5,000,000 Shares Eagle Bulk Shipping Inc. Common Stock, par value $0.01 per Share UNDERWRITING AGREEMENT
EXECUTION
COPY
5,000,000
Shares
Common
Stock, par value $0.01 per Share
September
18, 2007
XXXXXXXXX
&
COMPANY,
INC.
000
Xxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx
00000
Ladies
and
Gentlemen:
Introductory. Eagle
Bulk Shipping Inc., a
Xxxxxxxx Islands corporation (the “Company”),
proposes to issue and sell to
Xxxxxxxxx & Company, Inc. (the “Underwriter”)
an aggregate of 5,000,000 shares of
its common stock, par value $0.01 per share (the “Shares”). The
5,000,000 Shares to be sold by the
Company are called the “Offered
Shares.”
The
Company has prepared and filed with the Securities and Exchange Commission
(the
“Commission”) a shelf registration statement on Form S-3
(File No. 333-139745), and has prepared a base prospectus (the
“Base Prospectus”) to be used in connection with the public
offering and sale of the Offered Shares. Such registration statement,
as amended,
including the financial statements, exhibits and schedules thereto, in the
form
in which it was declared effective by the Commission under the Securities Act
of
1933, as amended, and the rules and regulations promulgated thereunder
(collectively, the “Securities
Act”), including
all documents incorporated or deemed to be incorporated by reference therein
and
any information deemed to be a part thereof at the time of effectiveness
pursuant to Rule 430A, Rule 430B or Rule 430C under the Securities Act or
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (collectively, the “Exchange
Act”), is called
the “Registration
Statement.” Any registration
statement filed by the Company pursuant to Rule 462(b) under the Securities
Act
is called the “Rule 462(b) Registration Statement,” and from
and after the date and time of filing of the Rule 462(b) Registration Statement
the term “Registration Statement” shall include the Rule 462(b) Registration
Statement. The preliminary prospectus supplement, dated September 18,
2007, describing the Offered
Shares and the offering thereof, together with the Base Prospectus, is called
the “Preliminary
Prospectus,” and
the Preliminary Prospectus and any
other
preliminary
prospectus
supplement to the Base
Prospectus that describes the Offered Shares and the offering thereof and is
used prior to the filing
of
the Prospectus (as defined below), together with the Base Prospectus, is called
a “preliminary
prospectus.” As
used herein, the term
“Prospectus”
shall mean the final prospectus
supplement to the Base Prospectus that describes the Offered Shares and
the offering
thereof (the “Final
Prospectus
Supplement”),
together with the Base
Prospectus, in the form
first used by the Underwriters to confirm sales of the Offered
Shares or
in the form first made available to the
Underwriter by
the Company to meet
requests of purchasers pursuant to Rule 173 under the Securities Act. As
used herein,“Applicable
Time”
is 6:00 pm
(New York
time) on September
18,
2007. As
used herein,
“free writing prospectus” has the meaning set forth in Rule 405
under the Securities Act, and “Time of Sale Prospectus” means
the preliminary prospectus, as amended or supplemented immediately prior to
the
Applicable Time, together with the free writing prospectuses, if any, or any
other pricing information identified or included in Schedule A
hereto, and each “road show” (as defined in Rule 433 under the Securities Act),
if any, related to the offering of the Shares contemplated hereby that is a
“written communication” (as defined in Rule 405 under the Securities Act) (each
such road show, a “Road Show”). As used herein, the
terms “Registration Statement,” “Rule
462(b) Registration
Statement”,
“Preliminary
Prospectus”, “preliminary
prospectus”, “Base Prospectus”, “Time of Sale Prospectus” and
“Prospectus” shall include the documents incorporated and deemed to be
incorporated by reference therein. All references in this Agreement
to
amendments or supplements to the Registration Statement, the Rule 462(b)
Registration Statement, the Preliminary Prospectus, any preliminary prospectus,
the Base Prospectus, the Time of Sale Prospectus or the Prospectus shall be
deemed to mean and include the filing of any document under the Exchange Act
which is or is deemed to be incorporated by reference in the Registration
Statement, the Rule 462(b) Registration Statement, the Preliminary Prospectus,
any preliminary prospectus, the Base Prospectus, the Time of Sale Prospectus
or
the Prospectus, as the case may be. All
references in this Agreement to
(i) the
Registration Statement, the
462(b) Registration Statement, any Preliminary Prospectus, a preliminary
prospectus, the Base Prospectus or the Prospectus, or any amendments or
supplements to any of the foregoing, shall include any copy thereof filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System (“XXXXX”)
and (ii) the Prospectus shall be
deemed to include the “electronic
Prospectus”
provided for
use in connection with the offering of the Offered Shares as
contemplated by Section 3(n) of this Agreement. All references in this
Agreement to
financial statements and schedules and other information which are “contained,”
“included”
or
“stated”
in
the Registration Statement, the
Rule 462(b) Registration Statement, the Preliminary Prospectus, any preliminary
prospectus, the Base Prospectus, the Time of Sale Prospectus or the Prospectus
(and all other references of like import) shall be deemed to mean and include
all such financial statements and schedules and other information which is
or is
deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, the Rule 462(b)
Registration Statement, the Preliminary Prospectus, any preliminary prospectus,
the Base Prospectus, the Time of Sale Prospectus or the Prospectus, as the
case
may be, shall be deemed to mean and include the filing of any document under
the
Exchange Act which is or is deemed to be incorporated by reference in the
Registration Statement, the Rule 462(b) Registration Statement, the Preliminary
Prospectus, any preliminary prospectus, the Base Prospectus, the Time of Sale
Prospectus or the Prospectus, as the case may be.
The
Company hereby confirms its
agreements with the Underwriter as follows:
Section
1. Representations
and Warranties of the Company.The
Company hereby represents, warrants and covenants to the Underwriter, as of
the
date of this Agreement and as of the Closing Date (as hereinafter defined),
as
follows:
(a) Compliance
with Registration Requirements. The Registration Statement and
any Rule 462(b) Registration Statement have been declared effective by the
Commission under the Securities Act. The Company has complied to the
Commission’s satisfaction with all requests of the Commission for additional or
supplemental information. No stop order suspending the effectiveness
of the Registration Statement or any Rule 462(b) Registration Statement is
in effect and no proceedings for such purpose have been instituted or
are
2
pending
or, to the best knowledge of the Company, are contemplated or threatened by
the
Commission.
Each
preliminary prospectus and the
Prospectus when filed complied in all material respects with the Securities
Act
and, if filed by electronic transmission pursuant to XXXXX (except as may be
permitted by Regulation S-T under the Securities Act), was identical in
content to the copy thereof delivered to the Underwriter for use in connection
with the offer and sale of the Offered Shares. Each of the Registration
Statement, any Rule 462(b) Registration Statement and any post-effective
amendment thereto, at the time it became effective and at all subsequent times,
complied and will comply in all material respects with the Securities Act and
did not and will not contain any 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. As of the Applicable Time,
the Time of Sale Prospectus
(including any preliminary
prospectus wrapper) did
not, and at the time of each sale of the Offered Shares
and at the Closing Date (as
defined in Section 2),
the Time of Sale Prospectus, as then
amended or supplemented by the Company, if applicable, will not, contain any
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 under which
they were made, not misleading. The Prospectus (including
any Prospectus wrapper),
as amended or supplemented, as of its
date and at all subsequent times, did not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The representations and warranties
set forth in the three immediately preceding sentences do not apply to
statements in or omissions from the Registration Statement, any Rule 462(b)
Registration Statement, or any post-effective amendment thereto, or the
Prospectus or the Time of Sale Prospectus, or any amendments or supplements
thereto, made in reliance upon and in conformity with information relating
to
the Underwriter furnished to the Company in writing by the Underwriter expressly
for use therein. There
are no contracts or
other documents required to be described in the Time of Sale Prospectus or
the
Prospectus or to be filed as exhibits to the Registration Statement which have
not been described or filed as required.
The
Company is not an “ineligible issuer” in connection with the offering of the
Offered Shares pursuant to Rules 164, 405 and 433 under the Securities
Act. Any free writing prospectus that the Company is required to file
pursuant to Rule 433(d) under the Securities Act has been, or will be, filed
with the Commission in accordance with the requirements of the Securities
Act. Each free writing prospectus that the Company has filed, or is
required to file in connection with the offering of the Offered Shares, pursuant
to Rule 433(d) under the Securities Act or that was prepared by or behalf of
or
used or referred to by the Company complies or will comply in all material
respects with the requirements of Rule 433 under the Securities Act, including
timely filing with the Commission or retention where required and legending,
and
each such free writing prospectus, as of its issue date and at all subsequent
times through the completion of the public offer and sale of the Offered Shares
did not, does not and will not include any information that conflicted or
conflicts with the information contained in the Registration Statement, the
Prospectus or any preliminary prospectus, including any document incorporated
by
reference therein. Except for the free writing prospectuses, if any,
identified in Schedule A hereto, and electronic road shows, if any,
furnished to you before first use, the Company has not prepared, used or
referred to, and will not, without your prior consent, prepare, use or refer
to,
any free writing prospectus.
(b) Offering
Materials Furnished to Underwriter. The Company has
delivered to the Underwriter one complete manually signed copy of the
Registration Statement, each
3
amendment
thereto and any Rule 462(b) Registration Statement and of each consent and
certificate of experts filed as a part thereof, and copies of the Registration
Statement, each amendment thereto and any Rule 462(b) Registration Statement
(without exhibits) and preliminary prospectuses, the Time of Sale Prospectus,
the Base Prospectus, as amended or supplemented, and any free writing prospectus
reviewed and consented to by the Underwriter, in such quantities and at such
places as the Underwriter has reasonably requested.
(c) Distribution
of Offering Material By the Company. The Company has
not distributed and will not distribute, prior to the later of the completion
of
the Underwriter’s distribution of the Offered Shares, any offering material in
connection with the offering and sale of the Offered Shares other than a
preliminary prospectus, the Time of Sale Prospectus, the Prospectus, any free
writing prospectus reviewed and consented to by the Underwriter, or the
Registration Statement
(d) Capitalization
and Other Capital Stock Matters. As
of the date of this Agreement,
the Company has an authorized and outstanding capitalization as set forth in
the
section of the Registration Statement, the Time of Sale Prospectus and the
Prospectus entitled “Capitalization”; all of the issued and outstanding shares
of capital stock, including the Shares, of the Company have been duly authorized
and validly issued and are fully paid and non-assessable, have been issued
in
compliance with all federal and state securities laws and were not issued in
violation of any preemptive right, resale right, right of first refusal or
similar right; no further approval or authority of the stockholders or the
Board
of Directors of the Company are required for the issuance and sale of the
Offered Shares; and the Offered Shares are duly listed, and admitted and
authorized for trading, subject to official notice of issuance and evidence
of
satisfactory distribution, on the National Association of Securities Dealers
Automated Quotation National Market System
(“NASDAQ”).
(e) Incorporation
and Good Standing of the Company. The Company
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the Xxxxxxxx Islands, with full corporate power
and
authority to own, lease and operate its properties and conduct its business
as
described in the Registration Statement, the Time of Sale Prospectus and the
Prospectus to execute and deliver this Agreement and to issue, sell and deliver
the Shares as contemplated herein.
(f) Foreign
Corporation Qualifications of the Company. The
Company is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the failure
to
be so qualified and in good standing would not, individually or in the
aggregate, have a material adverse effect on the business, properties, financial
condition, results of operation or prospects of the Company and the Subsidiaries
(as hereinafter defined) taken as a whole (a “Material Adverse
Effect”).
(g) Subsidiaries
of the Company. The Company
has no subsidiaries (as defined under the Securities Act) other than the
Subsidiaries named in Schedule B hereto
(collectively, the “Subsidiaries”); the Company owns all of the
issued and outstanding capital stock of each of the Subsidiaries; other than
the
capital stock of the Subsidiaries, the Company does not own, directly or
indirectly, any shares of stock or any other equity or long-term debt securities
of any corporation or have any equity interest in any firm, partnership, joint
venture, association or other entity; complete and correct copies of all
articles of incorporation, bylaws, certificates of formation, limited liability
company agreements and other organizational
4
documents
of the Company and the Subsidiaries and all amendments thereto have been
delivered to you, and no changes therein will be made on or after the date
hereof and on or prior to the time of purchase or, if later, any additional
time
of purchase; each Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, with full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement, the Time of Sale Prospectus and the Prospectus; each Subsidiary
is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the failure
to
be so qualified and in good standing would not, individually or in the
aggregate, have a Material Adverse Effect; each Subsidiary is in compliance
in
all respects with the laws, orders, rules, regulations and directives issued
or
administered by such jurisdictions, except where the failure to be in compliance
would not, individually or in the aggregate, have a Material Adverse Effect;
all
of the outstanding shares of capital stock of each of the Subsidiaries have
been
duly authorized and validly issued, are fully paid and non-assessable, have
been
issued in compliance with all applicable securities laws, were not issued in
violation of any preemptive right, resale right, right of first refusal or
similar right and are owned by the Company subject to no security interest,
other encumbrance or adverse claims; and no options, warrants or other rights
to
purchase, agreements or other obligations to issue or other rights to convert
any obligation into shares of capital stock or ownership interests in the
Subsidiaries are outstanding.
(h) Authorization
of the Offered Shares. The Offered
Shares have been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and validly issued,
fully paid and non-assessable and free of statutory and contractual preemptive
rights, resale rights, rights of first refusal and similar rights; and the
Offered Shares, when issued and delivered against payment therefor as provided
herein, will be free of any restriction upon the voting or transfer thereof
pursuant to the Company’s articles of incorporation or bylaws or other governing
documents or any agreement or other instrument to which the Company or any
of
the Subsidiaries is a party or by which any of them or any of their respective
properties may be bound or affected.
(i) Description
of Capital Stock and Form of Stock Certificates of the Company. The capital
stock
of the Company, including the Offered Shares, conforms in all material respects
to the description thereof contained in the Registration Statement, the Time
of
Sale Prospectus and the Prospectus and the certificates for the Shares are
in
due and proper form and the holders of the Shares will not be subject to
personal liability by reason of being such holders.
(j) The
Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(k) Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals
Required. Neither
the Company nor any of
the Subsidiaries is in breach or violation of or in default under (nor has
any
event occurred which with notice, lapse of time or both would result in any
breach or violation of, constitute a default under or give the holder of any
indebtedness (or a person acting on such holder’s behalf) the right to require
the repurchase, redemption or repayment of all or a part of such indebtedness
under) (i) its respective articles of incorporation, bylaws, certificate of
formation, limited liability company agreement or other organizational
documents, or (ii) any indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any license, lease, contract
or
other
5
agreement
or instrument to which the Company or any of the Subsidiaries is a party or
by
which any of them or any of their respective properties may be bound or
affected, or (iii) any federal, state, local or foreign law, regulation or
rule,
or (iv) any rule or regulation of any self-regulatory organization or other
non-governmental regulatory authority (including without limitation the rules
and regulations of the NASDAQ), or (v) any decree, judgment or order applicable
to the Company or any of the Subsidiaries or any of their respective properties;
except, in each case, for such breaches, violations or defaults that would
not,
individually or in the aggregate, have a Material Adverse Effect.
The
execution, delivery and performance of this Agreement, the issuance and sale
of
the Offered Shares by the Company pursuant hereto and the consummation of the
transactions contemplated hereby will not conflict with, result in any breach
or
violation of or constitute a default under (nor constitute any event which
with
notice, lapse of time or both would result in any breach or violation of or
constitute a default under or give the holder of any indebtedness (or a person
acting on such holder’s behalf) the right to require the repurchase, redemption
or repayment of all or a part of such indebtedness under) (or result in the
creation or imposition of a lien, charge or encumbrance on any property or
assets of the Company or any Subsidiary pursuant to) (i) articles of
incorporation, bylaws, certificate of formation, limited liability company
agreement or other organizational document of the Company or any of the
Subsidiaries, (ii) any indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any license, lease, contract
or
other agreement or instrument to which the Company or any of the Subsidiaries
is
a party or by which any of them or any of their respective properties may be
bound or affected, (iii) any federal, state, local or foreign law, regulation
or
rule, (iv) any rule or regulation of any self-regulatory organization or other
non-governmental regulatory authority (including, without limitation, the rules
and regulations of the NASDAQ, or (v) any decree, judgment or order applicable
to the Company or any of the Subsidiaries or any of their respective properties,
except, in the case of clause (ii), for such breaches, violations or defaults
that would not, individually or in the aggregate, have a Material Adverse
Effect.
(l) All
Necessary Permits, etc. No
approval,
authorization,
consent or order of or filing with any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or agency, or
of
or with any self-regulatory organization or other non-governmental regulatory
authority (including, without limitation, the NASDAQ), or approval of the
stockholders of the Company, is required in connection with the issuance and
sale of the Offered Shares to be sold by the Company pursuant hereto or the
consummation by the Company of the transactions contemplated hereby other than
registration of the Offered Shares under the Securities Act, which has been
effected, any other approvals, authorizations, consents, orders or filing that
have been obtained or made and are in full force and effect and any necessary
qualification under the securities or blue sky laws of the various jurisdictions
in which the Shares are being offered by the Underwriter or under the rules
and
regulations of the National Association of Securities Dealers, Inc. (the
“NASD”).
(m) No
Applicable Registration or Other Similar Rights. Except
as
set forth in the
Registration Statement, the Time of Sale Prospectus and the Prospectus
(i) no person has the right, contractual or otherwise, to cause the Company
to issue or sell to it any Shares or shares of any other capital stock or other
equity interests of the Company, (ii) no person has any preemptive rights,
resale rights, rights of first refusal or other rights to purchase any Shares
or
shares of any other capital stock of or other equity interests in the Company,
and (iii) no person has the right to act as an underwriter or as a
financial advisor to the Company in connection with the offer and sale of the
Shares, in the case of each of the foregoing
6
clauses
(i), (ii) and (iii), whether as a result of the filing or effectiveness of
the
Registration Statement or the sale of the Shares as contemplated thereby or
otherwise; no person has the right, contractual or otherwise, to cause the
Company to register under the Securities Act any Shares or shares of any other
capital stock of or other equity interests in the Company, or to include any
such shares or interests in the Registration Statement or the offering
contemplated thereby, whether as a result of the filing or effectiveness of
the
Registration Statement or the sale of the Shares as contemplated thereby or
otherwise.
(n) Licenses,
Authorizations, Consents and Approvals. Each
of
the Company and the
Subsidiaries has all necessary licenses, authorizations, consents and approvals
and has made all necessary filings required under any federal, state, local
or
foreign law, regulation or rule, and has obtained all necessary licenses,
authorizations, consents and approvals from other persons, in order to conduct
its respective business, except where the failure to have such licenses,
authorizations, consents and approvals or to make such filings would not,
individually or in the aggregate, have a Material Adverse Effect; neither the
Company nor any of the Subsidiaries is in violation of, or in default under,
or
has received notice of any proceedings relating to revocation or modification
of, any such license, authorization, consent or approval or any federal, state,
local or foreign law, regulation or rule or any decree, order or judgment
applicable to the Company or any of the Subsidiaries, except where such
violation, default, revocation or modification would not, individually or in
the
aggregate, have a Material Adverse Effect.
(o) Required
Descriptions and Exhibits. All
legal or governmental
proceedings, affiliate transactions, off-balance sheet transactions (including,
without limitation, transactions related to, and the existence of, “variable
interest entities” within the meaning of Financial Accounting Standards Board
Interpretation No. 46), contracts, licenses, agreements, properties, leases
or
documents of a character required to be described in the Registration Statement,
the Time of Sale Prospectus or the Prospectus or to be filed as an exhibit
to
the Registration Statement have been so described or filed as
required.
(p) No
Material Actions or Proceedings. There
are
no actions, suits,
claims, investigations or proceedings pending or threatened or contemplated
to
which the Company or any of the Subsidiaries or any of their respective
directors or officers is or would be a party or of which any of their respective
properties is or would be subject at law or in equity, before or by any federal,
state, local or foreign governmental or regulatory commission, board, body,
authority or agency, or before or by any self-regulatory organization or other
non-governmental regulatory authority (including, without limitation, the rules
and regulations of the NASDAQ), except any such action, suit, claim,
investigation or proceeding which would not result in a judgment, decree or
order having, individually or in the aggregate, a Material Adverse Effect or
prevent consummation of the transactions contemplated hereby.
(q) Independent
Accountants. Ernst
&
Young LLP, whose audit report on the consolidated financial statements of the
Company and the Subsidiaries is included or incorporated by reference in the
Registration Statement, the Time of Sale Prospectus and the Prospectus, are
independent registered public accountants as required by the Securities Act
and
by the rules of the Public Company Accounting Oversight Board.
(r) Preparation
of the Financial Statements. The
audited
and unaudited
financial statements included or incorporated by reference in the Registration
Statement, the Time of Sale Prospectus and the Prospectus, together with the
related notes and schedules, present fairly the consolidated financial position
of the Company and the Subsidiaries as of the dates
7
indicated
and the consolidated results of operations and cash flows of the Company and
the
Subsidiaries for the periods specified and have been prepared in compliance
with
the requirements of the Securities Act and in conformity with generally accepted
accounting principles applied on a consistent basis during the periods involved;
the other financial and statistical data set forth in the Registration
Statement, the Time of Sale Information, the Prospectus and free writing
prospectuses, if any, are accurately and fairly presented and prepared on a
basis consistent with the financial statements and books and records of the
Company; there are no financial statements (historical or pro forma) that are
required to be included in the Registration Statement, the Time of Sale
Information or the Prospectus (including, without limitation, as required by
Rules 3-12 or 3-05 or Article 11 of Regulation S-X under the Securities Act)
that are not included or incorporated by reference as required; and the Company
and the Subsidiaries do not have any material liabilities or obligations, direct
or contingent (including any off-balance sheet obligations), not disclosed
in
the Registration Statement, the Time of Sale Information and the
Prospectus.
(s) No
Material Adverse Change. Subsequent
to
the respective
dates as of which information is given in the Registration Statement, the Time
of Sale Prospectus and the Prospectus, there has not been (i) any material
adverse change, or any development involving a prospective material adverse
change, in the business, properties, management, financial condition or results
of operations of the Company and the Subsidiaries taken as a whole (any such change is called a
“Material Adverse
Change”),
(ii) any transaction which is material to the Company and the Subsidiaries
taken
as a whole, (iii) any obligation, direct or contingent (including any
off-balance sheet obligations), incurred by the Company or the Subsidiaries,
which is material to the Company and the Subsidiaries taken as a whole, (iv)
any
change in the capital stock or outstanding indebtedness of the Company or the
Subsidiaries or (v) any dividend or distribution of any kind declared, paid
or
made on the capital stock of the Company.
(t) Parties
to Lock-Up Agreements. The
Company
has obtained for the
benefit of the Underwriter the agreement (a “Lock-Up
Agreement”), in the form set forth as Exhibit A-1 hereto, of
each of its directors and officers named in Exhibit A-2
hereto.
(u) Company
Not an “Investment Company”. The
Company
is not and, after
giving effect to the offering and sale of the Offered Shares, will not 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”) or a “passive foreign investment
company” or a “controlled foreign corporation” as such terms are defined in the
Internal Revenue Code of 1986, as amended.
(v) Title
to Properties. The
Company
and each of the
Subsidiaries has good and marketable title to all property (real and personal)
described the Registration Statement, the Time of Sale Prospectus and the
Prospectus as being owned by each of them, free and clear of all liens, claims,
security interests or other encumbrances; and all the property described in
the
Registration Statement, the Time of Sale Prospectus and the Prospectus as being
held under lease by the Company or a Subsidiary is held thereby under valid,
subsisting and enforceable leases.
(w) Labor
Practices; ERISA Compliance. Neither
the Company nor any of
the Subsidiaries is engaged in any unfair labor practice (as defined in the
National Labor Relations Act); except for matters which would not, individually
or in the aggregate, have a Material Adverse Effect, (i) there is
(A) no unfair labor practice complaint pending or, to the
8
Company’s
knowledge after due inquiry, threatened against the Company or any of the
Subsidiaries before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under collective bargaining agreements
is pending or threatened, (B) no strike, labor dispute, slowdown or
stoppage pending or, to the Company’s knowledge, threatened against the Company
or any of the Subsidiaries and (C) no union representation dispute
currently existing concerning the employees of the Company or any of the
Subsidiaries, and (ii) to the Company’s knowledge, there has been no
violation of any federal, state, local or foreign law relating to discrimination
in the hiring, promotion or pay of employees, any applicable wage or hour laws
or any provision of the Employee Retirement Income Security Act of 1974 or
the
rules and regulations promulgated thereunder concerning the employees of the
Company or any of the Subsidiaries.
(x) Compliance
with Environmental Laws.
The
Company
and
the Subsidiaries and their properties, assets and operations are in compliance
with, and hold all permits, authorizations and approvals required under,
Environmental Laws (as defined below), except to the extent that failure to
so
comply or to hold such permits, authorizations or approvals would not,
individually or in the aggregate, have a Material Adverse Effect; except as
described in the Registration Statement, the Time of Sale Prospectus and the
Prospectus, there are no past or present events, conditions, circumstances,
activities, practices, actions, omissions or plans that could reasonably be
expected to give rise to any material costs or liabilities to the Company or
the
Subsidiaries under, or to interfere with or prevent compliance by the Company
or
the Subsidiaries with, Environmental Laws; except as would not, individually
or
in the aggregate, have a Material Adverse Effect, neither the Company nor any
of
the Subsidiaries (i) is the subject of any investigation, (ii) has received
any
notice or claim, (iii) is a party to or affected by any pending or threatened
action, suit or proceeding, (iv) is bound by any judgment, decree or order
or
(v) has entered into any agreement, in each case relating to any alleged
violation of any Environmental Law or any actual or alleged release or
threatened release or cleanup at any location of any Hazardous Materials (as
defined below) (as used herein, “Environmental Law” means any
federal, state, local or foreign law, statute, ordinance, rule, regulation,
order, decree, judgment, injunction, permit, license, authorization or other
binding requirement or common law (including any applicable regulations and
standards adopted by the International Maritime Organization) relating to
health, safety or the protection, cleanup or restoration of the environment
or
natural resources, including those relating to the distribution, processing,
generation, treatment, storage, disposal, transportation, other handling or
release or threatened release of Hazardous Materials, and “Hazardous
Materials” means any material (including, without limitation,
pollutants, contaminants, hazardous or toxic substances or wastes) that is
regulated by or may give rise to liability under any Environmental
Law).
(y) Periodic
Review of Costs of Environmental Compliance. In
the
ordinary course of its
business, the Company and each of the Subsidiaries conducts a periodic review
of
the effect of the Environmental Laws on its business, operations and properties,
in the course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for cleanup, closure of properties or compliance with
the
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third
parties).
(z) Tax
Law Compliance. All
tax
returns required to be
filed by the Company and each of the Subsidiaries have been filed, and all
taxes
and other assessments of a similar nature (whether imposed directly or through
withholding) including any interest, additions to tax or
9
penalties
applicable thereto due or claimed to be due from such entities have been paid,
other than those being contested in good faith and for which adequate reserves
have been provided.
(aa) Insurance. The
Company
and each of the
Subsidiaries maintains insurance or a membership in a mutual protection and
indemnity association covering its properties, operations, personnel and
businesses as the Company deems adequate; such insurance or membership insures
against such losses and risks to an extent which the Company deems is adequate
in accordance with customary industry practice; all such insurance is fully
in
force on the date hereof and will be fully in force at the time of purchase
and
any additional time of purchase; there are no material claims by the Company
or
any Subsidiary under any insurance policy or instrument as to which any
insurance company or mutual protection and indemnity association is denying
liability or defending under a reservation of rights clause; neither the Company
nor any of the Subsidiaries is currently required to make any payment, or is
aware of any facts that would require the Company or any Subsidiary to make
any
payment, in respect of a call by, or a contribution to, any mutual protection
and indemnity association; and neither the Company nor any Subsidiary has reason
to believe that it will not be able to renew any such insurance or membership
in
a mutual protection and indemnity association as and when such insurance or
membership expires or is terminated.
(bb) No
Loss of Vessels, etc. Since
the
date of the last
audited financial statements included in the Registration Statement, the Time
of
Sale Prospectus and the Prospectus, (i) there has not been a material loss
(whether actual or constructive or partial or total) of or to any of the vessels
that are described in the Registration Statement, the Time of Sale Prospectus
and the Prospectus as owned or to be acquired by the Company or any Subsidiary,
(ii) no such vessel has been arrested or requisitioned for title or hire and
(iii) neither the Company nor any of the Subsidiaries has sustained any material
loss or interference with its respective business from fire, explosion, flood
or
other calamity or from any labor dispute or court or governmental action, order
or decree.
(cc) No
Termination of Material Contracts or Agreements. The
Company
has not sent or
received any communication regarding the termination, amendment, modification
or
waiver of, or intent not to renew, or intent not to consummate any transaction
contemplated by, any of the material contracts or agreements referred to or
described in the Time of Sale Prospectus and the Prospectus, or referred to
or
described in, or filed as an exhibit to, the Registration Statement, and no
such
termination, amendment, modification, waiver, non-renewal or intention not
to
consummate has been threatened by the Company or, to the Company’s knowledge
after due inquiry, any other party to any such material contract or
agreement.
(dd) Company’s
Accounting System. The
Company
and each of the
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles
and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(ee) Disclosure
Controls and Procedures; Deficiencies in or Changes to Internal Control Over
Financial Reporting. The
Company has established and
maintains
10
and
evaluates “disclosure controls and procedures” (as such term is defined in Rule
13a-15 and 15d-15 under the Exchange Act) and “internal control over financial
reporting” (as such term is defined in Rule 13a-15 and 15d-15 under the Exchange
Act); such disclosure controls and procedures are designed to ensure that
material information relating to the Company, including its consolidated
subsidiaries, is made known to the Company’s Chief Executive Officer and Chief
Financial Officer by others within those entities, and such disclosure controls
and procedures are effective to perform the functions for which they were
established; the Company’s auditors and the Audit Committee of the Board of
Directors of the Company have been advised of: (i) any significant deficiencies
in the design or operation of internal controls which could adversely affect
the
Company’s ability to record, process, summarize, and report financial data; and
(ii) any fraud, whether or not material, that involves management or other
employees who have a role in the Company’s internal controls; any material
weaknesses in internal controls have been identified for the Company’s auditors;
since the date of the most recent evaluation of such disclosure controls and
procedures, there have been no significant changes in internal controls or
in
other factors that could significantly affect internal controls, including
any
corrective actions with regard to significant deficiencies and material
weaknesses; and the Company has taken all necessary actions to ensure that,
upon
effectiveness of the Registration Statement, the Company and the Subsidiaries
and their respective officers and directors, in their capacities as such, will
be in compliance in all material respects with the provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated
thereunder.
(ff) No
Outstanding Loans or Other Extensions of Credit. The
Company
has not, directly or
indirectly, including through any of the Subsidiaries extended credit, arranged
to extend credit, or renewed any extension of credit, in the form of a personal
loan, to or for any director or executive officer of the Company, or to or
for
any family member or affiliate of any director or executive officer of the
Company.
(gg) Forward-Looking
Statements. Each
“forward-looking
statement”
(within the meaning of Section 27A of the Act or Section 21E of the Exchange
Act) contained or incorporated by reference in the Registration Statement,
the
Time of Sale Prospectus and the Prospectus has been made or reaffirmed with
a
reasonable basis and has been disclosed in good faith.
(hh) Statistical
and Market-Related Data. Any
statistical
and
market-related data included or incorporated by reference in the Registration
Statement, the Time of Sale Prospectus and the Prospectus are based on or
derived from sources that the Company believes to be reliable and accurate,
and
the Company has obtained the written consent to the use of such data from such
sources to the extent required.
(ii) Foreign
Corrupt Practices Act. Neither
the
Company nor any of
the Subsidiaries nor, to the knowledge of the Company, any director, officer,
agent, employee or affiliate of the Company or any of the Subsidiaries is aware
of or has taken any action, directly or indirectly, that would result in a
violation by such persons of the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder (the “Foreign Corrupt
Practices Act”); and the Company, the Subsidiaries and, to the
knowledge of the Company, its affiliates have conducted their businesses in
compliance with the Foreign Corrupt Practices Act and have instituted and
maintain policies and procedures designed to ensure, and which are reasonably
expected to continue to ensure, continued compliance therewith.
11
(jj) Money
Laundering Laws. The
operations
of the Company and
the Subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes and the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any
governmental agency to which such operations are subject (collectively, the
“Money Laundering Laws”); and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
or non-governmental authority involving the Company or any of the Subsidiaries
with respect to the Money Laundering Laws is pending or, to the best knowledge
of the Company, threatened.
(kk) OFAC. Neither
the
Company nor any of
the Subsidiaries nor, to the knowledge of the Company, any director, officer,
agent, employee or affiliate of the Company or any of the Subsidiaries is
currently subject to any United States sanctions administered by the Office
of
Foreign Assets Control of the United States Treasury Department
(“OFAC”); and the Company will not directly or indirectly use
the proceeds of the offering, or lend, contribute or otherwise make available
such proceeds to any Subsidiary, joint venture partner or other person or
entity, for the purpose of financing the activities of any person currently
subject to any United States sanctions administered by OFAC.
(ll) Dividend
Restrictions. Except
as
described in the
Registration Statement, the Time of Sale Prospectus and the Prospectus, no
Subsidiary is currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such
Subsidiary’s capital stock, from repaying to the Company any loans or advances
to such Subsidiary from the Company or from transferring any of such
Subsidiary’s property or assets to the Company or any other Subsidiary of the
Company, except as described in the Registration Statement, the Time of Sale
Prospectus and the Prospectus; all dividends and other distributions declared
and payable on the Shares of the Company and on the capital stock of each
Subsidiary may under the current laws and regulations of the Xxxxxxxx Islands
be
paid in United States dollars and freely transferred out of the Xxxxxxxx
Islands; and all such dividends and other distributions are not subject to
withholding or other taxes under the current laws and regulations of the
Xxxxxxxx Islands and are otherwise free and clear of any withholding, stamp,
transfer, excise or other tax and may be declared and paid without the necessity
of obtaining any consents, approvals, authorizations, orders, licenses,
registrations, clearances and qualifications of or with any court or
governmental agency or body or any stock exchange authorities in the Xxxxxxxx
Islands.
(mm) No
Conversion or Other Rights. The
issuance
and sale of the
Offered Shares to be sold by the Company pursuant hereto will not cause any
holder of any shares of capital stock, securities convertible into or
exchangeable or exercisable for capital stock or options, warrants or other
rights to purchase capital stock or any other securities of the Company to
have
any right to acquire any shares of preferred stock of the Company.
(nn) Compliance
with NASDAQ Rules. The
Company
is in compliance with
the Marketplace Rules of the NASDAQ, including, without limitation, the
requirements for initial and continued designation of the Shares as a NASDAQ
security.
(oo) Brokers. Except
pursuant
to this
Agreement, neither the Company nor any of the Subsidiaries has incurred any
liability for any finder’s or broker’s fee or agent’s commission in connection
with the execution and delivery of this Agreement or the consummation of
the
12
transactions
contemplated hereby or by the Registration Statement, the Time of Sale
Prospectus and the Prospectus.
(pp) No
Price Stabilization or Manipulation. Neither
the
Company nor any of
the Subsidiaries nor any of their respective directors, officers or affiliates
has taken, directly or indirectly, any action designed, or which has constituted
or might reasonably be expected to cause or result in, under the Exchange Act
or
otherwise, the stabilization or manipulation of the price of any security of
the
Company to facilitate the sale or resale of the Offered Shares.
(qq) NASD
Matters.
To
the
Company’s knowledge, there are no affiliations or associations between (i) any
member of the NASD and (ii) the Company or any of the Company’s officers,
directors or 5% or greater securityholders or any beneficial owner of the
Company’s unregistered equity securities that were acquired at any time on or
after the 180th day immediately preceding the date the Registration Statement
was initially filed with the Commission, except as set forth in the Registration
Statement, the Time of Sale Prospectus and the Prospectus.
(rr) No
Stamp Duty or Taxes. No
stamp
duty, stock exchange
tax, value-added tax, withholding tax or any other similar duty or tax is
payable in the United States, the Xxxxxxxx Islands, or any other jurisdiction
in
which either the Company or any of its Subsidiaries is engaged in business
for
tax purposes, (including, in each case, any political subdivision thereof or
any
authority thereof having power to tax), in connection with the execution,
delivery or performance of this Agreement by the Company or the issuance, sale
or delivery of the Shares by the Company to the Underwriter or the initial
resales of the Shares by the Underwriter in the manner contemplated by this
Agreement, the Registration Statement, the Time of Sale Prospectus and the
Prospectus.
Any
certificate signed by any officer of the Company or any of its subsidiaries
and
delivered to the Underwriter or to counsel for the Underwriter in accordance
with this Agreement shall be deemed a representation and warranty by the Company
to the Underwriter as to the matters covered thereby.
The
Company acknowledges that the
Underwriter and, for purposes of the opinions to be delivered pursuant to
Section 6 hereof, counsel to the Company and counsel to the Underwriter, will
rely upon the accuracy and truthfulness of the foregoing representations and
hereby consents to such reliance.
Section
2. Purchase,
Sale and Delivery of the Offered Shares.
(a) The
Offered Shares. Upon the terms herein set forth, the
Company agrees to issue and sell to the Underwriter an aggregate of 5,000,000
Offered Shares. On the basis of the representations, warranties and
agreements herein contained, and upon the terms but subject to the conditions
herein set forth, the Underwriter agrees to purchase from the Company all of
the
Offered Shares. The purchase price to be paid by the Underwriter to the Company
for the Offered Shares shall be $25.40 per share.
(b) The
Closing Date. Delivery of the Offered Shares to be
purchased by the Underwriter and payment therefor shall be made at the offices
of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (or such other place as may be agreed to by the Company and the
Underwriter) at 9:00 a.m. New York time, on September 21, 2007 or such other
time and date not later than 1:30 p.m. New York time, on October
5,
13
2007
as the Underwriter shall designate by notice to the Company (the time and date
of such closing are called the “Closing Date”). The
Company hereby acknowledges that circumstances under which the Underwriter
may
provide notice to postpone the Closing Date as originally scheduled include,
but
are in no way limited to, any determination by the Company or the Underwriter
to
recirculate to the public copies of an amended or supplemented
Prospectus.
(c) Public
Offering of the Offered Shares. The Underwriter hereby
advises the Company that it intends to offer for sale to the public, initially
on the terms set forth in the Time of Sale Prospectus and the Prospectus, the
Offered Shares as soon after this Agreement has been executed as the
Underwriter, in its sole judgment, has determined is advisable and
practicable.
(d) Payment
for the Offered Shares. Payment for the Offered Shares
shall be made at the Closing Date by wire transfer of immediately available
funds to the order of the Company.
(e) Delivery
of the Offered Shares. The Company shall deliver, or
cause to be delivered, to the Underwriter, through the facilities of The
Depository Trust Company (“DTC”), the Offered Shares at the
Closing Date, against the irrevocable release of a wire transfer of immediately
available funds for the amount of the purchase price therefor. Electronic
transfer of the Offered Shares shall be made to the Underwriter at the time
of
purchase in such names and denominations as the Underwriter shall have requested
at least one full business day prior to the Closing Date. Time shall
be of the essence, and delivery at the time and place specified in this
Agreement is a further condition to the obligations of the
Underwriter.
Section
3. Additional
Covenants of the Company.
The
Company further covenants and agrees
with the Underwriter as follows:
(a) Delivery
of Registration Statement, Time of Sale Prospectus and
Prospectus. The Company shall furnish to you, without charge,
one signed copy of the Registration Statement, any amendments thereto and any
Rule 462(b) Registration Statement (including exhibits thereto) and shall
furnish to you in New York City, without charge, prior to 10:00 a.m. New York
City time on the business day next succeeding the date of this Agreement and
during the period mentioned in Section 3(e) or 3(f) below, as many copies of
the
Time of Sale Prospectus, the Prospectus and any supplements and amendments
thereto or to the Registration Statement as you may reasonably
request.
(b) Underwriter’s
Review of Proposed Amendments and Supplements. Prior to amending or
supplementing the Registration Statement (including any registration statement
filed under Rule 462(b) under the Securities Act), any preliminary
prospectus, the Time of Sale Prospectus or the Prospectus (including any
amendment or supplement through incorporation by reference of any report filed
under the Exchange Act), the Company shall furnish to the Underwriter for
review, a reasonable amount of time prior to the proposed time of filing or
use
thereof, a copy of each such proposed amendment or supplement, and the Company
shall not file or use any such proposed amendment or supplement without the
Underwriter’s consent, and shall file with the Commission within the applicable
period specified in Rule 424(b) under the Securities Act any prospectus required
to be filed pursuant to such Rule.
14
(c) Free
Writing Prospectuses. The Company shall furnish to the
Underwriter for review, a reasonable amount of time prior to the proposed time
of filing or use thereof, a copy of each proposed free writing prospectus or
any
amendment or supplement thereto to be prepared by or on behalf of, used by,
or
referred to by the Company and the Company shall not file, use or refer to
any
proposed free writing prospectus or any amendment or supplement thereto without
the Underwriter’s consent. The Company shall furnish to the
Underwriter, without charge, as many copies of any free writing prospectus
prepared by or on behalf of, or used by the Company, as the Underwriter may
reasonably request. If at any time when a prospectus is required by
the Securities Act (including, without limitation, pursuant to Rule 173(d))
to be delivered in connection with sales of the Offered Shares (but in any
event
if at any time through and including the Closing Date) there occurred or occurs
an event or development as a result of which any free writing prospectus
prepared by or on behalf of, used by, or referred to by the Company conflicted
or would conflict with the information contained in the Registration Statement
or included or would include an untrue statement of a material fact or omitted
or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances prevailing at that subsequent time,
not misleading, the Company shall promptly amend or supplement such free writing
prospectus to eliminate or correct such conflict or so that the statements
in
such free writing prospectus as so amended or supplemented will not include
an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
prevailing at such subsequent time, not misleading, as the case may be;
provided, however, that prior to amending or supplementing any such free writing
prospectus, the Company shall furnish to the Underwriter for review, a
reasonable amount of time prior to the proposed time of filing or use thereof,
a
copy of such proposed amended or supplemented free writing prospectus and the
Company shall not file, use or refer to any such amended or supplemented free
writing prospectus without the Underwriter’s consent.
(d) Filing
of Underwriter Free Writing Prospectuses. The Company shall not
to take any action that would result in the Underwriter or the Company being
required to file with the Commission pursuant to Rule 433(d) under the
Securities Act a free writing prospectus prepared by or on behalf of the
Underwriter that the Underwriter otherwise would not have been required to
file
thereunder.
(e) Amendments
and Supplements to Time of Sale Prospectus. If the Time
of Sale Prospectus is being used to solicit offers to buy the Offered Shares
at
a time when the Prospectus is not yet available to prospective purchasers and
any event shall occur or condition exist as a result of which it is necessary
to
amend or supplement the Time of Sale Prospectus so that the Time of Sale
Prospectus does not include an untrue statement of a material fact or omit
to
state a material fact necessary in order to make the statements therein, in
the
light of the circumstances when delivered to a prospective purchaser, not
misleading, or if any event shall occur or condition exist as a result of which
the Time of Sale Prospectus conflicts with the information contained in the
Registration Statement, or if it is necessary to amend or supplement the Time
of
Sale Prospectus to comply with applicable law, including the Securities Act,
the
Company shall (subject to Sections 3(b) and 3(c)) forthwith prepare, file with
the Commission and furnish, at its own expense, to the Underwriter and to any
dealer upon request, either amendments or supplements to the Time of Sale
Prospectus so that the statements in the Time of Sale Prospectus as so amended
or supplemented will not include an untrue statement of a material fact or
omit
to state a material fact necessary in order to make the statements therein,
in
the light of the circumstances when delivered to a prospective purchaser, not
misleading or so that the Time of
15
Sale
Prospectus, as amended or supplemented, will no longer conflict with the
Registration Statement, or so that the Time of Sale Prospectus, as amended
or
supplemented, will comply with applicable law including the Securities
Act.
(f) Securities
Act Compliance. After the date of this Agreement,
the Company shall promptly advise the Underwriter in writing (i) of the receipt
of any comments of, or requests for additional or supplemental information
from,
the Commission, (ii) of the time and date of any filing of any post-effective
amendment to the Registration Statement, any Rule 462(b) Registration Statement
or any amendment or supplement to any preliminary prospectus, the Time of Sale
Prospectus, any free writing prospectus or the Prospectus, (iii) of the time
and
date that any post-effective amendment to the Registration Statement or any
Rule
462(b) Registration Statement becomes effective and (iv) of the issuance by
the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto, any Rule 462(b) Registration
Statement or any amendment or supplement to any Preliminary Prospectus, the
Time
of Sale Prospectus, any free writing prospectus or the Prospectus or of any
order preventing or suspending the use of any preliminary prospectus, the Time
of Sale Prospectus, any free writing prospectus or the Prospectus, or of any
proceedings to remove, suspend or terminate from listing or quotation the Shares
from any securities exchange or automated quotation system upon which they
are
listed for trading or included or designated for quotation, or of the
threatening or initiation of any proceedings for any of such
purposes. If the Commission shall enter any such stop order at any
time, the Company will use its best efforts to obtain the lifting of such order
at the earliest possible moment. Additionally, the Company agrees
that it shall comply with the provisions of Rule 424(b), Rule 433 and Rule
430A,
as applicable, under the Securities Act and will use its reasonable efforts
to
confirm that any filings made by the Company under such Rule 424(b) or Rule
433
were received in a timely manner by the Commission.
(g) Amendments
and Supplements to the Prospectus and Other Securities Act Matters.
If any event shall occur or condition exist as a result of which
it is
necessary to amend or supplement the Prospectus so that the Prospectus does
not
include an untrue statement of a material fact or omit to state a material
fact
necessary in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if it is otherwise necessary to amend or supplement the Prospectus to comply
with applicable law, including the Securities Act, the Company agrees (subject
to Section 3(b) and 3(c)) to promptly prepare, file with the Commission and
furnish at its own expense to the Underwriter and to dealers, amendments or
supplements to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not include an untrue statement of a material
fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances when the Prospectus is delivered
to a
purchaser, be misleading or so that the Prospectus, as amended or supplemented,
will comply with applicable law including the Securities Act. Neither
the Underwriter’s consent to, or delivery of, any such amendment or supplement
shall constitute a waiver of any of the Company’s obligations under Sections
3(b) or (c).
(h) Blue
Sky Compliance. The Company shall cooperate with the
Underwriter and counsel for the Underwriter to qualify or register the Offered
Shares for sale under (or obtain exemptions from the application of) the state
securities or blue sky laws or Canadian provincial securities laws of those
jurisdictions designated by the Underwriter, shall comply with such laws and
shall continue such qualifications, registrations and exemptions in effect
so
long as required for the distribution of the Offered Shares. The
Company shall not be required to qualify as a foreign corporation or to take
any
action that would subject it to general service of process in any such
jurisdiction where it is not presently qualified. The
16
Company
will advise the Underwriter promptly of the suspension of the qualification
or
registration of (or any such exemption relating to) the Offered Shares for
offering, sale or trading in any jurisdiction or any initiation or threat of
any
proceeding for any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, the Company shall
use
its best efforts to obtain the withdrawal thereof at the earliest possible
moment.
(i) Use
of Proceeds. The Company shall apply the net proceeds
from the sale of the Offered Shares sold by it in the manner described under
the
caption “Use of Proceeds” in each applicable Prospectus.
(j) Transfer
Agent. The Company shall maintain a transfer agent and,
if necessary under the jurisdiction of incorporation of the Company, a registrar
for the Shares.
(k) Earnings Statements. The
Company shall (i) as soon as practicable, but in any event no later than twelve
months after the date of this Agreement, make generally available to its
security holders and to the Underwriter an earnings statement (which need not
be
audited) covering a period of at least twelve months beginning with the first
fiscal quarter of the Company occurring after the date of this Agreement which
shall satisfy the provisions of Section 11(a) of the Securities Act and the
rules and regulations of the Commission thereunder; (ii) to furnish to its
shareholders as soon as practicable after the end of each fiscal year an annual
report (including a consolidated balance sheet and statements of income,
shareholders’ equity and cash flow of the Company and the Subsidiaries for such
fiscal year, accompanied by a copy of the certificate or report thereon of
nationally recognized independent certified public accountants); and (iii)
to
furnish to you as early as practicable prior to the time of purchase and any
additional time of purchase, as the case may be, but not later than two business
days prior thereto, a copy of the latest available unaudited interim and monthly
consolidated financial statements, if any, of the Company and the Subsidiaries
which have been read by the Company’s independent registered public accountants,
as stated in their letter to be furnished pursuant to Section 6(c)
hereof.
(l) Exchange
Act Compliance. The
Company
shall file all
documents required to be filed with the Commission pursuant to Section 13,
14 or
15 of the Exchange Act in the manner and within the time periods required by
the
Exchange Act.
(m) Listing. The
Company will use its best efforts to effect and maintain the inclusion and
quotation of the Offered Shares on the NASDAQ and to maintain the listing of
the
Shares on the NASDAQ.
(n) Company
to Provide Copy of the Prospectus in Form That May be Downloaded from the
Internet. The Company shall cause to be prepared and
delivered, at its expense, within one business day from the effective date
of
this Agreement, to the Underwriter an “electronic Prospectus”
to be used by the Underwriter in connection with the offering
and sale of the
Offered Shares. As used herein, the term “electronic
Prospectus” means a form of Time of Sale Prospectus, and any amendment
or supplement thereto, that meets each of the following conditions: (i) it
shall
be encoded in an electronic format, satisfactory to the Underwriter, that may
be
transmitted electronically by the Underwriter to offerees and purchasers of
the
Offered Shares; (ii) it shall disclose the same information as the paper
Time of Sale Prospectus, except to the extent that graphic and image material
cannot be disseminated electronically, in which case such graphic and image
material shall be replaced in the electronic Prospectus with a fair and accurate
narrative description or tabular representation
17
of
such material, as appropriate; and (iii) it shall be in or convertible into
a paper format or an electronic format, satisfactory to the Underwriter, that
will allow investors to store and have continuously ready access to the Time
of
Sale Prospectus at any future time, without charge to investors (other than
any
fee charged for subscription to the Internet as a whole and for on-line
time). The Company hereby confirms that it has included or will
include in the Prospectus filed pursuant to XXXXX or otherwise with the
Commission and in the Registration Statement at the time it was declared
effective an undertaking that, upon receipt of a request by an investor or
his
or her representative, the Company shall transmit or cause to be transmitted
promptly, without charge, a paper copy of the Time of Sale
Prospectus.
(o) Agreement
Not to Offer or Sell Additional Shares. During the
period commencing on and including the date hereof and ending on and including
the 45th day following the date of this Agreement (as the same may be extended
as described below, the “Lock-up Period”), the Company will
not, without the prior written consent of the Underwriter (which consent may
be
withheld at the sole discretion of the Underwriter), directly or indirectly,
sell (including, without limitation, any short sale), offer, contract or grant
any option to sell, pledge, transfer or establish an open “put equivalent
position” within the meaning of Rule 16a-1(h) under the Exchange Act, or
otherwise dispose of or transfer, or announce the offering of, or file any
registration statement under the Securities Act in respect of, any Shares,
options, rights or warrants to acquire Shares or securities exchangeable or
exercisable for or convertible into Shares (other than as contemplated by this
Agreement with respect to the Offered Shares) or publicly announce the intention
to do any of the foregoing; provided, however, that the Company may issue Shares
or options to purchase Shares, or issue Shares upon exercise of warrants or
options, pursuant to any stock option, stock bonus or other stock plan or
arrangement described in each applicable Prospectus. Notwithstanding
the foregoing, if (i) during the last 17 days of the Lock-up Period, the Company
issues an earnings release or material news or a material event relating to
the
Company occurs or (ii) prior to the expiration of the Lock-up Period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the Lock-up Period, then in each case the Lock-up
Period will be extended until the expiration of the 18-day period beginning
on
the date of the issuance of the earnings release or the occurrence of the
material news or material event, as applicable, unless the Underwriter waives,
in writing, such extension (which waiver may be withheld at the sole discretion
of the Underwriter), except that such extension will not apply if, (i) within
three business days prior to the 15th calendar day before the last day of the
Lock-up Period, the Company delivers a certificate, signed by the Chief
Financial Officer or Chief Executive Officer of the Company, certifying on
behalf of the Company that (i) the Shares are “actively traded securities” (as
defined in Regulation M), (ii) the Company meets the applicable requirements
of
paragraph (a)(1) of Rule 139 under the Securities Act in the manner
contemplated by NASD Conduct Rule 2711(f)(4), and (iii) the provisions of
NASD Conduct Rule 2711(f)(4) are not applicable to any research reports
relating to the Company published or distributed by the Underwriter during
the
15 days before or after the last day of the Lock-up Period (before giving effect
to such extension). The Company will provide the Underwriter with
prior notice of any such announcement that gives rise to an extension of the
Lock-up Period.
(p) Press
Releases and Other Communications. Prior
to the Closing Date the
Company shall not issue any press release or other communication directly or
indirectly or hold any press conferences with respect to the Company or any
Subsidiary, the financial condition, results of operations, business,
properties, assets, or liabilities of the Company or any Subsidiary, or the
offering of the Shares, without the Underwriter’s prior consent.
18
(q) No
Stabilization or Manipulation; Compliance with Regulation
M. The Company will not take, 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 Shares or any other reference
security, whether to facilitate the sale or resale of the Offered Shares or
otherwise, and the Company will, and shall cause each of its affiliates to,
comply with all applicable provisions of Regulation M.
The
Underwriter may, in its sole
discretion, waive in writing the performance by the Company of any
one or more of
the foregoing covenants or extend the time for their
performance.
Section
4. Payment
of Expenses. The Company agrees to pay all
costs, fees and expenses incurred in connection with the performance of its
obligations hereunder and in connection with the transactions contemplated
hereby, including without limitation (i) all expenses incident to the
issuance and delivery of the Offered Shares, (ii) all fees and expenses of
the registrar and transfer agent of the Shares, (iii) all necessary issue,
transfer and other stamp taxes in connection with the issuance and sale of
the
Offered Shares to the Underwriter, (iv) all fees and expenses of the
Company’s counsel (including local and special counsel), independent public or
certified public accountants and other advisors, (v) all costs and expenses
incurred in connection with the preparation, printing, filing, shipping and
distribution of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), the Time of Sale
Prospectus, the Prospectus, any free writing prospectus prepared by or on behalf
of, used by, or referred to by the Company, and each preliminary prospectus,
and
all amendments and supplements thereto, and this Agreement, (vi) all filing
fees, attorneys’ fees and expenses incurred by the Company or the Underwriter in
connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Offered Shares for
offer and sale under the state securities or blue sky laws or the provincial
securities laws of Canada, and, if requested by the Underwriter, preparing
and
printing a “Blue Sky Survey” or memorandum and a “Canadian
wrapper”, and any supplements thereto, advising the Underwriter of such
qualifications, registrations, determinations and exemptions, (vii) the
filing fees incident to, and the reasonable fees and expenses of counsel for
the
Underwriter in connection with, the NASD’s review, if any, and approval of the
Underwriter’s participation in the offering and distribution of the Offered
Shares, (viii) the costs and expenses of the Company relating to investor
presentations on any “road show” undertaken in connection with the marketing of
the offering of the Shares, including, without limitation, expenses associated
with the preparation or dissemination of any electronic road show, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the representatives, employees and officers of the Company and
any
such consultants, and the cost of any aircraft chartered in connection with
the
road show, (ix) the fees and expenses associated with listing the Offered
Shares on the NASDAQ, and (x) all other fees, costs and expenses of the
nature referred to in Item 14 of Part II of the Registration
Statement. Except as provided in this Section 4, Section 7,
Section 8 and Section 9 hereof, the Underwriter shall pay its own
expenses, including the fees and disbursements of their counsel.
Section
5. Covenant
of the Underwriter. The Underwriter covenants with the
Company not to take any action that would result in the Company being required
to file with the Commission pursuant to Rule 433(d) under the Securities Act
a
free writing prospectus
19
prepared
by or on behalf of the Underwriter that otherwise would not be required to
be
filed by the Company thereunder, but for the action of the
Underwriter.
Section
6. Conditions
of the Obligations of the Underwriter. The
obligations of the Underwriter to purchase and pay for the Offered
Shares as provided herein on the Closing Date shall be subject to the accuracy
of the representations and warranties on the part of the Company set forth
in
Section 1 hereof as of the date hereof and as of the Closing Date as though
then made, to the timely performance by the Company of its covenants and other
obligations hereunder, and to each of the following additional
conditions:
(a) Opinions
of Counsel for the Company. On the Closing Date the
Underwriter shall have received:
(i) the
opinion and negative assurance letter of Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, special United States counsel for the Company, dated as of the Closing
Date, in form and substance satisfactory to the Underwriter, in the forms
attached as Exhibit B-1 and Exhibit B-2 hereto;
(ii) the
opinions of Xxxxxx & Xxxxxx LLP, special United States tax counsel for the
Company, dated as of the Closing Date, in form and substance satisfactory to
the
Underwriter, in the form attached as Exhibit C-1 and Exhibit
C-2 hereto;
(iii) the
opinion of Xxxxxx & Xxxxxx LLP, special Xxxxxxxx Islands counsel for the
Company, dated as of the Closing Date, in form and substance satisfactory to
the
Underwriter, in the form attached as Exhibit D hereto;
(iv) the
opinion of Xxxxxx & Xxxxxxx P.C., special Xxxxxxxx Islands counsel for the
Company, dated as of the Closing Date, in form and substance satisfactory to
the
Underwriter, substantially in the form attached as Exhibit E hereto;
and
(v) the
opinion of Xxxxxx & Xxxxxx LLP, special Liberian counsel for the Company,
dated as of the Closing Date, in form and substance satisfactory to the
Underwriter, substantially in the form attached as Exhibit F
hereto.
(b) Opinion
of Counsel for the Underwriter. On the Closing Date the
Underwriter shall have received the opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx
LLP, counsel for the Underwriter, in form and substance satisfactory to the
Underwriter, dated as of the Closing Date.
(c) Accountants’
Comfort Letter. On the date hereof, the Underwriter
shall have received from Ernst & Young LLP, independent public or certified
public accountants for the Company, a letter dated the date hereof addressed
to
the Underwriter, in form and substance satisfactory to the Underwriter, (i)
containing statements and information of the type ordinarily included in
accountant’s “comfort letters” to underwriters, delivered according to Statement
of Auditing Standards No. 72 (or any successor bulletin), with respect to the
audited and unaudited financial statements and certain financial information
contained in the Registration Statement, the Preliminary Prospectus, the Time
of
Sale Prospectus, and each free writing prospectus, if any, and, with respect
to
each letter dated the date hereof only, the Prospectus, and (ii) confirming
that
they are (A) independent public or certified public accountants as required
by
the Securities Act and the Exchange Act and (B) in compliance with the
applicable requirements relating to the qualification of accountants under
Rule
2-01 of Regulation S-X.
20
(d) Bring-down
Comfort Letter. On the Closing Date the Underwriter
shall have received from Ernst & Young LLP, independent public or certified
public accountants for the Company, a letter dated such date, in form and
substance satisfactory to the Underwriter, to the effect that they reaffirm
the
statements made in the letter furnished by them pursuant to subsection (c)
of this Section 6, except that the specified date referred to therein for
the carrying out of procedures shall be no more than three business days prior
to the Closing Date.
(e) No
Objections to Filings. No Prospectus or amendment or supplement to the
Registration Statement or the Prospectus shall have been filed to which the
Underwriter reasonably objects in writing.
(f) Compliance
with Registration Requirements; No Stop Order; No Objection from
NASD. For the period from and after effectiveness of
this Agreement and prior to the Closing Date:
(i) the
Company shall have filed the
Prospectus with the Commission in the manner and within the time period required
by Rule 424(b) under the Securities Act;
(ii) no
stop order suspending the
effectiveness of the Registration Statement, any Rule 462(b) Registration
Statement, or any post-effective amendment to the Registration Statement, shall
be in effect and no proceedings for such purpose shall have been instituted
or
threatened by the Commission; and
(iii) the
NASD shall have raised no objection
to the fairness and reasonableness of the underwriting terms and
arrangements.
(g) No
Untrue Statements or Omissions. (i) The Registration Statement
and all amendments thereto shall 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; (ii) the Prospectus, and any
amendment or supplement thereto, shall not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they are
made,
not misleading; and (iii) the Time of Sale Prospectus, and any amendment or
supplement thereto, shall not include an untrue statement of a material fact
or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they are made, not
misleading.
(h) No
Material Adverse Change or Ratings Agency Change. For the period
from and after the date of this Agreement and through and including the Closing
Date:
(i) in
the judgment of the Representative
there shall not have occurred any Material Adverse Change;
(ii) no
transaction which is material and
adverse to the Company shall have been entered into by the Company or any of
the
Subsidiaries; and
(iii) there
shall not have occurred any
downgrading, nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any securities of
the
Company or any of its subsidiaries by any “nationally
recognized
21
statistical
rating organization” as such
term is defined for purposes of Rule 436(g)(2) under the Securities
Act.
(i) No
Loss of Vessels. There shall not have been a material loss
(whether actual or constructive or partial or total) of or to any of the vessels
that are described in the Registration Statement, the Time of Sale Prospectus
and the Prospectus as owned or to be acquired by the Company or any Subsidiary
and no such vessel shall have been arrested or requisitioned for title or
hire.
(j) Officers’
Certificate. On the Closing Date the Underwriter shall
have received a written certificate executed by the Chief Executive Officer
of
the Company and the Chief Financial Officer of the Company, dated as of the
Closing Date, in the form attached as Exhibit G.
(k) Lock-Up
Agreement from Certain Securityholders of the
Company. On or prior to the date hereof, the Company
shall have furnished to the Underwriter an agreement in the form of
Exhibit A-1 hereto from the persons listed on Exhibit A-2
hereto, and such agreement shall be in full force and effect on each of the
Closing Date.
(l) NASDAQ. The
Offered Shares shall have been approved for quotation on NASDAQ, subject only
to
notice of issuance prior to the Closing Date.
(m) Additional
Documents. On or before the Closing Date, the Underwriter and
counsel for the Underwriter shall have received such information, documents
and
opinions as they may reasonably request for the purposes of enabling them to
pass upon the issuance and sale of the Offered Shares as contemplated herein,
or
in order to evidence the accuracy of any of the representations and warranties,
or the satisfaction of any of the conditions or agreements, herein contained;
and all proceedings taken by the Company in connection with the issuance and
sale of the Offered Shares as contemplated herein and in connection with the
other transactions contemplated by this Agreement shall be satisfactory in
form
and substance to the Underwriter and counsel for the Underwriter.
If
any condition specified in this
Section 6 is not satisfied when and as required to be satisfied, this Agreement
may be terminated by the Underwriter by notice to the Company at any time on
or
prior to the Closing Date, which termination shall be without liability on
the
part of any party to any other party, except that Section 4,
Section 6, Section 8 and Section 9 shall at all times be
effective and shall survive such termination.
Section
7. Reimbursement
of Underwriter’s Expenses. If this Agreement is terminated
by the Underwriter pursuant to Section 6 or clauses (i), (v) or (vi) of
Section 10, or if the sale to the Underwriter of the Offered Shares on the
Closing Date is not consummated because of any refusal, inability or failure
on
the part of the Company to perform any agreement herein or to comply with any
provision hereof, the Company agrees to reimburse the Underwriter upon demand
for all out-of-pocket expenses that shall have been reasonably incurred by
the
Underwriter in connection with the proposed purchase and the offering and sale
of the Offered Shares, including but not limited to fees and disbursements
of
counsel, printing expenses, travel expenses, postage, facsimile and telephone
charges.
Section
8. Indemnification.
22
(a) Indemnification
of the Underwriter. The Company agrees to indemnify and
hold harmless the Underwriter, its officers and employees, and each person,
if
any, who controls the Underwriter within the meaning of the Securities Act
or
the Exchange Act against any loss, claim, damage, liability or expense, as
incurred, to which the Underwriter or such officer, employee or controlling
person may become subject, under the Securities Act, the Exchange Act, other
federal or state statutory law or regulation, or the laws or regulations of
foreign jurisdictions where Offered Shares have been offered or sold or at
common law or otherwise (including in settlement of any litigation), insofar
as
such loss, claim, damage, liability or expense (or actions in respect thereof
as
contemplated below) arises out of or is based upon (A) (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, including any information
deemed to be a part thereof pursuant to Rule 430A under the Securities Act,
or the omission or alleged omission therefrom of a material fact required to
be
stated therein or necessary to make the statements therein not misleading;
or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Time of Sale Prospectus, any free
writing prospectus that the Company has used, referred to or filed, or is
required to file, pursuant to Rule 433(d) of the Securities Act or the
Prospectus (or any amendment or supplement thereto) or any prospectus wrapper
material distributed in Canada in connection with the offering, or the omission
or alleged omission therefrom of a material fact necessary in order to make
the
statements therein, in the light of the circumstances under which they were
made, not misleading; or (B) the violation of any laws or regulations of foreign
jurisdictions where Offered Shares have been offered or sold; and to reimburse
the Underwriter and each such officer, employee and controlling person for
any
and all expenses (including the fees and disbursements of counsel chosen the
Underwriter) as such expenses are reasonably incurred by the Underwriter or
such
officer, employee or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the foregoing indemnity
agreement shall not apply to any loss, claim, damage, liability or expense
to
the extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made
in
reliance upon and in conformity with written information relating to the
Underwriter furnished to the Company by the Underwriter expressly for use in
the
Registration Statement, any preliminary prospectus, the Time of Sale Prospectus,
any such free writing prospectus or the Prospectus (or any amendment or
supplement thereto). The indemnity agreement set forth in this
Section 8(a) shall be in addition to any liabilities that the Company may
otherwise have.
(b) Indemnification
of the Company, its Directors and Officers. The
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, or any such
director, officer or controlling person may become subject, under the Securities
Act, the Exchange Act, or other federal or state statutory law or regulation,
or
at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Underwriter), insofar
as
such loss, claim, damage, liability or expense (or actions in respect thereof
as
contemplated below) arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any preliminary prospectus, the Time of Sale Prospectus, any free
writing prospectus that the Company has used, referred to or filed, or is
required to file, pursuant to Rule 433(d) of the Securities Act or the
Prospectus (or such amendment or supplement thereto), or arises out of or is
based upon the omission or alleged omission to state therein a
23
material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was
made in the Registration Statement, any preliminary prospectus, the Time of
Sale
Prospectus, such free writing prospectus that the Company has used, referred
to
or filed, or is required to file, pursuant to Rule 433(d) of the Securities
Act,
the Prospectus (or such amendment or supplement thereto), in reliance upon
and
in conformity with written information furnished to the Company by the
Underwriter expressly for use therein; and to reimburse the Company, or any
such
director, officer or controlling person for any legal and other expense
reasonably incurred by the Company, or any such director, officer or controlling
person in connection with investigating, defending, settling, compromising
or
paying any such loss, claim, damage, liability, expense or
action. The indemnity agreement set forth in this Section 8(b)
shall be in addition to any liabilities that each Underwriter may otherwise
have.
(c) Notifications
and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8,
notify the indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party for contribution or
otherwise than under the indemnity agreement contained in this Section 8 or
to the extent it is not prejudiced as a proximate result of such
failure. In case any such action is brought against any indemnified
party and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to participate
in,
and, to the extent that it shall elect, jointly with all other indemnifying
parties similarly notified, by written notice delivered to the indemnified
party
promptly after receiving the aforesaid notice from such indemnified party,
to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that a conflict may arise
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf
of
such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of such indemnifying party’s
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party under this Section 8 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof unless
(i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the fees and
expenses of more than one separate counsel (together with local counsel),
representing the indemnified parties who are parties to such action), which
counsel (together with any local counsel) for the indemnified parties shall
be
selected by the Underwriter (in the case of counsel for the indemnified parties
referred to in Section 8(a) above) or by the Company (in the case of
counsel for the indemnified parties referred to in Section 8(b) above))
(ii) the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized in writing the employment of counsel for the indemnified party
at
the expense
24
of
the indemnifying party, in each of which cases the fees and expenses of counsel
shall be at the expense of the indemnifying party and shall be paid as they
are
incurred.
(d) Settlements. The
indemnifying party under this Section 8 shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff,
the
indemnifying party agrees to indemnify the indemnified party against any loss,
claim, damage, liability or expense by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
Section 8(c) hereof, the indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected without its written consent if
(i) such settlement is entered into more than 30 days after receipt by
such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding.
Section
9. Contribution. If
the indemnification provided for in Section 8 is for any reason held to be
unavailable to or otherwise insufficient to hold harmless an indemnified party
in respect of any losses, claims, damages, liabilities or expenses referred
to
therein, then each indemnifying party shall contribute to the aggregate amount
paid or payable by such indemnified party, as incurred, as a result of any
losses, claims, damages, liabilities or expenses referred to therein (i) in
such proportion as is appropriate to reflect the relative benefits received
by
the Company, on the one hand, and the Underwriter, on the other hand, from
the
offering of the Offered Shares pursuant to this Agreement or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company,
on the one hand, and the Underwriter, on the other hand, in connection with
the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the
one hand, and the Underwriter, on the other hand, in connection with the
offering of the Offered Shares pursuant to this Agreement shall be deemed to
be
in the same respective proportions as the total net proceeds from the offering
of the Offered Shares pursuant to this Agreement (before deducting expenses)
received by the Company, and the total underwriting discounts and commissions
received by the Underwriter, in each case as set forth on the front cover page
of the Prospectus bear to the aggregate public offering price of the Offered
Shares as set forth on such cover. The relative fault of the Company,
on the one hand, and the Underwriter, on the other hand, shall be determined
by
reference to, among other things, whether any such 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, on the one hand, or the
Underwriter, on the other hand, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or
omission.
The
amount paid or payable by a party as
a result of the losses, claims, damages, liabilities and expenses referred
to
above shall be deemed to include, subject to the
25
limitations
set forth in
Section 8(c), any legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending any action or
claim. The provisions set forth in Section 8(c) with respect to
notice of commencement of any action shall apply if a claim for contribution
is
to be made under this Section 9; provided, however,
that no additional notice shall be
required with respect to any action for which notice has been given under
Section 8(c) for purposes of indemnification.
The
Company and the Underwriter agree
that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 9.
Section
10. Termination
of this Agreement. Prior to the purchase of the
Offered Shares by the Underwriter on the Closing Date this Agreement may be
terminated by the Underwriter by notice given to the Company if at any time
(i) trading or quotation in any of the Company’s securities shall have been
suspended or limited by the Commission or by the NASDAQ; (ii) trading in
securities generally on either the NASDAQ, the American Stock Exchange or the
New York Stock Exchange shall have been suspended or limited, or minimum or
maximum prices shall have been generally established on any of such stock
exchanges by the Commission or the NASD; (iii) a general banking moratorium
shall have been declared by any of federal or New York authorities;
(iv) there shall have occurred any outbreak or escalation of national or
international hostilities or any crisis or calamity, or any change in the United
States or international financial markets, or any substantial change or
development involving a prospective substantial change in United States’ or
international political, financial or economic conditions, as in the judgment
of
the Underwriter is material and adverse and makes it impracticable to market
the
Offered Shares in the manner and on the terms described in the Time of Sale
Prospectus or the Prospectus or to enforce contracts for the sale of securities;
(v) there shall have occurred any Material Adverse Change which would, in
the Underwriter’s judgment, make it impractical or inadvisable to proceed with
the public offering or the delivery of the Offered Shares on the terms and
in
the manner contemplated in the Registration Statement, the Time of Sale
Prospectus and the Prospectus; or (vi) there shall have occurred any
downgrading, or any notice or announcement shall have been given or made of
(x)
any intended or potential downgrading or (y) any watch, review or possible
change that does not indicate an affirmation or improvement in the rating
accorded any securities of or guaranteed by the Company or any Subsidiary by
any
“nationally recognized statistical rating organization,” as that term is defined
in Rule 436(g)(2) under the
26
Securities
Act. Any termination pursuant to this Section 10 shall be without liability
on the part of (a) the Company to the Underwriter, except that the Company
shall be obligated to reimburse the expenses of the Underwriter pursuant to
Sections 4 and 7 hereof, (b) the Underwriter to the Company, or
(c) of any party hereto to any other party except that the provisions of
Section 8 and Section 9 shall at all times be effective and shall
survive such termination.
No
Advisory or Fiduciary
Relationship. The Company acknowledges and agrees that (a) the
purchase and sale of the Offered Shares pursuant to this Agreement, including
the determination of the public offering price of the Offered Shares and any
related discounts and commissions, is an arm’s-length commercial transaction
between the Company, on the one hand, and the Underwriter, on the other hand,
(b) in connection with the offering contemplated hereby and the process leading
to such transaction the Underwriter is and has been acting solely as a principal
and is not the agent or fiduciary of the Company, or its stockholders,
creditors, employees or any other party, (c) the Underwriter has not assumed
and
will not assume an advisory or fiduciary responsibility in favor of the Company
with respect to the offering contemplated hereby or the process leading thereto
(irrespective of whether the Underwriter has advised or is currently advising
the Company on other matters) and the Underwriter has no obligation to the
Company with respect to the offering contemplated hereby except the obligations
expressly set forth in this Agreement, (d) the Underwriter and its affiliates
may be engaged in a broad range of transactions that involve interests that
differ from those of the Company, and (e) the Underwriter has not provided
any
legal, accounting, regulatory or tax advice with respect to the offering
contemplated hereby and the Company has consulted its own legal, accounting,
regulatory and tax advisors to the extent it deemed appropriate.
Section
11. Representations
and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of
the
Company, of its officers and of the Underwriter set forth in or made pursuant
to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of the Underwriter or the Company or any
of
its or their partners, officers or directors or any controlling person, as
the
case may be, and, anything herein to the contrary notwithstanding, will survive
delivery of and payment for the Offered Shares sold hereunder and any
termination of this Agreement.
Section
12. Notices. All
communications hereunder shall be in writing and shall be mailed, hand delivered
or telecopied and confirmed to the parties hereto as follows:
|
If
to the
Underwriter:
|
|
Xxxxxxxxx
&
Company,
Inc.
|
|
000
Xxxxxxx
Xxxxxx
|
|
Xxx
Xxxx, Xxx Xxxx
00000
|
|
Facsimile: (000)
000-0000
|
|
Attention: General
Counsel
|
|
If
to the
Company:
|
|
000
Xxxxxxx
Xxxxxx
|
|
Xxx
Xxxx Xxx Xxxx
00000
|
|
Facsimile: (000)
000-0000
|
|
Attention: Xxxx
Xxxxxxxx
|
27
Any
party hereto may change the address
for receipt of communications by giving written notice to the
others.
Section
13. Successors. This
Agreement will inure to the benefit of and be binding upon the parties hereto
and to the benefit of the employees, officers and directors and controlling
persons referred to in Section 8 and Section 9, and in each case their
respective successors, and personal representatives, and no other person will
have any right or obligation hereunder. The term
“successors” shall not include any purchaser of the Offered
Shares as such from the Underwriter merely by reason of such
purchase.
Section
14. Partial
Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision
hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary
to
make it valid and enforceable.
Section
15. Governing
Law Provisions. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed in such state. Any
legal suit, action or proceeding arising out of or based upon this Agreement
or
the transactions contemplated hereby (“Related Proceedings”)
may be instituted in the federal courts of the United States of America located
in the Borough of Manhattan in the City of New York or the courts of the State
of New York in each case located in the Borough of Manhattan in the City of
New
York (collectively, the “Specified Courts”), and each party
irrevocably submits to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any such court (a
“Related Judgment”), as to which such jurisdiction is
non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by
mail to such party’s address set forth above shall be effective service of
process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any
objection to the laying of venue of any suit, action or other proceeding in
the
Specified Courts and irrevocably and unconditionally waive and agree not to
plead or claim in any such court that any such suit, action or other proceeding
brought in any such court has been brought in an inconvenient
forum. The Company hereby irrevocably appoints Xxxxxx & Xxxxxxx
LLP, Xxx Xxxxxxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its agent to receive
service of process or other legal summons for purposes of any such suit, action
or proceeding that may be instituted in any state or federal court in the
Borough of Manhattan in the City of New York.
With
respect to any Related Proceeding, each party irrevocably waives, to the fullest
extent permitted by applicable law, all immunity (whether on the basis of
sovereignty or otherwise) from jurisdiction, service of process, attachment
(both before and after judgment) and execution to which it might otherwise
be
entitled in the Specified Courts, and with respect to any Related Judgment,
each
party waives any such immunity in the Specified Courts or any other court of
competent jurisdiction, and will not raise or claim or cause to be pleaded
any
such immunity at or in respect of any such Related Proceeding or Related
Judgment, including, without limitation, any immunity pursuant to the United
States Foreign Sovereign Immunities Act of 1976, as amended.
28
Section
16. General
Provisions. This Agreement constitutes the
entire agreement of the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof. This
Agreement may be executed in two or more counterparts, each one of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Agreement may not be amended or
modified unless in writing by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each party whom
the condition is meant to benefit. The Section headings herein are
for the convenience of the parties only and shall not affect the construction
or
interpretation of this Agreement.
Each
of the parties hereto acknowledges
that it is a sophisticated business person who was adequately represented by
counsel during negotiations regarding the provisions hereof, including, without
limitation, the indemnification provisions of Section 8 and the
contribution provisions of Section 9, and is fully informed regarding said
provisions. Each of the parties hereto further acknowledges that the
provisions of Sections 8 and 9 hereto fairly allocate the risks in
light of the ability of the parties to investigate the Company, its affairs
and
its business in order to assure that adequate disclosure has been made in the
Registration Statement, any preliminary prospectus, the Time of Sale Prospectus,
each free writing prospectus and the Prospectus (and any amendments and
supplements thereto), as required by the Securities Act and the Exchange
Act.
29
If
the foregoing is in accordance with
your understanding of our agreement, kindly sign and return to the Company
the
enclosed copies hereof, whereupon this instrument, along with all counterparts
hereof, shall become a binding agreement in accordance with its
terms.
Very
truly
yours,
|
|||||
By:
|
/s/
Xxxxxxxxx
Xxxxxxx
|
||||
Name:
|
Xxxxxxxxx
Xxxxxxx
|
||||
Title:
|
Chief
Executive
Officer
|
The
foregoing Underwriting Agreement is
hereby confirmed and accepted by the Underwriter in New York, New York as of
the
date first above written.
XXXXXXXXX
&
COMPANY,
INC.
By
|
/s/
Hamish X.X. Xxxxxx
|
|
Name: Hamish
X.X. Xxxxxx
|
||
Title: Managing
Director
|
30