Document:

ex10-1.htm

Exhibit 10.1

 

 

STOCK PURCHASE AGREEMENT

 

 

 

by and among

 

EAGLE BULK SHIPPING INC. 

 

and 

 

THE PARTIES LISTED ON SCHEDULE 1 HERETO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dated as of July 1, 2016

 

 

 

 

 

Stock Purchase Agreement

 

This Stock Purchase Agreement (this “Agreement”) is made and entered into as of July 1, 2016, by and among Eagle Bulk Shipping Inc., a corporation organized under the laws of the Republic of the Marshall Islands (the “Company”), and the Investors listed on Schedule 1 (each, an “Investor,” and collectively, the “Investors”). 

 

WHEREAS, the Company desires to sell to the Investors, and the Investors desire to purchase from the Company, a number of shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), in the amounts listed on Schedule 1 subject to adjustment pursuant to the Reverse Split (as defined below) (the “Securities”), subject to the terms and conditions set forth in this Agreement; and

 

WHEREAS, in order to permit the issuance of the Securities, the Company deems it advisable and in its best interests to seek the approval of the holders of its Common Stock pursuant to Article FOURTEENTH of the Second Amended and Restated Articles of Incorporation of the Company (the “Articles of Incorporation”) of (i) an amendment (the “Amendment”) to Article FOURTH of the Articles of Incorporation to (x) increase the total number of shares of Common Stock that the Company is authorized to issue and (y) effect a reverse stock split (the “Reverse Split”) at a ratio (the “Reverse Split Ratio”) to be determined by the Chairman of the Board of Directors the (“Board”) of the Company and (ii) to issue the Securities pursuant to this Agreement as required by NASDAQ Marketplace Rule 5635(d) and 5635(c) (such approval under clauses (i) and (ii) collectively, the “Shareholder Approval”).

 

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Investors, severally and not jointly, hereby agree as follows: 

 

1.             Definitions. As used in this Agreement, unless the context otherwise requires, the following terms shall have the respective meanings specified or referred to in this Section 1: 

 

“Affiliate” means, when used with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified. For purposes of this definition, “control,” when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. The terms “controlling” and “controlled” have meanings correlative to the foregoing. 

 

“Court Order” means any judgment, order, award or decree of any foreign, federal, state, local or other court or administrative or regulatory body and any award in any arbitration proceeding. 

 

 

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“Environmental Law” means any law relating to pollution or protection of the environment, to the carriage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material, to the extent applicable.

 

“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

 

“Environmentally Sensitive Material” means oil, oil products and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous.

 

“Encumbrance” means any lien (statutory or other), encumbrance, claim, charge, security interest, mortgage, deed of trust, pledge, hypothecation, assignment, conditional sale or other title retention agreement, preference, priority or other security agreement or preferential arrangement of any kind or nature, and any easement, encroachment, covenant, restriction, right of way, defect in title or other encumbrance of any kind. 

 

“Governmental Body” means any foreign, federal, state, local or other government, governmental, statutory or administrative authority or regulatory body, self-regulatory organization or any court, tribunal or judicial or arbitral body. 

 

“Person” means any individual, partnership, corporation, limited liability company, association, joint venture, joint-stock company, trust, unincorporated organization, Governmental Body or other entity.

 

“Requirements of Law” means any applicable foreign, federal, state and local laws, statutes, regulations, rules, codes, ordinances, Court Orders and requirements enacted, adopted, issued or promulgated by any Governmental Body or common law or any applicable consent decree or settlement agreement entered into with any Governmental Body.

 

“SEC Reports” means, collectively, all reports of the Company required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof. The term “SEC Reports” shall not include the Proxy Statement (as defined herein) or any preliminary proxy statement filed with the SEC.

 

“Subsidiary” means any corporation or other entity in which the Company owns or controls more than fifty percent (50%) of (i) the equity interests or (ii) the voting power of the voting equity securities of any such corporation or other entity.

 

2.             Subscription. Subject to the terms and conditions hereof, each Investor hereby irrevocably subscribes for the Securities set forth on Schedule 1 for the aggregate purchase price set forth on Schedule 1 (the aggregate purchase price of such Securities, the “Purchase Price”), which is payable as described in Section 4. The obligations of each Investor hereunder are several and not joint. Each Investor acknowledges that the Securities will be subject to restrictions on transfer as set forth in this Agreement. The number of Securities to be purchased by each Investor as identified on Schedule 1 shall be subject to adjustment based on the Reverse Split Ratio. By way of example, and for illustrative purposes only, if the “Number of Securities to be Acquired” column on Schedule 1 indicates that an Investor has subscribed for one hundred (100) shares of Common Stock (the “Pre-Reverse Split Securities”) and, subsequent to the date hereof and after obtaining Shareholder Approval, the Chairman of the Board determines the Reverse Split Ratio to be 1-for-10, the Pre-Reverse Split Securities will be adjusted so that the Investor is irrevocably bound to purchase ten (10) shares of Common Stock for the same Purchase Price. 

 

 

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3.             Acceptance of Subscription and Issuance of Securities. It is understood and agreed that the Company shall have the sole right, at its complete discretion, to accept or reject any Investor subscription (each, a “Subscription” and collectively, the “Subscriptions”), in whole or in part, for any reason and that the same shall be deemed to be accepted by the Company only when this Agreement is signed by a duly authorized officer of the Company and delivered to such Investor. Subscriptions need not be accepted in the order received, and the Securities may be allocated among subscribers. Notwithstanding anything in this Agreement to the contrary, the Company shall have no obligation to issue any of the Securities to any Person who is a resident of a jurisdiction in which the issuance of Securities to such Person would constitute a violation of the securities, “blue sky” or other similar laws of such jurisdiction (collectively referred to as the “State Securities Laws”).

 

4.             Payment and Settlement.

 

(a)     Signing. On or before 2:00 p.m., New York City time, on July 1, 2016, each Investor shall deliver to the Company a copy of this Agreement executed by a duly authorized officer of such Investor. The Company shall indicate its acceptance of such Subscription by providing each Investor with a countersigned copy of this Agreement on or before 5:00 p.m. New York City time July 1, 2016 (such date, the “Signing Date”).     Funding. On or prior to the first business day following the Special Meeting (as defined in Section 7) at 12:30 p.m. New York City time (the “Funding Date”), and upon satisfaction or waiver of all of the conditions to funding set forth in Sections 8 and 9, each Investor shall make payment for its Subscription to DNB Bank ASA as escrow agent (the “Escrow Agent”), by wire transfer of immediately available funds or other means approved by the Escrow Agent and the Company in the amount set forth on Schedule 1 under the column “Aggregate Purchase Price to be Paid” (such amount, the “Escrowed Funds”). Upon receipt by the Escrow Agent, the Escrowed Funds will be placed in a non-interest bearing escrow account pursuant to an escrow agreement (the “Escrow Agreement”) entered into by and among Fearnley Securities, Inc. (“Fearnley”), as representative of the Investors, the Company and the Escrow Agent, prior to the Funding Date in a form to be reasonably agreed to by and among Fearnley, the Company and the Escrow Agent. 

 

(c)     Closing. Subject to the termination provisions set forth in Section 10, the closing of the transactions contemplated hereby (the “Closing”) shall occur on the third business day after the satisfaction or waiver of all of the conditions set forth in Sections 8 and 9 (other than those conditions that by their nature are satisfied at the Closing), including the effectiveness of the Shareholder Approval, the Amendment, and the Reverse Split; or at such other time and date to be agreed between the Company and the Investors purchasing a majority of the Securities (such date and time of delivery and payment for the Securities being herein called, the “Closing Date”). 

 

 

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(d)     Settlement. At the Closing to effect the purchase and sale of the Securities, (i) the Escrow Agent shall pay to the Company the Escrowed Funds by wire transfer in immediately available U.S. federal funds to the account designated by the Company in writing in accordance with the terms of the Escrow Agreement (such payment to constitute payment in full by each Non-Defaulting Investor (as defined below) for its Subscription), (ii) the Company shall deliver, or cause to be delivered, to each Non-Defaulting Investor confirmation of recordation, in book-entry form, of the Securities with the Company’s transfer agent, such recordation to include a notation, in the form set forth in Section 7(h), that the Securities were sold in reliance upon an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), and (iii) the Company and each Investor shall deliver all other documents and certificates as required by this Agreement.

 

(e)     Defaulting Investor. If any Investor defaults in the payment of the applicable aggregate Purchase Price for such Investor’s Securities at the Funding Date (including if such Investor is unable or unwilling to pay the Purchase Price, in which case such Investor (a “Defaulting Investor”) shall notify the Company and each other Investor (each, a “Non-Defaulting Investor”) within three (3) business days prior to the Funding Date), the Non-Defaulting Investors may make arrangements reasonably satisfactory to the Company for the purchase of the Securities that were to be purchased by the Defaulting Investor by any of the Non-Defaulting Investors or by any other Person reasonably acceptable to the Company; provided, that such arrangements and purchase by any Non-Defaulting Investor or other Person shall in no way relieve such Defaulting Investor of any liability under this Agreement. Notwithstanding anything to the contrary herein, the Company may proceed with the Closing with any Non-Defaulting Investors and/or any other Person that pursuant to the previous sentence has agreed to purchase the Defaulting Investor(s) Subscriptions.

 

5.             Representations and Warranties of the Company. As of each of the Signing Date, the Funding Date, and the Closing Date, the Company represents and warrants that:

 

(a)     Organization. The Company and each of the Subsidiaries is duly incorporated or formed and validly existing and in good standing under the law of its jurisdiction of incorporation or formation. The Company and each of the Subsidiaries is duly qualified and in good standing as a foreign company in each other jurisdiction in which it owns or leases property or in which the conduct of its business requires it to be so qualified or licensed, except where the failure to be so qualified and in good standing would not, individually or in the aggregate, have or reasonably be expected to have a material adverse effect on the business, properties, financial condition, results of operations, or prospects of the Company and its Subsidiaries, taken as a whole (a “Material Adverse Effect”). 

 

 

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(b)     Authorization. The Company has all requisite power and authority to execute and deliver this Agreement and, after giving effect to the Shareholder Approval, the Amendment and the Reverse Split, to perform its obligations hereunder in accordance with the terms hereof. The execution, delivery and performance of this Agreement by the Company have been duly authorized by all necessary corporate action, including in compliance with Article ELEVENTH of the Articles of Incorporation. This Agreement has been duly executed and delivered by the Company, and this Agreement constitutes the legal, valid and binding obligation of the Company enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting the enforcement of creditors’ rights generally and by general equitable principles.

 

(c)     No Violation; Consents and Approvals. The execution and delivery by the Company of this Agreement does not, and the consummation by the Company of any of the transactions contemplated hereby and compliance by the Company with the terms, conditions and provisions hereof (including the offer and sale of the Securities by the Company) will not:

 

(i)     after giving effect to the Shareholder Approval, the Amendment and the Reverse Split, conflict with, violate, result (with the giving of notice or passage of time or both) in a breach of the terms, conditions or provisions of, or constitute a default, an event of default or an event creating rights of acceleration, termination or cancellation or a loss of rights under, or result in the creation or imposition of any Encumbrance upon any of the assets or properties of the Company or any Subsidiary under (A) the articles of incorporation or certificate of formation or the by-laws or limited liability company agreement, each as applicable, of the Company or any Subsidiary, (B) any note, instrument, agreement, contract, mortgage, lease, license, franchise, guarantee, permit or other authorization, right, restriction or obligation to which the Company or any Subsidiary is a party or any of their respective assets or properties is subject or by which the Company or any Subsidiary is bound, (C) any Court Order to which the Company or any Subsidiary is a party or any of their respective assets or properties is subject or by which the Company or any Subsidiary is bound, or (D) any Requirements of Law applicable to the Company or any Subsidiary or any of their respective assets or properties; or

 

(ii)     require the approval, consent, authorization or act of, or the making by the Company or any Subsidiary of any declaration, filing or registration with, any Person, including under the Securities Act or State Securities Laws, except for the Shareholder Approval, the filing of the Proxy Statement, the filing of an amendment of the Articles of Incorporation to give effect to the Amendment, the applicable reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the filing of a notice of an exempt offering on Form D for the transactions contemplated by this Agreement. 

 

 

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(d)     Capitalization. As of the Signing Date, the authorized capital stock of the Company consists of 150,000,000 shares of Common Stock, of which 45,707,479 shares are issued and outstanding, and all such outstanding shares of Common Stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable. After giving effect to the Shareholder Approval, the Amendment, and the Reverse Split, the Securities will be duly authorized, and when issued in accordance with this Agreement, (i) will be validly issued, fully paid and non-assessable and will be free and clear of any Encumbrances (other than, with respect to any Investor, any Encumbrances created by or through such Investor and restrictions on transfer imposed by the Securities Act, and applicable State Securities Laws) and each Investor will have good title thereto and (ii) will not have been issued in violation of any preemptive or subscription rights and, except for the anti-dilution provisions in the Company’s outstanding warrants and equity awards issued under the Company’s 2014 Equity Incentive Plan, will not result in the anti-dilution provisions of any security of the Company becoming applicable.

 

(e)     Compliance with Laws. 

 

(i)     The Company and each of the Subsidiaries is in compliance with all laws and regulatory requirements to which it is subject, including U.S. sanctions laws and the Foreign Corrupt Practices Act, 15 U.S.C. §78 et seq., as it may be amended from time to time, except for such non-compliance that (A) could not reasonably be expected to have a Material Adverse Effect or (B) occurs as a direct result of any proceedings or investigations directly with respect to the matters described under the section “Legal Proceedings” under Note 6 to the Company’s unaudited consolidated financial statements included in the Company’s Quarterly Report on Form 10-Q filed with the SEC for the period ended March 31, 2016.

 

(ii)     The Company shall not directly or, to the best of the Company’s knowledge (after due and careful inquiry) indirectly, use the proceeds of the sale of the Securities to be issued pursuant to this Agreement, or lend, contribute or otherwise make available such proceeds directly or, to the best of the Company’s knowledge (after due and careful inquiry) indirectly, to any subsidiary, joint venture partner or other person in any manner or for any purpose prohibited by U.S. economic or trade sanctions.

 

(f)     Private Offering. No form of general solicitation or general advertising was used by the Company, or to the knowledge of the Company, its authorized representatives, in connection with the offer or sale of the Securities to be issued under this Agreement. Assuming the accuracy of the representations and warranties of the Investors contained in Section 6, the issuance and sale of the Securities pursuant to this Agreement is exempt from the registration requirements of the Securities Act, and neither the Company nor, to the knowledge of the Company, any authorized representative acting on its behalf has taken or will take any action hereafter that would cause the loss of such exemption. The Company agrees that neither it, nor, anyone authorized to act on its behalf, shall offer to sell the Securities to be issued under this Agreement or any other securities of the Company so as to require the registration of the Securities being offered hereby pursuant to the provisions of the Securities Act or any State Securities Laws or “blue sky” laws, unless the offer and sale of the Securities to be issued under this Agreement or such other securities is so registered. Neither the Company nor to its knowledge any Affiliate of the Company, directly or indirectly through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of any security that is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act.

 

 

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(g)     No Restrictions on Common Stock. Except as expressly set forth in SEC Reports, (i) no Person has the right, contractual or otherwise, to cause the Company to issue or sell to it any shares of Common Stock or shares of any other capital stock or other equity interests of the Company and (ii) no Person has any purchase option, call option, preemptive rights, resale rights, subscription rights, rights of first refusal or other rights to purchase any shares of Common Stock or shares of any other capital stock of or other equity interests in the Company. 

 

(h)     No Manipulation. The Company has not taken and will not, in violation of applicable law, take any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of its stock to facilitate the sale or resale of the Securities. 

 

(i)     Independent Auditors. Each of (i) Deloitte & Touche LLP, whose audit report on the consolidated financial statements of the Company as of and for the year ended December 31, 2015 is included in the applicable SEC Report, and (ii) PricewaterhouseCoopers LLP, whose audit report on the consolidated financial statements of the Company as of December 31, 2014 and 2013 and for the periods from October 16, 2014 to December 31, 2014, and January 1, 2014 to October 15, 2014 and for the year ended December 31, 2013, is included in the applicable SEC Reports, is an independent registered public accountant as required by the Securities Act and by the rules of the Public Company Accounting Oversight Board. 

 

(j)     Disclosure. The Company is in compliance with its reporting requirements under Section 13 of the Exchange Act. The SEC Reports, when filed with the SEC (or in the case of registration statements, solely on the dates of effectiveness) (except to the extent corrected by a subsequent SEC Report), conformed in all material respects to the requirements of the Exchange Act or the Securities Act, as the case may be, and did not 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 light of the circumstances under which they were made, not misleading. There are no unresolved comment letters from the SEC in respect of any SEC Report. Except with respect to the material terms and conditions of the transactions contemplated hereby, and the anticipated use of proceeds from the sale of the Securities, which shall be publicly disclosed by the Company pursuant to the Exchange Act, the Company confirms that neither it nor any person acting on its behalf has provided any Investor with any other information that the Company believes constitutes material, non-public information. The Company understands that the Investors will rely on the foregoing representations in effecting transactions in the securities of the Company.

 

 

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(k)     Financial Statements. The historical audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (the “Audited Financial Statements”) and the historical unaudited consolidated financial statements included in the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2016 (the “Interim Financial Statements” and, together with the Audited Financial Statements, the “Financial Statements”), present fairly in all material respects the financial position of the Company and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and such financial statements have been prepared in all material respects in conformity with the generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis for the periods shown (except as otherwise noted in the Financial Statements, including changes resulting from the Company’s adoption of “fresh-start” accounting principles effective as of October 16, 2014, and except in the case of the Interim Financial Statements, as permitted for Quarterly Reports on Form 10-Q, and that such Interim Financial Statements are subject to normal recurring year-end adjustments in the ordinary course of business).

 

(l)     Investment Company; Passive Foreign Investment Company. The Company is not and, after giving effect to the offer and sale of the Securities will not be an “investment company,” required to register under the Investment Company Act of 1940, as amended. The Company does not believe that it is a “passive foreign investment company” as such term is defined in the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder (the “Code”).

 

(m)     Title to Real and Personal Property. The Company and each of the Subsidiaries has, and with such exceptions as are described in the SEC Reports or are not material and do not interfere with the intended use to be made of such property by the Company and its Subsidiaries, (i) in the case of owned real property, good and marketable fee title to and (ii) in the case of owned personal property, good and valid title to, or, in the case of leased real or personal property, valid and enforceable leasehold interests (as the case may be) in, all of its properties and assets, tangible and intangible, of any nature whatsoever, and (iii) and in the case of all such property that constitutes collateral under the secured loan agreements of Eagle Shipping LLC, as borrower, free and clear in each case of all Security Interests (as defined in the secured loan agreements) or claims, except for Permitted Security Interests (as defined in the secured loan agreements).

 

(n)     No Labor Disputes; ERISA. To the Company’s knowledge, neither the Company nor any of its Subsidiaries is currently engaged in any unfair labor practice under the National Labor Relations Act. Except for matters which would not, individually or in the aggregate, have a Material Adverse Effect, (i) there is (A) no unfair labor practice complaint pending or, to the Company’s knowledge, threatened against the Company or any of its Subsidiaries before the National Labor Relations Board, and no grievance or arbitration proceeding is currently pending (or to the Company’s knowledge, threatened) that arises out of or under any collective bargaining agreements the Company has with its employees, (B) no strike, labor dispute, material work slowdown or stoppage pending or, to the Company’s knowledge, threatened against the Company or any of its Subsidiaries and (C) no union representation dispute currently existing concerning the employees of the Company or any of its Subsidiaries, and (ii) to the Company’s knowledge, (A) no material union organizing activities are currently taking place concerning the employees of the Company or any of its Subsidiaries, (B) there is no current material violation of any applicable federal, state, local or foreign law relating to the Company’s employment practices, including laws relating to collective bargaining, disability discrimination and reasonable accommodations, immigration, health and safety, discrimination in the hiring, promotion or pay of employees, workers compensation and the collection and payment of withholding and/or payroll taxes and similar taxes, any applicable wage or hour laws or any provision of the Employee Retirement Income Security Act of 1974, as amended, or the rules and regulations promulgated thereunder (“ERISA”) concerning the employees of the Company or any of its Subsidiaries and (C) the Company and its Subsidiaries are in compliance in all material respects with obligations of the Company and its Subsidiaries, as applicable, under any employment agreement, severance agreement or similar written employment-related agreement that is currently in effect. Except for matters which would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect, (A) no material liability under Title IV of ERISA or Section 412 of the Code has been incurred during the past six years by the Company or any of its Subsidiaries with respect to any ongoing, frozen or terminated defined benefit pension plan maintained by the Company, its Subsidiaries or any ERISA Affiliate, (B) no material liability with respect to any withdrawal from any “multiemployer plan” within the meaning of Section 3(37) of ERISA has been or is expected to be incurred by the Company or any its Subsidiaries or any ERISA Affiliate, and (C) the Company and its Subsidiaries have complied, in all material respects, with the terms of each “employee benefit plan” within the meaning of Section 3(3) of ERISA that the Company or its Subsidiaries sponsors or maintains and the requirements under ERISA applicable to each such employee benefit plan.

 

 

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(o)     Compliance with Environmental Laws. Except to the extent the failure to comply with the following could not reasonably be expected to have a Material Adverse Effect, (i) the operations of the Company and its Subsidiaries comply with all applicable Environmental Laws, all necessary Environmental Permits have been obtained and are in effect for the operations and properties of each of the Company and its Subsidiaries and each of the Company and its Subsidiaries is in compliance in all material respects and (ii) neither the Company nor any of its Subsidiaries has received any notice in writing by any Person that it or any of its Subsidiaries or Affiliates is potentially liable for the remedial or other costs with respect to treatment, storage, disposal, release, arrangement for disposal or transportation of any Environmentally Sensitive Material, except for costs incurred in the ordinary course of business with respect to treatment, storage, disposal or transportation of such Environmentally Sensitive Material.

 

(p)     Taxes. All income and other material tax returns required to be filed by the Company or any of its Subsidiaries have been timely filed, all such tax returns are complete and correct in all material respects, and all taxes and other material assessments of a similar nature (whether imposed directly or through withholding), including any interest, additions to tax or penalties applicable thereto due or claimed to be due from such entities, have been timely paid, other than those being contested in good faith and for which adequate reserves have been provided. To the Company’s knowledge, (i) there are no pledges, liens, charges, mortgages, encumbrances or security interests of any kind or nature whatsoever with respect to taxes upon any of the assets or properties of either the Company or its Subsidiaries other than with respect to taxes not yet due and payable and (ii) no material deficiencies for any taxes have been proposed or assessed in writing against or with respect to any taxes due by or tax returns of the Company or any of its Subsidiaries, and there is no outstanding audit, assessment, dispute or claim concerning any material tax liability of the Company or any of its Subsidiaries.

 

 

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(q)     Insurance. The Company and its Subsidiaries maintain for its or their benefit, insurance or a membership in a mutual protection and indemnity association covering its properties, operations, personnel and businesses in such amounts, and of the type, as deemed adequate by the Company; such insurance or membership insures or will insure against such losses and risks to an extent which is adequate in accordance with customary industry practice to protect the vessels owned by the Company (each, a Vessel” and collectively, the “Vessels”) and, in the case of insurance or a membership maintained by or for the benefit of the Company and its Subsidiaries, their businesses; any such insurance or membership maintained by or for the benefit of the Company and its Subsidiaries is and will be fully in force; there are no material claims by the Company or any subsidiary under any insurance policy or instrument as to which any insurance company or mutual protection and indemnity association is denying liability or defending under a reservation of rights clause; neither the Company nor any of its Subsidiaries is currently required to make any material payment, or is aware of any facts that would require the Company or any subsidiary to make any material payment, in respect of a call by, or a contribution to, any mutual protection and indemnity association; and neither the Company nor any subsidiary has reason to believe that it will not be able to renew or cause to be renewed for its benefit any such insurance or membership in a mutual protection and indemnity association as and when such insurance or membership expires or is terminated.

 

(r)     Absence of Changes. Since March 31, 2016, (the “Reference Date”), except for such matters which would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect, (i) there has not been a partial loss or total loss of the Vessels, whether actual or constructive, that is not otherwise covered by insurance, (ii) no Vessel has been arrested or requisitioned for title or hire and (iii) neither the Company nor any of its Subsidiaries has sustained any loss or interference with its respective business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree. The Company and its Subsidiaries have conducted their business in the ordinary course consistent with past practice in all material respects. Without limiting the generality of the foregoing, since the Reference Date, none of the Company and its Subsidiaries has (except as disclosed in the SEC Reports or other than any transaction contemplated by this Agreement or the Amendment, Shareholder Approval and Reverse Split): (i) amended its articles of incorporation, by-laws or other organizational documents; (ii) adopted a plan or agreement of liquidation, dissolution, restructuring, merger, consolidation, recapitalization or other reorganization; (iii) issued any note, bond or other debt security or right to acquire any debt security, incurred or guaranteed any indebtedness or entered into any “keep well” or other agreement to maintain the financial condition of another person or other arrangement having the economic effect of actions any of the foregoing; (iv) entered into or consummated any transaction involving the acquisition (including, by merger, consolidation or acquisition of the business, stock or assets or other business combination) of any Person (other than in the ordinary course of business or any transaction among the Subsidiaries of the Company); (v) changed any of its material accounting policies or practices, except as required as a result of a change in GAAP; or (vi) agreed or committed to do any of the foregoing.

 

 

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(s)     No Undisclosed Liabilities. The Company and its Subsidiaries do not have any obligation or liability (“Liabilities”) required by GAAP to be recognized on a condensed consolidated statement of financial position of the Company, except (i) as reflected, reserved or disclosed in the Interim Financial Statements (or the notes thereto) included in the SEC Reports as at and for the period ended March 31, 2016, (ii) as incurred since the Reference Date in the ordinary course of business or as have been otherwise disclosed in the SEC Reports, (iii) as have been discharged or paid in full in the ordinary course of business since the Reference Date, (iv) as incurred in connection with the transactions contemplated by this Agreement, (v) that are obligations to perform pursuant to the terms of any of material contracts and (vi) as would not constitute a Material Adverse Effect.

 

(t)     Accounting Controls. Other than as disclosed in the SEC Reports, each of the Company and its Subsidiaries maintains a system of internal accounting controls to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

(u)     Disclosure Controls. Other than as disclosed in the SEC Reports, (a) the Company has established and maintains and evaluates “disclosure controls and procedures” (as such term is defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act); (b) such disclosure controls and procedures are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company’s Chief Executive Officer and its Chief Financial Officer by others within those entities, and such disclosure controls and procedures are effective to perform the functions for which they were established; and (c) the Company’s auditors and the Board have been advised of: (i) any significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial data and (ii) any fraud, whether or not material, that involves management or other employees who have a role in the Company’s internal controls. As of the date hereof, the Company has no knowledge of any reason that its outside auditors and its Chief Executive Officer and Chief Financial Officer shall not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, without qualification, when next due. To date, the Company’s auditors have not identified any material weaknesses in internal controls, and since the date of the most recent evaluation of such disclosure controls and procedures, there have been no changes in internal controls or in other factors within control of the Company that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls. The Company, its Subsidiaries and their respective officers and directors, in their capacities as such, are in compliance in all material respects with the provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder that are applicable to the Company, its Subsidiaries or such officers and directors, including Section 402 related to loans and Sections 302 and 906 related to certifications.

 

 

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(v)     Contracts. None of the contracts or agreements (which, for the avoidance of doubt, do not include any filings under Item 601(b)(3) of Regulation S-K under the Securities Act) filed as an exhibit to the Company’s Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2015, or any Form 10-Q or Form 8-K subsequent thereto, have been terminated, materially amended, modified, supplemented or waived, except as disclosed in the SEC Reports or except as are required to be filed under Item 601 of Regulation S-K and have terminated in accordance with their terms; neither the Company nor any Subsidiary has sent or received any communication regarding the termination, amendment, modification, supplementation or waiver of, or an intention to terminate, materially amend, modify, supplement or waive, or not to consummate any transaction contemplated by, any such contract or agreement; and no such termination, amendment, modification, supplementation or waiver, or intention to terminate, amend, modify, supplement or waive, or not to consummate any transaction contemplated by, any such contract or agreement has been threatened by the Company or any Subsidiary or, to the Company’s knowledge, any other party to any such contract or agreement.

 

(w)     No Restrictions on Subsidiaries. No subsidiary is currently prohibited, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s property or assets to the Company or any other subsidiary of the Company, except as described in the SEC Reports; all dividends and other distributions declared and payable on the shares of Common Stock of the Company and on the capital stock of each Subsidiary may under the current laws and regulations of the Marshall Islands be paid in United States dollars and freely transferred out of the Marshall Islands; and all such dividends and other distributions are not subject to withholding or other taxes under the current laws and regulations of the Marshall Islands and are otherwise free and clear of any withholding or other tax and may be declared and paid without the necessity of obtaining any consents, approvals, authorizations, orders, licenses, registrations, clearances and qualifications of or with any court or governmental agency or body or any stock exchange authorities in the Marshall Islands.

 

(x)     Company Acknowledgement of Investor Representation. The Company acknowledges and agrees that no Investor makes, nor has any Investor made, any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Sections 6 and 7 and in the Investor Questionnaire. 

 

 

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6.             Representations and Warranties of the Investors. As an inducement to the Company to enter into this Agreement and to consummate the transactions contemplated hereby, each Investor, severally and not jointly, represents and warrants, as of each of the Signing Date, the Funding Date and the Closing Date, as follows:

 

(a)     Organization. Such Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized.

 

(b)     Authorization. Such Investor has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder in accordance with the terms hereof. This Agreement has been, and at or prior to the Closing will have been, duly executed and delivered by such Investor, and constitutes the legal, valid and binding obligation of such Investor, enforceable against such Investor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting the enforcement of creditors’ rights generally and by general equitable principles.

 

(c)     No Consents Required. No approval, authorization, consent or order of or filing with any federal, state, local or foreign government or regulatory commission, board, body, authority or agency, or of or with any self-regulatory organization, or other non-governmental regulatory authority (including any national securities exchange), is required in connection with the execution, delivery and performance of this Agreement by such Investor or the consummation by such Investor of the transactions contemplated hereby, except for such approvals, authorizations, consents, orders or filings that have been obtained or made and are in full force and effect.

 

(d)     No Violation. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not conflict with, result in any breach or violation of or constitute a default under (or constitute any event which with notice, lapse of time or both would result in any breach or violation of or constitute a default under or give the holder of any indebtedness (or a Person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a part of such indebtedness under) (or result in the termination of, or in the creation or imposition of a lien, charge or Encumbrance on any property or assets of such Investor pursuant to) (i) the organizational or other governing documents of such Investor, (ii) any indenture, mortgage, deed of trust, bank loan or credit agreement or other evidence of indebtedness, or any license, lease, contract or other agreement or instrument to which such Investor is a party or by which such Investor or any of its properties may be bound or affected, (iii) any federal, state, local or foreign law, regulation or rule, (iv) any rule or regulation of any self-regulatory organization or other non-governmental regulatory authority (including any national securities exchange) or (v) any Court Order applicable to such Investor or any of its properties, except in the case of the foregoing clauses (ii), (iii), (iv) and (v) as would not individually or in the aggregate, materially and adversely affect such Investor’s ability to perform its obligations under this Agreement or consummate the transactions contemplated herein on a timely basis.

 

 

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(e)     Financial Capability. At the Funding Date, the Investor will have available funds necessary to consummate the Closing on the terms and conditions contemplated by this Agreement. 

 

(f)     Accredited Investor and Qualified Institutional Buyer. 

 

(i)     Such Investor is acquiring the Securities to be issued under this Agreement to such Investor for its own account, not as nominee or agent, with the present intention of holding such securities for purposes of investment, and not with the view to the public resale or distribution of any part thereof, and such Investor has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the U.S. federal securities laws or any applicable State Securities Laws or “blue sky” laws. Such Investor is purchasing and holding any purchased Securities for its own account and is not party to any co-investment, joint venture, partnership or other understandings or arrangements with any other party relating to the Securities or any other transactions contemplated hereunder. 

 

(ii)     Such Investor is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act or a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act or, in the case of an Investor that is a non-U.S. Investor, is an entity acting on its own account that in the aggregate owns and invests on a discretionary basis at least $100 million of securities of issuers that are not affiliated with such Investor. 

 

(iii)     Such Investor acknowledges that it has completed the Investor Questionnaire contained in Appendix A and that the information contained therein is complete and accurate as of the date thereof and is hereby affirmed as of each of the Signing Date, the Funding Date and the Closing Date. Any information that has been furnished or that will be furnished by such Investor to evidence its status as an accredited investor is accurate and complete, and does not contain any misrepresentation or material omission.

 

(iv)      Such Investor has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Company, and has so evaluated the merits and risks of such investment, and understands that it may be required to bear the risks thereof. Such Investor has previously invested in securities similar to the Securities and fully understands the limitations on transfer and restrictions on sales of the Securities. Such Investor represents that it is able to bear the economic risk of its investment in the Securities and is able to afford the complete loss of any such investment. 

 

 

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(v)     Such Investor has conducted its own independent evaluation, made its own analysis and consulted with advisors as it has deemed necessary, prudent, or advisable in order for such Investor to make its own determination and decision to enter into the transactions contemplated by this Agreement and to execute and deliver this Agreement.

 

(vi)     Such Investor is familiar with the business and financial condition and operations of the Company. Such Investor has adequate information concerning the Company and the Securities to enable it to evaluate the transactions contemplated by this Agreement and to make an informed investment decision concerning the Securities, and such Investor has had the opportunity to discuss such information with a representative of the Company and to obtain and review information reasonably requested by such Investor. 

 

(vii)     Such Investor is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or, to such Investor’s knowledge, any other general solicitation or general advertisement. Neither such Investor nor its Affiliates or any person acting on its or any of their behalf has engaged, or will engage, in any form of general solicitation or general advertising (within the meaning of Rule 502(c) under the Securities Act) in connection with the offering of the Securities. 

 

(g)     Additional Investor Status.

 

(i)     Such Investor, other than any Non-EEA Investor, is (a) a “qualified investor” as such term is defined in Article 2(1)(e) of Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU) (the “Prospectus Directive”); or (b) investing on their own account, and not on behalf of any other person. A “Non-EEA Investor” means an Investor who is located in a country that is not a European Economic Area country. 

 

(ii)     Any such Investor is a person who: (i) has professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”); (ii) falls within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations, etc.”) of the Financial Promotion Order; (iii) is outside the United Kingdom; or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the investment may otherwise lawfully be communicated or caused to be communicated.

 

(h)     No Broker’s Fees. No brokerage or finder’s fees or commissions are or will be payable by such Investor or any of its Affiliates or subsidiaries (if applicable) to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the issuance of the Securities, and such Investor has not taken any action that could cause the Company to be liable for any such fees or commissions. The Investor is not a broker-dealer registered with the SEC under the Exchange Act or an entity engaged in a business that would require it to be so registered.

 

 

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(i)     Compliance with Law. Such Investor will comply with all applicable laws and regulations in effect in any jurisdiction in which such Investor purchases or sells Securities and obtain any consent, approval or permission required for such purchases or sales under the laws and regulations of any jurisdiction to which such Investor is subject or in which the Investor makes such purchases or sales, and the Company shall have no responsibility therefor.

 

(j)     Advisors. Such Investor acknowledges that, prior to entering into this Agreement, it was advised by Persons deemed appropriate by the Investor concerning this Agreement and the transactions contemplated hereunder and conducted its own due diligence investigation and made its own investment decision with respect to this Agreement, the transactions contemplated hereunder and the purchase of the Securities. Such Investor understands that Fearnley has acted solely as the agent of the Company in this private placement of the Securities and that Fearnley makes no representation or warranty with regard to the merits of the transactions contemplated by this Agreement or as to the accuracy of any information the Investor may have received in connection therewith, including any materials prepared by Fearnley in reliance on the Company’s publicly available information. Such Investor acknowledges that it has not relied on any information or advice furnished to it by or on behalf of Fearnley. 

 

(k)     Arm’s Length Transaction. Such Investor is acting solely in the capacity of an arm’s length contractual counterparty to the Company with respect to the transactions contemplated hereby. Additionally, without derogating from or limiting the representations and warranties of the Company, the Investor (A) is not relying on the Company for any legal, tax, investment, accounting or regulatory advice; (B) has consulted with its own advisors concerning such matters; and (C) shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby.

 

(l)     No Further Reliance. Such Investor acknowledges that it is not relying upon any representation or warranty made by the Company that is not set forth in this Agreement. Such Investor confirms that the Company has not (i) given any guarantee or representation as to the potential success, return, effect or benefit (either legal, regulatory, tax, financial, accounting or otherwise) of an investment in the Securities or (ii) made any representation to such Investor regarding the legality of an investment in the Securities under applicable legal investment or similar laws or regulations. Such Investor confirms that (i) it has conducted a review and analysis of the business, assets, condition, operations and prospects of the Company and its Subsidiaries, and the terms of the Securities, and has access to such financial and other information regarding the Company, in each case that such Investor considers sufficient for purposes of the purchase of the Securities; (ii) at a reasonable time prior to its purchase of the Securities, it had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Securities and to obtain additional information necessary to verify any information furnished to such Investor or to which such Investor had access; and (iii) it has not received any offering memorandum or offering document in connection with the offering of the Securities. Such Investor further confirms that it is not relying on any communication (written or oral) of Fearnley, the Company or any of its Affiliates, as investment advice or as a recommendation to purchase the Securities. It is understood that information and explanations related to the terms and conditions of the Securities provided by Fearnley, the Company or any of its Affiliates shall not be considered investment advice or a recommendation to purchase the Securities, and that none of Fearnley, the Company or any of its Affiliates is acting or has acted as an advisor to such Investor in deciding to invest in the Securities. Such Investor acknowledges that none of Fearnley, the Company or any of its Affiliates has made any representation regarding the proper characterization of the Securities for purposes of determining such Investor authority to invest in the Securities. Such Investor acknowledges that the Company has the right in its sole and absolute discretion to abandon this private placement at any time prior to the Signing Date.

 

 

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(m)     Private Placement. Such Investor understands and acknowledges that: 

 

(i)     The Securities that it is acquiring under this Agreement are being sold pursuant to an exemption from registration under the Securities Act, including Regulation D promulgated thereunder.

 

(ii)     Its representations and warranties contained herein are being relied upon by the Company as a basis for such exemption under the Securities Act and under the securities laws of various other foreign and domestic jurisdictions. Such Investor further understands that, unless it notifies the Company in writing to the contrary at or before the Signing Date, the Funding Date, or the Closing Date, as the case may be, each of such Investor’s representations and warranties contained in this Agreement will be deemed to have been automatically (and without any further action of the Investor) reaffirmed and confirmed as of the Signing Date, the Funding Date, or the Closing Date, as applicable, taking into account all information received by the Investor.

 

(iii)     No U.S. state or federal agency or any other securities regulator of any state or country has passed upon the merits or risks of an investment in the Securities or made any finding or determination as to the fairness of the terms of the offering of the Securities or any recommendation or endorsement thereof. 

 

(iv)     The Securities are “restricted securities” under applicable federal securities laws and that the Securities Act and the rules of the SEC provide in substance that the Investor may dispose of the Securities only pursuant to an effective registration statement under the Securities Act or an exemption therefrom, and the Investor understands that the Company has no obligation, other than as disclosed in the SEC Reports, or intention to register any of the Securities, or to take action so as to permit sales pursuant to the Securities Act (including Rule 144 thereunder). Accordingly, the Investor understands that under the SEC’s rules, the Investor may dispose of the Securities principally only in “private placements” that are exempt from registration under the Securities Act, in which event the transferee will acquire “restricted securities” subject to the same limitations as in the hands of the Investor. Consequently, the Investor understands that the Investor must bear the economic risks of the investment in the Securities for an indefinite period of time. The Investor will not sell, assign, pledge, give, transfer or otherwise dispose of the Securities or any interest therein, or make any offer or attempt to do any of the foregoing, except pursuant to a registration of the Securities under the Securities Act and all applicable State Securities Laws, or in a transaction which is exempt from the registration provisions of the Securities Act and all applicable State Securities Laws. Such Investor understands that that the recordation of the Securities in book-entry form will include a legend substantially in the form indicated in Section 7 (which such Investor has read and understands), and that the Company and its Affiliates shall not be required to give effect to any purported transfer of such Securities except upon compliance with the foregoing restrictions.

 

 

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(n)     No ERISA Plans.  Either (a) such Investor is not purchasing or holding Securities (or any interest in Securities) with the assets of (i) an employee benefit plan that is subject to Title I of ERISA, (ii) a plan, individual retirement account or other arrangement that is subject to Section 4975 of the Code, (iii) an entity whose underlying assets are considered to include “plan assets” of any of the foregoing by reason of such plan’s, account’s or arrangement’s investment in such entity, or (iv) a governmental, church, non-U.S. or other plan that is subject to any similar laws; or (b) the purchase and holding of such Securities by such Investors, throughout the period that it holds such Securities, and the disposition of such Securities or an interest therein will not constitute (x) a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, (y) a breach of fiduciary duty under ERISA or (z) a similar violation under any applicable similar laws.

 

7.             Additional Agreements.

 

(a)     Conduct Prior to Closing. From and after the Signing Date until the earlier of the Closing Date and the date on which this Agreement is terminated, the Company covenants and agrees as to itself and its Subsidiaries not to take any action that is intended or would reasonably be expected to result in any condition in Sections 8 and 9 not being satisfied. Each Investor hereby covenants and agrees to notify the Company upon the occurrence of any event prior to the Closing Date which would cause any representation, warranty, or covenant of the Investors contained in this Agreement to be false or incorrect.

 

(b)     NASDAQ Listing. The Company shall as promptly as practicable after the Signing Date (and prior to the Closing Date) apply to cause the Securities to be issued on the Closing Date to be approved for listing on the NASDAQ Global Select Market, subject to official notice of issuance. 

 

(c)     Proxy Statement; Shareholders’ Meeting; Voting Agreement. (A) The Company agrees (i) to promptly prepare and/or include in an amended proxy statement to the preliminary proxy statement filed with the SEC on May 3, 2016 (the “Proxy Statement”) to be sent to the Company’s shareholders in connection with a special meeting of holders of the Company’s Common Stock (the “Special Meeting”), to be held for the purpose of seeking the Shareholder Approval described herein (including the proposal soliciting the approval of the holders of the Common Stock to permit the issuance of the Securities pursuant to NASDAQ Marketplace Rule 5635(d) and 5635(c)) and for such other purposes within the sole discretion of the Company, (ii) to call and hold the Special Meeting no later than the date that is 60 days after the Signing Date, in compliance with applicable law, the Articles of Incorporation, the Company’s by-laws and the NASDAQ Marketplace Rules, and (iii) to use its reasonable best efforts to obtain the Shareholder Approval at the Special Meeting and effect the Amendment and the Reverse Split. (B) Each Investor hereby severally agrees with the Company that it shall, and shall cause its Affiliates (including by proxy, if applicable), to vote all shares of Common Stock held by it or its Affiliates and eligible to be voted in accordance with applicable law and the NASDAQ Marketplace Rules in favor of the proposals contemplated by the Shareholder Approval at the Special Meeting. From the Signing Date through the completion of the Special Meeting (or an adjournment thereof), each Investor severally agrees that it shall not, and shall cause each of its Affiliates not to, transfer, sell, gift, pledge or otherwise dispose of its respective shares of Common Stock unless the transferee of such shares of Common Stock agrees in writing prior to any transfer, sale, gift, pledge or other disposition to vote in favor of the proposal contemplated by the Shareholder Approval. Any attempt to transfer shares of Common Stock that does not comply with the provisions of the immediately preceding sentence shall be null and void ab initio.

 

 

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(d)     Investor Information. Each Investor shall promptly provide the Company such information as the Company may reasonably request in connection with the preparation, filing and distribution of the Proxy Statement. Until the completion of the Special Meeting, each Investor shall promptly correct any information supplied by it for inclusion, or incorporation by reference, in the Proxy Statement if, and to the extent, any such previously provided information shall, at that time, include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading.

 

(e)     Use of Proceeds. The Company will use the net proceeds received by it from the sale of the Securities for acquisition of dry bulk tonnage and general corporate purposes.

 

(f)     Existence and Compliance. The Company and each Subsidiary will maintain their respective existence, good standing and qualification to do business where required and comply with all agreements, instruments, judgments, laws, regulations and governmental requirements, applicable to them or to any of their respective properties, business operations and transactions, except for such non-compliance with this Section 7 that could not reasonably be expected to have a Material Adverse Effect, and provided that nothing in this Section 7 shall prevent the merger of a Subsidiary into the Company or another Subsidiary. 

 

(g)     Short Selling Acknowledgement and Agreement. Each Investor understands and acknowledges, severally and not jointly with any other Investor, that the SEC currently takes the position that coverage of Short Sales of securities “against the box” prior to the effective date of a registration statement is a violation of Section 5 of the Securities Act and of Securities Act Compliance Disclosure Interpretation 239.10. Each Investor agrees, severally and not jointly that it will abide by such interpretation and will not engage in any Short Sales that result in the disposition of the Securities acquired hereunder by such Investor until such time as a resale registration statement is declared or deemed effective by the SEC or such Securities are no longer subject to any restrictions on resale. “Short Sales” means all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, whether or not against the box, and forward sale contracts, options, puts, calls, short sales, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and similar arrangements, and sales and other transactions through non-U.S. broker dealers or foreign regulated brokers.

 

 

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(h)     Legend. The book-entry account maintained by the transfer agent evidencing ownership of the Securities sold pursuant to this Agreement will bear the following restrictive legend in substantially the following form: 

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR RULE 904 UNDER THE SECURITIES ACT, PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUER SO REQUESTS), OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT.”

 

(i)     Side Letters. The Company shall be entitled to enter into side letters or side arrangements in relation to an Investor’s investment in the Company contemplated by this Agreement (collectively, the “Side Letters”). Any Side Letters entered into with any Investor shall be disclosed to all Investors. If the Company enters into any Side Letter with an Investor, subject to the proviso in the next sentence, each Investor may elect to receive the rights and benefits granted under such Side Letter entered into before, on or after the date hereof that has the effect of establishing rights or otherwise benefiting the Investor that is a party thereto in a manner more favorable in any respect than the rights and benefits established in favor of such Investor by this Agreement or any Side Letter. Such election shall be made by the Investor by written notice to the Company within thirty (30) calendar days following the receipt of a copy of such Side Letter. Notwithstanding anything to the contrary contained herein, this Section shall not apply to provisions in any Side Letter dealing with the specific legal, tax or regulatory status of any Investor unless such specific legal, tax or regulatory status also applies to the Investor electing for such provision.

 

 

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8.             Conditions to Obligations of the Company. The obligations of the Company to sell and issue the Securities being sold and issued by it to any Investor on the Closing Date is subject to the fulfillment on or before the Funding Date or the Closing Date, as applicable, of the following conditions, any of which may be waived (in whole or in part) by the Company in its sole discretion:

 

(a)     Shareholder Approval. Prior to the Funding Date, the Shareholder Approval shall have been obtained. 

 

(b)     Amendment to the Articles of Incorporation. Prior to the Closing Date, the Amendment shall have been filed with the Registrar of Corporations of the Republic of the Marshall Islands (the “Registrar”) and evidence of the acceptance and effectiveness of such filing provided by the Registrar.

 

(c)     Reverse Split. Prior to the Closing Date, the Reverse Split shall have been effected.

 

(d)     No Injunction. As of the Signing Date, the Funding Date, and the Closing Date, no Governmental Body nor any other Person shall have issued an order, injunction, judgment, decree, ruling or assessment which shall then be in effect restraining or prohibiting the completion of the transactions contemplated by this Agreement, nor to the Company’s knowledge, shall any such order, injunction, judgment, decree, ruling or assessment be threatened or pending.

 

(e)     Securities Law Compliance. The offer and sale of the Securities to the Investors pursuant to this Agreement shall be exempt from the registration requirements of the Securities Act and the registration and/or qualification requirements of all applicable state securities laws.

 

(f)     Purchase Price Paid. Such Investor shall have paid the Purchase Price to the Escrow Agent in the amount set forth on Schedule 1 on the Funding Date and the Company shall have received the Purchase Price from the Escrow Agent.

 

(g)      Covenants and Agreements. Such Investor shall have performed and complied with the covenants and agreements required to be performed or complied with by such Investor hereunder on or prior to the Closing Date.

 

(h)     Representations and Warranties. The representations and the warranties of such Investor contained in this Agreement shall be true and correct as of the Signing Date, the Funding Date, and the Closing Date, with the same effect as though such representations and warranties had been made on and as of such date.

 

9.             Conditions to Obligations of the Investors. The obligation of each Investor to pay the Company the Purchase Price (and cause the Escrow Agent to release to the Company the Purchase Price) in respect of the Securities to be issued under this Agreement to such Investor in accordance with Schedule 1 is subject to the fulfillment to the reasonable satisfaction of, or, to the extent permitted by law, waiver by, such Investor prior to the Signing Date, the Funding Date, or the Closing Date, as the case may be, each of the following conditions: 

 

 

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(a)     Shareholder Approval. Prior to the Funding Date, the Shareholder Approval shall have been obtained. 

 

(b)      Amendment to the Articles of Incorporation. Prior to the Closing Date, the Amendment shall have been filed with the Registrar and evidence of the acceptance and effectiveness of such filing provided by the Registrar.

 

(c)     Reverse Split. Prior to the Closing Date, the Reverse Split shall have been effected.

 

(d)     Covenants and Agreements. The Company shall have performed and complied in all material respects with the covenants and agreements required to be performed or complied with by it hereunder on or prior to the Signing Date, the Funding Date, or the Closing Date, as applicable. 

 

(e)     Legal Opinions. On the Closing Date, the Investors shall have received an opinion from Akin Gump Strauss Hauer & Feld LLP substantially in the form of Schedule 2 and an opinion from Seward & Kissel LLP substantially in the form of Schedule 3.

 

(f)     Officer’s Certificate. The Investors shall have received a certificate, signed by an authorized officer of the Company, certifying to the applicable matters set forth in this Section 9, in a form a substance reasonably satisfactory to the Investors. 

 

(g)     Secretary’s Certificate. The Investors shall have received a customary secretary’s certificate certifying as to (i) the Articles of Incorporation and by-laws, (ii) board resolutions authorizing this Agreement and the documents and transactions contemplated hereby, including the issuance and sale of the Securities to the Investors, and (iii) its incumbent officers authorized to execute such documents to which the Company is a party, setting forth the name and title bearing the signatures of such officers. 

 

(h)     No Injunction. No Governmental Body or any other Person shall have issued an order, injunction, judgment, decree, ruling or assessment which shall then be in effect restraining or prohibiting the completion of the transactions contemplated by this Agreement, nor to the Company’s knowledge, shall any such order, injunction, judgment, decree, ruling or assessment be threatened or pending.

 

(i)     No Delisting Notice. Other than as disclosed in the SEC Reports, no additional notice of delisting from The NASDAQ Stock Market LLC shall have been received by the Company respect to its Common Stock.

 

(j)     Representations and Warranties. The representations and the warranties of the Company contained in this Agreement shall be true and correct in all material respects as of the Signing Date, the Funding Date, and the Closing Date, except with respect to provisions including the terms “material,” “Material Adverse Effect” or words of similar import and except with respect to materiality, as reflected under GAAP, in the representations and warranties contained in Section 5(k) relating to the financial statements, with respect to which such representations and warranties shall be true and correct at and as of the applicable date, with the same effect as though such representations and warranties had been made on and as of such date, except that representations and warranties made as of a specified date need be true and correct only as of that date.

 

 

22

 

 

(k)     No Material Adverse Effect. No Material Adverse Effect shall have occurred since the Signing Date and prior to the Closing Date.

 

10.           Termination. 

 

(a)     Termination and Effects. This Agreement may be terminated on an Investor-by-Investor basis (i) by mutual consent between the Company and such Investor evidenced in writing and (ii) by such Investor or the Company if the Closing does not occur on or before the date that is ten (10) business days following the Company’s Special Meeting, provided that the party seeking to terminate this Agreement pursuant to this Section 10 shall not have breached in any material respects its representations, warranties or covenants set forth in this Agreement. If this Agreement is terminated by either the Company or an Investor pursuant to the provisions of this Section 10, this Agreement with respect to the Company and such Investor shall forthwith become void and there shall be no further obligations on the part of the Company or such Investor or their respective stockholders, directors, officers, employees, agents or representatives, except for the provisions of Section 11, which shall survive any termination of this Agreement; provided, however, that nothing in this Section 10 shall relieve any party from liability for any breach of any representation, warranty, covenant, or agreement under this Agreement prior to such termination or for any willful breach of this Agreement. 

 

(b)     Extension; Waiver. At any time prior to any applicable compliance time (including the termination provisions set forth herein) the Company and any Investor may (a) extend the time for the performance of any of the obligations or other acts of the Company or such Investor, respectively, (b) waive any inaccuracies in the representations and warranties contained herein and (c) waive compliance with any of the agreements or conditions herein. Any agreement on the part of an Investor to any such extension or waiver shall be valid if set forth in an instrument in writing signed on behalf of such Investor and the Company and shall be deemed to modify the terms and conditions of this Agreement as between such Investor and the Company.

 

11.           Miscellaneous. 

 

(a)     Survival of Obligations. All representations, warranties, covenants, agreements and obligations contained in this Agreement shall survive (i) the acceptance of the Subscriptions by the Company and the Closing and (ii) the death or disability of any of the Investors.

 

 

23

 

 

(b)     Notices. All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given or delivered (i) when delivered personally, (ii) when delivered by electronic mail (so long as notification of a failure to deliver such electronic mail is not received by the sending party), (iii) if transmitted by facsimile when confirmation of transmission is received by the sending party, (iv) if sent by registered or certified mail, postage prepaid, return receipt requested, on the third business day after mailing or (v) if sent by reputable overnight courier when received; and shall be addressed to each Investor as set forth on its respective signature pages and if to the Company as follows:

 

	
If to the Company:
	
Eagle Bulk Shipping Inc.
300 First Stamford Place, 5th Floor

Stamford, Connecticut 06902

Attention: Adir Katzav

Facsimile: 203 276-8199

Email: akatzav@eagleships.com

	 	 
	
with a copy to:
	
Akin Gump Strauss Hauer & Feld LLP 
1333 New Hampshire Ave. N.W. 

Washington, DC 20036

Attention: Daniel I. Fisher

Facsimile: 202 887-4288

Email: dfisher@akingump.com

	 	 
	
If to the Investors: 
	
To the address specified on Schedule 1, or at such other address or addresses as may have been furnished to the Company in writing in accordance with this Agreement. 

 

Any party hereto may, from time to time, change its address, facsimile number, e-mail address or other information for the purpose of notices to that such party by giving notice specifying such change to the other parties hereto.

 

(c)     Execution in Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and shall become binding when one or more counterparts have been signed by and delivered to each of the parties hereto.

 

(d)     Amendments. Except as contemplated by Section 10(b), this Agreement shall not be amended, modified or supplemented prior to the Closing except by a written instrument signed by all the parties hereto.

 

(e)     Expenses. The Company shall pay all delivery expenses and stamp, transfer, issue, documentary and similar taxes, assessments and charges levied under the laws of any applicable jurisdiction in connection with the issuance of the Securities and will hold the Investors or other holders thereof harmless, without limitation as to time, against any and all liabilities with respect to all such delivery expenses, taxes, assessments and charges. Each Investor shall be responsible for the fees and expenses, if any, of its advisors and its counsel.

 

 

24

 

 

(f)     Waiver. Any term or provision of this Agreement may be waived, or the time for its performance may be extended, by the party entitled to the benefit thereof. Any such waiver shall be validly and sufficiently authorized for the purposes of this Agreement if, as to any party, it is in writing signed by an authorized representative of such party. The failure or delay of any party to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such provision, nor in any way to affect the validity of this Agreement or any part hereof or the right of any party thereafter to enforce each and every such provision. No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach.

 

(g)     Severability. Wherever possible, each provision hereof shall be interpreted in such manner as to be effective and valid under applicable law, but in case any one or more of the provisions contained herein shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such provision shall be ineffective to the extent, but only to the extent, of such invalidity, illegality or unenforceability without invalidating the remainder of such invalid, illegal or unenforceable provision or provisions or any other provisions hereof, unless such a construction would be unreasonable.

 

(h)     Assignment; Successors and Assigns. Neither this Agreement nor any of the rights and obligations of any party hereunder may be assigned, delegated or otherwise transferred by such party without the prior written consent of each other party; provided, that any Investor may assign, in its sole discretion, any or all of its rights, interests and obligations under this Agreement to any of its Affiliates or to any transferee of the Securities following the Closing. No such assignment, delegation or other transfer shall relieve the assignor of any of its obligations or liabilities hereunder. This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and permitted assigns.

 

(i)     No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended or shall be construed to confer upon any third Person, other than the parties and their respective successors and assigns permitted by Section 11(h), any right, remedy or claim under or by reason of this Agreement.

 

(j)     Governing Law. This Agreement shall be governed by and construed in accordance with the substantive laws of the State of New York without regard to its conflict of laws principles.

 

(k)     Submission to Jurisdiction. Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the non-exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any Investor may otherwise have to bring any action or proceeding relating to this Agreement against the Company and its subsidiaries or their respective properties in the courts of any jurisdiction or any right that the Company may otherwise have to bring any action or proceeding relating to this Agreement against any Investor or its properties in the courts of any jurisdiction. Each party hereto irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any such proceeding brought in such a court referred to in the first sentence of this Section 11(k) and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.

 

 

25

 

 

(l)     Waiver of Jury Trial. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO IT THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

(m)     Public Announcements. No Investor shall make any public announcements or otherwise communicate with the news media with respect to this Agreement or the transactions contemplated hereby without the prior written consent of the Company. Notwithstanding the forgoing, any Investor may make or cause to be made any press release or similar public announcement or communication as may be required to comply with (i) the requirements of applicable law, including the Exchange Act or (ii) its disclosure obligations or practices with respect to its investors; provided that prior to making any such disclosure under this clause (ii), such Investor shall provide a copy of such proposed disclosure to the Company and shall only publicly make such disclosure with the consent of the Company, which consent shall not be unreasonably withheld or delayed, if the Company has not previously made a public announcement of the transactions contemplated hereby. For the avoidance of doubt, the Company may issue any such press release or make any such announcement as may be required by law or the applicable rules or regulations of the NASDAQ Stock Market LLC, in which case the Company shall notify Fearnley, to the extent reasonably practicable under the circumstances, with reasonable time to review such release or announcement in advance of such issuance. 

 

 

26

 

 

(n)     Right to Conduct Activities. The Company and each Investor acknowledge that some or all of the Investors are professional investors, and as such invest in numerous portfolio companies, some of which may be competitive with the Company’s business. No Investor shall be liable to the Company or to another Investor for any claim arising out of, or based upon, (i) the investment by the Investor or any Affiliate of the Investor in any entity competitive to the Company or (ii) actions taken by the Investor or any Affiliate of the Investor to assist any such competitive company, whether or not such action was taken as a board member of such competitive company or otherwise, and whether or not such action has a detrimental effect on the Company, so long as such Investor or such Affiliate does not use or permit the use of confidential or proprietary information of the Company or of its affiliates.

 

(o)     Removal of Legend. On and after such date as the Securities held by any Investor or its successors and permitted assigns pursuant to Section 11(h) are eligible for sale under Rule 144 and in connection with any such sale of Securities by an Investor in reliance on Rule 144 under the Securities Act, the applicable Investor or its broker shall deliver to the Company and the transfer agent a customary broker representation letter and a certificate of the Investor providing any information that the Company and the transfer agent deem necessary to determine that the sale of the Securities is made in compliance with Rule 144, including, as may be appropriate, a certification (i) that such Investor is not (and in the preceding three months has not been) an Affiliate of the Company (and a covenant not to consummate such sale if the Purchaser becomes an Affiliate prior to the consummation of such sale unless such sale is registered or another exemption from registration is available), (ii) regarding the length of time the Securities have been held and (iii) and that the Investor is not in possession of material non-public information relating to the Company. Upon receipt of such representation letter and certificate and if the Company determines that the sale may be made pursuant with Rule 144, the Company shall as soon as reasonably practicable cause the removal of such notation of a restrictive legend from the Investor’s book-entry account maintained by the transfer agent in connection with such sale. The Company shall bear all direct costs and expense associated with the removal of a legend pursuant to this Section 11(o) (including, without limitation, reasonable fees of legal counsel in connection with any legal opinion letters required to be issued in connection with such removal), so long as such Investor or its permitted assigns provide to the Company any information the Company deems necessary to determine that the legend is no longer required under the Securities Act or applicable State Securities Laws. 

 

(p)     Entire Agreement. This Agreement, the Appendices, Exhibits and the Schedules and the documents delivered pursuant hereto and thereto constitute the entire agreement and understanding among the parties with respect to the subject matter contained herein or therein, and supersede any and all prior agreements, negotiations, discussions, understandings, term sheets or letters of intent between or among any of the parties with respect to such subject matter. 

 

 

27

 

 

(q)     Interpretation. 

 

In this Agreement, unless the context clearly indicates otherwise: 

 

(i)          words used in the singular include the plural and words in the plural include the singular;

 

(ii)         reference to any gender includes the other gender;

 

(iii)        the word “including” (and with correlative meaning “include”) means “including but not limited to” or “including without limitation”;

 

(iv)        reference to any Section, Exhibit or Schedule means such Section of, or such Exhibit or Schedule to, this Agreement, as the case may be, and reference in any Section or definition to any clause means such clause of such Section or definition;

 

(v)         the words “herein,” “hereunder,” “hereof,” “hereto” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Section or other provision hereof;

 

(vi)        reference to any agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and by this Agreement;

 

(vii)       reference to any law (including statutes and ordinances) means such law (including all rules and regulations promulgated thereunder) as amended, modified, codified or reenacted, in whole or in part, and in effect at the time of determining compliance or applicability;

 

(viii)      relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding” and “through” means “through and including”; and

 

(ix)         the titles and headings of Sections contained in this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of or to affect the meaning or interpretation of this Agreement.

 

(r)     This Agreement was negotiated by the parties with the benefit of legal representation, and no rule of construction or interpretation otherwise requiring this Agreement to be construed or interpreted against any party shall apply to any construction or interpretation hereof. Subject to Section 11(g), this Agreement shall be interpreted and construed to the maximum extent possible so as to uphold the enforceability of each of the terms and provisions hereof.

 

[SIGNATURE PAGES FOLLOW]

 

 

28

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: AC Maritime Ltd.

Legal Name of Entity

 

 

 

By: /s/ Ernest Scalamandre

Name: Ernest Scalamandre

Title: Director

 

 

Address: 

 

DMS House (2nd Floor)

20 Genesis Close, P.O. Box 1344

Grand Cayman KY1-1108, Cayman Islands

 

State/Country of Domicile or Formation: Cayman Islands

Purchase Price: US$10,000,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 66,666,667 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Home Capital AS

Legal Name of Entity

 

 

 

By: /s/ Kay-Erik Mamre-Johansen

Name: Kay-Erik Mamre-Johansen

Title: Portfolio Manager

 

 

Address:

 

Frederik Stangs Gate 22-24

P.O. Box 2424 50221

0201 Oslo, Norway

 

State/Country of Domicile or Formation: Norway

Purchase Price: US$0.15 per share            Total: US$2,500,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 16,666,667 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: KLP Alfa Global Energi

Legal Name of Entity

 

 

 

By: /s/ Simon Johannessen

Name: Simon Johannessen

Title: Portfolio Manager

 

 

Address: 

 

Dronning Eufemias Gate 10

Pb. 400 Sentrum

0103 Oslo, Norway

 

State/Country of Domicile or Formation: Norway

Purchase Price: US$0.15 per share

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 20,000,000 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Compass Capital Ltd

Legal Name of Entity

 

 

 

By: /s/ Jan R. Naess

Name: Jan R. Naess

Title: Chairman

 

 

Address: 

 

C/o Naess Management AS

P.O. Box 2042 Vika

N-0125 Oslo, Norway

 

State/Country of Domicile or Formation: Marshall Islands – Tax resident of Norway

Purchase Price: US$200,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 1,333,333 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Torstein Tvenge

Legal Name of Entity

 

 

 

By: /s/ Torstein Tvenge

Name: Torstein Tvenge

Title:

 

 

Address: 

P.O. Box 515 Skoyen

0214 Oslo, Norway

 

State/Country of Domicile or Formation: Norway

Purchase Price: US$400,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 2,666,667 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Mertoun Capital AS

Legal Name of Entity

 

 

 

By: /s/ Jostein Devold

Name: Jostein Devold

Title: Managing Director

 

 

Address: 

 

PO. Box 140

4662 Kristiansand, Norway

 

 

State/Country of Domicile or Formation: Norway

Purchase Price: US$0.15 per share

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 10,000,000 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Camaca AS

Legal Name of Entity

 

 

 

By: /s/ Herman Flinder

Name: Herman Flinder

Title: Owner

 

 

Address: 

 

P.O. Box 34

Slemdal, Oslo, Norway

 

State/Country of Domicile or Formation: Norway

Purchase Price: US$0.15 per share

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 6,666,667 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Ponderus Securities

Legal Name of Entity

 

 

 

By: /s/ Peter Edwall

Name: Peter Edwall

Title: CEO

 

 

Address: 

 

Lilla Bantorget 11

S-77723 Stockholm, Sweden

 

State/Country of Domicile or Formation: Sweden

Purchase Price: US$500,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 3,333,333 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Ironsides Partners LLC

Legal Name of Entity

 

 

 

By: /s/ Jan A. Naess

Name: Robert Knapp, by Jan A. Naess, power of attorney

Title: President

 

 

Address: 

 

100 Summer Street

Suite 2705, Boston, USA

 

State/Country of Domicile or Formation: Massachusetts

Purchase Price: US$3,000,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 20,000,000 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Ketil Nereng

Legal Name of Entity

 

 

 

By: /s/ Ketil Nereng

Name: Ketil Nereng

Title: 

 

 

Address: 

 

Skogvn S8B

1368 Stabekk

 

State/Country of Domicile or Formation: Norway

Purchase Price: US$111,130

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 740,867 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Tigerstaden AS

Legal Name of Entity

 

 

 

By: /s/ Ketil Skorstad

Name: Ketil Skorstad

Title: 

 

 

Address: 

 

Apalveien 6

0371 Oslo, Norway

 

State/Country of Domicile or Formation: Norway

Purchase Price: US$0.15 per share

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 1,000,000 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Bjørgvin Vekst I AS

Legal Name of Entity

 

 

 

By: /s/ Henrik Krepting

Name: Henrik Krepting

Title: Investment Director

 

 

Address: 

 

Dronning Mauds Gate 3

0250 Oslo, Norway

 

State/Country of Domicile or Formation: Norway

Purchase Price: US$2,000,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 13,333,333 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Silvercoin Industries AS

Legal Name of Entity

 

 

 

By: /s/ Jo Henrik Erikson

Name: Hanken Sneter, by Jo Henrik Erikson, power of attorney

Title: CEO

 

 

Address: 

 

Tyrihjellveien 27

1639 Gamle, Fredrikstad, Norway

 

State/Country of Domicile or Formation: Norway

Purchase Price: US$600,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 4,000,000 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Oceana AS

Legal Name of Entity

 

 

 

By: /s/ Øystein Bøe

Name: Øystein Bøe

Title: Director

 

 

Address: 

 

Radhusgata 11

3211 Sandefjord, Norway

 

State/Country of Domicile or Formation: Norway

Purchase Price: US$100,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 666,667 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Oceana Navigation AS

Legal Name of Entity

 

 

 

By: /s/ Øystein Bøe

Name: Øystein Bøe

Title: Director

 

 

Address: 

Radhusgata 11

3211 Sandefjord, Norway

 

State/Country of Domicile or Formation: Norway

Purchase Price: US$500,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 3,333,333 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Predator Capital Management AS

Legal Name of Entity

 

 

 

By: /s/ Karl H. Ulvebme

Name: Karl H. Ulvebme

Title: Chairman

 

 

Address:  

 

Klingenberggata 7b

0161 Oslo, Norway

 

State/Country of Domicile or Formation: Norway

Purchase Price: US$500,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 3,333,333 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Benestad Eiendom AS

Legal Name of Entity

 

 

 

By: /s/ Harald Benestad

Name: Harald Benestad

Title: Chairman

 

 

Address: 

 

Nedre Storgate 46

3015 Drammen, Norway

 

State/Country of Domicile or Formation: Norway

Purchase Price: US$1,000,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 6,666,667 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: AS Uthalden

Legal Name of Entity

 

 

 

By: /s/ Harald M. Hanssen

Name: Harald M. Hanssen

Title: Owner

 

 

Address: 

 

Huk Aveny 19

0287 Oslo, Norway

 

State/Country of Domicile or Formation: Norway

Purchase Price: US$2,500,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 16,666,667 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Strategic Investment LLC

Legal Name of Entity

 

 

 

By: /s/ Christina Tan

Name: Christina Tan

Title: Director

 

 

Address: 

 

C/o M.T. Maritime Management (USA) LLC

2960 Post Road

Southport, Connecticut 06890 

 

State/Country of Domicile or Formation: Marshall Islands

Purchase Price: US$1,000,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 6,666,667 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Sjarvarsyn Ehf

Legal Name of Entity

 

 

 

By: /s/ Bjarni Armannsson

Name: Bjarni Armannsson

Title: CEO

 

 

Address: 

 

Bakkavor 28

170 Selfarnarnes, Iceland

 

State/Country of Domicile or Formation: Iceland

Purchase Price: US$250,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 1,666,667 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Clearwater Navigation Ltd

Legal Name of Entity

 

 

 

By: /s/ Yves Bruderlein

Name: Yves Bruderlein

Title: Director

 

 

Address: 

 

14 Rue De La Corraterie

Case Postale 5209

CH-1211 Geneva 11

 

State/Country of Domicile or Formation: Cayman Islands

Purchase Price: US$525,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 3,500,000 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Titan Opportunities Fund IC SICAV p.l.c. 

Legal Name of Entity

 

 

 

By: /s/ Svend Erik Enger

Name: Svend Erik Enger

Title: Director

 

 

Address: 

 

Room 1, Level 5, 85, St. John Street

Valletta, Malta

 

State/Country of Domicile or Formation: Malta

Purchase Price: US$0.15 per share

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 13,333,333 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Foyer International SA

Legal Name of Entity

 

 

 

By: /s/ John Olav Harr

Name: Fredrik Halvorsen, by John 

Olav Harr, power of attorney

Title: 

 

 

Address: 

 

12, rue Leon Lowal
L-3372 Leudelange
Luxembourg

 

State/Country of Domicile or Formation: Luxembourg

Purchase Price: US$1,950,000 ($0.15 per share)

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 13,000,000 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Ditlef Rasmussen

Legal Name of Entity

 

 

 

By: /s/ Ditlef Rasmussen

Name: Ditlef Rasmussen 

Title: 

 

 

Address: 

 

Bestumveien 71C
0283 Oslo, Norway

 

State/Country of Domicile or Formation: Norway

Purchase Price: US$100,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 666,667 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Gary Vogel

Legal Name of Entity

 

 

 

By: /s/ Gary Vogel

Name: Gary Vogel 

Title: 

 

 

Address:

  

300 First Stamford Place
Stamford, CT 06902

 

State/Country of Domicile or Formation: Connecticut

Purchase Price: US$100,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 666,667 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Paul Leand

Legal Name of Entity

 

 

 

By: /s/ Paul Leand

Name: Paul Leand 

Title: 

 

 

Address: 

 

3152 Stuyvesant Avenue
Rye, NY 10580

 

State/Country of Domicile or Formation: USA

Purchase Price: US$100,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 666,667 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Toluma Global AS

Legal Name of Entity

 

 

By: /s/ Espen Stavdal 

Name: Espen Stavdal 

Title: Managing Director

 

 

Address: 

 

Strandveien 20
NO-1366 Lysaker, Norway

 

State/Country of Domicile or Formation: Norway

Purchase Price: US$375.000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 2,500,000 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: OCM OPPS EB HOLDINGS, LTD.

Legal Name of Entity

 

By: Oaktree Capital Management, 

L.P., its sole director

 

 

By: /s/ Rajath Shourie 

Name: Rajath Shourie 

Title: Managing Director

 

By: /s/ Jordan Mikes 

Name: Jordan Mikes

Title: Vice President

 

 

Address: 

 

333 South Grand Avenue, 28th Floor
Los Angeles, CA 90071

 

State/Country of Domicile or Formation: Cayman Islands

Purchase Price: US$0.15 per share

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 151,285,800 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: San Bernardino County Employees Retirement Association

Legal Name of Entity

 

 

 

By: /s/ Karen Weber 

Name: Karen Weber 

Title: Authorized Signatory

 

 

Address: 

 

485 Lexington Avenue
15th Floor
New York, NY 10017

 

State/Country of Domicile or Formation: United States

Purchase Price: US$420,909 (2,806,060 shares at US$0.15 per share)

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 2,806,060 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Goldentree Distressed Master Fund 2014 LTD

Legal Name of Entity

 

 

 

By: /s/ Karen Weber 

Name: Karen Weber 

Title: Authorized Signatory

 

 

Address: 

 

485 Lexington Avenue
15th Floor
New York, NY 10017

 

State/Country of Domicile or Formation: Cayman Islands

Purchase Price: US$10,448,472 (69,656,480 shares at US$0.15 per share)

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 69,656,480 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Goldentree E Distressed Debt Master Fund II LP

Legal Name of Entity

 

 

 

By: /s/ Karen Weber 

Name: Karen Weber 

Title: Authorized Signatory

 

 

Address: 

 

485 Lexington Avenue
15th Floor
New York, NY 10017

 

State/Country of Domicile or Formation: Cayman Islands

Purchase Price: US$566,239.50 (3,774,930 shares at US$0.01 per share)

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 3,774,930 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Goldentree NJ Distressed Fund 2015 LP

Legal Name of Entity

 

 

 

By: /s/ Karen Weber 

Name: Karen Weber 

Title: Authorized Signatory

 

 

Address: 

 

485 Lexington Avenue
15th Floor
New York, NY 10017

 

State/Country of Domicile or Formation: United States

Purchase Price: US$2,143,556.25 (14,290,375 shares at US$0.15 per share)

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 14,290,375 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Goldentree E Distressed Debt Fund II LP

Legal Name of Entity

 

 

 

By: /s/ Karen Weber 

Name: Karen Weber 

Title: Authorized Signatory

 

 

Address: 

 

485 Lexington Avenue
15th Floor
New York, NY 10017

 

State/Country of Domicile or Formation: United States

Purchase Price: US$42,618 (284,120 shares at US$0.15 per share)

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 284,120 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Goldentree Distressed Fund 2014 LP

Legal Name of Entity

 

 

 

By: /s/ Karen Weber 

Name: Karen Weber 

Title: Authorized Signatory

 

 

Address:

 

485 Lexington Avenue
15th Floor
New York, NY 10017

 

State/Country of Domicile or Formation: United States

Purchase Price: US$1,678,205.25 (11,188,035 shares at US$0.15 per share)

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 11,188,035 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Neuberger Berman Distressed Debt Investment Fund Limited 

Legal Name of Entity

 

 

By: Neuberger Berman Investment Advisors LLC, As Investment Manager

 

 

By: /s/ Ravi Soni 

Name: Ravi Soni 

Title: SVP

 

 

Address: 

 

190 S. LaSalle St.
Suite 2400
Chicago, IL 60603

 

State/Country of Domicile or Formation: Guernsey

Purchase Price: US$3,972,050

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 26,480,333 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Neuberger Berman Distressed Debt Master Fund LP 

Legal Name of Entity

 

 

By: Neuberger Berman Investment Advisors LLC, As Investment Manager

 

 

By: /s/ Ravi Soni 

Name: Ravi Soni 

Title: SVP

 

 

Address: 

 

190 S LaSalle St.
Suite 2400
Chicago, IL 60603

 

State/Country of Domicile or Formation: Cayman Islands

Purchase Price: US$1,972,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 13,146,667 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Lisa and Steven Tananbaum Family Foundation

Legal Name of Entity

 

 

 

By: /s/ Steven A. Tananbaum 

Name: Steven A. Tananbaum 

Title: Authorized Representative

 

 

Address: 

 

c/o GoldenTree Asset Management LP
300 Park Avenue
New York, NY 10022

 

State/Country of Domicile or Formation: New York

Purchase Price: US$302,000

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 2,013,333 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Strategic Value Special Situations Master Fund II, L.P.

Legal Name of Entity

 

By: SVP Special Situations II, LLC

 

 

By: /s/ James Dougherty 

Name: James Dougherty 

Title: Fund Chief Financial Officer

 

 

Address: 

 

1000 West Putnam Avenue
c/o Strategic Value Partners LLC
Greenwich CT, 06830

 

State/Country of Domicile or Formation: Cayman Islands

Purchase Price: US$1,640,521.35

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 10,936,809 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Strategic Value Opportunities Fund L.P

Legal Name of Entity

 

By: SVP Special Situations III-A LLC

 

 

By: /s/ James Dougherty 

Name: James Dougherty 

Title: Fund Chief Financial Officer

 

 

Address: 

 

1000 West Putnam Avenue
c/o Strategic Value Partners LLC
Greenwich CT, 06830

 

State/Country of Domicile or Formation: Cayman Islands

Purchase Price: US$217,546.35

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 1,450,309 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Strategic Value Master Fund, Ltd.

Legal Name of Entity

 

By: Strategic Value Partners, LLC, its Investment Manager

 

 

By: /s/ James Dougherty 

Name: James Dougherty 

Title: Fund Chief Financial Officer

 

 

Address: 

 

1000 West Putnam Avenue
c/o Strategic Value Partners LLC
Greenwich CT, 06830

 

State/Country of Domicile or Formation: Cayman Islands

Purchase Price: US$1,905,881.25

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 12,705,875 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST DAY OF JULY, 2016.

 

	
INVESTOR:

	
 

 

By: Strategic Value Special Situations Master Fund III, L.P.

Legal Name of Entity

 

By: SVP Special Situations III, LLC, its Investment Manager

 

 

By: /s/ James Dougherty 

Name: James Dougherty 

Title: Fund Chief Financial Officer

 

 

Address: 

 

1000 West Putnam Avenue
c/o Strategic Value Partners LLC
Greenwich CT, 06830

 

State/Country of Domicile or Formation: Cayman Islands

Purchase Price: US$1,036,001.10

 

The offer to purchase Securities as set forth above is confirmed and accepted by the Company as to 6,906,674 shares of Common Stock.*

 

* The number of shares of Common Stock is subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date, and by its signature above, such Investor agrees to be bound to purchase such number of shares of Common Stock as adjusted in proportion to the Reverse Split Ratio implemented by the Company.

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement this FIRST OF JULY, 2016. 

 

	
 
	
eagle bulk shipping inc.
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/ Adir Katzav
	
 

	
 
	
 
	
Name: Adir Katzav
	
 

	
 
	
 
	
Title: Chief Financial Officer
	
 

 

 

30

 

 

SCHEDULE 1

 

INVESTORS

 

	 	
 

Investor
	
 

Number of Securities to be Acquired*
	
 

Aggregate Purchase Price to be Paid
	
 

Address

	1.	
AC Maritime Ltd.
	
66,666,667
	
US$10,000,000
	
DMS Corporate Services Ltd., DMS House, 20 Genesis Close, P.O. Box 13344, Grand Cayman KY1-1108, Cayman Island

	2.	
Home Capital AS
	
16,666,667
	
2,500,000
	
Fredrik Stangs Gate 22, 0264 Oslo, Norway

	3.	
KLP Alfa Global Energi
	
20,000,000
	
3,000,000
	
Dronning Eufemias Gate 10, 0191 Oslo, Norway

	4.	
Compass Capital Ltd
	
1,333,333
	
200,000
	
c/o Naess Management AS, Haakon VII’s Gate 1, 0161 Oslo, Norway

	5.	
Torstein Tvenge
	
2,666,667
	
400,000
	
Gimle Terrasse 12, 0264 Oslo, Norway

	6.	
Mertoun Capital AS
	
10,000,000
	
1,500,000
	
Markensgate 9, 4610 Kristiansand, Norway

	7.	
Camaca AS
	
6,666,667
	
1,000,000
	
Golfstubben 27, 0757 Oslo, Norway

	8.	
Ponderus Securities
	
3,333,333
	
500,000
	
Lilla Bantorget 11, Stockholm 111 23, Sweden

	9.	
Ironside Partners LLC
	
20,000,000
	
3,000,000
	
100 Summer Street, Suite 2705, Boston, USA

	10.	
Ketil Nereng
	
740,867
	
111,130
	
Skogveien 58B, 1368 Stabekk, Norway

	11.	
Tigerstaden AS
	
1,000,000
	
150,000
	
Sørkedalsveien 10, 0369 Oslo, Norway

	12.	
Bjørgvin Vekst I AS
	
13,333,333
	
2,000,000
	
Dronning Mauds Gate 3, 0250 Oslo, Norway

	13.	
Silvercoin Industries AS
	
4,000,000
	
600,000
	
Tyrihjellveien 27, 1639 Gamle Fredrikstad, Norway

	14.	
Oceana Navigation AS
	
3,333,333
	
500,000
	
Rådhusgata 11, 3211 Sandefjord, Norway

	15.	
Oceana AS
	
666,667
	
100,000
	
Rådhusgata 11, 3211 Sandefjord, Norway

	16.	
Predator Capital Management AS
	
3,333,333
	
500,000
	
Klingenberggata 7b, 0161 Oslo, Norway

	17.	
Benestad Eiendom AS
	
6,666,667
	
1,000,000
	
Nedre Storgate 46, 3015 Drammen, Norway

	18.	
AS Uthalden
	
16,666,667
	
2,500,000
	
Huk Aveny 19, 0287 Oslo, Norway

	19.	
Strategic Investment LLC
	
6,666,667
	
1,000,000
	
M.T. Maritime Management (USA) LLC, 2960 Post Road, Southport, CT 06890, USA

	20.	
Sjarvarsyn Ehf
	
1,666,667
	
250,000
	
Bakkavor 28, Seltjarnarnesi, 107, Iceland

	21.	
Clearwater Navigation Ltd
	
3,500,000
	
525,000
	
4 Battery Road #34-01 Bank of China Building, Singapore 049908

	22.	
Titan Opportunities Fund IC SICAV p.l.c.
	
13,333,333
	
2,000,000
	
Room 1, Level 5, 85, St. John Street, Valletta, Malta

	23.	
Foyer International SA
	
13,000,000
	
1,950,000
	
13, Rue Goethe, L-1637 Luxembourg, Luxembourg

	24.	
Ditlef Rasmussen
	
666,667
	
100,000
	
Bestumveien 71 C, 0283 Oslo, Norway

	25.	
Gary Vogel
	
666,667
	
100,000
	
300 First Stamford Place, Stamford, CT 06902, USA

	26.	
Paul Leand
	
666,667
	
100,000
	
152 Stuyvesant Avenue, Rye, NY 10580, USA

	27.	
Toluma Global AS
	
2,500,000
	
375,000
	
Strandveien 20, 1366 Lysaker, Norway

	28.	
OCM OPPS EB HOLDINGS, LTD.
	
151,285,800
	
22,692,870
	
333 South Grand Avenue, 28th Floor, Los Angeles, CA 90071, USA

	29.	
Goldentree E Distressed Debt Master Fund II LP
	
3,774,930
	
566,240
	
300 Park Avenue, New York, NY 10022, USA

	30.	
Goldentree E Distressed Debt Fund II LP
	
284,120
	
42,618
	
300 Park Avenue, New York, NY 10022, USA

	31.	
Goldentree Distressed Fund 2014 LP
	
11,188,035
	
1,678,205
	
300 Park Avenue, New York, NY 10022, USA

	32.	
Goldentree NJ Distressed Fund 2015 LP
	
14,290,375
	
2,143,556
	
300 Park Avenue, New York, NY 10022, USA

	33.	
Goldentree Distressed Master Fund 2014 LTD
	
69,656,480
	
10,448,472
	
300 Park Avenue, New York, NY 10022, USA

	34.	
San Bernardino County Employees Retirement Association
	
2,806,060
	
420,909
	
300 Park Avenue, New York, NY 10022, USA

	35.	
Neuberger Berman Distressed Debt Investment Fund Limited (By: Neuberger Berman Investment Advisers LLC, As Investment Manager)
	
26,480,333
	
3,972,050
	
190 South LaSalle Street, Suite 2400, Chicago, IL 60603

	36.	
Neuberger Berman Distressed Debt Master Fund LP  (By: Neuberger Berman Investment Advisers LLC, As Investment Manager)
	
13,146,667
	
1,972,000
	
190 South LaSalle Street, Suite 2400, Chicago, IL 60603

	37.	
Lisa and Steven Tananbaum Family Foundation
	
2,013,333
	
302,000
	
c/o GoldenTree Asset Management LP

300 Park Avenue, New York, NY 10022

	38.	
Strategic Value Special Situations Master Fund II, L.P.
	
10,936,809
	
1,640,521.35
	
c/o Strategic Value Partners LLC , 100 West Putnam Avenue, Greenwich, CT 06830, USA

	39.	
Strategic Value Opportunities Fund L.P.
	
1,450,309
	
217,546.35
	
c/o Strategic Value Partners LLC, 100 West Putnam Avenue, Greenwich, CT 06830, USA

	40.	
Strategic Value Special Situations Master Fund III, L.P. 
	
6,906,674
	
1,036,001.10
	
c/o Strategic Value Partners LLC, 100 West Putnam Avenue, Greenwich, CT 06830, USA

	41.	
Strategic Value Master Fund Ltd.
	
12,705,875
	
1,905,881.25
	
c/o Strategic Value Partners LLC, 100 West Putnam Avenue, Greenwich, CT 06830, USA

	 	
TOTAL 
	
566,666,669
	
$85,000,000
	  

  

* This number is based on a per share purchase price of US$0.15 and such number of Securities to be acquired shall be subject to adjustment based on the Reverse Split Ratio to be effected pursuant to the Reverse Split prior to the Closing Date. The number of Securities that each Investor will receive shall be rounded down after giving effect to the Reverse Split.

 

 

 

 

SCHEDULE 2

 

FORM OF OPINION OF AKIN GUMP STRAUSS HAUER & FELD LLP

 

1.     Assuming, without independent investigation, (a) the accuracy of the representations and warranties of the Company set forth in the Agreement and in the Reviewed Documents; (b) the accuracy of the representations and warranties of each of the Investors set forth in the Agreement; (c) the due performance by the Company and each of the Investors of their respective covenants and agreements set forth in the Agreement; (d) the timely filing of all notices required to be filed with any federal agency subsequent to the date hereof in order to secure exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”); (e) that the Company and any person acting on its behalf have complied and will comply with the limitations on manner of offering and sale set forth in Rule 502(c) promulgated under the Securities Act with respect to all offers and sales of the Securities; (f) that none of the persons described in Rule 506(d)(1) under the Securities Act, are subject to any conviction, order, judgment, decree, bar, suspension, expulsion or similar event that would result in disqualification from use of Rule 506 pursuant to Rule 506(d) or would require disclosure under Rule 506(e); (g) the offer and sale of the Securities will not be integrated with the offer or sale of any other securities of the Company under the Securities Act; and (h) that neither the Company nor any other person or entity will, after the offer, issue, sale and delivery of the Securities, take or omit to take any action that would cause such offer, issue, sale or delivery not to constitute an exempted transaction under the Securities Act, the offer, issue, sale and delivery of the Securities by the Company to the Investors in the manner contemplated by the Agreement do not require registration under the Securities Act, it being expressly understood that we express no opinion as to any subsequent offer or resale of any of the Securities.

 

2.     The Company is not, and immediately after the closing of the transactions contemplated by the Agreement, the Company will not be, an “investment company” required to register under the Investment Company Act of 1940, as amended.

 

 

 

  

SCHEDULE 3

 

FORM OF OPINION OF SEWARD & KISSEL LLP

 

 

1.     The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the Republic of the Marshall Islands based solely upon a certificate of good standing dated , 2016 issued by the Registrar of Corporations of the Republic of the Marshall Islands.

 

2.     The Company has the corporate power and authority to execute and deliver the Purchase Agreement and to perform its obligations thereunder, including, without limitation, to issue, sell and deliver the Common Shares as contemplated by the Purchase Agreement, and the Purchase Agreement has been duly executed and delivered by the Corporation.

 

3.     The Amendment has been duly authorized by the Corporation and filed with the registrar of Corporations of the Republic of the Marshall Islands.

 

4.     When issued and paid for as contemplated in the Purchase Agreement, the Common Shares will be validly issued and fully paid and non-assessable, and the issue of the Common Shares will not be subject to preemptive or similar rights.

 

5.     The execution and delivery by the Company of, and the performance by the Corporation of its obligations under, the Purchase Agreement, the issuance and sale of the Common Shares and the consummation of the transactions contemplated by the Purchase Agreement do not and will not violate or conflict with any provision of (i) applicable Marshall Islands law, rule or regulation, or, to our knowledge, any order of any court or governmental agency or body in the Republic of the Marshall Islands having jurisdiction over the Company or (ii) the Amended and Restated Articles of Incorporation or by-laws of the Company.

 

6.     No consent, approval, authorization or order of, or qualification with, any governmental body or agency of the Republic of the Marshall Islands is required for the performance by the Company of its obligations under the Purchase Agreement. 

 

 

 

 

APPENDIX A

 

INVESTOR QUESTIONNAIRE

 

 

	
Name of investor: 
	
 

 

	
State or jurisdiction of residence: 
	
 

 

With respect to a potential investment in Eagle Bulk Shipping Inc., a corporation organized under the laws of the Republic of Marshall Islands (the “Company”), the undersigned represents and warrants that he/she/it qualifies as an “accredited investor” as that term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Act”), because (please check the box that applies):

 

	
☐
	
He/she is a natural person whose individual net worth, or joint net worth with his/her spouse, at the time of his/her purchase of securities of the Company, exceeds $1,000,000, excluding the value of his/her primary residence; or

 

	
☐
	
He/she is a natural person who had an individual income in excess of $200,000 in each of the two most recent years or had a joint income with his/her spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; or

 

	
☐
	
He/she is a director, executive officer or general partner of the Company or a director, executive officer or general partner of a general partner of the Company; or

 

	
☐
	
It is an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, a corporation, Massachusetts or similar business trust, or partnership that was not formed for the specific purpose of acquiring the securities of the Company being offered in this offering, with total assets in excess of $5,000,000; or

 

	
☐
	
It is a “private business development company” as defined in Section 202(a)(22) of the Investment Advisers Act of 1940; or

 

	
☐
	
It is a “bank” as defined in Section 3(a)(2) of the Act; or

 

	
☐
	
It is a “savings and loan association” or other institution as defined in Section 3(a)(5)(A) of the Act, whether acting in its individual or fiduciary capacity; or

 

	
☐
	
It is a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended; or

 

	
☐
	
It is an “insurance company” as defined in Section 2(a)(13) of the Act; or

 

 

A-1

 

 

	
☐
	
It is an investment company registered under the Investment Company Act of 1940; or

 

	
☐
	
It is a “business development company” as defined in Section 2(a)(48) of the Investment Company Act of 1940; or

 

	
☐
	
It is a “Small Business Investment Company” licensed by the U.S. Small Business Administration under either Section 301(c) or (d) of the Small Business Investment Act of 1958; or

 

	
☐
	
It is a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; or 

 

	
☐
	
It is an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is one of the following:

 

	 	
☐
	
A bank;

 

	 	
☐
	
A savings and loan association;

 

	 	
☐
	
An insurance company; or

 

	 	
☐
	
A registered investment adviser; or

 

	
☐
	
It is an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 with total assets in excess of $5,000,000; or

 

	
☐
	
It is an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 that is a self-directed plan with investment decisions made solely by persons that are accredited investors; or

 

	
☐
	
It is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered by the Company in this offering, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii); or

 

	
☐
	
It is an entity in which all of the equity owners are accredited investors.

 

 

A-2

 

 

	
Date:
	 	
 

 

 

 

PARTNERSHIP, CORPORATION, TRUST
     OR OTHER ENTITY INVESTORS:

 

 

                                                                                        
Print Name of Partnership, Corporation,
Trust or Other Entity

 

 

 

By:                                                                                  
Signature of Authorized Representative

 

                                                                                        
Print Name of Authorized Representative

 

                                                                                        
Title of Authorized RepresentativeEX-4.1

Table of Contents

 Exhibit 4.1 
  

 
  
 

 

Table of Contents

 TABLE OF CONTENTS 

 

							
	 	  	 	  	Page	 
	 PARTIES
	  	 	1	  
	 RECITALS
	  	 	1	  
			
	 Section 1.
	  	Certain Definitions	  	 	1	  
	 (a)  
	  	            ADR Register	  	 	1	  
	 (b)  
	  	            ADRs; Direct Registration ADRs	  	 	1	  
	 (c)  
	  	            ADS	  	 	1	  
	 (d)  
	  	            Custodian	  	 	1	  
	 (e)  
	  	            Deliver, execute, issue et al.	  	 	1	  
	 (f)  
	  	            Delivery Order	  	 	1	  
	 (g)  
	  	            Deposited Securities	  	 	1	  
	 (h)  
	  	            Direct Registration System	  	 	1	  
	 (i)  
	  	            Holder	  	 	1	  
	 (j)  
	  	            Securities Act of 1933	  	 	1	  
	 (k)  
	  	            Securities Exchange Act of 1934	  	 	1	  
	 (l)  
	  	            Shares	  	 	2	  
	 (m)  
	  	            Transfer Office	  	 	2	  
	 (n)  
	  	            Unit	  	 	2	  
	 (o)  
	  	            Withdrawal Order	  	 	2	  
	 Section 2.
	  	ADRs	  	 	2	  
	 Section 3.
	  	Deposit of Shares	  	 	2	  
	 Section 4.
	  	Issue of ADRs	  	 	2	  
	 Section 5.
	  	Distributions on Deposited Securities	  	 	3	  
	 Section 6.
	  	Withdrawal of Deposited Securities	  	 	3	  
	 Section 7.
	  	Substitution of ADRs	  	 	3	  
	 Section 8.
	  	Cancellation and Destruction of ADRs	  	 	3	  
	 Section 9.
	  	The Custodian	  	 	3	  
	 Section 10.
	  	Lists of Holders	  	 	4	  
	 Section 11.
	  	Depositary’s Agents	  	 	4	  
	 Section 12.
	  	Successor Depositary	  	 	4	  
	 Section 13.
	  	Reports	  	 	4	  
	 Section 14.
	  	Additional Shares	  	 	4	  
	 Section 15.
	  	Indemnification	  	 	5	  
	 Section 16.
	  	Notices	  	 	5	  
	 Section 17.
	  	Miscellaneous	  	 	6	  
	 Section 18.
	  	Governing Law; Consent to Jurisdiction; Agent for Service of Process	  	 	6	  
		
	 TESTIMONIUM
	  	 	7	  
	 SIGNATURES
	  	 	8	  

  
 – i –

Table of Contents

							
	 	  	 	  	Page	 
	  
 EXHIBIT A
	  			
	 FORM OF FACE OF ADR
	  	 	1	  
			
		  	Introductory Paragraph	  	 	1	  
			
		  	(1)      Issuance and Pre-Release of ADSs 	  	 	2	  
		  	(2)      Withdrawal of Deposited Securities 	  	 	3	  
		  	(3)      Transfers of ADRs 	  	 	3	  
		  	(4)      Certain Limitations 	  	 	4	  
		  	(5)      Taxes 	  	 	4	  
		  	(6)      Disclosure of Interests 	  	 	4	  
		  	(7)      Charges of Depositary 	  	 	6	  
		  	(8)      Available Information 	  	 	7	  
		  	(9)      Execution 	  	 	7	  
			
		  	Signature of Depositary	  	 	7	  
			
		  	Address of Depositary’s Office	  	 	8	  
		
	 FORM OF REVERSE OF ADR
	  	 	8	  
			
		  	(10)    Distributions on Deposited Securities 	  	 	8	  
		  	(11)    Record Dates 	  	 	9	  
		  	(12)    Voting of Deposited Securities 	  	 	9	  
		  	(13)    Changes Affecting Deposited Securities 	  	 	9	  
		  	(14)    Exoneration 	  	 	10	  
		  	(15)    Resignation and Removal of Depositary; the Custodian 	  	 	11	  
		  	(16)    Amendment 	  	 	11	  
		  	(17)    Termination 	  	 	12	  
		  	(18)    Appointment 	  	 	12	  
		  	(19)    Waiver 	  	 	13	  
		  	(20)    Change in Unit 	  	 	13	  

  

– ii – 

Table of Contents

 DEPOSIT AGREEMENT, dated as of
[DATE], 2016 (the “Deposit Agreement”), among LINE CORPORATION and its successors (the “Company”), JPMORGAN CHASE BANK, N.A., as depositary hereunder (the “Depositary”), and all holders from time to time
of American Depositary Receipts issued hereunder (“ADRs”) evidencing American Depositary Shares (“ADSs”) representing deposited Shares (defined below). The Company hereby appoints the Depositary as depositary
for the Deposited Securities (as defined below) and hereby authorizes and directs the Depositary to act in accordance with the terms set forth in this Deposit Agreement. All capitalized terms used herein have the meanings ascribed to them in
Section 1 or elsewhere in this Deposit Agreement. The parties hereto agree as follows: 

1. Certain Definitions. 

(a) “ADR Register” is defined in paragraph (3) of the form of ADR. 

(b) “ADRs” mean the American Depositary Receipts executed and delivered hereunder. ADRs
may be either in physical certificated form or Direct Registration ADRs (as hereinafter defined). ADRs in physical certificated form, and the terms and conditions governing the Direct Registration ADRs, shall be substantially in the form of
Exhibit A annexed hereto (the “form of ADR”). The term “Direct Registration ADR” means an ADR, the ownership of which is recorded on the Direct Registration System. References to “ADRs” shall
include certificated ADRs and Direct Registration ADRs, unless the context otherwise requires. The form of ADR is hereby incorporated herein and made a part hereof; the provisions of the form of ADR shall be binding upon the parties hereto.

 (c) Subject to paragraph (13) of the form of ADR, each “ADS” evidenced by an ADR
represents the right to receive one Share and a pro rata share in any other Deposited Securities. 
 (d) “
Custodian” means the agent or agents of the Depositary (singly or collectively, as the context requires) and any additional or substitute Custodian appointed pursuant to Section 9. 

(e) The terms “deliver”, “execute”, “issue”,
“register”, “surrender”, “transfer” or “cancel”, when used with respect to Direct Registration ADRs, shall refer to an entry or entries or an electronic transfer or transfers in the
Direct Registration System, and, when used with respect to ADRs in physical certificated form, shall refer to the physical delivery, execution, issuance, registration, surrender, transfer or cancellation of certificates representing the ADRs. 

(f) “Delivery Order” is defined in Section 3. 

(g) “Deposited Securities” as of any time means all Shares at such time deposited under this
Deposit Agreement and any and all other Shares, securities, property and cash at such time held by the Depositary or the Custodian in respect or in lieu of such deposited Shares and other Shares, securities, property and cash. 

(h) “Direct Registration System” means the system for the uncertificated registration of
ownership of securities established by The Depository Trust Company (“DTC”) and utilized by the Depositary pursuant to which the Depositary may record the ownership of ADRs without the issuance of a certificate, which ownership
shall be evidenced by periodic statements issued by the Depositary to the Holders entitled thereto. For purposes hereof, the Direct Registration System shall include access to the Profile Modification System maintained by DTC which provides for
automated transfer of ownership between DTC and the Depositary. 
 (i) “Holder” means the
person or persons in whose name an ADR is registered on the ADR Register. 
 (j) “Securities Act of
1933” means the United States Securities Act of 1933, as from time to time amended. 
 (k)
“Securities Exchange Act of 1934” means the United States Securities Exchange Act of 1934, as from time to time amended. 

  
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Table of Contents

 (l) “Shares” mean shares of common stock of the
Company, and shall include the rights to receive Shares specified in paragraph (1) of the form of ADR. 
 (m) “
Transfer Office” is defined in paragraph (3) of the form of ADR. 
 (n) “Unit”
means 100 Shares or such other number of Shares as the Articles of Incorporation of the Company may provide as a “Unit of Shares” for the purpose of the Companies Act of Japan, as such Articles of Incorporation may be amended from time to
time. 
 (o) “Withdrawal Order” is defined in Section 6. 

2. ADRs. (a) ADRs in certificated form shall be engraved, printed or otherwise
reproduced at the discretion of the Depositary in accordance with its customary practices in its American depositary receipt business, or at the request of the Company typewritten and photocopied on plain or safety paper, and shall be substantially
in the form set forth in the form of ADR, with such changes as may be required by the Depositary or the Company to comply with their obligations hereunder, any applicable law, regulation or usage or to indicate any special limitations or
restrictions to which any particular ADRs are subject. ADRs may be issued in denominations of any number of ADSs. ADRs in certificated form shall be executed by the Depositary by the manual or facsimile signature of a duly authorized
officer of the Depositary. ADRs in certificated form bearing the facsimile signature of anyone who was at the time of execution a duly authorized officer of the Depositary shall bind the Depositary, notwithstanding that such officer has ceased
to hold such office prior to the delivery of such ADRs. 
 (b) Direct Registration ADRs. Notwithstanding anything in this
Deposit Agreement or in the form of ADR to the contrary, ADSs shall be evidenced by Direct Registration ADRs, unless certificated ADRs are specifically requested by the Holder. 

(c) Holders shall be bound by the terms and conditions of this Deposit Agreement and of the form of ADR, regardless of whether their ADRs are
Direct Registration ADRs or certificated ADRs. 
 3. Deposit of Shares. In connection with
the deposit of Shares hereunder, the Depositary or the Custodian may require the following in a form satisfactory to it: (a) a written order directing the Depositary to issue to, or upon the written order of, the person or persons designated in such
order a Direct Registration ADR or ADRs evidencing the number of ADSs representing such deposited Shares (a “Delivery Order”); (b) proper endorsements or duly executed instruments of transfer in respect of such deposited Shares; (c)
instruments assigning to the Depositary, the Custodian or a nominee of either any distribution on or in respect of such deposited Shares or indemnity therefor; and (d) proxies entitling the Custodian to vote such deposited Shares. As soon as
practicable after the Custodian receives Deposited Securities pursuant to any such deposit or pursuant to paragraph (10) or (13) of the form of ADR, the Custodian shall present such Deposited Securities for registration of transfer into the name of
the Depositary, the Custodian or a nominee of either, to the extent such registration is practicable, at the cost and expense of the person making such deposit (or for whose benefit such deposit is made) and shall obtain evidence satisfactory to it
of such registration. Deposited Securities shall be held by the Custodian for the account and to the order of the Depositary for the benefit of Holders of ADRs (to the extent not prohibited by law) at such place or places and in such manner as
the Depositary shall determine. Deposited Securities may be delivered by the Custodian to any person only under the circumstances expressly contemplated in this Deposit Agreement. To the extent that the provisions of or governing the
Shares make delivery of certificates therefor impracticable, Shares may be deposited hereunder by such delivery thereof as the Depositary or the Custodian may reasonably accept, including, without limitation, by causing them to be credited to an
account maintained by the Custodian for such purpose with the Company or an accredited intermediary, such as a bank, acting as a registrar for the Shares, together with delivery of the documents, payments and Delivery Order referred to herein to the
Custodian or the Depositary. 
 4. Issue of ADRs. After any such deposit of Shares, the
Custodian shall notify the Depositary of such deposit and of the information contained in any related Delivery Order by letter, first class airmail postage 

  
 2 

Table of Contents

 
prepaid, or, at the request, risk and expense of the person making the deposit, by cable, telex or facsimile transmission. After receiving such notice from the Custodian, the Depositary,
subject to this Deposit Agreement, shall properly issue at the Transfer Office, to or upon the order of any person named in such notice, an ADR or ADRs registered as requested and evidencing the aggregate ADSs to which such person is entitled. 

5. Distributions on Deposited Securities. To the extent that the Depositary determines in its
discretion that any distribution pursuant to paragraph (10) of the form of ADR is not practicable with respect to any Holder, the Depositary may make such distribution as it so deems practicable, including the distribution of foreign currency,
securities or property (or appropriate documents evidencing the right to receive foreign currency, securities or property) or the retention thereof as Deposited Securities with respect to such Holder’s ADRs (without liability for interest
thereon or the investment thereof). 
 6. Withdrawal of Deposited Securities. In connection
with any surrender of an ADR for withdrawal of the Deposited Securities represented by the ADSs evidenced thereby, the Depositary may require proper endorsement in blank of such ADR (or duly executed instruments of transfer thereof in blank) and the
Holder’s written order directing the Depositary to cause the Deposited Securities represented by the ADSs evidenced by such ADR to be withdrawn and delivered to, or upon the written order of, any person designated in such order
(a “Withdrawal Order”). Directions from the Depositary to the Custodian to deliver Deposited Securities shall be given by letter, first class airmail postage prepaid, or, at the request, risk and expense of the Holder, by cable,
telex or facsimile transmission. Delivery of Deposited Securities may be made by the delivery of certificates (which, if required by law shall be properly endorsed or accompanied by properly executed instruments of transfer or, if such
certificates may be registered, registered in the name of such Holder or as ordered by such Holder in any Withdrawal Order) or by such other means as the Depositary may deem practicable, including, without limitation, by transfer of record ownership
thereof to an account designated in the Withdrawal Order maintained either by the Company or an accredited intermediary, such as a bank, acting as a registrar for the Deposited Securities. 

7. Substitution of ADRs. The Depositary shall execute and deliver a new Direct Registration
ADR in exchange and substitution for any mutilated certificated ADR upon cancellation thereof or in lieu of and in substitution for such destroyed, lost or stolen certificated ADR, unless the Depositary has notice that such ADR has been acquired by
a bona fide purchaser, upon the Holder thereof filing with the Depositary a request for such execution and delivery and a sufficient indemnity bond and satisfying any other reasonable requirements imposed by the Depositary. 

8. Cancellation and Destruction of ADRs. All ADRs surrendered to the Depositary shall be
cancelled by the Depositary. The Depositary is authorized to destroy ADRs in certificated form so cancelled in accordance with its customary practices. 

9. The Custodian. Any Custodian in acting hereunder shall be subject to the directions of the
Depositary and shall be responsible solely to it. The Depositary reserves the right to add, replace or remove a Custodian. The Depositary will give prompt notice of any such action, which will be advance notice if practicable. 

Any Custodian may resign from its duties hereunder by at least 30 days written notice to the Depositary. The Depositary may discharge any
Custodian at any time upon notice to the Custodian being discharged. Any Custodian ceasing to act hereunder as Custodian shall deliver, upon the instruction of the Depositary, all Deposited Securities held by it to a Custodian continuing to
act. Notwithstanding anything to the contrary contained in this Deposit Agreement (including the ADRs), the Depositary shall not be responsible for, and shall incur no liability in connection with or arising from, any act or omission to act on
the part of the Custodian except to the extent that the Custodian has (i) committed fraud or willful misconduct in the provision of custodial services to the Depositary or (ii) failed to use reasonable care in the provision of custodial services to
the Depositary as determined in accordance with the standards prevailing in the jurisdiction in which the Custodian is located. 

  
 3 

Table of Contents

 10. Lists of Holders. The Company shall have the
right to inspect transfer records of the Depositary and its agents and the ADR Register, take copies thereof and require the Depositary and its agents to supply copies of such portions of such records as the Company may request. The Depositary
or its agent shall furnish to the Company promptly upon the written request of the Company, a list of the names, addresses and holdings of ADSs by all Holders as of a date within seven days of the Depositary’s receipt of such request. 

11. Depositary’s Agents. The Depositary may perform its obligations under this Deposit
Agreement through any agent appointed by it, provided that the Depositary shall notify the Company of such appointment and shall remain responsible for the performance of such obligations as if no agent were appointed, subject to paragraph (14)
of the form of ADR. 
 12. Successor Depositary. The Depositary may at any time resign as
Depositary hereunder by 90 days prior written notice of its election so to do delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter
provided. The Depositary may at any time be removed by the Company by providing no less than 90 days prior written notice of such removal to the Depositary, such removal to take effect the later of (i) the 90th day after such notice of removal is first provided and (ii) the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided. Notwithstanding the
foregoing, if upon the resignation or removal of the Depositary a successor depositary is not appointed within the applicable 45-day period (in the case of resignation) or 90-day period (in the case of removal) as specified in paragraph (17) of the
form of ADR, then the Depositary may elect to terminate this Deposit Agreement and the ADR and the provisions of said paragraph (17) shall thereafter govern the Depositary’s obligations hereunder. In case at any time the Depositary acting
hereunder shall resign or be removed, the Company shall use its best efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, The City of New York. Every successor
depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed (except as required by applicable law),
shall become fully vested with all the rights, powers, duties and obligations of its predecessor. The predecessor depositary, only upon payment of all sums due to it and on the written request of the Company, shall (i) execute and deliver an
instrument transferring to such successor all rights and powers of such predecessor hereunder (other than its rights to indemnification and fees owing, each of which shall survive any such removal and/or resignation), (ii) duly assign, transfer and
deliver all right, title and interest to the Deposited Securities to such successor, and (iii) deliver to such successor a list of the Holders of all outstanding ADRs. Any such successor depositary shall promptly mail notice of its
appointment to such Holders. Any bank or trust company into or with which the Depositary may be merged or consolidated, or to which the Depositary shall transfer substantially all its American depositary receipt business, shall be the successor
of the Depositary without the execution or filing of any document or any further act. 

13. Reports. On or before the first date on which the Company makes any communication
available to holders of Deposited Securities or any securities regulatory authority or stock exchange, by publication or otherwise, the Company shall transmit to the Depositary a copy thereof in English or with an English translation or
summary. The Company has delivered to the Depositary, the Custodian and any Transfer Office, a copy of all provisions of or governing the Shares and any other Deposited Securities issued by the Company and, promptly upon any change thereto, the
Company shall deliver to the Depositary, the Custodian and any Transfer Office, a copy (in English or with an English translation) of such provisions as so changed. The Depositary and its agents may rely upon the Company’s delivery of all
such communications, information and provisions for all purposes of this Deposit Agreement and the Depositary shall have no liability for the accuracy or completeness of any thereof. 

14. Additional Shares. The Company agrees with the Depositary that neither the Company nor
any company controlling, controlled by or under common control with the Company shall issue additional Shares, rights to subscribe for Shares, securities convertible into or exchangeable for Shares or rights to subscribe for any such securities or
shall deposit any Shares under this Deposit Agreement, except under circumstances complying in all 

  
 4 

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respects with the Securities Act of 1933. At the reasonable request of the Depositary where it deems necessary in each case, in connection with any such proposed deposit or any issuance,
distribution, exchange or offering by the Company of additional Shares, rights or other securities or property to holders of Shares and/or Holders, the Company will furnish the Depositary with legal opinions, in forms and from counsels
reasonably acceptable to the Depositary, dealing with such issues requested by the Depositary. The Depositary will use reasonable efforts to comply with written instructions of the Company not to accept for deposit hereunder any Shares identified in
such instructions at such times and under such circumstances as may reasonably be specified in such instructions in order to facilitate the Company’s compliance with securities laws in the United States. 

15. Indemnification. The Company shall indemnify, defend and save harmless each of the
Depositary, the Custodian and their respective directors, officers, employees, agents and affiliates against any loss, liability or expense (including reasonable fees and expenses of counsel) which may arise out of acts performed or omitted, in
connection with the provisions of this Deposit Agreement and of the ADRs, as the same may be amended, modified or supplemented from time to time in accordance herewith (i) by either the Depositary or a Custodian or their respective directors,
officers, employees, agents and affiliates, except for any such liability or expense directly arising out of the negligence or willful misconduct of the Depositary or its respective directors, officers, employees, agents or affiliates acting in
their capacities as such hereunder, or (ii) by the Company or any of its directors, officers, employees, agents and affiliates. 
 The
indemnities set forth in the preceding paragraph shall also apply to any liability or expense which may arise out of any misstatement or alleged misstatement or omission or alleged omission in any registration statement, proxy statement, prospectus
(or placement memorandum), or preliminary prospectus (or preliminary placement memorandum) relating to the offer or sale of ADSs, except to the extent any such liability or expense arises out of (i) information relating to the Depositary or its
agents (other than the Company), as applicable, furnished in writing by the Depositary expressly for use in any of the foregoing documents and not changed or altered by the Company or any other person (other than the Depositary or its agents (other
than the Company)) or (ii) if such information relating to the Depositary or its agents (other than the Company) provided by the Depositary and not changed or altered by the Company or any other person (other than the Depositary or its agents (other
than the Company)), the failure to state a material fact necessary in order to make the information provided not misleading. 
 Except as
provided in the next succeeding paragraph or in Section 9 hereof, the Depositary shall indemnify, defend and save harmless the Company against any loss, liability or expense (including reasonable fees and expenses of counsel) incurred by the Company
in respect of this Deposit Agreement to the extent such loss, liability or expense is due directly to the negligence or willful misconduct of the Depositary. 

Notwithstanding any other provision of this Deposit Agreement or the ADRs to the contrary, neither the Company nor the Depositary, nor any of
their agents shall be liable to the other for any indirect, special, punitive or consequential damages (including, without limitation, legal fees and expenses) or lost profits (collectively, “Special Damages”), in each case of any form
incurred by any of them or any other person or entity, whether or not foreseeable and regardless of the type of action in which such a claim may be brought, provided, however, that to the extent Special Damages arise from or out of a claim brought
by a third party (including, without limitation, Owners and/or Holders) against the Depositary or any of its agents acting under the Deposit Agreement, the Depositary and its agents shall be entitled to full indemnification from the Company for all
such Special Damages, unless such Special Damages are found to have been a direct result of the gross negligence or willful misconduct of the Depositary. 

The obligations set forth in this Section 15 shall survive the termination of this Deposit Agreement and the succession or substitution of any
indemnified person. 
 16. Notices. Notice to any Holder shall be deemed given when first
mailed, first class postage prepaid, to the address of such Holder on the ADR Register or received by such Holder. Failure to notify a Holder or any defect 

  
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in the notification to a Holder shall not affect the sufficiency of notification to other Holders or to the beneficial owners of ADSs held by such other Holders. Notice to the Depositary or
the Company shall be deemed given when first received by it at the address or facsimile transmission number set forth in (a) or (b), respectively, or at such other address or facsimile transmission number as either may specify to the other by
written notice: 
  

	 	(a)	JPMorgan Chase Bank, N.A. 

 4 New York Plaza, Floor 12 

New York, New York, 10004 

Attention: Depositary Receipts Group 

Fax: +1 (212) 552-1950 
  

	 	(b)	LINE Corporation 

 Shibuya Hikarie 27th FL., 

21-1 Shibuya 2-chome, Shibuya-ku, 

Tokyo, 150-8510, Japan 

Attention: Head of Investor Relations 

Fax: +81 3 5155 3308 

17. Miscellaneous. This Deposit Agreement is for the exclusive benefit of the Company, the
Depositary, the Holders, and their respective successors hereunder, and shall not give any legal or equitable right, remedy or claim whatsoever to any other person. The Holders and owners of ADRs from time to time shall be parties to this
Deposit Agreement and shall be bound by all of the provisions hereof. If any such provision of this Deposit Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, the remaining
provisions shall in no way be affected thereby. This Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one instrument. Delivery of an executed
signature page of this Deposit Agreement by facsimile or other electronic transmission (including “.pdf”, “.tif” or similar format) shall be effective as delivery of a manually executed counterpart hereof. 

18. Governing Law; Consent to Jurisdiction; Agent for Service of Process. This Deposit
Agreement (including the ADRs (which include the provisions set forth on the reverse thereof)) shall be governed by and construed in accordance with the laws of the State of New York. The Company irrevocably agrees that any legal suit, action
or proceeding against the Company brought by the Depositary or any Holder, arising out of or based upon this Deposit Agreement or the transactions contemplated hereby, may be instituted in any state or federal court in New York, New York, and
irrevocably waives, to the extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such proceeding and any right to which such party shall be entitled to on account of place of residence or
domicile, and irrevocably submits to the non exclusive jurisdiction of such courts in any such suit, action or proceeding. The Company also irrevocably agrees that any legal suit, action or proceeding against the Depositary brought by the Company,
arising out of or based upon this Deposit Agreement or the transactions contemplated hereby, may only be instituted in a state or federal court in New York, New York. 

The Company has irrevocably appointed LINE Euro-Americas Corporation, 5750 Wilshire Blvd #640, Los Angeles, California 90036-4494, as its
authorized agent (the “Authorized Agent”) upon which process may be served in any such legal suit, action or proceeding arising out of or based on this Deposit Agreement or the transactions contemplated hereby which may be instituted in
any state or federal court in New York, New York by the Depositary or any Holder, and waives any other requirements of or objections to personal jurisdiction with respect thereto. Such appointment shall be irrevocable. The Company
represents and warrants that the Authorized Agent has agreed to act as said agent for service of process, and the Company agrees to take any and all action, including the filing of any and all documents and instruments, that may be necessary to
continue such appointment in full force and effect as aforesaid. The Company further hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents in any suit, action or proceeding against
the Company, by service by mail of a copy thereof upon the Authorized Agent (whether or not the 

  
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appointment of such Authorized Agent shall for any reason prove to be ineffective or such Authorized Agent shall fail to accept or acknowledge such service), with a copy mailed to the Company by
registered or certified air mail, postage prepaid, to its address provided in Section 16(b) hereof. The Company agrees that the failure of the Authorized Agent to give any notice of such service to it shall not impair or affect in any way the
validity of such service or any judgment or award rendered in any action or proceeding based thereon. If, for any reason, the Authorized Agent named above or its successor shall no longer serve as agent of the Company to receive service of
process, the Company shall promptly appoint a successor that is acceptable to the Depositary, so as to serve as Authorized Agent hereunder and will promptly advise the Depositary thereof. In the event the Company fails to continue such
designation and appointment in full force and effect, the Company hereby waives personal service of process upon it and consents that any such service of process may be made by certified or registered mail, return receipt requested, directed to the
Company at its address last specified for notices hereunder, and service of process so made shall be deemed completed five (5) days after the same shall have been so mailed. Notwithstanding the foregoing, any action based on this Deposit Agreement
may be instituted by the Depositary in any competent court in Japan and/or the United States. 
 By holding an ADS or an interest therein,
Holders and owners of ADSs each irrevocably agree that any legal suit, action or proceeding against or involving the Company or the Depositary, arising out of or based upon this Deposit Agreement or the transactions contemplated hereby, may only be
instituted by it in a state or federal court in New York, New York, and by holding an ADS or an interest therein each irrevocably waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably
submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. 
 To the extent that the Company or any of its
properties, assets or revenues may have or may hereafter be entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in respect
thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or from execution of judgment, or other legal process or
proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or other matters under or arising out of or in
connection with the Shares or Deposited Securities, the ADSs, the ADRs or this Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity
and consents to such relief and enforcement. 
 EACH PARTY TO THIS DEPOSIT AGREEMENT (INCLUDING, FOR
AVOIDANCE OF DOUBT, EACH HOLDER AND BENEFICIAL OWNER AND/OR HOLDER OF INTERESTS IN ADRS) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST
THE DEPOSITARY AND/OR THE COMPANY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE ADSs OR THE ADRs, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR
THEREOF (WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR ANY OTHER THEORY). 

  
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 IN WITNESS WHEREOF, LINE CORPORATION and JPMORGAN CHASE BANK,
N.A. have duly executed this Deposit Agreement as of the day and year first above set forth and all holders of ADRs shall become parties hereto upon acceptance by them of ADRs issued in accordance with the terms hereof. 

 

			
	 LINE CORPORATION

		
	 By:
	 	  

	 Name:
	 	
	 Title:
	 	
	
	 JPMORGAN CHASE BANK, N.A.

		
	 By:
	 	  

	 Name:
	 	
	 Title:
	 	Executive Director

  
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 EXHIBIT A 

ANNEXED TO AND INCORPORATED IN 

DEPOSIT AGREEMENT 
 
[FORM OF FACE OF ADR] 
 THE RIGHT OF HOLDERS OF ADRS TO DIRECT THE VOTING OF SHARES MAY BE RESTRICTED AS DESCRIBED IN
PARAGRAPHS (6) AND (12) BELOW. PURSUANT TO THE COMPANIES ACT OF JAPAN AND TO THE COMPANY’S ARTICLES OF INCORPORATION, THE RELEASE OF THE SHARES OF THE COMPANY UNDERLYING THE ADSs REPRESENTED BY THIS ADR MAY BE LIMITED TO A UNIT OF 100 SUCH
SHARES (OR SUCH OTHER NUMBER OF SHARES AS THE ARTICLES OF INCORPORATION MAY FROM TIME TO TIME DESIGNATE AS A “UNIT OF SHARES”) OR INTEGRAL MULTIPLES THEREOF. 
  

			
		  	No. of ADSs:
	Number	  	
		
		  	             Each ADS represents

            one Share

		
		  	            CUSIP:

 AMERICAN DEPOSITARY RECEIPT 

evidencing 
 AMERICAN DEPOSITARY
SHARES 
 representing 
 SHARES
OF COMMON STOCK 
 of 
 LINE
CORPORATION 
 (Incorporated under the laws of Japan) 
  

JPMORGAN CHASE BANK, N.A., a national banking association organized under the laws of the United States of America, as depositary hereunder
(the “Depositary”), hereby certifies that                      is the registered owner (a “Holder”) of American Depositary
Shares (“ADSs”), each (subject to paragraph (13)) representing one share of common stock (including the rights to receive Shares described in paragraph (1), “Shares” and, together with any other securities, cash or property from
time to time held by the Depositary in respect or in lieu of deposited Shares, the “Deposited Securities”), of LINE CORPORATION, a corporation organized under the laws of Japan (the “Company”), deposited under the Deposit
Agreement, dated as of [DATE], 2016 (as amended from time to time, the “Deposit Agreement”), among the Company, the Depositary and all Holders from time to time of American Depositary Receipts issued thereunder (“ADRs”), each of
whom by accepting an ADR becomes a party thereto. The Deposit Agreement and this ADR (which includes the provisions set forth on the reverse hereof) shall be governed by and construed in accordance with the laws of the State of New York. 

  
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 (1) Issuance and Pre-Release of ADSs. This ADR is one of
the ADRs issued under the Deposit Agreement. Subject to the other provisions hereof, the Depositary may so issue ADRs for delivery at the Transfer Office (as hereinafter defined) only against deposit of: (a) Shares in a form satisfactory to the
Custodian; (b) rights to receive Shares from the Company or any registrar, transfer agent, clearing agent or other entity recording Share ownership or transactions; or (c) in accordance with the next paragraph hereof. 

In its capacity as Depositary, the Depositary shall not lend Shares or ADSs; provided, however, that the Depositary may (i) issue ADSs prior
to the receipt of Shares and (ii) deliver Shares prior to the receipt of ADSs for withdrawal of Deposited Securities, including ADSs which were issued under (i) above but for which Shares may not have been received (each such transaction a
“Pre-Release”). The Depositary may receive ADSs in lieu of Shares under (i) above (which ADSs will promptly be canceled by the Depositary upon receipt by the Depositary) and receive Shares in lieu of ADSs under (ii) above. Each
such Pre-Release will be subject to a written agreement whereby the person or entity (the “Applicant”) to whom ADSs or Shares are to be delivered (a) represents that at the time of the Pre-Release the Applicant or its customer beneficially
owns the Shares or ADSs that are to be delivered by the Applicant under such Pre-Release, (b) agrees to indicate the Depositary as owner of such Shares or ADSs in its records and to hold such Shares or ADSs in trust for the Depositary until such
Shares or ADSs are delivered to the Depositary or the Custodian, (c) unconditionally guarantees to deliver to the Depositary or the Custodian, as applicable, such Shares or ADSs, and (d) agrees to any additional restrictions or requirements that the
Depositary deems appropriate. Each such Pre-Release will be at all times fully collateralized with cash, U.S. government securities or such other collateral as the Depositary deems appropriate, terminable by the Depositary on not more than five
(5) business days’ notice and subject to such further indemnities and credit regulations as the Depositary deems appropriate. The Depositary will normally limit the number of ADSs and Shares involved in such Pre-Release at any one time to
thirty percent (30%) of the ADSs outstanding (without giving effect to ADSs outstanding under (i) above), provided, however, that the Depositary reserves the right to change or disregard such limit from time to time as it deems appropriate. The
Depositary may also set limits with respect to the number of ADSs and Shares involved in Pre-Release with any one person on a case-by-case basis as it deems appropriate. The Depositary may retain for its own account any compensation received by
it in conjunction with the foregoing. Collateral provided in connection with Pre-Release transactions, but not the earnings thereon, shall be held for the benefit of the Holders (other than the Applicant). 

Every person depositing Shares under the Deposit Agreement represents and warrants that (a) such Shares and the certificates therefor are duly
authorized, validly issued and outstanding, fully paid, nonassessable and legally obtained by such person, (b) all pre-emptive and comparable rights, if any, with respect to such Shares have been validly waived or exercised, (c) the person making
such deposit is duly authorized so to do, (d) the Shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim and (e) such Shares (A) are not “restricted securities” as
such term is defined in Rule 144 under the Securities Act of 1933 (“Restricted Securities”) unless at the time of deposit the requirements of paragraphs (c), (e), (f) and (h) of Rule 144 shall not apply and such Shares may be freely
transferred and may otherwise be offered and sold freely in the United States or (B) have been registered under the Securities Act of 1933. To the extent the person depositing Shares is an “affiliate” of the Company as such term is
defined in Rule 144, the person also represents and warrants that upon the sale of the ADSs, all of the provisions of Rule 144 which enable the Shares to be freely sold (in the form of ADSs) will be fully complied with and, as a result thereof, all
of the ADSs issued in respect of such Shares will not be on the sale thereof, Restricted Securities. Such representations and warranties shall survive the deposit and withdrawal of Shares and the issuance and cancellation of ADSs in respect
thereof and the transfer of such ADSs. The Depositary will not knowingly accept for deposit under the Deposit Agreement any Shares which would be required to be registered under the Securities Act of 1933 for public offer and sale in the United
States and not so registered in respect thereof. The Depositary may refuse to accept for such deposit any Shares identified by the Company in order to facilitate compliance with the Securities Act of 1933 and the rules and regulations
promulgated thereunder. 

  
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 (2) Withdrawal of Deposited Securities. Subject to
paragraphs (4) and (5), upon (i) surrender of a certificated ADR in a form satisfactory to the Depositary at the Transfer Office or (ii) proper instructions and documentation in the case of a Direct Registration ADR, the Holder hereof is entitled to
delivery at, or to the extent in dematerialized form from, the Custodian’s office of the Deposited Securities at the time represented by the ADSs evidenced by this ADR, provided that the Depositary may deliver Shares prior to the receipt of
ADSs for withdrawal of Deposited Securities, including ADSs which were issued under (1) above but for which Shares may not have been received (until such ADSs are actually deposited, “Pre released Shares”) only if all the conditions in (1)
above related to such Pre-Release are satisfied). At the request, risk and expense of the Holder hereof, the Depositary may deliver such Deposited Securities at such other place as may have been requested by the Holder. Upon surrender of
an ADR or ADRs by a Holder to the Depositary, as a result of, and to the extent required by, the operation of applicable provisions of the Companies Act of Japan, any other applicable Japanese law and regulation, the Company’s Articles of
Incorporation or other similar organizational governing documents of the Company, the Depositary will effect the delivery to such Holder of only that portion of Shares (and/or any other Deposited Securities relating to such Shares) comprising a Unit
or an integral multiple thereof (the “deliverable portion” of such ADR or ADRs). As of the date of the Deposit Agreement, a Unit is comprised of 100 Shares (and/or any other Deposited Securities relating to such 100 Shares). For
the purpose of the foregoing sentence, the deliverable portion shall be determined on the basis of the aggregate number of Shares (and/or any other Deposited Securities relating to such 100 Shares) represented by the entire amount of the ADSs
evidenced by the ADR or ADRs surrendered by the same Holder at the same time. The Depositary will advise such Holder as to the number of Shares and Deposited Securities, if any, represented by the non-deliverable portion of such ADR or ADRs and
shall deliver to such Holder a new ADR evidencing such non-deliverable portion. In addition, the Depositary shall notify such Holder of the additional amount of ADSs which such Holder would be required to surrender in order for the Depositary to
effect delivery of all the Shares and Deposited Securities represented by the ADSs of such Holder. Notwithstanding any other provision of the Deposit Agreement or this ADR, the withdrawal of Deposited Securities may be restricted only for the
reasons set forth in General Instruction I.A.(1) of Form F-6 (as such instructions may be amended from time to time) under the Securities Act of 1933. 

(3) Transfers of ADRs. The Depositary or its agent will keep, at a designated transfer office (the
“Transfer Office”), (a) a register (the “ADR Register”) for the registration, registration of transfer, combination and split-up of ADRs, and, in the case of Direct Registration ADRs, shall include the Direct Registration System,
which at all reasonable times will be open for inspection by Holders and the Company for the purpose of communicating with Holders in the interest of the business of the Company or a matter relating to the Deposit Agreement and (b) facilities
for the delivery and receipt of ADRs. The term ADR Register includes the Direct Registration System. Title to this ADR (and to the Deposited Securities represented by the ADSs evidenced hereby), when properly endorsed (in the case of ADRs
in certificated form) or upon delivery to the Depositary of proper instruments of transfer, is transferable by delivery with the same effect as in the case of negotiable instruments under the laws of the State of New York; provided that the
Depositary, notwithstanding any notice to the contrary, may treat the person in whose name this ADR is registered on the ADR Register as the absolute owner hereof for all purposes and neither the Depositary nor the Company will have any obligation
or be subject to any liability under the Deposit Agreement to any holder of an ADR, unless such holder is the Holder thereof. Subject to paragraphs (4) and (5), this ADR is transferable on the ADR Register and may be split into other ADRs or
combined with other ADRs into one ADR, evidencing the aggregate number of ADSs surrendered for split-up or combination, by the Holder hereof or by duly authorized attorney upon surrender of this ADR at the Transfer Office properly endorsed (in the
case of ADRs in certificated form) or upon delivery to the Depositary of proper instruments of transfer and duly stamped as may be required by applicable law; provided that the Depositary may close the ADR Register at any time or from time to
time when deemed expedient by it or, when reasonably requested by the Company in order for the Company to comply with applicable law. At the request of a Holder, the Depositary shall, for the purpose of substituting a certificated ADR with a
Direct Registration ADR, or vice versa, execute and deliver a certificated ADR or a Direct Registration ADR, as the case may be, for any authorized number of ADSs requested, evidencing the same aggregate number of ADSs as those evidenced by the
certificated ADR or Direct Registration ADR, as the case may be, substituted. 

  
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 (4) Certain Limitations. Prior to the issue, registration,
registration of transfer, split-up or combination of any ADR, the delivery of any distribution in respect thereof, or, subject to the last sentence of paragraph (2), the withdrawal of any Deposited Securities, and from time to time in the
case of clause (b)(ii) of this paragraph (4), the Company, the Depositary or the Custodian may require: (a) payment with respect thereto of (i) any stock transfer or other tax or other governmental charge, (ii) any stock transfer or registration
fees in effect for the registration of transfers of Shares or other Deposited Securities upon any applicable register and (iii) any applicable charges as provided in paragraph (7) of this ADR; (b) the production of proof satisfactory to it of
(i) the identity of any signatory and genuineness of any signature and (ii) such other information, including without limitation, information as to citizenship, residence, exchange control approval, beneficial ownership of any securities,
compliance with applicable law, regulations, provisions of or governing Deposited Securities and terms of the Deposit Agreement and this ADR, as it may deem necessary or proper; and (c) compliance with such regulations as the Depositary may
establish consistent with the Deposit Agreement or any U.S., Japanese or other law, rule or regulation. The issuance of ADRs, the acceptance of deposits of Shares, the registration, registration of transfer, split up or combination of ADRs or,
subject to the last sentence of paragraph (2), the withdrawal of Deposited Securities may be suspended, generally or in particular instances, when the ADR Register or any register for Deposited Securities is closed or when any such action is deemed
advisable by the Depositary or when requested by the Company in order to comply with applicable law. 
 (5)
Taxes. If any tax or other governmental charges (including any penalties and/or interest) shall become payable by or on behalf of the Custodian or the Depositary with respect to this ADR, any Deposited Securities represented by the ADSs
evidenced hereby or any distribution thereon, such tax or other governmental charge shall be paid by the Holder hereof to the Depositary, and the Depositary shall have no liability therefor, and by holding or having held an ADR the Holder and all
prior Holders hereof, jointly and severally, agree to indemnify, defend and save harmless each of the Company, the Depositary and their agents in respect thereof. The Depositary may refuse to effect any registration, registration of transfer,
split up or combination hereof or, subject to the last sentence of paragraph (2), any withdrawal of such Deposited Securities until such payment is made. The Depositary may also deduct from any distributions on or in respect of Deposited
Securities, or may sell by public or private sale for the account of the Holder hereof any part or all of such Deposited Securities (after attempting by reasonable means to notify the Holder hereof prior to such sale), and may apply such deduction
or the proceeds of any such sale in payment of such tax or other governmental charge, the Holder hereof remaining liable for any deficiency, and shall reduce the number of ADSs evidenced hereby to reflect any such sales of Shares. In connection
with any distribution to Holders, the Company will remit to the appropriate governmental authority or agency all amounts (if any) required to be withheld and owing to such authority or agency by the Company; and the Depositary and the Custodian will
remit to the appropriate governmental authority or agency all amounts (if any) required to be withheld and owing to such authority or agency by the Depositary or the Custodian. If the Depositary determines that any distribution in property
other than cash (including Shares or rights) on Deposited Securities is subject to any tax that the Depositary or the Custodian is obligated to withhold, the Depositary may dispose of all or a portion of such property in such amounts and in such
manner as the Depositary deems necessary and practicable to pay such taxes, by public or private sale, and the Depositary shall distribute the net proceeds of any such sale or the balance of any such property after deduction of such taxes to the
Holders entitled thereto. Each Holder of an ADR or an interest therein agrees to indemnify the Depositary, the Company, the Custodian and any of their respective officers, directors, employees, agents and affiliates against, and hold each of
them harmless from, any claims by any governmental authority with respect to taxes, additions to tax, penalties or interest arising out of any refund of taxes, reduced rate of withholding at source or other tax benefit obtained. 

(6) Disclosure of Interests. To the extent that the provisions of or governing any Deposited Securities
may require disclosure of or impose limits on beneficial or other ownership of Deposited Securities, other Shares and other securities and may provide for blocking transfer, voting or other rights to enforce such disclosure or limits, Holders and
all persons holding ADRs agree to comply with all such disclosure requirements, including, without limitation, requirements of Japanese law, and ownership limitations and to comply with any reasonable Company instructions in respect
thereof. The Company reserves the right to instruct Holders to deliver their ADSs for 

  
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cancellation and withdrawal of the Deposited Securities so as to permit the Company to deal directly with the Holder thereof as a holder of Shares and Holders agree to comply with such
instructions. The Depositary agrees to cooperate with the Company in its efforts to inform Holders of the Company’s exercise of its rights under this paragraph and agrees to consult with, and provide reasonable assistance without risk,
liability or expense on the part of the Depositary, to the Company on the manner or manners in which it may enforce such rights with respect to any Holder. The Company and/or the Depositary may from time to time request Holders or beneficial
owners of an interest in ADRs to provide information as to the capacity in which such Holders own or owned ADRs and regarding the identity of any other persons then or previously having a beneficial interest in such ADRs and the nature of such
interest and various other matters. Each Holder and beneficial owner of an interest in ADRs agrees to provide any information requested by the Company or the Depositary pursuant to this paragraph (6). The Depositary agrees to comply with
reasonable written instructions received from time to time from the Company requesting that the Depositary forward any such requests to the Holders and to forward to the Company any responses to such requests received by the Depositary. 

Without prejudice to the requirements of applicable law concerning disclosure of beneficial ownership of Shares, any Beneficial Owner (as
defined below) who becomes, or ceases to be, directly or indirectly, the Beneficial Owner of more than 5% of all outstanding Shares (whether such interest is held in whole or only in part through ADRs) shall, within five days (excluding Saturdays,
Sundays and legal holidays in Japan) following such event, send written notice to the Depositary at its Transfer Office and to the Company at its principal office in Japan currently at Shibuya Hikarie, 27th Floor, 21-1 Shibuya 2-chome, Shibuya-ku,
Tokyo, 150-8510, Japan, Attention: Head of Investor Relations containing the following information: 
 (i) the name, address and nationality
of such Beneficial Owner and all other persons by whom or on whose behalf such Shares have been acquired or are held; the number of ADSs, total Shares and total Share equivalents (as defined below) (including ADSs) beneficially owned, directly or
indirectly, by such Beneficial Owner immediately before and immediately after the event requiring notification; the names and addresses of any persons other than the Depositary, the Custodian, or either of their nominees, through whom such
beneficially owned Shares (including Share equivalents; in this paragraph (6) the same shall apply hereafter as the context so requires) are held, or in whose name such Shares are registered in the Company’s shareholders’ register, and the
respective numbers of Shares beneficially held through each such person; the date or dates of acquisition of the beneficial interest in such Shares; and the number of any Shares in which such Beneficial Owner has the right to acquire, directly or
indirectly, beneficial ownership and material information as to such right(s) of acquisition; and 
 (ii) the names, addresses and
nationalities of any persons with whom such Beneficial Owner is acting as a partnership, limited partnership, syndicate or other group for the purpose of acquiring, holding, voting or disposing of a beneficial interest in Shares; and the number of
Shares being acquired, held, voted or disposed of as a result of such association (being the total number held by such group). 
 Any
Beneficial Owner of more than 5% of all outstanding Shares shall promptly notify the Depositary and the Company as provided above of any material change in the information previously notified, including, without limitation, a change of 1% or
more of the percentage of total Shares to which the beneficial ownership relates. 
 As used herein, the “Beneficial Owner” means
a person who, directly or indirectly, through any contract, trust, arrangement, understanding, relationship, or otherwise, has an interest in any Shares, including any Shares which underlie any ADS issued under the Deposit Agreement (including
having the right to exercise or control the exercise of any right conferred by the holding of such Shares or the power to vote or to direct voting or the power to dispose or to direct disposition), and includes any Holder of an ADS. 

(b) Without prejudice to the requirements of applicable law and the provisions of the Company’s Articles of Incorporation, any Beneficial
Owner shall, if so requested in writing by the Company, provide such information with respect to the beneficial ownership of Shares (including not only Shares underlying ADSs, but also any 

  
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other Shares in which such Beneficial Owner has an interest and including any security convertible into, exchangeable for or exercisable for Shares) by such Beneficial Owner as is requested by
the Company. Such Beneficial Owner shall provide such information to the Company in writing within the time specified by the Company. Copies of any such request and responses shall be contemporaneously sent to the Depositary at its Transfer
Office. 
 As used herein, “Share equivalent” means securities convertible into, exchangeable for Shares, bonds with stock
acquisition rights and stock acquisition rights to acquire Shares, and the number of Shares attributable to such Share equivalent shall be the number of Shares into which such securities are convertible or exchangeable or which are acquired upon
exercising the stock acquisition rights, at the conversion, exchange or exercise price or rate applicable at the time of determination of the relevant beneficial ownership. 

In calculating the percentage ownership of the Beneficial Owner, the number of Shares which are issuable upon conversion or exchange of
securities or upon exercise of the stock acquisition rights beneficially owned by the Beneficial Owner shall be added to both the numerator and the denominator of the fraction of which the numerator is the total number of Shares beneficially owned
by the Beneficial Owner and the denominator of which is the total number of the outstanding Shares. 
 (c) If the Company notifies the
Depositary in writing that a particular Beneficial Owner has not complied with subsections (a) or (b) above, at the Company’s written request, and so long as the Company has provided the Depositary with Beneficial Owner contact details, the
Depositary shall instruct the Beneficial Owner to surrender its ADSs for cancellation so as to permit the Company to deal directly with such Beneficial Owner as a shareholder of the Company. Holders and Beneficial Owners agree to comply with such
requests. 
 (7) Charges of Depositary. The Depositary may charge, and collect from, (i)
each person to whom ADSs are issued, including, without limitation, issuances against deposits of Shares, issuances in respect of Share Distributions, Rights and Other Distributions (as such terms are defined in paragraph (10)), issuances pursuant
to a stock dividend or stock split declared by the Company, or issuances pursuant to a merger, exchange of securities or any other transaction or event affecting the ADSs or the Deposited Securities, and (ii) each person surrendering ADSs for
withdrawal of Deposited Securities or whose ADSs are cancelled or reduced for any other reason, up to U.S.$5.00 for each 100 ADSs (or portion thereof) issued, delivered, reduced, cancelled or surrendered (as the case may be). The Depositary may sell
(by public or private sale) sufficient securities and property received in respect of Share Distributions, Rights and Other Distributions prior to such deposit to pay such charge. The following additional charges shall be incurred by the
Holders, by any party depositing or withdrawing Shares or by any party surrendering ADSs and/or to whom ADSs are issued (including, without limitation, issuances pursuant to a stock dividend or stock split declared by the Company or an exchange of
stock regarding the ADSs or the Deposited Securities or a distribution of ADSs pursuant to paragraph (10)), whichever is applicable (i) a fee of U.S.$0.05 or less per ADS for any Cash distribution made pursuant to the Deposit Agreement, (ii) a fee
of U.S.$1.50 per ADR or ADRs for transfers made pursuant to paragraph (3) hereof, (iii) a fee for the distribution or sale of securities pursuant to paragraph (10) hereof, such fee being in an amount equal to the fee for the execution and delivery
of ADSs referred to above which would have been charged as a result of the deposit of such securities (for purposes of this paragraph (7) treating all such securities as if they were Shares) but which securities or the net cash proceeds from the
sale thereof are instead distributed by the Depositary to Holders entitled thereto, (iv) an aggregate fee of U.S.$0.05 per ADS per calendar year (or portion thereof) for services performed by the Depositary in administering the ADRs (which
fee may be charged on a periodic basis during each calendar year and shall be assessed against Holders as of the record date or record dates set by the Depositary during each calendar year and shall be payable at the sole discretion of the
Depositary by billing such Holders or by deducting such charge from one or more cash dividends or other cash distributions), and (v) a fee for the reimbursement of such fees, charges and expenses as are incurred by the Depositary and/or any of its
agents (including, without limitation, the Custodian and expenses incurred on behalf of Holders in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in connection with the
servicing of the Shares or other Deposited Securities, the sale of securities (including, without limitation, Deposited Securities), the delivery of Deposited 

  
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Securities or otherwise in connection with the Depositary’s or its Custodian’s compliance with applicable law, rule or regulation (which fees and charges shall be assessed on a
proportionate basis against Holders as of the record date or dates set by the Depositary and shall be payable at the sole discretion of the Depositary by billing such Holders or by deducting such charge from one or more cash dividends or other cash
distributions). The Company will pay all other charges and expenses of the Depositary and any agent of the Depositary (except the Custodian) pursuant to agreements from time to time between the Company and the Depositary, except (i) stock
transfer or other taxes and other governmental charges (which are payable by Holders or persons depositing Shares), (ii) cable, telex and facsimile transmission and delivery charges incurred at the request of persons depositing, or Holders
delivering Shares, ADRs or Deposited Securities (which are payable by such persons or Holders), (iii) transfer or registration fees for the registration or transfer of Deposited Securities on any applicable register in connection with the
deposit or withdrawal of Deposited Securities (which are payable by persons depositing Shares or Holders withdrawing Deposited Securities; there are no such fees in respect of the Shares as of the date of the Deposit Agreement), and (iv) in
connection with the conversion of foreign currency into U.S. dollars, JPMorgan Chase Bank, N.A. shall deduct out of such foreign currency the fees and expenses and other charges charged by it and/or its agent (which may be a division, branch or
affiliate) so appointed in connection with such conversion. JPMorgan Chase Bank, N.A. and/or its agent may act as principal for such conversion of foreign currency. Such charges may at any time and from time to time be changed by agreement
between the Company and the Depositary. For further details see https://www.adr.com. The information that is contained on or that can be accessed through this website is not part of, or deemed to be incorporated by reference in,
this ADR or the prospectus included in Part I of the Registration Statement on Form F-6 for the ADSs, which consists of this form of ADR, or any other registration statement, prospectus or preliminary prospectus relating to the offer or sale of
ADSs. 
 The Depositary anticipates reimbursing the Company for certain expenses incurred by the Company that are related to the
establishment and maintenance of the ADR program upon such terms and conditions as the Company and the Depositary may agree from time to time. The Depositary may also make available to the Company a set amount or a portion of the Depositary
fees charged in respect of the ADR program or otherwise upon such terms and conditions as the Company and the Depositary may agree from time to time. 

The right of the Depositary to receive payment of fees, charges and expenses as provided above shall survive the termination of the Deposit
Agreement. As to any Depositary, upon the resignation or removal of such Depositary, such right shall extend for those fees, charges and expenses incurred prior to the effectiveness of such resignation or removal. 

(8) Available Information. The Deposit Agreement, the provisions of or governing Deposited
Securities and any written communications from the Company, which are both received by the Custodian or its nominee as a holder of Deposited Securities and made generally available to the holders of Deposited Securities, are available for inspection
by Holders at the offices of the Depositary and the Custodian and at the Transfer Office. The Depositary will distribute copies of such communications (or English translations or summaries thereof) to Holders when furnished by the
Company. The Company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934 and accordingly files certain reports with the United States Securities and Exchange Commission (the
“Commission”). Such reports and other information are available for inspection and copying through the Commission’s EDGAR system or at public reference facilities maintained by the Commission located at the date hereof at 100 F
Street, NE, Washington, DC 20549. 
 (9) Execution. This ADR shall not be valid for any purpose
unless executed by the Depositary by the manual or facsimile signature of a duly authorized officer of the Depositary. 
 Dated: 

 

			
	JPMORGAN CHASE BANK, N.A., as Depositary
		
	By	 	  

	Authorized Officer

  
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 The Depositary’s office is located at 4 New York Plaza,
Floor 12, New York, New York, 10004. 
 [FORM OF REVERSE OF ADR] 

(10) Distributions on Deposited Securities. Subject to paragraphs (4) and (5), to the extent
practicable, the Depositary will distribute to each Holder entitled thereto on the record date set by the Depositary therefor at such Holder’s address shown on the ADR Register, in proportion to the number of Deposited Securities (on which the
following distributions on Deposited Securities are received by the Custodian) represented by ADSs evidenced by such Holder’s ADRs: (a) Cash. Subject to any restrictions imposed by the laws of Japan or any other jurisdiction, and
any regulations or applicable permits issued or required to be obtained by any governmental body, any U.S. dollars available to the Depositary resulting from a cash dividend or other cash distribution (or the conversion thereof) or the net proceeds
of sales of any other distribution or portion thereof (or the conversion thereof) authorized in this paragraph (10) (“Cash”), on an averaged or other practicable basis, subject to (i) appropriate adjustments for taxes withheld, (ii)
such distribution being impermissible or impracticable with respect to certain Holders, and (iii) deduction of the Depositary’s and/or its agents’ fees and expenses in (1) converting any foreign currency to U.S. dollars by sale or in
such other manner as the Depositary may determine to the extent that it determines that such conversion may be made on a reasonable basis, (2) transferring foreign currency or U.S. dollars to the United States by such means as the Depositary
may determine to the extent that it determines that such transfer may be made on a reasonable basis, (3) obtaining any approval or license of any governmental authority required for such conversion or transfer, which is obtainable at a reasonable
cost and within a reasonable time and (4) making any sale by public or private means in any commercially reasonable manner. (b) Shares. (i) Additional ADRs evidencing whole ADSs representing any Shares available to the Depositary
resulting from a dividend or free distribution on Deposited Securities consisting of Shares (a “Share Distribution”) and (ii) U.S. dollars available to it resulting from the net proceeds of sales of Shares received in a Share Distribution,
which Shares would give rise to fractional ADSs if additional ADRs were issued therefor, as in the case of Cash. (c) Rights. (i) Warrants or other instruments in the discretion of the Depositary representing rights to acquire additional
ADRs in respect of any rights to subscribe for additional Shares or rights of any nature available to the Depositary as a result of a distribution on Deposited Securities (“Rights”), to the extent that the Company timely furnishes to the
Depositary evidence satisfactory to the Depositary that the Depositary may lawfully distribute the same (the Company has no obligation to so furnish such evidence), or (ii) to the extent the Company does not so furnish such evidence and sales of
Rights are practicable, any U.S. dollars available to the Depositary from the net proceeds of sales of Rights as in the case of Cash, or (iii) to the extent the Company does not so furnish such evidence and such sales cannot practicably be
accomplished by reason of the nontransferability of the Rights, limited markets therefor, their short duration or otherwise, nothing (and any Rights may lapse). (d) Other Distributions. (i) Securities or property available to the
Depositary resulting from any distribution on Deposited Securities other than Cash, Share Distributions and Rights (“Other Distributions”), by any means that the Depositary may deem equitable and practicable, or (ii) to the extent the
Depositary deems distribution of such securities or property not to be equitable and practicable, any U.S. dollars available to the Depositary from the net proceeds of sales of Other Distributions as in the case of Cash. The Depositary reserves
the right to utilize a division, branch or affiliate of JPMorgan Chase Bank, N.A. to direct, manage and/or execute any public and/or private sale of securities hereunder. Such division, branch and/or affiliate may charge the Depositary a fee in
connection with such sales, which fee is considered an expense of the Depositary contemplated above and/or under paragraph (7) hereof. Any U.S. dollars available will be distributed by checks drawn on a bank in the United States for whole
dollars and cents. Fractional cents will be withheld without liability and dealt with by the Depositary in accordance with its then current practices. All purchases and sales of securities will be handled by the Depositary in accordance
with its then current policies, which are currently set forth in the “Depositary Receipt Sale and Purchase of Security” section of https://www.adr.com/Investors/FindOutAboutDRs, the location and contents of which the Depositary shall be
solely responsible for. The information that is contained on or that can be accessed through this website is not part of, or deemed to be incorporated by reference in, this ADR or the prospectus included in Part I of the Registration Statement
on Form F-6 for the ADSs, which consists of this form of ADR, or any other registration statement, prospectus or preliminary prospectus relating to the offer or sale of ADSs. 

  
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 (11) Record Dates. The Depositary may, after
consultation with the Company if practicable, fix a record date (which, to the extent applicable, shall be as near as practicable to any corresponding record date set by the Company) for the determination of the Holders who shall be responsible for
the fee assessed by the Depositary for administration of the ADR program and for any expenses provided for in paragraph (7) hereof as well as for the determination of the Holders who shall be entitled to receive any distribution on or in respect of
Deposited Securities, to give instructions for the exercise of any voting rights, to receive any notice or to act in respect of other matters and only such Holders shall be so entitled or obligated. 

(12) Voting of Deposited Securities. As soon as practicable after receipt from the Company of
notice of any meeting or solicitation of consents or proxies of holders of Shares or other Deposited Securities, the Depositary shall distribute to Holders a notice stating (a) such information as is contained in such notice and any solicitation
materials, (b) that each Holder on the record date set by the Depositary therefor will, subject to any applicable provisions of the laws, rules and regulations of the United States, Japan or any other country, the Articles of Incorporation of the
Company or other similar organizational governing documents of the Company, be entitled to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securities represented by the ADSs evidenced by such
Holder’s ADRs and (c) the manner in which such instructions may be given or deemed to have been given, including instructions to give a discretionary proxy to a person designated by the Company. Upon actual receipt by the ADR department of
the Depositary of instructions of a Holder on such record date in the manner and on or before the time established by the Depositary for such purpose, the Depositary shall endeavor insofar as practicable and permitted under the provisions of or
governing Deposited Securities to vote or cause to be voted the Deposited Securities represented by the ADSs evidenced by such Holder’s ADRs in accordance with such instructions. Under Japanese law in effect as of the date of the Deposit
Agreement, votes may only be cast in respect of a Unit of Shares, currently consisting of 100 Shares. So long as under the Articles of Incorporation or other similar document of the Company and Japanese law votes may only be cast in respect of one
or more whole Units of Shares, (i) the same instructions received from Holders shall be aggregated and the Depositary shall, subject to applicable law and market practice, endeavor to vote or cause to be voted the number of whole Units in respect of
which such instructions as so aggregated have been received, in accordance with such instructions, and (ii) such Holders acknowledge and agree that, if the Depositary has received the same instructions any portion of which, after aggregation of all
such instructions, constitutes instructions with respect to less than a whole Unit of Shares, the Depositary will be unable to vote or cause to be voted the Shares to which such portion of the instructions applies. The Depositary will not itself
exercise any voting discretion in respect of any Deposited Securities. There is no guarantee that Holders generally or any Holder in particular will receive the notice described above with sufficient time to enable such Holder to return any
voting instructions to the Depositary in a timely manner. Notwithstanding anything contained in the Deposit Agreement or any ADR, the Depositary may, to the extent not prohibited by law or regulations, or by the requirements of the stock
exchange on which the ADSs are listed, in lieu of distribution of the materials provided to the Depositary in connection with any meeting of, or solicitation of consents or proxies from, holders of Deposited Securities, distribute to the Holders a
notice that provides Holders with, or otherwise publicizes to Holders, instructions on how to retrieve such materials or receive such materials upon request (i.e., by reference to a website containing the materials for retrieval or a
contact for requesting copies of the materials). Holders are strongly encouraged to forward their voting instructions as soon as possible. Voting instructions will not be deemed received until such time as the ADR department responsible
for proxies and voting has received such instructions notwithstanding that such instructions may have been physically received by JPMorgan Chase Bank, N.A., as Depositary, prior to such time. 

(13) Changes Affecting Deposited Securities. Subject to paragraphs (4) and (5), the
Depositary may, in its discretion, and shall if reasonably requested by the Company, amend this ADR or distribute additional or amended ADRs (with or without calling this ADR for exchange) or cash, securities or property on the record date set by
the Depositary therefor to reflect any change in par value, split up, consolidation, cancellation or other reclassification of Deposited Securities, any Share Distribution or Other Distribution not distributed to Holders or any cash, securities or
property available to the Depositary in respect of Deposited Securities from (and the Depositary is hereby authorized to surrender any Deposited Securities to any person and, irrespective of whether 

  
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such Deposited Securities are surrendered or otherwise cancelled by operation of law, rule, regulation or otherwise, to sell by public or private sale any property received in connection with)
any recapitalization, reorganization, merger, consolidation, liquidation, receivership, bankruptcy or sale of all or substantially all the assets of the Company, and to the extent the Depositary does not so amend this ADR or make a distribution to
Holders to reflect any of the foregoing, or the net proceeds thereof, whatever cash, securities or property results from any of the foregoing shall constitute Deposited Securities and each ADS evidenced by this ADR shall automatically represent its
pro rata interest in the Deposited Securities as then constituted. Promptly upon the occurrence of any of the aforementioned changes affecting Deposited Securities, the Company shall notify the Depositary in writing of such occurrence and as
soon as practicable after receipt of such notice from the Company, may instruct the Depositary to give notice thereof, at the Company’s expense, to Holders in accordance with the provisions hereof. Upon receipt of such instruction, the
Depositary shall give notice to the Holders in accordance with the terms thereof, as soon as reasonably practicable. 
 
(14) Exoneration. The Depositary, the Company, their agents and each of them shall: (a) incur no liability (i) if any present or future law, rule, regulation, fiat, order or decree of the United States, Japan or any other
country, or of any governmental or regulatory authority or any securities exchange or market or automated quotation system, the provisions of or governing any Deposited Securities, any present or future provision of the Company’s charter, any
act of God, war, terrorism, nationalization or other circumstance beyond its control shall prevent or delay, or shall cause any of them to be subject to any civil or criminal penalty in connection with, any act which the Deposit Agreement or this
ADR provides shall be done or performed by it or them (including, without limitation, voting pursuant to paragraph (12) hereof), or (ii) by reason of any exercise or failure to exercise any discretion given it in the Deposit Agreement or this ADR
(including, without limitation, any failure to determine that any distribution or action may be lawful or reasonably practicable); (b) assume no liability except to perform its obligations to the extent they are specifically set forth in this ADR
and the Deposit Agreement without gross negligence or willful misconduct; (c) in the case of the Depositary and its agents, be under no obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited
Securities or this ADR; (d) in the case of the Company and its agents hereunder be under no obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or this ADR, which in its opinion
may involve it in expense or liability, unless indemnity satisfactory to it against all expense (including fees and disbursements of counsel) and liability be furnished as often as may be required; or (e) not be liable for any action or inaction by
it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, or any other person believed by it to be competent to give such advice or information. The Depositary shall
not be liable for the acts or omissions made by, or the insolvency of, any securities depository, clearing agency or settlement system. The Depositary shall not be responsible for, and shall incur no liability in connection with or arising
from, the insolvency of any Custodian that is not a branch or affiliate of JPMorgan Chase Bank, N.A. The Depositary and its agents shall not have any liability for the price received in connection with any sale of securities, the timing thereof
or any delay in action or omission to act nor shall it be responsible for any error or delay in action, omission to act, default or negligence on the part of the party so retained in connection with any such sale or proposed sale, in each case,
including, without limitation, any ADSs, any Shares and/or any Deposited Securities. Notwithstanding anything to the contrary contained in the Deposit Agreement or this ADR, subject to the penultimate sentence of this paragraph (14) the
Depositary shall not be responsible for, and shall incur no liability in connection with or arising from, any act or omission to act on the part of the Custodian except to the extent that the Custodian has (i) committed fraud or willful
misconduct in the provision of custodial services to the Depositary or (ii) failed to use reasonable care in the provision of custodial services to the Depositary as determined in accordance with the standards prevailing in the jurisdiction in which
the Custodian is located. The Depositary, its agents and the Company may rely and shall be protected in acting upon any written notice, request, direction, instruction or document believed by them to be genuine and to have been signed,
presented or given by the proper party or parties. The Depositary shall be under no obligation to inform Holders or any other holders of an interest in any ADSs about the requirements of U.S., Japanese or other law, rules or regulations or any
changes therein or thereto. The Depositary and its agents will not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, for the manner in which any such vote is cast or for the effect of any such

  
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vote. The Depositary may rely upon instructions from the Company or its counsel in respect of any approval or license required for any currency conversion, transfer or distribution. The
Depositary and its agents may own and deal in any class of securities of the Company and its affiliates and in ADRs. Notwithstanding anything to the contrary set forth in the Deposit Agreement or an ADR, the Depositary and its agents may fully
respond to any and all demands or requests for information maintained by or on its behalf in connection with the Deposit Agreement, any Holder or Holders, any ADR or ADRs or otherwise related hereto or thereto to the extent such information is
requested or required by or pursuant to any lawful authority, including without limitation laws, rules, regulations, administrative or judicial process, banking, securities or other regulators. None of the Depositary, the Custodian or the
Company shall be liable for the failure by any Holder or beneficial owner to obtain the benefits of credits on the basis of non-U.S. tax paid against such Holder’s or beneficial owner’s income tax liability. The Depositary and the
Company shall not incur any liability for any tax consequences that may be incurred by Holders and beneficial owners on account of their ownership of the ADRs or ADSs. The Depositary shall not incur any liability for the content of any
information submitted to it by or on behalf of the Company for distribution to the Holders or for any inaccuracy of any translation thereof, for any investment risk associated with acquiring an interest in the Deposited Securities, for the validity
or worth of the Deposited Securities, for the credit-worthiness of any third party, for allowing any rights to lapse upon the terms of the Deposit Agreement or for the failure or timeliness of any notice from the Company. The Depositary shall
not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary,
provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without negligence or willful misconduct while it acted as Depositary. By holding an ADS or an interest therein, Holders
and owners of ADSs each irrevocably agree that any legal suit, action or proceeding against or involving the Company or the Depositary, arising out of or based upon the Deposit Agreement or the transactions contemplated hereby, may only be
instituted in a state or federal court in New York, New York, and by holding an ADS or an interest therein each irrevocably waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably
submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. The Company has agreed to indemnify the Depositary and its agents under certain circumstances and the Depositary has agreed to indemnify the Company
and its agents under certain circumstances. Neither the Depositary nor any of its agents shall be liable to Holders or beneficial owners of interests in ADSs for any indirect, special, punitive or consequential damages (including, without
limitation, legal fees and expenses) or lost profits, in each case of any form incurred by any person or entity, whether or not foreseeable and regardless of the type of action in which such a claim may be brought. No disclaimer of liability
under the Securities Act of 1933 is intended by any provision hereof. 
 (15) Resignation and
Removal of Depositary; the Custodian. The Depositary may resign as Depositary by written notice of its election to do so delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its
acceptance of such appointment as provided in the Deposit Agreement. The Depositary may at any time be removed by the Company by no less than 90 days prior written notice of such removal, to become effective upon the later of (i) the date
specified in such notice which shall not be earlier than the 90th day after delivery of the notice to the Depositary and (ii) the appointment of a successor depositary and its acceptance of such
appointment as provided in the Deposit Agreement. The Depositary may appoint substitute or additional Custodians and the term “Custodian” refers to each Custodian or all Custodians as the context requires. 

(16) Amendment. Subject to the last sentence of paragraph (2), the ADRs and the Deposit
Agreement may be amended by the Company and the Depositary, provided that any amendment that imposes or increases any fees or charges (other than stock transfer or other taxes and other governmental charges, transfer or registration fees,
cable, telex or facsimile transmission costs, delivery costs or other such expenses), or that shall otherwise prejudice any substantial existing right of Holders, shall become effective 30 days after notice of such amendment shall have been given to
the Holders. Every Holder of an ADR at the time any amendment to the Deposit Agreement so becomes effective shall be deemed, by continuing to hold such ADR, to consent and agree to such amendment and to be bound by the Deposit Agreement as
amended thereby. In no event shall any 

  
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amendment impair the right of the Holder of any ADR to surrender such ADR and receive the Deposited Securities represented thereby, except in order to comply with mandatory provisions of
applicable law. Any amendments or supplements which (i) are reasonably necessary (as agreed by the Company and the Depositary) in order for (a) the ADSs to be registered on Form F-6 under the Securities Act of 1933 or (b) the ADSs or Shares to
be traded solely in electronic book-entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by Holders, shall be deemed not to prejudice any substantial rights of Holders. Notwithstanding the foregoing,
if any governmental body or regulatory body should adopt new laws, rules or regulations which would require amendment or supplement of the Deposit Agreement or the form of ADR to ensure compliance therewith, the Company and the Depositary may amend
or supplement the Deposit Agreement and the ADR at any time in accordance with such changed laws, rules or regulations. Such amendment or supplement to the Deposit Agreement in such circumstances may become effective before a notice of such
amendment or supplement is given to Holders or within any other period of time as required for compliance. Notice of any amendment to the Deposit Agreement or form of ADRs shall not need to describe in detail the specific amendments effectuated
thereby, and failure to describe the specific amendments in any such notice shall not render such notice invalid, provided, however, that, in each such case, the notice given to the Holders identifies a means for Holders to retrieve or receive the
text of such amendment (i.e., upon retrieval from the U.S. Securities and Exchange Commission’s, the Depositary’s or the Company’s website or upon request from the Depositary). 

(17) Termination. The Depositary may, and shall at the written direction of the Company,
terminate the Deposit Agreement and this ADR by mailing notice of such termination to the Holders at least 30 days prior to the date fixed in such notice for such termination; provided, however, if the Depositary shall have (i) resigned as
Depositary hereunder, notice of such termination by the Depositary shall not be provided to Holders unless a successor depositary shall not be operating hereunder within 45 days of the date of such resignation, or (ii) been removed as Depositary
hereunder, notice of such termination by the Depositary shall not be provided to Holders unless a successor depositary shall not be operating hereunder on the 90th day after the Company’s
notice of removal was first provided to the Depositary. If the definition of “Unit” applies and the applicable Japanese rules and regulations restrict delivery of Shares other than in a Unit, then a notice of termination sent to
Holders shall state that (i) the right of a Holder to surrender ADSs and receive delivery of the underlying Shares will be subject to those restrictions and (ii) as a consequence of those restrictions and the fact that transfers of ADSs may not be
registered after the termination date, Holders may wish to dispose of ADSs that do not represent integral Units of Shares prior to the termination date. After the date so fixed for termination, the Depositary and its agents will perform no further
acts under the Deposit Agreement and this ADR, except to receive and hold (or sell) distributions on Deposited Securities and deliver Deposited Securities being withdrawn. As soon as practicable after the expiration of six months from the date
so fixed for termination, the Depositary shall sell the Deposited Securities and shall thereafter (as long as it may lawfully do so) hold in a segregated account the net proceeds of such sales, together with any other cash then held by it under the
Deposit Agreement, without liability for interest, in trust for the pro rata benefit of the Holders of ADRs not theretofore surrendered. After making such sale, the Depositary shall be discharged from all obligations in respect of
the Deposit Agreement and this ADR, except to account for such net proceeds and other cash. After the date so fixed for termination, the Company shall be discharged from all obligations under the Deposit Agreement except for its obligations to
the Depositary and its agents. 
 (18) Appointment. Each Holder and each person holding an
interest in ADSs, upon acceptance of any ADSs (or any interest therein) issued in accordance with the terms and conditions of the Deposit Agreement shall be deemed for all purposes to (a) be a party to and bound by the terms of the Deposit Agreement
and the applicable ADR(s), and (b) appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the Deposit Agreement and the applicable ADR(s), to adopt any and all
procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and the applicable ADR(s), the taking of such
actions to be the conclusive determinant of the necessity and appropriateness thereof. 

  
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Table of Contents

 (19) Waiver. EACH PARTY TO THE DEPOSIT AGREEMENT
(INCLUDING, FOR AVOIDANCE OF DOUBT, EACH HOLDER AND BENEFICIAL OWNER AND/OR HOLDER OF INTERESTS IN ADRS) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR
PROCEEDING AGAINST THE DEPOSITARY AND/OR THE COMPANY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE ADSs OR THE ADRs, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE
BREACH HEREOF OR THEREOF (WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR ANY OTHER THEORY). 

(20) Change in Unit. The Company agrees that it shall give notice to Holders of ADRs and the
Depositary of any amendment to its Articles of Incorporation changing the number of Shares previously designated as a Unit of Shares as soon as practicable but no later than two weeks after the adoption of a shareholders’ resolution giving
effect to such change in Unit. 

  
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