Document:

Exhibit 10.4

 

FORM OF CONTRACT FOR DESIGN, BUILDING

SUPERVISION, REPRESENTATION, PROCUREMENT

OF MACHINES AND SUPPLIES, AND TURN-KEY

DELIVERY OF A 3,500 DWT PRODUCT TANKER

WITH IOTA CORPORATION

 

 

FORM OF

CONTRACT

 

FOR

 

DESIGN, BUILDING SUPERVISION, REPRESENTATION,

 

PROCUREMENT OF

 

MACHINERIES AND SUPPLIES,

 

AND TURN-KEY DELIVERY OF

 

A 3,500 DWT PRODUCT TANKER

 

(HULL NO. DN-3500-    )

 

TO BE BUILT AT FUJIAN SOUTH EAST SHIPYARD,

FUZHOU, REPUBLIC OF CHINA

 

 

BETWEEN

 

 

AND

IOTA CORPORATION

 

 

1

 

CONTRACT

FOR

DESIGN, BUILDING SUPERVISION, REPRESENTATION, PROCUREMENT OF MACHINERIES
AND SUPPLIES, AND TURN-KEY DELIVERY

OF

A 3,500 DWT PRODUCT TANKER

TO BE BUILT AT FUJIAN SOUTH EAST SHIPYARD, REPUBLIC OF CHINA

(the “BUILDER”)

 

THIS CONTRACT, made this                                               by
and between
                                                              
  , having its registered offices at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro,
Marshall Islands MH, for this purpose represented by Mr. Dimitrios
Koutsoucos (hereinafter called the “OWNER”), the party of the first part, and
IOTA CORPORATION having its registered office at 80 Broad Steet, Monrovia,
Liberia, for this purpose represented by Dr. Gregory G. Parissis
(hereinafter called “IOTA”), the party of the second part.

 

WITNESSETH THAT

 

WHEREAS, the OWNER requested IOTA to provide the Design, Building
Supervision, Representation and Turn-Key Delivery (hereinafter called the “SERVICES”),
as well as to provide for the Procurement of Machineries and Supplies
(hereinafter called the “OWNER’S SUPPLIES”), for the construction of one 3,500
DWT product tanker (hereinafter called the “VESSEL”) to be built for the OWNER
by Fujian South East Shipyard, Fuzhou, Republic of China (hereinafter called
the “BUILDER”) and;

 

WHEREAS, IOTA offered to undertake the SERVICES and provide the OWNER’S
SUPPLIES subject to the terms and conditions as stipulated herein and;

 

WHEREAS, the OWNER accepted the offer of IOTA upon
such terms and conditions and;

 

NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the both parties agree as follows:

 

 

2

 

ARTICLE I: SCOPE OF SERVICES AND OWNER’S SUPPLIES OF IOTA

 

1.     DESIGN

 

a.               IOTA is assisting and guiding OWNER in
developing a conceptual design of the VESSELS to suit their operational
requirements.

 

b.              IOTA is developing together with the BUILDER’S
Designers a full SHIPBUILDING SPECIFICATION (Hull, Machinery, Electric,
Electronic, Piping) as well as:

 

(i)             The Shipbuilding Process Standard of the
BUILDER.

 

(ii)          The Quality Control, the Safety Procedures and
the Inspection Standard of the BUILDER.

 

(iii)       The BUILDER’S Terms and Conditions applicable to
these constructions.

 

(iv) The intended degree of Subcontracting.

 

(v)  The intended use of Makers for Machineries, Pumps,
Auxiliaries, Outfitting etc.

 

c.               IOTA will present the OWNER with the following
finalised drawings:

(i)    General Arrangement

 

(ii)          Midship Section

 

(iii)       Piping Arrangement

 

(iv)      List of Makers

 

which will be used in negotiating with the BUILDER the SHIPBUILDING CONTRACT.

 

d.              IOTA will participate in the meetings with
BUILDER and OWNER in the negotiations leading up to the signing of the
SHIPBUILDING CONTRACT.

 

e.               After the SHIPBUILDING CONTRACT is signed, IOTA
will embark upon the second Design phase which constitutes of about 100
drawings and plans, produced by the BUILDER and checked, altered, rechecked by
IOTA and approved by CLASS. Concurrently the choice of Makers/Subcontractors
will be narrowed and the accepted Makers will commence sending their
drawings/plans to IOTA for approval.

 

f.                 The third Design phase comprises of
about 1000 construction drawings which are produced by the BUILDER and, prior
to implementation, are checked by IOTA.

 

g.              During VESSEL’S construction there is a
constant flow of partial drawing amendments to overcome inevitable small
errors, omissions, miss-cuttings of materials. All pass through IOTA’S scrutiny,
approval.

 

 

3

 

2.     BUILDING
SUPERVISION

 

a.               IOTA will operate a SITE OFFICE at the BUILDER’S
premises during the construction of the VESSEL which will consist of four
engineers including the Site Manager, i.e., one Hull Inspector, one Machinery
Inspector, one Paints Inspector and the Site Manager himself. These will be
employees of IOTA and under the overall direction of Dr. G. G. Parissis.
They will be considered by the BUILDER as Owner’s Supervisors (hereinafter
called the “SUPERVISORS”). Dr. G. G. Parissis will be considered by the
BUILDER as “OWNER’S REPRESENTATIVE”.

 

b.              The SUPERVISORS shall supervise, throughout the
construction work of the hull, machinery and equipment of the VESSEL so as to
confirm that the material, construction, workmanship and performance of the
VESSEL and the machinery and equipment thereof conform to the requirements of
the SHIPBUILDING CONTRACT, the Specifications and drawings approved by IOTA on
behalf of OWNER.

 

c.               The Supervising Services to be performed by the
SUPERVISORS at the BUILDER shall be stipulated as follows:

 

(1)          to inspect the materials, machinery and equipment before installation on
the VESSEL, as to quality, quantity and storage conditions at the BUILDER,

 

(2)          to inspect the assembling work of the hull structure and the fitting
work of the machinery and equipment,

 

(3)          to inspect the surface preparation, painting and coating works,

 

(4)          to witness tests and trials including sea trial, as agreed between IOTA
and the BUILDER,

 

(5)          to check the spare parts and inventory,

 

(6)          to attend the surveys of the Classification Society,

 

(7)          to ensure compliance with all statutory requirements as specified, and
those that may come into effect during construction,

 

(8)          to check and expedite the progress of construction work of the VESSEL so
that the VESSEL shall be completed and delivered to the OWNER in accordance
with the construction schedule as agreed upon between IOTA and the
BUILDER, and

 

(9)          to keep detailed records of all acts and things done by the SUPERVISORS
in relation to the provision of all the aforesaid services and to have this
information available for OWNER’S scrutiny whenever requested. In the event of
any important deficiencies being noted by the SUPERVISORS same to be communicated
forthwith to the OWNER.

 

 

4

 

d.              The SUPERVISORS shall attend, on the shop tests
of major items of machinery such as main engines, generator engines and deck
cranes, which to be carried out at other than BUILDER’S premises and shall
report accordingly.

 

e.               The SUPERVISORS under instruction of OWNER’S
REPRESENTATIVE, shall have the right for giving the decision of acceptance or
rejection of such materials, workmanship or tests as stipulated in the above
Paragraph to the BUILDER due to the fact that the materials, workmanship or
tests are deemed to conform or not to conform to the provisions of the
Shipbuilding Contract, the Specifications and the approved drawings. In case of
important items, or in case that the SUPERVISORS have any doubt/different opinion
between the SUPERVISORS and the BUILDER on conformity of the materials, workmanship
or test with the provisions of the Shipbuilding Contracts, the Specifications
or the approved drawings, the OWNER’S REPRESENTATIVE shall take up these with
the BUILDER accordingly. Also, during the major shop trials and/or sea trials
that will be also attended by OWNER’S REPRESENTATIVE the SUPERVISORS shall consult
with the OWNER’S REPRESENTATIVE before any action is taken or discussions are
held by the SUPERVISORS with the BUILDER.

 

3.     REPRESENTATION

 

During the period of validity of this CONTRACT, that is from signing to the successful delivery of the
VESSEL and through to the Makers’ guarantee period given for the Machineries
and Equipment procured by IOTA as per ARTICLE 1.4 below, IOTA will liaise
closely with:

 

(i)             The Classification Society

 

(ii)          International Regulatory Bodies (IMO, OCIMF,
ILO, etc.)

 

(iii)       National Regulatory Bodies (Flag State, Paris
MOU, USCG, etc.)

 

(iv)      Professional Societies of which Dr. G.
Parissis is active member such as

 

•                  The Baltic Exchange (Director)

 

•                  The Greek Shipping Cooperation Committee (Board
Member)

 

•                  Lloyd’s Register of Shipping (Central Technical
Committee Member)

 

•                  The Society of Naval Architects & Marine Engineers (Member)

 

so that the VESSELS are and remain technically up to date and comply
with all Class, National and International regulations.

 

 

5

 

4.              PROCUREMENT OF MACHINERIES AND
SUPPLIES

 

a.               It is recognised that the VESSEL will be
employed not only for worldwide service as a Product Carrier, but also as a
Bunkering Tanker in prime bunkering areas where rules are exacting and
requirements specialised. As such, a number of specialist equipment need to be
installed on board the VESSEL which are not foreseen in the Shipbuilding
SPECIFICATION.

 

b.              In view of the VESSEL being built to newest Class requirements,
which do not require any more the carriage of important spare parts, it is
agreed between OWNER and IOTA that IOTA, in its sole discretion, will provide
the VESSEL with a comprehensive set of spare parts for all Machinery and
fittings as necessary.

 

c.               Additionally IOTA will undertake the choice,
purchasing, transportation, insurance, installation on board as necessary and
outfitting of the following OWNER SUPPLIES equipment to EU or equivalent
standards:

 

i.                  An electronic Blending Machine for blending a
light with a heavy fuel in any ratio and of capacity commensurate to the fuel
delivery capacity of one of the main cargo pumps. Piping and automation for the
above.

 

ii.               Five in number electronic Flow meters to be
installed at the outlet of each of the five main cargo lines, each with
throughput capacity of one of the main cargo pumps. Piping and automation for
the above.

 

iii.            An intrinsically safe deck air compressor to be
used both for works on board and as mobile air power source for
incapacitated/starting-from-cold vessels.

 

iv.           Similarly, an intrinsically safe deck electric generator used to drive
the above or used independently for works on board and as mobile power source
for incapacitated/starting from cold vessels.

 

v.              5x40 meter cargo delivery flexible hoses with
reducers of various sizes and universal couplings for simultaneous delivery of
three grades of bunkering fuel.

 

vi.           16x “TIPTO-8” by 170 meter ropes for mooring and attaching to bunkered vessels.

 

vii.        4xYokohama fenders of 1.5 meters diameter.

 

d.              IOTA will procure, buy and supply C.I.F.
BUILDER’s premises all other OWNER SUPPLIES items as itemised in the
SPECIFICATION, Section 113. These will be

 

6

 

first-class
Marine quality with Certificates and EU or equivalent standard, as applicable.
For clarity and to avoid possible duplication, they are listed below:

 

1)              All hoses, etc. in excess of Class requirements
– already covered in c.v. above.

 

2)              Steel wires and ropes in excess of those
required by Class.

 

3)              Deck, engine and cabin stores – calculated for
six months operation –.

 

4)              All bedding (pillows, blankets, sheets, covers,
etc for 15 beds plus one full set of spares).

 

5)              All cook’s
and steward’s utensils (crockery, cutlery, silverware, china, glasses, pots, pans
etc.) calculated for 30 persons.

 

6)              All chandlery (soaps, detergents, toilet paper,
food and other consumables – calculated for 15 persons for 3 months.

 

7)              All charts, sailing books and flags.

 

8)              All other consumable stores (deck, engine,
electrical) – calculated for 6 months.

 

9)              All medicine and medical equipment – medicine
per rule requirements for 15 person complement.

 

10)   All air tools and their hoses.

 

11)        Personal calculators (4 pcs only).

 

12)        Recreational equipment – 4 T.V. Sets, 4 Music, Audio/Video stations, one
omni-directional T.V./Radio antenna.

 

13)        Typewriter and other office machines (3 PCs, 2 Printers, 1 Photocopier).

 

14)        Hand tools other than specified in Specification (see item s. below).

 

15)        Broadcasting radio receivers and stereophony (covered by k. above).

 

16)        Electric coffee grinder, electric cutting machine, juice maker, toaster
x2, small domestic mixer x2, electric water kettle x3, decimal balance for
galley, electric dryer and electric ironing machine for laundry room.

 

17)        Paintings and pictures (gratis).

 

18)        All T.V. sets, radios, stereo sets, DVD sets (covered by k. above).

 

19)        Spare parts, tools, navigation equipment, flags etc. (also see item g. above).
Navigation equipment will supply as per SOLAS and Navigation rule requirements.
Spare parts covered in 3.b above. Standard tools will be supplied to equip
Engine Work Shop, Electrician’s Shop, Carpenter Shop, Paint Shop.

 

20)        Water, fuel oil, lubricants and grease etc. covered by 5.C below.

 

7

 

e      IOTA
will establish on board the VESSEL a fully equipped mini- laboratory for the
analysis of samples of the various grades of fuels that the VESSEL supplies to
its Customers.

 

f.                 IOTA will supply the VESSEL with the following
antipollution equipment:

 

1. Oil skimmer with diesel driven “Desmi” engine.

 

2. Open sea inflatable oil booms (300 meters)

 

3. Spraying system for oil spill dispersants

 

4. 3rd Generation oil spill dispersants (500 litters)

 

g.      IOTA will
also supply a Telescopic Crane with basket, which to be fitted on board the VESSEL.

 

5.              TURN-KEY DELIVERY

 

In realization of the fact that OWNER will rely solely upon IOTA for all
aspects of Design, Supervision, Supply and Delivery of the VESSEL, IOTA
undertakes to offer a “Turn-key” delivery of the VESSEL which consists of the
following:

 

A.              Training of OWNER’S officers and crew who take
delivery of the VESSEL, provided OWNER makes own arrangements to bring its personnel
at the BUILDER’S premises at intervals as recommended by IOTA. The said officers
and crew will at all times be housed, victualed, paid, insured and under the
responsibility of the OWNER.

 

B.                IOTA will undertake organization and scheduling
of the Delivery procedures and Registration of the VESSEL. In this respect it
will liaise with OWNER, BUILDER, Class, OWNER’S Bankers, OWNER’S Lawers,
BUILDER’S Bankers, Chinese Customs and Port Authorities and Flag State
Authorities.

 

C.                IOTA will organize the supply, measurement and
recording of the Lubricating Oils, the Hydraulic Oils and the Fuel Oils
received, used, remaining and re-supplied to the VESSEL during construction,
sea trials and up to delivery. It is understood that these oils are supplied by
the OWNER at OWNER’S cost and responsibility, Similarly Water and Gases will be
supplied by OWNER and overseen by IOTA.

 

ARTICLE II: DUTIES AND OBLIGATIONS OF IOTA

 

1.               IOTA shall perform the SERVICES and provide the
OWNER’S SUPPLIES with due care and diligence and shall make every effort so
that the VESSEL will be in every respect in conformity with the Shipbuilding
Contract, the Specifications, the approved drawings and all National and
International rules and regulations and that the VESSEL shall be completed
and delivered to the OWNERS in accordance with this

 

8

 

CONTRACT and the construction schedule agreed upon between the
OWNER and the BUILDER. In performing these IOTA shall ensure that at all times
during the period of this CONTRACT,

 

(a)          shall faithfully and diligently perform those duties and exercise such
powers consistent with them which are from time to time necessary in connection
with the provision of the SERVICES and OWNER’S SUPPLIES;

 

(b)         shall follow up all lawful and reasonable directions of the OWNER;

 

(c)          shall use its best endeavours to promote the interests of the OWNER;

 

(d)         shall liaise and consult with OWNER whenever so requested by the OWNER.

 

2.               IOTA shall not assign this CONTRACT to any
third party without prior consent of the OWNER. However, IOTA shall be free to
perform the SERVICES and provide the OWNER’S SUPPLIES obtaining cooperation
from outside professionals or using Subcontractors at its own risk and cost and
on its own responsibility.

 

3.               IOTA shall not be responsible for any temporary
suspension or delay of the SERVICES or any insufficient or improper SERVICES
due to failure on the part of the OWNER in execution of any of its duties as
hereinafter stipulated.

 

4.               IOTA shall not be liable for any loss, damage
or expense whatever in any performance made by IOTA or its Agents so far as
compliance with the provisions of this CONTRACT has been maintained.

 

5.               Notwithstanding Paragraph 4 in this Article,
any defect which is verified by the authorized third party as being caused due
to defective SERVICES on the part of IOTA or its Agents is discovered, in such
event. IOTA shall compensate to the respective OWNERS the losses arising out of
such act by making good such defect or by refunding the amount decided by the
negotiation between the both parties but limited within the contractual price
specified in Article IV below.

 

6.               IOTA shall bear and pay all taxes and duties,
if any, in connection with the execution and/or the performance of the SERVICES
or the provision of OWNER’S SUPPLIES.

 

9

 

7.               IOTA shall not disclose any contents of this
CONTRACT and any information given by the OWNER for the execution of this
CONTRACT to any third party without prior consent of the OWNER.

 

ARTICLE III: DUTIES AND RESPONSIBILITY OF THE
OWNER

 

1.               The OWNER shall timely give IOTA all necessary documents,
requirements, information and instructions without any charge for their proper
execution of the SERVICES or the provision of OWNER’S SUPPLIES.

 

2.               In particular, the OWNER shall give a notice,
approval or comment, if it is requested by IOTA on all documents and verbal
questions confirmed by e-mail or telefax or other writing within ten (10) working
days after such documents and questions are received by the OWNER, or the
shorter period when a quick response is requested by the BUILDER.

 

3.               If a question or a dispute arises between IOTA
and the BUILDER with respect to the interpretation of the shipbuilding
Contract, the Specifications and the approved drawings, IOTA shall promptly
notify this to the OWNERS in writing, obtain OWNER’S consent and then IOTA
shall proceed to solve such question or dispute through a direct negotiation
with the BUILDER and shall promptly advise in writing the OWNER of the results
of the solution.

 

4.               If a question or a dispute arises between IOTA
and any of its Suppliers with respect to quality or condition of items supplied
to IOTA to be delivered or fitted on board the VESSEL, IOTA shall promptly
notify this to the OWNER in writing, obtain OWNER’S consent and then IOTA shall
proceed to solve such question or dispute through a direct negotiation with the
Supplier and shall promptly advise in writing the Owners of the results of the
solution.

 

5.               The OWNER shall pay the fees and the expenses
for the SERVICES and the cost of OWNER’S SUPPLIES to IOTA, as stipulated in Article 4
below.

 

6.               The OWNER shall notify the BUILDER in writing
that the OWNER have entrusted IOTA with the design and the supervision of the
construction work of the VESSEL

 

10

 

and that Dr. Gregory G. Parissis is the appointed OWNER’S
REPRESENTATIVE whilst the IOTA Site Office personnel shall act as the OWNER’S
SUPERVISORS with respect to supervising of the construction of the VESSEL.

 

7.               The OWNER shall not disclose any content of
this CONTRACT to any third party without prior consent of IOTA.

 

ARTICLE IV: REMUNERATION FOR SERVICES AND PROCUREMENT OF OWNER’S
SUPPLIES

 

1.               The OWNER shall pay to IOTA as a lump sum and
all-inclusive remuneration (in respect of fees, costs and expenses whatsoever)
the amount of U.S. Dollars ONE MILLION FIVE HUNDRED AND FIFTY THOUSAND (US$ 1,550,000.-)
per VESSEL in the manner as provided hereunder.

 

2.               Above mentioned fee shall he remitted to IOTA
by the telegraphic transfer, against the invoice from IOTA according to the
following schedule:

 

(a)          5% of the amount, that is Seventy Seven Thousand and Five Hundred U.S. Dollars
(US$ 77,500.-) shall be paid within 5 banking days after the date on which the
SHIPBUILDING CONTRACT of the VESSEL shall be come effective.

 

(b)         10% of the amount, that is One Hundred Fifty Five Thousand U.S. Dollars (US$155,000.-)
shall be paid within 5 banking days after the date of commencement of steel
cutting for the VESSEL.

 

(c)          40% of the amount, that is Six Hundred Twenty Thousand U.S. Dollars (US$
620,000.-) shall be paid within 5 banking
days after the date of launching of the VESSEL.

 

(d)         45% of the amount, that is Six Hundred Ninety Seven Thousand and Five
Hundred U.S. Dollars (US$ 697,500.-) shall be paid at the date of delivery of
the VESSEL with the same stipulations/provisos for payment as those covering the
SHIPBUILDING CONTRACT of the VESSEL.

 

3.               If the delivery of the VESSEL is delayed more
than fifteen (15) days beyond the scheduled delivery date being fixed by the
SHIPBUILDING CONTRACT due to any reasons excluding those provided in ARTICLE V
below, in such event, the OWNER shall pay to IOTA by telegraphic transfer,
against the invoice from IOTA, within five (5) banking days, the amount of
Fifteen Thousand US Dollars (US$ 15,000.-) per

 

11

 

calendar month and pro-rata for a part of a calendar month for the delay
thereafter beginning at midnight of the fifteenth (15th) day after
the scheduled delivery date.

 

4.               Not withstand the above, if the total scope of
OWNER’S SUPPLIES ( that is excluding SERVICES as described in sections entitled
DESIGN, BUILDING SUPERVISION and TURN KEY DELIVERY which are fixed at Three
Hundred Fifty Thousand U.S. Dollars (US$ 350,000.-)), exceeds in cost or is
less by more than 5% of the allocated figure of One Million Two Hundred
Thousand U.S. Dollars (US$ 1,200,000.-), (that is with a margin US$ 60,000.-
plus or minus), then upon production of relevant evidence, IOTA and OWNER will
settle the difference with an extra or credit Invoice concurrent with the
Delivery instalment.

 

5.               The cost of OWNER’S SUPPLIES excluding SERVICES
is defined as:

 

•                  Cost of items in ARTICLE 1.4

 

•                  Plus 15% on purchase price as Handling Fee,
also covering transportation CIF BUILDER’S premises and INSURANCE.

 

Reasons for variation to this cost are:

 

•                  Change to the number or scope of supply

 

•                  Change of prices from those budgeted.

 

•                  Change of exchange rate versus U.S. Dollar.

 

ARTICLE V. FORCE MAJEURE

 

1.               If the execution of the SHIPBUILDING CONTRACT
is interfered with for any length of time, by Force Majeure as specified in the
SHIPBUILDING CONTRACT which are beyond the control of either party, neither
party shall be responsible for non-execution of this CONTRACT until all
necessary conditions for the execution of the SHIPBUILDING CONTRACT have been
restored.

 

2.               In case the execution of the SHIPBUILDING
CONTRACT is interfered with by any of the causes as stipulated in the Paragraph
1 above, either party shall promptly notify the other in writing of the date of
occurrence, of the detail of the cause and the period of time anticipated for
suspension of the execution of this CONTRACT. Likewise, when all necessary
conditions for execution of the SHIPBUILDING CONTRACT

 

12

 

have been restored, the party shall promptly notify the other in writing
of the date of restoration of the above-mentioned conditions.

 

3.               If either party considers it is unable to
continue the CONTRACT due to occurrence of any of the Force Majeure as
stipulated in Paragraph 1 above, this CONTRACT may be terminated upon agreement
on the conditions for termination of the CONTRACT between the both parties.

 

4.               If in the procurement of OWNER’S SUPPLIES, a supplier
of Machinery or Equipment falls in a state of Force Majeure, then IOTA can
legitimately suspend the execution of that part of the Supplies influenced by
the said Force Majeure, until such time as conditions have been restored.

 

ARTICLE VI: RESCISSION AND TERMINATION OF CONTRACT

 

1.               In the event that either of the parties hereto
shall exercise his right of rescission of this CONTRACT for the appropriate and
sufficient reason under this CONTRACT, the party shall notify the other thereof
in writing and this CONTRACT shall be terminated as of the date notice thereof
is received by the other party.

 

2.               IOTA has the right to declare termination of
this CONTRACT by means of written notice to the OWNER in case that the fee for
the SERVICES as stipulated in ARTICLE IV above is not paid within the
specified time limits.

 

3.               The OWNER may declare termination of this
CONTRACT by means of written notice to IOTA whenever IOTA does not execute the
SERVICES in accordance with the provisions of this CONTRACT.

 

4.               Upon termination of this CONTRACT, excepting
the case which falls under the Paragraph 3 above, IOTA has the right to receive
remuneration for covering for the SERVICES performed and the OWNER’S SUPPLIES procured
under this CONTRACT up to the termination and the OWNERS also have the right to
request to

 

13

 

refund the balance of fees for the SERVICES or OWNER’S SUPPLIES which
was over-paid by the OWNER in advance.

 

5.               Upon termination of this CONTRACT, all
obligations, duties and liabilities of each of the parties hereto to the other
under this CONTRACT shall be forthwith completely discharged as if this
CONTRACT has never been entered into force at all, except those occurred up to
the time of termination.

 

ARTICLE VII: QUESTION, DISPUTE AND CLAIM

 

Any matters not provided with in this CONTRACT shall be decided by the
mutual consultation between the both parties.

 

Any dispute or claim arising out of, or relating to this CONTRACT or
breach thereof, shall be amicably settled between the both parties.

 

Failing a settlement, the dispute or claim shall be settled by
arbitration in London in accordance with the Rules of the London Maritime
Arbitration Board. The award shall be the final and binding upon both parties.

 

ARTICLE VIII; APPLICABLE LAW

 

The formation, validity, construction and the execution of this CONTRACT
shall be governed by the English Law.

 

ARTICLE IX: TERMS OF VALIDITY

 

This CONTRACT shall come into force from the date of signing by the both
parties and terminate automatically when the SERVICES to be furnished by IOTA
to the OWNER as stipulated herein and responsibility of the OWNER as stipulated
in Article III have been completed or when the termination was agreed,
confirmed or allowed pursuant to Article VI in the CONTRACT.

 

14

 

ARTICLE X: LANGUAGE, UNIT AND CURRENCY

 

ARTICLE XI: AMENDMENT OF CONTRACT

 

ARTICLE XII: ADDRESS FOR CORRESPONDENCE

 

All correspondence to be made between the OWNER and IOTA in connection
with the execution of this CONTRACT shall be addressed as follows:

 

 

	
  To
  OWNERS

  	
  :

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Telephone

  	
  :

  	
   

  
	
  Telefax

  	
  :

  	
   

  
	
  E-mail

  	
  :

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  To
  IOTA

  	
  :

  	
  IOTA
  CORPORATION

  
	
   

  	
  :

  	
  c/o
  PEARL CARRIERS LIMITED

  
	
   

  	
  :

  	
  123
  Aldersgate Street, London EC1A 4JQ, UK

  
	
   

  	
   

  	
   

  
	
  Attention

  	
  :

  	
  Dr. Gregory
  G. Parissis

  
	
   

  	
   

  	
   

  
	
  Telefax

  	
  :

  	
  0044-20-7608
  2512

  
	
  E-mail

  	
  :

  	
  gparissis@tiscali.
  co.uk

  

 

 

15

 

IN WITNESS THEREOF, the both parties hereto have caused this Contract to
be executed by their representatives as of the date first above written.

 

 

	
   

  	
     For and on behalf of

  	
   

  	
     For and on behalf of

  IOTA CORPORATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Dimitrios
  Koutsoucos

  	
   

  	
  Dr. Gregory
  G. Parissis

  	
   

  
	
   

  	
  Authorised
  Signatory

  	
   

  	
  Authorised
  Signatory

  	
   

  
							

 

16Exhibit 10.5

 

OPTION
AGREEMENT, DATED MARCH 31, 2005, BY

AND
BETWEEN AEGEAN BUNKERING SERVICES

INC. AND
FUJIAN SOUTHEAST SHIPYARD, AS

AMENDED

 

 

OPTION
AGREEMENT

 

This OPTION AGREEMENT (“Agreement”) is made on the 31st
day of March 2005 by and between:

 

Aegean Bunkering Services Inc. a corporation organized
and existing under the Laws of Greece, having its registered office at 42,
Hadjikyriakou Avenue, Piraeus 185 38-Greece or its nominee, (hereinafter called
the “BUYER”); 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, China, and 

 

Fujian Shipbuilding
Industry Group Corporation, a corporation organized and existing under the Laws
of the People’s Republic of China, having its registered office at 27 Qunzhong
Road, Fuzhou, Fujian Province, China (hereinafter collectively called the “SELLER”).

 

In consideration of ten
Shipbuilding Contracts, each dated 6th of Feb 2005, each as
respectively amended by virtue of Addendum No.1 dated 31st March 2005
and entered into between the BUYER and the SELLER for ten (10) firm Oil Product
Tankers of 3800DWT, (having Hull Numbers 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, DN-3500-10) and the
payment of USD 1 by the BUYER to the SELLER and other good valuable
consideration, the parties hereto agree five optional vessels as follows:

 

1.              Specification

 

The vessels will be built
by the Seller based on the contract specification and any amendments thereto in
respect of the 3800dwt Product Oil Tankers as agreed by virtue of the
Shipbuilding Contracts as amended.

 

2.              Price

 

United States Dollars Six
Millions Nine Hundred Fifty Thousand only (USD 6,950,000) for each vessel.

 

Quantity

Five (5) Vessels

 

 

Option Date

 

The BUYER shall exercise
its right and declare the option to purchase the optional vessels by sending a fax
to the SELLER (to the fax number referred to in Article 17 of each
Contract) on or before the launching of the first of the ten firm product oil
tankers of 3800dwt (being DN-3500-1). The SELLER and the BUYER undertake to
sign a New Buildings Contract for each optional vessel (substantially on the
same terms as each Contract) within thirty (30) days from the date on which
notice of the exercise of the option is given to the SELLER.

 

5.              Terms
of payment

 

The Contract Price for
each optional vessel shall he paid in the following way:

5% upon effectiveness of
the contract

5% with 6 months after
effectiveness of the contract

15% upon steel-cutting

15% upon keel-laying

15% upon launching

45% upon delivery

 

6.              Refund
Guarantee

 

The Seller shall provide
the Buyer with a separate Letter of Guarantee for each of the 1st, 2nd,
3rd and the 4th installments payable under each
Shipbuilding Contract issued by the Seller’s bank (being a bank acceptable to
the BUYER in its discretion) securing the Seller’s obligation for refunding to
the Buyer all installments received by the Seller through the Seller’s bank, if
and when any such installments shall become refundable to the Buyer in
accordance with the terms of the Shipbuilding Contract.

 

7.              Time
of Delivery

 

1# vessel
will be delivered July 31, 2008

2# and 3# vessel will be
delivered November 30, 2008

4# and 5# vessel will be
delivered April 30, 2009

 

8.              Place
of Delivery

Fujian
Southeast shipyard, Fujian, China.

 

Contract
Terms and Conditions

 

 

Form and
substance of the Shipbuilding Contract of the Options shall be the same as
those agreed for the Firm Vessel with logical amendments.

 

10.          Governing Law

 

This Agreement
shall be governed by, and construed in accordance with English Law. Any dispute
under this Agreement shall be referred to arbitration in London and the
provisions of Article 13 of each Contract shall apply (mutatis mutandis)
to this Agreement.

 

11.          The Option Agreement dated 6th
February 2005 and entered into between the parties hereto is hereby
cancelled and replaced by this Agreement.

 

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

 

	
   

  	
  [SEAL]

  
	
  For and on behalf of

  	
  For and on behalf of

  
	
  Aegean Bunkering
  Services Inc.

  	
  Fujan Southeast
  Shipyard

  
	
   

  	
   

  
	
     /s/
  [ILLEGIBLE]

  	
   

  	
      /s/
  [ILLEGIBLE]

  	
   

  
	
  Name:

  	
  [ILLEGIBLE]

  	
   

  	
  Name:

  	
  [ILLEGIBLE]

  	
   

  
	
  Title:

  	
  President/Director

  	
   

  	
  Title

  	
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
  For and on behalf of

  
	
   

  	
  Fujian Shipbuilding
  Industry

  
	
   

  	
  Group Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ LIN FEN FEI

  	
   

  	
   

  
	
   

  	
  Name:

  	
  LIN FEN FEI

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Deputy General Manager

  	
   

  
								

 

 

Addendum No.1

 

to OPTION AGREEMENT

 

With reference to the OPTION AGREEMENT dated 31st March 2005
by and between

 

Aegean Bunkering Services Inc. a corporation organized and existing
under the Laws of Greece, having its registered office at 42, Hadjikyriakou
Avenue, Piraeus 18538, Greece or its nominee, (hereinafter called the “BUYER”):
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#
Jianse Road, Economic Technical Development Zone of Fuzhou, Fujian Province the
People’s Republic of China, and

Fujian Shipbuilding Industry Group Corporation, a
corporation organized and existing under the Laws of the People’s Republic of
China, having its registered office at 27 Qunzhong Road Fuzhou Fujian, the
People’s Republic of China on the other part (hereinafter collectively called
the “SELLER”).

 

In consideration of ten Shipbuilding Contracts each dated 6th
of Febraury 2005 each as respectively amended by virtue of the Addenda No.1
dated 31st March 2005 and the Addenda No.2 dated 27th
of April 2005, and the Addenda No.3 dated 27th of May 2005 and
entered between the SELLER and the respective ten (10) buying Companies which
were nominated by the BUYER for ten (10) 3,800 DWT Product Tankers (having the SELLER's
Hull Nos. 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) and the payment of USD 1 by
the BUYER to the SELLER and other good and valuable consideration, the receipt
and adequacy whereof is hereby acknowedged by the SELLER hereto agree the
following

 

The delivery time of each of the five (5) Optional Vessels will be one
month later than the date stipulated in the OPTION AGREEMENT Expressly the
deliveries of the Optional Vessels will be as follows

 

•              1st
Optional Vessel will be delivered August 31st 2008

•              2nd
and 3rd Optional Vessels will be delivered December 31st
2008

•              4th
and 5th Optional Vessels will be delivered May 31st 2005

 

All other terms and
conditions of the above-mentioned OPTION AGREEMENT shall remain full in force
and unaltered.

 

If there is any discrepancy
between the OPTION AGREEMENT 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 in this 27th day of May 2005.

 

	
  [SEAL]

  	
  [SEAL]

  

 

	
  For and on behalf of

  	
  For and on behalf of

  

 

	
     /s/ [ILLEGIBLE]

  	
   

  	
     /s/ [ILLEGIBLE]

  	
   

  
	
  Aegean Bunkering Services Inc.

  	
  Fujian Southeast Shipyard

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
   

  	
   

  
	
     /s/ [ILLEGIBLE]

  	
   

  	
   

  
	
  Fujian Shipbuilding Industry Group Corporation

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