kl11007_ex10-5.htm


    
      

    

    Exhibit
      10.5

    

    MEMORANDUM
      OF AGREEMENT                                                    

    
      
                                                                                                                                     

        Dated:8th
          August 2007                                                                             

      

       

      _________________________

    

     

    hereinafter
      called the Sellers, having agreed to sell, and Genco
      _____ Limited which to be guaranteed

     

    hereinafter
      called the Buyers, having agreed to buy

     

    Name:

     

    Classification
      Society/Class: NK

                             
      By:

     

    Flag:                                           Place
      of Registration:

     

    Call
      Sign:                                                Grt/Nrt:

     

     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

     

    2.           Deposit

     

    As
      security for the correct fulfilment of this Agreement the Buyers shall pay
      a
      deposit of 10 % (ten per cent) of the Purchase Price
      within 3
      (three) working
      days from the date this Agreement
      is
      signed by fax by both parties and all subjects lifted, whichever is
      later.  This deposit shall be placed with HSBC
      Bank Piraeus Branch – Attn Ms Kopsahili Tel.: +30 210 458
      2414

    


    and
      held
      by them in an
      interest bearing joint account for the Sellers and the
      Buyers, to be released in accordance with
      joint written instructions of the Sellers and the Buyers.  Interest,
      if any, to be credited to the Buyers.  Any fee charged for holding the
      said deposit shall be borne equally by the Sellers and the Buyers.

     

    3.           Payment

     

    The
      said
      Purchase Price shall be paid in full free of bank charges to HSBC
      Bank Piraeus Branch

     

    on
      delivery of the Vessel, but not later than 3 New
      York 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

     

    The
      buyers have accepted the vessel whether inspected or not and also accepted
      class
      records

     

    therefore
      the sale is outright and definite in this respect.

     

    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 20/15,
                7     , and 3        days
                approximate
                notice of the estimated time of arrival at
                the

            


    

    intended
      place of
      delivery and will otherwise keep
      Buyers

     

    well
      updated of any changes to these notices  .  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 final
      Notice of Readiness for delivery by
      facsimile or email after the Vessel is in all respects ready for delivery in
      accordance with the

     

    MOA
      including documentation reasonably required for registration, whereupon the
      Buyers

     

    shall
      pay for and take delivery of the vessel within three (3) New York banking days
      after

     

    receipt
      of a valid Notice of Readiness.

     

    
      	
              b)

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

            


    

    anchorage
      in Sellers’ option at
one
      safe port in the range of worldwide in Sellers’ option, excluding following
      countries: Albania, Burma, Cuba, Ivory Coast, Congo, Iran, Iraq, Liberia, North
      Korea, Sierra Leone, Sudan, Syria (which port must be suitable to and where
      a
      class approved diver and surveyor are located).

     

    Expected
      time of
      delivery: between October 1st, 2007 and December 10th,
      2007

    


    Date
      of
      cancelling (see Clauses 5 c), 6 b) (iii) and 14): 10th
      of
      December in Buyer’s 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 canceling 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 Clause 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 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

     

    
      	
              b)**

            	
              (i)
                The Vessel is
                to be delivered without drydocking.  However
                the Buyers have the right to carry out an inspection of the vessel’s
                underwater parts with class approved
                divers

            


    

    
      	
               

            	
              prior
                to the delivery of the vessel.  Should the Buyers choose to
                exercise this right then the Buyers shall arrange at their expense an
                inspection of the underwater parts by a class approved diver in the
                presence of a representative of both Buyers/Sellers together with
                a
                class surveyor who is to be arranged by
                Sellers. 
                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 nearby
      at their own expense.  Should such movement delay the vessel beyond
      her cancelling date, then same

    shall
      be extended to allow for this inspection.  If any damage is found to
      the vessel’s

    underwater
      parts which in the opinion of the class surveyor affects the vessels clean
      class

    then:

    A)
      If class requires the immediate drydocking of the vessel, then the drydocking
      clause herein shall be fully reinstated into this agreement and the vessel
      is to
      be docked accordingly at the Sellers expense before delivery. In this case
      the
      cancelling under this agreement shall automatically be extended by the duration
      of the entire repair period (including waiting time/deviation/gas freeing time,
      etc.) but not over four weeks. The Buyers shall then have the right to carry
      our
      their own works at their risk and expense and without causing any delays to
      the
      Sellers’ works and not interfering with same. The Buyers have the right to
      attend the drydocking without interfering with the Sellers or the class
      surveyors works. Should the Buyers’ works delay the undocking beyond the time
      that the Sellers’ works are completed, then provided that the vessel is in all
      other respects ready for delivery in accordance with this agreement, the Sellers
      have the right to present the Notice of Readiness whilst the vessel is in the
      dock.  In any event the Sellers shall remain responsible for the
      undocking costs even if the vessel is delivered to the Buyers in the
      dock.

     

    B)
      in the case of a class recommendation or condition calling for the repair of
      such defects at a later state or at the next class scheduled drydocking, then
      the Sellers shall pay the Buyers a mutually agreed lumpsum compensation figure
      covering the cost of such works but excluding all drydock dues unless the vessel
      is required by class to drydock before its next schedule drydocking in which
      case estimated drydock costs to be included in lumpsum


     

    settlement.  If
      this figure cannot be mutually agreed the Buyers and the Sellers are to obtain
      a quotation for the repairs from two first class shipyards near to the
      delivery port and the compensation is to be the average of these two
      quotations.

     

    (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.

     

    (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 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
      order 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, broached
      and unbroached stores, provisions and publications
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 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): a
      maxi
      gun water cannon for the holds and all oxygen, acetylene, freon
      bottles

     

    The
      Buyers shall take over [the remaining bunkers at the time of delivery and pay
      for them according to the prevailing plats prices at the time of delivery/port
      of delivery and] unused/unbroached lubricating oils
remaining on board in the
      vessel’s storage tanks and in
      unbroached/sealed drums and pay
Sellers last net invoice prices
      duly evidenced by
      vouchers


     

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

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    Purchase
      Price.

    


    8.           Documentation

     

    The
      place of
      closing:  HSBC Bank Piraeus
      Branch

     

    In
      exchange for payment
      of the Purchase Price the Sellers shall furnish the Buyers with delivery
      documents, reasonably required by Buyers. Sellers to
      provide Buyers with draft/copy of each of the requested documents at least
      ten
      (10) New York banking days prior to the intended delivery date, for Buyers
      approval. Sellers will deliver such documentation as is required and customary
      and may otherwise be required by the flag state where Buyer intends to register
      the vessel.

    


    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 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 maintained without condition/recommendation*,
      free of average damage affecting the Vessel’s class, and with all her
      classification certificates and national/international
      certificates, as well as all other certificates the Vessel had at the time
      of
      inspection, clean,
      valid and

    unextended
      at the time of delivery of the vessels, with all continuos
      survey items completely up to date without extensions and without
      condition/recommendation* by Class or the relevant authorities 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.

            


    

     

    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.  If the deposit does not
      cover their loss, the Sellers shall be entitled to claim further compensation
      for their losses and for ail expenses incurred together with
      interest.

     

    14.           Sellers’
      default

     

    Should
      the Sellers fail to give Notice of Readiness in accordance with Clause 5 a)
      or
      fall to be ready to validly complete a legal transfer by the date stipulated
      in
      line 61 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 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 fall 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 and
      all
      subjects lifted and the deposit has been lodged, the
      Buyers

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

    


    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
      Sellers’ crew or with the operation of the Vessel.
      The

    Buyers’
      representatives 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/LMAA

            


    

    
      	
               

            	
              and

            


    

    
      	
               

            	
              any
                dispute arising out of this Agreement shall be referred to arbitration
                in
                London in accordance with the Arbitration Acts 1950 and 1979 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 properly appointed shall not agree they shall appoint
                an
                umpire whose decision shall be
                final.

            


    

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Clauses
      17 and 18 to form an integral part of this MoA.

     

    Clause
      17

     

    Vessel
      to be delivered with a minimum of 200 tons of bunkers on board and 30 mtns
      mdo.

     

    


     

    


     

    


     

    


     

    For
      the
      Sellers                                                      For
      the Buyers

     

     

    


     

    This
      document is a computer generated copy of *SALEFORM 1993*, printed by authority
      of the Norwegian Shipbrokers’ Association, using software which is the copyright
      of Strategic Software Ltd. Any insertion or deletion to the form must be clearly
      visible. In the event of any modification made to the preprinted text of this
      document, the original document shall apply. The Norwegian Shipbrokers’
Association and Strategic Software Ltd. assume no responsibility for any loss
      or
      damage caused as a result of discrepancies between the original approved
      document and this document.