Document:

Exhibit 10.20

 

FOR

 

CONSTRUCTION
AND SALE

 

OF

 

A 4,250
TEU CONTAINER VESSEL

(HULL NO. 1640)

 

 

BETWEEN

 

Seacarriers
Lines Inc.

As BUYER

 

AND

 

 

Samsung
Heavy Industries Co., Ltd.

As BUILDER

 

 

INDEX

 

	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  PREAMBLE

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE I - DESCRIPTION AND CLASS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Description

  	
   

  	
  8

  
	
  2. Dimensions and
  Characteristics 

  	
   

  	
  8

  
	
  3. Classification, Rules and
  Regulations 

  	
   

  	
  10

  
	
  4. Subcontracting 

  	
   

  	
  11

  
	
  5. Registration

  	
   

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE II - CONTRACT PRICE AND TERMS OF
  PAYMENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Contract Price 

  	
   

  	
  12

  
	
  2. Adjustment of Contract
  price 

  	
   

  	
  12

  
	
  3. Currency

  	
   

  	
  12

  
	
  4. Terms of Payment 

  	
   

  	
  12

  
	
  5. Method of Payment 

  	
   

  	
  13

  
	
  6. Notice of Payment on or
  before Delivery 

  	
   

  	
  15

  
	
  7. Expenses

  	
   

  	
  15

  
	
  8. Prepayment

  	
   

  	
  15

  
	
  9. Performance Guarantee

  	
   

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE III - ADJUSTMENT OF CONTRACT PRICE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Delivery 

  	
   

  	
  16

  
	
  2. Speed 

  	
   

  	
  17

  
	
  3. Fuel Consumption 

  	
   

  	
  18

  
	
  4. Deadweight

  	
   

  	
  18

  
	
  5. Early Delivery

  	
   

  	
  19

  
	
  6. Effect of Rescission 

  	
   

  	
  19

  

 

2

 

	
  ARTICLE IV - APPROVAL OF PLANS AND DRAWINGS AND
  INSPECTION DURING CONSTRUCTION

  
	
   

  	
   

  	
   

  
	
  1. Approval of Plans and
  Drawings 

  	
   

  	
  20

  
	
  2. Appointment of BUYER’s
  Supervisor 

  	
   

  	
  20

  
	
  3. Inspection by the
  Supervisor 

  	
   

  	
  21

  
	
  4. Facilities

  	
   

  	
  22

  
	
  5. Liability of BUILDER 

  	
   

  	
  22

  
	
  6. Responsibility of BUYER
  

  	
   

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE V
  - MODIFICATIONS, CHANGES AND EXTRAS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. How Effected

  	
   

  	
  24

  
	
  2. Change in Rules of
  Classification Society, Regulations etc

  	
   

  	
  25

  
	
  3. Substitution of
  Materials

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI - TRIALS AND ACCEPTANCE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Notice

  	
   

  	
  27

  
	
  2. Weather Condition 

  	
   

  	
  27

  
	
  3. How Conducted 

  	
   

  	
  28

  
	
  4. Method of Acceptance of
  Rejection 

  	
   

  	
  28

  
	
  5. Effect of Acceptance 

  	
   

  	
  29

  
	
  6. Disposition of Surplus
  Consumable Stores 

  	
   

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII - DELIVERY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Time and Place

  	
   

  	
  31

  
	
  2. When and How Effected 

  	
   

  	
  31

  
	
  3. Documents to be
  delivered to BUYER 

  	
   

  	
  31

  
	
  4. Tender of VESSEL

  	
   

  	
  32

  
	
  5. Title and Risk

  	
   

  	
  33

  
	
  6. Removal of VESSEL 

  	
   

  	
  33

  

 

3

 

	
  ARTICLE VIII - DELAYS AND EXTENSION OF TIME FOR
  DELIVERY (FORCE MAJEURE)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Causes of Delay 

  	
   

  	
  34

  
	
  2. Notice of Delay

  	
   

  	
  35

  
	
  3. Definition of
  Permissible Delay 

  	
   

  	
  35

  
	
  4. Right to Rescind for
  Excessive Delay 

  	
   

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX - WARRANTY OF QUALITY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Guarantee

  	
   

  	
  37

  
	
  2. Notice of Defects 

  	
   

  	
  37

  
	
  3. Remedy of Defects 

  	
   

  	
  37

  
	
  4. Extent of the BUILDER’s
  Responsibility 

  	
   

  	
  39

  
	
  5. Guarantee Engineer 

  	
   

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE X - RESCISSION BY BUYER

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Notice

  	
   

  	
  41

  
	
  2. Refundment by BUILDER 

  	
   

  	
  41

  
	
  3. Discharge of
  Obligations 

  	
   

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI - BUYER’S DEFAULT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Definition of Default 

  	
   

  	
  43

  
	
  2. Effect of Default on or
  before Delivery of VESSEL 

  	
   

  	
  43

  
	
  3. Disposal of VESSEL 

  	
   

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII - ARBITRATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Decision by
  Classification Society 

  	
   

  	
  45

  
	
  2. Proceedings of
  Arbitration 

  	
   

  	
  45

  
	
  3. Notice of Award 

  	
   

  	
  46

  
	
  4. Expenses

  	
   

  	
  46

  
	
  5. Entry in Court

  	
   

  	
  46

  
	
  6. Alteration of Delivery
  Date 

  	
   

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII - SUCCESSOR AND ASSIGNS

  	
   

  	
  47

  
	
   

  	
   

  	
   

  

 

4

 

	
  ARTICLE XIV - TAXES AND DUTIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Taxes and duties
  Incurred in Korea 

  	
   

  	
  48

  
	
  2. Taxes and Duties
  Incurred outside Korea 

  	
   

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV - PATENTS, TRADEMARKS, COPYRIGHTS,
  ETC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Patents, Trademarks and
  Copyrights 

  	
   

  	
  49

  
	
  2. General Plans,
  Specifications and Working Drawings 

  	
   

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVI - BUYER’S SUPPLIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Responsibility of BUYER
  

  	
   

  	
  50

  
	
  2. Responsibility of BUILDER
  

  	
   

  	
  51

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVII - INSURANCE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Extent of Insurance
  Coverage 

  	
   

  	
  52

  
	
  2. Application of the
  Recovered Amounts 

  	
   

  	
  52

  
	
  3. Termination of BUILDER’s
  Obligation to Insure 

  	
   

  	
  52

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVIII - NOTICE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Address

  	
   

  	
  54

  
	
  2. Language

  	
   

  	
  54

  
	
  3. Effective Date of
  Notice

  	
   

  	
  55

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIX - EFFECTIVE DATE OF CONTRACT

  	
   

  	
  56

  
	
   

  	
   

  	
   

  
	
  ARTICLE XX - INTERPRETATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Laws Applicable 

  	
   

  	
  57

  
	
  2. Discrepancies

  	
   

  	
  57

  
	
  3. Entire Agreement

  	
   

  	
  57

  
	
  4. Amendments and
  supplements 

  	
   

  	
  57

  

 

5

 

	
  END OF CONTRACT

  	
   

  	
  58

  
	
   

  	
   

  	
   

  
	
  EXHIBIT “A” LETTER OF REFUNDMENT GUARANTEE

  	
   

  	
  59

  
	
   

  	
   

  	
   

  
	
  EXHIBIT “B” PERFORMANCE GUARANTEE

  	
   

  	
  63

  
	
   

  	
   

  	
   

  
	
  EXHIBIT “C” PERFORMANCE GUARANTEE

  	
   

  	
  64

  

 

6

 

THIS CONTRACT, made and entered into on this 30th day of
June, 2005 by and between Seacarriers Lines Inc. a corporation incorporated and
existing under the laws of Liberian, having its registered office at 80 Broad
Street, Monrovia, Liberia (hereinafter
called the “BUYER”), on the one part and Samsung Heavy Industries
Co.,Ltd., a corporation incorporated and existing under the laws of the
Republic of Korea of having its registered office at 647-9, Yoksam-Dong,
Kangnam-ku, Seoul, Korea (hereinafter called the “BUILDER”), on the other part,

 

WITNESSETH:

 

In consideration of the mutual covenants herein contained, the BUILDER
agrees to design, build, launch and complete in accordance with first class modern
Korean shipbuilding practice and standards one (1) Single Screw Diesel
Engine driven Container VESSEL as described in the Specifications attached
herewith and any addendum thereto (hereinafter called the “VESSEL”) at the
BUILDER’s shipyard located in Koje Island, Korea (hereinafter called the “Shipyard”)
and to deliver and sell the same to the BUYER, and the BUYER hereby agrees to
purchase and accept delivery of the VESSEL from the BUILDER and to pay for the
same upon the terms and conditions hereinafter set forth.

 

7

 

ARTICLE I - DESCRIPTION AND CLASS

 

1.         Description :

 

The VESSEL shall be an ocean going single screw
diesel engine driven fully cellular container VESSEL suitable for carrying dry
cargo containers having the BUILDER’s Hull No.1640 and shall be constructed,
equipped and completed in accordance with the specifications, all plans and
drawings, and manufacturer list made, used, and duly approved for the
construction of the BUILDER’s Hull No. 1455~1456 (hereinafter collectively
called the “As-Built-Specifications”).

 

The
BUYER and the BUILDER hereby undertake that the VESSEL shall be the just repeat
and series VESSEL of the BUILDER’s Hull Nos. 1455 & 1456 (as a series project).
Thus all construction procedure including model test and sea trial etc. shall
be done on the basis of the just repeat and series VESSEL of Hull Nos.
1455 & 1456.

 

The
BUYER and the BUILDER hereby further undertake that As-Built-Specifications
shall be used for the VESSEL without any further approval and modification from
the BUYER unless otherwise mutually agreed by both parties.

 

2.         Dimensions and Characteristics :

 

	
  Length,
  overall

  	
   

  	
   

  	
   

  	
  appx.

  	
   

  	
  259.8

  	
  m

  
	
  Length,
  between perpendiculars

  	
   

  	
   

  	
   

  	
  appx.

  	
   

  	
  244.8

  	
  m

  
	
  Breadth, moulded

  	
   

  	
   

  	
   

  	
  appx.

  	
   

  	
  32.25

  	
  m

  
	
  Depth, moulded

  	
   

  	
   

  	
   

  	
  appx.

  	
   

  	
  19.3

  	
  m

  
	
  Designed loaded draught,
  moulded

  	
   

  	
   

  	
   

  	
  appx.

  	
   

  	
  11.0

  	
  m

  
	
  Scantling draught, moulded

  	
   

  	
   

  	
   

  	
  appx.

  	
   

  	
  12.6

  	
  m

  

 

	
  Main
  Engine

  	
  :

  	
   

  	
  MAN
  B&W 8K 90MC-C type License Made MCR 49,680 bhp at 104 r.p.m.

  

 

8

 

	
  Deadweight,
  guaranteed

  	
  :

  	
   

  	
  50,500
  metric tons at the moulded scantling draught of 12.6 meters.

  
	
   

  	
   

  	
   

  	
   

  
	
  Speed,
  guaranteed

  	
  :

  	
   

  	
  24.5
  knots at a draught of 11.0 meters and main engine developing power of 38,880
  bhp (metric).

  
	
   

  	
   

  	
   

  	
   

  
	
  Fuel Consumption,
  guaranteed

  	
  :

  	
   

  	
  124.3
  grams/bhp(metric)-hour using marine diesel oil having lower calorific value
  of 10,200 kcal/kg at
  normal continuous rating of 44,710 bhp(metric) measured at the shop trial.

  

 

9

 

The details of the aforementioned particulars as
well as the definitions and method of measurements and calculations are as
defined in the As-Built-Specifications.

 

3.         Classification, Rules and Regulations :

 

The VESSEL, including its machinery, equipment and
outfittings shall be constructed in accordance with the rules and
regulations in year 2004 July edition of the Classification Society in
accordance with the interpretation of Classification Society (dated on
2005-06-29 Ref No. MKOKR120/MSSH/Gen-precontract/PUS-J-668) and under
special survey of Det Norske Veritas (hereinafter called the “Classification
Society”) and shall be distinguished in the register by the symbol of X1A1 “ Container Carrier”, NAUTICUS, EO,
and In water survey and TMON shall be applied according to the requirement of
the class rule.

 

Decisions of the
Classification Society as to compliance or non-compliance with the
classification shall be final and binding upon both parties hereto. Details of
its notation shall be in accordance with the As-Built-Specifications.

 

The VESSEL shall also
comply with the compulsory rules, regulations and requirements of the
regulatory bodies as described in the As-Built-Specifications rectified and in
effect as of the signing date of this Contract. Non-compulsory rules,
regulations and requirements of the regulatory bodies shall be dealt with in
accordance with Article V (2) of this Contract.

 

All the fees and charges
incidental to the classification and with respect to compliance with the above
referred rules, regulations and requirements shall be for account of the
BUILDER except otherwise agreed.

 

10

 

4.         Subcontracting :

 

The BUILDER may, at its
sole discretion and responsibility, subcontract any portion of the construction
work of the VESSEL, provided that the construction and assembly of the VESSEL
shall be carried out as is normally done according to the BUILDER’s building
practice and provided further that the BUILDER shall be responsible to the
BUYER in respect of any construction work carried out by such subcontractors.

 

5.         Registration :

 

The VESSEL, at the time
of its delivery and acceptance, shall be registered at the port of registry by
the BUYER under Greek, Liberian, Cyprus or Panama flag at the BUYER’s expenses.
The BUYER shall decide the flag within one(1) month after the date of
signing of this Contract.

 

(End of Article)

 

11

 

ARTICLE II
- CONTRACT PRICE AND TERMS OF PAYMENT

 

1.         Contract Price :

 

The Contract price of the VESSEL and exclusive of
the BUYER’s Supplies as provided in Paragraph 1 of Article XVI hereof is
Seventy Million United States Dollars (US$ 70,000,000.-) (hereinafter called
the “Contract Price”), which shall be subject to upward or downward adjustment,
if any, as hereinafter set forth in this Contract.

 

2.         Adjustment of Contract Price:

 

Increase or decrease of
the Contract Price, if any, due to adjustments thereof made in accordance with
the provisions of this Contract, shall be adjusted by way of addition to or
subtraction from the Contract Price upon delivery and acceptance of the VESSEL
in the manner as hereinafter provided.

 

3.         Currency :

 

Any and all payments by the
BUYER to the BUILDER which are due under this Contract shall be made in United
States Dollars.

 

4.         Terms of Payment :

 

The Contract Price shall
be due and payable by the BUYER to the BUILDER in the instalments as follows :

 

(a)       First Instalment :

 

The First Instalment amounting to Seven Million
United States Dollars (US$ 7,000,000.-) shall be due and payable upon issuance
and delivery to the BUYER of the original of Refund Guarantee.

 

(b)       Second
Instalment :

 

The Second Instalment amounting to Seven
Million United States Dollars (US$ 7,000,000.-) shall be due and payable upon
six(6) calendar months after the date of singing of this Contract.

 

12

 

(c)       Third
Instalment :

 

The Third Instalment amounting to Seven Million
United States Dollars (US$ 7,000,000.-) shall be due and payable upon steel
cutting of the VESSEL.

 

(d)       Fourth
Instalment :

 

The Foruth Instalment amounting to Seven
Million United States Dollars (US$ 7,000,000.-) shall be due and payable upon
keel laying of the VESSEL.

 

(e)       Fifth
Instalment :

 

The Delivery Instalment amounting to Forty Two
Million United States Dollars (US$ 42,000,000.-) plus any increase or minus any
decrease due to adjustments of the Contract Price under and pursuant to the
provisions of this Contract, shall be due and payable upon delivery and
acceptance of the VESSEL or upon tender for delivery of the VESSEL referred to
in Paragraph 4 of Article VII of this Contract.

 

It is agreed that no payment shall be effected until
the original Refund Guarantee is delivered to the BUYER.

 

5.         Method of Payment :

 

(a)       First Instalment :

 

Within Seven(7) banking
days after 30th day of June, 2005, the BUYER shall remit by
telegraphic transfer the first instalment to the account of The Export-Import
Bank of Korea, Head Office, Seoul, Korea with Deutsche Bank Trust Company
Americas(BIC : BKTRUS33), 60 Wall Street, Mail Stop NYC 60 1310, New York, NY
10005, USA, Account No.04 029 695, in favour of Samsung Heavy Industries., Ltd,
SWIFT code : EXIKKRSE or other bank as designated by the Builder, in favor of
Samsung Heavy Industrise Co, Ltd.(hereinafter called the “BUILDER’s Bank”)

 

(b)       Second, Third and Fourth Instalment :

 

Upon receipt of telefax notice from the BUILDER
confirming that the second, third, and fourth instalment on each event is due
and payable, the BUYER shall remit by telegraphic transfer the second, third,
and fourth instalment to the aforesaid account of the BUILDER’s Bank in favour
of Samsung Heavy Industries Co., Ltd.

 

13

 

(c)       Fifth Instalment :

 

At least One (1) banking days prior to delivery
and acceptance of the VESSEL, the BUYER shall remit by telegraphic transfer the
fifth instalment to the name of the BUYER at BUILDER’s BANK, with an
irrevocable instruction that the amount so remitted shall be payable to the
BUILDER against a facsimile copy of PROTOCOL OF DELIVERY and ACCEPTANCE OF THE
VESSEL signed by the BUYER and the BUILDER or returned to the BUYER if such
PROTOCOL OF DELIVERY and ACCEPTANCE has not been presented within 15 days.

 

Simultaneously with each of all such payments, the
BUYER shall cause the BUYER’s BANK to advise the BUILDER’s BANK of the details
of such payments by authenticated bank cable.

 

Any claim which the BUYER may have against the
BUILDER hereunder shall be settled and liquidated separately from any payment
by the BUYER to the BUILDER hereunder.

 

14

 

6.         Notice of Payment on or before Delivery :

 

With the exception of the
first instalment, the BUILDER shall give the BUYER Five(5) banking days
prior notice by telefax of the anticipated due date and amount of each
instalment payable on or before delivery of the VESSEL.

 

7.         Expenses.

 

Expenses and bank charges
for remitting payments and any taxes, duties, expenses and fees connected with
such payment shall be for account of the BUYER referred to in paragraph 2 of Article XIV
of this Contract, except expenses and bank charges of the BUILDER’s BANK.

 

8.         Prepayment :

 

Prepayment of any
instalment due on or before delivery of the VESSEL shall be subject to mutual
agreement between the parties hereto.

 

9.         Performance
Guarantee

 

Upon signing this Contract, the BUYER shall provide
the BUILDER with a Performance Guarantee in order to secure the due and
faithful performance of this Contract by the BUYER having same form and
contents as Exhibit “B”
annexed hereto.

 

(End of Article)

 

15

 

ARTICLE III - ADJUSTMENT OF CONTRACT PRICE

 

The Contract Price shall
be subject to adjustment, as hereinafter set forth, in the event of the
following contingencies (it being understood by both parties that any reduction
of the Contract Price is by way of liquidated damages and not by way of
penalty) :

 

1.         Delivery :

 

(a)       No adjustment shall be made
and the Contract Price shall remain unchanged for the first Thirty (30) days of
delay in delivery of the VESSEL beyond the Delivery Date as defined in Article VII
hereof (ending as of twelve o’clock midnight of the Thirty (30) day of delay).

 

(b)       If the delivery of the VESSEL is delayed more
than Thirty (30) days after the
Delivery Date, the Contract Price shall be reduced by the sum of Twenty Seven
Thousand Five Hundred United States Dollars (US$27,500.-) for each full day for
which thereafter delivery is delayed.

 

However, the total reduction in the Contract Price
shall not be more than as would be the case for a delay of One Hundred Eighty
(180) days counting from the midnight of the Thirty (30) day after the Delivery Date at the above
specified rate of reduction.

 

(c)       However, if the delay in
delivery of the VESSEL should continue for a period of Two Hundred Ten (210)
days from the Delivery Date in Paragraph 1 of Article VII, then in such
event, and after such period has expired, the BUYER may, at its option, rescind
this Contract in accordance with the provisions of Article X hereof.

 

The BUILDER may, at any time after the expiration of
the aforementioned Two Hundred Ten (210) days of delay in delivery, if the
BUYER has not served notice of rescission as provided in Article X hereof,
demand in writing that the BUYER shall make an election, in which case the
BUYER shall, within Twenty (20) days after such demand is received by the
BUYER, notify the BUILDER of its intention either to rescind this Contract or
to consent to the acceptance of the VESSEL at the BUILDER’s specified future
date. If the BUYER shall not make an election within Twenty (20) 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 and
it being understood by the parties hereto that if the VESSEL is not delivered
by such future date, the BUYER shall

 

16

 

have the same right of rescission upon the same
terms and conditions as hereinabove provided.

 

It is understood that accrued liquidated damages are
preserved. Further delay shall incur additional liquidated damages in
accordance with existing terms and conditions.

 

 (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 account all postponements of the Delivery
Date by reason of permissible delay as defined in Article VIII and/or any
other reason under this Contract, is not delivered by the date upon which
delivery is required under the terms of this Contract.

 

2.         Speed :

 

(a)       The Contract Price shall not be affected or
changed by reason of the trial speed (as determined according to the
As-Built-Specifications) being less than the guaranteed speed, if such
variation is not more than Two-Tenths (2/10) of One (1) knot.

 

(b)       However, if such variation is more than
Two-Tenths (2/10) of One (1) knot, then, the Contract Price shall be
decreased by One Hundred and Seventy Five Thousand Five Hundred United States
Dollars (US$ 175,000.-) for each successive whole One-Tenth(1/10) of a knot in
excess of a deficiency of Two-Tenths (2/10) of a knot (in both cases smaller
fractions being disregarded).

 

(c)       If the deficiency in the speed upon final sea
trial is more than Half(1/2) a knot below the guaranteed speed of the VESSEL,
then the BUYER may, at its option, reject the VESSEL and rescind this Contract
in accordance with the provisions of Article X hereof, or may accept
the VESSEL at a reduction in the Contract Price as above provided for Half(1/2)
a knot only, that is, at a total reduction of Five Hundred and Twenty Five
Thousand Five Hundred United States Dollars (US$ 525,000.-).

 

17

 

3.         Fuel Consumption :

 

(a)       The Contract
Price shall not be affected or changed in case the fuel consumption, as
determined by the shop trial as specified in the As-Built-Specifications, is
not more than Five percent (5%) in excess of the guaranteed fuel consumption
specified in Paragraph 2 of Article I.

 

(b)       However, in the event that the actual fuel
consumption at the shop trial is in excess of Five percent (5%) of the
guaranteed fuel consumption, the Contract Price shall be reduced by the sum of
One Hundred and Ten Thousand United States Dollars (US$ 110,000.-) for each
full one percent(1%) increase in fuel consumption and pro rata for any fraction
of one percent(1%) of the Guaranteed Fuel Consumption in excess of the said
five percent(5%) up to maximum of eight percent(8%) over the Guaranteed Fuel
Consumption.

 

(c)       If the deficiency in fuel consumption is more
than Eight percent (8%) then the BUYER may at its option rescind this
Contract in accordance with the provision of Article X hereof.

 

4.         Deadweight :

 

(a)       In the event that the deadweight of the
VESSEL as determined in accordance with the As-Built-Specifications is less
than the guaranteed deadweight as specified in Paragraph 2 of Article I,
the Contract Price shall be reduced by the sum of One Thousand One Hundred
United States Dollars (US$ 1,100.-) for each full metric ton of such deficiency
being more than Seven Hundred (700) metric tons, up to a maximum reduction of
One Million Two Hundred and Ten Thousand United States Dollars (US$
1,210,000.-).

 

(b)       In the event of such deficiency in the
deadweight of the VESSEL being One thousand eight hundred (1,800) metric tons
or more, then, the BUYER may, at its option, reject the VESSEL and rescind this
Contract in accordance with the provisions of Article X hereof or accept
the VESSEL at a reduction in the Contract Price as above provided for One
thousand eight hundred (1,800) metric tons only, that is, at a total reduction
of One Million Two Hundred and Ten Thousand United States Dollars
(US$1,210,000.-).

 

18

 

5.         Early Delivery

 

In the event that the
BUILDER believes that the VESSEL can be completed and ready for Delivery on a
date earlier than the Contractual Delivery Date, then the BUILDER may give
a written notice to the BUYER, no later than six (6) months before the
revised date (the “Early Delivery Date”) informing the approximate date on
which the VESSEL can be ready for the Delivery. The BUYER shall have the
option, but not the obligation, to accept Delivery of the VESSEL on the Early
Delivery Date and upon the BUYER’s acceptance thereof, the parties shall
discuss the specific amount of the additional payment due to the BUILDER for
the accelerated Delivery of the VESSEL on the Early Delivery Date at the
delivery stage of the VESSEL and the compensation payment of the acceleration bonus shall be settled and
paid in full with the final delivery instalment concurrently uponwith the
actual Delivery and acceptance of the VESSEL by the BUYER. If the
Parties fail to reach a mutual agreement on the amount of the Early Delivery
bonus, the BUILDER shall be free to deliver the VESSEL on the original
Contractual Delivery Date or earlier at its option. The Parties hereto acknowledge that there
will be no liquidated damages or other penalty to be imposed on the BUILDER in
the event the VESSEL happens to be delivered on any date later than the Early
Delivery Date but earlier than the original Contractual Delivery Date.

 

6        Effect of Rescission :

 

It is expressly
understood and agreed by the parties that in any case, if the BUYER rescinds
this Contract under this article, the BUYER shall not be entitled to any
liquidated damages or any other recourse unless by means of the provisions of Article X
hereof.

 

(End of Article)

 

19

 

ARTICLE IV - APPROVAL OF PLANS AND DRAWINGS
AND INSPECTION DURING
CONSTRUCTION

 

1.         Approval of Plans and Drawings :

 

As-Built-Specifications for
the BUILDER’s Hull No. 1455 & 1456 shall be used for the VESSEL
without any further approval and modification from the BUYER unless otherwise
mutually agreed by both parties. Should any changes are required by the BUYER’s
request or the application of new rules and regulations (of a mandatory
nature) coming into effect after the date of this Contract signing, the BUILDER
shall submit such changes to the BUYER for its approval. If approved by the
BUYER, such changes shall be applied to the VESSEL with cost adjustment in
accordance with Article V of this Contract.

 

2.         Appointment of BUYER’s Supervisor :

 

The BUYER may send to and maintain at the
Shipyard, at the BUYER’s own cost and expense, one supervisor who shall be duly
authorized in writing by the BUYER (herein called the “Supervisor”) to act on
behalf of the BUYER in connection with the modifications of the
As-Built-Specifications, adjustments of the Contract Price and Delivery Date,
approval of the plans and drawings, attendance to the tests and inspections
relating to the VESSEL, its machinery, equipment and outfittings, and any other
matters for which he is specifically authorized by the BUYER. The Supervisor may appoint
his assistant(s) to attend at the Shipyard for the purposes as aforesaid.

 

In the event that
assignment, novation or resale occurs under the Article XIII and as a
result, BUYER’s Supervisor is changed during the construction of the VESSEL,
any and all matters determined by mutual agreement between the BUYER’s
Supervisor and the BUILDER prior to the dispatch of a new Supervisor shall be
accepted and complied by the new Supervisor. In case two or more Supervisors
are dispatched to the Shipyard and authorized, under the BUILDER’s prior
consent, to perform the supervision, each of them will form uniform opinions
between them to keep the design and As-Built-Specifications so as not to
adversely affect the CONTRACT PRICE and Delivery of the VESSEL, provided that
such change in the Contract Price will be reasonable and proven under the
BUILDER’s normal practice.

 

20

 

3.         Inspection by the Supervisor :

 

The necessary inspections of the VESSEL, its
machinery, equipment and outfittings shall be carried out by the Classification
Society, other regulatory bodies and/or an inspection team of the BUILDER
throughout the entire period of construction in order to ensure that the
construction of the VESSEL is duly performed in accordance with this Contract
and the As-Built-Specifications. The Supervisor shall have, during construction
of the VESSEL, the right to attend such tests and inspections of the VESSEL,
its machinery and equipment within the premises of either the BUILDER or its
subcontractors. The BUILDER shall give notice to the Supervisor, in advance of
the date and place of such tests and inspections for the convenience of their
attendance. Detailed procedures of the inspection and the tests thereof shall
be in accordance with the As-Built-Specifications.

 

The BUILDER may request
BUYER’s supervisor to attend the inspection and tests during public holidays
and weekends and/or Company holidays in order to keep BUILDER’s construction
schedule. BUYER’s supervisor shall fully cooperate with BUILDER and promptly
attend such inspection/tests including those for surface preparation and
painting work, which are especially vulnerable to weather condition and time
interval. However, BUILDER shall keep such inspection and tests to a minimum
and only when the inspection and tests affect BUILDER’s construction schedule. The
BUILDER’s prior notice of such inspection/test schedule shall be informed
to the BUYER’s supervisor three(3) working days in advance as a minimum

 

The Supervisor shall be entitled to request
copies of all test results and trials as soon as required for the performance
of his duties.

 

The Supervisor shall notify the BUILDER of
deficiencies in the construction of the VESSEL or materials. The BUILDER should
examine the deficiency and rectify.

 

If any of the BUYER’s supervisors
discover any construction, material or workmanship which is not deemed to conform to
the requirements of this Contract and/or the As-Built-Specifications, the BUYER’s
supervisors shall promptly give the BUILDER a notice in writing that such
alleged non-conformity exists. Upon

 

21

 

receipt of such notice from the BUYER’s
supervisor, the BUILDER shall correct such non-conformity, if the BUILDER
agrees to his view. Any disagreement shall be resolved in accordance with
Paragraph 1 of Article XII.

 

4.         Facilities :

 

The BUILDER shall furnish the Supervisor and
his assistant(s) with adequate office space and such other reasonable
facilities according to the BUILDER’s practice at or in the immediate vicinity
of the Shipyard as may be necessary to enable them to effectively carry
out their duties. The BUYER shall pay for all such facilities other than office
space at the BUILDER’s normal rate of charge.

 

5.         Liability of BUILDER :

 

The Supervisor and his assistant(s) shall at
all times be deemed to be the employees of the BUYER and not of the BUILDER.
The BUILDER shall be under no liability whatsoever to the BUYER, the Supervisor
or his assistant(s) for personal injuries, including death, suffered during the
time when he or they are on the VESSEL, or within the premises of either the
BUILDER or its subcontractors, or are otherwise engaged in and about the
construction of the VESSEL, unless, however, such personal injuries, including
death, were caused by a gross negligence of the BUILDER, or of any of its
employees or agents or subcontractors.

 

Nor shall the BUILDER be
under any liability whatsoever to the BUYER, the Supervisor or his assistant(s)
for damage to, or loss or destruction of property in Korea of the BUYER or of
the Supervisor or his assistant(s), unless such damage, loss or destruction
were caused by a gross negligence of the BUILDER or of any of its employees or
agents or subcontractors.

 

22

 

6.         Responsibility of BUYER :

 

The BUYER shall undertake and assure that the
Supervisor shall carry out his duties hereunder in accordance with the normal
shipbuilding practice of the BUILDER and in such a way so 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 the Supervisor who is 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 if necessary,
and if the BUYER considers that such BUILDER’s request is justified, the BUYER
shall effect such replacement as soon as conveniently arrangeable.

 

(End of Article)

 

23

 

ARTICLE V - MODIFICATIONS,
CHANGES AND EXTRAS

 

1.         How Effected :

 

Any modifications and/or
changes in the As-Built-Specifications shall be made by written agreement of
the parties hereto provided, however, that any modifications and/or changes
requested by the BUYER or an accumulation of such modifications and/or changes
will not adversely affect the BUILDER’s planning or programme in relation to
the BUILDER’s other commitments and if the BUYER shall assent to adjustment of
the Contract Price, time for delivery of the VESSEL and other terms and
conditions of this Contract as hereinafter provided. The BUILDER hereby agrees
to exert its best efforts to accommodate such reasonable request by the BUYER
so that the said changes and/or modifications may be made at a reasonable
cost and within the shortest period of time which is reasonably possible.

 

Any such agreement for modifications and/or
changes shall include an agreement as to the increase or decrease, if any, in
the Contract Price of the VESSEL together with an agreement as to any extension
or reduction in the time of delivery, or any other alterations in this Contract
or the As-Built-Specifications occasioned by such modifications and/or changes.

 

The aforementioned agreement to modify and/or change
the As-Built-Specifications may be effected by an exchange of letters
signed by the authorized representatives of the parties hereto, or telefax
confirmed in writing, manifesting such agreement. Such letters and confirmed
message exchanged by the parties hereto pursuant to the foregoing shall
constitute an amendment of the As-Built-Specifications, and such letters and
message shall be incorporated into this Contract and made a part hereof.

 

The BUILDER may make
minor changes to the As-Built-Specifications, if found necessary for
introduction of improved production methods or otherwise, provided that the
BUILDER shall first obtain the BUYER’s approval which shall not be unreasonably
withheld.

 

24

 

2.     Changes in Rules of Classification Society, Regulations, etc.:

 

If, after the date of signing this Contract, any
requirements as to classification, or as to the rules and regulations to
which the construction of the VESSEL is required to conform, are altered or
changed by the Classification Society or regulatory bodies authorized to make
such alterations or changes, either of the parties hereto upon receipt of
information thereof, shall transmit such information in full to the other party
in writing, thereupon within Twenty-one(21) days after receipt of the said
notice from the other party, the BUYER shall instruct the BUILDER in writing if
such alterations or changes shall be made in the VESSEL or not, in the BUYER’s
sole discretion.

 

(a)  If such alterations or
changes are compulsory for the construction of VESSEL, either of the parties
hereto, upon receipt of such information from Classification Society or such
other regulatory bodies, shall promptly transmit the same to the other in
writing, and the BUILDER shall thereupon incorporate such alterations or
changes into the construction of the VESSEL, provided that the BUYER shall
first agree to reasonable and proven adjustments required by the BUILDER in the
Contract Price, the Delivery Date and other terms and conditions of this
Contract and the As-Built-Specifications occasioned by or resulting from such
alterations or changes.

 

(b)  If such alterations or changes
are not compulsory for the construction of the VESSEL, and the BUYER desires to
incorporate such alterations or changes into the construction of the VESSEL,
then, the BUYER shall notify the BUILDER of such intention. The BUILDER may accept
such alterations or changes, provided that such alterations or changes will
not, in the judgement of the BUILDER, adversely affect the BUILDER’s planning
or program in relation to the BUILDER’s other commitments, and provided, further,
that the BUYER shall first agree to reasonable and proven adjustments required
by the BUILDER in the Contract Price, the Delivery Date and other terms and
conditions of this Contract and the As-Built-Specifications occasioned by or
resulting from such alterations or changes.

 

In
the event of a disagreement on price and delivery, and in the event that such
alterations or changes are compulsory for the construction of VESSEL, then the BUILDER shall proceed
with the required alterations and the dispute related to the above shall be
resolved in accordance with the provisions of Article XII.

 

 

25

 

Such agreement by the BUYER shall be effected in the
same manner as provided in Paragraph 1 of this Article for modifications
and/or changes of the As-Built-Specifications.

 

3.         Substitution of Materials :

 

In the event that any of the
materials required by the As-Built-Specifications or otherwise under this
Contract for the construction of the VESSEL can not be procured in time to
effect delivery of the VESSEL, or are in short supply, the BUILDER may,
provided the BUYER so agrees in writing, supply other materials and equipment
of the best available and like quality, capable of meeting the requirements of
the Classification Society and of the rules, regulations, requirements and
recommendations with which the construction of the VESSEL must comply. Any
agreement as to such substitution of materials shall be effected in the manner
as provided in Paragraph 1 of this Article, and shall, likewise, include
possible decrease in the Contract Price and other terms and conditions of this
Contract affected by such substitution.

 

(End
of Article)

 

26

 

 

ARTICLE VI - TRIALS AND ACCEPTANCE

 

Since
the VESSEL is the repeat of BUILDER’s Hull Nos. 1455 & 1456, some sea
trial items may be deleted subject to mutual agreement between the BUYER
and the BUILDER

 

1.         Notice :

 

The sea trial shall start
when the VESSEL is reasonably completed according to the
As-Built-Specifications.

 

The BUILDER shall give the BUYER at least Twenty
(20) days estimated prior notice and Seven(7) days confirming prior notice
by telefax of the time and place of the trial run of the VESSEL, and the BUYER
shall promptly acknowledge receipt of such notice. The BUYER shall have its
representatives on board the VESSEL to witness such trial run. Failure in
attendance of the BUYER’s representative at the trial run of the VESSEL for any
reason whatsoever after due notice to the BUYER as above provided shall be
deemed to be a waiver by the BUYER of its right to have its representative on
board the VESSEL at the trial run, and the BUILDER may conduct the trial
run without attendance of the BUYER’s representative, and in such case the
BUYER shall be obligated to accept the VESSEL on the basis of a certificate of
the BUILDER that the VESSEL, upon trial run, is found to conform to this
Contract and the As-Built-Specifications.

 

2.         Weather Condition :

 

The trial run shall be carried out under the weather
condition which is deemed favourable enough by the judgement of the BUILDER. In
the event of unfavourable weather on the date specified for the trial run, the
same shall take place on the first available day thereafter that the weather condition
permits. It is agreed that, if during the trial run of the VESSEL, the weather
should suddenly become so unfavourable that orderly conduct of the trial run
can no longer be continued, the trial run shall be discontinued and postponed
until the first favourable day next following, unless the BUYER shall assent in
writing to acceptance of the VESSEL on the basis of the trial run already made
before such discontinuance has occurred.

 

27

 

Any delay of trial run caused by such
unfavourable weather condition shall operate to postpone the Delivery Date by
the period of the delay involved and such delay shall be deemed as permissible
delay in the delivery of the VESSEL.

 

3.         How Conducted :

 

(a)       The VESSEL shall run the official trial trip
in the manner as specified in the As-Built-Specifications.

 

(b)       All expenses in connection
with the trial run are to be for account of the BUILDER and the BUILDER shall
provide, at its own expense, the necessary crew to comply with conditions of
safe navigation, fuel oil, fresh water and other consumable stores necessary,
the BUYER shall supply at its own expense lubricating oils and greases.

 

4.         Method of Acceptance or Rejection :

 

(a)       Upon completion of the trial run, the BUILDER
shall give the BUYER a notice by telefax of completion of the trial run, as and
if the BUILDER considers that the results of trial run indicate conformity of
the VESSEL to this Contract and the As-Built-Specifications. The BUYER shall,
within Five (5)days after receipt of such notice from the BUILDER, notify the
BUILDER by telefax of its acceptance or rejection of the VESSEL’s conformity to
this Contract and the As-Built-Specifications.

 

(b)       However, should the result of the trial run
show that the VESSEL, or any part or equipment thereof, does not conform to
the requirements of this Contract and/or the As-Built-Specifications, or if the
BUILDER is in agreement to non-conformity as specified in the BUYER’s notice of
rejection, then, the BUILDER shall take necessary steps to correct such
non-conformity.

 

Upon completion of correction of such
non-conformity, and re-test or trial if necessary, the BUILDER shall give the
BUYER a notice thereof by telefax.

 

The BUYER shall, within Three (3) days
after receipt of such notice from the BUILDER, notify the BUILDER of its
acceptance or rejection of the VESSEL.

 

(c)     In any event that the BUYER rejects the
VESSEL, the BUYER shall indicate in detail in its notice of rejection in what
respect the VESSEL, or any part or

 

28

 

equipment
thereof does not conform to this Contract and/or the
As-Built-Specifications.

 

(d)       In the event
that the BUYER fails to notify the BUILDER by telefax of the acceptance of or
the rejection together with the reason therefor of the VESSEL within the period
as provided in the above Sub-paragraph (a) or (b), the BUYER shall be
deemed to have accepted the VESSEL.

 

(e)       Any dispute between the BUILDER and the BUYER
as to the conformity or non-conformity of the VESSEL to the requirements of
this Contract and/or the As-Built-Specifications shall be submitted for final
decision in accordance with Article XII hereof.

 

5.         Effect of Acceptance :

 

Acceptance of the VESSEL
as above provided shall be final and binding so far as conformity of the VESSEL
to this Contract and the As-Built-Specifications is concerned and shall
preclude the BUYER from refusing formal delivery of the VESSEL as hereinafter
provided, if the BUILDER complies with all other procedural requirements for
delivery as provided in Article VII hereof. However, the BUYER’s
acceptance of the VESSEL shall not affect the BUYER’s right under Article IX
hereof.

 

The BUYER may accept the VESSEL under protest
with outstanding defects to be dealt under the guarantee provisions or made
subject of a claim for damages.

 

29

 

6.         Disposition of Surplus Consumable Stores

 

Any fuel oil or other 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 purchase price for such supply in Korea and the 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 an amount for the consumed quantity until delivery of
any lubricating oil and greases which were furnished and paid for by the BUYER
at the BUYER’s purchase price thereof. For avoidance of doubt, the practice of
this Article VI. 6 shall follow the practice in construction of the
BUILDER’s Hull Nos. 1455 & 1456.

 

(End
of Article)

 

30

 

ARTICLE VII
- DELIVERY

 

1.         Time and Place :

 

The VESSEL shall be delivered by the BUILDER to the
BUYER at the Shipyard on or before November 30, 2007, except that, in the
event of delays in the construction of the VESSEL or any performance required
under this Contract due to causes which under the terms of this Contract permit
postponement of the date for delivery, the aforementioned date for delivery of
the VESSEL shall be postponed accordingly.

 

The aforementioned date, or such later date to which
the requirement of delivery is postponed pursuant to such terms, is herein
called the “Delivery Date”.

 

2.         When and How Effected :

 

Provided that the BUILDER and the BUYER shall have
fulfilled all of their obligations stipulated under this Contract, the delivery
of the VESSEL shall be effected forthwith by the concurrent delivery by each of
the parties hereto to the other of the PROTOCOL OF DELIVERY AND ACCEPTANCE,
acknowledging delivery of the VESSEL by the BUILDER and acceptance thereof by
the BUYER.

 

3.         Documents to be delivered to BUYER :

 

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

 

(a)       PROTOCOL OF TRIALS of the VESSEL made
pursuant to the As-Built-Specifications.

 

(c)       PROTOCOL OF INVENTORY of the equipment of the
VESSEL, including spare parts and the like, as specified in the
As-Built-Specifications.

 

(d)       PROTOCOL OF STORES OF CONSUMABLE NATURE
referred to under Paragraph 6 of Article VI hereof.

 

31

 

(d)       ALL CERTIFICATES including the BUILDERS’s
CERTIFICATE required to be furnished upon delivery of the VESSEL pursuant to
this Contract and the As-Built-Specifications, necessary for the registration
of the VESSEL and BUYER’s trading requirements.

 

It is agreed that if, through no fault on the part of
the BUILDER, the Classifications certificates and/or other certificates are not
available at the time of delivery of the VESSEL, provisional certificates shall
be accepted by the BUYER, provided that the BUILDER shall furnish the BUYER
with the formal certificates as promptly as possible after such certificates
have been issued.

 

Application and certificate for statutory inspections
for the registry of the VESSEL shall be arranged by the BUYER at its expense.

 

(e)       DECLARATION OF WARRANTY of the BUILDER that
the VESSEL is delivered to the BUYER free and clear of any liens, charges,
claims, mortgages, or other encumbrances upon the BUYER’s title thereto, and in
particular that the VESSEL is absolutely free of all burdens in the nature of
imposts, taxes or charges imposed by Korean Governmental Authorities, as well
as of all liabilities of the BUILDER to its subcontractors, employees and crew,
and of the liabilities arising from the operation of the VESSEL in trial runs,
or otherwise, prior to delivery.

 

(f)        DRAWING AND PLANS pertaining to the VESSEL as
stipulated in the As-Built-Specifications.

 

(g)       COMMERCIAL INVOICE.

 

4.         Tender of VESSEL :

 

If
the BUYER fails to take delivery of the VESSEL after completion thereof
according to this Contract and the As-Built-Specifications without any
justifiable reason, the BUILDER shall have the right to tender delivery of the
VESSEL after compliance with all procedural requirements as above provided.

 

32

 

5.         Title and Risk :

 

Title to and risk of loss of the VESSEL shall pass to
the BUYER only upon the delivery and acceptance thereof having been completed
as stated above; it being expressly understood that, until such delivery is
effected, title to and risk of loss of the VESSEL and her equipment shall be in
the BUILDER.

 

6.         Removal of VESSEL :

 

The BUYER shall take possession of the VESSEL
immediately upon delivery and acceptance thereof and shall remove the VESSEL
from the premises of the Shipyard within Three (3) days after delivery and
acceptance thereof is effected. If the BUYER shall not remove the VESSEL from
the premises of the Shipyard within the aforesaid Three (3) days, in such
event, the BUYER shall pay to the BUILDER the reasonable mooring charges of the
VESSEL.

 

(End of Article)

 

33

 

ARTICLE VIII - DELAYS AND EXTENSION OF TIME FOR
DELIVERY

(FORCE MAJEURE)

 

1.         Causes of Delay (Force Majeure) :

 

If, at any time 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, national strikes, sabotage, Acts of God or the public enemy,
plague or other epidemics, quarantines, prolonged failure of electric current,
freight embargoes, or defects in major forgings or castings or delay in BUYER’s
supplied articles, if any, 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 by 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 other causes 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, 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 delays.

 

The enumerated contingencies shall not give rise to an
extension of the delivery date unless :

 

i)         The occurrence could not reasonably
have been foreseen by the BUILDER at the date of signing of the Contract.

 

ii)        The BUILDER shall have exercised reasonable
due diligence to avoid or minimize the occurrence of such event.

 

iii)       The BUILDER shall have used reasonable
efforts to mitigate the duration and effects of such events of the construction
schedule.

 

34

 

2.         Notice of Delay :

 

Within Fourteen (14) days after the date of occurrence
of any cause of delay, on account of which the BUILDER claims that it is
entitled under this Contract to a postponement of the Delivery Date, the
BUILDER shall notify the BUYER in writing or by telefax confirmed in writing of
the date when such cause of delay occurred. Likewise, within Fourteen (14) days after the date of ending of such
cause of delay, the BUILDER shall notify the BUYER in writing or by telefax
confirmed in writing of the date when such cause of delay ended.

 

The BUILDER shall also notify the BUYER of the
period, by which the Delivery Date is postponed by reason of such cause of
delay, with all reasonable dispatch after it has been determined. If the
BUILDER does not give the timely advice as above, the BUILDER shall lose the
right to claim such delays as permissible delay.

 

Failure of the BUYER to acknowledge to the BUILDER’s
claim for postponement of the Delivery Date within Fourteen (14)  days after receipt by the BUYER of such
notice of claim shall be deemed to be a waiver by the BUYER of its right to
object to such postponement of the Delivery Date.

 

3.         Definition of Permissible Delay :

 

Delays on account of such causes as specified in
Paragraph 1 of this Article and any other delay of a nature which under
the terms of this Contract permits postponement of the Delivery Date shall be
understood to be permissible delays and are to be distinguished from
unauthorized delays on account of which the Contract Price is subject to
adjustment as provided for in Article III hereof.

 

4.         Right to Rescind for Excessive Delay :

 

If the total accumulated time of all delays whether
permissible or not exceeds One Hundred and Eighty (180) days, then, in such
event, the BUYER may rescind this Contract in accordance with the
provisions of Article X hereof.

 

The
accumulated time as above shall be excluded by the time lost due to BUYER’s
Default or delays in the BUYER’s supplies. The BUILDER may, at any time after
the accumulated time of the aforementioned delays justifying rescission by the
BUYER, demand in writing that the BUYER shall make an election

 

35

 

proposing
a new delivery date, in which case the BUYER shall, within Fourteen (14) days
after such demand is received by the BUYER, either notify the BUILDER of its
intention to rescind this Contract, or consent to a postponement of the
Delivery Date to an agreed specific future date; it being understood and agreed
by the parties hereto that, if any further delay occurs on account of causes
justifying rescission as specified in this Article, the BUYER shall have the same
right of rescission upon the same terms as herein above provided.

 

(End of Article) 

 

36

 

ARTICLE IX
- WARRANTY OF QUALITY

 

1.         Guarantee :

 

The BUILDER, for the period of Twelve (12) months
after delivery of the VESSEL (hereinafter called “Guarantee Period”),
guarantees the VESSEL and her engine, including all parts and equipment
manufactured, furnished or installed by the BUILDER under this Contract, and
including the machinery, equipment and appurtenances thereof, under the
Contract but excluding any item which is supplied or designated by the BUYER or
by any other bodies on behalf of the BUYER, against all defects discovered
within the Guarantee Period which are due to improper design, defective
material, and/or poor workmanship or negligent or other improper acts or
omissions on the part of the BUILDER or its subcontractors (hereinafter
called the “Defect” or “Defects”) and are not a result of accident, ordinary
wear and tear, misuse, mismanagement, negligent or other improper acts or
omissions or neglect on the part of the BUYER, its employee or agents.

 

Upon rectification of an item claimed under this
guarantee, this item shall be covered for further Twelve (12) months under the
same terms and conditions. However, this is limited to a maximum of Twenty Four
(24) months from delivery date.

 

2.         Notice of Defects :

 

The BUYER shall notify the BUILDER in writing, or by
telefax of any defect for which claim is made under this guarantee, as promptly
as possible after discovery thereof. The BUYER’s notice shall describe in
detail the nature, cause if known and extent of the Defects.

 

The BUILDER shall have no obligation for any Defect
discovered prior to the expiry date of the Guarantee Period, unless notice of
such Defect is received by the BUILDER not later than Twenty (20) days after
such expiry date.

 

3.         Remedy of Defects :

 

(a)       The BUILDER
shall remedy, at its expense, any Defect against which the VESSEL is guaranteed
under this Article, by making all necessary repairs or

 

37

 

replacements at the Shipyard.

 

(b)       However, if the
BUYER should determine that it is commercially or operationally impracticable
to bring the VESSEL to the Shipyard, the BUYER may cause the necessary
repairs or replacements to be made elsewhere which is deemed suitable for the
purpose, provided that, in such event, the BUILDER may forward or supply
replacement parts or materials to the
BUYER’s agent to be designated by the BYUER in writting, unless
forwarding or supplying thereof the VESSEL would impair or delay the operation
of working schedule of the VESSEL. In the event that the BUYER proposes to
cause the necessary repairs or replacements for the VESSEL to be made at any
other shipyard or works than the Shipyard, the BUYER shall first, but in all
events as soon as possible, give the BUILDER a notice in writing or by telefax
confirmed in writing of the time and place when and where 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) the nature, cause and extent of the Defects complained of.
The BUILDER shall, in such case, promptly advise the BUYER by telefax, 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 for such repairs or replacements justified reasonable and proven actual
cost of repairs or replacements.

 

(c)       The reimbursement of the costs
incurred in relation to guarantee works shall be paid in a lumpsum after
expiration of the guarantee period.

 

(d)       In any case, the VESSEL shall be
taken, at the BUYER’s cost and responsibility, to the place elected, ready in
all respects for such repairs or replacement.

 

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

 

38

 

4.         Extent of BUILDER’s Responsibility :

 

 (a)      The BUILDER shall have no responsibility or
liability for any other defect whatsoever in the VESSEL than the Defects
specified in Paragraph 1 of this Article. Nor the BUILDER shall in any
circumstance be responsible or liable for any consequential or special loss,
damage or expense including but not limited to loss of time, loss of profit of
earning or demurrage directly or indirectly occasioned to the BUYER by reason
of the Defects specified in Paragraph 1 of this Article or due to repairs
or other works done to the VESSEL to remedy such Defects.

 

 (b)      The BUILDER shall not be responsible for any
defect in any part of the VESSEL which may, subsequently to delivery of
the VESSEL, have been replaced or repaired in any way by any other contractor
unless the BUILDER has not object the contractor to perform guarantee
repairs, or for any defect which have been caused or aggravated by omission or
improper use and maintenance of the VESSEL on the part of the BUYER, its
servants or agents or by ordinary wear and tear or by any other cause beyond
the control of the BUILDER.

 

 (c)      The guarantee contained as hereinabove in
this Article replaces and excludes any other liability, guarantee,
warranty and/or condition imposed or implied by the law, customary, statutory
or otherwise, by reason of the construction and sale of the VESSEL by the
BUILDER for and to the BUYER.

 

5.         Guarantee Engineer :

 

The BUILDER shall have the right to appoint a
Guarantee Engineer to serve on the VESSEL as its representative for a period of
Three (3) months from the date the VESSEL is delivered. However, if the
BUYER and the BUILDER shall deem it necessary to keep the Guarantee Engineer on
the VESSEL for a longer period, then he shall remain on board the VESSEL after
the said Three (3) months, but not longer than Six (6) months from
the delivery of the VESSEL.

 

The BUYER, and its employees, shall give such
Guarantee Engineer full cooperation in carrying out his duties as the representative of the
BUILDER on board the VESSEL.

 

The Guarantee Engineer shall
sign BUYER’s Indemnity Forms and shall at all times deemed to be an employee of
the BUILDER.

 

The BUYER shall accord the
Guarantee Engineer treatment comparable to the

 

39

 

VESSEL’s Chief Engineer, and
shall provide board and lodging at no cost to the BUILDER and/or the Guarantee
Engineer.

 

While the Guarantee Engineer is on board the VESSEL,
the BUYER shall pay to the BUILDER the sum of US$ 7,000.- per month as a
compensation for a part of cost and charges to be borne by the BUILDER in
connection with Guarantee Engineer and also shall pay the expenses of his
repatriation to Seoul, Korea by air upon termination of his service, the expenses
of his communication with the BUILDER incurred in performing his duties and
expenses, if any, of his medical and hospital care in the VESSEL’s hospital.

 

Pertaining to the detailed particulars of this
Paragraph, an agreement will be made according to this effect between the
parties hereto upon delivery of the VESSEL.

 

(End
of Article)

 

40

 

ARTICLE X - RESCISSION BY
BUYER

 

1.         Notice :

 

The payments made by the BUYER prior to delivery of
the VESSEL shall be in the nature of advances to the BUILDER, and in the event
that the VESSEL after sea trial is rejected by the BUYER or the VESSEL is
cancelled by the BUYER in accordance with the terms of this Contract under and
pursuant to any of the provisions of this Contract specifically permitting the
BUYER to do so and in the event that the Contract is rescinded by the BUYER
under and pursuant to any of the provisions of this Contract specially
permitting the BUYER, then the BUYER shall notify the BUILDER in writing or by
telefax confirmed in writing, and such rescission shall be effective as of the
date when notice thereof is received by the BUILDER.

 

2.         Refundment by BUILDER :

 

In case the BUILDER receives the notice stipulated in
Paragraph 1 of this Article, the BUILDER shall promptly refund to the BUYER the
full amount of all sums paid by the BUYER to the BUILDER on account of the
VESSEL together with the interest thereon, unless the BUILDER proceeds to the
arbitration under the provisions of Article XII hereof.

 

In such event, the BUILDER shall pay the BUYER
interest at the rate of Six percent (6.0%)per annum on the amount required
herein to be refunded to the BUYER, computed from the dates following on which
such sums were paid by the BUYER to the BUILDER to the date of remittance by
transfer of such refund to the BUYER by the BUILDER.

 

As security for refund of
instalments prior to delivery of the VESSEL, the BUILDER shall furnish the
BUYER within Fourteen (14) calendar days after the Contract signing with a
letter of guarantee covering the amount of such pre-delivery instalments in
favour of the BUYER. Such letter of guarantee shall have substantially the same
form and substance as Exhibit “A” annexed hereto.

 

41

 

3.         Discharge of Obligations :

 

Upon such refund by the BUILDER to the BUYER, all
obligations, duties and liabilities of each of the parties hereto to the other
under this Contract shall be forthwith completely discharged.

 

(End of Article)

 

42

 

ARTICLE XI
- BUYER’S DEFAULT

 

1.         Definition of Default :

 

The BUYER shall be deemed to be in default of its
performance of obligations under this Contract in the following cases :

 

(a)       If the first, second, third, fourth or fifth
instalment are not paid by the BUYER to the BUILDER within Five (5) banking
days after such instalment becomes due and payable as provided in Article II
hereof;

or

 

(b)       If the Delivery instalment is not paid by the
BUYER to the BUILDER concurrently with the delivery of the VESSEL as provided
in Article II hereof;

or

 

(c)       If the BUYER, when the VESSEL is duly
tendered for delivery by the BUILDER:

i)         fails to take delivery of the VESSEL within
Five (5) banking days from tendered date

ii)         having initiated the arbitration procedure
the BUYER does not accept delivery within Seven (7) days of an arbitration
award which is not appealed.

 

2.         Effect of Default on or before Delivery of VESSEL :

 

(a)       Should the BUYER make default in payment of
any instalment of the Contract Price on or before delivery of the VESSEL, the
BUYER shall pay the instalment(s) in default plus accrued interest thereon at
the rate of Six percent (6.0%) per annum computed from the due date of such
instalment to the date when the BUILDER receives the payment, and, for the
purpose of Paragraph 1 of Article VII hereof the Delivery Date of the
VESSEL shall be automatically extended by the period of continuance of such
default by the BUYER. In any event of default by the BUYER, the BUYER shall also
pay direct charges and expenses incurred by the BUILDER in consequence of such
default after mutual agreement.

 

(b)       If any default
by the BUYER continues for a period of Ten (10) days after the BUILDER’s
notification, the BUILDER may, at its option, rescind this Contract by giving
notice of such effect to the BUYER by telefax confirmed in writing.

 

43

 

Upon dispatch by the BUILDER
of such notice of rescission, this Contract shall be forthwith rescinded and
terminated. In the event of such rescission of this Contract, the BUILDER shall
be entitled to retain any instalment or instalments already paid by the BUYER
to the BUILDER on account of this Contract and the BUYER’s Supplies, if any.

 

3.         Disposal of VESSEL :

 

(a)       In the event that this Contract is rescinded
by the BUILDER under the provisions of Paragraph 2(b) of this Article, the
BUILDER may, at its sole discretion, either complete the VESSEL and sell the
same, or sell the VESSEL in its incomplete state, free of any right or claim of
the BUYER. Such sale of the VESSEL by the BUILDER shall be either by public
auction or private contract at the BUILDER’s sole discretion and on such terms
and conditions as the BUILDER shall deem fit.

 

(b)       In the event of such sale of the VESSEL, the
amount of the sale received by the BUILDER shall be applied firstly to all
expenses attending such sale or otherwise incurred by the BUILDER as a result
of the BUYER’s default, secondly to the payment of all costs and expenses of
construction of the VESSEL incurred by the BUILDER less BUYER’s Supplies and
the instalments already paid by the BUYER and the compensation to the BUILDER
for a reasonable loss of profit due to rescission of this Contract, and finally
to the repayment to the BUYER without interest, if any balance is obtained.

 

(c)       If the proceeds of sale are
insufficient to pay such total costs and loss of profit as aforesaid, the BUYER
shall promptly pay the deficiency to the BUILDER upon request.

 

(End of Article)

 

44

 

ARTICLE XII - ARBITRATION

 

1.         Decision by the
Classification Society :

 

If any dispute arises between the parties hereto in
regard to the design and/or construction of the VESSEL, its machinery and
equipment, and/or in respect of the materials and/or workmanship thereof and/or
thereon, and/or in respect of interpretations of this Contract or the
As-Built-Specifications, the parties may by mutual agreement refer the
dispute to the Classification Society or to such other expert as may be
mutually agreed between the parties hereto, and whose decision shall be final,
conclusive and binding upon the parties hereto.

 

2.         Proceedings of Arbitration :

 

In the event that the parties hereto do not agree to
settle a dispute according to Paragraph 1 of this Article and/or in the
event of any other dispute of any kind whatsoever between the parties and
relating to this Contract or its rescission or any stipulation herein, such
dispute shall be submitted to arbitration in London. Each party shall appoint
an arbitrator and in the event that they cannot agree, the two arbitrators so
appointed shall appoint an Umpire.

 

If the two arbitrators are unable to agree upon an
Umpire within Twenty(20) days after appointment of the second arbitrator,
either of the said two arbitrators may apply to the President for the time
being of the London Maritime Arbitrators Association to appoint the third
arbitrator, and the three arbitrators shall constitute the board of
arbitration.

 

Such arbitration shall be in accordance with and
subject to the provisions of the English Arbitration Act 1996 or any statutory
modification or re-enactment thereof for the time being in force.

 

The Arbitration shall be conducted in accordance
with the rules in force of the London Maritime Arbitrators Association.

 

Either party may demand arbitration of any such
dispute by giving notice to the other party. Any demand for arbitration by
either of the parties hereto shall state the name of the arbitrator appointed
by such party and shall also state specifically the question or questions as to
which such party is demanding arbitration.

 

45

 

Within Fourteen(14) days after receipt of notice of
such demand for arbitration, the other party shall in turn appoint a second
arbitrator and give notice in writing of such appointment to the party
demanding arbitration. If a party fails to appoint an arbitrator as
aforementioned within Fourteen(14) days following receipt of notice of demand
for arbitration by the other party, the party failing to appoint an arbitrator
shall be deemed to have accepted and appointed, as its own arbitrator, the
arbitrator appointed by the party demanding arbitration and the arbitration
shall proceed before this sole arbitrator who alone in such event shall
constitute the Arbitration Board.

 

The award of the arbitrators and/or Umpire shall be
final and binding on both  parties.

 

3.         Notice of Award :

 

The award shall immediately be given to the BUYER and
the BUILDER by telefax.

 

4.         Expenses :

 

The Arbitration Board shall determine which party
shall bear the expenses of the arbitration or the portion of such expenses
which each party shall bear.

 

5.         Entry in Court :

 

In case of failure by either party to respect the
award of the arbitration, the judgement may be entered in any proper court
having jurisdiction thereof.

 

6.         Alteration of Delivery Date :

 

In the event of reference to arbitration of any
dispute arising out of matters occurring prior to delivery of the VESSEL, the
award may include any postponement of the Delivery Date which the
Arbitration Board may deem appropriate.

 

 (End
of Article)

 

46

 

ARTICLE XIII - SUCCESSOR AND ASSIGNS

 

Neither
of the parties hereto shall assign this Contract to any other individual or
company save as provided hereto. unless prior consent of the other party is
given in writing. Should circumstances permit with or without alteration of the
terms and conditions of this Contract, such consent shall not be unreasonably
withheld by either party.

 

The
BUYER is hereby allowed to assign the Contract for the purposes of financing.

 

The BUYER is further allowed to nominate a company controlled
by the BUYER to take over the Contract.

 

The BUILDER shall fully cooperate in case the BUYER requests
UK Tax lease financing arrangements.

 

In
the event of any assignment pursuant to the terms of this Contract, the
assignee shall succeed to all of the rights and obligations of the assignor
under this Contract and the assignor shall remain responsible for the
fulfillment of this Contract.

 

In
the event of the assignment from the BUYER to any other individual or company
the BUILDER shall be entitled to request a Performance Guarantee from the BUYER
having same form and contents as Exhibit “C” annexed hereto.

 

The
BUYER and the BUILDER understand and acknowledge that the VESSEL shall be built
and constructed as a repeat and series VESSEL of the BUILDER’s Hull Nos.
1455 & 1456 as stipulated in this Contract. Thus, in the event
of a resale of the VESSEL, any
and all matters determined by mutual agreement between the BUYER and the
BUILDER prior to the resale of the VESSEL shall be accepted and complied by the
New BUYER (i.e., assignee). If
the New BUYER or its supervisor makes unreasonable requests that may have
a significant impact on the delivery schedule of the VESSEL and/or costs
of construction (including, without limitation to, request for fundamental
change of ship type or excessive revision of design specifications, etc.), the
BUILDER shall be entitled to refuse these requests. The BUYER shall notify the
above to the New BUYER before assignment or novation and the New BUYER will
have to accept any additional cost related to the new supervision.

 

(End of Article)

 

47

 

ARTICLE XIV
- TAXES AND DUTIES

 

1.         Taxes and Duties Incurred in Korea :

 

The BUILDER shall bear and pay all taxes, duties,
stamps and fees incurred in Korea in connection with execution and/or performance
of this Contract as the BUILDER, except for any taxes and duties imposed in
Korea upon the BUYER’s Supplies.

 

2.         Taxes and Duties Incurred outside Korea :

 

The BUILDER shall bear and pay all taxes,
duties, stamps and fees incurred outside Korea in connection with execution
and/or performance of this Contract including guarantee matter, except for
taxes and duties imposed upon the BUYER or the BUYER supplies.

 

(End
of Article)

 

48

 

ARTICLE XV - PATENTS, TRADEMARKS,
COPYRIGHTS, ETC.

 

1.         Patents, Trademarks and Copyrights :

 

Machinery and equipment of the VESSEL may bear
the patent number trademarks or trade names of the manufacturers. The BUILDER
shall defend and hold harmless the BUYER from patent liability or claims of
patent infringement of any nature or kind, including costs and expenses for, or
on account of any patented or patentable invention made or used in the
performance of this Contract and also including costs and expenses of
litigation, if any.

 

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.

 

The BUILDER’s warranty hereunder does not extend to
the BUYER’s Supplies.

 

2.         General Plans, Specifications and Working Drawings :

 

The BUILDER retains all rights with respect
to the As-Built-Specifications, and 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, without the prior written consent of
the BUILDER, except where it is necessary for usual operation, repair, registration, classification,
chartering, sale and maintenance of the VESSEL.

 

(End of Article)

 

49

 

ARTICLE XVI - BUYER’S SUPPLIES

 

1.         Responsibility of BUYER :

 

(a)     The BUYER shall, at its own risk, cost and
expense, supply and deliver to the BUILDER all of the items to be furnished by
the BUYER as specified in the As-Built-Specifications (herein called the BUYER’s
Supplies) at warehouse or other storage of the Shipyard in the proper condition
ready for installation in or on the VESSEL, in accordance with the time schedule designated
and advised by the BUILDER to the BUYER within 60 days from signing this
Contract.

 

 (b)      In order to facilitate installation by the
BUILDER of the BUYER’s Supplies in or on the VESSEL, the BUYER shall furnish
the BUILDER with necessary specifications, plans, drawings, instruction books,
manuals, test reports and certificates required by the rules and
regulations of the As-Built-Specifications.

 

If so requested by the BUILDER, the BUYER shall,
without any charge to the BUILDER, cause the representatives of the
manufacturers of the BUYER’s Supplies to assist the BUILDER in installation
thereof in or on the VESSEL and/or to carry out installation thereof by
themselves or to make necessary adjustments at the Shipyard.

 

 (c)      Any and all of the BUYER’s Supplies shall be
subject to the BUILDER’s reasonable right of rejection, as and if they are
found to be unsuitable or in improper condition for installation.

 

 (d)      Should the BUYER fail to deliver any of the
BUYER’s Supplies within the time designated, the Delivery Date shall be
automatically extended for a period which actually caused the delay in the delivery
of the VESSEL.

 

 (e)      If delay in
delivery of any of the BUYER’s Supplies exceeds thirty (30) days, then, the
BUILDER shall be entitled to proceed with construction of the VESSEL without
installation thereof in or on the VESSEL as hereinabove provided, and the BUYER
shall accept and take delivery of the VESSEL so constructed, unless such delay
is caused by Force Majeure in which case the provision Paragraph 1(d) of
this Article shall apply.

 

50

 

2.         Responsibility of BUILDER :

 

The BUILDER shall be responsible for storing and
handling with reasonable care of the BUYER’s Supplies after delivery thereof at
the Shipyard, and shall, at its own cost and expense, install them in or on the
VESSEL, unless otherwise provided herein or agreed by the parties hereto,
provided, always, that the BUILDER shall not be responsible for quality,
efficiency and/or performance of any of the BUYER’s Supplies.

 

(End of Article)

 

51

 

ARTICLE XVII - INSURANCE

 

1.         Extent of Insurance Coverage

 

From the time of launching until delivery of the
VESSEL, the BUILDER shall, at its own cost and expense, insure the VESSEL and
all machinery and equipment, appurtenances and outfits, including the BUYER’s
Supplies, built into or installed in or upon the VESSEL, against all risks
under the “Institute Causes for BUILDER’s Risk”, with first class insurance
company or underwriters in Korea. The amount of such insurance coverage shall,
up to the date of delivery of the VESSEL, not be less than the aggregate amount
of all instalments paid by the BUYER to the BUILDER, plus the value of the
BUYER’s Supplies in the custody of the Shipyard.

 

2.         Application of the Recovered Amounts

 

In the event that the VESSEL shall be damaged from any
insured cause at any time before delivery of the VESSEL, and in the further
event that such damage shall not constitute an actual or constructive total
loss of the VESSEL, the amount received in respect of the insurance shall be
applied by the BUILDER in 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 the
As-Built-Specifications, however, subject to the extension of delivery time
under Article VIII hereof (except in case of negligence of the BUILDER).

 

Should the VESSEL from any cause become an actual or
constructive total loss, the BUILDER shall either :

 

 (a)      proceed in accordance with the terms of this Contract,
in which case the amount received in respect of the insurance shall be applied
to the construction and repair of damage of the VESSEL, provided the parties
hereto shall have first agreed thereto in writing and to such reasonable
extension of delivery time as may be necessary for the completion of such
reconstruction and repair ; or

 

52

 

 (b)      refund
promptly to the BUYER the full amount of all sums paid by the BUYER to the
BUILDER as instalments in advance of delivery of the VESSEL with Six percent
(6.0%) interest, and deliver to the BUYER all BUYER’s Supplies (or the
insurance proceeds paid with respect thereto), in which case this Contract
shall be deemed to be automatically terminated and all right, duties,
liabilities and obligations of each of the parties to the other shall forthwith
cease and terminate.

 

3.         Termination of BUILDER’s Obligation to Insure

 

The BUILDER shall be under no obligation to insure
the VESSEL hereunder after delivery and acceptance of the VESSEL.

 

(End of Article)

 

53

 

ARTICLE XVIII – NOTICE

 

1.         Address :

 

Any and all notices and communications in connection
with this Contract shall be addressed as follows :

 

	
  To
  the BUYER :

  	
  Seacarriers
  Lines Inc. c/o DANAOS SHIPPING

  
	
   

  	
  CO. LTD. Akti Kondyli 14, 185 45 Piraeus, Greece

  
	
  Cable address :

  	
  DECUSHIP
  PIRAEUS

  
	
  Telefax No. :+30 210 422 0855

  
	
   

  
	
  To the BUILDER:

  
	
   

  
	
  Samsung Heavy Industries Co., Ltd.

  
	
  647-9, 11th Floor, KIPS Building,
  Kangnam-Ku,

  
	
  Seoul, Korea

  
	
  Calbe address : SSYARD SEOUL

  
	
  Telefax No. : (+82 2) 3458-7349, (+82 2)
  3458-7319

  
	
   

  
	
  or
  preferably to its Koje Yard :

  
	
   

  
	
  Samsung Heavy Industries Co., Ltd.

  
	
  P.O.BOX Gohyun 9

  
	
  530, Jangpyung-Ri,
  Shinhyun-Up, Kyungnam,

  
	
  Korea

  
	
  Telefax No. :         (+82
  55) 630-4947 (Design Department)

  
	
  (+82 55) 630-4978
  (Customer Satisfaction Team.)

  

 

2.         Language :

 

Any and all notices and communications in connection
with this Contract shall be written in the English language.

 

54

 

3.         Effective Date of Notice :

 

The notice in connection with this Contract shall
become effective from the date when such notice is received by the BUYER or by
the BUILDER except otherwise described in the Contract.

 

(End of Article)

 

55

 

ARTICLE XIX
- EFFECTIVE DATE OF CONTRACT

 

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

 

(End of Article)

 

56

 

ARTICLE XX - INTERPRETATION

 

1.         Laws Applicable :

 

The parties hereto agree that the validity and
interpretation of this Contract and of each Article and part thereof
shall be governed by the laws of England.

 

2.         Discrepancies :

 

All general language or requirements embodied in the
As-Built-Specifications are intended to amplify, explain and implement the
requirements of this Contract. However, in the event that any language or
requirements so embodied permit of an interpretation inconsistent with any
provisions of this Contract, then, in each and every such event, the applicable
provisions of this Contract shall prevail and govern. In the event of conflict
between the As-Built-Specifications and Plans, the As-Built-Specifications
shall prevail and govern.

 

3.         Entire Agreement :

 

This Contract contains the entire agreement and
understanding between the parties hereto and supersedes all prior negotiations,
representations, undertaking and agreements on any subject matter of this
Contract.

 

4.         Amendments and Supplements :

 

Any supplement, memorandum of understanding or
amendment, whatsoever form it may be relating to this Contract, to be
made and signed among parties hereof after signing this Contract, shall be the
integral part of this Contract and shall be predominant over the
respective corresponding Article and/or Paragraph of this Contract.

 

The Contract can only be amended in writing.

 

(End
of Article)

 

57

 

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

 

	
  BUYER
  :

  	
  BUILDER
  :

  
	
  SEACARRIERS LINES INC.

  	
  SAMSUNG
  HEAVY IND., CO., LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  John Coustas

  	
   

  	
   

  	
  /s/
  C.H. Park

  	
   

  
	
  By : John Coustas

  	
   

  	
  By : C.H. Park

  
	
  Title
  : Director

  	
   

  	
  Title
  : Attorney-in fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Yeon Taek Chae

  	
   

  
	
   

  	
   

  	
  Initialed
  by : Yeon Taek Chae

  
	
   

  	
   

  	
  Title
  : Attorney-in-fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS
  :

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ I. Prokopakis

  	
   

  	
   

  	
   

  
	
  By
  : I. Prokopakis

  	
   

  	
   

  
	
  Title
  : M. Director Deputy

  	
   

  	
   

  
							

 

58

 

EXHIBIT “A”

 

LETTER OF
REFUNDMENT GUARANTEE

 

Gentlemen
:

 

We
hereby issue our letter of guarantee no.          
in favour of Seacarriers Lines Inc., (hereinafter called the “BUYER”) for
account of Samsung Heavy Industries Co., Ltd.(hereinafter called the “BUILDER”)
as follows in consideration of the shipbuilding contract dated June 30,
2005 (hereinafter called the “Contract”) made by and among the BUYER and the
BUILDER for the construction of one(1) single screw diesel engine driven
Container VESSEL having BUILDER’s Hull No. 1640 (hereinafter called the “VESSEL”).

 

If
in connection with the terms of the Contract the BUYER shall become entitled to
a refund of the advance payment(s) made to the BUILDER prior to the delivery of
the VESSEL, we hereby irrevocably guarantee the repayment of the same to the
BUYER immediately on demand being initially US$ 7,000,000.- (Say U.S. Dollars
Seven Million only) together with interest thereon at the rate of Six (6) percent
per annum from the respective dates on which such sums were paid by the BUILDER
to the date of remittance by telegraphic transfer of such refund.

 

The
amount of this guarantee will be automatically increased, not more than three
times, upon BUILDER’s receipt of the respective instalment: each time by the
amount of instalment of US$ 7,000,000.- (Say U.S. Dollars Seven Million only),
US$ 7,000,000.- (Say U.S. Dollars Seven Million only) and US$ 7,000,000.- (Say
U.S. Dollars Seven Million only) 
respectively 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$ 28,000,000.- (Say U.S. Dollars Twenty Eight Million only) plus interest
thereon at the rate of Six (6) percent per annum from the respective dates
on which such sums were paid by the BUYER to the BUILDER to the date of
remittance by telegraphic transfer of the refund.

 

Our
liability under this letter of guarantee shall not be affected by any
alteration to or variation of the terms of the Contract you may hereafter
agree with the BUILDER and by any other matter of circumstances, including
bankruptcy or insolvency of the BUILDER, which might otherwise discharge our
liability hereunder as guarantor of the BUILDER’s obligations as aforesaid.

 

59

 

In
case any refund is made to you by the BUILDER or by us under this guarantee,
our liability hereunder shall be automatically reduced by the amount of such
refund.

 

This
letter of guarantee is available against BUYER’s simple receipt and signed
statement certifying that 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 within Thirty One (31) days after BUYER’s demand to the BUILDER.

 

Refund
shall be made to BUYER by telegraphic transfer in United States Dollars to an
account designated by you without deduction, withholding or set-off.

 

This
letter of guarantee shall expire and 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, in
either case, this letter of guarantee shall be returned to us. This guarantee
is valid from the date of this letter of guarantee until or in the event of
delayed delivery until such time as the VESSEL is delivered by the BUILDER to
the BUYER in accordance with the terms of the Contract.

 

Notwithstanding
the provisions hereinabove, in case we receive notification from you or the
BUILDER confirmed by an Arbitrator stating 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, the period of
validity of this guarantee shall be extended until Thirty (30) days after the
final and non-appealable award shall be rendered in the Arbitration and a copy
thereof acknowledged by the Arbitrators. In such case, this guarantee shall not
be available unless and until such acknowledged copy of the final award in the Arbitration
justifying your claim is presented to us.

 

Your
rights in respect of this letter of guarantee are assignable from the date of
this letter of guarantee until such time as the VESSEL is delivered by the
BUILDER to the BUYER in accordance with the provisions of the Contract, on the
understanding that you will notify us of the identity of any assignee of your
rights under this letter of guarantee.

 

Any
notice or demand under this letter of guarantee shall be given by facsimile and
sent to:

 

60

 

 

 

or
to such other address as we might notify to you in writing. A notice shall be
deemed to be served and shall take effect 2 hours after its transmission is
completed, provided that if a notice would be deemed to be served on a day
which is not a business day, or which is a business day but after 5:00 p.m.
local time, in the place of receipt, the notice shall be deemed to be served
and shall take effect at 9:00 a.m. on the next day which is a business
day.

 

This
guarantee shall be governed by and construed in accordance with the Laws of
England. Any disputes arising under this guarantee (but not any disputes
arising under the Contract which shall be determined by arbitration in
accordance with the terms of the Contract and as referenced in this letter of
guarantee) shall be determined by the High Court of Justice in London to whose
exclusive jurisdiction we hereby submit. We appoint                          

 

                                                                                                                         
as our agents for service of process in connection with any proceedings in such
courts.

 

We
each jointly and severally hereby represent and guarantee that we have the
corporate power and authority to execute, deliver and perform the
obligations under this letter of guarantee, and that such execution and
performance will not violate or conflict with any provision of law, statute,
rule, permit or regulation of any government, regulatory body, agency or other
authority in the jurisdictions where we are subject to such laws and
regulations.

 

61

 

IN
WITNESS WHEREOF, we have hereunder set our hands and seal by our duly
authorized representatives this      day of         ,
2005.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  For
  and on behalf of

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name
  :

  
	
   

  	
  Title
  : Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  For
  and on behalf of

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name
  :

  
	
   

  	
  Title
  : Attorney-in-Fact

  

 

62

 

EXHIBIT “B”

 

Samsung
Heavy Industries Co., Ltd.

11th
Floor, KIPS Building

647-9,
Yoksam-Dong, Kangnam-Ku,

Seoul,
Korea 135-080

 

Date
:                        , 2005

 

PERFORMANCE GUARANTEE

 

In
consideration of the performance of a certain shipbuilding contract dated
                  (hereinafter
called the “Contract”) by SEACARRIERS LINES INC. of 80 Broad street, Monrovia,
Liberia having your Hull No.1640 (hereinafter called the “VESSEL”)
providing among other things for payment of the Contract Price amounting to
United States Dollars            
(US$              );

 

We,
the undersigned, hereby irrevocably and unconditionally guarantee to you, your
successors, and assigns the due and faithful performance by the BUYER of its
all liabilities and responsibilities under the Contract and any supplement,
amendment, change or modification hereafter made thereto, including but not
limited to, due and prompt payment of the Contract Price by the BUYER to you,
your successors, and assigns under the Contract and any supplement, amendment,
change or modification as aforesaid (hereby expressly waiving notice of any
such supplement, amendment, change or modification as may be agreed to by
the BUYER and confirming that this guarantee shall be fully applicable to the
Contract as so supplemented, amended, changed or modified).

 

This
Performance Guarantee shall be governed by the laws of England.

 

 

GUARANTOR
:

BY
:

TITLE
:

WITNESS
:

 

63

 

EXHIBIT “C”

 

Samsung
Heavy Industries Co., Ltd.

11th
Floor, KIPS Building

647-9,
Yoksam-Dong, Kangnam-Ku,

Seoul,
Korea 135-080

 

Date
:                        , 2005

 

PERFORMANCE GUARANTEE

 

In
consideration of the assignment of a certain shipbuilding contract dated                   (hereinafter
called the “Contract”) by us to             
having your Hull No.1640(hereinafter called the “VESSEL”) providing among other
things for payment of the Contract Price amounting to United States
Dollars            (US$              );

 

We,
the undersigned, hereby irrevocably and unconditionally guarantee to you, your
successors, and assigns the due and faithful performance by the BUYER of its
all liabilities and responsibilities under the Contract and any supplement,
amendment, change or modification hereafter made thereto, including but not
limited to, due and prompt payment of the Contract Price by the BUYER to you,
your successors, and assigns under the Contract and any supplement, amendment,
change or modification as aforesaid (hereby expressly waiving notice of any
such supplement, amendment, change or modification as may be agreed to by
the BUYER and confirming that this guarantee shall be fully applicable to the
Contract as so supplemented, amended, changed or modified).

 

This
Performance Guarantee shall be governed by the laws of England.

 

 

GUARANTOR
:

BY
:

TITLE
:

WITNESS
:

 

64Exhibit 10.21

 

FOR

 

CONSTRUCTION
AND SALE

 

OF

 

A 4,250 TEU
CONTAINER VESSEL

(HULL NO. 1670)

 

 

BETWEEN

 

Bayview
Shipping Inc.

As BUYER

 

AND

 

 

Samsung
Heavy Industries Co., Ltd.

As BUILDER

 

 

I N D E X

 

	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  PREAMBLE

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE I - DESCRIPTION AND CLASS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Description

  	
   

  	
  8

  
	
  2. Dimensions and
  Characteristics

  	
   

  	
  8

  
	
  3. Classification, Rules and
  Regulations

  	
   

  	
  9

  
	
  4. Subcontracting

  	
   

  	
  10

  
	
  5. Registration

  	
   

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE II - CONTRACT PRICE AND TERMS OF
  PAYMENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Contract Price

  	
   

  	
  11

  
	
  2. Adjustment of Contract
  price

  	
   

  	
  11

  
	
  3. Currency

  	
   

  	
  11

  
	
  4. Terms of Payment

  	
   

  	
  11

  
	
  5. Method of Payment

  	
   

  	
  12

  
	
  6. Notice of Payment on or
  before Delivery

  	
   

  	
  13

  
	
  7. Expenses

  	
   

  	
  13

  
	
  8. Prepayment

  	
   

  	
  13

  
	
  9. Performance Guarantee

  	
   

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE III - ADJUSTMENT OF CONTRACT PRICE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Delivery

  	
   

  	
  15

  
	
  2. Speed

  	
   

  	
  16

  
	
  3. Fuel Consumption

  	
   

  	
  17

  
	
  4. Deadweight

  	
   

  	
  17

  
	
  5. Early Delivery

  	
   

  	
  18

  
	
  6. Effect of Rescission

  	
   

  	
  18

  

 

2

 

	
  ARTICLE IV - APPROVAL OF PLANS AND DRAWINGS AND
  INSPECTION DURING CONSTRUCTION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Approval of Plans and
  Drawings

  	
   

  	
  19

  
	
  2. Appointment of BUYER’s
  Supervisor

  	
   

  	
  19

  
	
  3. Inspection by the
  Supervisor

  	
   

  	
  20

  
	
  4. Facilities

  	
   

  	
  21

  
	
  5. Liability of BUILDER

  	
   

  	
  21

  
	
  6. Responsibility of BUYER

  	
   

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE V
  - MODIFICATIONS, CHANGES AND EXTRAS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. How Effected

  	
   

  	
  23

  
	
  2. Change in Rules of
  Classification Society, Regulations etc

  	
   

  	
  24

  
	
  3. Substitution of
  Materials

  	
   

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI - TRIALS AND ACCEPTANCE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Notice

  	
   

  	
  26

  
	
  2. Weather Condition

  	
   

  	
  26

  
	
  3. How Conducted

  	
   

  	
  27

  
	
  4. Method of Acceptance of
  Rejection

  	
   

  	
  27

  
	
  5. Effect of Acceptance

  	
   

  	
  28

  
	
  6. Disposition of Surplus
  Consumable Stores

  	
   

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII - DELIVERY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Time and Place

  	
   

  	
  29

  
	
  2. When and How Effected

  	
   

  	
  29

  
	
  3. Documents to be
  delivered to BUYER

  	
   

  	
  29

  
	
  4. Tender of VESSEL

  	
   

  	
  30

  
	
  5. Title and Risk

  	
   

  	
  31

  
	
  6. Removal of VESSEL

  	
   

  	
  31

  

 

3

 

	
  ARTICLE VIII - DELAYS AND EXTENSION OF TIME FOR
  DELIVERY (FORCE MAJEURE)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Causes of Delay

  	
   

  	
  32

  
	
  2. Notice of Delay

  	
   

  	
  33

  
	
  3. Definition of
  Permissible Delay

  	
   

  	
  33

  
	
  4. Right to Rescind for
  Excessive Delay

  	
   

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX - WARRANTY OF QUALITY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Guarantee

  	
   

  	
  35

  
	
  2. Notice of Defects

  	
   

  	
  35

  
	
  3. Remedy of Defects

  	
   

  	
  35

  
	
  4. Extent of the BUILDER’s
  Responsibility

  	
   

  	
  37

  
	
  5. Guarantee Engineer

  	
   

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE X - RESCISSION BY BUYER

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Notice

  	
   

  	
  39

  
	
  2. Refundment by BUILDER

  	
   

  	
  39

  
	
  3. Discharge of
  Obligations

  	
   

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI - BUYER’S DEFAULT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Definition of Default

  	
   

  	
  41

  
	
  2. Effect of Default on or
  before Delivery of VESSEL

  	
   

  	
  41

  
	
  3. Disposal of VESSEL

  	
   

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII - ARBITRATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Decision by
  Classification Society

  	
   

  	
  43

  
	
  2. Proceedings of
  Arbitration

  	
   

  	
  43

  
	
  3. Notice of Award

  	
   

  	
  44

  
	
  4. Expenses

  	
   

  	
  44

  
	
  5. Entry in Court

  	
   

  	
  44

  
	
  6. Alteration of Delivery
  Date

  	
   

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII - SUCCESSOR AND ASSIGNS

  	
   

  	
  45

  

 

4

 

	
  ARTICLE XIV - TAXES AND DUTIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Taxes and duties
  Incurred in Korea

  	
   

  	
  46

  
	
  2. Taxes and Duties
  Incurred outside Korea

  	
   

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV - PATENTS, TRADEMARKS, COPYRIGHTS,
  ETC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Patents, Trademarks and
  Copyrights

  	
   

  	
  47

  
	
  2. General Plans,
  Specifications and Working Drawings

  	
   

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVI - BUYER’S SUPPLIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Responsibility of BUYER

  	
   

  	
  48

  
	
  2. Responsibility of
  BUILDER

  	
   

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVII - INSURANCE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Extent of Insurance
  Coverage

  	
   

  	
  50

  
	
  2. Application of the
  Recovered Amounts

  	
   

  	
  50

  
	
  3. Termination of BUILDER’s
  Obligation to Insure

  	
   

  	
  51

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVIII - NOTICE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Address

  	
   

  	
  52

  
	
  2. Language

  	
   

  	
  52

  
	
  3. Effective Date of
  Notice

  	
   

  	
  53

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIX - EFFECTIVE DATE OF CONTRACT

  	
   

  	
  54

  
	
   

  	
   

  	
   

  
	
  ARTICLE XX - INTERPRETATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1. Laws Applicable

  	
   

  	
  55

  
	
  2. Discrepancies

  	
   

  	
  55

  
	
  3. Entire Agreement

  	
   

  	
  55

  
	
  4. Amendments and
  supplements

  	
   

  	
  55

  

 

5

 

	
  END OF CONTRACT

  	
   

  	
  56

  
	
   

  	
   

  	
   

  
	
  EXHIBIT “A” LETTER OF REFUNDMENT GUARANTEE

  	
   

  	
  57

  
	
   

  	
   

  	
   

  
	
  EXHIBIT “B” PERFORMANCE GUARANTEE

  	
   

  	
  61

  
	
   

  	
   

  	
   

  
	
  EXHIBIT “C” PERFORMANCE GUARANTEE

  	
   

  	
  62

  

 

6

 

THIS CONTRACT, made and entered
into on this 28th day of March, 2006 by and between Bayview Shipping
Inc. a corporation incorporated and existing under the laws of Liberian, having
its registered office at 80 Broad Street, Monrovia, Liberia (hereinafter called the “BUYER”), on the
one part and Samsung Heavy Industries Co., Ltd., a corporation
incorporated and existing under the laws of the Republic of Korea of having its
registered office at 647-9, Yeoksam-Dong, Kangnam-ku, Seoul, Korea (hereinafter
called the “BUILDER”), on the other part,

 

WITNESSETH:

 

In consideration of the mutual
covenants herein contained, the BUILDER agrees to design, build, launch and
complete in accordance with first class modern Korean shipbuilding
practice and standards one (1) Single Screw Diesel Engine driven Container
VESSEL as described in the Specifications attached herewith and any addendum
thereto (hereinafter called the “VESSEL”) at the BUILDER’s shipyard located in Geoje
Island, Korea (hereinafter called the “Shipyard”) and to deliver and sell the
same to the BUYER, and the BUYER hereby agrees to purchase and accept delivery
of the VESSEL from the BUILDER and to pay for the same upon the terms and
conditions hereinafter set forth.

 

7

 

ARTICLE I - DESCRIPTION AND CLASS

 

1.                          Description :

 

The VESSEL shall be an ocean going single screw
diesel engine driven fully cellular container VESSEL suitable for carrying dry
cargo containers having the BUILDER’s Hull No.1670 and shall be built,
constructed, equipped and completed in accordance with the ‘As-Built-Specifications’
as specified in the shipbuilding
contracts of the BUILDER’s Hull No. 1639 and 1640 (hereinafter called as
the “HN1639 Series Contract”) to build just identical vessels
to the BUILDER’s Hull No. 1639 and 1640 (hereinafter called as the “HN1639
Series”) as a repeat and series, and the ‘Maker List’ as specified in the
Supplement Agreement No.1 (dated June 30, 2005) to the HN 1639 Series Contract
(hereinafter collectively called as the “SPECIFICATIONS”).

 

Thus, all drawings and plans made by the BUILDER
and duly approved by the BUYER during the construction of the HN1639 Series in
accordance with HN 1639 Series Contract shall be used without any further
change, modification and approval by the BUYER, and all extra/credit
costs agreed as of February 27, 2006 for the HN 1639 Series are
included into the ship price described in this CONTRACT, and all construction procedure including model
test and sea trial etc. shall be done on the basis of the just repeat and series VESSEL
of the HN 1639s Series.

 

2.                          Dimensions and
Characteristics :

 

	
  Length,
  overall

  	
   

  	
   

  	
   

  	
  appx.

  	
   

  	
  259.8

  	
  m

  
	
  Length,
  between perpendiculars

  	
   

  	
   

  	
   

  	
  appx.

  	
   

  	
  244.8

  	
  m

  
	
  Breadth, moulded

  	
   

  	
   

  	
   

  	
  appx.

  	
   

  	
  32.25

  	
  m

  
	
  Depth, moulded

  	
   

  	
   

  	
   

  	
  appx.

  	
   

  	
  19.3

  	
  m

  
	
  Designed loaded draught,
  moulded

  	
   

  	
   

  	
   

  	
  appx. 

  	
   

  	
  11.0

  	
  m

  
	
  Scantling draught, moulded

  	
   

  	
   

  	
   

  	
  appx.

  	
   

  	
  12.6

  	
  m

  

 

Main Engine                                                                   :                                                      MAN B&W 8K 90MC-C type License Made MCR
49,680 bhp at 104 r.p.m.

 

	
  Deadweight,
  guaranteed

  	
  :

  	
   

  	
  50,500
  metric tons at the moulded

  

 

8

 

	
   

  	
   

  	
   

  	
  scantling draught of
  12.6 meters.

  
	
   

  	
   

  	
   

  	
   

  
	
  Speed,
  guaranteed

  	
  :

  	
   

  	
  24.5
  knots at a draught of 11.0 meters and main engine developing power of 38,880
  bhp (metric).

  
	
   

  	
   

  	
   

  
	
  Fuel
  Consumption, guaranteed :

  	
   

  	
  124.3
  grams/bhp(metric)-hour using marine diesel oil having lower calorific value
  of 10,200 kcal/kg at
  normal continuous rating of 44,710 bhp(metric) measured at the shop trial.

  

 

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

 

3.                          Classification, Rules and Regulations :

 

The VESSEL, including its machinery, equipment and
outfittings shall be constructed in accordance with the rules and
regulations in year 2004 July edition of the Classification Society in
accordance with both the interpretation of Classification Society (dated on
2005-06-29 Ref No. MKOKR120/MSSH/Gen-precontract/PUS-J-668) and the
interpretation of the Classification Society (dated 28th February 2006
Ref. No. MKOKR120/MSSH/Gen-Precontract/PUS-J-698 in respect of new updates in effect as of March 28,
2006 from rule and regulations applied to the HN1639 Series) and under special survey of Det Norske
Veritas (hereinafter called the “Classification Society”) and shall be
distinguished in the register by the symbol of X1A1 “
Container Carrier”, NAUTICUS, EO, and In water survey and TMON shall be applied
according to the requirement of the class rule.

 

Decisions
of the Classification Society as to compliance or non-compliance with the
classification shall be final and binding upon both parties hereto. Details of
its notation shall be in accordance with the SPECIFICATIONS .

 

The VESSEL
shall also comply with the compulsory rules, regulations and requirements of
the regulatory bodies as described in the SPECIFICATIONS rectified and in
effect as of the signing date of this Contract. Non-compulsory rules,
regulations and requirements of the regulatory bodies shall be dealt with in

 

9

 

accordance
with Article V (2) of this Contract.

 

All the
fees and charges incidental to the classification and with respect to
compliance with the above referred rules, regulations and requirements shall be
for account of the BUILDER except otherwise agreed.

 

4.                          Subcontracting :

 

The BUILDER
may, at its sole discretion and responsibility, subcontract any portion of the
construction work of the VESSEL, provided that the construction and assembly of
the VESSEL shall be carried out as is normally done according to the BUILDER’s
building practice and provided further that the BUILDER shall be responsible to
the BUYER in respect of any construction work carried out by such
subcontractors.

 

5.                          Registration :

 

The VESSEL,
at the time of its delivery and acceptance, shall be registered at the port of
registry by the BUYER under Greek, Liberian, Cyprus or Panama flag at the BUYER’s
expenses. The BUYER shall decide the flag within one(1) month after the
date of signing of this Contract.

 

(End of
Article)

 

10

 

ARTICLE II
- CONTRACT PRICE AND TERMS OF PAYMENT

 

1.                          Contract Price :

 

The Contract price of the VESSEL and exclusive of
the BUYER’s Supplies as provided in Paragraph 1 of Article XVI hereof is Sixty
Three Million Eight Hundred Thousand United States Dollars (US$ 63,800,000.-)
(hereinafter called the “Contract Price”), which shall be subject to upward or
downward adjustment, if any, as hereinafter set forth in this Contract.

 

2.                          Adjustment of Contract Price:

 

Increase or
decrease of the Contract Price, if any, due to adjustments thereof made in
accordance with the provisions of this Contract, shall be adjusted by way of
addition to or subtraction from the Contract Price upon delivery and acceptance
of the VESSEL in the manner as hereinafter provided.

 

3.                          Currency :

 

Any and all payments by the
BUYER to the BUILDER which are due under this Contract shall be made in United
States Dollars.

 

4.                          Terms of Payment :

 

The
Contract Price shall be due and payable by the BUYER to the BUILDER in the
instalments as follows :

 

(a)                      First Instalment :

 

The First Instalment amounting to Six Million Three
Hundred and Eighty Thousand United States Dollars (US$ 6,380,000.-) shall be
due and payable upon issuance and delivery to the BUYER of the original of
Refund Guarantee.

 

(b)                     Second Instalment :

 

The Second Instalment amounting to Six
Million Three Hundred and Eighty Thousand Million United States Dollars (US$ 6,380,000.-)
shall be due and payable upon six(6) calendar months after the date of
singing of this Contract.

 

11

 

(c)                      Third
Instalment :

 

The Third Instalment amounting to Six Million Three
Hundred and Eighty Thousand Million United States Dollars (US$ 6,380,000.-)
shall be due and payable upon steel cutting of the VESSEL.

 

(d)                     Fourth Instalment :

 

The Foruth Instalment amounting to Six
Million Three Hundred and Eighty Thousand Million United States Dollars (US$ 6,380,000.-)
shall be due and payable upon keel laying of the VESSEL.

 

 (e)                   Fifth Instalment :

 

The Delivery Instalment amounting to Thirty Eight Million
Two Hundred and Eighty Thousand United States Dollars (US$ 38,280,000.-) plus
any increase or minus any decrease due to adjustments of the Contract Price
under and pursuant to the provisions of this Contract, shall be due and payable
upon delivery and acceptance of the VESSEL or upon tender for delivery of the
VESSEL referred to in Paragraph 4 of Article VII of this Contract.

 

It is agreed that no payment shall be effected until
the original Refund Guarantee is delivered to the BUYER.

 

5.                          Method of Payment :

 

 (a)                   First Instalment :

 

Within
Seven(7) banking days after 28th day of March 2006, the
BUYER shall remit by telegraphic transfer the first instalment to the account
of The Export-Import Bank of Korea, Head Office, Seoul, Korea with Deutsche
Bank Trust Company Americas(BIC : BKTRUS33), 60 Wall Street, Mail Stop NYC 60
1310, New York, NY 10005, USA, Account No.04 029 695, in favour of Samsung
Heavy Industries., Ltd, SWIFT code : EXIKKRSE or other bank as designated by
the Builder, in favor of Samsung Heavy Industrise Co, Ltd.(hereinafter called
the “BUILDER’s Bank”)

 

 (b)                  Second,
Third and Fourth Instalment :

 

Upon receipt of telefax notice from the BUILDER
confirming that the second, third, and fourth instalment on each event is due
and payable, the BUYER shall

 

12

 

remit by telegraphic transfer the second, third, and
fourth instalment to the aforesaid account of the BUILDER’s Bank in favour of
Samsung Heavy Industries Co., Ltd.

 

 (c)                   Fifth Instalment :

 

At least One (1) banking days prior to delivery
and acceptance of the VESSEL, the BUYER shall remit by telegraphic transfer the
fifth instalment to the name of the BUYER at BUILDER’s BANK, with an
irrevocable instruction that the amount so remitted shall be payable to the
BUILDER against a facsimile copy of PROTOCOL OF DELIVERY and ACCEPTANCE OF THE
VESSEL signed by the BUYER and the BUILDER or returned to the BUYER if such
PROTOCOL OF DELIVERY and ACCEPTANCE has not been presented within 15 days.

 

Simultaneously with each of all such payments, the
BUYER shall cause the BUYER’s BANK to advise the BUILDER’s BANK of the details
of such payments by authenticated bank cable.

 

Any claim which the BUYER may have against the
BUILDER hereunder shall be settled and liquidated separately from any payment
by the BUYER to the BUILDER hereunder.

 

6.                          Notice of Payment on or
before Delivery :

 

With the
exception of the first instalment, the BUILDER shall give the BUYER Five(5) banking
days prior notice by telefax of the anticipated due date and amount of each
instalment payable on or before delivery of the VESSEL.

 

7.                          Expenses.

 

Expenses
and bank charges for remitting payments and any taxes, duties, expenses and
fees connected with such payment shall be for account of the BUYER referred to
in paragraph 2 of Article XIV of this Contract, except expenses and bank
charges of the BUILDER’s BANK.

 

8.                          Prepayment :

 

Prepayment
of any instalment due on or before delivery of the VESSEL shall be subject to
mutual agreement between the parties hereto.

 

13

 

9.                          Performance Guarantee

 

Upon signing this Contract, the BUYER shall provide
the BUILDER with a Performance Guarantee in order to secure the due and
faithful performance of this Contract by the BUYER having same form and
contents as Exhibit ”B” annexed hereto.

 

(End of Article)

 

14

 

ARTICLE III - ADJUSTMENT OF CONTRACT PRICE

 

The
Contract Price shall be subject to adjustment, as hereinafter set forth, in the
event of the following contingencies (it being understood by both parties that
any reduction of the Contract Price is by way of liquidated damages and not by
way of penalty) :

 

1.                          Delivery :

 

 (a)                   No adjustment shall be made
and the Contract Price shall remain unchanged for the first Thirty (30) days of
delay in delivery of the VESSEL beyond the Delivery Date as defined in Article VII
hereof (ending as of twelve o’clock midnight of the Thirty (30) day of delay).

 

 (b)                  If
the delivery of the VESSEL is delayed more than Thirty (30) days after the Delivery Date, the Contract
Price shall be reduced by the sum of Twenty Seven Thousand Five Hundred United
States Dollars (US$27,500.-) for each full day for which thereafter delivery is
delayed.

 

However, the total reduction in the Contract Price
shall not be more than as would be the case for a delay of One Hundred Eighty
(180) days counting from the midnight of the Thirty (30) day after the Delivery Date at the above
specified rate of reduction.

 

 (c)                   However, if the delay in
delivery of the VESSEL should continue for a period of Two Hundred Ten (210)
days from the Delivery Date in Paragraph 1 of Article VII, then in such
event, and after such period has expired, the BUYER may, at its option, rescind
this Contract in accordance with the provisions of Article X hereof.

 

The BUILDER may, at any time after the expiration of
the aforementioned Two Hundred Ten (210) days of delay in delivery, if the
BUYER has not served notice of rescission as provided in Article X hereof,
demand in writing that the BUYER shall make an election, in which case the
BUYER shall, within Twenty (20) days after such demand is received by the
BUYER, notify the BUILDER of its intention either to rescind this Contract or
to consent to the acceptance of the VESSEL at the BUILDER’s specified future
date. If the BUYER shall not make an election within Twenty (20) 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 and
it being understood by the parties hereto that if the VESSEL is not delivered
by such future date, the BUYER shall

 

15

 

have the same right of rescission upon the same
terms and conditions as hereinabove provided.

 

It is understood that accrued liquidated damages are
preserved. Further delay shall incur additional liquidated damages in
accordance with existing terms and conditions.

 

 (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 account all postponements of the Delivery Date by reason of
permissible delay as defined in Article VIII and/or any other reason under
this Contract, is not delivered by the date upon which delivery is required
under the terms of this Contract.

 

2.                          Speed :

 

 (a)                   The Contract Price shall not be affected or changed by reason of the
trial speed (as determined according to the SPECIFICATIONS being less than the
guaranteed speed, if such variation is not more than Two-Tenths (2/10) of One (1) knot.

 

 (b)                  However,
if such variation is more than Two-Tenths (2/10) of One (1) knot, then,
the Contract Price shall be decreased by One Hundred and Seventy Five Thousand
United States Dollars (US$ 175,000.-) for each successive whole One-Tenth(1/10)
of a knot in excess of a deficiency of Two-Tenths (2/10) of a knot (in both
cases smaller fractions being disregarded).

 

 (c)                   If the deficiency in the speed upon final sea trial is more than
Half(1/2) a knot below the guaranteed speed of the VESSEL, then the BUYER may,
at its option, reject the VESSEL and rescind this Contract in accordance with
the provisions of Article X hereof, or may accept the VESSEL at a
reduction in the Contract Price as above provided for Half(1/2) a knot only,
that is, at a total reduction of Five Hundred and Twenty Five Thousand United
States Dollars (US$ 525,000.-).

 

16

 

3.                          Fuel Consumption :

 

 (a)                   The Contract Price shall not be
affected or changed in case the fuel consumption, as determined by the shop
trial as specified in the  SPECIFICATIONS , is not more than Five
percent (5%) in excess of the guaranteed fuel consumption specified in
Paragraph 2 of Article I.

 

 (b)                  However,
in the event that the actual fuel consumption at the shop trial is in excess of
Five percent (5%) of the guaranteed fuel consumption, the Contract Price shall
be reduced by the sum of One Hundred and Ten Thousand United States Dollars
(US$ 110,000.-) for each full one percent(1%) increase in fuel consumption and
pro rata for any fraction of one percent(1%) of the Guaranteed Fuel Consumption
in excess of the said five percent(5%) up to maximum of eight percent(8%) over
the Guaranteed Fuel Consumption.

 

 (c)                   If the deficiency in fuel consumption is more than Eight percent (8%)
then the BUYER may at its option rescind this Contract in accordance with
the provision of Article X hereof.

 

4.                          Deadweight :

 

(a)                      In the event that the deadweight of the
VESSEL as determined in accordance with the SPECIFICATIONS is less than the
guaranteed deadweight as specified in Paragraph 2 of Article I, the
Contract Price shall be reduced by the sum of One Thousand One Hundred United
States Dollars (US$ 1,100.-) for each full metric ton of such deficiency being
more than Seven Hundred (700) metric tons, up to a maximum reduction of One
Million Two Hundred and Ten Thousand United States Dollars (US$ 1,210,000.-).

 

(b)                     In the event of such deficiency in the
deadweight of the VESSEL being One thousand eight hundred (1,800) metric tons
or more, then, the BUYER may, at its option, reject the VESSEL and rescind this
Contract in accordance with the provisions of Article X hereof or accept
the VESSEL at a reduction in the Contract Price as above provided for One Thousand
Eight Hundred (1,800) metric tons only, that is, at a total reduction of One
Million Two Hundred and Ten Thousand United States Dollars (US$1,210,000.-).

 

17

 

5.                          Early Delivery

 

In the event that
the BUILDER believes that the VESSEL can be completed and ready for Delivery on
a date earlier than the Contractual Delivery Date, then the BUILDER may give
a written notice to the BUYER, no later than six (6) months before the
revised date (the “Early Delivery Date”) informing the approximate date on
which the VESSEL can be ready for the Delivery. The BUYER shall have the
option, but not the obligation, to accept Delivery of the VESSEL on the Early
Delivery Date and upon the BUYER’s acceptance thereof, the parties shall
discuss the specific amount of the additional payment due to the BUILDER for
the accelerated Delivery of the VESSEL on the Early Delivery Date at the
delivery stage of the VESSEL and the compensation payment of the acceleration bonus shall be settled and
paid in full with the final delivery instalment concurrently uponwith the
actual Delivery and acceptance of the VESSEL by the BUYER. If the
Parties fail to reach a mutual agreement on the amount of the Early Delivery
bonus, the BUILDER shall be free to deliver the VESSEL on the original
Contractual Delivery Date or earlier at its option. The Parties hereto acknowledge that there
will be no liquidated damages or other penalty to be imposed on the BUILDER in
the event the VESSEL happens to be delivered on any date later than the Early
Delivery Date but earlier than the original Contractual Delivery Date.

 

6                             Effect of Rescission :

 

It is
expressly understood and agreed by the parties that in any case, if the BUYER
rescinds this Contract under this article, the BUYER shall not be entitled to
any liquidated damages or any other recourse unless by means of the provisions
of Article X hereof.

 

(End of Article)

 

18

 

ARTICLE IV - APPROVAL OF PLANS AND DRAWINGS AND INSPECTION
DURING CONSTRUCTION

 

1.                          Approval of Plans and
Drawings :

 

The SPECIFICATIONS   shall be used for the VESSEL without any
further approval and modification from the BUYER unless otherwise mutually
agreed by both parties. Should any changes are required by the BUYER’s request
or the application of new rules and regulations (of a mandatory nature)
coming into effect after the date of this Contract signing, the BUILDER shall
submit such changes to the BUYER for its approval. If approved by the BUYER,
such changes shall be applied to the VESSEL with cost adjustment in accordance
with Article V of this Contract.

 

2.                          Appointment of BUYER’s
Supervisor :

 

The BUYER may send to and maintain at the
Shipyard, at the BUYER’s own cost and expense, one supervisor who shall be duly
authorized in writing by the BUYER (herein called the “Supervisor”) to act on
behalf of the BUYER in connection with the modifications of the SPECIFICATIONS,
adjustments of the Contract Price and Delivery Date, approval of the plans and
drawings, attendance to the tests and inspections relating to the VESSEL, its
machinery, equipment and outfittings, and any other matters for which he is
specifically authorized by the BUYER. The Supervisor may appoint his
assistant(s) to attend at the Shipyard for the purposes as aforesaid.

 

In the event that
assignment, novation or resale occurs under the Article XIII and as a
result, BUYER’s Supervisor is changed during the construction of the VESSEL,
any and all matters determined by mutual agreement between the BUYER’s
Supervisor and the BUILDER prior to the dispatch of a new Supervisor shall be
accepted and complied by the new Supervisor. In case two or more Supervisors
are dispatched to the Shipyard and authorized, under the BUILDER’s prior
consent, to perform the supervision, each of them will form uniform opinions
between them to keep the design and the SPECIFICATIONS so as not to adversely
affect the CONTRACT PRICE and Delivery of the VESSEL, provided that such change
in the Contract Price will be reasonable and proven under the BUILDER’s normal
practice. In the event of any additional costs attributable to such dispatch of
two or more supervisors due to the reasons including but not

 

19

 

limited to resale, novation,
charter or any other occurrence otherwise resulting from the BUYER, such costs
shall be borne by the BUYER and the BUYER shall reimburse and hold harmless the
BUILDER from any such costs and expenses.

 

3.                          Inspection by the Supervisor
:

 

The necessary inspections of the VESSEL, its
machinery, equipment and outfittings shall be carried out by the Classification
Society, other regulatory bodies and/or an inspection team of the BUILDER
throughout the entire period of construction in order to ensure that the
construction of the VESSEL is duly performed in accordance with this Contract
and the SPECIFICATIONS The Supervisor shall have, during construction of the
VESSEL, the right to attend such tests and inspections of the VESSEL, its
machinery and equipment within the premises of either the BUILDER or its
subcontractors. The BUILDER shall give notice to the Supervisor, in advance of
the date and place of such tests and inspections for the convenience of their
attendance. Detailed procedures of the inspection and the tests thereof shall
be in accordance with the SPECIFICATIONS .

 

The BUILDER may request
BUYER’s supervisor to attend the inspection and tests during public holidays
and weekends and/or Company holidays in order to keep BUILDER’s construction
schedule. BUYER’s supervisor shall fully cooperate with BUILDER and promptly
attend such inspection/tests including those for surface preparation and
painting work, which are especially vulnerable to weather condition and time
interval. However, BUILDER shall keep such inspection and tests to a minimum
and only when the inspection and tests affect BUILDER’s construction schedule.
The BUILDER’s prior notice of such inspection/test schedule shall be
informed to the BUYER’s supervisor three(3) working days in advance as a
minimum

 

The Supervisor shall be entitled to request
copies of all test results and trials as soon as required for the performance
of his duties.

 

The Supervisor shall notify the BUILDER of
deficiencies in the construction of the VESSEL or materials. The BUILDER should
examine the deficiency and rectify.

 

If any of the BUYER’s supervisors
discover any construction, material or

 

20

 

workmanship which is not deemed to conform to
the requirements of this Contract and/or the SPECIFICATIONS , the BUYER’s
supervisors shall promptly give the BUILDER a notice in writing that such
alleged non-conformity exists. Upon receipt of such notice from the BUYER’s
supervisor, the BUILDER shall correct such non-conformity, if the BUILDER
agrees to his view. Any disagreement shall be resolved in accordance with
Paragraph 1 of Article XII.

 

4.                          Facilities :

 

The BUILDER shall furnish the Supervisor and
his assistant(s) with adequate office space and such other reasonable
facilities according to the BUILDER’s practice at or in the immediate vicinity
of the Shipyard as may be necessary to enable them to effectively carry
out their duties. The BUYER shall pay for all such facilities other than office
space at the BUILDER’s normal rate of charge.

 

5.                          Liability of BUILDER :

 

The Supervisor and his assistant(s) shall at
all times be deemed to be the employees of the BUYER and not of the BUILDER.
The BUILDER shall be under no liability whatsoever to the BUYER, the Supervisor
or his assistant(s) for personal injuries, including death, suffered during the
time when he or they are on the VESSEL, or within the premises of either the
BUILDER or its subcontractors, or are otherwise engaged in and about the
construction of the VESSEL, unless, however, such personal injuries, including
death, were caused by a gross negligence of the BUILDER, or of any of its
employees or agents or subcontractors.

 

Nor shall the BUILDER be
under any liability whatsoever to the BUYER, the Supervisor or his assistant(s)
for damage to, or loss or destruction of property in Korea of the BUYER or of
the Supervisor or his assistant(s), unless such damage, loss or destruction
were caused by a gross negligence of the BUILDER or of any of its employees or
agents or subcontractors.

 

21

 

6.                          Responsibility of BUYER :

 

The BUYER shall undertake and assure that the
Supervisor shall carry out his duties hereunder in accordance with the normal
shipbuilding practice of the BUILDER and in such a way so 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 the Supervisor who is 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 if necessary,
and if the BUYER considers that such BUILDER’s request is justified, the BUYER
shall effect such replacement as soon as conveniently arrangeable.

 

(End
of Article)

 

22

 

ARTICLE V - MODIFICATIONS,
CHANGES AND EXTRAS

 

1.                          How Effected :

 

Any
modifications and/or changes in the SPECIFICATIONS shall be made by written
agreement of the parties hereto provided, however, that any modifications
and/or changes requested by the BUYER or an accumulation of such modifications
and/or changes will not adversely affect the BUILDER’s planning or programme in
relation to the BUILDER’s other commitments and if the BUYER shall assent to
adjustment of the Contract Price, time for delivery of the VESSEL and other
terms and conditions of this Contract as hereinafter provided. The BUILDER
hereby agrees to exert its best efforts to accommodate such reasonable request
by the BUYER so that the said changes and/or modifications may be made at
a reasonable cost and within the shortest period of time which is reasonably
possible.

 

Any such agreement for modifications and/or
changes shall include an agreement as to the increase or decrease, if any, in
the Contract Price of the VESSEL together with an agreement as to any extension
or reduction in the time of delivery, or any other alterations in this Contract
or the SPECIFICATIONS occasioned by such modifications and/or changes.

 

The aforementioned agreement to modify and/or change
the SPECIFICATIONS may be effected by an exchange of letters signed by the
authorized representatives of the parties hereto, or telefax confirmed in
writing, manifesting such agreement. Such letters and confirmed message
exchanged by the parties hereto pursuant to the foregoing shall constitute an
amendment of the SPECIFICATIONS , and such letters and message shall be
incorporated into this Contract and made a part hereof.

 

The BUILDER
may make minor changes to the SPECIFICATIONS , if found necessary for
introduction of improved production methods or otherwise, provided that the
BUILDER shall first obtain the BUYER’s approval which shall not be unreasonably
withheld.

 

23

 

2.              Changes in Rules of
Classification Society, Regulations, etc.:

 

If, after the date of signing this Contract, any
requirements as to classification, or as to the rules and regulations to
which the construction of the VESSEL is required to conform in accordance
with the provisions of Article I. (3), are altered or changed by the Classification
Society or regulatory bodies authorized to make such alterations or changes,
either of the parties hereto upon receipt of information thereof, shall
transmit such information in full to the other party in writing, thereupon
within Twenty-one(21) days after receipt of the said notice from the other
party, the BUYER shall instruct the BUILDER in writing if such alterations or
changes shall be made in the VESSEL or not, in the BUYER’s sole discretion.

 

(a)          If
such alterations or changes are compulsory for the construction of VESSEL,
either of the parties hereto, upon receipt of such information from
Classification Society or such other regulatory bodies, shall promptly transmit
the same to the other in writing, and the BUILDER shall thereupon incorporate
such alterations or changes into the construction of the VESSEL, provided that
the BUYER shall first agree to reasonable and proven adjustments required by
the BUILDER in the Contract Price, the Delivery Date and other terms and
conditions of this Contract and the SPECIFICATIONS occasioned by or resulting
from such alterations or changes.

 

(b)   If such
alterations or changes are not compulsory for the construction of the VESSEL,
and the BUYER desires to incorporate such alterations or changes into the
construction of the VESSEL, then, the BUYER shall notify the BUILDER of such
intention. The BUILDER may accept such alterations or changes, provided
that such alterations or changes will not, in the judgement of the BUILDER,
adversely affect the BUILDER’s planning or program in relation to the BUILDER’s
other commitments, and provided, further, that the BUYER shall first agree to
reasonable and proven adjustments required by the BUILDER in the Contract
Price, the Delivery Date and other terms and conditions of this Contract and
the SPECIFICATIONS occasioned by or resulting from such alterations or changes.

 

In
the event of a disagreement on price and delivery, and in the event that such
alterations or changes are compulsory for the construction of VESSEL, then the BUILDER shall proceed
with the required alterations and the dispute related to the above shall be
resolved in accordance with the provisions of Article XII.

 

24

 

Such agreement by the BUYER shall be effected in the
same manner as provided in Paragraph 1 of this Article for modifications
and/or changes of the SPECIFICATIONS .

 

3.                          Substitution of Materials :

 

In the event that any of the
materials required by the SPECIFICATIONS or otherwise under this Contract for
the construction of the VESSEL can not be procured in time to effect delivery
of the VESSEL, or are in short supply, the BUILDER may, provided the BUYER so
agrees in writing, supply other materials and equipment of the best available
and like quality, capable of meeting the requirements of the Classification
Society and of the rules, regulations, requirements and recommendations with
which the construction of the VESSEL must comply. Any agreement as to such
substitution of materials shall be effected in the manner as provided in
Paragraph 1 of this Article, and shall, likewise, include possible decrease or
increase in the Contract Price and other terms and conditions of this Contract
affected by such substitution.

 

(End of Article)

 

25

 

ARTICLE VI - TRIALS AND ACCEPTANCE

 

Since
the VESSEL is the repeat and series of BUILDER’s Hull Nos. 1639 and 1640,
some sea trial items may be deleted subject to mutual agreement between
the BUYER and the BUILDER

 

1.                          Notice :

 

The sea trial shall start
when the VESSEL is reasonably completed according to the SPECIFICATIONS .

 

The BUILDER shall give the BUYER at least Twenty
(20) days estimated prior notice and Seven(7) days confirming prior notice
by telefax of the time and place of the trial run of the VESSEL, and the BUYER
shall promptly acknowledge receipt of such notice. The BUYER shall have its
representatives on board the VESSEL to witness such trial run. Failure in
attendance of the BUYER’s representative at the trial run of the VESSEL for any
reason whatsoever after due notice to the BUYER as above provided shall be
deemed to be a waiver by the BUYER of its right to have its representative on
board the VESSEL at the trial run, and the BUILDER may conduct the trial
run without attendance of the BUYER’s representative, and in such case the
BUYER shall be obligated to accept the VESSEL on the basis of a certificate of
the BUILDER that the VESSEL, upon trial run, is found to conform to this
Contract and the SPECIFICATIONS s.

 

2.                          Weather Condition :

 

The trial run shall be
carried out under the weather condition which is deemed favourable enough by
the judgement of the BUILDER. In the event of unfavourable weather on the date
specified for the trial run, the same shall take place on the first available
day thereafter that the weather condition permits. It is agreed that, if during
the trial run of the VESSEL, the weather should suddenly become so unfavourable
that orderly conduct of the trial run can no longer be continued, the trial run
shall be discontinued and postponed until the first favourable day next
following, unless the BUYER shall assent in writing to acceptance of the VESSEL
on the basis of the trial run already made before such discontinuance has
occurred. Any delay of trial run caused by such unfavourable weather condition
shall operate to postpone the Delivery Date by the period of the delay involved
and such delay shall be deemed as permissible delay in the delivery of the
VESSEL.

 

26

 

3.                    How Conducted :

 

 (a)                   The VESSEL shall run the official trial trip in the manner as specified
in the SPECIFICATIONS .

 

 (b)               All expenses in connection
with the trial run are to be for account of the BUILDER and the BUILDER shall
provide, at its own expense, the necessary crew to comply with conditions of
safe navigation, fuel oil, fresh water and other consumable stores necessary,
the BUYER shall supply at its own expense lubricating oils and greases.

 

4.                          Method of Acceptance or
Rejection :

 

 (a)                   Upon completion of the trial run, the BUILDER shall give the BUYER a
notice by telefax of completion of the trial run, as and if the BUILDER
considers that the results of trial run indicate conformity of the VESSEL to
this Contract and the SPECIFICATIONS . The BUYER shall, within Five (5)days
after receipt of such notice from the BUILDER, notify the BUILDER by telefax of
its acceptance or rejection of the VESSEL’s conformity to this Contract and the
SPECIFICATIONS .

 

 (b)                  However,
should the result of the trial run show that the VESSEL, or any part or
equipment thereof, does not conform to the requirements of this Contract
and/or the SPECIFICATIONS , or if the BUILDER is in agreement to non-conformity
as specified in the BUYER’s notice of rejection, then, the BUILDER shall take
necessary steps to correct such non-conformity.

 

Upon completion of correction of such
non-conformity, and re-test or trial if necessary, the BUILDER shall give the
BUYER a notice thereof by telefax.

 

The BUYER shall, within Three (3) days
after receipt of such notice from the BUILDER, notify the BUILDER of its
acceptance or rejection of the VESSEL.

 

(c)              In any event that the BUYER rejects the
VESSEL, the BUYER shall indicate in detail in its notice of rejection in what
respect the VESSEL, or any part or equipment thereof does not conform to
this Contract and/or the SPECIFICATIONS .

 

27

 

 (d)                  In the event that the BUYER fails to notify
the BUILDER by telefax of the acceptance of or the rejection together with the
reason therefor of the VESSEL within the period as provided in the above
Sub-paragraph (a) or (b), the BUYER shall be deemed to have accepted the
VESSEL.

 

 (e)                   Any dispute between the BUILDER and the BUYER as to the conformity or
non-conformity of the VESSEL to the requirements of this Contract and/or the SPECIFICATIONS
shall be submitted for final decision in accordance with Article XII
hereof.

 

5.                          Effect of Acceptance :

 

Acceptance
of the VESSEL as above provided shall be final and binding so far as conformity
of the VESSEL to this Contract and the SPECIFICATIONS is concerned and shall
preclude the BUYER from refusing formal delivery of the VESSEL as hereinafter
provided, if the BUILDER complies with all other procedural requirements for
delivery as provided in Article VII hereof. However, the BUYER’s
acceptance of the VESSEL shall not affect the BUYER’s right under Article IX
hereof.

 

The BUYER may accept
the VESSEL under protest with outstanding defects to be dealt under the
guarantee provisions or made subject of a claim for damages.

 

6.                          Disposition of Surplus
Consumable Stores

 

Any fuel
oil or other 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 purchase price for
such supply in Korea and the 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 an amount for the
consumed quantity until delivery of any lubricating oil and greases which were
furnished and paid for by the BUYER at the BUYER’s purchase price thereof. For
avoidance of doubt, the practice of this Article VI. 6 shall follow the
practice in construction of the BUILDER’s Hull Nos. 1639 and 1640.

 

(End of Article)

 

28

 

ARTICLE VII
- DELIVERY

 

1.                          Time and Place :

 

The VESSEL
shall be delivered by the BUILDER to the BUYER at the Shipyard on or before July 31,
2008, except that, in the event of delays in the construction of the VESSEL or
any performance required under this Contract due to causes which under the
terms of this Contract permit postponement of the date for delivery, the
aforementioned date for delivery of the VESSEL shall be postponed accordingly.

 

The
aforementioned date, or such later date to which the requirement of delivery is
postponed pursuant to such terms, is herein called the “Delivery Date”.

 

2.                          When and How Effected :

 

Provided that the BUILDER and the BUYER shall have
fulfilled all of their obligations stipulated under this Contract, the delivery
of the VESSEL shall be effected forthwith by the concurrent delivery by each of
the parties hereto to the other of the PROTOCOL OF DELIVERY AND ACCEPTANCE,
acknowledging delivery of the VESSEL by the BUILDER and acceptance thereof by
the BUYER.

 

3.                          Documents to be delivered to
BUYER :

 

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

 

 (a)                   PROTOCOL OF TRIALS of the VESSEL made pursuant to the SPECIFICATIONS .

 

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

 

 (c)                   PROTOCOL OF STORES OF CONSUMABLE NATURE referred to under Paragraph 6
of Article VI hereof.

 

29

 

 (d)                  ALL
CERTIFICATES including the BUILDERS’s CERTIFICATE required to be furnished upon
delivery of the VESSEL pursuant to this Contract and the SPECIFICATIONS ,
necessary for the registration of the VESSEL and BUYER’s trading requirements.

 

It is
agreed that if, through no fault on the part of the BUILDER, the
Classifications certificates and/or other certificates are not available at the
time of delivery of the VESSEL, provisional certificates shall be accepted by
the BUYER, provided that the BUILDER shall furnish the BUYER with the formal
certificates as promptly as possible after such certificates have been issued.

 

Application
and certificate for statutory inspections for the registry of the VESSEL shall
be arranged by the BUYER at its expense.

 

 (e)                   DECLARATION OF WARRANTY of the BUILDER that the VESSEL is delivered to
the BUYER free and clear of any liens, charges, claims, mortgages, or other
encumbrances upon the BUYER’s title thereto, and in particular that the VESSEL
is absolutely free of all burdens in the nature of imposts, taxes or charges
imposed by Korean Governmental Authorities, as well as of all liabilities of
the BUILDER to its subcontractors, employees and crew, and of the liabilities
arising from the operation of the VESSEL in trial runs, or otherwise, prior to
delivery.

 

 (f)                     DRAWING AND PLANS pertaining to the VESSEL as stipulated in the      SPECIFICATIONS .

 

 (g)                  COMMERCIAL
INVOICE.

 

4.                          Tender of VESSEL :

 

If
the BUYER fails to take delivery of the VESSEL after completion thereof
according to this Contract and the SPECIFICATIONS without any justifiable
reason, the BUILDER shall have the right to tender delivery of the VESSEL after
compliance with all procedural requirements as above provided.

 

30

 

5.                          Title and
Risk :

 

Title to
and risk of loss of the VESSEL shall pass to the BUYER only upon the delivery
and acceptance thereof having been completed as stated above; it being
expressly understood that, until such delivery is effected, title to and risk
of loss of the VESSEL and her equipment shall be in the BUILDER.

 

6.                          Removal of VESSEL :

 

The BUYER
shall take possession of the VESSEL immediately upon delivery and acceptance
thereof and shall remove the VESSEL from the premises of the Shipyard within
Three (3) days after delivery and acceptance thereof is effected.

 

If the BUYER shall not remove the VESSEL from the
premises of the Shipyard within the aforesaid Three (3) days, in such
event, the BUYER shall pay to the BUILDER the reasonable mooring charges of the
VESSEL.

 

(End of Article)

 

31

 

ARTICLE VIII - DELAYS AND EXTENSION OF TIME FOR
DELIVERY

(FORCE MAJEURE)

 

1.                          Causes of Delay (Force
Majeure) :

 

If, at any
time 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, national
strikes, sabotage, Acts of God or the public enemy, plague or other epidemics,
quarantines, prolonged failure of electric current, freight embargoes, or
defects in major forgings or castings or delay in BUYER’s supplied articles, if
any, 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 by
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 other causes 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, 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 delays.

 

The
enumerated contingencies shall not give rise to an extension of the delivery
date unless :

 

i)                             The occurrence could not reasonably have been foreseen by the
BUILDER at the date of signing of the Contract.

 

ii)                          The BUILDER shall have exercised reasonable
due diligence to avoid or minimize the occurrence of such event.

 

iii)                       The BUILDER
shall have used reasonable efforts to mitigate the duration and effects of such
events of the construction schedule.

 

32

 

2.                          Notice of Delay :

 

Within
Fourteen (14) days after the date of occurrence of any cause of delay, on
account of which the BUILDER claims that it is entitled under this Contract to
a postponement of the Delivery Date, the BUILDER shall notify the BUYER in
writing or by telefax confirmed in writing of the date when such cause of delay
occurred. Likewise, within Fourteen (14) days
after the date of ending of such cause of delay, the BUILDER shall notify the
BUYER in writing or by telefax confirmed in writing of the date when such cause
of delay ended.

 

The BUILDER shall also notify the BUYER of the
period, by which the Delivery Date is postponed by reason of such cause of
delay, with all reasonable dispatch after it has been determined. If the BUILDER
does not give the timely advice as above, the BUILDER shall lose the right to
claim such delays as permissible delay.

 

Failure of the BUYER to acknowledge to the BUILDER’s
claim for postponement of the Delivery Date within Fourteen (14)  days after receipt by the BUYER of such
notice of claim shall be deemed to be a waiver by the BUYER of its right to
object to such postponement of the Delivery Date.

 

3.                          Definition of Permissible
Delay :

 

Delays on
account of such causes as specified in Paragraph 1 of this Article and any
other delay of a nature which under the terms of this Contract permits
postponement of the Delivery Date shall be understood to be permissible delays
and are to be distinguished from unauthorized delays on account of which the
Contract Price is subject to adjustment as provided for in Article III
hereof.

 

4.                          Right to Rescind for
Excessive Delay :

 

If the
total accumulated time of all delays whether permissible or not exceeds One
Hundred and Eighty (180) days, then, in such event, the BUYER may rescind
this Contract in accordance with the provisions of Article X hereof.

 

The
accumulated time as above shall exclude the time lost due to BUYER’s Default or
delays in the BUYER’s supplies. The BUILDER may, at any time after the
accumulated time of the aforementioned delays justifying rescission by the
BUYER, demand in writing that the BUYER shall make an election proposing a new
delivery date, in which case the BUYER shall, within Fourteen (14) days

 

33

 

after
such demand is received by the BUYER, either notify the BUILDER of its
intention to rescind this Contract, or consent to a postponement of the
Delivery Date to an agreed specific future date; it being understood and agreed
by the parties hereto that, if any further delay occurs on account of causes
justifying rescission as specified in this Article, the BUYER shall have the
same right of rescission upon the same terms as herein above provided.

 

(End
of Article) 

 

34

 

ARTICLE IX
- WARRANTY OF QUALITY

 

1.                          Guarantee :

 

The
BUILDER, for the period of Twelve (12) months after delivery of the VESSEL
(hereinafter called “Guarantee Period”), guarantees the VESSEL and her engine,
including all parts and equipment manufactured, furnished or installed by the
BUILDER under this Contract, and including the machinery, equipment and
appurtenances thereof, under the Contract but excluding any item which is
supplied or designated by the BUYER or by any other bodies on behalf of the
BUYER, against all defects discovered within the Guarantee Period which are due
to improper design, defective material, and/or poor workmanship or negligent or
other improper acts or omissions on the part of the BUILDER or its
subcontractors (hereinafter called the “Defect” or “Defects”) and are not a
result of accident, ordinary wear and tear, misuse, mismanagement, negligent or
other improper acts or omissions or neglect on the part of the BUYER, its
employee or agents.

 

Upon
rectification of an item claimed under this guarantee, this item shall be
covered for further Twelve (12) months under the same terms and conditions.
However, this is limited to a maximum of Twenty Four (24) months from delivery
date.

 

2.                          Notice of Defects :

 

The BUYER
shall notify the BUILDER in writing, or by telefax of any defect for which
claim is made under this guarantee, as promptly as possible after discovery
thereof. The BUYER’s notice shall describe in detail the nature, cause if known
and extent of the Defects.

 

The BUILDER
shall have no obligation for any Defect discovered prior to the expiry date of
the Guarantee Period, unless notice of such Defect is received by the BUILDER
not later than Twenty (20) days after such expiry date.

 

3.                          Remedy of Defects :

 

(a)                      The BUILDER
shall remedy, at its expense, any Defect against which the VESSEL is guaranteed
under this Article, by making all necessary repairs or replacements at the
Shipyard.

 

35

 

(b)                     However, if the BUYER should
determine that it is commercially or operationally impracticable to bring the
VESSEL to the Shipyard, the BUYER may cause the necessary repairs or
replacements to be made elsewhere which is deemed suitable for the purpose,
provided that, in such event, the BUILDER may forward or supply
replacement parts or materials to the
BUYER’s agent to be designated by the BUYER in writing, unless
forwarding or supplying thereof the VESSEL would impair or delay the operation
of working schedule of the VESSEL. In the event that the BUYER proposes to
cause the necessary repairs or replacements for the VESSEL to be made at any
other shipyard or works than the Shipyard, the BUYER shall first, but in all
events as soon as possible, give the BUILDER a notice in writing or by telefax
confirmed in writing of the time and place when and where 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) the nature, cause and extent of the Defects complained of.
The BUILDER shall, in such case, promptly advise the BUYER by telefax, 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 for such repairs or replacements justified reasonable and proven actual
cost of repairs or replacements.

 

(c)                      The
reimbursement of the costs incurred in relation to guarantee works shall be
paid in a lumpsum after expiration of the guarantee period.

 

(d)                     In
any case, the VESSEL shall be taken, at the BUYER’s cost and responsibility, to
the place elected, ready in all respects for such repairs or replacement.

 

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

 

36

 

4.                          Extent of BUILDER’s
Responsibility :

 

 (a)                   The BUILDER shall have no responsibility or liability for any other
defect whatsoever in the VESSEL than the Defects specified in Paragraph 1 of
this Article. Nor the BUILDER shall in any circumstance be responsible or
liable for any consequential or special loss, damage or expense including but
not limited to loss of time, loss of profit of earning or demurrage directly or
indirectly occasioned to the BUYER by reason of the Defects specified in
Paragraph 1 of this Article or due to repairs or other works done to the
VESSEL to remedy such Defects.

 

 (b)                  The
BUILDER shall not be responsible for any defect in any part of the VESSEL
which may, subsequently to delivery of the VESSEL, have been replaced or
repaired in any way by any other contractor unless the BUILDER has not objected
the contractor to perform guarantee repairs, or for any defect which have
been caused or aggravated by omission or improper use and maintenance of the VESSEL
on the part of the BUYER, its servants or agents or by ordinary wear and
tear or by any other cause beyond the control of the BUILDER.

 

 (c)                   The guarantee contained as hereinabove in this Article replaces
and excludes any other liability, guarantee, warranty and/or condition imposed
or implied by the law, customary, statutory or otherwise, by reason of the
construction and sale of the VESSEL by the BUILDER for and to the BUYER.

 

5.                          Guarantee Engineer :

 

The BUILDER
shall have the right to appoint a Guarantee Engineer to serve on the VESSEL as
its representative for a period of Three (3) months from the date the
VESSEL is delivered. However, if the BUYER and the BUILDER shall deem it
necessary to keep the Guarantee Engineer on the VESSEL for a longer period,
then he shall remain on board the VESSEL after the said Three (3) months,
but not longer than Six (6) months from the delivery of the VESSEL.

 

The BUYER, and its
employees, shall give such Guarantee Engineer full cooperation in carrying out
his duties as the representative of the BUILDER on board the VESSEL.

 

The Guarantee Engineer shall
sign BUYER’s Indemnity Forms and shall at all times deemed to be an employee of
the BUILDER.

 

The BUYER shall accord the
Guarantee Engineer treatment comparable to the

 

37

 

VESSEL’s Chief Engineer, and
shall provide board and lodging at no cost to the BUILDER and/or the Guarantee
Engineer.

 

While the Guarantee Engineer is on board the VESSEL,
the BUYER shall pay to the BUILDER the sum of Seven Thousand United States
Dollars (US$ 7,000.-) per month as a compensation for a part of cost and
charges to be borne by the BUILDER in connection with Guarantee Engineer and
also shall pay the expenses of his repatriation to Seoul, Korea by air upon
termination of his service, the expenses of his communication with the BUILDER
incurred in performing his duties and expenses, if any, of his medical and
hospital care in the VESSEL’s hospital.

 

Pertaining to the detailed particulars of this
Paragraph, an agreement will be made according to this effect between the
parties hereto upon delivery of the VESSEL.

 

(End of Article)

 

38

 

ARTICLE X - RESCISSION BY
BUYER

 

1.                          Notice :

 

The
payments made by the BUYER prior to delivery of the VESSEL shall be in the
nature of advances to the BUILDER, and in the event that the VESSEL after sea
trial is rejected by the BUYER or the VESSEL is cancelled by the BUYER in
accordance with the terms of this Contract under and pursuant to any of the
provisions of this Contract specifically permitting the BUYER to do so and in
the event that the Contract is rescinded by the BUYER under and pursuant to any
of the provisions of this Contract specially permitting the BUYER, then the
BUYER shall notify the BUILDER in writing or by telefax confirmed in writing,
and such rescission shall be effective as of the date when notice thereof is
received by the BUILDER.

 

2.                          Refundment by BUILDER :

 

In case the
BUILDER receives the notice stipulated in Paragraph 1 of this Article, the
BUILDER shall promptly refund to the BUYER the full amount of all sums paid by
the BUYER to the BUILDER on account of the VESSEL together with the interest
thereon, unless the BUILDER proceeds to the arbitration under the provisions of
Article XII hereof.

 

In such
event, the BUILDER shall pay the BUYER interest at the rate of Six percent
(6.0%)per annum on the amount required herein to be refunded to the BUYER,
computed from the dates following on which such sums were paid by the BUYER to
the BUILDER to the date of remittance by transfer of such refund to the BUYER
by the BUILDER.

 

As security for refund of
instalments prior to delivery of the VESSEL, the BUILDER shall furnish the
BUYER within Fourteen (14) calendar days after the Contract signing with a
letter of guarantee covering the amount of such pre-delivery instalments in
favour of the BUYER. Such letter of guarantee shall have substantially the same
form and substance as Exhibit ”A” annexed hereto.

 

39

 

3.                          Discharge of Obligations :

 

Upon such
refund by the BUILDER to the BUYER, all obligations, duties and liabilities of
each of the parties hereto to the other under this Contract shall be forthwith
completely discharged.

 

(End
of Article)

 

40

 

ARTICLE XI
- BUYER’S DEFAULT

 

1.                          Definition of Default :

 

The BUYER shall be deemed to be in default of its
performance of obligations under this Contract in the following cases :

 

(a)                      If the first, second, third, fourth or fifth
instalment are not paid by the BUYER to the BUILDER within Five (5) banking
days after such instalment becomes due and payable as provided in Article II
hereof;

 

or

 

(b)                     If the Delivery instalment is not paid by the
BUYER to the BUILDER concurrently with the delivery of the VESSEL as provided
in Article II hereof;

 

or

 

(c)                      If the BUYER, when the VESSEL is duly
tendered for delivery by the BUILDER:

 

i)                           fails to take delivery of the VESSEL within Five
(5) banking days from tendered date

 

ii)                          having initiated the arbitration procedure
the BUYER does not accept delivery within Seven (7) days of an arbitration
award which is not appealed.

 

2.                          Effect of Default on or
before Delivery of VESSEL :

 

 (a)                   Should the BUYER make default in payment of any instalment of the
Contract Price on or before delivery of the VESSEL, the BUYER shall pay the
instalment(s) in default plus accrued interest thereon at the rate of Six
percent (6.0%) per annum computed from the due date of such instalment to the
date when the BUILDER receives the payment, and, for the purpose of Paragraph 1
of Article VII hereof the Delivery Date of the VESSEL shall be
automatically extended by the period of continuance of such default by the BUYER.
In any event of default by the BUYER, the BUYER shall also pay direct charges
and expenses incurred by the BUILDER in consequence of such default after
mutual agreement.

 

 (b)               If any default by
the BUYER continues for a period of Ten (10) days after the BUILDER’s
notification, the BUILDER may, at its option, rescind this Contract by giving
notice of such effect to the BUYER by telefax confirmed in writing.

 

41

 

Upon dispatch by the BUILDER
of such notice of rescission, this Contract shall be forthwith rescinded and
terminated. In the event of such rescission of this Contract, the BUILDER shall
be entitled to retain any instalment or instalments already paid by the BUYER
to the BUILDER on account of this Contract and the BUYER’s Supplies, if any.

 

3.                          Disposal of VESSEL :

 

 (a)                   In the event that this Contract is rescinded by the BUILDER under the
provisions of Paragraph 2(b) of this Article, the BUILDER may, at its sole
discretion, either complete the VESSEL and sell the same, or sell the VESSEL in
its incomplete state, free of any right or claim of the BUYER. Such sale of the
VESSEL by the BUILDER shall be either by public auction or private contract at
the BUILDER’s sole discretion and on such terms and conditions as the BUILDER
shall deem fit.

 

 (b)                  In
the event of such sale of the VESSEL, the amount of the sale received by the
BUILDER shall be applied firstly to all expenses attending such sale or
otherwise incurred by the BUILDER as a result of the BUYER’s default, secondly
to the payment of all costs and expenses of construction of the VESSEL incurred
by the BUILDER less BUYER’s Supplies and the instalments already paid by the
BUYER and the compensation to the BUILDER for a reasonable loss of profit due
to rescission of this Contract, and finally to the repayment to the BUYER
without interest, if any balance is obtained.

 

 (c)                   If the
proceeds of sale are insufficient to pay such total costs and loss of profit as
aforesaid, the BUYER shall promptly pay the deficiency to the BUILDER upon
request.

 

(End
of Article)

 

42

 

ARTICLE XII - ARBITRATION

 

1.                          Decision by the Classification Society :

 

If any
dispute arises between the parties hereto in regard to the design and/or
construction of the VESSEL, its machinery and equipment, and/or in respect of
the materials and/or workmanship thereof and/or thereon, and/or in respect of
interpretations of this Contract or the SPECIFICATIONS , the parties may by
mutual agreement refer the dispute to the Classification Society or to such
other expert as may be mutually agreed between the parties hereto, and
whose decision shall be final, conclusive and binding upon the parties hereto.

 

2.                          Proceedings of Arbitration :

 

In the event that the parties hereto do not agree to
settle a dispute according to Paragraph 1 of this Article and/or in the
event of any other dispute of any kind whatsoever between the parties and
relating to this Contract or its rescission or any stipulation herein, such
dispute shall be submitted to arbitration in London. Each party shall appoint
an arbitrator and in the event that they cannot agree, the two arbitrators so
appointed shall appoint an Umpire.

 

If the two arbitrators are unable to agree upon an
Umpire within Twenty(20) days after appointment of the second arbitrator,
either of the said two arbitrators may apply to the President for the time
being of the London Maritime Arbitrators Association to appoint the third
arbitrator, and the three arbitrators shall constitute the board of
arbitration.

 

Such arbitration shall be in accordance with and
subject to the provisions of the English Arbitration Act 1996 or any statutory
modification or re-enactment thereof for the time being in force.

 

The Arbitration shall be conducted in accordance
with the rules in force of the London Maritime Arbitrators Association.

 

Either party may demand arbitration of any such
dispute by giving notice to the other party. Any demand for arbitration by
either of the parties hereto shall state the name of the arbitrator appointed
by such party and shall also state specifically the question or questions as to
which such party is demanding arbitration.

 

43

 

Within Fourteen(14) days after receipt of notice of
such demand for arbitration, the other party shall in turn appoint a second
arbitrator and give notice in writing of such appointment to the party
demanding arbitration. If a party fails to appoint an arbitrator as
aforementioned within Fourteen(14) days following receipt of notice of demand
for arbitration by the other party, the party failing to appoint an arbitrator
shall be deemed to have accepted and appointed, as its own arbitrator, the
arbitrator appointed by the party demanding arbitration and the arbitration
shall proceed before this sole arbitrator who alone in such event shall
constitute the Arbitration Board.

 

The award of the arbitrators and/or Umpire shall be
final and binding on both   parties.

 

3.                          Notice of Award :

 

The award
shall immediately be given to the BUYER and the BUILDER by telefax.

 

4.                          Expenses :

 

The
Arbitration Board shall determine which party shall bear the expenses of the
arbitration or the portion of such expenses which each party shall bear.

 

5.                          Entry in Court :

 

In case of
failure by either party to respect the award of the arbitration, the judgement may be
entered in any proper court having jurisdiction thereof.

 

6.                          Alteration of Delivery Date :

 

In the
event of reference to arbitration of any dispute arising out of matters
occurring prior to delivery of the VESSEL, the award may include any
postponement of the Delivery Date which the Arbitration Board may deem
appropriate.

 

(End of Article)

 

44

 

ARTICLE XIII - SUCCESSOR AND ASSIGNS

 

Neither
of the parties hereto shall assign this Contract to any other individual or
company save as provided hereto. unless prior consent of the other party is
given in writing. Should circumstances permit with or without alteration of the
terms and conditions of this Contract, such consent shall not be unreasonably
withheld by either party.

 

The
BUYER is hereby allowed to assign the Contract for the purposes of financing.

 

The BUYER is further allowed to
nominate a company controlled by the BUYER to take over the Contract.

 

The BUILDER shall fully cooperate
in case the BUYER requests UK Tax lease financing arrangements.

 

In
the event of any assignment pursuant to the terms of this Contract, the
assignee shall succeed to all of the rights and obligations of the assignor
under this Contract and the assignor shall remain responsible for the
fulfillment of this Contract.

 

In
the event of the assignment from the BUYER to any other individual or company
the BUILDER shall be entitled to request a Performance Guarantee from the BUYER
having same form and contents as Exhibit ”C” annexed hereto.

 

The
BUYER and the BUILDER understand and acknowledge that the VESSEL shall be built
and constructed as a repeat and series vessel of the BUILDER’s Hull Nos. 1639
and 1640 as stipulated in this Contract. Thus, in the event
of a resale, assignment and novation of the VESSEL, any and all matters determined by mutual
agreement between the BUYER and the BUILDER prior to the resale, assignment and
novation of the VESSEL shall be accepted and complied by the New BUYER (i.e.,
assignee). If the New BUYER or
its supervisor makes unreasonable requests that may have a significant
impact on the delivery schedule of the VESSEL and/or costs of construction
(including, without limitation to, request for fundamental change of ship type
or excessive revision of design specifications, etc.), the BUILDER shall be
entitled to refuse these requests. The BUYER shall notify the above to the New
BUYER before assignment or novation and the New BUYER will have to accept any
additional cost related to the new supervision.

 

(End
of Article)

 

45

 

ARTICLE XIV
- TAXES AND DUTIES

 

1.                          Taxes and Duties Incurred in
Korea :

 

The BUILDER
shall bear and pay all taxes, duties, stamps and fees incurred in Korea in
connection with execution and/or performance of this Contract as the BUILDER,
except for any taxes and duties imposed in Korea upon the BUYER’s Supplies.

 

2.                          Taxes and Duties Incurred
outside Korea :

 

The BUILDER shall bear and pay all taxes,
duties, stamps and fees incurred outside Korea in connection with execution
and/or performance of this Contract including guarantee matter as the BUILDER.

 

The BUYER shall bear and pay all taxes,
duties, stamps and fees incurred outside Korea in connection with execution
and/or performance of this Contract as the BUYER.

 

(End of Article)

 

46

 

ARTICLE XV - PATENTS, TRADEMARKS, COPYRIGHTS,
ETC.

 

1.                          Patents, Trademarks and
Copyrights :

 

Machinery
and equipment of the VESSEL may bear the patent number trademarks or trade
names of the manufacturers. The BUILDER shall defend and hold harmless the
BUYER from patent liability or claims of patent infringement of any nature or
kind, including costs and expenses for, or on account of any patented or
patentable invention made or used in the performance of this Contract and also
including costs and expenses of litigation, if any.

 

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.

 

The BUILDER’s warranty hereunder does not extend to
the BUYER’s Supplies.

 

2.                          General Plans,
Specifications and Working Drawings :

 

The BUILDER retains all rights with respect
to the SPECIFICATIONS , and 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, without the prior written consent of the BUILDER, except where
it is necessary for usual operation, repair,
registration, classification, chartering, sale and maintenance of
the VESSEL.

 

(End
of Article)

 

47

 

ARTICLE XVI - BUYER’S SUPPLIES

 

1.                          Responsibility of BUYER :

 

 (a)                   The BUYER shall, at its own risk, cost and expense, supply and deliver
to the BUILDER all of the items to be furnished by the BUYER as specified in
the SPECIFICATINS (herein called the BUYER’s Supplies) at warehouse or other
storage of the Shipyard in the proper condition ready for installation in or on
the VESSEL, in accordance with the time schedule designated and advised by
the BUILDER to the BUYER within 60 days from signing this Contract.

 

 (b)                  In
order to facilitate installation by the BUILDER of the BUYER’s Supplies in or
on the VESSEL, the BUYER shall furnish the BUILDER with necessary
specifications, plans, drawings, instruction books, manuals, test reports and
certificates required by the rules and regulations of the SPECIFICATIONS .

 

If so requested by the BUILDER, the BUYER shall,
without any charge to the BUILDER, cause the representatives of the
manufacturers of the BUYER’s Supplies to assist the BUILDER in installation
thereof in or on the VESSEL and/or to carry out installation thereof by themselves
or to make necessary adjustments at the Shipyard.

 

 (c)                   Any and all of the BUYER’s Supplies shall be subject to the BUILDER’s
reasonable right of rejection, as and if they are found to be unsuitable or in
improper condition for installation.

 

 (d)                  Should
the BUYER fail to deliver any of the BUYER’s Supplies within the time
designated, the Delivery Date shall be automatically extended for a period
which actually caused the delay in the delivery of the VESSEL.

 

 (e)                   If delay in delivery of any of the BUYER’s
Supplies exceeds thirty (30) days, then, the BUILDER shall be entitled to
proceed with construction of the VESSEL without installation thereof in or on
the VESSEL as hereinabove provided, and the BUYER shall accept and take
delivery of the VESSEL so constructed, unless such delay is caused by Force
Majeure in which case the provision Paragraph 1(d) of this Article shall
apply.

 

48

 

2.                          Responsibility of BUILDER :

 

The BUILDER
shall be responsible for storing and handling with reasonable care of the BUYER’s
Supplies after delivery thereof at the Shipyard, and shall, at its own cost and
expense, install them in or on the VESSEL, unless otherwise provided herein or
agreed by the parties hereto, provided, always, that the BUILDER shall not be
responsible for quality, efficiency and/or performance of any of the BUYER’s
Supplies.

 

(End
of Article)

 

49

 

ARTICLE XVII - INSURANCE

 

1.                          Extent of Insurance Coverage

 

From the
time of launching until delivery of the VESSEL, the BUILDER shall, at its own
cost and expense, insure the VESSEL and all machinery and equipment,
appurtenances and outfits, including the BUYER’s Supplies, built into or
installed in or upon the VESSEL, against all risks under the “Institute Causes
for BUILDER’s Risk”, with first class insurance company or underwriters in
Korea.

 

The amount
of such insurance coverage shall, up to the date of delivery of the VESSEL, not
be less than the aggregate amount of all instalments paid by the BUYER to the
BUILDER, plus the value of the BUYER’s Supplies in the custody of the Shipyard.

 

2.                          Application of the Recovered
Amounts

 

In the
event that the VESSEL shall be damaged from any insured cause at any time
before delivery of the VESSEL, and in the further event that such damage shall
not constitute an actual or constructive total loss of the VESSEL, the amount
received in respect of the insurance shall be applied by the BUILDER in 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 the SPECIFICATIONS , however, subject to the extension of delivery
time under Article VIII hereof (except in case of negligence of the
BUILDER).

 

Should the
VESSEL from any cause become an actual or constructive total loss, the BUILDER
shall either :

 

 (a)                   proceed in accordance with the terms of this Contract, in which case
the amount received in respect of the insurance shall be applied to the
construction and repair of damage of the VESSEL, provided the parties hereto
shall have first agreed thereto in writing and to such reasonable extension of
delivery time as may be necessary for the completion of such
reconstruction and repair ; or

 

50

 

 (b)                  refund promptly to the BUYER
the full amount of all sums paid by the BUYER to the BUILDER as instalments in
advance of delivery of the VESSEL with Six percent (6.0%) interest, and deliver
to the BUYER all BUYER’s Supplies (or the insurance proceeds paid with respect
thereto), in which case this Contract shall be deemed to be automatically
terminated and all right, duties, liabilities and obligations of each of the
parties to the other shall forthwith cease and terminate.

 

3.                          Termination of BUILDER’s
Obligation to Insure

 

The BUILDER shall be under no obligation to insure
the VESSEL hereunder after delivery and acceptance of the VESSEL.

 

(End
of Article)

 

51

 

ARTICLE XVIII – NOTICE

 

1.                          Address :

 

Any and all
notices and communications in connection with this Contract shall be addressed
as follows :

 

To the BUYER :

Bayview Shipping Inc.

80 Broad Street,
Monrovia, Liberia

Cable address :    BALMAR

Telefax No.  :      231-7-7000-422

 

To the BUILDER:

 

Samsung Heavy Industries Co., Ltd.

647-9, 11th Floor, KIPS Building, Yeoksam-Dong, Kangnam-Ku,

Seoul, Korea

Cable address : SSYARD SEOUL

Telefax No. : (+82 2) 3458-7349, (+82 2) 3458-7319

 

or preferably to its Geoje Yard :

 

Samsung Heavy Industries Co., Ltd.

P.O.BOX Gohyun 9

530, Jangpyung-Ri, Shinhyun-Up, Geoje-Si, Kyungnam, Korea

 

	
  Telefax
  No. :

  	
  (+82
  55) 630-4947 (Design Department)

  
	
   

  	
  (+82
  55) 630-4978 (Customer Satisfaction Team.)

  

 

2.                          Language :

 

Any and all
notices and communications in connection with this Contract shall be written in
the English language.

 

52

 

3.                          Effective Date of Notice :

 

The notice
in connection with this Contract shall become effective from the date when such
notice is received by the BUYER or by the BUILDER except otherwise described in
the Contract.

 

(End of
Article)

 

53

 

ARTICLE XIX -
EFFECTIVE DATE OF CONTRACT

 

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

 

(End of Article)

 

54

 

ARTICLE XX - INTERPRETATION

 

1.                          Laws Applicable :

 

The parties
hereto agree that the validity and interpretation of this Contract and of each Article and
part thereof shall be governed by the laws of England.

 

2.                          Discrepancies :

 

All general
language or requirements embodied in the SPECIFICATIONS are intended to
amplify, explain and implement the requirements of this Contract. However, in
the event that any language or requirements so embodied permit of an
interpretation inconsistent with any provisions of this Contract, then, in each
and every such event, the applicable provisions of this Contract shall prevail
and govern. In the event of conflict between the SPECIFICATIONS and Plans, the SPECIFICATIONS
shall prevail and govern.

 

3.                          Entire Agreement :

 

This
Contract contains the entire agreement and understanding between the parties
hereto and supersedes all prior negotiations, representations, undertaking and
agreements on any subject matter of this Contract.

 

4.                          Amendments and Supplements :

 

Any
supplement, memorandum of understanding or amendment, whatsoever form it may be
relating to this Contract, to be made and signed among parties hereof after
signing this Contract, shall be the integral part of this Contract and
shall be predominant over the respective corresponding Article and/or
Paragraph of this Contract.

 

The
Contract can only be amended in writing.

 

(End of Article)

 

55

 

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

 

 

	
  BUYER
  :

  	
  BUILDER :

  
	
  BAYVIEW SHIPPING INC.

  	
  SAMSUNG HEAVY IND., CO., LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ John Coustas

  	
   

  	
   

  	
  /s/ J. W. Kim

  	
   

  
	
  By    : 

  	
  John Coustas

  	
   

  	
  By   :   J. W. Kim

  
	
  Title
  : 

  	
  Attorney-In-Fact

  	
  Title
  :

  	
  President &
  CEO

  
						

 

56

 

EXHIBIT “A”

 

LETTER OF
REFUNDMENT GUARANTEE

 

Gentlemen
:

 

We
hereby issue our letter of guarantee no.             
in favour of Bayview Shipping Inc.,(hereinafter called the “BUYER”) for account
of Samsung Heavy Industries Co., Ltd.(hereinafter called the “BUILDER”) as
follows in consideration of the shipbuilding contract dated March 28, 2006
(hereinafter called the “Contract”) made by and among the BUYER and the BUILDER
for the construction of one(1) single screw diesel engine driven Container
VESSEL having BUILDER’s Hull No. 1670 (hereinafter called the “VESSEL”).

 

If
in connection with the terms of the Contract the BUYER shall become entitled to
a refund of the advance payment(s) made to the BUILDER prior to the delivery of
the VESSEL, we hereby irrevocably guarantee the repayment of the same to the
BUYER immediately on demand being initially US$ 6,380,000.- (Say U.S. Dollars Six
Million Three Hundred and Eighty Thousand only) together with interest thereon
at the rate of Six (6) percent per annum from the respective dates on
which such sums were paid by the BUILDER to the date of remittance by
telegraphic transfer of such refund.

 

The
amount of this guarantee will be automatically increased, not more than three
times, upon BUILDER’s receipt of the respective instalment: each time by the
amount of instalment of US$ 6,380,000.- (Say U.S. Dollars Six Million Three
Hundred and Eighty Thousand only), US$ 6,380,000.- (Say U.S. Dollars Six
Million Three Hundred and Eighty Thousand only) and US$ 6,380,000.- (Say U.S.
Dollars Six Million Three Hundred and Eighty Thousand only) respectively 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$ 25,520,000.- (Say U.S.
Dollars Twenty Five Million Five Hundred and Twenty Thousand only) plus
interest thereon at the rate of Six (6) percent per annum from the
respective dates on which such sums were paid by the BUYER to the BUILDER to
the date of remittance by telegraphic transfer of the refund.

 

Our
liability under this letter of guarantee shall not be affected by any
alteration to or variation of the terms of the Contract you may hereafter
agree with the BUILDER and by any other matter of circumstances, including
bankruptcy or insolvency of the BUILDER, which might otherwise discharge our
liability hereunder as guarantor of the BUILDER’s obligations as aforesaid.

 

57

 

In
case any refund is made to you by the BUILDER or by us under this guarantee,
our liability hereunder shall be automatically reduced by the amount of such
refund.

 

This
letter of guarantee is available against BUYER’s simple receipt and signed
statement certifying that 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 within Thirty One (31) days after BUYER’s demand to the BUILDER.

 

Refund
shall be made to BUYER by telegraphic transfer in United States Dollars to an
account designated by you without deduction, withholding or set-off.

 

This
letter of guarantee shall expire and 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, in
either case, this letter of guarantee shall be returned to us. This guarantee
is valid from the date of this letter of guarantee until or in the event of
delayed delivery until such time as the VESSEL is delivered by the BUILDER to
the BUYER in accordance with the terms of the Contract.

 

Notwithstanding
the provisions hereinabove, in case we receive notification from you or the
BUILDER confirmed by an Arbitrator stating 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, the period of
validity of this guarantee shall be extended until Thirty (30) days after the
final and non-appealable award shall be rendered in the Arbitration and a copy
thereof acknowledged by the Arbitrators. In such case, this guarantee shall not
be available unless and until such acknowledged copy of the final award in the
Arbitration justifying your claim is presented to us.

 

Your
rights in respect of this letter of guarantee are assignable from the date of
this letter of guarantee until such time as the VESSEL is delivered by the
BUILDER to the BUYER in accordance with the provisions of the Contract, on the
understanding that you will notify us of the identity of any assignee of your
rights under this letter of guarantee.

 

Any
notice or demand under this letter of guarantee shall be given by facsimile and
sent to:

 

58

 

 

 

 

 

or
to such other address as we might notify to you in writing. A notice shall be
deemed to be served and shall take effect 2 hours after its transmission is
completed, provided that if a notice would be deemed to be served on a day
which is not a business day, or which is a business day but after 5:00 p.m.
local time, in the place of receipt, the notice shall be deemed to be served
and shall take effect at 9:00 a.m. on the next day which is a business
day.

 

This
guarantee shall be governed by and construed in accordance with the Laws of
England. Any disputes arising under this guarantee (but not any disputes arising
under the Contract which shall be determined by arbitration in accordance with
the terms of the Contract and as referenced in this letter of guarantee) shall
be determined by the High Court of Justice in London to whose exclusive
jurisdiction we hereby submit. We appoint 

 

                                                                                                              as
our agents for service of process in connection with any proceedings in such
courts.

 

We
each jointly and severally hereby represent and guarantee that we have the
corporate power and authority to execute, deliver and perform the
obligations under this letter of guarantee, and that such execution and
performance will not violate or conflict with any provision of law, statute,
rule, permit or regulation of any government, regulatory body, agency or other
authority in the jurisdictions where we are subject to such laws and
regulations.

 

59

 

IN
WITNESS WHEREOF, we have hereunder set our hands and seal by our duly
authorized representatives this         
day of                 ,
2006.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  For
  and on behalf of

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name
  :

  
	
   

  	
  Title
  : Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  For
  and on behalf of

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name
  :

  
	
   

  	
  Title
  : Attorney-in-Fact

  

 

60

 

EXHIBIT “B”

 

Samsung
Heavy Industries Co., Ltd.

11th
Floor, KIPS Building

647-9,
Yoksam-Dong, Kangnam-Ku,

Seoul,
Korea 135-080

 

Date
:                                  
, 2006

 

PERFORMANCE GUARANTEE

 

In
consideration of the performance of a certain shipbuilding contract dated
                      (hereinafter
called the “Contract”) by BAYVIEW SHIPPING INC. of 80 Broad street, Monrovia,
Liberia having your Hull No.1670 (hereinafter called the “VESSEL”) providing
among other things for payment of the Contract Price amounting to United States
Dollars             (US$              );

 

We,
the undersigned, hereby irrevocably and unconditionally guarantee to you, your
successors, and assigns the due and faithful performance by the BUYER of its
all liabilities and responsibilities under the Contract and any supplement,
amendment, change or modification hereafter made thereto, including but not
limited to, due and prompt payment of the Contract Price by the BUYER to you,
your successors, and assigns under the Contract and any supplement, amendment,
change or modification as aforesaid (hereby expressly waiving notice of any
such supplement, amendment, change or modification as may be agreed to by
the BUYER and confirming that this guarantee shall be fully applicable to the
Contract as so supplemented, amended, changed or modified).

 

This
Performance Guarantee shall be governed by the laws of England.

 

 

	
  GUARANTOR
  :

  
	
  BY
  :

  	
   

  	
   

  
	
  TITLE :

  
	
  WITNESS
  :

  

 

61

 

EXHIBIT “C”

 

Samsung
Heavy Industries Co., Ltd.

11th
Floor, KIPS Building

647-9,
Yoksam-Dong, Kangnam-Ku,

Seoul,
Korea 135-080

 

Date
:                                             , 2006

 

PERFORMANCE GUARANTEE

 

In
consideration of the assignment of a certain shipbuilding contract dated                    (hereinafter
called the “Contract”) by us to       
having your Hull No.1670 (hereinafter called the “VESSEL”) providing
among other things for payment of the Contract Price amounting to United States
Dollars            (US$              );

 

We,
the undersigned, hereby irrevocably and unconditionally guarantee to you, your
successors, and assigns the due and faithful performance by the BUYER of its
all liabilities and responsibilities under the Contract and any supplement,
amendment, change or modification hereafter made thereto, including but not
limited to, due and prompt payment of the Contract Price by the BUYER to you,
your successors, and assigns under the Contract and any supplement, amendment,
change or modification as aforesaid (hereby expressly waiving notice of any
such supplement, amendment, change or modification as may be agreed to by
the BUYER and confirming that this guarantee shall be fully applicable to the
Contract as so supplemented, amended, changed or modified).

 

This
Performance Guarantee shall be governed by the laws of England.

 

 

	
  GUARANTOR
  :

  
	
  BY
  :

  	
   

  	
   

  
	
  TITLE :

  
	
  WITNESS
  :

  

 

62

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