Document:

AGREEMENT
      AND PLAN OF MERGER

     

    BY
      AND AMONG

     

    STAR
      BULK CARRIERS CORP.

     

    and

     

    STAR
      MARITIME ACQUISITION CORP.

     

    

     

    Dated
      as of March 14, 2007

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    AGREEMENT
      AND PLAN OF MERGER

     

    This
      AGREEMENT AND PLAN OF MERGER (this “Agreement”)
      is
      made and entered into as of March 14, 2007 by and among Star Bulk Carriers
      Corp., a corporation organized under the laws of the Republic of the Marshall
      Islands (“Star
      Bulk”)
      and
      Star Maritime Acquisition Corp., a corporation organized under the laws of
      the
      State of Delaware (“Star
      Maritime”).

     

    WITNESSETH:

     

    WHEREAS,
      Star Maritime currently is the owner of record of 500 shares of common stock
      of
      Star Bulk (the “Initial Shares”) representing all of the issued and outstanding
      shares of Star Bulk;

     

    WHEREAS,
      Star Bulk has entered into a Master Agreement with Star Maritime and
TMT
      Co.,
      Ltd. a Taiwan corporation (“TMT”) dated January 12, 2007 (the “Master
      Agreement”), eight memoranda of agreement with TMT and certain wholly-owned
      subsidiaries of TMT for
      the
      purchase of a total of eight vessels by Star Bulk from TMT and such subsidiaries
      (the “MOAs”), as supplemented by a Supplemental Agreement dated January 12, 2007
      by and among Star Maritime, Star Bulk and TMT (the “Supplemental Agreement and,
      together with the Master Agreement and the MOAs, the “Vessel Acquisition
      Agreements”) providing for the acquisition by Star Bulk of eight vessel from TMT
      for a total consideration of $345,237,520, consisting of 12,537,645 shares
      of
      common stock of Star Bulk and cash;

     

    WHEREAS,
      the effectiveness of the Vessel Acquisition Agreements being made specifically
      contingent upon this Agreement and Plan of Merger being approved by Star
      Maritime and Star Maritime’s shareholders and the Merger being effected;

     

    WHEREAS,
      the boards of directors of each of Star Maritime and Star Bulk believe it is
      in
      the best interests of Star Maritime and its shareholders on the one hand and
      Star Bulk and Star Maritime, Star Bulk’s 100% parent, on the other hand, that
      Star Maritime enter into a business combination through the merger of Star
      Maritime with and into Star Bulk, with Star Bulk being the survivor of the
      merger (the “Merger”)
      and,
      in furtherance thereof, have approved the Merger; 

     

    WHEREAS,
      pursuant to the Merger, among other things, each of the issued and outstanding
      common shares of Star Maritime (the “Star
      Maritime Shares”) shall
      be
      converted into the right to receive common shares of Star Bulk, par value $0.01
      per share (the “Star
      Bulk Shares”)
      and
      each outstanding warrant of Star Maritime (the “Star
      Maritime Warrants”
will
      be
      assumed by Star Bulk with the same terms and restrictions except that each
      will
      be exercisable for common stock of Star Bulk (the “Star
      Bulk Warrants”);

     

    WHEREAS,
      the parties intend that the Merger shall constitute a plan of reorganization
      pursuant to Section 368 of the Code (as defined below); 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    WHEREAS,
      Star Maritime and Star Bulk desire to make certain representations, warranties,
      covenants and other agreements in connection with the Merger.

     

    NOW,
      THEREFORE,
      in
      consideration of the foregoing premises and the representations, warranties,
      covenants and agreements contained herein, and for other good and valuable
      consideration, the parties hereto, intending to be legally bound hereby, agree
      as follows:

     

    

    Article
      I.

     

    DEFINITIONS

     

    
      	
              1.1

            	
              Definitions.

            

    

     

    Except
      as
      otherwise specified herein, the following terms, when used in this Agreement,
      have the respective meanings set forth below:

     

    “Action”
means
      any claim, action, suit, arbitration, inquiry, proceeding or investigation
      by or
      before any Governmental Authority.

     

    “Affiliate”
means,
      with respect to any Person, any other Person directly or indirectly Controlling,
      Controlled by or under common Control with such other Person.

     

    “Business
      Day”
means
      any day that is not a Saturday, a Sunday or other day on which banks are
      required or authorized by Law to be closed in the City of New York.

     

    “Code”
means
      the United States Internal Revenue Code of 1986.

     

    “Control”
means,
      as to any Person, the power to direct or cause the direction of the management
      and policies of such Person, whether through the ownership of voting securities,
      by contract or otherwise. The terms “Controlled”
and
      “Controlling”
shall
      have a correlative meaning.

     

    “Dollar”
or
      “$”
means
      the United States Dollar. 

     

    “ERISA”
means
      the United States Employee Retirement Income Security Act of 1974, and the
      rules
      and regulations promulgated thereunder.

     

    “Exchange
      Act”
shall
      mean the United States Securities Exchange Act of 1934. 

     

    “Exchange
      Ratio”
means
      1.0.

     

    “GAAP”
means
      United States generally accepted accounting principles as in effect, from time
      to time, consistently applied.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Governmental
      Authority”
means
      any United States (federal, state or local) or foreign government, governmental,
      regulatory or administrative authority, agency or commission or any court,
      tribunal, or judicial or arbitral body.

     

    “Knowledge
      of Star Bulk” or “Knowledge”
      with
      respect to Star Bulk means the knowledge of any officer or director of Star
      Bulk. 

     

    “Knowledge
      of Star Maritime” or “Knowledge”
      with
      respect to Star Maritime means the knowledge of any officer or director of
      Star
      Maritime.

     

    “Law”
means
      any United States (federal, state or local) or foreign statute, law, ordinance,
      regulation, rule, code, order, judgment, injunction or decree.

     

    “Lien”
means,
      with respect to any property or asset, any mortgage, lien, pledge, charge,
      security interest or encumbrance of any kind, whether voluntarily incurred
      or
      arising by operation of Law or otherwise, in respect of such property or
      asset.

     

    “Material
      Adverse Effect”
means
      with respect to Star Bulk or Star Maritime, as applicable, a material adverse
      effect on the business, operations, properties, assets, condition (financial
      or
      otherwise) or results of operations of it and its subsidiaries taken as a whole,
      or on its ability to consummate the transactions contemplated hereby except
      (i)
      any effect arising from this Agreement or the transactions contemplated hereby,
      (ii) any effect applicable generally to the industries in which Star Bulk and
      the Subsidiaries operate and (iii) general economic or financial
      effects.

     

    “Order”
means
      any order, writ, judgment, injunction, decree, stipulation, determination or
      award entered by or with any Governmental Authority.

     

    “Per
      Share Merger Consideration”
      means
      for each share of common stock of Star Maritime, the right to receive
      consideration equal to one (1) fully paid and nonassessable Star Bulk
      Share.

     

    “Person”
means
      any natural person, general or limited partnership, corporation, limited
      liability company, firm, association, trust or other legal entity or
      organization, including a government or political subdivision or an agency
      or
      instrumentality thereof.

     

    “RMI”
means
      Republic of the Marshall Islands.

     

    “SEC”
means
      the United States Securities and Exchange Commission.

     

    “Securities
      Act”
shall
      mean the Securities Act of 1933.

     

    “Subsidiaries”
means
      Star Alpha Inc., Star Beta Inc., Star Gamma Inc., Star Delta Inc., Star Epsilon
      Inc., Star Zita Inc., Star Theta Inc. and Star Iota Inc., each of which is
      a
      "Subsidiary" and all of which are Subsidiaries of Star Bulk. Each subsidiary
      is
      a corporation organized under the laws of the RMI.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Tax”
or
      “Taxes”
means
      all United States (federal, state or local) or foreign income, excise, gross
      receipts, ad valorem, sales, use, employment, franchise, profits, gains,
      property, transfer, use, payroll, intangibles or other taxes, fees, stamp taxes,
      duties, charges, levies or assessments of any kind whatsoever (whether payable
      directly or by withholding), together with any interest and any penalties,
      additions to tax or additional amounts imposed by any Tax authority with respect
      thereto.

     

    “Tax
      Returns”
means
      all returns and reports (including elections, declarations, disclosures,
      schedules, estimates and information returns) required to be supplied to a
      Tax
      authority relating to Taxes.

     

    “Trademarks”
means
      all of those trade names, trademarks, service marks, jingles, slogans, logos,
      trademark and service mark registrations and trademark and service mark
      applications owned, used, held for use, licensed by or leased by Star Bulk
      or
      the Subsidiaries and the goodwill appurtenant thereto.

     

    
      	
              1.2

            	
              Other
                Defined Terms.

            

    

     

    Except
      as
      otherwise specified herein, the following terms have the respective meanings
      as
      defined in the Sections set forth
      below:

     

    
      	
              Term

            	
              Section

            
	 	 
	
              Agreement

            	
              Preamble

            
	
              BCA

            	
              2.1

            
	
              Certificate
                and Certificates

            	
              2.6

            
	
              Closing
                and Closing Date

            	
              2.2

            
	
              Contracts

            	
              3.5(b)

            
	
              DGCL

            	
              2.1

            
	
              Effective
                Time

            	
              2.2

            
	
              Enforceability
                Exception

            	
              3.4(a)

            
	
              Environmental
                Laws

            	
              3.8(c)

            
	
              Exchange
                Act Listing

            	
              6.5

            
	
              Exchange
                Agent

            	
              2.9(a)

            
	
              Indemnified
                Party

            	
              9.3(a)

            
	
              Indemnifying
                Party

            	
              9.3(a)

            
	
              Initial
                Shares

            	
              Recitals

            
	
              Loss

            	
              9.2(a)

            
	
              Master
                Agreement

            	
              Recitals

            
	
              Merger

            	
              Recitals

            
	
              Merger
                Certificate

            	
              2.2

            
	
              MOAs

            	
              Recitals

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
              Notice
                of Claim

            	
              9.3(a)

            
	
              Proxy
                Statement

            	
              6.2

            
	
              Redemption
                Shares

            	
              2.7

            
	
              Star
                Bulk

            	
              Preamble

            
	
              Star
                Bulk Acquisition Transaction

            	
              5.2(a)

            
	
              Star
                Bulk Financial Statement

            	
              3.13

            
	
              Star
                Bulk Registration Statement

            	
              6.2

            
	
              Star
                Bulk Shares

            	
              Recitals

            
	
              Star
                Bulk Warrants

            	
              Recitals

            
	
              Star
                Maritime

            	
              Preamble

            
	
              Star
                Maritime Acquisition Transaction

            	
              5.2(b)

            
	
              Star
                Maritime Shares

            	
              Recitals

            
	
              Star
                Maritime Warrants

            	
              Recitals

            
	
              Star
                Maritime Contracts

            	
              4.5

            
	
              Star
                Maritime Directors

            	
              6.4

            
	
              Star
                Maritime Financial Statements

            	
              4.13

            
	
              Star
                Maritime Permits

            	
              4.9

            
	
              Star
                Maritime Special Meeting

            	
              3.10

            
	
              Star
                Maritime Stockholders' Approval

            	
              6.4

            
	
              Star
                Maritime's SEC Reports

            	
              4.14

            
	
              Stock
                Exchange Listing

            	
              6.5

            
	
              Supplemental
                Agreement

            	
              Recitals

            
	
              Surviving
                Corporation

            	
              2.1

            
	
              Vessel
                Acquisition Agreements

            	
              Recitals

            
	
              Vessels

            	
              3.9(b)(2)

            

    

     

    
      	
              1.3

            	
              Rules
                of Construction.

            

    

     

    Unless
      the context otherwise requires:

     

    (a)    a
      term
      has the meaning assigned to it;

     

    (b)    an
      accounting term not otherwise defined has the meaning assigned to it in
      accordance with GAAP;

     

    (c)    “or”
is
      not exclusive;

     

    (d)    “including”
      means including without limitation;

     

    (e)    words
      in
      the singular include the plural and words in the plural include the singular;
      and 

     

    (f)    any
      agreement, instrument or statute defined or referred to herein or in any
      instrument or certificate delivered in connection herewith means such agreement,
      instrument or statute as from time to time amended, modified or supplemented
      (as
      provided in such agreements) and includes (in the case of agreements or
      instruments) references to all attachments thereto and instruments incorporated
      therein; references to a Person are also to its permitted successors and
      assigns.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    Article
      II.

     

    THE
      MERGER

     

    
      	
              2.1

            	
              The
                Merger.

            

    

     

    Upon
      the
      terms and conditions set forth in this Agreement, and in accordance with the
      applicable provisions of the Marshall Islands Business Corporation Act (the
      “BCA”) and the Delaware General Corporation Law
      (the
“DGCL”), Star Maritime shall be merged with and into Star Bulk at the Effective
      Time. At the Effective Time, the separate corporate existence of Star Maritime
      shall cease, and Star Bulk
      shall
      continue as the surviving corporation. The surviving corporation in the Merger
      is sometimes referred to as the “Surviving Corporation.”

     

    
      	
              2.2

            	
              Closing;
                Effective Time.

            

    

     

    The
      closing of the Merger (the “Closing”) shall take place at 10:00 a.m. Eastern
      Time at the offices of Seward & Kissel LLP, One Battery Park Plaza, New
      York, New York 10004, on the first Business Day following the date on which
      the
      last of the conditions set forth in Article VII hereof is fulfilled or waived,
      or at such other time and place as Star Maritime and Star Bulk shall agree
      (the
      date on which the closing occurs being the “Closing Date”). On the Closing Date,
      the parties shall cause the Merger to be consummated
      by filing a Certificate of Merger or like instrument (the “Merger Certificate”)
      with the Registrar of Corporations of the Republic of the Marshall Islands,
      in
      accordance with the applicable provisions of the BCA (the time of acceptance
      by
      the Registrar of Corporations of such filing being referred to herein as the
      “Effective Time”) and with the Secretary of State of the State of Delaware, in
      accordance with the applicable provisions of the DGCL.

     

    
      	
              2.3

            	
              Effect
                of the Merger.

            

    

     

    At
      the
      Effective Time, the effect of the Merger shall be as provided in the applicable
      provisions of the BCA and the DGCL. Without limiting the generality of the
      foregoing, at the Effective Time, all the property, rights, privileges, powers
      and franchises of Star Maritime shall vest in the Surviving Corporation, and
      all
      debts, liabilities and duties of Star Maritime shall become the debts,
      liabilities and duties of the Surviving Corporation.

     

    
      	
              2.4

            	
              Articles
                of Incorporation; By-laws. 

            

    

     

    Prior
      to
      the filing of the Star Bulk Registration Statement, Star Bulk shall amend its
      Articles of Incorporation and By-laws on terms reasonably satisfactory to Star
      Maritime. At the Effective Time, these amended Articles of Incorporation and
      By-laws shall be the Articles of Incorporation and By-laws of the Surviving
      Corporation.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
              2.5

            	
              Directors
                and Officers.

            

    

     

    The
      directors of the Surviving Corporation immediately after the Effective Time
      shall be the directors set forth in Schedule
      2.5, each to hold the office of director of the Surviving Corporation in
      accordance with the provisions of the applicable laws of the Republic of the
      Marshall Islands and the Articles
      of Incorporation and By-laws of the Surviving Corporation (as amended pursuant
      to Section 2.4 above) until their successors are duly
      qualified and elected. The
      officers of the Surviving Corporation immediately after the Effective Time
      shall
      be such officers as are appointed by the Board of Directors of Star Bulk after
      the date hereof, each to hold office in accordance with the provisions of the
      By-laws of the Surviving Corporation (as amended pursuant to Section 2.4
      above).

     

    
      	
              2.6

            	
              Conversion
                of Star Maritime Capital
                Stock.

            

    

     

    Subject
      to Sections 2.7 and 2.9(e), each share of Star Maritime common
      stock issued and outstanding immediately prior to the Effective Time shall
      be
      converted into the right to receive, at the election of the holder thereof,
      the
      Per Share Merger Consideration. At the Effective Time, all Star Maritime Shares
      converted as set forth above shall no longer be outstanding and shall
      automatically be canceled and shall cease to exist, and each holder of a
      certificate or certificates that immediately prior to the Effective Time
      represented any such Star Maritime Shares (the “Certificates” and each, a
“Certificate”) shall cease to have any rights with respect thereto, except the
      right to receive the Per Share Merger Consideration and certain dividends or
      other distributions in accordance with Section 2.9(c) upon the surrender of
      such
      Certificate, in accordance with Section 2.9(b). Each Star Maritime Warrant
      issued and outstanding immediately prior to the Effective Time shall be
      convertible into a Star Bulk Warrants and shall be convertible into Star Bulk
      Shares as described in Section 6.6 of this Agreement. Schedule 2.6 lists, as
      of
      the Effective Time, the number of Star Bulk Shares which shall be issued to
      any
      Star Maritime security holder pursuant to this Section 2.6 and Section 6.6
      hereof, assuming that all outstanding Star Maritime Shares are exchanged for,
      or
      converted to, Star Bulk Shares as contemplated by this Agreement. Each share
      of
      Star Bulk owned by Star Maritime at the time of the Merger shall be
      cancelled.

     

    
      	
              2.7

            	
              Redemption
                Rights. 

            

    

     

    Notwithstanding
      any other provisions of this Agreement to the contrary, if the Merger is
      approved by the shareholders of Star Maritime, Star Maritime Shares that are
      outstanding immediately prior to the Closing and which are held by Star Maritime
      stockholders who shall have voted against the Merger and who shall have
      demanded properly, in writing, redemption of such shares in accordance with
      the procedures set forth in the Proxy Statement (collectively, the
“Redemption Shares”) shall not be converted into or represent the right to
      receive the Per Share Merger Consideration. 

      Such
        Star Maritime stockholders shall be entitled to receive for each
        Redemption Share held by them, payment of $10.00 per share, which amount
        represents $9.80 per share plus their pro rata share of any accrued on the
        escrow account (net of taxes payable) not previously distributed by Star
        Maritime and $.020 per share plus interest thereon (net of taxes payable)
        of
        contingent underwriting compensation which the underwriters of Star Maritime’s
        initial public offering have agreed to forfeit to pay redeeming shareholders,
        calculated as of two days prior to the Closing Date. Star Maritime Shares
        held
        by Star Maritime stockholders who failed to properly demand redemption of
        their
        Star Maritime Shares shall thereupon be deemed to have converted into and
        to
        become exchangeable of the right to receive, without any interest thereon,
        the
        Per Share Merger Consideration, upon surrender, in the manner provided in
        Section 2.6 above, of the Certificate or Certificates that formerly evidenced
        such shares of Star Maritime Shares. Any payments required to be made to
        the
        holders of any Redemption Shares shall be funded by Star
        Bulk.

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
              2.8

            	
              Anti-Dilution
                Provisions. 

            

    

     

    In
      the
      event Star Bulk changes (or establishes a record date for changing) the number
      of Star Bulk Shares issued and outstanding prior to the Effective Time as a
      result of a stock split, stock dividend, recapitalization, subdivision,
      reclassification, combination, exchange of shares or similar transaction with
      respect to the outstanding Star Bulk Shares and the record date therefor shall
      be prior to the Effective Time, the Exchange Ratio and the Per Share Merger
      Consideration shall be proportionately adjusted to reflect such stock split,
      stock dividend, recapitalization, subdivision, reclassification, combination,
      exchange of shares or similar transaction. 

     

    
      	
              2.9

            	
              Surrender
                of Certificates.

            

    

     

    (a)    Exchange
      Agent.
      As of
      the Effective Time, Star Bulk shall deposit with such bank or trust company
      as
      may be designated by Star Bulk and reasonably acceptable to Star Maritime (the
      “Exchange
      Agent”),
      for
      the benefit of the holders of shares of Star Maritime Capital Stock, for
      exchange in accordance with this Section 2.9, through the Exchange Agent, the
      Star Bulk Shares issuable pursuant to Section 2.6 in exchange for outstanding
      shares of Star Maritime Shares. At the time of such deposit, Star Bulk shall
      irrevocably instruct the Exchange Agent to deliver the Star Bulk Shares to
      Star
      Maritime’s stockholders after the Effective Time in accordance with the
      procedures set forth in this Section 2.9, subject to Sections 2.9(f) and (g).
      

     

    (b)    Exchange
      Procedures.
      As soon
      as reasonably practicable after the Effective Time, the Exchange Agent shall
      mail to each holder of record of a Certificate whose shares were converted
      into
      the right to receive the applicable Per Share Merger Consideration pursuant
      to
      Section 2.6, a letter of transmittal (in form and substance satisfactory to
      Star
      Bulk and Star Maritime), with instructions for use in surrendering the
      Certificates in exchange for the applicable Per Share Merger Consideration
      with
      respect thereto. Upon surrender of a Certificate for cancellation to the
      Exchange Agent, together with such letter of transmittal, duly completed and
      validly executed, and such other documents as may reasonably be required by
      the
      Exchange Agent, the holder of such Certificate shall be entitled to receive
      in
      exchange therefor that number of whole Star Bulk Shares in accordance with
      Section 2.9(e), together with certain dividends or other distributions in
      accordance with Section 2.9(c), and the Certificate so surrendered shall
      forthwith be canceled. In the event of a transfer of ownership of Star Maritime
      Shares that is not registered in the transfer records of Star Maritime, a
      certificate evidencing the proper number of Star Bulk Shares may be issued
      in
      exchange therefor to a person other than the person in whose name the
      Certificate so surrendered is registered if such Certificate shall be properly
      endorsed or otherwise be in proper form for transfer and the person requesting
      such issuance shall pay any transfer or other taxes required by reason of the
      issuance of Star Bulk Shares to a person other than the registered holder of
      such Certificate or establish to the satisfaction of Star Bulk that such tax
      has
      been paid or is not applicable. Until surrendered as contemplated by this
      Section 2.9(b), each Certificate shall be deemed at any time after the Effective
      Time to represent only the right to receive upon such surrender the Per Share
      Merger Consideration that the holder thereof has the right to receive pursuant
      to the provisions of Section 2.6, plus certain dividends or other distributions
      in accordance with Section 2.9(c).

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (c)    Distributions
      with Respect to Unexchanged Shares.
      No
      dividends or other distributions declared or made with respect to Star Bulk
      Shares with a record date after the Effective Time shall be paid to the holder
      of any unsurrendered Certificate with respect to Star Bulk Shares represented
      thereby, if any, and all such dividends and other distributions shall be paid
      by
      Star Bulk to the Exchange Agent, until the surrender of such Certificate in
      accordance with this Article II. Subject to the effect of applicable escheat
      or
      similar laws, following surrender of any such Certificate there shall be paid
      to
      the holder of whole Star Bulk Shares issued in exchange therefor, without
      interest, (i) at the time of such surrender, the amount of dividends or other
      distributions with a record date after the Effective Time theretofore paid
      with
      respect to such whole Star Bulk Shares and (ii) at the appropriate payment
      date,
      the amount of dividends or other distributions with a record date after the
      Effective Time but prior to such surrender and with a payment date subsequent
      to
      such surrender payable with respect to such whole Star Bulk Shares.

     

    (d)    No
      Further Ownership Rights in Star Maritime Shares.
      All
      certificates evidencing Star Bulk Shares issued (including any dividends or
      other distributions paid pursuant to Section 2.9(c)) shall be deemed to have
      been issued and paid in full satisfaction of all rights pertaining to the shares
      of Star Maritime Shares formerly represented by such Certificates. At the close
      of business on the day on which the Effective Time occurs, the stock transfer
      books of Star Maritime shall be closed, and there shall be no further
      registration of transfers on the stock transfer books of the Surviving
      Corporation of the shares of Star Maritime Shares that were outstanding
      immediately prior to the Effective Time. If, after the Effective Time,
      Certificates are presented to the Surviving Corporation or the Exchange Agent
      for transfer or any other reason, they shall be canceled and exchanged as
      provided in this Article II. 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (e)    Fractional
      Shares.
      No
      fractional shares of Star Bulk common stock shall be issued in the Merger.
      The
      aggregate Per Share Merger Consideration to be issued to the holder of a
      Certificate previously evidencing Star Maritime Shares shall be rounded up
      to
      the nearest whole share of Star Bulk common stock.

     

    (f)    Termination
      of Exchange of Star Bulk Shares.
      Any
      portion of the Star Bulk Shares (and any dividends or distributions thereon)
      that remain undistributed to the holders of the Certificates for six months
      after the Effective Time shall be delivered to Star Bulk, upon demand, and
      any
      holders of the Certificates who have not theretofore complied with this Article
      II shall thereafter look only to Star Bulk for, and, subject to Section 2.9(g),
      Star Bulk shall remain liable for payment of their claim for the Per Share
      Merger Consideration, certain dividends and other distributions in accordance
      with Section 2.9(c). 

     

    (g)    No
      Liability.
      Notwithstanding anything to the contrary in this Section 2.9, none of the
      Exchange Agent, the Surviving Corporation or any party to this Agreement shall
      be liable to a holder of Star Bulk Shares or Star Maritime Shares for any amount
      properly paid to a public official pursuant to any applicable abandoned
      property, escheat or similar law.

     

    (h)    Lost,
      Stolen or Destroyed Company Certificate.
      In the
      event any Certificates shall have been lost, stolen or destroyed, the Exchange
      Agent shall issue in exchange for such lost, stolen or destroyed Certificate,
      upon the making of an affidavit and indemnity of that fact by the holder thereof
      in a form that is reasonably acceptable to the Exchange Agent, the number of
      Star Bulk Shares as required pursuant to Section 2.6; provided,
      however,
      that
      Star Bulk may, in its reasonably commercial discretion and as a condition
      precedent to the issuance thereof, require the owner of such lost, stolen or
      destroyed Certificates to deliver a bond in such sum as it may reasonably direct
      against any claim that may be made against Star Bulk or the Exchange Agent
      with
      respect to the Certificates alleged to have been lost, stolen or
      destroyed.

    
       

      
        	
                2.10 

              	
                Warrants

              

      

       

    

    As
      of the
      Effective Time, Star Bulk shall deposit with the Exchange
      Agent,
      for the
      benefit of the holders of Star Maritime Warrants that have been exchanged into
      Star Bulk Warrants in accordance with Section 6.6 hereof, 20,000,000 shares
      of
      Star Bulk Shares issuable upon exercise of such Star Bulk Warrants.

     

    
      	
              2.11

            	
              Redemption
                Shares After Payment of Fair
                Value.

            

    

     

    Redemption
      Shares,
      if any, after payments of fair value in respect thereto have been made to
      Redemption Star Maritime stockholders pursuant to the DGCL, shall be
      cancelled.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	
              2.12

            	
              Tax
                and Accounting
                Consequences.

            

    

     

    It
      is
      intended by the parties hereto that the Merger shall constitute a reorganization
      within the meaning of Section 368 of the Code. Each
      party has consulted with, and is relying upon, its tax advisors and accountants
      with respect to the tax and accounting consequences of the Merger.

     

    Article
      III.

     

    REPRESENTATIONS
      AND WARRANTIES

    OF
      STAR BULK

     

    Star
      Bulk
      hereby represents
      and
      warrants to Star Maritime as follows (subject in each case to such exceptions
      as
      are set forth or cross-referenced in the attached Schedules corresponding to
      the
      Section of the representation or warranty to which such exceptions
      relate):

     

    
      	
              3.1

            	
              Organization
                and Qualification.

            

    

     

    (a)    Star
      Bulk
      has been duly organized and is validly existing as a corporation in good
      standing under the laws of the Republic of the Marshall Islands, with power
      and
      authority (corporate and other) to own its properties and conduct its business
      as currently conducted. Star Bulk has been duly qualified as a foreign
      corporation for the transaction of business and is in good standing under the
      laws of each jurisdiction set forth in the Schedule3.1 and to Star Bulk’s
      Knowledge, such jurisdictions are the only ones in which it owns or leases
      properties, or conducts any business, so as to require such qualification,
      other
      than those jurisdictions where the failure to be so qualified or in good
      standing would not have a Material Adverse Effect on Star Bulk and the
      Subsidiaries.

     

    (b)    Each
      of
      the Subsidiaries has been duly organized and is validly existing as a
      corporation under the laws of the Republic of the Marshall Islands, with power
      and authority (corporate and other) to own its properties and conduct its
      business as currently conducted. All the outstanding shares of capital stock
      of
      each of the Subsidiaries have been duly authorized and validly issued, are
      fully-paid and non-assessable, and are owned by Star Bulk, free and clear of
      all
      Liens.

     

    (c)    The
      copies of the respective Articles of Incorporation and By-laws of Star Bulk
      and
      each of the Subsidiaries, as amended to date and delivered to Star Maritime,
      are
      true and complete copies of these documents as now in effect. The minute books
      of Star Bulk and the Subsidiaries are accurate in all material respects.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	
              3.2

            	
              Subsidiaries.

            

    

     

    Other
      than the Subsidiaries, Star Bulk does not hold any equity interest in any other
      Person. Star Bulk owns all of the issued and outstanding shares of stock of
      the
      Subsidiaries, free and clear of any Liens.

     

    
      	
              3.3

            	
              Capitalization.

            

    

     

    (a)    As
      of
      immediately prior to the Closing, the authorized capital stock of Star Bulk
      shall consist solely of 100,000,000 common shares, $0.01 par value and
      25,000,000 preferred shares, $0.01 par value, of which 500 common shares and
      no
      preferred shares will be issued and outstanding.

     

    (b)    The
      Star
      Bulk Shares to be issued upon effectiveness of the Merger and upon exercise
      of
      the Star Bulk Warrants, when issued in accordance with the terms of this
      Agreement, shall be duly authorized, validly issued, fully paid and
      non-assessable and free of all Liens.

     

    
      	
              3.4

            	
              Authority;
                Non-Contravention;
                Approvals.

            

    

     

    (a)    Star
      Bulk
      has full corporate power and authority, to enter into this Agreement and to
      consummate the transactions contemplated hereby. Star Bulk’s execution and
      delivery of this Agreement, and its consummation of the transactions
      contemplated hereby, have been duly authorized by its board of directors and
      no
      other corporate proceedings on its part are necessary to authorize its execution
      and delivery of this Agreement and its consummation of the transactions
      contemplated hereby. This Agreement has been duly and validly executed and
      delivered by Star Bulk and its parent, and constitutes its and their valid
      and
      binding agreement, enforceable against them in accordance with its terms, except
      that such enforcement may be subject to (i) bankruptcy, insolvency,
      reorganization, moratorium or other similar laws affecting or relating to
      enforcement of creditors’ rights generally and (ii) general equitable principles
      ((i) and (ii) the “Enforceability
      Exception”).

     

    (b)    All
      material consents, approvals, authorizations, orders, licenses, registrations,
      clearances and qualifications of or with any Governmental Authority having
      jurisdiction over Star Bulk or the Subsidiaries or any of their properties
      required for the execution and delivery by Star Bulk of this Agreement to be
      duly and validly authorized have been obtained or made and are in full force
      and
      effect.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    
       

      (c)    Star
        Bulk’s execution and delivery of this Agreement does not, and its consummation
        of the transactions contemplated herein will not violate, conflict with or
        result in a breach of any provision of, or constitute any default (or an
        event
        which, with notice or lapse of time or both, would constitute an event of
        default) under, or result in the termination of, or accelerate the performance
        required by, or result in a right of termination or acceleration under, or
        result in the creation of any Lien upon any of its properties or assets under
        any of the terms, conditions or provisions of (i) the Certificate of
        Incorporation or By-laws of Star Bulk or any of the Subsidiaries, (ii) Approval,
        any Law or Order, injunction, writ, permit or license of any Governmental
        Authority applicable to it or any of its properties or assets, or (iii) any
        note, bond, mortgage, indenture, deed of trust, license, franchise, permit,
        concession, contract, lease or other instrument, obligation or agreement
        of any
        kind to which it is now a party or by which it or any of its properties or
        assets may be bound, excluding from the foregoing clauses (ii) and (iii),
        such
        violations, conflicts, breaches, defaults, terminations, accelerations or
        creations of liens, security interests, charges or encumbrances that do not,
        in
        the aggregate, have a Material Adverse Effect on Star Bulk and the Subsidiaries
        taken as a whole.

    

     

    
      	
              3.5

            	
              Contracts;
                No Default.

            

    

     

    (a)    Schedule
      3.5(a) contains a true and complete list of all contracts, agreements,
      commitments and other instruments (whether oral or written) to which Star Bulk
      or any of the Subsidiaries is a party that (i) involve a receipt or an
      expenditure by Star Bulk or any of the Subsidiaries or require the performance
      of services or delivery of goods to, by, through, on behalf of or for the
      benefit of Star Bulk or any of the Subsidiaries, which in each case, relates
      to
      a contract, agreement, commitment or instrument that either (A) requires
      payments or receipts in excess of $50,000 per year or (B) is not terminable
      by
      Star Bulk or any of the Subsidiaries on notice of thirty (30) days or less
      without penalty or Star Bulk or any of the Subsidiaries being liable for damages
      of $50,000 or more, or (ii) involve an obligation for the performance of
      services or delivery of goods by Star Bulk or any of the Subsidiaries that
      cannot, or in reasonable probability will not, be performed within one year
      from
      the date hereof.

     

    (b)    All
      of
      the contracts, agreements, commitments and other instruments described in
      Schedule 3.5(a) (individually, a “Contract”
and
      collectively, the “Contracts”)
      are
      valid and binding upon Star Bulk or the Subsidiaries, as applicable, and to
      the
      Knowledge of Star Bulk, the other parties thereto, and are in full force and
      effect and enforceable in accordance with their terms, subject to the
      Enforceability Exception, and neither Star Bulk nor the Subsidiaries, nor to
      the
      Knowledge of Star Bulk, any other party to any Contract, has materially breached
      any provision of, nor has any event occurred which, with the lapse of time
      or
      action by a third party, could result in a material default under, the terms
      thereof. 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	
              3.6

            	
              Litigation.

            

    

     

    There
      is
      no (i) claim, action, suit or proceeding pending or, to Star Bulk’s
      Knowledge, threatened against or directly relating to Star Bulk before any
      Governmental Authority, or (ii) outstanding Order, or application, request
      or
      motion therefor, of any Governmental Authority in a proceeding to which Star
      Bulk or any of its assets was or is a party except, in the case of clauses
      (i)
      and (ii) above, such as would not, individually or in the aggregate, either
      materially impair or preclude Star Bulk’s ability to consummate the Merger or
      the other transactions contemplated hereby or have a Material Adverse Effect
      on
      Star Bulk.

     

    
      	
              3.7

            	
              Taxes.

            

    

     

    (a)    Star
      Bulk
      and the Subsidiaries have duly filed with the appropriate Governmental
      Authorities all material franchise, income and all other material Tax Returns
      other than Tax Returns the failure to file of which would have no Material
      Adverse Effect on Star Bulk or the Subsidiaries. All such Tax Returns were,
      when
      filed, and are accurate and complete in all material respects and were prepared
      in conformity with applicable Laws. Star Bulk and the Subsidiaries have paid
      or
      will pay in full or have adequately reserved against all Taxes otherwise
      assessed against it through the Closing Date. Neither Star Bulk nor any
      Subsidiary is a party to any pending action or proceeding by any Governmental
      Authority for the assessment of any Tax, and no claim for assessment or
      collection of any Tax has been asserted in writing against Star Bulk of any
      of
      the Subsidiaries that has not been paid. There are no Liens for Taxes upon
      the
      assets of Star Bulk or any of the Subsidiaries (other than Liens for Taxes
      not
      yet due and payable). There is no valid basis, to the Knowledge of Star Bulk,
      for any assessment, deficiency, notice, 30-day letter or similar intention
      to
      assess any Tax to be issued to Star Bulk or any of the Subsidiaries by any
      Governmental Authority. 

     

    (b)    No
      stamp
      or other issuance or transfer taxes or duties and no capital gains, income,
      withholding or other Taxes are payable by or on behalf of Star Maritime to
      the
      Marshall Islands or any political subdivision or Taxing Authority thereof or
      therein in connection with the issuance of the Star Bulk Shares to the Star
      Maritime stockholders, the issuance of the Star Bulk Warrants or the delivery
      by
      the Star Maritime stockholders of the Star Maritime Shares or the delivery
      of
      the Star Maritime Warrants by the holders thereof.

     

    
      	
              3.8

            	
              No
                Violation of Law.

            

    

     

    (a)    Neither
      Star Bulk nor any Subsidiary is in violation of or has been given notice or
      been
      charged with any violation of, any Law or Order (including, without limitation,
      any applicable environmental law, ordinance or regulation) of any Governmental
      Authority, except for violations which, in the aggregate, do not have, and
      would
      not reasonably be expected to have, a Material Adverse Effect on Star Bulk.
      Neither Star Bulk nor any Subsidiary has received any written notice that any
      investigation or review with respect to it by any Governmental Authority is
      pending or threatened, other than, in each case, those the outcome of which,
      as
      far as reasonably can be foreseen, would not reasonably be expected to have
      a
      Material Adverse Effect on Star Bulk.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (b)    Each
      of
      Star Bulk and the Subsidiaries owns, possesses or has obtained, all licenses,
      permits, certificates, consents, orders, approvals and other authorizations
      from, and has made all declarations and filings with, all Governmental
      Authorities, all self-regulatory organizations and all courts and other
      tribunals, necessary to own or lease, as the case may be, and to operate its
      properties and to carry on its business as conducted as of the date hereof,
      other than such licenses, permits, certificates, consents, orders, approvals,
      other authorizations, declarations and filings which individually or in the
      aggregate are not material to Star Bulk and the Subsidiaries taken as a whole,
      and neither Star Bulk nor any such Subsidiary has received any actual notice
      of
      any proceeding relating to revocation or modification of any such license,
      permit, certificate, consent, order, approval or other authorization, and each
      of Star Bulk and the Subsidiaries is in compliance with all Laws relating to
      the
      conduct of its business as conducted as of the date hereof other than any
      failure to so comply that would not have a Material Adverse Effect on Star
      Bulk.

     

    (c)    Star
      Bulk
      and the Subsidiaries (i) are in compliance with any and all applicable
      foreign, federal, provincial, state and local Laws, including any applicable
      regulations and standards adopted by the International Maritime Organization,
      relating to the protection of human health and safety, the environment or
      hazardous or toxic substances or wastes, petroleum pollutants or contaminants
      (“Environmental
      Laws”),
      (ii) have received all permits, licenses, other approvals, authorizations
      and certificates of financial responsibility required of them under applicable
      Environmental Laws to conduct their respective businesses and (iii) are in
      compliance with all terms and conditions of any such permit, license or
      approval, except where such noncompliance with Environmental Laws, failure
      to
      receive required permits, licenses or other approvals or failure to comply
      with
      the terms and conditions of such permits, licenses or approvals would not,
      have
      a Material Adverse Effect on Star Bulk. 

     

    (d)    None
      of
      the transactions contemplated herein will violate any Foreign Assets Control
      Regulations of the United States contained in Title 31, Code of Federal
      Regulations, Parts 500, 505, 515 and 535.

     

    
      	
              3.9

            	
              Properties.

            

    

     

    Star
      Bulk
      and the Subsidiaries have good and marketable title to all of the assets and
      properties which they purport to own as reflected on the most recent balance
      sheet comprising a portion of the Star Bulk Financial Statement, or thereafter
      acquired (except assets and properties sold or otherwise disposed of since
      the
      date of such balance sheet in the ordinary course of business). Star Bulk and
      the Subsidiaries have a valid leasehold interest in all properties of which
      it
      is the lessee and each such lease is valid, binding and enforceable against
      it,
      and, to the Knowledge of Star Bulk, the other parties thereto in accordance
      with
      its terms, subject to the Enforceability Exception. Neither Star Bulk, the
      Subsidiaries nor, to Star Bulk’s Knowledge, the other parties thereto are in
      default in the performance of any material provision thereunder. Neither the
      whole nor any material portion of the assets of Star Bulk or the Subsidiaries
      is
      subject to any Order to be sold or is being condemned, expropriated or otherwise
      taken by any public authority with or without payment of compensation therefor,
      nor, to Star Bulk’s Knowledge, has any such condemnation, expropriation or
      taking been proposed. None of the material assets of Star Bulk or the
      Subsidiaries is subject to any restriction which would have a Material Adverse
      Effect on Star Bulk.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    
      	
              3.10

            	
              Proxy
                Statement.

            

    

     

    None
      of
      the information to be supplied by Star Bulk for inclusion in the Proxy
      Statement, or in any amendments or supplements thereto, to be distributed to
      the
      stockholders of Star Maritime in connection with the meeting of such
      stockholders (the “Star Maritime Special Meeting”) at the time of the mailing of
      the Proxy Statement and at the time of the Star Maritime Special Meeting contain
      any untrue statement of a material fact or omit to state any material fact
      required to be stated therein or necessary in order to make the statements
      therein, in light of the circumstances under which they are made, not
      misleading.

     

    
      	
              3.11

            	
              Labor
                Matters.

            

    

     

    Neither
      Star Bulk nor any Subsidiary is a party to any union contract or other
      collective bargaining agreement. Star Bulk and the Subsidiaries are in
      compliance in all material respects with all applicable Laws respecting
      employment and employment practices, terms and conditions of employment and
      wages and hours, and Star Bulk and the Subsidiaries are not engaged in any
      unfair labor practice. There is no labor strike, slowdown or stoppage pending
      (or, to the Knowledge of Star Bulk, any labor strike or stoppage threatened)
      against or affecting Star Bulk or the Subsidiaries. No petition for
      certification has been filed and is pending before any Governmental Authority
      with respect to any employees of Star Bulk or the Subsidiaries who are not
      currently organized. 

     

    
      	
              3.12

            	
              Employees.

            

    

     

    To
      Star
      Bulk’s knowledge, no key employee or group of employees has any plans to
      terminate employment with Star Bulk or any of the Subsidiaries.

     

    
      	
              3.13

            	
              Financial
                Statements.

            

    

     

    Star
      Bulk
      has provided Star Maritime with a draft of the audited consolidated balance
      sheet dated
      February 5, 2007 (the “Star
      Bulk Financial Statement”).
      The
      Star Bulk Financial Statement presents fairly, in all material respects, the
      consolidated financial position and results of operations of Star Bulk and
      the
      Subsidiaries as of the dates, period and year indicated, prepared in accordance
      with GAAP, and to the Knowledge of Star Bulk, in accordance with Regulation
      S-X,
      promulgated by the SEC, and, in particular, Rules 1-02 and 3-05 thereunder.
      Without limiting the generality of the foregoing, (i) as of the date of the
      consolidated balance sheet comprising a portion of the Star Bulk Financial
      Statement, there was no material debt, liability or obligation of any nature
      not
      reflected or reserved against in the Star Bulk Financial Statement or in the
      notes thereto required to be so reflected or reserved in accordance with GAAP,
      and (ii) there are no assets of Star Bulk or the Subsidiaries, the value of
      which (in the reasonable judgment of Star Bulk) is materially overstated in
      the
      Star Bulk Financial Statement. Except as incurred in the ordinary course of
      business since December 31, 2006, Star Bulk has no known material contingent
      liabilities (including liabilities for Taxes) other than as contemplated
      hereunder or in connection herewith. Star Bulk is not a party to any contract
      or
      agreement for the forward purchase or sale of any foreign currency and has
      not
      invested in any “derivatives.” There will not be any material adverse change to
      Star Bulk’s Financial Statement.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    
      	
              3.14

            	
              Absence
                of Certain Changes or
                Events.

            

    

     

    Except
      as
      set forth in Schedule 3.14 or in connection with this Agreement and the
      transactions contemplated hereby, since December 31, 2006
      there
      has not been:

     

    (a)    any
      material adverse change in the financial condition, operations, properties,
      assets, liabilities or business of Star Bulk;

     

    (b)    any
      material damage, destruction or loss of any material properties of Star Bulk
      and
      the Subsidiaries, whether or not covered by insurance, which would have a
      Material Adverse Effect on Star Bulk;

     

    (c)    any
      material change in the manner in which the business of the Company has been
      conducted, which would have a Material Adverse Effect on Star Bulk;

     

    (d)    any
      material change in the treatment and protection of trade secrets or other
      confidential information of Star Bulk and the Subsidiaries, which would have
      a
      Material Adverse Effect on Star Bulk; and

     

    (e)    any
      occurrence not included in paragraphs (a) through (d) of this Section 3.14
      which
      has resulted, or which Star Bulk has reason to believe, could reasonably be
      expected to result, in a Material Adverse Effect on Star Bulk.

     

    
      	
              3.15

            	
              Dividends
                and Distributions.

            

    

     

    All
      dividends and other distributions declared and payable on the shares of capital
      stock of the Subsidiaries may under the current Laws of the Republic of the
      Marshall Islands be paid in United States dollars and may be 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 Republic of the Marshall Islands and are otherwise free and clear of
      any
      other Tax, withholding or deduction in, and without the necessity of obtaining
      any consents, approvals, authorizations, orders, licenses, registrations,
      clearances and qualifications of or with any Governmental Authority in, the
      Republic of the Marshall Islands. 

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      	
              3.16

            	
              Related
                Transactions.

            

    

     

    No
      relationship, direct or indirect, exists between or among Star Bulk or either
      of
      the Subsidiaries on the one hand, and the directors, officers, shareholders,
      customers or suppliers of Star Bulk or either of the Subsidiaries on the other
      hand. Since the date of its incorporation, Star Bulk has not, directly or
      indirectly, including through any Subsidiary, extended or maintained credit,
      or
      arranged for the extension of credit, or renewed or amended any extension of
      credit, in the form of a personal loan to or for any of its directors or
      executive officers.

     

    
      	
              3.17

            	
              Investment
                Company.

            

    

     

    Star
      Bulk
      is not an “investment company’ or an entity “controlled” by an “investment
      company”, as such terms are defined in the Investment Company Act of
      1940.

     

    
      	
              3.18

            	
              Passive
                Foreign Investment
                Company.

            

    

     

    To
      Star
      Bulk’s best Knowledge, it does not believe it is a Passive Foreign Investment
      Company (“PFIC”)
      within
      the meaning of Section 1296 of the Code, and does not believe it is likely
      to
      become a PFIC.

     

    
      	
              3.19

            	
              Insurance.

            

    

     

    Star
      Bulk
      and each of the Subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks and in such amounts as are
      customary and in accordance with standard industry practice in the businesses
      in
      which they are engaged. Neither Star Bulk nor any such Subsidiary has received
      any notice from any insurance company that any insurance policy has been
      canceled or that such insurance company intends to cancel any such policy.
      Neither Star Bulk nor any such Subsidiary has reason to believe that Star Bulk
      and each Subsidiary will not be able to renew its existing insurance coverage
      as
      and when such coverage expires or to obtain similar coverage from similar
      insurers as may be necessary to continue its business.

     

    
      	
              3.20

            	
              Disclosure
                Controls.

            

    

     

    Star
      Bulk
      has established and maintains disclosure controls and procedures (as such term
      is defined in Rule 13a-15 under the Exchange Act), which (i) are designed to
      ensure that material information relating to Star Bulk, including the
      Subsidiaries, is made known to Star Bulk’s principal executive officer and its
      principal financial officer by others within those entities, particularly during
      the preparation of the Proxy Statement; (ii) have been evaluated for
      effectiveness as of the date of this Agreement; and (iii) are effective in
      all
      material respects to perform the functions for which they were
      established.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    
      	
              3.21

            	
              Absence
                of Material
                Weaknesses.

            

    

     

    Based
      on
      the evaluation of its internal controls over financial reporting, Star Bulk
      is
      not aware of (i) any significant deficiency or material weakness in the design
      or operation of internal controls over financial reporting which are reasonably
      likely to adversely affect its
      ability to record, process, summarize and report financial information; or
      (ii)
      any fraud, whether or not material, that involves management or other employees
      who have a significant role in the internal controls over financial reporting.
      

     

    
      	
              3.22

            	
              Books,
                Records and Accounts.

            

    

     

    Star
      Bulk’s books, records and accounts fairly and accurately reflect in all material
      respects transactions and dispositions of assets by Star Bulk and the
      Subsidiaries, and to the Knowledge of Star Bulk, the system of internal
      accounting controls of Star Bulk is sufficient to assure that: (a) transactions
      are executed in accordance with management’s authorization; (b) transactions are
      recorded as necessary to permit preparation of financial statements in
      conformity with GAAP, and to maintain accountability for assets; (c) access
      to
      assets is permitted only in accordance with management’s authorization; and (d)
      the recorded accountability for assets is compared with the existing assets
      at
      reasonable intervals and appropriate action is taken with respect to any
      differences.

     

    
      	
              3.23

            	
              Brokers
                and Finders.

            

    

     

    Star
      Bulk
      has not employed any investment banker, broker, finder or intermediary in
      connection with the transactions contemplated by this Agreement which would
      be
      entitled to any investment banking, brokerage, finder’s or similar fee or
      commission in connection with this Agreement or the transactions contemplated
      hereby.

     

    
      	
              3.24

            	
              No
                Omissions or Untrue
                Statements.

            

    

     

    No
      representation or warranty made by Star Bulk to Star Maritime in this Agreement
      or in any certificate of or Star Bulk officer required to be delivered to Star
      Maritime pursuant to the terms of this Agreement contains or will contain any
      untrue statement of a material fact, or omits or will omit to state a material
      fact necessary to make the statements contained herein or therein in light
      of
      the circumstances in which made not misleading as of the date hereof and as
      of
      the Closing Date.

     

    Article
      IV.

     

    REPRESENTATIONS
      AND WARRANTIES OF STAR MARITIME

     

    Star
      Maritime hereby represents and warrants to Star Bulk as follows (subject in
      each
      case to such exceptions as are set forth or cross-referenced in the attached
      Schedules
      corresponding to the Section of the representation or warranty to which such
      exceptions relate):

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    
      	
              4.1

            	
              Organization
                and Qualification.

            

    

     

    Star
      Maritime is a corporation duly incorporated, validly existing and in good
      standing under the laws of the State of Delaware. Star Maritime has all
      requisite corporate power to carry on its business as it is now being conducted
      and is duly qualified to do business as a foreign corporation and is in good
      standing in all jurisdictions set forth in Schedule 4.1, and to Star Maritime’s
      Knowledge, such jurisdictions are the only ones in which the properties owned,
      leased or operated by Star Maritime or the nature of the business conducted
      by
      Star Maritime makes such qualification necessary, except where the failure
      to
      qualify (individually or in the aggregate) will not have any Material Adverse
      Effect on Star Maritime. The copies of the Certificate of Incorporation and
      By-laws of Star Maritime, as amended to date and delivered to Star Bulk, are
      true and complete copies of these documents as now in effect. The minute books
      of Star Maritime are accurate in all material respects.

     

    
      	
              4.2

            	
              Capitalization. 

            

    

     

    The
      authorized capital stock of Star Maritime as of the date hereof consists of
      100,000,000
      shares of common stock, $0.0001 par value per share , of which 29,026,924 shares
      are issued and outstanding and 1,000,000 shares of preferred shares, $0.0001
      par
      value, none of which are outstanding. In addition, there are authorized, issued
      and outstanding 20,000,000 Warrants (the “Star
      Maritime Warrants”)
      providing for the issuance, upon exercise, of a like number of shares of Star
      Maritime Common Stock. The Star Maritime Warrants are each exercisable at $8.00
      per share and are each callable for redemption by Star Maritime upon the
      occurrence of certain events specified therein. All of the outstanding
      securities of Star Maritime are duly authorized, validly issued, fully paid
      and
      non-assessable, and were not issued in violation of the preemptive rights of
      any
      Person. All of the outstanding securities of Star Maritime, including the Star
      Maritime Shares , and the Star Maritime Warrants, were issued in compliance
      with
      all applicable securities laws. No shares of capital stock are held in the
      treasury of Star Maritime. Other than as stated in this Section 4.2, there
      are no outstanding subscriptions, options, warrants, calls or rights of any
      kind
      issued or granted by, or binding upon Star Maritime, to purchase or otherwise
      acquire any shares of capital stock of Star Maritime or other securities of
      Star
      Maritime. Except as stated in this Section 4.2, there are no outstanding
      securities convertible or exchangeable, actually or contingently, into shares
      of
      Star Maritime Common Stock or other securities of Star Maritime.

     

    
      	
              4.3

            	
              Subsidiaries. 

            

    

     

    Star
      Maritime has one
      subsidiary, Star Bulk. Star Maritime owns all of the issued and outstanding
      shares of stock of Star Bulk, free and clear of any Liens does not hold any
      equity interest in any other Person (except indirectly the shares of the
      Subsidiaries through its ownership of Star Bulk) . 

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    
      	
              4.4

            	
              Authority;
                Non-Contravention;
                Approvals.

            

    

     

    (a)    Star
      Maritime has full corporate power and authority to enter into this Agreement
      and, subject to the Star Maritime Stockholders’ Approval, to consummate the
      transactions contemplated hereby. Star Maritime’s execution and delivery of this
      Agreement, and its consummation of the transactions contemplated hereby, have
      been duly authorized by its board of directors and no other corporate
      proceedings on its part are necessary to authorize its execution and delivery
      of
      this Agreement and its consummation of the transactions contemplated hereby,
      except for the Star Maritime Stockholders’ Approval which will be solicited in
      accordance with Sections 6.2 and 6.4hereof. This Agreement has been duly and
      validly executed and delivered by Star Maritime, and constitutes its valid
      and
      binding agreement, enforceable against it in accordance with its terms, except
      that such enforcement may be subject to the Enforceability
      Exception.

     

    (b)    Star
      Maritime’s execution and delivery of this Agreement does not, and its
      consummation of the transactions contemplated hereby will not, violate, conflict
      with or result in a breach of any provision of, or constitute a default (or
      an
      event which, with notice or lapse of time or both, would constitute a default)
      under, or result in the termination of, or accelerate the performance required
      by, or result in a right of termination or acceleration under, or result in
      the
      creation of any Lien upon any of its properties or assets under any of the
      terms, conditions or provisions of (i) its Certificate of Incorporation or
      By-laws, (ii) subject to obtaining the Star Maritime Stockholders’ Approval, any
      Law or Order, injunction, writ, permit or license of any Governmental Authority
      applicable to it or any of its properties or assets, or (iii) any note, bond,
      mortgage, indenture, deed of trust, license, franchise, permit, concession,
      contract, lease or other instrument, obligation or agreement of any kind to
      which it is now a party or by which it or any of its properties or assets may
      be
      bound, excluding from the foregoing clauses (ii) and (iii), such violations,
      conflicts, breaches, defaults, terminations, accelerations or creations of
      liens, security interests, charges or encumbrances that do not, in the
      aggregate, have a Material Adverse Effect on Star Maritime.

     

    (c)    Except
      for the filing and clearance of preliminary proxy materials with the SEC
      pursuant to the Exchange Act, no declaration, filing or registration with,
      or
      notice to, or authorization, consent or approval of, any governmental or
      regulatory body or authority is necessary for Star Maritime’s execution and
      delivery of this Agreement or its consummation of the transactions contemplated
      hereby, other than such declarations, filings, registrations, notices,
      authorizations, consents or approvals which, if not made or obtained, as the
      case may be, would not, in the aggregate, have a Material Adverse Effect on
      Star
      Maritime.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    
      	
              4.5

            	
              Contracts
                Listed; No Default.

            

    

     

    All
      material contracts, agreements, licenses, leases, easements, permits, rights
      of
      way, commitments and understandings, written or oral, connected with or relating
      in any respect to the present or future operations of Star Maritime are, with
      the exception of this Agreement and the transactions contemplated hereby,
      described in Star Maritime’s SEC Reports and listed as exhibits thereto (the
“Star
      Maritime Contracts”).
      The
      Star Maritime Contracts are valid and binding upon Star Maritime, and to Star
      Maritime’s Knowledge, the other parties thereto, and are in full force and
      effect and enforceable in accordance with their terms, subject to the
      Enforceability Exception and neither Star Maritime, nor to Star Maritime’s
      Knowledge, any other party to any Star Maritime Contract, has materially
      breached any provision of, nor has any event occurred which, with the lapse
      of
      time or action by a third party, could result in a material default under,
      the
      terms thereof. To the Knowledge of Star Maritime, no stockholder of Star
      Maritime has received any payment in violation of law from any contracting
      party
      in connection with or as an inducement for causing Star Maritime to enter into
      any Star Maritime Contract.

     

    
      	
              4.6

            	
              Litigation.

            

    

     

    There
      is
      no (i) claim, action, suit or proceeding pending or, to Star Maritime’s
      Knowledge, threatened against or directly relating to Star Maritime before
      any
      Governmental Authority, or (ii) outstanding Order, or application, request
      or
      motion therefor, of any Governmental Authority in a proceeding to which Star
      Maritime or any of its assets was or is a party except, in the case of clauses
      (i) and (ii) above, such as would not, individually or in the aggregate, either
      materially impair or preclude Star Maritime’s ability to consummate the Merger
      or the other transactions contemplated hereby or have a Material Adverse Effect
      on Star Maritime.

     

    
      	
              4.7

            	
              Taxes. 

            

    

     

    Star
      Maritime has duly filed with the appropriate Governmental Authorities all Tax
      Returns required to be filed by it other than Tax Returns which the failure
      to
      file would have no Material Adverse Effect on Star Maritime. All such Tax
      Returns were, when filed, and are accurate and complete in all material respects
      and were prepared in conformity with applicable laws and regulations. Star
      Maritime has paid or will pay in full or has adequately reserved against all
      Taxes otherwise assessed against it through the Closing Date. Star Maritime
      is
      not a party to any pending action or proceeding by any Governmental Authority
      for the assessment of any Tax, and no claim for assessment or collection of
      any
      Tax has been asserted against Star Maritime that has not been paid. There are
      no
      Tax Liens upon the assets of Star Maritime (other than Liens for Taxes not
      yet
      due and payable). There is no valid basis, to Star Maritime’s Knowledge, for any
      assessment, deficiency, notice, 30-day letter or similar intention to assess
      any
      Tax to be issued to Star Maritime by any Governmental Authority.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    
      	
              4.8

            	
              Employee
                Plans. 

            

    

     

    Star
      Maritime has no employee benefit plans as defined in Section 3(3) of ERISA
      nor
      any employment agreements. 

     

    
      	
              4.9

            	
              No
                Violation of Law.

            

    

     

    Star
      Maritime is not in violation of and has not been given notice or been charged
      with any violation of, any Law, or Order, (including, without limitation, any
      applicable environmental law, ordinance or regulation) of any Governmental
      Authority, except for violations which, in the aggregate, do not have, and
      would
      not reasonably be expected to have, a Material Adverse Effect on Star Maritime.
      Star Maritime has not received any written notice that any investigation or
      review with respect to it by any Governmental Authority is pending or
      threatened, other than, in each case, those the outcome of which, as far as
      reasonably can be foreseen, would not reasonably be expected to have a Material
      Adverse Effect on Star Maritime. Star Maritime has all permits, licenses,
      franchises, variances, exemptions, orders and other governmental authorizations,
      consents and approvals necessary to conduct its business as presently conducted,
      except for those, the absence of which, alone or in the aggregate, would not
      have a Material Adverse Effect on Star Maritime (collectively, the “Star
      Maritime Permits”).
      Star
      Maritime (a) has duly and timely filed all reports and other information
      required to be filed with any Governmental Authority in connection with the
      Star
      Maritime Permits, and (b) is not in violation of the terms of any of the Star
      Maritime Permits, except for such omissions or delays in filings, reports or
      violations which, alone or in the aggregate, would not have a Material Adverse
      Effect on Star Maritime. 

     

    
      	
              4.10

            	
              Properties.

            

    

     

    Star
      Maritime has good and marketable title to all of the assets and properties
      which
      it purports to own as reflected on the most recent balance sheet comprising
      a
      portion of the Star Maritime Financial Statements or thereafter acquired (except
      assets and properties sold or otherwise disposed of since the date of such
      balance sheet in the ordinary course of business). Star Maritime has a valid
      leasehold interest in all properties of which it is the lessee and each such
      lease is valid, binding and enforceable against Star Maritime, and, to the
      knowledge of Star Maritime, the other parties thereto in accordance with its
      terms, subject to the Enforceability Exception. Neither Star Maritime nor,
      to
      Star Maritime’s Knowledge, the other parties thereto are in default in the
      performance of any material provision thereunder. Neither the whole nor any
      material portion of the assets of Star Maritime is subject to any governmental
      decree or order to be sold or is being condemned, expropriated or otherwise
      taken by any public authority with or without payment of compensation therefor,
      nor, to the Knowledge of Star Maritime, has any such condemnation, expropriation
      or taking been proposed. None of the material assets of Star Maritime is subject
      to any restriction which would have
      a
      Materially Adverse Effect on Star Maritime.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    
      	
              4.11

            	
              Proxy
                Statement.

            

    

     

    None
      of
      the information to be supplied by Star Maritime for inclusion in the Proxy
      Statement,
      or in
      any amendments thereof or supplements thereto, at the time of the mailing of
      the
      Proxy Statement and at the time of the Star Maritime Special Meeting contain
      any
      untrue statement of a material fact or omit to state any material fact required
      to be stated therein or necessary in order to make the statements therein,
      in
      light of the circumstances under which they are made, not
      misleading.

     

    
      	
              4.12

            	
              Business. 

            

    

     

    Star
      Maritime, since its formation, has engaged in no business other than to seek
      to
      serve as a vehicle for the acquisition of an operating business, and, except
      for
      this Agreement, is not a party to any contract or agreement for the acquisition
      of an operating business. Star Maritime has no employees.

     

    
      	
              4.13

            	
              Financial
                Statements. 

            

    

     

    The
      financial statements of Star Maritime (collectively, the “Star
      Maritime Financial Statements”)
      included in Star Maritime’s SEC Reports present fairly, in all material
      respects, the financial position and results of operations of Star Maritime
      as
      of the respective dates, years and periods indicated, prepared in accordance
      with GAAP, applied on a consistent basis, and to the Knowledge of Star Maritime,
      in accordance with Regulation S-X of the SEC and, in particular, Rules 1-02
      and
      3-05 thereunder (subject, in the case of unaudited interim period financial
      statements, to normal and recurring year-end adjustments which, individually
      or
      collectively, are not material to Star Maritime). Without limiting the
      generality of the foregoing, (i) there is no basis for any assertion against
      Star Maritime as of the date of the most recent balance sheet comprising a
      portion of the Star Maritime Financial Statements of any material debt,
      liability or obligation of any nature not fully reflected or reserved against
      in
      the Star Maritime Financial Statements or in the notes thereto required to
      be so
      reflected or reserved in accordance with GAAP; and (ii) there are no assets
      of
      Star Maritime, the value of which (in the reasonable judgment of Star Maritime)
      is materially overstated in the Star Maritime Financial Statements. Except
      as
      disclosed therein or as incurred in the ordinary course of business since
      December 31, 2004, Star Maritime has no known material contingent liabilities
      (including liabilities for Taxes). Star Maritime is not a party to any contract
      or agreement for the forward purchase or sale of any foreign currency and has
      not invested in any “derivatives.”

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    
      	
              4.14

            	
              Star
                Maritime’s SEC
                Reports.

            

    

     

    The
      Star
      Maritime Common Stock has been registered under Section 12 of the Exchange
      Act
      on Form 8-A. Since its inception, Star Maritime has filed all reports,
      registration statements and other documents, together with any amendments
      thereto, required to be filed under the Securities Act and the Exchange Act,
      including but not limited to reports on Form 10-K and Form 10-Q, and Star
      Maritime will file all such reports, registration statements and other documents
      required to be filed by it from the date of this Agreement to the Closing Date
      (all such reports, registration statements and documents, including its Form
      8-A, filed or to be filed with the SEC, including Star Maritime’s initial
      registration statement relating to the Star Maritime Common Stock, and the
      Star
      Maritime Warrants, with the exception of the Proxy Statement, are collectively
      referred to as “Star
      Maritime’s SEC Reports”).
      As of
      their respective dates, Star Maritime’s SEC Reports complied or will comply in
      all material respects with all rules and regulations promulgated by the SEC
      and
      did not or will 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 light of the circumstances under which they
      were
      made, not misleading. Neither Star Maritime nor any of its respective directors
      or officers is the subject of any investigation, inquiry or proceeding before
      the SEC or any state securities commission or administrative
      agency.

     

    
      	
              4.15

            	
              Absence
                of Certain Changes or
                Events.

            

    

     

    Since
      December 31, 2006
      there
      has not been:

     

    (a) any
      material adverse change in the financial condition, operations, properties,
      assets, liabilities or business of Star Maritime;

     

    (b) any
      material damage, destruction or loss of any material properties of Star
      Maritime, whether or not covered by insurance, which would have a Materially
      Adverse Effect on Star Maritime;

     

    (c) any
      change in the manner in which the business of Star Maritime has been
      conducted;

     

    (d) any
      material change in the treatment and protection of trade secrets or other
      confidential information of Star Maritime, which would have a Materially Adverse
      Effect on Star Maritime; and

     

    (e) any
      occurrence not included in paragraphs (a) through (d) of this Section which
      has
      resulted, or which Star Maritime has reason to believe, could reasonably be
      expected to result, in a Material Adverse Effect on Star Maritime.

     

    
      	
              4.16

            	
              Books,
                Records and Accounts.

            

    

     

    Star
      Maritime’s books, records and accounts fairly and accurately reflect in all
      material respects transactions and dispositions of assets by Star Maritime,
      and
      to the Knowledge of Star Maritime, the system of internal accounting controls
      of
      Star Maritime is sufficient to assure that: (a) transactions are executed in
      accordance with management’s authorization; (b) transactions are recorded as
      necessary to permit preparation of financial statements in conformity with
      GAAP,
      and to maintain accountability for assets; (c) access to assets is permitted
      only in accordance with management’s authorization; and (d) the recorded
      accountability for assets is compared with the existing assets at reasonable
      intervals and appropriate action is taken with respect to any
      differences.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    
      	
              4.17

            	
              Disclosure
                Controls.

            

    

     

    Star
      Maritime has established and maintains disclosure controls and procedures (as
      such term is defined in Rule 13a-15 under the Exchange Act), which (i) are
      designed to ensure that material information relating to Star Maritime is made
      known to Star Maritime’s principal executive officer and its principal financial
      officer by others within those entities, particularly during the preparation
      of
      the Proxy Statement; (ii) have been evaluated for effectiveness as of the date
      of this Agreement; and (iii) are effective in all material respects to perform
      the functions for which they were established.

     

    
      	
              4.18

            	
              Absence
                of Material
                Weaknesses.

            

    

     

    Based
      on
      the evaluation of its internal controls over financial reporting, Star Maritime
      is not aware of (i) any significant deficiency or material weakness in the
      design or operation of internal controls over financial reporting which are
      reasonably likely to adversely affect Star
      Maritime’s ability to record, process, summarize and report financial
      information; or (ii) any fraud, whether or not material, that involves
      management or other employees who have a significant role in the internal
      controls over financial reporting. 

     

    
      	
              4.19

            	
              Brokers
                and Finders.

            

    

     

    Star
      Maritime has not employed any investment banker, broker, finder or intermediary
      in connection with the transactions contemplated by this Agreement which would
      be entitled to any investment banking, brokerage, finder’s or similar fee or
      commission in connection with this Agreement or the transactions contemplated
      hereby. 

     

    
      	
              4.20

            	
              No
                Omissions or Untrue
                Statements.

            

    

     

    No
      representation or warranty made by Star Maritime to Star Bulk in this Agreement,
      any
      Schedules thereto or in any certificate of a Star Maritime officer required
      to
      be delivered to Star Bulk pursuant to the terms of this Agreement contains
      or
      will contain any untrue statement of a material fact, or omits or will omit
      to
      state a material fact necessary to make the statements contained herein or
      therein in light of the circumstances in which made not misleading as of the
      date hereof and as of the Closing Date.

     

    Article
      V.

     

    CONDUCT
      OF BUSINESS PENDING THE MERGER

     

    
      	
              5.1

            	
              Conduct
                of Business Prior to Effective
                Time.

            

    

     

    Each
      of
      Star Maritime and Star Bulk, as applicable, hereby covenants and agrees as
      follows, from and after the date of this Agreement and until the Effective
      Time,
      except as specifically consented to in writing by the other party:

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    (a)    It
      shall
      conduct its business in the ordinary and usual course of business and consistent
      with past practice;

     

    (b)    It
      shall
      not (i) split, combine or reclassify its outstanding capital stock or declare,
      set aside or pay any dividend or distribution payable in cash, stock, property
      or otherwise, (ii) spin-off any assets or businesses, (iii) engage in any
      transaction for the purpose of effecting a recapitalization, or (iv) engage
      in
      any transaction or series of related transactions which has a similar effect
      to
      any of the foregoing;

     

    (c)    It
      shall
      not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or
      dispose of, any additional shares of, or any options, warrants or rights of
      any
      kind to acquire any shares of its capital stock of any class or any debt or
      equity securities convertible into or exchangeable for such capital stock or
      amend or modify the terms and conditions of any of the foregoing, provided,
      however, that it may issue shares upon exercise of outstanding options, warrants
      or stock purchase rights;

     

    (d)    It
      shall
      not (i) redeem, purchase, acquire or offer to purchase or acquire any shares
      of
      its capital stock, other than as required by the governing terms of such
      securities, (ii) take or fail to take any action which action or failure to
      take
      action would cause it or its stockholders (except to the extent that any
      stockholders receive cash in lieu of fractional shares) to recognize gain or
      loss for Tax purposes as a result of the consummation of the Merger, (iii)
      make
      any acquisition of any material assets (except in the ordinary course of
      business) or businesses, (iv) sell any material assets (except in the ordinary
      course of business) or businesses, or (v) enter into any contract, agreement,
      commitment or arrangement to do any of the foregoing;

     

    (e)    It
      shall
      use reasonable efforts to preserve intact its business organization and
      goodwill, keep available the services of its present officers and key employees,
      and preserve the goodwill and business relationships with suppliers,
      distributors, customers, and others having business relationships with it,
      and
      not engage in any action, directly or indirectly, with the intent to impact
      adversely the transactions contemplated by this Agreement;

     

    (f)    It
      shall
      confer on a regular basis with one or more representatives of the other to
      report on material operational matters and the general status of ongoing
      operations; and

     

    (g)    It
      shall
      file with the SEC all forms, statements, reports and documents (including all
      exhibits, amendments and supplements thereto) required to be filed by it
      pursuant to the Exchange Act.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    
      	
              5.2

            	
              No
                Solicitation.

            

    

     

    (a)    Star
      Bulk
      agrees that, prior to the Effective Time or the termination or abandonment
      of
      this Agreement, that it shall not, and shall not give authorization or
      permission to any of Star Bulk’s directors, officers, employees, agents or
      representatives to, and each shall use all reasonable efforts to see that such
      persons do not, directly or indirectly, solicit, initiate, facilitate or
      encourage (including by way of furnishing or disclosing information) any merger,
      consolidation, other business combination involving Star Bulk or any of the
      Subsidiaries, acquisition of all or any substantial portion of the assets or
      capital stock of Star Bulk or any of the Subsidiaries or inquiries or proposals
      concerning or which may reasonably be expected to lead to any of the foregoing
      (an “Star
      Bulk Acquisition Transaction”)
      or
      negotiate, explore or otherwise knowingly communicate in any way with any third
      party (other than Star Maritime or its Affiliates) with respect to any Star
      Bulk
      Acquisition Transaction or enter into any agreement, arrangement or
      understanding requiring Star Bulk to abandon, terminate or fail to consummate
      the Merger or any other transaction expressly contemplated by this Agreement,
      or
      contemplated to be a material part thereof. Star Bulk shall advise Star Maritime
      in writing of any bona fide
      inquiries or proposals relating to any Star Bulk Acquisition Transaction within
      one business day following receipt by Star Bulk of any such inquiry or proposal.
      Star Bulk shall also promptly advise any person seeking an Star Bulk Acquisition
      Transaction that it is bound by the provisions of this Section
      5.2(a).

     

    (b)    Star
      Maritime agrees that, prior to the Effective Time or the termination or
      abandonment of this Agreement, Star Maritime shall not give authorization or
      permission to any of its directors, officers, employees, agents or
      representatives to, and each shall use all reasonable efforts to see that such
      persons do not, directly or indirectly, solicit, initiate, facilitate or
      encourage (including by way of furnishing or disclosing information) any merger,
      consolidation, other business combination involving Star Maritime, acquisition
      of all or any substantial portion of the assets or capital stock of Star
      Maritime, or inquiries or proposals which may reasonably be expected to lead
      to
      any of the foregoing (a “Star
      Maritime Acquisition Transaction”)
      or
      negotiate, explore or otherwise knowingly communicate in any way with any third
      party with respect to any Star Maritime Acquisition Transaction or enter into
      any agreement, arrangement or understanding requiring it to abandon, terminate
      or fail to consummate the Merger or any other transaction expressly contemplated
      by this Agreement, or contemplated to be a material part thereof. Star Maritime
      shall advise Star Bulk in writing of any bona fide
      inquiries or proposals relating to a Star Maritime Acquisition Transaction,
      within one business day following Star Maritime’s receipt of any such inquiry or
      proposal. Star Maritime shall also promptly advise any person seeking a Star
      Maritime Acquisition Transaction that it is bound by the provisions of this
      Section 5.2(b).

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    Article
      VI.

     

    ADDITIONAL
      AGREEMENTS

     

    
      	
              6.1

            	
              Access
                to Information.

            

    

     

    Each
      of
      Star Maritime and Star Bulk shall afford to the other and the other’s
      accountants, counsel, financial advisors and other representatives reasonable
      access during normal business hours throughout the period prior to the Effective
      Time to all properties, books, contracts, commitments and records (including,
      but not limited to, Tax Returns) of it and, during such period, shall furnish
      promptly (a) a copy of each report, schedule and other document filed or
      received by it during such period pursuant to the requirements of federal or
      state securities laws or filed by it during such period with the SEC in
      connection with the transactions contemplated by this Agreement or which may
      have a Material Adverse Effect on it and (b) such other information concerning
      its business, properties and personnel as the other shall reasonably request;
      provided, however, that no investigation pursuant to this Section 6.1 shall
      affect any representation or warranty made herein or the conditions to the
      obligations of the respective parties to consummate the Merger. All non-public
      documents and information furnished to Star Maritime or Star Bulk, as the case
      may be, in connection with the transactions contemplated by this Agreement
      shall
      be deemed to have been received, and shall be held by the recipient, in
      confidence, except that Star Maritime and Star Bulk, as applicable, may disclose
      such information as may be required under applicable Law or as may be necessary
      in connection with the preparation of the Proxy Statement. Each party shall
      promptly advise the others, in writing, of any change or the occurrence of
      any
      event after the date of this Agreement and prior to the Effective Time having,
      or which, insofar as can reasonably be foreseen, in the future would reasonably
      be expected to have, any Material Adverse Effect on Star Bulk or Star Maritime,
      as applicable.

     

    
      	
              6.2

            	
              Star
                Bulk Registration
                Statement.

            

    

     

    (a)    Star
      Bulk
      covenants and agrees to file with the SEC as soon as shall be reasonably
      practicable following the date of this Agreement (provided Star Maritime shall
      have supplied Star Bulk with the Proxy Statement to be included therein), at
      its
      sole cost and expense, a registration statement on Form F-1/F-4 or comparable
      form (the “Star
      Bulk Registration Statement”)
      which
      shall include a joint proxy statement/prospectus (the “Proxy
      Statement”)
      relating to the solicitation of the Star Maritime Stockholders’ Approval of, and
      covering the issuance of the Star Bulk Shares in, the Merger, the Star Bulk
      Warrants and the shares of Star Bulk common stock underlying the Star Bulk
      Warrants. Star Bulk shall use all reasonable best efforts to have the Star
      Bulk
      Registration Statement declared effective by the SEC as promptly as practicable
      thereafter. Star Bulk shall also take any action (other than qualifying to
      do
      business in any jurisdiction in which it is not now so qualified or to file
      a
      general consent to service of process) required to be taken under any applicable
      state securities Laws in connection with the issuance of Star Bulk Shares and
      the Star Bulk Warrants in the Merger. No filing of, or amendment or supplement
      to, or correspondence to the SEC or its staff with respect to, the Star Bulk
      Registration Statement or the Proxy Statement will be made by Star Bulk, without
      providing Star Maritime a reasonable opportunity to review and comment thereon.
      Star Bulk will advise Star Maritime, promptly after it receives notice thereof,
      of the time when the Star Bulk Registration Statement has become effective
      or
      any supplement or amendment has been filed to the Star Bulk Registration
      Statement or the Proxy Statement, the issuance of any stop order, the suspension
      of the qualification of Star Bulk Shares issuable in connection with the Merger
      for offering or sale in any jurisdiction, or any request by the SEC for
      amendment of the Star Bulk Registration Statement, the Proxy Statement or
      comments thereon and responses thereto or requests by the SEC for additional
      information. If at any time prior to the Effective Time any information relating
      to Star Maritime or Star Bulk, or any of their respective Affiliates, officers
      or directors, should be discovered by Star Maritime or Star Bulk which should
      be
      set forth in an amendment or supplement to any of the Star Bulk Registration
      Statement or the Proxy Statement, so that any of such documents would not
      include any misstatement of a material fact or omit to state any material fact
      necessary to make the statements therein, in light of the circumstances under
      which they were made, not misleading, the party which discovers such information
      shall promptly notify the other parties hereto and an appropriate amendment
      or
      supplement describing such information shall be promptly filed with the SEC
      and,
      to the extent required by law, disseminated to the stockholders of Star
      Maritime. 

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    (b)    Star
      Maritime and Star Bulk shall promptly furnish to each other all information,
      and
      take such other actions, as may reasonably be requested in connection with
      any
      action by any of them in connection with the preparation and filing of the
      Star
      Bulk Registration Statement and the Proxy Statement and shall cooperate with
      one
      another and use their respective best efforts to facilitate the expeditious
      consummation of the transactions contemplated by this Agreement.

     

    
      	
              6.3

            	
              SEC
                Filings by Star
                Maritime.

            

    

     

    Star
      Maritime shall file with the SEC, as soon as reasonably practicable following
      the filing of the Star Bulk Registration Statement, any document required to
      be
      filed by it in connection with the Merger and the Star Maritime Stockholders’
Approval contemplated by this Agreement, including, without limitation, any
      documents required under the SEC’s Regulation 14A.

     

    
      	
              6.4

            	
              Stockholders’
                Approval.

            

    

     

    
      Star
        Maritime shall use its reasonable best efforts to obtain Star Maritime
        stockholder approval and adoption of this Agreement and the transactions
        contemplated hereby (the “Star Maritime Stockholders’ Approval”), as soon
        as practicable in accordance with applicable Delaware law and the Star Maritime
        Bylaws following the date on which the Star Bulk Registration Statement is
        declared effective by the SEC, as follows: (i)  the Merger shall have
        been approved by a majority of Star Maritime Shares issued and outstanding
        and
        entitled to vote thereon; (ii)  the Merger shall have been approved by
        a majority of the Transaction Shares (as defined below), including the Private
        Placement Shares (as defined below); and (iii)  holders of less than
        6,600,000 Star Maritime Shares, such number representing 33.0% of the
        Transaction Shares, vote against the Merger and elect to exercise redemption
        rights. “Transaction Shares” shall mean (i) the 18,867,500 Star Maritime Shares
        issued as part of the units sold in Star Maritime’s initial public offering
        which closed on December 21, 2005; and (ii) the 1,132,500 Star Maritime Shares
        acquired by certain officers and directors of Star Maritime in the private
        placement which closed on December 15, 2005 (the “Private Placement”). Holders
        of the Private Placement Shares have agreed to vote such shares in favor
        of the
        Merger. Star Maritime shall, through its board of directors, recommend to
        the
        holders of Star Maritime Common Stock approval of this Agreement and the
        transactions contemplated by this Agreement. Prokopios (Akis) Tsirigakis,
        George
        Syllantavos, Petros Pappas, Koert Erhardt and Tom Søfteland (the “Star
        Maritime Directors”), in their capacities as members of the board of
        directors of Star Maritime but subject to their fiduciary duty to the
        stockholders of Star Maritime, in connection with the solicitation of proxies
        pursuant to the Proxy Statement, shall unanimously recommend the approval
        and
        adoption of the Merger and this Agreement by the stockholders of Star Maritime.
        

    

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    
      	
              6.5

            	
              Stock
                Exchange Listing/Exchange Act Listing.
                

            

    

     

    Star
      Maritime and Star Bulk shall each use its reasonable best efforts to file,
      at or
      before the Effective Time, authorization for listing of the Star Bulk Shares
      and
      the Star Bulk Exchange Securities on the NASDAQ National Market (the
“Stock
      Exchange Listing”).
      In
      addition, Star Bulk shall, as soon as reasonably practicable, file a
      registration statement under the Exchange Act and use its reasonable best
      efforts to cause the SEC to declare such registration statement effective with
      respect to the listing of the Star Bulk Shares issued in the Merger, the Star
      Bulk Warrants and the shares of Star Bulk common stock underlying the Star
      Bulk
      Exchange Securities (the “Exchange
      Act Listing”).

     

    
      	
              6.6

            	
              Star
                Maritime Warrants. 

            

    

     

    At
      the
      Effective Time, Star Bulk shall assume each Star Maritime Warrant in accordance
      with the terms of the agreement under which it was issued and all rights with
      respect to Star Maritime Shares
      under each Star Maritime Warrant then outstanding shall be converted into and
      become Star Bulk. Accordingly, after the Effective Time, each holder of Star
      Bulk Warrants at the time of exercise shall receive a number of Star Bulk Shares
      (rounded up to the nearest whole share) equal to the number of shares of Star
      Maritime Share subject to such Star Maritime Warrant immediately prior to the
      Effective Time multiplied by the Exchange Ratio at an exercise price per Star
      Bulk Share (rounded up to the nearest whole cent) equal to the exercise price
      in
      effect prior to the Effective Time divided by the Exchange Ratio. The Star
      Bulk
      Warrants shall contain the same terms, conditions and restrictions that were
      applicable to the Star Maritime Warrants. Prior to the Effective Time, Star
      Bulk
      shall take all necessary action to assume as of the Effective Time all
      obligations undertaken by Star Bulk under this Section 6.6, including the
      reservation, issuance and listing of a number of Star Bulk Shares at least
      equal
      to the number of Star Bulk Shares subject to the assumed Star Maritime
      Warrants.

     

    
      	
              6.7

            	
              Agreement
                to Cooperate.

            

    

     

    Subject
      to the terms and conditions herein provided, each of the parties hereto shall
      cooperate and use their respective best efforts to take, or cause to be taken,
      all action and to do, or cause to be done, all things necessary, proper or
      advisable under applicable laws and regulations to consummate and make effective
      the transactions contemplated by this Agreement, including using its reasonable
      efforts to obtain all necessary or appropriate waivers, consents and approvals
      to effect all necessary registrations, filings and submissions and to lift
      any
      injunction or other legal bar to the Merger (and, in such case, to proceed
      with
      the Merger as expeditiously as possible), subject, however, to obtaining the
      Star Maritime Stockholders’ Approval; and provided that nothing in this Section
      6.7 shall affect any responsibility or obligation specifically allocated to
      any
      party in this Agreement.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    
      	
              6.8

            	
              Corrections
                to the Proxy Statement and the Star Bulk Registration
                Statement.

            

    

     

    Prior
      to
      the Closing Date, each of Star Bulk and Star Maritime shall correct promptly
      any
      information provided by it to be used specifically in the Proxy Statement and
      the Star Bulk Registration Statement that shall have become false or misleading
      in any material respect and shall take all steps necessary to file with the
      SEC
      and have cleared by the SEC any amendment or supplement to the Proxy Statement
      and the Star Bulk Registration Statement so as to correct the same and to cause
      appropriate dissemination thereof to the stockholders of Star Maritime, to
      the
      extent required by applicable Law.

     

    
      	
              6.9

            	
              Disclosure
                Supplements.

            

    

     

    From
      time
      to time prior to the Closing Date, and in any event immediately prior to the
      Closing Date, each of Star Maritime and Star Bulk shall promptly supplement
      or
      amend its Schedules
      hereto
      with respect to any matter hereafter arising that, if existing, occurring or
      known at the date of this Agreement, would have been required to be set forth
      or
      described in such Schedule or that is necessary to correct any information
      in
      such Schedule that is or has become inaccurate. Notwithstanding the foregoing,
      if any such supplement or amendment discloses a Material Adverse Effect, the
      conditions to the other party’s obligations to consummate the Merger set forth
      in Article VII hereof shall be deemed not to have been satisfied.

     

    Article
      VII.

     

    CONDITIONS

     

    
      	
              7.1

            	
              Conditions
                to Each Party’s Obligations to Effect the
                Merger.

            

    

     

    The
      respective obligation of each party to effect the Merger shall be subject to
      the
      fulfillment at or prior to the Closing Date of the following
      conditions:

     

    (a)    Star
      Maritime shall have obtained the Star Maritime Stockholders’
Approval;

     

    (b)    The
      Star
      Bulk Registration Statement shall have become effective under the Securities
      Act
      and shall not be the subject of any stop order or proceedings seeking a stop
      order;

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    (c)    The
      Star
      Bulk Shares issuable to Star Maritime’s stockholders pursuant to Section 2.9
      hereof, the Star Bulk Warrants issuable to Star Maritime shareholders pursuant
      to Section 2.10 hereof and the Star Bulk Shares issuable upon exercise of such
      Star Bulk Warrants shall have been approved for the Stock Exchange Listing
      and
      the Exchange Act Listing, subject to any notice of issuance or similar
      requirement. 

     

    (d)    The
      Vessel Acquisition Agreements shall be in full force and effect;

     

    (e)    No
      preliminary or permanent injunction or other order or decree by any Governmental
      Authority which prevents or materially burdens the consummation of the Merger
      shall have been issued and remain in effect (each party agreeing to use its
      reasonable efforts to have any such injunction, order or decree
      lifted);

     

    (f)    No
      action
      shall have been taken, and no statute, rule or regulation shall have been
      enacted, by any Governmental Authority, which would prevent or materially burden
      the consummation of the Merger;

     

    (g)    All
      consents, orders and approvals legally required for the consummation of the
      Merger and the transactions contemplated hereby shall have been obtained and
      be
      in effect at the Effective Time without any material limitations or conditions.
      

     

    
      	
              7.2

            	
              Conditions
                to Obligations of Star Bulk to Effect the
                Merger.

            

    

     

    Unless
      waived by Star Bulk, the obligation of Star Bulk to effect the Merger shall
      also
      be subject to the fulfillment at or prior to the Closing Date of the following
      additional conditions:

     

    (a)    Star
      Maritime shall have performed in all material respects its agreements contained
      in this Agreement required to be performed on or prior to the Closing Date
      and
      the representations and warranties of Star Maritime contained in this Agreement
      shall be true and correct in all material respects (except for those
      representations and warranties which are themselves limited by a reference
      to
      materiality, which shall be true and correct in all respects other than as
      modified) on and as of (i) the date made and (ii) the Closing Date (in each
      case
      except in the case of representations and warranties expressly made solely
      with
      reference to a particular date which shall be true and correct in all material
      respects as of such date); and Star Bulk shall have received a certificate
      of
      the president of Star Maritime to that effect;

     

    (b)    Since
      the
      date of this Agreement there shall not have been any Material Adverse Effect
      with respect to Star Maritime, the likelihood of which was not previously
      disclosed to Star Bulk by Star Maritime as contemplated by this Agreement and
      Star Maritime shall have engaged in no business activity since the date of
      its
      incorporation other than conducting a public offering of its securities and,
      thereafter, seeking to effect a merger or similar business combination with
      an
      operating business;

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    (c)    Star
      Bulk
      shall have received a certificate from the corporate Secretary of Star Maritime,
      together with a certified copy of the resolutions duly authorized by Star
      Maritime’s board of directors authorizing the Merger and, if applicable, the
      transactions contemplated by this Agreement;

     

    (d)    Star
      Bulk
      shall have received a certificates of good standing for Star Maritime from
      the
      Secretary of State of the State of Delaware dated as of a date that is within
      five (5) days of the Closing Date;

     

    (e)    Star
      Maritime shall have furnished to Star Bulk such additional certificates and
      other customary closing documents as Star Bulk may have reasonably requested
      as
      to any of the conditions set forth in this Section 7.2;

     

    (f)    At
      Closing, the Star Maritime capitalization shall be unchanged from that set
      forth
      in Section 4.2;

     

    (g)    Star
      Maritime shall have conducted the operation of its business in material
      compliance with all applicable Laws and all approvals required of Star Maritime
      under applicable law to enable Star Maritime to perform its obligations under
      this Agreement shall have been obtained; and

     

    (h)    All
      corporate proceedings of Star Maritime in connection with the Merger and the
      other transactions contemplated by this Agreement and all agreements,
      instruments, certificates, and other documents delivered to Star Bulk by or
      on
      behalf of Star Maritime pursuant to this Agreement shall be reasonably
      satisfactory to Star Bulk and its counsel.

     

    
      	
              7.3

            	
              Conditions
                to Obligations of Star Maritime to Effect the
                Merger.

            

    

     

    Unless
      waived by Star Maritime, the obligations of Star Maritime to effect the Merger
      shall also be subject to the fulfillment at or prior to the Closing Date of
      the
      additional following conditions:

     

    (a)    Star
      Bulk
      shall have performed in all material respects their agreements contained in
      this
      Agreement required to be performed on or prior to the Closing Date and the
      representations and warranties of Star Bulk contained in this Agreement shall
      be
      true and correct in all material respects (except for those representations
      and
      warranties which are themselves limited by a reference to materiality, which
      shall be true and correct in all respects, other than as modified) on and as
      of
      (i) the date made and (ii) the Closing Date (in each case except in the case
      of
      representations and warranties expressly made solely with reference to a
      particular date which shall be true and correct in all material respects as
      of
      such date); and Star Maritime shall have received a certificate of the president
      of Star Bulk to that effect;

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    (b)    Star
      Maritime shall have received an opinion from Seward & Kissel LLP, U.S.
      counsel to Star Maritime, dated the Closing Date, in form and substance
      reasonably satisfactory to Star Maritime, which shall include, among other
      things, an opinion that (i) the Merger will be treated as a "reorganization"
      within the meaning of Section 368(a) of the Code, (ii) each of Star Bulk and
      Star Maritime will be treated as a "party to a reorganization" within the
      meaning of Section 368(b) of the Code, and (iii) neither Star Maritime nor
      the
      stockholders of Star Maritime (except to the extent of any cash received by
      such
      stockholders) will recognize any taxable gain or loss for U.S. federal income
      tax purposes upon consummation of the Merger.

     

    (c)    Star
      Maritime shall have received a certificate from the president of Star Bulk
      that
      the Vessel Acquisition Agreements are in full force and effect;

     

    (d)    Immediate
      prior to Closing, Star Bulk’s capitalization shall be unchanged from that as set
      forth in Section 3.3;

     

    (e)    Star
      Maritime shall have received a certificate of the corporate Secretary of Star
      Bulk together with a certified copy of the resolutions duly authorized by the
      board of directors and the sole Star Bulk shareholder authorizing the Merger
      and
      the transactions contemplated by this Agreement;

     

    (f)    Star
      Maritime shall have received a certificate of good standing for Star Bulk from
      the Registrar of Corporations of the Republic of the Marshall Islands dated
      as
      of a date that is within five (5) days of the Closing Date;

     

    (g)    Star
      Bulk
      shall have furnished to Star Maritime such additional certificates and other
      customary closing documents as Star Maritime may have reasonably requested
      as to
      any of the conditions set forth in this Section 7.3;

     

    (h)    Since
      the
      date of this Agreement there shall not have been any Material Adverse Effect
      with respect to Star Bulk, the likelihood of which was not previously disclosed
      to Star Maritime by Star Bulk;

     

    (i)    Star
      Bulk
      shall have amended its Articles of Incorporation and By-laws on terms reasonably
      satisfactory to Star Maritime, including, but not limited to, removing any
      ability of such company to issue bearer shares, and such documents shall be
      in
      full force and effect; 

     

    (j)    Star
      Bulk
      shall be the sole registered and beneficial shareholder of the
      Subsidiaries;

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    (k)    Star
      Maritime shall be the sole registered and beneficial shareholder of Star Bulk;
      and

     

    (l)    All
      corporate proceedings of Star Bulk in connection with the Merger and the other
      transactions contemplated by this Agreement and all agreements, instruments,
      certificates and other documents delivered to Star Maritime by or on behalf
      of
      Star Bulk pursuant to this Agreement shall be in substantially the form called
      for hereunder or otherwise reasonably satisfactory to Star Maritime and its
      counsel.

     

    Article
      VIII.

     

    TERMINATION,
      AMENDMENT AND WAIVER

     

    
      	
              8.1

            	
              Termination. 

            

    

     

    This
      Agreement may be terminated at any time prior to the Closing Date, whether
      before or after approval by the stockholders of Star Maritime:

     

    (a)    by
      mutual
      consent in writing of Star Maritime and Star Bulk;

     

    (b)    unilaterally
      upon written notice by Star Maritime to Star Bulk in the event a material breach
      of any material representation or warranty of Star Bulk contained in this
      Agreement (unless such breach shall have been cured within ten (10) days after
      the giving of such notice by Star Maritime), or the willful failure of Star
      Bulk
      to comply with or satisfy any material covenant or condition of Star Bulk
      contained in this Agreement; or

     

    (c)    unilaterally
      upon written notice by Star Bulk to Star Maritime in the event of a material
      breach of any material representation or warranty of Star Maritime contained
      in
      this Agreement (unless such breach shall have been cured by Star Maritime within
      ten (10) days after the giving of such notice by Star Bulk), or Star Maritime’s
      willful failure to comply with or satisfy any material covenant or condition
      of
      Star Maritime contained in this Agreement, or if Star Maritime fails to obtain
      the Star Maritime Stockholders’ Approval.

     

    
      	
              8.2

            	
              Effect
                of Termination.

            

    

     

    In
      the
      event of termination of this Agreement by either Star Maritime or Star Bulk,
      as
      provided in Section 8.1, this Agreement shall forthwith become void and there
      shall be no further obligation on the part of either Star Bulk or Star Maritime
      (except as set forth in the penultimate sentence of Section 6.1 (with respect
      to
      confidential and nonpublic information) and Section 8.5, which shall survive
      such termination). Nothing in this Section 8.2 shall relieve any party from
      liability for any breach of this Agreement.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    
      	
              8.3

            	
              Amendment. 

            

    

     

    This
      Agreement may not be amended except by an instrument in writing signed on behalf
      of each of the parties hereto and in compliance with applicable
      law.

     

    
      	
              8.4

            	
              Waiver. 

            

    

     

    At
      any
      time prior to the Effective Time, the parties hereto may (i) extend the time
      for
      the performance of any of the obligations or other acts of the other parties
      hereto, (ii) waive any inaccuracies in the representations and warranties
      contained herein or in any document delivered pursuant thereto and (iii) waive
      compliance with any of the agreements or conditions contained herein. Any
      agreement on the part of a party hereto to any such extension or waiver shall
      be
      valid only if set forth in an instrument in writing signed on behalf of such
      party.

     

    
      	
              8.5

            	
              Expenses. 

            

    

     

    Whether
      or not the Merger is consummated, all costs and expenses incurred in connection
      with this Agreement and the transactions contemplated hereby shall be paid
      by
      the party incurring such costs and expenses, except as otherwise specifically
      provided for herein.

     

    Article
      IX.

     

    GENERAL
      PROVISIONS

     

    
      	
              9.1

            	
              Notices. 

            

    

     

    All
      notices and other communications hereunder shall be in writing and shall be
      deemed given if delivered personally (effective upon delivery), sent by a
      reputable overnight courier service for next business day delivery (effective
      the next business day) or sent via facsimile (effective upon receipt of the
      telecopy in complete, readable form) to the parties at the following addresses
      (or at such other address for a party as shall be specified by like
      notice):

     

    (a)    If
      to
      Star Maritime to:

     

    Star
      Maritime Acquisition Corp.

    103
      Foulk
      Road

    Wilmington,
      DE 19803

     

    with
      a
      copy to:

     

    Seward
      & Kissel LLP

    One
      Battery Park Plaza

    New
      York,
      New York 10004

    Attention:
      Robert E. Lustrin, Esq.

    FAX:
      (212) 480-8421

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    (b)    If
      to
      Star Bulk , to:

     

    Star
      Bulk
      Carriers Corp.

    40
      Ag.
      Konstantinou Avenue

    Aethrion
      Center, Suite B34

    Maroussi
      15124

    Athens,
      Greece

     

    with
      a
      copy to:

    Seward
      & Kissel LLP

    One
      Battery Park Plaza

    New
      York,
      New York 10004

    Attention:
      Robert E. Lustrin, Esq.

    FAX:
      (212) 480-8421

     

    
      	
              9.2

            	
              Interpretation. 

            

    

     

    The
      headings contained in this Agreement are for reference purposes only and shall
      not affect in any way the meaning or interpretation of this
      Agreement.

     

    
      	
              9.3

            	
              Miscellaneous. 

            

    

     

    This
      Agreement (including the documents and instruments referred to herein) (i)
      constitutes the entire agreement and supersedes all other prior agreements
      and
      understandings, both written and oral, among the parties, or any of them, with
      respect to the subject matter hereof; (ii) shall not be assigned by contract,
      operation of law or otherwise, and any attempt to do so shall be
      void;
      and
      (iii) shall be governed in all respects, including validity, interpretation
      and
      effect, by the laws of the State of New York (without giving effect to the
      provisions thereof relating to conflicts of law).

     

    
      	
              9.4

            	
              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 the Borough of Manhattan in The City of New York
      and of the United States District Court for the Southern District of New York
      sitting in the Borough of Manhattan in The City of New York, and any appellate
      court from any thereof, in any action or proceeding arising out of or relating
      to any matter set forth in this Agreement, and each of the parties hereto hereby
      irrevocably agree that all claims in respect of such action or proceeding may
      be
      heard and determined in such New York State or Federal court. Star Maritime
      and Star Bulk hereby irrevocably waive, to the fullest extent that they may
      legally do so, the defense of an inconvenient forum to the maintenance of such
      action or proceeding. Star Maritime and Star Bulk irrevocably consent to the
      service of any and all process in any action or proceeding by the delivery
      of
      copies of such process to it at its notice address in Section 9.1. Star Maritime
      and Star Bulk agree 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.

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    
      	
              9.5

            	
              Waiver
                of Jury Trial. 

            

    

     

    THE
      PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
      LAW, ANY AND ALL RIGHT TO TRIAL BY JURY (BUT NO OTHER JUDICIAL REMEDIES) IN
      ANY
      LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
      TRANSACTIONS CONTEMPLATED HEREBY.

     

    
      	
              9.6

            	
              Counterparts. 

            

    

     

    This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed to be an original, but all of which shall constitute one and the same
      agreement. In pleading or proving this Agreement, it shall not be necessary
      to
      produce or account for more than one fully executed original. 

     

    
      	
              9.7

            	
              Benefits
                of Agreement.

            

    

     

    Nothing
      in this Agreement, expressed or implied, shall give to any Person, other than
      the parties hereto and their successors hereunder, and the stockholders of
      Star
      Maritime, any benefit or any legal or equitable right, remedy or claim under
      this Agreement. 

     

    
      	
              9.8

            	
              Parties
                in Interest. 

            

    

     

    This
      Agreement shall be binding upon and inure solely to the benefit of each party
      hereto, and nothing in this Agreement, express or implied, is intended to confer
      upon any other person any rights or remedies of any nature whatsoever under
      or
      by reason of this Agreement, except as otherwise provided in Section
9.7
      of
      this Agreement.

     

    
      	
              9.9

            	
              Captions. 

            

    

     

    The
      captions of sections and subsections of this Agreement are for reference only,
      and shall not affect the interpretation or construction of this
      Agreement.

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    

     

    IN
      WITNESS WHEREOF,
      Star
      Maritime, and Star Bulk have caused this Agreement to be signed by their
      respective officers thereunto duly authorized as of the date first written
      above.

     

     

    
      	 	 	 
	 	STAR
              MARITIME ACQUISITION CORP.
	 
 	 
 	 
 
	 	By:  	/s/ Prokopios Tsirigakis
	 	
              

              
                
                  Name:
                    Prokopios Tsirigakis
Title:
                  Chairman, Chief Executive Officer and President

              

            
	 	 

       

      
        	 	 	 
	 	STAR
                BULK
                CARRIERS CORP.
	 
 	 
 	 
 
	 	By:  	/s/ Prokopios Tsirigakis
	 	
                

                
                  
                    Name:
                      Prokopios Tsirigakis
Title:
                    President

                

              
	 	 

 

      
        
          
          

        

        
          41

          
            

          

        

        
          
          

        

      

    

     

    SCHEDULE
      2.5

     

    Directors
      of Surviving Corporation

     

    

     

    Prokopios
      (Akis) Tsirigakis 

     

    George
      Syllantavos 

     

    Petros
      Pappas 

     

    Nobu
      Su

     

    Peter
      Espig 

     

    Koert
      Erhardt 

     

    Tom
      Søfteland 

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      2.6

     

    Star
      Bulks Shares Post Merger

     

    

     

    
      	 	
              Securities
                Outstanding Immediately Before Merger

            	
              Securities
                Outstanding Immediately After Merger1 

            
	
              Star
                Maritime common
                shares

            	
              29,026,924

            	
              0

            
	
              Star
                Maritime preferred shares

            	
              0

            	
              0

            
	
              Star
                Maritime
                warrants

            	
              20,000,000

            	
              0

            
	
              Star
                Bulk common shares

            	
                
                5002

            	
              29,026,924

            
	
              Star
                Bulk preferred shares

            	
              0

            	
              0

            
	
              Star
                Bulk warrants

            	
              0

            	
              20,000,000

            

    

     

    
      

      
        1
          Assumes
          all outstanding securities in Star Maritime and Star Bulk are exchanged
          for, or
          converted to, Star Bulk Shares.

      

      
        2
          Cancelled in merger.

      

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      3.1

     

    Jurisdictions
      In Which Star Bulk Is Qualified

     

    Marshall
      Islands.

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

    SCHEDULE
      3.5(a)

     

    Material
      Agreements Of Star Bulk

     

    

     

    Supplemental
      Agreement dated January 12, 2007 by and among Star Maritime, Star Bulk and
      TMT.

     

    Memorandum
      of Agreement relating to the A Duckling dated January 12, 2007 between Star
      Bulk
      Carriers Corp., as buyer, and A Duckling Corporation, as seller.

     

    Memorandum
      of Agreement relating to the B Duckling dated January 12, 2007 between Star
      Bulk
      Carriers Corp., as buyer, and B Duckling Corporation, as seller.

     

    Memorandum
      of Agreement relating to the C Duckling dated January 12, 2007 between Star
      Bulk
      Carriers Corp., as buyer, and C Duckling Corporation, as seller.

     

    Memorandum
      of Agreement relating to the F Duckling dated January 12, 2007 between Star
      Bulk
      Carriers Corp., as buyer, and F Duckling Corporation, as seller.

     

    Memorandum
      of Agreement relating to the G Duckling dated January 12, 2007 between Star
      Bulk
      Carriers Corp., as buyer, and G Duckling Corporation, as seller.

     

    Memorandum
      of Agreement relating to the I Duckling dated January 12, 2007 between Star
      Bulk
      Carriers Corp., as buyer, and I Duckling Corporation, as seller.

     

    Memorandum
      of Agreement relating to the J Duckling dated January 12, 2007 between Star
      Bulk
      Carriers Corp., as buyer, and J Duckling Corporation, as seller.

     

    Memorandum
      of Agreement relating to the Mommy Duckling dated January 12, 2007 between
      Star
      Bulk Carriers Corp., as buyer, and Mommy Management Corp., as
      seller.

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

    SCHEDULE
      3.14

     

    Material
      Adverse Changes

     

    None.

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

    SCHEDULE
      4.1

     

    Jurisdictions
      In Which Star Maritime Is Qualified

     

    Delaware.

     

    
      
        
        

      

      
        47Unassociated Document

    SECURITIES
      PURCHASE AGREEMENT

     

     

    SECURITIES
      PURCHASE AGREEMENT (this “Agreement”),
      dated
      as of March 9, 2007, by and among GlobalNet Corporation, a Nevada corporation,
      with headquarters located at 2616 South Loop West, Suite 670, Houston, Texas
      77054 (the “Company”),
      and
      each of the purchasers set forth on the signature pages hereto (the
“Buyers”).

     

    WHEREAS:

     

    A. The
      Company and the Buyers are executing and delivering this Agreement in reliance
      upon the exemption from securities registration afforded by the rules and
      regulations as promulgated by the United States Securities and Exchange
      Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933
      Act”);

     

    B. Buyers
      desire to purchase and the Company desires to issue and sell, upon the terms
      and
      conditions set forth in this Agreement (i) 10% convertible debentures of the
      Company, in the form attached hereto as Exhibit
      “A”,
      in the
      aggregate principal amount of One Hundred Eighty Thousand Dollars ($180,000)
      (together with any debenture(s) issued in replacement thereof or as a dividend
      thereon or otherwise with respect thereto in accordance with the terms thereof,
      the “Debentures”),
      convertible into shares of common stock, $.005 par value per share, of the
      Company (the “Common
      Stock”),
      upon
      the terms and subject to the limitations and conditions set forth in such
      Debentures and (ii) warrants, in the form attached hereto as Exhibit
      “B”,
      to
      purchase 10,000,000 shares of Common Stock (the “Warrants”).

     

    C. Each
      Buyer wishes to purchase, upon the terms and conditions stated in this
      Agreement, such principal amount of Debentures and number of Warrants as is
      set
      forth immediately below its name on the signature pages hereto; and

     

    D. Contemporaneous
      with the execution and delivery of this Agreement, the parties hereto are
      executing and delivering a Registration Rights Agreement, in the form attached
      hereto as Exhibit
      “C”
      (the
“Registration
      Rights Agreement”),
      pursuant to which the Company has agreed to provide certain registration rights
      under the 1933 Act and the rules and regulations promulgated thereunder, and
      applicable state securities laws.

     

    NOW
      THEREFORE,
      the
      Company and each of the Buyers severally (and not jointly) hereby agree as
      follows:

     

    1. PURCHASE
      AND SALE OF DEBENTURES AND WARRANTS.

     

    a.     Purchase
      of Debentures and Warrants.
      On the
      Closing Date (as defined below), the Company shall issue and sell to each Buyer
      and each Buyer severally agrees to purchase from the Company such principal
      amount of Debentures and number of Warrants as is set forth immediately below
      such Buyer’s name on the signature pages hereto, for an aggregate of One Hundred
      Eighty Thousand Dollars ($180,000) principal amount of Debentures and Warrants
      to purchase an aggregate of 10,000,000 shares of Common Stock.

     

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    b.     Form
      of Payment.
      On the
      Closing Date (as defined below), (i) each Buyer shall pay the purchase price
      for
      the Debentures and the Warrants to be issued and sold to it at the Closing
      (as
      defined below) (the “Purchase
      Price”)
      by
      wire transfer of immediately available funds to the Company, in accordance
      with
      the Company’s written wiring instructions, against delivery of the Debentures in
      the principal amount equal to the Purchase Price and the number of Warrants
      as
      is set forth immediately below such Buyer’s name on the signature pages hereto,
      and (ii) the Company shall deliver such Debentures and Warrants duly executed
      on
      behalf of the Company, to such Buyer, against delivery of such Purchase Price.
      

     

    c.     Closing
      Date.
      Subject
      to the satisfaction (or written waiver) of the conditions thereto set forth
      in
      Section 6 and Section 7 below, the date and time of the issuance and sale of
      the
      Debentures and the Warrants pursuant to this Agreement (the “Closing
      Date”)
      shall
      be 12:00 noon, Eastern Standard Time on March 9, 2007 or such other mutually
      agreed upon time. The closing of the transactions contemplated by this Agreement
      (the “Closing”)
      shall
      occur on the Closing Date at such location as may be agreed to by the
      parties.

     

    2. BUYERS’
      REPRESENTATIONS AND WARRANTIES.
      Each
      Buyer severally (and not jointly) represents and warrants to the Company solely
      as to such Buyer that:

     

    a.     Investment
      Purpose.
      As of
      the date hereof, the Buyer is purchasing the Debentures and the shares of Common
      Stock issuable upon conversion of or otherwise pursuant to the Debentures
      (including, without limitation, such additional shares of Common Stock, if
      any,
      as are issuable (i) on account of interest on the Debentures, (ii) as a result
      of the events described in Sections 1.3 and 1.4(g) of the Debentures and Section
      2(c) of the Registration Rights Agreement or (iii) in payment of the Standard
      Liquidated Damages Amount (as defined in Section 2(f) below) pursuant to this
      Agreement, such shares of Common Stock being collectively referred to herein
      as
      the “Conversion
      Shares”)
      and
      the Warrants and the shares of Common Stock issuable upon exercise thereof
      (the
“Warrant
      Shares”
and,
      collectively with the Debentures, Warrants and Conversion Shares, the
“Securities”)
      for
      its own account and not with a present view towards the public sale or
      distribution thereof, except pursuant to sales registered or exempted from
      registration under the 1933 Act; provided,
      however,
      that by
      making the representations herein, the Buyer does not agree to hold any of
      the
      Securities for any minimum or other specific term and reserves the right to
      dispose of the Securities at any time in accordance with or pursuant to a
      registration statement or an exemption under the 1933 Act.

     

    b.     Accredited
      Investor Status.
      The
      Buyer is an “accredited investor” as that term is defined in Rule 501(a) of
      Regulation D (an “Accredited
      Investor”).

     

    c.     Reliance
      on Exemptions.
      The
      Buyer understands that the Securities are being offered and sold to it in
      reliance upon specific exemptions from the registration requirements of United
      States federal and state securities laws and that the Company is relying upon
      the truth and accuracy of, and the Buyer’s compliance with, the representations,
      warranties, agreements, acknowledgments and understandings of the Buyer set
      forth herein in order to determine the availability of such exemptions and
      the
      eligibility of the Buyer to acquire the Securities.

     

    

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    

    d.     Information.
      The
      Buyer and its advisors, if any, have been, and for so long as the Debentures
      and
      Warrants remain outstanding will continue to be, furnished with all materials
      relating to the business, finances and operations of the Company and materials
      relating to the offer and sale of the Securities which have been requested
      by
      the Buyer or its advisors. The Buyer and its advisors, if any, have been, and
      for so long as the Debentures and Warrants remain outstanding will continue
      to
      be, afforded the opportunity to ask questions of the Company. Notwithstanding
      the foregoing, the Company has not disclosed to the Buyer any material nonpublic
      information and will not disclose such information unless such information
      is
      disclosed to the public prior to or promptly following such disclosure to the
      Buyer. Neither such inquiries nor any other due diligence investigation
      conducted by Buyer or any of its advisors or representatives shall modify,
      amend
      or affect Buyer’s right to rely on the Company’s representations and warranties
      contained in Section 3 below. The Buyer understands that its investment in
      the
      Securities involves a significant degree of risk.

     

    e.     Governmental
      Review.
      The
      Buyer understands that no United States federal or state agency or any other
      government or governmental agency has passed upon or made any recommendation
      or
      endorsement of the Securities.

     

    f.     Transfer
      or Re-sale.
      The
      Buyer understands that (i) except as provided in the Registration Rights
      Agreement, the sale or re-sale of the Securities has not been and is not being
      registered under the 1933 Act or any applicable state securities laws, and
      the
      Securities may not be transferred unless (a) the Securities are sold pursuant
      to
      an effective registration statement under the 1933 Act, (b) the Buyer shall
      have
      delivered to the Company an opinion of counsel that shall be in form, substance
      and scope customary for opinions of counsel in comparable transactions to the
      effect that the Securities to be sold or transferred may be sold or transferred
      pursuant to an exemption from such registration, which opinion shall be accepted
      by the Company, (c) the Securities are sold or transferred to an “affiliate” (as
      defined in Rule 144 promulgated under the 1933 Act (or a successor rule)
      (“Rule
      144”))
      of
      the Buyer who agrees to sell or otherwise transfer the Securities only in
      accordance with this Section 2(f) and who is an Accredited Investor, (d) the
      Securities are sold pursuant to Rule 144, or (e) the Securities are sold
      pursuant to Regulation S under the 1933 Act (or a successor rule) (“Regulation
      S”),
      and
      the Buyer shall have delivered to the Company an opinion of counsel that shall
      be in form, substance and scope customary for opinions of counsel in corporate
      transactions, which opinion shall be accepted by the Company; (ii) any sale
      of
      such Securities made in reliance on Rule 144 may be made only in accordance
      with
      the terms of said Rule and further, if said Rule is not applicable, any re-sale
      of such Securities under circumstances in which the seller (or the person
      through whom the sale is made) may be deemed to be an underwriter (as that
      term
      is defined in the 1933 Act) may require compliance with some other exemption
      under the 1933 Act or the rules and regulations of the SEC thereunder; and
      (iii)
      neither the Company nor any other person is under any obligation to register
      such Securities under the 1933 Act or any state securities laws or to comply
      with the terms and conditions of any exemption thereunder (in each case, other
      than pursuant to the Registration Rights Agreement). Notwithstanding the
      foregoing or anything else contained herein to the contrary, the Securities
      may
      be pledged as collateral in connection with a bona fide
      margin
      account or other lending arrangement. In the event that the Company does not
      accept the opinion of counsel provided by the Buyer with respect to the transfer
      of Securities pursuant to an exemption from registration, such as Rule 144
      or
      Regulation S, within three (3) business days of delivery of the opinion to
      the
      Company, the Company shall pay to the Buyer liquidated damages of three percent
      (3%) of the outstanding amount of the Debentures per month plus accrued and
      unpaid interest on the Debentures, prorated for partial months, in cash or
      shares at the option of the Buyer (“Standard
      Liquidated Damages Amount”).
      If
      the Buyer elects to be paid the Standard Liquidated Damages Amount in shares
      of
      Common Stock, such shares shall be issued at the Conversion Price at the time
      of
      payment.

     

    

    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

     

    g.    Legends.
      The
      Buyer understands that the Debentures and the Warrants and, until such time
      as
      the Conversion Shares and Warrant Shares have been registered under the 1933
      Act
      as contemplated by the Registration Rights Agreement or otherwise may be sold
      pursuant to Rule 144 or Regulation S without any restriction as to the number
      of
      securities as of a particular date that can then be immediately sold, the
      Conversion Shares and Warrant Shares may bear a restrictive legend in
      substantially the following form (and a stop-transfer order may be placed
      against transfer of the certificates for such Securities):

     

    “The
      securities represented by this certificate have not been registered under the
      Securities Act of 1933, as amended. The securities may not be sold, transferred
      or assigned in the absence of an effective registration statement for the
      securities under said Act, or an opinion of counsel, in form, substance and
      scope customary for opinions of counsel in comparable transactions, that
      registration is not required under said Act or unless sold pursuant to Rule
      144
      or Regulation S under said Act.”

     

    The
      legend set forth above shall be removed and the Company shall issue a
      certificate without such legend to the holder of any Security upon which it
      is
      stamped, if, unless otherwise required by applicable state securities laws,
      (a)
      such Security is registered for sale under an effective registration statement
      filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or
      Regulation S without any restriction as to the number of securities as of a
      particular date that can then be immediately sold, or (b) such holder provides
      the Company with an opinion of counsel, in form, substance and scope customary
      for opinions of counsel in comparable transactions, to the effect that a public
      sale or transfer of such Security may be made without registration under the
      1933 Act, which opinion shall be accepted by the Company so that the sale or
      transfer is effected or (c) such holder provides the Company with reasonable
      assurances that such Security can be sold pursuant to Rule 144 or Regulation
      S.
      The Buyer agrees to sell all Securities, including those represented by a
      certificate(s) from which the legend has been removed, in compliance with
      applicable prospectus delivery requirements, if any.

     

    h.     Authorization;
      Enforcement.
      This
      Agreement and the Registration Rights Agreement have been duly and validly
      authorized. This Agreement has been duly executed and delivered on behalf of
      the
      Buyer, and this Agreement constitutes, and upon execution and delivery by the
      Buyer of the Registration Rights Agreement, such agreement will constitute,
      valid and binding agreements of the Buyer enforceable in accordance with their
      terms.

     

    i.     Residency.
      The
      Buyer is a resident of the jurisdiction set forth immediately below such Buyer’s
      name on the signature pages hereto. 

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    3. REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY.
      The
      Company represents and warrants to each Buyer that:

     

        a.     Organization
      and Qualification.
      The
      Company and each of its Subsidiaries (as defined below), if any, is a
      corporation duly organized, validly existing and in good standing under the
      laws
      of the jurisdiction in which it is incorporated, with full power and authority
      (corporate and other) to own, lease, use and operate its properties and to
      carry
      on its business as and where now owned, leased, used, operated and conducted,
      except as disclosed on Schedule 3(a). Schedule
      3(a)
      sets
      forth a list of all of the Subsidiaries of the Company and the jurisdiction
      in
      which each is incorporated. Except as disclosed on Schedule 3(a), the Company
      and each of its Subsidiaries is duly qualified as a foreign corporation to
      do
      business and is in good standing in every jurisdiction in which its ownership
      or
      use of property or the nature of the business conducted by it makes such
      qualification necessary except where the failure to be so qualified or in good
      standing would not have a Material Adverse Effect. “Material
      Adverse Effect”
means
      any material adverse effect on the business, operations, assets, financial
      condition or prospects of the Company or its Subsidiaries, if any, taken as
      a
      whole, or on the transactions contemplated hereby or by the agreements or
      instruments to be entered into in connection herewith. “Subsidiaries”
means
      any corporation or other organization, whether incorporated or unincorporated,
      in which the Company owns, directly or indirectly, any equity or other ownership
      interest.

     

     

                                                 b.     Authorization;
      Enforcement.
      (i) The
      Company has all requisite corporate power and authority to enter into and
      perform this Agreement, the Registration Rights Agreement, the Debentures and
      the Warrants and to consummate the transactions contemplated hereby and thereby
      and to issue the Securities, in accordance with the terms hereof and thereof,
      (ii) the execution and delivery of this Agreement, the Registration Rights
      Agreement, the Debentures and the Warrants by the Company and the consummation
      by it of the transactions contemplated hereby and thereby (including without
      limitation, the issuance of the Debentures and the Warrants and the issuance
      and
      reservation for issuance of the Conversion Shares and Warrant Shares issuable
      upon conversion or exercise thereof) have been duly authorized by the Company’s
      Board of Directors and no further consent or authorization of the Company,
      its
      Board of Directors, or its shareholders is required, (iii) this Agreement has
      been duly executed and delivered by the Company by its authorized
      representative, and such authorized representative is the true and official
      representative with authority to sign this Agreement and the other documents
      executed in connection herewith and bind the Company accordingly, and (iv)
      this
      Agreement constitutes, and upon execution and delivery by the Company of the
      Registration Rights Agreement, the Debentures and the Warrants, each of such
      instruments will constitute, a legal, valid and binding obligation of the
      Company enforceable against the Company in accordance with its
      terms.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    c.     Capitalization.
      As of
      the date hereof, the authorized capital stock of the Company consists of (i)
      20,000,000,000 shares of Common Stock, of which approximately 12,200,000,000
      shares are issued and outstanding, no shares are reserved for issuance pursuant
      to the Company’s stock option plans, subject to obtaining Stockholder Approval
      (as defined in Section 4(k)), approximately 15,000,000,000 shares are reserved
      for issuance pursuant to securities (other than the Notes and the Warrants)
      exercisable for, or convertible into or exchangeable for shares of Common Stock
      and--, subject to obtaining Stockholder Approval (as defined in Section 4(k)),
      60,000,000,000 shares are reserved for issuance upon conversion of the Notes
      and
      exercise of the Warrants (subject to adjustment pursuant to the Company’s
      covenant set forth in Section 4(h) below); and (ii) 30,000,000 shares
of
      preferred stock, of which no shares are issued and outstanding. All of such
      outstanding shares of capital stock are, or upon issuance will be, duly
      authorized, validly issued, fully paid and nonassessable. No shares of capital
      stock of the Company are subject to preemptive rights or any other similar
      rights of the shareholders of the Company or any liens or encumbrances imposed
      through the actions or failure to act of the Company. Except as disclosed in
      Schedule
      3(c),
      as of
      the effective date of this Agreement, (i) there are no outstanding options,
      warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal,
      agreements, understandings, claims or other commitments or rights of any
      character whatsoever relating to, or securities or rights convertible into
      or
      exchangeable for any shares of capital stock of the Company or any of its
      Subsidiaries, or arrangements by which the Company or any of its Subsidiaries
      is
      or may become bound to issue additional shares of capital stock of the Company
      or any of its Subsidiaries, (ii) there are no agreements or arrangements under
      which the Company or any of its Subsidiaries is obligated to register the sale
      of any of its or their securities under the 1933 Act (except the Registration
      Rights Agreement) and (iii) there are no anti-dilution or price adjustment
      provisions contained in any security issued by the Company (or in any agreement
      providing rights to security holders) that will be triggered by the issuance
      of
      the Notes, the Warrants, the Conversion Shares or Warrant Shares. The Company
      has furnished to the Buyer true and correct copies of the Company’s Articles of
      Incorporation as in effect on the date hereof (“Articles
      of Incorporation”),
      the
      Company’s By-laws, as in effect on the date hereof (the “By-laws”),
      and
      the terms of all securities convertible into or exercisable for Common Stock
      of
      the Company and the material rights of the holders thereof in respect thereto.
      The Company shall provide the Buyer with a written update of this representation
      signed by the Company’s Chief Executive or Chief Financial Officer on behalf of
      the Company as of the Closing Date.

     

    d.     Issuance
      of Shares.
      Subject
      to obtaining Stockholder Approval (as defined in Section 4(k)), the Conversion
      Shares and Warrant Shares are duly authorized and reserved for issuance and,
      upon conversion of the Debentures and exercise of the Warrants in accordance
      with their respective terms, will be validly issued, fully paid and
      non-assessable, and free from all taxes, liens, claims and encumbrances with
      respect to the issue thereof and shall not be subject to preemptive rights
      or
      other similar rights of shareholders of the Company and will not impose personal
      liability upon the holder thereof.

     

    e.     Acknowledgment
      of Dilution.
      The
      Company understands and acknowledges the potentially dilutive effect to the
      Common Stock upon the issuance of the Conversion Shares and Warrant Shares
      upon
      conversion of the Debenture or exercise of the Warrants. The Company further
      acknowledges that its obligation to issue Conversion Shares and Warrant Shares
      upon conversion of the Debentures or exercise of the Warrants in accordance
      with
      this Agreement, the Debentures and the Warrants is absolute and unconditional
      regardless of the dilutive effect that such issuance may have on the ownership
      interests of other shareholders of the Company.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    f.     No
      Conflicts.
      Subject
      to obtaining Stockholder Approval (as defined in Section 4(k)), the execution,
      delivery and performance of this Agreement, the Registration Rights Agreement,
      the Debentures, the Security Agreement and the Warrants by the Company and
      the
      consummation by the Company of the transactions contemplated hereby and thereby
      (including, without limitation, the issuance and reservation for issuance of
      the
      Conversion Shares and Warrant Shares) will not (i) conflict with or result
      in a
      violation of any provision
      of the Articles of Incorporation or By-laws or (ii) violate or conflict with,
      or
      result in a breach of any provision of, or constitute a default (or an event
      which with notice or lapse of time or both could become a default) under, or
      give to others any rights of termination, amendment, acceleration or
      cancellation of, any agreement, indenture, patent, patent license or instrument
      to which the Company or any of its Subsidiaries is a party, or (iii) result
      in a
      violation of any law, rule, regulation, order, judgment or decree (including
      federal and state securities laws and regulations and regulations of any
      self-regulatory organizations to which the Company or its securities are
      subject) applicable to the Company or any of its Subsidiaries or by which any
      property or asset of the Company or any of its Subsidiaries is bound or affected
      (except for such conflicts, defaults, terminations, amendments, accelerations,
      cancellations and violations as would not, individually or in the aggregate,
      have a Material Adverse Effect). Neither the Company nor any of its Subsidiaries
      is in violation of its Articles of Incorporation, By-laws or other
      organizational documents and neither the Company nor any of its Subsidiaries
      is
      in default (and no event has occurred which with notice or lapse of time or
      both
      could put the Company or any of its Subsidiaries in default) under, and neither
      the Company nor any of its Subsidiaries has taken any action or failed to take
      any action that would give to others any rights of termination, amendment,
      acceleration or cancellation of, any agreement, indenture or instrument to
      which
      the Company or any of its Subsidiaries is a party or by which any property
      or
      assets of the Company or any of its Subsidiaries is bound or affected, except
      for possible defaults as would not, individually or in the aggregate, have
      a
      Material Adverse Effect. The businesses of the Company and its Subsidiaries,
      if
      any, are not being conducted, and shall not be conducted so long as a Buyer
      owns
      any of the Securities, in violation of any law, ordinance or regulation of
      any
      governmental entity. Except as specifically contemplated by this Agreement
      and
      as required under the 1933 Act and any applicable state securities laws, the
      Company is not required to obtain any consent, authorization or order of, or
      make any filing or registration with, any court, governmental agency, regulatory
      agency, self regulatory organization or stock market or any third party in
      order
      for it to execute, deliver or perform any of its obligations under this
      Agreement, the Registration Rights Agreement, the Debentures or the Warrants
      in
      accordance with the terms hereof or thereof or to issue and sell the Debentures
      and Warrants in accordance with the terms hereof and to issue the Conversion
      Shares upon conversion of the Debentures and the Warrant Shares upon exercise
      of
      the Warrants. Except as disclosed in Schedule
      3(f),
      all
      consents, authorizations, orders, filings and registrations which the Company
      is
      required to obtain pursuant to the preceding sentence have been obtained or
      effected on or prior to the date hereof. The Company is not in violation of
      the
      listing requirements of the Pinksheets (the “Pinksheets”)
      and
      does not reasonably anticipate that the Common Stock will be delisted by the
      Pinksheets in the foreseeable future. The Company and its Subsidiaries are
      unaware of any facts or circumstances which might give rise to any of the
      foregoing. 

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    g.    SEC
      Documents; Financial Statements.
      Except
      as disclosed in Schedule
      3(g),
      the
      Company has timely filed all reports, schedules, forms, statements and other
      documents required to be filed by it with the SEC pursuant to the reporting
      requirements of the Securities Exchange Act of 1934, as amended (the
“1934
      Act”)
      (all
      of the foregoing filed prior to the date hereof and all exhibits included
      therein and financial statements and schedules thereto and documents (other
      than
      exhibits to such documents) incorporated by reference therein, being hereinafter
      referred to herein as the “SEC
      Documents”).
      The
      Company has delivered to each Buyer true and complete copies of the SEC
      Documents, except for such exhibits and incorporated documents. Except as
      disclosed on Schedule 3(g), as of their respective dates, the SEC
      Documents complied in all material respects with the requirements of the 1934
      Act and the rules and regulations of the SEC promulgated thereunder applicable
      to the SEC Documents, and none of the SEC Documents, at the time they were
      filed
      with the SEC, contained any untrue statement of a material fact or omitted
      to
      state a material fact required to be stated therein or necessary in order to
      make the statements therein, in light of the circumstances under which they
      were
      made, not misleading. Except as disclosed on Schedule 3(g), none of the
      statements made in any such SEC Documents is, or has been, required to be
      amended or updated under applicable law (except for such statements as have
      been
      amended or updated in subsequent filings prior the date hereof). As of their
      respective dates, the financial statements of the Company included in the SEC
      Documents complied as to form in all material respects with applicable
      accounting requirements and the published rules and regulations of the SEC
      with
      respect thereto. Such financial statements have been prepared in accordance
      with
      United States generally accepted accounting principles, consistently applied,
      during the periods involved (except (i) as may be otherwise indicated in such
      financial statements or the notes thereto, or (ii) in the case of unaudited
      interim statements, to the extent they may not include footnotes or may be
      condensed or summary statements) and fairly present in all material respects
      the
      consolidated financial position of the Company and its consolidated Subsidiaries
      as of the dates thereof and the consolidated results of their operations and
      cash flows for the periods then ended (subject, in the case of unaudited
      statements, to normal year-end audit adjustments). Except as set forth in the
      financial statements of the Company included in the SEC Documents, the Company
      has no liabilities, contingent or otherwise, other than (i) liabilities incurred
      in the ordinary course of business subsequent to December 31, 2003 and (ii)
      obligations under contracts and commitments incurred in the ordinary course
      of
      business and not required under generally accepted accounting principles to
      be
      reflected in such financial statements, which, individually or in the aggregate,
      are not material to the financial condition or operating results of the
      Company.

     

    h.    Absence
      of Certain Changes.
      Except
      as set forth on Schedule 3(h), since December 31, 2003, there has been no
      material adverse change and no material adverse development in the assets,
      liabilities, business, properties, operations, financial condition, results
      of
      operations or prospects of the Company or any of its Subsidiaries.

     

    i.     Absence
      of
      Litigation.
      There
      is no action, suit, claim, proceeding, inquiry or investigation before or by
      any
      court, public board, government agency, self-regulatory organization or body
      pending or, to the knowledge of the Company or any of its Subsidiaries,
      threatened against or affecting the Company or any of its Subsidiaries, or
      their
      officers or directors in their capacity as such, that could have a Material
      Adverse Effect. Schedule
      3(i)
      contains
      a complete list and summary description of any pending or threatened proceeding
      against or affecting the Company or any of its Subsidiaries, without regard
      to
      whether it would have a Material Adverse Effect. The Company and its
      Subsidiaries are unaware of any facts or circumstances which might give rise
      to
      any of the foregoing.

     

    j.     Patents,
      Copyrights, etc.
      The
      Company and each of its Subsidiaries owns or possesses the requisite licenses
      or
      rights to use all patents, patent applications, patent rights, inventions,
      know-how, trade secrets, trademarks, trademark applications, service marks,
      service names, trade names and copyrights (“Intellectual
      Property”)
      necessary to enable it to conduct its business as now operated (and, except
      as
      set forth in Schedule
      3(j)
      hereof,
      to the best of the Company’s knowledge, as presently contemplated
      to be operated in the future); there is no claim or action by any person
      pertaining to, or proceeding pending, or to the Company’s knowledge threatened,
      which challenges the right of the Company or of a Subsidiary with respect to
      any
      Intellectual Property necessary to enable it to conduct its business as now
      operated (and, except as set forth in Schedule
      3(j)
      hereof,
      to the best of the Company’s knowledge, as presently contemplated to be operated
      in the future); to the best of the Company’s knowledge, the Company’s or its
      Subsidiaries’ current and intended products, services and processes do not
      infringe on any Intellectual Property or other rights held by any person; and
      the Company is unaware of any facts or circumstances which might give rise
      to
      any of the foregoing. The Company and each of its Subsidiaries have taken
      reasonable security measures to protect the secrecy, confidentiality and value
      of their Intellectual Property.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    k.    No
      Materially Adverse Contracts, Etc.
      Except
      as disclosed on Schedule 3(k), neither the Company nor any of its Subsidiaries
      is subject to any charter, corporate or other legal restriction, or any
      judgment, decree, order, rule or regulation which in the judgment of the
      Company’s officers has or is expected in the future to have a Material Adverse
      Effect. Except as disclosed on Schedule 3(k), neither the Company nor any of
      its
      Subsidiaries is a party to any contract or agreement which in the judgment
      of
      the Company’s officers has or is expected to have a Material Adverse
      Effect.

     

    l.     Tax
      Status.
      Except
      as set forth on Schedule
      3(l),
      the
      Company and each of its Subsidiaries has made or filed all federal, state and
      foreign income and all other tax returns, reports and declarations required
      by
      any jurisdiction to which it is subject (unless and only to the extent that
      the
      Company and each of its Subsidiaries has set aside on its books provisions
      reasonably adequate for the payment of all unpaid and unreported taxes) and
      has
      paid all taxes and other governmental assessments and charges that are material
      in amount, shown or determined to be due on such returns, reports and
      declarations, except those being contested in good faith and has set aside
      on
      its books provisions reasonably adequate for the payment of all taxes for
      periods subsequent to the periods to which such returns, reports or declarations
      apply. There are no unpaid taxes in any material amount claimed to be due by
      the
      taxing authority of any jurisdiction, and the officers of the Company know
      of no
      basis for any such claim. The Company has not executed a waiver with respect
      to
      the statute of limitations relating to the assessment or collection of any
      foreign, federal, state or local tax. Except as set forth on Schedule
      3(l),
      none of
      the Company’s tax returns is presently being audited by any taxing
      authority.

     

    m.    Certain
      Transactions.
      Except
      as set forth on Schedule
      3(m)
      and
      except for arm’s length transactions pursuant to which the Company or any of its
      Subsidiaries makes payments in the ordinary course of business upon terms no
      less favorable than the Company or any of its Subsidiaries could obtain from
      third parties and other than the grant of stock options disclosed on
Schedule
      3(c),
      none of
      the officers, directors, or employees of the Company is presently a party to
      any
      transaction with the Company or any of its Subsidiaries (other than for services
      as employees, officers and directors), including any contract, agreement or
      other arrangement providing for the furnishing of services to or by, providing
      for rental of real or personal property to or from, or otherwise requiring
      payments to or from any officer, director or such employee or, to the knowledge
      of the Company, any corporation, partnership, trust or other entity in which
      any
      officer, director, or any such employee has a substantial interest or is an
      officer, director, trustee or partner.

     

    

    
      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

     

    n.    Disclosure.
      All
      information relating to or concerning the Company or any of its Subsidiaries
      set
      forth in this Agreement and provided to the Buyers pursuant to Section 2(d)
      hereof and otherwise in connection with the transactions contemplated hereby
      is
      true and correct in all material respects and the Company has not omitted to
      state any material fact necessary in order to make the statements made herein
      or
      therein, in light of the circumstances under which they were made, not
      misleading. No event or circumstance has occurred or exists with respect to
      the
      Company or any of its Subsidiaries or its or their business, properties,
      prospects, operations or financial conditions, which, under applicable law,
      rule
      or regulation, requires public disclosure or announcement by the Company but
      which has not been so publicly announced or disclosed (assuming for this purpose
      that the Company’s reports filed under the 1934 Act are being incorporated into
      an effective registration statement filed by the Company under the 1933
      Act).

     

    o.    Acknowledgment
      Regarding Buyers’ Purchase of Securities.
      The
      Company acknowledges and agrees that the Buyers are acting solely in the
      capacity of arm’s length purchasers with respect to this Agreement and the
      transactions contemplated hereby. The Company further acknowledges that no
      Buyer
      is acting as a financial advisor or fiduciary of the Company (or in any similar
      capacity) with respect to this Agreement and the transactions contemplated
      hereby and any statement made by any Buyer or any of their respective
      representatives or agents in connection with this Agreement and the transactions
      contemplated hereby is not advice or a recommendation and is merely incidental
      to the Buyers’ purchase of the Securities. The Company further represents to
      each Buyer that the Company’s decision to enter into this Agreement has been
      based solely on the independent evaluation of the Company and its
      representatives.

     

    p.    No
      Integrated Offering.
      Neither
      the Company, nor any of its affiliates, nor any person acting on its or their
      behalf, has directly or indirectly made any offers or sales in any security
      or
      solicited any offers to buy any security under circumstances that would require
      registration under the 1933 Act of the issuance of the Securities to the Buyers.
      The issuance of the Securities to the Buyers will not be integrated with any
      other issuance of the Company’s securities (past, current or future) for
      purposes of any shareholder approval provisions applicable to the Company or
      its
      securities.

     

    q.    No
      Brokers.
      The
      Company has taken no action which would give rise to any claim by any person
      for
      brokerage commissions, transaction fees or similar payments relating to this
      Agreement or the transactions contemplated hereby. 

     

    r.    Permits;
      Compliance.
      The
      Company and each of its Subsidiaries is in possession of all franchises, grants,
      authorizations, licenses, permits, easements, variances, exemptions, consents,
      certificates, approvals and orders necessary to own, lease and operate its
      properties and to carry on its business as it is now being conducted
      (collectively, the “Company
      Permits”),
      and
      there is no action pending or, to the knowledge of the Company, threatened
      regarding suspension or cancellation of any of the Company Permits. Neither
      the
      Company nor any of its Subsidiaries is in conflict with, or in default or
      violation of, any of the Company Permits, except for any such conflicts,
      defaults or violations which, individually or in the aggregate, would not
      reasonably be expected to have a Material Adverse Effect. Since December 31,
      2003, neither the Company nor any of its Subsidiaries has received any
      notification with respect to possible conflicts, defaults or violations of
      applicable laws, except for notices relating to possible conflicts, defaults
      or
      violations, which conflicts, defaults or violations would not have a Material
      Adverse Effect.

     

    

    
      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

    

     

    s.    Environmental
      Matters.

     

    (i) Except
      as
      set forth in Schedule
      3(s),
      there
      are, to the Company’s knowledge, with respect to the Company or any of its
      Subsidiaries or any predecessor of the Company, no past or present violations
      of
      Environmental Laws (as defined below), releases of any material into the
      environment, actions, activities, circumstances, conditions, events, incidents,
      or contractual obligations which may give rise to any common law environmental
      liability or any liability under the Comprehensive Environmental Response,
      Compensation and Liability Act of 1980 or similar federal, state, local or
      foreign laws and neither the Company nor any of its Subsidiaries has received
      any notice with respect to any of the foregoing, nor is any action pending
      or,
      to the Company’s knowledge, threatened in connection with any of the foregoing.
      The term “Environmental
      Laws”
means
      all federal, state, local or foreign laws relating to pollution or protection
      of
      human health or the environment (including, without limitation, ambient air,
      surface water, groundwater, land surface or subsurface strata), including,
      without limitation, laws relating to emissions, discharges, releases or
      threatened releases of chemicals, pollutants contaminants, or toxic or hazardous
      substances or wastes (collectively, “Hazardous
      Materials”)
      into
      the environment, or otherwise relating to the manufacture, processing,
      distribution, use, treatment, storage, disposal, transport or handling of
      Hazardous Materials, as well as all authorizations, codes, decrees, demands
      or
      demand letters, injunctions, judgments, licenses, notices or notice letters,
      orders, permits, plans or regulations issued, entered, promulgated or approved
      thereunder.

     

    (ii) Other
      than those that are or were stored, used or disposed of in compliance with
      applicable law, no Hazardous Materials are contained on or about any real
      property currently owned, leased or used by the Company or any of its
      Subsidiaries, and no Hazardous Materials were released on or about any real
      property previously owned, leased or used by the Company or any of its
      Subsidiaries during the period the property was owned, leased or used by the
      Company or any of its Subsidiaries, except in the normal course of the Company’s
      or any of its Subsidiaries’ business.

     

    (iii) Except
      as
      set forth in Schedule
      3(s),
      there
      are no underground storage tanks on or under any real property owned, leased
      or
      used by the Company or any of its Subsidiaries that are not in compliance with
      applicable law. 

     

    t.    Title
      to Property.
      The
      Company and its Subsidiaries have good and marketable title in fee simple to
      all
      real property and good and marketable title to all personal property owned
      by
      them which is material to the business of the Company and its Subsidiaries,
      in
      each case free and clear of all liens, encumbrances and defects except such
      as
      are described in Schedule
      3(t)
      or such
      as would not have a Material Adverse Effect. Any real property and facilities
      held under lease by the Company and its Subsidiaries are held by them under
      valid, subsisting and enforceable leases with such exceptions as would not
      have
      a Material Adverse Effect.

    
      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

    

     

    u.    Insurance.
      Except
      as set forth under Schedule 3(u), the Company and each of its Subsidiaries
      are
      insured by insurers of recognized financial responsibility against such losses
      and risks and in such amounts as management of the Company believes to be
      prudent and customary in the businesses in which the Company and its
      Subsidiaries are engaged. Neither the Company nor any such Subsidiary has any
      reason to believe that it will not be able to renew its existing insurance
      coverage as and when such coverage expires or to obtain similar coverage from
      similar insurers as may be necessary to continue its business at a cost that
      would not have a Material Adverse Effect. The Company has provided to Buyer
      true
      and correct copies of all policies relating to directors’ and officers’
liability coverage, errors and omissions coverage, and commercial general
      liability coverage.

     

    v.    Internal
      Accounting Controls.
      Except
      as disclosed at Schedule 3(v), the Company and each of its Subsidiaries maintain
      a system of internal accounting controls sufficient, in the judgment of the
      Company’s board of directors, to provide reasonable assurance that (i)
      transactions are executed in accordance with management’s general or specific
      authorizations, (ii) transactions are recorded as necessary to permit
      preparation of financial statements in conformity with generally accepted
      accounting principles and to maintain asset accountability, (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
      the existing assets at reasonable intervals and appropriate action is taken
      with
      respect to any differences.

     

    w.    Foreign
      Corrupt Practices.
      Neither
      the Company, nor any of its Subsidiaries, nor any director, officer, agent,
      employee or other person acting on behalf of the Company or any Subsidiary
      has,
      in the course of his actions for, or on behalf of, the Company, used any
      corporate funds for any unlawful contribution, gift, entertainment or other
      unlawful expenses relating to political activity; made any direct or indirect
      unlawful payment to any foreign or domestic government official or employee
      from
      corporate funds; violated or is in violation of any provision of the U.S.
      Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate,
      payoff, influence payment, kickback or other unlawful payment to any foreign
      or
      domestic government official or employee.

     

    x.    Solvency.
      Except
      as disclosed at Schedule 3(x), the Company (after giving effect to the
      transactions contemplated by this Agreement) is solvent (i.e.,
      its
      assets have a fair market value in excess of the amount required to pay its
      probable liabilities on its existing debts as they become absolute and matured)
      and currently the Company has no information that would lead it to reasonably
      conclude that the Company would not, after giving effect to the transaction
      contemplated by this Agreement, have the ability to, nor does it intend to
      take
      any action that would impair its ability to, pay its debts from time to time
      incurred in connection therewith as such debts mature. The Company received
      a
      qualified opinion from its auditors with respect to its most recent fiscal
      year
      end and, after giving effect to the transactions contemplated by this Agreement,
      anticipates that its new auditors will continue to provide a going concern
      qualification in respect of its current fiscal year.

     

    

    
      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

    

    

    y.    No
      Investment Company.
      The
      Company is not, and upon the issuance and sale of the Securities as contemplated
      by this Agreement will not be an “investment company” required to be registered
      under the Investment Company Act of 1940 (an “Investment
      Company”).
      The
      Company is not controlled by an Investment Company.

     

    z.    Breach
      of Representations and Warranties by the Company.
      If the
      Company breaches any of the representations or warranties set forth in this
      Section 3, and in addition to any other remedies available to the Buyers
      pursuant to this Agreement, the Company shall pay to the Buyer the Standard
      Liquidated Damages Amount in cash or in shares of Common Stock at the option
      of
      the Buyer, until such breach is cured. If the Buyers elect to be paid the
      Standard Liquidated Damages Amounts in shares of Common Stock, such shares
      shall
      be issued at the Conversion Price at the time of payment.

     

    4.    COVENANTS.

     

    a.    Best
      Efforts.
      The
      parties shall use their best efforts to satisfy timely each of the conditions
      described in Section 6 and 7 of this Agreement. 

     

    b.    Form
      D; Blue Sky Laws.
      The
      Company agrees to file a Form D with respect to the Securities as required
      under
      Regulation D and to provide a copy thereof to each Buyer promptly after such
      filing. The Company shall, on or before the Closing Date, take such action
      as
      the Company shall reasonably determine is necessary to qualify the Securities
      for sale to the Buyers at the applicable closing pursuant to this Agreement
      under applicable securities or “blue sky” laws of the states of the United
      States (or to obtain an exemption from such qualification), and shall provide
      evidence of any such action so taken to each Buyer on or prior to the Closing
      Date.

     

    c.    Press
      Release.
      The
      Company’s Common Stock is registered under Section 12(g) of the 1934 Act. The
      Company shall issue a press release describing the materials terms of the
      transaction contemplated hereby as soon as practicable following the Closing
      Date but in no event more than two (2) business days of the Closing Date, which
      press release shall be subject to prior review by the Buyers. The Company agrees
      that such press release shall not disclose the name of the Buyers unless
      expressly consented to in writing by the Buyers or unless required by applicable
      law or regulation, and then only to the extent of such requirement.

     

    d.    Use
      of Proceeds.
      The
      Company shall use the proceeds from the sale of the Debentures and the Warrants
      in the manner set forth in Schedule
      4(d)
      attached
      hereto and made a part hereof and shall not, directly or indirectly, use such
      proceeds for any loan to or investment in any other corporation, partnership,
      enterprise or other person (except in connection with its currently existing
      direct or indirect Subsidiaries).

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    e.    Future
      Offerings.
      Subject
      to the exceptions described below, the Company will not, without the prior
      written consent of a majority-in-interest of the Buyers, not to be unreasonably
      withheld, negotiate or contract with any party to obtain additional equity
      financing (including debt financing with an equity component) that involves
      (A)
      the issuance of Common Stock at a discount to the market price of the Common
      Stock on the date of issuance (taking
      into account the value of any warrants or options to acquire Common Stock issued
      in connection therewith) or (B) the issuance of convertible securities that
      are
      convertible into an indeterminate number of shares of Common Stock or (C) the
      issuance of warrants during the period (the “Lock-up
      Period”)
      beginning on the Closing Date and ending on the later of (i) two hundred seventy
      (270) days from the Closing Date and (ii) one hundred eighty (180) days from
      the
      date the Registration Statement (as defined in the Registration Rights
      Agreement) is declared effective (plus any days in which sales cannot be made
      thereunder). In addition, subject to the exceptions described below, the Company
      will not conduct any equity financing (including debt with an equity component)
      (“Future
      Offerings”)
      during
      the period beginning on the Closing Date and ending two (2) years after the
      end
      of the Lock-up Period unless it shall have first delivered to each Buyer, at
      least twenty (20) business days prior to the closing of such Future Offering,
      written notice describing the proposed Future Offering, including the terms
      and
      conditions thereof and proposed definitive documentation to be entered into
      in
      connection therewith, and providing each Buyer an option during the fifteen
      (15)
      day period following delivery of such notice to purchase its pro rata share
      (based on the ratio that the aggregate principal amount of Debentures purchased
      by it hereunder bears to the aggregate principal amount of Debentures purchased
      hereunder) of the securities being offered in the Future Offering on the same
      terms as contemplated by such Future Offering (the limitations referred to
      in
      this sentence and the preceding sentence are collectively referred to as the
      “Capital
      Raising Limitations”). 
      In the
      event the terms and conditions of a proposed Future Offering are amended in
      any
      respect after delivery of the notice to the Buyers concerning the proposed
      Future Offering, the Company shall deliver a new notice to each Buyer describing
      the amended terms and conditions of the proposed Future Offering and each Buyer
      thereafter shall have an option during the fifteen (15) day period following
      delivery of such new notice to purchase its pro rata share of the securities
      being offered on the same terms as contemplated by such proposed Future
      Offering, as amended. The foregoing sentence shall apply to successive
      amendments to the terms and conditions of any proposed Future Offering. The
      Capital Raising Limitations shall not apply to any transaction involving (i)
      issuances of securities in a firm commitment underwritten public offering
      (excluding a continuous offering pursuant to Rule 415 under the 1933 Act) or
      (ii) issuances of securities as consideration for a merger, consolidation or
      purchase of assets, or in connection with any strategic partnership or joint
      venture (the primary purpose of which is not to raise equity capital), or in
      connection with the disposition or acquisition of a business, product or license
      by the Company. The Capital Raising Limitations also shall not apply to the
      issuance of securities upon exercise or conversion of the Company’s options,
      warrants or other convertible securities outstanding as of the date hereof
      or to
      the grant of additional options or warrants, or the issuance of additional
      securities, under any Company stock option or restricted stock plan approved
      by
      the shareholders of the Company. 

     

    f.    Expenses.
      At the
      Closing, the Company shall reimburse Buyers for expenses incurred by them in
      connection with the negotiation, preparation, execution, delivery and
      performance of this Agreement and the other agreements to be executed in
      connection herewith (“Documents”), including, without limitation, attorneys’ and
      consultants’ fees and expenses, transfer agent fees, fees for stock quotation
      services, fees relating to any amendments or modifications of the Documents
      or
      any consents or waivers of provisions in the Documents, fees for the preparation
      of opinions of counsel, escrow fees, and costs of restructuring the transactions
      contemplated by the Documents. When possible, the Company must pay these fees
      directly, otherwise the Company must make immediate payment for reimbursement
      to
      the Buyers for all fees and expenses immediately upon written notice by the
      Buyer or the submission of an invoice by the Buyer If the Company fails to
      reimburse the Buyer in full within three (3) business days of the written notice
      or submission of invoice by the Buyer, the Company shall pay interest on the
      total amount of fees to be reimbursed at a rate of 15% per annum.

     

    

    
      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

    

     

    g.    Financial
      Information.
      The
      Company agrees to send the following reports to each Buyer until such Buyer
      transfers, assigns, or sells all of the Securities: (i) within ten (10) days
      after the filing with the SEC, a copy of its Annual Report on Form 10-K, its
      Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within
      one (1) day after release, copies of all press releases issued by the Company
      or
      any of its Subsidiaries; and (iii) contemporaneously with the making available
      or giving to the shareholders of the Company, copies of any notices or other
      information the Company makes available or gives to such
      shareholders.

     

    h.    Authorization
      and Reservation of Shares.
      Subject
      to obtaining Stockholder Approval the Company shall at all times have
      authorized, and reserved for the purpose of issuance, a sufficient number of
      shares of Common Stock to provide for the full conversion or exercise of the
      outstanding Debentures and Warrants and issuance of the Conversion Shares and
      Warrant Shares in connection therewith (based on the Conversion Price of the
      Debentures or Exercise Price of the Warrants in effect from time to time) and
      as
      otherwise required by the Debentures. The Company shall not reduce the number
      of
      shares of Common Stock reserved for issuance upon conversion of Debentures
      and
      exercise of the Warrants without the consent of each Buyer. The Company shall
      at
      all times maintain the number of shares of Common Stock so reserved for issuance
      at an amount (“Reserved
      Amount”)
      equal
      to no less than two (2) times the number that is then actually issuable upon
      full conversion of the Debentures and Additional Debentures and upon exercise
      of
      the Warrants and the Additional Warrants (based on the Conversion Price of
      the
      Debentures or the Exercise Price of the Warrants in effect from time to time).
      If at any time the number of shares of Common Stock authorized and reserved
      for
      issuance (“Authorized
      and Reserved Shares”)
      is
      below the Reserved Amount, the Company will promptly take all corporate action
      necessary to authorize and reserve a sufficient number of shares, including,
      without limitation, calling a special meeting of shareholders to authorize
      additional shares to meet the Company’s obligations under this Section 4(h), in
      the case of an insufficient number of authorized shares, obtain shareholder
      approval of an increase in such authorized number of shares, and voting the
      management shares of the Company in favor of an increase in the authorized
      shares of the Company to ensure that the number of authorized shares is
      sufficient to meet the Reserved Amount. If the Company fails to obtain such
      shareholder approval within thirty (30) days following the date on which the
      number of Authorized and Reserved Shares exceeds the Reserved Amount, the
      Company shall pay to the Borrower the Standard Liquidated Damages Amount, in
      cash or in shares of Common Stock at the option of the Buyer. If the Buyer
      elects to be paid the Standard Liquidated Damages Amount in shares of Common
      Stock, such shares shall be issued at the Conversion Price at the time of
      payment. In order to ensure that the Company has authorized a sufficient amount
      of shares to meet the Reserved Amount at all times, the Company must deliver
      to
      the Buyer at the end of every month a list detailing (1) the current amount
      of
      shares authorized by the Company and reserved for the Buyer; and (2) amount
      of
      shares issuable upon conversion of the Debentures and upon exercise of the
      Warrants and as payment of interest accrued on the Debentures for one year.
      If
      the Company fails to provide such list within five (5) business days of the
      end
      of each month, the Company shall pay the Standard Liquidated Damages Amount,
      in
      cash or in shares of Common Stock at the option of the Buyer, until the list
      is
      delivered. If the Buyer elects to be paid the Standard Liquidated Damages Amount
      in shares of Common Stock, such shares shall be issued at the Conversion Price
      at the time of payment.

     

    

    
      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

    

     

    i.    Listing.
      The
      Company will use its best efforts to promptly secure the listing of the
      Conversion Shares and Warrant Shares upon each national securities exchange
      or
      automated quotation system, if any, upon which shares of Common Stock are then
      listed (subject to official notice of issuance) and, so long as any Buyer owns
      any of the Securities, shall maintain, so long as any other shares of Common
      Stock shall be so listed, such listing of all Conversion Shares and Warrant
      Shares from time to time issuable upon conversion of the Debentures or exercise
      of the Warrants. The Company will use its best efforts to obtain and, so long
      as
      any Buyer owns any of the Securities, maintain the listing and trading of its
      Common Stock on the Over-the-Counter Bulletin Board or any equivalent
      replacement exchange, the Nasdaq National Market (“Nasdaq”),
      the
      Nasdaq SmallCap Market (“Nasdaq
      SmallCap”),
      the
      New York Stock Exchange (“NYSE”),
      the
      American Stock Exchange (“AMEX”)
      and the
      Pinksheet and will comply in all respects with the Company’s reporting, filing
      and other obligations under the bylaws or rules of the National Association
      of
      Securities Dealers (“NASD”)
      and
      such exchanges, as applicable. The Company shall promptly provide to each Buyer
      copies of any notices it receives from the Pinksheets and any other exchanges
      or
      quotation systems on which the Common Stock is then listed regarding the
      continued eligibility of the Common Stock for listing on such exchanges and
      quotation systems.

     

    j.    Corporate
      Existence.
      So long
      as a Buyer beneficially owns any Debentures or Warrants, the Company shall
      maintain its corporate existence and shall not sell all or substantially all
      of
      the Company’s assets, except in the event of a merger or consolidation or sale
      of all or substantially all of the Company’s assets, where the surviving or
      successor entity in such transaction (i) assumes the Company’s obligations
      hereunder and under the agreements and instruments entered into in connection
      herewith and (ii) is a publicly traded corporation whose Common Stock is listed
      for trading on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE, AMEX or the
      Pinksheets.

     

    k.    Naming
      of New Chief Executive Officer.
      The
      Company shall publicly announce, within 3 business days of the Company becoming
      current with its 34 Act Reports, the name of the new Chief Executive Officer
      of
      the Company.

     

    l.    No
      Integration.
      The
      Company shall not make any offers or sales of any security (other than the
      Securities) under circumstances that would require registration of the
      Securities being offered or sold hereunder under the 1933 Act or cause the
      offering of the Securities to be integrated with any other offering of
      securities by the Company for the purpose of any stockholder approval provision
      applicable to the Company or its securities.

     

    m.    Breach
      of Covenants.
      If the
      Company breaches any of the covenants set forth in this Section 4, and in
      addition to any other remedies available to the Buyers pursuant to this
      Agreement, the Company shall pay to the Buyers the Standard Liquidated Damages
      Amount, in cash or in shares of Common Stock at the option of the Buyer, until
      such breach is cured. If the Buyers elect to be paid the Standard Liquidated
      Damages Amount in shares, such shares shall be issued at the Conversion Price
      at
      the time of payment.

     

    
      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

    

     

    5.    TRANSFER
      AGENT INSTRUCTIONS.
      The
      Company shall issue irrevocable instructions to its transfer agent to issue
      certificates, registered in the name of each Buyer or its nominee, for the
      Conversion Shares and Warrant Shares in such amounts as specified from time
      to
      time by each Buyer to the Company upon conversion of the Debentures or exercise
      of the Warrants in accordance with the terms thereof (the “Irrevocable
      Transfer Agent Instructions”).
      Prior
      to registration of the Conversion Shares and Warrant Shares under the 1933
      Act
      or the date on which the Conversion Shares and Warrant Shares may be sold
      pursuant to Rule 144 without any restriction as to the number of Securities
      as
      of a particular date that can then be immediately sold, all such certificates
      shall bear the restrictive legend specified in Section 2(g) of this Agreement.
      The Company warrants that no instruction other than the Irrevocable Transfer
      Agent Instructions referred to in this Section 5, and stop transfer instructions
      to give effect to Section 2(f) hereof (in the case of the Conversion Shares
      and
      Warrant Shares, prior to registration of the Conversion Shares and Warrant
      Shares under the 1933 Act or the date on which the Conversion Shares and Warrant
      Shares may be sold pursuant to Rule 144 without any restriction as to the number
      of Securities as of a particular date that can then be immediately sold), will
      be given by the Company to its transfer agent and that the Securities shall
      otherwise be freely transferable on the books and records of the Company as
      and
      to the extent provided in this Agreement and the Registration Rights Agreement.
      Nothing in this Section shall affect in any way the Buyer’s obligations and
      agreement set forth in Section 2(g) hereof to comply with all applicable
      prospectus delivery requirements, if any, upon re-sale of the Securities. If
      a
      Buyer provides the Company with (i) an opinion of counsel in form, substance
      and
      scope customary for opinions in comparable transactions, to the effect that
      a
      public sale or transfer of such Securities may be made without registration
      under the 1933 Act and such sale or transfer is effected or (ii) the Buyer
      provides reasonable assurances that the Securities can be sold pursuant to
      Rule
      144, the Company shall permit the transfer, and, in the case of the Conversion
      Shares and Warrant Shares, promptly instruct its transfer agent to issue one
      or
      more certificates, free from restrictive legend, in such name and in such
      denominations as specified by such Buyer. The Company acknowledges that a breach
      by it of its obligations hereunder will cause irreparable harm to the Buyers,
      by
      vitiating the intent and purpose of the transactions contemplated hereby.
      Accordingly, the Company acknowledges that the remedy at law for a breach of
      its
      obligations under this Section 5 may be inadequate and agrees, in the event
      of a
      breach or threatened breach by the Company of the provisions of this Section,
      that the Buyers shall be entitled, in addition to all other available remedies,
      to an injunction restraining any breach and requiring immediate transfer,
      without the necessity of showing economic loss and without any bond or other
      security being required.

     

     

     

    

    
      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

    

     

                6.   CONDITIONS
      TO THE COMPANY’S OBLIGATION TO SELL.
      The
      obligation of the Company hereunder to issue and sell the Debentures and
      Warrants to a Buyer at the Closing is subject to the satisfaction, at or before
      the Closing Date of each of the following conditions thereto, provided that
      these conditions are for the Company’s sole benefit and may be waived by the
      Company at any time in its sole discretion:

     

                    a.     The
      applicable Buyer shall have executed this Agreement and the Registration Rights
      Agreement, and delivered the same to the Company.

     

    b.     The
      applicable Buyer shall have delivered the Purchase Price in accordance with
      Section 1(b) above.

     

    c.     The
      representations and warranties of the applicable Buyer shall be true and correct
      in all material respects as of the date when made and as of the Closing Date
      as
      though made at that time (except for representations and warranties that speak
      as of a specific date), and the applicable Buyer shall have performed, satisfied
      and complied in all material respects with the covenants, agreements and
      conditions required by this Agreement to be performed, satisfied or complied
      with by the applicable Buyer at or prior to the Closing Date. 

     

    d.     No
      litigation, statute, rule, regulation, executive order, decree, ruling or
      injunction shall have been enacted, entered, promulgated or endorsed by or
      in
      any court or governmental authority of competent jurisdiction or any
      self-regulatory organization having authority over the matters contemplated
      hereby which prohibits the consummation of any of the transactions contemplated
      by this Agreement.

     

    7.    CONDITIONS
      TO EACH BUYER’S OBLIGATION TO PURCHASE.
      The
      obligation of each Buyer hereunder to purchase the Debentures and Warrants
      at
      the Closing is subject to the satisfaction, at or before the Closing Date of
      each of the following conditions, provided that these conditions are for such
      Buyer’s sole benefit and may be waived by such Buyer at any time in its sole
      discretion:

     

    a.     The
      Company shall have executed this Agreement and the Registration Rights
      Agreement, and delivered the same to the Buyer.

     

    b.     The
      Company
      shall have delivered to such Buyer duly executed Debentures (in such
      denominations as the Buyer shall request) and Warrants in accordance with
      Section 1(b) above.

     

    c.     The
      Irrevocable Transfer Agent Instructions, in form and substance satisfactory
      to a
      majority-in-interest of the Buyers, shall have been delivered to and
      acknowledged in writing by the Company’s Transfer Agent.

     

    d.     The
      representations and warranties of the Company shall be true and correct in
      all
      material respects as of the date when made and as of the Closing Date as though
      made at such time (except for representations and warranties that speak as
      of a
      specific date) and the Company shall have performed, satisfied and complied
      in
      all material respects with the covenants, agreements and conditions required
      by
      this Agreement to be performed, satisfied or complied with by the Company at
      or
      prior to the Closing Date. The Buyer shall have received a certificate or
      certificates, executed by the chief executive officer of the Company, dated
      as
      of the Closing Date, to the foregoing effect and as to such other matters as
      may
      be reasonably requested by such Buyer including, but not limited to certificates
      with respect to the Company’s Articles of Incorporation, By-laws and Board of
      Directors’ resolutions relating to the transactions contemplated
      hereby.

     

    

    
      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

    

    

    e.     No
      litigation, statute, rule, regulation, executive order, decree, ruling or
      injunction shall have been enacted, entered, promulgated or endorsed by or
      in
      any court or governmental authority of competent jurisdiction or any
      self-regulatory organization having authority over the matters contemplated
      hereby which prohibits the consummation of any of the transactions contemplated
      by this Agreement.

     

    f.     No
      event
      shall have occurred which could reasonably be expected to have a Material
      Adverse Effect on the Company.

     

    g.     The
      Conversion Shares and Warrant Shares shall have been authorized for quotation
      on
      the Pinksheets and trading in the Common Stock on the Pinksheets shall not
      have
      been suspended by the SEC or the Pinksheets.

     

    h.     The
      Buyer
      shall have received an opinion of the Company’s counsel, dated as of the Closing
      Date, in form, scope and substance reasonably satisfactory to the Buyer and
      in
      substantially the same form as Exhibit
      “D”
      attached
      hereto.

     

    i.     The
      Buyer
      shall have received an officer’s certificate described in Section 3(c) above,
      dated as of the Closing Date.

     

    8.     GOVERNING
      LAW; MISCELLANEOUS.
      

     

    a.     Governing
      Law.
      THIS
      AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
      LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
      ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF
      LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE
      UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT TO
      ANY
      DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION
      HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES
      IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
      SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS
      UPON
      A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
      SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN
      SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
      BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH
      SUIT
      OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS
      BY
      SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT
      PREVAIL IN ANY DISPUTE ARISING UNDER THIS AGREEMENT SHALL BE RESPONSIBLE FOR
      ALL
      FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY
      IN CONNECTION WITH SUCH DISPUTE.

     

    b.     Counterparts;
      Signatures by Facsimile.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original but all of which shall constitute one and the same agreement
      and shall become effective when counterparts have been signed by each party
      and
      delivered to the other party. This Agreement, once executed by a party, may
      be
      delivered to the other party hereto by facsimile transmission of a copy of
      this
      Agreement bearing the signature of the party so delivering this
      Agreement.

     

    
      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

    

     

    c.    Headings.
      The
      headings of this Agreement are for convenience of reference only and shall
      not
      form part of, or affect the interpretation of, this Agreement. 

     

    d.    Severability.
      In the
      event that any provision of this Agreement is invalid or unenforceable under
      any
      applicable statute or rule of law, then such provision shall be deemed
      inoperative to the extent that it may conflict therewith and shall be deemed
      modified to conform with such statute or rule of law. Any provision hereof
      which
      may prove invalid or unenforceable under any law shall not affect the validity
      or enforceability of any other provision hereof.

     

    e.    Entire
      Agreement; Amendments.
      This
      Agreement and the instruments referenced herein contain the entire understanding
      of the parties with respect to the matters covered herein and therein and,
      except as specifically set forth herein or therein, neither the Company nor
      the
      Buyer makes any representation, warranty, covenant or undertaking with respect
      to such matters. No provision of this Agreement may be waived or amended other
      than by an instrument in writing signed by the party to be charged with
      enforcement. 

     

    f.    Notices.
      Any
      notices required or permitted to be given under the terms of this Agreement
      shall be sent by certified or registered mail (return receipt requested) or
      delivered personally or by courier (including a recognized overnight delivery
      service) or by facsimile and shall be effective five days after being placed
      in
      the mail, if mailed by regular United States mail, or upon receipt, if delivered
      personally or by courier (including a recognized overnight delivery service)
      or
      by facsimile, in each case addressed to a party. The addresses for such
      communications shall be:

     

    If
      to the
      Company:

    

    Globalnet
      Corporation

    2616
      South Loop West, Suite 670

    Houston,
      Texas 77054

    Telephone:
      (832) 778-9591

    Facsimile:
      (713) 583-9509

    Attention:
      President and Chief Executive Officer

     

    

     

    With
      a
      copy to:

    

    Sichenzia
      Ross Friedman Ference LLP

    1065
      Avenue of the Americas

    New
      York,
      NY 10018

    
      Attention:
        Gregory Sichenzia, Esq.

      Telephone:
        (212) 930-9700

      Facsimile:
        (212) 930-9725

    

    

    
      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

    

    

    If
      to a
      Buyer: To the address set forth immediately below such Buyer’s name on the
      signature pages hereto.

     

    With
      a
      copy to:

    

    Ballard
      Spahr Andrews & Ingersoll, LLP

    1735
      Market Street

    51st
      Floor

    Philadelphia,
      Pennsylvania 19103

    Attention:
      Gerald J. Guarcini, Esq.

    Telephone:
      (215) 864-8625

    Facsimile:
      (215) 864-8999

    Email:
      guarcini@ballardspahr.com

     

    Each
      party shall provide notice to the other party of any change in
      address.

     

    g.    Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and assigns. Neither the Company nor any Buyer shall assign
      this Agreement or any rights or obligations hereunder without the prior written
      consent of the other. Notwithstanding the foregoing, subject to
      Section 2(f), any Buyer may assign its rights hereunder to any person that
      purchases Securities in a private transaction from a Buyer or to any of its
      “affiliates,” as that term is defined under the 1934 Act, without the consent of
      the Company.

     

    h.    Third
      Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      permitted successors and assigns, and is not for the benefit of, nor may any
      provision hereof be enforced by, any other person.

     

    i.    Survival.
      The
      representations and warranties of the Company and the agreements and covenants
      set forth in Sections 3, 4, 5 and 8 shall survive the closing hereunder
      notwithstanding any due diligence investigation conducted by or on behalf of
      the
      Buyers. The Company agrees to indemnify and hold harmless each of the Buyers
      and
      all their officers, directors, employees and agents for loss or damage arising
      as a result of or related to any breach or alleged breach by the Company of
      any
      of its representations, warranties and covenants set forth in Sections 3 and
      4
      hereof or any of its covenants and obligations under this Agreement or the
      Registration Rights Agreement, including advancement of expenses as they are
      incurred.

     

    j.    Publicity.
      The
      Company and each of the Buyers shall have the right to review a reasonable
      period of time before issuance of any press releases, SEC, Pinksheet or NASD
      filings, or any other public statements with respect to the transactions
      contemplated hereby; provided,
      however,
      that
      the Company shall be entitled, without the prior approval of each of the Buyers,
      to make any press release or SEC, Pinksheet (or other applicable trading market)
      or NASD filings with respect to such transactions as is required by applicable
      law and regulations (although each of the Buyers shall be consulted by the
      Company in connection with any such press release prior to its release and
      shall
      be provided with a copy thereof and be given an opportunity to comment
      thereon).

     

    
      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

    

     

    k.    Further
      Assurances.
      Each
      party shall do and perform, or cause to be done and performed, all such further
      acts and things, and shall execute and deliver all such other agreements,
      certificates, instruments and documents, as the other party may reasonably
      request in order to carry out the intent and accomplish the purposes of this
      Agreement and the consummation of the transactions contemplated
      hereby.

     

    l.    No
      Strict Construction.
      The
      language used in this Agreement will be deemed to be the language chosen by
      the
      parties to express their mutual intent, and no rules of strict construction
      will
      be applied against any party.

     

    m.    Remedies.
      The
      Company acknowledges that a breach by it of its obligations hereunder will
      cause
      irreparable harm to the Buyers by vitiating the intent and purpose of the
      transaction contemplated hereby. Accordingly, the Company acknowledges that
      the
      remedy at law for a breach of its obligations under this Agreement will be
      inadequate and agrees, in the event of a breach or threatened breach by the
      Company of the provisions of this Agreement, that the Buyers shall be entitled,
      in addition to all other available remedies at law or in equity, and in addition
      to the penalties assessable herein, to an injunction or injunctions restraining,
      preventing or curing any breach of this Agreement and to enforce specifically
      the terms and provisions hereof, without the necessity of showing economic
      loss
      and without any bond or other security being required.

     

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    

    
      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

    

    

    IN
      WITNESS WHEREOF,
      the
      undersigned Buyers and the Company have caused this Agreement to be duly
      executed as of the date first above written.

     

     

    
      	 GLOBALNET
              CORPORATION	 
	 	 
	 

              
Mark
              Schaftlein	 
	 Chief Executive Officer	 

    

     

    
      	 AJW OFFSHORE,
              LTD.	 
	 	 
	 

              
Corey
              S. Ribotsky 	 
	 Chief Executive Officer	 

    

    

RESIDENCE:    Cayman
      Islands

    

    ADDRESS:     P.O.
      Box
      32021 SMB

                       
           Grand
      Cayman, Cayman Island, B.W.I. 

    

    AGGREGATE
      SUBSCRIPTION AMOUNT:

     

    
      	 Aggregate Principal Amount of
              Debentures:     	 $180,000
	 Number of Warrants: 	 10,000,000
	 Aggregate Purchase Price:	 $180,000

    

     

            

          

    23

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00119-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00119-of-00352.parquet"}]]