MEMORANDUM OF AGREEMENT
Exhibit
10.11
Dated: 3 May 2006
Xxxxxxxxx Holding & Trading Ltd. of 00 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx hereinafter called the Sellers, have agreed to
sell, and Xxxxxxxx Maritime Limited (“QML”) of Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro,
Xxxxxxxx Islands MH96960 or a company to be nominated by QML
pursuant to clause 24 hereof
hereinafter called the Buyers, have agreed to buy
Name: BULK SEVEN
Classification Society/Class: Nippon Kaiji Kyokai
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Built: 2006
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By: |
Tsuneishi Shipbuilding Co., Ltd.
of 1083 Tsuneishi, Numakuma-cho, Numakuma-gun, Hiroshima Prefecture, Japan (the “Builder”) |
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Flag: Greek
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Place of Registration: Piraeus, Greece | |||
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Call Sign: SZKM
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Grt/Nrt: 43,198/27,291 |
Register Number: 11467
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 where a payment is
to be made under this Agreement.
“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.
“Charter” means the time charter dated
21 November 2005, made between the Charterer and
Metrostar, as agent for, inter alios, the Sellers, as the same
has been amended from time to time until the date of this
Agreement, pursuant to which time charter the Sellers have
agreed, inter alia, to let the Vessel and the Charterer has
agreed to take on charter the Vessel on a time charter basis
until 31 December 2010, a copy of which is attached hereto
as Appendix “A”.
“Charterer” means Xxxxx X.X. of Geneva, Switzerland
and includes its successors in title.
“First Possible Delivery Date” means 1 August
2006.
“Metrostar” means Metrostar Management Corp. of 00
Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx.
“Shipbuilding Contract” means the shipbuilding
contract made between the Builder, an unaffiliated third party
[and the Sellers] (the “Intermediate Seller”) in
relation to the construction of the Vessel (which during such
construction was known as Hull no. 1381) by the
Builder.)
“United States Dollars” and “US$” means the
lawful currency of the United States of America at any relevant
time.
1. Purchase
Price
US$43,900,000
| 2. | Deposit |
As security for the correct fulfillment of this Agreement the
Buyers shall pay a deposit of 10% (ten per cent) of the Purchase
Price within on the later of (i)the date
falling three banking days from the date ofthis
Agreement is signed by the parties hereto and
(ii) 15 May 2006. This deposit shall be placed with a
first class bank nominated by the Sellers and accepted by the
Buyers (provided always such bank is incorporated in the US,
England or Greece and the branch thereof where the deposit will
be held is in any of these countries) and held by them in an
interest bearing joint bank account for the Sellers and the
Buyers, to be released in accordance with joint written
instructions of the Sellers and the Buyers. Accrued interest- to
be credited to the Buyers. Any fee charged by the bank nominated
by the Sellers pursuant to line 20 above for holding the said
deposit shall be borne equally by the Sellers and the Buyers.
| 3. | Payment |
The remaining 90% of the said Purchase Price shall be paid in
full free of bank charges three (3)days prior to the estimated
delivery date in the name of the Buyers or their financiers to a
first class bank nominated by the Sellers and accepted by the
Buyers (provided always such bank is incorporated in the US,
England or Greece and the branch thereof where the deposit will
be held is in any of these countries). The Purchase Price will
be released by the Buyers or their financiers on delivery of the
Vessel and upon signing of the Protocol of Delivery and
Acceptance in relation thereto, but not later that 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 |
Should notice of acceptance of the Vessel’s classification
records and of the Vesselnot 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.
4a) and 4b) are alternatives: delete whichever is not
applicable. In the absence of deletions, alternative 4a) to
apply
| 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 30,
15, 3 and 1 days notice of the estimated time of arrival at
the intended place of drydocking/underwater
inspection/delivery. 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.
* Notes, if any, in the surveyor’s report which are
accepted by the Classification Society without
condition/recommendation are not to taken into account.
b) The Vessel shall be delivered and taken over safely
afloat at a safe and accessible port, berth or
anchorageat/in anywhere world-wide. in the
Sellers’ option, but always (1)within Institute Warranty
Trading Limited, (ii) outside of war zones,
(iii) outside the territorial waters of a country which has
been blacklisted by any other nation or organisation (national
or international) and (v) excluding USA ports due to
immigration requirements.
Expected time of delivery: 20 July 2006 and 31 August
2006
Date of canceling (see Clauses 5c) 6b) (iii) and
14): 31 August 2006 provided always that if the Charterer
has ordered the Vessel to undertake a voyage the duration of
which exceeds the said cancelling date, then the said cancelling
date shall be extended until the next day the Vessel can be
delivered to the Buyers and provided further however that the
cancelling date under this Agreement shall never be extended for
this reason by more than 10 running days.
c) If the Sellers anticipated that, notwithstanding the
exercise of due diligence by them, the Vessel will not be ready
for delivery by the extended cancelling date (i.e. plus the said
up to ten (10) running days) 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 of 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 5a) and 5c) 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 canceling 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 |
a)** The Sellers shall place the Vessel in drydock
at the port of delivery 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 defect shall be made good at the
Seller’s expense to the satisfaction of the Classification
Society without condition/recommendation
b)** See Clause 25(i) The Vessel is to be
delivered without drydocking. However, the Buyers shall have the
right at their expense to arrange for an underwater inspection
by a diver approved by the Classification Society prior to the
delivery of the Vessel. The Sellers shall at their cost make the
Vessel available for such inspection. The extent of the
inspection and the conditions under which it is performed shall
be to the satisfaction of the Classification Society. If the
conditions at the port of delivery are unsuitable for such
inspection, the Sellers shall make the Vessel available at a
suitable place near to the delivery port.
** 6 a) and 6 b)are alternatives; delete
whichever is not applicable. In the absence of deletions
alternative 6 a) to apply.
c) If the Vessel is drydocked pursuant to Clause 25
hereof
(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
that 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 affect 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*.
(ii) the expense 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 part so 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
Classification 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 of 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). If the Sellers’ works are completed
before the Buyers’ works, if any, and if the Buyers’
works will be completed before the expiration of the three
(3) days’ Notice of Readiness, the Sellers will shift
the Vessel out of drydock to a place of delivery before the
expiration of the said three (3) days period.
* Notes, if any, in the surveyor’s report which are
accepted by the Classification Society without
condition/recommendation are not to taken into account.
If the Buyers accept delivery of the Vessel in drydock, the
Sellers shall deliver to the Buyers at the time of closing
evidence that the Sellers have satisfied their financial
obligations to the drydock, shipyard or other similar facility
and subcontractors, and that such drydock, shipyard or other
similar facility and subcontractors waive any and all rights to
detain, arrest or attach the Vessel for any financial
obligations of the Sellers to such drydock, shipyard or other
similar facility and subcontractors, including but not limited
to tugboats engaged to assist the Vessel to depart from the
drydock or shipyard or other similar facility.
| 7. | Spares/bunkers, etc. |
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 onboard or not
shall become the Buyers’ propertybut
including for the avoidance of doubt and without limiting the
generality of the foregoing spares on order as well as any
computers, printers, software programs (excluding hired
programs), etc. required for the operation of the
Vessel.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
propellers(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 shall be
included in the sale and be taken over by the Buyers without
extra payment. The Sellers shall also deliver to the Buyers any
scale replica model they have of the Vessel, if in existence,
which was presented to them by the Builder. The spare parts and
equipment delivered to the Sellers under this Agreement shall be
at least as per Classification Society’s minimum
requirements.
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 us in the Sellers’
vessel(s) shall be excluded without compensation. Captain’s
Officers’ and Crew’s personal belongings including
slop chest are to be excluded from the sale as well as the
following additional items (including items on hire):
1) UNITOR Oxygen, Acetylene and Freon bottles (empty and
full), 2)DANAOS PMS program, 3)ARCS, 4)VIDEOTEL library, 5)SSAS
(Ship’s Security Alert System) software including poll
position, map view and daily position report (contracted).
The Buyers shall take over any unused lubricating oils in
storage tanks
and/or
sealed drums and to pay to the Sellers an amount equal to that
paid by the Sellers (as evidenced by appropriate invoices) for
such lubricant oils to the extent the same has not already been
taken into account in calculations under clause 21 hereof.
Off-hire time and bunkers, including any additional port
expenses incurred due to the change of ownership until the
Vessel’s delivery to the Buyers to be for the Sellers’
account; thereafter, same will be for the Buyers’ account.
Payment of lubricant oils, if any, 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; London, England or Piraeus, Greece in the
Buyer’s option
In exchange for payment of the Purchase Price the Sellers shall
furnish the Buyers with delivery documents, namely:
a) Three originals of a Legal Xxxx of Sale in a form
recordable
in (the
country in which the Buyers are to register the Vessel) and
which the Buyers should nominate at least 10 running days prior
to the delivery of the Vessel, warranting that the Vessel is
free from all encumbrances, mortgages and maritime liens or 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
two (2) Banking days hours 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) Any such additional documents as may reasonably be
required by the competent authorities for the purpose of
registering the Vessel as well as any such additional documents
that the Buyers shall require for the purpose of ascertaining
(i) the proper constitution of the Sellers or the Charterer
and (ii) that all appropriate corporate and other action
has been taken in connection with the authorization and the
performance by the Sellers of this Agreement, the novation of
the Charter (as provided in clause 19 hereof together with
any documents referred therein) and the assignment of the
warranty of quality (as provided in clause 18 hereof
together with any documents mentioned therein), provided the
Buyers notify the Sellers of any such documents as soon as
practically possible after the date of this Agreement and
provided further that in relation to the Charterer the Sellers
shall use their best endeavours to deliver to the Buyers similar
documentation to the one delivered to the Buyers in relation to
the Sellers.
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.,
relating to the Vessel and her equipment which
are whether or not the same are on board the Vessel.
Other certificates (such as the Vessel’s Safety Management
Certificate or Metrostar’s document of compliance or the
Vessel’s Continuous Synopsis Record and ISPS certificate)
which are whether or not the same 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 in
copies except for the Vessel’s Continuous Synopsis Record
which original will remain on board the Vessel following
delivery under this Agreement. Other technical documentation
which may be in the Sellers’ possession (including the
specifications of the Vessel as delivered to the Sellers by the
Builder and/or the Intermediate Seller, the Vessel’s
shipbuilding drawings, equipment manuals, sea trial records,
correspondence with the Builder or the Classification Society
concerning the Vessel or its equipment (including in relation to
claims made or issues arising in connection with the warranty of
quality applicable under the Shipbuilding Contract), shall be
promptly forwarded to the Buyers at their expense, if
they so request. The Vessel’s SMS, Non-Tank VRP,
Ship’s Security Plans and Ship’s Security Assessment
will be removed and no copies thereof shall be given to the
Buyers. The Sellers may keep the Vessel’s log books but the
Buyers to have the right, at their expense, to take copies of
same for a period not going earlier than three (3) months
form the date of delivery of the Vessel under this Agreement.
| 9. | Encumbrances |
The Sellers warrant that the Vessel at the time of delivery, is
free from all charters (save for the Charter in relation to
which the Sellers agree to exercise best endeavours in order
that the delivery is undertaken expeditiously, efficiently and
with minimum costs and delays to all parties involved)
encumbrances, mortgages and maritime liens or any other debts or
claims 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, she shall be delivered and taken overas she
was at the time of inspection, fair wear and tear
excepted free of cargo and, to the extent possible,
with her holds swept clean. However, the Vessel shall be
delivered with her class maintained without
condition/recommendation* free of average and 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 for at least six (6) months from the date the
Vessel is delivered to the Buyers under this Agreement without
condition/recommendation* by Class or the relevant authorities
and with all continuous surveys/cycles to be up to date and
valid, at the time of delivery.
“Inspection” in this Clause 11, shall mean the
Buyers’ inspection according to Clause 4 a) or
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.
| 12. | Name/markings |
Upon delivery 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. It 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 or
should the Sellers be in breach of any of clauses 8 or 18
to 21 (inclusive), 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
* Notes, if any, in the surveyors report which are accepted
by the Classification Society without condition/recommendation
are not to be taken into account
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 or should the Sellers be in breach of any of
clauses 8 or 18 to 21 (inclusive) as foresaid 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
representatives on board the Vessel at their sole risk and
expenses upon arrival at a place to be agreed between the Buyers
and the Sellers on or about provided however
that the Sellers and the Buyers shall make respective
arrangements so that the said representatives can board the
Vessel at least two weeks, but not earlier than 3 weeks,
before the Vessel is to be delivered to the Buyers under this
Agreement unless the last loading port prior to delivery of the
Vessel hereunder is at a place requiring more than
3 weeks’ steaming time to reach such place of delivery
in which case the Sellers shall make arrangements so that the
Buyers’ representatives are allowed to board the Vessel at
such port.
These representatives are on board for the purpose of
familiarization and in the capacity of observers only and they
shall not interfere in any respect with the operation of the
Vessel. The Buyers’ representative shall sign the
Sellers’ letter of indemnity prior to their embarkation.
| 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 19961950 and
1979 1996 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 are properly appointed they
shall in turn appoint a third arbitrator and the three
arbitrators will be deciding by majority and their majority
decision will be final. In the event the two arbitrators
appointed by the parties hereto fail to agree on the appointment
of the third arbitrator then the President of the Lloyds
Maritime Arbitration Association at the relevant time shall be
asked by either party hereto to appoint the third
arbitrator.shall not agree they shall appoint an umpire
whose decision shall be final.
b)* This Agreement shall be governed by and
construed in accordance with Title 9 of the United States
Code and the Law of the State of New York and should any dispute
arise out of this Agreement, the matter in dispute shall be
referred to three persons at New York, one to be appointed by
each of the parties hereto, and the third by the two so chosen;
their decision or that of any two of them shall be final, and
for purpose of enforcing any award, this Agreement may be made a
rule of the Court. The proceedings shall be conducted in
accordance with the rules of the Society of Maritime
Arbitrators, Inc. New York.
c)* Any dispute arising out of this Agreement shall
be referred to arbitrator
at subject
to the procedures applicable there The laws
of shall
govern this Agreement
Clauses 17 to 25, inclusive, as attached, and form an
integral part of this Agreement.
* 16 a), 16 b) and 16 c) are alternatives;
delete whichever is not applicable. In the absence of deletions.
alternative 16 a) to apply
ADDITIONAL
CLAUSES TO THE MEMORANDUM OF AGREEMENT DATED 3 MAY 2006
BETWEEN XXXXXXXX MARITIME LIMITED AND XXXXXXXXX
HOLDING & TRADING LTD.
Clause 17
The Buyers shall have the right to assign as security any of
their rights under this Agreement to a bank or another financial
institution providing the Buyers with finance in relation to the
acquisition of the Vessel.
Clause 18
On or prior to the delivery of the Vessel under this Agreement,
the Sellers undertake to assign to the Buyers all their rights,
interest and title (a) under the relevant article of the
Shipbuilding Contract dealing with the Vessel’s so called
warranty of quality, (b) in any claims made thereunder
outstanding at the time of such assignment and (c) under
any other suppliers’ or equipment manufacturers’
warranties that are available to the Sellers.
The assignment of the rights described above, shall be effected
by (a) the Sellers executing a deed in a form acceptable to
the Buyers (the “Deed of Assignment”) and (b) the
Builder or such other relevant supplier or manufacturer
countersigning a notice of assignment again in form acceptable
to the Buyers, such notice to be duly executed, provided however
that in the event that the Builder or any supplier or
manufacturer does not consent to the assignment of the relevant
warranty, the Sellers hereby further undertake to act as the
agent of the Buyers in raising, handling and closing any claims
that the Buyers may want to raise under the said warranty always
following the instruction of the Buyers. The Sellers shall not
refuse any request by the Buyers to raise a claim under the said
warranty of quality on the understanding that the Sellers shall
not be liable to meet a claim if there is a failure to recover
the same from the Builder or, as the case may be, the relevant
supplier or manufacturer, provided however, that the Sellers
shall, on the request of the Buyers, commence legal proceedings
against the Builder or, as the case may be, supplier or
manufacturer in connection with any disputed or non-recoverable
claim made under the relevant warranty.
The Sellers undertake with the Buyers that following the date of
this Agreement, they shall:
(a) at Sellers’ expense, provide the Buyers with a
true and complete certified copy of the Shipbuilding Contract
and all other relevant documents containing a warranty the
benefit of which lies with the Sellers, and if the Sellers are
not parties to the Shipbuilding Contract or such relevant
documents, also the original of the operative document pursuant
to which the Sellers have obtained the benefit of the relevant
warranties as well as list of any claims made thereunder;
(b) not in any manner vary, waive, surrender, assign to any
person other than the Buyers or suspend any of their rights
under the relevant warranties; and
(c) advise the Buyers of any event that falls within any of
the warranties to be assigned to the Buyers hereunder as well as
of any claim made under the warranty in connection with such
event or otherwise.
Finally, the Sellers agree to draft the Deed of Assignment and
to reflect the requirements of this Clause 18 and any other
matter reasonably required by the Buyers in relation thereto.
Clause 19
The Vessel is sold subject to the Charter which the Buyers have
reviewed and accepted. The Sellers hereby undertake with the
Buyers to (a) novate all their rights and obligations under
the Charter insofar as the Vessel is concerned in favour of the
Buyers on or prior the delivery of the Vessel to the Buyers and
(b) procure that Metrostar (as agent for the Sellers), the
Sellers and the Charterer agree to such a novation pursuant to a
novation agreement to be entered among the Sellers, the Buyers,
Metrostar (as agent for the Sellers) and the Charterer (the
“Novation Agreement”).
The Sellers further undertake with the Buyers that terms of the
Novation Agreement shall be acceptable to the Buyers and that
they shall provide therein, inter alia but without prejudice to
the generality of the foregoing, that any hire paid by the
Charterer to the Sellers under the Charter in advance
insofar as the Vessel is concerned in relation to a period of
trading falling after the Vessel is delivered to the Sellers
hereunder should be paid by the Sellers to the Buyers and that
the Sellers shall remain responsible for any cargo claims or
claims under the Charter insofar as the Vessel is concerned
arising prior to the delivery of the Vessel to the Buyers
hereunder.
The Sellers further hereby undertake that following the date of
this Agreement and until delivery of the Vessel to the Buyers
under this Agreement, they will:
(a) not, without the previous written consent of the Buyers:
(i) agree to any variation of the Charter; or
(ii) release the Charterer from any of its obligations
under the relevant Charter or waive any breach of the
Charterer’s obligations thereunder or consent to any such
act or omission of the Charterer as would otherwise constitute
such breach; or
(iii) determine the Charter for any reason whatsoever
(including withdrawal of the Vessel under the Charter for
non-payment of charter hire in accordance with the terms
thereof); and
(b) supply to the Buyers all information, accounts and
records that may be necessary or of assistance to enable the
Buyers to verify the amount of all payments of charterhire and
any other amount payable under the Charter.
The Sellers also undertake with the Buyers that:
(a) they shall not, without first obtaining the Buyers
prior written consent, reach any agreement, as contemplated by
the terms of the Charter, with the Charterer as regards the
daily charter hire rate to be applicable to the Vessel for a
particular calendar year; and
(b) any such agreement with the Charterer as regards the
daily charter hire rate to be applicable to the Vessel for a
particular calendar year, shall only be reached after the
Sellers have received written instructions by the Buyers at what
rate the Buyers wish the Sellers to conclude such an agreement
with the Charterer; and
(c) they shall (i) advise the Buyers as to the time
and place of any meeting or telephone or video conference to
take place with the Charterer as regards the daily charter hire
rate to be applicable to the Vessel for a particular calendar
year, (ii) provide the Charterer with any correspondence or
other information relevant to such meeting or conference and the
discussion to take place thereat and (ii) make arrangements
for a representative of the Buyers to attend any such meeting or
conference with the Charterer.
Finally, the Sellers hereby represent and warrant to the Buyers
that:
(a) the Charter is free from all encumbrances;
(b) the executed original of the Charter to be delivered by
the Sellers to the Buyers under this Agreement prior to the
Vessel being delivered to the Buyers hereunder is true and
complete, the Charter constitutes the valid and binding
obligations of the parties thereto enforceable in accordance
with its terms, is in full force and effect and there have been
no amendments or variations thereof or defaults thereunder from
the date of this Agreement;
(c) the Vessel has been delivered to and accepted by the
Charterer for service under the Charter; and
(d) there are no commissions, rebates, premiums or other
payments in connection with the Charter other than as disclosed
to the Buyers in writing prior to the date of this Agreement.
Clause 20
At the Buyers’ request, the Sellers shall provide the
Buyers with sufficient copies of their audited annual financial
statements (which for the avoidance of doubt shall include a
balance sheet, a profit and loss and a cash flow statement)
prepared in accordance with International Accounting Standards
and being for such period as requested by the Buyers.
Clause 21
If the Vessel is delivered to the Buyers after the First
Possible Delivery Date, then the Sellers will pay to the Buyers
for each running day the Vessel is delivered after the First
Possible Delivery Date a sum in United States Dollars which is
equal to the net of commissions daily charter hire received by
the Sellers under the Charter for such Vessel on each such day
minus the daily operating expenses paid by the Sellers in
connection with the Vessel again on each such day.
The Sellers agree that it will be for the Buyers to calculate
the sum due, if any, under this Clause 21, such calculation
to be made immediately prior to the Vessel’s delivery
hereunder by reference to the Seller’s latest financial
statements, loan agreements, bank confirmations and any other
documentation reasonably required by the Buyers which is
relevant to the Sellers’ operating expenses. The Sellers
hereby covenant and undertake to deliver to the Buyers in
advance of such calculation all relevant documentation which the
Buyers will need to make the determination.
For the avoidance of doubt, it is hereby clarified that the
Vessel’s daily operating expenses shall also include an
amount reflecting the Vessel’s daily financing costs under
the loan agreement to which the Sellers are a party, but in the
event of a vessel other than the Vessel being also financed
under such loan documentation, it is understood that the
financing costs to be deducted for the purposes of this
Clause 21 will be a pro rata fraction of the financing
costs of the borrowers under the said loan documentation, such
pro rata fraction to be determined by the Buyers and the Sellers
in good faith.
Any sum due to the Buyers under this Clause 21 shall be
payable by the Sellers to the Buyers on delivery of the Vessel
and will not be deemed a deduction of the Purchase Price,
although the Buyers shall have the right to set-off the same
against the Purchase Price if they decide to do so and in such
case the Sellers shall agree to deliver the Vessel against
receipt of the reduced Purchase Price.
Clause 22
Any and all notices and communications in connection with this
Agreement shall be in English and addressed as follows:
if to the Buyers at:
Xxxxxxxx Maritime Limited
c/x Xxxxxxxx Maritime LLC
Xxxxxxxx 00 & Xxxxxx Xxxxxx
000 00 Xxxxxxx
Xxxxxx
Xxxxxx
c/x Xxxxxxxx Maritime LLC
Xxxxxxxx 00 & Xxxxxx Xxxxxx
000 00 Xxxxxxx
Xxxxxx
Xxxxxx
|
Fax number:
|
000 00 00000 | |
|
Attn.:
|
Xx. Xxxxxxxx Molaris |
if to the Sellers to:
XXXXXXXXX HOLDING & TRADING LTD.
c/o Metrostar Managament Corp.
00 Xxxxxxxxxxxxx xxxxxx
000 00 Xxxxxx
Xxxxxx
c/o Metrostar Managament Corp.
00 Xxxxxxxxxxxxx xxxxxx
000 00 Xxxxxx
Xxxxxx
|
Fax number:
|
000 0000 000 | |
|
Attn:
|
Xx. Xxxxxxxxx Xxxxxxxx |
Clause 23
The existence of this Agreement as well as the terms hereof
should remain strictly private and confidential subject to any
disclosure requirements imposed on QML by the
U.S. Securities and Exchange Commission (“SEC”)
or the rules of NASDAQ and subject further to the following
paragraph of this Clause 23.
The restriction imposed by this Clause 23 shall not apply
in relation to a party to the extent (a) such party is
required by law to disclose this Agreement
and/or the
circumstances surrounding it or (b) the relevant
information has been disclosed to the public other than by a
person who would had been subject to the confidentiality
obligations imposed by this Clause 23 or (c) a party
is requested to disclose this Agreement
and/or the
terms thereof to its financiers, legal advisers, auditors etc.
Clause 24
The Sellers agree that QML is entitled to nominate one of its
subsidiaries as the buyer of the Vessel (such subsidiary being
called for the purposes of this Agreement, the
“Nominee”) under this Agreement. It is further agreed
between the Sellers and the Buyers that any such nomination is
to be made by QML in writing at least 10 running dates before
delivery of the Vessel and in connection therewith QML will also
provide to the Sellers a copy of its letter nominating the
Nominee as Buyers, which nomination shall be accepted by the
Nominee by countersigning such letter.
Finally, it is hereby agreed between the parties thereto, that
upon such nomination taking place the Nominee shall become the
“Buyers” for the purposes of this Agreement and shall
have all the rights and obligations QML had by signing this
Agreement. QML will remain responsible for all the obligations
the Buyers have under this Agreement, notwithstanding the
nomination of the Nominee, provided however that, to the extent
that the Nominee duly performs and discharges (or procures the
performance and discharge of) the duties and liabilities
undertaken by the Buyers in this Agreement, then such
performance and discharge of the said duties and liabilities by
the Nominee shall be deemed to be proper and due performance and
discharge of QML’s duties and liabilities under this
Agreement and the Sellers’ shall not be construed by virtue
of the terms of this Clause 24 that they have the right to
ask QML to perform again any duty or liability that has already
been performed by the Nominee.
Clause 25
The Sellers are not required to dry-dock the Vessel. Sellers
shall give the Buyers 3 (three) days’ notice of the
intended place where the Vessel will be available for underwater
inspection. The Buyers shall have the right at their expense to
arrange for an underwater inspection by a diver approved by the
Classification Society prior to the delivery of the Vessel. In
the event that the Buyers fail to declare their right of
underwater inspection as herein above mentioned or
non-attendance of their nominated divers within 24 (twenty four)
hours after the Vessel is ready in all respects for said
underwater inspection, the Buyers shall be deemed to have waived
such underwater inspection and the Sellers may tender Notice of
Readiness in accordance with the provisions of this Agreement.
The Sellers shall at their cost make the Vessel available for
such underwater inspection. The extent of the underwater
inspection shall be in accordance with the Classification
Society practices for sales purposes. If the conditions at the
port of delivery are unsuitable for such underwater inspection,
(i.e. unusual occurrence of bad weather, unusual low underwater
visibility, etc.), to be decided by Class, the Sellers in
cooperation with the Buyers shall make the Vessel available at a
suitable alternative place, near to the delivery port. 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 Classification Society, the Sellers
are to pay for the cost of the underwater inspection and the
Classification Society attendance, otherwise the Buyers are to
pay for the cost of the underwater inspection and the
Classification Society attendance.
If damage affecting the Vessel’s class is found but
Classification Society do not require same to be repaired until
the next scheduled dry-docking, the Buyers shall have to take
delivery of the Vessel without such damage being repaired. The
Sellers shall pay the Buyers the direct cost of repairs required
to repair said damage affecting the Vessel’s class to the
satisfaction of the Classification Society without
condition/recommendation excluding tank cleaning, desludging,
dry-docking and general services’ expenses. The Buyers and
the Sellers shall each approach a major shipyard in the area
promptly to determine the direct cost of repairs based upon the
repairs being carried out in that area excluding the costs of
tank cleaning, desludging, dry-docking, and general
services’ expenses as mentioned above. The direct cost of
the repairs payable by the Sellers to the Buyers under this
Clause 25 shall be the arithmetic average of the quotations
from the above 2 (two) major shipyards and the amount to be paid
shall be final and binding. The Sellers shall pay the Buyers the
said direct cost on the date of delivery of the Vessel under
this Agreement.
If damage affecting the Vessel’s class is found and the
Classification Society require same to be repaired immediately,
then the Sellers shall dry-dock the Vessel and repair such
damage to the satisfaction of the Classification Society without
condition/recommendation at their cost and time in accordance
with Clause 6 of this Agreement. During such dry-docking,
the Buyers have the right to have 2 (two) representatives attend
at the Buyers sole risk and expense and to paint the
Vessel’s bottom and to carry out other minor works, subject
to Sellers approval, which is not to be unreasonably withheld,
without interference to the Sellers’ repair works but
always excluding hot works, in dry-dock, against the Buyers
signing the Sellers’ usual letter of indemnity and provided
such attendance and painting does not interfere with the
Sellers’ work. If the Sellers’ work is completed
whilst the Buyers’ painting work is still in progress then
delivery shall be in dry-dock.
If the Vessel is repaired to the dry-dock in accordance with the
provisions thereof, notwithstanding Clause 5 hereof, the
Vessel shall be delivered at the port of the dockyard and the
canceling date as per Clause 5 hereof shall be
automatically extended to cover all the time for positioning to,
waiting for, any carrying out the dry-dock and the repairs
required by Classification Society but limited to a maximum of
30 (thirty) running days. The contents of Clause 5c) of
this Agreement will apply in that instance as well.
Clause 26
This Agreement is subject to QML raising the necessary funds for
acquiring the Vessel and 16 other vessels it has agreed to
purchase from affiliates of the Sellers, and declaring its
success in achieving so not later than 10 May 2006 midnight
New York City time.
Should QML not declare its success to the Sellers in accordance
with this Clause 26, the deposit together with the interest
earned shall be released immediately to the Buyers, whereafter
this Agreement shall be null and void.
IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be duly executed on the day and year first written
above.
/s/ XXXXXXXXX
XXXXXXXX
Signed for and on behalf of
XXXXXXXXX HOLDING & TRADING LTD.
/s/ XXXXX
XXXXXXXXXXXXX
Signed for and on behalf of
XXXXXXXX MARITIME LIMITED
by Xxxxx Xxxxxxxxxxxxx
its Chief Commercial Office and Chief Operating Officer
