MEMORANDUM OF AGREEMENT Dated: 24th March, 2005 Norwegian Shipbrokers’ Association’s Memo- random of Agreement for sale and purchase of ships. Adopted by The Baltic and International Maritime Council (BIMCO) in 1956. Code-name SALEFORM 1993 Revised...
Exhibit 10.7
| Norwegian Shipbrokers’ Association’s Memo- random of Agreement for sale and purchase of ships. Adopted by The Baltic and International Maritime Council (BIMCO) in 1956. |
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| Code-name | ||
| SALEFORM 1993 | ||
| Revised 1966, 1983 and 1986/87. |
DENAK DEPOCULUK VE NAKLIYECILIK A.S. of Istanbul, Turkey
hereinafter called the Sellers, have agreed to sell, and
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ LLC of the Marshal Islands
hereinafter called the Buyers, have agreed to buy
Name: My ‘DENAK-C’
Classification Society/Class: Lloyds Register
Built: 1997 By: Halla Samho, South Korea
Flag: Turkish Place of Registration: Istanbul, Turkey
Call Sign: TCCP9 Grt/Nrt: 38995/24436
Register Number: 876 /IMO number: 9122667
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 42,000,000 (United States Dollars Forty Two Million) Cash
2. Deposit
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 3 (three) banking days from the date of this Agreement and attached ▇▇▇▇▇▇▇▇ ▇▇.▇ being signed by both parties by fax. This deposit shall be placed with ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ (Tel: ▇▇-▇▇▇-▇▇▇▇▇▇▇ — Miss Elvira)
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 opening the joint account or for holding the said deposit and for closing shall be borne equally by the Sellers and the Buyers.
3. Payment
Ninety (90) percent of the purchase money together with the value of bunkers and unused lubricating oils in sealed/unbroached drums and designated storage tanks shall be remitted to the Sellers nominated bank in a designated account in the name of the Buyers mortgagee bank one (1) banking day prior to the expected date of delivery.
The said
Purchase price
ninety (90) percent of the purchase money shall be paid
together with the
ten (10) percent deposit in full free of bank charges
together with the value of bunkers and
unused lubricating oils in sealed/unbroached drums and designated storage tanks to the Setters’
nominated account with ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
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 in exchange for the delivery documentation as agreed in Addendum No.1 attached hereto,
4. Inspections
| a)* | The Buyers have inspected the vessels LR class records and accepted same and
have waived their right to physical inspection of the vessel, this sale is therefore
outright and definite |
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| * | ||||
| 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 20,15,10,7 , and 3 days notice of the estimated time of arrival
at the intended place of |
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| b) | The Vessel shall be delivered to the Buyers charter free, cargo free, free of stowaways and taken over safely afloat at a safe and accessible port, berth or anchorage at/in the following range; | |||
| (A) | Singapore/Japan range including Taiwan, Philippines, Indonesia Malaysia, Australia and PRC | |||
| (B) | India | |||
| (C) | Gibraltar/Skaw/full Mediterranean range including UK and Ireland excluding Libya, Morocco, Tunisia, Algeria, Lebanon, Syria, Albania, Georgia, Abhazia | |||
| (D) | Boston/Bahia ▇▇▇▇▇▇ range including full Gulf of Mexico and US Gulf | |||
| (E) | Pacific coastal/North and South America | |||
| (F) | South Africa | |||
| in the Sellers’ option. | ||||
| Expected time of delivery: between 1st August, 2005 and 31st August, 2005 in the Sellers option. | ||||
| Date of cancelling (see Clauses 5 c), 6 b) (iii) and 14): 24:00 hours local time, 31st August, 2005 in the 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 4 working
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 4 working |
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| 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 | |||
| b)** | (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 of the vessels’ bottom and underwater parts by a diver approved by the Lloyds Register Classification Society in visible water with video equipment in the presence of a Lloyds Register class surveyor and Buyers’ representative prior to the delivery of the Vessel. The Sellers shall at their cost make the Vessel available for such inspection at the place/time of delivery. The extent of the inspection and the conditions under which it is performed shall be to the satisfaction of the Classification Society and the attending class surveyor to be the sole judge as to what constitutes clear water/suitable conditions. If the conditions at the port of delivery are unsuitable for such inspection, the Sellers shall at their time and at their expense make the Vessel available at a suitable alternative place near to the delivery port. | |||
| (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 the 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. | ||||
| c) | 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 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 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 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). | ||||
| * | 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. | |||
| ** | 6 a) and 6 b) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 6 a) to apply. | |||
| 7. | Spares/bunkers, etc. | |||
The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board
and on shore and on order. All spare parts and spare equipment
including spare tail-end shaft(s)
and/or spare propeller(s)/propeller blade(s) spare anchor, 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 navigational equipment,
wireless equipment radio installation and navigational equipment including GMDSS shall be included
in the sale without extra payment if they are the property of the Sellers. Tools, spare equipment, materials,
maintenance records and other unused Unused 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 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 master’s slop chest are to be excluded from the sale, as well as the following additional items (including items on hire): MARICHEM gas bottles (The Sellers shall revert if any additional hired items)
The Buyers to pay extra only for remaining unused lubricating oils in designated storage tanks and
sealed/unbroached drums at the Sellers last nett prices supported by invoices/vouchers and bunkers
on board as per latest purchase (less discounts and barging cost) supported by the relevant
invoices. 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 Unused lubricating oils are defined as those lubricating oils which have not
passed through the system and that are stored in designated storage tanks or in sealed
drums/barrels. The Quantities of the unused lubricating oils remaining on board on delivery shall
be agreed with a join survey between the Buyers and the Sellers representatives not later than two
(2) days prior to the delivery with an agreed allowance for the consumption up to physical
delivery.
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/exchange of delivery documentation: The Sellers nominated place in Istanbul, Turkey.
In exchange for payment of
the Purchase Price the Sellers shall furnish the Buyers with the
agreed delivery documents as per Addendum No. 1
attached hereto., namely
registered encumbrances. |
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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 including all
plans/instruction books on board at time of delivery and all other plans/instruction books which
are ashore which may be in the Sellers’ possession
and same shall be promptly forwarded to the
Buyers office at their expense, within 3
(three) working days from the date of vessels delivery,
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 she shall be
delivered and taken over as she is. was at the
time of inspection, fair wear and tear excepted.
However, the Vessel shall be
delivered with her present class maintained without
and free of any
condition/recommendation* of class and; free of average damage affecting the Vessel’s class, and
with her classification certificates and national and
international trading certificates, to be
clean, unextended for a minimum period of 3 (three) months as well as all other certificates the
Vessel had at the time of inspection, valid and unextended without
condition/recommendation* by the
Class or the relevant authorities at the time of delivery.
Hull and machinery continuous survey
cycles shall be upto date at the time of delivery, ” 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 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. 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 validity 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 fax 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
expense upon arrival at on or about These representatives are on board for the purpose of
familiarisation and in the capacity of observers only, and they shall not interfere in any respect
with the normal operation and safety of the Vessel/crew. The Buyers’ representatives shall
sign the Sellers’ usual P&l letter of
indemnity prior to their embarkation. Upon Buyers’
representatives boarding of the vessel the Sellers will arrange for handover of all relevant
information on board in relation to the vessels’ stores, spares,
cabin departments.
| 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. Arbitrators to be members of the London Maritime Arbitrators Association. 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 |
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17. The Sellers to guarantee to their best of their knowledge that the vessel is not blacklisted and/or boycotted by any Arab boycott league.
18. This sale is to be kept strictly private and confidential between the Buyers, Sellers and brokers involved and is not to be reported.
For The Sellers
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For The Buyers | |
-s- H. Sender Akcal
|
-s- Molan’s |
This document is a computer generated copy of “SALEFORM 1993”. printed by authority of the Norwegian Shipbrokers’ Association, using software which is the copyright of Strategic Software Ltd. Any insertion or deletion to the form must be clearly visible. In the event of any modification made to the preprinted text of this document, the original document shall apply. The Norwegian Shipbrokers’ Association and Strategic Software Ltd. assume no responsibility for any loss or damage caused as a result of discrepancies between the original approved document and this document.
My ‘DENAK-C’
AMENDMENT NO. 1 TO MEMORANDUM OF AGREEMENT
This AMENDMENT NO. 1, dated as of June 27th, 2005 (this “Amendment”), to the MEMORANDUM OF AGREEMENT dated March 24, 2005 (the “MOA”) between DENAK DEPOCULUK VE NAKLIYECILIK A.S. (“Sellers”) and ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ LLC (“Buyers”), is entered into and effectuated by Buyers and Sellers (collectively, the “Parties”).
WHEREAS, the Parties hereto desire to amend the MOA to accurately reflect the agreement by the Parties.;
NOW THEREFORE, in consideration of the mutual agreements and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the Parties agree that the MOA is hereby amended as follows:
| 1. | Clause 17 of the MOA is hereby deleted in its entirety: | |||
| 2. | Clause 18 of the MOA is hereby amended in it entirety to read as follows: | |||
| “18. This sale is to be kept strictly private and confidential between the Buyers, Sellers and brokers involved and is not to be reported; provided, however, that in the event that the Buyer or any of its affiliates are required to make disclosure pursuant to applicable law, regulatory authority or the rules or requirements of a stock exchange or stock market, such party shall be entitled to make the appropriate disclosure.” | ||||
| 3. | Except as expressly modified hereby, all other terms and conditions of the MOA remain in full force and effect. | |||
| 4. | This Amendment may be executed in one or more counterparts, each of which shall be deemed an original and all of which, together, shall constitute one Amendment. | |||
IN WITNESS WHEREOF, this Amendment has been executed as of the date first written above.
| Sellers: | ||||
| DENAK DEPOCULUK VE NAKLIYECILIK A.S. | ||||
| By: | [ILLEGIBLE] | |||
| Braemar Seascope | ||||
| As Agents only | ||||
| Buyers: | ||||
| ▇▇▇▇▇ ▇▇▇▇ SHIIPCO LLC | ||||
| By: | [ILLEGIBLE] | |||