d929459_ex10-12.htm


    Exhibit
10.12

    
 

    SHARES
PURCHASE AGREEMENT

     

    This
Shares Purchase Agreement (“Agreement”), dated as of 1st
October 2008, is by and between LYCOPHRON CHALLENGE INC. of the Marshall
Islands (“Buyer”), and INVESTSHIPS LTD of the Marshall Islands
(“Seller”).

     

    RECITALS

     

    WHEREAS,
Seller owns all the 500 shares (“the Shares”) of the issued and outstanding
common stock of KINGSWOOD MARINE S.A. of the Marshall Islands (“the Owner”),
which shareholding represents a 100% interest in the Owner; (the
“Shares”);

     

    WHEREAS,
Buyer is a wholly owned subsidiary of DryShips Inc, (“DRYS”), a company
incorporated in The Marshall Islands and the shares of which are traded on the
Nasdaq Global Market;

     

    WHEREAS,
the Owner has purchased Hull 1106 SWS (the “Vessel”), currently under
construction at Shanghai Waigaoqiao Shipbuilding Company Limited (the “Builder”)
as per S/B Contract dated 29th March 2006 (the “S/B Contract”).

     

    WHEREAS,
Seller wishes to sell and Buyer wishes to buy, the Shares, on the terms and
conditions contained herein;

     

    WHEREAS,
the parties acknowledge that the prior written consent of certain lenders to
Seller may be required for Seller to deliver the Shares to Buyer;

     

    WHEREAS,
pending delivery of the Shares, Seller wishes to convey to Buyer, and Buyer
wishes to assume from Seller, all of the economic benefits and burdens of the
Owner.

     

    NOW,
THEREFORE, in consideration of the premises and the respective representations,
warranties, covenants and agreements stated herein, the parties agree as
follows:

     

    ARTICLE
I

    DEFINITIONS

     

    Capitalized
terms used in this Agreement have the meanings specified in (a) the preamble,
(b) the recitals, (c) this Article I or (d) elsewhere in this Agreement, as the
case may be:

     

    Governmental Body
means any (a) nation, state, country, city, town, village, district, or other
jurisdiction of any nature, (b) federal, state, local, municipal, foreign, or
other government, (c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal), (d) multinational governmental organization or
body, or (e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory or taxing authority or
power of any nature.

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

     

    Laws means all
statutes, treaties, codes, ordinances, decrees, rules, regulations, municipal
bylaws, judicial or arbitral or administrative or ministerial or departmental or
regulatory judgments, orders, decisions, rulings or awards, policies,
certificates, codes, licenses, permits, approvals, guidelines, voluntary
restraints, inspection reports, or any provisions of such laws, including
general principles of common law and equity and the requirements of all
Governmental Bodies, binding or affecting the Person referred to in the context
in which such word is used; and “Law” means any one of them.

     

    Lien
means, with respect to the Shares and assets owned by the Seller, (whether the
same is consensual or nonconsensual or arises by contract, operation of law,
legal process or otherwise): (i) any mortgage, lien, security interest, pledge,
attachment, levy or other charge or encumbrance of any kind thereupon or in
respect thereof; or (ii) any other arrangement under which the same is
transferred, sequestered or otherwise identified with the intention of
subjecting the same to, or making the same available for, the payment or
performance of any liability in priority to the payment of the ordinary,
unsecured creditors, and which under applicable law has the foregoing effect,
including any “adverse claim.

     

    Person means any
individual, firm, corporation, partnership, limited liability company, joint
venture, association, trust, unincorporated organization, government or agency
or subdivision thereof or any other entity.

     

    ARTICLE
II

    PURCHASE
OF SHARES; CLOSINGS

     

    Section
2.1            Purchase of Shares. Upon the
terms and subject to the conditions of this Agreement, and on the basis of the
representations and warranties hereinafter set forth, Seller agrees to sell,
transfer, convey, assign and deliver to Buyer, and Buyer agrees to acquire and
buy from Seller, the Shares, free and clear of all liens immediately upon
receipt of the requisite consents of Seller’s lenders.

     

    Section
2.2            (a)
Pending delivery of the Shares, Seller agrees to convey to Buyer, and Buyer
agrees to assume from Seller, all of the economic benefits and burdens of the
Owner and of ownership of the Vessel. In furtherance of the foregoing, as of
12:01 AM, Athens Time, on the Initial Closing Date (as defined below), Seller
shall cause the Owner to hold any funds received from whatever source, on
account and to the benefit of Buyer subject to payment of the Owner’s
liabilities and obligations; provided, however, that Seller shall not permit the
Owner to incur any new obligations or liabilities without the consent of Buyer.
It is clarified that any earnings of the Owner collected or to be collected by
the Owner and any and all expenses incurred or to be incurred by the Owner in
connection with the time up to 12.00 AM, Athens time, on the Initial Closing
Date shall be to the benefit or at the expense, respectively, of
Seller.

     

    (b)           Commencing
with the delivery of the Vessel from the Builder, Seller shall cause all charter
hire to be received at the account of the Owner with the Lending Bank and will
cause such charter hire to be utilized from such account to cover:

     

    
      	
               
      

            	
              (i)

            	
              the
      Vessel’s running expenses under her management by CARDIFF MARINE
      INC.;

            


    

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (ii)

            	
              the
      retention account for the payment of principal under the relevant loan
      facility agreement between the Owner and Nordea Bank acting on behalf of a
      syndicate of Banks;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              interest
      and any other amounts payable under the relevant
  loan;

            


    

     

    
      	
               
      

            	
              (iv)

            	
              any
      liquidity requirements for the relevant
loan;

            


    

     

    
      	
               
      

            	
              (v)

            	
              any
      contractual liabilities of the Owner pursuant to any swaps
      Agreement;

            


    

     

    
      	
               
      

            	
              (vi)

            	
              any
      other obligations that have been incurred with Buyer’s
      consent.

            


    

     

    The
surplus, if any, will be held by the Owner for the account of Buyer and shall be
distributed / remitted to Buyer on request as permitted by the existing Loan
Agreement.

     

    The Owner
is and shall remain the beneficiary of the warranties from the
Builder.

     

    Section
2.3            Voting. Pending the delivery
of the Shares, Seller hereby agrees to follow the instructions and to cause the
Board of Directors and officers of the Owner to follow the instructions of
Buyer.

     

    It is
hereby clarified that the Owner may at any time sell the Vessel provided Buyer
approves the terms and conditions of such sale.

     

    Section
2.4            Closings . The closings of
the transactions contemplated hereby (the “Closings”) shall take place on dates
to be mutually agreed in the premises of Deverakis Law Office (Omega Building,
80 Kifisias Avenue, Marousi) in Athens, Greece, or at such other place upon
which Buyer and Seller shall agree. The dates on which the Closings are to be
held are referred to in this Agreement as the “Initial Closing Date” and “Final
Closing Date respectively.” The Initial Closing Date shall be a date to be
agreed by the parties while the Final Closing Date will be a date to be agreed
by the parties when the transfer of Shares of the Owner to Buyer will be
effected. The parties need not be present at Closings, and documents may be
delivered through counsel.

     

    Section
2.5            Purchase Price. The aggregate
purchase price payable to Seller for the Shares shall consist of a number of
common shares issued by DryShips Inc. (“DRYS”) estimated by both Seller and
Buyer to represent the fair market value of the assets ultimately owned by the
Seller, namely the Vessel, which is Hull 1106 scheduled to be registered under
Malta flag. These common shares of DryShips Inc. shall be made available to
Seller as follows:

     

    On the
Initial Closing Date 1,900,808 shares of the common stock of DRYS. The number of
these shares has been calculated basis USD 35.5 per share. This price reflects
the closing price of the shares of DRYS on the Nasdaq Global Market on the last
trading day excluding the date of the Agreement, that is, USD 35.5 per share. In
the event that the actual instalments paid to the Builder on the Initial Closing
Date are more than the amount described hereinbelow under 3.1 Buyer will pay
Seller an amount equal to the difference between the additional shipyard
instalment and the additional debt incurred in cash or in shares of common stock
of DRYS at USD 35.5 per share at Seller’s option. It is agreed by the parties
that (i) from the Initial Closing Date Seller will enjoy all benefits in respect
of above shares (including but not limited receipt of dividends and voting
rights) (ii) these shares of the Common Stock of DRYS will be held in escrow
until the Final Closing Date in case such shares are issued in paper form they
shall be held in escrow by Seward & Kissel LLP, N.Y.; In case such shares
are issued in electronic form such restriction will be noted and such shares
will be held by AST & T, N.Y. (iii) These shares of the Common Stock of DRYS
will be released by the Escrow Agent without any condition to Seller against
transfer of the Shares of the Owner by Seller to Buyer on the Final Closing
Date.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

    ARTICLE
III

    REPRESENTATIONS
AND WARRANTIES OF SELLER

     

    Seller
represents and warrants to Buyer as follows:

     

    Section
3.1            Authorization . Seller has
full corporate power and authority under its governing documents, directors have
taken all necessary action to authorize it, to execute and deliver this
Agreement, to consummate the transactions contemplated herein and to take all
actions required to be taken by it pursuant to the provisions hereof. It is
noted that currently the acquisition of the Vessel is financed by NORDEA BANK
acting on behalf of a syndicate of Banks (the “Lending Bank”). In above context Buyer
hereby undertakes to either obtain the Consent of NORDEA BANK in respect of the
transactions contemplated herein until or latest on the Final Closing Date or
timely and fully repay the amount of loan due under the loan agreement between
the Owner and NORDEA BANK acting on behalf of a syndicate of Banks as per the
repayment schedule attached to this Agreement as Exhibit A. Buyer hereby
undertakes to pay the Builder the outstanding balance of the purchase price as
per S/B Contract (payment Schedule is attached to this Agreement forming Exhibit
B).

     

    This
Agreement constitutes the valid and binding obligation of Seller enforceable in
accordance with its terms.

     

    Section
3.2           Title to Shares. Seller owns
beneficially and on record all of the Shares and at the Final Closing will own
beneficially and on record all of the Shares, in each case free and clear of all
Liens, debts, dues and duties of whatsoever nature except as disclosed in clause
3.1 thereof. Such Shares at Final Closing will not be subject to any agreements
or understandings with respect to the voting or transfer of any of the Shares.
The Shares have been duly authorized and validly issued and are fully paid and
nonassessable. At Final Closing Date Seller will have full right to sell,
assign, convey and transfer the Shares to Buyer pursuant to the terms hereof and
will, upon delivery of a certificate or certificates representing such Shares to
Buyer, endorsed, transfer to Buyer title to such Shares, free and clear of any
liens, debts, dues and duties of whatsoever nature.

     

    (a)           At
Final Closing Date there will not be any, outstanding subscriptions, options,
convertible securities, warrants or calls or preemptive rights of any kind
issued or granted by, or binding upon, Seller to purchase or otherwise acquire
or to sell or otherwise dispose of the Shares or any interest in
them.

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

     

    Section
3.3            Non-Contravention. Except as
stated in clause 3.1 thereof neither the execution and delivery of this
Agreement or any documents executed in connection herewith, nor the consummation
of the transactions contemplated herein on the Final Closing Date
shall:

     

    (a)           violate,
conflict with, result in a breach of or require notice or consent under (i) any
Law, (ii) the governing documents of Seller or (iii) any provision of any
agreement or instrument to which Seller is a party;

     

    (b)           contravene,
conflict with, or result in a violation of, or give any Governmental Body or
other Person the right to challenge any of such transactions or to exercise any
remedy or obtain any relief under, any Law, to which Seller or the Shares, is
subject;

     

    (c)           require
notice to or consent of any Governmental Body; or

     

    (d)           result
in the imposition or creation of any Lien or duty upon or with respect to the
Shares.

     

    Section
3.4            Validity. Except as stated in
clause 3.1 thereof, there is no investigation, claim, proceeding or litigation
of any type pending or, threatened to which Seller is a party that (i) questions
or involves the validity or enforceability of any of Seller’s obligations under
this Agreement or (ii) seeks (or reasonably might be expected to seek) (A) to
prevent or delay the consummation by Seller of the transactions contemplated by
this Agreement or (B) damages in connection with any such
consummation.

     

    Section
3.5            Litigation. There is no
investigation, claim, proceeding or litigation of any type pending or, against
the Seller.

     

    ARTICLE
IV

    REPRESENTATIONS
AND WARRANTIES OF BUYER

     

    Buyer
represents and warrants to Seller as follows:

     

    Section
4.1            Authorization. Buyer has full
corporate power and authority under governing documents, and its board of
directors have taken all necessary action to authorize it, to execute and
deliver this Agreement, to consummate the transactions contemplated herein or
therein and to take all actions required to be taken by it pursuant to the
provisions hereof or thereof, and this Agreement constitutes the valid and
binding obligation of Buyer, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting creditors’ rights generally and to the
principles of equity (whether enforcement is sought in a proceeding in equity or
at law).

     

    Section
4.2            Non-Contravention. Neither
the execution and delivery of this Agreement, nor the consummation of the
transactions contemplated herein or therein, does or shall violate, conflict
with or result in breach of or require notice or consent under any Law, the
governing documents of Buyer nor any provision of any agreement or instrument to
which Buyer is a party.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

     

    Section
4.3            Validity. There is no
investigation, claim, proceeding or litigation of any type pending or,
threatened to which Buyer is a party that (i) questions or involves the validity
or enforceability of any of Buyer’s obligations under this Agreement or (ii)
seeks (or reasonably might be expected to seek) (A) to prevent or delay the
consummation by Buyer of the transactions contemplated by this Agreement or (B)
damages in connection with any such consummation.

     

    ARTICLE
V

    COVENANTS

     

    Section
5.1            Conduct of Business Pending Final
Closing. Buyer and Seller agree that between the date of the execution of
this Agreement and the Final Closing Date Buyer and Seller shall (i) conduct the
business and maintain and preserve the assets of Seller in the ordinary course
of business, and (ii) use their reasonable efforts to cause all of the
representations and warranties in Article Ill hereof to continue to be true and
correct.

     

    Section
5.2            Further Assurances. Subject
to the prior written consent of Seller’s Lending Bank or full repayment by Buyer
of the balance of the loan due by the Owner to the present Lending Bank(s),
Seller shall execute, acknowledge and deliver or cause to be executed,
acknowledged and delivered to the Buyer such assignments or other instruments of
transfer, assignment and conveyance, in form and substance reasonably
satisfactory to Buyer, as shall be necessary to vest in Buyer all of the right,
title and interest in and to the Shares undertaken to be sold to Buyer by Seller
pursuant to this Agreement, free and clear of all Liens, debts, dues and duties
of whatsoever nature, and any other document reasonably requested by Buyer in
connection with this Agreement. It is noted that at the time of transfer of the
Shares of the Owner to Buyer, the amount of 1,900,808 shares of the Common Stock
of DRYS agreed to be held in escrow as described in Article 2.5, will be
released to Seller by the Escrow Agent without any condition.

     

    Section
5.3            Governmental Filings. As
promptly as practicable after the execution of this Agreement, each party shall,
in cooperation with the other, file any reports or notifications that may be
required to be filed by it under applicable law, if any.

     

    Section
5.4            Consents. After the Final
Closing Date, Seller shall obtain any consents or approvals or assist in any
filings reasonably required in connection with the transactions contemplated
hereby that are requested by Buyer and that have not been previously obtained or
made.

     

    Section
5.5            Public Announcements. Neither
party shall, without the prior approval of the other party, issue, or permit any
of its partners, stockholders, directors, officers, employees, members,
managers, agents to issue, any press release or other public announcement with
respect to this Agreement or the transactions contemplated hereby, except as may
be required by Law or any regulatory Authority to which relevant party is
accountable.

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

     

    ARTICLE
VI

    INDEMNIFICATION

     

    Section
6.1            Seller’s Indemnity Obligations.
Seller agrees to indemnify Buyer against, and hold Buyer harmless from
and against, any amounts that arise from, are based on or relate or otherwise
are attributable to (a) any error, inaccuracy, breach or misrepresentation in
any of the representations and warranties made by or on behalf of Seller in this
Agreement, (b) any violation or breach by Seller of or default by Seller under
the terms of this Agreement. Buyer shall be entitled to recover its reasonable
and necessary attorneys’ fees and litigation expenses incurred in connection
with successful enforcement of its rights under this Section 6.1.

     

    Section
6.2            Buyer’s Indemnity Obligations.
Buyer shall indemnify Seller against, and hold Seller harmless from and
against, any and all amounts that arise from, are based on or relate or
otherwise are attributable to (a) any error, inaccuracy, breach or
misrepresentation in any of the representations and warranties made by or on
behalf of Buyer in this Agreement, (b) any violation or breach by Buyer of or
default by Buyer under the terms of this Agreement. Seller shall be entitled to
recover its reasonable and necessary attorneys’ fees and litigation expenses
incurred in connection with successful enforcement of their rights under this
Section 6.2.

     

    Section
6.3            Survival of Indemnity Obligation.
The rights and duties contained in this Article VI shall survive the
Final Closing.

     

    ARTICLE
VII

    CONDITIONS
TO INITIAL AND FINAL CLOSINGS

     

    Section
7.1           Conditions to Obligations of Buyer.
The obligations of Buyer to consummate the transactions contemplated
herein are subject, at the option of Buyer, to satisfaction of the following
conditions:

     

    (a)           Compliance. Prior to or
latest on the Final Closing Date Seller shall have complied with its covenants
and agreements contained herein, and the representations and warranties
contained in Article III hereof shall be true and correct in all material
respects (except those representations and warranties qualified by materiality
shall be true and correct in all respects) on the date hereof and as of the
Final Closing Date.

     

    (b)           Orders, Etc. No action, suit
or proceeding shall have been commenced or shall be pending or threatened, and
no statute, rule, regulation or order shall have been enacted, promulgated,
issued or deemed applicable to the transactions contemplated by this Agreement,
by any Governmental Body or court that reasonably may be expected to prohibit
consummation of the transactions contemplated by this Agreement.

     

    (c)           Share Certificate. Latest on
the Final Closing Date, Seller shall deliver certificates
evidencing the Shares each endorsed in favour of Buyer executed by
Seller.

     

    (d)           Consents. All consents and
approvals required in connection with the execution, delivery and performance of
this Agreement shall have been obtained, save for any consent required from the
present Lending Bank(s).

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

     

    Section
7.2           Conditions to Obligations of Seller.
The obligations of Seller to consummate the transactions contemplated
herein are subject, at the option of Seller, to satisfaction of the following
conditions:

     

    (a)           Compliance. Buyer shall have
complied with its covenants and agreements
contained herein, and the representations and warranties contained in Article IV
hereof shall be true and correct in all material respects (except those
representations and warranties qualified by materiality shall be true and
correct in all respects) on the date hereof and as of the Initial Closing
Date.

     

    (b)           Orders, Etc. No action, suit
or proceeding shall have been commenced or shall be
pending or threatened, and no statute, rule, regulation or order shall have been
enacted, promulgated, issued or deemed applicable to the transactions
contemplated by this Agreement, by any Governmental Body or court that
reasonably may be expected to prohibit consummation of the transactions
contemplated by this Agreement.

     

    (c)           Consents. All consents and
approvals required in connection with the execution,
delivery and performance of this Agreement shall have been obtained; however,
Seller shall only obtain and provide evidence in connection with the sale of the
shares to the Buyer upon either (a) consent of the Lending Bank to the sale of
the shares or (b) repayment at the expense of Buyer latest upon the Final
Closing Date.

     

    (d)           Purchase Price. Buyer shall
have advanced to the Seller the Purchase Price due
under Section 2. 5.

     

    ARTICLE
VIII

    TERMINATION

     

    Section
8.1            Grounds for Termination. This
Agreement may be terminated at any time prior to the Final Closing
Date:

     

    (a)           By
the mutual written agreement of Buyer and Seller;

     

    (b)           By
Buyer if any of the conditions set forth in Section 7.1 hereof shall have become
incapable of fulfillment and shall not have been waived by Buyer;

     

    (c)           By
Seller if any of the conditions set forth in Section 7.2 hereof shall have
become incapable of fulfillment and shall not have been waived by
Seller;

     

    (d)           By
either party by written notice thereof to the other, if the Final Closing
contemplated hereby shall not have been consummated on or before 31 December
2009 or such other date, if any, as Buyer and Seller shall agree upon in
writing; or

     

    (e)           By
Buyer or Seller if the consummation of the transactions contemplated hereby
would violate any nonappealable final order, decree or judgment of any court or
Governmental Body having competent jurisdiction enjoining, restraining or
otherwise preventing, or awarding substantial damages in connection with, or
imposing a material adverse condition upon, the consummation of this Agreement
or the transactions contemplated hereby; provided, however, that a
party shall not be allowed to exercise any right of termination pursuant to this
Section 8.1 if the event giving rise to such termination right shall be due to
the negligent or willful failure of the party seeking to terminate this
Agreement to perform or observe in any material respect any of the covenants or
agreements set forth herein to be performed or observed by such
party.

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

     

    ARTICLE
IX

    GENERAL
PROVISIONS

     

    Section
9.1            Entire Agreement. This
Agreement constitutes the entire agreement of the parties with respect to the
subject matter hereof. This Agreement may not be modified, amended or terminated
except by a written instrument specifically referring to this Agreement signed
by all the parties hereto.

     

    Section
9.2            Waivers and Consents. All
waivers and consents given hereunder shall be in writing. No waiver by any party
hereto of any breach or anticipated breach of any provision hereof by any other
party shall be deemed a waiver of any other contemporaneous, preceding or
succeeding breach or anticipated breach, whether or not similar. Except as
provided in this Agreement, no action taken pursuant to this Agreement,
including any investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance with any
representations, warranties, covenants or agreements contained in this
Agreement.

     

    Section
9.3            Notices. All notices and
other communications hereunder shall be in writing and shall be deemed to have
been received only if and when (a) personally delivered, (b) on the fifth day
after mailing, by mail, first class, postage prepaid or by certified mail return
receipt requested, addressed in each case as follows (or to such other address
as may be specified by like notice), (c) at the time receipt is acknowledged
when delivered by private mail or courier service or (d) received by facsimile
at the phone number listed below:

     

    (a)           If
to Buyer to:

     

    
      	 
      	
              c/o
      DryShips Inc.

            
	 
      	
              Omega
      Building

            
	 
      	
              80
      Kifisias Avenue

            
	 
      	
              Marousi,
      Athens, Greece

            
	 
      	
              Attn:
      The CEO

            
	 
      	
              Telefax:
      +30 210 8090505

            
	 
      	 
      


    

    (b)           If
to Seller to:

     

    
      	 
      	
              c/o
      CARDIFF MARINE INC.

            
	 
      	
              Omega
      Building

            
	 
      	
              80
      Kifisias Avenue

            
	 
      	
              Marousi,
      Athens, Greece

            
	 
      	
              Attn:
      Mr. A. Ioannidis, G.M.

            
	 
      	
              Fax:
      +30 210 8090205

            
	 	 


    

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

     

    Section
9.4            Assignments, Successors and No
Third-Party Rights. No party may assign any of its rights or delegate any
of its obligations under this Agreement without the prior written consent of the
other party. Subject to the preceding sentence, this Agreement will apply to, be
binding in all respects upon and inure to the benefit of the successors and
permitted assigns of the parties.

     

    Section
9.5            Choice of Law; Resolution of
Disputes. This Agreement shall be governed by the laws of England
(without regard to the choice of law provisions thereof). All disputes,
differences, controversies or claims arising out of or in connection with this
Agreement shall be arbitrated at London in the following manner. One arbitrator
is to be appointed by each of the parties hereto and the two appointed
arbitrators shall appoint a third arbitrator. Their decision or that of any two
of them shall be final . The arbitrators shall be commercial persons, conversant
with shipping matters and members of the London Maritime Arbitrators
Association. Such arbitration is to be conducted in accordance with the rules
and on the terms current at the time when the arbitration proceedings are
commenced and in accordance with the Arbitration Act 1996 or any statutory
modification or reenactment thereof.

     

    Section
9.6            Construction; Section Headings;
Table of Contents. The language used in this Agreement shall be deemed to
be the language the parties hereto have chosen to express their mutual intent,
and no rule of strict construction will be applied against any party hereto. The
section headings and any table of contents contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.

     

    Section
9.7            Severability. Any term or
provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.

     

    Section
9.8            Counterparts. This Agreement
may be executed in any number of counterparts, each of which shall be deemed to
be an original and all of which together shall be deemed to be one and the same
instrument.

     


    
      
         


      

      
        10

        
          

        

      

      
         


      

    


    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.

     

    
      	 	
              For
      the Buyer

            
	 	 
      
	 	 
      
	 	
              By:
      /s/ Angelos Papoulias

            
	 	
              Name:
      Angelos Papoulias

            
	 	
              Title:
      Attorney-in-fact

            
	 	 
      
	 	 
      
	 	 
      
	 	 
      
	 	 
      
	 	
              For
      the Seller

            
	 	 
      
	 	 
      
	 	 
      
	 	
              By:
      /s/ Charalambos Alivizatos

            
	 	
              Name:
      Charalambos Alivizatos

            
	 	
              Title:
      Attorney-in-fact

            


    

    



    
      
         


      

      
        11

        
          

        

      

      
         


      

    


    Summary
of Principal Terms of Nordea Loan Facility

    re:
m/v H.1106

     

     

    1.          Loan
Facility dated November 2007.

     

    2.          Initial
Amount of Principal : USD 60,000,000

     

    3.          Repayment
Period: Five (5) years from vessel delivery.

     

    4.          Interest
Rate: USD Libor plus:

            
1.      0,80% if equity ratio > or equal to
0,55

            
2.      0,90% if equity ratio > or equal to
0,45 and < 0,55

            
3.      1% if equity ratio < 0,45

     

       
5.          Loan Repayment
Schedule attached.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    HULL
1106 (Nordea)

    LOAN
REPAYMENT SCHEDULE

     

    
      	
              DATE

            	
              INSTALMENT

            	
              0/S
      BALANCE

            
	
              29-Nov-09

            	 
      	
              60.000.000

            
	
              28-Feb-10

            	
              1.250.000

            	
              58.750.000

            
	
              31-May-10

            	
              1.250.000

            	
              57.500.000

            
	
              31-Aug-10

            	
              1.250.000

            	
              56.250.000

            
	
              30-Nov-10

            	
              1.250.000

            	
              55.000.000

            
	
              28-Feb-11

            	
              1.250.000

            	
              53.750.000

            
	
              31-May-11

            	
              1.250.000

            	
              52.500.000

            
	
              31-Aug-11

            	
              1.250.000

            	
              51.250.000

            
	
              30-Nov-11

            	
              1.250.000

            	
              50.000.000

            
	
              29-Feb-12

            	
              1.250.000

            	
              48.750.000

            
	
              31-May-12

            	
              1.250.000

            	
              47.500.000

            
	
              31-Aug-12

            	
              1.250.000

            	
              46.250.000

            
	
              30-Nov-12

            	
              1.250.000

            	
              45.000.000

            
	
              28-Feb-13

            	
              1.000.000

            	
              44.000.000

            
	
              31-May-13

            	
              1.000.000

            	
              43.000.000

            
	
              31-Aug-13

            	
              1.000.000

            	
              42.000.000

            
	
              30-Nov-13

            	
              1.000.000

            	
              41.000.000

            
	
              28-Feb-14

            	
              1.000.000

            	
              40.000.000

            
	
              31-May-14

            	
              1.000.000

            	
              39.000.000

            
	
              31-Aug-14

            	
              39.000.000

            	
              0

            


    

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Hull 1106 (Capesize Bulk
Carrier DWT 177,000) CAPESHIPS

    
      	
              Bank

            	
              Nordea

            	 
      	 
      	 
      
	
              Loan

            	
              60,000,000

            	 
      	 
      	 
      
	
              Contract
      Price

            	
              60,500,000

            	 
      	 
      	 
      
	
              Builders

            	
              Shanghai
      Waigaoqiao Shipbuilding Co Ltd

            	 
      	 
      	 
      
	
              Delivery
      as per contract

            	
              31-Dec-09

            	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 	
              Loan  

            	
              Owners
      contribution  

            	
              Total
      Yard Installments

            	 
      
	
              1st
      Signing

            	 18-Sep-06	
              5,480,000

            	
              500,000

            	
              5,980,000

            	
              paid

            
	
              2nd
      Signing

            	 15-Nov-06	
              2,990,000

            	 
      	
              2,990,000

            	
              paid

            
	
              3rd
      Signing

            	 17-Jan-07	
              2,990,000

            	 
      	
              2,990,000

            	
              paid

            
	
              4th
      Steel Cutting

            	 3-Apr-09	
              5,980,000

            	 
      	
              5,980,000

            	 
      
	
              5th
      Keel Laying

            	 4-Aug-09	
              5,980,000

            	 
      	
              5,980,000

            	 
      
	
              6th
      Launching

            	 10-Oct-09	
              5,980,000

            	 
      	
              5,980,000

            	 
      
	
              7th
      Delivery

            	 29-Nov-09	
              30,600,000

            	 
      	
              30,600,000

            	 
      
	 
      	 	
                                    
      60,000,000

            	
              500,000

            	
              60,500,000