Document:

EX-10.1

 

SECOND AMENDMENT TO CREDIT AGREEMENT

     THIS SECOND AMENDMENT TO CREDIT AGREEMENT dated as of November 15, 2006 (this
“Amendment”) by and among THE BISYS GROUP, INC., a Delaware corporation (the
“Borrower”), the several banks and other financial institutions from time to time party
hereto (the “Lenders”), and SUNTRUST BANK, in its capacity as Administrative Agent for the
Lenders (the “Administrative Agent”).

     WHEREAS, the Borrower, the Lenders party thereto and the Administrative Agent are parties to
that certain Credit Agreement dated as of January 3, 2006, as amended by that certain First
Amendment to Credit Agreement (the “First Amendment”) dated as of August 31, 2006 (as in
effect on the date hereof, the “Credit Agreement”);

     WHEREAS, the Borrower, the Lenders party hereto and the Administrative Agent desire to amend
the Credit Agreement in certain respects on the terms and conditions contained herein;

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties hereto, the parties hereto hereby agree as follows:

     Section 1. Amendments to Credit Agreement.

     (a) The Credit Agreement is hereby amended by deleting the definition of “Consolidated EBITDA”
appearing in Section 1.1 thereof in its entirety and substituting in lieu thereof the following:

     “Consolidated EBITDA” means, for any period, Consolidated Net Income for such period
plus the sum of, without duplication, (i) Consolidated Interest Expense, (ii) provision for
income taxes, (iii) depreciation, amortization and all other non-cash charges for such period of
the Borrower and the Subsidiaries determined on a consolidated basis in accordance with GAAP and
(iv) payments made in respect of the settlement of any Settled Proceedings, each to the extent
deducted in determining Consolidated Net Income for such period and minus the sum of
non-cash gains for such period to the extent included in determining Consolidated Net Income for
such period.

     (b) The Credit Agreement is hereby further amended by deleting the definition of “Revolving
Commitment” appearing in Section 1.1 thereof in its entirety and substituting in lieu thereof the
following:

     “Revolving Commitment” means, with respect to each Lender having a Revolving
Commitment, the commitment of such Lender to make Revolving Loans and to acquire participations in
Letters of Credit in an aggregate outstanding amount not exceeding the amount of such Lender’s
Revolving Commitment as set forth on the signature page hereof, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable, as such
Revolving Commitment may be adjusted from time to time

 

 

pursuant to Section 2.7 or pursuant to
assignments by or to such Lender pursuant to Section 10.4. The initial aggregate amount of the
Revolving Commitments on the Agreement Date is $100,000,000.

     (c) The Credit Agreement is hereby further amended by adding the following new definition in
its appropriate alphabetical place in Section 1.1 of the Credit Agreement:

     “‘Settled Proceedings’ means each of the lawsuits and/or administrative
proceedings set forth and described on Schedule 1.1(A) attached hereto.”

     (d) The Credit Agreement is hereby further amended by attaching thereto as “Schedule 1.1(A)”
the Schedule 1.1(A) attached to this Amendment.

     (e) The Credit Agreement is hereby further amended by deleting Section 2.5 of the Credit
Agreement in its entirety and replacing such Section with the following new Section 2.5:

     “Section 2.5 Extension of Maturity Date

     The Borrower shall have the right, exercisable one time, to request that the
Administrative Agent and the Lenders agree to extend the current Maturity Date to December
31, 2007. The Borrower may exercise such right by executing and delivering to the
Administrative Agent at least 30 days prior to the current Maturity Date, a written request
for such extension. The Administrative Agent shall forward to each Lender a copy of such
extension request delivered to the Administrative Agent promptly upon receipt thereof.
Subject to satisfaction of the following conditions, the Maturity Date shall be extended to
December 31, 2007: (a) immediately prior to such extension and immediately after giving
effect thereto, no Default or Event of Default shall have occurred and be continuing and (b)
the Borrower shall have paid the fees payable under that certain fee letter dated as of
November 15, 2006 among the Borrower, SunTrust Capital Markets, Inc. and the Administrative
Agent in connection with such extension.”

     (f) The Credit Agreement is hereby further amended by adding the following new Section 2.12 to
Article II of the Credit Agreement:

     “Section 2.12 Additional Term Loan

     At any time prior to December 8, 2006, the Borrower shall have the right, exercisable
one time, subject to the terms and conditions of this Section 2.12, to request a term loan
from SunTrust in an aggregate amount up to, but not exceeding, $50,000,000, such term loan
to be funded no later than January 15, 2007. Any such term loan must be in an aggregate
minimum amount of $25,000,000 and integral multiples of $5,000,000 in excess thereof.
Promptly following receipt by SunTrust of such request, SunTrust agrees to seek credit
approval for such term loan in a manner consistent with SunTrust’s standard credit approval
process. In no event shall SunTrust be obligated at any time to make such term loan. In
connection with the making of such term loan pursuant to this

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Section, the Borrower shall
(i) make appropriate arrangements so that SunTrust receives a new Note in the amount of such
term loan within 2 Business Days of the making of such term loan, (ii) execute and deliver
such other documents, amendments to Loan Documents and instruments and take such further
actions as the Administrative Agent may reasonably request in connection with the foregoing
and (iii) pay all fees due and payable to SunTrust pursuant to any separate fee letter in
connection with such term loan.”

     (g) The Credit Agreement is hereby further amended by deleting Section 5.2(b) of the Credit
Agreement in its entirety and replacing such provision with the following:

     “(b) Intentionally Deleted”

     Section 2. Delivery of FY 2006 Form 10-K. Notwithstanding anything in Section
6.1(a) of the Credit Agreement or in the First Amendment to the contrary, the Borrower shall have
until January 15, 2007 to deliver the information required to be delivered under Section 6.1(a) of
the Credit Agreement with respect to its fiscal year ending June 30, 2006. For avoidance of doubt,
the Borrower’s failure to deliver such information on or before January 15, 2007 shall constitute
an Event of Default for all purposes under the Credit Agreement and the other Loan Documents.

     Section 3. Delivery of First and Second Fiscal Quarter Form 10-Q. Notwithstanding
anything in Section 6.1(b) of the Credit Agreement to the contrary, (i) the Borrower shall have
until March 1, 2007 to deliver the information required to be delivered under Section 6.1(b) of the
Credit Agreement with respect to its fiscal quarter ending September 30, 2006 and (ii) the Borrower
shall have until May 1, 2007 to deliver the information required to be delivered under Section
6.1(b) of the Credit Agreement with respect to its fiscal quarter ending December 31, 2006. For
avoidance of doubt, the Borrower’s failure to deliver such information on or before March 1, 2007
or May 1, 2007, as the case may be, shall constitute an Event of Default for all purposes under the
Credit Agreement and the other Loan Documents.

     Section 4. Effectiveness of Amendment. The effectiveness of this Amendment is
subject to the truth and accuracy of the representations set forth in Section 5 below and receipt
by the Administrative Agent of each of the following, each of which shall be in form and substance
satisfactory to the Administrative Agent:

     (a) Counterparts of this Amendment duly executed by the Borrower, each Subsidiary Guarantor,
the Administrative Agent and the Required Lenders;

     (b) Counterparts of that certain fee letter dated as of the date hereof duly executed by the
Borrower, SunTrust Bank and SunTrust Capital Markets, Inc.;

     (c) All fees due and payable by the Borrower on the date hereof, whether pursuant to the
Credit Agreement, any other Loan Document or any separate fee letter; and

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     (d) Such other documents, agreements, instruments, certificates or other confirmations as the
Administrative Agent may reasonably request.

     Section 5. Representations of Borrower. The Borrower represents and warrants to the
Administrative Agent and the Lenders that:

     (a) Corporate Power and Authority. The Borrower has the corporate
power and authority to execute, deliver and perform the terms and provisions of this
Amendment, and has taken all necessary corporate action to authorize the execution,
delivery and performance by them of this Amendment. The Borrower has duly executed
and delivered this Amendment, and this Amendment constitutes its legal, valid and
binding obligation enforceable in accordance with its terms, except to the extent
that the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors’
rights and by equitable principles (regardless of whether enforcement is sought in
equity or at law).

     (b) No Violation. Neither the execution, delivery or performance by the Borrower of
this Amendment and the Credit Agreement, as amended hereby, nor compliance by it with the terms and
provisions hereof and thereof, (i) will contravene any provision of any law, statute, rule or
regulation or any order, writ, injunction or decree of any court or Governmental Authority, (ii)
will conflict with or result in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets of the Borrower pursuant to the terms
of any material indenture, mortgage, deed of trust, credit agreement or loan agreement, or any
other material agreement, contract or instrument, to which the Borrower is a party or by which it
or any of its property or assets is bound or to which it may be subject or (iii) will violate any
provision of the certificate or articles of incorporation or by-laws (or equivalent organizational
documents) of the Borrower.

     (c) Governmental Approvals. No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except for those that have otherwise been
obtained or made on or prior to the date of the effectiveness of this Amendment and which remain in
full force and effect on such date) or exemption by, any Governmental Authority, is required to
authorize, or is required in connection with, (i) the execution, delivery and performance of this
Amendment by the Borrower or (ii) the legality, validity, binding effect or enforceability of this
Amendment, and the Credit Agreement, as amended hereby, against the Borrower.

     (d) No Default. No Default or Event of Default now exists or will exist immediately
after giving effect to this Amendment.

     (e) Schedule 1.1(A). The information set forth on Schedule 1.1(A) attached hereto is
true, accurate and complete in all material respects.

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     (f) Reaffirmation of Representations. The Borrower hereby repeats and reaffirms all
representations and warranties made by it to the Administrative Agent and the Lenders in the Credit
Agreement and the other Loan Documents to which it is a party on and as of the date hereof (and
after giving effect to this Amendment) with the same force and effect as if such representations
and warranties were set forth in this Amendment in full (except to the extent of changes resulting
from transactions contemplated or permitted by the Credit Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that singly or in the aggregate are not
materially adverse, and to the extent that such representations and warranties relate expressly to
an earlier date).

     Section 6. Amendment as a Loan Document. Each reference in the Credit Agreement or
in any of the other Loan Documents to “Loan Documents” shall be deemed to include a reference to
this Amendment, and this Amendment shall be a Loan Document for all purposes under the Loan
Documents.

     Section 7. References to the Credit Agreement. Each reference to the Credit
Agreement in any of the Loan Documents (including the Credit Agreement) shall be deemed to be a
reference to the Credit Agreement, as amended by this Amendment.

     Section 8. Benefits. This Amendment shall be binding upon and shall inure to the
benefit of the parties hereto and their respective permitted successors and assigns.

     Section 9. Expenses. The Borrower agrees to reimburse the Lenders and the
Administrative Agent on demand for all reasonable costs and expenses (including, without
limitation, attorneys’ fees) incurred by such parties in negotiating, documenting and consummating
this Amendment, the other documents referred to herein, and the transactions contemplated hereby
and thereby.

     Section 10. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK.

     Section 11. Effect/No Novation. Except as expressly herein amended, the terms and
conditions of the Credit Agreement and the other Loan Documents shall remain in full force and
effect. Neither this Amendment nor any of the transactions contemplated hereby shall be deemed to
be a novation of any of the Obligations.

     Section 12. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original and shall be binding upon all
parties, their successors and assigns.

     Section 13. Definitions. All capitalized terms not otherwise defined herein are used
herein with the respective definitions given them in the Credit Agreement.

[Signatures on Following Pages]

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     IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to Credit Agreement
to be executed as of the date first above written.

	 	 	 	 	 
	 	BORROWER:

THE BISYS GROUP, INC.

 	 
	 	By:  	/s/ Bruce Dalziel
 	 
	 	 	Name:  	Bruce D. Dalziel 	 
	 	 	Title:  	EVP & Chief Financial Officer 	 
	 

[Signatures Continued on Following Page]

 

 

[Signature Page to Second Amendment to Credit Agreement

dated as of November 15, 2006 with THE BISYS GROUP, INC.]

	 	 	 	 	 
	 	ADMINISTRATIVE AGENT AND LENDERS:

SUNTRUST BANK, Individually and as Administrative Agent

 	 
	 	By:  	/s/ Timothy M. O’Leary
 	 
	 	 	Name:  	Timothy M. O’Leary 	 
	 	 	Title:  	Director 	 
	 

[Signatures Continued on Following Page]

 

 

[Signature Page to Second Amendment to Credit Agreement

dated as of November 15, 2006 with THE BISYS GROUP, INC.]

The following hereby execute this Second Amendment to Credit Agreement to indicate their consent
thereto and agreement therewith and to acknowledge that the making of this Second Amendment to
Credit Agreement shall not terminate, limit or otherwise adversely affect any of their respective
obligations to the Administrative Agent, the Issuing Bank and the Lenders under the Loan Documents.
Further, the following hereby reaffirm their respective continuing obligations as a guarantor of
the Guaranteed Obligations (as defined in the Guarantee Agreement) under the Guarantee Agreement
and their respective obligations under each of the other Loan Documents to which they are a party.

ASCENSUS INSURANCE SERVICES, INC.

BISYS COMMERCIAL INSURANCE SERVICES, INC.

BISYS FINANCING COMPANY

BISYS FUND SERVICES OHIO, INC.

BISYS INSURANCE SERVICE HOLDING CORP.

BISYS INSURANCE SERVICES, INC.

BISYS MANAGEMENT COMPANY

BISYS PRIVATE EQUITY SERVICES, INC.

BISYS RETIREMENT SERVICES, INC.

	 	 	 	 	 
	 	 	By: /s/ Bruce Dalziel
	 

	 	Name:
	 	Bruce D. Dalziel
	 

	 	Title:
	 	Executive Vice President of each of
	 

	 	 	 	the above-listed Guarantors

[Signatures End]EX-10.1

 

Exhibit 10.1

	 	 	 	 	 
	Contract:

	 	Crowley VMS
	 	Contract Date: 8/29/06
	Description:	 	Twin Screw Heavy Fuel Burning Ocean Tugs (4) and ATB Barges (4)
	Page 1 of 2
	 	 	 	 

	 	 	 	 	 
	Article No.	 	Title	 	Page Number
	 
	 	Contract Effective Date	 	1
	Article I
	 	Description of the Units	 	1-3
	Article II
	 	Price and Payment	 	3-5
	Article III
	 	Time and Conditions of Delivery and Acceptance; Title	 	5-7
	Article IV
	 	Changes in the Plans and Specifications	 	7-8
	Article V
	 	Liquidated Damages	 	8-9
	Article VI
	 	Owner Furnished Equipment	 	9-10
	Article VII
	 	Inspection By Owner’s Representative	 	10
	Article VIII
	 	Force Majeure	 	10-11
	Article IX
	 	Warranty	 	11-14
	Article X
	 	Performance Warranty	 	14-16
	Article XI
	 	Insurance	 	16-18
	Article XII
	 	Builder Guarantee	 	18-19
	Article XIII
	 	Liability and Indemnity	 	20-22
	Article XIV
	 	No Consequential Damages	 	22
	Article XV
	 	Prohibition of Liens	 	22-23
	Article XVI
	 	Taxes	 	23-24
	Article XVII
	 	Patents	 	24
	Article XVIII
	 	Use of the Plans and Specifications	 	24
	Article XIX
	 	Bankruptcy	 	24-25
	Article XX
	 	Events of Default	 	25-28
	Article XXI
	 	Notices	 	29
	Article XXII
	 	Construction	 	29-30
	Article XXIII
	 	Choice of Law and Dispute Resolution	 	30

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	Article No.	 	Title	 	Page Number
	Article XXIV
	 	Assignment	 	30-31
	Article XXV
	 	Parent Guarantees	 	31
	Article XXVI
	 	Production Schedule	 	31
	Article XXVII
	 	Cooperation with Owner’s Lender	 	31
	Article XXVIII
	 	Miscellaneous	 	32

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VESSEL CONSTRUCTION CONTRACT

     THIS VESSEL CONSTRUCTION CONTRACT (the “Contract”) entered into as of this Twenty-Ninth of
August, 2006, by and between VT HALTER MARINE, INC. (VTHM), a Delaware corporation (hereinafter
called “Builder”), and VESSEL MANAGEMENT SERVICES, INC., a Delaware corporation (hereinafter called
“Owner”).

WITNESSETH:

ARTICLE I — DESCRIPTION OF THE UNITS 

     (a) Description of the Units

     Builder, for and in consideration of the sum to be paid by Owner as hereinafter set forth,
agrees to design, engineer, build, launch, equip, outfit, complete and deliver at the shipyard as
designated in the attached Exhibits, free and clear from liens, claims and encumbrances, four (4)
135’ x 42’ x 22’ Twin Screw Heavy Fuel Burning Ocean Tugs and four (4) 587’ x 74’ x 40’ Ocean ATB
Barges (hereinafter individually referred to as the “Vessel(s)” and a Tug and Barge set is
collectively referred to as the “Unit(s)”, each of which is more particularly described on the
attached Tug Exhibits “A-5-T”, “A-6-T”, “A-7-T” and “A-8-T” and Barge Exhibits “A-5-B”, “A-6-B”,
“A-7-B”, “A-8-B”which shall be constructed in accordance with this Contract , those specifications
listed on attached Tug Exhibit “B-1” and Barge Exhibit “B-2” and the Plans and Drawings listed on
the attached Tug Exhibit “C-l” and Barge Exhibit “C-2” all of which have concurrently been
identified and initialed by the parties hereto and made a part hereof as if fully set forth herein.
(The Units referred to in the preceding sentence may be referred to as “Unit No. HFO-5”, “Unit
No.HFO-6”, “Unit No.HFO-7” and “Unit No.HFO-8” or “Units 5-8” as the context may require.) The
units shall be identical in all respects, including applicable changes to the previous Vessel No.
Four (4) of HFO Units 1-4 under that certain Vessel contract dated August 23, 2005.

     For purposes of this Contract, the Contract Documents shall consist of the following documents
(as each is defined in the Contract): this Contract, Tug Exhibits A-5-T, A-6-T, A-7-T and A-8-T,
Barge Exhibits A-5-B, A-6-B, A-7-B and A-8-B, Tug Specifications listed on Exhibits B-1 and Barge
Specifications B-2, Plans and Drawings listed on Tug Exhibits C-l and

1

 

Barge Exhibits C-2, any Change Orders executed pursuant to Article IV hereof and amendments in
writing properly signed by the parties.

     Except for any Owner-furnished equipment and materials as may be listed in the Contract
Documents in connection with construction of the Vessels (collectively, the “Owner Furnished
Equipment”), Builder agrees to furnish all facilities, labor, tools, equipment and material
necessary for the construction and delivery of the Vessels.

     The Units shall be constructed and completed in a good and workmanlike manner with the use of
good commercial shipyard practices and marine engineering and procedures to meet the applicable
requirements of regulatory bodies as set forth in the Contract Documents, and certificates
evidencing the fact that the Units meet required classifications, shall be furnished by Builder to
Owner.

     The Units are to be documented for full ocean service with coastwise rights under the laws of
the U.S. and are to be designed, constructed, equipped and outfitted by Builder to comply with and
obtain certificates showing compliance with all applicable requirements, as of the Delivery Date,
of the American Bureau of Shipping, U.S. Coast Guard or any other applicable regulatory agencies
referred to in the Contract Documents. The Contractor shall build the Units under the supervision
and survey of the American Bureau of Shipping so that on delivery the Tug Vessels achieve the class
notation ABS XAl Towing Vessel XAMS and the Barge Vessels achieve the class notation
ABS XAl Oil and Chemical Tank Barge SH free of all conditions, notations, qualifications,
recommendations, reservations and restrictions. If any enforced changes in the American Bureau of
Shipping or other applicable classification societies’ rules or in the applicable rules of any
governmental agency are made subsequent to the date of this Contract necessitating alterations or
additions to a Vessel or a Unit, whereby the cost of a Vessel or a Unit is increased, the time
required for completion for a Vessel or a Unit is extended and/or a Vessel or a Unit will not
attain the performance criteria required by Article X, Owner shall authorize, and pay for such
alterations, additional work items, outfit and/or equipment, and shall authorize such additional
time as may be required to meet the enforced changes and the required performance criteria, in
accordance with Article IV (Changes in the Plans and Specifications) hereof. If the parties agree
that such alterations or additions do not involve additional time or cost, they shall be completed
by Builder as part of this Contract in accordance with the terms and provisions hereof.

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     All classification, certification, testing, survey and other fees and charges payable to the
American Bureau of Shipping and any other third party regulatory bodies required by the Contract in
relation to the construction of the Unit shall be for the account of the Builder.

     Owner shall be solely responsible for ensuring that all Owner Furnished Equipment meets all
applicable classification and regulatory requirements.

ARTICLE II — PRICE AND PAYMENT:

     Owner, in consideration of the true and faithful performance on the part of the Builder,
agrees to pay to Builder the sum of FORTY SEVEN MILLION ONE HUNDRED THOUSAND DOLLARS AND NO CENTS
(US$47,100,000.00) (hereinafter called the “Contract Price”) each for Unit No.HFO-5, Unit No.HFO-6,
Unit No.HFO-7 and Unit No.HFO-8. The portion of the Contract Price attributable to each Vessel
(hereinafter called the “Assigned Value”) is contained in Tug Exhibits A-5-T, A-6-T, A-7-T and
A-8-T, Barge Exhibits A-5-B, A-6-B, A-7-B and A-8-B, for each Unit. Payments for the Assigned Value
are to be made based on the progress of each Vessel in accordance with the Payment Schedules set
forth in Tug Exhibits A-5-T, A-6-T, A-7-T and A-8-T, Barge Exhibits A-5-B, A-6-B, A-7-B and A-8-B.
The Contract Price is a fixed price and may be adjusted only in strict accordance with, and subject
to, the express provisions of this Contract. For the avoidance of doubt, the Contract Price
includes: (i) the cost of the Unit completed in accordance with the requirements of this Contract;
(ii) the cost of all Builder furnished materials and construction work and the cost of all tests
and trials of the Unit to be performed by, or on behalf of, the Builder; (iii) the cost of
procuring the classification notation for the Unit, and of obtaining all certificates and other
documents that are required to be delivered pursuant to this Contract; and (iv) all other costs and
expenses of the Builder as provided for herein or otherwise incurred by the Builder unless
expressly provided for in this Contract as being for the Owner’s account. No commission of any kind
whatsoever is or will be payable (whether directly or indirectly) by or to any person in relation
to or in connection with this Contract or any of the business transactions described in or
contemplated by this Contract. The Contract Price for Units 5, 6, 7 and 8 includes the cargo
heating systems and Easy Chemical capability for those Units. Optional Item Pricing is shown on
Exhibit “J”.

     In the event the Down Payment for each Vessel, as required by Tug Exhibits A-5-T, A-6-T, A-7-T
and A-8-T, Barge Exhibits A-5-B, A-6-B, A-7-B and A-8-B is not tendered to Builder

3

 

in immediately available funds by the close of business on the fifth (5th) business
day following the full execution of this Contract, Builder shall have the right to terminate this
Contract, in which event neither party shall have any further liability to the other. In the event
Builder chooses not to terminate this Contract, then the Stipulated Delivery Date (as described in
Tug Exhibits A-5-T, A-6-T, A-7-T and A-8-T, Barge Exhibits A-5-B, A-6-B, A-7-B and A-8-B) shall be
extended by one day for each full business day the Down Payment is delayed beyond the fifth
(5th) business day following execution of this Contract.

     The Builder shall submit to Owner appropriate invoices and/or certificates for the progress
payments for each Vessel in accordance with the Payment Schedule set forth in Tug Exhibits A-5-T,
A-6-T, A-7-T and A-8-T, Barge Exhibits A-5-B, A-6-B, A-7-B and A-8-B which shall be due and payable
twenty (20) business days after the receipt of each invoice. Builder may, at its discretion, charge
Owner interest on any amount due hereunder, if not paid within five (5) business days after it is
due, at the per annum rate of 2% over the Chase Manhattan Bank prime rate or the maximum rate
allowed by law, whichever is less, with such interest being due from the date such amount is due
until paid in full. Payments for all Change Orders and all other additional costs mutually agreed
to in accordance with the terms of this Contract but not set forth in the Payment Schedule, less
credits for any deductions, shall be made in accordance with the terms of the negotiated Change
Order and in any event prior to delivery of the Unit or Vessel to which the change order or
additional cost pertains. The Assigned Value must be paid in accordance with the Payment Schedule
set forth in Tug Exhibits A-5-T, A-6-T, A-7-T and A-8-T, Barge Exhibits A-5-B, A-6-B, A-7-B and
A-8-B.

     If any progress payment shall not be made within five (5) business days after it is due in
accordance with the Contract Documents including, but not limited to, Tug Exhibits A-5-T, A-6-T,
A-7-T and A-8-T, Barge Exhibits A-5-B, A-6-B, A-7-B, and A-8-B, Builder may, in its sole
discretion, suspend or reschedule progress of the work (such right being in addition to any other
right set forth herein or at law or in equity) and Owner shall then be obligated to pay Builder, in
addition to other amounts becoming due hereunder, all documented direct costs resulting from such
suspension or rescheduling of the work. In the event of delay by Owner in payment of any amount due
and payable, Builder shall not be obligated to reschedule progress of the work as herein
authorized, but may pursue any and all remedies at law or in equity for enforcement of its

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rights, provided that Owner be given ten (10) days prior written notice before Owner is
considered to be in default.

     The making of any partial payments shall in no way estop Owner from thereafter asserting any
right or remedy accruing to it because of failure of Builder to deliver the completed Units in
accordance with the terms hereof.

ARTICLE III — TIME AND CONDITIONS OF DELIVERY AND ACCEPTANCE; TITLE:

     Builder shall deliver the Units to Owner at a location set forth on the attached Tug Exhibits
A-5-T, A-6-T, A-7-T and A-8-T, Barge Exhibits A-5-B, A-6-B, A-7-B and A-8-B (the “Place of
Delivery”) by the Stipulated Delivery Dates (as defined in Tug Exhibits A-5-T, A-6-T, A-7-T and
A-8-T, Barge Exhibits A-5-B, A-6-B, A-7-B and A-8-B). All costs and expenses of transporting each
Unit to the Place of Delivery shall be borne by and be the obligation of Builder. All costs and
expenses of operating and/or transporting the Units after each has reached the Place of Delivery
and been accepted by Owner shall be borne by and be the obligation of Owner.

     Each Unit shall not be tendered to Owner and Owner shall not be required to accept delivery of
the Unit, unless and until:

	 	(a)	 	The Unit has been completed in accordance with the Contract Documents;
	 
	 	(b)	 	All tests and trials required by the Contract Documents have been
satisfactorily completed, and any defects discovered and damages sustained have been
remedied and repaired excepting any outstanding punch list items that are mutually
agreed to be completed after delivery;
	 
	 	(c)	 	Builder has delivered to Owner its Notice of final Progress Payment invoice
reflecting completion of construction of the Unit; and
	 
	 	(d)	 	Builder has tendered to Owner a Bill of Sale (CG-1340) for the Unit (if
necessary), a Builder’s Certification and First Transfer of Title (CG-1261), as most
recently revised, and such other documents as may be required by law or by any
regulatory agency of the United States referred to in the Contract Documents including,
but not limited to, American Bureau of Shipping and U.S. Coast Guard, in order for
Owner to document the Unit for full ocean and coastwise service.

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	 	 	 	Any expenses in connection with the documentation of each Vessel shall be paid by
Builder.
	 
	 	(e)	 	The Unit (a) has been cleaned and prepared (in accordance with the Builder’s
usual practice and to its usual standards for vessels of this type) to take on a full
complement of officers and crew, and (b) is in all other respects ready to commence
operations as a liquid bulk articulated tug-barge Unit.

     If all applicable conditions of the Contract Documents have been met by Builder upon delivery
of the Unit to Owner, Owner shall execute a Delivery and Acceptance Certificate concurrent with its
acceptance of the Unit in the form of the attached Exhibit “D” and will pay to Builder the final
Progress Payment invoice including any unpaid balance due, but less (i) any amount in dispute and
as to which notice of arbitration has been given and less (ii) any amounts owed to Owner as
liquidated damages in accordance with this Contract. Progress Payments shall be made by the Owner
to the Builder in accordance with Article II of this contract.

     Within ten (10) business days after tender of delivery of a Unit by Builder to Owner in
compliance with this Article III, Owner will accept delivery of the Unit or Owner will promptly
deliver to Builder a written statement specifying the reasons Owner refused to accept delivery.
Within one (1) business day after receipt of such statement, Builder shall advise Owner in writing
what action it intends to take in response to Owner’s statement. Owner shall not refuse to accept
delivery of a Unit that achieves the Minimum Required Speed of 11.5 knots as measured in accordance
with Exhibit “H” for this reason only.

     The Delivery and Acceptance Certificate shall acknowledge performance of this Contract by both
parties and shall be conclusive evidence that all the duties and obligations of each of the
parties have been performed except as to (i) minor and insignificant defects set forth in the
Delivery’ and Acceptance Certificate, (ii) latent defects and (iii) items covered by warranty. The
expression “minor and insignificant defects” means defects which: (i) do not and will not adversely
affect the seaworthiness of the Unit; (ii) do not and will not prevent the unrestricted use of the
Unit in its intended service or purpose; (iii) do not and will not adversely affect the operational
efficiency of the Unit; or (iv) do not and will not involve any condition, qualification,
recommendation, reservation or restriction in relation to any certificate issued (or to be issued)
by the American Bureau of Shipping or any regulatory authority or any other specified party that in
the opinion of the Owner (acting in good faith) is or could be material in a commercial or

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technical sense. The Builder shall deliver the unit to the owner free and clear of all
encumbrances whatsoever.

     The Builder shall deliver the Unit to the Owner safely afloat alongside a safe and accessible
pier at the Builder’s shipyard where there must be sufficient water for the Unit always to remain
afloat and from where there must be direct, free, unimpeded, safe and lawful access to
international waters. Owner shall be afforded five (5) days free of any wharfage or any other
charge within which to remove the Unit from the point and time of Delivery.

     Subject to this Article and to Article XXIII (Choice of Law and Dispute Resolution), should
Owner fail to accept a Unit within ten (10) business days of the later to occur of (i) Owner’s
receipt of Builder’s final progress payment invoice indicating completion of the Unit in accordance
with the Contract Documents and (ii) delivery of the Unit to Owner in accordance with this Article,
Owner shall be in default of this Contract, and Builder shall have the right to take all necessary
steps to mitigate its damages and protect its rights and interests including, but not limited to,
the right to sue for specific performance of this Contract, or to retain any deposits or other
payments made hereunder. Builder’s exercise of the foregoing remedies, or any other remedies or
rights, shall not be deemed a waiver or release by Builder of any other rights or remedies that
Builder may have at law or in equity, taking into account the terms of this Contract including, but
not limited to the right to sue for any additional damages, costs, expenses, or attorneys’ fees
incurred by Builder in pursuing relief and recovery of damages or expenses resulting from Owner’s
default.

     Title to all materials, equipment, supplies, and other property incorporated into or purchased
for incorporation into each Vessel shall vest in Owner as and when Builder receives payment from
Owner under this Contract, subject to Builder’s liens and rights at common law, by statute or under
this Contract. Title to Owner Furnished Equipment shall, at all time, remain in Owner
notwithstanding that Builder shall have the risk of loss as provided in Article XIII, Liability and
Indemnity.

ARTICLE IV — CHANGES IN THE PLANS AND SPECIFICATIONS:

     Subject to the requirements of other work then pending in Builder’s yard, Owner has the right
to require any deletions from or additions to the plans and specifications for each Vessel on
giving due notice in writing to Contractor, the dollar amount of any such changes to be agreed

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upon in advance by Owner and Builder, and added to, or deducted from, the total Contract Price
and Assigned Value for such Vessel. If any such change shall delay the completion of such Vessel,
Builder shall be allowed a reasonable extension of time of the Stipulated Date of Delivery
sufficient to cover such delay. If any such change shall likely result in such Vessel not attaining
the required performance criteria under Article X, Owner and Builder shall agree on such
modifications of the requested change necessary in order for the Vessel to attain the required
performance criteria before such change is effected. A statement of the increase or decrease to the
Contract Price and Assigned Value, and/or any additional contract time required, as aforesaid,
shall be submitted to Owner by Builder in the form shown on Exhibit “E”, and shall be approved by
Owner in writing before any such change is made. Notwithstanding the foregoing, no change shall be
made in the general dimensions and/or characteristics of any Vessel which would diminish the
capacity of the Vessel to perform as originally intended by the Contract Documents, except by
mutual consent of the parties.

     If the Parties are unable to agree on the adjustment to the Contract Price and Assigned Value,
and/or any additional contract time required by the change directed by the Owner, Builder shall
perform the requested change and Owner shall pay Builder for such change on an actual time and
direct material cost basis using Builder’s published “Standard T&M Rates” as the same may be
changed from time to time based on Builder’s rates with the U.S. Government; provided, however, in
no event shall the rates charged Owner be less favorable than Builder’s rates to other customers.
Owner shall pay Builder’s invoices for such actual time and direct material costs for change work
in accordance with the payment terms for progress payment invoices set forth in Article II hereof.
All payments made pursuant to this paragraph (i) shall be subject to future adjustment and (ii)
shall not constitute a waiver of Owner’s rights under Article XXIII. The Builder will maintain a
daily record of labor, equipment and materials utilized in time and materials work covered under a
change and will present this record to Owner. If, at any time, a unit price or lump sum basis of
compensation can be agreed to for work being performed under this paragraph, such compensation may
be set forth in writing as a change.

ARTICLE V — LIQUIDATED DAMAGES:

     If completion and delivery of a Unit shall be delayed beyond the respective Stipulated
Delivery Date, as adjusted in accordance with the provisions of the Contract hereof, it is agreed

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that Owner will suffer damages which are difficult of ascertainment and the parties hereby
agree that Owner shall sustain, and Builder agrees to pay, as liquidated damages an amount in
accordance with the following schedule for each calendar day that actual delivery is delayed beyond
the sixteenth day following the Stipulated Delivery Date:

Day 23 through 46 — $l0,000/day

Day 47 through 131 — $12,500/day

Day 132 through 161 — $20,750/day

     In no event shall the liquidated damages payable hereunder exceed $1,900,000 per unit. Owner’s
right to such liquidated damages shall be Owner’s sole and exclusive remedy for damages or loss due
to late delivery of a Unit and Owner specifically waives all other rights or remedies at law or in
equity, for damages or loss due to late delivery of a unit, other than Owner’s right under clause
(a)(iv) of Article XX (Events of Default) in the event completion and delivery of a Unit is delayed
more than one hundred sixty one (161) days after the Stipulated Delivery Date (as adjusted in
accordance with the terms of this Contract) of the Unit.

ARTICLE VI — OWNER FURNISHED EOUIPMENT:

     Within Twenty (20) business days from the execution of this Contract, Builder shall deliver to
Owner a schedule of dates for the delivery to Builder by Owner of Owner Furnished equipment and
information (the “Schedule of Delivery of Owner Furnished Equipment”).

     If delivery by Owner to the designated shipyard of any of the components of Owner Furnished
Equipment is delayed beyond the respective scheduled dates of delivery shown on the Schedule of
Delivery of Owner Furnished Equipment, it is agreed that the Stipulated Delivery Date of the
affected Unit(s) shall be extended on a day for day basis for each day of delay of such Owner
Furnished Equipment or such other period, whether longer or shorter, as the parties may mutually
agree in writing taking into consideration the degree the Work is actually delayed by the delay of
such Owner Furnished Equipment.

     Owner shall be responsible for all costs of transportation of Owner Furnished Equipment to the
designated shipyard as well as all classification and regulatory certificates. All Owner furnished
equipment arriving at Builder’s yard shall be stored in a secure area allocated to Owner for
storage of equipment and supplies until required by Builder for installation into the Vessels.

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Such securing area shall be plainly marked to indicate Owner’s possession and ownership of
such equipment and supplies.

ARTICLE VII — INSPECTION BY OWNER’S REPRESENTATIVE:

     Builder will furnish without additional charge to Owner reasonable space at its yard(s) for
the duly authorized and designated representative(s) of Owner who shall have reasonable access to
the Work of Builder. Owner’s representative(s) shall promptly inspect as required during the
construction process and accept all workmanship and material which is in conformity with the
Contract Documents by executing an inspection release form in the form attached as Exhibit “I” and
shall with equal promptness, reject all workmanship and material which does not comply with the
Contract Documents, provided that the acceptance of such workmanship and material by Owner’s
representative shall not prejudice the rights of Owner under the provisions of Article IX
(Warranty) and Article III (Time and Conditions of Delivery and Acceptance), hereof. Interim
inspection acceptance by Owner shall be followed by final inspection acceptance by Owner after
final installation and area closeout to ensure that that final installation and finish are in
accordance with the Vessel specifications and regulatory requirements.

ARTICLE VIII — FORCE MAJEURE:

     All agreements of Builder contained in this Contract respecting the Stipulated Delivery Date
of each Unit shall be subject to extension by reason of Force Majeure, which term is hereby
declared to include all causes whatsoever beyond the reasonable control and without the fault of
the Builder. The parties agree that such causes shall include, but shall not be limited to, the
following: strikes, lockouts, or other industrial disturbances; unavailability or interruptions or
inadequacy of fuel supplies; act of God; actions or inactions of Owner; war, terrorism, preparation
for war, the requirement, urgency or intervention of Naval or Military executives or
other agencies of government; arrests and restraints of rulers and people, blockade, sabotage,
vandalism and malicious mischief, threats of vandalism and bomb scares and insurrection;
landslides, floods, hurricanes, tornadoes, earthquakes; collisions and fires; non-delivery and/or
late delivery of any Owner Furnished Equipment; unavailability or late delivery of Builder
furnished steel if such steel was ordered in a timely manner by Builder and the steel supplier(s)
had accepted the order with stipulated delivery date(s) which subsequently were not met and

10

 

delays due to changes authorized by Owner. Rain shall not be considered a Force Majeure event
unless (1) its occurrence requires a shutdown of an affected portion of the Builder’s yard where
the work hereunder is being performed prior to 12:00 noon on a regularly scheduled work day, or (2)
on the day of such rain, the majority of the then remaining work of the Unit includes painting and
such rain or other weather conditions do not permit painting. For each day on which rain meets the
requirements set forth in the preceding sentence, Builder shall be entitled to (1) day’s extension
of the Stipulated Delivery Date.

     Within thirty (30) days of knowledge of any Force Majeure event which may affect the
Stipulated Delivery Date, the party declaring a Force Majeure extension shall notify the other
party in writing and shall furnish an estimate, if possible, of the probable extent of the delay.
Force Majeure shall be reviewed quarterly by the parties and the delivery extension, if any, shall
be mutually agreed upon and it’s effect on each of the HFO Units. The parties agree to review
impacts that the HFO Units 1 thru 4 may have on HFO Units 5 thru 8. If either party fails to
notify the other party of a Force Majeure event within thirty (30) days after knowledge of the
event, such party shall be estopped from thereafter claiming Force Majeure for any period of delay
more than thirty (30) days prior to said notice.

     Notwithstanding the foregoing, Owner shall not be excused by reason of Force Majeure for
failing to pay any of Builder’s invoices when due and payable.

ARTICLE IX -WARRANTY:

     During the Builder’s Warranty Period, as hereinafter defined, for each Unit delivered
hereunder, Builder warrants (1) the material, equipment and design (exclusive of Owner Furnished
Equipment), and (2) that all labor and workmanship, including labor and workmanship for the
installation of Owner Furnished Equipment, furnished by Builder shall have been performed in a good
and workmanlike manner and that the Unit(s) are constructed with the use of good commercial
shipyard practices and procedures. The provisions set forth herein as to the liabilities of the
Builder are to apply also to all labor and workmanship furnished by any sub- contractor retained by
Builder for the performance of this Contract.

     Subject to the exceptions set forth below in this Article, Builder shall have no
responsibility whatsoever with respect to any defect, claim, or loss of a Unit or Vessel not
reported in writing to Builder within two (2) years from the Delivery Date (such period being

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hereinafter referred to as the “Builder’s Warranty Period”). Solely for purposes of this
Article IX, “Delivery Date” shall be defined as the earlier of the following: (a) fourteen (14)
days after date of the final invoice from Builder upon completion of the Unit in accordance with
the requirements set forth in Article III (a) through (e) of this Contract, or (b) the date of the
Delivery and Acceptance Certificate of the Unit.

     The Warranty granted to Owner by Builder shall extend only to those claims timely reported in
writing to Builder within such Builder’s Warranty Period. In the event Owner timely notifies
Builder of any claim covered under this Warranty, Builder will make repairs and/or replacement at
its option, at one of Builder’s yards without expense to Builder for transporting the Unit or
Vessel, or any component thereof, to or from that yard; provided, however, that if it is not
practical to have the Unit or Vessel proceed to such yard, Owner may, with prior written consent of
Builder, which consent may not be unreasonably withheld, have such repairs and/or replacement made
elsewhere, and, in such event, Builder shall reimburse Owner a sum equivalent to (i) one hundred
fifty percent (150%) of the amount Builder would have expended at its own yard at Builder’s then
prevailing rates, or (ii) the amount actually expended by Owner, whichever is less. In no event
shall Builder be responsible for any sum in excess of the cost of the repairs and/or replacement as
specified herein. The Builder’s Warranty Period for workmanship on a Unit shall be extended by one
day for each day that any warranted defect or the repair thereof covered hereunder forces the Unit
out of service and unavailable for hire beyond twenty (20) successive calendar days.

     The Builder’s Warranty Period for any equipment or materials purchased by Builder from a
supplier or manufacturer for installation in a Unit and for Builder’s workmanship shall expire upon
the later of (i) one (1) year from the Delivery Date or (ii) the expiration of the manufacturer’s
warranty with respect to such equipment or materials, but in no event later than the two (2) years
from the Delivery Date (such extended expiration date is the “Third Party Warranty Expiration
Date”). To the extent available, on the Third Party Warranty Expiration Date Builder agrees to
transfer and assign to Owner, without warranty of Builder with respect thereto, any remaining
warranties relative to material equipment and/or labor furnished by others. Should Owner be
required to enforce any such warranty, Builder will cooperate with Owner’s efforts, short of
instituting legal action on Owner’s behalf and/or incurring other legal fees.

12

 

     Nothing contained herein shall obligate Builder at any time to repair or replace any Unit or
Vessel, or any component part thereof, to the extent such repair and/or replacement is caused by
the negligent operation or maintenance of the Unit or Vessel, or its equipment, by Owner or Owner’s
agents, employees representatives or any other third party.

     With respect to the paint, Builder warrants that it will purchase paint of good marine quality
with a five (5) year manufacturer and/or supplier’s warranty and that it will apply the paint in
accordance with the manufacturer’s specifications and recommendations. The Builder’s Warranty
Period with respect to the paint applied to each Unit shall be two (2) years from the Delivery Date
(such expiration date is the “Builder’s Paint Warranty Expiration Date”). On the Builder’s Paint
Warranty Expiration Date, Builder agrees to transfer and assign to Owner, without warranty of
Builder with respect thereto, any remaining manufacturer’s or supplier’s warranties relative to the
paint applied to the Unit(s). Should Owner be required to enforce any such warranty, Builder will
cooperate with Owner’s efforts, short of instituting legal action on Owner’s behalf and/or
incurring other legal fees. In consideration of the foregoing warranties with respect to the paint,
Owner agrees to maintain at all times during the paint warranty period, detailed records of all
cargo carried in the Unit(s) and all cleaning, maintenance and repair (whether ordinary or
extraordinary) records with respect to the Unit (collectively, the “Required Records”). The
Builder’s warranty with respect to the paint shall be null and void in the event Owner fails to
maintain the Required Records in accordance with this Article IX.

     For any claim for damages to or loss of a Unit or Vessel, and/or damages to persons and/or
property (including, but not limited to claims, demands, or actions for bodily injury, illness,
disease, death, loss of service, loss of society, maintenance and cure, wages or property) made as
a result of any defect in a Unit or Vessel, or any component parts thereof, after the said
Builder’s Warranty Period, Owner shall have no claim or actions whatsoever against Builder,
regardless of any negligence, tort, fault, strict liability or otherwise of Builder, its employees
or sub-contractors, and Owner hereby waives and releases Builder and its employees and
subcontractors from and against any and all liability and any and all damages resulting therefrom,
including, but not limited to, for personal injury, death, property damage, damage to and/or loss
of a Unit or Vessel, delay, demurrage, loss of profits, loss of use, or any other consequential or
punitive damages of any kind, whether such claim is based in contract, negligence, strict
liability, or otherwise, arising out of any defect and/or negligent design, the

13

 

selection or choice of specifications and/or materials and/or component parts, manufacture,
construction, fabrication, workmanship, labor and/or installation of equipment, materials and/or
components or from any unseaworthy condition or any other defective condition of a Unit or Vessel,
it being specifically understood and agreed that any such defects reported and/or occurring after
the Builder’s Warranty Period and all damages, loss of profits, demurrages, delay, losses of use or
other consequential damage of any kind whatsoever resulting therefrom, shall not be the
responsibility of Builder, but shall be borne exclusively by Owner; provided, however, Builder
understands and agrees that Owner cannot release Builder from or waive claims made in connection
with the above by employees of Owner or by third parties and with respect to such claims made Owner
and Builder expressly reserve all rights, remedies and defenses.

     THIS WARRANTY IS EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION ANY WARRANTY OF MERCHANT ABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR USE
AND THE REMEDY SET FORTH IN THIS ARTICLE IS OWNER’S SOLE AND EXCLUSIVE REMEDY FOR BREACH OF
WARRANTY AND IS EXPRESSLY IN LIEU OF ALL INDIRECT, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES.

ARTICLE X — PERFORMANCE WARRANTY:

(a) Speed: The parties recognize that Owner will be damaged by a decrease in Unit speed
below the Guaranteed Speed (as defined below). Because such damages are difficult to
ascertain, the parties agree that, in lieu of any other damages or claims arising in
connection with the speed of the Unit, the following provisions will apply:

	 	(i)	 	The guaranteed speed of the Unit (calculated in accordance with
Exhibit “H” attached hereto) is twelve (12) knots in a sea up to and including
Beaufort Scale Force 5 (the “Guaranteed Speed”).
	 
	 	(ii)	 	If the Unit’s maximum speed, as determined in accordance with
Exhibit “H”, is less than 11.5 knots, and it is proven that the Owner furnished
engines and gears are performing in accordance with the manufacturer’s
performance curves current at the effective date of this Contract, Builder
shall make any required adjustments to the Unit to achieve a minimum

14

 

	 	 	 	speed of 11.5 knots (Minimum Required Speed) before tendering the Unit for
Final Acceptance and Delivery.
	 
	 	(iii)	 	If the Unit’s maximum speed, as determined in accordance with
Exhibit “H” and after Builder has made adjustments to the Unit to achieve speed
prior to delivery, is established to be more than two tenths (2/10) of a knot
below the Guaranteed Speed, Builder shall pay to Owner the sum of FIFTY
THOUSAND DOLLARS AND NO CENTS (US$50,000.00) as liquidated damages, and not as
a penalty, for each one tenth (1/10) of a knot deficiency in excess of the
first two tenths (2/10) of a knot deficiency, or portion thereof (the “Speed
Liquidated Damages”), not to exceed a total of ONE HUNDRED FIFTY THOUSAND
DOLLARS AND NO CENTS (US$150,000.00).

(b) Fuel Consumption: The parties recognize that Owner will be damaged by an increase in
fuel consumption above that which was guaranteed by Builder in the Contract Documents.
Because such damages are difficult to ascertain, the parties agree that, in lieu of any
other damages or claims arising in connection with the fuel consumption of the Unit, the
following provisions shall apply:

	 	(i)	 	The guaranteed total per diem average fuel consumption for
main propulsion power only (calculated in accordance with Exhibit “H” attached
hereto), excluding generators is 7,950 US Gallons Heavy Fuel Oil 380 cSt/50
deg C, and a fuel net calorific heat value of 42,700 kilojoules per kilogram,
(in accordance with engine manufacturer’s specifications used for testing and
developing performance curves). This rate of consumption is based on an
average speed of twelve (12) knots (or lesser speed if a speed deficiency
cannot be corrected by Builder) in the average of the optimally ballasted and
loaded condition (0.86 specific gravity cargo) in a Beaufort Scale Force 5
condition.

(ii) If, however, a Unit’s fuel consumption exceeds the guaranteed rate, or the adjusted
rate as necessary for EPA Tier 2 modifications, by more than two hundred (200) gallons
per day and it is proven that the Owner Furnished Engines are performing in accordance
with the engine manufacturer’s

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	 	 	 	published specific fuel consumption value, including tolerances current at the
effective date of this Contract, Builder shall pay to Owner the sum of TEN
THOUSAND DOLLARS AND NO CENTS (US$10,000.00) per each one percent (1%) above
the guaranteed amount Not to exceed FIFTY THOUSAND DOLLARS AND NO CENTS
(US$50,000.00).

Owner’s right to such liquidated damages set forth in this Article shall be Owner’s sole and
exclusive remedy for breach of the Performance Warranties set forth herein.

ARTICLE XI — INSURANCE:

	 	 	 	Builder, at its sole cost and expense (including the cost of all deductibles), shall procure
and maintain in force during the entire period of construction, including launching, trials
and demonstrations, until Builder completes entirely its obligations under this Contract,
the following insurance:

	 	a)	 	Workers’ Compensation Insurance, covering applicable statutory benefits in the
State where work is being performed, and Employer’s Liability Insurance in an amount of
at least ONE MILLION DOLLARS AND NO CENTS (US$1,000,000.00). The policy shall be
endorsed to cover Federal benefits under the U.S. Longshore and Harbor Workers
Compensation Act. The policy shall be endorsed for maritime coverages for bodily injury
to, or death of, a master or member of the crew of the Unit, including transportation,
wages and maintenance and cure. This insurance shall be endorsed to waive certain rights
of subrogation against Owner only to the extent that Builder is obligated to indemnify
Owner pursuant to Article XIII (Liability and

Indemnity).
	 
	 	b)	 	Public Liability Insurance, on a per occurrence basis, endorsed to cover on the
premises operations, physical injury, “in rem” endorsement, watercraft exclusion
deleted (to the extent applicable); with combined limits of at least TEN MILLION
DOLLARS AND NO CENTS (US$10,000,000.00) per occurrence. This insurance shall name Owner
as Additional Assured and waive certain rights of subrogation against Owner and the
Unit, but only to the extent that Builder is obligated to indemnify Owner pursuant to
Article XIII (Liability and Indemnity).

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	 	c)	 	Builder shall also provide Builder’s Risk Insurance in an amount at least equal
to the completed Contract Price, including the value of Owner Furnished Equipment, and
financing costs, if any, (provided that Owner shall be responsible for any incremental
premiums relating to the Owner Furnished Equipment and financing costs). Owner shall
provide advance notice to Builder setting forth the dates that such equipment and
materials are to be delivered to Builder’s yard. This insurance shall also include
Protection and Indemnity coverage with combined limits of at least TEN MILLION DOLLARS
AND NO CENTS (US$10,000,000.00) per occurrence. This insurance shall be on a London
Institute Clauses for Builders Risks (1/6/88) or similar form, and shall include
coverage for faulty construction, tests and trials, and automatic full coverage for
Owner Furnished Equipment. This insurance shall name Owner as an Additional Assured and
a Joint Loss Payee, as their interests may appear and shall waive certain rights of
subrogation against Owner and the Unit. Notwithstanding anything contained in this
Contract to the contrary, the Builder’s Risk Insurance required hereunder shall expire
and all risk of loss of each Unit shall transfer to Owner upon the date of the Delivery
and Acceptance Certificate for each Unit.

     The aforesaid policies (i) shall be endorsed to provide Owner with thirty (30) days written
notice prior to cancellation or reduction in coverage required by this Contract, and (ii) shall be
primary to any insurance carried by Owner. If Builder fails to procure or allows to lapse any
policies required under this Article XI and fails to obtain such insurance within five (5) days of
written notice by Owner requesting such insurance, then Owner shall have the right to obtain such
insurance and any expenses incurred by Owner in obtaining such insurance shall be paid by Builder.
Owner’s “extension of benefits” clause shall apply including, but not limited to Owner; Crowley
Maritime Corporation; and any of their affiliates formed or to be formed to own or operate the
Vessels as well as all directors, officers, employees and agents of said entities. Owner shall
notify Builder with the names of the affiliates formed or to be formed to own or operate the Unit.
Within ten (10) business days of execution of this Contract, Builder shall provide Owner with
Certificates of Insurance. All insurance shall provide that there shall be no recourse against the
Owner or its assignees for the payment of any premiums or commissions and that no cancellation of
the insurance, for any reason whatsoever, shall become effective unless and until

17

 

ten (10) days prior written notice has been given by the relevant brokers or insurers to the
Owner.

     If Builder fails to timely procure said Certificates of Insurance within thirty (30) days
following the execution of this Contract Owner, upon notice to Builder, shall be entitled to
terminate this Contract and receive a refund of all amounts previously paid to Builder. Owner’s
failure to timely provide such notice to Builder shall constitute a waiver of its rights under this
paragraph.

ARTICLE XII — BUILDER GUARANTEE:

     Upon Delivery and Acceptance of HFO Unit No. 3 under that certain Vessel Construction Contract
dated the twenty-third day of August 2005, between Builder and Owner (the “Initial HFO ATB
Construction Contract”) and payment of Owner’s Contract Signing Down Payments hereunder for HFO
Units 5, 6, 7 and 8, Builder shall procure and provide to Owner Performance and Payment Bonds, in
the form and from a surety or insurance company selected by Builder and acceptable to Owner for the
sum of SEVENTEEN MILLION FIVE HUNDRED THOUSAND AND 00/100 U.S. DOLLARS (US$17,500,000.00)
(hereinafter the “Unit Penal Limit”) to secure HFO Unit No. 5 hereunder. Upon Delivery and
Acceptance of HFO Unit No. 4 under the Initial HFO ATB Construction Contract, Builder shall procure
and provide to Owner equivalent Performance and Payment Bonds, to secure HFO Unit No. 6 hereunder.
Upon the execution of the Delivery and Acceptance Certificate for HFO Unit No. 5 hereunder, Builder
shall secure HFO Unit No. 7 for the Unit Penal Limit in accordance with the terms agreed for HFO
Units No. 5 and 6 and, likewise, upon Delivery and Acceptance of HFO Unit 6 hereunder, Builder
shall secure HFO Unit No. 8 equivalently As depicted on the following illustration.

18

 

BOND RELEASE / ROLL-OVER

Contract Dates

19

 

     Each such Performance and corresponding Payment Bond for the Unit Penal Limit shall be reduced
to ONE MILLION FIVE HUNDRED THOUSAND 00/100 U.S. DOLLARS (US$l,500,000.00) upon the execution of
the Delivery and Acceptance Certificate for the Unit to which they secure and, thereafter, shall
expire and be released by Owner upon the expiration of the Builder’s Warranty Period for such Unit.
The premium or cost of the Performance and Payment Bonds shall be for the account of Owner at the
face value of the invoice to Builder from the Surety Company selected by the Builder.

     These sureties, in the combined penal sum of THIRTY FIVE MILLION AND 00/100 U.S. DOLLARS
(US$35,000,000.00) during the building period of any two Units, along with the bonds covering the
Builder’s Warranty Period for each Unit, shall secure the complete performance by Builder of its
obligations under this Contract.

     In the event of Default of Builder on any Unit as defined in Article XX hereof, Owner shall be
entitled to make a claim for the affected Unit(s) as a result of the Event of Default. Owner and
Builder agree that certain progress payments, as required by Tug Exhibits A-5-T, A-6-T, A-7-T and
A-8-T, Barge Exhibits A-5-B, A-6-B, A-7-B and A-8-B shall be delayed or withheld by Owner (in
accordance with such Exhibits) in the event any Unit secured by Performance and Payment Bonds is
not delivered on schedule; provided, further that no additional milestone payments shall be
invoiced by Builder or paid by Owner unless and until Performance and Payment Bonds are available
and attach to the Unit for which the additional milestone payment(s) otherwise may be due in
accordance with this Contract.

ARTICLE XIII — LIABILITY AND INDEMNITY:

	(a)	 	Except as otherwise set forth in this Contract and except for risks and liabilities arising
in connection with the acts or omissions of Owner, Owner’s other contractors (except Builder
and its subcontractors), subcontractors, vendors, agents, employees or representative, Builder
will assume all risks and liabilities, during the construction of the Units and until
completion and delivery of each Unit to Owner for all loss or damage occurring to each Unit
and its components, including, without limitation, Owner Furnished Equipment while such
equipment is on Builder’s premises.

20

 

	(b)	 	Builder shall indemnify, defend and save harmless Owner, its affiliates, and their officers,
directors, employees and representatives from any and all third party liens, expenses, claims
and demands whatsoever (including costs and attorneys’ fees) against Owner or against the
Vessels in any manner related to the Work to be performed by Builder under this Contract.
Owner shall indemnify, defend and save harmless Builder, its affiliates, and their officers,
directors, employees and representatives from any and all third party liens, expenses, claims
and demands whatsoever (including costs and attorneys’ fees) against Builder or against the
Vessels in any manner related to Owner’s obligations under this Contract or the obligations of
its Builders (except Builder and its subcontractors, vendors, agents, employees and
representatives), subcontractors, vendors, agents employees or representatives.

	(c)	 	To the fullest extent permitted by applicable law, the Builder shall be responsible for and
shall save, indemnify, protect, defend and hold harmless the Owner, its affiliates and their
respective officers, employees, agents or representatives (“Owner Group”) from and against all
liabilities, losses, damages, liens, causes of action, suits, claims, judgments, expenses and
costs (including attorney fees and court costs), of every nature, kind and description that
Builder, its affiliates, subcontractors and their respective officers, employees, agents or
representatives (“Builder Group”) may hereinafter suffer, incur, or pay by reason of bodily
injury, illness, or death, or any loss of or damage to property sustained or purported to have
been sustained by any member of the Builder Group regardless of the cause, including the
negligence (joint, sole or concurrent, active or passive), fault, strict liability, tort or
breach of contract of any member of the Owner Group or unseaworthiness of its respective
vessel(s).

	(d)	 	To the fullest extent permitted by applicable law, the Owner shall be responsible for and
shall save, indemnify, protect, defend and hold harmless the Builder Group from and against
all liabilities, losses, damages, liens, causes of action, suits, claims, judgments, expenses
and costs (including attorney fees and court costs) of every nature, kind and description that
any member of Owner Group may hereinafter suffer, incur, or pay by reason of bodily injury,
illness, or death, or any loss of or damage to property sustained or purported to have been
sustained by any member of the Owner Group regardless of the cause, including the negligence
(joint, sole or concurrent, active or passive), fault, strict

21

 

	 	 	liability, tort or breach of contract of any member of the Builder Group or unseaworthiness
of its respective vessel(s).
	 
	(e)	 	Except as provided in Article IX, Owner shall indemnify, defend and save Builder harmless
from and against liabilities of any nature whatsoever (including costs and attorneys fees) to
the extent arising out of or in connection with the acts or omissions of Owner, its agents,
representatives and other contractors (exclusive of Builder and its subcontractors, vendors,
agents, employees and representatives and representatives) relating to possession, ownership,
operation and maintenance of any Unit from and after the time of delivery of the Unit or Owner
in conformance with this Contract.

ARTICLE XIV — NO CONSEQUENTIAL DAMAGES:

     NEITHER OWNER NOR BUILDER, THEIR VESSELS, AFFILIATES AND THEIR OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES AND ASSIGNS (INDIVIDUALLY, THE “RELEASED PARTY” AND COLLECTIVELY, THE “RELEASED
PARTIES”) SHALL IN ANY EVENT BE RESPONSIBLE TO THE OTHER FOR ANY INDIRE.CT OR CONSEQUENTIAL
DAMAGES, INCLUDING WITHOUT LIMITATION LOSS OF PROFITS OR LOSS OF USE, WHETHER ARISING IN WHOLE OR
IN PART FROM (i) THE ACTIVE OR PASSIVE NEGLIGENCE OF THE RELEASED PARTY, (ii) THE ACTS OR OMISSIONS
OF SUCH RELEASED PARTY FOR WHICH IT IS STRICTLY LIABLE; OR (iii) OTHER FAULT OF SUCH RELEASED
PARTY, INCLUDING WITHOUT LIMITATION BREACH OF THIS CONTRACT, EVEN IF THE POSSIBILITY OF SUCH
DAMAGES IS FORESEEABLE BY SUCH RELEASED PARTY.

ARTICLE XV — PROHIBITION OF LIENS:

Neither Owner nor Builder shall place, allow or create any liens, charges or encumbrances on, or
security interests in or pledges of (herein referred to individually as a “Lien” and collectively
as “Liens”) any Unit, its component parts or any Owner Furnished Equipment; provided Owner may
collaterally assign this Contract and grant a security interest to the U.S. Maritime Administration
(“MARAD”) in connection with MARAD guarantee of Owner’s Title XI bonds issued or to be issued to
finance construction of the Unit, or to any other financial institution. Any Lien so placed,
allowed or created shall be forthwith released by Owner or Builder, as the

22

 

case may be; provided, however, that this Article XV shall not apply to inchoate liens for taxes
and wages not then due, or to liens of Builder to secure payment to Builder for amounts then due
and payable. If any lien not so excepted is placed, filed or asserted against a Unit, a Vessel or
against any other materials, equipment, supplies, parts or personal property belonging to Owner or
intended for a Unit or for a Vessel, then Owner or Builder, as the case may be, shall notify the
other party of the existence of same as soon as reasonably possible, and the other shall, within a
reasonable time, cause same to be released or discharged; provided however, that Owner or Builder,
as the case may be, may, in good faith, contest any such liens or the debts to which they may
relate, but in the event of any such contest, Owner or Builder, as the case may be, shall ensure
the release of such liens by bonding or otherwise and shall prevent the existence of such lien or
debt from delaying the work hereunder. Upon either Owner’s or Builder’s failure to do so, the other
party may, in order to prevent a delay in the work hereunder or delivery of the Unit or of clear
title, pay any and all such sums as may be required in order to cause such lien to be released and
Owner or Builder, as the case may be, shall forthwith promptly reimburse the other for such
payment. Notwithstanding any other provision of this Contract to the contrary, Contractor and Owner
agree that Owner shall have joint title to, and/or contractual third party beneficiary rights in
the materials and the components of each Vessel that are purchased by Contractor in accordance with
the Down Payments, as required by Tug Exhibits A-5-T, A-6-T, A-7-T and A-8-T, Barge Exhibits A-5-B,
A-6-B, A-7-B and A-8-B, until final payment of the full Contract Price and final delivery of the
Vessel to Owner at which time Contractor’s interest shall cease. Provided, further, that
Contractor shall use its best efforts to cause the seller’s of such materials and components
purchased with any Down Payments to acknowledge Owner’s vested interest therein.

ARTICLE XVI — TAXES:

     Any transportation, sales, use or other tax (exclusive of taxes arising out of or in
connection with the making and execution of this Contract the building of the Unit, the importation
of any materials or parts, other than Owner Furnished Equipment, and income tax otherwise payable
by Builder, which shall be the sole responsibility of the Builder) imposed by any governmental
agency, in connection with the construction or delivery of any Unit or any component part thereof,
and any personal property tax which may be levied or imposed with

23

 

respect to any Unit or any component part thereof, shall be paid by Owner. Builder agrees that
it will not pay any such tax on behalf of Owner, or concede any liability on behalf of Owner for
same, without prior notice to Owner.

ARTICLE XVII — PATENTS:

     Builder agrees to indemnity, defend (including payment of attorney’s fees and costs), hold and
save harmless Owner against claims of third parties for damage sustained by reason of the
infringement of the patent rights with respect to materials, designs, processes, machinery,
equipment, and hull forms selected and built by Builder in connection with construction of the
Units. Owner agrees to indemnity, defend (including payment of attorney’s fees and costs), hold and
save harmless Builder against claims of third persons for damages sustained by reason of
infringement of patent rights with respect to Owner Furnished Equipment, designs and processes
supplied or specifically acquired by Owner or required by any plans and specifications furnished by
Owner in connection with construction of the Units.

ARTICLE XVIII — USE OF THE PLANS AND SPECIFICATIONS:

     Contract Drawings and working drawings with all proprietary rights thereto shall remain the
property of Builder and cannot be used by Owner to build a sister ship without permission from, and
compensation to Builder; provided, however, Builder shall make such Contract Drawings and working
drawings available to Owner at Owner’s request for the purposes of repair and maintenance on the
Unit(s). Builder also agrees not to provide exact details of the Unit arrangement or outfit to,
nor build a duplicate Unit for, any other party without the prior written approval of Owner, which
shall not be unreasonably withheld. No provision of this Article XIX shall allow Builder to claim
ownership of any Owner supplied drawings or data. All plans, designs and engineering and design
data supplied by the Owner to the Builder that are the property of the Owner shall remain the
property of the Owner and such plans, designs and engineering and design data may be used by the
Builder only in such manner as is permitted by this Contract.

ARTICLE XIX — BANKRUPTCY:

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     If either party hereto shall be adjudicated a bankrupt or an order appointing a receiver of it
or of the major part of its property shall be made or an order shall be made approving a petition
or answer seeking its reorganization under the Federal Bankruptcy Code, as amended, or either party
shall institute proceedings for voluntary bankruptcy or apply for or consent to the appointment of
a receiver of itself or its property, or shall make an assignment for the benefit of its creditors,
or shall admit in writing its inability to pay its debts generally as they become due, for the
purpose of seeking a reorganization under the Federal Bankruptcy Code, or otherwise, then in anyone
or more of such events, the other party to this Contract shall have the option forthwith to
terminate this Contract to all intent and for all purposes by giving written notice of its
intention so to do, subject, however to all obligations and liabilities of each party under the
Contract Documents, including but not limited to title to the Unit(s) vesting in Owner pursuant to
Article III (Time and Conditions of Delivery and Acceptance; Title). Any termination of this
Contract made pursuant to the provisions of this Article XIX shall not relieve either party from
any accrued obligations hereunder due and owing at the date of such termination.

ARTICLE XX — EVENTS OF DEFAULT:

	a)	 	Any of the following occurrences shall constitute an event of Default of Builder under this
Contract:

(i) The failure of Builder to perform any of the material covenants, agreements or
undertaking of this Contract on its part to be performed, including, but not limited
to, the failure to make prompt payment for all labor, materials, services and other
charges which are to be paid by Builder under this Contract; provided Owner shall
have given Builder written notice of such failure and Builder (a) shall not, within
ten (10) business days after the date of receipt of such notice have remedied any
payment failure by payment or, in the event of dispute, by the posting of bond or
other adequate security, or (b) shall not, within fifteen (15) business days after
the date of receipt of such a notice, have cured, or shown to Owner’s satisfaction
that it has taken steps sufficient to remedy promptly, any such other event of
default not relating to payment.

(ii) Builder being adjudicated a bankrupt or an order appointing a receiver of it
or of the major part of its property shall be made or an order shall be made

25

 

approving a petition or answer seeking its reorganization under the Federal
Bankruptcy Code, as amended, or if Builder should institute proceedings for
voluntary bankruptcy or apply for or consent to the appointment of a receiver of
itself or its property, or shall make an assignment for the benefit of its
creditors, or shall admit in writing its inability to pay its debts generally as
they become due, for the purpose of seeking a reorganization under the Federal
Bankruptcy Code, or otherwise.

(iii) A Unit has not been tendered for delivery in accordance with the requirements
set forth in Article ill (a) through (e) this Contract within one hundred sixty one
(161) days after the Stipulated Delivery Date, as adjusted for all allowable Force
Majeure extensions, as defined in Article VII, all change order extensions and any
other extension allowable under this Contract.

     In the event that anyone or more of the events of default specified herein shall have
occurred, upon payment to Builder of all progress payments then due to Builder and all costs
incurred to date by Builder in construction of the Unit(s) that are not included in the progress
payments due to Builder, provided that such amounts shall not exceed that percentage of the
Contract Price that is equal to the percentage completion of the construction of the Unit to date
by Builder, Owner shall have right, at its option, to (1) exercise its rights under the terms of
Article XII (BUILDER GUARANTEE) hereof, and (2) terminate this Contract by providing written notice
to Builder and to have the Unit(s) completed by another builder. If so requested by Owner, Builder
shall (a) in the least expensive manner, complete all work required to permit the Vessels to be
safely removed from the Builder’s yard, (b) remove its employees, agents and Builder’s
subcontractors, together with their equipment, from the Vessel(s) and (c) render all necessary
assistance to the Vessels in leaving the Builder’s yard at the earliest moment convenient to
Builder. If the unpaid balance of the Contract Price exceeds Owner’s reasonable auditable costs of
completion, such excess shall be paid to Builder.

     Notwithstanding anything contained in this Contract to the contrary, should Owner terminate
this Contract pursuant to the preceding paragraph, Owner shall have ninety (90) days from such
termination to notify Builder of any defective materials or workmanship which were both (i)
installed or completed by Builder and (ii) represented in the amount paid to Builder upon such
termination. In no event shall Builder be liable to Owner for any sum in excess of the cost

26

 

of repairs or replacements of the materials or workmanship, nor shall Builder be obligated to
repair or replace any material or workmanship, where such repair or replacement is caused by Owner,
its other contractors (except Builder), subcontractors or employees. Builder shall have no
responsibility whatsoever for such defective materials or workmanship if Owner does not notify
Builder within the period set forth above in this Article XX. Thereafter, the Builder shall be
relieved of all warranty obligations under this Contract.

     The rights conferred upon Owner under the terms of this Article XX and elsewhere in this
Contract shall be its sole and exclusive remedies at law or in equity upon the happening of the
events of default specified herein, or upon any failure on the part of Builder to perform the
material undertakings, agreements and covenants on its part to be performed hereunder. Owner’s
failure to exercise the rights conferred upon it hereunder in anyone or more instances of the
occurrence of an event of default as hereinbefore defined, shall not constitute a waiver of all
other rights due to Owner under this Contract.

	 	b)	 	Any of the following occurrences shall constitute an event of default of Owner under
this Contract:

(i) The failure of Owner to perform any of Owner’s material obligations hereunder
including, but not limited to, payment of each of Builder’s Progress Payments, in
accordance with Article II hereof provided Builder shall have given Owner written
notice of such failure and Owner (a) shall not, within ten (10) business days after
the date of receipt of such notice, have remedied any payment failure by payment or,
in the event of dispute, by the posting of bond or other adequate security or (b)
shall not, within fifteen (15) business days after the date of receipt of such a
notice, have cured or shown to Builder’s satisfaction that it has taken steps
sufficient to remedy promptly any such other event of default not relating to
payment.

(ii) Owner being adjudicated a bankrupt or an order appointing a receiver of it or
of the major part of its property shall be made or an order shall be made approving
a petition or answer seeking its reorganization under the Federal Bankruptcy Code,
as amended, or if Builder should institute proceedings for voluntary bankruptcy or
apply for or consent to the appointment of a receiver of itself or its property, or
shall make an assignment for the benefit of its creditors,

27

 

or shall admit in writing its inability to pay its debts generally as they become
due, for the purpose of seeking a reorganization under the Federal Bankruptcy Code,
or otherwise.

     In the event one or more of the foregoing events of default of Owner shall have occurred,
Builder may, at its option:

(a) Terminate the Contract, reserving to Builder all rights and claims against Owner
for loss and/or damage, and either sell any Vessel to another party applying the
proceeds of such sale against amounts owed Builder by Owner and other damages caused
by Owner’s default. If the proceeds of such sale do not cover such damages and sums
owed, then Builder may file a legal action against Owner in the applicable U.S.
Federal Court to recover the balance not covered by the proceeds of such sale. Any
proceeds of such sale in excess of amounts owed Builder, including Builder’s costs
of termination and Vessel disposal, shall be paid over to the Owner.

(b) Suspend performance of work unless and until such event of default is cured
by Owner (which right of suspension shall be in addition to any other right which
Builder may have). In the event of suspension, Owner shall pay to Builder all costs
and expenses related to such suspension and the Stipulated Delivery Date of each
affected Unit shall be extended one day for each day of such suspension.

(c) Complete the Unit(s) pursuant to this Contract and tender it for delivery
and full payment as provided herein, reserving to Builder all rights and claims
against Owner for loss and/or damage, or sell the Unit to another party applying the
proceeds as set out in (ii)(a) above.

     The rights conferred upon Builder under the terms of this Article XX and elsewhere in this
Contract shall be its sole and exclusive remedy at law or equity upon the happening of the events
of default specified herein, or upon any default on the part of Owner to perform the material
undertakings, agreements and commitments on its part to be performed hereunder. Builder’s failure
to exercise the rights conferred upon it hereunder in anyone or more instances of the occurrence of
an event of default, as hereinbefore defined, shall not constitute a waiver of all other rights
available to Builder under this Contract.

28

 

ARTICLE XXI — NOTICES:

     Notices required by this Contract to be given by Owner to Builder or to be given Owner by
Builder shall be in writing and will be delivered in person or by registered mail return receipt
requested, or by overnight courier service providing evidence of receipt, to Builder or Owner, or
the designated representative of either, as the case may be.

     Notices to Builder shall be addressed to: Mr. Boyd E. King, Chief Executive Officer, VT Halter
Marine, Inc., 900 Bayou Casotte Parkway, Pascagoula, MS 39581.

     Notices to Owner shall be addressed to: Mr. Edward Schlueter, Vice President, Vessel
Management Services, Inc., 9487 Regency Square Boulevard, Jacksonville, FL 32225. In all matters
relating to this Contract except warranty claims, which are covered by Article IX, Warranty, the
parties will be represented by none other than the following named persons Mr. Edward Schlueter for
the Owner and Mr. Boyd E. King for the Builder.

     Each party agrees that at least one of its named representatives will be available for
consultation during normal working hours. Both parties agree that no one other than the named
individuals shall be considered as an agent of either party for making of admissions or giving of
instructions. Except as herein authorized, no change or modification in this Contract or its
specifications shall be valid or binding on either party unless the same is in writing and signed
by one of the above designated representatives of each party. Any change in the “Contract Price”
resulting from change in specifications shall be agreed upon between Builder and Owner in writing
in advance.

     Any other person may be designated to act for either party upon written notice of such
designation accomplished in accordance with the provisions of this Article.

ARTICLE XXII – CONSTRUCTION:

     The headings of the Articles, sections or other provisions have been inserted as a convenience
for reference only, and are not to be considered in any construction or interpretation of this
Contract. If any discrepancy or conflict exists between the provisions of this Contract, the
Specifications, and the Plans, then to the extent of such discrepancy or conflict only, the
Contract (including the Exhibits) shall prevail, but in all other respects the Specifications and
the Plans shall be in full force and effect. If there is any discrepancy or conflict between the
Specifications

29

 

and the Plans, then to the extent of such discrepancy or conflict only, the Specifications shall
prevail but in all other respects the Plans shall be in full force and effect.

     The Builder shall be responsible for correcting Builder’s errors or deficiencies in Builder
prepared shop or production drawings at no increase in the Contract Price, provided such errors or
deficiencies were not caused by errors in (i) Owner Furnished Equipment, (ii) Owner Furnished
Equipment or other vendor information furnished by the Owner, or (iii) any other designs,
information or processes furnished by the Owner.

ARTICLE XXIII — CHOICE OF LAW AND DISPUTE RESOLUTION:

     This Contract shall be construed and enforced in accordance with the laws of the State of New
York, U.S.A. Disputes arising prior to delivery of a Unit concerning the Specifications, Plans and
Drawings, and other technical disputes related to construction of the Unit shall be resolved by
arbitration as set forth in this Article XXIII. The arbitration shall be in Houston, Texas before
the American Bureau of Shipping (the “Technical Arbitrator”). The Technical Arbitrator shall
promptly arbitrate such dispute, and any expense of the Technical Arbitrator (excluding attorneys’
fees) in connection with the resolution of such technical disputes shall be paid by the party
against which the adverse decision is rendered.

     All other disputes arising out of the Contract or the Work shall be settled by binding
arbitration in Houston, Texas in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, provided, any arbitration instituted pursuant to this Article XXIII shall
be subject to the Federal Rules of Civil Procedure and the Federal Rules of Evidence, including the
provisions of such rules governing production of evidence and discovery. The arbitrators shall be
bound by the provision of this Contract where applicable and shall have no authority to alter any
such provision in any way. Any decision, award or remedy by the arbitrators that is in
contravention of the provisions of this Contract, including but not limited to the limitations on
consequential damages, punitive damages, liquidated damages and warranty, shall not be binding on
the parties hereto.

ARTICLE XXIV — ASSIGNMENT:

     Subject to the terms and conditions contained herein, this Contract, including all rights
under Article IX, Warranty, the benefit of any payments made to Owner hereunder and title to all

30

 

Owner-Furnished Equipment going into the construction of the Vessel, may be assigned by Owner
to any related or affiliated company of Owner.

     An assignment by Owner to any company or entity not affiliated or related to Owner may only be
made after Owner has obtained Builder’s prior written consent, which consent shall not be
unreasonably withheld.

ARTICLE XXV — PARENT GUARANTEES:

     Crowley Maritime Corporation, a Delaware corporation and parent company of Owner, shall
execute a Parent Guaranty of Owner’s obligations in the form attached as Exhibit “G”.

ARTICLE XXVI — PRODUCTION SCHEDULE:

     Within Twenty (20) days from the receipt of the Down Payment from Owner, Builder shall deliver
to Owner a production schedule (the “Production Schedule”) which includes projected dates of
Payment Schedule events. Should Builder believe that a revision to the Production Schedule is
required, Builder shall have the right to revise the Production Schedule upon notice to Owner.

ARTICLE XXVII — COOPERATION WITH OWNER’S LENDER:

     The Builder agrees to cooperate with the Owner and Owner’s lender(s) in satisfying any
reasonable requirements for the financing of the Units, provided however that the Builder shall not
be obligated to alter any material provisions of this Contract.

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ARTICLE XXVIII — MISCELLANEOUS:

     The Contract Documents constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, between the parties hereto. The invalidity or
unenforceability of any phrase, sentence, clause or section in this Contract shall not affect the
validity or enforceability of the remaining portions of this Contract, or any part thereof.

     IN WITNESS WHEREOF, the parties hereto have executed this Contract as of the day and year first
above written.

	 	 	 	 	 	 	 
	WITNESSES:	 	BUILDER:	 	 
	 
	 	 	 	 	 	 
	/s/ Sid Mizell	 	VT HALTER MARINE, INC.	 	 
	 

	 	 	 	 	 	 
	/s/ Rick Zubic

	 	By:
	 	/s/ Boyd E. King	 	 
	 

	 	 	 	 

BOYD E. KING
	 	 
	 

	 	 	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	WITNESSES:	 	BUILDER:	 	 
	 
	 	 	 	 	 	 
	/s/ Sid Mizell	 	VT HALTER MARINE, INC.	 	 
	 

	 	 	 	 	 	 
	/s/ Rick Zubic

	 	By:
	 	/s/ William E. Skinner	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	WILLIAM E. SKINNER	 	 
	 

	 	 	 	Chief Operating Officer	 	 
	 
	 	 	 	 	 	 
	WITNESSES:	 	OWNER:	 	 
	 
	 	 	 	 	 	 
	/s/ Arthur F. Mead III	 	VESSEL MANAGEMENT SERVICES, INC.	 	 
	 
	 	 	 	 	 	 
	/s/ Jennifer Pope

	 	By:
	 	/s/ Edward J. Schlueter	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	EDWARD J. SCHLUETER	 	 
	 

	 	 	 	Authorized Agent	 	 

32

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