Document:

Exhibit 10.4

 

	
  

  	
  www.koreaexim.go.kr

  
	
  16-1, Yoido-Dong,
  Yeongdeungpo-Gu, Seoul 150-996, Korea

  Tel. 822-3779-6315 Fax. 822-3779-6745

  	
   

  

 

LETTER OF GUARANTEE NO.
M0902-806-LG-00064

 

Date :
June 5, 2008

 

Gentlemen:

 

In consideration
of you entering in the shipbuilding contract dated June 2, 2008
(hereinafter called “CONTRACT”) made by and between SUEZ JADE LIMITED of
Marshall Islands (hereinafter called the “BUYER”) and Hyundai Heavy Industries
Co., Ltd., Ulsan, Korea (hereinafter called the “BUILDER”) for the construction
by the BUILDER and the purchase by the BUYER of one (1) 158,000 DWT Class Crude
Oil Carrier having the BUILDER’S Hull No.2302 (hereinafter called the “VESSEL”),
we hereby open our irrevocable letter of guarantee number M0902-806-LG-00064 in
favour of the BUYER for account of the BUILDER as follows.

 

If, in connection
with the terms of the CONTRACT, the BUYER shall become entitled to a refund of
the advance payments made to the BUILDER prior to the delivery of the VESSEL,
we hereby irrevocably guarantee the repayment of the same to the BUYER within
thirty (30) days after demand not exceeding US$ 18,440,000 (Say U.S. Dollars
Eighteen Million Four Hundred Forty Thousand only) together with interest
thereon at the rate of six percent (6 %) per annum, from the date following the
date of receipt by the BUILDER to the date of remittance by telegraphic
transfer of such refund.

 

The amount of this
guarantee will be automatically increased upon the BUILDER’S receipt of the
respective instalment, not more than two (2) times, each time by the
amount of instalment plus interest thereon as provided in the CONTRACT, but in
any eventuality the amount of this guarantee shall not exceed the total sum of
US$ 46,100,000 (Say U.S. Dollars Forty Six Million One Hundred Thousand only)
plus interest thereon at the rate of six percent (6 %) per annum from the date
following the date of the BUILDER’S receipt of each instalment to the date of
remittance by telegraphic transfer of the refund. However, in the event of
cancellation of the CONTRACT being based on delays due to force majeure or
other causes beyond the control of the BUILDER, the interest rate of refund
shall be reduced to four percent (4 %) per annum as provided in Article X
of the CONTRACT.

 

 

The payment by the
undersigned under this letter of guarantee (subject to the second and third
paragraph hereof) shall be made upon simple receipt by us  of a written demand from you including a
signed statement certifying that the BUYER’S demand for refund has been made in
conformity with Article X of the CONTRACT and the BUILDER has failed to
make the refund.

 

It is hereby
understood that payment of any interest provided herein is by way of liquidated
damages due to cancellation of the CONTRACT and not by way of compensation for
use of money.

 

Notwithstanding
the provisions hereinabove, in the event that within thirty (30) days from the
date of your claim to the BUILDER referred to above, we receive notification
from you or the BUILDER accompanied by written confirmation to the effect that
your claim to cancel the CONTRACT or your claim for refundment thereunder has
been disputed and referred to arbitration in accordance with the provisions of
the CONTRACT, we shall under this guarantee, refund to you the sum adjudged to
be due to you by the BUILDER pursuant to the award made under such arbitration
or, as the case may be, final court judgment following such arbitration award
immediately upon receipt from you of a demand for the sums so adjudged and a
copy of the relevant arbitration award or, as the case may be, court judgment.

 

The letter of
guarantee shall become null and void upon receipt by the BUYER of the sum
guaranteed hereby or upon acceptance by the BUYER of the delivery of the VESSEL
in accordance with the terms of the CONTRACT and, this letter of guarantee
shall be returned to us.

 

This letter of
guarantee is assignable and valid from the date of this letter of guarantee
until such time as the VESSEL is delivered by the BUILDER and accepted by the
BUYER in accordance with the provisions of the CONTRACT.

 

All demands,
statements or notices in connection with this letter of guarantee shall be
validly given if sent to us by telefax to our office at [country and town of
office] as follows:

 

[ 16-1, Yoido-Dong,
Youngdeungpo-Gu, Seoul 150-996, Korea ]

Fax: +822-3779-6745

 

 

This letter of
guarantee shall remain in full force and effect, notwithstanding any amendments
made to the CONTRACT by the parties thereto. The bankruptcy or insolvency of
the BUILDER or the BUILDER’S breach or default under the CONTRACT shall not
effect our obligations under this Letter of Guarantee. Our obligation under
this Letter of Guarantee shall not be discharged or impaired by any novation
of, amendment of, or supplement to, the CONTRACT after the date of issuance of
this Letter of Guarantee by us, provided however that the sum guaranteed
hereinabove shall not be increased and the period of the validity of this
guarantee stipulated hereinabove shall not be extended without the prior
written consent of us.

 

This letter of
guarantee shall be governed by and construed in accordance with the laws of
England and any dispute between you and us hereunder or in relation hereto
shall be submitted to arbitration in London before a tribunal of three
arbitrators, such arbitration shall be conducted in accordance with the
Arbitration Act 1996 and the rules of the London Maritime Arbitration
Association (LMAA) in London, England.

 

 

Very truly yours

 

 

For and on behalf of

The Export-Import Bank of Korea

 

 

	
  By:

  	
  /s/ Sang-Hun Lee

  	
   

  	
  By:

  	
  /s/ Sung-Young
  Choi

  
	
  Name:

  	
  Sang-Hun
  Lee

  	
   

  	
  Name:

  	
  Sung-Young
  Choi

  
	
  Title:

  	
  Senior Deputy Director

  	
   

  	
  Title:

  	
  Director

  
	
  Ship
  Financing Department

  	
   

  	
  Ship Financing
  Department

  	
   

  
						

 

 

ADDENDUM NO. 1

 

ADDENDUM
N0.1 dated 17 November 2008 to a shipbuilding contract
dated 2 June 2008 (the “Contract”)  made between Suez Jade Limited (the “Buyer”)  and
Hyundai Heavy Industries Co. Ltd (the “Builder”)  for the construction of one (1) 158,000
DWT class crude oil carrier bearing Hull No. 2302.

 

WHEREAS:

 

(a)                    the Buyer
assigned to Fortis Bank of 166 Syngrou Avenue, 176 71 Athens, Greece absolutely
all interests and rights under the Contract by a predelivery security
assignment dated 23 June 2008 (the “Predelivery
Security Assignment”);

 

(b)                   the Buyer and
the Builder, pursuant to a facsimile message dated 26 June 2008 and
addressed by the Builder to (inter alios) the Buyer, agreed to amend the words “26
November 2008” in Paragraph 2 of Article X of the Contract to read “17
November 2008”; and

 

(c)                    the Buyer and
the Builder have now agreed to further amend the due date and method of payment
of the Second Instalment (as such term is defined in Paragraph 2(b).

 

NOW, in
consideration of the promises contained herein, it is hereby agreed by the
parties to this Addendum as follows:

 

1                            The
Contract shall, with effect on and from the date the Buyer obtains all consents
required to be obtained by it in connection with this Addendum pursuant to the
Predelivery Security Assignment, be (and it is hereby) amended as follows (and
the Contract (as so amended) will continue to be binding upon each of the
parties hereto upon such terms as so amended):

 

(a)                    by deleting
the words “Ninety Two Million and Two Hundred Thousand (US$92,200,000)” in the
second line of Article II of the Contract and by inserting in its place
the words “Ninety Two Million Seven Hundred and Sixty Nine Thousand Two Hundred
and Seven (US$92,769,207)”;

 

(b)                   by deleting the
word “fourth” in the second line of Clause 2 of Article VII and by
inserting in its place the word “fifth”;

 

(c)                    by deleting
Paragraphs 2, 3 and 4 of Article X of the Contract in their entirety and
by inserting in their place the following new Paragraphs 2, 3 and 4:

 

“ARTICLE X: PAYMENT

 

2                           TERMS OF PAYMENT

 

The payments of the
CONTRACT PRICE shall be made as follows:

 

(a)                     First
Instalment

 

U.S. Dollars Eighteen
Million Four Hundred and Forty Thousand (US$18,440,000) shall be paid three (3) business
days after the later of (i) execution of this CONTRACT by both parties
hereto and (ii) receipt by the BUYER of the original of the Refund
Guarantee specified in Paragraph 8 of this Article and (iii) 17 June 2008.

 

 

(b)                    Second
Instalment

 

U.S. Dollars Four Million
Six Hundred and Thirty Six Thousand Eight Hundred and Ninety Two (US$4,636,892)
shall be paid on the later of (i) three (3) business days after
receipt by the BUYER of the original of the Supplemental Letter to the Refund
Guarantee specified in Paragraph 8 of this Article and attached to
addendum No. 1 dated 17 November 2008 to this CONTRACT in the form of
Exhibit “A” (the “Supplemental Letter) and
(ii) 17 December 2008.

 

(c)                     Third
Instalment

 

U.S. Dollars Five Million
One Hundred and Fifty Two Thousand Three Hundred and Fifteen (US$5,152,315)
shall be paid on 15 July 2010.

 

(d)                    Fourth
Instalment

 

U.S. Dollars Eighteen
Million Four Hundred and Forty Thousand (US$18,440,000) shall be paid within
three (3) business days of receipt by the BUYER of a faxed copy of Stage
Certificate in the form of EXHIBIT “A” attached hereto confirming that the
first block of the keel has been laid in accordance with the SPECIFICATIONS.

 

(e)                     Fifth
Instalment

 

U.S Dollars Forty Six
Million One Hundred Thousand (US$46,100,000) plus or minus any increase or
decrease due to modifications and/or adjustment, if any, arising prior to
delivery of the VESSEL of the CONTRACT PRICE under Articles II, III and V
of this CONTRACT shall be paid to the BUILDER concurrently with the delivery
and acceptance of the VESSEL. (The date stipulated for payment of each of the
five instalments mentioned above is hereinafter in this Article and in Article XI
referred to as the “DUE DATE” of
that instalment).

 

Provided however that
none of the above instalments shall be payable if the Refund Guarantee referred
to in Article X.8 hereof (as amended and supplemented by the Supplemental
Letter) ceases to be in force and no substitute Refund Guarantee has been
provided in accordance with the provisions of this Contract. It is understood
and agreed upon by the BUILDER and the BUYER that all payments under the provisions
of this Article shall not be delayed or withheld’ by the BUYER due to any
dispute or disagreement of whatsoever nature arising between the BUILDER and
the BUYER. Should there be any dispute in this connection, the matter shall be
dealt with in accordance with the provisions of arbitration in Article XIII
hereof. Expenses for remitting payments whether charged by the BUYER’S bank or
the BUILDER’S bank shall be for the account of the BUYER.

 

3                           DEMAND FOR PAYMENT

 

At least fourteen (14)
days prior to the DUE DATE of each instalment, with the exception of the
payment of the first, second and third

 

 

instalments, the BUILDER
shall notify the BUYER by facsimile of the date such instalment shall become
due.

 

The BUYER shall
immediately acknowledge receipt of such notification by facsimile to the
BUILDER and make payment as set forth in this Article. If the BUILDER fails to
receive the BUYER’s said acknowledgement within three (3) days after
sending the aforementioned notification, the BUILDER shall promptly facsimile
to the BUYER a second notification of similar import. The BUYER shall
immediately acknowledge by facsimile receipt of the foregoing second
notification regardless of whether or not the first notification was
acknowledged as aforesaid.

 

4                           METHOD OF PAYMENT

 

(a)                     All the
pre-delivery payments and the payment due on delivery in settlement of the
CONTRACT PRICE as provided for in Paragraph 2 of this Article shall be
made in U.S. Dollars on or before the DUE DATE thereof by telegraphic transfer
as follows:

 

(i)                       The payment
of the first, second, third and fourth instalments shall be made to the account
(Account No.:04-029-695) of the The Export-Import Bank of Korea, (hereinafter
called the “KOEXIM”)  with Deutsche Bank Trust Company Americas,
New York, USA (hereinafter called the “DBTC”)  or the account of the BUILDER with or any
other bank in favour of the BUILDER, as designated and notified by the BUILDER
at least five (5) business days prior to the DUE DATE.

 

(ii)                    The BUYER
shall cause a bank in Seoul, Korea (the “BUYER’s
Bank”)  acceptable to
the BUILDER to make the payment of the fifth instalment (as provided for in
Paragraph 2(e) of this Article) to The Export-Import Bank of Korea in
favour of the BUILDER or to the account of the BUILDER with a bank designated
and noted by the BUILDER upon the BUILDER’S presentation to the BUYER’s Bank of
a duplicate copy of the PROTOCOL OF DELIVERY AND ACCEPTANCE of the VESSEL
signed by the BUILDER and the BUYER.

 

(iii)                 At least two (2) business
days prior to the scheduled delivery date of the VESSEL, the BUYER’s Bank shall
irrevocably confirm by a cable or any other equivalent means, to The
Export-Import Bank of Korea or such other bank that the payment of the fifth
instalment will be made unconditionally and immediately upon the BUILDER’S
presentation to the BUYER’s bank of the said PROTOCOL OF DELIVERY AND
ACCEPTANCE duly executed by both parties hereto.

 

(b)                    Simultaneously
with each of such payments (save for payment of the fifth instalment), the
BUYER shall advise the BUILDER of the details of the payments by cable or
facsimile and, at the same time, the BUYER shall cause the BUYER’s remitting
bank to advise the Export-Import Bank of Korea or other bank of the details of
such payments by authenticated bank cable or telex.”;

 

 

(d)                    by adding the
following new Paragraph 10 at the end of Article X of the Contract:

 

PREPAYMENT

 

The Buyer shall have the
right to prepay any of the instalments due under this Contract without any
premium or penalty, save that, in the event that the Buyer pays the second
instalment or the third instalment earlier than their respective DUE DATE, the
fifth instalment shall be reduced by United States Dollars Eight Hundred and
Ninety Six (US$896) for each day either instalment is paid earlier than its
respective DUE DATE.”

 

(e)                     by deleting
the words “second or third” in the fist line of sub-paragraph (a), Paragraph 1
of Article XI of the Contract and by inserting in their place the words “second,
third or fourth”; and

 

(f)                       by deleting
the word “fourth” in the first and second line of paragraph (b), Paragraph 1 of
Article XI of the Contract and by inserting in its place in both cases the
word “fifth”.

 

2                            Save
as provided in clause 1 of this Addendum, the terms of the Contract will not be
otherwise amended and shall remain in full force and effect.

 

3                            This
Addendum shall be kept strictly private and confidential by both parties hereto
and shall not be disclosed to any third party. However, the parties may
disclose this Addendum to a third party to the extent necessary to perform the
Contract (such as the Buyer’s banks providing financing to the Buyer for the
payment of the Contract Price) or if required by any law or regulation or court
order, and in such case the parties shall instruct such third party to observe
the full confidentiality of this Addendum.

 

4                            Each
party hereby confirms that all internal procedures relevant to such party have
been taken and all consents relevant to such party have been duly obtained
regarding the amendments to the Contract pursuant to this Addendum save for any
consents required to be obtained by the Buyer in connection with the Addendum
pursuant to the Predelivery Security Assignment which consents will be obtained
and provided by the Buyer to the Builder within two (2) days from the date
of this Addendum.

 

5                            This
Addendum shall be governed by English law.

 

IN
WITNESS whereof the parties to this Addendum have caused this
Addendum to be duly executed on the date first above written.

 

 

EXHIBIT “A”

 

Form of Supplemental Letter to
Refund Guarantee

 

[TO BE TYPED AND PRINTED ON THE LETTERHEAD OF THE EXPORT-IMPORT BANK OF
KOREA]

 

[·] 2008

 

	
  To:

  	
  Suez Jade Limited

  
	
   

  	
  Trust Company Complex

  
	
   

  	
  Ajeltake Road

  
	
   

  	
  Ajeltake Island

  
	
   

  	
  Majuro, Marshall Islands MH96960

  

 

Gentlemen

 

Letter
of  Guarantee No. M0902-806-LG-00064
dated 5 June 2008 (the “Letter of Guarantee”)

 

We refer to:

 

1                             a
shipbuilding contract dated 2 June 2008 (the “Original Contract”)  made
between Suez Jade Limited (the “Buyer”)  and Hyundai Heavy Industries Co., Ltd (the
“Builder”)  for the construction of one (1) 158,000
DWT class crude oil carrier bearing Hull No. 2302, as amended by an
addendum No. 1 dated [·]
November 2008 (the “Addendum” and
together with the Original Contract referred to as the “Contract”) made between
the Builder and the Buyer in respect of the Original Contract; and

 

2                             the
Letter of Guarantee (a copy of which is attached to this letter and marked as Exhibit “A”)
issued by us in your favour and pursuant to which we have guaranteed to you the
refund of any advance payments made by you to the Builder under the Contract.

 

We hereby confirm that we
have reviewed the terms of the Addendum and consent to the amendments to the
Original Contract contained in the Addendum and agree that the Letter of
Guarantee and our obligations thereunder shall remain and continue in full
force and effect notwithstanding the said amendments to the Original Contract
contained in the Addendum Provided however that the Letter of Guarantee is
hereby amended by deleting the third paragraph of the Letter of Guarantee in
its entirety and by inserting in its place the following new paragraph:

 

“The amount of this
guarantee will be automatically increased upon the BUILDER’S receipt of the
respective instalment, not more than three (3) times, each time by the
amount of the relevant instalment plus interest thereon as provided in the
CONTRACT, but in any eventuality the amount of this guarantee shall not exceed
the total sum of US$46,669,207 (Say U.S. Dollars Forty Six Million Six Hundred
and Sixty Nine Thousand Two Hundred and Seven only) plus interest thereon at
the rate of six percent (6%) per annum from the date following the date of the
BUILDER’S receipt of each instalment to the date of remittance by telegraphic
transfer of the refund. However, in the event of cancellation of the CONTRACT
being based on delays due to force majeure or other causes beyond the control
of the BUILDER, the interest rate of refund shall be reduced to four percent (4
%) per annum as provided in Article X of the CONTRACT.”.

 

 

This supplemental letter
is governed by and shall be construed in accordance with English law.

 

Yours faithfully,

 

 

For and on behalf of

THE EXPORT-IMPORT BANK OF KOREA

 

 

	
  By:

  	
   

  	
   

  

 

 

	
  SIGNED for and on behalf of

  	
  )

  	
   

  
	
  SUEZ JADE LIMITED

  	
  )

  	
   

  
	
  by: 

  	
  [ILLEGIBLE]

  	
  )

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED for and on behalf of

  	
  )

  	
   

  
	
  HYUNDAI HEAVY INDUSTRIES CO., LTD

  	
  )

  	
   

  
	
  by: 

  	
  E. C. HAN

  	
  )

  	
  /s/ E. C. HAN

  

 

 

ADDENDUM NO. 2

 

ADDENDUM
NO. 2 dated 17 December 2008 to a shipbuilding contract
dated 2 June 2008 (the “Original
Contract”)  as amended
by addendum No.1 dated 17 November 2008 (“Addendum
No. 1” and together with the Original Contract, the “Contract”),  both made between Suez Jade Limited (the “Buyer”)  and
Hyundai Heavy Industries Co., Ltd. (the “Builder”)
for the construction of one (1) 158,000 DWT class crude oil carrier
bearing Hull No. 2302.

 

WHEREAS:

 

(a)                     Pursuant to a
predelivery security assignment dated 23 June 2008 (the “Predelivery Security Assignment”)  executed by the Buyer in favour of Fortis
Bank of 166 Syngrou Avenue, 176 71 Athens, Greece (“Fortis Bank”)  the
Buyer has assigned to Fortis Bank absolutely all interests and rights under the
Contract;

 

(b)                    pursuant to
Addendum No.1 (i) the Buyer and the Builder amended (inter alios) the
terms of payment of the second instalment of the Contract Price (as such term
is defined in Article II of the Contract) payable to the Builder pursuant
to Paragraph 2(b) of Article X of the Original Contract and (ii) The
Export-Import Bank of Korea issued a first supplemental letter to Refund
Guarantee dated 1 December 2008 (the “First
Supplemental Letter”),  an
original of which was received by the Buyer on 17 December 2008; and

 

(c)                     the Buyer and
the Builder have now agreed to further amend the terms of payment of the second
instalment of the Contract Price (as such term is defined in Article II of
the Contract) payable to the Builder pursuant to Paragraph 2(b) of Article X
of the Contract.

 

NOW, in
consideration of the promises contained herein, it is hereby agreed by the
parties to this Addendum as follows:

 

1                             The
Contract shall, with effect on and from the date the Buyer obtains all consents
required to be obtained by it in connection with this Addendum pursuant to the
Predelivery Security Assignment, be (and it is hereby) amended as follows (and
the Contract (as so amended) will continue to be binding upon each of the
parties hereto upon such terms as so amended):

 

(a)                    by deleting
the words “Ninety Two Million Seven Hundred and Sixty Nine Thousand Two Hundred
and Seven (US$92,769,207)” in the second line of Article II of the
Contract and by inserting in their place the words “Ninety Two Million Eight
Hundred and Eighty Nine Thousand Three Hundred and Twenty Three (US$92,889,323)”;
and

 

(b)                   by deleting
Paragraph 2 of Article X of the Contract in its entirety and by inserting
in its place the following new Paragraph 2:

 

“ARTICLE X: PAYMENT

 

2                           TERMS OF PAYMENT

 

The payments of the
CONTRACT PRICE shall be made as follows:

 

(a)                     First
Instalment

 

U.S. Dollars Eighteen
Million Four Hundred and Forty Thousand (US$18,440,000) shall be paid within
three (3) business days after the later of (i) execution of this
CONTRACT by both parties hereto and (ii) receipt by the BUYER of the
original of the Refund

 

 

Guarantee specified in
Paragraph 8 of this Article and (iii) 17 June 2008.

 

(b)                    Second
Instalment

 

U.S. Dollars Four Million
Seven Hundred and Fifty Seven Thousand and Eight (US$4,757,008) shall be paid
on the later of (i) three (3) business days after receipt by the
BUYER of the original of (A) the first supplemental letter to the Refund
Guarantee dated 1 December 2008 (the “First
Supplemental Letter”)  and
(B) the second supplemental letter to the Refund Guarantee specified in
Paragraph 8 of this Article and attached to addendum No.2 dated 17 December 2008
to this CONTRACT in the form of Exhibit “A” (the “Second Supplemental Letter”)  and (ii) 30 April 2009.

 

(c)                     Third
Instalment

 

U.S. Dollars Five Million
One Hundred and Fifty Two Thousand Three Hundred and Fifteen (US$5,152,315)
shall be paid on 15 July 2010.

 

(d)                    Fourth
Instalment

 

U.S. Dollars Eighteen
Million Four Hundred and Forty Thousand (US$18,440,000) shall be paid within three
(3) business days of receipt by the BUYER of a faxed copy of Stage
Certificate in the form of EXHIBIT “A” attached hereto confirming that the
first block of the keel has been laid in accordance with the SPECIFICATIONS.

 

(e)                     Fifth
Instalment

 

U.S Dollars Forty Six
Million One Hundred Thousand (US$46,100,000) plus or minus any increase or
decrease due to modifications and/or adjustment, if any, arising prior to
delivery of the VESSEL of the CONTRACT PRICE under Articles II, III and V
of this CONTRACT shall be paid to the BUILDER concurrently with the delivery
and acceptance of the VESSEL. (The date stipulated for payment of each of the
five instalments mentioned above is hereinafter in this Article and in Article XI
referred to as the “DUE DATE” of
that instalment).

 

Provided however that
none of the above instalments shall be payable if the Refund Guarantee referred
to in Article X.8 hereof (as amended and supplemented by the First
Supplemental Letter and the Second Supplemental Letter) ceases to be in force
and no substitute Refund Guarantee has been provided in accordance with the
provisions of this Contract. It is understood and agreed upon by the BUILDER
and the BUYER that all payments under the provisions of this Article shall
not be delayed or withheld by the BUYER due to any dispute or disagreement of
whatsoever nature arising between the BUILDER and the BUYER. Should there be
any dispute in this connection, the matter shall be dealt with in accordance
with the provisions of arbitration in Article XIII hereof. Expenses for
remitting payments whether charged by the BUYER’S bank or the BUILDER’S bank
shall be for the account of the BUYER.”.

 

 

2                             Save
as provided in clause 1 of this Addendum, the terms of the Contract will not be
otherwise amended and shall remain in full force and effect.

 

3                             This
Addendum shall be kept strictly private and confidential by both parties hereto
and shall not be disclosed to any third party. However, the parties may
disclose this Addendum to a third party to the extent necessary to perform the
Contract (such as the Buyer’s banks providing financing to the Buyer for the
payment of the Contract Price) or if required by any law or regulation or court
order, and in such case the parties shall instruct such third party to observe
the full confidentiality of this Addendum.

 

4                             Each
party hereby confirms that all internal procedures relevant to such party have
been taken and all consents relevant to such party have been duly obtained
regarding the amendments to the Contract pursuant to this Addendum save for any
consents required to be obtained by the Buyer in connection with this Addendum
pursuant to the Predelivery Security Assignment which consents will be obtained
and provided by the Buyer to the Builder within five (5) days from the
date of this Addendum.

 

5                             This
Addendum and any-non-contractual obligations connected with this Addendum and
the Contract shall be governed by English law.

 

IN
WITNESS whereof the parties to this Addendum have caused this
Addendum to be duly executed on the date first above written.

 

 

EXHIBIT “A”

 

Form of Second Supplemental
Letter to Refund Guarantee

 

[TO BE TYPED AND PRINTED ON THE LETTERHEAD OF THE EXPORT-IMPORT BANK OF
KOREA]

 

[·] 200[·]

 

	
  To:

  	
  Suez Jade Limited

  
	
   

  	
  Trust Company Complex

  
	
   

  	
  Ajeltake Road

  
	
   

  	
  Ajeltake Island

  
	
   

  	
  Majuro, Marshall
  Islands MH96960

  

 

Gentlemen

 

Letter
of Guarantee No. M0902-806-LG-00064 dated 5 June 2008 (the “Original
Letter of Guarantee”) as amended and supplemented by a supplemental letter
dated 1 December 2008 (the “First Supplemental Letter of Guarantee” and
together with the Original Letter of Guarantee, the “Letter of Guarantee”)

 

We refer to:

 

1                             a
shipbuilding contract dated 2 June 2008 (the “Original Contract”) as amended and supplemented by addendum
No.1 dated 17 November 2008 (“Addendum No. 1”
and together with the Original Contract referred to as the “Principal Contract”) and as further
amended by addendum No. 2 dated 17 December 2008 (“Addendum No. 2” and together with the
Principal Contract referred to as the “Contract”),
each made between Suez Jade Limited (the “Buyer”)  and Hyundai Heavy Industries Co., Ltd.
(the “Builder”)  for the construction of one (1) 158,000
DWT class crude oil carrier bearing Hull No. 2302; and

 

2                             the
Original Letter of Guarantee and the First Supplemental Letter of Guarantee (a
copy of each of which is attached to this letter and marked as Exhibits “A” and
“B” respectively) issued by us in your favour and pursuant to which we have
guaranteed to you the refund of any advance payments made by you to the Builder
under the Contract.

 

We hereby confirm that we
have reviewed the terms of Addendum No. 2 and consent to the amendments to
the Principal Contract contained in Addendum No. 2 and agree that the
Letter of Guarantee and our obligations thereunder shall remain and continue in
full force and effect notwithstanding the said amendments to the Principal
Contract contained in Addendum No. 2 Provided however that the Letter of
Guarantee is hereby further amended by deleting in the fourth line of the third
paragraph of the Letter of Guarantee the words “US$46,669,207 (Say U.S. Dollars
Forty Six Million Six Hundred and Sixty Nine Thousand Two Hundred and Seven
only)” and by inserting in their place the words “US$46,789,323 (Say U.S.
Dollars Forty Six Million Seven Hundred and Eighty Nine Thousand Three Hundred
and Twenty Three only)”.

 

 

This supplemental letter
and any non-contractual obligations connected with this supplemental letter and
the Letter of Guarantee are governed by and shall be construed in accordance
with English law.

 

Yours faithfully,

 

 

For and on behalf of

THE EXPORT-IMPORT BANK OF KOREA

 

 

	
  By:

  	
   

  	
   

  

 

 

	
  SIGNED for and on behalf of

  	
  )

  	
   

  
	
  SUEZ JADE LIMITED

  	
  )

  	
   

  
	
  by: 

  	
  [ILLEGIBLE]

  	
  )

  	
  /s/ [ILLEGIBLE]

  
				

 

 

	
  SIGNED for and on behalf of

  	
  )

  	
   

  
	
  HYUNDAI HEAVY INDUSTRIES CO., LTD.

  	
  )

  	
   

  
	
  by: 

  	
  E. C. HAN

  	
  )

  	
  /s/ E. C. HANExhibit 10.5

 

SHIPBUILDING CONTRACT

 

 

FOR

 

 

THE CONSTRUCTION OF

 

 

ONE (1) 158,000 DWT CLASS CRUDE
OIL CARRIER

 

 

HULL NO.2303

 

 

BETWEEN

 

 

SUEZ PEARL LIMITED

 

 

(AS BUYER)

 

 

AND

 

 

HYUNDAI HEAVY INDUSTRIES CO. LTD

 

 

(AS BUILDER)

 

 

INDEX

 

	
  Article

  	
   

  	
  Page

  
	
  ARTICLE I: DESCRIPTION
  AND CLASS

  	
   

  	
  2

  
	
  ARTICLE II: CONTRACT
  PRICE

  	
   

  	
  4

  
	
  ARTICLE III: ADJUSTMENT
  OF THE CONTRACT PRICE

  	
   

  	
  5

  
	
  ARTICLE IV: INSPECTION
  AND APPROVAL

  	
   

  	
  7

  
	
  ARTICLE V: MODIFICATIONS, CHANGES AND EXTRAS

  	
   

  	
  11

  
	
  ARTICLE VI: TRIALS AND
  COMPLETION

  	
   

  	
  13

  
	
  ARTICLE VII: DELIVERY

  	
   

  	
  15

  
	
  ARTICLE VIII: DELAYS
  AND EXTENSIONS OF TIME (FORCE MAJEURE)

  	
   

  	
  17

  
	
  ARTICLE IX: WARRANTY OF
  QUALITY

  	
   

  	
  19

  
	
  ARTICLE X: PAYMENT

  	
   

  	
  22

  
	
  ARTICLE XI: BUYER’S
  DEFAULT

  	
   

  	
  25

  
	
  ARTICLE XII: BUYER’S
  SUPPLIES

  	
   

  	
  27

  
	
  ARTICLE XIII:
  ARBITRATION

  	
   

  	
  28

  
	
  ARTICLE XIV: SUCCESSORS
  AND ASSIGNS

  	
   

  	
  29

  
	
  ARTICLE XV: TAXES AND
  DUTIES

  	
   

  	
  30

  
	
  ARTICLE XVI: PATENTS,
  TRADEMARKS AND COPYRIGHTS

  	
   

  	
  31

  
	
  ARTICLE XVII:
  INTERPRETATION AND GOVERNING LAW

  	
   

  	
  32

  
	
  ARTICLE XVIII: NOTICE

  	
   

  	
  33

  
	
  ARTICLE XIX: INSURANCE

  	
   

  	
  34

  
	
  ARTICLE XX: BUILDER’S
  DEFAULT

  	
   

  	
  35

  
	
  ARTICLE XXI:
  EFFECTIVENESS OF THIS CONTRACT

  	
   

  	
  36

  
	
  ARTICLE XXI:
  EXCLUSIVENESS

  	
   

  	
  37

  

 

 

SHIPBUILDING CONTRACT

 

THIS
CONTRACT is made
on this 2nd day of June, 2008 by and between SUEZ PEARL LIMITED (hereinafter called the “BUYER”), a corporation incorporated and existing
under the laws of The Republic of the Marshall Islands with its registered
office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro,
Marshall Islands MH 96960, the party of the first part and HYUNDAI HEAVY INDUSTRIES CO., LTD., a company
organized and existing under the laws of the Republic of Korea, having its
registered office at 1, Jeonha-Dong, Dong-Gu, Ulsan, Korea (hereinafter called
the “BUILDER”),  the party of the second part,

 

W I T N E S S E T H:

 

In consideration of the
mutual covenants contained herein, the BUILDER agrees to design, build, launch,
equip, test and complete one (1) 158,000 DWT Class Crude Oil Carrier
as described in Article I hereof (hereinafter called the “VESSEL”) at the BUILDER’S shipyard in
Gunsan, Korea (hereinafter called the “SHIPYARD”)
and to deliver and sell the VESSEL to the BUYER, and the BUYER
agrees to accept delivery of and purchase from the BUILDER the VESSEL,
according to the terms and conditions hereinafter set forth.

 

(End of Preamble)

 

1

 

ARTICLE
I:   DESCRIPTION AND CLASS

 

1                            DESCRIPTION

 

The VESSEL shall have the
BUILDER’S Hull No. 2303 and shall be designed, constructed, equipped,
launched, tested and completed in accordance with the provisions of this
Contract and the specifications No. COOB158-FS-P1 dated 7 May 2008 as
amended by the BUILDER’S Reply/Clarifications to BUYER’S comments ref. no.
COOB158-01-R2 dated 31 May 2008 and the general arrangement plan No. IG-7000-201
dated 30 May 2008 (hereinafter called the “SPECIFICATIONS and the PLAN”)
signed on the cover page and initialled on each page by
both parties, which shall constitute an integral part of the CONTRACT although
not attached hereto.

 

The SPECIFICATIONS and
the PLAN are intended to explain each other and anything shown on the PLAN and
not stipulated in the SPECIFICATIONS or anything stipulated in the
SPECIFICATIONS and not shown on the PLAN shall be deemed and considered as if
included in both. Should there be any inconsistencies or contradictions between
the SPECIFICATIONS and the PLAN, the SPECIFICATIONS shall prevail. Subject to
the provisions of Article 1.4 hereof should there be any inconsistencies
or contradictions between this CONTRACT and the SPECIFICATIONS and the PLAN
this CONTRACT shall prevail.

 

2                            BASIC DIMENSIONS AND
PRINCIPAL PARTICULARS OF THE VESSEL

 

(a)                     The basic
dimensions and principal particulars of the VESSEL shall be:

 

	
   

  	
  Length, overall

  	
  Maximum

  	
  274.00 metres

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Length, between
  perpendiculars

  	
   

  	
  264.00 metres

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Breath, moulded

  	
   

  	
  48.00 metres

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Depth to Upper Deck,
  moulded

  	
   

  	
  23.10 metres

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Scantling draft,
  moulded, in seawater of specific gravity of 1.025

  	
   

  	
  17.15 metres

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Deadweight on the above
  moulded scantling draft of 17.15 metres

  	
   

  	
  158,460 M/T (the
  “GUARANTEED DEADWEIGHT”)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Main propelling
  machinery

  	
   

  	
  Hyundai BMW
  6S70MC-C8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MCR: 

  	
   

  	
  19,620 kW

  	
  x 91.0 RPM

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NCR: 

  	
   

  	
  17,658 kW

  	
  x 87.9 RPM

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Service speed at 16
  metres design draft at the condition of clean bottom and in calm and deep sea
  with main engine developing a NCR of 17,658 kW with fifteen per cent (15%)
  sea margin

  	
   

  	
  16 KNOTS (the “GUARANTEED SPEED”)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Specific Fuel
  consumption of the main engine applying I.S.O. reference conditions to the
  result of official shop test at a MCR of 19,620 kW using marine diesel oil
  having lower calorific value of 42,700 kJ/kg.

  	
   

  	
  169g/kW.h (the “GUARANTEED FUEL CONSUMPTION”)

  

 

The details of the above
particulars as well as the definitions and method of measurements and
calculations are as provided in the SPECIFICATIONS.

 

(b)                    The dimensions
may be slightly modified by the BUILDER, who also reserves the right to make
changes to the SPECIFICATIONS and the PLAN if found necessary to suit the local
conditions and facilities of the SHIPYARD, the availability of materials and
equipment, the

 

2

 

introduction of improved
production methods or otherwise, subject in each case to the approval of the
BUYER.

 

3                            CLASSIFICATION, RULES AND
REGULATIONS

 

(a)                     The VESSEL
shall be built in compliance with the current rules and regulations of
Lloyds Registry, or such other Classification Society as may be nominated by
the BUYER by 30 September 2008 (hereinafter called the “CLASSIFICATION SOCIETY”).  The expression current rules and
regulations shall mean those in effect as of the date of execution of this
CONTRACT by all parties hereto (which shall be deemed to include rules and
regulations adopted and ratified as of the date of this CONTRACT having a
mandatory application date, adopted at the time of execution of this CONTRACT,
falling after the date hereof but before 31 December 2010 to be classed
and registered as “+100A1, Double Hull Oil Tanker CSR, ESP, ShipRight (CM,
ACS(B)), LI, *IWS, SPM, +LMC, UMS, IGS, with descriptive notes Pt.Ht, ShipRight
(BWMP(s), SCM), COW, ETA, NAV1, EP” and also to comply with the rules and
regulations, in force as of the date of this CONTRACT, and requirements
described in the SPECIFICATIONS, in effect as of the date of execution of this
CONTRACT by all parties hereto (which shall be deemed to include rules and
regulations adopted and ratified as of the date of this CONTRACT having a
mandatory application date, adopted at the time of execution of this CONTRACT
falling after the date hereof but before 31 December 2010.

 

(b)                    The BUILDER
shall arrange with the CLASSIFICATION SOCIETY for the assignment by the
CLASSIFICATION SOCIETY of representative(s) to the VESSEL during
construction. All fees and charges incidental to the classification of the VESSEL
in compliance with the above specified rules, regulations and requirements of
this CONTRACT shall be for the account of the BUILDER.

 

(c)                     The decision
of the CLASSIFICATION SOCIETY as to whether the VESSEL complies with the rules and
regulations of the CLASSIFICATION SOCIETY shall be final and binding upon the
BUILDER and the BUYER.

 

(d)                    The BUILDER
shall disclose to the BUYER at their request correspondence related to the
VESSEL’s hull key plans exchanged between the BUILDER and the CLASSIFICATION SOCIETY
during the initial design stage. It is understood that the disclosure is for
BUYER’s information only and that the BUYER does not have the right to
interfere or comment with respect to the disclosed correspondence between the
BUILDER and the CLASSIFICATION SOCIETY, so as that said disclosure will be for
information purposes only.

 

4                            SUBCONTRACTING

 

The BUILDER may
sub-contract in accordance with the SPECIFICATIONS without the BUYER’S prior
written approval always provided that:

 

(i)                       The BUILDER
shall not sub-contract any part of the VESSEL or the construction work to
contractors outside Korea; and

 

(ii)                    The
pre-erection and final erection of the VESSEL shall not take place outside the
Shipyard except for the accommodation block, bulbous bow, engine casing and
stern frame, which may be erected without pre-erection at the Shipyard
according to the BUILDER’S practice.

 

The BUILDER may with the
prior written approval of the BUYER sub-contract any other part of the VESSEL
or of the construction work.

 

Whenever the BUILDER
sub-contracts any part of the VESSEL or the construction work the BUILDER shall
remain fully responsible for the product of the works and the performance of
the VESSEL.

 

5                            REGISTRATION OF THE VESSEL

 

The VESSEL shall be
registered by the BUYER at its own cost and expense under the laws of The
Republic of the Marshall Islands at its home port of Majuro at the time of its
delivery and acceptance hereunder.

 

(End
of Article)

 

3

 

ARTICLE II:   CONTRACT PRICE

 

The contract price of the
VESSEL delivered to the BUYER at the SHIPYARD shall be United States Dollars
Ninety Two Million and Two Hundred Thousand (US$92,200,000) (hereinafter called
the “CONTRACT PRICE”) which shall
be paid plus any increases or less any decreases due to adjustment or
modifications, if any, as set forth in this CONTRACT. The above CONTRACT PRICE
shall include payment for services in the inspection, tests, survey and
classification of the VESSEL which will be rendered by the CLASSIFICATION
SOCIETY and shall not include the cost of the BUYER’S SUPPLIES as stipulated in
Article XII, but shall include the cost of storing, safekeeping, handling
and installing the BUYER’S SUPPLIES as per Article XII.

 

The CONTRACT PRICE also
includes all costs and expenses for supplying all necessary drawings as
stipulated in the SPECIFICATIONS except those to be furnished by the BUYER for
the VESSEL in accordance with the SPECIFICATIONS.

 

(End
of Article)

 

4

 

ARTICLE III:   ADJUSTMENT OF THE CONTRACT PRICE

 

The CONTRACT PRICE of the
VESSEL shall be adjusted as hereinafter set forth in the event of the following
contingencies. It is hereby understood by both parties that any adjustment of
the CONTRACT PRICE as provided for in this Article is by way of liquidated
damages and not by way of penalty.

 

1                            DELAYED DELIVERY

 

(a)                     No adjustment
shall be made and the CONTRACT PRICE shall remain unchanged for the first
thirty (30) days of delay in delivery of the VESSEL (ending as of 12 o’clock
midnight Korean Standard Time on the thirtieth (30th) day of delay) beyond the Delivery Date
calculated as provided in Article VII. 1 hereof.

 

(b)                    If the
delivery of the VESSEL is delayed more than thirty (30) days beyond the date
upon which the delivery is due from the BUILDER under the terms of this
CONTRACT, then, beginning at midnight of the thirtieth (30th) day after such due date, the CONTRACT
PRICE of the VESSEL shall be reduced by U.S. Dollars Twenty Five Thousand
(US$25,000) for each full day of delay.

 

However, unless the
parties agree otherwise, the total amount of deduction from the CONTRACT PRICE
shall not exceed the amount due to cover the delay of one hundred and eighty
(180) days after thirty (30) days of the delay in delivery of the VESSEL at the
rate of deduction as specified herein above.

 

(c)                     But if the
delay in delivery of the VESSEL continues for a period of more than two hundred
and ten (210) days beyond the date upon which the delivery is due from the
BUILDER under the terms of this CONTRACT then, in such event and after such
period has expired, the BUYER may, at its option, cancel this CONTRACT by
serving upon the BUILDER a notice of cancellation by facsimile to be confirmed
by a registered letter via airmail or courier directed to the BUILDER at the
address given in this CONTRACT. Such cancellation shall be effective as of the
date the notice thereof is received by the BUILDER. If the BUYER has not served
the notice of cancellation after the aforementioned two hundred and ten (210)
days delay in delivery, the BUILDER may demand the BUYER to make an election in
accordance with Article VIII.3 hereof.

 

(d)                    For the
purpose of this Article, the delivery of the VESSEL shall be deemed to be
delayed when and if the VESSEL, after taking into full account extension of the
Delivery Date or permissible delays as provided in Article V, VI, VIII, XI
or elsewhere in this CONTRACT, is delivered beyond the date upon which delivery
would then be due under the terms of this CONTRACT.

 

2                            INSUFFICIENT SPEED

 

(a)                     The CONTRACT
PRICE of the VESSEL shall not be affected or changed, if the actual speed, as
determined by trial runs more fully described in Article VI hereof, is
less than the Guaranteed Speed provided such deficiency in actual speed is not
more than three-tenth (3/10ths)
of a knot below the Guaranteed Speed.

 

(b)                    However, as
for the deficiency of more than three-tenth (3/10ths) of a knot in actual speed below the
Guaranteed Speed, the CONTRACT PRICE shall be reduced by U.S.Dollars One
Hundred and Forty Thousand (US$140,000) for each full one-tenth (1/10th) of a knot in excess of the
said three-tenth (3/10ths) of
a knot of deficiency in speed (fractions of less than one-tenth (1/10th) of a knot shall be regarded
as a full one-tenth (1/10th) of
a knot). However, unless the parties agree otherwise, the total amount of
reduction from the CONTRACT PRICE shall not exceed the amount due to cover the
deficiency of eight-tenths (8/10ths)
of one (1) full knot below the Guaranteed Speed at the rate of reduction
as specified above.

 

(c)                     If the
deficiency in actual speed of the VESSEL is more than eight-tenths (8/10ths) of one (1) full knot
below the Guaranteed Speed under this CONTRACT, then the BUYER, at its option,
may, subject to the BUILDER’S right to effect alterations or corrections as
provided in Article VI.5. hereof, cancel this CONTRACT or may accept the
VESSEL at a reduction in the

 

5

 

CONTRACT PRICE as above
provided for eight-tenths 8/10ths) of one (1) full knot of
deficiency only.

 

3                            EXCESSIVE FUEL CONSUMPTION

 

(a)                     The CONTRACT
PRICE shall not be affected or changed by reason of the fuel consumption of the
VESSEL’s main engine, as determined by the engine manufacturer’s shop trial as
per the SPECIFICATIONS being more than the Guaranteed Fuel Consumption of the
VESSEL’s main engine, if such excess is not more than five per cent (5%) over
the Guaranteed Fuel Consumption.

 

(b)                    However, as
for the excess of more than five per cent (5%) in the actual fuel consumption
over the Guaranteed Fuel Consumption of the VESSEL’s main engine, the CONTRACT
PRICE shall be reduced by U.S.Dollars One Hundred and Forty Five Thousand
(U.S.$145,000) for each full one per cent (1%) increase in fuel consumption in
excess of the said five per cent (5%) increase in fuel consumption (fractions
of less than one per cent (1%) shall be regarded as a full one per cent (1%)).
However, unless the parties agree otherwise, the total amount of reduction from
the CONTRACT PRICE shall not exceed the amount due to cover the excess of eight
percent (8%) over the Guaranteed Fuel Consumption of the VESSEL’s main engine
at the rate of reduction as specified above.

 

(c)                     If such
actual fuel consumption exceeds the Guaranteed Fuel Consumption of the VESSEL’s
main engine by more than eight per cent (8%), the BUYER, at its option, may,
subject to the BUILDER’S right to effect alterations or corrections as
specified in Article VI.5. hereof, cancel this CONTRACT or may accept the
VESSEL at a reduction in the CONTRACT PRICE as above provided for the eight per
cent (8%) increase only.

 

4                            DEADWEIGHT BELOW CONTRACT
REQUIREMENTS

 

(a)                     The CONTRACT
PRICE of the VESSEL shall not be affected or changed if the actual deadweight
determined as provided in this CONTRACT and the SPECIFICATIONS is below the
Guaranteed Deadweight by an amount of one thousand four hundred metric tons
(1,400m.t.) or less. However, should the deficiency in the actual deadweight of
the VESSEL be more than one thousand four hundred metric tons (1,400m.t.) below
the Guaranteed Deadweight, then the CONTRACT PRICE of the VESSEL shall be
reduced for each full one (1) metric ton (fractions of less than one (1) metric
ton shall be disregarded) of decreased deadweight in excess of one thousand
four hundred metric tons (1,400m.t.) by the sum of U.S.Dollars One Thousand
(US$1,000) per metric ton.

 

However, unless the
parties agree otherwise, the total amount of deduction from the CONTRACT PRICE
shall not exceed the amount due to cover the deficiency of two thousand six
hundred metric tons (2,600m.t.) below the Guaranteed Deadweight hereinabove.

 

(b)                    If the
deficiency in the deadweight of the VESSEL is more than two thousand six
hundred metric tons (2,600m.t.) below the Guaranteed Deadweight, then the
BUYER, at its option, either cancel this CONTRACT or accept the VESSEL at a
reduction in the CONTRACT PRICE as above provided for one thousand two hundred
metric tons (1,200m.t.) of deficiency only.

 

5                            EFFECT OF CANCELLATION

 

It is expressly understood
and agreed by the parties hereto that in any case, if the BUYER cancels this
CONTRACT under this Article, the BUYER shall not be entitled to any liquidated
damages.

 

6                            CUMULATIVE EFFECT OF
LIQUIDATED DAMAGES

 

The liquidated damages
payable under this Article are cumulative and not exclusive.

 

(End
of Article)

 

6

 

ARTICLE IV:   INSPECTION
AND APPROVAL

 

1                            APPOINTMENT OF BUYER’S
REPRESENTATIVE

 

The BUYER shall despatch
to and maintain at the SHIPYARD, at its own cost, expense and risk, one or more
representatives (hereinafter each called the “BUYER’S
REPRESENTATIVE”), who shall be duly accredited in writing by the
BUYER to supervise adequately the construction by the BUILDER of the VESSEL,
her equipment and all accessories. Before the commencement of any item of work
under this CONTRACT, the BUILDER shall previously exhibit, furnish to, and,
within the limits of the BUYER’S REPRESENTATIVE’S authority, secure the
approval from, the BUYER’S REPRESENTATIVE of any and all plans and drawings
prepared in connection therewith. Upon appointment of the BUYER’S
REPRESENTATIVE, the BUYER shall notify the BUILDER in writing of the name and
the scope of the authority of the BUYER’S REPRESENTATIVE.

 

2                            AUTHORITY OF THE BUYER’S
REPRESENTATIVE

 

Such BUYER’S
REPRESENTATIVE shall, at all times during working hours of the construction and
until delivery and acceptance of the VESSEL, have the right to inspect the
VESSEL, her equipment and all accessories, and work in progress, or materials
utilized in connection with the construction of the VESSEL, wherever such work
is being done or such materials are stored, for the purpose of determining that
the VESSEL, her equipment and accessories are being constructed in accordance
with the terms of this CONTRACT and/or the SPECIFICATIONS and the PLAN.

 

The BUILDER will
endeavour to arrange for the inspection by the BUYER’s REPRESENTATIVE during
working hours of the BUILDER. However, such inspection will take place within
the BUILDER’S normal working hours (0800 to 1800) including weekends and/or
holiday if this is considered necessary by the BUILDER in order to meet the
BUILDER’S construction schedule, on the condition that the BUILDER will inform
the BUYER’s REPRESENTATIVE at least two (2) days in advance of such
inspection.

 

The BUYER’s
REPRESENTATIVE shall have the right to attend all tests and inspections
performed at the BUILDER’S and/or any sub-contractor’s, manufacturer’s,
supplier’s or vendor’s facility. The BUILDER shall, notify the BUYER reasonably
in advance in writing of the time and place of inspections and tests required
under the CONTRACT and SPECIFICATIONS, and the BUILDER shall make every effort
to avoid overlapping between any such inspections and tests. All inspections and
tests shall be performed at the BUILDER’S cost and expense, but the BUYER shall
bear all costs and expenses relating to the attendance of such inspections and
tests by the BUYER’s REPRESENTATIVE.

 

The BUYER’S
REPRESENTATIVE shall, within the limits of the authority conferred upon him by
the BUYER, make decisions or give advice to the BUILDER on behalf of the BUYER
promptly on all problems arising out of, or in connection with, the
construction of the VESSEL and generally act in a reasonable manner with a view
to co-operating to the utmost with the BUILDER in the construction process of
the VESSEL.

 

The decision, approval or
advice of the BUYER’S REPRESENTATIVE shall be deemed to have been given by the
BUYER and once given shall not be withdrawn, revoked or modified except with
the consent of the BUILDER. The BUYER’S REPRESENTATIVE shall notify the BUILDER
promptly in writing of his discovery of any construction or materials, which he
believes do not or will not conform to the requirements of the CONTRACT and the
SPECIFICATIONS and the PLAN and likewise advise and consult with the BUILDER on
all matters pertaining to the construction of the VESSEL as may be required by
the BUILDER or as he may deem necessary.

 

However, if the BUYER’S
REPRESENTATIVE fails to submit to the BUILDER without delay any such demand
concerning alterations or changes with respect to the construction, arrangement
or outfitting of the VESSEL, which the BUYER’S REPRESENTATIVE has examined,
inspected or attended at the test thereof under this CONTRACT or the
SPECIFICATIONS, the BUYER’S REPRESENTATIVE shall be deemed to have approved the
same and shall be precluded from making any demand for alterations, changes, or
complaints with respect thereto at a later date.

 

The BUILDER shall comply
with any such demand which is not contradictory to this CONTRACT and the
SPECIFICATIONS and the PLAN, provided that any and all such demands by the
BUYER’S REPRESENTATIVE with regard to construction, arrangement and outfitting
of the VESSEL shall be submitted in writing to the authorised representative of
the BUILDER. The BUILDER shall notify the

 

7

 

BUYER’S REPRESENTATIVE of
the names of the persons who are from time to time authorised by the BUILDER
for this purpose.

 

It is agreed upon between
the BUYER and the BUILDER that the modifications, alterations or changes and
other measures necessary to comply with such demand may be effected at a
convenient time and place at the BUILDER’S reasonable discretion in view of the
construction schedule of the VESSEL.

 

In the event that the
BUYER’S REPRESENTATIVE shall advise the BUILDER that he has discovered, or
believes, that the construction or materials do not or will not conform to the
requirements of this CONTRACT and the SPECIFICATIONS and the PLAN the BUILDER
shall not agree with the views of the BUYER’S REPRESENTATIVE in such respect,
either the BUYER or the BUILDER may, with the agreement of the other party,
seek an opinion of the CLASSIFICATION SOCIETY or failing such agreement,
request an arbitration in accordance with the provisions of Article XIII
hereof. The CLASSIFICATION SOCIETY or the arbitration tribunal, as the case may
be, shall determine whether or not a non-conformity with the provisions of this
CONTRACT, the SPECIFICATIONS and the PLAN exists. If the CLASSIFICATION SOCIETY
or the arbitration tribunal, as the case may be, enters a determination in
favour of the BUYER, then in such case the BUILDER shall make the necessary
alterations or changes, or if such alterations or changes cannot be made in
time to meet the construction schedule for the VESSEL, the BUILDER may make a
fair and reasonable offer to adjust the CONTRACT PRICE in lieu of such
alterations and changes which the BUYER may at its sole discretion agree to
accept. If the CLASSIFICATION SOCIETY or the arbitration tribunal, as the case
may be, enters a determination in favour of the BUILDER, then the time for
delivery of the VESSEL shall be extended for the period of delay in
construction, if any, occasioned by such proceedings, and the BUYER shall
compensate the BUILDER for the proven loss and damages incurred by the BUILDER
as a result of the dispute herein referred to.

 

3                            APPROVAL OF DRAWINGS

 

(a)                     The BUILDER
shall submit to the BUYER three (3) copies of each of the plans and
drawings to be submitted to the BUYER for its approval at its address as set
forth in Article XVIII hereof. The BUYER shall, within seventeen (17) days
after receipt thereof return to the BUILDER one (1) copy of such plans and
drawings together with the approval or comments, if any, of the BUYER. The
BUILDER shall advise the BUYER of its approval or rejection of the BUYER’S
comments, if any, within seventeen (17) days of receipt thereof. A list of the
plans and drawings to be so submitted to the BUYER and the order of submission
thereof shall be mutually agreed upon between the parties hereto prior to any
plan or drawing being submitted to the BUYER.

 

(b)                    Provided that
the plans and drawings have been submitted in the order agreed in sub-
paragraph (a) above, in the event that the BUYER or the BUYER’S
REPRESENTATIVE shall fail to return the plans and drawings to the BUILDER
within the time limit as hereinabove provided, such plans and drawings shall be
deemed to have been automatically approved without any comment. In the event
that the BUILDER fails to advise the BUYER of the acceptance or rejection of
any of the BUILDER’S comments within the time limit specified above, such
comments shall be deemed as approved by the BUILDER. In the event the plans and
drawings submitted by the BUILDER to the BUYER or the BUYER’S REPRESENTATIVE in
accordance with this Article do not meet with the BUYER or the BUYER’S
REPRESENTATIVE’S approval, the matter may be submitted by either party hereto
for determination pursuant to Article XIII hereof. If the BUYER’S comments
on the plans and drawings that are returned to the BUILDER by the BUYER within
the said time limit are not clear or clearly specified or detailed, the BUILDER
shall be entitled to place its own interpretation on such comments in
implementing them, provided it has first asked the BUYER for a clear copy or
for clarification and it has either not received such clear copy or
clarification within three (3) business days from asking for the same or
the clarification provided was incomprehensible.

 

For the avoidance of
doubt, the BUILDER shall be solely responsible for all aspects of design,
construction, workmanship and completion of the VESSEL in accordance with this
CONTRACT and the SPECIFICATIONS. No liability which would otherwise be imposed
on the BUILDER under this CONTRACT shall in any way be prejudiced or affected
by the fact that it arises in relation to (i) any plan or drawing
commented on or approved by the BUYER or the BUYER’S REPRESENTATIVE.

 

8

 

4                            SALARIES AND EXPENSES

 

All salaries and expenses
of the BUYER’S REPRESENTATIVE or any other person or persons employed by the
BUYER hereunder shall be for the BUYER’S account.

 

5                            RESPONSIBILITY OF THE
BUILDER

 

(a)                     The BUILDER
shall provide the BUYER’S REPRESENTATIVE and his assistants free of charge with
suitably furnished and adequate in size office space at, or in the immediate
vicinity of, the SHIPYARD together with telephone, facsimile, computer and
modem outlet and such other facilities as may be necessary to enable the BUYER’S
REPRESENTATIVE and his assistants to carry out their work under this CONTRACT.
However, the BUYER shall pay for the telephone or facsimile facilities used by
the BUYER’S REPRESENTATIVE or his assistants.

 

With an ample prior
notice by the BUYER, the BUILDER shall arrange suitable and convenient living
quarters for the BUYER’S REPRESENTATIVES nearest possible to the Shipyard which
living quarters shall be provided for the entire construction period, all at
the BUYER’S expense.

 

The BUILDER shall assist
the BUYER to arrange that the necessary visas, working permits and/or other
documents that may be necessary for the BUYER’S REPRESENTATIVE to enter and
remain and work in Korea will be issued in order on demand and without delay
provided that the BUYER’S REPRESENTATIVE meets the requirements and laws of
Korea.

 

The BUILDER, its
employees, agents and sub-contractors, during its working hours until delivery
and acceptance of the VESSEL, shall arrange for the BUYER’S REPRESENTATIVE to
have free and ready access to the VESSEL, her equipment and accessories and to
any other place (except the areas controlled for the purpose of national
security) where work is being done or materials are being processed or stored
in connection with the construction of the VESSEL including the premises of
sub-contractors.

 

The BUYER’S
REPRESENTATIVE or his assistants or employees shall observe the work rules and
regulations and the guidances prevailing at the BUILDER’S and its
sub-contractor’s premises as advised to the BUYER’S REPRESENTATIVE in writing
in English. The BUILDER shall promptly provide to the BUYER’S REPRESENTATIVE
and/or his assistants and shall ensure that its sub-contractors shall promptly
provide all such information as he or they may reasonably request in connection
with the construction of the VESSEL and her engines, equipment and machinery.

 

(b)                    The BUYER’S
REPRESENTATIVE and his assistants shall at all times remain the employees of
the BUYER. The BUILDER shall not be liable to the BUYER or the BUYER’S
REPRESENTATIVE or to his assistants or to the BUYER’S employees or agents for
personal injuries, including death, during the time they, or any of them, are
on the VESSEL or within the premises of either the BUILDER or its
sub-contractors or are otherwise engaged in and about the construction of the
VESSEL, unless, however, such personal injuries, including death, are caused by
the gross negligence of the BUILDER, its sub-contractors, or its or their
employees or agents. The BUILDER shall not be liable to the BUYER for damages
to, or destruction of, property of the BUYER or of the BUYER’S REPRESENTATIVE
or his assistants or the BUYER’S employees or agents, unless such damages, loss
or destruction have been caused by the gross negligence of the BUILDER, its
sub-contractors or its or their employees or agents.

 

The BUYER and the BUYER’S
REPRESENTATIVE or their respective assistant(s) shall be under no
liability whatsoever to the BUILDER, or to its employees, subcontractors or
agents for personal injuries, including death to such employees, subcontractors
or agents, during the time they or any of them are in the SHIPYARD or within
the premises of the BUILDER or its subcontractors or are otherwise engaged in
and upon the construction of the VESSEL unless, however, such personal injuries
including death have been caused by the gross negligence of the BUYER and/or
the BUYER’S REPRESENTATIVE or their respective assistant(s) while acting
within the scope of their employment. Nor shall the BUYER and/or the BUYER’S
REPRESENTATIVE or their respective assistant(s) be under any liability
whatsoever to the BUILDER or to its employees, agents or subcontractors for
damage to, loss or destruction of, property of the BUILDER’S employees,
subcontractors or agents unless such damage, loss or destruction has been
caused by the gross negligence of the BUYER and/or the BUYER’S

 

9

 

REPRESENTATIVE or their
respective assistant(s) while acting within the scope of their employment.

 

6                            RESPONSIBILITY OF THE BUYER

 

The BUYER shall undertake
and assure that the BUYER’S REPRESENTATIVE and his assistants shall carry out
their duties hereunder in accordance with the normal shipbuilding practice and
in such a way as to avoid any unnecessary increase in building cost, delay in
the construction of the VESSEL, and/or any disturbance in the construction
schedule of the BUILDER.

 

The BUILDER has the right
to request the BUYER to replace any of the BUYER’S REPRESENTATIVE and/or his
assistants who are deemed unsuitable and unsatisfactory for the proper progress
of the VESSEL’S construction. The BUYER shall investigate the situation by
sending its representative(s) to the SHIPYARD and if the BUYER considers
that such BUILDER’S request is justified, the BUYER shall effect the
replacement as soon as conveniently arrangeable.

 

(End
of Article)

 

10

 

ARTICLE V:   MODIFICATIONS, CHANGES AND EXTRAS

 

1                            HOW EFFECTED

 

Modifications or changes
to the SPECIFICATIONS and the PLAN under which the VESSEL is to be constructed
may be made at any time hereafter by written agreement of the parties hereto.
For the avoidance of doubt modifications required as a result of changes in Class Rules and
Regulations shall be governed by Clause 3 of this Article. Any modification or
change requested by the BUYER which does not affect the frame-work of the
SPECIFICATIONS shall be agreed to by the BUILDER if the BUYER agrees to a
reasonable adjustment of the CONTRACT PRICE, deadweight and/or cubic capacity,
speed requirements, the Delivery Date and other terms and conditions of this
CONTRACT reasonably required as a result of such modification or change. The
BUILDER has the right to continue construction of the VESSEL on the basis of
the SPECIFICATIONS and the PLAN until the BUYER has agreed to such adjustments.
The BUILDER shall be entitled to refuse to make any alteration, change or
modification of the SPECIFICATIONS and/or the PLAN requested by the BUYER, if
the BUYER does not agree to the aforesaid adjustments within seven (7) days
of the BUILDER’S notification of the same to the BUYER, or, if, in the BUILDER’S
reasonable judgment, the compliance with such request of the BUYER would cause
an unreasonable disruption of the normal working schedule of the SHIPYARD.

 

The BUILDER, however,
agrees to exert reasonable efforts to accommodate such reasonable request by
the BUYER so that the said change and modification shall be made at a
reasonable cost and within the shortest period of time reasonably possible. The
aforementioned agreement to modify and change the SPECIFICATIONS and the PLAN
may be effected by exchange of letters or facsimiles manifesting the agreement.

 

The letters and
facsimiles exchanged by the parties pursuant to the foregoing shall constitute
an amendment to this CONTRACT and the SPECIFICATIONS or the PLAN under which
the VESSEL shall be built. Upon consummation of such an agreement to modify and
change the SPECIFICATIONS or the PLAN, the BUILDER shall alter the construction
of the VESSEL in accordance therewith including any addition to, or deduction
from, the work to be performed in connection with such construction.

 

2                            SUBSTITUTION OF MATERIAL

 

If, notwithstanding
reasonable efforts on the part of the BUILDER, any materials, machinery or
equipment required for the construction of the VESSEL by the SPECIFICATIONS and
the PLAN or otherwise under this CONTRACT cannot be procured in time to meet
the BUILDER’S construction schedule for the VESSEL or are in short supply
(although ordered in due time by the BUILDER) or are unreasonably high in price
compared with the prevailing international market price, the BUILDER may supply,
at no cost to the BUYER and subject to the BUYER’S prior approval, other
materials, machinery or equipment of equal quality and effect capable of
meeting the requirements of the CLASSIFICATION SOCIETY and the rules,
regulations and requirements with which the construction of the VESSEL must
comply.

 

3                            CHANGES IN RULES AND
REGULATIONS

 

If the specified rules and
regulations with which the construction of the VESSEL is required to comply are
altered or changed by the CLASSIFICATION SOCIETY or bodies authorised to make
such alterations or changes, either the BUYER or the BUILDER, upon receipt of
due notice thereof, shall forthwith give notice thereof to the other party in
writing. Thereupon, within twenty (20) days after giving the notice to the
BUILDER or receiving the notice from the BUILDER, the BUYER shall advise the
BUILDER as to the alterations and changes, if any, to be made on the VESSEL
which the BUYER, in its sole discretion, shall decide. The BUILDER shall not be
obliged to comply with such alterations and/or changes if the BUYER fails to
notify the BUILDER of its decision within the time limit stated above.

 

The BUILDER shall comply
promptly with the said request of the BUYER, provided that the BUILDER and the
BUYER shall first agree to:

 

(a)                     any increase
or decrease in the CONTRACT PRICE of the VESSEL that is occasioned by such
compliance;

 

11

 

(b)                    any extension
or advancement in the Delivery Date of the VESSEL that is occasioned by such
compliance;

 

(c)                     any increase
or decrease in the deadweight and/or cubic capacity of the VESSEL, if such
compliance results in any increase or reduction in the deadweight and/or cubic
capacity;

 

(d)                    adjustment of
the speed requirements if such compliance results in any increase or reduction
in the speed; and

 

(e)                     any other
alterations in the terms of this CONTRACT or of the SPECIFICATIONS or the PLAN
or both, if such compliance makes such alterations of the terms necessary.

 

Any delay in the
construction of the VESSEL caused by the BUYER’S delay in making a decision as
to the alterations and changes to be made to the SPECIFICATIONS or the PLAN as
above shall constitute a permissible delay under this CONTRACT. The BUILDER,
agrees to exert reasonable efforts to accommodate such request by the BUYER so
that the said change and modification shall be made at a reasonable cost and
within the shortest period of time reasonably possible. Such agreement by the
BUYER shall be effected in the same manner as provided above for the
modification and change of the SPECIFICATIONS and the PLAN.

 

(End of Article)

 

12

 

ARTICLE VI:   TRIALS
AND COMPLETION

 

4                            NOTICE

 

The BUILDER shall notify
the BUYER in writing or by facsimile at least fourteen (14) days in advance of
the time and place of the trial run of the VESSEL. Such notice shall specify
the place from which the VESSEL will commence her trial run and the approximate
date upon which the trial run is expected to take place. Such date shall be
further confirmed by the BUILDER five (5) days in advance of the trial run
in writing or by facsimile.

 

The BUYER’S
REPRESENTATIVE, who is to witness the performance of the VESSEL during such
trial run, shall be present at such place on the date specified in such notice.
Should the BUYER’S REPRESENTATIVE fail to be present after the BUILDER’S due
notice to the BUYER as provided above, the BUILDER shall be entitled to conduct
such trial run with the presence of the representative(s) of the CLASSIFICATION
SOCIETY only without the BUYER’S REPRESENTATIVE being present. In such case the
BUYER shall be obliged to accept the VESSEL on the basis of a certificate
issued and signed by the BUILDER and the CLASSIFICATION SOCIETY that the
VESSEL, after the trial run, subject to alterations and corrections, if
necessary, has been found to conform with the SPECIFICATIONS and this CONTRACT
and is satisfactory in all respects, provided the BUILDER first makes such
corrections and alterations promptly.

 

5                            WEATHER CONDITIONS

 

In the event of
unfavourable weather (as provided in the SPECIFICATIONS) on the date specified
for the trial run, the trial run shall take place on the first available day
that weather conditions permit. The parties hereto recognise that the weather
conditions in Korean 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, the weather should
become so unfavourable that the trial run cannot be continued, then the trial
run shall be discontinued and postponed until the first favourable day next
following, unless the BUYER shall assent to the acceptance of the VESSEL by
notification in writing on the basis of such trial run so far made prior to
such change in weather conditions. Any delay of the trial run caused by such
unfavourable weather conditions shall also operate to extend the Delivery Date
of the VESSEL for the period of delay occasioned by such unfavourable weather
conditions.

 

6                            HOW CONDUCTED

 

All expenses in
connection with the trials of the VESSEL are to be for the account of the
BUILDER, which, during the trials, is to provide at its own expense the
necessary crew to comply with conditions of safe navigation. The trials shall
be conducted in the manner prescribed in this CONTRACT and the SPECIFICATIONS,
and shall prove fulfillment of the performance requirements for the trials as
set forth in the SPECIFICATIONS.

 

The BUILDER shall be
entitled to conduct preliminary sea trials, during which the propulsion plant
and/or its appurtenance shall be adjusted according to the BUILDER’S judgement.
The BUILDER shall have the right to repeat any trial whatsoever as it deems
necessary.

 

7                            CONSUMABLE STORES

 

The BUILDER shall load
the VESSEL with the required quantity of fuel oil, lubricating oil and greases,
fresh water and other stores necessary to conduct the trials as set forth in
the SPECIFICATIONS. The necessary ballast (fuel oil, fresh water and such other
ballast as may be required) to bring the VESSEL to the trial load draft, as
specified in the SPECIFICATIONS, shall be supplied and paid for by the BUILDER
whilst lubricating oil and greases shall be supplied and paid for by the BUYER
within the time advised by the BUILDER for the conduct of sea trials as well as
for use before the delivery of the VESSEL to the BUYER. The fuel oil as well as
lubricating oil and greases shall be in accordance with the engine
specifications and the BUYER shall decide and advise the BUILDER of the
supplier’s name for lubricating oil and greases before the work commencement of
the VESSEL, provided that the supplier shall be acceptable to the BUILDER
and/or the makers of all the relevant machineries.

 

Any fuel oil, fresh water
or other consumable stores furnished and paid for by the BUILDER for trial runs
remaining on board the VESSEL at the time of acceptance of the VESSEL by the
BUYER shall be bought by the BUYER from the BUILDER at the BUILDER’S net
purchase price for such supply in Korea and payment by the BUYER thereof shall
be made at the time of delivery of the VESSEL. The BUILDER shall pay the BUYER
at the time of delivery of the VESSEL for the consumed quantity of

 

13

 

any lubricating oil and
greases which were furnished and paid for by the BUYER at the BUYER’S net
purchase price thereof. The consumed quantity of lubricating oils and greases
shall be calculated on the basis of the difference between the remaining
amount, including the same remaining in the main engine, other machinery and
their pipes, stern tube and the like, and the supplied amount.

 

8                            ACCEPTANCE OR REJECTION

 

(a)                     If, during
any sea trial, any breakdown occurs entailing interruption or irregular
performance which can be repaired on board, the trial shall be continued after
such repairs and be valid in all respects.

 

(b)                    However, if
during or after the trial run, it becomes apparent that the VESSEL or any part
of her equipment requires alterations or corrections which but for this
provision would or might entitle the BUYER to cancel this CONTRACT, the BUILDER
shall notify the BUYER promptly in writing or by facsimile to such effect and
shall simultaneously advise the BUYER of the estimated additional time required
for the necessary alterations or corrections to be made.

 

The BUYER shall, within
two (2) days of receipt from the BUILDER of notice of completion of such
alterations or corrections and after such further trials or tests as necessary
(such trials or tests may be attended by the BUYER’S REPRESENTATIVE), notify
the BUILDER in writing or by facsimile confirmed in writing of its acceptance,
qualified acceptance or rejection of the VESSEL, all in accordance with the
SPECIFICATIONS, the PLAN and this CONTRACT and shall not be entitled to reject
the VESSEL on such grounds until such time.

 

(c)                     Save as above
provided, the BUYER shall, within three (3) days after completion of the
trial run and receipt of the official sea trials report, notify the BUILDER in
writing or by facsimile confirmed in writing of its acceptance of the VESSEL or
of the details in respect of which the VESSEL does not conform to the
SPECIFICATIONS or this CONTRACT.

 

If the BUILDER is in
agreement with the BUYER’S determinations as to non-conformity, the BUILDER
shall make such alterations or changes as may be necessary to correct such
non-conformity and shall prove the fulfillment of this CONTRACT and the
SPECIFICATIONS by such tests or trials as may be necessary. Such tests may be
attended by the BUYER’S REPRESENTATIVE.

 

The BUYER shall, within
two (2) days after completion of such tests and/or trials, notify the
BUILDER in writing or by facsimile confirmed in writing of its acceptance or
rejection of the VESSEL.

 

(d)                    However, the
BUYER shall not be entitled to reject the VESSEL by reason of any minor or
insubstantial items as not being in conformity with the SPECIFICATIONS, but, in
that case, the BUILDER shall not be released from the obligation to correct
and/or remedy such minor or insubstantial items as soon as practicable after
the delivery of the VESSEL.

 

9                            EFFECT OF ACCEPTANCE

 

The BUYER’S written or
facsimiled notification of acceptance delivered to the BUILDER as above
provided shall be final and binding insofar as conformity of the VESSEL with
the SPECIFICATIONS is concerned in that it shall preclude the BUYER from
refusing formal delivery of the VESSEL as hereinafter provided, if the BUILDER
complies with all conditions of delivery as herein set forth and provided that,
in the case of qualified acceptance, any matters which were mentioned in the
notice of the qualified acceptance by the BUYER as requiring correction have
been corrected satisfactorily.

 

If the BUYER fails to
notify the BUILDER of its acceptance or rejection of the VESSEL as hereinabove
provided, the BUYER shall be deemed to have accepted the VESSEL. Nothing
contained in this Article shall preclude the BUILDER from exercising any
and all rights which the BUILDER has under this CONTRACT if the BUILDER
disagrees with the BUYER’S rejection of the VESSEL or any reasons given for
such rejection, including arbitration provided in Article XIII hereof.

 

(End of Article)

 

14

 

ARTICLE VII:   DELIVERY

 

1                            TIME AND PLACE

 

The VESSEL shall be
delivered by the BUILDER to the BUYER at the SHIPYARD, safely afloat and, if
possible, alongside or otherwise at a safe anchorage on or before 22 February 2012
(hereinafter called the “DELIVERY DATE”)
after completion of satisfactory trials and acceptance by the BUYER in
accordance with the terms of Article VI, except that, in the event of
delays in delivery of the VESSEL by the BUILDER due to causes which under the
terms of this CONTRACT permit extensions of the time for delivery of the VESSEL
the aforementioned DELIVERY DATE shall be extended accordingly.

 

2                            WHEN AND HOW EFFECTED

 

Provided that the BUYER
shall concurrently with the delivery of the VESSEL release to the BUILDER the
fourth instalment as set forth in Article X.2 hereof and that the parties
hereto shall have fulfilled all of their respective obligations provided for in
this CONTRACT (including delivery to the BUYER of the documents specified in
Paragraph 3 of this Article), delivery of the VESSEL shall be forthwith
effected upon acceptance thereof by the BUYER, as hereinabove provided, by the
concurrent delivery by each of the parties hereto to the other of a PROTOCOL OF
DELIVERY AND ACCEPTANCE acknowledging delivery of the VESSEL by the BUILDER and
acceptance thereof by the BUYER, which PROTOCOL shall be prepared in duplicate
and signed by each of the parties hereto.

 

3                            DOCUMENTS TO BE DELIVERED TO
THE BUYER

 

Upon delivery and
acceptance of the VESSEL, the BUILDER shall deliver to the BUYER the following
documents, which shall accompany the aforementioned PROTOCOL OF DELIVERY AND
ACCEPTANCE:

 

(a)                     PROTOCOL OF
TRIALS of the VESSEL made pursuant to this CONTRACT and the SPECIFICATIONS,

 

(b)                    PROTOCOL OF
INVENTORY of the equipment of the VESSEL, including spare parts, tools and the
like, all as specified in the SPECIFICATIONS,

 

(c)                     PROTOCOL OF
STORES OF CONSUMABLE NATURE, such as all fuel oil and fresh water remaining in
tanks if its cost is charged to the BUYER under Article VI.4 hereof,

 

(d)                    Two sets of
DRAWINGS and PLANS and instruction manuals pertaining to the VESSEL as
stipulated in the SPECIFICATIONS, which shall be furnished to the BUYER at no
additional cost and if any of the same has been stored on an electronic format
the same shall be also provided to the BUYER at no additional cost,

 

(e)                     ALL CERTIFICATES
required to be furnished upon delivery of the VESSEL pursuant to this CONTRACT,
the SPECIFICATIONS and the customary shipbuilding practice, including but
without limitation to any of the foregoing:

 

(i)                       Classification
Certificate

 

(ii)                    Safety
Construction Certificate

 

(iii)                 Safety Equipment
Certificate

 

(iv)                Safety
Radiotelegraphy Certificate

 

(v)                   International
Loadline Certificate

 

(vi)                International
Tonnage Certificate

 

(vii)             Notarised and
apostilled or, as the case may be, legalised by the appropriate consul BUILDER’S
Certificate

 

(viii)          Ship Sanitation Control
Exemption Certificate

 

15

 

(ix)                  IOPP Certificate

 

However, it is agreed by
the parties that if the Classification Certificate and/or other certificates
are not available at the time of delivery of the VESSEL, provisional
certificates shall be accepted by the BUYER, provided that the BUILDER shall
furnish the BUYER with formal certificates as promptly as possible after such
formal certificates have been issued.

 

(f)                       DECLARATION
OF WARRANTY of the BUILDER that the VESSEL is delivered to the BUYER free and
clear of any liens, claims, charges, mortgages or other encumbrances upon the
BUYER’S title thereto and, in particular, that the VESSEL is absolutely free of
all burdens in the nature of imposts, taxes, or charges imposed by the
prefecture or country of the port of delivery, as well as of all liabilities of
the BUILDER to its sub-contractors and employees and of all liabilities arising
from the construction of the VESSEL or the operation of the VESSEL in trial
runs, or otherwise, prior to delivery except as otherwise provided under this
CONTRACT.

 

(g)                    Commercial
Invoice.

 

(h)                    any other
document reasonably requested by the BUYER to be issued by the BUILDER for
registering the VESSEL at its port of registry.

 

4                            TENDER OF THE VESSEL

 

If the BUYER fails to
take delivery of the VESSEL after completion thereof according to this CONTRACT
and the SPECIFICATIONS, the BUILDER shall have the right to tender delivery of
the VESSEL after compliance with all procedural requirements as provided above.

 

5                            TITLE AND RISK

 

Title and risk shall pass
to the BUYER upon delivery of the VESSEL being effected as stated above and the
BUILDER shall be free of all responsibility or liability whatsoever related
with this CONTRACT except for the warranty of quality contained in Article IX
and the obligations to correct and/or remedy, as provided in Article Vl.5.(d),
if any, it being expressly understood that, until such delivery is effected,
the VESSEL and equipment thereof are at the entire risk of the BUILDER
including but not confined to, risks of war, insurrection and seizure by
Governments or Authorities, whether Korean or foreign, and whether at war or at
peace. The title to the BUYER’S SUPPLIES as provided in Article XII shall
remain with the BUYER until installed on the VESSEL and the BUILDER’S
responsibility for such BUYER’S SUPPLIES shall be as described in Article XII.2.

 

6                            REMOVAL OF THE VESSEL

 

The BUYER shall take
possession of the VESSEL immediately upon delivery thereof and shall remove the
VESSEL from the SHIPYARD within four (4) days after delivery and
acceptance thereof is effected. Port dues and other charges levied by the
Korean Government Authorities after delivery of the VESSEL and any other costs
related to the removal of the VESSEL shall be borne by the BUYER.

 

(End of Article)

 

16

 

ARTICLE
VIII:   DELAYS AND EXTENSIONS OF TIME (FORCE MAJEURE)

 

1                            CAUSES OF DELAY

 

If, at any time after
signing this CONTRACT, either the construction or delivery of the VESSEL or any
performance required hereunder as a prerequisite to the delivery thereof is
delayed by any of the following events; namely war, acts of state or government,
blockade, revolution, insurrections, mobilization, civil commotion, riots,
strikes, sabotage, lockouts, Acts of God or the public enemy, plague or other
epidemics, quarantines, shortage or prolonged failure of electric current
supplied to the SHIPYARD by an external to the SHIPYARD source, freight
embargoes, or defects in major forgings or castings, or delays or defects in
the BUYER’S SUPPLIES as stipulated in Article XII, if any, or shortage of
substitute materials, machinery or equipment or inability to obtain delivery or
delays in delivery of materials, machinery or equipment, provided that at the
time of ordering the same could reasonably be expected by the BUILDER to be
delivered in time, or defects in materials, machinery or equipment which could
not have been detected by the BUILDER using reasonable care, or earthquakes,
tidal waves, typhoons, hurricanes, prolonged or unusually severe weather
conditions or destruction of the premises or works of the BUILDER or its
sub-contractors, or of the VESSEL, or any part thereof, by fire, landslides,
flood, lightning, explosion, or delays in the BUILDER’S other commitments
resulting from any such causes as described in this Article which in turn
delay the construction of the VESSEL or the BUILDER’S performance under the
CONTRACT, or delays caused by the CLASSIFICATION SOCIETY or the BUYER’S faulty
action or omission, or other causes similar to the above, beyond the control of
the BUILDER, or its sub-contractors, as the case may be, or for any other
causes which under the terms of this CONTRACT, authorize and permit extension
of the time for delivery of the VESSEL provided that the event causing the
relevant delay could not have been reasonably foreseen and avoided by the
BUILDER; then, in the event of delays due to the happening of any of the
aforementioned contingencies, the DELIVERY DATE of the VESSEL under this
CONTRACT shall be extended for a period of time which shall not exceed the
total accumulated time of all such events actually delaying the delivery of the
VESSEL, provided further that no postponement shall be granted under this
CONTRACT if the event causing such delay has resulted from any negligence of
the BUILDER or if such event was in existence as of the date of this CONTRACT.

 

2                            NOTICE OF DELAYS

 

As soon as practicably
possible, but not later than twenty (20) days after commencement of any delay
on account of which the BUILDER claims that it is entitled under this CONTRACT
to an extension of the DELIVERY DATE of the VESSEL (excluding delays due to arbitration),
the BUILDER shall advise the BUYER in writing or by facsimile of the date such
delay commenced, the reasons thereof, the steps taken to mitigate the same and,
if possible, the estimated duration of the probable delay in the delivery of
the VESSEL, and shall supply the BUYER if reasonably available with evidence to
justify the delay claimed. Within one (1) week after such delay ends, the
BUILDER shall likewise advise the BUYER in writing or by facsimile of the date
that such delay ended, and also, shall specify the period of time by which the
BUILDER claims the DELIVERY DATE should be extended by reason of such delay.
Failure of the BUYER to object to the BUILDER’S notification of any claim for
extension of the date for delivery of the VESSEL within ten (10) days
after receipt by the BUYER of such notification shall be deemed to be a waiver
by the BUYER of his right to object of such extension.

 

Failure of the BUILDER to
give any of the above-said notices in time shall be deemed to be a waiver of
the BUILDER’S right to claim for a postponement of the DELIVERY DATE.

 

3                            RIGHT TO CANCEL FOR
EXCESSIVE DELAY

 

If the total accumulated
time of all permissible and non-permissible delays, excluding delays due to (i) arbitration
under Article XIII; (ii) the BUYER’S defaults under Article XI; (iii) modifications
and changes under Article V or (iv) delays or defects in the BUYER’S
SUPPLIES as stipulated in Article XII, aggregates two hundred and seventy
(270) days or more, then, the BUYER may, at any time thereafter, cancel this
CONTRACT by giving a written notice of cancellation to the BUILDER. Such
cancellation shall be effective as of the date the notice thereof is received
by the BUILDER.

 

If the BUYER has not
served the notice of cancellation as provided in the above or Article III.1
hereof, the BUILDER may, at any time after expiration of the accumulated time
of the delay in delivery, either two hundred and seventy (270) days in case of
the delay in this Paragraph or two hundred and ten (210) days in case of the
delay in Article III.1, notify the BUYER of the future date upon which the
BUILDER estimates the VESSEL will be ready for delivery and demand in writing
or by facsimile that the BUYER make an election either to cancel this CONTRACT
or to consent to the delivery of the

 

17

 

VESSEL at such future
date (or other date which the parties hereto may agree), in which case the
BUYER shall, within seven (7) days after receipt of such demand, make and
notify the BUILDER of such election. If the BUYER elects to consent to the
delivery of the VESSEL at such future date (or other future date as the parties
may agree):

 

(a)                     Such future
date shall become the contractual delivery date for the purposes of this
CONTRACT; and

 

(b)                    If the VESSEL
is not delivered by such revised contractual delivery date the BUYER shall have
the right, in his discretion, to either cancel this CONTRACT forthwith or to
cancel this CONTRACT on the same terms as provided in Article III.1 or
this Paragraph.

 

If the BUYER shall not
make an election within ten (10) days as provided hereinabove, the BUYER
shall be deemed to have accepted such extension of the DELIVERY DATE to the
future delivery date indicated by the BUILDER. For the avoidance of doubt, in
the event the BUYER elects, or its deemed to have elected, not to rescind this
CONTRACT, the BUYER shall remain entitled to receive payment of any liquidated
damages that have, or may in the future, become payable pursuant to the
provisions of Article III hereof.

 

4                            DEFINITION OF PERMISSIBLE
DELAYS

 

Delays on account of the
foregoing causes shall be understood to be permissible delays and are to be
distinguished from non-permissible unauthorised delays on account of which the
CONTRACT PRICE of the VESSEL is subject to adjustment as provided in Article III
hereof.

 

(End
of Article)

 

18

 

ARTICLE IX:   WARRANTY OF QUALITY

 

1                            GUARANTEE
OF MATERIAL AND WORKMANSHIP

 

The BUILDER, for the
period of twelve (12) months from the date of delivery and acceptance of the
VESSEL by the BUYER, guarantees the VESSEL and all parts and equipment thereof
that are manufactured, supplied or furnished by the BUILDER under this CONTRACT
against all defects which are directly due to defective materials, defective
design, construction miscalculation and/or poor workmanship, provided such
defects have not been caused after delivery and acceptance of the VESSEL by
perils of the sea, rivers or navigation, or by normal wear and tear, overloading,
improper loading or stowage, corrosion of the materials, fire, accidents at sea
or elsewhere, or by incompetence, mismanagement, negligence or willful neglect
or by alteration or addition by the BUYER not previously approved by the
BUILDER unless such event was caused by an act or omission of the BUILDER.

 

The BUILDER will be
responsible for all machinery or parts of machinery and all constructions which
are supplied by sub-contractors and will guarantee the above mentioned for a
period of twelve (12) months on the basis as laid down in this Paragraph.

 

The BUILDER guarantees
repairs and/or replacements to the VESSEL made under this guarantee for a
further period of twelve (12) months from the date of such repair or
replacement provided that the maximum period of guarantee shall not exceed
eighteen (18) months in total from the date of delivery and acceptance of the
VESSEL by the BUYER.

 

The BUILDER agrees that
upon the expiry of this guarantee it shall assign (to the extent to which it
may validly do so) to the BUYER, all rights, title and interest that the
BUILDER may have in and to all guarantees or warranties given by the supplier
of any of the appurtenances and materials used in the construction and/or
operation of the VESSEL. The BUILDER agrees to render to the BUYER all
reasonable assistance in making any claim or taking any action against any such
supplier, which claim or action shall be made and/or taken at the BUYER’S sole
expense. The BUYER shall meet all reasonable expenses incurred by the BUILDER
in rendering any assistance requested by the BUYER pursuant to this Paragraph.

 

2                            NOTICE OF DEFECTS

 

The BUYER or its duly
authorised representative will notify the BUILDER in writing or by facsimile
promptly after discovery of any defect for which a claim is to be made under
this guarantee.

 

The BUYER’S written
notice shall include full particulars as to the nature of the defect the extent
of the damage caused thereby, but excluding consequential damage as hereinafter
provided. The BUILDER will be under no obligation with respect to this
guarantee in respect of any claim for defects discovered prior to the expiry
date of the guarantee, unless notice of such defects is received by the BUILDER
before the expiry date. However, facsimile advice received by the BUILDER
within five (5) days after such expiry date that a claim is forthcoming
will be sufficient compliance with the requirement as to time, provided that
such facsimile advice shall include at least a brief description of the defect
including the identity of the equipment, extent of damage, name and number of
any replacement part and description of any remedial work required, and that
full particulars are given to the BUILDER not later than ten (10) days
after the expiry date.

 

3                            REMEDY OF DEFECTS

 

(a)                     The BUILDER
shall remedy, at its expense, any defects against which the VESSEL is
guaranteed under this Article by making all necessary and reasonably
practicable repairs and/or replacements at the SHIPYARD or elsewhere as
provided for in (b) hereinbelow.

 

In such case, the VESSEL
shall be taken at the BUYER’S cost and responsibility to the place selected,
ready in all respects for such repairs and/or replacements and, in any event,
the BUILDER shall not be responsible for towage, dockage, wharfage, port
charges and anything else incurred by the BUYER for getting and keeping the
VESSEL ready for such repairing or replacing.

 

(b)                    However, if it
is impractical (which shall include, but not be limited to, an emergency) to
bring the VESSEL to the SHIPYARD, the BUYER may cause the necessary repairs
and/or replacements to be made elsewhere which is deemed by the BUYER with the
consent of the BUILDER, which shall not be unreasonably withheld or unduly
delayed, to be suitable for the purpose, provided that, in such event, the
BUILDER may forward or supply replacement parts or materials under the terms
described in (c) hereinbelow, unless forwarding or supplying

 

19

 

thereof under the terms
described in (c) hereinbelow would impair or delay the operation or
working schedule of the VESSEL. In the event that the BUYER proposes to cause
the necessary repairs and/or replacements to be made to the VESSEL at any
shipyard or works other than the SHIPYARD, the BUYER shall first (but in all
events as soon as reasonably possible) give the BUILDER notice in writing or by
facsimile of the time and place such repairs will be made and, if the VESSEL is
not thereby delayed or her operation or working schedule is not thereby
impaired, the BUILDER shall have the right to verify by its own representative(s) and
at its own expense the nature and extent of the defects complained of. The
BUILDER shall, in such case, promptly advise the BUYER by facsimile, after such
examination has been completed, of its acceptance or rejection of the defects
as ones that are covered by the guarantee herein provided. Upon the BUILDER’S
acceptance of the defects as justifying remedy under this Article or upon
award of the arbitration so determining, the BUILDER shall pay to the BUYER,
within fifteen (15) business days of receipt of the invoice for the works
either the invoiced amount or if the BUILDER in good faith sends to the BUYER
within ten (10) business days a lower quotation for the same work by a
shipyard in the same general region, the BUILDER shall pay to the BUYER the
average of the BUILDER’S quotation and the invoiced amount.

 

(c)                     In the event
that it is necessary for the BUILDER to forward a replacement for a defective
part under this guarantee, replacement parts shall be shipped to the BUYER
under the terms of CIF for delivery at the port of call of the VESSEL as
designated in writing by the BUYER.

 

(d)                    The BUILDER
reserves the option to retrieve, at the BUILDER’S cost, any of the replaced
equipment/parts in case defects are remedied in accordance with the provisions
in this Article.

 

(e)                     Any dispute
under this Article shall be referred to arbitration in accordance with the
provisions of Article XIII hereof.

 

4                            EXTENT OF THE BUILDER’S
LIABILITY

 

(a)                     Except as
provided in this CONTRACT, the BUILDER shall have no liability or
responsibility whatsoever or howsoever arising for or in connection with any
consequential or special losses, damages or expenses (including but not limited
to loss of time, loss of profit or earnings or demurrage directly or indirectly
caused), any pecuniary loss or expense, any liability to any third party or any
fine, compensation, penalty or other payment or sanction incurred by or imposed
upon the BUYER or any other party whatsoever in relation to or in connection
with this CONTRACT or the VESSEL.

 

(b)                    The BUILDER
shall be under no obligation under this guarantee with respect to defects in
respect of which the BUILDER has not received notice in accordance with
Paragraph 2 of this Article by the expiry date of the guarantee specified
in Paragraph 1, nor in any event shall the BUILDER be liable for any worsening
of defects after the expiry date of the guarantee (unless notification for such
defects has been given in time).

 

(c)                     The BUILDER
shall under no circumstances be liable for defects in the VESSEL or any part of
equipment thereof caused after delivery and acceptance of the VESSEL by perils
of the sea, rivers or navigation, or normal wear and tear, overloading,
improper loading or stowage, corrosion of the materials or fire or accidents at
sea or elsewhere or by mismanagement, accident, negligence, willful neglect, or
any alteration or addition on the part of the BUYER, its employees or agents or
any other person on or doing work on the VESSEL, including the VESSEL’S
officers, crew and passengers. Likewise, the BUILDER shall not be liable for
defects in the VESSEL or any part of equipment thereof that are due to repairs
carried out by any other than the BUILDER or which have not been carried out in
accordance with the procedure set out in Paragraph 3(b) of this Article.

 

(d)                    The BUILDER
shall not be obliged to repair, nor be liable for, damage to the VESSEL or any
part of the equipment thereof, which after delivery and acceptance of the
VESSEL is caused other than by the defects of the nature specified above. The
guarantees contained as hereinabove in this Article replace and exclude
any other liability, guarantee, warranty and/or condition imposed or implied by
statute, common law, custom, contract (including this CONTRACT) or otherwise on
the part of the BUILDER by reason of the construction and sale of the VESSEL
for and to the BUYER.

 

20

 

5                            ASSIGNMENT OF RIGHTS

 

The BUYER shall be
entitled on or after delivery and acceptance of the VESSEL to assign its rights
under ARTICLE IX to any purchaser or bareboat charterer or financier of the
VESSEL with the prior written consent of the BUILDER which may not be
unreasonably withheld. Notice of any such assignment shall be given by the
BUYER to the BUILDER.

 

(End
of Article)

 

21

 

ARTICLE X:   PAYMENT

 

1                            CURRENCY

 

All payments under this
CONTRACT shall be made in United States Dollars.

 

For the purposes of this
CONTRACT, in counting the business days, only Saturdays and Sundays are
excepted. When a due date falls on a day when banks are not open for business
in New York, NY, U.S.A., Seoul, Korea and Piraeus, Greece, such due date shall
fall due upon the first business day next following.

 

2                            TERMS OF PAYMENT

 

The payments of the
CONTRACT PRICE shall be made as follows:

 

(a)                     First
Instalment

 

U.S. Dollars Eighteen
Million Four Hundred and Forty Thousand (US$18,440,000) shall be paid within
three (3) business days after the later of (i) execution of this
CONTRACT by both parties hereto and (ii) receipt by the BUYER of the
original of the Refund Guarantee specified in Paragraph 8 of this Article and
(iii) 17 June 2008.

 

(b)                    Second
Instalment

 

U.S. Dollars Nine Million
Two Hundred and Twenty Thousand (US$9,220,000) shall be paid on or before 26 November 2008.

 

(c)                     Third
Instalment

 

U.S. Dollars Eighteen
Million Four Hundred and Forty Thousand (US$18,440,000) shall be paid within
three (3) business days of (i) receipt by the BUYER of a faxed copy
of Stage Certificate in the form of EXHIBIT “A” attached hereto confirming that
the first block of the keel has been laid in accordance with the
SPECIFICATIONS.

 

(d)                    Fourth
Instalment

 

U.S Dollars Forty Six
Million One Hundred Thousand (US$46,100,000) plus or minus any increase or
decrease due to modifications and/or adjustment, if any, arising prior to
delivery of the VESSEL of the CONTRACT PRICE under Articles III and V of this
CONTRACT shall be paid to the BUILDER concurrently with the delivery and
acceptance of the VESSEL. (The date stipulated for payment of each of the
fourth instalments mentioned above is hereinafter in this Article and in Article XI
referred to as the “DUE DATE” of
that instalment).

 

Provided however that
none of the above instalments shall be payable if the Refund Guarantee referred
to in Article X.8 hereof ceases to be in force and no substitute Refund
Guarantee has been provided in accordance with the provisions of this Contract.
It is understood and agreed upon by the BUILDER and the BUYER that all payments
under the provisions of this Article shall not be delayed or withheld by
the BUYER due to any dispute or disagreement of whatsoever nature arising
between the BUILDER and the BUYER. Should there be any dispute in this
connection, the matter shall be dealt with in accordance with the provisions of
arbitration in Article XIII hereof. Expenses for remitting payments
whether charged by the BUYER’S bank or the BUILDER’S bank shall be for the
account of the BUYER.

 

3                            DEMAND FOR PAYMENT

 

At least fourteen (14)
days prior to the DUE DATE of each instalment, with the exception of the
payment of the first and second instalments, the BUILDER shall notify the BUYER
by facsimile of the date such instalment shall become due.

 

The BUYER shall
immediately acknowledge receipt of such notification by facsimile to the
BUILDER and make payment as set forth in this Article. If the BUILDER fails to
receive the BUYER’S said acknowledgement within three (3) days after
sending the aforementioned notification, the BUILDER

 

22

 

shall promptly facsimile
to the BUYER a second notification of similar import. The BUYER shall immediately
acknowledge by facsimile receipt of the foregoing second notification
regardless of whether or not the first notification was acknowledged as
aforesaid.

 

4                            METHOD OF PAYMENT

 

(a)                     All the
pre-delivery payments and the payment due on delivery in settlement of the
CONTRACT PRICE as provided for in Paragraph 2 of this Article shall be
made in U.S. Dollars on or before the DUE DATE thereof by telegraphic transfer
as follows:

 

(i)                       The payment
of the first, second and third instalments shall be made to the account
(Account No.:04-029-695) of the The Export-Import Bank of Korea, (hereinafter
called the “KOEXIM”)  with Deutsche Bank Trust Company Americas,
New York, USA (hereinafter called the “DBTC”)  or the account of the BUILDER with or any
other bank in favour of the BUILDER, as designated and notified by the BUILDER
at least five (5) business days prior to the DUE DATE.

 

(ii)                    The BUYER
shall cause a bank in Seoul, Korea (the “BUYER’s
Bank”)  acceptable to
the BUILDER to make the payment of the fourth instalment (as provided for in
Paragraph 2(d) of this Article) to The Export-Import Bank of Korea in
favour of the BUILDER or to the account of the BUILDER with a bank designated
and notified by the BUILDER upon the BUILDER’S presentation to the BUYER’S Bank
of a duplicate copy of the PROTOCOL OF DELIVERY AND ACCEPTANCE of the VESSEL
signed by the BUILDER and the BUYER.

 

(iii)                 At least two (2) business
days prior to the scheduled delivery date of the VESSEL, the BUYER’s Bank shall
irrevocably confirm by a cable or any other equivalent means, to The
Export-Import Bank of Korea or such other bank that the payment of the fourth
instalment will be made unconditionally and immediately upon the BUILDER’S
presentation to the BUYER’S bank of the said PROTOCOL OF DELIVERY AND
ACCEPTANCE duly executed by both parties hereto.

 

(b)                    Simultaneously
with each of such payments (save for payment of the fourth instalment), the
BUYER shall advise the BUILDER of the details of the payments by cable or
facsimile and, at the same time, the BUYER shall cause the BUYER’S remitting
bank to advise the Export-Import Bank of Korea or other bank of the details of
such payments by authenticated bank cable or telex.

 

5                            REFUND BY THE BUILDER

 

The payments made by the
BUYER to the BUILDER prior to delivery of the VESSEL shall constitute advances
to the BUILDER. If the VESSEL is rejected by the BUYER in accordance with the
terms of this CONTRACT or becomes a total loss and no agreement is reached
between the BUILDER and the BUYER as provided in Article X.6 hereof or Article XIX
hereof, or, except in the case of rescission or cancellation of this CONTRACT
by the BUILDER under the provisions of Article XI hereof, if the BUYER
terminates, cancels or rescinds this CONTRACT pursuant to any of the provisions
of this CONTRACT specifically permitting the BUYER to do so the BUILDER shall
forthwith refund to the BUYER, in U.S. Dollars, the full amount of all sums
paid by the BUYER to the BUILDER in advance of delivery together with interest
thereon as herein provided.

 

The transfer and other
bank charges of such refund shall be for the BUILDER’S account. The interest
rate of the refund, as above provided, shall be six percent (6%) per annum from
the date following the date of receipt by the BUILDER of the pre-delivery
instalment(s) to the date of remittance by telegraphic transfer of such
refund, provided, however, that if the cancellation of this CONTRACT by the
BUYER is based upon delays due to force majeure as provided for in Article VIII
hereof, then in such event, the interest rate of refund shall be reduced to
four per cent (4%) per annum for a period of time equal to that of the
permissible delay.

 

It is hereby understood
by both parties that payment of any interest provided herein is by way of
liquidated damages due to cancellation of this CONTRACT and not by way of
compensation for use of money.

 

If the BUILDER is
required to refund to the BUYER the instalments paid by the BUYER to the
BUILDER as provided in this Paragraph, the BUILDER shall return to the BUYER
all of the BUYER’S

 

23

 

SUPPLIES as stipulated in
Article XII which were not incorporated into the VESSEL and pay to the
BUYER an amount equal to the cost to the BUYER of those supplies incorporated
in the VESSEL.

 

6                            TOTAL LOSS

 

If there is a total loss
or a constructive total loss of the VESSEL prior to delivery and acceptance
thereof, the BUILDER shall proceed according to the mutual agreement of the
parties hereto either:

 

(a)                     to build
another vessel in place of the VESSEL so lost and deliver it under this
CONTRACT to the BUYER, provided that the parties hereto shall have agreed in
writing to a reasonable cost and time for the construction of such vessel in
place of the lost VESSEL; or

 

(b)                    to refund to the
BUYER the full amount of the total sums paid by the BUYER to the BUILDER under
the provisions of Paragraph 2 of this Article together with interest
thereon at the rate of four per cent (4%) per annum from the date following the
date of receipt by the BUILDER of such pre-delivery instalment(s) to the
date of payment by the BUILDER to the BUYER of the refund.

 

If the parties hereto
fail to reach such agreement within two (2) months after the VESSEL is
determined to be a total loss or constructive total loss, the provisions of
paragraph (b) hereinabove shall be applied.

 

7                            DISCHARGE OF OBLIGATIONS

 

Such refund as provided
in the foregoing Clauses 5 and 6 by the BUILDER to the BUYER shall forthwith
discharge all the obligations, duties and liabilities of each of the parties
hereto to the other. Any and all refunds or payments due to the BUYER under
this CONTRACT shall be effected by telegraphic transfer to the account
specified by the BUYER.

 

8                            REFUND GUARANTEE

 

The BUILDER shall, prior
to the receipt by the BUILDER of the first instalment, deliver to the BUYER at
the address provided in Article XVIII hereof, an irrevocable and
assignable letter of guarantee issued by The Export-Import Bank of Korea,
Seoul, Korea for the refund of the pre-delivery instalments plus interest as
aforesaid to the BUYER under or pursuant to Paragraph 5 above in the form
annexed hereto as Exhibit “B” (the “REFUND
GUARANTEE”).

 

All expenses in issuing
and maintaining the Refund Guarantee described in this Paragraph shall be borne
by the BUILDER.

 

9                            PERFORMANCE GUARANTEE

 

Upon signing this
CONTRACT, the BUYER shall provide the BUILDER with an irrevocable and
unconditional Corporate Guarantee issued by a Corporate Guarantor acceptable to
the BUILDER for the due and faithful performance by the BUYER of all its
liabilities and responsibilities under the CONTRACT including, but not limited
to, the payment of the CONTRACT PRICE and taking delivery of the VESSEL, in the
form annexed hereto as Exhibit “C”.

 

(End
of Article)

 

24

 

ARTICLE XI:   BUYER’S
DEFAULT

 

1                            DEFINITION OF DEFAULT

 

The BUYER shall be deemed
to be in default under this CONTRACT in the following cases:

 

(a)                     If the first,
second or third instalment is not paid to the BUILDER within the respective DUE
DATE of each such instalment; or

 

(b)                    If the fourth
instalment is not confirmed in accordance with Article X.4(a)(ii) hereof
or if the fourth instalment is not paid to the BUILDER against presentation by
the BUILDER of a duplicate original copy of the PROTOCOL OF DELIVERY AND
ACCEPTANCE duly executed by both parties hereto; or

 

(c)                     If the BUYER
fails to take delivery of the VESSEL when the VESSEL is duly tendered for
delivery by the BUILDER under the provisions of Article VII hereof; or

 

(d)                    If an order or
an effective resolution shall be passed for winding up of the BUYER (except for
the purpose of reorganization, merger or amalgamation); or

 

For the purpose of this
Article, the BUYER shall not be in default if such failure is due to banking
system disruption, in which case the BUYER shall pay to the BUILDER the
interest at the rate of six percent (6%) per annum.

 

In case the BUYER is in
default of any of its obligations under this CONTRACT, the BUILDER is entitled
to and shall have the following rights, powers and remedies in addition to such
other rights, powers and remedies as the BUILDER may have elsewhere in this
CONTRACT and/or at law, at equity or otherwise.

 

2                            EFFECT OF THE BUYER’S
DEFAULT ON OR BEFORE THE DELIVERY OF THE VESSEL

 

If the BUYER shall be in
default as provided in Paragraph 1 above of its obligations under this
CONTRACT, then:

 

(a)                     The DELIVERY
DATE of the VESSEL shall be extended automatically for the actual period of
such default and the BUILDER shall not be obliged to pay any liquidated damages
for the delay in delivery of the VESSEL caused thereby.

 

(b)                    The BUYER
shall pay to the BUILDER interest at the rate of six percent (6%) per annum in
respect of the instalment(s) in default from the respective DUE DATE to
the date of actual receipt by the BUILDER of the full amount of such
instalment(s).

 

(c)                     If the BUYER
is in default in payment of any of the instalment(s) due and payable prior
to or simultaneously with the delivery of the VESSEL, the BUILDER shall, in
writing or by facsimile, notify the BUYER to that effect, and the BUYER shall,
upon receipt of such notification, forthwith acknowledge in writing or by
facsimile to the BUILDER that such notification has been received.

 

(d)                    If any of the
BUYER’S default continues for a period of seven (7) business days after
the BUILDER’S notification to the BUYER of such default, the BUILDER may, at
its option, rescind this CONTRACT by serving upon the BUYER a written notice or
facsimile notice of rescission confirmed in writing.

 

(e)                     In the event
of such cancellation by the BUILDER of this CONTRACT due to the BUYER’s default
provided for in Paragraph 1 above, the BUILDER shall be entitled to retain and
apply the instalments already paid by the BUYER to the recovery of the BUILDER’S
loss and damage including, but not being limited to, reasonable estimated
profit due to the BUYER’S default and the cancellation of this CONTRACT and at
the same time the BUILDER shall have the full right and power either to
complete or not to complete the VESSEL which is the sole property of the
BUILDER as it deems fit, and thereafter to sell in a complete or, as the case

 

25

 

may be, incomplete state
the VESSEL at a public or private sale on such terms and conditions as the
BUILDER thinks fit without being answerable for any loss or damage.

 

The proceeds received by
the BUILDER from the sale shall be applied in addition to the instalment(s) retained
by the BUILDER as mentioned hereinabove as follows:

 

FIRST, in payment of all
reasonable costs and expenses of the sale of the VESSEL, including interest
thereon at four percent (4%) per annum from the respective date of payment of
such costs and expenses aforesaid to the date of sale on account of the BUYER’s
default.

 

SECOND, if the VESSEL has
been completed, in or towards satisfaction of the unpaid balance of the
CONTRACT PRICE, to which shall be added the cost of all additional work and
extras agreed by the BUYER including interest thereon at six percent (6%) per
annum from the respective DUE DATE of the instalment in default to the date of
sale, or if the VESSEL has not been completed, in or towards satisfaction of
the unpaid amount of the cost incurred by the BUILDER prior to the date of sale
on account of construction of the VESSEL including work, labour, materials and
reasonably estimated profit which the BUILDER would have been entitled to
receive if the VESSEL had been completed and delivered plus interest thereon at
six percent (6%) per annum from the respective DUE DATE of the instalment in
default to the date of sale.

 

THIRD, the balance of the
proceeds, if any, shall belong to the BUYER, and shall forthwith be paid over
to the BUYER by the BUILDER.

 

In the event of the
proceeds from the sale together with instalment(s) retained by the BUILDER
are insufficient to pay the BUILDER, the BUYER shall be liable for the
deficiency and shall pay the same to the BUILDER upon its demand.

 

(End
of Article)

 

26

 

ARTICLE XII:   BUYER’S
SUPPLIES

 

1                            RESPONSIBILITY OF THE BUYER

 

The BUYER shall, at its
cost and expense, supply all the BUYER’s supplies as specified in the
SPECIFICATIONS (hereinafter called the “BUYER’S SUPPLIES”), to the BUILDER at
the SHIPYARD in perfect condition ready for the installation and in accordance
with the time schedule to be furnished by the BUILDER to meet the building
schedule of the VESSEL.

 

In order to facilitate
the installation of the BUYER’S SUPPLIES by the BUILDER, the BUYER shall
furnish the BUILDER with the necessary plans, instruction books, test report
and all test certificates required by the BUILDER and shall use reasonable
endeavours to cause the representative(s) of the makers of the BUYER’S
SUPPLIES to give the BUILDER any advice, instructions or assistance which the
BUILDER may reasonably require in the installation or adjustment thereof at the
SHIPYARD, all without cost or expense to the BUILDER.

 

The BUYER shall be liable
for any expense incurred by the BUILDER for repair of the BUYER’S SUPPLIES due
to defective design or materials, poor workmanship or performance or due to
damage in transit and the DELIVERY DATE of the VESSEL shall be extended for the
period of such repair if such repair shall affect the delivery of the VESSEL.

 

Commissioning into good
order of the BUYER’S SUPPLIES during and after installation on board shall be
made at the BUYER’s expenses by the representative of the respective maker or
the person designated by the BUYER in accordance with the BUILDER’S building
schedule.

 

Should the BUYER fail to
deliver to the BUILDER the BUYER’S SUPPLIES and the necessary document or
advice for such supplies within the time specified by the BUILDER, the DELIVERY
DATE of the VESSEL shall automatically be extended for the period of such delay
if such delay in delivery shall affect the delivery of the VESSEL. In such
event, the BUYER shall pay to the BUILDER all losses and damages sustained by
the BUILDER due to such delay in the delivery of the BUYER’S SUPPLIES and such
payment shall be made upon delivery of the VESSEL provided, however, that the
BUILDER shall have:

 

(a)                     furnished the
BUYER with the time schedule referred to above, two (2) months prior to
installation of the BUYER’S SUPPLIES, and

 

(b)                    given the
BUYER written notice of any delay in delivery of the BUYER’S SUPPLIES and the
necessary document or advice for such supplies as soon as the delay occurs
which might give rise to an extension of the DELIVERY DATE under this
Paragraph.

 

Furthermore, if the delay
in delivery of the BUYER’S SUPPLIES and the necessary document or advice for
such supplies should exceed ten (10) days from the date specified by the
BUILDER, the BUILDER shall be entitled to proceed with construction of the
VESSEL without installation of such items (regardless of their nature or
importance to the BUYER or the VESSEL) in or on the VESSEL without prejudice to
the BUILDER’S right hereinabove provided, and the BUYER shall accept the VESSEL
so completed.

 

2                            RESPONSIBILITY OF THE
BUILDER

 

The BUILDER shall be
responsible at its own expense for storing, safekeeping and handling the BUYER’S
SUPPLIES which the BUILDER is required to install on board the VESSEL under the
SPECIFICATIONS after delivery of such supplies to the SHIPYARD and shall
install such supplies on board the VESSEL at the BUILDER’S expense unless
otherwise specified in the SPECIFICATIONS.

 

However, the BUILDER
shall not be responsible for the quality, performance or efficiency of any
equipment included in the BUYER’S SUPPLIES and is under no obligation with
respect to the guarantee of such equipment against any defects caused by poor
quality, performance or efficiency of the BUYER’S SUPPLIES unless affected by
the BUILDER’S breach of its obligations under this Paragraph 2. If any of the
BUYER’S SUPPLIES is lost or damaged while in the custody of the BUILDER, the
BUILDER shall be responsible for such loss or damage.

 

(End
of Article)

 

27

 

ARTICLE XIII:   ARBITRATION

 

1                            APPOINTMENT OF THE
ARBITRATOR

 

If any dispute or
difference shall arise between the parties hereto concerning any matter herein
contained, or the operation or construction thereof, or any matter in any way
connected with this CONTRACT or the rights, duties or liabilities of either
party under or in connection with this CONTRACT, then, in every such case,
either party may demand arbitration of any such dispute by giving written 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 seven (7) 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. The three arbitrators 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 seven (7) 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. 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 hereaforesaid should be unable to agree to the third
arbitrator within ten (10) days from the date on which the second
arbitrator is appointed, either party of the said two arbitrators may apply to
the President for the time being of the London Maritime Arbitrators’
Association to appoint the third arbitrator who shall in making any such
appointment have due regard to the requirement for an expeditious resolution of
the dispute and in particular the availability of any arbitrator so appointed
for any early hearing date.

 

2                            LAWS APPLICABLE

 

Any arbitration arising
hereunder shall be governed by and construed in accordance with the Arbitration
Act 1996 of England or any statutory modification or re-enactments thereof for
the time being in force.

 

The award of the
arbitrator or by the majority of the three arbitrators as the case may be shall
be final, conclusive and binding upon the parties hereto.

 

3                            PROCEEDINGS

 

In the event of any
dispute or difference arising or occurring prior to delivery to, or acceptance
by, the BUYER of the VESSEL being referred to arbitration, the parties hereby
acknowledge that time is of the essence in obtaining an award from the
Arbitration Board on such dispute or difference and the parties hereby agree
that the arbitration shall be conducted according to the following timetable:

 

(a)                     The claimant
in the arbitration to serve points of claim within fourteen (14) days of the
appointment of the Arbitration Board.

 

(b)                    The respondent
in the arbitration to serve points of defence and points of counterclaim, if
any, within fourteen (14) days thereafter.

 

(c)                     The claimant
to serve points of reply and defence to counterclaim, if any, within seven (7) days
thereafter and the hearing of the arbitration to commence within twelve (12)
weeks of the appointment of the Arbitration Board.

 

4                            ALTERATION OF DELIVERY OF
THE VESSEL

 

In the event of the
arbitration of any dispute or difference arising or occurring prior to delivery
to, or acceptance by the BUYER of, the VESSEL, the award by the Arbitration
Board shall include a finding as to whether or not the contractual delivery
date of the VESSEL should, as a result of such dispute, be in any way altered
thereby and/or whether a delay shall be classified as permissible or
non-permissible for the purposes of Articles III and/or VIII hereof.

 

(End
of Article)

 

28

 

ARTICLE XIV:   SUCCESSORS
AND ASSIGNS

 

The BUILDER agrees that,
prior to delivery of the VESSEL, this CONTRACT may, with the prior written
approval of the BUILDER, (which shall not be unreasonably withheld or unduly
delayed), be transferred or assigned by the BUYER, and the title thereto may be
taken by another company provided however that such consent will not be required
in the case of the BUYER assigning its rights under this CONTRACT to a bank or
financial institution financing any of the instalments payable hereunder and
for which prior written notice is given to the BUILDER. In the event of any
assignment pursuant to the terms of the CONTRACT, the assignee, its successors
and assigns shall succeed to all the rights and obligations of the BUYER under
this CONTRACT. However, the BUYER shall remain responsible for performance by
the assignee, its successors and assigns of all the BUYER’S obligations,
liabilities and responsibilities under this CONTRACT. It is understood that any
expenses or charges incurred due to the transfer of this CONTRACT shall be for
the account of the BUYER.

 

The BUILDER shall have
the right to assign this CONTRACT at any time after the effective date hereof,
provided that prior written agreement is obtained from the BUYER.

 

(End
of Article)

 

29

 

ARTICLE XV:   TAXES AND
DUTIES

 

1                            TAXES:

 

Unless otherwise
expressly provided for in this CONTRACT, all costs and taxes including stamp
duties, if any, incurred in or levied by any country except Korea in connection
with this CONTRACT shall be borne by the BUYER and corresponding costs and
taxes in Korea, before delivery of the VESSEL, if any, shall be borne by the
BUILDER.

 

2                            DUTIES:

 

The BUILDER shall hold
the BUYER harmless from any payment of duty imposed in Korea upon materials or
supplies which, under the terms of this CONTRACT, or amendments thereto, may be
supplied by the BUYER from abroad for the construction of the VESSEL.

 

The BUILDER shall
likewise hold the BUYER harmless from any payment of duty imposed in Korea in
connection with materials or supplies for operation of the VESSEL, including
running stores, provisions and supplies necessary to stock the VESSEL for its
operation. This indemnity does not, however, extend to any items purchased by
the BUYER for use in connection with the VESSEL which are not absolutely
required for the construction or operation of the VESSEL.

 

(End
of Article)

 

30

 

ARTICLE XVI:   PATENTS,
TRADEMARKS AND COPYRIGHTS

 

1                            PATENTS, TRADEMARKS AND
COPYRIGHTS

 

Machinery and equipment
of the VESSEL, whether made or furnished by the BUILDER under this CONTRACT,
may bear the patent numbers, trademarks, or trade names of the manufacturers.
The BUILDER shall defend and save harmless the BUYER from all liabilities or
claims for or on account of the use of any patents, copyrights or design of any
nature or kind, or for the infringement thereof including any unpatented
invention made or used in the performance of this CONTRACT and also for any
costs and expenses of litigation, if any, in connection therewith. No such
liability or responsibility shall be with the BUILDER with regard to components
and/or equipment and/or design supplied by the BUYER.

 

Nothing contained herein
shall be construed as transferring any patent or trademark rights or copyrights
in equipment covered by this CONTRACT and all such rights are hereby expressly
reserved to the true and lawful owners thereof.

 

2                            RIGHTS TO THE
SPECIFICATIONS, PLANS, ETC.

 

The BUILDER retains all
rights with respect to the SPECIFICATIONS, plans and working drawings,
technical descriptions, calculations, test results and other data, information
and documents concerning the design and construction of the VESSEL and the
BUYER undertakes therefore not to disclose the same or divulge any information
contained therein to any third parties, including but not limited to any other
shipbuilders without the prior written consent of the BUILDER, excepting where
it is necessary for usual operation, repair and maintenance of the VESSEL or
for the sale or financing thereof. In case the BUYER is in breach of its
obligations under this Article, the BUILDER shall be entitled to any rights,
powers and remedies in this CONTRACT and/or at law, at equity or otherwise to
recover any proven damages caused by the breach of the BUYER.

 

(End of Article)

 

31

 

ARTICLE XVII:   INTERPRETATION
AND GOVERNING LAW

 

This CONTRACT has been
prepared in English and shall be executed in duplicate and in such number of
additional copies as may be required by either party respectively. The parties
hereto irrevocably agree that the validity and interpretation of this CONTRACT
and of each Article and part thereof shall be governed by, and be
construed in accordance with, the laws of England. No term of this CONTRACT is
enforceable under the provisions of the Contracts (Rights of Third Parties) Act
1999 by a person who is not a party to this Agreement.

 

(End of Article)

 

32

 

ARTICLE XVIII:  
NOTICE

 

Any and all notices,
requests, demands, instructions, advice and communications in connection with
this CONTRACT shall be written in English. Notices or other official
communications pursuant to this CONTRACT shall be in writing in English and
shall be sent by registered air mail, by courier, or facsimile and shall be
deemed to be given when first received whether by registered mail, by courier
or facsimile. They shall be addressed as follows, unless and until otherwise
advised: -

 

	
  To the BUILDER:

  	
  Hyundai Heavy
  Industries Co., Ltd.

  
	
   

  	
  #1, Jeonha-Dong,
  Dong-Gu, Ulsan

  
	
   

  	
  Korea

  
	
   

  	
  Facsimile: +82 52
  202-3448 / 202 3425

  
	
   

  	
  Attention: Mr Hyun Dal
  Hwang / G.M. Project Management Department

  
	
   

  	
   

  
	
  To the BUYER:

  	
  Suez Pearl Limited

  
	
   

  	
  c/o Quest Enterprises Maritime S.A.

  
	
   

  	
  Pandoras 13 &
  Kuprou

  
	
   

  	
  Glyfada, Athens

  
	
   

  	
  Greece

  
	
   

  	
  Facsimile: +30 210 894
  4688

  
	
   

  	
  Attention: Mr Arcadis

  

 

The said notices shall
become effective upon receipt of the letter or facsimile communication by the
receiver thereof. Where a notice by facsimile is concerned which is required to
be confirmed by letter, then, unless the CONTRACT or the relevant Article thereof
otherwise requires, the notice shall become effective upon receipt of the
facsimile.

 

(End of Article)

 

33

 

ARTICLE XIX:   INSURANCE

 

1                            EXTENT OF INSURANCE COVERAGE

 

From the time of
launching of the VESSEL until the same is completed, delivered to and accepted
by the BUYER, the BUILDER shall, at its own cost and expense, keep the VESSEL
and all machinery, materials, equipment, appurtenances and outfit delivered to
the SHIPYARD for the VESSEL or built into, or installed in or upon, the VESSEL,
including the BUYER’s SUPPLIES, fully insured with 1st class Korean insurance companies under
coverage corresponding to the Builder’s Risks Insurance Clause available in the
London Market.

 

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 all payments
made by the BUYER to the BUILDER (including the value of the BUYER’s SUPPLIES).

 

2                            APPLICATION OF RECOVERED
AMOUNT

 

(a)                     Partial Loss:

 

In the event the VESSEL
shall be damaged by any insured cause whatsoever prior to acceptance thereof by
the BUYER and in the further event that such damage shall not constitute an
actual or a constructive total loss of the VESSEL, the BUILDER shall apply the
amount recovered under the insurance policy referred to in Paragraph 1 of this Article to
the repair of such damage satisfactory to the CLASSIFICATION SOCIETY, and the
BUYER shall accept the VESSEL under this CONTRACT if completed in accordance
with this CONTRACT and SPECIFICATIONS.

 

(b)                    Total Loss:

 

In the event that the
VESSEL is determined to be an actual or constructive total loss, then the
provisions of Article X.6 shall apply.

 

(End of Article)

 

34

 

ARTICLE XX:   BUILDER’S
DEFAULT

 

The BUYER shall be
entitled to terminate this CONTRACT forthwith by the giving of notice to the
BUILDER by letter, telex or tele-facsimile should any of the following events
occur:

 

(a)                     failure to
maintain the Refund Guarantee in accordance with the terms of this CONTRACT and
in particular Article X hereof; or

 

(b)                    the filing of
a petition or the making of an order or the passing of an effective resolution
for the winding-up of the BUILDER or the placing of the BUILDER under court
protection or the appointment of a receiver of the undertaking or property of
the BUILDER or the insolvency of or a suspension of payment by the BUILDER or
the cessation of the carrying on of business by the BUILDER or the making by
the BUILDER of any special arrangement or composition with creditors of the
BUILDER or any analogous proceedings and the BUILDER fails to remedy such
breach within ten (10) days of receipt by the BUILDER of written notice
from the BUYER.

 

(End of Article)

 

35

 

ARTICLE XXI:   EFFECTIVENESS
OF THIS CONTRACT

 

This CONTRACT shall
become effective upon signing by the parties hereto.

 

(End of Article)

 

36

 

ARTICLE XXII:   EXCLUSIVENESS

 

This CONTRACT shall
constitute the only and entire agreement between the parties hereto, and unless
otherwise expressly provided for in this CONTRACT, all other agreements, oral
or written, made and entered into between the parties prior to the execution of
this CONTRACT shall be null and void.

 

(End
of Article)

 

37

 

IN
WITNESS WHEREOF, the parties hereto have caused this CONTRACT
to be duly executed on the date and year first above written.

 

 

	
  BUYER

  	
   

  	
  BUILDER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by

  	
  )

  	
  SIGNED by

  	
  )

  
	
  For
  and on behalf of SUEZ PEARL LIMITED

  	
  )

  	
  for and on behalf of HYUNDAI HEAVY

  	
  )

  
	
  pursuant
  to a Power of Attorney

  	
  )

  	
  INDUSTRIES CO., LTD.
  pursuant to a Power

  	
  )

  
	
  dated
                                         
  2008

  	
  )

  	
  of Attorney dated                                        
  2008

  	
  )

  
	
   

  	
  )

  	
   

  	
  )

  
	
   

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ [ILLEGIBLE]

  	
   

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
  Name: 

  	
  [ILLEGIBLE]

  	
   

  	
  Name: 

  	
  [ILLEGIBLE]

  	
   

  
	
  Title: 

  	
  Attorney-in-fact

  	
   

  	
  Title: 

  	
  Attorney-in-fact

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  in
  the presence of:

  	
   

  	
  in the presence of:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Witness:

  	
   

  	
  Witness:

  	
   

  
	
  By 

  	
  /s/ Sharie Kelly

  	
   

  	
  By  

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
  Name: 

  	
  SHARIE KELLY

  	
   

  	
  Name: 

  	
  [ILLEGIBLE]

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title: 

  	
  Attorney-in-fact

  	
   

  

 

38

 

EXHIBIT “A”

 

STAGE
CERTIFICATE

 

Hull
No. 2303 (the “VESSEL”) under a Shipbuilding Contract
dated the 2nd day of
June 2008 (the “CONTRACT”)
made between SUEZ PEARL LIMITED (the “BUYER”)
and Hyundai Heavy Industries Co. Ltd (the “BUILDER”).

 

We
hereby certify in connection with the CONTRACT of the VESSEL that

 

[                                                      ]

 

	
  For
  and on behalf of  

  	
   

  	
  For
  and on behalf of  

  
	
  the
  BUILDER

  	
   

  	
  the BUYER  

  
	
   

  	
   

  	
  (Authorised  Representative)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
  Dated:

  

 

For and on behalf of

the
CLASSIFICATION SOCIETY

 

	
   

  	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  

 

39

 

EXHIBIT “B”

 

LETTER OF
GUARANTEE NO:

 

Date
:                    ,
2008

 

Gentlemen:

 

In
consideration of you entering in the shipbuilding contract dated                 ,
2008 (hereinafter called “CONTRACT”) made
by and between SUEZ  PEARL LIMITED of Marshall Islands
(hereinafter called the “BUYER”) and
Hyundai Heavy Industries Co., Ltd., Ulsan, Korea (hereinafter called the “BUILDER”) for the construction by the
BUILDER and the purchase by the BUYER of one (1) 158,000 DWT Class Crude
Oil Carrier having the BUILDER’S Hull No.2303 (hereinafter called the “VESSEL”), we hereby open our irrevocable
letter of guarantee number
                            
in favour of the BUYER for account of the BUILDER as follows.

 

If, in connection with
the terms of the CONTRACT, the BUYER shall become entitled to a refund of the
advance payments made to the BUILDER prior to the delivery of the VESSEL, we
hereby irrevocably guarantee the repayment of the same to the BUYER within
thirty (30) days after demand not exceeding
US$                            
(Say U.S. Dollars
                                                    
only) together with interest thereon at the rate of six percent (6 %) per
annum, from the date following the date of receipt by the BUILDER to the date
of remittance by telegraphic transfer of such refund.

 

The amount of this
guarantee will be automatically increased upon the BUILDER’S receipt of the
respective instalment, not more than two (2) times, each time by the
amount of instalment plus interest thereon as provided in the CONTRACT, but in
any eventuality the amount of this guarantee shall not exceed the total sum of
US$                                          
(Say U.S. Dollars
                              
only) plus interest thereon at the rate of six percent (6 %) per annum from the
date following the date of the BUILDER’S receipt of each instalment to the date
of remittance by telegraphic transfer of the refund. However, in the event of
cancellation of the CONTRACT being based on delays due to force majeure or
other causes beyond the control of the BUILDER, the interest rate of refund
shall be reduced to four percent (4 %) per annum as provided in Article X
of the CONTRACT.

 

The payment by the
undersigned under this letter of guarantee (subject to the second and third
paragraph hereof) shall be made upon simple receipt by us of a written demand
from you including a signed statement certifying that the BUYER’S demand for
refund has been made in conformity with Article X of the CONTRACT and the
BUILDER has failed to make the refund.

 

It is hereby understood
that payment of any interest provided herein is by way of liquidated damages
due to cancellation of the CONTRACT and not by way of compensation for use of
money.

 

Notwithstanding the
provisions hereinabove, in the event that within thirty (30) days from the date
of your claim to the BUILDER referred to above, we receive notification from
you or the BUILDER accompanied by written confirmation to the effect that your
claim to cancel the CONTRACT or your claim for refundment thereunder has been
disputed and referred to arbitration in accordance with the provisions of the
CONTRACT, we shall under this guarantee, refund to you the sum adjudged to be
due to you by the BUILDER pursuant to the award made under such arbitration or,
as the case may be, final court judgment following such arbitration award
immediately upon receipt from you of a demand for the sums so adjudged and a
copy of the relevant arbitration award or, as the case may be, court judgment.

 

The letter of guarantee
shall become null and void upon receipt by the BUYER of the sum guaranteed
hereby or upon acceptance by the BUYER of the delivery of the VESSEL in
accordance with the terms of the CONTRACT and, this letter of guarantee shall
be returned to us.

 

This letter of guarantee
is assignable and valid from the date of this letter of guarantee until such
time as the VESSEL is delivered by the BUILDER and accepted by the BUYER in
accordance with the provisions of the CONTRACT.

 

All demands, statements
or notices in connection with this letter of guarantee shall be validly given
if sent to us by telefax to our office at [country and town of office] as follows:

 

[                                     ]

Fax:

 

40

 

This letter of guarantee
shall remain in full force and effect, notwithstanding any amendments made to
the CONTRACT by the parties thereto. The bankruptcy or insolvency of the
BUILDER or the BUILDER’S breach or default under the CONTRACT shall not effect
our obligations under this Letter of Guarantee. Our obligation under this
Letter of Guarantee shall not be discharged or impaired by any novation of,
amendment of, or supplement to, the CONTRACT after the date of issuance of this
Letter of Guarantee by us, provided however that the sum guaranteed hereinabove
shall not be increased and the period of the validity of this guarantee
stipulated hereinabove shall not be extended without the prior written consent
of us.

 

This letter of guarantee
shall be governed by and construed in accordance with the laws of England and
any dispute between you and us hereunder or in relation hereto shall be
submitted to arbitration in London before a tribunal of three arbitrators, such
arbitration shall be conducted in accordance with the Arbitration Act 1996 and
the rules of the London Maritime Arbitration Association (LMAA) in London,
England.

 

 

	
   

  	
   

  	
   

  	
  Very truly yours

  
	
   

  	
   

  	
   

  	
  for and on behalf of

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

41

 

EXHIBIT “C”

 

Hyundai Heavy Industries
Co., Ltd.

1 Jeonha-Dong, Dong-Gu,

Ulsan, Korea

Korea

 

Date:                 ,
2008

 

PERFORMANCE
GUARANTEE

 

Gentlemen,

 

In consideration of your
executing a shipbuilding contract (hereinafter called the “CONTRACT”) dated
                      
2008 with SUEZ PEARL LIMITED (hereinafter
called the “BUYER”) providing for
the construction of one (1) 158,000 DWT Class Crude Oil Carrier
having the BUILDER’S Hull No.2303 (hereinafter called the “VESSEL”) and
providing, among other things, for payment of the contract price amounting
                                                    
(U.S.$                                  )
for the VESSEL, prior to, upon and after the delivery of the VESSEL, the
undersigned, as a primary obligor and not as a surety merely, hereby
unconditionally and irrevocably guarantees to you, your successors and assigns,
the due and faithful performance by the BUYER of all its liabilities and
responsibilities under the CONTRACT and any supplements, amendments, changes or
modifications hereinafter made thereto including but not limited to, due and
prompt payment of the above said contract price (whether on account of
principal, interest or otherwise) by the BUYER to you, your successors and
assigns under the CONTRACT, notwithstanding any obligation of the BUYER being
or becoming unenforceable by defect in or want of its powers, (hereby expressly
waiving notice of any such supplement, amendment, change or modification as may
be agreed to by the BUYER) and confirms that this guarantee shall be fully
applicable to the CONTRACT whether so supplemented, amended, changed or
modified and if it shall be assigned by the BUYER in accordance with the terms
of the CONTRACT. This guarantee will expire on delivery of the VESSEL to the
BUYER.

 

The undersigned
hereby certifies, represents and warrants that all acts, conditions and things
required to be done and performed and to have occurred precedent to the
creation and issuance of this guarantee, and to constitute the guarantee the
valid and legally binding obligation of the undersigned enforceable in
accordance with its terms have been done and performed and have occurred in due
and strict compliance with applicable laws.

 

The payment by the
undersigned under this guarantee shall be made forthwith upon receipt by us of
written demand from you including a statement that the BUYER is in default of
payment of the amounts (including, but not limited to, the instalment(s) payable
prior to or upon delivery of the VESSEL) that were due under the CONTRACT,
without requesting you to take any or further procedure or step against the
BUYER.

 

This Performance
Guarantee shall become effective upon execution by us and shall become null and
void upon rescission by the BUYER of the CONTRACT or delivery and acceptance of
the VESSEL.

 

The existence of
this Performance Guarantee and its terms and conditions shall be treated by you
as confidential and shall not be disclosed by you to any person, authority or
entity (other than your bank) and any relevant court or arbitration tribunal.

 

This guarantee shall be
governed by and interpreted in accordance with the laws of England and the
undersigned hereby submits to the non-exclusive jurisdiction of the courts of
England.

 

 

	
   

  	
   

  	
   

  	
  Very truly yours

  
	
   

  	
   

  	
   

  	
  For and behalf of [·]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

42

 

ADDENDUM NO. 1

 

ADDENDUM
NO.1 dated 17 November 2008 to a shipbuilding contract
dated 2 June 2008 (the “Contract”)
made between Suez Diamond Limited (the “Buyer”)
and Hyundai Heavy Industries Co. Ltd (the “Builder”)
for the construction of one (1) 158,000 DWT class crude oil carrier
bearing Hull No. 2303.

 

WHEREAS:

 

(a)                    the
Buyer assigned to Fortis Bank of 166 Syngrou Avenue, 176 71 Athens, Greece
absolutely all interests and rights under the Contract by a predelivery
security assignment dated 23 June 2008 (the “Predelivery Security Assignment”);

 

(b)                   the
Buyer and the Builder, pursuant to a facsimile message dated 26 June 2008
and addressed by the Builder to (inter alios) the Buyer, agreed to amend the
words “26 November 2008” in Paragraph 2 of Article X of the Contract
to read “17 November 2008”; and

 

(c)                    the
Buyer and the Builder have now agreed to further amend the due date and method
of payment of the Second Instalment (as such term is defined in Paragraph 2(b).

 

NOW,
in consideration of the promises contained herein, it is hereby agreed by the
parties to this Addendum as follows:

 

1                            The Contract shall, with
effect on and from the date the Buyer obtains all consents required to be
obtained by it in connection with this Addendum pursuant to the Predelivery
Security Assignment, be (and it is hereby) amended as follows (and the Contract
(as so amended) will continue to be binding upon each of the parties hereto
upon such terms as so amended):

 

(a)                    by
deleting the words “Ninety Two Million and Two Hundred Thousand
(US$92,200,000)” in the second line of Article II of the Contract and by
inserting in its place the words “Ninety Two Million Seven Hundred and Sixty
Nine Thousand Two Hundred and Seven (US$92,769,207)”;

 

(b)                   by deleting the
word “fourth” in the second line of Clause 2 of Article VII and by
inserting in its place the word “fifth”;

 

(c)                    by deleting
Paragraphs 2, 3 and 4 of Article X of the Contract in their entirety and
by inserting in their place the following new Paragraphs 2, 3 and 4:

 

ARTICLE X: PAYMENT

 

2                           TERMS OF PAYMENT

 

The
payments of the CONTRACT PRICE shall be made as follows:

 

(a)        First
Instalment

 

U.S. Dollars
Eighteen Million Four Hundred and Forty Thousand (US$18,440,000) shall be paid
within three (3) business days after the later of (i) execution of
this CONTRACT by both parties hereto and (ii) receipt by the BUYER of the
original of the Refund

 

 

Guarantee
specified in Paragraph 8 of this Article and (iii) 17 June 2008.

 

(b)       Second
Instalment

 

U.S. Dollars Four
Million Six Hundred and Thirty Six Thousand Eight Hundred and Ninety Two
(US$4,636,892) shall be paid on the later of (i) three (3) business
days after receipt by the BUYER of the original of the Supplemental Letter to
the Refund Guarantee specified in Paragraph 8 of this Article and attached
to addendum No. 1 dated 17 November 2008 to this CONTRACT in the form
of Exhibit “A” (the “Supplemental Letter”)
and (ii) 17 December 2008.

 

(c)        Third
Instalment

 

U.S. Dollars Five
Million One Hundred and Fifty Two Thousand Three Hundred and Fifteen
(US$5,152,315) shall be paid on 15 July 2010.

 

(d)       Fourth
Instalment

 

U.S. Dollars
Eighteen Million Four Hundred and Forty Thousand (US$18,440,000) shall be paid
within three (3) business days of receipt by the BUYER of a faxed copy of
Stage Certificate in the form of EXHIBIT “A” attached hereto confirming that
the first block of the keel has been laid in accordance with the
SPECIFICATIONS.

 

(e)        Fifth
Instalment

 

U.S Dollars Forty
Six Million One Hundred Thousand (US$46,100,000) plus or minus any increase or
decrease due to modifications and/or adjustment, if any, arising prior to
delivery of the VESSEL of the CONTRACT PRICE under Articles II, III and V
of this CONTRACT shall be paid to the BUILDER concurrently with the delivery
and acceptance of the VESSEL. (The date stipulated for payment of each of the
five instalments mentioned above is hereinafter in this Article and in Article XI
referred to as the “DUE DATE” of
that instalment).

 

Provided
however that none of the above instalments shall be payable if the Refund
Guarantee referred to in Article X. 8 hereof (as amended and supplemented
by the Supplemental Letter) ceases to be in force and no substitute Refund
Guarantee has been provided in accordance with the provisions of this Contract.
It is understood and agreed upon by the BUILDER and the BUYER that all payments
under the provisions of this Article shall not be delayed or withheld by
the BUYER due to any dispute or disagreement of whatsoever nature arising
between the BUILDER and the BUYER. Should there be any dispute in this
connection, the matter shall be dealt with in accordance with the provisions of
arbitration in Article XIII hereof. Expenses for remitting payments
whether charged by the BUYER’S bank or the BUILDER’S bank shall be for the account
of the BUYER.

 

 

3                           DEMAND
FOR PAYMENT

 

At
least fourteen (14) days prior to the DUE DATE of each instalment, with the
exception of the payment of the first, second and third instalments, the
BUILDER shall notify the BUYER by facsimile of the date such instalment shall
become due.

 

The
BUYER shall immediately acknowledge receipt of such notification by facsimile
to the BUILDER and make payment as set forth in this Article. If the BUILDER
fails to receive the BUYER’s said acknowledgement within three (3) days
after sending the aforementioned notification, the BUILDER shall promptly
facsimile to the BUYER a second notification of similar import. The BUYER shall
immediately acknowledge by facsimile receipt of the foregoing second
notification regardless of whether or not the first notification was
acknowledged as aforesaid.

 

4                           METHOD
OF PAYMENT

 

(a)                     All the
pre-delivery payments and the payment due on delivery in settlement of the
CONTRACT PRICE as provided for in Paragraph 2 of this Article shall be made
in U.S. Dollars on or before the DUE DATE thereof by telegraphic transfer as
follows:

 

(i)                       The
payment of the first, second, third and fourth instalments shall be made to the
account (Account No.:04-029-695) of the The Export-Import Bank of Korea, (hereinafter
called the “KOEXIM”) with Deutsche
Bank Trust Company Americas, New York, USA (hereinafter called the “DBTC”) or the account of the BUILDER with
or any other bank in favour of the BUILDER, as designated and notified by the
BUILDER at least five (5) business days prior to the DUE DATE.

 

(ii)                    The
BUYER shall cause a bank in Seoul, Korea (the “BUYER’s Bank”) acceptable to the BUILDER to make the payment
of the fifth instalment (as provided for in Paragraph 2(e) of this
Article) to The Export-Import Bank of Korea in favour of the BUILDER or to the
account of the BUILDER with a bank designated and notified by the BUILDER upon
the BUILDER’S presentation to the BUYER’s Bank of a duplicate copy of the
PROTOCOL OF DELIVERY AND ACCEPTANCE of the VESSEL signed by the BUILDER and the
BUYER.

 

(iii)                 At least two (2) business days
prior to the scheduled delivery date of the VESSEL, the BUYER’s Bank shall
irrevocably confirm by a cable or any other equivalent means, to The
Export-Import Bank of Korea or such other bank that the payment of the fifth
instalment will be made unconditionally and immediately upon the BUILDER’S
presentation to the BUYER’s bank of the said PROTOCOL OF DELIVERY AND
ACCEPTANCE duly executed by both parties hereto.

 

(b)                    Simultaneously
with each of such payments (save for payment of the fifth instalment), the
BUYER shall advise the BUILDER of the details of the payments by cable or
facsimile and, at the same time, the BUYER shall cause the BUYER’s remitting
bank to

 

 

advise the
Export-Import Bank of Korea or other bank of the details of such payments by
authenticated bank cable or telex.”;

 

(d)                    by
adding the following new Paragraph 10 at the end of Article X of the
Contract:

 

PREPAYMENT

 

The Buyer shall
have the right to prepay any of the instalments due under this Contract without
any premium or penalty, save that, in the event that the Buyer pays the second
instalment or the third instalment earlier than their respective DUE DATE, the
fifth instalment shall be reduced by United States Dollars Eight Hundred and
Ninety Six (US$896) for each day either instalment is paid earlier than its
respective DUE DATE.”

 

(e)                     by
deleting the words “second or third” in the first line of sub-paragraph (a),
Paragraph 1 of Article XI of the Contract and by inserting in their place
the words “second, third or fourth”; and

 

(f)                       by
deleting the word “fourth” in the first and second line of paragraph (b),
Paragraph 1 of Article XI of the Contract and by inserting in its place in
both cases the word “fifth”.

 

2                           Save
as provided in clause 1 of this Addendum, the terms of the Contract will not be
otherwise amended and shall remain in full force and effect.

 

3                           This
Addendum shall be kept strictly private and confidential by both parties hereto
and shall not be disclosed to any third party. However, the parties may
disclose this Addendum to a third party to the extent necessary to perform the
Contract (such as the Buyer’s banks providing financing to the Buyer for the
payment of the Contract Price) or if required by any law or regulation or court
order, and in such case the parties shall instruct such third party to observe
the full confidentiality of this Addendum.

 

4                           Each
party hereby confirms that all internal procedures relevant to such party have
been taken and all consents relevant to such party have been duly obtained
regarding the amendments to the Contract pursuant to this Addendum save for any
consents required to be obtained by the Buyer in connection with the Addendum
pursuant to the Predelivery Security Assignment which consents will be obtained
and provided by the Buyer to the Builder within two (2) days from the date
of this Addendum.

 

5                           This
Addendum shall be governed by English law.

 

IN WITNESS whereof the parties to this
Addendum have caused this Addendum to be duly executed on the date first above
written.

 

 

EXHIBIT “A”

 

Form of Supplemental Letter to
Refund Guarantee

 

[TO BE TYPED AND PRINTED ON THE LETTERHEAD OF THE
EXPORT-IMPORT BANK OF KOREA]

 

[·] 2008

 

To:                 Suez
Pearl Limited

Trust Company Complex

Ajeltake Road

Ajeltake Island

Majuro, Marshall Islands MH96960

 

Gentlemen

 

Letter
of Guarantee No. M0902-806-LG-00071 dated 5 June 2008 (the “Letter of
Guarantee”)

 

We refer to:

 

1                             a
shipbuilding contract dated 2 June 2008 (the “Original Contract”) made between Suez Pearl Limited (the “Buyer”) and Hyundai Heavy Industries Co.,
Ltd (the “Builder”) for the
construction of one (1) 158,000 DWT class crude oil carrier bearing Hull No. 2303,
as amended by an addendum No. 1 dated [·] November 2008 (the “Addendum” and together with the Original
Contract referred to as the “Contract”) made between the Builder and the Buyer
in respect of the Original Contract; and

 

2                             the
Letter of Guarantee (a copy of which is attached to this letter and marked as Exhibit “A”)
issued by us in your favour and pursuant to which we have guaranteed to you the
refund of any advance payments made by you to the Builder under the Contract.

 

We hereby confirm
that we have reviewed the terms of the Addendum and consent to the amendments
to the Original Contract contained in the Addendum and agree that the Letter of
Guarantee and our obligations thereunder shall remain and continue in full
force and effect notwithstanding the said amendments to the Original Contract
contained in the Addendum Provided however that the Letter of Guarantee is
hereby amended by deleting the third paragraph of the Letter of Guarantee in
its entirety and by inserting in its place the following new paragraph:

 

“The amount of
this guarantee will be automatically increased upon the BUILDER’S receipt of
the respective instalment, not more than three (3) times, each time by the
amount of the relevant instalment plus interest thereon as provided in the
CONTRACT, but in any eventuality the amount of this guarantee shall not exceed
the total sum of US$46,669,207 (Say U.S. Dollars Forty Six Million Six Hundred
and Sixty Nine Thousand Two Hundred and Seven only) plus interest thereon at
the rate of six percent (6%) per annum from the date following the date of the
BUILDER’S receipt of each instalment to the date of remittance by telegraphic
transfer of the refund. However, in the event of cancellation of the CONTRACT
being based on delays due to force majeure or other causes beyond the control
of the BUILDER, the interest rate of refund shall be reduced to four percent (4
%) per annum as provided in Article X of the CONTRACT”.

 

 

This supplemental
letter is governed by and shall be construed in accordance with English law.

 

Yours faithfully,

 

 

For and on behalf
of

THE
EXPORT-IMPORT BANK OF KOREA

 

 

	
  By:

  	
   

  	
   

  

 

 

	
  SIGNED for an on
  behalf of 

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
   

  	
   

  
	
  SUEZ
  PEARL LIMITED

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
   

  	
   

  
	
  by: [ILLEGIBLE]

  	
  )

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED for and on behalf of

  	
  )

  	
   

  	
   

  
	
  HYUNDAI
  HEAVY INDUSTRIES CO., LTD

  	
  )

  	
   

  	
   

  
	
  by: E. C. HAN

  	
  )

  	
  /s/ E. C. Han

  	
   

  

 

 

ADDENDUM NO. 2

 

ADDENDUM
NO. 2 dated 17 December 2008 to a shipbuilding contract
dated 2 June 2008 (the “Original
Contract”) as amended by addendum No.1 dated 17 November 2008
(“Addendum No. 1” and
together with the Original Contract, the “Contract”),
both made between Suez Pearl Limited (the “Buyer”)
and Hyundai Heavy Industries Co., Ltd. (the “Builder”)
for the construction of one (1) 158,000 DWT class crude oil carrier
bearing Hull No. 2303.

 

WHEREAS:

 

(a)                     Pursuant
to a predelivery security assignment dated 23 June 2008 (the “Predelivery Security Assignment”) executed
by the Buyer in favour of Fortis Bank of 166 Syngrou Avenue, 176 71 Athens,
Greece (“Fortis Bank”) the Buyer
has assigned to Fortis Bank absolutely all interests and rights under the
Contract;

 

(b)                    pursuant
to Addendum No.1 (i) the Buyer and the Builder amended (inter alios) the
terms of payment of the second instalment of the Contract Price (as such term
is defined in Article II of the Contract) payable to the Builder pursuant
to Paragraph 2(b) of Article X of the Original Contract and (ii) The
Export-Import Bank of Korea issued a first supplemental letter to Refund
Guarantee dated 1 December 2008 (the “First
Supplemental Letter”), an original of which was received by the
Buyer on 17 December 2008; and

 

(c)                     the
Buyer and the Builder have now agreed to further amend the terms of payment of
the second instalment of the Contract Price (as such term is defined in Article II
of the Contract) payable to the Builder pursuant to Paragraph 2(b) of Article X
of the Contract.

 

NOW,
in consideration of the promises contained herein, it is hereby agreed by the
parties to this Addendum as follows:

 

1                             The
Contract shall, with effect on and from the date the Buyer obtains all consents
required to be obtained by it in connection with this Addendum pursuant to the
Predelivery Security Assignment, be (and it is hereby) amended as follows (and
the Contract (as so amended) will continue to be binding upon each of the
parties hereto upon such terms as so amended):

 

(a)                    by
deleting the words “Ninety Two Million Seven Hundred and Sixty Nine Thousand
Two Hundred and Seven (US$92,769,207)” in the second line of Article II of
the Contract and by inserting in their place the words “Ninety Two Million
Eight Hundred and Eighty Nine Thousand Three Hundred and Twenty Three
(US$92,889,323)”; and

 

(b)                   by
deleting Paragraph 2 of Article X of the Contract in its entirety and by
inserting in its place the following new Paragraph 2:

 

ARTICLE X: PAYMENT

 

2          TERMS OF
PAYMENT

 

The
payments of the CONTRACT PRICE shall be made as follows:

 

(a)        First
Instalment

 

U.S. Dollars
Eighteen Million Four Hundred and Forty Thousand (US$18,440,000) shall be paid
within three (3) business days after the later of (i) execution of
this CONTRACT by both parties hereto and (ii) receipt by the BUYER of the
original of the Refund

 

 

Guarantee
specified in Paragraph 8 of this Article and (iii) 17 June 2008.

 

(b)       Second
Instalment

 

U.S. Dollars Four
Million Seven Hundred and Fifty Seven Thousand and Eight (US$4,757,008) shall
be paid on the later of (i) three (3) business days after receipt by
the BUYER of the original of (A) the first supplemental letter to the
Refund Guarantee dated 1 December 2008 (the “First Supplemental Letter”) and (B) the second
supplemental letter to the Refund Guarantee specified in Paragraph 8 of this Article and
attached to addendum No.2 dated 17 December 2008 to this CONTRACT in the
form of Exhibit “A” (the “Second
Supplemental Letter”) and (ii) 30 April 2009.

 

(c)        Third
Instalment

 

U.S. Dollars Five
Million One Hundred and Fifty Two Thousand Three Hundred and Fifteen
(US$5,152,315) shall be paid on 15 July 2010.

 

(d)       Fourth
Instalment

 

U.S. Dollars
Eighteen Million Four Hundred and Forty Thousand (US$18,440,000) shall be paid
within three (3) business days of receipt by the BUYER of a faxed copy of
Stage Certificate in the form of EXHIBIT “A” attached hereto confirming that
the first block of the keel has been laid in accordance with the
SPECIFICATIONS.

 

(e)        Fifth
Instalment

 

U.S Dollars Forty
Six Million One Hundred Thousand (US$46,100,000) plus or minus any increase or
decrease due to modifications and/or adjustment, if any, arising prior to
delivery of the VESSEL of the CONTRACT PRICE under Articles II, III and V
of this CONTRACT shall be paid to the BUILDER concurrently with the delivery
and acceptance of the VESSEL. (The date stipulated for payment of each of the
five instalments mentioned above is hereinafter in this Article and in Article XI
referred to as the “DUE DATE” of
that instalment).

 

Provided however
that none of the above instalments shall be payable if the Refund Guarantee
referred to in Article X.8 hereof (as amended and supplemented by the
First Supplemental Letter and the Second Supplemental Letter) ceases to be in
force and no substitute Refund Guarantee has been provided in accordance with
the provisions of this Contract. It is understood and agreed upon by the
BUILDER and the BUYER that all payments under the provisions of this Article shall
not be delayed or withheld by the BUYER due to any dispute or disagreement of
whatsoever nature arising between the BUILDER and the BUYER. Should there be
any dispute in this connection, the matter shall be dealt with in accordance
with the provisions of arbitration in Article XIII hereof. Expenses for
remitting payments whether charged by the BUYER’S bank or the BUILDER’S bank
shall be for the account of the BUYER”.

 

 

2                             Save
as provided in clause 1 of this Addendum, the terms of the Contract will not be
otherwise amended and shall remain in full force and effect.

 

3                             This
Addendum shall be kept strictly private and confidential by both parties hereto
and shall not be disclosed to any third party. However, the parties may
disclose this Addendum to a third party to the extent necessary to perform the
Contract (such as the Buyer’s banks providing financing to the Buyer for the
payment of the Contract Price) or if required by any law or regulation or court
order, and in such case the parties shall instruct such third party to observe
the full confidentiality of this Addendum.

 

4                             Each
party hereby confirms that all internal procedures relevant to such party have
been taken and all consents relevant to such party have been duly obtained
regarding the amendments to the Contract pursuant to this Addendum save for any
consents required to be obtained by the Buyer in connection with this Addendum
pursuant to the Predelivery Security Assignment which consents will be obtained
and provided by the Buyer to the Builder within five (5) days from the
date of this Addendum.

 

5                             This
Addendum and any-non-contractual obligations connected with this Addendum and
the Contract shall be governed by English law.

 

IN
WITNESS whereof the parties to this Addendum have caused this
Addendum to be duly executed on the date first above written.

 

 

EXHIBIT “A”

 

Form of Second Supplemental
Letter to Refund Guarantee

 

[TO BE TYPED AND PRINTED ON THE LETTERHEAD OF THE
EXPORT-IMPORT BANK OF KOREA]

 

[·] 200[·]

 

To:                 Suez
Pearl Limited

Trust Company Complex

Ajeltake Road

Ajeltake Island

Majuro, Marshall Islands MH96960

 

Gentlemen

 

Letter
of Guarantee No. M0902-806-LG-00071 dated 5 June 2008 (the “Original
Letter of Guarantee”) as amended and supplemented by a supplemental letter
dated 1 December 2008 (the “First Supplemental Letter of Guarantee” and
together with the Original Letter of Guarantee, the “Letter of Guarantee”)

 

We refer to:

 

1                             a
shipbuilding contract dated 2 June 2008 (the “Original Contract”) as amended and supplemented by addendum No. 1
dated 17 November 2008 (“Addendum No. 1”
and together with the Original Contract referred to as the “Principal Contract”) and as further amended
by addendum No. 2 dated 17 December 2008 (“Addendum No. 2” and together with the Principal Contract
referred to as the “Contract”),
each made between Suez Pearl Limited (the “Buyer”)
and Hyundai Heavy Industries Co., Ltd. (the “Builder”)
for the construction of one (1) 158,000 DWT class crude oil carrier
bearing Hull No. 2303; and

 

2                             the
Original Letter of Guarantee and the First Supplemental Letter of Guarantee (a
copy of each of which is attached to this letter and marked as Exhibits “A” and
“B” respectively) issued by us in your favour and pursuant to which we have guaranteed
to you the refund of any advance payments made by you to the Builder under the
Contract.

 

We hereby confirm
that we have reviewed the terms of Addendum No. 2 and consent to the
amendments to the Principal Contract contained in Addendum No. 2 and agree
that the Letter of Guarantee and our obligations thereunder shall remain and
continue in full force and effect notwithstanding the said amendments to the
Principal Contract contained in Addendum No. 2 Provided however that the
Letter of Guarantee is hereby further amended by deleting in the fourth line of
the third paragraph of the Letter of Guarantee the words “US$46,669,207 (Say
U.S. Dollars Forty Six Million Six Hundred and Sixty Nine Thousand Two Hundred
and Seven only)” and by inserting in their place the words “US$46,789,323 (Say
U.S. Dollars Forty Six Million Seven Hundred and Eighty Nine Thousand Three
Hundred and Twenty Three only)”.

 

 

This supplemental
letter and any non-contractual obligations connected with this supplemental
letter and the Letter of Guarantee are governed by and shall be construed in
accordance with English law.

 

Yours faithfully,

 

 

For and on behalf
of

THE EXPORT-IMPORT BANK OF KOREA

 

 

	
  By:

  	
   

  	
   

  

 

 

	
  SIGNED for an on
  behalf of 

  	
  )

  	
   

  	
   

  
	
  SUEZ PEARL LIMITED

  	
  )

  	
   

  	
   

  
	
  by: [ILLEGIBLE]

  	
  )

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED for and on behalf of

  	
  )

  	
   

  	
   

  
	
  HYUNDAI
  HEAVY INDUSTRIES CO., LTD.

  	
  )

  	
   

  	
   

  
	
  by: E. C. HAN

  	
  )

  	
  /s/ E. C. Han

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