Document:

Exhibit 10.38

 

	
   

  	
  Norwegian Shipbroker
  Association’s Memorandum 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.

  

 

MEMORANDUM OF AGREEMENT

 

Dated: 14th August, 2006

 

“MARIA C. MARITIME INC.”

 

MESSRS DANAOS CORPORATION WILL
GUARANTEE PERFORMANCE OF SELLING COMPANY AND SHALL REMAIN JOINTLY AND SEVERALLY
FULLY RESPONSIBLE FOR PROMPT AND TIMELY FULFILLMENT OF ALL SELLERS’ RESPONSIBILITIES,
UNDERTAKINGS, OBLIGATIONS AND LIABILITIES HEREUNDER

 

hereinafter called the Sellers, have agreed to sell,
and

 

MESSRS SHANGHAI TIME SHIPPING CO LTD
OR A COMPANY TO BE NOMINATED BY THEM NO LATER THAN 30 DAYS OF APPROXIMATE
NOTICE OF VESSEL’S INTENDED DELIVERY IS TENDERED FROM SELLERS

 

THE PERFORMANCE OF THIS AGREEMENT BY
THE NOMINEE IS GUARANTEED BY SHANGHAI TIME SHIPPING CO LTD WHO ARE TO REMAIN
JOINTLY AND SEVERALLY FULLY RESPONSIBLE FOR THE PROMPT AND TIMELY FULFILLMENT
OF ALL BUYERS’ RESPONSIBILITIES, UNDERTAKINGS, OBLIGATIONS AND LIABILITIES
HEREUNDER.

 

hereinafter called the Buyers, have agreed to buy

 

Name: “MARIA C”

 

Classification Society/Class: NKK

 

	
  Built: 1994

  	
   

  	
  By: SHIN KURUSHIMA
  ONISHI

  
	
   

  	
   

  	
   

  
	
  Flag: Cyprus

  	
   

  	
  Place of registration: Limassol

  
	
   

  	
   

  	
   

  
	
  Call Sign: C4HD2

  	
   

  	
  Grt/Nrt: 26093 /
  14868

  

 

Register Number:
IMO/Reg No: 9103166

 

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

 

Definition

 

“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 Shanghai / Piraeus / London 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 including
e-mail.

 

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

 

1.        Purchase
price: USD 22.500.000 (United States Dollars Twenty Two Million Five Hundred
Thousand, Only)

 

2.        Deposit

 

As security for the correct fulfilment of this
Agreement the Buyers shall pay remit a deposit of 10% (ten per cent) of the Purchase Price
within 3 (three) Shanghai/New York/Piraeus
banking days from the date both parties
hereto have signed this Agreement or a faxed/scanned copy hereof  from
the date of this Agreement. This deposit shall be placed with

 

 

The Royal Bank of Scotland PLC

Piraeus branch

45 Akti Miaouli

185 10 Piraeus, Greece

Swift Code RBOSGRAAA

Attn: Mr. Fotis Bratimos/ Ms Elena Konstantilieri

Account No: 506143

Beneficiary: Joint account in the names of “SHANGHAI TIME SHIPPING CO. LTD.”

(Buyers) and “MARIA C. MARITIME INC” (Sellers)

 

USD correspondent: JP Morgan Chase
Bank, N.Y. CHASUS33

 

and held by them in a joint account for the Sellers
and the Buyers, to be released in accordance with joint written instructions of
the Sellers and the Buyers. Interest, if any, to be credited to the Buyers. Any
fee charged for opening, holding, lifting and closing
holding the said deposit shall be borne equally by the
Sellers and the Buyers. Buyers are not responsible
for the delay of deposit remittance solely due to Sellers failure to process
the joint account in time

 

3.        Payment

 

The said deposit and the balance of
90% (ninety per cent) of the Purchase Price (the ‘Balance
Money’) together with all other
monies payable under this Agreement shall be paid in full free of
bank charges to

 

DANAOS CORPORATION

Account Number 178200-100

With the Royal Bank of Scotland

Piraeus branch

45 Akti Miaouli

185 10 Piraeus, Greece

Swift Code RBOSGRAAA 

IBAN GR28 0640 0010 0000 0017 8200 100

 

on delivery of vessel, but not later than 3 Shanghai/NewYork/Plraeus/London 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

 

Closing and exchange of delivery
documents shall take place in London, U.K

Structured Ship Finance

Shipping Business Centre

The Royal Bank of Scotland Group

Tel: +44 207 615 4018

 

4.        Inspections

 

The vessel and her classification
records’ have been inspected and accepted by the Buyers and by the C.C.S. Thus
the sale is outright and definite.

 

a)*                  The
Buyers have inspected and accepted the Vessel’s classification records. The
Buyers have also inspected the Vessel at/in on

 

and have accepted the Vessel following this inspection
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 Seller 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 lessee thereby incurred. The Buyers shall
inspect the Vessel without opening up and without cost to the Sellers. During
the inspection, the Vessel’s dock 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.                         Notice,
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 30/20/10/7, and
3 days 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.

 

Sellers shall keep the Buyers well
informed of the Vessel’s itinerary and nominate the delivery range and intended
place of delivery 30 days prior to the approximate delivery. Sellers shall
provide Buyers with 20/15/10/7 and 3 days notice of the estimated time of
arrival at the intended place of 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.

 

The vessel will be delivered with
swept clean holds

 

b)        The Vessel
shall be delivered and taken over safely afloat at a safe and accessible berth
or anchorage at/in

 

in the Sellers’ option.

 

Expected time of delivery: Between 17th November 2006 and 18th February 2007.
Sellers shall also use their best endeavor to deliver the vessel as early as
possible.

 

Sellers shall use their best endeavor
to deliver the vessel in Singapore/Japan range. However, final delivery range
will be back to back with the redelivery of the existing charters, i.e. vessel
to be delivered by Sellers and taken over by Buyers over safely afloat at a
safe and accessible berth/anchorage/buoy within Aden/Japan range, Skaw/Passero
range including UK/Med, Buenos Aires/East Coast USA range, in the Sellers
option, but in case at Sellers nominated port of delivery there is no Chinese
Embassy where the Buyers joining crew cannot process visa from, then Buyers
have the option to nominate at least 7 running days prior to the Sellers
intended date of delivery an alternative port of delivery, which not to be more
than 12 days steaming time from the Sellers’ nominated delivery port. Buyers
nominated port to be the nearest to Sellers nominated port that Buyers may
obtain visa for their crew. Sellers to undertake to sail the vessel to Buyers
such nominated port at Sellers risk and Buyers cost. These costs will be the
vessel’s daily running cost plus bunkers plus financing interest plus cost of
exit from Sellers delivery port and entry to Buyers delivery port as quoted by
the Sellers and Buyers agents respectively

 

Opex 3480 + Bunkers 10050 + Interest
4286 = USD 17816 per day at sea plus port(s) cost.

 

Sea Time to be calculated upon full
away from pilot station from Sellers nominated delivery port to sea pilot
station to Buyers nominated port

 

c)                         Date
of cancelling (see clauses 5c), 6b) (iii) and 14): 18th February 2007 in Buyers option

 

However, only in case Sellers need
extra time purely for the preparatory purpose of delivery, i.e. not for the
time charterers charter extension purpose, Buyers to grant an extention of
cancelling date upto 28th February 2007.

 

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 3 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 3 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 (see additional clause 17)

 

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
Classification Society’s rules. If the [illegible] 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 effect the Vessel’s class,
then unless repairs can be carried out affect to the satisfaction of the
Classification society, the Sellers shall arrange for the vessel to be
drydocked at their expenses for inspection by the Classification society of the
Vessel’s underwater ports 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 effect 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 talishaft 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 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
survey cycle. The Buyers shall declare where they require the tailshaft to be drawn
and surveyed not later than by the completion of the inspection of 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 effect the Vessel’s class, these parts shall be
renewed or made good at the Seller’s 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
those 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 effect 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 Buyer’s 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 Classifications 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’ 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.

 

**       6a)
and 6 b) are alternative; 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 an order are to be 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)/propellers
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 Seller’s 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):

 

•
Dosing pump for boiler water treatment (1 piece)

• Unitor HFO compatibility test kit (1 piece)

• Extra deck air compressor with panel (1
piece)

• H.P. washing machine complete with extension
cables (1 piece)

• Painting spray machine

 

 

The Buyers shall take over the remaining bunkers and
unused lubricating oils in sealed drums or in storage tanks without having
passed through the vessel’s system and sealed drums and pay the current
not marked last net purchase prices evidenced by the copy of invoices which
to be provided by the sellers 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.

 

The Seller’s and the Buyers’s familiarization
representative shall jointly measure the bunker/lubricant oil quantity and
prepare a Statement of Fact prior to delivery of the vessel showing the
remaining quantities of bunkers and unused lubricant oil including calculated
consumption by the Vessel upto the date of delivery, which shall be the amount
of bunkers and lubricating oils the Buyers shall pay under the terms of this
agreement.

 

8.                        Documentation.
(see also additional clause 18)

 

The place of closing:

 

In
exchange for payment-of-the-Purchase Price the Sellers shall furnish the Buyers
with 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 encumbrance,
mortgages and maritime liens or any other debts or [illegible] 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 Glass issued within 72 hours prior to delivery.

 

d)                       Current
Certificate issued by the competent authorities stating that the Vessel is free
from register encumbrance.

 

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 purchase 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 drawings and manuals etc., which are on board the Vessel and in
Sellers’ office and/or their possession. 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 Buyers 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, taxes and maritime liens or any other debts whatsoever as well as

 

 

any dispute claim with its Union.
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.

 

Sellers will provide Buyers
with Free of Encumbrances Certificate dated the day of the closing same to be
issued by the vessel’s Registry Authority or Cypriot Consulate in Piraeus or
London.

 

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, where as 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
Agreements she shall be delivered by the Sellers and taken over by the Buyers as
she was at the time of inspection, fair wear and tear excepted.

 

However, the Vessel shall be
delivered with her class maintained without condition/recommendation*, free of
average damage affecting the Vessel’s class, and with her classification
certificates and national certificates, as well as all other certificates the
Vessel had at the time of inspection, valid and unextended for minimum
3 (three) months after the day of delivery without condition/recommendation*
by Class or relevant authorities at the time of delivery.

 

“Inspection” in the 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 reports which are accepted by the Classification
Society without condition/recommendation are not to be taken into account.

 

12.      Name/markings

 

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

 

13.      Buyers’ default

 

Should the deposit not be
paid in accordance with Clause 2, the Sellers have the right to cancel this
Agreement, and they shall be entitled to claim compensation for their losses
and for all their 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 their 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
validity complete a legal transfer by the date stipulated in line 61 or at such date as may have been extended pursuant to this Agreement 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, has not been
given by the date stipulated in line 61 or at such date as may have been
extended pursuant to this Agreement 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 thereon 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 validity 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 60 days prior to the expected date of delivery
to place up to 2 (two) representatives on board
the Vessel at their sole risk and expense upon arrival at ......... on or about
..These representatives are on board for the purpose of familiarisation and in
the capacity of observers only, and they shall not interfere in any respect
with the operation of the Vessel. The Buyers’ representatives shall sign the
Sellers’ letter of indemnity prior to their embarkation. The Buyers’
representatives are to be allowed to remain on board up to and during the time
of delivery, always at Buyers’ sole risk and expense.

 

Once Sellers have tended
NOR, Buyers are entitled to have another 8 representatives onboard for
familiarization purpose only.

 

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 1996
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 Stage 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 procedures applicable there. The laws of         shall govern this Agreement.

 

*                            16a),
16b) and 16c) are alternatives; delete whichever is net applicable in the
absence of deletions, alternative 16 a) to apply.

 

Additional Clauses:

 

17. Divers Inspection

 

No drydocking, prior to the
delivery of the Vessel, however the Buyers to have the option to arrange at
their risk and expense at any convenient port before delivery or at the port of
delivery an inspection of the Vessel’s underwater parts by divers appointed by
Buyers and approved by Vessel’s Class, in the presence of the Class surveyor
and Sellers’ and Buyers’ representatives, Buyers not to interfere at the video
monitor or with the Class surveyor’s work.

 

The Sellers shall notify
Buyers as to the vessel’s itinerary for Buyers to decide the most convenient
place for the underwater inspection to take place at Sellers time. Sellers to
arrange Class Surveyor at Buyers expenses who shall be in attendance at the time
of underwater inspection.

 

 

Buyers shall in any event pay for the divers and the
cost of Class attendance. The extent of the inspection and the conditions under
which it is performed shall be to the satisfaction/requirement of the Class
surveyor attending. The Class to be the sole arbitrator as to whether
underwater damage, if any, will impose any condition of Class. If the
conditions at the place of such inspection are not suitable for such
inspection, the Sellers shall make the Vessel available at a suitable
alternative nearby place.

 

Should any damage be found to the underwater parts
that will impose a condition of Vessel’s present class, then:

 

a. In case vessel’s Class imposes a condition but does
not require drydocking before next scheduled drydocking, Sellers have the
option to repair same to Class satisfaction prior to delivery or to compensate
the Buyers with the estimated cost to repair such damage in a way which is
acceptable to the Vessel’s Class, which cost to be only the direct cost to repair
such damage (i.e. excluding docking/undocking costs, tugs, loss of hire,
deviation, etc), as per the average of 2 (two) quotations received from 1 (one)
major reputable repair yard chosen by Buyers and 1 (one) major reputable repair
yard chosen by Sellers, such repair yards to be located in China and capable of
repair a vessel of such type; The average amount agreed shall be deducted from
the Purchase Price at the time of delivery.

 

b. In case that the rudder, propeller, bottom or other
underwater parts below the summer load line be found broken, damaged or
defective, so as to affect Vessel’s present class and must be immediately
repaired, then clause 6B(ii) NSF 93 to be reinstated.

 

In the event the Vessel is to be drydocked, the
canceling date will be extended appropriately for the extra time taken to
deliver the Vessel due to ballasting/drydocking/repairs to be carried out to
Class’ satisfaction in accordance with this Agreement, [but such extension will
not exceed in total 7 running days].

 

In case of drydocking, the Buyers may carry out
cleaning/painting works at their sole risk and expense, subject to the Sellers’
approval, without interfering with the Sellers’ drydock works nor the
classification surveyor’s work, if any, and without affecting Vessel’s timely
delivery schedule. If however Buyers’ works are still in progress when Sellers
have completed their works and they are ready in all respects to deliver the
Vessel to the Buyers as per the Agreement, then Sellers shall tender final
Notice of Readiness to the Buyers whilst the Vessel is in drydock and Buyers
must take timely delivery of the Vessel whether on drydock or not, with
undocking expenses only to be for Sellers’ account.

 

The Class shall issue a Class Survey Record which
indicates whether the Underwater Inspection has found any damage affecting
class, and in the event that such damage is found, indicates whether it
requires immediate rectification or whether it should be rectified during the
next drydocking. This Class Survey Record will be issued immediately after the
completion of the divers Underwater Inspection.

 

18.
Documentation.

 

AA. Sellers to provide Buyers with following documents
in exchange of purchase money at the time of closing:

 

(1)       Three original
bills of sale notarially attested and legalized by the Chinese Embassy or
Consulate in Athens or London and warranting that the vessel is free for all
encumbrances, mortgages and maritime liens or other debts or claims whatsoever
to be signed by a duly authorized signatory on behalf of the Sellers.

 

(2)       Minutes of
meetings of the Board of directors and shareholders of the Sellers, authorizing
the sale of the vessel to the Buyers and the issue of a Power of Attorney. The
minutes to be notarially attested and legalized by the Chinese Embassy or
Consulate in Athens or London.

 

(3)       Copies of
Memorandum and Articles of Association and other constitutional documents of
the Seller, which are to be certified by the secretary of the Sellers.

 

 

(4)       Power of
Attorney of the Seller authorizing individuals to execute all necessary
documents on the Sellers’ behalf, same to be notarially attested and legalized
by the Chinese Embassy or Consulate in Athens or London.

 

(5)       Deletion
Certificate in original issued by the vessel’s Registry Authority on the date
of delivery. In case that such original certificate is not available, the
Sellers instead shall furnish the Buyers with a Letter of Undertaking on
Sellers company letterhead at the time of delivery to provide the Deletion
Certificate in original to the Buyers within 5 (five) working days from the
date of delivery of the Vessel

 

(6)       Free of
Encumbrances Certificate in original issued by the Vessel’s Registry Authority
or the Cypriot Consulate in Piraeus or London on the date of delivery
certifying that the vessel is free of all registered encumbrances and
mortgages.

 

(7)       Letter of
Undertaking which clearly states vessel is free from registered encumbrance and
from all maritime liens and debts and that they further undertake to indemnify
the Buyer for all and any claims arising prior to the delivery of the vessel.

 

(8)       Original class
maintained certificate from NK classification that the vessel’s class is
maintained free of recommendations/conditions of class dated not earlier than
three (3) working days before date of delivery

 

(9)       Letter of
Undertaking which states that to the best of the Sellers’ knowledge the vessel
is not blacklisted by the Arab Boycott League in Damascus or the ITF or any
other nations or organizations.

 

(10)     3 original
copies of commercial invoice in relation to the total purchase price of the
vessel.

 

(11)     3 original
copies of commercial invoices in relation to bunkers and lubrication oils
remaining on board the vessel at delivery along with copies of invoices for the
purchase of bunkers and lubrication oils.

 

(12)     Letter of
Undertaking from seller to delete the vessel from INMARSAT on the day of
delivery of the vessel.

 

(13)     Current
Certificate of Ownership issued by the competent authorities of the flag state
of the Vessel dated not earlier than three (3) working days before date of
delivery.

 

BB. List of Original Documents to be delivered by
vessel’s Buyers to Sellers in exchange of purchase money at the time of closing

 

(1).      Copy of the
Buyers Company Registration Certificate duly notarised and officially
translated into the English language by a competent public authority.

 

(2).      Original Board
Resolutions (notarised and officially translated in the English language by a
competent public authority) ratifying the Memorandum of Agreement and all other
terms of the purchase of the Vessels and authorising the issuance of a Power of
Attorney as per paragraph 3 herebelow.

 

(3).      Original Power
of Attorney (notarised and officially translated in the English language by a
competent public, executed by a duly authorised Director, appointing
attorney(s)-in-fact empowered to sign, execute and deliver any and all
documents necessary in connection with the purchase
of the Vessels, as well as for the release of the deposit money and payment of
the purchase price as well as any other payment due under the Memorandum of
Agreement.

 

Both Sellers and Buyers shall exchange to each other
the above drafts of documents at least 7 (seven) working days prior to delivery

 

 

19.
Blacklisting.

 

The Sellers to confirm that to the best of their
knowledge the Vessel is not blacklisted by any nation.

 

20.
Plans/Manuals

 

At the time of Vessel’s delivery the
Sellers to hand over to Buyers’ representative all drawings/plans and manuals
available on board which are not to be returned to Class or Registry (in which
case copies shall be provided). Sellers’ ISM manuals and forms as well as
Vessel’s log books will not be handed over, however Buyers shall have the right
to take the copy of log books. In addition all drawings/plans and manuals
available in Managers’/Owners’ office to be forwarded to the Buyers’ office as
soon as possible after delivery delay. Forwarding expenses to be for Buyers’
account.

 

21.
Confidentiality

 

Both parties shall keep all the negotiations and the
Agreement and all its terms strictly private and confidential.

 

 

	
  For the Sellers

  	
   

  	
  For the Buyers

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   /s/ I Prokopakis

  	
   

  	
   

  	
  /s/ illegible

  	
   

  
	
  Name: I. PROKOPAKIS

  	
   

  	
  Name:
  [illegible]

  
	
   

  	
   

  	
   

  
	
  Title: Director

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  Date: 16/08/2006

  	
   

  	
  Date: 2006.8.15

  
	
   

  	
   

  	
   

  
	
  On behalf of:

  	
   

  	
  On behalf of:

  
	
  MARIA C.
  MARITIME INC.

  	
   

  	
  Shanghai Time
  Shipping Co. Ltd. or its nominee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  For the Sellers

  	
   

  	
  For the Buyers

  
	
   

  	
   

  	
   

  
	
  FOR DANAOS
  CORPORATION

  	
   

  	
  FOR SHANGHAI
  TIME SHIPPING CO LTD.

  
	
   

  	
   

  	
   

  
	
   /s/ I. Prokopakis

  	
   

  	
   

  	
  /s/ illegible

  	
   

  
	
  Name: I. PROKOPAKIS

  	
   

  	
  Name: [illegible]

  
	
   

  	
   

  	
   

  
	
  Title: Director

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  Date: 16/08/2006

  	
   

  	
  Date: 2006.8.15

  
	
   

  	
   

  	
   

  
	
  On behalf of:

  	
   

  	
  On behalf of:Exhibit 10.39

 

	
   

  	
  Norwegian Shipbroker
  Association’s Memorandum 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.

  

 

MEMORANDUM
OF AGREEMENT

Dated: 14th August, 2006

 

“MERCATOR SHIPPING INC.”

 

MESSRS
DANAOS CORPORATION WILL GUARANTEE PERFORMANCE OF SELLING COMPANY AND SHALL
REMAIN JOINTLY AND SEVERALLY FULLY RESPONSIBLE FOR PROMPT AND TIMELY
FULFILLMENT OF ALL SELLERS’ RESPONSIBILITIES, UNDERTAKINGS, OBLIGATIONS AND
LIABILITIES HEREUNDER

 

hereinafter called the
Sellers, have agreed to sell, and

 

MESSRS
SHANGHAI TIME SHIPPING CO LTD OR A COMPANY TO BE NOMINATED BY THEM NO LATER
THAN 30 DAYS OF APPROXIMATE NOTICE OF VESSEL’S INTENDED DELIVERY IS TENDERED
FROM SELLERS

 

THE
PERFORMANCE OF THIS AGREEMENT BY THE NOMINEE IS GUARANTEED BY SHANGHAI TIME
SHIPPING CO LTD WHO ARE TO REMAIN JOINTLY AND SEVERALLY FULLY RESPONSIBLE FOR
THE PROMPT AND TIMELY FULFILLMENT OF ALL BUYERS’ RESPONSIBILITIES,
UNDERTAKINGS, OBLIGATIONS AND LIABILITIES HEREUNDER.

 

hereinafter called the
Buyers, have agreed to buy

 

Name: “MV ACHILLEAS”

 

Classification Society/Class:
NKK

 

	
  Built: 1994

  	
   

  	
  By: KOYO MIHARA

  
	
   

  	
   

  	
   

  
	
  Flag: Cyprus

  	
   

  	
  Place of registration: Limassol

  
	
   

  	
   

  	
   

  
	
  Call Sign: C4HB2

  	
   

  	
  Grt/Nrt: 35879 / 23407

  

 

Register Number: IMO/Reg No:
9115224

 

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

 

Definition

 

“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 Shanghai / Piraeus / London 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
including e-mail.

 

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

 

1.        Purchase price: USD 25,500,000 (United States Dollars Twenty
Five Million Five Hundred Thousand, Only)

 

2.        Deposit

 

As security for the correct
fulfilment of this Agreement the Buyers shall pay  remit a deposit of 10% (ten per cent)
of the Purchase Price within 3 (three)
Shanghai/New York/Piraeus/London banking days from the date both parties hereto have signed this
Agreement or a faxed/scanned copy hereof from the date of
the-Agreement. This deposit shall be placed with

 

 

The Royal Bank of Scotland PLC

Piraeus branch

45 Akti Miaouli

185 10 Piraeus, Greece

Swift Code RBOSGRAAA

Attn: Mr. Fotis Bratimos/ Ms Elena Konstantilleri

Account No: 506143

Beneficiary: Joint account in the names of “SHANGHAI TIME SHIPPING CO. LTD.”
(Buyers) and “MERCATOR SHIPPING INC” (Sellers)

 

USD correspondent: JP Morgan Chase
Bank, N.Y. CHASUS33

 

and held by them in a joint account for the Sellers
and the Buyers, to be released in accordance with joint written instructions of
the Sellers and the Buyers. Interest, if any, to be credited to the Buyers. Any
fee charged for opening, holding, lifting and closing
holding the said deposit shall be borne equally by the Sellers and the
Buyers. Buyers are not responsible for the delay of
deposit remittance solely due to Sellers failure to process the joint account
in time

 

3.                        Payment

 

The said deposit and
the balance of 90%  (ninety per
cent) of the Purchase Price (the ‘Balance Money’) together with all other
monies payable under this Agreement shall be paid in full free of
bank charges to

 

DANAOS CORPORATION

Account Number 178200-100

With the Royal Bank of Scotland

Piraeus branch

45 Akti Miaouli

185 10 Piraeus, Greece

Swift Code RBOSGRAAA

IBAN GR2B 0640 0010 0000 0017 8200 100

 

on delivery of vessel, but not later than 3 Shanghai/NewYork/ Piraeus/London 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

 

Closing and exchange of delivery
documents shall take place in London, U.K

Structured Ship Finance

Shipping Business Centre

The Royal Bank of Scotland Group

Tel: +44 207 615 4018

 

4.                         Inspections

 

The vessel and her classification
records’ have been inspected and accepted by the Buyers and by the C.C.S. Thus
the sale is outright and definite.

 

a)*                  The
Buyers have inspected and accepted the Vessel’s classification records. The
Buyers have also inspected the Vessel at/in                         
on

 

and have accepted the Vessel following this inspection
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 Seller 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.                         Notice,
time and place of delivery

 

a)                         The
Sellers shall keep the Buyers well informed of the Vessel’s itinerary and shall
provided the Buyers with 30/20/10/7 and 3 days 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 Agreemnt, the Sellers shall give the Buyers a written
Notice of Readiness for delivery.

 

Sellers shall keep the Buyers well
informed of the Vessel’s itinerary and nominate the delivery range and intended
place of delivery 30 days prior to the approximate delivery. Sellers shall
provide Buyers with 20/15/10/7 and 3 days notice of the estimated time of
arrival at the intended place of 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.

 

The vessels will be delivered with
swept clean holds

 

b)                        The
Vessel’s shall be delivered and taken over safely afloat at a safe and
accessible berth or anchorage at/in

 

in the Seller’s option

 

Expected time of delivery: Between 16th February 2007 and 18th April 2007.
Sellers shall also use their best endeavor to deliver the vessel as early as
possible.

 

Sellers shall use their best endeavor
to deliver the vessel in Singapore/Japan range. However, final delivery range
will be back to back with the redelivery of the existing charters, i.e. vessel
to be delivered by Sellers and taken over by Buyers over safely afloat at a
safe and accessible berth/anchorage/buoy within Skaw/Passero range,
Singapore/Japan range including islands or US Gulf, in the Sellers option, but
in case at Sellers nominated port of delivery there is no Chinese Embassy where
the Buyers joining crew cannot process visa from, then Buyers have the option
to nominate at least 7 running days prior to the Sellers intended date of
delivery an alternative port of delivery, which not to be more than 12 days
steaming time from the Sellers’ nominated delivery port. Buyers nominated port
to be the nearest to Sellers nominated port that Buyers may obtain visa for
their crew.-Sellers to undertake to sail the vessel to Buyers such nominated
port at Sellers risk and Buyers cost. These costs will be the vessel’s daily
running cost plus bunkers plus financing interest plus cost of exit from
Sellers delivery port and entry to Buyers delivery port as quoted by the
Sellers and Buyers agents respectively

 

Opex 3528 + Bunkers 11100 + Interest
4286 = $18914 per day at sea plus port(s) cost

 

Sea Time to be calculated upon full
away from pilot station from Sellers nominated delivery port to sea pilot
station to Buyers nominated port

 

c)        Date of
cancelling (see clauses 5 c), 6 b) (iii) and 14): 18th April 2007 in Buyers option

 

However, only in case Sellers need
extra time purely for the preparatory purpose of delivery, i.e. not for the
time charterers charter extension purpose, Buyers to grant an extention of
cancelling date upto 30th April 2007

 

 

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 3 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 3 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 (see additional clause 17)

 

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
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 effect 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 effect the Vessel’s class, such
defects shall be made good by the Sellers at their expense to the satisfaction
of the classification society without condition/recommendation*. In such event
the Sellers are to pay also for the cost of the underwater inspection and the
Classification Society’s attendance.

 

(iii)      If
the vessel is to be drydocked pursuant to Clause 6 b) (ii) and no suitable
drydocking facilities are available at the port of delivery, the Sellers shall
take the Vessel to a port where suitable drydocking facilities are available,
whether within or outside the delivery range as per Clause 5 b). Once
drydocking has taken place the Sellers shall deliver the Vessel at a port
within the delivery range as per clause 5 b) which shall, for the purpose of
this clause, become the new port of delivery, in such event the cancelling date
provided for in clause 5 b) shall be extended by the additional time required
for the dry docking 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 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 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 of the Classification Society. The
drawing and refitting of the shaft tailshaft shall be arranged by the Sellers.
Should any parts of the tailshaft system be condemned or found defective so as to
effect the Vessel’s class, those parts shall be renewed or made good at the
Seller’s 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 effect 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
Buyer’s 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 Classifications 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 6 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 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 Seller’s 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):

 

•
Dosing pump for boiler water treatment (1 piece)

•
Unitor HFO compatibility test kit (1 piece)

•
Extra deck air compressor with panel (1 piece)

 

 

• H.P.
washing machine complete with extension cables (1 piece)

• Painting
spray machine

 

The Buyers shall take over the remaining bunkers and
unused lubricating oils in sealed drums
or in storage tanks without having passed
through the vessel’s system  and sealed drums and pay the current
net marked last net purchase prices evidenced by the copy of invoices which
to be provided by the sellers 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.

 

The Seller’s and the Buyers’s familiarization
representative shall jointly measure the bunker/lubricant oil quantity and
prepare a Statement of Fact prior to delivery of the vessel showing the
remaining quantities of bunkers and unused lubricant oil including calculated
consumption by the Vessel upto the date of delivery, which shall be the amount
of bunkers and lubricating oils the Buyers shall pay under the terms of this
agreement

 

8.        Documentation,
(see also additional clause 18)

 

The place of closing:

 

In exchange for payment of the Purchase Price the
Sellers shall furnish the Buyers with 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 register encumbrances.

 

e)                        Certificate
of deletion of the Vessel from the Vessel’s a 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 drawings and
manuals etc., which are on board the Vessel and in Sellers’ office and/or their
possession. 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 Buyers 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, taxes and
maritime liens or any other debts whatsoever as well as any dispute claim with
its Union. 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.

 

Sellers will provide Buyers with Free
of Encumbrances Certificate dated the day of the closing same to be issued by
the vessel’s Registry Authority of Cypriot Consulate in Piraeus or London.

 

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, where as 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 Agreements she shall be delivered
by the Sellers and taken over by the Buyers as she was at the time of
inspection, fair wear and tear excepted.

 

However, the Vessel shall be delivered with her class
maintained without condition/recommendation*, free of average damage affecting
the Vessel’s class, and with her classification certificates and national
certificates, as well as all other certificates the Vessel had at the time of
inspection, valid and unextended for minimum 3 (three) months after the day of
delivery without condition/recommendation* by Class or relevant authorities at
the time of delivery

 

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

 

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

 

12.      Name/markings

 

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

 

13.      Buyers’
default

 

Should the deposit not be paid in accordance with
Clause 2, the Sellers have the right to cancel this Agreement, and they shall
be entitled to claim compensation for their losses and for all their 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 their
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 or at
such date as may have been extended pursuant to this Agreement 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,  has not been given by the date stipulated in line 61 or at such date as
may have been extended pursuant to this Agreement 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 thereon shall be
released to them immediately.

 

Should the Sellers fall 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 60 days
prior to the expected date of delivery to place up to 2 (two)
representatives on board the Vessel at their sole risk and expense upon arrival
at........on or  about. These representatives are on board for the
purpose of familiarisation and in the capacity of observers only, and they
shall not interfere in any respect with the operation of the Vessel. The Buyers’
representatives shall sign the Sellers’ letter of indemnity prior to their
embarkation. The Buyers’ representatives are to be allowed
to remain on board up to and during the time of delivery, always at Buyers’ sole
risk and expense.

 

Once Sellers have tended NOR, Buyers
are entitled to have another 8 representatives onboard for familiarization
purpose only.

 

16.                  Arbitration

 

a)*                  This
Agreement shall be governed by the 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 1996 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
[illegible] of the United Stage 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 procedures applicable there. The laws of shall govern this
Agreement.

 

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

 

Additional
Clauses;

 

17. Drivers
inspection

 

No drydocking, prior to the delivery of the
Vessel, however the Buyers to have the option to arrange at their risk and
expense at the convenient port before delivery or at the port of delivery an
inspection of the Vessel’s underwater parts by drivers appointed by Buyers and
approved by Vessel’s Class, in the presence of the Class surveyor and Seller’s
and Buyers’ representatives, Buyers not to interfere at the video monitor or
with the Class surveyor’s work.

 

 

The Sellers shall notify Buyers as to the vessel’s
itinerary for Buyers to decide the most convenient place for the underwater inspection
to take place at Sellers time. Sellers to arrange Class Surveyor at Buyers
expenses who shall be in attendance at the time of underwater inspection.

 

Buyers shall in any event pay for the divers and
the cost of Class attendance. The extent of the inspection and the conditions
under which it is performed shall be to the satisfaction/requirement of the Class
surveyor attending. The Class to be the sole arbitrator as to whether
underwater damage, if any, will impose any condition of Class. If the
conditions at the place of such inspection are not suitable for such inspection,
the Sellers shall make the Vessel available at a suitable alternative nearby
place.

 

Should any damage be found to the underwater parts
that will impose a condition of Vessel’s present class, then:

 

a. In case vessel’s Class imposes a condition but
does not require drydocking before next scheduled drydocking, Sellers have the
option to repair same to Class satisfaction prior to delivery or to compensate
the Buyers with the estimated cost to repair such damage in a way which is
acceptable to the Vessel’s Class, which cost to be only the direct cost to
repair such damage (i.e. excluding docking/undocking costs, tugs, loss of hire,
deviation, etc), as per the average of 2 (two) quotations received from 1 (one)
major reputable repair yard chosen by Buyers and 1 (one) major reputable repair
yard chosen by Sellers, such repair yards to be located in China and capable of
repair a vessel of such type; The average amount agreed shall be deducted from
the Purchase Price at the time of delivery.

 

b. In case that the rudder, propeller, bottom or
other underwater parts below the summer load line be found broken, damaged or
defective, so as to affect Vessel’s present class and must be immediately
repaired, then clause 6B(II) NSF 93 to be reinstated.

 

In the event the Vessel is to be drydocked, the
canceling date will be extended appropriately for the extra time taken to
deliver the Vessel due to ballasting/drydocking/repairs to be carried out to
Class’ satisfaction in accordance with this Agreement, [but such extension will
not exceed in total 7 running days].

 

In case of drydocking, the Buyers may carry out
cleaning/painting works at their sole risk and expense, subject to the Sellers’
approval, without interfering with the Sellers’ drydock works nor the
classification surveyor’s work, if any, and without affecting Vessel’s timely
delivery schedule. If however Buyers’ works are still in progress when Sellers
have completed their works and they are ready in all respects to deliver the
Vessel to the Buyers as per the Agreement, then Sellers shall tender final
Notice of Readiness to the Buyers whilst the Vessel is in drydock and Buyers
must take timely delivery of the Vessel whether on drydock or not, with
undocking expenses only to be for Sellers’ account.

 

The Class shall issue a Class Survey Record which indicates
whether the Underwater Inspection has found any damage affecting class, and in
the event that such damage is found, indicates whether it requires immediate
rectification or whether it should be rectified during the next drydocking.
This Class Survey Record will be issued immediately after the completion of the
divers Underwater Inspection.

 

18. Documentation.

 

AA. Sellers to provide Buyers with following
documents in exchange of purchase money at the time of closing:

 

(1)       Three
original bills of sale notarially attested and legalized by the Chinese Embassy
or Consulate in Athens or London and warranting that the vessel is free for all
encumbrances, mortgages and maritime liens or other debts or claims whatsoever
to be signed by a duly authorized signatory on behalf of the Sellers.

 

(2)       Minutes of
meetings of the Board of directors and shareholders of the Sellers,

 

 

authorizing the sales of the vessel to the Buyers
and the issue of a Power of Attorney. The minutes to be notarially attested and
legalized by the Chinese Embassy or Consulate in Athens or London.

 

(3)       Copies of
Memorandum and Articles of Association and other constitutional documents of
the Seller, which are to be certified by the secretary of the Sellers.

 

(4)       Power of
Attorney of the Seller authorizing individuals to execute all necessary
documents on the Sellers’ behalf, same to be notarially attested and legalized
by the Chinese Embassy or Consulate in Athens or London.

 

(5)       Deletion
Certificate in original issued by the vessel’s Registry Authority on the date
of delivery. In case that such original certificate is not available, the
Sellers instead shall furnish the Buyers with a Letter of Undertaking on
Sellers company letterhead at the time of delivery to provide the Deletion Certificate
in original to the Buyers within 5 (five) working days from the date of
delivery of the Vessel

 

(6)       Free of
Encumbrances Certificate in original issued by the Vessel’s Registry Authority
or the Cypriot Consulate in Piraeus or London on the date of delivery
certifying that the vessel is free of all registered encumbrances and
mortgages.

 

(7)       Letter of
Undertaking which clearly states vessel is free from registered encumbrance and
from all maritime liens and debts and that they further undertake to indemnify
the Buyer for all and any claims arising prior to the delivery of the vessel.

 

(8)       Original
class maintained certificate from NK classification that the vessel’s class is
maintained free of recommendations/conditions of class dated not earlier than three
(3) working days before date of delivery

 

(9)       Letter of
Undertaking which states that to the best of the Sellers’ knowledge the vessel
is not blacklisted by the Arab Boycott League in Damascus or the ITF or any
other nations or organizations.

 

(10)    3 original
copies of commercial invoice in relation to the total purchase price of the
vessel.

 

(11)    3 original
copies of commercial invoices in relation to bunkers and lubrication oils,
remaining on board the vessel at delivery along with copies of invoices for the
purchase of bunkers and lubrication oils.

 

(12)    Letter of
Undertaking from seller to delete the vessel from INMARSAT on the day of
delivery of the vessel.

 

(13)    Current
Certificate of Ownership issued by the competent authorities of the flag state
of the Vessel dated not earlier than three (3) working days before date of
delivery.

 

BB. List of Original Documents to be delivered by
vessel’s Buyers to Sellers in exchange of purchase money at the time of closing

 

(1).      Copy of the
Buyers Company Registration Certificate duly notarised and officially
translated into the English language by a competent public authority.

 

(2).      Original Board
Resolutions (notarised and officially translated in the English language by a
competent public authority) ratifying the Memorandum of Agreement and all other
terms of the purchase of the Vessels and authorising the issuance of a Power of
Attorney as per paragraph 3 here below.

 

(3).      Original Power
of Attorney (notarised and officially translated in the English language by a
competent public authority, executed by a duly authorized Director, appointing
attorney(s)-in-fact empowered to sign, execute and deliver any and all
documents necessary in connection with the purchase of the Vessels, as well as
for the release of the deposit money and payment of the purchase price as well
as any other payment due under the Memorandum of Agreement.

 

 

Both Sellers and Buyers shall
exchange to each other the above drafts of documents at least 7 (seven) working
days prior to delivery.

 

19. Blacklisting.

 

The Sellers to confirm that to the best of their
knowledge the Vessel is not blacklisted by any nation.

 

20. Plans/Manuals

 

At the time of Vessel’s delivery the Sellers to
hand over to Buyers’ representative all drawings/plans and manuals available on
board which are not to be returned to Class or Registry (in which case copies
shall be provided). Sellers’ ISM manuals and forms as well as Vessel’s log
books will not be handed over, however Buyers shall have the right to take the
copy of log books. In addition all drawings/plans and manuals available in
Managers’/Owners’ office to be forwarded to the Buyers’ office as soon as
possible after delivery delay. Forwarding expenses to be for Buyers’ account.

 

21. Confidentiality

 

Both parties shall keep all the negotiations and
the Agreement and all its terms strictly private and confidential.

 

 

	
  For the
  Sellers

  	
   

  	
  For the
  Buyers

  
	
   

  	
   

  	
   

  
	
  /s/ I.
  PROKOPAKIS

  	
   

  	
   

  	
  /s/
  illegible

  	
   

  
	
  Name: I. PROKOPAKIS 

  	
   

  	
  Name:
  Illegible 

  
	
   

  	
   

  	
   

  
	
  Title:
  Director

  	
   

  	
  Title:
  Illegible

  
	
   

  	
   

  	
   

  
	
  Date:
  16/08/2006

  	
   

  	
  Date:
  2006.8.15

  
	
   

  	
   

  	
   

  
	
  On
  behalf of:

  	
   

  	
  On
  behalf of:

  
	
  MERCATOR
  SHIPPING INC.

  	
   

  	
  Shanghai
  Time Shipping Co. Ltd. or its nominee

  
	
   

  	
   

  	
   

  
	
  For the
  Sellers

  	
   

  	
  For the
  Buyers

  
	
   

  	
   

  	
   

  
	
  FOR
  DANAOS CORPORATION

  	
   

  	
  FOR
  SHANGHAI TIME SHIPPING CO. LTD.

  
	
   

  	
   

  	
   

  
	
  /s/ I. PROKOPAKIS

  	
   

  	
   

  	
  /s/
  illegible

  	
   

  
	
  Name: I. PROKOPAKIS 

  	
   

  	
  Name:
  Illegible 

  
	
   

  	
   

  	
   

  
	
  Title:
  Director

  	
   

  	
  Title:
  Illegible

  
	
   

  	
   

  	
   

  
	
  Date:
  16/08/2006

  	
   

  	
  Date:
  2006.8.15

  
	
   

  	
   

  	
   

  
	
  On
  behalf of:

  	
   

  	
  On
  behalf of:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}]]