SUPPLEMENTAL AGREEMENT
This
Supplemental Agreement is entered into as of this 12th
day of
January, 2007 by and among
(i)
Star Maritime Acquisition Corp. ("Star Maritime"), a Delaware corporation,
(ii)
Star Bulk
Carriers Corp. ("Star Bulk"), a Xxxxxxxx Islands corporation wholly-owned by
Star Maritime,
for itself individually and for/on behalf of each of the Buyers (as hereinafter
defined), and
(iii)
TMT Co., Ltd. ("TMT"), a Taiwan corporation, for itself individually and for/on
behalf of
each
of the Sellers (as hereinafter defined).
Capitalized
terms not otherwise defined herein shall have the meanings assigned to such
terms
in
Schedule 1 hereto.
The
purpose of this Supplement Agreement is, inter
alia,
to
provide for the timing of the delivery
of, and payment of the consideration for, the Vessels as provided for under
the
MOAs which
are
being concurrently executed and delivered herewith.
In
consideration of the premises, the parties hereto agree as follows:
| 1. |
If
the Merger and the acquisition by Star Bulk of the Vessels are not
approved by the
requisite vote of the stockholders of Star Maritime on the Proxy
Vote
Date, the
MOAs and this Supplemental Agreement shall be deemed
terminated, cancelled
and of no further force and effect, in each case with any further
action
required
of the parties.
|
| 2. |
If
the Merger and the acquisition by Star Bulk of the Vessels are
approved by
the requisite
vote of the Star Maritime stockholders on the Proxy Vote Date,
Star Maritime
and Star Bulk shall proceed forthwith to take all actions necessary
to implement
the Merger on or before the Effective Date of
Merger.
|
|
3.
|
Star
Bulk shall purchase the Vessels for the Aggregate Purchase Price,
which consists
of two components: (1) the Stock Consideration and (2) the Cash
Consideration.
The Aggregate Purchase Price shall be paid as
follows:
|
| (i) |
first,
in the form of the Stock Consideration (which shall be issued to
TMT,
not in its individual capacity but solely as agent for each of the
applicable
Sellers, concurrently with the Merger);
and
|
| (ii) |
second,
only after Vessels with an aggregate value (as set forth in Schedule
2 hereto) that equals the aggregate value of the Stock Consideration
(the "Stock
Consideration Threshold")
have been delivered, in
the form of the Cash Consideration.
|
If
a
Vessel is delivered whose value, together with all previous Vessels
delivered, exceeds
the Stock Consideration Threshold, the remaining portion of the
allocated Aggregate
Purchase Price for such Vessel and any other remaining Vessels shall be
paid
in the form of Cash Consideration upon delivery of each such Vessel (allocated
as per Schedule 2 hereto).
1
|
4.
|
As
the 100% parent of each of the Sellers and the Buyers, respectively,
TMT
and Star
Maritime hereby guarantees the due and punctual performance of each
of the
Sellers and the Buyers, respectively, under the relevant
MOA.
|
|
5.
|
The
Vessels, on delivery under the MOAs, shall be operated either on
a spot
basis or
subject to term employment called for, with minimum terms and aggregate
minimum
daily hire rate, as provided for in Schedule 4. Term employment shall
be
with first class charterers and otherwise shall contain standard
industry
terms for
employment of such Vessels and also a charter clause and a form of
novation agreement,
both substantially in the forms attached hereto as Exhibit A and
B,
respectively.
TMT undertakes to procure such term employment by the Sellers with
a third party or, in the case of the Mommy Duckling and, at its sole
option, one
of C
Duckling, F Duckling, G Duckling or I
Duckling,
with
itself as charterer, as
soon as possible but no later than thirty (30) days from the date
of this
Supplemental
Agreement or to pay Star Bulk the difference between the aggregate
daily hire rate so fixed and the aggregate minimum daily hire rate
provided
for in Schedule 4 (which aggregate daily hire rate difference shall
be
calculated
from the time of delivery of all such Vessels under the MOAs) during
the
relevant minimum employment term set forth in Schedule 4 (which minimum
employment
term shall be measured from the date of delivery of the applicable
Vessel
to its charterers under the applicable charter). Should TMT be unable
to
secure
a novation agreement substantially in the form attached hereto as
Exhibit
B with
respect to A
Duckling prior
to or at delivery of the Vessel, the Buyer shall, concurrent
with delivery, time charter the Vessel to TMT or an affiliate designee
of
TMT on the same terms and conditions as the Vessel's current time
charter
term
employment.
|
|
6.
|
If
any of the Sellers is unable to deliver its Vessel pursuant to and
in
compliance with
the terms of its MOA, Star Bulk and TMT shall confer and cooperate
to
identify
mutually acceptable replacement vessel and enter into a binding purchase
agreement
for such replacement vessel within forty-five (45) days from the
required
delivery date of the Vessel being replaced. Should the purchase price
(based on prevailing market rates) of any replacement vessel be higher
than the the
portion of the Aggregate Purchase Price allocated to the Vessel being
replaced,
Star Bulk hereby agrees to pay TMT or its nominee in cash such price
difference,
which payment shall be made concurrently with delivery of the replacement
Vessel. Should the purchase price (based on prevailing market rates)
of
any replacement vessel be lower than the Aggregate Purchase Price
allocated to the
Vessel being replaced, TMT hereby agrees to pay in cash to Star Bulk
such
price
difference, which payment shall be made concurrently with delivery
of the
replacement Vessel. If a binding purchase agreement for a replacement
vessel is not entered into within the required forty-five (45) days
period, Star Bulk/Buyer shall
have the right to terminate the MOA for the Vessel being replaced
whereupon
neither party to such MOA shall have any rights or liabilities
thereunder.
|
2
|
7.
|
This
Supplemental Agreement shall be governed and construed in accordance
with
Title 9 of the United States Code and the law of the State of New
York and
should
any dispute arise under this Supplemental Agreement the matter in
dispute
shall
be referred to three persons at New York, one to be appointed by
Star
Maritime
and Star Bulk and one to be appointed by TMT, and the third by the
two
so
chosen; their decision or that of any two of them shall be final
and for
the purpose
of enforcing of any award, this Supplemental Agreement may be made
a
rule
of the court. The proceedings shall be conducted in accordance with
the
rules of the Society of Maritime Arbitrators, Inc. in New
York.
|
|
8.
|
In
the event of any conflict between the provisions of any MOA and this
Supplemental
Agreement, the provisions of this Supplement Agreement shall prevail.
|
[Signature
Page Follows]
3
IN
WITNESS WHEREOF, the undersigned has caused this Supplemental Agreement to
be
executed and delivered as of this date first indicated above by these duly
authorized officers or
representatives.
|
STAR
MARITIME ACQUISITION CORP.
|
||
| |
|
|
| By: | /s/ Prokopios Tsirigakis | |
|
Name: Prokopios Tsirigakis Title: Chairman, Chief Executive Officer and President |
||
|
STAR
BULK CARRIERS CORP.,
for
itself individually and for/on behalf of each of the
Buyers
|
||
| |
|
|
| By: | /s/ Prokopios Tsirigakis | |
|
Name: Prokopios Tsirigakis
Title: President |
||
|
TMT
CO., LTD.,
for
itself individually and for/on behalf of each of the
Sellers
|
||
| |
|
|
| By: | /s/ Nobu Su | |
|
Name: Nobu Su Title: Chairman and Chief Executive Officer |
||
SCHEDULE
1
DEFINITIONS
As
used
in the Supplemental Agreement to which this Schedule 1 is attached, the
following
terms have the meanings set forth below:
|
"Aggregate
Purchase Price"
|
shall
mean $345,237,520.
|
|
"Buyers"
|
shall
mean, collectively, Star Bulk and those entities wholly-owned
by Star Bulk for and on behalf of which Star
Bulk is purchasing the Vessels.
|
|
"Cash
Consideration"
|
shall
mean $ 224,499.998.65.
|
|
"Effective
Date of Merger"
|
shall
mean the date, which shall not more than 15 days of the
Proxy Vote Date approving the Merger, on which the merger of Star
Maritime
into Star Bulk becomes effective under
the Xxxxxxxx Islands law.
|
|
"Merger"
|
shall
mean the business combination of Star Maritime with
Star Bulk effected by way of a merger in which Star Bulk
is the surviving corporation.
|
|
"Proxy
Vote Date"
|
shall
mean the date on which the proposed merger of Star Maritime
into Star Bulk is submitted for vote of the shareholders of Star
Maritime.
|
|
"MOAs"
|
shall
mean, collectively, the memoranda of agreement listed
and described in Schedule 3.
|
|
"Sellers"
|
shall
mean, collectively, those entities wholly-owned by TMT
and identified as sellers of the Vessels in the MOAs listed on
Schedule
3.
|
|
"Stock
Consideration"
|
shall
mean 12,537,645 shares of common stock, par value $0.01
per share, of the Star Bulk, equivalent to $120,737,521.35.
|
|
"Stock
Consideration Threshold"
|
shall
have the meaning set forth in Section 3(ii).
|
|
"Vessels"
|
shall
mean, collectively, the vessels listed on Schedule 2 and
to be delivered under the MOAs listed on Schedule
3.
|
SCHEDULE
2
AGGREGATE
PURCHASE PRICE ALLOCATION
|
Vessel
Name
|
Price
Allocation
|
|||
|
A
DUCKLING
|
$
|
59,329,707.14
|
||
|
B
DUCKLING
|
61,375,559.11
|
|||
|
C
DUCKLING
|
43,474,354.37
|
|||
|
F
DUCKLING
|
40,917,039.41
|
|||
|
G
DUCKLING
|
40,917,039.41
|
|||
|
I
DUCKLING
|
42,451,428.39
|
|||
|
J
DUCKLING
|
43,985,817.36
|
|||
|
MOMMY
DUCKLING
|
12,786,574.81
|
|||
|
Aggregate
Purchase Price:
|
$
|
345,237,520.00
|
||
SCHEDULE
3
MEMORANDA
OF AGREEMENT
Memorandum
of Agreement relating to the A Duckling dated January 12, 2007 between Star
Bulk
Carriers Corp., as buyer, and A Duckling Corporation, as seller.
Memorandum
of Agreement relating to the B Duckling dated January 12, 2007 between Star
Bulk
Carriers Corp., as buyer, and B Duckling Corporation, as seller.
Memorandum
of Agreement relating to the C Duckling dated January 12, 2007 between Star
Bulk
Carriers Corp., as buyer, and C Duckling Corporation, as seller.
Memorandum
of Agreement relating to the F Duckling dated January 12, 2007 between Star
Bulk
Carriers Corp., as buyer, and F Duckling Corporation, as seller.
Memorandum
of Agreement relating to the G Duckling dated January 12, 2007 between Star
Bulk
Carriers Corp., as buyer, and G Duckling Corporation, as seller.
Memorandum
of Agreement relating to the I Duckling dated January 12, 2007 between Star
Bulk
Carriers Corp., as buyer, and I Duckling Corporation, as seller.
Memorandum
of Agreement relating to the J Duckling dated January 12, 2007 between Star
Bulk
Carriers Corp., as buyer, and J Duckling Corporation, as seller.
Memorandum
of Agreement relating to the Mommy Duckling dated January 12, 2007 between
Star
Bulk Carriers Corp., as buyer, and Mommy Management Corp., as
seller.
SCHEDULE
4
|
Vessel
|
Contract
Type/ Minimum
Term Employment
|
Targeted
Daily Hire Rate
|
|||||
|
A
DUCKLING
|
Time Charter/3 Years |
$
|
47,000
|
||||
|
C
DUCKLING
|
Time Charter/1 Year |
$
|
28,500
|
||||
|
F
DUCKLING
|
Time Charter/2 Years |
$
|
24,500
|
||||
|
G
DUCKLING
|
Time Charter/2 Years |
$
|
24,500
|
||||
|
I
DUCKLING
|
Time Charter/1 Year |
$
|
28,500
|
||||
|
MOMMY
DUCKLING
|
Time Charter/1 Year |
$
|
18,000
|
||||
| Aggregate Minimum Daily Hire Rate: | $ | 171,000 | |||||
|
B
DUCKLING
|
Spot
|
N/A
|
|||||
|
J
DUCKLING
|
Spot |
|
N/A
|
||||
EXHIBIT
A
FORM
OF
CHARTER CLAUSE
The
[Charterer] hereby acknowledges that the [Owner] or its parent, TMT CO., LTD.,
a
Taiwan corporation
(or "TMT"), may transfer the Vessel to STAR BULK CARRIERS CORP., a Xxxxxxxx
Islands corporation ("Star Bulk") or a wholly-owned subsidiary of Star Bulk,
and
further
agrees to consent to such sale and enter into a novation agreement,
substantially in the form
attached hereto as Exhibit [______], pursuant to which the [Owner] will transfer
all of its rights, liabilities,
duties and obligations with respect to the [Charterer] under [the Charter
Agreement] with
effect from and including the date of the delivery of the Vessel to Star Bulk
or
a wholly-owned subsidiary of Star Bulk.
EXHIBIT
B
[FORM
OF]
NOVATION
AGREEMENT
THIS
NOVATION AGREEMENT (this "Agreement")
is
made and entered into as of [_______],
2007,
by and among [___________],
a
[____________]
corporation (the
"Transferor"), [___________],
a
company incorporated under the laws of [___________]
and the
charterer of the Vessel (the "Charterer") and [___________],
a
Xxxxxxxx
Islands corporation (the "Transferee").
WITNESSETH:
WHEREAS,
the Transferor owns the [___________],
a
drybulk carrier with a cargo-carrying
capacity of [___________]
deadweight tons (the "Vessel");
WHEREAS,
the Vessel is to be sold by the Transferor to the Transferee pursuant to a
memorandum
of agreement dated January [______],
2007
(the "MOA");
WHEREAS,
the Transferor and the Charterer are parties to a charter agreement, dated
[___________],
2007,
for the charter of the Vessel (the "Charter Agreement");
WHEREAS,
the Transferor desires to transfer by novation to the Transferee, and the
Transferee
wishes to accept the transfer by novation of all the rights, liabilities, duties
and obligations of the Transferor with respect to the Charterer under the
Charter Agreement with effect
from and including the date of the delivery of the Vessel to the Transferee
(the
"Novation Date");
WHEREAS,
the Transferor desires to transfer by novation to the Transferee, and the
Transferee
wishes to accept the transfer by novation, of all the rights, liabilities,
duties and obligations of the Transferor with respect to the Charterer under
the
Charter Agreement with effect
from and including the Novation Date; and
WHEREAS,
the Charterer desires to consent to the Transferor's sale of the Vessel
pursuant
to the MOA and transfers by novation to the Transferee of all the rights,
liabilities, duties
and obligations of the Transferor with respect to the Charterer under the
Charter Agreement
with effect from and including the Novation Date.
NOW,
THEREFORE, in consideration of the mutual representations, warranties and
covenants
contained in this Agreement and other good and valuable consideration (the
receipt and
sufficiency of which are hereby acknowledged by each of the parties), the
parties hereto agree
as
follows:
1.
Novation
With
effect from and including the Novation Date:
(a)
the
Charterer consents to the Transferor's sale of the Vessel to the Transferee
pursuant
to the MOA, the change of the Vessel's flag to the Republic of the Xxxxxxxx
Islands
and the change of the Vessel's name as directed by the
Transferee;
(b) the
Charterer releases the Transferor from the Transferor' obligations and
liabilities
to the Charterer under the Charter Agreement arising on or after the Novation
Date
and
which relate to the period commencing from the Novation Date, such release
and
discharge being without prejudice to the obligations and liabilities of the
Transferee to
the
Charterer pursuant to the Charter Agreement;
(c) the
Transferee agrees with the Transferor and the Charterer to assume all the
rights,
title, benefit, interest, liabilities and obligations of the Transferor in
and
under the Charter
Agreement, in lieu of the Transferor, arising on or after the Novation Date
and
which
relate to the period commencing from the Novation Date and hereby undertakes
to
observe
and perform in favor of and for the benefit of the Charterer all such
obligations and
liabilities arising on or after the Novation Date and which relate to the period
commencing
from the Novation Date;
(d) the
Charterer agrees with the Transferee to observe and perform in favor of and
for
the
benefit of the Transferee, in lieu of the Transferor, all of their obligations
and liabilities
under the Charter Agreement arising on or after the Novation Date and which
relate
to
the period commencing from the Novation Date;
(e) the
Charterer expressly consents to and accept the assumption by the Transferee
of
the
rights, title, benefit, interest, obligations and liabilities of the Transferor
under the Charter
Agreement, in lieu of the Transferor, arising on or after the Novation Date
and
which
relate to the period commencing from the Novation Date and agrees that any
actions,
proceedings, demands, claims, liabilities, damages, costs and expenses of any
nature
whatsoever arising on or after the Novation Date shall be made against the
Transferee
and not the Transferor;
(f) the
Transferor agrees at all times to keep the Transferee, its successors and
assigns
fully indemnified against all actions, proceedings, demands, claims,
liabilities, damages,
costs and expenses of any nature whatsoever (other than indirect, consequential,
punitive or special damages), made against the Transferee, its successors and
assigns or for which the Transferee, its successors and assigns may be held
liable in relation
to such actions, proceedings, demands, claims, liabilities, damages, costs
and
expenses
of the Transferor accrued or existing prior to the Novation Date. The
Transferee
shall give the Transferor prompt written notice of any such actions,
proceedings,
demands, claims, liabilities, damages, costs and expenses of any nature
whatsoever,
which the Transferee believes will give rise to indemnification by the
Transferor
under this paragraph and the Transferor shall have the right to defend and
to
direct
the defense against any such claim, suit or demand, in the Transferor's name
at
the Transferor's
expense and with counsel of Transferor's own choosing, which counsel shall
be
reasonably satisfactory to the Transferee; provided that such claim, suit or
demand would
not
adversely affect any rights of the Transferee or the ownership and operation
of
the Vessel; and
(g) the
Transferee agrees at all times to keep the Transferor, its successors and
assigns
fully indemnified against all actions, proceedings, demands, claims,
liabilities, damages,
costs and expenses of any nature whatsoever (other than indirect, consequential,
punitive or special damages), made against the Transferor, its successors and
assigns or for which the Transferor, its successors and assigns may be held
liable in relation to such actions, proceedings, demands, claims, liabilities,
damages, costs and expenses
of the Transferee accrued or existing on or after the Novation Date. The
Transferor
shall give the Transferee prompt written notice of any such actions,
proceedings,
demands, claims, liabilities, damages, costs and expenses of any nature
whatsoever,
which the Transferor believes will give rise to indemnification by the
Transferee
under this paragraph and the Transferee shall have the right to defend and
to
direct
the defense against any such claim, suit or demand, in the Transferee's name
at
the Transferee's
expense and with counsel of Transferee's own choosing, which counsel
shall
be
reasonably satisfactory to the Transferor; provided that such claim, suit or
demand
would not adversely affect any rights of the Transferor.
2
2.
Representations and Warranties.
Each
party represents to the other party that:
(a) Status.
It is
duly organized and validly existing under the laws of the jurisdiction
of
its
organization or incorporation and, if relevant under such laws, in good
standing;
(b) Powers.
It has
the power to execute this Agreement and any other documentation relating to
this
Agreement to which it is a party, to deliver this Agreement and any other
documentation
relating to this Agreement and to perform its obligations under this
Agreement
and has taken all necessary action to authorize such execution, delivery and
performance;
(c) No
Violation or Conflict.
Such
execution, delivery and performance do not violate
or conflict with any law applicable to it, any provision of its constitutional
documents,
any order or judgment of any court or other agency of government applicable
to it or any of its assets or any contractual restriction binding on or
affecting it or any of its assets;
(d) Consents.
All
governmental and other consents that are required to have been obtained by
it
with respect to this Agreement have been obtained and are in full force
and
effect and all conditions of any such consents have been complied
with;
(e) Obligations
Binding.
Its
obligations under this Agreement constitute its legal, valid
and
binding obligations, enforceable in accordance with their respective terms
(subject
to applicable bankruptcy, reorganization, insolvency, moratorium or similar
laws affecting creditors' rights generally and subject, as to enforceability,
to
equitable
principles of general application (regardless of whether enforcement is
sought
in
a proceeding in equity or at law));
(f) Absence
of Certain Events.
No
event of default or potential event of default with respect
to it has occurred and is continuing and no such event or circumstance would
occur
as
a result of its entering into or performing its obligations under this
Agreement;
3
(g)
Absence
of Litigation.
There
is not pending or, to its knowledge, threatened against
it or any of its affiliates any action, suit or proceeding at law or in equity
or before any
court, tribunal, governmental body, agency or official or any arbitrator that
is
likely to affect the legality, validity or enforceability against it of this
Agreement or its ability to
perform its obligations under this Agreement; and
(h)
Other
Parties.
As of
the Novation Date, no other party has any interest or obligation
in or under the Charter Agreement.
3.
Miscellaneous.
3.1 Amendments.
No
amendment, modification or waiver in respect of the Novation Agreement
will be effective unless in writing (including a writing evidenced by a
facsimile transmission)
and executed by each of the parties or confirmed by an exchange of telexes
or
electronic
messages on an electronic messaging system.
3.2 Dispute
Resolution, Governing Law and Jurisdiction.
Any
dispute, action or proceeding arising
in connection with this Agreement or the performance hereof shall be governed
by
the relevant
dispute resolution, governing law and jurisdiction provisions of the Charter
Agreement to
which
this Agreement is annexed, which provisions are hereby incorporated herein
by
reference
and shall have the same force and effect as if fully set forth
herein.
3.3 Waiver
of Jury Trial.
The
parties waive, to the fullest extent permitted by applicable law, any
right
they may have to a trial by jury in respect of any suit, action or proceeding
relating to this
Agreement. The parties certify that no representative, agent or attorney of
either party has represented,
expressly or otherwise, that such other party would not, in the event of such
a
suit, action
or
proceeding, seek to enforce the foregoing waiver and acknowledge that they
have
been induced
to enter into this Agreement by, among other things, the mutual waivers and
certifications
in this Section 3.4.
3.4 Further
Assurances and Other Matters.
The
parties agree, upon the request of any other party,
at
any time and from time to time, promptly to execute and deliver all such further
documents,
promptly to take and forbear from all such action, and obtain all approvals,
consents, exemptions
or authorizations from such governmental agencies or authorities as may be
necessary
or reasonably appropriate in order to carry out the provisions of this
Agreement.
[Signature
Page Follows]
4
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and
year
first above written. This Agreement may be executed in one or more counterparts
and will
be
deemed effective when each of the parties shall have executed a copy
hereof.
| [TRANSFEROR] |
[CHARTERER]
|
||
| By: | By: | ||
|
Name:
Title:
|
Name:
Title:
|
||
| [TRANSFEREE] | |||
| By: | |||
|
Name:
Title:
|
|
5
