Shipbuilding Contract (hull T148)

SHIPBUILDING CONTRACT


BETWEEN


SEABULK ANGOLA INC.


AND


LABROY SHIPBUILDING AND ENGINEERING PTE LTD


FOR


HULL T 148


LIST OF CONTENTS


Article 1 Definitions


Article 2 Subject of the Contract


Article 3 Time of Delivery


Article 4 Price


Article 5 Payment


Article 6 Supervision


Article 7 Sea Trials and Acceptance of Vessel


Article 8 Builder's Right to Rescind the Contract


Article 9 Alterations to the Vessel


Article 10 Guarantee


Article 11 Delay in Delivery and Deficiencies


Article 12 Insurance and Property


Article 13 Law Applicable and Jurisdiction


Article 14 Miscellaneous


Article 15 Validity


2


SHIPBUILDING CONTRACT


FOR


CONSTRUCTION OF ONE (1) 63 M ANCHOR
HANDLING TUG SUPPLY VESSEL
HULL NO. T 148


This CONTRACT, is entered into this 26 Day of October 2004 by and between


LABROY SHIPBUILDING AND ENGINEERING PTE LTD, a corporation


organized and existing under the laws of Singapore having its office at No. 1,


Maritime Square #11-23, Harbour Front Centre, Singapore 099253 (hereinafter


called the "Builder")


on one part; and


SEABULK ANGOLA INC.


a corporation organized and existing under the laws of Marshall Islands.


(hereinafter called the "Owner") on one part:


IT IS HEREBY AGREED AS FOLLOWS:


3


ARTICLE 1


DEFINITIONS


In this Contract, the following terms shall have the meaning set forth below:


1.1 "Contract" or "this Contract" shall, unless the context otherwise
requires, mean this Contract together with any addenda to this
Contract, which may be mutually agreed between the Parties in writing.


1.2 "Parties" shall mean the Builder and the Owner.


1.3 "Builder" shall mean LABROY SHIPBUILDING AND ENGINEERING PTE LTD.


"Owner" shall mean SEABULK ANGOLA INC.


1.4 "Classification Society" shall mean AMERICAN BUREAU OF SHIPPING (ABS).


1.5 "Contract Price" shall mean Price in Article 4 subject to adjustment in
accordance with Article 7, 9 and 11 of this Contract.


1.6 "Protocol of Delivery and Acceptance" shall mean the Protocol to be
executed by the Builder and the Owner on delivery of the Vessel as
referred to in Article 3 and 7.


1.7 "Owner's Furnished Equipment" shall mean the items to be furnished by
the Owner as referred to in the Contract, and as per Exhibit "E".


1.8 "Sea Trials" shall have the meaning set forth in Article 7 hereof.


1.9 "Builder's Bank" shall mean: DBS Bank
6 Shenton Way
DBS Building, Tower One
Singapore 068809
A/c No: 001-053128-0


for payments due to the Builder, or any other first class bank based in
Singapore nominated by the Builder and approved by the Owner.


"Owner's Bank" shall mean:


Fortis Capital Corp.
Three Stamford Plaza
301 Tresser Blvd.
Stamford, Ct 06901-3239 USA


4


for payments due to the Owner, or any other first class bank based in
the United States nominated by the Owner and approved by the Builder.


1.10 "Supervisors" shall mean the person or persons duly authorised by the
Owner to act as its representative or representatives for construction
supervision in conformity with the stipulations of Article 6 hereof.


1.11 "Technical Specification" shall mean Technical Specification prepared
by Builder Naval Architect, Ms Khiam Chuan Marine Pte. Ltd ref Project:
KCM/Q441, signed by both Parties and forming an integral part of the
Contract.


1.12 "Makers List" shall mean the list as attached to the Technical
Specification and signed by both Parties and forming an integral part
of the Contract.


1.13 "Contract Documents" shall mean documents and drawings as per Exhibit
"A" signed by both Parties and forming an integral part of the
Contract.


1.14 "Working Days" shall mean days upon which both Owner's lender and banks
in Singapore are open for business.


1.15 "Delivery Documents" shall mean the documents referred to in Exhibit
"B".


1.16 "Effective Date" shall mean the date when the Contract becomes
effective pursuant to Article 15.


1.17 "Vessel" shall mean the New building under Hull No T148 as defined in
the Contract.


1.18 "Delivery Date" shall mean the date when the completed Vessel shall be
delivered, i.e. Aug 26, 2006, subject to modifications only in
accordance with this Contract. Effective Date shall be the date when
the first installment of 10% is paid to the Builder.


5


ARTICLE 2


SUBJECT OF THE CONTRACT


2.1 OBJECT OF THE CONTRACT


In consideration of the mutual covenants contained herein the Builder
agrees to build, equip, launch and complete the Vessel at the Builder's
wholly owned Shipyard known as PT Nanindah Mutiara Shipyard in Batam
and to deliver the Vessel to the Owner after successful sea trials and
completion of delivery formalities in accordance with Article 7 hereof.
The Vessel shall be built according to the Contract Documents. The
Contract Documents will form integral parts of this Contract.


The Vessel shall be delivered to the Owner free of any liens, charges,
claims, mortgages or other encumbrances whatsoever. The Owner agrees to
purchase, pay for, accept and take delivery of the Vessel once
completed in accordance with this Contract.


2.2 PRECEDENCE OF CONTRACT DOCUMENTS


In the event of a conflict between the documents set out below the
following order of precedence shall govern:


1) Contract
2) Technical Specification
3) General Arrangement
4) Makers List


2.3 MANNER OF CONSTRUCTION


Design, materials and workmanship will be in accordance with the Rules
and Regulations of the Classification Society as per paragraph 2.10,
laws, rules, regulations and enactment as per paragraph 2.11 and
according to first class shipbuilding practice and the Technical
Specification. All works and installations not precisely specified in
the aforementioned documents shall be executed to internationally
recognized shipbuilding practice.


The Owner shall furnish to the Vessel such items as are set out in the
list of Owner's Furnished Equipment attached hereto as Exhibit "E" and
otherwise as may be mutually agreed in writing between the Parties.


6


2.4 MAIN DIMENSIONS


The Vessel shall have the dimensions and characteristics stated in the
Technical Specification and in the General Arrangement, including the
following main particulars:


- length over all 63.00m
- length between perpendiculars 55.80m
- breadth moulded 15.00m
- depth moulded 6.10m
- draft design 5.00m
- Gross tonnage abt 1,600 tonnes
- Deadweight abt 1,650 tonnes at 5.00m
- Bollard Pull ahead minimum 80 tonnes
- Free running speed, ahead 14.50 knots at 4.50m draft


2.5 PROPELLING MACHINERY


The Vessel shall be propelled by 2 units of four stroke diesel engine,
each coupled to a C.P.Propeller in Kort nozzle.


The main engines plant shall operate using MDO.


2.6 FUEL CONSUMPTION


The specific fuel consumption of the main engine, when operating on,
using corrected to a lower (net calorific value of 42,707 KJ / kg in
accordance with I.S.O. - 3046/I ambient conditions and without attached
pumps shall not exceed: 185gm/kWh with 5% tolerance.


2.7 SPEED


The Vessel's speed on even keel, at a draft of abt. 4.50 in sea water
on trial conditions, deep water (7 - 8 times the draught), no current,
with clean hull and with the wind not exceeding the force of 2 Bft and
sea not exceeding 2 Bft to be 14.5 knots at 100% MCR.


The speed will be verified on seatrials.


2.8 BOLLARD PULL.


The Vessel's bollard pull during sea trail at 100% MCR must be:


Ahead: 80 tonnes minimum.


Bollard Pull to be verified in accordance with relevant section of the
Technical Specifications.


7


2.9 CLASSIFICATION


The Vessel shall be designed, equipped and built under the survey and
according to be the Rules of American Bureau of Shipping to achieve on
delivery the Class Notation: ABS +A1, Combination Tug & Support Fire
Fighting Vessel Class 1 (E), +AMS, +ACCU, +DPS-1.


And designed and built in accordance with internationally recognized
shipbuilding standards for new vessels of the type and general
characteristics of the Vessel.


2.10 RULES AND REGULATIONS


(i) The Vessel shall correspond on delivery to the Technical
Specification.


(ii) The Vessel shall be built, equipped and certified complying
with all the applicable laws, regulations, rules according to
Article 2.9 hereof and international conventions of the
Marshall Island flag of registry and requirements of the
regulatory bodies in force at the date of signature of this
Contract.


2.11 CERTIFICATES


At the time of the Vessel's delivery to the Owner pursuant to Article
3.1 hereof respective ABS certificates ( the " Certificates" ) or
preliminary certificates based on the laws, rules, regulations, and
enactment mentioned in Article 2.10 and 2.11 hereof, section 105.4 of
the Technical Specifications and issued by Classification Society, and
applicable authorities and Builder, will be supplied by the Builder to
the Owner as per the Technical Specification.


Fees for obtaining these Certificates will be borne by the Builder.
Other certificates required for the Vessel's registration under
Marshall Island flag shall be procured and paid for by the Owner with
the exception of the Tonnage Measurement Certificate, which shall be
for the Builder's account. Certificates for Owner's Furnished Equipment
shall be procured and paid for by the Owner.


2.12 INVENTORIES AND DELIVERY DOCUMENTATION


On or before delivery of the Vessel to the Owner the following will be supplied by the Builder:


a) Inventory as described in the Technical Specification which
will be stored on board as provided for in the Vessel.


b) The Delivery Documents according to Exhibit "B" of this
Contract.


8


2.13 REGISTRATION


The Vessel shall be registered by the Owner at its own cost and expense
at the time of its delivery and acceptance subject to the provision of
the Certificates specified in Article 2.12.


9


ARTICLE 3


TIME OF DELIVERY


3.1 The Builder shall deliver the Vessel to the Owner afloat at a safe
berth at Builder's shipyard on the Delivery Date, i.e. August 26, 2006,
or 22 months after the date of this Contract as set forth on page one,
which ever is later subject, to modifications and permissible
extensions as provided for in the Contract. The Builder shall give to
the Owner written notice notifying when the Vessel will be ready for
delivery approximately 21 (twenty-one) days before the anticipated
Delivery Date. The Builder shall also give to the Owner written
confirmation 7 (seven) days before the definite Delivery Date.


The Vessel shall be delivered clean, paint work touched up, with all
Builder's equipment removed to customary good practice, and the Vessel
to be fit for immediate commercial operation.


3.2 The agreed Delivery Date is subject to force majeure reservations,
mentioned in Article 11.1. Force majeure shall be regarded as occurring
if the delivery, after the Contract has been signed the Builder is
prevented or delayed by extraordinary circumstances or events which the
Builder could not reasonably have anticipated by exercising utmost due
diligence when signing the Contract, e.g. such as but not limited to
unforeseeable events within or outside the Builder's shipyard as war or
warlike conditions, embargoes, mobilizations, strikes or lockouts,
natural catastrophes, fire or other extraordinary events, beyond the
control of the Builder and not which are caused by the Builder's fault,
error, omission, negligence or imprudence. Force majeure shall moreover
be regarded as occurring if the delivery is prevented or delayed by
late deliveries of major parts (always provided, however, that these
services and deliveries have been ordered by the Builder in a timely
manner with due consideration that delay would be force majeure under
this Article if it had affected the Builder's obligations). This
provision shall not affect the Builder's obligation to exercise due
diligence in avoiding or minimizing delays.


In force majeure circumstances the Builder may require an extension of
delivery time by as many working days as the Builder proves that the
delivery has been delayed on account of such circumstances. The Builder
is obliged to do his utmost to avoid or minimize the delay. If
circumstances occur which in the Builder's reasonable opinion may
entail delay, the Builder shall as soon as possible, but at the latest,
within 7 days of the commencement of the event of force majeure notify
the Owner thereof in writing and submit documents of evidence.


The Builder shall also whenever possible, indicate the probable
duration of the delay. If written notice is not given within the above
period, force majeure may not subsequently be invoked.


10


3.3 As soon as possible, but in any event within 7 days from the date of
commencement of any delay on account of which the Builder claims that
it is entitled under Article 3.2 hereof to an extension of time of
delivery of the Vessel the Builder shall give notice to the Owner of
the date such delay commenced, the reasons thereof and an estimate of
the duration thereof. Similarly, as soon as possible, but in any event
within 7 days after such delay expires, the Builder shall give notice
to the Owner of the date such delay expired and shall specify the
period of the time by which in his judgement the time for delivery of
the Vessel should be extended. In the event of a dispute on the said
period it may be referred to arbitration in accordance to Article 13.


3.4 The delivery of the Vessel shall be understood as effected upon signing
the Protocol of Delivery and Acceptance as per Exhibit F on behalf of
the Builder and the Owner and a Protocol of Delivery and Acceptance
from the Owner's lender if required. The Builder shall prepare or cause
the preparation of and furnish to the Owner on delivery of the Vessel
the documents referred to in Exhibit "B" attached hereto.


11


ARTICLE 4


PRICE


4.1 The Contract Price of the Vessel is United States Dollars: Eleven
million and seventeen thousand only (US$10,917,000/-)


4.2 The Contract Price is fixed, i.e., not subject to any adjustment
including but not limited to any rise or fall in rates of wages, cost
of equipment or materials or currencies, save that it is subject only
to adjustments as provided in Articles 7, 9 and 11 hereof.


4.3 All costs and fees, including taxes concerning payment imposed by
authorities outside the Builder's country, incurred or imposed by
reason of the transfer of funds to the Builder referred to in
paragraphs (a) to (c) of Article 5.2 hereof shall borne by the Owner
provided that the corresponding costs and fees imposed within the
Builder's country shall be borne by the Builder.


12


ARTICLE 5


5.1 PAYMENT INSTALLMENTS


Payment of the Contract Price shall be made by the Owner to the Builder
by Three (3) installments as follows:


1st installment (10%) equal to US$1,091,700/- on 5 July 2005.
2nd installment (5%) equal to US$545,850/- on 30 Sept 2005.
3rd installment (85%) equal to US$9,279,450/- upon Delivery of Vessel


5.2 PAYMENT PROCEDURES


The Owner shall pay the Builder the aforesaid installment upon
presentation of the following documents:


(a) in respect of the First Installment on 5 July 2005 provided
the Invoice has been presented at least fifteen (15) banking
days, prior to such date.


(b) in respect of the Second Installment on 30 Sept 2005 provided
the Invoice has been presented at least fifteen (15) banking
days, prior to such date.


(c) in respect of the Third Installment, upon presentation of
Protocol of Delivery and Acceptance of Vessel Signed by both
the Owner and the Builder.


5.3 PAYMENT FOR MODIFICATION


The sums due for modifications under Article 9 of this Contract shall
be paid as follow:


(a) 100% of such sum for modifications agreed upon under Article 9
when the statement of the adjustment of price is made by the
Builder and accepted by the Owner shall be settled together
with the final payment at the Delivery date.


5.4 SECURITY TO BE PROVIDED BY BUILDER


(a) As security for the obligation to refund installments made by
Owner due to delays or deficiencies of the Vessel as set out
in Article 11 or due to default under this Contract by
Builder, Builder shall deliver to Owner a bank guarantee(s),
in a form and with a first class bank reasonably acceptable to
Owner, in amounts sufficient to cover each payment installment
made under Articles 5.1 and 5.2. Builder may provide a series
of bank guarantees covering the amounts of each installment,
concurrent with and effective upon the payment of each such
installment.


13


(b) Notwithstanding the installment payment requirements set forth
in Articles 5.1 and 5.2, no such installment shall be due
unless and until the bank guarantee is delivered to Owner
covering such installment as provided for in this Article 5.4.


(c) Bank guarantee(s) shall be valid up until the delivery of the
vessel to the Owner and shall be assignable to Owner's lender.


14


ARTICLE 6


SUPERVISION


6.1 Until delivery of the Vessel, the Owner shall be entitled to have
permanent Supervisors present at the Builder's shipyard in order to
supervise the building of the Vessel in accordance with the Contract
and the Contract Documents and to give in writing to the personnel
appointed by the Builder reasonable remarks concerning any deficiency
or defect in the building or testing of the Vessel. Upon receipt of
such remarks the Builder shall correct such deficiencies or defects.
However, if in the opinion of the Builder and supported by the
Classification Society the remark does not concern any deficiency or
defect in terms of this Contract, a written statement of the Builder
will be forwarded to the Owner specifying the Builder's reasons. If the
parties cannot reach agreement, the dispute will be submitted to
arbitration under Article 13.


6.2 The Owner shall be entitled to employ consultants to supervise from
time to time with regard to the supervision as provided under this
Article.


6.3 The Supervisors shall have the right to participate in any inspection,
tests and trials including the Sea Trials, carried out by the Builder,
the Builder's subcontractors and/or the Classification Society. In the
event of failure of the Supervisor to be present at any inspections,
tests and trials after reasonable written notice to them of the time
and place of such inspections, test and trials (such notice to be given
within the period agreed upon between the Supervisor and the Builder,
which will permit the Supervisors to be present; at a minimum this
period will be 1 day in advance for test and trial at the Builder's
shipyard, Sea Trials in accordance with Article 6.1 hereof, and five
(5) working days for test and trial conducted at any location other
then the Builders shipyard) such inspections, test and trials shall be
performed as if the Supervisor were present and the respective test
shall not be repeated due to the absence of the Supervisor.


6.4 The Builder shall free of charge arrange for the Supervisors use of
such office space and other reasonable facilities for the Supervisors
located at the Builder's shipyard or its close proximity as are
necessary to enable the Supervisors to carry on their duties. The
office space will be equipped with office furniture, high speed
internet access and at lease two telephones with separate lines. The
Owner shall be entitled to use of a separate facsimile machine for its
own use and equipment to access the internet. The Builder shall assist
the Owner in the installation of same. Costs of telephone, telefax and
email will be borne by the Owner.


The Supervisors shall have free access during any working hours to the
Vessel and any other place in the Builder's Shipyard where work is
being done or material for the Vessel is being produced or stored in
connection with the construction of Vessel by Builder.


15


As far as possible the Builder will arrange for the Supervisors to have
access to materials and equipment in the manufacturer's and
subcontractor's premises as detailed below:


Main engine(s)
Generator sets
Gearbox & CP Propeller(s)


6.5 The Supervisors shall properly and reasonably execute their function
but shall not interfere with normal practices of the Builder's
shipyard.


6.6 The procedure of approval of technical drawings is as follows. Approval
of plans shall not affect Owner's or Builder's rights and obligations
under this Contract.


(a) The Builder shall submit to the Owner four (4) copies of each of
the plans and drawings, including revised plans, to be submitted
to the Owner for its approval at its address as set forth in
Article 14.6 hereof. The Owner shall, within ten (10) working days
after receipt thereof, return to the Builder the approval or
comments, if any, of the Owner. A list of the plans and drawings
to be so submitted to the Owner shall be mutually agreed upon
between the parties hereto.


(b) In the event that the Owner or the Owner's Representative shall
fail to return the plans and drawings to the Builder within the
time limit as hereinabove provided, such plans and drawings shall
be deemed to have been automatically approved without any comment.
In the event the plans and drawings submitted by the Builder to
the Owner or the Owner's Representati ...