Exhibit 10.2

 

PALMOSA SUPPLEMENTAL AGREEMENT

 

This Palmosa Supplemental Agreement is entered into as of this 19th day of
September, 2008 by and among (i) Arcade Acquisition Corp. (“Arcade “), a
Delaware corporation, (ii) TDB SPV LLC (“TDB”), a Marshall Islands limited
liability company, (ii) each of the Palmosa Sellers (as defined in Schedule 1)
and (iv) Palmosa Shipping Corporation, a Marshall Islands corporation, the 100%
percent owner of each of the Palmosa Sellers ( “Palmosa”).

 

Capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in Schedule 1 hereto.

 

The purpose of this Palmosa Supplement Agreement is, inter alia, to provide for
the timing of the delivery of, and payment of the consideration for, the Palmosa
Vessels as provided for under the Palmosa MOAs which are being concurrently
executed and delivered herewith.

 

In consideration of the premises, the parties hereto agree as follows:

 

1.             Upon the failure of the Initial Transaction to be consummated by
11:59 p.m. New York time, January 30, 2009, or upon the earlier termination of
the LLC Purchase Agreement in accordance with its terms, (i) the Palmosa MOAs
and this Palmosa Supplemental Agreement shall be deemed terminated, cancelled
and of no further force and effect, in each case without any further action
required of the parties, and no party hereto shall have any liability to any
other party hereunder or thereunder, and (ii) Arcade will, upon written
instructions from TDB, and in consideration of U.S. $1.00 promptly dissolve
Conbulk or, at TDB’s option, transfer to TDB or its nominee all of its right,
title and interest in and to Conbulk Corporation (“Conbulk”), a Marshall Islands
corporation.

 

2.             Should the Business Combination be approved by the requisite vote
of the Arcade shareholders, the parties hereto shall proceed forthwith to take
all actions necessary to implement the Initial Transaction on the Effective Date
of Merger.  The parties hereto undertake to cause the Effective Date of the
Merger to occur no later than January 30, 2009.

 

3.             The initial Palmosa Vessel deliveries shall consist of at least
two Palmosa Vessels whose names as shown in Schedule 2 hereto begin with “KUO”
and these deliveries shall take place on the Effective Date of Merger and as
nearly simultaneously as possible, but in no event later than January 30, 2009. 
The remaining Palmosa Vessel deliveries shall take place promptly after the
Effective Date of Merger at the earliest opportunity, subject to the
considerations described in the remaining part of this Clause 3, but in no event
later than March 2, 2009.  The parties acknowledge and agree that the Palmosa
Vessels are operating under time charters as set out in Schedule 4 hereto, true
copies of which, as warranted by Palmosa, are attached hereto as Exhibit A, in
time-sensitive trades with strict schedules, and that close coordination and
good cooperation will be required to minimize any possible inconvenience to the
Palmosa Vessels.  Accordingly, subject to the first sentence of this Clause 3,
the parties shall meet and confer as necessary to determine the optimal schedule
for deliveries  taking into consideration, among other things, operational
needs, vessel re-registration requirements, the requirements of Conbulk’s ship
mortgage lenders and underwriters, and the requirements of the time charterers.

 

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4.             Subject to the sale and transfer by TDB of the Shipco SPVs to
Conbulk pursuant to the LLC Purchase Agreement, Conbulk shall arrange for the
payment of that portion of the Aggregate Purchase Price applicable to each
Palmosa Vessel concurrent with the delivery thereof under the relevant Palmosa
MOA, each such purchase price for a Palmosa Vessel to consist of two components:
(1) the Stock Consideration and (2) the Cash Consideration, as set forth in
Schedule 2 hereto.  The Stock Consideration and Cash Consideration shall be
payable per instructions of the relevant Palmosa Seller.

 

5.             Concurrent with delivery, each Palmosa Seller shall arrange for
the novation of its applicable Palmosa Vessel time charter to the relevant
Shipco SPV purchaser of such Palmosa Vessel pursuant to a novation agreement,
the terms of which to be reasonably satisfactory to the relevant Shipco SPV.

 

6.             If any Palmosa Seller or the seller of any Tsakos Vessel is
unable to deliver its Vessel pursuant to and in compliance with the terms of its
respective Palmosa MOA or Tsakos MOA, as appropriate (unless caused by an event
set out in Clause 5d) of the relevant MOA), then upon the written request of
Conbulk, Palmosa shall use its commercially reasonable best efforts to obtain,
not later than six months from the required delivery date of such Vessel as set
out in its MOA, a comparable replacement vessel having comparable charter
employment.  The replacement vessel, the terms and conditions of its proposed
acquisition, and its charter employment shall be acceptable to Conbulk, in its
sole discretion.  If any such Palmosa Seller cannot find a suitable replacement
vessel acceptable to Conbulk within such 6 month period, Conbulk shall have the
right to terminate the Palmosa MOA for such Vessel and claim compensation for
its losses arising out of the failure to deliver such Vessel in accordance with
the terms of such Palmosa MOA and expenses incurred with interest.  Any
provision hereof  to the contrary notwithstanding, the initial two Palmosa
Vessels to be delivered must be selected from among the four Palmosa Vessels
whose names as shown in Schedule 2 hereto begin with “KUO” and no substitutions
are permitted.

 

7.             Palmosa hereby guarantees the due and punctual performance by
each Palmosa Seller of its obligations under this Palmosa Supplemental Agreement
and under its relevant MOA.

 

8.             This Palmosa Supplemental Agreement shall be governed and
construed in accordance with Title 9 of the Unites States Code and the Law of
the State of New York.

 

9.             Should any dispute arise out of this Palmosa Supplemental
Agreement, the matter in dispute shall be referred to three persons in New York,
one to be appointed by each of Arcade (or, if such appointment occurs after the
Effective Date of Merger, Arcade’s successor in interest, Conbulk) and Palmosa,
and the third by the two chosen; their decision or that of any two of them shall
be final, and for purpose of enforcing any award, this Palmosa Supplemental
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.

 

10.           In the event of any conflict between the provisions of any Palmosa
MOA and this Palmosa Supplemental Agreement, the provisions of this Palmosa
Supplement Agreement shall prevail.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Agreement
to be executed and delivered as of this date first above indicated by these duly
authorized officers or representatives.

 

 

 

ARCADE ACQUISITION CORP.

 

 

 

 

 

 

By:

/s/ Jonathan Furer

 

 

Name: Jonathan Furer

 

 

Title: Chief Executive Officer

 

 

 

 

 

 

 

TDB SPV LLC

 

 

 

 

 

 

 

By:

/s/ Dimitris Dalakouras

 

 

Name: Dimitris Dalakouras

 

 

Title:

 

 

 

 

 

 

 

PALMOSA SHIPPING CORPORATION

 

 

 

 

 

 

 

By:

/s/ Dimitris Dalakouras

 

 

Name: Dimitris Dalakouras

 

 

Title:

 

 

 

 

 

/s/ George Bamiotis

 

 

Name: George Bamiotis

 

 

Title:

 

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SELLERS:

 

 

 

 

 

 

 

KLAUS MARITIME INC.

 

 

 

 

 

 

 

By:

/s/ Dimitris Dalakouras

 

 

Name: Dimitris Dalakouras

 

 

Title: President

 

 

 

 

 

 

 

NATURE SHIPHOLDING LTD.

 

 

 

 

 

 

 

By:

/s/ Dimitris Dalakouras

 

 

Name: Dimitris Dalakouras

 

 

Title:

 

 

 

 

BALANCE MANAGEMENT LTD.

 

 

 

 

 

 

 

By:

/s/ Dimitris Dalakouras

 

 

Name: Dimitris Dalakouras

 

 

Title:

 

 

 

 

 

 

 

EDWYN SHIPMANAGEMENT CO.

 

 

 

 

 

 

 

By:

/s/ Dimitris Dalakouras

 

 

Name: Dimitris Dalakouras

 

 

Title: President

 

 

 

 

 

 

 

OBJECTIVE FINANCE S.A.

 

 

 

 

 

 

 

By:

/s/ Dimitris Dalakouras

 

 

Name: Dimitris Dalakouras

 

 

Title:

 

 

 

 

 

 

 

CASTELLA SHIPPING INC.

 

 

 

 

 

 

 

By:

/s/ Dimitris Dalakouras

 

 

Name: Dimitris Dalakouras

 

 

Title:

 

4

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SCHEDULE 1

 

DEFINITIONS

 

As used in the Supplemental Agreement to which this Schedule 1 is attached, the
following terms have the meanings set forth below:

 

“Aggregate Purchase Price”

 

shall mean $151,042,520.

 

 

 

“Business Combination”

 

shall have the meaning set forth in the LLC Purchase Agreement

 

 

 

“Cash Consideration”

 

shall mean as to each Palmosa Vessel, the amount shown in Schedule 2 in the
column so headed.

 

 

 

“Common Stock”

 

shall mean the common stock, par value $0.0001 per share, of Conbulk.

 

 

 

“Effective Date of Merger”

 

shall mean the date on which the merger of Arcade into Conbulk becomes
effective.

 

 

 

“Initial Transaction”

 

shall have the meaning set forth in the LLC Purchase Agreement.

 

 

 

“LLC Purchase Agreement”

 

shall mean that certain Membership Interest Purchase and Sale Agreement, dated
as of September     , 2008, by and among Arcade, TDB and Palmosa.

 

 

 

“Merger”

 

shall have the meaning set forth in the LLC Purchase Agreement.

 

 

 

“MOAs”

 

shall mean the Palmosa MOAs and the Tsakos MOAs.

 

 

 

“Palmosa MOAs”

 

shall mean, collectively, the memoranda of agreement listed and described under
the heading “Palmosa Memoranda of Agreement” in Schedule 3.

 

 

 

“Palmosa Sellers”

 

shall mean, collectively, those entities affiliated with the Palmosa, identified
as sellers of the Palmosa Vessels in the Palmosa MOAs listed in Schedule 3.

 

 

 

“Palmosa Vessels”

 

shall mean, collectively, the six vessels to be delivered under the Palmosa
MOAs.

 

 

 

“Shipco SPVs”

 

shall mean, collectively, the six Marshall Islands limited liability companies
formed by TDB and to be sold and transferred for $1.00 each to Conbulk pursuant
to the terms of the LLC Purchase Agreement and which will become the respective
registered owners of the six Palmosa Vessels upon completion of the transactions
contemplated hereby.

 

 

 

“Stock Consideration”

 

shall mean, as to each Palmosa Vessel, the amount shown in Schedule 2 in the
column so headed.

 

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“Tsakos MOAs”

 

shall mean, collectively, the memoranda of agreement listed and described under
the heading “Tsakos Memoranda of Agreement” in Schedule 3.

 

 

 

“Tsakos Vessels”

 

shall mean, collectively, the four Vessels to be delivered under the Tsakos
MOAs.

 

 

 

“Vessels”

 

shall mean, collectively, the six Palmosa Vessels and the four Tsakos Vessels.

 

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SCHEDULE 2

 

AGGREGATE PURCHASE PRICE ALLOCATION

 

Vessel Name

 

Flag

 

Aggregate
Price Allocation

 

Cash
Consideration(1)

 

Stock
Consideration(1)

 

 

 

 

 

 

 

 

 

 

 

KUO FU

 

Panama

 

$

29,510,630

 

$

18,001,500

 

$

11,509,000

 

KUO HUNG

 

Panama

 

31,510,630

 

20,551,800

 

10,959,000

 

KUO LUNG

 

Panama

 

32,510,630

 

20,190,500

 

12,320,000

 

KUO TAI

 

Panama

 

29,510,630

 

18,062,700

 

11,448,000

 

MSC BALI

 

Marshall Islands

 

13,500,000

 

6,400,000

 

7,100,000

 

MSC ZANZIBAR

 

Panama

 

14,500,000

 

7,702,500

 

6,798,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total: $151,042,520

 

Total: $90,909,000

 

Total: $60,134,000

 

 

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(1) Estimated amounts, based upon scheduled debt amortization through
December 31, 2008.  It is the intent of all parties that the cash consideration
for each Palmosa Vessel will equal the actual amount of outstanding third-party
debt on such vessel at closing and that the difference between the aggregate
price allocation and the cash consideration for each such vessel will constitute
the stock consideration.  Accordingly, the cash consideration and the stock
consideration for each such vessel will be adjusted to reflect the true amount
of outstanding third-party debt at the time of closing.  The actual number of
shares that are issued for any vessel will equal the corresponding stock
consideration divided by $7.88.

 

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SCHEDULE 3

 

PALMOSA MEMORANDA OF AGREEMENT

 

Memorandum of Agreement relating to the KUO FU dated September   , 2008 between
TDB SPV LLC or its nominee as designated in the LLC Purchase Agreement, as
buyer, and Klaus Maritime Inc., as seller.

 

Memorandum of Agreement relating to the KUO TAI dated September   , 2008 between
TDB SPV LLC or its nominee as designated in the LLC Purchase Agreement, as
buyer, and Nature Shipholding Ltd., as seller.

 

Memorandum of Agreement relating to the KUO HUNG dated September   , 2008
between TDB SPV LLC or its nominee as designated in the LLC Purchase Agreement,
as buyer, and Balance Management Ltd., as seller.

 

Memorandum of Agreement relating to the KUO LUNG dated September   , 2008
between TDB SPV LLC or its nominee as designated in the LLC Purchase Agreement,
as buyer, and Edwyn Shipmanagement Co., as seller.

 

Memorandum of Agreement relating to the MSC BALI dated September   , 2008
between TDB SPV LLC or its nominee as designated in the LLC Purchase Agreement,
as buyer, and Objective Finance S.A., as seller.

 

Memorandum of Agreement relating to the MSC ZANZIBAR dated September   , 2008
between TDB SPV LLC or its nominee as designated in the LLC Purchase Agreement,
as buyer, and Castella Shipping Inc., as seller.

 

TSAKOS MEMORANDA OF AGREEMENT

 

Memorandum of Agreement relating to the  CCNI MEJILLONES dated September   ,
2008 between TDB SPV LLC or its nominee as designated in the LLC Purchase
Agreement, as buyer, and Tango Shipping S.A., as seller.

 

Memorandum of Agreement relating to the MSC SARDINIA dated September   , 2008
between TDB SPV LLC or its nominee as designated in the LLC Purchase Agreement,
as buyer, and Maribel Shipping Corp., as seller.

 

Memorandum of Agreement relating to MSC LONDON dated September   , 2008 between
TDB SPV LLC or its nominee as designated in the LLC Purchase Agreement, as
buyer, and Korinia Shipping Company Limited., as seller.

 

Memorandum of Agreement relating to MSC BRASILIA dated September   , 2008
between TDB SPV LLC or its nominee as designated in the LLC Purchase Agreement,
as buyer, and Hedgestone Shipping Company Ltd., as seller.

 

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SCHEDULE 4

 

Vessel

 

Charter

 

 

 

KUO FU

 

Cheng Lie Navigation Co. (S) Pte. Ltd. NYPE (81) 14-Feb 2008

 

 

 

KUO HUNG

 

Kuo Hsin Maritime, S.A. NYPE (81) 14-Feb 2008

 

 

 

KUO LUNG

 

Ching and Son Maritime S.A. NYPE (81) 14-Feb 2008

 

 

 

KUO TAI

 

CnC Line Limited NYPE (81) 14-Feb 2008

 

 

 

MSC BALI

 

Mediterranean Shipping Company S.A. NYPE (46) 08-May-2007

 

 

 

MSC ZANZIBAR

 

Mediterranean Shipping Company S.A. NYPE (46) 22-Mar-2007

 

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