AMENDMENT NO. 1 TO SHIPBUILDING CONTRACT
(Hull 003)
THIS AMENDMENT NO. 1 TO SHIPBUILDING CONTRACT is made as of February
18, 2005, by and between KVAERNER PHILADELPHIA SHIPYARD INC., a corporation
organized under the laws of Pennsylvania, having its principal office at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "BUILDER"), and ▇▇▇▇▇▇ NAVIGATION
COMPANY, INC., a corporation organized under the laws of Hawaii, having its
principal office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "BUYER").
R E C I T A L S
WHEREAS, the parties entered into that certain Shipbuilding Contract
dated as of February 14, 2005 for the purchase one (1) Philadelphia CV 2600 type
container vessel, designated as Builder's Hull No. 003 (the "Shipbuilding
Contract"); and
WHEREAS, the parties wish to amend the Shipbuilding Contract to correct
a few minor technical errors and to incorporate additional language agreed to by
the parties.
NOW, THEREFORE, in consideration of the foregoing premises, and for
other good and valuable consideration, the receipt and adequacy of which are
acknowledged, the parties hereby agree to amend the Shipbuilding Contract as
follows:
1. Description of Vessel. Paragraph 1 of Article I of the Shipbuilding
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Contract is hereby amended by deleting the reference to "January 21, 2005" in
the fifth line and replacing it with "February 3, 2005."
2. Contract Price. Paragraph 1(a) of Article II is hereby deleted in
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its entirety and replaced with the following text:
"The purchase price of the VESSEL is ONE HUNDRED FORTY FOUR MILLION
THREE HUNDRED AND NINETY-ONE THOUSAND DOLLARS ($144,391,000) plus the
cost incurred by the BUILDER with respect to the construction period
financing for the VESSEL as provided for in paragraph (c) below, net
receivable by the BUILDER, which is exclusive of the BUYER's Supplies
as provided in Article XVIII hereof and shall be subject to upward or
downward adjustment, if any, as hereinafter set forth in this Contract
(herein called the "Contract Price"). The Contract Price shall be paid
upon delivery of the Vessel by wire transfer to an account specified by
the BUILDER; provided that such payment shall be subject to (i)
deferral of payment of the amounts specified on the PROTOCOL OF
DELIVERY AND ACCEPTANCE; (ii) the holdback described in Paragraph 4(f)
of Article IX; (iii) disputed amounts deposited in the Disputes Escrow
Account (as defined herein); and (iv) less any reduction in the
Contract Price pursuant to Article III hereof."
3. Effective Date.
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(a) Paragraph 3(d) of Article II of the Shipbuilding Contract is hereby
amended by deleting the reference to "Article V" in the second line and
replacing it with "Article IV."
(b) Paragraph 3(f) of Article II is hereby deleted in its entirety and
replaced with the following text:
"By February 18, 2005, the BUILDER shall provide the BUYER with a
guarantee of Kvaerner ASA of (i) the BUILDER's indemnification
obligations under Paragraph 2 of Article XXI hereof, and (ii) the
BUILDER's obligation under that certain Right of First Refusal
Agreement dated of even date herewith signed by the parties relating to
certain rights with respect to future CV 2600 and CV 2500 type
container vessel building positions at the Shipyard (the "Right of
First Refusal Agreement").
4. Delivery. Paragraph 2 of Article VII of the Shipbuilding Contract
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references a PROTOCOL OF DELIVERY AND ACCEPTANCE that will be executed by the
parties in connection with the delivery of the Vessel. The parties agree that
the PROTOCOL OF DELIVERY AND ACCEPTANCE will be substantially in the form of
Exhibit A attached hereto.
5. Warranty of Quality. Paragraph 4(f) of Article IX is hereby deleted
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in its entirety and replaced with the following text:
"The BUYER may withhold ONE MILLION FIVE HUNDRED THOUSAND DOLLARS
($1,500,000) from the delivery payment (the "Guarantee Holdback"). At
the time of the delivery of the Vessel, the BUYER shall deposit the
full amount of the Guarantee Holdback into an escrow account. The BUYER
shall pay to the BUILDER the entire Guarantee Holdback, less any amount
to cover any outstanding guarantee deficiency, upon completion of the
guarantee period for the VESSEL. Any amounts withheld beyond the end of
the guarantee period pursuant to this paragraph shall be paid to the
BUILDER upon the correction of all guarantee deficiencies for which
such amounts were withheld. Any dispute with respect to the disposition
of the Guarantee Holdback shall be settled pursuant to Article XIV of
this Contract."
6. Indemnification. Paragraph 2 of Article XXI is hereby deleted in its
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entirety and replaced with the following text:
"The BUILDER shall defend, indemnify and hold harmless the
BUYER, its parent, subsidiaries, affiliates, agents, subcontractors,
directors, officers and employees from and against any claims, demands,
obligations, liens and suits of every nature whatsoever by OceanBlue
Express, Inc. or any of its directors, officers, employees,
shareholders, advisors or consultants, or any third party based upon a
contractual relationship or binding commitment with OceanBlue Express
Inc. or any third party whose claim is made on the basis of its
reliance on any representation made by OceanBlue Express Inc. or any of
its directors, officers, employees, shareholders, advisors or
consultants arising out of or based upon the BUYER's purchase of the
VESSEL, provided that this indemnification shall not apply to any
claims, liens and suits of every nature whatsoever brought by any
governmental entity unless such governmental claim, lien or suit is
based upon a contractual relationship or binding commitment with
OceanBlue Express, Inc. or is based on such governmental entity's
reliance on any representation made by OceanBlue Express, Inc. or any
of its directors, officers, employees, shareholders, advisors or
consultants. This indemnification shall expire four (4) years from the
effective date of this Contract.
7. No Additional Changes. Except as otherwise herein expressly
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provided, all other provisions of the Shipbuilding Contract shall remain in full
force and effect.
8. Capitalized Terms. For all purposes of this Amendment, unless
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otherwise expressly provided or unless the context otherwise requires, the
capitalized terms used herein shall have the meaning specified in the
Shipbuilding Contract.
9. Counterparts. This Amendment may be executed in any number of
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counterparts, each of which shall be deemed to be an original and all of which
when taken together shall constitute one and the same instrument.
[Signature page follows]
IN WITNESS WHEREOF, the parties have duly executed this Amendment No. 1
to Shipbuilding Contract as of the date first set forth above.
KVAERNER PHILADELPHIA SHIPYARD, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
▇▇▇▇▇▇ NAVIGATION COMPANY, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
EXHIBIT A
FORM OF PROTOCOL OF DELIVERY AND ACCEPTANCE OF VESSEL
Philadelphia Pennsylvania _____________
(City) (State) (Date)
KVAERNER PHILADELPHIA SHIPYARD INC., a ___________________
corporation (the "BUILDER"), and ▇▇▇▇▇▇ NAVIGATION COMPANY, INC. a Hawaii
corporation (the "BUYER"), each for itself, does hereby certify:
1. That the Vessel named _____________, BUILDER's Hull No.___,
Official No. __________ (the "Vessel"), was, on the ___ day of ___________,
200_ at _______ o'clock (a.m.) (p.m.) __ Time, physically delivered at
________, ________, by the BUILDER to the BUYER pursuant to and in
accord with the provisions of that certain Shipbuilding Contract between
Kvaerner Philadelphia Shipyard Inc. and ▇▇▇▇▇▇ Navigation Company, Inc.,
BUILDER's Hull No. __, entered into as of the 14th day of February, 2005, as
such contract was amended by Amendments Nos. 1 through __, and Contract Changes
No. 1 through __ (the "Shipbuilding Contract"), for the construction of said
Vessel under the terms of which the title in and to the Vessel vested in the
BUYER.
2. Receipt of physical delivery of the Vessel is acknowledged by the
BUYER, and the BUYER accepts the Vessel under and pursuant to the requirements
of the Shipbuilding Contract, including the Plans, the Specifications and
changes thereto, but subject to (i) completion by the BUILDER of all uncompleted
work and correction of all defects, deficiencies, or damage to be completed and
corrected by the BUILDER after delivery as set forth in Exhibit 1 attached
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hereto, and (ii) the rights of the BUYER under ARTICLE IX of the Shipbuilding
Contract.
3. The BUYER and the BUILDER have agreed that the sum of $_________
represents the amount to be withheld by the BUYER from the Contract Price until
the uncompleted work, uncorrected defects, deficiencies and damage set forth in
Exhibit 1 attached hereto, is completed and corrected, and such sum has been so
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withheld for later payment by the BUYER to the BUILDER in accordance with the
provisions of the Shipbuilding Contract.
4. The BUYER and the BUILDER have agreed that the sum of $_________
represents the amount to be withheld by the BUYER from the BUILDER at delivery
of the Vessel in lieu of the completion and correction by the BUILDER of the
uncompleted work and uncorrected defects, deficiencies or damage set forth in
Exhibit 2 attached hereto.
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The capitalized terms used herein which are defined in the Shipbuilding
Contract, or by reference therein to other documents, shall have the respective
meanings stated in the Shipbuilding Contract or such other documents.
KVAERNER PHILADELPHIA ▇▇▇▇▇▇ NAVIGATION COMPANY,
SHIPYARD INC. INC.
BUILDER BUYER
By By
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Title Title
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EXHIBIT 1
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TO
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PROTOCOL OF DELIVERY AND ACCEPTANCE OF VESSEL
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DEFICIENCY LIST OF ITEMS TO BE CORRECTED
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BUILDER's Hull No. __________ Date: __________, 200_
Official No. _____________
Schedule 1-A, which is attached hereto and is incorporated herein by
this reference, contains a list of uncompleted work and uncorrected defects,
deficiencies, or damage at the time of delivery to be completed and corrected by
the BUILDER after delivery in accordance with the provisions of the Shipbuilding
Contract.
KVAERNER PHILADELPHIA SHIPYARD INC.
BUILDER
By
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Title
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▇▇▇▇▇▇ NAVIGATION COMPANY, INC.
BUYER
By
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Title
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Authorized Representative
EXHIBIT 2
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TO
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PROTOCOL OF DELIVERY AND ACCEPTANCE OF VESSEL
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DEFICIENCY LIST OF ITEMS NOT TO BE CORRECTED
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BUILDER's Hull No. __________ Date: __________, 200_
Official No. _____________
Schedule 2-A, which is attached hereto and is incorporated herein by
this reference, contains a list of uncompleted work and uncorrected defects,
deficiencies, or damage at the time of delivery that will not be completed or
corrected by the BUILDER after delivery of the Vessel in lieu of the amount set
forth in paragraph 4 of the Protocol of Delivery and Acceptance of Vessel
withheld by the BUYER from the BUILDER at the delivery in accordance with the
provisions of the Shipbuilding Contract.
KVAERNER PHILADELPHIA
SHIPYARD INC.
BUILDER
By
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Title
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▇▇▇▇▇▇ NAVIGATION COMPANY, INC.,
BUYER
By
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Title
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