MEMORANDUM OF AGREEMENT ( DRAFT )




    MEMORANDUM OF AGREEMENT

               
               Dated: ............,............ 2012
Norwegian Shipbrokers' Association’s Memo-
randum of Agreement for sale and purchase of
ships. Adopted by The Baltic and International
Maritime Council (BIMCO) in 1956.
Code-name
SALEFORM 1993
Revised 1966, 1983 and 1986/87.






SELLER DETAILS
hereinafter called the Sellers, have agreed to sell, and
BUYER DETAILS
hereinafter called the Buyers, have agreed to buy

Name: VESSEL NAME

Classification Society/Class: .. /  ............

Built: ......
By: ..........................................

Flag: ......                                                  
Place of registration: ................

Call Sign: ..........
Grt/Nrt: ..........................

Register Number: IMO Number: ...............

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

Definitions
"Banking days" are days on which banks are open in both in the country of the currency stipulated for the Purchase Price in Clause 1, ................., ............ and in the place of closing stipulated in Clause 8.
"In writing" or "written" means a letter handed over from the Sellers to the Buyers or vice versa,           
a registered letter, telex, telefax or other modern form of written communication.
"Classification Society" or "Class" means the Society referred to in line 4.

1.                    Purchase price  US$  0.000,000 (United States Dollars ..... MILLION, ................ AND ........ THOUSAND) cash


2.  Deposit

As security for the correct fulfilment of this Agreement the Buyers shall lodge a deposit of 20%
(
twenty per cent) of the Purchase Price within 3 (three) banking days from the date this Agreement has been signed by both parties by fax/email or all subjects have been lifted, whichever is the later. This deposit shall be placed with ..........................................in accordance with the terms of their standard Escrow Holder’s letter which is to be signed by both parties. Interest is to be credited to Buyers’ account. Any fees charged for holding said deposit shall be borne equally by the Sellers and the Buyers.

3. Payment

The 20% (twenty per cent) deposit is to be released and 80% (eighty per cent) balance of purchase money is to be paid in full to the Sellers in …………………………………………….: at the time of on delivery of the Vessel in exchange of the delivery documents required by the Buyers, after the Vessel is in every respect physically ready for delivery in accordance with the terms and conditions of this Agreement and Notice of Readiness has been given in accordance with Clause 5.
  
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a)*




b)*
















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a)





b)







c)
4. Inspections – See Additional Clause 20

The Buyers have inspected and accepted the Vessel’s classification records. The Buyers have also inspected the Vessel at/in  on
and have accepted the Vessel following this inspection and the sale is outright and definite,                 subject only to the terms and conditions of this Agreement.

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

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

The Buyers shall undertake the inspection without undue delay to the Vessel. Should the                   Buyers cause undue delay they shall compensate the Sellers for the losses thereby incurred.                The Buyers shall inspect the Vessel without opening up and without cost to the Sellers.                     During the inspection, the Vessel’s deck and engine log books shall be made available for         examination by the Buyers. If the Vessel is accepted after such inspection, the sale shall                 become outright and definite, subject only to the terms and conditions of this Agreement,               provided the Sellers receive written notice of acceptance from the Buyers within 72 hours
after completion of such inspection.
Should notice of acceptance of the Vessel’s classification records and of the Vessel not be
received by the Sellers as aforesaid, the deposit together with interest earned shall be                     released immediately to the Buyers, whereafter this Agreement shall be null and void.

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


5.  Notices, time and place of delivery

The Sellers shall keep the Buyers well informed of the Vessel’s itinerary and shall
provide the Buyers with 7, 5, 3 days approximate notice and 1
days definite notice of the estimated time of  readiness for drydocking/underwater inspection/delivery. When the Vessel is at the place of delivery and in every respect physically ready for delivery in accordance with this Agreement, the Sellers shall give the Buyers a written Notice of Readiness for delivery.

The Vessel shall be delivered charter free, with empty/swept holds and taken over safely afloat at a safe and accessible berth or anchorage at a safe port in Chile with exact port in Sellers’ option.

Expected time of delivery: Between ........................... 2012 and ................ 2012, in the Sellers’ option.
Date of cancelling (see Clauses 5 c),6 b) (iii)and 14): .................... 2012 in the Buyers’ option.

If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the
Vessel will not be ready for delivery by the cancelling date they may notify the Buyers in
writing stating the date when they anticipate that the Vessel will be ready for delivery and
propose a new cancelling date. Upon receipt of such notification the Buyers shall have the
option of either cancelling this Agreement in accordance with Clause 14 within 7 5 (five) running
days of receipt of the notice or of accepting the new date as the new cancelling date. If the
Buyers have not declared their option within 7 5 (five) running days of receipt of the Sellers’
notification or if the Buyers accept the new date, the date proposed in the Sellers’ notification
shall be deemed to be the new cancelling date and shall be substituted for the cancelling
                      date stipulated in line 61.


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






a)**







b)**





























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

6.  Drydocking/Divers Inspection – See Additional Clause 17

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

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

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

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

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

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

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(ii)  the expenses relating to the survey of the tailshaft system shall be borne
by the Buyers unless the Classification Society requires such survey to be carried out , in

which case the Sellers shall pay these expenses. The Sellers shall also pay the expenses
if the Buyers require the survey and parts of the system are condemned or found defective
or broken so as to affect the Vessel’ s class*.

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

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

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

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

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


7. Spares/bunkers, etc.

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

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

The Buyers shall take over and pay extra only for the remaining bunkers and unused lubricating oils in storage tanks and sealed drums, always without having passed through the system. Remaining bunkers to be paid at Sellers’ last net purchased price (excluding barging expenses) supported by invoices. Unused lubricating oils to be paid at the Sellers’ last net purchased/contract prices evidenced by suppliers’ vouchers, less discounts (excluding barging expenses). Exact quantities of IFO / MDO and lubricating oils shall be as onboard at the time of delivery and shall be agreed by and between the Sellers’ and the Buyers’ representatives onboard. and pay the current net market price (excluding barging expenses) at the port and date of delivery of the Vessel.
Payment under this Clause shall be made at the same time and place and in the same currency as
the Purchase Price.


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8.  Documentation

The place of closing : New York or ………. in Sellers’ option

In exchange for payment of the Purchase Price the Sellers shall furnish the Buyers with all reasonable delivery documents/certificates, namely: required by the Buyers for Vessel's legal transfer. Such documents/certificates to be listed by the Buyers after signing M.O.A. and to be incorporated into the M.O.A. in the form of an Addendum No.1.

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

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

c)          Confirmation of Class issued within 72 hours prior to delivery.

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

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

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

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

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

9.  Encumbrances

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

10.  Taxes, etc.

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

The Vessel with everything belonging to her shall be at the Sellers’ risk and expense until she is  
delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be       
delivered and taken over substantially the same condition as she was at the time of inspection, fair wear and tear excepted, with her present

However, the Vessel shall be delivered with her class maintained, all surveys/csm items up to date, without recommendation*, free of average damage affecting the Vessel's class, and with all her national/international classification and trading, certificates and national certificates, as well as all other certificates the Vessel had at the time of inspection, clean, valid and unextended without recommendation* by Class or the relevant authorities at the time of delivery. for three (3) months from the date of delivery.
"inspection" in this Clause 11, shall mean the Buyers' inspection according to Clause 4 a) or 4 b), if
applicable, or the Buyers' inspection prior to the signing of this Agreement. If the Vessel is taken over
without inspection, the date of this Agreement shall be the relevant date.

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

12. Name/markings

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



13. Buyers' default

Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel this
Agreement, and they shall be entitled to claim compensation for their losses and for all expenses
incurred together with interest.
Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right to
cancel the Agreement, in which case the deposit together with interest earned shall be released to the
Sellers. If the deposit does not cover their loss, the Sellers shall be entitled to claim further
compensation for their losses and for all expenses incurred together with interest.

14. Sellers' default

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

15. Buyers' representatives

After this Agreement has been signed by both parties and the deposit has been lodged, the Buyers
have the right to place two representatives on board the Vessel at their sole risk and expense upon
arrival at
                                            on or about once Buyers and Sellers have lifted their subjects as per Clause. 20.
These representatives are on board for the purpose of familiarisation and in the capacity of
observes only, and they shall not interfere in any respect with the operation of the Vessel. The
Buyers' representatives shall sign the Sellers' letter of indemnity prior to their embarkation.

At the time of delivery/closing, the Buyers shall pay to the Sellers USD$ 30.00 per day per person as victualing/accommodation fee and the Buyers shall also pay to the Sellers other expenses born by the Buyers’ representatives while they are on board the Vessel.

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Sellers and Buyers have been mutually agreed to incorporate Clause 17, 18, 19, and 20 all inclusive, shall be deemed as a integral part of this agreement and fully incorporated herein.


a)*










b)*








c)*



*

16. Arbitration

This Agreement shall be governed by and construed in accordance with English law and
any dispute arising out of this Agreement shall be referred to arbitration in London in
accordance with the Arbitration Acts 1996 1950 and 1979 or any statutory modification or
re-enactment thereof for the time being in force, one arbitrator being appointed by each
party. On the receipt by one party of the nomination in writing of the other party's arbitrator,
that party shall appoint their arbitrator within fourteen days, failing which the decision of the
single arbitrator appointed shall apply. If two arbitrators properly appointed shall not agree
they shall appoint an umpire whose decision shall be final.

The Arbitrators shall be members of the London Maritime Arbitrators Association.

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

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

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


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