FORM OF RIGHT OF FIRST REFUSAL AGREEMENT
EXHIBIT
10.16
FORM
OF RIGHT OF FIRST REFUSAL AGREEMENT
This
Right of First Refusal Agreement (this “Agreement”)
is
made effective as of January 26, 2007 among: (a) Eurobulk Ltd., a Liberian
company (“Eurobulk”);
Friends Investment Company Inc., a Xxxxxxxx Islands company (“Friends”);
Xxxxxxxxx X. Xxxxxx (“Xxxxxx”),
an
individual residing at [
],
Greece
(together with Eurobulk and Friends, the “Grantors”);
and
(b) Euroseas Ltd., a Xxxxxxxx Islands company (the “Company”).
BACKGROUND
The
Grantors wish to facilitate the public offering (the “Offering”)
of
shares of common stock of the Company, pursuant
to a Registration Statement on Form F-1 filed with the U.S. Securities and
Exchange Commission (Registration No. 333-138780). In connection with the
Offering and subject to the terms and conditions set forth herein,
(i)
each of the Grantors desires to grant the Company a right of first refusal
to
acquire any drybulk carrier or container ship (a “Subject
Vessel”)
which
any of the Grantors may consider for acquisition in the future, and (ii) Xxxxxx
desires to grant the Company a right of first refusal with respect to any
chartering out opportunity in which a Company vessel might be competing with
a
vessel belonging to an entity of which Xxxxxx is directly or indirectly a
controlling shareholder.
AGREEMENT
In
order
to induce Xxxxxxxxxxx
& Co. Inc. to
act as
the representative of the several underwriters in the Offering and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Grantors and the Company agree to the following:
1. Vessel
Acquisition Restriction.
(a)
Eurobulk agrees with the Company that, from the date hereof and so long as
Eurobulk manages vessels owned by the Company, Eurobulk will promptly notify
the
Company of any acquisition or proposed acquisition by it, or any entity that
it
directly or indirectly controls, of a Subject Vessel by delivering a notice
to
the Company, advising it of the details of the acquisition or proposed
acquisition of a Subject Vessel, including its terms, and offering to sell
the
Subject Vessel to the Company on substantially the same terms plus any costs
of
the Subject Vessel’s acquisition and net costs of carrying the Subject Vessel
since its acquisition.
(b)
Friends agrees with the Company that, from the date hereof and so long as
Friends is directly or indirectly a controlling shareholder of the Company,
Friends will promptly notify the Company of any acquisition or proposed
acquisition by it, or any entity it directly or indirectly controls, of a
Subject Vessel by delivering a notice to the Company, advising it of the details
of the acquisition or proposed acquisition of a Subject Vessel, including its
terms, and offering to sell the Subject Vessel to the Company on substantially
the same terms plus any costs of the Subject Vessel’s acquisition and net costs
of carrying the Subject Vessel since its acquisition.
(c)
Xxxxxx agrees with the Company that, from the date hereof and so long as (i)
he
is an executive officer of the Company or (ii) he directly or indirectly
controls the Company, he will (and he will use his best efforts to cause each
entity of which he is directly or indirectly a controlling shareholder to)
promptly notify the Company of any acquisition or proposed acquisition by Xxxxxx
or such entity of which he is directly or indirectly a controlling shareholder,
of a Subject Vessel by delivering a notice to the Company, advising it of the
details of the acquisition or proposed acquisition of a Subject Vessel,
including its terms, and offering to sell the Subject Vessel to the Company
on
substantially the same terms plus any costs of the Subject Vessel’s acquisition
and net costs of carrying the Subject Vessel since its acquisition.
Acquisition
Response Notice.
Within
three (3) business days after receipt of any notice referred to in Section
1
above, the Company, upon the approval of the Committee (as defined below),
will
have the right, but not the obligation, to deliver to the applicable Grantor
a
notice (a “Acquisition
Response Notice”)
that
states whether the Company wishes to purchase the Subject Vessel described
in
the notice referred to in Section 1 above upon the terms stated therein and
subject to the negotiation and execution of a memorandum of agreement or other
contract of sale. The Audit Committee of the Board of Directors (the
“Committee”),
which
consists solely of “independent directors” as such term is defined by the rules
of the NASDAQ Stock Market, Inc., is authorized to
accept
or reject any such transaction referred to in Section
1
above. Any one member of the Committee is authorized, on behalf of the
Committee, to
accept
or reject any such transaction. If,
upon
the approval of the transaction by the Committee, the Company wishes to purchase
the Subject Vessel, the Company will have thirty days (30) after delivery of
its
Acquisition Response Notice to execute a definitive Memorandum of Agreement
to
complete the acquisition. If the Company fails to deliver an Acquisition
Response Notice within the aforementioned three (3) business days, then the
Company will be deemed to have declined to purchase the Subject Vessel and
the
applicable Grantor, or any entity with respect to which Xxxxxx is the
controlling shareholder, as the case may be, will have the right to own and
operate the same. The Company will have the right to designate any other entity
to acquire the Subject Vessel so long as such entity is an affiliate of the
Company. The Company will have no right to assign its rights hereunder except
as
provided in this Section 1.
2. Chartering
Out Opportunity.
Xxxxxx
agrees with the Company that, from the date hereof and so long as he (a) is
an
executive officer of the Company or (b) directly or indirectly controls the
Company, he will (and he will use his best efforts to cause each entity of
which
he is directly or indirectly a controlling shareholder to) promptly notify
the
Company of any
chartering out opportunity in
which
a Company vessel might be competing with a vessel belonging to an entity of
which Xxxxxx is directly or indirectly a controlling shareholder, by delivering
oral notice to the Company, advising it of the details of any such chartering
out opportunity, including its terms, and offering the chartering out
opportunity to the Company on substantially the same terms; provided, however,
that such chartering out opportunity must
be
presented to the Company only if the Company has a suitable vessel, properly
situated and available, to take advantage of the chartering out
opportunity.
Chartering
Out Response Notice.
On the
same day of receipt of such oral notice referred to in Section 2 above, the
Company, upon the approval of the transaction by the Committee, will have the
right, but not the obligation, to deliver to Xxxxxx a notice (a “Chartering
Out Response Notice”)
that
states whether the Company wishes to charter out one of its vessels with respect
to the chartering opportunity described in the notice referred to in Section
2
above upon the terms stated therein and subject to the negotiation and execution
of a charter party agreement. It being understood that the Committee shall
have
a minimum of six (6) hours after receipt of such oral notice to deliver such
Chartering Out Response Notice to Xxxxxx. Any one member of the Committee is
authorized, on behalf of the Committee, to
accept
or reject any such transaction.
If,
upon the approval of the transaction by the Committee, the Company wishes to
charter out a vessel, the Company will have one day after delivery of its
Chartering Out Response Notice to accept the chartering out opportunity. If
the
Company fails to deliver a Chartering Out Response Notice within the
aforementioned one day, then the Company will be deemed to have declined to
accept the chartering out opportunity and Xxxxxx, or any entity with respect
to
which he is the controlling shareholder, as the case may be, will have the
right
to accept such chartering opportunity. The Company will have the right to
designate any other entity to accept such chartering opportunity so long as
such
entity is an affiliate of the Company. The Company will have no right to assign
its rights hereunder except as provided in this Section 2.
2
3. Notices.
Except
as otherwise specified in Section 2 above, all notices, requests, demands and
other communications to any party hereunder will be in writing (including
prepaid overnight courier, facsimile transmission, or similar writing) and
will
be given to such party at its respective address or facsimile number set forth
below or at such other address or facsimile numbers as such party may hereafter
specify for the purpose by notice to the other party hereto. Each such notice,
request or other communication will be effective (i) if given by facsimile,
when
such facsimile is transmitted to the facsimile number specified in this Section
3 and telephonic confirmation of receipt thereof is obtained or (ii) if given
by
mail, prepaid overnight courier or any other means, when received at the address
specified in this Section or when delivery at such address is
refused.
Notices
to Eurobulk will be made as follows:
Eurobulk
Ltd.
Aethrion
Xxxxxx
00
Xx,
Xxxxxxxxxxxx Xxxxxx
000
00
Xxxxxxxx, Xxxxxx
Telephone:
000-00 000 0000000
Facsimile:
011-30 210 6105111
Attention:
President
Notices
to Friends will be made as follows:
Friends
Investment Company Inc.
Aethrion
Xxxxxx
00
Xx,
Xxxxxxxxxxxx Xxxxxx
000
00
Xxxxxxxx, Xxxxxx
Telephone:
000-00 000 0000000
Facsimile:
011-30 2111804097
Attention:
President
Notices
to Xx. Xxxxxxxxx X. Xxxxxx will be made as follows:
Xx.
Xxxxxxxxx X. Xxxxxx
Aethrion
Xxxxxx
00
Xx,
Xxxxxxxxxxxx Xxxxxx
000
00
Xxxxxxxx, Xxxxxx
Telephone:
000-00 000 0000000
Facsimile:
011-30 211 1804097
3
Notices
to the Company will be made as follows:
Aethrion
Xxxxxx
00
Xx,
Xxxxxxxxxxxx Xxxxxx
000
00
Xxxxxxxx, Xxxxxx
Telephone:
000-00 000 0000000
Facsimile:
011-30 211 1804097
Attention:
President
4. Governing
Law.
This
Agreement and the rights and obligations of the parties hereto will be governed
by and construed in accordance with the laws of England.
5. Further
Assurances.
Each of
the Grantors agrees to execute, acknowledge and deliver all such instruments
and
take all such actions as the Company from time to time may reasonably request
in
order to further effectuate the purposes of this Agreement and to carry out
the
terms hereof and to better assure and confirm to the Company its rights, powers
and remedies hereunder.
6. Binding
Effect; Assignment.
This
Agreement will be binding upon and inure to the benefit of the parties hereto
and to their respective heirs, executors, administrators, successors and
permitted assigns. This Agreement is not assignable by either party without
the
prior written consent of the other party except as provided in Sections 1 and
2
hereof.
7. Severability.
If any
term, covenant or condition of this Agreement is held to be invalid, illegal
or
unenforceable in any respect, then this Agreement will be construed as if such
invalid, illegal, or unenforceable provision or part of a provision had never
been contained in this Agreement.
8. Counterparts.
This
Agreement may be executed in multiple counterparts, each of which will be deemed
an original and all of such counterparts together will constitute one agreement.
To facilitate execution of this Agreement, the parties may execute and exchange
counterparts of signature pages by telephone facsimile.
[Signature
page follows.]
4
IN
WITNESS WHEREOF, the parties hereto have executed or caused this Agreement
to be
executed as of the date set forth above.
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EUROBULK
LTD.
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| By: |
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Name:
Markos Vassilikos
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Title:
Managing Director
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FRIENDS
INVESTMENT COMPANY INC.
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| By: |
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Name:
Xxxxxxxxx X. Xxxxxx
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Title:
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| Xxxxxxxxx X. Xxxxxx | |||
| By: |
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Name:
Xxxxxxxxx X. Xxxxxx
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Title:
Chairman, President & CEO
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[Signature
page to the Right of First Refusal Agreement]
