ATW » Topics » Events of Purchaser's Default

This excerpt taken from the ATW 10-Q filed Aug 8, 2008.

     Events of Purchaser's Default

17.1.  The Purchaser shall be deemed to be in default of performance of its obligations under this Contract in the following cases:-

a.     

if the Purchaser fails to pay the amount of any of the instalment of the Contract Price or any other payment due to the Builder on the due date for payment thereof;


b.     

if the Purchaser fails to take delivery of the Vessel in accordance with Clause 13 ;


c.     

if the Purchaser commits a material breach of this Contract; or


d.     

if an order or an effective resolution is passed for the winding up of the Purchaser (otherwise than for the purposes of a reconstruction or amalgamation previously approved by the Builder) or if a receiver is appointed over the whole or any part of the undertaking or property of the Purchaser or if the Purchaser becomes insolvent or suspends payment generally of its debts or ceases to carry on its business or makes any special arrangement or composition with its creditors.

 

and fails (in the case of (a) and (c) only) to rectify such default within fourteen (14) calendar days after written notice of breach from the Builder.


17.2.  If the Purchaser is in default as provided in (a) or (b) of sub-clause (1) above or in respect of the payment of any amount due under this Contract, then without prejudice to any other rights of the Builder, the Purchaser shall be liable to pay interest at one and a half percent (1.5%) above LIBOR on the unpaid amount (or, in the case of default under Clause 17.1(b) above, on the sums due on delivery of the Vessel) from the day on which the same became due to the Builder (or the date the Vessel was tendered for delivery, as the case may be) up until the date of actual payment thereof. All interest hereunder shall be calculated on the basis of a three hundred and sixty (360) day year and compounded monthly and shall be paid on the date when payment is made of the sum on which such interest is accrued.

In any event of default by the Purchaser, the Purchaser shall also pay all charges and expenses incurred by the Builder in consequence of such default.
 

In the event the Purchaser fails to pay sums in the aggregate of USD 1 million or more due to the Builder under or in connection with this Contract within thirty (30) days of its due date, the Builder shall have the right, upon giving written notice to the Purchaser to cease work on the Vessel and following a period of suspension of twenty (20) days, be entitled to terminate this Contract provided that if the Purchaser has provided a banker’s guarantee for the payment of such sums, the Builder shall continue with the construction of the Vessel in accordance with the terms of this Contract. Without prejudice to all its rights and remedies available at law or in equity, the Builder shall be entitled to claim as Permissible Delay within the meaning of Clause 14 any period of time during which the construction or completion of the Vessel has been delayed in consequence of the Purchaser's default, or the Builder’s cessation of work, as aforesaid, and all costs incurred during such time of cessation of work.

This excerpt taken from the ATW 8-K filed Jan 3, 2008.

     Events of Purchaser's Default

17.1  The Purchaser shall be deemed to be in default of performance of its obligations under this Contract in the following cases:-

a.     

if the Purchaser fails to pay the amount of any of the instalment of the Contract Price or any other payment due to the Builder on the due date for payment thereof;


b.     

if the Purchaser fails to take delivery of the Vessel in accordance with Clause 13;


c.     

if the Purchaser commits a material breach of this Contract; or


d.     

if an order or an effective resolution is passed for the winding up of the Purchaser (otherwise than for the purposes of a reconstruction or amalgamation previously approved by the Builder) or if a receiver is appointed over the whole or any part of the undertaking or property of the Purchaser or if the Purchaser becomes insolvent or suspends payment generally of its debts or ceases to carry on its business or makes any special arrangement or composition with its creditors.

and fails (in the case of (a) and (c) only) to rectify such default within fourteen (14) calendar days after written notice of breach from the Builder.

17.2  If the Purchaser is in default as provided in (a) or (b) of sub-clause (1) above or in respect of the payment of any amount due under this Contract, then without prejudice to any other rights of the Builder, the Purchaser shall be liable to pay interest at one and a half percent (1.5%) above LIBOR on the unpaid amount (or, in the case of default under Clause 17.1(b) above, on the sums due on delivery of the Vessel) from the day on which the same became due to the Builder (or the date the Vessel was tendered for delivery, as the case may be) up until the date of actual payment thereof. All interest hereunder shall be calculated on the basis of a three hundred and sixty (360) day year and compounded monthly and shall be paid on the date when payment is made of the sum on which such interest is accrued.


In any event of default by the Purchaser, the Purchaser shall also pay all charges and expenses incurred by the Builder in consequence of such default.
 

In the event the Purchaser fails to pay sums in the aggregate of USD 1 million or more due to the Builder under or in connection with this Contract within thirty (30) days of its due date, the Builder shall have the right, upon giving written notice to the Purchaser to cease work on the Vessel and following a period of suspension of twenty (20) days, be entitled to terminate this Contract provided that if the Purchaser has provided a banker’s guarantee for the payment of such sums, the Builder shall continue with the construction of the Vessel in accordance with the terms of this Contract. Without prejudice to all its rights and remedies available at law or in equity, the Builder shall be entitled to claim as Permissible Delay within the meaning of Clause 14 any period of time during which the construction or completion of the Vessel has been delayed in consequence of the Purchaser's default, or the Builder’s cessation of work, as aforesaid, and all costs incurred during such time of cessation of work.

EXCERPTS ON THIS PAGE:

10-Q
Aug 8, 2008
8-K
Jan 3, 2008
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