War Risk P&I Cover 2001 - General Notice of Cancellation to Owners of Mobile Offshore Units entered in the Association for P&I and Comprehensive General Liability cover (17th October 2001)

Special MOU Circular No. 1/2001 Date 17 October 2001

To the Members of Assuranceforeningen Gard – gjensidig

Dear Sirs,

War Risk P&I Cover 2001 – General Notice of Cancellation to Owners of Mobile Offshore Units entered in the Association for P&I and Comprehensive General Liability cover

This circular constitutes general Notice of Cancellation of:

1. The additional market war risk cover which the Association has arranged to Owners of Mobile Offshore Units entered in the Association for P&I cover under the Rules for P&I cover of Mobile Offshore Units (the “Rules”); and

2. The additional market war risk cover provided to Owners of Mobile Offshore Units entered in the Association for Comprehensive General Liability Cover (“CGL”) under the CGL cover note.

The additional market war risk insurance to Owners of Mobile Offshore Units entered in the Association for P&I cover under the Rules covers P&I risks excluded from the P&I cover solely by virtue of the provisions of Rule 41 of the Rules. We refer to Appendix II to the Rules for the 2001 policy year. This additional market war risk cover is subject to the Standard War Risks Conditions Clause relating to termination of cover. This includes the Institute Notice of Cancellation and War Automatic Termination of Cover Clauses, which means that the insurance can be terminated upon the Association giving a 7 (seven) days’ notice.

In addition, the war risk cover under the CGL insurance as contained in the CGL Cover Note is subject to the War Risk cancellation clause. This provides that the cover may be cancelled by the Association when notified by its reinsurance underwriters.

However, the war risk covers mentioned above may be reinstated subject to agreement between the individual Member and the Association as to rate of premium and/or conditions and warranties.

Since the tragic terrorist attacks in the United States on 11 September, the Association has been reviewing the situation from day to day as events develop. In the current circumstances, it has now been decided that general Notice of Cancellation should be issued. The Association, now therefore advises that:

1. This Circular constitutes Notice of Cancellation of the War Risk Cover as described in Appendix II of the Rules; and

2. The Association has today, 17 October 2001, received Notice of Cancellation of the War Risks cover from its reinsurance underwriters in respect of the CGL insurance with effect from 24:00 hours GMT on 24 October 2001. Pursuant to the War Risk Cancellation Clause in Chapter 4, section 5 of the CGL Cover Note, the Association hereby also gives Notice of Cancellation of the War Risk cover afforded to the Assureds under this Cover Note.

The Notices of Cancellation in 1. and 2. above contained herein shall run as from 24:00 hours GMT on 17 October 2001. The cancellation will become effective at 24:00 hours GMT on 24 October 2001. The Notices of Cancellation shall apply to all persons or companies named as Assureds and/or Co-assureds in the P&I Certificate(s) of Entry and CGL Cover Note(s) for Mobile Offshore Units. Upon expiry of the notice at 24:00 hours GMT on 24 October 2001, the War Risk cover for Owners of Mobile offshore vessels entered for P&I risks under the Rules and the cover note for CGL, will be reinstated automatically on the condition that, notwithstanding the “Limit of Insurance” provision in the P&I certificate(s) of entry for P&I cover and the cover note for CGL, the combined limit applicable in respect of War Risks per event shall be the lesser of USD 100 million or the Limit of Insurance, provided that if the aggregate of all claims against the Owners for war risks and any other liabilities, costs or expenses recoverable pursuant to the cover note arising out of one event exceeds the Limit of Insurance, the Association shall not be liable to make any payment in respect of the amount by which any such claims exceed the Limit of Insurance.

Excluded Areas

The War Risk Cover will not be automatically reinstated for Owners of vessels trading or being within the territorial waters of any of the countries or places described in the Current Exclusions as attached (including any port area that at the date of this notice constitutes part of such a country or place however it may hereafter be described). However, the War Risks Cover may be reinstated against payment of additional premium as determined by the Association. The reinstated cover will be subject to the conditions of the existing P&I certificate(s) of entry and CGL cover note(s), as amended. Upon reinstatement, all the conditions as set out above will be incorporated into the policies. Members are invited to contact the insurance department if further clarification is required and/or if they wish the War Risk cover to be reinstated for current exclusions. Yours faithfully, Gard Services AS As agent only for Assuranceforeningen Gard – gjensidig Claes Isacson Chief Executive Officer

WAR RISK TRADING WARRANTIES

For use with Insurance on Vessels engaged in “World-wide” Trade.

1. This coverage shall extend world-wide, but in the event of a vessel or craft insured hereunder sailing for, deviating towards, or being within the Territorial Waters of any of the Countries or places described in the Current Exclusions as set out below (including any port area that at the date of this notice constitutes part of such a country or place however it may hereafter be described) additional premium shall be paid at the discretion of insurers hereon. Information of such voyage or deviation shall be given to insurers as soon as practicable, and the absence of prior advice shall not affect the cover hereon. In the event of the assured not requiring continuation of coverage for a vessel proceeding into or remaining within an excluded area, he shall so advise insurers hereon before the commencement of such voyage, deviation or period, and it shall be at the insurers’ discretion whether and on what terms the insurance shall be reinstated.

2. Current Exclusions

   1. Persian or Arabian Gulf and adjacent waters including the Gulf of Oman North of 24° N

   2. Angola (including Cabinda)

   3. Israel

   4. Lebanon

   5. Libya (including Gulf of Sidre/Sirte)

   6. Eritrea

   7. Somalia

   8. Congo, Democratic Republic of (formerly Zaire)

   9. Liberia

   10. Sri Lanka

   11. Sierra Leone

   12. Yugoslavia, Federal Republic of Serbia & Montenegro

   13. Gulf of Aqaba and the Red Sea

   14. Yemen / Peoples Republic of Yemen (North and South Yemen)

   15. Pakistan

   16. Oman

   17. Syria

   18. Algeria

   19. Egypt