SHIPBUILDING CONTRACT FOR CONSTRUCTION OF ONE (1) 13,000DWT IMO IV/IIl OIL CHEMICAL CARRIER (HULL NO PI-1001) BETWEEN ASTRAL MARITIME INC AS BUYER AND PHA RUNG SHIPYARD COMPANY LTD AS BUILDER DATE: 4th March 2007PHARUNG LTD/TASON LTD (as Agent) Shipbuilding Contract CONTENTS ARTICLE Page No | DESCRIPTION AND CLASS 6 41. Description 6 2. Class and Rules 6 3. Principal Particulars and Dimensions of the Vessel 7 4, Guaranteed Speed 8 5, Guaranteed Fuel Consumption 8 6. Guaranteed Cubic Capacity 8 7. Guaranteed Deadweight. 8 8, Subcontracting 9 9. Registration 10 Il CONTRACT PRICE AND TERMS OF PAYMENT 1" 1. Contract Price .... - "1 2. Currency " 3. Terms of Payment 1 4, Method of Payment a 3 5. Prepayment ..n.m 14 6. Security for Payment of instalments before Delivery. 14 7. Refunds. SS 14 8. Disputes as to Amount of Fifth instalment = 16 9. Supporting Documents 16 Ill ADJUSTMENT OF THE CONTRACT PRICE, 7 1, Delivery . sss 7 2. Insufficient Speed - 8 3, Excessive Fuel Consumption 19 4, Deadweight... . 19 5, Deficient Cubic Capacity 20 6. Effect of Rescission 20 7. Cumulative effect 20 IV_ SUPERVISION AND INSPECTION 24 4. Appointment of the BUYER's supervisor 2 2. Approval of Plans and Drawings 24 3. Supervision and Inspection by the Supervisor 22 4. Liability of the BUILDER 23 5, Salaries and Expenses 23 6. Report of Progress 23 7. Replacement of Supervisor... 23, ‘Asal Sipuling Contract doc — fectPHARUNG LTD/TASON LTD (as Agent) Shipbuilding Contract 8. Responsibility of the BUILDER 24 9. Responsibility of the BUYER 24 V__ MODIFICATIONS, CHANGES AND EXTRAS. 26 1. Modifications of Specifications. 26 2. Changes in Class, etc. 27 3. Substitution of Materials and/or Equipments 2 4, BUYER's Supplied Items 28 VI TRIALS. . 29 1. Notice sons 29 2. Weather Conditions 29 3, How Conducted . 29 4, Method of Acceptance or Rejection 30 5. Effect of Acceptance 31 6, Consumable Stores. : 31 Vl DELIVERY 33 1. Time and Place - 33 2. When and How Effected 33 3, Documents to be Delivered to the BUYER on 33 4. Title and Risk 35 5, Removal of VESSEL 35 6, Tender of the VESSEL 35 Vill DELAYS AND EXTENSION OF TIME FOR DELIVERY 36 1. Causes of Delay . 36 2. Notice of Delay ee 36 3, Right to Cancel for Excessive Delay 37 4, Definition of Permissible Delay - 7 IX WARRANTY OF QUALITY 38 1. Guarantee of Material and Workmanship 38 2. Notice of Defects 38 3. Remedy of Defects 38 4, Extent of the BUILDER’s Liability 39 5. Guarantee Engineer 40 x REJECTION AND RESCISSION BY THE BUYER : . 42 1. Notice 42 ‘aval pouting Contact doc = TH fredPHARUNG LTD/TASON LTD (as Agent) Shipbuilding Contract 2. Refund by Builder. 42 3. Return of Buyer's supplies 42 4. Discharge of obligations 43 XI BUYER’ S DEFAULT 44 1. Definition of default 44 2. Notice of Default 44 3, Interest and charge 44 4, Default before delivery of the vessel 44 5. Sale of the vessel 45 XII INSURANCE a7 1, Extent of Insurance Coverage 47 2. Application of Recovered Amount a7 3. Termination of the BUILDER's Obligation to Insure. 48 XII DISPUTES AND ARBITRATION . 49 1, Proceedings 49 2 Alternative Arbitration by Agreement 49 3. Notice of Award = 49 4, Expenses 50 5, Award of Arbitration 50 6. Entry in Court so 50 7. Alteration of Delivery Time 50 XIV__ RIGHT OF ASSIGNMENT. 51 1, BUILDER's Assignment ...... : bore 51 2. BUYER's Assignment Before Delivery. 51 3, Transfer by Novation 52 XV TAXES AND DUTIES 53 4. Taxes 83 2. Duties - ee 53 XVI_ PATENTS, TRADEMARKS AND COPYRIGHTS 54 XVIL NOTICE so ssce sone 55 XVIIl_ EFFECTIVE DATE OF CONTRACT. 7 XIX INTERPRETATION. 59 4, Law Applicable See 59 ‘Asal Shipuling Conactdoc= = JotPHARUNG LTD/IASON LTD (as Agent) _ Shipbuilding Contract 2. Discrepancies 59 3. Definition . 59 Exhibit "A": IRREVOCABLE LETTER OF GUARANTEE Exhibit "B": READINESS OF FINANCE LETTER, ‘Atal Shpbulking Contvactdoe— = eal aePHARUNG LTD/TASON LTD (as Agent) ___Shipbuilding Contract SHIPBUILDING CONTRACT FOR CONSTRUCTION OF ONE 13,000DWT IMO Ill OIL CHEMICAL CARRIER (HULL NO. PI-1001) ‘This CONTRACT entered into this 4th day of March, 2007 by and between ASTRAL MARITIME INC., a company organized and existing under the Laws of Republic of the Marshall Islands, having its registered office at Ajeltake Rd., Ajeltake Island, Majuro, M.l (hereinafter called the “BUYER’) on the one part, and Pha Rung Shipyard Company Ltd, a company organized and existing under the Laws of Socialist Republic of Vietnam, having its registered office at Minh Duc town, Thuy Nguyen District, Hai Phong City, S.R. of Vietnam (hereinafter called the "BUILDER" on the other part WITNESSETH In consideration of the mutual covenants contained herein, the BUILDER agrees to build, launch, equip and complete at the BUILDER's Shipyard and to sell and deliver to the BUYER after completion and successful trial one (1) 13,000 deadweight tonnes IMO IW/IIl oil chemical carrier as more fully described in Article | hereof, and the BUYER agrees to purchase and take delivery of the aforesaid VESSEL from the BUILDER and to pay for the same in accordance with the terms and conditions hereinafter set forth. ‘Atal Shipulting Convact doc ~ fil KiltPHARUNG LTD/TASON LTD (as Agent) Shipbuilding Contract ARTICLE|. DESCRIPTION AND CLASS 1. DESCRIPTION: ‘The VESSEL is a 13,000 metric tons deadweight IMO IM/IIl oil chemical carrier, at scantling draft of approx. 8.70 meters (hereinafter called the "VESSEL") of the class described below. The VESSEL shall have the BUILDER's Hull No. Pl-1001 and shall be constructed, equipped and completed in accordance with the following (1) Specification (No B-100-00 dated on 12" of October, 2006) (2) General Arrangement (Drawing No. 8101-00) (3) Midship Section (Drawing No. H-201-00) (4) Makers list (Included in the Specification (1) above) designed by ASIA SHIP DESIGN & ENGINEERING CONSULTANTS CO., LTD as (hereinafter collectively called the "Specifications") attached hereto and signed by each of the parties to this Contract, making them an integral part hereof. The Specifications and General Arrangement drawing referred to above is fully incorporated into this Contract. The Specification under (1) above and the other drawings under (2) and (3) above are intended to explain each other and anything shown on the Drawings and not stipulated in the Specification or anything stipulated in the Specification and not shown on the Drawings shall be deemed and considered as if included in both. ‘Should there be any inconsistencies or contradictions between the Specification and the Drawings, the Specification shall prevail. Should there be any inconsistencies or contradictions between this Contract and the Specifications, this Contract shall prevail The BUILDER may make improvements to the Specifications, if found necessary for the introduction of improved production methods or under the Intemational Conventions applicable to this ship construction, provided that (a) the BUILDER shall first obtain the BUYER's approval which shall not be unreasonably withheld, (b) there shall be no additional cost to the BUYER and (c) there shall be no change to any of the other terms and conditions of this Contract 2. CLASS AND RULES: ‘The BUILDER guarantees that the VESSEL, including its machinery and equipment, shall be designed, engineered, constructed and equipped with workmanship and materials approved by and in accordance with the rules and regulations of either ‘American Bureau of Shipping or Lloyd's Register of Shipping or Det Norske Veritas at the choice of the BUYER (hereinafter the classification society chosen called the “Classification Society’) issued and having become effective up to and on the date of ‘Atal Shpbuling Contract doc~ = i YA) FV / SouthPHARUNG LTD/TASON LTD (as Agent) __Shipbuilding Contract keel laying of the VESSEL and shall be distinguished in the record by the symbol of +A1 (E) Oil Carrier +AMS , ESP, IMO Chemicals II & Ill and shall also comply with the rules and regulations as fully described in the Specifications. The BUYER shall choose the Classification Society not later than the date falling fifteen (15) days after the date this Contract has been signed by both parties hereto. ‘The requirements of the authorities as fully described in the Specifications including that of the Classification Society are to include any additional rules or circulars thereof issued and become effective up to and on the date of the delivery of the VESSEL, always in accordance with Article V, Paragraph 2. The VESSEL shall also and more particularly comply with all applicable rules, regulations and requirements of IMO, industry guidelines and other regulatory bodies, including their amendments as at the time of the signing of this Contract. Anything not mentioned in this Contract and the Specifications but required by the Classification Society and the Intemational Conventions and the rules and regulations under the preceding paragraph, shall be provided at the BUILDER's expense, ‘The BUILDER shall arrange with the Classification Society to assign a representative or representatives (hereinafter called the "Classification Surveyor’) to the BUILDER's Shipyard for supervision of the construction of the VESSEL, Al fees and charges incidental to Classification approvals, surveys, tests and trials and certification associated with the VESSEL's compliance with the above mentioned with the foregoing rules, regulations and requirements of this Contract as described in the Specifications issued up to the date of this Contract as well as royalties, if any, payable on account of the construction of the VESSEL shall be for the account of the BUILDER, except as otherwise provided and agreed herein. The key plans, materials and workmanship entering into the construction of the VESSEL shall at all times be subject to inspections and tests in accordance with the rules and regulations of the Classification Society. Decisions of the Classification Society as to compliance or noncompliance with Classification rules and regulations shall be final and binding upon the parties hereto. 3. PRINCIPAL PARTICULARS AND DIMENSIONS OF THE VESSEL (@) Hull: Length overall approx.128.60m Length between perpendiculars approx.120.40m Breadth moulded approx. 20.40m Depth moulded approx. 11.50m Scantling draught, moulded approx. 8.70m ‘Asal Shipbultng Contract doc —PHARUNG LTD/TASON LTD (as Agent) Shipbuilding Contract (b) Propelling Machinery The VESSEL shall be equipped, in accordance with the Specifications, with one (1) Low Speed type, Single acting, two (2) stroke, Main Engine STX MAN B&WES35MC Mk.7, in accordance with the Maker's List 4, GUARANTEED SPEED The BUILDER guarantees that the service speed, after correction, is to be not less than 13.5 Knots at the scanting draft of 8.70m, including 15% service allowance (Sea Margin) at normal continuous rating as stipulated in the Specifications. In any event without alteration of principal particulars and dimensions and without increase of maximum power of the main engine, as specified in the Specifications, shall be the final guaranteed speed. The service speed shall be corrected for wind speed and shallow water effect. 5. GUARANTEED FUEL CONSUMPTION The BUILDER guarantees that the fuel oil consumption of the Main Engine is not to exceed the chosen Main Engine supplier's guaranteed specific fuel consumption of 131grams/BHP.H at maximum continuous rating at shop trial based on ISO reference conditions and diesel oil having a lower calorific value of 10,200 Kcal/kg as stipulated in the Specifications. 6. GUARANTEED CUBIC CAPACITY The BUILDER guarantees that the cargo tanks cubic capacity of the VESSEL is to be not less than 13,500 cubic meters while the slop tanks cubic capacity of the VESSEL is to be not less than 700 cubic meters so as to give an aggregate cargo tanks and slop tanks cubic capacity of the VESSEL that is to be not less than 14,200 cubic meters. 7. GUARANTEED DEADWEIGHT The BUILDER guarantees that the VESSEL is to have deadweight of not less than 13,000 metric tons at the scantling draft of 8.70 meters in sea water of 1.025 tim® specific gravity The terms, "Deadweight’, as used in this Contract, shall be as defined in the Specifications. The actual deadweight of the VESSEL expressed in metric tons shall be based on calculations made by the BUILDER and checked by the BUYER, and all measurements necessary for such calculations shall be performed in the presence ‘Astral Sipbuldng Contact.éoe———PHARUNG LTD/TASON LTD (as Agent) = Shipbuilding Contract of the BUYER’s supervisor(s) or the party authorized by the BUYER and/or Classification Society's Surveyors. Should there be any dispute between the BUILDER and the BUYER in such calculations and/or measurements, the decision of the Classification Society shall be final The VESSEL's construction materials, equipment and workmanship shall be carried out in a sound of shipbuilding practice for a new vessel and the Classification Society's rules and regulations, and as defined in the Specifications, and any adjustments necessary to achieve the construction and performance of the VESSEL as described 8. SUBCONTRACTING: The BUILDER shall build and outfit the VESSEL according to this Contract at its shipyard at Haiphong, Vietnam using its own shipyard organization The BUILDER is, however, authorised to sub-contract part of the work to third party sub-contractors, provided that the BUILDER shall have first given notice in writing to the BUYER of any major sub-contract award (and for the purpose of this Contract an award involving consideration in excess of USD 300,000 or its equivalent in any other currency shall be deemed a Major Sub-Contract) and received the BUYER'S written approval thereof, such approval not to be unreasonably withheld. Without prejudice to the generality of the foregoing the BUILDER shall remain fully liable for the due and complete performance of all the BUILDER’ obligations under this Contract notwithstanding the entering into of any such Sub-Contract as aforesaid. However, the VESSEL shall always remain at the Shipyard unless the BUYER and the BUILDER agree otherwise. No Sub-Contract shall bind or purport to bind the BUYER, and each Sub-Contract, shall be the responsibility of the BUILDER, All Sub-Contract howsoever employed or engaged are hereby declared and agreed to be experienced Sub-Contractors approved by either the Classification Society or the BUYER’s Supervisor and/or holding relevant quality assurance certification and ‘employed or engaged by the BUILDER and the BUILDER agrees that itis and shall remain fully responsible for and liable in respect of any Sub-Contractors and/or theirs acts or omissions and, without prejudice to the generality of the foregoing, the BUILDER shall ensure control over supervision and scheduling of the work done by the Sub-Contractors. The BUILDER hereby agrees that if any of its employees, servants or agents or those of the Sub-Contractors appointed pursuant to this Contract shall, in the reasonable opinion of the BUYER’s Supervisor, not be carrying out properly their duties and responsibilities under or pursuant to the terms of this contract, the BUYER shall be entitled (by giving written notice to the BUILDER) to draw the same to the attention of the BUILDER and, if the BUYER considers it necessary, to ‘Asal Shpultng Contract doc~—— 7PHARUNG LTD/TASON LTD (as Agent) Shipbuilding Contract request the BUILDER to replace such person(s) if the same are its own employees, servants or agents, or to use its best endeavors to replace such person(s) of ‘employees, servants or agents of a Sub-Contractor. The BUILDER shall investigate any such request, and if found justified take appropriate action, Any such replacement shall be within such time scale so as to ensure that the BUILDER continues to carry out all of its duties and obligations under or pursuant to this Contract 9 REGISTRATION: Provided always that as provided in the Specifications the VESSEL shall be constructed by the BUILDER jin accordance, inter alia, with, and as if to be registered by the BUYER under, the laws of the Republic of the Marshall Islands, the BUYER shall always have the right, at its own cost and expense, to register the VESSEL at the time of delivery and acceptance thereof under the laws and flag of any other state designated by the BUYER to the BUILDER at least sixty (60) days prior to the Delivery Date. Following certificate to be delivered by the BUILDER to the BUYER ten (10) days before the scheduled delivery date: -BUILDER's Certificate Delivery of above mentioned certificate to the BUYER ten (10) days before the scheduled delivery date of the VESSEL shall not mean or imply the transfer to the BUYER of the title and risk of the VESSEL. ‘Aswal pouting Contactdoc= =PHARUNG LTD/IASON LTD (as Agent) Shipbuilding Contract ARTICLE Il. CONTRACT PRICE & TERMS OF PAYMENT 4. CONTRACT PRICE: The purchase price of the VESSEL is United States Dollars| only ret receivable by the BUILDER (hereinafter called the "Contract Price"), which is exclusive of the cost for the BUYER's Supplies as provided in Article V hereof, and shall be subject to upward or downward adjustment, if any, as hereinafter set forth in this Contract. The above Contract Price shall include payment for services in the inspection, tests, survey, classification and trials of the VESSEL which will be rendered by the Classification Society and shall not include the cost of the BUYER's supplies as stipulated in this Contract. The Contract Price also include all costs and expenses for supplying all necessary drawings as stipulated in the Specifications except those, if any, to be furnished by the BUYER for the BUYER's supplies for the VESSEL in accordance with the Specifications. 2. CURRENCY: Any and all payments under this Contract shall be made in United States Dollars. 3. TERMS OF PAYMENT: The Contract Price shall be paid by the BUYER to the BUILDER in installments as follows: (a) 1st Installment: The sum of United States Dollars} (uss shall become due and payable and be paid by the BUYER, within seven (7) New York business days, from the date that all the conditions sset out under Article XVIII shall have been fulfiled and particularly, but without limitation to the generality of the foregoing, the BUILDER shall have submitted to the BUYER the refund guarantee provided in paragraph 7 of this Article in the form annexed hereto as Exhibit “A” issued, at the BUILDER'S choice, either by the Bank for Investment and Development of Vietnam (hereinafter “BIDV") or a first class international bank acceptable to the BUYER and the BUYER’s financing bank (the bank actually issuing the Refund Guarantee being hereinafter referred to as the “BUILDER’s Bank’) and provided further that the BUILDER shall have received the Readiness of Finance Letter (as defined in paragraph 6 of this Article) in accordance with paragraph 6 of this Article. (b) 2nd installment: The sum of United States Dollar |shall become due and payable and be paid within five (5) New ‘Asal Shipbaliing Contract doc= = al JoabPHARUNG LTD/TASON LTD (as Agent) _—__—Shipbuilding Contract () (e) York business days after the cutting of the first steel plate of the VESSEL in the BUILDER's workshop and receipt by the BUYER of advice by telefax of the BUILDER accompanied by a confirmation of the Classification Society that the first steel plate has been actually cut and demand of the BUILDER for payment of this installment, provided however, that the demand for payment of this installment cannot be made prior to the date falling three (3) months from the date of payment by the BUYER of the 1% Installment of the Contract Price. Seven (7) days prior notice of cutting of the first steel plate shall be given by the BUILDER to the BUYER by telefax and shall be confirmed in writing to the BUYER with no unreasonably withheld. 3rd Installment: The sum of United States Dollard Thousand only (USS| ) shall become due and payable and be paid within five (5) New York business days after the laying of the first section of the keel of the VESSEL, according to the Classification Society's rules has taken place at the BUILDER's shipyard and receipt by the BUYER of advice by telefax of the BUILDER accompanied by a confirmation of the Classification Society that the said keel-laying has been carried out and a BUILDER's demand for payment of this installment, provided however, that the demand for payment of this installment cannot be made prior to the date falling five (5) months from the date of payment by the BUYER of the 1% installment of the Contract Price. Seven (7) days prior notice of the laying of the first section of the Keel of the VESSEL plate shall be given by the BUILDER to the BUYER by telefax and shall be confirmed in writing to the BUYER with no unreasonably withheld. 4th Installment The sum of United States Dollars Four million and ‘Thousand only (USS only) shall become due and payable and be paid within five (5) New York business days after the launching of the VESSEL has taken place at the BUILDER'S shipyard and receipt by the BUYER of advice by telefax of the BUILDER accompanied by a confirmation of the Classification Society that the launching of the VESSEL has been carried out and a BUILDER'S demand for payment of this installment. Seven (7) days prior notice of the launching shall be given by the BUILDER to the BUYER by telefax and shall be confirmed in writing to the BUYER with no unreasonably withheld. 5th Installment (Payment upon Delivery of the VESSEL) The sum of United States Dollars Seven million and! ‘only (US$ [_____Tonly) plus any increase or minus any decrease due to modifications and/or adjustments of the Contract Price in accordance with provisions of the relevant articles hereof, shall become due and payable and be ‘Astral Stipbuling Contactdoc~ = hasPHARUNG LTD/IASON LTD (as Agent) Shipbuildi: Contract paid by the BUYER to the BUILDER concurrently with delivery of the VESSEL. The BUILDER shall send to the BUYER a telefax demand for this installment ten (10) days prior to the scheduled date of delivery of the VESSEL hereunder. 4, METHOD OF PAYMENT: (a) 4st Installment: The BUYER shall remit the amount of this installment in accordance with Article ll paragraph 3(a) by telegraphic transfer to the BUILDER’s account with the BUILDER's Bank as notified by the BUILDER to the BUYER and such nomination shall be notified to the BUYER at least ten (10) days prior to the due date for payment. (b) 2nd Installment: The BUYER shall remit the amount of this installment in accordance with Article Il paragraph 3(b) by telegraphic transfer to the BUILDER’s account with the BUILDER's Bank as notified by the BUILDER to the BUYER and such nomination shall be notified to the BUYER at least ten (10) days prior to the due date for payment (c) 3rd Installment: The BUYER shall remit the amount of this installment in accordance with Article Il paragraph 3(c) by telegraphic transfer to the BUILDER's account with the BUILDER's Bank as notified by the BUILDER to the BUYER and such nomination shall be notified to the BUYER at least ten (10) days prior to the due date for payment. (2) 4th Installment: The BUYER shall remit the amount of this installment in accordance with Article II paragraph 3(d) by telegraphic transfer to the BUILDER's account with the BUILDER's Bank as notified by the BUILDER to the BUYER and such nomination shall be notified to the BUYER at least ten (10) days prior to the due date for payment. (e) 5th Installment: The BUYER shall, at least three (3) New York business days prior to the scheduled date of delivery of the VESSEL, make an irrevocable cash deposit in the name of the BUYER or the BUYER's financing bank with the BUILDER's Bank, for a petiod of seven (7) days covering the amount of this installment (as adjusted in accordance with the provisions of this Contact), with an irrevocable instruction that the said amount shall be released to the BUILDER against ‘Atal Shipbulting Convactdoc—— — wae: fosPHARUNG LTD/TASON LTD (as Agent) Shipbuilding Contrac presentation by the BUILDER to the BUILDER’s Bank of a true copy of the Protocol of Delivery and Acceptance signed by the BUYER's authorized representative and the BUILDER’s authorized representative. Interest, if any, accrued from such deposit, shall be for the benefit of the BUYER. If the delivery of the VESSEL is not effected on or before the expiry of the aforesaid seven (7) days deposit period, the BUYER or the BUYER'S financing bank, as the case maybe, shall have the right to withdraw the said deposit plus accrued interest upon the expiry date. However, when the newly scheduled delivery date is notified to the BUYER by the BUILDER pursuant to the terms of the Contract, the BUYER shall make or arrange the cash deposit in accordance with the same terms and conditions as set out above. 5. PREPAYMENT: The BUYER shall have the right to make prepayment of any and all installments before delivery of the VESSEL, by giving to the BUILDER at least thirty (30) days prior written notice, without any price adjustment of the VESSEL for such prepayment. 6. SECURITY FOR PAYMENT OF INSTALMENTS BEFORE DELIVERY: The BUYER shall, following the signing of this Contract, deliver to the BUILDER a readiness of finance letter issued by a first class intemational bank acceptable to the BUILDER (hereinafter referred to as the “Readiness of Finance Letter’). The Readiness of Finance Letter shall be addressed to the BUYER and shall make reference to the VESSEL and shall confirm the financing arrangements in respect, of the BUYER's obligation for the payment of the 2”, 3” and 4" of the pre-delivery installments of the Contract Price. 7. REFUNDS All payments made by the BUYER prior to delivery of the VESSEL shall be in the nature of advance to the BUILDER, and in the event this Contract is rescinded or canceled by the BUYER, all in accordance with the specific terms of this Contract permitting such rescission or cancellation, the BUILDER shall refund to the BUYER in United States Dollars the full amount of all sums already paid by the BUYER to the BUILDER under this Contract, together with interest at the rate of 6 % per annum from the respective payment date(s) to the date of remittance by telegraphic transfer of such refund to the account specified by the BUYER, As security to the BUYER for the refund of the said advances, the BUILDER shall deliver to the BUYER, a refund guarantee (hereinafter referred to as the Refund Guarantee’) to be issued by the BUILDER’s Bank, in substantially the form of Exhibit "A" annexed hereto together with any changes reasonably required to such ‘Astral Stpbuling Contact doe———PHARUNG LTD/IASON LTD (as Agent) Shipbuilding Contract form by the Refund Guarantor provided such changes are accepted by the BUYER and the BUYER's financing bank. However, in the event of any dispute between the BUILDER and the BUYER with regard to the BUILDER’s obligation to repay the installment or installments paid by the BUYER and to the BUYER'S right to demand payment from BUILDER's Bank, under the Refund Guarantee, and provided that such dispute is submitted either by the BUILDER or by the BUYER for arbitration in accordance with Article Xill hereof latest within twenty one (21) days from any written demand of the BUYER to the BUILDER's bank to make the relevant refund, the BUILDER’s Bank shall withhold and defer payment until the arbitration award between the BUILDER and the BUYER is published. The BUILDER's Bank shall not be obligated to make any payment unless the arbitration award orders the BUILDER to make repayment. If the BUILDER fails to honor the award within three (3) business days of demand in writing by the BUYER, then BUILDER's Bank shall refund to the extent the arbitration award orders. In the event that the Refund Guarantee is issued by BIDV, then, in addition to the Refund Guarantee, the BUILDER shall reimburse to the BUYER the cost of the BUYER obtaining insurance cover (the "Relevant Insurance Cover’) to counter seoure the said Refund Guarantee, for a period equal to the validity period of the Refund Guarantee as stipulated therein, and, provided always however, that: (a) the amount to be reimbursed by the BUILDER to the BUYER under this Paragraph 7 in respect of a particular period (the “Particular Period’), shall be equal to the lower of (i) an amount in United States Dollars equal to the applicable fraction of the Relevant Amount and (ji) the actual cost of the Relevant Insurance Cover invoiced to the BUYER by the relevant insurance broker or the relevant insurer in respect of such Particular Period; and (©) any such reimbursement shall be made on the date falling two (2) New York banking days after the BUYER's written demand on the BUILDER for such reimbursement accompanied by an invoice issued by the BUYER in relation to the Relevant insurance Cover, Provided Always Further However that the BUYER shall have the right at its option, to be declared in writing, to receive each time, instead of the actual reimbursement at such time, a corresponding reduction to the amount of the instalment of the Contract Price next payable under this Contract. For the purposes of this Paragraph 7 of Article I The expression “applicable fraction” in relation to each Particular Period shall mean a fraction having a numerator equal to the number of calendar days of such Particular Period and a denominator of 365, The expression “Relevant Amount” shall mean an amount in United States Dollars equal to the sum of one and one half of a percent (1.5%) of Sixty-five percent (65%) of the Contract Price. ‘Astral Shpbulding Corvactdoe~——PHARUNG LTD/TASON LTD (as Agent) Shipbuilding Contract 8. DISPUTES AS TO AMOUNT OF THE FIFTH INSTALLMENT If there is a dispute between the BUYER and the BUILDER as to the amount of the fifth installment payable or as to whether there are sums owing by way of liquidated damages from the BUILDER to the BUYER, the BUYER shall be entitled to deduct from the fifth installment of the Contract Price such amount(s) as the BUYER considers are due to it and to pay the amount of the fifth installment the BUYER considers due to the BUILDER, and to provide the BUILDER with a bank guarantee delivered by the BUYER's Bank for the amount in dispute, in which event the BUILDER shall be obliged to deliver the VESSEL to the BUYER in exchange for such payment(s) and the delivery of the bank guarantee. The said bank guarantee shall be in a form acceptable to the parties. For the avoidance of doubt such action by the BUYER shall not be deemed to be a default of the BUYER's performance of its obligations under the Contract or, at BUILDER's option, the BUYER shall pay to the BUILDER the full amount including the amount in dispute. In such a case, the BUILDER shall provide the BUYER with a guarantee issued by BUILDER’s Bank for payment of all or a part of the amount in dispute, subject to final decision on the dispute. Any bank guarantee which has been provided by a party thereto pursuant to this paragraph 8 of Article Il shall terminate automatically unless the other party brings an action within three (3) months from date of issue of the relevant bank guarantee. The costs of any such bank guarantee shall be shared proportionately between the parties according to the final outcome of the action. 9. SUPPORTING DOCUMENTS: The BUYER shall also furnish, within ten (10) days after the signing date of this Contract, the BUILDER with the true copies of the following documents (however, the failure by the BUYER to comply with the requirement under this paragraph shall not affect the BUILDER'S obligation under this Contract in any respects) a) Articles of Incorporation of the BUYER b) Certificate of Good Standing ©) Power of Attorney with a copy of Resolutions of the Board of Directors of the BUYER which authorizes the execution, delivery and performance of the Contract ‘aval Stpbulting Contact soe— = KushPHARUNG LTD/IASON LTD (as Agent) Shipbuilding Contract ARTICLE Ill. ADJUSTMENT OF THE CONTRACT PRICE The Contract Price of the VESSEL shall be subject to adjustments as hereinafter set forth. It is hereby understood by both parties that any reduction of the Contract Price is by way of liquidated damages and not by way of penalty. 1, DELIVERY (2) No adjustment shall be made, and the Contract Price shall remain unchanged for the first thirty (30) days of delay in delivery of the VESSEL beyond the Delivery Date as defined in Article VII hereof ending as of twelve o'clock midnight of the thirtieth (30th) day of delay. (b) If the delivery of the VESSEL is delayed more than thirty (30) days after the Delivery Date as defined in Article VII hereof, then, in such event, beginning at twelve o'clock midnight of the thirtieth (30th) day after the date on which delivery is required under this Contract, the Contract Price of the VESSEL shall be reduced by deducting therefrom the sum of United States Dollars Five thousand (US$ 5,000) per day. Unless the parties hereto agree otherwise, the total reduction in the Contract Price shall be deducted from the fifth installment of the Contract Price and in any event (including the event that the BUYER consents to take the VESSEL at the later delivery date after the expiration of One Hundred and Eighty (180) days delay of delivery as described in Paragraph 1(c) of this Article) shall not be more than One Hundred and fifty (150) days at the above specified rate of reduction after the thirty (30) days allowance, that is United States Dollars Six Hundred Seventy Five Thousand (USS 675,000) being the maximum. (©) Ifthe delay in the delivery of the VESSEL continues for a period of more than One Hundred and Eighty (180) days after the Delivery Date as defined in Article Vil, then in such event, the BUYER may, at its option, rescind or cancel this Contract in accordance with the provisions of Article X of this Contract. The BUILDER may at any time after the expiration of the aforementioned One Hundred and Eighty (180) days, if the BUYER has not served notice of cancellation pursuant to Article X, notify the BUYER of the date upon which the BUILDER estimates the VESSEL will be ready for delivery and demand in writing that the BUYER make an election in which case the BUYER shall, within thiry (30) days after such demand is received by the BUYER, either notify the BUILDER of its decision to cancel this Contract, or consent to take delivery of the VESSEL at an agreed future date. It being understood and agreed by the parties hereto that, if the VESSEL is not delivered by such future date, the BUYER shall have the same right of cancellation upon the same terms, as hereinabove provided, (@) For the purpose of this Article, the delivery of the VESSEL shall not be deemed delayed and the Contract Price shall not be reduced when and if the Delivery Date ‘Asal Shipulting Contract doc —D (as Agent) Shipbuilding Contract PHARUNG LTD/TASON of the VESSEL is extended by reason of causes and provisions of Articles V, VI, XI, XIl and XIll hereof. The Contract Price shall not be adjusted or reduced if the delivery of the VESSEL is delayed by reason of permissible delays as defined in Article Vill hereof. (e) In such circumstances, and for the purpose of determining the liquidated damages to the BUYER (according to the provisions of Paragraph 1 (b) of this Article) and the BUYER'Ss right to cancel or rescind this Contract (according to the provisions of Paragraph 1 (c) of this Article), the newly planned delivery date declared by the BUILDER shall not be in any way treated or taken as having substituted the original Delivery Date as defined in Article VII. The BUYER's aforesaid right for liquidated damages and to cancel or rescind this Contract shall be accrued, operated or exercised only to the extent as described in Paragraph 1 (a), 1(b) and Jor 1(c) of Articles Il In whatever circumstances, the Delivery Date as defined in Article VII (not the newly planned delivery date as declared by the BUILDER) shall be used to regulate, as so described in Paragraph 1(a), 1(b), and or 1(c) of Article Ill, the BUYER's right for liquidated damages and to rescind this Contract and the BUILDER'S liability to pay the aforesaid liquidated damages resulting from the delay in delivery of the VESSEL. 2. INSUFFICIENT SPEED (@) The Contract Price of the VESSEL shall not be affected nor changed by reason of the actual speed (as determined by the Trial Run after correction according to the Specifications) being less than three tenths (3/10) of one knot below the guaranteed speed as specified in Paragraph 4 of Article | of this Contract. (b) However, commencing with and including a deficiency of three tenths (3/10) of one knot in actual speed (as determined by the Trial Run after correction according to the Specifications) below the guaranteed speed as specified in Paragraph 4, Article | of this Contract, the Contract Price shall be reduced as follows for each ‘one-tenth (1/10") of a knot or fraction of a full one-tenth (1/10th) of a knot, which shall be regarded as a full one-tenth (1/10") of a knot up to one (1) knot: In case of deficiency at or above 0.30 but below 0.40 knot US$ 50,000 at or above 0.40 but below 0.50 knot US$ 100,000 at or above 0.50 but below 0.60 knot US$ 150,000 at or above 0.60 but below 0.70 knot US$ 200,000 at or above 0.70 but below 0.80 knot. US$ 250,000 at or above 0.80 but below 0.90 knot. US$ 300,000 at or above 0.90 but below 1.00 knot US$ 350,000 (0) If the deficiency in actual speed (as determined by the Trial Run after correction according to the Specifications) of the VESSEL upon the Trial Run, is more than ‘Atal Shipbulting Contact doc = PN Jab.PHARUNG LTD/IASON LTD (as Agent) Shipbuilding Contract 1.00 knot below the guaranteed speed, as per Article | Paragraph 4, then the BUYER may at its option reject the VESSEL and rescind this Contract in accordance with provisions of Article X of this Contract, or may accept the VESSEL at an additional reduction in the Contract Price as above provided, by United States Dollars Eight Hundred thousand only (US$ 800,000) being the maximum, 3. EXCESSIVE FUEL CONSUMPTION (@) The Contract Price of the VESSEL shall not be affected nor changed if the actual fuel consumption of the Main Engine, as determined by shop trial in manufacturer's works, as per the Specifications, is greater than the guaranteed fuel consumption as specified and required under the provisions of this Contract and the Specifications if such actual excess is equal to or less than Five percent (5%). (b) However, if the actual fuel consumption as determined by shop tral is greater than Five percent (5%) above the guaranteed fuel consumption then, the Contract Price shall be reduced by the sum of United States Dollars Forty Thousand (US$40,000) for each full one percent (1%) increase in fuel consumption in excess of the above said Five percent (5%) (fractions of one percent to be prorated). (©) If as determined by shop trial such actual fuel consumption of the Main Engine is more than ten percent (10%) in excess of the guaranteed fuel consumption, ie the fuel consumption exceeds 144.1 gram/BHP/hour, the BUYER may, at its option, reject the VESSEL and rescind this Contract, in accordance with the provisions of Article X of this Contract or may accept the VESSEL at a reduction in the Contract Price by United States Dollars Seven Hundred and Fifty Thousand (US$750,000) being the maximum, 4, DEADWEIGHT (a) In the event that there is a deficiency in the actual deadweight of the VESSEL determined as provided in the Specifications, the Contract Price shall not be decreased if such deficiency is Two Hundred (200) metric tons or less below the guaranteed deadweight of Thirteen Thousand (13,000) metric tons at the assigned scantiing draft. (b) However, the Contract Price shall be decreased by the sum of United States Dollars One Thousand (US$1,000) for each full metric ton of such deficiency being more than Two Hundred (200) metric tons, (c) In the event that there should be a deficiency in the VESSEL's actual deadweight which exceeds Four Hundred (400) metric tons below the guaranteed deadweight, the BUYER may, at its option, reject the VESSEL and rescind this Contract in accordance with the provisions of Article X of this Contract, or may accept the ‘val Shpbuling Contactsoc~ = / [GasPHARUNG LTD/IASON (as Agent) Shipbuilding Contract VESSEL with a reduction in the Contract Price in the maximum amount of United States Dollars Five Hundred Thousand (US$ 500,000). 5. DEFICIENT CUBIC CAPACITY (@) In the event that there is a deficiency in the actual aggregate cargo tanks and slop tanks cubic capacity of the VESSEL determined as provided in the Specifications, the Contract Price shall not be decreased if such deficiency is One Hundred and Forty Two (142) cubic meters or less below the guaranteed aggregate cargo tanks and slop tanks cubic capacity of the VESSEL of Fourteen Thousand and Two Hundred (14,200) cubic meters, (0) However, the Contract Price shall be decreased by the sum of United States Dollars One Thousand (US$1,000) for each full cubic meter of such deficiency being more than One Hundred and Forty Two (142) cubic meters. (©) In the event that there should be a deficiency in the VESSEL’s actual aggregate cargo tanks and slop tanks cubic capacity which exceeds Two Hundred and Eighty Four (284) cubic meters below the guaranteed aggregate cargo tanks and slop tanks cubic capacity, the BUYER may, at its option, reject the VESSEL and rescind this Contract in accordance with the provisions of Article X of this Contract, or may accept the VESSEL with a reduction in the Contract Price in the maximum amount of United States Dollars Five Hundred Thousand (US$ 500,000). 6. EFFECT OF RESCISSION It is expressly understood and agreed by the parties hereto that if the BUYER rescinds this Contract pursuant to any provision under this Article, the BUYER, save for its rights and remedies set out in Article X hereof, shall not be entitled to any liquidated damages or compensation whether described above or otherwise. 7. CUMULATIVE EFFECT The liquidated damages payable in accordance with the terms of this Article are cumulative in nature, provided however that the aggregate amount of all liquidated damages payable in accordance with this Article shall not exceed United States Dollars Two Million One Hundred Thousand (US$2,100,000) ‘ual Spbuting Convactoc— = foPHARUNG LTD/TASON LTD (as Agent) building Contrac ARTICLE IV. ‘SUPERVISION AND INSPECTION 1.a APPOINTMENT OF THE BUYER'S SUPERVISOR The BUYER shall send in good time to and maintain at the BUILDER's Shipyard, at the BUYER's own cost, expense and risk, one or more representative(s) who shall be duly accredited in writing by the BUYER (such representative(s) being hereinafter collectively and individually called the "Supervisor’) to supervise and survey the construction by the BUILDER of the VESSEL, her engines and accessories. The BUILDER hereby warrants that, the necessary visa for the Supervisor to enter Vietnam will be issued in order on demand and without delay provided that the ‘Supervisor meets with the rules, regulations and laws of Vietnam. The BUYER and BUILDER shall, latest 30 calendar days after this Contract becomes effective pursuant to Article XVIII hereof, agree upon a schedule of arrival to the yard of the representative(s) The BUYER shall nominate one of the representative(s) as the coordinator of the representative(s) who shall be in charge of the communication of the representatives with the BUILDER, The BUYER shall endeavour to ensure that the representative(s) shall be appointed for the duration of the Contract. In the event of change of representative the BUYER will give the BUILDER reasonable notice in advance. Unless advised by the BUYER in writing, the representative(s) shall have no general authority to change the Contract or to approve plans and drawings. 1.b APPOINTMENT OF BUILDER'S PROJECT TEAM ‘The BUILDER is, in good time prior to commencement of the construction work, to nominate a team of qualified representatives to act as the BUILDER's project team for the duration of the project. This project team shall act as the liaison between the Supervisor and the BUILDER. 2. APPROVAL OF PLANS AND DRAWINGS. The parties hereto shall, within Thirty (30) calendar days after this Contract becomes effective pursuant to Article XVIII hereof, mutually agree a list of all the plans and drawings, which are to be sent to the BUYER for approval (herein below called "the LIST"). Before arrival of the Supervisor at the BUILDER's Shipyard, some of the plans and drawings specified in the LIST in accordance with the construction schedule of the VESSEL shall be sent to the BUYER, and the BUYER shall, within fourteen (14) days after receipt thereof (excluding mailing time), return such plans and drawings submitted by the BUILDER with approval or remarks, if any. ‘Asal Shpbutting Contract doc~——PHARUNG LTD/TASON LTD (as Agent) Shipbuilding Contract Concurrently with the arrival of the Supervisor at the BUILDER’s Shipyard, the BUYER shall notify the BUILDER in writing, stating the authority which the said ‘Supervisor shall have. Unless notification is given to the BUILDER by the Supervisor or the BUYER of approval or disapproval of any plans and drawings within the above designated period of time for each case, the said plans and drawings shall be implemented for the construction of the VESSEL by the BUILDER. If any comments are made or modifications requested by the Classification Society or by another regulatory agency or entity, the BUYER and the BUILDER will consult and agree as how to modify the plans and drawings. The plans and drawings approved by the BUYER or Supervisor shall be final, and any alteration thereof shall be regarded as modification specified in Article V of this Contract, ‘The BUILDER shall comply with any such demand which is not contradictory to this Contract and the Specifications or drawings, provided that any and all such demands by the BUYER’s Supervisor with regard to construction, arrangement and outfit of the VESSEL shall be submitted in writing to the authorised representative of the BUILDER. The BUILDER shall notify the BUYER's Supervisor of the names of the Persons who are from time to time authorised by the BUILDER for this purpose. 3. SUPERVISION AND INSPECTION BY THE SUPERVISOR ‘The necessary inspection of the VESSEL, its machinery, equipment and outfitings shall be carried out by the Classification Society, andior inspection team of the BUILDER and the BUYER’s Supervisor throughout the entire period of construction in ofder to ensure that the construction of the VESSEL is duly performed in accordance with this Contract and the Specifications. The Supervisor shall have, during construction of the VESSEL, the right to attend tests according to the mutually agreed test list and inspect the VESSEL, her engines, accessories and materials at the BUILDER’s Shipyard. In the event that the ‘Supervisor discovers any construction which does not conform to the requirements of this Contract and the Specifications, the Supervisor shall promptly give the BUILDER a notice in writing as to such nonconformity, upon receipt of which the BUILDER shall correct such nonconformity if the BUILDER agrees with the BUYER. However the BUYER undertakes and assures the BUILDER that the Supervisor shall carry out his inspections in accordance with the agreed inspection procedure and schedule and usual shipbuilding practice and in a way as to avoid any unnecessary and unreasonable delays to the construction of the VESSEL. The BUILDER, its employees, agents and subcontractors, during its working hours during the construction and until delivery of the VESSEL, shall arrange for BUYER'S ‘aval Spbulding Carrac.éoc———ract PHARUNG LTD/TASON LTD (as Agent) Shipbuilding Co: Supervisor and/or his/her assistants to have free and ready access to the VESSEL, her engines, equipment and accessories, and to any other place where work is being done, or materials are being processed or stored in connection with the construction of the VESSEL including the yards, workshops and stores of the BUILDER and the premises of sub-contractors. The BUILDER may arrange transportation of the BUILDER's subcontractors on account of BUYER 4, LIABILITY OF THE BUILDER The Supervisor engaged by the BUYER under this Contract shall at all times be deemed to be in the employ of the BUYER. The BUILDER shall be under no liability whatsoever to the BUYER, or to the Supervisor or the BUYER's employees or agents for personal injuries, including death, during the time when they, or any of them, are on the VESSEL, or within the premises of the BUILDER, unless, however, such personal injuries, including death, were caused by gross negligence or willful misconduct of the BUILDER, or any of the BUILDER’s employees or agents or subcontractors of the BUILDER. Nor shall the BUILDER be under any liability whatsoever to the BUYER for damage to, or loss or destruction of property in Vietnam of the BUYER or of the Supervisor, or of the BUYER's employees or agents, unless such damage, loss or destruction was caused by gross negligence or willful misconduct of the BUILDER, or of any of the employees, or agents or subcontractors of the BUILDER 5. SALARIES AND EXPENSES All salaries and expenses of the Supervisor, or any other employees employed by the BUYER under this Article, shall be for the BUYER’s account. 6. REPORT OF PROGRESS: The BUYER is entitled to require the BUILDER to report monthly the condition of progress as to the construction of the VESSEL during the construction of the VESSEL. 7. REPLACEMENT OF SUPERVISOR The BUYER shall ensure that the Supervisor shall carry out their duties hereunder in accordance with the normal international shipbuilding practice and in such a way as to avoid any unnecessary and unreasonable delay in the construction of the VESSEL. The BUILDER has the right to request the BUYER by written notice to replace the Supervisor, who is deemed unsuitable and unsatisfactory for the proper progress of the VESSEL's construction. The BUYER shall investigate the situation by sending its representative(s) to the BUILDER's yard, if necessary, and if the BUYER considers that such BUILDER's request is justified, the BUYER shall effect the replacement as soon as conveniently arrangeable. The supervision thus exercised on behalf of the BUYER by the Supervisor shall not alter or diminish the ‘Astral Spbulcing Conrac.doc———PHARUNG LTD/IASON LTD (as Agent) Shipbuilding Contra responsibility of the BUILDER with regard to the time of delivery and quality of the VESSEL, her engines and accessories as elsewhere in this Contract or in the Specifications, provided, however, that such supervision shall be carried out in accordance with usual shipbuilding practice and in such a way to avoid any unjustifiable and unreasonable increase in the building cost and delays in the construction of the VESSEL. 8. RESPONSIBILITY OF THE BUILDER Except the faults of BUYER and/or BUYER’s Supervision, neither the approval of drawings by the BUYER nor the inspection of the VESSEL during construction by the Supervisor shall in any way diminish, affect or impair the obligations, guarantees or undertakings of the BUILDER in relation to construction of the VESSEL. ‘The BUILDER shall provide the BUYER's Supervisor and his/her assistants free of charge with suitably furnished office space at, or in the immediate vicinity of, the shipyard together with access to a separate telephone line, facsimile and internet facilities as may be deemed necessary by the BUYER's Supervisor to enable them to carry out their work effectively under this CONTRACT. However, the BUYER shall pay for the telephone or facsimile used by the BUYER's Supervisor or his/her assistants. The BUYER's Supervisor or his/her assistants or employees shall observe the work's rules and regulations prevailing at the BUILDER's and its sub-contractors premises. The BUILDER shall promptly provide to the BUYER's Supervisor and/or hisiher assistants and shall ensure that its sub-contractors shall promptly provide all ‘such information as he/she or they may reasonably request in connection with the construction of the VESSEL and her engines, equipment and machinery. 9. RESPONSIBILITY OF BUYER: The BUYER shall undertake and assure that the Supervisor shall carry out his duties hereunder in accordance with the Contract, the Specifications and the Korean Shipbuilding Industry Standards ("KS") or Japanese Shipbuilding Industry Standards (JIS") and in such a way as to avoid any unnecessary and unreasonable delay in the construction of the VESSEL, provided the VESSEL is being constructed by the BUILDER in accordance with this Contract and the Specifications. The BUYER's Supervisor shall abide by the work rules and regulations prevailing at the premises of the BUILDER and its sub-contractors. The BUYER's Supervisor shall, within the limits of the authority conferred upon him by the BUYER, make decisions or give advice to the BUILDER on behalf of the BUYER promptly on all problems arising out of, or in connection with the construction of the VESSEL and generally act in a reasonable manner with a view to cooperating with the BUILDER in the construction process of the VESSEL. ‘Astral Shpbulding Contractdoe——— ) batLTD/IASON LTD (as Agent) Shipbuilding Contract ARTICLE V. MODIFICATION, CHANGES AND EXTRAS 1, MODIFICATIONS OF SPECIFICATIONS: The Specifications in accordance with which the VESSEL is constructed may be modified and/or changed at any time hereafter by written agreement of the parties, hereto, provided that such modifications and/or changes or an accumulation thereof will not, in the BUILDER’s reasonable judgment, adversely affect the BUILDER'S. planning or program in relation to the BUILDER's other commitments, and provided, further, that the BUYER shall assent to adjustment of the Contract Price, time of delivery of the VESSEL and other terms of this Contract, if any, as hereinafter provided, Subject to the above, the BUILDER hereby agree to exert their best efforts to accommodate such reasonable request by the BUYER so that the said changes and/or modifications may be made at a reasonable cost and within the shortest period of time which is reasonable and possible. Any such agreement for modifications and/or changes shall include an agreement as to the increase or decrease, if any, in the Contract Price of the VESSEL together with an agreement as to any extension or reduction in the time of delivery, providing to the BUILDER additional securities satisfactory to the BUILDER, or any other alteration in the Contract, or the Specifications occasioned by such modifications and/or changes. ‘Such agreement may be effected by exchange of letters, or telefax, manifesting such agreement and be signed by the authorized representatives of the parties hereto, and shall be deemed to be incorporated into this Contract and the Specifications by reference and made a part hereof. Upon consummation of the agreement to modify and/or to change the Specifications, the BUILDER shall alter the construction of the VESSEL in accordance therewith and herewith, including any additions to, or deductions from, the work to be performed in connection with such construction. If due to whatever reasons, the parties hereto shall fail to agree ‘on the adjustment of the Contract Price or extension of time of delivery or providing additional security to the BUILDER or modification of any terms of this Contract which are necessitated by such modifications and/or changes, then the BUILDER shall have no obligation to comply with the BUYER’s request for any modification and/or changes. The BUILDER may make minor changes to the Specifications, if found necessary for introduction of improved production methods or otherwise, provided that the BUILDER shall first obtain the BUYER's approval which shall not be unreasonably withheld. The BUILDER may, however, refuse any amendment made by the BUYER if such amendment shall, in the judgment of the BUILDER, cause unreasonable delay or disturbance to the BUILDER'S construction schedule and / or planning or program. The BUILDER will in any event exert all best efforts to accommodate any modification and / or change reasonably requested by the BUYER at a reasonable cost and in the shortest time available. ‘Astral Shpbuling Contract doe———PHARUNG LTD/TASON LTD (as Agent) _ Shipbuilding Contract 2. CHANGE IN CLASS, ETC: In the event that, after the date the VESSEL’s keel has been laid, any requirements 8 to class, of as to rules and regulations to which the construction of the VESSEL is required to conform are altered or changed by the Classification Society or the other regulatory bodies authorized to make such alterations or changes, the following provisions shall apply (@) If such alterations or changes are compulsory for the VESSEL, either of the parties hereto, upon receipt of such information from the Classification Society or such other regulatory bodies, shall promptly transmit the same to the other in writing, and the BUILDER shall thereupon incorporate such alterations or changes into the construction of the VESSEL, provided that the BUYER shall first agree to adjustments required by the BUILDER or the BUYER in the Contract Price, the Delivery Date and other terms and conditions of this Contract and the Specifications occasioned by of resulting from such alterations or changes. ‘The BUILDER shall in any event exert its best efforts to accommodate any modification and / or change requested by the BUYER under paragraph 2 of this Article V, always at a reasonable cost and in the shortest time possible. (b) If such alterations or changes are not compulsory for the VESSEL, but the BUYER desires to incorporate such alterations or changes into the construction of the VESSEL, then, the BUYER shall notify the BUILDER of such intention. The BUILDER may accept such alterations or changes, provided that such alterations or changes will not, in the reasonable judgment of the BUILDER, adversely affect the BUILDER's planning or program in relation to the BUILDER's other commitments, and provided, further, that the BUYER shall first agree to adjustments required by the BUILDER in the Contract Price, the Delivery Date and other terms and conditions of this Contract and the Specifications occasioned by or resulting from such alterations or changes. ‘Agreements as to such alterations or changes under this Paragraph shall be made in the same manner as provided in Paragraph 1 of this Article for modifications or changes to the Specifications. For the avoidance of doubt any changes by the Classification Society or the other regulatory bodies of any requirements as to class or as to rules and regulations to which the construction of the VESSEL is required to conform prior to the date the Vessels keel has been laid shall be for the BUILDER’s account and shall be incorporated in the Specifications at no cost to the BUYER and with no other change to any term of this Contract. 3, SUBSTITUTION OF MATERIALS: In the event that any of the materials and/or equipment required by the Specifications or otherwise under this Contract for the construction of the VESSEL cannot be procured in time to effect delivery of the VESSEL, or are in short supply ‘Asal Snpbuling Conwactéoc——— ae / KoaPHARUNG LTD/IASON LTD (as Agent) Shipbuilding Contract or are reasonably high in price compared with the prevailing international market price, the BUILDER may, provided the BUILDER shall provide adequate evidence and the BUYER so agrees in writing, supply other materials and/or equipment of the equivalent quality, capable of meeting the requirements of the Classification Society national and/or international regulatory bodies, as per the Specifications and of the tules, regulations, requirements and recommendations with which the construction of the VESSEL must comply. Any agreement as to such substitution of materials, shall be effected at no extra cost to the BUYER or delayed delivery of the VESSEL, unless the BUYER specifically agrees thereto in writing 4, BUYER'S SUPPLIED ITEMS The BUYER shall deliver to the BUILDER at its shipyard the items as specified in the Specifications which the BUYER shall supply on its account by the time designated by the BUILDER Should the BUYER fail to deliver to the BUILDER such items within the time specified, the delivery of the VESSEL shall automatically be extended for a period of such delay, provided such delay in delivery of the BUYER's supplied items shall affect the delivery of the VESSEL. Furthermore, if the delay in delivery of the BUYER's supplied items should exceed thirty (30) days, the BUILDER shall be entitled to proceed with construction of the VESSEL without installation of such items in or onto the VESSEL, without prejudice to the BUILDER'S right hereinabove provided, and the BUYER shall accept the VESSEL so completed ‘The BUILDER shall be responsible for storing and handling of the BUYER's supplies as specified in the Specifications after delivery to the BUILDER and shall install them on board the VESSEL at the BUILDER’s expenses. Upon arrival of such shipment of the BUYER's supplied items, both parties shall Undertake a joint unpacking inspection. If any damages are rendering the BUYER's supplied items to be not suitable for installation, the BUILDER shall be entitled to refuse to accept the BUYER’s supplied items. ‘The BUILDER shall arrange the customs formalities for the BUYER's supplies at the BUYER's cost, however, the BUYER shall send the list of the BUYER's supplies with description, quantities, unit price and country of origin etc. to the BUILDER at least 20 days before shipment. The shipping documents shall be made in a form acceptable to the BUILDER and sent to the BUILDER in due course so that the BUILDER can arrange the customs formalities in time. ‘Asal Shpbulting Contract doc~—— J he / KoaPHARUNG LTD/IASON LTD (as Agent) Shipbuilding Contract ARTICLE VI. TRIALS 1. NOTICE: The BUYER shall receive from the BUILDER at least fifteen (15) days prior notice and seven (7) days prior notice in writing or by fax and/or email confirming the time and place of the trial run of the VESSEL, as described in the Specifications (hereinafter referred to as ‘the Trial Run’) and the BUYER shall promptly acknowledge receipt of such notice. ‘The BUYER shall have its Supervisor on board the VESSEL to witness such Trial Run, and to check upon the performance of the VESSEL during the same. Failure in attendance of the Supervisor of the BUYER at the Trial Run of the VESSEL for any reason whatsoever after due notice to the BUYER as above has been provided shall have the effect to extend the date for delivery of the VESSEL by the period of delay caused by such failure to be present. However, if the Trial Run is delayed more than seven (7) days by reason of the failure of the BUYER’ s Supervisor to be present after receipt of due notice as provided above , then in such event, the BUYER shall be deemed to have waived its right to have its Supervisor on board the VESSEL at the trial run, and the BUILDER may conduct the Trial Run without the Supervisor of the BUYER being present, provided that one or more surveyors, from the Classification Society shall be present throughout such trial run and in such case the BUYER shall be obliged to accept the VESSEL on the basis of a certificate of the BUILDER endorsed by the Classification Society that the VESSEL, upon Trial Run subject to minor alterations and corrections as provided in this, Article, if any, is found to conform to this Contract and the Specifications. 2. WEATHER CONDITION: The trial run shall be carried out under the weather condition which is deemed favourable enough by the judgment of the Classification Society. Favourable weather conditions referred to in this clause are agreed as being those up to and including wind force 3 on the Beaufort scale. In the event of unfavourable weather on the date specified for the trial run, the same shall take place on the first available day thereafter that the weather condition permits. It is agreed that, if during the trial run of the VESSEL, the weather should suddenly become so unfavourable that orderly conduct of the trial run can no longer be continued, the trial run shall be discontinued and postponed until the first favourable day next following, unless the BUYER shall assent in writing to acceptance of the VESSEL on the basis of the trial run already made before such discontinuance has occurred Any delay of the trial run caused by such unfavourable weather condition shall operate to postpone the Delivery Date by the period of delay involved and such delay shall be deemed as a permissible delay in the delivery of the VESSEL. 3, HOW CONDUCTED: ‘Astral Shpbulting Conrectdoc~——PHARUNG LTD/TASON LTD (as Agent) Shipbuilding Contract (a) All expenses in connection with the Trial Run and the quay trials are to be for the account of the BUILDER and the BUILDER shall provide at its own expense the necessary crew to comply with conditions of safe navigation. The trial run and the quay trials shall be conducted in the manner prescribed in the Specifications, and shall prove fulfilment of the performance requirements for the trial run as set forth in the Specifications. The course of trial run shall be determined by the BUILDER. The BUILDER shall have the right to repeat any trial whatsoever as it deems necessary. 4, METHOD OF ACCEPTANCE OR REJECTION: (a) As soon as possible after the completion of the trial run, the BUILDER shall give the BUYER a notice by fax and/or email confirmed in writing of completion of the trial run, as and if the BUILDER considers that the results of the trial run indicate conformity of the VESSEL to this Contract and the Specifications’ navigation. The Trial Run shall be conducted in the manner prescribed in the Specifications and shall prove fulfilment of the performance required for the Trial Run as set forth in the Specifications. The BUYER shall, within six (6) days after receipt of such notice from the BUILDER, notify the BUILDER by fax and/or e-mail confirmed in writing of its acceptance or rejection of the VESSEL. (b) However, should the results of the trial run indicate that the VESSEL, or any part or equipment thereof, does not conform to the requirements of this Contract and/or the Specifications, then the BUILDER shall investigate with Supervisor the cause of failure and the proper steps shall be taken to remedy the same and shall make whatever corrections and alterations and/or Re-Trial Run or Runs as may be necessary without extra cost to the BUYER, and upon Notification by the BUILDER of completion of such alterations or corrections and/or re-trial or re-trials, the BUYER, shall, within two (2) days after receipt of such notice from the BUILDER, notify the BUILDER of its acceptance or rejection of the VESSEL together with the reason thereof on the basis of the alterations and corrections and/or re-trial or re-trials by the BUILDER. (0) In any event that the BUYER rejects the VESSEL, the BUYER shall indicate in its notice of rejection in what respect the VESSEL, or any part or equipment thereof does not conform to this Contract and/or the Specifications. (d) However, the BUYER shall not be entitled to reject the VESSEL by reason of any minor ot insubstantial items judged from the point of view of standard shipbuilding and shipping practice as not being in conformity with the Specifications, but, in that case, the BUILDER shall not be released from the obligation to correct and/or remedy such minor or insubstantial items as soon as practicable after the delivery of the VESSEL. (e) In any event that the BUYER fails to notify the BUILDER by fax and/or e-mail confirmed in writing of the acceptance of or the rejection together with the reason therefore of the VESSEL within the period as provided in the above Sub- ‘Asal Shipbuling Correct. doc =PHARUNG LTD/TASON LTD (as Agent) Shipbuilding Contract paragraph (a) or (b), the BUYER shall be deemed to have accepted the VESSEL (f) If the BUILDER does not agree to the rejection of the VESSEL by the BUYER under this paragraph, either the BUYER or the BUILDER may submit any dispute as to the conforming thereof with the requirements of this Contract and ‘Specifications to the Classification Society as regards matters of class or to any independent expert or arbitration under Article XIII hereof. 5. EFFECT OF ACCEPTANCE: ‘Acceptance of the VESSEL as above provided shall be final and binding so far as conformity of the VESSEL to this Contract and the Specifications is concerned and shall preclude the BUYER from refusing formal delivery of the VESSEL as hereinafter provided, if the BUILDER complies with all other procedural requirements for delivery as provided in Article VII hereof. If, at the time of delivery of the VESSEL, there are deficiencies in the VESSEL, such deficiencies should be resolved in such way that if the deficiencies are of minor importance, and do not in any way affect the safety or the operation of the VESSEL, its crew, passengers or cargo the BUILDER shall be nevertheless entitled to tender the VESSEL for delivery and the BUYER shall be nevertheless obliged to take delivery of the VESSEL, provided that () the BUILDER shall for its own account remedy the deficiency and fulfil the requirements as soon as possible, or ji) if elimination of such deficiencies will affect timely delivery of the VESSEL, then the BUILDER shall indemnify the BUYER for any direct cost reimbursement in association with remedying these minor non-conformities elsewhere from VIETNAM as a consequence thereof, excluding, however, loss of time and/or loss of profit, It is provided that in the case of qualified acceptance, any matters which were mentioned in the notice of the qualified acceptance by the BUYER as requiring correction have been corrected to BUYER's satisfaction. 6. CONSUMABLE STORES. The BUILDER shall load the VESSEL with the required quantity of fuel oil, lubricating oil, hydraulic oll and greases, fresh water, and other supplies and stores. necessary to conduct the trials as set forth in the Specifications. The necessary ballast (fuel oll, fresh water and such other ballast as may be required) to bring the VESSEL to the trial load draft, as specified in the Specifications, shall be supplied and paid for by the BUILDER whilst lubricating oil, hydraulic oil and greases shall be supplied and paid for by the BUYER within the time advised by the BUILDER for the conduct of sea trials as well as for use before the delivery of the VESSEL to the BUYER. The fuel oil as well as lubricating oil, hydraulic oil and greases shall be in ‘Atal Spbuling Cortractdoc~ =PHARUNG LTD/TASON LTD (as Agent) Shipbuilding Contract accordance with the engine specifications and the BUYER shall decide and advise the BUILDER of the supplier's name for lubricating oil, hydraulic oil and greases before the work-commencement of the VESSEL, provided that the supplier shall be acceptable to the BUILDER andior the makers of all the machinery. ‘Any fuel oil, fresh water or other consumable stores furnished and paid for by the BUILDER for trial runs remaining on board the VESSEL, at the time of acceptance and delivery of the VESSEL by the BUYER, shall be bought by the BUYER from the BUILDER at the BUILDER's original purchase price for such supply in Vietnam and payment by the BUYER thereof shall be made at the time of delivery of the VESSEL. The BUILDER shall pay the BUYER at the time of delivery of the VESSEL for the consumed quantity of any lubricating oil and greases which were furnished and paid for by the BUYER at the BUYER’s purchase price thereof. The consumed quantity of lubricating oils and greases shall be calculated on the basis of the difference between the remaining amount, including the same remaining in the main engine, other machinery and their pipes, stem tube and the like, and the supplied amount. ‘Asal Shpbulting Contrec.doc~ =PHARUNG LTD/TASON LTD (as Agent) Shipbuilding Contract ARTICLE Vil. DELIVERY 4. TIME AND PLACE, ‘The VESSEL shall be delivered safely afloat by the BUILDER to the BUYER at the BUILDER's Shipyard, in accordance with the Specifications and with all Classification and Statutory Certificates and after completion of Trial Run (or, as the case may be, re-Trial or re-Trials) and acceptance by the BUYER in accordance with the provisions of Article VI hereof on or before 30 September 2008 (‘the Scheduled Delivery date’) provided that, in the event of delays in the construction of the VESSEL or any Performance required under this Contract due to causes which under the terms of the Contract permit extension of the time for delivery, the aforementioned time for delivery of the VESSEL shall be extended accordingly. The aforementioned date or such later date to which delivery is extended pursuant to the terms of this Contract is hereinafter called the "Delivery Date” 2. WHEN AND HOW EFFECTED Provided that the BUYER and the BUILDER shall each have fulfiled all of their respective obligations as stipulated in this Contract, delivery of the VESSEL shall be effected forthwith by the concurrent delivery by each of the parties hereto, one to the other, of the Protocol of Delivery and Acceptance, acknowledging delivery of the VESSEL by the BUILDER and acceptance thereof by the BUYER, which Protocol shall be prepared in quadruplicate and executed by each of the parties hereto. 3. DOCUMENTS TO BE DELIVERED TO THE BUYER ‘Acceptance of the VESSEL by the BUYER shall be conditional to receipt by the BUYER from the BUILDER of the following documents (subject to the provision contained in Article V 2 hereof) which shall accompany the aforementioned Protocol of Delivery and Acceptance: (a) PROTOCOL OF TRIALS of the VESSEL made by the BUILDER pursuant to the Specifications. (b) PROTOCOL OF INVENTORY of the equipment of the VESSEL including spare part and the like, all as specified in the Specifications, made by the BUILDER, (©) PROTOCOL OF STORES OF CONSUMABLE NATURE made by the BUILDER referred to under Paragraph 5 of Article VI hereof. ‘eval Shipulting Contrac.doc=— ~ WA Kuk.PHARUNG LTD/TASON LTD (as Agent) Shipbuilding Contract (d) () (g) (h) wo (K) “As Built’ FINISHED DRAWINGS AND PLANS pertaini stipulated in the Specifications, made by the BUILDER. to the VESSEL as PROTOCOL OF DEADWEIGHT AND INCLINING EXPERIMENT, made by the BUILDER, ALL CERTIFICATES required to be fumished upon delivery of the VESSEL pursuant to this Contract, the Specifications and the customary shipbuilding practice. Certificates shall be issued by relevant Authorities or Classification Society. The VESSEL shall comply with the above rules and regulations which are in force at the time of signing the Contract. All the certificates shall be delivered in one (1) original and one (1) copy to the VESSEL and two (2) copies to the BUYER. If, through no fault on the part of the BUILDER, the full term certificate or certificates are unable to be issued at the time of delivery by the Classification Society or any third party other than the BUILDER, then the provisional certificate or certificates as issued by The Classification Society or the third party other than the BUILDER with the full term certificates to be furnished by the BUILDER after delivery of the VESSEL and in any event before the expiry of the provisional certificates shall be acceptable to the BUYER, DECLARATION OF WARRANTY issued by the BUILDER that the VESSEL is delivered to the BUYER free and clear of any liens, charges, claims, mortgages, or other encumbrances upon the BUYER's title thereto, and in particular, that the VESSEL is absolutely free of all burdens in the nature of imposts, taxes or charges imposed by the province or country of the port of delivery, as well as of all iablities of the BUILDER to its sub-contractors, employees and crews and/or all liabilities arising from the operation of the VESSEL in Trial Run or Trial Runs, or otherwise, prior to delivery. COMMERCIAL INVOICE made by the BUILDER. BILL OF SALE made by the BUILDER duly executed by seal, notarially attested and appropriately legalized BUILDER's CERTIFICATE stating that the VESSEL has been built by order and on account of the BUYER. evidence that all customs’ procedures for the export of the VESSEL from Vietnam have been completed by the BUILDER free of any charge to the BUYER ‘Asal Shipbuling Contec. doc —PHARUNG LTD/TASON LTD (as Agent) pbuilding Contract (). Any other document reasonably required by the BUYER for assisting the BUYER in registering the VESSEL under the laws of the flag to be chosen by the BUYER in accordance with Article |, Paragraph 9 hereof or as the BUYER'S financing bank may reasonably require provided the BUYER notifies the BUILDER within reasonable time. 4, TITLE ANDRISK Title to and risk of the VESSEL shall pass to the BUYER only upon delivery thereof. As stated above, it being expressly understood that, until such delivery is effected, title to the VESSEL, and her equipment, shall remain at al times with the BUILDER and are at the entire risk of the BUILDER 5. REMOVAL OF VESSEL The BUYER shall take possession of the VESSEL immediately upon delivery and acceptance thereof, and shall remove the VESSEL from the premises of the BUILDER within seven (7) days after delivery and acceptance thereof is effected. If the BUYER shall not remove the VESSEL from the premises of the BUILDER within the aforesaid seven (7) days, then, in such event, without prejudice to the BUILDER'S right to require the BUYER to remove the VESSEL immediately at any time thereafter, the BUYER shall pay to the BUILDER the reasonable handling and mooring charge of the VESSEL. 6. TENDER OF THE VESSEL If the BUYER fails to take delivery of the VESSEL after completion thereof according to this Contract and the Specifications without justified reason, the BUILDER shall have the right to tender the VESSEL for delivery after compliance with all procedural requirements as above provided. ‘Atal Siping Cortractdoc=— —PHARUNG LTD/TASON LTD (as Agent) Shipbuilding Contract ARTICLE VIII. DELAYS & EXTENSION OF TIME FOR DELIVERY 4, CAUSE OF DELAY If, at any time before actual delivery, either the construction of the VESSEL, or any performance required hereunder as a prerequisite of delivery of the VESSEL, is delayed due to war, blockade, revolution, insurrection, mobilization, civil commotions, riots, strikes, sabotage, lockouts, , high humidity, Acts of God or the public enemy, plague or other epidemics, quarantines, freight embargoes, if any, earthquakes, tidal waves, typhoons, hurricanes, storms, heavy rain (issued by hydro-meteorological sea forecast bureau certified by local chamber of commerce), or other causes beyond the control of the BUILDER or of its sub-contractors, as the case may be, or by force majeure of any description, whether of the nature indicated by the forgoing or not, or by destruction of the BUILDER or works of the BUILDER or its sub-contractors, or of the VESSEL or any part thereof, by fire, flood, or other causes beyond the control of the BUILDER or its sub-contractors as the case may be, or due to the bankruptcy of the equipment and/or material supplier or suppliers, or due to the delay caused by acts of God in the supply of parts essential to the construction of the VESSEL, or delays in the BUILDER’s other commitments resulting from any such causes as described in this Article which in tum delay the construction of the VESSEL or the BUILDER’s performance under the Contract, or delays caused by the Classification Society or the BUYER's faulty action or omission, then, in the event of delay due to the happening of any of the aforementioned contingencies, the BUILDER shall not be liable for such delay and the time for delivery of the VESSEL under this Contract shall be extended without any reduction in the Contract Price for a period of time which shall not exceed the total accumulated time of all such delays, subject nevertheless to the BUYER's right of cancellation under Paragraph 3 of this Article and subject however to all relevant provisions of this Contract which authorize and permit extension of the time of delivery of the VESSEL. 2. NOTICE OF DELAY Within seven (7) days from the date of commencement of any delay on account of which the BUILDER claims that itis entitled under this Contract to an extension of the time for delivery of the VESSEL, the BUILDER shall advise the BUYER by telefax confirmed in writing, of the date such delay commenced, and the reasons therefore. Likewise within seven (7) days after such delay ends, the BUILDER shall advise the BUYER in writing or by telefax confirmed in writing, of the date such delay ended, and also shall specify the maximum period of the time by which the date for delivery of the VESSEL is extended by reason of such delay. Failure by the BUILDER to make any of the notifications aforesaid within the time limits aforesaid shall be deemed a waiver by the BUILDER to claim extension under this paragraph and ‘aval Shipbatiing Conec.éoc— = |" LoaPHARUNG LTD/TASON LTD (as Agent) Shipbuilding Contract failure of the BUYER to acknowledge the BUILDER'S notification of any claim for extension of the Delivery Date within seven (7) days after receipt by the BUYER of such notification, shall be deemed to be a waiver by the BUYER of its right to object to such extension. 3. RIGHT TO CANCEL FOR EXCESSIVE DELAY If the total accumulated time of all delays on account of the causes specified in Paragraph 1 of this Article exceed two hundred and ten (210) days or more, or due to default in performance by the BUYER, or due to delays in delivery of the BUYER's supplied items, and excluding delays due to causes which, under Article V, VI, XI and XII hereof, permit extension or postponement of the time for delivery of the VESSEL, then in such event, the BUYER may in accordance with the provisions set out herein cancel this Contract by serving upon the BUILDER telefax notice of cancellation which shall be confirmed in writing and the provisions of Article X of this Contract shall apply. The BUILDER may, at any time, after the accumulated time of the aforementioned delays justifying cancellation by the BUYER as above provided for, demand in writing that the BUYER shall make an election, in which case the BUYER shall, within thirty (30) days after such demand is received by the BUYER either notify the BUILDER of its intention to cancel, or consent to an extension of the time for delivery to an agreed future date, it being understood and agreed by the parties hereto that, if any further delay occurs on account of causes justifying cancellation as specified in this Contract, the BUYER shall have the same right of cancellation upon the same terms as hereinabove provided 4, DEFINITION OF PERMISSIBLE DELAY Delays on account of such causes as provided for in Paragraph 1 of this Article and any other extensions of a nature which under the terms of this Contract permit postponement of the Delivery Date, shall be understood to be (and are herein referred to as) permissible delays, and are to be distinguished from non-permissible delays on account of which the Contract Price of the VESSEL is subject to adjustment as provided for in Aricle Ill hereof. ‘Astral Shipbuilding Conract.doc———PHARUNG LTD/TASON LTD (as Agent) Shipbuilding Contract ARTICLE IX. WARRANTY OF QUALITY 4. GUARANTEE OF MATERIAL AND WORKMANSHIP The BUILDER, for a period of twelve (12) months following delivery to and acceptance by the BUYER of the VESSEL, guarantees the VESSEL, her hull and machinery and all parts and equipment thereof that are manufactured or furnished or supplied by the BUILDER's shipyard and/or sub-contractors under this Contract, against major defects which are due to defective materials, and/or poor ‘workmanship or faulty constructional miscalculation on the part of the BUILDER'S shipyard and/or its subcontractors. Excluding however, exclude any parts or any items for the VESSEL which is supplied or designated by the BUYER or any other bodies on behalf of the BUYER unless the deficiencies in respect of the parts or items which are supplied by or on behalf of the BUYER are caused by the failure or items of the BUILDER properly to store, handle and install the same. 2. NOTICE OF DEFECTS The BUYER shall notify the BUILDER in writing, or by telefax confirmed in writing, as promptly as possible, after discovery of any defect or deviations for which a claim is made under this guarantee. The BUYER's written notice shall describe the nature of the defect and the extent of the damage caused thereby. The BUILDER shall have no obligation under this guarantee for any defects discovered prior to the expiry date of the guarantee, unless notice of such defects, is received by the BUILDER not later than thirty (30) New York business days after such expiry date. Telefax advice with brief details explaining the nature of such defect and extent of damage within thirty (30) days after such expiry date and that a claim is forthcoming will be sufficient compliance with the requirements as to time. 3, REMEDY OF DEFECTS The BUILDER shall remedy at its expense for the defects as specified in subparagraph (1) of this Article, against which the VESSEL or major part of the ‘equipment thereof is guaranteed under this Article by making all necessary repairs and/or replacement. Such repairs and/or replacement will be made by the BUILDER. However, if itis impractical to make the repair by the BUILDER, and if forwarding by the BUILDER of replacement parts, and materials can not be accomplished without impairing or delaying the operation or working of the VESSEL, then, in any such event, the BUYER shall, cause the necessary repairs or replacements to be made elsewhere at the discretion of the BUYER provided that the BUYER shall frst and in all events, will, as soon as possible, give the BUILDER notice in writing, or by telefax confirmed in writing of the time and place such repairs will be made and, if the VESSEL is not thereby delayed, or her operation or working is not thereby delayed, ‘Astral Sripbulding Contactdee~ =PHARUNG LTD/TASON LTD (as Agent) Shipbuilding Contract or her operation or working is not thereby impaired, the BUILDER shall have the right to verify by its own representative(s) or that of Classification Society the nature and extent of the defects complained of and the repair costs, expenses thereby. The BUILDER shall, in such cases, promptly advise the BUYER, by telefax, after such examination has been completed, of its acceptance or rejection of the defects as ones that are subject to the guarantee herein provided. Upon the BUILDER'S acceptance of the defects as justifying remedy under this Article, or upon award of the arbitration so determining, the BUILDER shall compensate the BUYER an amount equal to the cost of making good the same. In all minor cases, the Guarantee Engineer, as hereinafter provided for, will act for and on behalf of the BUILDER. In any circumstances as set out below, the BUILDER shall immediately pay to the BUYER in United States Dollars by telegraphic transfer the actual cost for such repairs or replacements including forwarding charges, or at the average cost for making similar repairs or replacements, but not exceeding one hundred and thirty percent (130%) of the cost of making such a repair or replacement at the SHIPYARD: (2) Upon the BUILDER’s acceptance of the defects as justifying remedy under this, Article, or (©) If the BUILDER neither accepts nor rejects the defects as above provided, nor request arbitration within thirty (30) days after its receipt of the BUYER's notice of defects, In any case, the VESSEL shall be taken at the BUYER's cost and responsibility to the place selected ready in all respects for such repairs or replacements and in any event, the BUILDER shall not be responsible for towage, dockage, wharfage, port charges and anything else incurred for the BUYER’s getting and keeping the VESSEL for such repairing or replacing If a defect recurs within twelve (12) months of repair under the BUILDER'S Guarantee, then the BUILDER shall repair and remedy the same at the BUILDER'S. expense and the period of BUILDER'S Guarantee for that defect shall be so extended provided that the total accumulated period of guarantee shall not exceed eighteen (18) months from the Delivery Date. Any dispute shall be referred to arbitration in accordance with the provisions of Article Xill hereof. 4, EXTENT OF THE BUILDER'S LIABILITY The BUILDER shall have no obligation andior liabilities with respect to defects discovered after the expiration of the period of guarantee specified above. ‘Astral Shpbulding Contract. doc———PHARUNG LTD/IASON LTD (as Agent) Shipbuilding Contract ‘The BUILDER shall be liable to the BUYER for defects and damages caused by any of the defects specified in Paragraph 1 of this Article provided that such liability of the BUILDER shall be limited to damage occasioned within the guarantee period specified in Paragraph 1 above. The BUILDER shall not be obligated to repair, or to be liable for, damages to the VESSEL, or to any part of the equipment thereof, due to ordinary wear and tear or caused by the defects other than those specified in Paragraph 1 above, nor shall there be any BUILDER'S liability hereunder for defects in the VESSEL, or any part of the equipment thereof, caused by fire or accidents at sea or elsewhere, or mismanagement, over loading, improper loading, improper towage, accidents, negligence, or wilful neglect, on the part of the BUYER, its ‘employees or agents including the VESSEL's officers, crew and passengers, or any persons on or doing work on the VESSEL other than the BUILDER, its employees, agents or sub-contractors. Likewise, the BUILDER shall not be liable for defects in the VESSEL, or the equipment or any part thereof, due to repairs or replacement which were made by those other than the BUILDER andior their sub-contractors. Upon delivery of the VESSEL to the BUYER, in accordance with the terms of the Contract, the BUILDER shall thereby and thereupon be released of all responsibilty and liability whatsoever and howsoever arising under or by virtue of this Contract (save in respect of those obligations to the BUYER expressly provided for in this, Article IX) including without limitation, any responsibility or liability for defective workmanship, materials or equipment, design or in respect of any other defects whatsoever and any loss or damage resulting from any act, omission or default of the BUILDER. The BUILDER shall, in no circumstances, be liable for any consequential loss or special loss, or expenses arising from any cause whatsoever including, without limitation, loss of time, loss of profit or earings or demurrage directly from any commitments of the BUYER in connection with the VESSEL. The Guarantee provided in this Article and the obligations and the liabilities of the BUILDER hereunder are exclusive and in lieu of and the BUYER hereby waives all other remedies, warranties, guarantees or liabilities, express or implied, arising by Law or otherwise (including without limitation any obligations of the BUILDER with respect to fitness, merchantability and consequential damages) or whether or not occasioned by the BUILDER'S negligence. This Guarantee shall not be extended, altered or varied except by a written instrument signed by the duly authorized representatives of the BUILDER, and the BUYER. It should be noted however that the limitation of the liability of the BUILDER provided for in this paragraph shall not apply should it be established that the BUILDER or its employees or sub contractors or agents acted fraudulently or recklessly in carrying out the VESSEL's construction. 5, GUARANTEE ENGINEER The BUILDER may appoint subject to BUYER’s agreement, one Guarantee Engineer to serve the VESSEL as the BUILDER's representative for a period of ‘Asal Shipbulting Conivact doc —PHARUNG LTD/TASON LTD (as Agent) _ Shipbuilding Contract three (3) months from the delivery of the VESSEL. The BUYER, and its employees, shall give such Guarantee Engineer full co-operation in carrying out his duties as the representative of the BUILDER on board the VESSEL. The BUYER shall accord the Guarantee Engineer the treatment comparable to the VESSEL's Chief Engineer, and shall provide him with accommodation and subsistence at no cost to the BUILDER and/or the Guarantee Engineer. The BUYER shall pay to the Guarantee Engineer, if he is Vietnamese, the sum of United States Dollars Three Thousand only (US$ 3,000) per month or, if he is Japanese or Korean, the sum of United States Dollars Four Thousand only (US$ 4,000) per month, in either case to cover his/their miscellaneous expenses including wages and also the BUYER shall pay the expense of repatriation to Hanoi by air upon termination of his service, the expense of his communications with the BUILDER when made in performance of his duties as the Guarantee Engineer and the expenses, if any, of his medical and hospital care. The BUYER, its successor(s) and/or assign(s), shall be liable to and indemnify the BUILDER andlor the Guarantee Engineer and/or the BUILDER for personal injuries, including death and damages to, or loss or destruction of property of the Guarantee Engineer, if such death, injuries, damages, loss and/or destruction were caused by gross negligence or willful misconduct of the BUYER, its successor(s) and/or assign(s) or its ‘employees and/or agents. Pertaining to the detailed particulars of this Paragraph, an agreement will be made according to this effect between the parties hereto upon delivery of the VESSEL. ‘aval Shipbuilding Cora. doc——— 7PHARUNG LTD/IASON LTD (as Agent) Shipbuilding Contract ARTICLE X. REJECTION AND RESCISSION BY THE BUYER 1. NOTICE: The payments made by the BUYER prior to the delivery of the VESSEL shall be in the nature of advances to the BUILDER. In the event that the BUYER shall exercise its right of rescission of this Contract under and pursuant to any of the provisions of this Contract specifically permitting the BUYER to do so, then the BUYER shall notify the BUILDER in writing or by fax and/or email confirmed in writing, and such rescission shall be effective as of the date notice thereof is received by the BUILDER. 2. REFUND BY BUILDER: Thereupon the BUILDER shall promptly refund to the BUYER the full amount of all sums paid by the BUYER to the BUILDER on account of the VESSEL, together with interest thereon as herein provided unless the BUILDER proceeds to the arbitration under the provisions of Article Xill hereof latest within twenty one (21) days from any written demand of the BUYER to the BUILDER's Bank to make a refund under the Refund Guarantee. If the BUYER'’s cancellation or rescission of this Contract is disputed by the BUILDER by instituting arbitration as aforesaid, then no refund shall be made by the BUILDER, and the BUYER shall not be entitled to demand repayment from BUILDER's Bank under its guarantee, until the arbitration award between the BUYER and the BUILDER or, in case of appeal or appeals by the BUILDER on the arbitration award or any court orders, by the final court order, which shall be in favour of the BUYER, declaring the BUYER'S cancellation and/or rescission justified, is made and delivered to the BUILDER by the arbitration tribunal or final competent London Court having jurisdiction on the dispute. In the event that the BUILDER is obligated to make refundment, the BUILDER shall pay the BUYER interest in United States Dollars at the rate of six percent (6%), if the cancellation or rescission of the Contract is exercised by the BUYER for the delay of aggregate Two Hundred and Ten (210) days in accordance with the provision of Paragraph 3 of Article VIII or the events described in Article I, Paragraphs 1(c). 2(c), 3(¢), 4(c) or 5(c) hereof, (however in the event of total loss as described in Article XII of this Contract, then no interest will be refunded on the amount required herein to be refunded to the BUYER) computed from the respective dates when such sums were received in the bank account as nominated by the BUILDER to the date of remittance by telegraphic transfer of such refund to the BUYER by the BUILDER. 3, RETURN OF BUYER'S SUPPLIES: If pursuant to the provisions of this Contract, the BUILDER is required to refund to the BUYER the installments paid by the BUYER to the BUILDER, the BUILDER shall return to the BUYER all of the BUYER's supplies not incorporated into the VESSEL and pay to the BUYER an amount equal to the purchased price to the BUYER of those supplies incorporated into the VESSEL. ‘Asal Shpulding Gontvactdoc=— — a fi Jud.PHARUNG LTD/IASON LTD (as Agent) Shipbuilding Contract 4, DISCHARGE OF OBLIGATIONS: Upon such refund by the BUILDER to the BUYER, all obligations, duties and liabilities of each of the parties hereto to the other under this Contract shall be forthwith completely discharged ‘Asval Shpbullng Contract doe= = S / HeatPHARUNG LTD/IASON LTD (as Agent) Shipbuilding Contract ARTICLE XI. BUYER'S DEFAULT 1. DEFINITION OF DEFAULT ‘The BUYER shall be deemed in default of its obligation under this Contract if any of the following events occurs: (a) The BUYER fails to pay the First, Second, Third or Fourth installments to the BUILDER within three (3) days after such installment becomes due and payable under the provisions of Article Il hereof, or (b) The BUYER fails to pay the fifth installment to the BUILDER concurrently with the delivery of the VESSEL by the BUILDER to the BUYER as provided in Article II hereof; or (©) The BUYER fails to take delivery of the VESSEL, when the VESSEL is duly tendered for delivery by the BUILDER under the provisions of Article VII hereof. 2. NOTICE OF DEFAULT If the BUYER is in default of payment or in performance of its obligations as provided hereinabove, the BUILDER shall notify the BUYER to that effect by telefax after the date of occurrence of the default as per Paragraph 1 of this Article and the BUYER shall forthwith acknowledge by telefax to the BUILDER that such notification has been received. In case the BUYER does not give the aforesaid telefax acknowiedgment to the BUILDER within three (3) calendar days it shall be deemed that such notification has been duly received by the BUYER. 3. INTEREST AND CHARGE (@) If the BUYER is in default of payment as to any installment as provided in Paragraph 1 (a) and/or 1 (b) of this Article, the BUYER shall pay interest on such installment the rate of six percent (6%) per annum until the date of the payment of the full amount, including all aforesaid interest. In case the BUYER shall fail to take delivery of the VESSEL when required to as provided in Paragraph 1 (c) of this Article, the BUYER shall be deemed in default of payment of the fifth installment and shall pay interest thereon at the same rate as aforesaid from and including the day on which the VESSEL is tendered for delivery by the BUILDER, as provided in Article VII Paragraph 7 hereof. (b) In any event of default by the BUYER under 1 (a) or 1 (b) or 1 (c) above, the BUYER shall also pay all related costs, charges and expenses directly incurred by the BUILDER. 4, DEFAULT BEFORE DELIVERY OF THE VESSEL ‘Asal Stipbuling Contact doc=— ~ A beak, -PHARUNG LTD/TASON LTD (as Agent) Shipbuilding Contract (@) If any default by the BUYER occurs as defined in Paragraph 1 (a) or 1 (b) or 1 (©) of this Article, the Delivery Date shall, at the BUILDER's option, be postponed for a period of continuance of such default by the BUYER. (b) If any such default as defined in Paragraph 1 (a) or 4 (b) or 1 (c) of this Article committed by the BUYER continues for a period of fifteen (15) days, then, the BUILDER shall have all following rights and remedies: () The BUILDER may, at its option, cancel or rescind this Contract, provided the BUILDER has notified the BUYER of such default pursuant to Paragraph 2 of this Article, by giving notice of such effect to the BUYER by telefax confirmed in writing. Upon receipt by the BUYER of such telefax notice of cancellation or rescission, all of the BUYER's Supplies shall forthwith become the sole property of the BUILDER, and the VESSEL and all its equipment and machinery shall be at the sole disposal of the BUILDER for sale or otherwise; and (ii) In the event of such cancellation or rescission of this Contract, the BUILDER, subject to the provisions of Paragraph 5 below, shall be entitled to retain any installment or installments of the Contract Price paid by the BUYER to the BUILDER on account of this Contract. 5. SALE OF THE VESSEL (a) In the event of cancellation or rescission of this Contract as above provided, the BUILDER shall have full right and power either to complete or not to complete the VESSEL as it deems fit, and to sell the VESSEL at a public or private sale on such terms and conditions as the BUILDER thinks fit without being answerable for any loss or damage occasioned to the BUYER thereby. In the case of sale of the VESSEL, the BUILDER shall give telefax or written notice to the BUYER. {b) In the event of the sale of the VESSEL in its completed state, the proceeds of sale received by the BUILDER shall be applied firstly to payment of all ‘expenses attending such sale and otherwise incurred by the BUILDER as a result of the BUYER’s default, and then to payment of all unpaid installments and/or unpaid balance of the Contract Price and interest on such installment at the interest rate as specified in the relevant provisions set out above from the respective due dates thereof to the date of application (0) Inthe event of the sale of the VESSEL in its incomplete state, the proceeds of sale received by the BUILDER shall be applied firstly to all expenses attending such sale and otherwise incurred by the BUILDER as a result of the BUYER'S default, and then to payment of all costs of construction of the VESSEL (such 7 ‘Atal Shipbuling Contract doe—— — 1 amaPHARUNG LTD/IASON LTD (as Agent) Shipbuilding Contract @ costs of construction, as herein mentioned, shall include but are not limited to all costs of labour and/or prices paid or to be paid by the BUILDER for the equipment and/or technical design and/or materials purchased or to be purchased, installed and/or to be installed on the VESSEL) and/or any fees, charges, expenses and/or royalties incurred and/or to be incurred for the VESSEL less the installments so retained by the BUILDER, and compensation to the BUILDER for a reasonable sum of loss of profit due to the cancellation or rescission of this Contract. In either of the above events of sale, if the proceeds of sale exceeds the total of the amounts to which such proceeds are to be applied as aforesaid, the BUILDER shall promptly pay the excesses to the BUYER without interest, provided, however that the amount of each payment to the BUYER shall in no event exceed the total amount of installments already paid by the BUYER and the cost of the BUYER's supplies, if any. (e) If the proceed of sale are insufficient to pay such total amounts payable as ‘Asal Sipbulting Cortrac.doc— = ) aforesaid, the BUYER shall promptly pay the deficiency to the BUILDER upon request.Contra: PHARUNG LTD/IASON LTD (as Agent) Shipbuildi ARTICLE Xil. INSURANCE. 4, EXTENT OF INSURANCE COVERAGE The BUILDER shall, at its own cost and expense, keep the VESSEL and all machinery, materials, equipment, appurtenances and outfit, delivered to the BUILDER's shipyard for the VESSEL or built into, or installed in or upon the VESSEL, including items of equipment furnished by the BUYER, fully insured with Vietnam Insurance Corporation (BAOVIET) or other first class insurance company in Vietnam, to be mutually agreed, from the date of laying the keel of the VESSEL, until same is completed, delivered to and accepted by the BUYER, under coverage corresponding to the BAOVIET Clauses for BUILDER's risk. A duly legalized copy of the BUILDER’s insurance policy in general and in particular for the VESSEL shall be sent to the BUYER, The amount of such insurance coverage shall up to the date of delivery of the VESSEL be in an amount at least equal to the Contract Price plus the value of the BUYER's Supplies. The policy referred to hereinabove shall be taken out in the name of the BUILDER and all losses under such policy shall be payable to the BUILDER, 2. APPLICATION OF RECOVERED AMOUNT (@) Partial Loss: In the event the VESSEL shall be damaged by any insured cause whatsoever prior to acceptance and delivery thereof by the BUYER and in the further event that such damage shall not constitute an actual or a constructive total loss of the VESSEL, the BUILDER shall apply the amount recovered under the insurance Policy referred to in Paragraph 1 of this Article to the repair of such damage satisfactory to the Classification Society and other institutions or authorities as described in the Specifications without additional expenses to the BUYER, and the BUYER shall accept the VESSEL under this Contract if completed in accordance with this Contract and Specifications. (b) Total Loss: However, in the event that the VESSEL is determined to be an actual or constructive total loss, the BUILDER shall either: () By the mutual agreement between the parties hereto, proceed in accordance with terms of this Contract, in which case the amount recovered under said insurance policy shall be applied to the reconstruction and/or repair of the VESSEL's damages and/or reinstallation of BUYER's supplies without additional expenses to the BUYER, provided the parties hereto shall have first agreed in writing as to such reasonable extension of the Delivery Date ‘etal Sngbulding Contactdoe——— Fe