Up to $200,000,000 Private Placement QUINTANA MARITIME LIMITED Units Consisting of 12% Mandatorily Convertible Preferred Stock and Warrants PLACEMENT AGENCY AGREEMENT
EXECUTION COPY
Exhibit 10.29
Up to $200,000,000 Private Placement
▇▇▇▇▇▇▇▇ MARITIME LIMITED
Units Consisting of
12% Mandatorily Convertible Preferred Stock and Warrants
12% Mandatorily Convertible Preferred Stock and Warrants
May 8, 2006
▇▇▇▇▇▇▇ ▇▇▇▇ & Co., LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fortis Securities, LLC
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▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇▇▇ Maritime Limited, a ▇▇▇▇▇▇▇▇ Islands corporation (the “Company”), proposes, subject
to the terms and conditions contained herein, to issue and sell up to 2,133,333 shares of 12%
Mandatorily Convertible Preferred Stock, liquidation preference $93.75 per share, which shall have
the rights, powers and preferences set forth in the Statement of Designations (the “Statement of
Designations”) (the “Preferred Stock”), directly to certain investors (collectively, the
“Investors”). The Company will also issue to Investors four (4) warrants (each a “Warrant”) for
each Share purchased pursuant to a Warrant Agreement, dated as of the Closing Date (as defined
below), among the Company and Computershare Investor Services, LLC, as warrant agent (the “Warrant
Agreement”). The Warrants will be exercisable at $8.00 per Share of common stock of the Company
(“Common Stock”) and will expire 3 years from the date of issuance. The Preferred Stock and the
Warrants will be sold in the form of units (the “Units”) at a maximum price per Unit of $93.75
(such Warrants and shares of Preferred Stock being sold as Units in accordance with the terms of
this Agreement and each Subscription Agreement (as defined below) being the “Securities”). In
connection herewith, the Company has entered into a registration rights agreement with respect to
the Securities (the “Registration Rights Agreement”). The Company desires to engage you as its
placement agent (the “Placement Agents”) in connection with such issuance and sale. The Securities
are more fully described in the Confidential Private Placement Memorandum dated May 5, 2006 (the
“Memorandum”) provided to Investors along with the Preliminary Confidential Private Placement
Memorandum dated May 2, 2006, as amended and supplemented by the supplement thereto dated May 5,
2006 (as so amended and supplemented, the “Preliminary Memorandum”), and the Company’s annual
report
on Form 10-K for the fiscal year ended December 31, 2005 (the “2005 10-K”) (the Preliminary
Memorandum, the 2005 10-K and the Memorandum, collectively the “Disclosure Package”).
The Company hereby confirms that the Placement Agents, in connection with their duties in such
capacity, are authorized to distribute or cause to be distributed the Disclosure Package (as from
time to time amended or supplemented if the Company furnishes amendments or supplements thereto to
each Placement Agent) in accordance with the terms of this Agreement.
1. Agreement to Act as Placement Agents, Delivery and Payment. On the basis of the
representations, warranties and agreements contained in, and subject to the terms and conditions
of, this Agreement:
(a) Each Placement Agent agrees to act as the Company’s exclusive placement agent in
connection with the offer and sale, on a best efforts basis, by the Company of the Securities to
the Investors. The Company acknowledges and agrees that the Placement Agents’ engagement hereunder
is not an agreement by such Placement Agent or any of its Affiliates (as defined below) to
underwrite or purchase any securities or otherwise provide any financing. Each Placement Agent may
offer and sell the Securities for the account of the Company through registered or qualified
broker-dealers selected by it (referred to hereafter as “Selected Dealers”) and pursuant to a form
of selling agreement, pursuant to which the Placement Agents may allow a concession out of
commission. The term “Affiliate” means any Person (as defined below) that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144 under the Securities Act of 1933, as
amended (the “1933 Act”). The term “Person” means any individual or corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited liability company or
joint stock company. The Selected Dealers shall be members of the National Association of
Securities Dealers, Inc. (“NASD”). All Selected Dealers shall be registered or qualified, as
applicable, in the relevant jurisdictions in which offers and sales of the Securities are made
through such Selected Dealers, if such registration or qualification is required. All offers and
sales by the Selected Dealers shall be as agents for such Placement Agent. All Selected Dealers
shall agree in writing to comply with all the obligations of the Placement Agents set forth in this
Agreement in connection with the offer and sale of the Securities. As compensation for its
services hereunder, the Company agrees to pay to ▇▇▇▇▇▇▇ ▇▇▇▇ & Co., LLC (“▇▇▇▇▇▇▇ ▇▇▇▇”) by wire
transfer of immediately available funds (a) 4.6% of the aggregate gross proceeds received by the
Company from the sale of the Securities on each Closing Date (as defined below) and (b) 4.6% of the
aggregate gross proceeds received by the Company from the exercise of each Warrant at the time of
such exercise (the “Placement Fee”); provided, that in each case, the Placement Agent will
not receive such fees with respect to the sale of Securities to, or the exercise of Warrants
received on the Closing Date by, ▇▇▇▇▇▇▇▇ Maritime Partners, L.P., First Reserve Corporation, AMCI
International, Inc., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ III, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇ or any of their respective Affiliates (the “Founders”) or King Street Capital
Management, LLC or funds directly or indirectly managed by it; provided
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further, that ▇▇▇▇▇▇▇ ▇▇▇▇ will pay a portion of such Placement Fee to Fortis Securities, LLC
(“Fortis”) in accordance with that certain side letter, dated the date hereof, between ▇▇▇▇▇▇▇ ▇▇▇▇
and Fortis, which is hereby incorporated by reference.
(b) The Placement Agents and the Company may conduct one or more closings with respect to the
Company’s sale of the Securities (each a “Closing”) on such date or dates agreed upon by the
Company and the Placement Agents (each date of payment and delivery of the certificates
representing the Securities being herein called a “Closing Date”) until all of the Securities
offered are sold or the Company terminates the private placement offering (the “Offering”).
(c) Payment of the purchase price for the Securities shall be made by the Investors directly
to a non-interest bearing account maintained in the name of the ▇▇▇▇▇▇▇ ▇▇▇▇ at JPMorgan Chase Bank
by wire transfer in immediately available funds, upon delivery of the Securities to the Investors,
and the Securities shall be registered in such name or names and shall be in such denominations, as
the Investors may request at least two business days before the applicable Closing.
(d) The purchases of the Securities by the Investors shall be evidenced by the execution of a
subscription agreement in the form attached hereto as Exhibit A (the “Subscription
Agreement”).
(e) Prior to the date on which this Agreement is terminated, the Company shall not, without
the prior consent of the Placement Agents, solicit or accept offers to purchase Securities other
than through the Placement Agents.
2. Representations and Warranties of the Company. The Company represents and warrants
to each Placement Agent as of the date hereof, and as of the final Closing Date, as follows:
(a) The Company owns, directly or indirectly, all of the capital stock or comparable equity
interests of each of its subsidiaries free and clear of any liens, other than those liens imposed
by the Company’s existing revolving credit facility and the documents related thereto (the “Credit
Facility”), and all of the issued and outstanding shares of capital stock or comparable equity
interests of the Company and each of its subsidiaries are validly issued and are fully paid,
nonassessable and free of preemptive and similar rights.
(b) Each of the Company and its subsidiaries is an entity duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite legal authority to own, lease and use its properties and assets and
to carry on its business as currently conducted. Neither the Company nor any of its subsidiaries
is in violation of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents. Each of the Company and its
subsidiaries is duly qualified to do business and is in good standing as a foreign corporation or
other entity in each jurisdiction in which the nature of the business conducted or property owned
by it makes
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such qualification necessary, except where the failure to be so qualified or in good standing,
as the case may be, could not, individually or in the aggregate, (i) have or result in a material
adverse effect on the results of operations, assets, business, prospects or financial condition of
the Company and its subsidiaries, taken as a whole on a consolidated basis, or (ii) materially and
adversely impair the Company’s ability to perform its obligations under this Agreement, the
Subscription Agreement, the Registration Rights Agreement, the Statement of Designations or the
Warrant Agreement (collectively, the “Transaction Documents”) (either of clause (i) or (ii), a
“Material Adverse Effect”).
(c) Except as otherwise set forth in the Credit Facility or as described in or contemplated by
the Memorandum, no subsidiary of the Company is currently prohibited, directly or indirectly, from
paying any dividends to the Company, from making any other distribution on such subsidiary’s
capital stock, from repaying to the Company any loans or advances to such subsidiary from the
Company or from transferring any of such subsidiary’s property or assets to the Company or any
other subsidiary of the Company.
(d) The Company has the requisite corporate authority to enter into and to consummate the
transactions contemplated by the Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of each of the Transaction Documents to which
it is a party by the Company and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the part of the Company and no further
consent or action is required by the Company, its board of directors or its stockholders (other
than with respect to the conversion or exercise, as the case may be, of the shares of Preferred
Stock or Warrants into Common Stock). Each of the Transaction Documents to which it is a party has
been, or upon delivery will be, duly executed by the Company and is, or when delivered in
accordance with the terms hereof will constitute, the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as may be limited by (i)
applicable bankruptcy, insolvency, fraudulent conveyance, transfer, reorganization, moratorium or
similar laws relating to or affecting the enforcement of creditors rights generally, (ii) the
effect of rules of law governing the availability of specific performance and other equitable
remedies and (iii) public policy, applicable law relating to fiduciary duties and indemnification
and an implied covenant of good faith and fair dealings.
(e) The execution, delivery and performance by the Company of the Transaction Documents to
which it is a party and the consummation by the Company of the transactions contemplated hereby and
thereby do not, and will not, (i) conflict with or violate any provision of the Company’s or any of
its subsidiaries’ certificate or articles of incorporation, bylaws or other organizational or
charter documents, (ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time or both) of any
agreement, credit facility, debt or other instrument (evidencing a Company or any of its
subsidiaries debt or otherwise) to which the Company or any subsidiary is a party or by which any
property
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or asset of the Company or any of its subsidiaries is bound, except to the extent that such
conflict, default, termination, amendment, acceleration or cancellation right would not reasonably
be expected to have a Material Adverse Effect other than with respect to Section 20.8 of the Credit
Facility, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority, including, without limitation,
the International Maritime Association (the “IMO”) or any self-regulatory organization, to which
the Company or any of its subsidiaries is subject, or by which any property or asset of the Company
or any of its subsidiaries is bound, except to the extent that such violation would not reasonably
be expected to have a Material Adverse Effect.
(f) The shares of Preferred Stock are duly authorized and, when issued and paid for in
accordance with the Transaction Documents, will be duly and validly issued, fully paid and
nonassessable. The Warrants are duly authorized, and when issued and paid for in accordance with
the Transaction Documents, will constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms. Upon conversion of the shares of
Preferred Stock in accordance with the terms thereof, the underlying Common Stock will be validly
issued, fully paid and nonassessable. Upon exercise of the Warrants in accordance with the terms
thereof and the payment therefor, the underlying Common Stock will be validly issued, fully paid
and nonassessable. The issuance and delivery of the Securities are free and clear of all liens and
will not be subject to preemptive or similar rights of stockholders. The Company has reserved from
its duly authorized capital stock the maximum number of shares of Common Stock issuable upon
conversion of the shares of Preferred Stock and exercise of the Warrants.
(g) There are no restrictions on subsequent transfers of the Securities or the Common Stock
convertible or exercisable therefor under the laws of the Republic of the ▇▇▇▇▇▇▇▇ Islands or
Greece.
(h) The Company’s authorized equity capitalization is as set forth in the Memorandum. As of
April 30, 2006, 23,846,742 shares of the Company’s Common Stock were issued and outstanding and no
warrants or options or other rights to purchase shares of Common Stock were issued and outstanding
except as disclosed in the Memorandum. After giving effect to the transactions contemplated by the
Subscription Agreement and assuming that the maximum number of Securities contemplated by this
Agreement are sold in connection with the Offering, 23,846,742 shares of Common Stock will be
issued and outstanding, 2,133,333 shares of 12% Mandatorily Convertible Preferred Stock will be
issued and outstanding and Warrants to purchase 8,533,332 shares of Common Stock will be issued and
outstanding. The certificates evidencing the Securities are in due and proper legal form and have
been duly authorized for issuance by the Company. All of the issued and outstanding shares of
Common Stock have been duly and validly issued and are fully paid and nonassessable. There are no
statutory preemptive or other similar rights to subscribe for or to purchase or acquire any shares
of capital stock of the Company or any such rights pursuant to its Amended and Restated Articles of
Incorporation, except as disclosed in the Disclosure Package, or any agreement or instrument to or
by which the Company is a party or bound other than the
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Company’s 2005 Stock Incentive Plan. Except as disclosed in the Disclosure Package, there is
no outstanding option, warrant or other right calling for the issuance of, and there is no
commitment, plan or arrangement to issue, any share of capital stock of the Company or any security
convertible into, or exercisable or convertible for, such stock. The Securities conform in all
material respects to all descriptions thereof contained in the Memorandum. Other than as set forth
in the Disclosure Package or the Company’s 2005 Stock Incentive Plan, there are no anti-dilution or
price adjustment provisions contained in any security issued by the Company (or in any agreement
providing rights to security holders) and the issuance and sale of the Securities will not obligate
the Company to issue shares of Common Stock or other securities to any Person (other than pursuant
to the terms of the Transaction Documents) and will not result in a right of any holder of
securities to adjust the exercise, conversion, exchange or reset price under such securities. To
the knowledge of the Company, except as specifically disclosed in the Disclosure Package, no Person
or group of related Persons beneficially owns (as determined pursuant to Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the “1934 Act”)), or has the right to acquire, by
agreement with or by obligation binding upon the Company, beneficial ownership of in excess of 5%
of the outstanding Common Stock, ignoring for such purposes any limitation on the number of shares
of Common Stock that may be owned at any single time.
(i) The Company has filed all reports required to be filed by it under the 1934 Act, including
pursuant to Section 13(a) or 15(d) thereof (the foregoing materials being collectively referred to
herein as the “SEC Reports”), on a timely basis or has received a valid extension of such time of
filing for any of the SEC Reports and has filed any such SEC Reports prior to the expiration of any
such extension. As of their respective dates, the SEC Reports complied in all material respects
with the requirements of the 1933 Act and the 1934 Act and the rules and regulations promulgated by
the Securities and Exchange Commission (the “SEC”) thereunder, and none of the SEC Reports, when
filed, contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The historical financial statements
of the Company included in the SEC Reports and the Disclosure Package comply in all material
respects with applicable accounting requirements and the rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance with United States
generally accepted accounting principles (“GAAP”), applied on a consistent basis during the periods
involved, except as may be otherwise specified in such financial statements or the notes thereto,
and fairly present in all material respects the consolidated financial position of the Company and
its consolidated subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited statements, to normal,
year-end audit adjustments. The forward-looking statements contained under the caption “Certain
Prospective Financial Information” in the Memorandum reflects the Company’s good faith beliefs
and/or estimates with respect to the matters described in such statements and are based upon (a)
the Company’s analysis of such information and factors as it deemed relevant to such statements and
(b) such assumptions as the Company deemed reasonable with respect to such statements.
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(j) Since the date of the latest audited financial statements included within the Disclosure
Package, except as specifically disclosed in the Disclosure Package, (i) there has been no event,
occurrence or development in the business, financial condition or results of operations of the
Company and its subsidiaries taken as a whole that, individually or in the aggregate, has had or
could result in a Material Adverse Effect, (ii) neither the Company nor any subsidiary has incurred
any material liabilities other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed in
filings made with the SEC, (iii) the Company has not altered its method of accounting or changed
its auditors, (iv) other than regular quarterly dividends declared and paid in accordance with the
Company’s dividend policy set forth in the Memorandum, the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders, in their capacities as
such, or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital
stock (except for repurchases by the Company of shares of capital stock held by employees,
officers, directors or consultants pursuant to an option of the Company to repurchase such shares
upon the termination of employment or services) and (v) the Company has not issued any equity
securities to any officer, director or Affiliate, other than pursuant to the Company’s 2005 Stock
Incentive Plan, this private placement or as disclosed in the SEC Reports.
(k) Any statistical and market-related data included in the Disclosure Package are based on or
derived from sources that the Company believes to be reliable and accurate.
(l) Except as disclosed in the Disclosure Package, there is no action, suit, claim or
proceeding, or, to the Company’s knowledge, inquiry or investigation, before or by any court,
public board, government agency, self-regulatory organization or body, including, without
limitation, the IMO, pending or, to the knowledge of the Company, threatened against or affecting
the Company or any of its subsidiaries that could, individually or in the aggregate, have a
Material Adverse Effect.
(m) Neither the Company nor any of its subsidiaries, other than with respect to Section 20.8
of the Credit Facility, (i) is in default under or in violation of (and no event has occurred that
has not been waived that, with notice or lapse of time or both, would result in a default by the
Company or any of its subsidiaries under), nor has the Company or any of its subsidiaries received
written notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it
or any of its properties is bound (whether or not such default or violation has been waived), or
(ii) is or has been in violation of any statute, rule, law or regulation of any governmental
authority, including the IMO, or any order of any court or arbitrator, except to the extent that
any such default or violation would not reasonably be expected to have a Material Adverse Effect.
(n) No consent, approval, authorization, filing with or order of any court or governmental
agency or body in the United States, the Republic of the ▇▇▇▇▇▇▇▇ Islands, Greece or any other
foreign jurisdiction, including, without limitation, the IMO,
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is required in connection with the transactions contemplated herein, except (i) such as may be
required under the blue sky laws of any jurisdiction in connection with the distribution of the
Securities in the manner contemplated herein and in the Memorandum, (ii) such as may be required
under the laws of the Republic of the ▇▇▇▇▇▇▇▇ Islands in connection with the change of ownership
of the vessels set forth on Schedule I to this Agreement or in connection with the amendment of the
Company’s Articles of Incorporation to reflect the Statement of Designations or (iii) such as may
be required to be filed with the Securities and Exchange Commission.
(o) Except with respect to those liens on Company assets imposed by the Credit Facility, the
Company and its subsidiaries have good and marketable title in fee simple to, or have valid and
enforceable rights to lease or otherwise use, all items of real or personal property that are
material to the business of the Company and its subsidiaries taken as a whole, in each case free
and clear of all liens, encumbrances, claims and defects that would have a Material Adverse Effect.
(p) Neither the Company, nor any of its Affiliates, nor any Person acting on its or their
behalf (other than the Placement Agents as to which the Company make no representation), has
engaged in any form of general solicitation or general advertising (within the meaning of
Regulation D under the 1933 Act (“Regulation D”)) in connection with the offer or sale of the
Securities. The Company shall be responsible for the payment of the Placement Fee and any
financial advisory fees in connection with the Acquisition as described in the Memorandum or any
transactions related thereto.
(q) Neither the Company nor any of its Affiliates nor any Person acting on the Company’s
behalf has, directly or indirectly, at any time within the past six months, made any offer or sale
of any security or solicitation of any offer to buy any security under circumstances that would
eliminate the availability of the private placement exemption from registration in connection with
the offer and sale by the Company of the Securities as contemplated hereby. The Company is not
required to be registered, and after giving effect to the transactions contemplated by the
Memorandum will not be required to register as, and is not an Affiliate of, an “investment company”
within the meaning of the Investment Company Act of 1940, as amended.
(r) The Company has not, in the 12 months preceding the date hereof, received notice (written
or oral) from any trading market on which the Common Stock is or has been listed or quoted to the
effect that the Company is not in compliance with the listing or maintenance requirements of such
trading market. The Company is in compliance in all material respects with all such listing and
maintenance requirements.
(s) The Company has not taken, directly or indirectly, any action designed to or that would
constitute or that might reasonably be expected to cause or result in, under the 1934 Act or
otherwise, stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(t) The Company does not believe that it is a Passive Foreign Investment Company (“PFIC”)
within the meaning of Section 1296 of the United States
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Internal Revenue Code of 1986, as amended, and does not believe it is likely to become a PFIC.
(u) Except pursuant to that certain registration rights agreement issued in connection with
the Company’s initial public offering granting registration rights to the Founders and their
affiliates, no Person has any rights (including “piggy-back” registration rights) to have any
securities of the Company registered with the SEC under the 1933 Act because of the filing or
effectiveness of a registration statement or otherwise in connection with the issuance of the
Securities, other than pursuant to this Agreement and the Registration Rights Agreement.
(v) There is no control share acquisition, business combination, or shareholder rights plan or
similar plan under the Company’s charter documents or the laws of its jurisdiction of incorporation
that is or could become applicable to any of the Investors as a result of the Investors and the
Company fulfilling their obligations or exercising their rights under the Transaction Documents,
including, without limitation, as a result of the Company’s issuance of the Securities and the
Investors’ ownership of the Securities.
(w) The Company confirms that neither it nor any officers, directors or Affiliates, has
provided any potential Investor (other than Excluded Investors or Investors who have executed a
non-disclosure agreement with the Placement Agents) or their agents or counsel with any information
that constitutes or might constitute material, nonpublic information (other than the existence and
terms of the issuance of Securities, as contemplated by this Agreement). The term “Excluded
Investors” means each Placement Agent and its Affiliates. The Company understands and confirms
that each of the Investors will rely on the foregoing representations in effecting transactions in
securities of the Company (other than Excluded Investors). All disclosures in the Disclosure
Package are true and correct in all material respects and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not misleading. To the
Company’s knowledge, no event or circumstance has occurred or information exists with respect to
the Company or any of its subsidiaries or its or their business, properties, operations or
financial conditions, which, under applicable law, rule or regulation, requires public disclosure
or announcement by the Company but which has not been so publicly announced or disclosed. The
Company acknowledges and agrees that no Investor (other than Excluded Investors) makes or has made
any representations or warranties with respect to the transactions contemplated hereby other than
those specifically set forth in the Transaction Documents.
(x) To its knowledge, the Company and its subsidiaries own, or possess adequate rights or
licenses to use, all trademarks, trade names, service marks, service ▇▇▇▇ registrations, service
names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and other intellectual property rights (the “Intellectual Property
Rights”) necessary to conduct their respective businesses as now conducted. The Company does not
have any knowledge of any infringement by the Company or its subsidiaries of the Intellectual
Property Rights of
9
others, except for such as would not reasonably be expected to have a Material Adverse Effect.
There is no claim, action or proceeding being made or brought, or to the knowledge of the Company
being threatened, against the Company or its subsidiaries regarding the Intellectual Property
Rights, which could reasonably be expected to have a Material Adverse Effect.
(y) The Company and each of its subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are reasonably adequate and
customary in the businesses in which they are engaged; all policies of insurance and fidelity or
surety bonds insuring the Company or any of its subsidiaries or their respective businesses,
assets, employees, officers and directors are in full force and effect; the Company and its
subsidiaries are in compliance with the terms of such policies and instruments in all material
respects; there are no claims by the Company or any of its subsidiaries under any such policy or
instrument as to which any insurance company or other institution is denying liability or defending
under a reservation of rights clause; and neither the Company nor any such subsidiary has any
reason to believe that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse Effect.
(z) The Company and its subsidiaries possess, all licenses, certificates, permits and other
authorizations (“Permits”) issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective businesses in the manner described in the
Disclosure Package, except for such Permits, that if not obtained, would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect; and neither the Company
nor any such subsidiary has received any notice of proceedings relating to the revocation or
modification of any such Permits which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect.
(aa) Except as set forth in the Disclosure Package and SEC Reports, none of the officers,
directors or employees of the Company is presently a party to any transaction that would be
required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC under the
1933 Act.
(bb) The Company and its subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to maintain asset
accountability, (iii) 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. Based on the evaluation of its internal controls over financial reporting, the
Company is not aware of (A) any significant deficiency or material weakness in the design or
operation of internal controls over financial reporting that are reasonably likely to adversely
affect the Company’s ability to record, process, summarize and report financial
10
information or (B) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company’s internal controls over financial reporting.
(cc) The Company is in compliance with applicable requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002 and applicable rules and regulations promulgated by the SEC thereunder, except where such
noncompliance would not have, individually or in the aggregate, a Material Adverse Effect.
(dd) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, employee or other Person acting on behalf of the Company or any of its
subsidiaries has, in the course of its actions for, or on behalf of, the Company (i) used any
corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses
relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds; (iii) violated or is in violation of
any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any
foreign or domestic government official or employee.
(ee) 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 or any of
its subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of
the Company, threatened.
(ff) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate 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.
(gg) No labor disturbance by the employees of the Company or any of its subsidiaries exists
or, to the best of the Company’s knowledge, is imminent that might be expected to have a Material
Adverse Effect. The Company is not aware that any key employee or significant group of employees of
the Company or any subsidiary plans to terminate employment with the Company or any such
subsidiary.
11
(hh) The Company and its subsidiaries are (i) in compliance with any and all applicable
foreign, federal, state and local laws and regulations, including those of the IMO, relating to the
protection of human health and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (“Environmental Laws”), (ii) have received and are in compliance with
all permits, licenses or other approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) have not received notice of any actual or potential
liability under any Environmental Law, except where such non-compliance with Environmental Laws,
failure to receive required permits, licenses or other approvals, or liability would not,
individually or in the aggregate, have a Material Adverse Effect, except as set forth in or
contemplated in the Memorandum. Except as set forth in the Memorandum, neither the Company nor any
of the subsidiaries has been named as a “potentially responsible party” under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended.
(ii) The Company has reviewed the effect of Environmental Laws on the business, operations and
properties of the Company and its subsidiaries. On the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities would not, singly or in the
aggregate, have a Material Adverse Effect, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Memorandum.
(jj) Each memorandum of agreement (the “Memorandum of Agreement”) relating to the purchase of
the three Panamax drybulk carriers and fourteen Kamsarmax drybulk carriers referred to in the
Memorandum is in full force and effect.
(kk) The Novation Agreement among Metrostar Management Corporation (“Metrostar”), ▇▇▇▇▇ ▇.▇.
of Geneva (“Bunge”) and the Company, dated April 27, 2006, has been duly authorized, executed and
delivered by Metrostar and Bunge, and is in full force and effect as against such parties.
(ll) The Company and its subsidiaries each (i) has filed all necessary federal, state and
foreign income and franchise tax returns which are due, (ii) has paid all federal state, local and
foreign taxes due and payable for which it is liable and (iii) does not have any tax deficiency or
claims outstanding or assessed or, to the best of the Company’s knowledge, proposed against it that
would have a Material Adverse Effect.
(mm) 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 Placement Agents or the
Investors to the Republic of the ▇▇▇▇▇▇▇▇ Islands or Greece, or to any political subdivision or
taxing authority thereof or therein in connection with the sale and delivery by the Company of the
Securities to or for the respective accounts of the Investors or the sale and delivery by the
Company of the Securities to the Investors.
(nn) 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
12
Republic of the ▇▇▇▇▇▇▇▇ Islands and Greece and any political subdivisions thereof, be paid in
U.S. dollars and may be freely transferred out of the Republic of the ▇▇▇▇▇▇▇▇ Islands and Greece,
and all such dividends and other distributions will not be subject to withholding or other taxes
under the laws and regulations of the Republic of the ▇▇▇▇▇▇▇▇ Islands and Greece 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 in the Republic of the ▇▇▇▇▇▇▇▇
Islands and Greece.
(oo) Neither the Company, its subsidiaries, nor any of their properties or assets has any
immunity from the jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution or otherwise) under the law of
the United States, the Republic of the ▇▇▇▇▇▇▇▇ Islands or Greece or any political subdivisions
thereof.
3. Representations and Warranties of each Placement Agent. Each Placement Agent
hereby represents, warrants and covenants to the Company, that:
(a) It acknowledges that the Securities have not been registered under the 1933 Act and may be
offered and sold only in transactions exempt from or not subject to the registration requirements
of the 1933 Act.
(b) It has not offered or sold, and will not offer or sell, any Securities except in
compliance with paragraphs (c) through (f) below.
(c) It is a duly registered broker-dealer with the SEC and a member in good standing of the
NASD.
(d) Offers and sales of the Securities by it have not been and shall not be made (i) by any
form of general solicitation or general advertising (as those terms are used in Regulation D),
including advertisements, articles, notices or other communications published in any newspaper,
magazine, or similar media or broadcast over radio or television, or any seminar or meeting whose
attendees had been invited by general solicitation or general advertising or (ii) in any manner
involving a public offering within the meaning of Section 4(2) of the 1933 Act.
(e) Other than offers and sales made to the Founders, any offer, sale or solicitation of an
offer to buy the Securities that has been made or will be made was or will be made only (i) to
institutional “accredited investors” as such term is defined under Rule 50(a)(1), (2), (3) or (7)
of the 1933 Act and are exempt, or are in transactions that are exempt, from registration under the
1933 Act and applicable state securities laws and (ii) pursuant to a Subscription Agreement.
(f) It has delivered to each offeree and to each purchaser of the Securities a copy of the
Preliminary Memorandum, the Supplement and 2005 10-K and will deliver to each Purchaser the
Memorandum.
13
4. Conditions of the Placement Agents’ Obligations. The obligations of the Placement
Agents are subject to each of the following terms and conditions:
(a) The representations and warranties of the Company contained in this Agreement and in the
certificates delivered pursuant to Section 4(b) shall be true and correct when made and on and as
of the relevant Closing Date as if made on such date. The Company shall have performed all
covenants and agreements and satisfied all the conditions contained in this Agreement required to
be performed or satisfied by it at or before the relevant Closing Date.
(b) The Placement Agents shall have received on the each Closing Date a certificate, addressed
to the Placement Agents and dated the relevant Closing Date of the chief executive officer or chief
operating officer and the chief financial officer or chief accounting officer of the Company to the
effect that: (i) the representations, warranties and agreements of the Company in this Agreement
were true and correct when made and are true and correct as of the relevant Closing Date; (ii) the
Company has performed all covenants and agreements and satisfied all conditions contained herein;
and (iii) they have carefully examined the Disclosure Package and, in their opinion (A) as of the
date of the Memorandum, the Disclosure Package did not include any untrue statement of a material
fact and did not omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made, not misleading, and
(B) since the date of the Memorandum no event has occurred which should have been disclosed in a
supplement or an amendment to the Disclosure Package in order to make the statements therein not
include any untrue statement of a material fact or not omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading.
(c) There shall not have been, since the date of the Memorandum, (A) any material adverse
change in the condition, financial or otherwise, of the Company or in the affairs or business
prospects of the Company and (B) incurrence by the Company of material liabilities or obligations
(direct or contingent) or any disposal of any of the Company’s material assets or any material
transaction entered into by the Company other than those in the ordinary course of business or as
described in the Memorandum.
(d) The Placement Agents shall have received on the relevant Closing Date from ▇▇▇▇▇▇ & ▇▇▇▇▇▇
L.L.P., United States counsel for the Company, satisfactory to the Placement Agents, an opinion,
addressed to the Placement Agents and dated the Closing Date, substantially in the form attached
hereto as Exhibit B.
(e) The Placement Agents shall have received on the relevant Closing Date from ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ LLP, the Republic of the ▇▇▇▇▇▇▇▇ Islands counsel for the Company, satisfactory to the
Placement Agents, an opinion, addressed to the Placement Agents and dated the Closing Date,
substantially in the form attached hereto as Exhibit C.
(f) The Placement Agents shall have received on the relevant Closing Date from ▇▇▇▇▇ ▇▇▇▇▇▇,
general counsel for the Company, satisfactory to the Placement
14
Agents, an opinion, addressed to the Placement Agents and dated the Closing Date,
substantially in the form attached hereto as Exhibit D.
(g) The Registration Rights Agreement shall have been duly authorized and executed by the
Company.
(h) Prior to the Closing Date, the Statement of Designations in the form attached hereto as
Exhibit E will be duly executed and acknowledged by the Company and filed with the
Registrar of Companies of the Republic of the ▇▇▇▇▇▇▇▇ Islands and will become effective in
accordance with the provisions of the Business Corporations Act of the Republic of the ▇▇▇▇▇▇▇▇
Islands.
(i) Each Memorandum of Agreement is in full force and effect on Closing Date; no party thereto
has exercised a right to terminate any Memorandum of Agreement as of the Closing Date and no party
thereto is in default under any Memorandum of Agreement as of the Closing Date.
(j) The Charter Party and Block Agreement, as amended, dated as of November 21, 2005, between
Metrostar Management Corp. and ▇▇▇▇▇ ▇.▇. of Geneva (the “Master Charter”) is in full force and
effect on the Closing Date; no party thereto has exercised a right to terminate the Master Charter
as of the Closing Date and no party thereto is in default under Master Charter as of the Closing
Date.
(k) On or prior to the Closing Date, the Company will have received a firm commitment from
Fortis Bank N.V./S.A. for a new $735 senior secured revolving credit facility as contemplated in
the section entitled “The Acquisition” in the Memorandum.
(l) On or prior to the Closing Date, the Company has obtained and delivered to the Placement
Agents a waiver of Section 20.8 of the Credit Facility herein and in the Memorandum.
(m) The Company has obtained and delivered to the Placement Agents a waiver with respect to
the registration rights agreement, dated as of April 8, 2005, between the Company and ▇▇▇▇▇▇▇▇
Maritime Investors LLC.
(n) The Company shall have furnished or caused to be furnished to the Placement Agents such
further certificates or documents as the Placement Agents shall have reasonably requested.
5. Covenants of the Company.
(a) The Company covenants and agrees as follows:
(i) The Company will notify the Placement Agents and/or their counsel promptly, and confirm
the notice in writing, of the initiation by the SEC or any state securities commission of any
proceeding against the Company.
15
(ii) The Company will give the Placement Agents notice of its intention to amend or supplement
the Disclosure Package.
(iii) If any event shall occur as a result of which it is necessary, in the reasonable opinion
of the Placement Agents and the Company, to amend or supplement the Disclosure Package in order to
make the Disclosure Package not misleading, the Company will forthwith amend or supplement the
Disclosure Package by preparing and furnishing to the Placement Agents a reasonable number of
copies of an amendment or amendments of, or a supplement or supplements to, the Disclosure Package
(in form and substance reasonably satisfactory to the Placement Agents and the Company), so that,
as so amended or supplemented, the Disclosure Package will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances in which they were made, not misleading.
(iv) In the event that the Company is not subject to periodic reporting requirements of the
1934 Act, the Company shall deliver to the Placement Agents and any Investor who so requests (a) as
soon as available, and in any event within forty-five (45) days after the end of each respective
quarterly fiscal period (except the last) of each fiscal year of the Company, copies of the balance
sheets of the Company as of the end of such quarterly fiscal period, and the related statements of
operations and cash flows of the Company for such quarterly fiscal period and for the portion of
the fiscal year ending with such period, all in reasonable detail, and certified by the chief
financial officer of the Company, as being true and correct in all material respects, as having
been prepared in accordance with GAAP; and (b) as soon as available and in any event within ninety
(90) days after the close of each respective fiscal year of the Company, copies of the audited
balance sheets of the Company as of the close of such fiscal year and the related audited
statements of operations and cash flows of the Company for such fiscal year, all in reasonable
detail and accompanied by an opinion thereon of independent public accountants of the Company to
the effect that such financial statements have been prepared in accordance with GAAP and fairly
present in all material respects the financial condition and results of operations of the Company.
(v) The Company shall cooperate with the Placement Agents and their counsel in endeavoring to
qualify the Securities for offer and sale in connection with the Offering under the laws of such
states in the United States as the Placement Agents may reasonably designate and shall maintain
such qualifications in effect so long as reasonably required for the distribution of the
Securities; provided, however, that the Company shall not be required in connection
therewith to qualify as a foreign corporation in any jurisdiction in which it is not now so
qualified or to take any action that would subject it to general consent to service of process or
taxation other than as to matters and transactions relating to the Disclosure Package or the
offering for sale of the Securities, in any jurisdiction in which it is now so subject.
(vi) Except as required by the rules and regulations of the 1934 Act in connection with the
transactions contemplated by the Memorandum, prior to the earlier of the termination of this
Agreement or the final Closing Date, the Company will issue no
16
press release or other communications directly or indirectly and hold no press conference with
respect to the Company, its condition, financial or otherwise, or its earnings, business affairs or
business prospects, or the offering of the Securities without the prior written consent of the
Placement Agents, which consent shall not be unreasonably withheld or delayed, unless in the
judgment of the Company and its counsel, and after notification to the Placement Agents, such press
release or communication is required by law.
(vii) The Company will apply the net proceeds from the offering of the Securities in the
manner set forth under “Use of Proceeds” in the Memorandum subject to the qualifications set forth
in the “Risk Factors” therein.
(viii) Prior to the Closing Date, the Statement of Designations will be duly executed and
acknowledged by the Company and filed with the Registrar of Companies of the Republic of the
▇▇▇▇▇▇▇▇ Islands and will become effective in accordance with the provisions of the Business
Corporations Act of the Republic of the ▇▇▇▇▇▇▇▇ Islands.
(b) The Company agrees to pay, or reimburse if paid by the Placement Agents, whether or not
the transactions contemplated hereby are consummated or this Agreement is terminated, all costs and
expenses incident to the performance of the obligations of the Company under this Agreement
including those relating to: (i) the preparation, printing, filing (if required) and distribution
of the Disclosure Package, all amendments and supplements to the Disclosure Package, including all
exhibits thereto; (ii) the preparation and delivery of certificates for the shares of Preferred
Stock; (iii) the qualification of the Securities for offer and sale under the securities or blue
sky laws, including the reasonable fees and disbursements of counsel for the Placement Agents in
connection with such qualification and the preparation, printing, distribution and shipment of
preliminary and supplementary blue sky memoranda; (iv) the furnishing (including costs of shipping
and mailing) to the Placement Agents of copies of the Disclosure Package, amendments or supplements
to the Memorandum, and of the several documents required by this Section 5 to be so furnished, as
may be reasonably requested for use in connection with the offering and sale of the Securities; (v)
the costs and expenses by or on behalf of the Company relating to investor presentations in
connection with the marketing of the offering of the Securities, including, without limitation,
expenses associated with the production of slides and graphics, fees and expenses of any
consultants engaged in connection with the presentations, travel and lodging expenses of the
representatives and officers of the Company and any such consultants; and (vii) all reasonable
out-of-pocket expenses of the Placement Agents or any agent thereof (including reasonable fees and
expenses of legal counsel) in connection with the performance of the services hereunder.
6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Placement Agent and each Person, if
any, who controls a Placement Agent within the meaning of Section 15 of the 1933 Act and each
director, officer, employee or agent of a
17
Placement Agent against any and all losses, claims, damages and liabilities, joint or several
(including any reasonable investigation, legal and other expenses incurred in connection with any
action, suit or proceeding or any claim asserted), to which it, or any of them, may become subject
under the federal, foreign or state law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Disclosure Package or any amendment
thereof or supplement thereto, or arise out of or are based upon any omission to state therein a
material fact required to be stated therein or necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading; provided, however, that such
indemnity shall not inure to the benefit of any Placement Agent (or any Person controlling such
Placement Agent) on account of any losses, claims, damages or liabilities arising from the sale of
the Securities if such untrue statement or omission or alleged untrue statement or omission was
made in the Disclosure Package, in reliance upon and in conformity with information furnished in
writing to the Company by such Placement Agent specifically for use therein. This indemnity
agreement will be in addition to any liability which the Company may otherwise have.
(b) Each Placement Agent agrees to indemnify and hold harmless the Company, and each Person,
if any, who controls the Company within the meaning of Section 15 of the 1933 Act, each director,
officer and employee of the Company against any and all losses, claims, damages and liabilities,
joint or several (including any reasonable investigation, legal and other expenses incurred in
connection with any action, suit or proceeding or any claim asserted) to which they, or any of
them, may become subject under the federal, foreign or state law or regulation, at common law 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 Disclosure Package, 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
Disclosure Package in reliance upon and in conformity with written information furnished to the
Company by such Placement Agents\ expressly for use therein provided, however, that the obligation
of any Placement Agent to indemnify the Company (including any controlling Person, director,
officer or employee thereof) shall be limited to the amount of placement agent fees actually
received by such Placement Agent pursuant to this Agreement. This indemnity agreement will be in
addition to any liability which the Placement Agents may otherwise have.
(c) Any party that proposes to assert the right to be indemnified under this Section 6 will,
promptly after receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim is to be made against an indemnifying party or parties under this
Section 6, notify each such indemnifying party of the commencement of such action, suit or
proceeding, enclosing a copy of all papers served. No indemnification provided for in Section 6(a)
or 6(b) shall be available to any party who shall fail to give notice as provided in this Section
6(c) if the party to whom notice was not given was unaware of the proceeding to which such notice
would have
18
related but the omission to so notify such indemnifying party of any such action, suit or
proceeding shall only relieve it from liability to the extent that it was prejudiced by the failure
to give such notice and shall not relieve it from any liability that it may have to any indemnified
party for contribution or otherwise than under this Section 6. In case any such action, suit or
proceeding 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 in, and,
to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its election so to assume the
defense thereof and the approval by the indemnified party of such counsel, the indemnifying party
shall not be liable to such indemnified party for any legal or other expenses, except as provided
below and except for the reasonable costs of investigation subsequently incurred by such
indemnified party in connection with the defense thereof. The indemnified party shall have the
right to employ separate counsel in any such action, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized in writing by the indemnifying parties, (ii) the indemnified
party shall have been advised by counsel that there may be one or more legal defenses available to
it which are different from or in addition to those available to the indemnifying party (in which
case the indemnifying parties shall not have the right to direct the defense of such action on
behalf of the indemnified party) or (iii) the indemnifying parties shall not have employed counsel
to assume the defense of such action within a reasonable time after notice of the commencement
thereof, in each of which cases the fees and expenses of one separate counsel shall be at the
expense of the indemnifying parties. An indemnifying party shall not be liable for any settlement
of any action, suit and proceeding or claim effected without its written consent, which consent
shall not be unreasonably withheld or delayed.
7. Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 6(a) or 6(b) is due in
accordance with its terms but for any reason is unavailable to or insufficient to hold harmless an
indemnified party in respect to any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate losses, liabilities,
claims, damages and expenses (including any investigation, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding
or any claims asserted) incurred by such indemnified party, as incurred, in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one hand and the
Placement Agents on the other hand from the offering of the Securities pursuant to this Agreement
or, if such allocation is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to above but also the relative fault of the Company
on the one hand and the Placement Agents on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any
other relevant equitable considerations. The Company and the Placement Agents agree that it would
not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take account of the equitable
considerations referred to above. The
19
aggregate amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission. Notwithstanding the provisions of this Section 7, no Placement Agent
shall be required to contribute any amount in excess of the amount of placement agent fees actually
received by such Placement Agent pursuant to this Agreement. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to
contribution from any Person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 7, each Person, if any, who controls a Placement Agent or the Company within the
meaning of Section 15 of the 1933 Act and each director, officer and employee of a Placement Agent
or the Company shall have the same rights to contribution as such Placement Agent or the Company.
Any party entitled to contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for contribution may be
made against another party or parties under this Section 7, notify such party or parties from whom
contribution may be sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have hereunder or otherwise than under this Section
7. No party shall be liable for contribution with respect to any action, suit, proceeding or claim
settled without its written consent.
8. Termination.
(a) This Agreement may be terminated at any time by the Placement Agents by notifying the
Company in the absolute discretion of the Placement Agents if: (i) there has occurred any material
adverse change in the securities markets or any event, act or occurrence that has materially
disrupted, or in the opinion of the Placement Agents, will in the future materially disrupt, the
securities markets, or there shall be such a material adverse change in general financial,
political or economic conditions or the effect of international conditions on the financial markets
in the United States is such as to make it, in the judgment of the Placement Agents, inadvisable or
impracticable to market the Securities or enforce contracts for the sale of the Securities; (ii)
there has occurred any outbreak or material escalation of hostilities or other calamity or crisis
the effect of which on the financial markets of the United States is such as to make it, in the
judgment of the Placement Agents, inadvisable or impracticable to market the Securities or enforce
contracts for the sale of the Securities; (iii) trading in the Securities or any securities of the
Company has been suspended or materially limited by the SEC or trading generally on the
Over-The-Counter Market has been suspended or materially limited, or minimum or maximum ranges for
prices for securities shall have been fixed, or maximum ranges for prices for securities have been
required, by any of said exchanges or by such system or by order of the SEC, the NASD, or any other
governmental or regulatory authority; (iv) a banking moratorium has been declared by any state or
federal authority; (v) in the judgment of the Placement Agents, there has been, since the time of
execution of this Agreement or since the respective dates as of which information is
20
given in the Memorandum, any material adverse change in the assets, properties, condition,
financial or otherwise, or in the results of operations, business affairs or business prospects of
the Company considered as a whole, whether or not arising in the ordinary course of business; or
(vi) the Company shall fail to comply with the terms of this Agreement.
(b) If this Agreement is terminated pursuant to any of its provisions, the Company shall not
be under any liability to the Placement Agents, and the Placement Agents shall not be under any
liability to the Company, except that if this Agreement is terminated by the Placement Agents
because of any failure, refusal or inability on the part of the Company to comply with the terms or
to fulfill any of the conditions of this Agreement, the Company will reimburse the Placement Agents
for all out-of-pocket expenses (including the reasonable fees and disbursements of their counsel)
incurred by it in connection with this Agreement and the proposed sale of the Securities or in
contemplation of performing its obligations hereunder.
9. Miscellaneous.
(a) The respective agreements, representations, warranties, indemnities and other statements
of the Company, and the Placement Agents, as set forth in this Agreement or made by or on behalf of
them 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 Placement
Agents or the Company or any of their respective officers, directors or controlling Persons
referred to in Sections 6 and 7 hereof, and shall survive delivery of and payment for the
Securities. In addition, the provisions of Sections 5(b), 6, 7 and 8(b) shall survive the
termination or cancellation of this Agreement.
(b) This Agreement has been and is made for the benefit of the Placement Agents, the Company
and their respective successors and assigns, and, to the extent expressed herein, for the benefit
of Persons controlling the Placement Agents, or the Company, and directors and officers of the
Company, and their respective successors and assigns, and no other Person shall acquire or have any
right under or by virtue of this Agreement. The term “successors and assigns” shall not include any
Investor merely because of such purchase.
(c) All notices and communications hereunder shall be in writing and mailed or delivered or by
facsimile, (a) if to the Placement Agents, c/o ▇▇▇▇▇▇▇, ▇▇▇▇ & Co., LLC, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇,
with a copy to ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Esq. and a copy to Fortis Securities LLC, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, and (b) if to the Company, to ▇▇▇▇▇▇▇▇ Maritime Limited, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ and for the purposes of
Section 9(e), ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇.
▇▇▇▇▇, Esq will act as agent for service of process to the Company, with a copy to ▇▇▇▇▇▇ & ▇▇▇▇▇▇
LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇.
21
(d) This Agreement shall be governed by and construed in accordance with the laws of the State
of New York, without giving effect to any choice of law or conflict of law provision or rule that
would cause the application of the laws of any jurisdiction other than the State of New York.
(e) EACH OF THE PARTIES HERETO CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF ANY COURT
LOCATED WITHIN ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. EACH OF THE PARTIES HERETO HEREBY WAIVES
ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY
ANY FINAL AND NONAPPEALABLE JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. EACH OF
THE PARTIES HERETO FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF VIA
OVERNIGHT COURIER, TO SUCH PARTY AT THE ADDRESS SPECIFIED IN THIS AGREEMENT, SUCH SERVICE TO BECOME
EFFECTIVE FOURTEEN CALENDAR DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO
LIMIT THE ABILITY OF EITHER PARTY HERETO TO SERVE ANY SUCH LEGAL PROCESS, SUMMONS, NOTICES AND
DOCUMENTS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER OR TO
BRING ACTIONS, SUITS OR PROCEEDINGS AGAINST THE OTHER PARTY HERETO IN SUCH OTHER JURISDICTIONS, AND
IN SUCH MANNER, AS MAY BE PERMITTED BY ANY APPLICABLE LAW.
(f) This Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon the same
instrument.
[Signature page to follow.]
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Please confirm that the foregoing correctly sets forth the agreement among us.
| Very truly yours, | ||||||
| ▇▇▇▇▇▇▇▇ MARITIME LIMITED | ||||||
| By: | /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ |
|||||
| Name | ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||||
| Title: | CEO-President | |||||
| Confirmed: | ||||
| ▇▇▇▇▇▇▇ ▇▇▇▇ & CO., LLC | ||||
By: |
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| Title: President | ||||
| FORTIS SECURITIES, LLC | ||||
By: |
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |||
| Title: CEO | ||||
By: |
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |||
| Title: Executive Director | ||||
[Signature page to Placement Agency Agreement]