10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2007

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number: 000-51412

Quintana Maritime Limited

(Exact name of registrant as specified in its charter)

Republic of the Marshall Islands	98-0454094
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

c/o Quintana Management LLC

Attention: Vassilis Koutsolakos

Pandoras 13 & Kyprou Street

166 74 Glyfada

Greece

(address of principal executive offices)

+30 210 898 6820

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer  ¨                    Accelerated Filer  x                    Non-accelerated Filer  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ¨    No  x

The number of shares of the Company’s common stock, $0.01 par value, outstanding at August 1, 2007 was 56,066,196.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	27
Item 4.	Controls and Procedures	28
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 4.	Submission of Matters to a Vote of Security Holders	31
Item 6.	Exhibits	31
Signatures		34
Exhibit Index		35

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

QUINTANA MARITIME LIMITED

CONSOLIDATED BALANCE SHEETS

(All amounts expressed in thousands of U.S. Dollars except share data)

(Unaudited)

	June 30, 2007			December 31, 2006
ASSETS
Current assets:
Cash and cash equivalents	$	41,506		$	21,335
Inventories		2,350			1,649
Due from charterers, net		519			1,159
Other receivables		1,532			1,196
Prepaid expenses and other current assets		1,502			986
Total current assets		47,409			26,325
Property and equipment:
Vessels, net of accumulated depreciation of $67,706 and $40,899		1,295,919			987,623
Advances for acquisition of vessels / newbuildings		52,244			26,310
Other fixed assets, net of accumulated depreciation of $408 and $265		451			429
Total property and equipment		1,348,614			1,014,362
Deferred charges:
Financing costs, net of accumulated amortization of $711 and $2,169		5,121			4,588
Time charter premium, net of accumulated amortization of $3,607 and $2,551		5,893			6,949
Dry-docking costs, net of accumulated amortization of $738 and $970		7,678			5,216
Total deferred charges		18,692			16,753
Total assets	$	1,414,715		$	1,057,440
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	87,218		$	47,000
Accounts payable		3,586			5,369
Sundry liabilities and accruals		19,069			2,776
Deferred income		11,990			2,777
Total current liabilities		121,863			57,922
Long-term debt, net of current portion		807,600			564,960
Interest-rate swap loss		965			9,840
Total liabilities		930,428			632,722
Commitments and contingencies
Minority interests in equity of consolidated joint ventures		8,390			—
Stockholders’ equity:
Common stock at $0.01 par value, 100,000,000 shares authorized, 54,877,046 and 50,026,533 shares outstanding		550			501
Additional paid-in capital		480,292			442,776
Common stock to be issued for warrants exercised		—			1,438
Accumulated deficit		(4,945	)		(19,997	)
Total stockholders’ equity		475,897			424,718
Total liabilities and stockholders’ equity	$	1,414,715		$	1,057,440

The accompanying notes are an integral part of these consolidated financial statements.

3

QUINTANA MARITIME LIMITED

CONSOLIDATED INCOME STATEMENTS

(All amounts expressed in thousands of U.S. Dollars except per share data)

(Unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2007			2006			2007			2006
Revenues:
Time charter revenue	$	62,608		$	18,981		$	112,738		$	39,892
Voyage revenue		—			1,597			—			3,230
Commissions		(2,870	)		(873	)		(5,243	)		(1,839	)
Net revenue		59,738			19,705			107,495			41,283
Expenses:
Vessel operating expenses		9,007			3,552			16,472			7,323
Voyage expenses		—			1,112			—			2,621
General and administrative expenses		4,308			2,455			7,870			4,492
Depreciation and amortization		15,485			6,132			27,917			12,188
Total expenses		28,800			13,251			52,259			26,624
Operating income		30,938			6,454			55,236			14,659
Other (expenses) / income:
Interest expense		(13,242	)		(2,193	)		(23,588	)		(4,964	)
Interest income		368			90			1,113			129
Finance costs		(267	)		(63	)		(501	)		(126	)
Interest-rate swap gain		11,467			—			9,256			—
Foreign exchange gains/(losses) and other, net		104			(114	)		345			(156	)
Total other expenses		(1,570	)		(2,280	)		(13,375	)		(5,117	)
Minority interest in net loss of consolidated joint ventures		28			—			28			—
Net income	$	29,396		$	4,174		$	41,889		$	9,542
Weighted average shares outstanding:
Basic		54,832,491			23,387,822			53,819,180			23,367,942
Diluted		56,582,452			24,002,462			55,888,590			23,925,032
Per share amounts:
Basic earnings per share	$	0.54		$	0.04		$	0.78		$	0.27
Diluted earnings per share	$	0.52		$	0.04		$	0.75		$	0.27
Cash dividends declared per share	$	0.24		$	0.21		$	0.48		$	0.42

The accompanying notes are an integral part of these consolidated financial statements.

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QUINTANA MARITIME LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(All amounts expressed in thousands of U.S. Dollars)

(Unaudited)

	For the Six Months Ended June 30,
	2007			2006
Cash flows from operating activities:
Net income	$	41,889		$	9,542
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		27,917			12,188
Amortization of deferred financing costs		501			126
Amortization of time charter fair value		1,056			1,056
Stock-based compensation		1,992			1,029
Minority interest share in net loss of consolidated joint ventures		(28	)		—
Unrealized interest-rate swap gain		(8,875	)		—
Changes in assets and liabilities:
Increase in inventories		(701	)		(891	)
Decrease / (increase) in due from charterers, net		640			(1,136	)
Increase in other receivables		(336	)		(62	)
(Increase) / decrease in prepaid expenses and other current assets		(516	)		16
(Decrease) / increase in accounts payable		(1,783	)		580
Increase / (decrease) in sundry liabilities and accruals		15,236			(2,064	)
Increase / (decrease) in deferred income		9,213			(726	)
Dry-docking costs paid		(2,372	)		(126	)
Net cash from operating activities	$	83,833		$	19,532
Cash flows from investing activities:
Vessel acquisitions		(308,793	)		(61	)
Advances for acquisitions of vessels / newbuildings		(52,244	)		(73,500	)
Purchases of other fixed assets		(165	)		(139	)
Net cash used in investing activities	$	(361,202	)	$	(73,700	)
Cash flows from financing activities:
Proceeds from issue of preferred stock		—			190,937
Cost of issuance of preferred stock		—			(7,312	)
Proceeds from long-term debt		282,858			—
Repayment of long-term debt		—			(120,000	)
Payment of financing costs		(1,034	)		(65	)
Warrants exercised, net of issuance costs		34,090			—
Paid-in capital and common stock		45			—
Contributions from minority interest holders of consolidated joint ventures		8,418			—
Dividends paid		(26,837	)		(10,079	)
Net cash from financing activities	$	297,540		$	53,481
Net increase / (decrease) in cash and cash equivalents		20,171			(687	)
Cash and cash equivalents at beginning of period		21,335			4,259
Cash and cash equivalents at end of the period	$	41,506		$	3,572
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	10,500		$	7,267
Capitalized interest on newbuildings	$	493		$	—

The accompanying notes are an integral part of these consolidated financial statements.

5

QUINTANA MARITIME LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(All amounts expressed in U.S. dollars except as otherwise noted)

1. Basis of Presentation and General Information

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the management of Quintana Maritime Limited (the “Company”), all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of financial position, operating results and cash flows have been included in the statements. Interim results are not necessarily indicative of results that may be expected for the year ended December 31, 2007. These financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in Quintana Maritime Limited’s periodic filings with the Securities and Exchange Commission (the “SEC”), including those included in the Quintana Maritime Limited’s Annual Report on Form 10-K for the year ended December 31, 2006.

The Company

The accompanying unaudited consolidated financial statements include the accounts of Quintana Maritime Limited and its subsidiaries (collectively, the “Company”).

The Company is a holding company incorporated on January 13, 2005, under the Laws of the Republic of the Marshall Islands. Through its subsidiaries, the Company is engaged in the marine transportation of dry bulk cargoes through the ownership and operation of dry bulk vessels.

The Company was formed by companies controlled by each of Corbin J. Robertson Jr., First Reserve Corporation (“FRC”) and American Metals & Coal International, Inc. (“AMCI”). On July 20, 2005, the Company completed its initial public offering.

Except as otherwise noted, the Company is the sole owner of all of the outstanding shares of the following subsidiaries as of June 30, 2007, each of which was formed in the Marshall Islands for the purpose of owning a vessel in the Company’s fleet:

Company	Vessel Type	Deadweight Tonnage (in tonnes)	Built	Vessel Delivery Date
Fearless Shipco LLC (1)	Panamax	73,427	1997	April 11, 2005
King Coal Shipco LLC (1)	Panamax	72,873	1997	April 12, 2005
Coal Glory Shipco LLC (1)	Panamax	73,670	1995	April 13, 2005
Coal Age Shipco LLC (1)	Panamax	72,861	1997	May 4, 2005
Iron Man Shipco LLC (1)	Panamax	72,861	1997	May 6, 2005
Barbara Shipco LLC (1)	Panamax	73,390	1997	July 20, 2005
Coal Pride Shipco LLC	Panamax	72,600	1999	August 16, 2005
Linda Leah Shipco LLC (1)	Panamax	73,390	1997	August 22, 2005
Iron Beauty Shipco LLC	Capesize	165,500	2001	October 18, 2005
Kirmar Shipco LLC	Capesize	165,500	2001	November 11, 2005
Iron Vassilis Shipco LLC	Kamsarmax	82,000	2006	July 27, 2006
Iron Fuzeyya Shipco LLC	Kamsarmax	82,229	2006	August 14, 2006
Iron Bradyn Shipco LLC	Kamsarmax	82,769	2006	August 21, 2006
Grain Harvester Shipco LLC	Panamax	76,417	2004	September 5, 2006
Santa Barbara Shipco LLC	Kamsarmax	82,266	2006	September 5, 2006
Iron Bill Shipco LLC(2)	Kamsarmax	82,000	2006	September 7, 2006
Ore Hansa Shipco LLC	Kamsarmax	82,229	2006	September 15, 2006
Iron Anne Shipco LLC	Kamsarmax	82,000	2006	September 25, 2006
Iron Kalypso Shipco LLC	Kamsarmax	82,204	2006	September 25, 2006
Grain Express Shipco LLC	Panamax	76,466	2004	October 9, 2006

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Company	Vessel Type	Deadweight Tonnage (in tonnes)	Built	Vessel Delivery Date
Iron Knight Shipco LLC	Panamax	76,429	2004	January 24, 2007
Coal Gypsy Shipco LLC	Kamsarmax	82,300	2006	November 24, 2006
Pascha Shipco LLC	Kamsarmax	82,300	2006	December 15, 2006
Coal Hunter Shipco LLC	Kamsarmax	82,300	2006	December 20, 2006
Iron Lindrew Shipco LLC	Kamsarmax	82,300	2007	February 16, 2007
Iron Miner Shipco LLC	Capesize	177,000	2007	March 13, 2007
Iron Brooke Shipco LLC	Kamsarmax	82,300	2007	March 20, 2007
Iron Manolis Shipco LLC	Kamsarmax	82,300	2007	April 3, 2007
Lowlands Beilun Shipco LLC(3)	Capesize	170,162	1999	April 10, 2007
Iron Endurance Shipco LLC	Capesize	180,000	TBD 2008	Expected Q3, 2008
Christine Shipco LLC(4)	Capesize	180,000	TBD 2010	Expected Q1, 2010
Hope Shipco LLC(5)	Capesize	181,000	TBD 2010	Expected Q4, 2010
Lillie Shipco LLC(5)	Capesize	181,000	TBD 2010	Expected Q4, 2010

(1) Indicates vessel sold and leased back to Company in July 2007

(2) Formerly Iron Elisabeth Shipco LLC

(3) Formerly Coal Heat Shipco LLC

(4) Christine Shipco is owned 42.8% by Quintana Maritime Limited

(5) Hope Shipco and Lillie Shipco are each 50% owned by Quintana Maritime Limited

The operations of all the Company’s vessels are managed by a wholly owned subsidiary, Quintana Management LLC.

In December 2005, the Company formed a wholly owned subsidiary, Quintana Logistics LLC, to engage in chartering operations, including entry into contracts of affreightment. Under a contract of affreightment, the Company would agree to transport a specified amount of cargo at a specified rate per tonne between designated ports over a particular period of time. The contracts of affreightment generally do not specify particular vessels, so the Company would be permitted either to use its own vessel or to charter in a third-party vessel.

2. Significant Accounting Policies

Please see Note 2 of the Company’s consolidated financial statements included in our Form 10-K for the year ended December 31, 2006 for additional information regarding the Company’s significant accounting policies.

Recent Accounting Pronouncements

In July 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes—An Interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with SFAS 109, “Accounting for Income Taxes.” FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. FIN 48 was effective beginning in fiscal year 2007. Based on our expectation that the Company will continue not to be liable for income taxes in either the Marshall Islands or in the United States, the adoption of FIN 48 did not have a material impact on the Company’s consolidated financial condition and results of operations.

In September 2006, the FASB issued Staff Position (FSP) AUG AIR-1, “Accounting for Planned Major Maintenance Activities.” FSP AUG AIR-1 addresses the accounting for planned major maintenance activities. Specifically, the FSP prohibits the practice of the accrue-in-advance method of accounting for planned major maintenance activities. FSP AUG AIR-1 is effective for fiscal years beginning after December 15, 2006. Because the Company does not use the accrue-in-advance method, the adoption of FSP AUG AIR-1 did not have a material impact on its results of operations and financial position.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which enhances existing guidance for measuring assets and liabilities at fair value. Previously, guidance for applying fair value was incorporated in several accounting pronouncements. The new statement provides a single definition of fair value, together with a framework for measuring it and requires additional disclosure about the use of fair value to measure assets and liabilities. While the statement does not require any new fair value measurements, it does change certain current practices. The statement is

7

effective for the Company for the fiscal year starting January 1, 2008. The Company is currently evaluating the impact of the adoption of this standard but believes that its implementation is unlikely to have a material impact on the financial position of the Company.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS No. 159”). Under this statement, entities may voluntarily and irrevocably choose to measure certain financial assets and liabilities, on an instrument-by-instrument basis, at fair value. Subsequent changes for the elected instruments must be reported in earnings. The statement is effective for the Company for the fiscal year starting January 1, 2008. The Company’s adoption of SFAS No. 159 is not expected to have a material impact on the financial position of the Company.

United States Federal Income Taxation of the Company

The Company has made special tax elections in respect of each of our vessel-owning and operating subsidiaries, the effect of which is to disregard each of those subsidiaries as a taxable entity separate from the Company for United States federal income tax purposes. Therefore, for purposes of the discussion below, the income earned and assets held by those subsidiaries will be treated as earned and owned directly by the Company for United States federal income tax purposes.

Unless exempt from U.S. federal income taxation under the rules discussed below, a non-U.S. corporation is subject to U.S. federal income taxation in respect of any income it earns that is derived from the use of vessels, from the hiring or leasing of vessels for use on a time, voyage or bareboat charter basis, from the participation in a pool, partnership, strategic alliance, joint operating agreement or other joint venture it directly or indirectly owns or participates in that generates such income, or from the performance of services directly related to those uses, which the Company refers to as “shipping income,” to the extent that the shipping income is derived from sources within the United States. For these purposes, 50% of shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States constitutes income from sources within the United States, which the Company refers to as “U.S.-source shipping income.”

Shipping income attributable to transportation that both begins and ends in the United States is considered to be 100% from sources within the United States. Shipping income attributable to transportation exclusively between non-U.S. ports will be considered to be 100% derived from sources outside the United States. During the year ended December 31, 2006 the Company did not engage in transportation that produced income considered to be 100% from sources within the United States. Shipping income derived from sources outside the United States is not subject to U.S. federal income tax.

In the absence of exemption from tax under Section 883 of the Code (the “883 Exemption”), the Company’s U.S.-source shipping income would generally be subject to a 4% gross basis tax (i.e., a tax imposed without allowance for deductions). The Company qualified for the 883 Exemption for its 2005 tax year. In addition, the Company believes that it qualified for the 883 Exemption for its year ended December 31, 2006 and the Company will take this position for U.S. federal income tax return reporting purposes. However, there are circumstances, including some that are beyond the Company’s control, which could cause the Company to lose the benefit of the 883 Exemption and thereby become subject to U.S. federal income tax on its U.S.-source shipping income. For example, 5% stockholders could acquire and own 50% or more of the Company’s outstanding common stock. This would preclude the Company from being eligible for the 883 Exemption unless it can establish that among those 5% stockholders there are sufficient 5% stockholders that are qualified stockholders for purposes of Section 883 to preclude non-qualified 5% stockholders from owning 50% or more of such shares for more than half the number of days during the taxable year. Therefore, the Company can give no assurances regarding our qualification for this tax exemption.

Marshall Islands Tax Considerations

The Company is incorporated under the laws of the Republic of the Marshall Islands. Under current Marshall Islands law, the Company is not subject to tax on income or capital gains, and no Marshall Islands withholding tax is imposed on payments of dividends by the Company to its stockholders.

Earnings per share

Earnings per share has been calculated by dividing the net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised and is computed using the treasury stock method. The following dilutive securities are included in shares outstanding for purposes of computing diluted earnings per share:

• Restricted stock outstanding under the Company’s 2005 Stock Incentive Plan; and

8

• Common shares issuable upon exercise of the Company’s outstanding warrants.

The Company had no other dilutive securities for the periods indicated.

The Company calculates the number of shares outstanding for the calculation of basic earnings per share and diluted earnings per share as follows:

	For the three months ended June 30,		For the six months ended June 30,
	2007	2006	2007	2006
Weighted average common shares outstanding, basic	54,832,491	23,387,822	53,819,180	23,367,942
Weighted average restricted stock awards	516,430	614,640	516,318	557,090
Warrants(1)	1,233,531	—	1,553,092	—
Weighted average common shares outstanding, diluted	56,582,452	24,002,462	55,888,590	23,925,032

(1) On May 11, 2006, the Company sold Units consisting of 12% Mandatorily Convertible Preferred Stock and Class A Warrants in a private placement. 8,182,232 Warrants, with an exercise price of $8.00 and an expiration date of May 11, 2009, were issued. The conversion of the preferred stock and the exercisability of the warrants were approved by the stockholders on August 11, 2006. The warrants have been included in diluted earnings per share beginning on August 11, 2006. As of June 30, 2007, 2,473,840 warrants were outstanding, which includes 80,995 warrants held by the Company in connection with cashless exercises.

Consolidated Joint Ventures

As of June 30, 2007 the Company had entered into three joint venture agreements for the formation of joint venture ship-owning companies. Each of the joint ventures were formed to purchase a newbuilding capesize drybulk carrier (see “Note 9—Related Party Transactions” for further details). Christine Shipco LLC is owned 42.8% by the Company and 28.6% by each of Robertson Maritime Investors LLC (“RMI”), an affiliate of Corbin J. Robertson, Jr. and AMCIC Cape Holdings LLC (“AMCIC”), an affiliate of Hans J. Mende. Each of the other two joint ventures, Lillie Shipco LLC and Hope Shipco LLC is owned 50% by the Company and 50% by AMCIC.

The Company does not hold a majority voting interest in any of the joint ventures but has determined that each joint venture is a variable interest entity as defined under FASB Interpretation No. 46, “Consolidation of Variable Interest Entities,” (“FIN46(R)”) and that the Company is, in each case, the primary beneficiary. As such, in accordance with FIN46(R), the Company consolidates the joint ventures. The joint venture partners’ share of the net income or loss of the joint ventures is presented separately in the accompanying consolidated income statements as minority interests. The partners’ share of net assets is presented separately in the accompanying consolidated balance sheets as minority interests.

The Company has issued performance guarantees on behalf of Lillie Shipco LLC and Hope Shipco LLC, which guarantee the performance of each joint venture’s obligations and responsibilities under the newbuilding contracts. In particular, the Company has guaranteed the payment of the contract price of the relevant vessels if the joint ventures are in default under the terms of the contract. The contract prices for the newbuildings are $80.6 million and $78.1 million respectively. The guarantees expire on delivery of the vessels to each joint venture. If the sellers of the vessels were to make demand under the guarantees, the Company would have recourse against AMCIC for breach of the agreement governing the rights and obligations of the joint venture partners.

The Company has pledged no assets as collateral for the joint ventures’ obligations.

3. Vessel Acquisitions

The Company took delivery of the remaining five Metrobulk vessels in the first six months of 2007 (Iron Knight, Iron Lindrew, Iron Miner, Iron Brooke, and Iron Manolis), paying an aggregate of approximately $259 million upon delivery.

On January 22, 2007, the Company agreed to purchase a 1999-built, 171,000 dwt Capesize bulk carrier named Lowlands Beilun. The Company initially advanced $7.3 million on that date and paid the remaining balance of $65.7 million upon the delivery of the vessel on April 10, 2007.

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In April 2007, the Company entered into an agreement with Cosmos World Maritime S.A., an affiliate of Itochu Corporation, for the purchase of a 180,000 dwt Capesize carrier to be constructed at Imabari Shipbuilding Co., Ltd. and scheduled to be delivered in 2008, for a purchase price of approximately $92 million. The vessel will be named Iron Endurance. On May 4, 2007, the Company paid the sellers $9.2 million under the contract utilizing cash on hand. The remaining 3 installments are due under the memorandum of agreement between October 2007 and delivery of the vessel, expected in the third quarter of 2008. The Company expects to fund the balance of the purchase price with cash on hand and borrowings under the supplementary agreement to the revolving credit facility dated July 5, 2007 (refer to Note 8 for further information).

The movement in vessels, net (in thousands) in the accompanying consolidated balance sheet at June 30, 2007 is analyzed as follows:

January 1, 2007	$	987,623
Advances for vessel acquisitions paid in 2006 for vessels delivered in 2007		26,310
Additions		308,793
Depreciation		(26,807	)
June 30, 2007	$	1,295,919

4. Deferred Charges

The movements in deferred charges shown in the accompanying consolidated balance sheet at June 30, 2007 are analyzed as follows:

Period	Finance Costs			Time Charter Premium			Dry-docking
	(in thousands)
January 1, 2007	$	4,588		$	6,949		$	5,216
Additions		1,034			—			3,429
Amortization		(501	)		(1,056	)		(967	)
June 30, 2007	$	5,121		$	5,893		$	7,678

Iron Beauty was acquired in October 2005 with a time charter attached of $36,500 per day less commissions. It was determined that this was an above-market rate. As described in Note 2 to the Company’s Consolidated Financial Statements for the year ended December 31, 2006, the Company, in these circumstances, allocates a portion of the amount paid for the vessel to the fair value of the above-market charter and shows this as a deferred asset. When Iron Beauty was purchased, the present value of the time charter was determined to be $9.5 million, and this amount was allocated to deferred assets. This is then amortized to revenue on a straight-line basis over the term of the time-charter, resulting in a daily time charter rate of approximately $30,600 as recognized revenue. For cash flow purposes, the Company will continue to receive $36,500 per day less commissions.

The amortization schedule of the time charter premium is as follows:

Period	Amortization (in thousands)
July 1,2007 to December 31, 2007	$	1,056
January 1, 2008 to December 31, 2008		2,111
January 1,2009 to December 31, 2009		2,111
January 1, 2010 until expiration		615
Total	$	5,893

5. Accumulated Deficit

Accumulated deficit (in thousands) shown in the accompanying consolidated balance sheet as at June 30, 2007 is analyzed as follows:

January 1, 2007	$	(19,997	)
Common stock dividends declared		(26,837	)
Net income for six months ended June 30, 2007		41,889
June 30, 2007	$	(4,945	)

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6. Prepaid Expenses and Other Current Assets

The prepaid expenses shown in the accompanying consolidated balance sheets consist of the following:

Description	June 30, 2007		December 31, 2006
	(in thousands)
Prepaid insurance	$	623	$	595
Prepaid commissions		565		74
Other prepaid expenses and other current assets		314		317
Total	$	1,502	$	986

7. Sundry Liabilities and Accruals

The sundry liabilities and accruals shown in the accompanying consolidated balance sheets consist of the following:

Description	June 30, 2007		December 31, 2006
	(in thousands)
Accrued interest	$	13,878	$	211
Accrued office expenses		1,047		1,255
Accrued operating expenses		3,295		676
Accrued commissions		375		62
Other sundry liabilities and accruals		474		572
Total	$	19,069	$	2,776

8. Long-Term Debt

The following table summarizes the Company’s long-term debt (in thousands):

Description	June 30, 2007			December 31, 2006
Revolving credit facility	$	865,000		$	611,960
Credit facilities of consolidated joint ventures (1)		29,818			—
		894,818			611,960
Less: Current portion of long-term debt		(87,218	)		(47,000	)
Long-term debt, net of current portion	$	807,600		$	564,960

(1) The Company is responsible for repaying 50% of the outstanding credit facilities of Hope Shipco LLC and Lillie Shipco LLC. Christine Shipco LLC has a credit facility for pre-delivery financing, but the Company has no repayment obligations with respect to that facility.

Revolving Credit Facility

On July 19, 2006, the Company entered into an 8.25 year, $735 million senior secured revolving credit facility. The Company’s obligations under the credit facility are secured by: (i) first priority cross-collateralized mortgages over the vessels securing the facility, which include the entire fleet other than those purchased in connection with joint ventures; (ii) first priority assignment of all insurances, operational accounts and earnings of the vessels financed with borrowings under the facility; (iii) first priority pledges over the operating accounts of the shipowning subsidiaries held with the agent, (iv) assignments of existing and future charters for the vessels, and (v) assignments of interest rate swaps. Borrowings under the revolving credit facility bear interest at the rate of LIBOR plus 0.85% per annum (until December 31, 2010) and LIBOR plus 1.10% per annum thereafter. Effective July 1, 2006, the Company entered into an interest-rate swap with Fortis Bank (Nederland) N.V. (“Fortis”) that effectively fixed the interest payable on the borrowings under the facility at 5.985%, inclusive of margin due to the Company’s lenders. The full amount borrowed under the revolving credit facility will mature on September 30, 2014. The materials terms of the facility, other than those modified by amendment and described below, are described in Note 8 to the financial statements contained in the Company’s annual report on Form 10-K for the year ended December 31, 2006.

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Amendments to the Revolving Credit Facility

First Amendment

On March 14, 2007, the Company executed an amendment (the “Amendment”) to the facility. The material terms of the Amendment were:

• To increase the maximum available amount for borrowing to $865 million;

• To reschedule the quarterly commitment reductions as follows:

• Two reductions of $14.5 million each, beginning on July 1, 2007, followed by

• Four reductions of $18 million each, followed by

• 23 reductions of $15 million each, with the final reduction occurring on the maturity date together with a balloon reduction equal to the lesser of $419 million or remaining amounts outstanding under the facility.

• To waive compliance with the minimum-liquidity covenant through December 31, 2007.

On March 28, 2007, the Company received a waiver permitting it to form the shipowning company to purchase a Capesize vessel through a joint venture and to exclude that shipowning company from coverage under the facility until its delivery.

On April 27, 2007, the Company received an additional waiver under the facility with respect to the formation of six additional shipowning companies and to clarify that only the Company’s interest in the relevant shipowning companies will be used in calculating compliance with the financial covenants under the facility.

As of June 30, 2007, the Company was in compliance with all covenants under the facility, and $865 million was outstanding under the facility with a weighted average interest rate of 6.1%

Second Amendment

On July 5, 2007, the Company further amended the credit facility (the “Second Amendment”). The Second Amendment contemplated the completion of the Company’s transaction relating to the sale-leaseback of seven vessels in its existing fleet (the “sale-leaseback” as described below in “Note 16 – Subsequent Events”), and the effectiveness of the terms of the Second Amendment was contingent upon the completion of that transaction and the mandatory prepayment of $185 million of the amount outstanding under the Facility from the funds received in the sale-leaseback. As of July 25, 2007, the Company had completed the sale-leaseback and prepaid $185.0 million. The material terms of the Amendment are:

• approval of the release of the security interests on the ships sold in the sale-leaseback and other related collateral contemporaneously with consummation of the sale-leaseback;

• approval of the Company’s guarantee of the obligations under the sale-leaseback;

• permission to borrow up to $55.2 million, which is equal to 60% of the purchase price of a newbuilding Capesize vessel to be purchased by the Company from an affiliate of Itochu Corporation, and is expected to be delivered in the third quarter of 2008, thereby adjusting the maximum available amount under the facility to $735.2 million after the borrowings for this vessel; and

• a revised schedule of quarterly commitment reductions as follows:

• Two reductions of $10,000,000 each, beginning on July 1, 2007, followed by

• Four reductions of $13,750,000 each, followed by

• 23 reductions of $12,125,000 each, with the final reduction occurring on the maturity date together with a balloon reduction equal to the lesser of $381,325,000 or remaining amounts outstanding under the Facility.

In addition, the Second Amendment contains customary representations and warranties made by the Company to its lenders. Except as specified in the Second Amendment, the Facility remains in full force and effect.

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Under the revolving credit facility in effect as at June 30, 2007 and before the effect of the Second Amendment, the following repayments of principal would have been required over the next five years:

Period	Principal Repayment
July 1, 2007 to December 31, 2007 (1)	$	29,000,000
January 1, 2008 to December 31, 2008		72,000,000
January 1, 2009 to December 31, 2009		60,000,000
January 1, 2010 to December 31, 2010		60,000,000
January 1, 2011 to December 31, 2011		60,000,000

(1) The Company paid $14.5 million of this obligation on July 1, 2007 under the payment schedule in effect prior to the Second Amendment. As a result, the Company’s principal repayment obligation, net of the payment of $14.5 million made on July 1, is $5.5 million for the remainder of 2007 taking into account the effectiveness of the Second Amendment.

Consolidated Joint Venture Credit Facilities

Christine Shipco LLC

On April 11, 2007, Christine Shipco LLC entered into a secured loan agreement with Royal Bank of Scotland for an amount equal to 70% of the pre-delivery installments, or $25.3 million, for the Capesize newbuilding, to be named Christine. Pre-delivery installments payable to the yard are expected to total approximately $36.2 million. As of June 30, 2007, $7.6 million had been drawn down under the facility.

The loan is to be repaid in one installment on the earlier of the delivery date and August 31, 2010, but the loan may be prepaid in full or in part at any time. The delivery date is expected to be during the first quarter of 2010. Quintana Maritime Limited is not responsible for repayment of any part of the credit facility for the pre-delivery financing.

The interest rate payable on the loan is the aggregate of (1) LIBOR, (2) the margin of 1.125% and (3) the mandatory cost, if any. The mandatory cost is an addition to the interest rate to compensate the lender for the costs of compliance with the Bank of England and European Central Bank requirements.

The facility contains a loan covenant which states that the fair market value of vessel less any part of the purchase price under the memorandum of agreement, or MOA, still to be paid to the Seller equals at least 130% of the outstanding loan. In addition, the facility contains customary restrictive covenants and events of default, including nonpayment of principal or interest, breach of covenants or material misrepresentations, default under other material indebtedness, bankruptcy, and change of control. Christine Shipco LLC is not permitted to pay dividends without the prior written consent of the lender.

Lillie Shipco LLC and Hope Shipco LLC

On May 11, 2007, Lillie Shipco LLC and Hope Shipco LLC entered into a separate secured loan agreements with Royal Bank of Scotland amounts equal to 70% of the first pre-delivery installment due to the shipyard, or $11.3 million and $10.9 million, respectively. The loan facilities were drawn down in full upon payment of the first pre-delivery installments in May 2007.

Each of the loans is to be repaid in one installment on April 18, 2008, but each loan may be prepaid in full or in part at any time. Under the terms of the joint venture agreements governing Lillie Shipco LLC and Hope Shipco LLC, Quintana Maritime Limited will be responsible for repaying 50% of the outstanding balance of each loan at the repayment date.

The interest rate payable on each of the loans is the aggregate of (1) LIBOR, (2) the margin of 1.125% and (3) the mandatory cost, if any. The mandatory cost is an addition to the interest rate to compensate the lender for the costs of compliance with the Bank of England and European Central Bank requirements.

Each of the facilities contains a loan covenant that states that the fair market value of vessel less any part of the purchase price under the MOA still to be paid to the Builder equals at least 115% of the outstanding loan. In addition, the facilities contains customary restrictive covenants and events of default, including nonpayment of principal or interest, breach of covenants or material misrepresentations, default under other material indebtedness, bankruptcy, and change of control. Neither Lillie Shipco LLC nor Hope Shipco LLC is permitted to pay dividends without the prior written consent of the lender.

Both Lillie Shipco LLC and Hope Shipco LLC expect to refinance the loans to cover the remaining pre-delivery installments.

Under the three joint-venture credit facilities as at June 30, 2007, the following repayments of principal payable by the joint ventures will be required over the next five years:

Period	Principal Repayment
July 1, 2007 to December 31, 2007	—
January 1, 2008 to December 31, 2008	22,218,000
January 1, 2009 to December 31, 2009	—
January 1, 2010 to December 31, 2010	7,599,900
January 1, 2011 to December 31, 2011	—

9. Related Party Transactions

Trade payables as of June 30, 2007 and December 31, 2006 shown in the accompanying unaudited consolidated financial statements include $204,093 and $94,838, respectively, related to expenses, including salaries of Company management, office rent, and related expenses, paid for by Quintana Minerals Corporation, on behalf of the Company. On October 31, 2005, the Company and Quintana Minerals Corporation entered into a service agreement, whereby Quintana Minerals agreed to provide certain administrative services to the Company at cost, and the Company agreed to reimburse Quintana Minerals for the expenses incurred by Quintana Minerals in providing those services. The bulk of the expenses reimbursed under this agreement relate to the compensation of the Company’s Chief Financial Officer, General Counsel, and Board of Directors. Quintana Minerals Corporation is controlled by Corbin J. Robertson, the Chairman of the board of directors of the Company (the “Board”) and significant stockholder in the Company. Total amounts reimbursed to Quintana

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Minerals Corporation were $0.9 million and $0.7 million for the six months ended June 30, 2007 and June 30, 2006, respectively, and $0.5 million and $0.2 million for the three months ended June 30, 2007 and June 30, 2006, respectively.

An affiliate of Mr. Robertson, the Chairman of the Board, has the right in certain circumstances to require us to register their shares of common stock in connection with a public offering and sale. In addition, in connection with other registered offerings by us, affiliates of Mr. Robertson and certain other stockholders will have the ability to exercise certain piggyback registration rights with respect to their shares.

Vessel Acquisitions by Joint Ventures

Imabari Vessel. On April 3, 2007, the Company entered into a limited liability company agreement, effective March 30, 2007, with Robertson Maritime Investors LLC (“RMI”), an affiliate of Corbin J. Robertson, Jr. and AMCIC Cape Holdings LLC (“AMCIC”), an affiliate of Hans J. Mende, for the formation of Christine Shipco LLC, a joint venture to purchase a newbuilding capesize drybulk carrier. Messrs. Robertson, Mende and Molaris, our Chief Executive Officer, will, in addition to serving as members of our Board, serve as members of the board of directors of Christine Shipco LLC. Members of Mr. Robertson’s family, including Corbin J. Robertson, III (who is also a member of the Board), will also participate in the joint venture through RMI. Christine Shipco LLC executed an agreement with an affiliate of Itochu Corporation for the purchase of Christine, a 180,000 dwt Capesize carrier to be constructed at Imabari Shipbuilding Co., Ltd. and delivered in 2010 for a purchase price of $72.4 million. Christine Shipco LLC entered into a term loan agreement relating to the pre-delivery financing of Christine and utilized approximately $7.6 million of the loan facility, together with cash of $3.3 million to pay the first instalment of $10.9 million. Under the terms of the LLC agreement governing Christine Shipco LLC, the Company has no obligations to make capital contributions to the joint venture until the delivery of the vessel in 2010, when the Company must fund the equity portion of the delivery installment, which is equal to 50% of the acquisition price of the vessel, or approximately $36.2 million. The Company expects to fund the equity portion of that installment with cash on hand. Christine Shipco LLC expects to refinance the existing loan agreement to cover the portion of the delivery installment not funded by the Company’s capital contribution. Subsequent to the delivery of the vessel, the Company will be obliged to pay its pro rata portion of the capital obligations of the joint venture (other than amounts due under the management agreement with the Company) under most circumstances. As a result, the Company owns a 42.8% interest in the joint venture, and RMI and AMCIC each own a 28.6% interest in the joint venture.

The Conflicts Committee of the Company’s Board, which is made up of three of the Company’s independent non-executive directors, has approved these agreements.

STX Vessels. On April 16, 2007, the Company entered into agreements with STX Shipbuilding Co., Ltd. for the construction of two 181,000 dwt newbuilding Capesize carriers for expected delivery in the fourth quarter of 2010 for an aggregate purchase price of approximately $159 million. The Company has nominated Hope Shipco LLC and Lillie Shipco LLC to purchase the respective vessels. The Company owns 50% of each of Hope Shipco LLC and Lillie Shipco LLC, and AMCIC, as described above, owns the other 50%. The sole purpose of each of Hope Shipco LLC and Lillie Shipco LLC is to purchase, own and operate the relevant Capesize vessel. It is currently contemplated that each of Hope Shipco LLC and Lillie Shipco LLC will enter into a credit facility to finance up to 70% of the purchase price of its respective Capesize vessel.

Each of Hope Shipco LLC and Lillie Shipco LLC is managed by a two-member board of directors consisting of Hans J. Mende and Stamatis Molaris, appointed by AMCIC and the Company, respectively. Mr. Mende serves as member of the Company’s Board, and Mr. Molaris serves as a director and the Company’s Chief Executive Officer and President. All decisions of the boards of directors will require unanimous approval.

Pursuant to each joint venture agreement for the STX vessels, the Company will be responsible for 50% of all vessel construction costs. The Company expects to fund these amounts with cash from operations and, if necessary, proceeds from alternative financing arrangements. Hope Shipco LLC and Lillie Shipco LLC funded the initial delivery installments with capital contributions by the Company and AMCIC and borrowings at the joint-venture level. Each joint venture will fund the balance of the vessel construction costs with cash contributions from the partners and borrowings at the joint-venture level.

The Conflicts Committee of the Company’s Board, which is made up of three of the Company’s independent non-executive directors, has preliminarily approved the formation of the joint ventures in order to accommodate the first pre-delivery installment payable with respect to each vessel and is expected to approve the final agreements governing the joint ventures in the third quarter of 2007.

KSC Vessels. On April 27, 2007, the Company executed agreements with Korea Shipyard Co., Ltd., a new Korean shipyard, for the construction of four 180,000 dwt newbuilding Capesize carriers for delivery in mid-2010 at a purchase price of approximately $77.7 million per vessel, or an aggregate purchase price of approximately $310.8 million. The Company

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expects to nominate four shipowning companies to purchase the respective vessels. The Company will own 50% of each of those companies, and AMCIC will own the other 50%.

Each of the joint ventures is expected to be managed by a two-member board of directors consisting of Hans J. Mende and Stamatis Molaris, each appointed by AMCIC and the Company, respectively. Mr. Mende serves as member of the Company’s Board, and Mr. Molaris serves as a director and the Company’s Chief Executive Officer and President. All decisions of the boards of directors will require unanimous approval.

Pursuant to each joint venture agreement with respect to the KSC vessels, the Company will be responsible for 50% of all vessel construction costs. The Company expects to fund these amounts with cash from operations and, if necessary, proceeds from alternative financing arrangements. Each joint venture will fund the balance of the vessel construction costs with cash contributions from AMCIC and borrowings at the joint-venture level.

The Company will not enter into any definitive agreements relating to these proposed joint venture transactions unless such agreements have been approved by the Conflicts Committee of its Board.

Management Agreements

Quintana Management LLC expects to enter into a management agreement (each a “Management Agreement”) with each of the three existing joint ventures and the four proposed joint ventures pursuant to which the Company will be responsible for the supervision of construction prior to delivery of the vessels and technical management of the vessels subsequent to delivery. Pursuant to each Management Agreement, the Company expects to collect from its joint venture partners $60,000 per annum per vessel for supervising the construction of each of the vessels, starting from the effective date of the joint venture agreements until their respective delivery. Upon delivery, the Company will manage the vessels on behalf of each joint venture, and the joint ventures will pay the Company a management fee based on the Company’s budgeted management costs, subject to adjustment in certain circumstances.

Charters

Of the seven vessels to be acquired by the joint ventures as described above, Christine, Hope, Lillie, and two of the KSC vessels will be chartered to EDF Trading, a wholly owned subsidiary of EDF, a major European utility, upon their delivery in 2010. The five-year charters will provide for charterhire to be paid at a floor rate, which averages $27,000, net, per vessel per day for each of the five vessels, with 50% profit sharing based on the monthly AV4 BCI time-charter rate as published by the Baltic Exchange. The remaining two vessels have not yet been chartered.

10. Commitments and Contingent Liabilities

Legal Proceedings

The Company has not been involved in any legal proceedings that may have, or have had a significant effect on its business, financial position, results of operations or liquidity, nor is the Company aware of any proceedings that are pending or threatened which may have a significant effect on its business, financial position, results of operations or liquidity. From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of business, principally disputes with charterers, personal injury and property casualty claims. The Company expects that these claims would be covered by insurance, subject to customary deductibles. Those claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources.

Legal Proceedings Related to Mr. Molaris

A private individual has filed a complaint with the public prosecutor of the Athens Magistrates Court against Mr. Molaris and four others relating to allegations that, while Mr. Molaris was employed by Stelmar Shipping Ltd., they conspired to defraud the individual of a brokerage fee of €1.2 million purportedly owed by a shipyard in connection with the repair of a Stelmar vessel. Mr. Molaris believes the complaint is without merit and is vigorously contesting these allegations. The prosecutor has referred the matter to a Greek judge for further investigation. The judge will determine whether the claim has sufficient merit to forward the matter on to a court for adjudication. We have been advised that an independent committee of the board of directors of Stelmar conducted an inquiry into these allegations and found no evidence to support them.

11. Capital Structure

As of June 30, 2007, the Company had 54,877,046 shares of common stock outstanding, which does not include 1,195,775 shares of unvested restricted stock that have been issued but are subject to forfeiture, and 2,473,840 warrants

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(including 80,995 warrants held by the Company in connection with cashless exercises).

Exercise of Warrants

In connection with the Company’s private placement in May 2006, the Company issued 8,182,232 warrants, exercisable at a price of $8.00 per share and expiring on May 11, 2009.

In the six months and three months ended June 30, 2007, the Company received $34.1 million and $0.5 million in net proceeds from the exercise of 4,457,913 and 70,112 warrants, respectively. During the six months and three months ended June 30, 2007, the Company issued 67,326 shares and 21,164 shares in connection with the cashless exercise of 148,321 and 40,280 warrants, respectively. As of June 30, 2007, 2,473,840 warrants remained outstanding.

The balance sheet line item “common stock to be issued for warrants exercised” represents cash received for 188,400 warrants that were exercised prior to December 31, 2006 but for which the related shares were issued on January 5, 2007. These shares are not included in the number of shares outstanding in the Company’s balance sheet as of December 31, 2006.

12. Interest-Rate Swap

Effective July 1, 2006, the Company entered into an interest-rate swap with Fortis Bank (Nederland) N.V. (“Fortis”) on variable notional amounts ranging from $295 million to approximately $702 million, based on expected principal outstanding under the Company’s revolving credit facility. Under the terms of the swap, the Company makes quarterly payments to Fortis based on the relevant notional amount at a fixed rate of 5.135%, and Fortis makes quarterly floating-rate payments at LIBOR + 0.85% per annum to the Company based on the same notional amount. The swap transaction effectively converts the Company’s contractual floating-rate interest obligation under its new revolving credit facility to a fixed rate of 5.985%, inclusive of margin due to its lenders. The swap is effective from July 1, 2006 to December 31, 2010. In addition, Fortis has the option to enter into an additional swap with the Company effective December 31, 2010 to June 30, 2014. Under the terms of the optional swap, the Company will make quarterly fixed-rate payments of 5.00% to Fortis based on a decreasing notional amount of $504 million, and Fortis will make quarterly floating-rate payments at LIBOR + 1.10% per annum to the Company based on the same notional amount.

During the six months and three months ended June 30, 2007, Fortis paid the Company approximately $0.7 million and $0.4 million, respectively, net of amounts paid by the Company to Fortis and is included in “interest-rate swap gain” on its consolidated income statement. The Company marks to market the fair value of the interest-rate swap and related swaption (“the swap”) at the end of every period and reflects the resulting gain or loss in “interest-rate swap gain” on its consolidated income statement. During the three and six months ended June 30, 2007, the mark-to-market adjustment resulted in unrealized gains of $11.1 million and $8.9 million, respectively. The fair value of the swap is reflected on the consolidated balance sheet under “interest swap loss” and at June 30, 2007, the fair value of the swap was a loss of $1.0 million.

13. Forward Currency Exchange Contracts

The following forward currency exchange contracts were outstanding as of June 30, 2007:

Contract Date	Notional Amount (€)	For Value	Rate ($/€)
October 10, 2006	1,000,000	September 28, 2007	1.2725

At each reporting period, the Company marks to market the fair value of forward currency exchange contracts and includes the fair value movement in its income statement in the item “foreign exchange gains/(losses) and other, net.” The fair value of the contract as at June 30, 2007 was approximately $0.1 million, is included on the accompanying balance sheet under other receivables. The Company entered into these contracts in order to mitigate foreign-exchange risk in connection with potential fluctuations in the value of the Euro.

14. Cash Dividend

On March 16, 2007, the Company paid a cash dividend of $0.24 per common share to common stockholders of record on March 2, 2007, for a total payment of $13.4 million.

On May 31, 2007, the Company paid a cash dividend of $0.24 per common share to common stockholders of record on May 18, 2007, for a total payment of $13.4 million.

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15. Stock Incentive Plan

Prior to the Company’s initial public offering, the Quintana Maritime Limited 2005 Stock Incentive Plan (the “Stock Incentive Plan”) was adopted by the Company and approved by its stockholders. The purpose of the Stock Incentive Plan is to provide the directors, employees, and consultants of the Company and its affiliates additional incentive and reward opportunities designed to enhance the profitable growth of the Company and its affiliates. The Stock Incentive Plan provides for the granting of stock options, restricted stock awards, performance awards, and phantom stock awards. Only restricted stock awards are outstanding as of June 30, 2007.

No awards were made during the six months ended June 30, 2007, and 38,925 shares were forfeited during that period, of which 32,825 shares were forfeited during the second quarter. As of June 30, 2007 there were 1,195,775 shares of non-vested stock under the Stock Incentive Plan and 1,449,750 shares remaining available for issuance under the plan.

Outstanding Restricted Stock

Restricted stock outstanding as of June 30, 2007 includes the following:

	Number of Shares		Weighted Average Fair Value Per Share
Outstanding at January 1, 2007	1,438,900		$	10.31
Granted	—			—
Vested	(204,200	)		10.79
Canceled or expired	(38,925	)		10.12
Outstanding at June 30, 2007	1,195,775		$	10.24

The total expense related to the restricted-stock awards is calculated by multiplying the number of shares awarded by the average high and low sales price of the Company’s common stock on the grant date, which we consider to be its fair market value. The Company amortizes the expense over the total vesting period of the awards on a straight-line basis.

Total compensation cost charged against income was $2.0 million and $0.9 million for the six months and three months ended June 30, 2007, respectively, and $1.0 million and $0.6 million for the six months and three months ended June 30, 2006, respectively. Total unrecognized compensation cost relating to the restricted stock at June 30, 2007 was $10.9 million. The total compensation cost related to unvested awards not yet recognized is expected to be recognized over a weighted-average period of approximately four years as of June 30, 2007.

16. Subsequent Events

Sale-Leaseback

On July 16, 2007, Quintana Maritime Limited and certain of its shipowning subsidiaries (collectively, the “Company”) executed memoranda of agreement and bareboat charters in connection with a sale-leaseback of seven of its Panamax vessels. The Company has agreed to sell Coal Glory, Iron Man, and Linda Leah to three Norwegian partnerships managed by Glitnir Marine Finance AS (collectively, “Glitnir”) and Coal Age, Fearless I, Barbara, and King Coal to two German partnerships managed by KG Allgemeine Leasing GmbH & Co. (collectively, “KGAL,” and, together with Glitnir, the “Buyers”) for aggregate gross proceeds of $253.5 million, before a 1.5% arrangement fee to be paid to Glitnir. Under the bareboat charters, the Company has agreed to lease the vessels back from the Buyers for a period of 8 years. The sales prices and daily charterhire of each of the vessels is as follows:

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					Daily Charterhire, Net
Vessel	Year Built	Sales Price		Buyer	Years 1-7		Year 8
Coal Glory	1995	$	34,500,000	Glitnir	$	12,250	$	12,000
Iron Man	1997		36,500,000	Glitnir		12,950		12,000
Linda Leah	1997		36,500,000	Glitnir		12,950		12,000
Fearless I	1997		36,500,000	KGAL		12,950		12,000
Barbara	1997		36,500,000	KGAL		12,950		12,000
Coal Age	1997		36,500,000	KGAL		12,950		12,000
King Coal	1997		36,500,000	KGAL		12,950		12,000
Total		$	253,500,000

Quintana delivered Coal Glory, Iron Man, and Linda Leah to Glitnir on July 20, 2007 and received gross proceeds of $107.5 million before payment of the arrangement fee of $1.6 million to Glitnir. The Company delivered the remaining vessels to KGAL on July 25, 2007 and received gross proceeds of $146 million before payment of the arrangement fee of $2.2 million to Glitnir.

Under the terms of the bareboat charters that have been entered into between the Company and the Buyers, the Company will retain operational control through its ship-management subsidiary, Quintana Management LLC, which will conduct commercial and technical management of the vessels for the term of the charters. The Company has assigned certain insurances with respect to the leased vessels to the Buyers’ lenders, DvB Bank AG (with respect to the vessels sold to Glitnir) and Commerzbank AG (with respect to the vessels sold to KGAL). The bareboat charters contain customary terms and conditions, including terms that allocate most of the risks associated with the ownership and operation of the vessels to the Company in its capacity as bareboat charterer.

Athens Office Lease

On July 1, 2007, Quintana Management LLC signed a lease for an additional 8000 square feet of office space adjacent to its current office. The lease period terminates on December 31, 2009 and the monthly rent is €30,000 per month ($40,500 using the period end exchange rate of $1.35 to €1.00). The monthly rent will increase by 5%, or €1,500 per month ($2,025), from July 1, 2008.

Dividend

On August 7, 2007, the Company declared a dividend of $0.31 per share payable on August 31, 2007 to stockholders of record as of August 17, 2007.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes thereto included elsewhere in this filing. This discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995 and are intended to be covered by the safe harbor provided for under these sections. These statements may include words such as “believe,” “estimate,” “project,” “intend,” “expect,” “plan,” “anticipate,” and similar expressions in connection with any discussion of the timing or nature of future operating or financial performance or other events. Forward looking statements reflect management’s current expectations and observations with respect to future events and financial performance. Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed, projected, or implied by those forward-looking statements. The principal factors that affect our financial position, results of operations and cash flows include, but are not limited to, charter market rates, which have recently increased to historic highs, periods of charter hire, vessel operating expenses and voyage costs, which are incurred primarily in U.S. dollars, depreciation expenses, which are a function of the cost of our vessels, significant vessel maintenance and improvement costs, our vessels’ estimated useful lives, and financing costs related to our indebtedness. Our actual results may differ materially from those anticipated in these forward looking statements as a result of certain factors which could include the following: (1) changes in demand in the dry-bulk market, including changes in production of, or demand for, commodities and bulk cargoes, generally or in particular regions; (2) greater than anticipated levels of dry-bulk vessel newbuilding orders or lower than anticipated rates of dry-bulk vessel scrapping; (3) changes in rules and regulations applicable to the dry-bulk industry, including legislation adopted by international bodies or organizations such as the International Maritime Organization and the European Union or by individual countries; (4) actions taken by regulatory authorities; (5) changes in trading patterns significantly affecting overall dry-bulk tonnage requirements; (6) changes in the typical seasonal variations in dry-bulk charter rates; (7) changes in the cost of other modes of bulk commodity transportation; (8) changes in general domestic and international political conditions; (9) changes in the condition of the Company’s vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking costs); (10) and other factors listed from time to time in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2006 and our Registration Statement on Form S-1/S-3 originally filed with the Securities SEC on June 19, 2006. We disclaim any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Executive Overview

We are an international provider of dry bulk marine transportation services that was incorporated in the Marshall Islands on January 13, 2005 and began operations in April 2005. As of June 30, 2007, we owned and operated a total fleet of 29 vessels, consisting of 11 Panamax vessels, 14 Kamsarmax vessels and 4 Capesize vessels. Of these 29 vessels, we acquired 10 in 2005, 13 in 2006, and 6 in the first six months of 2007. We have also entered into a contract to purchase a Capesize vessel with delivery in the third quarter of 2008. We are currently party to joint ventures, or expect to be party to joint ventures, that have contracted to purchase a total of 7 additional Capesize vessels, which are expected to be delivered in 2010.

Our dry bulk carriers transport a variety of cargoes including coal, iron ore and grain. Seventeen of our vessels are under time charter to a subsidiary of Bunge, a major agribusiness, until 2010. As of July 16, 2007, time charter rates have been agreed for all the vessels subject to the master time charter agreement, through 2010, the duration of the agreement.

As of June 30, 2007, our fleet had a combined carrying capacity of 2,644,043 deadweight tons (dwt) and a dwt-weighted-average age of approximately 4.2 years. Upon delivery of the eight vessels on order, we expect our fleet to have a combined carrying capacity of 4,086,043 dwt.

Results of Operations

Charters

We generate revenues by charging customers for the transportation of dry bulk cargo using our vessels. All our vessels are currently employed under time charters to well-established and reputable charterers. One vessel, Barbara, is on a variable-rate time charter, in which the charter hire is tied to prevailing spot rates. A time charter is a contract for the use of a vessel for a specific period of time during which the charterer pays substantially all of the voyage expenses, including port and canal charges and the cost of bunkers, but the vessel owner pays the vessel operating expenses. As of June 30, 2007, our

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charters had remaining terms of between 7 months and 60 months, based on the latest redelivery date. In addition, we may employ vessels in the spot market. Under a spot-market charter, the vessel owner pays both the voyage expenses (less specified amounts covered by the voyage charterer) and the vessel operating expenses. Vessels operating in the spot-charter market generate revenues that are less predictable than time charter revenues but may enable us to capture increased profit margins during periods of improvements in dry bulk rates. However, we would be exposed to the risk of declining dry bulk rates when operating in the spot market, which could have a materially adverse impact on our financial performance.

We use a number of operational metrics to measure our performance from period to period. These include fleet utilization, net daily revenues per ship per day, and vessel operating expenses per ship per day. Fleet utilization is calculated by dividing the number of our operating days during a period by the number of our ownership days during the period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning. Net daily revenue consists of our voyage and time charter revenues less voyage expenses during a period divided by the number of our available days during the period, net of commissions, including time charter amortization, which is consistent with industry standards. Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores, tonnage taxes and other miscellaneous expenses. To arrive at per ship per day amounts for net daily revenues and vessel operating expenses, we divide the aggregate amount by the ownership days in the period.

	Three Months Ended June 30,						Six Months Ended June 30,
	2007			2006			2007			2006
Fleet utilization		97.6	%		98.0	%		98.5	%		98.7	%
Net daily revenues per ship per day	$	22,950		$	20,523		$	22,460		$	21,651
Vessel operating expenses per ship per day	$	3,430		$	3,903		$	3,408		$	4,046

Logistics Operations

In December 2005, the Company formed a wholly owned subsidiary, Quintana Logistics LLC, to engage in chartering operations, including entry into contracts of affreightment. Under a contract of affreightment, Quintana Logistics would agree to ship a specified amount of cargo at a specified rate per ton between designated ports over a particular period of time. Contracts of affreightment generally do not specify particular vessels, so Quintana Logistics would be permitted either to use a free vessel that it owned or to charter in a third-party vessel. Quintana Logistics engaged in limited activities during the second quarter of 2006 and no activities during the second quarter of 2007.

Three Months Ended June 30, 2007 Compared to Three Months Ended June 30, 2006

Net Revenue

Net revenue for the three months ended June 30, 2007 were $59.7 million after brokerage commissions of $2.9 million, compared to $19.7 million after brokerage commissions of $0.9 million for the corresponding period in 2006, an increase of 203%. In the second quarter of 2007, all of our revenues were earned from time charters. One vessel, Barbara, is fixed on a variable-rate time charter, in which the charter hire is tied to prevailing spot rates. In the 2006 period, $19.0 million of our revenues were earned from time charters, and $1.6 million was earned from our Quintana Logistics operations. The increase in net revenue during the three months ended June 30, 2007 over the corresponding period in 2006 is primarily due to our operation of an average of 28.9 vessels during the 2007 period compared to operations during the corresponding 2006 period of an average of 10.0 ships. Our net daily revenues per ship per day for the total fleet for the second quarter of 2007 were $22,950, compared to $20,523 in the second quarter of 2006. The increase in the 2007 period was primarily due to higher average charter rates for the recently delivered vessels entering our fleet compared to the average TC rates on the vessels operating in the second quarter of 2006.

Commissions and Other Voyage Expenses

As is common in the dry bulk shipping industry, we pay commissions ranging from 0% to 6.25% of the total daily charter hire rate of each charter to unaffiliated ship brokers associated with the charterers, depending on the number of brokers involved with arranging the charter. For the three months ended June 30, 2007, our commissions totaled $2.9 million, compared to $0.9 million during the corresponding period in 2006, an increase of 222%. Commissions were higher for the second quarter of 2007 than for the corresponding period in 2006 principally because we operated more vessels in the 2007 period.

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We incurred no voyage expenses for the three months ended June 30, 2007 because we did not charter in any vessels in connection with the operations of Quintana Logistics. In the 2006 period, we incurred voyage expenses of $1.1 million attributable to our Quintana Logistics operations.

Vessel Operating Expenses

For the three months ended June 30, 2007, our vessel operating expenses were $9.0 million, or an average of $3,430 per ship per day, compared to operating expenses of $3.6 million during the corresponding period in 2006, or an average of $3,903 per ship per day. The 150% increase in total operating expenses for the 2007 period was primarily due to the enlargement of our fleet. Per ship per day operating expenses decreased, however, by 12.1%, primarily due to efficiencies associated with the acquisition of newer vessels, which incur less costs, and the enlargement of the fleet.

General and Administrative Expenses

For the three months ended June 30, 2007, we incurred $4.3 million of general and administrative expenses, compared to $2.5 million for the three months ended June 30, 2006 period, an increase of approximately 72%. Our general and administrative expenses include the salaries and other related costs of the executive officers and other employees, our office rents, legal and auditing costs, regulatory compliance costs, other miscellaneous office expenses, long-term compensation costs, and corporate overhead. Our general and administrative expenses for the three months ended June 30, 2007 were comparatively higher than those in the corresponding period in 2006 because of higher restricted-stock compensation and higher payroll, in part due to the increased staff hired to manage the larger fleet. For the three months ended June 30, 2007, general and administrative expenses represented 7% of our net revenues for the period, as compared to 12% for the corresponding period in 2006. The percentage reduction is principally due to operating efficiencies achieved by adding vessels to the fleet.

Depreciation

We depreciate our vessels based on a straight line basis over the expected useful life of each vessel, which is 25 years from the date of their initial delivery from the shipyard. Depreciation is based on the cost of the vessel less its estimated residual value, which is estimated at $220 per lightweight ton, at the date of the vessel’s acquisition, which we believe is common in the dry bulk shipping industry. Secondhand vessels are depreciated from the date of their acquisition through their remaining estimated useful life. However, when regulations place limitations over the ability of a vessel to trade on a worldwide basis, its useful life is adjusted to end at the date such regulations become effective. In the second quarter of 2007, we recorded $14.8 million of vessel depreciation charges, compared to $6.1 million in the 2006 period, an increase of 143%. We incurred significantly higher depreciation charges in the 2007 period than in the corresponding period in 2006 because of the increase in the average number of vessels we operated in the 2007 period. As a result of our agreement to purchase interests in an additional 8 vessels, we expect our depreciation charges to increase on a period-by-period basis as those vessels are delivered.

Drydocking

We capitalize the total costs associated with a drydocking and amortize these costs on a straightline basis through the expected date of the next drydocking, which is typically 30 to 60 months. Regulations or incidents may change the estimated dates of the next drydocking for our vessels. For the three months ended June 30, 2007, amortization expense related to drydocking totaled $0.6 million, compared to $0.1 million for the corresponding period in 2006. This increase was primarily due to the fact that we were amortizing drydocking expense for 7 vessels in the 2007 period, compared to 2 vessels in the corresponding period in 2006.

Interest Expense

We incurred $13.2 million of interest expense, net of capitalized interest of $0.5 million, in the second quarter of 2007, compared to $2.2 million in the corresponding 2006 period. The increase is primarily attributable to larger principal amounts outstanding under our revolving credit facility as a result of borrowings incurred to finance the Metrobulk acquisition between May 2006 and April 2007 and additional acquisitions that occurred after the second quarter of 2006 compared to amounts outstanding under our debt facilities in the second quarter of 2006.

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Interest-Rate Swap Gain

In the three months ended June 30, 2007, we recognized $11.1 million in unrealized swap gain attributable to the mark-to-market valuation of the interest-rate swap and interest-rate swap cash income of $0.4 million from the counterparty to the interest-rate swap. There was no corresponding gain or loss in the 2006 period because we did not have any swaps in place at that time. The gain on the swap is due to the increase in LIBOR during the period, to which the variable-rate portion of the swap is tied.

Net Income

Net income for the three months ended June 30, 2007 was $29.4 million, compared to $4.2 million for the corresponding period in 2006, an increase of 600%. The increase in net income during the second quarter of 2007 over the corresponding period in 2006 is primarily due to increased revenues in the 2007 period, resulting from our operation of more vessels during the 2007 period. The increase was also partly attributable to the $11.1million interest-rate swap gain discussed above.

Six Months Ended June 30, 2007 Compared to Six Months Ended June 30, 2006

Net Revenue

Net revenue for the six months ended June 30, 2007 was $107.5 million after brokerage commissions of $5.2 million, compared to $41.3 million after brokerage commissions of $1.8 million for the corresponding period in 2006, an increase of 160%. In the first six months of 2007, all of our revenue was earned from time charters. In the 2006 period, $39.9 million of our revenues were earned from time charters, and $3.2 million was earned from our Quintana Logistics operations. The increase in net revenue during the six months ended June 30, 2007 over the corresponding period in 2006 is primarily due to our operation of an average of 26.7 vessels during the 2007 period compared to operations during the corresponding 2006 period of an average of 10.0 ships. Our net daily revenues per ship per day for the total fleet for the first six months of 2007 were $22,460, compared to $21,651 in the first six months of 2006. The increase in the 2007 period was primarily due to higher average charter rates for the recently delivered vessels entering our fleet compared to the average TC rates on the vessels operating in the first half of 2006.

Commissions and Other Voyage Expenses

For the six months ended June 30, 2007, our commissions totaled $5.2 million, compared to $1.8 million during the corresponding period in 2006, an increase of 189%. Commissions were higher for the first six months of 2007 than for the corresponding period in 2006 principally because we operated more vessels in the 2007 period.

We incurred no voyage expenses in the first six months of 2007 because we did not charter in any vessels in connection with the operations of Quintana Logistics. In the 2006 period, we incurred voyage expenses of $2.6 million attributable to our Quintana Logistics operations.

Vessel Operating Expenses

For the six months ended June 30, 2007, our vessel operating expenses were $16.5 million, or an average of $3,408 per ship per day, compared to operating expenses of $7.3 million during the corresponding period in 2006, or an average of $4,046 per ship per day. The 126% increase in total operating expenses for the 2007 period was primarily due to the enlargement of our fleet. Per ship per day operating expenses decreased, however, by 16%, due primarily to efficiencies associated with the acquisition of newer vessels, which incur less operating costs, and the enlargement of the fleet.

General and Administrative Expenses

For the first six months of 2007, we incurred $7.9 million of general and administrative expenses, compared to $4.5 million for the 2006 period, an increase of approximately 76%. Our general and administrative expenses for the 2007 period were comparatively higher than those in the corresponding period in 2006 because of higher restricted-stock compensation and higher payroll, in part due to the increased staff hired to manage the larger fleet. In the first six months of 2007, general and administrative expenses represented 7% of our net revenues for the period, as compared to 11% for the corresponding period in 2006. The percentage reduction is principally due to operating efficiencies achieved by adding vessels to the fleet.

Depreciation

In the first six months of 2007, we recorded $26.8 million of vessel depreciation charges, compared to approximately $11.9 million in the 2006 period, an increase of 125%. We incurred significantly higher depreciation charges in the 2007 period than in the corresponding period in 2006 because of the increase in the average number of vessels we operated in the

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2007 period. As a result our agreement to purchase interests in an additional 8 vessels, we expect our depreciation charges to increase on a period-by-period basis as those vessels are delivered.

Drydocking

For the six months ended June 30, 2007, amortization expense related to drydocking totaled $1.0 million, compared to $0.2 million for the corresponding period in 2006. This increase was primarily due to the fact that we were amortizing drydocking expense for 7 vessels in the 2007 period, compared to 2 vessels in the corresponding period in 2006.

Interest Expense

We incurred $23.6 million of interest expense in the first six months of 2007, net of capitalized interest of $0.5 million, compared to $5.0 million in the corresponding 2006 period. The increase is primarily attributable to larger principal amounts outstanding under our revolving credit facility as a result of the Metrobulk acquisition and additional acquisitions that occurred after the first six months of 2006 compared to amounts outstanding under our debt facilities during the first six months of 2006.

Interest-Rate Swap Gain

In the six months ended June 30, 2007, we recognized $8.9 million in unrealized swap gain attributable to our interest-rate swap. There was no corresponding gain or loss in the 2006 period because we did not have any swaps in place at that time. The gain on the swap is due to the increase in LIBOR, to which the variable-rate portion of the swap is tied.

Net Income

Net income for the six months ended June 30, 2007 was $41.9 million, compared to $9.5 million for the corresponding period in 2006, an increase of 341%. The increase in net income during the first six months of 2007 over the corresponding period in 2006 is primarily due to increased revenues in the 2007 period, resulting from our operation of more vessels during the 2007 period. The increase in net income is also partly attributable to the unrealized interest-rate swap gain of $8.9 million discussed above.

Inflation

Inflation does not have significant impact on vessel operating or other expenses for vessels under time charter. We may bear the risk of rising fuel prices if we enter into spot-market charters or other contracts under which we bear voyage expenses. We do not consider inflation to be a significant risk to costs in the current and foreseeable future economic environment. However, should the world economy be affected by inflationary pressures this could result in increased operating and financing costs.

Liquidity and Capital Resources

Our stated goals have been to rapidly grow the Company and to provide consistent dividends to our stockholders. In late 2006, we began to pursue the acquisition of Capesize vessels as a result of steadily rising Asian demand for those vessels. As our revenues began to reflect the full effect of the chartering to Bunge of the 17 vessels we purchased from Metrobulk, we were able to take advantage of the rising Capesize market, purchasing Iron Miner in late 2006, Lowlands Beilun in early 2007, and agreeing to purchase a newbuilding Capesize for delivery in 2008. The purchases of these vessels exhausted borrowing capacity under our existing credit facility. Since we agreed to purchase these vessels, asset values in the Capesize sector have continued to rise. In order to take advantage of the rising demand for Capesize vessels, we have embarked on a newbuilding program to purchase additional vessels for delivery in 2010. Because we had determined not to increase our leverage significantly, we entered into joint ventures with our sponsors in order to take advantage of the rising market.

Cash and Capital Expenditures

We satisfy our working capital requirements with cash generated from operations. In the second quarter of 2007, we financed our capital requirements with cash from operations, cash proceeds from the exercise of warrants, and drawdowns under our revolving credit facility (including an increase in the capacity under that facility). In the corresponding period in 2006, we financed our capital requirements with borrowings under our old revolving credit facility. As of June 30, 2007, our cash balance was approximately $41.5 million, compared to a balance of approximately $3.6 million at the end of the second quarter of 2006. We have incurred a substantial amount of debt in connection with vessel acquisitions, resulting in a ratio of net debt to total capitalization of 64.1% as of June 30, 2007, compared to 58.2 % as of December 31, 2006. We believe that

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cash flow from operations, drawdowns under our revolving credit facility, and proceeds from the ongoing exercise of outstanding warrants will be sufficient to fund our working capital requirements for the next twelve months.

We intend to fund our future acquisition-related capital requirements principally through equity issuances, borrowings under our revolving credit facility, and borrowings under the loan facilities held at the joint-venture level and to repay all or a portion of such borrowings from time to time with a combination of cash from operations and the net proceeds of potential equity issuances. In addition, our joint venture partners will fund their respective portions of the vessels that we have agreed to purchase in connection with our newbuilding program.

Our existing and expected debt obligations discourage us from incurring significant capital expenditures that do not immediately generate cash, such as entry into shipbuilding contracts for the purchase of newbuildings. Consequently, if we wish to incur such obligations, we may be required to arrange alternative financing arrangements, such as the joint ventures we entered into with our sponsors subsequent to the end of the first quarter. The issuance of equity to consummate such transactions may dilute our earnings: for example, in connection with the acquisition of the 17 Metrobulk vessels in 2006, our lenders required us to issue a significant amount of equity, but we will not realize the full benefit of the cash flows generated by the additional ships until the third quarter of 2007. Consequently, the Metrobulk acquisition was dilutive to our earnings in 2006 and early 2007.

Net cash provided by operating activities was $83.8 million for the six months ended June 30, 2007, compared to $19.5 million for the first six months of 2006. Substantially all our cash from operating activities is generated under our time charters.

Net cash used in investing activities was $361.2 million for the first six months of 2007, compared to $73.7 million for the first six months of 2006. Of the cash used in investing activities for the 2007 period, $361.0 million was attributable to the acquisition of vessels and payment of advances for new buildings during the period.

Net cash provided by financing activities was $297.5 million for the first six months of 2007, compared to $53.5 million for the corresponding period in 2006. In the 2007 period, net cash provided by activities was attributable to borrowings under our revolving credit facility to finance the purchase of vessels delivered in the first half of 2007 and to proceeds from the exercise of warrants.

Sale-Leaseback Transaction

As described in Note 17 to the accompanying financial statements, on July 16, 2007, the Company executed memoranda of agreement and bareboat charters in connection with a sale-leaseback of seven of its Panamax vessels. Net proceeds from this transaction were approximately $250 million. $185 million of the proceeds were used to prepay debt outstanding under our revolving credit facility and the remaining $65 million were retained on the balance sheet as cash-on-hand. The cash-on-hand may be used for working capital purposes, as equity for the purchase of further vessels or for additional prepayments of debt.

Assuming that this transaction occurred as at June 30, 2007, the effect on our ratio of net debt to total capitalization as at June 30 would have been to reduce it from 64.1% to 55.8%.

Newbuildings Program

As described in Note 9 in the accompanying financial statements, the Company has entered into joint venture agreements to construct three Capesize newbuildings and expects to enter into joint venture agreements to construct an additional four Capesize newbuildings, all of which are expected to be delivered at various dates during 2010. In addition, as described in Note 3, the Company has also entered into an agreement to purchase a Capesize newbuilding which is expected to be delivered in 2008.

During the construction period, or upon delivery, the Company may enter into new financing facilities to cover pre-financing costs or delivery payments. Should such financing facilities be concluded, it is expected that, at least until delivery, our net debt to total capitalization ratio will increase.

As noted above however, our joint venture partners will be expected to contribute funds towards the cost of the newbuilding in proportion to their respective ownership percentages, with the exception of Christine Shipco LLC, for which the partners will contribute 100% of the funding requirements until the date of the vessel delivery.

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Dividends

Our policy is to declare and pay quarterly dividends to stockholders. Each year, our Board estimates a minimum annualized dividend, to be declared and paid quarterly, which is subject to reduction or elimination under certain circumstances, including restrictions under Marshall Islands law, covenants under our debt instruments, and changing market conditions. For 2007, our Board fixed a minimum annualized dividend of $0.96 per share. We paid an aggregate of $26.8 million and $10.1 million in dividends on our common stock the first six months of 2007 and 2006, respectively.

Contractual Obligations and Commercial Commitments

Contractual Obligations

The following table sets forth our expected contractual obligations and their maturity dates as of June 30, 2007 (in millions):

	Within One Year		One to Three Years		Three to Five Years		More Than Five Years		Total
Revolving credit facility	$	65.0	$	126.0	$	120.0	$	554.0	$	865.0
Interest on credit facility (1)		52.0		90.0		77.5		69.9		289.4
Acquisition of vessels (2)		36.6		45.8		—		—		82.4
Capital leases (3)		0.2		—		—		—		0.2
Company obligations to joint ventures (4)		47.0		144.0		75.0		—		266.0
Total	$	200.8	$	405.8	$	272.5	$	623.9	$	1,503.0

(1) The revolving credit facility bears interest at a variable rate based on LIBOR, but the Company has fixed the rate at 5.985% until December 31, 2010 in connection with its swap agreement. Interest payable from the expiration of the swap agreement until the expiration of the facility has been calculated using interest rate of 6.2%, the rate in effect as of June 30, 2007.

(2) Represents the advances payable to the seller of Iron Endurance. Refer to Note 3 for further details.

(3) Capital leases are made up of office leases in Athens and Geneva and an apartment lease in Geneva. The Athens office lease is Euro-denominated, and amounts shown are calculated in accordance with the rate of $1.35 to €1.00 as of June 30, 2007. Our Athens office lease has less than one year remaining on its original two-year term and we expect to sign an extension for the lease prior to its expiration. A new lease for additional space has been agreed for a further 1.5 years. Please refer to Note 17 of the accompanying consolidated financial statements for further details. The Geneva leases are Swiss Franc-denominated, and the amounts shown are calculated in accordance with the rate of $ 0.81 to CHF1.00 as of June 30, 2007. Our Geneva office lease expires November 2008, and the Geneva apartment lease expires in February 2008.

(4) Represents the Company’s contractual obligations for payments due to the joint ventures under the joint venture contracts. The following table sets forth the expected contractual obligations and their maturity dates (in millions) of the three joint ventures, including the portions payable by the Company’s partners, as of June 30, 2007:

	Within One Year		One to Three Years		Three to Five Years		More Than Five Years	Total
Royal Bank of Scotland credit facility (1)	$	22.2	$	7.6	$	—	—	$	29.8
Interest on Royal Bank of Scotland credit facility (2)		1.8		1.0		—	—		2.8
Advances due for Christine newbuilding (3)		10.9		50.7		—	—		61.6
Advances due for newbuilding STX vessels (4)		8.1		—		118.9	—		127.0
Advances due for newbuilding KSC vessels (5)		62.2		217.6		31.1	—		310.9
Total	$	105.2	$	276.9	$	150.00	—	$	532.1

(1) Represents the scheduled loan repayments to be made by the joint ventures under the loan facilities relating to Christine Shipco LLC, Lillie Shipco LLC, and Hope Shipco LLC (the “JV Loans”) for amounts drawn down under the facilities as at June 30, 2007. Refer to Note 8 of the accompanying consolidated financial statements for further information.

(2) Interest obligations on the JV Loans have been calculated using a weighted average interest rate of 6.5%, the most recent interest rate fixed for the loans.

(3) Represents the advances payable by Christine Shipco LLC to Imabari for the construction of the Capesize newbuilding. Under the joint venture agreement, the company is not required to pay any capital contributions to Christine Shipco LLC until delivery of the vessel. On delivery, the Company will pay approximately $36.2 million, which may be financed through a new loan facility, cash on hand, or both. Refer to Note 9 of the accompanying financial statements for further information.

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(4) Represents the advances payable by Hope Shipco LLC and Lillie Shipco LLC to STX for the construction of the 2 Capesize newbuildings. Refer to Note 9 of the accompanying financial statements for further information.

(5) Represents the advances payable to KSC for the construction of 4 Capesize newbuildings. Refer to Note 9 of the accompanying financial statements for further information.

Off-balance Sheet Arrangements

At June 30, 2007, we did not have any material off-balance sheet arrangements.

Critical Accounting Policies

Information regarding the Company’s Critical Accounting Policies is included in Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

Risks Related to our Business

• Our substantial debt levels may limit our flexibility in obtaining additional financing and in pursuing other business opportunities.

• As we expand our business, we may need to improve our operating and financial systems and will need to recruit suitable employees and crew for our vessels.

• Restrictive covenants in our revolving credit facility impose, and any future debt facilities will impose, financial and other restrictions on us.

• We will derive a substantial portion of the revenues generated by our fleet from Bunge, and the loss of that charterer or any time charter or any vessel could result in a significant loss of revenues and cash flow.

• We depend on Bunge, which is an agribusiness, for a substantial portion of revenues from our fleet and are therefore exposed to risks in the agribusiness market.

• We cannot assure you that our board of directors will declare dividends.

• Future sales of our common stock may result in a decrease in the market price of our common stock, even if our business is doing well.

• Our earnings may be adversely affected if we do not successfully employ our vessels on medium- or long-term time charters or take advantage of favorable opportunities in the spot market.

• We cannot assure you that we will be able to borrow further amounts under our revolving credit facility, which we may need to fund the acquisition of additional vessels.

• We may be in default under existing contracts to acquire vessels if we do not obtain additional financing.

• Servicing future indebtedness would limit funds available for other purposes, such as the payment of dividends.

• Unless we set aside reserves for vessel replacement, at the end of a vessel’s useful life our revenue will decline, which would adversely affect our cash flows and income.

• Purchasing and operating secondhand vessels may result in increased operating costs and reduced fleet utilization.

• Our acquisition of new vessels is subject to a number of conditions, which may delay our receipt of revenues.

• Delays in deliveries of newbuildings to be purchased could materially and adversely harm our operating results.

• When our time charters end, we may not be able to replace them promptly or with profitable ones.

• Charterers may default on time charters that provide for above-market rates.

• Contracts of affreightment may result in losses.

• The international dry-bulk shipping industry is highly competitive, and we may not be able to compete successfully for charters with new entrants or established companies with greater resources.

• We may be unable to retain key management personnel and other employees in the shipping industry, which may negatively impact the effectiveness of our management and results of operations.

• Our vessels may suffer damage and we may face unexpected costs, which could adversely affect our cash flow and financial condition.

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• The aging of our fleet may result in increased operating costs in the future, which could adversely affect our earnings.

• The shipping industry has inherent operational risks that may not be adequately covered by our insurance.

• If we acquire additional dry-bulk carriers and those vessels are not delivered on time or are delivered with significant defects, our earnings and financial condition could suffer.

• We depend upon a limited number of customers for a large part of our revenues and the loss of one or more of these customers could adversely affect our financial performance.

• We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations and to make dividend payments.

• We may not be able to draw down the full amount under our revolving credit facility if the market value of our vessels declines.

• Our substantial operations outside the United States expose us to political, governmental and economic instability, which could harm our operations.

• We are subject to regulation and liability under environmental laws that could require significant expenditures and affect our cash flow and net income.

• We are subject to international safety regulations and the failure to comply with these regulations may subject us to increased liability, may adversely affect our insurance coverage and may result in a denial of access to, or detention in, certain ports.

• Because we expect to generate all of our revenues in U.S. dollars but may incur a portion of our expenses in other currencies, exchange rate fluctuations could hurt our results of operations.

• The international dry-bulk shipping sector is extremely cyclical and volatile; these factors may lead to reductions and volatility in our charter hire rates, vessel values and results of operations.

• Charter hire rates in the dry-bulk sector are above historical averages and future growth will depend on continued economic growth in the world economy that exceeds the capacity of the growing world fleet’s ability to match it.

• Risks associated with operating oceangoing vessels could negatively affect our business and reputation, which could adversely affect our revenues and stock price.

• The operation of dry-bulk carriers has certain unique operational risks.

• Maritime claimants could arrest one or more of our vessels, which could interrupt our cash flow.

• Governments could requisition our vessels during a period of war or emergency, resulting in a loss of earnings.

• Increased inspection procedures and tighter import and export controls could increase costs and disrupt our business.

• An economic slowdown in Asia could have a material adverse effect on our business, financial position and results of operations.

• Seasonal fluctuations in industry demand could adversely affect our operating results and the amount of available cash with which we can pay dividends.

• World events could affect our results of operations and financial condition.

• We may earn United States source income that is subject to tax, thereby reducing our earnings.

• U.S. tax authorities could treat us as a “passive foreign investment company,” which could have adverse U.S. federal income tax consequences to U.S. holders.

• The preferential tax rates applicable to qualified dividend income are temporary, and the enactment of previously proposed legislation could affect whether dividends paid by us constitute qualified dividend income eligible for the preferential rate.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rates

Effective July 1, 2006, we entered into a swap transaction with respect to our revolving credit facility. Because the revolving credit facility provided for variable-rate interest, management determined that an interest-rate swap would best protect the Company from interest-rate risk on amounts outstanding under its revolving credit facility. This swap effectively insulates us from interest-rate risk relating to the floating rates payable under the facility until December 31, 2010, as we are

27

required to pay a fixed rate of 5.135%, exclusive of spread due our lenders. On December 31, 2010, the counterparty to the swap may exercise an option to lock our fixed rate at 5.00% through June 30, 2014. If the counterparty does not exercise this option, we will be exposed to interest-rate risk on the outstanding balance of the revolving credit facility at that time.

Additionally, we are subject to interest-rate risk relating to the floating-rate interest on the Lillie Shipco LLC and Hope Shipco LLC loan facilities with Royal Bank of Scotland. A 1% increase in LIBOR would have resulted in an increase in interest expense payable by the joint ventures for the three months ended June 30, 2007 of approximately $45,000.

We may have sensitivity to interest rate changes with respect to future debt facilities.

Currency and Exchange Rates

We expect to generate all of our revenue in U.S. Dollars. The majority of our operating expenses and management expenses are in U.S. Dollars, and we expect to incur up to approximately 20% of our operating expenses in currencies other than U.S. Dollars. This difference could lead to fluctuations in net income due to changes in the value of the U.S. Dollar relative to other currencies.

We were party to the following forward currency exchange contracts during the second quarter of 2007:

Contract Date	Notional Amount (€)	For Value	Rate ($/€)
October 6, 2006	1,000,000	June 29, 2007	1.2795
October 10, 2006	1,000,000	September 28, 2007	1.2725

In the future, we may enter into additional financial derivatives to mitigate the risk of exchange rate fluctuations.

ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, summarized and processed within time periods specified in the SEC’s rules and forms. As of the end of the period covered by this report (the “Evaluation Date”), we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and our chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based upon this evaluation, our chief executive officer and our chief financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective.

During the last fiscal quarter, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We have not been involved in any legal proceedings which may have, or have had a significant effect on our business, financial position, results of operations or liquidity, nor are we aware of any proceedings that are pending or threatened which may have a significant effect on our business, financial position, results of operations or liquidity. From time to time, we may be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. We expect that these claims would be covered by insurance, subject to customary deductibles. Those claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources.

ITEM 1A. RISK FACTORS

In addition to the risks described below, please see Item 2 of Part I, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Factors.”

If we do not adequately manage the construction of the newbuilding vessels, the vessels may not be delivered on time or in compliance with their specifications.

We have recently entered into contracts to purchase eight newbuilding vessels through wholly owned subsidiaries or through joint ventures in which we participate. We are obliged to supervise the construction of these vessels. If we are denied supervisory access to the construction of these vessels by the relevant shipyard or otherwise fail to adequately manage the shipbuilding process, the delivery of the vessels may be delayed or the vessels may not comply with their specifications, which could compromise their performance. Both delays in delivery and failure to meet specifications could result in lower revenues from the operations of the vessels, which could reduce our earnings.

Delays in deliveries of newbuildings under construction could materially and adversely harm our operating results and could lead to the termination of related time charter agreements.

We have recently entered into contracts to purchase eight newbuilding vessels through wholly owned subsidiaries or joint ventures in which we participate. Four of these vessels are under construction at Korea Shipyard Co., Ltd., a new shipyard for which there is no historical track record. The delivery of any one or more of these vessels could be delayed, which would delay our receipt of revenues under the time charters for these vessels, and thereby adversely affect our results of operations and financial condition. In addition, under some time charters, we may be required to deliver a vessel to the charterer even if the relevant newbuilding has not been delivered to us. If the delivery of the newbuildings is delayed, we may be required to enter into a bareboat charter at a rate in excess of the charterhire payable to us. If we are unable to deliver the newbuilding or a vessel that we have chartered at our cost, the customer may terminate the time charter which could adversely affect our results of operations and financial condition.

The delivery of the newbuildings could be delayed because of:

• work stoppages or other labor disturbances or other event that disrupts the operations of the shipbuilder;

• quality or engineering problems;

• changes in governmental regulations or maritime self-regulatory organization standards;

• lack of raw materials;

• bankruptcy or other financial crisis of the shipbuilder;

• a backlog of orders at the shipbuilder;

• hostilities, political or economic disturbances in the country where the vessels are being built;

• weather interference or catastrophic event, such as a major earthquake or fire;

29

• our requests for changes to the original vessel specifications;

• shortages of or delays in the receipt of necessary construction materials, such as steel;

• our inability to obtain requisite permits or approvals; or

• a dispute with the shipbuilder.

In addition, the shipbuilding contracts for the new vessels contains a “force majeure” provision whereby the occurrence of certain events could delay delivery or possibly terminate the contract. If delivery of a vessel is materially delayed or if a shipbuilding contract is terminated, it could adversely affect our results of operations and financial condition and our ability to pay dividends to our stockholders.

Some of our directors may have conflicts of interest because they are also directors of, or have economic interests in, certain of our joint ventures. The resolution of these conflicts of interest may not be in our or our stockholders’ best interest.

We have entered into a joint venture named Christine Shipco LLC with Robertson Maritime Investors LLC, or RMI, an affiliate of Corbin J. Robertson, Jr. and AMCIC Cape Holdings LLC, or AMCIC, an affiliate of Hans J. Mende, to purchase the Christine, a newbuilding Capesize drybulk carrier. In addition, we have entered into two additional joint ventures with AMCIC—Hope Shipco LLC and Lillie Shipco LLC—to purchase two newbuilding Capesize vessels. Furthermore, we expect to enter into four more joint ventures in the near term with AMCIC for the purpose of purchasing four additional newbuildings. It is currently anticipated that each of these joint ventures will enter into a management agreement with us for the provision of construction supervision prior to delivery of the relevant vessel and technical management of the relevant vessel subsequent to delivery.

Mr. Robertson is the chairman of our Board, the chairman of the CNG Committee of our Board and also serves as a director on the board of directors of Christine Shipco LLC. Members of Mr. Robertson’s family, including Corbin J. Robertson, III, a member of our Board, will also participate in the Christine Shipco LLC joint venture through Mr. Robertson. Mr. Mende is a member of our Board and serves on the board of directors of Christine Shipco LLC, Hope Shipco LLC and Lillie Shipco LLC and also will serve on the board of directors of each of the other four joint ventures described above. Stamatis Molaris, our chief executive officer, president and a member of our Board, will also serve as a director of Christine Shipco LLC, Hope Shipco LLC, Lillie Shipco LLC, and the four other joint ventures we expect to enter into with AMCIC.

While there is a conflicts committee in place to resolve actual and potential conflicts of interest, the presence of Mr. Robertson, Mr. Mende and Mr. Molaris on the board of directors of Christine Shipco LLC and the presence of Mr. Mende and Mr. Molaris on the board of directors of each of the other six joint ventures may create conflicts of interest because Mr. Robertson, Mr. Mende and Mr. Molaris have responsibilities to these joint ventures. Their duties as directors of the joint ventures may conflict with their duties as our directors regarding business dealings between the joint ventures and us. In addition, Mr. Robertson, Mr. Robertson III, and Mr. Mende each have a direct or indirect economic interest in Christine Shipco LLC, and Mr. Mende has direct or indirect economic interests in each of the other six joint ventures. Their economic interest in the joint ventures may conflict with their duties as our directors regarding business dealings between the joint ventures and us.

As a result of these joint venture transactions, conflicts of interest may arise between the joint ventures and us. These conflicts may include, among others, the following situations:

• each joint venture will be engaged in the business of chartering or rechartering its drybulk carrier and may compete with us for customers;

• Mr. Molaris, our chief executive officer, president, and a member of our Board, will also serve as a director of each of the seven joint ventures, which may result in his spending less time than is appropriate or necessary in order to manage our business successfully; and

• disputes may arise under the joint venture agreements and the related management agreement and resolutions of such disputes by our chief executive officer and members of our Board could be influenced by such individuals’ investment in or their capacity as members or directors of the joint ventures.

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I TEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

We held our annual meeting on May 4, 2007 in Athens, Greece. The two proposals presented for approval at the meeting were (1) the re-election of our eight existing directors as of May 4, 2006 and (2) the ratification of Deloitte. Hadjipavlou, Sofianos & Cambanis, S.A. as our independent auditors for the year ended December 31, 2007. As of the record date of the meeting, 56,018,720 shares of common stock were outstanding, and 43,317,953 shares were voted. Both proposals were approved. The votes were as follows:

Proposal	For	Against	Abstain/Withhold
I. Election of directors:
Corbin J. Robertson, Jr.	34,497,877	—	8,820,076
Hans J. Mende	33,494,614	—	9,823,477
S. James Nelson, Jr.	43,190,643	—	127,310
Corbin J. Robertson, III	34,533,864	—	8,784,809
Stamatis Molaris	34,538,589	—	8,779,364
Peter Costalas	43,193,030	—	124,923
Gurpal Singh Grewal	33,424,476	—	9,893,477
Joseph R. Edwards (1)	43,183,232	—	134,721
II. Ratification of Deloitte	43,185,647	69,367	62,939

(1) Mr. Edwards resigned from the Board of Directors of the Company effective May 17, 2007. The resignation has created a vacancy in the Board of Directors that the remaining directors expect to fill prior to the 2008 Annual Meeting of Stockholders.

ITEM 6. EXHIBITS

Exhibit No.		Description
3.1*	—	Amended and Restated Articles of Incorporation
3.2	—	Articles of Amendment of Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on August 17, 2006)
3.3*	—	Amended and Restated By-laws
4.1*	—	Form of Share Certificate
4.2*	—	Form of Unit Certificate
4.3**	—	Form of Warrant
4.4**	—	Statement of Designations
4.5**	—	Warrant Agreement

31

10.1*	—	Registration Rights Agreement
10.2**	—	Master Time Charter Party and Block Agreement dated November 21, 2005
10.3**	—	Novation Agreement
10.4*	—	Quintana Maritime Limited 2005 Stock Incentive Plan
10.5	—	Form of Employee Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 13, 2006)
10.6	—	Form of Director Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed January 13, 2006)
10.7	—	Revolving Credit Facility (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 6, 2005)
10.8	—	Services Agreement between Quintana Maritime Limited and Quintana Minerals Corporation, dated as of October 31, 2005 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 3, 2005)
10.9	—	Loan Agreement ($735 million revolving credit facility) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed by the Company on July 24, 2006)
10.10	—	Supplemental Agreement to Loan Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed by the Company on March 19, 2007)
10.11	—	Second Supplemental Agreement to Loan Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed by the Company on July 11, 2007)
10.12	—	Consultancy Agreement between Quintana Maritime Limited and Shipmanagement Consultants Inc. (incorporated by reference to Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the Year Ended December 31, 2006)
10.13	—	Limited Liability Company Agreement of Christine Shipco LLC (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed by the Company on April 9, 2007)
10.14	—	Limited Liability Company Agreement of Hope Shipco LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed by the Company on May 10, 2007)
10.15	—	Limited Liability Company Agreement of Lillie Shipco LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed by the Company on May 10, 2007)
10.16***	—	Shipbuilding Contract between Quintana Maritime Limited and Korea Shipyard Co., Ltd. (Hull No. 5)
10.17***	—	Shipbuilding Contract between Quintana Maritime Limited and Korea Shipyard Co., Ltd. (Hull No. 6)
10.18***	—	Shipbuilding Contract between Quintana Maritime Limited and Korea Shipyard Co., Ltd. (Hull No. 7)
10.19***	—	Shipbuilding Contract between Quintana Maritime Limited and Korea Shipyard Co., Ltd. (Hull No. 8)

32

31.1***	—	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer
31.2***	—	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer
32.1****	—	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer
32.2****	—	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer

* Incorporated by reference to the Company’s Registration Statement filed on Form S-1 (File No. 333-124576) with the Securities and Exchange Commission on July 14, 2005.

** Incorporated by reference to Amendment No. 1 to the Company’s Registration Statement filed on Form S-1 (File No. 333-135309) with the Securities and Exchange Commission on July 21, 2006.

*** Filed herewith

**** Furnished herewith

33

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 9^th day of August 2007.

QUINTANA MARITIME LIMITED
By:	/S/ STAMATIS MOLARIS
	STAMATIS MOLARIS
	Chief Executive Officer, President and Director
	(Principal Executive Officer)
	/S/ PAUL J. CORNELL
	PAUL J. CORNELL
	Chief Financial Officer
	(Principal Financial Officer; Principal Accounting Officer)

34

EXHIBIT INDEX

Exhibit No.		Description
3.1*	—	Amended and Restated Articles of Incorporation
3.2	—	Articles of Amendment of Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on August 17, 2006)
3.3*	—	Amended and Restated By-laws
4.1*	—	Form of Share Certificate
4.2*	—	Form of Unit Certificate
4.3**	—	Form of Warrant
4.4**	—	Statement of Designations
4.5**	—	Warrant Agreement
10.1*	—	Registration Rights Agreement
10.2**	—	Master Time Charter Party and Block Agreement dated November 21, 2005
10.3**	—	Novation Agreement
10.4*	—	Quintana Maritime Limited 2005 Stock Incentive Plan
10.5	—	Form of Employee Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 13, 2006)
10.6	—	Form of Director Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed January 13, 2006)
10.7	—	Revolving Credit Facility (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 6, 2005)
10.8	—	Services Agreement between Quintana Maritime Limited and Quintana Minerals Corporation, dated as of October 31, 2005 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 3, 2005)
10.9	—	Loan Agreement ($735 million revolving credit facility) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed by the Company on July 24, 2006)
10.10	—	Supplemental Agreement to Loan Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed by the Company on March 19, 2007)
10.11	—	Second Supplemental Agreement to Loan Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed by the Company on July 11, 2007)
10.12	—	Consultancy Agreement between Quintana Maritime Limited and Shipmanagement Consultants Inc. (incorporated by reference to Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the Year Ended December 31, 2006)
10.13	—	Limited Liability Company Agreement of Christine Shipco LLC (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed by the Company on April 9, 2007)
10.14	—	Limited Liability Company Agreement of Hope Shipco LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed by the Company on May 10, 2007)

35

10.15	—	Limited Liability Company Agreement of Lillie Shipco LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed by the Company on May 10, 2007)
10.16***	—	Shipbuilding Contract between Quintana Maritime Limited and Korea Shipyard Co., Ltd. (Hull No. 5)
10.17***	—	Shipbuilding Contract between Quintana Maritime Limited and Korea Shipyard Co., Ltd. (Hull No. 6)
10.18***	—	Shipbuilding Contract between Quintana Maritime Limited and Korea Shipyard Co., Ltd. (Hull No. 7)
10.19***	—	Shipbuilding Contract between Quintana Maritime Limited and Korea Shipyard Co., Ltd. (Hull No. 8)
31.1***	—	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer
31.2***	—	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer
32.1****	—	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer
32.2****	—	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer

* Incorporated by reference to the Company’s Registration Statement filed on Form S-1 (File No. 333-124576) with the Securities and Exchange Commission on July 14, 2005.

** Incorporated by reference to Amendment No. 1 to the Company’s Registration Statement filed on Form S-1 (File No. 333-135309) with the Securities and Exchange Commission on July 21, 2006.

*** Filed herewith

**** Furnished herewith

36

EX-10.16

Exhibit 10.16

SHIPBUILDING CONTRACT

FOR

THE CONSTRUCTION OF

ONE (1)

180,000 DWT CLASS BULK CARRIER

HULL NO. 0005

BETWEEN

QUINTANA MARITIME LIMITED

(AS BUYER)

AND

KOREA SHIPYARD CO., LTD.

(AS BUILDER)

SHIPBUILDING CONTRACT

THIS CONTRACT is made as of 3rd December, 2006 by and between QUINTANA MARITIME LIMITED, a company incorporated and existing under the laws of the Republic of the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Republic of the Marshall Islands MH96960 (hereinafter called “QML”) or a company to be nominated by QML pursuant to Article XV hereof (hereinafter called the “NOMINEE”)(QML until such nomination takes place and the NOMINEE following such nomination having taken place, in either case hereinafter called the “BUYER”), the party of the first part and KOREA SHIPYARD CO ., LTD ., a company organized and existing under the laws of the Republic of Korea, having its registered office at 1243-1, Yonsan-bong, Mokpo-City, Jeollanam-Do, Korea (hereinafter called the ‘BUILDER”), the party of the second part,

WITNESSETH:

In consideration of the mutual covenants contained herein, the BUILDER agrees to design, build, launch, equip and complete one (1) 180,000 DWT Class Bulk Carrier as described in Article 1 hereof (hereinafter called the “VESSEL”) at the BUILDER’S shipyard in Jindo, Korea (hereinafter called the “SHIPYARD”) and to deliver and sell the VESSEL to the BUYER, and the BUYER agrees to accept delivery of and purchase from the BUILDER the VESSEL, according to the terms and conditions hereinafter set forth:

2

INDEX

ARTICLE I	DESCRIPTION AND CLASS	4
ARTICLE II	CONTRACT PRICE	7
ARTICLE III	ADJUSTMENT OF THE CONTRACT PRICE	8
ARTICLE IV	INSPECTION AND APPROVAL	13
ARTICLE V	MODIFICATIONS CHANGES AND EXTRAS	19
ARTICLE VI	TRIALS AND COMPLETION	22
ARTICLE VII	DELIVERY	27
ARTICLE VIII	DELAYS AND EXTENSIONS OF TIME (FORCE MAJEURE)	31
ARTICLE IX	WARRANTY OF QUALITY	34
ARTICLE X	PAYMENT	39
ARTICLE XI	BUYER’S DEFAULT	45
ARTICLE XII	BUYER’S SUPPLIES	48
ARTICLE XIII	INSURANCE	50
ARTICLE XIV	DISPUTES AND ARBITRATION	52
ARTICLE XV	SUCCESSORS AND ASSIGNS	54
ARTICLE XVI	TAXES AND DUTIES	56
ARTICLE XVII	PATENTS, TRADEMARKS AND COPYRIGHTS	57
ARTICLE XVIII	INTERPRETATION AND GOVERNING LAW	58
ARTICLE XIX	NOTICES	59
ARTICLE XX	EFFECTIVENESS OF THIS CONTRACT	60
ARTICLE XXI	EXCLUSIVENESS	61
EXHIBIT A	LETTER OF GUARANTEE	63
EXHIBIT B	PERFORMANCE GUARANTEE	66

3

ARTICLE I     DESCRIPTION AND CLASS

1. Description

The VESSEL shall have the BUILDER’S Hull No. 0005 and shall be constructed, equipped and completed in accordance with the specifications (Ref. No. KSB-FS-002R0 dated 3^rd December, 2006) and the maker list (Ref. No. KSB-ML-002R0 dated 3^rd Dec., 2006) (hereinafter collectively called the “SPECIFICATIONS”) and the general arrangement plan (Ref. No. KSB-GA-002R0 dated 3^rd Dec., 2006) (hereinafter called the “PLAN”), which shall constitute an integral part of this CONTRACT.

The SPECIFICATIONS and the PLAN are intended to explain each other and anything shown on the PLAN and not stipulated in the SPECIFICATIONS or anything stipulated in the SPECIFICATIONS and not shown on the PLAN shall be deemed and considered as if included in both. Should there be any inconsistencies or contradictions between the SPECIFICATIONS and the PLAN, the SPECIFICATIONS shall prevail. Should there be any inconsistencies or contradictions between this CONTRACT and the SPECIFICATIONS, this CONTRACT shall prevail.

2. Basic Dimensions and Principal Particulars of the VESSEL

The basic dimensions anti principal particulars of the VESSEL shall be

Length, overall	maximum 292.0 M
Length, between perpendiculars	283.0 M
Breadth, moulded	45.0 M
Depth to Upper Deck, moulded	24.7 M
Design draft, moulded, in seawater of specific gravity of 1.025	16.5 M
Scantling draft, moulded, in seawater of specific gravity of 1.025	18.2 M
Deadweight on the above moulded

4

design draft of 16.5 M	about 159,000 M/T
Deadweight on the above moulded scantling draft of 18.2 M, guaranteed	179,700 M/T
Main propelling machinery	MAN-B&W 6S70 MC-C (Mark 7)
	MCR : 18,660 KW X 91.0 RPM
	NCR : 16,790 KW X 87.9 RPM
Service speed at 16.5 meters design draft at the condition of clean bottom and in calm and deep sea with main engine developing a NCR of 16,790 KW with fifteen per cent (15 %) sea margin, guaranteed	15.4 Knots
Fuel consumption of the main engine applying I.S.O. reference conditions to the result of official shop test at a NCR of 16,790 KW using marine diesel oil having lower calorific value of 42,700 KJ per Kg, guaranteed	166.7 gr/KW.HR

The details of the above particulars as well as the definitions and method of measurements and calculations are as indicated in the SPECIFICATIONS.

3. Classification, Rules and Regulations

(a) The VESSEL shall be built in compliance with the current rules and regulations of American Bureau of Shipping (hereinafter called the “CLASSIFICATION SOCIETY”), to be classed and registered as +A1(E), +AMS, Bulk Carrier CSR, SafeShip-CM, BC-A (holds 2, 4, 6 and 8 may be empty with maximum cargo density: 3.0t/m³), ESP, +ACCU, TCM, GRAB(20), UWILD, POT and also to comply with the rules, regulations and requirements of the other regulatory bodies described in the SPECIFICATIONS.

5

(b) The rules, regulations and requirements of the CLASSIFICATION SOCIETY and the regulatory bodies and the other relevant, regulations and requirement, if any, are to include their current ones that have been issued and are effective as of the date of signing this CONTRACT.

(c) The BUILDER shall arrange with the CLASSIFICATION SOCIETY for the assignment by the CLASSIFICATION SOCIETY of representative(s) to the VESSEL during construction. All fees and charges incidental to classification of the VESSEL in compliance with the above specified rules, regulations and requirements of this CONTRACT shall be for the account of the BUILDER.

(d) The decision of the CLASSIFICATION SOCIETY as to whether the VESSEL complies with the regulations of the CLASSIFICATION SOCIETY shall be final and binding upon the BUILDER and the BUYER.

4. Nationality of the VESSEL

The VESSEL shall be built and completed by the BUILDER for registration in the Marshall Islands and shall be registered by the BUYER at its own cost and expense under the laws of the Marshall Islands with its home port of Majuro at the time of its delivery and acceptance hereunder.

6

ARTICLE II     CONTRACT PRICE

The contract price of the VESSEL delivered to the BUYER at the SHIPYARD shall be United States Dollars Seventy Seven Million Seven Hundred Thousand (US $77,700,000) (hereinafter called the “CONTRACT PRICE”) which shall be paid plus any increases or less any decreases due to adjustment or modifications, if any, as set forth in this CONTRACT . The CONTRACT PRICE shall include payment for services in the inspection, tests, survey and classification of the VESSEL which will be rendered by the CLASSIFICATION SOCIETY and shall not include the cost of the BUYER’s SUPPLIES as stipulated in Article XII.

The CONTRACT PRICE also includes all costs and expenses for supplying all necessary drawings as stipulated in the SPECIFICATIONS except those to be furnished by the BUYER for the VESSEL in accordance with the SPECIFICATIONS.

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ARTICLE III     ADJUSTMENT OF THE CONTRACT PRICE

The CONTRACT PRICE of the VESSEL shall be adjusted as hereinafter set forth in the event of the following contingencies. It is hereby understood by both parties that any adjustment of the CONTRACT PRICE as provided for in this Article is by way of liquidated damages and not by way of penalty, the calculation of damage being deemed final.

1. Delayed Delivery

(a) No adjustment shall be made and the CONTRACT PRICE shall remain unchanged for the first thirty (30) days of the delay in delivery of the VESSEL [ending as of 12 o’clock midnight Korean Standard Time on the thirtieth (30th) day of delay] beyond the Delivery Date calculated as provided in Article VII.1. hereof.

(b) If delivery of the VESSEL is delayed more than thirty (30) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT, then, beginning at midnight of the thirtieth (30th) day after such due date, the CONTRACT PRICE of the VESSEL shall be reduced by United States Dollars Twenty Thousand (US $20,000) for each full day of delay.

However, unless the parties agree otherwise, the total amount of deduction from the CONTRACT PRICE shall not exceed the amount due to cover the delay of two hundred and forty (240) days after thirty (30) days of the delay in delivery of the VESSEL at the rate of deduction as specified hereinabove.

(c) But, if the delay in delivery of the VESSEL continues for a period of more than two hundred and seventy (270) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT then, in such event, and after such period has expired, the BUYER may, at its option, cancel this CONTRACT by serving upon the BUILDER a notice of cancellation by telegram, or facsimile to be confirmed by a

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registered letter via airmail directed to the BUILDER at the address given in this CONTRACT. Such cancellation shall be effective as of the date the notice thereof is received by the BUILDER. If the BUYER has not served the notice of cancellation after the aforementioned two hundred and seventy (270) days delay in delivery, the BUILDER may demand the BUYER to make an election in accordance with Article VIII.3. hereof.

(d) For the purpose of this Article, the delivery of the VESSEL shall be deemed to be delayed when and if the VESSEL, after taking into full account extension of the Delivery Date or permissible delays as provided in Article V, VI, VIII, XI, XII or elsewhere in this CONTRACT, is delivered beyond the date upon which delivery would then be due under the terms of this CONTRACT.

2. Insufficient Speed

(a) The CONTRACT PRICE of the VESSEL shall not be affected or changed, if the actual speed, as determined by trial runs more fully described in Article VI hereof, is less than the speed guaranteed under the terms of this CONTRACT and the SPECIFICATIONS provided such deficiency in actual speed is not more than three-tenths (3/10ths) of one (1) knot below the guaranteed speed.

(b) However, as for the deficiency of more than three-tenths (3/10ths) of one (1) knot in actual speed below the speed guaranteed under this CONTRACT, the CONTRACT PRICE shall be reduced as follows [Fractions of less than one-tenth (1/10th) of a knot shall be prorated]:

For the three-tenths (3/10ths) of a knot — a total sum of US $100,000

For the four-tenths (4/10ths) of a knot ——a total sum of US $175,000

For the five-tenths (5/10ths) of a knot —— a total sum of US $390,000

For the six-tenths (6/10ths) of a knot ——– a total sum of US $520,000

For the seven-tenths (7/10ths) of a knot —— a total sum of US $650,000

For the eight-tenths (8/10ths) of a knot —— a total sum of US $780,000

* The above figures are not cumulative.

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However, unless the parties agree otherwise, the total amount of reduction from the CONTRACT PRICE shall not exceed the amount due to cover the deficiency of eight-tenths (8/10ths) of one (1) knot below the guaranteed speed at the rate of reduction as specified above.

(c) If the deficiency in actual speed of the VESSEL is more than eight-tenths (8/10ths) of one (1) knot below the speed guaranteed under this CONTRACT, then the BUYER, at its option, may, subject to the BUILDER’s right to effect alterations or corrections as provided in Article VI 5 . hereof, cancel this CONTRACT or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for eight-tenths (8/10ths) of one (1) knot of deficiency only.

3. Excessive Fuel Consumption

(a) The CONTRACT PRICE shall not be affected or changed by reason of the fuel consumption of the VESSEL’s main engine, as determined by the engine manufacturer’s shop trial as per the SPECIFICATIONS being more than the guaranteed fuel consumption of the VESSEL’s main engine, if such excess is not more than five per cent (5%) over the fuel consumption guaranteed in Article I. 2 hereof.

(b) However, as for the excess of more than five per cent (5%) in the actual fuel consumption over the guaranteed fuel consumption of the VESSEL’s main engine the CONTRACT PRICE shall be reduced by United States Dollars Ninety Thousand (US $90,000), for each full one per cent (1%) increase in fuel consumption in excess of the said five per cent (5%) increase in fuel consumption [fractions of less than one per cent (1%) shall be prorated] . However, unless the parties agree otherwise, the total amount of reduction from the CONTRACT PRICE shall not exceed the amount due to cover the excess of ten per cent (10%) over the guaranteed fuel consumption of the VESSEL’s main engine at the rate of reduction as specified above.

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(c) If such actual fuel consumption exceeds the guaranteed fuel consumption of the VESSEL’s main engine by more than ten per cent (10%), the BUYER, at its option, may, subject to the BUILDER’s right to effect alterations or corrections as specified in Article VI . hereof, cancel this CONTRACT or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for the ten per cent (10%) increase only.

4. Deadweight below Contract Requirements

(a) The CONTRACT PRICE of the VESSEL shall not be affected or changed, if actual deadweight, determined as provided in this CONTRACT and the SPECIFICATIONS, is below the guaranteed deadweight of 179,700 metric tons on the moulded design draft of 18.2 meters required by this CONTRACT and the SPECIFICATIONS by an amount of 2,000 metric tons or less.

(b) However, should the deficiency in the actual deadweight of the VESSEL be in excess of 2,000 metric tons below the said guaranteed deadweight, then the CONTRACT PRICE of the VESSEL shall be reduced for each full one (1) metric ton [fractions of less than one (1) metric ton shall be disregarded] of decreased deadweight in excess of 2,000 metric tons by the sum of United States Dollars Seven Hundred (US $700) per metric ton. However, unless the parties agree otherwise, the total amount of deduction from the CONTRACT PRICE shall not exceed the amount due to cover the deficiency of 4,500 metric tons below the guaranteed deadweight hereinabove.

(c) If the deficiency in the deadweight of the VESSEL is more than 4,500 metric tons below the said guaranteed deadweight, then the BUYER, at its option, may, subject to the BUILDER’s right to effect alterations or corrections without the BUYER’s prior consent as specified in Article VI.5 . hereof, cancel this CONTRACT or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for 4,500 metric tons of deficiency only.

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5. EFFECT OF CANCELLATION

It is expressly understood and agreed by the parties hereto that in any case, if the BUYER cancels this CONTRACT under this Article, the BUYER shall not be entitled to any liquidated damages.

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ARTICLE IV    INSPECTION AND APPROVAL

1. Appointment of BUYER’s Representative

The BUYER shall timely despatch to and maintain at the SHIPYARD, at its own cost, expense and risk, one or more representatives (hereinafter each called the “BUYER’S REPRESENTATIVE”), who shall be duly accredited in writing by the BUYER to supervise adequately the construction by the BUILDER of the VESSEL, her equipment and all accessories. Before the commencement of any item of work under this CONTRACT, the BUILDER shall, whenever reasonably required, previously exhibit, furnish to, and within the limits of the BUYER’S REPRESENTATIVE’s authority, secure the approval from the BUYER’S REPRESENTATIVE of any and all plans and drawings prepared in connection therewith . Upon appointment of the BUYER’S REPRESENTATIVE, the BUYER shall notify the BUILDER in writing of the name and the scope of the authority of the BUYER’S REPRESENTATIVE.

2. Authority of the BUYER’s Representative

Such BUYER’S REPRESENTATIVE shall, at all times during working hours of the construction until delivery of the VESSEL, have the right to inspect the VESSEL, her equipment and all accessories, and work in progress, or materials utilized in connection with the construction of the VESSEL, wherever such work is being done or such materials are stored, for the purpose of determining that the VESSEL, her equipment and accessories are being constructed in accordance with the terms of this CONTRACT and/or the SPECIFICATIONS and the PLAN.

The BUYER’S REPRESENTATIVE shall, within the limits of the authority conferred upon him by the BUYER, make decisions or give advice to the BUILDER on behalf of the BUYER promptly on all problems arising out of, or in connection with, the construction of the VESSEL and generally act in a reasonable manner with a view to cooperating to the utmost with the BUILDER in the construction process of the VESSEL.

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The decision, approval or advice of the BUYER’S REPRESENTATIVE shall be deemed to have been given by the BUYER and once given shall not be withdrawn, revoked or modified except with consent of the BUILDER. Provided that the BUYER’S REPRESENTATIVE or his assistants shall comply with the foregoing obligations, no act or omission of the BUYER’S REPRESENTATIVE or his assistants shall, in any way, diminish the liability of the BUILDER under Article IX (WARRANTY OF QUALITY). The BUYER’S REPRESENTATIVE shall notify the BUILDER promptly in writing of his discovery of any construction or materials, which he believes do not or will not conform to the requirements of the CONTRACT, the SPECIFICATIONS and the PLAN and likewise advise and consult with the BUILDER on all matters pertaining to the construction of the VESSEL, as may be required by the BUILDER, or as he may deem necessary.

However, if the BUYER’S REPRESENTATIVE fails to submit to the BUILDER without delay any such demand concerning alterations or changes with respect to the construction, arrangement or outfit of the VESSEL, which the BUYER’S REPRESENTATIVE has examined, inspected or attended at the test thereof under this CONTRACT or the SPECIFICATIONS and the PLAN, the BUYER’S REPRESENTATIVE shall be deemed to have approved the same and shall be precluded from making any demand for alterations, changes, or complaints with respect thereto at a later date.

The BUILDER shall comply with any such demand which is not contradictory to this CONTRACT, the SPECIFICATIONS or the PLAN, provided that any and all such demands by the BUYER’S REPRESENTATIVE with regard to construction, arrangement and outfit of the VESSEL shall be submitted in writing to the authorized representative of the BUILDER. The BUILDER shall notify the BUYER’S REPRESENTATIVE of the names of the persons who are from time to time authorized by the BUILDER for this purpose .

It is agreed upon between the BUYER and the BUILDER that the modifications, alterations or changer and other measures necessary to comply with such demand may be effected at a convenient time and place at the BUILDER’s reasonable discretion in view of the construction schedule of the VESSEL.

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In the event that the BUYER’S REPRESENTATIVE shall advise the BUILDER that he has discovered or believes the construction or materials do not or will not conform to the requirements of this CONTRACT and the SPECIFICATIONS or the PLAN, and the BUILDER shall not agree with the views of the BUYER’S REPRESENTATIVE in such respect, either the BUYER or the BUILDER may, with the agreement of the other party, seek an opinion of the CLASSIFICATION SOCIETY or failing such agreement, request an arbitration in accordance with the provisions of Article XIV hereof. The Principal Surveyor of the CLASSIFICATION SOCIETY or the arbitration tribunal, as the case may be, shall determine whether or not a nonconformity with the provisions of this CONTRACT, the SPECIFICATIONS and the PLAN exists.

3. Approval of Drawings

(a) The BUILDER shall submit to the BUYER three (3) copies of each of the plans and drawings to be submitted to the BUYER for its approval at its address as set forth in Article XIX hereof. The BUYER shall, within twenty one (21) calendar days after receipt thereof return to the BUILDER one (1) copy of such plans and drawings with the approval or comments, if any, of the BUYER. A list of the plans and drawings to be so submitted to the BUYER shall be mutually agreed upon between the parties hereto.

(b) When and if the BUYER’S REPRESENTATIVE shall have been sent by the BUYER to the SHIPYARD in accordance with Paragraph 1 of this Article, the BUILDER may submit the remainder, if any, of the plans and drawings in the agreed list, to the BUYER’S REPRESENTATIVE for his approval, unless otherwise agreed upon between the parties hereto.

The BUYER’S REPRESENTATIVE shall, within seven (7) days after receipt thereof, return to the BUILDER one (1) copy of such plans and drawings with his approval or comments written thereon, if any. Approval by the BUYER’S REPRESENTATIVE of the plans and drawings duly submitted to him shall be deemed to be the approval by the BUYER for all purposes of this CONTRACT.

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(c) In the event that the BUYER or the BUYER’S REPRESENTATIVE shall fail to return the plans and drawings to the BUILDER within the time limit as hereinabove provided, such plans and drawings shall be deemed to have been automatically approved without any comment. In the event the plans and drawings submitted by the BUILDER to the BUYER or the BUYER’S REPRESENTATIVE in accordance with this Article do not meet with the BUYER’s or the BUYER’S REPRESENTATIVE’s approval, the matter may be submitted by either party hereto for determination pursuant to Article XIV hereof. If the BUYER’s comments on the plans and drawings that are returned to the BUILDER by the BUYER within the said time limit are not clearly specified or detailed, the BUILDER shall be entitled to place its own interpretation on such comments in implementing them.

4. Salaries and Expenses

All salaries and expenses of the BUYER’S REPRESENTATIVE or any other person or persons employed by the BUYER hereunder shall be for the BUYER’s account.

5. Responsibility of the BUILDER

(a) The BUILDER shall provide the BUYER’S REPRESENTATIVE and his assistants free of charge with suitably furnished office space equipped with air conditioning at, or in the vicinity of, the SHIPYARD together with access to telephone and facsimile facilities as may be necessary to enable the BUYER’S REPRESENTATIVE and his assistants to carry out their work under this CONTRACT. However, the BUYER shall pay for the telephone or facsimile facilities used by the BUYER’S REPRESENTATIVE or his assistants.

The BUILDER, its employees, agents and subcontractors, during its working hours until delivery of the VESSEL, shall arrange for them to have free and ready access to the VESSEL, her equipment and accessories, and to any other place (except the areas controlled for the purpose of national security) where work is being done, or materials are being processed or stored in connection with the construction of the VESSEL including the premises of sub-contractors.

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The BUYER’S REPRESENTATIVE or his assistants or employees shall observe the work’s rules and regulations prevailing at the BUILDER’s and its sub-contractor’s premises. The BUILDER shall promptly provide to the BUYER’S REPRESENTATIVE and/or his assistants and shall ensure that its sub-contractors shall promptly provide all such information as he or they may reasonably request in connection with the construction of the VESSEL and her engines, equipment and machinery.

(c) The BUYER’S REPRESENTATIVE and his assistants shall at all times remain the employees of the BUYER. The BUILDER shall not be liable to the BUYER or the BUYER’S REPRESENTATIVE or to his assistants or to the BUYER’s employees or agents for personal injuries, including death, during the time they, or any of them, are on the VESSEL, or within the premises of either the BUILDER or its sub-contractors, or are otherwise engaged in and about the construction of the VESSEL, unless, however, such personal injuries, including death, are caused by the gross negligence of the BUILDER, its sub-contractors, or its or their employees or agents. The BUILDER shall not be liable to the BUYER for damages to, or destruction of property of the BUYER or of the BUYER’S REPRESENTATIVE or his assistants or the BUYER’s employees or agents, unless such damages, loss or destruction is caused by the gross negligence of the BUILDER, its sub-contractors, or its or their employees or agents.

6. RESPONSIBILITY OF THE BUYER

The BUYER shall undertake and assure that the BUYER’S REPRESENTATIVE shall carry out his duties, hereunder in accordance with the normal international shipbuilding practice and in such way so as to avoid any unnecessary increase in building cost, delay in the construction of the VESSEL and/or any disturbance in the construction schedule of the BUILDER.

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The BUILDER has the right to request the BUYER to replace the Representative who is deemed unsuitable and unsatisfactory for the proper progress of the VESSEL’s construction. The BUYER shall investigate the situation by sending its representative(s) to the SHIPYARD if necessary, and if the BUYER consider that such BUILDER’s request is justified, the BUYER shall effect such replacement as soon as conveniently arrangeable.

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ARTICLE V     MODIFICATIONS, CHANGES AND EXTRAS

1. How Effected

Minor modifications or changes to the SPECIFICATIONS and the PLAN under which the VESSEL is to be constructed may be made at any time hereafter by written agreement of the parties hereto. Any modification or change requested by the BUYER which does not affect the frame-work of the SPECIFICATIONS shall be agreed to by the BUILDER if the BUYER agrees to adjustment of the CONTRACT PRICE, deadweight and/or cubic capacity, speed requirements, the DELIVERY DATE and other terms and conditions of this CONTRACT reasonably required as a result of such modification or change. The BUILDER has the right to continue construction of the VESSEL on the basis of the SPECIFICATIONS and the PLAN until the BUYER has agreed to such adjustments. The BUILDER shall be entitled to refuse: to make any alteration, change or modification of the SPECIFICATIONS and/or the PLAN requested by the BUYER, if the BUYER does not agree to the aforesaid adjustments within fourteen (14) days of the BUILDER’s notification of the same to the BUYER, or, if, in the BUILDER’s judgement, the compliance with such request of the BUYER would cause an unreasonable disruption of the normal working schedule of the SHIPYARD.

The BUILDER, however, agrees to exert its efforts to accommodate such reasonable request by the BUYER so that the said change and modification shall be made at a reasonable cost and within the shortest period of time reasonably possible. The aforementioned agreement to modify and change the SPECIFICATIONS and the PLAN may be effected by exchange of letters or facsimiles manifesting the agreement.

The letters and facsimiles exchanged by the parties pursuant to the foregoing shall constitute an amendment to this CONTRACT, the SPECIFICATIONS or the PLAN under which the VESSEL shall be built. Upon consummation of such an agreement to modify and change the SPECIFICATIONS or the PLAN, the BUILDER shall alter the construction of the VESSEL in accordance therewith including any addition to, or deduction from, the work to be performed in connection with such construction.

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2. Substitution of Material

If any materials, machinery of equipment required for the construction of the VESSEL by the SPECIFICATIONS and the PLAN or otherwise under this CONTRACT cannot be procured in time to meet the BUILDER’S construction schedule for the VESSEL, or are in short supply, or are unreasonably high in price compared with the prevailing international market price, the BUILDER may supply, subject to the BUYER’S prior written approval, other materials, machinery or equipment of equal and effect capable of meeting the Rules and Regulations of the CLASSIFICATION SOCIETY and other regulatory bodies. The BUILDER shall not, however, be relieved of its obligations if such non-availability could have been for seen or occasioned by forward planning. In this case, the BUILDER shall not be entitled to an extension of the DELIVERY DATE or to increase in the CONTRACT PRICE by reason of such non-availability.

3. Changes in Rules and Regulations

If the specified rules and regulations with which the construction of the VESSEL is required to comply are altered or changed after the date of this CONTRACT by the CLASSIFICATION SOCIETY or bodies authorized to make such alterations or changes, either the BUYER or the BUILDER, upon receipt of due notice thereof, shall forthwith give notice thereof to the other party in writing. Thereupon, within ten (10) days after giving the notice to the BUILDER or receiving the notice from the BUILDER, the BUYER shall advise the BUILDER as to the alterations and changes, if any, to be made on the VESSEL which the BUYER, in its sole discretion, shall decide. The BUILDER shall not be obliged to comply with such alterations and/or changes if the BUYER fails to notify the BUILDER of its decision within the time limit stated above.

The BUILDER shall comply promptly with the said request of the BUYER, provided that the BUILDER and the BUYER shall first agree to:

(a) any increase or decrease in the CONTRACT PRICE of the VESSEL that is occasioned by such compliance;

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(b) any extension or advancement in the DELIVERY DATE of the VESSEL that is occasioned by such compliance;

(c) any increase or decrease in the deadweight and/or cubic capacity of the VESSEL, if such compliance results in any increase or reduction in the deadweight and/or cubic capacity;

(d) adjustment of the speed requirements if such compliance results in any increase or reduction in the speed; and

(e) any other alterations in the terms of this CONTRACT or of the SPECIFICATIONS and the PLAN or both, if such compliance makes such alterations of the terms necessary.

Any delay in the construction of the VESSEL caused by the BUYER’s delay in making a decision or agreement as above shall constitute a permissible delay under this CONTRACT. Such agreement by the BUYER shall be effected in the same manner as provided above for modification and change of the SPECIFICATIONS and the PLAN.

This paragraph does not refer to alterations or changes of rules and regulations of the CLASSIFICATION SOCIETY which were announced to the BUILDER in writing by the CLASSIFICATION SOCIETY on or before the date of signing of this CONTRACT.

The BUILDER may, at its sole discretion and responsibility, subcontract any part of the construction work of the VESSEL. The BUYER shall be informed by the BUILDER accordingly about the place where the subcontracting work is to be carried out in advance so that supervision can be performed properly.

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ARTICLE VI    TRIALS AND COMPLETION

1. Notice

The BUILDER shall notify the BUYER in writing or by facsimile at least fourteen (14) days in advance of the time and place of the trial run of the VESSEL. Such notice shall specify the place from which the VESSEL will commence her trial run and approximate date upon which the trial run is expected to take place. Such date shall be further confirmed by the BUILDER five (5) days in advance of the trial run by facsimile. The BUYER shall confirm in writing to the BUILDER that the VESSEL is ready for sea trials. In case of dispute between the parties whether the VESSEL is ready for sea trials the decision of the representative of the CLASSIFICATION SOCIETY is binding.

The BUYER’S REPRESENTATIVE, who is to witness the performance of the VESSEL during such trial run, shall be present at such place on the date specified in such notice. Should the BUYER’S REPRESENTATIVE fail to be present after the BUILDER’s due notice to the BUYER as provided above, the BUILDER shall be entitled to conduct such trial run with the presence of the representative(s) of the CLASSIFICATION SOCIETY only without the BUYER’S REPRESENTATIVE being present. In such case, the BUYER shall be obliged to accept the VESSEL on the basis of a certificate issued by the BUILDER that the VESSEL, after the trial run, subject to alterations and corrections, if necessary, has been found to conform with the SPECIFICATIONS and this CONTRACT and is satisfactory in all respects, provided the BUILDER first makes such corrections and alterations promptly.

2. Weather Condition

In the event of unfavorable weather on the date specified for the trial run, the trial run shall take place on the first available day that weather conditions permit. The parties hereto recognize that the weather conditions in Korean waters, in which the trial run is to take place, are such that great changes in weather may arise momentarily and without warning and therefore, it is agreed that if, during the trial

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runs, the weather should become so unfavorable that the trial run cannot be continued, then the trial run shall be discontinued and postponed until the first favorable day next following, unless the BUYER shall assent to the acceptance of the VESSEL by notification in writing on the basis of such trial run so far made prior to such change in weather conditions. Any delay of the trial run caused by such unfavorable weather conditions shall also operate to extend the DELIVERY DATE of the VESSEL for the period of delay occasioned by such unfavorable weather conditions.

3. How Conducted

All expenses in connection with the trials of the VESSEL are to be for the account of the BUILDER, which, during the trials, is to provide at its own expense the necessary crew to comply with conditions of safe navigation. The trials shall be conducted in the manner prescribed in this CONTRACT and the SPECIFICATIONS, and shall prove fulfilment of the performance requirements for the trials as set forth in the SPECIFICATIONS.

The BUILDER shall be entitled to conduct preliminary sea trials, during which the propulsion plant and/or its appurtenance shall be adjusted according to the BUILDER’s judgement. The BUILDER shall have the right to repeat any trial whatsoever as it deems necessary. Furthermore the BUYER’s REPRESENTATIVE is entitled to participate in any preliminary sea trials conducted by the BUILDER.

4. Consumable Stores

The BUILDER shall load the VESSEL with the required quantity of fuel oil, lubricating oil and greases, fresh water, and other stores necessary to conduct the trials as set forth in the SPECIFICATIONS. The necessary ballast (fuel oil, fresh water and such other ballast as may be required) to bring the VESSEL to the trial load draft, as specified in the SPECIFICATIONS, shall be supplied and paid for by the BUILDER whilst lubricating oil and greases shall be supplied and paid for by the BUYER within the time advised by the BUILDER for the conduct of sea trials as well as for use before the delivery of the VESSEL to the BUYER. The fuel oil as well as lubricating oil and greases shall be in accordance with the

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engine specifications and the BUYER shall decide and advise the BUILDER of the supplier’s name for lubricating oil and greases before the work-commencement of the VESSEL, provided that the supplier shall be acceptable to the BUYER and/or the makers of all the machinery.

Any fuel oil, fresh water or other consumable stores furnished and paid for by the BUILDER for trial runs remaining on board the VESSEL, at the time of acceptance of the VESSEL by the BUYER, shall be bought by the BUYER from the BUILDER at the BUILDER’s purchase price for such supply in Korea and payment by the BUYER thereof shall be made at the time of delivery of the VESSEL. The BUILDER shall pay the BUYER at the time of delivery of the VESSEL for the consumed quantity of any lubricating oil and greases which were furnished and paid for by the BUYER at the BUYER’s purchase price thereof. The consumed quantity of lubricating oils and greases shall be calculated on the basis of the difference between the remaining amount, including the same remaining in the main engine, other machinery and their pipes, stern tube and the like, and the supplied amount.

5. Acceptance or Rejection

(a) If, during any sea trial, any breakdown occurs entailing interruption or irregular performance which can be repaired on board, the trial shall be continued after such repairs and be valid in all respects.

(b) However, if, during or after the trial run, it becomes apparent that the VESSEL or any part of her equipment requires alterations or corrections which but for this provision would or might entitle the BUYER to cancel this CONTRACT, the BUILDER shall notify the BUYER promptly in writing or by facsimile to such effect and shall simultaneously advise the BUYER of the estimated additional time required for the necessary alterations or corrections to be made.

The BUYER shall, within two (2) days of receipt from the BUILDER of notice of completion of such alterations or corrections and after such further trials or tests as necessary, notify the BUILDER in writing or by

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facsimile confirmed in writing of its acceptance, qualified acceptance or rejection of the VESSEL, all in accordance with the SPECIFICATIONS and the PLAN and this CONTRACT, and shall not be entitled to reject the VESSEL on such grounds until such time.

(c) Save as above provided, the BUYER shall, within two (2) days after completion of the trial run, notify the BUILDER in writing or by facsimile confirmed in writing of its acceptance of the VESSEL or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS and the PLAN or this CONTRACT.

If the BUILDER is in agreement with the BUYER’s determinations as to non-conformity, the BUILDER shall make such alterations or changes as may be necessary to correct such non-conformity and shall prove the fulfilment of this CONTRACT and the SPECIFICATIONS by such tests or trials as may be necessary.

The BUYER shall, within two (2) days after completion of such tests and/or trials, notify the BUILDER in writing or by facsimile confirmed in writing of its acceptance or rejection of the VESSEL.

(d) However, the BUYER shall not be entitled to reject the VESSEL by reason of any minor or insubstantial items judged from the point of view of standard shipbuilding and shipping practice as not being in conformity with the SPECIFICATIONS, but, in that case, the BUILDER shall not be released from the obligation to correct and/or remedy such minor or insubstantial items as soon as practicable after the delivery of the VESSEL.

6. Effect of Acceptance

The BUYER’s written, or facsimile notification of acceptance delivered to the BUILDER as above provided, shall be final and binding insofar as conformity of the VESSEL to this Contract and the SPECIFICATIONS is concerned and shall preclude the BUYER from refusing formal delivery of the VESSEL as hereinafter

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provided, if the BUILDER complies with all conditions of delivery, as herein set forth and provided that, in the case of qualified acceptance, any matters which were mentioned in the notice of the qualified acceptance by the BUYER as requiring correction have been corrected satisfactorily.

If the BUYER fails to notify the BUILDER of its acceptance or rejection of the VESSEL as hereinabove provided, the BUYER shall be deemed to have accepted the VESSEL. Nothing contained in this Article shall preclude the BUILDER from exercising any and all rights which the BUILDER has under this CONTRACT if the BUILDER disagrees with the BUYER’s rejection of the VESSEL or any reasons given for such rejection, including arbitration provided in Article XIV hereof.

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ARTICLE VII    DELIVERY

1. Time and Place

The VESSEL shall be delivered by the BUILDER to the BUYER at the SHIPYARD, safely afloat on 16^th May, 2010 (hereinafter called the “DELIVERY DATE”) after completion of satisfactory trials and acceptance by the BUYER in accordance with the terms of Article VI, except that, in the event of delays in delivery of the VESSEL by the BUILDER due to causes which under the terms of this CONTRACT permit extensions of the time for delivery of the VESSEL, the aforementioned DELIVERY DATE shall be extended accordingly. The BUILDER shall have the right to deliver the VESSEL earlier than the DELIVERY DATE, but not earlier than the day falling 60 days prior to the DELIVERY DATE and provided always that the BUILDER shall have completed the VESSEL in accordance with the terms of this CONTRACT and the SPECIFICATIONS and PLAN and after completion of satisfactory trials and acceptance by the BUYER in accordance with the terms of Article VI hereof.

2. When and how Effected

Provided that the BUYER shall concurrently with delivery of the VESSEL release to the BUILDER the DELIVERY INSTALMENT as set forth in Article X.2. hereof and shall have fulfilled all of its obligations provided for in this CONTRACT, delivery of the VESSEL shall be forthwith effected upon acceptance thereof by the BUYER, as hereinabove provided, by the concurrent delivery by each of the parties hereto to the other of a PROTOCOL OF DELIVERY AND ACCEPTANCE acknowledging delivery of the VESSEL by the BUILDER and acceptance thereof by the BUYER, which PROTOCOL OF DELIVERY AND ACCEPTANCE shall be prepared in duplicate and signed by each of the parties hereto.

3. Documents to be Delivered to the BUYER

Upon delivery and acceptance of the VESSEL, the BUILDER shall deliver to the BUYER the following documents, which shall accompany the aforementioned PROTOCOL OF DELIVERY AND ACCEPTANCE:

(a) PROTOCOL OF TRIALS of the VESSEL made pursuant to this CONTRACT and the SPECIFICATIONS,

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(b) PROTOCOL OF INVENTORY of the equipment of the VESSEL, including spare parts, all as specified in the SPECIFICATIONS,

(c) PROTOCOL OF STORES OF CONSUMABLE NATURE, such as all fuel oil and fresh water remaining in tanks if its cost is charged to the BUYER under Article VI.4. hereof,

(d) DRAWINGS AND PLANS pertaining to the VESSEL as stipulated in the SPECIFICATIONS, which shall be furnished to the BUYER at no additional cost,

(e) ALL CERTIFICATES required to be furnished upon delivery of the VESSEL pursuant to this CONTRACT, the SPECIFICATIONS and the customary shipbuilding practice, including

(i) Classification Certificate

(ii) Safety Construction Certificate

(iii) Safety Equipment Certificate

(iv) Safety Radiotelegraphy Certificate

(v) International Loadline Certificate

(vi) International Tonnage Certificate

(vii) Suez Canal Tonnage Certificate

(viii) De-ratting Exemption Certificate

(ix) I.O.P.P. Certificate

(x) BUILDER’s Certificate

(xi) Deadweight Certificate (issued by the BUILDER)

However, it is agreed by the parties that if the Classification Certificate and/or other certificates are not available at the time of delivery of the VESSEL, provisional certificates shall be accepted by the BUYER, provided that the BUILDER shall furnish the BUYER with formal certificates as promptly as possible after such formal certificates have been issued.

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(f) DECLARATION OF WARRANTY of the BUILDER that the VESSEL is delivered to the BUYER free and clear of any liens, claims, mortgages, or other encumbrances upon the BUYER’s title thereto, and in particular, that the VESSEL is absolutely free of all burdens in the nature of imposts, taxes, or charges imposed by the Korean governmental authorities as well as of all liabilities of the BUILDER to its sub-contractors and employees and of all liabilities arising from the operation of the VESSEL in trial runs, or otherwise, prior to delivery except as otherwise provided under this CONTRACT.

(g) BILL OF SALE by the BUILDER to the BUYER transferring title to the VESSEL from the BUILDER to the BUYER, such Bill of Sale to be duly notarised and apostilled.

(h) Power of Attorney of the BUILDER authorising the execution of all documents listed in the Article VII, such Power of Attorney to be duly notarised and apostilled.

4. Tender of the VESSEL

If the BUYER fails to take delivery of the VESSEL after completion thereof according to this CONTRACT and the SPECIFICATIONS, the BUILDER shall have the right to tender delivery of the VESSEL after compliance with all procedural requirements as provided above.

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5. Title and Risk

Title and risk shall pass to the BUYER upon delivery of the VESSEL being effected as stated above and the BUILDER shall be free of all responsibility or liability whatsoever related with this CONTRACT except for the warranty of quality contained in Article IX and the obligation to correct and/or remedy, as provided in Article VI.5.(d), if any, it being expressly understood that, until such delivery is effected, the VESSEL and equipment thereof are at the entire risk of the BUILDER including but not confined to, risks of war, insurrection and seizure by Governments or Authorities, whether Korean or foreign, and whether at war or at peace . The title to the BUYER’S SUPPLIES as provided in Article XII shall remain with the BUYER and the BUILDER’s responsibility for such BUYER’S SUPPLIES shall be as described in Article XII.

6. Removal of the VESSEL

The BUYER shall take possession of the VESSEL immediately upon delivery thereof and shall remove the VESSEL from the SHIPYARD within three (3) days after delivery thereof is affected. If the BUYER shall not remove the VESSEL from the SHIPYARD within the foresaid three (3) days, the BUYER shall pay to the BUILDER the reasonable mooring charges of the VESSEL.

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ARTICLE VIII    DELAYS AND EXTENSIONS OF TIME (FORCE MAJEURE)

1. Causes of Delay

If, at any time after signing this CONTRACT, either the construction or delivery of the VESSEL or any performance required hereunder as a prerequisite to the delivery thereof is delayed by any of the following events: namely war, acts of state or government, blockade, revolution, insurrections, mobilization, civil commotion, riots, strikes, sabotage, lockouts, or other labour disturbances, Acts of God or the public enemy, plague or other epidemics, quarantines, shortage or prolonged failure of electric current, freight embargoes, or defects in major forgings or castings, or delays or defects in the BUYER’S SUPPLIES as stipulated in Article XII, if any, or shortage of materials, machinery or equipment or inability to obtain delivery or delays in delivery of materials, machinery or equipment, provided that at the time of ordering the same could reasonably be expected by the BUILDER to be delivered in time or defects in materials, machinery or equipment which could not have been detected by the BUILDER using seasonable care or earthquakes, tidal waves, typhoons, hurricanes, prolonged or unusually severe weather conditions or destruction of the premises or works of the BUILDER or its sub-contractors, or of the VESSEL, or any part thereof, by fire, landslides, flood, lightning, explosion, or delays in the BUILDER’s other commitments resulting from any such causes as described in this Article which in turn delay the construction of the VESSEL or the BUILDER’s performance under the CONTRACT, or delays caused by the CLASSIFICATION SOCIETY or the BUYER’s faulty action or omission, or other causes beyond the control of the BUILDER, its sub-contractors or suppliers as the case may be, or for any other causes which, under the terms of this CONTRACT, authorize and permit extension of the time for delivery of the VESSEL, then, in the event of delays due to the happening of any of the aforementioned contingencies, the DELIVERY DATE of the VESSEL under this CONTRACT shall be extended for a period of time, which shall not exceed the total accumulated time of all such delays. The BUILDER shall reasonably demonstrate that the cause of delay was not occasioned by the fault of the BUILDER and the BUILDER shall take all reasonable steps to mitigate its effect upon the construction of the VESSEL.

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2. Notice of Delays

Within ten (10) days after the date on which the BUILDER becomes aware of the occurrence of the cause of delay on account of which the BUILDER claims that it is entitled under this CONTRACT to an extension of the DELIVERY DATE of the VESSEL, excluding delays due to arbitration, the BUILDER shall advise the BUYER in writing or by facsimile of the date on which such cause of delay commenced, the reasons thereof and, if possible, its estimated duration of the probable delay in the delivery of the VESSEL, and shall supply the BUYER, if reasonably available, evidence to justify the delay claimed . Within one (1) week after such cause of delay ends, the BUILDER shall likewise advise the BUYER in writing or by facsimile of the date on which such cause of delay ended, and also shall specify the period of time by which the BUILDER claims the DELIVERY DATE should be extended by reason of such delay. Failure of the BUYER to object to the BUILDER’s notification of any claim for extension of the DELIVERY DATE of the VESSEL within one (1) week after receipt by the BUYER of such notification shall be deemed to be a waiver by the BUYER of its right to object to such extension.

3. Right to Cancel for Excessive Delay

If the total accumulated time of all permissible and non-permissible delays, excluding delays due to (i) arbitration under Article XIV, (ii) the BUYER’s defaults under Article XI, (iii) modifications and changes under Article V or (iv) delays or defects in the BUYER’S SUPPLIES as stipulated in Article XII, aggregates three hundred and sixty five (365) days or more, then, the BUYER may, at any time thereafter, cancel this CONTRACT by giving a written notice of cancellation to the BUILDER. Such cancellation shall be effective as of the date the notice thereof is received by the BUILDER.

If the BUYER has not served the notice of cancellation as provided in the above or Article III.1. hereof, the BUILDER may, at any time after expiration of the accumulated time of the delay in delivery, either three hundred and sixty five (365) days in case of the delay in this Paragraph or two hundred and seventy (270) days in case of the delay in Article III.1, notify the BUYER of the future date upon which the BUILDER estimates the VESSEL will be ready for delivery and

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demand in writing or by facsimile that the BUYER make an election either to cancel this CONTRACT or to consent to the delivery of the VESSEL at such future date, in which case the BUYER shall, within seven (7) days after receipt of such demand, make and notify the BUILDER of such election. If the BUYER elects to consent to the delivery of the VESSEL at such future date (or other future date as the parties may agree):

(a) Such future date shall become the contractual delivery date for the purposes of this CONTRACT and shall be subject to extension by reason of permissible delays as herein provided, and

(b) If the VESSEL is not delivered by such revised contractual delivery date (as extended by reason of permissible delays), the BUYER shall have the same right of cancellation upon the same terms as provided in the above and Article III.1.

If the BUYER shall not make an election within seven (7) days as provided hereinabove, the BUYER shall be deemed to have accepted such extension of the DELIVERY DATE to the future delivery date indicated by the BUILDER.

4. Definition of Permissible Delays

Delays on account of the foregoing causes shall be understood to be permissible delays, and are to be distinguished from non-permissible unauthorized delays on account of which the CONTRACT PRICE of the VESSEL is subject to adjustment as provided in Article III hereof.

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ARTICLE IX    WARRANTY OF QUALITY

1. Guarantee of Material and Workmanship

The BUILDER, for the period of twelve (12) months from the date of delivery of the VESSEL to the BUYER, guarantees the VESSEL and all parts and equipment thereof that are manufactured or furnished by the BUILDER under this CONTRACT against all defects which are directly due to defective materials, construction miscalculation and/or poor workmanship, provided such defects have not been caused by perils of the sea, rivers or navigation, or by normal wear and tear, overloading, improper loading or stowage, fire, accident, incompetence, mismanagement, negligence or wilful neglect or by alteration or addition by the BUYER not previously approved by the BUILDER.

The BUILDER will be responsible for all machinery or parts of machinery and all constructions which are supplied by sub-contractors and will guarantee the above mentioned for a period of twelve (12) months on the basis as laid down in this Paragraph.

2. Notice of Defects

The BUYER or its duly authorized representative will notify the BUILDER in writing or by facsimile promptly after discovery of any defect for which a claim is to be made under this guarantee.

The BUYER’s written notice shall include full particulars as to the nature of the defect and the extent of the damage caused thereby, but excluding consequential damage as hereinafter provided. The BUILDER will be under no obligation with respect to this guarantee in respect of any claim for defects discovered prior to the expiry date of the guarantee, unless notice of such defects is received by the BUILDER before the expiry date. However, facsimile advice received by the BUILDER within three (3) days after such expiry date that a claim is forthcoming will be sufficient compliance with the requirement as to time, provided that such facsimile advice shall include at least a brief description of the

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defect including the identity of the equipment, extent of damage, name and number of any replacement part and description of any remedial work required, and that full particulars are given to the BUILDER not later than seven (7) days after the expiry date.

3. Remedy of Defects

(a) The BUILDER shall remedy, at its expense, any defects, against which the VESSEL is guaranteed under this Article, by making all necessary and reasonably practicable repairs or replacements at the SHIPYARD or elsewhere as provided for in (b) herein below.

In any cases, removal of the VESSEL to the location at which the repair or replacements are to be effected, shall be at the BUYER’s risk and expenses.

(b) If it is impractical (which shall include, but not be limited to, an emergency) to bring the VESSEL to the SHIPYARD, the BUYER may cause the necessary repairs or replacements to be made elsewhere which is deemed by the BUYER with the consent of the BUILDER which shall not be unreasonably withheld, to be suitable for the purpose, provided that, in such event, the BUILDER may forward or supply replacement parts or materials to the VESSEL, unless forwarding or supplying thereof to the VESSEL would impair or delay the operation or working schedule of the VESSEL. In the event that the BUYER proposes to cause the necessary repairs or replacements to be made to the VESSEL at any shipyard or works other than the SHIPYARD, the BUYER shall first (but in all events as soon as reasonably possible) give the BUILDER notice in writing or by facsimile of the time and place such repairs will be made, and if the VESSEL is not thereby delayed, or her operation or working schedule is not thereby impaired, the BUILDER shall have the right to verify by its own representative(s) the nature and extent of the defects complained of. The BUILDER shall, in such case, promptly advise the BUYER by facsimile, after such examination has been completed, of its acceptance or rejection of the defects as ones that are covered by the guarantee herein provided. Upon the BUILDER’s acceptance of the defects as justifying remedy under

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this Article, or upon award of the arbitration so determining, the BUILDER shall compensate the BUYER for an amount equal to the reasonable cost of making the same repairs or replacements at the SHIPYARD. The BUILDER shall compensate the BUYER for the documented expenses incurred by the BUYER, but not to exceed one hundred and twenty percent (120%) of the cost of making such repair or replacement at the SHIPYARD, subject to the cost of making such repair or replacement in the SHIPYARD is being equal to the cost of the same repair and replacement in a major shipyard in Singapore.

(c) In the event that it is necessary for the BUILDER to forward a replacement of a defective part under this guarantee, replacement parts shall be supplied to the BUYER by airfreight (if air transport is feasible and necessary to assure the VESSEL’s undisturbed operation) on a freight prepaid basis to the port designated by the BUYER.

(d) The BUILDER reserves the option to retrieve, at the BUILDER’s cost, any of the replaced equipment/parts in case defects are remedied in accordance with the provisions in this Article.

(d) Any dispute under this Article shall be referred to arbitration in accordance with the provisions of Article XIV hereof.

4. Extent of BUILDER’s Liability

(a) After delivery of the VESSEL the responsibility of the BUILDER in respect of or in connection with the VESSEL or this CONTRACT shall be limited to the extent expressly provided in the Paragraph 4 of this Article. Except as expressly provided in this Paragraph, in no circumstances and on no ground whatsoever shall the BUILDER have any responsibility or liability whatsoever or howsoever arising in respect of or in connection with the VESSEL or this CONTRACT after the delivery of the VESSEL. Further, but without in any way limiting the generality of the foregoing, the BUILDER shall have no liability or responsibility whatsoever or howsoever arising for or in connection with any consequential or special losses, damages or expenses, any liability to any third party or any fine,

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compensation, penalty or other payment or sanction incurred by or imposed upon the BUYER or any other party whatsoever in relation to or in connection with this CONTRACT or the VESSEL.

(b) The BUILDER shall be under no obligation with respect to defects discovered after the expiration of the period of guarantee specified above, nor in any event shall the BUILDER be liable for any worsening of defects after the expiry date of the guarantee (notwithstanding Paragraph 3 of this Article).

(c) The BUILDER shall under no circumstances be liable for defects in the VESSEL or any part of equipment thereof caused by perils of the sea, rivers or navigation, or normal wear and tear, or fire or accidents at sea or elsewhere or by mismanagement, accident, negligence, wilful neglect, alteration or addition on the part of the BUYER, its employees or agents on or doing work on the VESSEL, including the VESSEL’s officers, crew and passengers. Likewise, the BUILDER shall not be liable for defects in the VESSEL or any part of equipment thereof that are due to repairs which were made by other than the BUILDER at the discretion of the BUYER as hereinabove provided.

(d) The liability of the BUILDER provided for in this Article shall be limited to defects directly caused by defective materials, construction miscalculation and/or poor workmanship as above provided. The BUILDER shall not be obliged to repair, not be liable for, damage to the VESSEL or any part of the equipment thereof, which after delivery of the VESSEL, is caused other than by the defects of the nature specified above. The guarantees contained as hereinabove in this Article replace and exclude any other liability, guarantee, warranty and/or condition imposed or implied by statute, common law, custom or otherwise on the part of the BUILDER by reason of the construction and sale of the VESSEL for and to the BUYER.

5. Guarantee Engineer

The BUILDER may at the request of the BUYER appoint a guarantee engineer to serve on the VESSEL as its representative for a period of three (3) months from

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the date the VESSEL is delivered. However, if the BUYER and the BUILDER shall deem it necessary to keep the guarantee engineer on the VESSEL for a longer period, then he shall remain on board the VESSEL after the said three (3) months, but no longer than twelve (12) months from the delivery of the VESSEL.

The BUYER and its employees shall give such guarantee engineer full cooperation in carrying out his duties as the representative of the BUILDER on board the VESSEL.

The BUYER shall accord the guarantee engineer treatment comparable to the VESSEL’s chief engineer and shall provide board and lodging at no cost to the BUILDER or the guarantee engineer. While the guarantee engineer is on board the VESSEL, the BUYER shall pay to the BUILDER a sum of United States Dollars Three Thousand Five Hundred (US$3,500.-) per month, the expenses of his repatriation to Mokpo, Korea by air upon termination of his service, the expenses of his communication with the BUILDER incurred in performing his duties and expenses, if any, of his medical and hospital care in the VESSEL’s hospital. The BUILDER and the BUYER shall, prior to delivery of the VESSEL, execute a separate agreement regarding the guarantee engineer.

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ARTICLE X    PAYMENT

1. Currency

All payments under this CONTRACT shall be made in United States Dollars.

2. Terms of Payment

The payments of the CONTRACT PRICE shall be made after CONTRACT EFFECTIVENESS as follows:

(a) First Instalment

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) shall be paid within three (3) business days after receipt by the BUYER of the original of the refund guarantee referred to Paragraph 7 of this Article.

(b) Second Instalment

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) shall be paid within three (3) business days after the later of (i) receipt by the BUYER of the BUILDER’s notice with confirmation by the CLASSIFICATION SOCIETY that the steel cutting has been carried out and (ii) 16^th May, 2009,

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(c) Third Instalment

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) shall be paid within three (3) business days after receipt by the BUYER of the BUILDER’s notice with confirmation by the CLASSIFICATION SOCIETY that the keel laying has been carried out.

(d) Fourth Instalment

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) shall be paid within three (3) business days after receipt by the BUYER of the BUILDER’s notice with confirmation by the CLASSIFICATION SOCIETY that the launching has been carried out.

(e) Fifth Instalment (DELIVERY INSTALMENT)

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) plus or minus any increase or decrease due to modifications and/or adjustments, if any, arising prior to delivery of the VESSEL of the CONTRACT PRICE under Articles III and V of this CONTRACT shall be paid to the BUILDER concurrently with the delivery of the VESSEL. (The date stipulated for payment of first, second, third and fourth instalment mentioned above is hereinafter in this Article and in Article XI referred to as the “DUE DATE” of that instalment).

Under this CONTRACT’, in counting the business days, only Saturdays and Sundays are excepted. When a due date falls on a day when banks are not open for business in Greece, Korea or USA such due date shall fall due upon the first business day next following.

It is understood and agreed upon by the BUILDER and the BUYER that all payments under the provisions of this Article shall not be delayed or withheld by the BUYER due to any dispute or disagreement of whatsoever nature arising between the BUILDER and the BUYER, provided however that no payment shall

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be made by the BUYER under this CONTRACT if the refund guarantee to be issued pursuant to paragraph 7 of this Article X has not been issued. If the refund guarantee is withdrawn or in any way ceases to be valid at any time during the course of this CONTRACT on or before the delivery of the VESSEL, then the BUYER may terminate this CONTRACT by notice to the BUILDER in writing or by telefax confirmed in writing in accordance with the provisions of paragraph 5 of this Article X. Should there be any dispute in this connection, the matter shall be dealt with in accordance with the provisions of arbitration in Article XIV hereof.

3. DEMAND FOR PAYMENT

At least fourteen (14) days prior to the date of each event provided in Paragraph 2 of this Article on which any payment shall fall due hereunder, with the exception of the payment of the first instalment, the BUILDER shall notify the BUYER by facsimile of the date such payment becomes due.

The BUYER shall immediately acknowledge receipt of such notification by facsimile to the BUILDER, and make payment as set forth in this Article. If the BUILDER fails to receive the BUYER’s said acknowledgement within three (3) days after sending the aforementioned notification, the BUILDER shall promptly facsimile to the BUYER a second notification of similar import. The BUYER shall immediately acknowledge by facsimile receipt of the foregoing second notification regardless of whether or not the first notification was acknowledged as aforesaid.

4. Method of Payment

(a) All the pre-delivery payments and the payment due on delivery in settlement of the CONTRACT PRICE as provided for in Paragraph 2 of this Article shall be made to the BUILDER’s Bank specified (c) herein below at the BUYER’s cost and expense on or before the DUE DATE thereof by telegraphic transfer under telefax advice to the BUILDER.

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(b) The DELIVERY INSTALMENT as provided in paragraph 2.(e) of this Article shall be deposited with the BUILDER’s Bank by telegraphic transfer at least three (3) business days prior to scheduled delivery date of the VESSEL notified by the BUILDER with instruction that the said instalment is payable to the BUILDER against presentation by the BUILDER to the BUILDER’s Bank of duplicate original copy of the PROTOCOL OF DELIVERY AND ACCEPTANCE of the VESSEL signed by the BUILDER and the BUYER.

(c) Reference to the BUILDER’s Bank

- . Name	: Industrial Bank of Korea
- . Address	: 50, Ulchiro 2-Ga, Chungu, Seoul, Korea
- . Account No.	: 191-002348-56-00016
- . Telex Number	: K239384
- . Telefax Number	: 82-2-729-7204
- . Swift Code	: IBKOKRSE
- . Beneficiary	: Korea Shipyard Co., Ltd.
- . Through Bank	: Deutsche Bank Trust Company Americas,              New York
	ABA Number    : 021001033
	Swift Code         : BKTRUS33
	Customer            : Industrial Bank of Korea

(d) Simultaneously with each of the payments, the BUYER shall advise the BUILDER of the details of the payment by facsimile and at the same time, the BUYER shall cause the BUYER’s remitting bank to advise the BUILDER’s bank of the details of such payments by authenticated bank cable or telex.

5. Refund by the BUILDER

The payments made by the BUYER to the BUILDER prior to delivery of the VESSEL shall constitutes advances to the BUILDER. If the VESSEL is rejected by the BUYER in accordance with the terms of this CONTRACT, or except in the case of rescission or cancellation of this CONTRACT by the BUILDER under the

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provisions of Article XI hereof, if the BUYER terminates, cancels or rescinds this CONTRACT pursuant to any of the provisions of this CONTRACT specifically permitting the BUYER to do so, the BUILDER shall forthwith refund to the BUYER, in United States Dollars, the full amount of total sums paid by the BUYER to the BUILDER in advance of delivery together with interest thereon as herein provided.

The transfer and other bank charges of such refund shall be for the BUILDER’s account. The interest rate of the refund, as above provided, shall be five per cent (5.0%) per annum from the date following the date of receipt by the BUILDER of the pre-delivery instalment(s) to the date of remittance by telegraphic transfer of such refund.

It is hereby understood by both parties that payment of any interest provided herein is by way of liquidated damages due to cancellation of this CONTRACT and not by way of compensation for use of money.

If the BUILDER is required to refund to the BUYER the instalments paid by the BUYER to the BUILDER as provided in this Paragraph, the BUILDER shall return to the BUYER all of the BUYER’S SUPPLIES as stipulated in Article XII which were not incorporated into the VESSEL and pay to the BUYER an amount equal to the cost to the BUYER of these supplies incorporated into the VESSEL.

6. Discharge of Obligations

Such refund as provided in the foregoing Paragraphs 4 and 5 by the BUILDER to the BUYER shall forthwith discharge all the obligations, duties and liabilities of each of the parties hereto to the other except the claims of the BUILDER against the BUYER, if any, under this CONTRACT. Any and all refunds or payments due to the BUYER under this CONTRACT shall be effected by telegraphic transfer to the account specified by the BUYER.

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7. Refund Guarantee

As security for refund of the instalments of the CONTRACT PRICE payable prior to delivery of the VESSEL, the BUILDER shall furnish the BUYER at least three (3) business days prior to the payment of the first instalment with a letter of guarantee of a Korean bank acceptable to the BUYER, covering the amount of the predelivery instalment(s) plus interest in favour of the BUYER. Such letter of guarantee shall have substantially the same form and substance as Exhibit A annexed hereto.

The transfer and other bank charges of such refund shall be for the BUILDER’s account. The interest rate of the refund, as above provided shall be five per cent (5.0%) per annum from the date following the date of receipt by the BUILDER of the pre-delivery instalment(s) to the date of remittance by telegraphic transfer of such refund.

If the BUILDER is required to refund to the BUYER the instalment(s) paid by the BUYER to the BUILDER as provided in this Paragraph, the BUILDER shall return to the BUYER all of the BUYER’s SUPPLIES as stipulated in Article XII which were not incorporated into the VESSEL and pay to the BUYER an amount equal to the cost to the BUYER of those supplies incorporated into the VESSEL.

8. Performance Guarantee

As security for the correct fulfilment and performance of this CONTRACT by the BUYER and following nomination by QML of the NOMINEE under Article XV hereof, QML shall concurrently with such nomination being made by QML, furnish the BUILDER with a Letter of Guarantee issued by QML in such form and with such terms and conditions as mentioned in EXHIBIT “B” as annexed hereto.

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ARTICLE XI    BUYER’S DEFAULT

1. Definition of Default

The BUYER shall be deemed to be in default under this CONTRACT in the following cases:

(a) If any of the first, second, third and fourth instalment is not paid to the BUILDER within respective DUE DATE of such instalments; or

(b) If the DELIVERY INSTALMENT is not deposited at the account of the BUILDER with the BUILDER’s Bank in accordance with Article X 4. (b) hereof or if the said DELIVERY INSTALMENT deposit is not (for reasons not attributable to the BUILDER) released to the BUILDER against presentation by the BUILDER of a duplicate original copy of the PROTOCOL OF DELIVERY AND ACCEPTANCE; or

(c) If the BUYER fails to take delivery of the VESSEL when the VESSEL is duly tendered for delivery by the BUILDER under the provisions of Article VII hereof; or

(d) If an order or an effective resolution shall be passed for winding up of the BUYER (except for the purpose of reorganization, merger or amalgamation); or

(e) If the BUYER fails to be in punctual, due and full compliance with any of its obligations under this CONTRACT.

In case the BUYER is in default of any of its obligations under this CONTRACT, the BUILDER is entitled to and shall have the following rights, powers and remedies in addition to such other rights, powers and remedies as the BUILDER may have elsewhere in this CONTRACT and/or at law, at equity or otherwise.

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2. Effect of the BUYER’s Default on or before the Delivery of the VESSEL

If the BUYER shall be in default as provided in Paragraph 1 above of its obligations under this CONTRACT, then:

(a) The DELIVERY DATE of the VESSEL shall be extended automatically for the actual period of continuence of such default and the BUILDER shall not be obliged to pay any liquidated damages for the delay in delivery of the VESSEL caused thereby.

(b) The BUYER shall pay to the BUILDER interest at the rate five per cent (5.0%) per annum in respect of the instalment(s) in default from the respective DUE GATE to the date of actual receipt by the BUILDER of the full amount of such instalment(s).

(c) If the BUYER is in default in payment of any of the instalment(s) due and payable prior to or simultaneously with the delivery of the VESSEL, the BUILDER shall, in writing or by facsimile, notify the BUYER to that effect, and the BUYER shall, upon receipt of such notification, forthwith acknowledge in writing or by facsimile to the BUILDER that such notification has been received.

(d) If any of the BUYER’s default continues for a period of fifteen (15) business days after the BUILDER’s notification to the BUYER of such default, the BUILDER may, at its option, rescind this CONTRACT by serving upon the BUYER a written notice or a facsimile notice of rescission confirmed in writing.

(e) In the event of such cancellation by the BUILDER of this CONTRACT due to the BUYER’s default as provided for in paragraph 1 above, the BUILDER shall be entitled to retain and apply the instalments already paid by the BUYER to the recovery of the BUILDER’s loss and damage due to the BUYER’s default and the cancellation of this CONTRACT and at the same time the BUILDER shall have the full right and power either to complete or not to complete the VESSEL which is the sole property of the BUILDER as it deems fit, and to sell the VESSEL at a public or private sale on such terms and conditions as the BUILDER thinks fit without being answerable for any loss or damage.

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The proceeds received by the BUILDER from the sale shall be applied in addition to the instalment(s) retained by the BUILDER as mentioned hereinabove as follows:

First, in payment of all reasonable costs and expenses of the sale of the VESSEL, including interest thereon at five per cent (5.0%) per annum from the respective date of payment of such costs and expenses aforesaid to the date of sale on account of the BUYER’s default.

Second, if the VESSEL has been completed, in or towards satisfaction of the unpaid balance of the CONTRACT PRICE, to which shall be added the cost of all additional work and extras agreed by the BUYER including interest thereon at five per cent (5.0%) per annum from the respective DUE DATE of the instalment in default to the date of sale, or if the VESSEL has not been completed, in or towards satisfaction of the unpaid amount of the cost incurred by the BUILDER prior to the date of sale on account of construction of the VESSEL, including work, labor, materials and reasonably estimated profit which the BUILDER would have been entitled to receive if the VESSEL had been completed and delivered plus interest thereon at five per cent (5.0%) per annum from the respective DUE DATE of the instalment in default to the date of sale.

Third, the balance of the proceeds, if any, shall belong to the BUYER, and shall forthwith be paid over to the BUYER by the BUILDER.

In the event of the proceeds from the sale together with instalment(s) retained by the BUILDER being insufficient to pay the BUILDER, the BUYER shall be liable for the deficiency and shall pay the same to the BUILDER upon its demand.

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ARTICLE XII    BUYER’S SUPPLIES

1. Responsibility of the BUYER

The BUYER shall, at its cost and expense, supply all of the items to be furnished by the Buyer as specified in the SPECIFICATIONS (hereinafter called the “BUYER’S SUPPLIES”), to the BUILDER at the SHIPYARD in perfect condition ready for installation and in accordance with the time schedule to be furnished by the BUILDER to meet they building schedule of the VESSEL.

In order to facilitate the installation of the BUYER’S SUPPLIES by the BUILDER, the BUYER shall furnish the BUILDER with the necessary plans, instruction books, test report and all test certificates required by the BUILDER and shall cause the representative(s) of the makers of the BUYER’S SUPPLIES to give the BUILDER any advice, instructions or assistance which the BUILDER may reasonably require in the installation or adjustment thereof at the SHIPYARD, all without cost or expense to the BUILDER.

The BUYER shall be liable for any expense incurred by the BUILDER for repair of the BUYER’S SUPPLIES due to defective design or materials, poor workmanship or performance or due to damage in transit and the DELIVERY DATE of the VESSEL shall be extended for the period of such repair if such repair shall affect the delivery of the VESSEL.

If necessary, the commissioning into good order of the BUYER’S SUPPLIES during and after installation on board shall be made at the BUYER’s expense by the representative of respective maker or the person designated by the BUYER in accordance with the BUILDER’s building schedule.

Should the BUYER fail to deliver to the BUILDER the BUYER’S SUPPLIES and the necessary document or advice for such supplies within the time specified by the BUILDER, the DELIVERY DATE of the VESSEL shall automatically be extended for the period of such delay if such delay in delivery shall affect the delivery of the VESSEL. In such event, the BUYER shall pay to the BUILDER all losses and damages sustained by the BUILDER directly related to the VESSEL

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due to such delay in the delivery of the BUYER’S SUPPLIES and such payment shall be made upon delivery of the VESSEL, provided, however, that the BUILDER shall have:

(a) furnished the BUYER with the time schedule referred to above, two (2) months prior to installation of the BUYER’S SUPPLIES and

(b) given the BUYER written notice of any delay in delivery of the BUYER’S SUPPLIES and the necessary document or advice for such supplies as soon as the delay occurs which might give rise to a claim by the BUILDER under this Paragraph.

Furthermore, if the delay in delivery of the BUYER’S SUPPLIES and the necessary document or advice for such supplies should exceed ten (10) days from the date specified by the BUILDER, the BUILDER shall be entitled to proceed with construction of the VESSEL without installation of such items (regardless of their nature or importance to the BUYER or the VESSEL) in or on the VESSEL without prejudice to the BUILDER’s rights as hereinabove provided, and the BUYER shall accept the VESSEL so completed.

2. Responsibility of the BUILDER

The BUILDER shall be responsible for storing, safekeeping and handling the BUYER’S SUPPLIES which the BUILDER is required to install on board the VESSEL under the SPECIFICATIONS after delivery of such supplies to the SHIPYARD, and shall install such supplies on board the VESSEL at the BUILDER’s expense .

However, the BUILDER shall not be responsible for the quality, performance or efficiency of any equipment included in the BUYER’S SUPPLIES and is under no obligation with respect to the guarantee of such equipment against any defects caused by poor quality, performance or efficiency of the BUYER’S SUPPLIES. If any of the BUYER’S SUPPLIES is lost or damaged while in the custody of the BUILDER, the BUILDER shall, if the loss or damage is due to wilful default or negligence on its part, be responsible for such loss or damage.

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ARTICLE XIII    INSURANCE

1. Extent of Insurance Coverage

From the time of launching of the VESSEL until the VESSEL is delivered to and accepted by the BUYER, the BUILDER shall, at its own cost and expense, keep the VESSEL and all machinery, materials, equipment, appurtenances and outfit delivered to the SHIPYARD for the VESSEL or built into, or installed in or upon the VESSEL fully insured with first class insurance company in Korea, against the risks under cover corresponding to the “Institute Clause for Builder’s Risk” upon the London Market.

The insurance coverage shall be carried up to the date of delivery of the VESSEL, and shall be in an amount equal to the CONTRACT PRICE.

A copy of the insurance policy shall be delivered to the BUYER.

2. Partial Loss / Total Loss

2.1 In the event of partial loss prior to delivery, all insurance shall be payable to the BUILDER and the BUILDER shall apply the amount recovered under the insurance policies to the repair of such damage to meet the SPECIFICATIONS at no additional expenses to the BUYER. The BUYER shall accept the VESSEL under this CONTRACT if fully repaired and completed in accordance with this CONTRACT and SPECIFICATIONS.

2.2 However, in the event that the VESSEL is determined to be an actual or constructive total loss, the BUILDER shall, by mutual agreement with the BUYER, either;

(a) Proceed in accordance with the terms of this CONTRACT, in which case the amount recovered under said insurance policy shall be applied to the reconstruction and/or repair of the VESSEL’s damage, provided the parties hereto shall have first agreed in writing as to such reasonable postponement of the DELIVERY DATE and adjustment of other terms of this CONTRACT including the CONTRACT PRICE and as may be necessary for the completion of such reconstruction; or

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(b) Refund to the BUYER the amount of all the instalments paid to the BUILDER under this CONTRACT whereupon this CONTRACT shall be deemed to be terminated and all rights, duties, liabilities and obligations of each of the parties to the other shall terminate forthwith.

If the parties hereto fail to reach such agreement within two (2) months after the VESSEL is determined to be an actual or constructive total loss, the provision of sub-paragraph 2.2 (b) as above shall apply.

3. Termination of the BUILDER’s Obligation to Insure

The BUILDER’s obligation to insure the VESSEL hereunder shall cease and terminate forthwith upon delivery thereof and acceptance of the VESSEL by the BUYER.

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ARTICLE XIV    DISPUTES AND ARBITRATION

1. Proceedings

1.1 Decision by the Classification Society

If any dispute arises between the parties hereto in regard to the design and/or construction of the VESSEL, its machinery and equipment, and/or in respect of the materials and/or workmanship thereof and/or thereon, and/or in respect of interpretations of this CONTRACT or the SPECIFICATIONS and PLAN, the parties may by mutual agreement refer the dispute to the CLASSIFICATION SOCIETY or to such other expert as may be mutually agreed between the parties hereto and whose decision shall be final, conclusive and binding upon the parties hereto.

1.2 Proceeding of Arbitration

In the event that the parties hereto do not agree to settle a dispute according to Paragraph 1 of this Article XIV and/or in the event of any other dispute of any kind whatsoever between the parties and relating to this CONTRACT or its rescission or any stipulation herein, such dispute shall be submitted to arbitration in London subject to the London Maritime Arbitrators Association. Each party shall appoint an arbitrator and the two arbitrators so appointed shall appoint a third arbitrator (together hereinafter call the “ARBITRATION BOARD”).

If the two arbitrators are unable to agree upon a third arbitrator within twenty (20) days after appointment of the second arbitrator, either of the said two arbitrators may apply to the President for the timing being of the London Maritime Arbitrators Association to appoint the third arbitrator.

Such arbitration shall be in accordance with subject to the provisions of the English Arbitration Act 1996 or any statutory modification or re-enactment thereof for the time being in force.

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Either party may demand arbitration of any such dispute by giving notice to the other party. Any demand for arbitration by either of the parties hereto shall state the name of the arbitrator appointed by such party and shall also state specifically the question or questions as to what such party is demanding arbitration. Within fourteen (14) days after receipt of notice of such demand for arbitration, the other party shall in turn appoint a second arbitrator and give notice in writing of such appointment to the party demanding arbitration. If a party fails to appoint an arbitrator as aforementioned within fourteen (14) days following receipt of notice of demand for arbitration by the other party, the party failing to appoint an arbitrator shall be deemed to have accepted and appointed, as its own arbitrator, the arbitrator appointed by the party demanding arbitration and the arbitration shall proceed before this sole arbitrator who alone in such event shall constitute the ARBITRATION BOARD.

The award of the arbitrators shall be final and binding on all parties.

2. Notice of Award

The award shall be immediately be given to the parties hereto in writing or by telefax.

3. Expenses

The ARBITRATION BOARD shall determine which party shall bear the expenses of the arbitration or the portion of such expenses which each party shall bear.

4. Entry in Court

Judgment upon the award may be entered in any court having jurisdiction thereof.

5. Alteration of Delivery Date

In the event of reference to arbitration of any dispute arising out of matters occurring prior to delivery of the VESSEL, the award may include any postponement of the DELIVERY DATE which the ARBITRATION BOARD may deem appropriate and/or a determination by the ARBITRATION BOARD as to whether a delay is classified as permissible or non-permissible for the purpose of Article VIII hereof and/or Article V hereof.

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ARTICLE XV    SUCCESSORS AND ASSIGNS

The BUILDER agrees that, prior to delivery of the VESSEL, this CONTRACT may, with the prior written approval of the BUILDER, which the BUILDER shall not unreasonably withhold, be transferred to and the title thereof may be taken by another company. In the event of any assignment pursuant to the terms of this CONTRACT, the assignee, its successors and assigns shall succeed to all the rights and obligations of the BUYER under this CONTRACT. However, the BUYER shall remain responsible for performance by the assignee, its successors and assigns of all the BUYER’s obligations, liabilities and responsibilities under this CONTRACT.

The BUILDER further agrees that the BUYER may assign to a financial institution(s) providing the BUYER with finance in relation to the acquisition of the VESSEL all its rights and benefits (but none of its obligations) under this CONTRACT without the consent of, but with a due prior notice of such assignment to, the BUILDER.

It is understood that any expenses including legal and other costs incurred due to the assignment or transfer of this CONTRACT shall be for the account of the BUYER.

The BUILDER accepts that QML has the right to nominate another company (such company hereinafter called the “NOMINEE”) as buyer in its place under this CONTRACT subject to the BUILDER’S prior written consent, such consent not to be unreasonably withheld or unduly delayed, provided however that the BUILDER’S consent shall not be withheld or delayed in the event that the NOMINEE has been formed by QML for the purpose of taking over this CONTRACT and is owned by at least fifty percent (50%) by QML . Upon such nomination by QML being accepted by the NOMINEE:

(a) The NOMINEE shall replace QML as the BUYER under this CONTRACT and shall have all rights and obligation that QML had by signing this CONTRACT as if the NOMINEE was named in this CONTRACT ab initio the buyer under this CONTRACT.

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(b) QML will remain responsible for the NOMINEE’S obligations under this CONTRACT and shall issue a Performance Guarantee as a guarantor in favour of the BUILDER in the form annexed to this CONTRACT as EXHIBIT “B”

(c) If at the time of nomination the letter of guarantee referred in paragraph 7 of Article X hereof has beers issued, the BUILDER shall procure that the bank that has issued the said letter of guarantee referred to in paragraph 7 of Article X hereof shall issue a supplemental letter to such letter of guarantee whereby the existing letter of guarantee in favour of QML shall be amended to be in favour of the NOMINEE.

The cost and expenses, if any, for transferring this CONTRACT and any other document from the BUYER to the NOMINEE shall be borne by the BUYER.

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ARTICLE XVI    TAXES AND DUTIES

1. Taxes

Unless otherwise expressly provided for in this CONTRACT, all costs and taxes including stamp duties, if any, incurred in or levied by any country except Korea in connection with this CONTRACT shall be borne by the BUYER and corresponding costs and taxes in Korea, before delivery of the VESSEL, if any, shall be borne by the BUILDER.

2. Duties

The BUILDER shall hold the BUYER harmless from any payment of duty imposed in Korea upon materials or supplies which, under the terms of this CONTRACT, or amendments thereto, may be supplied by the BUYER from abroad for the construction of the VESSEL.

The BUILDER shall likewise hold the BUYER harmless from any payment of duty imposed in Korea in connection with materials or supplies for operation of the VESSEL, including running stores, provisions and supplies necessary to stock the VESSEL for its operation so far as the concerned regulation allows such indemnity in Korea. This indemnity does not, however, extend to any items purchased by the BUYER for use in connection with the VESSEL, which are not absolutely required for the construction or operation of the VESSEL.

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ARTICLE XVII    PATENTS, TRADEMARKS AND COPYRIGHTS

1. Patents, Trademarks and Copyrights

Machinery and equipment of the VESSEL, whether made or furnished by the BUILDER under this CONTRACT, may bear the patent numbers, trademarks, or trade names of the manufacturers. The BUILDER shall defend and save harmless the BUYER from all liabilities or claims for or on account of the use of any patents, copyrights or design of any nature or kind, or for the infringement thereof including any unpatented invention made or used in the performance of this CONTRACT and also for any costs and expenses of litigation, if any, in connection therewith. No such liability or responsibility shall be with the BUILDER with regard to components and/or equipment and/or design supplied by the BUYER.

Nothing contained herein shall be construed as transferring any patent or trademark rights or copyrights in equipment covered by this CONTRACT, and all such rights are hereby expressly reserved to the true and lawful owners thereof.

2. Rights to the Specifications, Plans, etc.

The BUILDER retains all rights with respect to the SPECIFICATIONS, plans and working drawings, technical description calculations, test results and other data, information and documents concerning the design and construction of the VESSEL and the BUYER undertakes therefore not to disclose the same to any third parties or divulge any information contained therein, without the prior written consent of the BUILDER, excepting where it is necessary for the usual operation, repair and maintenance of the VESSEL.

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ARTICLE XVIII    INTERPRETATION AND GOVERNING LAW

This CONTRACT has been prepared in English and shall be executed in duplicate and in such number of additional copies as may be required by either party respectively. The parties hereto agree that this CONTRACT shall be governed and shall be construed in accordance with the laws of England.

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ARTICLE XIX     NOTICES

Any and all notices, requests, demands, instructions, advices and communications in connection with this CONTRACT shall be written in English, sent by registered air mail, facsimile and shall be deemed to be given when first received whether by registered mail, facsimile. They shall be addressed as follows, unless and until otherwise advised:

To the BUILDER

Korea Shipyard Co., Ltd.

1402 Nogjinri, Gunnaemyon, Jindogun, Jeollanamdo, Korea

Telephone	:   + 82 61 542 4521-6
Facsimile	:   + 82 61 542 0491
E-Mail	:   ksyard@gmail.com
Attention	:   Mr. Jeon, Min-Hwan

To the BUYER

c/o Quintana Management LLC

13 Pandoras & Kyprou Street

166 74 Glyfada

Athens, Greece

Telephone	:   +30 210 89 85 056
Facsimile	:   +30 210 8948 823
E-Mail	:   smolaris@quintanamaritime.com and     mkoutsouridis@quintanamaritime.com
Attention	:   Mr. Stamatis Molaris and Mr. Michael Koutsouridis

The said notices shall become effective upon receipt of the letter, facsimile communication by the receiver thereof. Where a notice by facsimile is concerned which is required to be confirmed by letter, then, unless the CONTRACT or the relevant Article thereof otherwise requires, the notice shall become effective upon receipt of the facsimile.

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ARTICLE XX    EFFECTIVENESS OF THIS CONTRACT

This CONTRACT shall become effective upon signing by the parties hereto.

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ARTICLE XXI    EXCLUSIVENESS

This CONTRACT shall constitute the only and entire agreement between the parties hereto, and unless otherwise expressly provided for in this CONTRACT, all other agreements, oral or written, made and entered into between the parties prior to the execution of this CONTRACT shall be null and void.

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

BUYER: QUINTANA MARITIME LIMITED
By:	/s/ Stamatis Molaris
Name:	Stamatis Molaris
Title:	Attorney in Fact
BUILDER: KOREA SHIPYARD CO., LTD.
By:	/s/ Jeon Min-Hwan
Name:	Jeon, Min-Hwan
Title:	President

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EXHIBIT A

LETTER OF GUARANTEE

Date:

Gentlemen:

We hereby issue our irrevocable Letter of Guarantee number                  in favor of                          (hereinafter called the “BUYER”) for account of Korea Shipyard Co., Ltd., Korea (hereinafter called the “BUILDER”) as follows in connection with the shipbuilding contract dated                      (hereinafter called the “CONTRACT”) made by and between the BUYER and the BUILDER for the construction and sale of one (1) 180,000 DWT Class Bulk Carrier having the BUILDER’s Hull No.              (hereinafter called the “VESSEL”).

In consideration of the BUYER entering into the CONTRACT with the BUILDER and for other good and valuable consideration (the receipt and adequacy of which is hereby acknowledged) if in connection with the terms of the CONTRACT the BUYER shall become entitled to a refund of the instalments or advance payments made to the BUILDER prior to the delivery of the VESSEL, we hereby irrevocably guarantee the repayment of the same to the BUYER within thirty (30) days after demand by the BUYER being initially US$                              (say U.S. Dollars                      only) together with interest thereon at the rate of five percent (5%) per annum from the date following the date of receipt by the BUILDER to the date of remittance by telegraphic transfer of such refund.

The amount of this Letter of Guarantee will be automatically increased upon the BUILDER’s receipt of the respective instalment, not more than three times, each time by the amount of instalment or advance payment plus interest thereon as provided in the CONTRACT, but in any eventuality the amount of this guarantee shall not exceed the total sum of US$                              (say U.S. Dollars              only) Plus interest thereon at the rate of five percent (5%) per annum from the date following the date of the BUILDER’s receipt of each instalment to the date of remittance by telegraphic transfer of the refund.

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This Letter of Guarantee is available against the BUYER’s written demand and signed statement certifying that the BUYER’s demand for refund has been made in conformity with Article X of the CONTRACT and the BUILDER has failed to make the refund.

Notwithstanding the provisions hereinabove, in the event that within thirty (30) days of the date of your demand to the BUILDER referred to above we receive notification from you or the BUILDER accompanied by written confirmation to the effect that an arbitration has been initiated and that your claim to cancel the CONTRACT or your claim for refund thereunder has been disputed and referred to arbitration in accordance with the provisions of the CONTRACT, we shall under this Letter of Guarantee pay to you the sum (not exceeding US$              plus interest by the same manner hereinabove) due to you from the BUILDER pursuant to the award of a London arbitration tribunal immediately upon receipt from you of a demand for payment of the sum and a copy of the award.

This Letter of Guarantee shall become null and void upon receipt by the BUYER of the sum guaranteed hereby or upon acceptance by the BUYER of the delivery of the VESSEL in accordance with the terms of the CONTRACT and, in either case, this Letter of Guarantee shall be returned to us.

This Letter of Guarantee is assignable and valid from the date of this Letter of Guarantee until such time as the VESSEL is delivered by the BUILDER to the BUYER in accordance with the provisions of the CONTRACT.

All demands, statements or notices in connection with this Letter of Guarantee shall be validly given if sent to us by telefax to our office at                                              , Korea as follows:

Korea

Tel:

Fax:

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In the event that any withholding or deduction is imposed by any law, the undersigned will pay such additional amount as maybe necessary in order that the actual amount received after deduction or withholding shall be equal to the amount that would have been received if such deduction or withholding were not required.

This Letter of Guarantee shall remain in full force and effect, notwithstanding any amendments made to the CONTRACT by the parties thereto.

This Letter of Guarantee shall be governed by and construed in accordance with the laws of England and any dispute hereunder shall be subject to arbitration in England under the provisions of the Arbitration Act 1996 or any modification or re-enforcement thereof at the time.

Very truly yours,

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EXHIBIT “B”

Messrs.

KOREA SHIPYARD CO., LTD.

1243-1, Yonsan-Dong

Mokpo City

Jeollanam-Do

Korea

Date:                     , 2006

PERFORMANCE GUARANTEE

Gentlemen:

In consideration of your executing a SHIPBUILDING CONTRACT (hereinafter called the “CONTRACT”), dated                      with                                              having its registered office at                                                                                (hereinafter called the “BUYER”) providing for the construction of one (1) 180,000 DWT Class Bulk Carrier bearing Hull No.              (hereinafter called the “VESSEL”), and providing, among other things, for payment of the CONTRACT PRICE amounting to United States Dollars                                                                 only (US$                             ), the undersigned hereby unconditionally and irrevocably guarantees to you, your successors and assignee, the due and faithful performance by the BUYER of all its liabilities and responsibilities under the CONTRACT and any supplements, amendments, changes, or modifications hereinafter made thereto, (hereby expressly waiving notice of any such supplement, amendment, change or modification as may be agreed to by the BUYER and confirming that this Guarantee shall be fully applicable to the CONTRACT as so supplemented, amended, changed or modified and to the CONTRACT, if it shall be assigned by the BUYER in accordance with Article XV of the CONTRACT) including but not limited to, due and prompt payment of the CONTRACT PRICE by the BUYER to you, your successors, and assignee under the CONTRACT and any supplements, amendments, changes or modifications as aforesaid.

The undersigned hereby certifies, represents and warrants that all acts, conditions and things required to be done and performed and to have occurred precedent to the creation and issuance of this Guarantee, and to constitute the same the valid and

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legally binding obligation of the undersigned enforceable in accordance with its terms have been done and performed and have occurred in due and strict compliance with the CONTRACT and applicable law.

The payment by the undersigned under this Guarantee shall be made forthwith upon receipt by us of written demand from you including a statement that the BUYER is in default of payment of the amounts that were due under the CONTRACT, without requesting you to take any or further procedure or step against the BUYER.

This Performance Guarantee shall become effective when the CONTRACT comes into effect according to its terms, and terminate upon payment of the DELIVERY INSTALMENT by the BUYER.

This Guarantee is governed by the laws of England and any dispute arising out of this guarantee may be referred to the non-exclusive jurisdiction of the Courts of England.

Yours faithfully,

For and on behalf of Quintana Maritime Limited

/s/ Stamatis Molaris
Name :	Stamatis Molaris
Title :	Attorney in Fact

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EX-10.17

Exhibit 10.17

SHIPBUILDING CONTRACT

FOR

THE CONSTRUCTION OF

ONE (1)

180,000 DWT CLASS BULK CARRIER

HULL NO. 0006

BETWEEN

QUINTANA MARITIME LIMITED

(AS BUYER)

AND

KOREA SHIPYARD CO., LTD.

(AS BUILDER)

SHIPBUILDING CONTRACT

THIS CONTRACT is made as of 3rd December, 2006 by and between QUINTANA MARITIME LIMITED, a company incorporated and existing under the laws of the Republic of the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Republic of the Marshall Islands MH96960 (hereinafter called “QML”) or a company to be nominated by QML pursuant to Article XV hereof (hereinafter called the “NOMINEE”)(QML until such nomination takes place and the NOMINEE following such nomination having taken place, in either case hereinafter called the “BUYER”), the party of the first part and KOREA SHIPYARD CO ., LTD ., a company organized and existing under the laws of the Republic of Korea, having its registered office at 1243-1, Yonsan-bong, Mokpo-City, Jeollanam-Do, Korea (hereinafter called the ‘BUILDER”), the party of the second part,

WITNESSETH:

In consideration of the mutual covenants contained herein, the BUILDER agrees to design, build, launch, equip and complete one (1) 180,000 DWT Class Bulk Carrier as described in Article 1 hereof (hereinafter called the “VESSEL”) at the BUILDER’S shipyard in Jindo, Korea (hereinafter called the “SHIPYARD”) and to deliver and sell the VESSEL to the BUYER, and the BUYER agrees to accept delivery of and purchase from the BUILDER the VESSEL, according to the terms and conditions hereinafter set forth:

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INDEX

ARTICLE I	DESCRIPTION AND CLASS	4
ARTICLE II	CONTRACT PRICE	7
ARTICLE III	ADJUSTMENT OF THE CONTRACT PRICE	8
ARTICLE IV	INSPECTION AND APPROVAL	13
ARTICLE V	MODIFICATIONS CHANGES AND EXTRAS	19
ARTICLE VI	TRIALS AND COMPLETION	22
ARTICLE VII	DELIVERY	27
ARTICLE VIII	DELAYS AND EXTENSIONS OF TIME (FORCE MAJEURE)	31
ARTICLE IX	WARRANTY OF QUALITY	34
ARTICLE X	PAYMENT	39
ARTICLE XI	BUYER’S DEFAULT	45
ARTICLE XII	BUYER’S SUPPLIES	48
ARTICLE XIII	INSURANCE	50
ARTICLE XIV	DISPUTES AND ARBITRATION	52
ARTICLE XV	SUCCESSORS AND ASSIGNS	54
ARTICLE XVI	TAXES AND DUTIES	56
ARTICLE XVII	PATENTS, TRADEMARKS AND COPYRIGHTS	57
ARTICLE XVIII	INTERPRETATION AND GOVERNING LAW	58
ARTICLE XIX	NOTICES	59
ARTICLE XX	EFFECTIVENESS OF THIS CONTRACT	60
ARTICLE XXI	EXCLUSIVENESS	61
EXHIBIT A	LETTER OF GUARANTEE	63
EXHIBIT B	PERFORMANCE GUARANTEE	66

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ARTICLE I     DESCRIPTION AND CLASS

1. Description

The VESSEL shall have the BUILDER’S Hull No. 0006 and shall be constructed, equipped and completed in accordance with the specifications (Ref. No. KSB-FS-002R0 dated 3^rd December, 2006) and the maker list (Ref. No. KSB-ML-002R0 dated 3^rd Dec., 2006) (hereinafter collectively called the “SPECIFICATIONS”) and the general arrangement plan (Ref. No. KSB-GA-002R0 dated 3^rd Dec., 2006) (hereinafter called the “PLAN”), which shall constitute an integral part of this CONTRACT.

The SPECIFICATIONS and the PLAN are intended to explain each other and anything shown on the PLAN and not stipulated in the SPECIFICATIONS or anything stipulated in the SPECIFICATIONS and not shown on the PLAN shall be deemed and considered as if included in both. Should there be any inconsistencies or contradictions between the SPECIFICATIONS and the PLAN, the SPECIFICATIONS shall prevail. Should there be any inconsistencies or contradictions between this CONTRACT and the SPECIFICATIONS, this CONTRACT shall prevail.

2. Basic Dimensions and Principal Particulars of the VESSEL

The basic dimensions anti principal particulars of the VESSEL shall be

Length, overall	maximum 292.0 M
Length, between perpendiculars	283.0 M
Breadth, moulded	45.0 M
Depth to Upper Deck, moulded	24.7 M
Design draft, moulded, in seawater of specific gravity of 1.025	16.5 M
Scantling draft, moulded, in seawater of specific gravity of 1.025	18.2 M
Deadweight on the above moulded

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design draft of 16.5 M	about 159,000 M/T
Deadweight on the above moulded scantling draft of 18.2 M, guaranteed	179,700 M/T
Main propelling machinery	MAN-B&W 6S70 MC-C (Mark 7)
	MCR : 18,660 KW X 91.0 RPM
	NCR : 16,790 KW X 87.9 RPM
Service speed at 16.5 meters design draft at the condition of clean bottom and in calm and deep sea with main engine developing a NCR of 16,790 KW with fifteen per cent (15 %) sea margin, guaranteed	15.4 Knots
Fuel consumption of the main engine applying I.S.O. reference conditions to the result of official shop test at a NCR of 16,790 KW using marine diesel oil having lower calorific value of 42,700 KJ per Kg, guaranteed	166.7 gr/KW.HR

The details of the above particulars as well as the definitions and method of measurements and calculations are as indicated in the SPECIFICATIONS.

3. Classification, Rules and Regulations

(a) The VESSEL shall be built in compliance with the current rules and regulations of American Bureau of Shipping (hereinafter called the “CLASSIFICATION SOCIETY”), to be classed and registered as +A1(E), +AMS, Bulk Carrier CSR, SafeShip-CM, BC-A (holds 2, 4, 6 and 8 may be empty with maximum cargo density: 3.0t/m³), ESP, +ACCU, TCM, GRAB(20), UWILD, POT and also to comply with the rules, regulations and requirements of the other regulatory bodies described in the SPECIFICATIONS.

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(b) The rules, regulations and requirements of the CLASSIFICATION SOCIETY and the regulatory bodies and the other relevant, regulations and requirement, if any, are to include their current ones that have been issued and are effective as of the date of signing this CONTRACT.

(c) The BUILDER shall arrange with the CLASSIFICATION SOCIETY for the assignment by the CLASSIFICATION SOCIETY of representative(s) to the VESSEL during construction. All fees and charges incidental to classification of the VESSEL in compliance with the above specified rules, regulations and requirements of this CONTRACT shall be for the account of the BUILDER.

(d) The decision of the CLASSIFICATION SOCIETY as to whether the VESSEL complies with the regulations of the CLASSIFICATION SOCIETY shall be final and binding upon the BUILDER and the BUYER.

4. Nationality of the VESSEL

The VESSEL shall be built and completed by the BUILDER for registration in the Marshall Islands and shall be registered by the BUYER at its own cost and expense under the laws of the Marshall Islands with its home port of Majuro at the time of its delivery and acceptance hereunder.

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ARTICLE II     CONTRACT PRICE

The contract price of the VESSEL delivered to the BUYER at the SHIPYARD shall be United States Dollars Seventy Seven Million Seven Hundred Thousand (US $77,700,000) (hereinafter called the “CONTRACT PRICE”) which shall be paid plus any increases or less any decreases due to adjustment or modifications, if any, as set forth in this CONTRACT . The CONTRACT PRICE shall include payment for services in the inspection, tests, survey and classification of the VESSEL which will be rendered by the CLASSIFICATION SOCIETY and shall not include the cost of the BUYER’s SUPPLIES as stipulated in Article XII.

The CONTRACT PRICE also includes all costs and expenses for supplying all necessary drawings as stipulated in the SPECIFICATIONS except those to be furnished by the BUYER for the VESSEL in accordance with the SPECIFICATIONS.

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ARTICLE III     ADJUSTMENT OF THE CONTRACT PRICE

The CONTRACT PRICE of the VESSEL shall be adjusted as hereinafter set forth in the event of the following contingencies. It is hereby understood by both parties that any adjustment of the CONTRACT PRICE as provided for in this Article is by way of liquidated damages and not by way of penalty, the calculation of damage being deemed final.

1. Delayed Delivery

(a) No adjustment shall be made and the CONTRACT PRICE shall remain unchanged for the first thirty (30) days of the delay in delivery of the VESSEL [ending as of 12 o’clock midnight Korean Standard Time on the thirtieth (30th) day of delay] beyond the Delivery Date calculated as provided in Article VII.1. hereof.

(b) If delivery of the VESSEL is delayed more than thirty (30) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT, then, beginning at midnight of the thirtieth (30th) day after such due date, the CONTRACT PRICE of the VESSEL shall be reduced by United States Dollars Twenty Thousand (US $20,000) for each full day of delay.

However, unless the parties agree otherwise, the total amount of deduction from the CONTRACT PRICE shall not exceed the amount due to cover the delay of two hundred and forty (240) days after thirty (30) days of the delay in delivery of the VESSEL at the rate of deduction as specified hereinabove.

(c) But, if the delay in delivery of the VESSEL continues for a period of more than two hundred and seventy (270) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT then, in such event, and after such period has expired, the BUYER may, at its option, cancel this CONTRACT by serving upon the BUILDER a notice of cancellation by telegram, or facsimile to be confirmed by a

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registered letter via airmail directed to the BUILDER at the address given in this CONTRACT. Such cancellation shall be effective as of the date the notice thereof is received by the BUILDER. If the BUYER has not served the notice of cancellation after the aforementioned two hundred and seventy (270) days delay in delivery, the BUILDER may demand the BUYER to make an election in accordance with Article VIII.3. hereof.

(d) For the purpose of this Article, the delivery of the VESSEL shall be deemed to be delayed when and if the VESSEL, after taking into full account extension of the Delivery Date or permissible delays as provided in Article V, VI, VIII, XI, XII or elsewhere in this CONTRACT, is delivered beyond the date upon which delivery would then be due under the terms of this CONTRACT.

2. Insufficient Speed

(a) The CONTRACT PRICE of the VESSEL shall not be affected or changed, if the actual speed, as determined by trial runs more fully described in Article VI hereof, is less than the speed guaranteed under the terms of this CONTRACT and the SPECIFICATIONS provided such deficiency in actual speed is not more than three-tenths (3/10ths) of one (1) knot below the guaranteed speed.

(b) However, as for the deficiency of more than three-tenths (3/10ths) of one (1) knot in actual speed below the speed guaranteed under this CONTRACT, the CONTRACT PRICE shall be reduced as follows [Fractions of less than one-tenth (1/10th) of a knot shall be prorated]:

For the three-tenths (3/10ths) of a knot — a total sum of US $100,000

For the four-tenths (4/10ths) of a knot ——a total sum of US $175,000

For the five-tenths (5/10ths) of a knot —— a total sum of US $390,000

For the six-tenths (6/10ths) of a knot ——– a total sum of US $520,000

For the seven-tenths (7/10ths) of a knot —— a total sum of US $650,000

For the eight-tenths (8/10ths) of a knot —— a total sum of US $780,000

* The above figures are not cumulative.

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However, unless the parties agree otherwise, the total amount of reduction from the CONTRACT PRICE shall not exceed the amount due to cover the deficiency of eight-tenths (8/10ths) of one (1) knot below the guaranteed speed at the rate of reduction as specified above.

(c) If the deficiency in actual speed of the VESSEL is more than eight-tenths (8/10ths) of one (1) knot below the speed guaranteed under this CONTRACT, then the BUYER, at its option, may, subject to the BUILDER’s right to effect alterations or corrections as provided in Article VI 5 . hereof, cancel this CONTRACT or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for eight-tenths (8/10ths) of one (1) knot of deficiency only.

3. Excessive Fuel Consumption

(a) The CONTRACT PRICE shall not be affected or changed by reason of the fuel consumption of the VESSEL’s main engine, as determined by the engine manufacturer’s shop trial as per the SPECIFICATIONS being more than the guaranteed fuel consumption of the VESSEL’s main engine, if such excess is not more than five per cent (5%) over the fuel consumption guaranteed in Article I. 2 hereof.

(b) However, as for the excess of more than five per cent (5%) in the actual fuel consumption over the guaranteed fuel consumption of the VESSEL’s main engine the CONTRACT PRICE shall be reduced by United States Dollars Ninety Thousand (US $90,000), for each full one per cent (1%) increase in fuel consumption in excess of the said five per cent (5%) increase in fuel consumption [fractions of less than one per cent (1%) shall be prorated] . However, unless the parties agree otherwise, the total amount of reduction from the CONTRACT PRICE shall not exceed the amount due to cover the excess of ten per cent (10%) over the guaranteed fuel consumption of the VESSEL’s main engine at the rate of reduction as specified above.

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(c) If such actual fuel consumption exceeds the guaranteed fuel consumption of the VESSEL’s main engine by more than ten per cent (10%), the BUYER, at its option, may, subject to the BUILDER’s right to effect alterations or corrections as specified in Article VI . hereof, cancel this CONTRACT or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for the ten per cent (10%) increase only.

4. Deadweight below Contract Requirements

(a) The CONTRACT PRICE of the VESSEL shall not be affected or changed, if actual deadweight, determined as provided in this CONTRACT and the SPECIFICATIONS, is below the guaranteed deadweight of 179,700 metric tons on the moulded design draft of 18.2 meters required by this CONTRACT and the SPECIFICATIONS by an amount of 2,000 metric tons or less.

(b) However, should the deficiency in the actual deadweight of the VESSEL be in excess of 2,000 metric tons below the said guaranteed deadweight, then the CONTRACT PRICE of the VESSEL shall be reduced for each full one (1) metric ton [fractions of less than one (1) metric ton shall be disregarded] of decreased deadweight in excess of 2,000 metric tons by the sum of United States Dollars Seven Hundred (US $700) per metric ton. However, unless the parties agree otherwise, the total amount of deduction from the CONTRACT PRICE shall not exceed the amount due to cover the deficiency of 4,500 metric tons below the guaranteed deadweight hereinabove.

(c) If the deficiency in the deadweight of the VESSEL is more than 4,500 metric tons below the said guaranteed deadweight, then the BUYER, at its option, may, subject to the BUILDER’s right to effect alterations or corrections without the BUYER’s prior consent as specified in Article VI.5 . hereof, cancel this CONTRACT or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for 4,500 metric tons of deficiency only.

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5. EFFECT OF CANCELLATION

It is expressly understood and agreed by the parties hereto that in any case, if the BUYER cancels this CONTRACT under this Article, the BUYER shall not be entitled to any liquidated damages.

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ARTICLE IV    INSPECTION AND APPROVAL

1. Appointment of BUYER’s Representative

The BUYER shall timely despatch to and maintain at the SHIPYARD, at its own cost, expense and risk, one or more representatives (hereinafter each called the “BUYER’S REPRESENTATIVE”), who shall be duly accredited in writing by the BUYER to supervise adequately the construction by the BUILDER of the VESSEL, her equipment and all accessories. Before the commencement of any item of work under this CONTRACT, the BUILDER shall, whenever reasonably required, previously exhibit, furnish to, and within the limits of the BUYER’S REPRESENTATIVE’s authority, secure the approval from the BUYER’S REPRESENTATIVE of any and all plans and drawings prepared in connection therewith . Upon appointment of the BUYER’S REPRESENTATIVE, the BUYER shall notify the BUILDER in writing of the name and the scope of the authority of the BUYER’S REPRESENTATIVE.

2. Authority of the BUYER’s Representative

Such BUYER’S REPRESENTATIVE shall, at all times during working hours of the construction until delivery of the VESSEL, have the right to inspect the VESSEL, her equipment and all accessories, and work in progress, or materials utilized in connection with the construction of the VESSEL, wherever such work is being done or such materials are stored, for the purpose of determining that the VESSEL, her equipment and accessories are being constructed in accordance with the terms of this CONTRACT and/or the SPECIFICATIONS and the PLAN.

The BUYER’S REPRESENTATIVE shall, within the limits of the authority conferred upon him by the BUYER, make decisions or give advice to the BUILDER on behalf of the BUYER promptly on all problems arising out of, or in connection with, the construction of the VESSEL and generally act in a reasonable manner with a view to cooperating to the utmost with the BUILDER in the construction process of the VESSEL.

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The decision, approval or advice of the BUYER’S REPRESENTATIVE shall be deemed to have been given by the BUYER and once given shall not be withdrawn, revoked or modified except with consent of the BUILDER. Provided that the BUYER’S REPRESENTATIVE or his assistants shall comply with the foregoing obligations, no act or omission of the BUYER’S REPRESENTATIVE or his assistants shall, in any way, diminish the liability of the BUILDER under Article IX (WARRANTY OF QUALITY). The BUYER’S REPRESENTATIVE shall notify the BUILDER promptly in writing of his discovery of any construction or materials, which he believes do not or will not conform to the requirements of the CONTRACT, the SPECIFICATIONS and the PLAN and likewise advise and consult with the BUILDER on all matters pertaining to the construction of the VESSEL, as may be required by the BUILDER, or as he may deem necessary.

However, if the BUYER’S REPRESENTATIVE fails to submit to the BUILDER without delay any such demand concerning alterations or changes with respect to the construction, arrangement or outfit of the VESSEL, which the BUYER’S REPRESENTATIVE has examined, inspected or attended at the test thereof under this CONTRACT or the SPECIFICATIONS and the PLAN, the BUYER’S REPRESENTATIVE shall be deemed to have approved the same and shall be precluded from making any demand for alterations, changes, or complaints with respect thereto at a later date.

The BUILDER shall comply with any such demand which is not contradictory to this CONTRACT, the SPECIFICATIONS or the PLAN, provided that any and all such demands by the BUYER’S REPRESENTATIVE with regard to construction, arrangement and outfit of the VESSEL shall be submitted in writing to the authorized representative of the BUILDER. The BUILDER shall notify the BUYER’S REPRESENTATIVE of the names of the persons who are from time to time authorized by the BUILDER for this purpose .

It is agreed upon between the BUYER and the BUILDER that the modifications, alterations or changer and other measures necessary to comply with such demand may be effected at a convenient time and place at the BUILDER’s reasonable discretion in view of the construction schedule of the VESSEL.

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In the event that the BUYER’S REPRESENTATIVE shall advise the BUILDER that he has discovered or believes the construction or materials do not or will not conform to the requirements of this CONTRACT and the SPECIFICATIONS or the PLAN, and the BUILDER shall not agree with the views of the BUYER’S REPRESENTATIVE in such respect, either the BUYER or the BUILDER may, with the agreement of the other party, seek an opinion of the CLASSIFICATION SOCIETY or failing such agreement, request an arbitration in accordance with the provisions of Article XIV hereof. The Principal Surveyor of the CLASSIFICATION SOCIETY or the arbitration tribunal, as the case may be, shall determine whether or not a nonconformity with the provisions of this CONTRACT, the SPECIFICATIONS and the PLAN exists.

3. Approval of Drawings

(a) The BUILDER shall submit to the BUYER three (3) copies of each of the plans and drawings to be submitted to the BUYER for its approval at its address as set forth in Article XIX hereof. The BUYER shall, within twenty one (21) calendar days after receipt thereof return to the BUILDER one (1) copy of such plans and drawings with the approval or comments, if any, of the BUYER. A list of the plans and drawings to be so submitted to the BUYER shall be mutually agreed upon between the parties hereto.

(b) When and if the BUYER’S REPRESENTATIVE shall have been sent by the BUYER to the SHIPYARD in accordance with Paragraph 1 of this Article, the BUILDER may submit the remainder, if any, of the plans and drawings in the agreed list, to the BUYER’S REPRESENTATIVE for his approval, unless otherwise agreed upon between the parties hereto.

The BUYER’S REPRESENTATIVE shall, within seven (7) days after receipt thereof, return to the BUILDER one (1) copy of such plans and drawings with his approval or comments written thereon, if any. Approval by the BUYER’S REPRESENTATIVE of the plans and drawings duly submitted to him shall be deemed to be the approval by the BUYER for all purposes of this CONTRACT.

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(c) In the event that the BUYER or the BUYER’S REPRESENTATIVE shall fail to return the plans and drawings to the BUILDER within the time limit as hereinabove provided, such plans and drawings shall be deemed to have been automatically approved without any comment. In the event the plans and drawings submitted by the BUILDER to the BUYER or the BUYER’S REPRESENTATIVE in accordance with this Article do not meet with the BUYER’s or the BUYER’S REPRESENTATIVE’s approval, the matter may be submitted by either party hereto for determination pursuant to Article XIV hereof. If the BUYER’s comments on the plans and drawings that are returned to the BUILDER by the BUYER within the said time limit are not clearly specified or detailed, the BUILDER shall be entitled to place its own interpretation on such comments in implementing them.

4. Salaries and Expenses

All salaries and expenses of the BUYER’S REPRESENTATIVE or any other person or persons employed by the BUYER hereunder shall be for the BUYER’s account.

5. Responsibility of the BUILDER

(a) The BUILDER shall provide the BUYER’S REPRESENTATIVE and his assistants free of charge with suitably furnished office space equipped with air conditioning at, or in the vicinity of, the SHIPYARD together with access to telephone and facsimile facilities as may be necessary to enable the BUYER’S REPRESENTATIVE and his assistants to carry out their work under this CONTRACT. However, the BUYER shall pay for the telephone or facsimile facilities used by the BUYER’S REPRESENTATIVE or his assistants.

The BUILDER, its employees, agents and subcontractors, during its working hours until delivery of the VESSEL, shall arrange for them to have free and ready access to the VESSEL, her equipment and accessories, and to any other place (except the areas controlled for the purpose of national security) where work is being done, or materials are being processed or stored in connection with the construction of the VESSEL including the premises of sub-contractors.

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The BUYER’S REPRESENTATIVE or his assistants or employees shall observe the work’s rules and regulations prevailing at the BUILDER’s and its sub-contractor’s premises. The BUILDER shall promptly provide to the BUYER’S REPRESENTATIVE and/or his assistants and shall ensure that its sub-contractors shall promptly provide all such information as he or they may reasonably request in connection with the construction of the VESSEL and her engines, equipment and machinery.

(c) The BUYER’S REPRESENTATIVE and his assistants shall at all times remain the employees of the BUYER. The BUILDER shall not be liable to the BUYER or the BUYER’S REPRESENTATIVE or to his assistants or to the BUYER’s employees or agents for personal injuries, including death, during the time they, or any of them, are on the VESSEL, or within the premises of either the BUILDER or its sub-contractors, or are otherwise engaged in and about the construction of the VESSEL, unless, however, such personal injuries, including death, are caused by the gross negligence of the BUILDER, its sub-contractors, or its or their employees or agents. The BUILDER shall not be liable to the BUYER for damages to, or destruction of property of the BUYER or of the BUYER’S REPRESENTATIVE or his assistants or the BUYER’s employees or agents, unless such damages, loss or destruction is caused by the gross negligence of the BUILDER, its sub-contractors, or its or their employees or agents.

6. RESPONSIBILITY OF THE BUYER

The BUYER shall undertake and assure that the BUYER’S REPRESENTATIVE shall carry out his duties, hereunder in accordance with the normal international shipbuilding practice and in such way so as to avoid any unnecessary increase in building cost, delay in the construction of the VESSEL and/or any disturbance in the construction schedule of the BUILDER.

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The BUILDER has the right to request the BUYER to replace the Representative who is deemed unsuitable and unsatisfactory for the proper progress of the VESSEL’s construction. The BUYER shall investigate the situation by sending its representative(s) to the SHIPYARD if necessary, and if the BUYER consider that such BUILDER’s request is justified, the BUYER shall effect such replacement as soon as conveniently arrangeable.

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ARTICLE V     MODIFICATIONS, CHANGES AND EXTRAS

1. How Effected

Minor modifications or changes to the SPECIFICATIONS and the PLAN under which the VESSEL is to be constructed may be made at any time hereafter by written agreement of the parties hereto. Any modification or change requested by the BUYER which does not affect the frame-work of the SPECIFICATIONS shall be agreed to by the BUILDER if the BUYER agrees to adjustment of the CONTRACT PRICE, deadweight and/or cubic capacity, speed requirements, the DELIVERY DATE and other terms and conditions of this CONTRACT reasonably required as a result of such modification or change. The BUILDER has the right to continue construction of the VESSEL on the basis of the SPECIFICATIONS and the PLAN until the BUYER has agreed to such adjustments. The BUILDER shall be entitled to refuse: to make any alteration, change or modification of the SPECIFICATIONS and/or the PLAN requested by the BUYER, if the BUYER does not agree to the aforesaid adjustments within fourteen (14) days of the BUILDER’s notification of the same to the BUYER, or, if, in the BUILDER’s judgement, the compliance with such request of the BUYER would cause an unreasonable disruption of the normal working schedule of the SHIPYARD.

The BUILDER, however, agrees to exert its efforts to accommodate such reasonable request by the BUYER so that the said change and modification shall be made at a reasonable cost and within the shortest period of time reasonably possible. The aforementioned agreement to modify and change the SPECIFICATIONS and the PLAN may be effected by exchange of letters or facsimiles manifesting the agreement.

The letters and facsimiles exchanged by the parties pursuant to the foregoing shall constitute an amendment to this CONTRACT, the SPECIFICATIONS or the PLAN under which the VESSEL shall be built. Upon consummation of such an agreement to modify and change the SPECIFICATIONS or the PLAN, the BUILDER shall alter the construction of the VESSEL in accordance therewith including any addition to, or deduction from, the work to be performed in connection with such construction.

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2. Substitution of Material

If any materials, machinery of equipment required for the construction of the VESSEL by the SPECIFICATIONS and the PLAN or otherwise under this CONTRACT cannot be procured in time to meet the BUILDER’S construction schedule for the VESSEL, or are in short supply, or are unreasonably high in price compared with the prevailing international market price, the BUILDER may supply, subject to the BUYER’S prior written approval, other materials, machinery or equipment of equal and effect capable of meeting the Rules and Regulations of the CLASSIFICATION SOCIETY and other regulatory bodies. The BUILDER shall not, however, be relieved of its obligations if such non-availability could have been for seen or occasioned by forward planning. In this case, the BUILDER shall not be entitled to an extension of the DELIVERY DATE or to increase in the CONTRACT PRICE by reason of such non-availability.

3. Changes in Rules and Regulations

If the specified rules and regulations with which the construction of the VESSEL is required to comply are altered or changed after the date of this CONTRACT by the CLASSIFICATION SOCIETY or bodies authorized to make such alterations or changes, either the BUYER or the BUILDER, upon receipt of due notice thereof, shall forthwith give notice thereof to the other party in writing. Thereupon, within ten (10) days after giving the notice to the BUILDER or receiving the notice from the BUILDER, the BUYER shall advise the BUILDER as to the alterations and changes, if any, to be made on the VESSEL which the BUYER, in its sole discretion, shall decide. The BUILDER shall not be obliged to comply with such alterations and/or changes if the BUYER fails to notify the BUILDER of its decision within the time limit stated above.

The BUILDER shall comply promptly with the said request of the BUYER, provided that the BUILDER and the BUYER shall first agree to:

(a) any increase or decrease in the CONTRACT PRICE of the VESSEL that is occasioned by such compliance;

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(b) any extension or advancement in the DELIVERY DATE of the VESSEL that is occasioned by such compliance;

(c) any increase or decrease in the deadweight and/or cubic capacity of the VESSEL, if such compliance results in any increase or reduction in the deadweight and/or cubic capacity;

(d) adjustment of the speed requirements if such compliance results in any increase or reduction in the speed; and

(e) any other alterations in the terms of this CONTRACT or of the SPECIFICATIONS and the PLAN or both, if such compliance makes such alterations of the terms necessary.

Any delay in the construction of the VESSEL caused by the BUYER’s delay in making a decision or agreement as above shall constitute a permissible delay under this CONTRACT. Such agreement by the BUYER shall be effected in the same manner as provided above for modification and change of the SPECIFICATIONS and the PLAN.

This paragraph does not refer to alterations or changes of rules and regulations of the CLASSIFICATION SOCIETY which were announced to the BUILDER in writing by the CLASSIFICATION SOCIETY on or before the date of signing of this CONTRACT.

The BUILDER may, at its sole discretion and responsibility, subcontract any part of the construction work of the VESSEL. The BUYER shall be informed by the BUILDER accordingly about the place where the subcontracting work is to be carried out in advance so that supervision can be performed properly.

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ARTICLE VI    TRIALS AND COMPLETION

1. Notice

The BUILDER shall notify the BUYER in writing or by facsimile at least fourteen (14) days in advance of the time and place of the trial run of the VESSEL. Such notice shall specify the place from which the VESSEL will commence her trial run and approximate date upon which the trial run is expected to take place. Such date shall be further confirmed by the BUILDER five (5) days in advance of the trial run by facsimile. The BUYER shall confirm in writing to the BUILDER that the VESSEL is ready for sea trials. In case of dispute between the parties whether the VESSEL is ready for sea trials the decision of the representative of the CLASSIFICATION SOCIETY is binding.

The BUYER’S REPRESENTATIVE, who is to witness the performance of the VESSEL during such trial run, shall be present at such place on the date specified in such notice. Should the BUYER’S REPRESENTATIVE fail to be present after the BUILDER’s due notice to the BUYER as provided above, the BUILDER shall be entitled to conduct such trial run with the presence of the representative(s) of the CLASSIFICATION SOCIETY only without the BUYER’S REPRESENTATIVE being present. In such case, the BUYER shall be obliged to accept the VESSEL on the basis of a certificate issued by the BUILDER that the VESSEL, after the trial run, subject to alterations and corrections, if necessary, has been found to conform with the SPECIFICATIONS and this CONTRACT and is satisfactory in all respects, provided the BUILDER first makes such corrections and alterations promptly.

2. Weather Condition

In the event of unfavorable weather on the date specified for the trial run, the trial run shall take place on the first available day that weather conditions permit. The parties hereto recognize that the weather conditions in Korean waters, in which the trial run is to take place, are such that great changes in weather may arise momentarily and without warning and therefore, it is agreed that if, during the trial

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runs, the weather should become so unfavorable that the trial run cannot be continued, then the trial run shall be discontinued and postponed until the first favorable day next following, unless the BUYER shall assent to the acceptance of the VESSEL by notification in writing on the basis of such trial run so far made prior to such change in weather conditions. Any delay of the trial run caused by such unfavorable weather conditions shall also operate to extend the DELIVERY DATE of the VESSEL for the period of delay occasioned by such unfavorable weather conditions.

3. How Conducted

All expenses in connection with the trials of the VESSEL are to be for the account of the BUILDER, which, during the trials, is to provide at its own expense the necessary crew to comply with conditions of safe navigation. The trials shall be conducted in the manner prescribed in this CONTRACT and the SPECIFICATIONS, and shall prove fulfilment of the performance requirements for the trials as set forth in the SPECIFICATIONS.

The BUILDER shall be entitled to conduct preliminary sea trials, during which the propulsion plant and/or its appurtenance shall be adjusted according to the BUILDER’s judgement. The BUILDER shall have the right to repeat any trial whatsoever as it deems necessary. Furthermore the BUYER’s REPRESENTATIVE is entitled to participate in any preliminary sea trials conducted by the BUILDER.

4. Consumable Stores

The BUILDER shall load the VESSEL with the required quantity of fuel oil, lubricating oil and greases, fresh water, and other stores necessary to conduct the trials as set forth in the SPECIFICATIONS. The necessary ballast (fuel oil, fresh water and such other ballast as may be required) to bring the VESSEL to the trial load draft, as specified in the SPECIFICATIONS, shall be supplied and paid for by the BUILDER whilst lubricating oil and greases shall be supplied and paid for by the BUYER within the time advised by the BUILDER for the conduct of sea trials as well as for use before the delivery of the VESSEL to the BUYER. The fuel oil as well as lubricating oil and greases shall be in accordance with the

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engine specifications and the BUYER shall decide and advise the BUILDER of the supplier’s name for lubricating oil and greases before the work-commencement of the VESSEL, provided that the supplier shall be acceptable to the BUYER and/or the makers of all the machinery.

Any fuel oil, fresh water or other consumable stores furnished and paid for by the BUILDER for trial runs remaining on board the VESSEL, at the time of acceptance of the VESSEL by the BUYER, shall be bought by the BUYER from the BUILDER at the BUILDER’s purchase price for such supply in Korea and payment by the BUYER thereof shall be made at the time of delivery of the VESSEL. The BUILDER shall pay the BUYER at the time of delivery of the VESSEL for the consumed quantity of any lubricating oil and greases which were furnished and paid for by the BUYER at the BUYER’s purchase price thereof. The consumed quantity of lubricating oils and greases shall be calculated on the basis of the difference between the remaining amount, including the same remaining in the main engine, other machinery and their pipes, stern tube and the like, and the supplied amount.

5. Acceptance or Rejection

(a) If, during any sea trial, any breakdown occurs entailing interruption or irregular performance which can be repaired on board, the trial shall be continued after such repairs and be valid in all respects.

(b) However, if, during or after the trial run, it becomes apparent that the VESSEL or any part of her equipment requires alterations or corrections which but for this provision would or might entitle the BUYER to cancel this CONTRACT, the BUILDER shall notify the BUYER promptly in writing or by facsimile to such effect and shall simultaneously advise the BUYER of the estimated additional time required for the necessary alterations or corrections to be made.

The BUYER shall, within two (2) days of receipt from the BUILDER of notice of completion of such alterations or corrections and after such further trials or tests as necessary, notify the BUILDER in writing or by

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facsimile confirmed in writing of its acceptance, qualified acceptance or rejection of the VESSEL, all in accordance with the SPECIFICATIONS and the PLAN and this CONTRACT, and shall not be entitled to reject the VESSEL on such grounds until such time.

(c) Save as above provided, the BUYER shall, within two (2) days after completion of the trial run, notify the BUILDER in writing or by facsimile confirmed in writing of its acceptance of the VESSEL or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS and the PLAN or this CONTRACT.

If the BUILDER is in agreement with the BUYER’s determinations as to non-conformity, the BUILDER shall make such alterations or changes as may be necessary to correct such non-conformity and shall prove the fulfilment of this CONTRACT and the SPECIFICATIONS by such tests or trials as may be necessary.

The BUYER shall, within two (2) days after completion of such tests and/or trials, notify the BUILDER in writing or by facsimile confirmed in writing of its acceptance or rejection of the VESSEL.

(d) However, the BUYER shall not be entitled to reject the VESSEL by reason of any minor or insubstantial items judged from the point of view of standard shipbuilding and shipping practice as not being in conformity with the SPECIFICATIONS, but, in that case, the BUILDER shall not be released from the obligation to correct and/or remedy such minor or insubstantial items as soon as practicable after the delivery of the VESSEL.

6. Effect of Acceptance

The BUYER’s written, or facsimile notification of acceptance delivered to the BUILDER as above provided, shall be final and binding insofar as conformity of the VESSEL to this Contract and the SPECIFICATIONS is concerned and shall preclude the BUYER from refusing formal delivery of the VESSEL as hereinafter

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provided, if the BUILDER complies with all conditions of delivery, as herein set forth and provided that, in the case of qualified acceptance, any matters which were mentioned in the notice of the qualified acceptance by the BUYER as requiring correction have been corrected satisfactorily.

If the BUYER fails to notify the BUILDER of its acceptance or rejection of the VESSEL as hereinabove provided, the BUYER shall be deemed to have accepted the VESSEL. Nothing contained in this Article shall preclude the BUILDER from exercising any and all rights which the BUILDER has under this CONTRACT if the BUILDER disagrees with the BUYER’s rejection of the VESSEL or any reasons given for such rejection, including arbitration provided in Article XIV hereof.

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ARTICLE VII    DELIVERY

1. Time and Place

The VESSEL shall be delivered by the BUILDER to the BUYER at the SHIPYARD, safely afloat on 25^th June, 2010 (hereinafter called the “DELIVERY DATE”) after completion of satisfactory trials and acceptance by the BUYER in accordance with the terms of Article VI, except that, in the event of delays in delivery of the VESSEL by the BUILDER due to causes which under the terms of this CONTRACT permit extensions of the time for delivery of the VESSEL, the aforementioned DELIVERY DATE shall be extended accordingly. The BUILDER shall have the right to deliver the VESSEL earlier than the DELIVERY DATE, but not earlier than the day falling 60 days prior to the DELIVERY DATE and provided always that the BUILDER shall have completed the VESSEL in accordance with the terms of this CONTRACT and the SPECIFICATIONS and PLAN and after completion of satisfactory trials and acceptance by the BUYER in accordance with the terms of Article VI hereof.

2. When and how Effected

Provided that the BUYER shall concurrently with delivery of the VESSEL release to the BUILDER the DELIVERY INSTALMENT as set forth in Article X.2. hereof and shall have fulfilled all of its obligations provided for in this CONTRACT, delivery of the VESSEL shall be forthwith effected upon acceptance thereof by the BUYER, as hereinabove provided, by the concurrent delivery by each of the parties hereto to the other of a PROTOCOL OF DELIVERY AND ACCEPTANCE acknowledging delivery of the VESSEL by the BUILDER and acceptance thereof by the BUYER, which PROTOCOL OF DELIVERY AND ACCEPTANCE shall be prepared in duplicate and signed by each of the parties hereto.

3. Documents to be Delivered to the BUYER

Upon delivery and acceptance of the VESSEL, the BUILDER shall deliver to the BUYER the following documents, which shall accompany the aforementioned PROTOCOL OF DELIVERY AND ACCEPTANCE:

(a) PROTOCOL OF TRIALS of the VESSEL made pursuant to this CONTRACT and the SPECIFICATIONS,

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(b) PROTOCOL OF INVENTORY of the equipment of the VESSEL, including spare parts, all as specified in the SPECIFICATIONS,

(c) PROTOCOL OF STORES OF CONSUMABLE NATURE, such as all fuel oil and fresh water remaining in tanks if its cost is charged to the BUYER under Article VI.4. hereof,

(d) DRAWINGS AND PLANS pertaining to the VESSEL as stipulated in the SPECIFICATIONS, which shall be furnished to the BUYER at no additional cost,

(e) ALL CERTIFICATES required to be furnished upon delivery of the VESSEL pursuant to this CONTRACT, the SPECIFICATIONS and the customary shipbuilding practice, including

(i) Classification Certificate

(ii) Safety Construction Certificate

(iii) Safety Equipment Certificate

(iv) Safety Radiotelegraphy Certificate

(v) International Loadline Certificate

(vi) International Tonnage Certificate

(vii) Suez Canal Tonnage Certificate

(viii) De-ratting Exemption Certificate

(ix) I.O.P.P. Certificate

(x) BUILDER’s Certificate

(xi) Deadweight Certificate (issued by the BUILDER)

However, it is agreed by the parties that if the Classification Certificate and/or other certificates are not available at the time of delivery of the VESSEL, provisional certificates shall be accepted by the BUYER, provided that the BUILDER shall furnish the BUYER with formal certificates as promptly as possible after such formal certificates have been issued.

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(f) DECLARATION OF WARRANTY of the BUILDER that the VESSEL is delivered to the BUYER free and clear of any liens, claims, mortgages, or other encumbrances upon the BUYER’s title thereto, and in particular, that the VESSEL is absolutely free of all burdens in the nature of imposts, taxes, or charges imposed by the Korean governmental authorities as well as of all liabilities of the BUILDER to its sub-contractors and employees and of all liabilities arising from the operation of the VESSEL in trial runs, or otherwise, prior to delivery except as otherwise provided under this CONTRACT.

(g) BILL OF SALE by the BUILDER to the BUYER transferring title to the VESSEL from the BUILDER to the BUYER, such Bill of Sale to be duly notarised and apostilled.

(h) Power of Attorney of the BUILDER authorising the execution of all documents listed in the Article VII, such Power of Attorney to be duly notarised and apostilled.

4. Tender of the VESSEL

If the BUYER fails to take delivery of the VESSEL after completion thereof according to this CONTRACT and the SPECIFICATIONS, the BUILDER shall have the right to tender delivery of the VESSEL after compliance with all procedural requirements as provided above.

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5. Title and Risk

Title and risk shall pass to the BUYER upon delivery of the VESSEL being effected as stated above and the BUILDER shall be free of all responsibility or liability whatsoever related with this CONTRACT except for the warranty of quality contained in Article IX and the obligation to correct and/or remedy, as provided in Article VI.5.(d), if any, it being expressly understood that, until such delivery is effected, the VESSEL and equipment thereof are at the entire risk of the BUILDER including but not confined to, risks of war, insurrection and seizure by Governments or Authorities, whether Korean or foreign, and whether at war or at peace . The title to the BUYER’S SUPPLIES as provided in Article XII shall remain with the BUYER and the BUILDER’s responsibility for such BUYER’S SUPPLIES shall be as described in Article XII.

6. Removal of the VESSEL

The BUYER shall take possession of the VESSEL immediately upon delivery thereof and shall remove the VESSEL from the SHIPYARD within three (3) days after delivery thereof is affected. If the BUYER shall not remove the VESSEL from the SHIPYARD within the foresaid three (3) days, the BUYER shall pay to the BUILDER the reasonable mooring charges of the VESSEL.

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ARTICLE VIII    DELAYS AND EXTENSIONS OF TIME (FORCE MAJEURE)

1. Causes of Delay

If, at any time after signing this CONTRACT, either the construction or delivery of the VESSEL or any performance required hereunder as a prerequisite to the delivery thereof is delayed by any of the following events: namely war, acts of state or government, blockade, revolution, insurrections, mobilization, civil commotion, riots, strikes, sabotage, lockouts, or other labour disturbances, Acts of God or the public enemy, plague or other epidemics, quarantines, shortage or prolonged failure of electric current, freight embargoes, or defects in major forgings or castings, or delays or defects in the BUYER’S SUPPLIES as stipulated in Article XII, if any, or shortage of materials, machinery or equipment or inability to obtain delivery or delays in delivery of materials, machinery or equipment, provided that at the time of ordering the same could reasonably be expected by the BUILDER to be delivered in time or defects in materials, machinery or equipment which could not have been detected by the BUILDER using seasonable care or earthquakes, tidal waves, typhoons, hurricanes, prolonged or unusually severe weather conditions or destruction of the premises or works of the BUILDER or its sub-contractors, or of the VESSEL, or any part thereof, by fire, landslides, flood, lightning, explosion, or delays in the BUILDER’s other commitments resulting from any such causes as described in this Article which in turn delay the construction of the VESSEL or the BUILDER’s performance under the CONTRACT, or delays caused by the CLASSIFICATION SOCIETY or the BUYER’s faulty action or omission, or other causes beyond the control of the BUILDER, its sub-contractors or suppliers as the case may be, or for any other causes which, under the terms of this CONTRACT, authorize and permit extension of the time for delivery of the VESSEL, then, in the event of delays due to the happening of any of the aforementioned contingencies, the DELIVERY DATE of the VESSEL under this CONTRACT shall be extended for a period of time, which shall not exceed the total accumulated time of all such delays. The BUILDER shall reasonably demonstrate that the cause of delay was not occasioned by the fault of the BUILDER and the BUILDER shall take all reasonable steps to mitigate its effect upon the construction of the VESSEL.

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2. Notice of Delays

Within ten (10) days after the date on which the BUILDER becomes aware of the occurrence of the cause of delay on account of which the BUILDER claims that it is entitled under this CONTRACT to an extension of the DELIVERY DATE of the VESSEL, excluding delays due to arbitration, the BUILDER shall advise the BUYER in writing or by facsimile of the date on which such cause of delay commenced, the reasons thereof and, if possible, its estimated duration of the probable delay in the delivery of the VESSEL, and shall supply the BUYER, if reasonably available, evidence to justify the delay claimed . Within one (1) week after such cause of delay ends, the BUILDER shall likewise advise the BUYER in writing or by facsimile of the date on which such cause of delay ended, and also shall specify the period of time by which the BUILDER claims the DELIVERY DATE should be extended by reason of such delay. Failure of the BUYER to object to the BUILDER’s notification of any claim for extension of the DELIVERY DATE of the VESSEL within one (1) week after receipt by the BUYER of such notification shall be deemed to be a waiver by the BUYER of its right to object to such extension.

3. Right to Cancel for Excessive Delay

If the total accumulated time of all permissible and non-permissible delays, excluding delays due to (i) arbitration under Article XIV, (ii) the BUYER’s defaults under Article XI, (iii) modifications and changes under Article V or (iv) delays or defects in the BUYER’S SUPPLIES as stipulated in Article XII, aggregates three hundred and sixty five (365) days or more, then, the BUYER may, at any time thereafter, cancel this CONTRACT by giving a written notice of cancellation to the BUILDER. Such cancellation shall be effective as of the date the notice thereof is received by the BUILDER.

If the BUYER has not served the notice of cancellation as provided in the above or Article III.1. hereof, the BUILDER may, at any time after expiration of the accumulated time of the delay in delivery, either three hundred and sixty five (365) days in case of the delay in this Paragraph or two hundred and seventy (270) days in case of the delay in Article III.1, notify the BUYER of the future date upon which the BUILDER estimates the VESSEL will be ready for delivery and

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demand in writing or by facsimile that the BUYER make an election either to cancel this CONTRACT or to consent to the delivery of the VESSEL at such future date, in which case the BUYER shall, within seven (7) days after receipt of such demand, make and notify the BUILDER of such election. If the BUYER elects to consent to the delivery of the VESSEL at such future date (or other future date as the parties may agree):

(a) Such future date shall become the contractual delivery date for the purposes of this CONTRACT and shall be subject to extension by reason of permissible delays as herein provided, and

(b) If the VESSEL is not delivered by such revised contractual delivery date (as extended by reason of permissible delays), the BUYER shall have the same right of cancellation upon the same terms as provided in the above and Article III.1.

If the BUYER shall not make an election within seven (7) days as provided hereinabove, the BUYER shall be deemed to have accepted such extension of the DELIVERY DATE to the future delivery date indicated by the BUILDER.

4. Definition of Permissible Delays

Delays on account of the foregoing causes shall be understood to be permissible delays, and are to be distinguished from non-permissible unauthorized delays on account of which the CONTRACT PRICE of the VESSEL is subject to adjustment as provided in Article III hereof.

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ARTICLE IX    WARRANTY OF QUALITY

1. Guarantee of Material and Workmanship

The BUILDER, for the period of twelve (12) months from the date of delivery of the VESSEL to the BUYER, guarantees the VESSEL and all parts and equipment thereof that are manufactured or furnished by the BUILDER under this CONTRACT against all defects which are directly due to defective materials, construction miscalculation and/or poor workmanship, provided such defects have not been caused by perils of the sea, rivers or navigation, or by normal wear and tear, overloading, improper loading or stowage, fire, accident, incompetence, mismanagement, negligence or wilful neglect or by alteration or addition by the BUYER not previously approved by the BUILDER.

The BUILDER will be responsible for all machinery or parts of machinery and all constructions which are supplied by sub-contractors and will guarantee the above mentioned for a period of twelve (12) months on the basis as laid down in this Paragraph.

2. Notice of Defects

The BUYER or its duly authorized representative will notify the BUILDER in writing or by facsimile promptly after discovery of any defect for which a claim is to be made under this guarantee.

The BUYER’s written notice shall include full particulars as to the nature of the defect and the extent of the damage caused thereby, but excluding consequential damage as hereinafter provided. The BUILDER will be under no obligation with respect to this guarantee in respect of any claim for defects discovered prior to the expiry date of the guarantee, unless notice of such defects is received by the BUILDER before the expiry date. However, facsimile advice received by the BUILDER within three (3) days after such expiry date that a claim is forthcoming will be sufficient compliance with the requirement as to time, provided that such facsimile advice shall include at least a brief description of the

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defect including the identity of the equipment, extent of damage, name and number of any replacement part and description of any remedial work required, and that full particulars are given to the BUILDER not later than seven (7) days after the expiry date.

3. Remedy of Defects

(a) The BUILDER shall remedy, at its expense, any defects, against which the VESSEL is guaranteed under this Article, by making all necessary and reasonably practicable repairs or replacements at the SHIPYARD or elsewhere as provided for in (b) herein below.

In any cases, removal of the VESSEL to the location at which the repair or replacements are to be effected, shall be at the BUYER’s risk and expenses.

(b) If it is impractical (which shall include, but not be limited to, an emergency) to bring the VESSEL to the SHIPYARD, the BUYER may cause the necessary repairs or replacements to be made elsewhere which is deemed by the BUYER with the consent of the BUILDER which shall not be unreasonably withheld, to be suitable for the purpose, provided that, in such event, the BUILDER may forward or supply replacement parts or materials to the VESSEL, unless forwarding or supplying thereof to the VESSEL would impair or delay the operation or working schedule of the VESSEL. In the event that the BUYER proposes to cause the necessary repairs or replacements to be made to the VESSEL at any shipyard or works other than the SHIPYARD, the BUYER shall first (but in all events as soon as reasonably possible) give the BUILDER notice in writing or by facsimile of the time and place such repairs will be made, and if the VESSEL is not thereby delayed, or her operation or working schedule is not thereby impaired, the BUILDER shall have the right to verify by its own representative(s) the nature and extent of the defects complained of. The BUILDER shall, in such case, promptly advise the BUYER by facsimile, after such examination has been completed, of its acceptance or rejection of the defects as ones that are covered by the guarantee herein provided. Upon the BUILDER’s acceptance of the defects as justifying remedy under

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this Article, or upon award of the arbitration so determining, the BUILDER shall compensate the BUYER for an amount equal to the reasonable cost of making the same repairs or replacements at the SHIPYARD. The BUILDER shall compensate the BUYER for the documented expenses incurred by the BUYER, but not to exceed one hundred and twenty percent (120%) of the cost of making such repair or replacement at the SHIPYARD, subject to the cost of making such repair or replacement in the SHIPYARD is being equal to the cost of the same repair and replacement in a major shipyard in Singapore.

(c) In the event that it is necessary for the BUILDER to forward a replacement of a defective part under this guarantee, replacement parts shall be supplied to the BUYER by airfreight (if air transport is feasible and necessary to assure the VESSEL’s undisturbed operation) on a freight prepaid basis to the port designated by the BUYER.

(d) The BUILDER reserves the option to retrieve, at the BUILDER’s cost, any of the replaced equipment/parts in case defects are remedied in accordance with the provisions in this Article.

(d) Any dispute under this Article shall be referred to arbitration in accordance with the provisions of Article XIV hereof.

4. Extent of BUILDER’s Liability

(a) After delivery of the VESSEL the responsibility of the BUILDER in respect of or in connection with the VESSEL or this CONTRACT shall be limited to the extent expressly provided in the Paragraph 4 of this Article. Except as expressly provided in this Paragraph, in no circumstances and on no ground whatsoever shall the BUILDER have any responsibility or liability whatsoever or howsoever arising in respect of or in connection with the VESSEL or this CONTRACT after the delivery of the VESSEL. Further, but without in any way limiting the generality of the foregoing, the BUILDER shall have no liability or responsibility whatsoever or howsoever arising for or in connection with any consequential or special losses, damages or expenses, any liability to any third party or any fine,

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compensation, penalty or other payment or sanction incurred by or imposed upon the BUYER or any other party whatsoever in relation to or in connection with this CONTRACT or the VESSEL.

(b) The BUILDER shall be under no obligation with respect to defects discovered after the expiration of the period of guarantee specified above, nor in any event shall the BUILDER be liable for any worsening of defects after the expiry date of the guarantee (notwithstanding Paragraph 3 of this Article).

(c) The BUILDER shall under no circumstances be liable for defects in the VESSEL or any part of equipment thereof caused by perils of the sea, rivers or navigation, or normal wear and tear, or fire or accidents at sea or elsewhere or by mismanagement, accident, negligence, wilful neglect, alteration or addition on the part of the BUYER, its employees or agents on or doing work on the VESSEL, including the VESSEL’s officers, crew and passengers. Likewise, the BUILDER shall not be liable for defects in the VESSEL or any part of equipment thereof that are due to repairs which were made by other than the BUILDER at the discretion of the BUYER as hereinabove provided.

(d) The liability of the BUILDER provided for in this Article shall be limited to defects directly caused by defective materials, construction miscalculation and/or poor workmanship as above provided. The BUILDER shall not be obliged to repair, not be liable for, damage to the VESSEL or any part of the equipment thereof, which after delivery of the VESSEL, is caused other than by the defects of the nature specified above. The guarantees contained as hereinabove in this Article replace and exclude any other liability, guarantee, warranty and/or condition imposed or implied by statute, common law, custom or otherwise on the part of the BUILDER by reason of the construction and sale of the VESSEL for and to the BUYER.

5. Guarantee Engineer

The BUILDER may at the request of the BUYER appoint a guarantee engineer to serve on the VESSEL as its representative for a period of three (3) months from

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the date the VESSEL is delivered. However, if the BUYER and the BUILDER shall deem it necessary to keep the guarantee engineer on the VESSEL for a longer period, then he shall remain on board the VESSEL after the said three (3) months, but no longer than twelve (12) months from the delivery of the VESSEL.

The BUYER and its employees shall give such guarantee engineer full cooperation in carrying out his duties as the representative of the BUILDER on board the VESSEL.

The BUYER shall accord the guarantee engineer treatment comparable to the VESSEL’s chief engineer and shall provide board and lodging at no cost to the BUILDER or the guarantee engineer. While the guarantee engineer is on board the VESSEL, the BUYER shall pay to the BUILDER a sum of United States Dollars Three Thousand Five Hundred (US$3,500.-) per month, the expenses of his repatriation to Mokpo, Korea by air upon termination of his service, the expenses of his communication with the BUILDER incurred in performing his duties and expenses, if any, of his medical and hospital care in the VESSEL’s hospital. The BUILDER and the BUYER shall, prior to delivery of the VESSEL, execute a separate agreement regarding the guarantee engineer.

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ARTICLE X    PAYMENT

1. Currency

All payments under this CONTRACT shall be made in United States Dollars.

2. Terms of Payment

The payments of the CONTRACT PRICE shall be made after CONTRACT EFFECTIVENESS as follows:

(a) First Instalment

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) shall be paid within three (3) business days after receipt by the BUYER of the original of the refund guarantee referred to Paragraph 7 of this Article.

(b) Second Instalment

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) shall be paid within three (3) business days after the later of (i) receipt by the BUYER of the BUILDER’s notice with confirmation by the CLASSIFICATION SOCIETY that the steel cutting has been carried out and (ii) 25^th June, 2009,

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(c) Third Instalment

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) shall be paid within three (3) business days after receipt by the BUYER of the BUILDER’s notice with confirmation by the CLASSIFICATION SOCIETY that the keel laying has been carried out.

(d) Fourth Instalment

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) shall be paid within three (3) business days after receipt by the BUYER of the BUILDER’s notice with confirmation by the CLASSIFICATION SOCIETY that the launching has been carried out.

(e) Fifth Instalment (DELIVERY INSTALMENT)

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) plus or minus any increase or decrease due to modifications and/or adjustments, if any, arising prior to delivery of the VESSEL of the CONTRACT PRICE under Articles III and V of this CONTRACT shall be paid to the BUILDER concurrently with the delivery of the VESSEL. (The date stipulated for payment of first, second, third and fourth instalment mentioned above is hereinafter in this Article and in Article XI referred to as the “DUE DATE” of that instalment).

Under this CONTRACT’, in counting the business days, only Saturdays and Sundays are excepted. When a due date falls on a day when banks are not open for business in Greece, Korea or USA such due date shall fall due upon the first business day next following.

It is understood and agreed upon by the BUILDER and the BUYER that all payments under the provisions of this Article shall not be delayed or withheld by the BUYER due to any dispute or disagreement of whatsoever nature arising between the BUILDER and the BUYER, provided however that no payment shall

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be made by the BUYER under this CONTRACT if the refund guarantee to be issued pursuant to paragraph 7 of this Article X has not been issued. If the refund guarantee is withdrawn or in any way ceases to be valid at any time during the course of this CONTRACT on or before the delivery of the VESSEL, then the BUYER may terminate this CONTRACT by notice to the BUILDER in writing or by telefax confirmed in writing in accordance with the provisions of paragraph 5 of this Article X. Should there be any dispute in this connection, the matter shall be dealt with in accordance with the provisions of arbitration in Article XIV hereof.

3. DEMAND FOR PAYMENT

At least fourteen (14) days prior to the date of each event provided in Paragraph 2 of this Article on which any payment shall fall due hereunder, with the exception of the payment of the first instalment, the BUILDER shall notify the BUYER by facsimile of the date such payment becomes due.

The BUYER shall immediately acknowledge receipt of such notification by facsimile to the BUILDER, and make payment as set forth in this Article. If the BUILDER fails to receive the BUYER’s said acknowledgement within three (3) days after sending the aforementioned notification, the BUILDER shall promptly facsimile to the BUYER a second notification of similar import. The BUYER shall immediately acknowledge by facsimile receipt of the foregoing second notification regardless of whether or not the first notification was acknowledged as aforesaid.

4. Method of Payment

(a) All the pre-delivery payments and the payment due on delivery in settlement of the CONTRACT PRICE as provided for in Paragraph 2 of this Article shall be made to the BUILDER’s Bank specified (c) herein below at the BUYER’s cost and expense on or before the DUE DATE thereof by telegraphic transfer under telefax advice to the BUILDER.

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(b) The DELIVERY INSTALMENT as provided in paragraph 2.(e) of this Article shall be deposited with the BUILDER’s Bank by telegraphic transfer at least three (3) business days prior to scheduled delivery date of the VESSEL notified by the BUILDER with instruction that the said instalment is payable to the BUILDER against presentation by the BUILDER to the BUILDER’s Bank of duplicate original copy of the PROTOCOL OF DELIVERY AND ACCEPTANCE of the VESSEL signed by the BUILDER and the BUYER.

(c) Reference to the BUILDER’s Bank

- . Name	: Industrial Bank of Korea
- . Address	: 50, Ulchiro 2-Ga, Chungu, Seoul, Korea
- . Account No.	: 191-002348-56-00016
- . Telex Number	: K239384
- . Telefax Number	: 82-2-729-7204
- . Swift Code	: IBKOKRSE
- . Beneficiary	: Korea Shipyard Co., Ltd.
- . Through Bank	: Deutsche Bank Trust Company Americas,              New York
	ABA Number    : 021001033
	Swift Code         : BKTRUS33
	Customer            : Industrial Bank of Korea

(d) Simultaneously with each of the payments, the BUYER shall advise the BUILDER of the details of the payment by facsimile and at the same time, the BUYER shall cause the BUYER’s remitting bank to advise the BUILDER’s bank of the details of such payments by authenticated bank cable or telex.

5. Refund by the BUILDER

The payments made by the BUYER to the BUILDER prior to delivery of the VESSEL shall constitutes advances to the BUILDER. If the VESSEL is rejected by the BUYER in accordance with the terms of this CONTRACT, or except in the case of rescission or cancellation of this CONTRACT by the BUILDER under the

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provisions of Article XI hereof, if the BUYER terminates, cancels or rescinds this CONTRACT pursuant to any of the provisions of this CONTRACT specifically permitting the BUYER to do so, the BUILDER shall forthwith refund to the BUYER, in United States Dollars, the full amount of total sums paid by the BUYER to the BUILDER in advance of delivery together with interest thereon as herein provided.

The transfer and other bank charges of such refund shall be for the BUILDER’s account. The interest rate of the refund, as above provided, shall be five per cent (5.0%) per annum from the date following the date of receipt by the BUILDER of the pre-delivery instalment(s) to the date of remittance by telegraphic transfer of such refund.

It is hereby understood by both parties that payment of any interest provided herein is by way of liquidated damages due to cancellation of this CONTRACT and not by way of compensation for use of money.

If the BUILDER is required to refund to the BUYER the instalments paid by the BUYER to the BUILDER as provided in this Paragraph, the BUILDER shall return to the BUYER all of the BUYER’S SUPPLIES as stipulated in Article XII which were not incorporated into the VESSEL and pay to the BUYER an amount equal to the cost to the BUYER of these supplies incorporated into the VESSEL.

6. Discharge of Obligations

Such refund as provided in the foregoing Paragraphs 4 and 5 by the BUILDER to the BUYER shall forthwith discharge all the obligations, duties and liabilities of each of the parties hereto to the other except the claims of the BUILDER against the BUYER, if any, under this CONTRACT. Any and all refunds or payments due to the BUYER under this CONTRACT shall be effected by telegraphic transfer to the account specified by the BUYER.

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7. Refund Guarantee

As security for refund of the instalments of the CONTRACT PRICE payable prior to delivery of the VESSEL, the BUILDER shall furnish the BUYER at least three (3) business days prior to the payment of the first instalment with a letter of guarantee of a Korean bank acceptable to the BUYER, covering the amount of the predelivery instalment(s) plus interest in favour of the BUYER. Such letter of guarantee shall have substantially the same form and substance as Exhibit A annexed hereto.

The transfer and other bank charges of such refund shall be for the BUILDER’s account. The interest rate of the refund, as above provided shall be five per cent (5.0%) per annum from the date following the date of receipt by the BUILDER of the pre-delivery instalment(s) to the date of remittance by telegraphic transfer of such refund.

If the BUILDER is required to refund to the BUYER the instalment(s) paid by the BUYER to the BUILDER as provided in this Paragraph, the BUILDER shall return to the BUYER all of the BUYER’s SUPPLIES as stipulated in Article XII which were not incorporated into the VESSEL and pay to the BUYER an amount equal to the cost to the BUYER of those supplies incorporated into the VESSEL.

8. Performance Guarantee

As security for the correct fulfilment and performance of this CONTRACT by the BUYER and following nomination by QML of the NOMINEE under Article XV hereof, QML shall concurrently with such nomination being made by QML, furnish the BUILDER with a Letter of Guarantee issued by QML in such form and with such terms and conditions as mentioned in EXHIBIT “B” as annexed hereto.

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ARTICLE XI    BUYER’S DEFAULT

1. Definition of Default

The BUYER shall be deemed to be in default under this CONTRACT in the following cases:

(a) If any of the first, second, third and fourth instalment is not paid to the BUILDER within respective DUE DATE of such instalments; or

(b) If the DELIVERY INSTALMENT is not deposited at the account of the BUILDER with the BUILDER’s Bank in accordance with Article X 4. (b) hereof or if the said DELIVERY INSTALMENT deposit is not (for reasons not attributable to the BUILDER) released to the BUILDER against presentation by the BUILDER of a duplicate original copy of the PROTOCOL OF DELIVERY AND ACCEPTANCE; or

(c) If the BUYER fails to take delivery of the VESSEL when the VESSEL is duly tendered for delivery by the BUILDER under the provisions of Article VII hereof; or

(d) If an order or an effective resolution shall be passed for winding up of the BUYER (except for the purpose of reorganization, merger or amalgamation); or

(e) If the BUYER fails to be in punctual, due and full compliance with any of its obligations under this CONTRACT.

In case the BUYER is in default of any of its obligations under this CONTRACT, the BUILDER is entitled to and shall have the following rights, powers and remedies in addition to such other rights, powers and remedies as the BUILDER may have elsewhere in this CONTRACT and/or at law, at equity or otherwise.

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2. Effect of the BUYER’s Default on or before the Delivery of the VESSEL

If the BUYER shall be in default as provided in Paragraph 1 above of its obligations under this CONTRACT, then:

(a) The DELIVERY DATE of the VESSEL shall be extended automatically for the actual period of continuence of such default and the BUILDER shall not be obliged to pay any liquidated damages for the delay in delivery of the VESSEL caused thereby.

(b) The BUYER shall pay to the BUILDER interest at the rate five per cent (5.0%) per annum in respect of the instalment(s) in default from the respective DUE GATE to the date of actual receipt by the BUILDER of the full amount of such instalment(s).

(c) If the BUYER is in default in payment of any of the instalment(s) due and payable prior to or simultaneously with the delivery of the VESSEL, the BUILDER shall, in writing or by facsimile, notify the BUYER to that effect, and the BUYER shall, upon receipt of such notification, forthwith acknowledge in writing or by facsimile to the BUILDER that such notification has been received.

(d) If any of the BUYER’s default continues for a period of fifteen (15) business days after the BUILDER’s notification to the BUYER of such default, the BUILDER may, at its option, rescind this CONTRACT by serving upon the BUYER a written notice or a facsimile notice of rescission confirmed in writing.

(e) In the event of such cancellation by the BUILDER of this CONTRACT due to the BUYER’s default as provided for in paragraph 1 above, the BUILDER shall be entitled to retain and apply the instalments already paid by the BUYER to the recovery of the BUILDER’s loss and damage due to the BUYER’s default and the cancellation of this CONTRACT and at the same time the BUILDER shall have the full right and power either to complete or not to complete the VESSEL which is the sole property of the BUILDER as it deems fit, and to sell the VESSEL at a public or private sale on such terms and conditions as the BUILDER thinks fit without being answerable for any loss or damage.

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The proceeds received by the BUILDER from the sale shall be applied in addition to the instalment(s) retained by the BUILDER as mentioned hereinabove as follows:

First, in payment of all reasonable costs and expenses of the sale of the VESSEL, including interest thereon at five per cent (5.0%) per annum from the respective date of payment of such costs and expenses aforesaid to the date of sale on account of the BUYER’s default.

Second, if the VESSEL has been completed, in or towards satisfaction of the unpaid balance of the CONTRACT PRICE, to which shall be added the cost of all additional work and extras agreed by the BUYER including interest thereon at five per cent (5.0%) per annum from the respective DUE DATE of the instalment in default to the date of sale, or if the VESSEL has not been completed, in or towards satisfaction of the unpaid amount of the cost incurred by the BUILDER prior to the date of sale on account of construction of the VESSEL, including work, labor, materials and reasonably estimated profit which the BUILDER would have been entitled to receive if the VESSEL had been completed and delivered plus interest thereon at five per cent (5.0%) per annum from the respective DUE DATE of the instalment in default to the date of sale.

Third, the balance of the proceeds, if any, shall belong to the BUYER, and shall forthwith be paid over to the BUYER by the BUILDER.

In the event of the proceeds from the sale together with instalment(s) retained by the BUILDER being insufficient to pay the BUILDER, the BUYER shall be liable for the deficiency and shall pay the same to the BUILDER upon its demand.

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ARTICLE XII    BUYER’S SUPPLIES

1. Responsibility of the BUYER

The BUYER shall, at its cost and expense, supply all of the items to be furnished by the Buyer as specified in the SPECIFICATIONS (hereinafter called the “BUYER’S SUPPLIES”), to the BUILDER at the SHIPYARD in perfect condition ready for installation and in accordance with the time schedule to be furnished by the BUILDER to meet they building schedule of the VESSEL.

In order to facilitate the installation of the BUYER’S SUPPLIES by the BUILDER, the BUYER shall furnish the BUILDER with the necessary plans, instruction books, test report and all test certificates required by the BUILDER and shall cause the representative(s) of the makers of the BUYER’S SUPPLIES to give the BUILDER any advice, instructions or assistance which the BUILDER may reasonably require in the installation or adjustment thereof at the SHIPYARD, all without cost or expense to the BUILDER.

The BUYER shall be liable for any expense incurred by the BUILDER for repair of the BUYER’S SUPPLIES due to defective design or materials, poor workmanship or performance or due to damage in transit and the DELIVERY DATE of the VESSEL shall be extended for the period of such repair if such repair shall affect the delivery of the VESSEL.

If necessary, the commissioning into good order of the BUYER’S SUPPLIES during and after installation on board shall be made at the BUYER’s expense by the representative of respective maker or the person designated by the BUYER in accordance with the BUILDER’s building schedule.

Should the BUYER fail to deliver to the BUILDER the BUYER’S SUPPLIES and the necessary document or advice for such supplies within the time specified by the BUILDER, the DELIVERY DATE of the VESSEL shall automatically be extended for the period of such delay if such delay in delivery shall affect the delivery of the VESSEL. In such event, the BUYER shall pay to the BUILDER all losses and damages sustained by the BUILDER directly related to the VESSEL

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due to such delay in the delivery of the BUYER’S SUPPLIES and such payment shall be made upon delivery of the VESSEL, provided, however, that the BUILDER shall have:

(a) furnished the BUYER with the time schedule referred to above, two (2) months prior to installation of the BUYER’S SUPPLIES and

(b) given the BUYER written notice of any delay in delivery of the BUYER’S SUPPLIES and the necessary document or advice for such supplies as soon as the delay occurs which might give rise to a claim by the BUILDER under this Paragraph.

Furthermore, if the delay in delivery of the BUYER’S SUPPLIES and the necessary document or advice for such supplies should exceed ten (10) days from the date specified by the BUILDER, the BUILDER shall be entitled to proceed with construction of the VESSEL without installation of such items (regardless of their nature or importance to the BUYER or the VESSEL) in or on the VESSEL without prejudice to the BUILDER’s rights as hereinabove provided, and the BUYER shall accept the VESSEL so completed.

2. Responsibility of the BUILDER

The BUILDER shall be responsible for storing, safekeeping and handling the BUYER’S SUPPLIES which the BUILDER is required to install on board the VESSEL under the SPECIFICATIONS after delivery of such supplies to the SHIPYARD, and shall install such supplies on board the VESSEL at the BUILDER’s expense .

However, the BUILDER shall not be responsible for the quality, performance or efficiency of any equipment included in the BUYER’S SUPPLIES and is under no obligation with respect to the guarantee of such equipment against any defects caused by poor quality, performance or efficiency of the BUYER’S SUPPLIES. If any of the BUYER’S SUPPLIES is lost or damaged while in the custody of the BUILDER, the BUILDER shall, if the loss or damage is due to wilful default or negligence on its part, be responsible for such loss or damage.

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ARTICLE XIII    INSURANCE

1. Extent of Insurance Coverage

From the time of launching of the VESSEL until the VESSEL is delivered to and accepted by the BUYER, the BUILDER shall, at its own cost and expense, keep the VESSEL and all machinery, materials, equipment, appurtenances and outfit delivered to the SHIPYARD for the VESSEL or built into, or installed in or upon the VESSEL fully insured with first class insurance company in Korea, against the risks under cover corresponding to the “Institute Clause for Builder’s Risk” upon the London Market.

The insurance coverage shall be carried up to the date of delivery of the VESSEL, and shall be in an amount equal to the CONTRACT PRICE.

A copy of the insurance policy shall be delivered to the BUYER.

2. Partial Loss / Total Loss

2.1 In the event of partial loss prior to delivery, all insurance shall be payable to the BUILDER and the BUILDER shall apply the amount recovered under the insurance policies to the repair of such damage to meet the SPECIFICATIONS at no additional expenses to the BUYER. The BUYER shall accept the VESSEL under this CONTRACT if fully repaired and completed in accordance with this CONTRACT and SPECIFICATIONS.

2.2 However, in the event that the VESSEL is determined to be an actual or constructive total loss, the BUILDER shall, by mutual agreement with the BUYER, either;

(a) Proceed in accordance with the terms of this CONTRACT, in which case the amount recovered under said insurance policy shall be applied to the reconstruction and/or repair of the VESSEL’s damage, provided the parties hereto shall have first agreed in writing as to such reasonable postponement of the DELIVERY DATE and adjustment of other terms of this CONTRACT including the CONTRACT PRICE and as may be necessary for the completion of such reconstruction; or

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(b) Refund to the BUYER the amount of all the instalments paid to the BUILDER under this CONTRACT whereupon this CONTRACT shall be deemed to be terminated and all rights, duties, liabilities and obligations of each of the parties to the other shall terminate forthwith.

If the parties hereto fail to reach such agreement within two (2) months after the VESSEL is determined to be an actual or constructive total loss, the provision of sub-paragraph 2.2 (b) as above shall apply.

3. Termination of the BUILDER’s Obligation to Insure

The BUILDER’s obligation to insure the VESSEL hereunder shall cease and terminate forthwith upon delivery thereof and acceptance of the VESSEL by the BUYER.

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ARTICLE XIV    DISPUTES AND ARBITRATION

1. Proceedings

1.1 Decision by the Classification Society

If any dispute arises between the parties hereto in regard to the design and/or construction of the VESSEL, its machinery and equipment, and/or in respect of the materials and/or workmanship thereof and/or thereon, and/or in respect of interpretations of this CONTRACT or the SPECIFICATIONS and PLAN, the parties may by mutual agreement refer the dispute to the CLASSIFICATION SOCIETY or to such other expert as may be mutually agreed between the parties hereto and whose decision shall be final, conclusive and binding upon the parties hereto.

1.2 Proceeding of Arbitration

In the event that the parties hereto do not agree to settle a dispute according to Paragraph 1 of this Article XIV and/or in the event of any other dispute of any kind whatsoever between the parties and relating to this CONTRACT or its rescission or any stipulation herein, such dispute shall be submitted to arbitration in London subject to the London Maritime Arbitrators Association. Each party shall appoint an arbitrator and the two arbitrators so appointed shall appoint a third arbitrator (together hereinafter call the “ARBITRATION BOARD”).

If the two arbitrators are unable to agree upon a third arbitrator within twenty (20) days after appointment of the second arbitrator, either of the said two arbitrators may apply to the President for the timing being of the London Maritime Arbitrators Association to appoint the third arbitrator.

Such arbitration shall be in accordance with subject to the provisions of the English Arbitration Act 1996 or any statutory modification or re-enactment thereof for the time being in force.

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Either party may demand arbitration of any such dispute by giving notice to the other party. Any demand for arbitration by either of the parties hereto shall state the name of the arbitrator appointed by such party and shall also state specifically the question or questions as to what such party is demanding arbitration. Within fourteen (14) days after receipt of notice of such demand for arbitration, the other party shall in turn appoint a second arbitrator and give notice in writing of such appointment to the party demanding arbitration. If a party fails to appoint an arbitrator as aforementioned within fourteen (14) days following receipt of notice of demand for arbitration by the other party, the party failing to appoint an arbitrator shall be deemed to have accepted and appointed, as its own arbitrator, the arbitrator appointed by the party demanding arbitration and the arbitration shall proceed before this sole arbitrator who alone in such event shall constitute the ARBITRATION BOARD.

The award of the arbitrators shall be final and binding on all parties.

2. Notice of Award

The award shall be immediately be given to the parties hereto in writing or by telefax.

3. Expenses

The ARBITRATION BOARD shall determine which party shall bear the expenses of the arbitration or the portion of such expenses which each party shall bear.

4. Entry in Court

Judgment upon the award may be entered in any court having jurisdiction thereof.

5. Alteration of Delivery Date

In the event of reference to arbitration of any dispute arising out of matters occurring prior to delivery of the VESSEL, the award may include any postponement of the DELIVERY DATE which the ARBITRATION BOARD may deem appropriate and/or a determination by the ARBITRATION BOARD as to whether a delay is classified as permissible or non-permissible for the purpose of Article VIII hereof and/or Article V hereof.

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ARTICLE XV    SUCCESSORS AND ASSIGNS

The BUILDER agrees that, prior to delivery of the VESSEL, this CONTRACT may, with the prior written approval of the BUILDER, which the BUILDER shall not unreasonably withhold, be transferred to and the title thereof may be taken by another company. In the event of any assignment pursuant to the terms of this CONTRACT, the assignee, its successors and assigns shall succeed to all the rights and obligations of the BUYER under this CONTRACT. However, the BUYER shall remain responsible for performance by the assignee, its successors and assigns of all the BUYER’s obligations, liabilities and responsibilities under this CONTRACT.

The BUILDER further agrees that the BUYER may assign to a financial institution(s) providing the BUYER with finance in relation to the acquisition of the VESSEL all its rights and benefits (but none of its obligations) under this CONTRACT without the consent of, but with a due prior notice of such assignment to, the BUILDER.

It is understood that any expenses including legal and other costs incurred due to the assignment or transfer of this CONTRACT shall be for the account of the BUYER.

The BUILDER accepts that QML has the right to nominate another company (such company hereinafter called the “NOMINEE”) as buyer in its place under this CONTRACT subject to the BUILDER’S prior written consent, such consent not to be unreasonably withheld or unduly delayed, provided however that the BUILDER’S consent shall not be withheld or delayed in the event that the NOMINEE has been formed by QML for the purpose of taking over this CONTRACT and is owned by at least fifty percent (50%) by QML . Upon such nomination by QML being accepted by the NOMINEE:

(a) The NOMINEE shall replace QML as the BUYER under this CONTRACT and shall have all rights and obligation that QML had by signing this CONTRACT as if the NOMINEE was named in this CONTRACT ab initio the buyer under this CONTRACT.

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(b) QML will remain responsible for the NOMINEE’S obligations under this CONTRACT and shall issue a Performance Guarantee as a guarantor in favour of the BUILDER in the form annexed to this CONTRACT as EXHIBIT “B”

(c) If at the time of nomination the letter of guarantee referred in paragraph 7 of Article X hereof has beers issued, the BUILDER shall procure that the bank that has issued the said letter of guarantee referred to in paragraph 7 of Article X hereof shall issue a supplemental letter to such letter of guarantee whereby the existing letter of guarantee in favour of QML shall be amended to be in favour of the NOMINEE.

The cost and expenses, if any, for transferring this CONTRACT and any other document from the BUYER to the NOMINEE shall be borne by the BUYER.

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ARTICLE XVI    TAXES AND DUTIES

1. Taxes

Unless otherwise expressly provided for in this CONTRACT, all costs and taxes including stamp duties, if any, incurred in or levied by any country except Korea in connection with this CONTRACT shall be borne by the BUYER and corresponding costs and taxes in Korea, before delivery of the VESSEL, if any, shall be borne by the BUILDER.

2. Duties

The BUILDER shall hold the BUYER harmless from any payment of duty imposed in Korea upon materials or supplies which, under the terms of this CONTRACT, or amendments thereto, may be supplied by the BUYER from abroad for the construction of the VESSEL.

The BUILDER shall likewise hold the BUYER harmless from any payment of duty imposed in Korea in connection with materials or supplies for operation of the VESSEL, including running stores, provisions and supplies necessary to stock the VESSEL for its operation so far as the concerned regulation allows such indemnity in Korea. This indemnity does not, however, extend to any items purchased by the BUYER for use in connection with the VESSEL, which are not absolutely required for the construction or operation of the VESSEL.

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ARTICLE XVII    PATENTS, TRADEMARKS AND COPYRIGHTS

1. Patents, Trademarks and Copyrights

Machinery and equipment of the VESSEL, whether made or furnished by the BUILDER under this CONTRACT, may bear the patent numbers, trademarks, or trade names of the manufacturers. The BUILDER shall defend and save harmless the BUYER from all liabilities or claims for or on account of the use of any patents, copyrights or design of any nature or kind, or for the infringement thereof including any unpatented invention made or used in the performance of this CONTRACT and also for any costs and expenses of litigation, if any, in connection therewith. No such liability or responsibility shall be with the BUILDER with regard to components and/or equipment and/or design supplied by the BUYER.

Nothing contained herein shall be construed as transferring any patent or trademark rights or copyrights in equipment covered by this CONTRACT, and all such rights are hereby expressly reserved to the true and lawful owners thereof.

2. Rights to the Specifications, Plans, etc.

The BUILDER retains all rights with respect to the SPECIFICATIONS, plans and working drawings, technical description calculations, test results and other data, information and documents concerning the design and construction of the VESSEL and the BUYER undertakes therefore not to disclose the same to any third parties or divulge any information contained therein, without the prior written consent of the BUILDER, excepting where it is necessary for the usual operation, repair and maintenance of the VESSEL.

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ARTICLE XVIII    INTERPRETATION AND GOVERNING LAW

This CONTRACT has been prepared in English and shall be executed in duplicate and in such number of additional copies as may be required by either party respectively. The parties hereto agree that this CONTRACT shall be governed and shall be construed in accordance with the laws of England.

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ARTICLE XIX     NOTICES

Any and all notices, requests, demands, instructions, advices and communications in connection with this CONTRACT shall be written in English, sent by registered air mail, facsimile and shall be deemed to be given when first received whether by registered mail, facsimile. They shall be addressed as follows, unless and until otherwise advised:

To the BUILDER

Korea Shipyard Co., Ltd.

1402 Nogjinri, Gunnaemyon, Jindogun, Jeollanamdo, Korea

Telephone	:   + 82 61 542 4521-6
Facsimile	:   + 82 61 542 0491
E-Mail	:   ksyard@gmail.com
Attention	:   Mr. Jeon, Min-Hwan

To the BUYER

c/o Quintana Management LLC

13 Pandoras & Kyprou Street

166 74 Glyfada

Athens, Greece

Telephone	:   +30 210 89 85 056
Facsimile	:   +30 210 8948 823
E-Mail	:   smolaris@quintanamaritime.com and     mkoutsouridis@quintanamaritime.com
Attention	:   Mr. Stamatis Molaris and Mr. Michael Koutsouridis

The said notices shall become effective upon receipt of the letter, facsimile communication by the receiver thereof. Where a notice by facsimile is concerned which is required to be confirmed by letter, then, unless the CONTRACT or the relevant Article thereof otherwise requires, the notice shall become effective upon receipt of the facsimile.

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ARTICLE XX    EFFECTIVENESS OF THIS CONTRACT

This CONTRACT shall become effective upon signing by the parties hereto.

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ARTICLE XXI    EXCLUSIVENESS

This CONTRACT shall constitute the only and entire agreement between the parties hereto, and unless otherwise expressly provided for in this CONTRACT, all other agreements, oral or written, made and entered into between the parties prior to the execution of this CONTRACT shall be null and void.

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

BUYER: QUINTANA MARITIME LIMITED
By:	/s/ Stamatis Molaris
Name:	Stamatis Molaris
Title:	Attorney in Fact
BUILDER: KOREA SHIPYARD CO., LTD.
By:	/s/ Jeon Min-Hwan
Name:	Jeon, Min-Hwan
Title:	President

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EXHIBIT A

LETTER OF GUARANTEE

Date:

Gentlemen:

We hereby issue our irrevocable Letter of Guarantee number                  in favor of                          (hereinafter called the “BUYER”) for account of Korea Shipyard Co., Ltd., Korea (hereinafter called the “BUILDER”) as follows in connection with the shipbuilding contract dated                      (hereinafter called the “CONTRACT”) made by and between the BUYER and the BUILDER for the construction and sale of one (1) 180,000 DWT Class Bulk Carrier having the BUILDER’s Hull No.              (hereinafter called the “VESSEL”).

In consideration of the BUYER entering into the CONTRACT with the BUILDER and for other good and valuable consideration (the receipt and adequacy of which is hereby acknowledged) if in connection with the terms of the CONTRACT the BUYER shall become entitled to a refund of the instalments or advance payments made to the BUILDER prior to the delivery of the VESSEL, we hereby irrevocably guarantee the repayment of the same to the BUYER within thirty (30) days after demand by the BUYER being initially US$                              (say U.S. Dollars                      only) together with interest thereon at the rate of five percent (5%) per annum from the date following the date of receipt by the BUILDER to the date of remittance by telegraphic transfer of such refund.

The amount of this Letter of Guarantee will be automatically increased upon the BUILDER’s receipt of the respective instalment, not more than three times, each time by the amount of instalment or advance payment plus interest thereon as provided in the CONTRACT, but in any eventuality the amount of this guarantee shall not exceed the total sum of US$                              (say U.S. Dollars              only) Plus interest thereon at the rate of five percent (5%) per annum from the date following the date of the BUILDER’s receipt of each instalment to the date of remittance by telegraphic transfer of the refund.

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This Letter of Guarantee is available against the BUYER’s written demand and signed statement certifying that the BUYER’s demand for refund has been made in conformity with Article X of the CONTRACT and the BUILDER has failed to make the refund.

Notwithstanding the provisions hereinabove, in the event that within thirty (30) days of the date of your demand to the BUILDER referred to above we receive notification from you or the BUILDER accompanied by written confirmation to the effect that an arbitration has been initiated and that your claim to cancel the CONTRACT or your claim for refund thereunder has been disputed and referred to arbitration in accordance with the provisions of the CONTRACT, we shall under this Letter of Guarantee pay to you the sum (not exceeding US$              plus interest by the same manner hereinabove) due to you from the BUILDER pursuant to the award of a London arbitration tribunal immediately upon receipt from you of a demand for payment of the sum and a copy of the award.

This Letter of Guarantee shall become null and void upon receipt by the BUYER of the sum guaranteed hereby or upon acceptance by the BUYER of the delivery of the VESSEL in accordance with the terms of the CONTRACT and, in either case, this Letter of Guarantee shall be returned to us.

This Letter of Guarantee is assignable and valid from the date of this Letter of Guarantee until such time as the VESSEL is delivered by the BUILDER to the BUYER in accordance with the provisions of the CONTRACT.

All demands, statements or notices in connection with this Letter of Guarantee shall be validly given if sent to us by telefax to our office at                                              , Korea as follows:

Korea

Tel:

Fax:

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In the event that any withholding or deduction is imposed by any law, the undersigned will pay such additional amount as maybe necessary in order that the actual amount received after deduction or withholding shall be equal to the amount that would have been received if such deduction or withholding were not required.

This Letter of Guarantee shall remain in full force and effect, notwithstanding any amendments made to the CONTRACT by the parties thereto.

This Letter of Guarantee shall be governed by and construed in accordance with the laws of England and any dispute hereunder shall be subject to arbitration in England under the provisions of the Arbitration Act 1996 or any modification or re-enforcement thereof at the time.

Very truly yours,

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EXHIBIT “B”

Messrs.

KOREA SHIPYARD CO., LTD.

1243-1, Yonsan-Dong

Mokpo City

Jeollanam-Do

Korea

Date:                     , 2006

PERFORMANCE GUARANTEE

Gentlemen:

In consideration of your executing a SHIPBUILDING CONTRACT (hereinafter called the “CONTRACT”), dated                      with                                              having its registered office at                                                                                (hereinafter called the “BUYER”) providing for the construction of one (1) 180,000 DWT Class Bulk Carrier bearing Hull No.              (hereinafter called the “VESSEL”), and providing, among other things, for payment of the CONTRACT PRICE amounting to United States Dollars                                                                 only (US$                             ), the undersigned hereby unconditionally and irrevocably guarantees to you, your successors and assignee, the due and faithful performance by the BUYER of all its liabilities and responsibilities under the CONTRACT and any supplements, amendments, changes, or modifications hereinafter made thereto, (hereby expressly waiving notice of any such supplement, amendment, change or modification as may be agreed to by the BUYER and confirming that this Guarantee shall be fully applicable to the CONTRACT as so supplemented, amended, changed or modified and to the CONTRACT, if it shall be assigned by the BUYER in accordance with Article XV of the CONTRACT) including but not limited to, due and prompt payment of the CONTRACT PRICE by the BUYER to you, your successors, and assignee under the CONTRACT and any supplements, amendments, changes or modifications as aforesaid.

The undersigned hereby certifies, represents and warrants that all acts, conditions and things required to be done and performed and to have occurred precedent to the creation and issuance of this Guarantee, and to constitute the same the valid and

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legally binding obligation of the undersigned enforceable in accordance with its terms have been done and performed and have occurred in due and strict compliance with the CONTRACT and applicable law.

The payment by the undersigned under this Guarantee shall be made forthwith upon receipt by us of written demand from you including a statement that the BUYER is in default of payment of the amounts that were due under the CONTRACT, without requesting you to take any or further procedure or step against the BUYER.

This Performance Guarantee shall become effective when the CONTRACT comes into effect according to its terms, and terminate upon payment of the DELIVERY INSTALMENT by the BUYER.

This Guarantee is governed by the laws of England and any dispute arising out of this guarantee may be referred to the non-exclusive jurisdiction of the Courts of England.

Yours faithfully,

For and on behalf of Quintana Maritime Limited

/s/ Stamatis Molaris
Name :	Stamatis Molaris
Title :	Attorney in Fact

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EX-10.18

Exhibit 10.18

SHIPBUILDING CONTRACT

FOR

THE CONSTRUCTION OF

ONE (1)

180,000 DWT CLASS BULK CARRIER

HULL NO. 0007

BETWEEN

QUINTANA MARITIME LIMITED

(AS BUYER)

AND

KOREA SHIPYARD CO., LTD.

(AS BUILDER)

SHIPBUILDING CONTRACT

THIS CONTRACT is made as of 3rd December, 2006 by and between QUINTANA MARITIME LIMITED, a company incorporated and existing under the laws of the Republic of the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Republic of the Marshall Islands MH96960 (hereinafter called “QML”) or a company to be nominated by QML pursuant to Article XV hereof (hereinafter called the “NOMINEE”)(QML until such nomination takes place and the NOMINEE following such nomination having taken place, in either case hereinafter called the “BUYER”), the party of the first part and KOREA SHIPYARD CO ., LTD ., a company organized and existing under the laws of the Republic of Korea, having its registered office at 1243-1, Yonsan-bong, Mokpo-City, Jeollanam-Do, Korea (hereinafter called the ‘BUILDER”), the party of the second part,

WITNESSETH:

In consideration of the mutual covenants contained herein, the BUILDER agrees to design, build, launch, equip and complete one (1) 180,000 DWT Class Bulk Carrier as described in Article 1 hereof (hereinafter called the “VESSEL”) at the BUILDER’S shipyard in Jindo, Korea (hereinafter called the “SHIPYARD”) and to deliver and sell the VESSEL to the BUYER, and the BUYER agrees to accept delivery of and purchase from the BUILDER the VESSEL, according to the terms and conditions hereinafter set forth:

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INDEX

ARTICLE I	DESCRIPTION AND CLASS	4
ARTICLE II	CONTRACT PRICE	7
ARTICLE III	ADJUSTMENT OF THE CONTRACT PRICE	8
ARTICLE IV	INSPECTION AND APPROVAL	13
ARTICLE V	MODIFICATIONS CHANGES AND EXTRAS	19
ARTICLE VI	TRIALS AND COMPLETION	22
ARTICLE VII	DELIVERY	27
ARTICLE VIII	DELAYS AND EXTENSIONS OF TIME (FORCE MAJEURE)	31
ARTICLE IX	WARRANTY OF QUALITY	34
ARTICLE X	PAYMENT	39
ARTICLE XI	BUYER’S DEFAULT	45
ARTICLE XII	BUYER’S SUPPLIES	48
ARTICLE XIII	INSURANCE	50
ARTICLE XIV	DISPUTES AND ARBITRATION	52
ARTICLE XV	SUCCESSORS AND ASSIGNS	54
ARTICLE XVI	TAXES AND DUTIES	56
ARTICLE XVII	PATENTS, TRADEMARKS AND COPYRIGHTS	57
ARTICLE XVIII	INTERPRETATION AND GOVERNING LAW	58
ARTICLE XIX	NOTICES	59
ARTICLE XX	EFFECTIVENESS OF THIS CONTRACT	60
ARTICLE XXI	EXCLUSIVENESS	61
EXHIBIT A	LETTER OF GUARANTEE	63
EXHIBIT B	PERFORMANCE GUARANTEE	66

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ARTICLE I     DESCRIPTION AND CLASS

1. Description

The VESSEL shall have the BUILDER’S Hull No. 0007 and shall be constructed, equipped and completed in accordance with the specifications (Ref. No. KSB-FS-002R0 dated 3^rd December, 2006) and the maker list (Ref. No. KSB-ML-002R0 dated 3^rd Dec., 2006) (hereinafter collectively called the “SPECIFICATIONS”) and the general arrangement plan (Ref. No. KSB-GA-002R0 dated 3^rd Dec., 2006) (hereinafter called the “PLAN”), which shall constitute an integral part of this CONTRACT.

The SPECIFICATIONS and the PLAN are intended to explain each other and anything shown on the PLAN and not stipulated in the SPECIFICATIONS or anything stipulated in the SPECIFICATIONS and not shown on the PLAN shall be deemed and considered as if included in both. Should there be any inconsistencies or contradictions between the SPECIFICATIONS and the PLAN, the SPECIFICATIONS shall prevail. Should there be any inconsistencies or contradictions between this CONTRACT and the SPECIFICATIONS, this CONTRACT shall prevail.

2. Basic Dimensions and Principal Particulars of the VESSEL

The basic dimensions anti principal particulars of the VESSEL shall be

Length, overall	maximum 292.0 M
Length, between perpendiculars	283.0 M
Breadth, moulded	45.0 M
Depth to Upper Deck, moulded	24.7 M
Design draft, moulded, in seawater of specific gravity of 1.025	16.5 M
Scantling draft, moulded, in seawater of specific gravity of 1.025	18.2 M
Deadweight on the above moulded

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design draft of 16.5 M	about 159,000 M/T
Deadweight on the above moulded scantling draft of 18.2 M, guaranteed	179,700 M/T
Main propelling machinery	MAN-B&W 6S70 MC-C (Mark 7)
	MCR : 18,660 KW X 91.0 RPM
	NCR : 16,790 KW X 87.9 RPM
Service speed at 16.5 meters design draft at the condition of clean bottom and in calm and deep sea with main engine developing a NCR of 16,790 KW with fifteen per cent (15 %) sea margin, guaranteed	15.4 Knots
Fuel consumption of the main engine applying I.S.O. reference conditions to the result of official shop test at a NCR of 16,790 KW using marine diesel oil having lower calorific value of 42,700 KJ per Kg, guaranteed	166.7 gr/KW.HR

The details of the above particulars as well as the definitions and method of measurements and calculations are as indicated in the SPECIFICATIONS.

3. Classification, Rules and Regulations

(a) The VESSEL shall be built in compliance with the current rules and regulations of American Bureau of Shipping (hereinafter called the “CLASSIFICATION SOCIETY”), to be classed and registered as +A1(E), +AMS, Bulk Carrier CSR, SafeShip-CM, BC-A (holds 2, 4, 6 and 8 may be empty with maximum cargo density: 3.0t/m³), ESP, +ACCU, TCM, GRAB(20), UWILD, POT and also to comply with the rules, regulations and requirements of the other regulatory bodies described in the SPECIFICATIONS.

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(b) The rules, regulations and requirements of the CLASSIFICATION SOCIETY and the regulatory bodies and the other relevant, regulations and requirement, if any, are to include their current ones that have been issued and are effective as of the date of signing this CONTRACT.

(c) The BUILDER shall arrange with the CLASSIFICATION SOCIETY for the assignment by the CLASSIFICATION SOCIETY of representative(s) to the VESSEL during construction. All fees and charges incidental to classification of the VESSEL in compliance with the above specified rules, regulations and requirements of this CONTRACT shall be for the account of the BUILDER.

(d) The decision of the CLASSIFICATION SOCIETY as to whether the VESSEL complies with the regulations of the CLASSIFICATION SOCIETY shall be final and binding upon the BUILDER and the BUYER.

4. Nationality of the VESSEL

The VESSEL shall be built and completed by the BUILDER for registration in the Marshall Islands and shall be registered by the BUYER at its own cost and expense under the laws of the Marshall Islands with its home port of Majuro at the time of its delivery and acceptance hereunder.

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ARTICLE II     CONTRACT PRICE

The contract price of the VESSEL delivered to the BUYER at the SHIPYARD shall be United States Dollars Seventy Seven Million Seven Hundred Thousand (US $77,700,000) (hereinafter called the “CONTRACT PRICE”) which shall be paid plus any increases or less any decreases due to adjustment or modifications, if any, as set forth in this CONTRACT . The CONTRACT PRICE shall include payment for services in the inspection, tests, survey and classification of the VESSEL which will be rendered by the CLASSIFICATION SOCIETY and shall not include the cost of the BUYER’s SUPPLIES as stipulated in Article XII.

The CONTRACT PRICE also includes all costs and expenses for supplying all necessary drawings as stipulated in the SPECIFICATIONS except those to be furnished by the BUYER for the VESSEL in accordance with the SPECIFICATIONS.

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ARTICLE III     ADJUSTMENT OF THE CONTRACT PRICE

The CONTRACT PRICE of the VESSEL shall be adjusted as hereinafter set forth in the event of the following contingencies. It is hereby understood by both parties that any adjustment of the CONTRACT PRICE as provided for in this Article is by way of liquidated damages and not by way of penalty, the calculation of damage being deemed final.

1. Delayed Delivery

(a) No adjustment shall be made and the CONTRACT PRICE shall remain unchanged for the first thirty (30) days of the delay in delivery of the VESSEL [ending as of 12 o’clock midnight Korean Standard Time on the thirtieth (30th) day of delay] beyond the Delivery Date calculated as provided in Article VII.1. hereof.

(b) If delivery of the VESSEL is delayed more than thirty (30) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT, then, beginning at midnight of the thirtieth (30th) day after such due date, the CONTRACT PRICE of the VESSEL shall be reduced by United States Dollars Twenty Thousand (US $20,000) for each full day of delay.

However, unless the parties agree otherwise, the total amount of deduction from the CONTRACT PRICE shall not exceed the amount due to cover the delay of two hundred and forty (240) days after thirty (30) days of the delay in delivery of the VESSEL at the rate of deduction as specified hereinabove.

(c) But, if the delay in delivery of the VESSEL continues for a period of more than two hundred and seventy (270) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT then, in such event, and after such period has expired, the BUYER may, at its option, cancel this CONTRACT by serving upon the BUILDER a notice of cancellation by telegram, or facsimile to be confirmed by a

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registered letter via airmail directed to the BUILDER at the address given in this CONTRACT. Such cancellation shall be effective as of the date the notice thereof is received by the BUILDER. If the BUYER has not served the notice of cancellation after the aforementioned two hundred and seventy (270) days delay in delivery, the BUILDER may demand the BUYER to make an election in accordance with Article VIII.3. hereof.

(d) For the purpose of this Article, the delivery of the VESSEL shall be deemed to be delayed when and if the VESSEL, after taking into full account extension of the Delivery Date or permissible delays as provided in Article V, VI, VIII, XI, XII or elsewhere in this CONTRACT, is delivered beyond the date upon which delivery would then be due under the terms of this CONTRACT.

2. Insufficient Speed

(a) The CONTRACT PRICE of the VESSEL shall not be affected or changed, if the actual speed, as determined by trial runs more fully described in Article VI hereof, is less than the speed guaranteed under the terms of this CONTRACT and the SPECIFICATIONS provided such deficiency in actual speed is not more than three-tenths (3/10ths) of one (1) knot below the guaranteed speed.

(b) However, as for the deficiency of more than three-tenths (3/10ths) of one (1) knot in actual speed below the speed guaranteed under this CONTRACT, the CONTRACT PRICE shall be reduced as follows [Fractions of less than one-tenth (1/10th) of a knot shall be prorated]:

For the three-tenths (3/10ths) of a knot — a total sum of US $100,000

For the four-tenths (4/10ths) of a knot ——a total sum of US $175,000

For the five-tenths (5/10ths) of a knot —— a total sum of US $390,000

For the six-tenths (6/10ths) of a knot ——– a total sum of US $520,000

For the seven-tenths (7/10ths) of a knot —— a total sum of US $650,000

For the eight-tenths (8/10ths) of a knot —— a total sum of US $780,000

* The above figures are not cumulative.

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However, unless the parties agree otherwise, the total amount of reduction from the CONTRACT PRICE shall not exceed the amount due to cover the deficiency of eight-tenths (8/10ths) of one (1) knot below the guaranteed speed at the rate of reduction as specified above.

(c) If the deficiency in actual speed of the VESSEL is more than eight-tenths (8/10ths) of one (1) knot below the speed guaranteed under this CONTRACT, then the BUYER, at its option, may, subject to the BUILDER’s right to effect alterations or corrections as provided in Article VI 5 . hereof, cancel this CONTRACT or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for eight-tenths (8/10ths) of one (1) knot of deficiency only.

3. Excessive Fuel Consumption

(a) The CONTRACT PRICE shall not be affected or changed by reason of the fuel consumption of the VESSEL’s main engine, as determined by the engine manufacturer’s shop trial as per the SPECIFICATIONS being more than the guaranteed fuel consumption of the VESSEL’s main engine, if such excess is not more than five per cent (5%) over the fuel consumption guaranteed in Article I. 2 hereof.

(b) However, as for the excess of more than five per cent (5%) in the actual fuel consumption over the guaranteed fuel consumption of the VESSEL’s main engine the CONTRACT PRICE shall be reduced by United States Dollars Ninety Thousand (US $90,000), for each full one per cent (1%) increase in fuel consumption in excess of the said five per cent (5%) increase in fuel consumption [fractions of less than one per cent (1%) shall be prorated] . However, unless the parties agree otherwise, the total amount of reduction from the CONTRACT PRICE shall not exceed the amount due to cover the excess of ten per cent (10%) over the guaranteed fuel consumption of the VESSEL’s main engine at the rate of reduction as specified above.

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(c) If such actual fuel consumption exceeds the guaranteed fuel consumption of the VESSEL’s main engine by more than ten per cent (10%), the BUYER, at its option, may, subject to the BUILDER’s right to effect alterations or corrections as specified in Article VI . hereof, cancel this CONTRACT or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for the ten per cent (10%) increase only.

4. Deadweight below Contract Requirements

(a) The CONTRACT PRICE of the VESSEL shall not be affected or changed, if actual deadweight, determined as provided in this CONTRACT and the SPECIFICATIONS, is below the guaranteed deadweight of 179,700 metric tons on the moulded design draft of 18.2 meters required by this CONTRACT and the SPECIFICATIONS by an amount of 2,000 metric tons or less.

(b) However, should the deficiency in the actual deadweight of the VESSEL be in excess of 2,000 metric tons below the said guaranteed deadweight, then the CONTRACT PRICE of the VESSEL shall be reduced for each full one (1) metric ton [fractions of less than one (1) metric ton shall be disregarded] of decreased deadweight in excess of 2,000 metric tons by the sum of United States Dollars Seven Hundred (US $700) per metric ton. However, unless the parties agree otherwise, the total amount of deduction from the CONTRACT PRICE shall not exceed the amount due to cover the deficiency of 4,500 metric tons below the guaranteed deadweight hereinabove.

(c) If the deficiency in the deadweight of the VESSEL is more than 4,500 metric tons below the said guaranteed deadweight, then the BUYER, at its option, may, subject to the BUILDER’s right to effect alterations or corrections without the BUYER’s prior consent as specified in Article VI.5 . hereof, cancel this CONTRACT or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for 4,500 metric tons of deficiency only.

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5. EFFECT OF CANCELLATION

It is expressly understood and agreed by the parties hereto that in any case, if the BUYER cancels this CONTRACT under this Article, the BUYER shall not be entitled to any liquidated damages.

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ARTICLE IV    INSPECTION AND APPROVAL

1. Appointment of BUYER’s Representative

The BUYER shall timely despatch to and maintain at the SHIPYARD, at its own cost, expense and risk, one or more representatives (hereinafter each called the “BUYER’S REPRESENTATIVE”), who shall be duly accredited in writing by the BUYER to supervise adequately the construction by the BUILDER of the VESSEL, her equipment and all accessories. Before the commencement of any item of work under this CONTRACT, the BUILDER shall, whenever reasonably required, previously exhibit, furnish to, and within the limits of the BUYER’S REPRESENTATIVE’s authority, secure the approval from the BUYER’S REPRESENTATIVE of any and all plans and drawings prepared in connection therewith . Upon appointment of the BUYER’S REPRESENTATIVE, the BUYER shall notify the BUILDER in writing of the name and the scope of the authority of the BUYER’S REPRESENTATIVE.

2. Authority of the BUYER’s Representative

Such BUYER’S REPRESENTATIVE shall, at all times during working hours of the construction until delivery of the VESSEL, have the right to inspect the VESSEL, her equipment and all accessories, and work in progress, or materials utilized in connection with the construction of the VESSEL, wherever such work is being done or such materials are stored, for the purpose of determining that the VESSEL, her equipment and accessories are being constructed in accordance with the terms of this CONTRACT and/or the SPECIFICATIONS and the PLAN.

The BUYER’S REPRESENTATIVE shall, within the limits of the authority conferred upon him by the BUYER, make decisions or give advice to the BUILDER on behalf of the BUYER promptly on all problems arising out of, or in connection with, the construction of the VESSEL and generally act in a reasonable manner with a view to cooperating to the utmost with the BUILDER in the construction process of the VESSEL.

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The decision, approval or advice of the BUYER’S REPRESENTATIVE shall be deemed to have been given by the BUYER and once given shall not be withdrawn, revoked or modified except with consent of the BUILDER. Provided that the BUYER’S REPRESENTATIVE or his assistants shall comply with the foregoing obligations, no act or omission of the BUYER’S REPRESENTATIVE or his assistants shall, in any way, diminish the liability of the BUILDER under Article IX (WARRANTY OF QUALITY). The BUYER’S REPRESENTATIVE shall notify the BUILDER promptly in writing of his discovery of any construction or materials, which he believes do not or will not conform to the requirements of the CONTRACT, the SPECIFICATIONS and the PLAN and likewise advise and consult with the BUILDER on all matters pertaining to the construction of the VESSEL, as may be required by the BUILDER, or as he may deem necessary.

However, if the BUYER’S REPRESENTATIVE fails to submit to the BUILDER without delay any such demand concerning alterations or changes with respect to the construction, arrangement or outfit of the VESSEL, which the BUYER’S REPRESENTATIVE has examined, inspected or attended at the test thereof under this CONTRACT or the SPECIFICATIONS and the PLAN, the BUYER’S REPRESENTATIVE shall be deemed to have approved the same and shall be precluded from making any demand for alterations, changes, or complaints with respect thereto at a later date.

The BUILDER shall comply with any such demand which is not contradictory to this CONTRACT, the SPECIFICATIONS or the PLAN, provided that any and all such demands by the BUYER’S REPRESENTATIVE with regard to construction, arrangement and outfit of the VESSEL shall be submitted in writing to the authorized representative of the BUILDER. The BUILDER shall notify the BUYER’S REPRESENTATIVE of the names of the persons who are from time to time authorized by the BUILDER for this purpose .

It is agreed upon between the BUYER and the BUILDER that the modifications, alterations or changer and other measures necessary to comply with such demand may be effected at a convenient time and place at the BUILDER’s reasonable discretion in view of the construction schedule of the VESSEL.

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In the event that the BUYER’S REPRESENTATIVE shall advise the BUILDER that he has discovered or believes the construction or materials do not or will not conform to the requirements of this CONTRACT and the SPECIFICATIONS or the PLAN, and the BUILDER shall not agree with the views of the BUYER’S REPRESENTATIVE in such respect, either the BUYER or the BUILDER may, with the agreement of the other party, seek an opinion of the CLASSIFICATION SOCIETY or failing such agreement, request an arbitration in accordance with the provisions of Article XIV hereof. The Principal Surveyor of the CLASSIFICATION SOCIETY or the arbitration tribunal, as the case may be, shall determine whether or not a nonconformity with the provisions of this CONTRACT, the SPECIFICATIONS and the PLAN exists.

3. Approval of Drawings

(a) The BUILDER shall submit to the BUYER three (3) copies of each of the plans and drawings to be submitted to the BUYER for its approval at its address as set forth in Article XIX hereof. The BUYER shall, within twenty one (21) calendar days after receipt thereof return to the BUILDER one (1) copy of such plans and drawings with the approval or comments, if any, of the BUYER. A list of the plans and drawings to be so submitted to the BUYER shall be mutually agreed upon between the parties hereto.

(b) When and if the BUYER’S REPRESENTATIVE shall have been sent by the BUYER to the SHIPYARD in accordance with Paragraph 1 of this Article, the BUILDER may submit the remainder, if any, of the plans and drawings in the agreed list, to the BUYER’S REPRESENTATIVE for his approval, unless otherwise agreed upon between the parties hereto.

The BUYER’S REPRESENTATIVE shall, within seven (7) days after receipt thereof, return to the BUILDER one (1) copy of such plans and drawings with his approval or comments written thereon, if any. Approval by the BUYER’S REPRESENTATIVE of the plans and drawings duly submitted to him shall be deemed to be the approval by the BUYER for all purposes of this CONTRACT.

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(c) In the event that the BUYER or the BUYER’S REPRESENTATIVE shall fail to return the plans and drawings to the BUILDER within the time limit as hereinabove provided, such plans and drawings shall be deemed to have been automatically approved without any comment. In the event the plans and drawings submitted by the BUILDER to the BUYER or the BUYER’S REPRESENTATIVE in accordance with this Article do not meet with the BUYER’s or the BUYER’S REPRESENTATIVE’s approval, the matter may be submitted by either party hereto for determination pursuant to Article XIV hereof. If the BUYER’s comments on the plans and drawings that are returned to the BUILDER by the BUYER within the said time limit are not clearly specified or detailed, the BUILDER shall be entitled to place its own interpretation on such comments in implementing them.

4. Salaries and Expenses

All salaries and expenses of the BUYER’S REPRESENTATIVE or any other person or persons employed by the BUYER hereunder shall be for the BUYER’s account.

5. Responsibility of the BUILDER

(a) The BUILDER shall provide the BUYER’S REPRESENTATIVE and his assistants free of charge with suitably furnished office space equipped with air conditioning at, or in the vicinity of, the SHIPYARD together with access to telephone and facsimile facilities as may be necessary to enable the BUYER’S REPRESENTATIVE and his assistants to carry out their work under this CONTRACT. However, the BUYER shall pay for the telephone or facsimile facilities used by the BUYER’S REPRESENTATIVE or his assistants.

The BUILDER, its employees, agents and subcontractors, during its working hours until delivery of the VESSEL, shall arrange for them to have free and ready access to the VESSEL, her equipment and accessories, and to any other place (except the areas controlled for the purpose of national security) where work is being done, or materials are being processed or stored in connection with the construction of the VESSEL including the premises of sub-contractors.

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The BUYER’S REPRESENTATIVE or his assistants or employees shall observe the work’s rules and regulations prevailing at the BUILDER’s and its sub-contractor’s premises. The BUILDER shall promptly provide to the BUYER’S REPRESENTATIVE and/or his assistants and shall ensure that its sub-contractors shall promptly provide all such information as he or they may reasonably request in connection with the construction of the VESSEL and her engines, equipment and machinery.

(c) The BUYER’S REPRESENTATIVE and his assistants shall at all times remain the employees of the BUYER. The BUILDER shall not be liable to the BUYER or the BUYER’S REPRESENTATIVE or to his assistants or to the BUYER’s employees or agents for personal injuries, including death, during the time they, or any of them, are on the VESSEL, or within the premises of either the BUILDER or its sub-contractors, or are otherwise engaged in and about the construction of the VESSEL, unless, however, such personal injuries, including death, are caused by the gross negligence of the BUILDER, its sub-contractors, or its or their employees or agents. The BUILDER shall not be liable to the BUYER for damages to, or destruction of property of the BUYER or of the BUYER’S REPRESENTATIVE or his assistants or the BUYER’s employees or agents, unless such damages, loss or destruction is caused by the gross negligence of the BUILDER, its sub-contractors, or its or their employees or agents.

6. RESPONSIBILITY OF THE BUYER

The BUYER shall undertake and assure that the BUYER’S REPRESENTATIVE shall carry out his duties, hereunder in accordance with the normal international shipbuilding practice and in such way so as to avoid any unnecessary increase in building cost, delay in the construction of the VESSEL and/or any disturbance in the construction schedule of the BUILDER.

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The BUILDER has the right to request the BUYER to replace the Representative who is deemed unsuitable and unsatisfactory for the proper progress of the VESSEL’s construction. The BUYER shall investigate the situation by sending its representative(s) to the SHIPYARD if necessary, and if the BUYER consider that such BUILDER’s request is justified, the BUYER shall effect such replacement as soon as conveniently arrangeable.

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ARTICLE V     MODIFICATIONS, CHANGES AND EXTRAS

1. How Effected

Minor modifications or changes to the SPECIFICATIONS and the PLAN under which the VESSEL is to be constructed may be made at any time hereafter by written agreement of the parties hereto. Any modification or change requested by the BUYER which does not affect the frame-work of the SPECIFICATIONS shall be agreed to by the BUILDER if the BUYER agrees to adjustment of the CONTRACT PRICE, deadweight and/or cubic capacity, speed requirements, the DELIVERY DATE and other terms and conditions of this CONTRACT reasonably required as a result of such modification or change. The BUILDER has the right to continue construction of the VESSEL on the basis of the SPECIFICATIONS and the PLAN until the BUYER has agreed to such adjustments. The BUILDER shall be entitled to refuse: to make any alteration, change or modification of the SPECIFICATIONS and/or the PLAN requested by the BUYER, if the BUYER does not agree to the aforesaid adjustments within fourteen (14) days of the BUILDER’s notification of the same to the BUYER, or, if, in the BUILDER’s judgement, the compliance with such request of the BUYER would cause an unreasonable disruption of the normal working schedule of the SHIPYARD.

The BUILDER, however, agrees to exert its efforts to accommodate such reasonable request by the BUYER so that the said change and modification shall be made at a reasonable cost and within the shortest period of time reasonably possible. The aforementioned agreement to modify and change the SPECIFICATIONS and the PLAN may be effected by exchange of letters or facsimiles manifesting the agreement.

The letters and facsimiles exchanged by the parties pursuant to the foregoing shall constitute an amendment to this CONTRACT, the SPECIFICATIONS or the PLAN under which the VESSEL shall be built. Upon consummation of such an agreement to modify and change the SPECIFICATIONS or the PLAN, the BUILDER shall alter the construction of the VESSEL in accordance therewith including any addition to, or deduction from, the work to be performed in connection with such construction.

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2. Substitution of Material

If any materials, machinery of equipment required for the construction of the VESSEL by the SPECIFICATIONS and the PLAN or otherwise under this CONTRACT cannot be procured in time to meet the BUILDER’S construction schedule for the VESSEL, or are in short supply, or are unreasonably high in price compared with the prevailing international market price, the BUILDER may supply, subject to the BUYER’S prior written approval, other materials, machinery or equipment of equal and effect capable of meeting the Rules and Regulations of the CLASSIFICATION SOCIETY and other regulatory bodies. The BUILDER shall not, however, be relieved of its obligations if such non-availability could have been for seen or occasioned by forward planning. In this case, the BUILDER shall not be entitled to an extension of the DELIVERY DATE or to increase in the CONTRACT PRICE by reason of such non-availability.

3. Changes in Rules and Regulations

If the specified rules and regulations with which the construction of the VESSEL is required to comply are altered or changed after the date of this CONTRACT by the CLASSIFICATION SOCIETY or bodies authorized to make such alterations or changes, either the BUYER or the BUILDER, upon receipt of due notice thereof, shall forthwith give notice thereof to the other party in writing. Thereupon, within ten (10) days after giving the notice to the BUILDER or receiving the notice from the BUILDER, the BUYER shall advise the BUILDER as to the alterations and changes, if any, to be made on the VESSEL which the BUYER, in its sole discretion, shall decide. The BUILDER shall not be obliged to comply with such alterations and/or changes if the BUYER fails to notify the BUILDER of its decision within the time limit stated above.

The BUILDER shall comply promptly with the said request of the BUYER, provided that the BUILDER and the BUYER shall first agree to:

(a) any increase or decrease in the CONTRACT PRICE of the VESSEL that is occasioned by such compliance;

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(b) any extension or advancement in the DELIVERY DATE of the VESSEL that is occasioned by such compliance;

(c) any increase or decrease in the deadweight and/or cubic capacity of the VESSEL, if such compliance results in any increase or reduction in the deadweight and/or cubic capacity;

(d) adjustment of the speed requirements if such compliance results in any increase or reduction in the speed; and

(e) any other alterations in the terms of this CONTRACT or of the SPECIFICATIONS and the PLAN or both, if such compliance makes such alterations of the terms necessary.

Any delay in the construction of the VESSEL caused by the BUYER’s delay in making a decision or agreement as above shall constitute a permissible delay under this CONTRACT. Such agreement by the BUYER shall be effected in the same manner as provided above for modification and change of the SPECIFICATIONS and the PLAN.

This paragraph does not refer to alterations or changes of rules and regulations of the CLASSIFICATION SOCIETY which were announced to the BUILDER in writing by the CLASSIFICATION SOCIETY on or before the date of signing of this CONTRACT.

The BUILDER may, at its sole discretion and responsibility, subcontract any part of the construction work of the VESSEL. The BUYER shall be informed by the BUILDER accordingly about the place where the subcontracting work is to be carried out in advance so that supervision can be performed properly.

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ARTICLE VI    TRIALS AND COMPLETION

1. Notice

The BUILDER shall notify the BUYER in writing or by facsimile at least fourteen (14) days in advance of the time and place of the trial run of the VESSEL. Such notice shall specify the place from which the VESSEL will commence her trial run and approximate date upon which the trial run is expected to take place. Such date shall be further confirmed by the BUILDER five (5) days in advance of the trial run by facsimile. The BUYER shall confirm in writing to the BUILDER that the VESSEL is ready for sea trials. In case of dispute between the parties whether the VESSEL is ready for sea trials the decision of the representative of the CLASSIFICATION SOCIETY is binding.

The BUYER’S REPRESENTATIVE, who is to witness the performance of the VESSEL during such trial run, shall be present at such place on the date specified in such notice. Should the BUYER’S REPRESENTATIVE fail to be present after the BUILDER’s due notice to the BUYER as provided above, the BUILDER shall be entitled to conduct such trial run with the presence of the representative(s) of the CLASSIFICATION SOCIETY only without the BUYER’S REPRESENTATIVE being present. In such case, the BUYER shall be obliged to accept the VESSEL on the basis of a certificate issued by the BUILDER that the VESSEL, after the trial run, subject to alterations and corrections, if necessary, has been found to conform with the SPECIFICATIONS and this CONTRACT and is satisfactory in all respects, provided the BUILDER first makes such corrections and alterations promptly.

2. Weather Condition

In the event of unfavorable weather on the date specified for the trial run, the trial run shall take place on the first available day that weather conditions permit. The parties hereto recognize that the weather conditions in Korean waters, in which the trial run is to take place, are such that great changes in weather may arise momentarily and without warning and therefore, it is agreed that if, during the trial

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runs, the weather should become so unfavorable that the trial run cannot be continued, then the trial run shall be discontinued and postponed until the first favorable day next following, unless the BUYER shall assent to the acceptance of the VESSEL by notification in writing on the basis of such trial run so far made prior to such change in weather conditions. Any delay of the trial run caused by such unfavorable weather conditions shall also operate to extend the DELIVERY DATE of the VESSEL for the period of delay occasioned by such unfavorable weather conditions.

3. How Conducted

All expenses in connection with the trials of the VESSEL are to be for the account of the BUILDER, which, during the trials, is to provide at its own expense the necessary crew to comply with conditions of safe navigation. The trials shall be conducted in the manner prescribed in this CONTRACT and the SPECIFICATIONS, and shall prove fulfilment of the performance requirements for the trials as set forth in the SPECIFICATIONS.

The BUILDER shall be entitled to conduct preliminary sea trials, during which the propulsion plant and/or its appurtenance shall be adjusted according to the BUILDER’s judgement. The BUILDER shall have the right to repeat any trial whatsoever as it deems necessary. Furthermore the BUYER’s REPRESENTATIVE is entitled to participate in any preliminary sea trials conducted by the BUILDER.

4. Consumable Stores

The BUILDER shall load the VESSEL with the required quantity of fuel oil, lubricating oil and greases, fresh water, and other stores necessary to conduct the trials as set forth in the SPECIFICATIONS. The necessary ballast (fuel oil, fresh water and such other ballast as may be required) to bring the VESSEL to the trial load draft, as specified in the SPECIFICATIONS, shall be supplied and paid for by the BUILDER whilst lubricating oil and greases shall be supplied and paid for by the BUYER within the time advised by the BUILDER for the conduct of sea trials as well as for use before the delivery of the VESSEL to the BUYER. The fuel oil as well as lubricating oil and greases shall be in accordance with the

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engine specifications and the BUYER shall decide and advise the BUILDER of the supplier’s name for lubricating oil and greases before the work-commencement of the VESSEL, provided that the supplier shall be acceptable to the BUYER and/or the makers of all the machinery.

Any fuel oil, fresh water or other consumable stores furnished and paid for by the BUILDER for trial runs remaining on board the VESSEL, at the time of acceptance of the VESSEL by the BUYER, shall be bought by the BUYER from the BUILDER at the BUILDER’s purchase price for such supply in Korea and payment by the BUYER thereof shall be made at the time of delivery of the VESSEL. The BUILDER shall pay the BUYER at the time of delivery of the VESSEL for the consumed quantity of any lubricating oil and greases which were furnished and paid for by the BUYER at the BUYER’s purchase price thereof. The consumed quantity of lubricating oils and greases shall be calculated on the basis of the difference between the remaining amount, including the same remaining in the main engine, other machinery and their pipes, stern tube and the like, and the supplied amount.

5. Acceptance or Rejection

(a) If, during any sea trial, any breakdown occurs entailing interruption or irregular performance which can be repaired on board, the trial shall be continued after such repairs and be valid in all respects.

(b) However, if, during or after the trial run, it becomes apparent that the VESSEL or any part of her equipment requires alterations or corrections which but for this provision would or might entitle the BUYER to cancel this CONTRACT, the BUILDER shall notify the BUYER promptly in writing or by facsimile to such effect and shall simultaneously advise the BUYER of the estimated additional time required for the necessary alterations or corrections to be made.

The BUYER shall, within two (2) days of receipt from the BUILDER of notice of completion of such alterations or corrections and after such further trials or tests as necessary, notify the BUILDER in writing or by

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facsimile confirmed in writing of its acceptance, qualified acceptance or rejection of the VESSEL, all in accordance with the SPECIFICATIONS and the PLAN and this CONTRACT, and shall not be entitled to reject the VESSEL on such grounds until such time.

(c) Save as above provided, the BUYER shall, within two (2) days after completion of the trial run, notify the BUILDER in writing or by facsimile confirmed in writing of its acceptance of the VESSEL or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS and the PLAN or this CONTRACT.

If the BUILDER is in agreement with the BUYER’s determinations as to non-conformity, the BUILDER shall make such alterations or changes as may be necessary to correct such non-conformity and shall prove the fulfilment of this CONTRACT and the SPECIFICATIONS by such tests or trials as may be necessary.

The BUYER shall, within two (2) days after completion of such tests and/or trials, notify the BUILDER in writing or by facsimile confirmed in writing of its acceptance or rejection of the VESSEL.

(d) However, the BUYER shall not be entitled to reject the VESSEL by reason of any minor or insubstantial items judged from the point of view of standard shipbuilding and shipping practice as not being in conformity with the SPECIFICATIONS, but, in that case, the BUILDER shall not be released from the obligation to correct and/or remedy such minor or insubstantial items as soon as practicable after the delivery of the VESSEL.

6. Effect of Acceptance

The BUYER’s written, or facsimile notification of acceptance delivered to the BUILDER as above provided, shall be final and binding insofar as conformity of the VESSEL to this Contract and the SPECIFICATIONS is concerned and shall preclude the BUYER from refusing formal delivery of the VESSEL as hereinafter

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provided, if the BUILDER complies with all conditions of delivery, as herein set forth and provided that, in the case of qualified acceptance, any matters which were mentioned in the notice of the qualified acceptance by the BUYER as requiring correction have been corrected satisfactorily.

If the BUYER fails to notify the BUILDER of its acceptance or rejection of the VESSEL as hereinabove provided, the BUYER shall be deemed to have accepted the VESSEL. Nothing contained in this Article shall preclude the BUILDER from exercising any and all rights which the BUILDER has under this CONTRACT if the BUILDER disagrees with the BUYER’s rejection of the VESSEL or any reasons given for such rejection, including arbitration provided in Article XIV hereof.

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ARTICLE VII    DELIVERY

1. Time and Place

The VESSEL shall be delivered by the BUILDER to the BUYER at the SHIPYARD, safely afloat on 5^th August, 2010 (hereinafter called the “DELIVERY DATE”) after completion of satisfactory trials and acceptance by the BUYER in accordance with the terms of Article VI, except that, in the event of delays in delivery of the VESSEL by the BUILDER due to causes which under the terms of this CONTRACT permit extensions of the time for delivery of the VESSEL, the aforementioned DELIVERY DATE shall be extended accordingly. The BUILDER shall have the right to deliver the VESSEL earlier than the DELIVERY DATE, but not earlier than the day falling 60 days prior to the DELIVERY DATE and provided always that the BUILDER shall have completed the VESSEL in accordance with the terms of this CONTRACT and the SPECIFICATIONS and PLAN and after completion of satisfactory trials and acceptance by the BUYER in accordance with the terms of Article VI hereof.

2. When and how Effected

Provided that the BUYER shall concurrently with delivery of the VESSEL release to the BUILDER the DELIVERY INSTALMENT as set forth in Article X.2. hereof and shall have fulfilled all of its obligations provided for in this CONTRACT, delivery of the VESSEL shall be forthwith effected upon acceptance thereof by the BUYER, as hereinabove provided, by the concurrent delivery by each of the parties hereto to the other of a PROTOCOL OF DELIVERY AND ACCEPTANCE acknowledging delivery of the VESSEL by the BUILDER and acceptance thereof by the BUYER, which PROTOCOL OF DELIVERY AND ACCEPTANCE shall be prepared in duplicate and signed by each of the parties hereto.

3. Documents to be Delivered to the BUYER

Upon delivery and acceptance of the VESSEL, the BUILDER shall deliver to the BUYER the following documents, which shall accompany the aforementioned PROTOCOL OF DELIVERY AND ACCEPTANCE:

(a) PROTOCOL OF TRIALS of the VESSEL made pursuant to this CONTRACT and the SPECIFICATIONS,

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(b) PROTOCOL OF INVENTORY of the equipment of the VESSEL, including spare parts, all as specified in the SPECIFICATIONS,

(c) PROTOCOL OF STORES OF CONSUMABLE NATURE, such as all fuel oil and fresh water remaining in tanks if its cost is charged to the BUYER under Article VI.4. hereof,

(d) DRAWINGS AND PLANS pertaining to the VESSEL as stipulated in the SPECIFICATIONS, which shall be furnished to the BUYER at no additional cost,

(e) ALL CERTIFICATES required to be furnished upon delivery of the VESSEL pursuant to this CONTRACT, the SPECIFICATIONS and the customary shipbuilding practice, including

(i) Classification Certificate

(ii) Safety Construction Certificate

(iii) Safety Equipment Certificate

(iv) Safety Radiotelegraphy Certificate

(v) International Loadline Certificate

(vi) International Tonnage Certificate

(vii) Suez Canal Tonnage Certificate

(viii) De-ratting Exemption Certificate

(ix) I.O.P.P. Certificate

(x) BUILDER’s Certificate

(xi) Deadweight Certificate (issued by the BUILDER)

However, it is agreed by the parties that if the Classification Certificate and/or other certificates are not available at the time of delivery of the VESSEL, provisional certificates shall be accepted by the BUYER, provided that the BUILDER shall furnish the BUYER with formal certificates as promptly as possible after such formal certificates have been issued.

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(f) DECLARATION OF WARRANTY of the BUILDER that the VESSEL is delivered to the BUYER free and clear of any liens, claims, mortgages, or other encumbrances upon the BUYER’s title thereto, and in particular, that the VESSEL is absolutely free of all burdens in the nature of imposts, taxes, or charges imposed by the Korean governmental authorities as well as of all liabilities of the BUILDER to its sub-contractors and employees and of all liabilities arising from the operation of the VESSEL in trial runs, or otherwise, prior to delivery except as otherwise provided under this CONTRACT.

(g) BILL OF SALE by the BUILDER to the BUYER transferring title to the VESSEL from the BUILDER to the BUYER, such Bill of Sale to be duly notarised and apostilled.

(h) Power of Attorney of the BUILDER authorising the execution of all documents listed in the Article VII, such Power of Attorney to be duly notarised and apostilled.

4. Tender of the VESSEL

If the BUYER fails to take delivery of the VESSEL after completion thereof according to this CONTRACT and the SPECIFICATIONS, the BUILDER shall have the right to tender delivery of the VESSEL after compliance with all procedural requirements as provided above.

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5. Title and Risk

Title and risk shall pass to the BUYER upon delivery of the VESSEL being effected as stated above and the BUILDER shall be free of all responsibility or liability whatsoever related with this CONTRACT except for the warranty of quality contained in Article IX and the obligation to correct and/or remedy, as provided in Article VI.5.(d), if any, it being expressly understood that, until such delivery is effected, the VESSEL and equipment thereof are at the entire risk of the BUILDER including but not confined to, risks of war, insurrection and seizure by Governments or Authorities, whether Korean or foreign, and whether at war or at peace . The title to the BUYER’S SUPPLIES as provided in Article XII shall remain with the BUYER and the BUILDER’s responsibility for such BUYER’S SUPPLIES shall be as described in Article XII.

6. Removal of the VESSEL

The BUYER shall take possession of the VESSEL immediately upon delivery thereof and shall remove the VESSEL from the SHIPYARD within three (3) days after delivery thereof is affected. If the BUYER shall not remove the VESSEL from the SHIPYARD within the foresaid three (3) days, the BUYER shall pay to the BUILDER the reasonable mooring charges of the VESSEL.

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ARTICLE VIII    DELAYS AND EXTENSIONS OF TIME (FORCE MAJEURE)

1. Causes of Delay

If, at any time after signing this CONTRACT, either the construction or delivery of the VESSEL or any performance required hereunder as a prerequisite to the delivery thereof is delayed by any of the following events: namely war, acts of state or government, blockade, revolution, insurrections, mobilization, civil commotion, riots, strikes, sabotage, lockouts, or other labour disturbances, Acts of God or the public enemy, plague or other epidemics, quarantines, shortage or prolonged failure of electric current, freight embargoes, or defects in major forgings or castings, or delays or defects in the BUYER’S SUPPLIES as stipulated in Article XII, if any, or shortage of materials, machinery or equipment or inability to obtain delivery or delays in delivery of materials, machinery or equipment, provided that at the time of ordering the same could reasonably be expected by the BUILDER to be delivered in time or defects in materials, machinery or equipment which could not have been detected by the BUILDER using seasonable care or earthquakes, tidal waves, typhoons, hurricanes, prolonged or unusually severe weather conditions or destruction of the premises or works of the BUILDER or its sub-contractors, or of the VESSEL, or any part thereof, by fire, landslides, flood, lightning, explosion, or delays in the BUILDER’s other commitments resulting from any such causes as described in this Article which in turn delay the construction of the VESSEL or the BUILDER’s performance under the CONTRACT, or delays caused by the CLASSIFICATION SOCIETY or the BUYER’s faulty action or omission, or other causes beyond the control of the BUILDER, its sub-contractors or suppliers as the case may be, or for any other causes which, under the terms of this CONTRACT, authorize and permit extension of the time for delivery of the VESSEL, then, in the event of delays due to the happening of any of the aforementioned contingencies, the DELIVERY DATE of the VESSEL under this CONTRACT shall be extended for a period of time, which shall not exceed the total accumulated time of all such delays. The BUILDER shall reasonably demonstrate that the cause of delay was not occasioned by the fault of the BUILDER and the BUILDER shall take all reasonable steps to mitigate its effect upon the construction of the VESSEL.

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2. Notice of Delays

Within ten (10) days after the date on which the BUILDER becomes aware of the occurrence of the cause of delay on account of which the BUILDER claims that it is entitled under this CONTRACT to an extension of the DELIVERY DATE of the VESSEL, excluding delays due to arbitration, the BUILDER shall advise the BUYER in writing or by facsimile of the date on which such cause of delay commenced, the reasons thereof and, if possible, its estimated duration of the probable delay in the delivery of the VESSEL, and shall supply the BUYER, if reasonably available, evidence to justify the delay claimed . Within one (1) week after such cause of delay ends, the BUILDER shall likewise advise the BUYER in writing or by facsimile of the date on which such cause of delay ended, and also shall specify the period of time by which the BUILDER claims the DELIVERY DATE should be extended by reason of such delay. Failure of the BUYER to object to the BUILDER’s notification of any claim for extension of the DELIVERY DATE of the VESSEL within one (1) week after receipt by the BUYER of such notification shall be deemed to be a waiver by the BUYER of its right to object to such extension.

3. Right to Cancel for Excessive Delay

If the total accumulated time of all permissible and non-permissible delays, excluding delays due to (i) arbitration under Article XIV, (ii) the BUYER’s defaults under Article XI, (iii) modifications and changes under Article V or (iv) delays or defects in the BUYER’S SUPPLIES as stipulated in Article XII, aggregates three hundred and sixty five (365) days or more, then, the BUYER may, at any time thereafter, cancel this CONTRACT by giving a written notice of cancellation to the BUILDER. Such cancellation shall be effective as of the date the notice thereof is received by the BUILDER.

If the BUYER has not served the notice of cancellation as provided in the above or Article III.1. hereof, the BUILDER may, at any time after expiration of the accumulated time of the delay in delivery, either three hundred and sixty five (365) days in case of the delay in this Paragraph or two hundred and seventy (270) days in case of the delay in Article III.1, notify the BUYER of the future date upon which the BUILDER estimates the VESSEL will be ready for delivery and

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demand in writing or by facsimile that the BUYER make an election either to cancel this CONTRACT or to consent to the delivery of the VESSEL at such future date, in which case the BUYER shall, within seven (7) days after receipt of such demand, make and notify the BUILDER of such election. If the BUYER elects to consent to the delivery of the VESSEL at such future date (or other future date as the parties may agree):

(a) Such future date shall become the contractual delivery date for the purposes of this CONTRACT and shall be subject to extension by reason of permissible delays as herein provided, and

(b) If the VESSEL is not delivered by such revised contractual delivery date (as extended by reason of permissible delays), the BUYER shall have the same right of cancellation upon the same terms as provided in the above and Article III.1.

If the BUYER shall not make an election within seven (7) days as provided hereinabove, the BUYER shall be deemed to have accepted such extension of the DELIVERY DATE to the future delivery date indicated by the BUILDER.

4. Definition of Permissible Delays

Delays on account of the foregoing causes shall be understood to be permissible delays, and are to be distinguished from non-permissible unauthorized delays on account of which the CONTRACT PRICE of the VESSEL is subject to adjustment as provided in Article III hereof.

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ARTICLE IX    WARRANTY OF QUALITY

1. Guarantee of Material and Workmanship

The BUILDER, for the period of twelve (12) months from the date of delivery of the VESSEL to the BUYER, guarantees the VESSEL and all parts and equipment thereof that are manufactured or furnished by the BUILDER under this CONTRACT against all defects which are directly due to defective materials, construction miscalculation and/or poor workmanship, provided such defects have not been caused by perils of the sea, rivers or navigation, or by normal wear and tear, overloading, improper loading or stowage, fire, accident, incompetence, mismanagement, negligence or wilful neglect or by alteration or addition by the BUYER not previously approved by the BUILDER.

The BUILDER will be responsible for all machinery or parts of machinery and all constructions which are supplied by sub-contractors and will guarantee the above mentioned for a period of twelve (12) months on the basis as laid down in this Paragraph.

2. Notice of Defects

The BUYER or its duly authorized representative will notify the BUILDER in writing or by facsimile promptly after discovery of any defect for which a claim is to be made under this guarantee.

The BUYER’s written notice shall include full particulars as to the nature of the defect and the extent of the damage caused thereby, but excluding consequential damage as hereinafter provided. The BUILDER will be under no obligation with respect to this guarantee in respect of any claim for defects discovered prior to the expiry date of the guarantee, unless notice of such defects is received by the BUILDER before the expiry date. However, facsimile advice received by the BUILDER within three (3) days after such expiry date that a claim is forthcoming will be sufficient compliance with the requirement as to time, provided that such facsimile advice shall include at least a brief description of the

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defect including the identity of the equipment, extent of damage, name and number of any replacement part and description of any remedial work required, and that full particulars are given to the BUILDER not later than seven (7) days after the expiry date.

3. Remedy of Defects

(a) The BUILDER shall remedy, at its expense, any defects, against which the VESSEL is guaranteed under this Article, by making all necessary and reasonably practicable repairs or replacements at the SHIPYARD or elsewhere as provided for in (b) herein below.

In any cases, removal of the VESSEL to the location at which the repair or replacements are to be effected, shall be at the BUYER’s risk and expenses.

(b) If it is impractical (which shall include, but not be limited to, an emergency) to bring the VESSEL to the SHIPYARD, the BUYER may cause the necessary repairs or replacements to be made elsewhere which is deemed by the BUYER with the consent of the BUILDER which shall not be unreasonably withheld, to be suitable for the purpose, provided that, in such event, the BUILDER may forward or supply replacement parts or materials to the VESSEL, unless forwarding or supplying thereof to the VESSEL would impair or delay the operation or working schedule of the VESSEL. In the event that the BUYER proposes to cause the necessary repairs or replacements to be made to the VESSEL at any shipyard or works other than the SHIPYARD, the BUYER shall first (but in all events as soon as reasonably possible) give the BUILDER notice in writing or by facsimile of the time and place such repairs will be made, and if the VESSEL is not thereby delayed, or her operation or working schedule is not thereby impaired, the BUILDER shall have the right to verify by its own representative(s) the nature and extent of the defects complained of. The BUILDER shall, in such case, promptly advise the BUYER by facsimile, after such examination has been completed, of its acceptance or rejection of the defects as ones that are covered by the guarantee herein provided. Upon the BUILDER’s acceptance of the defects as justifying remedy under

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this Article, or upon award of the arbitration so determining, the BUILDER shall compensate the BUYER for an amount equal to the reasonable cost of making the same repairs or replacements at the SHIPYARD. The BUILDER shall compensate the BUYER for the documented expenses incurred by the BUYER, but not to exceed one hundred and twenty percent (120%) of the cost of making such repair or replacement at the SHIPYARD, subject to the cost of making such repair or replacement in the SHIPYARD is being equal to the cost of the same repair and replacement in a major shipyard in Singapore.

(c) In the event that it is necessary for the BUILDER to forward a replacement of a defective part under this guarantee, replacement parts shall be supplied to the BUYER by airfreight (if air transport is feasible and necessary to assure the VESSEL’s undisturbed operation) on a freight prepaid basis to the port designated by the BUYER.

(d) The BUILDER reserves the option to retrieve, at the BUILDER’s cost, any of the replaced equipment/parts in case defects are remedied in accordance with the provisions in this Article.

(d) Any dispute under this Article shall be referred to arbitration in accordance with the provisions of Article XIV hereof.

4. Extent of BUILDER’s Liability

(a) After delivery of the VESSEL the responsibility of the BUILDER in respect of or in connection with the VESSEL or this CONTRACT shall be limited to the extent expressly provided in the Paragraph 4 of this Article. Except as expressly provided in this Paragraph, in no circumstances and on no ground whatsoever shall the BUILDER have any responsibility or liability whatsoever or howsoever arising in respect of or in connection with the VESSEL or this CONTRACT after the delivery of the VESSEL. Further, but without in any way limiting the generality of the foregoing, the BUILDER shall have no liability or responsibility whatsoever or howsoever arising for or in connection with any consequential or special losses, damages or expenses, any liability to any third party or any fine,

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compensation, penalty or other payment or sanction incurred by or imposed upon the BUYER or any other party whatsoever in relation to or in connection with this CONTRACT or the VESSEL.

(b) The BUILDER shall be under no obligation with respect to defects discovered after the expiration of the period of guarantee specified above, nor in any event shall the BUILDER be liable for any worsening of defects after the expiry date of the guarantee (notwithstanding Paragraph 3 of this Article).

(c) The BUILDER shall under no circumstances be liable for defects in the VESSEL or any part of equipment thereof caused by perils of the sea, rivers or navigation, or normal wear and tear, or fire or accidents at sea or elsewhere or by mismanagement, accident, negligence, wilful neglect, alteration or addition on the part of the BUYER, its employees or agents on or doing work on the VESSEL, including the VESSEL’s officers, crew and passengers. Likewise, the BUILDER shall not be liable for defects in the VESSEL or any part of equipment thereof that are due to repairs which were made by other than the BUILDER at the discretion of the BUYER as hereinabove provided.

(d) The liability of the BUILDER provided for in this Article shall be limited to defects directly caused by defective materials, construction miscalculation and/or poor workmanship as above provided. The BUILDER shall not be obliged to repair, not be liable for, damage to the VESSEL or any part of the equipment thereof, which after delivery of the VESSEL, is caused other than by the defects of the nature specified above. The guarantees contained as hereinabove in this Article replace and exclude any other liability, guarantee, warranty and/or condition imposed or implied by statute, common law, custom or otherwise on the part of the BUILDER by reason of the construction and sale of the VESSEL for and to the BUYER.

5. Guarantee Engineer

The BUILDER may at the request of the BUYER appoint a guarantee engineer to serve on the VESSEL as its representative for a period of three (3) months from

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the date the VESSEL is delivered. However, if the BUYER and the BUILDER shall deem it necessary to keep the guarantee engineer on the VESSEL for a longer period, then he shall remain on board the VESSEL after the said three (3) months, but no longer than twelve (12) months from the delivery of the VESSEL.

The BUYER and its employees shall give such guarantee engineer full cooperation in carrying out his duties as the representative of the BUILDER on board the VESSEL.

The BUYER shall accord the guarantee engineer treatment comparable to the VESSEL’s chief engineer and shall provide board and lodging at no cost to the BUILDER or the guarantee engineer. While the guarantee engineer is on board the VESSEL, the BUYER shall pay to the BUILDER a sum of United States Dollars Three Thousand Five Hundred (US$3,500.-) per month, the expenses of his repatriation to Mokpo, Korea by air upon termination of his service, the expenses of his communication with the BUILDER incurred in performing his duties and expenses, if any, of his medical and hospital care in the VESSEL’s hospital. The BUILDER and the BUYER shall, prior to delivery of the VESSEL, execute a separate agreement regarding the guarantee engineer.

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ARTICLE X    PAYMENT

1. Currency

All payments under this CONTRACT shall be made in United States Dollars.

2. Terms of Payment

The payments of the CONTRACT PRICE shall be made after CONTRACT EFFECTIVENESS as follows:

(a) First Instalment

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) shall be paid within three (3) business days after receipt by the BUYER of the original of the refund guarantee referred to Paragraph 7 of this Article.

(b) Second Instalment

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) shall be paid within three (3) business days after the later of (i) receipt by the BUYER of the BUILDER’s notice with confirmation by the CLASSIFICATION SOCIETY that the steel cutting has been carried out and (ii) 5^th August, 2009,

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(c) Third Instalment

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) shall be paid within three (3) business days after receipt by the BUYER of the BUILDER’s notice with confirmation by the CLASSIFICATION SOCIETY that the keel laying has been carried out.

(d) Fourth Instalment

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) shall be paid within three (3) business days after receipt by the BUYER of the BUILDER’s notice with confirmation by the CLASSIFICATION SOCIETY that the launching has been carried out.

(e) Fifth Instalment (DELIVERY INSTALMENT)

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) plus or minus any increase or decrease due to modifications and/or adjustments, if any, arising prior to delivery of the VESSEL of the CONTRACT PRICE under Articles III and V of this CONTRACT shall be paid to the BUILDER concurrently with the delivery of the VESSEL. (The date stipulated for payment of first, second, third and fourth instalment mentioned above is hereinafter in this Article and in Article XI referred to as the “DUE DATE” of that instalment).

Under this CONTRACT’, in counting the business days, only Saturdays and Sundays are excepted. When a due date falls on a day when banks are not open for business in Greece, Korea or USA such due date shall fall due upon the first business day next following.

It is understood and agreed upon by the BUILDER and the BUYER that all payments under the provisions of this Article shall not be delayed or withheld by the BUYER due to any dispute or disagreement of whatsoever nature arising between the BUILDER and the BUYER, provided however that no payment shall

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be made by the BUYER under this CONTRACT if the refund guarantee to be issued pursuant to paragraph 7 of this Article X has not been issued. If the refund guarantee is withdrawn or in any way ceases to be valid at any time during the course of this CONTRACT on or before the delivery of the VESSEL, then the BUYER may terminate this CONTRACT by notice to the BUILDER in writing or by telefax confirmed in writing in accordance with the provisions of paragraph 5 of this Article X. Should there be any dispute in this connection, the matter shall be dealt with in accordance with the provisions of arbitration in Article XIV hereof.

3. DEMAND FOR PAYMENT

At least fourteen (14) days prior to the date of each event provided in Paragraph 2 of this Article on which any payment shall fall due hereunder, with the exception of the payment of the first instalment, the BUILDER shall notify the BUYER by facsimile of the date such payment becomes due.

The BUYER shall immediately acknowledge receipt of such notification by facsimile to the BUILDER, and make payment as set forth in this Article. If the BUILDER fails to receive the BUYER’s said acknowledgement within three (3) days after sending the aforementioned notification, the BUILDER shall promptly facsimile to the BUYER a second notification of similar import. The BUYER shall immediately acknowledge by facsimile receipt of the foregoing second notification regardless of whether or not the first notification was acknowledged as aforesaid.

4. Method of Payment

(a) All the pre-delivery payments and the payment due on delivery in settlement of the CONTRACT PRICE as provided for in Paragraph 2 of this Article shall be made to the BUILDER’s Bank specified (c) herein below at the BUYER’s cost and expense on or before the DUE DATE thereof by telegraphic transfer under telefax advice to the BUILDER.

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(b) The DELIVERY INSTALMENT as provided in paragraph 2.(e) of this Article shall be deposited with the BUILDER’s Bank by telegraphic transfer at least three (3) business days prior to scheduled delivery date of the VESSEL notified by the BUILDER with instruction that the said instalment is payable to the BUILDER against presentation by the BUILDER to the BUILDER’s Bank of duplicate original copy of the PROTOCOL OF DELIVERY AND ACCEPTANCE of the VESSEL signed by the BUILDER and the BUYER.

(c) Reference to the BUILDER’s Bank

- . Name	: Industrial Bank of Korea
- . Address	: 50, Ulchiro 2-Ga, Chungu, Seoul, Korea
- . Account No.	: 191-002348-56-00016
- . Telex Number	: K239384
- . Telefax Number	: 82-2-729-7204
- . Swift Code	: IBKOKRSE
- . Beneficiary	: Korea Shipyard Co., Ltd.
- . Through Bank	: Deutsche Bank Trust Company Americas,              New York
	ABA Number    : 021001033
	Swift Code         : BKTRUS33
	Customer            : Industrial Bank of Korea

(d) Simultaneously with each of the payments, the BUYER shall advise the BUILDER of the details of the payment by facsimile and at the same time, the BUYER shall cause the BUYER’s remitting bank to advise the BUILDER’s bank of the details of such payments by authenticated bank cable or telex.

5. Refund by the BUILDER

The payments made by the BUYER to the BUILDER prior to delivery of the VESSEL shall constitutes advances to the BUILDER. If the VESSEL is rejected by the BUYER in accordance with the terms of this CONTRACT, or except in the case of rescission or cancellation of this CONTRACT by the BUILDER under the

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provisions of Article XI hereof, if the BUYER terminates, cancels or rescinds this CONTRACT pursuant to any of the provisions of this CONTRACT specifically permitting the BUYER to do so, the BUILDER shall forthwith refund to the BUYER, in United States Dollars, the full amount of total sums paid by the BUYER to the BUILDER in advance of delivery together with interest thereon as herein provided.

The transfer and other bank charges of such refund shall be for the BUILDER’s account. The interest rate of the refund, as above provided, shall be five per cent (5.0%) per annum from the date following the date of receipt by the BUILDER of the pre-delivery instalment(s) to the date of remittance by telegraphic transfer of such refund.

It is hereby understood by both parties that payment of any interest provided herein is by way of liquidated damages due to cancellation of this CONTRACT and not by way of compensation for use of money.

If the BUILDER is required to refund to the BUYER the instalments paid by the BUYER to the BUILDER as provided in this Paragraph, the BUILDER shall return to the BUYER all of the BUYER’S SUPPLIES as stipulated in Article XII which were not incorporated into the VESSEL and pay to the BUYER an amount equal to the cost to the BUYER of these supplies incorporated into the VESSEL.

6. Discharge of Obligations

Such refund as provided in the foregoing Paragraphs 4 and 5 by the BUILDER to the BUYER shall forthwith discharge all the obligations, duties and liabilities of each of the parties hereto to the other except the claims of the BUILDER against the BUYER, if any, under this CONTRACT. Any and all refunds or payments due to the BUYER under this CONTRACT shall be effected by telegraphic transfer to the account specified by the BUYER.

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7. Refund Guarantee

As security for refund of the instalments of the CONTRACT PRICE payable prior to delivery of the VESSEL, the BUILDER shall furnish the BUYER at least three (3) business days prior to the payment of the first instalment with a letter of guarantee of a Korean bank acceptable to the BUYER, covering the amount of the predelivery instalment(s) plus interest in favour of the BUYER. Such letter of guarantee shall have substantially the same form and substance as Exhibit A annexed hereto.

The transfer and other bank charges of such refund shall be for the BUILDER’s account. The interest rate of the refund, as above provided shall be five per cent (5.0%) per annum from the date following the date of receipt by the BUILDER of the pre-delivery instalment(s) to the date of remittance by telegraphic transfer of such refund.

If the BUILDER is required to refund to the BUYER the instalment(s) paid by the BUYER to the BUILDER as provided in this Paragraph, the BUILDER shall return to the BUYER all of the BUYER’s SUPPLIES as stipulated in Article XII which were not incorporated into the VESSEL and pay to the BUYER an amount equal to the cost to the BUYER of those supplies incorporated into the VESSEL.

8. Performance Guarantee

As security for the correct fulfilment and performance of this CONTRACT by the BUYER and following nomination by QML of the NOMINEE under Article XV hereof, QML shall concurrently with such nomination being made by QML, furnish the BUILDER with a Letter of Guarantee issued by QML in such form and with such terms and conditions as mentioned in EXHIBIT “B” as annexed hereto.

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ARTICLE XI    BUYER’S DEFAULT

1. Definition of Default

The BUYER shall be deemed to be in default under this CONTRACT in the following cases:

(a) If any of the first, second, third and fourth instalment is not paid to the BUILDER within respective DUE DATE of such instalments; or

(b) If the DELIVERY INSTALMENT is not deposited at the account of the BUILDER with the BUILDER’s Bank in accordance with Article X 4. (b) hereof or if the said DELIVERY INSTALMENT deposit is not (for reasons not attributable to the BUILDER) released to the BUILDER against presentation by the BUILDER of a duplicate original copy of the PROTOCOL OF DELIVERY AND ACCEPTANCE; or

(c) If the BUYER fails to take delivery of the VESSEL when the VESSEL is duly tendered for delivery by the BUILDER under the provisions of Article VII hereof; or

(d) If an order or an effective resolution shall be passed for winding up of the BUYER (except for the purpose of reorganization, merger or amalgamation); or

(e) If the BUYER fails to be in punctual, due and full compliance with any of its obligations under this CONTRACT.

In case the BUYER is in default of any of its obligations under this CONTRACT, the BUILDER is entitled to and shall have the following rights, powers and remedies in addition to such other rights, powers and remedies as the BUILDER may have elsewhere in this CONTRACT and/or at law, at equity or otherwise.

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2. Effect of the BUYER’s Default on or before the Delivery of the VESSEL

If the BUYER shall be in default as provided in Paragraph 1 above of its obligations under this CONTRACT, then:

(a) The DELIVERY DATE of the VESSEL shall be extended automatically for the actual period of continuence of such default and the BUILDER shall not be obliged to pay any liquidated damages for the delay in delivery of the VESSEL caused thereby.

(b) The BUYER shall pay to the BUILDER interest at the rate five per cent (5.0%) per annum in respect of the instalment(s) in default from the respective DUE GATE to the date of actual receipt by the BUILDER of the full amount of such instalment(s).

(c) If the BUYER is in default in payment of any of the instalment(s) due and payable prior to or simultaneously with the delivery of the VESSEL, the BUILDER shall, in writing or by facsimile, notify the BUYER to that effect, and the BUYER shall, upon receipt of such notification, forthwith acknowledge in writing or by facsimile to the BUILDER that such notification has been received.

(d) If any of the BUYER’s default continues for a period of fifteen (15) business days after the BUILDER’s notification to the BUYER of such default, the BUILDER may, at its option, rescind this CONTRACT by serving upon the BUYER a written notice or a facsimile notice of rescission confirmed in writing.

(e) In the event of such cancellation by the BUILDER of this CONTRACT due to the BUYER’s default as provided for in paragraph 1 above, the BUILDER shall be entitled to retain and apply the instalments already paid by the BUYER to the recovery of the BUILDER’s loss and damage due to the BUYER’s default and the cancellation of this CONTRACT and at the same time the BUILDER shall have the full right and power either to complete or not to complete the VESSEL which is the sole property of the BUILDER as it deems fit, and to sell the VESSEL at a public or private sale on such terms and conditions as the BUILDER thinks fit without being answerable for any loss or damage.

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The proceeds received by the BUILDER from the sale shall be applied in addition to the instalment(s) retained by the BUILDER as mentioned hereinabove as follows:

First, in payment of all reasonable costs and expenses of the sale of the VESSEL, including interest thereon at five per cent (5.0%) per annum from the respective date of payment of such costs and expenses aforesaid to the date of sale on account of the BUYER’s default.

Second, if the VESSEL has been completed, in or towards satisfaction of the unpaid balance of the CONTRACT PRICE, to which shall be added the cost of all additional work and extras agreed by the BUYER including interest thereon at five per cent (5.0%) per annum from the respective DUE DATE of the instalment in default to the date of sale, or if the VESSEL has not been completed, in or towards satisfaction of the unpaid amount of the cost incurred by the BUILDER prior to the date of sale on account of construction of the VESSEL, including work, labor, materials and reasonably estimated profit which the BUILDER would have been entitled to receive if the VESSEL had been completed and delivered plus interest thereon at five per cent (5.0%) per annum from the respective DUE DATE of the instalment in default to the date of sale.

Third, the balance of the proceeds, if any, shall belong to the BUYER, and shall forthwith be paid over to the BUYER by the BUILDER.

In the event of the proceeds from the sale together with instalment(s) retained by the BUILDER being insufficient to pay the BUILDER, the BUYER shall be liable for the deficiency and shall pay the same to the BUILDER upon its demand.

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ARTICLE XII    BUYER’S SUPPLIES

1. Responsibility of the BUYER

The BUYER shall, at its cost and expense, supply all of the items to be furnished by the Buyer as specified in the SPECIFICATIONS (hereinafter called the “BUYER’S SUPPLIES”), to the BUILDER at the SHIPYARD in perfect condition ready for installation and in accordance with the time schedule to be furnished by the BUILDER to meet they building schedule of the VESSEL.

In order to facilitate the installation of the BUYER’S SUPPLIES by the BUILDER, the BUYER shall furnish the BUILDER with the necessary plans, instruction books, test report and all test certificates required by the BUILDER and shall cause the representative(s) of the makers of the BUYER’S SUPPLIES to give the BUILDER any advice, instructions or assistance which the BUILDER may reasonably require in the installation or adjustment thereof at the SHIPYARD, all without cost or expense to the BUILDER.

The BUYER shall be liable for any expense incurred by the BUILDER for repair of the BUYER’S SUPPLIES due to defective design or materials, poor workmanship or performance or due to damage in transit and the DELIVERY DATE of the VESSEL shall be extended for the period of such repair if such repair shall affect the delivery of the VESSEL.

If necessary, the commissioning into good order of the BUYER’S SUPPLIES during and after installation on board shall be made at the BUYER’s expense by the representative of respective maker or the person designated by the BUYER in accordance with the BUILDER’s building schedule.

Should the BUYER fail to deliver to the BUILDER the BUYER’S SUPPLIES and the necessary document or advice for such supplies within the time specified by the BUILDER, the DELIVERY DATE of the VESSEL shall automatically be extended for the period of such delay if such delay in delivery shall affect the delivery of the VESSEL. In such event, the BUYER shall pay to the BUILDER all losses and damages sustained by the BUILDER directly related to the VESSEL

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due to such delay in the delivery of the BUYER’S SUPPLIES and such payment shall be made upon delivery of the VESSEL, provided, however, that the BUILDER shall have:

(a) furnished the BUYER with the time schedule referred to above, two (2) months prior to installation of the BUYER’S SUPPLIES and

(b) given the BUYER written notice of any delay in delivery of the BUYER’S SUPPLIES and the necessary document or advice for such supplies as soon as the delay occurs which might give rise to a claim by the BUILDER under this Paragraph.

Furthermore, if the delay in delivery of the BUYER’S SUPPLIES and the necessary document or advice for such supplies should exceed ten (10) days from the date specified by the BUILDER, the BUILDER shall be entitled to proceed with construction of the VESSEL without installation of such items (regardless of their nature or importance to the BUYER or the VESSEL) in or on the VESSEL without prejudice to the BUILDER’s rights as hereinabove provided, and the BUYER shall accept the VESSEL so completed.

2. Responsibility of the BUILDER

The BUILDER shall be responsible for storing, safekeeping and handling the BUYER’S SUPPLIES which the BUILDER is required to install on board the VESSEL under the SPECIFICATIONS after delivery of such supplies to the SHIPYARD, and shall install such supplies on board the VESSEL at the BUILDER’s expense .

However, the BUILDER shall not be responsible for the quality, performance or efficiency of any equipment included in the BUYER’S SUPPLIES and is under no obligation with respect to the guarantee of such equipment against any defects caused by poor quality, performance or efficiency of the BUYER’S SUPPLIES. If any of the BUYER’S SUPPLIES is lost or damaged while in the custody of the BUILDER, the BUILDER shall, if the loss or damage is due to wilful default or negligence on its part, be responsible for such loss or damage.

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ARTICLE XIII    INSURANCE

1. Extent of Insurance Coverage

From the time of launching of the VESSEL until the VESSEL is delivered to and accepted by the BUYER, the BUILDER shall, at its own cost and expense, keep the VESSEL and all machinery, materials, equipment, appurtenances and outfit delivered to the SHIPYARD for the VESSEL or built into, or installed in or upon the VESSEL fully insured with first class insurance company in Korea, against the risks under cover corresponding to the “Institute Clause for Builder’s Risk” upon the London Market.

The insurance coverage shall be carried up to the date of delivery of the VESSEL, and shall be in an amount equal to the CONTRACT PRICE.

A copy of the insurance policy shall be delivered to the BUYER.

2. Partial Loss / Total Loss

2.1 In the event of partial loss prior to delivery, all insurance shall be payable to the BUILDER and the BUILDER shall apply the amount recovered under the insurance policies to the repair of such damage to meet the SPECIFICATIONS at no additional expenses to the BUYER. The BUYER shall accept the VESSEL under this CONTRACT if fully repaired and completed in accordance with this CONTRACT and SPECIFICATIONS.

2.2 However, in the event that the VESSEL is determined to be an actual or constructive total loss, the BUILDER shall, by mutual agreement with the BUYER, either;

(a) Proceed in accordance with the terms of this CONTRACT, in which case the amount recovered under said insurance policy shall be applied to the reconstruction and/or repair of the VESSEL’s damage, provided the parties hereto shall have first agreed in writing as to such reasonable postponement of the DELIVERY DATE and adjustment of other terms of this CONTRACT including the CONTRACT PRICE and as may be necessary for the completion of such reconstruction; or

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(b) Refund to the BUYER the amount of all the instalments paid to the BUILDER under this CONTRACT whereupon this CONTRACT shall be deemed to be terminated and all rights, duties, liabilities and obligations of each of the parties to the other shall terminate forthwith.

If the parties hereto fail to reach such agreement within two (2) months after the VESSEL is determined to be an actual or constructive total loss, the provision of sub-paragraph 2.2 (b) as above shall apply.

3. Termination of the BUILDER’s Obligation to Insure

The BUILDER’s obligation to insure the VESSEL hereunder shall cease and terminate forthwith upon delivery thereof and acceptance of the VESSEL by the BUYER.

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ARTICLE XIV    DISPUTES AND ARBITRATION

1. Proceedings

1.1 Decision by the Classification Society

If any dispute arises between the parties hereto in regard to the design and/or construction of the VESSEL, its machinery and equipment, and/or in respect of the materials and/or workmanship thereof and/or thereon, and/or in respect of interpretations of this CONTRACT or the SPECIFICATIONS and PLAN, the parties may by mutual agreement refer the dispute to the CLASSIFICATION SOCIETY or to such other expert as may be mutually agreed between the parties hereto and whose decision shall be final, conclusive and binding upon the parties hereto.

1.2 Proceeding of Arbitration

In the event that the parties hereto do not agree to settle a dispute according to Paragraph 1 of this Article XIV and/or in the event of any other dispute of any kind whatsoever between the parties and relating to this CONTRACT or its rescission or any stipulation herein, such dispute shall be submitted to arbitration in London subject to the London Maritime Arbitrators Association. Each party shall appoint an arbitrator and the two arbitrators so appointed shall appoint a third arbitrator (together hereinafter call the “ARBITRATION BOARD”).

If the two arbitrators are unable to agree upon a third arbitrator within twenty (20) days after appointment of the second arbitrator, either of the said two arbitrators may apply to the President for the timing being of the London Maritime Arbitrators Association to appoint the third arbitrator.

Such arbitration shall be in accordance with subject to the provisions of the English Arbitration Act 1996 or any statutory modification or re-enactment thereof for the time being in force.

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Either party may demand arbitration of any such dispute by giving notice to the other party. Any demand for arbitration by either of the parties hereto shall state the name of the arbitrator appointed by such party and shall also state specifically the question or questions as to what such party is demanding arbitration. Within fourteen (14) days after receipt of notice of such demand for arbitration, the other party shall in turn appoint a second arbitrator and give notice in writing of such appointment to the party demanding arbitration. If a party fails to appoint an arbitrator as aforementioned within fourteen (14) days following receipt of notice of demand for arbitration by the other party, the party failing to appoint an arbitrator shall be deemed to have accepted and appointed, as its own arbitrator, the arbitrator appointed by the party demanding arbitration and the arbitration shall proceed before this sole arbitrator who alone in such event shall constitute the ARBITRATION BOARD.

The award of the arbitrators shall be final and binding on all parties.

2. Notice of Award

The award shall be immediately be given to the parties hereto in writing or by telefax.

3. Expenses

The ARBITRATION BOARD shall determine which party shall bear the expenses of the arbitration or the portion of such expenses which each party shall bear.

4. Entry in Court

Judgment upon the award may be entered in any court having jurisdiction thereof.

5. Alteration of Delivery Date

In the event of reference to arbitration of any dispute arising out of matters occurring prior to delivery of the VESSEL, the award may include any postponement of the DELIVERY DATE which the ARBITRATION BOARD may deem appropriate and/or a determination by the ARBITRATION BOARD as to whether a delay is classified as permissible or non-permissible for the purpose of Article VIII hereof and/or Article V hereof.

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ARTICLE XV    SUCCESSORS AND ASSIGNS

The BUILDER agrees that, prior to delivery of the VESSEL, this CONTRACT may, with the prior written approval of the BUILDER, which the BUILDER shall not unreasonably withhold, be transferred to and the title thereof may be taken by another company. In the event of any assignment pursuant to the terms of this CONTRACT, the assignee, its successors and assigns shall succeed to all the rights and obligations of the BUYER under this CONTRACT. However, the BUYER shall remain responsible for performance by the assignee, its successors and assigns of all the BUYER’s obligations, liabilities and responsibilities under this CONTRACT.

The BUILDER further agrees that the BUYER may assign to a financial institution(s) providing the BUYER with finance in relation to the acquisition of the VESSEL all its rights and benefits (but none of its obligations) under this CONTRACT without the consent of, but with a due prior notice of such assignment to, the BUILDER.

It is understood that any expenses including legal and other costs incurred due to the assignment or transfer of this CONTRACT shall be for the account of the BUYER.

The BUILDER accepts that QML has the right to nominate another company (such company hereinafter called the “NOMINEE”) as buyer in its place under this CONTRACT subject to the BUILDER’S prior written consent, such consent not to be unreasonably withheld or unduly delayed, provided however that the BUILDER’S consent shall not be withheld or delayed in the event that the NOMINEE has been formed by QML for the purpose of taking over this CONTRACT and is owned by at least fifty percent (50%) by QML . Upon such nomination by QML being accepted by the NOMINEE:

(a) The NOMINEE shall replace QML as the BUYER under this CONTRACT and shall have all rights and obligation that QML had by signing this CONTRACT as if the NOMINEE was named in this CONTRACT ab initio the buyer under this CONTRACT.

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(b) QML will remain responsible for the NOMINEE’S obligations under this CONTRACT and shall issue a Performance Guarantee as a guarantor in favour of the BUILDER in the form annexed to this CONTRACT as EXHIBIT “B”

(c) If at the time of nomination the letter of guarantee referred in paragraph 7 of Article X hereof has beers issued, the BUILDER shall procure that the bank that has issued the said letter of guarantee referred to in paragraph 7 of Article X hereof shall issue a supplemental letter to such letter of guarantee whereby the existing letter of guarantee in favour of QML shall be amended to be in favour of the NOMINEE.

The cost and expenses, if any, for transferring this CONTRACT and any other document from the BUYER to the NOMINEE shall be borne by the BUYER.

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ARTICLE XVI    TAXES AND DUTIES

1. Taxes

Unless otherwise expressly provided for in this CONTRACT, all costs and taxes including stamp duties, if any, incurred in or levied by any country except Korea in connection with this CONTRACT shall be borne by the BUYER and corresponding costs and taxes in Korea, before delivery of the VESSEL, if any, shall be borne by the BUILDER.

2. Duties

The BUILDER shall hold the BUYER harmless from any payment of duty imposed in Korea upon materials or supplies which, under the terms of this CONTRACT, or amendments thereto, may be supplied by the BUYER from abroad for the construction of the VESSEL.

The BUILDER shall likewise hold the BUYER harmless from any payment of duty imposed in Korea in connection with materials or supplies for operation of the VESSEL, including running stores, provisions and supplies necessary to stock the VESSEL for its operation so far as the concerned regulation allows such indemnity in Korea. This indemnity does not, however, extend to any items purchased by the BUYER for use in connection with the VESSEL, which are not absolutely required for the construction or operation of the VESSEL.

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ARTICLE XVII    PATENTS, TRADEMARKS AND COPYRIGHTS

1. Patents, Trademarks and Copyrights

Machinery and equipment of the VESSEL, whether made or furnished by the BUILDER under this CONTRACT, may bear the patent numbers, trademarks, or trade names of the manufacturers. The BUILDER shall defend and save harmless the BUYER from all liabilities or claims for or on account of the use of any patents, copyrights or design of any nature or kind, or for the infringement thereof including any unpatented invention made or used in the performance of this CONTRACT and also for any costs and expenses of litigation, if any, in connection therewith. No such liability or responsibility shall be with the BUILDER with regard to components and/or equipment and/or design supplied by the BUYER.

Nothing contained herein shall be construed as transferring any patent or trademark rights or copyrights in equipment covered by this CONTRACT, and all such rights are hereby expressly reserved to the true and lawful owners thereof.

2. Rights to the Specifications, Plans, etc.

The BUILDER retains all rights with respect to the SPECIFICATIONS, plans and working drawings, technical description calculations, test results and other data, information and documents concerning the design and construction of the VESSEL and the BUYER undertakes therefore not to disclose the same to any third parties or divulge any information contained therein, without the prior written consent of the BUILDER, excepting where it is necessary for the usual operation, repair and maintenance of the VESSEL.

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ARTICLE XVIII    INTERPRETATION AND GOVERNING LAW

This CONTRACT has been prepared in English and shall be executed in duplicate and in such number of additional copies as may be required by either party respectively. The parties hereto agree that this CONTRACT shall be governed and shall be construed in accordance with the laws of England.

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ARTICLE XIX     NOTICES

Any and all notices, requests, demands, instructions, advices and communications in connection with this CONTRACT shall be written in English, sent by registered air mail, facsimile and shall be deemed to be given when first received whether by registered mail, facsimile. They shall be addressed as follows, unless and until otherwise advised:

To the BUILDER

Korea Shipyard Co., Ltd.

1402 Nogjinri, Gunnaemyon, Jindogun, Jeollanamdo, Korea

Telephone	:   + 82 61 542 4521-6
Facsimile	:   + 82 61 542 0491
E-Mail	:   ksyard@gmail.com
Attention	:   Mr. Jeon, Min-Hwan

To the BUYER

c/o Quintana Management LLC

13 Pandoras & Kyprou Street

166 74 Glyfada

Athens, Greece

Telephone	:   +30 210 89 85 056
Facsimile	:   +30 210 8948 823
E-Mail	:   smolaris@quintanamaritime.com and     mkoutsouridis@quintanamaritime.com
Attention	:   Mr. Stamatis Molaris and Mr. Michael Koutsouridis

The said notices shall become effective upon receipt of the letter, facsimile communication by the receiver thereof. Where a notice by facsimile is concerned which is required to be confirmed by letter, then, unless the CONTRACT or the relevant Article thereof otherwise requires, the notice shall become effective upon receipt of the facsimile.

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ARTICLE XX    EFFECTIVENESS OF THIS CONTRACT

This CONTRACT shall become effective upon signing by the parties hereto.

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ARTICLE XXI    EXCLUSIVENESS

This CONTRACT shall constitute the only and entire agreement between the parties hereto, and unless otherwise expressly provided for in this CONTRACT, all other agreements, oral or written, made and entered into between the parties prior to the execution of this CONTRACT shall be null and void.

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

BUYER: QUINTANA MARITIME LIMITED
By:	/s/ Stamatis Molaris
Name:	Stamatis Molaris
Title:	Attorney in Fact
BUILDER: KOREA SHIPYARD CO., LTD.
By:	/s/ Jeon Min-Hwan
Name:	Jeon, Min-Hwan
Title:	President

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EXHIBIT A

LETTER OF GUARANTEE

Date:

Gentlemen:

We hereby issue our irrevocable Letter of Guarantee number                  in favor of                          (hereinafter called the “BUYER”) for account of Korea Shipyard Co., Ltd., Korea (hereinafter called the “BUILDER”) as follows in connection with the shipbuilding contract dated                      (hereinafter called the “CONTRACT”) made by and between the BUYER and the BUILDER for the construction and sale of one (1) 180,000 DWT Class Bulk Carrier having the BUILDER’s Hull No.              (hereinafter called the “VESSEL”).

In consideration of the BUYER entering into the CONTRACT with the BUILDER and for other good and valuable consideration (the receipt and adequacy of which is hereby acknowledged) if in connection with the terms of the CONTRACT the BUYER shall become entitled to a refund of the instalments or advance payments made to the BUILDER prior to the delivery of the VESSEL, we hereby irrevocably guarantee the repayment of the same to the BUYER within thirty (30) days after demand by the BUYER being initially US$                              (say U.S. Dollars                      only) together with interest thereon at the rate of five percent (5%) per annum from the date following the date of receipt by the BUILDER to the date of remittance by telegraphic transfer of such refund.

The amount of this Letter of Guarantee will be automatically increased upon the BUILDER’s receipt of the respective instalment, not more than three times, each time by the amount of instalment or advance payment plus interest thereon as provided in the CONTRACT, but in any eventuality the amount of this guarantee shall not exceed the total sum of US$                              (say U.S. Dollars              only) Plus interest thereon at the rate of five percent (5%) per annum from the date following the date of the BUILDER’s receipt of each instalment to the date of remittance by telegraphic transfer of the refund.

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This Letter of Guarantee is available against the BUYER’s written demand and signed statement certifying that the BUYER’s demand for refund has been made in conformity with Article X of the CONTRACT and the BUILDER has failed to make the refund.

Notwithstanding the provisions hereinabove, in the event that within thirty (30) days of the date of your demand to the BUILDER referred to above we receive notification from you or the BUILDER accompanied by written confirmation to the effect that an arbitration has been initiated and that your claim to cancel the CONTRACT or your claim for refund thereunder has been disputed and referred to arbitration in accordance with the provisions of the CONTRACT, we shall under this Letter of Guarantee pay to you the sum (not exceeding US$              plus interest by the same manner hereinabove) due to you from the BUILDER pursuant to the award of a London arbitration tribunal immediately upon receipt from you of a demand for payment of the sum and a copy of the award.

This Letter of Guarantee shall become null and void upon receipt by the BUYER of the sum guaranteed hereby or upon acceptance by the BUYER of the delivery of the VESSEL in accordance with the terms of the CONTRACT and, in either case, this Letter of Guarantee shall be returned to us.

This Letter of Guarantee is assignable and valid from the date of this Letter of Guarantee until such time as the VESSEL is delivered by the BUILDER to the BUYER in accordance with the provisions of the CONTRACT.

All demands, statements or notices in connection with this Letter of Guarantee shall be validly given if sent to us by telefax to our office at                                              , Korea as follows:

Korea

Tel:

Fax:

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In the event that any withholding or deduction is imposed by any law, the undersigned will pay such additional amount as maybe necessary in order that the actual amount received after deduction or withholding shall be equal to the amount that would have been received if such deduction or withholding were not required.

This Letter of Guarantee shall remain in full force and effect, notwithstanding any amendments made to the CONTRACT by the parties thereto.

This Letter of Guarantee shall be governed by and construed in accordance with the laws of England and any dispute hereunder shall be subject to arbitration in England under the provisions of the Arbitration Act 1996 or any modification or re-enforcement thereof at the time.

Very truly yours,

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EXHIBIT “B”

Messrs.

KOREA SHIPYARD CO., LTD.

1243-1, Yonsan-Dong

Mokpo City

Jeollanam-Do

Korea

Date:                     , 2006

PERFORMANCE GUARANTEE

Gentlemen:

In consideration of your executing a SHIPBUILDING CONTRACT (hereinafter called the “CONTRACT”), dated                      with                                              having its registered office at                                                                                (hereinafter called the “BUYER”) providing for the construction of one (1) 180,000 DWT Class Bulk Carrier bearing Hull No.              (hereinafter called the “VESSEL”), and providing, among other things, for payment of the CONTRACT PRICE amounting to United States Dollars                                                                 only (US$                             ), the undersigned hereby unconditionally and irrevocably guarantees to you, your successors and assignee, the due and faithful performance by the BUYER of all its liabilities and responsibilities under the CONTRACT and any supplements, amendments, changes, or modifications hereinafter made thereto, (hereby expressly waiving notice of any such supplement, amendment, change or modification as may be agreed to by the BUYER and confirming that this Guarantee shall be fully applicable to the CONTRACT as so supplemented, amended, changed or modified and to the CONTRACT, if it shall be assigned by the BUYER in accordance with Article XV of the CONTRACT) including but not limited to, due and prompt payment of the CONTRACT PRICE by the BUYER to you, your successors, and assignee under the CONTRACT and any supplements, amendments, changes or modifications as aforesaid.

The undersigned hereby certifies, represents and warrants that all acts, conditions and things required to be done and performed and to have occurred precedent to the creation and issuance of this Guarantee, and to constitute the same the valid and

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legally binding obligation of the undersigned enforceable in accordance with its terms have been done and performed and have occurred in due and strict compliance with the CONTRACT and applicable law.

The payment by the undersigned under this Guarantee shall be made forthwith upon receipt by us of written demand from you including a statement that the BUYER is in default of payment of the amounts that were due under the CONTRACT, without requesting you to take any or further procedure or step against the BUYER.

This Performance Guarantee shall become effective when the CONTRACT comes into effect according to its terms, and terminate upon payment of the DELIVERY INSTALMENT by the BUYER.

This Guarantee is governed by the laws of England and any dispute arising out of this guarantee may be referred to the non-exclusive jurisdiction of the Courts of England.

Yours faithfully,

For and on behalf of Quintana Maritime Limited

/s/ Stamatis Molaris
Name :	Stamatis Molaris
Title :	Attorney in Fact

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EX-10.19

Exhibit 10.19

SHIPBUILDING CONTRACT

FOR

THE CONSTRUCTION OF

ONE (1)

180,000 DWT CLASS BULK CARRIER

HULL NO. 0008

BETWEEN

QUINTANA MARITIME LIMITED

(AS BUYER)

AND

KOREA SHIPYARD CO., LTD.

(AS BUILDER)

SHIPBUILDING CONTRACT

THIS CONTRACT is made as of 3rd December, 2006 by and between QUINTANA MARITIME LIMITED, a company incorporated and existing under the laws of the Republic of the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the Republic of the Marshall Islands MH96960 (hereinafter called “QML”) or a company to be nominated by QML pursuant to Article XV hereof (hereinafter called the “NOMINEE”)(QML until such nomination takes place and the NOMINEE following such nomination having taken place, in either case hereinafter called the “BUYER”), the party of the first part and KOREA SHIPYARD CO ., LTD ., a company organized and existing under the laws of the Republic of Korea, having its registered office at 1243-1, Yonsan-bong, Mokpo-City, Jeollanam-Do, Korea (hereinafter called the ‘BUILDER”), the party of the second part,

WITNESSETH:

In consideration of the mutual covenants contained herein, the BUILDER agrees to design, build, launch, equip and complete one (1) 180,000 DWT Class Bulk Carrier as described in Article 1 hereof (hereinafter called the “VESSEL”) at the BUILDER’S shipyard in Jindo, Korea (hereinafter called the “SHIPYARD”) and to deliver and sell the VESSEL to the BUYER, and the BUYER agrees to accept delivery of and purchase from the BUILDER the VESSEL, according to the terms and conditions hereinafter set forth:

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INDEX

ARTICLE I	DESCRIPTION AND CLASS	4
ARTICLE II	CONTRACT PRICE	7
ARTICLE III	ADJUSTMENT OF THE CONTRACT PRICE	8
ARTICLE IV	INSPECTION AND APPROVAL	13
ARTICLE V	MODIFICATIONS CHANGES AND EXTRAS	19
ARTICLE VI	TRIALS AND COMPLETION	22
ARTICLE VII	DELIVERY	27
ARTICLE VIII	DELAYS AND EXTENSIONS OF TIME (FORCE MAJEURE)	31
ARTICLE IX	WARRANTY OF QUALITY	34
ARTICLE X	PAYMENT	39
ARTICLE XI	BUYER’S DEFAULT	45
ARTICLE XII	BUYER’S SUPPLIES	48
ARTICLE XIII	INSURANCE	50
ARTICLE XIV	DISPUTES AND ARBITRATION	52
ARTICLE XV	SUCCESSORS AND ASSIGNS	54
ARTICLE XVI	TAXES AND DUTIES	56
ARTICLE XVII	PATENTS, TRADEMARKS AND COPYRIGHTS	57
ARTICLE XVIII	INTERPRETATION AND GOVERNING LAW	58
ARTICLE XIX	NOTICES	59
ARTICLE XX	EFFECTIVENESS OF THIS CONTRACT	60
ARTICLE XXI	EXCLUSIVENESS	61
EXHIBIT A	LETTER OF GUARANTEE	63
EXHIBIT B	PERFORMANCE GUARANTEE	66

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ARTICLE I     DESCRIPTION AND CLASS

1. Description

The VESSEL shall have the BUILDER’S Hull No. 0008 and shall be constructed, equipped and completed in accordance with the specifications (Ref. No. KSB-FS-002R0 dated 3^rd December, 2006) and the maker list (Ref. No. KSB-ML-002R0 dated 3^rd Dec., 2006) (hereinafter collectively called the “SPECIFICATIONS”) and the general arrangement plan (Ref. No. KSB-GA-002R0 dated 3^rd Dec., 2006) (hereinafter called the “PLAN”), which shall constitute an integral part of this CONTRACT.

The SPECIFICATIONS and the PLAN are intended to explain each other and anything shown on the PLAN and not stipulated in the SPECIFICATIONS or anything stipulated in the SPECIFICATIONS and not shown on the PLAN shall be deemed and considered as if included in both. Should there be any inconsistencies or contradictions between the SPECIFICATIONS and the PLAN, the SPECIFICATIONS shall prevail. Should there be any inconsistencies or contradictions between this CONTRACT and the SPECIFICATIONS, this CONTRACT shall prevail.

2. Basic Dimensions and Principal Particulars of the VESSEL

The basic dimensions anti principal particulars of the VESSEL shall be

Length, overall	maximum 292.0 M
Length, between perpendiculars	283.0 M
Breadth, moulded	45.0 M
Depth to Upper Deck, moulded	24.7 M
Design draft, moulded, in seawater of specific gravity of 1.025	16.5 M
Scantling draft, moulded, in seawater of specific gravity of 1.025	18.2 M
Deadweight on the above moulded

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design draft of 16.5 M	about 159,000 M/T
Deadweight on the above moulded scantling draft of 18.2 M, guaranteed	179,700 M/T
Main propelling machinery	MAN-B&W 6S70 MC-C (Mark 7)
	MCR : 18,660 KW X 91.0 RPM
	NCR : 16,790 KW X 87.9 RPM
Service speed at 16.5 meters design draft at the condition of clean bottom and in calm and deep sea with main engine developing a NCR of 16,790 KW with fifteen per cent (15 %) sea margin, guaranteed	15.4 Knots
Fuel consumption of the main engine applying I.S.O. reference conditions to the result of official shop test at a NCR of 16,790 KW using marine diesel oil having lower calorific value of 42,700 KJ per Kg, guaranteed	166.7 gr/KW.HR

The details of the above particulars as well as the definitions and method of measurements and calculations are as indicated in the SPECIFICATIONS.

3. Classification, Rules and Regulations

(a) The VESSEL shall be built in compliance with the current rules and regulations of American Bureau of Shipping (hereinafter called the “CLASSIFICATION SOCIETY”), to be classed and registered as +A1(E), +AMS, Bulk Carrier CSR, SafeShip-CM, BC-A (holds 2, 4, 6 and 8 may be empty with maximum cargo density: 3.0t/m³), ESP, +ACCU, TCM, GRAB(20), UWILD, POT and also to comply with the rules, regulations and requirements of the other regulatory bodies described in the SPECIFICATIONS.

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(b) The rules, regulations and requirements of the CLASSIFICATION SOCIETY and the regulatory bodies and the other relevant, regulations and requirement, if any, are to include their current ones that have been issued and are effective as of the date of signing this CONTRACT.

(c) The BUILDER shall arrange with the CLASSIFICATION SOCIETY for the assignment by the CLASSIFICATION SOCIETY of representative(s) to the VESSEL during construction. All fees and charges incidental to classification of the VESSEL in compliance with the above specified rules, regulations and requirements of this CONTRACT shall be for the account of the BUILDER.

(d) The decision of the CLASSIFICATION SOCIETY as to whether the VESSEL complies with the regulations of the CLASSIFICATION SOCIETY shall be final and binding upon the BUILDER and the BUYER.

4. Nationality of the VESSEL

The VESSEL shall be built and completed by the BUILDER for registration in the Marshall Islands and shall be registered by the BUYER at its own cost and expense under the laws of the Marshall Islands with its home port of Majuro at the time of its delivery and acceptance hereunder.

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ARTICLE II     CONTRACT PRICE

The contract price of the VESSEL delivered to the BUYER at the SHIPYARD shall be United States Dollars Seventy Seven Million Seven Hundred Thousand (US $77,700,000) (hereinafter called the “CONTRACT PRICE”) which shall be paid plus any increases or less any decreases due to adjustment or modifications, if any, as set forth in this CONTRACT . The CONTRACT PRICE shall include payment for services in the inspection, tests, survey and classification of the VESSEL which will be rendered by the CLASSIFICATION SOCIETY and shall not include the cost of the BUYER’s SUPPLIES as stipulated in Article XII.

The CONTRACT PRICE also includes all costs and expenses for supplying all necessary drawings as stipulated in the SPECIFICATIONS except those to be furnished by the BUYER for the VESSEL in accordance with the SPECIFICATIONS.

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ARTICLE III     ADJUSTMENT OF THE CONTRACT PRICE

The CONTRACT PRICE of the VESSEL shall be adjusted as hereinafter set forth in the event of the following contingencies. It is hereby understood by both parties that any adjustment of the CONTRACT PRICE as provided for in this Article is by way of liquidated damages and not by way of penalty, the calculation of damage being deemed final.

1. Delayed Delivery

(a) No adjustment shall be made and the CONTRACT PRICE shall remain unchanged for the first thirty (30) days of the delay in delivery of the VESSEL [ending as of 12 o’clock midnight Korean Standard Time on the thirtieth (30th) day of delay] beyond the Delivery Date calculated as provided in Article VII.1. hereof.

(b) If delivery of the VESSEL is delayed more than thirty (30) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT, then, beginning at midnight of the thirtieth (30th) day after such due date, the CONTRACT PRICE of the VESSEL shall be reduced by United States Dollars Twenty Thousand (US $20,000) for each full day of delay.

However, unless the parties agree otherwise, the total amount of deduction from the CONTRACT PRICE shall not exceed the amount due to cover the delay of two hundred and forty (240) days after thirty (30) days of the delay in delivery of the VESSEL at the rate of deduction as specified hereinabove.

(c) But, if the delay in delivery of the VESSEL continues for a period of more than two hundred and seventy (270) days beyond the date upon which the delivery is due from the BUILDER under the terms of this CONTRACT then, in such event, and after such period has expired, the BUYER may, at its option, cancel this CONTRACT by serving upon the BUILDER a notice of cancellation by telegram, or facsimile to be confirmed by a

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registered letter via airmail directed to the BUILDER at the address given in this CONTRACT. Such cancellation shall be effective as of the date the notice thereof is received by the BUILDER. If the BUYER has not served the notice of cancellation after the aforementioned two hundred and seventy (270) days delay in delivery, the BUILDER may demand the BUYER to make an election in accordance with Article VIII.3. hereof.

(d) For the purpose of this Article, the delivery of the VESSEL shall be deemed to be delayed when and if the VESSEL, after taking into full account extension of the Delivery Date or permissible delays as provided in Article V, VI, VIII, XI, XII or elsewhere in this CONTRACT, is delivered beyond the date upon which delivery would then be due under the terms of this CONTRACT.

2. Insufficient Speed

(a) The CONTRACT PRICE of the VESSEL shall not be affected or changed, if the actual speed, as determined by trial runs more fully described in Article VI hereof, is less than the speed guaranteed under the terms of this CONTRACT and the SPECIFICATIONS provided such deficiency in actual speed is not more than three-tenths (3/10ths) of one (1) knot below the guaranteed speed.

(b) However, as for the deficiency of more than three-tenths (3/10ths) of one (1) knot in actual speed below the speed guaranteed under this CONTRACT, the CONTRACT PRICE shall be reduced as follows [Fractions of less than one-tenth (1/10th) of a knot shall be prorated]:

For the three-tenths (3/10ths) of a knot — a total sum of US $100,000

For the four-tenths (4/10ths) of a knot ——a total sum of US $175,000

For the five-tenths (5/10ths) of a knot —— a total sum of US $390,000

For the six-tenths (6/10ths) of a knot ——– a total sum of US $520,000

For the seven-tenths (7/10ths) of a knot —— a total sum of US $650,000

For the eight-tenths (8/10ths) of a knot —— a total sum of US $780,000

* The above figures are not cumulative.

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However, unless the parties agree otherwise, the total amount of reduction from the CONTRACT PRICE shall not exceed the amount due to cover the deficiency of eight-tenths (8/10ths) of one (1) knot below the guaranteed speed at the rate of reduction as specified above.

(c) If the deficiency in actual speed of the VESSEL is more than eight-tenths (8/10ths) of one (1) knot below the speed guaranteed under this CONTRACT, then the BUYER, at its option, may, subject to the BUILDER’s right to effect alterations or corrections as provided in Article VI 5 . hereof, cancel this CONTRACT or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for eight-tenths (8/10ths) of one (1) knot of deficiency only.

3. Excessive Fuel Consumption

(a) The CONTRACT PRICE shall not be affected or changed by reason of the fuel consumption of the VESSEL’s main engine, as determined by the engine manufacturer’s shop trial as per the SPECIFICATIONS being more than the guaranteed fuel consumption of the VESSEL’s main engine, if such excess is not more than five per cent (5%) over the fuel consumption guaranteed in Article I. 2 hereof.

(b) However, as for the excess of more than five per cent (5%) in the actual fuel consumption over the guaranteed fuel consumption of the VESSEL’s main engine the CONTRACT PRICE shall be reduced by United States Dollars Ninety Thousand (US $90,000), for each full one per cent (1%) increase in fuel consumption in excess of the said five per cent (5%) increase in fuel consumption [fractions of less than one per cent (1%) shall be prorated] . However, unless the parties agree otherwise, the total amount of reduction from the CONTRACT PRICE shall not exceed the amount due to cover the excess of ten per cent (10%) over the guaranteed fuel consumption of the VESSEL’s main engine at the rate of reduction as specified above.

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(c) If such actual fuel consumption exceeds the guaranteed fuel consumption of the VESSEL’s main engine by more than ten per cent (10%), the BUYER, at its option, may, subject to the BUILDER’s right to effect alterations or corrections as specified in Article VI . hereof, cancel this CONTRACT or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for the ten per cent (10%) increase only.

4. Deadweight below Contract Requirements

(a) The CONTRACT PRICE of the VESSEL shall not be affected or changed, if actual deadweight, determined as provided in this CONTRACT and the SPECIFICATIONS, is below the guaranteed deadweight of 179,700 metric tons on the moulded design draft of 18.2 meters required by this CONTRACT and the SPECIFICATIONS by an amount of 2,000 metric tons or less.

(b) However, should the deficiency in the actual deadweight of the VESSEL be in excess of 2,000 metric tons below the said guaranteed deadweight, then the CONTRACT PRICE of the VESSEL shall be reduced for each full one (1) metric ton [fractions of less than one (1) metric ton shall be disregarded] of decreased deadweight in excess of 2,000 metric tons by the sum of United States Dollars Seven Hundred (US $700) per metric ton. However, unless the parties agree otherwise, the total amount of deduction from the CONTRACT PRICE shall not exceed the amount due to cover the deficiency of 4,500 metric tons below the guaranteed deadweight hereinabove.

(c) If the deficiency in the deadweight of the VESSEL is more than 4,500 metric tons below the said guaranteed deadweight, then the BUYER, at its option, may, subject to the BUILDER’s right to effect alterations or corrections without the BUYER’s prior consent as specified in Article VI.5 . hereof, cancel this CONTRACT or may accept the VESSEL at a reduction in the CONTRACT PRICE as above provided for 4,500 metric tons of deficiency only.

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5. EFFECT OF CANCELLATION

It is expressly understood and agreed by the parties hereto that in any case, if the BUYER cancels this CONTRACT under this Article, the BUYER shall not be entitled to any liquidated damages.

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ARTICLE IV    INSPECTION AND APPROVAL

1. Appointment of BUYER’s Representative

The BUYER shall timely despatch to and maintain at the SHIPYARD, at its own cost, expense and risk, one or more representatives (hereinafter each called the “BUYER’S REPRESENTATIVE”), who shall be duly accredited in writing by the BUYER to supervise adequately the construction by the BUILDER of the VESSEL, her equipment and all accessories. Before the commencement of any item of work under this CONTRACT, the BUILDER shall, whenever reasonably required, previously exhibit, furnish to, and within the limits of the BUYER’S REPRESENTATIVE’s authority, secure the approval from the BUYER’S REPRESENTATIVE of any and all plans and drawings prepared in connection therewith . Upon appointment of the BUYER’S REPRESENTATIVE, the BUYER shall notify the BUILDER in writing of the name and the scope of the authority of the BUYER’S REPRESENTATIVE.

2. Authority of the BUYER’s Representative

Such BUYER’S REPRESENTATIVE shall, at all times during working hours of the construction until delivery of the VESSEL, have the right to inspect the VESSEL, her equipment and all accessories, and work in progress, or materials utilized in connection with the construction of the VESSEL, wherever such work is being done or such materials are stored, for the purpose of determining that the VESSEL, her equipment and accessories are being constructed in accordance with the terms of this CONTRACT and/or the SPECIFICATIONS and the PLAN.

The BUYER’S REPRESENTATIVE shall, within the limits of the authority conferred upon him by the BUYER, make decisions or give advice to the BUILDER on behalf of the BUYER promptly on all problems arising out of, or in connection with, the construction of the VESSEL and generally act in a reasonable manner with a view to cooperating to the utmost with the BUILDER in the construction process of the VESSEL.

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The decision, approval or advice of the BUYER’S REPRESENTATIVE shall be deemed to have been given by the BUYER and once given shall not be withdrawn, revoked or modified except with consent of the BUILDER. Provided that the BUYER’S REPRESENTATIVE or his assistants shall comply with the foregoing obligations, no act or omission of the BUYER’S REPRESENTATIVE or his assistants shall, in any way, diminish the liability of the BUILDER under Article IX (WARRANTY OF QUALITY). The BUYER’S REPRESENTATIVE shall notify the BUILDER promptly in writing of his discovery of any construction or materials, which he believes do not or will not conform to the requirements of the CONTRACT, the SPECIFICATIONS and the PLAN and likewise advise and consult with the BUILDER on all matters pertaining to the construction of the VESSEL, as may be required by the BUILDER, or as he may deem necessary.

However, if the BUYER’S REPRESENTATIVE fails to submit to the BUILDER without delay any such demand concerning alterations or changes with respect to the construction, arrangement or outfit of the VESSEL, which the BUYER’S REPRESENTATIVE has examined, inspected or attended at the test thereof under this CONTRACT or the SPECIFICATIONS and the PLAN, the BUYER’S REPRESENTATIVE shall be deemed to have approved the same and shall be precluded from making any demand for alterations, changes, or complaints with respect thereto at a later date.

The BUILDER shall comply with any such demand which is not contradictory to this CONTRACT, the SPECIFICATIONS or the PLAN, provided that any and all such demands by the BUYER’S REPRESENTATIVE with regard to construction, arrangement and outfit of the VESSEL shall be submitted in writing to the authorized representative of the BUILDER. The BUILDER shall notify the BUYER’S REPRESENTATIVE of the names of the persons who are from time to time authorized by the BUILDER for this purpose .

It is agreed upon between the BUYER and the BUILDER that the modifications, alterations or changer and other measures necessary to comply with such demand may be effected at a convenient time and place at the BUILDER’s reasonable discretion in view of the construction schedule of the VESSEL.

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In the event that the BUYER’S REPRESENTATIVE shall advise the BUILDER that he has discovered or believes the construction or materials do not or will not conform to the requirements of this CONTRACT and the SPECIFICATIONS or the PLAN, and the BUILDER shall not agree with the views of the BUYER’S REPRESENTATIVE in such respect, either the BUYER or the BUILDER may, with the agreement of the other party, seek an opinion of the CLASSIFICATION SOCIETY or failing such agreement, request an arbitration in accordance with the provisions of Article XIV hereof. The Principal Surveyor of the CLASSIFICATION SOCIETY or the arbitration tribunal, as the case may be, shall determine whether or not a nonconformity with the provisions of this CONTRACT, the SPECIFICATIONS and the PLAN exists.

3. Approval of Drawings

(a) The BUILDER shall submit to the BUYER three (3) copies of each of the plans and drawings to be submitted to the BUYER for its approval at its address as set forth in Article XIX hereof. The BUYER shall, within twenty one (21) calendar days after receipt thereof return to the BUILDER one (1) copy of such plans and drawings with the approval or comments, if any, of the BUYER. A list of the plans and drawings to be so submitted to the BUYER shall be mutually agreed upon between the parties hereto.

(b) When and if the BUYER’S REPRESENTATIVE shall have been sent by the BUYER to the SHIPYARD in accordance with Paragraph 1 of this Article, the BUILDER may submit the remainder, if any, of the plans and drawings in the agreed list, to the BUYER’S REPRESENTATIVE for his approval, unless otherwise agreed upon between the parties hereto.

The BUYER’S REPRESENTATIVE shall, within seven (7) days after receipt thereof, return to the BUILDER one (1) copy of such plans and drawings with his approval or comments written thereon, if any. Approval by the BUYER’S REPRESENTATIVE of the plans and drawings duly submitted to him shall be deemed to be the approval by the BUYER for all purposes of this CONTRACT.

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(c) In the event that the BUYER or the BUYER’S REPRESENTATIVE shall fail to return the plans and drawings to the BUILDER within the time limit as hereinabove provided, such plans and drawings shall be deemed to have been automatically approved without any comment. In the event the plans and drawings submitted by the BUILDER to the BUYER or the BUYER’S REPRESENTATIVE in accordance with this Article do not meet with the BUYER’s or the BUYER’S REPRESENTATIVE’s approval, the matter may be submitted by either party hereto for determination pursuant to Article XIV hereof. If the BUYER’s comments on the plans and drawings that are returned to the BUILDER by the BUYER within the said time limit are not clearly specified or detailed, the BUILDER shall be entitled to place its own interpretation on such comments in implementing them.

4. Salaries and Expenses

All salaries and expenses of the BUYER’S REPRESENTATIVE or any other person or persons employed by the BUYER hereunder shall be for the BUYER’s account.

5. Responsibility of the BUILDER

(a) The BUILDER shall provide the BUYER’S REPRESENTATIVE and his assistants free of charge with suitably furnished office space equipped with air conditioning at, or in the vicinity of, the SHIPYARD together with access to telephone and facsimile facilities as may be necessary to enable the BUYER’S REPRESENTATIVE and his assistants to carry out their work under this CONTRACT. However, the BUYER shall pay for the telephone or facsimile facilities used by the BUYER’S REPRESENTATIVE or his assistants.

The BUILDER, its employees, agents and subcontractors, during its working hours until delivery of the VESSEL, shall arrange for them to have free and ready access to the VESSEL, her equipment and accessories, and to any other place (except the areas controlled for the purpose of national security) where work is being done, or materials are being processed or stored in connection with the construction of the VESSEL including the premises of sub-contractors.

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The BUYER’S REPRESENTATIVE or his assistants or employees shall observe the work’s rules and regulations prevailing at the BUILDER’s and its sub-contractor’s premises. The BUILDER shall promptly provide to the BUYER’S REPRESENTATIVE and/or his assistants and shall ensure that its sub-contractors shall promptly provide all such information as he or they may reasonably request in connection with the construction of the VESSEL and her engines, equipment and machinery.

(c) The BUYER’S REPRESENTATIVE and his assistants shall at all times remain the employees of the BUYER. The BUILDER shall not be liable to the BUYER or the BUYER’S REPRESENTATIVE or to his assistants or to the BUYER’s employees or agents for personal injuries, including death, during the time they, or any of them, are on the VESSEL, or within the premises of either the BUILDER or its sub-contractors, or are otherwise engaged in and about the construction of the VESSEL, unless, however, such personal injuries, including death, are caused by the gross negligence of the BUILDER, its sub-contractors, or its or their employees or agents. The BUILDER shall not be liable to the BUYER for damages to, or destruction of property of the BUYER or of the BUYER’S REPRESENTATIVE or his assistants or the BUYER’s employees or agents, unless such damages, loss or destruction is caused by the gross negligence of the BUILDER, its sub-contractors, or its or their employees or agents.

6. RESPONSIBILITY OF THE BUYER

The BUYER shall undertake and assure that the BUYER’S REPRESENTATIVE shall carry out his duties, hereunder in accordance with the normal international shipbuilding practice and in such way so as to avoid any unnecessary increase in building cost, delay in the construction of the VESSEL and/or any disturbance in the construction schedule of the BUILDER.

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The BUILDER has the right to request the BUYER to replace the Representative who is deemed unsuitable and unsatisfactory for the proper progress of the VESSEL’s construction. The BUYER shall investigate the situation by sending its representative(s) to the SHIPYARD if necessary, and if the BUYER consider that such BUILDER’s request is justified, the BUYER shall effect such replacement as soon as conveniently arrangeable.

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ARTICLE V     MODIFICATIONS, CHANGES AND EXTRAS

1. How Effected

Minor modifications or changes to the SPECIFICATIONS and the PLAN under which the VESSEL is to be constructed may be made at any time hereafter by written agreement of the parties hereto. Any modification or change requested by the BUYER which does not affect the frame-work of the SPECIFICATIONS shall be agreed to by the BUILDER if the BUYER agrees to adjustment of the CONTRACT PRICE, deadweight and/or cubic capacity, speed requirements, the DELIVERY DATE and other terms and conditions of this CONTRACT reasonably required as a result of such modification or change. The BUILDER has the right to continue construction of the VESSEL on the basis of the SPECIFICATIONS and the PLAN until the BUYER has agreed to such adjustments. The BUILDER shall be entitled to refuse: to make any alteration, change or modification of the SPECIFICATIONS and/or the PLAN requested by the BUYER, if the BUYER does not agree to the aforesaid adjustments within fourteen (14) days of the BUILDER’s notification of the same to the BUYER, or, if, in the BUILDER’s judgement, the compliance with such request of the BUYER would cause an unreasonable disruption of the normal working schedule of the SHIPYARD.

The BUILDER, however, agrees to exert its efforts to accommodate such reasonable request by the BUYER so that the said change and modification shall be made at a reasonable cost and within the shortest period of time reasonably possible. The aforementioned agreement to modify and change the SPECIFICATIONS and the PLAN may be effected by exchange of letters or facsimiles manifesting the agreement.

The letters and facsimiles exchanged by the parties pursuant to the foregoing shall constitute an amendment to this CONTRACT, the SPECIFICATIONS or the PLAN under which the VESSEL shall be built. Upon consummation of such an agreement to modify and change the SPECIFICATIONS or the PLAN, the BUILDER shall alter the construction of the VESSEL in accordance therewith including any addition to, or deduction from, the work to be performed in connection with such construction.

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2. Substitution of Material

If any materials, machinery of equipment required for the construction of the VESSEL by the SPECIFICATIONS and the PLAN or otherwise under this CONTRACT cannot be procured in time to meet the BUILDER’S construction schedule for the VESSEL, or are in short supply, or are unreasonably high in price compared with the prevailing international market price, the BUILDER may supply, subject to the BUYER’S prior written approval, other materials, machinery or equipment of equal and effect capable of meeting the Rules and Regulations of the CLASSIFICATION SOCIETY and other regulatory bodies. The BUILDER shall not, however, be relieved of its obligations if such non-availability could have been for seen or occasioned by forward planning. In this case, the BUILDER shall not be entitled to an extension of the DELIVERY DATE or to increase in the CONTRACT PRICE by reason of such non-availability.

3. Changes in Rules and Regulations

If the specified rules and regulations with which the construction of the VESSEL is required to comply are altered or changed after the date of this CONTRACT by the CLASSIFICATION SOCIETY or bodies authorized to make such alterations or changes, either the BUYER or the BUILDER, upon receipt of due notice thereof, shall forthwith give notice thereof to the other party in writing. Thereupon, within ten (10) days after giving the notice to the BUILDER or receiving the notice from the BUILDER, the BUYER shall advise the BUILDER as to the alterations and changes, if any, to be made on the VESSEL which the BUYER, in its sole discretion, shall decide. The BUILDER shall not be obliged to comply with such alterations and/or changes if the BUYER fails to notify the BUILDER of its decision within the time limit stated above.

The BUILDER shall comply promptly with the said request of the BUYER, provided that the BUILDER and the BUYER shall first agree to:

(a) any increase or decrease in the CONTRACT PRICE of the VESSEL that is occasioned by such compliance;

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(b) any extension or advancement in the DELIVERY DATE of the VESSEL that is occasioned by such compliance;

(c) any increase or decrease in the deadweight and/or cubic capacity of the VESSEL, if such compliance results in any increase or reduction in the deadweight and/or cubic capacity;

(d) adjustment of the speed requirements if such compliance results in any increase or reduction in the speed; and

(e) any other alterations in the terms of this CONTRACT or of the SPECIFICATIONS and the PLAN or both, if such compliance makes such alterations of the terms necessary.

Any delay in the construction of the VESSEL caused by the BUYER’s delay in making a decision or agreement as above shall constitute a permissible delay under this CONTRACT. Such agreement by the BUYER shall be effected in the same manner as provided above for modification and change of the SPECIFICATIONS and the PLAN.

This paragraph does not refer to alterations or changes of rules and regulations of the CLASSIFICATION SOCIETY which were announced to the BUILDER in writing by the CLASSIFICATION SOCIETY on or before the date of signing of this CONTRACT.

The BUILDER may, at its sole discretion and responsibility, subcontract any part of the construction work of the VESSEL. The BUYER shall be informed by the BUILDER accordingly about the place where the subcontracting work is to be carried out in advance so that supervision can be performed properly.

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ARTICLE VI    TRIALS AND COMPLETION

1. Notice

The BUILDER shall notify the BUYER in writing or by facsimile at least fourteen (14) days in advance of the time and place of the trial run of the VESSEL. Such notice shall specify the place from which the VESSEL will commence her trial run and approximate date upon which the trial run is expected to take place. Such date shall be further confirmed by the BUILDER five (5) days in advance of the trial run by facsimile. The BUYER shall confirm in writing to the BUILDER that the VESSEL is ready for sea trials. In case of dispute between the parties whether the VESSEL is ready for sea trials the decision of the representative of the CLASSIFICATION SOCIETY is binding.

The BUYER’S REPRESENTATIVE, who is to witness the performance of the VESSEL during such trial run, shall be present at such place on the date specified in such notice. Should the BUYER’S REPRESENTATIVE fail to be present after the BUILDER’s due notice to the BUYER as provided above, the BUILDER shall be entitled to conduct such trial run with the presence of the representative(s) of the CLASSIFICATION SOCIETY only without the BUYER’S REPRESENTATIVE being present. In such case, the BUYER shall be obliged to accept the VESSEL on the basis of a certificate issued by the BUILDER that the VESSEL, after the trial run, subject to alterations and corrections, if necessary, has been found to conform with the SPECIFICATIONS and this CONTRACT and is satisfactory in all respects, provided the BUILDER first makes such corrections and alterations promptly.

2. Weather Condition

In the event of unfavorable weather on the date specified for the trial run, the trial run shall take place on the first available day that weather conditions permit. The parties hereto recognize that the weather conditions in Korean waters, in which the trial run is to take place, are such that great changes in weather may arise momentarily and without warning and therefore, it is agreed that if, during the trial

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runs, the weather should become so unfavorable that the trial run cannot be continued, then the trial run shall be discontinued and postponed until the first favorable day next following, unless the BUYER shall assent to the acceptance of the VESSEL by notification in writing on the basis of such trial run so far made prior to such change in weather conditions. Any delay of the trial run caused by such unfavorable weather conditions shall also operate to extend the DELIVERY DATE of the VESSEL for the period of delay occasioned by such unfavorable weather conditions.

3. How Conducted

All expenses in connection with the trials of the VESSEL are to be for the account of the BUILDER, which, during the trials, is to provide at its own expense the necessary crew to comply with conditions of safe navigation. The trials shall be conducted in the manner prescribed in this CONTRACT and the SPECIFICATIONS, and shall prove fulfilment of the performance requirements for the trials as set forth in the SPECIFICATIONS.

The BUILDER shall be entitled to conduct preliminary sea trials, during which the propulsion plant and/or its appurtenance shall be adjusted according to the BUILDER’s judgement. The BUILDER shall have the right to repeat any trial whatsoever as it deems necessary. Furthermore the BUYER’s REPRESENTATIVE is entitled to participate in any preliminary sea trials conducted by the BUILDER.

4. Consumable Stores

The BUILDER shall load the VESSEL with the required quantity of fuel oil, lubricating oil and greases, fresh water, and other stores necessary to conduct the trials as set forth in the SPECIFICATIONS. The necessary ballast (fuel oil, fresh water and such other ballast as may be required) to bring the VESSEL to the trial load draft, as specified in the SPECIFICATIONS, shall be supplied and paid for by the BUILDER whilst lubricating oil and greases shall be supplied and paid for by the BUYER within the time advised by the BUILDER for the conduct of sea trials as well as for use before the delivery of the VESSEL to the BUYER. The fuel oil as well as lubricating oil and greases shall be in accordance with the

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engine specifications and the BUYER shall decide and advise the BUILDER of the supplier’s name for lubricating oil and greases before the work-commencement of the VESSEL, provided that the supplier shall be acceptable to the BUYER and/or the makers of all the machinery.

Any fuel oil, fresh water or other consumable stores furnished and paid for by the BUILDER for trial runs remaining on board the VESSEL, at the time of acceptance of the VESSEL by the BUYER, shall be bought by the BUYER from the BUILDER at the BUILDER’s purchase price for such supply in Korea and payment by the BUYER thereof shall be made at the time of delivery of the VESSEL. The BUILDER shall pay the BUYER at the time of delivery of the VESSEL for the consumed quantity of any lubricating oil and greases which were furnished and paid for by the BUYER at the BUYER’s purchase price thereof. The consumed quantity of lubricating oils and greases shall be calculated on the basis of the difference between the remaining amount, including the same remaining in the main engine, other machinery and their pipes, stern tube and the like, and the supplied amount.

5. Acceptance or Rejection

(a) If, during any sea trial, any breakdown occurs entailing interruption or irregular performance which can be repaired on board, the trial shall be continued after such repairs and be valid in all respects.

(b) However, if, during or after the trial run, it becomes apparent that the VESSEL or any part of her equipment requires alterations or corrections which but for this provision would or might entitle the BUYER to cancel this CONTRACT, the BUILDER shall notify the BUYER promptly in writing or by facsimile to such effect and shall simultaneously advise the BUYER of the estimated additional time required for the necessary alterations or corrections to be made.

The BUYER shall, within two (2) days of receipt from the BUILDER of notice of completion of such alterations or corrections and after such further trials or tests as necessary, notify the BUILDER in writing or by

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facsimile confirmed in writing of its acceptance, qualified acceptance or rejection of the VESSEL, all in accordance with the SPECIFICATIONS and the PLAN and this CONTRACT, and shall not be entitled to reject the VESSEL on such grounds until such time.

(c) Save as above provided, the BUYER shall, within two (2) days after completion of the trial run, notify the BUILDER in writing or by facsimile confirmed in writing of its acceptance of the VESSEL or of the details in respect of which the VESSEL does not conform to the SPECIFICATIONS and the PLAN or this CONTRACT.

If the BUILDER is in agreement with the BUYER’s determinations as to non-conformity, the BUILDER shall make such alterations or changes as may be necessary to correct such non-conformity and shall prove the fulfilment of this CONTRACT and the SPECIFICATIONS by such tests or trials as may be necessary.

The BUYER shall, within two (2) days after completion of such tests and/or trials, notify the BUILDER in writing or by facsimile confirmed in writing of its acceptance or rejection of the VESSEL.

(d) However, the BUYER shall not be entitled to reject the VESSEL by reason of any minor or insubstantial items judged from the point of view of standard shipbuilding and shipping practice as not being in conformity with the SPECIFICATIONS, but, in that case, the BUILDER shall not be released from the obligation to correct and/or remedy such minor or insubstantial items as soon as practicable after the delivery of the VESSEL.

6. Effect of Acceptance

The BUYER’s written, or facsimile notification of acceptance delivered to the BUILDER as above provided, shall be final and binding insofar as conformity of the VESSEL to this Contract and the SPECIFICATIONS is concerned and shall preclude the BUYER from refusing formal delivery of the VESSEL as hereinafter

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provided, if the BUILDER complies with all conditions of delivery, as herein set forth and provided that, in the case of qualified acceptance, any matters which were mentioned in the notice of the qualified acceptance by the BUYER as requiring correction have been corrected satisfactorily.

If the BUYER fails to notify the BUILDER of its acceptance or rejection of the VESSEL as hereinabove provided, the BUYER shall be deemed to have accepted the VESSEL. Nothing contained in this Article shall preclude the BUILDER from exercising any and all rights which the BUILDER has under this CONTRACT if the BUILDER disagrees with the BUYER’s rejection of the VESSEL or any reasons given for such rejection, including arbitration provided in Article XIV hereof.

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ARTICLE VII    DELIVERY

1. Time and Place

The VESSEL shall be delivered by the BUILDER to the BUYER at the SHIPYARD, safely afloat on 15^th September, 2010 (hereinafter called the “DELIVERY DATE”) after completion of satisfactory trials and acceptance by the BUYER in accordance with the terms of Article VI, except that, in the event of delays in delivery of the VESSEL by the BUILDER due to causes which under the terms of this CONTRACT permit extensions of the time for delivery of the VESSEL, the aforementioned DELIVERY DATE shall be extended accordingly. The BUILDER shall have the right to deliver the VESSEL earlier than the DELIVERY DATE, but not earlier than the day falling 60 days prior to the DELIVERY DATE and provided always that the BUILDER shall have completed the VESSEL in accordance with the terms of this CONTRACT and the SPECIFICATIONS and PLAN and after completion of satisfactory trials and acceptance by the BUYER in accordance with the terms of Article VI hereof.

2. When and how Effected

Provided that the BUYER shall concurrently with delivery of the VESSEL release to the BUILDER the DELIVERY INSTALMENT as set forth in Article X.2. hereof and shall have fulfilled all of its obligations provided for in this CONTRACT, delivery of the VESSEL shall be forthwith effected upon acceptance thereof by the BUYER, as hereinabove provided, by the concurrent delivery by each of the parties hereto to the other of a PROTOCOL OF DELIVERY AND ACCEPTANCE acknowledging delivery of the VESSEL by the BUILDER and acceptance thereof by the BUYER, which PROTOCOL OF DELIVERY AND ACCEPTANCE shall be prepared in duplicate and signed by each of the parties hereto.

3. Documents to be Delivered to the BUYER

Upon delivery and acceptance of the VESSEL, the BUILDER shall deliver to the BUYER the following documents, which shall accompany the aforementioned PROTOCOL OF DELIVERY AND ACCEPTANCE:

(a) PROTOCOL OF TRIALS of the VESSEL made pursuant to this CONTRACT and the SPECIFICATIONS,

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(b) PROTOCOL OF INVENTORY of the equipment of the VESSEL, including spare parts, all as specified in the SPECIFICATIONS,

(c) PROTOCOL OF STORES OF CONSUMABLE NATURE, such as all fuel oil and fresh water remaining in tanks if its cost is charged to the BUYER under Article VI.4. hereof,

(d) DRAWINGS AND PLANS pertaining to the VESSEL as stipulated in the SPECIFICATIONS, which shall be furnished to the BUYER at no additional cost,

(e) ALL CERTIFICATES required to be furnished upon delivery of the VESSEL pursuant to this CONTRACT, the SPECIFICATIONS and the customary shipbuilding practice, including

(i) Classification Certificate

(ii) Safety Construction Certificate

(iii) Safety Equipment Certificate

(iv) Safety Radiotelegraphy Certificate

(v) International Loadline Certificate

(vi) International Tonnage Certificate

(vii) Suez Canal Tonnage Certificate

(viii) De-ratting Exemption Certificate

(ix) I.O.P.P. Certificate

(x) BUILDER’s Certificate

(xi) Deadweight Certificate (issued by the BUILDER)

However, it is agreed by the parties that if the Classification Certificate and/or other certificates are not available at the time of delivery of the VESSEL, provisional certificates shall be accepted by the BUYER, provided that the BUILDER shall furnish the BUYER with formal certificates as promptly as possible after such formal certificates have been issued.

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(f) DECLARATION OF WARRANTY of the BUILDER that the VESSEL is delivered to the BUYER free and clear of any liens, claims, mortgages, or other encumbrances upon the BUYER’s title thereto, and in particular, that the VESSEL is absolutely free of all burdens in the nature of imposts, taxes, or charges imposed by the Korean governmental authorities as well as of all liabilities of the BUILDER to its sub-contractors and employees and of all liabilities arising from the operation of the VESSEL in trial runs, or otherwise, prior to delivery except as otherwise provided under this CONTRACT.

(g) BILL OF SALE by the BUILDER to the BUYER transferring title to the VESSEL from the BUILDER to the BUYER, such Bill of Sale to be duly notarised and apostilled.

(h) Power of Attorney of the BUILDER authorising the execution of all documents listed in the Article VII, such Power of Attorney to be duly notarised and apostilled.

4. Tender of the VESSEL

If the BUYER fails to take delivery of the VESSEL after completion thereof according to this CONTRACT and the SPECIFICATIONS, the BUILDER shall have the right to tender delivery of the VESSEL after compliance with all procedural requirements as provided above.

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5. Title and Risk

Title and risk shall pass to the BUYER upon delivery of the VESSEL being effected as stated above and the BUILDER shall be free of all responsibility or liability whatsoever related with this CONTRACT except for the warranty of quality contained in Article IX and the obligation to correct and/or remedy, as provided in Article VI.5.(d), if any, it being expressly understood that, until such delivery is effected, the VESSEL and equipment thereof are at the entire risk of the BUILDER including but not confined to, risks of war, insurrection and seizure by Governments or Authorities, whether Korean or foreign, and whether at war or at peace . The title to the BUYER’S SUPPLIES as provided in Article XII shall remain with the BUYER and the BUILDER’s responsibility for such BUYER’S SUPPLIES shall be as described in Article XII.

6. Removal of the VESSEL

The BUYER shall take possession of the VESSEL immediately upon delivery thereof and shall remove the VESSEL from the SHIPYARD within three (3) days after delivery thereof is affected. If the BUYER shall not remove the VESSEL from the SHIPYARD within the foresaid three (3) days, the BUYER shall pay to the BUILDER the reasonable mooring charges of the VESSEL.

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ARTICLE VIII    DELAYS AND EXTENSIONS OF TIME (FORCE MAJEURE)

1. Causes of Delay

If, at any time after signing this CONTRACT, either the construction or delivery of the VESSEL or any performance required hereunder as a prerequisite to the delivery thereof is delayed by any of the following events: namely war, acts of state or government, blockade, revolution, insurrections, mobilization, civil commotion, riots, strikes, sabotage, lockouts, or other labour disturbances, Acts of God or the public enemy, plague or other epidemics, quarantines, shortage or prolonged failure of electric current, freight embargoes, or defects in major forgings or castings, or delays or defects in the BUYER’S SUPPLIES as stipulated in Article XII, if any, or shortage of materials, machinery or equipment or inability to obtain delivery or delays in delivery of materials, machinery or equipment, provided that at the time of ordering the same could reasonably be expected by the BUILDER to be delivered in time or defects in materials, machinery or equipment which could not have been detected by the BUILDER using seasonable care or earthquakes, tidal waves, typhoons, hurricanes, prolonged or unusually severe weather conditions or destruction of the premises or works of the BUILDER or its sub-contractors, or of the VESSEL, or any part thereof, by fire, landslides, flood, lightning, explosion, or delays in the BUILDER’s other commitments resulting from any such causes as described in this Article which in turn delay the construction of the VESSEL or the BUILDER’s performance under the CONTRACT, or delays caused by the CLASSIFICATION SOCIETY or the BUYER’s faulty action or omission, or other causes beyond the control of the BUILDER, its sub-contractors or suppliers as the case may be, or for any other causes which, under the terms of this CONTRACT, authorize and permit extension of the time for delivery of the VESSEL, then, in the event of delays due to the happening of any of the aforementioned contingencies, the DELIVERY DATE of the VESSEL under this CONTRACT shall be extended for a period of time, which shall not exceed the total accumulated time of all such delays. The BUILDER shall reasonably demonstrate that the cause of delay was not occasioned by the fault of the BUILDER and the BUILDER shall take all reasonable steps to mitigate its effect upon the construction of the VESSEL.

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2. Notice of Delays

Within ten (10) days after the date on which the BUILDER becomes aware of the occurrence of the cause of delay on account of which the BUILDER claims that it is entitled under this CONTRACT to an extension of the DELIVERY DATE of the VESSEL, excluding delays due to arbitration, the BUILDER shall advise the BUYER in writing or by facsimile of the date on which such cause of delay commenced, the reasons thereof and, if possible, its estimated duration of the probable delay in the delivery of the VESSEL, and shall supply the BUYER, if reasonably available, evidence to justify the delay claimed . Within one (1) week after such cause of delay ends, the BUILDER shall likewise advise the BUYER in writing or by facsimile of the date on which such cause of delay ended, and also shall specify the period of time by which the BUILDER claims the DELIVERY DATE should be extended by reason of such delay. Failure of the BUYER to object to the BUILDER’s notification of any claim for extension of the DELIVERY DATE of the VESSEL within one (1) week after receipt by the BUYER of such notification shall be deemed to be a waiver by the BUYER of its right to object to such extension.

3. Right to Cancel for Excessive Delay

If the total accumulated time of all permissible and non-permissible delays, excluding delays due to (i) arbitration under Article XIV, (ii) the BUYER’s defaults under Article XI, (iii) modifications and changes under Article V or (iv) delays or defects in the BUYER’S SUPPLIES as stipulated in Article XII, aggregates three hundred and sixty five (365) days or more, then, the BUYER may, at any time thereafter, cancel this CONTRACT by giving a written notice of cancellation to the BUILDER. Such cancellation shall be effective as of the date the notice thereof is received by the BUILDER.

If the BUYER has not served the notice of cancellation as provided in the above or Article III.1. hereof, the BUILDER may, at any time after expiration of the accumulated time of the delay in delivery, either three hundred and sixty five (365) days in case of the delay in this Paragraph or two hundred and seventy (270) days in case of the delay in Article III.1, notify the BUYER of the future date upon which the BUILDER estimates the VESSEL will be ready for delivery and

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demand in writing or by facsimile that the BUYER make an election either to cancel this CONTRACT or to consent to the delivery of the VESSEL at such future date, in which case the BUYER shall, within seven (7) days after receipt of such demand, make and notify the BUILDER of such election. If the BUYER elects to consent to the delivery of the VESSEL at such future date (or other future date as the parties may agree):

(a) Such future date shall become the contractual delivery date for the purposes of this CONTRACT and shall be subject to extension by reason of permissible delays as herein provided, and

(b) If the VESSEL is not delivered by such revised contractual delivery date (as extended by reason of permissible delays), the BUYER shall have the same right of cancellation upon the same terms as provided in the above and Article III.1.

If the BUYER shall not make an election within seven (7) days as provided hereinabove, the BUYER shall be deemed to have accepted such extension of the DELIVERY DATE to the future delivery date indicated by the BUILDER.

4. Definition of Permissible Delays

Delays on account of the foregoing causes shall be understood to be permissible delays, and are to be distinguished from non-permissible unauthorized delays on account of which the CONTRACT PRICE of the VESSEL is subject to adjustment as provided in Article III hereof.

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ARTICLE IX    WARRANTY OF QUALITY

1. Guarantee of Material and Workmanship

The BUILDER, for the period of twelve (12) months from the date of delivery of the VESSEL to the BUYER, guarantees the VESSEL and all parts and equipment thereof that are manufactured or furnished by the BUILDER under this CONTRACT against all defects which are directly due to defective materials, construction miscalculation and/or poor workmanship, provided such defects have not been caused by perils of the sea, rivers or navigation, or by normal wear and tear, overloading, improper loading or stowage, fire, accident, incompetence, mismanagement, negligence or wilful neglect or by alteration or addition by the BUYER not previously approved by the BUILDER.

The BUILDER will be responsible for all machinery or parts of machinery and all constructions which are supplied by sub-contractors and will guarantee the above mentioned for a period of twelve (12) months on the basis as laid down in this Paragraph.

2. Notice of Defects

The BUYER or its duly authorized representative will notify the BUILDER in writing or by facsimile promptly after discovery of any defect for which a claim is to be made under this guarantee.

The BUYER’s written notice shall include full particulars as to the nature of the defect and the extent of the damage caused thereby, but excluding consequential damage as hereinafter provided. The BUILDER will be under no obligation with respect to this guarantee in respect of any claim for defects discovered prior to the expiry date of the guarantee, unless notice of such defects is received by the BUILDER before the expiry date. However, facsimile advice received by the BUILDER within three (3) days after such expiry date that a claim is forthcoming will be sufficient compliance with the requirement as to time, provided that such facsimile advice shall include at least a brief description of the

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defect including the identity of the equipment, extent of damage, name and number of any replacement part and description of any remedial work required, and that full particulars are given to the BUILDER not later than seven (7) days after the expiry date.

3. Remedy of Defects

(a) The BUILDER shall remedy, at its expense, any defects, against which the VESSEL is guaranteed under this Article, by making all necessary and reasonably practicable repairs or replacements at the SHIPYARD or elsewhere as provided for in (b) herein below.

In any cases, removal of the VESSEL to the location at which the repair or replacements are to be effected, shall be at the BUYER’s risk and expenses.

(b) If it is impractical (which shall include, but not be limited to, an emergency) to bring the VESSEL to the SHIPYARD, the BUYER may cause the necessary repairs or replacements to be made elsewhere which is deemed by the BUYER with the consent of the BUILDER which shall not be unreasonably withheld, to be suitable for the purpose, provided that, in such event, the BUILDER may forward or supply replacement parts or materials to the VESSEL, unless forwarding or supplying thereof to the VESSEL would impair or delay the operation or working schedule of the VESSEL. In the event that the BUYER proposes to cause the necessary repairs or replacements to be made to the VESSEL at any shipyard or works other than the SHIPYARD, the BUYER shall first (but in all events as soon as reasonably possible) give the BUILDER notice in writing or by facsimile of the time and place such repairs will be made, and if the VESSEL is not thereby delayed, or her operation or working schedule is not thereby impaired, the BUILDER shall have the right to verify by its own representative(s) the nature and extent of the defects complained of. The BUILDER shall, in such case, promptly advise the BUYER by facsimile, after such examination has been completed, of its acceptance or rejection of the defects as ones that are covered by the guarantee herein provided. Upon the BUILDER’s acceptance of the defects as justifying remedy under

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this Article, or upon award of the arbitration so determining, the BUILDER shall compensate the BUYER for an amount equal to the reasonable cost of making the same repairs or replacements at the SHIPYARD. The BUILDER shall compensate the BUYER for the documented expenses incurred by the BUYER, but not to exceed one hundred and twenty percent (120%) of the cost of making such repair or replacement at the SHIPYARD, subject to the cost of making such repair or replacement in the SHIPYARD is being equal to the cost of the same repair and replacement in a major shipyard in Singapore.

(c) In the event that it is necessary for the BUILDER to forward a replacement of a defective part under this guarantee, replacement parts shall be supplied to the BUYER by airfreight (if air transport is feasible and necessary to assure the VESSEL’s undisturbed operation) on a freight prepaid basis to the port designated by the BUYER.

(d) The BUILDER reserves the option to retrieve, at the BUILDER’s cost, any of the replaced equipment/parts in case defects are remedied in accordance with the provisions in this Article.

(d) Any dispute under this Article shall be referred to arbitration in accordance with the provisions of Article XIV hereof.

4. Extent of BUILDER’s Liability

(a) After delivery of the VESSEL the responsibility of the BUILDER in respect of or in connection with the VESSEL or this CONTRACT shall be limited to the extent expressly provided in the Paragraph 4 of this Article. Except as expressly provided in this Paragraph, in no circumstances and on no ground whatsoever shall the BUILDER have any responsibility or liability whatsoever or howsoever arising in respect of or in connection with the VESSEL or this CONTRACT after the delivery of the VESSEL. Further, but without in any way limiting the generality of the foregoing, the BUILDER shall have no liability or responsibility whatsoever or howsoever arising for or in connection with any consequential or special losses, damages or expenses, any liability to any third party or any fine,

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compensation, penalty or other payment or sanction incurred by or imposed upon the BUYER or any other party whatsoever in relation to or in connection with this CONTRACT or the VESSEL.

(b) The BUILDER shall be under no obligation with respect to defects discovered after the expiration of the period of guarantee specified above, nor in any event shall the BUILDER be liable for any worsening of defects after the expiry date of the guarantee (notwithstanding Paragraph 3 of this Article).

(c) The BUILDER shall under no circumstances be liable for defects in the VESSEL or any part of equipment thereof caused by perils of the sea, rivers or navigation, or normal wear and tear, or fire or accidents at sea or elsewhere or by mismanagement, accident, negligence, wilful neglect, alteration or addition on the part of the BUYER, its employees or agents on or doing work on the VESSEL, including the VESSEL’s officers, crew and passengers. Likewise, the BUILDER shall not be liable for defects in the VESSEL or any part of equipment thereof that are due to repairs which were made by other than the BUILDER at the discretion of the BUYER as hereinabove provided.

(d) The liability of the BUILDER provided for in this Article shall be limited to defects directly caused by defective materials, construction miscalculation and/or poor workmanship as above provided. The BUILDER shall not be obliged to repair, not be liable for, damage to the VESSEL or any part of the equipment thereof, which after delivery of the VESSEL, is caused other than by the defects of the nature specified above. The guarantees contained as hereinabove in this Article replace and exclude any other liability, guarantee, warranty and/or condition imposed or implied by statute, common law, custom or otherwise on the part of the BUILDER by reason of the construction and sale of the VESSEL for and to the BUYER.

5. Guarantee Engineer

The BUILDER may at the request of the BUYER appoint a guarantee engineer to serve on the VESSEL as its representative for a period of three (3) months from

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the date the VESSEL is delivered. However, if the BUYER and the BUILDER shall deem it necessary to keep the guarantee engineer on the VESSEL for a longer period, then he shall remain on board the VESSEL after the said three (3) months, but no longer than twelve (12) months from the delivery of the VESSEL.

The BUYER and its employees shall give such guarantee engineer full cooperation in carrying out his duties as the representative of the BUILDER on board the VESSEL.

The BUYER shall accord the guarantee engineer treatment comparable to the VESSEL’s chief engineer and shall provide board and lodging at no cost to the BUILDER or the guarantee engineer. While the guarantee engineer is on board the VESSEL, the BUYER shall pay to the BUILDER a sum of United States Dollars Three Thousand Five Hundred (US$3,500.-) per month, the expenses of his repatriation to Mokpo, Korea by air upon termination of his service, the expenses of his communication with the BUILDER incurred in performing his duties and expenses, if any, of his medical and hospital care in the VESSEL’s hospital. The BUILDER and the BUYER shall, prior to delivery of the VESSEL, execute a separate agreement regarding the guarantee engineer.

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ARTICLE X    PAYMENT

1. Currency

All payments under this CONTRACT shall be made in United States Dollars.

2. Terms of Payment

The payments of the CONTRACT PRICE shall be made after CONTRACT EFFECTIVENESS as follows:

(a) First Instalment

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) shall be paid within three (3) business days after receipt by the BUYER of the original of the refund guarantee referred to Paragraph 7 of this Article.

(b) Second Instalment

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) shall be paid within three (3) business days after the later of (i) receipt by the BUYER of the BUILDER’s notice with confirmation by the CLASSIFICATION SOCIETY that the steel cutting has been carried out and (ii) 15^th September, 2009,

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(c) Third Instalment

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) shall be paid within three (3) business days after receipt by the BUYER of the BUILDER’s notice with confirmation by the CLASSIFICATION SOCIETY that the keel laying has been carried out.

(d) Fourth Instalment

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) shall be paid within three (3) business days after receipt by the BUYER of the BUILDER’s notice with confirmation by the CLASSIFICATION SOCIETY that the launching has been carried out.

(e) Fifth Instalment (DELIVERY INSTALMENT)

Twenty per cent (20%) of the CONTRACT PRICE amounting to United States Dollars Fifteen Million Five Hundred and Forty Thousand (US$15,540,000) plus or minus any increase or decrease due to modifications and/or adjustments, if any, arising prior to delivery of the VESSEL of the CONTRACT PRICE under Articles III and V of this CONTRACT shall be paid to the BUILDER concurrently with the delivery of the VESSEL. (The date stipulated for payment of first, second, third and fourth instalment mentioned above is hereinafter in this Article and in Article XI referred to as the “DUE DATE” of that instalment).

Under this CONTRACT’, in counting the business days, only Saturdays and Sundays are excepted. When a due date falls on a day when banks are not open for business in Greece, Korea or USA such due date shall fall due upon the first business day next following.

It is understood and agreed upon by the BUILDER and the BUYER that all payments under the provisions of this Article shall not be delayed or withheld by the BUYER due to any dispute or disagreement of whatsoever nature arising between the BUILDER and the BUYER, provided however that no payment shall

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be made by the BUYER under this CONTRACT if the refund guarantee to be issued pursuant to paragraph 7 of this Article X has not been issued. If the refund guarantee is withdrawn or in any way ceases to be valid at any time during the course of this CONTRACT on or before the delivery of the VESSEL, then the BUYER may terminate this CONTRACT by notice to the BUILDER in writing or by telefax confirmed in writing in accordance with the provisions of paragraph 5 of this Article X. Should there be any dispute in this connection, the matter shall be dealt with in accordance with the provisions of arbitration in Article XIV hereof.

3. DEMAND FOR PAYMENT

At least fourteen (14) days prior to the date of each event provided in Paragraph 2 of this Article on which any payment shall fall due hereunder, with the exception of the payment of the first instalment, the BUILDER shall notify the BUYER by facsimile of the date such payment becomes due.

The BUYER shall immediately acknowledge receipt of such notification by facsimile to the BUILDER, and make payment as set forth in this Article. If the BUILDER fails to receive the BUYER’s said acknowledgement within three (3) days after sending the aforementioned notification, the BUILDER shall promptly facsimile to the BUYER a second notification of similar import. The BUYER shall immediately acknowledge by facsimile receipt of the foregoing second notification regardless of whether or not the first notification was acknowledged as aforesaid.

4. Method of Payment

(a) All the pre-delivery payments and the payment due on delivery in settlement of the CONTRACT PRICE as provided for in Paragraph 2 of this Article shall be made to the BUILDER’s Bank specified (c) herein below at the BUYER’s cost and expense on or before the DUE DATE thereof by telegraphic transfer under telefax advice to the BUILDER.

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(b) The DELIVERY INSTALMENT as provided in paragraph 2.(e) of this Article shall be deposited with the BUILDER’s Bank by telegraphic transfer at least three (3) business days prior to scheduled delivery date of the VESSEL notified by the BUILDER with instruction that the said instalment is payable to the BUILDER against presentation by the BUILDER to the BUILDER’s Bank of duplicate original copy of the PROTOCOL OF DELIVERY AND ACCEPTANCE of the VESSEL signed by the BUILDER and the BUYER.

(c) Reference to the BUILDER’s Bank

- . Name	: Industrial Bank of Korea
- . Address	: 50, Ulchiro 2-Ga, Chungu, Seoul, Korea
- . Account No.	: 191-002348-56-00016
- . Telex Number	: K239384
- . Telefax Number	: 82-2-729-7204
- . Swift Code	: IBKOKRSE
- . Beneficiary	: Korea Shipyard Co., Ltd.
- . Through Bank	: Deutsche Bank Trust Company Americas,              New York
	ABA Number    : 021001033
	Swift Code         : BKTRUS33
	Customer            : Industrial Bank of Korea

(d) Simultaneously with each of the payments, the BUYER shall advise the BUILDER of the details of the payment by facsimile and at the same time, the BUYER shall cause the BUYER’s remitting bank to advise the BUILDER’s bank of the details of such payments by authenticated bank cable or telex.

5. Refund by the BUILDER

The payments made by the BUYER to the BUILDER prior to delivery of the VESSEL shall constitutes advances to the BUILDER. If the VESSEL is rejected by the BUYER in accordance with the terms of this CONTRACT, or except in the case of rescission or cancellation of this CONTRACT by the BUILDER under the

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provisions of Article XI hereof, if the BUYER terminates, cancels or rescinds this CONTRACT pursuant to any of the provisions of this CONTRACT specifically permitting the BUYER to do so, the BUILDER shall forthwith refund to the BUYER, in United States Dollars, the full amount of total sums paid by the BUYER to the BUILDER in advance of delivery together with interest thereon as herein provided.

The transfer and other bank charges of such refund shall be for the BUILDER’s account. The interest rate of the refund, as above provided, shall be five per cent (5.0%) per annum from the date following the date of receipt by the BUILDER of the pre-delivery instalment(s) to the date of remittance by telegraphic transfer of such refund.

It is hereby understood by both parties that payment of any interest provided herein is by way of liquidated damages due to cancellation of this CONTRACT and not by way of compensation for use of money.

If the BUILDER is required to refund to the BUYER the instalments paid by the BUYER to the BUILDER as provided in this Paragraph, the BUILDER shall return to the BUYER all of the BUYER’S SUPPLIES as stipulated in Article XII which were not incorporated into the VESSEL and pay to the BUYER an amount equal to the cost to the BUYER of these supplies incorporated into the VESSEL.

6. Discharge of Obligations

Such refund as provided in the foregoing Paragraphs 4 and 5 by the BUILDER to the BUYER shall forthwith discharge all the obligations, duties and liabilities of each of the parties hereto to the other except the claims of the BUILDER against the BUYER, if any, under this CONTRACT. Any and all refunds or payments due to the BUYER under this CONTRACT shall be effected by telegraphic transfer to the account specified by the BUYER.

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7. Refund Guarantee

As security for refund of the instalments of the CONTRACT PRICE payable prior to delivery of the VESSEL, the BUILDER shall furnish the BUYER at least three (3) business days prior to the payment of the first instalment with a letter of guarantee of a Korean bank acceptable to the BUYER, covering the amount of the predelivery instalment(s) plus interest in favour of the BUYER. Such letter of guarantee shall have substantially the same form and substance as Exhibit A annexed hereto.

The transfer and other bank charges of such refund shall be for the BUILDER’s account. The interest rate of the refund, as above provided shall be five per cent (5.0%) per annum from the date following the date of receipt by the BUILDER of the pre-delivery instalment(s) to the date of remittance by telegraphic transfer of such refund.

If the BUILDER is required to refund to the BUYER the instalment(s) paid by the BUYER to the BUILDER as provided in this Paragraph, the BUILDER shall return to the BUYER all of the BUYER’s SUPPLIES as stipulated in Article XII which were not incorporated into the VESSEL and pay to the BUYER an amount equal to the cost to the BUYER of those supplies incorporated into the VESSEL.

8. Performance Guarantee

As security for the correct fulfilment and performance of this CONTRACT by the BUYER and following nomination by QML of the NOMINEE under Article XV hereof, QML shall concurrently with such nomination being made by QML, furnish the BUILDER with a Letter of Guarantee issued by QML in such form and with such terms and conditions as mentioned in EXHIBIT “B” as annexed hereto.

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ARTICLE XI    BUYER’S DEFAULT

1. Definition of Default

The BUYER shall be deemed to be in default under this CONTRACT in the following cases:

(a) If any of the first, second, third and fourth instalment is not paid to the BUILDER within respective DUE DATE of such instalments; or

(b) If the DELIVERY INSTALMENT is not deposited at the account of the BUILDER with the BUILDER’s Bank in accordance with Article X 4. (b) hereof or if the said DELIVERY INSTALMENT deposit is not (for reasons not attributable to the BUILDER) released to the BUILDER against presentation by the BUILDER of a duplicate original copy of the PROTOCOL OF DELIVERY AND ACCEPTANCE; or

(c) If the BUYER fails to take delivery of the VESSEL when the VESSEL is duly tendered for delivery by the BUILDER under the provisions of Article VII hereof; or

(d) If an order or an effective resolution shall be passed for winding up of the BUYER (except for the purpose of reorganization, merger or amalgamation); or

(e) If the BUYER fails to be in punctual, due and full compliance with any of its obligations under this CONTRACT.

In case the BUYER is in default of any of its obligations under this CONTRACT, the BUILDER is entitled to and shall have the following rights, powers and remedies in addition to such other rights, powers and remedies as the BUILDER may have elsewhere in this CONTRACT and/or at law, at equity or otherwise.

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2. Effect of the BUYER’s Default on or before the Delivery of the VESSEL

If the BUYER shall be in default as provided in Paragraph 1 above of its obligations under this CONTRACT, then:

(a) The DELIVERY DATE of the VESSEL shall be extended automatically for the actual period of continuence of such default and the BUILDER shall not be obliged to pay any liquidated damages for the delay in delivery of the VESSEL caused thereby.

(b) The BUYER shall pay to the BUILDER interest at the rate five per cent (5.0%) per annum in respect of the instalment(s) in default from the respective DUE GATE to the date of actual receipt by the BUILDER of the full amount of such instalment(s).

(c) If the BUYER is in default in payment of any of the instalment(s) due and payable prior to or simultaneously with the delivery of the VESSEL, the BUILDER shall, in writing or by facsimile, notify the BUYER to that effect, and the BUYER shall, upon receipt of such notification, forthwith acknowledge in writing or by facsimile to the BUILDER that such notification has been received.

(d) If any of the BUYER’s default continues for a period of fifteen (15) business days after the BUILDER’s notification to the BUYER of such default, the BUILDER may, at its option, rescind this CONTRACT by serving upon the BUYER a written notice or a facsimile notice of rescission confirmed in writing.

(e) In the event of such cancellation by the BUILDER of this CONTRACT due to the BUYER’s default as provided for in paragraph 1 above, the BUILDER shall be entitled to retain and apply the instalments already paid by the BUYER to the recovery of the BUILDER’s loss and damage due to the BUYER’s default and the cancellation of this CONTRACT and at the same time the BUILDER shall have the full right and power either to complete or not to complete the VESSEL which is the sole property of the BUILDER as it deems fit, and to sell the VESSEL at a public or private sale on such terms and conditions as the BUILDER thinks fit without being answerable for any loss or damage.

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The proceeds received by the BUILDER from the sale shall be applied in addition to the instalment(s) retained by the BUILDER as mentioned hereinabove as follows:

First, in payment of all reasonable costs and expenses of the sale of the VESSEL, including interest thereon at five per cent (5.0%) per annum from the respective date of payment of such costs and expenses aforesaid to the date of sale on account of the BUYER’s default.

Second, if the VESSEL has been completed, in or towards satisfaction of the unpaid balance of the CONTRACT PRICE, to which shall be added the cost of all additional work and extras agreed by the BUYER including interest thereon at five per cent (5.0%) per annum from the respective DUE DATE of the instalment in default to the date of sale, or if the VESSEL has not been completed, in or towards satisfaction of the unpaid amount of the cost incurred by the BUILDER prior to the date of sale on account of construction of the VESSEL, including work, labor, materials and reasonably estimated profit which the BUILDER would have been entitled to receive if the VESSEL had been completed and delivered plus interest thereon at five per cent (5.0%) per annum from the respective DUE DATE of the instalment in default to the date of sale.

Third, the balance of the proceeds, if any, shall belong to the BUYER, and shall forthwith be paid over to the BUYER by the BUILDER.

In the event of the proceeds from the sale together with instalment(s) retained by the BUILDER being insufficient to pay the BUILDER, the BUYER shall be liable for the deficiency and shall pay the same to the BUILDER upon its demand.

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ARTICLE XII    BUYER’S SUPPLIES

1. Responsibility of the BUYER

The BUYER shall, at its cost and expense, supply all of the items to be furnished by the Buyer as specified in the SPECIFICATIONS (hereinafter called the “BUYER’S SUPPLIES”), to the BUILDER at the SHIPYARD in perfect condition ready for installation and in accordance with the time schedule to be furnished by the BUILDER to meet they building schedule of the VESSEL.

In order to facilitate the installation of the BUYER’S SUPPLIES by the BUILDER, the BUYER shall furnish the BUILDER with the necessary plans, instruction books, test report and all test certificates required by the BUILDER and shall cause the representative(s) of the makers of the BUYER’S SUPPLIES to give the BUILDER any advice, instructions or assistance which the BUILDER may reasonably require in the installation or adjustment thereof at the SHIPYARD, all without cost or expense to the BUILDER.

The BUYER shall be liable for any expense incurred by the BUILDER for repair of the BUYER’S SUPPLIES due to defective design or materials, poor workmanship or performance or due to damage in transit and the DELIVERY DATE of the VESSEL shall be extended for the period of such repair if such repair shall affect the delivery of the VESSEL.

If necessary, the commissioning into good order of the BUYER’S SUPPLIES during and after installation on board shall be made at the BUYER’s expense by the representative of respective maker or the person designated by the BUYER in accordance with the BUILDER’s building schedule.

Should the BUYER fail to deliver to the BUILDER the BUYER’S SUPPLIES and the necessary document or advice for such supplies within the time specified by the BUILDER, the DELIVERY DATE of the VESSEL shall automatically be extended for the period of such delay if such delay in delivery shall affect the delivery of the VESSEL. In such event, the BUYER shall pay to the BUILDER all losses and damages sustained by the BUILDER directly related to the VESSEL

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due to such delay in the delivery of the BUYER’S SUPPLIES and such payment shall be made upon delivery of the VESSEL, provided, however, that the BUILDER shall have:

(a) furnished the BUYER with the time schedule referred to above, two (2) months prior to installation of the BUYER’S SUPPLIES and

(b) given the BUYER written notice of any delay in delivery of the BUYER’S SUPPLIES and the necessary document or advice for such supplies as soon as the delay occurs which might give rise to a claim by the BUILDER under this Paragraph.

Furthermore, if the delay in delivery of the BUYER’S SUPPLIES and the necessary document or advice for such supplies should exceed ten (10) days from the date specified by the BUILDER, the BUILDER shall be entitled to proceed with construction of the VESSEL without installation of such items (regardless of their nature or importance to the BUYER or the VESSEL) in or on the VESSEL without prejudice to the BUILDER’s rights as hereinabove provided, and the BUYER shall accept the VESSEL so completed.

2. Responsibility of the BUILDER

The BUILDER shall be responsible for storing, safekeeping and handling the BUYER’S SUPPLIES which the BUILDER is required to install on board the VESSEL under the SPECIFICATIONS after delivery of such supplies to the SHIPYARD, and shall install such supplies on board the VESSEL at the BUILDER’s expense .

However, the BUILDER shall not be responsible for the quality, performance or efficiency of any equipment included in the BUYER’S SUPPLIES and is under no obligation with respect to the guarantee of such equipment against any defects caused by poor quality, performance or efficiency of the BUYER’S SUPPLIES. If any of the BUYER’S SUPPLIES is lost or damaged while in the custody of the BUILDER, the BUILDER shall, if the loss or damage is due to wilful default or negligence on its part, be responsible for such loss or damage.

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ARTICLE XIII    INSURANCE

1. Extent of Insurance Coverage

From the time of launching of the VESSEL until the VESSEL is delivered to and accepted by the BUYER, the BUILDER shall, at its own cost and expense, keep the VESSEL and all machinery, materials, equipment, appurtenances and outfit delivered to the SHIPYARD for the VESSEL or built into, or installed in or upon the VESSEL fully insured with first class insurance company in Korea, against the risks under cover corresponding to the “Institute Clause for Builder’s Risk” upon the London Market.

The insurance coverage shall be carried up to the date of delivery of the VESSEL, and shall be in an amount equal to the CONTRACT PRICE.

A copy of the insurance policy shall be delivered to the BUYER.

2. Partial Loss / Total Loss

2.1 In the event of partial loss prior to delivery, all insurance shall be payable to the BUILDER and the BUILDER shall apply the amount recovered under the insurance policies to the repair of such damage to meet the SPECIFICATIONS at no additional expenses to the BUYER. The BUYER shall accept the VESSEL under this CONTRACT if fully repaired and completed in accordance with this CONTRACT and SPECIFICATIONS.

2.2 However, in the event that the VESSEL is determined to be an actual or constructive total loss, the BUILDER shall, by mutual agreement with the BUYER, either;

(a) Proceed in accordance with the terms of this CONTRACT, in which case the amount recovered under said insurance policy shall be applied to the reconstruction and/or repair of the VESSEL’s damage, provided the parties hereto shall have first agreed in writing as to such reasonable postponement of the DELIVERY DATE and adjustment of other terms of this CONTRACT including the CONTRACT PRICE and as may be necessary for the completion of such reconstruction; or

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(b) Refund to the BUYER the amount of all the instalments paid to the BUILDER under this CONTRACT whereupon this CONTRACT shall be deemed to be terminated and all rights, duties, liabilities and obligations of each of the parties to the other shall terminate forthwith.

If the parties hereto fail to reach such agreement within two (2) months after the VESSEL is determined to be an actual or constructive total loss, the provision of sub-paragraph 2.2 (b) as above shall apply.

3. Termination of the BUILDER’s Obligation to Insure

The BUILDER’s obligation to insure the VESSEL hereunder shall cease and terminate forthwith upon delivery thereof and acceptance of the VESSEL by the BUYER.

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ARTICLE XIV    DISPUTES AND ARBITRATION

1. Proceedings

1.1 Decision by the Classification Society

If any dispute arises between the parties hereto in regard to the design and/or construction of the VESSEL, its machinery and equipment, and/or in respect of the materials and/or workmanship thereof and/or thereon, and/or in respect of interpretations of this CONTRACT or the SPECIFICATIONS and PLAN, the parties may by mutual agreement refer the dispute to the CLASSIFICATION SOCIETY or to such other expert as may be mutually agreed between the parties hereto and whose decision shall be final, conclusive and binding upon the parties hereto.

1.2 Proceeding of Arbitration

In the event that the parties hereto do not agree to settle a dispute according to Paragraph 1 of this Article XIV and/or in the event of any other dispute of any kind whatsoever between the parties and relating to this CONTRACT or its rescission or any stipulation herein, such dispute shall be submitted to arbitration in London subject to the London Maritime Arbitrators Association. Each party shall appoint an arbitrator and the two arbitrators so appointed shall appoint a third arbitrator (together hereinafter call the “ARBITRATION BOARD”).

If the two arbitrators are unable to agree upon a third arbitrator within twenty (20) days after appointment of the second arbitrator, either of the said two arbitrators may apply to the President for the timing being of the London Maritime Arbitrators Association to appoint the third arbitrator.

Such arbitration shall be in accordance with subject to the provisions of the English Arbitration Act 1996 or any statutory modification or re-enactment thereof for the time being in force.

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Either party may demand arbitration of any such dispute by giving notice to the other party. Any demand for arbitration by either of the parties hereto shall state the name of the arbitrator appointed by such party and shall also state specifically the question or questions as to what such party is demanding arbitration. Within fourteen (14) days after receipt of notice of such demand for arbitration, the other party shall in turn appoint a second arbitrator and give notice in writing of such appointment to the party demanding arbitration. If a party fails to appoint an arbitrator as aforementioned within fourteen (14) days following receipt of notice of demand for arbitration by the other party, the party failing to appoint an arbitrator shall be deemed to have accepted and appointed, as its own arbitrator, the arbitrator appointed by the party demanding arbitration and the arbitration shall proceed before this sole arbitrator who alone in such event shall constitute the ARBITRATION BOARD.

The award of the arbitrators shall be final and binding on all parties.

2. Notice of Award

The award shall be immediately be given to the parties hereto in writing or by telefax.

3. Expenses

The ARBITRATION BOARD shall determine which party shall bear the expenses of the arbitration or the portion of such expenses which each party shall bear.

4. Entry in Court

Judgment upon the award may be entered in any court having jurisdiction thereof.

5. Alteration of Delivery Date

In the event of reference to arbitration of any dispute arising out of matters occurring prior to delivery of the VESSEL, the award may include any postponement of the DELIVERY DATE which the ARBITRATION BOARD may deem appropriate and/or a determination by the ARBITRATION BOARD as to whether a delay is classified as permissible or non-permissible for the purpose of Article VIII hereof and/or Article V hereof.

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ARTICLE XV    SUCCESSORS AND ASSIGNS

The BUILDER agrees that, prior to delivery of the VESSEL, this CONTRACT may, with the prior written approval of the BUILDER, which the BUILDER shall not unreasonably withhold, be transferred to and the title thereof may be taken by another company. In the event of any assignment pursuant to the terms of this CONTRACT, the assignee, its successors and assigns shall succeed to all the rights and obligations of the BUYER under this CONTRACT. However, the BUYER shall remain responsible for performance by the assignee, its successors and assigns of all the BUYER’s obligations, liabilities and responsibilities under this CONTRACT.

The BUILDER further agrees that the BUYER may assign to a financial institution(s) providing the BUYER with finance in relation to the acquisition of the VESSEL all its rights and benefits (but none of its obligations) under this CONTRACT without the consent of, but with a due prior notice of such assignment to, the BUILDER.

It is understood that any expenses including legal and other costs incurred due to the assignment or transfer of this CONTRACT shall be for the account of the BUYER.

The BUILDER accepts that QML has the right to nominate another company (such company hereinafter called the “NOMINEE”) as buyer in its place under this CONTRACT subject to the BUILDER’S prior written consent, such consent not to be unreasonably withheld or unduly delayed, provided however that the BUILDER’S consent shall not be withheld or delayed in the event that the NOMINEE has been formed by QML for the purpose of taking over this CONTRACT and is owned by at least fifty percent (50%) by QML . Upon such nomination by QML being accepted by the NOMINEE:

(a) The NOMINEE shall replace QML as the BUYER under this CONTRACT and shall have all rights and obligation that QML had by signing this CONTRACT as if the NOMINEE was named in this CONTRACT ab initio the buyer under this CONTRACT.

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(b) QML will remain responsible for the NOMINEE’S obligations under this CONTRACT and shall issue a Performance Guarantee as a guarantor in favour of the BUILDER in the form annexed to this CONTRACT as EXHIBIT “B”

(c) If at the time of nomination the letter of guarantee referred in paragraph 7 of Article X hereof has beers issued, the BUILDER shall procure that the bank that has issued the said letter of guarantee referred to in paragraph 7 of Article X hereof shall issue a supplemental letter to such letter of guarantee whereby the existing letter of guarantee in favour of QML shall be amended to be in favour of the NOMINEE.

The cost and expenses, if any, for transferring this CONTRACT and any other document from the BUYER to the NOMINEE shall be borne by the BUYER.

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ARTICLE XVI    TAXES AND DUTIES

1. Taxes

Unless otherwise expressly provided for in this CONTRACT, all costs and taxes including stamp duties, if any, incurred in or levied by any country except Korea in connection with this CONTRACT shall be borne by the BUYER and corresponding costs and taxes in Korea, before delivery of the VESSEL, if any, shall be borne by the BUILDER.

2. Duties

The BUILDER shall hold the BUYER harmless from any payment of duty imposed in Korea upon materials or supplies which, under the terms of this CONTRACT, or amendments thereto, may be supplied by the BUYER from abroad for the construction of the VESSEL.

The BUILDER shall likewise hold the BUYER harmless from any payment of duty imposed in Korea in connection with materials or supplies for operation of the VESSEL, including running stores, provisions and supplies necessary to stock the VESSEL for its operation so far as the concerned regulation allows such indemnity in Korea. This indemnity does not, however, extend to any items purchased by the BUYER for use in connection with the VESSEL, which are not absolutely required for the construction or operation of the VESSEL.

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ARTICLE XVII    PATENTS, TRADEMARKS AND COPYRIGHTS

1. Patents, Trademarks and Copyrights

Machinery and equipment of the VESSEL, whether made or furnished by the BUILDER under this CONTRACT, may bear the patent numbers, trademarks, or trade names of the manufacturers. The BUILDER shall defend and save harmless the BUYER from all liabilities or claims for or on account of the use of any patents, copyrights or design of any nature or kind, or for the infringement thereof including any unpatented invention made or used in the performance of this CONTRACT and also for any costs and expenses of litigation, if any, in connection therewith. No such liability or responsibility shall be with the BUILDER with regard to components and/or equipment and/or design supplied by the BUYER.

Nothing contained herein shall be construed as transferring any patent or trademark rights or copyrights in equipment covered by this CONTRACT, and all such rights are hereby expressly reserved to the true and lawful owners thereof.

2. Rights to the Specifications, Plans, etc.

The BUILDER retains all rights with respect to the SPECIFICATIONS, plans and working drawings, technical description calculations, test results and other data, information and documents concerning the design and construction of the VESSEL and the BUYER undertakes therefore not to disclose the same to any third parties or divulge any information contained therein, without the prior written consent of the BUILDER, excepting where it is necessary for the usual operation, repair and maintenance of the VESSEL.

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ARTICLE XVIII    INTERPRETATION AND GOVERNING LAW

This CONTRACT has been prepared in English and shall be executed in duplicate and in such number of additional copies as may be required by either party respectively. The parties hereto agree that this CONTRACT shall be governed and shall be construed in accordance with the laws of England.

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ARTICLE XIX     NOTICES

Any and all notices, requests, demands, instructions, advices and communications in connection with this CONTRACT shall be written in English, sent by registered air mail, facsimile and shall be deemed to be given when first received whether by registered mail, facsimile. They shall be addressed as follows, unless and until otherwise advised:

To the BUILDER

Korea Shipyard Co., Ltd.

1402 Nogjinri, Gunnaemyon, Jindogun, Jeollanamdo, Korea

Telephone	:   + 82 61 542 4521-6
Facsimile	:   + 82 61 542 0491
E-Mail	:   ksyard@gmail.com
Attention	:   Mr. Jeon, Min-Hwan

To the BUYER

c/o Quintana Management LLC

13 Pandoras & Kyprou Street

166 74 Glyfada

Athens, Greece

Telephone	:   +30 210 89 85 056
Facsimile	:   +30 210 8948 823
E-Mail	:   smolaris@quintanamaritime.com and     mkoutsouridis@quintanamaritime.com
Attention	:   Mr. Stamatis Molaris and Mr. Michael Koutsouridis

The said notices shall become effective upon receipt of the letter, facsimile communication by the receiver thereof. Where a notice by facsimile is concerned which is required to be confirmed by letter, then, unless the CONTRACT or the relevant Article thereof otherwise requires, the notice shall become effective upon receipt of the facsimile.

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ARTICLE XX    EFFECTIVENESS OF THIS CONTRACT

This CONTRACT shall become effective upon signing by the parties hereto.

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ARTICLE XXI    EXCLUSIVENESS

This CONTRACT shall constitute the only and entire agreement between the parties hereto, and unless otherwise expressly provided for in this CONTRACT, all other agreements, oral or written, made and entered into between the parties prior to the execution of this CONTRACT shall be null and void.

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

BUYER: QUINTANA MARITIME LIMITED
By:	/s/ Stamatis Molaris
Name:	Stamatis Molaris
Title:	Attorney in Fact
BUILDER: KOREA SHIPYARD CO., LTD.
By:	/s/ Jeon Min-Hwan
Name:	Jeon, Min-Hwan
Title:	President

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EXHIBIT A

LETTER OF GUARANTEE

Date:

Gentlemen:

We hereby issue our irrevocable Letter of Guarantee number                  in favor of                          (hereinafter called the “BUYER”) for account of Korea Shipyard Co., Ltd., Korea (hereinafter called the “BUILDER”) as follows in connection with the shipbuilding contract dated                      (hereinafter called the “CONTRACT”) made by and between the BUYER and the BUILDER for the construction and sale of one (1) 180,000 DWT Class Bulk Carrier having the BUILDER’s Hull No.              (hereinafter called the “VESSEL”).

In consideration of the BUYER entering into the CONTRACT with the BUILDER and for other good and valuable consideration (the receipt and adequacy of which is hereby acknowledged) if in connection with the terms of the CONTRACT the BUYER shall become entitled to a refund of the instalments or advance payments made to the BUILDER prior to the delivery of the VESSEL, we hereby irrevocably guarantee the repayment of the same to the BUYER within thirty (30) days after demand by the BUYER being initially US$                              (say U.S. Dollars                      only) together with interest thereon at the rate of five percent (5%) per annum from the date following the date of receipt by the BUILDER to the date of remittance by telegraphic transfer of such refund.

The amount of this Letter of Guarantee will be automatically increased upon the BUILDER’s receipt of the respective instalment, not more than three times, each time by the amount of instalment or advance payment plus interest thereon as provided in the CONTRACT, but in any eventuality the amount of this guarantee shall not exceed the total sum of US$                              (say U.S. Dollars              only) Plus interest thereon at the rate of five percent (5%) per annum from the date following the date of the BUILDER’s receipt of each instalment to the date of remittance by telegraphic transfer of the refund.

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This Letter of Guarantee is available against the BUYER’s written demand and signed statement certifying that the BUYER’s demand for refund has been made in conformity with Article X of the CONTRACT and the BUILDER has failed to make the refund.

Notwithstanding the provisions hereinabove, in the event that within thirty (30) days of the date of your demand to the BUILDER referred to above we receive notification from you or the BUILDER accompanied by written confirmation to the effect that an arbitration has been initiated and that your claim to cancel the CONTRACT or your claim for refund thereunder has been disputed and referred to arbitration in accordance with the provisions of the CONTRACT, we shall under this Letter of Guarantee pay to you the sum (not exceeding US$              plus interest by the same manner hereinabove) due to you from the BUILDER pursuant to the award of a London arbitration tribunal immediately upon receipt from you of a demand for payment of the sum and a copy of the award.

This Letter of Guarantee shall become null and void upon receipt by the BUYER of the sum guaranteed hereby or upon acceptance by the BUYER of the delivery of the VESSEL in accordance with the terms of the CONTRACT and, in either case, this Letter of Guarantee shall be returned to us.

This Letter of Guarantee is assignable and valid from the date of this Letter of Guarantee until such time as the VESSEL is delivered by the BUILDER to the BUYER in accordance with the provisions of the CONTRACT.

All demands, statements or notices in connection with this Letter of Guarantee shall be validly given if sent to us by telefax to our office at                                              , Korea as follows:

Korea

Tel:

Fax:

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In the event that any withholding or deduction is imposed by any law, the undersigned will pay such additional amount as maybe necessary in order that the actual amount received after deduction or withholding shall be equal to the amount that would have been received if such deduction or withholding were not required.

This Letter of Guarantee shall remain in full force and effect, notwithstanding any amendments made to the CONTRACT by the parties thereto.

This Letter of Guarantee shall be governed by and construed in accordance with the laws of England and any dispute hereunder shall be subject to arbitration in England under the provisions of the Arbitration Act 1996 or any modification or re-enforcement thereof at the time.

Very truly yours,

65

EXHIBIT “B”

Messrs.

KOREA SHIPYARD CO., LTD.

1243-1, Yonsan-Dong

Mokpo City

Jeollanam-Do

Korea

Date:                     , 2006

PERFORMANCE GUARANTEE

Gentlemen:

In consideration of your executing a SHIPBUILDING CONTRACT (hereinafter called the “CONTRACT”), dated                      with                                              having its registered office at                                                                                (hereinafter called the “BUYER”) providing for the construction of one (1) 180,000 DWT Class Bulk Carrier bearing Hull No.              (hereinafter called the “VESSEL”), and providing, among other things, for payment of the CONTRACT PRICE amounting to United States Dollars                                                                 only (US$                             ), the undersigned hereby unconditionally and irrevocably guarantees to you, your successors and assignee, the due and faithful performance by the BUYER of all its liabilities and responsibilities under the CONTRACT and any supplements, amendments, changes, or modifications hereinafter made thereto, (hereby expressly waiving notice of any such supplement, amendment, change or modification as may be agreed to by the BUYER and confirming that this Guarantee shall be fully applicable to the CONTRACT as so supplemented, amended, changed or modified and to the CONTRACT, if it shall be assigned by the BUYER in accordance with Article XV of the CONTRACT) including but not limited to, due and prompt payment of the CONTRACT PRICE by the BUYER to you, your successors, and assignee under the CONTRACT and any supplements, amendments, changes or modifications as aforesaid.

The undersigned hereby certifies, represents and warrants that all acts, conditions and things required to be done and performed and to have occurred precedent to the creation and issuance of this Guarantee, and to constitute the same the valid and

66

legally binding obligation of the undersigned enforceable in accordance with its terms have been done and performed and have occurred in due and strict compliance with the CONTRACT and applicable law.

The payment by the undersigned under this Guarantee shall be made forthwith upon receipt by us of written demand from you including a statement that the BUYER is in default of payment of the amounts that were due under the CONTRACT, without requesting you to take any or further procedure or step against the BUYER.

This Performance Guarantee shall become effective when the CONTRACT comes into effect according to its terms, and terminate upon payment of the DELIVERY INSTALMENT by the BUYER.

This Guarantee is governed by the laws of England and any dispute arising out of this guarantee may be referred to the non-exclusive jurisdiction of the Courts of England.

Yours faithfully,

For and on behalf of Quintana Maritime Limited

/s/ Stamatis Molaris
Name :	Stamatis Molaris
Title :	Attorney in Fact

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EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Stamatis V. Molaris, certify that:

1) I have reviewed this report on Form 10-Q of Quintana Maritime Limited.

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions);

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have significant role in the registrant’s internal control over financial reporting.

By:	/s/ Stamatis V. Molaris
	Stamatis V. Molaris
	Chief Executive Officer
	(Principal Executive Officer)

Date: August 9, 2007

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Paul J. Cornell, certify that:

1) I have reviewed this report on Form 10-Q of Quintana Maritime Limited.

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions);

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have significant role in the registrant’s internal control over financial reporting.

By:	/s/ Paul J. Cornell
	Paul J. Cornell
	Chief Financial Officer and Treasurer
	(Principal Financial and Accounting Officer)

Date: August 9, 2007

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF

CHIEF EXECUTIVE OFFICER

OF QUINTANA MARITIME LIMITED

PURSUANT TO 18 U.S.C. § 1350

In connection with the accompanying report on Form 10-Q for the three months ended June 30, 2007 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stamatis V. Molaris, Chief Executive Officer of Quintana Maritime Limited (the “Company”), hereby certify, to my knowledge, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) as applicable, of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Stamatis V. Molaris
	Stamatis V. Molaris
	Chief Executive Officer
	(Principal Executive Officer)

Date: August 9, 2007

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF

CHIEF FINANCIAL OFFICER

OF QUINTANA MARITIME LIMITED

PURSUANT TO 18 U.S.C. § 1350

In connection with the accompanying report on Form 10-Q for the three months ended June 30, 2007 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Paul J. Cornell, Chief Financial Officer of Quintana Maritime Limited (the “Company”), hereby certify, to my knowledge, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Paul J. Cornell
	Paul J. Cornell
	Chief Financial Officer
	(Principal Financial Officer)

Date: August 9, 2007