AGREEMENT AND PLAN OF
MERGER
BY AND AMONG
STAR BULK CARRIERS CORP.
and
STAR MARITIME ACQUISITION CORP.
Dated as of March 14,
2007
AGREEMENT AND PLAN OF
MERGER
This AGREEMENT AND PLAN OF MERGER (this “
Agreement ”) is made and entered into as of March 14,
2007 by and among Star Bulk Carriers Corp., a corporation organized
under the laws of the Republic of the Marshall Islands (“
Star Bulk ”) and Star Maritime Acquisition Corp., a
corporation organized under the laws of the State of Delaware
(“ Star Maritime ”).
WITNESSETH:
WHEREAS, Star Maritime currently is the owner of
record of 500 shares of common stock of Star Bulk (the
“Initial Shares”) representing all of the issued and
outstanding shares of Star Bulk;
WHEREAS, Star Bulk has entered into a Master
Agreement with Star Maritime and TMT Co., Ltd. a Taiwan corporation
(“TMT”) dated January 12, 2007 (the “Master
Agreement”), eight memoranda of agreement with TMT and
certain wholly-owned subsidiaries of TMT for the purchase of a
total of eight vessels by Star Bulk from TMT and such subsidiaries
(the “MOAs”), as supplemented by a Supplemental
Agreement dated January 12, 2007 by and among Star Maritime, Star
Bulk and TMT (the “Supplemental Agreement and, together with
the Master Agreement and the MOAs, the “Vessel Acquisition
Agreements”) providing for the acquisition by Star Bulk of
eight vessel from TMT for a total consideration of $345,237,520,
consisting of 12,537,645 shares of common stock of Star Bulk and
cash;
WHEREAS, the effectiveness of the Vessel
Acquisition Agreements being made specifically contingent upon this
Agreement and Plan of Merger being approved by Star Maritime and
Star Maritime’s shareholders and the Merger being
effected;
WHEREAS, the boards of directors of each of Star
Maritime and Star Bulk believe it is in the best interests of Star
Maritime and its shareholders on the one hand and Star Bulk and
Star Maritime, Star Bulk’s 100% parent, on the other hand,
that Star Maritime enter into a business combination through the
merger of Star Maritime with and into Star Bulk, with Star Bulk
being the survivor of the merger (the “ Merger
”) and, in furtherance thereof, have approved the
Merger;
WHEREAS, pursuant to the Merger, among other
things, each of the issued and outstanding common shares of Star
Maritime (the “ Star Maritime Shares”) shall be
converted into the right to receive common shares of Star Bulk, par
value $0.01 per share (the “ Star Bulk Shares ”)
and each outstanding warrant of Star Maritime (the “ Star
Maritime Warrants ” will be assumed by Star Bulk with the
same terms and restrictions except that each will be exercisable
for common stock of Star Bulk (the “ Star Bulk
Warrants ”);
WHEREAS, the parties intend that the Merger
shall constitute a plan of reorganization pursuant to Section 368
of the Code (as defined below);
WHEREAS, Star Maritime and Star Bulk desire to
make certain representations, warranties, covenants and other
agreements in connection with the Merger.
NOW, THEREFORE , in consideration of the foregoing premises and
the representations, warranties, covenants and agreements contained
herein, and for other good and valuable consideration, the parties
hereto, intending to be legally bound hereby, agree as
follows:
Article
I.
DEFINITIONS
Except as otherwise specified herein, the
following terms, when used in this Agreement, have the respective
meanings set forth below:
“ Action ” means
any claim, action, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority.
“ Affiliate ”
means, with respect to any Person, any other Person directly or
indirectly Controlling, Controlled by or under common Control with
such other Person.
“ Business Day ”
means any day that is not a Saturday, a Sunday or other day on
which banks are required or authorized by Law to be closed in the
City of New York.
“ Code ” means the
United States Internal Revenue Code of 1986.
“ Control ” means,
as to any Person, the power to direct or cause the direction of the
management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise. The terms
“ Controlled ” and “ Controlling
” shall have a correlative meaning.
“ Dollar ” or
“ $ ” means the United States
Dollar.
“ ERISA ” means the
United States Employee Retirement Income Security Act of 1974, and
the rules and regulations promulgated thereunder.
“ Exchange Act ”
shall mean the United States Securities Exchange Act of
1934.
“ Exchange Ratio ”
means 1.0.
“ GAAP ” means
United States generally accepted accounting principles as in
effect, from time to time, consistently applied.
“ Governmental Authority
” means any United States (federal, state or local) or
foreign government, governmental, regulatory or administrative
authority, agency or commission or any court, tribunal, or judicial
or arbitral body.
“ Knowledge of Star Bulk” or
“Knowledge” with respect to Star Bulk means
the knowledge of any officer or director of Star Bulk.
“Knowledge of Star Maritime” or
“Knowledge” with respect to Star Maritime means the
knowledge of any officer or director of Star Maritime.
“ Law ” means any
United States (federal, state or local) or foreign statute, law,
ordinance, regulation, rule, code, order, judgment, injunction or
decree.
“ Lien ” means,
with respect to any property or asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, whether
voluntarily incurred or arising by operation of Law or otherwise,
in respect of such property or asset.
“ Material Adverse Effect
” means with respect to Star Bulk or Star Maritime, as
applicable, a material adverse effect on the business, operations,
properties, assets, condition (financial or otherwise) or results
of operations of it and its subsidiaries taken as a whole, or on
its ability to consummate the transactions contemplated hereby
except (i) any effect arising from this Agreement or the
transactions contemplated hereby, (ii) any effect applicable
generally to the industries in which Star Bulk and the Subsidiaries
operate and (iii) general economic or financial effects.
“ Order ” means any
order, writ, judgment, injunction, decree, stipulation,
determination or award entered by or with any Governmental
Authority.
“Per Share Merger
Consideration” means for each share of common stock of Star
Maritime, the right to receive consideration equal to one (1) fully
paid and nonassessable Star Bulk Share.
“ Person ” means
any natural person, general or limited partnership, corporation,
limited liability company, firm, association, trust or other legal
entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
“ RMI ” means
Republic of the Marshall Islands.
“ SEC ” means the
United States Securities and Exchange Commission.
“ Securities Act ”
shall mean the Securities Act of 1933.
“ Subsidiaries ”
means Star Alpha Inc., Star Beta Inc., Star Gamma Inc., Star Delta
Inc., Star Epsilon Inc., Star Zita Inc., Star Theta Inc. and Star
Iota Inc., each of which is a "Subsidiary" and all of which are
Subsidiaries of Star Bulk. Each subsidiary is a corporation
organized under the laws of the RMI.
“ Tax ” or “
Taxes ” means all United States (federal,
state or local) or foreign income, excise, gross receipts, ad
valorem, sales, use, employment, franchise, profits, gains,
property, transfer, use, payroll, intangibles or other taxes, fees,
stamp taxes, duties, charges, levies or assessments of any kind
whatsoever (whether payable directly or by withholding), together
with any interest and any penalties, additions to tax or additional
amounts imposed by any Tax authority with respect
thereto.
“ Tax Returns ”
means all returns and reports (including elections, declarations,
disclosures, schedules, estimates and information returns) required
to be supplied to a Tax authority relating to Taxes.
“ Trademarks ”
means all of those trade names, trademarks, service marks, jingles,
slogans, logos, trademark and service mark registrations and
trademark and service mark applications owned, used, held for use,
licensed by or leased by Star Bulk or the Subsidiaries and the
goodwill appurtenant thereto.
Except as otherwise specified herein, the
following terms have the respective meanings as defined in the
Sections set forth below:
|
Term
|
Section
|
|
|
|
|
Agreement
|
Preamble
|
|
BCA
|
2.1
|
|
Certificate and
Certificates
|
2.6
|
|
Closing and
Closing Date
|
2.2
|
|
Contracts
|
3.5(b)
|
|
DGCL
|
2.1
|
|
Effective
Time
|
2.2
|
|
Enforceability
Exception
|
3.4(a)
|
|
Environmental
Laws
|
3.8(c)
|
|
Exchange Act
Listing
|
6.5
|
|
Exchange
Agent
|
2.9(a)
|
|
Indemnified
Party
|
9.3(a)
|
|
Indemnifying
Party
|
9.3(a)
|
|
Initial
Shares
|
Recitals
|
|
Loss
|
9.2(a)
|
|
Master
Agreement
|
Recitals
|
|
Merger
|
Recitals
|
|
Merger
Certificate
|
2.2
|
|
MOAs
|
Recitals
|
|
Notice of
Claim
|
9.3(a)
|
|
Proxy
Statement
|
6.2
|
|
Redemption
Shares
|
2.7
|
|
Star
Bulk
|
Preamble
|
|
Star Bulk
Acquisition Transaction
|
5.2(a)
|
|
Star Bulk
Financial Statement
|
3.13
|
|
Star Bulk
Registration Statement
|
6.2
|
|
Star Bulk
Shares
|
Recitals
|
|
Star Bulk
Warrants
|
Recitals
|
|
Star
Maritime
|
Preamble
|
|
Star Maritime
Acquisition Transaction
|
5.2(b)
|
|
Star Maritime
Shares
|
Recitals
|
|
Star Maritime
Warrants
|
Recitals
|
|
Star Maritime
Contracts
|
4.5
|
|
Star Maritime
Directors
|
6.4
|
|
Star Maritime
Financial Statements
|
4.13
|
|
Star Maritime
Permits
|
4.9
|
|
Star Maritime
Special Meeting
|
3.10
|
|
Star Maritime
Stockholders' Approval
|
6.4
|
|
Star Maritime's
SEC Reports
|
4.14
|
|
Stock Exchange
Listing
|
6.5
|
|
Supplemental
Agreement
|
Recitals
|
|
Surviving
Corporation
|
2.1
|
|
Vessel
Acquisition Agreements
|
Recitals
|
|
Vessels
|
3.9(b)(2)
|
|
1.3
|
Rules of Construction.
|
Unless the context otherwise
requires:
(a)
a term has the meaning assigned to it;
(b)
an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(c)
“or” is not exclusive;
(d)
“including” means including without
limitation;
(e)
words in the singular include the plural and words in the
plural include the singular; and
(f)
any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time
to time amended, modified or supplemented (as provided in such
agreements) and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated
therein; references to a Person are also to its permitted
successors and assigns.
Article
II.
THE
MERGER
Upon the terms and conditions set forth in this
Agreement, and in accordance with the applicable provisions of the
Marshall Islands Business Corporation Act (the “BCA”)
and the Delaware General Corporation Law (the “DGCL”),
Star Maritime shall be merged with and into Star Bulk at the
Effective Time. At the Effective Time, the separate corporate
existence of Star Maritime shall cease, and Star Bulk shall
continue as the surviving corporation. The surviving corporation in
the Merger is sometimes referred to as the “Surviving
Corporation.”
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2.2
|
Closing; Effective Time.
|
The closing of the Merger (the
“Closing”) shall take place at 10:00 a.m. Eastern Time
at the offices of Seward & Kissel LLP, One Battery Park Plaza,
New York, New York 10004, on the first Business Day following the
date on which the last of the conditions set forth in Article VII
hereof is fulfilled or waived, or at such other time and place as
Star Maritime and Star Bulk shall agree (the date on which the
closing occurs being the “Closing Date”). On the
Closing Date, the parties shall cause the Merger to
be consummated by filing a Certificate of Merger or like
instrument (the “Merger Certificate”) with the
Registrar of Corporations of the Republic of the Marshall Islands,
in accordance with the applicable provisions of the BCA (the time
of acceptance by the Registrar of Corporations of such filing being
referred to herein as the “Effective Time”) and with
the Secretary of State of the State of Delaware, in accordance with
the applicable provisions of the DGCL.
|
2.3
|
Effect of the Merger.
|
At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of the BCA and
the DGCL. Without limiting the generality of the foregoing, at the
Effective Time, all the property, rights, privileges, powers and
franchises of Star Maritime shall vest in the Surviving
Corporation, and all debts, liabilities and duties of Star Maritime
shall become the debts, liabilities and duties of the Surviving
Corporation.
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2.4
|
Articles of Incorporation;
By-laws.
|
Prior to the filing of the Star Bulk
Registration Statement, Star Bulk shall amend its Articles of
Incorporation and By-laws on terms reasonably satisfactory to Star
Maritime. At the Effective Time, these amended Articles of
Incorporation and By-laws shall be the Articles of Incorporation
and By-laws of the Surviving Corporation.
|
2.5
|
Directors and Officers.
|
The directors of the Surviving Corporation
immediately after the Effective Time shall be the directors set
forth in Schedule 2.5, each to hold the office of director of the
Surviving Corporation in accordance with the provisions of the
applicable laws of the Republic of the Marshall Islands and
the Articles of Incorporation and By-laws of the Surviving
Corporation (as amended pursuant to Section 2.4 above) until their
successors are duly qualified and elected. The officers
of the Surviving Corporation immediately after the Effective Time
shall be such officers as are appointed by the Board of Directors
of Star Bulk after the date hereof, each to hold office in
accordance with the provisions of the By-laws of the Surviving
Corporation (as amended pursuant to Section 2.4 above).
|
2.6
|
Conversion of Star Maritime Capital
Stock.
|
Subject to Sections 2.7 and 2.9(e), each share
of Star Maritime common stock issued and outstanding immediately
prior to the Effective Time shall be converted into the right to
receive, at the election of the holder thereof, the Per Share
Merger Consideration. At the Effective Time, all Star Maritime
Shares converted as set forth above shall no longer be outstanding
and shall automatically be canceled and shall cease to exist, and
each holder of a certificate or certificates that immediately prior
to the Effective Time represented any such Star Maritime Shares
(the “Certificates” and each, a
“Certificate”) shall cease to have any rights with
respect thereto, except the right to receive the Per Share Merger
Consideration and certain dividends or other distributions in
accordance with Section 2.9(c) upon the surrender of such
Certificate, in accordance with Section 2.9(b). Each Star Maritime
Warrant issued and outstanding immediately prior to the Effective
Time shall be convertible into a Star Bulk Warrants and shall be
convertible into Star Bulk Shares as described in Section 6.6 of
this Agreement. Schedule 2.6 lists, as of the Effective Time, the
number of Star Bulk Shares which shall be issued to any Star
Maritime security holder pursuant to this Section 2.6 and Section
6.6 hereof, assuming that all outstanding Star Maritime Shares are
exchanged for, or converted to, Star Bulk Shares as contemplated by
this Agreement. Each share of Star Bulk owned by Star Maritime at
the time of the Merger shall be cancelled.
Notwithstanding any other provisions of this
Agreement to the contrary, if the Merger is approved by the
shareholders of Star Maritime, Star Maritime Shares that are
outstanding immediately prior to the Closing and which are held by
Star Maritime stockholders who shall have voted against the Merger
and who shall have demanded properly, in writing, redemption
of such shares in accordance with the procedures set forth in
the Proxy Statement (collectively, the “Redemption
Shares”) shall not be converted into or represent the right
to receive the Per Share Merger Consideration.
Such Star Maritime stockholders shall be
entitled to receive for each Redemption Share held by them, payment
of $10.00 per share, which amount represents $9.80 per share plus
their pro rata share of any accrued on the escrow account (net of
taxes payable) not previously distributed by Star Maritime and
$.020 per share plus interest thereon (net of taxes payable) of
contingent underwriting compensation which the underwriters of Star
Maritime’s initial public offering have agreed to forfeit to
pay redeeming shareholders, calculated as of two days prior to the
Closing Date. Star Maritime Shares held by Star Maritime
stockholders who failed to properly demand redemption of their Star
Maritime Shares shall thereupon be deemed to have converted into
and to become exchangeable of the right to receive, without any
interest thereon, the Per Share Merger Consideration,
upon surrender, in the manner provided in Section 2.6 above,
of the Certificate or Certificates that formerly evidenced such
shares of Star Maritime Shares. Any payments required to be made to
the holders of any Redemption Shares shall be funded by Star
Bulk.
|
2.8
|
Anti-Dilution Provisions
.
|
In the event Star Bulk changes (or establishes a
record date for changing) the number of Star Bulk Shares issued and
outstanding prior to the Effective Time as a result of a stock
split, stock dividend, recapitalization, subdivision,
reclassification, combination, exchange of shares or similar
transaction with respect to the outstanding Star Bulk Shares and
the record date therefor shall be prior to the Effective Time, the
Exchange Ratio and the Per Share Merger Consideration shall be
proportionately adjusted to reflect such stock split, stock
dividend, recapitalization, subdivision, reclassification,
combination, exchange of shares or similar transaction.
|
2.9
|
Surrender of
Certificates.
|
(a)
Exchange Agent . As of the Effective Time, Star Bulk
shall deposit with such bank or trust company as may be designated
by Star Bulk and reasonably acceptable to Star Maritime (the
“ Exchange Agent ”), for the benefit of the
holders of shares of Star Maritime Capital Stock, for exchange in
accordance with this Section 2.9, through the Exchange Agent, the
Star Bulk Shares issuable pursuant to Section 2.6 in exchange for
outstanding shares of Star Maritime Shares. At the time of such
deposit, Star Bulk shall irrevocably instruct the Exchange Agent to
deliver the Star Bulk Shares to Star Maritime’s stockholders
after the Effective Time in accordance with the procedures set
forth in this Section 2.9, subject to Sections 2.9(f) and
(g).
(b)
Exchange Procedures . As soon as reasonably
practicable after the Effective Time, the Exchange Agent shall mail
to each holder of record of a Certificate whose shares were
converted into the right to receive the applicable Per Share Merger
Consideration pursuant to Section 2.6, a letter of transmittal (in
form and substance satisfactory to Star Bulk and Star Maritime),
with instructions for use in surrendering the Certificates in
exchange for the applicable Per Share Merger Consideration with
respect thereto. Upon surrender of a Certificate for cancellation
to the Exchange Agent, together with such letter of transmittal,
duly completed and validly executed, and such other documents as
may reasonably be required by the Exchange Agent, the holder of
such Certificate shall be entitled to receive in exchange therefor
that number of whole Star Bulk Shares in accordance with Section
2.9(e), together with certain dividends or other distributions in
accordance with Section 2.9(c), and the Certificate so surrendered
shall forthwith be canceled. In the event of a transfer of
ownership of Star Maritime Shares that is not registered in the
transfer records of Star Maritime, a certificate evidencing the
proper number of Star Bulk Shares may be issued in exchange
therefor to a person other than the person in whose name the
Certificate so surrendered is registered if such Certificate shall
be properly endorsed or otherwise be in proper form for transfer
and the person requesting such issuance shall pay any transfer or
other taxes required by reason of the issuance of Star Bulk Shares
to a person other than the registered holder of such Certificate or
establish to the satisfaction of Star Bulk that such tax has been
paid or is not applicable. Until surrendered as contemplated by
this Section 2.9(b), each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive
upon such surrender the Per Share Merger Consideration that the
holder thereof has the right to receive pursuant to the provisions
of Section 2.6, plus certain dividends or other distributions in
accordance with Section 2.9(c).
(c)
Distributions with Respect to Unexchanged Shares
. No dividends or other distributions declared or made
with respect to Star Bulk Shares with a record date after the
Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to Star Bulk Shares represented thereby,
if any, and all such dividends and other distributions shall be
paid by Star Bulk to the Exchange Agent, until the surrender of
such Certificate in accordance with this Article II. Subject to the
effect of applicable escheat or similar laws, following surrender
of any such Certificate there shall be paid to the holder of whole
Star Bulk Shares issued in exchange therefor, without interest, (i)
at the time of such surrender, the amount of dividends or other
distributions with a record date after the Effective Time
theretofore paid with respect to such whole Star Bulk Shares and
(ii) at the appropriate payment date, the amount of dividends or
other distributions with a record date after the Effective Time but
prior to such surrender and with a payment date subsequent to such
surrender payable with respect to such whole Star Bulk
Shares.
(d)
No Further Ownership Rights in Star Maritime Shares
. All certificates evidencing Star Bulk Shares issued
(including any dividends or other distributions paid pursuant to
Section 2.9(c)) shall be deemed to have been issued and paid in
full satisfaction of all rights pertaining to the shares of Star
Maritime Shares formerly represented by such Certificates. At the
close of business on the day on which the Effective Time occurs,
the stock transfer books of Star Maritime shall be closed, and
there shall be no further registration of transfers on the stock
transfer books of the Surviving Corporation of the shares of Star
Maritime Shares that were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are
presented to the Surviving Corporation or the Exchange Agent for
transfer or any other reason, they shall be canceled and exchanged
as provided in this Article II.
(e)
Fractional Shares . No fractional shares of Star Bulk
common stock shall be issued in the Merger. The aggregate Per Share
Merger Consideration to be issued to the holder of a Certificate
previously evidencing Star Maritime Shares shall be rounded up to
the nearest whole share of Star Bulk common stock.
(f)
Termination of Exchange of Star Bulk Shares
. Any portion of the Star Bulk Shares (and any dividends
or distributions thereon) that remain undistributed to the holders
of the Certificates for six months after the Effective Time shall
be delivered to Star Bulk, upon demand, and any holders of the
Certificates who have not theretofore complied with this Article II
shall thereafter look only to Star Bulk for, and, subject to
Section 2.9(g), Star Bulk shall remain liable for payment of their
claim for the Per Share Merger Consideration, certain dividends and
other distributions in accordance with Section 2.9(c).
(g)
No Liability . Notwithstanding anything to the
contrary in this Section 2.9, none of the Exchange Agent, the
Surviving Corporation or any party to this Agreement shall be
liable to a holder of Star Bulk Shares or Star Maritime Shares for
any amount properly paid to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(h)
Lost, Stolen or Destroyed Company Certificate . In
the event any Certificates shall have been lost, stolen or
destroyed, the Exchange Agent shall issue in exchange for such
lost, stolen or destroyed Certificate, upon the making of an
affidavit and indemnity of that fact by the holder thereof in a
form that is reasonably acceptable to the Exchange Agent, the
number of Star Bulk Shares as required pursuant to Section 2.6;
provided , however , that Star Bulk may, in its
reasonably commercial discretion and as a condition precedent to
the issuance thereof, require the owner of such lost, stolen or
destroyed Certificates to deliver a bond in such sum as it may
reasonably direct against any claim that may be made against Star
Bulk or the Exchange Agent with respect to the Certificates alleged
to have been lost, stolen or destroyed.
As of the Effective Time, Star Bulk shall
deposit with the Exchange Agent , for the benefit of the
holders of Star Maritime Warrants that have been exchanged into
Star Bulk Warrants in accordance with Section 6.6 hereof,
20,000,000 shares of Star Bulk Shares issuable upon exercise of
such Star Bulk Warrants.
|
2.11
|
Redemption Shares After Payment of Fair
Value.
|
Redemption Shares, if any, after payments of
fair value in respect thereto have been made to Redemption Star
Maritime stockholders pursuant to the DGCL, shall be
cancelled.
|
2.12
|
Tax
and Accounting Consequences.
|
It is intended by the parties hereto that the
Merger shall constitute a reorganization within the meaning of
Section 368 of the Code. Each party has consulted with, and is
relying upon, its tax advisors and accountants with respect to the
tax and accounting consequences of the Merger.
Article
III.
REPRESENTATIONS AND
WARRANTIES
OF STAR
BULK
Star Bulk hereby represents and warrants to Star
Maritime as follows (subject in each case to such exceptions as are
set forth or cross-referenced in the attached Schedules
corresponding to the Section of the representation or warranty to
which such exceptions relate):
|
3.1
|
Organization and
Qualification.
|
(a)
Star Bulk has been duly organized and is validly existing as
a corporation in good standing under the laws of the Republic of
the Marshall Islands, with power and authority (corporate and
other) to own its properties and conduct its business as currently
conducted. Star Bulk has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each jurisdiction set forth in the Schedule3.1
and to Star Bulk’s Knowledge, such jurisdictions are the only
ones in which it owns or leases properties, or conducts any
business, so as to require such qualification, other than those
jurisdictions where the failure to be so qualified or in good
standing would not have a Material Adverse Effect on Star Bulk and
the Subsidiaries.
(b)
Each of the Subsidiaries has been duly organized and is
validly existing as a corporation under the laws of the Republic of
the Marshall Islands, with power and authority (corporate and
other) to own its properties and conduct its business as currently
conducted. All the outstanding shares of capital stock of each of
the Subsidiaries have been duly authorized and validly issued, are
fully-paid and non-assessable, and are owned by Star Bulk, free and
clear of all Liens.
(c)
The copies of the respective Articles of Incorporation and
By-laws of Star Bulk and each of the Subsidiaries, as amended to
date and delivered to Star Maritime, are true and complete copies
of these documents as now in effect. The minute books of Star Bulk
and the Subsidiaries are accurate in all material
respects.
Other than the Subsidiaries, Star Bulk does not
hold any equity interest in any other Person. Star Bulk owns all of
the issued and outstanding shares of stock of the Subsidiaries,
free and clear of any Liens.
(a)
As of immediately prior to the Closing, the authorized
capital stock of Star Bulk shall consist solely of 100,000,000
common shares, $0.01 par value and 25,000,000 preferred shares,
$0.01 par value, of which 500 common shares and no preferred shares
will be issued and outstanding.
(b)
The Star Bulk Shares to be issued upon effectiveness of the
Merger and upon exercise of the Star Bulk Warrants, when issued in
accordance with the terms of this Agreement, shall be duly
authorized, validly issued, fully paid and non-assessable and free
of all Liens.
|
3.4
|
Authority; Non-Contravention;
Approvals.
|
(a)
Star Bulk has full corporate power and authority, to enter
into this Agreement and to consummate the transactions contemplated
hereby. Star Bulk’s execution and delivery of this Agreement,
and its consummation of the transactions contemplated hereby, have
been duly authorized by its board of directors and no other
corporate proceedings on its part are necessary to authorize its
execution and delivery of this Agreement and its consummation of
the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Star Bulk and its parent, and
constitutes its and their valid and binding agreement, enforceable
against them in accordance with its terms, except that such
enforcement may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or
relating to enforcement of creditors’ rights generally and
(ii) general equitable principles ((i) and (ii) the “
Enforceability Exception ”).
(b)
All material consents, approvals, authorizations, orders,
licenses, registrations, clearances and qualifications of or with
any Governmental Authority having jurisdiction over Star Bulk or
the Subsidiaries or any of their properties required for the
execution and delivery by Star Bulk of this Agreement to be duly
and validly authorized have been obtained or made and are in full
force and effect.
(c)
Star Bulk’s execution and delivery of this Agreement
does not, and its consummation of the transactions contemplated
herein will not violate, conflict with or result in a breach of any
provision of, or constitute any default (or an event which, with
notice or lapse of time or both, would constitute an event of
default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or
acceleration under, or result in the creation of any Lien upon any
of its properties or assets under any of the terms, conditions or
provisions of (i) the Certificate of Incorporation or By-laws of
Star Bulk or any of the Subsidiaries, (ii) Approval, any Law or
Order, injunction, writ, permit or license of any Governmental
Authority applicable to it or any of its properties or assets, or
(iii) any note, bond, mortgage, indenture, deed of trust, license,
franchise, permit, concession, contract, lease or other instrument,
obligation or agreement of any kind to which it is now a party or
by which it or any of its properties or assets may be bound,
excluding from the foregoing clauses (ii) and (iii), such
violations, conflicts, breaches, defaults, terminations,
accelerations or creations of liens, security interests, charges or
encumbrances that do not, in the aggregate, have a Material Adverse
Effect on Star Bulk and the Subsidiaries taken as a
whole.
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3.5
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Contracts; No Default.
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(a)
Schedule 3.5(a) contains a true and complete list of all
contracts, agreements, commitments and other instruments (whether
oral or written) to which Star Bulk or any of the Subsidiaries is a
party that (i) involve a receipt or an expenditure by Star
Bulk or any of the Subsidiaries or require the performance of
services or delivery of goods to, by, through, on behalf of or for
the benefit of Star Bulk or any of the Subsidiaries, which in each
case, relates to a contract, agreement, commitment or instrument
that either (A) requires payments or receipts in excess of $50,000
per year or (B) is not terminable by Star Bulk or any of the
Subsidiaries on notice of thirty (30) days or less without penalty
or Star Bulk or any of the Subsidiaries being liable for damages of
$50,000 or more, or (ii) involve an obligation for the performance
of services or delivery of goods by Star Bulk or any of the
Subsidiaries that cannot, or in reasonable probability will not, be
performed within one year from the date hereof.
(b)
All of the contracts, agreements, commitments and other
instruments described in Schedule 3.5(a) (individually, a “
Contract ” and collectively, the “
Contract s”) are valid and binding upon Star Bulk or
the Subsidiaries, as applicable, and to the Knowledge of Star Bulk,
the other parties thereto, and are in full force and effect and
enforceable in accordance with their terms, subject to the
Enforceability Exception, and neither Star Bulk nor the
Subsidiaries, nor to the Knowledge of Star Bulk, any other party to
any Contract, has materially breached any provision of, nor has any
event occurred which, with the lapse of time or action by a third
party, could result in a material default under, the terms
thereof.
There is no (i) claim, action, suit or
proceeding pending or, to Star Bulk’s Knowledge, threatened
against or directly relating to Star Bulk before any Governmental
Authority, or (ii) outstanding Order, or application, request or
motion therefor, of any Governmental Authority in a proceeding to
which Star Bulk or any of its assets was or is a party except, in
the case of clauses (i) and (ii) above, such as would not,
individually or in the aggregate, either materially impair or
preclude Star Bulk’s ability to consummate the Merger or the
other transactions contemplated hereby or have a Material Adverse
Effect on Star Bulk.
(a)
Star Bulk and the Subsidiaries have duly filed with the
appropriate Governmental Authorities all material franchise, income
and all other material Tax Returns other than Tax Returns the
failure to file of which would have no Material Adverse Effect on
Star Bulk or the Subsidiaries. All such Tax Returns were, when
filed, and are accurate and complete in all material respects and
were prepared in conformity with applicable Laws. Star Bulk and the
Subsidiaries have paid or will pay in full or have adequately
reserved against all Taxes otherwise assessed against it through
the Closing Date. Neither Star Bulk nor any Subsidiary is a party
to any pending action or proceeding by any Governmental Authority
for the assessment of any Tax, and no claim for assessment or
collection of any Tax has been asserted in writing against Star
Bulk of any of the Subsidiaries that has not been paid. There are
no Liens for Taxes upon the assets of Star Bulk or any of the
Subsidiaries (other than Liens for Taxes not yet due and payable).
There is no valid basis, to the Knowledge of Star Bulk, for any
assessment, deficiency, notice, 30-day letter or similar intention
to assess any Tax to be issued to Star Bulk or any of the
Subsidiaries by any Governmental Authority.
(b)
No stamp or other issuance or transfer taxes or duties and no
capital gains, income, withholding or other Taxes are payable by or
on behalf of Star Maritime to the Marshall Islands or any political
subdivision or Taxing Authority thereof or therein in connection
with the issuance of the Star Bulk Shares to the Star Maritime
stockholders, the issuance of the Star Bulk Warrants or the
delivery by the Star Maritime stockholders of the Star Maritime
Shares or the delivery of the Star Maritime Warrants by the holders
thereof.
(a)
Neither Star Bulk nor any Subsidiary is in violation of or
has been given notice or been charged with any violation of, any
Law or Order (including, without limitation, any applicable
environmental law, ordinance or regulation) of any Governmental
Authority, except for violations which, in the aggregate, do not
have, and would not reasonably be expected to have, a Material
Adverse Effect on Star Bulk. Neither Star Bulk nor any Subsidiary
has received any written notice that any investigation or review
with respect to it by any Governmental Authority is pending or
threatened, other than, in each case, those the outcome of which,
as far as reasonably can be foreseen, would not reasonably be
expected to have a Material Adverse Effect on Star Bulk.
(b)
Each of Star Bulk and the Subsidiaries owns, possesses or has
obtained, all licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all
declarations and filings with, all Governmental Authorities, all
self-regulatory organizations and all courts and other tribunals,
necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as conducted as of the date
hereof, other than such licenses, permits, certificates, consents,
orders, approvals, other authorizations, declarations and filings
which individually or in the aggregate are not material to Star
Bulk and the Subsidiaries taken as a whole, and neither Star Bulk
nor any such Subsidiary has received any actual notice of any
proceeding relating to revocation or modification of any such
license, permit, certificate, consent, order, approval or other
authorization, and each of Star Bulk and the Subsidiaries is in
compliance with all Laws relating to the conduct of its business as
conducted as of the date hereof other than any failure to so comply
that would not have a Material Adverse Effect on Star
Bulk.
(c)
Star Bulk and the Subsidiaries (i) are in compliance
with any and all applicable foreign, federal, provincial, state and
local Laws, including any applicable regulations and standards
adopted by the International Maritime Organization, relating to the
protection of human health and safety, the environment or hazardous
or toxic substances or wastes, petroleum pollutants or contaminants
(“ Environmental Laws ”), (ii) have
received all permits, licenses, other approvals, authorizations and
certificates of financial responsibility required of them under
applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or
approvals would not, have a Material Adverse Effect on Star
Bulk.
(d)
None of the transactions contemplated herein will violate any
Foreign Assets Control Regulations of the United States contained
in Title 31, Code of Federal Regulations, Parts 500, 505, 515
and 535.
Star Bulk and the Subsidiaries have good and
marketable title to all of the assets and properties which they
purport to own as reflected on the most recent balance sheet
comprising a portion of the Star Bulk Financial Statement, or
thereafter acquired (except assets and properties sold or otherwise
disposed of since the date of such balance sheet in the ordinary
course of business). Star Bulk and the Subsidiaries have a valid
leasehold interest in all properties of which it is the lessee and
each such lease is valid, binding and enforceable against it, and,
to the Knowledge of Star Bulk, the other parties thereto in
accordance with its terms, subject to the Enforceability Exception.
Neither Star Bulk, the Subsidiaries nor, to Star Bulk’s
Knowledge, the other parties thereto are in default in the
performance of any material provision thereunder. Neither the whole
nor any material portion of the assets of Star Bulk or the
Subsidiaries is subject to any Order to be sold or is being
condemned, expropriated or otherwise taken by any public authority
with or without payment of compensation therefor, nor, to Star
Bulk’s Knowledge, has any such condemnation, expropriation or
taking been proposed. None of the material assets of Star Bulk or
the Subsidiaries is subject to any restriction which would have a
Material Adverse Effect on Star Bulk.
None of the information to be supplied by Star
Bulk for inclusion in the Proxy Statement, or in any amendments or
supplements thereto, to be distributed to the stockholders of Star
Maritime in connection with the meeting of such stockholders (the
“Star Maritime Special Meeting”) at the time of the
mailing of the Proxy Statement and at the time of the Star Maritime
Special Meeting contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
Neither Star Bulk nor any Subsidiary is a party
to any union contract or other collective bargaining agreement.
Star Bulk and the Subsidiaries are in compliance in all material
respects with all applicable Laws respecting employment and
employment practices, terms and conditions of employment and wages
and hours, and Star Bulk and the Subsidiaries are not engaged in
any unfair labor practice. There is no labor strike, slowdown or
stoppage pending (or, to the Knowledge of Star Bulk, any labor
strike or stoppage threatened) against or affecting Star Bulk or
the Subsidiaries. No petition for certification has been filed and
is pending before any Governmental Authority with respect to any
employees of Star Bulk or the Subsidiaries who are not currently
organized.
To Star Bulk’s knowledge, no key employee
or group of employees has any plans to terminate employment with
Star Bulk or any of the Subsidiaries.
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3.13
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Financial Statements.
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Star Bulk has provided Star Maritime with a
draft of the audited consolidated balance sheet dated February 5,
2007 (the “ Star Bulk Financial Statement ”).
The Star Bulk Financial Statement presents fairly, in all material
respects, the consolidated financial position and results of
operations of Star Bulk and the Subsidiaries as of the dates,
period and year indicated, prepared in accordance with GAAP, and to
the Knowledge of Star Bulk, in accordance with Regulation S-X,
promulgated by the SEC, and, in particular, Rules 1-02 and 3-05
thereunder. Without limiting the generality of the foregoing, (i)
as of the date of the consolidated balance sheet comprising a
portion of the Star Bulk Financial Statement, there was no material
debt, liability or obligation of any nature not reflected or
reserved against in the Star Bulk Financial Statement or in the
notes thereto required to be so reflected or reserved in accordance
with GAAP, and (ii) there are no assets of Star Bulk or the
Subsidiaries, the value of which (in the reasonable judgment of
Star Bulk) is materially overstated in the Star Bulk Financial
Statement. Except as incurred in the ordinary course of business
since December 31, 2006, Star Bulk has no known material contingent
liabilities (including liabilities for Taxes) other than
as
