Except as otherwise agreed in writing by Seller (SK Corporation), all sales of Marine Fuel shall be made according to the following conditions.

 

1. Price

Seller and Buyer must mutually agree on the price before there is any obligation to sell or buy such Marine Fuels as Buyer shall order from Seller and Seller may accept to sell to Buyer. The prices so agreed shall apply to deliveries made at Seller's terminal into Buyer's vessel. Buyer shall pay for any and all applicable duties, goods and service tax, taxes, fees, costs (including those imposed by government authorities), barging fees, delivery charges and such other costs and expenses arising from the delivery which shall be included in Seller's invoice to Buyer.

 

2. Order and Confirmation of Order

Buyer shall submit an order for purchase of Marine Fuel to Seller which contains at least the following information with respect to the Marine Fuel desired: price, quantity, quality, name of delivery port and date of delivery, name of vessel, account to be charged and name of local agent.

Seller shall accept such order by a Confirmation of Order, which shall constitute the terms and conditions of the sales contract for the delivery of Marine Fuel. The conditions of the Confirmation of Order, to the extent that they are contrary to any of the conditions of Buyer's order for purchase of Marine Fuel or the conditions contained herein, shall control.

3. Quality

The quality of Marine Fuel shall be within the Min/Max limits of the international standard ISO 8217:1996 (E) (except TOTAL EXISTENCE SEDIMENT and TOTAL SEDIMENT, POTENTIAL), unless Seller agrees to other specifications in the Confirmation of Order, in which case such specifications shall represent the only quality characteristics which the Marine Fuel is required to meet.

Buyer has the sole responsibility for the selection, acceptance and use of Marine Fuel including but not limited to determination of compatibility with the machinery, equipment and marine fuel used or to be used of the vessel.


EXCEPT AS PROVIDED ABOVE, SELLER MAKES NO GUARANTEES OR WARRANTIES, EXPRESS OR IMPLIED, OF MERCHANTABILITY, FITNESS OR SUITABILITY OF MARINE FUEL FOR ANY PARTICULAR PURPOSE OR OTHERWISE.

4. Quantity

The quantities of Marine Fuel delivered shall be measured and calculated in accordance with API/ASTM-IP Petroleum Measurement Tables by barge measurements at the time and place of delivery to the vessel and the amount so determined shall be conclusive and binding on the Buyer, regardless of measurements taken by Buyer's vessel. Buyer's representative or an approved petroleum inspector commissioned by Buyer shall have the right to be present at the time of measurement, provided that if such an inspector is commissioned by Buyer, all costs of commissioning the inspector shall be borne by Buyer and any delays caused or occasioned by the inspector, including but not limited to demurrage at the loading port shall be for the sole account of Buyer.

Buyer has the sole responsibility for determining the amount of Marine Fuel required.

5.PAYMENT TERMS AND FINANCIAL RESPONSIBILITIES

Buyer shall pay Seller, whether in receipt of delivery documents, the full amount stated in Seller's invoice, telegraphic report or other notification of quantity delivered and amount due without any deduction, offset or counterclaim whatsoever, in US Dollars, within thirty (30) days of delivery of Marine Fuel.

In the event payment by Buyer to Seller is delayed, Buyer shall pay interest at eighteen percent (18%) per annum, calculated daily starting on the 31st day from the date of delivery of Marine Fuel, on the sum of the amount delayed and accrued interest until full payment of all amounts due from Buyer to Seller have been received by Seller.

If a final invoice cannot be, or is not, dispatched in time for payment to be made within 30 days of delivery of Marine Fuel, Seller may invoice Buyer on a provisional basis.
A final invoice will be dispatched to Buyer by Seller as soon as practicable thereafter. Any resultant overpayment or additional payment shall be due to or by Seller, as the case may be within 30 days of issuance of the final invoice.

At any time before the scheduled delivery date, should Seller determine in its sole discretion that it would be inadvisable to make deliveries to Buyer on credit, Seller may request that Buyer pay cash in advance or put up security acceptable to Seller.
In such event, Buyer's compliance with Seller's request shall be a condition precedent to Seller's performance of any of its obligations under the Confirmation of Order. Notwithstanding anything to the contrary herein, failure by Buyer to comply with its obligations hereunder shall constitute a breach of condition, in which case Seller may at any time by notice to Buyer forthwith terminate any agreement for the delivery of Marine Fuel or suspend any actual supplying or scheduled supply of Marine Fuel.

In event of such breach by Buyer, Buyer shall be liable for all losses suffered by Seller as a result of Buyer's breach, provided that Seller's election to terminate any agreement for the delivery of Marine Fuel or suspend any actual supplying or scheduled supply of Marine Fuel shall be without prejudice to any other rights in law or equity accrued on or before the date of termination.

6. Nomination

Buyer shall give Seller at least seventy-two (72) hours notice (exclusive of Saturday, Sunday and public holidays of the delivery port) of the vessel's readiness to receive delivery of Marine Fuel, specifying in such notice the exact quantity, quality, place and date of delivery, name of vessel and other terms consistent with the delivery port authority's requirements for delivery of Marine Fuel.

7. Delivery and Loading Conditions

Buyer warrants that it will comply with all applicable laws, regulations and customs at the delivery port and have a full and efficient complement of master, officers and crew.

Delivery shall be made by barge at the discretion of Seller and the vessel will be bunkered as promptly as circumstances will permit, provided at least that, the vessel's estimated time of arrival at the delivery port is of such manner and at such intervals such that it complies with the rules, regulations and customary practices of the delivery port's authority, Sellers and Seller's suppliers.

In no event whatsoever shall Seller be obligated to purchase marine fuel or its equivalents from others in order to enable it to Marine Fuel to Buyer. Seller may, without liability, during any period in which it is unable to perform as set out in this Article, allocate its available supply of Marine Fuel in such a manner as Seller deems fair and equitable.

In the event Seller's capacity to perform becomes impracticable for any reason, Seller may reduce or stop deliveries in such a manner as it may in its sole discretion determine and shall be relieved of its obligation to perform hereunder.

8. Risk and Title

Delivery shall be deemed completed, and title and risk for Marine Fuel shall pass to Buyer at the permanent intake connection of Buyer's vessel whether the Marine Fuel conforms to applicable specification requirements.

Buyer shall be responsible for connection to intake of Buyer's vessel and pumping shall be performed under the direction of the receiving vessel.

9. Lien

Sale of Marine Fuel is made on the credit of receiving vessels as well as on Buyer's promise to pay. Seller shall have and may assert a lien against such receiving vessel for the invoiced amount resulting from delivery of Marine Fuel to same. Additionally, Seller shall have and may assert a lien for said invoiced amount against such receiving vessel if the laws applicable at the place of delivery of Marine Fuel or at the place of seizure of such receiving vessel grant or recognize a lien for Marine Fuel delivered to a vessel.

The taking of any additional security measures by Seller shall not operate as a waiver of this provision. Disclaimer stamps of any type or form on delivery documents, should any stamp be applied, shall be void and without any effect and meaning if it attempts to alter, change, or waive Seller's lien against the vessel or waives the vessel's ultimate responsibility and liability for debt incurred from the delivery of Marine Fuel.

10. Claim

Any claim for shortage in the quantity of Marine Fuel delivered shall only be valid if notice is made to Seller by Buyer and noted on the Note of Protest at the time of delivery and Seller receives written notification of claim within fourteen (14) days from the date of delivery.

Any complaints of defect in quality must be notified to Seller in writing within thirty (30) days of delivery and must be supported by proper evidence failing which such claim is time-barred. If the claim of defect in quality is duly notified to Seller, Seller shall send a representative sample within Seller's custody to an independent and internationally recognized laboratory of Buyer's own choice to test the specification of the Marine Fuel.

The result of such testing shall be conclusive and binding on Seller and Buyer. The costs of testing the representative sample shall be on the losing party's account. Any sample taken in a manner outside the control of Seller shall not be recognized as representative of Marine Fuel delivered. The submission of any claim to Seller shall not release Buyer of responsibility to make full payment of the invoiced amount as required in Clause 5 above and no right of offset or counterclaim is allowed to Buyer.

11. Seller's Liability

If after submission of a proper claim by Buyer and inspection by independent and internationally recognized laboratory, the quality of Marine Fuel delivered is determined to not conform to the specifications contained in the Confirmation of Order, Buyer must debunker the Marine Fuel and receive conforming Marine Fuel from Seller. For debunkering of the Marine Fuel, Seller shall, at its sole expense, arrange the necessary barging and receivable facilities to receive such Marine Fuel, provided that Buyer shall to the greatest extent possible, limit the losses of Seller in arranging the debunkering of Marine Fuel.

In the event of debunker, title and risk of loss shall pass to Seller upon the Marine Fuel's passing the outlet flange of Buyer's nominated vessel and delivery of replacement Marine Fuel shall be subject to the applicable provisions herein and the Confirmation of Order.

Seller shall not, in any event, be liable to Buyer for consequential, special or economic loss or damage, including but not limited to loss of profit or business, or demurrage charges at any port. Seller's total liability, regardless of method of calculation, directly or indirectly resulting from the single delivery of Marine Fuel pursuant to a Confirmation of Order, in no event shall be greater than the total invoiceable amount for that delivery

Notwithstanding anything to the contrary contained in this section, the Seller and Buyer may resolve by mutual agreement any situation which may arise as a result of Seller's delivery of non -conforming Marine Fuel.

12. Buyer's Liability

Seller reserves the right to revise the contract price if (1)the vessel fails to arrive or receive Marine Fuel within five (5) days from the latest date of the nominated estimated time of arrival, (2) Buyer changes the order quantity by more than ten (10) percent or (3) Buyer requests a material change in the terms and conditions of the Confirmation of Order.

If Buyer, for any reason, after Seller has accepted an order for delivery of Marine Fuel, should fail to receive the Marine Fuel according to the terms and conditions contained hereunder, in the Confirmation of Order or the notice of nomination, Seller shall have no obligation to supply Marine Fuel to Buyer.

Further, in such case, Buyer shall be liable to Seller for all costs, damages or expenses incurred by Seller as a result of Buyer's failure to receive the Marine Fuel, including, but not limited to, any demurrage.
Any loss of or damage to Marine Fuel or to property of Seller or its supplier or any other party caused by Buyer or its nominated vessel shall as between the parties hereto, be borne by Buyer and Buyer shall to such extent indemnify Seller or its supplier for the same.

Without prejudice to any other rights that Seller may have hereunder or in law or equity, if Buyer cancels the order or nomination for any reason or otherwise acts or fails to act in such a manner that the order or nomination is effectively canceled, Seller shall have the right to charge Buyer three (3) US Dollars per metric ton of Marine Fuel ordered or one thousand (1,000) US Dollars, whichever is greater, as compensation for Seller's loss of profit. Buyer shall pay such cancellation charge within seven (7) days following issuance of Seller's invoice for the cancellation charge.

13. Seller's Indemnity

Seller shall indemnify and hold harmless Buyer and the nominated vessel's owner and operator against any claims, losses, costs, damages, or expenses directly incurred by Buyer and the nominated vessel's owner and operator directly resulting from the supply of the Marine Fuel to the extent that such claims, losses, costs, damages, or expenses are directly caused by the gross negligence, error, omission, or violation of law by Seller, its agents or subcontractors or affiliated entities.

Notwithstanding any other provision, Seller will not indemnify or hold harmless Buyer or Vessel Owner/Operator against any claims, losses, costs, damages, or expenses caused by the act or omission of any third party that is not an agent or subcontractor of Seller. Further, Seller's total liability amount, to any or all parties, shall in no case be greater than the total invoiceable amount for that delivery, applicable insurance proceeds or proceeds received by Seller from its indemnitors, whichever is greater.

14. Buyer's Indemnity

Buyer and the nominated vessel's owner and operator will jointly and severally indemnify and hold harmless Seller and its supplier against any claims, losses, costs, damages or expenses incurred by Seller and its supplier and resulting from the supply of the Marine Fuel to the extent that such claims, losses, costs, damages, or expenses are caused by the negligence, error, omission, or violation of law by Buyer, the nominated vessel's owner or operator, their agents or subcontractors or affiliated entities. Notwithstanding any other provision herein, Buyer and nominated vessel's owner and operator will not indemnify or hold harmless Seller against any claims, losses, cost, damages or expenses caused by the act or omission of any third party that is not an agent, subcontractor or affiliated entity of Buyer

15. Force Majeure

Except with respect to the obligations for the payment of money due hereunder, the Confirmation of Order or invoice for delivery of Marine Fuel, neither party shall be liable or be in breach of any provision hereof or the Confirmation of Order for any failure or delay on its part to perform any obligation due to any cause beyond its reasonable control, including, without limitation, production cutbacks or embargoes on the export of crude oils or products, Acts of God, flood, fire, explosion, breakdown of plant, strike, lockout, labor dispute, work stoppage, war, insurrection, riot, civil commotion, rebellion, sabotage, or any injunction, law, regulation, ordinance or demand or requirement of any governmental authority, inability to procure or use materials, labor, equipment, transport, services or energy sufficient to meet manufacturing needs from customary sources at customary prices and without litigation, or any other cause whatsoever, whether similar or dissimilar to those enumerated herein, beyond the reasonable control of such party.

Seller shall not be responsible for any delay or failure to deliver Marine Fuels where performance is delayed, prevented or made substantially more expensive by circumstances beyond Seller's control, including but not limited to labor strife, social disorder or riot, compliance with any order, demand or request of any international, national, port, transportation, local, or other authority/agency. Seller shall not be liable for any demurrage resulting from such delay or failure to perform.

16. Governing Law

Unless otherwise in writing agreed to by the parties, the construction, validity and performance of the terms and conditions governing the delivery of Marine Fuel shall be governed by the laws of Korea in Agreement Korean court, provided that, Seller may select, at its sole and absolute discretion, another forum with competent jurisdiction, in which case, the law of that forum shall govern.

17. Environmental Protection

If an escape, spillage or discharge of oil (hereinafter referred to as a "spill") occurs while Marine Fuel is being delivered to Buyer hereunder, Buyer will promptly take such action as is reasonably necessary to remove the oil and mitigate the effects of such spill.

Notwithstanding the cause of such spill, Seller or its supplier is hereby authorized, at its option, upon notice to Buyer, or the receiving vessel, to take such measures, either in cooperation with Buyer, or exclusively as the sole party, and incur such expenses (whether by employing its own resources or by contracting with others) as are reasonably necessary in the judgment of Seller or its suppliers to remove the oil and mitigate the effects of such spill.

Buyer agrees to cooperate and render such assistance as is required by Seller in the course of such action. Any expenses, damages, costs, fines and penalties arising from escape, spillage, discharge or pollution of oil shall be paid by the party that caused such escape, spillage, discharge or pollution by a negligent act or omission. If both parties have acted negligently, any such expenses, damages, costs, fines and penalties shall be allocated between the parties in accordance with the respective degree of negligence. Buyer also agrees to give, or cause to be given, to Seller, all such document and other information concerning any spill, or any program for the prevention thereof, which are requested by Seller, or required by law or regulation applicable at the time and place where Seller delivers Marine Fuel to Buyer.

18. Miscellaneous

The Seller's right to require strict performance by Buyer of any obligations imposed upon Buyer herein or by the Confirmation of Order shall not in any way be affected by any previous waiver, forbearance, or course of dealing.

 

SK Corporation
6th Edition January 1999