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17TH KM NATIONAL ROAD ATHENS-LAMIA & FINIKOS STREET
145 64 NEA KIFISIA
ATHENS, GREECE
• | The vessel acquisition proposal— to approve the proposed acquisition of four dry bulk carriers (the “vessel acquisition”) for an aggregate purchase price of $352,000,000, pursuant to the terms and conditions of four separate memoranda of agreement, which we collectively refer to as the “MOAs,” between Oceanaut and the several sellers, each dated as of August 20, 2008 and amended on September 5, 2008 (“vessel acquisition proposal” or “Proposal 1”); | |
• | The amendment proposal— to approve amendments to Oceanaut’s amended and restated articles of incorporation to remove the provisions that either terminate or are no longer relevant after the completion of an initial business combination (“amendment proposal” or “Proposal 2”); | |
• | The adjournment proposal —to adjourn the Special Meeting in the event that Oceanaut has not received the requisite shareholder vote to approve the vessel acquisition proposal and the amendment proposal (“adjournment proposal” or “Proposal 3”); and | |
• | to transact such other business as may properly come before the Special Meeting or any adjournment or postponement thereof. |
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17TH KM NATIONAL ROAD ATHENS-LAMIA & FINIKOS STREET
145 64 NEA KIFISIA
ATHENS, GREECE
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
• | The vessel acquisition proposal— to approve the proposed acquisition of four dry bulk carriers (the “vessel acquisition”) for an aggregate purchase price of $352,000,000, pursuant to the terms and conditions of four separate memoranda of agreement, which we collectively refer to as the “MOAs,” between Oceanaut and the several sellers, each dated as of August 20, 2008 and amended on September 5, 2008, and the transactions contemplated thereby (the “vessel acquisition proposal” or “Proposal 1”); | |
• | The amendment proposal— to approve amendments to Oceanaut’s amended and restated articles of incorporation to remove the provisions that either terminate or are no longer relevant after the completion of an initial business combination (“amendment proposal” or “Proposal 2”); | |
• | The adjournment proposal— to adjourn the special meeting in the event that Oceanaut has not received the requisite shareholder vote to approve the vessel acquisition proposal and the amendment proposal (“adjournment proposal” or “Proposal 3”); and | |
• | to consider and vote upon such other business as may properly come before the special meeting or any adjournment or postponement thereof. |
Chairman of the Board
September 9, 2008
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SHAREHOLDERS OF OCEANAUT, INC.
TO BE HELD ON OCTOBER 15, 2008
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Annex A | Memorandum of Agreement relating to the ACHILLES II dated August 20, 2008 between Raman Investments Ltd., a guaranteed nominee of Oceanaut, Inc., as buyer, and Achilles Management S.A., as seller (the“ACHILLES II MOA”). | |
Annex B | Memorandum of Agreement relating to the IRIS II dated August 20, 2008 between Gavial Marine Corporation, a guaranteed nominee of Oceanaut, Inc., as buyer, and Iris Marine Carriers S.A., as seller (the“IRIS II MOA”). | |
Annex C | Memorandum of Agreement relating to the MEDI CEBU dated August 20, 2008 between Tunmore Shipholding Co., a guaranteed nominee of Oceanaut, Inc., as buyer, and Sea Triumph Maritime S.A., as seller (the“MEDI CEBU MOA”). | |
Annex D | Memorandum of Agreement relating to the THREE STARS dated August 20, 2008 between Skelton Maritime Ltd., a guaranteed nominee of Oceanaut, Inc., as buyer, and Three Stars Maritime S.A., as seller (the“THREE STARS MOA”). | |
Annex E | Addendum No. 1 to the ACHILLES II MOA dated September 5, 2008. | |
Annex F | Addendum No. 1 to the IRIS II MOA dated September 5, 2008. | |
Annex G | Addendum No. 1 to the MEDI CEBU MOA dated September 5, 2008. | |
Annex H | Addendum No. 1 to the THREE STARS MOA dated September 5, 2008. | |
Annex I | Commercial Management Agreement dated September 5, 2008. | |
Annex J | Technical Management Agreement dated September 5, 2008. | |
Annex K | Right of First Refusal and Corporate Opportunities Agreement dated September 5, 2008. | |
Annex L | Subordination Agreement dated September 5, 2008. | |
Annex M | Certificate of Designation of Mandatorily Redeemable Preferred Shares, Series A. | |
Annex N | Form of Amended and Restated Articles of Incorporation. |
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• | Oceanaut is a blank check company formed for the purpose of acquiring, through a merger, capital stock exchange, vessel acquisition, stock purchase or other similar business combination, vessels or one or more operating businesses in the shipping industry. Its principal executive offices are located in Athens, Greece. See the section entitled, “Information About Oceanaut.” | |
• | Pursuant to the terms and conditions of the several MOAs, each dated as of August 20, 2008 and amended on September 5, 2008, by and among Oceanaut and the several sellers, Oceanaut, through its nominated subsidiaries, will acquire four dry bulk carriers. Each vessel will then be commercially and technically managed by Excel Maritime Carriers Ltd. and Maryville Maritime Inc., a wholly-owned subsidiary of Excel Maritime Carriers Ltd., respectively. See the section entitled, “Proposal 1 — The Vessel Acquisition Proposal.” | |
• | After careful consideration, Oceanaut’s board of directors has determined that the proposed vessel acquisition meets all of the conditions to the consummation of a business combination described in the prospectus for Oceanaut’s initial public offering. | |
• | To fund the vessel acquisition and related fees and expenses, Oceanaut will use substantially all of the funds from the trust account, up to $196 million from its debt financing and $15 million in proceeds from the sale of its Series A preferred stock to Excel Maritime Carriers Ltd. In addition, Oceanaut has agreed to sell shares of its Series A preferred stock to Excel Maritime Carriers Ltd. in an amount sufficient to fund the balance of the aggregate purchase price of the vessels, to the extent that funds in the trust account are used to pay public shareholders that exercise their conversion rights. See the sections entitled, “The Vessel Acquisition Proposal — Acquisition Debt Financing” and “— Series A Preferred Stock Financing.” | |
• | The vessel acquisition will be approved if: (a) a majority of the shares of Oceanaut’s common stock issued in its initial public offering and outstanding as of the record date that are present or represented at the meeting vote in favor of the vessel acquisition proposal; and (b) no more than approximately 29.99% of the public shares (or 5,624,999 shares of common stock) both vote against the vessel acquisition proposal and properly exercise their conversion rights. See the section entitled, “The Vessel Acquisition Proposal — Required Vote.” | |
• | Pursuant to the several MOAs, the initial closing is expected to take place as soon as practicable after Oceanaut obtains the approval of its shareholders on the vessel acquisition proposal. In addition, subsequent closings will take place upon delivery of the vessels that have not been delivered at the initial closing. | |
• | The MOAs shall automatically terminate if Oceanaut has not obtained the approval of its shareholders on the vessel acquisition proposal on or before October 31, 2008, unless the parties mutually agree to extend such date. |
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Sources of Funds | Dollars | Uses of Funds | Dollars | |||||||
(In millions) | (In millions) | |||||||||
Debt financing(a) | $ | 196.00 | Vessel acquisition | $ | 352.00 | |||||
Funds from trust account(b) | 160.32 | Restricted cash balance(a) | 10.00 | |||||||
Series A Preferred stock issue(c) | 15.00 | Deferred underwriting fees | 4.50 | |||||||
Legal fees and expenses(d) | 1.25 | |||||||||
Printing and mailing expenses(d) | 0.07 | |||||||||
Accounting fees and expenses(d) | 0.03 | |||||||||
Marketing & other expenses(d) | 0.35 | |||||||||
Working capital | 3.12 | |||||||||
Total sources | $ | 371.32 | Total uses | $ | 371.32 |
(a) | Represents the maximum principal amount available to us under the credit facility to be obtained from HSH Nordbank AG and Commerzbank AG. Pursuant to the covenants under this credit facility, Oceanaut will be required to maintain $10 million as a cash reserve. | |
(b) | Represents the estimated amount of cash to be released from the trust account to us at the initial closing, assuming that no public shareholders exercise their conversion rights. Oceanaut has agreed to sell shares of its Series A preferred stock to Excel Maritime Carriers Ltd. in an amount sufficient to fund the balance of the aggregate purchase price of the vessels to be delivered at the initial closing and the vessels to be delivered at subsequent closings, to the extent that funds in the trust account are used to pay public shareholders that exercise their conversion rights. See the section entitled, “The Vessel Acquisition Proposal — Series A Preferred Stock Financing.” | |
(c) | Represents the proceeds received by us from our sale and issuance to Excel Maritime Carriers Ltd. of 1,500 shares of our Series A preferred stock at a purchase price of $10,000 per share to fund the balance of the aggregate purchase price of the vessels. See the section entitled, “The Vessel Acquisition Proposal — Series A Preferred Stock Financing.” | |
(d) | Represents estimated fees and expenses for legal and financial advisory services incurred and to be incurred in connection with the acquisition, including deferred legal fees of approximately $1.250 million, costs for marketing and other related services of approximately $0.355 million and other required printing and administrative costs totaling approximately $0.095 million. |
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• | Oceanaut’s shareholders have approved the vessel acquisition proposal; | |
• | public shareholders owning no more than approximately 29.99% of the Oceanaut public shares, or 5,624,999 shares of common stock, vote against the vessel acquisition proposal and properly exercise their conversion rights; and | |
• | the other conditions specified in the MOAs have been satisfied or waived. |
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Amount | ||||||||
and Nature | Percentage of | |||||||
of | Outstanding | |||||||
Beneficial | Common | |||||||
Name and Address of Beneficial Owner(1)(2) | Ownership(2) | Stock | ||||||
Excel Maritime Carriers Ltd.(3) | 4,640,625 | (9) | 18.9 | % | ||||
QVT Finance LP(4) | 3,454,685 | (10) | 14.1 | % | ||||
QVT Finance GP LLC(4) | 3,454,685 | (10) | 14.1 | % | ||||
Satellite Asset Management, L.P.(5) | 2,617,982 | (11) | 10.7 | % | ||||
Satellite Fund Management, LLC(5) | 2,617,982 | (11) | 10.7 | % | ||||
Fir Tree, Inc.(6) | 1,960,000 | (12) | 8.0 | % | ||||
Sapling LLC(6) | 1,880,438 | (12) | 7.7 | % | ||||
Andrew Weiss(7) | 1,860,400 | (13) | 7.6 | % | ||||
QVT Associates GP LLC(4) | 1,658,143 | (10) | 6.8 | % | ||||
QVT Overseas Ltd.(4) | 1,479,950 | (10) | 6.0 | % | ||||
Weiss Asset Management, LLC(7) | 1,365,412 | (13) | 5.6 | % | ||||
Millenco LLC(8) | 1,352,222 | (14) | 5.5 | % | ||||
Satellite Overseas Fund, Ltd.(5) | 1,264,575 | (11) | 5.1 | % | ||||
Gabriel Panayotides | 351,562 | (15) | 1.4 | % | ||||
Eleftherios (Lefteris) A. Papatrifon | 234,375 | (16) | 1.0 | % | ||||
George Agadakis | 234,375 | (17) | 1.0 | % | ||||
Ismini Panayotides | 117,188 | (18) | * | |||||
Jesper Jarlbaek | 0 | * | ||||||
Kevin G. Oates | 0 | * | ||||||
Yannis Tsamourgelis | 0 | * | ||||||
All directors and executive officers as a group (8 individuals) | 937,500 | (19) | 3.8 | % |
* | less than one (1%) percent |
(1) | Unless otherwise indicated, the business address of each of the individuals isc/o Excel Maritime Carriers Ltd., 17th Km National Road Athens-Lamia & Finikos Street, 145 64 Nea Kifisia, Athens, Greece. | |
(2) | Pursuant to the rules established under the Securities Exchange Act of 1934, as amended, the foregoing parties may be deemed to be a “group,” as defined in Section 13(d) of such Act, by virtue of their affiliation with Excel Maritime Carriers Ltd. | |
(3) | Argon S.A. is the record owner of 5,032,520 Class A common shares of Excel pursuant to a trust, whose beneficiary is Starling Trading Co. Ms. Ismini Panayotides, the daughter of our Chairman and our current Vice President of Project Development, is the sole shareholder of Starling Trading Co. Ms. Panayotides has no |
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power of voting or disposition of these shares and, with Mr. Panayotides, disclaims beneficial ownership of these shares. Kostas Katavatis has sole voting and dispositive control over the shares of Starling Trading Co. In addition, Ms. Mary Panayotides, the spouse of our Chairman, has sole voting and dispositive control over the shares of Boston Industries S.A., the record owner of approximately 39.5% of Excel’s outstanding shares of common stock (including both Class A and Class B). Mr. Panayotides disclaims beneficial ownership of these shares. | ||
(4) | The business address of such shareholder is 1177 Avenue of the Americas, 9th Floor, New York, New York 10036. | |
(5) | The business address of such shareholder is 623 Fifth Avenue, 19th Floor, New York, New York 10022. | |
(6) | The business address of such shareholder is 505 Fifth Avenue, 23rd Floor, New York, New York, 10017. | |
(7) | The business address of such shareholder is 29 Commonwealth Ave., Boston, Massachusetts 02116. | |
(8) | The business address of such shareholder is 666 Fifth Avenue, New York, New York 10103. | |
(9) | This amount excludes shares of common stock underlying warrants that are not currently exercisable and will not be exercisable prior to the consummation of the vessel acquisition. If such warrants were currently exercisable, the amount would be 8,890,625 and the percentage of outstanding common stock would be 36.2%. | |
(10) | Based on a Schedule 13D/A filed on May 22, 2008 with the SEC jointly by the following parties and indicating shared voting and dispositive power: QVT Financial LP (“QVT Financial”), QVT Financial GP LLC (“QVT Financial LLC”), QVT Overseas Ltd. (“QVT Overseas”), QVT Associates GP LLC (“QVT Associates”) and QVT Fund LP (“QVT Fund”). QVT Associates is the general partner of QVT Fund and several other funds (collectively, the “Funds”). QVT Financial LLC is the general partner of QVT Financial. QVT Financial acts as the investment manager for QVT Fund, the Funds and QVT Overseas. QVT Financial is also the investment manager for other entities, including a separate discretionary account managed for its client (the “Separate Account”). QVT Financial has the power to direct the vote and disposition of the shares of our common stock held by QVT Fund, each of the Funds, QVT Overseas and the Separate Account. QVT Overseas beneficially owns 1,479,950 shares of our common stock, the Funds together beneficially own an aggregate amount of 1,658,143 shares of our common stock and the Separate Account holds 316,592 shares of our common stock. Accordingly, QVT Financial may be deemed to be the beneficial owner of an aggregate amount of 3,454,685 shares of our common stock, consisting of the shares owned by QVT Overseas and each of the Funds and the shares held in the Separate Account. QVT Financial LLC, as General Partner of QVT Financial, may be deemed to beneficially own the same number of shares of our common stock reported by QVT Financial. QVT Associates, as General Partner of each of the Funds, may be deemed to be the beneficial owner of an aggregate amount of 1,658,143 shares of our common stock, consisting of the shares owned by the Funds. Daniel Gold, Lars Bader, Nicholas Brumm, Arthur Chu and Tracy Fu, are managing members of QVT Financial LLC and QVT Associates, and may be deemed to beneficially own the same number of shares of our common stock reported by QVT Financial, QVT Financial LLC and QVT Associates. Messrs. Gold, Woods and Pilgrim are directors of QVT Overseas and may be deemed to beneficially own the same number of shares of our common stock reported by QVT Overseas. In addition, QVT Overseas., QVT Associates, certain of the Funds own, and the Separate Account holds, an aggregate amount of 5,104,503 common stock purchase warrants. Each such warrant entitles the holder to purchase one share of our common stock at a price of $6.00 and become exercisable on the later of the our completion of a business combination or March 1, 2008. | |
(11) | Based on a Schedule 13G/A filed on March 18, 2008 with the SEC jointly by the following parties and indicating shared voting and dispositive power: (i) Satellite Fund II, L.P., Satellite Fund IV, L.P. (together, the “Delaware Funds”) over which Satellite Advisors, L.L.C. (“Satellite Advisors”) has discretionary trading authority, as general partner, and (ii) Satellite Overseas Fund, Ltd., The Apogee Fund Ltd., Satellite Overseas Fund V, Ltd., Satellite Overseas Fund VI, Ltd., Satellite Overseas Fund VII, Ltd., Satellite Overseas Fund VIII, Ltd. and Satellite Overseas Fund IX, Ltd. (collectively, the “Offshore Funds” and together with the Delaware Funds, the “Satellite Funds”) over which Satellite Asset Management, L.P. (“Satellite Asset Management”) has discretionary investment trading authority. The general partner of Satellite Asset Management is Satellite Fund Management, L.P. (“Satellite Fund Management”). Satellite Fund Management and Satellite Advisors each share the same Executive Committee, composed of Lief Rosenblatt, Gabriel Nechamkin and Mark |
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Sonnino that make investment decisions on behalf of the Satellite Funds and investment decisions made by such Executive Committee, when necessary, are made through approval of a majority of the Executive Committee members. | ||
(12) | Based on a Schedule 13G/A filed on February 14, 2008 with the SEC jointly by the following parties and indicating shared voting and dispositive power: Sapling, LLC (“Sapling”), Fir Tree Capital Opportunity Master Fund, L.P. (“Fir Tree Capital”) and Fir Tree, Inc. (“Fir Tree”). Sapling may direct the vote and disposition of 1,880,438 shares of our common stock, while Fir Tree Capital may direct the vote and disposition of 79,562 shares of our common stock. Fir Tree, as the investment manager of each of Sapling and Fir Tree Capital, has been granted investment discretion over the shares of common stock held by Sapling and Fir Tree Capital. Accordingly, Fir Tree may be deemed to be the beneficial owner of an aggregate amount of 1,960,000 shares of our common stock as of the date hereof, consisting of the shares owned by Sapling and Fir Tree Capital. Jeffrey D. Tannenbaum and Andrew Fredman have voting control for Fir Tree, Sapling and Fir Tree Capital. | |
(13) | Based on a Schedule 13G/A filed on March 19, 2008 with the SEC jointly by the following parties and indicating shared voting and dispositive power: Weiss Asset Management, LLC (“Weiss Management”), Weiss Capital LLC and Andrew Weiss. Shares reported herein for Weiss Management include shares beneficially owned by a private investment partnership of which Weiss Management is the sole general partner. Shares reported herein for Mr. Weiss represent (i) shares beneficially owned by a private investment partnership of which Weiss Asset Management is the sole general partner and which may be deemed to be controlled by Mr. Weiss, who is the Managing Member of Weiss Management and (ii) shares beneficially owned a private investment corporation of which Mr. Weiss is the Managing Member of the investment manager of that private investment corporation. Accordingly, Mr. Weiss may be deemed to be the beneficial owner of the shares of our common stock beneficially owned by Weiss Management. | |
(14) | Based on a Schedule 13G filed on April 14, 2008 with the SEC jointly by Millenco LLC, Millennium Management LLC and Israel A. Englander, the foregoing parties share voting and dispositive control over the shares. Based on such Schedule 13G, Mr. Israel Englander is the managing member of Millennium Management LLC, which is the manager of Millenco LLC. | |
(15) | This amount excludes shares of common stock underlying warrants that are not currently exercisable and will not be exercisable prior to the consummation of the vessel acquisition. If such warrants were currently exercisable, the amount would be 576,562 and the percentage of outstanding common stock would be 2.3%. | |
(16) | This amount excludes shares of common stock underlying warrants that are not currently exercisable and will not be exercisable prior to the consummation of the vessel acquisition. If such warrants were currently exercisable, the amount would be 384,375 and the percentage of outstanding common stock would be 1.6%. | |
(17) | This amount excludes shares of common stock underlying warrants that are not currently exercisable and will not be exercisable prior to the consummation of the vessel acquisition. If such warrants were currently exercisable, the amount would be 384,375 and the percentage of outstanding common stock would be 1.6%. | |
(18) | This amount excludes shares of common stock underlying warrants that are not currently exercisable and will not be exercisable prior to the consummation of the vessel acquisition. If such warrants were currently exercisable, the amount would be 192,188 and the percentage of outstanding common stock would be less than one (1%) percent. | |
(19) | This amount excludes shares of common stock underlying warrants that are not currently exercisable and will not be exercisable prior to the consummation of the vessel acquisition. If such warrants were currently exercisable, the amount would be 1,537,500 and the percentage of outstanding common stock would be 6.3%. |
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Common Stock | Warrants | |||||||||||||||||||||||||||||||
Amount | Current | Unrealized | Amount | Current | Unrealized | |||||||||||||||||||||||||||
Owned | Paid(2) | Value(2)(5) | Profit(2) | Owned | Paid(2) | Value (2)(3)(5) | Profit(2) | |||||||||||||||||||||||||
Excel Maritime Carriers Ltd.(1) | 4,640,625 | $ | 9,018,750 | $ | 37,125,000 | $ | 28,106,250 | 2,250,000 | $ | 0 | 0 | (3) | 0 | |||||||||||||||||||
1,125,000 | 0 | 832,500 | (4) | 832,500 | ||||||||||||||||||||||||||||
2,000,000 | 2,000,000 | 1,480,000 | (4) | (520,000 | ) | |||||||||||||||||||||||||||
Gabriel Panayotides | 351,562 | 1,875 | 2,812,496 | 2,810,621 | 225,000 | 0 | 0 | (3) | 0 | |||||||||||||||||||||||
Eleftherios (Lefteris) A. Papatrifon | 234,375 | 1,250 | 1,875,000 | 1,873,750 | 150,000 | 0 | 0 | (3) | 0 | |||||||||||||||||||||||
George Agadakis | 234,375 | 1,250 | 1,875,000 | 1,873,750 | 150,000 | 0 | 0 | (3) | 0 | |||||||||||||||||||||||
Ismini Panayotides | 117,188 | 625 | 937,504 | 936,879 | 75,000 | 0 | 0 | (3) | 0 | |||||||||||||||||||||||
5,578,125 | $ | 9,023,750 | $ | 44,625,000 | $ | 35,601,250 | 5,975,000 | $ | 2,000,000 | $ | 2,312,500 | $ | 312,500 |
(1) | Argon S.A. is the record owner of 5,032,520 shares of Class A common stock of Excel pursuant to a trust, whose beneficiary is Starling Trading Co. Ms. Ismini Panayotides, the daughter of our Chairman and our current Vice President of Project Development, is the sole shareholder of Starling Trading Co. Ms. Panayotides has no power of voting or disposition of these shares and, with Mr. Panayotides, disclaims beneficial ownership of these shares. Kostas Katavatis has sole voting and dispositive control over the shares of Starling Trading Co. In addition, Ms. Mary Panayotides, the spouse of our Chairman, has sole voting and dispositive control over the shares of Boston Industries S.A., the record owner of approximately 39.5% of Excel’s outstanding shares of common stock (including both Class A and Class B). Mr. Panayotides disclaims beneficial ownership of these shares. | |
(2) | These amounts are rounded to the nearest dollar. | |
(3) | These warrants acquired together with the founding shares of Oceanaut have an exercise price of $7.00 each, provided the share price exceeds $11.00; given that the share price as at the closing of September 5, 2008 was below $11.00 these warrants do not have any value. | |
(4) | These warrants have an exercise price of $6.00 per share. | |
(5) | Based on the closing sale price on the American Stock Exchange on September 5, 2008. |
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(a corporation in the development stage)
PRO FORMA CONDENSED COMBINED BALANCE SHEET (unaudited)
AS OF JUNE 30, 2008
(In thousands U.S. Dollars)
Additional | ||||||||||||||||||||||||||||
Pro-Forma | ||||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||||
Pro-Forma | (with 5,624,999 | |||||||||||||||||||||||||||
Adjustments | shares of | |||||||||||||||||||||||||||
Oceanaut, Inc. | (assuming no | Combined | common | Combined | ||||||||||||||||||||||||
as at June 30, | stock | (before stock | stock | (after stock | ||||||||||||||||||||||||
2008 | conversion) | conversion) | conversion) | conversion) | ||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||||||
Cash — balance before adjustments | $ | 288.1 | $ | $ | 288.1 | $ | $ | 288.1 | ||||||||||||||||||||
Cash — proceeds from issue of Series A Preferred shares | 15,000.0 | (1) | 15,000.0 | 47,000.0 | (1) | 62,000.0 | ||||||||||||||||||||||
Cash — released funds previously held in trust (working capital) | 1,000.0 | (2) | 1,000.0 | 1,000.0 | ||||||||||||||||||||||||
Cash — released funds previously held in trust (initial fleet) | 158,982.3 | (2) | 158,982.3 | 158,982.3 | ||||||||||||||||||||||||
Cash — drawdown of debt finance | 186,000.0 | (3) | 186,000.0 | 186,000.0 | ||||||||||||||||||||||||
Cash — issue costs of debt finance | (1,666.0 | )(3) | (1,666.0 | ) | (1,666.0 | ) | ||||||||||||||||||||||
Cash — payment for fees associated with filing the proxy | (1,700.0 | )(4) | (1,700.0 | ) | (1,700.0 | ) | ||||||||||||||||||||||
Cash — payment of deferred underwriting fees | (4,500.0 | )(5) | (4,500.0 | ) | (4,500.0 | ) | ||||||||||||||||||||||
Cash — payment to acquire initial fleet of vessels | (352,000.0 | )(6) | (352,000.0 | ) | (352,000.0 | ) | ||||||||||||||||||||||
Cash — payment to convert IPO units to cash (stock conversion) | 0.0 | (46,446.5 | )(9) | (46,446.5 | ) | |||||||||||||||||||||||
Cash and cash equivalents — sub total | 288.1 | 1,116.3 | 1,404.4 | 553.5 | 1,957.9 | |||||||||||||||||||||||
Prepaid expenses | 24.3 | 24.3 | 24.3 | |||||||||||||||||||||||||
Total current assets | 312.4 | 1,116.3 | 1,428.7 | 553.5 | 1,982.3 | |||||||||||||||||||||||
Fixed assets | ||||||||||||||||||||||||||||
Vessels | 352,000.0 | (6) | 352,000.0 | 352,000.0 | ||||||||||||||||||||||||
Other assets | ||||||||||||||||||||||||||||
Cash held in Trust Account | 159,982.3 | (159,982.3 | )(2) | 0.0 | 0.0 | |||||||||||||||||||||||
Restricted cash balance | 10,000.0 | (3) | 10,000.0 | 10,000.0 | ||||||||||||||||||||||||
Income tax receivable | 952.2 | 952.2 | 952.2 | |||||||||||||||||||||||||
Deferred proxy filing costs | 1,700.0 | (4) | 1,700.0 | 1,700.0 | ||||||||||||||||||||||||
Deferred debt finance upfront fee | 1,666.0 | (3) | 1,666.0 | 1,666.0 | ||||||||||||||||||||||||
Total other assets | 160,934.5 | (146,616.3 | ) | 14,318.2 | 0.0 | 14,318.2 | ||||||||||||||||||||||
TOTAL ASSETS | $ | 161,246.9 | $ | 206,500.0 | $ | 367,746.9 | $ | 553.5 | $ | 368,300.4 | ||||||||||||||||||
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Additional | ||||||||||||||||||||||||||||
Pro-Forma | ||||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||||
Pro-Forma | (with 5,624,999 | |||||||||||||||||||||||||||
Adjustments | shares of | |||||||||||||||||||||||||||
Oceanaut, Inc. | (assuming no | Combined | common | Combined | ||||||||||||||||||||||||
as at June 30, | stock | (before stock | stock | (after stock | ||||||||||||||||||||||||
2008 | conversion) | conversion) | conversion) | conversion) | ||||||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||||||
Accrued expenses | $ | 140.9 | $ | 781.3 | (8) | $ | 922.1 | $ | $ | 922.1 | ||||||||||||||||||
Debt — amount outstanding within one year | 26,000.0 | (3) | 26,000.0 | 26,000.0 | ||||||||||||||||||||||||
Total current liabilities | 140.9 | 26,781.3 | 26,922.1 | 0.0 | 26,922.1 | |||||||||||||||||||||||
Long-term liabilities | ||||||||||||||||||||||||||||
Debt — amount outstanding more than one year | 170,000.0 | (3) | 170,000.0 | 170,000.0 | ||||||||||||||||||||||||
Deferred underwriting fees | 4,500.0 | (4,500.0 | )(5) | 0.0 | 0.0 | |||||||||||||||||||||||
Total long term liabilities | 4,500.0 | 165,500.0 | 170,000.0 | 0.0 | 170,000.0 | |||||||||||||||||||||||
Common stock, subject to possible conversion | ||||||||||||||||||||||||||||
5,624,999 shares with $0,0001 par value, at conversion value of approximately $8.26 per share | 46,446.5 | (46,446.5 | )(7) | 0.0 | 0.0 | 0.0 | ||||||||||||||||||||||
Shareholders’ equity | ||||||||||||||||||||||||||||
Preferred stock, $0.0001 par value (authorised 1,000,000 shares) | ||||||||||||||||||||||||||||
6,200 shares issued and outstanding (1,500 shares in tranche 1 and 4,700 in tranche 2) | 0.0 | 0.0 | (1) | 0.0 | 0.0 | (1) | 0.0 | |||||||||||||||||||||
Common stock, $0.0001 par value (authorised 80,000,000 shares) | ||||||||||||||||||||||||||||
24,562,500 shares issued and outstanding (of which 5,624,999 shares subject to possible conversion) | 2.5 | 2.5 | (0.6 | )(9) | 1.9 | |||||||||||||||||||||||
Additional paid-in capital | 105,283.4 | 15,000.0 | (1) | 120,283.4 | 47,000.0 | (1) | 167,283.4 | |||||||||||||||||||||
(net of capital issuance expenses $11,159,118.46) | 44,580.0 | (7) | 44,580.0 | (44,579.4 | )(9) | 0.6 | ||||||||||||||||||||||
Retained earnings | ||||||||||||||||||||||||||||
Earnings (deficit) accumulated in the development stage | 4,873.7 | 1,866.5 | (7) | 6,740.1 | (1,866.5 | )(9) | 4,873.7 | |||||||||||||||||||||
(781.3 | )(8) | (781.3 | ) | (781.3 | ) | |||||||||||||||||||||||
Total stockholders’ equity | 110,159.5 | 60,665.2 | 170,824.8 | 553.5 | 171,378.3 | |||||||||||||||||||||||
�� | ||||||||||||||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 161,246.9 | $ | 206,500.0 | $ | 367,746.9 | $ | 553.5 | $ | 368,300.4 | ||||||||||||||||||
(1) | To record the receipt of proceeds from the issue of two tranches of Series A Preferred stock to Excel Maritime Carriers Inc. at $10,000 per share; to finance (i) acquisition of the initial fleet; (ii) possible conversion of 5,624,999 shares. | |
(2) | To record the reclassification of cash held in Trust Account to the Bank Account of Oceanaut. These funds will be used to finance the acquisition of the initial fleet, pay deferred underwriters’ fees ($4.5 million) and provide working capital ($1 million). | |
(3) | To record the receipt of proceeds from the debt financing taken in USD from HSH & Commerzbank. The purpose of this debt is to finance the vessel acquisition of the initial fleet; Oceanaut will pay to the lenders an upfront fee of 85 bps on the facility amount; pursuant to the covenants under this credit facility Oceanaut will be required to maintain $10 million as a cash reserve. | |
(4) | To record the payment of various estimated fees and expenses for legal and financial advisory services associated with preparing the proposed transaction and filing this proxy for the acquisition of the initial fleet; these fees will be capitalized on the Balance Sheet and amortised over future periods. This amount includes $1,250,000 for legal fees, $355,000 for marketing costs and sundry fees, $65,000 for proxy expenses and $30,000 for audit fees. | |
(5) | To record the payment of the deferred underwriting fees, which are payable upon the consummation of the proposed business combination. | |
(6) | To record the payment to the sellers for the acquisition of the initial fleet of vessels. | |
(7) | If all shareholders approve the business combination, the 5,624,999 shares of temporary equity will become permanent equity; the YTD interest part (approximately $1.9 million) included in the value of temporary equity and will be recognized as income. | |
(8) | To record accrued compensation due to our independent directors, from the start of their service until the initial closing date, which is payable upon the successful completion of the business combination, and accruals for general expenses. | |
(9) | To record the conversion of up to 5,624,999 shares of common stock (these shares will be cancelled after conversion). |
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Common Stock Warrants Units | ||||||||||||||||||||||||
Quarter Ended | High | Low | High | Low | High | Low | ||||||||||||||||||
September 30, 2007 | $ | 8.05 | $ | 7.51 | $ | 1.59 | $ | 1.02 | $ | 9.60 | $ | 8.55 | ||||||||||||
December 31, 2007 | $ | 8.75 | $ | 7.77 | $ | 2.52 | $ | 1.36 | $ | 11.20 | $ | 9.26 | ||||||||||||
March 31, 2008 | $ | 8.12 | $ | 7.61 | $ | 1.70 | $ | 0.30 | $ | 9.40 | $ | 7.96 | ||||||||||||
June 30, 2008 | $ | 7.97 | $ | 7.67 | $ | 1.30 | $ | 0.50 | $ | 9.07 | $ | 8.16 |
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• | locating and acquiring suitable vessels; | |
• | identifying and consummating acquisitions or joint ventures; | |
• | identifying reputable shipyards with available capacity and contracting with them for the construction of new vessels; | |
• | integrating any acquired vessels successfully with its existing operations; | |
• | enhancing its customer base; | |
• | managing its expansion; and | |
• | obtaining required financing, which could include debt, equity or combinations thereof. |
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• | Oceanaut’s earnings, financial condition and anticipated cash requirements; | |
• | delays in acquiring any or all of the vessels in its contracted fleet; | |
• | unexpected repairs to, or required capital expenditures on, vessels or drydocking costs in excess of amounts held in reserve; | |
• | additional acquisitions of vessels (other than its contracted fleet); | |
• | the loss of a vessel; | |
• | restrictions under its credit facility and in any future debt agreements; and | |
• | the provisions under Marshall Islands law affecting distributions to shareholders, which generally prohibits the payment of dividends other than from surplus (retained earnings and the excess of consideration received from the sale of shares above the par value of the shares) or while a company is insolvent or would be rendered insolvent by the payment of such dividend. |
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• | incur additional indebtedness; | |
• | create liens on its assets; | |
• | sell capital stock of its subsidiaries; | |
• | engage in mergers or acquisitions; | |
• | change the management of its vessels or terminate or materially amend the management agreement relating to each vessel; |
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• | sell its vessels; and | |
• | change the flag or class of the vessels. |
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• | crew strikesand/or boycotts; | |
• | marine disaster; | |
• | piracy; | |
• | environmental accidents; | |
• | cargo and property losses or damage; and | |
• | business interruptions caused by mechanical failure, human error, war, terrorism, political action in various countries or adverse weather conditions. |
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• | authorize our board of directors to issue “blank check” preferred stock without shareholder approval; | |
• | provide for a classified board of directors with staggered, three-year terms; | |
• | require a super-majority vote in order to amend the provisions regarding our classified board of directors with staggered, three-year terms; and | |
• | prohibit cumulative voting in the election of directors; |
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• | a majority of our board of directors must be independent directors; | |
• | the compensation of our chief executive officer must be determined or recommended by a majority of the independent directors or a compensation committee comprised solely of independent directors; and | |
• | our director nominees must be selected or recommended by a majority of the independent directors or a nomination committee comprised solely of independent directors. |
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• | demand for and production of dry bulk products; | |
• | the distance cargo is to be moved by sea; | |
• | global and regional economic and political conditions; | |
• | environmental and other regulatory developments; and | |
• | changes in seaborne and other transportation patterns, including changes in the distances over which cargo is transported due to geographic changes in where commodities are produced and cargoes are used. |
• | the number of newbuilding deliveries; |
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• | the scrapping rate of older vessels; | |
• | vessel casualties; | |
• | price of steel; | |
• | number of vessels that are out of service; | |
• | changes in environmental and other regulations that may limit the useful life of vessels; and | |
• | port or canal congestion. |
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• | on-board installation of automatic information systems, or AIS, to enhance vessel-to-vessel and vessel-to-shore communications; | |
• | on-board installation of ship security alert systems; | |
• | the development of vessel security plans; and | |
• | compliance with flag state security certification requirements. |
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• | discuss future expectations; | |
• | contain projections of future results of operations or financial condition; or | |
• | state other “forward-looking” information. |
• | the number and percentage of Oceanaut shareholders voting against the vessel acquisition proposal; | |
• | future operating or financial results; | |
• | expectations regarding the strength of the future growth of the shipping industry, including the rate of annual demand growth in the dry bulk shipping industry; | |
• | future payments of dividends and the availability of cash for payment of dividends; | |
• | Oceanaut’s expectations relating to dividend payments and forecasts of its ability to make such payments; | |
• | future acquisitions, business strategy and expected capital spending; | |
• | operating expenses, availability of crew, number of off-hire days, drydocking (beyond the disclosed reserve), survey requirements and insurance costs; | |
• | general market conditions and shipping industry trends, including charter rates and factors affecting supply and demand; | |
• | Oceanaut’s ability to repay its credit facility and grow using the available funds under its credit facility; | |
• | Oceanaut’s financial condition and liquidity, including its ability to obtain additional financing in the future (from warrant exercises or outside services) to fund capital expenditures, acquisitions and other general corporate activities; | |
• | Oceanaut’s ability to enter into long-term, fixed-rate charters; | |
• | changing interpretations of generally accepted accounting principles; | |
• | outcomes of litigation, claims, inquiries or investigations; | |
• | continued compliance with government regulations; | |
• | statements about industry trends; | |
• | general economic conditions; and | |
• | geopolitical events and regulatory changes. |
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• | approve the acquisition of four dry bulk carriers pursuant to the terms and conditions of the four MOAs, each dated as of August 20, 2008 and amended on September 5, 2008, by and between Oceanaut, through its nominated subsidiaries, and each of the sellers; | |
• | approve the amendment of Oceanaut’s amended and restated articles of incorporation to make the following changes: (1) “Article THIRD” of Oceanaut’s articles of incorporation would be amended by deleting the proviso at the end of the second sentence of “Article THIRD,” which deals with the dissolution and liquidation of Oceanaut in the event that Oceanaut does not consummate a business combination within the required time period, (2) “Article THIRD” of Oceanaut’s articles of incorporation would be further amended by deleting the third sentence of “Article THIRD,” which contains the requirement that all amendments to “Article THIRD” be approved by all of Oceanaut’s public shareholders, (3) “Article FIFTH” of Oceanaut’s articles of incorporation would be amended so that the text of the first paragraph and paragraphs A, B, C, D, E and G of “Article FIFTH” would be deleted in their entirety and paragraph F of “Article FIFTH” would be revised to remove the “F” designation from the beginning of the paragraph, (4) “Article FIFTH” would be amended as an additional protective provision to require the affirmative vote or consent of the holders of sixty-six and two-thirds percent (662/3%) of Oceanaut’s issued and outstanding shares of common stock to amend any provision of “Article FIFTH” and (5) the number designations of the remaining articles would be adjusted accordingly; and | |
• | approve the adjournment of the special meeting in the event that Oceanaut has not received the requisite shareholder vote to approve the vessel acquisition proposal and the amendment proposal. |
• | has unanimously determined that the vessel acquisition is, from a financial point of view, fair to, and in the best interests of, Oceanaut and its shareholders; | |
• | has unanimously determined that the consideration to be paid by Oceanaut in connection with the vessel acquisition is fair to its current shareholders from a financial point of view and the fair market value of the four dry bulk carriers being acquired is greater than 80% of the value of the net assets of Oceanaut at the time of the execution of the MOAs; | |
• | has unanimously approved the vessel acquisition, the amendments to the amended and restated articles of incorporation and all transaction agreements required to consummate such transactions; | |
• | has unanimously approved the adjournment proposal, if presented; and | |
• | unanimously recommends that the holders of Oceanaut common stock vote (i) “FOR” the vessel acquisition proposal, (ii) “FOR” the amendment proposal, and (iii) “FOR” the adjournment proposal, if presented. |
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• | You can vote by signing and returning the enclosed proxy card. If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card, but do not give instructions on how to vote your shares, your shares will be voted, as recommended by the Oceanaut board, “FOR” the vessel acquisition proposal, “FOR” the amendment proposal and “FOR” the adjournment proposal. | |
• | You can attend the special meeting and vote in person. Oceanaut will give you a ballot when you arrive, however, you must get a proxy from the broker, bank or other nominee that is the record holder of your shares. That is the only way Oceanaut can be sure that your broker, bank or other nominee has not already voted your shares. |
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• | affirmatively vote against approval of the vessel acquisition proposal; | |
• | demand that your shares of Oceanaut common stock be converted into cash in accordance with the procedures described in this proxy statement; and | |
• | ensure that your bank or broker complies with the procedures described in the next paragraph. |
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Amount | ||||||||
and Nature | ||||||||
of | Percentage of | |||||||
Beneficial | Outstanding | |||||||
Name and Address of Beneficial Owner(1)(2) | Ownership(2) | Common Stock | ||||||
Excel Maritime Carriers Ltd.(3) | 4,640,625 | (9) | 18.9 | % | ||||
QVT Finance LP(4) | 3,454,685 | (10) | 14.1 | % | ||||
QVT Finance GP LLC(4) | 3,454,685 | (10) | 14.1 | % | ||||
Satellite Asset Management, L.P.(5) | 2,617,982 | (11) | 10.7 | % | ||||
Satellite Fund Management, LLC(5) | 2,617,982 | (11) | 10.7 | % | ||||
Fir Tree, Inc.(6) | 1,960,000 | (12) | 8.0 | % | ||||
Sapling LLC(6) | 1,880,438 | (12) | 7.7 | % | ||||
Andrew Weiss(7) | 1,860,400 | (13) | 7.6 | % | ||||
QVT Associates GP LLC(4) | 1,658,143 | (10) | 6.8 | % | ||||
QVT Overseas Ltd.(4) | 1,479,950 | (10) | 6.0 | % | ||||
Weiss Asset Management, LLC(7) | 1,365,412 | (13) | 5.6 | % | ||||
Millenco LLC(8) | 1,352,222 | (14) | 5.5 | % | ||||
Satellite Overseas Fund, Ltd.(5) | 1,264,575 | (11) | 5.1 | % | ||||
Gabriel Panayotides | 351,562 | (15) | 1.4 | % | ||||
Eleftherios (Lefteris) A. Papatrifon | 234,375 | (16) | 1.0 | % | ||||
George Agadakis | 234,375 | (17) | 1.0 | % | ||||
Ismini Panayotides | 117,188 | (18) | * | |||||
Jesper Jarlbaek | 0 | * | ||||||
Kevin G. Oates | 0 | * | ||||||
Yannis Tsamourgelis | 0 | * | ||||||
All directors and executive officers as a group (8 individuals) | 937,500 | (19) | 3.8 | % |
* | less than one (1%) percent. | |
(1) | Unless otherwise indicated, the business address of each of the individuals isc/o Excel Maritime Carriers Ltd., 17th Km National Road Athens-Lamia & Finikos Street, 145 64 Nea Kifisia, Athens, Greece. | |
(2) | Pursuant to the rules established under the Securities Exchange Act of 1934, as amended, the foregoing parties may be deemed to be a “group,” as defined in Section 13(d) of such Act, by virtue of their affiliation with Excel Maritime Carriers Ltd. | |
(3) | Argon S.A. is the record owner of 5,032,520 Class A common shares of Excel pursuant to a trust, whose beneficiary is Starling Trading Co. Ms. Ismini Panayotides, the daughter of our Chairman and our current Vice President of Project Development, is the sole shareholder of Starling Trading Co. Ms. Panayotides has no power of voting or disposition of these shares and, with Mr. Panayotides, disclaims beneficial ownership of these shares. Kostas Katavatis has sole voting and dispositive control over the shares of Starling Trading Co. In addition, Ms. Mary Panayotides, the spouse of our Chairman, has sole voting and dispositive control over the shares of Boston Industries S.A., the record owner of approximately 39.5% of Excel’s outstanding shares of |
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common stock (including both Class A and Class B). Mr. Panayotides disclaims beneficial ownership of these shares. | ||
(4) | The business address of such shareholder is 1177 Avenue of the Americas, 9th Floor, New York, New York 10036. | |
(5) | The business address of such shareholder is 623 Fifth Avenue, 19th Floor, New York, New York 10022. | |
(6) | The business address of such shareholder is 505 Fifth Avenue, 23rd Floor, New York, New York, 10017. | |
(7) | The business address of such shareholder is 29 Commonwealth Ave., Boston, Massachusetts 02116. | |
(8) | The business address of such shareholder is 666 Fifth Avenue, New York, New York 10103. | |
(9) | This amount excludes shares of common stock underlying warrants that are not currently exercisable and will not be exercisable prior to the consummation of the vessel acquisition. If such warrants were currently exercisable, the amount would be 8,890,625 and the percentage of outstanding common stock would be 36.2%. | |
(10) | Based on a Schedule 13D/A filed on May 22, 2008 with the SEC jointly by the following parties and indicating shared voting and dispositive power: QVT Financial LP (“QVT Financial”), QVT Financial GP LLC (“QVT Financial LLC”), QVT Overseas Ltd. (“QVT Overseas”), QVT Associates GP LLC (“QVT Associates”) and QVT Fund LP (“QVT Fund”). QVT Associates is the general partner of QVT Fund and several other funds (collectively, the “Funds”). QVT Financial LLC is the general partner of QVT Financial. QVT Financial acts as the investment manager for QVT Fund, the Funds and QVT Overseas. QVT Financial is also the investment manager for other entities, including a separate discretionary account managed for its client (the “Separate Account”). QVT Financial has the power to direct the vote and disposition of the shares of our common stock held by QVT Fund, each of the Funds, QVT Overseas and the Separate Account. QVT Overseas beneficially owns 1,479,950 shares of our common stock, the Funds together beneficially own an aggregate amount of 1,658,143 shares of our common stock and the Separate Account holds 316,592 shares of our common stock. Accordingly, QVT Financial may be deemed to be the beneficial owner of an aggregate amount of 3,454,685 shares of our common stock, consisting of the shares owned by QVT Overseas and each of the Funds and the shares held in the Separate Account. QVT Financial LLC, as General Partner of QVT Financial, may be deemed to beneficially own the same number of shares of our common stock reported by QVT Financial. QVT Associates, as General Partner of each of the Funds, may be deemed to be the beneficial owner of an aggregate amount of 1,658,143 shares of our common stock, consisting of the shares owned by the Funds. Daniel Gold, Lars Bader, Nicholas Brumm, Arthur Chu and Tracy Fu, are managing members of QVT Financial LLC and QVT Associates, and may be deemed to beneficially own the same number of shares of our common stock reported by QVT Financial, QVT Financial LLC and QVT Associates. Messrs. Gold, Woods and Pilgrim are directors of QVT Overseas and may be deemed to beneficially own the same number of shares of our common stock reported by QVT Overseas. In addition, QVT Overseas., QVT Associates, certain of the Funds own, and the Separate Account holds, an aggregate amount of 5,104,503 common stock purchase warrants. Each such warrant entitles the holder to purchase one share of our common stock at a price of $6.00 and become exercisable on the later of the our completion of a business combination or March 1, 2008. | |
(11) | Based on a Schedule 13G/A filed on March 18, 2008 with the SEC jointly by the following parties and indicating shared voting and dispositive power: (i) Satellite Fund II, L.P., Satellite Fund IV, L.P. (together, the “Delaware Funds”) over which Satellite Advisors, L.L.C. (“Satellite Advisors”) has discretionary trading authority, as general partner, and (ii) Satellite Overseas Fund, Ltd., The Apogee Fund Ltd., Satellite Overseas Fund V, Ltd., Satellite Overseas Fund VI, Ltd., Satellite Overseas Fund VII, Ltd., Satellite Overseas Fund VIII, Ltd. and Satellite Overseas Fund IX, Ltd. (collectively, the “Offshore Funds” and together with the Delaware Funds, the “Satellite Funds”) over which Satellite Asset Management, L.P. (“Satellite Asset Management”) has discretionary investment trading authority. The general partner of Satellite Asset Management is Satellite Fund Management, L.P. (“Satellite Fund Management”). Satellite Fund Management and Satellite Advisors each share the same Executive Committee, composed of Lief Rosenblatt, Gabriel Nechamkin and Mark Sonnino that make investment decisions on behalf of the Satellite Funds and investment decisions made by such Executive Committee, when necessary, are made through approval of a majority of the Executive Committee members. |
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(12) | Based on a Schedule 13G/A filed on February 14, 2008 with the SEC jointly by the following parties and indicating shared voting and dispositive power: Sapling, LLC (“Sapling”), Fir Tree Capital Opportunity Master Fund, L.P. (“Fir Tree Capital”) and Fir Tree, Inc. (“Fir Tree”). Sapling may direct the vote and disposition of 1,880,438 shares of our common stock, while Fir Tree Capital may direct the vote and disposition of 79,562 shares of our common stock. Fir Tree, as the investment manager of each of Sapling and Fir Tree Capital, has been granted investment discretion over the shares of common stock held by Sapling and Fir Tree Capital. Accordingly, Fir Tree may be deemed to be the beneficial owner of an aggregate amount of 1,960,000 shares of our common stock as of the date hereof, consisting of the shares owned by Sapling and Fir Tree Capital. Jeffrey D. Tannenbaum and Andrew Fredman have voting control for Fir Tree, Sapling and Fir Tree Capital. | |
(13) | Based on a Schedule 13G/A filed on March 19, 2008 with the SEC jointly by the following parties and indicating shared voting and dispositive power: Weiss Asset Management, LLC (“Weiss Management”), Weiss Capital LLC and Andrew Weiss. Shares reported herein for Weiss Management include shares beneficially owned by a private investment partnership of which Weiss Management is the sole general partner. Shares reported herein for Mr. Weiss represent (i) shares beneficially owned by a private investment partnership of which Weiss Asset Management is the sole general partner and which may be deemed to be controlled by Mr. Weiss, who is the Managing Member of Weiss Management and (ii) shares beneficially owned a private investment corporation of which Mr. Weiss is the Managing Member of the investment manager of that private investment corporation. Accordingly, Mr. Weiss may be deemed to be the beneficial owner of the shares of our common stock beneficially owned by Weiss Management. | |
(14) | Based on a Schedule 13G filed on April 14, 2008 with the SEC jointly by Millenco LLC, Millennium Management LLC and Israel A. Englander, the foregoing parties share voting and dispositive control over the shares. Based on such Schedule 13G, Mr. Israel Englander is the managing member of Millennium Management LLC, which is the manager of Millenco LLC. | |
(15) | This amount excludes shares of common stock underlying warrants that are not currently exercisable and will not be exercisable prior to the consummation of the vessel acquisition. If such warrants were currently exercisable, the amount would be 576,562 and the percentage of outstanding common stock would be 2.3%. | |
(16) | This amount excludes shares of common stock underlying warrants that are not currently exercisable and will not be exercisable prior to the consummation of the vessel acquisition. If such warrants were currently exercisable, the amount would be 384,375 and the percentage of outstanding common stock would be 1.6%. | |
(17) | This amount excludes shares of common stock underlying warrants that are not currently exercisable and will not be exercisable prior to the consummation of the vessel acquisition. If such warrants were currently exercisable, the amount would be 384,375 and the percentage of outstanding common stock would be 1.6%. | |
(18) | This amount excludes shares of common stock underlying warrants that are not currently exercisable and will not be exercisable prior to the consummation of the vessel acquisition. If such warrants were currently exercisable, the amount would be 192,188 and the percentage of outstanding common stock would be less than one (1%) percent. | |
(19) | This amount excludes shares of common stock underlying warrants that are not currently exercisable and will not be exercisable prior to the consummation of the vessel acquisition. If such warrants were currently exercisable, the amount would be 1,537,500 and the percentage of outstanding common stock would be 6.3%. |
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• | undesirable pricing levels; | |
• | lack of long-term fleet charters; | |
• | inadequate charter rates; | |
• | insufficient transaction sizes; |
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• | undesirable vessel ages; and | |
• | sellers deciding not to sell. |
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• | the quality of the vessels to be delivered at the initial closing and the vessels to be delivered at the subsequent closings, including the average vessel age of approximately four years; | |
• | the diversification among the fleet, specifically with respect to the ages, sizes and types of vessels; | |
• | the strong demand for raw materials and increasing demand from end users for long-term chartered-in capacity in recent years by developing countries, particularly China and India, that has resulted in robust growth for dry bulk shipping as well as increased charter rates; | |
• | Oceanaut’s management team’s knowledge of and experience in the shipping industry, particularly within the dry bulk sector; | |
• | Oceanaut’s expectation that it will pay attractive dividends on the common stock. Oceanaut intends to pay quarterly dividends to the holders of its shares of common stock in amounts that will allow it to retain a portion of its cash flows to reinvest in its fleet or vessel or fleet acquisitions, or for debt repayment and dry-docking costs, as determined by the board of directors. As currently contemplated, Oceanaut will pay a quarterly dividend of at least $0.28 per share, or $1.12 per share per year, payable with respect to the fourth quarter of 2008 and quarterly thereafter. The dividends will be supported by long-term, stable cash flows and enhanced by the 5,578,125 subordinated shares owned by Excel and our current directors and officers, which will not be entitled to the dividends until the second quarter of 2010. After this period, the subordinated shares will be entitled to dividends, provided that the shares of common stock have received any unpaid and accrued dividends; | |
• | the fact that the sellers are unaffiliated third parties; | |
• | the assessment by Oceanaut management that the data provided by Drewry supported the view that dry bulk vessel values were in an environment of further increases at the time the purchase price was agreed upon; and | |
• | the fact that the agreement to purchase the four vessels from the sellers was the result of a comprehensive review conducted by Oceanaut’s board (with the assistance of its financial and legal advisors) of the strategic alternatives available to Oceanaut. |
• | one or more sellers may fail to deliver a vessel to Oceanaut; | |
• | the volatility of charter rates and vessel values in the dry bulk sector; and | |
• | the risks and costs to Oceanaut if the vessel acquisition is not completed, including the need to locate another suitable business combination or arrangement. |
• | Our corporate shareholder, Excel Maritime Carriers Ltd., or Excel, is a shipping company specializing in the worldwide seaborne transportation of dry bulk cargoes. Excel was incorporated under the laws of the Republic of Liberia on November 2, 1988, and its Class A common stock trades on the New York Stock Exchange under the symbol “EXM.” Excel and its affiliates currently own approximately 22.7% of our |
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issued and outstanding shares of common stock, as well as own warrants to purchase an aggregate of 3,125,000 shares of our common stock at an exercise price of $6.00 per share and an aggregate of 2,850,000 shares of our common stock at an exercise price of $7.00 per share (provided the share price exceeds $11.00), which warrants become exercisable only upon our consummation of a business combination. For more information on Excel’s and its affiliates’ ownership of our securities, see the section entitled, “Principal Shareholders.” |
• | Furthermore, Excel, our officers and directorsand/or their respective affiliates, at any time prior to the special meeting, during a period when they are not then aware of any material nonpublic information regarding Oceanaut or its securities, may engage in open market purchases, as well as private purchases, of our securities. If Excel or our officers and directorsand/or their affiliates purchase securities from existing Oceanaut shareholders that are likely to vote against the transaction, or that are likely to elect to convert their shares, the probability that the business combination will succeed increases. | |
• | Messrs. Panayotides, Papatrifon and Agadakis are officers of both Excel and Oceanaut. Messrs. Panayotides and Molaris also serve as members of the board of directors of both Excel and Oceanaut. Under Marshall Islands law, each of these individuals has a fiduciary duty to us, and not to Excel or any of our other shareholders or affiliates, in acting as our officerand/or director. These fiduciary duties include the duty of loyalty, which requires that an officer or director must exercise his or her powers in good faith in the best interests of the corporation he or she serves and not in the director’s or officer’s own interest or in the interest of another person or an organization with which the officer or director is associated. Thus, except for the significant, indirect influence as it may derive from the overlap in our management or being a principal shareholder of Oceanaut, Excel is not entitled to any input or influence with respect to our affairs. | |
• | The table below shows the dollar value and the unrealized profit on all of the shares and warrants currently owned by Excel, our directors and officers, based on closing prices of Oceanaut’s common stock and warrants of $8.00 and $0.74, respectively, as of September 5, 2008. The portion of the table below headed “Common Stock” does not include the common stock underlying warrants covered in the portion of the table below headed “Warrants.” |
Common Stock | Warrants | |||||||||||||||||||||||||||||||
Amount | Current | Unrealized | Amount | Current | Unrealized | |||||||||||||||||||||||||||
Owned | Paid(2) | Value(2)(6) | Profit(2) | Owned | Paid(2) | Value(2)(3)(6) | Profit(2) | |||||||||||||||||||||||||
Excel Maritime Carriers Ltd.(1) | 4,640,625 | $ | 9,018,750 | $ | 37,125,000 | $ | 28,106,250 | 2,250,000 | $ | 0 | 0 | (3) | 0 | |||||||||||||||||||
1,125,000 | 0 | 832,500 | (4) | 832,500 | ||||||||||||||||||||||||||||
2,000,000 | 2,000,000 | 1,480,000 | (4) | (520,000 | ) | |||||||||||||||||||||||||||
Gabriel Panayotides | 351,562 | 1,875 | 2,812,496 | 2,810,621 | 225,000 | 0 | 0 | (3) | 0 | |||||||||||||||||||||||
Eleftherios (Lefteris)A. Papatrifon | 234,375 | 1,250 | 1,875,000 | 1,873,750 | 150,000 | 0 | 0 | (3) | 0 | |||||||||||||||||||||||
George Agadakis | 234,375 | 1,250 | 1,875,000 | 1,873,750 | 150,000 | 0 | 0 | (3) | 0 | |||||||||||||||||||||||
Ismini Panayotides | 117,188 | 625 | 937,504 | 936,879 | 75,000 | 0 | 0 | (3) | 0 | |||||||||||||||||||||||
5,578,125 | $ | 9,023,750 | $ | 44,625,000 | $ | 35,601,250 | 5,975,000 | $ | 2,000,000 | $ | 2,312,500 | $ | 312,500 |
(1) | Argon S.A. is the record owner of 5,032,520 shares of Class A common stock of Excel pursuant to a trust, whose beneficiary is Starling Trading Co. Ms. Ismini Panayotides, the daughter of our Chairman and our current Vice President of Project Development, is the sole shareholder of Starling Trading Co. Ms. Panayotides has no power of voting or disposition of these shares and, with Mr. Panayotides, disclaims beneficial ownership of these shares. Kostas Katavatis has sole voting and dispositive control over the shares of Starling Trading Co. In addition, Ms. Mary Panayotides, the spouse of our Chairman, has sole voting and dispositive control over the shares of Boston Industries S.A., the record owner of approximately 39.5% of Excel’s outstanding shares of common stock (including both Class A and Class B). Mr. Panayotides disclaims beneficial ownership of these shares. | |
(2) | These amounts are rounded to the nearest dollar. |
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(3) | These warrants acquired together with the founding shares of Oceanaut have an exercise price of $7.00 each, provided the share price exceeds $11.00; given that the share price as at the closing of September 5, 2008 was below $11.00 these warrants do not have any value. | |
(4) | These warrants have an exercise price of $6.00 per share. | |
(5) | Based on the closing sale price on the American Stock Exchange September 5, 2008. |
• | In the event that a business combination is not consummated within the required time period and Oceanaut is dissolved, based on the closing prices of Oceanaut’s common stock as of September 5, 2008, (i) the value of Excel’s shares and warrants, would be $5 million and $0, respectively, (ii) the value of Gabriel Panayotides’ shares and warrants, would each be $0, (iii) the value of Eleftherios A. Paptrifon’s shares and warrants, would each be $0, (iv) the value of George Agadakis’ shares and warrants, would each be $0, and (v) the value of Ismini Panayotides’ shares and warrants, would each be $0. | |
• | If Oceanaut dissolves and liquidates prior to the consummation of a business combination, Excel, pursuant to a written agreement executed in connection with the initial public offering, will be personally liable to ensure that the proceeds in the trust account are not reduced by the claims of any vendor or other party with which Oceanaut has contracted for services rendered or products sold to Oceanaut and claims of target businesses to the extent such claim actually reduces the amount of funds in the trust account. However, Excel has agreed to indemnify only if such party has not executed a valid and enforceable waiver of any rights or claims to the trust account. This agreement was entered into to reduce the risk that, in the event of Oceanaut’s dissolution and liquidation, the trust account is reduced by claims of creditors. However, we cannot assure you that Excel will be able to satisfy these indemnification obligations. If the vessel acquisition is completed, such obligations will terminate. | |
• | Because each of our independent directors will be entitled to receive $75,000 in cash per year for their board service, accruing pro rata from the start of their service on our board of directors and payable only upon the successful completion of a business combination, the financial interest of our independent directors could influence their motivation in selecting a target business. Thus, the financial interests of our independent directors may influence their motivation when determining whether a particular business combination is in our shareholders’ best interest and securing payment of their annual fee. | |
• | Approximately $6,018,750 of Excel’s investment in us will be lost if we do not consummate a business combination. This amount is comprised of consideration paid for the founding shares and founding warrants, insider units (500,000 of which do not have liquidation rights) and insider warrants. These amounts are in addition to (i) a maximum of $75,000 in fees and expenses for our dissolution and liquidation, which Excel has agreed to pay in the event we do not have sufficient funds outside of the trust account to pay for such expenses, and (ii) claims made against the trust account by creditors who have not executed waivers of claims. | |
• | In addition, in the event that we are unable to satisfy certain conditions under the MOA for the M/V MEDI CEBU, Excel has agreed to acquire that vessel for $72.5 million. As security for the performance of this obligation, Excel has to provide the seller of the M/V MEDI CEBU a bank guarantee in the amount of $7,250,000, which guarantee will remain in place until either we are able to satisfy our obligations under the governing MOA or Excel replaces such guarantee with $7,250,000 (equivalent to the 10% standard deposit for vessel purchases). | |
• | Oceanaut has entered into a Technical Management Agreement with Maryville Maritime Inc., as technical manager, or Maryville, of all vessels to be owned by all of Oceanaut’s subsidiaries. Oceanaut has also entered into a Commercial Management Agreement with Excel Maritime Carriers Ltd. as commercial manager, of all vessels to be owned by all of Oceanaut’s subsidiaries. Maryville is a wholly-owned subsidiary of, and provides technical management services to, Excel, a principal shareholder of Oceanaut. Gabriel Panayotides, Stamatis Molaris, Eleftherios Papatrifon and George Agadakis are each a directorand/or officer of Excel, and Mr. Agadakis is also the general manager of Maryville. |
• | Under the terms of the Technical Management Agreement, Maryville will perform certain duties that will include general administrative and support services necessary for the operation and employment of all |
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vessels to be owned by all subsidiaries of Oceanaut, including, without limitation, crewing and other technical management, insurance, freight management, accounting related to vessels, provisions, bunkering, operation and, subject to Oceanaut’s instructions, sale and purchase of vessels. Under the terms of the Technical Management Agreement, Maryville is entitled to receive a monthly fee of $18,000 per vessel, which fee may be increased annually by an amount equal to the percentage change in the CPI-U published by the United States Department of Labor from time to time. The Technical Management Agreement is for a term of three years, and is automatically renewable for consecutive periods of one year, unless either party is provided with three months’ written notice prior to the termination of such period. |
• | Under the terms of the Commercial Management Agreement, Excel will provide commercial management services to Oceanaut’s subsidiaries, which include, among other things, seeking and negotiating employment for the vessels owned by the subsidiaries in accordance with the guidelines set forth in the Commercial Management Agreement, for which Excel is entitled to receive a commission of 1.25% calculated on the collected gross hire/freight/demurrage payable when such amounts are collected. Since the vessels being purchased are currently subject to time charters, Excel will be entitled to such commissions once the current time charters expire and Excel seeks and negotiates new employment for the vessels. The Commercial Management Agreement is for a term of three years, and is automatically renewable for consecutive periods of one year, unless either party is provided with three months’ written notice prior to the termination of such period. | |
• | As contemplated by the prospectus relating to our initial public offering, prior to engaging Maryville, which is an affiliate of Excel, and Excel, we obtained bids for the technical and commercial management of the vessels from two unaffiliated, third parties. The third parties that provided bids to us provide technical and commercial management services to other shipping companies that are publicly-traded in the United States financial markets. These bids were considered by our board of directors, which ultimately decided to retain Maryville and Excel mainly due to their good reputation in the marketplace and their track record in managing Excel’s vessels. In addition, the fees proposed by Maryville and Excel in their respective bids were more favorable than the fees proposed by the unaffiliated third parties. The decision to retain Maryville and Excel was approved by Oceanaut’s board of directors, including the unanimous vote of our disinterested, “independent” directors, in accordance with the procedure contemplated by our prospectus. |
• | Because of the overlap between Excel and us in terms of business opportunities in the dry bulk sector of the shipping industry after the consummation of our business combination, we have entered into a right of first refusal and corporate opportunities agreement which provides that, commencing on the date of the consummation of our business combination and extending until the fifth anniversary of the date of such agreement, Excel will provide us with a right of first refusal on any of the (a) acquisition, operation, and chartering-in of any dry bulk carrier that is subject to a time or bareboat charter-out having a remaining duration, excluding any extension options, of at least four years, or a qualifying contract, and (b) sale or other disposition of any dry bulk carrier owned or chartered-in by Excel and that is subject to a qualifying contract, subject to certain permitted exceptions as outlined in such agreement. Decisions by us to release Excel to pursue any specific business opportunity that is subject to our right of first refusal will be made by a majority of our independent (i.e.,disinterested) directors. |
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Expected Employment | ||||||||||||||||||||||||
Term of | Daily Time | |||||||||||||||||||||||
Year | Fair Market | Time | Charter | |||||||||||||||||||||
Vessel | Seller | Type | Dwt | Built | Value | Charter | Hire Rate | |||||||||||||||||
ACHILLES II | Achilles Management S.A. | Panamax | 75,785 | 2004 | $ | 93,000,000 | 2 years | $ | 55,296 | (1) | ||||||||||||||
IRIS II | Marine Carriers S.A. | Panamax | 75,798 | 2004 | $ | 93,000,000 | 4 years | $ | 40,701 | (2) | ||||||||||||||
MEDI CEBU | Sea Triumph Maritime S.A. | Supramax | 52,464 | 2002 | $ | 72,500,000 | 3 years | $ | 42,000 | (3) | ||||||||||||||
THREE STARS | Three Stars Maritime S.A. | Panamax | 74,759 | 2005 | $ | 93,500,000 | 3 years | $ | 60,000 | (4) | ||||||||||||||
TOTAL | 278,806 | $ | 352,000,000 |
(1) | The daily charter hire rate under the time charter party for the M/V ACHILLES II is $90,000 for the first 120 days on hire, $65,000 for the next 365 days on hire, $34,000 for the next 210 days on hire and $60,000 for the next 65 days on hire; $55,296 represents the average charter rate until the end of the charter, assuming delivery on November 10. | |
(2) | The daily charter hire rate under the time charter party for the M/V IRIS II is $50,000 until February 28, 2009, $44,000 for the next 365 days on hire, $42,000 for the next 365 days on hire, $39,500 for the next 365 days on |
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hire and $34,500 for the next 365 days on hire; $40,701 represents the average charter rate until the end of the charter, assuming delivery on November 10. | ||
(3) | The daily average charter hire rate under the time charter party for the M/V MEDI CEBU until the end of the charter is $42,000, assuming delivery on December 10. | |
(4) | The daily average charter hire rate under the time charter party for the M/V THREE STARS until the end of the charter is $60,000, assuming delivery on December 10. |
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Million Tonnes | CAGR(1) | % Total Seaborne Trade | ||||||||||||||||||
2000 | 2007(p) | 2000-2007 | 2000 | 2007 | ||||||||||||||||
Dry bulk Cargo | ||||||||||||||||||||
Major Bulks | 1,249 | 1,809 | 5.4 | % | 19.1 | % | 20.2 | % | ||||||||||||
Coal | 539 | 769 | 5.0 | % | 8.2 | % | 8.6 | % | ||||||||||||
Iron Ore | 489 | 812 | 7.5 | % | 7.5 | % | 9.1 | % | ||||||||||||
Grain | 221 | 228 | 0.4 | % | 3.4 | % | 2.6 | % | ||||||||||||
Minor Bulks | 901 | 1,155 | 3.6 | % | 13.8 | % | 12.9 | % | ||||||||||||
Total Dry bulk | 2,150 | 2,964 | 4.6 | % | ||||||||||||||||
Container Cargo | 620 | 1,272 | 10.8 | % | 9.5 | % | 14.2 | % | ||||||||||||
Non Container/General Cargo | 720 | 820 | 1.9 | % | 11.0 | % | 9.2 | % | ||||||||||||
Total Dry Cargo | 3,490 | 5,056 | 5.4 | % | 53.4 | % | 56.6 | % | ||||||||||||
Liquid Cargo | 3,051 | 3,881 | 3.5 | % | 46.6 | % | 43.4 | % | ||||||||||||
TOTAL ALL CARGO | 6,541 | 8,937 | 4.5 | % | 100.0 | % | 100.0 | % |
(p) | Provisional. | |
(1) | Compound annual growth rate. |
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(CAGR — Percent)
(% change previous period)
GNP | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007(p) | ||||||||||||||||||||||||||||
Global Economy | 4.8 | 2.4 | 3.0 | 4.1 | 5.3 | 4.4 | 5.1 | 5.0 | ||||||||||||||||||||||||||||
USA | 3.8 | 0.3 | 1.6 | 2.7 | 3.9 | 3.1 | 2.9 | 2.2 | ||||||||||||||||||||||||||||
Europe | 3.4 | 1.7 | 1.1 | 1.1 | 2.1 | 1.8 | 3.0 | 2.7 | ||||||||||||||||||||||||||||
Japan | 2.8 | 0.4 | -0.3 | 1.8 | 2.7 | 1.9 | 2.4 | 2.1 | ||||||||||||||||||||||||||||
China | 8.0 | 7.5 | 8.3 | 10.0 | 10.1 | 10.4 | 11.6 | 11.9 | ||||||||||||||||||||||||||||
India | 5.1 | 4.4 | 4.7 | 7.4 | 7.0 | 9.1 | 9.8 | 9.3 |
(p) | Provisional. |
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(Million Tonnes)
(Million Tonnes)
CAGR (1) | ||||||||||||||||||||||||||||||||||||
2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2000/2007% | ||||||||||||||||||||||||||||
Coal | 539 | 587 | 590 | 619 | 650 | 675 | 709 | 769 | 5.0 | % | ||||||||||||||||||||||||||
Iron Ore | 489 | 503 | 544 | 580 | 644 | 715 | 759 | 812 | 7.5 | % | ||||||||||||||||||||||||||
Grain | 221 | 213 | 210 | 211 | 208 | 212 | 221 | 228 | 0.4 | % | ||||||||||||||||||||||||||
Minor Bulks | 901 | 890 | 900 | 957 | 1,025 | 1,049 | 1,103 | 1,155 | 3.6 | % | ||||||||||||||||||||||||||
Total | 2,151 | 2,193 | 2,244 | 2,367 | 2,526 | 2,651 | 2,793 | 2,964 | 4.6 | % | ||||||||||||||||||||||||||
Annual Change % | 8.3 | 2.0 | 2.3 | 5.5 | 6.7 | 4.9 | 5.3 | 5.9 |
(1) | Compound annual growth rate. |
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(Million Tonnes)
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(p) | Provisional |
(Million Tonnes)
Total Named | ||||||||||||||||||||||||||||||||||||||||
China | EU 15 | U.S. | Japan | S. Korea | Taiwan | India | Countries | Others | Total | |||||||||||||||||||||||||||||||
2000 | 127.2 | 163.3 | 101.8 | 106.4 | 43.1 | 16.9 | 26.9 | 585.6 | 262.1 | 847.7 | ||||||||||||||||||||||||||||||
2001 | 150.9 | 158.5 | 90.1 | 102.9 | 43.9 | 17.3 | 27.3 | 590.9 | 259.4 | 850.3 | ||||||||||||||||||||||||||||||
2002 | 182.2 | 158.7 | 91.6 | 107.7 | 45.4 | 18.2 | 28.8 | 632.6 | 271.3 | 903.9 | ||||||||||||||||||||||||||||||
2003 | 222.4 | 161.0 | 93.7 | 110.5 | 46.3 | 18.8 | 31.8 | 684.5 | 285.2 | 969.7 | ||||||||||||||||||||||||||||||
2004 | 280.5 | 169.1 | 99.7 | 112.7 | 47.5 | 19.6 | 32.6 | 761.7 | 307.0 | 1,068.7 | ||||||||||||||||||||||||||||||
2005 | 355.8 | 165.1 | 94.9 | 112.5 | 47.8 | 18.9 | 45.8 | 840.8 | 305.4 | 1,146.2 | ||||||||||||||||||||||||||||||
2006 | 422.6 | 173.2 | 98.6 | 116.2 | 48.4 | 20.0 | 49.5 | 928.5 | 321.5 | 1,250.0 | ||||||||||||||||||||||||||||||
2007 | 489.2 | 175.6 | 98.2 | 120.2 | 51.4 | 20.4 | 53.1 | 1008.1 | 336.2 | 1,344.3 | ||||||||||||||||||||||||||||||
CAGR %2000-2007 | 21.2 | % | 1.0 | % | -0.5 | % | 1.8 | % | 2.6 | % | 2.7 | % | 10.2 | % | 8.1 | % | 3.6 | % | 6.8 | % |
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(BillionTonne-Miles)
(BillionTonne-Miles)
CAGR(1) | ||||||||||||||||||||||||||||||||||||
2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2000/2007% | ||||||||||||||||||||||||||||
Coal | 2,831 | 3,082 | 3,098 | 3,250 | 3,412 | 3,544 | 3,547 | 3,845 | 4.5 | % | ||||||||||||||||||||||||||
Iron Ore | 2,690 | 2,766 | 2,990 | 3,192 | 3,525 | 3,899 | 4,097 | 4,383 | 7.2 | % | ||||||||||||||||||||||||||
Grain | 1,161 | 1,118 | 1,103 | 1,108 | 1,089 | 1,112 | 1,161 | 1,196 | 0.4 | % | ||||||||||||||||||||||||||
Minor Bulks | 4,457 | 4,404 | 4,452 | 4,724 | 5,059 | 5,172 | 5,431 | 5,697 | 3.6 | % | ||||||||||||||||||||||||||
Total | 11,139 | 11,370 | 11,643 | 12,274 | 13,085 | 13,727 | 14,236 | 15,121 | 4.5 | % |
(1) | Compound annual growth rate. | |
* | includestonne-mile demand for ships below 10,000 dwt. |
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(BillionTonne-Miles)
Category | Size Range - Dwt | |||
Handysize | 10-39,999 | |||
Handymax | 40-59,999 | |||
Panamax | 60-79,999 | |||
Post Panamax | 80-109,999 | |||
Capesize | 110-199,999 | |||
VLOC | 200,000 + |
• | Handysize. Handysize vessels have a carrying capacity of up to 30,000 dwt. These vessels are primarily involved in carrying minor bulk cargoes. Increasingly, ships of this type operate on regional trading routes, and may serve as trans-shipment feeders for larger vessels. Handysize vessels are well suited for small ports with length and draft restrictions. Their cargo gear enables them to service ports lacking the infrastructure for cargo loading and unloading. | |
• | Handymax. Handymax vessels have a carrying capacity of between 40,000 and 59,999 dwt. These vessels operate on a large number of geographically dispersed global trade routes, carrying primarily grains and minor bulks. Within the Handymax category there is also a sub-sector known asSupramax. Supramax bulk carriers are ships between 50,000 to 59,999 dwt, normally offering cargo loading and unloading flexibility with on-board cranes, while at the same time possessing the cargo carrying capability approaching |
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conventional Panamax bulk carriers. Hence, the earnings potential of a Supramax dry bulk carrier, when compared to a conventional Handymax vessel of 45,000 dwt, is greater. |
• | Panamax. Panamax vessels have a carrying capacity of between 60,000 and 79,999 dwt. These vessels carry coal, grains, and, to a lesser extent, minor bulks, including steel products, forest products and fertilizers. Panamax vessels are able to pass through the Panama Canal, making them more versatile than larger vessels. | |
• | Post Panamax. Typically between 80,000 and 109,999 dwt, they tend to be shallower and have a larger beam than a standard Panamax vessel with a higher cubic capacity. They have been designed specifically for loading high cubic cargoes from draught restricted ports. This type of vessel cannot transit the Panama Canal. | |
• | Capesize. Capesize vessels have carrying capacities 110,000 and 199,999 dwt. Only the largest ports around the world possess the infrastructure to accommodate vessels of this size. Capesize vessels are mainly used to transport iron ore or coal and, to a lesser extent, grains, primarily on long-haul routes. | |
• | VLOC. Very large ore carriers are in excess of 200,000 dwt and are a comparatively new sector of the dry bulk carrier fleet. VLOCs are built to exploit economies of scale on long-haul iron ore routes. |
Deadweight | Number of | % of Total Fleet | Total Capacity | % of Total Fleet | ||||||||||||||||
Size Category | Tonnes | Vessels | (Number) | (Million Dwt) | (Dwt) | |||||||||||||||
Handysize | 10-39,999 | 2,973 | 42.8 | 79.4 | 19.5 | |||||||||||||||
Handymax | 40-59,999 | 1,647 | 23.7 | 79.6 | 19.6 | |||||||||||||||
Panamax | 60-79,999 | 1,352 | 19.5 | 96.8 | 23.8 | |||||||||||||||
Post Panamax | 80-109,999 | 184 | 2.7 | 16.1 | 4.0 | |||||||||||||||
Capesize | 110-199,999 | 676 | 9.7 | 111.1 | 27.3 | |||||||||||||||
Vloc | 200,000+ | 107 | 1.5 | 23.9 | 5.9 | |||||||||||||||
Total | 6,939 | 100.0 | 406.9 | 100.0 |
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Orderbook as% of | ||||||||||||||||||||
Deadweight | Number of | Orderbook as% | Total Capacity _ | Existing Fleet - | ||||||||||||||||
Size Category | Tonnes | Vessels | of Existing Fleet - No | Million Dwt | Dwt | |||||||||||||||
Handysize | 10-39,999 | 739 | 24.9 | 23.3 | 29.3 | |||||||||||||||
Handymax | 40-59,999 | 837 | 50.8 | 46.9 | 58.9 | |||||||||||||||
Panamax | 60-79,999 | 203 | 15.0 | 14.9 | 15.4 | |||||||||||||||
Post Panamax | 80-109,999 | 437 | 237.5 | 37.8 | 234.8 | |||||||||||||||
Capesize | 110-199,999 | 595 | 88.0 | 101.2 | 91.1 | |||||||||||||||
Vloc | 200,000+ | 127 | 118.7 | 33.1 | 138.5 | |||||||||||||||
Total | 2,938 | 42.3 | 257.2 | 63.2 |
• | Delays in deliveries (slippage) | |
• | Availability of Funding/Re-Fund Guarantees |
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% of Scheduled 2007 Deliveries
which will be delivered Late
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Handysize | Handymax | Panamax | Capesize | Total | % of Fleet | |||||||||||||||||||||||||||||||||||||||
Year | No | Dwt | No | Dwt | No | Dwt | No | Dwt | No | Dwt | Scrapped | |||||||||||||||||||||||||||||||||
2000 | 50 | 1,192,000 | 40 | 1,454,000 | 11 | 667,000 | 4 | 452,000 | 105 | 3,765,000 | 1.4 | |||||||||||||||||||||||||||||||||
2001 | 62 | 1,408,000 | 40 | 1,492,000 | 28 | 1,870,000 | 3 | 401,000 | 133 | 5,171,000 | 1.9 | |||||||||||||||||||||||||||||||||
2002 | 64 | 1,556,000 | 25 | 938,000 | 18 | 1,200,000 | 8 | 997,000 | 115 | 4,691,000 | 1.6 | |||||||||||||||||||||||||||||||||
2003 | 25 | 597,000 | 29 | 1,103,000 | 7 | 465,000 | 2 | 248,000 | 63 | 2,413,000 | 0.8 | |||||||||||||||||||||||||||||||||
2004 | 5 | 113,000 | 0 | 0 | 1 | 95,000 | 1 | 123,000 | 7 | 331,000 | 0.1 | |||||||||||||||||||||||||||||||||
2005 | 4 | 109,000 | 4 | 165,000 | 3 | 202,000 | 2 | 247,000 | 13 | 723,000 | 0.2 | |||||||||||||||||||||||||||||||||
2006 | 21 | 474,843 | 10 | 380,439 | 8 | 538,785 | 2 | 296,000 | 41 | 1,690,067 | 0.5 | |||||||||||||||||||||||||||||||||
2007 | 9 | 198,792 | 1 | 33,527 | 2 | 141,346 | 0 | 0 | 12 | 373,665 | 0.1 |
• | Abareboat charteris the use of a vessel typically over long periods of time which can extend to a number of years. All voyage related costs, including bunker and port dues as well as all vessel operating expenses, such as day-to-day operations, maintenance, crewing and insurance, are the charterer’s responsibility. The owner of the vessel receives monthly charter hire payments on a per day basis and is responsible only for the payment of capital costs related to the vessel. Bareboat charter hire is payable every day and is analogous to debt repayment. Hire is not payable during periods when the vessel is out of service, either planned (or drydocking) or unplanned (e.g., engine breakdown). | |
• | Atime charteris the use of the vessel either for a number of months or years or for a trip between specific delivery and redelivery positions, known as a trip charter. The charterer pays all voyage related costs. The owner of the vessel receives semi-monthly charter hire payments on a per day basis and is responsible for the payment of all vessel operating expenses and capital costs of the vessel. | |
• | Asingleorspot voyage charteris the shipment of a specific amount and type of cargo on a load-port to discharge-port basis, subject to various cargo handling terms. Most of these charters are of a single or spot voyage nature, as trading patterns do not encourage round-trip trading. The owner of the vessel receives one payment derived by multiplying the tonnes of cargo loaded on board by the agreed upon freight rate expressed on a per cargo ton basis. The owner is responsible for the payment of all expenses including voyage, operating and capital costs of the vessel. | |
• | Acontract of affreightment, or COA, is the shipment of multiple cargoes over the same route and enables the owner of the vessel, or COA holder, to nominate different ships to perform individual voyages. Essentially, the COA holder agrees to carry a specified amount of cargo during the term of the COA, which may last up to a number of years. All of a vessel’s operating, voyage and capital costs are borne by the COA holder. The freight rate is normally agreed on a per cargo ton basis. |
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(Index Points)
Note: The BSI replaced the BHMI on January 3, 2006, although the index has been calculated since July 1, 2005. |
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(U.S. Dollars per Day)
(U.S. Dollars per Day)
Handysize | Supramax | Panamax | Capesize | Vloc | ||||||||||||||||
Size Category | 26-28,000 | 50-55,000 | 70-75,000 | 170,000+ | 200,000+ | |||||||||||||||
DWT | 10-15 Years Old | 1-5 Years Old | 1-5 Years Old | 1-5 Years Old | 1-5 Years Old | |||||||||||||||
2000 | 7,371 | 9,433 | 11,063 | 18,021 | n/a | |||||||||||||||
2001 | 5,629 | 8,472 | 9,543 | 14,431 | n/a | |||||||||||||||
2002 | 4,829 | 7,442 | 9,102 | 13,608 | n/a | |||||||||||||||
2003 | 8,289 | 13,736 | 17,781 | 30,021 | n/a | |||||||||||||||
2004 | 14,413 | 31,313 | 36,708 | 55,917 | n/a | |||||||||||||||
2005 | 12,021 | 23,038 | 27,854 | 49,333 | n/a | |||||||||||||||
2006 | 12,558 | 21,800 | 22,475 | 45,646 | n/a | |||||||||||||||
2007 | 23,021 | 43,946 | 52,229 | 102,875 | n/a | |||||||||||||||
Jul-08 | 31,800 | 64,500 | 76,500 | 167,800 | 172,200 |
(1) | Average rate for July 2008. |
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(Million U.S. Dollars)
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(Million U.S. Dollars)
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• | a limited availability of market quotations for our securities; | |
• | a determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly resulting in a reduced level of trading activity in the secondary trading market for our common stock; | |
• | a limited amount of news and analyst coverage for our company; and | |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
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• | Because each of our independent directors will be entitled to receive $75,000 in cash per year for their board service, accruing pro rata from the start of their service on our board of directors and payable only upon the successful completion of a business combination, the financial interest of our independent directors could influence their motivation in selecting a target business. Thus, the financial interests of our independent directors may influence their motivation when determining whether a particular business combination is in our shareholders’ best interest and securing payment of their annual fee. | |
• | In the course of their business activities for Excel, our common officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to our company as well as to Excel. They may have conflicts of interest in determining to which entity a particular business opportunity should be presented. For this reason, we have entered into a business opportunity right of first refusal agreement with Excel until such time as we consummate our initial business combination, the terms of which are discussed further below. | |
• | Since Excel owns shares of our common stock which will be released from escrow (or from transfer restrictions under alock-up agreement in the case of the insider units purchased in the private placement) only if a business combination is successfully completed and owns warrants which will expire worthless if a business combination is not consummated, and upon the successful completion of a business combination, may earn substantial fees pursuant to arrangements with Excel for the provision of technical ship management services, as further discussed below, our board may have a conflict of interest in determining whether a particular target acquisition is appropriate to effect a business combination. The financial interests of Excel may influence the motivation of our common officers and directors in identifying and selecting a target acquisition, timely completing a business combination and securing the release of Excel’s stock. | |
• | Approximately $6,018,750 of Excel’s investment in us will be lost if we do not consummate a business combination. This amount is comprised of consideration paid for the founding shares and founding warrants, insider units (500,000 of which do not have liquidation rights) and insider warrants. These amounts are in addition to (i) a maximum of $75,000 in fees and expenses for our dissolution and liquidation, which Excel has agreed to pay in the event we do not have sufficient funds outside of the trust account to pay for such expenses, and (ii) claims made against the trust account by creditors who have not executed waivers of claims. Excel currently owns 18.9% of our common stock, which significant ownership interest may |
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dissuade potential acquirers from seeking control of us after we complete our initial business combination and buying our common stock at a price that our shareholders may deem beneficial. |
• | We will have the first opportunity to consider any business opportunities outside of the dry bulk sector. | |
• | Excel will have the first opportunity to consider any business opportunities within the dry bulk sector. |
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CONDITION AND RESULTS OF OPERATIONS
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• | staffing for financial, accounting and external reporting areas, including segregation of duties; | |
• | reconciliation of accounts; |
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• | proper recordation of expenses and liabilities in the period to which they relate; | |
• | proof of internal review and approval of accounting items; | |
• | documentation of key accounting assumptions, estimatesand/or conclusions; and | |
• | documentation of accounting policies and procedures. |
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(a corporation in the development stage)
PRO FORMA CONDENSED COMBINED BALANCE SHEET (unaudited)
AS OF JUNE 30, 2008
(In thousands U.S. Dollars)
Additional | ||||||||||||||||||||||||||||
Pro-Forma | ||||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||||
Pro-Forma | (with 5,624,999 | |||||||||||||||||||||||||||
Adjustments | shares of | |||||||||||||||||||||||||||
Oceanaut, Inc. | (assuming no | Combined | common | Combined | ||||||||||||||||||||||||
as at June 30, | stock | (before stock | stock | (after stock | ||||||||||||||||||||||||
2008 | conversion) | conversion) | conversion) | conversion) | ||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||||||
Cash — balance before adjustments | $ | 288.1 | $ | $ | 288.1 | $ | $ | 288.1 | ||||||||||||||||||||
Cash — proceeds from issue of Series A Preferred shares | 15,000.0 | (1) | 15,000.0 | 47,000.0 | (1) | 62,000.0 | ||||||||||||||||||||||
Cash — released funds previously held in trust (working capital) | 1,000.0 | (2) | 1,000.0 | 1,000.0 | ||||||||||||||||||||||||
Cash — released funds previously held in trust (initial fleet) | 158,982.3 | (2) | 158,982.3 | 158,982.3 | ||||||||||||||||||||||||
Cash — drawdown of debt finance | 186,000.0 | (3) | 186,000.0 | 186,000.0 | ||||||||||||||||||||||||
Cash — issue costs of debt finance | (1,666.0 | )(3) | (1,666.0 | ) | (1,666.0 | ) | ||||||||||||||||||||||
Cash — payment for fees associated with filing the proxy | (1,700.0 | )(4) | (1,700.0 | ) | (1,700.0 | ) | ||||||||||||||||||||||
Cash — payment of deferred underwriting fees | (4,500.0 | )(5) | (4,500.0 | ) | (4,500.0 | ) | ||||||||||||||||||||||
Cash — payment to acquire initial fleet of vessels | (352,000.0 | )(6) | (352,000.0 | ) | (352,000.0 | ) | ||||||||||||||||||||||
Cash — payment to convert IPO units to cash (stock conversion) | 0.0 | (46,446.5 | )(9) | (46,446.5 | ) | |||||||||||||||||||||||
Cash and cash equivalents — sub total | 288.1 | 1,116.3 | 1,404.4 | 553.5 | 1,957.9 | |||||||||||||||||||||||
Prepaid expenses | 24.3 | 24.3 | 24.3 | |||||||||||||||||||||||||
Total current assets | 312.4 | 1,116.3 | 1,428.7 | 553.5 | 1,982.3 | |||||||||||||||||||||||
Fixed assets | ||||||||||||||||||||||||||||
Vessels | 352,000.0 | (6) | 352,000.0 | 352,000.0 | ||||||||||||||||||||||||
Other assets | ||||||||||||||||||||||||||||
Cash held in Trust Account | 159,982.3 | (159,982.3 | )(2) | 0.0 | 0.0 | |||||||||||||||||||||||
Restricted cash balance | 10,000.0 | (3) | 10,000.0 | 10,000.0 | ||||||||||||||||||||||||
Income tax receivable | 952.2 | 952.2 | 952.2 | |||||||||||||||||||||||||
Deferred proxy filing costs | 1,700.0 | (4) | 1,700.0 | 1,700.0 | ||||||||||||||||||||||||
Deferred debt finance upfront fee | 1,666.0 | (3) | 1,666.0 | 1,666.0 | ||||||||||||||||||||||||
Total other assets | 160,934.5 | (146,616.3 | ) | 14,318.2 | 0.0 | 14,318.2 | ||||||||||||||||||||||
TOTAL ASSETS | $ | 161,246.9 | $ | 206,500.0 | $ | 367,746.9 | $ | 553.5 | $ | 368,300.4 | ||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||||||
Accrued expenses | $ | 140.9 | $ | 781.3 | (8) | $ | 922.1 | $ | $ | 922.1 | ||||||||||||||||||
Debt — amount outstanding within one year | 26,000.0 | (3) | 26,000.0 | 26,000.0 | ||||||||||||||||||||||||
Total current liabilities | 140.9 | 26,781.3 | 26,922.1 | 0.0 | 26,922.1 | |||||||||||||||||||||||
Long-term liabilities | ||||||||||||||||||||||||||||
Debt — amount outstanding more than one year | 170,000.0 | (3) | 170,000.0 | 170,000.0 | ||||||||||||||||||||||||
Deferred underwriting fees | 4,500.0 | (4,500.0 | )(5) | 0.0 | 0.0 | |||||||||||||||||||||||
Total long term liabilities | 4,500.0 | 165,500.0 | 170,000.0 | 0.0 | 170,000.0 | |||||||||||||||||||||||
Common stock, subject to possible conversion | ||||||||||||||||||||||||||||
5,624,999 shares with $0,0001 par value, at conversion value of approximately $8.26 per share | 46,446.5 | (46,446.5 | )(7) | 0.0 | 0.0 | 0.0 | ||||||||||||||||||||||
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Additional | ||||||||||||||||||||||||||||
Pro-Forma | ||||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||||
Pro-Forma | (with 5,624,999 | |||||||||||||||||||||||||||
Adjustments | shares of | |||||||||||||||||||||||||||
Oceanaut, Inc. | (assuming no | Combined | common | Combined | ||||||||||||||||||||||||
as at June 30, | stock | (before stock | stock | (after stock | ||||||||||||||||||||||||
2008 | conversion) | conversion) | conversion) | conversion) | ||||||||||||||||||||||||
Shareholders’ equity | ||||||||||||||||||||||||||||
Preferred stock, $0.0001 par value (authorised 1,000,000 shares) | ||||||||||||||||||||||||||||
6,200 shares issued and outstanding (1,500 shares in tranche 1 and 4,700 in tranche 2) | 0.0 | 0.0 | (1) | 0.0 | 0.0 | (1) | 0.0 | |||||||||||||||||||||
Common stock, $0.0001 par value (authorised 80,000,000 shares) | ||||||||||||||||||||||||||||
24,562,500 shares issued and outstanding (of which 5,624,999 shares subject to possible conversion) | 2.5 | 2.5 | (0.6 | )(9) | 1.9 | |||||||||||||||||||||||
Additional paid-in capital | 105,283.4 | 15,000.0 | (1) | 120,283.4 | 47,000.0 | (1) | 167,283.4 | |||||||||||||||||||||
(net of capital issuance expenses $11,159,118.46) | 44,580.0 | (7) | 44,580.0 | (44,579.4 | )(9) | 0.6 | ||||||||||||||||||||||
Retained earnings | ||||||||||||||||||||||||||||
Earnings (deficit) accumulated in the development stage | 4,873.7 | 1,866.5 | (7) | 6,740.1 | (1,866.5 | )(9) | 4,873.7 | |||||||||||||||||||||
(781.3 | )(8) | (781.3 | ) | (781.3 | ) | |||||||||||||||||||||||
Total stockholders’ equity | 110,159.5 | 60,665.2 | 170,824.8 | 553.5 | 171,378.3 | |||||||||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 161,246.9 | $ | 206,500.0 | $ | 367,746.9 | $ | 553.5 | $ | 368,300.4 | ||||||||||||||||||
(1) | To record the receipt of proceeds from the issue of two tranches of Series A Preferred stock to Excel Maritime Carriers Inc. at $10,000 per share; to finance (i) acquisition of the initial fleet; (ii) possible conversion of 5,624,999 shares. | |
(2) | To record the reclassification of cash held in Trust Account to the Bank Account of Oceanaut. These funds will be used to finance the acquisition of the initial fleet, pay deferred underwriters’ fees ($4.5m) and provide working capital ($1 million). | |
(3) | To record the receipt of proceeds from the debt financing taken in USD from HSH & Commerzbank. The purpose of this debt is to finance the vessel acquisition of the initial fleet; Oceanaut will pay to the lenders an upfront fee of 85 bps on the facility amount; pursuant to the covenants under this credit facility Oceanaut will be required to maintain $10 million as a cash reserve. | |
(4) | To record the payment of various estimated fees and expenses for legal and financial advisory services associated with preparing the proposed transaction and filing this proxy for the acquisition of the initial fleet; these fees will be capitalized on the Balance Sheet and amortised over future periods. This amount includes $1,250,000 for legal fees, $355,000 for marketing costs and sundry fees, $65,000 for proxy expenses and $30,000 for audit fees. | |
(5) | To record the payment of the deferred underwriting fees, which are payable upon the consummation of the proposed business combination. | |
(6) | To record the payment to the sellers for the acquisition of the initial fleet of vessels. | |
(7) | If all shareholders approve the business combination, the 5,624,999 shares of temporary equity will become permanent equity; the YTD interest part (approximately $1.9 million) included in the value of temporary equity, and will be recognized as income. | |
(8) | To record accrued compensation due to our independent directors, from the start of their service until the initial closing date, which is payable upon the successful completion of the business combination, and accruals for general expenses. | |
(9) | To record the conversion of up to 5,624,999 shares of common stock (these shares will be cancelled after conversion). |
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AFTER THE BUSINESS COMBINATION
Term of | Daily Time | |||||||||||||||||||||
Year | Fair Market | Time | Charter | |||||||||||||||||||
Vessel(1) | Buyer(2) | Type | Dwt | Built | Value(3) | Charter | Hire Rate | |||||||||||||||
ACHILLES II | Raman Investments Ltd. | Panamax | 75,785 | 2004 | $ | 93,000,000 | 2 years | $ | 55,296 | (4) | ||||||||||||
IRIS II | Gavial Marine Corporation | Panamax | 75,798 | 2004 | $ | 93,000,000 | 4 years | $ | 40,701 | (5) | ||||||||||||
MEDI CEBU | Tunmore Shipholding Co. | Supramax | 52,464 | 2002 | $ | 72,500,000 | 3 years | $ | 42,000 | (6) | ||||||||||||
THREE STARS | Skelton Maritime Ltd. | Panamax | 74,759 | 2005 | $ | 93,500,000 | 3 years | $ | 60,000 | (7) | ||||||||||||
TOTAL | 278,806 | $ | 352,000,000 |
(1) | Each vessel is currently registered in Panama, except for the M/V ACHILLES II, which is registered in Hong Kong. | |
(2) | These are the vessel-owning subsidiaries that will own and operate the vessels after the initial closing date. | |
(3) | Based on appraisals received from two independent, internationally-recognized ship appraisers. | |
(4) | The daily charter hire rate under the time charter party for the M/V ACHILLES II is $90,000 for the first 120 days on hire, $65,000 for the next 365 days on hire, $34,000 for the next 210 days on hire and $60,000 for the next 65 days on hire; $55,296 represents the average charter rate during 2009 calendar year, assuming delivery on November 10. | |
(5) | The daily charter hire rate under the time charter party for the M/V IRIS II is $50,000 until February 28, 2009, $44,000 for the next 365 days on hire, $42,000 for the next 365 days on hire, $39,500 for the next 365 days on hire and $34,500 for the next 365 days on hire; $40,701 represents the average charter rate until the end of the charter, assuming delivery on November 10. | |
(6) | The daily average charter hire rate under the time charter party for the M/V MEDI CEBU until the end of the charter is $42,000, assuming delivery on December 10. | |
(7) | The daily average charter hire rate under the time charter party for the M/V THREE STARS until the end of the charter is $60,000, assuming delivery on December 10. |
• | Capesize. Capesize vessels have carrying capacities of more than 100,000 deadweight tons (dwt). These vessels generally operate along long haul iron ore and coal trade routes. Only the largest ports around the world possess the infrastructure to accommodate vessels of this size. |
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• | Panamax. Panamax vessels have a carrying capacity of between 60,000 and 100,000 dwt. These vessels are designed to meet the physical restrictions of the Panama Canal locks (hence their name “Panamax” — the largest vessels able to transit the Canal, making them more versatile than larger vessels). These vessels carry coal, grains, and, to a lesser extent, minerals such as bauxite/alumina and phosphate rock. As the availability of capesize vessels has dwindled, panamaxes have also been used to haul iron ore cargoes. | |
• | Handymax/Supramax. These vessels have a carrying capacity of between 30,000 and 60,000 dwt. These vessels operate on a large number of geographically dispersed global trade routes, carrying primarily grains and minor bulks. The standard vessels are usually built with25-30 ton cargo gear, enabling them to discharge cargo where grabs are required (particularly industrial minerals), and to conduct cargo operations in countries and ports with limited infrastructure. This type of vessel offers good trading flexibility and can therefore be used in a wide variety of bulk and neobulk trades, such as steel products. | |
• | Handysize. Handysize vessels have a carrying capacity of up to 30,000 dwt. These vessels are almost exclusively carrying minor bulk cargo. Increasingly, ships of this type operate on regional trading routes, and may serve as trans-shipment feeders for larger vessels. Handysize vessels are well suited for small ports with length and draft restrictions. Their cargo gear enables them to service ports lacking the infrastructure for cargo loading and unloading. |
• | The Medi Cebu and Three Stars are under charters that are expected to be novated to Cargill, Incorporated (Cargill), by the time the vessels are delivered to us. Cargill is a privately-held, multinational corporation based in the United States. Cargill’s business activities include purchasing, processing, and distributing grain and other agricultural commodities, and the manufacture and sale of livestock feed and ingredients for processed foods and pharmaceuticals. Currently the second largest privately owned company in the United States, Cargill declared revenues of $120 billion and earnings of $3.64 billion for its 2008 fiscal year. | |
• | The Achilles II will be chartered to COSCO Bulk Carrier Americas Inc., a joint venture between COSCO Bulk Carrier Co. Ltd. (COSBULK) and COSCO Americas. COSBULK is one of the wholly-owned subsidiaries of the COSCO Group and is the largest dry bulk carrier operator in China. It currently owns and operates approximately 110 dry bulk carriers of all types, with a total deadweight tonnage of up to 6 million. | |
• | The Iris II will be chartered to Mitsui OSK Lines, Ltd. (MOL). MOL is a shipping company engaged in the ownership and operation of one of the largest fleets in the world, including dry bulk carriers. The company is headquartered in Tokyo, Japan, and is listed on the Tokyo Stock Exchange As of September 2, 2008, MOL had a market capitalization of approximately Japanese Yen 2.1 trillion, or approximately $19.2 billion based on current exchange rates. |
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Name | Age | Position | ||||
Gabriel Panayotides | 53 | Chairman, Chief Executive Officer, President and Class C Director | ||||
Eleftherios (Lefteris) A. Papatrifon | 38 | Chief Financial Officer and Treasurer | ||||
George Agadakis | 53 | Chief Operating Officer and Secretary | ||||
Ismini Panayotides | 26 | Vice President — Project Development | ||||
Jesper Jarlbaek | 51 | Class B Director | ||||
Stamatis Molaris | 47 | Class A Director | ||||
Kevin G. Oates | 45 | Class B Director | ||||
Yannis Tsamourgelis | 46 | Class A Director |
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• | on-board installation of automatic information systems (“AIS”), to enhance vessel-to-vessel and vessel-to-shore communications; | |
• | on-board installation of ship security alert systems; |
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• | the development of vessel security plans; and | |
• | compliance with flag state security certification requirements. |
Vessel | Next Scheduled Dry Dock | Estimated Cost | ||
ACHILLES II | January 19, 2009 | $750,000-$900,000 | ||
IRIS II | September 16, 2009 | $750,000-$900,000 | ||
MEDI CEBU | September 28, 2010 | $700,000-$850,000 | ||
THREE STARS | June 7, 2010 | $750,000-$900,000 |
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DIVIDENDS, RESERVES AND EXTRAORDINARY EXPENSES
• | dividends; | |
• | expenses and reserves for vessel upgrades, repairs and drydocking; | |
• | further vessel acquisitions; |
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• | principal payments on the new credit facilities; | |
• | reserves required by lenders under Oceanaut’s loan agreements; and | |
• | reserves as Oceanaut’s board of directors may from time to time determine are required for contingent and other liabilities and general corporate purposes. |
Charter Rate | ||||
Vessel | ($ per Day) | |||
Three Stars | $ | 60,000 | (1) | |
Achilles II | $ | 62,122 | (2) | |
Iris II | $ | 45,035 | (3) | |
Medi Cebu | $ | 42,000 | (4) |
(1) | The daily average charter hire rate under the time charter party for the M/V THREE STARS during calendar year 2009 is expected to be $60,000, assuming delivery on December 10. | |
(2) | The daily charter hire rate under the time charter party for the M/V ACHILLES II is $90,000 for the first 120 days on hire, $65,000 for the next 365 days on hire, $34,000 for the next 210 days on hire and $60,000 for the next 65 days on hire; $62,122 represents the expected average charter rate during calendar year 2009, assuming delivery on November 10. |
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(3) | The daily charter hire rate under the time charter party for the M/V IRIS II is $50,000 until February 28, 2009, $44,000 for the next 365 days on hire, $42,000 for the next 365 days on hire, $39,500 for the next 365 days on hire and $34,500 for the next 365 days on hire; $45,035 represents the expected average charter rate during calendar year 2009, assuming delivery on November 10. | |
(4) | The daily average charter hire rate under the time charter party for the M/V MEDI CEBU during calendar year 2009 is expected to be $42,000, assuming delivery on December 10. |
• | Interest expense on Oceanaut’s credit facilities. Oceanaut has assumed that: |
• | General and administrative expenses including directors’ fees, office rent, travel, communications, insurance, legal, auditing and investor relations, professional expenses, which Oceanaut expects will equal $2 million. | |
• | Operating expenses include the daily costs of running and maintaining the vessels (estimated at $4,400 per vessel per day) and technical management fees (at $18,000 per vessel per month). |
• | The aggregate purchase price of the vessels in the fleet is $352 million. | |
• | Oceanaut will borrow $196 million under its credit facility. | |
• | Estimated average vessel operating expenses for the initial fleet of $4,992 per vessel per calendar day which includes management fees, and commissions for all of the vessels payable to Oceanaut’s manager. |
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• | Oceanaut will calculate depreciation on the vessels on the straight-line method over the estimated useful life of each vessel, after taking into account its estimated residual value, from date of acquisition. Each vessel’s useful life is estimated as 25 years from the date originally delivered from the shipyard. Amortization comprises costs associated with drydocking of Oceanaut’s vessels. Oceanaut will capitalize the costs associated with drydockings as they occur and amortize these costs on a straight-line basis. | |
• | Scheduled drydocking and special surveys will occur for the Achilles II and the Iris II and will cost in total approximately $1.6 million. In addition, Oceanaut will build a reserve to accumulate funds for the forthcoming drydocking of the remaining two vessels. These estimates are based on historical costs that similar vessels have incurred in ship yards for similar types of maintenance. | |
• | Oceanaut’s first full calendar year of operations consists of 365 days and each of the vessels in the fleet will be owned by Oceanaut for 365 days. | |
• | Each of the vessels in the fleet upon delivery to Oceanaut will earn charter revenue as per the table above and Oceanaut’s charterers will timely pay charter hire when due. | |
• | Oceanaut will not receive any insurance proceeds or other income, except from interest income on its cash balance, which is assumed to accrue at an average rate of 2.5% per annum. | |
• | Oceanaut will not purchase or sell any vessels and none of the vessels will suffer a total loss or constructive total loss or suffer any reduced hire or unscheduled off-hire time. | |
• | Oceanaut will have no other cash expenses or liabilities other than its estimated ordinary cash expenses. | |
• | Oceanaut will qualify for the exemption available under Section 883 under the Code and will therefore not pay any U.S. federal income taxes. | |
• | Oceanaut will not incur any additional indebtedness. |
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Dividends, Reserves and Extraordinary Expenses during
Oceanaut’s First Full Calendar Year
With | ||||||||
Assuming no | Conversion of | |||||||
Stock | 5,624,999 | |||||||
Conversion | Shares | |||||||
(In thousands U.S. Dollars) | ||||||||
Gross Revenue | $ | 73,367.8 | $ | 73,367.8 | ||||
Less: Commissions | (3,668.4 | ) | (3,668.4 | ) | ||||
Net Revenue | 69,699.4 | 69,699.4 | ||||||
Less: Operating expenses(1) | (7,288.0 | ) | (7,288.00 | ) | ||||
Less: General and administrative expenses | (2,000.0 | ) | (2,000.0 | ) | ||||
Less: Amortisation of dry docking expenses(2) | (476.9 | ) | (476.9 | ) | ||||
Less: Depreciation and amortization | (13,852.6 | ) | (13,852.6 | ) | ||||
Less: Amortization of Deferred proxy filing costs(3) | (219.9 | ) | (219.9 | ) | ||||
Less: Amortization of Deferred debt finance upfront fee(4) | (215.5 | ) | (215.5 | ) | ||||
Less: Net interest expense(5) | (9,578.7 | ) | (9,564.9 | ) | ||||
Less: Dividends to Series A Preference shares outstanding(6)(7) | (915.0 | ) | (3,782.0 | ) | ||||
Net Income | $ | 35,152.6 | $ | 32,299.5 | ||||
Adjustments to reconcile net income to Estimated EBITDA: | ||||||||
Add: Dry docking expenses | 476.9 | 476.9 | ||||||
Add: Depreciation and amortization | 13,852.6 | 13,852.6 | ||||||
Add: Amortization of Deferred proxy filing costs | 219.9 | 219.9 | ||||||
Add: Amortization of Deferred debt finance upfront fee | 215.5 | 215.5 | ||||||
Add: Net interest expense | 9,578.7 | 9,564.9 | ||||||
Add: Dividends to Series A Preference shares outstanding | 915.0 | 3,782.0 | ||||||
ESTIMATED EBITDA(8) | $ | 60,411.4 | $ | 60,411.4 | ||||
Adjustments to reconcile estimated EBITDA to estimated cash available for distribution: | ||||||||
Less: Net interest expense | (9,578.7 | ) | (9,564.9 | ) | ||||
Less: Dividends to Series A Preferred shares outstanding | (915.0 | ) | (3,782.0 | ) | ||||
Less: Dry docking expenses and reserves | (2,347.4 | ) | (2,347.4 | ) | ||||
Less: Debt amortization | (26,000.0 | ) | (26,000.0 | ) | ||||
Plus: Beginning unrestricted cash balance(9) | 1,404.4 | 1,957.9 | ||||||
Forecasted Available Cash for Distribution | $ | 22,974.6 | $ | 20,675.0 | ||||
Less: Dividends to publicly held common shares outstanding(10)(11) | (21,262.5 | ) | (14,962.5 | ) | ||||
Ending Unrestricted Cash Balance | $ | 1,712.1 | $ | 5,712.5 | ||||
Restricted Cash(12) | 10,000.0 | 10,000.0 | ||||||
Total Ending Cash Balance Including Restricted Cash | $ | 11,712.1 | $ | 15,712.5 | ||||
(1) | Operating expenses include the daily costs of running and maintaining the vessels (estimated at $4,400 per vessel per day) and technical management fees (at $18,000 per vessel per month). | |
(2) | To record the amortization over a period of two and one-half years of the estimated capitalised dry docking costs assumed to be incurred in 2009, on the assumption that Achilles II and Iris II are delivered upon initial closing and their drydocking cost is $0.8 million (Jan 2009) and $0.8 million (Sep 2009) respectively. | |
(3) | To record the payment of various estimated fees and expenses for legal and financial advisory services associated with structuring the proposed transaction and preparing and filing this proxy statement for the acquisition of the initial fleet. These fees will be capitalised on the Balance Sheet and amortized over future periods. This amount includes $1,250,000 for legal fees, $355,000 for marketing costs and sundry fees, $65,000 for proxy expenses and $30,000 for audit fees. These costs have been amortized using the effective interest rate implied in the terms of the credit facility. | |
(4) | To record the receipt of proceeds from debt financing taken in USD from HSH & Commerzbank. The purpose of this debt is to finance the acquisition of the intial fleet; Oceanaut will pay to the lenders an upfront fee of 85 bps on the facility amount. Pursuant to the covenants under this credit facility Oceanaut will be required to maintain $10 million as a cash reserve. These costs have been amortised using the effective interest rate implied in the terms of the credit facility. |
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(5) | Represents payment of interest equal to LIBOR plus 165 bps on the average balance of the $196 million credit facility to be drawn from HSH & Commerzbank, net of interest income on cash and restricted cash balances at 2.5% per annum. LIBOR is assumed to be 3.85% on average. | |
(6) | Represents payment of dividend equal to3-month LIBOR plus 225 bps on $15m Series A Preferred Stock issued to Excel Maritime Carriers Inc. (tranche 1) to finance a portion of the aggregate purchase price for the acquisition of the initial fleet of vessels. | |
(7) | Represents payment of dividend equal to3-month LIBOR plus 225 bps on $47m Series A Preferred Stock issued to Excel Maritime Carriers Inc. (tranche 2) to finance the balance of the aggregate purchase price of the vessels to the extent that funds in the trust account are used to pay for up to 5,624,999 shares held by public shareholders that exercise their conversion rights.. | |
(8) | EBITDA represents net income before dry docking expenses, interest, taxes, depreciation and amortization. EBITDA is not a recognized measure under U.S. GAAP, but is a measure that management believes is highly correlated to cash and useful for the purpose of reconciling expected cash earnings to cash available for distribution. Additionally, EBITDA will be used as a supplemental financing measure by management and by external users of our financial statements, such as investors. Due to the expectation that Oceanaut’s anticipated capitalization will include approximately 41% debt, management believes that EBITDA is useful to shareholders as a way to evaluate Oceanaut’s ability to service its debt, meet working capital requirements and undertake capital expenditures. EBITDA should not be considered an alternative to net income, operating income, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. EBITDA excludes some, but not all, items that affect net income and operating income, and these measures may vary among other companies. Therefore, EBITDA as presented above may not be comparable to similarly titled measures of other companies. | |
(9) | Does not include $10 million of cash balance that Oceanaut will be required to maintain as a cash reserve pursuant to the covenants under its credit facility, but assumes Oceanaut has drawn down the remaining $1 million of cash that can be distributed from the Trust Account in order to cover its working capital requirements in accordance with the terms described in the IPO prospectus. The beginning unrestricted cash balance assumes that (i) no Oceanaut shareholders exercise their conversion rights in connection with the vessel acquisition, (ii) Oceanaut receives $15 million in cash proceeds from the issue of 1,500 Series A Preferred shares to Excel Maritime Carriers Inc., (iii) Oceanaut has approximately $160 million cash available in the Trust Account to fund working capital requirements and the acquisition of vessels, (iv) Oceanaut draws down $196 million under its term credit facility, (v) Oceanaut pays approximately $7.9 million in transaction related expenses in connection with the vessel acquisition (includes the deferred underwriting fee from Oceanaut’s IPO), (vi) Oceanaut pays $352 million to acquire its initial fleet of vessels. Based on these assumptions, the beginning unrestricted cash balance is calculated as follows: |
Cash — balance before adjustments (June 30, 2008) | $ | 288.1 | 288.1 | |||||
Cash — released funds previously held in trust (working capital) | 1,000.0 | 1,000.0 | ||||||
Cash — proceeds from issue of Series A Preferred shares | 15,000.0 | 62,000.0 | ||||||
Cash — released funds previously held in trust (initial fleet) | 158,982.3 | 158,982.3 | ||||||
Cash — drawdown of debt finance | 186,000.0 | 186,000.0 | ||||||
Cash — issue costs of debt finance | (1,666.0 | ) | (1,666.0 | ) | ||||
Cash — payment for fees associated with filing the proxy | (1,700.0 | ) | (1,700.0 | ) | ||||
Cash — payment of deferred underwriting fees | (4,500.0 | ) | (4,500.0 | ) | ||||
Cash — payment to acquire initial fleet of vessels | (352,000.0 | ) | (352,000.0 | ) | ||||
Cash — payment to convert IPO units to cash (stock conversion) | 0.0 | (46,446.5 | ) | |||||
Beginning unrestricted cash balance | $ | 1,404.4 | 1,957.9 | |||||
Restricted cash balance | 10,000.0 | 10,000.0 | ||||||
Cash and cash equivalents — subtotal & restricted cash balance as per pro-forma Balance Sheet | $ | 11,404.4 | 11,957.9 | |||||
(10) | Oceanaut cannot assure you that it will have available cash in the amounts presented above or at all, or that the lenders under its credit facility will not place restrictions on the payment of dividends. | |
(11) | Represents a total of 18,984,375 shares including 18,750,000 shares that were purchased in Oceanaut’s initial public offering and 234,375 founding shares which are to be multiplied by the aggregate per share expected dividend of $1.12. It does not include dividends on 5,578,125 subordinated shares for which their holders have agreed to waive dividends for the first 6 operating quarters of the company (post consummation of this business combination) which comprise 1,125,000 shares that were purchased in Oceanaut’s private placement and 4,453,125 founding shares. If 5,624,999 shares are converted (and cancelled), then the total number of shares ranking for dividend will be 13,359,376. | |
(12) | Pursuant to the covenants under its credit facility, Oceanaut will be required to maintain $10 million as a cash reserve. |
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• | Each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; | |
• | Each of our officers and directors; and | |
• | all our officers and directors as a group. |
Amount | ||||||||
and Nature | Percentage of | |||||||
of | Outstanding | |||||||
Beneficial | Common | |||||||
Name and Address of Beneficial Owner(1)(2) | Ownership(2) | Stock | ||||||
Excel Maritime Carriers Ltd.(3) | 4,640,625 | (9) | 18.9 | % | ||||
QVT Finance LP(4) | 3,454,685 | (10) | 14.1 | % | ||||
QVT Finance GP LLC(4) | 3,454,685 | (10) | 14.1 | % | ||||
Satellite Asset Management, L.P.(5) | 2,617,982 | (11) | 10.7 | % | ||||
Satellite Fund Management, LLC(5) | 2,617,982 | (11) | 10.7 | % | ||||
Fir Tree, Inc.(6) | 1,960,000 | (12) | 8.0 | % | ||||
Sapling LLC(6) | 1,880,438 | (12) | 7.7 | % | ||||
Andrew Weiss(7) | 1,860,400 | (13) | 7.6 | % | ||||
QVT Associates GP LLC(4) | 1,658,143 | (10) | 6.8 | % | ||||
QVT Overseas Ltd.(4) | 1,479,950 | (10) | 6.0 | % | ||||
Weiss Asset Management, LLC(7) | 1,365,412 | (13) | 5.6 | % | ||||
Millenco LLC(8) | 1,352,222 | (14) | 5.5 | % | ||||
Satellite Overseas Fund, Ltd.(5) | 1,264,575 | (11) | 5.1 | % | ||||
Gabriel Panayotides | 351,562 | (15) | 1.4 | % | ||||
Eleftherios (Lefteris) A. Papatrifon | 234,375 | (16) | 1.0 | % | ||||
George Agadakis | 234,375 | (17) | 1.0 | % | ||||
Ismini Panayotides | 117,188 | (18) | * | |||||
Jesper Jarlbaek | 0 | * | ||||||
Kevin G. Oates | 0 | * | ||||||
Yannis Tsamourgelis | 0 | * | ||||||
All directors and executive officers as a group (8 individuals) | 937,500 | (19) | 3.8 | % | ||||
* | less than one (1%) percent. | |
(1) | Unless otherwise indicated, the business address of each of the individuals isc/o Excel Maritime Carriers Ltd., 17th Km National Road Athens-Lamia & Finikos Street, 145 64 Nea Kifisia, Athens, Greece. | |
(2) | Pursuant to the rules established under the Securities Exchange Act of 1934, as amended, the foregoing parties may be deemed to be a “group,” as defined in Section 13(d) of such Act, by virtue of their affiliation with Excel Maritime Carriers Ltd. | |
(3) | Argon S.A. is the record owner of 5,032,520 Class A common shares of Excel pursuant to a trust, whose beneficiary is Starling Trading Co. Ms. Ismini Panayotides, the daughter of our Chairman and our current Vice President of Project Development, is the sole shareholder of Starling Trading Co. Ms. Panayotides has no power of voting or disposition of these shares and, with Mr. Panayotides, disclaims beneficial ownership of these shares. Kostas Katavatis has sole voting and dispositive control over the shares of Starling Trading Co. In |
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addition, Ms. Mary Panayotides, the spouse of our Chairman, has sole voting and dispositive control over the shares of Boston Industries S.A., the record owner of approximately 39.5% of Excel’s outstanding shares of common stock (including both Class A and Class B). Mr. Panayotides disclaims beneficial ownership of these shares. | ||
(4) | The business address of such shareholder is 1177 Avenue of the Americas, 9th Floor, New York, New York 10036. | |
(5) | The business address of such shareholder is 623 Fifth Avenue, 19th Floor, New York, New York 10022. | |
(6) | The business address of such shareholder is 505 Fifth Avenue, 23rd Floor, New York, New York, 10017. | |
(7) | The business address of such shareholder is 29 Commonwealth Ave., Boston, Massachusetts 02116. | |
(8) | The business address of such shareholder is 666 Fifth Avenue, New York, New York 10103. | |
(9) | This amount excludes shares of common stock underlying warrants that are not currently exercisable and will not be exercisable prior to the consummation of the vessel acquisition. If such warrants were currently exercisable, the amount would be 8,890,625 and the percentage of outstanding common stock would be 36.2%. | |
(10) | Based on a Schedule 13D/A filed on May 22, 2008 with the SEC jointly by the following parties and indicating shared voting and dispositive power: QVT Financial LP (“QVT Financial”), QVT Financial GP LLC (“QVT Financial LLC”), QVT Overseas Ltd. (“QVT Overseas”), QVT Associates GP LLC (“QVT Associates”) and QVT Fund LP (“QVT Fund”). QVT Associates is the general partner of QVT Fund and several other funds (collectively, the “Funds”). QVT Financial LLC is the general partner of QVT Financial. QVT Financial acts as the investment manager for QVT Fund, the Funds and QVT Overseas. QVT Financial is also the investment manager for other entities, including a separate discretionary account managed for its client (the “Separate Account”). QVT Financial has the power to direct the vote and disposition of the shares of our common stock held by QVT Fund, each of the Funds, QVT Overseas and the Separate Account. QVT Overseas beneficially owns 1,479,950 shares of our common stock, the Funds together beneficially own an aggregate amount of 1,658,143 shares of our common stock and the Separate Account holds 316,592 shares of our common stock. Accordingly, QVT Financial may be deemed to be the beneficial owner of an aggregate amount of 3,454,685 shares of our common stock, consisting of the shares owned by QVT Overseas and each of the Funds and the shares held in the Separate Account. QVT Financial LLC, as General Partner of QVT Financial, may be deemed to beneficially own the same number of shares of our common stock reported by QVT Financial. QVT Associates, as General Partner of each of the Funds, may be deemed to be the beneficial owner of an aggregate amount of 1,658,143 shares of our common stock, consisting of the shares owned by the Funds. Daniel Gold, Lars Bader, Nicholas Brumm, Arthur Chu and Tracy Fu, are managing members of QVT Financial LLC and QVT Associates, and may be deemed to beneficially own the same number of shares of our common stock reported by QVT Financial, QVT Financial LLC and QVT Associates. Messrs. Gold, Woods and Pilgrim are directors of QVT Overseas and may be deemed to beneficially own the same number of shares of our common stock reported by QVT Overseas. In addition, QVT Overseas., QVT Associates, certain of the Funds own, and the Separate Account holds, an aggregate amount of 5,104,503 common stock purchase warrants. Each such warrant entitles the holder to purchase one share of our common stock at a price of $6.00 and become exercisable on the later of the our completion of a business combination or March 1, 2008. | |
(11) | Based on a Schedule 13G/A filed on March 18, 2008 with the SEC jointly by the following parties and indicating shared voting and dispositive power: (i) Satellite Fund II, L.P., Satellite Fund IV, L.P. (together, the “Delaware Funds”) over which Satellite Advisors, L.L.C. (“Satellite Advisors”) has discretionary trading authority, as general partner, and (ii) Satellite Overseas Fund, Ltd., The Apogee Fund Ltd., Satellite Overseas Fund V, Ltd., Satellite Overseas Fund VI, Ltd., Satellite Overseas Fund VII, Ltd., Satellite Overseas Fund VIII, Ltd. and Satellite Overseas Fund IX, Ltd. (collectively, the “Offshore Funds” and together with the Delaware Funds, the “Satellite Funds”) over which Satellite Asset Management, L.P. (“Satellite Asset Management”) has discretionary investment trading authority. The general partner of Satellite Asset Management is Satellite Fund Management, L.P. (“Satellite Fund Management”). Satellite Fund Management and Satellite Advisors each share the same Executive Committee, composed of Lief Rosenblatt, Gabriel Nechamkin and Mark Sonnino that make investment decisions on behalf of the Satellite Funds and investment decisions made by |
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such Executive Committee, when necessary, are made through approval of a majority of the Executive Committee members. | ||
(12) | Based on a Schedule 13G/A filed on February 14, 2008 with the SEC jointly by the following parties and indicating shared voting and dispositive power: Sapling, LLC (“Sapling”), Fir Tree Capital Opportunity Master Fund, L.P. (“Fir Tree Capital”) and Fir Tree, Inc. (“Fir Tree”). Sapling may direct the vote and disposition of 1,880,438 shares of our common stock, while Fir Tree Capital may direct the vote and disposition of 79,562 shares of our common stock. Fir Tree, as the investment manager of each of Sapling and Fir Tree Capital, has been granted investment discretion over the shares of common stock held by Sapling and Fir Tree Capital. Accordingly, Fir Tree may be deemed to be the beneficial owner of an aggregate amount of 1,960,000 shares of our common stock as of the date hereof, consisting of the shares owned by Sapling and Fir Tree Capital. Jeffrey D. Tannenbaum and Andrew Fredman have voting control for Fir Tree, Sapling and Fir Tree Capital. | |
(13) | Based on a Schedule 13G/A filed on March 19, 2008 with the SEC jointly by the following parties and indicating shared voting and dispositive power: Weiss Asset Management, LLC (“Weiss Management”), Weiss Capital LLC and Andrew Weiss. Shares reported herein for Weiss Management include shares beneficially owned by a private investment partnership of which Weiss Management is the sole general partner. Shares reported herein for Mr. Weiss represent (i) shares beneficially owned by a private investment partnership of which Weiss Asset Management is the sole general partner and which may be deemed to be controlled by Mr. Weiss, who is the Managing Member of Weiss Management and (ii) shares beneficially owned a private investment corporation of which Mr. Weiss is the Managing Member of the investment manager of that private investment corporation. Accordingly, Mr. Weiss may be deemed to be the beneficial owner of the shares of our common stock beneficially owned by Weiss Management. | |
(14) | Based on a Schedule 13G filed on April 14, 2008 with the SEC jointly by Millenco LLC, Millennium Management LLC and Israel A. Englander, the foregoing parties share voting and dispositive control over the shares. Based on such Schedule 13G, Mr. Israel Englander is the managing member of Millennium Management LLC, which is the manager of Millenco LLC. | |
(15) | This amount excludes shares of common stock underlying warrants that are not currently exercisable and will not be exercisable prior to the consummation of the vessel acquisition. If such warrants were currently exercisable, the amount would be 576,562 and the percentage of outstanding common stock would be 2.3%. | |
(16) | This amount excludes shares of common stock underlying warrants that are not currently exercisable and will not be exercisable prior to the consummation of the vessel acquisition. If such warrants were currently exercisable, the amount would be 384,375 and the percentage of outstanding common stock would be 1.6%. | |
(17) | This amount excludes shares of common stock underlying warrants that are not currently exercisable and will not be exercisable prior to the consummation of the vessel acquisition. If such warrants were currently exercisable, the amount would be 384,375 and the percentage of outstanding common stock would be 1.6%. | |
(18) | This amount excludes shares of common stock underlying warrants that are not currently exercisable and will not be exercisable prior to the consummation of the vessel acquisition. If such warrants were currently exercisable, the amount would be 192,188 and the percentage of outstanding common stock would be less than one (1%) percent. | |
(19) | This amount excludes shares of common stock underlying warrants that are not currently exercisable and will not be exercisable prior to the consummation of the vessel acquisition. If such warrants were currently exercisable, the amount would be 1,537,500 and the percentage of outstanding common stock would be 6.3%. |
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Common Stock | Warrants | Units | ||||||||||||||||||||||
Quarter Ended | High | Low | High | Low | High | Low | ||||||||||||||||||
September 30, 2007 | $ | 8.05 | $ | 7.51 | $ | 1.59 | $ | 1.02 | $ | 9.60 | $ | 8.55 | ||||||||||||
December 31, 2007 | $ | 8.75 | $ | 7.77 | $ | 2.52 | $ | 1.36 | $ | 11.20 | $ | 9.26 | ||||||||||||
March 31, 2008 | $ | 8.12 | $ | 7.61 | $ | 1.70 | $ | 0.30 | $ | 9.40 | $ | 7.96 | ||||||||||||
June 30, 2008 | $ | 7.97 | $ | 7.67 | $ | 1.30 | $ | 0.50 | $ | 9.07 | $ | 8.16 |
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• | the completion of a business combination; or | |
• | one year from the date of our prospectus. |
• | in whole and not in part; | |
• | at a price of $.01 per warrant at any time after the warrants become exercisable; | |
• | upon not less than 30 days’ prior written notice of redemption to each warrant holder; and |
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• | if, and only if, the reported last sale price of the common stock equals or exceeds $11.50 per share for any 20 trading days within a 30 trading day period ending on the third business day prior to the notice of redemption to warrant holders. |
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• | 90 days following the completion of our initial business combination; and | |
• | the last sales price of our common stock exceeds $11.00 per share for any 20 trading days within a 30 trading day period beginning 90 days after the completion of our initial business combination. |
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• | $20.0 million;plus | |
• | all of our cash receipts (including the proportionate share of cash receipts of certain subsidiaries which are not wholly-owned) since the initial closing of the vessel acquisition, excluding cash receipts from (1) borrowings, (2) sales of equity and debt securities, (3) capital contributions, (4) corporate reorganizations or restructurings, (5) the termination of interest rate swap agreements, (6) sales or other dispositions of vessels and (7) sales or other dispositions of other assets other than in the normal course of business;plus | |
• | interest paid on debt incurred and cash dividends paid on equity securities issued by Oceanaut, in each case, to finance all or any portion of the construction, replacement or improvement of a capital asset such as vessels (other than our contracted fleet) during the period from such financing until the earlier to occur of the date the capital asset is put into service or the date that it is abandoned or disposed of;plus | |
• | interest paid on debt incurred and cash dividends paid on Oceanaut’s equity securities issued by Oceanaut, in each case, to pay the construction period interest on debt incurred, or to pay construction period dividends on Oceanaut’s equity issued, to finance the construction projects described in the immediately preceding bullet;less | |
• | all of Oceanaut’s cash expenditures after the completion of the vessel acquisition, including, but not limited to operating expenses, interest payments and taxes, but not (1) the repayment of borrowings, (2) the repurchase of debt and equity securities, (3) interest rate swap termination costs, (4) expenses and taxes related to borrowings, sales of equity and debt securities, capital contributions, corporate reorganizations or restructurings, the termination of interest rate swap agreements, sales or other dispositions of vessels, and sales or dispositions of other assets other than in the normal course of business, (5) capital expenditures (6) expenses, costs and liabilities related to the merger and (6) payment of dividends;less | |
• | cash capital expenditures incurred after the completion of the vessel acquisition to maintain Oceanaut’s vessels and other assets, replacement of equipment on the vessels, repairs and similar expenditures, but excluding capital expenditures related to drydocking and capital expenditures for or related to the acquisition of additional vessels, and including capital expenditures for replacement of a vessel as a result of |
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damage or loss prior to normal retirement, net of any insurance proceeds, warranty payments or similar property not treated as cash receipts for this purpose;less |
• | a reserve for the estimated cost of future drydockings;less | |
• | the amount of cash reserves (including the proportionate share of cash reserves for certain subsidiaries which are not wholly-owned) established by our board of directors for future (1) operating expenditures and (2) maintenance capital expenditures. |
• | borrowings; | |
• | sales of debt and equity securities; | |
• | sales or other dispositions of vessels; and | |
• | sales or other dispositions of other assets, other than assets sold in the ordinary course of business. |
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Marshall Islands | Delaware | |
Shareholder Meetings | ||
• Held at a time and place as designated in the by-laws | • May be held at such time or place as designated in the certificate of incorporation or the by-laws, or if not so designated, as determined by the board of directors | |
• May be held within or without the Marshall Islands | • May be held within or without Delaware | |
• Notice: | • Notice: | |
• Whenever shareholders are required to take action at a meeting, written notice shall state the place, date and hour of the meeting and indicate that it is being issued by or at the direction of the person calling the meeting | • Whenever shareholders are required to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, and the means of remote communication, if any | |
• A copy of the notice of any meeting shall be given personally or sent by mail not less than 15 nor more than 60 days before the meeting | • Written notice shall be given not less than 10 nor more than 60 days before the meeting | |
Shareholders’ Voting Rights | ||
• Any action required to be taken by meeting of shareholders may be taken without meeting if consent is in writing and is signed by all the shareholders entitled to vote | • Shareholders may act by written consent to elect directors | |
• Any person authorized to vote may authorize another person or persons to act for him by proxy | • Any person authorized to vote may authorize another person or persons to act for him by proxy | |
• Unless otherwise provided in the articles of incorporation, a majority of shares entitled to vote constitutes a quorum. In no event shall a quorum consist of fewer than one-third of the shares entitled to vote at a meeting | • For stock corporations, certificate of incorporation or by-laws may specify the number to constitute a quorum but in no event shall a quorum consist of less than one-third of shares entitled to vote at a meeting. In the absence of such specifications, a majority of shares entitled to vote shall constitute a quorum | |
• For non-stock companies, certificate of incorporation or by-laws may specify the number of members to constitute a quorum. In the absence of this, one-third of the members shall constitute a quorum |
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Marshall Islands | Delaware | |
• No provision for cumulative voting | • The certificate of incorporation may provide for cumulative voting | |
Directors | ||
• Board must consist of at least one member | • Board must consist of at least one member | |
• Number of members can be changed by an amendment to the by-laws, by the shareholders, or by action of the board | • Number of board members shall be fixed by the by-laws, unless the certificate of incorporation fixes the number of directors, in which case a change in the number shall be made only by amendment of the certificate | |
• If the board is authorized to change the number of directors, it can only do so by an absolute majority (majority of the entire board) | ||
Shareholders’ Derivative Actions | ||
• An action may be brought in the right of a corporation to procure a judgment in its favor, by a holder of shares or of voting trust certificates or of a beneficial interest in such shares or certificates. It shall be made to appear that the plaintiff is such a holder at the time of bringing the action and that he was such a holder at the time of the transaction of which he complains, or that his shares or his interest therein devolved upon him by operation of law | • In any derivative suit instituted by a shareholder of a corporation, it shall be averred in the complaint that the plaintiff was a shareholder of the corporation at the time of the transaction of which he complains or that such shareholder’s stock thereafter devolved upon such shareholder by operation of law | |
• Complaint shall set forth with particularity the efforts of the plaintiff to secure the initiation of such action by the board or the reasons for not making such effort | ||
• Such action shall not be discontinued, compromised or settled, without the approval of the High Court of the Republic | ||
• Attorney’s fees may be awarded if the action is successful | ||
• Corporation may require a plaintiff bringing a derivative suit to give security for reasonable expenses if the plaintiff owns less than 5% of any class of stock and the shares have a value of less than $50,000 |
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• | more than 50% of the value of Oceanaut’s stock is owned, directly or indirectly, by individuals who are “residents” of Oceanaut’s country of organization or of another foreign country that grants an “equivalent exemption” to corporations organized in the United States, which Oceanaut refers to as the “50% Ownership Test,” or | |
• | Oceanaut’s stock is “primarily and regularly traded on an established securities market” in Oceanaut’s country of organization, in another country that grants an “equivalent exemption” to U.S. corporations, or in the United States, which Oceanaut refers to as the “Publicly-Traded Test.” |
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• | Oceanaut has, or is considered to have, a fixed place of business in the United States involved in the earning of shipping income; and | |
• | substantially all of Oceanaut’sU.S.-source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States. |
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• | at least 75% of Oceanaut’s gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or | |
• | at least 50% of the average value of the assets held by the corporation during such taxable year produce, or are held for the production of, passive income. |
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146
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• | the excess distribution or gain would be allocated ratably over the Non-Electing Holders’ aggregate holding period for the common stock; | |
• | the amount allocated to the current taxable year and any taxable year before we became a passive foreign investment company would be taxed as ordinary income; and | |
• | the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. |
• | fail to provide an accurate taxpayer identification number; |
147
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• | are notified by the IRS that you have failed to report all interest or dividends required to be shown on your federal income tax returns; or | |
• | in certain definitive, pre-determined circumstances, fail to comply with applicable certification requirements. |
148
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149
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150
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151
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152
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153
(a corporation in the development stage)
Table of Contents
F-1
Table of Contents
F-2
Table of Contents
(a corporation in the development stage)
December 31, | December 31, | |||||||
2007 | 2006 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 31,364 | $ | 134 | ||||
Prepaid expenses and other current assets | 20,344 | — | ||||||
Total current assets | 51,708 | 134 | ||||||
Other assets | ||||||||
Cash held in Trust Account | 158,240,002 | — | ||||||
Deferred offering costs | — | 198,481 | ||||||
Income tax receivable | 952,180 | — | ||||||
Total other assets | 159,192,182 | 198,481 | ||||||
TOTAL ASSETS | $ | 159,243,890 | $ | 198,615 | ||||
LIABILITIES & SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued expenses | $ | 276,301 | $ | 10,850 | ||||
Accrued offering costs | — | 26,000 | ||||||
Notes payable, shareholder | — | 147,650 | ||||||
Total current liabilities | 276,301 | 184,500 | ||||||
Long-term liability, Deferred underwriting fees | 4,500,000 | — | ||||||
Common Stock, subject to possible conversion, $.0001 par value, 5,624,999 shares at conversion value of approximately $7.93 per share plus interest of $1,077,643 | 45,657,642 | — | ||||||
Commitments and contingencies | ||||||||
Shareholders’ Equity | ||||||||
Preferred Stock, $.0001 par value; authorized, 1,000,000 shares; none issued or outstanding | — | — | ||||||
Common Stock, $.0001 par value, authorized, 80,000,000 shares; 4,687,500 shares issued and outstanding at December 31, 2006, 24,562,500 shares issued and outstanding at December 31, 2007 (including 5,624,999 shares subject to possible redemption) | 2,457 | 469 | ||||||
Additional paid in capital | 105,283,426 | 24,531 | ||||||
Earnings (deficit) accumulated in the development stage | 3,524,064 | (10,885 | ) | |||||
Total Shareholders’ Equity | 108,809,947 | 14,115 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 159,243,890 | $ | 198,615 | ||||
F-3
Table of Contents
May 3, 2006 | May 3, 2006 | |||||||||||
Year Ended | (Date of Inception) to | (Date of Inception) to | ||||||||||
December 31, 2007 | December 31, 2007 | December 31, 2006 | ||||||||||
Revenue | $ | — | $ | — | $ | — | ||||||
Formation and operating expenses | 993,908 | 1,001,444 | 7,536 | |||||||||
Loss from operations | (993,908 | ) | (1,001,444 | ) | (7,536 | ) | ||||||
Other income (expense): | ||||||||||||
Interest income | 6,589,695 | 6,591,546 | 1,851 | |||||||||
Interest expense | (1,122 | ) | (6,322 | ) | (5,200 | ) | ||||||
Other income, net | 6,588,573 | 6,585,224 | (3,349 | ) | ||||||||
Net income (loss) before income taxes | 5,594,665 | 5,583,780 | (10,885 | ) | ||||||||
Income Taxes | 982,073 | 982,073 | — | |||||||||
Net income (loss) applicable to common shareholders | $ | 4,612,592 | $ | 4,601,707 | $ | (10,855 | ) | |||||
Net income (loss) per common share (basic) | $ | 0.22 | $ | 0.32 | $ | (0.002 | ) | |||||
Weighted number of common shares outstanding — basic | 21,077,568 | 14,543,143 | 4,687,500 | |||||||||
Net income (loss) per common share (diluted) | $ | 0.18 | $ | 0.26 | $ | (0.002 | ) | |||||
Weighted number of common shares outstanding — diluted | 26,012,260 | 17,787,165 | 4,687,500 | |||||||||
Net income per share subject to possible conversion, basic and diluted | $ | 0.23 | $ | 0.38 | $ | — | ||||||
Shares subject to possible conversion | 4,638,698 | 2,784,745 | — | |||||||||
F-4
Table of Contents
(a corporation in the development stage)
Earnings (Deficit) | Total | |||||||||||||||||||
Common | Additional | Accumulated in the | Stockholders’ | |||||||||||||||||
Shares | Amount | Paid-in Capital | Development Stage | Equity | ||||||||||||||||
Common shares and warrants issued at May 3, 2006 | 4,687,500 | $ | 469 | $ | 24,531 | $ | — | $ | 25,000 | |||||||||||
Net loss | (10,885 | ) | (10,885 | ) | ||||||||||||||||
Balances at December 31, 2006 | 4,687,500 | $ | 469 | $ | 24,531 | $ | (10,885 | ) | $ | 14,115 | ||||||||||
Sale of 18,750,000 Units on March 6, 2007 at a price of $8 per unit, net of underwriters’ discount and offering costs (including 5,624,999 shares for possible redemption) | 18,750,000 | 1,875 | 138,839,007 | — | 138,840,882 | |||||||||||||||
Sale of 1,125,000 Units on March 6, 2007 at a price of $8 per unit in a private placement to insiders | 1,125,000 | 113 | 8,999,887 | — | 9,000,000 | |||||||||||||||
Common shares subject to possible redemption, 5,624,999 shares | — | — | (44,579,999 | ) | — | (44,579,999 | ) | |||||||||||||
Proceeds from issuance of insider warrants | — | — | 2,000,000 | — | 2,000,000 | |||||||||||||||
Accretion of trust account relating to common stock subject to possible redemption, net of taxes of approximately $320,000 | — | — | — | (1,077,643 | ) | (1,077,643 | ) | |||||||||||||
Net income applicable to common shareholders | — | — | — | 4,612,592 | 4,612,592 | |||||||||||||||
Balances, at December 31, 2007 | 24,562,500 | $ | 2,457 | $ | 105,283,426 | $ | 3,524,064 | $ | 108,809,947 | |||||||||||
F-5
Table of Contents
(a corporation in the development stage)
May 3, 2006 | May 3, 2006 | |||||||||||
Year Ended | (date of inception) | (date of inception) | ||||||||||
December 31, 2007 | to December 31, 2007 | to December 31, 2006 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income (loss) | $ | 4,612,592 | $ | 4,601,707 | $ | (10,885 | ) | |||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||
Prepaid expenses and other current assets | (20,344 | ) | (20,344 | ) | — | |||||||
Income tax receivable | (952,180 | ) | (952,180 | ) | — | |||||||
Accounts payable and accrued expenses | 265,451 | 276,301 | 10,850 | |||||||||
Net cash provided by (used in) operating activities | 3,905,519 | 3,905,484 | (35 | ) | ||||||||
Net cash used in investing activities: | ||||||||||||
Cash held in Trust Account | (158,240,002 | ) | (158,240,002 | ) | — | |||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from notes payable, shareholder | 100,000 | 300,000 | 200,000 | |||||||||
Payments on notes payable, shareholder | (247,650 | ) | (300,000 | ) | (52,350 | ) | ||||||
Proceeds from issuance of common stock and warrants to initial shareholders | 0 | 25,000 | 25,000 | |||||||||
Proceeds from issuance of warrants in a private placement | 2,000,000 | 2,000,000 | ||||||||||
Proceeds from issuance of Units in a private placement | 9,000,000 | 9,000,000 | ||||||||||
Gross proceeds from common stock issued in the Public Offering | 150,000,000 | 150,000,000 | ||||||||||
Payment for underwriter’s discount and offering costs | (6,486,637 | ) | (6,659,118 | ) | (172,481 | ) | ||||||
Net cash provided by financing activities | 154,365,713 | 154,365,882 | 169 | |||||||||
Net increase in cash | 31,230 | 31,364 | 134 | |||||||||
Cash at beginning of period | 134 | 0 | 0 | |||||||||
Cash at end of period | $ | 31,364 | $ | 31,364 | $ | 134 | ||||||
Supplemental disclosure of cash flow information: | ||||||||||||
Cash paid during the periods for income taxes | $ | 1,934,253 | $ | 1,934,253 | $ | — | ||||||
Supplemental schedule of non-cash financing activities: | ||||||||||||
Accrual of deferred underwriting fees | $ | 4,500,000 | $ | 4,500,000 | $ | — | ||||||
Accrual of deferred offering costs | $ | 0 | 0 | $ | 26,000 | |||||||
F-6
Table of Contents
NOTE A — | DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS |
F-7
Table of Contents
(a corporation in the development stage)
Notes to Financial Statements — (Continued)
NOTE B — | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
F-8
Table of Contents
(a corporation in the development stage)
Notes to Financial Statements — (Continued)
F-9
Table of Contents
(a corporation in the development stage)
Notes to Financial Statements — (Continued)
F-10
Table of Contents
(a corporation in the development stage)
Notes to Financial Statements — (Continued)
NOTE C — | THE OFFERING |
NOTE D — | RELATED PARTY TRANSACTIONS |
F-11
Table of Contents
(a corporation in the development stage)
Notes to Financial Statements — (Continued)
NOTE E — | PREFERRED STOCK |
NOTE F — | SUBSEQUENT EVENTS |
F-12
Table of Contents
(a corporation in the development stage)
BALANCE SHEETS
June 30, | December 31, | |||||||
2008 | 2007 | |||||||
(Unaudited) | (Audited) | |||||||
(In thousands of U.S. dollars, except share and per share data) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 288 | $ | 31 | ||||
Prepaid expenses and other current assets | 24 | 21 | ||||||
Total current assets | 312 | 52 | ||||||
Other assets: | ||||||||
Cash held in Trust Account | 159,982 | 158,240 | ||||||
Income tax receivable | 952 | 952 | ||||||
Total other assets | 160,934 | 159,192 | ||||||
TOTAL ASSETS | $ | 161,246 | $ | 159,244 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 140 | $ | 276 | ||||
Long-term liability, Deferred underwriting fees | 4,500 | 4,500 | ||||||
Common Stock, subject to possible conversion, $0.0001 par value, 5,624,999 shares at conversion value of approximately $8.26 and $8.12 per share | 46,446 | 45,658 | ||||||
Commitments and Contingencies | ||||||||
Shareholders’ Equity | ||||||||
Preferred Stock, $0.0001 par value 1,000,000 shares authorized, none issued or outstanding | — | — | ||||||
Common Stock, $0.0001 par value, 80,000,000 shares authorized, 24,562,500 shares issued and outstanding at December 31, 2007 and June 30, 2008 (including 5,624,999 shares subject to possible conversion) | 2 | 2 | ||||||
Additional paid-in capital | 105,284 | 105,284 | ||||||
Earnings accumulated in the development stage | 4,874 | 3,524 | ||||||
Total Shareholders’ Equity | 110,160 | 108,810 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 161,246 | $ | 159,244 | ||||
F-13
Table of Contents
(a corporation in the development stage)
From May 3, | ||||||||||||
For the Six | For the Six | 2006 (Date of | ||||||||||
Months Ended | Months Ended | Inception) to | ||||||||||
June 30, 2008 | June 30, 2007 | June 30, 2008 | ||||||||||
(Unaudited) | ||||||||||||
(In thousands of U.S. dollars, except for | ||||||||||||
share and per share data) | ||||||||||||
Revenue | $ | — | $ | — | $ | — | ||||||
Formation and administrative expenses | 607 | 103 | 1,608 | |||||||||
Loss from operations | (607 | ) | (103 | ) | (1,608 | ) | ||||||
Other income (expense): | ||||||||||||
Interest income | $ | 2,745 | $ | 2,544 | $ | 9,336 | ||||||
Interest expense | — | (1 | ) | (6 | ) | |||||||
Net income before income taxes | 2,138 | 2,440 | 7,722 | |||||||||
Income taxes | — | — | 982 | |||||||||
Net income applicable to common shareholders | $ | 2,138 | $ | 2,440 | $ | 6,740 | ||||||
Income per common share — basic | $ | 0.09 | $ | 0.14 | $ | 0.40 | ||||||
Income per common share — diluted | $ | 0.07 | $ | 0.12 | $ | 0.33 | ||||||
Weighted average common shares outstanding — basic | 24,562,500 | 17,534,876 | 16,838,924 | |||||||||
Weighted average common shares outstanding — diluted | 30,404,266 | 20,891,595 | 20,681,692 | |||||||||
Income per share subject to possible conversion, basic and diluted | $ | 0.14 | $ | — | $ | 0.54 | ||||||
Shares subject to possible conversion | 5,624,999 | 4,966,864 | 3,439,082 | |||||||||
For the Three | For the Three | |||||||||||
Months Ended | Months Ended | |||||||||||
June 30, 2008 | June 30, 2007 | |||||||||||
Revenue | $ | — | $ | — | ||||||||
Formation and administrative expenses | 216 | 65 | ||||||||||
Loss from operations | (216 | ) | (65 | ) | ||||||||
Other income (expense): | ||||||||||||
Interest income | $ | 1,140 | $ | 1,935 | ||||||||
Interest expense | — | — | ||||||||||
Net income before income taxes | 924 | 1,869 | ||||||||||
Income taxes | — | — | ||||||||||
Net income applicable to common shareholders | $ | 924 | $ | 1,869 | ||||||||
Income per common share — basic | $ | 0.04 | $ | 0.05 | ||||||||
Income per common share — diluted | $ | 0.03 | $ | 0.05 | ||||||||
Weighted average common shares outstanding — basic | 24,562,500 | 24,562,500 | ||||||||||
Weighted average common shares outstanding — diluted | 30,335,538 | 24,562,500 | ||||||||||
Income per share subject to possible conversion, basic and diluted | $ | 0.06 | $ | — | ||||||||
Shares subject to possible conversion | 5,624,999 | 5,624,999 | ||||||||||
F-14
Table of Contents
(a corporation in the development stage)
STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
Earnings | ||||||||||||||||||||
(deficit) | ||||||||||||||||||||
Accumulated | ||||||||||||||||||||
Additional | in the | Total | ||||||||||||||||||
Common | Paid In | Paid In | Development | Shareholders’ | ||||||||||||||||
Shares | Capital | Capital | Stage | Equity | ||||||||||||||||
(In thousands of U.S. Dollars, except for share and per share data) | ||||||||||||||||||||
Common shares and warrants issued on May 3, 2006 to initial stockholders, at approximately $0.005 per share | 4,687,500 | $ | — | $ | 25 | $ | — | $ | 25 | |||||||||||
Net loss | — | — | — | (11 | ) | (11 | ) | |||||||||||||
Balances, at December 31, 2006 | 4,687,500 | $ | — | $ | 25 | $ | (11 | ) | $ | 14 | ||||||||||
Sale of 18,750,000 Units on March 6, 2007 at a price of $8 per unit, net of underwriters’ discount and offering costs (including 5,624,999 common shares subject to possible conversion) | 18,750,000 | 2 | 138,839 | — | 138,841 | |||||||||||||||
Sale of 1,125,000 Units on March 6, 2007 at a price of $8 per unit in a private placement to insiders | 1,125,000 | — | 9,000 | — | 9,000 | |||||||||||||||
Common shares subject to possible conversion, 5,624,999 shares | — | — | (44,580 | ) | — | (44,580 | ) | |||||||||||||
Proceeds from issuance of insider warrants | — | — | 2,000 | — | 2,000 | |||||||||||||||
Accretion of trust account relating to common stock subject to possible conversion, net of taxes of approximately $320,000 | — | — | — | (1,078 | ) | (1,078 | ) | |||||||||||||
Net income applicable to common shareholders | — | — | — | 4,613 | 4,613 | |||||||||||||||
Balances, at December 31, 2007 | 24,562,500 | $ | 2 | $ | 105,284 | $ | 3,524 | $ | 108,810 | |||||||||||
Accretion of trust account relating to common stock subject to possible conversion | — | — | — | (788 | ) | (788 | ) | |||||||||||||
Net income applicable to common shareholders | — | — | — | 2,138 | 2,138 | |||||||||||||||
Balances, at June 30, 2008 (unaudited) | 24,562,500 | $ | 2 | $ | 105,284 | $ | 4,874 | $ | 110,160 | |||||||||||
F-15
Table of Contents
(a corporation in the development stage)
(In thousands of U.S. Dollars)
May 3, 2006 | ||||||||||||
Six Months Ended | Six Months Ended | (date of inception) to | ||||||||||
June 30, 2008 | June 30, 2007 | June 30, 2008 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 2,138 | $ | 2,440 | $ | 6,740 | ||||||
Changes in operating assets and liabilities: | ||||||||||||
Prepaid expenses and other current assets | (4 | ) | (75 | ) | (976 | ) | ||||||
Accounts payable and accrued expenses | (135 | ) | 23 | 141 | ||||||||
Net cash provided by operating activities | 1,999 | 2,388 | 5,905 | |||||||||
Cash flows used in investing activities: | ||||||||||||
Cash held in Trust Account | (1,742 | ) | (156,166 | ) | (159,982 | ) | ||||||
Net cash used in investing activities: | (1,742 | ) | (156,166 | ) | (159,982 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from notes payable, shareholder | — | 100 | 300 | |||||||||
Payments on notes payable, shareholder | — | (248 | ) | (300 | ) | |||||||
Proceeds from issuance of common stock to initial shareholders | — | — | 25 | |||||||||
Proceeds from issuance of warrants in a private placement | — | 2,000 | 2,000 | |||||||||
Proceeds from issuance of Units in a private placement | — | 9,000 | 9,000 | |||||||||
Gross proceeds from Public Offering | — | 150,000 | 150,000 | |||||||||
Payment for underwriter’s discount and offering costs | — | (6,487 | ) | (6,660 | ) | |||||||
Net cash provided by financing activities | — | 154,365 | 154,365 | |||||||||
Net increase in cash and cash equivalents | 257 | 587 | 288 | |||||||||
Cash and cash equivalents at beginning of period | 31 | — | — | |||||||||
Cash and cash equivalents at end of period | $ | 288 | $ | 587 | $ | 288 | ||||||
Supplemental schedule of non-cash financial activities: | ||||||||||||
Deferred underwriting fees | $ | — | $ | 4,500 | $ | 4,500 | ||||||
Accrued offering costs | $ | — | $ | (26 | ) | $ | — | |||||
F-16
Table of Contents
(a corporation in the development stage)
Notes to the Condensed Financial Statements
NOTE A — | BASIS OF PRESENTATION |
F-17
Table of Contents
(a corporation in the development stage)
F-18
Table of Contents
(a corporation in the development stage)
F-19
Table of Contents
(a corporation in the development stage)
F-20
Table of Contents
(a corporation in the development stage)
NOTE D — | THE OFFERING |
F-21
Table of Contents
(a corporation in the development stage)
NOTE E — | RELATED PARTY TRANSACTIONS |
NOTE F — | FAIR VALUE MEASUREMENTS |
F-22
Table of Contents
(a corporation in the development stage)
Significant | ||||||||||||||||
Fair Value at | Quoted Prices in | Significant Other | Unobservable | |||||||||||||
June 30, | Active Markets | Observable Inputs | Inputs | |||||||||||||
Description | 2008 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets: | ||||||||||||||||
Money market funds invested in trust account | $ | 159.9 | $ | 159.9 | — | — | ||||||||||
Total | $ | 159.9 | $ | 159.9 | $ | — | $ | — | ||||||||
NOTE G — | PREFERRED STOCK |
F-23
Table of Contents
Norwegian Shipbrokers’ Association’s Memo- | ||
randum of Agreement for sale and purchase of | ||
ships. Adopted by The Baltic and International | ||
Maritime Council (BIMCO) in 1956. | ||
MEMORANDUM OF AGREEMENT | Code-name | |
SALEFORM 1993 | ||
Revised 1966, 1983 and 1986/87. |
stipulated for the Purchase Price in Clause 1 and in the place of closing stipulated in Clause 8.
12
a registered letter, telex, telefax or other modern form of written communication.
14
(ten per cent) of the Purchase Price within3 (three)banking daysafter all subjects having been lifted
and unspacking has occurred andfrom the date of this
Agreementhaving been signed by both parties on a facsimile form, whichever the latter.This
deposit shall be placed withthe Sellers’ nominated bank
19
20
released in accordance
with joint written instructions of the Sellers and the Buyers. Interest
to be credited to the
Buyers. Any fee charged for holding the said deposit shall be borne equally by the Sellers and the
Buyers.Banking fees, if any, for holding the deposit shall be split equally between the Buyers and
Sellers. Any bank charges of Sellers’ Bank to be for Sellers’ account. Any bank charges of Buyers’
bank to be for Buyers’ account.
22
23
24
along with value of R.O.B. lubricants (per 7 herein)shall be paid in full free ofanybank charges to
Sellers’ nominated bank
physically ready for delivery in accordance with the terms and conditions of this Agreement and
a valid Notice of Readiness has been
28
29
A-1
Table of Contents
Clause 5and the terms and conditions of this agreement, against the protocol of delivery, bill of sale and other usual delivery documents requried for the registration of each Vessel under the Buyers’ flag of choice. Any closing charges to be borne equally between the Buyers and Sellers. | ||||
4.Inspections | 30 | |||
The Buyers have waived their rights to inspect the Vessel and her Class Records. Thus this transaction is outright and subject only to the terms hereto. | ||||
have also inspected the Vessel at/in subject only to the terms and conditions of this Agreement. | 31 32 33 34 | |||
whether same are accepted or not within | 35 36 | |||
37 | ||||
Buyers cause undue delay they shall compensate the Sellers for the losses thereby incurred. The Buyers shall inspect the Vessel without opening up and without cost to the Sellers. During the inspection, the Vessel’s dock and engine log books shall be made available for examination by the Buyers. If the Vessel is accepted after such inspection, the sale shall become outright and definite, subject only to the terms and conditions of this Agreement, provided the Sellers receive written notice of acceptance from the Buyers within 72 hours after completion of such inspection. received by the Sellers as aforesaid, the deposit together with interest earned shall be released immediately to the Buyers, whereafter this Agreement shall be null and void. | 38 39 40 41 42 43 44 45 46 47 48 | |||
alternative 4a) to apply. | 49 50 | |||
5. Notices, time and place of delivery | 51 | |||
a) | The Sellers shall keep the Buyers well movementsand shall provide the Buyers with 30 ,15 ,7and 3daysapproximate notice of the estimated time of Readiness onlyWhen the Vessel is at the place of delivery and is in this Agreementand on successful completion of Divers’ inspection, Buyers a written Notice of Readiness for delivery. | 52 53 54 55 56 | ||
b) | The Vessel shall be deliveredto the Buyers after Divers’ inspection, which should be carried out at the port of delivery free of cargoand taken over safely afloat at a safe and accessible berth/port or anchorage port worldwide in the Sellers’ option. | 57 58 59 | ||
Expected time of delivery:between 1st October 2008 and 1st December 2008 | 60 | |||
Date of cancelling (see Clauses 5 c), 6 b) (iii) and 14):1st December 2008 in the option of the Buyers. | 61 | |||
In the event that the Buyers are able to lift their subjects described herein prior to the 30th |
A-2
Table of Contents
September 2008 then the above laycan and cencelling dates to be brought forward by the same number of days but always giving the Sellers two clear months within which to deliver the Vessel from the time of such subjects being lifted. | ||||
c) | If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the Vessel will not be ready for delivery by the cancelling date they may notify the Buyers in writing stating the date when they anticipate that the Vessel will be ready for delivery and propose a new cancelling date. Upon receipt of such notification the Buyers shall have the option of either cancelling this Agreement in accordance with Clause 14 within 7 running days of receipt of the notice or of accepting the new date as the new cancelling date. If the Buyers have not declared their option within 7 running days of receipt of the Sellers’ notification or if the Buyers accept the new date, the date proposed in the Sellers’ notification shall be deemed to be the new cancelling date and shall be substituted for the cancelling date stipulated in line 61. | 62 63 64 65 66 67 68 69 70 71 | ||
If this Agreement is maintained with the new cancelling date all other terms and conditions hereof including those contained in Clauses 5 a) and 5 c) shall remain unaltered and in full force and effect. Cancellation or failure to cancel shall be entirely without prejudice to any claim for damages the Buyers may have under Clause 14 for the Vessel not being ready by the original cancelling date. | 72 73 74 75 76 | |||
d) | Should the Vessel become an actual, constructive or compromised total loss before delivery the deposit together with interest earned shall be released immediately to the Buyers whereafter this Agreement shall be null and void. | 77 78 79 |
6. Drydocking/Divers Inspection | 80 |
Classification Society of the Vessel’s underwater parts below the deepest load line, the extent of the inspection being in accordance with the Classification Society’s rules. If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class, such defects shall be made good at the Sellers’ expense to the satisfaction of the Classification Society without condition/recommendation*. | 81 82 83 84 85 86 87 | |||
b)** | (i) The Vessel is to be delivered without drydocking. However, the Buyers shall have the right at their expense to arrange for an underwater inspection by a diver approved by the Classification Society prior to the delivery of the Vessel. The Sellers shall at their cost make the Vessel available for such inspection. The extent of the inspection and the conditions under which it is performed shall be to the satisfaction of the Classification Society. If the conditions at the port of delivery are unsuitable for such inspection, the Sellers shall make the Vessel available at a suitable alternative place near to the delivery port. | 88 89 90 91 92 93 94 95 | ||
In the event that the Divers’ inspection reveals any damage to the Vessel’s underwater parts which would impose a condition against the Vessel’s present Class and Class imposes a condition but the Vessel is not required to be repaired before her next scheduled Drydocking, then Sellers shall pay to the Buyers the estimated cost to repair such damage in a way which is acceptable to the Class and which shall be the direct cost of the repair, excluding Drydocking costs, for such damage only and to be based on the mean of two quotations given by nearest ship yards, one chosen by the Sellers and one chosen by the Buyers, The amount as agreed shall be deducted from the balance of the purchase money at the time of Delivery. | ||||
(ii) If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class,the repair of which cannot be postponed until the Vessel’s next scheduled Drydocking,then unless repairs can be carried out afloat to the satisfaction of the Classification Society, the Sellers shall arrange for the Vessel to be drydocked at their expense for inspection by the Classification Society of the Vessel’s underwater parts below the deepest load line, the extent of the inspection being in accordance with the Classification Society’s rules. If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class, such defects shall be made good by the Sellers at their expense to the satisfaction of the Classification Society without condition/recommendation*. In such event the Sellers are to pay also for the cost of | 96 97 98 99 100 101 102 103 104 105 |
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the underwater inspection and the Classification Society’s attendance. | 106 | |||
(iii) If the Vessel is to be drydocked pursuant to Clause 6 b) (ii) and no suitable dry- docking facilities are available at the port of delivery, the Sellers shall take the Vessel to a port where suitable drydocking facilities are available, whether within or outside the delivery range as per Clause 5 b). Once drydocking has taken place the Sellers shall deliver the Vessel at a port within the delivery range as per Clause 5 b) which shall, for the purpose of this Clause, become the new port of delivery. In such event the cancelling date provided for in Clause 5 b) shall be extended by the additional time required for the drydocking and extra steaming, but limited to a maximum of 14 running days. | 107 108 109 110 111 112 113 114 | |||
c) | If the Vessel is drydocked pursuant to Clause | 115 | ||
(i) the Classification Society may require survey of the tailshaft system, the extent of the survey being to the satisfaction of the Classification surveyor. If such survey is not required by the Classification Society, the Buyers shall have the right to require the tailshaft to be drawn and surveyed by the Classification Society, the extent of the survey being in accordance with the Classification Society’s rules for tailshaft survey and consistent with the current stage of the Vessel’s survey cycle. The Buyers shall declare whether they require the tailshaft to be drawn and surveyed not later than by the completion of the inspection by the Classification Society. The drawing and refitting of the tailshaft shall be arranged by the Sellers. Should any parts of the tailshaft system be condemned or found defective so as to affect the Vessel’s class, those parts shall be renewed or made good at the Sellers’ expense to the satisfaction of the Classification Society without condition/recommendation*. | 116 117 118 119 120 121 122 123 124 125 126 127 | |||
(ii) the expenses relating to the survey of the tailshaft system shall be borne by the Buyers unless the Classification Society requires such survey to be carried out, in which case the Sellers shall pay these expenses. The Sellers shall also pay the expenses if the Buyers require the survey and parts of the system are condemned or found defective or broken so as to affect the Vessel’s class*. | 128 129 130 131 132 | |||
(iii) the expenses in connection with putting the Vessel in and taking her out of drydock, including the drydock dues and the Classification Society’s fees shall be paid by the Sellers if the Classification Society issues any condition/recommendation* as a result of the survey or if it requires survey of the tailshaft system. In all other cases the Buyers shall pay the aforesaid expenses, dues and fees. | 133 134 135 136 137 | |||
(iv) the Buyers’ representative shall have the right to be present in the drydock, but without interfering with the work or decisions of the Classification surveyor. | 138 139 | |||
(v) the Buyers shall have the right to have the underwater parts of the Vessel cleaned and painted at their risk and expense without interfering with the Sellers’ or the Classification surveyor’s work, if any, and without affecting the Vessel’s timely delivery. If, however, the Buyers’ work in drydock is still in progress when the Sellers have completed the work which the Sellers are required to do, the additional docking time needed to complete the Buyers’ work shall be for the Buyers’ risk and expense. In the event that the Buyers’ work requires such additional time, the Sellers may upon completion of the Sellers’ work tender Notice of Readiness for delivery whilst the Vessel is still in drydock and the Buyers shall be obliged to take delivery in accordance with Clause 3, whether the Vessel is in drydock or not and irrespective of Clause 5 b). | 140 141 142 143 144 145 146 147 148 149 | |||
* | Notes, if any, in the surveyor’s report which are accepted by the Classification Society without condition/recommendation are not to be taken into account. | 150 151 | ||
** | 6a) and 6 b) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 6 a) to apply. | 152 153 | ||
7. Spares/bunkers, etc. | 154 |
The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board, ashoreand on order without extra charge. All spare parts and spare equipment tail and shaft(s) and/or spare unused, whether on board or not shall become the Buyers’ property, excluded | 155 156 157 158 159 |
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replace spare parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which are taken out of spare and used as replacement prior to delivery, but the replaced items shall be the property of the Buyers. sale without extra payment if they are the property of the Sellers. provisions shall be included in the sale and be taken over by the Buyers without extra payment. | 160 161 162 163 164 | |
The Sellers have the right to take ashore crockery, plates, cutlery, linen and other articles bearing the Sellers’ flag or name, provided they replace same with similar unmarked items. Library, forms, etc., exclusively for use in the Sellers’ vessel(s), shall be excluded without compensation. Officers’ and Crew’s personal ISM and ISPS documentation and manuals as well as manuals prepared by the Manager of the Sellerare to be excluded from the sale, as well as the following additional items (including items on hire):No hired items. All Oxygen and Acetyline bottles will be removed prior to delivery. | 165 166 167 168 169 | |
SOPEP, SOLAS training manuals, cargo securing manuals and ballast water management plans will remain on board the Vessel but the Buyer to undertake to cross out all references of those documents as to the Seller and/or the Seller’s Manager. | ||
The Buyers shall take overand pay extra for the cost of oils indesignatedstorage tanks and/or in sealed/unbroached drums evidenced by Sellers’ invoices. of delivery of the Vessel Payment under this Clause shall be made at the same time and place and in the same currency as the Purchase Price. | 170 171 172 173 174 |
8. Documentation | 175 |
The place of closing:Piraeus, Greece | 176 | |||||
Documents to be listed in an addendum to this agreement | ||||||
documents, namely | 177 178 |
to register the Vessel), warranting that the Vessel is from from all encumbrances, mortgages and maritime liens or any other debts or claims whatsoever, duly notarially attested and legalized by the consul of such country or other competent authority | 179 180 181 182 | |||
the Vessel. | 183 184 | |||
185 | ||||
registered encumbrances | 186 187 | |||
deletion appropriate to the Vessel’s registry at the time of delivery, or, in the event that the registry does not as a matter of practice issue such documentation immediately, a written undertaking by the Sellers to effect deletion from the Vessel’s registry forthwith and furnish a Certificate or other official evidence of deletion to the Buyers promptly and latest within 4 (four) weeks after the Purchase Price has boon paid and the Vessel has boon delivered | 188 189 190 191 192 193 | |||
for the purpose of registering the Vessel, provided the Buyers notify the Sellers of any such documents as soon as possible after the date of this Agreement | 194 195 196 |
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At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol of Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the Buyers. | 197 198 199 | |
At the time of delivery the Sellers shall hand to the Buyers the classification certificate(s) as well as all plans etc., which are on board the Vessel. Other certificates which are on board the Vessel shall also be handed over to the Buyers unless the Sellers are required to retain same, in which case the Buyers to have the right to take copies. Other technical documentation which may be in the Sellers’ possession shall be promptly forwarded to the Buyers at their expense, if they so request. The Sellers may keep the Vessel’s log books but the Buyers to have the right to take copies of same. | 200 201 202 203 204 205 206 | |
9. Encumbrances | 207 | |
The Sellers warrant that the Vessel, at the time of delivery, is free from taxes, liens,mortgages and hereby undertake to indemnify the Buyers against all consequences of claims made against the Vessel which have been incurred prior to the time of delivery. | 208 209 210 211 | |
10. Taxes, etc. | 212 | |
Any taxes, fees and expenses in connection with the purchase and registration under the Buyers’ flag shall be for the Buyers’ account, whereas similar charges in connection with the closing of the Sellers’ register shall be for the Sellers’ account. | 213 214 215 | |
11. Condition on delivery | 216 | |
The Vessel with everything belonging to her shall be at the Sellers’ risk and expense until she is delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be delivered and taken over as she was at the time of this agreement excepted. However, the Vessel shall be delivered with her presentclass maintained and with all continuous surveys up to date, free from free of average damage affecting the Vessel’s class, and with allher classification certificates and national/international tradingcertificates, as well as all other certificates the Vessel had at the time of this agreement clean, valid andunextended without at the time of delivery. “Inspection” in this Clause 11, shall mean the Buyers’ inspection according to Clause 4 a) or 4 b), if applicable, or the Buyers’ inspection prior to the signing of this Agreement. If the Vessel is taken over without inspection, the date of this Agreement shall be the relevant date. | 217 218 219 220 221 222 223 224 225 226 227 |
* | Notes, if any, in the surveyor’s report which are accepted by the Classification Society without condition/recommendation are not to be taken into account. | 228 229 | |||
12. Name/markings | 230 | |
Upon delivery the Buyers undertake to change the name of the Vessel and alter funnel markings. | 231 | |
13. Buyers’ default | 232 | |
Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel this Agreement, and they shall be entitled to claim compensation for their losses and for all expenses incurred together with interest, Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right to cancel the Agreement, in which case the deposit together with interest earned shall be released to the Sellers. If the deposit does not cover their loss, the Sellers shall be entitled to claim further compensation for their losses and for all expenses incurred together with interest. | 233 234 235 236 237 238 239 |
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14. Sellers’ default | 240 | |
Should the Sellers fall to give Notice of Readiness in accordance with Clause 5 a) or fail to be ready to validly complete a legal transfer by the date stipulated in line 61 the Buyers shall have the option of cancelling this Agreement provided always that the Sellers shall be granted a maximum of 3 banking days after Notice of Readiness has been given to make arrangements for the documentation set out in Clause 8. If after Notice of Readiness has been given but before the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not made physically ready again in every respect by the date stipulated in line 61 and new Notice of Readiness given, the Buyers shall retain their option to cancel. In the event that the Buyers elect to cancel this Agreement the deposit together with interest earned shall be released to them immediately. | 241 242 243 244 245 246 247 248 249 250 | |
Should the Sellers fail to give Notice of Readiness by the date stipulated in line 61 or fail to be ready to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for their loss and for all expenses together with interest if their failure is due to proven negligence and whether or not the Buyers cancel this Agreement. | 251 252 253 254 | |
15.Buyers’ representatives | 255 | |
After this Agreement has been signed by both parties and the10 percentdeposit has been lodged, the Buyers have the right to place two(2)representatives on board the Vessel at their sole risk and expense arrival at These representatives are on board for the purpose of familiarisation and in the capacity of observers only, and they shall not interfere in any respect with thenormaloperation of the Vesselup to and including her delivery. The existing crew will provide due assistance for familiarisation.The Buyers’ representatives shall sign the Sellersprior to their embarkation. | 256 257 258 259 260 261 | |
16.Arbitration | 262 |
a)* | This Agreement shall be governed by and construed in accordance with English law and any dispute arising out of this Agreement shall be referred to arbitration in London in accordance with the Arbitration Acts 1950 and 1979 or any statutory modification or re-enactment thereof for the time being in force, one arbitrator being appointed by each party. On the receipt by one party of the nomination in writing of the other party’s arbitrator, that party shall appoint their arbitrator within fourteen days, failing which the decision of the single arbitrator appointed shall apply. If two arbitrators properly appointed shall not agree they shall appoint an umpire whose decision shall be final. | 263 264 265 266 267 268 269 270 | ||
United States Code and the Law of the State of New York and should any dispute arise out of this Agreement, the matter in dispute shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them shall be final, and for purpose of enforcing any award, this Agreement may be made a rule of the Court. | 271 272 273 274 275 276 | |||
Arbitrators, Inc. Now York. | 277 278 | |||
, subject to the procedures applicable there. The laws of shall govern this Agreement. | 279 280 281 | |||
* | 16 a), 16 b) and 16 c) are alternatives; delete whichever is not applicable.In the absence of deletions, alternative 16 a) 283 to apply. | 282 283 |
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the best of the Sellers’ knowledge, the Vessel under their current ownership has not
been blacklisted by any nation including the Arab Boycott League.
February 2008 to messrs COSCO Bulk Carrier Americas Inc (Cosbulk Americas)
Secaucus, N.J., U.S.A for a period of minimum 690 days max 760 days, exact period
in chopt, with hire rates as follows:
Usd 65,000 for the subsequent 365 days on hire
Usd 34,000 for the subsequent 210 days on hire
Usd 60,000 for the subsequent 65 days on hire
accepted by them.
and the Buyer as Novatee at terms and conditions to be mutually agreed between
those parties to the effect that as from an agreed effective date the Novatee will step in
to the shoes of the Novator in relation to the Charter.
to the Buyer and commencement of the charter to Irika Shipping S.A.
a) | The Guarantor’s Board of Director’s Approval to be lifted by latest 30th September 2008. |
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b) | The approval of the Buyer as new managers of the Vessel by the Time Charterers to be lifted latest within 7 working days from the time when the Guarantor will lift it’s subject per paragraph a) above. | ||
It is understood that Buyers shall take over this Charter Party in accordance with the terms of a standard Novation agreement as per Clause 19 hereabove, the consent of the parties to such terms not to be unreasonably witheld. However, in the unlikely even that the Time Charterers will not approve the Buyers as the new managers of the Vessel, Irika Shipping S.A. undertake to remain in the chain of the Charter Party on a back-to-back basis with the Charterers and the Buyers and even more to continue to be involved in the management of the Vessel (operational, technical or otherwise) so that the sale to effected irrespectively. |
/s/ Julian Brynteson, H. Clarkson & Co. Ltd, Attorney in Fact | /s/ Gabriel Panayotides, Chief Executive Officer and President |
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MEMORANDUM OF AGREEMENT | Norwegian Shipbrokers’ Association’s Memorandum of Agreement for sale and purchase of ships. Adopted by The Baltic and International Maritime Council (BIMCO) in 1956. Code-name SALEFORM 1993 Revised 1966, 1983 and 1986/87. |
Dated:20th August 2008 | ||
Iris Marine Carriers S.A., Panama hereinafter called the Sellers, have agreed to sell, and | 1 | |
Gavial Marine Corporation, Liberia, a guaranteed nominee of Oceanaut Inc., Marshall Islands hereinafter called the Buyers, have agreed to buy | 2 | |
Name:m/v “IRIS II” | 3 | |
Classification Society/Class:NK Class Built: 2004 By:Sanoyas Shipyard, Japan Flag: Panamax Place of Registration:Panama Call Sign:3EPS5 Grt/Nrt: 38,871/25,194 | 4 5 6 7 8 | |
hereinafter called the Vessel, on the following terms and conditions: | 9 | |
Definitions | 10 | |
“Banking days” are days on which banks are open both in the country of the currency stipulated for the Purchase Price in Clause 1 and in the place of closing stipulated in Clause 8. | 11 12 | |
“In writing” or “written” means a letter handed over from the Sellers to the Buyers or vice versa, a registered letter, telex, telefax or other modern form of written communication. | 13 14 | |
“Classification Society” or “Class” means the Society referred to in line 4. | 15 |
1.Purchase PriceUsd 93,000,000(United States Dollars Ninety Three Million) | 16 | |||
2.Deposit | 17 |
As security for the correct fulfilment of this Agreement the Buyers shall (ten per cent) of the Purchase Price within3 (three)banking daysafter all subjects having been lifted and unspacking has occurred andfrom the date of this Agreementhaving been signed by both parties on a facsimile form, whichever the latter. This deposit shall be placed withthe Sellers’ nominated bank | 18 19 20 | |
andshall be held by them in a jointinterest bearing account for the Sellers and the Buyers, to be released in accordance with joint written instructions of the Sellers and the Buyers. Interest to be credited to the Buyers. Any fee charged for holding the said deposit shall be borne equally by the Sellers and the Buyers.Banking fees, if any, for holding the deposit shall be split equally between the Buyers and Sellers. Any bank charges of Sellers’ Bank to be for Sellers’ account. | 21 22 23 | |
Any bank charges of Buyers’ bank to be for Buyers’ account. | 24 | |
3.Payment | 25 | |
Therelease of the 10 percent deposit along with value of R.O.B. lubricants (per 7 herein) shall be paid in full free ofany bank charges to Sellers’ nominated bank on delivery of the Vessel, but not later than 3(three)banking days after the Vessel is in every respect physically ready for delivery in accordance with the terms and conditions of this Agreement and a valid Notice of Readiness has been | 26 27 28 29 |
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requried for the registration of each Vessel under the Buyers’ flag of choice. Any closing charges to be borne equally between the Buyers and Sellers.
4.Inspections | 30 |
have also inspected the Vessel at/in on and have accepted the Vessel following this inspection and the sale is outright and definite, subject only to the forms and conditions of this Agreement. | 31 32 33 34 | |||
whether same are accepted or not within | 35 36 | |||
37 | ||||
Buyers cause undue delay they shall compensate the Sellers for the losses thereby incurred. The Buyers shall inspect the Vessel without opening up and without cost to the Sellers. During the inspection, the Vessel’s deck and engine log books shall be made available for examination by the Buyers. If the Vessel is accepted after such inspection, the sale shall become outright and definite subject only to the terms and conditions of this Agreement, provided the Sellers receive written notice of acceptance from the Buyers within 72 hours after completion of such inspection. | 38 39 40 41 42 43 44 45 | |||
received by the Sellers as aforesaid, the deposit together with interest earned shall be released immediately to the Buyers, whereafter this Agreement shall be null and void. | 46 47 48 | |||
* | alternative 4a) to apply. | 49 50 | ||
5.Notices, time and place of delivery | 51 | |||
a) | The Sellers shall keep the Buyers well provide the Buyers with30, 15, 7and3daysapproximatenotice of the estimated time of Readiness onlyWhen the Vessel is at the place of delivery andisin Agreementand on successful completion of Divers’ inspection., | 52 53 54 55 56 | ||
b) | The Vessel shall be deliveredto the Buyers after Divers’ inspection, which should be carried out at the port of delivery free of cargoand taken over safely afloat at a safe and accessible berth/port or anchorage in the Sellers’ option. | 57 58 59 | ||
Expected time of delivery;between 1st October 2008 and 1st December 2008 | 60 | |||
Date of cancelling (see Clauses 5 c), 6 b) (iii) and 14):1st December 2008 in the option of the Buyers. | 61 | |||
In the event that the Buyers are able to lift their subjects described herein prior to the 30th |
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September 2008 then the above laycan and cencelling dates to be brought forward by the same number of days but always giving the Sellers two clear months within which to deliver the Vessel from the time of such subjects being lifted. | ||||
c) | If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the Vessel will not be ready for delivery by the cancelling date they may notify the Buyers in writing stating the date when they anticipate that the Vessel will be ready for delivery and propose a new cancelling date. Upon receipt of such notification the Buyers shall have the option of either cancelling this Agreement in accordance with Clause 14 within 7 running days of receipt of the notice or of accepting the new date as the new cancelling date. If the Buyers have not declared their option within 7 running days of receipt of the Sellers’ notification or if the Buyers accept the new date, the date proposed in the Sellers’ notification shall be deemed to be the new cancelling date and shall be substituted for the cancelling date stipulated in line 61. | 62 63 64 65 66 67 68 69 70 71 | ||
If this Agreement is maintained with the new cancelling date all other terms and conditions hereof including those contained in Clauses 5 a) and 5 c) shall remain unaltered and in full force and effect. Cancellation or failure to cancel shall be entirely without prejudice to any claim for damages the Buyers may have under Clause 14 for the Vessel not being ready by the original cancelling date. | 72 73 74 75 76 | |||
d) | Should the Vessel become an actual, constructive or compromised total loss before delivery the deposit together with interest earned shall be released immediately to the Buyers whereafter this Agreement shall be null and void. | 77 78 79 | ||
6. | Drydocking/Divers Inspection | 80 | ||
Classification Society of the Vessel’s underwater parts below the deepest load line, the extent of the inspection being in accordance with the Classification Society’s rules. If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class, such defects shall be made good at the Sellers’ expense to the satisfaction of the Classification Society without condition/recommendation*. | 81 82 83 84 85 86 87 | |||
b)** | (i) The Vessel is to be delivered without drydocking. However, the Buyers shall have the right at their expense to arrange for an underwater inspection by a diver approved by the Classification Society prior to the delivery of the Vessel. The Sellers shall at their cost make the Vessel available for such inspection. The extent of the inspection and the conditions under which it is performed shall be to the satisfaction of the Classification Society. If the conditions at the port of delivery are unsuitable for such inspection, the Sellers shall make the Vessel available at a suitable alternative place near to the delivery port. | 88 89 90 91 92 93 94 95 | ||
In the event that the Divers’ inspection reveals any damage to the Vessel’s underwater parts which would impose a condition against the Vessel’s present Class and Class imposes a condition but the Vessel is not required to be repaired before her next scheduled Drydocking, then Sellers shall pay to the Buyers the estimated cost to repair such damage in a way which is acceptable to the Class and which shall be the direct cost of the repair, excluding Drydocking costs, for such damage only and to be based on the mean of two quotations given by nearest ship yards, one chosen by the Sellers and one chosen by the Buyers. The amount as agreed shall be deducted from the balance of the purchase money at the time of Delivery. | ||||
(ii) If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class,the repair of which cannot be postponed until the Vessel’s next scheduled Drydocking,then unless repairs can be carried out afloat to the satisfaction of the Classification Society, the Sellers shall arrange for the Vessel to be drydocked at their expense for inspection by the Classification Society of the Vessel’s underwater parts below the deepest load line, the extent of the inspection being in accordance with the Classification Society’s rules. If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class, such defects shall be made good by the Sellers at their expense to the satisfaction of the Classification Society without condition/recommendation*. In such event the Sellers are to pay also for the cost of | 96 97 98 99 100 101 102 103 104 105 |
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the underwater inspection and the Classification Society’s attendance. | 106 | |||
(iii) If the Vessel is to be drydocked pursuant to Clause 6 b) (ii) and no suitable dry- docking facilities are available at the port of delivery, the Sellers shall take the Vessel to a port where suitable drydocking facilities are available, whether within or outside the delivery range as per Clause 5 b). Once drydocking has taken place the Sellers shall deliver the Vessel at a port within the delivery range as per Clause 5 b) which shall, for the purpose of this Clause, become the new port of delivery. In such event the cancelling date provided for in Clause 5 b) shall be extended by the additional time required for the drydocking and extra steaming, but limited to a maximum of 14 running days. | 107 108 109 110 111 112 113 114 | |||
c) | If the Vessel is drydocked pursuant to Clause | 115 | ||
(i) the Classification Society may require survey of the tailshaft system, the extent of the survey being to the satisfaction of the Classification surveyor. If such survey is not required by the Classification Society, the Buyers shall have the right to require the tailshaft to be drawn and surveyed by the Classification Society, the extent of the survey being in accordance with the Classification Society’s rules for tailshaft survey and consistent with the current stage of the Vessel’s survey cycle. The Buyers shall declare whether they require the tailshaft to be drawn and surveyed not later than by the completion of the inspection by the Classification Society. The drawing and refitting of the tailshaft shall be arranged by the Sellers. Should any parts of the tailshaft system be condemned or found defective so as to affect the Vessel’s class, those parts shall be renewed or made good at the Sellers’ expense to the satisfaction of the Classification Society without condition/recommendation*. | 116 117 118 119 120 121 122 123 124 125 126 127 | |||
(ii) the expenses relating to the survey of the tailshaft system shall be borne by the Buyers unless the Classification Society requires such survey to be carried out, in which case the Sellers shall pay these expenses. The Sellers shall also pay the expenses if the Buyers require the survey and parts of the system are condemned or found defective or broken so as to affect the Vessel’s class*. | 128 129 130 131 132 | |||
(iii) the expenses in connection with putting the Vessel in and taking her out of drydock, including the drydock dues and the Classification Society’s fees shall be paid by the Sellers if the Classification Society issues any condition/recommendation* as a result of the survey or if it requires survey of the tailshaft system. In all other cases the Buyers shall pay the aforesaid expenses, dues and fees. | 133 134 135 136 137 | |||
(iv) the Buyers’ representative shall have the right to be present in the drydock, but without interfering with the work or decisions of the Classification surveyor. | 138 139 | |||
(v) the Buyers shall have the right to have the underwater parts of the Vessel cleaned and painted at their risk and expense without interfering with the Sellers’ or the Classification surveyor’s work, if any, and without affecting the Vessel’s timely delivery. If, however, the Buyers’ work in drydock is still in progress when the Sellers have completed the work which the Sellers are required to do, the additional docking time needed to complete the Buyers’ work shall be for the Buyers’ risk and expense. In the event that the Buyers’ work requires such additional time, the Sellers may upon completion of the Sellers’ work tender Notice of Readiness for delivery whilst the Vessel is still in drydock and the Buyers shall be obliged to take delivery in accordance with Clause 3, whether the Vessel is in drydock or not and irrespective of Clause 5 b). | 140 141 142 143 144 145 146 147 148 149 | |||
* | Notes, if any, in the surveyor’s report which are accepted by the Classification Society without condition/recommendation are not to be taken into account. | 150 151 | ||
** | 6 a) and 6 b) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 6 a) to apply. | 152 153 | ||
7.Spares/bunkers, etc. | 154 | |||
The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board, ashoreand on order without extra charge.All spare parts and spare equipment tail and shaft(s) and/or spare propeller(s)/propeller blade(s), excluded. | 155 156 157 158 159 |
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replace spare parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which are taken out of spare and used as replacement prior to delivery, but the replaced items shall be the property of the Buyers. without extra payment if they are the property of the Sellers. provisions shall be included in the sale and be taken over by the Buyers without extra payment. | 160 161 162 163 164 | |||
The Sellers have the right to take ashore crockery, plates, cutlery, linen and other articles bearing the Sellers’ flag or name, provided they replace same with similar unmarked items. Library, forms, etc., exclusively for use in the Sellers’ vessel(s), shall be excluded without compensation. Officers’ and Crew’s personal ISM and ISPS documentation and manuals as well as manuals prepared by the Manager of theSellerare to be excluded from the sale, as well as the following additional items (including items on hire):No hired items. All Oxygen and Acetyline bottles will be removed prior to delivery. | 165 166 167 168 169 | |||
SOPEP, SOLAS training manuals, cargo securing manuals and ballast water management plans will remain on board the Vessel but the Buyer to undertake to cross out all references of those documents as to the Seller and/or the Seller’s Manager. | ||||
The Buyers shall take overand pay extra for the cost of oils indesignatedstorage tanks and/or in sealed/unbroacheddrums evidenced by Sellers’ invoices. of delivery of the Vessel. Payment under this Clause shall be made at the same time and place and in the same currency as the Purchase Price. | 170 171 172 173 |
8.Documentation | 175 |
The place of closing:Piraeus, Greece | 176 |
documents, namely: | 177 178 |
to register the Vessel), warranting that the Vessel is free from all encumbrances, mortgages and maritime lions or any other debts or claims whatsoever, duly notarially attested and legalized by the consul of such country or other competent authority. | 179 180 181 182 | |||
the Vessel. | 183 184 | |||
185 | ||||
registered encumbrances. | 186 187 | |||
deletion appropriate to the Vessel’s registry at the time of delivery, or, in the event that the registry does not as a matter of practice issue such documentation immediately, a written undertaking by the Sellers to effect deletion from the Vessel’s registry forthwith and furnish a Certificate or other official evidence of deletion to the Buyers promptly and latest within 4 (four) weeks after the Purchase Price has been paid and the Vessel has been delivered. | 188 189 190 191 192 193 | |||
for the purpose of registering the Vessel, provided the Buyers notify the Sellers of any such documents as soon as possible after the date of this Agreement. | 194 195 196 |
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At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol of Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the Buyers. | 197 198 199 |
At the time of delivery the Sellers shall hand to the Buyers the classification certificate(s) as well as all plans etc., which are on board the Vessel. Other certificates which are on board the Vessel shall also be handed over to the Buyers unless the Sellers are required to retain same, in which case the Buyers to have the right to take copies. Other technical documentation which may be in the Sellers’ possession shall be promptly forwarded to the Buyers at their expense, if they so request. The Sellers may keep the Vessel’s log books but the Buyers to have the right to take copies of same. | 200 201 202 203 204 205 206 |
9.Encumbrances | 207 |
The Sellers warrant that the Vessel, at the time of delivery, is free from taxes, liens,mortgages and hereby undertake to indemnify the Buyers against all consequences of claims made against the Vessel which have been incurred prior to the time of delivery. | 208 209 210 211 |
10.Taxes, etc. | 212 |
Any taxes, fees and expenses in connection with the purchase and registration under the Buyers’ flag shall be for the Buyers’ account, whereas similar charges in connection with the closing of the Sellers’ register shall be for the Sellers’ account. | 213 214 215 |
11.Condition on delivery | 216 |
The Vessel with everything belonging to her shall be at the Sellers’ risk and expense until she is delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be delivered and taken over as she was at the time ofthis agreement | 217 218 219 |
However, the Vessel shall be delivered with herpresentclass maintainedand with all continuous surveys up to date, free from free of average damage affecting the Vessel’s class, and withall her classification certificates and national/international tradingcertificates, as well as all other certificates the Vessel had at the time of this agreement clean, valid andunextended without at the time of delivery. | 220 221 222 223 224 |
“Inspection” in this Clause 11, shall mean the Buyers’ inspection according to Clause 4 a) or 4 b), if applicable, or the Buyers’ inspection prior to the signing of this Agreement. If the Vessel is taken over without inspection, the date of this Agreement shall be the relevant date. | 225 226 227 |
* | Notes, if any, in the surveyor’s report which are accepted by the Classification Society without condition/recommendation are not to be taken into account. | 228 229 |
12.Name/markings | 230 |
Upon delivery the Buyers undertake to change the name of the Vessel and alter funnel markings. | 231 |
13.Buyers’ default | 232 |
Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel this Agreement, and they shall be entitled to claim compensation for their losses and for all expenses incurred together with interest. | 233 234 235 |
Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right to cancel the Agreement, in which case the deposit together with interest earned shall be released to the Sellers. If the deposit does not cover their loss, the Sellers shall be entitled to claim further compensation for their losses and for all expenses incurred together with interest. | 236 237 238 239 |
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14.Sellers’ default | 240 |
Should the Sellers fail to give Notice of Readiness in accordance with Clause 5 a) or fail to be ready to validly complete a legal transfer by the date stipulated in line 61 the Buyers shall have the option of cancelling this Agreement provided always that the Sellers shall be granted a maximum of 3 banking days after Notice of Readiness has been given to make arrangements for the documentation set out in Clause 8. If after Notice of Readiness has been given but before the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not made physically ready again in every respect by the date stipulated in line 61 and new Notice of Readiness given, the Buyers shall retain their option to cancel. In the event that the Buyers elect to cancel this Agreement the deposit together with interest earned shall be released to them immediately. Should the Sellers fail to give Notice of Readiness by the date stipulated in line 61 or fail to be ready to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for their loss and for all expenses together with interest if their failure is due to proven negligence and whether or not the Buyers cancel this Agreement. | 241 242 243 244 245 246 247 248 249 250 251 252 253 254 |
15.Buyers’ representatives | 255 |
After this Agreement has been signed by both parties and the10 percent deposit has been lodged, the Buyers have the right to place two(2) representatives on board the Vessel at their sole risk and expense arrival at These representatives are on board for the purpose of familiarisation and in the capacity of observers only, and they shall not interfere in any respect with thenormaloperation of the Vesselup to and including her delivery. The existing crew will provide due assistance for familiarisation.The Buyers’ representatives shall sign the Sellers prior to their embarkation. | 256 257 258 259 260 261 |
16.Arbitration | 262 |
a)* | This Agreement shall be governed by and construed in accordance with English law and any dispute arising out of this Agreement shall be referred to arbitration in London in accordance with the Arbitration Acts 1950 and 1979 or any statutory modification or re-enactment thereof for the time being in force, one arbitrator being appointed by each party. On the receipt by one party of the nomination in writing of the other party’s arbitrator, that party shall appoint their arbitrator within fourteen days, failing which the decision of the single arbitrator appointed shall apply. If two arbitrators properly appointed shall not agree they shall appoint an umpire whose decision shall be final. | 263 264 265 266 267 268 269 270 | ||
United State Code and the Law of the State of New York and should any dispute arise out of this Agreement, the matter in dispute shall be referred to three persons at Now York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them shall be final, and for purpose of enforcing any award, this Agreement may be made a rule of the Court. The proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc. New York. | 271 272 273 274 275 276 277 278 | |||
subject to the procedures applicable there. The laws of shall govern this Agreement. | 279 280 281 |
* | 16 a), 16 b) and 16 c) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 16 a) to apply. | 282 283 |
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software which is the copyright of Strategic Software Ltd. Any insertion or deletion to the form must be clearly visible. In the event of any
modification made to the preprinted text of this document, the original document shall apply. The Norwegian Shipbrokers’ Association and
Strategic Software Ltd. assume no responsibility for any loss or damage caused as a result of discrepancies between the original approved
document and this document.
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the best of the Sellers’ knowledge, the Vessel under their current ownership has not
been blacklisted by any nation including the Arab Boycott League.
December 2007 to messrs Mitsui OSK Lines of Tokyo (she has been delivered to
charterers’ service on 29th February 2008) for a period of about 59 to 61 months
(where about means 15 days) with the following hire rates:
Usd 44,000 diot for the second year
Usd 42,000 diot for the third year
Usd 39,500 diot for the fourth year
Usd 34,500 diot for the fifth year
accepted by them.
and the Buyer as Novatee at terms and conditions to be mutually agreed between
those parties to the effect that as from an agreed effective date the Novatee will step in
to the shoes of the Novator in relation to the Charter.
to the Buyer and commencement of the charter to Irika Shipping S.A.
a) | The Guarantor’s Board of Director’s Approval to be lifted by latest 30th September 2008. |
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b) | The approval of the Buyer as new owners/managers of the Vessel by the Time Charterers to be lifted latest within 7 working days from the time when the Guarantor will lift it’s subject per paragraph a) above. |
/s/ Julian Brynteson, H. Clarkson & Co. Ltd, Attorney in Fact | /s/ Gabriel Panayotides, Chief Executive Officer and President | |
For the Sellers | For the Buyers |
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MEMORANDUM OF AGREEMENT | Norwegian Shipbrokers’ Association’s Memo- randum of Agreement for sale and purchase of ships. Adopted by The Baltic and International Maritime Council (BIMCO) in 1956. Code-name SALEFORM 1993 Revised 1966, 1983 and 1986/87. |
Dated:20th August 2008 | ||
Sea Triumph Maritime S.A., Panama hereinafter called the Sellers, have agreed to sell, and Tunmore Shipholding Co., Liberia, a guaranteed nominee of Oceanaut Inc., Marshall Islands hereinafter called the Buyers, have agreed to buy | 1 2 | |
Name:m/v “Medi Cebu” | 3 | |
Classification Society/Class:BV Class Built: 2002 By:Tsuneishi Cebu Shipyard, Philippines Flag: Panama Place of Registration:Panama Call Sign:3EMB5 Grt/Nrt: 30,011/17,843 | 4 5 6 7 8 | |
hereinafter called the Vessel, on the following terms and conditions: | 9 | |
Definitions | 10 | |
“Banking days” are days on which banks are open both in the country of the currency stipulated for the Purchase Price in Clause 1 and in the place of closing stipulated in Clause 8. | 11 12 | |
“In writing” or “written” means a letter handed over from the Sellers to the Buyers or vice versa, a registered letter, telex, telefax or other modern form of written communication. | 13 14 | |
“Classification Society” or “Class” means the Society referred to in line 4. | 15 | |
1. Purchase PriceUsd 72,500,000 (United States Dollars Seventy Two Million and Five Hundred Thousand) | 16 | |
2. Deposit | 17 | |
As security for the correct fulfilment of this Agreement the Buyers shall (ten per cent) of the Purchase Price within3(three)banking daysafter all subjects having been lifted and unspacking has occurred andfrom the date of this Agreementhaving been signed by both parties on a facsimile form, whichever the latter.This deposit shall be placed withthe Sellers’ nominated bank | 18 19 20 | |
andshall be held by them in a jointinterest bearing account for the Sellers and the Buyers, to be released in accordance with joint written instructions of the Sellers and the Buyers. Interest, to be credited to the Buyers. Any fee charged for holding the said deposit shall be borne equally by the Sellers and the Buyers.Banking fees, if any, for holding the deposit shall be split equally between the Buyers and Sellers. Any bank charges of Sellers’ Bank to be for Sellers’ account. Any bank charges of Buyers’ bank to be for Buyers’ account. | 21 22 23 24 | |
3. Payment | 25 | |
Therelease of the 10 percent deposit along with value of R.O.B. lubricants (per 7 herein)shall be paid in full free ofanybank charges to Sellers’ nominated bank on delivery of the Vessel, but not later than 3(three)banking days after the Vessel is in every respect physically ready for delivery in accordance with the terms and conditions of this Agreement and a valid Notice of Readiness has been | 26 27 28 29 |
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and other usual delivery documents requried for the registration of each Vessel under the Buyers’
flag of choice. Any closing charges to be borne equally between the Buyers and Sellers.
4. Inspections | 30 |
transaction is outright and subject only to the terms hereto.
have also inspected the Vessel at/in and have accepted the Vessel following this inspection and the sale is outright and definite, subject only to the terms and conditions of this Agreement. | 31 32 33 34 | |||
whether same are accepted or not within | 35 36 | |||
37 | ||||
Buyers cause undue delay they shall compensate the Sellers for the losses thereby incurred. The Buyers shall inspect the Vessel without opening up and without cost to the Sellers. During the inspection, the Vessel’s dock and engine log books shall be made available for examination by the Buyers, If the Vessel is accepted after such inspection, the sale shall become outright and definite, subject only to the terms and conditions of this Agreement, provided the Sellers receive written notice of acceptance from the Buyers within 72 hours after completion of such inspection. Should notice of acceptance of the Vessel’s classification records and of the Vessel not be received by the Sellers as aforesaid, the deposit together with interest earned shall be released immediately to the Buyers, whereafter this Agreement shall be null and void. | 38 39 40 41 42 43 44 45 46 47 48 | |||
alternative 4a) to apply. | 49 50 | |||
5. | Notices, time and place of delivery | 51 | ||
a) | The Sellers shall keep the Buyers well movementsand shall provide the Buyers with30 ,15 , 7and3daysapproximatenotice of the estimated time of intended place of drydocking/underwater inspection/delivery Readiness onlyWhen the Vessel is at the place of delivery andis in this Agreementand on successful completion of Divers’ inspection., Buyers a written Notice of Readiness for delivery | 52 53 54 55 56 | ||
b) | The Vessel shall be deliveredto the Buyers after Divers’ inspection, which should be carried out at the port of delivery free of cargoand taken over safely afloat at a safe and accessible berth/portor anchorage port worldwide | 57 58 | ||
in the Sellers’ option. | 59 | |||
Expected time of delivery:between 1st October 2008 and 1st December 2008 | 60 | |||
Date of cancelling (see Clauses 5 c), 6 b) (iii) and 14):1st December 2008 in the option of the Buyers. | 61 | |||
In the event that the Buyers are able to lift their subjects described herein prior to the 30th |
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same number of days but always giving the Sellers two clear months within which to deliver
the Vessel from the time of such subjects being lifted.
c) | If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the Vessel will not be ready for delivery by the cancelling date they may notify the Buyers in writing stating the date when they anticipate that the Vessel will be ready for delivery and propose a new cancelling date. Upon receipt of such notification the Buyers shall have the option of either cancelling this Agreement in accordance with Clause 14 within 7 running days of receipt of the notice or of accepting the new date as the new cancelling date. If the Buyers have not declared their option within 7 running days of receipt of the Sellers’ notification or if the Buyers accept the new date, the date proposed in the Sellers’ notification shall be deemed to be the new cancelling date and shall be substituted for the cancelling date stipulated in line 61. | 62 63 64 65 66 67 68 69 70 71 | ||
If this Agreement is maintained with the new cancelling date all other terms and conditions hereof including those contained in Clauses 5 a) and 5 c) shall remain unaltered and in full force and effect. Cancellation or failure to cancel shall be entirely without prejudice to any claim for damages the Buyers may have under Clause 14 for the Vessel not being ready by the original cancelling date. | 72 73 74 75 76 |
d) | Should the Vessel become an actual, constructive or compromised total loss before delivery the deposit together with interest earned shall be released immediately to the Buyers whereafter this Agreement shall be null and void. | 77 78 79 | ||
6. | Drydocking/Divers Inspection | 80 | ||
Classification Society of the Vessel’s underwater parts below the deepest load line, the extent of the inspection being in accordance with the Classification Society’s rules. If the rudder, propeller, bottom or other underwater ports below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class, such defects shall be made good at tho Sellers’ expense to the satisfaction of the Classification Society without condition/recommendation*. | 81 82 83 84 85 86 87 | |||
b)** | (i) The Vessel is to be delivered without drydocking. However, the Buyers shall have the right at their expense to arrange for an underwater inspection by a diver approved by the Classification Society prior to the delivery of the Vessel. The Sellers shall at their cost make the Vessel available for such inspection. The extent of the inspection and the conditions under which it is performed shall be to the satisfaction of the Classification Society. If the conditions at the port of delivery are unsuitable for such inspection, the Sellers shall make the Vessel available at a suitable alternative place near to the delivery port. | 88 89 90 91 92 93 94 95 | ||
In the event that the Divers’ inspection reveals any damage to the Vessel’s underwater parts which would impose a condition against the Vessel’s present Class and Class imposes a condition but the Vessel is not required to be repaired before her next scheduled Drydocking, then Sellers shall pay to the Buyers the estimated cost to repair such damage in a way which is acceptable to the Class and which shall be the direct cost of the repair, excluding Drydocking costs, for such damage only and to be based on the mean of two quotations given by nearest ship yards, one chosen by the Sellers and one chosen by the Buyers. The amount as agreed shall be deducted from the balance of the purchase money at the time of Delivery. | ||||
(ii) If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class,the repair of which cannot be postponed until the Vessel’s next scheduled Drydocking, then unless repairs can be carried out afloat to the satisfaction of the Classification Society, the Sellers shall arrange for the Vessel to be drydocked at their expense for inspection by the Classification Society of the Vessel’s underwater parts below the deepest load line, the extent of the inspection being in accordance with the Classification Society’s rules. If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class, such defects shall be made good by the Sellers at their expense to the satisfaction of the Classification Society without condition/recommendation*. In such event the Sellers are to pay also for the cost of | 96 97 98 99 100 101 102 103 104 105 |
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the underwater inspection and the Classification Society’s attendance. | 106 | |
(iii) If the Vessel is to be drydocked pursuant to Clause 6 b) (ii) and no suitable dry- docking facilities are available at the port of delivery, the Sellers shall take the Vessel to a port where suitable drydocking facilities are available, whether within or outside the delivery range as per Clause 5 b). Once drydocking has taken place the Sellers shall deliver the Vessel at a port within the delivery range as per Clause 5 b) which shall, for the purpose of this Clause, become the new port of delivery. In such event the cancelling date provided for in Clause 5 b) shall be extended by the additional time required for the drydocking and extra steaming, but limited to a maximum of 14 running days. | 107 108 109 110 111 112 113 114 |
c) | If the Vessel is drydocked pursuant to Clause 6 a) or 6 b) above | 115 |
(i) the Classification Society may require survey of the tailshaft system, the extent of the survey being to the satisfaction of the Classification surveyor. If such survey is not required by the Classification Society, the Buyers shall have the right to require the tailshaft to be drawn and surveyed by the Classification Society, the extent of the survey being in accordance with the Classification Society’s rules for tailshaft survey and consistent with the current stage of the Vessel’s survey cycle. The Buyers shall declare whether they require the tailshaft to be drawn and surveyed not later than by the completion of the inspection by the Classification Society. The drawing and refitting of the tailshaft shall be arranged by the Sellers. Should any parts of the tailshaft system be condemned or found defective so as to affect the Vessel’s class, those parts shall be renewed or made good at the Sellers’ expense to the satisfaction of the Classification Society without condition/recommendation*. | 116 117 118 119 120 121 122 123 124 125 126 127 | |
(ii) the expenses relating to the survey of the tailshaft system shall be borne by the Buyers unless the Classification Society requires such survey to be carried out, in which case the Sellers shall pay these expenses. The Sellers shall also pay the expenses if the Buyers require the survey and parts of the system are condemned or found defective or broken so as to affect the Vessel’s class*. | 128 129 130 131 132 | |
(iii) the expenses in connection with putting the Vessel in and taking her out of drydock, including the drydock dues and the Classification Society’s fees shall be paid by the Sellers if the Classification Society issues any condition/recommendation* as a result of the survey or if it requires survey of the tailshaft system. In all other cases the Buyers shall pay the aforesaid expenses, dues and fees. | 133 134 135 136 137 | |
(iv) the Buyers’ representative shall have the right to be present in the drydock, but without interfering with the work or decisions of the Classification surveyor. | 138 139 | |
(v) the Buyers shall have the right to have the underwater parts of the Vessel cleaned and painted at their risk and expense without interfering with the Sellers’ or the Classification surveyor’s work, if any, and without affecting the Vessel’s timely delivery. If, however, the Buyers’ work in drydock is still in progress when the Sellers have completed the work which the Sellers are required to do, the additional docking time needed to complete the Buyers’ work shall be for the Buyers’ risk and expense. In the event that the Buyers’ work requires such additional time, the Sellers may upon completion of the Sellers’ work tender Notice of Readiness for delivery whilst the Vessel is still in drydock and the Buyers shall be obliged to take delivery in accordance with Clause 3, whether the Vessel is in drydock or not and irrespective of Clause 5 b). | 140 141 142 143 144 145 146 147 148 149 |
* | Notes, if any, in the surveyor’s report which are accepted by the Classification Society without condition/recommendation are not to be taken into account. | 150 151 | ||
** | 6 a) and 6 b) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 6 a) to apply. | 152 153 | ||
7. | Spares/bunkers, etc. | 154 |
The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board, ashoreand on order without extra charge.All spare parts and spare equipment tail and shaft(s) and/or spare unused, whether on board or not shall become the Buyers’ property. excluded. | 155 156 157 158 159 |
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replace spare parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which are taken out of spare and used as replacement prior to delivery, but the replaced items shall be the property of the Buyers. sale | 160 161 162 | |
without extra payment if they are the property of the Sellers. provisions shall be included in the sale and be taken over by the Buyers without extra payment. | 163 164 | |
The Sellers have the right to take ashore crockery, plates, cutlery, linen and other articles bearing the Sellers’ flag or name, provided they replace same with similar unmarked items. Library, forms, etc., exclusively for use in the Sellers’ vessel(s), shall be excluded without compensation. | 165 166 167 | |
Officers’ and Crew’s personal ISM and ISPS documentation and manuals as well as manuals prepared by the Manager of the Seller are to be excluded from the sale, as well as the following additional items (including items on hire):No hired items. All Oxygen and Acetyline bottles will be removed prior to delivery. | 168 169 | |
SOPEP, SOLAS training manuals, cargo securing manuals and ballast water management plans will remain on board the Vessel but the Buyer to undertake to cross out all references of those documents as to the Seller and/or the Seller’s Manager. | ||
The Buyers shall take overand pay extra for the cost of oils indesignatedstorage tanks and/or insealed/unbroacheddrums evidenced by Sellers’ invoices, of delivery of the Vessel. | 170 171 172 | |
Payment under this Clause shall be made at the same time and place and in the same currency as the Purchase Price. | 173 174 |
8. | Documentation | 175 |
The place of closing:Piraeus, Greece | 176 | |
Documents to be listed in an addendum to this agreement. | ||
documents, namely: | 177 178 |
to register the Vessel), warranting that the Vessel is free from all encumbrances, mortgages and maritime liens or any other debts or claims whatsoever, duly notarially attested and legalized by the consul of such country or other competent authority. | 179 180 181 182 | |||
the Vessel. | 183 184 | |||
185 | ||||
registered encumbrances. | 186 187 | |||
deletion appropriate to the Vessel’s registry at the time of delivery, or, in the event that the registry does not as a matter of practice issue such documentation immediately, a written undertaking by the Sellers to effect deletion from the Vessel’s registry forthwith and furnish a Certificate or other official evidence of deletion to the Buyers promptly and latest within 4 (four) weeks after the Purchase Price has been paid and the Vessel has been delivered. | 188 189 190 191 192 193 | |||
for the purpose of registering the Vessel, provided the Buyers notify the Sellers of any such documents as soon as possible after the date of this Agreement. | 194 195 196 |
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At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol of Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the Buyers. | 197 198 199 | |
At the time of delivery the Sellers shall hand to the Buyers the classification certificate(s) as well as all plans etc., which are on board the Vessel. Other certificates which are on board the Vessel shall also be handed over to the Buyers unless the Sellers are required to retain same, in which case the Buyers to have the right to take copies. Other technical documentation which may be in the Sellers’ possession shall be promptly forwarded to the Buyers at their expense, if they so request. The Sellers may keep the Vessel’s log books but the Buyers to have the right to take copies of same. | 200 201 202 203 204 205 206 | |
9.Encumbrances | 207 | |
The Sellers warrant that the Vessel, at the time of delivery, is free from taxes, liens, mortgages and hereby undertake to indemnify the Buyers against all consequences of claims made against the Vessel which have been incurred prior to the time of delivery. | 208 209 210 211 | |
10.Taxes, etc. | 212 | |
Any taxes, fees and expenses in connection with the purchase and registration under the Buyers’ flag shall be for the Buyers’ account, whereas similar charges in connection with the closing of the Sellers’ register shall be for the Sellers’ account. | 213 214 215 | |
11.Condition on delivery | 216 | |
The Vessel with everything belonging to her shall be at the Sellers’ risk and expense until she is delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be delivered and taken over as she was at the time ofthis agreement excepted. | 217 218 219 | |
However, the Vessel shall be delivered with herpresent class maintainedand with all continuous surveys up to date, free from free of average damage affecting the Vessel’s class, and withall her classification certificates and national/international trading certificates, as well as all other certificates the Vessel had at the time of this agreement clean, valid and unextended without at the time of delivery. | 220 221 222 223 224 | |
“Inspection” in this Clause 11, shall mean the Buyers’ inspection according to Clause 4 a) or 4 b), if applicable, or the Buyers’ inspection prior to the signing of this Agreement. If the Vessel is taken over without inspection, the date of this Agreement shall be the relevant date. | 225 226 227 |
* | Notes, if any, in the surveyor’s report which are accepted by the Classification Society without condition/recommendation are not to be taken into account. | 228 229 |
12.Name/markings | 230 | |
Upon delivery the Buyers undertake to change the name of the Vessel and alter funnel markings. | 231 | |
13.Buyers’ default | 232 | |
Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel this Agreement, and they shall be entitled to claim compensation for their losses and for all expenses incurred together with interest. | 233 234 235 | |
Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right to cancel the Agreement, in which case the deposit together with interest earned shall be released to the Sellers. If the deposit does not cover their loss, the Sellers shall be entitled to claim further compensation for their losses and for all expenses incurred together with interest. | 236 237 238 239 |
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14. Sellers’ default | ||
Should the Sellers fail to give Notice of Readiness in accordance with Clause 5 a) or fail to be ready to validly complete a legal transfer by the date stipulated in line 61 the Buyers shall have the option of cancelling this Agreement provided always that the Sellers shall be granted a maximum of 3 banking days after Notice of Readiness has been given to make arrangements for the documentation set out in Clause 8. If after Notice of Readiness has been given but before the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not made physically ready again in every respect by the date stipulated in line 61 and new Notice of Readiness given, the Buyers shall retain their option to cancel. In the event that the Buyers elect to cancel this Agreement the deposit together with interest earned shall be released to them immediately. | 240 241 242 243 244 245 246 247 248 249 250 | |
Should the Sellers fail to give Notice of Readiness by the date stipulated in line 61 or fail to be ready to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for their loss and for all expenses together with interest if their failure is due to proven negligence and whether or not the Buyers cancel this Agreement. | 251 252 253 254 | |
15. Buyers’ representatives | 255 | |
After this Agreement has been signed by both parties and the10 percent deposit has been lodged, the Buyers have the right to place two(2)representatives on board the Vessel at their sole risk and expense arrival at These representatives are on board for the purpose of familiarisation and in the capacity of observers only, and they shall not interfere in any respect with thenormal operation of the Vesselup to and including her delivery. The existing crew will provide due assistance for familiarisation. The Buyers’ representatives shall sign the Sellers prior to their embarkation. | 256 257 258 259 260 261 | |
16. Arbitration | 262 |
a)* | This Agreement shall be governed by and construed in accordance with English law and any dispute arising out of this Agreement shall be referred to arbitration in London in accordance with the Arbitration Acts 1950 and 1979 or any statutory modification or re-enactment thereof for the time being in force, one arbitrator being appointed by each party. On the receipt by one party of the nomination in writing of the other party’s arbitrator, that party shall appoint their arbitrator within fourteen days, failing which the decision of the single arbitrator appointed shall apply. If two arbitrators properly appointed shall not agree they shall appoint an umpire whose decision shall be final. | 263 264 265 266 267 268 269 270 | ||
United States Code and the Law of the State of New York and should any dispute arise out of this Agreement, the matter in dispute shall be referred to three persons at Now York, one to bo appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them shall be final, and for purpose of enforcing any award, this Agreement may be made a rule of the Court. | 271 272 273 274 275 276 | |||
Arbitrators, Inc. New York. | 277 278 | |||
The laws of | 279 280 281 | |||
* | 16 a), 16 b) and 16 c) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 16 a) to apply. | 282 283 |
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the best of the Sellers’ knowledge, the Vessel under their current ownership has not
been blacklisted by any nation including the Arab Boycott League.
city of Piraeus, commencing immediately upon delivery of the Vessel to the Buyers
(assuming that she is immediately capable of rendering the services required under the
charterparty) for a period of min 35 months max 37 months, exact period in chopt, at
a flat rate of Usd 42,000 per day less a total of 5pct commission being further fixed on
a back to back basis as to the details only to messrs Cargill International S.A. of
Geneva.
their best endeavours to approach messrs Cargill International S.A. of Geneva in order
to obtain their agreement to novate the said charter from Irika Shipping S.A.
Buyers, Irika Shipping S.A. and Cargill S.A.
vessel to the Buyers and commencement of the respective charter to Irika Shipping
S.A.
will furnish the Buyers as beneficiaries with a first class bank guaranee in the amount
of Usd 7,500,000 (United States Dollars Seven Million Five Hundred Thousand)
which will be valid for the period from the time the Vessel is delivered to the Buyers
with the Irika Shipping S.A. charter attached until the time of novation of the charter
to Cargill International S.A.
between Buyers and Irika Shipping S.A. will remain in full force and effect and the
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(whichever the earliest):
Irika Shipping S.A.
premature termination of the subject Charter Party with Irika Shipping S.A.
cancellation.
to be lifted by latest 30th September 2008.
/s/ Julian Brynteson, H. Clarkson & Co. Ltd, Attorney in Fact | /s/ Gabriel Panayotides, Chief Executive Officer and President | |
For the Sellers | For the Buyers |
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MEMORANDUM OF AGREEMENT | Norwegian Shipbrokers’ Association’s Memo- randum of Agreement for sale and purchase of ships. Adopted by The Baltic and International Maritime Council (BIMCO)in 1956. Code-name | |
SALEFORM 1993 | ||
Revised 1966, 1983 and 1986/87. |
Dated:20th August 2008 | ||
Three Stars Maritime S.A., Panama hereinafter called the Sellers, have agreed to sell, and | 1 | |
Skelton Maritime Ltd., Liberia, a guaranteed nominee of Oceanaut Inc., Marshall Islands hereinafter called the Buyers, have agreed to buy | 2 | |
Name:m/v “Three Stars” | 3 | |
Classification Society/Class:LR Class Built: 2005 By:Hudong Zhonghua Shipyard, China Flag: Panamax Place of Registration:Panama Call Sign: 3ELI2 Grt/Nrt:40,524/26,145 | 4 5 6 7 8 | |
hereinafter called the Vessel, on the following terms and conditions: | 9 | |
Definitions | 10 | |
“Banking days” are days on which banks are open both in the country of the currency stipulated for the Purchase Price in Clause 1 and in the place of closing stipulated in Clause 8. | 11 12 | |
“In writing” or “written” means a letter handed over from the Sellers to the Buyers or vice versa, a registered letter, telex, telefax or other modern form of written communication. | 13 14 | |
“Classification Society” or “Class” means the Society referred to in line 4. | 15 | |
1. Purchase PriceUsd 93,500,000 (United States Dollars Ninety Three Million and Five Hundred Thousand) | 16 | |
2. Deposit | 17 | |
As security for the correct fulfilment of this Agreement the Buyers shall (ten per cent) of the Purchase Price within3(three)banking daysafter all subjects having been lifted and unspacking has occurred andfrom the date of this Agreementhaving been signed by both parties on a facsimile form, whichever the latter. This deposit shall be placed withthe Sellers’ nominated bank | 18 19 20 | |
andshall beheld by them in a jointinterest bearingaccount for the Sellers and the Buyers, to be released in accordance with joint written instructions of the Sellers and the Buyers. Interest to be credited to the Buyers. Any fee charged for holding the said deposit shall be borne equally by the Sellers and the Buyers.Banking fees, if any, for holding the deposit shall be split equally between the Buyers and Sellers. Any bank charges of Sellers’ Bank to be for Sellers’ account. Any bank charges of Buyers’ bank to be for Buyers’ account. | 21 22 23 24 | |
3. Payment | 25 | |
Therelease of the 10 percent deposit along with value of R.O.B. lubricants (per 7 herein)shall be paid in full free ofanybank charges to Sellers’ nominated bank on delivery of the Vessel, but not later than 3(three)banking days after the Vessel is in every respect physically ready for delivery in accordance with the terms and conditions of this Agreement and a valid Notice of Readiness has been | 26 27 28 29 |
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and other usual delivery documents required for the registration of each Vessel under the Buyers’
flag of choice. Any closing charges to be borne equally between the Buyers and Sellers.
4. Inspections | 30 |
transaction is outright and subject only to the terms hereto.
have also inspected the Vessel at/in on and have accepted the Vessel following this inspection and the sale is outright and definite, subject only to the terms and conditions of this Agreement. | 31 32 33 34 | |||
whether same are accepted or not within | 35 36 | |||
37 | ||||
Buyers cause undue delay they shall compensate the Sellers for the looses thereby incurred. The Buyers shall inspect the Vessel without opening up and without cost to the Sellers. During the inspection, the Vessel’s dock and engine log books shall be made available for examination by the Buyers. If the Vessel is accepted after such inspection, the sale shall become outright and definite, subject only to the terms and conditions of this Agreement, provided the Sellers receive written notice of acceptance from the Buyers within 72 hours after completion of such inspection. | 38 39 40 41 42 43 44 45 | |||
received by the Sellers as aforesaid, the deposit together with interest earned shall be released immediately to the Buyers, whereafter this Agreement shall be null and void. | 46 47 48 | |||
alternative 4a) to apply. | 49 50 |
5. | Notices, time and place of delivery | 51 | ||
a) | The Sellers shall keep the Buyers well movementsand shall provide the Buyers with30, 15, 7 and 3daysapproximatenotice of the estimated time of intended place of drydocking/underwater inspection/delivery. Readiness onlyWhen the Vessel is at the place of delivery andis in this Agreementand on successful completion of Divers’ inspection. , Buyers a written Notice of Readiness for delivery. | 52 53 54 55 56 | ||
b) | The Vessel shall be deliveredto the Buyers after Divers’ inspection, which should be carried out at the port of delivery free of cargoand taken over safely afloat at a safe and accessible berth/portor anchorage port worldwide | 57 58 | ||
in the Sellers’ option. | 59 | |||
Expected time of delivery:between 1st October 2008 and 1st December 2008 | 60 | |||
Date of cancelling (see Clauses 5 c), 6 b) (iii) and 14):1st December 2008 in the option of the Buyers. | 61 | |||
In the event that the Buyers are able to lift their subjects described herein prior to the 30th |
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September 2008 then the above laycan and cencelling dates to be brought forward by the same number of days but always giving the Sellers two clear months within which to deliver the Vessel from the time of such subjects being lifted. | ||||
c) | If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the Vessel will not be ready for delivery by the cancelling date they may notify the Buyers in writing stating the date when they anticipate that the Vessel will be ready for delivery and propose a new cancelling date. Upon receipt of such notification the Buyers shall have the option of either cancelling this Agreement in accordance with Clause 14 within 7 running days of receipt of the notice or of accepting the new date as the new cancelling date. If the Buyers have not declared their option within 7 running days of receipt of the Sellers’ notification or if the Buyers accept the new date, the date proposed in the Sellers’ notification shall be deemed to be the new cancelling date and shall be substituted for the cancelling date stipulated in line 61. | 62 63 64 65 66 67 68 69 70 71 | ||
If this Agreement is maintained with the new cancelling date all other terms and conditions hereof including those contained in Clauses 5 a) and 5 c) shall remain unaltered and in full force and effect. Cancellation or failure to cancel shall be entirely without prejudice to any claim for damages the Buyers may have under Clause 14 for the Vessel not being ready by the original cancelling date. | 72 73 74 75 76 | |||
d) | Should the Vessel become an actual, constructive or compromised total loss before delivery the deposit together with interest earned shall be released immediately to the Buyers whereafter this Agreement shall be null and void. | 77 78 79 | ||
6. | Drydocking/Divers Inspection | 80 | ||
Classification Society of the Vessel’s underwater parts below the deepest load line, the extent of the inspection being in accordance with the Classification Society’s rules. If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class, such defects shall be made good at the Sellers’ expense to the satisfaction of the Classification Society without condition/recommendation*. | 81 82 83 84 85 86 87 | |||
b)** | (i) The Vessel is to be delivered without drydocking. However, the Buyers shall have the right at their expense to arrange for an underwater inspection by a diver approved by the Classification Society prior to the delivery of the Vessel. The Sellers shall at their cost make the Vessel available for such inspection. The extent of the inspection and the conditions under which it is performed shall be to the satisfaction of the Classification Society. If the conditions at the port of delivery are unsuitable for such inspection, the Sellers shall make the Vessel available at a suitable alternative place near to the delivery port. | 88 89 90 91 92 93 94 95 | ||
In the event that the Divers’ inspection reveals any damage to the Vessel’s underwater parts which would impose a condition against the Vessel’s present Class and Class imposes a condition but the Vessel is not required be repaired before her next scheduled Drydocking, then Sellers shall pay to the Buyers the estimated cost to repair such damage in a way which is acceptable to the Class and which shall be the direct cost of the repair, excluding Drydocking costs, for such damage only and to be based on the mean of two quotations given by nearest ship yards, one chosen by the Sellers and one chosen by the Buyers. The amount as agreed shall be deducted from the balance of the purchase money at the time of Delivery. | ||||
(ii) If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class,the repair of which cannot be postponed until the Vessel’s next scheduled Drydocking,then unless repairs can be carried out afloat to the satisfaction of the Classification Society, the Sellers shall arrange for the Vessel to be drydocked at their expense for inspection by the Classification Society of the Vessel’s underwater parts below the deepest load line, the extent of the inspection being in accordance with the Classification Society’s rules. If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class, such defects shall be made good by the Sellers at their expense to the satisfaction of the Classification Society without condition/recommendation*. In such event the Sellers are to pay also for the cost of | 96 97 98 99 100 101 102 103 104 105 |
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the underwater inspection and the Classification Society’s attendance. | 106 | |||
(iii) If the Vessel is to be drydocked pursuant to Clause 6 b) (ii) and no suitable dry- docking facilities are available at the port of delivery, the Sellers shall take the Vessel to a port where suitable drydocking facilities are available, whether within or outside the delivery range as per Clause 5 b). Once drydocking has taken place the Sellers shall deliver the Vessel at a port within the delivery range as per Clause 5 b) which shall, for the purpose of this Clause, become the new port of delivery. In such event the cancelling date provided for in Clause 5 b) shall be extended by the additional time required for the drydocking and extra steaming, but limited to a maximum of 14 running days. | 107 108 109 110 111 112 113 114 | |||
c) | If the Vessel is drydocked pursuant to Clause 6 a) or 6 b) above | 115 | ||
(i) the Classification Society may require survey of the tailshaft system, the extent of the survey being to the satisfaction of the Classification surveyor. If such survey is not required by the Classification Society, the Buyers shall have the right to require the tailshaft to be drawn and surveyed by the Classification Society, the extent of the survey being in accordance with the Classification Society’s rules for tailshaft survey and consistent with the current stage of the Vessel’s survey cycle. The Buyers shall declare whether they require the tailshaft to be drawn and surveyed not later than by the completion of the inspection by the Classification Society. The drawing and refitting of the tailshaft shall be arranged by the Sellers. Should any parts of the tailshaft system be condemned or found defective so as to affect the Vessel’s class, those parts shall be renewed or made good at the Sellers’ expense to the satisfaction of the Classification Society without condition/recommendation*. | 116 117 118 119 120 121 122 123 124 125 126 127 | |||
(ii) the expenses relating to the survey of the tailshaft system shall be borne by the Buyers unless the Classification Society requires such survey to be carried out, in which case the Sellers shall pay these expenses. The Sellers shall also pay the expenses if the Buyers require the survey and parts of the system are condemned or found defective or broken so as to affect the Vessel’s class*. | 128 129 130 131 132 | |||
(iii) the expenses in connection with putting the Vessel in and taking her out of drydock, including the drydock dues and the Classification Society’s fees shall be paid by the Sellers if the Classification Society issues any condition/recommendation* as a result of the survey or if it requires survey of the tailshaft system. In all other cases the Buyers shall pay the aforesaid expenses, dues and fees. | 133 134 135 136 137 | |||
(iv) the Buyers’ representative shall have the right to be present in the drydock, but without interfering with the work or decisions of the Classification surveyor. | 138 139 | |||
(v) the Buyers shall have the right to have the underwater parts of the Vessel cleaned and painted at their risk and expense without interfering with the Sellers’ or the Classification surveyor’s work, if any, and without affecting the Vessel’s timely delivery. If, however, the Buyers’ work in drydock is still in progress when the Sellers have completed the work which the Sellers are required to do, the additional docking time needed to complete the Buyers’ work shall be for the Buyers’ risk and expense. In the event that the Buyers’ work requires such additional time, the Sellers may upon completion of the Sellers’ work tender Notice of Readiness for delivery whilst the Vessel is still in drydock and the Buyers shall be obliged to take delivery in accordance with Clause 3, whether the Vessel is in drydock or not and irrespective of Clause 5 b). | 140 141 142 143 144 145 146 147 148 149 | |||
* | Notes, if any, in the surveyor’s report which are accepted by the Classification Society without condition/recommendation are not to be taken into account. | 150 151 | ||
** | 6 a) and 6 b) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 6 a) to apply. | 152 153 | ||
7. Spares/bunkers, etc. | 154 | |||
The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board, ashoreand on order without extra charge.All spare parts and spare equipment tail end shaft(s) and/or spare unused, whether on board or not shall become the Buyers’ property. excluded. | 155 156 157 158 159 |
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\
replace spare parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which are taken out of spare and used as replacement prior to delivery, but the replaced items shall be the property of the Buyers. sale without extra payment if they are the property of the Sellers. provisions shall be included in the sale and be taken over by the Buyers without extra payment. | 160 161 162 163 164 | |
The Sellers have the right to take ashore crockery, plates, cutlery, linen and other articles bearing the Sellers’ flag or name, provided they replace same with similar unmarked items. Library, forms, etc., exclusively for use in the Sellers’ vessel(s), shall be excluded without compensation. | 165 166 167 | |
Officers’ and Crew’s personal ISM and ISPS documentation and manuals as well as manuals prepared by the Manager of the Sellerare to be excluded from the sale, as well as the following additional items (including items on hire):No hired items. All Oxygen and Acetyline bottles will be removed prior to delivery. | 168 169 | |
SOPEP, SOLAS training manuals, cargo securing manuals and ballast water management plans will remain on board the Vessel but the Buyer to undertake to cross out all references of those documents as to the Seller and/or the Seller’s Manager. | ||
The Buyers shall take overand pay extra for the costof oils indesignatedstorage tanks and/or in sealed/unbroached drums evidenced by Sellers’ invoices.( of delivery of the Vessel. Payment under this Clause shall be made at the same time and place and in the same currency as the Purchase Price. | 170 171 172 173 174 |
8. Documentation | 175 |
The place of closing:Piraeus, Greece | 176 | |
Documents to be listed in an addendum to this agreement. | ||
documents, namely: | 177 178 |
to register the Vessel), warranting that the Vessel is free from all encumbrances, mortgages and maritime liens or any other debts or claims whatsoever, duly notarially attested and legalized by the consul of such country or other competent authority. | 179 180 181 182 | |||
the Vessel. | 183 184 | |||
185 | ||||
registered encumbrances. | 186 187 | |||
deletion appropriate to the Vessel’s registry at the time of delivery, or, in the event that the registry does not as a matter of practice issue such documentation immediately, a written undertaking by the Sellers to effect deletion from the Vessel’s registry forthwith and furnish a Certificate or other official evidence of deletion to the Buyers promptly and latest within 4 (four) weeks after the Purchase Price has been paid and the Vessel has been delivered. | 188 189 190 191 192 193 | |||
for the purpose of registering the Vessel, provided the Buyers notify the Sellers of any such documents as soon as possible after the date of this Agreement. | 194 195 196 |
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At the time of delivery the Buyers and Sellers shall sign and deliver to each other a Protocol of Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the Buyers. | 197 198 199 | |
At the time of delivery the Sellers shall hand to the Buyers the classification certificate(s) as well as all plans etc., which are on board the Vessel. Other certificates which are on board the Vessel shall also be handed over to the Buyers unless the Sellers are required to retain same, in which case the Buyers to have the right to take copies. Other technical documentation which may be in the Sellers’ possession shall be promptly forwarded to the Buyers at their expense, if they so request. The Sellers may keep the Vessel’s log books but the Buyers to have the right to take copies of same. | 200 201 202 203 204 205 206 | |
9. Encumbrances | 207 | |
The Sellers warrant that the Vessel, at the time of delivery, is free from taxes, liens,mortgages and hereby undertake to indemnify the Buyers against all consequences of claims made against the Vessel which have been incurred prior to the time of delivery. | 208 209 210 211 | |
10. Taxes, etc. | 212 | |
Any taxes, fees and expenses in connection with the purchase and registration under the Buyers’ flag shall be for the Buyers’ account, whereas similar charges in connection with the closing of the Sellers’ register shall be for the Sellers’ account. | 213 214 215 | |
11. Condition on delivery | 216 | |
The Vessel with everything belonging to her shall be at the Sellers’ risk and expense until she is delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be delivered and taken over as she was at the time ofthis agreement excepted. | 217 218 219 | |
However, the Vessel shall be delivered with herpresentclass maintainedand with all continuous surveys up to date, free from free of average damage affecting the Vessel’s class, and withall her classification certificates and national/international tradingcertificates, as well as all other certificates the Vessel had at the time of this agreement clean, valid andunextended without at the time of delivery. | 220 221 222 223 224 | |
“Inspection” in this Clause 11, shall mean the Buyers’ inspection according to Clause 4 a) or 4 b), if applicable, or the Buyers’ inspection prior to the signing of this Agreement. If the Vessel is taken over without inspection, the date of this Agreement shall be the relevant date. | 225 226 227 |
* | Notes, if any, in the surveyor’s report which are accepted by the Classification Society without condition/recommendation are not to be taken into account. | 228 229 |
12. Name/markings | 230 | |
Upon delivery the Buyers undertake to change the name of the Vessel and alter funnel markings. | 231 | |
13. Buyers’ default | 232 | |
Should the deposit not be paid in accordance with Clause 2, the Sellers have the right to cancel this Agreement, and they shall be entitled to claim compensation for their losses and for all expenses incurred together with interest. | 233 234 235 | |
Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right to cancel the Agreement, in which case the deposit together with interest earned shall be released to the Sellers. If the deposit does not cover their loss, the Sellers shall be entitled to claim further compensation for their losses and for all expenses incurred together with interest. | 236 237 238 239 |
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14. Sellers’ default | 240 | |
Should the Sellers fail to give Notice of Readiness in accordance with Clause 5 a) or fail to be ready to validly complete a legal transfer by the date stipulated in line 61 the Buyers shall have the option of cancelling this Agreement provided always that the Sellers shall be granted a maximum of 3 banking days after Notice of Readiness has been given to make arrangements for the documentation set out in Clause 8. If after Notice of Readiness has been given but before the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not made physically ready again in every respect by the date stipulated in line 61 and new Notice of Readiness given, the Buyers shall retain their option to cancel. In the event that the Buyers elect to cancel this Agreement the deposit together with interest earned shall be released to them immediately. | 241 242 243 244 245 246 247 248 249 250 | |
Should the Sellers fail to give Notice of Readiness by the date stipulated in line 61 or fail to be ready to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for their loss and for all expenses together with interest if their failure is due to proven negligence and whether or not the Buyers cancel this Agreement. | 251 252 253 254 | |
15. Buyers’ representatives | 255 | |
After this Agreement has been signed by both parties and the10 percentdeposit has been lodged, the Buyers have the right to place two(2) representatives on board the Vessel at their sole risk and expense arrival at | 256 257 258 | |
These representatives are on board for the purpose of familiarisation and in the capacity of observers only, and they shall not interfere in any respect with thenormal operation of the Vesselup to and including her delivery. The existing crew will provide due assistance for familiarisation.The Buyers’ representatives shall sign the Sellersprior to their embarkation. | 259 260 261 | |
16. Arbitration | 262 |
a)* | This Agreement shall be governed by and construed in accordance with English law and any dispute arising out of this Agreement shall be referred to arbitration in London in accordance with the Arbitration Acts 1950 and 1979 or any statutory modification or re-enactment thereof for the time being in force, one arbitrator being appointed by each party. On the receipt by one party of the nomination in writing of the other party’s arbitrator, that party shall appoint their arbitrator within fourteen days, failing which the decision of the single arbitrator appointed shall apply. If two arbitrators properly appointed shall not agree they shall appoint an umpire whose decision shall be final. | 263 264 265 266 267 268 269 270 | ||
United States Code and the Law of the State of New York and should any dispute arise out of this Agreement, the matter in dispute shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them shall be final, and for purpose of enforcing any award, this Agreement may be made a rule of the Court. | 271 272 273 274 275 276 | |||
Arbitrators, Inc. New York. | 277 278 | |||
The laws of | 279 280 281 | |||
* | 16 a), 16 b) and 16 c) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 16 a) to apply. | 282 283 |
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the best of the Sellers’ knowledge, the Vessel under their current ownership has not
been blacklisted by any nation including the Arab Boycott League.
Charterers of the city of Piraeus commencing immediately upon delivery of the
Vessel to the Buyers (assuming that she is immediately capable of rendering the
services required under the charterparty) for a period of min 35 months max 37
months, exact period in chopt, at a flat rate of Usd 60,000 per day less a total of 5pct
commission, being further fixed on a back to back basis as to the details only to
messrs Cargil International S.A. of Geneva.
their best endeavours to approach messrs Cargill International S.A. of Geneva in order
to obtain their agreement to novate the said charter from Irika Shipping S.A.
Buyers, Irika Shipping S.A. and Cargill S.A.
vessel to the Buyers and commencement of the respective charter to Irika Shipping
S.A.
will furnish the Buyers as beneficiaries with a first class bank guaranee in the amount
of Usd 7,500,000 (United States Dollars Seven Million Five Hundred Thousand)
which will be valid for the period from the time the Vessel is delivered to the Buyers
with the Irika Shipping S.A. charter attached until the time of novation of the charter
to Cargill International S.A.
between Buyers and Irika Shipping S.A. will remain in full force and effect and the
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(whichever the earliest):
Irika Shipping S.A.
premature termination of the subject Charter Party with Irika Shipping S.A.
cancellation.
be lifted by latest 30th September 2008.
/s/ Julian Brynteson, H. Clarkson & Co. Ltd, Attorney in Fact | /s/ Gabriel Panayotides, Chief Executive Officer and President | |
For the Sellers | For the Buyers |
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To the Memorandum of Agreement dated 20th August 2008
(the “Contract”)
Between
ACHILLES MANAGEMENT S.A. Panama
(the “Sellers”)
And
RAMAN INVESTMENTS LTD., Liberia
A guaranteed nominee of Oceanaut Inc., Marshall Islands
(the “Buyers”)
In respect of m/v “ACHILLES II”
(the “Vessel”)
For the Sellers | For the Buyers | |
/s/ Toby English, H. Clarkson & Co. Ltd., Director | /s/ Gabriel Panayotides, Chief Executive Officer and President | |
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To the Memorandum of Agreement dated 20th August 2008
(the “Contract”)
Between
IRIS MARINE CARRIERS S.A. Panama
(the “Sellers”)
And
GAVIAL MARINE CORPORATION., Liberia
A guaranteed nominee of Oceanaut Inc., Marshall Islands
(the “Buyers”)
In respect of m/v “IRIS II”
(the “Vessel”)
For the Sellers | For the Buyers | |
/s/ Toby English, H. Clarkson & Co. Ltd., Director | /s/ Gabriel Panayotides, Chief Executive Officer and President |
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To the Memorandum of Agreement dated 20th August 2008
(the “Contract”)
Between
SEA TRIUMPH MARITIME S.A. Panama
(the “Sellers”)
And
TUNMORE SHIPHOLDING CO., Liberia
A guaranteed nominee of Oceanaut Inc., Marshall Islands
(the “Buyers”)
In respect of m/v “MEDI CEBU”
(the “Vessel”)
For the Sellers | For the Buyers | |
/s/ Toby English, H. Clarkson & Co. Ltd., Director | /s/ Gabriel Panayotides, Chief Executive Officer and President | |
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To the Memorandum of Agreement dated 20th August 2008
(the “Contract”)
Between
THREE STARS MARITIME S.A. Panama
(the “Sellers”)
And
SKELTON MARITIME LTD., Liberia
A guaranteed nominee of Oceanaut Inc., Marshall Islands
(the “Buyers”)
In respect of m/v “THREE STARS”
(the “Vessel”)
For the Sellers | For the Buyers | |
/s/ Toby English, H. Clarkson & Co. Ltd., Director | /s/ Gabriel Panayotides, Chief Executive Officer and President | |
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1. | Appointment and Services |
2. | Duration |
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3. | Fees |
4. | Insurances |
5. | Expenses Paid on Behalf of the Company and/or any Shipowning Subsidiary |
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6. | Commercial Manager’s Right to Sub-Contract |
7. | Responsibilities |
8. | Duration of the Agreement and Termination |
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9. | Limitation of Liability |
10. | Payment Netting and Set Off |
11. | Notices |
17th Km National Road Athens — Lamia & Finikos street
145 64 Nea Kifisia
Athens, Greece
Facsimile: +30 210 62 09 528
Attention: Chief Executive Officer
14 Par La Ville Road
HM 2257 Hamilton
Bermuda
Attention: Deborah Paterson
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12. | Governing Law and Dispute Resolution |
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By: | /s/ Gabriel Panayotides |
Title: | President, Chief Executive Officer and Director |
By: | /s/ Stamatis Molaris |
Title: | President, Chief Executive Officer and Director |
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Re: | Commercial Management Agreement of even [ ] and made between ] (1) Oceanaut Inc. (the “Company”) and (2)[ ] (the “Manager”) |
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1. | (Definitions) |
2. | (Appointment — Acceptance) |
J-1
Table of Contents
3. | (Management Services) |
J-2
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4. | (Incorporation of terms) |
5. | (Obligations of the contracting parties) |
6. | (Term) |
7. | (Remuneration) |
8. | (Termination) |
J-3
Table of Contents
9. | (Effect of Termination) |
10. | (Responsibilities) |
J-4
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11. | (Assignability of Agreement) |
12. | (Confidentiality) |
13. | (Notices) |
J-5
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17th Km National Road Athens — Lamia & Finikos street
145 64 Nea Kifisia
Athens, Greece
Facsimile: +30 210 62 09 528
Attention: Chief Executive Officer
17th Km National Road Athens — Lamia & Finikos street
145 64 Nea Kifisia
Athens, Greece
Facsimile: +30 210 81 87 001
Attention: General Manager
14. | (Governing Law and Arbitration) |
15. | (Entire Agreement) |
J-6
Table of Contents
By: | /s/ Gabriel Panayotides |
Title: | President, Chief Executive Officer and Director. |
By: | /s/ Georgios Perivolaris |
Title: | Sole Director, President, Secretary and Treasurer. |
J-7
Table of Contents
CORPORATE OPPORTUNITIES AGREEMENT
K-1
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K-2
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17th Km National Road Athens-Lamia & Finikos Street
145 64 Nea Kifisia
Athens, Greece
Telephone: +30-210-620-9520
Facsimile: +30-210-620-9528
Attention: Chief Executive Officer
666 Third Avenue
New York, New York 10017
Telephone: +1-212-935-3000
Facsimile: +1-212-983-3115
Attention: Kenneth R. Koch, Esq.
17th Km National Road Athens-Lamia & Finikos Street
145 64 Nea Kifisia
Athens, Greece
Telephone: +30-210-620-9520
Facsimile: +30-210-620-9528
Attention: Chief Executive Officer
K-3
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K-4
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By: | /s/ Eleftherios A. Papatrifon |
Title: | Chief Financial Officer |
By: | /s/ Stamatis Molaris |
Title: | President and Chief Executive Officer |
K-5
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L-1
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L-2
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L-3
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L-4
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L-5
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L-6
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MANDATORILY REDEEMABLE PREFERRED SHARES, SERIES A,
SETTING FORTH THE POWERS, PREFERENCES, RIGHTS, QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS OF SUCH SERIES OF PREFERRED STOCK
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M-2
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M-4
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M-5
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M-6
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M-7
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M-8
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By: | /s/ Gabriel Panayotides |
Title: | Chief Executive Officer |
M-9
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ARTICLES OF INCORPORATION
OF
OCEANAUT, INC.
Business Corporations Act of the Associations Law
of the Republic of the Marshall Islands
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N-2
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/s/ Christopher Georgakis |
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THE BOARD OF DIRECTORS OF OCEANAUT, INC.
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Special Meeting of Shareholders
October 15, 2008
Please date, sign and mail your proxy card as soon as possible.
NOTE: Please sign exactly as your name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. | ||||
Signature | Date | |||
Signature | Date |