Exhibit 1.1
CONTROLLED EQUITY OFFERING(SM)
SALES AGREEMENT
[Date]
Cantor Xxxxxxxxxx & Co.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs/Ladies:
DryShips Inc., a Xxxxxxxx Islands corporation (the "Company"), confirms its
agreement (this "Agreement") with Cantor Xxxxxxxxxx & Co.
("CF&Co"), as follows:
1. Issuance and Sale of Shares. The Company agrees that, from time to time
during the term of this Agreement, on the terms and subject to the conditions
set forth herein, it will issue and sell through CF&Co, acting as agent and/or
principal, such number of shares (the "Shares") of the Company's common stock,
$0.01 par value per share (the "Common Stock") as the Company and CF&Co shall
agree from time to time. The issuance and sale of the Shares through CF&Co will
be effected pursuant to the Registration Statement (as defined below) filed by
the Company and declared effective by the Securities and Exchange Commission
(the "Commission").
2. Placements. Each time that the Company wishes to issue and sell Shares
hereunder (each, a "Placement"), it will notify CF&Co of the proposed terms of
such Placement. If CF&Co wishes to accept such proposed terms (which it may
decline to do for any reason in its sole discretion) or, following discussions
with the Company, wishes to accept amended terms, CF&Co will issue to the
Company a written notice setting forth the terms that CF&Co is willing to
accept, including, without limitation, the number of Shares ("Placement Shares")
to be issued, the manner(s) in which sales are to be made, the date or dates on
which such sales are anticipated to be made, any minimum price below which sales
may not be made, and the capacity in which CF&Co may act in selling Shares
hereunder (as principal, agent or both) (a "Placement Notice"), the form of
which is attached hereto as Schedule 1. The amount of compensation to be paid by
the Company to CF&Co with respect to each Placement shall be two and one-half
percent (2 1/2%) of gross proceeds for each Placement. The terms set forth in a
Placement Notice will not be binding on the Company or CF&Co, as applicable,
unless and until the Company delivers written notice of its acceptance of all of
the terms of such Placement Notice (an "Acceptance"); provided, however, that
none of the Company nor CF&Co will be bound by the terms of a Placement Notice
unless the Company delivers to CF&Co an Acceptance with respect thereto prior to
4:30 p.m. (New York time) on the Business Day (as defined below) following the
Business Day on which such Placement Notice is delivered to the Company. It is
expressly acknowledged and agreed that none of the Company nor CF&Co, as
applicable, will have any obligation whatsoever with respect to a Placement or
any Placement Shares unless and until CF&Co delivers a Placement Notice to the
Company and the Company accepts such Placement Notice by means of an Acceptance,
and then only upon the terms specified therein and herein. In the event of a
conflict between the terms of this Agreement and the terms of a Placement
Notice, the terms of the Placement Notice will control.
3. Sale of Placement Shares by CF&Co. Subject to the terms and conditions
of this Agreement and the applicable Placement Notice, upon the Acceptance of a
Placement Notice, and unless the sale of the Placement Shares described therein
has been suspended or otherwise terminated in accordance with the terms of this
Agreement, CF&Co will use its commercially reasonable efforts consistent with
its normal trading and sales practices to sell on behalf of the Company and as
agent and/or principal, such Placement Shares up to the amount specified, and
otherwise in accordance with the terms of such Placement Notice. CF&Co will
provide written confirmation to the Company no later than the opening of the
Trading Day next following the Trading Day on which they have made sales of
Placement Shares hereunder setting forth the number of Placement Shares sold on
such day, the compensation payable by the Company to CF&Co with respect to such
sales, and the Net Proceeds (as defined below) payable to the Company. CF&Co may
sell Placement Shares by any method permitted by law deemed to be an "at the
market" offering as defined in Rule 415 of the Securities Act of 1933, as
amended (the Securities Act"), including without limitation sales made directly
on the Nasdaq National Market, on any other existing trading market for the
Common Stock or to or through a market maker. CF&Co may also sell Placement
Shares in negotiated transactions, for which the amount of compensation to be
paid by the Company to CF&Co shall be shall be four percent (4%) of the gross
proceeds with respect to such negotiated sales. Notwithstanding anything to the
contrary set forth in this Agreement or a Placement Notice, the Company
acknowledges and agrees that (i) there can be no assurance that CF&Co will be
successful in selling any Placement Shares or as to the price at which any
Placement Shares are sold, if at all, and (ii) CF&Co will incur no liability or
obligation to the Company or any other person or entity if they do not sell
Placement Shares for any reason other than a failure by CF&Co to use its
commercially reasonable efforts consistent with its normal trading and sales
practices to sell such Placement Shares as provided under this Section 3. For
the purposes hereof, "Trading Day" means any day on which Common Stock is
purchased and sold on the principal market on which the Common Stock is listed
or quoted.
4. Suspension of Sales. The Company or CF&Co may, upon notice to the other
party in writing or by telephone (confirmed immediately by verifiable facsimile
transmission), suspend any sale of Placement Shares; provided, however, that
such suspension shall not affect or impair either party's obligations with
respect to any Placement Shares sold hereunder prior to the receipt of such
notice. The Company agrees that no such notice shall be effective against CF&Co
unless it is made to one of the individuals named on Schedule 2 hereto, as such
Schedule may be amended from time to time.
5. Settlement.
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(a) Settlement of Placement Shares. Unless otherwise specified in the
applicable Placement Notice, settlement for sales of Placement Shares will occur
on the third (3rd) Business Day (or such earlier day as is industry practice for
regular-way trading) following the date on which such sales are made (each a
"Settlement Date"). The amount of proceeds to be delivered to the Company on a
Settlement Date against the receipt of the Placement Shares sold ("Net
Proceeds") will be equal to the aggregate sales price at which such Placement
Shares were sold, after deduction for (i) the commission or other compensation
for such sales payable by the Company to CF&Co, as the case may be, pursuant to
Section 2 or Section 3 hereof, as the case may be, (ii) any other amounts due
and payable by the Company to CF&Co hereunder pursuant to Section 7(h) hereof,
and (iii) any transaction fees imposed by any governmental or self-regulatory
organization in respect of such sales.
(b) Delivery of Shares. On each Settlement Date, the Company will, or
will cause its transfer agent to, electronically transfer the Placement Shares
being sold by crediting CF&Co's accounts or its designee's account at The
Depository Trust Company through its Deposit Withdrawal Agent Commission System
or by such other means of delivery as may be mutually agreed upon by the parties
hereto and, upon receipt of such Placement Shares, which in all cases shall be
freely tradeable, transferable, registered shares in good deliverable form,
CF&Co will, on each Settlement Date, deliver the related Net Proceeds in same
day funds delivered to an account designated by the Company prior to the
Settlement Date. If the Company defaults in its obligation to deliver Placement
Shares on a Settlement Date, the Company agrees that in addition to and in no
way limiting the rights and obligations set forth in Section 10 hereto, it will
(i) hold CF&Co harmless against any loss, claim, damage, or expense (including
reasonable legal fees and expenses), as incurred, arising out of or in
connection with such default by the Company and (ii) pay to CF&Co any
commission, discount, or other compensation to which it would otherwise have
been entitled absent such default.
6. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, CF&Co that:
(a) Registration Statement and Prospectus. The Common Stock is
registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the Company has filed all reports, schedules,
forms, statements and other documents required to be filed by it with the
Commission (the "Commission Documents") since the Company has been subject to
the requirements of Section 12 of the Exchange Act, and all of such filings have
been made on a timely basis. The Common Stock is currently quoted on the Nasdaq
National Market under the trading symbol "DRYS." The Company meets the
requirements for use of Form F-3 under the Securities Act and the rules and
regulations thereunder ("Rules and Regulations"), including but not limited to
the transactions requirements for an offering made by the issuer set forth in
Instruction I.B.1 to Form F-3. The Company has prepared and filed with the
Commission a registration statement on Form F-3 (Registration Number 333- ) with
respect to common shares, preferred shares, debt securities, guarantees,
warrants, purchase contracts and units to be offered and sold by the Company.
Such registration statement, as amended, including any information deemed to be
a part thereof at the time of effectiveness pursuant to Rule 430B under the
Securities Act is referred to as the "Registration Statement." The Registration
Statement, including the base prospectus contained therein (the "Base
Prospectus") was prepared by the Company in conformity with the requirements of
the Securities Act and all applicable Rules and Regulations. One or more
prospectus supplements (the "Prospectus Supplements", and together with the Base
Prospectus and any amendment thereto and all documents incorporated therein by
reference, the "Prospectus") will be prepared by the Company in conformity with
the requirements of the Securities Act and all applicable Rules and Regulations
and will be filed with the Commission in the manner and time frame required by
the Securities Act and the Rules and Regulations. Any amendment or supplement to
the Registration Statement or Prospectus required by this Agreement will be so
prepared and filed by the Company and, as applicable, the Company will use its
reasonable best efforts to cause it to become effective as soon as reasonably
practicable. No stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceeding for that purpose has been
instituted or threatened by the Commission. Copies of all filings made by the
Company under the Securities Act and all Commission Documents that were filed
with the Commission have either been delivered to CF&Co or made available to
CF&Co on the Commission's Electronic Data Gathering, Analysis, and Retrieval
system ("XXXXX"). Any reference herein to the Registration Statement, the
Prospectus, or any amendment or supplement thereto shall be deemed to refer to
and include the documents incorporated (or deemed to be incorporated) by
reference therein pursuant to Item 6 of Form F-3 under the Securities Act, and
any reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement or Prospectus shall be deemed to refer to
and include the filing after the execution hereof of any document with the
Commission deemed to be incorporated by reference therein.
(b) No Misstatement or Omission. Each part of the Registration
Statement, when such part became or becomes effective, and the Prospectus, on
the date of filing thereof with the Commission and at each Settlement Date,
conformed or will conform in all material respects with the requirements of the
Securities Act and the Rules and Regulations; each part of the Registration
Statement, when such part became or becomes effective, did not or will 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; and the Prospectus, on the date of filing thereof with the
Commission and at each Settlement Date, did not or will not include an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; except that the foregoing shall not apply to statements or
omissions in any such document made in reliance on information furnished in
writing to the Company by CF&Co expressly stating that such information is
intended for use in the Registration Statement, the Prospectus, or any amendment
or supplement thereto.
(c) Conformity with Securities Act and Exchange Act. The documents
incorporated by reference in the Registration Statement or the Prospectus, or
any amendment or supplement thereto, when they became effective under the
Securities Act or were filed with the Commission under the Exchange Act, as the
case may be, conformed in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder, and none of such documents 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; and
any further documents so filed and incorporated by reference in the Registration
Statement or the Prospectus or any further amendment or supplement thereto, when
such documents become effective or are filed with the Commission, as the case
may be, will conform to the requirements of the Securities Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission thereunder
and will 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; except that the foregoing will not apply to statements
or omissions in any such document made in reliance on information furnished in
writing to the Company by CF&Co expressly stating that such information is
intended for use in any such document.
(d) Financial Information. The consolidated financial statements and
financial schedules of the Company and the subsidiaries of the Company listed on
Schedule 3 hereto (collectively, the "Subsidiaries", and each, individually, a
"Subsidiary"), together with the related notes set forth or incorporated by
reference in the Registration Statement and Prospectus, have been and will be
prepared in accordance with Regulation S-X under the Securities Act and with
United States generally accepted accounting principles consistently applied at
the times and during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto, or (ii) in the case
of unaudited interim statements, to the extent they may exclude footnotes or may
be condensed or summary statements) and fairly present and will fairly present
the financial position of the Company as of the dates thereof and the results of
its operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end adjustments).
(e) Organization. (1) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
Republic of the Xxxxxxxx Islands with full corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Registration Statement and Prospectus; and the Company is duly qualified as a
foreign entity 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,
individually or in the aggregate, to be so qualified and be in good standing
would not have a material adverse effect on (i) the consolidated business,
operations, assets, properties, financial condition, reputation, prospects or
results of operations of the Company and its Subsidiaries taken as a whole, (ii)
the transactions contemplated hereby or (iii) the ability of the Company to
perform its obligations under this Agreement (collectively, a "Material Adverse
Effect").
(2) Each Subsidiary of the Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has full corporate power and authority to
own, lease and operate its properties and conduct its business as described in
the Registration Statement and 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 be
so qualified would not have a Material Adverse Effect.
(f) Subsidiaries. Except as described in the Prospectus, all of the
vessels described in the Prospectus as owned by the Company or by a Subsidiary
of the Company are owned directly by Subsidiaries of the Company. The
Subsidiaries listed on Schedule 3 hereto are the only subsidiaries of the
Company and except for the Subsidiaries and as otherwise listed on Schedule 3
hereto, the Company owns no beneficial interest, directly or indirectly, in any
corporation, partnership, joint venture, limited liability company or other
entity.
(g) Encumbrances. Each of the Company and its Subsidiaries has (i)
good and marketable title to all of the properties and assets owned by it, free
and clear of all liens, charges, claims, security interests or encumbrances
(collectively, "Encumbrances"), other than Encumbrances that would not have a
Material Adverse Effect, and (ii) possession under all material leases to which
it is party as lessee. All leases and charters to which the Company or any of
its Subsidiaries is a party are valid and binding and no material default has
occurred and is continuing thereunder, and no event or circumstance that with
the passage of time or giving of notice, or both, would constitute such a
material default has occurred and is continuing, and, to the best knowledge of
the Company, no defaults by the counterparties exist under any such leases or
charters.
(h) No Improper Practices. (i) Neither the Company nor any of its
Subsidiaries, nor to the knowledge of the Company, any director, officer, agent,
employee or other person associated with or acting on behalf of the Company or
any of its Subsidiaries, has, in the past five years, used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate funds,
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment; (ii) no relationship, direct or indirect, exists between
or among the Company or, to the Company's knowledge, any Subsidiary or any
affiliate of any of them, on the one hand, and the directors, officers and
stockholders of the Company or, to the Company's knowledge, any Subsidiary, on
the other hand, that is required by the Securities Act to be described in the
Registration Statement and the Prospectus that is not so described; (iii) no
relationship, direct or indirect, exists between or among the Company or any
Subsidiary or any affiliate of them, on the one hand, and the directors,
officers, stockholders or directors of the Company or, to the Company's
knowledge, any Subsidiary, on the other hand, that is required by the rules of
the National Association of Securities Dealers ("NASD") to be described in the
Registration Statement and the Prospectus that is not so described; and (iv)
except as described in the Prospectus, there are no material outstanding loans
or advances or material guarantees of indebtedness by the Company or, to the
Company's knowledge, any Subsidiary to or for the benefit of any of their
respective officers or directors or any of the members of the families of any of
them.
(i) Investment Company Act. Neither the Company nor any of the
Subsidiaries, after giving effect to the offering and sale of the Shares, will
be an "investment company" or an entity "controlled" by an "investment company",
as such terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act").
(j) Capitalization. The Company has authorized and outstanding
capitalization as set forth in the Prospectus under the caption "Capitalization"
as of the dates indicated in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable and have been issued in compliance with
all applicable United States federal and state and all applicable foreign
securities laws; and all of the issued shares of capital stock of each
Subsidiary of the Company have been duly and validly authorized and issued and
are fully paid and non-assessable and the shares of such Subsidiary are owned
directly or indirectly by the Company, are held free and clear of all
Encumbrances
(k) The Shares. The Shares have been duly authorized and, when issued,
delivered and paid for pursuant to this Agreement, will be validly issued and
fully paid and non-assessable, free and clear of all Encumbrances and will be
issued in compliance with all applicable United States federal and state and all
applicable foreign securities laws; the capital stock of the Company, including
the Common Stock, conforms in all material respects to the description thereof
contained in the Registration Statement and the Common Stock, including the
Placement Shares, will conform to the description thereof contained in the
Prospectus as amended or supplemented. Neither the stockholders of the Company,
nor any other person or entity have any preemptive rights or rights of first
refusal with respect to the Placement Shares or other rights to purchase or
receive any of the Placement Shares or any other securities or assets of the
Company, and no person has the right, contractual or otherwise, to cause the
Company to issue to it, or register pursuant to the Securities Act, any shares
of capital stock or other securities or assets of the Company upon the issuance
or sale of the Placement Shares.
(l) No Material Changes. Neither the Company nor any of its
Subsidiaries has sustained since the date of the latest audited financial
statements included or incorporated by reference in the Registration Statement
and the Prospectus any material loss or interference with the business of the
Company and its Subsidiaries, taken as a whole, including without limitation,
from fire, explosion, flood or other calamity or damage to any vessel, whether
or not covered by insurance, or from any labor dispute or court or governmental
action, order or decree; subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, (i) there
has not been any change, development, or event that has caused, or could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect and (ii) since the date of the latest audited financial
statements included or incorporated by reference in the Registration Statement
and the Prospectus there has not been any material change, on a consolidated
basis, in the authorized capital stock of the Company and its Subsidiaries, any
material increase in the short-term debt or long-term debt of the Company and
its Subsidiaries, on a consolidated basis, or any Material Adverse Effect, or
any development reasonably likely to cause or result in a Material Adverse
Effect.
(m) Legal Proceedings. (1) Except as set forth in the Prospectus,
there is no legal, governmental, administrative or other claim, proceeding,
investigation, action, suit or inquiry pending, or, to the Company's knowledge,
threatened against or affecting the Company or any of its Subsidiaries or any of
their respective properties or to which the Company or any of its Subsidiaries
is or may be a party or to which any property of the Company or any of its
Subsidiaries is or may be the subject, or against any officer, director or
employee of the Company or any such Subsidiary in connection with such person's
employment therewith that, if determined adversely to the Company or any of its
Subsidiaries or such officer, director or employee, could individually or in the
aggregate have, or reasonably be expected to have, a Material Adverse Effect on
the general affairs, business, prospects, management, consolidated financial
position, stockholders' equity or results of operations of the Company and its
Subsidiaries taken as a whole. Neither the Company nor any of its Subsidiaries
is a party to or subject to the provisions of, any order, writ, injunction,
judgment or decree of any court or government agency or instrumentality which
could have a Material Adverse Effect.
(2) There are no legal, governmental or administrative
proceedings, investigations, actions, suits or inquiries or contracts or
documents of the Company or any of its Subsidiaries that are required to be
described in or filed as exhibits to the Commission Documents, Registration
Statement or any of the documents incorporated by reference therein by the
Securities Act or the Exchange Act or by the rules and regulations of the
Commission thereunder that have not been so described or filed as required by
the Securities Act and the Rules and Regulations thereunder.
(n) Authorization; Enforceability. (1) All necessary action has been
duly and validly taken by the Company to authorize the execution, delivery and
performance of this Agreement. This Agreement has been duly and validly
authorized, executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as rights to indemnification and contribution
hereunder may be limited by applicable law and except as enforcement hereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether applied in a proceeding in law or equity).
(2) Executing and delivering this Agreement and the issuance and
sale of the Shares and the compliance by the Company with all of the provisions
of this Agreement and the consummation of the transactions contemplated herein
will not result in (i) a breach or violation of any of the terms and provisions
of, or constitute a default under, any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan or credit
agreement or other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which any of them is bound or to which any of the
property of the Company or any of its Subsidiaries is subject, (ii) a violation
of the Company's articles of incorporation or bylaws, or any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its Subsidiaries or any of its
properties or (iii) the creation of any material Encumbrance upon any assets of
the Company or of any of its Subsidiaries or the triggering, solely as a result
of the Company's execution and delivery of this Agreement, of any preemptive or
anti-dilution rights or rights of first refusal or first offer, or any similar
rights (whether pursuant to a "poison pill" provision or otherwise), on the part
of holders of the Company's securities or any other person. Neither the Company
nor any of its Subsidiaries or affiliates, nor any person acting on its or their
behalf, has issued or sold any shares of Common Stock or securities or
instruments convertible into, exchangeable for and/or otherwise entitling the
holder thereof to acquire shares of Common Stock which would be integrated with
the offer and sale of the Shares hereunder.
(o) Enforceability of Agreements. To the knowledge of the Company, all
agreements between the Company and third parties expressly referenced in the
Prospectus are legal, valid and binding obligations of the Company enforceable
in accordance with their respective terms, except to the extent that (i)
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and by general
equitable principles and (ii) the indemnification provisions of certain
agreements may be limited be federal or state securities laws or public policy
considerations in respect thereof and except for any unenforceability that,
individually or in the aggregate, would not unreasonably be expected to have a
Material Adverse Effect.
(p) No Violations or Default. Neither the Company nor any of its
Subsidiaries is in violation of any provisions of its articles of incorporation,
bylaws or any other governing document as amended and in effect on and as of the
date hereof or in default (and no event has occurred which, with notice or lapse
of time or both, would constitute a default) under any indenture, mortgage, deed
of trust, loan or credit agreement or any provision of any instrument or
contract to which it is a party or by which it is bound that, individually or in
the aggregate, could have a Material Adverse Effect.
(q) Compliance with Laws. The Company and its Subsidiaries have not
violated and are in compliance with all laws, statutes, ordinances, regulations,
rules and orders of each foreign, federal, state or local government and any
other governmental department or agency having jurisdiction over the Company and
any Subsidiary, and any judgment, decision, decree or order of any court or
governmental agency, department or authority having jurisdiction over the
Company and any Subsidiary, except for such violations or noncompliance which,
individually or in the aggregate, would not have a Material Adverse Effect.
(r) Consents and Permits. The Company and its Subsidiaries possess all
such licenses, permits, consents, orders, certificates, authorizations,
approvals, franchises and rights issued by and have obtained or made all such
registrations with the appropriate federal, state, foreign or local regulatory
agencies or judicial or governmental bodies that are necessary to conduct their
business as described in the Registration Statement and the Prospectus except
for licenses, permits, consents, orders, certificates, authorizations,
approvals, franchises, rights or registrations, the absence of which,
individually or in the aggregate, would not have a Material Adverse Effect; the
Company and its Subsidiaries have not received any notice of proceedings or
investigations relating to the revocation or modification of any such licenses,
permits, consents, orders, certificates, authorizations, approvals, franchises,
rights or registrations which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect.
No consent, approval, authorization, permit, or order of, or filing or
registration with, any court or governmental or self regulatory agency or body
is required for the issue and sale of the Shares and the consummation by the
Company of the transactions contemplated by this Agreement, except the filing
with the Commission of the Registration Statement (including the Prospectus) and
amendments and supplements to the Registration Statement and Prospectus related
to the issue and sale of the Shares and such consents, approvals,
authorizations, registrations or qualifications as have already been obtained or
made or as may be required under state securities or Blue Sky laws;
(s) Insurance. On the date hereof, and after the date hereof other
than as set forth in the Prospectus, the Company and its Subsidiaries carry, or
are covered by, insurance in such amounts and covering such risks as is prudent,
reasonable and customary for companies engaged in similar businesses in similar
industries; neither the Company nor any of its Subsidiaries has received notice
from any insurer or agent of such insurer that substantial capital improvements
or other expenditures will have to be made in order to continue such insurance;
all such insurance is outstanding and in full force and effect and neither the
Company nor any Subsidiary has received any notice of cancellation or proposed
cancellation relating to such insurance.
(t) Environmental Laws. (1) On the date hereof, and after the date
hereof other than as set forth in the Prospectus, the Company and each of its
Subsidiaries have obtained all environmental permits, licenses and other
authorizations required by federal, state, foreign and local law, including any
applicable regulations and standards adopted by the International Maritime
Organization, relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), in order to conduct their businesses as
described in the Prospectus except where the failure to obtain a particular
environmental permit, license, or authorization, has not or could not reasonably
be expected to, either individually or in the aggregate, result in a Material
Adverse Effect; the Company and each of its Subsidiaries are conducting their
businesses in compliance with such permits, licenses and authorizations and with
applicable environmental laws, except where the failure to be in compliance
would not have a Material Adverse Effect; and, except as described in the
Prospectus, the Company is not in violation of any federal, state, foreign or
local law or regulation relating to the storage, handling, disposal, release or
transportation of hazardous or toxic materials except for such violations or
noncompliance which, individually or in the aggregate, would not have a Material
Adverse Effect.
(2) In the ordinary course of its business, the Company conducts
a periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its Subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for clean-up
or compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities which, individually or in
the aggregate, would not have a Material Adverse Effect.
(u) Independent Public Accountant. Ernst & Young, which has audited
the financial statements of the Company and its Subsidiaries included in or
incorporated by reference in the Registration Statement and the Prospectus, is a
registered independent public accounting firm as required by the Securities Act,
the Rules and Regulations and the Exchange Act.
(v) Forward-Looking Statements. No forward looking statement within
the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act contained in the Commission Documents, the Registration Statement or the
Prospectus has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
(w) Intellectual Property. The Company and each of its Subsidiaries
own or possess sufficient legal rights to all patents, trademarks, service
marks, tradenames, copyrights, trade secrets, licenses, information and
proprietary rights and processes necessary for their respective businesses as
now conducted (collectively, the "Company Intellectual Property Rights") without
any conflict with, or infringement of, the rights of others, except where the
failure to own or possess such Company Intellectual Property Rights,
individually or in the aggregate, would not have a Material Adverse Effect.
Neither the Company nor any of its Subsidiaries has received any written
communications alleging that the Company or any of its Subsidiaries has violated
or, by conducting its business, would violate any of the patents, trademarks,
service marks, service marks, tradenames, copyrights, trade secrets or other
proprietary rights or processes of any other person or entity. All Company
Intellectual Property Rights are enforceable and there is no existing
infringement by any person of such Company Intellectual Property Rights. All
patent applications that have been filed by the Company or any of its
Subsidiaries with the Patent and Trademark Office have been duly filed by the
Company or such Subsidiary, as applicable, has taken all actions reasonably
necessary to maintain the prosecution of such patent applications.
(x) Taxes. (1) The Company was not, for the immediately preceding
taxable year, treated as, will not, for the current taxable year, be treated as,
and does not anticipate that, for any subsequent taxable year, it will be
treated as a "passive foreign investment company," a "foreign investment
company" or a "foreign personal holding company" for United States federal
income tax purposes.
(2) The Company has filed all United States federal and state and
all applicable local and foreign income tax returns which have been required to
be filed, except in any case in which the failure to so file would not have a
Material Adverse Effect.
(3) The Company has paid all United States federal, state and
local and foreign taxes required to be paid and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing would
otherwise be delinquent, except, in all cases, for any such tax, assessment,
fine or penalty that is being contested in good faith and except in any case in
which the failure to so pay would not result in a Material Adverse Effect.
(4) No 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
CF&Co to Greece or the Xxxxxxxx Islands or any political subdivision or taxing
authority thereof or therein in connection with the sale and delivery by the
Company of the Shares to or for the account of CF&Co or the sale and delivery by
CF&Co of the Shares to the purchasers thereof.
(y) No Reliance. The Company has not relied upon CF&Co or legal
counsel for CF&Co for any legal, tax or accounting advice in connection with the
offering and sale of the Placement Shares.
(z) Underwriter Agreements. The Company is not a party to any
agreement with an agent or underwriter for any other "at the market" or
continuous equity transaction or negotiated or underwritten public offering.
(aa) Disclosure Controls. (1) The Company has established and
maintains disclosure controls and procedures (as such term is defined in Rule
13a-15 under the Exchange Act), which (i) are designed to ensure that material
information relating to the Company, including its consolidated Subsidiaries, is
made known to the Company's principal executive officer and its principal
financial officer by others within those entities, particularly during the
preparation of the Registration Statement; (ii) have been evaluated for
effectiveness as of the date of the filing of the Registration Statement with
the Commission; and (iii) are effective in all material respects to perform the
functions for which they were established.
(2) The Company (i) makes and keeps accurate books and records
and (ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit preparation
of its financial statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its assets is compared
with existing assets at reasonable intervals.
(bb) Accounting Controls. Based on the evaluation of its internal
controls over financial reporting, the Company is not aware of (i) any
significant deficiency or material weakness in the design or operation of
internal controls over financial reporting which are reasonably likely to
adversely affect the Company's ability to record, process, summarize and report
financial information; or (ii) 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) Certain Market Activities. The Company has not taken, directly or
indirectly, any action designed to, or that might be reasonably expected to,
cause or result in stabilization or manipulation of the price of the Common
Stock.
(dd) Broker/Dealer Relationships. Neither the Company nor any of the
Subsidiaries or any related entities (i) is required to register as a "broker"
or "dealer" in accordance with the provisions of the Exchange Act or (ii)
directly or indirectly through one or more intermediaries, controls or is a
"person associated with a NASD member" or "associated person of a NASD member"
(within the meaning of Article I of the Bylaws of the NASD).
(ee) Finder's Fees. Neither the Company nor any of the Subsidiaries
has incurred any liability for any finder's fees or similar payments in
connection with the transactions herein contemplated, except as may otherwise
exist with respect to CF&Co pursuant to this Agreement.
(ff) No Guarantees. Neither the Company nor any of its Subsidiaries
has, or guarantees any securities accorded a rating by any "nationally
recognized statistical rating organization," as such term is defined in Rule
436(g)(2) under the Securities Act.
(gg) Labor Disputes. There are no existing or, to the best knowledge
of the Company, threatened labor disputes with the employees of the Company or
any of its Subsidiaries which are likely to have a material adverse effect on
the financial condition and operations of the Company and its Subsidiaries taken
as a whole.
(hh) CF&Co Purchases. The Company acknowledges and agrees that CF&Co
has informed the Company that CF&Co may, to the extent permitted under the
Securities Act and the Exchange Act, purchase and sell shares of Common Stock
for its own account while this Agreement is in effect provided that (i) no such
purchase or sales shall take place while a Placement Notice is in effect (except
to the extent CF&Co may engage in sales of Placement Shares purchased or deemed
purchased from the Company as a "riskless principal" or in a similar capacity)
and (ii) the Company shall not be deemed to have authorized or consented to any
such purchases or sales by CF&Co.
7. Covenants of the Company. The Company covenants and agrees with CF&Co
that:
(a) Registration Statement Amendments. After the date of this
Agreement and during the period in which a prospectus relating to the Shares is
required to be delivered by CF&Co under the Securities Act (including in
circumstances where such requirement may be satisfied pursuant to Rule 172 under
the Securities Act), the Company will notify CF&Co promptly of the time when any
subsequent amendment to the Registration Statement has been filed with the
Commission and has become effective or any subsequent supplement to the
Prospectus has been filed and of any request by the Commission for any amendment
or supplement to the Registration Statement or Prospectus or for additional
information; it will prepare and file with the Commission, promptly upon CF&Co's
request, any amendments or supplements to the Registration Statement or
Prospectus that, in CF&Co's reasonable opinion, may be necessary or advisable in
connection with the distribution of the Shares by CF&Co (provided, however that
the failure of CF&Co to make such request shall not relieve the Company of any
obligation or liability hereunder, or affect CF&Co's right to rely on the
representations and warranties made by the Company in this Agreement); the
Company will submit to CF&Co a copy of any amendment or supplement to the
Registration Statement or Prospectus relating to the Common Stock of the Company
or a security convertible into the Common Stock of the Company a reasonable
period of time before the filing; and it will furnish to CF&Co at the time of
filing thereof a copy of any document that upon filing is deemed to be
incorporated by reference in the Registration Statement or Prospectus; and the
Company will cause each amendment or supplement to the Prospectus to be filed
with the Commission as required pursuant to the applicable paragraph of Rule
424(b) of the Rules and Regulations or, in the case of any document to be
incorporated therein by reference, to be filed with the Commission as required
pursuant to the Exchange Act, within the time period prescribed.
(b) Notice of Commission Stop Orders. The Company will advise CF&Co,
promptly after it receives notice or obtains knowledge thereof, of the issuance
or threatened issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceeding for any such purpose; and it will
promptly use its commercially reasonable efforts to prevent the issuance of any
stop order or to obtain its withdrawal if such a stop order should be issued.
(c) Delivery of Prospectus; Subsequent Changes. Within the time during
which a prospectus relating to the Shares is required to be delivered by CF&Co
under the Securities Act (including in circumstances where such requirement may
be satisfied pursuant to Rule 172 under the Securities Act), the Company will
comply with all requirements imposed upon it by the Securities Act and by the
Rules and Regulations, as from time to time in force, and will file on or before
their respective due dates all reports required to be filed by the Company with
the Commission pursuant to Sections 13(a), 13(c), 15(d), if applicable, or any
other provision of or under the Exchange Act. If during such period any event
occurs 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 a material fact
necessary to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to amend or
supplement the Registration Statement or Prospectus to comply with the
Securities Act, the Company will immediately notify CF&Co to suspend the
offering of Shares during such period and the Company will promptly amend or
supplement the Registration Statement or Prospectus (at the expense of the
Company) so as to correct such statement or omission or effect such compliance.
(d) Listing of Placement Shares. The Company will use commercially
reasonable efforts to cause the Shares to be quoted on the Nasdaq National
Market and to qualify the Shares for sale under the securities laws of such
jurisdictions as CF&Co designates and to continue such qualifications in effect
so long as required for the distribution of the Shares; provided that the
Company shall not be required in connection therewith to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction.
(e) Delivery of Registration Statement and Prospectus. The Company
will furnish to CF&Co and its counsel (at the expense of the Company) copies of
the Registration Statement, the Prospectus (including all documents incorporated
by reference therein) and all amendments and supplements to the Registration
Statement or Prospectus that are filed with the Commission during the period in
which a prospectus relating to the Shares is required to be delivered under the
Securities Act (including all documents filed with the Commission during such
period that are deemed to be incorporated by reference therein), in each case as
soon as reasonably practicable and in such quantities as CF&Co may from time to
time reasonably request and, at CF&Co's request, will also furnish copies of the
Prospectus to each exchange or market on which sales of Shares may be made.
(f) Company Information. The Company will furnish to CF&Co for a
period of three (3) years from the date of this Agreement such information as
reasonably requested by CF&Co regarding the Company or its Subsidiaries.
(g) Earnings Statement. The Company will make generally available to
its security holders as soon as practicable, but in any event not later than 15
months after the end of the Company's current fiscal quarter, an earnings
statement covering a 12-month period that satisfies the provisions of Section
11(a) of the Securities Act and Rule 158 of the Rules and Regulations.
(h) Expenses. The Company, whether or not the transactions
contemplated hereunder are consummated or this Agreement is terminated, will pay
all expenses incident to the performance of its obligations hereunder, including
but not limited to (i) the preparation, printing and filing of the Registration
Statement and each amendment and supplement thereto, of each Prospectus and of
each amendment and supplement thereto and each Issuer Free Writing Prospectus
(as defined in Section 8 of this Agreement), (ii) the preparation, issuance and
delivery of the Shares, (iii) all fees and disbursements of the Company's
counsel, accountants and other advisors, (iv) the qualification of the Shares
under securities laws in accordance with the provisions of Section 7(d) of this
Agreement, including filing fees in connection therewith, (v) the printing and
delivery to CF&Co of copies of the Prospectus and any amendments or supplements
thereto, and of this Agreement, (vi) the fees and expenses incurred in
connection with the listing or qualification of the Shares for trading on the
Exchange, or (vii) filing fees and expenses, if any, of the Commission and the
National Association of Securities Dealers, Inc. Corporate Finance Department or
(viii) the cost of publication of a tombstone ad in The Wall Street Journal.
(i) Use of Proceeds. The Company will use the Net Proceeds as
described in the Prospectus.
(j) Sales. Without the written consent of CF&Co, the Company will not,
directly or indirectly, offer to sell, sell, contract to sell, grant any option
to sell or otherwise dispose of any shares of Common Stock (other than the
Shares offered pursuant to the provisions of this Agreement) or securities
convertible into or exchangeable for Common Stock, warrants or any rights to
purchase or acquire, Common Stock during the period beginning on the fifth (5th)
Trading Day immediately prior to the date on which any Acceptance of a Placement
Notice is delivered to CF&Co hereunder and ending on the fifth (5th) Trading Day
immediately following the final Settlement Date with respect to Shares sold
pursuant to such Placement Notice; and without the written consent of CF&Co, the
Company will not directly or indirectly in any other "at the market" or
continuous equity transaction offer to sell, sell, contract to sell, grant any
option to sell or otherwise dispose of any shares of Common Stock (other than
the Shares offered pursuant to the provisions of this Agreement) or securities
convertible into or exchangeable for Common Stock, warrants or any rights to
purchase or acquire, Common Stock prior to the later of the termination of this
Agreement and the sixtieth (60th) day immediately following the final Settlement
Date with respect to Shares sold pursuant to such Placement Notice; provided,
however, that such restrictions will not be applicable to the Company's issuance
or sale of (i) Common Stock, options to purchase shares of Common Stock or
Common Stock issuable upon the exercise of options, pursuant to any employee or
director (x) stock option or benefits plan, (y) stock ownership plan or (z)
dividend reinvestment plan (but not shares subject to a waiver to exceed plan
limits in its dividend reinvestment plan) of the Company whether now in effect
or hereafter implemented, and (ii) Common Stock issuable upon conversion of
securities or the exercise of warrants, options or other rights in effect or
outstanding on the date hereof, and disclosed in writing to CF&Co.
(k) Change of Circumstances. The Company will, at any time during the
term of this Agreement, as supplemented from time to time, advise CF&Co
immediately after it shall have received notice or obtained knowledge thereof,
of any information or fact that would alter or affect any opinion, certificate,
letter or other document provided to CF&Co pursuant to this Agreement.
(l) Due Diligence Cooperation. The Company will cooperate with any due
diligence review conducted by CF&Co or its agents, including, without
limitation, providing information and making available documents and senior
corporate officers, as CF&Co may reasonably request; provided, however, that the
Company shall be required to make available senior corporate officers only (i)
by telephone or at the Company's principal offices and (ii) during the Company's
ordinary business hours.
(m) Required Filings Relating to Placement of Placement Shares. The
Company agrees that on such dates as the Securities Act shall require, the
Company will (i) file a prospectus supplement with the Commission under the
applicable paragraph of Rule 424(b) under the Securities Act (each and every
filing under Rule 424(b), a "Filing Date"), which prospectus supplement will set
forth, within the relevant period, the amount of Placement Shares sold through
CF&Co, the Net Proceeds to the Company and the compensation payable by the
Company to CF&Co with respect to such Placement Shares, and (ii) deliver such
number of copies of each such prospectus supplement to each exchange or market
on which such sales were effected as may be required by the rules or regulations
of such exchange or market.
(n) Certificates. On the date that the Registration Statement is
declared effective, on the first Settlement Date hereunder, on each Filing Date
and each time that the Registration Statement shall be amended or the Prospectus
supplemented (other than a supplement filed pursuant to Rule 424(b) under the
Securities Act that contains solely the information confirmed to the Company by
CF&Co pursuant to Section 7(m) above), the Company shall furnish or cause to be
furnished to CF&Co forthwith a certificate in the form attached hereto as
Exhibit A to the effect that the representations and warranties made by the
Company in this Agreement are true and correct on such date as though made at
and as of such date (except that such statements shall be deemed to relate to
the Registration Statement or the Prospectus as amended and supplemented to such
time) and that the Company has complied with all of the agreements to be
performed by it at or prior to such date.
(o) Legal Opinions. On such date as CF&Co shall request, including,
without limitation, on the date that the Registration Statement is declared
effective, on the first Settlement Date hereunder, on each Filing Date, each
time that the Registration Statement shall be amended or the Prospectus
supplemented (other than a supplement filed pursuant to Rule 424(b) under the
Securities Act that contains solely the information confirmed to the Company by
CF&Co pursuant to Section 7(m) above) and within five (5) Business Days after
the Company files an Annual Report on Form 20-F with the Commission, the Company
shall furnish or cause to be furnished to CF&Co a written opinion of Xxxxxx &
Xxxxxx LLP, United States counsel for the Company, or other counsel satisfactory
to CF&Co, in form and substance satisfactory to CF&Co. Such opinion shall be
rendered to CF&Co at the request of the Company and shall state so therein.
Notwithstanding the foregoing, in lieu of such opinion to be delivered within
five (5) Business Days after the Company files an Annual Report on Form 20-F,
counsel may furnish CF&Co with a letter to the effect that CF&Co may rely on a
prior opinion delivered under this Section 7(o)(1) to the same extent as if it
were dated the date of such letter.
(2) On such date as CF&Co shall request, including, without
limitation, on the date that the Registration Statement is declared effective,
on the first Settlement Date hereunder, on each Filing Date, each time that the
Registration Statement shall be amended or the Prospectus supplemented (other
than a supplement filed pursuant to Rule 424(b) under the Securities Act that
contains solely the information confirmed to the Company by CF&Co pursuant to
Section 7(m) above) and within five (5) Business Days after the Company files an
Annual Report on Form 20-F with the Commission, the Company shall furnish or
cause to be furnished to CF&Co a written opinion of Xxxxxx & Xxxxxx LLP,
Xxxxxxxx Islands counsel for the Company, or other counsel satisfactory to
CF&Co, in form and substance satisfactory to CF&Co. Such opinion shall be
rendered to CF&Co at the request of the Company and shall state so therein.
Notwithstanding the foregoing, in lieu of such opinion to be delivered within
five (5) Business Days after the Company files an Annual Report on Form 20-F,
counsel may furnish CF&Co with a letter to the effect that CF&Co may rely on a
prior opinion delivered under this Section 7(o)(2) to the same extent as if it
were dated the date of such letter.
(3) On such date as CF&Co shall request, including, without
limitation, on the date that the Registration Statement is declared effective,
on the first Settlement Date hereunder, on each Filing Date, each time that the
Registration Statement shall be amended or the Prospectus supplemented (other
than a supplement filed pursuant to Rule 424(b) under the Securities Act that
contains solely the information confirmed to the Company by CF&Co pursuant to
Section 7(m) above) and within five (5) Business Days after the Company files an
Annual Report on Form 20-F with the Commission, the Company shall furnish or
cause to be furnished to CF&Co a written opinion of The Deverakis Law Office,
Greek counsel to the Company, or other counsel satisfactory to CF&Co, in form
and substance satisfactory to CF&Co. Such opinion shall be rendered to CF&Co at
the request of the Company and shall state so therein. Notwithstanding the
foregoing, in lieu of such opinion to be delivered within five (5) Business Days
after the Company files an Annual Report on Form 20-F, counsel may furnish CF&Co
with a letter to the effect that CF&Co may rely on a prior opinion delivered
under this Section 7(o)(3) to the same extent as if it were dated the date of
such letter.
(4) On such date as CF&Co shall request, including, without
limitation, on the date that the Registration Statement is declared effective,
on the first Settlement Date hereunder, on each Filing Date, each time that the
Registration Statement shall be amended or the Prospectus supplemented (other
than a supplement filed pursuant to Rule 424(b) under the Securities Act that
contains solely the information confirmed to the Company by CF&Co pursuant to
Section 7(m) above) and within five (5) Business Days after the Company files an
Annual Report on Form 20-F with the Commission, the Company shall furnish or
cause to be furnished to CF&Co a written opinion of Xx. Xxxxxx Xxxxx, Advocate,
Maltese counsel to the Company, or other counsel satisfactory to CF&Co, in form
and substance satisfactory to CF&Co. Such opinion shall be rendered to CF&Co at
the request of the Company and shall state so therein. Notwithstanding the
foregoing, in lieu of such opinion to be delivered within five (5) Business Days
after the Company files an Annual Report on Form 20-F, counsel may furnish CF&Co
with a letter to the effect that CF&Co may rely on a prior opinion delivered
under this Section 7(o)(4) to the same extent as if it were dated the date of
such letter.
(5) On such date as CF&Co shall request, including, without
limitation, on the date that the Registration Statement is declared effective,
on the first Settlement Date hereunder, on each Filing Date, each time that the
Registration Statement shall be amended or the Prospectus supplemented (other
than a supplement filed pursuant to Rule 424(b) under the Securities Act that
contains solely the information confirmed to the Company by CF&Co pursuant to
Section 7(m) above) and within five (5) Business Days after the Company files an
Annual Report on Form 20-F with the Commission, the Company shall furnish or
cause to be furnished to CF&Co a written opinion of Xxxxxx & Xxxxxx LLP,
Liberian counsel to the Company, or other counsel satisfactory to CF&Co, in form
and substance satisfactory to CF&Co. Such opinion shall be rendered to CF&Co at
the request of the Company and shall state so therein. Notwithstanding the
foregoing, in lieu of such opinion to be delivered within five (5) Business Days
after the Company files an Annual Report on Form 20-F, counsel may furnish CF&Co
with a letter to the effect that CF&Co may rely on a prior opinion delivered
under this Section 7(o)(5) to the same extent as if it were dated the date of
such letter.
(p) Comfort Letters. On such date as CF&Co shall request, including,
without limitation, on the date that the Registration Statement is declared
effective, on the first Settlement Date hereunder and each time that the
Registration Statement shall be amended or the Prospectus supplemented to
include additional amended financial information or there is filed with the
Commission any document incorporated by reference into the Registration
Statement or Prospectus which contains additional amended financial information,
the Company shall cause its independent accountants reasonably satisfactory to
CF&Co, to furnish CF&Co letters (the "Comfort Letters"), in form and substance
satisfactory to CF&Co, (i) confirming that they are registered independent
public accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating,
as of such date, the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by accountants'
"comfort letters" to CF&Co in connection with registered public offerings (the
first such letter, the "Initial Comfort Letter") and (iii) updating the Initial
Comfort Letter with any information which would have been included in the
Initial Comfort Letter had it been given on such date and modified as necessary
to relate to the Registration Statement and the Prospectus, as amended and
supplemented to the date of such letter.
(q) Market Activities. The Company will not, directly or indirectly,
(i) take any action designed to cause or result in, or that constitutes or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Shares or (ii) sell, bid for, or purchase the Shares, or pay anyone any
compensation for soliciting purchases of the Shares other than CF&Co.
(r) Insurance. The Company and its Subsidiaries shall maintain, or
cause to be maintained, insurance in such amounts and covering such risks as is
reasonable and customary for companies engaged in similar businesses in similar
industries.
(s) Compliance with Laws. The Company and each of its Subsidiaries
shall maintain, or cause to be maintained, all material environmental permits,
licenses and other authorizations required by federal, state and local law in
order to conduct their businesses as described in the Prospectus, and the
Company and each of its Subsidiaries shall conduct their businesses, or cause
their businesses to be conducted, in substantial compliance with such permits,
licenses and authorizations and with applicable environmental laws, except where
the failure to maintain or be in compliance with such permits, licenses and
authorizations could not reasonably be expected to have a Material Adverse
Effect.
8. Additional Representations and Covenants of the Company.
-------------------------------------------------------
(a) Issuer Free Writing Prospectuses. (1) The Company represents that
it has not made, and covenants that, unless it obtains the prior written consent
of CF&Co, it will not make any offer relating to the Shares that would
constitute a "free writing prospectus" (as defined in Rule 405 of the Securities
Act) (an "Issuer Free Writing Prospectus") required to be filed by the Company
with the Commission or retained by the Company under Rule 433 of the Securities
Act; except as set forth in a Placement Notice, no use of any Issuer Free
Writing Prospectus has been consented to by CF&Co. The Company agrees that it
will comply with the requirements of Rules 164 and 433 of the Securities Act
applicable to any Issuer Free Writing Prospectus, including timely filing with
the Commission or retention where required and legending.
(2) The Company agrees that no Issuer Free Writing Prospectus, if
any, will include any information that conflicts with the information contained
in the Registration Statement, including any document incorporated by reference
therein that has not been superseded or modified, or the Prospectus. In
addition, no Issuer Free Writing Prospectus, if any, will include an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided however, the foregoing shall not apply to any
statements or omissions in any Issuer Free Writing Prospectus made in reliance
on information furnished in writing to the Company by CF&Co expressly stating
that such information is intended for use therein.
(3) The Company agrees that if at any time following issuance of
an Issuer Free Writing Prospectus any event occurred or occurs as a result of
which such Issuer Free Writing Prospectus would conflict with the information in
the Registration Statement, including any document incorporated by reference
therein that has not been superseded or modified, or the Prospectus or would
include an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, the Company will give prompt notice
thereof to CF&Co and, if requested by CF&Co, will prepare and furnish without
charge to CF&Co an Issuer Free Writing Prospectus or other document which will
correct such conflict, statement or omission; provided, however, the foregoing
shall not apply to any statements or omissions in any Issuer Free Writing
Prospectus made in reliance on information furnished in writing to the Company
by CF&Co expressly stating that such information is intended for use therein.
(b) Non-Issuer Free Writing Prospectus. The Company consents to the
use by CF&Co of a free writing prospectus that (a) is not an "issuer free
writing prospectus" as defined in Rule 433 under the Securities Act, and (b)
contains only (i) information describing the preliminary terms of the Shares or
their offering, or (ii) information permitted under Rule 134 under the
Securities Act; provided that CF&Co covenants with the Company not to take any
action that would result in the Company being required to file with the
Commission under Rule 433(d) under the Securities Act a free writing prospectus
prepared by or on behalf of CF&Co that otherwise would not be required to be
filed by the Company thereunder, but for the action of CF&Co.
(c) Distribution of Offering Materials. The Company has not
distributed and will not distribute, during the term of this Agreement, any
offering materials in connection with the offering and sale of the Shares other
than the Registration Statement, Prospectus or any Issuer Free Writing
Prospectus reviewed and consented to by CF&Co and included in a Placement Notice
(as described in clause (a)(i) above).
9. Conditions to CF&Co's Obligations. The obligations of CF&Co hereunder
with respect to a Placement will be subject to the continuing accuracy and
completeness of the representations and warranties made by the Company herein
and in the applicable Placement Notices, to the due performance by the Company
of its obligations hereunder, to the completion by CF&Co of a due diligence
review satisfactory to CF&Co in its reasonable judgment, and to the continuing
satisfaction (or waiver by CF&Co in its sole discretion) of the following
additional conditions:
(a) Registration Statement Effective. The Registration Statement shall
have become effective and shall be available for the resale of (i) all Placement
Shares issued pursuant to all prior Placements and not yet sold by CF&Co and
(ii) all Placement Shares contemplated to be issued by the Placement Notice
relating to such Placement.
(b) No Material Notices. None of the following events shall have
occurred and be continuing: (i) receipt by the Company of any request for
additional information from the Commission or any other federal or state
governmental, administrative or self regulatory authority during the period of
effectiveness of the Registration Statement, the response to which would require
any amendments or supplements to the Registration Statement or the Prospectus;
(ii) the issuance by the Commission or any other federal or state governmental
authority of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose; (iii) receipt
by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Shares for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose; (iv) the occurrence of any event that makes any statement made in the
Registration Statement or the Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires the making of any changes in the Registration Statement, related
prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any 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;
and (v) the Company's reasonable determination that a post-effective amendment
to the Registration Statement would be appropriate.
(c) No Misstatement or Material Omission. CF&Co shall not have advised
the Company that the Registration Statement or Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact that in CF&Co's opinion
is material, or omits to state a fact that in CF&Co's opinion is material and is
required to be stated therein or is necessary to make the statements therein not
misleading.
(d) Material Changes. Except as contemplated and appropriately
disclosed in the Prospectus, or disclosed in the Company's reports filed with
the Commission, in each case at the time the applicable Placement Notice is
delivered, there shall not have been any material change, on a consolidated
basis, in the authorized capital stock of the Company and its Subsidiaries, or
any Material Adverse Effect, or any development that may reasonably be expected
to cause a Material Adverse Effect, or a downgrading in or withdrawal of the
rating assigned to any of the Company's securities by any rating organization or
a public announcement by any rating organization that it has under surveillance
or review its rating of any of the Company's securities, the effect of which, in
the sole judgment of CF&Co (without relieving the Company of any obligation or
liability it may otherwise have), is so material as to make it impracticable or
inadvisable to proceed with the offering of the Placement Shares on the terms
and in the manner contemplated in the Prospectus.
(e) Certificate. CF&Co shall have received the certificate required to
be delivered pursuant to Section 7(n) on or before the date on which delivery of
such certificate is required pursuant to Section 7(n).
(f) Legal Opinions CF&Co shall have received the opinions of counsel
required to be delivered pursuant Sections 7(o)(1), 7(o)(2), 7(o)(3), 7(o)(4)
and 7(o)(5) on or before the date on which such delivery of such opinion is
required pursuant to Sections 7(o)(1), 7(o)(2), 7(o)(3), 7(o)(4) and 7(o)(5).
(g) Comfort Letters. CF&Co shall have received the Comfort Letter
required to be delivered pursuant Section 7(p) on or before the date on which
such delivery of such letter is required pursuant to Section 7(p).
(h) Approval for Listing; No Suspension. The Shares shall have been
duly listed, subject to notice of issuance, on the Nasdaq National Market, and
trading in the Common Stock shall not have been suspended on such market.
(i) Other Materials. On each date on which the Company is required to
deliver a certificate pursuant to Section 7(n), the Company shall have furnished
to CF&Co such appropriate further information, certificates, opinions and
documents as CF&Co may reasonably request. All such opinions, certificates,
letters and other documents will be in compliance with the provisions hereof.
The Company will furnish CF&Co with such conformed copies of such opinions,
certificates, letters and other documents as CF&Co shall reasonably request.
(j) Securities Act Filings Made. All filings with the Commission
required by Rule 424 under the Securities Act to have been filed prior to the
issuance of any Placement Notice hereunder shall have been made within the
applicable time period prescribed for such filing by Rule 424.
(k) No Termination Event. There shall not have occurred any event that
would permit CF&Co to terminate this Agreement pursuant to Section 11(a).
10. Indemnification and Contribution.
---------------------------------
(a) Company Indemnification. The Company agrees to indemnify and hold
harmless CF&Co, the directors, officers, partners, employees and agents of CF&Co
and each person, if any, who (i) controls CF&Co within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, or (ii) is controlled
by or is under common control with CF&Co (a "CF&Co Affiliate") from and against
any and all losses, claims, liabilities, expenses and damages (including, but
not limited to, any and all investigative, legal and other expenses reasonably
incurred in connection with, and any and all amounts paid in settlement of, any
action, suit or proceeding between any of the indemnified parties and any
indemnifying parties or between any indemnified party and any third party, or
otherwise, or any claim asserted), as and when incurred, to which any CF&Co, or
any such person, may become subject under the Securities Act, the Exchange Act
or other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages
arise out of or are based, directly or indirectly, on (i) any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, the Prospectus, or any Issuer Free Writing Prospectus or any "issuer
information" filed or required to be filed pursuant to Rule 433(d) under the
Securities Act, or any amendment or supplement to the Registration Statement or
the Prospectus, or in any application or other document executed by or on behalf
of the Company or based on written information furnished by or on behalf of the
Company filed in any jurisdiction in order to qualify the Shares under the
securities laws thereof or filed with the Commission, (ii) the omission or
alleged omission to state in the Registration Statement, the Prospectus, or any
Issuer Free Writing Prospectus or any "issuer information" filed or required to
be filed pursuant to Rule 433(d) under the Securities Act, or any amendment or
supplement to the Registration Statement or the Prospectus, or in any
application or other document executed by or on behalf of the Company or based
on written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Shares under the securities laws thereof or
filed with the Commission a material fact required to be stated in it or
necessary to make the statements in it not misleading or (iii) any breach by the
Company of any of its representations, warranties and agreements contained in
this Agreement; provided that this indemnity agreement shall not apply to the
extent that such loss, claim, liability, expense or damage arises from the sale
of the Shares pursuant to this Agreement and is caused directly by an untrue
statement or omission made in reliance on and in conformity with information
relating to CF&Co and furnished in writing to the Company by CF&Co expressly
stating that such information is intended for inclusion in any document
described in clause (a)(i) above. This indemnity agreement will be in addition
to any liability that the Company might otherwise have.
(b) CF&Co Indemnification. CF&Co agrees to indemnify and hold harmless
the Company and its directors and each officer of the Company who signed the
Registration Statement, and each person, if any, who (i) controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act or (ii) is controlled by or is under common control with the
Company (a "Company Affiliate") against any and all loss, liability, claim,
damage and expense described in the indemnity contained in Section 10(a), as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendments thereto), the Prospectus (or any amendment or supplement thereto) or
any Issuer Free Writing Prospectus in reliance upon and in conformity with
written information relating to CF&Co furnished to the Company by CF&Co
expressly stating that such information is intended for use in the Registration
Statement (or any amendment thereto), such preliminary prospectus, the
Prospectus (or any amendment or supplement thereto) or Issuer Free Writing
Prospectus.
(c) Procedure. Any party that proposes to assert the right to be
indemnified under this Section 10 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 10, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve the indemnifying party from (i) any liability that it might
have to any indemnified party otherwise than under this Section 10 and (ii) any
liability that it may have to any indemnified party under the foregoing
provision of this Section 10 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the indemnifying
party. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party will
be entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action, with
counsel reasonably satisfactory to the indemnified party, and after notice from
the indemnifying party to the indemnified party of its election to assume the
defense, the indemnifying party will not be liable to the indemnified party for
any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred. An indemnifying party will
not, in any event, be liable for any settlement of any action or claim effected
without its written consent. No indemnifying party shall, without the prior
written consent of each indemnified party, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated by this Section 10 (whether or
not any indemnified party is a party thereto), unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising or that may arise out of such claim, action or
proceeding. Notwithstanding any other provision of this Section 10(c), if at any
time an indemnified party shall have properly requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel for which it is
entitled to reimbursement pursuant to this Section 10(c), such indemnifying
party agrees that it shall be liable for any settlement effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into, and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement; provided that
an indemnifying party shall not be liable for any such settlement effected
without its consent if such indemnifying party, at least five days prior to the
date of such settlement, (1) reimburses such indemnified party in accordance
with such request for the amount of such fees and expenses of counsel as the
indemnifying party believes in good faith to be reasonable and (2) provides
written notice to the indemnified party that the indemnifying party disputes in
good faith the reasonableness of the unpaid balance of such fees and expenses.
(d) Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 10 is applicable in accordance with its
terms but for any reason is held to be unavailable from the Company or CF&Co,
the Company and CF&Co will contribute to the total losses, claims, liabilities,
expenses and damages (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Company from persons other than CF&Co, such as
persons who control the Company within the meaning of the Securities Act,
officers of the Company who signed the Registration Statement and directors of
the Company, who also may be liable for contribution) to which the Company and
CF&Co may be subject in such proportion as shall be appropriate to reflect the
relative benefits received by the Company on the one hand and CF&Co on the
other. The relative benefits received by the Company on the one hand and CF&Co
on the other hand 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 compensation (before deducting expenses) received by CF&Co
from the sale of Shares on behalf of the Company. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and CF&Co, on the other, with respect to the statements or omission which
resulted in such loss, claim, liability, expense or damage, or action in respect
thereof, as well as any other relevant equitable considerations with respect to
such offering. Such relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or CF&Co, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and CF&Co agree that it would not be just and
equitable if contributions pursuant to this Section 10(d) were to be determined
by pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, liability,
expense, or damage, or action in respect thereof, referred to above in this
Section 10(d) shall be deemed to include, for the purpose of this Section 10(d),
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim to the
extent consistent with Section 10(c) hereof. Notwithstanding the foregoing
provisions of this Section 10(d), CF&Co shall not be required to contribute any
amount in excess of the commissions received by it under this Agreement and no
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 10(d), any person who controls a party to this Agreement within the
meaning of the Securities Act, and any officers, directors, partners, employees
or agents of CF&Co, will have the same rights to contribution as that party, and
each officer of the Company who signed the Registration Statement will have the
same rights to contribution as the Company, subject in each case to the
provisions hereof. Any party entitled to contribution, promptly after receipt of
notice of commencement of any action against such party in respect of which a
claim for contribution may be made under this Section 10(d), will notify any
such party or parties from whom contribution may be sought, but the omission to
so notify will not relieve that party or parties from whom contribution may be
sought from any other obligation it or they may have under this Section 10(d)
except to the extent that the failure to so notify such other party materially
prejudiced the defenses of the party from whom contribution is sought. Except
for a settlement entered into pursuant to the last sentence of Section 10(c)
hereof, no party will be liable for contribution with respect to any action or
claim settled without its written consent if such consent is required pursuant
to Section 10(c) hereof.
11. Representations and Agreements to Survive Delivery. All representations
and warranties of the Company herein or in certificates delivered pursuant
hereto shall remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of CF&Co, any controlling persons, or the
Company (or any of their respective officers, directors or controlling persons),
(ii) delivery and acceptance of the Shares and payment therefor or (iii) any
termination of this Agreement.
12. Termination.
------------
(a) CF&Co shall have the right by giving notice as hereinafter
specified at any time to terminate this Agreement if (i) any Material Adverse
Effect has occurred, or any development that is reasonably expected to cause a
Material Adverse Effect has occurred which, in the reasonable judgment of CF&Co,
may materially impair the investment quality of the Shares, (ii) the Company
shall have failed, refused or been unable, at or prior to any Settlement Date,
to perform any agreement on its part to be performed hereunder, (iii) any other
condition of CF&Co's obligations hereunder is not fulfilled, or (iv) any
suspension or limitation of trading in the Shares on the Nasdaq National Market
shall have occurred. Any such termination shall be without liability of any
party to any other party except that the provisions of Section 7(h) (Expenses),
Section 10 (Indemnification), Section 11 (Survival of Representations), Section
17 (Applicable Law; Consent to Jurisdiction) and Section 18 (Waiver of Jury
Trial) hereof shall remain in full force and effect notwithstanding such
termination. If CF&Co elects to terminate this Agreement as provided in this
Section 12(a), CF&Co shall provide the required notice as specified in Section
13 (Notices).
(b) The Company shall have the right, by giving twenty (20) days'
notice as hereinafter specified to terminate this Agreement in its sole
discretion at any time following the period of six (6) months after the date of
this Agreement. Any such termination shall be without liability of any party to
any other party except that the provisions of Section 7(h), Section 10, Section
11, Section 17 and Section 18 hereof shall remain in full force and effect
notwithstanding such termination.
(c) In addition to, and without limiting CF&Co's rights under Section
11(a), CF&Co shall have the right, by giving twenty (20) days' notice as
hereinafter specified to terminate this Agreement in its sole discretion at any
time following the 30th day after the date of this Agreement. Any such
termination shall be without liability of any party to any other party except
that the provisions of Section 7(h), Section 10, Section 11, Section 17 and
Section 18 hereof shall remain in full force and effect notwithstanding such
termination.
(d) This Agreement shall remain in full force and effect unless
terminated pursuant to Sections 11(a), 11(b) or 11(c) above or otherwise by
mutual agreement of the parties; provided that any such termination by mutual
agreement shall in all cases be deemed to provide that Section 7(h), Section 10,
Section 11, Section 17 and Section 18 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 CF&Co or the Company, as the case may be. If such termination shall
occur prior to the Settlement Date for any sale of Placement Shares, such
Placement Shares shall settle in accordance with the provisions of this
Agreement.
13. Notices. All notices or other communications required or permitted to
be given by any party to any other party pursuant to the terms of this Agreement
shall be in writing and if sent to CF&Co, shall be delivered to Cantor
Xxxxxxxxxx & Co., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (telefax:
212-829-4972); Attention: Xxxx Xxxxxx and Xxxxxxx Xxxxxxxxxxxx, Managing
Directors, ITD-Investment Banking, and to Xxxxxx X. Xxxxxx, President and Chief
Executive Officer, Equity Capital Markets, with a copy to Xxxxxx, Xxxxx &
Xxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, fax no. (000) 000-0000,
Attention: Xxxxxxx X. Xxxxxxx, Esq.; or if sent to the Company, shall be
delivered to 00 Xxxxxxxxx Xxxxxx Xxxxxxxxxxx 00000, Xxxxxx, Xxxxxx (telefax:
011-30210-809-0205); Attention: Chief Executive Officer, with a copy to Xxxxxx &
Xxxxxx LLP, Xxx Xxxxxxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, fax no. (212)
000-0000, Attention: Xxxx X. Xxxxx, Esq. Each party to this Agreement may change
such address for notices by sending to the parties to this Agreement written
notice of a new address for such purpose. Each such notice or other
communication shall be deemed given (i) when delivered personally or by
verifiable facsimile transmission (with an original to follow) on or before 4:30
p.m., eastern time, on a Business Day or, if such day is not a Business Day, on
the next succeeding Business Day, (ii) on the next Business Day after timely
delivery to a nationally-recognized overnight courier and (iii) on the Business
Day actually received if deposited in the U.S. mail (certified or registered
mail, return receipt requested, postage prepaid). For purposes of this
Agreement, "Business Day" shall mean any day on which the Nasdaq National Market
and commercial banks in the city of New York are open for business.
14. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company and CF&Co and their respective successors and
the affiliates, controlling persons, officers and directors referred to in
Section 10 hereof. References to any of the parties contained in this Agreement
shall be deemed to include the successors and permitted assigns of such party.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and permitted
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement. Neither party
may assign its rights or obligations under this Agreement without the prior
written consent of the other party, provided, however, that CF&Co may assign its
rights and obligations hereunder to an affiliate of CF&Co without obtaining the
Company's consent.
15. Adjustments for Stock Splits. The parties acknowledge and agree that
all share related numbers contained in this Agreement shall be adjusted to take
into account any stock split, stock dividend or similar event effected with
respect to the Shares.
16. Entire Agreement; Amendment; Severability. This Agreement (including
all schedules and exhibits attached hereto and placement notices issued pursuant
hereto) constitutes the entire agreement and supersedes all other prior and
contemporaneous agreements and undertakings, both written and oral, among the
parties hereto with regard to the subject matter hereof. Neither this Agreement
nor any term hereof may be amended except pursuant to a written instrument
executed by the Company and CF&Co. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
17. Applicable Law; Consent to Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State of
New York without regard to the principles of conflicts of laws. Each of the
parties hereto irrevocably (i) agrees that any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby may be instituted in any state or federal court located in the Borough of
Manhattan, The City of New York, New York (each a "New York Court"), (ii)
waives, to the fullest extent it may effectively do so, any objection which it
may now or hereafter have to the laying of venue of any such proceeding and
(iii) submits to the exclusive jurisdiction of such courts in any such suit,
action or proceeding. The Company has appointed Xxxxxx & Xxxxxx LLP, New York,
New York, as its authorized agent (the "Authorized Agent") upon whom process may
be served in any such action arising out of or based on this Agreement or the
transactions contemplated hereby which may be instituted in any New York Court
by CF&Co or by any person who controls CF&Co, expressly consents to the
jurisdiction of any such court in respect of any such action, and waives any
other requirements of or objections to personal jurisdiction with respect
thereto. Such appointment shall be irrevocable. The Company represents and
warrants that the Authorized Agent has agreed to act as such agent for service
of process and agrees to take any and all action, including the filing of any
and all documents and instruments that may be necessary to continue such
appointment in full force and effect as aforesaid. Service of process upon the
Authorized Agent and written notice of such service to the Company shall be
deemed, in every respect, effective service of process upon the Company.
18. Waiver of Jury Trial. The Company and CF&Co hereby irrevocably waive
any right either may have to a trial by jury in respect of any claim based upon
or arising out of this agreement or any transaction contemplated hereby.
19. Absence of Fiduciary Duties. The parties acknowledge that they are
sophisticated in business and financial matters and that each of them is solely
responsible for making its own independent investigation and analysis of the
transactions contemplated by this Agreement. They further acknowledge that CF&Co
has not been engaged by the Company to provide, and has not provided, financial
advisory services in connection with the terms of the offering and sale of the
Shares nor has CF&Co assumed at any time a fiduciary relationship to the Company
in connection with such offering and sale. The parties also acknowledge that the
provisions of this Agreement fairly allocate the risks of the transactions
contemplated hereby among them in light of their respective knowledge of the
Company and their respective abilities to investigate its affairs and business
in order to assure that full and adequate disclosure has been made in the
Registration Statement and the Prospectus (and any amendments and supplements
thereto). The Company hereby waives, to the fullest extent permitted by law, any
claims it may have against CF&Co for breach of fiduciary duty or alleged breach
of fiduciary duty and agrees CF&Co shall have no liability (whether direct or
indirect) to the Company in respect of such a fiduciary duty claim or to any
person asserting a fiduciary duty claim on behalf of or in right of the Company,
including stockholders, employees or creditors of Company.
20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery of an executed
Agreement by one party to the other may be made by facsimile transmission.
[Remainder of Page Intentionally Blank]
If the foregoing accurately reflects your understanding and agreement
with respect to the matters described herein please indicate your agreement by
countersigning this Sales Agreement in the space provided below.
Very truly yours,
DRYSHIPS INC.
By:
-----------------------------------
Name:
Title:
ACCEPTED as of the date
first-above written:
CANTOR XXXXXXXXXX & CO.
By:
------------------------------------
Name:
Title:
[Signature page to the Sales Agreement]
SCHEDULE 1
CANTOR XXXXXXXXXX & CO.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
[Date]
Mr. Xxxxxx Xxxxxxxx President and Chief Executive Officer DryShips Inc.
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx 00000
Xxxxxx, Xxxxxx
FORM OF PLACEMENT NOTICE
Dear Xx. Xxxxxxxx:
This confirms our agreement to sell up to [ ] shares of Common Stock, par value
$0.01 per share (the "Shares" or "Placement Shares"), of DryShips Inc., a
Xxxxxxxx Islands corporation (the "Company"), pursuant to the CONTROLLED EQUITY
OFFERING(SM) SALES AGREEMENT between the Company and Cantor Xxxxxxxxxx & Co.
("CF&Co"), dated ____________ (the "Agreement"). Terms used herein but not
defined herein shall have the meanings set forth in the Agreement.
Number of Shares to be Sold:
------------------------------------------
Price at which Shares shall be Sold:
------------------------------------------
Settlement Date:
------------------------------------------
Gross Proceeds:
------------------------------------------
Placement Fee:
------------------------------------------
Manner and capacity in which Shares
are to be Sold: ------------------------------------------
Issuer Free Writing Prospectus(es)
(if any) ------------------------------------------
By executing this Placement Notice, the parties agree to comply with the
aforementioned agreement, and to execute the transaction as described herein:
Placements. This Placement Notice is entered into pursuant to, and is subject to
all of the terms and conditions of, the Agreement. The terms set forth in this
Placement Notice will be binding on the Company upon its execution of this
Placement Notice. In the event of a conflict between the terms of the Agreement
and the terms of this Placement Notice, the terms of this Placement Notice will
control.
Suspension of Sales. Subject to the terms of the Agreement, the Company or CF&Co
may, upon notice to the other party in writing or by telephone (confirmed
immediately by verifiable facsimile transmission), suspend any sale of Placement
Shares; provided, however, that such suspension shall not affect or impair
either party's obligations with respect to any Placement Shares sold hereunder
prior to the receipt of such notice. The Company agrees that no such notice
shall be effective against CF&Co unless it is made to one of the individuals
named on Schedule 2 to the Agreement, as such Schedule may be amended from time
to time.
Termination. Notwithstanding anything herein contained to the contrary, this
Placement Notice (and the obligations of the CF&Co with respect to the Shares)
may be terminated in the absolute discretion of the CF&Co, by notice given to
the Company, if after the execution and delivery of this Placement Notice and
prior to the Settlement Date (as defined below) (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange or the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago
Mercantile Exchange, the Chicago Board of Trade, or the Nasdaq National Market,
(ii) trading of any securities of or guaranteed by the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a material
disruption in securities settlement, payment or clearance services in the United
States shall have occurred, (iv) any moratorium on commercial banking activities
in New York shall have been declared by either Federal or New York State
authorities, or (v) there shall have occurred any change in financial markets or
any calamity or crisis that, in the judgment of the CF&Co, is material and
adverse and which, in the judgment of the CF&Co makes it impracticable or
inadvisable to proceed with the offer, sale, or delivery of the Shares on the
terms and in the manner contemplated in the Placement Notice.
Settlement of Placement Shares. Unless otherwise specified herein, settlement
for sales of Placement Shares will occur on the third (3rd) Business Day (or
such earlier day as is industry practice for regular-way trading) following the
date on which such sales are made (the "Settlement Date"). The amount of
proceeds to be delivered to the Company on the Settlement Date against the
receipt of the Placement Shares sold ("Net Proceeds") will be equal to the
aggregate sales price at which such Placement Shares were sold, after deduction
for (i) CF&Co's commission, discount, or other compensation for such sales
payable by the Company pursuant to Section 2 or Section 3 of the Agreement and
as described herein, (ii) any other amounts due and payable by the Company to
CF&Co pursuant to Section 7(h) of the Agreement, and (iii) any transaction fees
imposed by any governmental or self-regulatory organization in respect of such
sales.
Delivery of Shares. On or before the Settlement Date, the Company will, or will
cause its transfer agent to, electronically transfer the Shares being sold by
crediting CF&Co's or its designee's account at The Depository Trust Company
through its Deposit Withdrawal Agent Commission System or by such other means of
delivery as may be mutually agreed upon by the parties hereto and, upon receipt
of such Shares, which in all cases shall be freely tradeable, transferable,
registered shares in good deliverable form, CF&Co will deliver the related Net
Proceeds in same day funds delivered to an account designated by the Company
prior to the Settlement Date. If the Company defaults in its obligation to
deliver Shares on the Settlement Date, the Company agrees that in addition to
and in no way limiting the rights and obligations set forth in Section 10(a)
(Indemnification) of the Agreement, it will (i) hold CF&Co harmless against any
loss, claim, damage, or expense (including reasonable legal fees and expenses),
as incurred, arising out of or in connection with such default by the Company
and (ii) pay to CF&Co any commission, discount, or other compensation to which
CF&Co would otherwise have been entitled absent such default.
If the foregoing accurately reflects your understanding and agreement with
respect to the matters described herein please indicate your agreement by
countersigning this Placement Notice in the space provided below.
Very truly yours,
CANTOR XXXXXXXXXX & CO.
By:
------------------------------------------------
Name:
Title:
[Signature page to the Placement Notice]
By executing this Placement Notice, the undersigned certifies that (i)
all of the representations and warranties contained in the Agreement are true
and correct on the date hereof and will be true and correct on the Settlement
Date as if made on the date hereof and the Settlement Date, respectively, (ii)
the Board of Directors of the undersigned has duly authorized and approved the
terms and conditions of this Placement Notice and the Agreement, (iii) the
Company is in full compliance with its obligations under the Agreement and (iv)
all of the conditions precedent to the consummation of the sales contemplated by
this Placement Notice have been satisfied. The undersigned undertakes to
promptly notify CF&Co in the event that the above certification shall cease to
be true and correct during any period in which sales may be made under this
Placement Notice and prior to the Settlement Date.
Pursuant to its signature below, the undersigned acknowledges its
acceptance and agreement with the terms and conditions set forth, and the
matters described, in this Placement Notice as of the date first above written.
DRYSHIPS INC.
By:
--------------------------------------
Name:
Title:
[Signature page to the Placement Notice]
SCHEDULE 2
CANTOR XXXXXXXXXX & CO.
Xxxxxx X. Xxxxxx
Xxxx X. Xxxxxx
Xxxxxxx Xxxxxxxxxxxx
Xxxx Xxxxx
Xxxxxxx XxXxxxxx
Xxxxxx Xxxxx
SCHEDULE 3
Subsidiaries of the Company
Company Jurisdiction of Organization
EXHIBIT A
OFFICER'S CERTIFICATE
I, [name of executive officer], the [title of executive officer] of
DryShips Inc. ("Company"), a Xxxxxxxx Islands corporation, do hereby certify in
such capacity and on behalf of the Company pursuant to Section 7(n) of the
Controlled Equity Offering SM Sales Agreement dated __________ (the "Sales
Agreement") between the Company and Cantor Xxxxxxxxxx & Co., to the best of my
knowledge that:
(i) The representations and warranties of the Company in Section 6 of
the Sales Agreement are true and correct on and as of the date hereof, with the
same force and effect as if expressly made on and as of the date hereof; and
(ii) The Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied pursuant to the Sales
Agreement at or prior to the date hereof.
By:
-----------------------------------
Name:
Title:
_________, 2006
