DRYSHIPS
INC.
Common
Stock
($.01
par value)
ATM EQUITY OFFERINGSM
SALES
AGREEMENT
January
28, 2009
MERRILL
LYNCH & CO.
Merrill
Lynch, Pierce, Fenner & Smith
Incorporated
4
World Financial Center
New
York, New York 10080
Ladies
and Gentlemen:
DryShips
Inc., a Marshall Islands corporation (the “Company”), proposes,
subject to the terms and conditions stated herein, to issue and sell from time
to time through Merrill Lynch, Pierce, Fenner & Smith Incorporated, as sales
agent (the “Agent”), shares (the
“Shares”) of the Company’s common
stock, $.01 par value (the “Common Stock”),
having an aggregate offering price of up to $500,000,000 on the terms set forth
in Section 2 of this ATM Equity OfferingSM Sales
Agreement (the “Agreement”).
Section
1. Representations and
Warranties. The Company represents and warrants to the Agent
that as of the date of this Agreement, any applicable Registration Statement
Amendment Date (as defined in Section 3 below), each Company Periodic Report
Date (as defined in Section 3 below), each Applicable Time (as defined in
Section 1(a) below) and each Settlement Date (as defined in Section 2
below):
(a) Compliance with Registration
Requirements. The Company is a “foreign private issuer” as
defined in Rule 405 under the Securities Act of 1933, as amended (the “1933 Act”), and has
filed with the Securities and Exchange Commission (the “Commission”) an
“automatic shelf registration statement” as defined in Rule 405 under the 1933
Act on Form F-3 (File No. 333-146540), in respect of the Company’s Common Stock
(including the Shares) (collectively, the “Securities”) not
earlier than three years prior to the date hereof; such registration statement,
and the post-effective amendment thereto which was filed with the Commission on
October 20, 2008, became effective on filing; and no stop order suspending the
effectiveness of such registration statement or any part thereof has been issued
and no proceeding for that purpose has been initiated or, to the knowledge of
the Company, threatened by the Commission, and no notice of objection of the
Commission to the use of such form of registration statement or the
post-effective amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act
has been received by the Company (the base prospectus filed as part of such
registration statement, in the form in which it has most recently been filed
with the Commission on or prior to the date of this Agreement, is hereinafter
called the “Basic
Prospectus”; the various parts of such registration statement, excluding
any Form T-1 but including all exhibits thereto and any prospectus supplement
relating to the Shares that is filed with the Commission and deemed by virtue of
Rule 430B to be part of such registration statement, each as amended at the time
such part of the registration statement became effective, are hereinafter
collectively called the “Registration
Statement”; the prospectus supplement specifically relating to the Shares
prepared and filed with the Commission pursuant to Rule 424(b) under the 1933
Act is hereinafter called the “Prospectus
Supplement”; the Basic Prospectus, as amended and supplemented by the
Prospectus Supplement, is hereinafter called the “Prospectus”; any
reference herein to the Basic Prospectus, the Prospectus Supplement or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 6 of Form F-3 under the 1933 Act; any
reference to any amendment or supplement to the Basic Prospectus, the Prospectus
Supplement or the Prospectus shall be deemed to refer to and include any
post-effective amendment to the Registration Statement, any prospectus
supplement relating to the Shares filed with the Commission pursuant to Rule
424(b) under the 1933 Act and any documents filed under the Securities Exchange
Act of 1934, as amended (the “1934 Act”), and
incorporated therein, in each case after the date of the Basic Prospectus, the
Prospectus Supplement or the Prospectus, as the case may be; any reference to
any amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the 1934 Act after the effective date of the Registration Statement
that is incorporated by reference in the Registration Statement; and any “issuer
free writing prospectus” as defined in Rule 433 under the 1933 Act relating to
the Shares is hereinafter called an “Issuer Free Writing
Prospectus”).
No
order preventing or suspending the use of the Basic Prospectus, the Prospectus
Supplement, the Prospectus or any Issuer Free Writing Prospectus has been issued
by the Commission, and the Basic Prospectus and the Prospectus Supplement, at
the time of filing thereof, conformed in all material respects to the
requirements of the 1933 Act and the rules and regulations of the Commission
thereunder (the “1933
Act Regulations”) and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
For
the purposes of this Agreement, the “Applicable Time”
means, with respect to any Shares, the time of sale of such Shares pursuant to
this Agreement; the Prospectus and any applicable Issuer Free Writing
Prospectus(es) issued at or prior to such Applicable Time, taken together
(collectively, and, with respect to any Shares, together with the public
offering price of such Shares, the “General Disclosure
Package”) as of each Applicable Time and each Settlement Date, will not
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and any applicable
Issuer Free Writing Prospectus will not conflict with the information contained
in the Registration Statement, the Prospectus Supplement or the Prospectus and
each such Issuer Free Writing Prospectus, as supplemented by and taken together
with the General Disclosure Package as of such Applicable Time, will not include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) Incorporation of Documents
by Reference. The documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
complied in all material respects with the requirements of the 1934 Act and the
1934 Act Regulations, and, when read together with the other information in the
Prospectus, (a) at the time the Registration Statement became effective, (b) at
the time the Prospectus was issued and (c) on the date of this Agreement, did
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.
(c) Independent
Accountants. Each of Ernst & Young (Hellas), which has
audited the consolidated balance sheets of the Company as of December 31, 2006
and 2005 and the consolidated statements of income, stockholders’ equity, and
cash flows for the year ended October 31, 2004, for the two-month period
ended December 31, 2004, and for each of the two years in the period
ended December 31, 2006 which are included in or incorporated by reference in
the Registration Statement, and Deloitte, Hadjipavlou Sofianos & Cambanis
S.A., which has audited the consolidated balance sheets of the Company as
of December 31, 2007 and the consolidated statements of income,
stockholders’ equity, and cash flows for the year ended December 31, 2007, which
are included in or incorporated by reference in the Registration Statement, is a
registered independent public accounting firm as required by the 1933 Act and
the 1933 Act Regulations.
(d) Financial
Statements. The financial statements included or incorporated
by reference in the Registration Statement, the General Disclosure Package and
the Prospectus, together with the related schedules and notes, present fairly
the financial position of the Company and its consolidated Subsidiaries (as
defined in Section 1(g) below) at the dates indicated and the statement of
operations, stockholders’ equity and cash flows of the Company and its
consolidated Subsidiaries for the periods specified; said financial statements
have been prepared in conformity with generally accepted accounting principles
(“GAAP”)
applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, present fairly in accordance with GAAP the
information required to be stated therein. The selected financial
data and the summary financial information included in the Prospectus present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included or
incorporated by reference in the Registration Statement.
(e) No Material Adverse Change
in Business. Since the respective dates as of which
information is given in the Registration Statement, the General Disclosure
Package or the Prospectus, except as otherwise stated therein, (A) there
has been no material adverse change in the condition,
financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (a “Material Adverse Effect”),
(B) there have been no transactions entered into by the Company or any of
its Subsidiaries, other than those in the ordinary course of business, which are
material with respect to the Company and its Subsidiaries considered as one
enterprise, and (C) except for regular quarterly dividends with
respect to Common Stock in amounts per share that are consistent with past
practice, there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock.
(f) Good Standing of the
Company. The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its organization and has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under this Agreement; and the Company is
duly qualified as a foreign corporation to transact business and is in good
standing in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or to be in good standing would
not result in a Material Adverse Effect.
(g) Good Standing of
Subsidiaries. Each subsidiary of the Company (each a “Subsidiary” and,
collectively, the “Subsidiaries”) has
been duly organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify or
to be in good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued and
outstanding capital stock of each such Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the Company,
directly or through another Subsidiary free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding
shares of capital stock of any Subsidiary was issued in violation of the
preemptive or similar rights, if any, of any securityholder of such
Subsidiary. The only active Subsidiaries of the Company are listed on
Schedule I hereto.
(h) Capitalization. The
authorized, issued and outstanding capital stock of the Company is as set forth
in the Prospectus under the caption “Capitalization” (except for subsequent
issuances, if any, pursuant to this Agreement, pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectus or pursuant
to the exercise of convertible securities or options referred to in the
Prospectus). The shares of issued and outstanding Common Stock have
been duly authorized and validly issued and are fully paid and non-assessable;
none of the outstanding shares of capital stock was issued in violation of the
preemptive or other similar rights, if any, of any securityholder of the
Company. The Company’s Common Stock has been registered pursuant to
Section 12(b) of the 1934 Act and is listed on the Nasdaq Global Select Market
(“Nasdaq”), and
the Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock from Nasdaq, nor has the
Company received any notification that the Commission or Nasdaq is contemplating
terminating such registration or listing.
(i) Authorization of
Agreement. This Agreement has been duly authorized, executed
and delivered by the Company.
(j) Authorization and
Description of Securities. The Shares have been duly
authorized and reserved for issuance and sale pursuant to this Agreement and,
when issued and delivered by the Company pursuant to this Agreement against
payment of the consideration set forth herein, will be validly issued and fully
paid and non-assessable; the Common Stock conforms to all statements relating
thereto contained in the Prospectus and such description conforms to the rights
set forth in the instruments defining the same; no holder of the Shares will be
subject to personal liability by reason of being such a holder; and the issuance
of the Shares is not subject to any preemptive or other similar rights of any
securityholder of the Company.
(k) Absence of Defaults and
Conflicts. Neither the Company nor any of its Subsidiaries is
in violation of its charter or by-laws or, except as disclosed in the
Prospectus, in default in the performance or observance of any
obligation, agreement, covenant or condition contained in
any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or any subsidiary is subject
(collectively, “Agreements and Instruments”) except for such defaults that would
not result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein and in the Registration Statement (including the issuance
and sale of the Shares and the use of the proceeds from the sale of the Shares
as described in the Prospectus under the caption “Use of Proceeds”) and
compliance by the Company with its obligations hereunder have been duly
authorized by all necessary corporate action and do not and will not, whether
with or without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any subsidiary
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches, defaults or Repayment Events or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action result in
any violation of the provisions of the charter or by-laws of the Company or any
Subsidiary or any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any Subsidiary or any of
their assets, properties or operations. As used herein, a “Repayment
Event” means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder’s behalf) the right under the terms of such note, debenture or
other evidence of indebtedness to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any
subsidiary.
(l) Absence of Labor
Dispute. No labor dispute with the employees of the Company or
any Subsidiary exists or, to the knowledge of the Company, is imminent, and the
Company is not aware of any existing or imminent labor disturbance by the
employees of any of its or any Subsidiary’s principal suppliers, manufacturers,
customers or contractors, which, in either case, would result in a Material
Adverse Effect.
(m) Absence of
Proceedings. There is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or body,
U.S. domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any Subsidiary, which is
required to be disclosed in the Registration Statement (other than as disclosed
therein), or which might result in a Material Adverse Effect, or which might
materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder; the aggregate of all
pending legal or governmental proceedings to which the Company or any Subsidiary
is a party or of which any of their respective property or assets is the subject
which are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, could not result in a Material
Adverse Effect.
(n) Accuracy of
Exhibits. There are no contracts or documents which are
required to be described in the Registration Statement, the Prospectus or the
documents incorporated by reference therein or to be filed as exhibits thereto
which have not been so described and filed as required.
(o) Possession of Intellectual
Property. The Company and its Subsidiaries own or possess, or
can acquire on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other intellectual
property (collectively, “Intellectual
Property”) necessary to carry on the business now operated by them, and
neither the Company nor any of its Subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted rights of
others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or inadequate
to protect the interest of the Company or any of its Subsidiaries therein, and
which infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
(p) Absence of Further
Requirements. No filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of, any U.S.
domestic or foreign court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations hereunder, in
connection with the offering, issuance or sale of the Securities hereunder or
the consummation of the transactions
contemplated
by this Agreement, except such as have been already obtained or as may be
required under the 1933 Act or the 1933 Act Regulations or state securities
laws.
(q) Absence of
Manipulation. Neither the Company nor any affiliate of the
Company has taken, nor will the Company or any affiliate take, directly or
indirectly, any action which is designed to or which has constituted or which
would be expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Shares.
(r) Possession of Licenses and
Permits. The Company and its Subsidiaries possess all such
permits, licenses, approvals, consents and other authorizations (collectively,
“Governmental
Licenses”) issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies as are necessary to conduct the business now
operated by them, except where the failure to so possess would not, singly or in
the aggregate, result in a Material Adverse Effect; the Company and its
Subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not, singly
or in the aggregate, result in a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except where the
invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not, singly or in the aggregate,
result in a Material Adverse Effect; and neither the Company nor any of its
Subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Effect.
(s) Title to
Property. Neither the Company nor any of its Subsidiaries owns
any interest in real property. The Company and its Subsidiaries have
good title to all other properties owned by them, in each case, free and clear
of all mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described in the Prospectus or
(b) do not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be made of such
property by the Company or any of its Subsidiaries; and all of the leases,
subleases and charterparties material to the business of the Company and its
Subsidiaries, and under which the Company or any of its Subsidiaries holds
properties described in the Prospectus, are in full force and effect, and
neither the Company nor any Subsidiary has any notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of the Company
or any Subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such Subsidiary to the
continued possession of the leased, subleased or chartered property under any
such lease, sublease or charterparty.
(t) Investment Company
Act. The Company is not required, and upon the issuance of the
Shares as herein contemplated and the application of the net proceeds therefrom
as described in the Prospectus will not be required, to register as an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended (the “1940
Act”).
(u) Environmental
Laws. Except as described in the Registration Statement and
except as would not, singly or in the aggregate, result in a Material Adverse
Effect, (A) neither the Company nor any of its Subsidiaries is in violation of
any federal, state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative
interpretation thereof, including, without limitation, (i) the applicable
regulations and standards adopted by the International Maritime Organization,
and (ii) any judicial or administrative order, consent, decree or judgment,
relating to pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products, asbestos-containing materials or mold
(collectively, “Hazardous Materials”)
or to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”),
(B) the Company and its Subsidiaries have all permits, licenses, authorizations
and approvals required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or violation, investigation or
proceedings relating to any Environmental Law against the Company or any of its
Subsidiaries and (D) there are no events or circumstances that would reasonably
be expected to form the basis of an order for clean-up or remediation, or an
action, suit or proceeding by any
private
party or governmental body or agency, against or affecting the Company or any of
its Subsidiaries relating to Hazardous Materials or any Environmental Laws.
(v) Registration
Rights. There are no persons with registrations rights or
other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the 1933
Act.
(w) Accounting Controls and
Disclosure Controls. (A) The Company and each of its
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in accordance
with management’s general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain accountability for assets; (ii) access to
assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. Except as described in the Prospectus,
since the end of the Company’s most recent audited fiscal year, there has been
(1) no material weakness in the Company’s internal control over financial
reporting (whether or not remediated) and (2) no change in the Company’s
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over
financial reporting.
(B) The
Company and its consolidated Subsidiaries employ disclosure controls and
procedures that are designed to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the 1934 Act is
recorded, processed, summarized and reported, within the time periods specified
in the Commission’s rules and forms, and is accumulated and communicated to the
Company’s management, including its principal executive officer or officers and
principal financial officer or officers, as appropriate, to allow timely
decisions regarding disclosure.
(x) Well-Known Seasoned
Issuer. (A)(i) At the time of filing the
Registration Statement, (ii) at the time of the most recent amendment thereto
for the purposes of complying with Section 10(a)(3) of the 1933 Act (whether
such amendment was by post-effective amendment, incorporated report filed
pursuant to Section 13 or 15(d) of the 1934 Act or form of prospectus), and
(iii) at the time the Company or any person acting on its behalf (within the
meaning, for this clause only, of Rule 163(c) under the 1933 Act) made any offer
relating to the Shares in reliance on the exemption of Rule 163 under the 1933
Act, the Company was a “well-known seasoned issuer” as defined in Rule 405 under
the 1933 Act; and (B) at the earliest time after the filing of the Registration
Statement that the Company or another offering participant made a bona fide
offer (within the meaning of Rule 164(h)(2) under the 1933 Act) of the Shares,
the Company was not an “ineligible issuer” as defined in Rule 405 under the 1933
Act.
(y) No
Commissions. Neither the Company nor any of its Subsidiaries
is a party to any contract, agreement or understanding with any person (other
than as contemplated by this Agreement) that would give rise to a valid claim
against the Company or any of its Subsidiaries or the Agent for a brokerage
commission, finder’s fee or like payment in connection with the offering and
sale of the Shares.
(z) Actively-Traded
Security. The Common Stock is an “actively-traded security”
exempted from the requirements of Rule 101 of Regulation M under the 1934 Act by
subsection (c)(1) of such rule.
(aa) Deemed
Representation. Any certificate signed by any officer of the
Company delivered to the Agent or to counsel for the Agent pursuant to or in
connection with this Agreement shall be deemed a representation and warranty by
the Company to the Agent as to the matters covered thereby as of the date or
dates indicated in such certificate.
(bb) Compliance with the
Sarbanes-Oxley Act. There is and has been no failure on the
part of the Company or any of the Company’s directors or officers, in their
capacities as such, to comply in all material respects with any provision of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith that are applicable to the Company (the “Sarbanes-Oxley Act”),
including Section 402 related to loans and Sections 302 and 906 related to
certifications.
(cc)
Payment of
Taxes. All United States federal income tax returns of the
Company and its Subsidiaries required by law to be filed have been filed and all
taxes shown by such returns or otherwise assessed, which are due and payable,
have been paid, except assessments against which appeals have been or will be
promptly taken and as to which adequate reserves have been
provided. The United States federal income tax returns of the Company
through the fiscal year ended December 31, 2007 have been filed and no
assessment in connection therewith has been made against the Company. The
Company and its Subsidiaries have filed all other tax returns that are required
to have been filed by them pursuant to applicable foreign, state, local or other
law except insofar as the failure to file such returns would not result in a
Material Adverse Effect, and has paid all taxes due pursuant to such returns or
pursuant to any assessment received by the Company and its Subsidiaries, except
for such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided. The charges, accruals and
reserves on the books of the Company in respect of any income and corporation
tax liability for any years not finally determined are adequate to meet any
assessments or re-assessments for additional income tax for any years not
finally determined, except to the extent of any inadequacy that would not result
in a Material Adverse Effect.
(dd) PFIC Status.
The Company believes that it did not qualify as a “passive foreign investment
company” (“PFIC”) within the
meaning of Section 1296 of the United States Internal Revenue Code of 1986, as
amended, for its most recently completed taxable year, if any, and believes that
it is not likely to qualify as a PFIC in its current or a subsequent taxable
year.
(ee) Insurance. The
Company and its Subsidiaries carry or are entitled to the benefits of insurance
in such amounts and covering such risks as is generally maintained by companies
of established repute engaged in the same or similar business, and all such
insurance is in full force and effect. The Company has no reason to
believe that any insurer providing coverage to the Company or a Subsidiary is
not financially sound or that it or any subsidiary will not be able (A) to
renew its existing insurance coverage as and when such policies expire, or
(B) to obtain comparable coverage from similar institutions as may be
necessary or appropriate to conduct its business as now conducted and at a cost
that would not result in a Material Adverse Change. Neither of the
Company nor any subsidiary has been denied any insurance coverage which it has
sought or for which it has applied.
(ff)
Statistical and
Market-Related Data. Any statistical and market-related data
included in the Registration Statement and the Prospectus are based on or
derived from sources that the Company believes to be reliable and
accurate.
(gg) Foreign Corrupt Practices
Act. Neither the Company nor any of
its Subsidiaries, to the knowledge of the Company, any director,
officer, agent, employee, affiliate or other person acting on behalf of the
Company or any of its Subsidiaries is aware of or has taken any action, directly
or indirectly, that would result in a violation by such persons of the Foreign
Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (the “FCPA”), including,
without limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA and the Company and its Subsidiaries, and,
to the knowledge of the Company, its and their affiliates have conducted their
businesses in compliance with the FCPA and have instituted and maintain policies
and procedures designed to ensure, and which are reasonably expected to continue
to ensure, continued compliance therewith.
(hh)
Money Laundering
Laws. The operations of the Company and its Subsidiaries, are
and have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by
any governmental agency (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
with respect to the Money Laundering Laws is pending or, to the best knowledge
of the Company, threatened.
(ii) OFAC. Neither
the Company nor any its Subsidiaries nor to the knowledge of the Company, any
director, officer, agent, employee, affiliate or person acting on behalf of the
Company or any of its Subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the
Company will not directly or indirectly use the proceeds of the offering, or
lend, contribute or otherwise make available such proceeds to any Subsidiary,
joint venture partner or other person or entity, for the purpose of financing
the activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(jj) Vessels. (A) All
of the vessels described in the Registration Statement, the General Disclosure
Package and the Prospectus, except for the vessels which the Company or a
Subsidiary has contracted to acquire or to have constructed, are owned directly
by Subsidiaries; each of the vessels listed on Schedule 2 hereto and specified
as being owned (the “Owned Vessels”) by a
Subsidiary has been duly registered as a vessel under the laws and regulations
and flag of the jurisdiction set forth opposite its name on Schedule 2 in
the sole ownership of the Subsidiary set forth opposite its name on
Schedule 2 and no other action is necessary to establish and perfect such
entity’s title to and interest in such vessel as against any charterer or third
party; each such Subsidiary has good title to the applicable Owned Vessel, free
and clear of all mortgages, pledges, liens, security interests and claims and
all defects of the title of record except for those liens arising under Credit
Facilities as disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus and such other encumbrances which would not, in the
aggregate, result in a Material Adverse Effect; and each such Owned Vessel is in
good standing with respect to the payment of past and current taxes, fees and
other amounts payable under the laws of the jurisdiction where it is registered
as would affect its registry with the ship registry of such jurisdiction except
for failures to be in good standing which would not, in the aggregate, result in
a Material Adverse Effect. Upon delivery to and acceptance by the
relevant Subsidiary under the memoranda of agreement or the newbuilding
contracts described in the Registration Statement, General Disclosure Package
and Prospectus, each of the vessels listed on Schedule 2 hereto and
specified as being under contract (the “Contracted Vessels”)
for delivery to and acceptance by a Subsidiary will be duly registered as a
vessel under the laws of the jurisdiction set forth opposite its name on
Schedule 2 in the sole ownership of the Subsidiary set forth opposite its
name on Schedule 2, on such date, each such Subsidiary will have good title
to the applicable Contracted Vessel, free and clear of all mortgages, pledges,
liens, security interests, claims and all defects of the title of record, except
for any mortgages, pledges, liens, security interests or claims arising from any
financing arrangement which the Company or a Subsidiary may enter to finance the
acquisition of the Contracted Vessel and except such encumbrances which would
not, in the aggregate, result in a Material Adverse Effect; and each such
Contracted Vessel will be in good standing with respect to the payment of past
and current taxes, fees and other amounts payable under the laws of the
jurisdiction where it is registered as would affect its registry with the ship
registry of such jurisdiction.
(B) Each
Owned Vessel is, and the Company will use reasonable commercial efforts to
ensure that each Contracted Vessel will be, operated in compliance with the
rules, codes of practice, conventions, protocols, guidelines or similar
requirements or restrictions imposed, published or promulgated by any
Governmental Authority, classification society or insurer applicable to the
respective vessel (collectively, “Maritime Guidelines”)
and all applicable international, national, state and local conventions, laws,
regulations, orders, Governmental Licenses and other requirements (including,
without limitation, all Environmental Laws), except where such failure to be in
compliance would not have, individually or in the aggregate, a Material Adverse
Effect. The Company and each applicable subsidiary are, and with
respect to the Contracted Vessels will be, qualified to own or lease, as the
case may be, and operate such vessels under all applicable international,
national, state and local conventions, laws, regulations, orders, Governmental
Licenses and other requirements (including, without limitation, all
Environmental Laws) and Maritime Guidelines, including the laws, regulations and
orders of each such vessel’s flag state, except where such failure to be so
qualified would not have, individually or in the aggregate, a Material Adverse
Effect.
(C)
Each
Owned Vessel is, and each Contracted Vessel will be, classed by any of Lloyd’s
Register of Shipping, American Bureau of Shipping, Det Norske Veritas or a
classification society which is a full member of the International Association
of Classification Societies and each Owned Vessel is, and the Company will use
reasonable commercial efforts to ensure each Contracted Vessel will be, in class
with valid class and trading certificates, without any overdue
recommendations.
(kk) Issuer Taxes.
There are no documentary, stamp or other issuance or transfer taxes or
duties or similar fees or charges under U.S. federal law or the laws of any U.S.
state, the Republic of Greece or the Republic of the Marshall Islands (assuming
that the Agent is not a citizen or resident of the Republic of Greece or the
Republic of the Marshall Islands or is carrying on business or conducting
transactions in the Republic of
Greece
or the Republic of the Marshall Islands), or any political subdivision of any
thereof, required to be paid in connection with the execution and delivery of
this Agreement or the sale and delivery of Shares pursuant hereto.
Section
2. Sale and Delivery of
Shares.
(a) Subject
to the terms and conditions set forth herein, the Company agrees to issue and
sell through the Agent acting as sales agent from time to time, and the Agent
agrees to use its commercially reasonable efforts to sell as sales agent for the
Company, the Shares. Sales of the Shares, if any, through the Agent
acting as sales agent will be made by means of ordinary brokers’ transactions on
Nasdaq or otherwise at market prices prevailing at the time of sale, at prices
related to prevailing market prices or at negotiated prices.
(b) The
Shares are to be sold on a daily basis or otherwise as shall be agreed to by the
Company and the Agent on any trading day (other than a day on which Nasdaq is
scheduled to close prior to its regular weekday closing time, each, a “Trading Day”) that
the Company has satisfied its obligations under Section 6 of this Agreement and
that the Company has instructed the Agent to make such sales. On any
Trading Day, the Company may instruct the Agent by telephone (confirmed promptly
by telecopy or email, which confirmation will be promptly acknowledged by the
Agent) as to the maximum number of Shares to be sold by the Agent on such day
(in any event not in excess of the number available for issuance under the
Prospectus and the currently effective Registration Statement) and the minimum
price per Share at which such Shares may be sold. Subject to the
terms and conditions hereof, the Agent shall use its commercially reasonable
efforts to sell as sales agent all of the Shares so designated by the
Company. The Company and the Agent each acknowledge and agree that
(A) there can be no assurance that the Agent will be successful in selling the
Shares, and (B) the Agent will incur no liability or obligation to the Company
or any other person or entity if it does not sell Shares for any reason other
than a failure by the Agent to use its commercially reasonable efforts
consistent with its normal trading and sales practices and applicable law and
regulations to sell such Shares as required by this Agreement.
(c) Notwithstanding
the foregoing, the Company shall not authorize the issuance and sale of, and the
Agent as sales agent shall not be obligated to use its commercially reasonable
efforts to sell, any Shares (i) at a price lower than the minimum price therefor
authorized from time to time, or (ii) in a number in excess of the number of
Shares authorized from time to time to be issued and sold under this Agreement,
in each case, by the Company’s board of directors, or a duly authorized
committee thereof, and notified to the Agent in writing. In addition,
the Company or the Agent may, upon notice to the other party hereto by telephone
(confirmed promptly by telecopy or email, which confirmation will be promptly
acknowledged), suspend the offering of the Shares for any reason and at any
time; provided,
however, that
such suspension or termination shall not affect or impair the parties’
respective obligations with respect to the Shares sold hereunder prior to the
giving of such notice.
(d) The
gross sales price of any Shares sold pursuant to this Agreement by the Agent
acting as sales agent of the Company shall be the market price prevailing at the
time of sale for shares of the Company’s Common Stock sold by the Agent on
Nasdaq or otherwise, at prices relating to prevailing market prices or at
negotiated prices. The compensation payable to the Agent for sales of
Shares shall be equal to 2.5% of the gross sales price of the Shares for amounts
of Shares sold pursuant to this Agreement. The remaining proceeds,
after further deduction for any transaction fees imposed by any governmental,
regulatory or self-regulatory organization in respect of such sales, shall
constitute the net proceeds to the Company for such Shares (the “Net
Proceeds”). The Agent shall notify the Company as promptly as
practicable if any deduction referenced in the preceding sentence will be
required.
(e) The
Agent shall provide written confirmation to the Company following the close of
trading on Nasdaq each day in which Shares are sold under this Agreement setting
forth the number of Shares sold on such day, the aggregate gross sales proceeds
of the Shares, the Net Proceeds to the Company and the compensation payable by
the Company to the Agent with respect to such sales.
(f) Under
no circumstances shall the aggregate offering price or number, as the case may
be, of Shares sold pursuant to this Agreement exceed the aggregate offering
price or number, as the case may be, of Shares of Common Stock (i) set forth in
the preamble paragraph of this Agreement, (ii) available for issuance under the
Prospectus and the then currently effective Registration Statement or (iii)
authorized from time to time to be issued and sold under this Agreement under
the Company’s then effective Articles of Incorporation and the Company’s board
of directors,
or
a duly authorized committee thereof, and notified to the Agent in writing. In
addition, under no circumstances shall any Shares be sold at a price lower than
the minimum price therefor authorized from time to time by the Company’s board
of directors, or a duly authorized committee thereof, and notified to the Agent
in writing.
(g) If
either party believes that the exemptive provisions set forth in Rule 101(c)(1)
of Regulation M under the 1934 Act (applicable to securities with an average
daily trading volume of $1,000,000 that are issued by an issuer whose common
equity securities have a public float value of at least $150,000,000) are not
satisfied with respect to the Company or the Shares, it shall promptly notify
the other party and sales of Shares under this Agreement shall be suspended
until that or other exemptive provisions have been satisfied in the judgment of
each party.
(h) Settlement
for sales of the Shares pursuant to this Section 2 will occur on the third
business day that is also a Trading Day following the trade date on which such
sales are made, unless another date shall be agreed to by the Company and the
Agent (each such day, a “Settlement
Date”). On each Settlement Date, the Shares sold through the
Agent for settlement on such date shall be delivered by the Company to the Agent
against payment of the Net Proceeds from the sale of such
Shares. Settlement for all Shares shall be effected by book-entry
delivery of Shares to the Agent’s account at The Depository Trust Company
against payments by the Agent of the Net Proceeds from the sale of such Shares
in same day funds delivered to an account designated by the
Company. If the Company shall default on its obligation to deliver
Shares on any Settlement Date, the Company shall (i) indemnify and hold the
Agent harmless against any loss, claim or damage arising from or as a result of
such default by the Company and (ii) pay the Agent any commission to which it
would otherwise be entitled absent such default. If the Agent
breaches this Agreement by failing to deliver the applicable Net Proceeds on any
Settlement Date for Shares delivered by the Company, the Agent will pay the
Company interest based on the effective overnight federal funds rate until such
proceeds, together with such interest, have been fully paid.
(i) Notwithstanding
any other provision of this Agreement, the Company and the Agent agree that no
sales of Shares shall take place, and the Company shall not request the sale of
any Shares that would be sold, and the Agent shall not be obligated to sell,
during any period in which the Company’s insider trading policy, as it exists on
the date of the Agreement, would prohibit the purchases or sales of the
Company’s Common Stock by its officers or directors, or during any other period
in which the Company is, or could be deemed to be, in possession of material
non-public information; provided that, unless
otherwise agreed between the Company and the Agent, for purposes of this
paragraph (i) such period shall be deemed to end on the second trading day
following the date on which the Company’s next subsequent Annual Report on Form
20-F or Report on Form 6-K containing interim financial statements (which are
represented by reference into the registration statement), as the case may be,
is filed with the Commission.
(j) At
each Applicable Time, Settlement Date, Registration Amendment Date and each
Company Periodic Report Date, the Company shall be deemed to have affirmed each
representation and warranty contained in this Agreement. Any
obligation of the Agent to use its commercially reasonable efforts to sell the
Shares on behalf of the Company as sales agent shall be subject to the
continuing accuracy of the representations and warranties of the Company herein,
to the performance by the Company of its obligations hereunder and to the
continuing satisfaction of the additional conditions specified in Section 6 of
this Agreement.
Section
3. Covenants. The
Company agrees with the Agent:
(a) During
any period when the delivery of a prospectus is required in connection with the
offering or sale of Shares (whether physically or through compliance with Rule
153 or 172, or in lieu thereof, a notice referred to in Rule 173(a)
under the 1933 Act), (i) to make no further amendment or any supplement to the
Registration Statement or the Prospectus prior to any Settlement Date which
shall be disapproved by the Agent promptly after reasonable notice thereof and
to advise the Agent, promptly after it receives notice thereof, of the time when
any amendment to the Registration Statement has been filed or becomes effective
or any amendment or supplement to the Prospectus has been filed and to furnish
the Agent with copies thereof, (ii) to file promptly all other
material required to be filed by the Company with the Commission pursuant to
Rule 433(d) under the 1933 Act, (iii) to file promptly all reports required to
be filed by the Company with the Commission pursuant to Section 13(a), 13(c) or
15(d) of the 1934 Act, (iv) to advise the Agent, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of any
order
preventing
or suspending the use of the Prospectus or other prospectus in respect of the
Shares, of any notice of objection of the Commission to the use of the form of
the Registration Statement or any post-effective amendment thereto pursuant to
Rule 401(g)(2) under the 1933 Act, of the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the form of the Registration
Statement or the Prospectus or for additional information, and (v) in the event
of the issuance of any such stop order or of any such order preventing or
suspending the use of the Prospectus in respect of the Shares or suspending any
such qualification, to promptly use its commercially reasonable efforts to
obtain the withdrawal of such order; and in the event of any such issuance of a
notice of objection, promptly to take such reasonable steps as may be necessary
to permit offers and sales of the Shares by the Agent, which may include,
without limitation, amending the Registration Statement or filing a new
registration statement, at the Company’s expense (references in this Agreement
to the Registration Statement shall include any such amendment or new
registration statement).
(b) Promptly
from time to time to take such action as the Agent may reasonably request to
qualify the Shares for offering and sale under the securities laws of such
jurisdictions as the Agent may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the sale of the Shares, provided that in
connection therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction; and to promptly advise the Agent of the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Shares for offer or sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose.
(c) During
any period when the delivery of a prospectus is required (whether physically or
through compliance with Rules 153 or 172, or in lieu thereof, a notice referred
to in Rule 173(a) under the 1933 Act) in connection with the offering or sale of
Shares, the Company will make available to the Agent, as soon as practicable
after the execution of this Agreement, and thereafter from time to time furnish
to the Agent, copies of the most recent Prospectus in such quantities and at
such locations as the Agent may reasonably request for the purposes contemplated
by the 1933 Act. During any period when the delivery of a prospectus
is required (whether physically or through compliance with Rules 153 or 172, or
in lieu thereof, a notice referred to in Rule 173(a) under the 1933 Act) in
connection with the offering or sale of Shares, and if at such time any event
shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus or to file under
the 1934 Act any document incorporated by reference in the Prospectus in order
to comply with the 1933 Act or the 1934 Act, to notify the Agent and to file
such document and to prepare and furnish without charge to the Agent as many
written and electronic copies as the Agent may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance.
(d) To
make generally available to its securityholders as soon as practicable, but in
any event not later than sixteen months after the effective date of the
Registration Statement (as defined in Rule 158(c) under the 1933 Act), an
earnings statement of the Company and its Subsidiaries (which need not be
audited) complying with Section 11(a) of the 1933 Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158).
(e) To
pay the required Commission filing fees relating to the Shares within the time
required by Rule 456(b)(1) under the 1933 Act without regard to the proviso
therein and otherwise in accordance with Rules 456(b) and 457(r) under the 1933
Act.
(f) To
use the Net Proceeds received by it from the sale of the Shares pursuant to this
Agreement in the manner specified in the Disclosure Package.
(g) In
connection with the offering and sale of the Shares, the Company will file with
Nasdaq all documents and notices, and make all certifications, required by
Nasdaq of companies that have securities that are listed on Nasdaq, and will use
it commercially reasonable efforts to maintain such listing.
(h) To
not take, directly or indirectly, any action designed to cause or result in, or
that has constituted or might reasonably be expected to constitute, under the
1934 Act or otherwise, the stabilization or manipulation of the price of any
securities of the Company to facilitate the sale or resale of the
Shares.
(i) At
each Applicable Time, each Settlement Date, each Registration Statement
Amendment Date (as defined below), each Company Earnings Report Date (as defined
below) and each Company Periodic Report Date (as defined below), the Company
shall be deemed to have affirmed each representation, warranty, covenant and
other agreement contained in this Agreement. In each Annual Report on
Form 20-F or Report on Form 6-K (containing financial statements, supporting
schedules or other financial data and incorporated by reference into the
registration statement) filed by the Company in respect of any quarter in which
sales of Shares were made by or through the Agent under this Agreement (each
date on which any such document is filed, and any date on which an amendment to
any such document is filed, a “Company Periodic Report
Date”), the Company shall set forth with regard to such quarter the
number of Shares sold through the Agent under this Agreement, the Net Proceeds
received by the Company and the compensation paid by the Company to the Agent
with respect to sales of Shares pursuant to this Agreement.
(j) Upon
commencement of the offering of Shares under this Agreement, on February 11,
2009, promptly after each (i) date the Registration Statement or the Prospectus
shall be amended or supplemented (other than (1) by an amendment or supplement
providing solely for the determination of the terms of the Shares, (2) in
connection with the filing of a prospectus supplement that contains solely the
information set forth in Section 3(i), (3) in connection with the filing of any
reports on Form 6-K (other than any reports on Form 6-K which contain financial
statements, supporting schedules or other financial data, and are incorporated
by reference into the registration statement, or (4) by a prospectus supplement
relating to the offering of other securities (including, without limitation,
other shares of Common Stock)) (each such date, a “Registration Statement
Amendment Date”), (ii) date on which a report on Form 6-K shall be
furnished by the Company in respect of a public disclosure of material
non-public information regarding the Company’s results of operations or
financial condition for a completed quarterly or annual fiscal period (a “Company Earnings Report
Date”) and (iii) each Company Periodic Report Date, and on such other
dates as the Agent shall request subsequent to February 27, 2009, the Company
will furnish or cause to be furnished forthwith to the Agent a certificate dated
the date of effectiveness of such amendment or the date of filing with the
Commission of such supplement or other document, as the case may be, in a form
reasonably satisfactory to the Agent to the effect that the statements contained
in the certificate referred to in Section 6(g) of this Agreement which were last
furnished to the Agent are true and correct at the time of such amendment,
supplement or filing, as the case may be, as though made at and as of such time
(except that such statements shall be deemed to relate to the Registration
Statement, the Disclosure Package and the Prospectus as amended and supplemented
to such time) or, in lieu of such certificate, a certificate of the same tenor
as the certificate referred to in said Section 6(g), but modified as necessary
to relate to the Registration Statement and the Prospectus as amended and
supplemented, or to the document incorporated by reference into the Prospectus,
to the time of delivery of such certificate. As used in this paragraph, to the
extent there shall be an Applicable Time on or following the date referred to in
clause (i) or (ii) above, promptly shall be deemed to be on or prior to the next
succeeding Applicable Time.
(k) Upon
commencement of the offering of Shares under this Agreement, on February 11,
2009, promptly after each (i) Registration Statement Amendment
Date, (ii) Company Earnings Report Date, and (iii) Company Periodic Report Date,
and on such other dates as the Agent shall request subsequent to February 27,
2009, the Company will furnish or cause to be furnished to the Agent and to
counsel to the Agent the written opinion and letter of each Company Counsel or
other counsel reasonably satisfactory to the Agent, dated the date of
effectiveness of such amendment or the date of filing with the Commission of
such supplement or other document, as the case may be, in a form and substance
reasonably satisfactory to the Agent and its counsel, of the same tenor as the
opinions and letters referred to in Section 6(c) of this Agreement, but modified
as necessary to relate to the Registration Statement, the Disclosure Package and
the Prospectus as amended and supplemented, or to the document incorporated by
reference into the Prospectus, to the time of delivery of such opinion and
letter or, in lieu of such opinion and letter, counsel last furnishing such
letter to the Agent shall furnish such Agent with a letter substantially to the
effect that the Agent may rely on such last opinion and letter to the same
extent as though each were dated the date of such letter authorizing reliance
(except that statements in such last letter shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such letter authorizing
reliance).
As used in this paragraph, to the extent there shall be an Applicable Time on or
following the date referred to in clause (i) or (ii) above, promptly shall be
deemed to be on or prior to the next succeeding Applicable Time.
(l) Upon
commencement of the offering of Shares under this Agreement, on February 11,
2009, promptly after each (i) Registration Statement Amendment Date, and (ii)
Company Periodic Report Date, and on such other dates as the Agent shall request
subsequent to February 27, 2009, the Company will cause each of Deloitte,
Hadjipavlou Sofianos & Cambanis SA and Ernst & Young (Hellas), or other
independent accountants reasonably satisfactory to the Agent, to furnish to the
Agent a letter, dated the date of effectiveness of such amendment or the date of
filing of such supplement or other document with the Commission, as the case may
be, in form reasonably satisfactory to the Agent and its counsel, of the same
tenor as the letter referred to in Section 6(e) hereof, but modified as
necessary to relate to the Registration Statement, the Disclosure Package and
the Prospectus, as amended and supplemented, or to the document incorporated by
reference into the Prospectus, to the date of such letter. As used in this
paragraph, to the extent there shall be an Applicable Time on or following the
date referred to in clause (i) or (ii) above, promptly shall be deemed to be on
or prior to the next succeeding Applicable Time.
(m) The
Company consents to the Agent’s trading in the Company’s Common Stock for the
Agent’s own account and for the account of its clients at the same time as sales
of Shares occur pursuant to this Agreement.
(n) If,
to the knowledge of the Company, all filings required by Rule 424 in connection
with this offering shall not have been made or the representations in Section
1(a) shall not be true and correct on the applicable Settlement Date, the
Company will offer to any person who has agreed to purchase Shares from the
Company as the result of an offer to purchase solicited by the Agent the right
to refuse to purchase and pay for such Shares.
(o) The
Company will cooperate timely with any reasonable due diligence review conducted
by the Agent or its counsel from time to time in connection with the
transactions contemplated hereby, including, without limitation, and upon
reasonable notice providing information and making available documents and
appropriate corporate officers, during regular business hours and at the
Company’s principal offices, as the Agent may reasonably request.
(p) During
a period of 60 days from the date of this Agreement, the Company will not,
without the prior written consent of the Agent, (x) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or
file any registration statement under the 1933 Act with respect to any of the
foregoing or (y) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (x) or (y) above is to be settled by delivery of
Common Stock or such other securities, in cash or
otherwise. Notwithstanding the foregoing, if (1) during the last
17 days of the 60 day restricted period the Company issues an earnings
release or material news or a material event relating to the Company occurs or
(2) prior to the expiration of the 60 day restricted period, the
Company announces that it will release earnings results or becomes aware that
material news or a material event will occur during the 16-day period beginning
on the last day of the 60 day restricted period, the restrictions imposed in
this clause (j)(i) shall continue to apply until the expiration of the 18-day
period beginning on the issuance of the earnings release or the occurrence of
the material news or material event.
(q) Subject
to Section 3(p) of this Agreement, the Company will not, without (i) giving the
Agent at least five business days’ prior written notice specifying the nature of
the propose sale and the date of such proposed sale and (ii) the Agent’s
suspending activity under this program for such period of time as requested by
the Company or as deemed appropriate by the Agent in light of the proposed sale,
(A) offer, pledge, announce the intention to sell, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant for the sale of, lend or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Stock or securities
convertible into or exchangeable or exercisable for or repayable with Common
Stock, or file any registration statement under the 1933 Act with respect to any
of the foregoing (other than a shelf registration statement under Rule 415 under
the 1933 Act, a registration statement on Form S-8 or post-effective amendment
to the Registration Statement) or (B) enter into any swap or other agreement or
any transaction that transfers in whole or in part, directly
or
indirectly, any of the economic consequence of ownership of the Common Stock, or
any securities convertible into or exchangeable or exercisable for or repayable
with Common Stock, whether any such swap or transaction described in clause (A)
or (B) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (y)
the Shares to be offered and sold through the Agent pursuant to this Agreement,
and (z) equity incentive awards approved by the board of directors of the
Company or the compensation committee thereof or the issuance of Common Stock
upon exercise thereof.
(r) If
immediately prior to the third anniversary (the “Renewal Deadline”) of
the initial effective date of the Registration Statement, any of the Shares
remain unsold and this Agreement has not been terminated for any reason, the
Company will, prior to the Renewal Deadline file, if it has not already done so
and is eligible to do so, a new automatic shelf registration statement relating
to the Shares, in a form satisfactory to the Agent. If the Company is
no longer eligible to file an automatic shelf registration statement, the
Company will, prior to the Renewal Deadline, if it has not already done so, file
a new shelf registration statement relating to the Shares, in a form
satisfactory to the Agent, and will use its best efforts to cause such
registration statement to be declared effective within 60 days after the Renewal
Deadline. The Company will take all other action necessary or
appropriate to permit the issuance and sale of the Shares to continue as
contemplated in the expired registration statement relating to the
Shares. References in this Agreement to the Registration Statement
shall include such new automatic shelf registration statement or such new shelf
registration statement, as the case may be.
Section
4. Free Writing
Prospectus.
(a)
(i) The Company represents and agrees that
without the prior consent of the Agent, it has not made and will not make any
offer relating to the Shares (which are to be sold pursuant hereto) that would
constitute a “free writing prospectus” as defined in Rule 405 under the
1933 Act; and
(ii) the Agent represents and agrees that, without
the prior consent of the Company, it has not made and will not make any offer
relating to the Shares that would constitute a free writing prospectus required
to be filed with the Commission.
(b) The
Company has complied and will comply with the requirements of Rule 433 under the
1933 Act applicable to any Issuer Free Writing Prospectus (including any free
writing prospectus identified in Section 4(a) hereof), including timely filing
with the Commission or retention where required and legending.
Section
5. Payment of
Expenses.
(a) The
Company covenants and agrees with the Agent that the Company will pay or cause
to be paid the following: (i) the fees, disbursements and expenses of the
Company’s counsel and accountants in connection with the registration of the
Shares under the 1933 Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, the Basic
Prospectus, Prospectus Supplement, any Issuer Free Writing Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Agents; (ii) the cost of printing or producing this
Agreement, any Blue Sky and Legal Investment Memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 3(b) hereof, including the
reasonable fees and disbursements of counsel for the Agent in connection with
such qualification and in connection with the Blue Sky and Legal Investment
Surveys up to $25,000; (iv) any filing fees incident to, and the reasonable fees
and disbursements of counsel for the Agent in connection with, any required
review by Financial Industry Regulatory Authority, Inc. of the terms of the sale
of the Shares; (v) all fees and expenses in connection with listing the Shares
on the Exchange; (vi) the cost of preparing the Shares; (vii) the costs and
charges of any transfer agent or registrar or any dividend distribution agent;
and (viii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and Section 7 hereof, the Agent will pay all of its own costs and expenses,
including the fees of its counsel, transfer taxes on resale of any of the Shares
by it, and any advertising expenses connected with any offers it may
make.
(b) If
either (i) an aggregate of 1,000,000 shares (ii) or a lesser number of Shares
having an aggregate offering price of $10 million have not been offered and sold
under this Agreement by the date that this Agreement is terminated pursuant to
Section 10(a) hereof (or such earlier date on which the Company terminates this
Agreement) the Company shall reimburse the Agent for all of its reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of a
single counsel for the Agent incurred by it in connection with the offering
contemplated by this Agreement.
Section
6. Conditions of Agent’s
Obligation. The obligations of the Agent hereunder shall be
subject, in its discretion, to the condition that all representations and
warranties and other statements of the Company herein or in certificates of any
officer of the Company delivered pursuant to the provisions hereof are true and
correct as of the time of the execution of this Agreement, and as of each
Registration Statement Amendment Date, Company Earnings Report Date, Company
Periodic Report Date, Applicable Time and Settlement Date, to the condition that
the Company shall have performed all of its obligations hereunder theretofore to
be performed, and the following additional conditions:
(a) The
Prospectus Supplement shall have been filed with the Commission pursuant to Rule
424(b) under the 1933 Act on or prior to the date hereof and in accordance with
Section 3(a) hereof, any other material required to be filed by the Company
pursuant to Rule 433(d) under the 1933 Act shall have been filed with the
Commission within the applicable time periods prescribed for such filings by
Rule 433; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission and no notice
of objection of the Commission to the use of the form of the Registration
Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2)
under the 1933 Act shall have been received; no stop order suspending or
preventing the use of the Prospectus or any Issuer Free Writing Prospectus shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to the reasonable satisfaction of the Representatives.
(b) On
every date specified in Section 3(j) hereof, Morgan, Lewis & Bockius LLP,
counsel for the Agent, shall have furnished to the Agent such written opinion or
opinions, dated as of such date, with respect to such matters as the Agent may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters.
(c) On
or prior to the date of the first instruction to sell Shares made by the Company
to the Agent pursuant to 2(b) and on each other date specified in Section 3(k)
hereto, the Agent shall have received favorable opinions (or, in lieu thereof
and as provided for in Section 3(k), a reliance letter from counsel), each dated
as of such date, in form and substance satisfactory to counsel for the Agent, of
Seward & Kissel LLP, Marshall Islands counsel and U.S. counsel for the
Company, or other counsel satisfactory to the Agent, to the effect set forth in
Exhibit A-1 and Exhibit A-2 hereto, and to such further effect as counsel for
the Agent may reasonably request.
(d) On
the first Settlement Date, the Agent shall have received favorable opinions,
each dated as of such date, in form and substance satisfactory to counsel for
the Agent, of each of list outside counsels for Greece, Malta, Norway, UK,
Ghana, Canada and Cyprus, and for any other jurisdiction in which a Subsidiary
is incorporated or where a vessel or rig owned by a Subsidiary is registered, or
other counsel satisfactory to the Agent, each to the effect set forth in Exhibit
A-3 and Exhibit A-4 hereto, and to such further effect as counsel for the Agent
may reasonably request;
(e) On
every date specified in Section 3(l) hereof, the independent accountants of the
Company who have certified the financial statements of the Company and its
Subsidiaries included or incorporated by reference in the Registration Statement
shall have furnished to the Agent (i) a letter dated as of the date of delivery
thereof and addressed to the Agent in form and substance reasonably satisfactory
to the Agent and its counsel, containing statements and information of the type
ordinarily included in accountants’ “comfort letters” to underwriters with
respect to the financial statements of the Company and its Subsidiaries included
or incorporated by reference in the Registration Statement, or (ii) for the
purposes of the letters to be delivered on February 11, 2009 or on such other
dates as the Agent shall request subsequent to February 27, 2009, in lieu of the
letter
referred to in clause (i) of this Section 6(e), a letter as of February 11, 2009
or such later date confirming, as of such date, the statements made in the
letter furnished upon commencement of the offering of Shares under this
Agreement pursuant to this Section 6(e).
(f) On
the first Settlement Date, the Agent shall have received from each of Deloitte,
Hadjipavlou Sofianos & Cambanis SA and Ernst & Young (Hellas) a letter,
dated as of such Settlement Date, to the effect that they reaffirm the
statements made in the letter furnished upon commencement of the offering of
Shares under this Agreement pursuant to Section 6(e) hereof.
(g) (i)
Upon commencement of the offering of Shares under this Agreement, the Company
will furnish or cause to be furnished promptly to the Agent a certificate of an
officer in a form satisfactory to the Agent stating the minimum price for the
sale of such Shares pursuant to this Agreement and the maximum number of Shares
that may be issued and sold pursuant to this Agreement or, alternatively,
maximum gross proceeds from such sales, as authorized from time to time by the
Company’s board of directors or a duly authorized committee thereof or, which
certificate may be amended by the Company upon the delivery of the instructions
contemplated by Section 2(b) of this Agreement and (ii) on each date specified
in Section 3(j), the Agent shall have received a certificate of the chief
executive officer of the Company to the effect that (A) there has been no
Material Adverse Effect since the date as of which information is given in the
Prospectus as then amended or supplemented, (B) the representations and
warranties in Section 1 hereof are true and correct as of such date as
though made at and as of such date, and (C) the Company has complied with all of
the agreements entered into in connection with the transaction contemplated
herein and satisfied all conditions on its part to be performed or
satisfied.
(h) Prior
to the filing of the Prospectus Supplement, the Agent shall have received an
agreement dated as of the date of this Agreement substantially in the form of
Exhibit B hereto signed by the persons listed on Schedule 3 hereto.
(i) Since
the date of the latest audited financial statements then included or
incorporated by reference in the Prospectus and the Disclosure Package, no
Material Adverse Effect shall have occurred.
(j) The
Company shall have complied with the provisions of Section 3(c) hereof with
respect to the timely furnishing of prospectuses.
(k) On
such dates as reasonably requested by the Agent, the Company shall have
conducted due diligence sessions, in form and substance satisfactory to the
Agent.
(l) All
filings with the Commission required by Rule 424 under the 1933 Act to have been
filed by each Applicable Time or related Settlement Date shall have been made
within the applicable time period prescribed for such filing by Rule 424
(without reliance on Rule 424(b)(8)).
(m) The
Shares shall have received approval for listing on Nasdaq prior to the first
Settlement Date.
Section
7. Indemnification.
(a) The
Company will indemnify and hold harmless the Agent, the directors, officers,
partners, employees and agents of the Agent and each person, if any, who (i)
controls the Agent within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act, or (ii) is controlled by or is under common control with the
Agent (an “Agent
Affiliate”) against any losses, claims, damages or liabilities, joint or
several, to which the Agent may become subject, under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the Basic
Prospectus, the Prospectus Supplement or the Prospectus or any amendment or
supplement thereto, any Issuer Free Writing Prospectus or any “issuer
information” filed or required to be filed pursuant to Rule 433(d) under the
1933 Act, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Agent the
directors, officers, partners, employees and agents of the Agent and each Agent
Affiliate, for any legal or other expenses reasonably
incurred
by the any such individual or entity in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, the Basic Prospectus, the Prospectus
Supplement or the Prospectus, or any amendment or supplement thereto, or any
Issuer Free Writing Prospectus, in reliance upon and in conformity with written
information furnished to the Company by the Agent expressly for use
therein.
(b) The
Agent will indemnify and hold harmless the Company, its directors, each of its
officers who signed the Registration Statement, and each person, if any, who (i)
controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act or (ii) is controlled by or is under common
control with the Company (a “Company Affiliate”),
against any losses, claims, damages or liabilities to which the Company may
become subject, under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Basic Prospectus, the Prospectus
Supplement or the Prospectus, or any amendment or supplement thereto, or any
Issuer Free Writing Prospectus, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Registration
Statement, the Basic Prospectus, the Prospectus Supplement or the Prospectus, or
any such amendment or supplement thereto, or any Issuer Free Writing Prospectus,
in reliance upon and in conformity with written information furnished to the
Company by the Agent expressly for use therein; and will reimburse the Company
for any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly
after receipt by an indemnified party under subsection (a) or (b) above of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under such subsection except and then only to the extent such indemnifying party
is materially prejudiced thereby. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under this Section 7 for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If
the indemnification provided for in this Section 7 is unavailable to hold
harmless an indemnified party under subsection (a) or (b) above in respect of
any losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Agent on the other from the offering of the Shares to which such
loss, claim, damage or liability (or action in respect thereof) relates. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law, then each indemnifying party shall contribute to
such amount paid or payable by
such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Agent on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Agent on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
commissions received by the Agent. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Agent on the other and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Agent agree that it would not be just
and equitable if contribution pursuant to this subsection (d) were determined by
pro rata allocation (even if the Agent was treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection
(d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding
the provisions of this subsection (d), the Agent shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Shares sold by it to the public were offered to the public exceeds the
amount of any damages which the Agent has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation.
(e) The
obligations of the Company under this Section 7 shall be in addition to any
liability which the Company may otherwise have and shall extend, upon the same
terms and conditions, to the directors, officers, partners, employees and agents
of the Agent and each Agent Affiliate; and the obligations of the Agent under
this Section 7 shall be in addition to any liability which the Agent may
otherwise have and shall extend, upon the same terms and conditions, each of the
Company’s directors, each of its officers who signed the Registration Statement
and each Company Affiliate.
Section
8. Representations, Warranties
and Agreements to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of the
Company and the Agent, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of the Agent or any controlling person of the
Agent, or the Company, or any officer or director or controlling person of the
Company, and shall survive delivery of and payment for the Shares.
Section
9. No Advisory or Fiduciary
Relationship. The Company acknowledges and agrees that (i) the
Agent is acting solely in the capacity of an arm’s length contractual
counterparty to the Company with respect to the offering of Shares contemplated
hereby (including in connection with determining the terms of such offering) and
(ii) the Agent has not assumed an advisory or fiduciary responsibility in favor
of the Company with respect to the offering contemplated hereby or the process
leading thereto (irrespective of whether the Agent has advised or is currently
advising the Company on other matters) or any other obligation to the Company
except the obligations expressly set forth in this Agreement and (iii) the
Company has consulted its own legal and financial advisors to the extent it
deemed appropriate. The Company agrees that it will not claim that the Agent has
rendered advisory services of any nature or respect, or owes a fiduciary or
similar duty to the Company, in connection with such transaction or the process
leading thereto.
Section
10. Termination.
(a) This
Agreement shall terminate on the date that is 30 days after the date of this
Agreement (unless extended by mutual written consent of the parties) and the
Agent and the Company shall have no obligation to make sales of Shares
subsequent to such date. Any such termination shall be without
liability of any party to any other party, except that (i) with respect to any
pending sale through the Agent for the Company, the obligations of the Company,
including in respect of compensation of the Agent, shall remain in full force
and effect notwithstanding such termination; and (ii) the provisions of Section
1, Section 5(b), Section 7 and Section 8 of this Agreement shall remain in full
force and effect notwithstanding such termination.
(b) The
Company shall have the right, by giving written notice as hereinafter specified,
to terminate this Agreement in its sole discretion at any time. Any
such termination shall be without liability of any party to any other party,
except that (i) with respect to any pending sale
through
the Agent for the Company, the obligations of the Company, including in respect
of compensation of the Agent, shall remain in full force and effect
notwithstanding such termination; and (ii) the provisions of Section 1, Section
5(b), Section 7 and Section 8 of this Agreement shall remain in full force and
effect notwithstanding such termination.
(c) The
Agent shall have the right, by giving written notice as hereinafter specified,
to terminate this Agreement in its sole discretion at any time. Any
such termination shall be without liability of any party to any other party
except that the provisions of Section 1, Section 5(b), Section 7 and Section 8
of this Agreement shall remain in full force and effect notwithstanding such
termination.
(d) This
Agreement shall remain in full force and effect until and unless terminated
pursuant to Section 10(a), (b) or (c) above or otherwise by mutual agreement of
the parties hereto; provided that any
such termination by mutual agreement or pursuant to this clause (c) shall in all
cases be deemed to provide that Section 1, Section 5(b), Section 7 and Section 8
of this Agreement shall remain in full force and effect.
(e) Any
termination of this Agreement shall be effective on the date specified in such
notice of termination; provided that such
termination shall not be effective until the close of business on the date of
receipt of such notice by the Agent or the Company, as the case may
be. If such termination shall occur prior to the Settlement Date for
any sale of Shares, such sale shall settle in accordance with the provisions of
Section 2(h) hereof.
Section
11. Notices. All
statements, requests, notices and agreements hereunder shall be in writing, and
if to the Agent shall be delivered or sent by mail, telex or facsimile
transmission to:
Merrill,
Lynch, Pierce, Fenner & Smith Incorporated
4
World Financial Center
New
York, New York 10080
Fax
No. (212) 449-0355
Attention: Charles
Hill,
with
a copy to:
Morgan,
Lewis & Bockius LLP
101
Park Avenue
New
York, New York 10178
Fax
No. (212) 309-6001
Attention: Stephen
P. Farrell, Esq.
and
if to the Company to:
DryShips
Inc.
80
Kifissias Avenue
Amaroussa
15125
Athens,
Greece
Fax
No. 011-30210-809-0205
Attention: Chief
Executive Officer
with
a copy to:
Seward
& Kissel LLP
One
Battery Park Plaza
New
York, New York 10004
Fax
No. (212) 480-8421
Attention: Gary
J. Wolfe, Esq.
Any
such statements, requests, notices or agreements shall take effect upon receipt
thereof.
Section
12. Parties. This
Agreement shall be binding upon, and inure solely to the benefit of, the Agent
and the Company and, to the extent provided in Sections 7 and 8 hereof, the
officers and directors of the Company and the Agent and each person who controls
the Company or the Agent, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of Shares through
the Agent shall be deemed a successor or assign by reason merely of such
purchase.
Section
13. Time of the
Essence. Time shall be of the essence of this
Agreement. As used herein, the term “business day” shall mean any day
when the Commission’s office in Washington, D.C. is open for
business.
Section
14. Waiver of Jury
Trial. The Company and the Agent hereby irrevocably waive, to
the fullest extent permitted by applicable law, any and all right to jury trial
by jury in any legal proceeding arising out of or relating to this Agreement or
the transactions contemplated hereby.
Section
15. Governing
Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
PRINCIPLES OF CONFLICTS OF LAW.
Section
16. Jurisdiction. The
Company agrees that any suit, action or proceeding against the Company brought
by the Agent, the directors, officers, partners, employees and agents of the
Agent and each Agent Affiliate, arising out of or based upon this Agreement or
the transactions contemplated hereby may be instituted in any court located in
the City and County of New York (a “New York Court”), and
waives any objection which it may now or hereafter have to the laying of venue
of any such proceeding, and irrevocably submits to the non-exclusive
jurisdiction of such courts in any suit, action or proceeding. The
Company has appointed CT Corporation as its authorized agent (the “Authorized Agent”)
upon whom process may be served in any suit, action or proceeding arising out of
or based upon this Agreement or the transactions contemplated herein which may
be instituted in any New York Court, by the Agent the directors, officers,
partners, employees and agents of the Agent and each Agent Affiliate, and
expressly accepts the non-exclusive jurisdiction of any such court in respect of
any such suit, action or proceeding. The Company hereby represents
and warrants that the Authorized Agent has accepted such appointment and has
agreed to act as said agent for service of process, and each of the Company
agrees to take any and all action, including the filing of any and all documents
that may be necessary to continue such appointment in full force and effect as
aforesaid. Service of process upon the Authorized Agent shall be
deemed, in every respect, effective service of process upon the
Company. Notwithstanding the foregoing, any action arising out of or
based upon this Agreement may be instituted by the Agent, the directors,
officers, partners, employees and agents of the Agent and each Agent Affiliate,
in any court of competent jurisdiction in the Republic of the Marshall
Islands.
The
provisions of this Section 16 shall survive any termination of this Agreement,
in whole or in part.
Section
17. Counterparts. This
Agreement may be executed by any one or more of the parties hereto and thereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such respective counterparts shall together constitute one and the same
instrument. This Agreement may be delivered by any party by facsimile
or other electronic transmission.
Section
18. Severability. The
invalidity or unenforceability of any Section, paragraph or provision of this
Agreement shall not affect the validity or enforceability of any other Section,
paragraph or provision hereof. If any Section, paragraph or provision
of this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
If
the foregoing is in accordance with your understanding of our agreement, please
sign and return to the Company a counterpart hereof, whereupon this instrument,
along with all counterparts, will become a binding agreement between the Agent
and the Company in accordance with its terms.
Very
truly yours,
DryShips
Inc.
By:
__________________________
Name:
Title:
Accepted
as of the date hereof:
Merrill
Lynch, Pierce, Fenner & Smith Incorporated
By:
_________________________________
Name:
Title:
Schedule 1
Subsidiaries
Subsidiaries
|
|
|
Ship-Owning
Subsidiaries with Vessels in Operations
|
|
Country
of Incorporation
|
|
1.
|
|
Malvina
Shipping Company Limited
|
|
Malta
|
|
2.
|
|
Arleta
Navigation Company Limited
|
|
Malta
|
|
3.
|
|
Selma
Shipping Company Limited
|
|
Malta
|
|
4.
|
|
Samsara
Shipping Company Limited
|
|
Malta
|
|
5.
|
|
Lansat
Shipping Company Limited
|
|
Malta
|
|
6.
|
|
Farat
Shipping Company Limited
|
|
Malta
|
|
7.
|
|
Iguana
Shipping Company Limited
|
|
Malta
|
|
8.
|
|
Borsari
Shipping Company Limited
|
|
Malta
|
|
9.
|
|
Onil
Shipping Company Limited
|
|
Malta
|
|
10.
|
|
Fabiana
Navigation Company Limited
|
|
Malta
|
|
11.
|
|
Karmen
Shipping Company Limited
|
|
Malta
|
|
12.
|
|
Thelma
Shipping Company Limited
|
|
Malta
|
|
13.
|
|
Celine
Shipping Company Limited
|
|
Malta
|
|
14.
|
|
Lotis
Traders Inc.
|
|
Malta
|
|
15.
|
|
Tempo
Marine Co.
|
|
Marshall
Islands
|
|
16.
|
|
Star
Record Owning Company Limited
|
|
Marshall
Islands
|
|
17.
|
|
Argo
Owning Company Limited
|
|
Marshall
Islands
|
|
18.
|
|
Rea
Owning Company Limited
|
|
Marshall
Islands
|
|
19.
|
|
Gaia
Owning Company Limited
|
|
Marshall
Islands
|
|
20.
|
|
Kronos
Owning Company Limited
|
|
Marshall
Islands
|
|
21.
|
|
Trojan
Maritime Co.
|
|
Marshall
Islands
|
|
22.
|
|
Dione
Owning Company Limited
|
|
Marshall
Islands
|
|
23.
|
|
Phoebe
Owning Company Limited
|
|
Marshall
Islands
|
|
24.
|
|
Uranus Owning
Company Limited
|
|
Marshall
Islands
|
|
25.
|
|
Selene
Owning Company Limited
|
|
Marshall
Islands
|
|
26.
|
|
Tethys
Owning Company Limited
|
|
Marshall
Islands
|
|
27.
|
|
Ioli
Owning Company Limited
|
|
Marshall
Islands
|
|
28.
|
|
Iason
Owning Company Limited
|
|
Marshall
Islands
|
|
29.
|
|
Orpheus
Owning Company Limited
|
|
Marshall
Islands
|
|
30.
|
|
Team
up Owning Company Limited
|
|
Marshall
Islands
|
|
31.
|
|
Iokasti
Owning Company Limited
|
|
Marshall
Islands
|
|
32.
|
|
Boone
Star Owners Inc.
|
|
Marshall
Islands
|
|
33.
|
|
Norwalk
Star Owners Inc.
|
|
Marshall
Islands
|
|
34.
|
|
Ionian
Traders Inc.
|
|
Marshall
Islands
|
|
35.
|
|
NT
LLC Investors Ltd.
|
|
Marshall
Islands
|
|
36.
|
|
Dalian
Star Owners Inc.
|
|
Marshall
Islands
|
|
37.
|
|
Aegean
Traders Inc.
|
|
Marshall
Islands
|
|
38.
|
|
Cretan
Traders Inc.
|
|
Marshall
Islands
|
|
39.
|
|
Kerkyra
Traders Inc.
|
|
Marshall
Islands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ship-Owning
Subsidiaries with Vessels under Construction
|
|
|
|
40.
|
|
Roscoe
Marine Ltd.
|
|
Marshall
Islands
|
|
41.
|
|
Monteagle
Shipping S.A.
|
|
Marshall
Islands
|
|
42.
|
|
Iktinos
Owning Company Limited
|
|
Marshall
Islands
|
|
43.
|
|
Kallikrates
Owning Company Limited
|
|
Marshall
Islands
|
|
44.
|
|
Faedon
Owning Company Limited
|
|
Marshall
Islands
|
|
45.
|
|
Mensa
Enterprises Inc.
|
|
Marshall
Islands
|
|
46.
|
|
Mandarin
Shipholding Company
|
|
Marshall
Islands
|
|
47.
|
|
Drillship Kithira
Owners Inc.
|
|
Marshall
Islands
|
|
48.
|
|
Drillship Skopelos
Owners Inc.
|
|
Marshall
Islands
|
|
|
|
|
|
|
|
|
|
Ship-Owning
Subsidiaries with Vessels Sold
|
|
|
|
49.
|
|
Felicia
Navigation Company Limited
|
|
Malta
|
|
50.
|
|
Zatac
Shipping Company Limited
|
|
Malta
|
|
51.
|
|
Atlas
Owning Company Limited
|
|
Marshall
Islands
|
|
52.
|
|
Maternal
Owning Company Limited
|
|
Marshall
Islands
|
|
53.
|
|
Royerton
Shipping Company Limited
|
|
Malta
|
|
54.
|
|
Lancat
Shipping Company Limited
|
|
Malta
|
|
55.
|
|
Paternal
Owning Company Limited
|
|
Marshall
Islands
|
|
56.
|
|
Fago
Shipping Company Limited
|
|
Malta
|
|
57.
|
|
Hydrogen
Shipping Company Limited
|
|
Malta
|
|
58.
|
|
Madras
Shipping Company Limited
|
|
Malta
|
|
59.
|
|
Seaventure
Shipping Limited
|
|
Marshall
Islands
|
|
60.
|
|
Classical
Owning Company Limited
|
|
Marshall
Islands
|
|
61.
|
|
Oxygen
Shipping Company Limited
|
|
Malta
|
|
62.
|
|
Human
Owning Company Limited
|
|
Marshall
Islands
|
|
63.
|
|
Helium
Shipping Company Limited
|
|
Malta
|
|
64.
|
|
Blueberry
Shipping Company Limited
|
|
Malta
|
|
65.
|
|
Platan
Shipping Company Limited
|
|
Malta
|
|
66.
|
|
Silicon
Shipping Company Limited
|
|
Malta
|
|
67.
|
|
Tolan
Shipping Company Limited
|
|
Malta
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ocean
Rig’s Subsidiaries
|
|
|
|
68.
|
|
Ocean
Rig ASA
|
|
Norway
|
|
69.
|
|
Ocean
Rig Norway AS
|
|
Norway
|
|
70.
|
|
Ocean
Rig AS
|
|
Norway
|
|
71.
|
|
Ocean
Rig AS UK Ltd
|
|
United
Kingdom
|
|
72.
|
|
Ocean
Rig Ltd
|
|
United
Kingdom
|
|
73.
|
|
Ocean
Rig Ghana Ltd
|
|
Ghana
|
|
74.
|
|
Ocean
Rig USA AS
|
|
Norway
|
|
75.
|
|
Ocean
Rig USA LLC
|
|
United
States
|
|
76.
|
|
Ocean
Rig 1 AS
|
|
Norway
|
|
77.
|
|
Ocean
Rig 2 AS
|
|
Norway
|
|
78.
|
|
Ocean
Rig Canada Inc.
|
|
Canada
|
|
79.
|
|
Ocean
Rig North Sea AS
|
|
Norway
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Subsidiaries
|
|
|
|
80.
|
|
Wealth
Management Inc.
|
|
Marshall
Islands
|
|
81.
|
|
Primelead
Limited
|
|
Cyprus
|
|
82.
|
|
Primelead
Shareholders Inc.
|
|
Marshall
Islands
|
|
83.
|
|
Drillships
Investments Inc.
|
|
Marshall
Islands
|
Schedule
2
Vessels
Vessels
|
|
|
Ship-Owning
Subsidiaries with Vessels in Operations
|
|
Country
of Incorporation
|
|
Vessel
|
|
Flag
State
|
|
1.
|
|
Malvina
Shipping Company Limited
|
|
Malta
|
|
Coronado
|
|
Malta
|
|
2.
|
|
Arleta
Navigation Company Limited
|
|
Malta
|
|
Xanadu
|
|
Malta
|
|
3.
|
|
Selma
Shipping Company Limited
|
|
Malta
|
|
La
Jolla
|
|
Malta
|
|
4.
|
|
Samsara
Shipping Company Limited
|
|
Malta
|
|
Ocean
Crystal
|
|
Malta
|
|
5.
|
|
Lansat
Shipping Company Limited
|
|
Malta
|
|
Paragon
|
|
Malta
|
|
6.
|
|
Farat
Shipping Company Limited
|
|
Malta
|
|
Toro
|
|
Malta
|
|
7.
|
|
Iguana
Shipping Company Limited
|
|
Malta
|
|
Iguana
|
|
Malta
|
|
8.
|
|
Borsari
Shipping Company Limited
|
|
Malta
|
|
Catalina
|
|
Malta
|
|
9.
|
|
Onil
Shipping Company Limited
|
|
Malta
|
|
Padre
|
|
Malta
|
|
10.
|
|
Fabiana
Navigation Company Limited
|
|
Malta
|
|
Alameda
|
|
Malta
|
|
11.
|
|
Karmen
Shipping Company Limited
|
|
Malta
|
|
Sonoma
|
|
Malta
|
|
12.
|
|
Thelma
Shipping Company Limited
|
|
Malta
|
|
Manasota
|
|
Malta
|
|
13.
|
|
Celine
Shipping Company Limited
|
|
Malta
|
|
Mendocino
|
|
Malta
|
|
14.
|
|
Lotis
Traders Inc.
|
|
Malta
|
|
Delray
|
|
Malta
|
|
15.
|
|
Tempo
Marine Co.
|
|
Marshall
Islands
|
|
Maganari
|
|
Malta
|
|
16.
|
|
Star
Record Owning Company Limited
|
|
Marshall
Islands
|
|
Ligari
|
|
Malta
|
|
17.
|
|
Argo
Owning Company Limited
|
|
Marshall
Islands
|
|
Redondo
|
|
Malta
|
|
18.
|
|
Rea
Owning Company Limited
|
|
Marshall
Islands
|
|
Ecola
|
|
Malta
|
|
19.
|
|
Gaia
Owning Company Limited
|
|
Marshall
Islands
|
|
Samsara
|
|
Malta
|
|
20.
|
|
Kronos
Owning Company Limited
|
|
Marshall
Islands
|
|
Primera
|
|
Malta
|
|
21.
|
|
Trojan
Maritime Co.
|
|
Marshall
Islands
|
|
Brisbane
|
|
Malta
|
|
22.
|
|
Dione
Owning Company Limited
|
|
Marshall
Islands
|
|
Marbella
|
|
Malta
|
|
23.
|
|
Phoebe
Owning Company Limited
|
|
Marshall
Islands
|
|
Majorca
|
|
Malta
|
|
24.
|
|
Uranus Owning
Company Limited
|
|
Marshall
Islands
|
|
Heinrich
Oldendorff
|
|
Malta
|
|
25.
|
|
Selene
Owning Company Limited
|
|
Marshall
Islands
|
|
Bargara
|
|
Malta
|
|
26.
|
|
Tethys
Owning Company Limited
|
|
Marshall
Islands
|
|
Capitola
|
|
Malta
|
|
27.
|
|
Ioli
Owning Company Limited
|
|
Marshall
Islands
|
|
Clipper
Gemini
|
|
Malta
|
|
28.
|
|
Iason
Owning Company Limited
|
|
Marshall
Islands
|
|
Oregon
|
|
Malta
|
|
29.
|
|
Orpheus
Owning Company Limited
|
|
Marshall
Islands
|
|
Avoca
|
|
Malta
|
|
30.
|
|
Team
up Owning Company Limited
|
|
Marshall
Islands
|
|
Saldanha
|
|
Malta
|
|
31.
|
|
Iokasti
Owning Company Limited
|
|
Marshall
Islands
|
|
Pachino
(ex. VOC Galaxy)
|
|
Malta
|
|
32.
|
|
Boone
Star Owners Inc.
|
|
Marshall
Islands
|
|
Samatan
|
|
Malta
|
|
33.
|
|
Norwalk
Star Owners Inc.
|
|
Marshall
Islands
|
|
Capri
|
|
Malta
|
|
34.
|
|
Ionian
Traders Inc.
|
|
Marshall
Islands
|
|
Positano
|
|
Malta
|
|
35.
|
|
NT
LLC Investors Ltd.
|
|
Marshall
Islands
|
|
Conquistador
|
|
Malta
|
|
36.
|
|
Dalian
Star Owners Inc.
|
|
Marshall
Islands
|
|
Mystic
|
|
Malta
|
|
37.
|
|
Aegean
Traders Inc.
|
|
Marshall
Islands
|
|
Sorrento
|
|
Malta
|
|
38.
|
|
Cretan
Traders Inc.
|
|
Marshall
Islands
|
|
Flecha
|
|
Malta
|
|
39.
|
|
Kerkyra
Traders Inc.
|
|
Marshall
Islands
|
|
Petalidi
|
|
Malta
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ship-Owning
Subsidiaries with Vessels under Construction
|
|
|
|
|
|
|
|
40.
|
|
Roscoe
Marine Ltd.
|
|
Marshall
Islands
|
|
Hull
1518A
|
|
|
|
41.
|
|
Monteagle
Shipping S.A.
|
|
Marshall
Islands
|
|
Hull
1519A
|
|
|
|
42.
|
|
Iktinos
Owning Company Limited
|
|
Marshall
Islands
|
|
Hull
SS058
|
|
|
|
43.
|
|
Kallikrates
Owning Company Limited
|
|
Marshall
Islands
|
|
Hull
SS059
|
|
|
|
44.
|
|
Faedon
Owning Company Limited
|
|
Marshall
Islands
|
|
Hull
2089
|
|
|
|
45.
|
|
Mensa
Enterprises Inc.
|
|
Marshall
Islands
|
|
Hull
002
|
|
|
|
46.
|
|
Mandarin
Shipholding Company
|
|
Marshall
Islands
|
|
Hull
003
|
|
|
|
47.
|
|
Drillship Kithira
Owners Inc.
|
|
Marshall
Islands
|
|
Drillship
Hull 1865
|
|
|
|
48.
|
|
Drillship Skopelos
Owners Inc.
|
|
Marshall
Islands
|
|
Drillship
Hull 1866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ship-Owning
Subsidiaries with Vessels Sold
|
|
|
|
|
|
|
|
49.
|
|
Felicia
Navigation Company Limited
|
|
Malta
|
|
Solana
|
|
|
|
50.
|
|
Zatac
Shipping Company Limited
|
|
Malta
|
|
Waikiki
|
|
|
|
51.
|
|
Atlas
Owning Company Limited
|
|
Marshall
Islands
|
|
Menorca
|
|
|
|
52.
|
|
Maternal
Owning Company Limited
|
|
Marshall
Islands
|
|
Lanzarote
|
|
|
|
53.
|
|
Royerton
Shipping Company Limited
|
|
Malta
|
|
Netadola
|
|
|
|
54.
|
|
Lancat
Shipping Company Limited
|
|
Malta
|
|
Matira
|
|
|
|
55.
|
|
Paternal
Owning Company Limited
|
|
Marshall
Islands
|
|
Formentera
|
|
|
|
56.
|
|
Fago
Shipping Company Limited
|
|
Malta
|
|
Lanikai
|
|
|
|
57.
|
|
Hydrogen
Shipping Company Limited
|
|
Malta
|
|
Mostoles
|
|
|
|
58.
|
|
Madras
Shipping Company Limited
|
|
Malta
|
|
Alona
|
|
|
|
59.
|
|
Seaventure
Shipping Limited
|
|
Marshall
Islands
|
|
Hille
Oldendorff
|
|
|
|
60.
|
|
Classical
Owning Company Limited
|
|
Marshall
Islands
|
|
Delray
|
|
|
|
61.
|
|
Oxygen
Shipping Company Limited
|
|
Malta
|
|
Shibumi
|
|
|
|
62.
|
|
Human
Owning Company Limited
|
|
Marshall
Islands
|
|
Estepona
|
|
|
|
63.
|
|
Helium
Shipping Company Limited
|
|
Malta
|
|
Striggla
|
|
|
|
64.
|
|
Blueberry
Shipping Company Limited
|
|
Malta
|
|
Panormos
|
|
|
|
65.
|
|
Platan
Shipping Company Limited
|
|
Malta
|
|
Daytona
|
|
|
|
66.
|
|
Silicon
Shipping Company Limited
|
|
Malta
|
|
Flecha
|
|
|
|
67.
|
|
Tolan
Shipping Company Limited
|
|
Malta
|
|
Tonga
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ocean
Rig’s Subsidiaries
|
|
|
|
|
|
|
|
68.
|
|
Ocean
Rig ASA
|
|
Norway
|
|
Leiv
Eiriksson
|
|
Bahamas
|
|
69.
|
|
Ocean
Rig Norway AS
|
|
Norway
|
|
|
|
|
|
70.
|
|
Ocean
Rig AS
|
|
Norway
|
|
|
|
|
|
71.
|
|
Ocean
Rig AS UK Ltd
|
|
United
Kingdom
|
|
|
|
|
|
72.
|
|
Ocean
Rig Ltd
|
|
United
Kingdom
|
|
|
|
|
|
73.
|
|
Ocean
Rig Ghana Ltd
|
|
Ghana
|
|
|
|
|
|
74.
|
|
Ocean
Rig USA AS
|
|
Norway
|
|
|
|
|
|
75.
|
|
Ocean
Rig USA LLC
|
|
United
States
|
|
|
|
|
|
76.
|
|
Ocean
Rig 1 AS
|
|
Norway
|
|
|
|
|
|
77.
|
|
Ocean
Rig 2 AS
|
|
Norway
|
|
Eirik
Raude
|
|
Bahamas
|
|
78.
|
|
Ocean
Rig Canada Inc.
|
|
Canada
|
|
|
|
|
|
79.
|
|
Ocean
Rig North Sea AS
|
|
Norway
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Subsidiaries
|
|
|
|
|
|
|
|
80.
|
|
Wealth
Management Inc.
|
|
Marshall
Islands
|
|
|
|
|
|
81.
|
|
Primelead
Limited
|
|
Cyprus
|
|
|
|
|
|
82.
|
|
Primelead
Shareholders Inc.
|
|
Marshall
Islands
|
|
|
|
|
|
83.
|
|
Drillships
Investments Inc.
|
|
Marshall
Islands
|
|
|
|
|
Schedule
3
List
of Persons and Entities
Subject
to Lock-up Agreements
George
Economou
Exhibit
A-1
FORM
OF OPINION OF MARSHALL ISLANDS COUNSEL
(i) The
Agreement has been duly authorized, executed and delivered by the
Company.
(ii) The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the Republic of the Marshall
Islands.
(iii)
The
Company has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under the Agreement.
(iv)
The
Company is duly qualified as a foreign corporation to transact business and is
in good standing in [each jurisdiction in which such qualification is required],
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect.
(v)
The
authorized, issued and outstanding capital stock of the Company is as set forth
in the Prospectus under the caption “Capitalization”(except for subsequent
issuances, if any, pursuant to the Agreement or pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectus or pursuant
to the exercise of convertible securities or options referred to in the
Prospectus); the shares of issued and outstanding capital stock of the Company
have been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the Company
was issued in violation of the preemptive or other similar rights of any
securityholder of the Company; and no holder of the Securities is or will be
subject to personal liability by reason of being such a holder.
(vi)
The
Shares have been duly authorized for issuance and sale through the Agent
pursuant to the Agreement and, when issued and delivered by the Company pursuant
to the Agreement against payment of the consideration set forth in the
Agreement, will be validly issued and fully paid and non-assessable and no
holder of the Shares is or will be subject to personal liability by reason of
being such a holder.
(vii) The
issuance of the Securities is not subject to the preemptive or other similar
rights of any securityholder of the Company.
(viii) To
the best of our knowledge, there is not pending or threatened any action, suit,
proceeding, inquiry or investigation, to which the Company or any subsidiary is
a party, or to which the property of the Company or any subsidiary is subject,
before or brought by any court or governmental agency or body, domestic or
foreign, which would reasonably be expected to result in a Material Adverse
Effect, or which would reasonably be expected to materially and adversely affect
the properties or assets thereof or the consummation of the transactions
contemplated in the Agreement or the performance by the Company of its
obligations thereunder.
(ix) The
information in the Prospectus under “Risk Factors,” “Plan of Distribution,”
“Description of Capital Stock,” “Enforcement of Civil Liabilities,” “Prospectus
Summary,” and “Taxation,” in the Company’s most recent annual report on Form
20-F under “Part I - Environmental and Other Regulation” and under “Part I, Item
10 – Taxation – United States Taxation,” and in the Registration Statement under
Item 8, to the extent that it constitutes matters of Marshall Islands law,
summaries of Marshall Islands legal matters, the Company’s charter and by-laws
or Marshall Islands legal proceedings, or Marshall Islands legal conclusions,
has been reviewed by us and is correct in all material respects.
(x) The
execution, delivery and performance of the Agreement and the consummation of the
transactions contemplated in the Agreement and in the Registration Statement and
compliance by the Company with its obligations under the Agreement do not and
will not, whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or cause an acceleration of
any obligation under or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any subsidiary
pursuant to any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument, known to us, to
which the Company or any subsidiary is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any
subsidiary is subject (except for such conflicts, breaches, defaults or
accelerations or liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in any violation of the provisions
of the charter or by-laws of the Company or any subsidiary, or any applicable
law, statute, rule, regulation, judgment, order, writ or decree, known to us, of
any government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their respective
properties, assets or operations.
(xi)
Neither
the sale of the Shares, nor the execution, delivery and performance of the
Agreement, nor the consummation of any other of the transactions contemplated in
the Agreement, nor the fulfillment of the terms thereof, will conflict with,
result in a breach or violation of, or imposition of any lien, charge or
encumbrance under Marshall Islands law upon any property or assets of the
Company pursuant to (i) the articles of incorporation or by-laws of the Company
or (ii) any Marshall Islands statute, law, rule, or regulation of general
application to which the Company is subject.
(xii)
No
licenses, permits, certificates, consents, orders, approvals or other
authorizations of, or declarations or filings with, any governmental or
regulatory authorities of the Republic of the Marshall Islands are required for
the Company to own or lease, as the case may be, or to operate, its properties
and carry on its business as conducted as of the date hereof in the manner
described in the Disclosure Package and the Prospectus.
(xiii) The
form of certificate used to evidence the Securities complies in all material
respects with all applicable statutory requirements of the Republic of the
Marshall Islands and with any applicable requirements of the articles of
incorporation and by-laws of the Company.
(xiv) No
consent, approval, authorization, order, license, registration or qualification
of or with any court or governmental agency or body of the Republic of the
Marshall Islands is required for the consummation by the Company of the
transactions contemplated by the Agreement.
(xv) No
documentary stamp or other issuance or transfer taxes or duties and no capital
gains, income, withholding or other taxes, are payable by or on behalf of the
Agent to the Republic of the Marshall Islands or to any political subdivision or
taxing authority thereof or therein in connection with the sale and delivery by
the Agent of the Shares to the initial purchasers thereof.
(xvi) Insofar
as matters of Marshall Islands law are concerned, the Registration Statement and
the filing of the Registration Statement with the Commission have been duly
authorized by and on behalf of the Company, and the Registration Statement has
been duly executed pursuant to such authorization by and on behalf of the
Company.
(xvii)
The
agreement of the Company to the choice of law set forth in Section 15 of the
Agreement will be recognized by the courts of the Republic of the Marshall
Islands, the Company can sue and be sued in its own name under the laws of the
Republic of the Marshall Islands, and the irrevocable submission of the Company
to the exclusive jurisdiction of New York courts and the waiver by the Company
of any objection to the venue of a proceeding in a New York court are legal,
valid and binding, service of process effected in the manner set forth in
Section 16 of the Agreement will be effective, insofar as the law of the
Republic of the Marshall Islands is concerned, to confer valid personal
jurisdiction over the Company, and a final non-appealable judgment against the
Company entered by a court in any United States or foreign jurisdiction in any
suit, action or proceeding would be enforceable against the Company in the
courts
| |
of
the Republic of the Marshall Islands without a retrial of the merits of
the matters provided that: (a) the judgment was for a sum of money and was
final in the jurisdiction granting the judgment, (b) the court granting
the judgment had jurisdiction under the laws of the place where it sat and
the judgment did not offend principles of the Republic of the Marshall
Islands as to due process, propriety or public order, and (c) the
defendant was actually present in person or by duly appointed
representative, and the judgment did not constitute in effect a default
judgment.
|
(xviii)
Neither
the Company nor any of its properties or assets will have an immunity from suit,
execution, attachment or legal process in any proceedings taken in the Republic
of the Marshall Islands in relation to the Agreement.
(xix) All
dividends and other distributions declared and payable on the shares of capital
stock of the Company may under the current laws and regulations of the Republic
of the Marshall Islands be paid in United States dollars and may be freely
transferred out of the Republic of the Marshall Islands and will not be subject
to withholding taxes under the laws and regulations of the Republic of the
Marshall Islands, and are otherwise free and clear of any other tax, withholding
or deduction and without the necessity of obtaining any consents, approvals,
authorizations, orders, licenses, registrations, clearances and qualifications
of or with any court or governmental agency or body or any stock exchange
authorities in the Republic of the Marshall Islands.
Exhibit
A-2
FORM
OF OPINION OF UNITED STATES COUNSEL
(xx) The
Agreement has been duly authorized, executed and delivered by the
Company.
(xxi) The
Registration Statement became effective under the Act upon filing; any required
filing of each prospectus relating to the Securities (including the Prospectus)
pursuant to Rule 424(b) has been made in the manner and within the time period
required by Rule 424(b) (without reference to Rule 424(b)(8)); any required
filing of each Issuer Free Writing Prospectus pursuant to Rule 433 has been made
in the manner and within the time period required by Rule 433(d); and, to the
best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued under the Act and no
proceedings for that purpose have been instituted or are pending or threatened
by the Commission.
(xxii) The
Registration Statement, including, without limitation information deemed to be
part of and included in such Registration Statement pursuant to Rule 430B, the
Prospectus, excluding the documents incorporated by reference therein, and each
amendment or supplement to the Registration Statement and the Prospectus,
excluding the documents incorporated by reference therein, as of their
respective effective or issue dates (including without limitation each deemed
effective date with respect to the Agent pursuant to Rule 430B(f)(2) of the
Act), other than the financial statements and supporting schedules included
therein or omitted therefrom, as to which we need express no opinion) complied
as to form in all material respects with the requirements of the Act and the
rules and regulations of the Commission thereunder .
(xxiii)
The
documents incorporated by reference in the Prospectus (other than the financial
statements and supporting schedules included therein or omitted therefrom, as to
which we need express no opinion), when they became effective or were filed with
the Commission, as the case may be, complied as to form in all material respects
with the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder.
(xxiv)
The
form of certificate used to evidence the Common Shares complies in all material
respects with all applicable statutory requirements and with any applicable
requirements of the charter and by-laws of the Company.
(xxv) To
the best of our knowledge, there is not pending or threatened any action, suit,
proceeding, inquiry or investigation, to which the Company or any subsidiary is
a party, or to which the property of the Company or any subsidiary is subject,
before or brought by any court or governmental agency or body, domestic or
foreign, which would reasonably be expected to result in a Material Adverse
Effect, or which would reasonably be expected to materially and adversely affect
the properties or assets thereof or the consummation of the transactions
contemplated in the Agreement or the performance by the Company of its
obligations thereunder.
(xxvi)
The
information in the Prospectus under “Risk Factors,” “Plan of Distribution,”
“Description of Capital Stock,” “Enforcement of Civil Liabilities,” “Prospectus
Summary,” and “Taxation,” in the Company’s most recent annual report on Form
20-F under “Part I - Environmental and Other Regulation” and under “Part I, Item
10 – Taxation – United States Taxation,” and in the Registration Statement under
Item 8, to the extent that it constitutes matters of U.S. law, summaries of U.S.
legal matters, the Company’s charter and by-laws or U.S. legal proceedings, or
legal conclusions with respect to U.S. law, has been reviewed by us and is
correct in all material respects.
(xxvii) All
descriptions in the Registration Statement or in documents incorporated by
reference into the Registration Statement of contracts and other documents to
which the Company or its Subsidiaries are a party are accurate in all material
respects; to the best of our knowledge, there are no franchises, contracts,
indentures, mortgages, loan agreements, notes, leases or other instruments
required to be described or referred to in the Registration Statement or to be
filed as exhibits to the Registration Statement or to documents incorporated by
reference into the Registration Statement other than those described or referred
to therein or filed or incorporated by reference as exhibits
thereto.
(xxviii) No
filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any U.S. federal or New York State court or
governmental authority or agency (other than under the Act and the rules and
regulations of the Commission thereunder and the Exchange Act and the rules and
regulations of the Commission thereunder, which have been obtained, or as may be
required under the securities or blue sky laws of the various states, as to
which we need express no opinion), is necessary or required in connection with
the due authorization, execution and delivery of the Agreement or for the
offering, issuance, sale or delivery of the Securities.
(xxix)
To
the best of our knowledge, there are no persons with registration rights or
other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
Act.
(xxx) The
execution, delivery and performance of the Agreement and the consummation of the
transactions contemplated in the Agreement and in the Disclosure Package and the
Registration Statement (including the issuance and sale of the Shares and the
use of the proceeds from the sale of the Shares as described in the Prospectus
under the caption “Use Of Proceeds”), and compliance by the Company with its
obligations under the Agreement do not and will not, whether with or without the
giving of notice or lapse of time or both, conflict with or constitute a breach
of, or default or cause an acceleration of any obligation under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any Subsidiary pursuant to any material contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any
other agreement or instrument, known to us, to which the Company or any
Subsidiary is a party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or any Subsidiary is subject, nor
will such action result in any violation of the provisions of the charter or
bylaws of the Company or any Subsidiary, or any applicable U.S. federal or New
York State law, statute, rule, regulation, judgment, order, writ or decree,
known to us, of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any Subsidiary or any of their
respective properties, assets or operations.
(xxxi)
The
Company is not required, and upon the issuance and sale of the Shares as herein
contemplated and the application of the net proceeds therefrom as described in
the Prospectus will not be required, to register as an “investment company”
under the 1940 Act.
(xxxii)
The
Shares have been approved for listing on the Nasdaq Global Select
Market.
(xxxiii) Under
the laws of the State of New York relating to submission to jurisdiction, the
Company has validly submitted to the jurisdiction of the New York courts in any
suit, action or proceeding arising out of or based on the Agreement and the
choice of New York law as the governing law of the Agreement will be recognized
by the New York courts.
(xxxiv) The
Company is a “foreign private issuer” as defined in Rule 405 of the
Act.
Nothing
has come to our attention that would lead us to believe that the Registration
Statement at the time it originally became effective (the “Original Registration
Statement”) or any amendment thereto (except for financial statements and
schedules and other financial data included or incorporated by reference therein
or omitted therefrom, as to which we need make no statement), at the time such
Original Registration Statement or any such amendment became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein
or
necessary to make the statements therein not misleading; that the Registration
Statement, including the information deemed to be part of and included in such
Registration Statement pursuant to Rule 430B (except for financial statements
and schedules and other financial data included or incorporated by reference
therein or omitted therefrom, as to which we make no statement), at each deemed
effective date with respect to the Agent pursuant to Rule 430B(f)(2) of the Act,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; or that the Prospectus or any amendment or supplement thereto
(except for financial statements and schedules and other financial data included
or incorporated by reference therein or omitted therefrom, as to which we need
make no statement), at the time the Prospectus was issued, at the time any such
amended or supplemented prospectus was issued or on each date specified in
Section 3(k) of the Agreement, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. In addition, nothing has come to our
attention that would lead us to believe that the Disclosure Package, other than
the financial statements and schedules and other financial data included or
incorporated by reference therein or omitted therefrom, as to which we need make
no statement, [as of each Applicable Time (if any) prior to the date of this
opinion,] contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in the
light of circumstances under which they were made, not
misleading. With respect to statements contained in such Disclosure
Package, any statement contained in any of the constituent documents shall be
deemed to be modified or superseded to the extent that any information contained
in subsequent constituent documents modifies or replaces such
statement.
In
rendering such opinion, such counsel may rely (A) as to matters involving the
application of the laws of [●], upon the opinion of [●], special counsel to the
Company (which opinion shall be dated and furnished to the Agent on each date
specified in Section 3(k) of the Agreement, shall be satisfactory in form and
substance to counsel for the Agent and shall expressly state that the Agent may
rely on such opinion as if it were addressed to them), provided that Seward
& Kissel LLP shall state in their opinion that they believe that they and
the Agent are justified in relying upon such opinion, and (B), as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public
officials. Such opinion shall not state that it is to be governed or
qualified by, or that it is otherwise subject to, any treatise, written policy
or other document relating to legal opinions, including, without limitation, the
Legal Opinion Accord of the ABA Section of Business Law (1991).
Exhibit
A-3
FORM
OF OPINION OF MALTESE, NORWEGIAN, UK, GUYANESE, CANADIAN, CYPRIOT, UNITED
STATES AND MARSHALL ISLANDS COUNSEL1
(xxxv) Each
of [list each subsidiary incorporated in the relevant jurisdiction] (each a
[“Maltese/Norwegian/U.K./Guyanese/Canadian/Cypriot/United States/Marshall
Islands] Cypriot Subsidiary” and collectively the
[“Maltese/Norwegian/U.K./Guyanese/Canadian/Cypriot/United States/Marshall
Islands] Subsidiaries”), has been duly incorporated and is validly existing as a
corporation in good standing under the laws of [●], has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Disclosure Package[, as of each Applicable Time (if any)
prior to the date of this opinion,] and the Prospectus and is duly qualified as
a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a Material
Adverse Effect; except as otherwise disclosed in the Disclosure Package and the
Prospectus, all of the issued and outstanding capital stock of each [●]
Subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and, to the best of our knowledge, is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding
shares of capital stock of any [●] Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such [●]
Subsidiary.
(xxxvi) To
the best of our knowledge, there is not pending or threatened any action, suit,
proceeding, inquiry or investigation, to which any [●] Subsidiary is a party, or
to which the property of any [●] Subsidiary is subject, before or brought by any
court or governmental agency or body, domestic or foreign, which would
reasonably be expected to result in a Material Adverse Effect, or which would
reasonably be expected to materially and adversely affect the properties or
assets thereof or the consummation of the transactions contemplated in the
Agreement.
(xxxvii) The
execution, delivery and performance of the Agreement and the consummation of the
transactions contemplated in the Agreement and in the Registration Statement
will not, whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or cause an acceleration of
any obligation under or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of any [●] Subsidiary pursuant to any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or any other agreement or instrument, known to us, to which any [●]
Subsidiary is a party or by which any of them may be bound, or to which any of
the property or assets of any [●] Subsidiary is subject (except for such
conflicts, breaches, defaults or accelerations or liens, charges or encumbrances
that would not have a Material Adverse Effect), nor will such action result in
any violation of the provisions of the charter or bylaws of any [●] Subsidiary,
or any applicable law, statute, rule, regulation, judgment, order, writ or
decree, known to [us] [me], of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over any [●] Subsidiary or any
of their respective properties, assets or operations.
(xxxviii)
Each
ship management agreement to which a [●] Subsidiary is a party has been duly
authorized, executed and delivered by the appropriate [●]
Subsidiary.
1 For
clarity, this form of opinion is to be delivered by counsel from each
jurisdiction of subsidiary incorporation. To the extent that there
are additional opinions for United States and Marshall Islands counsel in this
form, they are to be added to the opinion letters issued by such
counsels.
(xxxix) None
of the [●] Subsidiaries nor any of its or their respective properties or assets
will have an immunity from suit, execution, attachment or legal process in any
proceedings taken in [jurisdiction] in relation to the Agreement.
(xl)
No
withholding tax (or any similar tax imposed by any political subdivision or
taxing authority of the relevant jurisdiction) is required to be deducted in
connection with the sale and delivery of the Shares to or for the account of the
Agent or the sale and delivery by the Agent of the Shares to the initial
purchasers thereof. In addition, no documentary stamp or other
issuance or transfer taxes or duties and no capital gains, income or other
taxes, are payable by or on behalf of the Agent to the relevant jurisdiction or
to any political subdivision or taxing authority thereof or therein in
connection with the sale and delivery of the Shares to or for the respective
accounts of the Agent or the sale and delivery by the Agent of the Shares to the
initial purchasers thereof.
(xli) All
dividends and other distributions declared and payable on the shares of capital
stock of any [●] Subsidiary may under the current laws and regulations of
[jurisdiction] be paid in United States dollars and may be freely transferred
out of [jurisdiction] and will not be subject to withholding taxes under the
laws and regulations of [jurisdiction], and are otherwise free and clear of any
other tax, withholding or deduction and without the necessity of obtaining any
consents, approvals, authorizations, orders, licenses, registrations, clearances
and qualifications of or with any court or governmental agency or body or any
stock exchange authorities in [jurisdiction].
Exhibit
A-4
FORM
OF OPINION OF MARSHALL ISLANDS, MALTESE, [OTHER JURISDICTIONS] COUNSEL2
(xlii) Each
of [list vessels / rigs flagged in the relevant jurisdiction] is duly, validly
and permanently registered in the names of [list vessel-owning / rig-owning
subsidiaries], respectively (the “Owners”) under the laws of [jurisdiction] with
the Registrar of [jurisdiction] Ships, under the [jurisdiction]
flag.
(xliii)
The
Owners are subsidiaries of the Company.
(xliv)
The
Owners have good and marketable title to the vessels / rigs free and clear of
any registered liens, charges or encumbrances.
|
|
2 To
be added to opinions for vessel or rig owning
subsidiaries.
|
Exhibit
B
Form
of Lock-Up Agreement
January ,
2008
MERRILL
LYNCH & CO.
Merrill
Lynch, Pierce, Fenner & Smith Incorporated
4
World Financial Center
New
York, New York 10080
Re: Proposed ATM Equity Offering
by DryShips Inc.
Dear
Sirs:
The
undersigned, a stockholder, officer and director of DryShips Inc., a Marshall
Islands corporation (the “Company”), understands that Merrill Lynch, Pierce,
Fenner & Smith Incorporated ( “Merrill Lynch”) propose to enter into a
ATM Equity Offering Sales Agreement (the “Sales Agreement”) with the Company
providing for the public offering of shares (the “Securities”) of the Company’s
common stock, par value $0.01 per share (the “Common Stock”), pursuant to a
Registration Statement on Form F-3 (File No. 333-146540), as amended by
Amendment No. 1 to such Registration Statement filed with the Securities and
Exchange Commission on October 17, 2008 (collectively, the “Registration
Statement”). In recognition of the benefit that such an offering will
confer upon the undersigned as a stockholder, officer and director of the
Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with
Merrill Lynch that, during a period of 60 days from the date of the Sales
Agreement, the undersigned will not, without the prior written consent of
Merrill Lynch, directly or indirectly (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant for the sale of, or otherwise dispose
of or transfer any shares of the Company’s Common Stock or any securities
convertible into or exchangeable or exercisable for Common Stock, whether now
owned or hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition, or file, or
cause to be filed, any registration statement under the Securities Act of 1933,
as amended, with respect to any of the foregoing (collectively, the “Lock-Up
Securities”) or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Lock-Up Securities, whether any such
swap or transaction is to be settled by delivery of Common Stock or other
securities, in cash or otherwise.
Notwithstanding
the foregoing, and subject to the conditions below, the undersigned may transfer
the Lock-Up Securities without the prior written consent of Merrill Lynch,
provided that (1) Merrill Lynch receive a signed lock-up agreement for the
balance of the lockup period from each donee, trustee or transferee, as the case
may be, (2) any such transfer shall not involve a disposition for value,
(3) such transfers are not
required to be reported in any public report or filing with the Securities and
Exchange Commission, or otherwise and (4) the undersigned does not otherwise
voluntarily effect any public filing or report regarding such
transfers:
(1) as a bona fide gift or gifts;
or
(2) to any trust or other
entity for the direct or indirect benefit of, or wholly-owned by, the
undersigned or the immediate family of the undersigned (for purposes of this
lock-up agreement, “immediate family” shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin).
Notwithstanding
the foregoing, if:
(1) during
the last 17 days of the 60 -day lock-up period, the Company issues an earnings
release or material news or a material event relating to the Company occurs;
or
(2) prior
to the expiration of the 60 -day lock-up period, the Company announces that it
will release earnings results or becomes aware that material news or a material
event will occur during the 16-day period beginning on the last day of the 60
-day lock-up period,
the
restrictions imposed by this lock-up agreement shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event, as applicable,
unless Merrill Lynch waives, in writing, such extension.
The
undersigned hereby acknowledges and agrees that written notice of any extension
of the 60 -day lock-up period pursuant to the previous paragraph will be
delivered by Merrill Lynch to the Company (in accordance with Section 11 of
the Sales Agreement) and that any such notice properly delivered will be deemed
to have been given to, and received by, the undersigned. The
undersigned further agrees that, prior to engaging in any transaction or taking
any other action that is subject to the terms of this lock-up agreement during
the period from the date of this lock-up agreement to and including the 34th day
following the expiration of the initial 60 -day lock-up period, it will give
notice thereof to the Company and will not consummate such transaction or take
any such action unless it has received confirmation from the Company that the 60
-day lock-up period (as may have been extended pursuant to the previous
paragraph) has expired.
The
undersigned hereby waives, until the expiration of this agreement, any rights of
the undersigned to sell any Lock-Up Securities or any other security issued by
the Company pursuant to the Registration Statement and acknowledges and agrees
that until the expiration of this agreement, the undersigned will not request
the Company to register under the Securities Act of 1933 such Lock-Up Securities
or other securities beneficially owned by the undersigned.
The
undersigned understands and agrees that the agreements of the undersigned are
irrevocable and shall be binding upon the undersigned’s heirs, legal
representatives, successors and assigns.
The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company’s transfer agent and registrar against the transfer of the
Lock-Up Securities except in compliance with the foregoing
restrictions.
Very
truly yours,
Signature:
_____________________________
Print
Name: ____________________________