Document:

Form of Credit Facility between the Company and Paragon Shipping Inc.

 Exhibit 10.9 

 
 Date [—] 2011

  
 PARAGON SHIPPING INC. 

as Borrower 
 -
and - 
 BOX SHIPS INC. 
 as Lender 
  
  

 
 LOAN AGREEMENT

  
  

relating to an unsecured term loan facility 
 of up to US$30,000,000 to be used for 
 general corporate purposes and working

 capital needs 

 THIS AGREEMENT is made on [—] 2011 

BETWEEN 
  

	(1)	PARAGON SHIPPING INC. a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro,
Marshall Islands MH 96960 (as “Lender”); and 

  

	(2)	BOX SHIPS INC. a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall
Islands MH 96960 (as “Borrower”). 

 BACKGROUND 

The Lender has agreed to make available to the Borrower an unsecured term loan facility of up to $30,000,000 (Thirty million United
States Dollars) in up to five advances for general corporate purposes and working capital needs. 
 IT IS AGREED as follows: 

 

	1	INTERPRETATION 

  

	1.1	Definitions. 

“Advance” means the principal amount of each borrowing by the Borrower under this agreement ; 

“Availability Period” means the period commencing on the date of this Agreement and ending on the date falling six
months as of such date;: 
 “Borrower” means BOX SHIPS INC. a corporation incorporated in the Marshall Islands
whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960; 

“Business Day” means a day on which banks are open in London, Athens, New York and, in respect of a day on which a
payment is required to be made under the Loan Agreement; 
 “Commitment” means an amount of up to $30,000,000
as that amount may be reduced, cancelled or terminated in accordance with this Agreement; 
 “Dollars” and
“$” means the lawful currency for the time being of the United States of America; 

 “Drawdown Date” means in relation to an Advance, the date requested by the
Borrower for any advance to be made, or the date on which the Advance is actually made; 
 “Drawdown Notice”
means a notice by which an Advance is requested to be made by the Borrower ; 
 “Events of Default” means any
of the events or circumstances described in Clause 7; 
 “Interest Period” means a period determined in
accordance with Clause 5; 
 “Lender” means PARAGON SHIPPING INC. a corporation incorporated in the Marshall
Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 or its successor or assignee; 
 “LIBOR” means, in relation to any Interest Period, the rate per annum determined by the Lender to be the rate at which deposits in Dollars are offered to the Lender by leading banks in
the London Interbank Market at the Lender’s request at or about 11.00 am (London time) on the Quotation Date for that Interest Period for a period equal to that Interest Period and for delivery on the first Business Day of it; 

“Loan” means the principal amount outstanding under this Agreement; 

“Margin” means 4 per cent. per annum; 
 “Repayment Date” means the second anniversary of the closing of the Initial Public Offering of the Borrower with the New York Stock Exchange (the “IPO”) and on which the whole
of the facility is required to be repaid ; 
  

	2	FACILITY 

  

	2.1	Amount of facility. Subject to the other provisions of this Agreement, the Lender shall make a loan facility not exceeding $30,000,000 available to the
Borrower in up to five advances. 

  

	2.2	Purpose of Loan. The Borrower undertakes to use the Loan for general corporate purposes and working capital needs. . 

 

	3	DRAWDOWN 

  

	3.1	Request for Advance. Subject to the following conditions, the Borrower may request an advance to be made by no later than 2 Business Days prior to the
intended Drawdown Date. 

  

	3.2	Availability. The conditions referred to in Clause 3.1 are that: 

 

	(a)	the Drawdown Date has to be a Business Day during the Availability Period; and 

	(b)	the Loan shall not exceed $30,000,000 and shall be made available in up to 5 (five ) advances 

 

	4	INTEREST 

  

	4.1	Payment of normal interest. Subject to the provisions of this Agreement, interest on the Loan in respect of each Interest Period shall be paid by the Borrower on
the last day of that Interest Period. 

  

	4.2	Normal rate of interest. Subject to the provisions of this Agreement, the rate of interest on the Loan shall be the aggregate of (i) the Margin, and
(ii) LIBOR for that Interest Period. 

  

	5	INTEREST PERIODS 

  

	5.1	Commencement of Interest Periods. The first Interest Period applicable to an Advance shall commence on the Drawdown Date relative to that Advance and each
subsequent Interest Period shall commence on the expiry of the preceding Interest Period. 

  

	5.2	Duration of Interest Periods 

 each Interest Period shall be: 
  

	(a)	3, 6, 9 or 12 months as notified by the Borrower to the Lender; or 

  

	(b)	3 months, if the Borrower fails to notify the Lender; or 

  

	(c)	such other period as the Lender may agree with the Borrower. 

  

	6	REPAYMENT AND PREPAYMENT 

  

	6.1	Repayment. The Borrower shall repay the whole Loan by: 

 one repayment instalment on the second anniversary of the Borrower’s completion of the IPO 
  

	6.2	Voluntary prepayment. the Borrower may prepay the whole or any part of the Loan, without penalty, at any time during the life of the facility.

  

	7	EVENTS OF DEFAULT 

  

	7.1	Events of Default. An Event of Default occurs if: 

  

	(a)	the Borrower fails to pay when due or (if so payable) on demand any sum payable under this agreement; or 

 any formal declaration of bankruptcy or any formal statement to the effect that the Borrower
is insolvent or likely to become insolvent is made by any third party; or 
 a provisional liquidator is appointed in respect of
the Borrower, a winding up order is made in relation to the Borrower; or 
 in a Pertinent Jurisdiction other than England, any
event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Lender is similar to any of the foregoing; or 
 a change in the Chief Executive Officer of the Borrower without the prior written consent of the Lender; or 
 a change of control, merger or acquisition with respect to the Borrower. 
  

	7.2	Actions following an Event of Default. On, or at any time after, the occurrence of an Event of Default the Lender may: 

 

	(a)	serve on the Borrower a notice stating that all obligations of the Lender to the Borrower under this Agreement are terminated; and/or 

 

	(b)	serve on the Borrower a notice stating that the Loan, all accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable
or are due and payable on demand; and/or 

  

	(c)	take any other action which, as a result of the Event of Default or any notice served under paragraph (a) or (b), the Lender is entitled to take under any
applicable law. 

  

	7.3	Termination of Commitment. On the service of a notice under paragraph (a) of Clause 7.2, the Commitment and all other obligations of the Lender to the
Borrower under this Agreement shall terminate. 

  

	7.4	Acceleration of Loan. On the service of a notice under paragraph (b) of Clause 7.2, the Loan, all accrued interest and all other amounts accrued or owing
from the Borrower under this Agreement shall become immediately due and payable or, as the case may be, payable on demand. 

  

	8	NOTICES 

  

	8.1	General. Unless otherwise specifically provided, any notice under or in connection with this agreement shall be given by letter or fax; 

 

	8.2	Addresses for communications. A notice shall be sent: 

  

			
	 (a)    to the Borrower:
	  	Box Ships Inc.
		
		  	 15 Karamanli Ave.
 166 73
Voula
 Greece

		
	Fax No.  . . . . . . . . . . . . .	  	

			
	 (b)    to the Lender
	  	Paragon Shipping Inc.
		
		  	 15 Karamanli Ave.
 166 73
Voula
 Greece

		
	Fax No.  . . . . . . . . . . . . .	  	

 Effective date of notices. 

a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered;
and 
 a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is
completed. 
  

	9	LAW AND JURISDICTION 

  

	9.1	English law. This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with,
English law. 

  

	9.2	Exclusive English jurisdiction. the courts of England shall have exclusive jurisdiction to settle any Dispute. 

THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement. 

 

									
	THE LENDER	 		 	THE BORROWER
					
	BY:	 		 	BY:Form of Purchase Option Agreement

 Exhibit 10.12 
 FORM OF PURCHASE OPTION AGREEMENT 
 This AGREEMENT (this
“Agreement”) is made effective as of April , 2011 among PARAGON SHIPPING INC., a Marshall Islands company (“Paragon Shipping”), BOX SHIPS INC., a Marshall Islands company (“Box Ships”). 

WHEREAS, Paragon Shipping is engaged in the ownership, operation and chartering of drybulk carrier vessels, and Box Ships is
engaged or will be engaged in the ownership, operation and chartering of container vessels; 
 WHEREAS, concurrently with
the execution and delivery of this Agreement, each of Paragon Shipping and Box Ships, together with Michael Bodouroglou, the Chief Executive Officer and a director of both of the parties hereto as of the date of this Agreement, have entered into a
non-compete agreement (the “Non-Competition Agreement”) pursuant to which Paragon Shipping has agreed not to acquire or operate container vessels except with the prior consent of Box Ships, and Box Ships has agreed not to acquire or
operate drybulk carrier vessels except with the prior consent of Paragon Shipping; 
 WHEREAS, prior to the date
hereof, Paragon Shipping has entered into an agreement (the “Shipbuilding Contracts”) with [NAME OF YARD] (the “Ship Yard”) for the construction of two (2) 4,800 TEU container vessels for delivery to Paragon
Shipping upon their expected completion and delivery to Paragon Shipping during the fourth quarter of 2012 (each a “Vessel” and collectively the “Vessels”), and Paragon Shipping desires to grant to Box Ships an
option to acquire one or both of the Shipbuilding Contracts from Paragon Shipping in accordance with the terms and conditions set forth herein; 
 NOW, THEREFORE, in consideration of the mutual covenants and premises of the parties hereto and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows: 
 1.         Grant of Option.
Subject to the terms, provisions and conditions hereinafter set forth, Paragon Shipping hereby grants to Box Ships the option to purchase from Paragon Shipping all of Paragon Shipping’s rights and obligations under one or both of the
Shipbuilding Contracts (each an “Option”), and, should Box Ships elect to exercise one or both of the Options, then, (i) if such Option is exercised prior to the delivery of the Vessel to Paragon Shipping, then upon the terms
and subject to the conditions as set forth in this Agreement, Paragon Shipping shall cause the Shipbuilding Contract to be novated to Box Ships or a wholly owned subsidiary of Box Ships nominated by Box Ships and transfer all of its rights and
obligations under the Shipbuilding Contract to Box Ships or (ii) if such option is exercised after the delivery of the Vessel to Paragon Shipping, then Box Ships shall purchase the Vessel from Paragon Shipping pursuant to a mutually agreeable
purchase agreement containing customary terms and conditions for such transaction. 

 2.         Term of Option. The Option for
each Vessel shall be exercisable at any time prior to the sale or other disposition of the Vessel by Paragon Shipping (the “Exercise Period”). 
 3.         Exercise. Box Ships shall exercise the Option at any time during the Exercise Period by serving a written notice (the “Notice of
Exercise”) upon Paragon Shipping at the address specified below. 
 4.        
Purchase Price. The purchase price (the “Purchase Price”) payable by Box Ships to Paragon Shipping for each of the Vessels shall be the greater of: 
 (A) Paragon Shipping’s actual carrying cost of the applicable Vessel at the date that the Option is exercised, together with any actual expenses incurred by Paragon Shipping in connection with the
construction contracts or the Vessels, as the case may be; and 
 (B) the fair market value of the relevant Shipbuilding Contact
at the date of exercised, as determined by the average of two independent ship broker's valuations, one selected by Paragon Shipping and one selected by Box Ships. 
 5.         Acknowledgement and Deposit Payment. Upon delivery of the Notice of Exercise, Paragon Shipping shall accept notice of Box Ship’s exercise of
the Option by signing the Notice of Exercise, and this Agreement and the Shipbuilding Contract novation or applicable purchase agreement, as the case may be, shall constitute a contract and shall be controlling with respect to the acceptance and
delivery of the Vessels and payment by Box Ships of the Purchase Price. 
 6.        
Representations and Warranties of Paragon Shipping. Paragon Shipping hereby represents and warrants to, and agrees with, Box Ships, as of the date hereof, as follows (it being acknowledged and understood that each such representation and
warranty and agreement relates to material matters upon which Box Ships has relied or shall rely): 
 (a)
Capacity; Authority; Validity. Paragon Shipping has the full right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereunder. This Agreement has been duly authorized, executed and delivered on
behalf of Paragon Shipping and constitutes the valid and binding obligation of Paragon Shipping, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, moratorium or other
similar laws relating to or affecting the rights of creditors generally and by equitable principles, including those limiting the availability of specific performance, injunctive relief and other equitable remedies and those providing for equitable
defenses. 
 (b) No Violation of Law or Agreement. The execution and delivery of this Agreement by
Paragon Shipping, nor consummation of the transactions contemplated hereby or in connection herewith by Paragon Shipping, will violate 

  
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any existing agreement to which Paragon Shipping is currently subject or any judgement, order, writ, decree, law, rule or regulation of the United States of America, any state or political
subdivision thereof, any other nation and any political subdivision thereof and any executive, legislative, judicial, regulatory or administrative functions exercised by any government. 

7.         Representations of Box Ships. Box Ships hereby represents and warrants to, and
agrees with, Paragon Shipping, as of the date hereof, as follows (it being acknowledged and understood that each such representation and warranty and agreement relates to material matters upon which Paragon Shipping has relied or shall rely):

 (a) Capacity; Authority; Validity. Box Ships has the full right, power and authority to enter into
this Agreement and to consummate the transactions contemplated hereunder. This Agreement has been duly authorized, executed and delivered on behalf of Box Ships and constitutes the valid and binding obligation of Box Ships, enforceable in accordance
with its terms, except as enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, moratorium or other similar laws relating to or affecting the rights of creditors generally and by equitable principles, including those limiting
the availability of specific performance, injunctive relief and other equitable remedies and those providing for equitable defenses. 
 (b) No Violation of Law or Agreement. Neither the execution and delivery of this Agreement by Box Ships, nor consummation of the transactions contemplated hereby or thereby or in connection
herewith by Box Ships, will violate any existing agreement to which Box Ships is currently subject or any judgement, order, writ, decree, law, rule or regulation of the United States of America, any state or political subdivision thereof, any other
nation and any political subdivision hereof and any exercising executive, legislative, judicial, regulatory or administrative functions exercised by any government. 
 8.         Survival of Representations and Warranties. Each representation and warranty set forth in Sections 6 and 7 of this Agreement shall survive the
date hereof and the consummation of the transactions contemplated hereby. 
 9.        
Indemnification. Paragon Shipping shall be liable to and shall indemnify and hold Box Ships and its affiliates and permitted assigns harmless from and against any and all liabilities, damages, costs, fees, losses and expenses, including
without limitation, any attorneys’ fees, disbursements and court costs, incurred by Box Ships by any reason of (i) Paragon Shipping’s breach or alleged breach of any representation, warranty, agreement or covenant contained herein;
(ii) Paragon Shipping’s failure to perform its covenants and obligations hereunder; and (iii) all claims of any person or entity, relating to or arising from acts or omissions of Paragon Shipping with respect to the Vessels or the
Shipbuilding Contract arising prior to the date of the exercise of the Options, except to the extent, in each case, that such liabilities, damages, costs, fees, losses and expenses 

  
 3 

 
are the result of the gross negligence or willful misconduct of Box Ships. The terms and provisions of this Section 9 shall survive the consummation of the transaction contemplated by, and
the termination of, this Agreement. 
 10.       Amendments and Waivers. This Agreement may
be amended, modified, superseded, or cancelled only upon the written consent of the parties hereto, and any of the terms, representations, warranties or covenants hereof may be waived by the party waiving compliance. 

11.       Non-Competition Agreement. Notwithstanding any other provision of this Agreement, Box
Ships hereby acknowledges and agrees that in the event that the Option is not exercised for the purchase of one or both of the Vessels in accordance with the terms hereof, Paragon Shipping shall be entitled to own, operate and sell the Vessel or
Vessels. 
 12.       Expenses. Each party hereto shall each bear its own legal, accounting
and other costs in connection with the transactions herein, including taxes, if any, which are imposed upon that party based on its activities hereunder. This Section 12 shall survive the termination of this Agreement. 

13.       Transfer and Assignment. Box Ships may transfer or assign this Agreement without the
consent of Paragon Shipping only to a wholly-owned subsidiary of Box Ships. This Agreement may not be transferred or assigned by Paragon Shipping without the prior written consent of Box Ships, which shall not be unreasonably withheld. 

14.       Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of Greece without regard to conflicts of law principles. 
 15.       Notices. Notices
and other communications hereunder shall be in writing and may be sent by facsimile as follows: 
 If to Paragon Shipping:

 15 Karamanli Avenue 
 16673 Voula, Greece 
 [FAX] 

If to Box Ships: 
 15 Karamanli Avenue 
 16673 Voula, Greece 

[FAX] 
 or to
such other address as either party shall from time to time specify in writing to the other. 
 Every notice or other
communication shall, except so far as otherwise expressly provided by this Agreement, be deemed to have been received in the case of a facsimile 

  
 4 

 
on the date of dispatch thereof (provided further that if the date of dispatch or receipt is not a day on which banks are open for the transaction of business in the locality of the party to whom
such notice or demand is sent, it shall be deemed to have been received on the next following day in such locality), and in the case of a letter, at the time of receipt thereof. 

16.       Invalidity. If any provision of this Agreement shall at any time for any reason be
declared invalid, void or otherwise inoperative by a court of competent jurisdiction, (i) such declaration or decision shall not affect the validity of any other provision or provisions of this Agreement or the validity of this Agreement as a
whole; (ii) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Assignee in order to carry out the intentions of the parties hereto as nearly as may be
possible; and (iii) the invalidity and unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction. In the event that it should transpire that by
reason of any law or regulation, or by reason of a ruling of any court, or by any other reason whatsoever, the grant of an option herein contained is either wholly or partly defective, Paragon Shipping hereby undertakes to furnish Box Ships with an
alternative instrument and/or to do all such other acts as, in the sole opinion of Box Ships, shall be required in order to ensure and give effect to the full intent of this Agreement. 

17.       Counterparts. This Agreement may be signed in any number of counterparts, each of which
shall be an original with the same effect as if the signatures thereto and hereto were upon the same instrument. 
 IN WITNESS
WHEREOF, this Agreement has been signed by or on behalf of each of the parties as of the day first above written first above written. 
  

			
	PARAGON SHIPPING INC.
		
	By:	 	 
		 	 Name:

Title:

	
	BOX SHIPS INC.
		
	By:	 	 
		 	 Name:

Title:

  
 5

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