Document:

Exhibit 10.39

 

FORM OF

 

SHIPBUILDING CONTRACT

 

FOR

 

CONSTRUCTION OF ONE 3800 DWT PRODUCT OIL TANKER

 

(HULL NO. DN-3800-   )

 

BETWEEN

 

 

 

as BUYER

 

and

FUJIAN SOUTHEAST SHIPYARD

 

as SELLER

 

 

CONTENTS

 

	
  ARTICLE 1 -

  	
   

  	
  DESCRIPTION AND CLASS

  	
   

  	
  4

  
	
  ARTICLE 2 -

  	
   

  	
  CONTRACT PRICE & TERMS OF
  PAYMENT

  	
   

  	
  6

  
	
  ARTICLE 3 -

  	
   

  	
  ADJUSTIVIENT.OF THE CONTRACT
  PRICE

  	
   

  	
  9

  
	
  ARTICLE 4 -

  	
   

  	
  APPROVAL OF PLANS AND DRAWINGS -
  SUPERVISION AND INSPECTION

  	
   

  	
  12

  
	
  ARTICLE 5 -

  	
   

  	
  MODIFICATION, CHANGES AND EXTRAS

  	
   

  	
  14

  
	
  ARTICLE 6 -

  	
   

  	
  TRIALS

  	
   

  	
  16

  
	
  ARTICLE 7 -

  	
   

  	
  DELIVERY

  	
   

  	
  18

  
	
  ARTICLE 8 -

  	
   

  	
  DELAYS & EXTENSION OF E FOR
  DELIVERY

  	
   

  	
  21

  
	
  ARTICLE 9 -

  	
   

  	
  WARRANTY OF QUALITY

  	
   

  	
  23

  
	
  ARTICLE 10 -

  	
   

  	
  CANCELLATION, REJECTION AND
  RESCISSION BY THE .BUYER

  	
   

  	
  26

  
	
  ARTICLE 11 -

  	
   

  	
  BUYER’S DEFAULT

  	
   

  	
  26

  
	
  ARTICLE 12 -

  	
   

  	
  INSURANCE

  	
   

  	
  28

  
	
  ARTICLE 13 -

  	
   

  	
  DISPUTES AND ARBITRATION

  	
   

  	
  30

  
	
  ARTICLE 14 -

  	
   

  	
  RIGHT OF ASSIGNMENT

  	
   

  	
  31

  
	
  ARTICLE 15 -

  	
   

  	
  TAXES AND DUTIES

  	
   

  	
  32

  
	
  ARTICLE 16 -

  	
   

  	
  PATENTS, TRADEMARKS AND
  COPYRIGHT,

  	
   

  	
  32

  
	
  ARTICLE 17 -

  	
   

  	
  NOTICES

  	
   

  	
  32

  
	
  ARTICLE 18 -

  	
   

  	
  EFFECTIVE DATE OF CONTRACT

  	
   

  	
  33

  
	
  ARTICLE 19 -

  	
   

  	
  INTERPRETATION

  	
   

  	
  33

  

 

2

 

SHIPBUILDING CONTRACT

FOR

CONSTRUCTION OF ONE 3800DWT PRODUCT OIL TANKER

(HULL NO. DN-3800-   )

 

This CONTRACT,
entered into this day 25 May 2007, by and between                           ,
a corporation organized and existing under the Laws of Liberia, having its
registered office at 80, Broad Street, Monrovia, Liberia or its
nominee, thereinafter called the “BUYER”) on one part; and Fujian Southeast
Shipyard, a corporation organized and existing under the Laws of the People’s
Republic of China, having its registered office at 7# Jianshe Road, Economic
Technical Development Zone of Fuzhou, Fujian Province, the People’s Republic of
China ( hereinafter called the “SELLER” or the “SELLER”).

 

WITNESSETH

 

In
consideration of the mutual covenants contained herein, the SELLER agrees to
design., build, launch, equip and complete at the SELLER’s Shipyard and to sell
and deliver to the BUYER after completion and successful trial specified in
this Contract one (1) 3800DWT product tanker as more fully described in Article
1 hereof (hereinafter called the “VESSEL”), to be registered at the option of
the -BUYER under the Panamanian (or equivalent convenient) flag which may be
chosen by the BUYER and agreed by the SELLER and the BUYER agrees to purchase
and take delivery of the aforesaid VESSEL from the SELLER and to pay for the
same in accordance with the terms and conditions hereinafter set forth.

 

3

 

ARTICLE 1 - DESCRIPTION AND CLASS

 

1.                                       DESCRIPTION

 

The VESSEL
shall be a 3800 metric tons deadweight oil product tanker, at design summer
draught of 5.5 meters of the class described below. The VESSEL shall have the
SELLER’s Hull No.DN-3800-    and shall be constructed, equipped and
completed as described in and in accordance with the terms of this Contract and
the following documentation:

 

(1)                                  Technical
Specification (Drawing No. B1/2-0001),

 

(2)                                  General
Arrangement - (Drawing No. B1/2-0102),

 

(3)                                  Makers
list - (Drawing No. B1/2-0002),

 

(4)                                  Midship
Section - (Drawing No. H1/2-1101),

 

it being
expressly agreed that the following will be also included:

 

(a)                                  All
alterations as agreed up to the date of signing this Contract for the ten (10)
vessels DN-3500-1. DN-3500-2, DN-3500-3, DN-3500-4 DN3500-5, DN-3500-6,
DN-3500-7, DN-3500-8, DN-3500-9, and DN3500-10 either requested by Class or
agreed between each respective buyer and the SELLER.

 

(b)                                 Any
solutions to pending or unresolved problems agreed between each respective
Buyer and Seller and as implemented on for the ten (10) vessels DN-3500-1,
DN-3500-2, DN-3500-3, DN-3500-4 DN-3500-5, DN-3500-6, DN-3500-7, DN-3500-8,
DN-3500-9, and DN-3500-10 will be implemented on this project.

 

(c)                                  Any
change to the specific Makers or equipments used for the ten (10) vessels
..DN-3500-1, DN-3500-2, DN-3500-3, DN-3500-4 DN-3500-5, DN-3500-6, DN-3500-7,
DN-3500-8, DN-3500-9, and DN-3500-10 shall be subject to negotiation and the
mutual agreement of the parties.

 

Attached
hereto and signed by each of the parties to this Contract (hereinafter
collectively called the “Specifications”), making an integral part hereof

 

2.                                       CLASS
AND RULES

 

The VESSEL
including its machinery, equipment and out fittings, shall be constructed in
accordance with and shall comply with the rules and regulations of and under
the supervision of American Bureau of Shipping (ABS) (hereinafter called the “Classification
Society”) and distinguished in record by the symbols:  +Al OIL CARRIER (E) ESP, FP.<60°C, +ACC,
+AMS

 

The
requirements of the authorities and other regulatory bodies as fully described
in the Specifications including that of the Classification Society are to
include any rules or circulars thereof which have been issued and become
effective by the dale of signing this Contract.

 

The SELLER
shall arrange with the Classification Society to assign a representative or
representatives (hereinafter called the “Classification Surveyor”) to the
SELLER’s Shipyard for supervision of the construction of the VESSEL.

 

All fees and
charges incidental to classification and to compliance with all the rules,
regulations and requirements of this Contract and as described in the
Specifications issued and become

 

4

 

effective up
to the date of signing this Contract as well as royalties, if any, payable on
account of the construction of the VESSEL shall be for the account of the
SELLER, except as otherwise provided and agreed herein. The key plans,
materials and workmanship entering into the construction of the VESSEL and the
VESSEL itself shall at all times be subject to inspections and tests in
accordance with the rules and regulations of the Classification Society and
regulatory bodies, which males and regulations as described in detail in page
14;15 and 16 of the Specifications are all accepted by the SELLER.

 

Decisions of
the Classification Society as to compliance or non-compliance with
Classification rules and regulations shall be final and binding upon the
parties hereto.

 

3.                                       PRINCIPAL
PARTICULARS AND DIMENSIONS OF THE VESSEL

 

	
  (a)

  	
  Hull

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Length overall

  	
   

  	
  abt.

  	
   

  	
  90.00m

  
	
   

  	
  Length between
  perpendiculars

  	
   

  	
  abt.

  	
   

  	
  85.00m

  
	
   

  	
  Breadth, moulded

  	
   

  	
  abt.

  	
   

  	
  15.60m

  
	
   

  	
  Depth, moulded

  	
   

  	
  abt.

  	
   

  	
  7.80m

  
	
   

  	
  Designed Summer
  Draught,

  	
   

  	
  abt.

  	
   

  	
  5.50m

  
	
   

  	
  Scantling Draught

  	
   

  	
  abt.

  	
   

  	
  6.00m

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  Propelling
  Machinery

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The VESSEL shall
  be equipped, in accordance with the Specifications, with one (1) set of WARTSILA 8L26 Main
  Engine.

  

 

4.                                       GUARANTEED
SPEED

 

The SELLER
guarantees that the trial speed at design draft (5.5m) at Maximum Continuous
Output of the main engine (MCR), with clean bottom in calm and deep sea under
heaufort scale of 2 or around is not to be less than 12.5 knots.

 

The speed
shall be corrected for wind speed and shallow water effect. The correction
method of the speed shall be as specified in the Specifications.

 

5.                                       GUARANTEED
DEADWEIGHT

 

The SELLER
guarantees that the VESSEL is to have a deadweight of not less than 3800 metric
tons at the summer design draught moulded of 5.50 meters in sea water 1.025
specific gravity.

 

The term, “Deadweight”,
as used in this Contract, shall be as defined in the Specification.

 

The actual
deadweight of the VESSEL expressed in metric tons shall he based on
calculations made by the SELLER and checked by the BUYER, and all measurements
necessary for such calculations shall be performed in the presence of the BUYER’s
supervisor(s) or the party authorized by the BUYER and the Classification
Society Surveyor.

 

Should there
he any dispute between the SELLER and the BUYER in such calculations and/or .measurements,
the decision of the Classification Society agreed by both parties shall he
final.

 

6.                                       SUBCONTRACTING

 

The SELLER
may, at its sole discretion and responsibility, subcontract any portion of the
construction work of the VESSEL to experienced subcontractors, any
subcontracting of main hull structure or superstructures shall require the
prior written approval of the BUYER and the Classification Society before work
commences. However delivery and final assembly into the

 

5

 

VESSEL of any
such work subcontracted shall be at the SELLER’S Shipyard. The SELLER shall
always fully remain responsible for such subcontracted work. The SELLER. shall
remain responsible for compliance with the obligations of this Contract as if
there had been no sub-contracting.

 

In its
contracts with its subcontractors and suppliers, the SELLER shall always ensure
reasonable time margins so as to avoid delays in the progress of the
construction of the VESSEL. Hull blocks to be excluded from subcontracting.

 

7.                                       REGISTRATION

 

The VESSEL
shall he registered by the BUYER at its own cost and expenses under the laws of
Panama (or equivalent convenient) the time of delivery and acceptance thereof
flying Panamanian (or equivalent convenient ) flag. The cost and expenses and
other relative cost involving applying and inspection for statutory surveys
will be borne by the Buyer.

 

The SELLER
warrants that the VESSEL shall upon delivery in construction and performance aspect
be acceptable for registration under the laws of Panama in force at the time of signing the Contract.

 

ARTICLE 2 - CONTRACT PRICE & TERMS OF PAYMENT

 

1.                                       CONTRACT
PRICE

 

The agreed
purchase price of the VESSEL is United States Dollars 7,890,000.00 (in words:
United States Dollars seven million eight hundred and ninety thousand Only);
(hereinafter called the “Contract Price”) net receivable by the SELLER. which
is exclusive of the cost for the BUYER’s Supplies as provided in Article 5
hereof. Therefore the
contract Price is a fixed
price  and shall not be subject to any upward or downward
adjustment except only in accordance with the provisions of Articles 3,5 and 6
of this contract.

 

2.                                       CURRENCY

 

Any and all
payments by the BUYER to the SELLER under this Contract shall he made in United
States Dollars.

 

3.                                       TERMS
OF PAYMENT

 

The Contract
Price shall be paid by the BUYER to the SELLER in installments as follows:

 

(a)                                  1st Installment:

 

The sum of
United States Dollars 755,000.00 (United States Dollars seven hundred fifty
five thousand only), shall become due and payable and be paid by the BUYER
within five (5) New York banking days after this Contract has been signed and
the Refund Guarantee referred to in paragraph 7 of this Article has been issued
and delivered to the BUYER:

 

(b)                                 2nd
Installment:

 

The sum of
United States Dollars 1,132,500.00 (United States Dollars one million and one
hundred thirty two thousand and five hundred only), shall become due and
payable and be paid within live (5) New York banking days after the cutting of
the first steel plate of the VESSEL in the SELLER’s workshop has occurred
accompanied by a copy of the

 

6

 

written
confirmation issued by the Classification Society to the effect that the
cutting of the first steel plate has been carried out.

 

The SELLER shall give a
telex, telefax or letter notice to the BUYER stating that the 1st steel plate
has been cut in its workshop and demand for payment of this installment.

 

(c)                                  3rd
Installment;

 

The sum of United States
Dollars 1,132,500.00 (United States Dollars one million and one hundred thirty
two thousand and five hundred only), shall become due and payable and shall be
paid within five (5) New York banking days after keel-laying of the first
section of the VESSEL. The keel-laying shall be notified by the SELLER with a
telex, telefax or letter notice to the BUYER stating that the said keel-laying
has been carried out accompanied by a copy of the written confirmation issued
by Classification Society to the effect that the keel-laying has been carried
out. The SELLER shall send to the. BUYER a telex or telefax demand for payment
of this installment.

 

(d)                                 4th
Installment:

 

The sum of United States
Dollars 1,132,500.00 (United States Dollars one million and one hundred thirty
two thousand and five hundred only), shall become due and payable and shall be
paid within five (5) New York banking days after successful launching of the
VESSEL. The launching of the VESSEL shall be notified by the SELLER with a
telex, telefax or letter notice to the BUYER stating that the launching of the
VESSEL has been successfully carried out. The SELLER shall send to the BUYER a
telex or telefax demand for payment of this installment.

 

(e)                                  5th
Installment (payment upon Delivery to and Acceptance by the BUYER of the
VESSEL):

 

The sum of United States
Dollars 3,737,500.00 (United States Dollars three million and seven hundred
thirty seven thousand and five hundred Only), plus any increase or minus any
decrease due to the modifications of the Specification and/or the adjustments
of the Contract Price hereunder in accordance with the provisions of the
relevant Articles hereof, shall become due and payable and be paid by the BUYER
to the SELLER concurrently with delivery to and acceptance by the BUYER of the
VESSEL and upon the signing of the Protocol of Delivery and Acceptance by both
parties. The SELLER shall send to the BUYER a telex or telefax demand for this
installment ten (10) days prior to the scheduled date of delivery of the
VESSEL.

 

4.                                       METHOD
OF PAYMENT

 

(a)                                  1st
Installment

 

The BUYER
shall remit the amount of this installment in accordance with Article 2,
Paragraph 3 (a) by telegraphic transfer to XXXXXXXXXXN Bank, xxxx Branch. the
People’s Republic of China as receiving bank nominated by the SELLER, for
credit to the account of XXXXXXXXXXXXXXXXXX
,Account No xxxxxxxxxxxxxx with direct SWIFT advice from the remitting
bank to xxxxxxxxxxxxxxx Bank, xxxx Branch.

 

(b)                                 2nd
Installment

 

The BUYER
shall remit the amount of this installment in accordance with Article 2,
Paragraph 3(b) by telegraphic transfer to xxxxxxxx Bank, xxxx Branch, the
People’s Republic of China as receiving hank nominated by the SELLER, for
credit to the account

 

7

 

of
xxxxxxxxxxxxxxxxxxxx, Account No xxxxxxxxxxx with direct SWIFT advice from the
remitting bank to XXXXXXN
Bank, xxxx Branch.

 

(c)                                  3rd
Installment

 

The BUYER
shall remit the amount of this installment in accordance with Article 2,
Paragraph 3(c) by telegraphic transfer to xxxxxxxx Bank, xxxx Branch, the
People’s Republic of China as receiving bank nominated by the SELLER, for
credit to the account of xxxxxsxxxxxxxxxxxxx Account No XXXNXXXXXX with direct SWIFT advice from the remitting bank to
xxxxxxx Bank, xxxx Branch.

 

(d)                                 4th
Installment

 

The BUYER
shall remit the amount of this installment in accordance with Article 2,
Paragraph 3(d) by telegraphic transfer to XXXXX.XXX Bank, ,xxx,
Branch, the People’s Republic of China as receiving bank nominated by the
SELLER, for credit to the account of XXXXN
XXXXXXX XXXXX Account No
xxxxxxxxxx with direct SWIFT advice from the remitting bank to xxxxx Bank, xxxx Branch.

 

(e)                                  5th
Installment (Payable upon delivery of the VESSEL)

 

The BUYER
shall, at least live (5) working days prior to the date of delivery, remit to
xxxxx Bank, xxxx Branch, the People’s Republic of China for credit to a
suspense account in the name of the BUYER or, at the option of the BUYER, in
the name of the bank which shall finance the payment by the BUYER of the fifth
installment with XXXXX
Bank, XXXX Branch, the
People’s Republic of China the amount of the fifth installment (as adjusted in
accordance with the provisions of this Contract), with an irrevocable
instruction that the said amount shall only be released to the SELLER against
presentation by the SELLER to the said xxxxx Bank, XXXXX Branch, the People’s
Republic of China, of one of the originals of the Protocol of Delivery and
Acceptance signed by the BUYER’s authorized representative and the SELLER.
Interest, if  any, accrued from such deposit,
shall he for the benefit of the BUYER.

 

If the
delivery or the VESSEL is not effected on or before the expiry of a period of
20 days commencing from the date on which the fifth installment is transferred
to the .xxxxx Bank, xxxxx Branch, the People’s Republic of China hi
accordance with this paragraph 4(e) of Article 2, the BUYER shall have the
right to withdraw the said deposit plus accrued interest upon the expiry of
such 20 days period. If, following the withdrawal by the BUYER of the fifth
installment of the Contract Price in accordance with this paragraph 4(e) of
Article 2, a new scheduled delivery date is notified to the BUYER by the SELLER
pursuant to, and in accordance with, this Contract, the BUYER shall remit the
fifth installment in accordance with the terms and conditions set out above.

 

(f)                                    Each
of the second, third and fourth installments of the Contract Price shall he due

and payable on the date falling five (5) banking days after receipt by the
BUYER

 

(i)                                    the
originals of the invoices referred to in paragraph (g) below which shall be accompanied
by stage certificates issued by the Classification Society., and

 

(ii)                                  An
original Letter of Relied Guarantee in respect of the relevant instalment of
the Contract price in the form attached to this Contract as Exhibit “B”.

 

The SELLER
shall be entitled, in respect of amounts due on fixed dates, to present
invoices in advance of the .due date for payment on the due date.

 

8

 

(g)                                 Upon
completion of each event entitling the SELLER to an instalment of the Contract
Price pursuant to paragraph 3 above, the SELLER shall send by telefax to the
BUYER on or after the relevant date, an invoice specifying the amount of the
instalment then due and shall send originals of such invoice in duplicate by
air courier to the BUYER, The BUYER shall be deemed to hay. received
such invoices five (5) banking
days after delivery to the acquirer.

 

5.                                       PREPAYMENT

 

The BUYER
shall have the right to make prepayment of any and all instalments before
delivery of the VESSEL, by giving to the SELLER at least thirty (30) days prior
written notice, without any price adjustment of the VESSEL for such prepayment. •

 

6.                                       SECURITY FOR PAYMENT OF INSTALMENTS
BEFORE DELIVERY

 

The BUYER
shall, upon effectiveness of this Contract, deliver to the SELLER a Performance
Guarantee in the form annexed hereto as Exhibit “A” in favour of the SELI ;ER
issued by AEGEAN BUNKERING SERVICES INC. (hereinafter called
the “Guarantor”). This guarantee shall secure all the Buyer’s obligations under
the Contract.

 

7.                                       REFUNDS

 

All payments
made by the BUYER prior to delivery of the VESSEL shall be in the nature of advance to the SELLER, and in the
event that in accordance with the specific terms of this Contract, the VESSEL
is rejected by the BUYER after the sea trial or this Contract is rescinded or
cancelled by the BUYER in accordance with the specific terms of this Contract
permitting such rescission or cancellation, the SELLER shall refund to the
BUYER in United States Dollars the full amount of all sums already paid by the
BUYER to the SELLER under this Contract, together with interest thereon (at the
applicable rate specified in this Contract) from the respective dates such sums
were received by the SELLER to the date of remittance by telegraphic transfer
of such refund to the BUYER.

 

As security to
the BUYER, the SELLER shall deliver to the BUYER, on or before receipt by the
SELLER of each instalment of the Contract Price, an original Refund Guarantee
securing the repayment of the relevant instalment of ‘the Contract Price to be
issued by China Construction Bank. Fujian branch, or China Communications Bank
the People’s Republic of China, or other Bank acceptable to the BUYER and BUYER’s
bank in respect of the relevant instalment of the Contract Price in the form
annexed hereto as Exhibit “B.”

 

ARTICLE 3 - ADJUSTIVIENT.OF THE CONTRACT PRICE

 

The Contract
Price of the VESSEL shall be subject to adjustments as hereinafter set forth.
It is hereby understood by both parties that any reduction of the Contract
Price is by way of liquidated damages and not by way of penalty.

 

1.                                       DELIVERY

 

(a)                                  No
adjustment shall be made and the Contract Price shall remain unchanged for the
first thirty (30) days of delay in delivery
of the VESSEL beyond the Delivery Date (as defined in Article 7 hereof and all references hereafter in this
Contract to the “Delivery Date”
shall be construed as references to that term as defined in Article 7 hereof) ending as of twelve o’clock
midnight of the thirtieth (30th)
day of delay.

 

(b)                                 If
the delivery of the VESSEL is delayed more than thirty (30) days after the Delivery Date, then, in such event:

 

9

 

	
  (i)

  	
  beginning at twelve o’clock midnight of the
  thirty-first (31st) to twelve o’clock midnight of the sixtieth
  (60th) day after the Delivery Date, the Contract Price of the VESSEL shall be
  reduced by deducting therefrom the sum of United States Dollars one thousand
  only (USD 1000.00) per day;

  
	
   

  	
   

  
	
  (ii)

  	
  beginning at
  twelve o’clock midnight of the sixty-first (61st to twelve o’clock
  midnight of the one hundred and one hundred-twenty (120th) day
  after the Delivery Date , the Contract Price of the VESSEL shall be reduced
  by deducting therefrom the sum of United States Dollars one thousand three
  hundred only (USD1300.00) per day.

  
	
   

  	
   

  
	
  (iii)

  	
  beginning at
  twelve o’clock midnight of the one hundred -twenty-first (121st)to
  twelve o’clock midnight of the one hundred and one hundred-eighty (I80th)
  day after the Delivery Date , the Contract Price of the VESSEL shall be
  reduced by deducting therefrom the sum of United States Dollars one thousand
  seven hundred fifty only (USDI,750b0) per day.

  

 

Unless the
parties hereto agree otherwise, the total reduction in the Contract Price shall
be deducted from the fifth installment of the Contract Price and in any event
(including the event
that the BUYER consents to take delivery of the VESSEL after the
expiration of the one hundred and eighty (180) day period of delay as described
in Paragraph 1(e) of this Article) the total reduction in the Contract Price
shall not he more than would be the case for a delay of one hundred and fifty
(150) days counting from midnight of the thirty-first (31st) day
after the Delivery Date at the above specified rates of reduction that is
United States Dollars Two Hundred and Thirteen Thousand only (USD 213,000.00).

 

(c)                                  the
delay in the delivery of the VESSEL exceeds a period of one hundred and eighty
(180) days after the Delivery Date, as defined in Article 7, then in such
event, and after such 180 days period has expired, the BUYER may, at any time
thereafter at its option, rescind or cancel this Contract in accordance with
the provisions of Article 10 of this Contract. The SELLER may at any time after
the expiration of the aforementioned one hundred and eighty (180) day period,
if the BUYER has not served notice of cancellation or rescission pursuant to
Article 10, demand in writing that the BUYER make an election (and in such
notice the SELLER shall specify a future delivery date for the VESSEL), in
which case the BUYER shall, within thirty (30) days after such demand is
received by the BUYER, either notify the SELLER of its decision to cancel this
Contract. or consent to take delivery of the VESSEL at an agreed future date,
it being understood and agreed by the parties hereto that, if the VESSEL is not
delivered by such future date, the BUYER shall have the same right of
rescission and cancellation upon the same terms, as hereinabove provided.

 

(d)                                 The
Contract Price shall not be adjusted or reduced if the delivery of the VESSEL

is delayed by reason of permissible delays as defined in Article 8 hereof

 

(e)                                  If
the SELLER notifies the BUYER by telefax That the delivery of the VESSEL, shall
be made earlier than the ‘Delivery Date and such notification is given not less
than one (1) month prior to the newly planned delivery date. a certain amount
of bonus shall be given by the BUYER to the SELLER.

 

Subject to the
above and in the event that the delivery shall be made within thirty (30) days
earlier than the Delivery Date, the Contract Price shall remain unchanged. In
the event that the delivery shall be made more than thirty (30) days earlier
than the specified Delivery Date, then a bonus shall be added to the Contract
Price at a rate of United States Dollars One Thousand Only (USD 1000.00) per
day for each full day earlier than the thirtieth (30th) day to sixtieth (60th)
day prior to the Delivery Date. And if the delivery will be made between sixty
(60) days and One Hundred and Twenty (120) days prior to

 

10

 

the Delivery
Date, a bonus shall be added to the Contract Price at a rate of United States
Dollars One Thousand Three hundred Only (USD1,300.00) per day for each full day.
And if the delivery will be made between One Hundred Twenty (120) days and One
Hundred Eighty (180) days earlier than the Delivery Date, a bonus shall be
added to the Contract price at a rate of United States Dollars One Thousand
Seven hundred fifty only (USD 1,750.00) per day for each full day.

 

The total increase of the
Contract Price for the earlier delivery shall be added to the fifth installment
of the Contract Price, but shall not he more in any case than an amount of
United States Dollars Two Hundred Thirteen Thousand only (USD213,000.00 ).

 

(f)                                    In
the event that the SELLER is  unable to deliver the Vessel on
the newly planned delivery date as declared, the VESSEL can, nevertheless, be
delivered by the SELLER at a date after such declared newly planned date.

 

In such circumstances, and
for the purpose of downsizing the liquidated damages to the BUYER (according to
the provisions of Paragraph 1 (b) of this Article) and the BUYER’s right to
cancel or rescind this Contract (according to the provisions of Paragraph I (c)
of this Article), the newly planned delivery date declared by the SELLER shall
not be in any way he treated or be taken as having
substituted the original Delivery Date as defined in Article 7. The BUYER’s aforesaid right for
liquidated damages and to cancel or rescind this Contract shall be accrued,
operated or exercised only to the extent as described in Paragraph 1 (a), 1 (b)
and/or 1 (c) of Article 3. In whatever circumstances, the Delivery Date as
defined in Article 7 (not .the newly planned delivery date as
declared by the SELLER) shall be used to regulate, as so
described in Paragraph 1 (a), 1 (b) and/or 1 (c) of Article 3, the BUYER’s
right for liquidated damages and to rescind this Contract and the SELLER’S
liability to pay the aforesaid liquidated damages resulting from the delay in
delivery of the -VESSEL

 

2.                                       INSUFFICIENT
SPEED

 

(a)                                  The
Contract Price of the VESSEL
shall not be affected nor changed by reason of the actual speed (as described
in detail in the Specifications
and as determined by the Trial Run according to the Specifications) being equal
to or less than three-tenths (3/10) of one knot below the guaranteed speed as
specified in Paragraph 4 of Article I of this Contract.

 

(b)                                 However,
commencing with and including a deficiency of more than three-tenths (3/10) of
one knot in actual speed (as determined by the Trial Run according to the
Specifications) below the guaranteed speed as specified in Paragraph 4 of
Article 1 of this Contract, the Contract Price shall be reduced as follows:

 

In case of deficiency

Above 0.30 but below or
at 0.40 knot               USD   5,000 (Total)

Above 0.40 but below or at
0.50 knot               USD 10,000 (Total)

Above 0.50 but below or at 0.60 knot               USD
15,000 (Total)

Above 0.60 but
below or at 0.70 knot               USD 20,000 (Total)

Above 0.70 but
below or at 0.80 knot               USD 25,000 (Total)

Above 0.80 but
below or at 0.90 knot               USD 40,000 (Total)

 

(c)                                  If
the deficiency in actual speed (as determined by the Trial Run after correction
according to the Specifications) of the VESSEL upon the Trial Run, is more than
nine tenths (9/10) of one knot below the guaranteed speed of 12.5 knots, then
the BUYER may at its option reject the VESSEL and rescind this Contract in accordance
with provisions of Article 10 of this Contract, or may accept the VESSEL at a
reduction in  the Contract Price as above
provided for nine tenths (9/10) of one knot, that is United States Dollars
forty thousand only (USD 40,000) being the maximum.

 

11

 

3.                                       DEADWEIGHT

 

(a)                                  In
the event that there is a deficiency in the actual deadweight of the VESSEL
determined as provided in the Specifications, the Contract Price shall he
decreased by the sum of United States Dollars One Thousand only (USD 1000) for
each metric ton in case of deficiency of the guaranteed deadweight of 3800
metric tons at assigned design summer draught 5.50m and up to a maximum
deficiency of three hundred (300) metric tons..

 

(b)                                 In
the event that there should be a deficiency in the VESSEL’s actual deadweight
Which exceeds three hundred (300) metric tons below the guaranteed deadweight,
the BUYER may, at its option, reject the VESSEL and rescind this Contract in
accordance with the provisions of Article 10 of this Contract, or may accept
the VESSEL with reduction in the Contract Price in the maximum amount of United
States Dollars Three Hundred thousand only (USD 300,000.00).

 

(c)                                  In
the event that the actual deadweight of the VESSEL exceeds 3800 metric tons,
then a bonus shall be added to the Contract Price at a rate of United States
Dollars five hundred (500) per each metric ton in excess of 3800 metric tons
but in any ease up to a maximum amount of United States Dollars Seventy Five
Thousand (USD 75,000.00)

 

The total
reduction or increase, as the case may be, in the Contract Price as the result
of the operation of the provisions of this paragraph 4 of Article 3 shall be
applied in reducing or increasing the fifth installment of the Contract Price.

 

4.                                       EFFECT
OF RESCISSION

 

It is
expressly understood and agreed by the parties hereto that in any case as
stated herein, if the BUYER rescinds this Contract pursuant to any provision
under this Article, the BUYER, save its rights and remedy set out in Article 10
hereof, shall not be entitled to any liquidated damage but shall be entitled to
a refund of payments made prior to delivery and interest thereon.

 

ARTICLE 4 - APPROVAL OF PLANS AND DRAWINGS - SUPERVISION
AND INSPECTION

 

1.                                       APPOINTMENT
O THE BUYER’S SUPERVISOR

 

The BUYER
shall send in good time to and maintain at the SELLER’s Shipyard, at the BUYER’s
own cost and expense, one or more representative(s) who shall be duly
accredited in writing by the BUYER (such representative(s) being hereinafter
collectively and individually called the “Supervisor”) to attend, inspect
supervise and survey the construction of the VESSEL, her engines and
accessories.

 

The SELLER
Shall make all necessary arrangements to assist BUYER’s Supervisor to obtain
all necessary visas, permits, license, work permits etc. so as to enable
him/them to attend the Construction of the VESSEL in good time.

 

The SELLER
hereby undertakes to assist in order to get the necessary visa for the
Supervisor to enter China will be issued upon demand and without delay provided that the Supervisor meets with the rules,
regulations and laws of the People’s Republic of China. The BUYER undertakes to
give the SELLER adequate notice for the application of visa.

 

2.                                       APPROVAL
OF PLANS AND DRAWINGS

 

The parties
hereto shall, within thirty (30) days after signing of this Contract, mutually
agree a Hat of all the plans and drawings, which are to be sent to the BUYER
for approval (hereinbelow called “the LIST”). Before arrival of the Supervisor
at the SELLER’S Shipyard, the plans and drawings

 

12

 

specified in
the LIST shall be sent to the BUYER, and the BUYER shall, within ten (10) days
after receipt thereof (excluding mailing time), return such plans and drawings
submitted by the SELLER. with approval or remarks, if any. Such approvals and
remarks shall he in accordance with the Contract and Specifications.

 

Concurrently
with the arrival of the Supervisor at the SELLER’s Shipyard, the BUYER shall
notify the SELLER in writing, stating the authority which the said Supervisor
shall have and stating whether the Supervisor can, on behalf of the BUYER,
approve or disapprove, as the case may be, those plans and drawings specified
in the LIST which have not yet been sent to the BUYER. Should the Supervisor be
so authorised by the BUYER, the Supervisor shall, within five (5) days after
receipt thereof, return those plans ands drawings its approval or remarks, if
any.

 

Unless
notification is given to the SELLER by the Supervisor or the BUYER of approval
or disapproval of any plans and drawings within the above-designated period of
time for each case, the said plans and drawings shall be deemed to have been
automatically approved,

 

The plans and
drawings approved by the BUYER or the Supervisor shall be final, and any
alteration thereof shalt be regarded as modification specified in Article 5 of
this Contract.

 

3.                                       SUPERVISION
AND INSPECTION BY THE SUPERVISOR

 

The Supervisor
shall have, at all times until delivery of the VESSEL, the right to attend
tests according to the mutually agreed test list and inspect the VESSEL, her
engines, accessories and materials at the SELLER’s Shipyard, the premises of
its subcontractors or any other place where work is done or materials stored in
connection with the VESSEL, In the event that the Supervisor discovers any
construction or material or workmanship which does not or will not conform to
the requirements of this Contract and the Specifications, the Supervisor shall
promptly give the SELLER a notice in writing as to such nonconformity, upon
receipt of which the SELLER shall correct such nonconformity if the SELLER
agrees with the BUYER. However the BUYER undertakes and assures the SELLER that
the Supervisor shall carry out his inspections in accordance with the agreed
inspection procedure and schedule and usual shipbuilding practice and in a way
as to minimize any increase in building costs and delays in the construction or the VESSEL.

 

The SELLER
agrees to furnish free of charge the Supervisor with office space, and other
reasonable facilities according to SELLER’s practice at, or in the immediate
vicinity of the SELLER’s Shipyard as may he necessary to enable the Supervisor
to effectively carry out his duties. All international communication charges
(such as telephone and telefax charges) shall be borne by the BUYER. At all
times, during the construction of the VESSEL until delivery thereof, the
Supervisor shall be given free and ready access to the VESSEL, her engines and
accessories, and to any other place where the work is being done, or the
materials are being processed or stored, in connection with the construction of
the VESSEL, including the yards, workshops, stores of the SELLER, and the
premises of subcontractors of the SELLER, who are doing work, or storing
materials in connection with the VESSEL’S construction. The travel expenses for
the said access to SELLER’s subcontractors-outside of Fuzhou city
shall be at BUYER’s account. The transportation within Fuzhou city shall be
provided to the Supervisor by the SELLER.

 

4.                                       LIABILITY
OF THE SELLER

 

The Supervisor
engaged by the BUYER under this Contract shall at all times be deemed to be in
the employment of the BUYER, The SELLER shall be no liability whatsoever to the
BUYER, or to the Supervisor or the BUYER’s employees or agents for personal injuries,
including death, during the time when they, or any of them, are on the VESSEL,
or within the premises of either the SELLER or its subcontractors, or are
otherwise engaged in and about the construction of the VESSEL, unless, however,
such personal injuries, including death, were caused by the

 

13

 

negligence or
willful misconduct of the SELLER, or of any of the SELLER’s -employees or
agents or subcontractors of the SELLER. Nor shall the SELLER have any liability
whatsoever to the BUYER for damage to, or loss or destruction of property in
China of the BUYER or of the Supervisor, or of the BUYER’s employees or agents,
unless such damage, loss or destruction is caused by the negligence or willful
misconduct of the SELLER, or of any of the employees, or agents or
subcontractors of the SELLER.

 

5.                                       SALARIES
AND EXPENSES

 

All salaries
and expenses of the Supervisor, or any other employees employed by the BUYER
under this Article, shall he for the BUYER’s account.

 

6.                                       REPLACEMENT
OF SUPERVISOR

 

The SELLER has
the right to request the BUYER in writing to replace any of the Supervisors who
is proved to be unsuitable and unsatisfactory for the proper progress of the
VESSEL’s construction together with reasons, The BUYER shall investigate the
situation by sending its representative to the SELLER’s yard, if necessary, and
if the BUYER considers that such SELLER’S request is justified, the BUYER shall effect the replacement
as soon as conveniently arrangeable.

 

7.                                       The
supervisors or employees will be informed by the BUYER to follow the Laws of
P.R. of China when they work in China.

 

ARTICLE 5 - MODIFICATION, CHANGES AND EXTRAS

 

1.                                       HOW
EFFECTED

 

The
Specifications and Plans in accordance with which the VESSEL shall be
constructed, may be modified and/or changed at any time hereafter by written
agreement of the parties hereto, provided that such modifications and/or
changes or an accumulation thereof will not, :in the SELLER’s reasonable
judgement, adversely affect the SELLER’s other commitments and provided further
that the BUYER shall consent, if necessary, to affair and reasonable adjustment
of the Contract Price, time of delivery of the VESSEL., and other terms of this
Contract, and/or the Specifications occasioned by such modification and/or
changes, it any. as hereinafter provided. Subject to the above, the SELLER
hereby agrees to exert ifs’ best efforts to accommodate such reasonable
requests by the BUYER so that the said changes and/or modifications may be made
at a reasonable cost and within the shortest practicable time. Any such
agreement for modifications and/or changes shall include an agreement as to the
increase. or decrease, if any, in the Contract Price of the VESSEL together
with an agreement as to any extension or reduction hi the date of delivery, the
provision to the SELLER of any additional securities necessary to the SELLER,
or any other alterations in this Contract, or the Specifications occasioned by
such - modifications and/or changes. The aforementioned agreement to modify
anchor to change the Specifications may be effected by an exchange of letter,
or telefaxes signed in each case by an authorised representative of the
relevant party, manifesting such agreement. The letters as well as telefaxes
exchanged by the parties hereto pursuant to the foregoing shall constitute an
amendment to the Specifications under which the VESSEL shall be built, and such
letters and telefaxes shall be deemed to be incorporated into this Contract and
the Specifications by reference and made a part hereof. Upon consummation of
the agreement to modify and/or to change the Specifications, the SELLER shall
without delay alter the construction of the VESSEL in accordance therewith,
including any additions to, or deductions from, the work to he performed in
connection with such construction. If due to whatever reasons, the parties
hereto shall fail to agree on the adjustment of the Contract Price or extension
of time of delivery or the provision of additional security to the SELLER or
modification of any terms of this Contract which are necessitated by such
modifications and/or changes, then

 

14

 

the SELLER
shall have no obligation to comply with the BUYER’s request for any
modification and/or changes.

 

2.                                       CHANGES
IN RULES OF CLASSIFICATION SOCIETY REGULATIONS ETC.

 

(1)                                  If,
after the date of signing this Contract, any requirements as to classification
or as to the rules and regulations as specified in this Contract and the
Specifications to which the construction of the VESSEL is required to conform,
are altered or changed by the Classification Society or any regulatory bodies
authorized to make such alterations or changes, the SELLER and/or the BUYER,
upon receipt of information thereof, shalt transmit such information in full to
each other in writing, whereupon within twenty-one (21) days after receipt of
the said notice by the BUYER from the SELLER or vice versa, the BUYER shall instruct
the SELLER in writing as to the alterations or changes, if any, to be made in
the VESSEL which the BUYER, in its sole discretion, shall decide. The SELLER
shall promptly comply with such alterations or changes, if any in the
construction of the VESSEL provided that the BUYER shall first agree:

 

(a)                                  As
to any fair increase or decrease in the Contract Price of the VESSEL that is
fairly and reasonably occasioned by the cost for such compliance; and/or

 

(b)                                 As
to any extension in the time of delivery of the VESSEL that is necessary due to
such compliance; and/or

 

(c)                                  As
to any increase or decrease in the guaranteed deadweight and/or speed of the
VESSEL, if such compliance results in increased or reduced deadweight and/or
speed; and/or

 

(d)                                 As
to any other alterations in the terms of this Contract or of the Specifications
or both, if such compliance makes such alterations of the terms necessary; .and/or

 

(e)                                  If
the Contract Price is to be increased, then, in addition or as an alternative
to any of the provisions above, as to the provision of additional security by
the BUYER to the SELLER if deemed necessary by the SELLER.

 

Agreement as
to such alterations or changes under this Paragraph shall he made in the same
manner as provided in Paragraph I of this Article for modifications and/or
changes of the Specifications and/or Plans.

 

(2)                                  If
due to whatever reasons, the parties shall fail to agree on the adjustment of
the Contract Price or extension of the time for delivery or increase or
decrease of the guaranteed speed and deadweight or the provision of additional
security to the SELLER or any alteration of the terms of this Contract, if any,
then the SELLER shall be entitled to proceed with the construction of the
VESSEL in accordance with, and the BUYER shall continue to be bound by, the
terms of this Contract and the Specifications without making any such
alterations or changes provided the survey of the Class and the issuance of the
Certificates by the Class and relevant authorities will not be affected.

 

3.                                       SUBSTITUTION
OF MATERIALS AND/DR EQUIPMENT

 

In the event
that any of the materials and/or equipment required by the Specifications or
otherwise under this Contract for the construction of the VESSEL cannot be
procured in time to maintain the Delivery Date of the VESSEL, the SELLER may,
provided that the BUYER shall so agree first in writing, supply other materials
and/or equipment of the same standard and quality in accordance with the
requirements of the Classification Society and of the rules, regulations and

 

15

 

with which the
construction of the VESSEL must comply in accordance with the terms of this
Contract and the Specifications.

 

4.                                       BUYER’S
SUPPLIED ITEMS

 

The BUYER
shall deliver to the SELLER at its shipyard the items as specified in the
Specifications which the BUYER shall supply on its account by the time mutually
agreed by the SELLER and the BUYER.

 

Should the
BUYER fail to deliver to the SELLER such items within the time, agreed, the
delivery of the VESSEL shall automatically be extended for a period of such
delay, provided always that such delay in delivery of the BUYER’s supplied
items shall actually have affected the delivery of the VESSEL. In such event,
the BUYER shall pay to the SELLER all losses and damages sustained by the SELLER due to such delay in the
delivery of the BUYER’S supplied items and such payment shall be made upon
delivery of the VESSEL, but only provided that the construction program is
actually affected.

 

Furthermore,
if the delay in delivery of the BUYER’s supplied items should exceed twenty
(20) days, the SELLER shall be entitled to proceed with the construction of the
VESSEL without installation of such items in or onto the VESSEL, without
prejudice to the SELLER’S right hereinabove provided, and the BUYER shall
accept the VESSEL, so completed.

 

The SELLER
shall be responsible for safely storing and handling of the BUYER’s supplies as
specified in the Specifications after delivery to the SELLER and shall install
and secure them on board the VESSEL at the SELLER’S expenses. The extra cost
for material installation or testing for Buyer’s supplied items, if any, will
be borne by the Buyer.

 

Upon arrival
of such shipment of the Buyer’s supplied items, both parties shall undertake a
joint unpacking inspection. if any damages are found to be not suitable for
installation, the SELLER shall be entitled to refuse to accept the BUYER’s
supplied items.

 

ARTICLE 6 - TRIALS

 

1.                                       NOTICE

 

The Sea Trials
will start when the VESSEL is completed according to the relevant provisions of
the Specifications.

 

The BUYER and
the Supervisor shall receive from the SELLER at least-thirty (30) days notice
in advance and five (5) days definite notice in advance in writing or by
telefax, of the time and place of the VESSEL’s sea trial as described in the
Specifications (hereinafter referred to as “the Trial Run”) and the BUYER and
the Supervisor shall promptly acknowledge receipt of such notice. The BUYER’s
representatives and/or the Supervisor shall be on board the VESSEL to witness
such Trial Run, and to check upon the performance of the VESSEL during the same.
The BUYER’s officers and crew may also attend onboard the VESSEL to witness the
Sea Trials. Failure of the BUYER’s representatives to be present at the Trial
Run of the VESSEL, after due notice to the BUYER and the Supervisor as provided
above, shall have the effect to extend the date for delivery of the VESSEL by
the period of delay caused by such failure to be present. However, if the Trial
Run is delayed more than seven (7) days by reason of the failure of the BUYER’s
representatives to be present after receipt. of due notice as provided above,
then in such event, the BUYER shall be deemed to have waived its right to have
its representatives on board the VESSEL during the Trial Run, and the SELLER
may conduct such Trial Run without the BUYER’s representatives being present
but with the Classification Society Surveyor(s) always in attendance, and in
such case the BUYER shall be obliged to accept. the VESSEL on the basis of a
certificate jointly signed by the SELLER and the Classification Society
certifying that the

 

16

 

VESSEL, after
Trial Run, subject to completion of minor alterations and corrections as provided
in this Article, if any, is found to conform to the Contract and Specifications
and is satisfactory in all respects.

 

The SELLER
hereby undertakes to assist the buyer to get the necessary visas and permits
for the BUYER’s representatives to enter China will be issued in order to
enable them attend the Trial Run, on demand and without delay.

 

In the event
of unfavourable weather on the date specified for the Trial Run, the same shall
take place on the first available day thereafter that the weather conditions
permit. The parties hereto recognize that the weather conditions in Chinese
waters in which the Trial Run is to take place are such that great changes in
weather may arise momentarily and without warning and, therefore, it is agreed
that if during the Trial Run of the VESSEL the weather should suddenly become
unfavourable, as would have precluded the continuance of the Trial Run, the
Trial Run of the VESSEL shall be discontinued and postponed until the first
favourable day next following, unless the BUYER shall assent in writing, or by
telefax of its acceptance of the VESSEL on the basis of the Trial Run made
prior to such sudden change in weather conditions.

 

In the event
that the Trial Run is postponed because of unfavourable weather conditions,
such delay shall be regarded as a permissible delay, as specified in Article 8
hereof.

 

2.                                       HOW
CONDUCTED

 

(a)                                  All
expenses in connection with Trial Run of the VESSEL or any re-Trial or
re-Trials are to be for the account of the SELLER, who, during the Trial Run
and when subjecting the VESSEL to Trial Run, is to provide, at its own expense,
the necessary crew to comply with conditions of safe navigation. The Trial Run
shall be conducted in the manner prescribed in the Specifications and shall
prove fulfilment of the performance required for the Trial Run as set forth in
the Specifications.

 

The course of
Trial Run shall be determined by the SELLER and shall be conducted within the
trial water equipped with speed measuring facilities.

 

(b)                                 The
SELLER shall provide the VESSEL with the required quantities of water and fuel oil , lubrication oil, hydraulic oil,
greases and other stores necessary for the conduct of the Trial Run or Trial
Runs which shall be supplied by the SELLER, as prescribed in the Specifications. The
fuel oil, lubricating oil, hydraulic oil and greases shall be in accordance
with the applicable engine specifications. And the cost of the quantities of
water, fuel oil, lubricating oil, hydraulic oil and greases consumed during the
Trial Run or Trial Runs shall be for the account of the SELLER.

 

3.                                       TRIAL
LOAD DRAFT

 

In addition to
the supplies provided by the SELLER in accordance with sub-paragraph (b) of the
preceding Paragraph 2 hereof, the SELLER shall provide the VESSEL with the
required quantity of fresh water and other stores necessary for the conduct of
the Trial Run. The necessary ballast (fresh water, sea water or any other
ballast as may be required) to bring the VESSEL to the trial load draft as
specified in the Specifications shall be for the SELLER’S account.

 

4.                                       METHOD
OF ACCEPTANCE OR REJECTION OF TRIAL RUN RESULT

 

(a)                                  Upon
notification of the SELLER of the completion of the Trial Run of the VESSEL,
the BUYER or the BUYER’s Supervisor shall within ten (10) days thereafter,
notify the SELLER in writing or by telefax of its acceptance of the VESSEL
TRIAL RUN RESULT or of its rejection of the VESSEL TRIAL RUN RESULT together
with the reasons therefor.

 

17

 

(b)                                 However,
should the result of the Trial Run indicate that the VESSEL or any part thereof
including its equipment does not conform to the requirements of this Contract
and/or the Specifications, then the SELLER and the BUYER shall investigate with
the BUYER’s Supervisor the cause of failure and the proper steps shall be taken
to remedy the same and shall make whatever corrections and alterations and/or
re-Trial Run or Runs as may be necessary without extra cost to the BUYER, and
upon notification by the SELLER of completion of such alterations or
corrections and/or re-trial or re-trials, the BUYER shall, within ten (10) days
thereafter, notify the SELLER in writing or by telefax of its acceptance or
rejection of the TRIAL RUN RESULT together with the reason therefor on the
basis of the alterations and corrections and/or re-trial or re-trials by the
SELLER.

 

(c)                                  In
the event that the BUYER fails to notify the SELLER in writing or by telefax of
its acceptance or rejection of the VESSEL TRIAL RUN RESULT together with the
reason therefor within the ten (10) thy period provided for in sub-paragraphs
(a) and (b) above, the BUYER shall be deemed to have accepted the VESSEL TRIAL
RUN RESULT.

 

(d)                                 Any
dispute arising among the parties hereto as to the result of any Trial Run or
further tests or trials, as the case may be, of the VESSEL shall he solved by
reference to Arbitration as provided in Article 13, of this Contract.

 

(e)                                  Nothing
herein shall preclude the BUYER from accepting the VESSEL with its
qualifications and/or remarks following the Trial Run and/or further tests or
trials as aforesaid and the SELLER shall be obliged to comply with and/or
remove such qualifications and/or remarks at the time before- effecting
delivery of the VESSEL to the BUYER under this Contract. However, in case there
is any minor qualification and/or remark which does not affect the VESSEL’s
performance and/or VESSEL’S class rules and regulations and/or VESSEL’s Class
or statutory Certificates the delivery of the VESSEL to the BUYER shall not be
affected, provided that the SELLER shall expressly undertake in writing to
comply with and/or remove such minor qualifications and/or remarks the soonest
practically possible within the Guarantee period of the VESSEL which extends to
one (1) year from the date f delivery of the VESSEL, to the BUYER.

 

5.                                       DISPOSITION
OF SURPLUS CONSUMARI,E STORES

 

Should any
amount of .fuel oil, fresh water, or other untouched consumable
stores furnished by the SELLER for the Thai Run or Trial Runs remain on board
the VESSEL at the time of acceptance thereof by the BUYER, the BUYER agrees to
buy the same from the SELLER at the purchasing price at the port or delivery thereof, and payment by
the BUYER shall be effected as provided in  paragraphs
3 (c) and 4 (e) of Article 2 of this Contract.

 

6.                                       EFFECT
OF ACCEPTANCE

 

The BUYER’s
acceptance of the VESSEL in writing or by telefax notification sent to the
SELLER, in accordance with the provisions set out above, shall be final and
binding so far as conformity of the VESSEL to this Contract and the Specifications
is concerned, and shall preclude the BUYER from refusing formal delivery by the
SELLER of the VESSEL, as hereinafter provided, if the SELLER complies with all
other procedures and requirements for delivery as hereinafter set forth.

 

ARTICLE 7 - DELIVERY

 

1.                                       TIME
AND PI ACE

 

The VESSEL
shall be delivered safely afloat by the SELLER to the BUYER at the .SELLER’s
Shipyard, in accordance with the Specifications, and with all Classification
and Statutory Certificates which are required to be provided by the SELLER in
accordance with the relevant

 

18

 

provisions of
the Specifications and all other applicable terms and conditions of this
Contract and after completion of Trial Run (or, as the case may be, re-Trial or
re-Trials) and acceptance by the BUYER in accordance with the provisions of
Article 6 hereof on or before August 31.2009, provided that in the event of
delays in the construction of the VESSEL due to causes which, under the terms
of the Contract, permit the postponement of the date of delivery, the
aforementioned time for delivery of the VESSEL shall be extended accordingly.

 

The
aforementioned date or such later date to which delivery is extended or agreed
to be extended pursuant to the terms of this Contract is hereinafter called the
“Delivery Date”.

 

2.                                       WHEN
AND HOW EFFECTED

 

After the
VESSEL is accepted following the sea trials and once the VESSEL is ready for
delivery, the SELLER shall  give
the BUYER three (3) business days definite notice of the anticipated delivery
date by letter, telefax or telex to the BUYER.

 

Provided that
the BUYER and the SELLER shall each have fulfilled all of their respective
obligations as stipulated in this Contract, and the VESSEL is ready for
delivery, the delivery of the VESSEL shall be effected forthwith by the
concurrent delivery by each of the parties hereto, one to the other, of the
Protocol of Delivery and Acceptance, duly signed by the parties, acknowledging
delivery of the VESSEL by the SELLER and acceptance thereof by the BUYER.

 

3.                                       DOCUMENTS
TO BE DELIVERED TO THE BUYER

 

Concurrently
with the delivery and acceptance of the VESSEL by the BUYER. the SELLER shall
deliver to the BUYER the following duly authenticated documents, which shall
accompany the Protocol of Delivery and Acceptance (which shall he prepared in
three originals and executed by each of the parties hereto):

 

(a)                                  PROTOCOL
OF TRIALS of the VESSEL made by the SELLER pursuant to the Specifications,

 

(b)                                 PROTOCOL
OF INVENTORY of the equipment of the VESSEL including spare parts and the like,
all as specified in the Specifications, made by the SELLER,

 

(c)                                  PROTOCOL
OF STORES OF CONSUMABLE NATURE
made by the SELLER referred to under Paragraph 5 of Article 6 hereof.

 

(d)                                 FINISHED
DRAWINGS AND PLANS pertaining to the VESSEL as stipulated in the
Specifications, made by the SELLER.

 

(e)                                  PROTOCOL
OF LIGHTSHIP AND INCLINING EXPERIMENT, as per the Specification made by the
SELLER.

 

(f)                                    ALL
CLASSIFICATION AND OTHER CERTIFICATES required to be furnished upon delivery of
the VESSEL pursuant to this Contract and the Specifications.

 

It is agreed that if through no fault on the
part of the SELLER the full terms Classification certificate and/or any other
certificates referred to in this subparagraph (f) cannot be issued at. the time
of delivery of the VESSEL, then provisional certificates as issued by the
Classification Society or any third party shall be accepted by the BUYER,
provided that the SELLER shall furnish the BUYER with the full tom formal
certificates as promptly as possible (but in any event before the expiry of the
provisional certificates).

 

19

 

(g)                                 the
BUILDER’S CERTIFICATE issued by the SELLER in three (3) originals, each duly
notarised by the local authority.

 

(h)                                 DECLARATION
OF WARRANTY issued by the SELLER that the VESSEL is delivered to the BUYER free
and clear of any liens, charges, claims, mortgages, or other encumbrances
whatsoever upon the BUYER’s title thereto, and in particular, that the VESSEL
is absolutely free of all burdens in the nature of imposts, taxes levies, dues
or charges imposed by the relevant authorities of the province or country of
the port of delivery, as well as of all liabilities of the SELLER to its
sub-contractors, employees and crews and/or of all liabilities arising from the
operation of the VESSEL in Trial Run or Trial Runs, or otherwise, prior to
delivery and any other liabilities, debits or obligations whatsoever ensuing
from and cause or reason whatsoever.

 

(i)                                     COMMERCIAL
INVOICE made by the SELLER.

 

(j)                                     BILL
OF SALE made by the SELLER in 3 originals. each duly notarised by the local
authority.

 

4.                                       TITLE AND RISK

 

Title to and
risk of the VESSEL shall pass to the BUYER only upon the delivery and
acceptance thereof having been completed as stated above; it being expressly
understood that, until such delivery is effected, title to the VESSEL, and her
equipment, shall remain with the SELLER and be at the entire risk of the
SELLER.

 

5.                                       REMOVAL
OF VESSEL

 

The BUYER
shall take possession of the VESSEL immediately upon delivery and acceptance
thereof by the BUYER and shall remove the VESSEL from the premises of the
SELLER within seven (7) days after delivery and acceptance thereof is effected,
Following delivery of the VESSEL, the SELLER shall not charge the BUYER for the
costs of mooring the VESSEL at the SELLER’s premises within these seven (7)
days. If the BUYER shall not remove the VESSEL from the premises of the SELLER
within the aforesaid seven (7) days, in such event, after the lapse of this
seven (7) days period for reasons other than Chinese Authorities’ restrictions
or reasons entirely beyond the control of the BVYIER the BUYER shall pay to the
SELLER United States Dollars Two Thousand only (USD2000) per day as reasonable
mooring charge of the VESSEL.

 

In case of
early delivery the BUYER shall have the option to keep the VESSEL at least two
(2) weeks at the SELLER’S premises. If the BUYER shall not remove the VESSEL
from the premises of the SELLER within the aforesaid two (2) weeks, in such
event, the BUYER shall pay to the SELLER thereafter United States Dollars Two
Thousand only (USD2000) per day as reasonable mooring charge of the VESSEL.

 

6.                                       TENDER
OF THE VESSEL

 

If the BUYER fails to
take delivery of the VESSEL within one (1) month after completion thereof
according to this Contract and the Specifications without justified reason, the
SELLER shall have the right to tender the VESSEL for delivery after compliance
with all procedural requirement as above provided.

 

20

 

ARTICLE 8 - DELAYS & EXTENSION OF E FOR DELIVERY

 

1.                                       CAUSE
OF DELAY

 

If, at any
time before the agreed delivery date, either the construction of the VESSEL, or
any performance required hereunder as a prerequisite of delivery of the VESSEL
is actually prevented or delayed due to any of the following
supervening events beyond the SELLER’s reasonable foresight and control,
namely, war, blockade, revolution, political upheavals insurrection,
mobilization, civil continuums, riots, strikes, sabotage, lockouts, Acts of God
or the public enemy, plague or other epidemics, guaranties, prolonged failure
of electric current from an outside source, freight embargoes, if any,
extremely hot temperature (above 39 degrees C in accordance with official data
of the national meteorological institute). earthquakes, tidal waves typhoons,
hurricanes, storms or other similar causes beyond the reasonable control of the
SELLER, or of its subcontractors, as the case may be, which were not existing
and known to the SELLER and could not reasonably have been foreseen or
prevented by the SELLER at the date of signing of this Contract, or by
destruction of the premises of the SELLER or its subcontractors, or of the
VESSEL or any part thereof, by fire or flood which could not have been
prevented by the SELLER, or due to the Bankruptcy of the equipment suppliers
and/or material suppliers., the SELLER having exercised due diligence in
selecting the Suppliers and having done their utmost to arrange a substitute,
or due to the delay caused by Acts of God in  supply
of parts essential to the construction of the VESSEL, then, in the event of
delay actually due to the happening of any of the aforementioned contingencies,
the SELLER shall not be liable for such delay and the time for delivery of the
VESSEL under this Contract shall be extended without any reduction in the
Contract Price for a period of time which shall not exceed the total
accumulated time of all such delays during which the construction of the VESSEL
was actually delayed beyond the reasonable control of the SELLER as a direct
result of such event. All the above are subject nevertheless to the BUYER’s
right of cancellation under Paragraph 3 of  this
Article and subject to all relevant provisions of this Contract which authorize
and permit extension of the time of delivery of the VESSEL.

 

It is
specifically agreed that for a delay, which is caused by the late delivery to
the SELLER of machinery, equipment and supplies to be incorporated in the
VESSEL, to be considered as caused by an event described in the previous
paragraph, it should be determined that the SELLER when contracting for such
machinery, equipment and supplies was expeditious and prudent, that he has
exercised due diligence in the performance of any acts required of its part,
and that he has exercised due diligence in expediting deliveries under the
SELLER’s Purchase Contract or in seeking equivalent convenient substitute
performance., and in case of late performance or default of a sub-contractor or
supplier, it should he also determined that the SELLER’s choice of the
sub-contractor was reasonable and responsible and that the SELLER has exerted
all reasonable efforts to expedite performance, avoid default or procure
reasonable substitute performance.

 

It is also
specifically agreed that if any of the above events is to occur, the SELLER
shall use due diligence and shall as soon as possible take all necessary and
reasonable steps in order to avoid and/or reduce and/or prevent and/or mitigate
any possible ensuing delay.

 

The SELLER shall not be entitled to any
extension of the Contract Delivery Date and any of the types of delay listed
below which may occur, shall he regarded as non-permissible delays:

 

(i)                                     Any
delay resulting from the SELLER’s own breach of contract, or fault, or
negligence or that of any of its employees or breach of Contract or fault of its agents, subcontractors or other
suppliers.

 

(ii)                                  Any
delay resulting from a cause of delay already in existence at the time

of signing of this Contract.

 

21

 

2.                                       NOTICE
OF DELAY,

 

Within seven
(7) days from the date of commencement of any of the above-mentioned causes of
delay on account of which the SELLER claims that it is entitled under this
Contract to an extension of the time for delivery of the VESSEL, the SELLER
shall advise the BUYER by letter, telefax or telex, of the date on which such
delay commenced and
describing in all its details the nature of the event which caused the
delays.

 

In the event
of the delay continuing for more than fourteen (14) days, further notice, by
letter, telex or telefax shall be given to the BUYER every seven (7) days thereafter setting out the
same particulars, as aforesaid, until the causes of the delay have ended.

 

Likewise
within seven (7) days after such cause of delay ends, the SELLER shall advise
the BUYER by letter, telefax or telex, of the date such cause of delay ended,
and also shall specify the maximum period- of the time by which in
the SELL ER’s Opinion the date for delivery of the VESSEL should be extended by
reason of such cause of delay. Failure of the BUYER to object to the SELLS R’s
notification of any claim for extension of the Delivery Date within thirty (30)
days after receipt by the BUYER of such notification, shall be deemed to be a
waiver by the BUYER of its right to object to such extension.

 

The SELLER
shall also immediately take steps to mitigate the effects of the delay and to
accurately determine the period by which the Delivery Date is going to be
postponed by reason of the aforementioned events and shall immediately notify
the BUYER in writing accordingly.

 

If the SELLER
does not give the aforementioned advice forthwith the SELLER shall lose the
right to claim such delay as permissible delay and any right of postponement of
delivery date.

 

3.                                       RIGHT
TO CANCEL FOR EXCESSIVE DELAY.

 

If the total
accumulated time of all delays on account of the causes specified in Paragraph
I of this Article aggregate to One Hundred and Eighty (180) days or more,
excluding delays awarded by an arbitration as specifically provided fir in
Article 13 hereof, and excluding delays which are caused due to default in
performance by the BUYER, or due to delays in delivery of the Buyer’s supplied
items or due to causes which, under Article 4,5,6,11 and 12 hereof, permit
extension or postponement of the time for delivery of the VESSEL, then in such
event, the BUYER may in accordance with the provisions set out. herein rescind/
cancel this Contract.

 

The SELLER
may, at any time, after the accumulated time of the aforementioned delays
justifying cancellation by the BUYER as above, demand
in writing that the BUYER shall make an election, in which ease the BUYER
shall, within fifteen (I5) days after such demand is received by the BUYER
either notify the SELLER of its intention to cancel, or consent to an extension
of the Delivery Date to an agreed future date. If any further delay occurs on
account of causes justifying cancellation as specified in this Contract, the
BUYER shall have the same right of cancellation upon the same terms as
hereinabove provided.

 

4.                                       DEFINITION
OF PERMISSIBLE DELAY.

 

Delays on
account of such causes as provided for in Paragraph 1 of this Article, but
excluding any other extensions of a nature which under the terms of this
Contract permits postponement of the Delivery Date, shall be understood to be
(and are herein referred to as) permissible delays, and are to be distinguished
from non-permissible delays on account of which the Contract Price is subject to adjustment as
provided for in Article 3 hereof.

 

22

 

5.                                       ACCUMULATED
TIME OF DELAY

 

In the event
that the total accumulated time of all delays including non-permissible as well
as permissible delays, aggregates to One Hundred and Ninety (190) days or more,
then the BUYER may at any time thereafter rescind this Contract in accordance with the provisions of
Article 10 hereof.

 

ARTICLE 9 - WARRANTY OF QUALITY

 

1.                                       GUARANTEE
OF MATERIAL AND WORKMANSHIP

 

The SELLER,
for a period of twelve (12) months following delivery to the BUYER of the
VESSEL, guarantees the VESSEL, her hull (including paints and coats, where
applicable) engine machinery gear and all parts and equipment thereof that are
manufactured or furnished or supplied or installed or applied by the SELLER
and/or its sub-contractors under this Contract including material, equipment
(however excluding any parts for the Vessel which have been supplied by or on
behalf of the BUYER other than if any defects hi respect of such parts arise as
a result of their incorrect or faulty installation or inadequate storage by the
SELLER, the SELLER and/or any sub-contractors appointed under this Contract)
against all defects which are due to faulty design excluding the defects
accepted by both of Parties prior to delivery or defective materials or
defective construction and/or poor workmanship.

 

If the
guarantees given by suppliers and/or subcontractors have a validity in excess
of twelve (12) months, the SELLER will transfer any residual rights in the
guarantees given by any supplier and/or subcontractor to the BUYER at the of
end of the Guarantee period under this Article 9,

 

2.                                       NOTICE
OF DEFECTS

 

The BUYER
shall notify the SELLER in writing, or by telefax, as promptly as possible,
after discovery of any defect or deviations for which a claim is made under
this guarantee. The BUYER’s written notice shall describe the nature and the
extent of the defect. The SELLER shall have no obligation under this guarantee
for any defects discovered after the expiry date of the guarantee, unless notice of
such defects, is received by the SELLER not later than fifteen (15) days after
such expiry date. Telefaxed advice with brief details explaining the nature of
such defect and extent of such defect within fifteen (15) days after such
expiry date and a statement that a claim is forthcoming will be sufficient
compliance with the requirements as to time.

 

3.                                       REMEDY
OF DEFECTS

 

The SELLER
shall remedy at its expense free of charge to the BUYER any defects, against
which the VESSEL or any part of the equipment thereof is guaranteed under this
Article by making all necessary repairs and/or replacement. Such repairs and/or
replacement will be made by the SELLER.

 

The Seller
will provide another 12 months guarantee for the replaced parts, however the
maximum guarantee period will not exceed 18 months after the delivery of the
vessel.

 

However, if it
is impractical to make the repair by the SELLER, and if forwarding by the
SELLER of replacement parts, and materials cannot be accomplished without
impairing or delaying the operation or working of the VESSEL, then, in any such
event, the BUYER may subject to the SELLER’S consent in writing, not to be
unreasonably withheld, cause the necessary repairs or replacements to be made
elsewhere at the discretion of the BUYER, provided that the BUYER shall first
give the SELLER notice in writing by letter, telefax, or telex of the time and
place such repairs will be made and, if the VESSEL, or her operation or working
is not thereby delayed or impaired, the SELLER shall have the right to verify
by its own representative(s) or that of

 

23

 

Classification
Society the nature and extent of the defects complained of. The SELLER shall,
in such cases, promptly advise the BUYER, by telex, after such examination has
been completed, of its acceptance or rejection of the defects as ones that are
subject to the guarantee herein provided. lit all minor cases, the Guarantee Engineer(s),
as hereinafter provide for, will act for and on behalf of the SELLER.

 

Upon the
SELLER’s acceptance of the defects as justifying remedy under this Article, or
upon award of the arbitration so determining, the SELLER shall pay to the BUYER
in freely transferable United States Dollars, whatever actual costs for such
repairs or replacements, including forwarding charges, as either agreed or
awarded by the arbitration tribunal to the BUYER, same not to exceed the costs
of effecting such repairs in a average shipyard in China. Any dispute under
this Article shall he referred to arbitration in accordance with the provisions
of Article 13 hereof.

 

Any
liabilities outstanding at the end of the guarantee period, shall be settled
within thirty (30) days after  the
amounts have been agreed between the parties or in case of disagreement, upon
publication of the Arbitration Award.

 

4.                                       EXTENT
OP THE SELLER’S LIABILITY

 

The SELLER
shall have no obligation and/or liabilities with respect to defects discovered
after the expiration of the period of guarantee specified above.

 

The SELLER
shall be liable to the BUYER for defects and damages caused by any of the
defects specified in Paragraph 1 of this Article provided that such liability
of the SELLER shall be limited to damage, occasioned within the guarantee
period specified in Paragraph 1 above.

 

The SELLER
shall not be obligated to repair, and/or be liable for, damages to the VESSEL
or to any part of the equipment thereof, due to ordinary wear and tear or
caused by the defects other than those specified in  Paragraph I above, nor shall there
be any SELLER’s liability hereunder for defects in the VESSEL, or any part of
the equipment thereof, caused by fire or accidents or mismanagement,
negligence, on the part of the BUYER, its employees or agents including the
VESSEL’s officers, crew and passengers, or any persons on or doing work on the
VESSEL other than the SELLER. its employees, agents or subcontractors.
Likewise, the SELLER shall not be liable for defects in the VESSEL, or the
equipment or any part thereof, due to repairs
or replacement which were made by persons other than the SELLER and/or their
subcontractors and/or their agents and/or their servants.

 

The SELLER
shall have no responsibility or liability for any defects in the VESSEL other
than the defects specified in Paragraph 1, against which the guarantee is given
by the SELLER under this Article. The SELLER shall not be responsible or liable
for any consequential damages, loss of time, loss of profit or earning or
demurrage occasioned to the BUYER by reason of the defects specified in
Paragraph 1 hereof or due to repairs or other works done to the VESSEL to
remedy such defects.

 

The SELLER
shall not be responsible for remedying defects in any part of the VESSEL which
may, subsequent to the delivery of the VESSEL, have been replaced or in any way
repaired by any other contractor (excluding SELLER’s subcontractors, agents or
servants), or for remedying any defects which have developed, or have been
aggravated by acts, omissions or neglect on the part of the BUYER, its servants
or agents or by ordinary wear and tear or by any other circumstances beyond the
control of the SELLER.

 

The Guarantee
provided in this Article and the obligations and the liabilities of the SELLER
hereunder are exclusive and in lieu of and the BUYER hereby waives all other
remedies, warranties, guarantees or liabilities, express or implied, arising by
law or otherwise (including

 

24

 

without limitation
any obligations of the SELLER with respect to fitness, merchantability and
consequential damages) or whether or not occasioned by the SELLER’S negligence.
This Guarantee shall not he extended, altered or varied except by a written
instrument signed by the duly authorized representatives of the SELLER and the
BUYER.

 

The full
benefit of any additional guarantees or warranties given by the SELLERS
subcontractors suppliers or manufacturers if any shall, if requested by the
BUYER, be duly transferred to the BUYER by the SELLER.

 

In case of the
sale of the VESSEL from the BUYERS to a new OWNER during the above stipulated guarantee
period, the SELLER agrees to transfer the remaining guarantee period to the new
owner which shall in no circumstances exceed twelve (12) months from the date
of delivery of the VESSEL to the BUYER provided that this shall not impose any
more obligations and/or liabilities to the SELLER than those contained in the
original guarantee as set out herein.

 

5.                                       GUARANTEE
ENGINEER(S)

 

The SELLER
shall help to arrange one Guarantee Engineer to serve on the VESSEL as the
SELLER’s representative(s) for a period of twelve (12) months, at SELLER’s
option, from the date of delivery of the VESSEL. The BUYER and its employees
shall give such Guarantee Engineer full cooperation in carrying out his duties
as the representative(s) of the SELLER onboard the VESSEL The BUYER shall
accord the Guarantee Engineer(s) the treatment comparable to the VESSEL’s Chief
Engineer, and shall provide him with accommodations and subsistence at no cost
to the SELLER and/or the Guarantee Engineer.

 

The BUYER may
at its option terminate the stay of the Guarantee Engineer before the
completion of one (1) year but in no event earlier than three (3) months after
delivery of the VESSEL, with SELLER’s prior approval which not to be
unreasonably withheld.

 

The BUYER
shall pay to each Guarantee Engineer the sum of United States Dollars two
thousand only (USD 2,000.00) per month to cover his/their miscellaneous
expenses and the BUYER shall pay expense of repatriation of one person to
Fuzhou, the People’s Republic of China by air upon termination of his service,
and also shall pay the expense of his communications with the SELLER when made
in performance of his duties as the Guarantee Engineer and the expenses, if
any, of his medical and hospital care. The BUYER shall indemnify the Guarantee
Engineer for personal injuries, including death and damages to, or loss or
destruction of property of the Guarantee Engineer, if such death, injuries,
damages, loss and/or destruction were caused by gross negligence or wilful
misconduct of the BUYER, its successor(s) and/or assign(s) or its employees and/or
agents.

 

In ease the
BUYER considers that the Guarantee Engineer is unsuitable for the job or is
uncooperative with the VESSEL’s Chief Engineer, then the BUYER shall notify
accordingly the SELLER and the SELLER shall assist to arrange replacement
provided that such replacement is approved by the SELLER ‘s superior
organization and the crews certificates and passports of the replacing engineer(s)
can be procured. Until the replacement in the way set out in the foregoing, no replacement
of the guarantee engineer on aboard should be effected.

 

Pertaining to
the detailed particulars of this paragraph, a detailed Employment Contract will
be executed between the parties hereto upon delivery of the VESSEL.

 

25

 

ARTICLE 10 - CANCELLATION, REJECTION AND RESCISSION BY THE
BUYER

 

1.                                       NOTICE

 

All payments
made by the BUYER prior to the delivery of the VESSEL shall be in  the nature of advance to the
SELLER. In the event the BUYER shall exercise its right of rescission and/or
cancellation of this Contract under and pursuant to any of the provisions of
this Contract specifically permitting the BUYER to do so, then the BUYER shall
notify the SELLER by letter, telefax, or telex and such rescission and/or
cancellation shall be effective as of the date the notice thereof is and/or is
deemed to be received by the SELLER.

 

2.                                       REFUND
BY THE SELLER

 

Upon rescission and/or cancelling of this
Contract by the BUYER pursuant to the provisions hereof; the SELLER shall
refund in United States Dollars immediately to “the BUYER the full amount of
all sums paid by the BUYER and received by the SELLER on account of the VESSEL
together with interest thereon at the rate of live percent (5%).p.a. on the
amounts required to be refunded to the BUYER, computed from the respective
dates on which the relevant sums were paid by the BUYER to the SELLER to the
date of remittance by transfer of such refund net to the BUYER by the SELLER,
unless the SELLER disputes the BUYER’s cancellation and/or rescission by
instituting arbitration within fifteen (15) New York banking days in accordance
with Article 13. However, in the event of total loss as described in Article 12
of this Contract, then, no interest will be refunded on the amount required
herein.

 

If the BUYER’s
cancellation or rescission of this Contract is disputed by the SELLER by
instituting arbitration as aforesaid, then no refund shall be made by the
SELLER, and the BUYER shall not be entitled to demand repayment from Guarantee
Bank under the Refund Guarantee until the arbitration award between the BUYER
and the SELLER or, in case of appeal or appeals, the final court order, which
shall be in favor of the BUYER, declaring the BUYER’s cancellation and/or
rescission justified, is made and delivered to the SELLER by the arbitration
tribunal or final competent English Court having jurisdiction on the dispute.

 

All sums so
refunded shall be paid in freely transferable United States Dollars and the
SELLER undertakes to obtain any necessary exchange control or fiscal consents
or licenses necessary to effect such payment.

 

For the
purpose of this Article, the SELLER shall have delivered to the BUYER, the
irrevocable Refund Guarantee specified in Exhibit ‘B’.

 

Upon such
refund by the SELLER to the BUYER, all obligations, duties and liabilities of
each of the parties hereto to the other under this Contract shall he forthwith
completely discharged.

 

ARTICLE 11 - BUYER’S DEFAULT

 

1.                                       DEFINITION
OF DEFAULT

 

The BUYER
shall be deemed in default of its obligation under the Contract if any of the
following events occurs:

 

(a)                                  The
BUYER fails to pay the Second or Third or Fourth instalment to the SELLER
within five (5) New York banking days after any such instalment become due and
payable under the provisions of Article 2 hereof and provided the BUYER shall
have received the SELLER’S demand for payment and the respective Refund
Guarantee in accordance with Article 2 hereof; or

 

26

 

(b)                                 The
BUYER fails to pay the fifth instalment to the SELLER in accordance with
Paragraph 3(e) and 4(e) of Article 2 hereof; or

 

(c)                                  The
BUYER fails to accept and take delivery of the VESSEL, when the VESSEL is duly
tendered for delivery by the SELLER under the provisions of Article 7 hereof
within seven (7) days from the tendered date- and without any
justifiable reason thereof under this Contract;

 

2.                                       NOTICE
OF DEFAULT

 

If the BUYER
is in default of any instalment of the Contract Price, or in performance if its obligations as
provided hereinabove, the SELLER shall notify the BUYER to that effect by
telex, confirmed in writing, after the date of occurrence of the default as per
Paragraph 1 of this Article and the BUYER shall forthwith acknowledge by telex,
confirmed in writing, to the SELLER that such notification has been received.
In case the BUYER does not give the aforesaid telex acknowledgment to the
SELLER within five (5) New York banking days, it shall be deemed that such
notification has been duly received by the BUYER.

 

3.                                       INTEREST
AND CHARGE

 

If the BUYER
is in default of payment as to any instalment as provided in Paragraph 1 (a)
and/or 1 (b) of this Article, the BUYER shall pay interest on such instalment
at the rate of five percent (5 %) per annum from the due date thereat° the date
of payment to the SELLER of the full amount including all aforesaid interest.
In case the BUYER shall unjustifiably fail to take delivery of the VESSEL when
required to as provided in Paragraph I (c) of this Article, the BUYER shall be
deemed in default of payment of the fifth instalment and shall pay interest
thereon at the same rate as aforesaid from and including the day on which the
VESSEL is tendered for delivery by the SELLER to the date on which payment of
the fifth instalment is received by the SELLER.

 

In any event
of default by the BUYER under 1(a) or 1(b) or 1(c) or 1(d) or 1(e) of this
Article, the BUYER shall also pay all charges and expenses incurred by the
SELLER in consequence of such default.

 

4.                                       DEFAULT
BEFORE DELIVERY OF THE VESSEL

 

(a)                                  If
any default by the BUYER occurs as defined in Paragraph 1 (a) or 1 (b) or (c)
of this Article, the Delivery Date shall, at the SELLER’s option, he postponed
for a period of continuance of such default by the BUYER.

 

(b)                                 If
any such default as defined in Paragraph 1 of this Article committed by the
BUYER continues for a period of fifteen (15) days after receiving the notice
provided in Paragraph 2 of this Article, then, the SELLER shall have all
following rights and remedies:

 

	
  (i)

  	
  The SELLER may,
  at its option, cancel or rescind this Contract, by giving notice of such
  effect to the BUYER by letter or telefax or telex. Upon receipt by the BUYER
  of such notice of cancellation or rescission, all or the BUYER’s supplies and all its
  equipment and machinery shall be kept as a security for the SELLER’s claim;
  and

  
	
   

  	
   

  
	
  (ii)

  	
  In the event of
  such cancellation or rescission of this Contract, the SELLER shall also be
  entitled to retain any installment or installments of the Contract Price paid
  by the BUYER to the SELLER as a security for SELLER’s claim; and

  
	
   

  	
   

  
	
  (iii)

  	
  In addition to
  the above and in the event of such rescission or cancellation, the SELLER
  shall be entitled (but not hound) to exercise and enforce any or all of its

  

 

27

 

rights, powers and
remedies under this contract (including but not limited to the sale of the
VESSEL and application of the proceeds thereof pursuant to Paragraph 5
herebelow) and/or under any or all of the securities provided to the SELLER by
way of security for the BUYER’s obligations hereunder.

 

5.                                       SALE
OF THE VESSEL

 

(a)                                  In
the event of cancellation or rescission of this Contract by the SELLER as above
provided, the SELLER shall have full right and power either to complete or
private sale on such terms and conditions as the SELLER thinks fit without
being answerable for any loss or damage occasioned to the BUYER thereby. In any
case the SELLER will use due diligence in obtaining the best possible sale
price of the VESSEL, which should not be inferior to the actual market value of
the VESSEL at the time of the sate.

 

In the case of sale of the VESSEL, the SELLER
shall give reasonable early written notice by letter, telefax or telex, to the
BUYER and the BUYER shall be entitled to bid for the VESSEL at a public auction
or to make an offer to buy the VESSEL if it receives notice from the SELLER of its
intention to sell it privately.

 

(b)                                 In
the event of the sale of the VESSEL in its completed state. the proceeds of
sale received by the SELLER shall be applied firstly to payment of all expenses
attending such sale and otherwise incurred by the SELLER as a result of the
BUYER’s default, and then to payment of all unpaid installments and/or unpaid
balance of the Contract Price (less the value of the BUYER’s Supplies) and
interest on such installments at the interest rate as specified in the relevant
provisions set out above from the respective due dates thereof to the date of
application.

 

(c)                                  In
the event of the sale of the VESSEL in its incomplete state, the proceeds of
sale received by the SELLER shall be applied firstly to all expenses attending
such sale and otherwise incurred by the SELLER as a result of the BUYER’s
default, and then payment of all costs of construction of the VESSEL (such
costs of construction, as herein mentioned, shall include but are not limited
to all costs of labor and/or prices paid or to be paid by the SELLER for the
equipment and/or technical design and/or materials purchased or to be
purchased, installed and/or to be installed on the VESSEL) less the installments
so retained by the SELLER, and compensation to the SELLER for a reasonable sum
of loss of profit due to the cancellation or rescission of this Contract.

 

(d)                                 In
either of the above events or rescission of this Contract, if the proceeds of
sale exceeds the total of the amounts to which such proceeds are to he applied
as aforesaid, the SELLER shall promptly pay the excess to the BUYER without
interest, provided, however that the amount of such payment to the BUYER shall in  no event exceed the total amount
of installments already paid by the BUYER and the cost of the BUYER’s supplies,
if any.

 

(e)                                  If
the proceeds of sale are insufficient to pay such total amounts payable as
aforesaid, the BUYER shall promptly pay the deficiency ,to the
SELLER upon request.

 

ARTICLE 12 - INSURANCE

 

1.                                       EXTENT
OF INSURANCE COVERAGE

 

From the time
of keel-laying of the first section or block of the VESSEL until the VESSEL is
completed, the SELLER shall, at its own cost and expense, keep the VESSEL and
all machinery, materials, equipment, appurtenances and outfit, delivered by
SELLER for the VESSEL or built

 

28

 

into, or
installed in or upon the VESSEL, fully insured with first class Chinese
insurance company for SELLER’s risk. (Institute Clauses for Builder’s Risks).

 

The insurance
coverage shall be carried up to the date of delivery of the VESSEL, and shall
be in an amount at least equal to the aggregate amount of all payments made by
the BUYER to the SELLER plus the value of the BUYER’s supplies in the custody of the SELLER. The policy referred to
hereinabove shall be taken out in the name of the SELLER and all losses under
such policy shall be payable to the
SELLER.

 

2.                                       APPLICATION
OF RECOVERED AMOUNT.

 

(a)                                  Partial
Loss :

 

In the event
the VESSEL shall be damaged by any insured cause whatsoever prior to acceptance
and delivery thereof by the BUYER and in the further event that such damage
shall not constitute an actual or a constructive total loss of the VESSEL, the
SELLER shall apply the amount recovered under the insurance policy referred to
in Paragraph 1 of this Article to the repair of such damage to the full and
complete satisfaction of the Classification Society, of the regulatory bodies
and other institutions or authorities as described in the  Specifications without additional
expenses to the BUYER and without any notations, recommendations or remarks
whatsoever and the BUYER shall accept the VESSEL under this Contract if fully
repaired and completed in accordance with this Contract and Specifications.

 

(b)                                 Total
Loss

 

However, in
the event that the VESSEL is determined to be an actual or constructive total
loss, the SELLER shall either:

 

(i)                                     By
the mutual agreement between the parties hereto, proceed in accordance with
terms of this Contract, in which case the amount recovered under said insurance
policy shall be applied to the reconstruction and/or repair of the VESSEL’S
damages and/or reinstallation of BUYER’s supplies without additional expenses
to the BUYER, provided the parties hereto shall have first agreed in writing as
to such reasonable extension of the Delivery Date and adjustment of other terms
of this Contract including the Contract Price as may be necessary or the
completion of such reconstruction and/or repair ; or

 

(ii)                                  if
due to whatever reasons the parties fail to agree on the above, then refund
immediately to the BUYER the amount of all installments paid to the SELLER
under this Contract without interests plus the value of the BUYER’S supplies
(if totally lost) whereupon this Contract shall be deemed to be rescinded,
cancelled and automatically terminated, all rights, duties, liabilities and
other obligations of each of the parties to the other shall terminate
forthwith, and the SELLER shall forthwith redeliver to the BUYER any of the
BUYER’s supplies which shall not have become a total loss,

 

Within thirty
(30) days after receiving notice of any damage to the VESSEL constituting an
actual or a constructive total loss, the BUYER shall notify the SELLER in
writing by letter or telefax, or by telex of its agreement or disagreement
under this sub-paragraph. In the event that BUYER fails to so notify the
SELLER, then such failure shall be construed as a disagreement on the part of the BUYER. This Contract shall be
deemed as rescinded and cancelled and the BUYER shaft receive the refund as
hereinabove provided and the provisions hereof shall apply.

 

29

 

3.                                       TERMINATION
OF THE SELLER’S OBLIGATION TO INSURE.

 

The SELLER’S
obligation to insure the VESSEL, hereunder shall cease and terminate forthwith
upon delivery thereof to and acceptance by the BUYER.

 

ARTICLE 13 - DISPUTES AND ARBITRATION

 

1.                                       PROCEEDINGS

 

In the event of any dispute between the parties hereto as to any matter
arising out of or relating to this Contract or any stipulation herein or with
respect thereto which cannot be settled by the parties them selves forthwith,
such dispute shall be resolved by arbitration in London in accordance with the
Laws of England and the LMAA procedure current at the time. Either party may
demand arbitration of any such disputes by giving written notice by letter,
telefax or telex to the other party. Any demand for arbitration by either party
hereto shall state the -name of the arbitrator appointed by such party and
shall also state briefly the question or questions as to which such party is
demanding arbitration. Within twenty (20) days after receipt of notice of such
demand for arbitration, the other party shall in  turn appoint a second arbitrator. The two
arbitrators thus appointed shall have the power, in case of disagreement to
appoint an Umpire. The Arbitrators and the Umpire shall be members of the
London Marine Arbitrators’ Association (“LMAA”).

 

In the event however, that said other party should fail to appoint a
second arbitrator as aforesaid within twenty (20) days following receipt of
notice of-demand of arbitration, it is agreed that such party shall thereby be
deemed to have accepted and appointed as its own arbitrator the one already
appointed by the party demanding arbitration, and the arbitration shall proceed
forthwith before this sole arbitrator. And in the further event that the two
arbitrators appointed respectively by the parties hereto as aforesaid should be
unable to reach agreement on the appointment of the Umpire within twenty (20)
days from the date on which the second arbitrator is appointed, either party &the said two arbitrators may apply to the High
Court of Justice in London, or to the President, for the time being, of the
LMAA. The Arbitration Award issued by the sole Arbitrator or by the two
Arbitrators, or by the Umpire as the case may be, shall be final, conclusive
and binding upon both parties hereto unless appealed by either party in
accordance with the English Laws.

 

The arbitration will he conducted in London, in accordance with and
subject to the provisions of the Arbitration Act 1996, or any statutory modifications or reenactment
thereof, for the time being in force, and in accordance with English law currently in force,

 

2.                                       ALTERNATIVE
ARBITRATION BY AGREEMENT

 

Notwithstanding
the preceding provisions of this Article, h is recognized that in the event of
any dispute or  difference
of opinion arising in regard to the construction of the VESSEL, her machinery
and equipment, or concerning the quality of materials or workmanship thereof or
thereon, such dispute rimy be referred (by mutual agreement of the parties
hereto) to the Classification Society, in such case, the opinion of the
Classification Society shall be final and binding on the parties hereto.

 

3.                                       NOTICE
OF AWARD

 

Notice of any
award being issued shall immediately by given in writing or by telex confirmed
in writing to the SELLER and the BUYER,

 

30

 

4.                                       EXPENSES

 

The
arbitrator(s) shall determine which party shall bear the expenses of the
arbitration or the proportion of such expenses which each party shall bear.

 

5.                                       AWARD
OF ARBITRATION ENTRY INTO COURT

 

In case of
failure by either party to honour the Arbitration Award(s) promptly, a judgment
may be entered in any proper court having jurisdiction thereof.

 

6.                                       ALTERATION
OF DELIVERY TIME

 

In the event
of reference to arbitration of any dispute arising out of matters occurring
prior to delivery of the VESSEL, the BUYER shall not be entitled to extend the
Delivery Date as defined in Article 7 hereof. The Arbitration Tribunal however,
shall be empowered to decide as to what extent if any the Delivery Date is
altered as a result of the arbitration proceedings, if at all,

 

7.                                       SERVICE
AGENTS IN LONDON

 

All notices in
connection with the above Arbitration and any Appeals thereof shall he given by
letter or telefax in accordance with Article 17 hereunder. In addition, the
BUYER hereby irrevocably appoints Messrs. Mr. Riches Consulting Address: Old
Jarretts Farmhouse, Brantridge Lane, Balcombe, West Sussex, RH17 6JR, United Kingdom.

 

ARTICLE 14 - RIGHT OF ASSIGNMENT

 

1.                                       The
Buyer shall not be entitled to assign its rights under this Contract without
the prior written consent of the Seller (such consent not to be unreasonably withheld).
However the Buyer shall be entitled without the prior written consent of the
sellers but with prior written notice to the Sellers, to assign it rights under
this contract in favour of a bank or financial Institution which will finance
part or all of the pre-delivery instalments payable under this Contract as
security for such financing(it being understood for the avoidance of doubt
that:

 

	
  (i)

  	
  Such assignment
  shall be an assignment by way of security in favour of a financier of the
  Buyer and not an assignment by way of transfer in favour of a third party
  purchaser.

  
	
   

  	
   

  
	
  (ii)

  	
  The Seller shall
  not by virtue of such assignment have any additional obligation and/or risk
  other than those existing prior the date of such assignment and

  
	
   

  	
   

  
	
  (iii)

  	
  The Buyer shall
  remain responsible for the Performance of all obligations under this contract
  including but not limited to paying all instalments of the Contract price,
  which shall be approved by this bank or Financial institution.

  

 

2.                                       ASSIGNMENT
WITH EFFECT FROM DELIVERY.

 

Provided that
the BUYER shall remain responsible for the performance of all obligation under
this Contract (including but not limited to paying all installments and
execution of the Protocol of the Delivery and Acceptance) and further that the
SELLER’s right to receive all installments (including the delivery installment)
from the BUYER and all  rights
and benefits hereunder are not in any way prejudiced and the SELLER’s prior
consent in writing, the BUYER shall be entitled to sell its interest in this
Contract to a third party with effect from delivery of the VESSEL and the
SELLER will upon request of the BUYER issue delivery documents in favor of such
third party and deliver the VESSEL to such third party. In such event and upon
delivery of the VESSEL, all rights of the

 

31

 

BUYER shall be
transferred to such third party and the BUYER shall cease to have any right in and under
this Contract,

 

ARTICLE 15 - TAXES AND DUTIES

 

1.                                       TAXES
AND DUTIES INCURRED IN CHINA.

 

The SELLER
shall bear and pay all taxes, duties stamps, dues levies and fees of whatsoever
nature incurred or imposed in China in connection with the execution and/or
performance of this Contract by the SELLER and its sub-contractors, and any payments
to be made hereunder by the BUYER. The SELLER warrants that BUYER’s supplies
for the construction or use of the VESSEL maybe imported into China without
taxes, duties or restrictions, however. The Buyer’s supplies list shall be
approved by the Seller before steel cutting, the amount for Buyer’s supplies to
be less than 10% of contract price and in compliance with the laws of the
People’s Republic of China.

 

2.                                       TAXES
AND DUTIES INCURRED OUTSIDE CHINA.

 

The BUYER
shall bear and pay all taxes, duties, stamps and fees incurred outside China in
connection with execution and/or performance of this Contract by the BUYER,
except for taxes, duties, stamps, dues, levies and fees imposed upon those
items which are to be procured by the SELLER for the construction of the VESSEL
in accordance with the terms of this Contract and the Specifications.

 

ARTICLE 16 - PATENTS, TRADEMARKS AND COPYRIGHT,

 

The machinery
and equipment. of the VESSEL may hear the patent number, trademarks or trade
names of the manufacturers. The SELLER shall defend and save harmless the BUYER
from patent liability or claims of patent infringement of any nature of kind,
including costs and expenses for, or on account of any patented or patentable
invention made or used in the performance of this Contract and also including
cost and expense of litigation, if any.

 

The SELLER’s
indemnity hereunder does not extend to equipment or parts supplied by the BUYER to the
SELLER if any.

 

ARTICLE 17 - NOTICES

 

Any and all
notices and communications by letter,
telefax or telex, in connection with this Contract shall be addressed as
follows

 

	
  To the BUYER

  	
   

  	
  :

  	
   

  	
  Aegean
  Bunkering Services Inc.

  
	
  Address

  	
   

  	
  :

  	
   

  	
  42,
  Hadjikyriakou Avenue, Piraeus 185 38-Greece

  
	
  Telephone
  No.

  	
   

  	
  :

  	
   

  	
  +30210
  4586000

  
	
  Telefax

  	
   

  	
  :

  	
   

  	
  +30210
  4586242

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  To the
  SELLER

  	
   

  	
  :

  	
   

  	
  Fujian
  Southeast Shipyard

  
	
  Address

  	
   

  	
  :

  	
   

  	
  7# Jianshe
  Road, Economic Technical Development Zone of Fuzhou, Fujian Province, China

  
	
  Telephone
  No.

  	
   

  	
  :

  	
   

  	
  +86 591
  83985091

  
	
  Telefax

  	
   

  	
  :

  	
   

  	
  +86 591
  83985070

  

 

Any change of
address shall be communicated in writing by registered mail by the party making
such change to the other party and in the event of failure to give such notice
of change, communications addressed to the party at their last known address
shall be deemed sufficient.

 

32

 

Any and all
notices, requests, demands, instructions, advice and communications in connection with this Contract shall
be deemed to be given at and shall become effective from, the time when the
same is delivered to the address of the party to be served, provided, however,
that registered airmail shall be deemed to he delivered ten (10) days after the date of dispatch,
express courier service shall be deemed to be delivered five (5) days after the
date of dispatch, and telex acknowledged by the answer backs shall be deemed to
be delivered upon dispatch.

 

Any and all
notices, communications, Specifications and drawing in connection with this
Contract shall be written in the English language and each party .hereto shall
have no obligation to translate them into any other language.

 

ARTICLE 18 - EFFECTIVE DATE OF CONTRACT.

 

This Contract shall become
effective upon fulfilment of all the following conditions:

 

1.                                       Due execution of
this Contract and the Specifications and maker list; and

 

2.                                       Receipt
by the SELLER of a Performance
Guarantee in the form annexed hereto as Exhibit “A” issued by  AEGEAN BUNKERING SERVICES INC; and

 

3.                                       Receipt by the
BUYER of the Refund Guarantee in  the form
annexed hereto as Exhibit “B” issued by the Guarantee Bank in accordance with
Article 2 Paragraph 7 hereof; and

 

4.                                       Receipt by the
SELLER of the first instalment in accordance with Paragraph 3(a) and 4(a) of
Article 2 of this Contract and

 

5.                                       Receipt by the
SELLER of an assurance letter which agree to provide the finance or loan to the
owner from Euro AAA bank.

 

If due to whatever reason,
any of the above conditions fails to be fulfilled by the June 22, 2007 unless
an extension of time limit is mutually agreed, then this Contract shall be null
and void having no effect whatsoever.

 

ARTICLE 19 - INTERPRETATION

 

1.                                       LAW
APPLICABLE

 

The parties
hereto agree that validity and interpretation of this Contract and of each
Article and part hereof be governed by and interpreted in accordance with the
Laws of England,

 

2.                                       DISCREPANCIES

 

All general
language or requirements embodied in the Specifications are intended to
amplify, explain and implement the requirements of this Contract. However, in
the event that any language or requirements so embodied in the Specifications
permit an interpretation inconsistent with any provision of this Contract, then
in each and. every such event the applicable provisions of this Contract shall
govern. The Specifications and plans are also intended to explain each other
anything shown on the plans and not stipulated in the Specifications or
stipulated in the Specifications and not shown on the plans, shall be deemed
and considered as if embodied in both. In the event of conflict between the
Specifications and plans, the Specifications shall govern,

 

33

 

However, with
regard to such inconsistency or contradiction between this Contract and the
Specifications as may later occur by any change or changes in the
Specifications agreed upon by and among the parties hereto after execution of
this Contract, then such change or changes shall govern.

 

3.                                       DEFINITION

 

(a)                                  In
absence of stipulation of “banking
day(s)” or “business day(s)”, the “day” or “days” shall be taken as “calendar
day” or “calendar days”.

 

(b)                                 “SELLER”
and “BUYER” used in the Specifications shall correspond to “SELLER” and “BUYER”
respectively used in this Contract.

 

4.                                       ENTIRE
AGREEMENT

 

This Contract
contains the entire agreement and understanding between the parties hereto and
supersedes all prior negotiations, representations, undertakings and agreements
on any subject matter of this Contract.

 

5.                                       AMENDMENTS
AND SUPPLEMENTS

 

Any
Supplement, Memorandum of Understanding or Amendment executed after the date
hereof in whatsoever form it may be, relating to this Contract shall be made in
writing and signed by both parties. Such Supplement. Memorandum of Understanding
or Amendment shall be an integral part of this Contract and shall be
predominant over the respective corresponding article/or paragraph of this
Contract.

 

34

 

IN WITNESS
WHEREOF, the parties hereto have caused this Contract to be duly executed on
the day and year first above written,

 

	
  THE BUYER:

  	
  TINOS MARINE
  INC.

  	
  THE SELLER:

  
	
   

  	
   

  	
   

  
	
  Representative

  	
   

  	
  Representative

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
  Witness

  

 

35

 

Understanding
or Amendment shall be an integral part of this Contract and shall be
predominant over the respective corresponding article/or paragraph of this
Contract.

 

IN WITNESS
WHEREOF, the parties hereto have caused this Contract to be duly executed on
the day and year first above written.

 

	
  THE BUYER:

  	
  TINOS MARINE
  INC.

  	
  THE SELLER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Representative:
  

  	
   

  	
  Representative:

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
  Signature:

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  Date:

  
	
   

  	
   

  	
   

  
	
  Witness:

  	
   

  	
  Witness:

  

 

36

 

Addendum No. 1 to Contract

 

With
reference to the Shipbuilding Contract No.                          
dated 25th of May 2007 (hereinafter called the “CONTRACT”) for one
(I) 3,800 DWT Product Tanker, having the SELLER’s Hull No. DN-3800-    (hereinafter called the -VESSEL”) executed
by and between                           ,
(hereinafter called the -BUYER”) and Fujian Southeast Shipyard (hereinafter
called the “SELLER”), the BUYER and the SELLER hereby mutually agree the
following:

 

1.                                       Last paragraph of Article 18 of the CONTRACT
is amended to read as follows:

 

“If,
due to whatever reason, any of the above conditions fails to be fulfilled by
the le of July 2007 unless an extension of time limit is mutually agreed, then
this Contract shall be null and void having no effect whatsoever.”

 

2.                                       All other terms and conditions of the
CONTRACT shall remain full in force and unaltered.

 

If
there is any discrepancy between the Contract and this Addendum, this Addendum
will prevail.

 

IN
WITNESS WHEREOF, the Buyer and the SELLER have caused this Addendum No. 1 to be
duly executed on this 28th day of June 2007.

 

	
  For
  and on behalf of the BUYER

  	
   

  	
  For
  and on behalf of the SELLER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  .

  	
   

  	
  Fujian
  Southeast ShipyardStock Purchase and Sale Agreement

Stock Purchase and Sale Agreement

THIS STOCK PURCHASE AGREEMENT dated October 19, 2007 ("Agreement"), by and
among Max Entertainment Holdings, Inc., a Europlay organized and existing under
the laws of the State of Delaware ("Buyer" or "MAX"), Europlay, Ltd, a Malta
corporation ("Europlay"), Andreas Christensen ("Christiansen") (Europlay and
Christensen are collectively referred to as "Seller") .

W I T N E S S E T H:

WHEREAS, Buyer wishes to buy and the certain shareholders of
Europlay ("Shareholders") wish to sell to Buyer, on the terms and for the
consideration hereinafter provided thirty million (30,000,000) shares of the
capital stock of Seller, which will represent sixty percent (60%) of the issued
and outstanding capital stock of Europlay.

NOW, THEREFORE, in consideration of the promises and the
respective agreements hereinafter set forth, Buyer and Seller hereby agree as
follows:

1. PURCHASE OF EUROPLAY COMMON STOCK.

1.1 Sale of Common Stock. Upon the terms and subject
to the provisions of this Agreement, the Shareholders agree that they will sell,
convey, transfer, assign and deliver to Buyer at the Closing provided for in
Article 2, free and clear of all claims, liens, pledges, encumbrances,
mortgages, charges, security interests, options, preemptive rights or other
interests or equities whatsoever, sixty percent (60%) of the shares of duly and
validly issued, fully paid and nonassessable, common stock of Europlay
(collectively, "Purchased Stock"). 

1.2 Right of First Refusal. If any Shareholder (the "Selling
Shareholder") desiring to dispose of all, but not less than all, of his shares
of stock in Europlay shall receive a bona
fide offer in writing from a financially capable purchaser to purchase all, but
not less than all, of the Selling Shareholder's shares of Stock, the Selling
Shareholder shall give written notice to the Buyer of his or its intention to
make such transfer stating the name and address of the proposed transferee, the
number of shares of Stock (the "Offered Stock") then held or owned by the
Selling Shareholder and the price to be paid therefore and the terms of payment.

The Buyer, upon receipt of such notice of transfer, shall have the option
("Option") to purchase all, but not less than all, of the Offered Stock at the
price and upon the terms bona fide offered by the proposed transferee. The
Option shall be exercisable within the sixty-day period ("Option Period") after
the date of receipt of such notice and shall be exercised by the sending of a
notice to the Selling Shareholder with a copy to the other Shareholders of
Europlay. 

If the Buyer elects not to, or fail to, exercise its options to purchase all
the Offered Stock, the Selling Shareholder may make the proposed transfer of the
Offered Stock to the proposed transferee in accordance with the terms of the
bona-fide offer within the thirty-day period following the expiration of the
Option Period. The proposed transferee shall become a party to this Agreement
with respect to the Offered Stock. If the proposed transfer of the Offered Stock
is not consummated within such thirty-day period, the terms and conditions of
this Section shall again apply to the Offered Stock.

1.3 Consideration for Sale and Transfer of the Purchased
Stock. Subject to the terms and conditions of this Agreement and in reliance
upon the representations, warranties and covenants of Seller and Shareholders
herein contained, and in full consideration of such sale, conveyance, transfer,
assignment and delivery of the Purchased Stock to Buyer, Buyer agrees to pay and
deliver to the Shareholders a total consideration of €6,000,000
payable as follows:

a. On November 15, 2007, or upon the completion of Buyer's
due diligence as set forth in Section 8.6 below, with notification to Seller as
set forth therein, which ever shall occur later, Buyer shall pay the
Shareholders Euro €1,600,000 in cash and
400,000 shares of MAX.

b. On or before March 30, 2008, Buyer shall pay the
Shareholders €1,200,000 in cash and
400,000 shares of MAX.

c. On or before June 30, 2008, Buyer shall pay the
Shareholders Euro €800,000 in cash and
400,000 shares of MAX.

1.4 Escrow of Stock. The parties agree that the
Purchased Stock shall be placed into an escrow account and the shares and cash
distributed as follows:

a. Upon the receipt of the shares of stock of the Buyer and
cash payment from the Buyer to be paid pursuant to Section 1.2(a) above, the
escrow agent shall transfer to Buyer, free of all encumbrances, one third (1/3)
of the Purchased Stock.

b. Upon the receipt of the shares of stock of the Buyer and
cash payment from the Buyer to be paid pursuant to Section 1.2(b) above, the
escrow agent shall transfer to Buyer, free of all encumbrances, one third (1/3)
of the Purchased Stock.

c. Upon the receipt of the shares of stock of the Buyer and
cash payment from the Buyer to be paid pursuant to Section 1.2(c) above, the
escrow agent shall transfer to Buyer, free of all encumbrances, the remainder of
the Purchased Stock.

d. During the pendency of the escrow, voting control of all
shares of Purchased Stock shall be granted to the Buyer by the Seller by way of
an irrevocable stock power. In the event that the Buyer shall breach the terms
of this Agreement, the escrow agent shall provide notice to the Buyer with an
opportunity to cure within a reasonable time, not to exceed thirty (30) days. In
the event the Buyer does not cure the default, the escrow agent shall return the
irrevocable stock power and any of the Purchased Stock to the Seller.

1.5 The Buyer and Christensen agree that Christensen the
parties shall enter into a three (3) year contract for Christensen to serve at
on the Board of Directors. Salary will be commensurate with industry standards
in the gaming industry, as well as include an annual performance bonus. The
initial position of Christensen shall also serve as Executive Chairman of
Europlay and will be responsible for the business development of Europlay.

2. THE CLOSING AND PAYMENT OF STOCK PURCHASE PRICE.

2.1 Closing. The closing ("Closing") with respect to
the acquisition of the Purchased Stock under this Agreement and all other
transactions contemplated hereby shall take place, for reference purposes at the
principal offices of Buyer or as otherwise established by Buyer; provided that,
Buyer and Seller agree that the Closing shall be effected by exchange of signed
documents via facsimile transmission followed by delivery of original signature
by overnight delivery. The Closing shall occur no later than November 15, 2007,
unless the parties mutually agree to extend such date or Buyer in writing waives
its rights to conduct due diligence as set forth in Section 8.6 below. The time
and date of the Closing is hereinafter called the "Closing Date."

2.2 Payment of Stock Purchase Price. At the Closing,
the Buyer shall deliver the Stock Purchase Price in the form of one or more
certificates representing 30,000,000 of the issued and outstanding common shares
of Buyer, which represents sixty percent (60%) of the issued and outstanding
shares of Europlay.

2.3 Transfer of Purchased Stock. As set forth in
Section 1.3 above, Seller shall transfer to Buyer the Purchased Stock, free and
clear of all claims, liens, pledges, encumbrances, mortgages, charges, security
interests, options, preemptive rights, restrictions or any other interests or
imperfections of title whatsoever. Said transfer shall be effected by delivery
to Buyer of the stock certificates deposited with the escrow agent and Issued In
the name of the Buyer.

2.4 Seller's Delivery at Closing. At Closing, Seller
shall also deliver or cause to be delivered to the Buyer copies of the following
(a) the corporate records and seals of Europlay, including, without limiting the
generality of the foregoing, the Europlay 's formation and operating documents
and all minutes and resolutions of the Europlay 's directors and shareholders;
(b) copies of all documents (including, without limitation, records,
correspondence and contracts) that have not been previously delivered before
Closing and that the Buyer in its reasonable opinion considers to be necessary
or desirable for the conduct by the Buyer of any activities related to the
assets or business operations of the Europlay.

2.6 Loss or Damage Prior to Closing. From the date of
this Agreement through Closing, the Seller shall cause Europlay to continue to
operate in the ordinary course, and to satisfy and comply with its obligations
and shall not make or initiate any actions that could result in the default of
any of Europlay's obligations or adversely affect the business of Europlay or
the purchase and sale herein contemplated.

3. REPRESENTATIONS AND WARRANTIES OF EUROPLAY.

Seller hereby represents, warrant and agrees as follows:

3.1 Organization and Qualification of Europlay.
Europlay is duly organized, validly existing and in good standing under the laws
of Malta. Europlay has all requisite corporate power and authority to own or
lease all of its properties and assets and to conduct its business in the manner
and in the places where such properties are owned or leased or such business is
now conducted by it. Europlay is duly qualified, licensed and authorized to do
business as a corporation and is in good standing in the jurisdictions in which
it conducts business, and is not required to be so licensed, qualified or
authorized to conduct its business or own its property in any other
jurisdiction.

The minute books of Europlay are current and contain correct
and complete copies of the Articles of Incorporation and Bylaws of Europlay,
including all amendments thereto and restatements thereof, and of all minutes of
meetings, resolutions and other actions and proceedings of its stockholders and
board of directors and all committees thereof, duly signed by the Secretary or
an Assistant Secretary, all directors or all stockholders. The stock record book
of Europlay is also current, correct and complete and reflects the issuance of
all of the outstanding shares of Europlay's capital stock since the date of its
incorporation.

3.2 Authority of Europlay and the Seller. This
Agreement and each of the agreements and other documents and instruments
delivered or to be delivered to Buyer pursuant to or in contemplation of this
Agreement will constitute, when so delivered, the valid and binding obligations
of such of Seller as are parties thereto and shall be enforceable in accordance
with their respective terms. The execution, delivery and performance of this
Agreement and each of the agreements and other documents and instruments
delivered or to be delivered to Buyer by Seller or Europlay have been duly
authorized by all necessary action of Seller and, with respect to Europlay, are
within Europlay's corporate powers, and will not: (a) result in a breach of or
constitute a default or result in any right of termination or other effect
adverse to Europlay under any indenture or loan or credit agreement of any of
the Seller or Europlay, or any other agreement, lease or instrument to which any
of the Seller or Europlay is a party or by which any property of the Seller or
Europlay is bound or affected; (b) result in, or require, the creation or
imposition of any mortgage, deed of trust, pledge, lien, security interest or
other charge or encumbrance or claim of any nature whatsoever on the Purchased
Stock or any property or assets now owned, leased or used by Europlay; (c)
result in a violation of or default under any law, rule, or regulation, or any
order, writ, judgment, injunction, decree, determination, award, now in effect
having applicability to Seller or Europlay; (d) violate any provisions of the
Articles of Incorporation or Bylaws of Europlay, or (e) require any approval,
consent or waiver of, or filing with, any entity, private or governmental. 

3.3 Capitalization. The Purchased Stock has been duly
and validly authorized, and is duly and validly issued, fully paid and
nonassessable. The Purchased Stock is free and clear of any and all claims,
liens, pledges, charges, encumbrances, mortgages, security interests, options,
preemptive or other rights, restrictions on transfer, or other interests or
equities or imperfections of title whatsoever. There are existing warrants,
preemptive or other rights, options, calls, commitments, conversion privileges,
or other agreements (all of the foregoing being collectively called "Options")
obligating Europlay to issue any or all of its authorized and unissued capital
stock, or any security convertible into and/or exchangeable for capital stock of
Europlay. The Purchased Stock represents sixty percent (60%) of the issued and
outstanding capital stock of Europlay, and no person has any right to acquire
the Purchased Stock or any interest therein except Buyer. 

3.4 Financial Information; Material Adverse Change.
The financial information provided to Buyer (the "Financial Information") and
auditor selected by Buyer is true and correct in all material respects, and do
not fail to disclose any material liability of Europlay. Neither the
execution nor delivery of this Agreement nor the completion of the transactions
contemplated hereby will result in acceleration of any of the dates for payment
of any of the liabilities of Europlay. Since the
date of the Financial Information, there has been no material adverse change in
the financial condition, results of operations, or business prospects of
Europlay. 

3.5 Valid Title to Purchased Stock. The Seller will
deliver to Buyer, valid and marketable title to the Purchased Stock at the
Closing, free and clear of any claims, liens, pledges, charges, encumbrances,
mortgages, security, interests, options, preemptive or other rights,
restrictions on transfer or other interest or equities or any other
imperfections of title whatsoever.

3.6 Conduct of the Business. Europlay is not a party
to, or subject to or bound by nor are any of its assets subject to or bound by
any agreement, oral or written, or any judgment, law, rule, regulation, order,
writ, injunction or decree of any court or governmental or administrative body,
which prohibits or adversely affects or upon the consummation of the
transactions contemplated hereby would prohibit or adversely affect: (a) the use
of any or all of the assets and property of Europlay necessary for operation in
the ordinary and usual course of business; or (b) the conduct of its business
and operations, in each case, in all material respects in the same manner as
such business has been conducted by it. All governmental licenses,
consents, permits and authorities required for the conduct in the ordinary
course of the operations of the business of Europlay and the owning of its
assets, have been obtained, are validly issued and are in good standing and to
the best of Seller's knowledge, such conduct and uses by Europlay are not in
breach or default of any statute, bylaw, regulation, covenant, restriction,
plan, permit, license or authority. 

3.7 Articles of Incorporation. The Articles of
Incorporation of Europlay and all amendments thereto to have been validly
adopted by the stockholders and directors of Europlay and the Articles of
Incorporation, as amended, are in full force and effect and are legal, valid,
binding and enforceable in accordance with its terms.

3.8 Bylaws. The Bylaws of Europlay, and all amendments
to the Bylaws, have been validly adopted, and the Bylaws, as amended, are in
full force and effect and are legal, valid, binding and enforceable in
accordance with their terms.

3.9 Share Redemptions and Distributions. Europlay is
not obligated to redeem any shares from any shareholder, and 
no dividends or other distributions in respect of any equity
security have been made or authorized by Europlay to the Seller or former
shareholders of Europlay. 

3.10 Disclosure. To the best of Seller's knowledge,
(a) no representation, warranty or statement contained in this Agreement or
other document furnished or to be furnished to Buyer pursuant hereto or in
connection with the transactions contemplated under this Agreement contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact or any fact necessary to make the statements contained
therein not materially misleading; and (b) there is no fact, which materially
and adversely affects, or, in the future may materially and adversely affect,
the condition of Europlay which has not been fully disclosed by Seller to Buyer.

3.11 Litigation. Neither the Seller nor Europlay is
party to any actions, suits or other legal, administrative or arbitration
proceedings or government investigations, actual or, to the best of Seller's
knowledge threatened, which could reasonably be expected to result in impairment
or loss of the Seller's interests in the Purchased Stock or any Europlay assets.
There are no claims, claims for damages, actions, causes of action, suits or
proceedings by or against Europlay, or affecting any of its assets, either to
best of Seller's knowledge threatened or affecting the subject matter of this
purchase and sale, nor any suits or proceedings at law or equity before or by
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, which could reasonably be expected to
adversely affect the business of Europlay or the purchase and sale herein
contemplated. 

3.12 Brokers. The Seller has engaged or consulted with
any advisor or broker to whom Buyer will or may become obligated to pay any
consideration on or following the Closing.

3.13 Taxes. Europlay has duly and timely filed all
returns, elections, filings and reports in respect of income and other taxes
required to be filed by it by law and all such returns, elections, filings and
reports are true, complete and correct in all material respects; there are no
tax arrears, including income tax, goods and services tax, employee withholdings
or property tax nor any related interest or penalties owing to any foreign,
federal, state, territorial or municipal tax authorities; the Seller has no
knowledge of any delinquent taxes or any actual or threatened assessment of
deficiency or additional tax or other governmental charge; there has been no tax
audit of Europlay by any taxing or other authority within 24 months of the
Closing Date, the Seller has no knowledge of any such audit currently pending or
threatened and there are no tax liens on any of the assets or properties of
Europlay; there are no agreements, waivers, or other arrangements with any
taxation authority providing for an extension of time with respect to the filing
of any tax return, election or payment of any tax, governmental charges ,
penalty, interest or fine, by Europlay; there are no actions, suits,
proceedings, investigations or claims now threatened or pending (to the
knowledge of the Seller) against or affecting Europlay in respect of taxes,
governmental charges, penalties, interest or fines, or any matters under
discussion with any governmental authority relating, to taxes, governmental
charges, penalties, interest or fines asserted by any such authority.

4. REPRESENTATIONS AND WARRANTIES BY BUYER.

As of the date hereof and as of the date of the Closing,
Buyer represents and warrants as follows:

4.1 Organization and Qualification of Buyer. Buyer is
duly organized, validly existing and in good standing under the laws of
Delaware. Buyer has full corporate power and authority to own or lease all of
its properties and assets and to conduct its business in the manner and in the
places where such properties are owned and leased or such business is now
conducted by it. 

4.2 Authority of Buyer. This Agreement and each of the
agreements and other documents and instruments delivered or to be delivered by
Buyer pursuant to or in contemplation of this Agreement will constitute, when so
delivered, the valid and binding obligation of Buyer and shall be enforceable in
accordance with their respective terms. The execution, delivery and performance
of this Agreement and each such agreement, document and instrument has been duly
authorized by all necessary corporate action of Buyer and is within Buyer's
corporate powers. The execution, delivery and performance of any such agreement,
document or instrument by Buyer and the execution, delivery and performance of
this Agreement or any other agreement, document or instrument by the Buyer does
not and will not with the passage of time or the giving of notice or both: 

(i) result in a breach of or constitute a default under any
indenture or loan or credit agreement or under any agreement of the Buyer, or
any other material agreement, lease or instrument to which Buyer is a party or
by which the property of Buyer is bound or affected; 

(ii) result in a violation of or default under any law, rule,
or regulation, or any order, writ, judgment, injunction, decree, determination,
award, indenture, material agreement, lease or instrument now in effect having
applicability to Buyer;

(iii) violate any provisions of the Articles of Incorporation
or Bylaws of Buyer; or 

(iv) require any approval, consent or waiver of, or filing
with, any entity, private or governmental, which has not been obtained. 

4.3 Governmental Approvals. All requisite consents,
authorizations, licenses, permits, orders, certificates and approvals of all
third parties and/or governmental agencies, including without limitation any
governmental agency or authority of the United States, or other jurisdiction
whose approval is necessary for Buyer to consummate the transactions
contemplated by this Agreement have been obtained.

4.4 Disclosure. No representation or warranty in this
Article 4, and no statement contained elsewhere in this Agreement or in any
schedule, exhibit, certificate or other document furnished or to be furnished by
Buyer to Seller pursuant hereto or in connection with the transactions
contemplated under this Agreement contains any untrue statement of a material
fact or omits or will omit to state a material fact or any fact necessary to
make the statements contained therein not materially misleading. 

4.5 Purchase for Investment. Buyer hereby represents
and warrants to each Seller that Buyer is acquiring the Purchased Stock for its
own account, for investment, and not with a view to the distribution thereof in
violation of the Securities Act of 1933 or of the State Laws. Buyer understands
that the Purchased Stock have not been registered under the Securities Act of
1933 (the "Act") or any state securities law, by reason of their sale to the
Seller in transactions exempt from registration; and, that the Purchased Stock
must be held by Buyer indefinitely unless a subsequent disposition thereof is
registered under the Act and the state securities laws or is exempt from
registration. Buyer represents and warrants to the Seller that the sale of the
Purchased Stock to it hereunder is exempt from registration under the provisions
of Section 4(2) of the Act. 

5. COVENANTS OF THE BUYER, SELLER AND SHAREHOLDERS.

The Buyer, Seller and Shareholders covenant and agree as
follows throughout the period from the date hereof through and including the
final payment as set forth in Section 1.3(c) above:

5.1 Restrictions. Seller and Shareholders agree that
they shall not do any of the following (except with the prior written consent of
the parties):

(a) Redeem, purchase, repurchase or retire any of the capital
stock of Europlay, or declare or pay any dividends or make any other payments or
distribution upon any of the capital stock of Europlay; 

(b) Make or permit any material change in or cease in whole
or in significant part its present business; 

(c) Sell, lease, transfer or otherwise dispose of all or any
material portion of its assets including, without limitation, rights to patents,
knowhow, intellectual property or other intangible assets or cancel any debts or
claims, except sales of inventory in the ordinary course of business or
immaterial amounts of other intangible personal property not required in the
business;

(d) Make any change in the Articles of Incorporation or
Bylaws of Europlay;

(e) Make any change in the authorized or issued and
outstanding capital stock of Europlay including any changes involving treasury
shares; 

(f) Grant any options or rights to purchase any securities of
Europlay; in addition, Seller agrees that all outstanding options and warrants
to acquire shares of Europlay stock shall have been exercised or cancelled prior
to Closing;

(g) Effect any dissolution, winding up, liquidation or
termination of the business of Europlay.

(h) Enter into any transaction or fail to perform any act
required by Seller, or cause Europlay to enter into any transaction or fail to
perform any act required of Europlay, which could reasonably be expected to
cause any representation or warranty of Seller set forth in Article 3 to be
untrue as of Closing. 

5.2 Notice of Breach. To the extent Seller obtains
actual knowledge that any of the representations or warranties contained in
Article 3 hereof would be incorrect in any material respect were those
representations or warranties made immediately after such knowledge was
obtained, Seller shall notify Buyer in writing promptly of such fact and
exercise reasonable efforts to remedy same to the extent within Seller's
control.

5.3 Access. Seller will permit Buyer, its counsel, its
auditors and its appraisers to inspect and copy all records and documents
relating to the business operations of Europlay that are in Europlay's and
Seller' custody, care or control and shall have access to all places of their
business throughout all regular business hours, provided such inspections do not
unduly disrupt the conduct of business, provided, further, that Buyer shall not
contact Europlay's customers or suppliers without the prior written consent of
Seller, which consent shall not be unreasonably withheld or delayed.

5.4 Authorization from Others. Seller shall use
reasonable efforts to obtain all authorizations, consents and approvals of third
parties or governmental agencies that may be required to permit the consummation
of the transactions contemplated by this Agreement.

5.5 Consummation of Agreement. Seller shall use
reasonable efforts to satisfy all conditions to the Closing that are within
Seller's control to the end that the transactions contemplated by this Agreement
shall be fully carried out. 

5.7 Business Intact; Relationships with Customers and
Suppliers. Seller shall use best efforts to keep intact the business of
Europlay, to keep available its key employees and to maintain the goodwill of
its customers, distributors and suppliers and other persons having business
dealings with it.

5.8 Restrictions on Resale. Seller and Shareholders
acknowledge that MAX is a fully reporting company
under the Securities Act of 1933 ("Securities Act"), is subject to the reporting
requirement of the Securities and Exchange Commission ("Commission")
pursuant to Sections 12, 13, 14 or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and is current in its filings. Max
represents and warrants that the shares of its common stock issued pursuant to
this Agreement are restricted securities under the Securities Act of 1933, as
amended and are subject to restrictions upon transfer. Currently, under Rule 144
of the Securities Act, a non-affiliate (defined as someone who is not an
officer, director or holder of 10% or more of a company's common stock) is
allowed to resell shares after one (1) year, if such a sale is conducted through
a market transaction. Rule 144 is subject to revision by the Commission.
The certificates representing the Shares will contain a restrictive legend
which reads as substantially follows:

    THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
    SECURITIES ACT OF 1933, AS AMENDED, OR THE LAWS OF ANY STATE, AND ARE BEING
    ISSUED PURSUANT TO AN EXEMPTION FROM REGISTRATION PERTAINING TO SUCH
    SECURITIES AND PURSUANT TO A REPRESENTATION BY THE SECURITY HOLDER NAMED
    HEREIN THAT SAID SECURITIES HAVE BEEN ACQUIRED FOR PURPOSES OF INVESTMENT
    AND NOT FOR PURPOSES OF DISTRIBUTION. THESE SECURITIES MAY NOT BE OFFERED,
    SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF REGISTRATION,
    OR THE AVAILABILITY OF AN EXEMPTION FROM SUCH REGISTRATION. THE STOCK
    TRANSFER AGENT HAS BEEN ORDERED TO EFFECTUATE TRANSFERS ONLY IN ACCORDANCE
    WITH THE ABOVE INSTRUCTIONS.

    
    

  

6. FURTHER COVENANTS OF SELLER, SHAREHOLDERS AND
BUYER.

6.1 Regulatory Filings. Each of the parties hereto
will furnish to the other party hereto such necessary information and reasonable
assistance as such other party may reasonably request in connection with its
preparation of necessary filings or submissions to any governmental agency.
Buyer and Seller each agree to timely file any information reports, applications
or notices required to be filed in connection with the transactions contemplated
by this Agreement .

6.2 Consummation of Agreement. Buyer shall use its
reasonable efforts to satisfy all conditions to the Closing that are within its
control to the end that the transaction contemplated by this Agreement shall be
fully carried out.

6.3 Authorization From Others. Buyer shall use its
reasonable efforts to obtain all authorizations, consents and approvals of third
parties or governmental agencies that may be required to permit the consummation
of the transactions contemplated by this Agreement.

7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER TO
CLOSE. 

The obligation of Buyer to acquire the Purchased Stock as
contemplated hereby, and to perform its other obligations hereunder to be
performed on or after the Closing, shall be subject to the fulfillment, on or
prior to the Closing Date, unless otherwise waived in writing by Buyer, of the
following conditions: 

7.1 Representations and Warranties. The
representations and warranties of Seller set forth in Article 3 hereof shall be
true and correct in all material respects on the Closing Date as if made on and
as of such date, and Buyer shall have received a certificate to such effect,
executed by Seller and dated as of the Closing Date, in form satisfactory to
Buyer.

7.2 Performance of Covenants. Seller shall have
performed all covenants and obligations contained in this Agreement to be
performed on or prior to the Closing Date and Buyer shall have received a
certificate to such effect, executed by the Seller and dated as of the Closing
Date, in form satisfactory to Buyer. 

7.3 Threatened or Pending Proceedings. No proceedings
shall have been initiated or threatened by any governmental department,
commission, bureau, board, agency or instrumentality, foreign or domestic, or
any other bona fide third party seeking to enjoin or otherwise restrain or to
obtain an award for damages in connection with the consummation of the
transactions contemplated hereby.

7.4 Material Adverse Change. There shall have been no
material adverse change in the financial condition, results of operations, or
business prospects of Europlay from July 1, 2007, through the Closing Date.
Material adverse change shall mean any event, occurrence, condition or other
change in effect which has resulted or could reasonably expected to be
materially adverse to any of the following: Europlay, its business, its
prospects, its operations or results of operations, the condition (financial or
otherwise) of Europlay or any material asset.

7.5 Issuance of Additional Stock. The Seller agrees
that has disclosed all of the Issued shares of stock of Europlay to the Buyer,
and the Seller agrees that it shall not issue any additional stock of Europlay
after the signing of this agreement without the express written consent of the
Buyer. Any such issuance of stock of Europlay after the Closing Date without
such written consent of the Buyer shall be considered a breach of this Agreement
and result in the distribution of any Purchased Stock held in escrow, and
terminate the obligation of payments of the Buyer as set forth in Sections
1.2(a)-(c) above.

8. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER TO CLOSE.

The obligation of Seller and Shareholders to sell the
Purchased Stock as contemplated hereby, and to perform their other obligations
hereunder to be performed on or after the Closing, shall be subject to the
fulfillment, on or prior to the Closing Date, unless otherwise waived in writing
by the Seller and Shareholders, of the following conditions: 

8.1 Representations and Warranties. The
representations and warranties of Buyer set forth in Article 4 hereof shall be
true and correct in all material respects on the Closing Date as if made on and
as of such date, and the Seller shall have received a certificate to such
effect, executed by the President or any Vice President of Buyer and dated as of
the Closing Date, in form satisfactory to the Seller. 

8.2 Performance of Covenants. Buyer shall have
performed all of its covenants and obligations contained in this Agreement to be
performed on or prior to the Closing Date and the Seller shall have received a
certificate to such effect, executed by the President or any Vice President of
the Buyer and dated as of the Closing Date, in form satisfactory to Seller. 

8.3 Corporate Action. All corporate action necessary
to authorize (i) the execution, delivery and performance by Buyer of this
Agreement and any other agreements or instruments contemplated hereby to which
Buyer is a party and (ii) the consummation of the transactions and performance
of its other obligations contemplated hereby and thereby shall have been duly
and validly taken by Buyer, and the Seller shall have been furnished with copies
of all applicable resolutions adopted by the Board of Directors of Buyer,
certified by the Secretary or Assistant Secretary of Buyer.

8.4 Threatened or Pending Proceedings. No proceedings
shall have been initiated or threatened by any governmental department,
commission, board, bureau, agency or instrumentality, foreign or domestic, or
any other bona fide third party seeking to enjoin or otherwise restrain or to
obtain an award for damages in connection with the consummation of the
transactions contemplated hereby. 

8.5 Delivery of Certificates and Documents to Seller.
The Buyer shall have delivered, or cause to be delivered, to the Seller
certificates as to the legal existence and good standing of Buyer issued by the
State of Delaware and/or such other appropriate official thereof.

8.6 Due Diligence of Buyer. The Buyer covenants to
undertake due diligence with regard to Seller, to be concluded no later than
December 15, 2007, and Seller agrees to make a books and records of Seller
available to Buyer prior to the Closing Date, including, inter alia,
copies of patents, licensees, financial records, contracts, debts, liabilities
and the like. If Buyer completes Its due diligence and Is satisfied with the
information provided by the Seller, Buyer will notify the Seller In writing, and
this condition precedent will be satisfied. If Buyer does not so notify the
Seller, Closing will not occur, and Buyer shall have no further obligations
hereunder. 

9. TERMINATION OF AGREEMENT.

9.1 Termination. At any time prior to the Closing
Date, this Agreement may be terminated (a) by the consent of the Buyer and
Seller, (b) by Seller if there has been a material misrepresentation, breach of
warranty or breach of covenant by Buyer in its representations, warranties and
covenants set forth herein, (c) by Buyer if there has been a material
misrepresentation, breach of warranty or breach of covenant by the Seller in
their representations, warranties and covenants set forth herein, (d) by the
Seller if the conditions stated in Article 8 have not been satisfied at or prior
to the Closing Date or (e) by Buyer if the conditions stated in Article 7 have
not been satisfied at or prior to the Closing Date.

9.2 Effect of Termination. If this Agreement shall be
terminated as above provided, this Agreement shall become null and void and have
no effect all obligations of the parties hereunder shall terminate without
liability of any party to the other; provided however, that nothing in this
Section 9.2 shall prevent any party from seeking or obtaining damages or
appropriate equitable relief for the breach of any representation, warranty or
covenant made by any other party hereto. 

9.3 Right to Proceed. Anything in this Agreement to
the contrary notwithstanding, if any of the conditions specified in Article 7
hereof have not been satisfied at or prior to the Closing, Buyer, having
otherwise satisfied its obligations or met conditions to Closing hereunder,
shall have the right to proceed with the transactions contemplated hereby
without waiving any of its rights hereunder, and if any of the conditions
specified in Article 8 hereof have not been satisfied at or prior to the
Closing, the Seller, having otherwise satisfied their obligations or met
conditions to Closing hereunder, shall have the right to proceed with the
transactions contemplated hereby without waiving any of their rights hereunder.

9.4 Notice of Breach. To the extent Buyer obtains
knowledge before the Closing Date that any of the representations or warranties
contained in Article 4 hereof would be incorrect in any material respect were
those representations or warranties made immediately after such knowledge was
obtained, the Buyer shall notify Seller in writing promptly of such fact and
exercise its reasonable efforts to remedy same to the extent within Buyer's
control. To the extent Seller obtains knowledge before the Closing Date that any
of the representations or warranties contained in Article 3 hereof would be
incorrect in any material respect were those representations or warranties made
immediately after such knowledge was obtained, the Seller shall notify Buyer in
writing promptly of such fact and exercise its reasonable efforts to remedy same
to the extent within Seller's control.

10. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING. 

10.1 Survival of Representations and Warranties. All
representations, warranties, covenants and obligations herein shall be deemed to
have been relied upon by the other party, and shall survive the execution and
delivery of this Agreement for a period of one (1) year from the date of
Closing, except for any covenant or obligation that, by its terms, is to be
performed subsequent to such date.

10.2 Further Assurances. From time to time after the
Closing and without further consideration, the parties will execute and deliver,
or arrange for the execution and delivery of such other instruments of
conveyance and transfer and take such other action or arrange for such other
actions as may reasonably be requested to more effectively complete any of the
transactions provided for in this Agreement or any document annexed hereto.

11. INDEMNIFICATION.

11.1 Indemnification by the Seller. The Seller hereby
agrees to defend, indemnify and hold Buyer, Europlay and their respective
officers, directors, shareholders, employees, agents, attorneys and
representatives, harmless from and against any damages, liabilities, losses and
expenses (including, without limitation, reasonable attorneys' fees) which may
be sustained or suffered by Buyer or Europlay arising out of, based upon, or by
reason of a material breach of any representation or warranty, or a failure to
perform any agreement or covenant made by the Seller in this Agreement.

11.2 Indemnification by the Buyer. The Buyer hereby
agrees to defend, indemnify and hold the Seller and his employees, agents,
attorneys, and representatives, harmless from and against any damages,
liabilities, losses and expenses (including, without limitation, reasonable
attorneys' fees) which may be sustained or suffered by the Seller arising out
of, based upon, or by reason of a material breach of any representation or
warranty, or a failure to perform any agreement or covenant, made by the Buyer
in this Agreement or in any exhibit, schedule, certificate or financial
statement delivered hereunder, or arising out of, based upon, or by reason of
any claim, action or proceeding asserted or instituted growing out of any such
materially breached representations, warranties or covenants.

11.3 Notice; Defense of Claims. Each party to this
Agreement shall give prompt written notice to the other party or parties to this
Agreement under each claim for indemnification hereunder specifying the amount
and nature of the claim, and of any matter which is likely to give rise to an
indemnification claim. Each party to this Agreement has the right to participate
at its own expense in the defense of any such matter or its settlement, or the
indemnified party may direct the indemnifying party to take over the defense of
such matter so long as such defense is expeditious. Failure to give timely
notice of a matter which may give rise to an indemnification claim shall not
affect the rights of the indemnified party to collect such claims from the
indemnifying party so long as such failure to so notify does not materially
adversely affect the indemnifying party's ability to defend such claim against a
third party. No indemnifying party, in the defense of any claim or litigation
shall, except with the consent of an indemnified party, which consent shall not
be unreasonably withheld or delayed, consent to entry of any judgment or enter
into any settlement by which such indemnified party is to be bound and which
judgment or settlement does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation. 

12. NONDISCLOSURE COVENANTS.

12.1 Disclosure of Information. It is understood that
the business of Europlay is of a confidential nature. Prior to the date hereof
Europlay may have revealed and on or after the date hereof Europlay may reveal
to the Seller or Shareholders confidential information concerning Europlay or
any of Europlay's affiliates or subsidiaries which, if known to competitors
thereof, would damage Europlay or its said affiliates or subsidiaries. The
Seller and Shareholders each agree that they will not knowingly divulge or
appropriate to their own use, or to the use of any third party, any secret or
confidential information or knowledge obtained by them concerning Europlay or
its subsidiaries or affiliates, including, but not limited to, information
pertaining to methods, processes, designs, equipment, catalogs, customer lists
and operating procedures. The restrictions contained in this paragraph against
disclosing or using confidential information shall not apply to information
which is in the public domain other than by reason of Seller's breach of this
Agreement or to information previously disclosed by Seller or Europlay to
prospective purchasers of Europlay, which prospective purchasers have executed
and delivered nondisclosure agreements to Europlay. Seller represents that such
confidentiality agreements are contracts between Europlay and such prospective
buyers and that they provide in pertinent part for inter alia: a
prohibition on the prospective Buyer's use or disclosure of such confidential
information, a return (except for one certain prospective buyer) of the
confidential material at Europlay's request, and a prohibition on solicitation
of Europlay's employees for a period of two (2) years after the date of
execution of the confidentiality agreement.

13. MISCELLANEOUS.

13.1 Taxes. Any taxes in the nature of sales or
transfer tax and any stock transfer tax, payable on the sale or transfer of all
or any portion of the Purchased Stock or the consummation of any other
transaction contemplated hereby shall be paid by Seller.

13.2 Assignability. Neither this Agreement nor any
rights or obligations hereunder, are assignable by Seller, Shareholders or
Europlay. The rights of Buyer under this Agreement are assignable in part or
wholly to any Europlay controlled by, controlling or under common control with
Buyer, and any assignee of Buyer shall succeed to and be possessed of the rights
of Buyer hereunder to the extent of the assignment made; provided, however, that
and such assignment by Buyer shall not relieve Buyer of its obligations
hereunder. 

13.4 Section Headings. The Section and paragraph
headings in this Agreement are for convenience of reference only and shall not
be deemed to alter or affect provisions thereof. 13.5 Waiver. Neither the
failure nor any delay on the part of any party hereto in exercising any right,
power or remedy hereunder shall operate as a waiver thereof, or of any other
right, power or remedy or preclude any further or other exercise thereof, or the
exercise of any other right, power or remedy.

13.6 Expenses. Buyer, Seller and Shareholders shall
pay the fees and expenses of their respective accountants and legal counsel
incurred in connection with the transactions contemplated by this Agreement.
Buyer acknowledges that it has paid certain expenses for the financial
statements and for corporate legal work during the period of the negotiations
for this Agreement. Seller acknowledges that legal fees incurred by the Seller
or the Shareholders in connection with this Purchase and Sale Agreement are the
personal expenses of individual Shareholder. 

13.7 Notices. Any notices required or permitted to be
given hereunder shall be given in writing and delivered in person or sent
certified mail, postage prepaid, return receipt requested, to the respective
parties at their addresses following the signatures at the end of this Agreement
or at such other addresses as may hereinafter be designated by such party in
writing to other parties.

13.8 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware
applicable to agreements made and to be performed in that state, without regard
to any of its principles of conflicts of laws or other laws that would result in
the application of the laws of another jurisdiction. This Agreement shall be
construed and interpreted without regard to any presumption against the party
causing this Agreement to be drafted. Each of the parties unconditionally and
irrevocably consents to the exclusive jurisdiction of the courts of the State of
New York and the Federal district court for the Southern District of New York
with respect to any suit, action or proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby, and each of the parties
hereby unconditionally and irrevocably waives any objection to venue in any such
court.

13.9 Entire Agreement. This Agreement contains the
entire agreement between the parties hereto with respect to the transaction
contemplated herein and shall not be modified or amended except by an instrument
in writing signed by the parties hereto. 

13.10 Validity. The invalidity or unenforceability of
any particular provision of this Agreement shall not affect any other provisions
hereof, and this Agreement shall be construed in all other respects as if such
invalid and unenforceable provisions were omitted. 

13.11 Intentionally Omitted. 

13.12 Counterparts. This Agreement may be signed in
any number of counterparts each of which shall be deemed to be an original and
all of which together shall constitute but one and the same instrument.

IN WITNESS WHEREOF, we have set our hands and seals as of the
date first above written. 

MAX ENTERTAINMENT HOLDINGS, INC.

By: Daniel Killian

Authorized signatory: /s/ Daniel Killian

EUROPLAY, LTD.:

Printed Name: ANDREAS CHRISTENSEN

Signature: /s/ Andreas Christensen

SHAREHOLDER:

Printed Name: ANDREAS CHRISTENSEN

Passport No. LO118993

Signature: /s/ Andreas Christensen

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