Document:

ex10_5.htm

    
      

    

    
      	
              Exhibit
                10.5

               

              MEMORANDUM
                OF AGREEMENT

            	
              Norwegian
                Shipbrokers’ Association’s Memo-

              randum
                of Agreement for sale and purchase of

              ships
                adopted by The Baltic and International

              Maritime
                Council (BIMCO) in 1956

              Code-name

              SALEFORM
                1993

              Revised
                1966, 1983 and 1986/87

            
	
              Dated:
                 25th
                June
                2007

            	 

    

    

    

    Vitol
      Energy (Bermuda) Ltd. hereinafter
      called the Sellers, have agreed to sell, and Keswick Maritime
      Limited

    

    hereinafter
      called the Buyers, have agreed to buy

    

    Name:   ‘KESWICK’

    Classification
      Society/Class: Bureau Veritas (BV)

    
      	
              Built:  2003

            	
              By:
                Asakawa Shipbuilding Co.
                Ltd.

            

    

    
      	
              Flag:
                Singapore

            	
              Place
                of Registration:
Singapore

            

    

    
      	
              Call
                sign: 9VGN7

            	
              GRT/NRT:
                7,884 tons / 2,977
                tons

            

    

    Register Official
      number: 389932

    

    

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

    

    Definitions

    

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

    

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

    

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

    

    
      	
              1.

            	
              Purchase
                Price

            

    

    US$
      26,000,000 (United States Dollars Twenty Six Million).  1 (one)
      percent sale commission to be paid by Seller to E.A Gibson Shipbrokers
      Ltd.

    

    
      	
              2.

            	
              Deposit

            

    

    

    As
      a
      security for the correct fulfillment of this Agreement the
      Buyers MC Shipping Inc. shall place a
      corporate guarantee equal to pay a deposit of 10%
(ten
      per
      cent) of the Purchase Price within
3 (three) London banking
      days from the time the Memorandum of Agreement has been
      signed by both parties and exchanged by fax. date of this
      Agreement.  This deposit shall be replaced
by a cash deposit three months prior to
      the earliest delivery date and
      held with the Sellers nominated bank
and
      held
      by them in a an interest
      bearing joint account for the Sellers
      and the Buyers, to be released in accordance with
      joint written instructions of the Sellers and Buyers. Interest, if any, to
      be credited to the Buyers, Any fee charged for holding
      said deposit shall be borne equally by the Sellers and the
      Buyers. Bank charge for remitting the deposit from the joint
      account to the Sellers account to be borne by the Buyers.

    

    
      	
              3.

            	
              Payment

            

    

    

    The
      said
      Purchase Price shall be paid in full free of bank charges to the Sellers
      nominated bank:- Details TBA
on
      delivery of the vessel,  but not later than 3 banking days after the
      vessel is in every respect physically ready for delivery in accordance with
      the
      terms and conditions of this Agreement and Notice of Readiness has been given
      in
      accordance with Clause 5.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              4.

            	
              Inspections

            

    

    
      	
              a)*

            	
              The
                Buyers have inspected and accepted the Vessel's classification records.
                The Buyers have also inspected the Vessel
                at/in Immingham on 18th
                May 2007 and have accepted the Vessel following
                this, and the sale is outright and
                definite, subject only to the terms and conditions of this
                Agreement.

            

    

    

    
      	
              b)*

            	
              The
                Buyers shall have the right to inspect the Vessel's classification
                records
                and declare whether same are accepted or not
                within 

              The
                Sellers shall provide for inspection of the Vessel
                at/in 

              The
                Buyers shall undertake the inspection without undue delay to the
                Vessel.
                Should the Buyers cause undue delay they shall
                compensate the Sellers for the losses thereby
                incurred. The Buyers shall inspect the Vessel
                without opening up and without cost to the
                Sellers. During the inspection, the Vessel's deck
                and engine log books shall be made available
                for examination by the Buyers. If the Vessel is
                accepted after such inspection, the sale
                shall become outright and definite, subject only to
                the terms and conditions of this Agreement, provided
                the Sellers receive written notice of acceptance from the Buyers
                within 72
                hours after completion of such
                inspection. 

              Should
                notice of acceptance of the Vessel's classification records and of
                the
                Vessel not be received by the Sellers as aforesaid,
                the deposit together with interest earned shall
                be released immediately to the Buyers, whereafter
                this Agreement shall be null and
                void.

            

    

    

    
      	
              *

            	
              4a)
                and 4b) are alternatives; delete whichever is not applicable. In
                the
                absence of deletions, alternative 4a) to
                apply.

            

    

    

    
      	
              5.

            	
              Notices,
                time and place of delivery

            

    

    

    
      	
              a)

            	
              The
                Sellers shall keep the Buyers well informed of the Vessel's itinerary
                and
                shall provide the Buyers with 15, 7,
                and 3 days
                approximate notice of the estimated time of arrival at the intended
                place of drydocking/underwater inspection/delivery.
                When the Vessel is at the place of delivery and in every respect
                physically ready for delivery, in accordance with this Agreement,
                the
                Sellers shall give the Buyers a written Notice of Readiness for
                delivery.

            

    

    

    
      	
              b)

            	
              The
                Vessel shall be delivered and taken over safely
                afloat at a safe and
                accessible berth or anchorage
                at/in port to be mutually agreed within Vessel’s
                trading area safely afloat at a safe
                berth  

              in
                the Sellers' option.

            

    

    

    Expected
      time of delivery: Between
01st June
      2008 and 31st
      July 2008

    It
      is anticipated that the vessel shall be delivered on or about 27th June
      2008

    Date
      of
      cancelling (see Clauses 5 c), 6b) (iii) and
14):31st
      July 2008

    

    
      	
              c)

            	
              If
                the Sellers anticipate that, notwithstanding the exercise of due
                diligence
                by them, the Vessel will not be ready for delivery by the cancelling
                date they may notify the Buyers in writing stating the date when they
                anticipate that the Vessel will be ready for delivery and propose a
                new cancelling date. Upon receipt of such notification the Buyers
                shall
                have the option of either cancelling this Agreement in accordance
                with Clause 14 within 7 running days of receipt of the notice
                or of accepting the new date as the new cancelling date. If
                the Buyers have not declared their option within 7 running days of
                receipt of the Sellers' notification or if the Buyers accept the new
                date, the date proposed in the Sellers' notification shall be deemed
                to be the new cancelling date and shall be substituted for the
                cancelling date stipulated in line
                61.

            

    

    

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

    

    
      	
              d)

            	
              Should
                the Vessel become an actual, constructive or compromised total loss
                before
                delivery the deposit together with interest earned shall be released
                immediately to the Buyers whereafter this Agreement shall be null and
                void.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              6.

            	
              Drydocking/Divers
                Inspection

            

    

    

    
      	
              a)**

            	
              The
                Sellers shall place the Vessel in drydock at the port of delivery
                for
                inspection by the Classification Society of the Vessel's underwater
                parts
                below the deepest load line, the extent of the inspection being in
                accordance with the Classification Society's rules.  If the
                rudder, propeller, bottom or other underwater parts below the deepest
                load
                line are found broken, damaged or defective so as to affect the Vessel's
                class, such defects shall be made good at the Sellers' expense to
                the
                satisfaction of the Classification Society without
                condition/recommendation
                *.

            

    

    

    
      	
              b)**

            	
              (i)    The
                Vessel is to be delivered without drydocking. However, the Buyers
                shall have the right at their expense to arrange for an underwater
                inspection by a diver approved by the Classification Society prior to
                the delivery of the Vessel. The Sellers shall at their cost make the
                Vessel available for such inspection. The extent of the inspection
                and
                the conditions under which it is performed shall be to the
                satisfaction of the Classification Society. If the conditions at the
                port of delivery are unsuitable for such inspection, the Sellers
                shall make the Vessel available at a suitable alternative place near
                to
                the delivery Port.

            

    

    

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

    

    (iii)     If
      the Vessel is to be drydocked pursuant to Clause 6 b) (ii) and no
      suitable dry-docking  facilities  are  available
      at  the port of delivery,  the Sellers shall take the Vessel
      to a port where suitable drydocking facilities are available, whether within
      or
      outside the delivery range as per Clause 5 b).  Once drydocking
      has taken place the Sellers shall deliver the Vessel at a port within the
      delivery range as per Clause 5 b) which shall, for the purpose of this
      Clause, become the new port of delivery.  In such event the cancelling
      date provided for in Clause 5 b) shall be extended by the additional time
      required for the drydocking and extra steaming, but limited to a maximum of
      14
      running days.

    

    
      	
              c)

            	
              If
                the Vessel is drydocked pursuant to Clause 6 a) or 6 b)
                above

            

    

    

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

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (iii)   the
      expenses in connection with putting the Vessel in and taking her out of drydock,
      including the drydock dues and the Classification Society's fees shall be paid
      by the Sellers if the Classification Society issues any
      condition/recommendation* as a result of the survey or if it requires survey
      of
      the tailshaft system. In all other cases the Buyers shall pay the aforesaid
      expenses, dues and fees.

    

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

    

    (v)   the
      Buyers shall have the right to have the underwater parts of the Vessel cleaned
      and painted at their risk and expense without interfering with the Sellers'
      or
      the Classification surveyor's work, if any, and without affecting the Vessel's
      timely delivery. If, however, the Buyers' work in drydock is still in progress
      when the Sellers have completed the work which the Sellers are required to
      do,
      the additional docking time needed to complete the Buyers' work shall be for
      the
      Buyers' risk and expense. In the event that the Buyers' work requires such
      additional time, the Sellers may upon completion of the Sellers' work tender
      Notice of Readiness for delivery whilst the Vessel is still in drydock and
      the
      Buyers shall be obliged to take delivery in accordance with Clause 3,
      whether the Vessel is in drydock or not and irrespective of Clause 5
      b).

    

    
      	
              *

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

            

    

    

    
      	
              **

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

            

    

    

    
      	
              7.

            	
              Spares/bunkers,
                etc.

            

    

    

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

    

    The
      Sellers have the right to take ashore crockery, plates, cutlery, linen and
      other
      articles bearing the Sellers' flag or name, provided they replace same with
      similar unmarked items. Library, forms, etc., exclusively for use in the
      Sellers' vessel(s), shall be excluded without compensation. Captain's, Officers'
      and Crew's personal belongings including the slop chest are to be excluded
      from
      the sale, as well as the following additional items (including items on
      hire):

    

    -
      Crew Training Systems

    

    -
      Logbooks (but Buyers to have right to take copies)

    

    The
      Buyers shall take over the remaining bunkers and unused
      lubricating oils in storage tanks and sealed drums and
      pay the Sellers’ last purchased price
including all discounts on the lube oil prices
supported with vouchers.  Bunkers and the property of
      the Charterers and no payment shall be made for these between Buyers and
      Sellers. current net market price (excluding barging
      expenses) at the port 

    and
      date of  delivery of the Vessel.

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              8.

            	
              Documentation

            

    

    

    The
      place
      of closing: Imabari,
Japan

    

    In
      exchange for purchase money payment of the
      Purchase Price the Sellers are to provide
shall furnish the Buyers
      with those documents that Buyers require to transfer title and
      register vessel under her new flag.

    

    Documentation
      to be mutually agreed and Incorporated into the Memorandum of Agreement by
      way
      of addendum. 

     delivery
      documents, namely:

    

    
      	
              a)

            	
              Legal
                Bill of Sale in a form recordable
                in  ___________   (the
                country in which the Buyers are to register the Vessel), warranting
                that
                the Vessel is free from all encumbrances, mortgages and maritime
                liens or
                any other debts or claims whatsoever, duly notarially attested and
                legalized by the consul of such country or other competent
                authority.

            

    

    

    
      	
              b)

            	
              Current
                Certificate of Ownership issued
                by the competent
                authorities of the flag state of the
                Vessel.

            

    

    

    
      	
              c)

            	
              Confirmation
                of Class issued within 72 hours prior to
                delivery.

            

    

    

    
      	
              d)

            	
              Current
                Certificate issued by the competent authorities stating that the
                Vessel is
                free from registered
                encumbrances.

            

    

    

    
      	
              e)

            	
              Certificate
                of Deletion of the Vessel from the Vessel's registry or other official
                evidence of deletion appropriate to the Vessel's registry at the
                time of
                delivery, or, in the event that the registry does not as a matter
                of
                practice issue such documentation immediately, a written undertaking
                by the Sellers
                to
                effect deletion from the Vessel's registry forthwith and furnish
                a
                Certificate or other official evidence of deletion to the Buyers
                promptly
                and latest within 4 (four) weeks after the Purchase Price has been
                paid
                and the Vessel has been
                delivered.

            

    

    

    
      	
              f)

            	
              Any
                such additional documents as may reasonably be required by the competent
                authorities for the purpose of registering the Vessel, provided the
                Buyers
                notify the Sellers of any such documents as soon as possible after
                the
                date of this Agreement.

            

    

    

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

    

    At
      the time of delivery the Sellers shall hand to the Buyers the classification
      certificate(s) as well as all plans etc., which are on
      board the Vessel. Other certificates which are on board the Vessel shall
      also be handed over to the Buyers unless the Sellers are
      required to retain same, in which case the Buyers to have
      the right to take copies. Other technical documentation which
      may be in the Sellers' possession shall be promptly
      forwarded to the Buyers at their expense, if they
      so request. The Sellers may keep the Vessel's log books
      but the Buyers to have the right to take copies of
      same.

    

    
      	
              9.

            	
              Encumbrances

            

    

    

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

    

    
      	
              10.

            	
              Taxes,
                etc.

            

    

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              11.

            	
              Condition
                on delivery

            

    

    

    The
      Vessel with everything belonging to her shall be at the Sellers' risk and
      expense until she is delivered to the Buyers, but subject to the terms and
      conditions of this Agreement she shall be delivered and taken
      over substantially in the same condition as when
      inspected as she was at
      the time of inspection, fair
      wear and tear excepted with the cargo tanks under inert gas or last
      cargo vapours in the Sellers’ option and with any equipments and spare parts as
      when inspected and complying with the minimum class
      requirements.  Spare parts which are taken out of and used as
      replacement after 28th
      March and prior delivery shall not be replaced as long as the
      Vessel meets minimum class
      requirement.

    

    However,
      the Vessel shall be delivered with her class maintained without
      condition/recommendation*  Vessel is Class NK and Sellers
      will ensure that classification societies will not withdraw membership with
      the
      change of ownership / management.  Vessel is to be delivered class
      maintained, free of recommendations and free of any damages affecting vessel’s
      clean class,   free of average damage
      affecting the Vessel's class, and with her classification certificates
      and national trading certificates, hull and machinery
      continuous survey cycles to be clean and up to date with no
      extensions at the time of delivery as well as all other certificates
      the Vessel had at the time of inspection, valid and   unextended
      without condition/recommendation* by Class or the relevant authorities
for a minimum of 6 (six) months from delivery.  All equipment
      included in Class item to be in working order on delivery.

    

    All
      class certificates to be clean and surveys are to be clean, valid and unextended
      at the time of delivery for a minimum of 6 (six) months.  All national
      and international trading certificates and survey to be clean, valid and
      unextended at the time of delivery, free of recommendations and without
      subjects.  All equipment included in Class item to be in working order
      on delivery.

    

    Vessel
      is to be delivered to the Buyers simultaneously or shortly after the completion
      of her dry dock and special survey and with delivery into the time charter
      outlined below.  Sellers to provide the specification of the special
      survey work planned prior to dry docking.

    

    at
      the time of delivery.

    "Inspection"
      in this Clause 11, shall mean the Buyers' inspection according to Clause 4
      a) or 4 b), if applicable, or the Buyers' inspection prior to the
      signing of this Agreement. If the Vessel is taken over without inspection,
      the
      date of this Agreement shall be the relevant date.

    

    
      	
              *

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

            

    

    

    
      	
              12.

            	
              Name/markings

            

    

    

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

    

    
      	
              13.

            	
              Buyers'
                default

            

    

    

    Should
      the deposit not be paid in accordance with Clause 2, the Sellers have the
      right to cancel this  Agreement, and they shall be entitled to claim
      compensation for their losses and for all expenses incurred together with
      interest.

    Should
      the Purchase Price not be paid in accordance with Clause 3, the Sellers
      have the right to cancel the Agreement, in which case the deposit together
      with
      interest earned shall be released to the Sellers. If the deposit does not cover
      their loss, the Sellers shall be entitled to claim further compensation for
      their losses and for all expenses incurred together with interest.

    

    
      	
              14

            	
              Sellers'
                default

            

    

    

    Should
      the Sellers fail to give Notice of Readiness in accordance with Clause 5
      a) or fail to be ready to validly complete a legal transfer by the date
      stipulated in line 61 the Buyers shall have the option of cancelling this
      Agreement provided always that the Sellers shall be granted a maximum of 3
      banking days after Notice of Readiness has been given to make arrangements
      for
      the documentation set out in Clause 8. If after Notice of Readiness has
      been given but before the Buyers have taken delivery, the Vessel ceases to
      be
      physically ready for delivery and is not made physically ready again in every
      respect by the date stipulated in line 61 and new Notice of Readiness
      given, the Buyers shall retain their option to cancel. In the event that the
      Buyers elect to cancel this Agreement the deposit together with interest earned
      shall be released to them immediately.

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              15.

            	
              Buyers'
                representatives

            

    

    

    After
      this Agreement has been signed by both parties and the deposit has been lodged,
      the Buyers  have the right to place
one two representatives
      on board the Vessel at their sole risk and expense for a period
commencing after.
upon 

    arrival
      at 01st
      April 2008 to the Vessel’s delivery on or
      about  

    These This
      representatives is are on board for the
      purpose of familiarisation and in the capacity of  observers only, and
he they shall not interfere in any
      respect with the operation of the Vessel.  The Buyers representatives
      shall sign the Sellers’ letter of indemnity prior to his their
      embarkation.     The Buyers shall pay upon the
      vessel’s delivery for meals and lodging for the representative at a rate of US$
      10 (ten) per person per day.

    

    
      	
              16.

            	
              Arbitration

            

    

    

    
      	
              a)*

            	
              This
                Agreement shall be governed by and construed in accordance with English
                law and any dispute arising out of this Agreement shall be referred
                to
                arbitration in London in accordance  with the Arbitration Acts
                1950 and 1979 or
                any  statutory  modification  or  re-enactment
                thereof for the time being in force, one arbitrator being appointed
                by
                each party.  On the receipt by one party of the nomination in
                writing of the other party's arbitrator, that party shall appoint
                their
                arbitrator within fourteen days, failing which the decision of the
                single
                arbitrator appointed shall apply.  If two arbitrators properly
                appointed shall not agree they shall appoint an umpire whose decision
                shall be final.

            

    

    

    
      	
              b)*

            	
              This
                Agreement shall be governed by and construed in accordance with Title
                9 of
                the United States Code and the Law of the State of New York and should
                any
                dispute arise out of this Agreement, the matter in dispute shall
                be
                referred to three persons at New York, one to be appointed by each
                of the
                parties hereto, and the third by the two so chosen; their decision
                or that
                of any two of them shall be final, and for purpose of enforcing any
                award,
                this Agreement may be made a rule of the Court. 

              The
                proceedings shall be conducted in accordance with the rules of the
                Society
                of Maritime Arbitrators, Inc.  New
                York.

            

    

    

    
      	
              c)*

            	
              Any
                dispute arising out of this Agreement shall be referred to arbitration
                at                  
                , subject to the rules and procedures
                applicable there. The laws
                of                                    shall
                govern this Agreement.

            

    

    

    16
      a), 16 b) and 16 c) are alternatives, delete whichever is not
      applicable.  In the absence of deletions, alternative 16
      a) to apply.

    

    
      	 	 	 
	
              SELLERS:

            	 	
              BUYERS:

            
	
              NAME:

            	 	
              NAME:ex10_5.htm

    
      

    

    Exhibit
      10.5

     

     

    Atrion
      Corporation

    Incentive
      Compensation Plan for Chief Financial Officer

    for
      Calendar Years Beginning 2007

    

    
      
        

      

    

     

    This
      plan
      provides the opportunity for the Vice President and Chief Financial Officer
      (“CFO”) of Atrion Corporation (the “Company”) to receive incentive compensation
      based on the Company’s attainment of certain financial goals during each
      calendar year.  This plan supersedes and replaces the Atrion
      Corporation Incentive Corporation Plan for Chief Financial Officer for Calendar
      Years Beginning 2001, which has been terminated, and is effective for the
      calendar year 2007, and subsequent calendar years until it is modified or
      terminated.

     

    Financial
      Goals:

     

    The
      Company shall pay the CFO a cash bonus (the “Annual Bonus”) for each calendar
      year (with the first Annual Bonus hereunder to be paid in 2008 (within the
      period set forth below) for the year 2007) equal to the amount that is 2% of
      the
      Increase in Operating Income for such calendar year, but in no event will any
      Annual Bonus exceed 50% of the CFO’s base salary for such calendar
      year.  For purposes of this plan, “Increase in Operating Income” for a
      calendar year shall be equal to the excess, if any, of the Company’s operating
      income for such calendar year over the Company’s operating income for the
      previous calendar year.  The Compensation Committee of the Board shall
      have discretion to adjust the Increase in Operating Income calculated pursuant
      to the previous sentence to disregard one-time, non-recurring extraordinary
      items and shall make such equitable adjustments as are required to give effect
      to acquisitions, divestitures, or similar corporate transactions by or involving
      the Company.

     

    The
      Annual Bonus for each calendar year shall be payable as soon as practicable
      following the date on which the Annual Bonus can be determined, but in no event
      later than March 15 of the year following such calendar year.

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