Document:

Exhibit 10.20

 

REGISTRATION
RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS
AGREEMENT (this “Agreement”) is dated as of this        
day of                  ,
200    , by and between Conbulk Corporation, a corporation
organized under the laws of the Republic of the Marshall Islands (the “Company”),
and the stockholders of Palmosa Shipping Corporation, a corporation organized
under the laws of the Republic of the Marshall Islands (“Palmosa”),
named on Schedule A hereto (the “Stockholders”).

 

WHEREAS, the execution of
this Agreement is a condition precedent to the consummation of the transactions
contemplated by that certain Membership Interest Purchase and Sale Agreement,
dated as of                         ,
2008 (the “Purchase Agreement”);

 

WHEREAS, pursuant to the
Supplemental Agreement and the MOAs (each as defined in the Purchase Agreement,
and collectively referred to herein as the “Vessel Acquisition Agreements”),
upon consummation of the transactions contemplated by the Vessel Acquisition
Agreements, receive an aggregate of                  
shares of the common stock, $.001 par value, of the Company (the “Closing
Date Shares”); and

 

WHEREAS, pursuant to the
terms of that certain Management Agreement dated as of the date hereof, by and
between the Company and Conbulk Management S.A. (the “Management Agreement”),
and following the consummation of the merger of Arcade Acquisition Corp., a
Delaware corporation, with and into the Company, the Stockholders may become
entitled to receive an aggregate of an additional                        
shares of Common Stock of the Company (the “Earnout Shares”); and

 

NOW, THEREFORE, in
consideration of the premises, as an inducement to Palmosa and the Stockholders
to consummate the transactions contemplated by the Purchase Agreement, the
Vessel Acquisition Agreements and the Management Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and the Stockholders hereby covenant and agree with
each other as follows:

 

1.             Stockholders’
Investment Representations. Each of the
Stockholders represents and warrants to the Company as follows:

 

1.1          The
shares of Common Stock of the Company to be received by each Stockholder
pursuant to the terms of the Vessel Acquisition Agreements and the Management
Agreement representing either the Closing Date Shares or the Earnout Shares
(collectively, the “Shares”) are being acquired for investment for its
own account, without any view to the unregistered public distribution or resale
thereof, all without prejudice, however, to the right of such Stockholder at
any time lawfully to sell or otherwise to dispose of all or any part of the
Shares pursuant to registration or any exemption therefrom under the Securities
Act of 1933, as amended, (the “Securities Act”) and applicable state
securities laws, subject to the restrictions on resale contained in this
Agreement.  Each of the Stockholders
acknowledges and understands that except as provided in and subject to the
terms and conditions contained in this Agreement, such Stockholder has no
independent right to require the Company to register the Shares and 

 

 

represents and warrants that such Stockholder will sell the Shares only
in compliance with the restrictions, terms and conditions contained in this
Agreement and applicable federal and state securities laws.

 

1.2          Each
Stockholder understands that the Shares to be received by it pursuant to the
terms of the Vessel Acquisition Agreements and the Management Agreement are
characterized as “restricted securities” under the Securities Act inasmuch as
they are being acquired from the Company in a transaction not involving a
public offering and that under the Securities Act and applicable regulations
promulgated thereunder such securities may be resold without registration under
the Securities Act only in certain limited circumstances.

 

1.3          Each
Stockholder is either an “accredited investor” within the meaning of Rule 501
of Regulation D under the Securities Act or has employed the services of an
investment advisor, attorney or accountant to read all the documents made
available by the Company and to evaluate the merits and the risks of the merger
transaction on its behalf.  Such
Stockholder understands that an investment in Shares is highly speculative and
involves a high degree of risk.

 

1.4          Each
Stockholder has had a full and complete opportunity to inquire and examine all
information deemed by it to be relevant and material to make an informed
decision about the transactions contemplated in the Purchase Agreement, the
Vessel Acquisition Agreements and the Management Agreement.  Each Stockholder acknowledges and agrees that
it is not relying upon any representations or warranties of the Company except
the representations and warranties specifically set forth in the Purchase
Agreement.

 

1.5          Each
Stockholder has, prior to the date hereof, received such information as such
Stockholder has reasonably requested concerning the Company and its business,
results of operations and financial condition.

 

1.6          Each
Stockholder acknowledges that the certificates evidencing the Shares shall bear
the following legend:

 

“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.  THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT.”

 

The foregoing legend
shall be removed by the Company from any certificate at such time as the holder
of the Shares represented by the certificate delivers an opinion of counsel
reasonably satisfactory to the Company to the effect that such legend is not
required in order to establish compliance with any provisions of the Securities
Act, or at such time as the holder of such Shares satisfies the requirements of
Rule 144(b)(1) under the Securities Act, and provided further that
the Company has received from the holder a written representation that such
holder satisfies the requirements of Rule 144(b)(1) as then in effect
with respect to such Shares.

 

2

 

2.             Required
Registrations of the Shares.  The Company shall:

 

2.1          subject
to receipt of information deemed reasonably necessary by the Company from the
Stockholders, prepare and file with the Securities and Exchange Commission (the
“SEC”), as soon as practicable, but in no event later than five months
after the effective date of the merger contemplated by the Purchase Agreement
(the “Merger Date”), a registration statement on Form S-3 (or if Form S-3
or other short-form registration is not available at such time, on Form S-1)
(the “Initial Registration Statement”) to enable the resale of the
Closing Date Shares by the Stockholders from time to time on the principal
exchange on which the Company’s common stock is then traded (the “Principal
Exchange”) or in privately-negotiated transactions and shall use its best
efforts, subject to receipt of information from the Stockholders that the
Company reasonably deems necessary, to cause the Initial Registration Statement
to become effective as soon as practicable, but in no event later than six
months after the Merger Date.

 

2.2          subject
to receipt of necessary information from the Stockholders, prepare and file with
the SEC, as soon as practicable, but in no event later than one month after the
date by which the Earnout Shares are required by the Management Agreement to be
delivered to the Stockholders or their representative (the “Earn-Out
Issuance Date”), a registration statement on Form S-3 (or if Form S-3
or other short-form registration is not available at such time, on Form S-1)
(the “Second Registration Statement”) to enable the resale of the
Earnout Shares by the Stockholders from time to time on the Principal Exchange
or in privately-negotiated transactions and shall use its best efforts, subject
to receipt of necessary information from the Stockholders, to cause the Second
Registration Statement to become effective as soon as practicable, but in no
event later than three months after the Earn-Out Issuance Date;

 

2.3          it
shall be a condition precedent to the obligations of the Company to take any
action pursuant to this Section 2 that the Stockholder shall furnish to
the Company such information regarding itself, the Shares to be sold by
Stockholder, and the intended method of disposition of such securities as shall
be required to effect the registration of the Shares.

 

3.             Registration
Procedures. In connection with the Initial
Registration Statement required by Section 2.1 or a Second Registration
Statement if required by Section 2.2 (either a “Registration Statement”),
the Company shall:

 

3.1          use
its best efforts to prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith as may be necessary to keep the Registration Statement current and
effective for a period ending not sooner than, with respect to each Stockholder’s
Closing Date Shares or Earnout Shares, as applicable, the earlier of (i) the
date on which the Stockholder may sell all Shares then held by the Stockholder
without restriction by the volume limitations of Rule 144 of the
Securities Act or (ii) such time as the Shares included in the
Registration Statement have been sold pursuant thereto.

 

3.2          not
less than 48 hours prior to filing the Registration Statement or prospectus, or
any amendment or supplement thereto, furnish without charge to the Stockholders
included in such registration copies of such Registration Statement as proposed
to be filed, each amendment and supplement to such Registration Statement (in
each case including all exhibits thereto and 

 

3

 

documents incorporated by reference therein) and the prospectus
included in such Registration Statement.

 

3.3          furnish
to the Stockholders with respect to the Shares registered under the
Registration Statement such number of copies of the Registration Statement,
prospectuses and preliminary prospectuses in conformity with the requirements
of the Securities Act and such other documents as each Stockholder may
reasonably request, in order to facilitate the public sale or other disposition
of all or any of the Shares by the Stockholder, provided, however,
that the obligation of the Company to deliver copies of prospectuses or
preliminary prospectuses to a Stockholder shall be subject to the receipt by
the Company of reasonable assurances from the Stockholder that the Stockholder
will comply with the applicable provisions of the Securities Act and of such
other securities or blue sky laws as may be applicable in connection with any
use of such prospectuses or preliminary prospectuses;

 

3.4          use
its best efforts to register or qualify the securities covered by such
registration statement under such state securities or blue sky laws of such
jurisdictions as the Stockholders may reasonably request in writing within
twenty (20) days following the original filing of such Registration Statement, provided,
however, that the Company shall not be required to qualify to do
business or consent to service of process in any jurisdiction in which it is
not now so qualified or has not so consented;

 

3.5          use
its best efforts to cause the Shares included in any registration to be listed
on such exchanges or otherwise designated for trading in the same manner as
similar securities issued by the Company are then listed or designated or, if
no such similar securities are then listed or designated, in a manner
satisfactory to the holders of a majority of the Shares included in such
registration;

 

3.6          notify
the Stockholders, promptly after it shall receive notice thereof, of the time
when such Registration Statement has become effective or a supplement to any
prospectus forming a part of such Registration Statement has been filed;

 

3.7          advise
the Stockholders promptly after it shall receive notice or obtain knowledge of
the issuance of any stop order by the SEC delaying or suspending the
effectiveness of the Registration Statement or of the initiation of any
proceeding for that purpose; and it will promptly use its commercially
reasonable efforts to prevent the issuance of any stop order or to obtain its
withdrawal at the earliest possible moment if such stop order should be issued.

 

4

 

4.             Expenses of
Registration. All reasonable expenses incurred
in effecting the registrations provided for in Sections 2.1 and 2.2, including,
without limitation, all registration and filing fees, fees payable to the
Financial Industry Regulatory Authority, printing expenses, fees and
disbursements of counsel for the Company, fees and disbursements not to exceed
$25,000 in the aggregate for one counsel for the Stockholders (selected by
Stockholders holding a majority of the Shares to be included in the applicable
Registration Statement), underwriting expenses (other than fees, commissions or
discounts), expenses of any audits incident to or required by any such
registration and expenses of complying with the securities or blue sky laws of
any jurisdictions, shall be paid by the Company; provided, however,
that except as provided for above, the Stockholders shall bear the cost of
their own counsel.

 

5.             Transfer of Shares
After Registration.  The Stockholder agrees that it will not
effect any disposition of the Shares or its right to purchase the Shares that
would constitute a sale within the meaning of the Securities Act except as
contemplated in the Registration Statement referred to in Section 2 and as
described below or pursuant to Rule 144(b)(1) of the Securities Act,
and that it will promptly notify the Company of any changes in the information
set forth in the Registration Statement regarding the Stockholder or its plan
of distribution.

 

6.             Rule 144. The Company shall use its commercially reasonable
efforts to file any reports required to be filed by it under the Securities Act
and the Exchange Act and take such further action as the holders of Shares may
reasonably request, all to the extent required from time to time to enable such
holders to sell Shares without registration under the Securities Act within the
limitation of the exemption provided by Rule 144, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.

 

7.             Indemnification.

 

7.1          The
Company will indemnify and hold harmless each holder of Shares which are
included in a Registration Statement pursuant to the provisions of Section 2.1
or Section 2.2 hereof, its directors and officers, and any underwriter (as
defined in the Securities Act) for such holder and each person, if any, who
controls such holder or such underwriter within the meaning of the Act, from
and against, and will reimburse such holder and each such underwriter and
controlling person with respect to, any and all loss, damage, liability, cost
and expense to which such holder or any such underwriter or controlling person
may become subject under the Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue statement or alleged
untrue statement of any material fact contained in such Registration Statement,
any prospectus contained therein or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading; provided, however, that the Company will not be
liable in any such case to a holder, underwriter or controlling person to the
extent that any such loss, damage, liability, cost or expenses arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by or on
behalf of such holder, such underwriter or such controlling person in writing
specifically for use in the preparation thereof.

 

5

 

7.2          Each
holder of Shares included in a Registration Statement pursuant to the
provisions of Section 2.1 or Section 2.2 hereof will indemnify and
hold harmless the Company, its directors and officers, any controlling person
and any underwriter from and against, and will reimburse the Company, its
directors and officers, any controlling person and any underwriter with respect
to, any and all loss, damage, liability, cost or expense to which the Company
or any controlling person and/or any underwriter may become subject under the
Securities Act or otherwise, insofar as such losses, damages, liabilities,
costs or expenses are caused by any untrue statement or alleged untrue
statement of any material fact contained in such Registration Statement, any
prospectus contained therein or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was so made in
reliance upon and in strict conformity with written information furnished by or
on behalf of such holder specifically for use in the preparation thereof.  Notwithstanding the foregoing, the liability
of the Stockholders with respect to losses referred to in Section 7.2
shall not exceed the gross proceeds received by the holder from the sale of the
Shares in the sale giving rise to such claim.

 

7.3          Promptly
after receipt by an indemnified party pursuant to the provisions of Sections
7.1 or 7.2 of notice of the commencement of any action involving the subject
matter of the foregoing indemnity provisions such indemnified party will, if a
claim thereof is to be made against the indemnifying party pursuant to the
provisions of said Sections 7.1 or 7.2, promptly notify the indemnifying party
of the commencement thereof; but the omission to so notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than hereunder. 
In case such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party, provided,
however, if counsel for the indemnified party concludes that a single
counsel cannot under applicable legal and ethical considerations, represent
both the indemnifying party and the indemnified party, the indemnified party or
parties have the right to select separate counsel to participate in the defense
of such action on behalf of such indemnified party or parties.  After notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof, the indemnifying
party will not be liable to such indemnified party pursuant to the provisions
of said paragraph (a) or (b) for any legal or other expense
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, unless (i) the
indemnified party shall have employed counsel in accordance with the provisions
of the preceding sentence, (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after the notice of the
commencement of the action or (iii) the indemnifying party has, in its
sole discretion, authorized the employment of counsel for the indemnified party
at the expense of the indemnifying party.

 

8.             Notices.  All notices,
requests, consents and other communications hereunder shall be in writing,
shall be mailed (A) if within domestic United States by first-class
registered or certified airmail, or nationally recognized overnight express
courier, postage prepaid, or by facsimile, or 

 

6

 

(B) if delivered from outside
the United States, by International Federal Express or facsimile, and shall be
deemed given (i) if delivered by first-class registered or certified mail domestic,
three business days after so mailed, (ii) if delivered by nationally
recognized overnight carrier, one (1) business day after so mailed, (iii) if
delivered by International Federal Express, two (2) business days after so
mailed, (iv) if delivered by facsimile, upon electric confirmation of
receipt and shall be delivered as addressed as follows:

 

(a)           if to
the Company, to:

 

Conbulk
Corporation

 

Attn:

Phone:

Telecopy:

 

(b)           with
a copy mailed to:

 

Loeb &
Loeb LLP

345
Park Avenue

New
York, New York 10154

Attn:
Fran Stoller

Phone:
212-407-4935

Telecopy:
212-214-0706

 

(c)           if
to the Stockholder, at its address on the Signature Page hereto, or at
such other address or addresses as may have been furnished to the Company in
writing.

 

9.             Changes.  This Agreement
may not be modified or amended except pursuant to an instrument in writing
signed by the Company and the Stockholders owning at least 51% of the Shares
then issued and outstanding.

 

10.          Headings.  The headings
of the various sections of this Agreement have been inserted for convenience of
reference only and shall not be deemed to be part of this Agreement.

 

11.          Severability.  In case any
provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.

 

12.          Governing Law.  This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York, without giving effect to the principles of
conflicts of law.

 

13.          Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall
constitute an original, but all of which, when taken together, shall constitute
but one instrument, and shall become effective when one or more counterparts
have been signed by each party hereto and delivered to the other parties.

 

7

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed as of the date
first set forth above.

 

 

	
   

  	
  CONBULK
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STOCKHOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                       ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                       ]

  

 

8Exhibit
10.21

 

Lock-Up Agreement

 

                ,
200    

 

Conbulk
Corporation

[                        ]

[                        ]

 

Gentlemen:

 

As an inducement
to the parties to that certain Membership Interest Purchase and Sale Agreement,
dated as of                              ,
2008 (the “Purchase Agreement”) to consummate the transactions
contemplated hereby, the undersigned (the “Securityholder”) agrees, for
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, as follows:

 

1.             the
Securityholder will not, without the prior written consent of the Company
(which consent may only be given with the approval of the majority of the
independent members of the Company’s board of directors), directly or
indirectly offer, sell, pledge, contract to sell (including any short sale),
grant any option to purchase, enter into any contract to sell or otherwise
dispose of or transfer any shares of the Company’s common stock or other equity
securities of the Company acquired by the Securityholder (i) pursuant to
the Purchase Agreement and any shares of common stock which may be issued upon
exercise of any such equity securities (each a “Merger Security” and, collectively,
the “Merger Securities”), or (ii) directly or indirectly pursuant
to that certain Management Agreement (the “Management Agreement”), dated
as of                        ,
2008, by and between the Company and Conbulk Management S.A. (each, an “Earnout
Security”, collectively, the “Earnout Securities” and, together with
the Merger Securities, the “Securities”) or enter into any Hedging
Transaction (as defined below) (each of the foregoing referred to as a “Disposition”)
until (x) with respect to the Merger Securities,                          ,
2009 (the one (1) year anniversary of the merger closing), and (y) with
respect to the Earnout Securities, the one (1) year anniversary of the date
the applicable Earnout Security is earned by the Securityholder pursuant to the
Management Agreement (each, the “Applicable Lock-Up Period”).  “Hedging Transaction” means any short
sale (whether or not against the box) or any purchase, sale or grant of any
right (including, without limitation, any put or call option) with respect to
any security (other than a broad-based market basket or index) that includes,
relates to or derives any significant part of its value from the Securities.

 

2.             Notwithstanding
the foregoing, the Securityholder may transfer any or all of the Securities (i) if
the Securityholder is a natural person, by gift, will or intestacy so long as
the transfer is not for value; (ii) if the Securityholder is a natural
person, to any trust for 

 

 

the direct or indirect
benefit of the Securityholder or the immediate family of the Securityholder so
long as the transfer is not for value; (iii) pursuant to a qualified
domestic relations order; (iv) if, subsequent to the transactions
contemplated by the Purchase Agreement, the Company consummates a liquidation,
merger, stock exchange or other similar transaction which results in all of its
stockholders having the right to exchange their shares of common stock for
cash, securities or other property; (v) if the Securityholder is a
partnership, to a partner of such partnership or a retired partner of such
partnership who retires after the date hereof so long as the transfer is not
for value; and (vi) if the Securityholder is a corporation, limited
liability company or limited partnership to any of its wholly-owned
subsidiaries; provided, however, that in any such case it shall
be a condition to the transfer that, prior to or concurrently with such
transfer, the transferee executes and delivers to the Company an agreement, in
form and substance satisfactory to the Company, stating that the transferee is
receiving and agrees to hold the Securities subject to the provisions of this
letter agreement, and there shall be no further transfer of such Securities except
in accordance with this letter agreement. 
For purposes of this letter-up agreement, “immediate family”
shall mean any relationship by blood, marriage, or adoption, not more remote
than first cousin.

 

3.             Without
limiting the restrictions herein, any Disposition by the Securityholder shall
remain at all times subject to applicable securities laws, including without
limitation the resale restrictions imposed by Rule 144 promulgated under
the Securities Act of 1933, as amended.

 

4.             The
Securityholder hereby agrees that, to the extent that the terms of this letter
agreement conflict with or are in any way inconsistent with any registration
rights agreement or similar agreement to which the Securityholder is a party or
under which the Securityholder is entitled to any right or benefit, this letter
agreement supersedes such registration rights agreement or similar agreements.

 

5.             The
Securityholder understands that the parties to the Purchase Agreement will
proceed with the consummation of the transactions contemplated thereby in
reliance on this letter agreement.

 

6.             This
letter agreement shall be governed by the laws of the State of New York,
without regard to any applicable choice of law provisions.

 

2

 

7.             The
Securityholder hereby represents and warrants that the Securityholder has full
power and authority to enter into this letter agreement and that this letter
agreement has been duly authorized (if applicable), executed and delivered by
the Securityholder and is a valid and binding agreement of the
Securityholder.  All authority herein
conferred or agreed to be conferred shall survive the death or incapacity of
the Securityholder and any obligations of the Securityholder shall be binding
upon the heirs, personal representatives, successors and assigns of the
Securityholder.

 

 

	
  Very truly yours

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Signature)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Print Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Print Name of Securityholder, if 

  	
   

  
	
  Securityholder is an entity)

  	
   

  

 

Consent of Spouse

 

I, the spouse of the
above-named Securityholder, acknowledge and agree that I am bound by the terms
of this letter agreement as to any and all interests I may have in Securities
acquired, held or beneficially owned by my spouse.

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name

  

 

3

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