A SUBSTANSIVE HISTORY

Bolero originated from a European Union funded research initiative tasked with establishing a global cross-industry solution to enable the dematerialisation of cross border trade processes.

In 1995 the Bolero Association was created, quickly gaining momentum with bank, corporate and logistics membership across Europe, USA and Asia.

This early initiative resulted in the Bolero "concept" incorporating a central "registry" for all trade related documents of title together with a draft legal agreement which would ensure that any documents sent over Bolero would have the same legal meaning as the paper document it replaced, irrespective of legal jurisdiction.

The substantial interest in commercialising this concept with broad global support was realised in 1996 with the agreement by SWIFT (the bank owned co-operative specialising in secure inter-bank messaging) and TT Club (the international transport and logistics industry's leading provider of insurance and related risk management services) to create a joint venture company to build, market and support the Bolero infrastructure.

The resulting joint venture company, Bolero International Limited, was incorporated in 1998.

The initial Bolero infrastructure consisted of a Core Messaging Platform built by SWIFT to meet the functional specification defined by the new Bolero entity, a Title Registry, enabling the fully electronic transfer of title, built under contract to Bolero and the Bolero Rulebook, a unique multi-party legal agreement.

The Bolero service went fully live in 1999, operated and supported by SWIFT under a 10 year operating agreement established as part of the terms of the joint venture.

In 2000, additional funds were raised from the venture capital markets through a funding round led by Apax Partners and Baring Private Equity Asia.

In the period from 1998 to 2002, the Company was successful in creating widespread awareness of the Bolero service, establishing a number of proof points through live operation in a variety of substantial trade chains.

In 2003 a new leadership team was recruited to fully commercialise the Bolero service building on the substantive early market efforts of the original Bolero management team.

Working in conjunction with a number of global driver corporates and their core partner banks, the Bolero service was enhanced to include a number of additional value-added services and targeted specifically on the trade finance related processes between Corporates, Commodity Traders and their Banks.

To enable corporate customers and banks to be able to speedily adopt the Bolero service to enable multi-bank trade finance automation, priority was given to the provision of "out-of-the-box" multi-bank trade finance applications (solutions) for corporates and ease of inter-operability for banks and other trade participants. Key to this objective was for the Bolero messaging platform to be able to support a range of industry solutions deployed either as traditional software installations or as web-hosted services.

In 2005 Bolero began to deliver a comprehensive suite of multi-bank trade finance applications built directly on the proven Bolero messaging infrastructure. These applications were designed and built specifically as web-based single-instance solutions delivered as a service (Software as a Service, or "SaaS"), enabling ease of use with no infrastructure investment.

During 2010, the operation of the Bolero services was successfully transitioned from SWIFT to a leading-edge commercial hosting facility in dual mirrored data-centres enabling high availability, full disaster recovery, added scalability and performance, and full SAS 70 compliance.

Today, Bolero is the leading provider of Multi-Bank Trade Finance services through global adoption of its unique multi-bank messaging channel and support of a range of corporate solution options including the Bolero SaaS applications, third party trade finance applications and corporates' in-house developed applications.

Until February 2010 the Rules of all of the clubs comprising the International Group of P&I Clubs (the Group) specifically excluded liabilities in respect of the carriage of cargo under all electronic, that is paperless, trading systems to the extent that the liabilities under such systems would not have arisen under a 'normal' paper system, that is one using transferable paper documentation.

The Group, after reviewing a number of electronic trading systems, agreed that liabilities arising in respect of the carriage of cargo under such systems would be covered from 20 February 2010 provided that the system had first been approved by the Group. Two systems approved by the Group in their versions current at the date of this circular are that administered by Electronic Shipping Solutions (the ESS system - version DSUA v. 2009.3) and that administered by Bolero International Ltd (the Bolero system - Rulebook/Operating Procedures September 1999). The websites of the two entities are www.essdocs.com and www.bolero.net.

The legal documentation associated with the use and operation of the two systems is reviewed by the Group and its legal advisers if and when amended by either of the organisations, to ensure that any modifications introduced by them meet the Group's requirements.

Traditional exclusions of cover under Club Rules relating to the carriage of cargo, will of course continue to apply in respect of ESS and Bolero in the same way as for paper systems e.g. discharge at a port or place other than the port or place provided for in the contract of carriage, the issue/creation of an ante or post dated electronic document/record, delivery of cargo without the production of the negotiable electronic document/record.

Members should also be aware that participation in an electronic trading system may expose them to certain liabilities which are not of a traditional P&I nature. These may arise through shipowners or charterers who wish to participate in either the ESS or Bolero systems being required to be party to particular contractual

arrangements under which they assume obligations necessary for the system to operate. Examples of such liabilities may be for breach of confidentiality undertakings or of obligations to maintain computer links.

Members should be aware that, in so far as such risks are not of a traditional P&I nature, other insurance arrangements may be required.

Finally it would be helpful to the Group, in monitoring the use and development of the two systems, if Members who are using either of them would advise their Club that they are doing so and of any benefits or difficulties which they encounter, legal or practical, in the operation of either system.