CONTROLLED EQUITY OFFERINGSM SALES AGREEMENT
Exhibit
1.1
EXECUTION
VERSION
CONTROLLED
EQUITY OFFERINGSM
June 19,
2008
Cantor
▇▇▇▇▇▇▇▇▇▇ & Co.
▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
OceanFreight
Inc., a corporation incorporated under the laws of the Republic of the ▇▇▇▇▇▇▇▇
Islands (the “Company”), confirms
its agreement (this “Agreement”) with
Cantor ▇▇▇▇▇▇▇▇▇▇ & 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 (the “Shares”) of the
Company’s Class A common shares, $0.01 par value per share (the “Common shares”) 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 by e-mail notice (or other method mutually agreed to in writing
by the parties) containing the parameters in accordance with which it desires
the Shares to be sold, which shall at a minimum include the number of Shares
(“Placement
Shares”) to be issued, the time period during which sales are requested
to be made, any limitation on the number of Shares that may be sold in any one
day and any minimum price below which sales may not be made (a “Placement Notice”), a
form of which containing such minimum sales parameters necessary is attached
hereto as Schedule
1. The Placement Notice shall originate from any of the
individuals from the Company set forth on Schedule 2 (with a
copy to each of the other individuals from the Company listed on such schedule),
and shall be addressed to each of the individuals from CF&Co set forth on
Schedule 2, as
such Schedule 2
may be amended from time to time. The Placement Notice shall be
effective upon receipt by CF&Co unless and until (i) in accordance with the
notice requirements set forth in Section 4, CF&Co declines to accept the
terms contained therein for any reason, in its sole discretion, (ii) the entire
amount of the Placement Shares have been sold, (iii) in accordance with the
notice requirements set forth in Section 4, the Company suspends or terminates
the Placement Notice, (iv) the Company issues a subsequent Placement Notice with
parameters superseding those on the earlier dated Placement Notice, or (v) the
Agreement has been terminated under the provisions of Section 12. The
amount of compensation to be paid by the Company to CF&Co with respect to
each Placement shall be up to two and one half percent (2.5%) of gross proceeds
for each Placement. It is expressly acknowledged and agreed that
neither the Company nor CF&Co will have any obligation whatsoever with
respect to a Placement or any Placement Shares unless and until the Company
delivers a Placement Notice to CF&Co and CF&Co does not decline such
Placement Notice pursuant to the terms set forth above, 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 herein set
forth, upon the Company’s issuance of a Placement Notice, and unless the sale of
the Placement Shares described therein has been declined, 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 Stock Market
(“Nasdaq”), on
any other existing trading market for the Common shares 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 four percent (4.0%) 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 Shares are purchased and sold on the principal market on
which the Common Shares are listed or quoted.
4. Suspension of Sales.
The Company or CF& Co. may, upon notice to the other party in writing, by
telephone (confirmed immediately by verifiable facsimile transmission) by e-mail
notice (or other method mutually agreed to in writing by the parties), 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.
(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.
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(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 Shares are registered pursuant to
Section 12(b) 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 periodic reporting
requirements of the Exchange Act, and all of such filings have been made on a
timely basis. The Common Shares are currently listed on the NASDAQ
under the trading symbol “OCNF.” 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 333-150579) 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 (“▇▇▇▇▇”). 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.
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(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 ▇▇▇▇▇▇▇▇ 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”).
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(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. Except
as described in the Registration Statement or the Prospectus, 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.
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(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 NASD administered by the Financial Industry Regulatory Authority (“FINRA”) 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 other than as described in the
Registration Statement or the Prospectus.
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(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 Shares, conforms in all material respects to the description thereof
contained in the Registration Statement and the Common Shares, 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.
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(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 Common Shares or securities or instruments convertible
into, exchangeable for and/or otherwise entitling the holder thereof to acquire
Common Shares 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 or
the most recent Annual Report on Form 20-F filed with the Commission 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 by
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 reasonably be expected to have a Material Adverse
Effect.
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(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.
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(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
Accountants. Ernst & Young, which has audited the
financial statements of the Company and its Subsidiaries appearing in the
Company’s most recent Annual Report on Form 20-F incorporated by reference into
or, if applicable, included 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.
10
(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 ▇▇▇▇▇▇▇▇ 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.
11
(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 Shares.
(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 FINRA member” or “associated person of a FINRA member” (within
the meaning of Article I of the Bylaws of the FINRA).
(ee) ▇▇▇▇▇▇▇▇-▇▇▇▇▇. The
principal executive officer and principal financial officer of the Company have
made all certifications required by Sections 302 and 906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act of 2002 and the rules and regulations promulgated in connection therewith
(the “▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act”) with respect to all reports, schedules, forms, statements and other
documents required to be filed by it with the Commission, and the statements
contained in any such certification are complete and correct. The
Company, and to its knowledge, all of the Company’s directors or officers, in
their capacities as such, are in compliance in all material respects with all
applicable effective provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act (and the Company
intends to comply with all applicable provisions that are not yet effective upon
effectiveness).
(ff) 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.
(gg) 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.
(hh) 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.
(ii) 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 Common Shares 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.
12
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 Shares of the
Company or a security convertible into the Common Shares 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.
13
(d) Listing of Placement
Shares. The Company will use commercially reasonable efforts
to cause the Shares to be quoted on the NASDAQ 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 NASDAQ, or (vii)
filing fees of the Commission and FINRA or (viii) the cost of publication of a
tombstone ad in The Wall Street Journal.
14
(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 Common Shares (other than the Shares offered pursuant to the
provisions of this Agreement) or securities convertible into or exchangeable for
Common Shares, warrants or any rights to purchase or acquire, Common Shares
during the period beginning on the fifth (5th) Trading Day immediately prior to
the date on which any Placement Notice is delivered by the Company 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; provided
that the Company shall be permitted to issue up to an aggregate of 250,000
shares of its Class B subordinated common stock, par value $0.01 per share
(“Subordinated Shares”), to its officers and/or directors ; 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 Common
Shares (other than the Shares offered pursuant to the provisions of this
Agreement) or securities convertible into or exchangeable for Common Shares,
warrants or any rights to purchase or acquire, Common Shares 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 Shares, options to
purchase Common Shares or Common Shares 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 Shares
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. For purposes of this Section 7(j), as of the
date hereof, the Company has 2,085,150 Subordinated Shares issued and
outstanding which such Subordinated Shares are convertible into Common Shares in
accordance with the Company’s Amended & Restated Articles of
Incorporation.
(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.
15
(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 or report on Form 6-K incorporated by reference
into the Registration Statement (a “Form 6-K”) (each and every such filing, a
“Filing Date”),
which prospectus supplement or Form 6-K 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 or Form 6-K 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 a Registration Statement is declared effective, on the first
Settlement Date hereunder, on each Filing Date and each time that a 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 a Registration
Statement or a 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. (1) On such date as CF&Co shall request,
including, without limitation, on the date that a Registration Statement is
declared effective, on the first Settlement Date hereunder, on each Filing Date,
each time that a 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
▇▇▇▇▇▇ & ▇▇▇▇▇▇ 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 a
Registration Statement is declared effective, on the first Settlement Date
hereunder, on each Filing Date, each time that a 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 ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇▇▇▇▇▇ 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.
16
(3) On such date as CF&Co shall request, including, without
limitation, on the date that a Registration Statement is declared effective, on
the first Settlement Date hereunder, on each Filing Date, each time that a
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 S. & ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
& Co., 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 a Registration Statement is declared effective, on the first Settlement
Date hereunder, on each Filing Date, each time that a 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 ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇▇▇, Cypriot 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 a Registration Statement is declared effective, on the first Settlement
Date hereunder, on each Filing Date, each time that a 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 Cefai & Associates, 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)(5) to
the same extent as if it were dated the date of such letter.
17
(p) Comfort
Letters. On such date as CF&Co shall request, including,
without limitation, on the date that a Registration Statement is declared
effective, on the first Settlement Date hereunder and each time that a
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.
18
(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:
19
(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.
20
(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, and trading in the Common Shares 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
12(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
21
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
22
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.
23
(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
24
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 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.
25
(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 ▇▇▇▇▇▇▇▇▇▇ & Co., ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (telefax: 212-829-4972); Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇, Managing Director, with a copy to ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇
LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, fax no. (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.; or if sent to the Company, shall be
delivered to OceanFreight Inc. ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ (fax:
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, Attention: Antonis Kandylidis, Chief Executive Officer, with a
copy to ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, fax no. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, 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 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.
26
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 ▇▇▇▇▇▇ & ▇▇▇▇▇▇
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.
27
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]
28
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,
|
By:
|
/s/ Antonis Kandylidis |
|
Antonis
Kandylidis
|
|
|
Chief
Executive Officer
|
ACCEPTED
as of the date
first-above
written:
CANTOR
▇▇▇▇▇▇▇▇▇▇ & CO.
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ |
|
▇▇▇▇▇▇▇
▇▇▇▇▇
|
|
|
Managing
Director
|
|
[Signature
page to the Sales Agreement]
|
29
SCHEDULE
1
FORM OF PLACEMENT
NOTICE
| From: | [ ] |
| Cc: | [ ] |
| To: | [ ] |
| Subject: | Controlled Equity Offering—Placement Notice |
Gentlemen:
Pursuant
to the terms and subject to the conditions contained in the Controlled Equity
OfferingSM Sales
Agreement between OceanFreight Inc. (the “Company”) and Cantor
▇▇▇▇▇▇▇▇▇▇ & Co. (“CF&Co”) dated
[________], 2008 (the “Agreement”), I hereby
request on behalf of the Company that CF&Co sell up to
[ ] of the Company’s common shares, $0.01 par value per
share, at a minimum market price of $[] per share during [insert applicable
period].
[Insert
other parameters as necessary]
1
SCHEDULE
2
|
CANTOR
▇▇▇▇▇▇▇▇▇▇ & CO.
|
| ▇▇▇▇▇▇▇ ▇▇▇▇▇ |
| ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ |
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ |
| OCEANFREIGHT INC. |
| Antonis Kandylidis |
SCHEDULE
3
|
Subsidiary
|
Jurisdiction
of Incorporation
|
|
Oceanship
Owners Limited
|
▇▇▇▇▇▇▇▇
Islands
|
|
Oceanwealth
Owners Limited
|
▇▇▇▇▇▇▇▇
Islands
|
|
Oceanventure
Owners Limited
|
▇▇▇▇▇▇▇▇
Islands
|
|
Oceanresources
Owners Limited
|
▇▇▇▇▇▇▇▇
Islands
|
|
Oceanstrength
Owners Limited
|
▇▇▇▇▇▇▇▇
Islands
|
|
Oceanenergy
Owners Limited
|
▇▇▇▇▇▇▇▇
Islands
|
|
Oceantrade
Owners Limited
|
▇▇▇▇▇▇▇▇
Islands
|
|
Oceanprime
Owners Limited
|
▇▇▇▇▇▇▇▇
Islands
|
|
Oceanclarity
Owners Limited
|
▇▇▇▇▇▇▇▇
Islands
|
|
Kifissia
Star Owners Inc.
|
▇▇▇▇▇▇▇▇
Islands
|
|
Oceanfighter
Owners Inc.
|
▇▇▇▇▇▇▇▇
Islands
|
EXHIBIT
A
OFFICER’S
CERTIFICATE
I, [name
of executive officer], the [title of executive officer] of OceanFreight Inc.
(“Company”), a
▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇▇▇ & 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: |
_________,
2008
SK 25754 0002
893294