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EXHIBIT 10.27
[PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO AN
APPLICATION FOR AN ORDER FOR CONFIDENTIAL TREATMENT REQUESTED
BY CARNIVAL CORPORATION]
SHIPBUILDING CONTRACT
Between, CARNIVAL CRUISE LINES, INC., a company organized and existing under
the laws of the Republic of Panama with its principal offices located at 3655
N.W. 87th Avenue, Miami, Florida, USA 33178 - 2428 hereinafter called the
"PURCHASER",
and
KVAERNER MASA-YARDS, INC., a company organized and existing under the laws of
the Republic of Finland with a registered office in Turku, Finland hereinafter
called the "CONTRACTOR",
In respect of yard No.: 488.
WHEREAS
(i) By a contract dated 15th September 1987 made between Wartsila
Marine Industries Inc. ("WMI") and the PURCHASER, WMI agreed to
design, build and deliver to the PURCHASER a passenger cruise vessel
known as hull no. 1299 (and following the Contract referred to in
recital (ii) as 480 at the yard of the CONTRACTOR) and after delivery
named ms "ECSTASY".
(ii) By an agreement dated 25th January 1990 the CONTRACTOR agreed to
complete ms "ECSTASY" following the bankruptcy of WMI and has
delivered ms "ECSTASY" to the PURCHASER.
(iii) By contract dated 15th September 1987 WMI agreed to design, build and
deliver to the PURCHASER a further passenger cruise vessel known as
hull no. 1300 to be named ms "SENSATION" and by a contract dated 12th
May 1991 between the CONTRACTOR and the PURCHASER the CONTRACTOR
agreed to complete the construction of ms "SENSATION" (as Hull no.
484) on the terms set out therein.
(iv) By a further contract dated 5th September 1991 the CONTRACTOR agreed
to design build and deliver to the PURCHASER a further passenger
cruise vessel to be known during construction as Hull 487 and on
delivery to be named ms "FASCINATION".
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(v) This agreement sets out the terms on which the CONTRACTOR will design
and build for the PURCHASER a further passenger cruise ship to be
known during construction as Hull 488.
IT IS HEREBY AGREED AND STIPULATED AS FOLLOWS:
ARTICLE 1: SUBJECT OF THE CONTRACT
(a) VESSEL'S Description and Main Characteristics
The CONTRACTOR undertakes to design and build and complete at the Building Site
(as hereinafter defined) and to deliver to the PURCHASER, who orders and
undertakes to accept delivery of one passenger cruise ship (hereinafter called
the "VESSEL") , which will be a "carbon-copy" sistership to MS "ECSTASY", hull
No. 480 as built except that modifications shall be made:
(1) as set out in Addendum to the SPECIFICATIONS of even date herewith and
signed by the parties hereto and
(2) as required to ensure that the Vessel complies with the laws, rules,
regulations and enactments referred to in paragraph (e) of this
Article 1.
(3) as required to ensure that the Vessel incorporates all changes to ms
"ECSTASY" as built agreed on at the date hereof to be made in relation
to the design and construction of ms "FASCINATION" without any cost
additional to the purchase price specified herein.
The specifications and plans for MS "ECSTASY" as built (modified in accordance
with the foregoing provisions of this paragraph (a) and the provisions referred
to in paragraph (e) of this Article 1) shall hereinafter be referred to as the
"SPECIFICATIONS" and the "PLAN" respectively.
Regarding the Makers List, the CONTRACTOR is entitled to make changes as
compared with MS "ECSTASY". The changes will be submitted for technical
approval by the PURCHASER. Such approval shall not be withheld, if the
relevant characteristics of the specification are fulfilled, and the reputation
of the supplier is acceptable.
In the event of any conflict between this CONTRACT and the SPECIFICATIONS and
the PLAN, the provisions of this CONTRACT shall prevail. In the event of any
conflict between the SPECIFICATIONS and the PLAN, The provisions of the
SPECIFICATIONS shall prevail.
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[MARKED TEXT OMITTED PURSUANT TO AN APPLICATION FOR AN ORDER
FOR CONFIDENTIAL TREATMENT BY CARNIVAL CORPORATION]
(b) Speed
The VESSEL's speed shall be as follows:
(i) Trial Speed
With the propulsion motors developing each XX MW at about XXX RPM and
at XXXX Meter draft and other conditions as per paragraph 1.26. of the
SPECIFICATIONS: XXXX knots
(ii) Service Speed
With X diesel alternators 8ZAL40S and X diesel alternators 12ZAV40S
developing a total output not exceeding XXXX percent MCR, at XXX RPM,
and after allowing XXX MW for the VESSEL'S other electrical services,
the residual power shall enable the VESSEL to reach XXXX knots with a
margin of XX percent, at a draught of XXXXM.
(c) Building Site
The Building Site shall be the CONTRACTOR'S shipyard at Helsinki, Finland
provided that the CONTRACTOR may have parts of the VESSEL constructed at its
yard at Turku. The CONTRACTOR shall nevertheless be at liberty to carry out
work elsewhere provided that the main work of erection, assembly and
construction of the VESSEL shall take place at the Building Site aforesaid. In
the event that the forward half and the aft half of the hull are assembled and
constructed separately as independent units, the operation of joining the two
parts shall be carried out in a suitable drydock at Helsinki or Turku, to the
PURCHASER'S approval provided that the joining of the two halves may be carried
out afloat if the method and procedure to be used for this purpose are approved
by the PURCHASER.
(d) Yard Number, Marking of Materials
The VESSEL shall, for the purpose of identification only be known as Yard No.
488.
As soon as possible after the arrival at the Building Site, all materials,
machinery and other equipment intended to be incorporated in the VESSEL shall
be marked with the above Yard Number for the purpose of identification and
establishing that such materials, machinery and equipment belong to the VESSEL.
The CONTRACTOR may not use any such marked material, machinery, and equipment
for the construction of any other vessel without the approval of the PURCHASER,
such approval not to be unreasonably withheld. The CONTRACTOR may not use for
the construction of the VESSEL materials, machinery and other equipment marked
for use in
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the construction of any other vessel without the approval of the PURCHASER,
such approval not to be unreasonably withheld.
The CONTRACTOR is obliged to pay all deliveries promptly on or before delivery.
Upon the PURCHASER'S request, the CONTRACTOR shall supply proof of payment
having been properly effected as well as further evidence that it is under no
residual obligations towards its suppliers in respect of other deliveries.
(e) VESSEL'S Classification and Standard
The VESSEL shall comply with the laws, rules, regulations and enactments
published and in force on the date hereof as stated in the SPECIFICATIONS,
including also Stability Regulations for Passenger Vessels (April 1990) and
Fire Protection for Lifeboats and Rafts in way of windows and screens (SOLAS
74, as amended) to the requirements of the Classification Society and the
Panamanian Government. The Vessel shall also comply with the requirements of
the following:
(1) U.S.P.H including "Vessel Sanitation Programme - Operation Manual
(edition August 1989) and W.H.0 "Guide to Ship Sanitation"; and
(2) Solas Regulations and Wireless in relation to Global Marine Distress
Signal Systems; and
(3) Panamanian government regulations for registration of vessels under
Panamanian flag.
The VESSEL shall be built to class and under survey of Lloyd's
Register of Shipping and, if not otherwise stated in the
SPECIFICATIONS, in accordance with good shipbuilding practice. in
Scandinavia for new passenger cruise vessels of the type and general
characteristics, and in any event in no respect inferior to the
standards of, M.S. 'ECSTASY". Classification, survey and testing and
any other charges relating to the CONTRACTOR'S obligations and items
of supply under this CONTRACT shall be for the account of the
CONTRACTOR.
It is understood that the CONTRACTOR shall carry out such work as is
necessary in accordance with this CONTRACT so that the VESSEL on
arrival in the U.S.A. is approved by the United States Public Health
authorities.
(f) Decisions of the Classification Society
The decisions of the Classification Society shall be final and binding on both
contracting parties as to the VESSEL'S compliance or non-compliance with the
rules and regulations, observance of which is to be controlled by the said
Society.
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(g) Sub-contracting
Subject to the requirements of Article 1(a) the CONTRACTOR has the right to
sub-contract part of the work to third parties on the Building Site or
elsewhere.
ARTICLE 2: INSPECTION AND APPROVALS
(a) Inspection
The PURCHASER shall have the right to have the VESSEL and all engines,
machinery, outfit and equipment intended for her inspected during construction
by its authorized representative(s) to whom the CONTRACTOR shall grant free
access for such purpose during working hours to the VESSEL and to the
CONTRACTOR'S shipyard and workshops wherever the VESSEL is being built and/or
designed. The CONTRACTOR will obtain for the PURCHASER the right of access to
subcontractors' premises. The inspection will be at the PURCHASER's risk and
expense.
The PURCHASER'S authorized representative(s) whose name(s) and duties are to be
made known in advance, shall observe the works' rules prevailing at the
CONTRACTOR'S and the subcontractors premises. They shall address their remarks
exclusively to the CONTRACTOR'S appointed representative(s) whose name(s) shall
be made known to the PURCHASER.
Should the PURCHASER elect to entrust the inspection to firms or persons
outside its organization, such firms or persons and their duties shall be
subject to the CONTRACTOR'S prior approval.
(b) Effect of Approvals
Approval by the PURCHASER or the PURCHASER'S representative of inspections,
tests, trials, documents, or plans shall not relieve the CONTRACTOR of its
obligations under Article 1 of this CONTRACT.
ARTICLE 3: MODIFICATIONS
(a) Modifications
Either party may request the other in writing to make modifications to the
SPECIFICATIONS and/or PLAN and provide that the CONTRACTOR
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and the PURCHASER fully agree in writing within ten days from the dispatch of
the CONTRACTOR'S notification of any (a) appropriate adjustment of price; (b)
appropriate adjustment of delivery date; (c) appropriate adjustment of the
deadweight; (d) appropriate adjustment of speed requirements; and (e) any other
appropriate adjustment of this CONTRACT, the SPECIFICATIONS and the PLAN, the
CONTRACTOR will carry out such modifications.
The CONTRACTOR has the right to continue production on the basis of the
SPECIFICATIONS and the PLAN until agreement has been reached as above stated.
All agreed modifications and alterations shall be subject to the conditions of
this CONTRACT and the SPECIFICATIONS.
(b) Modifications by Regulatory Bodies and Classification Society
In the event that subsequent to the date hereof any modifications, deletions or
additions are made to the laws, rules, regulations and enactments applicable to
the VESSEL or their interpretation or their application (including withdrawal
of provisional approvals of the Classification Society and/or additional
requirements of said Society) as compared with the basis of this CONTRACT
and/or similar measures of other bodies as referred to in Article 1, paragraph
(e), and such modifications, deletions or additions are compulsory for the
VESSEL, the CONTRACTOR will effect them and will notify the (a) adjustment of
price; (b) adjustment of delivery date; (c) adjustment of deadweight; (d)
adjustment of speed requirements; and (e) any other adjustment of the CONTRACT,
SPECIFICATIONS and PLAN, all as may be appropriate in the circumstances.
The PURCHASER may require that the CONTRACTOR shall first apply for a formal
waiver of compliance with such modifications, deletions or additions from the
authority by whom the modifications, deletion" or additions have been
promulgated, should the PURCHASER consider that the operation of the VESSEL in
its intended service would permit of such waiver. In such agreement the
CONTRACTOR will fix a reasonable time limit after which if the waiver has not
beer obtained, the CONTRACTOR will go on with the required modifications,
deletions or additions. Any additional cost caused by the application for such
waiver whether or not obtained shall be for account of the PURCHASER and the
date of delivery of the VESSEL if actually delayed thereby shall be extended by
the time necessary as a result of the application for waiver.
Modifications by regulatory bodies and by the Classification Society which are
not compulsory for the VESSEL shall be treated as the PURCHASER'S modifications
according to paragraph (a) above but the CONTRACTOR will in any case advise the
PURCHASER of such modifications as soon as they are published and obtain the
PURCHASER'S approval before proceeding to make such modifications.
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(c) Payment of Adjustments of Price
The adjustments of price made under paragraphs (a) and (b) above shall be
settled in accordance with paragraph (f) of Article 7.
(d) Information
When required the CONTRACTOR shall furnish reasonable information relating to
the basis and method of determining adjustment of price and other effects of
modifications referred to in this Article.
ARTICLE 4: TRIALS
The VESSEL shall run the following tests and trials:
(1) Dock trials as specified in the SPECIFICATIONS.
(2) Official sea-trials as provided for in the SPECIFICATIONS
during which the trial speed, the propulsion machinery plant
output and the propeller revolutions shall be determined in
accordance with Article 1, paragraph (b)(i).
An endurance test as well as all other trials and tests
included in the sea trial program in the SPECIFICATIONS, shall
also be carried out with recording of measurements of all
parameters, enabling determination of performance relevant to
each test.
(3) All other trials specified in the SPECIFICATIONS.
Such speed runs and endurance test shall be run at the draft attainable by
ballasting the VESSEL with ballast water using tanks and compartments intended
for this purpose and as far as practicable the draft shall be as close as
possible to the corresponding draft at which tank model tests have been carried
out.
Should the speed trial draft aforementioned be other than the draft specified
in Article 1 (b) (i), the speed, the main engine output and the revolutions
corresponding to the latter draft shall be determined by the Netherlands Model
Basin in Wageningen by means of data from their model tests on the basis of the
results recorded at the sea trials.
All trials and measurements will be conducted in a manner and to an extent as
prescribed in a detailed schedule based on the SPECIFICATIONS.
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The methods to be used will be selected by the CONTRACTOR to suit the VESSEL'S
trial trip programme to the approval of the PURCHASER.
The CONTRACTOR has the right to subcontract speed and power measurements to an
independent model basin or research institute. However, the PURCHASER will be
kept fully informed and allowed to observe and ascertain measurements recorded
during the trials as if the CONTRACTOR had carried out the tests with its own
personnel.
Should conditions which properly qualify to delay delivery as provided in
Article 6 paragraph (e) prevent the CONTRACTOR from carrying out properly the
official trial on the day scheduled therefore, the CONTRACTOR has the right: to
postpone the trial or such part of it as deemed necessary. In such case the
CONTRACTOR shall be entitled to an extension of the VESSEL'S delivery time
covering the whole period of postponement.
The CONTRACTOR shall have the right to repeat any trial whatsoever after giving
reasonable notice to the PURCHASER.
All expenses for the trials and adjustments of all the VESSEL'S equipment shall
be borne by the CONTRACTOR who during the sea trials will provide the necessary
crew at its own expense. If, during any sea trial, any breakdowns occur
entailing interruption or irregular performance which can be repaired by the
normal means available on board, the trial shall be continued after repairs and
be valid in all respects.
However, should the VESSEL require to return to a port to enable the breakdown
to be remedied, a further trial shall be undertaker if necessary at sea, to
prove the outstanding performance and complete demonstrations.
The CONTRACTOR shall give the PURCHASER thirty days notice of the anticipated
date of the first sea trials.
Within seven (7) days from the completion of the sea trial or the above further
trial, the CONTRACTOR shall present the PURCHASER with a full set of results of
the tests carried out during the sea trials and the PURCHASER shall give the
CONTRACTOR within 3 days from the receipt of the results a notice in writing,
or by telex or telefax conformed in writing, of completion and acceptance of
the trial run, advising whether the PURCHASER considers that the results of the
trial run indicate conformity of the VESSEL to this Contract the SPECIFICATIONS
and the PLAN.
In the event that the PURCHASER rejects the results of the trial run as not
conforming to this CONTRACT or to the SPECIFICATIONS or the PLAN, the PURCHASER
shall indicate in its notice of rejection in what respect the VESSEL, or any
part or equipment thereof, does not conform to this CONTRACT and/or the
SPECIFICATIONS and/or the PLAN.
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In the event that the PURCHASER fails to notify the CONTRACTOR as aforesaid of
the acceptance of or the rejection, together with the reason therefor, of the
trial within the period as provided above, the PURCHASER shall be deemed to
have accepted the trial run of the VESSEL.
Acceptance of the results of the trial run as above provided shall be final and
binding so far as conformity of the VESSEL to the CONTRACT and the
SPECIFICATIONS and the PLAN to the extent demonstrated on such trial is
concerned and shall preclude the PURCHASER from refusing formal delivery of the
VESSEL as hereinafter provided, on the grounds of non conformity of the VESSEL
in respect of items whose conformity has been demonstrated and accepted during
the trial run, if the CONTRACTOR complies with all other requirements for
delivery as provided in this CONTRACT.
Should any fuel oil lubricating oil, greases and ship's stores, including fresh
water furnished by the CONTRACTOR for the sea trial remain on board the VESSEL
at the time of acceptance thereof by the PURCHASER, the PURCHASER agrees to buy
the same from the CONTRACTOR at the price reasonably paid by the CONTRACTOR and
evidenced by invoices of the supplier and payment by the PURCHASER shall be
effected in accordance with paragraph (f) of Article 7.
ARTICLE 5: GUARANTEE FOR SPEED, DEADWEIGHT AND FUEL CONSUMPTION
Subject to the provision contained in Article 7 (e) the rights and obligations
of the CONTRACTOR and PURCHASER in regard of the VESSEL'S trial speed,
deadweight and consumption of fuel of the propulsion plant are delimited as
follows:
(a) Speed
For the purpose of determining the VESSEL'S actual trial speed, the speed of
the VESSEL recorded on the official sea trials under Article 4 shall be
adjusted in accordance with Article 4 as if the official sea trials had been
carried out under the conditions specified in Article 1, paragraph (b) (i) and
paragraph 1.2.6 of the SPECIFICATIONS. If the actual trial speed so computed
is less than the adjusted trial speed under Article 1, paragraph (b) (i), the
CONTRACTOR shall pay to the PURCHASER as liquidated damages and not by way of
penalty the following amounts:
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[MARKED TEXT OMITTED PURSUANT TO AN APPLICATION FOR AN ORDER
FOR CONFIDENTIAL TREATMENT BY CARNIVAL CORPORATION]
- - for the first two tenths (2/10ths) of a knot of such speed deficiency:
XXXXXXX
- - U.S. $XXXXXX for the third complete tenth of one knot deficiency and
that amount increased by U.S. $XXXXXX for each successive complete one
tenth of a knot of such deficiency, save and except that the
CONTRACTOR shall have the right to remedy the deficiency and repeat
the trial.
If the VESSEL's trial speed determined or computed as provided in this
paragraph (a) is more than one knot below the adjusted trial speed under
Article 1, paragraph (b)(i), the PURCHASER, as an alternative to receiving the
above mentioned liquidated damages, shall have the option to terminate this
contract, with the consequences provided for in Article 8 and Article 11, save
and except that the CONTRACTOR shall have the right to remedy the deficiency
and repeat the trial.
Should the actual trial speed of the VESSEL determined or computed as provided
in this paragraph (a) be greater than the adjusted trial speed under Article 1,
paragraph (b) (i), the PURCHASER shall pay to the CONTRACTOR as premiums the
following amounts:
- - for the first two tenths (2/10ths) of one knot of extra speed: XXXXXXX
- - U.S. $XXXXXX for the third complete tenth of one knot of extra speed
and that amount increased by U.S. $XXXXXX for each successive complete
one tenth of a knot up to a maximum extra speed of one half of one
knot.
(b) Deadweight
If the VESSEL'S deadweight determined as stated in the SPECIFICATIONS is more
than XXX metric tons less than the deadweight specified in Article 1, then the
CONTRACTOR shall pay to the PURCHASER as liquidated damages and not by way of
penalty an amount of U.S. $XXXXX for each full XXX metric tons of such
deficiency in excess of XXX metric tons, save and except that the CONTRACTOR
shall have the right to remedy the deficiency.
If the VESSEL's deadweight determined as stated in the SPECIFICATIONS is more
than XXX metric tons less than the deadweight specified in Article 1, the
PURCHASER, as an alternative to receiving the above mentioned liquidated
damages, shall have the option to terminate this CONTRACT with the consequences
provided for in Article 8 and Article 11, save and except that the CONTRACTOR
shall have the right to remedy the deficiency.
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[MARKED TEXT OMITTED PURSUANT TO AN APPLICATION FOR AN ORDER FOR
CONFIDENTIAL TREATMENT BY CARNIVAL CORPORATION]
(c) Fuel Consumption
For the main propulsion plant a shop test shall be carried out in accordance
with the SPECIFICATIONS. During such shop test the specified fuel consumption
shall be ascertained and corrected to the design parameters.
The shop test shall be run on heavy fuel oil with each diesel engine developing
XX% MCR at XXX revolutions. The measured fuel consumption shall be corrected
to a reference lower calorific value of XXXXX kilojoules per kg and ISO
standard conditions. The fuel consumption of the main propulsion plant so
corrected shall not exceed XXXXXXXXXXXXXXXXX for engines type 12ZAV40S and
XXXXXXXXXXXX for engines type 8ZAL40S.
With respect to any of the engines, should the corrected fuel consumption be in
excess of XXX percent of XXXXXXXXXXXXXXXXX for engines type 12ZAV40S and
XXXXXXXXXXXXXXXXX for engines type 8ZAL40S, the CONTRACTOR shall pay to the
PURCHASER, as liquidated damages and not by way of penalty, an amount of U.S.
$XXXXXX for each full XXX percent in excess of XXX percent of XXXXXXXXXXXXXXXXX
for engines type 12ZAV40S and XXXXXXXXXXXXXXXXX for engines type 8ZAL40S, save
and except that the CONTRACTOR shall have the right to remedy any defect
causing such excessive fuel consumption and repeat the trial.
With respect to any of the engines, should the corrected fuel consumption be in
excess of XXX percent of XXX XXXXXXXXXXXXX for engines type 12ZAV40S and
XXXXXXXXXXXXXX for engines type 8ZAL40S, the PURCHASER, as an alternative to
receiving the above mentioned liquidated damages shall have the option to
terminate this CONTRACT with the consequences provided for in Article 8 and
Article 11, save and except that the CONTRACTOR shall have the right to remedy
any defect causing such excessive fuel consumption and repeat the trial.
ARTICLE 6: DELIVERY OF THE VESSEL
(a) Delivery Date and Place of Delivery
The VESSEL shall be delivered to the PURCHASER at the Building Site or other
agreed place.
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[MARKED TEXT OMITTED PURSUANT TO AN APPLICATION FOR AN ORDER FOR
CONFIDENTIAL TREATMENT BY CARNIVAL CORPORATION]
The date for delivery of the VESSEL (the "Delivery Date") shall be 31st October
1995 subject to permissible extensions as provided in this CONTRACT.
Six (6) months prior to the date on which the CONTRACTOR expects the VESSEL to
be ready for delivery the CONTRACTOR shall give notice to the PURCHASER in
writing (the "Delivery Notice") specifying the actual expected delivery date.
The PURCHASER shall promptly take delivery of the VESSEL when properly
completed in accordance with this CONTRACT and shall with reasonable dispatch
as applies to a passenger cruise ship remove her from the CONTRACTOR'S shipyard
provided that the PURCHASER shall not be obliged to take delivery of the VESSEL
before 31st October 1995 nor before the date specified in the Delivery Notice
(b) Liquidated Damages for Delayed Delivery
If the VESSEL is not delivered (duly completed in accordance with this
CONTRACT, the SPECIFICATIONS and the PLAN) on or before the Delivery Date (as
extended by virtue of the provisions of this CONTRACT specifically permitting
such extension), the CONTRACTOR shall pay to the PURCHASER by way of liquidated
damages and not by way of penalty the amount of UNITED STATES DOLLARS
XXXXXXXXXX XXXXXXXX (U.S. $XXXXXX) for each full calendar day of delay
following the Delivery Date as so extended.
(c) Termination for Delay
If the VESSEL is not delivered (duly completed in accordance with
this CONTRACT, the SPECIFICATIONS and the PLAN), by the date
falling twelve (12) months after the Delivery Date (as extended by virtue of
the provisions of this CONTRACT expressly permitting such extension), the
PURCHASER may terminate this CONTRACT by notice to the CONTRACTOR with the
consequences provided for in Article 8 and Article 11. On such valid
termination the CONTRACTOR shall forthwith also pay to the PURCHASER the
liquidated damages payable by virtue of paragraph (b) above as if the VESSEL
had been delivered on the date on which this CONTRACT is terminated by the
PURCHASER under this paragraph.
If the VESSEL is not delivered (duly completed in accordance with the CONTRACT
and the SPECIFICATION) by 31st March 1997 then, notwithstanding the provisions
of paragraphs (d) and (e) below which would otherwise operate to permit the
Delivery Date to be extended, the PURCHASER may terminate this CONTRACT by
notice to the CONTRACTOR with the consequences provided for in Article 8 and
Article 11. on such valid termination the CONTRACTOR shall forthwith
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also pay to the PURCHASER the liquidated damages payable by virtue of paragraph
(b) above as if the VESSEL had been delivered on the date on which this
CONTRACT is terminated by the PURCHASER under this paragraph.
(d) Permissible Extensions due to "Force Majeure"
Should the CONTRACTOR be prevented form having the VESSEL constructed or
delivered by the Delivery Date owing to - Acts of God; engagement in war or
other hostilities, civil war, civil commotions, riots or insurrections;
requirements of civil or military authorities in contemplation of war;
blockades; embargoes, vandalism; sabotage; epidemics; strikes; lockouts;
officially agreed reduction of working hours relating to the Finnish workforce
as a whole; earthquakes; landslides; floods; failure of electric current for a
period of more than three working days; damage by lightning; explosions,
collisions, stranding or fires; damage to the VESSEL and time taken to repair
such damage; shortage of materials and equipment or inability to obtain
delivery thereof, provided that such materials and equipment at the time of
ordering could reasonably be expected by the CONTRACTOR to be delivered in
time; defects in materials and equipment such as castings or forgings which
could not have been detected by the CONTRACTOR or its subcontractors using
reasonable care; delays caused by delay of the Classification Society or other
bodies whose documents are required in issuing such documents; delays caused by
events similar to the foregoing; the effect of the foregoing on the
CONTRACTOR'S other commitments; then and in any such case the Delivery Date of
the VESSEL shall, subject to paragraphs (e) and (f) below, be extended by the
number of calendar days of delay incurred by the CONTRACTOR in completing or
delivering the VESSEL in consequence of any of these events.
(e) Definitive Notice of Delivery
Following the giving of the Delivery Notice by the CONTRACTOR pursuant to
paragraph (a) above the only events which shall be permitted to extend the
Delivery Date (as previously properly extended by virtue of other provisions of
this CONTRACT permitting such extension) shall (subject to paragraph (f) below)
be: Acts of god, engagement in war or other hostilities, civil wars, civil
commotion, riots or insurrections requirements of military authorities in
contemplation of war, blockades, embargoes, vandalism, sabotage, epidemics,
earthquakes, landslides, flood, damage by lightning, explosions, collisions,
stranding, fires or nationwide strikes or lockouts either general or affecting
nationwide a particular sector of the labor force.
(f) Conditions for Claims for Permissible Delays
Not later than 7 days from the date of commencement of any of the above
contingencies on account of which the CONTRACTOR claims that
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it is entitled to an extension of the Delivery Date, the CONTRACTOR shall
provide the PURCHASER with telefax advice particularizing the date such
contingency commenced and the reasons therefor and the nature thereof, the
estimated duration thereof and the action which is being taken by the
CONTRACTOR to overcome the effect of the contingency. If any such contingency
continues for a period in excess of 30 days the CONTRACTOR shall, at regular
fortnightly intervals thereafter, continue to keep the PURCHASER advised by
delivery to the PURCHASER of further statements containing the particulars
specified above. Within 7 days after the CONTRACTOR becomes aware that such
contingency has ended the CONTRACTOR shall specify the period of time by which
it claims the Delivery Date is to be extended by reason of delay due to such
contingency.
The CONTRACTOR shall not be entitled to claim any extension of the Delivery
Date in respect of any particular delay unless:
(1) The CONTRACTOR has given all the proper notices and statements
required by this paragraph (f) in relation to that particular
item of delay; and
(2) that particular item of delay has not in any way been caused
or contributed to by any error, neglect or omission on the
part of the CONTRACTOR; and
(3) the CONTRACTOR has, since the date of commencement of the
contingency in question, taken all reasonable steps to remove
the cause of delay and to mitigate its effect on the delivery
of the VESSEL; and
(4) the cause of delay could not reasonably have been foreseen by
the CONTRACTOR at the date of this CONTRACT.
In the event of there being any dispute between the parties under this Article
the burden of proof shall be upon the CONTRACTOR to establish the facts
entitling it to an extension of the Delivery Date and that all requirements
specified in this paragraph have been fully satisfied.
(g) Termination of the CONTRACTOR'S Responsibilities
On delivery of the VESSEL to the PURCHASER all risk and every responsibility
for the safety and generally for the condition of the Vessel is transferred to
the PURCHASER, and thereafter all responsibilities on the part of the
CONTRACTOR shall cease with the exception of the guarantee obligations provided
for in Article 12 hereof and the obligations of the parties under Article 8(a).
If it is not practicable before delivery for the CONTRACTOR to demonstrate the
contractual performance of any of the specified equipment or the contractual
performance of any of the specified technical systems of the VESSEL in their
intended operating
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conditions, the CONTRACTOR will demonstrate such performance as soon as
practicable, and if not practicable within 180 days of delivery compliance or
non-compliance shall be determined by calculations. In case of deficiencies in
performance the CONTRACTOR will remedy such deficiencies in performance under
the guarantee contained in Article 12.
(h) Protocol of Delivery and Acceptance
At the delivery and acceptance of the VESSEL the PURCHASER and the CONTRACTOR
shall execute, in duplicate, a Protocol of Delivery and Acceptance one original
copy of which is to be retained by each party.
ARTICLE 7: PRICE AND PAYMENT
(a) Contract Price
The PURCHASER shall pay to the CONTRACTOR the CONTRACT price of FINNISH MARKKA
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX (FIM XXXXXXXXXXXXX), inclusive of
building period financing cost.
(b) Installments
Payment of the CONTRACT Price shall be made by the PURCHASER to the CONTRACTOR
by installments as follows:
- XX% equal to FIM XXXXXXXXXX on the date of signature of this
CONTRACT;
- XX% equal to FIM XXXXXXXXXX on 1st XXXXXXXXXXXXXX;
- XX% equal to FIM XXXXXXXXXX on XXXXXXXXXXXXXXXXXX;
- XX% equal to FIM XXXXXXXXXX on XXXXXXXXXXXXXXXXXX;
- XX% equal to FIM XXXXXXXXXXXXX on XXXXXXXXXXXXXXXXX or, if
after, on delivery of the VESSEL duly completed in accordance
with this CONTRACT, the SPECIFICATIONS and the PLAN.
(c) Payment Procedures
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Except for the first installment the CONTRACTOR shall notify the PURCHASER at
least 10 days in advance of the estimated dates of the installment payments
falling due.
All payments to the CONTRACTOR are to be made in Finnish Markka for same day
value at a bank in Helsinki to be designated by the CONTRACTOR without any
deduction whatsoever on the dates on which the payments are due as aforesaid.
Expenses for remitting payments and any other expenses connected with such
payments shall be for the account of the PURCHASER.
If for any reason the PURCHASER cannot take delivery of the VESSEL on the date
the CONTRACTOR has notified that the VESSEL will be ready for delivery, the
PURCHASER shall nevertheless be liable to make full and final payment on that
date, provided the VESSEL is tendered in accordance with the terms of this
CONTRACT.
(d) Payment for Modification
The sum due for modifications under Article 3 of this CONTRACT shall be paid by
or credited to the PURCHASER or as the case may be to the CONTRACTOR on
delivery.
(e) Payment for Liquidated Damages and Premiums
Any amount of liquidated damages or any premiums under Articles 5 and 6 shall
be calculated and determined on delivery of the VESSEL or, on termination in
accordance with Article 6(c) or 11(b) and the balance (of one over the other)
shall be paid to the party entitled thereto at the delivery of the VESSEL or,
in the event of termination of this CONTRACT in accordance with Article 6(c) as
provided herein, provided that (notwithstanding any other provision in this
CONTRACT to the contrary) the net amount payable under this paragraph shall not
exceed ten per cent of the CONTRACT Price referred to in paragraph (a) of this
Article.
Payment of liquidated damages under Article 5 and/or 6 of this CONTRACT shall
be to the exclusion of any other claims in respect of the matters giving rise
to such payment except that this provision shall not affect the rights of the
PURCHASER under Article 6 (c) and Article 11 of this CONTRACT or the
alternative right of the PURCHASER to terminate this CONTRACT in the
circumstances provided in Article 5 of this CONTRACT.
(f) Prompt Payment
The PURCHASER shall not delay any payment of the Contract Price in the event of
any disagreement as to the amount of extras, liquidated damages or premiums, or
in the event of other exceptions or claims the PURCHASER may have asserted or
may intend to assert against the CONTRACTOR, whether in connection with this
CONTRACT or otherwise
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without prejudice to the PURCHASER'S right to apply subsequently to
arbitration.
(g) Bank Guarantee
On the date of signature of this CONTRACT in respect of the first installment
and not less than five (5) business days before the date on which the PURCHASER
is obliged to make payment to the CONTRACTOR of respectively the second, third
and fourth installments of the contract Price as provided in Article 7(b) and
as a condition precedent to the obligation of the PURCHASER to make payment of
such installments, the CONTRACTOR shall deliver to the PURCHASER a bank
guarantee of payment by the CONTRACTOR of all amounts which the CONTRACTOR may
become liable to pay to the PURCHASER UNDER Article 11(a) of this CONTRACT.
Each such guarantee shall be issued by a first class bank acceptable to the
PURCHASER in the form of Exhibit A hereto and shall be authenticated in such
manner as the PURCHASER m a y require. The PURCHASER and the CONTRACTOR shall
share equally the cost of providing and maintaining such guarantees. Each
guarantee shall be for an amount not less than XXXXXXXXXXXXXXXXXX FINNISH
MARKKA (FIM XXXXXXXXXX) except the first which shall be for an amount not less
than XXXXXXXXXXXXXXXX FINNISH MARKKA (FIM XXXXXXXXXX) and the second which
shall be for an amount not less than XXXXXXXXXXXXX MILLION FINNISH MARKKA (FIM
XXXXXXXXXX)
(h) The CONTRACTOR shall provide to the PURCHASER at four monthly
intervals following the date of this CONTRACT statements of the financial
condition of the CONTRACTOR in such form and substance as the PURCHASER may
reasonably request to enable the PURCHASER to monitor the current financial
condition of the CONTRACTOR during the construction of the VESSEL.
ARTICLE 8: PROPERTY
(a) General Plans, Specification and Working Drawings
All rights in the SPECIFICATIONS, plans and working drawings, technical
descriptions, calculations, test results and other data, information and
documents concerning the design and constructions of the VESSEL shall belong to
the CONTRACTOR before actual delivery and after actual delivery shall belong to
the PURCHASER provided always
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that the CONTRACTOR shall be entitled to use the same to the extent of the hull
form and all parts below the main accommodation decks.
The PURCHASER shall have the right to use the SPECIFICATIONS, plans and working
drawings, technical descriptions, calculations, test results and other data,
information and documents concerning the design and the construction of the
VESSEL prior to delivery of the VESSEL with the consent of the CONTRACTOR, such
consent not to be unreasonably withheld and to be given promptly following the
PURCHASER's request.
(b) Title to the VESSEL
As from signing of this CONTRACT the PURCHASER has title to:
(1) All materials and equipment for building of the VESSEL
purchased from and delivered by suppliers and subcontractors.
The title to all such materials and equipment for building of
the VESSEL shall be with the PURCHASER already before such
materials and equipment arrive at the shipyard.
(2) All materials and equipment out of the CONTRACTOR's own stock
allocated for the construction of the VESSEL which for this
purpose shall be stored separately and marked as early as
possible.
(3) Parts manufactured from the materials listed above.
(4) The VESSEL itself as it is in the course of progressive stages
of construction, together with equipment installed.
Until the Contract Price (as adjusted) has been paid in full the PURCHASER may
not at any time, prior or subsequent to the delivery of the VESSEL transfer,
whether finally or conditionally, or mortgage or hypothecate the VESSEL without
the CONTRACTOR'S written consent in each particular case.
Subject to the provisions of Article 11 this paragraph shall in no way impair
the CONTRACTOR'S right to retain the VESSEL until the PURCHASER has complied
with its obligations under Article 7 of this CONTRACT.
(c) Effect of Termination on the Title to the VESSEL under Construction
If the CONTRACTOR justly terminates this CONTRACT, the CONTRACTOR becomes the
sole owner of the VESSEL.
If the PURCHASER justly terminates this CONTRACT, the PURCHASER thereby waives
its right to the VESSEL, provided that all amounts
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payable or repayable to the PURCHASER by the CONTRACTOR on such termination in
accordance with this CONTRACT shall have been paid or repaid or security
satisfactory to the PURCHASER shall have been provided for such payment or
repayment.
ARTICLE 9: INSURANCE
The VESSEL and all materials, machinery and other equipment belonging to the
VESSEL and within the precincts of the Building Site shall until delivery of
the VESSEL (including during trials) be insured by the CONTRACTOR at the
CONTRACTOR'S expense in the joint names of the CONTRACTOR and the PURCHASER
against all risks customarily insured against in the Finnish shipbuilding
industry and in accordance with and subject to the terms of the usual
construction policy for a total of not less than the aggregate of (1) the
amount for the time being paid by the PURCHASER to the CONTRACTOR in respect of
the VESSEL and (2) interest thereon at the rates specified in Article 11 from
the date such payment was made to the CONTRACTOR and (3) the value of equipment
or materials supplied by the PURCHASER and present within the precincts of the
Building Site or already installed in the vessel. If considered necessary by
the CONTRACTOR or if required by the PURCHASER, war risks insurance for not
less than the Contract Price is to be effected by the CONTRACTOR up to the date
of delivery to the extent that such insurance is obtainable on the London
insurance market provided, however, that the CONTRACTOR shall effect war risk
insurance at its own expense during sea trials.
In the event of the VESSEL and/or such materials etc. as aforesaid sustaining
damage, including war damage, before delivery of the VESSEL then any monies
received in respect of any insurance effected under this Article shall be
applied by the CONTRACTOR in making good such damage with all due despatch
during ordinary working hours in a reasonable and workmanlike manner and the
PURCHASER shall not on account of any such damage or any repair thereof be
entitled to object to the VESSEL or to make any claim for alleged consequential
loss or depreciation provided that such damage is made good in accordance with
this contract, the SPECIFICATIONS and PLAN as if it was the VESSEL's new
construction.
Underwriters are entitled to settle claims concerning repairable damage to the
VESSEL directly with the CONTRACTOR, and make all payments on these claims
directly to the CONTRACTOR.
Should the VESSEL at any time from any cause become an actual total loss or an
agreed or compromised constructive total loss under the
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insurance policy, this CONTRACT shall thereupon absolutely cease and terminate
without any liability whatsoever on the part of the CONTRACTOR provided that
the CONTRACTOR has complied with its obligations under the preceding provisions
of this Article. In the event of such total loss insurance monies shall be
paid to the PURCHASER for reimbursement (1) of the amounts paid by the
PURCHASER to the CONTRACTOR hereunder and (2) interest thereon at the rates
specified in Article 11 from the dates such payments were made and (3) the
value of equipment and materials supplied by the PURCHASER and within the
precincts of the Building Site or installed on the VESSEL at the time of such
total loss; any balance shall belong to the CONTRACTOR. Under no circumstances
shall the CONTRACTOR be liable to replace the VESSEL.
The CONTRACTOR'S liability to the PURCHASER in respect of damage including war
damage - or in respect of the actual or constructive total loss of the VESSEL,
shall not in any event extend further or otherwise than provided in this
Article.
The PURCHASER agrees to notify the CONTRACTOR before each item of equipment or
material supplied by the PURCHASER is delivered to the Building Site and to
advise the CONTRACTOR of the value thereof.
ARTICLE 10: DEFAULTS BY THE PURCHASER
(a) Suspension/Termination by the CONTRACTOR
If any of the following events should occur:
(1) the Purchaser fails to pay to the CONTRACTOR any of the first,
second, third, fourth and fifth installments of the CONTRACT
Price when such installments become due and payable under the
provisions of Article 7 hereof; or
(2) the PURCHASER fails to take delivery of the VESSEL when the
VESSEL is duly tendered for delivery by the CONTRACTOR under
the provisions of Article 6 hereof; or
(3) a bona fide petition is filed and is not dismissed within
thirty (30) days, or an effective resolution is passed for the
winding up of the PURCHASER (other than for the purpose of a
reconstruction or amalgamation which has received the prior
written approval of the CONTRACTOR); or
(4) a receiver is appointed of the undertaking or property of the
PURCHASER; or
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(5) the PURCHASER suspends payment of its debts or ceases to carry
on its business or makes any composition with its creditors or
is declared bankrupt or goes into liquidation.
(6) any obligation of the PURCHASER for borrowed money in a
principal amount exceeding USD $XXXXXXXXXX is properly
declared immediately due and payable by the creditor in
respect thereof by reason of the PURCHASER'S default.
Then:
(a) the delivery date shall be automatically postponed for a
period of continuance of such event in excess of two (2) days.
(b) If such event continues for a period of fifteen (15) days the
CONTRACTOR shall have the option to suspend the CONTRACTOR'S
obligations under this CONTRACT until such event has ceased.
(c) If any of the events set out in sub-paragraphs (1) - (3)
above, continues for a period of thirty (30) days after
notice, to the PURCHASER or if any of the events set forth in
sub-paragraphs (4), (5), or (6) occurs, the CONTRACTOR may, at
its option, terminate this CONTRACT by giving notice of such
effect to the PURCHASER by fax confirmed in writing.
(b) Interest
Should the PURCHASER be in default in payment of any of the first, second,
third or fourth installments of the CONTRACT Price and/or other amounts due
under this CONTRACT on or before delivery of the VESSEL, then the PURCHASER
shall pay to the CONTRACTOR as from the due date interest thereon at the rate
which is two (2) per cent per annum above the rate certified by Union Bank of
Finland to be the rate at which deposits of Finnish Markka can be obtained by
Union Bank of Finland to fund the defaulted amount from the London Interbank
Eurocurrency market for such periods as may be reasonable in the circumstances.
In case the PURCHASER shall fail to take delivery of the VESSEL as provided
above in this Article, the PURCHASER shall be deemed in default as regards the
fifth installment of the contract price and shall pay interest thereon at the
rate aforesaid from and including the day on which the VESSEL is tendered for
delivery by the CONTRACTOR.
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(c) CONTRACTOR'S Rights on Termination
(1) In the event of such termination of this CONTRACT, the
CONTRACTOR shall be entitled to retain any installment or
installments of the contract price theretofore paid by the
PURCHASER to the CONTRACTOR on account of this CONTRACT to the
extent of proved damages and losses including costs and
expenses permitted by law.
(2) In the event of termination of this CONTRACT as provided in
this Article 10, the CONTRACTOR 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 public or private sale on
such terms and conditions as the CONTRACTOR thinks fit without
being answerable for any loss or damage except as provided in
paragraph (4) below.
(3) In the event of the sale of the VESSEL in its completed state,
the proceeds of sale received by the CONTRACTOR shall be
applied firstly to payment of all proven incidental damages
and losses permitted by law attending such sale, and then to
payment of all unpaid installments of the contract price and
interest on such installments at the rate as provided for
above from the respective due dates thereof to the date of
application.
(4) In the event of sale of the VESSEL in its incomplete state,
the proceeds of sale received by the CONTRACTOR shall be
applied firstly to all proven incidental damages and losses
permitted by law attending such sale, and then to payment of
all costs of construction of the VESSEL and compensation to
the CONTRACTOR for a loss of reasonable profit due to the
termination of this CONTRACT together with interest at the
rate as provided for above, less the installments retained by
the CONTRACTOR.
(5) In either of the above events of sale, if the proceeds of sale
exceed the total of amounts to which such proceeds are to be
applied as aforesaid, the CONTRACTOR shall promptly pay the
excess to the PURCHASER without interest.
(6) If the proceeds of the sale are insufficient to pay to the
CONTRACTOR such total amounts payable as aforesaid, the
PURCHASER shall promptly pay the deficiency to the CONTRACTOR
upon request.
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ARTICLE 11: DEFAULTS BY THE CONTRACTOR
(a) Termination and Reimbursement and Liquidated Damages
If, in accordance with any of the provisions of Article 5 or 6 or paragraph (b)
of this Article, the PURCHASER properly exercises its option to terminate this
CONTRACT, then the CONTRACTOR shall:
(1) return to the PURCHASER all equipment and material supplied by
the PURCHASER or pay to the PURCHASER the value thereof and
pay to the PURCHASER the amount of consulting, engineering,
architectural and similar fees and expenses incurred by the
PURCHASER in connection with the construction of the VESSEL up
to a maximum of XXXXXXXXXX Finnish Markka; and
(2) pay to the PURCHASER any accumulated liquidated damages
payable under Article 6(c); and
(3) repay to the PURCHASER in Finnish Markka the amount of all
moneys paid by the PURCHASER for or on account of the CONTRACT
Price of the VESSEL together with interest calculated from the
respective dates such amounts were paid by the PURCHASER to
the CONTRACTOR up to the date of repayment thereof at the rate
certified by Union Bank of Finland, Ltd. to be the rate paid
by the Union Bank of Finland, Ltd. to depositors for deposits
of amounts equal to the installments paid by the PURCHASER for
the periods from receipt thereof by the CONTRACTOR to the date
of repayment.
The CONTRACTOR'S liability in the event of such termination shall be limited to
the above which the parties hereto reasonably estimate to be the amount of the
loss which will be sustained by the PURCHASER in the event that this CONTRACT
is terminated by the PURCHASER in accordance with Article 5 or 6 hereof or
paragraph (b) of this Article.
(b) Termination on Bankruptcy, Etc,
In any of the following events:
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(1) a bona fide petition is filed and is not dismissed within thirty (30)
days or an effective resolution is passed for the winding up of the
CONTRACTOR or any other similar proceedings with similar effect on the
CONTRACTOR are instituted in Finland affecting the CONTRACTOR (other
than for the purpose of a reconstruction or amalgamation which has
received the prior written approval of the PURCHASER); or
(2) the CONTRACTOR merges with any other entity without the prior written
approval of the PURCHASER;
(3) the CONTRACTOR ceases to be controlled by Kvaerner A/S;
(4) a receiver is appointed of the undertaking or property of the
CONTRACTOR; or
(5) the CONTRACTOR suspends payment of its debts or threatens to do so or
ceases to carry on its business or makes any composition with its
creditors or convenes a meeting of its creditors to propose such
composition or is declared bankrupt or goes into liquidation; or
(6) the construction of the VESSEL is suspended for a period of more than
thirty days for reasons other than any of the events specified in
Article 6 (d) or, if applicable, Article 6 (e) and it is apparent that
the CONTRACTOR will be unable to fulfill its obligations hereunder; or
(7) there is a material adverse change in the financial condition of the
CONTRACTOR;
(8) the CONTRACTOR fails to provide any of the guarantees relating to the
first, second, third and fourth installments of the CONTRACT Price
payable in accordance with Article 7(b) within thirty (30) days of the
date on which such guarantee should otherwise have been delivered to
the PURCHASER;
(9) the CONTRACTOR fails to comply with its obligations under Article 7
(h) and such default continues for a period of fourteen days after the
PURCHASER gives notice to the CONTRACTOR requiring such default to be
remedied.
Then:
the PURCHASER may immediately (without being bound thereto) terminate
this CONTRACT by giving notice in writing to the CONTRACTOR.
(c) The PURCHASER'S Right to Take Possession
If in accordance with the provisions of paragraph (b) above or Article 6 (c),
the PURCHASER is entitled to terminate this CONTRACT
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but does not do so, then the PURCHASER shall have an optional right after
giving notice to the CONTRACTOR to take possession of the VESSEL in her then
state and all parts, plans, materials, machinery and equipment appropriated to
the VESSEL and remove the same from the CONTRACTOR'S yard. The PURCHASER
agrees that it will, on taking possession and in consideration of the
CONTRACTOR releasing its lien on the VESSEL, pay to the CONTRACTOR,
XXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXX FINNISH MARKKA less the aggregate
of:
(1) the total amount of the installments of the CONTRACT Price
paid by the PURCHASER under Article 7(a) of this CONTRACT; and
(2) the reasonable estimate cost of completing the VESSEL in the
CONTRACTOR'S yard or at another shipyard and of removing the
VESSEL to such other shipyard.
If the actual cost of completing the VESSEL exceeds the estimated cost the
CONTRACTOR shall pay the difference to the PURCHASER on completion of the
VESSEL. If the actual cost of completing the vessel is less than the estimate
cost the PURCHASER shall pay the difference to the CONTRACTOR on completion of
the VESSEL.
(d) Notice of bankruptcy filing
The CONTRACTOR shall not take any steps to obtain the appointment of bankruptcy
trustees under the relevant provisions of Finnish bankruptcy law without first
giving to the PURCHASER at least 30, days notice of its intention to do so.
ARTICLE 12: GUARANTEE
(a) Extent of Guarantee
The CONTRACTOR shall remedy at the Building Site or at any other yard
controlled by the CONTRACTOR and in normal working hours, by repairing or if
necessary replacing,
(1) any defect notified in writing by the PURCHASER on the
VESSEL'S delivery; and
(2) any defect due to faulty design, bad workmanship or use of
defective material and not apparent on delivery which becomes
apparent during the period of XXXXXXXXXXXXXXXXXX
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from the date of delivery of the VESSEL provided the defect is
notified in writing as soon as reasonably practicable after its
discovery.
If for operational reasons the guarantee drydocking cannot reasonably be
carried out before the expiration of the said XXXXXX XXXXX period, then in
relation to defects not reasonably discoverable without such drydocking the
guarantee period hereunder shall, subject to paragraph (d) of this Article,
expire on completion of such drydocking but in any event not later than
XXXXXXXXXXXXXXX after delivery of the VESSEL.
Except as provided in paragraph (f) below, the guarantee shall apply only to
the work of and materials and equipment supplied by the CONTRACTOR, its
subcontractors and suppliers.
The CONTRACTOR'S obligations under this Article shall be limited in duration
and extent as herein provided.
(b) Paint
The CONTRACTOR shall provide a guarantee to the PURCHASER in relation to the
paint for the VESSEL on the same terms as that provided by the paint supplier
to the CONTRACTOR. Such guarantee shall be on the basis that the paintwork
shall be carried out under the supervision of and to the satisfaction of
authorized representatives of the paint supplier.
(c) Liability for Consequential Loss or Damage
The Guarantee contained in this Article is in lieu of and excludes any other
liability, guarantee, warranty and/or condition imposed or implied by law
custom, statute, tort or otherwise by reason of the construction or sale of the
VESSEL by the CONTRACTOR for and to the PURCHASER.
Except as provided in this Article and Article 8 (a) after delivery the
CONTRACTOR shall not under any circumstances have any liability, whether
arising from claims for breach of warranty or guarantee, negligence or strict
liability, for any consequential damages or for loss of time, cost of capital,
loss of profit or earnings, demurrage, claims of third parties, or for any
other kind whatsoever of consequential, contingent or incidental damages
directly or indirectly occasioned by the CONTRACTOR'S activities pertinent to
this CONTRACT.
The CONTRACTOR shall however be liable under the guarantee contained in this
Article for damage to any part of the VESSEL (including her
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equipment) caused directly by defects to which paragraph (a) above applies
provided that the CONTRACTOR'S liability in respect of damage so caused shall
be limited to UNITED STATES DOLLARS XXX XXXXXXXXXXXXXXXX (U.S. $XXXXXXXXXX).
(d) Extensions of Guarantee Period
The time during which the VESSEL is not available for service on account of
defects which the CONTRACTOR, is liable to make good under paragraph (a) above
and time required to remedy such defects shall be added to extend the guarantee
period specified in paragraph (a) above up to a maximum of twenty four months
after delivery.
If the CONTRACTOR itself makes good any defects during the guarantee period
specified in paragraph (a) above (as extended if appropriate by the preceding
sub-paragraph of this paragraph (d)) or such defects are remedied elsewhere in
accordance with paragraph (f) below under the supervision and with approval of
the CONTRACTOR, then the provisions of paragraph (a) shall apply to the parts
repaired or replaced and the repair or replacement work for a period of twelve
months after repair or replacement was completed up to a maximum of twenty four
months after delivery.
(e) Investigation of Recurrent Defects
The CONTRACTOR agrees within the terms of this Article to investigate the cause
of any recurrent defect to which paragraph (a) applies with a view to providing
a satisfactory remedy therefor.
(f) Guarantee Work Outside Building Site
If in the PURCHASER'S opinion the replacements or repairs under this Article
cannot be conveniently made at the Building Site or at any other yard
controlled by the CONTRACTOR, the PURCHASER may have such repairs and/or
replacements carried out elsewhere; in such a case the CONTRACTOR is discharged
from the guarantee under this Article in respect of the repairs or replacements
carried out by the third party unless carried out under the supervision and
with the approval of the CONTRACTOR. Provided the guarantee work is contracted
for in a businesslike manner having regard to the nature, urgency and extent of
the defect to be remedied, the CONTRACTOR shall reimburse the PURCHASER the
documented expenses incurred by the PURCHASER in effecting such repairs and/or
replacements including expenses of independent contractors in travelling to the
VESSEL and the cost of transportation of materials and equipment (including by
air freight if the PURCHASER reasonably so requires).
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In any case, the VESSEL shall be taken at the PURCHASER'S cost and
responsibility to the place elected for the work to be carried out ready in all
respects for the guarantee work to be commenced.
(g) Assignment of Suppliers' and Sub-contractors' Guarantees
In the event that the guarantee stipulated by manufacturers or suppliers of
machinery, material, equipment, appurtenances and outfit furnished to the
CONTRACTOR and embodied in the VESSEL exceeds the guarantee given by the
CONTRACTOR to the PURCHASER hereunder, such extended guarantee rights are to be
assigned and made available to the PURCHASER by the CONTRACTOR.
(h) Verification of Guarantee Claims
The CONTRACTOR, at its own cost, is to have the right to investigate the
validity of the PURCHASER'S claim either by the attendance aboard the VESSEL
(at its point of service) of an accredited representative or, if in the opinion
of the CONTRACTOR it is practicable to do so after suitable replacement is
made, by the removal from the VESSEL and the transportation to the Building
Site of the defective part.
(i) Guarantee Engineer
During any time of the guarantee period the CONTRACTOR shall have the option to
place on board one Guarantee Engineer who shall act as the CONTRACTOR'S
observer and to whom every assistance shall be granted for the fulfillment of
his tasks. Should this option be exercised then such Guarantee Engineer shall
not be discharged without the CONTRACTOR'S approval, otherwise the PURCHASER
shall immediately forfeit its rights under the guarantee in this Article.
The PURCHASER shall ensure the said Engineer a status on board not inferior to
the chief engineer and provide accommodation in an officer's cabin. The
PURCHASER shall pay the CONTRACTOR a remuneration to be agreed upon in respect
of the Guarantee Engineer.
Notification of defects to the Guarantee Engineer shall be deemed to be notice
to the CONTRACTOR for the purposes of this Article. The PURCHASER agrees to
give prompt confirmation in writing of such notice to the CONTRACTOR.
The presence on board of the Guarantee Engineer shall in no way affect the
CONTRACTOR'S and the PURCHASER'S responsibility as provided for in this
CONTRACT. The duties and responsibilities of the Guarantee Engineer shall be
specified in writing by the CONTRACTOR to the PURCHASER at the time the
Guarantee Engineer is appointed.
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ARTICLE 13: PATENTS
The CONTRACTOR shall indemnify the PURCHASER against any infringement of patent
rights in connection with the construction of the VESSEL at the Building Site
but no such liability shall lie with the CONTRACTOR with regard to components
and/or equipment and/or design supplied by the PURCHASER.
ARTICLE 14: LAW OF THE CONTRACT, REFERENCE TO EXPERT AND
ARBITRATION
(a) Law of the CONTRACT
This CONTRACT and all other agreements relating thereto shall be construed and
interpreted under the laws of England.
(b) Reference to Expert
If, save as provided in Article 1 paragraph (f), any dispute of a technical
nature arises during the construction of the VESSEL between the parties, in
regard to the construction of the VESSEL, engines, material or workmanship, it
shall forthwith be referred to a technical expert nominated by agreement
between the parties hereto and his decision shall be final and binding upon
both parties. Failing such agreement the dispute shall be referred to
arbitration in accordance with paragraph (c) of this Article 14.
(c) Arbitration
In the event of any dispute between the parties hereto as to any matter arising
out of or relating to this CONTRACT or any stipulation herein or with respect
thereto which cannot be settled by the parties themselves, such dispute shall
be resolved by arbitration in London, England in accordance with the Laws of
England. Either party may demand arbitration of any such dispute by giving
written notice to the other party. Any demand for arbitration by either of the
parties hereto shall state the name of the arbitrator appointed by such party
and shall also state specifically the question or questions as to which such
party is demanding arbitration. Within twenty (20) days after receipt of
notice of such demand for arbitration, the other party shall in turn appoint a
second arbitrator. The two arbitrators thus appointed shall thereupon select a
third arbitrator, and the three arbitrators
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so named shall constitute the board of arbitration (hereinafter called the
"Arbitration Board") for the settlement of such dispute.
In the event however, that said other party should fail to appoint a second
arbitrator as aforesaid within twenty (20) days following receipt of notice of
demand of arbitration, it is agreed that such party shall thereby be deemed to
have accepted and appointed as its own arbitrator the one already appointed by
the party demanding arbitration, and the arbitration shall proceed forthwith
before this sole arbitrator, who alone, in such event, shall constitute the
Arbitration Board. And in the further event that the two arbitrators appointed
by the parties hereto as aforesaid should be unable to agree to the third
arbitrator within twenty (20) days from the date on which the second arbitrator
is appointed, either party or the said two arbitrators may apply to any court
in England or other official organization having jurisdiction in such matter to
appoint the third arbitrator. The award of the arbitration made by the sole
arbitrator or by the majority of the three arbitrators as case may be shall be
final, conclusive and binding upon the parties hereto.
Judgment upon any award rendered may be entered in any court having
jurisdiction or application may be made to any competent court or authority for
judicial acceptance of any award and an order of enforcement, as the case may
be.
ARTICLE 15: ADDRESSES FOR CORRESPONDENCE
For all practical purposes, without it being a legal requirement, the
CONTRACTOR shall send all notices, letters and documents for the PURCHASER in
connection with or required under this CONTRACT to the following address:
(i) for all technical matters:
Address: Technical Marine Planning Limited
70 Great Eastern Street
London EC2A3JL
Telephone: 44-71-739-3533
Telex: 887194 TECRO
Telefax: 44-71-729-1169
(ii) for all legal and financial matters:
Address: Carnival Cruise Lines Inc.
100 Southeast 2nd Street
32nd Floor
Miami
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Florida 33131-2136
U.S.A.
Attention: Captain Vittorio Fabietti (for)
Mr. Micky Arison
Telephone: (305) 577-8200
Telefax: (305) 375-9361 or 9363
For all practical purposes without it being a legal requirement the PURCHASER
shall send all notices, letters and documents for the CONTRACTOR in connection
with or required under this CONTRACT to the following address:
Address: Kvaerner Masa-Yards, Inc.
Helsinki New Shipyard
Munkisaarenkatu
SF-00150 Helsinki, Finland
Attention: Jukka Jaatinen
Telephone: 358-0-1941
Telex: 121246 MASAH SF
Telefax: 358-0-170 132
All mail shall be sent by air.
Whenever this CONTRACT requires that notification shall be given in writing,
such notification may validly be given by telex or telefax. All approvals or
consents required by this CONTRACT shall be in writing, or telefax. All such
messages if sent by telefax, shall also be confirmed by official letter.
ARTICLE 16: ASSIGNMENT
The CONTRACTOR shall not transfer, assign and/or pledge this CONTRACT or any
rights hereunder without the prior written consent of the PURCHASER which the
PURCHASER shall have full liberty to withhold.
The PURCHASER may assign to any bank or financial institution any or all of its
rights under this CONTRACT.
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[MARKED TEXT OMITTED PURSUANT TO AN APPLICATION FOR AN ORDER FOR
CONFIDENTIAL TREATMENT BY CARNIVAL CORPORATION]
ARTICLE 17: EFFECTIVE DATE
This CONTRACT will become effective on satisfaction of all the following
conditions:
(1) the PURCHASER having notified to the CONTRACTOR that it has
made satisfactory arrangements to hedge for United States
Dollars the price of the VESSEL denominated in Finnish Markka
so that the cost of the VESSEL to the PURCHASER in United
States Dollars will not be more than USD XXXXXXXXXXX.
(2) the PURCHASER having notified to the CONTRACTOR that it has
received an offer offinance on terms satisfactory to the
PURCHASER from Finnish Export Credit Ltd. offering to lend to
the PURCHASER on delivery of the VESSEL an amount in United
States Dollars equivalent to the amount in Finnish Markka of
the balance of the Contract Price of the VESSEL payable on
delivery calculated at an exchange rate acceptable to the
PURCHASER, repayable by equal semi-annual installments over
XXX years from delivery with interest at XX% per annum.
If all the above conditions have not been satisfied on or before 30th April,
1992 or such later date as may be agreed in writing between the CONTRACTOR and
the PURCHASER, this CONTRACT shall be null and void and neither the CONTRACTOR
nor the PURCHASER shall have any further obligations to the other hereunder
save that the CONTRACTOR shall forthwith return to the PURCHASER the amount of
the installment paid to the CONTRACTOR on signature of this CONTRACT, together
with interest thereon from the date hereof under the date of repayment at the
rate specified in Article 11(a) (3) hereof.
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IN WITNESS WHEREOF, parties hereto have duly signed and executed this CONTRACT
in duplicate, one for each party.
Date: Date:
-------------------- ----------------------
- --------------------------- ----------------------------
CARNIVAL CRUISE LINES, INC. KVAERNER MASA-YARDS, INC.
Vittorio Fabietti M. Saarikangas
Attorney-in-fact and
A. Pankakoski
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EXHIBIT "A"
BANK GUARANTEE/DRAFT
Carnival Cruise Lines, Inc.
PANAMA
GUARANTEE NO._____________
Dear Sirs,
We refer to the shipbuilding contract dated _________________ 1992 (the
"Shipbuilding Contract") made between (1) yourselves and (2) Kvaerner
Masa-Yards Inc. (the "Contractor")in respect of the construction of Yard No.
487.
In consideration of the receipt from you of Ten Finnish Markka and other good
and valuable consideration of the receipt whereof is hereby acknowledged, we
hereby irrevocably and unconditionally guarantee to you the payment by the
Contractor of all amounts which the Contractor may be liable to pay to you
under the Shipbuilding Contract and undertake to pay to you such amounts
forthwith on presentation of your certificate confirming that (A) you have duly
terminated the Shipbuilding Contract and that either (1) the Contractor has not
within fourteen days of your notice of termination to the Contractor applied to
arbitration contesting your right to terminate the Shipbuilding Contract or (2)
the arbitration board appointed to terminate the Shipbuilding Contract has
issued a final award confirming that you are so entitled or (B) the Contractor
has become the award confirming that you are so entitled or (B) the Contractor
has become the subject of bankruptcy (konkurs) administration or first
installment only (C) after [ ] 1992 confirming that the Shipbuilding
Contract has not become effective by that date.
We shall not be exonerated from our obligations hereunder by:
1. Any irregularity, unenforceability of invalidity of the Shipbuilding
Contract (to the intent that the obligations hereunder shall remain in
full force and effect and this guarantee shall be constructed as if
there were no such irregularity, unenforceability or invalidity); or
2. Any amendment to or variation of the Shipbuilding Contract; or
3. Any other matter which may constitute a legal or equitable discharge
of a surety or guarantor.
We hereby waive all or any of our rights as surety which may at any time be
inconsistent with any of the provisions of this guarantee and in particular,
but without prejudice to the foregoing, any right
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which we may have to compel you to proceed to enforce a claim against
the Contractor before enforcing this guarantee against us.
All payments by us hereunder shall be made in the United States
Dollars without set-off or counter-claim free and clear from all
taxes. Our liability under this guarantee is, however, limited to a
maximum amount of FIM[ ] ([ ] million Finnish
Markka).
This guarantee shall terminate upon the date on which the Vessel is
delivered to and accepted by you under the Shipbuilding Contract.
All claims under this guarantee shall, however, be made to us in
writing latest on 31st July, 1997 in order to be taken into
consideration.
This guarantee shall be governed by and construed in accordance with
the laws of England. We hereby submit to the non-exclusive
jurisdiction of the English courts and agree if required to appoint an
agent in England for service of any proceedings before such courts.
Helsinki, ___________________ 199__
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