Exhibit
10.1.7


 


 


	
  MEMORANDUM OF AGREEMENT

  	
  Norwegian Shipbrokers’ Associations

  
	
   

  	
  Memorandum of Agreement for sale and

  
	
   

  	
  purchase of ships. Adopted by The Baltic

  
	
   

  	
  and International Maritime Council

  
	
   

  	
  (BIMCO) in 1956.

  
	
   

  	
  Code-name

  
	
  Dated: 4th October 2004

  	
  SALEFORM
  1993

  
	
   

  	
  Revised 1966, 1983 and 1986/87.

  



 


Morning Light Maritime Ltd., Malta


hereinafter called the
Sellers, have agreed to sell, and


 


Dryships Inc. of Marshall
Islands


hereinafter called the
Buyers, have agreed to buy


 


Name: Motor
Vessel "STEFANOS"


 


Classification
Society/Class: 


+A1(E) Bulk Carrier AMS Strengthened
heavy cargoes no. 2-4-6 holds may be exempt


 


	
  Built:

  	
  1984

  	
   

  	
   

  	
  By:

  	
  Kaohsiung, Taiwan

  	
   

  	
   

  
	
   

  	
   

  
	
  Flag:

  	
  Malta

  	
   

  	
   

  	
  Place of Registration:

  	
  Valletta, Malta

  	
   

  	
   

  
	
   

  	
   

  
	
  Call sign:

  	
  9H0W7

  	
   

  	
   

  	
  Grt/Nrt:

  	
  36,303.14/21,864.87

  	
   

  	
   

  
	
   

  	
   

  
	
  Register Number: 

  	
   

  
											



 


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 U.S. $16,000,000.- cash payment
(United States Dollars sixteen million)


 


2.             Deposit  see Clause 25


 


3.             Payment  see Clause 25


 


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


 


Date of cancelling (see
Clauses 5 c), 6 b) (iii) and 14): 60 days after the IPO is
priced at Buyers’ option


 


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 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 drydocklng, 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. 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 against
documented invoices excluding barging expenses. 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


 


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.


However, the Vessel shall be delivered with her class fully maintained
without condition free of /recommendation*,


free of average damage affecting the Vessel’s class, and with her
classification certificates and national / International Trading
certificates according
to the vessel’s present Flag, as well as all other certificates
the Vessel had at the time of inspection, valid and


unextended without condition/recommendation* by Class
or the relevant authorities at the time of delivery for a period of 3 months. The
vessel C.S.M. items are to be fully uptodate
at the time of delivery.


“Inspection” in this Clause 11, shall mean the Buyers’ inspection
according to Clause 4 a) or 4 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.


 










*              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.


 


The vessel is to be delivered with her cargo holds in empty
and clean swept/ dry condition.


 


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.


 


Such
expenses to include the 1/6 of the cost of the Dryships IPO which cost not to
exceed U.S.$1,500,000 on  top of other
damages the Buyers may suffer including the difference of cost (if any) of a
substitute vessel.


 


15.          Buyers’
representatives - See Clause 22


 


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 Seller’s letter of indemnity prior to their embarkation.


Meal
charges during the Buyer’s representatives onboard the vessel is 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.


 


16.          Arbitration see Clause 26


 





















 


Clauses 17 - 26 shall be deemed to form an integral part of this contact.


 


 


	
  THE SELLERS

  	
   

  	
  THE BUYERS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Myron Tsatsakis

  	
   

  	
   

  	
  /s/ Eugenia Papapontikou

  	
   

  
	
  Morning
  Light Maritime Ltd., Malta

  	
   

  	
   

  	
  DRYSHIPS
  INC. of Marshall Islands

  	
   

  
	
  By:

  	
   

  	
  By: Eugenia Papapontikou

  	
   

  
	
  Title:

  	
   

  	
  Title:
  Attorney-in-Fact

  	
   

  



 





















 


Additional
Clauses to the Memorandum of Agreement

m/v "STEFANOS"


 


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 IPO be priced then Buyers to have the obligation
to buy the vessel.


 


Buyers have also the option to buy the vessel even if
the IPO is not priced.


 


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. Buyers’ decision of acceptance or rejection to be
declared within close of business Athens time on October 31st, 2004.


 


The sale/purchase is also subject to Dryships IPO
(expected to price within December 15th, 2004 to February 28th,
2005).


 


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 which approval not to be unreasonably withheld 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 of the discharge port. 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.


 


Buyers to have the option to request Sellers’ Managers
(Modion Maritime Management S.A.) to be obliged to continue managing the vessel
for one round trip (next loading and discharging ports following the purchase of
the vessel by Buyers). Sellers’ Managers will be reimbursed at actual cost plus
$ 350.00 / day management expenses for the period the vessel is managed by them
payable in lumpsum at the time the Buyers will replace Managers’ crew with
their own crew.


 





















 


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 :


Morning Light Maritime Ltd., Malta


c/o Modion Maritime Management S.A.


61-65 Filonos Street


185 35 Piraeus - Greece


Tel: +30210 4222928


Fax: +30210 4222939


E-mail: modion@otenet.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.


 


Sellers, Master and Chief Engineer to demonstrate
vessel’s operation to their opposite numbers (Buyers’ representatives on board)
at the time of delivery.


 


Clause 23


 


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


 


Clause_24


 


Sellers to maintain vessel to their present standards
till the time of her delivery.


 





















 


Clause 25


 


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


 


Clause 26


 


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/ Myron Tsatsakis

  	
   

  	
  /s/ Eugenia Papapontikou

  	
   

  
	
  Morning Light Maritime Ltd., Malta

  	
  Dryships S.A. of Marshall Islands

  
	
  By :

  	
  Myron Tsatsakis

  	
   

  	
   

  	
  By : Eugenia Papapontikou

  
	
  Title :

  	
  Title : Attorney-In-Fact