Exhibit 10.2.3
Copyright: Norwegian Shipbrokers' Association, Oslo, Norway.
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Norwegian Shipbrokers' Association's
Memorandum of Agreement for sale and
purchase of ships. Adopted by The Baltic
MEMORANDUM OF AGREEMENT and International Maritime Council
(BIMCO) in 1956.
Dated: 20 October, 2004
Code-name
SALEFORM 1993
Revised 1966, 1983 and 1986/87.
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Oceanspirit Ltd., BERMUDA hereinafter called the Sellers, have agreed to sell,
and
Concord Ltd., Bermuda, A WHOLLY OWNED SUBSIDIARY OF ARLINGTON TANKERS LTD,
BERMUDA, hereinafter called the Buyers, have agreed to buy
Name: M/T "STENA CONCORD"
Classification Society/Class: DNV/+1A1 Tanker for Oil and Chemicals, IMO Type 2,
ESP, E0, NAUTICUS, (Newbuilding), TMON, LCS (SI), SPM, VCS-2, hI (1,53) a2, x0,
x0, x0, xxx.0,0
Xxxxx: 2004 BY: Uljanik Shipyard, Croatia
Flag: BERMUDA Place of Registration: BERMUDA
Call Sign: ZCDI5 Grt/Nrt: 27,357/13,866
Register Number: IMO 925 8600
hereinafter called the Vessel, on the following terms and conditions:
DEFINITIONS
"Banking days" are days on which banks are open both in the country of the
currency stipulated for the Purchase Price in Clause 1 and in the place of
closing stipulated in Clause 8.
"In writing" or "written" means a letter handed over from the Sellers to the
Buyers or vice versa, a registered letter, telex, telefax or other modern form
of written communication.
"Classification Society" or "Class" means the Society referred to in line 4.
1. PURCHASE PRICE SEE CLAUSE 19.
2.
3. PAYMENT
The said Purchase Price shall be paid in full free of bank charges to a bank
account to be notified by the buyers
on delivery of the Vessel, but not later than 3 banking days after the Vessel is
in every respect physically ready for delivery in accordance with the terms and
conditions of this Agreement and Notice of Readiness has been given in
accordance with Clause 5.
4. INSPECTIONS SEE CLAUSE 20.
5. NOTICES, TIME AND PLACE OF DELIVERY
a) When the Vessel is at the place of delivery and in every respect physically
ready for delivery in accordance with this Agreement, the Sellers shall
give the Buyers a written Notice of Readiness for delivery.
b) The Vessel shall be delivered and taken over safely afloat at a safe and
accessible berth or anchorage or at sea.
in the Sellers' option.
Expected time of delivery: SIMULTANEOUS WITH THE CLOSING OF THE PUBLIC
OFFERING DESCRIBED IN EXHIBIT 3.
Date of cancelling (see Clause 14): December 1, 2004.
c)
d) Should the Vessel become an actual, constructive or compromised total loss
before delivery this Agreement shall be null and void.
6.
7. SPARES/BUNKERS, ETC. SEE CLAUSE 22
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The Sellers shall deliver the Vessel to the Buyers with everything belonging to
her on board and on shore. All spare parts and spare equipment including spare
tail-end shaft(s) and/or spare propeller(s)/propeller blade(s), if any belonging
to the Vessel at the time of inspection used or unused, whether on board or not
shall become the Buyers' property, but spares on order are to be excluded.
Forwarding charges, if any, shall be for the Buyers' account. The Sellers are
not required to replace spare parts including spare tail-end shaft(s) and spare
propeller(s)/propeller blade(s) which are taken out of spare and used as
replacement prior to delivery, but the replaced items shall be the property of
the Buyers. The radio installation and navigational equipment shall be included
in the sale without extra payment if they are the property of the Sellers.
Unused stores and provisions including lubricating oil shall be included in the
sale and be taken over by the Buyers without extra payment.
The Sellers have the right to take ashore crockery, plates, cutlery, linen and
other articles bearing the Sellers' flag or name, provided they replace same
with similar unmarked items. Library, forms, etc., exclusively for use in the
Sellers' vessel(s), shall be excluded without compensation. Captain's, Officers'
and Crew's personal belongings including the slop chest are to be excluded from
the sale, as well as the following additional items (including items on hire):
8. DOCUMENTATION SEE CLAUSE 23.
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The place of closing: Bermuda
In exchange for payment of the Purchase Price the Sellers shall furnish the
Buyers with delivery documents, namely:
a) Legal Xxxx of Sale in a form recordable in Bermuda (the country in which
the Buyers are to register the Vessel) warranting that the Vessel is free
from all encumbrances, mortgages and maritime liens on any other debts or
claims whatsoever, duly notarially attested and legalized by the consul of
such country or other competent authority.
b) Current Certificate of Ownership issued by the competent authorities of the
flag state of the Vessel.
c) Confirmation of Class issued within 72 house prior to delivery.
d) Current Certificate issued by the competent authorities stating that the
Vessel is free from registered encumbrances.
e) Certificate of Deletion of the Vessel from the Vessel's registry or other
official evidence of deletion appropriate to the Vessel's registry at the
time of delivery, or, in the event that the registry does not as a matter
of practice issue such documentation immediately, a written undertaking by
the Sellers to effect deletion from the Vessel's registry forthwith and
furnish a Certificate or other official evidence of deletion to the Buyers
promptly and latest within 4 (four) weeks after the Purchase Price has been
paid and the Vessel has been delivered.
f) Bermuda Certificate of Permission to Transfer
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g) Any such additional documents as may reasonably be required by the
competent authorities for the purpose of registering the Vessel, provided
the Buyers notify the Sellers of any such documents as soon as possible
after the date of this Agreement.
At the time of delivery the Buyers and the Sellers shall sign and deliver to
each other a Protocol of Delivery and Acceptance confirming the date and time of
delivery of the Vessel from the Sellers to the Buyers.
At the time of delivery the Seller shall hand to the Buyers the classification
certificate(s) as well as all plans etc., which are on board the Vessel. Other
certificates which are on board the Vessel shall also be handed over to the
Buyers unless the Sellers are required to retain same, in which case the Buyers
to have the right to take copies. Other technical documentation which may be in
the Sellers' possession shall be promptly forwarded to the Buyers at their
expense, if they so request. The Sellers may keep the Vessel's log books but the
Buyers to have the right to take copies of same.
9. ENCUMBRANCES
The Sellers warrant that the Vessel, at the time of delivery, is free from all
charters, encumbrances, mortgages and maritime liens or any other debts
whatsoever. The Sellers hereby undertake to indemnify the Buyers against all
consequences of claims made against the Vessel which have been incurred prior to
the time of delivery.
10. TAXES, ETC.
Any taxes, fees and expenses in connection with the purchase and registration
under the Buyers' flag shall be for the Buyers' account, whereas similar charges
in connection with the closing of the Sellers' register shall be for the
Sellers' account.
11. CONDITION ON DELIVERY SEE CLAUSE 24
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The Vessel with everything belonging to her shall be at the Sellers' risk and
expense until she is delivered to the Buyers, but subject to the terms and
conditions of this Agreement she shall be delivered and taken over as she was at
the time of inspection, fair wear and tear excepted.
However, except as set forth in Annex A hereto the Vessel shall be delivered
operationally seaworthy and in every way fit for intended service under the Time
Charter Party and with her class maintained without condition/recommendation*,
free of average damage affecting the Vessel's class, and with her classification
certificates and national certificates, as well as all other certificates the
Vessel had at the time of inspection, valid and unextended without
condition/recommendation* by Class or the relevant authorities at the time of
delivery.
"Inspection" in this Clause 11, shall mean the Buyers' inspection according to
Clause 4 a) or 4 b), if applicable, or the Buyers' inspection prior to the
signing of this Agreement. If the Vessel is taken over without inspection, the
date of this Agreement shall be the relevant date.
* Notes, if any, in the surveyor's report which are accepted by the
Classification Society without condition/recommendation are not to be taken
into account.
12. NAME/MARKINGS SEE CLAUSE 25.
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13. BUYERS' DEFAULT
Should the Purchase Price not be paid in accordance with Clause 3, the Sellers
have the right to cancel the Agreement, and shall be entitled to claim
compensation for their losses and for all expenses incurred together with
interest.
14. SELLERS' DEFAULT
Should the Sellers fail to be ready to complete a valid legal transfer by the
date stipulated in line 61 the Buyers shall have the option of cancelling this
Agreement.
Should the Sellers fail to be ready to complete a valid legal transfer as
aforesaid they shall make due compensation to the Buyers for their loss and for
all expenses together with interest if their failure is due to proven negligence
and whether or not the Buyers cancel this Agreement.
15.
16. ARBITRATION SEE CLAUSE 26.
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The laws of England shall govern this Agreement.
THE ATTACHED RIDER WITH CLAUSES 17 - 26 AND ANNEX A FORM PART OF THIS AGREEMENT.
RIDER TO MEMORANDUM OF AGREEMENT BETWEEN CONCORD LTD.
AND OCEANSPIRIT LTD., FOR THE SALE AND PURCHASE OF
M/T "STENA CONCORD"
17. PARTICULARS OF THE VESSEL
See the attached Questionnaire 88, Exhibit 1.
18. SALE AND CHARTER BACK
Upon delivery of the Vessel to the Buyers under this Agreement, the Vessel shall
be delivered under a Time Charter Party, attached as Exhibit 2, entered into
between the Buyers and a company affiliated with the Sellers, (the "Time
Charterers").
19. PURCHASE PRICE
The Purchase Price for the Vessel shall consist of common shares of Arlington
Tankers Ltd. ("Arlington") and cash. Capitalized words used in this Clause 19
and not defined shall have the meaning set forth in the Arlington Registration
Statement on Form F-1 (the "Registration Statement") attached hereto as Exhibit
3.
I) The number of Arlington common shares to be delivered to the
Sellers (the "Total Number of Shares") shall be determined as
follows:
A) Calculate the "Total Equity Amount" by multiplying the
price per share at which the Arlington shares are sold
pursuant to the initial public offering by the
aggregate number of shares issued to the subsidiaries
of Concordia and Stena and the two companies owned by
Stena and Fram for the purchase of the Fleet;
2(5)
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B) Calculate the "Equity Value" by multiplying the Total
Equity Amount by 0.079.
C) Calculate the Total Number of Shares by dividing the
Equity Value by the price per share at which the
Arlington common shares are sold pursuant to the
initial public offering.
II) The amount of cash Purchase Price to be received by the Sellers
shall be determined as follows:
A) Calculate the "Fleet Purchase Price" by summing the
following: a) the Total Equity Amount; b) one hundred
thirty-five million dollars ($135,000,000); and c) the
product of the price per share at which the Arlington
common shares are sold pursuant to the initial public
offering multiplied by the aggregate number of shares
issued to the public (the "Gross Proceeds"); less (i)
the product of the Gross Proceeds multiplied by
0.06625, (ii) the fees paid by Arlington pursuant to
the $135 million secured facility agreement with Fortis
Bank (Nederland) N.V. and HSBC Bank plc and (iii) the
estimated total expenses of issuance and distribution
found under the caption "Expenses of Issuance and
Distribution" in the Registration Statement.
B) Calculate the "Vessel Purchase Price" by multiplying
the Fleet Purchase price by 0.103.
C) Subtract the Equity Value from the Vessel Purchase
Price to determine the amount of cash to be delivered
to the Sellers.
20. INSPECTIONS
The Buyers have the right to inspect the Vessel and the Vessel's records prior
to delivery. As the Vessel will be chartered back as set out in Clause 18 such
inspection is not a condition for the sale which is outright and definite and
subject only to the conditions of this Agreement.
3(5)
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21. FAILURE TO CONSUMMATE PUBLIC OFFERING
In the event the public offering described in Exhibit 3 is not consummated by
December 1, 2004, both the Buyers and the Sellers shall have the option of
canceling this Agreement and neither the Buyers nor the Sellers shall be
entitled to damages or to any other compensation or reimbursement of expenses.
22. SPARES/BUNKERS, ETC.
The Sellers may leave onboard for use under the Time Charter Party items which
Sellers are entitled to take ashore and other items excluded from the sale. Such
items shall be taken ashore by the Time Charterers at the expiry of the Time
Charter Party. Bunkers remaining on board after the time of delivery remain the
property of the Time Charterers.
23. DOCUMENTATION
The Sellers shall provide the Buyers with draft copies of documentation no later
than ten days prior to the expected time of delivery of the Vessel.
4(5)
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24. CONDITION ON DELIVERY
Notwithstanding any provision of Clause 11, in the event the Vessel does not
comply with one or more of the requirements referred to on line 220-224 hereof,
the Sellers shall have the right to deliver the Vessel to the Buyers.
25. REPRESENTATIONS AND WARRANTIES
None of the representations and warranties in this Agreement shall survive
following the delivery of the Vessel and the delivery documents referred to in
Clause 8.
The Sellers shall make best efforts to have any remaining warranty rights
against the shipyard and makers of equipment under the relevant Shipbuilding
Contracts assigned to the Buyers.
26. NAME/MARKINGS
The Vessel's name and Funnel markings shall be maintained for the duration of
the Time Charter Party.
27. GOVERNING LAW AND ARBITRATION
Any dispute arising under this Agreement shall be referred to arbitration in
London in accordance with the provisions of the Arbitration Xxx 0000, or any
statutory modification or re-enactment thereof for the time being in force save
to the extent necessary to give effect to the provisions of this Clause. The
arbitration shall be conducted in accordance with the London Maritime
Arbitration Association (LMAA) terms current at the time when the arbitration
proceedings are commenced.
5(5)
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The reference shall be to three arbitrators; one to be appointed by each of the
parties hereto, and the third to be appointed by the two so chosen; their
decision or that of any two of them shall be final. A party wishing to refer a
dispute to arbitration shall appoint its arbitrator and send notice of such
appointment in writing to the other party requiring the other party to appoint
its own arbitrator within 14 calendar days of that notice and stating that it
will appoint its arbitrator as sole arbitrator unless the other party appoints
its own arbitrator and gives notice that it has done so within the 14 days
specified. If the other party does not appoint its own arbitrator and give
notice that it has done so within the 14 days specified the party referring a
dispute to arbitration may, without the requirement of any further prior notice
to the other party, appoint its arbitrator as sole arbitrator and shall advise
the other party accordingly. The award of a sole arbitrator shall be binding on
both parties as if he had been appointed by agreement.
Nothing herein shall prevent the parties agreeing in writing to vary these
provisions to provide for the appointment of a sole arbitrator.
In case where neither the claim nor any counterclaim exceeds the sum of
USD50,000 (or such other sum as the parties may agree) the arbitration shall be
conducted in accordance with the LMAA Small Claim Procedure current at the time
when the arbitration proceedings are commenced.
CONCORD LTD. OCEANSPIRIT LTD.
/s/ Xxxxxxxx Xxxxxxx /s/ Xxxxx Xxxxxxx
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Xxxxxxxx Xxxxxxx Xxxxx Xxxxxxx
Director Director
ANNEX A
TO MEMORANDUM OF AGREEMENT BETWEEN OCEANSPIRIT LTD. AND
CONCORD LTD. FOR THE SALE AND PURCHASE OF M/T "STENA CONCORD"
An inspection of the ballast tanks from on board and inside the vessel was
undertaken on October 5, 2004 by Northern Marine Management (hereafter referred
to as NMM) together with a Surveyor from the Vessels Classification Society Det
Norske Veritas (hereafter referred as DNV).
As a result of the inspection, indentations in the outer bottom plating and
damage to internal framing were observed in the foreward-most double bottom
tanks BWT-1, BWT-2P, BWT-2S and BWT-3. The damage, which will require definite
eventual repair, is limited to two areas on the port side within #1 Water
Ballast double bottom and #2 Port Water Ballast double bottom. These two areas
have structural damage in the form of transverse framing, outer bottom
longitudinals and longitudinal girder distortion and creasing. The observed
damage is localized and there was no evidence of cracking. These two areas are
now subject to Conditions of Class, and are required to be corrected according
to Classification rules.
The Conditions of Class (CC) and Memorandum to Owners (MO), with the required
corrective actions, are listed in the Class Survey Status Report below.
TYPE NO ISSUED DATE ISSUED AT DUE DATE
CC 006 2004-10-05 HOU 2004-12-0
Before the due date, in-water survey to be carried out and video
results to be reviewed to the satisfaction of the attending surveyor.
CC 007 2004-10-05 HOU 2005-01-04
Before the due date, BWT2P-damages to internal framing and bottom shell plate at frame 155 and 9 long from
port turns of bilge to be dealt with.
CC 008 2004-10-05 HOU 2005-01-04
Before the due date, BWT1-damages to internal framing and bottom shell plate at frame 180 and 3 long from
port turns of bilge to be dealt with.
TYPE NO ISSUED DATE ISSUED AT
MO 009 2004-10-05 HOU
BWT 2S, numerous minor insets to bottom plating with a maximum height
of 50mm. General arrangement plan with insets mapped available at DNV
Houston.
MO 010 2004-10-05 HOU
BWT 2P, numerous minor insets to bottom plating with a maximum height
of 50mm. General arrangement plan with insets mapped available at DNV
Houston.
MO 011 2004-10-05 HOU
BWT 1, numerous minor insets to bottom plating with a maximum height of
50mm. General arrangement plan with insets mapped available at DNV
Houston.
MO 012 2004-10-05 HOU
BWT 3S, numerous minor insets to bottom plating with a maximum height
of 50mm. General arrangement plan with insets mapped available at DNV
Houston.
A-1
Further, DNV and NMM agreed that the following additional actions will be
undertaken by NMM:
1. Within sixty (60) days from the date of the inspection,
Northern Marine will arrange for an in-water survey to be
carried out by a DNV approved diving contractor, and a video
will be produced which will be provided to the DNV Houston
office for evaluation.
2. A further tank-by-tank examination will be undertaken to
verify and confirm the location of all indentations on the
appropriate vessel plans and drawings, with the updated plans
and drawings to be sent to DNV Houston for recording.
3. The known damaged areas covered by the two Conditions of Class
are to be inspected on a monthly basis by the ships staff to
ensure that no deterioration or development of cracks is
occurring. The report results of these inspections are to be
recorded in the ships log and reported to NMM, who will
further report these findings to DNV Houston for recording and
action review, if so required.
4. The two areas covered by the Conditions of Class are required
to be re-inspected by a DNV surveyor within three (3) months
from the date of the original inspection, or within January 5,
2005. If no further specific actions become a requirement by
DNV as a result of these additional inspections, it is
anticipated that an extension of the Conditions of Class may
be granted by DNV for an additional three month period from
that inspection.
A-2
