Exhibit 10.1.6


 


	
  MEMORANDUM OF AGREEMENT

  	
  Norwegian Shipbrokers’ Association’s Memo-

  
	
   

  	
  randum of Agreement for sale and purchase of

  
	
  Dated: 8th October 2004

  	
  Ships. Adopted by the Baltic and International 

  
	
   

  	
  Maritime Council (BIMCO) in 1956.

  
	
   

  	
  Code-name

  
	
   

  	
  SALEFORM
  1993

  
	
   

  	
  Revised 1966, 1983 and 1986/87.

  



 


Ozzie Minerals Company Limited of Marshall Islands


hereinafter called the
Sellers, have agreed to sell, and


 


Dryships Inc. of Marshall Islands or guaranteed nominee


hereinafter called the
Buyers, have agreed to buy


 


Name:  Motor Vessel “MAGIC WAND”


 


Classification
Society/Class:                              Det Norske Veritas (DNV)


 


	
  Built:  1988

  	
  By:  Sasebo Shipyard

  
	
   

  	
   

  
	
  Flag:  Marshall
  Islands

  	
  Place of Registration:  Majuro, Marshall Islands

  
	
   

  	
   

  
	
  Call sign:  V7F42

  	
  Grt/Nrt:  36,120/23,032

  
	
   

  	
   

  
	
  Register Lloyds
  Number:  8821149

  	
   

  



 


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


 


Definitions


 


“Banking
days” are days on which banks are open both in the country of the currency
stipulated for the Purchase Price in Clause 1 and in the place of closing
stipulated in Clause 8.


 


“In writing” or “written” means a letter handed over from the Sellers
to the Buyers or vice versa, a registered letter, telex, telefax or other
modern form of written communication.


 


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


 


1.             Purchase
Price $22,000,000- (United States Dollars twenty two million) cash payment


 


2.             Deposit
see Clause 24


 


3.             Payment
see Clause 24


 


The said Purchase Price shall be paid in full
free of bank charges to Sellers’ Bank (details to
be advised)


 


on delivery of the Vessel, but not later than 3 banking days after the
Vessel is in every respect physically ready for delivery in accordance with the
terms and conditions of this Agreement and Notice of Readiness has been given
in accordance with Clause 5.


 


4.             Inspections
- See Clause 17


 


Copyright: Norwegian Shipbrokers’ Association, Oslo, Norway.


 





















 


 


5.             Notices,
time and place of delivery - See Clause 18


 


Expected time of delivery: laycan
December 15th 2004 - February 28th 2005. 
Buyers to narrow down laycan to forty-five (45) days by December 1st,
2004.


 


Date of cancelling February
28th, 2005


 


c)             If the Sellers
anticipate that, notwithstanding the exercise of due diligence by them, the
Vessel will not be ready for delivery by the cancelling date they may notify
the Buyers in writing stating the date when they anticipate that the Vessel
will be ready for delivery and propose a new cancelling date. Upon receipt of
such notification the Buyers shall have the option of either cancelling this
Agreement in accordance with Clause 14 within 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 or if the Buyers accept the new date, the date proposed in the
Sellers’ notification shall be deemed to be the new cancelling date and shall
be substituted for the cancelling date stipulated in line 61.


 


If
this Agreement is maintained with the new cancelling date all other terms and
conditions hereof including those contained in Clauses 18
5 a) and 5 c) shall remain unaltered and in full force and effect. Cancellation
or failure to cancel shall be entirely without prejudice to any claim for
damages the Buyers may have under Clause 14 for the Vessel not being ready by
the original cancelling date.


 


d)            Should the Vessel
become an actual, constructive or compromised total loss before delivery this
Agreement shall be null and void.


 


6.             Divers
Inspection


 


 


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


 





















 


have the right at their expense to arrange for an underwater inspection
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 alternative place near to
the delivery port.


 


(ii)           If the rudder, propeller, bottom or other underwater parts
below the deepest load line are found broken, damaged or defective so as to
affect the Vessel’s class, then unless repairs can be carried out afloat to the
satisfaction of the Classification Society, the Sellers shall arrange for the
Vessel to be drydocked at their expense for inspection by the Classification
Society of the Vessel’s underwater parts below the deepest load line, the
extent of the inspection being in accordance with the Classification Society’s
rules. If the rudder, propeller, bottom or other underwater parts below the
deepest load line are found broken, damaged or defective so as to affect the
Vessel’s class, such defects shall be made good by the Sellers at their expense
to the satisfaction of the Classification Society without
condition/recommendation*. In such event the Sellers are to pay also for the
cost of the underwater inspection and the Classification Society’s attendance.


 


In the event that damage is found by the appointed divers
that in the opinion of Class would be considered a recommendation, and such
damage does not require immediate repairs and maybe deferred until the vessel’s
next drydocking, then in such event a cash settlement in lieu of the required
repairs will be agreed between the parties and the agreed amount will be
deducted from the purchase price. If the parties cannot agree on the amount to
be deducted in lieu of the repairs then each party will obtain one quotation
for the required works from shipyards near by the delivery area/port and the
agreed amount will be the average of the 2 quotations which will then be
deducted from the purchase price.


 


(iii)          If the Vessel is to be drydocked pursuant to Clause 6 b)
(ii) and no suitable dry-docking facilities are available at the port of
delivery, the Sellers shall take the Vessel to a port where suitable drydocking
facilities are available, whether within or outside the delivery range as per
Clause 5 b). Once drydocking has taken place the Sellers shall deliver the
Vessel at a port within the delivery range as per Clause 5 b) which shall, for
the purpose of 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 6 a) or 6 b) above


 


(i)            the Classification
Society may require survey of the tailshaft system, the extent of the survey
being to the satisfaction of the Classification surveyor. If such survey is not
required by the Classification Society, the Buyers shall have the right to
require the tailshaft to be drawn and surveyed by the Classification Society,
the extent of the survey being in accordance with the Classification Society’s
rules for tailshaft survey and consistent with the current stage of the Vessel’s
survey cycle. The Buyers shall declare whether they require the tailshaft to be
drawn and surveyed not later than by the completion of the inspection by the
Classification Society. The drawing and refitting of the tailshaft shall be
arranged by the Sellers. Should any parts of the tailshaft system be condemned
or found defective so as to affect the Vessel’s class, those parts shall be
renewed or made good at the Sellers’ expense to the satisfaction of the
Classification Society without condition/recommendation*.


 


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


by the Buyers unless the Classification
Society requires such survey to be carried out, in which case the Sellers shall
pay these expenses. The Sellers shall also pay the expenses if the Buyers
require the survey and parts of the system are condemned or found defective or
broken so as to affect the Vessel’s class*.


 


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


drydock, including the drydock dues and the
Classification Society’s fees shall be paid by the Sellers if the
Classification Society issues any condition/recommendation* as a result of the
survey or if it requires survey of the tailshaft system. In all other cases the
Buyers shall pay the aforesaid expenses, dues and fees.


 


(iv)          the Buyers’
representative shall have the right to be present in the drydock, but without
interfering with the work or decisions of the Classification surveyor.


 





















 


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


cleaned and painted at their risk and expense
without interfering with the Sellers’ or the Classification surveyor’s work, if
any, and without affecting the Vessel’s timely delivery. If, however, the
Buyers’ work in drydock is still in progress when the Sellers have


completed the work which the Sellers are
required to do, the additional docking time needed to complete the Buyers’ work
shall be for the Buyers’ risk and expense. In the event that the Buyers’ work
requires such additional time, the Sellers may upon completion of the Sellers’
work tender Notice of Readiness for delivery whilst the Vessel is still in
drydock and the Buyers shall be obliged to take delivery in accordance with
Clause 3, whether the Vessel is in drydock or not and irrespective of Clause 5
b).


 










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


 


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


 


7.             Spares/bunkers,
etc.


 


The
Sellers shall deliver the Vessel to the Buyers with everything belonging to her
on board on shore and on order. All spare parts and spare equipment including
spare tail-end shaft(s) and/or spare propeller(s)/propeller blade(s), if any,
belonging to the Vessel at the time of inspection used or unused, whether on
board or not shall become the Buyers’ property. Forwarding charges, if any,
shall be for the Buyers’ account. The Sellers are not required to replace spare
parts including spare tail-end shaft(s) and spare propeller(s)/propeller
blade(s) which are taken out of spare and used as replacement prior to delivery,
but the replaced items shall be the property of the Buyers. The radio
installation and navigational equipment GMDSS, computers, printers
shall be included in the sale without extra payment if they are
the property of the Sellers. Unused stores and provisions shall be included in
the sale and be taken over by the Buyers without extra payment.


 


The
Sellers have the right to take ashore crockery, plates, cutlery, linen and
other articles bearing the Sellers’ flag or name, provided they replace same
with similar unmarked items. Library, forms, etc., exclusively for use in the
Sellers’ vessel(s), shall be excluded without compensation. Captain’s, Officers’
and Crew’s personal belongings including the slop chest are to be excluded from
the sale, as well as the following additional items (including items on hire) (vessel’s delivery of any hired
equipment on board will be itemised in an addendum to this Agreement.):
Videotel Equipment, Owners Manuals/Instruction Books, Log Books, Company
Software, Buyers to be allowed to make copies of Owners manuals/Instruction
books/Log books, etc at Buyers expense.


 


The
Buyers shall take over and pay for
the remaining bunkers and unused / unbroached
lubricating oils in storage tanks and


sealed
drums and pay the Sellers
costs at prices prevailing at delivery port as quoted by one of the oil majors


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


 


8.             Documentation


 


The place of closing:  Piraeus


 


In exchange for payment of the Purchase Price
the Sellers shall furnish the Buyers with delivery documents, namely: (See Clause 20.)


 


 





















 


 


At the time of delivery the Buyers and Sellers shall sign and deliver
to each other a Protocol of Delivery and Acceptance confirming the date and
time of delivery of the Vessel from the Sellers to the Buyers.


 


At the time of delivery the Sellers shall hand to the Buyers the
classification certificate(s) as well as all plans etc., which are on board the
Vessel. Other certificates which are on board the Vessel shall also be handed
over to the Buyers unless the Sellers are required to retain same, in which
case the Buyers to have the right to take copies. Other technical documentation
which may


be in the Sellers’ possession shall be promptly forwarded to the Buyers
at their expense, if they so request. The Sellers may keep the Vessel’s log
books but the Buyers to have the right to take copies of same.


 


9.             Encumbrances


 


The Sellers warrant that the Vessel, at the time of delivery, is free
from any/ all charters, encumbrances,
mortgages and maritime liens or any other debts whatsoever. The Sellers hereby
undertake to indemnify the Buyers against all consequences of claims made
against the Vessel which have been incurred prior to the time of delivery.


 


10.          Taxes, etc.


 


Any taxes, fees and expenses in connection with the purchase and
registration under the Buyers’ flag shall be for the Buyers’ account, whereas
similar charges in connection with the closing of the Sellers’ register shall
be for the Sellers’ account.


 


11.          Condition on delivery


 


Vessell will be delivered to Buyers on a strictly as in condition but
subject to the terms and conditions of this agreement. However she will be
delivered with her class maintained without recommendation, free of average
damage affecting the vessel’s class and with its classification certificates
and national trading certificates valid at the time of delivery to Buyers.


 


The vessel C.S.M. items are to be fully uptodate at the time of
delivery.


 





















 


12.          Name/markings


 


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


 


13.          Buyers’ default see amended Clause 13


 


14.          Sellers’ default


 


Should the Sellers fail to give Notice of Readiness in accordance with
Clause 18 or fail to be ready to
validly complete a legal transfer by the date stipulated in Clause 18 the Buyers shall have the
option of cancelling this Agreement provided always that the Sellers shall be
granted a maximum of 3 banking days after Notice of Readiness has been given to
make arrangements for the documentation set out in Clause 8. If after Notice of
Readiness has been given but before the Buyers have taken delivery, the Vessel
ceases to be physically ready for delivery and is not made physically ready
again in every respect by the date stipulated in Clause
18 and new Notice of Readiness given, the Buyers shall retain
their option to cancel.


Should the Sellers fail to give Notice of Readiness by the date
stipulated in Clause 18 or fail to be ready
to validly complete a legal transfer as aforesaid they shall make due
compensation to the Buyers for their loss and for all expenses together with
interest if their failure is due to proven negligence and whether or not the
Buyers cancel this Agreement.


 


15.          Buyers’ representatives


 


After this Agreement has been signed by both parties, the Buyers have
the right to place two representatives on board the Vessel at their sole risk
and expense upon arrival at the next convenient
place of embarkation.


These representatives are on board for the purpose of familiarisation
and in the capacity of observers only, and they shall not interfere in any
respect with the operation of the Vessel. The Buyers’ representatives shall
sign the Sellers’ letter of indemnity prior to their embarkation.


Meal charges during the Buyers’ representatives onboard the vessel in
USD 10 per day per person.  All their
expenses including communication expenses shall be paid by the
Buyers/Charterers to the Sellers during delivery of the vessel against copies
of statements signed onboard between Master and Buyers’ representatives.


 


Representatives to be permitted to stay on board for a maximum of 30
days.


 


16.          Arbitration see Clause 25


 


 





















 


 


Clauses
17 - 25 shall be deemed to form an integral part of this contact.


 


 


	
  THE SELLERS

  	
  THE BUYERS

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ ZOE ROTIADI

  	
   

  	
  /s/ Eugenia Papapontikou

  	
   

  
	
  OZZIE MINERALS COMPANY LIMITED

  	
  DRYSHIPS INC. of Marshall Islands

  
	
   

  	
  of guaranteed nominee

  
	
  By : ZOE ROTIADI

  	
  By : Eugenia Papapontikou

  
	
  Title : ATTORNEY-IN-FACT.

  	
  Title : Attorney-In-Fact

  
				



 





















 


Additional
Clauses to the Memorandum of Agreement

m/v "MAGIC WAND"


 


Clause 13 (amended)


 


Should Buyers fail to
price the Dryships IPO by February 28th 2005, then this M.O.A. to be
considered null and void. In such case Buyers to have no obligation to purchase
the vessel.


 


Should the purchase price, following the Dryships IPO
pricing, not be paid in accordance with Clause 25, the Sellers have the right
to cancel the Agreement. Sellers shall be entitled to claim compensation for
their losses and for all expenses incurred together with interest.


 


Clause 17


 


The Buyers have not
inspected the vessel and her class records. Therefore, the sale/purchase is
subject to Buyers’ inspection of vessel’s class records and of the vessel at a
time and place to be mutually agreed. Inspection of the vessel to include empty
water ballast tanks as well as empty cargo holds if available at the time of
inspection. Buyers’ decision of acceptance or rejection to be declared within
close of business Athens time on October 20th, 2004. No penalty to
be payable to Sellers should Buyers reject vessel after inspection.


 


Clause 18


 


It has been further
mutually agreed between both parties that the vessel will be delivered cargo
free at the first discharge port where the vessel will arrive after the
Dryships IPO prices. The vessel will be delivered charter free or with charter
employment subject to Charterers’ approval and she will be delivered and taken
over safely afloat at a safe and accessible berth or safe and accessible anchorage
within the port limits within a delivery place and area to be mutually agreed
between both parties. Notice for delivery will be given by Buyers the day they
price the IPO.


 


Following notice by
Buyers that the IPO has priced, Sellers will within 72 running hours advise
Buyers of vessel’s intended place and date of delivery.


 


The Sellers shall keep
the Buyers well informed of the vessel’s itinerary and shall provide the Buyers
with 10, 7 and 5 days notice of the estimated time of arrival at the intended place
of 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.


 


Clause 19


 


Terms and details of this
deal to be kept strictly private and confidential amongst all parties
concerned.


 





















 


Clause 20


 


In exchange for payment of the vessel’s full purchase
price along with any other payments called for in accordance with the M.O.A,
the Sellers shall furnish the Buyers with delivery documents which to be
advised by the Buyers and to be incorporated in an Addendum to the M.O.A.


 


Clause 21


 


Any notices under this agreement will be distributed
as follows :


 


To the Buyers :


Company to be nominated by Dryships Inc.


c/o Drybulk S.A.


Tel : +30210 8090500


Fax : +30210 8090555


E-mail : snp@drybulk.gr


 


To the Sellers:


Ozzie Minerals Company Limited of Marshall Islands


c/o Brave Maritime Corp. Inc.


331, Kiffissias Avenue, Bldg. 2,


14561 Kiffissia


Athens - Greece


Tel: +30210 6250001


Fax: +30210 650018


E-mail: maritime@brave.gr


 


Clause 22


 


Sellers to hand to Buyers’ representatives at the time
of delivery a complete set of manuals in English relative to main
engine/auxiliaries in addition to all other existing manuals/instruction
books/plans, main engine, generators previous overhaul reports if available.


 


Clause 23


 


Sellers to confirm vessel in not blacklisted by Arab
boycott league, Damascus.


 


Clause 24


 


It has been further mutually agreed between both
parties there will be no 10% deposit lodged by the Buyers and the Sellers will
receive at the time of closing of title the 100% purchase price of the vessel
which will be paid in cash, together with extra payment for bunkers and lube
oils remaining on board at the time of delivery.


 





















 


Clause 25


 


This Agreement shall be governed by New York law.
Disputes, if any, out of or relating to this Agreement and the related M.O.A.
shall be resolved by Arbitration in New York, U.S.A., as per the rules of the
SMA INC. Arbitrators to be members of the SMA INC.


 


IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed on the date and year first above written.


 


 


	
  For the Sellers

  	
  For the Buyers

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ ZOE ROTIADI

  	
   

  	
  /s/ Eugenia Papapontikou

  	
   

  
	
  Ozzie Minierals Company Limited

  	
  Dryships Inc. of Marshall Islands

  
	
   

  	
  or guaranteed nominee

  
	
  Name:

  	
  ZOE ROTIADI

  	
  Name:

  	
  Eugenia Papapontikou

  
	
  Title:   ATTORNEY-IN-FACT

  	
  Title:  Attorney-In-Fact

  
						



 





















 


ADDENDUM
Nr. 1


to a Memorandum of
Agreement dated 8th October 2004 (“the MOA”)


 


between


 


OZZIE MINERALS
COMPANY LIMITED of Marshall Islands (“the Sellers”)


 


and


 


DRYSHIPS INC. of
Marshall Islands (“the Initial Buyer”)


 


relating to M.V.
MAGIC WAND


Built 1988, under
M.I. flag, GRT 36,120 NRT 23,032


(“the Ship”)


 










 


Whereas the Seller and the Initial Buyer have
contracted for the sale / purchase of the Ship pursuant to the MOA.


 


Whereas pursuant to the MOA the Initial Buyer may
nominate a guaranteed nominee to become the buyer of the Ship.


 


Whereas the Initial Buyer is hereby nominating FAGO
SHIPPING COMPANY LIMITED of Valletta, Malta, to be the eventual buyer of the
Ship pursuant to the MOA.


 


IT IS HEREBY AGREED AND CONFIRMED THAT


 


1)      FAGO SHIPPING COMPANY LIMITED of Valletta,
Malta hereby is accepted and becomes the buyer of the Ship (‘the Buyer”).


 


2)      The Initial Buyer hereby unconditionally
guarantees the performance of the Buyer under the MOA.


 


All other terms and conditions of the MOA remain in
full force and effect.


 


This       day of November
2004.


 


	
  The Seller

  	
   

  	
  The
  Initial Buyer

  	
   

  	
  The
  Buyer