exv10w7



 






 




    Exhibit
    10.7




 




    MEMORANDUM
    OF AGREEMENT



 



    Dated: 3 May 2006



 



    Excellence Shipping Corporation of 80 Broad Street Monrovia,
    Liberia hereinafter called the Sellers, have agreed to sell, and
    Quintana Maritime Limited (“QML”) of Trust Company
    Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall
    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 THREE



 



    Classification Society/Class: Nippon Kaiji Kyokai



 


	 	 	 	 	 
	

    Built: 2004
    


	
 
	
    By:
    
	
 
	
    Tsuneishi Shipbuilding Co., Ltd.
    of 1083 Tsuneishi,

    Numakuma-cho, Numakuma-gun,  Hiroshima

    Prefecture,

    Japan (the “Builder”)

    

	

    Flag: Marshall Islands
    


	
 
	
 
	
 
	
    Place of Registration: Majuro,
    Marshall Islands

    

	

    Call Sign V7GK7
    


	
 
	
 
	
 
	
    Grt/Nrt: 39,989/25,889
    

	

    Register Number:
    


	
 
	
 
	
 
	
    2117
    









 



    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 “NYPE 1946” type time
    charter dated 23 January 2004 made between the Charterer
    and the Sellers as the same has been amended from time to time
    until the date of this Agreement, pursuant to which the Sellers
    have agreed to let the Vessel and the Charterer has agreed to
    take on charter the Vessel on a time charter basis for a period
    of about 5 years from delivery, a copy of which is attached
    hereto as Appendix “A”.



 



    “Charterer” means Bunge S.A. of Geneva, Switzerland
    and includes its successors in title.



 



    “First Possible Delivery Date” means 1 September
    2006.



 



    “Metrostar” means Metrostar Management Corp. of
    80 Broad Street, Monrovia, Liberia.




 



    [For Bulk Two only — “Other Charterer” means
    Bunge Global Markets S.p.A of Rome, Italy.]




 



    “United States Dollars” and “US$” means the
    lawful currency of the United States of America at any relevant
    time.



 


		
	
    1.  
	
    Purchase
    Price




 



    US$41,000,000













 





		
	
    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 of
    this 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
    if any, 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




 



    a)* The Buyers have inspected and accepted the
    Vessel’s classifications records. The Buyers have
    inspected the Vessel at/in Richards Bay on
    27 April 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)* [The Buyers shall have the right to inspect the
    Vessel’s classification records and declare whether same
    are accepted or not within 2 running days after performing
    such an inspection. The Sellers shall provide for
    inspection of the Vessel at/in




 



    The Buyers shall undertake the said inspection without undue
    delay to the Vessel. Should the Buyers cause undue delay they
    shall compensate the Sellers for the losses thereby incurred.
    The Buyers shall inspect the Vessel without opening up and
    without cost to the Sellers. During the inspection, the
    Vessel’s deck and engine log books shall be made available
    for examination by the Buyers. If the Vessel is accepted after
    such inspection, the sale shall become outright and
    definite, subject only to the terms and conditions of this
    Agreement, provided the Sellers receive written notice of
    acceptance form the Buyers within 72 hours after completion
    of such inspection. Should notice of acceptance of the
    Vessel’s classification records not 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: between 1 September 2006 and
    31 October 2006




 



    Date of canceling (see Clauses 5c) 6b) (iii) and 14):
    31 October 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 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 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.



 



    (ii) if the rudder, propeller, bottom or other
    underwater parts below the deepest load line are found broken,
    damaged or defective so as 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 expenses for inspection by the
    Classification Society of the Vessel to be underwater parts
    below the deepest load line, the extent of the inspection being
    in accordance with the Classification Society’s rules. If
    


 

 


    ** 6 a) and 6 b) are alternatives; delete
    whichever is not applicable. In the absence of deletions
    alternative 6 a) to apply.













 







     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 expenses to the
    satisfaction of the Classification Society without
    condition/recommendation*.  In such event the Sellers are to pay
    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 drydocking
    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 this 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 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 remaining The
    Sellers confirm that any bunkers and unused lubricating
    oils whether in the system of the Vessel or in storage
    tanks and/or sealed drums which are on the
    Vessel at the time of the Buyers taking delivery of the Vessel
    pursuant to the terms thereof, shall be the property of the
    Charterer. Consequently no bunkers on the Vessel are included in
    this sale and, therefore, the Buyers when taking delivery of the
    Vessel shall not have to make any payment to the Sellers, the
    Charterer or any other person in relation thereto. Furthermore,
    the Sellers acknowledge and undertake that they shall remain
    responsible for any bunkers that the Charterer may have a claim
    for payment under the Charter and pay the current not
    market price (excluding barging expenses) at the port and date
    of delivery of the Vessel.



 



    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 Bill 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 endeavors 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 endeavors 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 over as 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., in each case for at least six (6) months
    from the date the Vessel is delivered to the Buyers under this
    Agreement 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


 

 


    * Notes, if any, in the surveyors report which are accepted
    by the Classification Society without condition/recommendation
    are not to be taken into account













 






    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 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
    19791996 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 QUINTANA MARITIME LIMITED AND EXCELLENCE SHIPPING
    CORPORATION



 




    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:



 



    Quintana Maritime Limited

    c/o Quintana Maritime LLC

    Pandoras 13 & Kyprou Street

    166 74 Glyfada

    Athens

    Greece



 



    Fax
    number:                        210
    89 48823

    Attn.:                             Mr. Stamatis
    Molaris



 



    if to the Sellers to:



 



    EXCELLENCE SHIPPING CORPORATION

    c/o Metrostar Management Corp.

    35 Panepistimiou street

    105 64 Athens

    Greece



 



    Fax
    number:                        210
    3212 687

    Attn:                             Mr.
    Achilleas Stergiou



 




    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/  ACHILLEAS
    STERGIOU








    Signed and on behalf of




    EXCELLENCE SHIPPING CORPORATION



 



    /s/  NIKOS
    FRANTZESKAKIS








    Signed for and on behalf of




    QUINTANA MARITIME LIMITED




    by Nikos Frantzeskakis




    its Chief Commercial Office and Chief Operating Officer