
neither party shall be bound by, nor liable for, any statement, representation,
promise or agreement not set forth herein. No changes, amendments or
modifications shall be valid unless reduced to writing and signed by the
parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
duly executed on the day and year first above written.
NAVIGATOR HOLDINGS PLC
By: /s/ Richard Kaplow
--------------------------
Name: Richard Kaplow
Title: President
CHINA SHIPBUILDING TRADING
COMPANY, LIMITED
By: /s/ Shen Yiping
--------------------------
Name: Shen Yiping
Title: Vice President
JIANGNAN SHIPYARD
By: /s/ Gong Jingen
--------------------------
Name: Gong Jingen
Title: Vice President
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Schedule 1
Contract Price Installment Schedule
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Schedule 2
Refund Amount Schedule
(Letter of Guarantee)
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Schedule 3
Refund Amount Schedule
(Performance Bond)
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EXHIBIT "A":
IRREVOCABLE LETTER OF REFUNDMENT GUARANTEE
[STATIONERY OF GUARANTOR BANK]
[Date]
Navigator Holdings PLC
c/o Cambridge Petroleum Transport Corporation
535 Madison Avenue
19th Floor
New York, New York 10022
Dear Sirs:
At the request of China Shipbuilding Trading Company, Limited ("CSTC") and
Jiangnan Shipyard (the "Builder" and, together with CSTC, the "SELLER") and in
consideration of Navigator Holdings PLC (the "BUYER") agreeing to pay SELLER the
installments of the contract price (the "Contract Price") pursuant to the
Amended and Restated Shipbuilding Contract dated the 26th day of June, 1997, as
amended, supplemented or otherwise modified from time to time (hereinafter
called the "Contract") made by and between the BUYER and the SELLER for the
construction of one (1) 22,000 cubic meter liquefied ethylene gas carrier having
Hull No. 2245 (hereinafter called the "VESSEL"), The Export Import Bank of China
the "Bank") the undersigned, do guarantee the payment (and not merely the
collectability of the same) to the BUYER by the SELLER immediately upon demand
of an amount up to but not exceeding a total amount as set forth in Schedule 1
hereto (calculated in accordance with the immediately following paragraph),
together with simple interest thereon calculated at the rate of ten percent
(10.0%) per annum on the basis of a 360 day year from and including the date of
receipt of demand to but not including the date of remittance by telegraphic
transfer of such refund.
Subject to BUYER making installment payments in accordance with Article II of
the Contract, the amount of this Guarantee will be automatically increased
during the term of this Guarantee and shall be equal to the sum of: (i) the
amount set forth on Schedule 1 hereto calculated as of the first day of the
calendar month in which the Date
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Shipbuilding Contract H2245
of Rejection occurs; and (ii) an amount equal to the product of (X) the
difference between (1) the amount set forth on Schedule 1 hereto calculated as
of the first day of the calendar month immediately succeeding the month in which
the Date of Rejection occurs and (2) the amount set forth on Schedule 1 hereto
as of the first day of the month in which the Date of Rejection of the vessel
under the Contract occurs and (y) a fraction the numerator of which is numeric
day of the month of the date on which the Refund Amount (as hereinafter defined)
is actually paid and the denominator of which is 30 (collectively, the "Refund
Amount").
BUYER's right to demand payment under this Guarantee shall become effective on
the earlier to occur of (i) April 1, 2001, (ii) the date on which the SELLER
fails to pay any liquidated damages payable to BUYER as provided in Section 1(a)
of Article III of the Contract, (iii) upon the cancellation, termination or
rescission of the Contract by the BUYER in accordance with the terms of Contract
as set forth in Article III, 1(a), 2(c), 3(c), 4(c), 5(c), Article X, Article
XII 2(b), or Article XVI (b) or (c), or (iv) the insolvency or bankruptcy of
BUILDER.
Payment shall be made to the BUYER in United States Dollars in accordance with
the payment instruction given to us by the BUYER.
Payment under this Guarantee is available at the counters of ______________ Bank
against presentation of the BUYER's signed statement issued in the form attached
hereto as Appendix A ("Notice of Demand"). If the Notice of Demand is received
by the Bank by 12:00 noon local time on a banking day, the Bank shall pay the
Refund Amount (plus interest thereon) in immediately available funds within ten
(10) banking days. If the Notice of Demand is received by the Bank after 12:00
noon local time on a banking day, the Bank shall pay the Refund Amount (plus
interest thereon) in immediately available funds within eleven (11) banking
days.
This Guarantee is available for one payment only, whether for the full amount
hereof or any part thereof, as may be demanded by the BUYER. In the event that
the BUYER's demand is for a lesser amount than the amount of this Guarantee, the
interest payable will be calculated on the amount of the BUYER's demand and not
on the amount of this Guarantee.
We agree that this Guarantee shall be a continuing guarantee and (i) shall not
be impaired or discharged by the granting of time or any other indulgence to the
SELLER, or any other forbearance (whether as to payment, time, performance, or
otherwise) which might, but for this provision, have any such effect; (ii) shall
not be conditioned or contingent upon the BUYER's pursuit of any remedy that it
has against the SELLER;
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Shipbuilding Contract H2245
and (iii) shall be unconditional irrespective of any other circumstance that
might otherwise constitute a legal or equitable discharge of a surety or
guarantor under applicable law, and we hereby waive any and all rights (whether
by counterclaim, set off or otherwise) and defenses at law or in equity that may
be available to us by reason of such circumstance.
This Guarantee shall become effective from the time of the actual receipt of the
first installment by the SELLER from the BUYER under the Contract and the Refund
Amount payable under this Guarantee shall correspond to the total installment
payments actually made by the BUYER to the SELLER from time to time under the
Contract prior to the delivery of the VESSEL including applicable interest.
This Guarantee shall expire and become null and void on the earlier to occur of
(i) the receipt by the BUYER of the sum guaranteed hereby; (ii) the receipt by
the Bank of either a copy of the Protocol of Delivery and Acceptance of the
VESSEL, purportedly signed by the BUYER and the SELLER and issued in the form
attached hereto as Appendix B or a copy of the Certificate of Completion of the
Vessel signed by the respective parties thereto in the form attached hereto as
Appendix C; or (iii) 5:00 p.m. New York time on May 1, 2001, in any such case
this Guarantee shall be returned to us; provided, the Bank further agrees that
its obligations hereunder shall continue to be effective or reinstated, as the
case may be, if at any time any payment, or any part thereof, made by the SELLER
is rescinded or must otherwise be restored by the BUYER upon the bankruptcy or
reorganization of the SELLER.
Notwithstanding the provisions hereinabove, in case we receive notification from
the BUYER or the SELLER confirmed by an arbitrator stating that the BUYER's
claim to cancel the Contract or the BUYER's claim for refundment thereunder has
been disputed and referred to arbitration in accordance with the provisions of
the Contract, the period of validity of this Guarantee shall be extended until
thirty (30) days after the final award shall be rendered in the arbitration and
a copy thereof acknowledged by the arbitrators. In such case, this Guarantee
shall not be available unless and until such acknowledged copy of the final
award in the Arbitration justifying the BUYER's claim is presented to us;
subject to any appeal of such final award which may be permitted under English
law; provided the Refund Amount shall be adjusted to reflect the delay resulting
from such arbitration and shall be calculated in accordance with Schedule 1
hereto to the date payment is actually made.
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This Guarantee is governed by and enforced and construed in accordance with the
laws of England.
For: [Name of Guarantor]
By:------------------------ By:------------------------
Name:---------------------- Name:----------------------
Title:--------------------- Title:---------------------
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Shipbuilding Contract H2245
SCHEDULE 1 TO EXHIBIT A
REFUND AMOUNT
Net
Date Amount
---- ------
A-5
Amended and Restated
Shipbuilding Contract H2245
Appendix A to Exhibit A
- --------------------- Bank
- ---------------------
- ---------------------
Re: Irrevocable Letter of Refundment Guarantee No. __ (the "Guarantee")
The undersigned hereby certifies to [Name of Guarantor] with reference
to Guarantee No.______ that:
1. The undersigned is duly authorized to execute and deliver
this certificate on behalf of the BUYER.
2. The BUYER hereby makes a claim against the Guarantee for
payment of US$ _________, plus simple interest thereon
calculated at the rate of percent per annum on the basis of a
360 day year from __________ to the date payment is effected
by [Name of Guarantor] to the BUYER in accordance with the
payment instructions provided below.
3. The amount claimed represents a demand for refund of amounts
refundable to the BUYER and such demand for refund has been
made in conformity with the Amended and Restated
Shipbuilding Contract dated the ___ day of _____________,
1997, made by and among Navigator Holdings PLC, or assignee
(the "BUYER") and China Shipbuilding Trading Company,
Limited and Jiangnan Shipyard (collectively, the "SELLER"),
for the construction of one (1) 22,000 cubic meter liquefied
ethylene gas carrier having Hull No. 2245, as amended,
supplemented or otherwise modified from time to time
(hereinafter called the "Contract") and that the SELLER has
failed to make the refund after receipt of our demand to the
SELLER.
4. You are hereby directed to make payment of the stated amount
to ________________________ [INSERT PAYMENT INSTRUCTIONS]
------------------------
By:---------------------
Date:-------------------
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Shipbuilding Contract H2245
Appendix B to Exhibit A
PROTOCOL OF DELIVERY AND ACCEPTANCE
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, China Shipbuilding Trading Company and Jiangnan
Shipyard (collectively the "SELLER") does hereby deliver at ________ hours
(local time) on __________________, to Navigator Holdings PLC or assignee (the
"BUYER"), the vessel described hereunder in accordance with the provisions of
the Amended and Restated Shipbuilding Contract dated ______________, as amended,
made by and between SELLER and the BUYER.
Name of VESSEL:----------------------------
SELLER's Hull No. 2245
Type of VESSEL:
That the undersigned, Navigator Holdings PLC or assignee does hereby
accept delivery of the aforesaid vessel and certify that the same is delivered
in accordance with the provisions of the said Shipbuilding Contract, and that
this PROTOCOL OF DELIVERY AND ACCEPTANCE does not release SELLER from its
responsibilities under Article IX of the said Shipbuilding Contract.
NAVIGATOR HOLDINGS PLC
By:------------------------
Name:----------------------
Title:---------------------
CHINA SHIPBUILDING TRADING
COMPANY, LIMITED
By:------------------------
Name:----------------------
Title:---------------------
JIANGNAN SHIPYARD
By:------------------------
Name:----------------------
Title:---------------------
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Amended and Restated
Shipbuilding Contract H2245
Appendix C to Exhibit A
CERTIFICATE OF COMPLETION
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, Jiangnan Shipyard ("Builder"), China Shipbuilding
Trading Company, Ltd. ("CSTC"), Tractebel Gas Engineering GmbH ("Tractebel") and
Germanischer Lloyd ("GL") do hereby confirm that the Vessel described hereunder
together with the Gas Plant is completed at ______ hours (local time) of _____
day of ____________ in accordance with the terms and conditions of the Amended
and Restated Shipbuilding Contract dated ________, 1997, as amended, made by and
among Navigator Holdings PLC (as "Buyer"), CSTC and the Builder (CSTC and
Builder collectively as the "Seller") and that the Vessel is fully in compliance
with the requirements of the Classification Society as described in the
Shipbuilding Contract.
Name of Vessel: -----------------------------
Seller's Hull No.: -----------------------------
Type of Vessel: -----------------------------
That this Certificate of Completion does not release Seller from its
responsibilities under Article IX of the said Shipbuilding Contract.
JIANGNAN SHIPYARD TRACTEBEL GAS ENGINEERING GmbH
By:------------------------ By:------------------------
Name:---------------------- Name:----------------------
Title:--------------------- Title:---------------------
CHINA SHIPBUILDING TRADING GERMANISCHER LLOYD
COMPANY, LTD.
By:------------------------ By:------------------------
Name:---------------------- Name:----------------------
Title:--------------------- Title:---------------------
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Shipbuilding Contract H2245
EXHIBIT "B":
IRREVOCABLE
PERFORMANCE BOND
[STATIONERY OF PERFORMANCE GUARANTOR BANK]
[Date]
Navigator Holdings, PLC
c/o Cambridge Petroleum Transport Corporation
535 Madison Avenue
19th Floor
New York, New York 10022
Dear Sirs:
At the request of China Shipbuilding Trading Company, Limited ("CSTC") and
Jiangnan Shipyard (the "Builder" and together with CSTC collectively called the
"SELLER") and in consideration of Navigator Holdings, PLC (the "BUYER") agreeing
to pay SELLER the installments of the contract price (the "Contract Price")
pursuant to the Amended and Restated Shipbuilding Contracts dated the 26th day
of June, 1997, as amended, supplemented or otherwise modified from time to time
(hereinafter called the "Contracts") made by and between the BUYER and the
SELLER for the construction of five (5) 22,000 cubic meter liquefied ethylene
gas carriers respectively having Hull Nos. 2245, 2246, 2247, 2248 and 2249
(hereinafter called the "VESSELS"), Export-Import Bank of China (the "Bank")
guarantees the payment (and not merely the collectability of the same) to the
BUYER by the SELLER, immediately upon demand, of an amount up to but not
exceeding a total aggregate amount of United States Dollars Twenty Six Million
Seven Hundred Thousand (US$26,700,000) (the "Payment Amount"), if and when the
same or any part thereof becomes payable to BUYER from the SELLER under any
Contract or Contracts if any such Contract or Contracts are cancelled by the
BUYER in accordance with the terms (Article III, 1(a), 2(c), 3(c), 4(c), 5(c),
Article X, Article XII 2(b) and Article XVI (b) and (c)) of such Contract or
Contracts (any a "Cancellation Event"). This Performance Bond shall become
effective upon actual receipt in full by the SELLER of the initial installment
due under each of the Contracts.
Payment shall be made to the BUYER in United States Dollars in accordance with
the payment instruction given to the BANK by the BUYER.
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Shipbuilding Contract H2245
Payment under this Performance Bond is available at the counters of
Export-Import Bank of China in __________________ against presentation of the
BUYER's signed statement issued in the form attached hereto as Appendix A
("Notice of Demand"). The Notice of Demand shall set forth the dollar amount to
be paid to the BUYER under this Performance Bond, which amount shall be based
upon Schedule 1 attached hereto (the "Demand Amount") provided such Demand
Amount shall not exceed the Payment Amount. As to any date on which a Notice of
Demand is presented, the Demand Amount shall be equal to the amount set forth
opposite the calendar month in which such Notice of Demand is presented under
the column heading specified in the Notice of Demand. If the Notice of Demand is
received by the Bank by 12:00 noon local time on a banking day, the Bank shall
pay the Demand Amount in immediately available funds within ten (10) banking
days. If the Notice of Demand is received by the Bank after 12:00 noon local
time on a banking day, the Bank shall pay the Demand Amount in immediately
available funds within eleven (11) banking days.
The right of the BUYER to demand payment under this Performance Bond by
presentation of a Notice of Demand shall become effective on the earlier to
occur of (i) April 1, 2001, (ii) the date on which the SELLER fails to pay any
liquidated damages payable to BUYER as provided in Section 1(a) of Article III
of the Contracts, (iii) the occurrence of a Cancellation Event or (iv) the
bankruptcy or insolvency of the Builder.
This Performance Bond is available for one payment only, whether for the full
amount hereof or any part thereof, as may be demanded by the BUYER.
We agree that this Performance Bond shall be a continuing guarantee and (i)
shall not be impaired or discharged by the granting of time or any other
indulgence to the SELLER, or any other forbearance (whether as to payment, time,
performance, or otherwise) which might, but for this provision, have any such
effect; (ii) shall not be conditioned or contingent upon the BUYER's pursuit of
any remedy that it has against the SELLER; and (iii) shall be unconditional
irrespective of any other circumstance that might otherwise constitute a legal
or equitable discharge of a surety or guarantor under applicable law, and we
hereby waive any and all rights (whether by counterclaim, set off or otherwise)
and defenses at law or in equity that may be available to us by reason of such
circumstance.
This Performance Bond shall expire and become null and void on the earlier of
(i) the receipt by the BUYER of the sum guaranteed hereby; (ii) the receipt by
Bank of a copy of the Protocol of Acceptance and Delivery or Certificates of
Completion for each of the five (5) VESSELS in the form of Appendix B or
Appendix C to this Performance Bond; or (iii) 5:00 p.m. New York time on May 1,
2001, in any such case this Performance Bond shall be returned to us; provided,
the Bank further agrees that its obligations hereunder shall continue to be
effective or reinstated, as the case may be, if at any time any payment, or any
part thereof, made by the SELLER is rescinded or must otherwise be restored by
the BUYER upon the bankruptcy or reorganization of the SELLER.
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Notwithstanding the provisions hereinabove, in case we receive notification from
the BUYER or the SELLER stating that the BUYER's claim to cancel the Contracts
or the BUYER's claim for payment thereunder has been disputed and referred to
arbitration in accordance with the provisions of the Contracts, the period of
validity of this Performance Bond shall be extended until thirty (30) days after
the final award shall be rendered in the arbitration and a copy thereof
acknowledged by the arbitrators. In such case, this Performance Bond shall not
be available unless and until such acknowledged copy of the final award in the
Arbitration justifying the BUYER's claim is presented to us; subject to any
appeal of such final award which may be permitted under English law.
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This Guarantee is governed by and enforced and construed in accordance with the
laws of England.
For: [Name of Performance Guarantor]
By:------------------------ By:------------------------
Name:---------------------- Name:----------------------
Title:--------------------- Title:---------------------
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Shipbuilding Contract H2245
SCHEDULE 1
REFUND AMOUNT
Net
Date Amount
---- ------
B-5
Appendix A to Exhibit B
- ---------------------Bank
- ---------------------
- ---------------------
Re: Irrevocable Performance Bond No. __ (the "Performance Bond")
The undersigned hereby certifies to The Export Import Bank of China
with reference to Performance Bond No. ______ that:
1. The undersigned is duly authorized to execute and deliver
this certificate on behalf of the BUYER.
2. The BUYER hereby makes a claim against the Performance Bond
for payment of US$ _________, based upon Schedule 1 attached
to the Performance Bond. As of the date of this Notice of
Demand, we have received either a Protocol of Delivery and
Acceptance or a Certificate of Completion with respect to
____ Vessels (as defined below). Therefore the amount claimed
is based upon the amount set forth under column ____ of
Schedule 1 opposite ______ (the date).
3. The amount claimed represents a demand for refund of amounts
refundable to the BUYER and such demand for refund has been
made in conformity with the Amended and Restated
Shipbuilding Contracts each dated the 26th day of June, 1997
made by and among Navigator Holdings, PLC, or assignee (the
"BUYER") and China Shipbuilding Trading Company, Limited and
Jiangnan Shipyard (collectively, the "SELLER"), for the
construction of five (5) 22,000 cubic meter liquefied
ethylene gas carrier having Hull Nos. 2245, 2246, 2247, 2248
and 2249 (the "Vessels"), as amended, supplemented or
otherwise modified from time to time (hereinafter called the
"Contracts") and that the SELLER has failed to make the
refund after receipt of our demand to the SELLER.
4. You are hereby directed to make payment of the stated amount
to ________________________ [INSERT PAYMENT INSTRUCTIONS]
-----------------------------
By:--------------------------
Date:------------------------
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Amended and Restated
Shipbuilding Contract H2245
B-6
Appendix B to Exhibit B
PROTOCOL OF DELIVERY AND ACCEPTANCE
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, China Shipbuilding Trading Company and Jiangnan
Shipyard (collectively the "SELLER") does hereby deliver at ________ hours
(local time) on __________________, to Navigator Holdings PLC or assignee (the
"BUYER"), the vessel described hereunder in accordance with the provisions of
the Amended and Restated Shipbuilding Contract dated June 26, 1997, as amended,
made by and between SELLER and the BUYER.
Name of VESSEL:------------------
SELLER's Hull No. 2245
Type of VESSEL:
That the undersigned, Navigator Holdings PLC or assignee does hereby
accept delivery of the aforesaid vessel and certify that the same is delivered
in accordance with the provisions of the said Shipbuilding Contract, and that
this PROTOCOL OF DELIVERY AND ACCEPTANCE does not release SELLER from its
responsibilities under Article IX of the said Shipbuilding Contract.
NAVIGATOR HOLDINGS PLC
By:------------------------
Name:----------------------
Title:---------------------
CHINA SHIPBUILDING TRADING
COMPANY, LIMITED
By:------------------------
Name:----------------------
Title:---------------------
JIANGNAN SHIPYARD
By:------------------------
Name:----------------------
Title:---------------------
B-7
Appendix C to Exhibit B
CERTIFICATE OF COMPLETION
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, Jiangnan Shipyard ("Builder"), China Shipbuilding
Trading Company, Ltd. ("CSTC"), Tractebel Gas Engineering GmbH ("Tractebel") and
Germanischer Lloyd ("GL") do hereby confirm that the Vessel described hereunder
together with the Gas Plant is completed at ______ hours (local time) of _____
day of ____________ in accordance with the terms and conditions of the Amended
and Restated Shipbuilding Contract dated ________, 1997, as amended, made by and
among Navigator Holdings Ltd. (as "Buyer"), CSTC and the Builder (CSTC and
Builder collectively as the "Seller") and that the Vessel is fully in compliance
with the requirements of the Classification Society as described in the
Shipbuilding Contract.
Name of Vessel: --------------------------
Seller's Hull No.: --------------------------
Type of Vessel: --------------------------
That this Certificate of Completion does not release Seller from its
responsibilities under Article IX of the said Shipbuilding Contract.
JIANGNAN SHIPYARD TRACTEBEL GAS ENGINEERING GmbH
By:------------------------ By:------------------------
Name:---------------------- Name:----------------------
Title:--------------------- Title:---------------------
CHINA SHIPBUILDING TRADING GERMANISCHER LLOYD
COMPANY, LTD.
By:------------------------ By:------------------------
Name:---------------------- Name:----------------------
Title:--------------------- Title:---------------------
B-8
EXHIBIT "C":
IRREVOCABLE PERFORMANCE BOND
[STATIONERY OF PERFORMANCE GUARANTOR BANK]
[Date]
Navigator Holdings, PLC
c/o Cambridge Petroleum Transport Corporation
535 Madison Avenue
19th Floor
New York, New York 10022
Dear Sirs:
At the request of Tractebel Gas Engineering GmBH and in consideration of
Navigator Holdings, PLC (the "BUYER") agreeing to pay China Shipbuilding Trading
Company, Limited ("CSTC") and Jiangnan Shipyard (the "Builder" together with
CSTC collectively called the "SELLER") the installments of the contract price
(the "Contract Price") pursuant to the Amended and Restated Shipbuilding
Contracts dated the 26th day of June, 1997, as amended, supplemented or
otherwise modified from time to time (hereinafter called the "Contracts") made
by and between the BUYER and the SELLER for the construction of five (5) 22,000
cubic meter liquefied ethylene gas carriers having Hull Nos. 2245, 2246, 2247,
2248 and 2249 (hereinafter called the "VESSELS"), Generale de Banque (the
"Bank") guarantees the payment (and not merely the collectability of the same)
to the BUYER by the SELLER, immediately upon demand, of an amount up to but not
exceeding a total aggregate amount of United States Dollars Thirteen Million
Three Hundred Thousand (US$13,300,000) (the "Payment Amount"), if and when the
same or any part thereof become payable to BUYER from the SELLER under any
Contract or Contracts if any such contract or contracts are cancelled by the
BUYER in accordance with the terms (Article III, 1(a), 2(c), 3(c), 4(c), 5(c),
Article X, Article XII 2(b) and Article XVI(b) and (c)) of the Contracts (any a
"Cancellation Event"). This Performance Bond shall become effective upon payment
of the initial installment under each of the Contracts.
Payment shall be made to the BUYER in United States Dollars in accordance with
the payment instruction given to the BANK by the BUYER.
Payment under this Performance Bond is available at the counters of
_______________ against presentation of the BUYER's signed statement issued in
the form attached hereto as Appendix A ("Notice of Demand"). The Notice of
Demand shall set forth the dollar amount to be paid to the
C-1
BUYER under this Performance Bond, which amount shall be based upon Schedule 1
attached hereto (the "Demand Amount") provided such Demand Amount shall not
exceed the Payment Amount. As to any date on which a Notice of Demand is
presented, the Demand Amount shall be equal to the amount set forth opposite the
calendar month in which such Notice of Demand is presented and under the column
heading specified in the Notice of Demand less the amount paid by the
Export-Import Bank of China under such Bank's Irrevocable Performance Bond dated
_______, 1997 (the "Ex-Im Performance Bond"). In addition, the BUYER's right to
demand payment as provided above is subject to delivery by BUYER to the Bank of
a copy of the notice of demand presented to the Export-Import Bank of China
under the Ex-Im Performance Bond in the amount of US$26,700,000 and evidence
that such amount has been paid.
If the Notice of Demand is received by the Bank by 12:00 noon local time on a
business day, the Bank shall pay the Demand Amount in immediately available
funds on the same business day. If the Notice of Demand is received by the Bank
after 12:00 noon local time on a business day, the Bank shall pay the Demand
Amount in immediately available funds on the next succeeding business day.
The right of the BUYER to demand payment under this Performance Bond shall
become effective on the earlier to occur of (i) April 1, 2001, (ii) the date on
which the SELLER fails to pay any liquidated damages payable to BUYER as
provided in Section 1(a) of Article III of the Contracts, (iii) the occurrence
of a Cancellation Event or (iv) the bankruptcy or insolvency of the Builder.
This Performance Bond is available for one payment only, whether for the full
amount hereof or any part thereof, as may be demanded by the BUYER.
We agree that this Performance Bond shall be a continuing guarantee and (i)
shall not be impaired or discharged by the granting of time or any other
indulgence to the SELLER, or any other forbearance (whether as to payment, time,
performance, or otherwise) which might, but for this provision, have any such
effect; (ii) shall not be conditioned or contingent upon the BUYER's pursuit of
any remedy that it has against the SELLER; and (iii) shall be unconditional
irrespective of any other circumstance that might otherwise constitute a legal
or equitable discharge of a surety or guarantor under applicable law, and we
hereby waive any and all rights (whether by counterclaim, set off or otherwise)
and defenses at law or in equity that may be available to us by reason of such
circumstance.
This Performance Bond shall expire and become null and void on the earlier of
(i) the receipt by the BUYER of the sum guaranteed hereby; (ii) the receipt by
Bank of a copy of the Protocol of Acceptance and Delivery and/or Certificates of
Completion for each of the five (5) VESSELs in the form of Appendix B or
Appendix C to this Performance Bond; and (iii) 5:00 p.m. New York time on May 1,
2001, in any such case this Performance Bond shall be returned to us; provided,
the Bank further agrees that its obligations hereunder shall continue to be
effective or reinstated, as the case may be, if at any time any payment, or any
part thereof, made by the SELLER is rescinded or must otherwise be restored by
the BUYER upon the bankruptcy or reorganization of the SELLER.
C-2
Notwithstanding the provisions hereinabove, in case we receive notification from
the BUYER or the SELLER confirmed by an arbitrator stating that the BUYER's
claim to cancel the Contracts or the BUYER's claim for refundment thereunder has
been disputed and referred to arbitration in accordance with the provisions of
the Contract, the period of validity of this Performance Bond shall be extended
until thirty (30) days after the final award shall be rendered in the
arbitration and a copy thereof acknowledged by the arbitrators. In such case,
this Performance Bond shall not be available unless and until such acknowledged
copy of the final award in the Arbitration justifying the BUYER's claim is
presented to us; subject to any appeal of such final award which may be
permitted under English law.
This Performance Bond is governed by and enforced and construed in accordance
with the laws of England.
For: Generale de Banque
By:------------------------ By:------------------------
Name:---------------------- Name:----------------------
Title:--------------------- Title:---------------------
C-3
Appendix A to Exhibit C
Notice of Demand
Generale de Banque
- ----------------------
- ----------------------
Re: Irrevocable Performance Bond No. __ (the "Performance Bond")
The undersigned hereby certifies to Generale de Banque with reference
to Guarantee No.______ that:
1. The undersigned is duly authorized to execute and deliver
this certificate on behalf of the BUYER.
2. The BUYER hereby makes a claim against the Performance Bond
for payment of US$ _________, based upon Schedule 1 attached
to the Performance Bond. As of the date of this Certificate,
we have received either a Protocol of Delivery and
Acceptance or a Certificate of Completion with respect to
____ Vessels (as defined below). Therefore the amount
claimed is based upon the amount set forth under column ____
of Schedule 1 opposite ______ (the date), less $26,700,000,
the amount paid by the Export Import Bank of China pursuant
to the attached Notice of Demand presented by the
undersigned on _________________.
3. The amount claimed represents a demand for refund of amounts
refundable to the BUYER and such demand for refund has been
made in conformity with the Amended and Restated
Shipbuilding Contracts each dated the 26th day of June, 1997
made by and among Navigator Holdings, PLC, or assignee (the
"BUYER") and China Shipbuilding Trading Company, Limited and
Jiangnan Shipyard (collectively, the "SELLER"), for the
construction of five (5) 22,000 cubic meter liquefied
ethylene gas carrier having Hull Nos. 2245, 2246, 2247, 2248
and 2249 (the "Vessels"), as amended, supplemented or
otherwise modified from time to time (hereinafter called the
"Contracts") and that the SELLER has failed to make the
refund after receipt of our demand to the SELLER.
4. You are hereby directed to make payment of the stated amount
to ________________________ [INSERT PAYMENT INSTRUCTIONS]
----------------------------
By:-------------------------
Date:-----------------------
C-4
Appendix B to Exhibit C
PROTOCOL OF DELIVERY AND ACCEPTANCE
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, China Shipbuilding Trading Company and Jiangnan
Shipyard (collectively the "SELLER") does hereby deliver at ________ hours
(local time) on __________________, to Navigator Holdings PLC or assignee (the
"BUYER"), the vessel described hereunder in accordance with the provisions of
the Amended and Restated Shipbuilding Contract dated June 26, 1997, as amended,
made by and between SELLER and the BUYER.
Name of VESSEL:-------------------------
SELLER's Hull No. 2245
Type of VESSEL:
That the undersigned, Navigator Holdings PLC or assignee does hereby
accept delivery of the aforesaid vessel and certify that the same is delivered
in accordance with the provisions of the said Shipbuilding Contract, and that
this PROTOCOL OF DELIVERY AND ACCEPTANCE does not release SELLER from its
responsibilities under Article IX of the said Shipbuilding Contract.
NAVIGATOR HOLDINGS PLC
By:------------------------
Name:----------------------
Title:---------------------
CHINA SHIPBUILDING TRADING
COMPANY, LIMITED
By:------------------------
Name:----------------------
Title:---------------------
JIANGNAN SHIPYARD
By:------------------------
Name:----------------------
Title:---------------------
C-1
Appendix C to Exhibit C
CERTIFICATE OF COMPLETION
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, Jiangnan Shipyard ("Builder"), China Shipbuilding
Trading Company, Ltd. ("CSTC"), Tractebel Gas Engineering GmbH ("Tractebel") and
Germanischer Lloyd ("GL") do hereby confirm that the Vessel described hereunder
together with the Gas Plant is completed at ______ hours (local time) of _____
day of ____________ in accordance with the terms and conditions of the Amended
and Restated Shipbuilding Contract dated ________, 1997, as amended, made by and
among Navigator Holdings Ltd. (as "Buyer"), CSTC and the Builder (CSTC and
Builder collectively as the "Seller") and that the Vessel is fully in compliance
with the requirements of the Classification Society as described in the
Shipbuilding Contract.
Name of Vessel:
Seller's Hull No.:
Type of Vessel:
That this Certificate of Completion does not release Seller from its
responsibilities under Article IX of the said Shipbuilding Contract.
JIANGNAN SHIPYARD TRACTEBEL GAS ENGINEERING GmbH
By:------------------------ By:------------------------
Name:---------------------- Name:----------------------
Title:--------------------- Title:---------------------
CHINA SHIPBUILDING TRADING GERMANISCHER LLOYD
COMPANY, LTD.
By:------------------------ By:------------------------
Name:---------------------- Name:----------------------
Title:--------------------- Title:---------------------
C-1
EXHIBIT "D"
CERTIFICATE OF COMPLETION
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, Jiangnan Shipyard ("Builder"), China Shipbuilding
Trading Company, Ltd. ("CSTC"), Tractebel Gas Engineering GmbH ("Tractebel") and
Germanischer Lloyd ("GL") do hereby confirm that the Vessel described hereunder
together with the Gas Plant is completed at ______ hours (local time) of _____
day of ____________ in accordance with the terms and conditions of the Amended
and Restated Shipbuilding Contract dated ________, 1997, as amended, made by and
among Navigator Holdings Ltd. (as "Buyer"), CSTC and the Builder (CSTC and
Builder collectively as the "Seller") and that the Vessel is fully in compliance
with the requirements of the Classification Society as described in the
Shipbuilding Contract.
Name of Vessel: -----------------------------
Seller's Hull No.: -----------------------------
Type of Vessel: -----------------------------
That this Certificate of Completion does not release Seller from its
responsibilities under Article IX of the said Shipbuilding Contract.
JIANGNAN SHIPYARD TRACTEBEL GAS ENGINEERING GmbH
By:------------------------ By:------------------------
Name:---------------------- Name:----------------------
Title:--------------------- Title:---------------------
CHINA SHIPBUILDING TRADING GERMANISCHER LLOYD
COMPANY, LTD.
By:------------------------ By:------------------------
Name:---------------------- Name:----------------------
Title:--------------------- Title:---------------------
C-2
C-3
EXHIBIT "D-1"
PROTOCOL OF DELIVERY AND ACCEPTANCE
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, China Shipbuilding Trading Company and Jiangnan
Shipyard (collectively the "SELLER") does hereby deliver at ________ hours
(local time) on __________________, to Navigator Holdings PLC or assignee (the
"BUYER"), the vessel described hereunder in accordance with the provisions of
the Amended and Restated Shipbuilding Contract dated ______________, as amended,
made by and between SELLER and the BUYER.
Name of VESSEL:------------------------
SELLER's Hull No. 2245
Type of VESSEL:
That the undersigned, Navigator Holdings PLC or assignee does hereby
accept delivery of the aforesaid vessel and certify that the same is delivered
in accordance with the provisions of the said Shipbuilding Contract, and that
this PROTOCOL OF DELIVERY AND ACCEPTANCE does not release SELLER from its
responsibilities under Article IX of the said Shipbuilding Contract.
NAVIGATOR HOLDINGS PLC
By:------------------------
Name:----------------------
Title:---------------------
CHINA SHIPBUILDING TRADING
COMPANY, LIMITED
By:------------------------
Name:----------------------
Title:---------------------
JIANGNAN SHIPYARD
By:------------------------
Name:----------------------
Title:---------------------
D-1-1
EXHIBIT "E":
TRUSTEE'S COMMITMENT LETTER
JIANGNAN SHIPYARD
c/o China Shipbuilding Trading Company, Limited
and CHINA SHIPBUILDING TRADING COMPANY, LIMITED
10 Yue Tan Bei Xiao Jie
Beijing 100861
The People's Republic Bank of China
Re: Shipbuilding Contract for Construction of 22,000
Cubic Meters Liquefied Ethylene Gas Carrier (the
"Contract")
Ladies and Gentlemen:
This is to confirm that the undersigned as indenture trustee under the
Indenture (the "Indenture") dated as of _____________, 1997, among the
undersigned, as trustee (the "Indenture Trustee"), _________________,
________________, __________________, _______________, __________________,
(collectively, the "Owners") and ________________, as agent for the Owners, is
holding in Account No. ______, the Pre-Funding Account established under and
pursuant to the terms of Indenture, an amount equal to US$_________.
1. Pursuant to the terms of the Indenture, the undersigned shall
automatically disburse from amounts held in the Pre-Funding Account the first
through fourth installments of the Contract Price (as defined in the Amended and
Restated Shipbuilding Contract dated June 26, 1997 with respect to Hull No. 2245
(the "Vessel")) on the dates and in the manner set forth in Schedule 1 of the
Contract and in accordance with Section 4 of Article II of the Contract and
Schedule 1 hereto.
2. The Fourth Installment shall be payable to the Seller only after the
Trustee has received a duplicate original, or facsimile copy of such original,
of either a Protocol of Delivery and Acceptance or a Certificate of Completion
with respect to each Vessel having an Original Delivery Date prior to that of
the Vessel.
3. The fifth installment shall be paid in accordance with the
provisions of Article II, Section (4) upon receipt by the Indenture Trustee of a
Protocol of Delivery and Acceptance signed by both the SELLER and the BUYER or a
Certificate of Completion signed by the SELLER, Germanischer Lloyd and Tractebel
Gas Engineering GmBH.
E-1
4. Any payment by us shall be made in United States Dollars by
telegraphic transfer to Bank of China New York Branch, 410 Madison Avenue, New
York New York 10017 U.S.A. as receiving bank nominated by you for credit to the
account of China Shipbuilding Trading Company, Limited with Bank of China, Head
Office, Banking Department, Beijing, the People's Republic of China with SWIFT
advise from Bank of China, New York Branch to Bank of China, Head Office,
Banking Department, or through other receiving bank to be nominated by you from
time to time, in favor of China Shipbuilding Trading Company Limited or your
assignee. We hereby agree to make all payments as aforesaid unless directed by
you in writing.
5. Our obligation to make the first through fourth installments due
under the Contract shall not be affected or prejudiced by any dispute between
the SELLER and the BUYER under the Contract or by the BUILDER's delay in the
construction and/or delivery of the VESSEL due to whatever causes or by any
variation or extension of the terms thereof or by any security or other
indemnity now or hereafter held by you in respect thereof, or by any time or
indulgence granted by you or any other person in connection therewith, or by any
invalidity or unenforceability of the terms thereof, or by any act, omission,
fact circumstances whatsoever, which could or might, but for the foregoing,
diminish in any way our obligations under the Commitment.
6. This Trustee's Commitment Letter shall come into full force and
effect upon delivery to you of this Trustee's Commitment Letter and shall
continue in force and effect until the full payment of the second, third, fourth
and fifth installments or the termination of the Contract in accordance with the
terms thereof.
7. All payments by us under this Trustee's Commitment Letter shall be
made without any set-off or counterclaim and without deduction or withholding
for or on account of any taxes, duties, or charges whatsoever unless we are
compelled by law to deduct or withhold the same. In the latter event we shall
make the minimum deduction or withholding permitted and will pay such additional
amounts as may be necessary in order that the net amount received by you after
such deductions or withholdings shall equal to the amount which would have been
received had no such deduction or withholding been required to be made.
8. This Trustee's Commitment Letter shall be construed in accordance
with and governed by the Laws of New York.
9. Upon expiration of this Trustee's Commitment Letter, you shall
return the same to us without any request or demand from us. For the avoidance
of doubt, this Trustee's Commitment Letter shall have no further force and
effect upon its expiration pursuant to Clause 6 hereof, notwithstanding that the
same may not have been returned to us pursuant to the Clause 8.
IN WITNESS WHEREOF, we have caused this Trustee's Commitment Letter to
be executed and delivered by our duly authorized representative the day and year
above written.
E-2
[Name of Trustee Bank]
By:----------------------
Name:--------------------
Title:-------------------
E-3
TABLE OF CONTENTS
Page
ARTICLE I
DESCRIPTION AND CLASS........................................................................................... 2
1. DESCRIPTION................................................................................... 2
2. CLASS AND RULES............................................................................... 3
3. PRINCIPAL PARTICULARS AND DIMENSIONS OF THE VESSEL............................................ 4
4. GUARANTEED SPEED.............................................................................. 4
5. GUARANTEED FUEL CONSUMPTION................................................................... 5
6. GUARANTEED DEADWEIGHT......................................................................... 5
7. GUARANTEED CARGO TANK CAPACITY................................................................ 5
8. SUBCONTRACTING................................................................................ 6
9. REGISTRATION.................................................................................. 6
ARTICLE II
CONTRACT PRICE & TERMS OF PAYMENT............................................................................... 6
1. CONTRACT PRICE................................................................................ 6
2. CURRENCY...................................................................................... 6
3. TERMS OF PAYMENT.............................................................................. 6
4. METHOD OF PAYMENT............................................................................. 7
5. PREPAYMENT.................................................................................... 8
6. SECURITY FOR PAYMENT OF INSTALLMENTS BEFORE DELIVERY
............................................................................................. 8
7. REFUNDS....................................................................................... 8
ARTICLE III
ADJUSTMENT OF THE CONTRACT PRICE................................................................................ 10
1. DELIVERY...................................................................................... 10
2. INSUFFICIENT SPEED............................................................................ 12
3. EXCESSIVE FUEL CONSUMPTION.................................................................... 13
4. INSUFFICIENT DEADWEIGHT....................................................................... 14
5. INSUFFICIENT CARGO TANK CAPACITY.............................................................. 14
6. EFFECT OF RESCISSION.......................................................................... 15
7. SCHEDULE OF PAYMENTS DUE TO PRICE ADJUSTMENTS................................................. 15
ARTICLE IV
SUPERVISION AND INSPECTION.......................................... 15
1. APPOINTMENT OF THE BUYER'S SUPERVISOR......................................................... 15
2. APPROVAL OF PLANS AND DRAWINGS................................................................ 15
3. SUPERVISION AND INSPECTION BY THE SUPERVISOR.................................................. 16
(i)
4. LIABILITY OF THE SELLER....................................................................... 17
5. SALARIES AND EXPENSES......................................................................... 18
6. REPLACEMENT OF SUPERVISOR..................................................................... 18
ARTICLE V
MODIFICATION, CHANGES AND EXTRAS....................................... 18
1. HOW EFFECTED.................................................................................. 18
2. CHANGES IN RULES AND REGULATIONS.............................................................. 19
3. SUBSTITUTION OF MATERIALS AND/OR EQUIPMENT.................................................... 20
4. BUYER'S SUPPLIED ITEMS........................................................................ 20
ARTICLE VI
TRIALS........................................................................................................ 21
1. NOTICE........................................................................................ 21
2. HOW CONDUCTED................................................................................. 22
3. TRIAL LOAD DRAFT.............................................................................. 22
4. METHOD OF ACCEPTANCE OR REJECTION............................................................. 23
5. DISPOSITION OF SURPLUS CONSUMABLE STORES...................................................... 24
6. EFFECT OF ACCEPTANCE.......................................................................... 24
ARTICLE VII
DELIVERY........................................................................................................ 24
1. TIME AND PLACE................................................................................ 24
2. WHEN AND HOW EFFECTED......................................................................... 24
3. DOCUMENTS TO BE DELIVERED TO THE BUYER........................................................ 25
4. TITLE AND RISK................................................................................ 26
5. REMOVAL OF VESSEL............................................................................. 26
6. TENDER OF THE VESSEL.......................................................................... 26
7. GAS TRIAL..................................................................................... 27
ARTICLE VIII
DELAYS AND EXTENSION OF TIME FOR DELIVERY....................................................................... 28
1. CAUSE OF DELAY................................................................................ 28
2. NOTICE OF DELAY............................................................................... 29
ARTICLE IX
WARRANTY OF QUALITY............................................................................................. 29
1. GUARANTEE OF MATERIAL AND WORKMANSHIP......................................................... 29
2. NOTICE OF DEFECTS............................................................................. 29
3. REMEDY OF DEFECTS............................................................................. 30
4. EXTENT OF THE SELLER'S LIABILITY.............................................................. 31
5. GUARANTEE ENGINEER............................................................................ 32
(ii)
ARTICLE X
CANCELLATION BY THE BUYER...................................................................................... 32
ARTICLE XI
BUYER'S DEFAULT................................................................................................. 33
1. DEFINITION OF DEFAULT......................................................................... 33
2. NOTICE OF DEFAULT............................................................................. 33
3. INTEREST AND CHARGE........................................................................... 33
4. DEFAULT BEFORE DELIVERY OF THE VESSEL......................................................... 34
5. SALE OF THE VESSEL............................................................................ 35
ARTICLE XII
INSURANCE...................................................................................................... 36
1. EXTENT OF INSURANCE COVERAGE.................................................................. 36
2. APPLICATION OF RECOVERED AMOUNT............................................................... 36
3. TERMINATION OF THE SELLER'S OBLIGATION TO INSURE.............................................. 37
ARTICLE XIII
DISPUTES AND ARBITRATION........................................................................................ 37
1. PROCEEDINGS.................................................................................. 37
2. ALTERNATIVE ARBITRATION BY AGREEMENT.......................................................... 38
3. NOTICE OF AWARD............................................................................... 38
ARTICLE XIV
RIGHT OF ASSIGNMENT............................................................................................. 39
ARTICLE XV
TAXES AND DUTIES................................................................................................ 39
1. TAXES......................................................................................... 39
2. DUTIES........................................................................................ 39
ARTICLE XVI
GOVERNMENTAL PERMITS, LICENSES, LAWS, AND PATENTS.............................. 40
GOVERNMENTAL APPROVALS AND LICENSES.................................................................... 40
ARTICLE XVII
LAWS AND PERMITS
................................................................................................................ 41
ARTICLE XVIII
PATENTS, TRADEMARKS AND COPYRIGHTS.............................................................................. 41
ARTICLE XIX
(iii)
NOTICE.......................................................................................................... 41
ARTICLE XX
EFFECTIVE DATE OF CONTRACT...................................................................................... 43
ARTICLE XXI
INTERPRETATION.................................................................................................. 44
1. LAW APPLICABLE................................................................................ 44
2. DISCREPANCIES................................................................................. 44
3. DEFINITION.................................................................................... 44
4. ENTIRE AGREEMENT.............................................................................. 44
5. REGISTRATION OF VESSEL........................................................................ 45
6. LANGUAGE...................................................................................... 45
7. AMENDMENTS.................................................................................... 45
(iv)
Schedule 1 Contract Price Installment Schedule
Schedule 2 Refund Amount Schedule (Letter of Guarantee)
Schedule 3 Refund Amount Schedule (Performance Bond)
Exhibit A Irrevocable Letter of Refundment yGuarantee
Exhibit B Irrevocable Performance Bond from the Export Import Bank of China
Exhibit C Irrevocable Performance Bond from Generale de Banque
Exhibit D Certificate of Completion
Exhibit D-1 Protocol of Acceptance and Delivery
Exhibit E Trustee's Commitment letter
(v)