Exhibit 4.16
MEMORANDUM OF AGREEMENT
09/03/2006
Pylio Shipping Company Limited, Liberia hereinafter called the Sellers, have
agreed to sell, and KOMARF HOPE 29 Company, Liberia hereinafter called the
Buyers, have agreed to buy
Name: M/T Flawless
Classification Society/Class: Det Norske Veritas
Built: 1991
By: Hyundai Heavy Industries Co. Ltd., Ulsan, Korea
Flag: Liberia
Place of registration: Monrovia, Liberia
Call Sign: ELNX4
Grt/Nrt: 79718 / 46569
Official Number: 9475
hereinafter called the Vessel, on the following terms and conditions:
Definition
"Banking days" are days on which banks are open both in the country of the
currency stipulated for the Purchase Price in Clause 1 and in the place of
closing stipulated in Clause 8.
"In writing" or "written" means a letter handed over from the Sellers to the
Buyers or vice versa, a registered letter, telex, telefax or other modern form
of written communication.
"Classification Society" or "Class" means the Society referred to in line 4.
1. Purchase price (See also Clause 17)
USD 48,000,000.- cash (United States Dollars Forty Eight Million only).
2. Deposit
As security for the correct fulfilment of this Agreement the Buyers shall
pay a deposit of 2.5% (two and a half per cent) of the Purchase Price
within three (3) banking days from the date of this Agreement signed by
both parties by fax. This deposit shall be placed with The Royal Bank of
Scotland, Shipping Business Centre, 0-00 Xxxxx Xxxxx Xxxxxx, Xxxxxx XX0X
0XX, Sort Code: 16-01-01, Swift:XXXXXX0X, Account Key: PYSHCO-USD1,
lban:XX00 XXXX 0000 0000 0000 00 Beneficiary: Pylio Shipping Co Ltd,
Correspondent Bank: American Express Bank Limited, New York -- Swift
XXXXXX00XXX in the name of the Sellers
3. Payment (Subject to Clause 17)
The said Purchase Price shall be paid in full free of bank charges to The
Royal Bank of Scotland, Shipping Business Centre, 0-00 Xxxxx Xxxxx Xxxxxx,
Xxxxxx XX0X 0XX, Sort Code: 16-01-01,Swift:XXXXXX0X, Account Key:
PYSHCO-USD1, lban:XX00 XXXX 0000 0000 0000 00 Beneficiary: Pylio Shipping
Co Ltd, Correspondent Bank: American Express Bank Limited, New York --
Swift XXXXXX00XXX on delivery of Vessel, in accordance with Clause 5.
a)* The Buyers have inspected and accepted the Vessel's classification records.
The Buyers have also inspected the Vessel at Suez within February, 2006 and
have accepted the Vessel following this inspection and the sale is outright
and definite, subject only to the terms and conditions of this Agreement.
b)* Paragraph deleted.
* 4a) and 4b) are alternatives; delete whichever is not applicable. In the
absence of deletions, alternative 4a) to apply.
5. Notice, time and place of delivery
a) When the Vessel is at the place of delivery and in every respect physically
ready for delivery in accordance with this Agreement, the Sellers shall
give the Buyers a written Notice of Readiness for delivery on or before
March 15, 2006.
b) After the receipt of the notice of Readiness for Delivery, the Vessel shall
be delivered and taken over safely afloat at a safe and accessible berth or
anchorage at/in or at high sea on March 15, 2006 or, if later, on such
other date as agreed between the Sellers and the Buyers that reasonably
takes into account the time needed for the BBC (as defined in Clause 17)
and the related financing transactions to take into effect (the procedure
of which shall be as provided for in Clause 5 of the BBC).
c)
Expected time of delivery: Between 15th March 2006 and 30th March, 2006
Date of canceling (see Clause 5 c), 6 b) (iii) and 14): 30th April, 2006
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 option of either cancelling this Agreement in accordance with Clause
14 within 2 days of receipt of the notice or of accepting the new date as
the cancelling date. If the Buyers have not declared their option within 2
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
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. No Drydocking/Divers Inspection Clause to apply.
a)** Paragraph deleted.
b)** Paragraph deleted.
c) Paragraph deleted.
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 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 Sellers' account. The Sellers are not required to replace spare
parts including spare tail-end shaft(s) and spare propeller(s)/propeller
blade(s) which are taken out of spare and used as replacement prior to
delivery, but the replaced items shall be the property of the Buyers. The
radio installation and navigational equipment shall be included in the sale
without extra payment if they are the property of the Sellers. Unused
stores and provisions 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):
(See Clause 20)
8. Documentation. (See also Clause 19)
The place of closing: Athens, Greece
In exchange for payment of the Purchase Price the Sellers shall furnish the
Buyers with documents namely:
a) Legal Xxxx of Sale in a form recordable in (the country in which the Buyers
are to register the Vessel), warranting that the Vessel is free from
encumbrances, mortgages and maritime liens or any other debts or 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 hours prior to delivery.
d) Current Certificate issued by the competent authorities stating that the
Vessel is free from register encumbrances.
e) Recordation of Xxxx of Sale evidencing the sale of the Vessel to the Buyers
issued by the Liberia registry.
f) Any such additional documents as may reasonably be required by the
competent authorities for the purpose of registering the Vessel provided
the Buyers notify the Sellers of any such documents as soon as possible
after the date of this Agreement.
In addition to the documents above Buyers will furnish Sellers the following
documents:
a) Minutes of the Board of Directors resolving the Purchase of the Vessel
and acceptance of delivery of the vessel
b) Power of Attorney as per the minutes above
c) Certificate of Incorporation dated not earlier than thirty (30) days
from delivery.
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 Sellers'
expense, if they so request. The Sellers may keep the Vessel's log books but the
Buyers to have right to take copies of same.
9. Encumbrances
The Sellers warrant that the Vessel, at the time of delivery, is free from
all 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, where
as similar charges in connection with the closing of the Sellers' register
shall be for the Sellers' account.
11. Condition on delivery
The Vessel 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 relevant
authorities at the time of delivery. "Inspection" in this Clause 11 shall
mean the Buyer's inspection according to Clause 4 a) or 4 b), if
applicable, or the Buyer's 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 reports which are accepted by the
Classification Society without condition/recommendation are not to be taken
account.
12. Name/markings
13. Buyers default
This clause shall apply only in the event that the default in this clause
is attributable to the Buyers' gross negligence or wilful misconduct.
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
This clause shall apply only in the event that the default in this clause
is attributable to the Sellers' gross negligence or wilful misconduct.
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 the 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
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)* Paragraph deleted.
c)* Paragraph deleted.
17. Seller's Credit
Notwithstanding anything herein to the contrary (including, Clause 3),
Seller's credit (in the amount of 10% of the Purchase Price, "Sellers
Credit") shall be made in accordance with, and as more fully described in,
the bareboat charterparty entered into on the same date herewith by and
between the Sellers as charterers and the Buyers as owners ("BBC").
18. Bareboat Charterparty
Under the BBC, the Vessel shall be chartered to the Sellers for such period
and on such terms and conditions as more particularly described therein.
Delivery of the Vessel to the Buyers under this Agreement shall be subject
to the simultaneous delivery to and acceptance by the Sellers (as
Charterers) under the BBC.
19. Paragraph deleted.
20. Remaining Stores, etc.
Remaining stores, provisions, bunkers and lubricating oils onboard the
Vessel at the time of delivery hereunder shall remain the property of the
Sellers.
21. The Sellers shall comply with the Buyers' request which may be made for the
Buyer's compliance with the loan and guarantee facility agreement entered
into on, or to be entered into around, the even date herewith by and among,
inter alios, the Buyers as borrower, Fortis Bank (Nederland) N.V. as agent
and arranger and the lenders specified therein.
