PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO AN
APPLICATION FOR AN ORDER FOR CONFIDENTIAL TREATMENT REQUESTED
BY CARNIVAL CORPORATION]
SHIPBUILDING CONTRACT
Between, CARNIVAL CRUISE LINES, INC., a company organized and existing under the laws of the Republic of Panama with its principal offices located at 3655 N.W. 87th Avenue, Miami, Florida, USA 33178 - 2428 hereinafter called the "PURCHASER",
and
KVAERNER MASA-YARDS, INC., a company organized and existing under the laws of the Republic of Finland with a registered office in Turku, Finland hereinafter called the "CONTRACTOR",
In respect of yard No.: 488.
WHEREAS
(i) By a contract dated 15th September 1987 made between Wartsila
Marine Industries Inc. ("WMI") and the PURCHASER, WMI agreed to
design, build and deliver to the PURCHASER a passenger cruise vessel
known as hull no. 1299 (and following the Contract referred to in
recital (ii) as 480 at the yard of the CONTRACTOR) and after delivery
named ms "ECSTASY".
(ii) By an agreement dated 25th January 1990 the CONTRACTOR agreed to
complete ms "ECSTASY" following the bankruptcy of WMI and has
delivered ms "ECSTASY" to the PURCHASER.
(iii) By contract dated 15th September 1987 WMI agreed to design, build and
deliver to the PURCHASER a further passenger cruise vessel known as
hull no. 1300 to be named ms "SENSATION" and by a contract dated 12th
May 1991 between the CONTRACTOR and the PURCHASER the CONTRACTOR
agreed to complete the construction of ms "SENSATION" (as Hull no.
484) on the terms set out therein.
(iv) By a further contract dated 5th September 1991 the CONTRACTOR agreed
to design build and deliver to the PURCHASER a further passenger
cruise vessel to be known during construction as Hull 487 and on
delivery to be named ms "FASCINATION". 2
(v) This agreement sets out the terms on which the CONTRACTOR will design
and build for the PURCHASER a further passenger cruise ship to be
known during construction as Hull 488.
IT IS HEREBY AGREED AND STIPULATED AS FOLLOWS:
ARTICLE 1: SUBJECT OF THE CONTRACT
(a) VESSEL'S Description and Main Characteristics
The CONTRACTOR undertakes to design and build and complete at the Building Site (as hereinafter defined) and to deliver to the PURCHASER, who orders and undertakes to accept delivery of one passenger cruise ship (hereinafter called the "VESSEL") , which will be a "carbon-copy" sistership to MS "ECSTASY", hull No. 480 as built except that modifications shall be made:
(1) as set out in Addendum to the SPECIFICATIONS of even date herewith and
signed by the parties hereto and
(2) as required to ensure that the Vessel complies with the laws, rules,
regulations and enactments referred to in paragraph (e) of this
Article 1.
(3) as required to ensure that the Vessel incorporates all changes to ms
"ECSTASY" as built agreed on at the date hereof to be made in relation
to the design and construction of ms "FASCINATION" without any cost
additional to the purchase price specified herein.
The specifications and plans for MS "ECSTASY" as built (modified in accordance with the foregoing provisions of this paragraph (a) and the provisions referred to in paragraph (e) of this Article 1) shall hereinafter be referred to as the "SPECIFICATIONS" and the "PLAN" respectively.
Regarding the Makers List, the CONTRACTOR is entitled to make changes as compared with MS "ECSTASY". The changes will be submitted for technical approval by the PURCHASER. Such approval shall not be withheld, if the relevant characteristics of the specification are fulfilled, and the reputation of the supplier is acceptable.
In the event of any conflict between this CONTRACT and the SPECIFICATIONS and the PLAN, the provisions of this CONTRACT shall prevail. In the event of any conflict between the SPECIFICATIONS and the PLAN, The provisions of the SPECIFICATIONS shall prevail.
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(b) Speed
The VESSEL's speed shall be as follows:
(i) Trial Speed
With the propulsion motors developing each XX MW at about XXX RPM and
at XXXX Meter draft and other conditions as per paragraph 1.26. of the
SPECIFICATIONS: XXXX knots
(ii) Service Speed
With X diesel alternators 8ZAL40S and X diesel alternators 12ZAV40S
developing a total output not exceeding XXXX percent MCR, at XXX RPM,
and after allowing XXX MW for the VESSEL'S other electrical services,
the residual power shall enable the VESSEL to reach XXXX knots with a
margin of XX percent, at a draught of XXXXM.
(c) Building Site
The Building Site shall be the CONTRACTOR'S shipyard at Helsinki, Finland provided that the CONTRACTOR may have parts of the VESSEL constructed at its yard at Turku. The CONTRACTOR shall nevertheless be at liberty to carry out work elsewhere provided that the main work of erection, assembly and construction of the VESSEL shall take place at the Building Site aforesaid. In the event that the forward half and the aft half of the hull are assembled and constructed separately as independent units, the operation of joining the two parts shall be carried out in a suitable drydock at Helsinki or Turku, to the PURCHASER'S approval provided that the joining of the two halves may be carried out afloat if the method and procedure to be used for this purpose are approved by the PURCHASER.
(d) Yard Number, Marking of Materials
The VESSEL shall, for the purpose of identification only be known as Yard No. 488.
As soon as possible after the arrival at the Building Site, all materials, machinery and other equipment intended to be incorporated in the VESSEL shall be marked with the above Yard Number for the purpose of identification and establishing that such materials, machinery and equipment belong to the VESSEL. The CONTRACTOR may not use any such marked material, machinery, and equipment for the construction of any other vessel without the approval of the PURCHASER, such approval not to be unreasonably withheld. The CONTRACTOR may not use for the construction of the VESSEL materials, machinery and other equipment marked for use in
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the construction of any other vessel without the approval of the PURCHASER, such approval not to be unreasonably withheld.
The CONTRACTOR is obliged to pay all deliveries promptly on or before delivery. Upon the PURCHASER'S request, the CONTRACTOR shall supply proof of payment having been properly effected as well as further evidence that it is under no residual obligations towards its suppliers in respect of other deliveries.
(e) VESSEL'S Classification and Standard
The VESSEL shall comply with the laws, rules, regulations and enactments published and in force on the date hereof as stated in the SPECIFICATIONS, including also Stability Regulations for Passenger Vessels (April 1990) and Fire Protection for Lifeboats and Rafts in way of windows and screens (SOLAS 74, as amended) to the requirements of the Classification Society and the Panamanian Government. The Vessel shall also comply with the requirements of the following:
(1) U.S.P.H including "Vessel Sanitation Programme - Operation Manual
(edition August 1989) and W.H.0 "Guide to Ship Sanitation"; and
(2) Solas Regulations and Wireless in relation to Global Marine Distress
Signal Systems; and
(3) Panamanian government regulations for registration of vessels under
Panamanian flag.
The VESSEL shall be built to class and under survey of Lloyd's
Register of Shipping and, if not otherwise stated in the
SPECIFICATIONS, in accordance with good shipbuilding practice. in
Scandinavia for new passenger cruise vessels of the type and general
characteristics, and in any event in no respect inferior to the
standards of, M.S. 'ECSTASY". Classification, survey and testing and
any other charges relating to the CONTRACTOR'S obligations and items
of supply under this CONTRACT shall be for the account of the
CONTRACTOR.
It is understood that the CONTRACTOR shall carry out such work as is
necessary in accordance with this CONTRACT so that the VESSEL on
arrival in the U.S.A. is approved by the United States Public Health
authorities.
(f) Decisions of the Classification Society
The decisions of the Classification Society shall be final and binding on both contracting parties as to the VESSEL'S compliance or non-compliance with the rules and regulations, observance of which is to be controlled by the said Society.
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(g) Sub-contracting
Subject to the requirements of Article 1(a) the CONTRACTOR has the right to sub-contract part of the work to third parties on the Building Site or elsewhere.
ARTICLE 2: INSPECTION AND APPROVALS
(a) Inspection
The PURCHASER shall have the right to have the VESSEL and all engines, machinery, outfit and equipment intended for her inspected during construction by its authorized representative(s) to whom the CONTRACTOR shall grant free access for such purpose during working hours to the VESSEL and to the CONTRACTOR'S shipyard and workshops wherever the VESSEL is being built and/or designed. The CONTRACTOR will obtain for the PURCHASER the right of access to subcontractors' premises. The inspection will be at the PURCHASER's risk and expense.
The PURCHASER'S authorized representative(s) whose name(s) and duties are to be made known in advance, shall observe the works' rules prevailing at the CONTRACTOR'S and the subcontractors premises. They shall address their remarks exclusively to the CONTRACTOR'S appointed representative(s) whose name(s) shall be made known to the PURCHASER.
Should the PURCHASER elect to entrust the inspection to firms or persons outside its organization, such firms or persons and their duties shall be subject to the CONTRACTOR'S prior approval.
(b) Effect of Approvals
Approval by the PURCHASER or the PURCHASER'S representative of inspections, tests, trials, documents, or plans shall not relieve the CONTRACTOR of its obligations under Article 1 of this CONTRACT.
ARTICLE 3: MODIFICATIONS
(a) Modifications
Either party may request the other in writing to make modifications to the SPECIFICATIONS and/or PLAN and provide that the CONTRACTOR
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and the PURCHASER fully agree in writing within ten days from the dispatch of the CONTRACTOR'S notification of any (a) appropriate adjustment of price; (b) appropriate adjustment of delivery date; (c) appropriate adjustment of the deadweight; (d) appropriate adjustment of speed requirements; and (e) any other appropriate adjustment of this CONTRACT, the SPECIFICATIONS and the PLAN, the CONTRACTOR will carry out such modifications.
The CONTRACTOR has the right to continue production on the basis of the SPECIFICATIONS and the PLAN until agreement has been reached as above stated.
All agreed modifications and alterations shall be subject to the conditions of this CONTRACT and the SPECIFICATIONS.
(b) Modifications by Regulatory Bodies and Classification Society
In the event that subsequent to the date hereof any modifications, deletions or additions are made to the laws, rules, regulations and enactments applicable to the VESSEL or their interpretation or their application (including withdrawal of provisional approvals of the Classification Society and/or additional requirements of said Society) as compared with the basis of this CONTRACT and/or similar measures of other bodies as referred to in Article 1, paragraph (e), and such modifications, deletions or additions are compulsory for the VESSEL, the CONTRACTOR will effect them and will notify the (a) adjustment of price; (b) adjustment of delivery date; (c) adjustment of deadweight; (d) adjustment of speed requirements; and (e) any other adjustment of the CONTRACT, SPECIFICATIONS and PLAN, all as may be appropriate in the circumstances.
The PURCHASER may require that the CONTRACTOR shall first apply for a formal waiver of compliance with such modifications, deletions or additions from the authority by whom the modifications, deletion" or additions have been promulgated, should the PURCHASER consider that the operation of the VESSEL in its intended service would permit of such waiver. In such agreement the CONTRACTOR will fix a reasonable time limit after which if the waiver has not beer obtained, the CONTRACTOR will go on with the required modifications, deletions or additions. Any additional cost caused by the application for such waiver whether or not obtained shall be for account of the PURCHASER and the date of delivery of the VESSEL if actually delayed thereby shall be extended by the time necessary as a result of the application for waiver.
Modifications by regulatory bodies and by the Classification Society which are not compulsory for the VESSEL shall be treated as the PURCHASER'S modifications according to paragraph (a) above but the CONTRACTOR will in any case advise the PURCHASER of such modifications as soon as they are published and obtain the PURCHASER'S approval before proceeding to make such modifications.
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(c) Payment of Adjustments of Price
The adjustments of price made under paragraphs (a) and (b) above shall be settled in accordance with paragraph (f) of Article 7.
(d) Information
When required the CONTRACTOR shall furnish reasonable information relating to the basis and method of determining adjustment of price and other effects of modifications referred to in this Article.
ARTICLE 4: TRIALS
The VESSEL shall run the following tests and trials:
(1) Dock trials as specified in the SPECIFICATIONS.
(2) Official sea-trials as provided for in the SPECIFICATIONS
during which the trial speed, the propulsion machinery plant
output and the propeller revolutions shall be determined in
accordance with Article 1, paragraph (b)(i).
An endurance test as well as all other trials and tests
included in the sea trial program in the SPECIFICATIONS, shall
also be carried out with recording of measurements of all
parameters, enabling determination of performance relevant to
each test.
(3) All other trials specified in the SPECIFICATIONS.
Such speed runs and endurance test shall be run at the draft attainable by ballasting the VESSEL with ballast water using tanks and compartments intended for this purpose and as far as practicable the draft shall be as close as possible to the corresponding draft at which tank model tests have been carried out.
Should the speed trial draft aforementioned be other than the draft specified in Article 1 (b) (i), the speed, the main engine output and the revolutions corresponding to the latter draft shall be determined by the Netherlands Model Basin in Wageningen by means of data from their model tests on the basis of the results recorded at the sea trials.
All trials and measurements will be conducted in a manner and to an extent as prescribed in a detailed schedule based on the SPECIFICATIONS.
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The methods to be used will be selected by the CONTRACTOR to suit the VESSEL'S trial trip programme to the approval of the PURCHASER.
The CONTRACTOR has the right to subcontract speed and power measurements to an independent model basin or research institute. However, the PURCHASER will be kept fully informed and allowed to observe and ascertain measurements recorded during the trials as if the CONTRACTOR had carried out the tests with its own personnel.
Should conditions which properly qualify to delay delivery as provided in Article 6 paragraph (e) prevent the CONTRACTOR from carrying out properly the official trial on the day scheduled therefore, the CONTRACTOR has the right: to postpone the trial or such part of it as deemed necessary. In such case the CONTRACTOR shall be entitled to an extension of the VESSEL'S delivery time covering the whole period of postponement.
The CONTRACTOR shall have the right to repeat any trial whatsoever after giving reasonable notice to the PURCHASER.
All expenses for the trials and adjustments of all the VESSEL'S equipment shall be borne by the CONTRACTOR who during the sea trials will provide the necessary crew at its own expense. If, during any sea trial, any breakdowns occur entailing interruption or irregular performance which can be repaired by the normal means available on board, the trial shall be continued after repairs and be valid in all respects.
However, should the VESSEL require to return to a port to enable the breakdown to be remedied, a further trial shall be undertaker if necessary at sea, to prove the outstanding performance and complete demonstrations.
The CONTRACTOR shall give the PURCHASER thirty days notice of the anticipated date of the first sea trials.
Within seven (7) days from the completion of the sea trial or the above further trial, the CONTRACTOR shall present the PURCHASER with a full set of results of the tests carried out during the sea trials and the PURCHASER shall give the CONTRACTOR within 3 days from the receipt of the results a notice in writing, or by telex or telefax conformed in writing, of completion and acceptance of the trial run, advising whether the PURCHASER considers that the results of the trial run indicate conformity of the VESSEL to this Contract the SPECIFICATIONS and the PLAN.
In the event that the PURCHASER rejects the results of the trial run as not conforming to this CONTRACT or to the SPECIFICATIONS or the PLAN, the PURCHASER 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 and/or the PLAN.
8 9 In the event that the PURCHASER fails to notify the CONTRACTOR as aforesaid of the acceptance of or the rejection, together with the reason therefor, of the trial within the period as provided above, the PURCHASER shall be deemed to have accepted the trial run of the VESSEL.
Acceptance of the results of the trial run as above provided shall be final and binding so far as conformity of the VESSEL to the CONTRACT and the SPECIFICATIONS and the PLAN to the extent demonstrated on such trial is concerned and shall preclude the PURCHASER from refusing formal delivery of the VESSEL as hereinafter provided, on the grounds of non conformity of the VESSEL in respect of items whose conformity has been demonstrated and accepted during the trial run, if the CONTRACTOR complies with all other requirements for delivery as provided in this CONTRACT.
Should any fuel oil lubricating oil, greases and ship's stores, including fresh water furnished by the CONTRACTOR for the sea trial remain on board the VESSEL at the time of acceptance thereof by the PURCHASER, the PURCHASER agrees to buy the same from the CONTRACTOR at the price reasonably paid by the CONTRACTOR and evidenced by invoices of the supplier and payment by the PURCHASER shall be effected in accordance with paragraph (f) of Article 7.
ARTICLE 5: GUARANTEE FOR SPEED, DEADWEIGHT AND FUEL CONSUMPTION
Subject to the provision contained in Article 7 (e) the rights and obligations of the CONTRACTOR and PURCHASER in regard of the VESSEL'S trial speed, deadweight and consumption of fuel of the propulsion plant are delimited as follows:
(a) Speed
For the purpose of determining the VESSEL'S actual trial speed, the speed of the VESSEL recorded on the official sea trials under Article 4 shall be adjusted in accordance with Article 4 as if the official sea trials had been carried out under the conditions specified in Article 1, paragraph (b) (i) and paragraph 1.2.6 of the SPECIFICATIONS. If the actual trial speed so computed is less than the adjusted trial speed under Article 1, paragraph (b) (i), the CONTRACTOR shall pay to the PURCHASER as liquidated damages and not by way of penalty the following amounts:
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- - for the first two tenths (2/10ths) of a knot of such speed deficiency:
XXXXXXX
- - U.S. $XXXXXX for the third complete tenth of one knot deficiency and
that amount increased by U.S. $XXXXXX for each successive complete one
tenth of a knot of such deficiency, save and except that the
CONTRACTOR shall have the right to remedy the deficiency and repeat
the trial.
If the VESSEL's trial speed determined or computed as provided in this paragraph (a) is more than one knot below the adjusted trial speed under Article 1, paragraph (b)(i), the PURCHASER, as an alternative to receiving the above mentioned liquidated damages, shall have the option to terminate this contract, with the consequences provided for in Article 8 and Article 11, save and except that the CONTRACTOR shall have the right to remedy the deficiency and repeat the trial.
Should the actual trial speed of the VESSEL determined or computed as provided in this paragraph (a) be greater than the adjusted trial speed under Article 1, paragraph (b) (i), the PURCHASER shall pay to the CONTRACTOR as premiums the following amounts:
- - for the first two tenths (2/10ths) of one knot of extra speed: XXXXXXX
- - U.S. $XXXXXX for the third complete tenth of one knot of extra speed
and that amount increased by U.S. $XXXXXX for each successive complete
one tenth of a knot up to a maximum extra speed of one half of one
knot.
(b) Deadweight
If the VESSEL'S deadweight determined as stated in the SPECIFICATIONS is more than XXX metric tons less than the deadweight specified in Article 1, then the CONTRACTOR shall pay to the PURCHASER as liquidated damages and not by way of penalty an amount of U.S. $XXXXX for each full XXX metric tons of such deficiency in excess of XXX metric tons, save and except that the CONTRACTOR shall have the right to remedy the deficiency.
If the VESSEL's deadweight determined as stated in the SPECIFICATIONS is more than XXX metric tons less than the deadweight specified in Article 1, the PURCHASER, as an alternative to receiving the above mentioned liquidated damages, shall have the option to terminate this CONTRACT with the consequences provided for in Article 8 and Article 11, save and except that the CONTRACTOR shall have the right to remedy the deficiency.
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(c) Fuel Consumption
For the main propulsion plant a shop test shall be carried out in accordance with the SPECIFICATIONS. During such shop test the specified fuel consumption shall be ascertained and corrected to the design parameters.
The shop test shall be run on heavy fuel oil with each diesel engine developing XX% MCR at XXX revolutions. The measured fuel consumption shall be corrected to a reference lower calorific value of XXXXX kilojoules per kg and ISO standard conditions. The fuel consumption of the main propulsion plant so corrected shall not exceed XXXXXXXXXXXXXXXXX for engines type 12ZAV40S and XXXXXXXXXXXX for engines type 8ZAL40S.
With respect to any of the engines, should the corrected fuel consumption be in excess of XXX percent of XXXXXXXXXXXXXXXXX for engines type 12ZAV40S and XXXXXXXXXXXXXXXXX for engines type 8ZAL40S, the CONTRACTOR shall pay to the PURCHASER, as liquidated damages and not by way of penalty, an amount of U.S. $XXXXXX for each full XXX percent in excess of XXX percent of XXXXXXXXXXXXXXXXX for engines type 12ZAV40S and XXXXXXXXXXXXXXXXX for engines type 8ZAL40S, save and except that the CONTRACTOR shall have the right to remedy any defect causing such excessive fuel consumption and repeat the trial.
With respect to any of the engines, should the corrected fuel consumption be in excess of XXX percent of XXX XXXXXXXXXXXXX for engines type 12ZAV40S and XXXXXXXXXXXXXX for engines type 8ZAL40S, the PURCHASER, as an alternative to receiving the above mentioned liquidated damages shall have the option to terminate this CONTRACT with the consequences provided for in Article 8 and Article 11, save and except that the CONTRACTOR shall have the right to remedy any defect causing such excessive fuel consumption and repeat the trial.
ARTICLE 6: DELIVERY OF THE VESSEL
(a) Delivery Date and Place of Delivery
The VESSEL shall be delivered to the PURCHASER at the Building Site or other agreed place.
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The date for delivery of the VESSEL (the "Delivery Date") shall be 31st October 1995 subject to permissible extensions as provided in this CONTRACT.
Six (6) months prior to the date on which the CONTRACTOR expects the VESSEL to be ready for delivery the CONTRACTOR shall give notice to the PURCHASER in writing (the "Delivery Notice") specifying the actual expected delivery date.
The PURCHASER shall promptly take delivery of the VESSEL when properly completed in accordance with this CONTRACT and shall with reasonable dispatch as applies to a passenger cruise ship remove her from the CONTRACTOR'S shipyard provided that the PURCHASER shall not be obliged to take delivery of the VESSEL before 31st October 1995 nor before the date specified in the Delivery Notice
(b) Liquidated Damages for Delayed Delivery
If the VESSEL is not delivered (duly completed in accordance with this CONTRACT, the SPECIFICATIONS and the PLAN) on or before the Delivery Date (as extended by virtue of the provisions of this CONTRACT specifically permitting such extension), the CONTRACTOR shall pay to the PURCHASER by way of liquidated damages and not by way of penalty the amount of UNITED STATES DOLLARS XXXXXXXXXX XXXXXXXX (U.S. $XXXXXX) for each full calendar day of delay following the Delivery Date as so extended.
(c) Termination for Delay
If the VESSEL is not delivered (duly completed in accordance with this CONTRACT, the SPECIFICATIONS and the PLAN), by the date falling twelve (12) months after the Delivery Date (as extended by virtue of the provisions of this CONTRACT expressly permitting such extension), the PURCHASER may terminate this CONTRACT by notice to the CONTRACTOR with the consequences provided for in Article 8 and Article 11. On such valid termination the CONTRACTOR shall forthwith also pay to the PURCHASER the liquidated damages payable by virtue of paragraph (b) above as if the VESSEL had been delivered on the date on which this CONTRACT is termi ...
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