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SHIPBUILDING CONTRACT FOR CONSTRUCTION OF VESSEL(HULL NO. _)BETWEEN as BUYERandCHINA SHIPBUILDING TRADING COMPANY, LIMITED and SHIPYARDCollectively as SELLER CONTENTSARTICLE Page No.I DESCRIPTION AND CLASS 6 1. Description .6 2. Class and Rules .6-7 3. Principal Particulars and Dimensions of the Vessel.7 4. Guaranteed Speed .7 5. Guaranteed Fuel Consumption .7 6. Guaranteed Deadweight .7-8 7. Subcontracting .8 8. Registration .8II CONTRACT PRICE AND TERMS OF PAYMENT 9 1. Contract Price .9 2. Currency .9 3. Terms of Payment .9-10 4. Method of Payment .10-11 5. Prepayment .12 6. Security for Payment of Instalments before Delivery .12 7. Refunds .12-13III ADJUSTMENT OF THE CONTRACT PRICE 14 1. Delivery .14-16 2. Insufficient Speed .16 3. Excessive Fuel Consumption .16-17 4. Deadweight .17 5. Effect of Rescission .17-18IV SUPERVISION AND INSPECTION 19 1. Appointment of the BUYERs supervisor . .19 2. Approval of Plans and Drawings .19 3. Supervision and Inspection by the Supervisor .19-20 4. Liability of the SELLER .20-21 5. Salaries and Expenses .21 6. Report of Progress .21 7. Replacement of Supervisor .21V MODIFICATIONS, CHANGES AND EXTRAS 22 1. How Effected .22 2. Changes in Class, etc. .22-23 3. Substitution of Materials and/or Equipments .23 4. BUYERs Supplied Items .23-24ARTICLE Page No.VI TRIALS 25 1. Notice . . 25-26 2. How Conducted .26 3. Trial Load Draft .26 4. Method of Acceptance or Rejection .26-27 5. Disposition of Surplus Consumable Stores .27 6. Effect of Acceptance .27-28VII DELIVERY 29 1. Time and Place .29 2. When and How Effected .29 3. Documents to be Delivered to the BUYER .29-30 4. Title and Risk . 30 5. Removal of VESSEL .31 6. Tender of the VESSEL .31VIII DELAYS AND EXTENSION OF TIME FOR DELIVERY 32 1. Causes of Delay . 32 2. Notice of Delay .32 3. Right to Cancel for Excessive Delay .32-33 4. Definition of Permissible Delay .33IX WARRANTY OF QUALITY 34 1. Guarantee of Material and Workmanship .34 2. Notice of Defects .34 3. Remedy of Defects .34-35 4. Extent of the SELLERs Liability .35-36 5. Guarantee Engineer .36X CANCELLATION, REJECTION AND RESCISSION BY THE BUYER 37XI BUYERs DEFAULT 38 1. Definition of Default .38 2. Notice of Default .38 3. Interest and Charge .38-39 4. Default before Delivery of the VESSEL 39 5. Sale of the VESSEL .39-40ARTICLE Page No.XII INSURANCE 41 1. Extent of Insurance Coverage . 41 2. Application of Recovered Amount .41-42 3. Termination of the BUILDERs Obligation to Insure .42XIII DISPUTES AND ARBITRATION 43 1. Proceedings .43 2. Alternative Arbitration by Agreement .43 3. Notice of Award .43-44 4. Expenses .44 5. Award of Arbitration .44 6. Entry in Court .44 7. Alteration of Delivery Time .44XIV RIGHT OF ASSIGNMENT 45XV TAXES AND DUTIES 46 1. Taxes . .46 2. Duties . .46XVI PATENTS, TRADEMARKS AND COPYRIGHTS 47XVII NOTICE 48-49XVIII EFFECTIVE DATE OF CONTRACT 50XIX INTERPRETATION 51-52 1. Law Applicable . .51 2. Discrepancies .51 3. Definition .51-52Exhibit A: IRREVOCABLE LETTER OF GUARANTEE NO. 53-54Exhibit B: IRREVOCABLE LETTER OF GUARANTEE FOR THE 2ND, 3RD AND 4TH INSTALMENTS 55-57SHIPBUILDING CONTRACTFOR CONSTRUCTION OF ONE _ DEADWEIGHT _ (HULL NO. _)This CONTRACT, entered into this _ day of _ by and between _, a corporation organized and existing under the Laws of _, having its registered office at _ (hereinafter called the BUYER) on one part; and CHINA SHIPBUILDING TRADING COMPANY, LIMITED, a corporation organized and existing under the Laws of the Peoples Republic of China, having its registered office at 10, YueTan BeiXiaoJie, Beijing 100861, the Peoples Republic of China (hereinafter called CSTC), and _ SHIPYARD, a corporation organized and existing under the Laws of the Peoples Republic of China, having its registered office at_, the Peoples Republic of China (hereinafter called the BUILDER) on the other part. CSTC and the BUILDER are hereinafter collectively called the SELLERWITNESSETHIn consideration of the mutual covenants contained herein, the SELLER agrees to build, launch, equip and complete at the BUILDERs Shipyard and to sell and deliver to the BUYER after completion and successful trial one (1) _ Vessel as more fully described in Article I hereof, to be registered under the flag of _ and the BUYER agrees to purchase and take delivery of the aforesaid VESSEL from the SELLER and to pay for the same in accordance with the terms and conditions hereinafter set forth. ARTICLE I DESCRIPTION AND CLASS1. DESCRIPTION:The VESSEL is a metric tons deadweight , at designed draft moulded of _ meters (hereinafter called the VESSEL) of the class described below. The VESSEL shall have the BUILDERs Hull No. _ and shall be constructed, equipped and completed in accordance with the following Specifications: (1) Specification (Drawing No. )(2) General Arrangement (Drawing No. )(3) Midship Section (Drawing No. )(4) Makers list (Drawing No. ) attached hereto and signed by each of the parties to this Contract (hereinafter collectively called the Specifications), making an integral part hereof.2. CLASS AND RULESThe VESSEL, including its machinery and equipment, shall be constructed in accordance with the rules and regulations of _ (hereinafter called the Classification Society) and shall be distinguished in the record by the symbol of _ +_, _, _, _, _, _, 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 any additional rules or circulars thereof issued and become effective as at the date of signing this Contract. The SELLER shall arrange with the Classification Society to assign a representative or representatives (hereinafter called the Classification Surveyor) to the BUILDERs Shipyard for supervision of the construction of the VESSEL.All fees and charges incidental to Classification and to comply with the rules, regulations and requirements of this Contract as described in the Specifications issued up to the date of this Contract as well as royalties, if any, payable on account of the construction of the VESSEL shall be for the account of the SELLER, except as otherwise provided and agreed herein. 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.3. PRINCIPAL PARTICULARS AND DIMENSIONS OF THE VESSEL (a) Hull: Length overall abt. _._m Length between perpendiculars _._m Breadth moulded _._m Depth moulded _._m Design Draft moulded _._m (b) Propelling Machinery:The VESSEL shall be equipped, in accordance with the Specifications, with_ _ type Main Engine.4. GUARANTEED SPEEDThe SELLER guarantees that the trial speed, after correction, is to be not less than _ nautical miles per hour on the loaded condition stipulated in the Specification.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 CONSUMPTIONThe SELLER guarantees that the fuel oil consumption of the Main Engine is not to exceed _._ grams/brake horse power/hour at normal continuous output at shop trial based on diesel fuel oil having a lower calorific value of _,_ kilocalories per kilogram. 6. GUARANTEED DEADWEIGHTThe SELLER guarantees that the VESSEL is to have a deadweight of not less than _,_ metric tons at the designed loaded draft moulded of _._ 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 BUYERs 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. SUBCONTRACTING:The SELLER may, at its sole discretion and responsibility, subcontract any portion of the construction work of the VESSEL to experienced subcontractors, but delivery and final assembly into the VESSEL of any such work subcontracted shall be at the BUILDERs Shipyard. The SELLER shall remain responsible for such subcontracted work. 8. REGISTRATION:The vessel shall be registered by the BUYER at its own cost and expenses under the laws of _ at the time of delivery and acceptance thereof. ARTICLEII CONTRACT PRICE & TERMS OF PAYMENT1. CONTRACT PRICE:The purchase price of the vessel is United States Dollars only (USD ), net receivable by the Seller (hereinafter called the “Contract Price”), which is exclusive of the cost for the BUYERs Supplies as provided in Article V hereof, and shall be subject to upward or downward adjustment, if any, as hereinafter set forth in this Contract.2. CURRENCY:Any and all payments by the BUYER to the SEELER under this Contract shall be made in United States Dollars.3. TERMS OF PAYMENTThe Contract Price shall be paid by the BUYER to the SELLER in instalments as follows: (a) 1st Instalment: The sum of United States Dollars _ (US$ _), representing _ percent (_%) of the Contract Price shall become due and payable and be paid by the BUYER on or before this Contract becoming effective and provided that the SELLER shall have submitted to the BUYER the Refund Guarantee in the form annexed hereto as Exhibit”A” issued by Bank of China, Head Office, Banking Department, Beijing, the Peoples Republic of China, and provided further that the SELLER shall have RECEIVED the first class international Banks Letter of Guarantee in accordance with Paragraph 6 of this Article. (b) 2nd Instalment:The sum of United States Dollars (US$ _), representing _ percent (_%) of the Contract Price, shall become due and payable and be paid within three (3) New York business days after the cutting the first steel plate of the VESSEL in the BUILDERs workshop. The SELLER shall notify with a telex or telefax notice along with a certificate certified by the BUYERs authorized party to this effect to this effect to the BUYER stating that the 1st steel plate has been cut in its workshop and demand for payment of this instalment as soon as the cutting of the steel is made.(c) 3rd Instalment:The sum of United States Dollars (US$ ) representing percent ( %) of the Contract Price, shall become due and payable and be paid within three (3) New York business days after the keel-laying of the first section of the VESSEL. The keel-laying shall be notified by the SELLER with a telex or telefax notice along with a certificate certified by the BUYERs authorized party to this effect to this effect to the BUYER stating that the keel-laying has been carried out. The SELLER shall send to the BUYER a telex or telefax demand for payment of this instalment
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