d1013407_6-k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF THE SECURITIES
EXCHANGE ACT OF 1934
For the
month of July 2009
Commission
File Number 001-33922
DRYSHIPS
INC.
80
Kifissias Avenue
Marousi 15125,
Athens Greece
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.
Form 20-F
[X] Form 40-F
[ ]
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1): [ ].
Note: Regulation S-T Rule
101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely
to provide an attached annual report to security holders.
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7): [ ].
Note: Regulation S-T Rule
101(b)(7) only permits the submission in paper of a Form 6-K if submitted to
furnish a report or other document that the registrant foreign private issuer
must furnish and make public under the laws of the jurisdiction in which the
registrant is incorporated, domiciled or legally organized (the registrant's
“home country”), or under the rules of the home country exchange on which the
registrant's securities are traded, as long as the report or other document is
not a press release, is not required to be and has not been distributed to the
registrant's security holders, and, if discussing a material event, has already
been the subject of a Form 6-K submission or other Commission filing on
EDGAR.
INFORMATION
CONTAINED IN THIS FORM 6-K REPORT
Attached
hereto as Exhibit 1 is a securities purchase agreement (the “Agreement”), dated
as of July 9, 2009, made by and between DryShips Inc. (the “Company”) and the
entities listed on Schedule 1 of the Agreement (the “Sellers”), whereby the
Sellers have agreed to sell and the Company has agreed to purchase, in
consideration of the purchase price set forth in the Agreement, the remaining
25% of the total issued and outstanding shares of capital stock of Primelead
Shareholders Inc.
This
Report on Form 6-K and the exhibit hereto are hereby incorporated by reference
into the Company’s registration statement on Form F-3ASR (Registration No.
333-146540), filed with the Securities and Exchange Commission (the “SEC”) on
October 5, 2007, as amended by a Post-Effective Amendment No. 1, filed with the
SEC on October 20, 2008.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
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DRYSHIPS
INC.
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(Registrant)
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Dated:
July 14, 2009
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By
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/s/
George Economou
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George
Economou
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President,
Chief Executive Officer
&
Interim Chief Financial Officer
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Exhibit
1
SECURITIES PURCHASE
AGREEMENT
THIS
SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of July 9, 2009, is
made by and between the entities listed on Schedule 1 hereto (each, a “Seller”
and collectively, the “Sellers”) and DryShips Inc., a corporation organized
under the laws of the Republic of the Marshall Islands (the
“Company”).
RECITALS
WHEREAS,
the Company currently owns, directly and indirectly, shares of common stock, par
value $0.01 per share (the “Common Stock”), constituting seventy-five percent
(75%) of the total issued and outstanding shares of the capital stock of
Primelead Shareholders Inc., a corporation organized under the laws of the
Republic of the Marshall Islands (“Primelead”);
WHEREAS,
the board of directors of the Company has determined that it is advisable and in
the best interests of the Company to purchase the remaining shares of the Common
Stock, constituting twenty-five percent (25%) of the total issued and
outstanding capital stock of Primelead (the “Shares”); and
WHEREAS,
the Sellers currently own the Shares, as set forth on Schedule 1, and
consider it advisable and in their best interests to sell such stock to the
Company on the terms and conditions set forth herein.
NOW,
THEREFORE, in consideration of the mutual covenants contained herein, and for
such other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
DEFINITIONS
Capitalized
terms used in this Agreement shall have the meanings ascribed to them in (i) the
Preamble, (ii) the Recitals, (iii) the Definitions or (iv) elsewhere in this
Agreement, as the case may be.
“Below
Threshold Sale” shall mean a sale of any Primelead Drillship before its delivery
from the builder for consideration of less than Eight Hundred Million Dollars
($800,000,000).
“Conversion
Common Shares” shall mean shares of Common Stock issuable upon the conversion of
the Preferred Shares.
“Holder”
shall mean a holder of the Company’s Preferred Shares or Conversion Common
Shares, as the case may be.
“Original
Purchase Price” shall mean the daily dollar volume-weighted closing price per
share of the Common Stock on the Nasdaq Global Select Market for the seven (7)
trading days immediately preceding July 9, 2009.
“Preferred
Shares” shall mean shares of Series A Convertible Preferred Stock of the
Company, as described in Section 1.4.
“Primelead
Drillships” shall mean the newbuilding drillships identified as Hull Nos. 1837,
1838, 1865 and 1866 owned, indirectly, by Primelead.
“Purchase
Price” shall have the meaning set forth in Section 1.2.
Unless
otherwise expressly provided, for purposes of this Agreement, the following
rules of interpretation shall apply:
Dollars. Any
reference in this Agreement to $ shall mean United States dollars.
Gender
and Number. Any reference in this Agreement to gender shall include
all genders, and words imparting the singular number only shall include the
plural, and vice versa.
Including. The
word “including” or any variation thereof means “including, without limitation”
and shall not be construed to limit any general statement that it follows to the
specific or similar items or matters immediately following it.
ARTICLE
I
ISSUANCE AND SALE OF SHARES
OF PRIMELEAD
1.1 Purchase of
Shares. On the Closing Date (defined below), upon the
conditions set forth herein, the Sellers, severally but not jointly, agree to
sell to the Company or its respective nominees, and in consideration of the
Purchase Price, the Company agrees to acquire and purchase, the
Shares.
1.2 Purchase
Price. The Purchase Price shall consist of: (i) Fifty Million
Dollars ($50,000,000) in cash plus (ii) that number of Preferred Shares which
shall equal Two Hundred and Eighty Million Dollars ($280,000,000) divided by the
Original Purchase Price.
1.3 Rights of Preferred
Shares. The rights and preferences of the Preferred Shares
shall be set forth in a Certificate of Designation in the form attached hereto
as Exhibit
A.
1.4 Below Threshold
Sale. In the event of a Below Threshold Sale, the Sellers
shall, upon demand, pay to the Company in cash or in Preferred Shares (the value
of which shall be calculated at the Original Purchase Price) at the Sellers’
option, pro rata in accordance with the percentages set forth on Schedule 1,
twenty-five percent (25%) of the difference between the actual sale price for
the Primelead Drillship subject to the Below Threshold Sale and Eight Hundred
Million Dollars ($800,000,000); provided, however, that in no
event shall the aggregate amount payable by the Sellers pursuant to this Section
1.4 exceed Twelve Million Five Hundred Thousand Dollars ($12,500,000) per
Primelead Drillship subject to a Below Threshold Sale.
1.5 Closing; Delivery of Shares
and Preferred Shares.
(a) The
purchase and sale of the Shares shall take place at the offices of Seward &
Kissel LLP, One Battery Park Plaza, New York, New York, at 10:00 a.m. New York
time on July 15, 2009 (the “Closing Date”), or at such other time or place as
the Company and the Sellers shall mutually agree (which such time and place are
designated the “Closing”).
(b) Prior
to the Closing Date, the Company shall deliver to the Sellers any and all
information relating to the Company or its nominees as may be required by the
Company in order to cancel and reissue the Shares in the name of the Company or
its nominees.
(c) Prior
to the Closing Date, the Sellers shall deliver to the Company any and all
information relating to the Sellers as may be required by the Company’s transfer
agent in order to issue the Preferred Shares to the Sellers in the percentages
set forth on Schedule
1.
(d) On
the Closing Date, the Company shall have filed the Certificate of Designations
with the Registrar of Corporations of the Republic of the Marshall Islands
designating and prescribing the relative rights, preferences and limitations of
the Preferred Shares.
(e) At
the Closing, the Sellers shall deliver to the Company or its nominees the
certificates evidencing the Shares, duly endorsed in blank or accompanied by
executed stock transfer forms, and the Company shall deliver to the Sellers the
certificates evidencing the Preferred Shares, in both cases free and clear of
all liens, mortgages, pledges, security interests, encumbrances or adverse
claims of any nature (“Liens”).
(f) At
the Closing, the Company shall pay by wire transfer Fifty Million Dollars
($50,000,000) in immediately available funds to the account or accounts
designated by the Sellers.
ARTICLE
II
REPRESENTATIONS, WARRANTIES
AND AGREEMENTS OF THE COMPANY
The
Company hereby represents and warrants to, and agrees with, the Sellers, as of
the date hereof, as follows:
2.1 Organization. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the Republic of the Marshall Islands.
2.2 Capacity; Authority;
Validity. The Company has all necessary capacity, power and
authority to enter into this Agreement and to perform all the obligations to be
performed by the Company hereunder; this Agreement and the consummation by the
Company of the transactions contemplated hereby have been duly and validly
authorized by all necessary action of the Company; this Agreement has been duly
executed and delivered by the Company; and, assuming the due execution and
delivery of this Agreement by the Sellers, this Agreement constitutes the legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally and (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies.
2.3 Consent and Approvals; No
Violation. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby will (a)
conflict with or result in any breach of any provision of the Company’s Amended
and Restated Articles of Incorporation or Amended and Restated By-laws; (b)
require any consent, approval, authorization or permit of, or filing with or
notification to any governmental entity other than those that have been made or
obtained; (c) result in a default (or give rise to any right of amendment,
termination, cancellation, consent, acceleration or loss of material benefit)
under the terms, conditions or provisions of any material agreement to which the
Company is a party or by which any of the property or assets of the Company may
be bound, except in such cases where the requisite waivers or consents have been
obtained; or (d) violate any judgment, order, writ, decree, law, rule or
regulation applicable to the Company, in each case that would have a material
adverse effect on the legality, validity or enforceability of this Agreement or
the Company’s performance of its obligations hereunder; provided, however, that in the
case of any breach or violation of this Section 2.3, the Company shall have
ninety (90) days to cure or rectify such breach or violation; provided, further,
however, that no cure period shall be available for a breach or violation which
by its nature cannot be cured. No claim may be asserted after the
Closing Date with respect to any breach or claimed breach of clause (c) of this
Section 2.3.
2.4 No
Litigation. There is no action, suit, proceeding or
investigation pending or, to the Company’s knowledge, currently threatened
against or affecting the Company which would adversely affect or challenge the
legality, validity or enforceability of this Agreement or the transactions
contemplated hereby.
2.5 Certain
Fees. No brokerage or finder’s fees or commissions are or will
be payable by the Company to any broker, finder, placement agent or bank with
respect to the transactions contemplated by this Agreement.
2.6 Issuance of the
Securities. The Preferred Shares are duly authorized, and when
issued and paid for in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable and free and clear of all Liens
and restrictions on transfer other than as set forth in this Agreement and as
imposed by applicable law, including U.S. securities laws. Provided that all
representations and warranties of the Sellers contained herein are true and
accurate, the issuance of the Preferred Shares will, at the Closing, be effected
by the Company in compliance with all applicable foreign and United States
federal, state and local law, including , without limitation all United States
federal securities laws.
2.7 Registration
Rights.
(I) Demand
Registrations.
(a) Right to Request
Registration. At any time any Holder or Holders may request
registration under the Securities Act (“Initiating Holders”)
of all or part of the Conversion Common Shares held by such Holder or Holders
(“Demand
Registration”); provided, that each Demand Registration be at least equal
to 30% of the Conversion Common Shares. The Company shall use its
commercially reasonable efforts to effect, as expeditiously as possible, the a
Demand Registration.
Within 10
days after receipt of any such request for Demand Registration, the Company
shall give written notice of such request to all other Holders of Conversion
Common Shares and shall, subject to Section 2.7(I)(c), include in such
registration all such Conversion Common Shares with respect to which the Company
has received written requests for inclusion therein within 15 days after the
receipt of the Company’s notice.
(b) Number of Demand
Registrations. Subject to the provisions of Section 2.7(I)(a),
the Initiating Holders of Conversion Common Shares shall collectively be
entitled to request an aggregate of two Demand Registrations. A
registration shall not count as one of the permitted Demand Registrations until
it has become effective.
(c) Restrictions on Demand
Registrations. The Company shall not be obligated to effect
any Demand Registration within three months after the termination of an offering
under a previous Demand Registration or a previous registration under which the
Initiating Holder had piggyback rights pursuant to Section 2.7(III) where the
Initiating Holder was permitted to register and sell all of the Conversion
Common Shares requested to be included therein. The Company may
postpone for up to 90 days the filing or the effectiveness of a Registration
Statement for a Demand Registration if, based on the good faith judgment of the
Company’s board of directors, such postponement or withdrawal is necessary in
order to avoid premature disclosure of a matter the board has determined would
not be in the best interest of the Company to be disclosed at such time;
provided, that in no event shall the Company withdraw a Registration Statement
after such Registration Statement has been declared effective; and provided,
further, that in the event described above, the Initiating Holders requesting
such Demand Registration shall be entitled to withdraw such request and, if such
request is withdrawn, such Demand Registration shall not count as one of the
permitted Demand Registrations. The Company shall provide written
notice to the Initiating Holders requesting such Demand Registration of (i) any
postponement or withdrawal of the filing or effectiveness of a Registration
Statement pursuant to this Section 2.7(I)(c), (ii) the Company’s decision to
file or seek effectiveness of such Registration Statement following such
withdrawal or postponement and (iii) the effectiveness of such Registration
Statement. The Company may defer the filing of a particular
Registration Statement pursuant to this Section 2.7(I)(c) only once during any
12-month period.
(d) Selection of
Underwriters. If any of the Conversion Common Shares covered
by a Demand Registration are to be sold in an underwritten offering, the
Initiating Holders shall have the right to select the managing underwriter or
underwriters to administer the offering subject to the approval of the Company,
which will not be unreasonably withheld.
(e) Effective Period of Demand
Registrations. After any Demand Registration filed pursuant to
this Agreement has become effective, the Company shall use its commercially
reasonable efforts to keep such Demand Registration effective for a period equal
to one year from the date on which the SEC declares such Demand Registration
effective (or if such Demand Registration is not effective during any period
within such period, such period shall be extended by the number of days during
such period when such Demand Registration is not effective), or such shorter
period which shall terminate when all of the Conversion Common Shares covered by
such Demand Registration have been sold pursuant to such Demand Registration or
are otherwise permitted to be resold freely by all selling shareholders in such
Demand Registration under Rule 144 without regard to volume. If the
Company shall withdraw any Demand Registration pursuant to Section 2.7(I)(c) (a
“Withdrawn Demand
Registration”), the Initiating Holders of the Conversion Common Shares
remaining unsold and originally covered by such Withdrawn Demand Registration
shall be entitled to a replacement Demand Registration which (subject to the
provisions of this Section 2.8) the Company shall use its best efforts to keep
effective for a period commencing on the effective date of such Demand
Registration and ending on the earlier to occur of the date (i) which is one
year from the effective date of such Demand Registration and (ii) on which all
of the Conversion Common Shares covered by such Demand Registration have been
sold or are otherwise permitted to be resold freely by all selling shareholders
in such Demand Registration under Rule 144 without regard to
volume. Such additional Demand Registration otherwise shall be
subject to all of the provisions of this Agreement.
(II) Shelf
Registration.
(a) At
such time as the Company is able to use Form F-3 under the Securities Act (or
any successor form) for sales of Conversion Common Shares by a Holder, at the
request of Holders of at least 15% of the Conversion Common Shares having an
aggregate market value of at least Five Million Dollars ($5,000,000), the
Company shall use its commercially reasonable efforts to effect, as
expeditiously as possible, the registration under the Securities Act of any
number of Conversion Common Shares for which it receives requests in accordance
with this Section 2.7(II)(a) (the “Shelf
Registration”). The Company shall use its commercially
reasonable best efforts to cause such Registration Statement to become effective
as promptly as practicable and maintain the effectiveness of such Registration
Statement (subject to the terms and conditions herein) for a period ending on
the earlier of (i) three years following the date on which such Registration
Statement first becomes effective (but one year if the Company is not able to
use Form F-3 under the Securities Act (or any successor form)) and (ii) the date
on which all Conversion Common Shares covered by such Registration Statement
have been sold and the distribution contemplated thereby has been completed or
have become freely tradeable pursuant to Rule 144 without regard to
volume.
(b) The
Shelf Registration Statement pursuant to this Section 2.7(II) shall to the
extent possible under applicable law, be effected to permit sales on a
continuous basis pursuant to Rule 415 under the Securities Act. Any takedown
under the Shelf Registration pursuant to this Section 2.7(II) may or may not be
underwritten; provided, however, that (i) Holders may request any underwritten
takedown only to be effected as a Demand Registration (in which event, unless
such Demand Registration would not require representatives of the Company to
meet with prospective purchasers of the Company’s securities, a Demand
Registration must be available thereunder and the number of Demand Registrations
available shall be reduced by one under Section 2.7(I)(b)) or (ii) Holders may
request an unlimited number of underwritten takedowns to be effected in
accordance with the terms of Section 2.7(III). The Company shall be entitled to
effect the Shelf Registration on any available form under the Securities
Act.
(c) Within
10 days after receipt of any such request for the Shelf Registration, the
Company shall give written notice of such request to all other Holders of
Conversion Common Shares and shall include in such registration all such
Conversion Common Shares with respect to which the Company has received written
requests for inclusion therein within 15 days after the receipt of the Company’s
notice.
(d) The
Company, and any other holder of the Company’s securities who has registration
rights, may include its securities in any Shelf Registration effected pursuant
to this Section 2.7(II).
(III) Piggyback
Registrations.
(a) Right to
Piggyback. If at any time the Company proposes to register any
of its common equity securities under the Securities Act (other than a
registration statement on Form S-8 or on Form F-4 (or any similar successor
forms thereto or in connection with (A) an employee stock option, stock purchase
or compensation plan or securities issued or issuable pursuant to any such plan,
or (B) a dividend reinvestment plan), whether for its own account or for the
account of one or more shareholders of the Company, and the registration form to
be used may be used for any registration of Conversion Common Shares (a “Piggyback
Registration”), the Company shall give prompt written notice (in any
event within 10 days after its receipt of notice of any exercise of other demand
registration rights) to all Holders of its intention to effect such a
registration and shall, subject to Section 2.7(III)(b), include in such
registration all such Conversion Common Shares with respect to which the Company
has received written requests for inclusion therein within 15 days after the
receipt of the Company’s notice. The Company may postpone or withdraw
the filing or the effectiveness of a Piggyback Registration at any time in its
sole discretion.
(b) Priority on Primary
Registrations. If a Piggyback Registration is an underwritten
primary registration on behalf of the Company, and the managing underwriters
advise the Company in writing that in their opinion the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering without having an adverse effect on such offering, the
Company shall include in such registration (i) first, the securities the Company
proposes to sell, (ii) second, the Conversion Common Shares requested to be
included therein by the Holders, if any, pro rata among such Holders on the
basis of the number of shares requested to be registered by such Holders, and
(iii) third, other securities requested to be included in such registration pro
rata among the holders of such securities on the basis of the number of shares
requested to be registered by such holders or as such holders may otherwise
agree.
(c) Selection of
Underwriters. If any Piggyback Registration is an underwritten
primary offering, the Company shall have the right to select the managing
underwriter or underwriters to administer any such offering.
2.8 Discontinued
Disposition. Each Holder agrees by its acquisition of such
Conversion Common Shares that, upon receipt of a notice from the Company to the
address and facsimile number set forth on the signature pages hereto indicating
that an amendment or supplement to the Registration Statement or prospectus is
necessary or required, such Holder will forthwith discontinue disposition of
such Conversion Common Shares under the Registration Statement until such
Holder’s receipt of the copies of a supplemented prospectus and/or amended
Registration Statement or until it is advised in writing (the “Advice”) by the
Company that the use of the applicable prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such prospectus or
Registration Statement. In the event of a discontinued disposition
under this Section 2.8, the Company will use its commercially reasonable efforts
to ensure that the use of the prospectus may be resumed as promptly as is
practicable and to provide copies of the supplemented prospectus and/or amended
Registration Statement or the Advice as soon as possible in order to enable each
Holder to resume dispositions of the Conversion Common Shares. The
Company may provide appropriate stop transfer order instructions to enforce the
provisions of this Section.
2.9 Suspension of
Trading. At any time after the Conversion Common Shares are
registered pursuant to an effective registration statement, the Company may
deliver to the Holders of such Conversion Common Shares a certificate (the
“Suspension
Certificate”) signed by an executive officer of the Company stating that
the effectiveness of and sales of Conversion Common Shares under the
registration statement would require public disclosure of any transaction prior
to the time such disclosure might otherwise be required.
Beginning
after the receipt of a Suspension Certificate by Holders of Conversion Common
Shares, the Company may, in its discretion, require such Holders of Conversion
Common Shares to refrain from selling or otherwise transferring or disposing of
any Conversion Common Shares or other Company securities then held by such
Holders for a specified period of time that is customary under the circumstances
(not to exceed sixty (60) days). Notwithstanding the foregoing sentence, the
Company shall be permitted to cause Holders of Conversion Common Shares to so
refrain from selling or otherwise transferring or disposing of any Conversion
Common Shares or other securities of the Company on only two occasions during
each twelve (12) consecutive month period that the Registration Statement
remains effective for purposes of the registration rights granted hereunder. The
Company may impose stop transfer instructions to enforce any required agreement
of the Holders under this Section 2.9.
2.10 Indemnification and
Contribution.
(a) In
the event of any registration of any Conversion Common Shares under the
Securities Act pursuant to this Agreement, the Company shall indemnify and hold
harmless the Holders, their respective directors and officers, and each other
person (including each underwriter) who participated in the offering of such
Conversion Common Shares and each other person, if any, who controls the Holders
or such participating person within the meaning of the Securities Act
(collectively, the “Holder Indemnitees”) from and against any losses, claims,
damages or liabilities, joint or several, to which a Holder Indemnitee may
become subject under the Securities Act or any other statute or at common law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon: (i) any untrue statement or any
alleged untrue statement of any material fact contained or incorporated by
reference, on the effective date thereof, in any registration statement under
which such securities were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, any free writing prospectus or
any amendment or supplement thereto, (ii) any omission or any alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (iii) any other
violation of any applicable securities laws, and in each of the foregoing
circumstances shall pay for or reimburse the Holder Indemnitees for any legal or
any other expenses reasonably incurred by all or any one of the Holder
Indemnitees in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that, with
respect to any Holder Indemnitee, the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability has been found
by a court of competent jurisdiction to have been based upon (x) any actual
untrue statement or actual omission made or incorporated by reference in such
registration statement, preliminary prospectus, prospectus, free writing
prospectus or any amendment or supplement thereto solely in reliance upon and in
conformity with written information furnished to the Company by such Holder
Indemnitee specifically for use therein; or (y) any offer or
sale by any Holder occurring when the Company has provided notice to such Holder
as contemplated in Section 2.8 and 2.9 hereof. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of a
Holder Indemnitee, and shall survive the transfer of such securities by a Holder
Indemnitee.
(b) In
the event of any registration of any Conversion Common Shares under the
Securities Act pursuant to this Agreement, the Holders, by acceptance hereof,
agree to indemnify and hold harmless the Company, its directors and officers and
each other person, if any, who controls the Company within the meaning of the
Securities Act and any other person (including each underwriter) who
participated in the offering of such Conversion Common Shares (collectively, the
“Company Indemnitees”) against any losses, claims, damages or liabilities, joint
or several, to which the Company Indemnitees may become subject under the
Securities Act or any other statute or at common law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon: (i) any untrue statement or any alleged untrue statement of
any material fact contained or incorporated by reference, on the effective date
thereof, in any registration statement under which such securities were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein, any free writing prospectus, or any amendment or
supplement thereto, or (ii) any omission or any alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but in either case only to the extent that
such untrue statement or omission is (A) made in reliance on and in
conformity with any information furnished in writing by the Holder to the
Company concerning the Holder specifically for inclusion in the registration
statement, preliminary prospectus, prospectus, free writing prospectus or any
amendment or supplement thereto relating to such offering, and (B) is not
corrected by the Holder and distributed to the purchasers of shares within a
reasonable period of time.
(c) If
the indemnification provided for in this Section 2.10 from an indemnifying
party is unavailable to an indemnified party hereunder in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action. 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 any legal or other
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
(d) The
parties hereto agree that it would not be just and equitable if contribution
pursuant to Section 2.10(c)] 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 the immediately preceding paragraph. No person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation.
ARTICLE
III
REPRESENTATIONS, WARRANTIES
AND AGREEMENTS OF THE SELLERS
The
Sellers, jointly and not severally, hereby represent and warrant to, and agree
with, the Company, as of the date hereof, as follows:
3.1 Accredited
Investor. Each of the Sellers is an “Accredited Investor”
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
3.2 Acquiring Shares for Own
Account. Each of the Sellers and any nominee thereof is
acquiring the Preferred Shares from the Company for its own account solely for
the purpose of investment and without a view to any resale or other distribution
thereof in violation of the Securities Act.
3.3 Knowledge in
Business. Each of the Sellers has sufficient knowledge and
experience in business, financial and investment matters so as to be able to
evaluate the risks and merits of its investment in the Company and it is able
financially to bear the risks thereof.
3.4 No General
Solicitation. None of the Sellers nor any nominee thereof has
been offered any Preferred Shares by any means of general solicitation or
advertising, including any of the following:
|
a.
|
any
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media or broadcast over television or
radio,
|
or
|
b.
|
any
seminar or meeting whose attendees have been invited by general
solicitation or advertising.
|
3.5 Access to
Information. Each of the Sellers had access to such
information regarding the Company and its affairs as is necessary to enable it
to evaluate the merits and risks of an investment in the Preferred
Shares.
3.6 Seller
Acknowledgement. Each of the Sellers acknowledges that (i) the
Preferred Shares and the Conversion Common Shares (collectively, the
“Securities”) are all “restricted securities,” as defined in Rule 144 under the
Securities Act, (ii) a stop transfer order will be in effect and (iii) the
Securities cannot be sold, transferred, pledged or hypothecated in the absence
of an effective registration statement for such securities under the Securities
Act or an opinion of counsel satisfactory to the Company that registration is
not required under the Securities Act.
3.7 Restrictive
Legend. The Company has made each of the Sellers aware that a
legend will be placed on the share certificates stating that the Securities have
not been registered under the Securities Act and referring to the restrictions
on transferability and sale of the Securities.
Each
certificate for the Preferred Shares shall have conspicuously written, printed,
typed or stamped upon the face thereof, or upon the reverse thereof with a
conspicuous reference on the face thereof, the following legend:
“THE
SHARES OF PREFERRED STOCK REPRESENTED HEREBY AND THE SHARES OF COMMON STOCK
ISSUED UPON ANY CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES OR BLUE SKY LAWS,
AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT AND COMPLIANCE WITH SUCH STATE LAWS OR (II) AN APPLICABLE EXEMPTION
THEREFROM AND AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT
SUCH REGISTRATION IS NOT REQUIRED. THE SHARES OF COMMON STOCK ISSUED UPON ANY
OPTIONAL CONVERSION HEREOF ARE SUBJECT TO AN AGREEMENT BY THE REGISTERED HOLDER
WITH THE COMPANY NOT TO SELL SUCH SHARES FOR A PERIOD EQUAL TO THE EARLIER OF
(I) 180 DAYS FOLLOWING THE DATE OF ISSUANCE OF THE SHARES OF COMMON STOCK AND
(II) THE DATE THE SHARES OF COMMON STOCK WOULD HAVE OTHERWISE BEEN MANDATORILY
CONVERTED PURSUANT TO THEIR TERMS.”
3.8 Capacity; Authority;
Validity. Each of the Sellers has all necessary capacity,
power and authority to enter into this Agreement and to perform all the
obligations to be performed by each of the Sellers hereunder; this Agreement and
the consummation by the Sellers of the transactions contemplated hereby have
been duly and validly authorized by all necessary action of each of the Sellers;
this Agreement has been duly executed and delivered by each of the Sellers; and,
assuming the due execution and delivery of this Agreement by the Company, this
Agreement constitutes the legal, valid and binding obligation of each of the
Sellers enforceable against such Sellers in accordance with its terms, except
(i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights
generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
3.9 Consent and Approvals; No
Violation. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby will (a)
conflict with or result in any breach of any provision of the Sellers’
respective organizational or charter documents; (b) require any consent,
approval, authorization or permit of, or filing with or notification to; any
governmental entity other than those that have been made or obtained; (c) result
in a default (or give rise to any right of amendment, termination, cancellation,
consent, acceleration or loss of material benefit) under the terms, conditions
or provisions of any material agreement to which any Seller is a party or by
which any of the property or assets of any Seller may be bound, except in such
cases where the requisite waivers or consents have been obtained; or (d) violate
any judgment, order, writ, decree, law, rule or regulation applicable to any
Seller, in each case that would have a material adverse effect on the legality,
validity or enforceability of this Agreement or the performance by such party of
its obligations hereunder.
3.10 No
Litigation. There is no action, suit, proceeding or
investigation pending or, to the Company’s knowledge, currently threatened
against or affecting any of the Sellers which would adversely affect or
challenge the legality, validity or enforceability of this Agreement or the
transactions contemplated hereby.
3.11 Required
Information. Each Holder of Conversion Common Shares as to
which any registration is being effected shall furnish to the Company any other
information regarding such seller and the distribution of such securities as the
Company may from time to time reasonably request in writing.
3.12 Certain
Fees. No brokerage or finder’s fees are or will be payable by
the Sellers to any broker, finder, placement agent or bank with respect to the
transactions contemplated by this Agreement.
ARTICLE
IV
CONDITIONS TO
CLOSING
4.1 Mutual
Conditions. The respective obligations of each party to
consummate the sale and the purchase of the Shares shall be subject to the
satisfaction of each of the following conditions (any or all of which may be
waived by a particular party on behalf of itself in writing, in whole or in
part, to the extent permitted by applicable law):
(a) no
statute, rule, order, decree or regulation shall have been enacted or
promulgated, and no action shall have been taken, by any federal, state, local
or foreign political subdivision, court, administrative agency, board, bureau,
commission or department or other governmental authority or instrumentality
(each, a “Governmental Authority”) which temporarily, preliminarily or
permanently restrains, precludes, enjoins or otherwise prohibits the
consummation of the transactions contemplated by this Agreement or makes the
transactions contemplated hereby illegal;
(b) there
shall not be pending any suit, action or proceeding by any Governmental
Authority or any person seeking to restrain, preclude, enjoin or prohibit the
transactions contemplated by this Agreement; and
(c) all
other consents, authorizations, waivers, orders and approvals of, notices to,
filings or registrations with and the expiration of all waiting periods imposed
by, any third person, including any Governmental Authority, which are required
for or in connection with the execution and delivery by the parties of this
Agreement and the consummation the transactions contemplated by this Agreement
shall have been obtained or made, in form and substance reasonably satisfactory
to each of the parties, and shall be in full force and effect.
4.2 Company’s
Conditions. The obligation of the Company to consummate the
purchase of the Shares shall be subject to the satisfaction of the condition
(any or all of which may be waived by the Company in writing, in whole or in
part, to the extent permitted by applicable law) that the representations and
warranties of the Sellers contained in this Agreement shall be true and correct
in all material respects at and as of the Closing Date as if made on and as of
the Closing Date (except that representations made as of a specific date shall
be required to be true and correct as of such date only), and that all of the
Sellers shall consummate the sale of the Shares at the Closing.
4.3 Sellers’
Conditions. The obligation of the Sellers to consummate the
sale of the Shares to the Company shall be subject to the satisfaction of the
condition (which may be waived by the Sellers in writing, in whole or in part,
to the extent permitted by applicable law) that the representations and
warranties of the Company contained in this Agreement shall be true and correct
in all material respects at and as of the Closing Date as if made on and as of
the Closing Date (except that representations made as of a specific date shall
be required to be true and correct as of such date only).
ARTICLE
V
MISCELLANEOUS
5.1 Assignment. No
assignment of this Agreement or of any rights or obligations hereunder may be
made by either the Sellers or the Company (by operation of law or otherwise)
without the prior written consent of the other parties hereto and any attempted
assignment without the required consents shall be void.
5.2 Entire
Agreement. This Agreement (including the exhibits and
schedules hereto) constitutes the entire agreement by the parties hereto and
supersedes any other agreement, whether written or oral, that may have been made
or entered into between them relating to the matters contemplated
hereby.
5.3 Severability. Any
term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such invalidity or unenforceability, without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction.
5.4 Amendments and
Waivers. This Agreement may be amended, modified, superseded,
or canceled, and any of the terms, representations, warranties or covenants
hereof may be waived, only by written instrument executed by each of the parties
hereto or, in the case of a waiver, by the party waiving
compliance.
5.5 Captions; Counterparts,
Execution. The captions in this Agreement are for convenience
only and shall not be considered a part of or affect the construction or
interpretation of any provision of this Agreement. All references in
this Agreement to any “Section” are to the corresponding Section of this
Agreement unless otherwise specified. This Agreement may be executed in one or
more counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
5.6 Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York. Any legal action or proceeding in connection with this
Agreement or the performance hereof may be brought in the state and federal
courts located in the Borough of Manhattan, City, County and State of New York,
and the parties hereby irrevocably submit to the non-exclusive jurisdiction of
such courts for the purpose of any such action or proceeding.
5.7 Further
Assurances. Each of the parties shall, at all times, and from
time to time, upon the request of the other Party, do, execute, acknowledge and
deliver, or will cause to be done, executed, acknowledged and delivered, all
such further acts as may be required to consummate the transactions contemplated
in this Agreement as they are herein contemplated. Each party shall,
and shall use its commercially reasonable efforts to assure that any necessary
third party shall, execute and deliver such documents and do such other acts and
things as the other party may reasonably require for the purpose of giving to
that other party the full benefit of all the provisions of this Agreement, and
as may be reasonably required to complete the transactions contemplated in this
Agreement.
5.8 Expenses.Each party
shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the
preparation, execution, delivery and performance of this Agreement.
5.9 Announcements. The
consent of each party hereto shall be required prior to any public announcement
concerning the transactions contemplated hereby, except where such announcement
or other disclosure shall be required by law or regulation.
5.10 Termination
of Agreement. This Agreement may be terminated prior to the Closing
as follows:
(a) by
mutual written consent of the Sellers, and the Company; or
(b) at
the election of the Sellers or the Company on or after December 31, 2009 if the
Closing shall not have occurred by the close of business on such date, provided
that the terminating party is not then in material default of any of its
obligations hereunder.
[SIGNATURE
PAGES FOLLOW]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
DRYSHIPS
INC.
By:______________________________
Name: George
Xiradakis
Title: Director,
Chairman of the Special Committee
ENTREPRENEURIAL
SPIRIT HOLDINGS INC.
By:______________________________
Name:
Title:
ADVICE
INVESTMENTS S.A.
By:______________________________
Name:
Title:
MAGIC
MANAGEMENT INC.
By:______________________________
Name:
Title:
DEEP
SEA INVESTMENTS INC.
By:______________________________
Name:
Title:
Schedule
1
|
Seller
|
|
Shares
|
|
Percentage
|
|
|
|
|
|
|
1.
|
Entrepreneurial
Spirit Holdings Inc.
|
|
81.25
|
|
65%
|
|
|
|
|
|
|
2.
|
Advice
Investments S.A.
|
|
22.50
|
|
18%
|
|
|
|
|
|
|
3.
|
Magic
Management Inc.
|
|
17.50
|
|
14%
|
|
|
|
|
|
|
4.
|
Deep
Sea Investments Inc.
|
|
3.75
|
|
3%
|
|
|
|
|
|
|
|
TOTAL
|
|
125
|
|
100%
|
Exhibit
A
CERTIFICATE
OF DESIGNATIONS OF RIGHTS, PREFERENCES AND PRIVILEGES OF
SERIES A
CONVERTIBLE PREFERRED STOCK OF
DRYSHIPS
INC.
The
undersigned, Mr. George Economou and Ms. Iro Bei do hereby
certify:
1. That
they are the duly elected and acting Chief Executive Officer and Corporate
Secretary, respectively, of DryShips Inc., a Marshall Islands corporation (the
“Company”).
2. That
pursuant to the authority conferred by the Company’s Amended and Restated
Articles of Incorporation, the Company’s Board of Directors on July 9,
2009, adopted the following resolution designating and prescribing the relative
rights, preferences and limitations of the Company’s Series A Convertible
Preferred Stock:
RESOLVED,
that pursuant to the authority vested in the Board of Directors (the “Board”) of the
Company by the Company’s Amended and Restated Articles of Incorporation, the
Board does hereby establish a series of preferred stock, par value U.S. $0.01
per share, and the designation and certain powers, preferences and other special
rights of the shares of such series, and certain qualifications, limitations and
restrictions thereon, are hereby fixed as follows:
Section
1. Designation and
Amount. The shares of such series shall be designated as
“Series A Convertible
Preferred Stock”. The Series A Convertible Preferred Stock
shall have a par value of U.S. $0.01 per share, and the number of shares
constituting such series shall initially be One Hundred Million (100,000,000),
which number the Board may from time to time increase or decrease (but not below
the number then outstanding).
Section
2. Proportional
Adjustment. In the event the Company shall at any time after
the issuance of any share or shares of Series A Convertible Preferred Stock (i)
subdivide the outstanding Common Stock, (ii) combine the outstanding Common
Stock into a smaller number of shares, or (iii) declare any dividend or other
distribution payable on the Common Stock in shares of Common Stock, then in each
such case the Conversion Price (as defined below) and the Optional Conversion
Ratio (as defined below) in effect immediately prior thereto shall be (a) in the
case of a subdivision, proportionally decreased so that the number of shares of
Common Stock issuable upon conversion of each share of Series A Preferred Stock
shall be increased in proportion to such increase in the aggregate number of
shares of Common Stock outstanding, (b) in the case of a combination,
proportionally increased so that the number of shares of Common Stock issuable
upon conversion of each share of Series A Preferred Stock shall be decreased in
proportion to such decrease in the aggregate number of shares of Common Stock
outstanding, and (c) in the case of a stock dividend or distribution, decreased
by multiplying the Conversion Price or Conversion Ratio then in effect by a
fraction:
|
(X)
|
the
numerator which shall be the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance;
and
|
|
(Y)
|
the
denominator of which shall be the total number of shares of Common Stock
issued and outstanding immediately prior to the time of such issuance plus
the number of shares of Common Stock issuable in payment of such dividend
or distribution.
|
Section
3. Dividends and
Distributions.
Subject
to the prior and superior right of the holders of any shares of any series of
preferred stock ranking prior and superior to the shares of Series A Convertible
Preferred Stock with respect to dividends, the holders of shares of Series A
Convertible Preferred Stock shall accrue on a quarterly basis, when and as
declared by the Board out of funds legally available for the purpose, dividends
payable at the cumulative rate of 6.75% of the Original Purchase Price (as
defined in Section 4 below) of the then-outstanding shares of Series A
Convertible Preferred Stock per annum. The accrued dividends with
respect to any share of Series A Convertible Preferred Stock shall be payable to
the holder thereof immediately prior to the conversion (as described in
Sections 4 and 5 below) of such share in such number of additional shares
of Series A Convertible Preferred Stock (the “Dividend Shares”) as is equal to
the aggregate amount of accrued dividends on such share divided by the Original
Purchase Price. The Dividend Shares shall convert into Common Stock at the
Conversion Price (as defined in Section 4 below) on the same date as the
conversion into Common Stock of the last outstanding share of Series A
Convertible Preferred Stock that is not a Dividend Share; provided, however, that such
dividends shall be payable in cash solely with respect to any fiscal period for
which the Company declares cash dividends on its Common Stock.
Dividends
shall begin to accrue on outstanding shares of Series A Convertible Preferred
Stock from the date of issue of such shares of Series A Convertible Preferred
Stock. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Convertible
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding and eligible
for payment. The Board shall fix a record date for the determination
of holders of shares of Series A Convertible Preferred Stock entitled to receive
payment of a dividend or distribution. The identities of holders entitled to
dividends or distributions shall be as noted on the books of the
Company.
Section
4. Mandatory
Conversion. Shares of Series A Convertible Preferred Stock
will be mandatorily converted into shares of Common Stock, subject to adjustment
as contemplated in Section 2, as follows:
(i) upon
the contractual delivery date to Primelead of Primelead Drillship 1837,
twenty-five percent (25%) of the shares of Series A Convertible Preferred Stock
held by each holder as of the Mandatory Conversion Record Date shall be
converted at the Conversion Price;
(ii) upon
the contractual delivery date to Primelead of Primelead Drillship 1838,
twenty-five percent (25%) of the shares of Series A Convertible Preferred Stock
held by each holder as of the Mandatory Conversion Record Date shall be
converted at the Conversion Price;
(iii)
upon the contractual delivery date to Primelead of Primelead Drillship 1865,
twenty-five percent (25%) of the shares of Series A Convertible Preferred Stock
held by each holder as of the Mandatory Conversion Record Date shall be
converted at the Conversion Price;
(iv) upon
the contractual delivery date to Primelead of Primelead Drillship 1866,
twenty-five percent (25%) of the shares of Series A Convertible Preferred Stock
held by each holder as of the Mandatory Conversion Record Date shall be
converted at the Conversion Price;
(v) upon
any merger or consolidation of the Company, spin off or initial public offering
of Primelead, one-hundred percent (100%) of the shares of Series A Convertible
Preferred Stock held by each holder as of the Record Date shall be converted at
the Conversion Price; and
(vi) upon
an actual or constructive total loss or a cancellation of the purchase contract
by the Company with respect to a Primelead Drillship, twenty-five percent (25%)
of the shares of Series A Convertible Preferred Stock held by each holder as of
the Mandatory Conversion Record Date shall be converted at the Conversion
Price.
For the
purposes of this Section 4, the following terms shall have the meanings ascribed
to them:
“Conversion Price”
shall mean a price per share equal to one hundred and twenty-seven and a half
percent (127.5%) of the Original Purchase Price.
“Mandatory Conversion Record
Date” shall mean the business day immediately preceding the contractual
delivery date for the respective Primelead Drillship. The identities of holders
required to convert its shares of Series A Convertible Preferred Stock and the
amount of shares held by such holder shall be as noted on the books of the
Company.
“Original Purchase
Price” shall mean the daily dollar volume-weighted closing price per
share of the Common Stock on the Nasdaq Global Select Market for the seven (7)
trading days immediately preceding July 9, 2009.
“Primelead” shall mean
Primelead Shareholders Inc., a Marshall Islands corporation.
“Primelead Drillship”
shall mean any of Primelead Drillship 1837, Primelead Drillship 1838, Primelead
Drillship 1865 or Primelead Drillship 1866
“Primelead Drillship
1837” shall mean the ultra-deep water drillship owned indirectly by
Primelead and described as Hull No. 1837.
“Primelead Drillship
1838” shall mean the ultra-deep water drillship owned indirectly by
Primelead and described as Hull No. 1838.
“Primelead Drillship
1865” shall mean the ultra-deep water drillship owned indirectly by
Primelead and described as Hull No. 1865.
“Primelead Drillship
1866” shall mean the ultra-deep water drillship owned indirectly by
Primelead and described as Hull No. 1866.
Section
5. Optional
Conversion. Shares of Series A Convertible Preferred Stock may
be converted into shares of Common Stock at any time at the option of the holder
at a conversion rate of 1:0.70 (the “Optional Conversion Ratio”), subject to
adjustment as contemplated in Section 2; provided, however, that the
holder of any shares of Common Stock converted pursuant to this Section 5 may
not, directly or indirectly, offer, sell, agree to offer or sell, solicit offers
to purchase, grant any call option or purchase any put option with respect to,
pledge, borrow or otherwise dispose of any of the shares of Common Stock for a
period equal to the earlier of (i) 180 days following the date of issuance of
the Common Stock converted pursuant to this Section 5 and (ii) the date the
shares of Common Stock would have otherwise been mandatorily converted pursuant
to Section 4. No waiver of such minimum holding period may be granted
except by the unanimous consent of the audit committee of the Company’s Board of
Directors.
Section
6. Voting
Rights. The holders of shares of Series A Convertible
Preferred Stock shall have the following voting rights:
Each
share of Series A Convertible Preferred Stock shall entitle the holder thereof
to one vote on all matters submitted to a vote of the stockholders of the
Company .
Except as
otherwise provided herein or by law, the holders of shares of Series A
Convertible Preferred Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of stockholders of the
Company .
Except as
required by law, holders of Series A Convertible Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section
7. Reacquired
Shares. Any shares of Series A Convertible Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
preferred stock and may be reissued as part of a new series of preferred stock
to be created by resolution or resolutions of the Board, subject to the
conditions and restrictions on issuance set forth herein and, in the Articles of
Incorporation, as then amended.
Section
8. Liquidation, Dissolution or
Winding Up, Sale of All or Substantially All of Assets. Upon
any liquidation, dissolution or winding up of the Company, or sale of all or
substantially all of the Company’s assets, the holders of shares of Series A
Convertible Preferred Stock shall be entitled to receive one times the Original
Purchase Price (as defined in Section 4), plus any accrued and unpaid dividends,
before the balance of any proceeds shall be distributed to holders of shares of
Common Stock.
Section
9. No
Redemption. The shares of Series A Convertible Preferred Stock
shall not be redeemable.
Section
10. Ranking. The
Series A Convertible Preferred Stock shall rank senior to all other series of
the Company’s preferred stock as to the payment of dividends and the
distribution of assets, unless the terms of any such series shall provide
otherwise.
Section
11. Amendment. The
Articles of Incorporation of the Company shall not be further amended in any
manner which would materially alter or change the powers, preference or special
rights of the Series A Convertible Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of a majority of the then
outstanding shares of Series A Convertible Preferred Stock, voting separately as
a class.
Section
12. Fractional
Shares. Series A Convertible Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder’s fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Convertible Preferred Stock.
RESOLVED
FURTHER, that the President, Chief Executive Officer or any Vice President and
the Secretary or any Assistant Secretary of this Company be, and they hereby
are, authorized and directed to prepare and file a Certificate of Designation of
Rights, Preferences and Privileges in accordance with the foregoing resolution
and the provisions of Marshall Islands law and to take such actions as they may
deem necessary or appropriate to carry out the intent of the foregoing
resolution.”
REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
We
further declare under penalty of perjury that the matters set forth in the
foregoing Certificate of Designation are true and correct of our own
knowledge.
Executed
in Athens, Greece on July , 2009.
|
________________________________
George
Economou
Chief
Executive Officer
|
|
________________________________
Iro
Bei
Corporate
Secretary
|
|
|
23113-0002
#1013407