MEMORANDUM OF AGREEMENT Dated:
Exhibit 10.7
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Dated: |
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of Liberia
hereinafter called the Sellers, have agreed to sell, and
A company to be nominated by BOX SHIPS INC. of Xxxxxxxx Islands
hereinafter called the Buyers, have agreed to buy
Name: M.V. “ ”
L.O.A
DWT
MAIN ENGINE:
TEU CAPACITY:
GEARLESS / CELLULAR
Classification Society/Class:
Built: By:
Flag: Liberia Place of Registration: Monrovia
Call Sign: GRT/NRT:
Register IMO Number:
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 |
USD cash ( ) plus an aggregate of ( ) shares of common stock in BOX SHIPS INC. Incorporated in the Xxxxxxxx Islands.
| 2. | Deposit – There shall be no deposit payable under this agreement. |
As security for the correct fulfilment of this Agreement the Buyers shall pay a deposit of 10% (ten per cent) of the Purchase Price within banking
days from the date of this Agreement This deposit shall be placed and held by them in a joint account for the Sellers and the Buyers, to be released in accordance with joint written instructions of the Sellers and the Buyers. Interest, if any, to be
credited to the Buyers. Any fee charged for holding the said deposit shall be borne equally by the Sellers and the Buyers.
| 3. | Payment |
The said
Purchase Price shall be paid in full free of bank charges to the Sellers’ nominated account and bank on delivery of the Vessel with the Sellers providing the Buyers with the agreed delivery documents as per line 176 of this
agreement, but not later than 3 5 (five) 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 |
| a)* | The Buyers have inspected and accepted the Vessel and the Vessel’s classification records. |
| b)* |
The Sellers shall provide for inspection of the Vessel at/in
The Buyers shall undertake the inspection without undue delay to the Vessel. Should the Buyers cause undue delay they shall
compensate the Sellers for the losses thereby incurred. The Buyers shall inspect the Vessel without opening up and without cost to the Sellers. During the inspection, the Vessel’s deck and engine log books shall be made available for
examination by the Buyers. If the Vessel is accepted after such inspection, the sale shall become outright and definite, subject only to the terms and conditions of this Agreement, provided the Sellers receive written notice of acceptance from the
Buyers within 72 hours after completion of such inspection.
Should notice of acceptance of the Vessel’s
classification records and of the Vessel not be received by the Sellers as aforesaid, the deposit together with interest earned shall be released immediately to the Buyers, whereafter this Agreement shall be null and void.
| * |
| 5. | Notices, time and place of delivery |
| a) | The Sellers shall keep the Buyers well informed of the Vessel’s itinerary and shall provide the Buyers with 15, 7, and 3 days
approximate notice and probable port and 2 and 1 days definite notice of delivery and port. |
| b) | The Vessel shall be delivered and taken over within the Vessel’s trading area, safely afloat at a safe and accessible berth or anchorage
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in the Sellers’ option.
Expected time of delivery: 01 April to 30 June 2011
Date of cancelling (see Clauses 5 c), 6 b) (iii) and 14): 30th June 2011 in Buyers’ option.
| c) | If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the Vessel will not be ready for delivery by the cancelling date they may notify the Buyers in writing stating the date when they anticipate that the Vessel will be ready for delivery and propose a new cancelling date. Upon receipt of such notification the Buyers shall have the option of either cancelling this Agreement in accordance with Clause 14 within 7 running days of receipt of the notice or of accepting the new date as the new cancelling date. If the Buyers have not declared their option within 7 running days of receipt of the Sellers’ notification or if the Buyers accept the new date, the date proposed in the Sellers’ notification shall be deemed to be the new cancelling date and shall be substituted for the cancelling date stipulated in line 61. |
If this Agreement is maintained with the new cancelling date all other terms and conditions hereof including those contained in Clauses 5 a) and 5 c) shall remain unaltered and in full force and effect. Cancellation or failure to cancel shall be entirely without prejudice to any claim for damages the Buyers may have under Clause 14 for the Vessel not being ready by the original cancelling date.
| d) | Should the Vessel become an actual, constructive or compromised total loss before delivery the deposit together with interest earned shall be released immediately to the Buyers whereafter this Agreement shall be null and void. |
| 6. | Drydocking/Divers Inspection – See clause 18 |
| a)** |
| b)** |
(ii) If the rudder, propeller, bottom or other underwater parts below the deepest load line are found
broken, damaged or defective so as to affect the Vessel’s class, then unless repairs can be carried out afloat to the satisfaction of the Classification society, the Sellers shall arrange for the Vessel to be drydocked at their expense for
inspection by the Classification Society of the Vessel’s underwater parts below the deepest load line, the extent of the inspection being in accordance with the Classification Society’s rules. If the rudder, propeller, bottom or other
underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class, such defects shall be made good by the Sellers at their expense to the satisfaction of the Classification Society without
condition/recommendation*. In such event the Sellers are to pay also for the cost of the underwater inspection and the Classification Society’s attendance.
(iii) If the Vessel is to be drydocked pursuant to Clause 6 b) (ii) and no suitable dry- docking facilities are available at the port of delivery, the Sellers shall take the Vessel to a port
where suitable drydocking facilities are available ,whether within or outside the delivery range as per Clause 5 b). Once drydocking has taken place the Sellers shall deliver the Vessel at a port within the delivery range as per Clause 5 b) which
shall, for the purpose of this Clause, become the new port of delivery. In such event the cancelling date provided for in Clause 5 b) shall be extended by the additional time required for the drydocking and extra steaming, but limited to a maximum
of 14 running days.
If the Vessel is drydocked pursuant to Clause 6 a) or 6 b) above
(i) the Classification Society may require survey of the tailshaft system, the extent of the survey being to the satisfaction of
the Classification surveyor. If such survey is not required by the Classification Society, the Buyers shall have the right to require the tailshaft to be drawn and surveyed by the Classification Society, the extent of the survey being in accordance
with the Classification Society’s rules for tailshaft survey and consistent with the current stage of the Vessel’s survey cycle. The Buyers shall declare whether they require the tailshaft to be drawn and surveyed not later than by the
completion of the inspection by the Classification Society. The drawing and refitting of the tailshaft shall be arranged by the Sellers. Should any parts of the tailshaft system be condemned or found defective so as to effect the Vessel’s
class, those parts shall be renewed or made good at the Sellers’ expense to the satisfaction of the Classification Society without condition/recommendation*.
c)
(ii) the expenses relating to the survey of the tailshaft system shall be borne by
the Buyers unless the Classification Society requires such survey to be carried out , in which case the Sellers shall pay these expenses. The Sellers shall also pay the expenses if the Buyers require the survey and parts of the system are condemned
or found defective or broken so as to affect the Vessel’s class*.
(iii) the expenses in connection with
putting the Vessel in and taking her out of drydock, including the drydock dues and the Classification Society’s fees shall be paid by the Sellers if the Classification Society issues any condition/recommendation* as a result of the survey or
if it requires survey of the tailshaft system. In all other cases the Buyers shall pay the aforesaid expenses, dues and fees.
(iv) the Buyers’ representative shall have the right to be present in the drydock, but without interfering with the work or decisions of the Classification surveyor.
(v) the Buyers shall have the right to have the underwater parts of the Vessel cleaned and painted at their risk and expense
without interfering with the Sellers’ or the Classifications surveyor’s work, if any, and without affecting the Vessel’s timely delivery. If, however, the Buyers’ work in drydock is still in progress when the Sellers have
completed the work which the Sellers are required to do, the additional docking time needed to complete the Buyers’ work shall be for the Buyers’ risk and expense. In the event that the Buyers’ work requires such additional time, the
Sellers may upon completion of the Sellers’ work tender Notice or Readiness for delivery whilst the Vessel is still in drydock and the Buyers shall be obliged to take delivery in accordance with Clause 3 , whether the Vessel is in drydock or
not and irrespective of Clause 5 b).
* 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.
** 6a) and 6 b)
are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 6 a) to apply.
| 7. | Spares/bunkers, etc. – see also clause 19 |
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 Broached and Unbroached stores and provisions 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 Seller’s 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): —
The Buyers shall take over the remaining bunkers and
unused lubricating oils in storage tanks and sealed drums and pay the current net market price (excluding barging expenses) at the port and date of delivery of the Vessel.
Payment under this Clause shall be made at the same time and place and in the same currency as the Purchase Price.
| 8. | Documentation. |
The place of closing : To be mutually agreed
A list of delivery documents to be drawn up and attached to this Agreement as an Addendum no. 1
In exchange for payment of the Purchase Price the Sellers shall furnish the
Buyers with delivery documents, namely:
At the time of delivery the Buyers and 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 Sellers 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 |
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:
The vessel will be delivered and taken over with everything belonging to her in the same condition as at the time of inspection fair wear and tear excepted and with all national, international and trading certificates as well as all other certificates the vessel had at the time of inspection to be clean and valid.
she
shall
be
delivered and taken over as she was at the time of inspection, fair wear and tear excepted.
However, the
Vessel shall be delivered 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 |
Upon redelivery under the Time Charter Party the Buyers undertake to change the name of the Vessel and alter funnel markings.
| 13. | Buyers’ default |
Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel this Agreement, and they shall be entitled to claim compensation for their losses and for all expenses incurred together with interest.
Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right to cancel the Agreement, in which case the deposit together with interest earned shall be released to the Sellers. If the deposit does not cover their loss, the Sellers shall be entitled to claim further compensation for their losses and for all expenses incurred together with interest.
| 14. | Sellers’ default |
Should the Sellers fail to give Notice of Readiness in accordance with Clause 5 a) or fail to be ready to validly complete a legal transfer by the date stipulated in line 61 the Buyers shall have the option of cancelling this Agreement provided always that the Sellers shall be granted a maximum of 3 banking days after Notice of Readiness has been given to make arrangements for the documentation set out in Clause 8. If after Notice of Readiness has been given but before the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not made physically ready again in every respect by the date stipulated in line 61 and new Notice of Readiness given, the Buyers shall retain their option to cancel. In the event that the Buyers elect to cancel this Agreement the deposit together with interest earned shall be released to them immediately.
Should the Sellers fail to give Notice of Readiness by the date stipulated in line 61 or fail to be ready to validly complete a 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. | Buyers’ representatives |
After this Agreement has been signed by both parties and the deposit has been lodged, the Buyers have the right to place two 3 (three) representatives on board the Vessel at
their sole risk and expense upon arrival at on or about
These representatives are on board for the purpose of familiarisation and in the capacity of observes only, and they shall not interfere in any respect with the operation of the Vessel. The Buyers’ representatives shall sign the Sellers’ letter of indemnity prior to their embarkation.
One Buyers Superintendent to be allowed to attend the physical delivery/taking over.
| 16. | Arbitration |
| a)* | This Agreement shall be governed by and construed in accordance with English law and any dispute arising out of this Agreement shall be referred to arbitration in London in accordance with the Arbitration Acts 1950 and 1979 or any statutory modification or re-enactment thereof for the time being in force, one arbitrator being appointed by each party. On the receipt by one party of the nomination in writing of the other party’s arbitrator, that party shall appoint their arbitrator within fourteen days, failing which the decision of the |
| single arbitrator appointed shall apply. If two arbitrators properly appointed shall not agree they shall appoint an umpire whose decision shall be final. |
| b)* |
The proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc. New York.
| c)* |
The laws of
shall govern this Agreement.
| * |
Additional clauses 17 to 20 are to be fully incorporated into this agreement.
Clause 17. Time Charter Employment
This sale includes a Time Charter of the Vessel as follows:
| • | Charterers: |
| • | C/P Date |
| • | Period: |
| • | Hire: |
| • | Commencement of the TimeCharter: |
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Clause 18. – Drydocking
The vessel will be delivered without drydocking. The Sellers shall issue a letter on the date of delivery confirming that to the best of their knowledge, the vessel has not touched bottom.
Clause 19. – Bunkers/Lubeoils
Buyers to pay extra only for unused lubricating oils in tanks, sealed and unbroached drums at Sellers last supply net prices, as evidenced by Sellers invoices. There shall be no payment for the Bunkers as they are the property of the Time Charterers.
Clause 20. Subjects
This agreement is subject to Buyers Board of Directors approval declarable no later than 30th April 2011.
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| The Buyers | The Sellers | |||
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Name: |
Name: | |||
| Date: | Date | |||
