Document:

Exhibit 10.19

 

CONTRACT

 

FOR

 

DESIGN, BUILDING SUPERVISION, REPRESENTATION,

 

PROCUREMENT OF

 

MACHINERIES AND SUPPLIES,

 

AND TURN-KEY DELIVERY OF

 

A 5,500 DWT PRODUCT TANKER

 

(HULL NO. QHS-220)

 

TO BE BUILT AT QINGDAO
HYUNDAI SHIPBUILDING CO. LTD

 

 

 

BETWEEN

 

ETON MARINE LTD.

 

AND

 

IOTA CORPORATION

 

 

CONTRACT

FOR

DESIGN, BUILDING SUPERVISION, REPRESENTATION, PROCUREMENT OF

MACHINERIES AND SUPPLIES, AND TURN-KEY DELIVERY

OF

A 5,500 DWT PRODUCT TANKER

TO BE BUILT AT QINGDAO HYUNDAI SHIPBUILDING CO. LTD

(the “BUILDER”)

 

THIS CONTRACT, made this
24th day of February, 2006 by and between ETON MARINE LTD., having
its registered offices at 80 Broad Street, Monrovia, Liberia, for this purpose
represented by Mr. Apostolos Manitsas (hereinafter called the “OWNER”), the
party of the first part, and IOTA CORPORATION having its registered office at
80 Broad Street, 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 5,500 DWT product tanker (hereinafter
called the “VESSEL”) to be built for the OWNER by Qingdao Hyundai Shipbuilding
Co. Ltd (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
has assisted and guided OWNER in developing a conceptual design of the VESSELS
to suit their operational requirements.

 

(b)      IOTA
has developed 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
has presented the OWNER with the following interim drawings:

 

(i)        General
Arrangement

 

(ii)       Midship
Section

 

(iii)      Piping
Arrangement

 

(iv)      List
of Makers

 

which were used in
negotiating with the BUILDER the SHIPBUILDING CONTRACT.

 

(d)      IOTA
has participated in the meetings with BUILDER and OWNER in the negotiations
that lead to the signing of the SHIPBUILDING CONTRACT.

 

(e)       After
the effectiveness of SHIPBUILDING CONTRACT, IOTA will embark upon the second Design
phase which constitutes of about 100 drawings and plans which to be 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 to be produced by the BUILDER and, prior to implementation, 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

 

4

 

important deficiencies
being noted by the SUPERVISORS same to be communicated forthwith to the OWNER.

 

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)

 

5

 

•
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 VESSEL is and
remain technically up to date and comply with all Class, National and
International regulations.

 

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 and tools for all Machinery and fittings as
necessary.

 

c.        New
IMO, SOLAS and EU regulations are being promulgated for which the Shipyard
could not calculate the exact impact and therefore left them out of the
specification. Iota will undertake the investigation, procurement and
installation of machineries or equipment that will satisfy there regulations,
as follows:

 

i. Inert gas generator of
adequate capacity according to the Rules to satisfy inerting all cargo tanks at
a rate of 125% of the maximum discharge capacity of the Vessel

 

ii. Equipment for
depleting oxygen from ballast water, according to Rules effecting Clean
Ballast. This equipment also removes oxygen from empty cargo tanks, thus
stopping any rusting.

 

iii. EU low sulphur in
fuel oil regulations necessitating installation of double settling and service
tanks in the Engine Room in order to accommodate different grades of fuel.

 

6

 

d.        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. A 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, remote
control and remote printing for the above.

 

ii. Five in number Flow
meters to be installed at the outlet of each of the three main cargo lines and
two at the inlet of the Blending Machine. Piping, remote control and remote
printing for the above.

 

iii. A Hose Crane with
attached 10 inch and 6 inch cargo discharge lines with access along the jib and
increased overall length to reach manifolds of VLCCs.

 

iv. 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.

 

v. 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.

 

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

 

vii. l6x “TIPTO-8” by 170
meter ropes for mooring and attaching to bunkered vessels.

 

viii. 4xYokohama fenders
of 1.5 meters diameter.

 

 

e.        IOTA
will procure, buy and supply C.I.F. BUILDER’s premises all other BUYER SUPPLIED ITEMS as itemised in the
SPECIFICATION, Section 113.

 

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

 

•         All hoses,
etc., other than those required by the Rules, or mentioned in this
Specification.

•         Steel wires,
ropes and hawsers for mooring in excess of the requirements of the
Classification Society and/or this specification.

•         Deck, engine
and cabin stores in excess of those specified in this Specification.

•         All bedding
(pillows, blankets, sheets, covers, etc.) but excluding mattresses.

•         All napery
(serviettes, table cloths, etc.)

 

7

 

•         All cook’s
and steward’s utensils (crockery, cutlery, silver-wares, china, glasses, pots,
pans, etc.)

•         All charts,
sailing books and flags.

•         All
consumable stores.

•         All medicine
and medical equipment.

•         All air
tools and hoses except those specified herein.

•         Personal
calculators.

•         Recreational
equipment other than mentioned in this Specification.

•         Typewriter
and other office machines.

•         Hand tools
other than specified in Specification.

•         Broadcasting
radio receivers and stereophony (sockets installed by Builder).

•         Electric
coffee grinder, electric cutting machine, juice maker, small electric boiler
for galley and decimal balance, electric ironing machine.

•         Paintings
and pictures.

•         All TV sets,
radios, stereo sets, DVD sets, etc.

•         Spare parts,
tools, navigation equipment, flags, etc., in excess of the requirements of the
rules and Regulations as specified herein and/or those specified in this
Specification.

•         Water, fuel
oil, lubricants and grease, working oil for deck machinery, all consumable
liquids or gas including remaining L.O. in pipe etc. to be of the Buyer’s
account excepting those which have been consumed in trials and tests which are
to be borne by the Builder.

 

 

f.         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.

 

g.        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)

 

8

 

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 Lawyers, 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 CONTRACT and the construction schedule agreed upon between the OWNERS
and the BUILDER.

 

In performing these
services and providing the OWNER’S supplies IOTA shall ensure that at all times
during the period of this CONTRACT:

 

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

 

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

 

9

 

(d)       it
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 co-operation 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 as well as the provisions of the Shipbuilding Contract between the
OWNER and the BUILDER have been maintained.

 

5.        Notwithstanding
Paragraph 4 in this Article, in case 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, IOTA shall compensate the OWNER 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.

 

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.

 

10

 

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 OWNER in writing,
obtain OWNER’S consent, which OWNER must expediciously provide, 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, which OWNER must expediciously provide, 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 Owner 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 IV below.

 

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

 

11

 

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 USDOLLARS ONE
MILLION AND SIX HUNDRED THOUSAND ($1,600,000.00) per VESSEL in the manner as
provided hereunder.

 

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

 

(a)       5%
of the amount, that is Eighty Thousand USDollars ($80,000.00) 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 Sixty Thousand USDollars ($160,000.00) shall
be paid within 5 banking days after the date of commencement of keel laying for
the VESSEL.

 

(c)       40%
of the amount, that is Six Hundred Forty Thousand USDollars ($640,000.00) shall
be paid within 5 banking days after the date of launching of the VESSEL.

 

(d)       45%
of the amount, that is Seven Hundred Twenty Thousand USDollars ($720,000.00)
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 USDollars
($15,000.00) per 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.

 

12

 

4.        Notwithstanding
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 Ninety Thousand USDollars
($390,000.00), exceeds in cost or is less by more than 5% of the allocated
figure of One Million Two Hundred Ten Thousand USDollars ($1,210,000.00), (that
is with a margin US$60,500.00 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 I.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 of U. S. Dollar versus the Chinese Yuan.

 

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

 

13

 

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 OWNER also has the right to request to 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

 

14

 

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.

 

ARTICLE X: LANGUAGE, UNIT
AND CURRENCY

 

All correspondence,
documents, specifications, drawings, instructions and any other writings in
connections with the SERVICES shall be made in English language and the metric
system. The currency shall be referred to U.S.Dollar.

 

15

 

ARTICLE XI: AMENDMENT OF
CONTRACT

 

If amendment to this
Contract is necessary to be made by either or the both parties of the OWNER and
IOTA, such amendment shall be effected in writing by mutual agreement.

 

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
  OWNER

  	
  :

  	
  ETON MARINE LTD.

  
	
   

  	
   

  	
  c/o AEGEAN BUNKERING SERVICES INC.

  
	
  Attention

  	
  :

  	
  Mr Apostolos Manitsas

  
	
  Telephone

  	
  :

  	
  +30210 4586000

  
	
  Telefax

  	
  :

  	
  +30210 4586242

  
	
  E-mail

  	
  :

  	
  bunkering@aegeanoil.gr

  
	
   

  	
   

  	
   

  
	
  To
  IOTA

  	
  :

  	
  IOTA CORPORATION

  
	
   

  	
  :

  	
  123 Aldersgate
  Street, London EC1A 4JQ, U.K.

  
	
  Attention

  	
  :

  	
  Dr. Gregory G.
  Parissis

  
	
  Telephone

  	
  :

  	
  0044-20-7253
  3660

  
	
  Telefax

  	
  :

  	
  0044-20-7608
  2512

  
	
  E-mail

  	
  :

  	
  iotacorp@tiscali.co.uk

  

 

 

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

  	
   

  
	
  ETON MARINE LTD.

  	
   

  	
   

  	
  IOTA CORPORATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Apostolos Manitsas

  	
   

  	
   

  	
   

  	
  /s/ Dr. Gregory G. Parissis

  	
   

  
	
  Apostolos Manitsas

  	
   

  	
   

  	
  Dr. Gregory G. Parissis

  	
   

  
	
  Authorised Signatory

  	
   

  	
   

  	
  Authorised Signatory

  	
   

  
						

 

16Exhibit 10.20

 

OPTION AGREEMENT

 

This OPTION AGREEMENT (“Agreement”) is made
on the 13th of January 2006 by and between:

 

(1)          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 (hereinafter called the “BUYER”); and

 

(2)          Qingdao Hyundai Shipbuilding Co Ltd. a corporation organized and
existing under the Laws of the People’s Republic of China having its registered
office at Lingshanwei Jiaonan, PC 266427, Qingdao Shandong Province, the People’s
Republic of China, (hereinafter called the “SELLER”),

 

In consideration of Five Shipbuilding
Contracts No. QHS-220-5500-06011301, No. QHS-221-5500-06011302,
No.QHS-222-5500-06011303, No.QHS-223-5500-06011304, No QHS-224-5500-06011305,
each dated 13th January 2006 entered into between the SELLER and the respective
five (5) buying Companies which were nominated by the BUYER for five (5) firm
5500dwt Class Oil Tankers (having Hull Numbers QHS-220, QHS-221, QHS-222,
QHS-223, and QHS-224) and the payment of USD 1 by the BUYER to the SELLER and
other good valuable consideration, the parties hereto agree Four (4) 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
5500dwt Class Oil Tankers as agreed by virtue of the Shipbuilding Contracts No.QHS-220-5500-06011301,
No.QHS-221-5500-06011302, No.QHS-222-5500-06011303, No.QHS-223-5500-06011304, No.
QHS-224-5500-06011305 dated 13th January 2006.

 

2.  Price

 

United States Dollars 9,550,000.00 (in words:
United States Dollars Nine Million and Five hundred and Fifty thousand Only)
for each vessel.

 

3.  Quantity

 

Four (4) Vessels

 

4.  Option Declaration Date

 

The BUYER shall exercise its right and
declare the option to purchase the Four (4) 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 delivery of the first of the Five firm 5500dwt Class Oil Tanker
(being Hull No QHS-220).

 

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.

 

1

 

5.  Terms of payment

 

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

10% upon effectiveness of
the contract

20% upon steel-cutting

20% upon keel-laying

25% upon launching

25% upon delivery

 

5.  Guarantees

 

Security for Payment of
Installment Before Delivery:

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

 

Refund Guarantee:

As security to the BUYER the SELLER shall
provide the BUYER before receipt by the SELER of each instalment of the
Contract Price with a Bank Guarantee issued by a first class bank acceptable in
all respects to BUYER’S bank and the BUYER for the 1st, 2nd, 3rd, and 4th
instalments respectively. Such Bank Guarantees will guarantee the SELLER’S
obligation for refunding to the BUYER instalments of 1st, 2nd, 3rd, and 4th
already received by the SELLER, through SELLER’S finance bank, when any such
instalment becomes refundable to the BUYER, in accordance with the terms of
this Contract.

 

The issuance and delivery to the BUYER of the
relevant Bank Guarantee for the 1st instalment will be a pre-condition to any of the BUYER’S payment
obligations becoming effective.

 

7.  Time of Delivery of
Optional Vessels

 

The Delivery Times of the optional Vessels
are estimated as follows:

 

First Optional Vessel –20th
November 2009

Second Optional Vessel - 27th
December 2009

Third Optional Vessel – 2nd
February 2010

Fourth Optional Vessel – 17th
March 2010

 

8.  Place of Delivery

 

Qingdao Hyundai Shipyard, Qingdao, China

 

9.  Contract Terms and Conditions

 

Form and substance of the Shipbuilding
Contract of the Optional Vessels shall be the same as those agreed for the Firm
Vessels 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.

 

2

 

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

 

The BUYER: Aegean Bunkering Services

 

 

	
  By:

  	
  Signature:

  	
  /s/ E. Albertis

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  E. ALBERTIS

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  13.01.06

  

 

 

The SELLER: Qingdao Hyundai Shipbuilding Co.,
Ltd.

 

 

	
  By:

  	
  Signature:

  	
  /s/ I.M. Chung

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  I.M. CHUNG

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  06/01/13

  

 

3

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