Document:

EXHIBIT 10.5

 

 

ASSET PURCHASE AGREEMENT (this “Agreement”)
dated as of August 16, 2005, among Cavan Maritime Limited, a Marshall
Islands corporation (“Acquiror”),
Vanguard Ultramax LLC, a Marshall Islands limited liability company (“Vanguard”), Colas Orchid Ltd., a Bahamian
company (“Colas”), and Clipper
Bulk Shipping Ltd., a Bahamian company (“Clipper
Bulk” and together with Vanguard and Colas, the “Transferors”).

 

INTRODUCTION

 

WHEREAS,
each Transferor is the owner of the dry bulk carrier or, in the case of Clipper
Bulk controls the two dry bulk carriers (each a “Transferor Vessel” and collectively, the “Transferor  Vessels”)
noted opposite such Transferor’s name on Schedule I
attached hereto;

 

WHEREAS,
each Transferor desires to sell all of its right, title and interest in its
respective Transferor Vessel, and Acquiror desires to purchase each such
Transferor Vessel, upon the terms and subject to the conditions set forth
herein; and

 

WHEREAS,
Acquiror intends to make an initial public offering of its shares of common
stock immediately following the closing of the transactions contemplated by
this Agreement.

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

1.01.        Definitions.  (a)  The following terms, as used in this Agreement, shall have
the following meanings:

 

“Accounts Payable”
shall have the meaning ascribed to such term in Section 2.01(d).

 

“Accrued Liabilities”
shall have the meaning ascribed to such term in Section 2.01(d).

 

“Acquiror Representatives”
shall have the meaning ascribed to such term in Section 6.10.

 

“Acquiror Shares”
means that number of newly-issued shares of Common Stock of Acquiror
representing the Transferors’ Percentage of the number of shares of Common
Stock of Acquiror issued and outstanding immediately prior to the pricing of
the IPO.

 

“Acquiror Vessels”
means, collectively, the Anita, the Koby and the Paige, in each
case owned and controlled by Affiliates of Wexford.

 

 

“Acquisition Proposal”
means, in relation to the Transferors, any offer or proposal for, or any
indication of interest in, the purchase, long term lease or other disposition
of any interest (including acquisition of an equity interest) in the Transferor
Vessels other than as contemplated by this Agreement, and, in relation to
Wexford, any offer or proposal for, or any indication of interest in, the
purchase, long term lease or other disposition of any interest (including
acquisition of an equity interest) in the Acquiror Vessels other than as
contemplated by this Agreement; provided, however, “Acquisition Proposal” shall not include any proposed acquisition
by Acquiror of vessels other than the Transferor Vessels and the Acquiror
Vessels.

 

“Affiliate”
means, with respect to any specified Person, any other Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, such specified Person.

 

“Agreed Appraisers”
means Simpson Spence & Young, London, Clarksons, London, and R.S.
Platou, Oslo (or if any of them were unavailable, such substitutes as the
parties mutually agree).

 

“Assets”
shall mean with respect to each Transferor, such Transferor’s Transferor
Vessel, such Transferor Vessel’s Vessel Personal Property, such Transferor
Vessel’s Vessel Warranties, if any, and such Transferor Vessel’s Vessel Assets.

 

“Business Day”
means any day other than a Saturday or Sunday or any other day on which banking
institutions are generally obligated or authorized to close in the State of New
York.

 

“Charter Completion Date”
means, with respect to the Transferor Vessels transferred by each of Vanguard
and Colas, the date of the completion of the voyage or time charter, if any, in
effect as of the First Closing with respect to each such Transferor Vessel at
which time such Transferor Vessel shall be free of cargo and safely afloat, provided, if, at the port in which the relevant voyage or
charter terminates it is customary for vessels of like size and type to the
relevant Transferor Vessel to lie safely at a safe anchorage, berth or place,
then such condition shall be deemed “safely afloat” for purposes of this
definition.

 

“Clipper Nominee”
shall have the meaning ascribed to such term in Section 2.01(b).

 

“Closing Date”
shall have the meaning ascribed to such term in Section 2.02.

 

“Code” means the
Internal Revenue Code of 1986.

 

“Colas Charter Novation
Agreement” shall have the meaning ascribed to such term in Section 3.01(o).

 

“Colas TM Novation
Agreement” shall have the meaning ascribed to such term in Section 3.01(o).

 

“Colas Time Charter”
shall have the meaning ascribed to such term in Section 2.03(b)(ii).

 

2

 

“Common Stock”
means the common stock, par value $0.001 per share, of Acquiror.

 

“Contract” means
any agreement, contract, note, bond, arrangement, understanding, lease,
license, option, indenture, mortgage, deed of trust, plan, commitment or
instrument, whether written or oral.

 

“Dispute Notice”
shall have the meaning ascribed to such term in Section 2.03(f).

 

“Due Diligence Inspection”
means the inspection of the Transferor Vessels to be transferred hereunder by
Clipper Bulk contemplated by the first sentence of Section 6.09(a) following
the date hereof.

 

“First Closing”
shall have the meaning ascribed to such term in Section 2.02.

 

“First Closing Date”
shall have the meaning ascribed to such term in Section 2.02.

 

“GAAP” means
U.S. generally accepted accounting principles.

 

“Gem Bareboat Charter”  shall have the meaning ascribed to such term
in Section 2.01(b).

 

 “Glory Bareboat Charter” 
shall have the meaning ascribed to such term in Section 2.01(b).

 

 “Governmental Entity” means any Federal, state, local or
foreign government or any court of competent jurisdiction, administrative
agency or commission or other governmental authority or instrumentality,
domestic or foreign.

 

“Guarantor”
means (i) with respect to Vanguard, VOC Shipholdings BV, and (ii) with
respect to Colas, and Clipper Bulk, Clipper Bulk Shipholdings Ltd., a Bahamian
company.

 

“Indemnification Agreement”
shall have the meaning ascribed to such term in Section 3.01(j).

 

“Indemnified Persons”
shall have the meaning ascribed to such term in Section 6.10.

 

“Initial Appraised Value”
means (i) with respect to the Transferor Vessels $106,912,500, of which
the Vessel Average allocable to the Transferor Vessel owned by Colas is
$25,787,500, of which the Vessel Average allocable to the Transferor Vessel
owned by Vanguard is $36,500,000, of which the Vessel Average allocable to the Gem is $22,312,500, and of which the Vessel Average
allocable to the Glory is $22,312,500; and (ii) with
respect to the Acquiror Vessels $99,250,000, of which the Vessel Average
allocable to the Paige is $24,000,000, of which
the Vessel Average allocable to the Anita is
$38,462,500, and of which the Vessel Average allocable to the Koby is $36,787,500.

 

“Investor Rights Agreement”
shall have the meaning ascribed to such term in Section 3.01(h).

 

3

 

“IPO” means the
initial public offering of the Common Stock of Acquiror.

 

“IPO Appraised Value”
means the aggregate of the Vessel Averages for the Transferor Vessels or the
Acquiror Vessels, as the case may be, determined by the Agreed Appraisers in
the Second Appraisal.

 

“Knowledge of Transferor”
means the knowledge of any employee, officer or director of a Transferor or an Affiliate of a Transferor,
such Person having made diligent inquiry as to the representations, warranties
and schedules given by the Transferors to Acquiror in this Agreement.

 

“Liens” means
mortgages, liens (including without limitation maritime liens), security
interests, encumbrances, employment/charter obligations, contracts, leases,
assignments, sub-leases, easements, covenants, rights-of-way or other similar
restrictions of any nature whatsoever.

 

“Lock-Up Agreement”
shall have the meaning ascribed to such term in Section 3.01(h).

 

“Make Whole Amount”
means with respect to Vanguard, an amount in cash equal to $600,000, and with
respect to Colas, an amount in cash equal to $600,000.

 

“Nominee” means
VOC Invest Ltd. a Bahamian company, and the nominee of each Transferor to
receive such Transferor’s allocable portion of the Acquiror Shares.

 

“Outside Charter Date”
means, with respect to the Transferor Vessels owned by Vanguard and Colas, a
date no later than fifty-five (55) days from the date of the commencement of
the last voyage or time charter preceding the IPO.

 

“Outside Delivery Date”
means, with respect to the Transferor Vessels to be transferred by Clipper
Bulk, sixty (60) days after the First Closing Date.

 

“Person” means
an individual, a partnership, a limited liability company, a limited liability
partnership, a corporation, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or any other entity or
organization, domestic or foreign (including a Governmental Entity).

 

“Preferred Stock”
means the preferred stock, par value $0.001 per share, of Acquiror.

 

“Post Closing P/L Statement”
means, a financial income statement prepared in accordance with GAAP describing
the income and voyage expenses for the period beginning on the commencement
date of any uncompleted time charter or voyage under in effect as of the First
Closing Date, if any, and ending on the Charter Completion Date, and any
liabilities for cargo shortage or cargo damage incurred during such period,
certified by a director or representative of the sole member, as the case may
be, of such Transferor; provided,
however, in the case of Vanguard, such financial statement shall be determined
on the basis of the income, voyage expenses and any liabilities for cargo
shortage or damage incurred by the VOC Pool as disponent owner of the
Transferor Vessel to be transferred by Vanguard during such period, and, in the
case

 

4

 

of Colas, such financial statement shall be
determined on the basis of the income, voyage expenses and any liabilities for
cargo shortage or damage incurred by the VOC Bulk Shipping N.V. as disponent
owner of the Transferor Vessel to be transferred by Colas during such period.

 

“Pro Rata Percentage”
means, with respect to each Transferor, the quotient of the Vessel Average of
such Transferor’s relevant Transferor Vessel (utilizing the appraisals of such
vessel that determine the IPO Appraised Value) divided by the IPO Appraised
Value of the Transferor Vessels.

 

“Purchase Price”
shall be equal to the sum of the aggregate IPO Appraised Value of the
Transferor Vessels, payable in a combination of cash and Common Stock as
provided in Sections 2.03(d) and 2.03(e).

 

“Registration Statement”
shall have the meaning ascribed to such term in Section 4.07.

 

“Required Condition”
shall have the meaning ascribed to such term in Section 6.11(a).

 

“Second Appraisal”
shall have the meaning ascribed to such term in Section 6.08.

 

“Second Closing”
shall have the meaning ascribed to such term in Section 2.02.

 

“Second Closing Date”
shall have the meaning ascribed to such term in Section 2.02.

 

“Substitute Election”
shall have the meaning ascribed to such term in Section 6.11.

 

“Substitute Vessel”
shall have the meaning ascribed to such term in Section 6.11.

 

“Sussex Time Charter”
shall have the meaning ascribed to such term in Section 2.01(b).

 

“Tax” or “Taxes” means any Federal, state, local or foreign income,
gross receipts, capital stock, franchise, profits, estimated, payroll,
employment, environmental, withholding, social security, unemployment,
disability, real property, ad valorem/personal property, stamp, excise,
occupation, sales, use, transfer, value added, alternative minimum or other
tax, assessment, duty or similar charge of any kind, including any interest,
penalty or addition thereto, whether disputed or not.

 

“Tax Returns”
means any return, report, information return or other document (including
schedules or any related or supporting information) filed or required to be
filed with any Taxing Authority in connection with the determination,
assessment or collection of any Tax or the administration of any laws,
regulations or administrative requirements relating to any Tax.

 

“Taxing Authority”
means any governmental or quasi-governmental body exercising any taxing authority
or any other authority exercising Tax regulatory authority.

 

“Third Closing”
shall have the meaning ascribed to such term in Section 2.02.

 

5

 

“Transferor Vessel”
shall have the meaning ascribed to such term in the first recital hereto.

 

“Transferors’
Percentage” shall mean the fraction (expressed as a percentage)
where (i) the numerator is twenty five percent (25%) of the IPO Appraised
Value of the Transferor Vessels, and (ii) the denominator is the sum of
twenty five percent (25%) of the IPO Appraised Value of the Transferor Vessels,
plus the IPO Appraised Value of the Acquiror Vessels, plus the aggregate amount
equal to the value of the (i) fuel on board; (ii) unbroached
lubricants; (iii) stores, and (iv) the spare parts in excess of Class requirements
for each Acquiror Vessel determined, in the case of fuel and lubricants by the
purchase price thereof paid by the transferors of the Acquiror Vessels
immediately prior to the First Closing Date, provided,
however, that in the event that Acquiror purchases any other vessels
prior to the First Closing Date, the denominator shall be increased by the
appraised value (to be determined by the Agreed Appraisers using the Vessel
Average methodology) of any such vessels to the extent paid for through the
issuance of Common Stock of Acquiror.

 

“Vanguard Head Charter”
shall have the meaning ascribed to such term in Section 3.01(n).

 

 “Vanguard Novation Agreement” shall have the meaning ascribed
to such term in Section 3.01(n).

 

 “Vessel Assets” means whether on board or
ashore, (i) all engines, boilers, machinery, masts, boats, anchors,
cables, chains, tackle, apparel, furniture, capstans, outfit, tools, pumps,
pumping and other equipment, gear, lashings, furnishings, appliances, fittings
and other personal property appertaining or belonging to each Transferor Vessel
and all spares and replacement parts, in each case which are required to
maintain such Transferor Vessel’s class certification, excluding hired or leased items listed on Schedule II hereto, (ii) any propellers and
propeller shafts appertaining or belonging to each Transferor Vessel, (iii) all
plans, drawings and other technical documents, logs, manuals, instruction books
and classification records, including special surveys, relating to each such
Transferor Vessel, provided, each
Transferor shall be required to maintain spares required to maintain such
Transferor Vessel’s class certification, but shall not otherwise be required to
replace spares used in the ordinary course of business.

 

“Vessel Average” means, with respect to a Transferor Vessel
or Acquiror Vessel, as the case may be, the amount determined pursuant to the
following calculation: (X +Y + (Z x 2))/4, where “X” equals the highest
appraised value, “Y” equals the lowest appraised value and “Z” equals the
middle appraised value, in each case as determined by the Agreed Appraisers.

 

“Vessel Delivery Date” means, with respect to each Transferor
Vessel, the date on which such Transferor Vessel is obligated hereunder to be
delivered by its Transferor Owner, which shall be (i) with respect to the
Transferor Vessels owned by each of Vanguard and Colas, the First Closing Date,
and with respect to the Transferor Vessels to be transferred by Clipper Bulk,
the date Clipper Bulk advises each such delivery shall take place, which in any
event shall be no later than the Outside Delivery Date for each such vessel.

 

“Vessel Personal
Property” means, except for Vessel Assets, all tangible personal
property owned by each Transferor and stored in and used in connection with the
ownership and operation of a Transferor Vessel, including, without limitation, (i) fuel
on board; (ii) unbroached

 

6

 

lubricants; (iii) stores, and (iv) the
spare parts listed on Schedule III
hereto, provided, such spare parts remain as in excess of a vessel’s Class requirements
and are contained in the VPP Schedule.

 

“Vessel Personal
Property Payment” means, with respect to each Transferor Vessel, the
aggregate value of the Vessel Personal Property, as determined by a third party
auditor appointed by Acquiror.

 

“Vessel
Warranties” means, with respect to each Transferor Vessel, all
assignable warranties and guaranties, if any, issued in connection with such
Transferor Vessel or such Transferor Vessel’s Vessel Assets or Vessel Personal
Property.

 

“VOC Pool” means
the VOC Ultra Handymax Pool.

 

 “VPP Recalculation” shall have the meaning ascribed to such
term in Section 2.03(f).

 

“VPP Schedule”
shall have the meaning ascribed to such term in Section 3.01(i).

 

“Wexford” means Wexford Capital LLC.

 

1.02.        Defined Terms.  (a) 
Unless otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP as in effect from time to time.

 

(b)           All references in this Agreement to “Articles”,
“Sections” and other subdivisions are to the designated Articles, Sections and
other subdivisions of this Agreement. 
The words “herein”, “hereof” and “hereunder” and other words of similar
import refer to this Agreement and not to any particular Article, Section or
other subdivision.

 

(c)           In this Agreement, in the computation of
periods of time from a specified date to a later specified date, the word “from”
means “from and including” and the words “to” and “until” each mean “to but
excluding”.

 

(d)           All references to “including” in this
Agreement shall mean including without limitation.

 

(e)           A reference to a law in this Agreement
includes any amendment or modification to such law and any rules or
regulations issued thereunder.

 

(f)            A reference to a Person in this Agreement
includes its successors and permitted assigns (if any).

 

(g)           Any reference to “certified by a Director” or
“certified by such Transferor’s director, or authorized representative of its
sole member, as the case may be” or words to that effect shall mean the
certification of a real person and not a corporate entity.

 

7

 

ARTICLE II

 

PURCHASE AND SALE OF ASSETS

 

2.01.        Purchase and Sale of Assets.  (a) 
At the First Closing, upon the terms and subject to the conditions set forth in
this Agreement, each of Vanguard and Colas shall sell, assign, convey and
transfer to Acquiror or its nominee, and Acquiror or its nominee shall acquire
from such Transferor, such Transferor’s right, title and interest in and to
such Transferor’s Assets, in each case, except as provided herein, free and
clear of all Liens.

 

(b)           On the First Closing Date, upon the terms and
subject to the conditions set forth in this Agreement, Clipper Bulk shall be
unconditionally obligated to either (i)(x) deliver each of its Transferor Vessels
to Acquiror or its nominee no later than the Outside Delivery Date, in which
case Clipper Bulk shall exercise its option to purchase each of that certain
Transferor Vessel currently subject to that certain Bareboat Charter, dated June 5,
2001 (the “Gem Bareboat Charter”) and that certain
Transferor Vessel currently subject to that certain Bareboat Charter, dated June 5,
2001 (the “Glory Bareboat Charter”), immediately on
the date that Clipper Bulk obtains the option to purchase both Transferor
Vessels for delivery to Clipper Bulk on or before the Outside Delivery Date,
(y) nominate Clipper Sussex Co. Ltd. (“Clipper Nominee”)
as the entity to take title to each of the Transferor Vessel currently subject
to the Gem Bareboat Charter and the Transferor
Vessel currently subject to the Glory Bareboat Charter,
and (z) upon delivery of each such Transferor Vessel to Clipper Nominee, cause
Clipper Nominee to immediately sell, assign, convey and transfer Clipper Bulk’s
Assets with respect to each such Transferor Vessel to Acquiror or its nominee;
or (ii) deliver to Acquiror, on or before the Outside Delivery Date, a
Substitute Election pursuant to Section 6.11, requiring a Substitute
Vessel or Substitute Vessels to be delivered to Acquiror or its nominee on or
before the one hundred and twentieth (120th) day following the First
Closing Date.

 

(c)           The parties agree that, except for the Vessel
Warranties, Acquiror shall not be the successor to any Transferor and that
Acquiror does not agree to assume or become liable to pay, perform, satisfy or
discharge any obligation or liability of any Transferor whatsoever.

 

(d)           Except to the extent specifically provided
herein, Acquiror shall not be responsible for, nor is it assuming, and each
Transferor shall retain, pay, perform and discharge, any and all liabilities
and obligations (i) relating to or arising from Accounts Payable (as
defined below) of such Transferor, (ii) relating to or arising from
Accrued Liabilities (as defined below) of such Transferor, (iii) relating
to or arising from the employment or termination of employment of any Person by
such Transferor before, on or after the relevant Closing Date, (iv) relating
to or arising from the operation or ownership of such Transferor’s Transferor
Vessel on or prior to such Transferor Vessel’s Vessel Delivery Date, (v) for
Taxes relating to or arising from the operation or ownership of such Transferor
Vessel on or prior to such Vessel Delivery Date, (vi) relating to or
arising out of this Agreement, each Bill of Sale or related instruments issued
in connection with this Agreement or otherwise in connection with the
transactions contemplated by this Agreement, and (vii) any other
obligation or liability of such Transferor whatsoever.

 

“Accounts Payable”
and “Accrued Liabilities” mean
with respect to each Transferor, the accounts payable of such Transferor and
the accrued liabilities of such Transferor relating to operation or ownership
of such Transferor’s Assets, in each case as of the relevant Closing Date.

 

8

 

(e)           The Transferors and Acquiror agree to
allocate the Purchase Price among the Assets (excluding Vessel Personal
Property) and Vessel Personal Property, in amounts equal to the actual amount
paid by Acquiror to each Transferor hereunder for such Assets (excluding Vessel
Personal Property) and Vessel Personal Property.  The parties agree to be bound by such
allocation for all purposes, including for purposes of all Federal, state, local
and foreign Tax Returns filed by them subsequent to the relevant Closing Date,
the determination by each Transferor of taxable gain or loss on the sale of the
Assets and the determination by Acquiror of its Tax basis in the Assets.

 

2.02.        The Closing.  The
closings under this Agreement shall take place in at least two and no more than
three parts, the first closing (the “First  Closing”) of the sale of the Transferor
Vessels owned by Vanguard and Colas to Acquiror or its nominees, will occur on
a date mutually agreed to by the parties and shall take place no later than the
closing date of the IPO and listing of Acquiror’s shares on a nationally
recognized exchange in the United States (the “First
Closing Date”).  The second
closing (the “Second Closing”) and the third
closing (the “Third Closing”), with respect to
the sale of each Transferor Vessel to be transferred by Clipper Bulk hereunder,
shall occur on a date as soon as practicable following the delivery of each
such Transferor Vessel to Clipper Nominee and no later than the Outside Delivery
Date (the “Second Closing Date” or the “Third Closing Date”, as the case may be).  In the event that Clipper Bulk does not
deliver both of its Transferor Vessels on or before the Outside Delivery Date,
the closing, if any, with respect to the sale of a Substitute Vessel, shall
occur on a date as soon as practicable following the Outside Delivery Date, and
no later than one hundred twenty days (120) following the First Closing Date
(in such case, such closing shall be deemed the Second Closing Date or the Third
Closing Date, as the case may be).  The
date and time of the First Closing, the Second Closing and the Third Closing,
as the case may be, are each herein referred to as a “Closing Date”.  On each Closing Date, Acquiror and each
Transferor shall make such deliveries as are required by and in accordance with
this Article II and Article III hereof.

 

2.03.        Closing
Date Deliveries.  The following deliveries shall take place on
each Closing Date with respect to the relevant Transferors.  To the extent expressly permitted by each
subcharterer of each Transferor Vessel transferred hereunder by Vanguard and
Colas, Acquiror or
its nominees intend to reregister such Transferor Vessels under the laws of the
Republic of the Marshall Islands; provided, however, absent any such subcharterer’s permission, Acquiror
or its nominee shall reregister the relevant Transferor Vessel under the
Bahamian flag.  It is the intent of
Acquiror or its nominee to reregister the Transferor Vessels to be transferred
by Clipper Bulk under the laws of the Republic of the Marshall Islands, in
which case each such Transferor Vessel shall not be reregistered in any
jurisdiction prior to delivery to Acquiror or its nominee hereunder, however, Acquiror or its nominee may elect to reregister the Transferor
Vessel to be transferred by Clipper Bulk under the Liberian flag, upon written notice to
Clipper Bulk not less than ten (10) days prior to the Second Closing or
the Third Closing, as the case may be, whereupon the relevant nominee shall
reregister such Transferor Vessel under the Liberian flag immediately prior to
delivery to Acquiror or its nominee hereunder.

 

(a)           Each Transferor shall deliver to Acquiror or
its nominee for its relevant Transferor Vessel or Transferor Vessels:

 

(i)            Four (4) original
Bills of Sale, notarized, transferring title of such Transferor’s Transferor
Vessel, free from all Liens, in form reasonably acceptable to

 

9

 

Acquiror and acceptable for registration under the laws of the Republic
of the Marshall Islands or the Bahamas, as the case may be, and in the event
that the Transferor Vessels to be transferred by Clipper Bulk are registered
under the Republic of
the Marshall Islands, in addition to the foregoing, four (4) original
Bills of Sale, notarized, transferring title of such Transferor Vessel to
Clipper Nominee free from all Liens, in form reasonably acceptable to Acquiror
and acceptable for registration under the laws of the Republic of the Marshall
Islands.

 

(ii)           One (1) original
certified copy of, in respect of Vanguard, its Certificate of Formation and
Limited Liability Company Agreement, and in respect of each of Colas and
Clipper Bulk, their respective Memorandum and Articles of Association.

 

(iii)          One (1) original copy of the Meeting
Minutes of the Board of Directors or equivalent body, and as applicable, equity
holders, of such Transferor (certified by its Secretary), notarized,
authorizing the sale of such Transferor’s Transferor Vessel, the related Vessel
Assets, the related Vessel Personal Property, and the related Vessel
Warranties, if any, and authorizing the execution and delivery of and
performance by such Transferor of its obligations under, this Agreement, the
relevant Bill of Sale, the Protocol of Delivery and
all other documents to be delivered under this Agreement, or otherwise
necessary or convenient for the purpose of concluding the sale.

 

(iv)          Power of Attorney (where required), notarized
and apostilled, of such Transferor in favor of the party or parties signing
this Agreement, the relevant Bill of Sale and any other documents required to
be delivered under this Agreement on behalf of such Transferor.

 

(v)           Two (2) originals of a Protocol of
Delivery and Acceptance with respect to such Transferor Vessel, in form
satisfactory to Acquiror, which shall be signed on behalf of each of the
Transferor and the Acquiror or its nominee.

 

(vi)          Commercial Invoice describing the Transferor
Vessel, the date of this Agreement, the Vessel Delivery Date and time, the
allocable portion of the Purchase Price and the relevant Vessel Personal
Property Payment (in duplicate with supporting invoices).

 

(vii)         One (1) certificate issued by the
relevant Registrar of Ship’s Registry dated the
Vessel Delivery Date confirming that the Transferor Vessel is owned by such
Transferor and that it is free from registered Liens and other registered
encumbrances, and in the event that the Transferor Vessels to be transferred by
Clipper Bulk are registered under the Republic of the Marshall Islands, in lieu
of the foregoing, a certificate issued by the Liberian Registry dated the
Vessel Delivery Date, in each case confirming that such Transferor Vessel is
owned by the entity that transferred ownership of such Transferor Vessel to
Clipper Nominee and that it is free from registered Liens and other registered
encumbrances.

 

(viii)        One (1) certified photocopy of such
Transferor Vessel’s Certificate of Registry (evidencing ownership of the
Transferor Vessel by the Transferor), International Tonnage Certificate
(evidencing, inter alia, such Transferor
Vessel’s GT, NT and BHP), Safety Radio Certificate, Safety Construction
Certificate, Safety Equipment Certificate

 

10

 

and Loadline Certificate, and in the event that the
Transferor Vessels to be transferred by Clipper Bulk are registered under the
Republic of the Marshall Islands, in lieu of the foregoing, a certificate
issued by the Liberian Registry (evidencing ownership of the relevant
Transferor Vessel by the entity that transferred ownership of the relevant
Transferor Vessel to Clipper Nominee), International Tonnage Certificate
(evidencing, inter alia, such Transferor
Vessel’s GT, NT and BHP), Safety Radio Certificate, Safety Construction
Certificate, Safety Equipment Certificate and Loadline Certificate.

 

(ix)           An original Confirmation of Class Certificate,
issued by the relevant classification society and dated not more than three (3) Business
Days prior to the relevant Vessel Delivery Date, stating that such Transferor
Vessel is in class with no outstanding recommendations affecting class (unless
otherwise mutually agreed).

 

(x)            One (1) original Classification Society
Statement or Affidavit, dated not more than three (3) Business Days prior
to the relevant Vessel Delivery Date, such statement or affidavit must contain:

 

(a)  A statement that
there are no existing conditions, recommendations and deficiencies against the
Transferor Vessel’s classification outstanding as of the date of such
statement.

 

(b)  A list of the
Statutory Certificates which the Transferor Vessel’s Classification Society is
prepared to issue on behalf of the Republic of the Marshall Islands.

 

(c)  The status of all
current relevant Statutory Surveys, setting forth the dates of completion of
each.

 

(d)  A statement that
there are no apparent reasons known to the Society, that such Transferor Vessel
is not fit to proceed to sea.

 

(xi)           In the event that the Transferor Vessel is to
be registered under a new flag, one (1) original Letter of Undertaking
of Transferor in form satisfactory to Acquiror to delete the Transferor Vessel
from the current Ship’s Registry and to deliver to Acquiror a Certificate of
Deletion within four (4) weeks after the
relevant Vessel Delivery Date. 
Such Certificate of Deletion is to provide that the relevant Transferor
Vessel was free of Liens and other registered encumbrances on the date of such
certificate.

 

(xii)          One (1) Certificate of Good Standing of
the Transferor issued as of a recent date prior to the Closing Date.

 

(xiii)         In the event that the Transferor Vessel is to
be registered under a new flag, an original letter of undertaking of Transferor
in form reasonably satisfactory to Acquiror to request, without further
responsibility, and in the case of the Transferor Vessels to be transferred by
Clipper Bulk, to request the relevant entity that transferred ownership of each
such vessel to Clipper Nominee to request the current Ship’s Registry to
transmit a certified copy of such Transferor Vessel’s Continuous Synopsis
Record (CSR) to the new Ship’s Registry within ninety (90) days after the time
of deletion of the Transferor Vessel

 

11

 

from the current Ship’s Registry, in accordance with
the procedures of each Transferor Vessel’s current Ship’s Registry.

 

(xiv)        Certificate of Incumbency of officers and
directors of such Transferor, or in the case of Vanguard, authorized
representatives of its sole member;

 

(xv)         A Certificate from a director, or in the case
of Vanguard, the authorized representatives of its sole member, that the
representations and warranties contained in this Agreement are true and correct
as of such Vessel Delivery Date;

 

(xvi)        In the event that the Transferor Vessels to
be transferred by Clipper Bulk are to be registered in the Republic of Marshall
Islands, Clipper Bulk and Clipper Nominee shall deliver an affidavit in form
reasonably satisfactory to the Republic of Marshall Islands Registry confirming
that each such party has not reregistered such Transferor Vessel under any
other flag, and such other matters as may be required by such registry.

 

(xvii)       Such other documents as are customarily
provided in connection with the sale and purchase of similar vessels and as may
be reasonably requested by Acquiror. 
Acquiror shall advise Transferor of such request not less than ten days
prior to the relevant Vessel Delivery Date.

 

(xviii)      In the event that Clipper Bulk transfers a
Substitute Vessel hereunder, Clipper Bulk shall deliver all of the above documents
required and any other documents required to register such Substitute Vessel in
the Republic of the Marshall Islands or the Bahamas.

 

Each
Transferor Vessel shall be delivered and taken over by Acquiror or its nominee
where she is on the relevant Vessel Delivery Date.  Each Transferor Vessel shall be delivered to
the Acquiror or its nominee (a) in the same condition as when inspected
pursuant hereto, fair wear and tear excepted, and (b) with her present
class maintained, free of recommendations, free of average damage affecting
class, and with her classification certificates and national certificates, as
well as all other certificates the Transferor Vessel had at the time of
inspection hereunder, valid and unextended without recommendation by class or
the relevant authorities at the time of delivery.  SUBJECT TO THE IMMEDIATELY PRECEDING SENTENCE
AND THE REPRESENTATIONS, WARRANTIES AND COVENANTS OF EACH TRANSFEROR CONTAINED
HEREIN EACH TRANSFEROR VESSEL IS SOLD “AS IS, WHERE IS” IN WHATEVER CONDITION SHE
MAY BE WITHOUT ANY ADDITIONAL REPRESENTATION, AGREEMENT OR WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED, AS TO PHYSICAL CONDITION, CLASSIFICATION,
EQUIPMENT, SEAWORTHINESS, MERCHANTABILITY OR FITNESS FOR ANY PURPOSE
WHATSOEVER.

 

(b)           Notwithstanding the preceding subparagraph,
as of the First Closing Date, Acquiror acknowledges and agrees that the
existence of any of the following circumstances shall not be deemed a breach of
the above required deliveries:

 

12

 

(i)            the Transferor Vessel transferred by Vanguard
shall be (x) entered into the VOC Pool, and (y) subject to a Technical
Management Agreement with JP Samartzis Maritime Enterprises Co. S.A. and (z)
subject to the Vanguard Head Charter; and

 

(ii)           the Transferor Vessel transferred by Colas
shall be subject to (x) a Time Charter between Colas and VOC Bulk Shipping N.V.
(the “Colas Time Charter”), provided, such time charter shall terminate on the Charter
Completion Date which in any event shall be no later than the Outside Charter
Date, and (y) a subject to a Technical Management Agreement with Dockendale
Shipping Company Limited.

 

(c)           On the First Closing Date, Clipper Bulk shall
take all action required to purchase each Transferor Vessel to be transferred
by Clipper Bulk from the relevant owner, and nominate Clipper Nominee, to take
title to the applicable Transferor Vessel.

 

(d)           On the First Closing Date, with respect to
each of Vanguard and Colas, (i) as payment of the cash portion of the
Purchase Price payable to each such Transferor, Acquiror shall deliver to each
such Transferor an amount in cash equal to the product of seventy-five percent
(75%) of the IPO Appraised Value of the Transferor Vessels multiplied by such
Transferor’s Pro Rata Percentage, less, the Make Whole Amount; (ii) as
payment of the stock portion of the Purchase Price payable to each such
Transferor, Acquiror shall deliver to Nominee certificates representing the
Acquiror Shares allocable to each of Colas and Vanguard based on their respective
Pro Rata Percentage in the name of Nominee; (iii) as payment of the Vessel
Personal Property Payment payable to each such Transferor, Acquiror shall
deliver to each such Transferor, an amount in cash equal to ninety percent
(90%) of the amount determined by Acquiror Representatives pursuant to Section 3.01(p),
subject to adjustment pursuant to Section 2.03(f) hereof.

 

(e)           On the Second Closing Date and the Third
Closing Date, as the case may be, with respect to Clipper Bulk, (i) as
payment of the cash portion of the Purchase Price payable to such Transferor,
Acquiror shall deliver to Clipper Bulk an amount in cash equal to the product
of seventy-five percent (75%) of the IPO Appraised Value of the Transferor
Vessels multiplied by such Transferor’s Pro Rata Percentage, allocable to the
Transferor Vessel to be transferred as of such date; (ii) as payment of
the stock portion of the Purchase Price payable to such Transferor, Acquiror
shall deliver certificates representing the Acquiror Shares allocable to such
Transferor based on its Pro Rata Percentage, allocable to the Transferor Vessel
to be transferred as of such date, in the name of Nominee; and (iii) as
payment of each Vessel Personal Property Payment payable to such Transferor,
Acquiror shall deliver to such Transferor, an amount in cash equal to ninety
percent (90%) of the amount determined by Acquiror Representatives pursuant to Section 3.01(p),
subject to adjustment pursuant to Section 2.03(f) hereto.

 

(f)            With respect to (i) the Transferor
Vessel’s transferred hereunder by Vanguard and Colas, within thirty (30) days
of the relevant Charter Completion Date, and (ii) the Transferor Vessels
transferred hereunder by Clipper Bulk, within thirty (30) days of the Second
Closing Date and the Third Closing Date, Acquiror shall cause a third party
auditor to recalculate each Vessel Personal Property Payment made pursuant to Section 2.03(d)(iii) or
Section 2.03(e)(iii), as the case may be, based upon the actual Vessel
Personal Property delivered with each Transferor Vessel.  Acquiror shall deliver the results of each
such audit to the relevant Transferor (the “VPP Recalculation”).  The results of the VPP Recalculation shall be
final, binding and conclusive upon each party unless the relevant Transferor
objects to the VPP

 

13

 

Recalculation in writing to Acquiror within ten (10) days of such
Transferor’s receipt thereof (a “Dispute Notice”).  If there is no dispute, (i) and the
amount contained in the VPP Recalculation is greater than the amount paid
pursuant to Section 2.03(d)(iii) or Section 2.03(e)(iii), as the
case may be, within fifteen (15) days of Acquiror’s delivery of the VPP
Recalculation to such Transferor, Acquiror shall deliver an amount in cash
equal to the difference between the amount contained in the VPP Recalculation
and the amount previously paid to such Transferor, or (ii) and the amount
contained in the VPP Recalculation is less than the amount paid pursuant to Section 2.03(d)(iii) or
Section 2.03(e)(iii), as the case may be, within fifteen (15) days of
Acquiror’s delivery of the VPP Recalculation to such Transferor, such
Transferor shall deliver an amount in cash equal to the difference between the
amount previously paid to such Transferor and the amount contained in the VPP
Recalculation.  If a Transferor delivers
a Dispute Notice, such Transferor and Acquiror shall promptly meet in an
attempt to resolve the dispute in good faith. 
If a dispute cannot be resolved within ten (10) days of Acquiror’s receipt
of same, the parties shall submit the VPP Recalculation, the Dispute Notice and
Acquiror’s written response to such Dispute Notice to a mutually agreed third
party capable of evaluating Vessel Personal Property within thirty (30) days of
its appointment.  Such third party’s
resolution of the dispute shall be final, binding and conclusive on the
parties.

 

(g)           Each of Vanguard and Colas, within thirty
(30) days of its Transferor Vessel’s Charter Completion Date, shall provide
Acquiror with a written statement of the actual expenses incurred by such
Transferor on behalf of Acquiror or its nominee, pursuant to the relevant
technical management agreement, as novated, in the operation of the relevant
Transferor Vessel from the First Closing Date to such Transferor Vessel’s
Charter Completion Date, certified by a director or representative of the sole
member, as the case may be, of such Transferor. 
Within ten (10) days of the delivery of such written certified
statement, Acquiror or its nominee shall pay the relevant Transferor an amount
in cash equal to the sum of such incurred expenses.  During such ten (10) day period, the
relevant Transferor shall provide supporting documentation for the written
statement, as reasonably requested by Acquiror or its nominee.

 

(h)           Each of Vanguard and Colas, within thirty
(30) days of each such Transferor’s Transferor Vessel’s Charter Completion
Date, shall deliver a Post Closing P/L Statement to Acquiror.  Within ten (10) days of the delivery of
such Post Closing P/L Statement, in the event that the income, less voyage
expenses (including port expenses, port agency fees, towage, despatch,
charterer’s liability insurance and bunker costs), and less any liabilities for
cargo shortage or cargo damage (the “net profit”) in
such Post-Closing P/L Statement allocable to the period commencing on the First
Closing Date and ending on the relevant Charter Completion Date, on a pro rata
basis by the number of days during the period covered by the Post Closing P/L
Statement, is (i) less than the Make Whole Amount, then Acquiror or its
nominee shall pay the relevant Transferor an amount in cash equal to the
difference between the Make Whole Amount and such net profit, up to the Make
Whole Amount; or (ii) greater than the Make Whole Amount, then the
relevant Transferor shall pay Acquiror or its nominee an amount in cash equal
to the difference between such net profit and the Make Whole Amount.  During such ten (10) day period, the
relevant Transferor shall provide supporting documentation for the Post Closing
P/L Statement, as reasonably requested by Acquiror or its nominee.

 

14

 

ARTICLE III

 

CONDITIONS TO CLOSING

 

3.01.        Conditions to Acquiror’s
Obligation.  The obligation of Acquiror to make the
deliveries required by Section 2.03(d) or Section 2.03(e), as
the case may be, is subject to the satisfaction (or waiver by Acquiror) of the
following conditions as of the relevant Closing Date:

 

(a)           The representations and warranties of each
Transferor made in this Agreement shall be true and correct in all respects, as
of the date hereof and at and as of the relevant Closing Date as though then
made, except to the extent such representations and warranties expressly relate
to an earlier date (in which case such representations and warranties shall be
true and correct in all respects on and as of such earlier date).

 

(b)           Each Transferor shall have performed or
complied in all respects with all of the covenants and agreements required to
be performed or complied with by such Transferor under this Agreement at or
prior to the relevant Closing Date.

 

(c)           All consents or other actions that are
required in connection with the transactions contemplated hereunder (including
without limitation the consents set forth on Schedule 4.03(b) attached
hereto) or with respect to any license, franchise, permit or other similar
authorization held by each Transferor shall have been obtained or taken.

 

(d)           All permits, consents, approvals, licenses,
orders or authorizations of, and registrations, declarations and filings with,
any Governmental Entity that are required to be obtained or made in connection
with the execution, delivery or performance of this Agreement by each
Transferor or Acquiror or the consummation by each Transferor or Acquiror of
any of the transactions contemplated hereby shall have been duly obtained or
made.

 

(e)           No action or proceeding by or before any
Governmental Entity or any other Person shall be pending or threatened (i) challenging
or seeking to restrain or prohibit the purchase and sale of any of the Assets
or any of the other transactions contemplated by this Agreement or seeking to
obtain damages from Acquiror (or any of its Affiliates) in connection with the
purchase and sale of the Assets or any of the other transactions contemplated
by this Agreement, (ii) seeking to prohibit or limit the ownership or
operation by Acquiror (or any of its Affiliates) of, or to compel Acquiror (or
any of its Affiliates) to dispose of or hold separate, any portion of the
business or assets of Acquiror (or any of its Affiliates), in each case as a
result of the purchase and sale of the Assets or any of the other transactions
contemplated by this Agreement, or (iii) seeking to impose limitations on
the ability of Acquiror (or any of its Affiliates) to acquire or hold, or
exercise full rights of ownership of the Assets.

 

(f)            No statute, rule, regulation, executive
order, decree, temporary restraining order, preliminary injunction, permanent
injunction or other order enacted, entered, promulgated, enforced or issued by
any Governmental Entity or other legal restraint or prohibition preventing the
purchase and sale of the Assets shall be in effect.

 

(g)           Each of Vanguard and Colas shall have caused (i) the
termination of the technical management agreement relating to each such
Transferor’s Transferor Vessel, to be effective as of its Charter Completion
Date, and (ii) the termination of any commercial

 

15

 

management agreement (other than the Colas
Time Charter and the Vanguard Head Charter) relating to each such Transferor’s
Transferor Vessel, to be effective as of the First Closing Date; and Clipper
Bulk shall have caused the termination of any technical management agreement or
commercial management agreement to which it is a party relating to its
Transferor Vessels, each as of the Second Closing Date or the Third Closing
Date, as the case may be.

 

(h)           Each Transferor shall have delivered to
Acquiror each of the following:

 

(i)            a certificate of a director, or an authorized
representative of its sole member, as the case may be, substantially in the
form of Exhibit A attached hereto, dated as of the relevant Closing
Date, stating that the preconditions specified in subsections (a) through (g) of
this Section 3.01 inclusive, except as they expressly relate to Acquiror,
have been satisfied;

 

(ii)           copies of all third party and governmental
consents required by subsections (c) and (d) above;

 

(iii)          an Investor Rights Agreement, dated as of the
First Closing Date, substantially in the form of Exhibit B attached
hereto, duly executed by such Transferor (the “Investor
Rights Agreement”);

 

(iv)          a Lock-Up Agreement, dated as of the First
Closing Date, substantially in the form of Exhibit C attached
hereto, duly executed by such Transferor (the “Lock-Up
Agreement”); and

 

(v)           all other documents that Acquiror may
reasonably request relating to the purchase of the Assets, the existence of
such Transferor and the authority and legal capacity of such Transferor to
execute and deliver and perform its obligations under this Agreement, in form
and substance reasonably satisfactory to Acquiror.

 

(i)            No later than
seven (7) days prior to the relevant Closing Date, the relevant Transferor
shall deliver a schedule, certified by such Transferor’s director, or
authorized representative of its sole member, as the case may be, describing
the Vessel Personal Property that such Transferor in good faith believes shall
be on board any such Transferor’s Transferor Vessel, as of the relevant Vessel
Delivery Date (the “VPP Schedule”),
provided, in no event shall a VPP Schedule include
Vessel Personal Property not on board a Transferor Vessel as of the relevant
Closing Date.

 

(j)            Each Guarantor
shall have delivered an Indemnification Agreement for its relevant Transferor,
dated as of the relevant Closing Date, substantially in the form of Exhibit D
attached hereto, duly executed by such party (the “Indemnification
Agreement”).

 

(k)           Acquiror shall
have entered into a Commercial Management Agreement, substantially in the form
of Exhibit E attached hereto.

 

(l)            Acquiror shall
have entered into a Technical Management Agreement, for each Transferor Vessel,
to be effective, with respect to the Transferor Vessel to be transferred by (x)
Vanguard and Colas, as of the Charter Completion Date, if applicable, otherwise
the First

 

16

 

Closing Date, and (y)
Clipper Bulk, as of the Second Closing Date or Third Closing Date, as the case
may be.

 

(m)          Nominee shall
have executed and delivered to Acquiror each of the Investor Rights Agreement
and a Lock-up Agreement.

 

(n)           Vanguard shall
have delivered, with respect to the Transferor Vessel transferred by Vanguard,
a novation agreement for its technical manager, dated as of the First Closing
Date, substantially in the form of Exhibit F attached hereto, duly
executed by such Transferor and such manager (the “Vanguard
Novation Agreement”); and a head time
charter, dated as of the First Closing Date, substantially in the form of Exhibit G
attached hereto, duly executed by Vanguard (the “Vanguard
Head Charter”).

 

(o)           Colas shall
have delivered, with respect to the Transferor Vessel to be transferred by
Colas, (x) a novation agreement for the Colas Time Charter, dated as of the
First Closing Date, substantially in the form of Exhibit H attached
hereto, duly executed by such Transferor and VOC Bulk Shipping N.V. (the “Colas Charter Novation Agreement”), and (y) a novation
agreement for its technical manager, dated as of the First Closing Date,
substantially in the form of Exhibit I attached hereto, duly
executed by such Transferor and such manager (the “Colas TM
Novation Agreement”).

 

(p)           Receipt by
Acquiror of a report from its Acquiror Representatives with respect to each
Transferor Vessel transferred as of such Closing Date, assessing the value of
the Vessel Personal Property contained on each VPP Schedule; provided, however, the
value of bunkers and oils shall be determined by such Transferor’s purchase
price of bunkers and oils immediately prior to the relevant Closing Date.

 

(q)           The delivery of
any vessel transferred hereunder by Clipper Bulk shall be made “in port”, at a
port notified to Acquiror by Clipper Bulk, which in any event shall be
acceptable to such vessel’s Classification Society for purposes of inspection
and drydocking.

 

(r)            Each Transferor
Vessel transferred as of such Closing Date shall be in the same condition as
when inspected by Acquiror pursuant hereto, fair wear and tear excepted.

 

3.02.        Conditions to Each Transferor’s
Obligations.  The obligations of each Transferor to sell
and deliver its right, title and interest in and to its Assets to Acquiror or
its nominees is subject to the satisfaction (or waiver by such Transferor) of
the following conditions as of the relevant Closing Date:

 

(a)           The representations and warranties of
Acquiror made in this Agreement shall be true and correct in all respects as of
the date hereof and at and as of such Closing Date as though then made.

 

(b)           Acquiror shall have performed or complied in
all respects with all of the covenants and agreements required to be performed
or complied with by it under this Agreement at or prior to the Closing.

 

17

 

(c)           All consents or other actions that are
required in connection with the transactions contemplated hereunder or with
respect to any license, franchise, permit or other similar authorization held
by Acquiror shall have been obtained or taken.

 

(d)           All permits, consents, approvals, licenses,
orders or authorizations of, and registrations, declarations and filings with,
any Governmental Entity that are set forth on Schedule 5.07 or that
are required to be obtained or made in connection with the execution, delivery
or performance of this Agreement by such Transferor or Acquiror or the
consummation by such Transferor or Acquiror of any of the transactions
contemplated hereby shall have been duly obtained or made.

 

(e)           No action or proceeding by or before any
Governmental Entity shall be pending or threatened challenging or seeking to
restrain or prohibit the purchase and sale of any of the Assets or any of the
transactions contemplated by this Agreement or seeking to obtain damages from
such Transferor in connection with the purchase and sale of the Assets or any
of the other transactions contemplated by this Agreement.

 

(f)            No statute, rule, regulation, executive
order, decree, temporary restraining order, preliminary injunction, permanent
injunction or other order enacted, entered, promulgated, enforced or issued by
any Governmental Entity or other legal restraint or prohibition preventing the
purchase and sale of any of the Assets shall be in effect.

 

(g)           Acquiror shall have delivered to such
Transferor each of the following:

 

(i)            the Investor Rights Agreement, duly executed
by Acquiror and Wexford;

 

(ii)           a Lock-up Agreement, duly executed by
Acquiror;

 

(iii)          with respect to the Transferor Vessel
transferred by Vanguard, the Vanguard Novation Agreement and the Vanguard Head
Charter, duly executed by Acquiror or its nominee; and

 

(iv)          with respect to the Transferor Vessel
transferred by Colas, the Colas Charter Novation Agreement and the Colas TM
Novation Agreement, each duly executed by Acquiror or its nominee.

 

(h)           Entities controlled by Wexford shall have
contributed title to the Acquiror Vessels to the Acquiror or wholly-owned
subsidiaries of the Acquiror on or prior to the First Closing Date in
consideration solely of shares of Common Stock of the Acquiror; the aggregate
valuation of such Acquiror Vessels shall be equal to the IPO Appraised Value of
such vessels; each of the Acquiror Vessels shall be free of all Liens as of the
First Closing Date, except for technical management agreements, crew employment
agreements and time charters in effect with respect to each such vessel, and in
the case of commercial management agreements with respect to each such vessel,
such agreements shall terminate as of the First Closing Date, unless any
Acquiror Vessel is on a voyage as of such date, whereupon any such agreements
shall terminate upon the completion of the then current voyage and such
Acquiror Vessel is free of cargo and safely afloat, provided,
if, at the port in which the relevant voyage terminates it is customary for
vessels of like size and type to the relevant Acquiror Vessel to lie safely at
a safe anchorage, berth or place, then such condition shall be deemed “safely
afloat”; Wexford shall have delivered

 

18

 

an
Indemnification Agreement to the Acquiror, substantially in the form of Exhibit D
attached hereto; and on or prior to the First Closing Date, the Acquiror shall
have delivered to the Transferors copies of the documents executed by the
Acquiror, any relevant nominee of the Acquiror, Wexford, and any relevant
entities controlled by Wexford effecting the foregoing.

 

(i)            If, as a result of the Second Appraisal, the
IPO Appraised Value of the Transferor Vessels is less than the Initial
Appraised Value of the Transferor Vessels, Acquiror shall have agreed, for
purposes of determining the Purchase Price hereunder, to deem the IPO Appraised
Value of such vessels to equal the Initial Appraised Value of such vessels.

 

(j)            The closing of the IPO.

 

ARTICLE IV 

 

TRANSFEROR REPRESENTATIONS AND WARRANTIES 

 

Except as otherwise provided herein, each
Transferor, and in certain instances indicated below, Nominee, severally
represents and warrants as to itself to Acquiror as follows:

 

4.01.        Organization and Power.  Such
Transferor or Nominee is a limited liability company or corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation and has all requisite corporate or company power
and authority to enter into this Agreement and perform its obligations
hereunder and to consummate the transactions contemplated hereby.

 

4.02.        Grounding Damage and Worldwide
Trade.  To the Knowledge of Transferor, Transferor’s
Transferor Vessel has not sustained grounding damage to its underwater parts since
its most recent drydocking, and Transferor’s Transferor Vessel is eligible to
trade worldwide.

 

4.03.        Authorization; No Breach; Valid
and Binding Agreement.  (a)  The execution, delivery and
performance of this Agreement by such Transferor or Nominee and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all requisite corporate or company action on the part of such
Transferor, and no other corporate or company proceedings on its part are
necessary to authorize the execution, delivery or performance by such
Transferor of this Agreement.  This
Agreement has been duly executed and delivered by such Transferor.  This Agreement constitutes the legal, valid
and binding obligations of such Transferor, enforceable against such Transferor
in accordance with its terms.

 

(b)           Except as set forth on Schedule 4.03(b) attached
hereto, the execution and delivery of this Agreement by such Transferor or
Nominee does not, and the consummation of the transactions contemplated hereby
and compliance with the terms hereof will not, conflict with, or result in any
violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of consent, approval, termination, cancellation
or acceleration of any obligation or to loss of a material benefit under, or to
any increased, additional, accelerated or guaranteed rights or entitlement of
any Person under, or result in the creation of any Lien on the properties or
assets of such Transferor under, any provision of (i) in respect of
Vanguard, its Certificate of Formation and Limited Liability Company Agreement,
and in respect of each of Colas, Clipper Bulk and Nominee, their respective
Memorandum and Articles of Association,

 

19

 

(ii)
any Contract to which such Transferor or Nominee is a party or by which any of
its properties or assets are bound, or (iii) any judgment, order or decree
or statute, law, ordinance, rule or regulation applicable to such
Transferor or Nominee or its properties or assets including the Assets.

 

4.04.        Title to Properties.  (a) Except
as set forth on Schedule 4.04, such Transferor (other than Clipper
Bulk) has, and on the relevant Vessel Delivery Date, each Transferor will have,
good and marketable title to the Assets it is transferring hereby, in each
case, free and clear of all Liens.  Upon
consummation of the transactions contemplated hereby, Acquiror will have
acquired good and marketable title in and to the respective right, title and
interest of such Transferor in such Assets free and clear of all Liens.

 

(b) The Gem Bareboat Charter is in full force
and effect.  The Glory Bareboat Charter
is in full force and effect.  Neither
Clipper Bulk, nor to the knowledge of Clipper Bulk, “Owners” (as defined in
each of the Gem Bareboat Charter and the Glory Bareboat Charter), is in default
of either the Gem Bareboat Charter or the Glory Bareboat Charter.  To the knowledge of Clipper Bulk, there
exists no condition, event or state of facts that would constitute a default by
Clipper Bulk under the Gem Bareboat Charter or the Glory Bareboat Charter, upon
the lapse of time or the giving of notice or both.

 

4.05.        Investment
Representations.  (a) 
Such Transferor or Nominee understands that the Acquiror Shares have not been
registered under the Securities Act of 1933, as amended (the “Securities Act”). 
Such Transferor or Nominee also understands that the Acquiror Shares are
being offered and sold pursuant to an exemption from registration contained in
Regulation S under the Securities Act based in part upon such Transferor’s and
Nominee’s representations contained in this Agreement.  Each Transferor, and the Nominee, hereby
further represents and warrants to Acquiror as follows:

 

(i)            Transferor
Bears Economic Risk.  Such
Transferor or Nominee has substantial experience in evaluating and investing in
private placement transactions of securities in companies similar to Acquiror
so that it is capable of evaluating the merits and risks of its investment in
Acquiror and has the capacity to protect its own interests.  Such Transferor or Nominee may bear the
economic risk of this investment indefinitely. 
Such Transferor or Nominee understands that Acquiror has no present
intention of registering the Acquiror Shares. 
Such Transferor or Nominee also understands that there is no assurance
that any exemption from registration under the Securities Act will be available
and that, even if available, such exemption may not allow such Transferor or
Nominee to transfer all or any portion of its Acquiror Shares under the
circumstances, in the amounts, or at such times such Transferor or Nominee
might propose.

 

(ii)           Acquisition
for Own Account.  Such
Transferor or Nominee is acquiring or shall acquire the Acquiror Shares for its
own account, not as nominee or agent, not with a view towards their
distribution in violation of the Securities Act or applicable state securities
laws.  Such Transferor or Nominee has no
present intention of selling, granting any participation in, or otherwise
distributing the same.

 

(iii)          Transferor
or Nominee Can Protect Its Interest.  Such Transferor or Nominee represents that by
reason of its, or of its management’s, business or financial experience, such
Transferor or Nominee has the capacity to protect its own interests in

 

20

 

connection with the
transactions contemplated in this Agreement. 
Further, such Transferor or Nominee is aware of no publication of any
advertisement in connection with the issuance of Acquiror Shares contemplated
in this Agreement.

 

(iv)          Accredited
Investor.  Each such
Transferor represents that it is an accredited investor within the meaning of Rule 501(a)(3) of
Regulation D under the Securities Act. 
Nominee represents that it is an accredited investor within the meaning
of Rule 501(a)(8) of Regulation D under the Securities Act.

 

(v)           Residence.  Such Transferor or Nominee is not a U.S.
Person as such term is defined in Rule 902(k)(1) promulgated under
Regulation S.  Such Transferor or Nominee
is a partnership, corporation, limited liability company or other entity, and
the office or offices of such Transferor in which its investment decision was
made is located at the address or addresses of such Transferor set forth in Section 10.03.

 

(vi)          Legends.  Such Transferor or Nominee acknowledges that
the Acquiror Shares shall bear the respective restrictive legends set forth in Section 2.1(b) of
the Investor Rights Agreement.

 

4.06.        Transfer Restrictions.  Such
Transferor or Nominee acknowledges and agrees that the Acquiror Shares are and
shall be subject to restrictions on transfer pursuant to applicable federal and
state securities laws and as set forth in this Agreement and the agreements
contemplated by this Agreement.

 

4.07.        Registration Statement
Information.  Such Transferor or Nominee has received and
reviewed the Registration Statement filed on Form S-1 with the Securities
and Exchange Commission on June 23, 2005 (the “Registration Statement”). 
All information expressly concerning such Transferor or Nominee in the
Registration Statement is complete and correct as of the date of the
Registration Statement.  Any information
provided by such Transferor or Nominee to Acquiror, in writing for inclusion in
the Registration Statement, as amended, after the date such Registration
Statement, is and will be complete and correct.

 

4.08.        Litigation.  No
lawsuit, governmental investigation or legal, administrative or arbitration
action or proceeding is pending or, to the Knowledge of Transferor, threatened
against such Transferor or any of its properties or assets, or any director,
officer or employee of a Transferor in his or her capacity as such, which
questions the validity of this Agreement or seeks to prohibit, enjoin or
otherwise challenge the consummation of the transactions contemplated hereby.

 

4.09.        Governmental Consents. 
Except as set forth on the Schedule 4.09, no permit,
consent, approval, license, order or authorization of, or registration,
declaration or filing with, any court or other Governmental Entity is required
to be obtained or made in connection with the execution, delivery or
performance of this Agreement by such Transferor or Nominee or the consummation
by such Transferor or Nominee of any of the transactions contemplated hereby,
except for certain post-signing and/or post-closing filings required by federal
securities laws, or blue sky laws, or the securities laws of any other
jurisdiction.

 

4.10.        Insurance.  Each
of Vanguard’s and Cola’s Transferor Vessel is duly insured in accordance with
customary and mandatory requirements for vessels of similar age,

 

21

 

size and description with respect to hull and machinery, protection and
indemnity, war risks, and pollution protection, and shall continue to be so
insured by such Transferor until such Transferor Vessel is delivered by such
Transferor to Acquiror pursuant to this Agreement on the relevant Vessel
Delivery Date.

 

4.11.        Vessel Condition.  To
the Knowledge of Transferor, such Transferor’s Transferor Vessel is in good
condition, working order and repair, is classed by a classification society
which is a member of the International Association of Classification Societies
with respect to hull and machinery and in the highest classification and rating
for vessels of similar age, size and description, and is in such condition to
merit such classification and rating as of the relevant Vessel Delivery Date.

 

4.12.        Compliance with Laws.  Such
Transferor or Nominee has complied in all material respects with all applicable
laws, statutes, ordinances, rules, orders and regulations of any Governmental
Entity (including environmental laws and regulations), except for certain
post-signing and/or post-closing filings required by federal securities laws,
or blue sky laws, or the securities laws of any other jurisdiction.  Such Transferor has not received any written
communication during the past five years from any Governmental Entity that
alleges that a Transferor Vessel is not in compliance in any material respect
with any applicable laws, statutes, ordinances, rules, orders and regulations
(including environmental laws and regulations).

 

4.13.        Environmental Compliance.  To
the Knowledge of Transferor, on such Transferor’s Transferor Vessel there has
been no transportation, handling or treatment of toxic substances by any
Transferor in violation of any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit or which would require remedial action under
any applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which would not have, or
could not be reasonably likely to have, individually or in the aggregate with
all such violations and remedial actions, a material adverse effect on the IPO
Appraised Value thereof.

 

4.14.        Vessel Security Regulations. 
Without limiting Section 4.12 and Section 4.13, to the
Knowledge of Transferor, Transferor’s Transferor Vessel maintains a Vessel Security Plan in compliance
with the United States Coast Guard regulations under the Maritime
Transportation Security Act of 2002, and the International Ship and Port
Facilities Security code, promulgated under the International Convention for
the Safety of Life at Sea.

 

4.15.        Brokerage. 
There are no claims for brokerage commissions, finders’, investment
banker or financial advisor fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or
agreement made by or on behalf of the Transferors, except in the case of AMA
Capital Partners LLC.  The Transferors
and Nominee are solely responsible for any fees payable to AMA Capital Partners
LLC in connection with the transactions contemplated by this Agreement.

 

4.16.        Ownership of Clipper Nominee. 
Clipper Nominee is an Affiliate of Clipper Bulk.

 

22

 

ARTICLE V

 

ACQUIROR REPRESENTATIONS AND WARRANTIES 

 

Acquiror represents and warrants to each Transferor
that:

 

5.01.        Organization and Corporate Power. 
Acquiror is a corporation duly organized, validly existing and in good
standing under the laws of the Republic of the Marshall Islands and has all
requisite corporate power and authority to enter into this Agreement and
perform its obligations hereunder and to consummate the transactions
contemplated hereby.

 

5.02.        Capitalization.  (a) 
The authorized capital of Acquiror consists of 75,000,000 shares of Common
Stock and 5,000,000 shares of Preferred Stock of which 1,000 shares of Common
Stock are outstanding as of the date hereof. 
Immediately following the Closing, the outstanding capital stock of
Acquiror shall be as set forth in Schedule 5.02(a).

 

(b)           Except as set forth in Schedule 5.02(b) or
as contemplated in this Agreement, there are no other options, warrants, calls,
rights, commitments or agreements of any character to which Acquiror is a party
or by which either Acquiror is bound or obligating Acquiror to issue, deliver,
sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased
or redeemed, any shares of the capital stock of Acquiror or obligating Acquiror
to grant, extend or enter into any such option, warrant, call, right,
commitment or agreement.  All outstanding
shares of Common Stock as of the date of this Agreement and as of each Closing
Date have been and will be, as the case may be, issued in compliance with all
applicable Federal, state and other jurisdictions’ securities laws.

 

5.03.        Authorization.  The
execution, delivery and performance of this Agreement by Acquiror and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all requisite corporate action on the part of Acquiror, and no
other corporate proceedings on its part are necessary to authorize the
execution, delivery or performance by Acquiror of this Agreement.  This Agreement has been duly executed and
delivered by Acquiror and constitutes the legal, valid and binding obligations
of Acquiror, enforceable against Acquiror in accordance with its terms.

 

5.04.        No Breach.  The
execution and delivery of this Agreement by Acquiror does not, and the
consummation of the transactions contemplated hereby and thereby and compliance
with the terms hereof, will not conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of consent, approval, termination, cancellation or acceleration of
any obligation or to loss of a material benefit under, or to any increased,
additional, accelerated or guaranteed rights or entitlement of any Person
under, or result in the creation of any Lien on the properties or assets of
Acquiror under, any provision of (i) the Articles of Incorporation of Acquiror, (ii) any Contract to
which Acquiror is a party or by which any of its properties or assets are bound
or (iii) any judgment, order or decree, or statute, law, ordinance, rule or
regulation applicable to Acquiror or its properties or assets.

 

5.05.        Litigation.  No
lawsuit, governmental investigation or legal, administrative or arbitration
action or proceeding is pending or, to the knowledge of Acquiror, threatened
against Acquiror or any of its properties or assets, or any director, officer
or employee of Acquiror in his or her capacity as such, which questions the
validity of this Agreement or seeks to prohibit, enjoin or otherwise challenge
the consummation of the transactions contemplated hereby.

 

23

 

5.06.        Acquiror Shares.  The
issuance, transfer and delivery of the Acquiror Shares hereunder have been duly
authorized by all required corporate action on the part of Acquiror, and when
issued, transferred and delivered in accordance with the terms hereof for the
consideration expressed herein, will be duly and validly issued, fully paid and
non-assessable, free and clear of all Liens.

 

5.07.        Governmental Consents. 
Except as set forth on Schedule 5.07, no permit, consent,
approval, license, order or authorization of, or registration, declaration or
filing with, any court or other Governmental Entity is required to be obtained
or made in connection with the execution, delivery or performance of this
Agreement by Acquiror or the consummation by Acquiror of any of the
transactions contemplated hereby.

 

5.08.        Brokerage.  There
are no claims for brokerage commissions, finders’, investment banker or
financial advisor fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or
agreement made by or on behalf of Acquiror.

 

5.09.        No Directed Selling Efforts.  In
regard to this transaction, none of Acquiror, a distributor, any of their
respective affiliates, or any person acting on behalf of the foregoing has
conducted any “directed selling efforts” in the United States as those terms
are defined in Rule 902 of Regulation S nor has Acquiror conducted any
general solicitation relating to the offer and sale of the securities that are
the subject of this transaction to persons resident within the United States or
elsewhere.

 

ARTICLE VI

 

COVENANTS OF EACH TRANSFEROR

 

Each Transferor covenants and agrees as follows:

 

6.01.        Conduct of Business.  (a) 
From the date hereof until the relevant Vessel Delivery Date of each Transferor’s
Transferor Vessel, such Transferor shall conduct its business and maintain and
operate its Transferor Vessel in the ordinary and usual course of business and
substantially in the same manner as presently conducted (including with respect
to insurance coverage, repair and maintenance expenditures and spare parts
levels).

 

(b)           From the date hereof until the relevant
Vessel Delivery Date of each Transferor’s Transferor Vessel, except as
otherwise consented to in advance in writing by Acquiror, such Transferor shall
not sell, lease or otherwise dispose of its Assets or any portion thereof,
which is material, individually or in the aggregate, to the operation of such
Transferor’s Transferor Vessels or agree, whether in writing or otherwise, to
do any of the foregoing.

 

(c)           From the date hereof until the relevant
Vessel Delivery Date of Transferor’s Transferor Vessel, neither Colas nor
Vanguard shall encumber its Transferor Vessel with employment or charter
obligations that extend beyond the relevant Outside Charter Date.

 

(d)           From the date hereof, Clipper Bulk shall use
its best efforts to obtain the right to purchase the Transferor Vessel subject
to Gem Bareboat Charter and the Transferor Vessel subject to the Glory Bareboat
Charter.  Clipper Bulk shall keep
Acquiror apprised of all

 

24

 

material
developments with respect to such negotiations. 
Clipper Bulk shall notify Acquiror in writing immediately once it has
obtained the right to purchase either Transferor Vessel prior to the Outside
Delivery Date, such notice to include a copy of any amendment to the Gem
Bareboat Charter and the Glory Bareboat Charter, if any, or such other writing
binding the current owner to sell either such Transferor Vessel to Clipper
Bulk, or, once the current owner of either such vessel has rejected Clipper
Bulk’s request to purchase either such Transferor Vessel prior to the Outside
Delivery Date.

 

(e)           Upon delivery of a Transferor
Vessel to be transferred by Clipper Bulk to Clipper Nominee, Clipper Bulk shall
cause Clipper Nominee, in the event that such Transferor Vessel is to be
registered under the Republic of the Marshall Islands flag, to immediately
transfer such Transferor Vessel to Acquiror or its nominee pursuant to the
terms hereof, and in the event that such Transferor Vessel is to be registered
under its then current flag, to immediately (i) reregister such Transferor
Vessel in its ownership under the then current flag, and (ii) transfer
such Transferor Vessel to Acquiror or its nominee pursuant to the terms hereof.

 

(f)            From the date hereof until the Vessel
Delivery Date of Transferor’s Transferor Vessel, except as otherwise expressly
consented to in advance in writing by Acquiror, such Transferor shall keep
Acquiror informed of its Transferor Vessel’s itinerary and provide Acquiror
fifteen (15), seven (7) and three (3) days notice of the expected
place of delivery of such Transferor Vessel.

 

(g)           Such Transferor shall not take or agree or
commit to take any action that would, or that could reasonably be expected to,
result in (or omit or agree or commit to omit to take any action that would
prevent, or that could reasonably be expected to prevent) (i) any of the
representations and warranties set forth in this Agreement becoming untrue, or (ii) any
of the conditions to the purchase and sale of the Assets set forth in Section 3.01
not being satisfied.

 

6.02.        Access to Books and Records.  From
the date of this Agreement until the first to occur of (i) the relevant
Closing Date, and (ii) the termination of this Agreement in accordance
with Section 8.01, each Transferor shall permit Acquiror and its
representatives to make such investigation of its Assets as Acquiror deems
necessary or desirable in connection with the transactions contemplated by this
Agreement.  Each Transferor shall
furnish Acquiror with such financial, operating and other data and information,
and copies of documents with respect to the Assets or any of the transactions
contemplated by this Agreement, as Acquiror shall from time to time reasonably
request, provided, any financial information
provided by a Transferor pursuant hereto shall be certified by such Transferor’s director, or authorized representative
of its sole member, as the case may be. 
Such access and investigation
shall be made upon reasonable notice and at reasonable places and times.  Acquiror shall have the right to inspect the
classification records, the deck and engine logs of each Transferor
Vessel.  Such access and information
shall not in any way affect or diminish any of the representations or
warranties hereunder.  Without limiting
the foregoing, during such period, such Transferor shall keep Acquiror informed
as to the business and operations of its Transferor Vessel and shall consult
with Acquiror as appropriate.

 

6.03.        Notification.  (a) 
Such Transferor shall have the continuing obligation until the relevant Closing
Date promptly to supplement or amend the Schedules hereto with respect to any
matter hereafter arising or discovered which, if existing or known at the date
of this Agreement, would have been required to be set forth or described in
such Schedules;

 

25

 

provided, however, that no supplement or amendment to such Schedules
shall have any effect for the purpose of determining the satisfaction of the
conditions set forth in Section 3.01 or for the purpose of determining
whether any Person is entitled to indemnification pursuant to Section 9.02.

 

(b)           Such Transferor shall promptly notify
Acquiror of (i) any notice or other communications from any Person
alleging that the consent of such Person is or may be required in connection
with the consummation of the transactions contemplated hereby, and (ii) any
notice or other communication from any Governmental Entity in connection with
the consummation of the transactions contemplated hereby.

 

6.04.        Regulatory Filings.  Such
Transferor shall make or cause to be made all filings and submissions under
laws or regulations, applicable to such Transferor required in connection with
the consummation of the transactions contemplated herein.  Such Transferor shall coordinate and
cooperate with Acquiror in exchanging such information and assistance as
Acquiror may reasonably request and shall keep Acquiror apprised of the status
of any inquiries or requests for additional information made by any
Governmental Entity in connection with all of the foregoing.

 

6.05.        Conditions.  Such
Transferor shall use reasonable efforts to cause the conditions set forth in Section 3.01
to be satisfied and to consummate the transactions contemplated herein as soon
as reasonably possible after the satisfaction of the conditions set forth in Section 3.02.

 

6.06.        Confidentiality. 
Except as required by law or administrative process and except for
information which is now or hereafter becomes public other than as a result of
a breach of this Section 6.06, for the period from the date hereof to the
First Closing Date, such Transferor agrees not to disclose to any other Person
the contents of this Agreement or the transactions contemplated herein.  Notwithstanding the foregoing, the parties
hereto acknowledge and agree that this Agreement, including all Exhibits, shall
be filed as an exhibit to Acquiror’s Registration Statement.

 

6.07.        Non-Solicitation.  From
the date hereof to the earlier to occur of the First Closing Date and the
effective date of termination of this Agreement, such Transferor shall not, and
shall not authorize or permit the officers, directors, employees or other
agents of such Transferor or and its subsidiaries or Affiliates to, directly or
indirectly, take any action to solicit, initiate, entertain or encourage any
Acquisition Proposal or engage in negotiations with, or afford access to the
properties, books or records of such Transferor or its subsidiaries or
Affiliates to, any person that has advised such Transferor or its subsidiaries
or Affiliates that such person may be considering making, or that has made, an
Acquisition Proposal.  Such Transferor
shall promptly notify Acquiror after receipt of any Acquisition Proposal or any
notice that any person is considering making an Acquisition Proposal or any
request for access to the properties, books or records of such Transferor and
its subsidiaries or affiliates by any person that has advised such Transferor
and its subsidiaries or affiliates that such person may be considering making,
or that has made, an Acquisition Proposal and will keep Acquiror fully informed
of the status and details of any such Acquisition Proposal, indication or
request.

 

6.08.        Second Appraisal.  At least five (5) Business Days and no
more than thirty (30) days prior to the First Closing Date, and otherwise as
soon as practicable with the written

 

26

 

consent of Acquiror, the Transferors shall cause the Agreed Appraisers
to conduct a further appraisal of the Transferor Vessels and the Substitute
Vessels (the “Second Appraisal”) and shall
cause copies thereof to be delivered to Acquiror promptly upon receipt thereof
certified, with respect to each Transferor Vessel and each Substitute Vessel,
by the Agreed Appraisers and an authorized representative of the relevant
Transferor.  Notwithstanding anything
herein to the contrary, in the event that the First Closing does not occur
within thirty (30) days of the Second Appraisal, the Transferors shall cause
the Agreed Appraisers to conduct a further appraisal of the Transferor Vessels
and the Substitute Vessels, to be delivered to Acquiror in accordance with the
preceding sentence, whereupon such appraisals shall be deemed the “Second
Appraisal” for the purposes of this Agreement, and this process shall be
repeated each time required until the termination of this Agreement or until
the First Closing Date.

 

6.09.        Vessel Inspection.  (a) 
From the date hereof to the First Closing Date, Acquiror shall have the right, at its expense, at any port each
Transferor Vessel to be transferred by Clipper Bulk enters prior to the
First Closing, to arrange for a topside
inspection of each such Transferor Vessel, without undue delay to such
Transferor Vessel.  Acquiror has
inspected and accepted the Transferor Vessel to be transferred by each of
Vanguard and Colas.

 

(b)           Acquiror
shall be entitled to inspect the Transferor Vessels to be transferred by
Clipper Bulk including an underwater
inspection by a diver approved by such Transferor Vessel’s Classification
Society, at the port of delivery of such Transferor Vessel, immediately
prior to the Second Closing or the Third Closing, as the case may be.  The scope of each underwater inspection shall
be governed by Section 6.09(c) through Section 6.09(e).  Additionally, from the date hereof to the
relevant Closing Date, such Transferor shall provide Acquiror written notice of
the travel itinerary of such Transferor’s Transferor Vessel on a bi-weekly
basis.

 

(c)           (i)  The relevant Transferor shall at its cost make its Transferor
Vessel available for inspection as described in Section 6.09(b).  The extent of the inspection and the
conditions under which it is performed shall be to the satisfaction of each
Transferor Vessel’s respective Classification Society.  If the conditions at the intended port of
underwater inspection are unsuitable for such inspection, Transferor shall make
the Transferor Vessel available at a suitable inspection site closest to such
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
Transferor Vessel’s class, then unless repairs can be carried out afloat to the
satisfaction of the Classification Society, the respective Transferor shall
arrange for such Transferor Vessel to be drydocked at such Transferor’s 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 such
Transferor Vessel’s class, such defects shall be made good by such Transferor
at its expense to the satisfaction of the Classification Society without
condition/recommendation.  In such event
the relevant Transferor is to pay also for the cost of the underwater
inspection and the Classification Society’s attendance.

 

(iii)          If a Transferor Vessel is to be drydocked pursuant to the preceding
paragraph and no suitable dry-docking facilities are available at such port,
the relevant Transferor shall take such Transferor Vessel to a port where
suitable drydocking facilities

 

27

 

are
available.  In the event that the
drydocking occurred immediately prior to the delivery of such Transferor
Vessel, once drydocking and all relevant repair has taken place to the
satisfaction of the relevant Classification Society, the relevant Transferor
shall deliver the Transferor Vessel at the port of drydocking or at any
mutually agreed alternative port.

 

(d)           If a Transferor Vessel is drydocked pursuant
to Section 6.09(c)(ii), during the drydock inspection of such Transferor
Vessel, Acquiror may require the tailshaft system to be drawn and surveyed by
the relevant Classification Society, the extent of the survey being in
accordance with the relevant Transferor Vessel’s Classification Society’s rules for
such tailshaft survey and consistent with the current stage of such Transferor
Vessel’s survey cycle.  The drawing and
refitting of the tailshaft shall be arranged by the respective Transferor.  Should any parts of the tailshaft system be
condemned or found defective so as to affect such Transferor Vessel’s class,
those parts shall be renewed or made good at the respective Transferor’s
expense to the satisfaction of such Transferor Vessel’s Classification Society
without condition or recommendation.

 

(e)           The expenses relating to the survey of the
tailshaft system shall be borne by Acquiror unless the Classification Society
determines that parts of the system are to be condemned or found defective or
broken so as to affect the Transferor Vessel’s class.

 

6.10.        Acquiror’s Representatives (a)  From and after the date hereof,
Acquiror shall be entitled to place two (2) representatives (the “Acquiror Representatives”) on board each Transferor
Vessel.  The Acquiror Representatives
shall be entitled to stay on board each Transferor Vessel until the relevant
Vessel Delivery Date for familiarization and as observers only without
interfering with vessel operations. 
Acquiror agrees that it shall at all times fully defend, protect,
indemnify and save harmless each Transferor, its employees, agents and persons
for whom each Transferor is responsible (“Indemnified Persons”),
from and against all liabilities, actions, claims, demands, judgments, losses,
expenses, suits or actions and reasonable attorney fees for injuries to or
death or any person or persons, or loss of or damage to the property of any
person or persons whomsoever, arising in connection with or as a direct result
of the presence on board of a Transferor Vessel of Acquiror Representatives,
even if such personal injury or death or property damage results from the sole,
concurrent or contributory negligence of the Indemnified Persons or any of
them.  This allocation of responsibility
shall apply whether liability for such personal injury or death or property
damage is liability with or without fault, or is imposed on the basis of strict
liability or by operation of law.  Each
Transferor Vessel’s Master and Officers shall give full access to the
Transferor Vessel and provide cooperation in Acquiror Representatives’ review
of such Transferor Vessel, its classification records, engine logs, surveys and
warranties maintained on such Transferor Vessel, records and gauge readings
concerning such Transferor Vessel’s bunkers and oils and invoices for Vessel
Personal Property.  Each Acquiror
Representative shall sign standard P&I indemnity forms, a form of which is
annexed hereto as Exhibit J.

 

6.11.        Replacement Vessels.  (a)(i)  In the event that Acquiror, in
connection with the Due Diligence Inspection of each Transferor Vessel to be
transferred by Clipper Bulk pursuant to Section 6.09(a), concludes, in its
reasonable discretion, that either such Transferor Vessel is not of sound
condition relative to other vessels of similar age, size and type operated by
prudent and commercially reputable shipowners in similar trades, free of
average damage and free of recommendations affecting class (such condition

 

28

 

hereinafter
called the “Required Condition”), then Acquiror may
reject the delivery of such Transferor Vessels hereunder pursuant to a written
notice to Clipper Bulk (the “Clipper Rejection Notice”)
delivered no later than fifteen (15) days after the final Due Diligence
Inspection.  In such case, Clipper Bulk
shall be obligated either (x) at its expense to place both of the Transferor
Vessels to be transferred by it in the Required Condition and to deliver both
such Transferor Vessels to the Acquiror or its nominee on or before the Outside
Delivery Date, or (y) to deliver, on or before one hundred and twenty (120)
days from the First Closing Date, Substitute Vessel A or Substitute Vessel B
and Substitute Vessel C, as described on Schedule IV
attached hereto (each vessel described therein, a “Substitute
Vessel”); provided, however,
any obligation of Clipper Bulk to deliver such Substitute Vessel under this Section 6.11(a) shall
terminate upon an actual, constructive or compromised total loss of such
Substitute Vessel.

 

(ii)           In the event that Clipper Bulk elects to place its Transferor Vessels
in the Required Condition pursuant to the last sentence of the preceding
subsection, an inspector hired by Acquiror or its nominee shall be entitled to
observe all repairs being made to each Transferor Vessel and Clipper Bulk shall
provide Acquiror or its nominee with a written statement of repairs to each
Transferor Vessel, including copies of bills or statements reflecting completed
repairs.  In the event that Acquiror concludes,
in its reasonable discretion, that either such Transferor Vessel is not in the
Required Condition, Acquiror shall deliver a further Clipper Rejection Notice
and the processes described in this Section 6.11(a) shall be repeated
until the earlier of Acquiror’s acceptance of such Transferor Vessels or the
Outside Delivery Date.

 

(iii)          In the event that Clipper Bulk chooses not to, or is unable to, place
the Transferor Vessels in the Required Condition, ready for delivery to
Acquiror or its nominees on or before the Outside Delivery Date, then Clipper
Bulk shall be obligated to deliver Substitute Vessel A or Substitute Vessel B
and Substitute Vessel C, at Clipper Bulk’s option, to Acquiror pursuant to the
last sentence of subsection 6.11(a)(i), and, subject to the other
provisions of this Agreement, Acquiror shall be obligated to accept, or to
cause its nominee to accept, such delivery. 
At any time after Acquiror’s transmission of the Clipper Rejection
Notice (but no later than the Outside Delivery Date), Clipper Bulk shall
provide written notice (the “Nomination Confirmation”)
to Acquiror confirming its obligation to deliver, and its nomination of,
Substitute Vessel A or Substitute Vessel B and Substitute Vessel C.  The Nomination Confirmation shall include a
written description of such Substitute Vessel(s) itinerary and provide the
ports that Acquiror may place its Acquiror Representatives on board such
vessel(s), without undue delay to such vessels(s).  In addition, Acquiror or its nominee shall
have the right, at its expense, at any port any such Substitute Vessel
nominated for delivery to Acquiror hereunder enters, to perform a topside
inspection of such vessel(s).  In the
event that Acquiror determines, in its reasonable discretion, that such Substitute
Vessel(s) are not in the Required Condition, then Acquiror may reject the
delivery of such Substitute Vessel(s) pursuant to a Clipper Rejection
Notice.  Acquiror shall deliver such
notice no later than fifteen (15) days after (x) the topside inspection of
Substitute Vessel A, if such vessel is nominated, or (y) the later to occur of
each topside inspection of Substitute Vessel B and Substitute Vessel C, if such
vessels are nominated.  In the event
Acquiror delivers a Clipper Rejection Notice, Clipper Bulk shall either (A), at
its expense, place the nominated Substitute Vessel(s) in the Required Condition
and deliver such Substitute

 

29

 

Vessel(s)
to the Acquiror or its nominee(s) on or before the 120th day
following the First Closing Date, or (B), by written notice to Acquiror
occurring no later than ninety (90) days after the First Closing Date, tender
delivery of such Substitute Vessel(s) to the Acquiror in “as is” condition on
or before the 120th day following the First Closing Date (such “as is”
condition relating only to the physical condition of such Substitute Vessel(s),
and not affecting Acquiror’s rights and Transferor’s obligations under the
other provisions of this Agreement, including without limitation delivery of
each vessel hereunder in class without recommendation and Acquiror’s right to
an inspection at delivery pursuant to Section 6.09(b)).  An inspector hired by Acquiror or its nominee
shall be entitled to observe all repairs being made to a Substitute Vessel
pursuant to the preceding sentence and Clipper Bulk shall provide Acquiror with
a written statement of repairs to any such Substitute Vessel, including copies
of bills or statements reflecting completed repairs.  In the event that Clipper Bulk cannot or
elects not to deliver the nominated Substitute Vessel(s) to Acquiror or its
nominee in the Required Condition on or before the 120th day
following the First Closing Date, the acceptance of such Substitute Vessel(s)
shall be at the option of Acquiror or its nominee, provided,
however, Acquiror shall notify Clipper Bulk on or before the 120th
day following the First Closing Date whether or not Acquiror accepts such
Substitute Vessel(s) in “as is” condition.

 

(iv)          In addition, in the event that (x) Clipper Bulk nominates Substitute
Vessel A pursuant to the Nomination Confirmation, Clipper Bulk shall pay
Acquiror or its nominee an amount equal to seven thousand five hundred dollars
($7,500) per day from the Outside Delivery Date to the date prior to the date
of the delivery of such Substitute Vessel(s) to Acquiror or its nominee, or (y)
Clipper Bulk nominates Substitute Vessel B and Substitute Vessel C pursuant to
the Nomination Confirmation, Clipper Bulk shall pay Acquiror or its nominee an amount
equal to seven thousand five hundred dollars ($7,500) per day from the Outside
Delivery Date to the date prior to the date of the delivery of both Substitute
Vessels to Acquiror or its nominee, provided, however,
such penalty shall be decreased to three thousand seven hundred and fifty
dollars ($3,750) per day on the date prior to the date that Clipper Bulk
transfers the first of such Substitute Vessels to Acquiror or its nominee.  If Clipper Bulk cannot deliver a Substitute
Vessel on or before the 120th day following the First Closing Date
and Acquiror or its nominee does not exercise its option to accept such vessel
after such date, then Clipper Bulk shall only be obligated to make the penalty
payment required hereunder from the Outside Delivery Date to the 120th
day following the First Closing Date.

 

(b)           In the event that Acquiror, in connection
with the Due Diligence Inspection of each Transferor Vessel to be transferred
by Clipper Bulk pursuant to Section 6.09(a), concludes, in its reasonable
discretion, that each such Transferor Vessel is in the Required Condition, and
Clipper Bulk cannot, for any reason other than an actual, constructive or
compromised total loss of its Transferor Vessels on or after the First Closing
Date, deliver (i) both of its Transferor Vessels on or before the Outside
Delivery Date, then such Transferor or its Affiliates must provide Acquiror, in
writing (a “Substitute Election”), notice that it
shall deliver either (x) Substitute Vessel A, or (y) Substitute Vessel B and
Substitute Vessel C, each as described on Schedule IV,
or (ii) one of its Transferor Vessels on or prior to the Outside Delivery
Date, then such Transferor or its Affiliates must provide Acquiror, in writing
a Substitute Election that it shall to deliver any Substitute Vessel, at
Transferor’ option, each as described on Schedule IV.  The Substitute Election shall contain a
description of each such

 

30

 

Substitute Vessel’s
itinerary and state the ports that Acquiror may place its Acquiror
Representatives on board such vessel. 
Clipper Bulk or its Affiliates must tender such Substitute Vessel(s) for
delivery to Acquiror or its nominee no later than 120 days following the First
Closing Date, in accordance with the delivery obligations of Clipper Bulk’s
original Transferor Vessel, including, in port delivery and Acquiror’s right to
a pre-closing inspection of such Substitute Vessel.  In addition, such Transferor or its
Affiliates shall pay Acquiror an amount equal to seven thousand five hundred
dollars ($7,500) per day from the Outside Delivery Date to the date prior to
the date of the delivery of such Substitute Vessel to Acquiror or its nominee, provided, however, such penalty shall be decreased to three
thousand seven hundred and fifty dollars ($3,750) per day (x) in the event that
Clipper Bulk transferred one original Transferor Vessel on or before the
Outside Delivery Date, or (y) if two Substitute Vessels are required to be
delivered hereunder, on the date prior to the date of delivery of the first
Substitute Vessel to Acquiror or its nominee.

 

(c)           Notwithstanding the foregoing, acceptance of
a Substitute Vessel pursuant to Section 6.11(b) is at the option of
Acquiror, and (i) if Acquiror accepts such Substitute Vessel(s), then
Clipper Bulk shall pay the penalty provided for in the last sentence of Section 6.11(b),
and Acquiror shall pay for such Substitute Vessel in accordance with Section 2.03(e) as
modified by Section 6.11(d), and (ii) if Acquiror rejects such Substitute
Vessel(s), then Acquiror shall forfeit the penalty provided for in the last
sentence of Section 6.11(b) and Clipper Bulk shall have no further
obligation under this Agreement to transfer any Transferor Vessel or Substitute
Vessel to Acquiror.

 

(d)           The purchase price of each Substitute Vessel
shall be determined as follows: (i) if Acquiror paid the IPO Appraised
Value of the Transferor Vessels transferred as of the First Closing Date
without adjustment pursuant to Section 3.02(i), then Acquiror shall pay
the Vessel Average of such Substitute Vessel (as determined by the Second
Appraisal) as the purchase price thereof, and (ii) if Acquiror paid the
IPO Appraised Value of the Transferor Vessels transferred as of the First
Closing Date with an adjustment pursuant to Section 3.02(i), then Acquiror
shall pay the Vessel Average of such Substitute Vessel (as determined by the
Vessel Average for each Substitute Vessel, as described on Schedule IV
hereto).  In addition, any penalty
payment accrued pursuant to Section 6.11(a)(iv) or Section 6.11(b) shall
be deemed a credit to Acquiror’s account on the relevant Closing Date, provided, however, in the event that Acquiror or its nominee
does not elect to accept a Substitute Vessel to be delivered pursuant to Section 6.11(a) after
the 120th day following the date of the First Closing, then Clipper
Bulk shall remit any such accrued penalty to Acquiror or its nominee within ten
(10) business days following Acquiror’s election to reject such delivery.

 

(e)           For purposes of this Agreement, each
Substitute Vessel delivered to Acquiror or its nominees hereunder in
substitution of a Transferor Vessel, shall be deemed to be a “Transferor Vessel”
for all purposes hereunder.

 

6.12.        Transfer of Warranties.  Each
Transferor shall take all action required to transfer the Vessel Warranties, if
any, transferred hereunder to Acquiror, and shall take all actions necessary,
as directed by Acquiror, to enforce the Vessel Warranties.  In the event that the issuer of any Vessel
Warranties transferred hereunder require that Acquiror or its nominee make
claims under such Vessel Warranties through the Transferor of such Transferor
Vessel, then such Transferor shall take no action that would negatively affect
the validity of such Vessel

 

31

 

Warranties or impair Acquiror or its nominee’s
ability to make any claim under such Vessel Warranties.

 

6.13.        Purchase of Clipper Bulk
Transferor Vessels.  Clipper Bulk shall not use any Acquiror
Shares paid to Nominee hereunder to purchase any Transferor Vessel or
Substitute Vessel transferred by Clipper Bulk hereunder.

 

ARTICLE VII

 

COVENANTS OF ACQUIROR

 

7.01.        Notification. 
Acquiror shall promptly notify each Transferor of (i) any notice or
other communications from any Person alleging that the consent of such Person
is or may be required in connection with the consummation of the transactions
contemplated hereby and (ii) any notice or other communication from any
Governmental Entity in connection with the consummation of the transactions
contemplated hereby, provided
Acquiror’s obligation hereunder with respect to the IPO shall be governed by Section 7.02.

 

7.02.        Notifications Regarding Registration. From the date of this Agreement until the first to occur (i) of
the Closing Date and (ii) the termination of this Agreement in accordance
with Section 8.01, Acquiror shall keep each Transferor reasonably apprised
of material issues arising or material actions taken in connection with the IPO
and shall provide reasonable notice of the anticipated effective date of the
IPO.  Acquiror shall not be required by
this Section 7.02 to take any action that would require Acquiror to
disclose material non-public information regarding the IPO.

 

7.03.        Regulatory Filings. 
Acquiror shall make or cause to be made all filings and submissions
under any laws or regulations applicable to Acquiror required in connection
with the consummation of the transactions contemplated herein.  Acquiror shall coordinate and cooperate with
the Transferors in exchanging such information and assistance as the
Transferors may reasonably request and shall keep the Transferors apprised to
the status of any inquiries or requests for additional information made by any
Governmental Entity in connection with all of the foregoing.

 

7.04.        Appraisals.  At
least five (5) Business Days and no more than thirty (30) days prior to
the First Closing Date, and otherwise as soon as practicable, Acquiror shall
cause the Agreed Appraisers to conduct a further appraisal of the Acquiror
Vessels (also deemed a “Second Appraisal”)
and shall cause copies thereof to be delivered to the Transferors promptly upon
receipt thereof certified, with respect to each Acquiror Vessel, by the Agreed
Appraisers and the Chief Financial Officer of Acquiror. Notwithstanding
anything herein to the contrary, in the event that the First Closing does not
occur within thirty (30) days of the Second Appraisal, the Acquiror shall cause
the Agreed Appraisers to conduct a further appraisal of the Acquiror Vessels,
to be delivered to Transferors in accordance with the preceding sentence,
whereupon such appraisals shall be deemed the “Second Appraisal” for the
purposes of this Agreement, and this process shall be repeated each time
required until the termination of this Agreement or until the First Closing
Date.

 

7.05.        Conditions. 
Acquiror shall use reasonable efforts to cause the conditions set forth
in Section 3.02 to be satisfied and to consummate the transactions
contemplated herein as soon as reasonably possible after the satisfaction of
the conditions set forth in Section 3.01.

 

32

 

7.06.        Name Change.  Upon
taking delivery of each Transferor Vessel, Acquiror shall change the name of
such Transferor Vessel and shall alter such Transferor Vessel’s funnel
markings, in the case of the Transferor Vessels to be transferred by Vanguard
and Colas at the first port following the First Closing and in the case of the
Transferor Vessel to be transferred by Clipper Bulk, at the port of delivery of
such Transferor Vessel.

 

7.07.        Wexford Delivery.  Upon
the date hereof, Wexford shall deliver a non-solicitation agreement in form and
substance similar to Section 6.07 hereof.

 

ARTICLE VIII

 

TERMINATION

 

8.01.        Termination.  This
Agreement may be terminated and the transactions contemplated hereby abandoned
at any time prior to the First Closing Date:

 

(a)           by the mutual written consent of Acquiror and
each Transferor;

 

(b)           by Acquiror, if it determines in the exercise
of its reasonable business judgment not to proceed with the IPO;

 

(c)           by Acquiror, if any of the conditions set
forth in Section 3.01 shall have become incapable of fulfillment;

 

(d)           by the Transferor if any of the conditions
set forth in Section 3.02 shall have become incapable of fulfillment; or

 

(e)           by either Acquiror or Transferor if the First
Closing shall not have occurred by November 1, 2005;

 

provided, however, that the party seeking termination pursuant to
clause (c) or (d) is not in breach in any material respect of any of
its representations, warranties, covenants or agreements contained in this
Agreement.

 

8.02.        Effect of Loss.  If
any Transferor Vessel becomes an actual, constructive or compromised total loss
prior to the First Closing Date, this Agreement shall terminate with respect to
such Transferor Vessel, including the provisions of Section 6.11 if the
Transferor Vessel to be transferred by Clipper Bulk is so lost.  In the event of a loss contemplated by this Section 8.02,
the relevant Transferor shall provide written notice to Acquiror within three (3) days
of such loss, but in no event later than the First Closing Date.

 

8.03.        Effect of Termination.  In
the event of termination of this Agreement by either Acquiror or the
Transferors pursuant to Section 8.01, written notice thereof shall be
given to the other parties to this Agreement and thereupon the provisions of
this Agreement shall immediately become void and of no further force and effect
(other than Section 6.06, Section 8.03, Section 10.01, Section 10.02,
Section 10.09, Section 10.12 and Section 10.13 which shall
survive the termination of this Agreement), and there shall be no liability on
the part of either Acquiror, on the one hand, or the Transferors, on the other
hand, to one another, except for liability for breaches of this Agreement prior
to the time of such termination.

 

33

 

ARTICLE IX

 

ADDITIONAL COVENANTS

 

9.01.        Survival.  All
of the representations and warranties contained in this Agreement and in any
certificate delivered pursuant hereto shall survive the Closing for purposes of
Section 9.02 and shall survive until the close of business three years
following the Closing Date; provided, however, that (i) the representations and warranties set
forth in Sections 4.01, 4.03, 4.04, 4.05, 4.06, 4.07, 4.13, 5.01, 5.02 and 5.03
and (ii) in the case of fraud, intentional misrepresentation or
intentional breach, any representation or warranty, shall survive until the
expiration of the relevant statute of limitations (taking into account any
extensions thereof) or 30 days after the expiration of the relevant statute of
limitations (taking into account any extensions thereof) for third party claims
made within 30 days prior to the expiration of the relevant statute of
limitations (taking into account any extensions thereof).

 

9.02.        Indemnification.

 

(a)           Indemnification by Each Transferor.  Each Transferor shall severally
indemnify Acquiror and its Affiliates, officers, directors, employees,
shareholders, agents, representatives, successors and assigns against and hold
them harmless from any loss, liability, claim, damage, expense, action, suit,
proceeding, demand, judgment or cost (including legal fees and expenses) (“Losses”) suffered or incurred by any such indemnified party
arising from, relating to or otherwise in respect of (i) any breach of any
representation or warranty of such Transferor contained in this Agreement or in
any certificate delivered pursuant hereto, (ii) any breach of any covenant
of such Transferor contained in this Agreement, and (iii) the failure of
such Transferor to comply with any state or local tax laws applicable to the
transactions contemplated by this Agreement.

 

(b)           Indemnification by Acquiror. 
Acquiror shall indemnify each Transferor and their respective officers,
directors, employees, shareholders, agents, representatives, successors and
assigns against and hold them harmless from any Losses suffered or incurred by
any such indemnified party arising from, relating to or otherwise in respect of
(i) any breach of any representation or warranty of Acquiror contained in
this Agreement or in any certificate delivered pursuant hereto and (ii) any
breach of any covenant of Acquiror contained in this Agreement.

 

9.03.        Further Assurances.  From
time to time, as and when requested by any party hereto, any other party hereto
shall execute and deliver or cause to be executed and delivered, all such
documents and instrument as and shall take, or cause to be taken, all such
further or other actions as such other party may reasonably deem necessary or
desirable to evidence and effectuate the transactions contemplated by this
Agreement.

 

9.04.        Records.  On
the relevant Vessel Delivery Date, each Transferor shall cause to be delivered
to Acquiror originals, or if originals are not available, photocopies, of all
classification records, engine logs, surveys and warranties, if any, relating
to such Transferor’s Transferor Vessel.

 

9.05.        Earning and Expenses.  From
the First Closing Date to the relevant Charter Completion Date, (i) each
of Vanguard and Colas shall fund the voyage expenses

 

34

 

contemplated
by Section 2.03(h) for its Transferor Vessel, and (ii) Vanguard,
acting through VOC Pool as disponent owner of the Transferor Vessel to be
transferred by Vanguard, and (iii) Colas, acting through VOC Bulk Shipping
N.V. as disponent owner of the Transferor Vessel to be transferred by Colas,
shall retain the income derived from the operation of such Transferor Vessel
for such period, in each case of (i), (ii) and (iii) above, subject
to the adjustment provided for in Section 2.03(h).

 

9.06.        Post First Closing Voyages.  On
the First Closing Date, in the event that there is a time charter or voyage in
effect for the Transferor Vessel to be transferred by either Vanguard or Colas
hereunder, such Transferor shall have the obligation to complete such voyage
pursuant to the Vanguard Head Charter and the Colas Time Charter, as the case
may be.

 

9.07.        Control of Management Companies.  From
the First Closing to the relevant Charter Completion Date, each of Vanguard and
Colas shall provide copies to Acquiror or its relevant nominee of all
correspondence between such Transferor and each commercial and technical manager
operating the relevant Transferor Vessel from the First Closing Date to the
Charter Completion Date.

 

9.08         Delivery.  From
the First Closing Date to the relevant Charter Completion Date, each of
Vanguard and Colas shall keep Acquiror informed of its Transferor Vessel’s
itinerary and give Acquiror, fifteen (15), seven (7) and three (3) days
notice of the expected port that such time charter or voyage will
terminate.  If, and to the extent that a
time charter or voyage in effect as of the First Closing does not terminate on
or before the Outside Charter Date, then the relevant Transferor shall pay
Acquiror an amount in cash equal to $10,000
per day from the Outside Charter Date to the Charter Completion Date,
which payments, if any, shall be independent of, and not be included as part
of, the Post Closing P/L Statement for such Transferor, provided,
however, any such penalty shall be a credit for the benefit of
Acquiror’s account when calculating amounts owed by Acquiror to the relevant
Transferor pursuant to the Section 2.03(h).

 

ARTICLE X

 

MISCELLANEOUS

 

10.01.      Press Releases and Communications. 
Prior to the Closing, no press release or public announcement related to
this Agreement or the transactions contemplated hereby shall be issued or made
without the joint approval of Acquiror and each Transferor, unless required by
applicable law or legal process in which case Acquiror and each Transferor
shall have the right, to the extent reasonably practicable, to review and
comment on such press release or announcement for a period of 48 hours prior to
publication.

 

10.02.      Expenses; Sales Taxes. 
Except as otherwise expressly provided herein, each of Transferor and
Acquiror shall pay all of their own respective costs and expenses (including
attorneys’ and accountants’ fees and expenses) in connection with the
negotiation of this Agreement, the performance of their respective obligations
hereunder and the consummation of the transactions contemplated by this
Agreement (whether consummated or not) except that in the event that the
transactions contemplated hereby are consummated, Acquiror shall pay each
Transferor’s costs in obtaining the appraisals contemplated by this
Agreement.  Each Transferor shall pay the
cost of their respective income, single business, sales, transfer, use, gross
receipts,

 

35

 

registration
and similar taxes arising out of or in connection with the transactions
contemplated by this Agreement.

 

10.03.      Notices.  All
notices, demands and other communications to be given or delivered under or by
reason of the provisions of this Agreement shall be in writing and shall be
delivered by hand or sent by telecopy or sent, postage prepaid, by registered,
certified or express mail or reputable overnight courier service and shall be
deemed given when so delivered by hand or telecopied (together with
confirmation of transmission) or, if mailed, upon receipt (one business day
after mailing in the case of express mail or overnight courier service), as
follows:

 

If to Acquiror:

 

Cavan Maritime Limited

c/o Wexford Capital LLC

411 West Putnam Avenue

Greenwich, CT 06839

Attention:  Frederick Simon

Facsimile:  (203) 862-7311

 

and

 

Cavan Maritime Limited

c/o Wexford Capital LLC

411 West Putnam Avenue

Greenwich, CT 06839

Attention:  Arthur Amron

Facsimile:  (203) 862-7312

 

with a copy to:

 

Reitler Brown &
Rosenblatt LLC

800 Third Avenue, 21st
Floor

New York, New York  10022

Attention:  Edward G. Reitler, Esq.

Facsimile:  (212) 371-5500

 

If to a Transferor:

 

For Colas and Clipper Bulk:

 

P.O. Box CB-13048

Dockendale House

West Bay Street

Nassau, Bahamas

Facsimile: 242 322 4280

 

36

 

For Vanguard:

 

c/o VOC Shipping N.V.

1, Berg Arrarat

P.O. Box 3889

Curacao, Netherlands
Antilles

Facsimile: 5999 461 4129

 

If to Nominee:

 

P.O. Box CB-13048

Dockendale House

West Bay Street

Nassau, Bahamas

Facsimile: 242 322 4280

 

In each case with a copy to:

 

VOC Bulk Shipping U.S.A., Inc.

Five Stamford Landing

78 Southfield Avenue

Stamford, Connecticut 06902

Attention:  President

Facsimile:  1 203 965-7850

 

and

 

Watson, Farley &
Williams (New York) LLP

100 Park Avenue

New York, New York  10017

Attention:  Leo Chang, Esq.

Facsimile:  (212) 922-1512

 

or
to such other address or facsimile number as the party to whom notice is to be
given may have furnished to the other parties in writing in accordance
herewith.

 

10.04.      Assignment.  This
Agreement and the rights and obligations hereunder shall not be assignable by
Acquiror, or the Transferors without the prior written consent of all parties
hereto; provided, however, that no assignment
shall limit or affect the assignor’s obligations hereunder; and provided, further, that Acquiror may assign this Agreement
and any or all of its rights and obligations to an Affiliate of Acquiror provided that Acquiror guarantees such Affiliate’s
obligations under this Agreement.  Any
attempted assignment in violation of this Section 10.04 shall be void.

 

10.05.      Severability. 
Whenever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement (or any portion thereof) or the application of any
such provision (or any portion thereof) to any Person or circumstance is held
by a court of competent jurisdiction to

 

37

 

be
prohibited by or invalid, illegal or unenforceable under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, illegality or unenforceability, without invalidating the remainder
of such provision or the remaining provisions of this Agreement or the
application of such provision to any other Person or circumstance.

 

10.06.      Amendment and Waiver.  Any
provision of this Agreement or the Schedules or Exhibits hereto may be amended
or waived only in a writing signed by the Transferors and Acquiror.  No waiver of any provision hereunder or any
breach or default thereof shall extend to or affect in any way any other provision
or prior or subsequent breach or default. 
No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.  The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.

 

10.07.      Complete Agreement.  This
Agreement contains the complete agreement among the parties hereto and
supersedes any prior understandings, agreements or representations by or among
the parties, written or oral, which may have related to the subject matter
hereof in any way.

 

10.08.      Counterparts.  This
Agreement may be executed in multiple counterparts, any one of which need not
contain the signatures of more than one party, but all such counterparts taken
together shall constitute one and the same instrument, and shall become
effective when one or more such counterparts have been signed by each of the
parties hereto and delivered to the Transferors and Acquiror.

 

10.09.      Governing Law.  All
matters relating to the interpretation, construction, validity and enforcement
of this Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed entirely within such State without giving effect to any choice or
conflict of law provision or rule (whether of the State of New York or any
other jurisdiction) that would cause the application of laws of any
jurisdiction other than the State of New York.

 

10.10.      No Third-Party Beneficiaries. 
Except as provided in Section 9.02, this Agreement is for the sole
benefit of the parties hereto and their permitted assigns and nothing herein
expressed or implied shall give or be construed to give to any Person, other
than the parties hereto and such assigns, any legal or equitable rights
hereunder.

 

10.11.      Interpretation.  The
headings contained in this Agreement, in any Exhibit or Schedule attached
hereto and in the table of contents to this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.

 

10.12.      Consent to Jurisdiction.  Each
party hereto irrevocably submits to the co-exclusive jurisdiction of (i) the
Supreme Court of the State of New York, New York County and (ii) the
United States District Court for the Southern District of New York, for the
purposes of any suit, action or other proceeding arising out of this Agreement
or any transaction contemplated hereby. 
Each party hereto further agrees that service of any process, summons,
notice or documents by United States registered mail to such party’s respective
address for notices set forth in Section 10.03 shall be effective service
of process for any action, suit or

 

38

 

proceeding
in New York with respect to any matters to which it has submitted to
jurisdiction in this Section 10.12. Each party hereto irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in (A) the Supreme Court of the State of New York, New York County
and (B) the United States District Court for the Southern District of New
York, and hereby further irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.

 

10.13.      WAIVER OF JURY TRIAL. 
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AN ALL RIGHTS TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT THE OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.13.

 

[*       *      
*]

 

39

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.

 

	
   

  	
  CAVAN
  MARITIME LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Frederick Simon

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Frederick Simon

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  VANGUARD
  ULTRAMAX LLC

  
	
   

  	
  By VOC SHIPPING N.V., its
  sole member

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Ed H. Karelse

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Ed
  H. Karelse

  
	
   

  	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
  COLAS
  ORCHID LTD.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Henrik Lund Dal

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Henrik
  Lund Dal

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  CLIPPER
  BULK SHIPPING LTD.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Henrik Lund Dal

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Henrik Lund Dal

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  VOC
  INVEST LTD.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Henrik Lund Dal

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Henrik Lund Dal

  
	
   

  	
   

  	
  Title:

  	
  Director

  
						

 

 

Asset Purchase Agreement
Signature Page

 

 

Schedule I

 

	
  Transferor

  	
   

  	
  Transferor Vessel

  	
   

  	
  Flag

  	
   

  	
  Official Number

  	
   

  
	
  Vanguard Ultramax LLC

  	
   

  	
  VOC Enterprise

  	
   

  	
  Bahamas

  	
   

  	
  8000988

  	
   

  
	
  Colas Orchid Ltd.

  	
   

  	
  VOC Orchid

  	
   

  	
  Bahamas

  	
   

  	
  732000

  	
   

  
	
  Clipper Bulk Shipping Ltd.

  	
   

  	
  Clipper Gem

  	
   

  	
  Liberia

  	
   

  	
  8877

  	
   

  
	
  Clipper Bulk Shipping Ltd.

  	
   

  	
  Clipper Glory

  	
   

  	
  Liberia

  	
   

  	
  9238

  	
   

  

 

 

Schedule II

 

Exclusions from Vessel Assets

 

VOC Enterprise
–  None.

 

	
  VOC Orchid –

  	
   

  
	
  oxygen

  	
  40

  	
  unitor

  	
  12 cyls (10 cyls full + 2
  cyls empty)

  
	
  acetelene

  	
  40

  	
  unitor

  	
  4 cyls (2 cyls full + 1
  cyl empty + 1 cyl in use)

  
	
  freon 22

  	
  56 kgs

  	
  unitor

  	
  3 cyls (1 cyl full + 1 cyl
  empty + 1 cyl half-full)

  
	
  portable - 13.3 kgs

  	
  1 cyl (empty)

  

 

 

Gem – [    ]

 

Glory – [    ]

 

 

Schedule III

 

Vanguard Spare Parts in Excess of Class Requirements

 

• Ship’s MINI-M and associated PC with Email +
fax machine = $ 5.442

• 4 PCs (Master - Ch.Eng - Ch.Off - ship’s
office) with 4 printers and ink cartridges = $ 5.875

• Portable pump for deck = $ 1.080

• Portable pump for engine = $ 840

• Portable pump for oil spill kit = $ 1.080

• 2 cranes hoisting spare wire ropes = $ 6.515

• 2 cranes luffing spare wire ropes = $ 1.882

• 1 spare wire rope for ship’s gangway = $ 97

• 1 spare wire rope for engine room crane = $
265

• 1 spare wire rope for provisions crane = $
410

• 1 spare wire for pilot assist ladder = $ 106

• 1 spare wire for bunkers’ davit = $ 97

• 2 mooring ropes - special for tugboats = $
5.502

• 2 mooring additional ropes = $ 4.006

• (we supplied total 8 mooring ropes. The vsl
was delivered by the yard with the minimally required 6 ropes only, the above
2+2 are in excess of our safety requirements)

• 2 laundry machines = $ 473

• 2 jet chisels = $ 324

• 2 microwave oven = $ 473

• 2 TV colour = $ 331

• 648 mtrs Hatch cover tape = $ 2.937

• 1 Paint spray airless and accessories = $
3.479

• 1 Paint stripper pneumatic = $ 432

• 1 hold cleaning gun water TOBEY and
accessories(high pressure hoses)=$ 1.173

• 1 Grease lubricator air operated and hoses =
$ 662

• 1 Portable Electrowelding machine and cable
= $ 890

• 1 chipping hammer = $ 225

• 1 scaling hammer pneumatic = $ 83

• 2 photocopy machine with cartridges = $
2.295

 

Colas Spare Parts in Excess of Class Requirements

 

• GLOBE E-MAIL system comprising of 1 Lap-top
computer + HF Radio Link = $2500/-

•  SAT-B
system comprising of Telephone, Fax and E-mail systems = $ 20.000/-

   (please note sat-b system not included in
Safety Radio Cert/Equipment)

•  1 fax
machine = $300/-

•  3 PCs
(Master - Ch.Eng - ship’s office) with 3 printers and ink cartridges = $4400/-

• 
Portable pump for deck = $2000/-

• 
Portable pump for engine = $2000/-

•  2
Portable pumps for oil spill kit = $400/-

•  2
crane hoisting spare wire ropes = $6000/-

 

 

•  2 crane luffing spare wire ropes  = $6000/-

•  1
spare wire rope for lifeboat falls = $1500/-

•  2
spare wire for pilot assist ladder = $700/-

•  4
mooring additional ropes (just recd at charleston) = 7180/-

•  2
laundry machines = $300/-

•  5 jet
chisels ( 1 new + 4 in use ) = $500/-

•  2
microwave oven = $1200/-

•  4 TV
colour (off/crew smoke rooms, Master and Ch/Engr’s cabins) = $2300/-

•  4 DVD
players (off/crew smoke rooms, Master and Ch/Engr’s cabins) = $450/-

•  4
VCRs (off/crew smoke rooms, Master, Ch/Engr’s cabins) = $600/-

•  3
Music systems (off/crew smoke room, Master, Ch/Engr and 2nd/Engr)$1200/-

•  150
mtrs Hatch cover tape = $ 3000/-

•  1
Paint spray airless and accessories = $1500/-

•  1
hold cleaning gun TOBEY with accessories = $500/-

•  1 KEW
MACHINE  (high pressure cold water
cleaner with accessories) = $3000/-

•  1
Grease lubricator air operated and hoses = 1800/-

•  1
Portable Electrowelding machine and cable = $375/-

•  3
scaling hammer pneumatic (2 new + 1 in use - with 21 spare heads) = $1200/-

•  1
photocopy machine with cartridges = $600/-

•  1
Deck Compressor (Brand New - Unused as yet) = $6000/-

   Make: ATLAS COPCO, Type: GA-30, Capacity:
5.58 cu.m/min., Pr. 7.4 bar

   Motor: 30 kw, 3555 rpm

•  abt
2378 ltrs of paint = $ 3/ltr

•  abt
394 ltrs of thinner =$ 1.1.7/ltr

 

Clipper Glory Spare Parts in Excess of Class Requirements

 

	
  1. Cabin:

  	
   

  	
   

  	
   

  	
   

  
	
  Washing machines- 5

  	
   

  	
  $

  	
  2750.00

  	
   

  
	
  Drying Mc -2

  	
   

  	
  $

  	
  1000.00

  	
   

  
	
  VCR –5

  	
   

  	
  $

  	
  1250.00

  	
   

  
	
  DVD -4

  	
   

  	
  $

  	
  1000.00

  	
   

  
	
  TV -5

  	
   

  	
  $

  	
  1500.00

  	
   

  
	
  Fridge -8

  	
   

  	
  $

  	
  2000.00

  	
   

  
	
  Music system -5

  	
   

  	
  $

  	
  2000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2. Bridge/radio room etc:

  	
   

  	
   

  	
   

  	
   

  
	
  communication
  instrument Amos fleet 77, Laptop-1

  	
   

  	
  $

  	
  30,000.00

  	
   

  
	
  Fax machine
  combined printer, scanner- 1

  	
   

  	
  $

  	
  1000.00

  	
   

  
	
  Photocopiers- 2

  	
   

  	
  $

  	
  1500.00

  	
   

  
	
  Scanner A4- 1

  	
   

  	
  $

  	
  300.00

  	
   

  
	
  Loading
  instrument ch/o cabin, laptop -1

  	
   

  	
  $

  	
  1250.00

  	
   

  
	
  Working Pcs- 7
  (Non working pc-1, laptop -1)

  	
   

  	
  $

  	
  8000.00

  	
   

  
	
  Printers-7

  	
   

  	
  $

  	
  2100.00

  	
   

  
	
  Digital camera
  floppy type- 1

  	
   

  	
  $

  	
  650.00

  	
   

  

 

 

	
  3. Deck:

  	
   

  	
   

  	
   

  	
   

  
	
    hatch
  cover wheel- 11pcs

  	
   

  	
  $

  	
  16,000.00

  	
   

  
	
    Cleats
  assembly -60 pcs

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
    Packing
  straights- 100 mtrs

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
    Ropes
  hawser- 2

  	
   

  	
  $

  	
  4,000.00

  	
   

  
	
    Wires-
  2

  	
   

  	
  $

  	
  1200.00

  	
   

  
	
    Submersible
  pp- 2

  	
   

  	
  $

  	
  800.00

  	
   

  
	
    Air
  assisted water washers (Combi-gun)-2

  	
   

  	
  $

  	
  3000.00

  	
   

  
	
    Air/electric
  deck scaling machines Rustibus:-2

  	
   

  	
  $

  	
  8000.00

  	
   

  
	
    Set
  of spray foam/chemical application equipment-1

  	
   

  	
  $

  	
  5000.00

  	
   

  
	
    Scaffolding
  -1

  	
   

  	
  $

  	
  5000.00

  	
   

  
	
    Sand
  blaster-1

  	
   

  	
  $

  	
  8000.00

  	
   

  
	
    Painting
  machine- 1

  	
   

  	
  $

  	
  8000.00

  	
   

  
	
    Greasing
  machine- 1

  	
   

  	
  $

  	
  1200.00

  	
   

  
	
    Deck
  Compressor - 1

  	
   

  	
  $

  	
  12,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Miscellaneous
  cleaning tools:

  	
   

  	
   

  	
   

  
	
  Ladders -2

  	
   

  	
  $

  	
  800.00

  	
   

  
	
  Brooms of
  various types-15

  	
   

  	
  $

  	
  250.00

  	
   

  
	
  Brushes of
  assorted sizes -20

  	
   

  	
  $

  	
  250.00

  	
   

  
	
  Squeezees - 4

  	
   

  	
  $

  	
  200.00

  	
   

  
	
  Shovels -6

  	
   

  	
  $

  	
  400.00

  	
   

  
	
  Scrapers of
  different widths-20

  	
   

  	
  $

  	
  200.00

  	
   

  
	
  Extension poles
  or man-helpers-1

  	
   

  	
  $

  	
  600.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Safety gear:

  	
   

  	
   

  	
   

  
	
  Complete sets of
  protective clothing (chemical suits)-10

  	
   

  	
  $

  	
  8000.00

  	
   

  
	
  Fall arrest gear
  (safety harnesses-2 pcs, belts and the like- 4pcs

  	
   

  	
  $

  	
  600.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3. Engine:

  	
   

  	
   

  	
   

  
	
  ME cylinder
  liner - 1 pc

  	
   

  	
  $

  	
  22,000.00.

  	
   

  
	
  ME piston,
  complete - 1 pc.

  	
   

  	
  $

  	
  14,000.00

  	
   

  
	
  ME piston crown
  - 2 pcs.

  	
   

  	
  $

  	
  9000.00

  	
   

  
	
  ME piston ring,
  right - 2 pcs.

  	
   

  	
  $

  	
  800.00

  	
   

  
	
  ME piston ring,
  opposite - 2 pcs.

  	
   

  	
  $

  	
  800.00

  	
   

  
	
  ME stuffing box,
  complete assy - 1 pc.

  	
   

  	
  $

  	
  4500.00

  	
   

  
	
  ME cylinder
  cover, complete - 1 pc.

  	
   

  	
  $

  	
  19000.00

  	
   

  
	
  ME exhaust
  valve, complete - 3 pcs.

  	
   

  	
  $

  	
  28,000.00

  	
   

  
	
  ME exhaust valve
  spindle - 3 pcs.

  	
   

  	
  $

  	
  8,000.00

  	
   

  
	
  ME exhaust valve
  seat - 7 pcs.

  	
   

  	
  $

  	
  3000.00

  	
   

  
	
  ME starting
  valve, complete - 1 pc.

  	
   

  	
  $

  	
  2500.00

  	
   

  
	
  ME crosshead
  bearing shell, complete - 1 set

  	
   

  	
  $

  	
  6000.00

  	
   

  
	
  ME crankpin
  bearing shell, complete - 1 set

  	
   

  	
  $

  	
  5000.00

  	
   

  
	
  ME bearing
  shell, main, lower - 1 pc.

  	
   

  	
  $

  	
  2500.00

  	
   

  

 

 

	
  ME bearing shell,
  main, upper - 1 pc.

  	
   

  	
  $

  	
  1500.00

  	
   

  
	
  ME fuel pump
  barrel, assy - 6 pcs.

  	
   

  	
  $

  	
  18,000.00

  	
   

  
	
  ME fuel
  injection valve - 10 pcs.

  	
   

  	
  $

  	
  30,000.00

  	
   

  
	
  ME turbocharger
  bearing T.E, complete 1 pc.

  	
   

  	
  $

  	
  6000.00

  	
   

  
	
  ME turbocharger
  bearing C.E, complete - 1 pc.

  	
   

  	
  $

  	
  4000.00

  	
   

  
	
  AE’s cylinder
  liner - 1 pc.

  	
   

  	
  $

  	
  3500.00

  	
   

  
	
  AE’s piston - 4
  pcs.

  	
   

  	
  $

  	
  8000.00

  	
   

  
	
  AE’s piston
  gudgeon pin - 3 pcs.

  	
   

  	
  $

  	
  1500.00

  	
   

  
	
  AE’s piston ring
  set, complete - 6 pcs.

  	
   

  	
  $

  	
  4800.00

  	
   

  
	
  AE’s big end
  bearing shell, lower - 4 pcs.

  	
   

  	
  $

  	
  2400.00

  	
   

  
	
  AE’s big end
  bearing shell, upper - 4 pcs.

  	
   

  	
  $

  	
  2400.00

  	
   

  
	
  AE’s rocker arm
  and bracket, complete - 1 pc.

  	
   

  	
  $

  	
  1200.00

  	
   

  
	
  AE’s fuel
  injection pump, complete - 4 pcs.

  	
   

  	
  $

  	
  12,000.00

  	
   

  
	
  AE’s fuel
  injection pump element - 2 pcs.

  	
   

  	
  $

  	
  2400.00

  	
   

  
	
  AE’s fuel
  injection valve - 4 pcs.

  	
   

  	
  $

  	
  3200.00

  	
   

  
	
  AE’s connecting
  rod - 3 pcs.

  	
   

  	
  $

  	
  19,200.00

  	
   

  
	
  AE’s gudgeon pin
  bearing bush - 2 pcs.

  	
   

  	
  $

  	
  1600.00

  	
   

  
	
  AE’s air
  starting motor, complete - 1 pc.

  	
   

  	
  $

  	
  4000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4. Others:

  	
   

  	
   

  	
   

  
	
  Ejector pump for
  fresh water generator, complete - 1 pc.

  	
   

  	
  $

  	
  8,000.00

  	
   

  
	
  Distilate water
  pump for fresh water generator, complete - 1 pc.

  	
   

  	
  $

  	
  4,000.00

  	
   

  
	
  Electric welding
  machine - 2 pcs.

  	
   

  	
  $

  	
  4000.00

  	
   

  
	
  Breathing air
  compressor – 1 pc.

  	
   

  	
  $

  	
  12,000.00

  	
   

  
	
  Oxygen (O– 40) -
  25 btls.

  	
   

  	
  $

  	
  17,500.00

  	
   

  
	
  Acetylene (A –
  40) – 13 btls.

  	
   

  	
  $

  	
  9,100.00

  	
   

  
	
  Refrigerant
  agent (R – 22) - 6 btls.

  	
   

  	
  $

  	
  4200.00

  	
   

  

 

Clipper Gem Spare Parts in Excess of Class Requirements

 

• see following pages

 

 

SPARE PARTS ABOVE THE CLASS REQUIREMENT

 

	
   

  	
   

  	
  MAIN ENGINE

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  S No.

  	
   

  	
  ARTICLE

  	
   

  	
  EXTRA

  	
   

  	
  COST

  	
   

  
	
  1

  	
   

  	
  FUEL INJ. ASSY.

  	
   

  	
  2

  	
   

  	
  6000

  	
   

  
	
  2

  	
   

  	
  EXHAUST VALVE

  	
   

  	
  2 SET

  	
   

  	
  12000

  	
   

  
	
  3

  	
   

  	
  PISTON RING

  	
   

  	
  1 SET

  	
   

  	
  10000

  	
   

  
	
  4

  	
   

  	
  STARTING VALVE

  	
   

  	
  1

  	
   

  	
  4000

  	
   

  
	
  5

  	
   

  	
  PUMP BARREL WITH PLUNGER

  	
   

  	
  2 (OLD)

  	
   

  	
  8000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AUXILIARYENGINE

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  S No.

  	
   

  	
  ARTICLE

  	
   

  	
  EXTRA

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  PISTON

  	
   

  	
  1

  	
   

  	
  3000

  	
   

  
	
  2

  	
   

  	
  PISTON RINGB SET

  	
   

  	
  5 SET

  	
   

  	
  4000

  	
   

  
	
  3

  	
   

  	
  INLET VALVE

  	
   

  	
  6

  	
   

  	
  2400

  	
   

  
	
  4

  	
   

  	
  EXHAUST VALVE

  	
   

  	
  6

  	
   

  	
  2400

  	
   

  
	
  5

  	
   

  	
  FUEL INJECTION NOZZLE ASSY.

  	
   

  	
  4(OLD)

  	
   

  	
  2400

  	
   

  
	
  6

  	
   

  	
  CRANK PIN BEARING

  	
   

  	
  5 SET

  	
   

  	
  3000

  	
   

  
	
  7

  	
   

  	
  MAIN BEARING

  	
   

  	
  3 SET

  	
   

  	
  2800

  	
   

  
	
  8

  	
   

  	
  THRUST BEARING

  	
   

  	
  3 SET

  	
   

  	
  3000

  	
   

  
	
  9

  	
   

  	
  CONNECTING ROD

  	
   

  	
  3 (OLD)

  	
   

  	
  12000

  	
   

  
	
  10

  	
   

  	
  HIGH PRESSURE PIPES

  	
   

  	
  7

  	
   

  	
  7000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  82000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Oxygen bottles

  	
   

  	
  14

  	
   

  	
  10080

  	
   

  
	
  Acetylene

  	
   

  	
  11

  	
   

  	
  7920

  	
   

  
	
  Referigerant

  	
   

  	
  3

  	
   

  	
  2160

  	
   

  
	
  Welding machines

  	
   

  	
  2

  	
   

  	
  4000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
  106160

  	
   

  

 

 

1. CABIN

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  LAST STOCK

  	
   

  	
  RCV IN
  DUE MONTH

  	
   

  	
  USED IN
  DUE MONTH

  	
   

  	
  STOCK
  END MONTH

  	
   

  	
   

  	
   

  
	
  NR.

  	
   

  	
  ITEM
  NAME

  	
   

  	
  CODE

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  USDCost

  	
   

  
	
   

  	
   

  	
  New Llinen

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  bed sheet

  	
   

  	
   

  	
   

  	
  6

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  4

  	
   

  	
  pcs

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  100

  	
   

  
	
  2

  	
   

  	
  blankets

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  300

  	
   

  
	
  3

  	
   

  	
  iron appliance

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pc

  	
   

  	
  100

  	
   

  
	
  4

  	
   

  	
  pillow case

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  50

  	
   

  
	
  5

  	
   

  	
  table sheet

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  100

  	
   

  
	
  6

  	
   

  	
  Bath towels cotton blue

  	
   

  	
   

  	
   

  	
  18

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  8

  	
   

  	
  pcs

  	
   

  	
  10

  	
   

  	
  pcs

  	
   

  	
  250

  	
   

  
	
  7

  	
   

  	
  towels big white

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  50

  	
   

  
	
  8

  	
   

  	
  Face towel cotton blue

  	
   

  	
   

  	
   

  	
  20

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  8

  	
   

  	
  pcs

  	
   

  	
  12

  	
   

  	
  pcs

  	
   

  	
  120

  	
   

  
	
  9

  	
   

  	
  towels medium white

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  50

  	
   

  
	
  10

  	
   

  	
  towels small white

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  25

  	
   

  
	
  11

  	
   

  	
  window sheet

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  120

  	
   

  
	
  12

  	
   

  	
  Pantry towel cotton

  	
   

  	
   

  	
   

  	
  10

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  4

  	
   

  	
  pcs

  	
   

  	
  6

  	
   

  	
  pcs

  	
   

  	
  300

  	
   

  
	
  13

  	
   

  	
  Non skid sheet mesh width

  	
   

  	
   

  	
   

  	
  10

  	
   

  	
  mtr

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  4

  	
   

  	
  mtr

  	
   

  	
  6

  	
   

  	
  mtr

  	
   

  	
  300

  	
   

  
	
   

  	
   

  	
  Used Linen

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14

  	
   

  	
  bed sheet

  	
   

  	
   

  	
   

  	
  76

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  76

  	
   

  	
  pcs

  	
   

  	
  800

  	
   

  
	
  15

  	
   

  	
  blankets

  	
   

  	
   

  	
   

  	
  3

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pcs

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  100

  	
   

  
	
  16

  	
   

  	
  pellot sheet

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  50

  	
   

  
	
  17

  	
   

  	
  pillows sheet

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  50

  	
   

  
	
  18

  	
   

  	
  table sheet

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  50

  	
   

  
	
  19

  	
   

  	
  towels big

  	
   

  	
   

  	
   

  	
  4

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  4

  	
   

  	
  pcs

  	
   

  	
  100

  	
   

  
	
  20

  	
   

  	
  towels small

  	
   

  	
   

  	
   

  	
  9

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  9

  	
   

  	
  pcs

  	
   

  	
  100

  	
   

  
	
  21

  	
   

  	
  vacuum cleaner

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  3615

  	
   

  

 

 

3.
Deck

 

a. Hatch covers spares

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  LAST
  STOCK

  	
   

  	
  RCV IN
  DUE MONTH

  	
   

  	
  USED IN
  DUE MONTH

  	
   

  	
  STOCK
  END MONTH

  	
   

  	
   

  	
   

  
	
  NR.

  	
   

  	
  ITEM NAME

  	
   

  	
  CODE

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  Cost USD

  	
   

  
	
  1

  	
   

  	
  Hatch covers rubber pad

  	
   

  	
   

  	
   

  	
  140

  	
   

  	
  mtr

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  140

  	
   

  	
  mtr

  	
   

  	
  14000

  	
   

  
	
  2

  	
   

  	
  HC rubber pad, flat angle joint

  	
   

  	
   

  	
   

  	
  12

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  12

  	
   

  	
  pcs

  	
   

  	
  5000

  	
   

  
	
  3

  	
   

  	
  HC rubber pad, 90 “L” shaped

  	
   

  	
   

  	
   

  	
  12

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  12

  	
   

  	
  pcs

  	
   

  	
  5000

  	
   

  
	
  4

  	
   

  	
  HC rubber pad, three-way pad

  	
   

  	
   

  	
   

  	
  6

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  6

  	
   

  	
  pcs

  	
   

  	
  6000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  30000

  	
   

  

 

b. Spare new rope

NIL

 

c. Wire ropes

 

	
  Construction

  	
   

  	
  Length

  	
   

  	
  Intended to use

  	
   

  	
  Where stowed

  	
   

  	
  Cost USD

  	
   

  
	
  Wire rope,
  galvanized, 6x24+FC, D=14.0mm

  	
   

  	
  60.00

  	
   

  	
   

  	
   

  	
  Fwd bsn’s stores

  	
   

  	
  2200

  	
   

  
	
  Wire rope,
  galvanized, 6x36+FC, D=12.0mm

  	
   

  	
  92.00

  	
   

  	
   

  	
   

  	
  Fwd bsn’s store

  	
   

  	
  4000

  	
   

  
	
  Wire rope 7 x
  19, D=4mm

  	
   

  	
  200

  	
   

  	
  Life boat launcing

  	
   

  	
  Bsn’s store deck A

  	
   

  	
  2000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  8200

  	
   

  

 

d. Portable pumps

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  LAST STOCK

  	
   

  	
  RCV IN DUE

  MONTH

  	
   

  	
  USED IN DUE

  MONTH

  	
   

  	
  STOCK END

  MONTH

  	
   

  	
   

  	
   

  
	
  NR.

  	
   

  	
  ITEM NAME

  	
   

  	
  CODE

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  Cost USD

  	
   

  
	
  1

  	
   

  	
  Air operated double diaphragm pump

  	
   

  	
  OPP

  	
   

  	
  1

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pc

  	
   

  	
  3600

  	
   

  
	
   

  	
   

  	
  WILDEN
  Model M4 Metal, w/t access.

  	
   

  	
  Masthouse

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  Submerge pump, W/T
  accessories

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pc

  	
   

  	
  4000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  7600

  	
   

  

 

 

e. Hold cleaning equipment

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  LAST
  STOCK

  	
   

  	
  RCV IN
  DUE MONTH

  	
   

  	
  USED IN
  DUE MONTH

  	
   

  	
  STOCK
  END MONTH

  	
   

  	
   

  	
   

  
	
  NR.

  	
   

  	
  ITEM NAME

  	
   

  	
  CODE

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  Cost USD

  	
   

  
	
  1

  	
   

  	
  DEMUCKING WINCH, Type : AIRCOM TOOLS,

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  set

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  set

  	
   

  	
  6000

  	
   

  
	
   

  	
   

  	
  EKCA 2/MS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  Chemical dosing container, vol.150 ltrs. (w/Acc.)

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  set

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  set

  	
   

  	
  800

  	
   

  
	
  3

  	
   

  	
  Combigun Type : Water Tobey (w/accessories)

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  set

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  set

  	
   

  	
  1500

  	
   

  
	
  4

  	
   

  	
  Combigun Type : VP water gun (w/accessories)

  	
   

  	
  STROMME

  	
   

  	
  1

  	
   

  	
  set

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  set

  	
   

  	
  2000

  	
   

  
	
  5

  	
   

  	
  Galvanized scaffolding for working of 16m

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  set

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  set

  	
   

  	
  5000

  	
   

  
	
  6

  	
   

  	
  HP cleaner HPC66, 190 bar, 60Hz

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  5600

  	
   

  
	
  7

  	
   

  	
  Heavy duty hose, 15mtrs / for HP cleaner

  	
   

  	
   

  	
   

  	
  3

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  3

  	
   

  	
  pcs

  	
   

  	
  2400

  	
   

  
	
  8

  	
   

  	
  Sand container for VSB300

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pc

  	
   

  	
  800

  	
   

  
	
  9

  	
   

  	
  Powerspeed lance (for HPC66),

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pc

  	
   

  	
  800

  	
   

  
	
   

  	
   

  	
  & 6 nozzle spare for HPC - 66, 62, 53, 52, 42

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10

  	
   

  	
  Long reach lance, F/All models

  	
   

  	
   

  	
   

  	
  3

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  3

  	
   

  	
  pcs

  	
   

  	
  2400

  	
   

  
	
  11

  	
   

  	
  Rottary brush 170cm long, for 03K pump

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  2000

  	
   

  
	
  12

  	
   

  	
  Chemical injector datachable, for 03K pumps

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  1000

  	
   

  
	
  13

  	
   

  	
  ladder alluminium used (diff.size)

  	
   

  	
   

  	
   

  	
  6

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  6

  	
   

  	
  pcs

  	
   

  	
  3600

  	
   

  
	
  14

  	
   

  	
  BROOM CORN WHISK HAND

  	
   

  	
   

  	
   

  	
  5

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  5

  	
   

  	
  pcs

  	
   

  	
  250

  	
   

  
	
  15

  	
   

  	
  LONG HANDLED BROOMS

  	
   

  	
   

  	
   

  	
  13

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  8

  	
   

  	
  pcs

  	
   

  	
  5

  	
   

  	
  pcs

  	
   

  	
  250

  	
   

  

 

f. HP washers

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  LAST
  STOCK

  	
   

  	
  RCV IN
  DUE MONTH

  	
   

  	
  USED IN
  DUE MONTH

  	
   

  	
  STOCK
  END MONTH

  	
   

  	
   

  	
   

  
	
  NR.

  	
   

  	
  ITEM NAME

  	
   

  	
  CODE

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  HP cleaner HPC66, 190 bar, 60Hz (deck + E/R) 

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  6000

  	
   

  
	
   

  	
   

  	
  POSEIDON 1280

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

g. Pneumatic pumps

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  LAST
  STOCK

  	
   

  	
  RCV IN
  DUE MONTH

  	
   

  	
  USED IN
  DUE MONTH

  	
   

  	
  STOCK
  END MONTH

  	
   

  	
   

  	
   

  
	
  NR.

  	
   

  	
  ITEM
  NAME

  	
   

  	
  CODE

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Air operated
  double diaphragm pump

  	
   

  	
  OPP

  	
   

  	
  1

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pc

  	
   

  	
  2000

  	
   

  
	
   

  	
   

  	
  WILDEN Model M4 Metal,
  w/t access.

  	
   

  	
  Masthouse

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

h. Chipping, sandblasting and paint
machines

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  LAST
  STOCK

  	
   

  	
  RCV IN
  DUE MONTH

  	
   

  	
  USED IN
  DUE MONTH

  	
   

  	
  STOCK
  END MONTH

  	
   

  	
   

  	
   

  
	
  NR.

  	
   

  	
  ITEM
  NAME

  	
   

  	
  CODE

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Airless Spray gun GRACO Model 224-020, Series A

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HEAVY DUTY REVERSE-A-CLEAN F/GRACO

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pcs

  	
   

  	
  2000

  	
   

  
	
  2

  	
   

  	
  Hose airless spray paint machine

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pc

  	
   

  	
  8000

  	
   

  
	
  3

  	
   

  	
  Wrench air driven

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pc

  	
   

  	
  2000

  	
   

  
	
  4

  	
   

  	
  Grinding machine (air)

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  2000

  	
   

  
	
  5

  	
   

  	
  Mixer paint air driven

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pc

  	
   

  	
  2000

  	
   

  
	
  6

  	
   

  	
  Sand blas machine with accessories

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pcs

  	
   

  	
  12000

  	
   

  
	
   

  	
   

  	
  Cyclone Blasting System

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
  Sand blast mask“Bullard”,77/46 Series

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pc

  	
   

  	
  8000

  	
   

  
	
  8

  	
   

  	
  Jet Chisel, Model JAX-24

  	
   

  	
   

  	
   

  	
  4

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  4

  	
   

  	
  pcs

  	
   

  	
  2000

  	
   

  
	
  9

  	
   

  	
  Jet Chisel, Model JAX-28

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  1000

  	
   

  
	
  10

  	
   

  	
  Electric Scaling Machine (w/accessories)

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2

  	
   

  	
  pcs

  	
   

  	
  5000

  	
   

  
	
   

  	
   

  	
  WEG Electric Motors Corp.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Model 6VC56C17F5524F / FR-56-70 / Type - SCS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RPM - 1725 / HP = 3/4, HZ - 60

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

i. Grease machines

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  LAST
  STOCK

  	
   

  	
  RCV IN
  DUE MONTH

  	
   

  	
  USED IN
  DUE MONTH

  	
   

  	
  STOCK
  END MONTH

  	
   

  	
   

  	
   

  
	
  NR.

  	
   

  	
  ITEM
  NAME

  	
   

  	
  CODE

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
  QTTY

  	
   

  	
  UNIT

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Greasing pump air driven

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pcs

  	
   

  	
  1200

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  I. Deck compressors

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  pc

  	
   

  	
  12000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.Bridge:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  • Pc’s - 2 pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2400

  	
   

  
	
   

  	
   

  	
  • Printers - 2 pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  800

  	
   

  
	
   

  	
   

  	
  • Photocopier - 1 pc

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  800

  	
   

  
	
   

  	
   

  	
  • Fax - 1 pc

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  600

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.Recreation equipment

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  • Tv - 4 pcs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1200

  	
   

  
	
   

  	
   

  	
  • DVD - 1 pc

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  300

  	
   

  
	
   

  	
   

  	
  • VCR - 1 pc

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  300

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  106000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total for Deck:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  155415

  	
   

  

 

 

Schedule IV

 

Description of Substitute Vessels

 

A.    One panamax bulk carrier, deadweight,
approximately 76,000 tons – Vessel Average as of the execution hereof is equal
to $47,437,500.

 

B.    One handy bulk carrier, deadweight,
approximately 20,000 tons -  Vessel
Average as of the execution hereof is equal to $20,375,000.

 

C.    One handy bulk carrier, deadweight,
approximately 20,000 tons -  Vessel
Average as of the execution hereof is equal to $20,375,000.

 

 

EXHIBITS

 

	
  Exhibit A

  	
   

  	
  Form of Officer’s Certificate

  
	
   

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  Form of Investor Rights Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit C

  	
   

  	
  Form of Lock-Up Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  Form of Indemnification Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit E

  	
   

  	
  Form of Commercial Management Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit F

  	
   

  	
  Form of Vanguard Novation Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit G

  	
   

  	
  Form of Vanguard Head Charter

  
	
   

  	
   

  	
   

  
	
  Exhibit H

  	
   

  	
  Form of Colas Charter Novation Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit I

  	
   

  	
  Form of Colas TM Novation Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit J

  	
   

  	
  P&I Indemnity

  

 

 

 

Schedule 4.03(b)

 

Authorization; 
No Breach;  Valid and Binding
Agreement

 

No exceptions.

 

 

Schedule 4.04

 

Title to Properties

 

Vanguard :  Prior to the relevant Vessel Delivery Date,
the vessel VOC ENTERPRISE will be subject to (i) a statutory mortgage and
deed of covenants in favor of Fortis Bank Nederland N.V., and (ii) an
entry into the VOC Pool.  Commencing on
the First Closing Date, the vessel VOC ENTERPRISE will be subject to the
Vanguard Head Charter.

 

Colas :  Prior to the relevant Charter Completion
Date, the vessel VOC ORCHID will be subject to the Colas Time Charter.  Prior to the relevant Vessel Delivery Date,
the vessel VOC ORCHID will be subject to a statutory mortgage and deed of
covenants in favor of Danmarks Skibskreditfond, Nordea Bank Danmark A/S and
Nordea Bank Finland plc.

 

 

Schedule 4.09

 

Governmental Consents

 

No exceptions.

 

 

Schedule 5.02(a)

 

	
  Shareholder

  	
   

  	
  Number of Shares

  	
   

  	
  Class

  
	
  North American
  Carriers Ltd. or its subsidiary

  	
   

  	
   

  	
  *

  	
  Common

  
	
  North American
  Carriers II Ltd. or its subsidiaries

  	
   

  	
   

  	
  *

  	
  Common

  
	
  VOC Invest, Ltd.

  	
   

  	
   

  	
  *

  	
  Common

  
	
  Callidus
  Investors LLC

  	
   

  	
  1,000

  	
   

  	
  Common

  
	
  Total

  	
   

  	
   

  	
  **

  	
   

  

 

* Acquiror shall issue
shares of Common Stock to each of North American Carriers Ltd. or its
subsidiary, North American Carriers II Ltd. or its subsidiaries and Nominee as
nominee of Transferors in exchange for certain vessels, such number of shares,
with respect to the Transferor Vessels, as determined herein, and with respect
to the Acquiror Vessels, as determined by such vessels’ IPO Appraised Value.

 

** Does not reflect
shares of Common Stock to be issued by Acquiror on the First Closing Date in
its IPO, or the issuance of shares of Common Stock to Nominee on the Second
Closing Date and Third Closing Date, as the case may be, in partial
consideration for the Transferor Vessel(s) to be transferred by Clipper Bulk,
of which as of the First Closing Date Acquiror shall be reserving shares
representing twenty-five percent (25%) of the IPO Appraised Value of each such
vessel for issuance to Nominee on the relevant Closing Date.  On the First Closing Date, Acquiror will
close the sale of its shares of Common Stock in its IPO.

 

Immediately prior to the
IPO, Acquiror shall update this Schedule 5.02(a) to reflect the
number of shares to be issued to each of North American Carriers Ltd. or its subsidiary,
North American Carriers II Ltd. or its subsidiaries and Nominee.

 

 

Schedule 5.02(b)

 

In connection with the
IPO, Acquiror granted its underwriters an option, exercisable for thirty (30)
days after the First Closing Date, to purchase from time to time additional
shares of Common Stock up to an aggregate of fifteen percent (15%) of the
number of shares of Common Stock offered in the IPO at a purchase price equal
to the IPO price less underwriting discounts and commissions.

 

Acquiror’s 2005 Equity
Incentive Plan (the “Plan”) shall
become effective prior to the IPO, the shares reserved thereunder to comprise
no more than six percent (6%) of the issued and outstanding shares of Acquiror,
which shall include the shares of Common Stock to be issued to Nominee
hereunder, the shares of Common Stock issued to North American Carriers Ltd.
and North American Carriers II Ltd. and the number of shares to be offered in
the IPO.  In conjunction with the IPO,
Acquiror intends to grant certain stock options under the Plan to employees,
officers and consultants and certain options to Acquiror’s non-employee
directors at exercise prices equal to the IPO price of the Common Stock.  Each director of the Acquiror who becomes a
non-employee director after the IPO shall be issued options under the Plan on
the first trading day following the commencement of service as a non-employee
director.  In each subsequent year, in
conjunction with Acquiror’s annual meeting, each non-employee director will be
granted certain options under the Plan.

 

 

Schedule 5.07

 

None.EXHIBIT 10.6

 

 

CAVAN MARITIME LIMITED

INVESTOR RIGHTS AGREEMENT

 

THIS INVESTOR RIGHTS AGREEMENT (the “Agreement”) is entered into as of [  ], 2005, between, Cavan Maritime Limited, a
Marshall Islands corporation (the “Company”) and
VOC Invest, Ltd., a Bahamian company (“Investor”).

 

RECITALS

 

WHEREAS, the Company is acquiring certain vessels from
Affiliates of Investor in exchange for cash and certain shares of the Company’s
common stock, par value $0.001 per share (the “Common Stock”),
pursuant to that certain Asset Purchase Agreement (the “APA
Agreement”), dated as August     , 2005,
among the Company, Vanguard Ultramax LLC, a Marshall Islands limited liability
company (“Vanguard”), Colas
Orchid Ltd., a Bahamian company (“Colas”),
and Clipper Bulk Shipping Ltd., a Bahamian company (“Clipper Bulk” and together with Vanguard and Colas the “Transferors”, and each individually, a “Transferor”));

 

WHEREAS, each
Transferor named Investor as such Transferor’s nominee for the purpose of
receiving such Transferor’s payment of shares of the Company’s Common Stock
pursuant to the APA Agreement;

 

WHEREAS, in connection with the closing of the APA
Agreement, the Company is closing its initial public offering (the “IPO”); and

 

WHEREAS, the Transferors obligations in the APA
Agreement are conditioned upon the execution and delivery of this Agreement.

 

NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

 

SECTION 1.                            GENERAL

 

1.1          Definitions.  As used in this Agreement the following terms
shall have the following respective meanings:

 

“Affiliate(s)”
means, with respect to any given person or entity other than a partnership or
limited liability company, any other person or entity directly or indirectly
controlling, controlled by or under common control with such person or entity
and with respect to a partnership, the
partners of such partnership and with respect to a limited liability company,
the members of such limited liability company.

 

“Closing Date”
shall have the meaning ascribed to such term in the APA Agreement.

 

 

“Common Stock” shall
have the meaning ascribed to such term in the first recital hereto.

 

“Demand
Request” shall have the meaning ascribed to such term in Section 2.2(a).

 

“Designation
Period” shall have the meaning ascribed to such term in Section 4.1.

 

“Exchange Act” means
the Securities Exchange Act of 1934, as amended.

 

“Holder” means
any person owning of record Registrable Securities that have not been sold to
the public or any assignee of record of such Registrable Securities in
accordance with Section 2.9 hereof.

 

“Initiating Holders”
shall have the meaning ascribed to such term in Section 2.2(a).

 

“Investor
Designee” shall have the meaning ascribed to such term in Section 4.1(b).

 

“Investor
Group” shall have the meaning ascribed to such term in Section 3.1.

 

“IPO” shall
have the meaning ascribed to such term in the third recital hereto.

 

“Maintenance
Update” shall have the meaning ascribed to such term in Section 2.2(e).

 

“Register,”  “registered,” and “registration” refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement or document.

 

“Permitted
Assigns” shall have the meaning ascribed to such term in Section 5.2.

 

“Registrable Securities” means the shares of Common Stock issued,
or to be issued, by the Company to the Investor as nominee of each Transferor,
on each Closing Date, pursuant to the APA Agreement and any other securities
issued or issuable with respect to or in exchange of any such shares, in each
case subject to appropriate adjustment for any stock split, stock dividend,
recapitalization, merger or other reorganization.  Notwithstanding the foregoing, Registrable
Securities shall not include any securities (i) eligible to be sold into
the public market without regard to volume limitations under Rule 144(k)
promulgated under the Securities Act (or any successor rule), (ii) sold by
a person to the public pursuant to Rule 144 under the Securities Act (or
any successor rule), (iii) sold by a person to the public pursuant to a
registration statement, or (iv) sold in a private transaction in which the
transferor’s rights under Section 2 of this Agreement are not assigned.

 

“Registrable Securities then
outstanding” means, as of a given time, the number of shares
of Common Stock that are Registrable Securities and issued and outstanding.

 

2

 

“Registration Expenses” means
all expenses incurred by the Company in complying with Sections 2.2 and
2.3 hereof, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel and independent public
accountants for the Company, reasonable fees and disbursements of a single
special counsel for the Holders, blue sky fees and expenses, including the fees
and disbursements of blue sky counsel and the expense of any special audits
incident to or required by any such registration (but excluding the
compensation of regular employees of the Company which shall be paid in any
event by the Company).

 

“SEC” or “Commission” means the Securities and Exchange Commission.

 

“Securities Act” means
the Securities Act of 1933, as amended.

 

“Selling Expenses” means
all underwriting discounts and selling commissions applicable to the sale.

 

“Special Registration Statement”
means a registration statement relating to any employee benefit plan or with
respect to any corporate reorganization or other transaction under Rule 145
of the Securities Act.

 

“Transferor” or
“Transferors” shall have the meaning
ascribed to such terms in the first recital hereto.

 

“Violation”
shall have the meaning ascribed to such term in Section 2.8(a).

 

“VOC Period”
shall have the meaning ascribed to such term in Section 2.2(e).

 

“Wexford”
means Wexford Capital LLC.

 

SECTION 2.                            RESTRICTIONS
ON TRANSFER AND REGISTRATION.

 

2.1          Restrictions
on Transfer.

 

(a)           Each Holder agrees
not to make any disposition of all or any portion of the Registrable Securities
unless and until:

 

(i)            There
is then in effect a registration statement under the Securities Act covering
such proposed disposition and such disposition is made in accordance with such
registration statement; or

 

(ii)           (A) The
transferee has agreed in writing to be bound by the terms of this Agreement, (B) such
Holder shall have notified the Company of the proposed disposition and shall
have furnished the Company with a detailed statement of the circumstances
surrounding the proposed disposition, and (C) if reasonably requested by
the Company, such Holder shall have furnished the Company with an opinion of
counsel, reasonably satisfactory to the Company, that such disposition will not
require registration of such shares under the Securities Act.

 

3

 

(b)           Each
certificate representing Registrable Securities shall (unless otherwise
permitted by the provisions of this Agreement) be stamped or otherwise
imprinted with a legend substantially similar to the following (in addition to
any legend required under applicable state securities laws):

 

THE
SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER FEDERAL OR
APPLICABLE STATE SECURITIES LAWS AND INSTEAD ARE BEING ISSUED PURSUANT TO
EXEMPTIONS CONTAINED IN SAID LAWS.  THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED IN THE UNITED STATES OR TO U.S. PERSONS
UNLESS (1) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S OF THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
(2) A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES SHALL BE
EFFECTIVE UNDER THE SECURITIES ACT, OR (3) CAVAN MARITIME LIMITED (THE “COMPANY”) SHALL HAVE RECEIVED AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO IT THAT NO VIOLATION OF THE SECURITIES ACT OR
SIMILAR STATE ACTS WILL BE INVOLVED IN SUCH TRANSFER.

 

The
Company shall be obligated to reissue promptly unlegended certificates at the
request of any Holder thereof if such Holder shall have obtained an opinion of
counsel (which counsel may be counsel to the Company) reasonably acceptable to
the Company to the effect that the securities proposed to be disposed of may
lawfully be so disposed of without registration, qualification or legend.

 

2.2          Demand
Registration.

 

(a)           Following
the IPO and subject to the conditions of Section 2.10, if the Company
shall receive a written request (the “Demand Request”)
from Holders holding at least sixty (60.0%) percent of the Registrable
Securities then outstanding (the “Initiating Holders”)
that the Company file a registration statement under the Securities Act
covering the registration of Registrable Securities, then the Company shall,
within five (5) business days of the receipt thereof, give written notice
of such request to the remaining Holders (the “Remaining
Holders”), which shall include a requirement that each Remaining
Holder must opt-in to the demand registration within twenty (20) days of the
receipt of such notice, and subject to the limitations of this Section 2.2,
file and cause to be declared effective by the SEC as soon as practicable a registration
statement under the Securities Act covering all Registrable Securities that the
Holders request to be registered.

 

(b)           If
the Initiating Holders intend to distribute the Registrable Securities covered
by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to this Section 2.2 and the
Company shall include such information in the written notice referred to in Section 2.2(a),
provided the choice of the underwriter shall be made by the Company, subject to
the approval of the Holders, which shall not be unreasonably withheld.  In such event, the right of any Holder to
include its Registrable Securities in such registration shall be conditioned
upon such Holder’s participation in such

 

4

 

underwriting and the
inclusion of such Holder’s Registrable Securities in the underwriting to the
extent provided herein.  All Holders
proposing to distribute their securities through such underwriting shall enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Initiating Holders.  Notwithstanding any other provision of this Section 2.2,
if the underwriter advises the Company that marketing factors require a
limitation of the number of Registrable Securities then the Company shall so
advise all Holders of Registrable Securities which would otherwise be
underwritten pursuant hereto, and the number of shares that may be included in
the underwriting shall be allocated to the Holders of such Registrable Securities
on a pro rata basis based on the number of
Registrable Securities held by all such Holders (including the Initiating
Holders).  Any Registrable Securities
excluded or withdrawn from such underwriting shall be withdrawn from the registration.

 

(c)           The
Company shall not be required to effect a registration pursuant to this Section 2.2:

 

(i)            after
the Company has effected one (1) registration pursuant to this Section 2.2,
and such registration has been declared or ordered effective; or

 

(ii)           if
the Company shall furnish to Holders requesting a registration statement
pursuant to this Section 2.2, a resolution of the Board stating that in
the good faith judgment of the Board it would be seriously detrimental to the
Company and its shareholders for such registration statement to be effected at
such time, in which event the Company shall have the right to defer such filing
for a period of not more than sixty (60) days after receipt of the request of
the Initiating Holders; provided, however,
that such right to delay a request shall be exercised by the Company not more
than twice in any twelve (12) month period.

 

(d)           Subject
to the foregoing, the Company shall file a registration statement covering the
Registrable Securities so requested to be registered pursuant to this Section 2.2
as soon as practicable after receipt of the request or requests of the
Holders.  Registrations effected pursuant
to this Section 2.2 shall not be counted as registrations effected
pursuant to Section 2.3.

 

(e)           The
Company shall maintain the effectiveness of a registration of Registrable
Securities effected pursuant to this Section 2.2 continuously up to the
second anniversary of the IPO, except for such interruptions as may be
reasonably required to update and thereby maintain the effectiveness of the
relevant registration statement (in each case, a “Maintenance Update”), which Maintenance Update the Company
shall use its best efforts to effect as soon as practicable. Subject to the
exception set forth in the following sentence, if the Initiating Holders
exercise, their right pursuant to this Section 2.2 on or before the first
anniversary of the IPO, then the Company shall not allow any other shares to be
covered by a filed registration statement for a period of ninety (90) days (the
“VOC Period”) following the effectiveness
of the registration statement filed by the Company pursuant to this Section 2.2.  Notwithstanding the foregoing, the Company
will be entitled to issue shares and to register its securities during any
portion of the VOC Period, and in the event of any other such registration, the
VOC Period shall be tolled until the sale or resale of the additional
registered shares is completed. 
Additionally, during any Maintenance Update, the VOC Period also shall
be tolled.

 

5

 

(f)            No
securities other than the Registrable Securities shall be included in any
registration statement effected pursuant to this Section 2.2.

 

(g)           With
respect to any registration statement effected pursuant to this Section 2.2,
each Holder shall be entitled to receive as promptly as practicable all SEC
correspondence and, in any event, the Company shall use its best efforts to
respond to all comments with ten business days of receipt thereof.

 

(h)           The
Company shall not grant any registration rights to third parties inconsistent
with those granted in Sections 2.2 and 2.3 of this Agreement.

 

2.3          Piggyback
Registrations.  (a) 
Following the IPO, the Company shall notify all Holders of Registrable
Securities in writing at least twenty (20) days prior to the filing of any
registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding Special Registration Statements) and will afford each
such Holder an opportunity to include in such registration statement all or
part of such Registrable Securities held by such Holder.  Each Holder desiring to include in any such
registration statement all or any part of the Registrable Securities held by it
shall, within twenty (20) days after the above-described notice from the
Company, so notify the Company in writing. 
Such notice shall state the intended method of disposition of the
Registrable Securities by such Holder. 
If a Holder decides not to include all of its Registrable Securities in
any registration statement thereafter filed by the Company, such Holder shall
nevertheless continue to have the right to include any Registrable Securities
in any subsequent registration statement or registration statements as may be
filed by the Company with respect to offerings of its securities, all upon the
terms and conditions set forth herein.

 

(b)           Underwriting.  (i)  If
the registration statement under which the Company gives notice under this Section 2.3
is for an underwritten offering, the Company shall so advise the Holders of
Registrable Securities.  In such event,
the right of any such Holder to be included in a registration pursuant to this Section 2.3
shall be conditioned upon such Holder’s participation in such underwriting and
the inclusion of such Holder’s Registrable Securities in the underwriting to
the extent provided herein.  All Holders
proposing to distribute their Registrable Securities through such underwriting
shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company.  Notwithstanding any other provision of the
Agreement, if the underwriter determines in good faith that marketing factors
require a limitation of the number of shares to be underwritten, the number of
shares that may be included in the underwriting shall be allocated, first, to
the Company; second, to the holders of Common Stock that initiated the filing
of such registration statement, if any; third, to the Holders and any
shareholders with rights that are pari passu to
the rights of the Holders on a pro rata basis
based on the total number of Registrable Securities held by the Holders and
Common Stock held by such shareholders; and fourth, to any other shareholder of
the Company (other than a Holder) on a pro rata basis.

 

(ii)           If
any Holder disapproves of the terms of any such underwriting, such Holder may
elect to withdraw therefrom by written notice to the Company and the
underwriter, delivered at least ten (10) business days prior to the
effective date of the registration statement.

 

6

 

Any Registrable
Securities excluded or withdrawn from such underwriting shall be excluded and
withdrawn from the registration.  For any
Holder which is a partnership or corporation, the partners, retired partners
and shareholders of such Holder, or the estates and family members of any such
partners and retired partners and any trusts for the benefit of any of the
foregoing persons shall be deemed to be a single “Holder,” and any pro rata reduction with respect to such “Holder” shall be
based upon the aggregate amount of shares carrying registration rights owned by
all entities and individuals included in such “Holder,” as defined in this
sentence.

 

(c)           Right
to Terminate Registration.  (i) 
The Company shall have the right to terminate or withdraw any registration initiated
by it under this Section 2.3 prior to the effectiveness of such
registration whether or not any Holder has elected to include securities in
such registration.  The Registration
Expenses of such withdrawn registration shall be borne by the Company in accordance
with Section 2.5 hereof.

 

(d)           Registrations
effected pursuant to this Section 2.3 shall not be counted as a demand for
registration effected pursuant to Section 2.2.

 

2.4          Expenses
of Registration.  Except as
specifically provided herein, all Registration Expenses incurred in connection
with each registration, qualification or compliance pursuant to Section 2.2
or each registration under Section 2.3 herein shall be borne by the
Company.  All Selling Expenses incurred
in connection with any registrations hereunder, shall be borne by the holders
of the securities so registered pro rata on the
basis of the number of shares so registered. 
Notwithstanding the foregoing, the Company shall not be required to pay
for Registration Expenses of any registration proceeding begun pursuant to Section 2.2,
the request of which has been subsequently withdrawn by the Initiating Holders,
unless the withdrawal is based upon material adverse information concerning the
Company of which the Initiating Holders were not aware at the time of such
request.  If the Holders are required to
pay the Registration Expenses, such expenses shall be borne by the holders of
securities (including Registrable Securities) requesting such registration in
proportion to the number of shares of Common Stock for which registration was
requested; if the Company is required to pay the Registration Expenses of a
withdrawn offering pursuant to the preceding sentence, then the Holders shall
not forfeit their rights pursuant to Section 2.2 to a demand registration.

 

2.5          Obligations
of the Company.  Whenever required to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:

 

(a)           prepare
and, after a request or demand (as the case may be) for registration has been
given to the Company, file with the Commission a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective; provided, that
the Company may discontinue any registration of its securities which is being
effected pursuant to Section 2.3 at any time prior to the effective date
of the registration statement;

 

(b)           prepare
and file with the Commission such amendments and supplements to any
registration statement referred to in clause (i) of this Section 2.5
and the prospectus used in connection therewith as may be necessary, except as
provided in Section 2.2(e), to keep such registration statement effective
for a period of at least one hundred eighty (180) days and to

 

7

 

comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such registration
statement; provided, that before filing a
registration statement or prospectus, or any amendments or supplements thereto,
the Company will furnish to one counsel selected by the Holders holding at
least sixty (60.0%) percent of the Registrable Securities covered by such
registration statement to represent all Holders of Registrable Securities
covered by such registration statement, copies of all documents proposed to be
filed, which documents will be subject to the review of such counsel;

 

(c)           if
such Registrable Securities have not been registered under Section 12 of
the Exchange Act, prepare and, in any event within 40 days after a request for
registration has been given to the Company, file with the Commission a
registration statement with respect to such Registrable Securities under the
Exchange Act and use its best efforts to cause such registration statement to
become effective; provided, that the Company may
discontinue any registration of its securities which is being effected pursuant
to Section 2.3 at any time prior to the effective date of the registration
statement;

 

(d)           furnish
to each seller of such Registrable Securities such number of copies of any
registration statement referred to in clause (a) of this Section 2.5
and of each amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus included in such
registration statement (including each preliminary prospectus and summary
prospectus), and any other prospectus filed under Rule 424 under the
Securities Act in conformity with the requirements of the Securities Act, and
such other documents as such seller may reasonably request;

 

(e)           use
its best efforts to register or qualify such Registrable Securities covered by
any registration statement referred to in clause (a) of this Section 2.5
under such other securities or blue sky laws of such jurisdictions as each
seller of such Registrable Securities shall reasonably request, and do any and
all other acts and things which may be reasonably necessary or advisable to
enable such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller, except that the Company shall not
for any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction where, but for the requirements of this
clause (e), it would not be obligated to be so qualified or to consent to
general service of process in any such jurisdiction;

 

(f)            use
its best efforts to cause such Registrable Securities covered by a registration
statement to be registered with or approved by such other governmental agencies
or authorities as may be necessary to enable the seller or sellers thereof to
consummate the disposition of such Registrable Securities;

 

(g)           cause
representatives of the Company to participate in any “road show” or “road shows”
reasonably requested by any underwriter of an underwritten or “best efforts”
offering of any Registrable Securities;

 

(h)           notify
each seller of any such Registrable Securities covered by a registration
statement, at any time when a prospectus relating thereto is required to be
delivered

 

8

 

under the Securities Act,
of the Company’s becoming aware that the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing, and at the request of any such seller, prepare and
furnish to such seller a reasonable number of copies of an amended or
supplemental prospectus as may be necessary so that, as thereafter delivered to
the sellers of such Registrable Securities, such prospectus shall not include
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;

 

(i)            otherwise
use its best efforts to comply with all applicable rules and regulations
of the Commission, and make available to its security holders, as soon as reasonably
practicable (but not more than eighteen months) after the effective date of the
registration statement, an earnings statement which shall satisfy the
provisions of Section 11(a) of the Securities Act and the rules and
regulations promulgated thereunder;

 

(j)            enter
into such customary agreements (including an underwriting agreement in
customary form) and take such other actions as sellers of a majority of such
Registrable Securities or the underwriters, if any, reasonably request in order
to expedite or facilitate the disposition of such Registrable Securities;

 

(k)           obtain
a “cold comfort” letter or letters from the Company’s independent public
accountants in customary form and covering matters of the type customarily
covered by “cold comfort” letters as the seller or sellers of a majority of
such Registrable Securities shall reasonably request;

 

(l)            obtain
an opinion of counsel for the Company in customary form and covering matters of
the type customarily covered in opinions of issuer’s counsel as the seller or
sellers of a majority of such Registrable Securities shall reasonably request;
and

 

(m)          make
available for inspection by any seller of such Registrable Securities covered
by a registration statement, by any underwriter participating in any disposition
to be effected pursuant to such registration statement and by any attorney,
accountant or other agent retained by any such seller or any such underwriter,
all pertinent financial and other records, pertinent corporate documents and
properties of the Company, and cause all of the Company’s officers, directors
and employees to supply all information reasonably requested by any such
seller, underwriter, attorney, accountant or agent in connection with such
registration statement.

 

2.6          Termination
of Registration Rights.  A Holder’s
registration rights shall expire upon the second anniversary of the Company’s
IPO.

 

2.7          Furnishing
Information.  It shall be a condition
precedent to the obligations of the Company to take any action pursuant to Section 2.2
or 2.3 that the selling Holders shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them and the intended
method of disposition of such securities as shall be required to effect the
registration of their Registrable Securities.

 

9

 

2.8          Indemnification.  In the event any Registrable Securities are
included in a registration statement under Section 2.2 or Section 2.3:

 

(a)           To
the fullest extent permitted by law, the Company will indemnify and hold
harmless each Transferor and each Holder, the partners, officers and directors
of each Transferor and each Holder, any underwriter (as defined in the
Securities Act) for such Holder and each person, if any, who controls such Transferor
or Holder or underwriter within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations (each, a “Violation”) by the Company: (i) any untrue statement or
alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated
therein, or necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any state securities
law in connection with the offering covered by such registration statement; and
the Company will pay as incurred to each such Transferor or Holder, or partner,
officer, director, underwriter or controlling person of such Transferor or
Holder for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided however,
that the Company shall not be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
such Transferor or Holder, or partner, officer, director, underwriter or
controlling person of such Transferor or Holder.

 

(b)           To
the fullest extent permitted by law, each Holder will, if Registrable Securities
held by such Holder are included in the securities as to which such
registration qualifications or compliance is being effected, indemnify and hold
harmless the Company, each of its directors, its officers and each person, if
any, who controls the Company within the meaning of the Securities Act, any
underwriter and any other Holder selling securities under such registration
statement or any of such other Holder’s partners, directors or officers or any
person who controls such Holder, against any losses, claims, damages or
liabilities (joint or several) to which the Company or any such director,
officer, controlling person, underwriter or other such Holder, or partner,
director, officer or controlling person of such other Holder may become subject
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder under an
instrument duly executed by such Holder and stated to be specifically for use
in connection with such registration; and each such Holder will pay as incurred
any legal or other expenses reasonably incurred by the Company or any such
director, officer, controlling person, underwriter or other Holder, or partner,
officer, director or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action if
it is judicially determined that there was such a Violation; provided, however, that in no

 

10

 

event shall any indemnity
under this Section 2.8 exceed the net proceeds from the offering received
by such Holder.

 

(c)           Promptly
after receipt by an indemnified party under this Section 2.8 of notice of
the commencement of any action (including any governmental action), such indemnified
party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 2.8, deliver to the indemnifying
party a written notice of the commencement thereof and the indemnifying party
shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed,
to assume the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that an indemnified
party shall have the right to retain its own counsel, with the fees and
expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party. 
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action will not relieve it of
any liability that it may have to any indemnified party otherwise than under
this Section 2.8 except to the extent that the indemnifying party has been
materially prejudiced.

 

(d)           If
the indemnification provided for in this Section 2.8 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect
to any losses, claims, damages or liabilities referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party thereunder,
shall to the extent permitted by applicable law contribute to the amount paid
or payable by such indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the
other in connection with the Violation(s) that resulted in such loss, claim,
damage or liability, as well as any other relevant equitable
considerations.  The relative fault of
the indemnifying party and of the indemnified party shall be determined by a
court of law by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission; provided, that in no event shall any contribution by a
Holder hereunder exceed the net proceeds from the offering received by such
Holder.

 

(e)           The
obligations of the Company and Holders under this Section 2.8 shall
survive completion of any offering of Registrable Securities in a registration
statement and the termination of this agreement.  No indemnifying party, in the defense of any
such claim or litigation, shall, except with the consent of each indemnified
party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such claim or litigation.

 

2.9          Assignment
of Registration Rights.  The rights
to cause the Company to register Registrable Securities pursuant to this Section 2
may be assigned by a Holder to a transferee or assignee of Registrable
Securities which (a) is an Affiliate of the Holder, (b) is a
subsidiary, parent, general partner, limited partner, retired partner, member
or retired member of a Holder,

 

11

 

or any officer or
director of any thereof, (c) if such Holder is an individual is (i) a
lineal descendant or spouse (or to any of their respective descendants) or a
trust established for the benefit of such lineal descendant or spouse (or any
of their respective descendants) or the Holder or (ii) a corporation,
partnership or other entity in which such Holder, and/or one or more lineal
descendants or spouse (or any of their respective descendants) of such Holder
are the direct or indirect and beneficial owners of all or substantially all of
the equity interests or (d) is a transferee of at least twenty five
percent (25%) of the assigning Holder’s holding of Registrable Securities on
the date hereof; provided, however, (i) the
transferor shall, within ten (10) days after such transfer, furnish to the
Company written notice of the name and address of such transferee or assignee
and the securities with respect to which such registration rights are being
assigned and (ii) such transferee shall agree to be subject to all restrictions
set forth in this Agreement.

 

2.10        “Market
Stand-Off” Agreement. (a) Each
Holder hereby agrees that such Holder shall not sell, transfer, make any short
sale of, grant any option for the purchase of, or enter into any hedging or
similar transaction with the same economic effect as a sale of any Common Stock
(or other securities) of the Company held by such Holder for a period specified
by the representative of the underwriters of Common Stock of the Company not to
exceed one hundred eighty (180) days following the effective date of the
registration statement registering Common Stock in the IPO, or, except to the
extent included therein, a registration statement of the Company filed under
the Securities Act pursuant to Section 2.2; provided, that
all officers and directors of the Company and holders of at least one percent
(1%) of the Company’s voting securities enter into similar agreements.

 

(b)           The
Company hereby agrees that it will cause its officers and directors and holders
of at least one percent (1%) of its voting securities not to sell, transfer,
make any short sale of, grant any option for the purchase of, or enter into any
hedging or similar transaction with the same economic effect as a sale, any
Common Stock (or other securities) of the Company held by such officers and
directors and holders of at least one percent (1%) of its voting securities for
a period specified by the representative of the underwriters of Common Stock
(or other securities) of the Company not to exceed one hundred eighty (180)
days following the effective date of the IPO or a registration statement of the
Company filed under the Securities Act pursuant to Section 2.2.

 

2.11        Rule 144
Reporting.  With a view to making
available to the Holders the benefits of certain rules and regulations of
the SEC which may permit the sale of the Registrable Securities to the public
without registration, the Company agrees to:

 

(a)           Make
and keep public information available, as those terms are understood and
defined in SEC Rule 144 or any similar or analogous rule promulgated
under the Securities Act, at all times after the effective date of the IPO;

 

(b)           To
use its best efforts to file with the SEC, in a timely manner, all reports and
other documents required of the Company under the Exchange Act; and

 

(c)           To
use its best efforts to so long as a Holder owns any Registrable Securities,
furnish to such Holder forthwith upon request: 
a written statement by the Company as to its

 

12

 

compliance with the
reporting requirements of said Rule 144 of the Securities Act, and of the
Exchange Act (at any time after it has become subject to such reporting
requirements); a copy of the most recent annual or quarterly report of the
Company; and such other reports and documents as a Holder may reasonably
request in availing itself of any rule or regulation of the SEC allowing
it to sell any such securities without registration.

 

SECTION 3.                            STANDSTILL
COVENANT

 

3.1          Standstill.  If Holders exercise their demand registration
right pursuant to Section 2.2 hereof, then Investor, each Transferor and
any Affiliate of each such entity (collectively, the “Investor
Group”), for a period of three (3) years following the date of
the Demand Notice, will not hold, directly or indirectly, in the aggregate,
securities of the Company in excess of Investor’s percentage ownership of the
Company immediately following the IPO.

 

SECTION 4.         VOTING.

 

4.1          Election
of Directors. 
For a period from the date hereof until the second annual meeting of the
shareholders of the Company following the date hereof (the “Designation Period”), on all matters relating to the
appointment of board observers and the election and removal of directors of the
Company, Wexford and Investor agree to vote their respective shares of Common
Stock (or cause the holders thereof to consent pursuant to an action by written
consent of the holders of capital stock of the Company) as follows:

 

(a)           During the Designation Period, Investor shall be
entitled to designate one observer to the Board of Directors of the
Company.  Such Board observer shall be
entitled to contemporaneous receipt of information provided to members of the
Board of Directors.

 

(b)           In lieu of the right to designate a Board
observer contained in the preceding sub-section, during the Designation Period,
Investor may designate one person to the Board of Directors (the “Investor Designee”). 
In the event that Investor exercises its right to designate the Investor
Designee, then (i) Investor’s right to designate one Board observer will
terminate (such observer’s information rights will not expire until the
Investor Designee is elected to the Board of Directors), and (ii) Wexford
will, and will cause each of its Affiliates, and each non-public transferee of
shares of Common Stock held by Wexford or its Affiliates, to vote its shares of
Common Stock for such Investor Designee.

 

(c)           Notwithstanding the foregoing, in the event that
the Investor Group’s equity ownership of the Company falls below ten percent
(10%) of the issued and outstanding shares of the Company, then, each of (i) Investor’s
right to designate a Board observer pursuant to Section 4.1(a), and (ii) the
voting agreement contained in Section 4.1(b), shall terminate immediately,
and Investor shall cause the Investor Designee, if any, to resign from the
Board.

 

SECTION 5.                            MISCELLANEOUS.

 

5.1          Survival.  The representations, warranties, covenants,
and agreements made herein shall survive any investigation made by any Holder
and the closing of the transactions contemplated hereby.  All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto in connection with the

 

13

 

transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder solely as of the date of such certificate or instrument.

 

5.2          Successors
and Assigns.  Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit of,
and be binding upon, the successors or legal representatives of the parties
hereto and shall inure to the benefit of and be enforceable by each person who
shall be a holder of Registrable Securities from time to time and who has
become a party to this Agreement by executing and delivering an additional
counterpart signature page to this Agreement (“Permitted
Assigns”); provided, however,
that prior to the receipt by the Company of adequate written notice of the
transfer of any Registrable Securities specifying the full name and address of
the transferee, the Company may deem and treat the person listed as the holder
of such shares in its records as the absolute owner and holder of such shares
for all purposes, including the payment of dividends or any redemption
price.  The schedules to this Agreement
shall be amended accordingly to reflect Permitted Assigns and Holders.

 

5.3          Entire
Agreement.  This Agreement and all
schedules and exhibits attached hereto, constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof, and supercedes any prior or contemporaneous understanding or agreements
between or among any of them, with respect to the subject matter hereof, and no
party shall be liable or bound to any other in any manner by any
representations, warranties, covenants and agreements except as specifically
set forth herein and therein.

 

5.4          Third
Party Beneficiaries.  This Agreement
is for the sole benefit of the parties hereto and not for the benefit of any
third party.

 

5.5          Severability.  In the event one or more of the provisions of
this Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.

 

5.6          Amendment
and Waiver.

 

(a)           Except
as otherwise expressly provided, this Agreement may be amended or modified only
upon the written consent of the Company and Holders holding at least sixty
(60.0%) percent of the Registrable Securities then outstanding.

 

(b)           Except
as otherwise expressly provided, the obligations of the Company and the rights
of the Holders under this Agreement may be waived only with the written consent
of Holders holding at least sixty (60.0%) percent of the Registrable Securities
then outstanding.

 

(c)           For
the purposes of determining the number of Holders entitled to vote or exercise
any rights hereunder, the Company shall be entitled to rely solely on the list
of record holders of its stock as maintained by or on behalf of the Company.

 

5.7          Delays
or Omissions.  It is agreed that no
delay or omission to exercise any right, power, or remedy accruing to any
Holder, upon any breach, default or noncompliance of the Company under this
Agreement shall impair any such right, power, or remedy, nor shall it be

 

14

 

construed to be a waiver
of any such breach, default or noncompliance, or any acquiescence therein, or
of any similar breach, default or noncompliance thereafter occurring.  It is further agreed that any waiver, permit,
consent, or approval of any kind or character on any Holder’s part of any
breach, default or noncompliance under the Agreement or any waiver on such
Holder’s part of any provisions or conditions of this Agreement must be in
writing and shall be effective only to the extent specifically set forth in
such writing.  All remedies, either under
this Agreement, by law, or otherwise afforded to Holders, shall be cumulative
and not alternative.

 

5.8          Notices.  All notices, demands and other communications
to be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be delivered by hand or sent by telecopy or sent,
postage prepaid, by registered, certified or express mail or reputable
overnight courier service and shall be deemed given when so delivered by hand
or telecopied (together with confirmation of transmission) or, if mailed, upon
receipt (one business day after mailing in the case of express mail or
overnight courier service), as follows:

 

If to
the Company:

 

Cavan
Maritime Limited

c/o Wexford Capital LLC

411 West Putnam Avenue

Greenwich, CT 06839

Attention:  Frederick Simon

Facsimile:  (203) 862-7311

 

and

 

Cavan
Maritime Limited

c/o Wexford Capital LLC

411 West Putnam Avenue

Greenwich, CT 06839

Attention: 
Arthur Amron

Facsimile: 
(203) 862-7312

 

with a
copy to:

 

Reitler Brown & Rosenblatt LLC

800 Third Avenue, 21st Floor

New York, New York 
10022

Attention: 
Edward G. Reitler, Esq.

Facsimile: 
(212) 371-5500

 

If to
Investor:

 

P.O. Box
CB-13048

Dockendale
House

West
Bay Street

Nassau,
Bahamas

Facsimile:
242 322 4280

 

15

 

If to
a Transferor:

 

For
Colas and Clipper Bulk:

 

P.O. Box
CB-13048

Dockendale
House

West
Bay Street

Nassau,
Bahamas

Facsimile:
242 322 4280

 

For
Vanguard:

 

c/o
VOC Shipping N.V.

1,
Berg Arrarat

P.O. Box
3889

Curacao,
Netherlands Antilles

Facsimile:
5999 461 4129

 

In
each case with a copy to:

 

VOC
Bulk Shipping U.S.A., Inc.

Five
Stamford Landing

78
Southfield Avenue

Stamford,
Connecticut 06902

Attention:  President

Facsimile:  1 203 965-7850

 

and

 

Watson,
Farley & Williams (New York) LLP

100
Park Avenue

New York, New York 
10017

Attention:  Leo Chang, Esq.

Facsimile:  (212) 922-1512

 

or to such other address
or facsimile number as the party to whom notice is to be given may have furnished
to the other parties in writing in accordance herewith.

 

5.9          Attorneys’
Fees.  In the event that any suit or
action is instituted to enforce any provision in this Agreement, the prevailing
party in such dispute shall be entitled to recover from the losing party all
fees, costs and expenses of enforcing any right of such prevailing party under
or with respect to this Agreement, including without limitation, such
reasonable fees and

 

16

 

expenses of attorneys and
accountants, which shall include, without limitation, all fees, costs and
expenses of appeals.

 

5.10        Titles
and Subtitles.  The titles of the
sections and subsections of this Agreement are for convenience of reference
only and are not to be considered in construing this Agreement.

 

5.11        Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one instrument

 

5.12        Governing
Law.  All matters relating to the
interpretation, construction, validity and enforcement of this Agreement shall
be governed by and construed in accordance with the internal laws of the State
of New York applicable to agreements made and to be performed entirely within
such State without giving effect to any choice or conflict of law provision or rule (whether
of the State of New York or any other jurisdiction) that would cause the
application of laws of any jurisdiction other than the State of New York.

 

5.13        CONSENT
TO JURISDICTION.  EACH OF THE PARTIES
HERETO IRREVOCABLY SUBMITS TO THE CO-EXCLUSIVE JURISDICTION OF (I) THE SUPREME
COURT OF THE STATE OF NEW YORK, NEW YORK COUNTY AND (II) THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, FOR THE PURPOSES OF ANY
SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.  EACH
PARTY HERETO FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR
DOCUMENTS BY UNITED STATES REGISTERED MAIL TO SUCH PARTY’S RESPECTIVE ADDRESS
FOR NOTICES SET FORTH IN SECTION 5.8 SHALL BE EFFECTIVE SERVICE OF PROCESS
FOR ANY ACTION, SUIT OR PROCEEDING IN NEW YORK WITH RESPECT TO ANY MATTERS TO
WHICH IT HAS SUBMITTED TO JURISDICTION IN THIS SECTION 5.13.  EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY ACTION, SUIT OR PROCEEDING
ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN (A) THE
SUPREME COURT OF THE STATE OF NEW YORK, NEW YORK COUNTY AND (B) THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND HEREBY FURTHER
IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
SUCH COURT THAT ANY SUCH ACTION, SUIT OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

5.14        WAIVER
OF JURY TRIAL.  EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT THE OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT HE OR IT AND THE
OTHER PARTIES HERETO HAVE BEEN

 

17

 

INDUCED TO ENTER INTO THIS AGREEMENT, BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.14.

 

 

[REMAINDER OF THIS
PAGE INTENTIONALLY LEFT BLANK.]

 

18

 

IN WITNESS WHEREOF, the parties hereto have executed
this INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph
hereof.

 

	
   

  	
  THE COMPANY

  
	
   

  	
   

  
	
   

  	
  CAVAN MARITIME
  LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INVESTOR:

  
	
   

  	
   

  
	
   

  	
  VOC INVEST, LTD.

  
	
   

  	
  BY:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FOR PURPOSES OF
  SECTION 3 ONLY:

  
	
   

  	
   

  
	
   

  	
  TRANSFERORS:

  
	
   

  	
   

  
	
   

  	
  VANGUARD ULTRAMAX LLC

  
	
   

  	
  BY:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  COLAS ORCHID LTD.

  
	
   

  	
  BY:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

 

 

	
   

  	
  CLIPPER BULK SHIPPING LTD.

  
	
   

  	
  BY:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FOR PURPOSE OF
  SECTION 4 ONLY:

  
	
   

  	
   

  
	
   

  	
  WEXFORD CAPITAL
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: 

  
	
   

  	
   

  	
   

  

 

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}]]