Document:

Exhibit 10.12

Exhibit 10.12

 

REGISTRATION RIGHTS AGREEMENT

by and between

MORGANS HOTEL GROUP CO.

and

YUCAIPA AMERICAN ALLIANCE FUND II, L.P.,

YUCAIPA AMERICAN ALLIANCE (PARALLEL) FUND II, L.P.,

and

YUCAIPA AMERICAN ALLIANCE FUND II, LLC

 

Dated as of October 15, 2009

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	1. Certain Definitions
	 	 	1	 
	2. Demand Registrations
	 	 	3	 
	(a) Right to Request Registration
	 	 	3	 
	(b) Number of Demand Registrations
	 	 	3	 
	(c) Participation Rights of Holders
	 	 	3	 
	(d) Priority on Demand Registrations
	 	 	4	 
	(e) Restrictions on Demand Registrations
	 	 	4	 
	(f) Selection of Underwriters
	 	 	4	 
	(g) Other Registration Rights
	 	 	5	 
	(h) Effective Period of Demand Registrations
	 	 	5	 
	3. Piggyback Registrations
	 	 	5	 
	(a) Right to Piggyback
	 	 	5	 
	(b) Priority on Primary Piggyback Registrations
	 	 	6	 
	(c) Priority on Secondary Registrations
	 	 	6	 
	(d) Selection of Underwriters
	 	 	6	 
	(e) Other Registration Rights
	 	 	6	 
	4. S-3 Registrations
	 	 	7	 
	(a) Right to Request Registration
	 	 	7	 
	(b) Priority on Shelf Takedowns
	 	 	7	 
	(c) Selection of Underwriters
	 	 	7	 
	(d) Other Registration Rights
	 	 	8	 
	5. Holdback Agreements
	 	 	8	 
	6. Registration Procedures
	 	 	9	 
	7. Registration Expenses
	 	 	13	 
	8. Indemnification
	 	 	13	 
	9. Participation in Underwritten Registrations
	 	 	15	 
	10. Rule 144
	 	 	15	 

 

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	11. Miscellaneous
	 	 	16	 
	(a) Notices
	 	 	16	 
	(b) No Waivers
	 	 	17	 
	(c) Expenses
	 	 	17	 
	(d) Successors and Assigns
	 	 	17	 
	(e) Governing Law
	 	 	17	 
	(f) Jurisdiction
	 	 	17	 
	(g) Waiver of Jury Trial
	 	 	18	 
	(h) Counterparts; Effectiveness
	 	 	18	 
	(i) Entire Agreement
	 	 	18	 
	(j) Captions
	 	 	18	 
	(k) Severability
	 	 	18	 
	(l) Amendments
	 	 	18	 
	(m) Equitable Relief
	 	 	19	 
	(n) Construction
	 	 	19	 

 

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THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), is made and entered into as of
October 15, 2009, by and between Morgans Hotel Group Co., a Delaware corporation (the
“Company”), and Yucaipa American Alliance Fund II, L.P., a Delaware limited partnership
(“YAAF II”), Yucaipa American Alliance (Parallel) Fund II, L.P., a Delaware limited
partnership (“YAAF II-P” together with YAAF II, the “Investors”) and Yucaipa
American Alliance Fund II, LLC, a Delaware limited liability company (“Yucaipa Manager”
and, together with the Investors, the “Securityholders”).

Unless otherwise specified herein, capitalized terms used herein shall have the meanings
assigned to such terms in the Securities Purchase Agreement (the “Purchase Agreement”),
dated as of the date hereof, by and among the Company and the Investors.

In consideration of the mutual covenants and agreements herein contained and other good and
valid consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to
this Agreement hereby agree as follows:

1. Certain Definitions.

In addition to the terms defined elsewhere in this Agreement, the following terms shall have
the following meanings:

“Affiliate” of any Person means any other Person which directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common control with, such
Person. The term “control” (including the terms “controlling,” “controlled by” and “under common
control with”) as used with respect to any Person means the possession, direct or indirect, of 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.

“Agreement” means this Registration Rights Agreement, including all amendments,
modifications and supplements and any exhibits or schedules to any of the foregoing, and shall
refer to this Registration Rights Agreement as the same may be in effect at the time such reference
becomes operative.

“Blackout Period” has the meaning set forth in Section 6(f) hereof.

“Company” has the meaning set forth in the introductory paragraph.

“Delay Period” has the meaning set forth in Section 2(d) hereof.

“Commencement Date” means (a) as to the Investors, the “Commencement Date” as such
term is defined in the Warrants, and (b) as to Yucaipa Manager, the “Commencement Date” as such
term is defined in the REF Warrants.

“Demand Registration” has the meaning set forth in Section 2(a) hereof.

“Demand Registration Statement” has the meaning set forth in Section 2(a) hereof.

 

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“Form S-3” means a registration statement on Form S-3 under the Securities Act or such
successor form thereto permitting registration of securities under the Securities Act.

“Holder” means each Securityholder to the extent that such Securityholder is the
holder of record of Registrable Common Stock. For purposes of this Agreement, the Company may deem
and treat the registered holder of Registrable Common Stock as the absolute owner thereof, and the
Company shall not be affected by any notice to the contrary.

“Person” means any individual, sole proprietorship, partnership, limited liability
company, joint venture, trust, incorporated organization, association, corporation, institution,
public benefit corporation, Governmental Entity or any other entity.

“Piggyback Registration” has the meaning set forth in Section 3(a) hereof.

“Prospectus” means the prospectus or prospectuses included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Common Stock covered by such Registration Statement and
by all other amendments and supplements to the prospectus, including post-effective amendments and
all material incorporated by reference in such prospectus or prospectuses.

“Registrable Common Stock” means any shares of Common Stock issued to a Holder from
time to time upon exercise of the Warrants and REF Warrants and any securities of the Company
issued or issuable with respect to such shares of Common Stock by way of stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger, consolidation or
other reorganization or otherwise.

“Registration Expenses” has the meaning set forth in Section 7(a) hereof.

“Registration Statement” means any registration statement of the Company which covers
any of the Registrable Common Stock pursuant to the provisions of this Agreement, including the
Prospectus, amendments and supplements to such Registration Statement, including post-effective
amendments, all exhibits and all materials incorporated by reference in such Registration
Statement.

“S-3 Registration” has the meaning set forth in Section 4 hereof.

“Securityholder” has the meaning set forth in the introductory paragraph hereof.

“Suspension Notice” has the meaning set forth in Section 6(f) hereof.

“Termination Date” means the date upon which all the Registrable Common Stock may be
sold in any three-month period without registration under the Securities Act.

“underwritten offering” means a registered offering in which securities of the Company
are sold to underwriters for reoffering to the public.

 

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2. Demand Registrations.

(a) Right to Request Registration. Subject to the provisions hereof, beginning on the
applicable Commencement Date, one or more Holders may at any time request registration for resale
under the Securities Act of all or part of the Registrable Common Stock separate from an S-3
Registration (a “Demand Registration”); provided, that (based on then current
market prices) the number of shares of Registrable Common Stock included in the Demand Registration
would yield gross proceeds to the Holder(s) requesting such Demand Registration of at least
$30,000,000 unless the aggregate value (based on then current market prices) of the Registrable
Common Stock held by the Holder(s) requesting such Demand Registration is less than $30,000,000 but
greater than $15,000,000, in which case the Demand Registration shall be for all of the Registrable
Common Stock of the Holder(s) requesting such Demand Registration. Subject to Section 2(d) below,
the Company shall use its reasonable best efforts (i) to file a Registration Statement (a
“Demand Registration Statement”) registering for resale such number of shares of
Registrable Common Stock as requested to be so registered within 30 days of a Holder’s request
therefor and (ii) to cause such Demand Registration Statement to be declared effective by the SEC
as soon as practicable thereafter.

(b) Number of Demand Registrations. Subject to the limitations of Section 2(a), the
Holders shall be entitled to request an aggregate of three Demand Registrations. A Registration
Statement shall not count as a permitted Demand Registration unless and until it has become
effective and the Holder(s) requesting such Demand Registration are able to register and sell at
least 50% of the Registrable Common Stock requested to be included in such registration.

(c) Participation Rights of Holders. Whenever the Company shall be requested by one
or more Holders to effect a Demand Registration pursuant to Section 2(a) hereof, the Company shall
promptly (but not later than 5 days after receiving such request) give written notice of such
requested Demand Registration to each other Holder that has provided contact information to the
Company prior thereto. Such notice shall inform Holders that they have 10 days to notify the
Company in writing as provided in Section 11(a) hereof that they wish to participate in such
proposed Demand Registration. The Company shall include in such Demand Registration the shares of
Common Stock of any Holder who irrevocably notifies the Company on or prior to such 10th day that
the Holder has elected to include such shares of Common Stock in such Demand Registration.

 

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(d) Priority on Demand Registrations. The Company may include Common Stock other than
Registrable Common Stock in a Demand Registration on the terms provided below, and, if such Demand
Registration is an underwritten offering, only with the consent of the managing underwriters of
such offering. If the managing underwriters of the requested Demand Registration advise the Company
and the Holder(s) requesting such Demand Registration that in their opinion the number of shares of
Common Stock
proposed to be included in the Demand Registration exceeds the number of shares of Common
Stock which can be sold in such underwritten offering and/or the number of shares of Common Stock
proposed to be included in such registration would adversely affect the price per share of the
Registrable Common Stock proposed to be sold in such underwritten offering, the Company shall
include in such Demand Registration (i) first, the number of shares of Common Stock that the
Holder(s) requesting such Demand Registration propose to sell, and (ii) second, the number of
shares of Common Stock proposed to be included therein by any other Persons (including shares of
Common Stock to be sold for the account of the Company and/or other holders of Common Stock)
allocated among such Persons in such manner as they may agree.

(e) Restrictions on Demand Registrations. The Company shall not be obligated to
effect any Demand Registration on behalf of a Holder within six months after the effective date of
any Demand Registration, Piggyback Registration wherein such Holder was permitted to register, and
actually sold, at least 50% of the shares of Registrable Common Stock requested to be included
therein or S-3 Registration. The Company may (i) withdraw a Registration Statement previously filed
(but not declared effective) pursuant to a Demand Registration or postpone for up to 90 days the
filing of a Registration Statement for a Demand Registration if, based on the good faith judgment
of the Company, such postponement or withdrawal would avoid premature disclosure of a matter the
Company has determined would not be in the best interest of the Company to be disclosed at such
time or (ii) postpone the filing of a Demand Registration in the event the Company shall be
required to prepare (A) audited financial statements as of a date other than its fiscal year end
(unless the Holder(s) requesting such registration agree to pay the reasonable expenses of such an
audit) or (B) pro forma financial statements that are required to be included in such Registration
Statement; provided, however, that in no event shall the Company withdraw a
Registration Statement under clause (i) after such Registration Statement has been declared
effective; and provided, further, however, that in any of the events
described in clause (i) or (ii) above, the Holder(s) requesting such Demand Registration shall be
entitled to withdraw such request and, if such request is withdrawn, such Demand Registration shall
not count as one of the permitted Demand Registrations. The Company shall provide written notice to
the Holder(s) requesting a Demand Registration of (x) any postponement or withdrawal of the filing
or effectiveness of a Registration Statement pursuant to this Section 2(d), (y) the Company’s
decision to file or seek effectiveness of such Registration Statement following such withdrawal or
postponement and (z) the effectiveness of such Registration Statement, which notice, if it relates
to clause (x), shall include the reasons therefor if the Holder(s) requesting such Demand
Registration shall have previously executed a confidentiality agreement satisfactory to the Company
in respect thereof. The Company may defer the filing of a particular Registration Statement
pursuant to this Section 2(d) only once during any six-month period. The period during which
filing or effectiveness is so postponed hereunder is referred to as a “Delay Period”.

(f) Selection of Underwriters. If any of the Registrable Common Stock covered by a
Demand Registration is to be sold in an underwritten offering, the Company will select one joint
bookrunning managing underwriter from the list of investment banks set forth on Schedule I and the
Holder(s) participating in such Demand Registration will
select the other joint bookrunning managing underwriter from the list of investment banks set
forth on Schedule I. The list of investment banks on Schedule I may be amended from time to time
by mutual agreement of the Holders and the Company. Any additional underwriters shall be selected
by mutual agreement of the Holders, on the one hand, and the Company, on the other hand.

 

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(g) Other Registration Rights. The Company shall not grant to any Person the right to
request the Company (i) to register any shares of Common Stock in a Demand Registration unless such
rights are consistent with the provisions hereof, or (ii) to register any securities of the Company
(other than shares of Common Stock) in a Demand Registration.

(h) Effective Period of Demand Registrations. Upon the date of effectiveness of any
Demand Registration for an underwritten offering contemplated to be consummated at the time of
effectiveness of the Demand Registration, the Company shall use its reasonable best efforts to keep
such Demand Registration Statement effective for a period equal to 15 business days from such date
or such shorter period which shall terminate when all of the Registrable Common Stock covered by
such Demand Registration has been sold pursuant to such Demand Registration. If the Company shall
withdraw any Demand Registration pursuant to Section 2(d) or issue a Suspension Notice pursuant to
Section 6(f) within such 15 business day period and before all of the Registrable Common Stock
covered by such Demand Registration has been sold pursuant thereto, the Holder(s) requesting such
Demand Registration shall be entitled to a replacement Demand Registration which shall be subject
to all of the provisions of this Agreement.

3. Piggyback Registrations.

(a) Right to Piggyback. Whenever the Company proposes to register any of its Common
Stock under the Securities Act (other than a registration statement on Form S-8 or on Form S-4 or
any similar successor forms thereto), whether for its own account or for the account of one or more
stockholders of the Company and the form of registration statement to be used may be used for any
registration of Registrable Common Stock (a “Piggyback Registration”), the Company shall
give prompt written notice (in any event no later than 10 days prior to the filing of such
registration statement) to the Holders of its intention to effect such a registration and, subject
to Section 3(b), shall include in such registration statement all Registrable Common Stock with
respect to which the Company has received written requests for inclusion therein from the Holders
within 8 days after the Holders’ receipt of the Company’s notice. The Company may postpone or
withdraw the filing or the effectiveness of a Piggyback Registration at any time in its sole
discretion. A Piggyback Registration shall not be considered a Demand Registration for purposes of
Section 2 of this Agreement or a S-3 Registration for purposes of Section 4 of this Agreement.

 

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(b) Priority on Primary Piggyback Registrations. If a Piggyback Registration is
initiated as a primary underwritten offering on behalf of the Company and the managing underwriters
advise the Company and the Holders (if any Holders have elected
to include Registrable Common Stock in such Piggyback Registration) that in their opinion the
number of shares of Common Stock proposed to be included in such registration exceeds the number of
shares of Common Stock which can be sold in such offering and/or that the number of shares of
Common Stock proposed to be included in any such registration would adversely affect the price per
share of the Common Stock to be sold in such offering, the Company shall include in such
registration (i) first, the number of shares of Common Stock that the Company proposes to sell, and
(ii) second, the number of shares of Common Stock requested to be included therein by holders of
Common Stock, including the Holders (if any Holders have elected to include Registrable Common
Stock in such Piggyback Registration), pro rata among all such holders on the basis of the number
of shares of Common Stock requested to be included therein by all such holders or as such holders
may otherwise agree.

(c) Priority on Secondary Registrations. If a Piggyback Registration is initiated as
an underwritten registration on behalf of a holder of Common Stock other than Registrable Common
Stock, and the managing underwriters advise the Company that in their opinion the number of shares
of Common Stock proposed to be included in such registration exceeds the number of shares of Common
Stock that can be sold in such offering and/or that the number of shares of Common Stock proposed
to be included in any such registration would adversely affect the price per share of the Common
Stock to be sold in such offering, then the Company shall include in such registration (i) first,
the number of shares of Common Stock requested to be included therein by the holder(s) requesting
such registration, (ii) second, the number of shares of Common Stock requested to be included
therein by other holders of Common Stock, including the Holders (if any Holders have elected to
include Registrable Common Stock in such Piggyback Registration), pro rata among such holders on
the basis of the number of shares of Common Stock requested to be included therein by such holders
or as such holders may otherwise agree, and (iii) third, the number of shares of Common Stock that
the Company proposes to sell.

(d) Selection of Underwriters. If any Piggyback Registration is initiated as a
primary underwritten offering, the Company shall have the right to select the managing underwriter
or underwriters to administer any such offering.

(e) Other Registration Rights. The Company shall not grant to any Person the right to
request the Company (i) to register any shares of Common Stock in a Piggyback Registration unless
such rights are consistent with the provisions hereof, or (ii) to register any securities of the
Company (other than shares of Common Stock) in a Piggyback Registration.

 

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4. S-3 Registrations.

(a) Right to Request Registration. At any time that the Company is eligible to use
Form S-3 or any successor thereto, each Holder shall be entitled to request that the Company file a
Registration Statement on Form S-3 or any successor thereto for a public offering of all or any
portion of the Registrable Common Stock pursuant to Rule 415 promulgated under the Securities Act
or otherwise. Upon such request, the Company
shall use its reasonable best efforts (i) to file a Registration Statement covering the number
of shares of Registrable Common Stock specified in such request under the Securities Act on Form
S-3 or any successor thereto (an “S-3 Registration”) for public sale in accordance with the method
of disposition specified in such request within 30 days of the such Holder’s request therefor and
(ii) to cause such S-3 Registration to be declared effective by the SEC as soon as reasonably
practicable thereafter. A Holder shall be entitled, upon not less than 24 hours (given on a
business day and effect at the same time on the next business day) prior written notice to the
Company in the manner provided below, to sell such Registrable Common Stock as are then registered
pursuant to such Registration Statement (each, a “Shelf Takedown”). The Holder shall be
entitled to request that one such Shelf Takedown shall be an underwritten offering;
provided, that (based on then current market prices) the number of shares of Registrable
Common Stock included in such Shelf Takedown would yield gross proceeds to the Holder(s) requesting
such Shelf Takedown of at least $25,000,000. Each Holder shall also give the Company prompt
written notice of the consummation of such Shelf Takedown. A notice of a proposed Shelf Takedown
pursuant to this Section shall be given by e-mail and facsimile transmission to the Company’s Chief
Financial Officer, with a copy to designated counsel, as provided in Section 11(a) hereof, and
shall be effective when receipt of such notice has been confirmed telephonically. The Company
agrees to waive such 24-hour notice period if at the time such notice is effective, the Prospectus
included in the Registration Statement related to the Registrable Common Stock proposed to be sold
in the Shelf Takedown does not contain an untrue statement of a material fact and does not omit any
material fact necessary to make the statements therein not misleading.

(b) Priority on Shelf Takedowns. The Company may include Common Stock other than
Registrable Common Stock in a Shelf Takedown on the terms provided below, and, if such Shelf
Takedown is an underwritten offering, only with the consent of the managing underwriters of such
offering. If the managing underwriters of the requested Shelf Takedown advise the Company and the
Holder(s) participating in such Shelf Takedown that in their opinion the number of shares of Common
Stock proposed to be included in any Shelf Takedown (1) exceeds the number of shares of Common
Stock which can be sold in such underwritten offering or (2) would adversely affect the price per
share of the Registrable Common Stock proposed to be sold in such underwritten offering, the
Company shall include in such Shelf Takedown only the number of shares of Common Stock which in the
opinion of such managing underwriters can be sold. If the number of shares of Common Stock which
can be sold is less than the number of shares of Common Stock proposed to be registered, the amount
of Common Stock to be so sold shall be allocated pro rata among the holders of Common Stock
desiring to participate in such Shelf Takedown on the basis of the number of shares of Common Stock
initially proposed to be registered by such holders or as such holders may otherwise agree.

(c) Selection of Underwriters. If any of the Registrable Common Stock covered by an
S-3 Registration is to be sold in an underwritten offering, the Company will select one joint
bookrunning managing underwriter from the list of investment banks set forth on Schedule I and the
Holder(s) participating in such S-3 Registration will select the other joint bookrunning managing
underwriter the list of investment banks set forth
on Schedule I. Any additional underwriters shall be selected by mutual agreement of the
Holders, on the one hand, and the Company, on the other hand.

 

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(d) Other Registration Rights. The Company shall not grant to any Person the right to
request the Company (i) to register any shares of Common Stock in an S-3 Registration unless such
rights are consistent with the provisions hereof, or (ii) to register any securities of the Company
(other than shares of Common Stock) in an S-3 Registration.

5. Holdback Agreements.

As long as any Holder is the beneficial owner of five percent or more of the outstanding
Common Stock of the Company, such Holder agrees not to sell, transfer, hedge the beneficial
ownership of (but shall not be required to unwind any existing hedged position) or otherwise
dispose of any shares of Common Stock (or other securities of the Company) held by it for a period
equal to the lesser of (i) 90 days following the date of a prospectus or prospectus supplement, as
applicable, relating to a sale of shares of Common Stock (or other securities of the Company) in an
underwritten offering registered under the Securities Act or (ii) such shorter period as the
managing underwriters of such underwritten offering shall agree to. Such agreement shall be in
writing in form satisfactory to the Company and the managing underwriters. The Company may impose
stop-transfer instructions with respect to the shares of Registrable Common Stock (or other
securities) subject to the foregoing restriction until the end of said period. The foregoing
restrictions shall not apply to (i) the exercise of the Warrants, the REF Warrants or any other
warrants or stock options to purchase shares of capital stock of the Company (provided that such
limitation does not affect limitations on any actions specified in the first sentence of this
Section 5 with respect to the shares issuable upon such exercise), (ii) transfers to Affiliates
where the transferee agrees to be bound by the terms hereof, (iii) the participation in the filing
of a registration statement with the SEC, including, without limitation, any S-3 Registration
hereunder, or (iv) the shares of Registrable Common Stock included in the underwritten offering
giving rise to the application of this Section 5. Notwithstanding the foregoing, the holdback
arrangement set forth in this Section 5 shall not apply to sale shares of Common Stock that is
registered on Form S-8 or Form S-4.

 

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6. Registration Procedures.

(a) Whenever the Holder(s) requests that any Registrable Common Stock be registered pursuant
to this Agreement, the Company shall use its reasonable best efforts to effect the registration and
the sale of such Registrable Common Stock in accordance with the intended methods of disposition
thereof, and, pursuant thereto, the Company shall as soon as reasonably practicable use its
reasonable best efforts to:

(i) subject to Section 2(a) and Section 4, prepare and file with the SEC a
Registration Statement with respect to such Registrable Common Stock and cause such
Registration Statement to become effective as soon as reasonably practicable
thereafter; and before filing a
Registration Statement or Prospectus or any amendments or supplements thereto,
furnish to the Holders and the underwriter or underwriters, if any, copies of all
such documents proposed to be filed, including documents incorporated by reference
in the Prospectus and, if requested by the Holders, the exhibits incorporated by
reference, and the Holders shall have the opportunity to object to any information
pertaining to the Holders that is contained therein and the Company will make the
corrections reasonably requested by the Holders with respect to such information
prior to filing any Registration Statement or amendment thereto or any Prospectus
or any supplement thereto;

(ii) prepare and file with the SEC such amendments and supplements to such
Registration Statement and the Prospectus used in connection therewith as may be
necessary to keep such Registration Statement effective for a period of not less
than (A) 15 business days, in the case of a Demand Registration, or (B) the earlier
of 2 years or the Termination Date in the case of an S-3 Registration, and no
longer than is necessary to complete the distribution of the Common Stock covered
by such Registration Statement and comply with the provisions of the Securities Act
with respect to the disposition of all the Common Stock covered by such
Registration Statement during such period in accordance with the intended methods
of disposition by the sellers thereof set forth in such Registration Statement;

(iii) furnish to each seller of Registrable Common Stock the Prospectus
included in such Registration Statement (including each preliminary Prospectus) and
any supplement thereto and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Common Stock
owned by such seller;

(iv) register or qualify such Registrable Common Stock under such other
securities or blue sky laws of such jurisdictions as any seller reasonably requests
and do any and all other acts and things which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such jurisdictions
of the Registrable Common Stock owned by such seller (provided, that the Company
will not be required to (A) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this subparagraph (iv),
(B) subject itself to taxation in any such jurisdiction or (C) consent to general
service of process in any such jurisdiction);

 

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(v) notify each seller of such Registrable Common Stock, at any time when a
Prospectus relating thereto is required to be delivered under the Securities Act,
of the occurrence of any event as a result of which the Prospectus included in such
Registration Statement contains an untrue statement of a material fact or omits any
fact necessary to make the statements therein not misleading, and, at the request
of any such seller, the Company shall prepare a supplement or amendment to such Prospectus so
that, as thereafter delivered to the purchasers of such Registrable Common Stock,
such Prospectus shall not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading;

(vi) in the case of an underwritten offering on behalf of the Holder(s)
pursuant to a Demand Registration, Piggyback Registration or an S-3 Registration,
enter into such customary agreements (including underwriting and lock-up agreements
in customary form) and take all such other customary actions as the Holder(s) or
the managing underwriters of such offering reasonably request in order to expedite
or facilitate the disposition of such Registrable Common Stock (including, without
limitation, making members of senior management of the Company available to
participate in “road-show” and other customary marketing activities (including
one-on-one meetings with prospective purchasers of the Registrable Common Stock))
and cause to be delivered to the underwriters opinions of counsel to the Company in
customary form, covering such matters as are customarily covered by opinions for an
underwritten public offering as the managing underwriters may request and addressed
to the underwriters;

(vii) to the extent not prohibited by applicable law or pre-existing
applicable contractual restrictions, (A) make available, for inspection by the
Holders, any underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney retained by any such underwriter, all
financial and other records, pertinent corporate documents and properties of the
Company, (B) cause the Company’s officers and employees to supply all information
reasonably requested by the Holders or such underwriter or attorney in connection
with such Registration Statement, and (C) make the Company’s independent registered
public accounting firm available for any such underwriter’s due diligence;

(viii) cause all such Registrable Common Stock to be listed on each securities
exchange on which securities of the same class issued by the Company are then
listed or, if no such similar securities are then listed, on Nasdaq or a national
securities exchange selected by the Company;

(ix) provide a transfer agent and registrar for all such Registrable Common
Stock not later than the effective date of such Registration Statement;

 

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(x) if requested, cause to be delivered at the time of delivery of any
Registrable Common Stock sold pursuant to a Registration Statement, letters from
the Company’s independent registered public accounting firm addressed to each
selling Holder (unless such selling Holder does not provide to such accountants the appropriate representation letter required by
rules governing the accounting profession) and each underwriter, if any, stating
that such accountants are independent within the meaning of the Securities Act and
the applicable rules and regulations adopted by the SEC thereunder, and otherwise
in customary form and covering such financial and accounting matters as are
customarily covered by letters of independent registered public accounting firms
delivered in connection with primary or secondary underwritten public offerings, as
the case may be;

(xi) make generally available to its stockholders a consolidated earnings
statement (which need not be audited) for the 12 months beginning after the
effective date of a Registration Statement as soon as reasonably practicable after
the end of such period, which earnings statement shall satisfy the requirements of
an earnings statement under Section 11(a) of the Securities Act; and

(xii) promptly notify the Holders and the underwriter or underwriters, if any:

(1) when the Registration Statement, any pre-effective amendment, the
Prospectus or any Prospectus supplement or post-effective amendment to the
Registration Statement has been filed and, with respect to the Registration
Statement or any post-effective amendment, when the same has become effective;

(2) of the notification to the Company by the SEC of its initiation of any
proceeding with respect to the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement; and

(3) of the receipt by the Company of any notification with respect to the
suspension of the qualification of any Registrable Common Stock for sale under the
applicable securities or blue sky laws of any jurisdiction.

(b) The Company represents and warrants that no Registration Statement (including any
amendments thereto) shall contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein, or necessary to make the statements therein not
misleading, and no Prospectus (including any supplements thereto) shall contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances under which they were made,
not misleading, in each case, except for any untrue statement or alleged untrue statement of a
material fact or omission or alleged omission of a material fact made in reliance on and in
conformity with written information furnished to the Company by or on behalf of the Holders
specifically for use therein.

 

11

 

(c) The Company shall make available to the Holders such number of copies of a Prospectus,
including a preliminary Prospectus, and all amendments and supplements thereto and such other
documents as the Holders may reasonably request in order to facilitate the disposition of the
Registrable Common Stock owned by the Holders. The Company will promptly notify the Holders
requesting registration for Registrable Common Stock of the effectiveness of each Registration
Statement or any post-effective amendment. The Company will promptly respond to any and all
comments received from the SEC, with a view towards causing each Registration Statement or any
amendment thereto to be declared effective by the SEC as soon as reasonably practicable and shall
file an acceleration request as soon as reasonably practicable following the resolution or
clearance of all SEC comments or, if applicable, following notification by the SEC that any such
Registration Statement or any amendment thereto will not be subject to review.

(d) At all times after the Company has filed a registration statement with the SEC pursuant to
the requirements of the Securities Act, the Company shall use its reasonable best efforts to file
all reports required to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations adopted by the SEC thereunder, and use its reasonable best efforts to take such
further action as the Holders may reasonably request, all to the extent required to enable the
Holders to be eligible to sell Registrable Common Stock pursuant to Rule 144 (or any similar rule
then in effect).

(e) The Company may require each seller of Registrable Common Stock as to which any
registration is being effected to furnish to the Company any other information regarding such
seller and the distribution of such securities as the Company may from time to time reasonably
request in writing.

(f) Each seller of Registrable Common Stock agrees by having its stock treated as Registrable
Common Stock hereunder that, upon written notice of the happening of any event as a result of which
the Prospectus included in such Registration Statement contains an untrue statement of a material
fact or omits any material fact necessary to make the statements therein not misleading (a
“Suspension Notice”), such seller will forthwith discontinue disposition of Registrable
Common Stock for a reasonable length of time not to exceed 60 days until such seller is advised in
writing by the Company that the use of the Prospectus may be resumed and is furnished with a
supplemented or amended Prospectus as contemplated by Section 6(a)(v) hereof, and, if so directed
by the Company, such seller will deliver to the Company (at the Company’s expense) all copies,
other than permanent file copies then in such seller’s possession, of the Prospectus covering such
Registrable Common Stock current at the time of receipt of such notice; provided,
however, that such postponement of sales of Registrable Common Stock by the Holders shall
not exceed 150 days in the aggregate in any one year. If the Company shall give any notice to
suspend the disposition of Registrable Common Stock pursuant to a Prospectus, the Company shall
extend the period of time during which the Company is required to maintain the Registration
Statement effective pursuant to this Agreement by the number of days during the period from and
including the date of the giving of such notice to and including the date such seller either is
advised by the Company that the use of the Prospectus may be resumed or receives the copies of the
supplemented or amended Prospectus contemplated by Section 6(a)(v) (a “Blackout
Period”). In any event, the Company shall not be entitled to deliver more than four Suspension
Notices in any one year.

 

12

 

7. Registration Expenses.

(a) All expenses incident to the Company’s performance of or compliance with this Agreement,
including, without limitation, all registration and filing fees, fees and expenses of compliance
with securities or blue sky laws, listing application fees, printing expenses, transfer agent’s and
registrar’s fees, cost of distributing Prospectuses in preliminary and final form as well as any
supplements thereto, and fees and disbursements of counsel for the Company and all independent
registered public accounting firms and other Persons retained by the Company (all such expenses
being herein called “Registration Expenses”) (but, not including any underwriting discounts
or commissions attributable to the sale of Registrable Common Stock or fees and expenses of counsel
representing the Holders), shall be borne by the Company. In addition, the Company shall pay its
internal expenses (including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual audit or quarterly
review, the expense of any liability insurance and the expenses and fees for listing the securities
to be registered on each securities exchange on which they are to be listed.

(b) The obligation of the Company to bear the expenses described in Section 7(a) shall apply
irrespective of whether a registration, once properly demanded, if applicable, becomes effective,
is withdrawn or suspended, is converted to another form of registration and irrespective of when
any of the foregoing shall occur; provided, however, that Registration Expenses for
any Registration Statement withdrawn solely at the request of the Holders (unless withdrawn
following postponement of filing by the Company in accordance with Section 2(d) or Section 3(a)) or
any supplements or amendments to a Registration Statement or Prospectus resulting from a
misstatement furnished to the Company by the Holders shall be borne by such Holders. If any
Registration Statement is withdrawn (unless such withdrawal is solely at the request of the
Holders), the Company shall reimburse the Holders for their reasonable legal fees and related
disbursements in connection with such withdrawn Registration Statement.

8. Indemnification.

(a) The Company shall indemnify, to the fullest extent permitted by law, the Holders and each
Person who controls the Holders (within the meaning of the Securities Act) against all losses,
claims, damages, liabilities and expenses arising out of or based upon any untrue or alleged untrue
statement of material fact contained in any Registration Statement, Prospectus, free writing
prospectus (as defined in Rule 405 promulgated under the Securities Act) or any amendment thereof
or supplement thereto or any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, except insofar as the same are
made in reliance and in conformity with information furnished in writing to the Company by a Holder
expressly for use therein or caused by a Holder’s failure to deliver to the Holder’s immediate
purchaser a copy of the Registration Statement, Prospectus, free writing prospectus (as
defined in Rule 405 promulgated under the Securities Act) or any amendments or supplements thereto
(if the same was required by applicable law to be so delivered) after the Company has furnished the
Holders with a sufficient number of copies of the same prior to any written confirmation of the
sale of Registrable Common Stock. In connection with an underwritten offering, the Company shall
indemnify such underwriters and each Person who controls such underwriters (within the meaning of
the Securities Act) to the same extent as provided above with respect to the indemnification of the
Holders.

 

13

 

(b) In connection with any Registration Statement in which a Holder is participating, such
Holder shall furnish to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such Registration Statement or Prospectus or
free writing prospectus (as defined in Rule 405 promulgated under the Securities Act) and, shall
indemnify, to the fullest extent permitted by law, the Company, its officers, directors and each
Person who controls the Company (within the meaning of the Securities Act) against all losses,
claims, damages, liabilities and expenses arising out of or based upon any untrue or alleged untrue
statement of material fact contained in the Registration Statement, Prospectus, free writing
prospectus (as defined in Rule 405 promulgated under the Securities Act) or any amendment thereof
or supplement thereto or any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, but only to the extent that the
same are made in reliance and in conformity with information furnished in writing to the Company by
such Holder expressly for use therein or caused by such Holder’s failure to deliver to such
Holder’s immediate purchaser a copy of the Registration Statement, Prospectus, free writing
prospectus (as defined in Rule 405 promulgated under the Securities Act) or any amendments or
supplements thereto (if the same was required by applicable law to be so delivered) after the
Company has furnished such Holder with a sufficient number of copies of the same prior to any
written confirmation of the sale of Registrable Common Stock; provided, however,
that the liability of a Holder shall be in proportion to and limited to the net amount received by
such Holder from the sale of Registrable Common Stock pursuant to such Registration Statement.

(c) Any Person entitled to indemnification hereunder shall (i) give prompt written notice to
the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit
such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to
the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to
any liability for any settlement made by the indemnified party without its consent (but such
consent will not be unreasonably withheld). An indemnifying party who is entitled to, and elects
to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than
one counsel for all parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party there may be one or more legal or
equitable defenses available to such indemnified party which are in addition to or may conflict
with those available to another indemnified party with respect
to such claim. Failure to give prompt written notice shall not release the indemnifying party
from its obligations hereunder.

 

14

 

(d) The indemnification provided for under this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of the indemnified party or any
officer, director or controlling Person of such indemnified party and shall survive the transfer of
securities.

(e) If the indemnification provided for in or pursuant to this Section 8 is due in accordance
with the terms hereof, but is held by a court to be unavailable or unenforceable in respect of any
losses, claims, damages, liabilities or expenses referred to herein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified Person as a result of such losses, claims, damages, liabilities
or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection with the statements
or omissions which result in such losses, claims, damages, liabilities or expenses as well as any
other relevant equitable considerations. The relative fault of the indemnifying party on the one
hand and of the indemnified Person on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the indemnifying party
or by the indemnified party, and by such party’s relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. Notwithstanding anything to the
contrary herein, in no event shall the liability of a Holder be greater in amount than the amount
of net proceeds received by such Holder upon such sale or the amount for which such indemnifying
party would have been obligated to pay by way of indemnification if the indemnification provided
for under Section 8(a) or 8(b) hereof had been available under the circumstances.

9. Participation in Underwritten Registrations.

No Person may participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell such Person’s securities on the basis provided in any underwriting
arrangements approved by the Person or Persons entitled hereunder to approve such arrangements and
(b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such underwriting
arrangements.

10. Rule 144.

The Company shall use its reasonable best efforts to file the reports required to be filed by
it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC
thereunder, and use its reasonable best efforts to take such further action as the Holders may
reasonably request to make available adequate current public information with respect to the
Company meeting the current public information requirements of Rule 144(c) under the Securities
Act, to the extent required to enable the
Holders to sell Registrable Common Stock without registration under the Securities Act within
the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such Rule
may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the
SEC. Upon the request of a Holder, the Company will deliver to such Holder a written statement as
to whether it has complied with such information and requirements.

 

15

 

11. Miscellaneous.

(a) Notices. Except as otherwise provided herein, all notices, requests, consents and
other communications required or permitted hereunder shall be in writing and shall be hand
delivered or sent postage prepaid by a nationally recognized overnight courier service (with
tracking capability) or by facsimile transmission (with immediate telephone confirmation
thereafter),

If to the Company:

Morgans Hotel Group Co.

475 Tenth Avenue

New York, New York 10018

Attention: Chief Financial Officer

Facsimile: (212) 277-4201

E-mail: richard.szymanski@morganshotelgroup.com

with a copy to (which shall not constitute notice):

Sullivan & Cromwell LLP

125 Broad Street

New York, NY 10004

Attention: Robert W. Downes, Esq.

Facsimile: (212) 558-3588

E-mail: downesr@sullcrom.com

If to a Securityholder:

c/o Yucaipa American Alliance Fund II, LLC

9130 W. Sunset Boulevard

Los Angeles, California 90069

Attention: Robert P. Bermingham

with a copy (which shall not constitute notice) to:

Munger, Tolles & Olson LLP

355 South Grand Avenue

35th Floor

Los Angeles, California 90071

Attention: Judith T. Kitano

Fax: (213) 683-4052

Email: judith.kitano@mto.com

 

16

 

or at such other address as such party each may specify by written notice to the others, and,
except as otherwise provided herein, each such notice, request, consent and other communication
shall for all purposes of the Agreement be treated as being effective or having been given when
delivered personally, upon receipt of facsimile confirmation if transmitted by facsimile, or, if
sent by a nationally recognized overnight courier service (with tracking capability), upon its
receipt.

(b) No Waivers. No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.

(c) Expenses. Except as otherwise provided for herein or otherwise agreed to in
writing by the parties, all costs and expenses incurred in connection with the preparation of this
Agreement shall be paid by the Company.

(d) Successors and Assigns. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns, it
being understood that subsequent holders of the Registrable Common Stock are intended third party
beneficiaries hereof. Without limitation of the foregoing sentence, each Securityholder shall be
permitted to assign its registration rights as a Securityholder hereunder to any person to whom
such Securityholder transfers 2,000,000 shares or more of Registrable Securities (subject to
adjustment in accordance with Section 7.14 of the Purchase Agreement); provided, that (x)
the Company is given prior written notice of the assignment, stating the name and address of the
assignee and identifying the Registrable Securities with respect to which such registration rights
are being assigned, and (y) such assignee agrees in writing to be bound by subject to the
provisions of this Agreement mutatis mutandis as if the assignee were a party hereto.

(e) Governing Law. The internal laws of the State of New York shall govern the
enforceability and validity of this Agreement, the construction of its terms and the interpretation
of the rights and duties of the parties.

(f) Jurisdiction. Any suit, action or proceeding seeking to enforce any provision of,
or based on any matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby must be brought in any federal or state court located in the County and State
of New York, and each of the parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably
waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to
the laying of the venue of any such suit, action or proceeding in any such court or that any such
suit, action or proceeding which is brought in any such court has been brought in an inconvenient
forum. Process in any such suit, action or proceeding may be served on any party anywhere in
the world, whether within or without the jurisdiction of any such court. Without limiting the
foregoing, each party agrees that service of process on such party as provided in Section 11(a)
shall be deemed effective service of process on such party.

 

17

 

(g) Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(h) Counterparts; Effectiveness. This Agreement may be executed in any number of
counterparts (including by facsimile) and by different parties hereto in separate counterparts,
with the same effect as if all parties had signed the same document. All such counterparts shall be
deemed an original, shall be construed together and shall constitute one and the same instrument.
This Agreement shall become effective when each party hereto shall have received counterparts
hereof signed by all of the other parties hereto.

(i) Entire Agreement. This Agreement contains the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes and replaces all other
prior agreements, written or oral, among the parties hereto with respect to the subject matter
hereof.

(j) Captions. The headings and other captions in this Agreement are for convenience
and reference only and shall not be used in interpreting, construing or enforcing any provision of
this Agreement.

(k) Severability. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated so
long as the economic or legal substance of the transactions contemplated hereby is not affected in
any manner materially adverse to any party. Upon such a determination, the parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.

(l) Amendments. The provisions of this Agreement, including the provisions of this
sentence, may not be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given without the prior written consent of the Company and the
Securityholders.

 

18

 

(m) Equitable Relief. The parties hereto agree that legal remedies would be
inadequate to enforce the provisions of this Agreement against the Company and that, in the event
of a breach of this Agreement by the Company, the Securityholders shall be
permitted to enforce the provisions of this Agreement against the Company by means of
equitable relief, including specific performance and injunctive relief.

(n) Construction. The parties hereto acknowledge that each party and its counsel have
participated in the negotiation and preparation of this Agreement. This Agreement shall be
construed without regard to any presumption or other rule requiring construction against the party
causing this Agreement to be drafted. Every covenant, term and provision of this Agreement shall
be construed according to its fair meaning and not strictly for or against any party hereto.

[Execution Page Follows]

 

19

 

IN WITNESS WHEREOF, this Registration Rights Agreement has been duly executed by each of the
parties hereto as of the date first written above.

	 	 	 	 	 	 	 
	MORGANS HOTEL GROUP CO.	 	 
	 
	 	 	 	 	 	 
	By:
	 	/s/ Marc Gordon 	 	 
	 	 	 	 	 
	 

	 	Name:	 	Marc Gordon 	 	 
	 	 	 	 	 	 	 
	 

	 	Title:
	 	President 
	 	 
	 

	 	 	 	 

	 	 

[Securityholder signatures on following page.]

 

 

	 	 	 	 	 	 	 
	SECURITYHOLDERS:	 	 
	 
	 	 	 	 	 	 
	YUCAIPA AMERICAN ALLIANCE FUND II, L.P.	 	 
	 
	 	 	 	 	 	 
	By:	 	Yucaipa American Alliance Fund II, LLC	 	 
	Its:	 	General Partner	 	 
	 
	 	 	 	 	 	 
	By:
	 	/s/ Robert P. Bermingham 	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Robert P. Bermingham	 	 
	 

	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 
	YUCAIPA AMERICAN ALLIANCE (PARALLEL) FUND II, L.P.	 	 
	 
	 	 	 	 	 	 
	By:	 	Yucaipa American Alliance Fund II, LLC	 	 
	Its:	 	General Partner	 	 
	 
	 	 	 	 	 	 
	By:
	 	/s/ Robert P. Bermingham 	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Robert P. Bermingham	 	 
	 

	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 
	YUCAIPA AMERICAN ALLIANCE FUND II, LLC	 	 
	 
	 	 	 	 	 	 
	By:
	 	/s/ Robert P. Bermingham 	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Robert P. Bermingham	 	 
	 

	 	Title:
	 	Vice President	 	 

(Registration
Rights Agreement)

 

 

Schedule I

Bank of America Securities LLC [Merrill Lynch]

Citigroup Global Markets Inc.

Deutsche Bank Securities Inc.

Goldman, Sachs & Co.

Jefferies & Company, Inc. [with respect to an offering with aggregate value less than $50 million]

Wells Fargo Securities, LLC [Wachovia]exv10w1

Exhibit 10.1

Private and Confidential

DATED
26 October 2010

FOLEGANDROS SHIPPING CORPORATION

and

SERIFOS SHIPPING CORPORATION (1)

EFG EUROBANK ERGASIAS S.A.          (2)

 

FACILITY AGREEMENT

in respect of a loan of up to

USD52,200,000 in two tranches

 

PIRAEUS

 

 

Index

	 	 	 	 	 	 	 
	Clause	 	 	 	Page	 
	 
	 	 	 	 	 	 
	1

	 	Purpose and definitions
	 	 	3	 
	 
	 	 	 	 	 	 
	2

	 	The Bank’s Commitment, Advance and Use of Proceeds
	 	 	15	 
	 
	 	 	 	 	 	 
	3

	 	Interest and Interest Periods
	 	 	16	 
	 
	 	 	 	 	 	 
	4

	 	Repayment and prepayment
	 	 	18	 
	 
	 	 	 	 	 	 
	5

	 	Commitment commission, fees and expenses
	 	 	20	 
	 
	 	 	 	 	 	 
	6

	 	Payments and taxes; Accounts and calculations
	 	 	21	 
	 
	 	 	 	 	 	 
	7

	 	Representations and warranties
	 	 	23	 
	 
	 	 	 	 	 	 
	8

	 	Undertakings
	 	 	28	 
	 
	 	 	 	 	 	 
	9

	 	Conditions
	 	 	33	 
	 
	 	 	 	 	 	 
	10

	 	Events of Default
	 	 	36	 
	 
	 	 	 	 	 	 
	11

	 	Indemnities
	 	 	40	 
	 
	 	 	 	 	 	 
	12

	 	Unlawfulness and increased costs mitigation
	 	 	40	 
	 
	 	 	 	 	 	 
	13

	 	Security, set-off and miscellaneous
	 	 	42	 
	 
	 	 	 	 	 	 
	14

	 	Accounts
	 	 	44	 
	 
	 	 	 	 	 	 
	15

	 	Assignment, transfer and lending office
	 	 	45	 
	 
	 	 	 	 	 	 
	16

	 	Notices
	 	 	47	 
	 
	 	 	 	 	 	 
	17

	 	Borrowers’ obligations
	 	 	47	 
	 
	 	 	 	 	 	 
	18

	 	Governing law
	 	 	49	 
	 
	 	 	 	 	 	 
	19

	 	Jurisdiction
	 	 	49	 
	 
	 	 	 	 	 	 
	Schedule 1 Form of Drawdown Notice	 	 	 	 
	 
	 	 	 	 	 	 
	Schedule 2 Conditions precedent	 	 	 	 
	 
	 	 	 	 	 	 
	Schedule 3 Form of Compliance Certificate	 	 	 	 
	 
	 	 	 	 	 	 
	Schedule 4 Vessel details	 	 	 	 

2

 

THIS
AGREEMENT is dated 26  October 2010 and made BETWEEN:

	(1)	 	FOLEGANDROS SHIPPING CORPORATION and SERIFOS SHIPPING CORPORATION as Borrowers; and
	 
	(2)	 	EFG EUROBANK ERGASIAS S.A. as Bank.

IT IS AGREED as follows:

	1	 	PURPOSE AND DEFINITIONS
	 
	1.1	 	Purpose
	 
	 	 	This Agreement sets out the terms and conditions upon which the Bank agrees to make
available to the Borrowers a facility of up to USD52,200,000 in 2 Tranches of up to
USD26,100,000 each (each Tranche to be drawn in up to 5 Advances), for the purpose of
part-financing the purchase and construction price of two double hull product tankers which
are to be constructed by the Builder for, and purchased by, the Borrowers.
	 
	1.2	 	Definitions
	 
	 	 	In this Agreement, unless the context otherwise requires:
	 
	 	 	“Advance” means the principal amount of each drawing in respect of the Loan to be made
pursuant to Clause 2.3;
	 
	 	 	“Approved Broker” means each of (i) H Clarkson & Co. Ltd. of St Magnus House, 3 Lower
Thames Street, London EC3R 6HE, England, (ii) Arrow Research Ltd. of Harbour House,
Chelsea Harbour, London SW10 0XE, England and (iii) Fearnleys AS of Grev Wedels Plass 9,
P.O.Box 1158 Sentrum, Oslo N-0107 Norway or such other reputable, independent and first
class firm of shipbrokers specialising in the valuation of vessels of the relevant type
appointed by the Bank and agreed with the Borrowers;
	 
	 	 	“Assignee” is defined in clause 15.3;
	 
	 	 	“Bank” means EFG Eurobank Ergasias S.A., a banking société anonyme duly incorporated under
the laws of Greece, having its registered office at 8 Othonos Street, Athens, Greece,
acting for the purposes of this Agreement through its office at 83 Akti Miaouli & Flessa
Street, 5th floor, 185 38 Piraeus, Greece (or of such other address as may last have been
notified to the Borrowers pursuant to clause 16.2.3);
	 
	 	 	“Banking Day” means a day on which dealings in deposits in USD are carried on in the
London Interbank Eurocurrency Market and a day (other than Saturday or Sunday) on which
banks are open for general business in London, Piraeus and New York City and, in relation
to any payment to be made into or out of China, China (or any other relevant place of
payment under clause 6);
	 
	 	 	“Borrowed Money” means Indebtedness in respect of (i) money borrowed or raised and debit
balances at banks, (ii) any bond, note, loan stock, debenture or similar debt instrument,
(iii) acceptance or documentary credit facilities, (iv) receivables sold or discounted
(otherwise than on a non-recourse basis), (v) deferred payments for assets or services
acquired, (vi) finance leases and hire purchase contracts, (vii) swaps, forward exchange
contracts, futures and other derivatives, (viii) any other transaction (including without
limitation forward sale

3

 

		 	or purchase agreements) having the commercial effect of a borrowing or raising of money or
of any of (ii) to (vii) above and (ix) guarantees in respect of Indebtedness of any person
falling within any of (i) to (viii) above;
	 
	 	 	“Borrowers” means each of Serifos Shipping Corporation (“Serifos”) and Folegandros
Shipping Corporation (“Folegandros”), each of which is incorporated in the Marshall
Islands and has its registered office at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, Marshall Islands, MH96960, and in the plural means both of them;
	 
	 	 	“Borrowers’ Security Documents” means, at any relevant time, such of the Security
Documents as shall have been executed by the Borrowers or either of them;
	 
	 	 	“Break Costs” means the aggregate amount of all losses, premiums, penalties, costs and
expenses whatsoever certified by the Bank at any time and from time to time as having been
incurred by it in maintaining or funding the Loan or in liquidating or re employing fixed
deposits acquired to maintain the same as a result of either:

	 	(a)	 	any repayment or prepayment of the Loan or any part thereof otherwise than
in accordance with, respectively, clause 4.1 or clause 4.3 whether on a voluntary or
involuntary basis or otherwise howsoever or
	 
	 	(b)	 	of the Borrowers failing or being incapable of drawing the Loan after a
Drawdown Notice has been given;

	 	 	“Casualty Amount” means five hundred thousand Dollars (USD500,000) (or the equivalent
in any other currency);
	 
	 	 	“Certified Copy” means in relation to any document delivered or issued by or on behalf of
any company, a copy of such document certified as a true, complete and up to date copy of
the original by any of the directors or officers for the time being of such company or by
such company’s attorneys or solicitors;
	 
	 	 	“Charter Assignment” means a specific assignment of any Extended Employment Contract
required to be executed hereunder by either Owner in favour of the Bank (including any
notices and/or acknowledgements and/or undertakings associated therewith) in such form as
the Bank may require in its sole discretion;
	 
	 	 	“Classification” means, in relation to each Vessel, the highest class available for a
vessel of her type with the relevant Classification Society;
	 
	 	 	“Classification Society” means, in relation to each Vessel, any IACS classification
society which the Bank shall, at the request of the Borrower, have agreed in writing shall
be treated as the classification society in relation to such Vessel for the purposes of
the relevant Ship Security Documents;
	 
	 	 	“Commitment” means, in relation to each Tranche, or, as the context may require, the Loan,
the maximum amount which the Bank has agreed to lend to the Borrowers under clause 2.1 as
reduced by any relevant term of this Agreement;
	 
	 	 	“Compliance Certificate” means a certificate substantially in the form set out in schedule
3 signed by the chief financial officer of the Corporate Guarantor;

4

 

	 	 	“Compulsory Acquisition” means, in respect of a Vessel, requisition for title or other
compulsory acquisition including, if that ship is not released therefrom within the
Relevant Period, capture, appropriation, forfeiture, seizure, detention, deprivation or
confiscation howsoever for any reason (but excluding requisition for use or hire) by or on
behalf of any Government Entity or other competent authority or by pirates, hijackers,
terrorists or similar persons; “Relevant Period” means for the purposes of this definition
of Compulsory Acquisition either (i) ninety (90) days or, (ii) if relevant underwriters
confirm in writing (in terms satisfactory to the Bank) prior to the end of such ninety
(90) day period that such capture, seizure, detention or confiscation will be fully
covered by the relevant Owner’s war risks insurance if continuing for a further period
exceeding ten (10) calendar months, the shorter of twelve (12) months and such period at
the end of which cover is confirmed to attach;
	 
	 	 	“Corporate Guarantee” means the guarantee required to be executed hereunder by the
Corporate Guarantor in such form as the Bank may agree or require ;
	 
	 	 	“Corporate Guarantor” means Navios Maritime Acquisition Corporation, a corporation listed
on NYSE and incorporated in the Marshall Islands and having its registered office at Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960;
	 
	 	 	“Default” means any Event of Default or any event or circumstance which with the giving of
notice or lapse of time or the satisfaction of any other condition (or any combination
thereof) would constitute an Event of Default;
	 
	 	 	“Delivery Date” means, in relation to a Vessel, the date on which title to and possession
of that Vessel is transferred from the Builder to the relevant Borrower, which are
expected to be, in respect of Vessel A, February 2012, and in respect of Vessel B, April
2012;
	 
	 	 	“Dollars” and “USD” mean the lawful currency of the USA and in respect of all payments to
be made under any of the Security Documents means funds which are for same day settlement
in the New York Clearing House Interbank Payments System (or such other US dollar funds as
may at the relevant time be customary for the settlement of international banking
transactions denominated in US dollars);
	 
	 	 	“Drawdown Date” means, in relation to each Advance, any date being a Banking Day falling
during the relevant Drawdown Period, on which the relevant Advance is, or is to be, made
available;
	 
	 	 	“Drawdown Notice” means, in relation to each Advance, a notice substantially in the form
of schedule 1;
	 
	 	 	“Drawdown Period” means the period commencing on the Execution Date and ending on the
earlier of (i) 30 April 2012 and (ii) any date on which the Commitment is finally
cancelled or fully drawn under the terms of this Agreement;
	 
	 	 	“Earnings Account” means, in respect of each Borrower, an interest bearing USD Account
required to be opened hereunder with the Bank in the name of that Borrower designated
“[NAME OF BORROWER] — Earnings Account” and includes any other account designated in
writing by the Bank to be an Earnings Account for the purposes of this Agreement;

5

 

	 	 	“Earnings Account Pledge” means, in respect of each Earnings Account, the pledge required
to be executed hereunder by the relevant Borrower over its Earnings Account in such form
as the Bank may agree or require, and in the plural means all of them;
	 
	 	 	“Encumbrance” means any mortgage, charge, pledge, lien, hypothecation, assignment, title
retention, preferential right, option, trust arrangement or security interest or any other
encumbrance, security or arrangement conferring howsoever a priority of payment in respect
of any obligation of any person;
	 
	 	 	“Environmental Affiliate” means any agent or employee of the Borrower, the Manager or any
other Group Member or any other person having a contractual relationship with the
Borrower, the Manager or any other Group Member in connection with any Relevant Vessel or
its operation or the carriage of cargo and/or passengers thereon and/or the provision of
goods and/or services on or from any Relevant Vessel;
	 
	 	 	“Environmental Approval” means any consent, authorisation, licence or approval of any
governmental or public body or authorities or courts applicable to any Relevant Vessel or
its operation or the carriage of cargo and/or passengers thereon and/or the provision of
goods and/or services on or from any Relevant Vessel required under any Environmental Law;
	 
	 	 	“Environmental Claim” means (i) any claim by, or directive from, any applicable
Government Entity alleging breach of, or non-compliance with, any Environmental Laws or
Environmental Approvals or otherwise howsoever relating to or arising out of an
Environmental Incident or (ii) any claim by any other third party howsoever relating to or
arising out of an Environmental Incident (and, in each such case, “claim” shall include a
claim for damages and/or direction for and/or enforcement relating to clean-up costs,
removal, compliance, remedial action or otherwise) or (iii) any Proceedings arising from
any of the foregoing;
	 
	 	 	“Environmental Incident” means, regardless of cause, (i) any actual or threatened
discharge or release of Environmentally Sensitive Material from any Relevant Vessel; (ii)
any incident in which Environmentally Sensitive Material is discharged or released from a
vessel other than a Relevant Vessel which involves collision between a Relevant Vessel and
such other vessel or some other incident of navigation or operation, in either case, where
the Relevant Vessel, the Manager and/or the relevant Owner and/or the relevant Group
Member and/or the relevant Operator are actually, contingently or allegedly at fault or
otherwise howsoever liable (in whole or in part) or (iii) any incident in which
Environmentally Sensitive Material is discharged or released from a vessel other than a
Relevant Vessel and where such Relevant Vessel is actually or potentially liable to be
arrested as a result and/or where the Manager and/or the relevant Owner and/or other Group
Member and/or the relevant Operator are actually, contingently or allegedly at fault or
otherwise howsoever liable;
	 
	 	 	“Environmental Laws” means all laws, regulations, conventions and agreements whatsoever
relating to pollution, human or wildlife well-being or protection of the environment
(including, without limitation, the United States Oil Pollution Act of 1990 and any
comparable laws of the individual States of the USA);
	 
	 	 	“Environmentally Sensitive Material” means oil, oil products or any other products or
substance which are polluting, toxic or hazardous or any substance the release of which
into the environment is howsoever regulated, prohibited or penalised by or pursuant to any
Environmental Law;

6

 

	 	 	“Event of Default” means any of the events or circumstances listed in clause
10.1;
	 
	 	 	“Execution Date” means the date on which this Agreement has been executed by all the
parties hereto;
	 
	 	 	“Extended Employment Contract” means, in respect of a Mortgaged Vessel, any time
charterparty, contract of affreightment or other contract of employment of such ship
(including the entry of either Vessel in any pool) which has a tenor of not less than
twelve (12) months (including any options to renew or extend such tenor);
	 
	 	 	“Facility Period” means the period starting on the first Drawdown Date and ending on such
date as all obligations whatsoever of all of the Security Parties under or pursuant to the
Security Documents whensoever arising, actual or contingent, have been irrevocably paid,
performed and/or complied with;
	 
	 	 	“Flag State” means the Republic of Panama or such other state or territory agreed by the
Bank, at the request of the Borrowers, as the “Flag State” of the Vessels for the purposes
of the Security Documents;
	 
	 	 	“General Assignment” means, in respect of each Vessel, the deed of assignment of its
earnings, insurances and requisition compensation executed or to be executed by the
relevant Owner in favour of the Bank in such form as the Bank may require in its sole
discretion, and in the plural means both of them;
	 
	 	 	“Government Entity” means any national or local government body, tribunal, court or
regulatory or other agency and any organisation of which such body, tribunal, court or
agency is a part or to which it is subject;
	 
	 	 	“Group” means the Corporate Guarantor and its subsidiaries but excluding any company which
is publicly listed;
	 
	 	 	“Group Member” means any member of the Group;
	 
	 	 	“IACS” means the International Association of Classification Societies;
	 
	 	 	“Indebtedness” means any obligation howsoever arising (whether present or future, actual
or contingent, secured or unsecured as principal, surety or otherwise) for the payment or
repayment of money;
	 
	 	 	“Interest Payment Date” means, in relation to each Tranche, the last day of an Interest
Period and, if an Interest Period is longer than 3 months, the date falling at the end of
each successive period of 3 months during such Interest Period starting from its
commencement;
	 
	 	 	“Interest Period” means each period for the calculation of interest in respect of the Loan
or, as the case may be, Tranche ascertained in accordance with the provisions of clause 3;
	 
	 	 	“ISM Code” means in relation to its application to the Borrowers, the Vessels and their
operation:

	 	(a)	 	‘The International Management Code for the Safe Operation of Ships and for
Pollution Prevention’, currently known or referred to as the ‘ISM Code’, adopted by
the Assembly of the International Maritime Organisation by Resolution A.741(18) on

7

 

	 	 	 	4 December 1993 and incorporated on 19 May 1994 into Chapter IX of the
International Convention for Safety of Life at Sea 1974 (SOLAS 1974); and
	 
	 	(b)	 	all further resolutions, circulars, codes, guidelines, regulations and
recommendations which are now or in the future issued by or on behalf of the
International Maritime Organisation or any other entity with responsibility for
implementing the ISM Code, including, without limitation, the ‘Guidelines on
implementation or administering of the International Safety Management (ISM) Code by
Administrations’ produced by the International Maritime Organisation pursuant to
Resolution A.788(19) adopted on 25 December 1995,

	 	 	as the same may be amended, supplemented or replaced from time to time;
	 
	 	 	“ISM Code Documentation” means, in relation to each Vessel, the document of compliance
(DOC) and safety management certificate (SMC) issued by a Classification Society pursuant
to the ISM Code in relation to such Vessel within the periods specified by the ISM Code;
	 
	 	 	“ISM SMS” means the safety management system which is required to be developed,
implemented and maintained under the ISM Code;
	 
	 	 	“ISPS Code” means the International Ship and Port Security Code of the International
Maritime Organisation and includes any amendments or extensions thereto and any
regulations issued pursuant thereto;
	 
	 	 	“ISSC” means an International Ship Security Certificate issued in respect of a Vessel
pursuant to the ISPS Code;
	 
	 	 	“Latest Accounts” means, in respect of any financial half-year or year of the Group, the
latest unaudited (in respect of each financial half-year) or audited (in respect of each
financial year) financial statements required to be prepared pursuant to clause 8.1.6;
	 
	 	 	“LIBOR” means, for an Interest Period, the greater of:

	 	(a)	 	the rate equal to the offered quotation for deposits in USD in an amount
comparable with the amount in relation to which LIBOR is to be determined for a
period equal to, or as near as possible equal to, the relevant period which appears
on Reuters BBA Page LIBOR 01 at or about 11 a.m. on the second Banking Day before the
first day of such period (and, for the purposes of this Agreement, “Reuters BBA Page
LIBOR 01” means the display designated as “Reuters BBA Page LIBOR 01” on the Reuters
Service or such other page as may replace LIBOR01 on that service for the purpose of
displaying rates comparable to that rate or on such other service as may be nominated
by the British Bankers’ Association as the information vendor for the purpose of
displaying the British Bankers’ Association Interest Settlement Rates for USD) and
	 
	 	(b)	 	the rate determined by the Bank to be that at which deposits in USD and in
an amount comparable with the amount in relation to which LIBOR is to be determined
and for a period equal to the relevant period were being offered by the Bank to prime
banks in the London Interbank Market at or about 11 a.m. on the second Banking Day
before the first day of such period;

	 	 	“Liquidity” means the aggregate of all cash deposits legally and beneficially owned by any
Group Member which:

8

 

	 	(a)	 	are free from any Encumbrance other than, in respect of any deposit with
the Bank, any Encumbrance given as security for the obligations of the Borrowers
under this Agreement; and
	 
	 	(b)	 	are otherwise at the free and unrestricted disposal of the relevant Group
Member by which it is owned;

	 	 	“Loan” means the principal amount borrowed by the Borrowers under this Agreement or (as
the context may require) the principal amount owing to the Bank under this Agreement at
any relevant time;
	 
	 	 	“MII & MAP Policy” means a mortgagee’s interest and (if required by the Bank) pollution
risks insurance policy (including additional perils (pollution) cover) in respect of each
Mortgaged Vessel to be effected by the Bank to cover the Mortgaged Vessels as the same may
be renewed or replaced annually thereafter and maintained throughout the Facility Period
through such brokers, with such underwriters and containing such coverage as may be
acceptable to the Bank in its sole discretion, insuring a sum of at least one hundred and
twenty per cent (120%) of the Loan;
	 
	 	 	“Material Adverse Effect” means any event or occurrence which the Bank reasonably
determines has had or could reasonably be expected to have a material adverse effect on
(i) the Bank’s rights under, or the security provided by, any Security Document, (ii) the
ability of any Security Party to perform or comply with any of its obligations under any
Security Document or (iii) the value or nature of the property, assets, operations,
liabilities or financial condition of any Security Party;
	 
	 	 	“Management Agreement” means, in respect of each Vessel, the agreement between the
relevant Owner and the Manager in a form previously approved in writing by the Bank;
	 
	 	 	“Manager” means Navios Tankers Management Inc., a company incorporated in the Marshall
Islands and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, Marshall Islands, MH96960 or any other person appointed by an Owner, with
the prior written consent of the Bank, as the manager of the relevant Mortgaged Vessel;
	 
	 	 	“Manager’s Undertakings” means, collectively, the undertakings and assignments required to
be executed hereunder by the Manager in favour of the Bank in respect of each of the
Vessels each in such form as the Bank may require in its sole discretion (and “Managers’
Undertakings” means all of them);
	 
	 	 	“Margin” means, in respect of each Tranche, (i) prior to the Delivery Date in respect of
the Vessel being financed by that Tranche, 2.50 per cent per annum and (ii) thereafter
2.75 per cent per annum;
	 
	 	 	“month” means a period beginning in one calendar month and ending in the next calendar
month on the day numerically corresponding to the day of the calendar month on which it
started, provided that (i) if the period started on the last Banking Day in a calendar
month or if there is no such numerically corresponding day, it shall end on the last
Banking Day in the such next calendar month and (ii) if such numerically corresponding day
is not a Banking Day, the period shall end on the next following Banking Day in the same
calendar month but if there is no such Banking Day it shall end on the preceding Banking
Day and “months” and “monthly” shall be construed accordingly;

9

 

	 	 	“Mortgage” means, in relation to each Vessel, the first preferred mortgage of such Vessel
required to be executed hereunder by the Borrower which is the owner thereof in such form
as the Bank may agree or require, and in the plural means both of them;
	 	 	“Mortgaged Vessel” means, at any relevant time, a Vessel which is at such time subject to
a Mortgage and/or the Earnings, Insurances and Requisition Compensation (each such term as
defined in the relevant Ship Security Documents) of which are subject to an Encumbrance
pursuant to the relevant Ship Security Documents and a Vessel shall, for the purposes of
this Agreement, be regarded as a Mortgaged Vessel as from whichever shall be the earlier
of (a) her Delivery Date and (b) the date on which the Mortgage of that Vessel has been
executed and registered in accordance with this Agreement until whichever shall be the
earlier of (i) the payment in full of the amount required to be paid to the Bank pursuant
to clause 4.3 or 4.4 following the Total Loss or sale respectively of such Vessel and (ii)
the end of the Facility Period
	 
	 	 	“Net Profit” means for each financial year of the Corporate Guarantor, the Net Profit as
set out in the relevant Latest Accounts;
	 
	 	 	“Net Worth” means by reference to the Latest Accounts, the Total Assets (based on book
values) less Total Liabilities of the Group;
	 
	 	 	“NMH” means Navios Maritime Holdings Inc., a corporation listed on NYSE and
incorporated in the Marshall Islands and having its registered office at Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960;
	 
	 	 	“NYSE” means the stock exchange run by NYSE Euronext with the main exchange located in the
United States of America, originally an acronym for the New York Stock Exchange;
	 
	 	 	“Operator” means any person who is from time to time during the Facility Period concerned
in the operation of a Relevant Vessel and falls within the definition of “Company” set out
in rule 1.1.2 of the ISM Code;
	 
	 	 	“Owner” means, in relation to Vessel A, Folegandros and in relation to Vessel B, Serifos,
and in the plural means both of them;
	 
	 	 	“Permitted Encumbrance” means any Encumbrance created pursuant to or expressly permitted
by the Security Documents and Permitted Liens or otherwise permitted by the Bank;
	 
	 	 	“Permitted Liens” means any lien on a Vessel for master’s, officer’s or crew’s wages
outstanding in the ordinary course of trading, any lien for salvage and any ship
repairer’s or outfitter’s possessory lien for a sum not (except with the prior written
consent of the Bank) exceeding the Casualty Amount (as defined in the relevant Mortgage);
	 
	 	 	“Pertinent Jurisdiction” means any jurisdiction in which or where any Security Party is
incorporated, resident, domiciled, has a permanent establishment or assets, carries on, or
has a place of business or is otherwise howsoever effectively connected;
	 
	 	 	“Predelivery Security Assignment” means, in respect of each Vessel, a deed of assignment
of the Shipbuilding Contract and of the Refund Guarantee in respect thereof in such form
as the Bank may agree or require and in the plural means both of them;

10

 

	 	 	“Proceedings” means any litigation, arbitration, legal action or complaint or judicial,
quasi-judicial or administrative proceedings whatsoever arising or instigated by anyone in
any court, tribunal, public office or other forum whatsoever and wheresoever (including,
without limitation, any action for provisional or permanent attachment of any thing or for
injunctive remedies or interim relief and any action instigated on an ex parte basis);
	 
	 	 	“Receiving Bank” means Deutsche Bank Trust Company Americas, New York, USA or such other
bank as may from time to time be notified by the Bank to the Borrowers;
	 
	 	 	“Refund Guarantee” means each of the Vessel A Refund Guarantee and the Vessel B Refund
Guarantee and in the plural means both of them;
	 
	 	 	“Refund Guarantor” means each of the Vessel A Refund Guarantor and the Vessel B Refund
Guarantor and in the plural means both of them;
	 
	 	 	“Registry” means, in relation to each Vessel, the office of the registrar, commissioner or
representative of the Flag State, who is duly empowered to register such Vessel, the
relevant Owner’s title thereto and the relevant Mortgage under the laws and flag of the
Flag State;
	 
	 	 	“Relevant Tranche” means, in respect of Vessel A, Tranche A, and in respect of Vessel B,
Tranche B;
	 
	 	 	“Repayment Dates” means, in respect of each Tranche, subject to clause 6.3, each of
the dates falling at quarterly intervals after the Drawdown Date in respect of the Advance
referred to in Clause 2.3.(e) in respect of such Tranche, up to and including the date
falling 96 months after such Drawdown Date;
	 
	 	 	“Required Authorisation” means any authorisation, consent, declaration, licence, permit,
exemption, approval or other document, whether imposed by or arising in connection with
any law, regulation, custom, contract, security or otherwise howsoever which must be
obtained at any time from any person, Government Entity or central bank or other
self-regulating or supra-national authority in order to enable the Borrowers lawfully to
draw the Loan and/or to enable any Security Party lawfully and continuously to continue
its corporate existence and/or perform all its obligations whatsoever whensoever arising
and/or grant security under the relevant Security Documents and/or to ensure the
continuous validity and enforceability thereof;
	 
	 	 	“Required Security Amount” means the amount in USD (as certified by the Bank) which is at
any relevant time 125% of the Loan;
	 
	 	 	“Retention Account” means, an interest bearing USD account in the name of the Borrowers
opened or (as the context may require) to be opened by the Borrowers with the Bank and
includes any sub-accounts thereof and any other account designated in writing by the Bank
to be the Retention Account for the purposes of this Agreement;
	 
	 	 	“Retention Account Pledge” means the pledge required to be executed hereunder by the
Borrowers over the Retention Account in such form as the Bank may agree or require;;
	 
	 	 	“Retention Amount” means, in relation to any Retention Date and each Tranche, such sum as
shall be the aggregate of:

	 	(c)	 	one-third (1/3rd) of the repayment instalment in respect of the relevant
Tranche falling due for payment pursuant to clause 4.1 (as the same may have been
reduced

11

 

	 	 	 	by any prepayment) on the next Repayment Date in respect of such Tranche after
the relevant Retention Date; and
	 
	 	(d)	 	the applicable fraction (as hereinafter defined) of the aggregate amount of
interest falling due for payment in respect of each part of the relevant Tranche
during and at the end of each Interest Period in respect thereof current at the
relevant Retention Date and, for this purpose, the expression “applicable fraction”
in relation to each Interest Period shall mean a fraction having a numerator of one
and a denominator equal to the number of Retention Dates falling within the relevant
Interest Period;

	 	 	“Retention Dates” means, in relation to each Tranche, the date falling thirty (30) days
after the Delivery Date in respect of the Vessel in respect of which such Tranche was made
available, and each of the dates falling at monthly intervals after such date and prior to
the final Repayment Date;
	 
	 	 	“Security Documents” means this Agreement, the Predelivery Security Assignments, the
Mortgages, the General Assignments, the Charter Assignments, the Earnings Account Pledges,
the Retention Account Pledge, the Corporate Guarantee, the Manager’s Undertakings and any
other documents as may have been or shall from time to time after the date of this
Agreement be executed in favour of the Bank to guarantee and/or to govern and/or to secure
payment of all or any part of the Loan, interest thereon and other moneys from time to
time owing by the Borrowers pursuant to this Agreement (whether or not any such document
also guarantees and/or secures moneys from time to time owing pursuant to any other
document or agreement);
	 
	 	 	“Security Party” means the Borrowers, the Corporate Guarantor, the Manager or any other
person who may at any time be a party to any of the Security Documents (other than the
Bank);
	 
	 	 	“Security Value” means the amount in USD (as certified by the Bank) which, at any relevant
time, is the aggregate of (i) the Valuation Amounts of the Vessels as most recently
determined in clause 8.2.2 and (ii) the market value of any additional security (or, in
the case of cash Dollars, its face value) the at that time held by the Bank and provided
under clause 8.2.1 or otherwise;
	 
	 	 	“Seller” means in relation to Vessel A, the Vessel A Seller, and to Vessel B, the Vessel B
Seller;
	 
	 	 	“Shareholder” means, Aegean Sea Maritime Holdings Inc., a company incorporated in the
Marshall Islands and having its registered office at Trust Company Complex, Ajeltake Road,
Ajeltake Island, Majuro, Marshall Islands, MH96960;
	 
	 	 	“Ship Security Documents” means in relation to each Vessel, the Mortgage, the General
Assignment, any Charter Assignment and the Manager’s Undertaking in respect of such
Vessel;
	 
	 	 	“Shipbuilding Contract” means each of the Vessel A Shipbuilding Contract and the Vessel B
Shipbuilding Contract and in the plural means both of them;
	 
	 	 	“subsidiary” of a person means any company or entity directly or indirectly controlled by
such person, and for this purpose “control” means either the ownership of more than fifty
per cent (50%) of the voting share capital (or equivalent rights of ownership) of such
company or entity or the power to direct its policies and management, whether by contract
or otherwise;

12

 

	 	 	“Taxes” includes all present and future income, corporation, capital or value-added taxes
and all stamp and other taxes and levies, imposts, deductions, duties, charges and
withholdings whatsoever together with interest thereon and penalties in respect thereto,
if any, and charges, fees or other amounts made on or in respect thereof (and “Taxation”
shall be construed accordingly);
	 
	 	 	“Total Assets” and “Total Liabilities” mean, respectively, the total assets and total
liabilities of the Group as evidenced at any relevant time by the Latest Accounts, in
which they shall have been calculated by reference to the meanings assigned to them in
accordance with US GAAP provided that cash shall be deducted from Total Assets and Total
Liabilities;
	 
	 	 	“Total Loss” means, in respect of each Vessel:

	 	(e)	 	actual, constructive, compromised, agreed or arranged total loss of such
Vessel; or
	 
	 	(f)	 	Compulsory Acquistion; or
	 
	 	(g)	 	any hijacking, theft, condemnation, capture, seizure, arrest, detention or
confiscation of such Vessel not falling within the definition of Compulsory
Acquisition by any Government Entity, or by persons allegedly acting or purporting
to act on behalf of any Government Entity, unless such Vessel be released and
restored to the relevant Owner within ninety (90) days after such incident;

	 	 	“Tranche A” means the amount of up to USD26,100,000, being the aggregate of all of the
Advances to be made available by the Bank to the Borrowers to assist Folegandros in its
acquisition of Vessel A;
	 
	 	 	“Tranche B” means the amount of up to USD26,100,000, being the aggregate of all of the
Advances to be made available by the Bank to the Borrowers to assist Serifos in its
acquisition of Vessel B; and
	 
	 	 	“Tranche” means either of Tranche A or Tranche B and in the plural means both of them
	 
	 	 	“Transactions” means together (i) a private offering of US$400,000,000 First Priority Ship
Mortgage Notes due in 2017 (the “Notes”) issued by the Corporate Guarantor and Navios
Acquisition Finance (US) Inc. (together, the “Issuers”) and (ii) an exchange offer for,
and related public issuance of notes in exchange for, the Notes that the Issuers are
required to execute and issue pursuant to the Indenture and a Registration Rights
Agreement relating to the Notes;
	 
	 	 	“Transferee” is defined in clause 15.4; and
	 
	 	 	“U.S.” means the United States of America;
	 
	 	 	“Unlawfulness” means any event or circumstance which either is or, as the case may be,
might in the reasonable opinion of the Bank become the subject of a notification by the
Bank to the Borrowers under clause 12.1; and
	 
	 	 	“Underlying Documents” means, together, the Vessel Purchase Agreements, the Shipbuilding
Contracts, the Refund Guarantees, any Extended Employment Contracts and the Management
Agreements ;

13

 

	 	 	“Valuation Amount” means, in respect of each Mortgaged Vessel, the value thereof as most
recently determined under clause 8.2.2;
	 
	 	 	“Vessel” means each of Vessel A and Vessel B and in the plural means both of them; and
	 
	 	 	“Vessel Purchase Agreement” means each of the Vessel A Purchase Agreement and the Vessel
B Purchase Agreement and in the plural means both of them.
	 
	 	 	Words and expressions defined in Schedule 4 (Vessel Details) shall have the meanings given
to them therein as if the same were set out in full in this clause 1.2.

	1.3	 	Construction
	 
	 	 	In this Agreement, unless the context otherwise requires:
	 
	1.3.1	 	clause headings and the index are inserted for convenience of reference only and shall be
ignored in the construction of this Agreement;
	 
	1.3.2	 	references to clauses and schedules are to be construed as references to clauses of, and
schedules to, this Agreement and references to this Agreement include its schedules;
	 
	1.3.3	 	references to (or to any specified provision of) this Agreement or any other document shall
be construed as references to this Agreement, that provision or that document as in force for
the time being and as duly amended and/or supplemented and/or novated;
	 
	1.3.4	 	references to a “regulation” include any present or future regulation, rule, directive,
requirement, request or guideline (whether or not having the force of law) of any Government
Entity, central bank or any self-regulatory or other supra-national authority;
	 
	1.3.5	 	references to any person in or party to this Agreement shall include reference to such
person’s lawful successors and assigns and references to the Bank shall also include a
Transferee;
	 
	1.3.6	 	words importing the plural shall include the singular and vice versa;
	 
	1.3.7	 	references to a time of day are, unless otherwise stated, to London time;
	 
	1.3.8	 	references to a person shall be construed as references to an individual, firm, company,
corporation or unincorporated body of persons or any Government Entity;
	 
	1.3.9	 	references to a “guarantee” include references to an indemnity or any other kind of
assurance whatsoever (including, without limitation, any kind of negotiable instrument, bill
or note) against financial loss or other liability including, without limitation, an
obligation to purchase assets or services as a consequence of a default by any other person to
pay any Indebtedness and “guaranteed” shall be construed accordingly;
	 
	1.3.10	 	references to any statute or other legislative provision are to be construed as references
to any such statute or other legislative provision as the same may be re enacted or modified
or substituted by any subsequent statute or legislative provision (whether before or after the
date hereof) and shall include any regulations, orders, instruments or other subordinate
legislation issued or made under such statute or legislative provision;

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	1.3.11	 	a certificate by the Bank as to any amount due or calculation made or any matter whatsoever
determined in connection with this Agreement shall be conclusive and binding on the Borrowers
except for manifest error;
	 
	1.3.12	 	if any document, term or other matter or thing is required to be approved, agreed or
consented to by the Bank such approval, agreement or consent must be obtained in writing
unless the contrary is stated;
	 
	1.3.13	 	time shall be of the essence in respect of all obligations whatsoever of the Borrowers under
this Agreement, howsoever and whensoever arising; and
	 
	1.3.14	 	the words “other” and “otherwise” shall not be construed eiusdem generis with any foregoing
words where a wider construction is possible.
	 
	1.4	 	Accounting Terms and references to currencies
	 
	 	 	All accounting terms not otherwise defined in this Agreement shall have the meanings
assigned to them in accordance with generally accepted international accounting principles
(or such other accounting principles as the Bank deems appropriate).
	 
	1.5	 	Contracts (Rights of Third Parties Act) 1999
	 
	 	 	Except for clause 18.6.4 no part of this Agreement shall be enforceable under the
Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this
Agreement.
	 
	2	 	THE BANK’S COMMITMENT, ADVANCE AND USE OF PROCEEDS
	 
	2.1	 	The Commitment
	 
	 	 	In reliance upon each of the representations and warranties in clause 7, the Bank agrees
to pay to the Builder by way of loan to the Borrowers on the terms of this Agreement the
principal sum of up to USD52,200,000 in two equal Tranches of up to USD26,100,000 each in
up to five Advances.
	 
	2.2	 	Advance
	 
	 	 	On the terms and subject to the conditions of this Agreement, each Tranche shall be
advanced in up to five (5) Advances on the relevant Drawdown Dates following receipt by
the Bank from the Borrowers of Drawdown Notices not later than 10 a.m. on the second
Banking Day before each proposed Drawdown Date. A Drawdown Notice shall be effective on
actual receipt by the Bank and, once given, shall, subject as provided in clause 3.6.1, be
irrevocable.
	 
	2.3	 	Amount
	 
	 	 	The principal amount specified in each Drawdown Notice for borrowing on the Drawdown Dates
shall, subject to the terms of this Agreement, in respect of each Tranche, not exceed:

	 	(a)	 	USD6,300,000 in respect of the amount payable by the relevant Borrower to
finance the amount paid by the relevant Borrower to the relevant Seller under the
relevant Vessel Purchase Agreement and/or the relevant Novation Agreement;
	 
	 	(b)	 	USD5,100,000 in respect of the instalment payable under the relevant
Shipbuilding Contract to the Builder on or before 29 October 2010;

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	 	(c)	 	USD2,400,000 to the Builder under the relevant Shipbuilding Contract in
respect of the keel-laying instalment;
	 
	 	(d)	 	USD6,600,000 to the Builder under the relevant Shipbuilding Contract in
respect of the load-out instalment; and
	 
	 	(e)	 	the lesser of (i) USD5,700,000 and (ii) such amount as when added to the
already drawn Advances in respect of that Tranche will be 60% of the Valuation Amount
of relevant Vessel as at her Delivery Date.

	2.4	 	Availability
	 
	 	 	Upon receipt of a Drawdown Notice complying with the terms of this Agreement the Bank
shall, subject to the provisions of clause 9, make each Advance available to the Borrowers
on the relevant Drawdown Date in accordance with clause 2.2. The Borrowers acknowledge
that payment of each Advance to the Builder in accordance with clause 2.2 shall satisfy
the obligation of the Bank to lend that part of the Commitment to the Borrowers under this
Agreement.
	 
	2.5	 	Cancellation
	 
	 	 	If any part of the Loan is not drawn down by the end of the Drawdown Period, the
Commitment shall thereupon be automatically cancelled and the Bank shall have no further
obligation under this Agreement.
	 
	2.6	 	Use of Proceeds
	 
	 	 	Without prejudice to the Borrowers’ obligations under clause 8.1.4, the Bank shall have no
responsibility for the Borrowers’ use of the proceeds of the Loan.
	 
	3	 	INTEREST AND INTEREST PERIODS
	 
	3.1	 	Normal interest rate
	 
	 	 	The Borrowers agree to pay interest on each Tranche in respect of each Interest Period
relating thereto on each Interest Payment Date (or, in the case of Interest Periods of
more than three (3) months, by instalments, the first three (3) months from the
commencement of the Interest Period and the subsequent instalments at intervals of three
(3) months) at the rate per annum determined by the Bank to be the aggregate of (a) the
Margin and (b) LIBOR for such period.
	 
	3.2	 	Selection of Interest Periods
	 
	 	 	The Borrowers may by notice received by the Bank not later than 10 a.m. on the second
Banking Day before the start of each Interest Period request that such Interest Period
shall have a length of one (1), three (3) or six (6) months or such other period as the
Borrowers may select and the Bank may, subject to the same being available in the London
Interbank Market, agree.
	 
	3.3	 	Determination of Interest Periods
	 
	 	 	The length of each Interest Period shall be as requested by the Borrowers under clause 3.2
but so that:

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	3.3.1	 	the first Interest Period in respect of each Tranche shall start on the Drawdown Date in
respect of the first Advance in respect of that Tranche, and each subsequent Interest Period
shall start on the last day of the previous Interest Period;
	 
	3.3.2	 	the first Interest Period in respect of each subsequent Advance shall commence on its
Drawdown Date and terminate simultaneously with the Interest Period which is then current for
the Tranche under which the Advance is made available;
	 
	3.3.3	 	if any Interest Period would otherwise overrun a Repayment Date, then, in the case of the
last Repayment Date, such Interest Period shall end on such Repayment Date, and in the case of
any other Repayment Date the relevant Tranche shall be divided into parts so that there is one
part in the amount of the repayment instalment due on each Repayment Date falling in that
Interest Period and having an Interest Period ending on the relevant Repayment Date and
another part consisting of the balance of the relevant Tranche having an Interest Period
ascertained in accordance with the other provisions of this clause 3; and
	 
	3.3.4	 	if the Borrowers fail to specify the length of an Interest Period in accordance with the
provisions of clause 3.2 and this clause 3.3 such Interest Period shall last three months or
such other period as complies with this clause 3.3.
	 
	3.4	 	Default interest
	 
	 	 	If the Bank fails to receive any sum whatsoever on its due date for payment under any of
the Security Documents, the Borrowers must pay interest on such sum on demand from the due
date up to the date of actual payment (as well after as before judgment) at a rate
determined by the Bank under this clause 3.4. The period starting on such due date and
ending on such date of payment shall be divided into successive periods of not more than
three (3) months as selected by the Bank each of which (other than the first, which shall
start on such due date) shall start on the last day of the preceding such period. The
rate of interest applicable to each such period shall be the aggregate (as determined by
the Bank) of (a) two and a half (2.5) per cent per annum, (b) the Margin and (c) LIBOR for
such period. Such interest shall be due and payable on the last day of each such period
as determined by the Bank and each such day shall be treated as an Interest Payment Date,
provided that if such unpaid sum is an amount of principal which became due and payable,
by reason of a declaration by the Bank under clause 10.2 or a prepayment pursuant to
clauses 4.3, 4.4, 8.2 or 12.1, on a date other than an Interest Payment Date relating
thereto, the first such period selected by the Bank shall be of a length equal to the
period between the due date of such principal sum and such Interest Payment Date and
interest shall be payable on such principal sum during such period at a rate of two and a
half (2.5) per cent above the rate applicable immediately before it shall have become so
due and payable. If, for the reasons specified in clause 3.6.1, the Bank is unable to
determine a rate in accordance with the provisions of this clause 3.4, interest on any sum
not paid on its due date for payment shall be calculated at a rate determined by the Bank
to be two and a half (2.5) per cent per annum above the aggregate of the Margin and the
cost of funds to the Bank compounded at such intervals as the Bank selects.
	 
	3.5	 	Notification of Interest Periods and interest rate
	 
	 	 	The Bank agrees to notify the Borrowers promptly of the length of each Interest Period and
of each rate of interest determined by it under this clause 3.
	 
	3.6	 	Market disruption; non-availability

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	3.6.1	 	Whenever, at any time prior to the start of any Interest Period, the Bank determines:

	 	(a)	 	that adequate and fair means do not exist for determining LIBOR during such
Interest Period; or
	 
	 	(b)	 	that deposits in USD are not available to the Bank in the London Interbank
Market in its ordinary course of business in sufficient amounts to fund the Loan for
such Interest Period;

	 	 	the Bank shall promptly give notice (a “Determination Notice”) thereof to the Borrowers.
A Determination Notice shall give brief details of the circumstances giving rise to its
issue. After the giving of any Determination Notice any undrawn amount of the Commitment
may not be borrowed until notice to the contrary is given to the Borrowers by the Bank;
	 
	3.6.2	 	upon a Determination Notice being given, the Borrower and the Bank shall discuss the same in
order to agree an alternative basis for maintaining the Loan, but if they are unable to agree
an alternative basis within 30 days of the date of the Determination Notice, then 40 days
after the Determination Notice being given, the Bank shall certify an alternative basis (such
basis, or if agreed, the basis agreed by the Bank and the Borrower, the “Substitute Basis”)
for maintaining the Loan. The Substitute Basis may include alternative interest periods,
alternative currencies or alternative rates of interest but must include a margin above the
cost of funds to the Bank equivalent to the Margin. Each Substitute Basis certified to the
Borrowers or agreed shall take effect in accordance with its terms from the date specified in
the Determination Notice until such time as the Bank notifies the Borrowers that none of the
circumstances specified in clause 3.6.1 continues to exist whereupon the normal interest rate
fixing provisions of this Agreement shall again apply. If the Borrower does not agree with
any Substitute Basis certified by the Bank if there is no agreement between the parties, then
the Borrower may prepay the Loan or the relevant part thereof, and the terms of Clause 4.5 and
4.6 shall apply to any such prepayment
	 
	4	 	REPAYMENT AND PREPAYMENT
	 
	4.1	 	Repayment
	 
	 	 	Subject as otherwise provided in this Agreement, the Borrowers must repay each Tranche by
32 equal quarterly instalments of USD345,000 each, one such instalment to be repaid on
each of the Repayment Dates and a balloon instalment of USD15,060,000 to be repaid on the
relevant final Repayment Date.
	 
	 	 	If the Commitment in respect of either Tranche is not drawn in full, the amount of each
repayment instalment including the said balloon instalment for that Tranche shall be
reduced proportionately.
	 
	4.2	 	Voluntary prepayment
	 
	 	 	The Borrowers may prepay the Loan in whole or part (being USD500,000 or any larger sum
which is a whole multiple of USD500,000) on any Interest Payment Date relating to the part
of the Loan to be repaid without premium or penalty.
	 
	4.3	 	Mandatory Prepayment on Total Loss
	 
	 	 	On the date falling ninety (90) days after that on which a Mortgaged Vessel became a Total
Loss or, if earlier, on the date upon which the relevant insurance proceeds are, or
Requisition

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	 	 	Compensation (as defined in the Mortgage for such Vessel) is, received by the relevant
Borrower (or the Bank pursuant to the Security Documents), the Borrowers must prepay the
Relevant Proportion of the Loan.
	 
	4.3.1	 	Interpretation
	 
	 	 	For the purpose of this Agreement, a Total Loss shall be deemed to have occurred:

	 	(a)	 	in the case of an actual total loss of a Vessel, on the actual date and at
the time such Vessel was lost or, if such date is not known, on the date on which
such Vessel was last reported;
	 
	 	(b)	 	in the case of a constructive total loss of a Vessel, upon the date and at
the time notice of abandonment of the ship is given to the then insurers of such
Vessel (provided a claim for total loss is admitted by such insurers) or, if such
insurers do not immediately admit such a claim, at the date and at the time at which
either a total loss is subsequently admitted by such insurers or a total loss is
subsequently adjudged by a competent court of law or arbitration tribunal to have
occurred;
	 
	 	(c)	 	in the case of a compromised or arranged total loss of a Vessel, on the
date upon which a binding agreement as to such compromised or arranged total loss has
been entered into by the then insurers of such Vessel;
	 
	 	(d)	 	in the case of Compulsory Acquisition, on the date upon which the relevant
requisition of title or other compulsory acquisition occurs; and
	 
	 	(e)	 	in the case of hijacking, theft, condemnation, capture, seizure, arrest,
detention or confiscation of a Vessel (other than within the definition of Compulsory
Acquisition) by any Government Entity, or by persons allegedly acting or purporting
to act on behalf of any Government Entity, which deprives an Owner of the use of such
Vessel for more than ninety (90) days, upon the expiry of the Relevant Period where
“Relevant Period” means, for the purposes of this clause 4.3.1(e), either (i) the
period of ninety (90) days after the date upon which the relevant incident occurred
or, (ii) if relevant underwriters confirm in writing (in customary terms) prior to
the end of such ninety (90) day period that such capture, seizure, detention or
confiscation will be covered by the relevant Owner’s war risks insurance if
continuing for a further period exceeding ten (10) calendar months, the shorter of
twelve (12) months and such period at the end of which cover is confirmed to attach.

	4.4	 	Mandatory prepayment on sale of Mortgaged Vessel
	 
	 	 	On the date of completion of the sale of any Mortgaged Vessel the Borrowers must prepay
the Relevant Proportion of the Loan.
	 
	4.5	 	Interpretation
	 
	 	 	In clauses 4.3 and 4.4:

	 	(a)	 	“Relevant Vessel” means the Vessel which is sold or becomes a Total Loss;
	 
	 	(b)	 	“Relevant Tranche” means the Tranche which has been made available
hereunder to finance the acquisition of the Relevant Vessel; and

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	 	(c)	 	“Relevant Proportion” means the higher of (a) the Relevant Tranche and (b)
such amount of the Loan as will be required to be prepaid so that the Valuation
Amount of the Vessel remaining subject to a Mortgage after such prepayment is at
least 140% of the Loan after such prepayment.

	4.6	 	Amounts payable on prepayment
	 
	 	 	Any prepayment of all or part of the Loan under this Agreement shall be made together with:
	 
	4.6.1	 	accrued interest on the amount of the Loan to the date of such prepayment;
	 
	4.6.2	 	any additional amount payable under clauses 6.6 or 11.2; and
	 
	4.6.3	 	all other sums payable by the Borrowers to the Bank under this Agreement or any of the other
Security Documents including, without limitation, any accrued commitment commission payable
under clause 5.1 and any Break Costs.
	 
	4.7	 	Notice of prepayment; reduction of repayment instalments
	 
	4.7.1	 	No prepayment may be effected under clause 4.2 unless the Borrowers shall have given the
Bank at least fifteen (15) days’ prior written notice of their intention to make such
prepayment. Every notice of prepayment shall be effective only on actual receipt by the Bank,
shall be irrevocable, shall specify the amount to be prepaid and shall oblige the Borrowers to
make such prepayment on the date specified.
	 
	4.7.2	 	Any amounts prepaid pursuant to clause 4.2 shall be applied against the Loan pro rata
between the Tranches in reducing the Balloon Instalments and thereafter the repayment
instalments of each Tranche pro rata.
	 
	4.7.3	 	Any amounts prepaid pursuant to clauses 4.3 and 4.4 shall be applied fully against the
Relevant Tranche and thereafter shall be applied pro rata against the repayment instalments of
the remaining Tranche which are at that time outstanding (including the Balloon Instalment).
	 
	4.7.4	 	The Borrowers may not prepay any part of the Loan except as expressly provided in this Agreement.
	 
	4.7.5	 	No amount prepaid may be reborrowed.
	 
	5	 	COMMITMENT COMMISSION, FEES AND EXPENSES
	 
	5.1	 	Fees
	 
	 	 	The Borrowers agree to pay to the Bank:
	 
	5.1.1	 	on the date of this Agreement, an arrangement fee of USD400,000; and
	 
	5.1.2	 	on each of the dates falling at three (3) monthly intervals commencing on the date falling
three (3) months after the date of this Agreement until the end of the Drawdown Period,
commitment commission computed from the date of this Agreement (in the case of the first
payment of commission) and from the date of the preceding payment of commission (in the case
of each subsequent payment) at the rate of zero point five per cent. (0.5%) per annum on the
daily undrawn maximum available Commitment.

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	 	 	The fee referred to in clause 5.1.1 and the commitment commission referred to in clause
5.1.2 must be paid by the Borrowers to the Bank regardless of whether any part of the
Commitment is ever advanced and in each case is not refundable.
	 
	5.2	 	Expenses
	 
	 	 	The Borrowers agree to reimburse the Bank on a full indemnity basis on demand for all
expenses and/or disbursements whatsoever certified by the Bank as having been incurred by
it from time to time and at any time:
	 
	5.2.1	 	in connection howsoever with the negotiation, preparation, execution and, where relevant,
registration of the Security Documents and of any contemplated or actual amendment, indulgence
or the granting of any waiver or consent howsoever in connection with any of the Security
Documents; and
	 
	5.2.2	 	in contemplation or furtherance of, or otherwise howsoever in connection with, the exercise
or enforcement of, or preservation of any rights, powers, remedies or discretion under any of
the Security Documents or any amendment thereto or consideration of the Bank’s rights
thereunder or any action proposed or taken with interest at the rate referred to in clause 3.4
from the date on which such expenses and/or disbursements were incurred to the date of payment
(as well after as before judgment).
	 
	5.3	 	Value Added Tax
	 
	 	 	All fees and expenses payable under to this clause 5 must be paid with value added tax or
any similar tax (if any) properly chargeable thereon. Any value added tax chargeable in
respect of any services supplied by the Bank under this Agreement must, on delivery of the
value added tax invoice, be paid in addition to any sum agreed to be paid hereunder.
	 
	5.4	 	Stamp and other duties
	 
	 	 	The Borrowers must pay all stamp, documentary, registration or other like duties or taxes
(including any duties or taxes payable by the Bank) imposed on or in connection with any
of the Shipbuilding Contracts, the Management Agreements, the Security Documents or the
Loan and agree to indemnify the Bank against any liability arising by reason of any delay
or omission by either Borrower to pay such duties or taxes.
	 
	6	 	PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS
	 
	6.1	 	No set-off or counterclaim
	 
	 	 	All payments to be made by the Borrowers under any of the Security Documents must be made
in full, without any set-off or counterclaim whatsoever and, subject to clause 6.6, free
and clear of any deductions or withholdings, in USD not later than 11 a.m. London time on
the due date to the account of the Bank at the Receiving Bank or to such other account at
such other bank in such place as the Bank may from time to time notify to the Borrowers.
	 
	6.2	 	Payment by the Bank
	 
	 	 	The proceeds of the Loan to be advanced by the Bank to the Borrowers under this Agreement
must be remitted in USD on the relevant Drawdown Date to the account or accounts specified
in the relevant Drawdown Notice.

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	6.3	 	Non-Banking Days
	 
	 	 	When any payment under any of the Security Documents would otherwise be due on a day which
is not a Banking Day, the due date for payment shall be extended to the next following
Banking Day unless such Banking Day falls in the next calendar month in which case payment
shall be made on the immediately preceding Banking Day.
	 
	6.4	 	Calculations
	 
	 	 	All interest and other payments of an annual nature under any of the Security Documents
shall accrue from day to day and be calculated on the basis of actual days elapsed and a
360 day year.
	 
	6.5	 	Currency of account
	 
	 	 	If any sum due from the Borrowers under any of the Security Documents, or under any order
or judgment given or made in relation thereto or for any other reason whatsoever, must be
converted from the currency (“the first currency”) in which the same is payable thereunder
into another currency (“the second currency”) for the purpose of (i) making or filing a
claim or proof against the Borrowers, (ii) obtaining an order or judgment in any court or
other tribunal or (iii) enforcing any order or judgment given or made in relation thereto,
the Borrowers undertake to indemnify and hold harmless the Bank from and against any loss
suffered as a result of any discrepancy between (a) the rate of exchange used for such
purpose to covert the sum in question from the first currency into the second currency and
(b) the rate or rates of exchange at which the Bank may in the ordinary course of business
purchase the first currency with the second currency upon receipt of a sum paid to it in
satisfaction, in whole or in part, of any such order, judgment, claim or proof. Any
amount due from the Borrowers under this clause 6.5 shall be due as a separate debt and
shall not be affected by judgment being obtained for any other sums due under or in
respect of any of the Security Documents and the term “rate of exchange” includes any
premium and costs of exchange payable in connection with the purchase of the first
currency with the second currency.
	 
	6.6	 	Grossing-up for Taxes
	 
	 	 	If at any time the Borrowers must make any deduction or withholding in respect
of Taxes from any payment due under any of the Security Documents, the sum due from
the Borrowers in respect of such payment must then be increased to the extent
necessary to ensure that, after the making of such deduction or withholding, the Bank
receives on the due date for such payment (and retains, free from any liability in
respect of such deduction or withholding), a net sum equal to the sum which it would
have received had no such deduction or withholding been made and the Borrowers agree
to indemnify the Bank on demand against any losses or costs certified by the Bank to
have been incurred by it by reason of any failure of the Borrowers to make any such
deduction or withholding or by reason of any increased payment not being made on the
due date for such payment. The Borrowers must promptly deliver to the Bank any
receipts, certificates or other proof evidencing the amounts (if any) paid or payable
in respect of any deduction or withholding as aforesaid.
	 
	6.7	 	Loan account
	 
	 	 	The Bank agrees to maintain a control account showing the Loan and other sums owing by the
Borrowers under the Security Documents and all payments in respect thereof being made

22

 

	 	 	from time to time. The control account shall, in the absence of manifest error, be
conclusive as to the amount from time to time owing by the Borrowers under the Security
Documents.
	 
	6.8	 	Bank may assume receipt
	 
	 	 	Where any sum is to be paid under the Security Documents to the Bank, the Bank may assume
that the payment will be made when due and the Bank may (but shall not be obliged to) make
such sum available to the person so entitled. If it proves to be the case that such
payment was not made to the Bank, then the person to whom such sum was so made available
must on request refund such sum to the Bank together with interest thereon sufficient to
compensate the Bank for the cost of making available such sum up to the date of such
repayment and the person by whom such sum was payable must indemnify the Bank for any and
all loss or expense which the Bank may sustain or incur as a consequence of such sum not
having been paid on its due date.
	 
	6.9	 	Partial payments
	 
	 	 	If, on any date on which a payment is due to be made by the Borrowers under any of the
Security Documents, the amount received by the Bank from the Borrowers falls short of the
total amount of the payment due to be made by the Borrowers on such date then, without
prejudice to any rights or remedies available to the Bank under any of the Security
Documents, the Bank must apply the amount actually received from the Borrowers in or
towards discharge of the obligations of the Borrowers under the Security Documents in the
following order, notwithstanding any appropriation made, or purported to be made, by the
Borrowers:
	 
	6.9.1	 	first, in or towards payment, on a pro-rata basis, of any unpaid costs and expenses of the
Bank under any of the Security Documents;
	 
	6.9.2	 	secondly, in or towards payment of any fees payable to the Bank under, or in relation to,
the Security Documents which remain unpaid;
	 
	6.9.3	 	thirdly, in or towards payment to the Bank of any accrued interest owing in respect of the
Loan which shall have become due under any of the Security Documents but remains unpaid;
	 
	6.9.4	 	fourthly, in or towards payment to the Bank of any principal in respect of the Loan which
shall have become due but remains unpaid;
	 
	6.9.5	 	fifthly, in or towards payment to the Bank for any loss suffered by reason of any such
payment in respect of principal not being effected on an Interest Payment Date relating to the
part of the Loan repaid and which amounts are so payable under this Agreement; and
	 
	6.9.6	 	sixthly, in or towards payment to the relevant person of any other sum which shall have
become due under any of the Security Documents but remains unpaid (and, if more than one such
sum so remains unpaid, on a pro rata basis).
	 
	 	 	The order of application set out in clauses 6.9.1 to 6.9.6 may be varied by the Bank
without any reference to, or consent or approval from, the Borrowers..
	 
	7	 	REPRESENTATIONS AND WARRANTIES

	 
	7.1	 	
Continuing representations and warranties

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	 	 	The Borrowers represent and warrant to the Bank that:
	 
	7.1.1	 	Due incorporation
	 
	 	 	each of the Security Parties is duly incorporated and validly existing in good standing,
under the laws of its respective country of incorporation, in each case, as a corporation
and has power to carry on its respective businesses as it is now being conducted and to
own their respective property and other assets to which it has unencumbered legal and
beneficial title except as disclosed to the Bank in writing;
	 
	7.1.2	 	Corporate power
	 
	 	 	each of the Security Parties has power to execute, deliver and perform its obligations
and, as the case may be, to exercise its rights under the Underlying Documents and the
Security Documents to which it is a party; all necessary corporate, shareholder and other
action has been taken to authorise the execution, delivery and on the execution of the
Security Documents performance of the same and no limitation on the powers of the
Borrowers to borrow or any other Security Party to howsoever incur liability and/or to
provide or grant security will be exceeded as a result of borrowing any part of the Loan;
	 
	7.1.3	 	Binding obligations
	 
	 	 	the Underlying Documents and the Security Documents, when executed, will constitute valid
and legally binding obligations of the relevant Security Parties enforceable in accordance
with their respective terms;
	 
	7.1.4	 	No conflict with other obligations
	 
	 	 	the execution and delivery of, the performance of their obligations under, and compliance
with the provisions of, the Underlying Documents and the Security Documents by the
relevant Security Parties will not (i) contravene any existing applicable law, statute,
rule or regulation or any judgment, decree or permit to which any Security Party or other
member of the Group is subject, (ii) conflict with, or result in any breach of any of the
terms of, or constitute a default under, any agreement or other instrument to which any
Security Party or any other member of the Group is a party or is subject or by which it or
any of its property is bound, (iii) contravene or conflict with any provision of the
constitutional documents of any Security Party or (iv) result in the creation or
imposition of, or oblige any of the Security Parties to create, any Encumbrance (other
than a Permitted Encumbrance) on any of the undertakings, assets, rights or revenues of
any of the Security Parties;
	 
	7.1.5	 	No default
	 
	 	 	no Default has occurred;
	 
	7.1.6	 	No litigation or judgments
	 
	 	 	no Proceedings are current, pending or, to the knowledge of the officers of either
Borrower, threatened against any of the Security Parties or any other Group Members or
their assets which could have a Material Adverse Effect and there exist no judgments,
orders, injunctions which would materially affect the obligations of the Security Parties
under the Security Documents;

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	7.1.7	 	No filings required
	 
	 	 	except for the registration of the Mortgages in the relevant register under the laws of
the relevant Flag State through the relevant Registry, it is not necessary to ensure the
legality, validity, enforceability or admissibility in evidence of any of the Underlying
Documents or any of the Security Documents that they or any other instrument be notarised,
filed, recorded, registered or enrolled in any court, public office or elsewhere in any
Pertinent Jurisdiction or that any stamp, registration or similar tax or charge be paid in
any Pertinent Jurisdiction on or in relation to any of the Underlying Documents or the
Security Documents and each of the Underlying Documents and the Security Documents is in
proper form for its enforcement in the courts of each Pertinent Jurisdiction;
	 
	7.1.8	 	Required Authorisations and legal compliance
	 
	 	 	all Required Authorisations have been obtained or effected and are in full force and
effect and no Security Party has in any way contravened any applicable law, statute, rule
or regulation (including all such as relate to money laundering);
	 
	7.1.9	 	Choice of law
	 
	 	 	the choice of English law to govern the Underlying Documents and the Security Documents
(other than the Mortgages, the Earnings Account Pledges and the Retention Account Pledge),
the choice of the law of the Flag State to govern the Mortgages, the choice of Greek law
to govern the Earnings Account Pledges and the Retention Account Pledge and the
submissions by the Security Parties to the jurisdiction of the English courts and the
obligations of such Security Parties associated therewith, are valid and binding;
	 
	7.1.10	 	No immunity
	 
	 	 	no Security Party nor any of their assets is entitled to immunity on the grounds of
sovereignty or otherwise from any Proceedings whatsoever;
	 
	7.1.11	 	Financial statements correct and complete
	 
	 	 	the latest audited and unaudited consolidated financial statements of the Corporate
Guarantor in respect of the relevant financial year as delivered to the Bank and present
or will present fairly and accurately the financial position of the Corporate Guarantor
and the consolidated financial position of the Group as at the date thereof and the
results of the operations of the Corporate Guarantor and the consolidated results of the
operations of the Group for the financial year ended on such date and, as at such date,
neither the Corporate Guarantor nor any of its subsidiaries had any significant
liabilities (contingent or otherwise) or any unrealised or anticipated losses which are
not disclosed by, or reserved against or provided for in, such financial statements;
	 
	7.1.12	 	Pari passu
	 
	 	 	the obligations of the Borrowers under this Agreement are direct, general and
unconditional obligations of the Borrowers and rank at least pari passu with all other
present and future unsecured and unsubordinated Indebtedness of the Borrowers except for
obligations which are mandatorily preferred by operation of law and not by contract;

25

 

	7.1.13	 	Information/ Material Adverse Effect
	 
	 	 	all information, whatsoever provided by any Security Party to the Bank in connection with
the negotiation and preparation of the Security Documents or otherwise provided hereafter
in relation to, or pursuant to this Agreement is, or will be, true and accurate in all
material respects and not misleading, does or will not omit material facts and all
reasonable enquiries have been, or shall have been, made to verify the facts and
statements contained therein and there has not occurred any event which could have a
Material Adverse Effect on any Security Party since such information was provided to the
Bank; there are, or will be, no other facts the omission of which would make any fact or
statement therein misleading;
	 
	7.1.14	 	No withholding Taxes
	 
	 	 	no Taxes anywhere are imposed whatsoever by withholding or otherwise on any payment to be
made by any Security Party under the Underlying Documents or the Security Documents to
which such Security Party is or is to be a party or are imposed on or by virtue of the
execution or delivery by the Security Parties of the Underlying Documents or the Security
Documents or any other document or instrument to be executed or delivered under any of the
Security Documents;
	 
	7.1.15	 	Use of proceeds
	 
	 	 	the Borrowers shall apply the Loan only for the purposes specified in clause 2.1;
	 
	7.1.16	 	The Mortgaged Vessels
	 
	 	 	throughout the Facility Period, each Mortgaged Vessel will, following its Delivery date,
be :

	 	(a)	 	in the absolute sole, legal and beneficial ownership of the relevant Owner;
	 
	 	(b)	 	registered through the offices of the relevant Registry as a ship under the
laws and flag of the relevant Flag State;
	 
	 	(c)	 	in compliance with the ISM Code and the ISPS Code and operationally
seaworthy and in every way fit for service;
	 
	 	(d)	 	in good and sea-worthy and cargo-worthy condition; and
	 
	 	(e)	 	classed with the relevant Classification free of all outstanding
requirements and recommendations of the relevant Classification Society.

	7.1.17	 	Mortgaged Vessels’ employment
	 
	 	 	except with the prior written consent of the Bank, there will not be any agreement or
arrangement whereby the Earnings (as defined in the relevant Ship Security Documents) of
either Mortgaged Vessel may be shared or pooled howsoever with any other person;
	 
	7.1.18	 	Freedom from Encumbrances
	 
	 	 	neither Mortgaged Vessel nor its Earnings, Insurances or Requisition Compensation (each as
defined in the relevant Ship Security Documents) nor the Earnings Accounts or the
Retention Account nor any Extended Employment Contract in respect of such Mortgaged Vessel
nor any other properties or rights which are, or are to be, the subject of any of the
Security

26

 

	 	 	Documents nor any part thereof will be subject to any Encumbrance except Permitted
Encumbrances;
	 
	7.1.19	 	Environmental Matters
	 
	 	 	except as may already have been disclosed by the Borrowers in writing to, and acknowledged
and accepted in writing by, the Bank:

	 	(a)	 	the Borrowers and, to the best of the Borrowers’ knowledge and belief
(having made due enquiry), their respective Environmental Affiliates, have complied
with the provisions of all Environmental Laws;
	 
	 	(b)	 	the Borrowers and, to the best of the Borrowers’ knowledge and belief
(having made due enquiry), their respective Environmental Affiliates have obtained
all Environmental Approvals and are in compliance with all such Environmental
Approvals;
	 
	 	(c)	 	no Environmental Claim has been made or threatened or pending against
either Borrower, or, to the best of the Borrowers’ knowledge and belief (having made
due enquiry), any of their respective Environmental Affiliates; and
	 
	 	(d)	 	there has been no Environmental Incident;

	7.1.20	 	ISM and ISPS Code
	 
	 	 	each of the Borrowers has complied with and continues to comply with and has procured that
the Manager has complied with and continues to comply with the ISM Code, the ISPS Code and
all other statutory and other requirements relative to its business and in particular each
Borrower or the Manager has obtained and maintains a valid DOC and SMC for each Mortgaged
Vessels and that it and the Manager has implemented and continues to implement an ISM SMS;
	 
	7.1.21	 	Copies true and complete
	 
	 	 	the Certified Copies or originals of the Underlying Documents delivered or to be delivered
to the Bank pursuant to clause 8.1 are, or will when delivered be, true and complete
copies or, as the case may be, originals of such documents; and such documents constitute
valid and binding obligations of the parties thereto enforceable in accordance with their
respective terms and there have been no amendments or variations thereof or defaults
thereunder;
	 
	7.1.22	 	the Borrowers are the ultimate beneficiaries of the Loan;
	 
	7.1.23	 	no Security Party has incurred any Indebtedness save under this Agreement or as otherwise
disclosed by the Corporate Guarantor in its filings to the SEC from time to time;
	 
	7.1.24	 	the Corporate Guarantor and both Borrowers have filed all tax and other fiscal returns
required to be filed by any tax authority to which they are subject;
	 
	7.1.25	 	neither Borrower has an office in England.

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	7.2	 	Repetition of representations and warranties
	 
	 	 	On each day throughout the Facility Period the Borrowers shall be deemed to repeat the
representations and warranties in clause 7 updated mutatis mutandis as if made with
reference to the facts and circumstances existing on such day.
	 
	8	 	UNDERTAKINGS
	 
	8.1	 	General
	 
	 	 	The Borrowers undertake with the Bank that, from the Execution Date until the end of the
Facility Period, they will:
	 
	8.1.1	 	Notice of Default and Proceedings
	 
	 	 	promptly inform the Bank of (a) any Default and of any other circumstances or occurrence
which might adversely affect the ability of any Security Party to perform its obligations
under any of the Security Documents and (b) as soon as the same is instituted or
threatened, details of any Proceedings involving any Security Party which could have a
material adverse effect on that Security Party and/or the operation of either of the
Vessels (including, but not limited to any Total Loss of a Vessel or the occurrence of
any Environmental Incident) and will from time to time, if so requested by the Bank,
confirm to the Bank in writing that, save as otherwise stated in such confirmation, no
Default has occurred and is continuing and no such Proceedings are on foot or threatened;
	 
	8.1.2	 	Authorisation
	 
	 	 	obtain or cause to be obtained, maintain in full force and effect and comply fully with
all Required Authorisations, provide the Bank with Certified Copies of the same and do, or
cause to be done, all other acts and things which may from time to time be necessary or
desirable under any applicable law (whether or not in the Pertinent Jurisdiction) for the
continued due performance of all the obligations of the Security Parties under each of the
Security Documents;
	 
	8.1.3	 	Corporate Existence
	 
	 	 	ensure that each Security Party maintains its corporate existence as a body corporate duly
organised and validly existing and in good standing under the laws of the Pertinent
Jurisdiction and ensure that each Borrower is owned, directly or through other companies,
by the Corporate Guarantor;
	 
	8.1.4	 	Use of proceeds
	 
	 	 	use the Advances exclusively for the purposes specified in clauses 1.1 and 2.1;
	 
	8.1.5	 	Pari passu
	 
	 	 	ensure that their obligations under this Agreement shall at all times rank at least pari
passu with all their other present and future unsecured and unsubordinated Indebtedness
with the exception of any obligations which are mandatorily preferred by law and not by
contract;

28

 

	8.1.6	 	Financial statements
	 
	 	 	provide to the Bank (or procure that is sent):

	 	(a)	 	as soon as possible, but in no event later than 180 days after the end of
each of its financial years, annual audited (prepared in accordance with US GAAP by a
firm of accountants acceptable to the Bank) consolidated balance sheet and profit and
loss accounts of the Corporate Guarantor and all companies which are owned, directly
or indirectly, or controlled by it (commencing with the financial year ending 31
December 2010); and
	 
	 	(b)	 	as soon as possible, but in no event later than 90 days after the end of
each 6 month period in each of its financial years, the Corporate Guarantor’s
unaudited consolidated balance sheet and profit and loss accounts for that 6 month
period certified as to their correctness by its chief financial officer;

	8.1.7	 	Reimbursement of MII & MAP Policy premiums
	 
	 	 	whether or not any amount is borrowed under this Agreement, reimburse the Bank on the
Bank’s written demand the amount of the premium payable by the Bank for the inception or,
as the case may be, extension and/or continuance of the MII & MAP Policy (including any
insurance tax thereon);
	 
	8.1.8	 	Compliance Certificates
	 
	 	 	deliver to the Bank, on the date on which the semi-annual and annual reports are delivered
under clause 8.1.6, a Compliance Certificate together with such supporting information as
the Bank may require;
	 
	8.1.9	 	Provision of further information
	 
	 	 	provide the Bank, and procure that the Corporate Guarantor shall provide the Bank, with
such financial or other information concerning the Borrowers, the Corporate Guarantor, the
other Group Members and their respective affairs, activities, financial standing,
Indebtedness and operations and the performance of the Mortgaged Vessels and any other
ship owned by any Group Member as the Bank may from time to time reasonably require and,
without the need for any request therefor provide to the Bank information of any
significant nature in respect of a Borrower and/or the Corporate Guarantor and/or any
other Group Member including, but not limited to, details of any loans borrowed or repaid
by any of them, the purchase or sale of any substantial assets (including ships) by any of
them and/or the restructuring of any loan of which any of them is a borrower;
	 
	8.1.10	 	Obligations under Security Documents
	 
	 	 	duly and punctually perform each of the obligations expressed to be imposed or assumed by
them under the Security Documents and Underlying Documents and will procure that each of
the other Security Parties will, duly and punctually perform each of the obligations
expressed to be assumed by it under the Security Documents and the Underlying Documents to
which it is a party;

29

 

	8.1.11	 	Compliance with ISM Code
	 
	 	 	comply with, and will procure that any Operator will comply with, and ensure that the
Mortgaged Vessels and any Operator comply with the requirements of the ISM Code, including
(but not limited to) the maintenance and renewal of valid certificates pursuant thereto
throughout the Security Period (as defined in the Mortgages);
	 
	8.1.12	 	Withdrawal of DOC and SMC
	 
	 	 	immediately inform the Bank if there is any actual withdrawal of their or any Operator’s
DOC or the SMC of either Mortgaged Vessel;
	 
	8.1.13	 	Issuance of DOC and SMC
	 
	 	 	and will procure that any Operator will, promptly inform the Bank of the receipt by either
Borrower or any Operator of notification that its application for a DOC or any application
for an SMC for any Mortgaged Vessel has been refused;
	 
	8.1.14	 	ISPS Code Compliance
	 
	 	 	and will procure that the Manager or any Operator will:

	 	(a)	 	maintain at all times a valid and current ISSC in respect of each
Mortgaged Vessel;
	 
	 	(b)	 	immediately notify the Bank in writing of any actual or threatened
withdrawal, suspension, cancellation or modification of the ISSC in respect of a
Mortgaged Vessel; and
	 
	 	(c)	 	procure that each Mortgaged Vessel will comply at all times with the ISPS
Code;

	8.1.15	 	Compliance with Laws and payment of taxes
	 
	 	 	and will comply with all relevant Environmental Laws, laws, statutes and regulations
(including, but not limited to, laws relating to any trading prohibition imposed by the
Flag State, the country of incorporation of the Borrowers or the country of nationality of
any crew member of either Vessel by which such Borrower is bound) and pay all taxes for
which it is liable as they fall due;
	 
	8.1.16	 	Charters etc.
	 
	 	 	(i) deliver to the Bank a Certified Copy of each Extended Employment Contract upon its
execution, (ii) forthwith on the Bank’s request execute (a) a Charter Assignment in
respect thereof and (b) any notice of assignment required in connection therewith and use
reasonable efforts to procure the acknowledgement of any such notice of assignment by the
relevant charterer (provided that any failure to procure the same shall not constitute an
Event of Default) and (iii) pay all legal and other costs incurred by the Bank in
connection with any such Charter Assignments, forthwith following the Bank’s demand;
	 
	8.1.17	 	Indebtedness
	 
	 	 	not incur any Indebtedness other than (i) in the ordinary course of trading the Vessel of
which it is the owner or (ii) a guarantee of the Transactions or (iii) with the prior
written consent of the Bank;

30

 

	8.1.18	 	Trading

	 
	 	 	
not permit either Vessel to trade in any area prohibited by the government of the Flag State;
	 
	8.1.19	 	Delivery

	 
	 	 	pay to the Builder all amounts payable on delivery of the Vessels in accordance with the
relevant Shipbuilding Contract and take, or as the case may be, ensure that the relevant
Borrower, takes delivery of the relevant Vessel;
	 
	8.1.20	 	Subordination
	 
	 	 	ensure that all Indebtedness of either Borrower to its shareholders or to any other Group
Member is fully subordinated, and to subordinate any Indebtedness issued to it by the
Corporate Guarantor, all in a form acceptable to the Bank; and
	 
	8.1.21	 	Business
	 
	 	 	procure that (i) the Corporate Guarantor and NMH own, directly or indirectly, inter alia,
companies owning and operating ships and (ii) Mrs. Angeliki Frangou is directly involved
in the management of the ships directly or indirectly owned by the Corporate Guarantor and
NMH.
	 
	8.1.22	 	Dividends
	 
	 	 	The Borrowers and Corporate Guarantor may declare or pay dividends or distribute any of
their present or future assets, undertakings, rights or revenues in an amount not
exceeding 50% of the Net Profits for any relevant financial year or quarter to any of
their partners, members or shareholders, and the Corporate Guarantor may make such other
investments as it may require, only if there has not occurred any Event of Default (and,
notwithstanding the terms of this Clause, the Lender hereby agrees and confirms that the
Corporate Guarantor may pay dividends for the third and fourth financial quarters of 2010
and the first and second financial quarters of 2011 of USD0.05 per issued share).
	 
	8.1.23	 	Listing
	 
	 	 	The Borrowers shall procure that each of the Corporate guarantor and NMH maintain its
listing as a public limited company on NYSE or any other stock exchange acceptable to the
Bank and comply with all of the listing rules, laws and regulations applicable to public
companies listed on NYSE or such other acceptable stock exchange and shall take no steps
to de-list without the prior consent of the Bank, unless it is obliged to de-list pursuant
to the listing rules, laws and regulations applicable to public companies listed on NYSE
or such other acceptable stock exchange.
	 
	8.1.24	 	Financial Covenants of the Group
	 
	 	 	The Borrowers shall procure that:

	 	(a)	 	at no time shall the Liquidity of the Group be less than USD40,000,000;
	 
	 	(b)	 	as of 1 January 2013, the Net Worth of the Group will at all times exceed
USD50,000,000;

31

 

	 	(c)	 	as of 1 January 2013, the Total Liabilities divided by the Total Assets
(adjusted for market values of vessels calculated in accordance with Clause 8.2.2)
shall be less than 75%.

	8.1.25	 	Inspection
	 
	 	 	The Bank may, at the cost of the Borrowers and upon receipt of at least 15 days written
notice, by surveyors or other persons appointed by it for such purpose, board either
Mortgaged Vessel at all other reasonable times for the purpose of inspecting her and to
afford all proper facilities for such inspections and for this purpose to give the Bank
reasonable advance notice of any intended drydocking of each Mortgaged Vessel (whether for
the purpose of classification, survey or otherwise) and to pay the costs in respect of one
inspection in each calendar year.
	 
	8.2	 	Security value maintenance
	 
	8.2.1	 	Security shortfall
	 
	 	 	If, at any time after the first Delivery Date, the Security Value shall be less than the
Required Security Amount, the Bank shall give notice to the Borrowers requiring that such
deficiency be remedied and then the Borrowers must either:

	 	(a)	 	prepay within a period of thirty (30) days of the date of receipt by the
Borrowers of the Bank’s said notice such part of the Loan as will result in the
Security Value after such prepayment (taking into account any other repayment of the
Loan made between the date of the notice and the date of such prepayment) being equal
to or higher than the Required Security Amount; or
	 
	 	(b)	 	within thirty (30) days of the date of receipt by the Borrower of the
Bank’s said notice constitute to the satisfaction of the Bank a first preferred ship
mortgage over a ship as security for the Loan as shall be acceptable to the Bank
having a value for security purposes (as determined in accordance with Clause 8.2.2)
at the date upon which such mortgage is provided which, when added to the Security
Value, shall not be less than the Required Security Amount as at such date; or
	 
	 	(c)	 	within thirty (30) days of the date of receipt by the Borrower of the
Bank’s said notice constitute to the satisfaction of the Bank such further security
for the Loan as shall be acceptable to the Bank having a value for security purposes
(as determined by the Bank in its reasonable discretion) at the date upon which such
further security shall be constituted which, when added to the Security Value, shall
not be less than the Required Security Amount as at such date.

	 	 	The provisions of clauses 4.6 and 4.7 shall apply to prepayments under clause 8.2.1(a)
provided that the Bank shall apply such prepayments (i) pro rata against the Tranches,
(ii) in pro rata reduction of the repayment instalments under clause 4.1 and the amounts
of the Loan prepaid hereunder shall not be available to be re-borrowed.
	 
	8.2.2	 	Valuation of Mortgaged Vessels
	 
	 	 	Each Mortgaged Vessel shall, for the purposes of this Agreement, be valued (at the
Borrowers’ expense) in USD by any Approved Broker, such valuations to be made without
physical inspection, and on the basis of a sale for prompt delivery for cash at arms’
length, on normal

32

 

	 	 	commercial terms, as between a willing buyer and a willing seller, without taking into
account the benefit or burden of any charterparty or other engagement concerning the
relevant Mortgaged Vessel and such valuations to be no older than 15 days on the date on
which it is provided to the Bank, and to be provided to the Bank at such times as the Bank
shall require at the cost of the Borrowers,

	 	 	Provided that if the Bank or the Borrowers do not agree with any valuation produced as
hereinbefore referred to then each of the Bank and the Borrowers shall nominate an
Approved Broker, and the Valuation Amount for the relevant Mortgaged Vessel or Vessels
shall be the average of the valuations produced by those two Approved Brokers in
accordance with the terms of this Clause.
	 
	 	 	The Approved Broker’s valuations for each Mortgaged Vessel on each such occasion shall
constitute the Valuation Amount of such Mortgaged Vessel for the purposes of this
Agreement until superseded by the next such valuation.
	 
	 	 	The Bank may request valuations of the Mortgaged Vessels at any time in its discretion,
and no less than once in any twelve month period.
	 
	8.2.3	 	Information
	 
	 	 	The Borrowers undertake with the Bank to supply to the Bank and to the Approved Broker
such information concerning the relevant Mortgaged Vessel and its condition as such
shipbrokers may require for the purpose of determining any Valuation Amount.
	 
	8.2.4	 	Costs
	 
	 	 	All costs in connection with the obtaining and any determining of any Valuation Amount
pursuant to Clause 8.2.2 and any valuation either of any additional security for the
purposes of ascertaining the Security Value at any time or necessitated by the Borrowers
electing to constitute additional security pursuant to clause 8.2.1(b), must be paid by
the Borrowers.
	 
	8.2.5	 	Valuation of additional security
	 
	 	 	For the purposes of this clause 8.2, the market value (i) of any additional security over
a ship (other than the Vessels) shall be determined in accordance with clause 8.2.2 and
(ii) of any other additional security provided or to be provided to the Bank shall be
determined by the Bank in its reasonable discretion.
	 
	8.2.6	 	Documents and evidence
	 
	 	 	In connection with any additional security provided in accordance with this clause 8.2,
the Bank shall be entitled to receive (at the Borrowers’ expense) such evidence and
documents of the kind referred to in schedule 2 as may in the Bank’s opinion be
appropriate and such favourable legal opinions as the Bank shall in its absolute
discretion require.
	 
	8.3	 	Negative undertakings
	 
	 	 	The Borrowers jointly and severally undertake with the Bank that, from the Execution Date
until the end of the Facility Period, they will not, without the prior written consent of
the Bank:
	 
	8.3.1	 	Negative pledge

33

 

	 	 	permit any Encumbrance (other than a Permitted Encumbrance) to subsist, arise or be
created or extended over all or any part of their respective present or future
undertakings, assets, rights or revenues to secure or prefer any present or future
Indebtedness or other liability or obligation of any Group Member or any other person;

	8.3.2	 	No merger or transfer
	 
	 	 	merge or consolidate with any other person or permit any change to the legal or beneficial
ownership of their shares from that existing at the Execution Date;
	 
	8.3.3	 	Disposals
	 
	 	 	sell, transfer, assign, create security or option over, pledge, pool, abandon, lend or
otherwise dispose of or cease to exercise direct control over any part of their present or
future undertaking, assets, rights or revenues (otherwise than by transfers, sales or
disposals for full consideration in the ordinary course of trading) whether by one or a
series of transactions related or not;
	 
	8.3.4	 	Other business or manager
	 
	 	 	undertake any business other than the ownership and operation of the Vessels or employ
anyone other than the Manager as commercial and technical manager of the Vessels;
	 
	8.3.5	 	Acquisitions
	 
	 	 	acquire any further assets other than the Vessels and rights arising under contracts
entered into by or on behalf of the Borrowers in the ordinary course of their businesses
of owning, operating and chartering the Vessels;
	 
	8.3.6	 	Other obligations
	 
	 	 	other than a guarantee in respect of the Transactions, incur any obligations except for
obligations arising under the Underlying Documents or the Security Documents or contracts
entered into in the ordinary course of their business of owning, operating and chartering
the Vessels;
	 
	8.3.7	 	No borrowing
incur any Borrowed Money except for Borrowed Money pursuant to the Security Documents;
8.3.8 Repayment of borrowings
	 
	 	 	repay or prepay the principal of, or pay interest on or any other sum in connection with
any of their Borrowed Money except for Borrowed Money pursuant to the Security Documents;
	 
	8.3.9	 	Guarantees
	 
	 	 	issue any guarantees or otherwise become directly or contingently liable for the
obligations of any person, firm, or corporation except pursuant to the Security Documents
and except for (i) guarantees from time to time required in the ordinary course by any
protection and indemnity or war risks association with which a Vessel is entered,
guarantees required to procure the release of such Vessel from any arrest, detention,
attachment or levy or

34

 

	 	 	guarantees required for the salvage of a Vessel, (ii) guarantee in respect of the
Transactions and (iii) such other guarantees to which the Bank shall have consented in
writing;

	8.3.10	 	Loans
	 
	 	 	make any loans or grant any credit (save for normal trade credit in the ordinary course of
business) to any person or agree to do so;
	 
	8.3.11	 	Sureties
	 
	 	 	permit any Indebtedness of either Borrower to any person (other than the Bank pursuant to
the Security Documents) to be guaranteed by any person (except for guarantees from time to
time required in the ordinary course of business and in the ordinary course by any
protection and indemnity or war risks association with which a Vessel is entered,
guarantees required to procure the release of such Vessel from any arrest, detention,
attachment or levy or guarantees or undertakings required for the salvage of a Vessel and
guarantees in favour of the Builder in respect of either Shipbuilding Contract); or
	 
	8.3.12	 	Subsidiaries
	 
	 	 	form or acquire any Subsidiaries.
	 
	9	 	CONDITIONS
	 
	9.1	 	Documents and evidence
	 
	 	 	The Bank’s obligation to make available the Advances is subject to the following conditions
precedent:
	 
	9.1.1	 	that, on or before the service of the first Drawdown Notice hereunder, the Bank has received
the documents described in Part A of Schedule 2 in form and substance satisfactory to the Bank
and its lawyers;
	 
	9.1.2	 	that, on or before drawdown of the Advances referred to in clause 2.3 (a) the Bank has
received the documents described in Part B of Schedule 2 in respect of the Relevant Vessel (as
defined in Schedule 2) in form and substance satisfactory to the Bank and its lawyers;
	 
	9.1.3	 	that, on or before drawdown of the Advances referred to in clause 2.3 (b), the Bank has
received the documents described in Part C of Schedule 2 in respect of the Relevant Vessel (as
defined in Schedule 2) in form and substance satisfactory to the Bank and its lawyers;
	 
	9.1.4	 	that, on or before drawdown of the Advances referred to in clause 2.3 (c), the Bank has
received the documents described in Part D of Schedule 2 in respect of the Relevant Vessel (as
defined in Schedule 2) in form and substance satisfactory to the Bank and its lawyers;
	 
	9.1.5	 	that, on or before drawdown of the Advances referred to in clause 2.3 (d), the Bank has
received the documents described in Part E of Schedule 2 in respect of the Relevant Vessel (as
defined in Schedule 2) in form and substance satisfactory to the Bank and its lawyers
	 
	9.1.6	 	that on or before drawdown of the Advances referred to in clause 2.3 (e), the Bank has
received the documents described in Part F of Schedule 2 in respect of the Relevant Vessel (as
defined in Schedule 2) in form and substance satisfactory to the Bank and its lawyers;

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	9.1.7	 	the representations and warranties contained in clause 7 and clauses 4.1 and 4.2 of the
Corporate Guarantee being then true and correct as if each was made with respect to the facts
and circumstances existing at such time; and
	 
	9.1.8	 	no Default having occurred and being continuing and there being no Default which would
result from the making of the Loan.
	 
	9.2	 	Waiver of conditions precedent
	 
	 	 	The conditions specified in this clause 9 are inserted solely for the benefit of the Bank
and may be waived by the Bank in whole or in part and with or without conditions.
	 
	9.3	 	Further conditions precedent
	 
	 	 	Not later than five (5) Banking Days prior to the Drawdown Date and not later than five
(5) Banking Days prior to each Interest Payment Date, the Bank may reasonably request and
the Borrowers must, not later than two (2) Banking Days prior to such date, deliver to the
Bank (at the Borrowers’ expense) on such request further favourable certificates and/or
opinions as to any or all of the matters which are the subject of clauses 7, 8, 9 and 10
and clauses 4 and 5 of the Corporate Guarantee.
	 
	9.4	 	English language
	 
	 	 	All documents required to be delivered under and/or supplied in connection with any of the
Security Documents must either be in the English language or accompanied by an English
translation certified by a notary, lawyer or consulate acceptable to the Bank.
	 
	10	 	EVENTS OF DEFAULT
	 
	10.1	 	Events
	 
	 	 	Each of the following events shall constitute an Event of Default (whether such event
shall occur voluntarily or involuntarily or by operation of law or regulation or in
connection with any judgment, decree or order of any court or other authority or
otherwise, howsoever):
	 
	10.1.1	 	Non-payment: any Security Party fails to pay any sum payable by it under any of the Security
Documents at the time, in the currency and in the manner stipulated in the Security Documents
or the Underlying Documents (and so that, for this purpose, sums payable (i) under clauses 3.1
and 4.1 shall be treated as having been paid at the stipulated time if (aa) received by the
Bank within two (2) days of the dates therein referred to and (bb) such delay in receipt is
caused by administrative or other delays or errors within the banking system and (ii) on
demand shall be treated as having been paid at the stipulated time if paid within two (2)
Banking Days of demand); or
	 
	10.1.2	 	Breach of Insurance and certain other obligations: any Owner or, as the context may require,
the Manager or any other person fails to obtain and/or maintain the Insurances (as defined in,
and in accordance with the requirements of, the Ship Security Documents) for any of the
Mortgaged Vessels or if any insurer in respect of such Insurances cancels the Insurances or
disclaims liability by reason, in either case, of mis-statement in any proposal for the
Insurances or for any other failure or default on the part of the Borrower or any other person
or the Borrower commits any breach of or omits to observe any of the obligations or
undertakings expressed to be assumed by them under clause 8; or

36

 

	10.1.3	 	Breach of other obligations: any Security Party commits any breach of or omits to observe
any of its obligations or undertakings expressed to be assumed by it under any of the Security
Documents (other than those referred to in clauses 10.1.1 and 10.1.2 above) unless such breach
or omission, in the opinion of the Bank (following consultation with the Banks) is capable of
remedy, in which case the same shall constitute an Event of Default if it has not been
remedied within fifteen (15) days of the occurrence thereof; or
	 
	10.1.4	 	Misrepresentation: any representation or warranty made or deemed to be made or repeated by
or in respect of any Security Party in or pursuant to any of the Security Documents or in any
notice, certificate or statement referred to in or delivered under any of the Security
Documents is or proves to have been incorrect or misleading in any material respect; or
	 
	10.1.5	 	Cross-default: any Indebtedness of any Group Member is not paid when due (subject to
applicable grace periods) or any Indebtedness of any Group Member becomes (whether by
declaration or automatically in accordance with the relevant agreement or instrument
constituting the same) due and payable prior to the date when it would otherwise have become
due (unless as a result of the exercise by the relevant Group Member of a voluntary right of
prepayment), or any creditor of any Group Member becomes entitled to declare any such
Indebtedness due and payable or any facility or commitment available to any Group Member
relating to Indebtedness is withdrawn, suspended or cancelled by reason of any default
(however described) of the person concerned; or
	 
	10.1.6	 	Execution: any uninsured judgment or order made against any Security Party is not stayed,
appealed against or complied with within fifteen (15) days or a creditor attaches or takes
possession of, or a distress, execution, sequestration or other process is levied or enforced
upon or sued out against, any of the undertakings, assets, rights or revenues of any Security
Party and is not discharged within thirty (30) days; or
	 
	10.1.7	 	Insolvency: any Security Party is unable or admits inability to pay its debts as they fall
due; suspends making payments on any of its debts or announces an intention to do so; becomes
insolvent; or has negative net worth (taking into account contingent liabilities); or suffers
the declaration of a moratorium in respect of any of its Indebtedness; or
	 
	10.1.8	 	Reduction or loss of capital: a meeting is convened by any Security Party (other than the
Borrower) without the Bank’s prior written consent, for the purpose of passing any resolution
to purchase, reduce or redeem any of its share capital without the Bank’s prior written
consent; or
	 
	10.1.9	 	Dissolution: any corporate action, Proceedings or other steps are taken to dissolve or
wind-up any Security Party or an order is made or resolution passed for the dissolution or
winding up of any Security Party or a notice is issued convening a meeting for such purpose;
or
	 
	10.1.10	 	Administration: any petition is presented, notice given or other steps are taken anywhere
to appoint an administrator of any Security Party or the Bank believes that any such petition
or other step is imminent or an administration order is made in relation to any Security
Party; or
	 
	10.1.11	 	Appointment of receivers and managers: any administrative or other receiver is appointed
anywhere of any Security Party or any part of its assets and/or undertaking or any other steps
are taken to enforce any Encumbrance over all or any part of the assets of any Security Party;
or

37

 

	10.1.12	 	Compositions: any corporate action, legal proceedings or other procedures or steps are
taken, or negotiations commenced, by any Security Party or by any of its creditors with a view
to the general readjustment or rescheduling of all or part of its Indebtedness or to proposing
any kind of composition, compromise or arrangement involving such company and any of its
creditors; or
	 
	10.1.13	 	Analogous proceedings: there occurs, in relation to any Security Party, in any country or
territory in which any of them carries on business or to the jurisdiction of whose courts any
part of their assets is subject, any event which, in the reasonable opinion of the Bank,
appears in that country or territory to correspond with, or have an effect equivalent or
similar to, any of those mentioned in clauses 10.1.6 to 10.1.12 (inclusive) or any Security
Party otherwise becomes subject, in any such country or territory, to the operation of any law
relating to insolvency, bankruptcy or liquidation; or
	 
	10.1.14	 	Cessation of business: any Security Party suspends or ceases or threatens to suspend or
cease to carry on its business without the prior written consent of the Bank, such consent not
to be unreasonably withheld; or
	 
	10.1.15	 	Seizure: all or a material part of the undertaking, assets, rights or revenues of, or
            shares or other ownership interests in, any Security Party are seized, nationalised,
expropriated or compulsorily acquired by or under the authority of any Government Entity; or
	 
	10.1.16	 	Invalidity: any of the Security Documents and the Underlying Documents shall at any time
and for any reason become invalid or unenforceable or otherwise cease to remain in full force
and effect, or if the validity or enforceability of any of the Security Documents and the
Underlying Documents shall at any time and for any reason be contested by any Security Party
which is a party thereto, or if any such Security Party shall deny that it has any, or any
further, liability thereunder; or
	 
	10.1.17	 	Unlawfulness: any Unlawfulness occurs or it becomes impossible or unlawful at any time for
any Security Party, to fulfil any of the covenants and obligations expressed to be assumed by
it in any of the Security Documents or for a Bank to exercise the rights or any of them vested
in it under any of the Security Documents or otherwise; or
	 
	10.1.18	 	Repudiation: any Security Party repudiates any of the Security Documents or does or causes
or permits to be done any act or thing evidencing an intention to repudiate any of the
Security Documents; or
	 
	10.1.19	 	Encumbrances enforceable: any Encumbrance (other than Permitted Liens) in respect of any of
the property (or part thereof) which is the subject of any of the Security Documents becomes
enforceable; or
	 
	10.1.20	 	Arrest: any Mortgaged Vessel is arrested, confiscated, seized, taken in execution,
impounded, forfeited, detained in exercise or purported exercise of any possessory lien or
other claim or otherwise taken from the possession of its Owner and that Owner shall fail to
procure the release of such Mortgaged Vessel within a period of fifteen (15) days thereafter;
or
	 
	10.1.21	 	Registration: the registration of any Mortgaged Vessel under the laws and flag of the
relevant Flag State is cancelled or terminated without the prior written consent of the Bank;
or
	 
	10.1.22	 	Unrest: the Flag State of any Vessel or the country in which any Security Party is
incorporated or domiciled becomes involved in hostilities or civil war or there is a seizure
of power in the

38

 

	 	 	Flag State by unconstitutional means unless the Owner of the Vessel registered in such
Flag State shall have transferred its Vessel onto a new flag acceptable to the Banks
within sixty (60) days of the start of such hostilities or civil war or seizure of power;
or

	10.1.23	 	Environmental Incidents: an Environmental Incident occurs which gives rise, or may give
rise, to an Environmental Claim which could, in the opinion of the Bank be expected to have a
material adverse effect (i) on the business, assets or financial condition of any Security
Party or the Group taken as a whole or (ii) on the security constituted by any of the Security
Documents or the enforceability of that security in accordance with its terms; or
	 
	10.1.24	 	P&I: an Owner or the Manager or any other person fails or omits to comply with any
requirements of the protection and indemnity association or other insurer with which a
Mortgaged Vessel is entered for insurance or insured against protection and indemnity risks
(including oil pollution risks) to the effect that any cover (including, without limitation,
any cover in respect of liability for Environmental Claims arising in jurisdictions where such
Mortgaged Vessel operates or trades) is or may be liable to cancellation, qualification or
exclusion at any time; or
	 
	10.1.25	 	Material events: any other event occurs or circumstance arises which, in the opinion of the
Bank, is likely materially and adversely to affect either (i) the ability of any Security
Party to perform all or any of its obligations under or otherwise to comply with the terms of
any of the Security Documents or (ii) the security created by any of the Security Documents;
or
	 
	10.1.26	 	Required Authorisations: any Required Authorisation is revoked or withheld or modified or
is otherwise not granted or fails to remain in full force and effect or if any exchange
control or other law or regulation shall exist which would make any transaction under the
Security Documents or the continuation thereof, unlawful or would prevent the performance by
any Security Party of any term of any of the Security Documents;
	 
	10.1.27	 	Ownership/management: there is any change in the direct or indirect ownership of either
Borrower or either Vessel or change of Manager of either Vessel without the prior written
consent of the Bank or the number of shares of and in the Corporate Guarantor controlled by
NMH, Mrs. Angeliki Frangou and their respective affiliates in aggregate falls below 20% of the
issued shares of the Corporate Guarantor; or
	 
	10.1.28	 	Shipbuilding Contract/Refund Guarantee: either Shipbuilding Contract or Refund Guarantee is
terminated, cancelled, revoked, suspended, rescinded, transferred, novated or otherwise ceases
to remain in full force and effect for any reason except with the consent of the Bank; or
	 
	10.1.29	 	Money Laundering: any Security Party is in breach of or fails to observe any law,
requirement, measure or procedure implemented to combat “money laundering” as defined in
Article 1 of the Directive (91/308 EEC) of the Council of the European Communities.
	 
	10.2	 	Acceleration
	 
	 	 	The Bank may, without prejudice to any other rights of the Bank, at any time after the
happening of an Event of Default so long as the same is continuing by notice to the
Borrowers declare that:
	 
	10.2.1	 	the obligation of the Bank to make the Commitment available shall be terminated, whereupon
the Commitment shall immediately be cancelled; and/or

39

 

	10.2.2	 	the Loan and all interest and commitment commission accrued and all other sums payable
whensoever under the Security Documents have become due and payable, whereupon the same shall,
immediately or in otherwise accordance with the terms of such notice, become due and payable.
	 
	10.3	 	Demand basis
	 
	 	 	If, under clause 10.2.2, the Bank has declared the Loan to be due and payable on demand,
at any time thereafter the Bank may by further notice to the Borrowers demand repayment of
the Loan on such date as may be specified whereupon the Loan shall become due and payable
accordingly with all interest and commitment commission accrued and all other sums payable
under this Agreement.
	 
	11	 	INDEMNITIES
	 
	11.1	 	General indemnity
	 
	 	 	Each Borrower agrees to indemnify the Bank on demand, without prejudice to any of the
Bank’s other rights under any of the Security Documents, against any loss (including loss
of Margin) or expense (including, without limitation, any Break Costs) which the Bank
shall certify as sustained at any time by it in connection with this Agreement.
	 
	11.2	 	Environmental indemnity
	 
	 	 	The Borrowesr shall indemnify the Bank on demand and hold it harmless from and against all
costs, claims, expenses, payments, charges, losses, demands, liabilities, actions,
Proceedings, penalties, fines, damages, judgements, orders, sanctions or other outgoings
of whatever nature which may be incurred or made or asserted whensoever against the Bank
at any time, whether before or after the repayment in full of principal and interest under
this Agreement, arising howsoever out of an Environmental Claim made or asserted against
the Bank which would not have been, or been capable of being, made or asserted against the
Bank had it not entered into any of the Security Documents or been involved in any of the
resulting or associated transactions.
	 
	11.3	 	Capital adequacy and reserve requirements indemnity
	 
	 	 	The Borrowers shall promptly indemnify the Bank on demand against any cost incurred or
loss suffered by the Bank as a result of its complying with (i) the minimum reserve
requirements from time to time of the European Central Bank (ii) any capital adequacy
directive of the European Union and/or (iii) any revised framework for international
convergence of capital measurements and capital standards and/or any regulation imposed by
any Government Entity in connection therewith, and/or in connection with maintaining
required reserves with a relevant national central bank to the extent that such compliance
or maintenance relates to the Commitment or deposits obtained by it to fund the whole or
part thereof and to the extent such cost or loss is not recoverable by the Bank under
clause 11.2..
	 
	12	 	UNLAWFULNESS AND INCREASED COSTS MITIGATION
	 
	12.1	 	Unlawfulness
	 
	 	 	Regardless of any other provision of this Agreement, in the event that the Bank notifies
the Borrowers that by reason of:

40

 

	 	(a)	 	the introduction of or any change in any applicable law or regulation or
any change in the interpretation or application thereof; or
	 
	 	(b)	 	compliance by the Bank with any directive, request or requirement (whether
or not having the force of law) of any central bank or Government Entity

	 	 	it becomes unlawful or it is prohibited by or contrary to such directive request or
requirement for the Bank to maintain or give effect to any of its obligations in
connection howsoever with this Agreement then (i) the Commitment shall be reduced to zero
and (ii) the Borrowers shall be obliged to prepay the Loan either immediately or on a
future date (specified in the Bank’s notice) not being earlier than the latest date
permitted by the relevant law, regulation, directive, request or requirement with interest
and commitment commission accrued to the date of prepayment and all other sums payable
whensoever by the Borrowers under this Agreement.
	 
	12.2	 	Increased costs
	 
	 	 	If the Bank certifies to the Borrowers that at any time the effect of any applicable law,
regulation or regulatory requirements or the interpretation or application thereof or any
change therein (including the imposition upon whomsoever of Taxes on payments hereunder or
otherwise howsoever in connection with this Agreement other than taxes on the overall net
income of the Bank) or the effect of complying with any applicable directive, request or
requirement (whether or not having the force of law) of any central bank or Government
Entity (including, but not limited to, the 1988 Basle Convergence Agreement andincluding
any kind of liquidity, stock or capital adequacy controls or other banking or monetary
controls or requirements which affect the manner in which the Bank or its holding company
allocates capital resources to the Bank’s obligations hereunder) is to:
	 
	12.2.1	 	subject the Bank to Taxes or change the basis of Taxation of the Bank relating to any
payment under any of the Security Documents (other than Taxes or Taxation on the overall net
income of the Bank imposed in the jurisdiction in which its principal or lending office under
this Agreement is located); and/or
	 
	12.2.2	 	increase the cost to, or impose an additional cost on, the Bank or its holding company in
making or keeping the Commitment available or maintaining or funding all or part of the Loan;
and/or
	 
	12.2.3	 	reduce the amount payable or the effective return to the Bank under any of the Security
Documents; and/or
	 
	12.2.4	 	reduce the Bank’s or its holding company’s rate of return on its overall capital by reason
of a change in the manner in which it is required to allocate capital resources to the Bank’s
obligations under any of the Security Documents; and/or
	 
	12.2.5	 	require the Bank or its holding company to make a payment or forgo a return on or calculated
by reference to any amount received or receivable by the Bank under any of the Security
Documents; and/or
	 
	12.2.6	 	require the Bank or its holding company to incur or sustain a loss (including a loss of
future potential profits) by reason of being obliged to deduct all or part of the Commitment
or the Loan from its capital for regulatory purposes,

41

 

	 	 	        then and in each such case (subject to clause 12.3) the Borrowers must on demand either:

	 	(a)	 	pay to the Bank the amount which the Bank certifies (in a certificate
setting forth the basis of the computation of such amount but not including any
matters which the Bank or its holding company regards as confidential) is required to
compensate the Bank and/or (as the case may be) its holding company for such
liability to Taxes, cost, reduction, payment, forgone return or loss; or
	 
	 	(b)	 	prepay the Loan, in respect of which prepayment the terms of clause 4.5
shall apply.

	 	 	For the purposes of this clause 12.2 and clause 12.4 “holding company” means the company
or entity (if any) within the consolidated supervision of which the Bank is included.
	 
	12.3	 	Exception
	 
	 	 	Nothing in clause 12.2 shall entitle the Bank to receive any amount relating to
compensation for any such liability to Taxes, increased or additional cost, reduction,
payment, foregone return or loss to the extent that the same is the subject of an
additional payment under clause 6.6.
	 
	13	 	SECURITY, SET-OFF AND MISCELLANEOUS
	 
	13.1	 	Application of moneys
	 
	 	 	All moneys received by the Bank under or pursuant to any of the Security Documents and
expressed to be applicable in accordance with the provisions of this clause 13.1 shall be
applied by the Bank as follows, or in such other order as the Bank may require in its
absolute discretion:
	 
	13.1.1	 	first in or toward payment of all unpaid fees, commissions, sums which have been demanded by
way of indemnity and expenses which may be owing to the Bank under any of the Security
Documents;
	 
	13.1.2	 	secondly in or towards payment of any arrears of interest owing in respect of the Loan or
any part thereof;
	 
	13.1.3	 	thirdly in or towards repayment of the Loan (whether the same is due and payable or not);
	 
	13.1.4	 	fourthly in or towards payment to the Bank for any loss which the Bank certifies it has
suffered by reason of any such payment in respect of principal not being effected on an
Interest Payment Date relating to the part of the Loan repaid;
	 
	13.1.5	 	fifthly in or towards payment to the Bank of any other sums which the Bank certifies are
owing to it under any of the Security Documents; and
	 
	13.1.6	 	sixthly the surplus (if any) shall be paid to the Borrowers or to whomsoever else may appear
to the Bank to be entitled to receive such surplus.
	 
	13.2	 	Set-off
	 
	13.2.1	 	Each Borrower authorises the Bank (without prejudice to any of the Bank’s rights at law, in
equity or otherwise), at any time and without notice to the Borrowers, to apply any credit
balance to which either Borrower is then entitled standing upon any account of the Borrowers

42

 

	 	 	or either of them with any branch of the Bank in or towards satisfaction of any sum due
and payable from the Borrowers to the Bank under any of the Security Documents. For this
purpose, the Bank is authorised to purchase with the moneys standing to the credit of such
account such other currencies as may be necessary to effect such application.

	13.2.2	 	The Bank shall not be obliged to exercise any right given to it by this clause 13.2. The
Bank shall notify the Borrowers prior to or upon the exercise or purported exercise of any
right of set-off.
	 
	13.2.3	 	Nothing in this clause 13.2 shall be effective to create a charge or other security
interest.
	 
	13.3	 	Further assurance
	 
	 	 	The Borrowers undertake with the Bank to ensure that, throughout the Facility Period, the
Security Documents shall be valid and binding obligations of the respective parties
thereto and rights of the Bank enforceable in accordance with their respective terms and
that they will, at their expense, execute, sign, perfect and do, and will procure the
execution, signing, perfecting and doing by each of the other Security Parties of, any and
every such further assurance, document, act or thing as in the reasonable opinion of the
Bank may be necessary or desirable for perfecting the security contemplated or constituted
by the Security Documents.
	 
	13.4	 	Conflicts
	 
	 	 	In the event of any conflict between this Agreement and any of the other Borrower’s
Security Documents, the provisions of this Agreement shall prevail.
	 
	13.5	 	No implied waivers, remedies cumulative
	 
	 	 	No failure or delay on the part of the Bank to exercise any power, right or remedy under
any of the Security Documents shall operate as a waiver thereof, nor shall any single or
partial exercise by the Bank of any power, right or remedy preclude any other or further
exercise thereof or the exercise of any other power, right or remedy. The remedies
provided in the Security Documents are cumulative and are not exclusive of any remedies
provided by law. No waiver by the Bank shall be effective unless it is in writing.
	 
	13.6	 	Severability
	 
	 	 	If any provision of this Agreement is prohibited, invalid, illegal or unenforceable in any
jurisdiction, such prohibition, invalidity, illegality or unenforceability shall not
affect or impair howsoever the remaining provisions thereof or affect the validity,
legality or enforceability of such provision in any other jurisdiction.
	 
	13.7	 	Force Majeure
	 
	 	 	Regardless of any other provision of this Agreement the Bank shall not be liable for any
failure to perform the whole or any part of this Agreement resulting directly or
indirectly from (i) the action or inaction or purported action of any governmental or
local authority (ii) any strike, lockout, boycott or blockade (including any strike,
lockout, boycott or blockade effected by or upon the Bank or any of its representatives or
employees) (iii) any act of God (iv) any act of war (whether declared or not) or terrorism
(v) any failure of any information technology or other operational systems or equipment
affecting the Bank or (vi) any other circumstances whatsoever outside the Bank’s control.

43

 

	13.8	 	Amendments
	 
	 	 	This Agreement may be amended or varied only by an instrument in writing executed by both
parties hereto who irrevocably agree that the provisions of this clause 13.8 may not be
waived or modified except by an instrument in writing to that effect signed by both of
them.
	 
	13.9	 	Counterparts
	 
	 	 	This Agreement may be executed in any number of counterparts and all such counterparts
taken together shall be deemed to constitute one and the same agreement which may be
sufficiently evidenced by one counterpart.
	 
	13.10	 	English language
	 
	 	 	All documents required to be delivered under and/or supplied whensoever in connection
howsoever with any of the Security Documents and all notices, communications, information
and other written material whatsoever given or provided in connection howsoever therewith
must either be in the English language or accompanied by an English translation certified
by a notary, lawyer or consulate acceptable to the Bank.
	 
	14	 	ACCOUNTS
	 
	14.1	 	General
	 
	 	 	Each Borrower undertakes with the Bank that it will ensure that:
	 
	14.1.1	 	it will on or before the Delivery Date in respect of its Vessel, open an Earnings Account in
its name; and
	 
	14.1.2	 	all moneys payable to either Borrower in respect of the Earnings (as defined in the relevant
Mortgage) of its Mortgaged Vessel shall, unless and until the Bank directs to the contrary
pursuant to the provisions of the relevant Mortgage, be paid to the Earnings Account, Provided
however that if any of the moneys paid to either Earnings Account are payable in a currency
other than USD, they shall be paid to a sub-account of that Earnings Account denominated in
such currency (except that if the Borrowers fail to open such a sub-account, the Bank shall
then convert such moneys into USD at the Bank’s spot rate of exchange at the relevant time for
the purchase of USD with such currency and the term “spot rate of exchange” shall include any
premium and costs of exchange payable in connection with the purchase of USD with such
currency).
	 
	14.2	 	Earnings Accounts: withdrawals
	 
	 	 	Any sums standing to the credit of the Earnings Accounts may be applied from time to time
(i) firstly to make the payments required under this Agreement, (ii) secondly, subject to
there being no breach of Clause 14.3 and to no Event of Default having occurred, in the
operation of the Vessels and (iii) subject to there being at any time sufficient funds to
pay amounts due under (i) and (ii) above as they fall due, thirdly for the general
corporate purposes of the Borrowers.

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	14.3	 	Retention Account: credits and withdrawals
	 
	14.3.1	 	The Borrowers undertake with the Bank that, throughout the Facility Period, they will
procure that, on each Retention Date there is paid (whether from the Earnings Accounts or
elsewhere) to the Retention Account, the Retention Amount for such date.
	 
	14.3.2	 	Unless and until there shall occur an Event of Default (whereupon the provisions of clause
14.5 shall apply), all Retention Amounts credited to the Retention Account together with
interest from time to time accruing or at any time accrued thereon must be applied by the Bank
(and the Borrowers hereby irrevocably authorise the Bank so to apply the same) upon each
Repayment Date and/or on each day that interest is payable on the Loan pursuant to clause 3.1,
in or towards payment to the Bank of the instalment then falling due for repayment or, as the
case may be, the amount of interest then due. Each such application by the Bank shall
constitute a payment in or towards satisfaction of the Borrowers’ corresponding payment
obligations under this Agreement but shall be strictly without prejudice to the obligations of
the Borrowers to make any such payment to the extent that the aforesaid application by the
Bank is insufficient to meet the same.
	 
	 	 	Unless the Bank otherwise agrees in writing and subject to this clause 14.3.2, the
Borrowers shall not be entitled to withdraw any moneys from the Retention Account at any
time during the Facility Period.
	 
	14.4	 	Application of accounts
	 
	 	 	At any time after the occurrence of an Event of Default, the Bank may, without notice to
the Borrowers, apply all moneys then standing to the credit of the Earnings Accounts
and/or the Retention Account (together with interest from time to time accruing or accrued
thereon) in or towards satisfaction of any sums due to the Bank under the Security
Documents in the manner specified in clause 13.1.
	 
	14.5	 	Charging of accounts
	 
	 	 	The Earnings Accounts and the Retention Account and all amounts from time to time
respectively standing to the credit thereof shall be subject to the security constituted
and the rights conferred by, respectively, the Earnings Account Pledges and the Retention
Account Pledge.
	 
	15	 	ASSIGNMENT, TRANSFER AND LENDING OFFICE
	 
	15.1	 	Benefit and burden
	 
	 	 	This Agreement shall be binding upon, and ensure for the benefit of, the Bank and the
Borrowers and their respective successors.
	 
	15.2	 	No assignment by Borrowers
	 
	 	 	The Borrowers may not assign or transfer any of their respective rights or obligations
under this Agreement.
	 
	15.3	 	Assignment by Bank
	 
	 	 	The Bank may assign all or any part of its rights under any of the Security Documents to
any other bank or financial institution (an “Assignee”) (i) if such assignment is to any
bank or

45

 

	 	 	financial institution affiliated to the Bank, without the consent of the Borrowers or (ii)
if such assignment is to any arms length bank or financial institution, with the prior
consent of the Borrowers, such consent not to be unreasonably withheld.

	15.4	 	Transfer by Bank
	 
	 	 	The Bank may transfer all or any part of its rights, benefits and/or obligations under
this Agreement and/or any of the other Security Documents to any one or more banks or
other financial institutions (a “Transferee”) (i) if such assignment is to any bank or
financial institution affiliated to the Bank, without the consent of the Borrowers or (ii)
if such assignment is to any arms length bank or financial institution, with the prior
consent of the Borrowers, such consent not to be unreasonably withheld, provided always
that any such Transferee, by delivery of such undertaking as the Bank may approve, becomes
bound by the terms of this Agreement and agrees to perform all or, as the case may be,
relevant part of the Bank’s obligations under this Agreement.
	 
	15.5	 	Documentation
	 
	 	 	If the Bank assigns all or any part of its rights or transfers all or any part of its
rights, benefits and/or obligations as provided in clause 15.3 or 15.4 the Borrowers
undertake, immediately on being requested to do so by the Bank , to enter into, and
procure that the other Security Parties shall enter into, such documents as may be
necessary or desirable to transfer to the Assignee or Transferee all or the relevant part
of the Bank’s interest in the Security Documents. Thereafter, all relevant references in
this Agreement to the Bank shall be construed as a reference to the Bank and/or its
Assignee or Transferee (as the case may be) to the extent of their respective interests.
	 
	15.6	 	Lending office
	 
	 	 	The Bank shall lend through its office at the address specified above or through any other
office of the Bank selected from time to time by it through which the Bank wishes to lend
for the purposes of this Agreement.
	 
	15.7	 	Disclosure of information
	 
	 	 	The Bank may disclose to a prospective Assignee, Transferee or to any other person who may
propose entering into contractual relations with the Bank in relation to this Agreement
such information about or in connection with any of the Security Parties and the Security
Documents as the Bank considers appropriate.
	 
	15.8	 	No additional costs
	 
	 	 	If at the time of, or immediately after, any assignment and/or transfer by the Bank of all
or any part of its rights and/or benefits and/or obligations under this Agreement, or any
change in the office through which the Bank lends for the purposes of this Agreement, the
Borrowers would be obliged to pay to the Assignee or Transferee or (in the case of a
change of lending office) the Bank under clause 6.6 or 12.2 any sum exceeding the sum (if
any) which it would have been obliged to pay to the Bank under the relevant clause had no
such assignment, transfer or change taken place, the Borrowers shall not be obliged to pay
such excess.

46

 

	16	 	NOTICES
	 
	16.1	 	General
	 
	16.1.1	 	unless otherwise specifically provided herein, every notice under or in connection with this
Agreement shall be given in English by letter delivered personally and/or sent by post and/or
transmitted by fax;
	 
	16.1.2	 	in this clause “notice” includes any demand, consent, authorisation, approval, instruction,
certificate, request, waiver or other communication.
	 
	16.2	 	Addresses for communications, effective date of notices
	 
	16.2.1	 	subject to clause 16.2.2 and clause 16.2.4 notices to the Borrowers shall be deemed to have
been given and shall take effect when received in full legible form by the Borrowers at the
address and/or the fax number appearing below (or at such other address or fax number as the
Borrowers may hereafter specify for such purpose to the Bank by notice in writing);

	 	 	 

	Address

	 	c/o Navios ShipManagement Inc. 

85 Akti Miaouli 

Piraeus 

Greece
	 
	 	 
	Fax no:

	 	+ 30 210 453 2070

	16.2.2	 	notwithstanding the provisions of clause 16.2.1 or clause 16.2.4, a notice of Default and/or
a notice given pursuant to clause 10.2 or clause 10.3 shall be deemed to have been given and
shall take effect when delivered, sent or transmitted by the Bank to the Borrowers to the
address or fax number referred to in clause 16.2.1;
	 
	16.2.3	 	subject to clause 16.2.4, notices to the Bank shall be deemed to be given, and shall take
effect, when received in full legible form by the Bank at the address and/or the fax number
appearing below (or at any such other address or fax number as the Bank may hereafter specify
for such purpose to the Borrowers by notice in writing);

	 	 	 

	Address

	 	83 Akti Miaouli & Flessa Street

5th floor

185 38 Piraeus

Greece

	Fax no:

	 	+30 210 458 7877

	16.2.4	 	if under clause 16.2.1 or clause 16.2.3 a notice would be deemed to have been given and
effective on a day which is not a working day in the place of receipt or is outside the normal
business hours in the place of receipt, the notice shall be deemed to have been given and to
have taken effect at the opening of business on the next working day in such place.
	 
	17	 	BORROWERS’ OBLIGATIONS
	 
	17.1	 	Joint and several
	 
	 	 	Regardless of any other provision in any of the Security Documents, all obligations and
liabilities whatsoever of the Borrowers herein contained are joint and several and shall
be

47

 

	 	 	construed accordingly. Each of the Borrowers agrees and consents to be bound by the
Security Documents to which it becomes a party notwithstanding that the other Borrower may
not do so or be effectually bound and notwithstanding that any of the Security Documents
may be invalid or unenforceable against the other Borrower, whether or not the deficiency
is known to the Bank.

	17.2	 	Borrowers as principal debtors
	 
	 	 	Each Borrower acknowledges that it is a principal and original debtor in respect of all
amounts which may become payable by the Borrowers in accordance with the terms of any of
the Security Documents and agrees that the Bank may continue to treat it as such, whether
or not the Bank is or becomes aware that such Borrower is or has become a surety for the
other Borrower.
	 
	17.3	 	Indemnity
	 
	 	 	The Borrowers undertake to keep the Bank fully indemnified on demand against all claims,
damages, losses, costs and expenses arising from any failure of either Borrower to perform
or discharge any purported obligation or liability of that Borrower which would have been
the subject of this Agreement or any other Security Document had it been valid and
enforceable and which is not or ceases to be valid and enforceable against the other
Borrower on any ground whatsoever, whether or not known to the Bank including, without
limitation, any irregular exercise or absence of any corporate power or lack of authority
of, or breach of duty by, any person purporting to act on behalf of the other Borrower (or
any legal or other limitation, whether under the Limitation Acts or otherwise or any
disability or death, bankruptcy, unsoundness of mind, insolvency, liquidation,
dissolution, winding up, administration, receivership, amalgamation, reconstruction or any
other incapacity of any person whatsoever (including, in the case of a partnership, a
termination or change in the composition of the partnership) or any change of name or
style or constitution of any Security Party)).
	 
	17.4	 	Liability unconditional
	 
	 	 	None of the obligations or liabilities of the Borrowers under any Security Document shall
be discharged or reduced by reason of:
	 
	17.4.1	 	the death, bankruptcy, unsoundness of mind, insolvency, liquidation, dissolution,
winding-up, administration, receivership, amalgamation, reconstruction or other incapacity of
any person whatsoever (including, in the case of a partnership, a termination or change in the
composition of the partnership) or any change of name or style or constitution of either
Borrower or any other person liable;
	 
	17.4.2	 	the Bank granting any time, indulgence or concession to, or compounding with, discharging,
releasing or varying the liability of, either Borrower or any other person liable or renewing,
determining, varying or increasing any accommodation, facility or transaction or otherwise
dealing with the same in any manner whatsoever or concurring in, accepting, varying any
compromise, arrangement or settlement or omitting to claim or enforce payment from either
Borrower or any other person liable; or
	 
	17.4.3	 	anything done or omitted which but for this provision might operate to exonerate the
Borrowers or either of them.

48

 

	17.5	 	Recourse to other security
	 
	 	 	The Bank shall not be obliged to make any claim or demand or to resort to any security or
other means of payment now or hereafter held by or available to them for enforcing any of
the Security Documents against either Borrower or any other person liable and no action
taken or omitted by the Bank in connection with any such security or other means of
payment will discharge, reduce, prejudice or affect the liability of the Borrowers under
the Security Documents to which either of them is, or is to be, a party.
	 
	17.6	 	Waiver of Borrowers’ rights
	 
	 	 	Each Borrower agrees with the Bank that, throughout the Facility Period, it will not,
without the prior written consent of the Bank:
	 
	17.6.1	 	exercise any right of subrogation, reimbursement and indemnity against the other Borrower or
any other person liable under the Security Documents;
	 
	17.6.2	 	demand or accept repayment in whole or in part of any Indebtedness now or hereafter due to
such Borrower from the other Borrower or from any other person liable for such Indebtedness or
demand or accept any guarantee against financial loss or any document or instrument created or
evidencing an Encumbrance in respect of the same or dispose of the same;
	 
	17.6.3	 	take any steps to enforce any right against the other Borrower or any other person liable in
respect of any such moneys; or
	 
	17.6.4	 	claim any set-off or counterclaim against the other Borrower or any other person liable or
claim or prove in competition with the Bank in the liquidation of the other Borrower or any
other person liable or have the benefit of, or share in, any payment from or composition with,
the other Borrower or any other person liable or any security granted under any Security
Document now or hereafter held by the Bank for any moneys owing under this Agreement or for
the obligations or liabilities of any other person liable but so that, if so directed by the
Bank, it will prove for the whole or any part of its claim in the liquidation of the other
Borrower or other person liable on terms that the benefit of such proof and all money received
by it in respect thereof shall be held on trust for the Bank and applied in or towards
discharge of any moneys owing under this Agreement in such manner as the Bank shall require.
	 
	18	 	GOVERNING LAW
	 
	18.1	 	Law
	 
	 	 	This Agreement and any non-contractual obligations arising out of or in connection with it
is governed by and shall be construed in accordance with English law.
	 
	19	 	JURISDICTION
	 
	19.1	 	Exclusive jurisdiction
	 
	 	 	For the benefit of the Bank, and subject to clause 19.4 below, the Borrowers hereby
irrevocably agree that the courts of England shall have exclusive jurisdiction:
	 
	19.1.1	 	to settle any disputes or other matters whatsoever arising under or in connection with this
Agreement or any non-contractual obligation arising out of or in connection with this
Agreement and any disputes or other such matters arising in connection with the negotiation,

49

 

	 	 	validity or enforceability of this Agreement or any part thereof, whether the alleged
liability shall arise under the laws of England or under the laws of some other country and
regardless of whether a particular cause of action may successfully be brought in the English
courts; and

	19.1.2	 	to grant interim remedies or other provisional or protective relief.
19.2 Submission and service of process
	 
	 	 	The Borrowers accordingly irrevocably and unconditionally submit to the jurisdiction of
the English courts. Without prejudice to any other mode of service each Borrower:
	 
	19.2.1	 	irrevocably empowers and appoints HFW Nominees Ltd at present of Friary Court, 65 Crutched
Friars, London EC3N 2AE, England as its agent to receive and accept on its behalf any process
or other document relating to any proceedings before the English courts in connection with
this Agreement;
	 
	19.2.2	 	agrees to maintain such an agent for service of process in England from the date hereof
until the end of the Facility Period;
	 
	19.2.3	 	agrees that failure by a process agent to notify the Borrowers of service of process will
not invalidate the proceedings concerned;
	 
	19.2.4	 	without prejudice to the effectiveness of service of process on its agent under clause
19.2.1 above but as an alternative method, consents to the service of process relating to any
such proceedings by mailing or delivering a copy of the process to its address for the time
being applying under clause 16.2;
	 
	19.2.5	 	agrees that if the appointment of any person mentioned in clause 19.2.1 ceases to be
effective, the Borrowers shall immediately appoint a further person in England to accept
service of process on its behalf in England and, failing such appointment with in seven (7)
days the Bank shall thereupon be entitled and is hereby irrevocably authorised by the
Borrowers in those circumstances to appoint such person by notice to the Borrowers.
	 
	19.3	 	Forum non conveniens and enforcement abroad
	 
	 	 	The Borrowers:
	 
	19.3.1	 	waive any right and agree not to apply to the English court or other court in any
jurisdiction whatsoever to stay or strike out any proceedings commenced in England on the
ground that England is an inappropriate forum and/or that proceedings have been or will be
started in any other jurisdiction in connection with any dispute or related matter falling
within clause 19.1; and
	 
	19.3.2	 	agree that a judgment or order of an English court in a dispute or other matter falling
within clause 19.1 shall be conclusive and binding on the Borrowers and may be enforced
against it in the courts of any other jurisdiction.
	 
	19.4	 	Right of Bank, but not Borrowers, to bring proceedings in any other jurisdiction
	 
	19.4.1	 	nothing in this clause 19 limits the right of the Bank to bring proceedings, including third
party proceedings, against the Borrowers or either of them, or to apply for interim remedies,
in connection with this Agreement in any other court and/or concurrently in more than one
jurisdiction;

50

 

	19.4.2	 	the obtaining by the Bank of judgment in one jurisdiction shall not prevent the Bank from
bringing or continuing proceedings in any other jurisdiction, whether or not these shall be
founded on the same cause of action.
	 
	19.5	 	Enforceability despite invalidity of Agreement
	 
	 	 	The jurisdiction agreement contained in this clause 19 shall be severable from the rest of
this Agreement and shall remain valid, binding and in full force and shall continue to
apply notwithstanding this Agreement or any part thereof being held to be avoided,
rescinded, terminated, discharged, frustrated, invalid, unenforceable, illegal and/or
otherwise of no effect for any reason.
	 
	19.6	 	Effect in relation to claims by and against non-parties
	 
	19.6.1	 	for the purpose of this clause “Foreign Proceedings” shall mean any Proceedings except
proceedings brought or pursued in England arising out of or in connection with or in any way
related to any of the Security Documents or any assets subject thereto or any action of any
kind whatsoever taken by the Bank pursuant thereto or which would, if brought by the Borrowers
or either of them against the Bank, have been required to be brought in the English courts;
	 
	19.6.2	 	neither Borrower shall bring or pursue any Foreign Proceedings against the Bank and each
Borrower shall use its best endeavours to prevent persons not party to this Agreement from
bringing or pursuing any Foreign Proceedings against the Bank;
	 
	19.6.3	 	If, for any reason whatsoever, any Security Party and/or any third party brings or pursues
against the Bank any Foreign Proceedings, the Borrowers shall indemnify the Bank on demand in
respect of any and all claims, losses, damages, demands, causes of action, liabilities, costs
and expenses (including, but not limited to, legal costs) of whatsoever nature howsoever
arising from or in connection with such Foreign Proceedings which the Bank certifies as having
been incurred by it;
	 
	19.6.4	 	the Bank and the Borrowers hereby agree and declare that the benefit of this clause 19 shall
extend to and may be enforced by any officer, employee, agent or business associate of the
Bank against whom either Borrowers brings a claim in connection howsoever with (i) any of the
Security Documents or any assets subject thereto or (ii) any action of any kind whatsoever
taken by, or on behalf of or for the purported benefit of the Bank pursuant thereto, or which,
if it were brought against the Bank, would fall within the material scope of clause 19.1. In
those circumstances this clause 19 shall be read and construed as if references to the Bank
were references to such officer, employee, agent or business associate, as the case may be.

IN WITNESS whereof the parties to this Agreement have caused this Agreement to be duly executed on
the date first above written.

51

 

Execution page

	 	 	 	 	 	 	 	 	 
	SIGNED
by Georgia Babanara

	 	 	)	 	 	 
	 	 
	attorney-in-fact for and on behalf of

	 	 	)	 	 	 	 	 
	FOLEGANDROS SHIPPING CORPORATION

	 	 	)	 	 	 	 	 
	pursuant to a Power of Attorney

	 	 	)	 	 	/s/ Georgia Babanara 	 	 
	 

	 	 	 	 	 	 	 	 
	dated 26 October 2010

	 	 	)	 	 	Attorney-in-fact	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED by Georgia Babanara

	 	 	)	 	 	 	 	 
	attorney-in-fact for and on behalf of

	 	 	)	 	 	 	 	 
	SERIFOS SHIPPING CORPORATION

	 	 	)	 	 	 	 	 
	pursuant to a Power of Attorney

	 	 	)	 	 	/s/ Georgia Babanara 	 	 
	 

	 	 	 	 	 	 	 	 
	dated
26 October 2010

	 	 	)	 	 	Attorney-in-fact	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED
by Stavroula Ydraiou

	 	 	)	 	 	 	 	 
	and
by Thanasis Doudoulas

	 	 	)	 	 	 	 	 
	for and on behalf of

	 	 	)	 	 	 	 	 
	EFG EUROBANK ERGASIAS S.A.

	 	 	)	 	 	/s/ Stavroula Ydraiou 	 	/s/
Thanasis Doudoulas 
	 

	 	 	 	 	 	 
	 	 

	 

	 	 	 	 	 	Authorised signatories	 	 

52

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