EX-10 10 exh-9.txt FORM 10-Q, EXHIBIT 10.A.(LV) Amendment No. 3 to Shipbuilding Contract (Hull BN 460) THIS AMENDMENT NO. 3 TO SHIPBUILDING CONTRACT is made as of July 7, 2006 by and between AKER PHILADELPHIA SHIPYARD, INC., a corporation organized under the laws of Pennsylvania, having its principal office at 2100 Kitty Hawk Avenue, Philadelphia, PA 19112 (the "BUILDER") and MATSON NAVIGATION COMPANY, INC., a corporation organization under the laws of Hawaii, having its principal office at 555 12th Street, Oakland, CA 94607 (the "BUYER"). R E C I T A L S WHEREAS, the parties entered into that certain Shipbuilding Contract dated as of February, 14, 2005 for the purchase of one (1) CV 2500 type container vessel, designated as Builder's Hull No. BN 460 (the "Shipbuilding Contract"); and WHEREAS, the parties wish to amend the Shipbuilding Contract to reflect certain agreements as to priority work remaining to be performed on the Vessel and their status upon delivery of the Vessel. NOW, THEREFORE, in consideration of the foregoing premises, and for other good and valuable consideration, the receipt and adequacy of which are acknowledged, the parties hereby agree as follows: 1. ARTICLE VII, 2, second paragraph, of the Shipbuilding Contract shall be deleted and the following paragraphs substituted therefor: The BUYER shall take delivery of the VESSEL if it is substantially complete. The VESSEL shall not be deemed to be "substantially complete" if the aggregate value of the delivery deficiencies excluding those items of work as provided in the next paragraph is in excess of ONE MILLION DOLLARS ($1,000,000.00) or if any of the items identified as required for delivery in Exhibit 1A are not completed. 2. The BUYER and the BUILDER also agree as follows: a. The BUYER and the BUILDER have agreed that: (i) The items of work listed in Exhibit 1B constitute priority work items that must be completed by the BUILDER before the VESSEL sails (the "Sailing Work"); and if the VESSEL is delivered without any of such work items having been completed delivery of the Vessel will proceed, but the remaining items will be included in Exhibit 1 to the PROTOCOL OF DELIVERY AND ACCEPTANCE and no funds will be released from the related escrow fund holdback for any work until all Exhibit 1B items are completed or the Vessel sails. (ii) BUYER has prepared a list of deficiency items and has identified among the deficiencies the work items that BUYER desires to have completed prior to sailing. A list of second priority items is attached as Exhibit 1C (the "Second Priority Sailing Work"). If the VESSEL is delivered without such work items having been completed, the remaining items will be included in Exhibit 1 to the PROTOCOL OF DELIVERY AND ACCEPTANCE and funds will be released as work on such items is completed provided the precondition to payment in (i) above is satisfied. (iii) BUYER and BUILDER have entered into two change orders for modifications to the galley area, COA-44 and 44b, that were anticipated to be completed by BUILDER after delivery but before sailing of the Vessel (the "Galley Modifications"). BUYER has also provided BUILDER with a list of additional items of work as described in Exhibit 1D (the "Additional Work") that BUYER has requested that BUILDER complete under the Agreement Concerning Post Delivery Work prior to sailing. (iv) BUYER's planned sailing of the Vessel is now scheduled for August 5, 2006. BUILDER will provide BUYER by July 11, 2006 with a Production Schedule detailing completion of the Sailing Work, the Second Priority Sailing Work, the Galley Modifications and the Additional Work prior August 5, 2006. The Production Schedule must include the following details: estimated major milestones for galley completion, estimated compartment completion of accommodations by deck, estimated completion of open test memos by test memo and estimated final completion date for Vessel departure. Except as provided in (i) and (ii) above and in COA-44 and 44b, payment for such work to be paid as completed. Additional details regarding payment for such work, as well as other matters relating to the Post Delivery availability period contemplated herein shall be set forth in a separate Agreement Concerning Post Delivery Work to be executed at delivery. b. The BUYER will accept the BUILDER'S force majeure claim of 54 days relating to the late delivery of the main engine and to change the Contract Delivery Date from May 7, 2006 to June 30, 2006. c. For the purpose of calculating interest pursuant to ARTICLE II, 1, c, the date for the "Float out of the Vessel" shall be May 10, 2006. d. The BUYER will commit on July 7, 2006 with its lender to have funds available for the planned Vessel delivery on July 12, 2006. If the Vessel is not or cannot be delivered on July 12, 2006 either because of the Vessel is not substantially complete in accordance with the requirements of ARTICLE VII, 2 of the Shipbuilding Contract or because of any other actions or failures of the BUILDER, then the BUILDER will pay the breakage costs actually incurred by the BUYER to its lender. 3. No Additional Changes Except as otherwise herein expressly --------------------- provided, all other provisions of the Shipbuilding Contract shall remain in full force and effect. 4. Counterparts. The Amendment may be executed in any number of ------------ counterparts, each of which shall be deemed to be an original and all of which when taken together shall constitute one and the same instrument. Delivery of an executed counterpart by facsimile or electronic transmission will be deemed as effective as delivery of an originally executed counterpart. IN WITNESS WHEREOF, the parties have duly executed this Amendment No. 3 to Shipbuilding Contract as of the date first set forth. AKER PHILADELPHIA SHIPYARD, INC. By: /s/ David E. Meehan ---------------------------- David E. Meehan Title: President and CEO MATSON NAVIGATION COMPANY, INC. By: /s/ K. C. O'Rourke ---------------------------- K. C. O'Rourke Title: Senior Vice President Exhibit 1A MAUNALEI - DELIVERY REQUIREMENTS USCG WORKLIST ITEMS 7 JULY 2006 No. DESCRIPTION --- ----------- 1. Show proper operation of OWS, and post pollution placard. 2. Show proper operation of Water Mist system. 3. Ensure G/A alarm, enunciators, is working properly, non-volume controlled. WORKLIST ITEMS TO BE COMPLETED PRIOR TO DELIVERY 3 JULY 2006 REFERENCE DOC. ITEM # DESCRIPTION -------------- ------ ----------- UNFINISHED WORK 4. ITEMS 178 Replace damaged monorail crane cable UNFINISHED WORK 5. ITEMS 232 Ballast System TLE's Tks 1.04&1.05 UNFINISHED WORK 6. ITEMS 267 Prove Bilge Suctions to three valve nitches TEST MEMO 7. STATUS #460 C1 ALFAL LAVAL SEPARATORS TEST MEMO 8. STATUS #460 C18 FIXED WATER MIST FIRE EXTINGUISHING TEST MEMO 9. STATUS #460 C21 BILGE WATER SEPARATOR TEST MEMO 10. STATUS #460 C32 GA\PA SYSTEM Exhibit 1B MAUNALEI - SAILING REQUIREMENTS USCG WORKLIST ITEMS 7 JULY 2006 1. Relocate lower level E/R hose reel closer to hydrant. 2. Provide G/A alarm and siren in #5 hold. 3. Install a red light/lens on SSDG room for the G/A alarm. 4. Provide adequate protective covering on the back of the main electrical switch board. 5. Provide the following documents; Stability letter, ISM manuals, COFR, COD, life raft certificates, loading manual, SOPEP, VRP. 6. Demonstrate proper operation of Emergency lighting in all cargo holds. Correct discrepancies as indicated on inspection record DTD 26 Jun 1006. GL WORKLIST ITEMS - 7 JULY 2006 No. DESCRIPTION --- ----------- 1. Water Mist System to complete and re-test outstanding items. 2. Outstanding certificates for Equipment to supply. 3. Inclining Experiment to undertake and Stability Booklet to compile and have approved by GL. 4. Steam Lines and Flanges to complete insulation. 5. Completion of all outstanding Blue Marks to be undertaken. 6. Completion of all outstanding inspections, (especially electrical cabling). 7. LT FW Pumps overheating and overloading, (140/142 Amp; 68C) to rectify. 8. ME LO Pump E-Motor Temp at 70C to advise or rectify. 9. SW P/Ps vibration to cure 10. LT P/Ps vibration to cure. 11. Boiler Gauge Glasses visibility from control stand to enhance. 12. Provide approved inclining results 13. Stbd Emergency exit hatch facing wrong way, to be refitted. 14. Drains condenser continuous water hammer to be cured. 15. Cabling installation to be completed, (properly secured, seperated, laid). 16. Bridge wing consoles, gyro repeaters and aerials vibrations to cure. 17. Vibration and noise issues exceeding acceptable limits as per GL Consultants report to rectify. Exhibit 1C MAUNALEI - SECOND PRIORITY SAILING ITEMS No. DESCRIPTION --- ----------- 19 Cable splice FR 120 20 Cable splice FR 80 24 Cable temp sensor TK 8 no loop. 35 Cable Splices over LO purifiers 41 CH 4 No separtion of control & power cables 42 Armored cables feeding LTFW not grounded. 48 Loose Cables Purifier area. 55 Intrinsicly safe cables - traced in blue. 61 Install rudder post locking device properly. 65 Ballast Tks 1.06&1.07 burn marks in tk-coat 66 Lashing Rod for Monorail Crane 69 Missing PA/GA Horns in CH 5 77 Handrail on P&S platforms @ FR 211 78 SW Overboard Valve From LT Coolers 81 Cargo Hold 2 Cable Separation 82 Main Swbd Loose and Uninsulated Cable 83 Fuel Pipe Heat Trace System 84 Ungrounded Cable Shields Cargo Hold 2 86 Cables too close to heat trace lines. 90 Bridge Batteries 91 Bridge Battery Bank Wiring 94 230V Transformer Cables 97 Main LO Pump Cable - Deck Penetration 99 Electrical Cable Termination 104 Identify and Repair Exposed Cable 105 Properly Splice Cable 112 Remove Excessive Cable 128 Complete Insulation No. 4 Cargo Hold 139 Install Missing Handrail No. 1 Cargo Hold 146 Install missing handrails and caps No 2 CH 150 Install Missing Elec Receptacle 151 Install Missing Elec Receptacle 152 Install Missing Elec Receptacle 153 Install Missing Elec Receptacle 154 Install Missing Elec Receptacle 155 Install Missing Elec Receptacle 156 Install Missing Elec Receptacle 158 Install Missing Elec Receptacle 167 Bow Thruster Cable Chafing 168 Fan E33 Control Circuit Wiring 172 Escape Trunk PT100 Cable Installation 173 Escape Trunk Wiring Support 174 Electric Cable Termination 176 Replace borken hatch indicator switch 178 Replace damaged monorail crane cable 182 Cable Termination 5th deck E room 183 Cable Termination 5th deck E room 184 Cable Termination under Main Swbd 191 Securing of UPS Unit 193 Steering Gear Control Panel Wiring 196 MCT packing under main switchboard 214 Repair Navtex receiver 216 Install missing vessel name boards 218 Repair Gyro Failure Alarm 220 Steam Dump Condenser 221 Repair No. 1 and 2 LT Cooling Pumps 222 Repair Leak on No 1 HFO Separator 226 Replace seals on No. 1&2 Boiler Feed Pump 228 Scavenge Air Drain Tank Releif Valve Piping 229 Replace HVAC Gages 230 Main Engine Exhaust Leak 231 Boiler Exhaust Piping Vibration 232 Ballast System TLE's Tks 1.04&1.05 239 SW Coolers Inlet Thermometers 241 HT Cooling Pipe Support 248 DG Booster Pump Change Over Controls 250 Main SW Strainers 252 Main Engine Turning Gear Motor 254 Main Engine Cyl No.6 Ex. Valve Drain valve 256 Evap Fill Valve to Double Bottom 257 Main Engine CW Vent Piping Support 259 Diesel Gen No.1&2 Turbo outlet Thermometer 263 Main Engine Exhaust Line Supports 290 Steering Gear Flat Handrail 291 Steering Gear Flat Chafing 294 CO2 Piping Hanger 297 Fire Main Hanger 310 Main Deck Penetration 311 Exterior Main Deck Penetration 313 Exterior Main Deck Penetration 314 Exterior Main Deck Penetration 324 Exterior Main Deck Missing Locking Clips 327 Exterior Main Deck Hatch Cover Dogs 331 Exterior Main Deck Leak 353 Diesel Generator Control Cable Support 355 Rescue Boat Heater Indicator Lamp 360 Heeling Pump Junction Box 361 Bridge Control Console Chafing 362 Bridge Radio/GMDSS Console Chafing 377 Deck Containment and Funnel 381 Tank and Bilge Well Cleaning 382 Main & Emergency Fire Pump Controls 385 Securing of Cables on Open Decks 393 SLOPS Disposal 60 tons 398 Remove FO Manhole Cover Handles #4Cargo 399 Install Missing Handrail No. 4 Cargo Hold 400 Replace missing/broken term guardsDBC4 403 Presentation of Machinery Spart Parts for Ver 404 Cable Separation DB2 Platform Deck 405 Cable Separation DB2 Platform Deck 406 Repair Power On Light in Reefer Panel DBC4 408 Flying Bridge floodlight conduit support port 411 Bridge Control & GMDSS frame gounding 412 House Heads drains & vents/Sewage smell 413 Replace missing/broken term guardsDBC3 414 Properly Terminate cables in 5th deck Eroom 417 Cable Separation from heat source Fr 20 port 419 Cable Separation from heat source Fr 20 port 420 Correct Cable Chafing FR 18 Stbd Side 421 Properly Terninate cable in fire control room 425 Weekly Item List Feb16-2 Valve Niche Exh. 426 Weekly Item List Feb 16-8 Tank 1,05 Clean 428 Weekly Item List Mar30-5 Automation Wiring 431 Weekly Item List Apr13-7 Sun Awning 432 Weekly Item List Apr 27-7 Splice As builts 435 Weekly Item List May18-3 LO Pump Elec. 436 Correct Wiring Jumper on Circuit X15 in DB1 437 Correct Wiring for oil residue pump in DB1 438 Locate splice at FR 170 stbd side in J Box 439 Correct Chafing at FR81 stbd void in ovrhd 440 Properly pack MCT in room 513 442 Correct Chafing on foremast aft of breakwater 443 Properly terminate cables in EngRmEscape 444 Install explosion proof plug in Paint Locker 445 Weekly Item List May25-2 Purifier sensors 451 Fill Open Chicklet in lower ER 454 Fair warped 2nd deck of ER 455 Repair leaking flange FR 10 stbd 456 Repair leaking flange on top of cyl LO tank 457 Connect RTD FR22 stbd 461 Weld pipe hanger above Gen #4 464 Weld pipe hanger above Gen #2 465 Grind Weld seams on Gen flat trollies 466 Install missing pipe hanger above Gen #2 469 Refit lifting beam above inbd air compressor 470 Complete missing structural weld 472 Weld dosing unit at platform deck 474 Provide access or reach rod to sewage valve 476 Provide safe access to steam manifold valves 477 Degrease and clean purifier area 478 Replace cracked brass water valve HFO pur. 479 Clear blocked drain near MDO purifier 481 Clear blocked deck drain near air compressor 484 Install missing step in void FR 11 485 Reweld three CO2 hangers FR 14 stbd 487 Secure tachometer mount on main engine 489 Weld hanger to tank top in shaft alley 490 Weld hanger in shaft alley 492 Weld hanger in shaft alley 493 Add hanger to tubing in shft alley 494 Clear blocked drain near dirty oil pump 499 Repair leaking pneumatic valve 500 Weld 3 tubing hangers ER bilge 502 Repair leaking FO fitting ER bilge 503 Weld pipe hanger in ER bilge 504 Install hanger cap in ER bilge 505 Weld out pump and catwalk foundation ER 506 Provide access to valve on feed water fill pump 507 Weld cap on kick pipe ER bilge 510 Provide lint trap main laundry 512 Properly mount fire detector fwd of boiler 513 Replace missing watch duty reset button 516 Install missing handrail safety chain FR 211 517 Install missing handrail Cargo Hold No. 4 518 Weld Out Cable Tray Support in 1st dk eroom 519 Weld Out handrails near treatment rm 2nd dk 521 Replace and Demostrate Valve Niche Elec. 522 Repair Fire Fighting Pump off lights in console 523 Secure Microprocessor & UPS - Ship' office 524 Replace Temporary Choker on Compass 525 Properly terminate cable under DG4 alternator 526 Install hanger on boiler HFO return line 527 Install cable to PT100sensor for Tank 5.01 BLUE MARK INSPECTION DB 3629 FIRE DETECTION SYSTEM BLUE MARK INSPECTION DB 3665 QUICK CLOSING VALVE\FIRE DAMPERS Exhibit 1D MAUNALEI - ADDITIONAL WORK ITEMS Item No. Description ---- ----------- 1 Remove existing shelving, install foundations and Lista Cabinets 2 Prefabricate and install foundations, and install Lista cabinets 3 Prefabricate and install foundations, and install Lista cabinets 4 Wire in additional ME sensor points to monitoring system 5 Install 28 cylinder exhaust temperature sensors and rails, wire into monitoring system 6 Install Kyma shaft horsepower meter 7 Marinfloc OWS piping requirements & wiring 8 Install PMI system on ME 9 Modify piping to connect into MDO system 10 Install sink and drinking fountain 11 Modify 28 lashing bar brackets Main deck 12 Furnish and install turnbuckle bins in bson store 13 Paint hatch cover sockets 14 Install accordion door between officer/duty mess 15 Hand rails on aft end of stack exhaust deck 16 2 Pilot ladder stowage boxes on main deck 17 Matson gangway platforms Port & Stbd 18 Cascade air bottle system 19 Remove/relocate deck ladders 20 Install lashing bar bins in-between hatches 21 Install 3 keyless entry security locks 22 Mounting bracket for Billy Pugh on house blkhd 23 Security bars on coaming openings 24 Lista cabinet foundations 25 Piping for livestock feed water 26 Install safety wire for port and stbd gangway 27 Upper Foremast safety cage on ladder 28 Door installation to "Suez Talley office" 29 Land line for cargo operations