SEC Company Response from INTERNATIONAL SHIPPING ENTERPRISES, INC. (CIK 0001305220) — May 27, 2005
INTERNATIONAL SHIPPING ENTERPRISES, INC. (CIK 0001305220)
Date: May 27, 2005 · CIK: 0001305220 · Accession: 0001193125-05-116816
AI Filing Summary & Sentiment
File numbers found in text: 333-124170
Referenced dates: May 19, 2005
Letter
VIA EDGAR AND FEDERAL EXPRESS Division of Corporation Finance Securities and Exchange Commission Re: International Shipping Enterprises, Inc. Form S-4 Filed April 19, 2005 File No. 333-124170
Dear Mr. Reynolds:
On behalf of International Shipping Enterprises, Inc. (the “Company”), we respond as follows to the Staff’s legal comments dated May 19, 2005 relating to the above-captioned Registration Statement. Captions and page references herein correspond to those set forth in Amendment No. 1 to the Registration Statement, the enclosed copy of which has been marked with the changes from the initial filing. Please note that for the Staff’s convenience, we have recited each of the Staff’s comments and provided our response to each comment immediately thereafter.
General
1. Pursuant to Item 301 of Regulation S-K, in a table designed to facilitate comparison, please present historical and pro forma per share data of ISE and historic and equivalent pro forma per share date of Navios for the following Items:
(i) book value per share as of the date for which financial data is presented;
(ii) cash dividends declared per share for the periods which financial data is presented; and
MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
John Reynolds, Assistant Director
Securities and Exchange Commission
May 27, 2005
Page
(iii) income (loss) per share born continuing operations for the periods for which financial data is presented.
We have revised the text in accordance with the Staff’s request. Please see page 7.
2. Please provide the disclosure required by Rule 14a-5(e) as required by Item l(c) of Schedule 14A. See Item 18(a)(1) of Form S-4.
We have revised the text in accordance with the Staff’s request. Please see page 130.
Cover Page
3. Please include a prospectus cover page in accordance with Item 501 of Regulation S-K. See also Items 1 and 2 of Form S-4.
We have revised the text in accordance with the Staff’s request. Please see added cover page.
4. Please provide the name, complete mailing address and phone number of the principal executive offices of the company being acquired, in addition to the registrant. See Item 3(a) of Form S-4.
We have revised the text in accordance with the Staff’s request. Please see page 1.
5. Please elaborate on and/or define the following: core fleet; long term charters; in the money; and time chartered vessels.
We have revised the text in accordance with the Staff’s request. Please see page 1.
6. Clarify under “The Acquisition” that ISE plans to finance the $607.5 million acquisition though funds raised in its IPO of $180 million plus a credit facility of up to $520 million.
MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
John Reynolds, Assistant Director
Securities and Exchange Commission
May 27, 2005
Page
We have revised the text in accordance with the Staff’s request. Please see page 1.
7. Under “Stock Ownership,” please provide a brief statement comparing percentage of outstanding shares entitled to vote that the officers, directors, and affiliates of Navios hold. Please see Item 3(h) of Form S-4.
We have revised the text in accordance with the Staff’s request. Please see page 4.
8. Please include a brief statement about the tax consequences of the transaction, or if appropriate, a cross-reference to the information provided pursuant to Item 4 of Form 5-4. See Item 3(k) of Form S-4.
We have revised the text in accordance with the Staff’s request. Please see page 4.
Selected Historical Financial Information
General
9. Considering the significance of the merger transaction, please present selected unaudited pro forma condensed combined financial information showing the pro forma effect of the merger transaction.
We have revised the text in accordance with the Staff’s request. Please see page 7.
Navios Historical Financial Information, Page 7
10. Pursuant to Item 301 of Regulation S-K, please revise your table to present data for each of the last five fiscal years (or for the life of the registrant and its predecessors, if less).
We have revised the text in accordance with the Staff’s request. Please see page 7.
MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
John Reynolds, Assistant Director
Securities and Exchange Commission
May 27, 2005
Page
11. Pursuant to Item 301 of Regulation S-K, please revise to include separate line items for cash paid for dividends declared and mandatorily redeemable preferred stock.
We have revised the text in accordance with the Staff’s request. Please see page 7.
Risk Factors, Page
12. To the extent possible, please avoid the generic conclusions you reach in several of your risk factors that the risk discussed could have a “material adverse effect,” “material adverse impact,” or “adversely affect” your financial condition, results of operations or other similar matters. Instead, replace this language with more specific disclosure of how your financial condition would be affected and place the risk in context by making the magnitude of the risk clew- For instance, in risk factors 1-5,8, 10, 15, 17, 18, 22, 26-28, 35 and 36 please describe specifically the impact that the risks mentioned might have on your business.
We have revised the text in accordance with the Staff’s request. Please see pages 10 - 20.
13. We note the disclosure in risk factor 6 that maritime claimants could arrest your vessels if they have a lien against your vessel for unsatisfied debts, claims or damages against the vessel. ‘Please disclose whether there are any current liens against any vessels.
We have revised the text in accordance with the Staff’s request. Please see page 12.
14. The subheadings of several of your risk factors merely state facts or uncertainties and do not adequately reflect the risks that follow. Please revise your subheadings to succinctly state the risks you discuss in the text. For example, please refer to risk factors 7, 10, 12, 19, 20, 21, 22, 24 and 25.
We have revised the text in accordance with the Staff’s request. Please see pages 12 and 14 - 18.
MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
John Reynolds, Assistant Director
Securities and Exchange Commission
May 27, 2005
Page
15. Risk factors 9, 12 and 27 are generic risk factors that apply to all businesses and should be removed.
We have reviewed the Staff’s comment and amended the registration statement to remove these risk factors.
16. Risk factors 14-16 are generic, vague and merely repeat the accompanying subheading. Please revise to more adequately address the specific risks imposed on the company, Navios, and investors in this offering.
We have revised the text in accordance with the Staff’s request. Please see page 14. We have combined risk factor 16 with risk factor 15 as the impact on ISE’s earnings is covered by the risk of a negative impact on ISE’s operating results as disclosed in risk factor 15.
17. Risk factor 17 presents several risks associated with your business. Each risk factor should discuss only one risk. Please revise.
We have separated the risk factors in accordance with the Staff’s request. Please see pages 15 and 16.
18. Risk factor 18 appears to repeat much of the disclosure set forth in risk factor 8. Please consider consolidating these risk factors or advise. In addition, we note in risk factor 18 disclosure that Navios could be liable for environmental damage caused by previous property owners. Please elaborate on this liability and identify the previous property owners to which you refer.
We have reviewed the risk factors identified and have combined them and, upon further review of the facts, the potential liability associated with environmental damages caused by previous property owners is not a material risk and, accordingly, the risk has been removed. Please see pages 13 and 16.
19. In risk factor 19 and in the description of business experience on page 108, please disclose the percentage of time and number of hours per week that your officers and directors will contribute to company business after the acquisition.
MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
John Reynolds, Assistant Director
Securities and Exchange Commission
May 27, 2005
Page
We have revised the text in accordance with the Staff’s request. Please see page 16.
20. Consider combining risk factors 30 and 31, as both relate to insurance.
We have removed risk factor 30 as it appears largely duplicative of risk factor 31.
21. Please include an additional risk factor discussing enforceability of civil liabilities against foreign persons as set forth in Item 101(g) of Regulation S-K.
We have revised the text in accordance with the Staff’s request. Please see page 20.
22. Risk factor 39 states that BE “is” incorporated under the laws of the Marshall Islands. Please revise or advise.
We have revised the text in accordance with the Staff’s request. Please see page 20.
The Acquisition Proposal, Page 27
Background of the Merger
23. Please expand on this discussion to describe any past, present or proposed material contracts, arrangements, understandings, relationships, negotiations or transactions during the periods for which financial statements are presented or incorporated by reference pursuant to Part I, B and C of Form S-4 between Navios or its affiliates and the company or its affiliates. In this context, provide a narrative chronology of the entire process through which Navios and the company agreed to the proposed business combination transaction. This chronology would include, among other matters, the determination by Navios to consider a business combination transaction, Navios’s decision to enter into an auction process, the selection by Navios of Lazard to conduct the auction, Lazard’s carrying out of the auction process, and the entirety of the contacts by and between the company and Navios (or their respective representatives) from the initial contacts between the company and Navios up to and including the execution of the
MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
John Reynolds, Assistant Director
Securities and Exchange Commission
May 27, 2005
Page
agreements by and between Navios and the company with respect to the combination transaction. This chronology should include the dates of all such contacts, communications, documents, or activities, the parties who participated, and a discussion of the substance of all such contacts, communications, documents, or activities. In addition, to the extent that the company feels it would benefit the staff in its review of the transaction and its background, supplementally provide the staff with copies of all written and oral documentation regarding the same, including, but not limited to, all documents, agreements (including exclusivity and confidentiality agreements) arrangements, correspondence, memoranda, emails and all other similar writings, as well as any and all writings memorializing, discussing, describing or evidencing all oral correspondence, discussions agreements. The persons or entities for which this information is requested would include, but not be limited to, the following: the company and its affiliates, Navios and its affiliates, all underwriters, including Lazard, Sunrise, HSH Gudme and Investment & Finance Ltd.; all auditors; all accountants; all lenders; all financial advisors and consultants; all legal advisors and consultants; and all committees or special committees to the boards of both Navios and the company. See Items 4 and 6 of Form S-4 and Rule 418 of Regulation C.
We have revised the text in accordance with the Staff’s request. Please see pages 27-29.
In the summer of 2004, Navios’s management and Board of Directors had preliminary discussions regarding the overall growth strategy for Navios. The outcome of the discussions was to explore strategic alternatives including finding a strategic or financial partner to further enhance Navios’s operations in its physical and freight derivative trading operations, consider expansion into potentially new sectors for growth, and provide liquidity to Navios’s shareholders. In August 2004, Navios’s management contacted three investment banks including Lazard to present preliminary thoughts on alternatives and valuation for Navios. Lazard presented its preliminary evaluation of Navios in late August to the management and Board of Directors. After careful evaluation of the proposals received from each investment bank contacted, Navios chose Lazard to help consider strategic alternatives including a possible sale of Navios. On September 8, 2004, Navios executed an engagement letter with Lazard in connection with such appointment.
During the months of September and October 2004, Lazard worked with Navios’s management team to produce a confidential information memorandum that would be distributed under a confidentiality agreement to selected strategic and financial partners. Lazard and Navios agreed on contacting several shipping companies and financial institutions that best fit the strategic goals of Navios, including expertise in providing dry bulk shipping services as well as physical and freight derivatives trading.
Over the months of November and December 2004, Lazard advised us that it contacted a total of 17 strategic shipping and commodity buyers and 29 financial institutions or private investment groups.
On November 24, 2004, Maritime Enterprises Management S.A., a business owned by the Frangos family and of which Angeliki Frangou is an affiliate, executed a confidentiality agreement. Lazard subsequently provided Maritime with a Confidential Information Memorandum that included certain confidential financial information produced by Navios’s management.
On December 6, 2004, Maritime contacted HSH Nordbank AG with a view to determining the amount of debt financing that might be available if Maritime determined to bid for Navios. On December 6, 2004, the bank signed a confidentiality agreement to enable it to preliminarily evaluate such prospects (a copy of which is being provided under separate cover).
MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C.
John Reynolds, Assistant Director
Securities and Exchange Commission
May 27, 2005
Page
On December 15, 2004, a confidentiality agreement was executed between ISE and Navios. Lazard subsequently provided ISE with a copy of the same Confidential Information Memorandum previously provided to Maritime. Lazard has advised us that it distributed Confidential Information Memoranda to 21 parties in the first round of the auction process.
Later on December 15, 2004, HSH provided a draft outline of a finance proposal (a copy of which is being provided under separate cover) which assumed that the credit facility would be collateralized and guaranteed by Maritime. On, December 15, 2004, ISE initiated contact, at the suggestion of HSH, with its affiliate, HSH Gudme Corporate Finance. ISE entered into a consultancy agreement with HSH Gudme on December 30, 2004. On December 16, 2004, ISE entered into a confidentiality agreement with Investments and Finance Ltd. and entered into an agreement with them on December 20, 2004.
On December 15, 2004, a memo was sent by ISE to Jacq. Pierot & Sons, Braemar Seascope, J. E. Hyde (ship brokers) requesting information on any available acquisition targets in the dry cargo sector. A copy of the memo is being provided under
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CORRESP 1 filename1.htm SEC Response Letter MINTZ LEVIN COHN FERRIS GLOVSKY AND POPEO PC Boston New York Washington Reston Stamford Los Angeles London Chrysler Center 666 Third Avenue New York, New York 10017 212 935 3000 212 983 3115 fax www.mintz.com Kenneth R. Koch Direct dial 212 692 6768 kkoch@mintz.com May 27, 2005 VIA EDGAR AND FEDERAL EXPRESS John Reynolds, Assistant Director Division of Corporation Finance Securities and Exchange Commission 450 Fifth Street, N.W. Washington, DC 20549 Re: International Shipping Enterprises, Inc. Form S-4 Filed April 19, 2005 File No. 333-124170 Dear Mr. Reynolds: On behalf of International Shipping Enterprises, Inc. (the “Company”), we respond as follows to the Staff’s legal comments dated May 19, 2005 relating to the above-captioned Registration Statement. Captions and page references herein correspond to those set forth in Amendment No. 1 to the Registration Statement, the enclosed copy of which has been marked with the changes from the initial filing. Please note that for the Staff’s convenience, we have recited each of the Staff’s comments and provided our response to each comment immediately thereafter. General 1. Pursuant to Item 301 of Regulation S-K, in a table designed to facilitate comparison, please present historical and pro forma per share data of ISE and historic and equivalent pro forma per share date of Navios for the following Items: (i) book value per share as of the date for which financial data is presented; (ii) cash dividends declared per share for the periods which financial data is presented; and MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C. John Reynolds, Assistant Director Securities and Exchange Commission May 27, 2005 Page 2 (iii) income (loss) per share born continuing operations for the periods for which financial data is presented. We have revised the text in accordance with the Staff’s request. Please see page 7. 2. Please provide the disclosure required by Rule 14a-5(e) as required by Item l(c) of Schedule 14A. See Item 18(a)(1) of Form S-4. We have revised the text in accordance with the Staff’s request. Please see page 130. Cover Page 3. Please include a prospectus cover page in accordance with Item 501 of Regulation S-K. See also Items 1 and 2 of Form S-4. We have revised the text in accordance with the Staff’s request. Please see added cover page. 4. Please provide the name, complete mailing address and phone number of the principal executive offices of the company being acquired, in addition to the registrant. See Item 3(a) of Form S-4. We have revised the text in accordance with the Staff’s request. Please see page 1. 5. Please elaborate on and/or define the following: core fleet; long term charters; in the money; and time chartered vessels. We have revised the text in accordance with the Staff’s request. Please see page 1. 6. Clarify under “The Acquisition” that ISE plans to finance the $607.5 million acquisition though funds raised in its IPO of $180 million plus a credit facility of up to $520 million. MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C. John Reynolds, Assistant Director Securities and Exchange Commission May 27, 2005 Page 3 We have revised the text in accordance with the Staff’s request. Please see page 1. 7. Under “Stock Ownership,” please provide a brief statement comparing percentage of outstanding shares entitled to vote that the officers, directors, and affiliates of Navios hold. Please see Item 3(h) of Form S-4. We have revised the text in accordance with the Staff’s request. Please see page 4. 8. Please include a brief statement about the tax consequences of the transaction, or if appropriate, a cross-reference to the information provided pursuant to Item 4 of Form 5-4. See Item 3(k) of Form S-4. We have revised the text in accordance with the Staff’s request. Please see page 4. Selected Historical Financial Information General 9. Considering the significance of the merger transaction, please present selected unaudited pro forma condensed combined financial information showing the pro forma effect of the merger transaction. We have revised the text in accordance with the Staff’s request. Please see page 7. Navios Historical Financial Information, Page 7 10. Pursuant to Item 301 of Regulation S-K, please revise your table to present data for each of the last five fiscal years (or for the life of the registrant and its predecessors, if less). We have revised the text in accordance with the Staff’s request. Please see page 7. MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C. John Reynolds, Assistant Director Securities and Exchange Commission May 27, 2005 Page 4 11. Pursuant to Item 301 of Regulation S-K, please revise to include separate line items for cash paid for dividends declared and mandatorily redeemable preferred stock. We have revised the text in accordance with the Staff’s request. Please see page 7. Risk Factors, Page 9 12. To the extent possible, please avoid the generic conclusions you reach in several of your risk factors that the risk discussed could have a “material adverse effect,” “material adverse impact,” or “adversely affect” your financial condition, results of operations or other similar matters. Instead, replace this language with more specific disclosure of how your financial condition would be affected and place the risk in context by making the magnitude of the risk clew- For instance, in risk factors 1-5,8, 10, 15, 17, 18, 22, 26-28, 35 and 36 please describe specifically the impact that the risks mentioned might have on your business. We have revised the text in accordance with the Staff’s request. Please see pages 10 - 20. 13. We note the disclosure in risk factor 6 that maritime claimants could arrest your vessels if they have a lien against your vessel for unsatisfied debts, claims or damages against the vessel. ‘Please disclose whether there are any current liens against any vessels. We have revised the text in accordance with the Staff’s request. Please see page 12. 14. The subheadings of several of your risk factors merely state facts or uncertainties and do not adequately reflect the risks that follow. Please revise your subheadings to succinctly state the risks you discuss in the text. For example, please refer to risk factors 7, 10, 12, 19, 20, 21, 22, 24 and 25. We have revised the text in accordance with the Staff’s request. Please see pages 12 and 14 - 18. MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C. John Reynolds, Assistant Director Securities and Exchange Commission May 27, 2005 Page 5 15. Risk factors 9, 12 and 27 are generic risk factors that apply to all businesses and should be removed. We have reviewed the Staff’s comment and amended the registration statement to remove these risk factors. 16. Risk factors 14-16 are generic, vague and merely repeat the accompanying subheading. Please revise to more adequately address the specific risks imposed on the company, Navios, and investors in this offering. We have revised the text in accordance with the Staff’s request. Please see page 14. We have combined risk factor 16 with risk factor 15 as the impact on ISE’s earnings is covered by the risk of a negative impact on ISE’s operating results as disclosed in risk factor 15. 17. Risk factor 17 presents several risks associated with your business. Each risk factor should discuss only one risk. Please revise. We have separated the risk factors in accordance with the Staff’s request. Please see pages 15 and 16. 18. Risk factor 18 appears to repeat much of the disclosure set forth in risk factor 8. Please consider consolidating these risk factors or advise. In addition, we note in risk factor 18 disclosure that Navios could be liable for environmental damage caused by previous property owners. Please elaborate on this liability and identify the previous property owners to which you refer. We have reviewed the risk factors identified and have combined them and, upon further review of the facts, the potential liability associated with environmental damages caused by previous property owners is not a material risk and, accordingly, the risk has been removed. Please see pages 13 and 16. 19. In risk factor 19 and in the description of business experience on page 108, please disclose the percentage of time and number of hours per week that your officers and directors will contribute to company business after the acquisition. MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C. John Reynolds, Assistant Director Securities and Exchange Commission May 27, 2005 Page 6 We have revised the text in accordance with the Staff’s request. Please see page 16. 20. Consider combining risk factors 30 and 31, as both relate to insurance. We have removed risk factor 30 as it appears largely duplicative of risk factor 31. 21. Please include an additional risk factor discussing enforceability of civil liabilities against foreign persons as set forth in Item 101(g) of Regulation S-K. We have revised the text in accordance with the Staff’s request. Please see page 20. 22. Risk factor 39 states that BE “is” incorporated under the laws of the Marshall Islands. Please revise or advise. We have revised the text in accordance with the Staff’s request. Please see page 20. The Acquisition Proposal, Page 27 Background of the Merger 23. Please expand on this discussion to describe any past, present or proposed material contracts, arrangements, understandings, relationships, negotiations or transactions during the periods for which financial statements are presented or incorporated by reference pursuant to Part I, B and C of Form S-4 between Navios or its affiliates and the company or its affiliates. In this context, provide a narrative chronology of the entire process through which Navios and the company agreed to the proposed business combination transaction. This chronology would include, among other matters, the determination by Navios to consider a business combination transaction, Navios’s decision to enter into an auction process, the selection by Navios of Lazard to conduct the auction, Lazard’s carrying out of the auction process, and the entirety of the contacts by and between the company and Navios (or their respective representatives) from the initial contacts between the company and Navios up to and including the execution of the MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C. John Reynolds, Assistant Director Securities and Exchange Commission May 27, 2005 Page 7 agreements by and between Navios and the company with respect to the combination transaction. This chronology should include the dates of all such contacts, communications, documents, or activities, the parties who participated, and a discussion of the substance of all such contacts, communications, documents, or activities. In addition, to the extent that the company feels it would benefit the staff in its review of the transaction and its background, supplementally provide the staff with copies of all written and oral documentation regarding the same, including, but not limited to, all documents, agreements (including exclusivity and confidentiality agreements) arrangements, correspondence, memoranda, emails and all other similar writings, as well as any and all writings memorializing, discussing, describing or evidencing all oral correspondence, discussions agreements. The persons or entities for which this information is requested would include, but not be limited to, the following: the company and its affiliates, Navios and its affiliates, all underwriters, including Lazard, Sunrise, HSH Gudme and Investment & Finance Ltd.; all auditors; all accountants; all lenders; all financial advisors and consultants; all legal advisors and consultants; and all committees or special committees to the boards of both Navios and the company. See Items 4 and 6 of Form S-4 and Rule 418 of Regulation C. We have revised the text in accordance with the Staff’s request. Please see pages 27-29. In the summer of 2004, Navios’s management and Board of Directors had preliminary discussions regarding the overall growth strategy for Navios. The outcome of the discussions was to explore strategic alternatives including finding a strategic or financial partner to further enhance Navios’s operations in its physical and freight derivative trading operations, consider expansion into potentially new sectors for growth, and provide liquidity to Navios’s shareholders. In August 2004, Navios’s management contacted three investment banks including Lazard to present preliminary thoughts on alternatives and valuation for Navios. Lazard presented its preliminary evaluation of Navios in late August to the management and Board of Directors. After careful evaluation of the proposals received from each investment bank contacted, Navios chose Lazard to help consider strategic alternatives including a possible sale of Navios. On September 8, 2004, Navios executed an engagement letter with Lazard in connection with such appointment. During the months of September and October 2004, Lazard worked with Navios’s management team to produce a confidential information memorandum that would be distributed under a confidentiality agreement to selected strategic and financial partners. Lazard and Navios agreed on contacting several shipping companies and financial institutions that best fit the strategic goals of Navios, including expertise in providing dry bulk shipping services as well as physical and freight derivatives trading. Over the months of November and December 2004, Lazard advised us that it contacted a total of 17 strategic shipping and commodity buyers and 29 financial institutions or private investment groups. On November 24, 2004, Maritime Enterprises Management S.A., a business owned by the Frangos family and of which Angeliki Frangou is an affiliate, executed a confidentiality agreement. Lazard subsequently provided Maritime with a Confidential Information Memorandum that included certain confidential financial information produced by Navios’s management. On December 6, 2004, Maritime contacted HSH Nordbank AG with a view to determining the amount of debt financing that might be available if Maritime determined to bid for Navios. On December 6, 2004, the bank signed a confidentiality agreement to enable it to preliminarily evaluate such prospects (a copy of which is being provided under separate cover). MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C. John Reynolds, Assistant Director Securities and Exchange Commission May 27, 2005 Page 8 On December 15, 2004, a confidentiality agreement was executed between ISE and Navios. Lazard subsequently provided ISE with a copy of the same Confidential Information Memorandum previously provided to Maritime. Lazard has advised us that it distributed Confidential Information Memoranda to 21 parties in the first round of the auction process. Later on December 15, 2004, HSH provided a draft outline of a finance proposal (a copy of which is being provided under separate cover) which assumed that the credit facility would be collateralized and guaranteed by Maritime. On, December 15, 2004, ISE initiated contact, at the suggestion of HSH, with its affiliate, HSH Gudme Corporate Finance. ISE entered into a consultancy agreement with HSH Gudme on December 30, 2004. On December 16, 2004, ISE entered into a confidentiality agreement with Investments and Finance Ltd. and entered into an agreement with them on December 20, 2004. On December 15, 2004, a memo was sent by ISE to Jacq. Pierot & Sons, Braemar Seascope, J. E. Hyde (ship brokers) requesting information on any available acquisition targets in the dry cargo sector. A copy of the memo is being provided under