MEMORANDUM OF AGREEMENT

 

 

Dated: 31^st  October 2013

 

Norwegian Shipbrokers’ Association’s Memo-randum of Agreement for sale and purchase of ships. Adopted by the Baltic and International Maritime Council (BIMCO) in 1956.

Code-name

SALEFORM 1993

Revised 1966, 1983 and 1986/87.

Concord Shipholding S.A., 53rd E street, Urbanizacion Marbella, MMG Tower, 16th Floor, Panama, Republic of Panama, to be guaranteed by SK Shipping Co., Ltd

 

hereinafter called the Sellers, have agreed to sell, and

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Baltic Tiger Limited., Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960, to be guaranteed by Baltic Trading Limited

 

hereinafter called the Buyers, have agreed to buy

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Name: MV K Happiness

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Classification Society/Class: KR/ ABS

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Built: October  2011              By: Hyundai Heavy Industries Co.,Ltd. Ulsan, Korea

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Flag: Panama                           Place of Registration: Panama

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Call Sign: 3FKW7                   Grt/Nrt:  93,290/60,453

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Register Official  Number: 43362-12   IMO Number: 9593452

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hereinafter called the Vessel, on the following terms and conditions:

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Definitions

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“Banking days” are days on which banks are open both in all of the countriesy: the country of the currency

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stipulated for the Purchase Price in Clause 1 and in the place of closing, Greece, South Korea, Hong Kong and United States of America. stipulated in Clause 8.

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“In writing” or “written” means a letter handed over from the Sellers to the Buyers or vice versa,

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a registered letter, telex, telefax or other modern form of written communication.

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“Classification Society” or “Class” means the Society referred to in line 4.

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1.

Purchase Price : $50,500,000 (Fifty Million Five Hundred Thousand United States Dollars) in cash

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2.

Deposit

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As security for the correct fulfillment of this Agreement the Buyers shall pay a deposit of 20%

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(twenty  per cent) of the Purchase Price in an escrow account in the name of Buyer and Seller at Sellers’ nominated bank(“Joint Escrow Account”), Woori Bank, Hong Kong Branch(“Account Bank”), Suite 1401, Two Pacific Place, 88 Queensway, Hong Kong.  The said deposit is to be lodged within 3(three) banking days from the date of this MOA being signed by both parties by fax/email (“Required Deposit Date”), but conditional upon Sellers’ bank confirmation in writing to the parties that the escrow account has been opened and ready to receive the funds. The Buyer has the obligation to submit the requested documents to the Account Bank and needs to fully comply and assist with the account opening procedures which shall not be unreasonably withheld or delayed. If the escrow account is opened after the Required Deposit Date, the 20% deposit shall be made immediately on the date that the joint account is opened.

Any fees/bank charges to be shared equally by the Sellers and Buyers. Interest earned on the deposit to be for

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Buyer's account. Deposit to be released in accordance with joint written instructions of the Seller and Buyer. In case that the said deposit is refunded to the Buyer for whatsoever reason, any costs or expenses incurred by the Seller arising from the Buyers’ fault shall be deducted, subject to the terms and conditions of this agreement.

 

 

3.

Payment

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The said Balance of the  Purchase Price shall be paid in full free of bank charges to Woori Bank, Hong Kong Branch, and the deposit released to the Sellers,

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on delivery of the Vessel, but not later than 3 banking days after the Vessel is in every respect

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physically ready for delivery in accordance with the terms and conditions of this Agreement and

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Notice of Readiness has been given. in accordance with Clause 5.

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4.

Inspections

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a)*

The Buyers have waived their right to physical inspection. inspected and accepted The Vessel’s classification records have been inspected and accepted by the buyers.  The Buyers

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and have accepted the Vessel following this inspection and Therefore the sale is outright and definite,

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subject only to the terms and conditions of this Agreement.

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5.

Notices, time and place of delivery

 

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a)

The Sellers shall keep the Buyers well informed of the Vessel’s itinerary and shall

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provide the Buyers with 30(thirty), which shall not be applicable in case the Vessel is to be delivered without a further laden voyage after discharge in People's Republic of China, 15(fifteen), which shall not be applicable in case the Vessel is to be delivered without a further laden voyage after discharge in People's Republic of China,

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10(ten), 5(five), 3(three)  and 1(one) days notice of the estimated time of arrival at the

 

intended place of drydocking/underwater inspection/delivery. When the Vessel is at the place

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of delivery and in every respect physically ready for delivery in accordance with this

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Agreement, the Sellers shall give the Buyers a written Notice of Readiness for delivery.

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The Vessel’s place of delivery will not include any area, or port within the jurisdiction of any nation prohibited under the laws of the United States of America, or the United Nations. But both vessels to deliver at the conclusion of current laden voyage.

 

 

b)

The Vessel shall be delivered and taken over safely afloat, at a safe and accessible berth or

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anchorage at/in   Far East range

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in the Sellers’ option.

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Expected time of delivery: between 15^th November, 2013 and 31^st December, 2013

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Date of canceling (see Clauses 5 c), 6 b) (iii) and 14): 31^st December, 2013

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c)

If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the

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Vessel will not be ready for delivery by the cancelling date they may notify the Buyers in

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writing stating the date when they anticipate that the Vessel will be ready for delivery and

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propose a new cancelling date. Upon receipt of such notification the Buyers shall have the

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option of either canceling this Agreement in accordance with Clause 14 within 7 running

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days of receipt of the notice or of accepting the new date as the new cancelling date. If the

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Buyers have not declared their option within 7 running days of receipt of the Sellers’

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notification or if the Buyers accept the new date, the date proposed in the Sellers’ notification

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shall be deemed to be the new cancelling date and shall be substituted for the cancelling

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date stipulated in line 61.

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If this Agreement is maintained with the new canceling date all other terms and conditions

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hereof including those contained in Clauses 5 a) and 5 c) shall remain unaltered and in full

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force and effect. Cancellation or failure to cancel shall be entirely without prejudice to any

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claim for damages the Buyers may have under Clause 14 for the Vessel not being ready by

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the original cancelling date.

 

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d)

Should the Vessel become an actual, constructive or compromised total loss before delivery

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the deposit together with interest earned shall be released immediately to the Buyers

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whereafter this Agreement shall be null and void.

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6.

Drydocking/Divers Inspection

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b)**

(i)       The vessel is to be delivered without drydocking. However, the Buyers shall

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have the right declarable within 7(seven) days prior to expected delivery at their expense to arrange for an underwater inspection by a diver approved

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by the Classification Society prior to the delivery of the Vessel. The Sellers shall at their

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cost make the Vessel available for such inspection. The extent of the inspection and the

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conditions under which it is performed shall be to the satisfaction of the Classification

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Society. If the conditions at the port of delivery are unsuitable for such inspection, the

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Sellers shall make the Vessel available at a suitable alternative place near to the delivery

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port.

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(ii)       If the rudder, propeller, bottom or other underwater parts below the deepest load line

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are found broken, damaged or defective so as to affect the Vessel’s class, then unless

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shall arrange for the Vessel to be drydocked at their expense for inspection by the

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Classification Society of the Vessel’s underwater parts below the deepest load line, the

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extent of the inspection being in accordance with the Classification Society’s rules. If the

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rudder, propeller, bottom or other underwater parts below the deepest load line are found

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broken, damaged or defective so as to affect the Vessel’s class, such defects shall be made

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good by the Sellers at their expense to the satisfaction of the Classification Society

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without condition/recommendation*. In such event the Sellers are to pay also for the cost of

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the underwater inspection and the Classification Society’s attendance.

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If the repairs can be postponed until the next scheduled Class drydocking survey to the satisfaction of the Classification Society, then the Sellers shall pay to the Buyers the estimated cost to repair such damage in a way which is acceptable to Class. The amount shall be the direct cost to repair such damage only and to be based on a reasonable quotation from a ship repair yard in the delivery area. This quote shall be mutually agreed between the Buyers and the Sellers. If the Buyers and the Sellers cannot mutually agree within 1 working day after completion of the divers inspection, then the amount shall be based on the average of two quotations from repair facilities within the delivery area, one to be obtained by the Buyers and one to be obtained by the Sellers. The amount shall be deducted from the balance of the purchase money at the time of delivery. The Buyers shall then take delivery of the Vessel including the damage/s concerned, subject to the Vessel otherwise being delivered fully in accordance with this Agreement.

 

 

 

(iii)       If the Vessel is to be drydocked pursuant to Clause 6 b) (ii) and no suitable dry-

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docking facilities are available at the port of delivery, the Sellers shall take the Vessel

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to a port where suitable drydocking facilities are available, whether within or outside the

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delivery range as per Clause 5 b). Once drydocking has taken place the Sellers shall deliver

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the Vessel at a port within the delivery range as per Clause 5 b) which shall, for the

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purpose of this Clause, become the new port of delivery. In such event the cancelling date

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provided for in Clause 5 b) shall be extended by the additional time required for the

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drydocking and extra steaming, but limited to a maximum of 14 running days.

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c)

If the Vessel is drydocked pursuant to Clause 6 a) or 6 b) above

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(i)       the Classification Society may require survey of the tailshaft system, the extent of

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the survey being to the satisfaction of the Classification surveyor. If such survey is not

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required by the Classification Society, the Buyers shall have the right to require the tailshaft

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to be drawn and surveyed by the Classification Society, the extent of the survey being in

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accordance with the Classification Society’s rules for tailshaft survey and consistent with

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the current stage of the Vessel’s survey cycle. The Buyers shall declare whether they

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require the tailshaft to be drawn and surveyed not later than by the completion of the

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inspection by the Classification Society. The drawing and refitting of the tailshaft shall be

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arranged by the Sellers. Should any parts of the tailshaft system be condemned or found

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defective so as to affect the Vessel’s class, those parts shall be renewed or made good at

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the Sellers’ expense to the satisfaction of the Classification Society without

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condition/recommendation*.

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(ii)       the expenses relating to the survey of the tailshaft system shall be borne

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by the Buyers unless the Classification Society requires such survey to be carried out, in

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which case the Sellers shall pay the expenses. The Sellers shall also pay the expenses

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if the Buyers require the survey and parts of the system are condemned or found defective

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or broken so as to affect the Vessel’s class*.

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(iii)       the expenses in connection with putting  the Vessel in and taking her out of

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drydock, including the drydock dues and the Classification Society’s fees shall be paid by

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the Sellers if the Classification Society issues any condition/recommendation* as a result

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of the survey or if it requires survey of the tailshaft system. In all other cases the Buyers

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shall pay the aforesaid expenses, dues and fees.

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(iv)       the Buyers’ representative shall have the right to be present in the drydock, but

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without interfering with the work or decisions of the Classification surveyor.

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(v)       the Buyers shall have the right to have the underwater parts of the Vessel

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cleaned and painted and perform other works  at their risk and expense without interfering with the Sellers’ or the

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Classification surveyor’s work, if any, and without affecting the Vessel’s timely delivery. If,

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however, the Buyers’ work in drydock is still in progress when the Sellers have

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completed the work which the Sellers are required to do, the additional docking time

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needed to complete the Buyers’ work shall be for the Buyers’ risk and expense. In the event

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that the Buyers’ work requires such additional time, the Sellers may upon completion of the

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Sellers’ work tender Notice of Readiness for delivery whilst the Vessel is still in drydock

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and the Buyers shall be obliged to take delivery in accordance with Clause 3, whether

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the Vessel is in drydock or not and irrespective of Clause 5 b). However undocking expenses are to remain for Sellers.

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7.

Spares/bunkers, etc.

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The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on

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shore and on order, without extra payment. All spare parts and spare equipment including spare tail-end shaft(s) and/or spare

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propeller(s)/propeller blade(s), if any, belonging to the Vessel at the time of inspection used or

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unused, whether on board or not shall become the Buyers’ property, but spares on order are to be

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excluded. Forwarding charges, if any, shall be for the Buyers’ account. The Sellers are not required to

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replace spare parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which

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are taken out of spare and used as replacement prior to delivery, but the replaced items shall be the

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property of the Buyers. The radio installation and navigational equipment shall be included in the sale

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without extra payment if they are the property of the Sellers. Unused stores and provisions shall be

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included in the sale and be taken over by the Buyers without extra payment.

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The Sellers have the right to take ashore crockery, plates, cutlery, linen and other articles bearing the

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Sellers’ flag or name, provided they replace same with similar unmarked items. Library, forms, etc.,

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exclusively for use in the Sellers’ vessel(s), shall be excluded without compensation. Captain’s,

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Officers’ and Crew’s personal belongings including the slop chest are to be excluded from the sale, and company system such as HSEQ system, VIS, PMS and IT system

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as well as the following additional items (including items on hire) :

 

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Following to be excluded from the sale

- Original Certificate of Ship’s Registry / Original Radio Station License

- Original MSMC, SMC / ISSC, SSA / SSP

 

- DOC / ISO 9001, 18001

- Original of P&I / H&M / Bunker Convention Cert.

- Manning contract and all personal certificates of crew members /ITF Cert

- GMDSS / EPIRB Maintenance Contract

- Log Book / Oil Record Book / Garbage Record Book

- HSEQ Manual / HSEQ File and Record

- Computer Data & Software

- KR-Con USB

- Personnel effects

- Seller’s own commodities and supplies with logo

 

Hired item

- DVD, Video for training and CD player

- CBT(Computer Based Training) Computer & accessories

- Gas bottle (Oxy x 6, Ace x 3, Freon x 4)

 

 

The Buyers shall take over the remaining bunkers and unused lubricating oils in storage tanks and

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sealed drums and pay the Sellers’ last nett purchase current net market price (excluding barging expenses) as evidenced by copies of invoices. at the port and date

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Payment under this Clause shall be made at the same time and place and in the same currency as

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the Purchase Price.

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The Seller warrants that the Vessel will be delivered with adequate bunkers and lubricants to reach the next available bunkering port where bunkers and lubricants are available.

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The place of closing is to be advised by the Sellers with the cost to be equally between the Buyers and the Sellers.

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At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol of

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Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the

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Buyers.

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At the time of delivery the Sellers shall hand to the Buyers the classification certificate(s) as well as all

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plans etc., which are on board the Vessel. Other certificates which are on board the Vessel shall also

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be handed over to the Buyers unless the Sellers are required to retain same, in which case the

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Buyers to have the right to take copies. Other technical documentation which may

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be in the Sellers’ possession shall be promptly forwarded to the Buyers at their expense, if they so

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request. The Sellers may keep the Vessel’s log books but the Buyers to have the right to take

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copies of same.

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9.

Encumbrances

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The Sellers warrant that the Vessel, at the time of delivery, is free from all charters, encumbrances,

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mortgages and maritime liens or any other debts whatsoever. The Sellers hereby undertake

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to indemnify the Buyers against all consequences of claims made against the Vessel which have

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been incurred prior to the time of delivery.

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10.

Taxes, etc.

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Any taxes, fees and expenses in connection with the purchase and registration under the Buyers’ flag

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shall be for the Buyers’ account, whereas similar charges in connection with the closing of the Sellers’

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register shall be for the Sellers’ account.

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11.

Condition on delivery

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However, The Vessel shall be delivered and taken over with her class maintained without condition/recommendation*,

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free of average damage affecting the Vessel’s class, and with her classification certificates and

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National/international certificates, as well as all other certificates the Vessel had at the time of inspection, valid and

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unextended for a minimum period of 3(three) months without condition/recommendation* by Class or the relevant authorities at the time of delivery.

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applicable, or the Buyers’ inspection prior to the signing of this Agreement. If the Vessel is taken over

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without inspection, the date of this Agreement shall be the relevant date.

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*

Notes, if any, in the surveyor’s report which are accepted by the Classification Society

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without condition/recommendation are not to be taken into account.

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12.

Name/markings

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Upon delivery the Buyers undertake to change the name of the Vessel and alter funnel markings.

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13.

Buyers’ default

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Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel this

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Agreement, and they shall be entitled to claim compensation for their losses and for all expenses

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incurred together with interest.

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Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right to

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cancel the Agreement, in which case the deposit together with interest earned shall be released to the

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Sellers. If the deposit does not cover their loss, the Sellers shall be entitled to claim further

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compensation for their losses and for all expenses incurred together with interest.

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14.

Sellers’ default

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Should the Sellers fail to give Notice of Readiness in accordance with Clause 5 a) or fail to be ready

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to validly complete a legal transfer by the date stipulated in line 61 the Buyers shall have

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the option of cancelling this Agreement provided always that the Sellers shall be granted a

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maximum of 3 banking days after Notice of Readiness has been given to make arrangements

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for the documentation set out in Clause 8. If after Notice of Readiness has been given but before

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the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not

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made physically ready again in every respect by the date stipulated in line 61 and new Notice of

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Readiness given, the Buyers shall retain their option to cancel. In the event that the Buyers elect

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to cancel this Agreement the deposit together with interest earned shall be released to them

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immediately.

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Should the Sellers fail to give Notice of Readiness by the date stipulated in line 61 or fail to be ready

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to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for

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their loss and for all expenses together with interest if their failure is due to proven

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negligence and whether or not the Buyers cancel this Agreement.

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15.

Buyers’ representatives

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After this Agreement has been signed by both parties and the deposit has been lodged, the Buyers

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have the right to place two representatives on board the Vessel at their sole risk and expense. upon

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These representatives are on board for the purpose of familiarization and in the capacity of

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observers only, and they shall not interfere in any respect with the operation of the Vessel. The

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Buyers’ representatives shall sign the Sellers’ letter of indemnify prior to their embarkation.

These representatives shall pay USD 20 per day per man for victualling and accommodation as well as actual cost for the use of communication appliances onboard. All the relevant fees/charges to be paid to the Sellers upon delivery.

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16.

Arbitration

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a)*

This Agreement shall be governed by and construed in accordance with English law and

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any dispute arising out of this Agreement shall be referred to arbitration in London in

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accordance with the Arbitration Acts 1950 and 1979 1996 or any statutory modification or

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re-enactment thereof for the time being in force, one arbitrator being appointed by each

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party. On the receipt by one party of the nomination in writing of the other party’s arbitrator,

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that party shall appoint their arbitrator within fourteen days, failing which the decision of the

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single arbitrator appointed shall apply. If two arbitrators properly appointed shall not agree

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they shall appoint an umpire whose decision shall be final.

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