Document:

exv10w1

Exhibit 10.1

$75,000,000

Insulet Corporation

5.375% Convertible Senior Notes Due 2013

Registration Rights Agreement

June 16, 2008                    

J.P. Morgan Securities Inc.

277 Park Avenue

New York, New York 10172

Merrill Lynch & Co.,

Merrill Lynch, Pierce, Fenner & Smith Incorporated

4 World Financial Center

New York, New York 10080

Ladies and Gentlemen:

     Insulet Corporation, a Delaware corporation (the “Company”), proposes to issue and sell to
J.P. Morgan Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the “Initial
Purchasers”), pursuant to the purchase agreement dated June 10, 2008, between the Company and the
Initial Purchasers (the “Purchase Agreement”), $75,000,000 aggregate principal amount of its 5.375%
Convertible Senior Notes due 2013 (the “Firm Notes”), and at the election of the Initial
Purchasers, up to an additional $10,000,000 aggregate principal amount of the Company’s 5.375%
Convertible Senior Notes due 2013 solely to cover over-allotments (the “Additional Notes” and,
together with the Firm Notes, the “Notes”), in each case, upon the terms and subject to the
conditions set forth in the Purchase Agreement.

     As an inducement to the Initial Purchasers to enter into the Purchase Agreement and in
satisfaction of a condition to the obligations of the Initial Purchasers thereunder, the Company
agrees with the Initial Purchasers, for the benefit of the Holders (as defined below), as follows:

     1. Certain Definitions.

     Capitalized terms used but not defined herein shall have the meanings given to such terms in
the Purchase Agreement. For purposes of this Registration Rights Agreement, the following terms
shall have the following meanings:

     (a) “Additional Notes” has the meaning specified in the first paragraph of this
Agreement.

 

 

     (b) “Additional Interest” has the meaning assigned thereto in Section 2(d).

     (c) “Additional Interest Payment Date” has the meaning assigned thereto in Section
2(d)(v).

     (d) “Affiliate” has the meaning set forth in Rule 405 under the Securities Act, except
as otherwise expressly provided herein.

     (e) “Agreement” means this Registration Rights Agreement, as the same may be amended
from time to time pursuant to the terms hereof.

     (f) “Automatic Shelf Registration Statement” has the meaning set forth in Rule 405
under the Securities Act.

     (g) “Business Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to remain closed.

     (h) “Commission” means the Securities and Exchange Commission, or any other federal
agency at the time administering the Exchange Act or the Securities Act, whichever is the
relevant statute for the particular purpose.

     (i) “Company” has the meaning assigned thereto in the first paragraph of this
Agreement.

     (j) “Deferral Notice” has the meaning assigned thereto in Section 3(b).

     (k) “Deferral Period” has the meaning assigned thereto in Section 3(b).

     (l) “Effective Period” has the meaning assigned thereto in Section 2(a).

     (m) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.

     (n) “FINRA” means the Financial Industry Regulatory Authority, Inc.

     (o) “Holder” means each holder, from time to time, of Registrable Securities (including
the Initial Purchasers).

     (p) “Indemnified Holder” has the meaning assigned thereto in Section 6(a).

     (q) “Indenture” means the Indenture dated as of June 16, 2008 between the Company and
the Trustee, pursuant to which the Notes are being issued.

     (r) “Initial Purchasers” has the meaning assigned thereto in the first paragraph of
this Agreement.

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     (s) “Last Reported Sale Price” has the meaning assigned to it in the Indenture.

     (t) “Material Event” has the meaning assigned thereto in Section 3(a)(iv).

     (u) “Majority Holders” means, on any date, the holders of the majority in aggregate
amount of the Registrable Securites; provided that such aggregate amount, with respect to
Notes that are Registrable Securities will be based on the aggregate principal amount of
Notes that are Registrable Securities, and with respect to Shares that are Registrable
Securities, will be based on the average of the Last Reported Sale Prices of the Company’s
Common Stock for each of five consecutive trading days ending on a date chosen by the
Company in a reasonable manner to effect the intent of this Agreement multiplied by the
number of such Shares that are Registrable Securities; provided further that whenever the
consent or approval of the Majority Holders is required hereunder, any Registrable
Securities owned directly or indirectly by the Company or any Affiliate shall not be counted
in determining whether such consent or approval was given by the Majority Holders; provided
further that if the Company shall issue any additional Securities under the Indenture prior
to the effectiveness of any Shelf Registration Statement, such additional Securities, to the
extent they are Registrable Securities,and the Securities to be issued on June 16, 2008, to
the extent they are Registrable Securities, shall be treated together as one class for
purposes of determining whether the consent or approval of the Majority Holders has been
obtained.

     (v) “Notice and Questionnaire” means a written notice delivered to the Company
containing substantially the information called for by the Form of Selling Securityholder
Notice and Questionnaire attached as Annex A to the Offering Memorandum.

     (w) “Notice Holder” means, on any date, any Holder that has delivered a properly
completed Notice and Questionnaire to the Company on or prior to such date.

     (x) “Notes” has the meaning assigned thereto in the first paragraph of this Agreement.

     (y) “Offering Memorandum” means the Final Offering Memorandum dated June 10, 2008
relating to the offer and sale of the Notes.

     (z) “Person” means a corporation, limited liability company, association, partnership,
organization, business, individual, government or political subdivision thereof or
governmental agency.

     (aa) “Prospectus” means the prospectus included in any Shelf Registration Statement
(including, without limitation, a prospectus that discloses information previously omitted
from a prospectus filed as part of an effective registration statement in reliance upon Rule
430A, 430B or 430C under the Securities Act), as amended or supplemented by any amendment or
prospectus supplement, including post-effective

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amendments, and all materials incorporated by reference or explicitly deemed to be
incorporated by reference in such Prospectus.

     (bb) “Purchase Agreement” has the meaning assigned thereto in the first paragraph of
this Agreement.

     (cc) “Registrable Securities” means the Securities; provided, however, that such
Securities shall not be Registrable Securities if as of the applicable date of determination
(i) such Securities have ceased to be outstanding; (ii) in the circumstances contemplated by
Section 2(a), a registration statement registering such Securities under the Securities Act
has been declared or becomes effective and such Securities have been sold or otherwise
transferred or disposed of by the Holder thereof pursuant to such effective registration
statement; or (iii) such Securities are eligible to be sold to the public by the Holder
thereof without restriction pursuant to Rule 144.

     (dd) “Registration Default” has the meaning assigned thereto in Section 2(d).

     (ee) “Registration Expenses” has the meaning assigned thereto in Section 5.

     (ff) “Rule 144,” “Rule 144A,” “Rule 405,” “Rule 415” and “Rule 433” mean, in each case,
such rule as promulgated under the Securities Act.

     (gg) “Securities” means the Notes and the Shares.

     (hh) “Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

     (ii) “Shares” means the shares of common stock of the Company, par value $0.001 per
share (the “Common Stock”), into which the Notes are convertible or that have been issued
upon any conversion of Notes into common stock of the Company.

     (jj) “Shelf Inspectors” has the meaning assigned thereto in Section 3(a)(vii).

     (kk) “Shelf Registration Statement” means the shelf registration statement referred to
in Section 2(a), as amended or supplemented by any amendment or supplement, including
post-effective amendments and any additional information contained in a form of prospectus
or prospectus supplement that is deemed retroactively to be a part of the Shelf Registration
Statement pursuant to Rules 430A, 430B or 430C, and all materials incorporated by reference
or explicitly deemed to be incorporated by reference in such Shelf Registration Statement,
which may be an Automatic Shelf Registration Statement.

     (ll) “Special Counsel” shall have the meaning assigned thereto in Section 5.

     (mm) “Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, or any
successor thereto, and the rules, regulations and forms promulgated thereunder, all as the
same shall be amended from time to time.

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     (nn) “Trustee” shall have the meaning assigned such term in the Indenture.

     Unless the context otherwise requires, any reference herein to a “Section” or “clause” refers
to a Section or clause, as the case may be, of this Agreement, and the words “herein,” “hereof” and
“hereunder” and other words of similar import refer to this Agreement as a whole and not to any
particular Section or other subdivision. Unless the context otherwise requires, any reference to a
statute, rule or regulation refers to the same (including any successor statute, rule or regulation
thereto) as it may be amended from time to time.

     2. Registration Under the Securities Act.

     (a) The Company agrees that if:

     (i) on the six-month anniversary of the last date of original issuance
of the Notes any Registrable Securities are held by any Person other than
the Company, an Affiliate of the Company or an Initial Purchaser;

     (ii) at any time after the six-month anniversary of the last date of
original issuance of the Notes the conditions set forth in paragraph (c)(1)
of Rule 144 are not satisfied with respect to the Securities; or

     (iii) an Initial Purchaser or an Affiliate that holds Registrable
Securities requests;

the Company shall file an Automatic Shelf Registration Statement, if the Company is eligible
to do so and has not already done so (provided such previously filed Automatic Shelf
Registration Statement covers all Holders of Registrable Securities determined as of the
date such subsequent obligation arose), and, if the Company is not eligible for an Automatic
Shelf Registration Statement, then in lieu of the foregoing the Company shall file a Shelf
Registration Statement for the registration of, and the sale on a continuous or delayed
basis by the Holders of, all of the Registrable Securities pursuant to Rule 415 or any
similar rule that may be adopted by the Commission, and use its commercially reasonable
efforts to cause the Shelf Registration Statement to become or be declared effective under
the Securities Act, (x) on the day that is six months after the last date of original
issuance of the Notes, in the case of clause (i) above, (y) as soon as practicable in the
case of clause (ii) above and (z) by the 30th day after the date of receipt of
notice requesting registration from an Initial Purchaser or an Affiliate that has delivered
a properly completed Notice and Questionnaire to the Company on or prior to such date, but
not before the six-month anniversary of the last date of original issuance of the Notes, in
the case of clause (iii). It being understood that if there are no Registrable Securities
entitled to be included in the Shelf Registration Statement at such time that the Company
shall have no obligation to file such Shelf Registration Statement at such time.

     The Company agrees to use its commercially reasonable efforts to keep such Shelf
Registration Statement continuously effective, subject to Section 3(b), until the earliest
of (x) one year from the last date of original issuance of the Notes; (y) the date by

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which all Registrable Securities have been sold pursuant to such Shelf Registration
Statement; and (z) such date as each of the Registrable Securities covered by the Shelf
Registration Statement ceases to be a Registrable Security (the “Effective Period”).

     (b) The Company further agrees that it shall cause the Shelf Registration Statement,
the related Prospectus and any amendment or supplement thereto, as of the effective date of
the Shelf Registration Statement, as of the time of sale of any Securities under such Shelf
Registration Statement, and as of the date of any such amendment or supplement, (i) to
comply in all material respects with the applicable requirements of the Securities Act and
(ii) not to contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein (in the
case of the Prospectus, in the light of the circumstances under which they were made) not
misleading, and the Company agrees to furnish to the Holders such number of copies as such
Holders may reasonably request of any supplement or amendment prior to its being used or
promptly following its filing with the Commission; provided, however, that the Company shall
have no obligation to deliver to Holders copies of any amendment consisting exclusively of
an Exchange Act report or other Exchange Act filing otherwise publicly available on the
Commission’s Edgar database. If the Shelf Registration Statement, as amended or
supplemented from time to time, ceases to be effective for any reason at any time during the
Effective Period (other than because all Registrable Securities registered thereunder shall
have been sold pursuant thereto or shall have otherwise ceased to be Registrable
Securities), the Company shall use its commercially reasonable efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof.

     (c) Each Holder agrees that if such Holder wishes to sell Registrable Securities
pursuant to the Shelf Registration Statement and related Prospectus, it will do so only in
accordance with this Section 2(c), Section 3(c) and Section 4. From and after the date the
Shelf Registration Statement is initially effective and until the tenth (10th)
Business Day prior to the expiration of the Effective Period, the Company shall, as promptly
as is reasonably practicable after the date a Notice and Questionnaire is delivered by a
Notice Holder, and in any event within (x) ten (10) Business Days after the date such Notice
and Questionnaire is received by the Company, (y) if a Notice and Questionnaire is so
received during a Deferral Period, ten (10) Business Days after the expiration of such
Deferral Period or (z) if a Notice and Questionnaire is received prior to a Deferral Period,
but a Deferral Period occurs prior to ten (10) Business Days after such receipt, ten (10)
Business Days after the expiration of such Deferral Period,

     (i) if required by applicable law, file with the Commission a post-effective amendment
to the Shelf Registration Statement or prepare and, if required by applicable law, file a
supplement to the related Prospectus or a supplement or amendment to any document
incorporated therein by reference or file any other required document so that the Holder
delivering such Notice and Questionnaire is named as a selling security holder in the Shelf
Registration Statement and the related Prospectus in such a manner as to permit such Holder
to deliver such Prospectus to purchasers of the Registrable Securities in accordance with
applicable law and, if the Company shall file a post-

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effective amendment to the Shelf Registration Statement and such amendment is not
automatically effective, use its commercially reasonable efforts to cause such
post-effective amendment to be declared or to otherwise become effective under the
Securities Act as promptly as is reasonably practicable;

     (ii) provide such Holder with as many copies of any documents filed pursuant to Section
2(c)(i) as such Holder may reasonably request in connection with the Securities covered by
such Holder’s Notice and Questionnaire; and

     (iii) notify such Holder as promptly as reasonably practicable after the effectiveness
under the Securities Act of any post-effective amendment filed pursuant to Section 2(c)(i);

provided that if such Notice and Questionnaire is delivered during a Deferral Period, the
Company shall so inform the Holder delivering such Notice and Questionnaire and shall take
the actions set forth in this Section 2(c) above upon expiration of the Deferral Period in
accordance with Section 3(b). Notwithstanding anything contained herein to the contrary,
the Company shall be under no obligation to name any Holder that is not a Notice Holder as a
selling securityholder in any Shelf Registration Statement or related Prospectus or
prospectus supplement; provided, however, that any Holder that becomes a Notice Holder
pursuant to the provisions of this Section 2(c) (whether or not such Holder was a Notice
Holder at the time the Shelf Registration Statement was declared or otherwise became
effective) shall be named as a selling securityholder in the Shelf Registration Statement or
related Prospectus in accordance with the requirements of this Section 2(c).

     (d) If any of the following events (any such event a “Registration Default”) shall
occur, then additional interest (the “Additional Interest”) shall become payable by the
Company to Holders in respect of the Notes as follows:

     (i) if on the day that is six months after the last date of original issuance of the
Notes, Registrable Securities are held by any Person other than an Affiliate of the Company,
the Company or an Initial Purchaser and the Shelf Registration Statement has not been filed
with and declared effective by the Commission by such date (other than pursuant to Section
3(b) hereof), and the Company does not file and have declared effective a Shelf Registration
Statement within five (5) Business Days, then, commencing on the day following the
Registration Default, Additional Interest shall accrue on the principal amount of the
outstanding Notes that are Registrable Securities at a rate of 0.25% per annum for the first
90-day period following the Registration Default, and thereafter at a rate of 0.50% per
annum;

     (ii) at any time after the six-month anniversary of the last date of original issuance
of the Notes the conditions set forth in paragraph (c)(1) of Rule 144 are not satisfied with
respect to the Securities and the Shelf Registration Statement has not been filed with and
declared effective by the Commission at or prior to the later of (x) the six month
anniversary of the last date of original issuance of the Notes and (y) the time

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that such conditions cease to be satisfied (other than pursuant to Section 3(b)
hereof), and the Company does not file and have declared effective a Shelf Registration
Statement within five (5) Business Days, then, commencing on such later date, Additional
Interest shall accrue on the principal amount of the outstanding Notes that are Registrable
Securities at a rate of 0.25% per annum for the first 90-day period following the
Registration Default, and thereafter at a rate of 0.50% per annum;

     (iii) if the Shelf Registration Statement has become or been declared effective but
such Shelf Registration Statement ceases to be effective or the prospectus contained therein
ceases to be usable in connection with the resales of Registrable Securities at any time
during the Effective Period (other than pursuant to Section 3(b) hereof), and the Company
does not cure the Registration Default within five (5) Business Days by a post-effective
amendment or a report filed pursuant to the Exchange Act, then, commencing on the day such
Shelf Registration Statement ceases to be effective, Additional Interest shall accrue on the
principal amount of the outstanding Notes that are Registrable Securities at a rate of 0.25%
per annum for the first 90-day period following such date on which the Shelf Registration
Statement ceases to be effective, and thereafter at a rate of 0.50% per annum;

     (iv) if the aggregate duration of Deferral Periods in any period exceeds the number of
days permitted in respect of such period pursuant to Section 3(b) hereof, then, commencing
on the day the aggregate duration of Deferral Periods in any period exceeds the number of
days permitted in respect of such period, Additional Interest shall accrue on the principal
amount of the outstanding Notes that are Registrable Securities at a rate of 0.25% per annum
for the first 90-day period following the Registration Default, and thereafter at a rate of
0.50% per annum;

     (v) by the one year anniversary of the last date of issuance of the Notes, the Company
has failed to (x) exchange the beneficial interests in the Restricted Global Note (as
defined in the Indenture) for beneficial interests in the Unrestricted Global Note (as
defined in the Indenture) in accordance with Section 2.06(c) or Section 2.12 of the
Indenture or otherwise or (y) exchange the certificates representing the Shares that contain
the legends described in Section 2.06(d) of the Indenture for certificates representing the
Shares that do not contain such legends in accordance with Section 2.06(c) of the Indenture,
Additional Interest shall accrue on the principal amount of the outstanding Notes at a rate
of 0.25% per annum for the first 90-day period following the Registration Default, and
thereafter at a rate of 0.50% per annum;

provided, however, that the Additional Interest rate on the Notes shall not exceed in the
aggregate 0.50% per annum and shall not be payable under more than one clause above for any
given period of time, except that if Additional Interest would be payable under more than
one clause above, but at a rate of 0.25% per annum under one clause and at a rate of 0.5%
per annum under the other, then the Additional Interest rate shall be the higher rate of
0.5% per annum; provided further, however, that Additional Interest on the Notes that are
Registrable Securities as a result of clauses (i) through (iv) above, shall cease to accrue
upon the earlier of (x) the one-year anniversary of the last date of original

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issuance of the Notes and (y)(1) the filing and effectiveness of the Shelf Registration
Statement (in the case of clauses (i) and (ii) above), (2) the effectiveness of the Shelf
Registration Statement which had ceased to remain effective (in the case of clause (iii)
above), (3) the termination of the Deferral Period that caused the limit on the aggregate
duration of Deferral Periods in a period set forth in Section 3(b) to be exceeded (in the
case of clause (iv) above), (4) the date the Notes cease to be Registrable Securities or (5)
the date the Notes cease to be outstanding (as determined in accordance with the terms of
the Indenture). Additional Interest on the Notes as a result of clause (v) above shall cease
to accrue upon the earlier of (1) the exchange of the beneficial interests in the Restricted
Global Note (as defined in the Indenture) for beneficial interests in the Unrestricted
Global Note (as defined in the Indenture) in accordance with Section 2.06(c) and Section
2.12 of the Indenture or otherwise and (y) the exchange of the certificates representing the
Shares that contain the legends described in Section 2.06(d) of the Indenture for
certificates representing the Shares that do not contain such legends in accordance with
Section 2.06(c) of the Indenture and (2) the date the Notes cease to be outstanding (as
determined in accordance with the terms of the Indenture).

     Additional Interest on the Notes, if any, will be payable in arrears in cash on
December 15 and June 15 of each year (the “Additional Interest Payment Date”) to holders of
record of outstanding Notes that are Registrable Securities at the close of business on
December 1 or June 1 (whether or not a Business Day), as the case may be, immediately
preceding the relevant Additional Interest Payment Date; provided that (x) any accrued and
unpaid Additional Interest with respect to any Notes or portion thereof submitted for
conversion shall be paid in the manner and to the extent provided for the payment of
interest in Section 15.02(h) of the Indenture and (y) that any accrued and unpaid Additional
Interest with respect to any Notes or portion thereof submitted for repurchase on a
Fundamental Change Repurchase Date (as defined in the Indenture), and not withdrawn in
compliance with Section 16.02 of the Indenture, shall be paid in the manner provided for the
payment of interest in Section 16.01(a) of the Indenture. Following the cure of all
Registration Defaults requiring the payment of Additional Interest to the Holders of Notes
that are Registrable Securities pursuant to this Section 2(d), the accrual of Additional
Interest will cease (without in any way limiting the effect of any subsequent Registration
Default requiring the payment of Additional Interest). Additional Interest on the Notes, if
any, will accrue beginning on the date provided for in clauses 2(d)(i) through (v) above, as
applicable, to, but excluding, the date on which all Registration Defaults have been cured.
If a Holder converts some or all of the Notes into Shares, such Holder will not be entitled
to receive Additional Interest on such Shares.

     The Company shall notify the Trustee as promptly as reasonably practicable upon the
happening of each and every Registration Default. The Trustee shall be entitled, on behalf
of Holders, to seek any available remedy for the enforcement of this Agreement, including
for the payment of any Additional Interest if any becomes due. Notwithstanding the
foregoing, the parties agree that the sole monetary damages payable for a violation of the
terms of this Agreement with respect to which additional monetary amounts are expressly
provided shall be as set forth in this Section 2(d). Nothing shall

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preclude a Notice Holder or Holder from pursuing or obtaining specific performance or other
equitable relief with respect to this Agreement.

     3. Registration Procedures.

     The following provisions shall apply to the Shelf Registration Statement filed pursuant to
Section 2:

     (a) The Company shall:

     (i) notify the Holders of Registrable Securities at least 10 (ten) Business Days before
filing any Shelf Registration Statement pursuant to Section 2 of the Company’s intent to
file such Shelf Registration Statement and seeking a determination from such Holder as to
whether such Holder elects to have its Registrable Securities included in such Shelf
Registration Statement;

     (ii) before filing any Shelf Registration Statement or Prospectus or any amendments or
supplements thereto with the Commission, furnish to each Initial Purchaser copies of all
such documents proposed to be filed and use its commercially reasonable efforts to reflect
in each such document when so filed with the Commission such comments as such Initial
Purchasers reasonably shall propose within three (3) Business Days of the delivery of such
copies to the Initial Purchasers; provided, however, that the Company shall be permitted to
file prospectus supplements or post-effective amendments to reflect additional selling
securityholders without prior review of the Initial Purchasers;

     (iii) use its commercially reasonable efforts to prepare and file with the Commission
such amendments and post-effective amendments to the Shelf Registration Statement and file
with the Commission any other required document as may be necessary to keep such Shelf
Registration Statement continuously effective until the expiration of the Effective Period;
cause the related Prospectus to be supplemented by any required prospectus supplement, and
as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in
force) under the Securities Act; and comply with the provisions of the Securities Act
applicable to it with respect to the disposition of all Securities covered by such Shelf
Registration Statement during the Effective Period in accordance with the intended methods
of disposition by the sellers thereof set forth in such Shelf Registration Statement as so
amended or such Prospectus as so supplemented;

     (iv) as promptly as reasonably practicable, notify the Notice Holders (A) when such
Shelf Registration Statement or the Prospectus included therein or any amendment or
supplement to the Prospectus or post-effective amendment has been filed with the Commission,
and, with respect to such Shelf Registration Statement or any post-effective amendment that
is not an Automatic Shelf Registration Statement, when the same is declared or has become
effective, provided, that the availability of such Shelf Registration Statement or any
Prospectus or post-effective amendment on the Commission’s EDGAR database shall be
considered notice for the purpose of this

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Section 3(a)(iv), (B) of any request (but not the nature or details regarding such
request), following the effectiveness of the Shelf Registration Statement, by the Commission
or any other federal or state governmental authority for amendments or supplements to the
Shelf Registration Statement or related Prospectus (other than any such request relating to
a review of the Company’s Exchange Act filings), (C) of the issuance by the Commission of
any stop order suspending the effectiveness of such Shelf Registration Statement or the
initiation or written threat of any proceedings for that purpose, (D) of the receipt by the
Company of any notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation or written threat of
any proceeding for such purpose, (E) of the occurrence of any event or the existence of any
fact (but not the nature of or details concerning such event or fact) (a “Material Event”)
as a result of which any Shelf Registration Statement shall contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, or any Prospectus shall contain any
untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that no notice by the Company shall
be required pursuant to this clause (E) in the event that the Company either promptly files
a prospectus supplement, amendment to the Shelf Registration Statement to update the
Prospectus or a Form 8-K or other appropriate Exchange Act report that is incorporated by
reference into the Shelf Registration Statement, which, in either case, contains the
requisite information with respect to such Material Event that results in such Shelf
Registration Statement or Prospectus, as the case may be, no longer containing any untrue
statement of material fact or omitting to state a material fact required to be stated
therein or necessary to make the statements contained therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not misleading, (F) of
the determination by the Company that a post-effective amendment to the Shelf Registration
Statement (other than for the purpose of naming a Notice Holder as a selling securityholder
therein) will be filed with the Commission, which notice may, at the discretion of the
Company (or as required pursuant to Section 3(b)), state that it constitutes a Deferral
Notice, in which event the provisions of Section 3(b) shall apply or (G) at any time when a
Prospectus is required (or but for the exemption contained in Rule 172 would be required) to
be delivered under the Securities Act, that the Shelf Registration Statement, Prospectus,
Prospectus amendment or supplement or post-effective amendment does not conform in all
material respects to the applicable requirements of the Securities Act and the rules and
regulations of the Commission thereunder;

     (v) prior to any public offering of the Registrable Securities pursuant to the Shelf
Registration Statement, use its commercially reasonable efforts to register or qualify, or
cooperate with the Notice Holders included therein and their respective counsel in
connection with the registration or qualification of Securities for offer and sale under the
securities or blue sky laws of such jurisdictions within the United States as any such
Notice Holders reasonably request in writing and do any and all other acts or things
reasonably necessary or advisable to enable the offer and sale in such jurisdictions of the
Securities covered by the Shelf Registration Statement; prior to any public offering of the

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Registrable Securities pursuant to the Shelf Registration Statement, use its
commercially reasonable efforts to keep each such registration or qualification (or
exemption therefrom) effective during the Effective Period in connection with such Notice
Holder’s offer and sale of Registrable Securities pursuant to such registration or
qualification (or exemption therefrom) and use its commercially reasonable efforts to
provide for the disposition in such jurisdictions of such Registrable Securities in the
manner set forth in the Shelf Registration Statement and the related Prospectus; provided
that for purposes of this Section 3(a)(v), the Company will not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified or to take
any action which would subject it to general service of process or to taxation in any such
jurisdiction where it is not then so subject;

     (vi) use its commercially reasonable efforts to lift any suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction in which
they have been qualified for sale, in each case at the earliest practicable date;

     (vii) upon reasonable written notice, and only in connection with a disposition of
Securities under the Shelf Registration Statement, for a reasonable period prior to the
filing of the Shelf Registration Statement, and throughout the Effective Period (but not
during a Deferral Period), (i) make reasonably available for inspection by a representative
of, and Special Counsel acting for, the Majority Holders and any underwriter (and its
counsel) participating in any disposition of Securities pursuant to such Shelf Registration
Statement (collectively, the “Shelf Inspectors”), all relevant and material financial and
other records and pertinent corporate documents of the Company and its subsidiaries and (ii)
use commercially reasonable efforts to have its officers, employees, accountants and counsel
make available all relevant material information reasonably requested by such
representative, Special Counsel or any such underwriter in connection with such Shelf
Registration Statement, in each case as is reasonable and customary for similar “due
diligence” examinations of issuers of similar size and business of the Company; provided,
however, that such persons shall first agree with the Company that any information that is
reasonably designated by the Company as confidential at the time of delivery shall be kept
confidential by such persons and shall be used solely for the purposes of exercising rights
under this Agreement and satisfying “due diligence” obligations under the Securities Act and
such person shall not engage in trading any securities of the Company until such material
non-public information becomes properly publicly available, unless (w) disclosure of such
information is required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (x) disclosure of such information is required by law,
including any disclosure requirements pursuant to federal securities laws in connection with
the filing of any Shelf Registration Statement or the use of any Prospectus or prospectus
supplement referred to in this Agreement upon a customary opinion of counsel for such
persons delivered and reasonably satisfactory to the Company, (y) such information becomes
generally available to the public other than as a result of a disclosure or failure to
safeguard by any such person, or (z) such information becomes available to any such person
from a source (other than the Company, its Affiliates, officers, employees, accountants,
agents and counsel) and such source is not bound by a confidentiality agreement; provided,
further,

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that with respect to any Special Counsel engaged by the Majority Holders, the foregoing
inspection and information gathering shall be coordinated by one counsel designated by the
Majority Holders;

     (viii) if requested by the Majority Holders, their Special Counsel or the managing
underwriters (if any) in connection with an underwritten offering of the Registrable
Securities pursuant to the Shelf Registration Statement, use its commercially reasonable
efforts to cause (i) its counsel to deliver an opinion relating to the Shelf Registration
Statement and the Securities in a customary form, (ii) its officers to execute and deliver
all customary documents and certificates reasonably requested by the Majority Holders, their
Special Counsel or the managing underwriters (if any) and (iii) its registered independent
public accounting firm to provide a comfort letter or letters relating to the Shelf
Registration Statement in a reasonable and customary form, subject to receipt of appropriate
documentation as contemplated, and only if permitted, by Statement of Auditing Standards No.
72 or any successor statement thereto, covering matters of the type customarily covered in
comfort letters in connection with secondary underwritten offerings; provided, that in no
event shall the Company be required to furnish such opinions, documents or comfort letters
pursuant to the provisions of this Section in more than three underwritten offerings.

     (ix) if reasonably requested in writing by any Initial Purchaser or any Notice Holder
as a result of the “due diligence” examination referred to in Section 3(a)(vii) above,
promptly incorporate in a prospectus supplement or post-effective amendment to the Shelf
Registration Statement such information as such Initial Purchaser or such Notice Holder
shall, on the basis of a written opinion of Special Counsel, determine to be required to be
included therein by applicable law and make any required filings of such prospectus
supplement or such post-effective amendment; provided, that the Company shall not be
required to take any actions under this Section 3(a)(ix) that are not, in the reasonable
opinion of counsel for the Company, in compliance with applicable law; provided, further,
that the Company shall have no liability for Additional Interest under this Agreement if it
reasonably objects to making such additional filing and if such additional filing would
otherwise cause the Company to pay Additional Interest.

     (x) as promptly as practicable furnish to each Notice Holder and the Initial
Purchasers, upon their request and without charge, at least one (1) conformed copy of the
Shelf Registration Statement and any amendments thereto, including financial statements but
excluding schedules, all documents incorporated or deemed to be incorporated therein by
reference and all exhibits; provided, however, that the Company shall have no obligation to
deliver to Notice Holders or the Initial Purchasers a copy of any amendment publicly
available on the Company’s website or in the Commission’s EDGAR database;

     (xi) during the Effective Period, deliver to each Notice Holder in connection with any
sale of Registrable Securities pursuant to the Shelf Registration Statement, upon their
request and without charge, as many copies of the Prospectus relating to such Registrable
Securities (including each preliminary prospectus) and any amendment or supplement thereto
as such Notice Holder may reasonably request; and the

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Company hereby consents (except during such periods that a Deferral Notice is
outstanding and has not been revoked) to the use of such Prospectus or each amendment or
supplement thereto by each Notice Holder in connection with any offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or supplement thereto in
the manner set forth therein and subject to applicable law; and

     (xii) during the Effective Period, cooperate with the Notice Holders to facilitate the
timely preparation and delivery of certificates representing Securities to be sold pursuant
to the Shelf Registration Statement free of any restrictive legends, unless required by
applicable law, and in such denominations as permitted by the Indenture and registered in
such names as the Holders thereof may request in writing at least two (2) Business Days
prior to sales of Securities pursuant to such Shelf Registration Statement; provided, that
nothing herein shall require the Company to deliver certificated Securities to any
beneficial holder of Securities, except as required by the Indenture; provided further
however, such Notice Holders shall pay any such tax that is due because such Notice Holder
requests any shares of Common Stock to be issued in a name other than the holder’s name as
provided for in Sections 2.06(a) and 15.02(e) of the Indenture.

     (b) Upon (A) the issuance by the Commission of a stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of proceedings with
respect to the Shelf Registration Statement under Section 8(d) or 8(e) of the Securities
Act, (B) the occurrence of any event or the existence of any Material Event as a result of
which the Shelf Registration Statement shall contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to make the
statements therein not misleading, or any Prospectus shall contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which they were
made, not misleading, or (C) the occurrence or existence of any corporate development or
business reason that, in the sole discretion of the Company, makes it appropriate to suspend
the availability of the Shelf Registration Statement and the related Prospectus, including,
without limitation, the acquisition of assets, pending corporate developments, public
filings with Commission and similar events, the Company will (i) in the case of clause (B)
above, subject to the second sentence of this provision, use its commercially reasonable
efforts to prepare and file an amendment to such Shelf Registration Statement or a
supplement to the related Prospectus or any document incorporated therein by reference or
file any other required document that would be incorporated by reference into such Shelf
Registration Statement and Prospectus so that (1) such Shelf Registration Statement does not
contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading, and (2)
such Prospectus does not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, as thereafter
delivered or made available to the purchasers of the Registrable Securities being sold
thereunder, and, in the case of a post-effective amendment to the Shelf Registration
Statement, subject to the second sentence of this provision, use its commercially reasonable
efforts to cause it to be

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declared effective or otherwise become effective and (ii) give notice to the Notice
Holders that the availability of the Shelf Registration Statement is suspended (a “Deferral
Notice”). The Company will use its commercially reasonable efforts to ensure that the use
of the Prospectus may be resumed (x) in the case of clause (A) above, as promptly as
reasonably practicable, (y) in the case of clause (B) above, as soon as, in the sole
judgment of the Company, public disclosure of such Material Event would not be prejudicial
to or contrary to the interests of the Company or, if necessary to avoid unreasonable burden
or expense, as soon as practicable thereafter and (z) in the case of clause (C) above, as
soon as, in the sole discretion of the Company, such suspension is no longer appropriate;
provided that the period during which the availability of the Shelf Registration Statement
and any Prospectus is suspended (the “Deferral Period”), without the Company incurring any
obligation to pay Additional Interest pursuant to Section 2(d), shall not exceed forty-five
(45) days in the aggregate in any ninety (90) day period or an aggregate of ninety (90) days
in any 12-month period.

     (c) Each Holder agrees that upon receipt of any Deferral Notice from the Company, such
Holder shall forthwith discontinue (and cause any placement or sales agent or underwriters
acting on their behalf to discontinue) the disposition of Registrable Securities pursuant to
the Shelf Registration Statement until such Holder (i) shall have received copies of such
amended or supplemented Prospectus and, if so directed by the Company, such Holder shall
deliver to the Company (at the Company’s expense) all copies, other than permanent file
copies, then in such Holder’s possession of the Prospectus covering such Registrable
Securities at the time of receipt of such notice or (ii) shall have received notice from the
Company that the disposition of Registrable Securities pursuant to the Shelf Registration
may continue. Each Holder shall keep confidential any communication received by it from the
Company regarding the suspension of the use of the Prospectus, except as required by
applicable law.

     (d) The Company may require each Holder as to which any registration pursuant to
Section 2(a) is being effected to furnish to the Company such information regarding such
Holder and such Holder’s intended method of distribution of such Registrable Securities as
the Company may from time to time reasonably request in writing, but only to the extent such
information is required to comply with the Securities Act.

     (e) The Company shall provide a CUSIP number for all Registrable Securities covered by
the Shelf Registration Statement not later than the effective date of such Shelf
Registration Statement and provide the Trustee and the transfer agent for the Shares with
printed certificates for the Registrable Securities that are in a form eligible for deposit
with The Depository Trust Company.

     (f) The Company shall use commercially reasonable efforts to provide such information
as is required for any filings required to be made with FINRA.

     (g) Until the expiration of the Effective Period, the Company will not resell, and will
use its commercially reasonable efforts to prevent its “affiliates” (as defined in

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Rule 144) from reselling, any of the Securities that have been reacquired by any of
them except pursuant to an effective registration statement under the Securities Act.

     (h) The Company shall cause the Indenture to be qualified under the Trust Indenture Act
in a the manner prescribed by the Trust Indenture Act and shall enter into any necessary
supplemental indentures in connection therewith.

     (i) The Company shall enter into such customary agreements and take such other
reasonable and lawful actions in connection therewith (including those reasonably requested
by the Majority Holders) in order to expedite or facilitate disposition of such Registrable
Securities.

     4. Holders’ Obligations.

     (a) In addition to the other limitations and requirements described herein, each Holder
agrees, by acquisition of the Registrable Securities, that no Holder shall be entitled to
sell any of such Registrable Securities pursuant to the Shelf Registration Statement or to
receive a Prospectus relating thereto, unless such Holder has furnished the Company with a
completed Notice and Questionnaire as required pursuant to Section 2(c) hereof (including
the information required to be included in such Notice and Questionnaire) and the
information set forth in the next sentence. Each Notice Holder agrees to notify the Company
as promptly as practicable of any inaccuracy or change in information previously furnished
by such Notice Holder to the Company or of the occurrence of any event in either case as a
result of which any Prospectus relating to such registration contains or would contain an
untrue statement of a material fact regarding such Notice Holder or such Notice Holder’s
intended method of disposition of such Registrable Securities or omits to state any material
fact regarding such Notice Holder or such Notice Holder’s intended method of disposition of
such Registrable Securities necessary to make the statements therein, in light of
circumstances in which they were made, not misleading, and promptly to furnish to the
Company (i) any additional information required to correct and update any previously
furnished information or required so that such Prospectus shall not contain, with respect to
such Notice Holder or the disposition of such Registrable Securities, an untrue statement of
a material fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading and (ii) any other
information regarding such Notice Holder and the distribution of such Registrable Securities
as may be required to be disclosed in the Shelf Registration Statement under applicable law
or pursuant to Commission comments. Each Holder further agrees not to sell any Registrable
Securities pursuant to the Shelf Registration Statement without delivering, causing to be
delivered, or, if permitted by applicable law, making available, a Prospectus to the
purchaser thereof and, following termination of the Effective Period, to notify the Company,
within ten (10) Business Days of a request by the Company, of the amount of Registrable
Securities sold pursuant to the Shelf Registration Statement and, in the absence of a
response, the Company may assume that all of the Holder’s Registrable Securities were so
sold in compliance with applicable law and this Agreement unless and until the Company is
notified otherwise.

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     (b) Any sale of any Registrable Securities by any Holder shall constitute a
representation and warranty by such Holder that the information relating to such Holder and
its plan of distribution is as set forth in the Prospectus delivered by such Holder in
connection with such disposition, that such Prospectus does not as of the time of such sale
contain any untrue statement of a material fact relating to or provided by such Holder or
its plan of distribution and that such Prospectus does not as of the time of such sale omit
to state any material fact relating to or provided by such Holder or its plan of
distribution necessary to make the statements in such Prospectus, in the light of the
circumstances under which they were made, not misleading. Each Holder further agrees that
such Holder will not make any offer relating to the Registrable Securities that would
constitute an “issuer free writing prospectus” (as defined in Rule 433) or that would
otherwise constitute a “free writing prospectus” (as defined in Rule 405) required to be
filed by the Company with the Commission or retained by the Company under Rule 433 of the
Securities Act, unless it has obtained the prior written consent of the Company.

     (c) The Holders shall not offer Registrable Securities under the Shelf Registration
Statement in an underwritten offering without the Company’s prior written consent. Any
underwritten offering agreed to by the Company shall be on terms and conditions agreed to by
the Company in connection with such offering. The Company shall not be required to
undertake more than three underwritten offerings pursuant to this Agreement.

     5. Registration Expenses.

     The Company agrees to bear and to pay or cause to be paid promptly after request being made
therefor all fees and expenses incident to the Company’s performance of or compliance with this
Agreement, including, but not limited to, (a) all Commission and any FINRA registration and filing
fees and expenses, (b) all fees and expenses in connection with the qualification of the Securities
for offering and sale under the state securities and blue sky laws referred to in Section 3(a)(v)
hereof, including reasonable fees and disbursements of one counsel for the placement agent or
underwriters, if any, in connection with such qualifications, (c) all expenses relating to the
preparation, printing, distribution and reproduction of the Shelf Registration Statement, the
related Prospectus, each amendment or supplement to each of the foregoing, the certificates
representing the Securities and all other documents relating hereto, (d) fees and expenses of the
Trustee under the Indenture, any escrow agent or custodian, and of the registrar and transfer agent
for the Shares, (e) in connection with an underwritten offering, fees, disbursements and expenses
of counsel and the registered independent public accounting firm of the Company (including the
expenses of any opinions or “cold comfort” letters required by or incident to such performance and
compliance) and (f) reasonable fees, disbursements and expenses of one counsel for all Holders
retained in connection with the Shelf Registration Statement, as selected by the Company (unless
reasonably objected to by the Majority Holders, in which case the Majority Holders shall select
such counsel for the Holders) (“Special Counsel”), and fees, expenses and disbursements of any
other Persons, including special experts, retained by the Company in connection with such
registration (collectively, the “Registration Expenses”). To the extent that any reasonable and
proper Registration Expenses are incurred, assumed or paid by any Holder or any underwriter or
placement agent therefor, the Company shall reimburse such Person for the full amount of the
Registration Expenses so incurred,

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assumed or paid promptly after receipt of a documented request therefor. Notwithstanding the
foregoing, the Holders of the Registrable Securities being registered shall pay all underwriting
discounts and commissions and placement agent fees and commissions attributable to the sale of such
Registrable Securities and the fees and disbursements of any counsel or other advisors or experts
retained by such Holders (severally or jointly), other than the Special Counsel and experts
specifically referred to above.

     6. Indemnification.

     (a) The Company shall indemnify and hold harmless each Notice Holder (including,
without limitation, each Initial Purchaser), its Affiliates, their respective officers,
directors, employees, representatives and agents, and each Person, if any, who controls such
Notice Holder within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 6 and Section 7 as an “Indemnified Holder”) from
and against any loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, without limitation, any loss, claim, damage, liability or action
relating to purchases and sales of Registrable Securities), to which that Indemnified Holder
may become subject, whether commenced or threatened, under the Securities Act, the Exchange
Act, any other federal or state statutory law or regulation, at common law or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact contained in any
such Shelf Registration Statement or any Prospectus forming part thereof, or (ii) the
omission or alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein (in the case of any Prospectus, in the
light of the circumstances under which they were made) not misleading, and shall reimburse
each Indemnified Holder promptly upon demand for any legal or other expenses reasonably
incurred by that Indemnified Holder in connection with investigating or defending or
preparing to defend against or appearing as a third party witness in connection with any
such loss, claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon, an untrue
statement or alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with any information provided by such
Indemnified Holder in writing to the Company expressly for use therein including its Notice
and Questionnaire. This indemnity agreement shall be in addition to any liability that the
Company may otherwise have.

     (b) Each Notice Holder (including, without limitation, each Initial Purchaser) shall
indemnify and hold harmless the Company, its Affiliates, their respective officers,
directors, employees, representatives and agents, and each Person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act (collectively referred
to for purposes of this Section 6(b) and Section 7 as the Company), from and against any
loss, claim, damage or liability, joint or several, or any action in respect thereof, to
which the Company may become subject, whether commenced or threatened, under the Securities
Act, the Exchange Act, any other federal or state statutory law or regulation, at common law
or otherwise, insofar as such loss, claim, damage, liability or

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action arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any such Shelf Registration Statement or any
Prospectus forming part thereof, or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the statements
therein (in the case of any Prospectus, in the light of the circumstances under which they
were made) not misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance upon and in
conformity with any information furnished to the Company in writing by such Notice Holder
expressly for use therein including its Notice and Questionnaire, and shall reimburse the
Company for any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending or preparing to defend against or appearing as a third party
witness in connection with any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that no such Notice Holder shall be liable for any
indemnity claims hereunder in excess of the amount of net proceeds received by such Notice
Holder from the sale of Registrable Securities pursuant to such Shelf Registration
Statement. This indemnity agreement will be in addition to any liability which any such
Notice Holder may otherwise have.

     (c) Promptly after receipt by an indemnified party under this Section 6 of notice of
any claim or the commencement of any action, the indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party pursuant to Section 6(a) or
6(b), notify the indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying party shall not
relieve it from any liability that it may have under this Section 6 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive rights or
defenses) by such failure; and provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability that it may have to an
indemnified party otherwise than under this Section 6. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party thereof,
the indemnifying party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the defense of such
claim or action, the indemnifying party shall not be liable to the indemnified party under
this Section 6 for any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than the reasonable costs of
investigation; provided, however, that an indemnified party shall have the right to employ
its own counsel in any such action, but the fees, expenses and other charges of such counsel
for the indemnified party will be at the expense of such indemnified party unless (1) the
employment of counsel by the indemnified party has been authorized in writing by the
indemnifying party, (2) the indemnified party has reasonably concluded (based upon advice of
counsel to the indemnified party) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to the
indemnifying party, (3) a conflict or potential conflict exists (based upon advice of
counsel to the indemnified party) between the indemnified party and the indemnifying party
(in which case the indemnifying party will

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not have the right to direct the defense of such action on behalf of the indemnified
party) or (4) the indemnifying party has not in fact employed counsel reasonably
satisfactory to the indemnified party to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at the expense
of the indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees, disbursements and other charges of more
than one separate firm of attorneys (in addition to any local counsel) at any one time for
all such indemnified party or parties. Each indemnified party, as a condition of the
indemnity agreements contained in Sections 6(a) and 6(b), shall use its reasonable efforts
to cooperate with the indemnifying party in the defense of any such action or claim. No
indemnifying party shall be liable for any settlement of any such action effected without
its written consent (which consent shall not be unreasonably withheld), but if settled with
its written consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified party from and
against any loss or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses or counsel as contemplated by
this section, the indemnifying party agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i) such settlement is entered into
more than 45 days after receipt by such indemnifying party of a request in writing setting
forth proposed settlement terms from the indemnified party and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with the aforesaid request
prior to the date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party (which consent shall not be unreasonably withheld),
effect any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement (i) includes an unconditional
release of such indemnified party from all liability on claims that are the subject matter
of such proceeding and (ii) does not include a statement or admission of fault, culpability
or a failure to act, by or on behalf of the indemnified party.

     (d) The provisions of this Section 6 and Section 7 shall remain in full force and
effect, regardless of any investigation made by or on behalf of any Notice Holder, the
Company, or any of the indemnified Persons referred to in this Section 6 and Section 7, and
shall survive the sale by a Notice Holder of Registrable Securities covered by the Shelf
Registration Statement.

     7. Contribution.

     If the indemnification provided for in Section 6 is unavailable or insufficient to hold
harmless an indemnified party under Section 6(a) or 6(b), then each indemnifying party shall, in
lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or action in respect
thereof,

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(i) in such proportion as shall be appropriate to reflect the relative benefits received by the
Company from the offering and sale of the Notes, on the one hand, and a Holder with respect to the
sale by such Holder of Registrable Securities, on the other, or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also the relative fault
of the Company on the one hand and such Holder on the other with respect to the statements or
omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as
well as any other relevant equitable considerations. The relative benefits received by the Company
on the one hand and a Holder on the other with respect to such offering and such sale shall be
deemed to be in the same proportion as the total net proceeds from the offering of the Notes
(before deducting expenses) received by or on behalf of the Company, on the one hand, and the total
net proceeds (before deducting expenses) received by such Holder upon a resale of the Registrable
Securities, on the other, bear to the total gross proceeds from the sale of all Registrable
Securities pursuant to the Shelf Registration Statement in the offering of the Registrable
Securities from which the contribution claim arises. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to the Company or information
supplied by the Company on the one hand or to any information contained in the relevant Notice and
Questionnaire supplied by such Holder on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such untrue statement or
omission. The Notice Holders’ respective obligations to contribute pursuant to this Section 7 are
several in proportion to the respective number of Registrable Securities they have sold pursuant to
the Shelf Registration Statement and not joint. The parties hereto agree that it would not be just
and equitable if contributions pursuant to this Section 7 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified party as a result
of the loss, claim, damage or liability, or action in respect thereof, referred to above in this
Section 7 shall be deemed to include, for purposes of this Section 7, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating or defending or
preparing to defend any such action or claim. Notwithstanding the provisions of this Section 7, an
indemnifying party that is a Holder shall not be required to contribute any amount in excess of the
amount by which the total price at which the Registrable Securities sold by such indemnifying party
to any purchaser exceeds the amount of any damages which such indemnifying party has otherwise paid
or become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.

     8. Information Requirements.

     The Company covenants that, if at any time before the end of the Effective Period the Company
is not subject to the reporting requirements of the Exchange Act, it will cooperate with any Holder
and take such further customary action as any Holder may reasonably request in writing (including,
without limitation, making such representations as any such Holder may reasonably request), all to
the extent required from time to time to enable such Holder to sell

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Registrable Securities without registration under the Securities Act within the limitation of
the exemptions provided by Rule 144 and Rule 144A under the Securities Act and customarily taken in
connection with sales pursuant to such exemptions. Upon the written request of any Holder, the
Company shall deliver to such Holder a written statement as to whether it has complied with such
filing requirements, unless such a statement has been included in the Company’s most recent report
filed pursuant to Section 13 or Section 15(d) of Exchange Act. Notwithstanding the foregoing,
nothing in this Section 8 shall be deemed to require the Company to register any of its securities
under any section of the Exchange Act.

     9. Miscellaneous.

          (a) Amendments and Waivers. The provisions of this Agreement may not be amended,
modified or supplemented, and waivers or consents to departures from the provisions hereof may not
be given, unless the Company has obtained the written consent of the Majority Holders.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders whose Registrable Securities
are being sold pursuant to the Shelf Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of a majority in aggregate
amount of the Registrable Securities being sold by such Holders pursuant to the Shelf Registration
Statement; provided that such aggregate amount, with respect to such Registrable Securities that
are Notes will be based on the aggregate principal amount of such Notes that are Registrable
Securities, and with respect to such Registrable Securities that are Shares, will be based on the
average of the Last Reported Sale Prices of the Company’s Common Stock for each of five consecutive
trading days ending on a date chosen by the Company in a reasonable manner to effect the intent of
this Agreement multiplied by the number of such Registrable Securities that are Shares.
Notwithstanding the foregoing sentence, (i) this Agreement may be amended by written agreement
signed by the Company and the Initial Purchasers, without the consent of the Holders, to cure any
ambiguity or to correct or supplement any provision contained herein that may be defective or
inconsistent with any other provision contained herein, or to make such other provisions in regard
to matters or questions arising under this Agreement that shall not adversely affect the interests
of the Holders. Each Holder at the time of any such amendment, modification, supplement, waiver or
consent or thereafter shall be bound by any such amendment, modification, supplement, waiver or
consent effected pursuant to this Section 9(a), whether or not any notice, writing or marking
indicating such amendment, modification, supplement, waiver or consent appears on the Registrable
Securities or is delivered to such Holder.

          (b) Notices. All notices and other communications provided for or permitted hereunder
shall be made in writing by hand-delivery, first-class mail, telecopier or air courier guaranteeing
next-day delivery:

     (1) If to the Company, initially at the address set forth in the Indenture;

     (2) If to the Initial Purchasers, initially at c/o J.P. Morgan Securities Inc.,
277 Park Avenue, New York, New York 10172 (fax: (212) 622-8358);

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Attention: Equity Syndicate Desk and Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, 4 World Financial Center, New York, New York
10080 (fax: (212) 449-2785); Attention: Equity Capital Markets; and

     (3) If to a Holder, to the address of such Holder set forth in the register
(described in Section 2.06 of the Indenture), the Notice and Questionnaire or other
records of the Company.

          All such notices and communications shall be deemed to have been duly given: when delivered by
hand, if personally delivered; one (1) Business Day after being delivered to a next-day air
courier; five (5) Business Days after being deposited in the mail, if being delivered by
first-class mail; and when receipt is acknowledged by the recipient’s telecopier machine, if sent
by telecopier.

          Notwithstanding the foregoing, the notice required pursuant to Section 3(a)(i) shall be given
in the same manner that notices are required to be delivered to holders of Notes pursuant to the
Indenture.

          (c) Successors and Assigns. This Agreement shall be binding upon the Company and each
of its successors and assigns. Any Person who purchases any Securities from any Initial Purchaser
shall be deemed, for purposes of this Agreement, to be an assignee of such Initial Purchaser. This
Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of
the parties and shall inure to the benefit of and be binding upon each Holder, provided that
nothing herein shall be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Indenture. If any transferee of any Holder
shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking
and holding such Registrable Securities, such Person shall be conclusively deemed to have agreed to
be bound by and to perform all of the terms and provisions of this Agreement and such Person shall
be entitled to receive the benefits hereof.

          (d) Counterparts. This Agreement may be executed in any number of counterparts (which
may be delivered in original form or by telecopier) and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.

          (e) Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.

          (f) Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE
LAWS OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK
(WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF)..

          (g) Remedies. In the event of a breach by the Company or by any Holder of any of
their respective obligations under this Agreement, each Holder or the Company, as the case may be,
in addition to being entitled to exercise all rights granted by law, including recovery

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of damages (other than the recovery of damages for a breach by the Company of its obligations
under Section 3 hereof for which Additional Interest has been paid pursuant to Section 2 hereof),
will be entitled to specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of any of the provisions of this Agreement and hereby further agree that,
in the event of any action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.

          (h) No Inconsistent Agreements. The Company represents, warrants and agrees that (i)
it has not entered into and shall not on or after the date of this Agreement enter into any
agreement that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof, (ii) it has not previously entered into any
agreement which remains in effect and does not currently contemplate entering into any agreement
granting any registration rights with respect to any of its debt securities to any Person other
than (a) this Agreement and (b) the Third Amended and Restated Investor Rights Agreement, dated
February 3, 2006, among the Company and the other parties thereto, as has been or may be amended or
supplement from time to time and (iii) without limiting the generality of the foregoing, without
the written consent of the Majority Holders, it shall not grant to any Person the right to request
the Company to register any securities of the Company under the Securities Act unless the rights so
granted are not in conflict or inconsistent with the provisions of this Agreement.

          (i) Piggyback on Registrations. The Company may grant registration rights that would
permit any person that is a third party the right to piggyback on any Shelf Registration Statement,
provided that if the managing underwriter, if any, of any underwritten offering conducted pursuant
to Section 4(c) hereof notifies the Company that the total amount of securities which the Notice
Holders and the holders of such piggyback rights intend to include in any Shelf Registration
Statement is so large as to materially threaten the success of such offering (including the price
at which such securities can be sold), then the amount, number or kind of securities to be offered
for the account of holders of such piggyback rights will be reduced to the extent necessary to
reduce the total amount of securities to be included in such offering to the amount, number and
kind recommended by the managing underwriter prior to any reduction in the amount of Registrable
Securities to be included in such Shelf Registration Statement; provided that it would not be a
default under the agreements granting such piggyback rights to make such reduction; provided
further that to the extent it would be such a default under any such agreement to make such
reduction, the Company will use its commercially reasonable efforts to obtain appropriate waivers.

          (j) Severability. The remedies provided herein are cumulative and not exclusive of
any remedies provided by law. If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the

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intention of the parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any term, provision, covenant or restriction that may
be hereafter declared invalid, illegal, void or unenforceable.

          (k) Survival. The respective indemnities, agreements, representations, warranties and
each other provision set forth in this Agreement or made pursuant hereto shall remain in full force
and effect regardless of any investigation (or statement as to the results thereof) made by or on
behalf of any Holder, any director, officer or partner of such Holder, any agent or underwriter or
any director, officer or partner thereof, or any controlling Person of any of the foregoing, and
shall survive (x) the delivery and payment for the Notes pursuant to the Purchase Agreement and (y)
the transfer and registration of Registrable Securities by holders of Registrable Securities.

          (l) Securities Held by the Company, etc. Whenever the consent or approval of Holders
of a specified percentage of Securities is required hereunder, Securities held by the Company or
its Affiliates (other than subsequent Holders if such subsequent Holders are deemed to be
Affiliates solely by reason of their holdings of such Securities) shall not be counted in
determining whether such consent or approval was given by the Holders of such required percentage.

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          If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to us a counterpart hereof, whereupon this instrument will become a binding agreement
between the Company and the Initial Purchasers in accordance with its terms.

	 	 	 	 	 
	 	Very truly yours,

THE COMPANY

INSULET CORPORATION

 	 
	 	By:  	/s/ R. Anthony Diehl
 	 
	 	 	Name:  	R. Anthony Diehl 	 
	 	 	Title:  	General Counsel and Secretary 	 

 

 

	 	 	 	 	 

Accepted: June 16, 2008

	 	 	 	 	 
	By:  	J.P. MORGAN SECURITIES INC.
 	 	 
	 	 	 
	By:  	/s/ Jason M. Wood
 	 	 
	 	Name:  	Jason M. Wood 	 	 
	 	Title:  	Managing Director 	 	 
	 	 	 
	By:  	MERRILL LYNCH & CO.,
 MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
 	 	 
	 	 	 
	By:  	/s/ James Boylan
 	 	 
	 	Name:  	James Boylan 	 	 
	 	Title:  	Managing DirectorEMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), dated as of the 19th day of  June, 2008 (the “Effective Date”), is made among Eagle Shipping International (USA) LLC, a Marshall Islands limited liability company (the “Company”), its parent Eagle Bulk Shipping Inc., a Marshall Islands corporation (the “Parent”) and Sophocles N. Zoullas (the “Executive”).

WHEREAS, the Executive has entered into an employment agreement with the Company dated March 1, 2005, and amended March 25, 2008 to extend the term of such agreement to June 1, 2008;

WHEREAS, the Board of Directors of the Parent  (the “Board”) has determined that it is in the best interests of the Company and the Parent for the Executive to continue to serve as the Chief Executive Officer of the Company and Chairman of the Board subject to the terms and conditions set forth in this Agreement;

WHEREAS, the Executive desires to accept such continued service, subject to the terms and provisions of this Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the receipt of which is mutually acknowledged, the Company, the Parent and the Executive agree as follows:

1. Employment Term. The Company hereby agrees to employ the Executive, and the Executive hereby agrees to be employed by the Company, subject to the terms and conditions of this Agreement, for a five-year period (the “Employment Term”) commencing on the Effective Date and terminating on the fifth anniversary of such date or upon an earlier Date of Termination, as defined in Section 3(f) below; provided, however, that commencing on the third anniversary of the date hereof and each anniversary thereafter the Employment Term shall automatically be extended for one additional year unless, not later than 90 days prior to any such anniversary, either party hereto shall have notified the other party hereto that such
extension shall not take effect.

2. Terms of Employment. 

	
       
 	
      (a)  
 	
  Position and Duties.
 

(i)  During the Employment Term, the Executive shall serve as the Chief Executive Officer of the Company, with such duties and responsibilities as are commensurate with such position, and shall report to the Board. In addition, during the Employment Term, the Executive shall serve as Chairman of the Board. The Executive’s principal location of employment shall be at the Company’s offices in New York, New York; provided, however, that the Executive may be required under reasonable business circumstances to engage in business travel in connection with performing his duties under this Agreement.

 

 

(ii) During the Employment Term, the Executive shall devote substantially all of his business time and attention to the business and affairs of the Company and the Parent and use his reasonable best efforts to faithfully perform his duties and responsibilities; but notwithstanding the foregoing, nothing in this Agreement shall preclude the Executive (i) from engaging, consistent with his duties and responsibilities hereunder, in charitable, educational and community affairs, including serving on the board of directors of any charitable, educational or community organization, (ii) from managing his personal passive investments, (iii) upon approval of the Board, which approval shall not be unreasonably withheld, from serving as a director of another company and (iv) from engaging in activities approved by the Board. The Executive agrees not to take personal
advantage of any business opportunities relating to general shipping which may arise during the Executive’s employment hereunder which could reasonably be expected to be business opportunities that the Company or the Parent might pursue. The Executive further agrees to disclose all such opportunities, and the material facts attendant thereto, to the Board for consideration by the Company and the Parent. If within 15 business days of the Executive disclosing such business opportunities to the Board, the Board fails to adopt a resolution (and to provide a copy of same to the Executive) that it may pursue such business opportunity, the Company and the Parent will be deemed to have declined to pursue such opportunity, in which event the Executive shall be free to pursue it. 

(b) Compensation and Benefits.

(i) Base Salary. During the Employment Term, the Executive shall receive an annualized base salary (“Annual Base Salary”) of not less than $875,000  payable pursuant to the Company’s normal payroll practices. During the Employment Term, the current Annual Base Salary shall be reviewed for increase at such time, and in the same manner as the salaries of senior officers of the Company are reviewed generally. 

(ii) Annual Bonus. For each calendar year of the Company completed during the Employment Term, the Executive shall be eligible to receive a discretionary cash bonus (“Annual Bonus”) as determined by the Compensation Committee of the Board (the “Committee”). The Annual Bonus shall be paid as soon as practicable following the determination of such bonus by the Committee and in no event later than the 15th day of the third month following the end of the taxable year (of the Company or the Executive, whichever is later) for which the bonus is payable.

(iii) Equity Compensation Plans. During the Employment Term, the Executive shall be eligible to receive equity-incentive compensation in the Parent to be awarded in the sole discretion of the Committee at levels commensurate with the benefits provided to other senior officers and with adjustments appropriate for his position as the Chief Executive Officer and Chairman of the Board. All such equity-based awards shall be subject to the terms and conditions set forth in the applicable plan and agreements, and in all cases shall be as determined by the Committee.

 

 

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(iv) Initial Equity Grants. Effective as of the Effective Date, the Company shall grant Executive 833,333 restricted stock units (and related dividend equivalent rights) under the Company’s 2005 Stock Incentive Plan (the “Stock Incentive Plan”), vesting ratably over a five year period, 20% on each anniversary of the date of grant, in accordance with and subject to the terms and conditions set forth in the Stock Incentive Plan and the award agreement substantially in the form attached hereto as Exhibit B.

(v) Benefits. During the Employment Term, the Company shall provide the Executive with participation in such benefit plans and fringe benefits as it provides generally to similarly situated senior executives, all in accordance with the eligibility provisions of such plans and benefits.

(vi) Expense Reimbursement. During the Employment Term, the Executive shall, upon submission of adequate documentary evidence reasonably satisfactory to the Company, be entitled to reimbursement of reasonable and necessary out-of-pocket expenses incurred in the performance of his duties hereunder on behalf of the Company, subject to, and consistent with, the Company’s policies for expense payment and reimbursement, in effect from time to time. All expenses reimbursable pursuant to this Agreement shall be reimbursed by the end of the calendar year following the year in which the expenses were incurred.

(vii) Vacation. During the Employment Term, the Executive shall be eligible for paid vacation in accordance with the policies of the Company as may be in effect from time to time for senior officers generally; provided, however, that during each calendar year of the Employment Term, Executive shall be entitled to at least four (4) weeks of paid vacation.

(viii) Life Insurance. The Company shall continue to provide the Executive with a life insurance policy during the Employment Term of this Agreement, as determined by mutual agreement of the Company and the Executive.

3. Termination of Employment. 

(a) Death or Disability. The Executive’s employment shall terminate automatically upon the Executive’s death during the Employment Term. If the Company determines in good faith that the Disability of the Executive has occurred during the Employment Term (pursuant to the definition of Disability set forth below), it may provide the Executive with a Notice of Termination. In such event, the Executive’s employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the “Disability Effective Date”); provided, that, within the 30-day period after such receipt, the Executive shall not have returned to full time performance of the Executive’s
duties. For purposes of this Agreement, “Disability” shall mean the inability of the Executive to perform his duties with the Company on a full-time basis for 180 consecutive days or for 180 intermittent days in any one-year period as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a licensed physician selected by the Company or its insurers and reasonably acceptable to the Executive or the Executive’s legal representative. If the parties cannot agree on a licensed physician, each party shall select a licensed physician and the two physicians shall select a third who shall be the approved licensed physician for this purpose.

 

 

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(b) Cause. The Company may terminate the Executive’s employment during the Employment Term either with or without Cause by providing a Notice of Termination to the Executive, provided that if such termination is with Cause, such Notice of Termination may be provided to the Executive at any time following the adoption of a written resolution by the Board (which shall require an affirmative vote of not less than a majority of the Board (not including the Executive)) that there is “Cause” for such termination. For purposes of this Agreement, “Cause” shall mean:

(i) the Executive’s continuing refusal to perform his duties or to follow a lawful direction of the Board; 

(ii) the Executive’s intentional act or acts of dishonesty which Executive intended to result in his personal, more-than-immaterial enrichment; 

(iii) the Executive’s documented willful malfeasance or willful misconduct in connection with his employment or Executive’s willful and deliberate insubordination; or 

(iv) the Executive is convicted of a felony or the Executive enters a plea of nolo contendere to a felony.

(c) The Executive’s employment may be terminated by the Executive for Good Reason if (x) an event or circumstance set forth in the clauses of this Section 3(c) occurs and the Executive provides the Company with written notice within 90 days after the Executive has knowledge of the occurrence or existence of the event or circumstance (the notice must specifically identify the event or circumstance that the Executive believes constitutes Good Reason), (y) the Company fails to correct the event or circumstance within 30 days after the receipt of the notice, and (z) the Executive resigns within 60 days after the date of delivery of the notice referred to in clause (x) above. “Good Reason” means, in the absence of the Executive’s written consent, any of the following:

(i) a material diminution by the Company in the Executive’s Base Salary;

(ii) solely for purposes of Section 5 below, a material diminution by the Company in the Executive’s Annual Bonus as measured against the Executive’s average Annual Bonus with respect to the two immediately preceding fiscal years (“Two Year Average Bonus”); 

(iii) a material diminution in the Executive’s authority, duties, or responsibilities; provided, that, if legal or regulatory requirements mandate that the Chief Executive Officer not be the Chairman of the Board, the Executive’s removal as Chairman of the Board shall not be deemed Good Reason; 

 

 

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(iv) a requirement that the Executive report to a corporate officer or employee instead of reporting directly to the Board;

(v) a material diminution in the budget over which the Executive retains authority; 

(vi) a material change in the geographic location at which the Executive must perform the services; or 

(vii) any other action or inaction that constitutes a material breach of the terms of the Executive’s Agreement. 

The Executive shall provide notice of the existence of the Good Reason condition within 90 days of the date he learns of the condition, and the Company shall have a period of 30 days during which it may remedy the condition, and in case of full remedy such condition shall not be deemed to constitute Good Reason hereunder.

(d) Voluntary Termination. The Executive may voluntarily terminate his employment without Good Reason and such termination shall not be deemed to be a breach of this Agreement.

(e) Notice of Termination. Any termination by the Company for Cause, without Cause or for Disability, or by the Executive for Good Reason or without Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, where applicable, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (iii) sets forth the applicable Date
of Termination as provided below. The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

(f) Date of Termination. “Date of Termination” means the date specified in the Notice of Termination.

(g) Resignation from All Positions. Notwithstanding any other provision of this Agreement, upon the termination of the Executive’s employment for any reason, the Executive shall immediately resign as of the Date of Termination from all positions that he holds or has ever held with the Company and the Parent, including, without limitation, the Board. The Executive hereby agrees to execute any and all documentation to effectuate such resignations upon request by the Company, but he shall be treated for all purposes as having so resigned upon termination of his employment, regardless of when or whether he executes any such documentation. 

 

 

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(h) Separation From Service Under Section 409A. Notwithstanding the foregoing, the Executive will not be entitled to the benefits provided in Sections 4 or 5 on account of a Date of Termination unless the Executive has incurred a “separation from service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

4. Obligations of the Company upon Termination.

(a) Good Reason; Other Than for Cause. Subject to Section 5, if, during the Employment Term, (1) the Company shall terminate the Executive’s employment other than for Cause, death or Disability or (2) the Executive shall terminate employment for Good Reason:

(i) the Company shall pay to the Executive in a lump sum in cash within 60 days (except as specifically provided in Section 4(a)(i)(A)(3) and 4(a)(iii)) after the Date of Termination, or if later, as provided in Section 8 below, the aggregate of the following amounts:

A. the sum of (1) the Executive’s accrued but unpaid Annual Base Salary and any accrued but unused vacation pay through the Date of Termination, (2) the Executive’s business expenses that are reimbursable pursuant to Section 2(b)(vii) but have not been reimbursed by the Company as of the Date of Termination, subject to such deadline for payment set forth in such section, (3) the Executive’s Annual Bonus for the calendar year immediately preceding the calendar year in which the Date of Termination occurs if such bonus has been determined or earned but not paid as of the Date of Termination (at the time such Annual Bonus would otherwise have been paid), and (4) the product of the Executive’s Two Year Average Bonus multiplied by a fraction, the numerator of which is the number of days in the year in which the Date of Termination occurs through
the Date of Termination and the denominator of which is 365 (collectively, the “Accrued Obligations”); and 

B. the amount equal to the product of (x) two and (y) the sum of (I) the Executive’s Annual Base Salary and (II) the Executive’s Two Year Average Bonus; and

(ii) for two years after the Executive’s Date of Termination, the Company shall continue medical and life insurance benefits to the Executive (and, if applicable, to any dependents of the Executive who received such benefits under his coverage prior to the Date of Termination) at least equal to those that would have been provided to the Executive (and to any such dependent) in accordance with the plans, programs, practices and policies of the Company if the Executive’s employment had not been terminated; provided, that the Executive continues to make all required contributions; and

(iii) all equity awards in the Parent held by the Executive (“Equity Awards”) shall become fully vested and exercisable.

 

 

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Except with respect to payments and benefits under Sections 4(a)(i)(A)(l) and 4(a)(i)(A)(2) and 4(a)(iii), all payments and benefits to be provided under this Section 4(a) shall be subject to the Executive’s delivering to the Company, and not revoking, a signed release of claims substantially in the form of Exhibit A hereto within fifty-two days following Executive’s Date of Termination.

(b) Cause; Other than for Good Reason. If the Executive’s employment shall be terminated for Cause or if the Executive terminates his employment without Good Reason during the Employment Term, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay or provide to the Executive an amount equal to the amount set forth in clauses (1), (2), and (except in the event of a termination by the Company for Cause) (3) and (4) of Section 4(a)(i)(A) above. 

(c) Death. If the Executive’s employment is terminated by reason of the Executive’s death during the Employment Term, this Agreement shall terminate without further obligations to the Executive’s legal representatives under this Agreement, other than: (i) the obligation to pay or provide to the Executive’s beneficiaries the Accrued Obligations, and (ii) the vesting of Equity Awards as provided in subsection (e) below.

(d) Disability. If the Executive’s employment is terminated by reason of the Executive’s Disability during the Employment Term, this Agreement shall terminate without further obligations to the Executive, other than: (i) the obligation to pay or provide to the Executive the Accrued Obligations, and (ii) the vesting of Equity Awards as provided in subsection (e) below.

(e) Vesting of Equity on Death or Disability. With respect to Executive’s Equity Awards, if the Executive’s employment is terminated by reason of death or Disability: (i) any stock options or stock appreciation rights shall become fully exercisable and shall remain exercisable for a period of 12 months after such termination (or until the earlier original expiration date of such options or stock appreciation rights) by the Executive or the Executive’s estate, and shall thereafter terminate and (ii) any restricted stock or restricted stock units shall become fully vested.

5. Change in Control Benefits. If at any time within two (2) years following a Change in Control (as defined below) the Executive’s employment is terminated other than for Cause, death or Disability or he resigns for Good Reason:

(a) the Executive is entitled to receive the following benefits payable in a lump sum within ten days following the Date of Termination:

(i) the Accrued Obligations; and

(ii) the amount equal to the product of (x) three and (y) the sum of (I) the Executive’s Annual Base Salary and (II) Executive’s Two Year Average Bonus; and

(b) for three years after the Executive’s Date of Termination, the Company shall continue medical and life insurance benefits to the Executive (and, if applicable, to any dependents of the Executive who received such benefits under his coverage prior to the Date of 

 

 

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Termination) at least equal to those that would have been provided to the Executive (and to any such dependent) in accordance with the plans, programs, practices and policies of the Company if the Executive’s employment had not been terminated; provided, that the Executive continues to make all required contributions; and 

(c) if not previously vested in accordance with their terms, all Equity Awards shall become fully vested and exercisable.

 If the Executive becomes entitled to payments under this Section 5, he will not be entitled to any payments or benefits under Section 4.

6. Definition of Change in Control. The term “Change in Control” as used in this Agreement shall mean the occurrence of any of the following:

(a) any “person” (as defined in Section 13(d)(3) of the 1934 Act), corporation or other entity (other than (i) the Company or Parent, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or Parent, or (iii) any company or other entity owned, directly or indirectly, by the holders of the voting stock of the Parent in substantially the same proportions as their ownership of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Parent, directly or indirectly, of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Parent;

(b) the sale of all or substantially all the Parent’s assets in one or more related transactions to a person or group of persons, other than such a sale (i) to a subsidiary which does not involve a change in the equity holdings of the Parent, or (ii) to an entity which has acquired all or substantially all the Parent’s assets (any such entity described in clause (i) or (ii), the “Acquiring Entity”) if, immediately following such sale, 50% or more of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Acquiring Entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of
the Acquiring Entity) is beneficially owned by the holders of the voting stock of the Parent, and such voting power among the persons who were holders of the voting stock of the Parent immediately prior to such sale is, immediately following such sale, held in substantially the same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Parent immediately prior to such sale;

(c) any merger, consolidation, reorganization or similar event of the Parent or any subsidiary as a result of which the holders of the voting stock of the Parent immediately prior to such merger, consolidation, reorganization or similar event do not directly or indirectly hold 50% or more of the aggregate voting power of the capital stock of the surviving entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the surviving entity) and such voting power among the persons who were holders of the voting stock of the Parent immediately prior to such sale is, immediately following such sale, held in substantially the same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors
of the Parent immediately prior to such sale;

 

 

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(d) the approval by the Parent’s stockholders of a plan of complete liquidation or dissolution of the Parent;

(e) during any period of 24 consecutive calendar months, individuals who were directors of the Parent on the first day of such period, or whose election or nomination for election to the Board was recommended or approved by at least a majority of the directors then still in office who were directors of the Parent on the first day of such period, or whose election or nomination for election were so approved, shall cease to constitute a majority of the Board;

provided, however, that (i) in no event shall a Change in Control be deemed to have occurred in connection with the initial public offering of common stock of the Company or the Parent, and (ii) notwithstanding the foregoing, for each award subject to Section 409A of the Code, a Change in Control shall be deemed to occur with respect to such award only if a change in the ownership or effective control of the Parent or a change in the ownership of a substantial portion of the assets of the Parent shall also be deemed to have occurred under Section 409A of the Code, provided that this clause (ii) shall apply to such award only to the extent necessary to avoid adverse tax
effects under Section 409A of the Code.

7. Excise Tax Gross Up.

(a) In the event that any payment or distribution to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”) is made to the Executive, and it shall be determined that the Payment, would constitute an “excess parachute payment” within the meaning of Section 280G of the Code, the Company shall pay the Executive an additional amount of cash (the “Gross-Up Payment”) such that the net amount retained by the Executive after deduction of any Excise Tax (as defined below), and any federal, state and local income tax,
employment tax and Excise Tax imposed upon the Gross-Up Payment, shall be equal to the Payment. The term “Excise Tax” means the excise tax imposed under Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax. For purposes of determining the amount of the Gross-Up Payment, unless the Executive specifies that other rates apply, the Executive shall be deemed to pay federal income tax and employment taxes at the highest marginal rate of federal income and employment taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s residence on the Executive’s Date of Termination, net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes.

(b) All determinations to be made under this Section 7 shall be made by the Company’s independent public accounting firm immediately prior to the transaction subject to Section 280G of the Code or another independent public accounting firm selected by the Company prior to such date (the “Accounting Firm”). The Accounting Firm shall provide its determinations and any supporting calculations both to the Company and the Executive within 20 days after the transaction subject to Section 280G of the Code. Any such determination by the Accounting Firm shall be binding upon the Company and the Executive. 

 

 

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(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Executive knows of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which the Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall: (i) give the Company any information
reasonably requested by the Company relating to such claim, (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, (iii) cooperate with the Company in good faith in order to contest such claim effectively, and (iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax, income tax or employment tax, including interest and penalties, with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this
Section 7, the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearing and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a termination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine. If the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax, income tax or employment tax, including interest or penalties with respect thereto, imposed with respect to
such advance or with respect to any imputed income with respect to such advance. Any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due shall be limited solely to such contested amount. The Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder, and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to this Section, the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company’s complying with the requirements of subsection (b)) promptly pay to the Company the amount of such refund, together with any interest paid or credited thereon after taxes applicable thereto. If, after the receipt by the Executive of an amount advanced by the Company pursuant to this Section 7, a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid
and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

 

 

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(e) All of the fees and expenses of the Accounting Firm in performing the determinations referred to in subsections (a), (b) and (c) above shall be borne solely by the Company.

(f) The Company shall pay the Gross-Up Payment as soon as practicable but in no event later than the end of the calendar year following the year in which the related Excise Tax is paid.

8. Section 409A – Six Month Delay on Separation From Service if Required. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, amounts that would otherwise be payable under this Agreement during the six-month period immediately following the Executive’s termination, shall instead be paid on the first business day after the expiration of such six-month period, plus interest thereon, at a rate equal to the applicable Federal short-term rate (as defined in Section 1274(d) of the Code) for the month in which such Date of Termination occurs from the respective dates on which such amounts would otherwise have been paid until the actual date of payment.

9. Full Settlement. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, and such amounts shall not be reduced as a result of a mitigation duty whether or not the Executive obtains other employment. To the extent permitted by applicable law, the Company shall pay directly to the Executive all reasonable legal fees and expenses reasonably incurred by the Executive in connection with the negotiation and preparation of this Agreement. All expenses reimbursable pursuant to this Agreement shall be reimbursed as soon as practicable but in no event later than the end of the calendar year following the year in which the expenses were incurred.

10. Covenants. In order to induce the Company to enter into this Agreement, as a material condition of his employment by the Company, the Executive agrees as follows:

(a) Nonsolicitation and Noncompetition. 

(i) Nonsolicitation. During the “Restricted Period” (as defined below), the Executive, on his own behalf or on behalf of any other person, partnership, corporation or other entity, will not, directly or indirectly, (i) intentionally solicit or induce or attempt to solicit or induce any employee, agent or consultant to terminate his or her relationship with the Company, or (ii) intentionally take any action to interfere with, disrupt or attempt to disrupt the relationship, contractual or otherwise, between the Company and any customer, supplier, lessor, lessee, broker or employee or any other person or entity which has a business relationship with the Company. For purposes hereof, the “Restricted Period” means the period commencing on the date of this Agreement and terminating twelve (12) months following the termination of the Executive’s employment with the Company for any reason. As used in this Section 10, “Company” shall include the Company, the Parent and their affiliates.

 

 

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(ii) Noncompetition. During the term of this Agreement and for two years thereafter, the Executive shall not engage in any Competitive Activity (as defined below). In the event of a Change in Control  or a termination of the Executive’s employment by the Company without Cause or by the Executive for Good Reason, then provisions of this Section 10(a)(ii) shall not be effective. If the Executive engages in Competitive Activity in breach of this Section following the Date of Termination, then the Company shall be entitled, on a non-exclusive basis, and at the Company’s sole election, to (i) seek money damages to the extent they can reasonably be determined; and (ii) seek injunctive and equitable relief on both a provisional and permanent basis in accordance with Section 10(f)
hereof. The Company shall give the Executive prior written notice of any perceived breach and 10 business days to cure prior to taking any action. As used in this Section, “Competitive Activity” means involvement in the management or operation of or control, direct or indirect, of a company that operates dry bulk vessels of which at least 80% (by number of ships) are Supramax class wherever such business is located in the world if such business is or reasonably could become a competitor of the Company at the time the Executive becomes affiliated with such company.

(b) Property of the Company. 

(i) Proprietary Information. All right, title and interest in and to “Proprietary Information” (as defined below) will be and shall remain the sole and exclusive property of the Company. The Executive will not remove from the Company’s offices or premises any documents, records, notebooks, files, correspondence, reports, memoranda or similar materials of or containing Proprietary Information, or other materials or property of any kind belonging to the Company unless necessary or appropriate in the performance of his duties to the Company. If the Executive removes such materials or property in the performance of his duties, the Executive will return such materials or property to their proper files or places of safekeeping as promptly as possible after the removal has served its specific purpose. The Executive
will not make, retain, remove and/or distribute any copies of any such materials or property, or divulge to any third person the nature of and/or contents of such materials or property or any other oral or written information to which he may have access or become familiar in the course of his employment, except to the extent necessary in the performance of his duties. Upon termination of the Executive’s employment with the Company for whatever reason and whether voluntary or involuntary, or at any time at the request of the Company, he will leave with the Company or promptly return to the Company all originals and copies of such materials or property then in his possession and shall not retain any copies or other reproductions or extracts thereof except for historical financial or corporate information reasonably required to be retained for tax or related purposes. The foregoing restrictions and obligations under this Section 10(b) shall not apply to: (A) any Proprietary
Information that is or becomes generally available to the public other than as a result of a disclosure by the Executive, (B) any information obtained by the Executive from a third party which the Executive has no reason to believe is violating any obligation of confidentiality to the Company, or (C) any information the Executive is required by law to disclose. In the event that the Executive is requested in any proceeding to disclose any Proprietary Information, the Executive agrees to give the Company prompt written notice of such request and the documents requested thereby so that the Company may seek an appropriate protective order. It is further agreed that if, in the absence of a protective order, the Executive is nonetheless, in the written opinion of his counsel, compelled to disclose Proprietary Information to any tribunal or else stand liable for contempt or suffer other censure or penalty, the Executive may disclose such information to such tribunal without liability hereunder; provided, however, that the Executive must give the Company written notice of the information to be disclosed (including copies of the relevant
portions of the relevant documents) as far in advance of its disclosure as is practicable, use all reasonable efforts to limit any such disclosure to the precise terms of such requirement and use all reasonable efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to such information.

 

 

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“Proprietary Information” means any and all information of the Company or of any subsidiary of the Company.  Such Proprietary Information shall include, but shall not be limited to, the following items and information relating to the following items: (A) all intellectual property and proprietary rights of the Company (including without limitation Intellectual Property) (B) computer codes or instructions (including source and object code listings, program logic algorithms, subroutines, modules or other subparts of computer programs and related documentation, including program notation), computer processing systems and techniques, all computer inputs and outputs (regardless of the media on which stored or located), hardware and software configurations, designs, architecture
and interfaces, (C) business research, studies, procedures and costs, (D) financial data, (E) distribution methods, (F) marketing data, methods, plans and efforts, (G) the terms of contracts and agreements with customers, contractors and suppliers, (H) the needs and requirements of, and the Company’s course of dealing with, actual or prospective customers, contractors and suppliers, (I) personnel information, (J) customer and vendor credit information, and (K) any information received from third parties subject to obligations of non-disclosure or non-use. Failure by the Company to mark any of the Proprietary Information as confidential or proprietary shall not affect its status as Proprietary Information under the terms of this Agreement.

(ii) Intellectual Property. The Executive agrees that all “Intellectual Property” (as defined below) will be considered “works made for hire” as that term is defined in Section 101 of the Copyright Act (17 U.S.C. § 101) and that all right, title and interest in such Intellectual Property will be the sole and exclusive property of the Company. To the extent that any of the Intellectual Property may not by law be considered a work made for hire, or to the extent that, notwithstanding the foregoing, the Executive retains any interest in the Intellectual Property, the Executive hereby irrevocably assigns and transfers to the Company any and all right, title or interest that the Executive may now or in the future have in the Intellectual Property under patent,
copyright, trade secret, trademark or other law, in perpetuity or for the longest period otherwise permitted by law, without the necessity of further consideration. The Company will be entitled to obtain and hold in its own name all copyrights, patents, trade secrets, trademarks and other similar registrations with respect to such Intellectual Property. The Executive further agrees to execute any and all documents and provide any further cooperation or assistance reasonably required by the Company to perfect, maintain or otherwise protect its rights in the Intellectual Property. If the Company is unable after reasonable efforts to secure the Executive’s signature, cooperation or assistance in accordance with the preceding sentence, whether because of the Executive’s incapacity or any other reason whatsoever, the Executive hereby designates and appoints the Company or its designee as the Executive’s agent and attorney-in-fact, to act on her behalf, to execute and file documents and to do all other lawfully permitted acts necessary or desirable to perfect, maintain or otherwise protect the Company’s rights in the Intellectual Property. The Executive acknowledges and agrees that such appointment is coupled with an
interest and is therefore irrevocable.

 

 

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“Intellectual Property” means (A) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents and patent applications claiming such inventions, (B) all trademarks, service marks, trade dress, logos, trade names, fictitious names, brand names, brand marks and corporate names, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (C) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith, (D) all mask works and all applications, registrations, and renewals in connection therewith, (E) all trade
secrets (including research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, methodologies, technical data, designs, drawings and specifications), (F) all computer software (including data, source and object codes and related documentation), (G) all other proprietary rights, and (H) all copies and tangible embodiments thereof (in whatever form or medium), or similar intangible personal property which have been or are developed or created in whole or in part by the Executive (1) at any time and at any place while the Executive is employed by Company and which, in the case of any or all of the foregoing, are related to or used in connection with the business of the Company, or (2) as a result of tasks assigned to the Executive by the Company.

(c) Interpretation; Severability. The Executive has carefully considered the possible effects on the Executive of the confidentiality provisions and the other obligations contained in this Agreement and the Executive recognizes that the limitations are reasonable and necessary to protect the legitimate business interests, developing new Proprietary Information and Intellectual Property and developing goodwill of the Company. The parties hereto agree that if any portion of the above restrictive covenants are held to be unreasonable, arbitrary, against public policy, or for any other reason unenforceable, the covenants herein shall be considered diminishable both as to time and geographic area; each month for the specified period shall be deemed a separate period of time, and the restrictive covenants
shall remain effective so long as the same is not unreasonable, arbitrary or against public policy, but in no event longer than the Restricted Period. The parties hereto agree that in the event any court determines the specified time period or the specified geographic area to be unreasonable, arbitrary or against public policy, a lesser period or geographic area which is determined to be reasonable, nonarbitrary and not against public policy having an effect as close as permitted by applicable law to the provision declared unenforceable shall be enforced against the Executive.

 

 

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(d) Calculation of Time. The time period covered by the restrictive covenants contained in this Section 10 shall not include any period(s) of violation of any restrictive covenant.

(e) Independent Covenants. The covenants set forth in this Section 10 shall be construed as an agreement independent of any other provision in this Agreement, and the existence of any potential or alleged claim or cause of action of the Executive against the Company or the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants contained herein. An alleged or actual breach of this Agreement by the Company shall not be a defense to enforcement of the provisions of this Section 10. It is acknowledged and agreed that the provisions of this Section 10 shall survive the termination of this Agreement.

(f) Injunction; Specific Performance. The Executive acknowledges that if he were to breach any of the provisions of this Section 10, it would result in an immediate and irreparable injury to the legitimate business interests of the Company for which monetary damages alone might not be an adequate remedy and that the amount of such damages may be difficult to determine. Therefore, the Executive agrees that if any such breach shall occur, if the Company so elects, and in addition to all other remedies that the Company may have, the Company shall be entitled to seek injunctive relief, specific performance, or any other form of equitable relief to remedy a breach or threatened breach of this Agreement. The existence of this right shall not preclude or otherwise limit the applicability or exercise of any
other rights or remedies which the Company may have at law or in equity. If any action is brought by the Company pursuant to this Section 10, the prevailing party shall be entitled to recover costs and reasonable attorneys’ fees incurred in such action, the amount of such reasonable attorneys’ fees to be determined by the court and not a jury.

11. Successors. This Agreement is binding on and may be enforced by the Company or the Parent and their successors and assigns and is binding on and may be enforced by the Executive and the Executive’s heirs and legal representatives. The Company or the Parent shall cause any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial portion of its business and/or assets to assume expressly and agree to perform this Agreement immediately upon such succession in the same manner and to the same extent that the Company or the Parent would be required to perform it if no such succession had taken place. As used in this Agreement, “Company”
shall mean the Company as defined above and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise. 

12. Miscellaneous. 

(a) This Agreement will be governed by the laws of the State of New York. All actions arising out of or relating to this Agreement shall be heard and determined exclusively in any New York state or federal court sitting the Borough of Manhattan in The City of New York. The parties hereto hereby (i) submit to the exclusive jurisdiction of any state or federal court sitting in the Borough of Manhattan in The City of New York for the purpose of any action arising out of or relating to this Agreement brought by any party hereto, and (ii) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, that the venue of the action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any of the above-named courts. 

 

 

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(b) Notices under this Agreement must be in writing and will be deemed to have been given (i) when personally delivered or (ii) three business days after mailed by U.S. registered or certified mail, return receipt requested and postage prepaid, and will be addressed as follows:

If to the Executive:

Sophocles N. Zoullas

c/o Eagle Shipping International (USA) LLC

477 Madison Ave.

New York, NY  10022

With a copy to:

Seward & Kissel LLP

One Battery Park Plaza

New York, New York 10004

Attn: M. William Munno, Esq.

If to the Company:

Eagle Shipping International (USA) LLC 

477 Madison Ave.

New York, NY  10022

Attention: Mr. Alan Ginsberg

With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

4 Times Square

New York, NY 10036

Attn: Regina Olshan, Esq.

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

(d) The Company may withhold from any amounts payable under this Agreement such federal, state or local income taxes to the extent the same required to be withheld pursuant to any applicable law or regulation. 

 

 

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(e) Subject to the provisions of Section 3(c), the Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive, the Company or the Parent may have hereunder, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

(f) From and after the Effective Date, this Agreement shall supersede any other employment agreement or understanding between the parties with respect to the subject matter hereof except as otherwise specifically set forth in this Agreement. 

13. Director’s and Officer’s Insurance; Indemnification.

(a) The Company shall indemnify the Executive, to the fullest extent permitted by applicable law, against all costs, charges and expenses incurred or sustained by the Executive, including the cost and expenses of legal counsel, in connection with any action, suit or proceeding to which the Executive may be made a party by reason of the Executive being or having been an officer, director, or employee of the Company or Parent or any of its subsidiaries or affiliates.

(b) The Executive shall be covered during the entire term of this Agreement and thereafter for at least six (6) years by officer and director liability insurance in amounts and on terms similar to that afforded to other executives and/or directors of the Company and the Parent or their affiliates, which such insurance shall be paid by the Company or the Parent.

14. Section 409A. If it is determined that any amount due the Executive under the terms of this Agreement has been structured in a manner that would result in adverse tax treatment under Section 409A of the Code, the parties agree to cooperate in taking all reasonable measures to restructure the arrangement to minimize or avoid such adverse tax treatment without materially impairing Executive’s economic rights. 

 

 

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IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the authorization from the Board, the Company and the Parent have caused these presents to be executed in its name and on its behalf, all as of the day and year first above written.

 

	
                         
 	
                         
 	
                        SOPHOCLES N. ZOULLAS
 
	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        /s/ Sophocles N. Zoullas
 
	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        EAGLE SHIPPING INTERNATIONAL (USA) LLC
 
	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
      By: 
 	
      /s/ Alan S. Ginsberg
 
	
                         
 	
                         
 	
                        Name:
 	
                        Alan S. Ginsberg
 
	
                         
 	
                         
 	
                        Title:
 	
                        Chief Financial Officer
 

 

 

	
                         
 	
                         
 	
                        EAGLE BULK SHIPPING INC.
 
	
                         
 	
                         
 	
                         
 
	
       
 	
       
 	
                        By: 
 	
                        /s/ Alan S. Ginsberg
 
	
                         
 	
                         
 	
                        Name:
 	
                        Alan S. Ginsberg
 
	
                         
 	
                         
 	
                        Title:
 	
                        Chief Financial Officer
 

 

 

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Exhibit A

RELEASE AGREEMENT

THIS RELEASE AGREEMENT (the “Release”) is made as of this      day of       ,       , among Eagle Shipping International (USA) LLC, a Marshall Islands limited liability company (the “Company”), its parent Eagle Bulk Shipping Inc., a Marshall Islands corporation (the “Parent”) and Sophocles N. Zoullas (the “Executive”).

	
                        1.
 	
                        Executive hereby voluntarily, knowingly and willingly releases and forever discharges the Company, its Parent and their subsidiaries and affiliates, and each of their respective officers, directors, partners, members, shareholders, employees, attorneys, representatives and agents, and each of their predecessors, successors and assigns (collectively, the “Company Releases”), from any and all charges, complaints, claims, promises, agreements, controversies, causes of action and demands of any nature whatsoever which against them Executive or Executive’s executors, administrators, successors or assigns ever had, now have or hereafter can, shall or may have by reason of any matter, cause or thing whatsoever (a) arising prior to the time Executive signs this Release; (b) arising prior to the time Executive signs this Release out of or
relating to Executive’s employment with the Company, service as a member of the Board or the termination thereof; or (c) arising prior to the time Executive signs this Release out of or relating to (i) the Employment Agreement between the Company and the Executive, dated June 19, 2008, and (ii) any relevant agreement, contract, plan, practice, policy or program of the Company. This Release includes, but is not limited to, any rights or claims arising under any statute, including the Employee Retirement Income Security Act of 1974, Title VII of the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefit Protection Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the Fair Labor Standards Act, or any other foreign, federal, state or local law or judicial decision, including, but not limited to, and any rights or claims under any policy, agreement, understanding or promise, written or oral, formal
or informal, between Executive and any of the Company Releasees. The foregoing Release shall not apply to (i) claims that cannot be released under applicable law, including, but not limited to, any claim for unpaid wages, workers’ compensation benefits, unemployment benefits; (ii) legally mandated benefits; (iii) vested benefits, if any, under any equity plan, qualified or nonqualified savings and pension plans in which Executive may have participated during his employment with the Company or its affiliates; (iv) any claim related to indemnification for acts performed while an officer or director of the Company or the Parent or their affiliates as permitted under applicable law and the bylaws of the Company or the Parent or their affiliates, as appropriate; or (v) any claim that may be raised by Executive in his capacity as an equity-holder of the Parent or its affiliates. Executive represents that Executive has no complaints, charges or lawsuits pending against the Company or
the Parent or any of the Company Releasees.
 

 

	
                        2.
 	
                        Executive has a twenty-one (21) day period in which to consider the Release and shall have seven (7) additional days from the date of execution to revoke his consent to the Release. Any such revocation shall be made in writing so as to be received by the Company prior to the eighth (8th) day following Executive’s execution of this Release. If no such revocation occurs, the Release shall become effective on the eighth (8th) day following Executive’s execution of this Release. 
 

	
                        3.
 	
                        This Release shall be governed and construed in accordance with the laws of New York, without reference to the principles of conflicts of law thereof.
 

IN WITNESS WHEREOF, Executive, the Company and the Parent have executed the Release as of the date and year first written above. 

 

	
                         
 	
                         
 	
                        SOPHOCLES N. ZOULLAS
 
	 	 	 
	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        EAGLE SHIPPING INTERNATIONAL (USA) LLC
 
	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                        By: 
 	
                          
 
	
                         
 	
                         
 	
                         
 	
                        Name: 
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                        Title: 
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                        EAGLE BULK SHIPPING INC.
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                        By: 
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                        Name: 
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                        Title: 
 	
                         
 

 

 

2

 

 

Exhibit B

RESTRICTED STOCK UNIT AWARD AGREEMENT

UNDER THE EAGLE BULK SHIPPING INC.

2005 STOCK INCENTIVE PLAN

This Restricted Stock Unit Award Agreement (the “RSU Award Agreement”) dated as of June 19, 2008 (the “Date of Grant”), is made by and between Eagle Bulk Shipping Inc., a Republic of the Marshall Islands company (the “Company”), and Sophocles N. Zoullas (the “Participant”). Capitalized terms not defined herein shall have the meaning ascribed to them in the Eagle Bulk Shipping Inc., 2005 Stock Incentive Plan (the “Plan”). Where the context permits, references to the Company shall include any successor to the Company.

1. Grant of Restricted Share Units. The Company hereby grants to the Participant 833,333 restricted stock units (the “RSUs”), subject to all of the terms and conditions of this RSU Award Agreement and the Plan.

2. Form of Payment and Vesting. Each RSU granted hereunder shall represent the right to receive one (1) share of Common Stock as of the date of vesting, with such vesting to occur ratably over five (5) years at 20% on each yearly anniversary of the date of grant, provided that no vesting shall occur after the termination of the Participant’s employment or service with the Company.

3. Restrictions.

(a) The RSUs granted hereunder may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of or encumbered, and shall be subject to a risk of forfeiture as described in Section 2 and until any additional requirements or restrictions contained in this RSU Award Agreement or in the Plan have been otherwise satisfied, terminated or expressly waived by the Company in writing.

(b) Upon the vesting of the RSUs, the shares subject to the RSUs shall be issued hereunder (provided, that such issuance is otherwise in accordance with federal and state securities laws) as soon as practicable thereafter, but in any case within two and one-half months after the taxable year (of the Participant or of the Company whichever is later) in which such vesting occurred.

4. Termination of Employment or Service. 

(a) For Cause. If the Participant has a Termination of Affiliation for Cause, all of the Participant’s unvested RSUs shall be forfeited as of such date.

(b) On Account of Death or Disability. If the Participant has a Termination of Affiliation on account of death or Disability, then the Participant’s unvested RSUs shall vest and the shares subject to such RSUs shall be issued hereunder (provided, that such issuance is otherwise in accordance with federal and state securities laws) as soon as practicable thereafter, but in any case within two and one-half months after the taxable year (of the Participant or of the Company whichever is later) in which such termination occurred.

 

 

1

 

(c) Any Other Reason. Except as provided in Section 5 below, if the Participant has a Termination of Affiliation for any reason other than due to death or Disability, then the Participant’s unvested RSUs shall be forfeited as of such date.

5. Termination Following Change in Control.

(a) If the Participant has a Termination of Affiliation as a result of termination of employment  by the Company without Cause, or by the Participant for Good Reason (as defined below) within 24 months following a Change in Control, then the Participant’s unvested RSUs shall vest and the shares subject to such RSUs shall be issued hereunder (provided, that such issuance is otherwise in accordance with federal and state securities laws) as soon as practicable thereafter, but in any case within two and one-half months after the taxable year (of the Participant or of the Company, whichever is later) in which such termination occurs.

(b) For purposes of the foregoing, “Good Reason” shall have the meaning set forth in the Employment Agreement between the Company and the Participant, dated June 19, 2008.

6. Voting; Dividend Equivalents. The Participant shall have no rights of a shareholder (including the right to distributions or dividends) until shares of Common Stock are issued pursuant to the terms of this RSU Award Agreement; provided, however, that the Participant shall receive payment of dividend equivalents with respect to the number of shares of Common Stock  subject to the RSUs then held by him, to be paid in the same form as, and as soon as practicable following the same date as (but in any case within two and one-half months after the taxable year (of the Participant or of the Company whichever is later) in which such dividend is declared) the dividend is paid to holders of shares of Common Stock. Notwithstanding the foregoing, if the Participant has a Termination of Affiliation and some or
all of his RSUs are forfeited in connection with said Termination of Affiliation, the Participant shall repay to the Company the amount of any dividend equivalents previously paid to him in respect to such forfeited RSUs and shall retain any dividend equivalents previously paid to him in respect of any RSUs which were vested as of said Termination of Affiliation.

7. RSU Award Agreement Subject to Plan. This RSU Award Agreement is made pursuant to all of the provisions of the Plan, which is incorporated herein by this reference, and is intended, and shall be interpreted in a manner, to comply therewith. In the event of any conflict between the provisions of this RSU Award Agreement and the provisions of the Plan, the provisions of the Plan shall govern.

8. No Rights to Continuation of Employment. Nothing in the Plan or this RSU Award Agreement shall confer upon Participant any right to continue in the employ of the Company or any Subsidiary thereof or shall interfere with or restrict the right of the Company or its shareholders (or of a Subsidiary or its shareholders, as the case may be) to terminate Participant’s employment any time for any reason whatsoever, with or without cause.

 

 

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9. Tax Withholding. The Company shall be entitled to require a cash payment by or on behalf of the Participant and/or to deduct from other compensation payable to the Participant any sums required by federal, state or local tax law to be withheld or to satisfy any applicable payroll deductions with respect to the payment of any RSU. 

10. Section 409A Compliance. Notwithstanding anything to the contrary contained in this RSU Award Agreement, to the extent that the Board determines that the Plan or the RSU is subject to Section 409A of the Code and fails to comply with the requirements of Section 409A of the Code, the Board reserves the right (without any obligation to do so) to amend or terminate the Plan and/or amend, restructure, terminate or replace the RSU in order to cause the RSU to either not be subject to Section 409A of the Code or to comply with the applicable provisions of such section.

11. Governing Law. This RSU Award Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the internal laws, and not the laws pertaining to conflicts or choices of laws, of the State of New York applicable to agreements made and to be performed wholly within the State of New York.

12. RSU Award Agreement Binding on Successors. The terms of this RSU Award Agreement shall be binding upon Participant and upon Participant’s heirs, executors, administrators, personal representatives, transferees, assignees and successors in interest, and upon the Company and its successors and assignees, subject to the terms of the Plan.

13. No Assignment. Notwithstanding anything to the contrary in this RSU Award Agreement, neither this RSU Award Agreement nor any rights granted herein shall be assignable by Participant.

14. Necessary Acts. Participant hereby agrees to perform all acts, and to execute and deliver any documents that may be reasonably necessary to carry out the provisions of this RSU Award Agreement, including but not limited to all acts and documents related to compliance with federal and/or state securities and/or tax laws.

15. Entire RSU Award Agreement. This RSU Award Agreement and the Plan contain the entire agreement and understanding among the parties as to the subject matter hereof.

16. Headings. Headings are used solely for the convenience of the parties and shall not be deemed to be a limitation upon or descriptive of the contents of any such Section.

17. Counterparts. This RSU Award Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

 

 

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18. Amendment. No amendment or modification hereof shall be valid unless it shall be in writing and signed by all parties hereto.

IN WITNESS WHEREOF, the parties hereto have executed this RSU Award Agreement as of the date set forth above.

 

	
                        EAGLE BULK SHIPPING, INC.
 	
                         
 	
                         
 
	
                        

                        By 
 	
                          
 	
                         
 	
                         
 	
                         
 
	
                        Print Name:
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Title:
 	
                         
 	
                         
 	
                         
 	
                         
 

 

The undersigned hereby accepts and agrees to all the terms and provisions of the foregoing RSU Award Agreement.

 

	
                        PARTICIPANT
 SOPHOCLES N. ZOULLAS
 	
                         
 	
                         
 
	
      Signature 
 	
                        
  
 	
                         
 	
                         
 	
                         
 
	
                        Print Name:
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        

                        Address:
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 

 

 

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