Document:

Exhibit 10.3

 

EXECUTION VERSION

	
 
    

 

REGISTRATION RIGHTS AGREEMENT

 

dated as of August  10, 2018

 

among

 

DANAOS CORPORATION

 

and

 

THE STOCKHOLDERS BOUND HEREBY

	
 
    

 

 

TABLE OF CONTENTS

 

	
1.
    	
Certain Definitions
    	
3
    
	
 
    	
 
    	
 
    
	
2.
    	
Registration
    	
7
    
	
 
    	
 
    	
 
    
	
 
    	
2.1
    	
Initial Shelf   Registration
    	
7
    
	
 
    	
2.2
    	
Information Request
    	
8
    
	
 
    	
2.3
    	
Underwritten Takedowns
    	
8
    
	
 
    	
2.4
    	
Underwritten Takedown   Priority
    	
8
    
	
 
    	
2.5
    	
Underwritten Takedown   Minimum Threshold
    	
9
    
	
 
    	
2.6
    	
Underwritten Takedown   Notice to Holders
    	
9
    
	
 
    	
2.7
    	
Demand Registration
    	
9
    
	
 
    	
2.8
    	
Demand Priority
    	
10
    
	
 
    	
2.9
    	
Demand Minimum   Threshold
    	
10
    
	
 
    	
2.10
    	
Demand Notice to   Holders
    	
10
    
	
 
    	
 
    	
 
    
	
3.
    	
Piggy-back Registration
    	
10
    
	
 
    	
 
    	
 
    
	
 
    	
3.1
    	
Right to Piggy-back
    	
10
    
	
 
    	
3.2
    	
Priority on Company   Registrations
    	
11
    
	
 
    	
3.3
    	
Priority on Stockholder   Registrations
    	
11
    
	
 
    	
3.4
    	
Certain Limitations on   Registration Rights
    	
12
    
	
 
    	
 
    	
 
    
	
4.
    	
Registration Procedures
    	
12
    
	
 
    	
 
    	
 
    
	
 
    	
4.1
    	
Company Undertakings
    	
12
    
	
 
    	
4.2
    	
Suspension of   Registration Statement Availability
    	
17
    
	
 
    	
4.3
    	
Registration Expenses
    	
17
    
	
 
    	
4.4
    	
No Required Sale
    	
18
    
	
 
    	
 
    	
 
    
	
5.
    	
Indemnification
    	
18
    
	
 
    	
 
    	
 
    
	
6.
    	
Lockups
    	
21
    
	
 
    	
 
    	
 
    
	
 
    	
6.1
    	
Stockholder Lockup
    	
21
    
	
 
    	
6.2
    	
Permitted Distributions
    	
21
    
	
 
    	
6.3
    	
Lockup Agreement
    	
21
    
	
 
    	
 
    	
 
    
	
7.
    	
General
    	
21
    
	
 
    	
 
    	
 
    
	
 
    	
7.1
    	
Rule 144
    	
21
    
	
 
    	
7.2
    	
Confidentiality
    	
22
    
	
 
    	
7.3
    	
Amendments and Waivers
    	
22
    
	
 
    	
7.4
    	
Notices
    	
22
    
	
 
    	
7.5
    	
Miscellaneous
    	
24
    

 

Exhibit A — Equity Lenders

 

 

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), is made as of August  10, 2018 among Danaos Corporation, a Republic of the Marshall Islands corporation (the “Company”), the holders listed on Exhibit A hereto (together with their successors and permitted assigns, the “Equity Lenders”), and Danaos Investment Limited, an entity incorporated under the laws of New Zealand, as the Trustee of the 883 Trust (the “Plan Sponsor” and, collectively with the Equity Lenders, the “Initial Holders” and, together with the Company, the “parties hereto”).

 

WHEREAS, the Company and its Affiliates entered into a Restructuring Support Agreement, dated as of May 11, 2018 (such agreement, including all the exhibits thereto, as amended, supplemented or otherwise modified from time to time prior to June 19, 2018, the “Original RSA”), regarding a restructuring transaction, pursuant to the terms and conditions set forth in the Original RSA;

 

WHEREAS, after the execution of the Original RSA, the Company engaged in further good faith, arm’s-length negotiations with the parties to the Original RSA and certain other lenders of the Company not party to the Original RSA regarding the terms of an out-of-court restructuring transaction (the “Out-of-Court Restructuring”), pursuant to an amended and restated version of the Original RSA dated June 19, 2018 (as thereafter may be amended, supplemented or otherwise modified from time to time, the “Restructuring Support Agreement”), which Out-of-Court Restructuring will be completed on the Closing Date (as defined in the Restructuring Support Agreement);

 

WHEREAS, on the Closing Date, the Company shall issue 99,342,271 shares of common stock, par value $0.01 per share (the “Common Stock”), to the Equity Lenders (or their nominees) pursuant to the terms of the Out-of-Court Restructuring Term Sheet (as defined in the Restructuring Support Agreement);

 

WHEREAS, the Out-of-Court Restructuring Term Sheet provides that the Company shall file a Registration Statement (as defined below) on or prior to the Closing Date (the “Initial Shelf Registration Statement”), with respect to the resale of Registrable Securities (as defined below); and

 

WHEREAS, in connection with the issuance of the shares of Common Stock and the other transactions contemplated by the Restructuring Support Agreement, the Company has agreed to provide each Holder with the registration rights set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.                                      Certain Definitions.

 

As used in this Agreement, terms defined in the preamble and the recitals shall have their respective meanings, and the following capitalized terms shall have the meanings ascribed to them below:

 

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“Affiliate” shall mean, with respect to any Person, any other Person that 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 “controlled by” and “under common control with”) as used in this definition means the possession, direct or indirect, of the power to direct or cause the direction of management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. For the avoidance of doubt, neither the Company nor any of its subsidiaries shall be deemed an “Affiliate” of the Plan Sponsor or any of its Affiliates and vice versa. In this Agreement, Affiliate shall also be deemed to include, with respect to HSH Nordbank and its subsidiaries only, (i) the following entities or any investment funds managed or advised by any of them: Cerberus Capital Management, LP, J.C. Flowers & Co. LLC, GoldenTree Asset Management LP, Centaurus Capital LP and / or Austrian bank BAWAG P.S.K., and (ii) any Affiliates and / or limited partners of any such entities or investment funds, provided that the purchase of HSH Nordbank by Affiliates of Cerberus Capital Management, LP, J.C. Flowers & Co. LLC, GoldenTree Asset Management LP, Centaurus Capital LP and Austrian bank BAWAG P.S.K., has been completed.

 

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for general business in each of (a) London, United Kingdom, (b) Athens, Greece, (c) New York City, United States, and (d) Hamburg, Germany.

 

“Claims” has the meaning set forth in Section 5(a).

 

“Commission” means the U.S. Securities and Exchange Commission or any successor agency or government body performing the functions currently performed by the United States Securities and Exchange Commission.

 

“Common Stock” means the common stock, par value $0.01 per share, of the Company and any securities issued or issuable in exchange for or with respect to the common stock of the Company by way of a stock dividend, stock split or combination of shares or in connection with a reclassification, recapitalization, exchange, merger, consolidation or other reorganization.

 

“Demand Initiating Holder” has the meaning set forth in Section 2.7.

 

“Demand Registration” has the meaning set forth in Section 2.7.

 

“Demand Request” has the meaning set forth in Section 2.7.

 

“Effectiveness Period” has the meaning set forth in Section 2.1(d).

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“FINRA” means Financial Industry Regulatory Authority, Inc.

 

“Follow-on Equity Raise” refers to the capital raise in respect of which the Company has undertaken to use commercially reasonable efforts to source investment

 

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commitments for Common Stock of not less than $50 million in aggregate net proceeds to the Company by no later than the Follow-on Equity Raise Deadline.

 

“Follow-on Equity Raise Deadline” means the last Business Day of the 18th full month after the Closing Date.

 

“Governmental Authority” means (a) any court, tribunal, judicial or arbitral body and (b) any government, multilateral organization, international organization, or other industry or self-regulatory organization or any agency, bureau, board, commission, ministry, authority, department, official, political subdivision or other instrumentality thereof, whether federal, state or local, domestic or foreign as well as any Persons owned or chartered by any of the foregoing.

 

“Holder”, “Holders”, “Stockholder” or “Stockholders” means any holder of Registrable Securities from time to time (including any successors or assigns), including, for the avoidance of doubt, the Initial Holders, for so long as such holder owns or is the beneficial owner of any Registrable Securities.

 

“Holders’ Counsel” has the meaning set forth in Section 4.1(a).

 

“Initiating Holder” has the meaning set forth in Section 2.7.

 

“Inspectors” has the meaning set forth in Section 4.1(l).

 

“New York Courts” has the meaning set forth in Section 7.5(f).

 

“Order of Priority” has the meaning set forth in Section 2.4.

 

“Person” shall mean an individual, corporation, partnership, limited liability company, limited liability partnership, syndicate, person, trust, association, organization or other entity, including any Governmental Authority, and including any successor, by merger or otherwise, of any of the foregoing.

 

“Piggy-back Registration” has the meaning set forth in Section 3.1.

 

“Private Placement” has the meaning given to such term in that certain Backstop Agreement, dated as of August        , 2018, among the Company, the Plan Sponsor and Danaos Shipping Company Limited.

 

“Proceeding” has the meaning set forth in Section 7.5(f).

 

“Records” has the meaning set forth in Section 4.1(l).

 

“Registrable Securities” means any shares of Common Stock to be (i) acquired by any Equity Lender in connection with the Out-of-Court Restructuring and any additional shares of Common Stock paid, issued or distributed in respect of such shares by way of any stock splits, reverse stock splits, stock dividends or similar transactions involving the Company’s Common Stock, and (ii) acquired by the Plan Sponsor in connection with the Out-of-Court

 

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Restructuring (including but not limited to the Follow-on Equity Raise or the Private Placement (as applicable)) and at any time following the Closing Date (provided that any shares of Common Stock issued to the Plan Sponsor in respect of any Dividend Reinvestment (as defined in the Stockholders Agreement) shall not be Registrable Securities prior to the time at which all Equity Lenders have been given the opportunity to register their shares of Common Stock issued pursuant to the Out-of-Court Restructuring on a shelf registration statement that has been declared effective) and any additional shares of Common Stock paid, issued or distributed in respect of such shares by way of any stock splits, reverse stock splits, stock dividends or similar transactions involving the Company’s Common Stock; provided, in each case of (i) and (ii), such shares of Common Stock shall cease to be Registrable Securities when (A) a Registration Statement with respect to the sale of such shares shall have been declared effective under the Securities Act and such shares shall have been disposed of in accordance with such Registration Statement or (B) such shares shall have been sold to the public pursuant to Rule 144 and in compliance with the requirements of Rule 144.

 

“Registration Deadline” means the fifth anniversary of the Follow-on Equity Raise Deadline.

 

“Registration Statement” means a registration statement filed pursuant to the Securities Act covering shares of Common Stock.

 

“Rule 144” means Rule 144 promulgated under the Securities Act, as such Rule may be amended from time to time (or any successor provision).

 

“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Shelf Initiating Holder” has the meaning set forth in Section 2.3.

 

“Shelf Registration Statement” means a “shelf” Registration Statement of the Company required to be filed pursuant to the provisions of Section 2 hereof which covers the Registrable Securities on an appropriate form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the Commission, amendments and supplements to such Registration Statement, including post-effective amendments, in each case including the prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

 

“Significant Holder” means, as of any date, any Holder beneficially owning no less than 5% of the then issued and outstanding Common Stock.

 

“Stockholders Agreement” means that certain stockholders agreement, dated on August                                              , 2018, between the Company and the stockholders party thereto from time to time.

 

“Substitute Shelf Registration Statement” has the meaning set forth in Section 2.1(c).

 

“Subsequent Shelf Registration Statement” has the meaning set forth in Section 2.1(e).

 

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“Suspension Period” has the meaning set forth in Section 4.2.

 

“Underwritten Offering” means an offering of Registrable Securities under a Registration Statement in which the Registrable Securities are sold to one or more underwriters for reoffering to the public.

 

“Underwritten Takedown Notice” has the meaning set forth in Section 2.6.

 

“Underwritten Takedown Request” has the meaning set forth in Section 2.3.

 

“Underwritten Takedowns” has the meaning set forth in Section 2.3.

 

2.                                      Registration.

 

2.1                               Initial Shelf Registration. The Company shall:

 

(a)                                 subject to Section 2.2, prepare and cause to be filed with the Commission the Initial Shelf Registration Statement on or prior to the Closing Date, which Shelf Registration Statement shall provide for the registration of, and the sale on a continuous or delayed basis by the Holders of, all of their Registrable Securities;

 

(b)                                 subject to Section 2.2, use its commercially reasonable efforts to cause the Initial Shelf Registration Statement to be declared effective under the Securities Act as soon as practicable and no later than 90 days following the Closing Date, including by requesting the Commission to declare it effective by the Closing Date;

 

(c)                                  file the Initial Shelf Registration Statement on Form F-1; provided, however, that, if the Company becomes eligible to register the Registrable Securities for resale by the Holders on Form F-3 (including a Form F-3 filed as an automatic shelf registration statement (as defined in Rule 405 under the Securities Act)), the Company shall be entitled to amend the Initial Shelf Registration Statement to a Shelf Registration Statement on Form F-3 or file a Shelf Registration Statement on Form F-3 in substitution of the Initial Registration Statement initially filed (a “Substitute Shelf Registration Statement”);

 

(d)                                 use its commercially reasonable efforts to keep the Initial Shelf Registration Statement or Substitute Shelf Registration Statement, as applicable, continuously effective, supplemented and amended as required by the Securities Act in order to ensure that (A) it is available for resales of Registrable Securities by the Holders and (B) it conforms with the requirements of this Agreement and the Securities Act and the rules and regulations of the Commission promulgated thereunder, as announced from time to time, for a period from the date the Initial Shelf Registration Statement is declared effective by the Commission until the earlier of (i) the date that all Registrable Securities covered by such Shelf Registration Statement shall cease to be Registrable Securities and (ii) the Registration Deadline (the “Effectiveness Period”); and

 

(e)                                  if the Initial Shelf Registration Statement or any Substitute Shelf Registration Statement ceases to be effective for any reason at any time during the Effectiveness Period (other than because of the sale of all of the securities registered thereunder), the Company

 

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shall use its commercially reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall within 30 days of such cessation of effectiveness amend such Shelf Registration Statement to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional Shelf Registration Statement covering all of the Registrable Securities (a “Subsequent Shelf Registration Statement”), if the Company is then eligible to use a shelf registration pursuant to Rule 415 under the Securities Act. If a Subsequent Shelf Registration Statement is filed, the Company shall use its commercially reasonable efforts to cause the Subsequent Shelf Registration Statement to be declared effective as soon as practicable after such filing and to keep such Subsequent Shelf Registration Statement continuously effective for the remainder of the Effectiveness Period.

 

2.2                               Information Request. The Company may require that any Holder furnish the Company such information in writing regarding such Holder and the distribution of the Registrable Securities owned or to be owned by such Holder, as the Company may from time to time reasonably request for purposes of inclusion in a Registration Statement (including information required by the Commission) and the furnishing of such information shall be a condition to the inclusion of such Registerable Securities in such Registration Statement, provided that (i) the inability to register any Holder’s Registrable Securities shall not affect the Company’s obligation to register other Holders’ Registrable Securities and (ii) such information is necessary for the Company to effect the registration of the Registrable Securities and shall be used only in connection with such registration.

 

2.3                               Underwritten Takedowns. From the date falling 90 days following the Follow-on Equity Raise Deadline and prior to the Registration Deadline, a Significant Holder (in such capacity a “Shelf Initiating Holder”) may request up to three (3) Underwritten Offerings (“Underwritten Takedowns”) pursuant to a Shelf Registration Statement (each, an “Underwritten Takedown Request”). Upon the receipt of an Underwritten Takedown Request, the Company shall facilitate in the manner described in this Agreement the Underwritten Offering covering, subject to Sections 2.4, 2.5 and 2.6, all Registrable Securities with respect to which the Company has received written requests for inclusion therein by Holders within 10 Business Days after the date of the Company’s Underwritten Takedown Notice (as defined below).

 

2.4                               Underwritten Takedown Priority. If Registrable Securities to be sold for the account of any Person other than the Shelf Initiating Holder are to be included in such Underwritten Takedown, and if, and to the extent that, the managing underwriters of the relevant offering (such managing underwriter to be selected by the Shelf Initiating Holder, or if no such selection is made by the Shelf Initiating Holder, by the Holder (other than the Shelf Initiating Holder) holding the greatest number of Registrable Securities proposed to be sold in such Underwritten Takedown, provided such selection is acceptable to the Company) advise the Company and such Shelf Initiating Holder in writing that, in their opinion, the number of shares of Common Stock proposed to be included in such Underwritten Takedown exceeds the number of shares of Common Stock that can reasonably be expected to be sold in such offering without being likely to have a significant adverse effect on such offering, including the price at which such securities can be sold and the timing and distribution of such securities offered, then the Company shall include in such Underwritten Takedown the number of Registrable Securities

 

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which can be so sold in the following order of priority (the “Order of Priority”), up to the maximum amount of Registrable Securities to be offered:

 

(a)                                 first, any Registrable Securities requested to be included in such request by the Initiating Holder (as defined below);

 

(b)                                 second (after full inclusion of all Registrable Securities referred to in item (a)), any Registrable Securities requested to be included in the Underwritten Takedown or Demand Registration, as applicable, by any other Holder other than the Plan Sponsor and its Affiliates or transferees; and

 

(c)                                  third (after full inclusion of all Registrable Securities referred to in items (a) and (b)), any Registrable Securities requested to be included by any other Persons, including the Company and the Plan Sponsor and its Affiliates or transferees (in the event the Plan Sponsor is not the Initiating Holder),

 

allocated, in the case of (b) and (c), pro rata among such Persons on the basis of the number of Registrable Securities initially proposed to be included by each such Person in such Underwritten Takedown or Demand Registration, as applicable.

 

2.5                               Underwritten Takedown Minimum Threshold. If a Shelf Initiating Holder is selling less than all of its Registrable Securities, the expected aggregate gross proceeds to such Shelf Initiating Holder from any offering made pursuant to a Underwritten Takedown Request may not be less than $25 million (based upon the average of the last sale prices of the Common Stock for the 15 trading days immediately prior to the date of the Underwritten Takedown Request).

 

2.6                               Underwritten Takedown Notice to Holders. Following receipt of, and no later than 10 Business Days following, any such Underwritten Takedown Request from a Shelf Initiating Holder, the Company shall provide all other Holders with notice of such request (the “Underwritten Takedown Notice”) and such other Holders may elect to have their Registrable Securities sold in such offering; provided, however, they notify the Company in writing of such election within 10 Business Days following the date of the Company’s Underwritten Takedown Notice (such election notice shall specify the maximum number of Registrable Securities intended to be disposed of by such Holder) and provided that no such notice need be provided to any Holder who has previously declined to have their Registrable Securities registered in such Shelf Registration Statement.

 

2.7                               Demand Registration. If during the period commencing from the date falling 90 days after completion of the Follow-on Equity Raise (or such shorter period as may be agreed by the managing underwriters of the Follow-on Equity Raise) and prior to the Registration Deadline, the Company does not have a then-effective Shelf Registration Statement for the resale of any Registrable Securities held by Holders, then any Significant Holder may make up to three (3) requests (such holder a “Demand Initiating Holder” and together with any Shelf Initiating Holder, the “Initiating Holder”) to the Company to sell all or part of such Demand Initiating Holder’s shares of Common Stock (a “Demand Request”) pursuant to a Registration Statement on Form F-1 or other appropriate registration form available to the Company, including an

 

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automatic shelf registration statement if the Company is then a well-known seasoned issuer (as defined in Rule 405 under the Securities Act) (each a “Demand Registration”). Upon the receipt of a Demand Request, the Company shall effect the Demand Registration in accordance with the provisions of the Securities Act covering, subject to Sections 2.8, 2.9 and 2.10, all Registrable Securities with respect to which the Company has received written requests for inclusion therein within 10 Business Days after the date of the Company’s Demand Notice (as defined below).

 

2.8                               Demand Priority. If Registrable Securities to be sold in an Underwritten Offering for the account of any Person other than the Demand Initiating Holder are included in such Demand Registration, and if, and to the extent that, the managing underwriters of the offering (such managing underwriter to be selected by the Demand Initiating Holder, or if no such selection is made by the Demand Initiating Holder, by the Holder (other than the Demand Initiating Holder) holding the greatest number of Registrable Securities proposed to be sold in such Demand Registration, provided such selection is acceptable to the Company) advise the Company and such Demand Initiating Holder in writing that, in their opinion, the amount of Registrable Securities proposed to be included in such Demand Registration exceeds the amount of Registrable Securities that can reasonably be expected to be sold in such offering without being likely to have a significant adverse effect on such offering, including the price at which such securities can be sold and the timing and distribution of such securities offered, then the Company shall include in such Demand Registration the number of Registrable Securities which can be so sold in the Order of Priority up to the maximum amount of Registrable Securities to be offered.

 

2.9                               Demand Minimum Threshold. If a Demand Initiating Holder is selling less than all of its Registrable Securities, the aggregate expected gross proceeds to such Demand Initiating Holder from any offering made pursuant to a Demand Request may not be less than $25 million (based upon the average of the last trading price of the Common Stock for the 15 trading days immediately prior to the date of the written notice from the Demand Initiating Holder to the Company making the Demand Request).

 

2.10                        Demand Notice to Holders. Following receipt of, and in any event no later than 10 Business Days following, any such Demand Request from a Demand Initiating Holder, the Company shall provide all other Holders with notice of such request (the “Demand Notice”) and such other Holders may elect to have their Registrable Securities included in such offering; provided, however, they notify the Company in writing of such election within 10 Business Days following the date of the Company’s Demand Notice (such election notice shall specify the maximum number of Registrable Securities intended to be disposed of by such Holder).

 

3.                                      Piggy-back Registration.

 

3.1                               Right to Piggy-back. If at any time during the period commencing from the date falling 90 days after completion of the Follow-on Equity Raise (or such shorter period as may be agreed by the managing underwriters of the Follow-on Equity Raise) and prior to the Registration Deadline, the Company proposes to effect an underwritten public offering of its Common Stock, the Company will give prompt written notice to each Holder of its intention to effect such underwritten public offering and will include in such underwritten public offering

 

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and on any Registration Statement the Company proposes to file in respect of such offering (a “Piggy-back Registration”) all Registrable Securities with respect to which the Company has received written requests for inclusion therein within 10 Business Days after the receipt of the Company’s notice; provided, however, they notify the Company in writing of such election within 10 Business Days following the date of the Company’s notice (such election requests shall specify the maximum number of Registrable Securities intended to be disposed of by such Holder); provided further, however, that in the case of the filing of a Registration Statement, such Registrable Securities are not otherwise registered pursuant to an existing and effective Shelf Registration Statement under this Agreement.

 

3.2                               Priority on Company Registrations. If a Piggy-back Registration is an underwritten offering on behalf of the Company, and the managing underwriters advise the Company in writing that in their good faith opinion the number of securities requested to be included in such Piggy-back Registration exceeds the largest number of securities which can be sold without having a significant adverse effect on such offering, including the price at which such securities can be sold and the timing and distribution of such securities offered, the Company will include in such offering and registration the number of Registrable Securities which can be so sold in such offering in the following order of priority, up to the maximum amount of Registrable Securities to be offered:

 

(a)                                 first, the shares of Common Stock that the Company proposes to sell in such offering;

 

(b)                                 second (after full inclusion of all Common Stock referred to in item (a)), any Registrable Securities requested to be included therein by any Holder; and

 

(c)                                  third (after full inclusion of all Common Stock referred to in item (a) and the Registrable Securities referred to in item (b)), any shares of Common Stock requested to be included therein by any other holders of shares of Common Stock,

 

allocated, in the case of (b) and (c), pro rata among such holders on the basis of the number of shares of Common Stock initially proposed to be included by each such holder in such offering.

 

3.3                               Priority on Stockholder Registrations. If a Piggy-back Registration is an underwritten secondary sale and registration on behalf of a Person to whom the Company has a contractual obligation to facilitate such offering (other than the Holders) and the managing underwriters advise the Company in writing that in their good faith opinion the number of securities requested to be included in such registration exceeds the largest number of securities which can be sold without having a significant adverse effect on such offering, including the price at which such securities can be sold and the timing and distribution of such securities offered, the Company will include in such offering and registration:

 

(a)                                 first, the Common Stock that the Person demanding the offering proposes to sell in such offering;

 

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(b)                                 second (after full inclusion of all Common Stock referred to in item (a)), any Common Stock proposed to be sold for the account of the Company or any Registrable Securities proposed to be sold for the account of a Holder in such offering; and

 

(c)                                  third (after full inclusion of all Common Stock referred to in items (a) and (b)), any Common Stock required to be included in such offering by any other Person to whom the Company has a contractual obligation to facilitate such offering,

 

allocated, in the case of (b) and (c), pro rata among the Company and such holders on the basis of the number of shares of Common Stock initially proposed to be included by the Company and each such holder in such offering.

 

3.4                               Certain Limitations on Registration Rights. In the case of a registration under Sections 2.3, 2.7 and 3.1, if the Company determines to enter into an underwriting agreement in connection therewith, all securities to be offered pursuant thereto shall be subject to an underwriting agreement and no Holder may participate in such offering unless such Holder agrees to sell such Holder’s securities on the basis provided therein and completes and executes all reasonable questionnaires, and other documents (including custody agreements and powers of attorney) which must be executed in connection therewith, and provides such other information to the Company or the managing underwriter as may be reasonably necessary to register and offer such Holder’s securities.

 

4.                                      Registration Procedures.

 

4.1                               Company Undertakings. In connection with its obligations under Sections 2 and 3 hereof, the Company shall:

 

(a)                                 furnish, before filing a Registration Statement (including the Initial Shelf Registration Statement and Substitute Shelf Registration Statement, as applicable, or after the Company has received written requests for inclusion of Registrable Securities pursuant to Sections 2 or 3 hereof) or prospectus or any amendments or supplements thereto, or comparable statements under securities or blue sky laws of any jurisdiction, or any free writing prospectus related thereto, in each case relating to Registrable Securities, to one counsel (“Holders’ Counsel”) for the relevant Holders (selected by Holders holding more than 50% of the Registrable Securities or, in the case of a Piggy-back Registration, Holders holding more than 50% of the Registrable Securities participating in such Piggy-back Registration) copies of all such documents proposed to be filed (including all exhibits thereto), which documents will be subject to the review and reasonable comment of such counsel, and the Company shall not file the Registration Statement or amendment thereto, any prospectus or supplement thereto, comparable statements under securities or blue sky laws of any jurisdiction or any free writing prospectus related thereto to which a majority of the Holders (or, in the case of a Piggy-back Registration, Holders holding more than 50% of the Registrable Securities participating in such Piggy-back Registration) shall reasonably object;

 

(b)                                 prepare and file with the Commission the requisite Registration Statement to effect such registration and thereafter use its commercially reasonable efforts to cause such

 

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Registration Statement to become and remain effective, subject to the limitations contained herein;

 

(c)                                  prepare and file with the Commission such amendments (excluding any post-effective amendments) and supplements to the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration) and the prospectus used in connection therewith as may be necessary to (i) keep the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration) effective and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all Registrable Securities covered by the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration) in accordance with the intended methods of disposition by the relevant Holders thereof set forth in the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration); and (ii) to reflect any changes to the information provided by Holders to be included in such Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration) or, to the extent permitted under rules and regulations of the Commission, to add new Holders to the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration);

 

(d)                                 furnish, without charge, to each Holder and any managing underwriter such number of copies of the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration), each amendment (excluding any post-effective amendments) and supplement thereto (in each case including all exhibits), the prospectus (including each preliminary prospectus) included in the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration) in conformity with the requirements of the Securities Act, each free writing prospectus utilized in connection therewith, and other documents, as such Holder may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by such Holder; the Company consents to the use of the prospectus included in a Shelf Registration Statement and any amendment or supplement thereto by each of the Holders in connection with the offer and sale of the Registrable Securities covered by a Shelf Registration Statement;

 

(e)                                  register or qualify the Registrable Securities under such other securities or “blue sky” laws of such jurisdiction where the Common Stock is listed for trading, and to do any and all other acts and things which may be reasonably necessary or advisable to enable such Holder to consummate the disposition of the relevant Registrable Securities in such jurisdiction, except that in no event shall the Company be required to qualify to do business as a foreign corporation in any jurisdiction where it would not, but for the requirements of this paragraph (e), be required to be so qualified, to subject itself to taxation in any such jurisdiction or to consent to general service of process in any such jurisdiction;

 

(f)                                   promptly notify each Holder (which notice pursuant to clauses (ii) through (v) hereof shall be accompanied by an instruction to suspend the use of the prospectus related to the Shelf Registration Statement or any Piggy-back Registration until the Company shall have remedied the basis for such suspension): (i) when the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration), any pre-effective amendment, the prospectus or any prospectus supplement related thereto, any post-effective

 

13

 

amendment to the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration) or any free writing prospectus has been filed and, with respect to such Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration) or any post-effective amendment thereto, when the same has become effective; (ii) of any request by the Commission or any state securities authority for amendments or supplements to the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration) or the prospectus related thereto or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration) or the initiation of any proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the securities or blue sky laws of any jurisdiction or the initiation of any proceeding for such purpose; and (v) of the existence of any fact of which the Company becomes aware which, based on advice of the Company’s counsel, results in the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration), any prospectus related thereto or any document incorporated therein by reference containing an untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make any statement therein not misleading; and, if the notification relates to an event described in clause (v), the Company shall promptly prepare and furnish to each Holder a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an 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 the light of the circumstances under which they were made not misleading;

 

(g)                                  use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration);

 

(h)                                 use its commercially reasonable efforts to cause all Registrable Securities covered by the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration) to be listed on the New York Stock Exchange, if the Common Stock is then listed thereon, or the principal securities exchange on which the Common Stock is then listed;

 

(i)                                     make generally available to its security holders an earnings statement satisfying the provisions of Section 11(a) of the Securities Act as soon as practicable after the effective date of the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration) and in any event no later than 180 days after the end of a 12-month period beginning with the first month of the Company’s first fiscal quarter commencing after the effective date of the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration);

 

(j)                                    if requested by any Holder, promptly incorporate in the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration) or related prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holders may reasonably request to have included therein, including,

 

14

 

without limitation, information relating to the “Plan of Distribution” of the Registrable Securities; provided, however, that nothing herein shall be deemed to require the Company to participate in any Underwritten Offering of any Registrable Securities or to include information relating to an Underwritten Offering in the Plan of Distribution other than as set forth in Section 3 hereof;

 

(k)                                 if a Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration) is filed pursuant to Section 2 or 3 hereof, enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in underwritten offerings of equity securities similar to the Common Stock, as may be appropriate in the circumstances) and take all such other actions in connection therewith (including those reasonably requested in writing by the managing underwriters, if any, or the Holders of a majority of the Registrable Securities being sold or Holders’ Counsel) in order to expedite or facilitate the registration or the disposition of such Registrable Securities, and in such connection, whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Offering, (i) make such representations and warranties to the underwriters, if any, with respect to the business of the Company and its subsidiaries as then conducted, and the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration), any prospectus and the documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings of equity securities similar to the Common Stock, as may be appropriate in the circumstances, and confirm the same if and when reasonably required; (ii) obtain an opinion of counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any), addressed to each of the managing underwriters, if any, covering the matters customarily covered in opinions of counsel to the issuer requested in underwritten offerings of equity securities similar to the Common Stock, as may be appropriate in the circumstances; (iii) obtain “comfort” letters and updates thereof (which letters and updates (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any) from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired or to be acquired by the Company for which financial statements and financial data are, or are required to be, included in the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration)), addressed to each of the managing underwriters, such letters to be in customary form and covering matters of the type customarily covered in “comfort” letters in connection with underwritten offerings of equity securities similar to the Common Stock, as may be appropriate in the circumstances, and such other matters as reasonably requested in writing by the managing underwriters; and (iv) deliver such documents and certificates as are customary and may be reasonably requested in writing by the managing underwriters, to evidence the continued validity of the representations and warranties of the Company and its subsidiaries made pursuant to clause (i) above and to evidence compliance with any conditions contained in the underwriting agreement or other similar agreement entered into by the Company;

 

(l)                                     if reasonably requested by the managing underwriters, if any, as applicable, and subject to the receipt, if reasonably requested by the Company, of confidentiality agreements in customary form and subject to customary exceptions, make available for

 

15

 

inspection by representatives of the managing underwriters, if any (including, without limitation, their legal counsel) (collectively, the “Inspectors”), electronically or at the offices where normally kept, during reasonable business hours and in a reasonable manner, all financial and other records and pertinent corporate documents of the Company and its subsidiaries (collectively, the “Records”) as shall be reasonably necessary to enable them to exercise any applicable due diligence responsibilities, and cause the officers, directors and employees of the Company and its subsidiaries to supply all information reasonably requested in writing by any such Inspector in connection with such Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration); provided that, unless the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, the Company shall not be required to provide any information under this clause (l) if the Company believes, after consultation with counsel for the Company, that to do so would cause the Company to forfeit an attorney-client privilege that was applicable to such information. Each Inspector shall agree in writing that it will keep the Records strictly confidential and not disclose any of the Records except to the extent the information in such Records is public or has been made generally available to the public other than as a result of a disclosure or failure to safeguard by such Inspector. Each Inspector and each managing underwriter will be required to agree that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Company unless and until such is made generally available to the public. Each Inspector, each selling Holder and the managing underwriters will be required to further agree that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to the Company and, to the extent practicable, use its reasonable best efforts to allow the Company, at its expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential;

 

(m)                             in the case of an Underwritten Offering, make senior management of the Company reasonably available in accordance with customary practice, to the extent requested by the managing underwriters, to assist in the marketing of the Registrable Securities to be sold in such Underwritten Offering, including the participation of such members of senior management of the Company in “road show” presentations and other customary marketing activities; provided, however, that the Company shall not be required to participate in any marketing effort that is longer than four (4) Business Days or requires face to face meeting with investors more than once every ninety (90) days and no more than twice in a twelve (12) month period;

 

(n)                                 cooperate and assist in any filings required to be made with the FINRA;

 

(o)                                 cooperate with the relevant Holders, to facilitate the timely preparation and delivery of certificates not bearing any restrictive legends representing the Registrable Securities to be sold, and cause such Registrable Securities to be issued in such denominations and registered in such names in accordance with the instructions of the relevant Holders at least three (3) Business Days prior to any sale of Registrable Securities and instruct any transfer agent and registrar of Registrable Securities to release any stop transfer orders in respect thereof; and

 

(p)                                 otherwise use its commercially reasonable efforts to take all other steps necessary to effect the registration of such Registrable Securities contemplated hereby and maintain (or re-apply for the) listing of the Common Stock on the New York Stock Exchange.

 

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Each Holder agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in clauses (ii) through (v) of paragraph (f) of Section 4.1, such Holder will (x) discontinue disposing Registrable Securities pursuant to the Shelf Registration Statement (or any relevant registration statement in connection with a Piggy-back Registration or Demand Registration) covering such Registrable Securities until the Company has remedied the basis for such suspension and, to the extent applicable, such Holder receives copies of the supplemented or amended prospectus contemplated by paragraph (f) of Section 4.1 and (y) if so directed by the Company, deliver to the Company (at the Company’s expense) all copies, other than permanent file copies, in such Holder’s possession of the prospectus covering such Registrable Securities that was in effect at the time of receipt of such notice.

 

4.2                               Suspension of Registration Statement Availability. The Company may suspend the use of a Registration Statement required to be filed under Section 2.7 or suspend the use of a Shelf Registration Statement or, in either case, the prospectus that is a part thereof if (i) the Board of Directors of the Company, in its good faith judgment, determines that any registration of Registrable Securities should not be made or continued because it would materially interfere with any material financing, acquisition, corporate reorganization, merger, share exchange or other transaction or event involving the Company or any of its subsidiaries or because the Company (on the basis of written advice of outside counsel) has material, confidential information that would be required to be disclosed in such Registration Statement and which the Board of Directors of the Company deems reasonably inappropriate to disclose at such time, (ii) there has occurred an event or some other fact exists as a result of which, based on advice of the Company’s counsel, such Registration Statement or any document incorporated by reference therein, shall contain any untrue statement of a material fact or omit to state any 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, or (iii) the Commission or any U.S. state securities commission issues a stop order in respect of the Registration Statement or otherwise prohibits the use of the related prospectus (each such period, a “Suspension Period”). Upon such suspension, the Company shall give written notice to the Holders that the availability of the Registration Statement is suspended and, upon actual receipt of any such notice, each Holder agrees not to sell any Registrable Securities pursuant to such Registration Statement until such Holder’s receipt of copies of the supplemented or amended prospectus. A Suspension Period shall not exceed 45 days and all Suspension Periods shall not exceed an aggregate of 90 days in any 360-day period. The Company shall not be required to specify in the written notice to the Holders the nature of the event giving rise to the Suspension Period. Holders may recommence effecting sales of the Registrable Securities pursuant to a Registration Statement following further written notice from the Company that the Suspension Period has been lifted, which written notice shall be delivered as promptly as practicable after the reason for suspension no longer exists. If the Company shall give any notice of suspension by reason of clause (i) above, the Company shall not, during the Suspension Period, register any Common Stock, other than pursuant to a Registration Statement on Form F-4, S-4 or S-8 (or an equivalent registration form then in effect).

 

4.3                               Registration Expenses. The Company shall bear all expenses incurred in connection with the performance of its obligations under Sections 2, 3 and 4 hereof, including, without limitation, (i) Commission, stock exchange and FINRA registration and filing fees, (ii) all fees and expenses incurred in complying with securities or “blue sky” laws (including

 

17

 

reasonable fees, charges and disbursements of counsel to any underwriter incurred in connection with “blue sky” qualifications of the Registrable Securities as may be set forth in any underwriting agreement), (iii) the reasonable fees, charges and expenses of the Holders’ Counsel (including without limitation the fees, charges and expenses incurred in connection with any amendments to a Registration Statement), and (iv) the reasonable fees, charges and expenses of counsel to the Company and of its independent certified public accountants and any other accounting fees, charges and expenses incurred by the Company (including, without limitation, any expenses arising from any “cold comfort” letters or any special audits incident to or required by any registration or qualification), regardless of whether such Registration Statement is declared effective. The Holders will bear their individual selling expenses, including commissions and discounts and transfer taxes.

 

4.4                               No Required Sale. Nothing in this Agreement shall be deemed to create an independent obligation on the part of any Holder to sell any Registrable Securities.

 

5.                                      Indemnification.

 

(a)                                 The Company will, and hereby agrees to, indemnify and hold harmless, to the fullest extent permitted by law, each Holder and its respective directors, officers, fiduciaries, managing directors, employees, agents, affiliates, consultants, representatives, successors, assigns, stockholders, members or general and limited partners (and the directors, officers, employees and stockholders thereof), and each other Person, if any, who controls such Holder within the meaning of the Securities Act, from and against any and all losses, claims, damages or liabilities, joint or several, actions, proceedings or any investigation or proceeding by any governmental agency or body (whether commenced or threatened) and expenses (including reasonable fees of counsel and any amounts paid in any settlement effected with the Company’s consent, which consent shall not be unreasonably withheld or delayed) to which each such indemnified party may become subject under the Securities Act or otherwise (collectively, “Claims”), to the extent such Claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact in, or omission or alleged omission of a material fact required to be included therein or necessary to make the statements therein not misleading from, a Shelf Registration Statement (or any relevant Registration Statement in connection with a Demand Registration or Piggy-back Registration) or amendment thereof or supplement thereto or any prospectus contained therein or any preliminary, final or summary prospectus or free writing prospectus utilized in connection therewith, and the Company will reimburse any such indemnified party for any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such Claim as such expenses are incurred; provided, however, that the Company shall not be liable to any such indemnified party in any such case to the extent such Claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact or omission or alleged omission of a material fact made in the Shelf Registration Statement (or any relevant Registration Statement in connection with a Demand Registration or Piggy-back Registration) or amendment thereof or supplement thereto or in any such prospectus or any preliminary, final or summary prospectus or free writing prospectus in reliance upon and in conformity with written information relating to such Holder furnished to the Company by or on behalf of such indemnified party specifically for use therein. Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of

 

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any investigation made by or on behalf of such indemnified party and shall survive the transfer of such securities by such Holder.

 

(b)                                 Each Holder shall, severally and not jointly, indemnify and hold harmless (in the same manner and to the same extent as set forth in paragraph (a) of Section 5) to the extent permitted by law the Company, its officers and directors, each Person controlling the Company within the meaning of the Securities Act and all other prospective sellers and their respective directors, officers, fiduciaries, managing directors, employees, agents, affiliates, consultants, representatives, successors, assigns, general and limited partners, stockholders and respective controlling Persons with respect to any untrue statement or alleged untrue statement of any material fact in, or omission or alleged omission of any material fact required to be included therein or necessary to make the statements therein not misleading from, the Shelf Registration Statement, or any relevant Registration Statement in connection with a Demand Registration or Piggy-back Registration, any preliminary, final or summary prospectus contained therein, or any amendment or supplement thereto, or any free writing prospectus utilized in connection therewith, if such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company or its representatives by or on behalf of such Holder specifically for use therein and reimburse such indemnified party for any legal or other expenses reasonably incurred in connection with investigating or defending any such Claim, to the extent such Claim arises out of or is based upon any untrue statement or alleged untrue statement of any material fact in, or omission or alleged omission of any material fact contained in written information relating to any Holder furnished to the Company by or on behalf of such Holder specifically for use therein, as such expenses are incurred; provided, however, that the aggregate amount which any such Holder shall be required to pay pursuant to Section 5(b) and Sections 5(c), (e) and (f) shall in no case be greater than the amount of the net proceeds received by such Holder upon the sale of the Registrable Securities pursuant to the Shelf Registration Statement (or any relevant Registration Statement in connection with a Piggy-back Registration or Demand Registration) giving rise to such Claim. Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified party and shall survive the transfer of such Registrable Securities by such Holder.

 

(c)                                  Any Person entitled to indemnification under this Agreement shall notify promptly the indemnifying party in writing of the commencement of any action or proceeding with respect to which a claim for indemnification may be made pursuant to Section 5, but the failure of any such Person to provide such notice shall not relieve the indemnifying party of its obligations under the preceding paragraphs of Section 5, unless and to the extent such failure results in the forfeiture by the indemnifying party of substantial rights and defenses, and shall not relieve the indemnifying party from any liability which it may have to any such Person otherwise than under this Section 5. In case any action or proceeding is brought against an indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, unless in the reasonable opinion of outside counsel to the indemnified party a conflict of interest between such indemnified and indemnifying parties may exist in respect of such Claim, to assume the defense thereof jointly with any other indemnifying party similarly notified, to the extent that it chooses, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party that it so chooses, the indemnifying party shall not be liable to such

 

19

 

indemnified party for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that (i) if the indemnifying party fails to take reasonable steps necessary to defend diligently the action or proceeding within 20 days after receiving notice from such indemnified party; or (ii) if such indemnified party who is a defendant in any action or proceeding which is also brought against the indemnifying party reasonably shall have concluded that there may be one or more legal defenses available to such indemnified party which are not available to the indemnifying party; or (iii) if representation of both parties by the same counsel is otherwise inappropriate under applicable standards of professional conduct, then, in any such case, the indemnified party shall have the right to assume or continue its own defense as set forth above (but with no more than one firm of counsel for all indemnified parties in each relevant jurisdiction, except to the extent any indemnified party or parties reasonably shall have concluded that there may be legal defenses available to such party or parties which are not available to the other indemnified parties or to the extent representation of all indemnified parties by the same counsel is otherwise inappropriate under applicable standards of professional conduct) and the indemnifying party shall be liable for any expenses therefor. No indemnifying party shall, without the written consent of the indemnified party, which consent shall not be unreasonably withheld, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or proceeding) unless such settlement, compromise or judgment (A) includes an unconditional release of the indemnified party from all liability arising out of such action or proceeding and (B) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.

 

(d)                                 If for any reason the foregoing indemnity is unavailable or is insufficient to hold harmless an indemnified party under Sections 5(a), (b) or (c), then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of any Claim in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and the indemnified party, on the other hand, with respect to such offering of securities. The relative fault 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 the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. If, however, the allocation provided in the second preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative faults but also the relative benefits of the indemnifying party and the indemnified party as well as any other relevant equitable considerations. The parties hereto agree that it would not be just and equitable if contributions pursuant to Section 5(d) were to be determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the preceding sentences of Section 5(d). The amount paid or payable in respect of any Claim shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such Claim. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

 

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Notwithstanding anything in Section 5(d) to the contrary, no indemnifying party (other than the Company) shall be required pursuant to Section 5(d) to contribute any amount in excess of the net proceeds received by such indemnifying party from the sale of Registrable Securities in the offering to which the losses, claims, damages or liabilities of the indemnified parties relate, less the amount of any indemnification payment made by such indemnifying party pursuant to Sections 5(a) and (b).

 

(e)                                  The indemnity and contribution agreements contained herein shall be in addition to any other rights to indemnification or contribution which any indemnified party may have pursuant to law or contract and shall remain operative and in full force and effect regardless of any investigation made or omitted by or on behalf of any indemnified party and shall survive the transfer of any Registrable Securities by any such party.

 

(f)                                   The indemnification and contribution required by Section 5 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred.

 

6.                                      Lockups.

 

6.1                               Stockholder Lockup. In connection with the Follow-on Equity Raise, any Underwritten Takedown, or underwritten registration pursuant to a Demand Registration request, except with the written consent of the underwriters managing such offering, no Holder shall effect any public sale or distribution (including sales pursuant to Rule 144) of equity securities of the Company, or any securities convertible into or exchangeable or exercisable for such securities, during the seven (7) days prior to and the ninety (90)-day period beginning on the date of closing of such offering, or other such shorter period as agreed with the managing underwriter in such offering. Notwithstanding anything to the contrary contained in this Section 6.1, such lock-ups shall provide that each Holder shall be released, pro rata, from any lock-up agreement entered into pursuant to this Section 6.1 in the event and to the extent that the managing underwriter or the Company permit any discretionary waiver or termination of the restrictions of any lock-up agreement pertaining to the Plan Sponsor and its Affiliates.

 

6.2                               Permitted Distributions. Nothing herein will prevent any Holder from making a distribution of Registrable Securities to any of its partners, members or stockholders thereof or a transfer of Registrable Securities to an Affiliate (or in the case of the Plan Sponsor, to any other Person pursuant to Section 7.5(b)) that is otherwise in compliance with the applicable securities laws, so long as such distributees or transferees, as applicable, agree to be bound by the restrictions set forth in this Section 6.

 

6.3                               Lockup Agreement. Each Holder agrees to execute a lock-up agreement in a form reasonably requested by the Company or the offering underwriters in favor of the relevant offering underwriters to the effect of Section 6.1.

 

7.                                      General.

 

7.1                               Rule 144. With a view to making available to the holders of Registrable Securities the benefits of Rule 144 and any other rule or regulation of the Commission that may at any time permit a holder to sell securities of the Company to the public without registration, the Company

 

21

 

shall, so long as it is subject to Section 13 or Section 15(d) of the Exchange Act: (a) use commercially reasonable efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and (b) furnish to any holder so long as the holder owns Registrable Securities, promptly upon request, a written statement by the Company as to its compliance with the reporting requirements of Rule 144 and of the Securities Act and the Exchange Act. The Company agrees with each Holder that if the shares of Common Stock are not listed on a national securities exchange on or within one (1) month of the Closing Date, then for so long as any Registrable Securities remain outstanding and during any period in which the Company is not subject to Section 13 or 15(d) of the Exchange Act, to make available, upon request of any Holder, to such Holder or beneficial owner of Registrable Securities in connection with any sale thereof and any prospective purchaser of such Registrable Securities designated by such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act but only to the extent necessary to permit resales of such Registrable Securities pursuant to Rule 144 by a Person who is not an Affiliate of the Company. In addition, if any Registrable Securities are held by any Stockholder at a time when the Company is not subject to the reporting requirements of Section 13(a) or 15(d) of the Exchange Act, the Company will make publicly available the information specified in Rule 144(c)(2) for the period specified in Rule 144(b)(1)(i).

 

7.2                               Confidentiality. Each Holder of Registrable Securities agrees that it shall treat as confidential the receipt of any notice of an Underwritten Takedown, Demand Registration or Suspension Period and shall not disclose or use the information contained in such notice of an Underwritten Takedown, Demand Registration or Suspension Period without the prior written consent of the Company until such time as the information contained therein is or becomes available to the public generally, other than as a result of disclosure by such Holder in breach of the terms of this Agreement.

 

7.3                               Amendments and Waivers. The terms and provisions of this Agreement may be modified or amended, or any of the provisions hereof waived, temporarily or permanently, in a writing executed and delivered by the Company and of Holders holding more than two-thirds of the Registrable Securities. No waiver of any of the provisions of this Agreement shall be deemed to or shall constitute a waiver of any other provision hereof (whether or not similar). No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof.

 

7.4                               Notices. All notices, requests, claims, demands and other communications required or permitted to be given hereunder will be in writing and will be given when delivered by hand or sent by registered or certified mail (postage prepaid, return receipt requested) or by overnight courier (providing proof of delivery) or by telecopy or electronic mail (providing confirmation of transmission) or will be in writing by first class mail (postage prepaid). All such notices, requests, claims, demands or other communications will be addressed as follows:

 

(a)                                 if to the Company, to:

 

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Danaos Corporation
 c/o Danaos Shipping Co., Ltd.
 14 Akti Kondyli
 185 45 Piraeus, Greece
 Telephone No.: + 30 210 419 6401
 Fax No.: + 30 210 419 6489
 Attention: Chief Executive Officer

E-mail: cfo@danaos.com

 

with a copy, which shall not constitute notice, to:

 

Morgan, Lewis & Bockius LLP

101 Park Avenue

New York, New York 10178

Attn:                    Finnbarr D. Murphy

David A. Sirignano

E-mail:        finnbarr.murphy@morganlewis.com

david.sirignano@morganlewis.com

 

and

 

Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates

4 Times Square

New York, NY 10036

Attn:                    Jay M. Goffman, Esq.

George N. Panagakis, Esq.

Christopher Mallon, Esq.

James Falconer, Esq.

James A. McDonald, Esq.

Maria Protopapa, Esq.

E-mail:        jay.goffman@skadden.com

george.panagakis@skadden.com

chris.mallon@skadden.com

james.falconer@skadden.com

james.mcdonald@skadden.com

maria.protopapa@skadden.com

 

(b)                                 If to the Plan Sponsor, to:

 

Danaos Investment Limited

Bell Gully, Level 22

Vero Centre

48 Shortland Street

Auckland, 1010

New Zealand
  Telephone No.: +30 210 419 6574

Fax No.: +30 210 419 6489

 

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Attention: Board of Directors

E-mail: dil@danaos.nz

 

with a copy, which shall not constitute notice, to:

 

Shearman & Sterling (London) LLP

9 Appold Street

London, EC2A 2AP

Attn:                    Solomon J. Noh, Esq.

George Karafotias, Esq.

E-mail:        solomon.noh@shearman.com

gkarafotias@shearman.com

 

(c)                                  If to the Equity Lenders, at such Equity Lender’s address or to such Equity lender’s telecopy number set forth on Exhibit A hereto;

 

or such other address as the Company or the respective Stockholder shall have specified to the other party in writing in accordance with this Section 7.4.

 

7.5                               Miscellaneous.

 

(a)                                 Status of Issuer. In the event the Company shall cease to be a foreign private issuer (as defined in Rule 3b-4 under the Exchange Act) references to Form F-1 and F-3 shall as applicable be to Form S-1 and S-3.

 

(b)                                 Assignment. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and the respective permitted successors, personal representatives and assigns of the parties hereto, whether so expressed or not. This Agreement may not be assigned by the Holders without the prior written consent of the Company (which consent shall not be unreasonably withheld or delayed). Notwithstanding the foregoing sentence, (A) in connection with any sale or transfer of Registrable Securities by any Holder (excluding the Plan Sponsor), the rights and obligations of the Holder hereunder may be assigned, without the prior written consent of the Company, to any Affiliate of such Holder or any other Person which has become the beneficial owner of such Registrable Securities following such sale or transfer; provided, that (i) such Affiliate or other Person (together with its Affiliate(s)) will hold at least 10% of the issued and outstanding Common Stock following such sale or transfer and (ii) such Affiliate or other Person shall execute an agreement in form and substance reasonably satisfactory to the Company undertaking to become a party to this Agreement and bound by its terms, and provide, in a timely fashion, the information required by Section 2.2  and (B) in connection with any sale or transfer of Registrable Securities by the Plan Sponsor, the rights and obligations of the Plan Sponsor hereunder may be assigned, without the prior written consent of the Company, to any Affiliate of the Plan Sponsor or any other Person which has become the holder of such Registrable Securities following such sale or transfer; provided, that, (i) such Affiliate or other Person shall execute an agreement in form and substance reasonably satisfactory to the Company undertaking to become a party to this Agreement and bound by its terms, and provide, in a timely fashion, the information required by Section 2.2; and (ii) such Affiliate or other Person shall be entitled to all of the rights and

 

24

 

benefits and assume all of the obligations of, and be treated for all purposes hereunder as, a Significant Holder so long as such Affiliate or other Person holds at least 5% of the issued and outstanding Common Stock.

 

(c)                                  Third Party Beneficiaries. No Person, other than the parties hereto and their respective successors and permitted assigns, is intended to be a third-party beneficiary of this Agreement; provided, however, that the parties hereto hereby acknowledge (i) that the Persons set forth in Section 5 shall be express third-party beneficiaries of the obligations of the parties hereto set forth in such Section 5 and (ii) any Holder from time to time shall be a third party beneficiary to the obligations of the Company hereunder, and in each case of clause (i) and (ii) shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary to protect its rights hereunder.

 

(d)                                 Entire Agreement. This Agreement and any certificates, documents, instruments and writings delivered pursuant to or contemplated by this Agreement or the Restructuring Support Agreement (including all applicable Definitive Documentation (as defined in the Restructuring Support Agreement)) represent the entire agreement by and between the Company and the Plan Sponsor with respect to the transactions contemplated by such documents and supersede any prior agreements or understandings, written or oral, between the parties.

 

(e)                                  Governing Law. This Agreement and any claims arising hereunder shall be governed by and construed and enforced in accordance with the laws of the State of New York.

 

(f)                                   Consent to Jurisdiction and Service of Process. With respect to any suit, action or proceeding (“Proceeding”) arising out of or relating to this Agreement each of the parties hereto hereby irrevocably (i) submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York (the “New York Courts”) and waives any objection to venue being laid in the New York Courts whether based on the grounds of forum non conveniens or otherwise and hereby agrees not to commence any such Proceeding other than before one of the New York Courts; provided, however, that a party may commence any Proceeding in a court other than a New York Court solely for the purpose of enforcing an order or judgment issued by one of the New York Courts and (ii) consents to service of process in any Proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, or by recognized international express carrier or delivery service, to the Company or the Stockholder at their respective addresses referred to in Section 7.4; provided, however, that nothing herein shall affect the right of any party hereto to serve process in any other manner permitted by law.

 

(g)                                  WAIVER OF JURY TRIAL. WITH RESPECT TO ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY, TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTER

 

25

 

ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AND AGREES THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS WILL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

 

(h)                                 Headings. The article and section headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. References in this Agreement to a designated “Article” or “Section” refer to an Article or Section of this Agreement unless otherwise specifically indicated.

 

(i)                                     Counterparts. This Agreement may be executed in one or more counterparts, and may be delivered by means of facsimile or electronic transmission in portable document format, each of which shall be deemed to be an original and shall be binding upon the party who executed the same, but all of such counterparts shall constitute the same agreement.

 

(j)                                    Severability. If one or more of the provisions, paragraphs, words, clauses, phrases or sentences contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision, paragraph, word, clause, phrase or sentence in every other respect and of the remaining provisions, paragraphs, words, clauses, phrases or sentences hereof shall not be in any way impaired, it being intended that all rights, powers and privileges of the parties hereto shall be enforceable to the fullest extent permitted by law.

 

(k)                                 Arm’s Length Agreement. Each of the parties to this Agreement agrees and acknowledges that this Agreement has been negotiated in good faith, at arm’s length, and not by any means prohibited by law

 

(l)                                     Further Assurances. Each of the parties agrees to take or cause to be taken all reasonable actions, to do or cause to be done, to execute such further instruments, and to assist and cooperate with the other parties hereto in doing, all things reasonably necessary, proper or advisable under applicable laws or otherwise to consummate and make effective, in an expeditious manner, the agreements, terms and conditions contemplated by this Agreement.

 

[Signature Page Follows]

 

26

 

IN WITNESS WHEREOF, the undersigned parties have duly executed this Agreement as of the date first written above.

 

	
DANAOS CORPORATION
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Evangelos Chatzis
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Evangelos Chatzis
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Chief Financial Officer
    	
 
    

 

[Signature Page to the Registration Rights Agreement]

 

 

IN WITNESS WHEREOF, the undersigned parties have duly executed this Agreement as of the date first written above.

 

	
DANAOS INVESTMENT LIMITED
    	
 
    
	
 
    	
 
    
	
AS TRUSTEE FOR THE 883 TRUST
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Evangelos Chatzis
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Evangelos Chatzis
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Director
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Konstantinos Sfyris
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Konstantinos Sfyris
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Director
    	
 
    

 

[Signature Page to the Registration Rights Agreement]

 

 

IN WITNESS WHEREOF, the undersigned parties have duly executed this Agreement as of the date first written above.

 

	
THE ROYAL BANK OF SCOTLAND PLC
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Karen Drummond
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Karen Drummond
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Director
    	
 
    

 

[Signature Page to the Registration Rights Agreement]

 

 

IN WITNESS WHEREOF, the undersigned parties have duly executed this Agreement as of the date first written above.

 

	
HSH   NORDBANK AG
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Gesa Voight
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Gesa Voight
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Reinhard Günther
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Reinhard Günther
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Director
    	
 
    

 

[Signature Page to the Registration Rights Agreement]

 

 

IN WITNESS WHEREOF, the undersigned parties have duly executed this Agreement as of the date first written above.

 

	
AEGEAN   BALTIC BANK S.A.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Beatrice Russ
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Beatrice Russ
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Attorney in fact
    	
 
    

 

[Signature Page to the Registration Rights Agreement]

 

 

IN WITNESS WHEREOF, the undersigned parties have duly executed this Agreement as of the date first written above.

 

	
PIRAEUS   BANK S.A.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Ioannis Kouroglou
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Ioannis Kouroglou
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorised Signatory
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Kouvara Eugenia
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Kouvara Eugenia
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorised Signatory
    	
 
    

 

[Signature Page to the Registration Rights Agreement]

 

 

IN WITNESS WHEREOF, the undersigned parties have duly executed this Agreement as of the date first written above.

 

	
CITIBANK OVERSEAS INVESTMENT CORPORATION
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ William H. Wolf
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
William H. Wolf
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Executive Vice President
    	
 
    

 

[Signature Page to the Registration Rights Agreement]

 

 

IN WITNESS WHEREOF, the undersigned parties have duly executed this Agreement as of the date first written above.

 

	
CREDIT SUISSE AG
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Vasileios Gkarametsis
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Vasileios Gkarametsis
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Director
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Dr. Sebastian Schäfer
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Dr. Sebastian Schäfer
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Director
    	
 
    
				

 

[Signature Page to the Registration Rights Agreement]

 

 

IN WITNESS WHEREOF, the undersigned parties have duly executed this Agreement as of the date first written above.

 

	
ALLIUM FINANCE S.A.
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Konstantinos Sfyris
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Konstantinos Sfyris
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Director
    	
 
    

 

[Signature Page to the Registration Rights Agreement]

 

 

Exhibit A

 

EQUITY LENDERS

 

	
 
    	
 
    	
Lender name
    	
 
    	
Contact Details
    
	
1.
    	
 
    	
The Royal Bank of Scotland plc
    	
 
    	
Address: 246-250 Regent Street (Argyll House)
    
	
 
    	
 
    	
 
    	
 
    	
London W1B 3BN
    
	
 
    	
 
    	
 
    	
 
    	
United Kingdom
    
	
 
    	
 
    	
 
    	
 
    	
Email: euan.faull1@rbs.com
    
	
 
    	
 
    	
 
    	
 
    	
Attention: Euan James Faull
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
2.
    	
 
    	
HSH Nordbank AG
    	
 
    	
Address: Gerhart-Hauptmann-Platz 50
    
	
 
    	
 
    	
 
    	
 
    	
20095 Hamburg, Germany
    
	
 
    	
 
    	
 
    	
 
    	
Email: peter.sickel@hsh-nordbank.com; gesa.voigt@hsh-nordbank.com
    
	
 
    	
 
    	
 
    	
 
    	
Attention: Peter Sickel; Gesa Voigt
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
3.
    	
 
    	
Citibank Overseas Investment Corporation
    	
 
    	
Address: One Penn’s Way
    
	
 
    	
 
    	
 
    	
 
    	
New Castle, Delaware 19720
    
	
 
    	
 
    	
 
    	
 
    	
United States of America
    
	
 
    	
 
    	
 
    	
 
    	
Email: mary1.williams@citi.com
    
	
 
    	
 
    	
 
    	
 
    	
Attention: Mary Williams
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.
    	
 
    	
Credit Suisse AG
    	
 
    	
Address: c/o CRM IWM — Philipp Martens
    
	
 
    	
 
    	
 
    	
 
    	
Paradeplatz 8
    
	
 
    	
 
    	
 
    	
 
    	
P.O. Box
    
	
 
    	
 
    	
 
    	
 
    	
CH-8070 Zurich, Switzerland
    
	
 
    	
 
    	
 
    	
 
    	
Email: sebastian.schaefer@credit-suisse.com;   philipp.martens@credit-suisse.com
    
	
 
    	
 
    	
 
    	
 
    	
Fax: +41 44 333 09 10
    
	
 
    	
 
    	
 
    	
 
    	
Attention: Sebastian Schaefer / Philipp Martens
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
5.
    	
 
    	
Allium Finance S.A.
    	
 
    	
Address: Trust Company Complex, Ajeltake Road
    
	
 
    	
 
    	
 
    	
 
    	
Ajeltake Island, Majuro
    
	
 
    	
 
    	
 
    	
 
    	
Marshall Islands, MH96960
    
	
 
    	
 
    	
 
    	
 
    	
Email: dimitris.coustas@gmail.com
    
	
 
    	
 
    	
 
    	
 
    	
Attention: Dimitris Coustas
    

 

 

	
6.
    	
 
    	
Piraeus Bank S.A.
    	
 
    	
Address: 109-111 Mesogeion Avenue Gr
    
	
 
    	
 
    	
 
    	
 
    	
115 26 Athens, Greece
    
	
 
    	
 
    	
 
    	
 
    	
Email: shippingrecovery@piraeusbank.gr;   ShippingLoansAdministrator@piraeusbank.gr
    
	
 
    	
 
    	
 
    	
 
    	
Attention: Shipping Recovery; Shipping Loans   Administrator
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
7.
    	
 
    	
Aegean Baltic Bank S.A.
    	
 
    	
Address: 91, Megalou Alexandrou & 25th   Martiou Str.
    
	
 
    	
 
    	
 
    	
 
    	
151 24 Maroussi, Greece
    
	
 
    	
 
    	
 
    	
 
    	
Email: cr.control@ab-bank.com;   business.dvlp@ab-bank.com
    
	
 
    	
 
    	
 
    	
 
    	
Attention: Business DevelopmentExhibit 10.4

 

EXECUTION VERSION

 

DANAOS CORPORATION

 

- and -

 

DANAOS SHIPPING COMPANY LIMITED

 

 

AMENDED AND RESTATED MANAGEMENT AGREEMENT

 

 

 

INDEX

 

	
Section
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1.
    	
INTERPRETATION
    	
2
    
	
2.
    	
APPOINTMENT
    	
4
    
	
3.
    	
THE OWNER’S GENERAL   OBLIGATIONS
    	
4
    
	
4.
    	
THE MANAGER’S GENERAL   OBLIGATIONS
    	
5
    
	
5.
    	
CREWING &   TECHNICAL SERVICES
    	
8
    
	
6.
    	
COMMERCIAL SERVICES
    	
12
    
	
7.
    	
BUDGETS, CORPORATE   PLANNING AND EXPENSES
    	
16
    
	
7A.
    	
BACKSTOP OBLIGATION   CREDIT
    	
18
    
	
8.
    	
LIABILITY AND INDEMNITY
    	
18
    
	
9.
    	
RIGHTS OF THE MANAGER,   RESTRICTIONS ON THE MANAGER’S AUTHORITY, AND NON-COMPETE PROVISIONS
    	
20
    
	
10.
    	
AVAILABILITY OF   OFFICERS
    	
21
    
	
11.
    	
TERMINATION OF THIS   AGREEMENT
    	
22
    
	
12.
    	
SALE AND RIGHT OF FIRST   REFUSAL
    	
24
    
	
13.
    	
NOTICES
    	
25
    
	
14.
    	
APPLICABLE LAW AND   JURISDICTION
    	
25
    
	
15.
    	
ARBITRATION
    	
25
    
	
16.
    	
MISCELLANEOUS
    	
26
    
				

 

 

THIS AMENDED AND RESTATED MANAGEMENT AGREEMENT is made on 10 August 2018,

 

BY AND BETWEEN:

 

1.              DANAOS CORPORATION, a company organized and existing under the laws of the Republic of the Marshall Islands (the “Owner”); and

 

2.              DANAOS SHIPPING COMPANY LIMITED, a company organized and existing under the laws of the Republic of Cyprus (the “Manager”).

 

WHEREAS:

 

(A)                               The Owner has a number of wholly owned subsidiaries identified on Schedule A hereto, as such Schedule A may be amended from time to time (the “Shipowning Subsidiaries”), each of which owns either a containership or a drybulk carrier (the “Vessels”) and certain other direct and indirect subsidiaries identified on Schedule B hereto, as such Schedule B may be amended from time to time (together with the Shipowning Subsidiaries, the “Subsidiaries”).

 

(B)                               The Manager has the benefit of expertise in the containerized cargo vessel industry and in technical and commercial management of containerships and drybulk carriers and administration of shipping companies generally.

 

(C)                               The Owner and the Manager entered into a Management Agreement, made December 16, 2005 and effective July 1, 2005 which was amended on September 18, 2006, as further amended by Addendum No.1 thereto dated February 12, 2009, Addendum No.2 thereto dated February 8, 2010, Addendum No.3 dated December 16, 2011, Addendum No.4 dated December 31, 2012 and Addendum No.5 dated December 16, 2013 and amended and restated as of December 31, 2014, and as further amended and restated as of 1 May 2015 (hereinafter collectively referred to as the “2015 Management Agreement”) and pursuant to which the Manager has represented the Group (as defined below) in its dealings with third parties and provided technical, commercial, administrative and certain other services to the Group as specified therein in connection with the management and administration of the business of the Group.

 

(D)                               The Owner and the Manager desire to amend and restate the terms and conditions of the 2015 Management Agreement and to adopt this Agreement to supersede and replace the 2015 Management Agreement as the agreement pursuant to which the Manager represents the Group in its dealings with third parties and provides technical, commercial, administrative and certain other services to the Group as specified herein in connection with the management and administration of the business of the Group.

 

1

 

(E)                                The Owner and the Manager, amongst others, have entered into a deed of undertaking (the “Undertaking”) on or about the date hereof in favour of the lenders under the Amended RA Facilities  which places certain restrictions on the ability of the Owner and the Manager to amend the terms of this Agreement and the Restrictive Covenant Agreement (as defined below).

 

NOW, THEREFORE, THE PARTIES HEREBY AGREE:

 

1.                                      INTERPRETATION

 

1.1                               In this Agreement, unless the context otherwise requires:

 

“Amended RA Facilities” means each of the following facility agreements (and “Amended RA Facility” refers to any one of them):

 

(a)                                 the $113,957,000.00 loan facility dated on or around the date hereof between, amongst others, the entities listed in Schedule 1 thereto as borrowers, the Owner as guarantor and Citibank, N.A., London Branch as lender;

 

(b)                                 the $123,928,380.00 loan facility dated on or around the date hereof between, amongst others, the entities listed in Schedule 1 thereto as borrowers, the Owner as guarantor and Citibank, N.A., London Branch as lender;

 

(c)                                  the $37,645,000.00 loan facility dated on or around the date hereof between, amongst others, the entities listed in Schedule 1 thereto as borrowers, the Owner as guarantor and the banks and financial institutions listed in Schedule 1 thereto as lenders;

 

(d)                                 the $120,000,000.00 loan facility dated on or around the date here of between, amongst others, the entities listed in Schedule 1 thereto as borrowers, the Owner as guarantor and the banks and Citibank, N.A., London Branch as lender as lender;

 

(e)                                  the $206,213,632.86 loan facility dated on or around the date hereof between, amongst others, the entities listed in Schedule 1 thereto as borrowers, the Owner as guarantor and the banks and financial institutions listed in Schedule 1 thereto as lenders;

 

(f)                                   the $171,783,000.00 loan facility dated on or around the date hereof between, amongst others, the entities listed in Schedule 1 thereto as borrowers, the Owner as guarantor and Credit Suisse A.G. as lender;

 

(g)                                  the $382,510,000 facility amended and restated on or about the date hereof with, inter alios, Danaos as borrower and HSH Nordbank AG, Aegean Baltic Bank S.A. and Piraeus Banks as lenders; and

 

2

 

(h)                                 the $700,000,000.00 facility agreement as amended and restated on or around the date hereof between, amongst others, the Owner, The Royal Bank of Scotland plc as facility agent and NatWest Markets Plc as security agent.

 

“Backstop Agreement” means the backstop agreement by and between the Owner and Danaos Investment Limited (a company incorporated under the law of New Zealand), as the Trustee of the 883 Trust (the “Plan Sponsor”), dated on or around the date hereof.

 

“Board of Directors” means the board of directors of the Owner as the same may be constituted from time to time.

 

“Business Days” means a day (excluding Saturdays and Sundays) on which banks are open for business in Athens, Greece; London, United Kingdom; Cyprus; and New York, New York - United States.

 

“Change of Control Release” shall bear the meaning given to it in the Restrictive Covenant Agreement.

 

“Containership” means any ocean-going vessel that is intended to be used primarily to transport containers or is being used to primarily transport containers.

 

“Drybulk Carrier” means any ocean-going vessel that is intended to be used primarily to transport non-liquid cargoes of commodities shipped in an unpackaged state.

 

“Executive Officers” means the Chief Executive Officer and the President, the Chief Operating Officer, the Chief Financial Officer and the Deputy Chief Operating Officer of the Owner and/or such other officers that may be agreed by the parties thereto after the date of this Agreement from time to time.

 

“Existing Fleet” means the Vessels (as renamed from time to time) set out at Schedule A hereto on the date of this Agreement, and shall not include any Vessels that may be added to Schedule A after the date of this Agreement.

 

“Group” means, at any time, the Owner and the Subsidiaries at such time taking into account the Schedule A and Schedule B in effect at such time and “member of the Group” shall be construed accordingly.

 

“ISM Code” means the International Management Code for the Safe Operation of Ships and for Pollution Prevention as adopted by the International Maritime Organization (IMO) by resolution A.741(18) or any subsequent amendment thereto.

 

“Newbuilding” means a new ship under construction or just completed.

 

“STCW 95” means the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978, as amended in 1995 or any subsequent amendment thereto.

 

3

 

1.2                               The headings of this Agreement are for ease of reference and do not limit or otherwise affect the meaning hereof.

 

1.3                               All the terms of this Agreement, whether so expressed or not, shall be binding upon the parties hereto and their respective successors and assigns.

 

1.4                               In the event of any conflict between this Agreement and any Shipmanagement Agreement (as defined below), the provisions of this Agreement shall prevail.

 

1.5                               Unless otherwise specified, all references to money refer to the legal currency of the United States of America.

 

1.6                               Unless the context otherwise requires, words in the singular include the plural and vice versa.

 

2.                                      APPOINTMENT

 

2.1                               The Manager is hereby appointed by the Owner as the technical, commercial and administrative manager of the Group and hereby accepts such appointment on the terms and conditions of this Agreement.

 

2.2                               With effect from the date hereof and continuing unless and until terminated as provided herein, the Owner hereby appoints the Manager and the Manager hereby agrees to act as the Manager of each Vessel.

 

2.3                               The Manager undertakes to use its best endeavors to provide the Crewing & Technical Services specified in Section 5 of this Agreement and the Commercial Services specified in Section 6 of this Agreement, on behalf of the Owner in accordance with sound ship management practice.

 

2.4                               The Manager may, with the consent of the Owner, appoint any person or entity (a “Submanager”) at any time throughout the duration of this Agreement to discharge any of the Manager’s duties.

 

2.5                               The Manager covenants with the Owner to ensure that each Submanager shall at all times properly exercise and perform the powers, rights and duties so conferred on it. The Manager’s power to delegate performance of any provision of this Agreement hereunder is without prejudice to the Manager’s liability to the Owner to perform such Agreement with the intention that the Manager shall remain responsible to the Owner for the due and timely performance of all duties and responsibilities of the Manager hereunder.

 

3.                                      THE OWNER’S GENERAL OBLIGATIONS

 

3.1                               The Owner shall notify the Manager as soon as possible of any change in the Group as a result of the purchase of any Vessel or Newbuilding, the sale of any Vessel, the purchase or sale of any direct or indirect subsidiary, the creation or divestiture of any subsidiary, or any other structural change and shall promptly

 

4

 

amend Schedule A and Schedule B hereto, as applicable, to be reflective of any such change. Such amended Schedule A or Schedule B shall be effective on any such day as mutually agreed by the Owner and the Manager, which date shall be no later than five calendar days after delivery of such amended Schedule A or Schedule B to the Manager by the Owner.

 

4.                                      THE MANAGER’S GENERAL OBLIGATIONS

 

4.1                               The Manager shall, on behalf of the Group, attend to the day-to-day management of the Vessels in accordance with sound technical and commercial shipping industry standards.

 

4.2                               In the exercise of its duties hereunder, the Manager shall act fully in accordance with the reasonable policies, guidelines and instructions from time to time communicated to it by the Group and serve the Group faithfully and diligently in the performance of this Agreement, exercising all due care, loyalty, skill and diligence to carry out its duties under this Agreement according to sound technical and commercial shipping industry standards.

 

4.3                               For each Vessel now or hereinafter owned by any member of the Group, the Owner shall cause each Subsidiary to enter with the Manager into a contract substantially in the form attached hereto as Appendix I (each a “Shipmanagement Agreement” and collectively the “Shipmanagement Agreements”), with such alterations and additions as are appropriate (provided, that any alterations or additions which materially vary from such form shall require the approval of the Board of Directors of the Owner), and the Manager shall act and do all and/or any of the following acts or things described in this Agreement and each Shipmanagement Agreement in the name and/or on behalf of the Owner and/or its Subsidiaries in all parts of the world directly or through its agents.

 

4.4                               For each Vessel sold or scrapped by any Subsidiary, the Owner shall cause each such Subsidiary to terminate promptly thereafter its applicable Shipmanagement Agreement with the Manager and the Manager agrees to terminate promptly such Shipmanagement Agreement accordingly. Upon expiry of this Agreement, the Manager shall continue to handle all outstanding matters relating to the sale or scrapping of the Group’s Vessels for as long as the Owner requires and in such case the management fee will be reduced by two-thirds (2/3) for the period following the expiry of this Agreement.

 

4.5                               The Manager acknowledges that the services it will provide pursuant to the Shipmanagement Agreements are not limited to the services described in such agreements and are instead as set forth in this Agreement.

 

4.6                               In the performance of this Agreement, the Manager shall protect the interests of the Group in all matters directly or indirectly relating to the Vessels.

 

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4.7                               The Manager shall ensure that all material property of the Group is clearly identified as such, held separately from the property of the Manager and, where applicable, in safe custody.

 

4.8                               The Manager shall ensure that adequate manpower is employed by it to perform its obligations under this Agreement.

 

4.9                               During the term hereof (as provided in Section 11.1 of this Agreement), the Manager shall provide the Crewing & Technical Services and the Commercial Services to the Group, subject always to the objectives and policies of the Owner and each applicable member of the Group, in each case, as established from time to time by their authorized representative and notified to the Manager.

 

4.10                        Notwithstanding anything to the contrary contained in this Agreement or the Shipmanagement Agreements, the Manager agrees that any and all decisions of a material nature relating to the Owner, any Subsidiary or any Vessel shall be reserved to the Owner, such decisions including, but not being limited to:

 

(a)                                 the purchase and/or sale of shares in a company or other assets of a material nature;

 

(b)                                 the purchase or formation of subsidiaries;

 

(c)                                  the entry into guarantees or loans or other forms of financing and any and all financial undertakings and commitments connected therewith;

 

(d)                                 the entry into and/or termination or amendment of any contractual relationships; and

 

(e)                                  the presentation, negotiation, settlement, prosecution or defense of any claim, demand or petition for an amount exceeding $250,000 or its equivalent.

 

4.11                        During the term hereof, the Manager shall do all in its power to promote the business of the Group in accordance with the directions of the authorized representative of the respective member of the Group and shall at all times use its best efforts in all respects to conform to and comply with the lawful directions, regulations and recommendations made by such authorized representative, and in the absence of any specific directions, regulations and recommendations as aforesaid and subject to the terms and conditions of this Agreement, shall provide general administrative and advisory services in connection with the management of the business of the Group.

 

4.12                        The Manager, in the performance of its responsibilities under this Agreement, shall be entitled to have regard to its overall responsibilities in relation to the management of its clients, which, until the occurrence of a Change of Control Release, shall be restricted to the Group, and in particular, without prejudice to the generality of the foregoing, the Manager shall be entitled to allocate available

 

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resources and services in such manner as in the prevailing circumstances the Manager considers to be fair and reasonable, subject always to the discretion of any Executive Officer or other authorized representative of the Owner.

 

4.13                        The Manager, in the performance of its responsibilities under this Agreement, shall ensure that any purchases of products or services from any affiliates, any Submanager or any other related entity shall be on terms no less favorable to the Manager than the market prices for products or services that the Manager could obtain on an arm’s-length basis from unrelated third parties.

 

4.14                        During the term hereof, the Manager agrees that, subject to Section 4.15 below and other than as provided in this Section 4.14, it will provide the services in this Agreement to the Group on an exclusive basis and it will not provide any Crewing & Technical Services, Commercial Services or other services contemplated herein to any entity without receiving the prior written approval of the Owner, other than:

 

(a)                                 the Owner and each Subsidiary;

 

(b)                                 any entity or vessel directly or indirectly owned or controlled, in whole or in part, or operated by John Coustas, Danaos Investment Limited as the Trustee for the 883 Trust (the “Coustas Trust”), Protector Holdings Inc. or Seasonal Maritime Corporation (collectively, the “Coustas Entities”) (or any (i) current or future beneficiaries of the Coustas Trust, (ii) entities beneficially owned by such beneficiaries or the Coustas Entities or (iii) other trusts established for the benefit of such beneficiaries or the Coustas Entities); provided, that, any such direct or indirect interest in any (x) Drybulk Carrier or Containership of larger than 2,500 TEU or (y) entity owning a Drybulk Carrier or a Containership of larger than 2,500 TEU, shall have been acquired in accordance with Section 3 of the Restrictive Covenant Agreement by and between the Owner and each of the Coustas Entities and attached hereto as Appendix III (the “Restrictive Covenant Agreement”); and

 

(c)                                  Palmosa Shipping Corporation and its subsidiaries.

 

For the avoidance of doubt, nothing in this Section 4.14 shall be construed to restrict the Manager from providing any Crewing & Technical Services, Commercial Services or other services contemplated herein to any entity or vessel directly or indirectly owned or controlled, in whole or in part, or operated by any Coustas Entity (or any (i) current or future beneficiaries of the Coustas Family Trust, (ii) entities beneficially owned by such beneficiaries or the Coustas Entities or (iii) other trusts established for the benefit of such beneficiaries or the Coustas Entities), other than Containerships of larger than 2,500 TEUs or Drybulk Carriers or any entity or business involved in shipping sectors other than Containerships of larger than 2,500 TEUs or Drybulk Carriers (which can be provided services in accordance with the terms of this Section 4.14).

 

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4.15                        The Manager’s obligations contained in Section 4.14 above shall cease to apply with immediate effect upon the occurrence of a Change of Control Release.

 

4.16                        The Manager shall at all times maintain and keep true and correct accounts and shall make the same available for inspection and auditing by the Owner or any Subsidiary at such times as may be mutually agreed.

 

4.17                        The Manager agrees that the Owner shall have the right at any time to inspect any Vessel for any reason the Owner considers necessary.

 

4.18                        Where the Manager is providing technical management services in accordance with Section 5.2, the Manager shall procure that the requirements of the law of the flag of each Vessel are satisfied and the Manager shall in particular be deemed to be the “Company” as defined by the ISM Code, assuming the responsibility for the operation of the Vessel and taking over the duties and responsibilities imposed by the ISM Code when applicable.

 

5.                                      CREWING & TECHNICAL SERVICES

 

(Crew and Technical Services, collectively referred to herein as the “Crewing & Technical Services”)

 

5.1                               CREW SERVICES

 

The Manager shall provide a suitably qualified crew and related services for each of the Vessels as required by each applicable member of the Group in accordance with the STCW 95 requirements including the following:

 

(a)                                 selecting and engaging the Vessel’s crew, including payroll arrangements, pension administration;

 

(b)                                 ensuring that the laws of the flag of each Vessel and all places where each Vessel trades are satisfied in respect of manning levels, rank, qualification and certification of the crew and employment regulations, including statutory withholding tax requirements, social insurance requirements, discipline and other requirements;

 

(c)                                  ensuring that all members of the crew have passed a medical examination with a qualified doctor certifying that they are fit for the duties for which they are engaged and are in possession of valid medical certificates issued in accordance with appropriate flag state requirements and, in the absence of applicable flag state requirements, the medical certificate shall be dated not more than three months prior to the respective crew members leaving their country of domicile and shall be maintained for the duration of their service on board the Vessel;

 

(d)                                 ensuring that the crew shall have a command of the English language of a sufficient standard to enable them to perform their duties safely;

 

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(e)                                  arranging the transportation of the crew, including repatriation, board and lodging as and when required at rates and types of accommodations as customary in the industry;

 

(f)                                   training of the crew and supervising their efficiency;

 

(g)                                  keeping and maintaining full and complete records of any labor agreements which may be entered into with the crew and reporting to the Owner reasonably promptly after notice or knowledge thereof is received of any change or proposed change in labor agreements or other regulations relating to the crew and conducting union negotiations;

 

(h)                                 supervising discipline, discharge, and other terms of employment including administering the Owner’s and the Manager’s drug and alcohol policy in respect of the crew and enforcing appropriate standing orders;

 

(i)                                     handling all details and negotiating the settlement of any and all claims of the crew, including but not limited to those arising out of accidents, sickness or death, loss of personal effects, disputes under articles or contracts of enlistment, covers and fines;

 

(j)                                    ensuring that any concerns of any customer with respect to the master or any of the officers or other crew are appropriately investigated in a timely manner, communicating the results of such investigations to the Owner and if appropriate the customer, and if such concerns are well-founded, ensuring that any appropriate remedial actions are taken without delay;

 

(k)                                 keeping and maintaining all administrative and financial records relating to the crew as required by any law and any labor or collective agreements of the Owner, and rendering to the Owner any and all reports; and

 

(l)                                     performing any other function in connection with the crew as may be requested by the Owner or necessary for the management of the business.

 

5.2                               TECHNICAL SERVICES

 

The Manager shall provide for all technical management services necessary for the operation of each Vessel, which include, but are not limited to, the following functions:

 

(a)                                 providing competent personnel to supervise the maintenance and general efficiency of each Vessel;

 

(b)                                 arranging and supervising dry-dockings, repairs, alterations and upkeep of the Vessels to the standards required by the Group to ensure that each Vessel will comply with all requirements and recommendations of the classification society and with the laws and regulations of the country of registry of each Vessel and of the places where each Vessel trades;

 

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(c)                                  arranging and purchasing the supply of necessary provisions, stores, spares, lubricating oil supplies and equipment for each Vessel;

 

(d)                                 appointing and paying surveyors and technical consultants and other support for each Vessel as the Manager may consider from time to time to be necessary and arranging surveys associated with the commercial operation of each Vessel;

 

(e)                                  developing, implementing and maintaining a Safety Management System (SMS) in accordance with the ISM Code and system security in accordance with ISPS Code for both the Manager and each of the Vessels under management;

 

(f)                                   providing, at the request of the Owner, all documentation and records related to the Safety Management System (SMS) and/or the Crew, which the Owner needs in order to demonstrate compliance with the ISM Code and STCW 95 or to defend a claim against a third party;

 

(g)                                  arranging for the payment of all ordinary charges incurred in connection with the management of each Vessel, including, but not limited to, all canal tolls, port charges, any amounts due to any governmental authority with respect to the crew and all duties and taxes in respect of cargo or freight (whether levied against the Vessel, the Owner or the Group) and arranging for, and arranging payment for, any and all material licenses, permits, franchises, registrations and similar authorizations of any governmental authority which are necessary and used in the operation of the Vessels;

 

(h)                                 procuring and arranging for port entrance and clearance, pilots, Vessel agents, consular approvals and other services necessary or desirable for the management and safe operation of each Vessel;

 

(i)                                     performing all usual and customary duties concerned with the loading and discharging of cargoes at all ports including providing technical and shore-side support for the Vessels, handling of each Vessel while in ports or transiting canals and arranging for the prompt dispatch of each Vessel from loading and discharge ports in accordance with any instructions and for transit through canals;

 

(j)                                    reporting to the Owner of each Vessel’s movement, position at sea, arrival and departure dates, major casualties and damages received or caused by each Vessel;

 

(k)                                 informing the Group promptly of any major release or discharge of oil or other hazardous material not in compliance with any laws;

 

(l)                                     maintaining each Vessel in such condition as to be acceptable to major charterers’ vetting standards, if required;

 

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(m)                             providing the Owner with a copy of any Vessel inspection reports, valuations, surveys, and other similar reports prepared by ship brokers, valuators, surveyors, and classification societies; and

 

(n)                                 arranging for employment of counsel and the investigation, follow-up and negotiating of the settlement of all claims arising in connection with the operation of each Vessel.

 

5.3                               FEES AND EXPENSES FOR CREWING & TECHNICAL SERVICES

 

In consideration of the Manager providing the above Crewing & Technical Services to the Group, the Owner shall pay the Manager the following fees:

 

(a)                                 a fixed Vessel management fee of US$850 per day per Vessel other than those described in 5.3(b) below, payable monthly in arrears (pro-rated for the number of days that the Owner (or any Subsidiary) owns or charters-in each Vessel during each month);

 

(b)                                 a fixed Vessel management fee of US$425 per day per Vessel on a bareboat charter, payable monthly in arrears (pro-rated for the number of days that the Owner (or any Subsidiary) owns or charters-in each Vessel during each month);

 

(c)                                  a fixed management fee of US$850 per day payable monthly in arrears;

 

(d)                                 a variable management fee equal to 0.5% calculated on the collected operating revenues of the Vessels during the term of this Agreement, payable to the Manager monthly in arrears; and

 

(e)                                  a flat fee of US$725,000 for the services by the Manager set forth in the form of Supervision Agreement attached in Appendix II hereto with respect to each Newbuilding of the Owner or any Subsidiary payable upon in four equal installments on the key event days in accordance with the applicable shipbuilding contract, namely steel cutting, keel laying, launching and delivery to the Owner or Subsidiary, as applicable.

 

(the fees in clauses (a) through (e) of this Section 5.3 being collectively referred to herein as the “Crewing & Technical Management Fee”).

 

(f)                                   The Crewing & Technical Management Fee does not include any out of pocket expenses (e.g. travelling, accommodation or other expenses of similar nature) of the Manager’s employees in relation to drydockings or other visits to Vessels related to repair and maintenance. Such costs will be paid and expensed by the Owner over and above the Crewing & Technical Management Fee.

 

(g)                                  In addition to providing the Crewing & Technical Services in exchange for the Crewing & Technical Management Fee, the Manager shall, at no

 

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cost to any member of the Group, provide its office accommodation, office staff (including secretarial, accounting and administrative assistance), facilities and stationery, and shall pay for all printing, postage, domestic telephone and all other usual office expenses incurred by it as the Manager in or about the provision of the Crewing & Technical Services.

 

(h)                                 The Manager hereby acknowledges that it will provide the Crewing & Technical Services to the Group in Section 5 above at its own cost in exchange for the Crewing & Technical Management Fee and other fees it receives under this Section 5, and shall pay for all of its own expenses and costs incurred by it as the Manager in providing such Crewing & Technical Services (other than as set forth in Section 5.3(f) above).

 

6.                                      COMMERCIAL SERVICES

 

(Commercial, Chartering, Administrative & Insurance Services, collectively referred to herein as the “Commercial Services”)

 

6.1                               COMMERCIAL SERVICES

 

The Manager shall provide certain commercial services to the Group, which includes, but is not limited to, the following functions:

 

(a)                                 performing class records review and physical inspections and, at the request of the Owner, making recommendations to the Owner with respect to any additional vessel being considered for purchase by the Owner;

 

(b)                                 at the request and under the direction of the Owner, certain administrative services in connection with the purchase or sale of a Vessel by the Owner or any member of the Group;

 

(c)                                  at the request of the Owner, certain services in connection with the Owner or any Subsidiary taking physical delivery of a Vessel; and

 

(d)                                 at the request of the Owner, performing any other functions necessary to assist the Owner with any Vessel sale or purchase or Newbuilding.

 

6.2                               CHARTERING SERVICES

 

The Manager shall provide certain chartering services to the Group, including the following:

 

(a)                                 at the direction of the Owner, seeking and negotiating employment for each Vessel under voyage or period charters or under any other form of contract;

 

(b)                                 arranging of the proper payment to the Owner or its nominee of all hire and/or freight revenues or other moneys of whatsoever nature to which the

 

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Owner may be entitled arising out of the employment of or otherwise in connection with the Vessel;

 

(c)                                  providing voyage estimates and accounts and calculating of hire, freights, demurrage and/or dispatch moneys due from or due to the charterers of the Vessel;

 

(d)                                 furnishing the crew of each Vessel with appropriate voyage instructions and monitoring voyage performance while using best efforts to achieve the most economical, efficient and quick dispatch of each Vessel between ports and at ports and terminals;

 

(e)                                  appointing agents;

 

(f)                                   appointing stevedores;

 

(g)                                  arranging surveys associated with the commercial operation of the Vessel;

 

(h)                                 using due diligence to ensure that each Vessel will be employed between safe ports, safe anchorages and safe berths, so far as this can be established by exercising due diligence;

 

(i)                                     arranging the scheduling of each Vessel according to the terms of the Vessel’s employment;

 

(j)                                    carrying out all necessary communications with shippers, charterers and others involved with the receiving and handling of each Vessel at the loading and discharging ports, including sending any notices required under the terms of the Vessels’ employment;

 

(k)                                 preparing, issuing or causing to be issued to shippers the customary freight contracts, cargo receipts, bills of lading, shippers’ customary bills or other documents required under the terms of the Vessels’ employment;

 

(l)                                     invoicing on behalf of the Owner all freights and other sums due to the Owner and accounts receivables arising from the operation of the Vessels, making any and all claims for moneys due to the Owner and issuing releases upon receipt of payment or settlement of such claims; and

 

(m)                             preparing off-hire statements and/or hire statements including obtaining port documents and expense supports necessary for such calculation.

 

6.3                               ADMINISTRATIVE SERVICES

 

The Manager shall provide certain general administrative services to the Group, including the following:

 

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(a)                                 keeping all books and records of things done and transactions performed on behalf of any member of the Group as it may require from time to time, including liaising with accountants, lawyers and other professional advisors;

 

(b)                                 except as otherwise contemplated herein, representing any member of the Group generally in its dealings and relations with third parties;

 

(c)                                  maintaining the general ledgers of the Group, reconciliation of the Group’s bank accounts, preparation of periodic financial statements, including those required for governmental and regulatory or self-regulatory agency filings and reports to shareholders, and the provision of related data processing services;

 

(d)                                 providing assistance in the preparation of periodic and other reports, proxy statements, registration statements and other documents and reports required by applicable law or the rules of any securities exchange or inter-dealer quotation system on which the securities of the Owner or any member of the Group may be listed or quoted;

 

(e)                                  preparing and providing all audited financial statements and tax returns required by any law or regulatory authority and developing, maintaining and monitoring internal audit controls, disclosure controls and information technology for the Group;

 

(f)                                   preparing reports concerning the performance of the services hereunder and the performance of third parties with whom any member of the Group has contractual relationships and furnishing advice and recommendations with respect to all aspects of the business affairs of such member of the Group;

 

(g)                                  providing all legal services to ensure the Group is in compliance with all laws, including all relevant securities laws, and ensuring that the Group owns or possesses all licenses, patents, copyrights and trademarks which are necessary and used in the operation of its business;

 

(h)                                 providing for the presentation, negotiation, settlement, prosecution or defense of any claim, demand or petition on behalf of any member of the Group arising in connection with the business of any member of the Group for an amount not exceeding $250,000 or its equivalent, including the pursuit by any member of the Group of any rights of indemnification or reimbursement;

 

(i)                                     providing assistance and advice to the Group with respect to financing, including the monitoring and administration of the compliance with any applicable financing terms and conditions in effect with investors, banks or other financial institutions;

 

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(j)                                    assisting with arranging board meetings, director accommodation and travel for board meetings, and preparing meeting materials and detailed papers and agendas for scheduled meetings of the Board of Directors or any company in the Group (and any and all committees thereof) that, where applicable, contain such information as is reasonably available to the Manager to enable the Board of Directors (and any such committees) to base their opinion;

 

(k)                                 preparing or causing to be prepared reports to be considered by the Board of Directors (or any applicable committee thereof) in accordance with the Group’s internal policies and procedures on any acquisition, investment or sale of any part of the business;

 

(l)                                     administering payroll services, benefits and directors fees, as applicable, for any employee, officer or director of the Group;

 

(m)                             handling all administrative and clerical matters in respect of (i) the calling and arrangement of all annual and/or special meetings of shareholders, (ii) the preparation of all materials (including notices of meetings and information circulars) in respect thereof and (iii) the submission of all such materials to the Owner in sufficient time prior to the dates upon which they must be mailed, filed or otherwise relied upon so that the Owner has full opportunity to review, approve, execute and return them to the Manager for filing or mailing or other disposition as the Owner may require or direct;

 

(n)                                 providing, at the request and under the direction of the Owner, such communications to the transfer agent for the Owner’s securities as may be necessary or desirable;

 

(o)                                 providing any such other administrative services as the Owner, the authorized Executive Officers or any other representative the Owner may request and the Manager may agree to provide from time to time.

 

6.4                               INSURANCE

 

The Manager shall arrange such insurances as the Owner shall have instructed and agreed upon, including the following:

 

(a)                                 providing and purchasing hull and machinery insurance (including crew negligence), excess liabilities insurance, protection and indemnity insurance including pollution risk insurance (entered for each Vessel’s full gross tonnage), crew insurance and war insurance;

 

(b)                                 providing and purchasing all other insurances for each Vessel in accordance with the best practices of prudent owners of vessels of a similar type to each Vessel in amounts and on terms that are in accordance with industry practice;

 

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(c)                                  providing the Owner with a copy of any Vessel insurance claims and any reports prepared by insurers; and

 

(d)                                 ensuring all premiums and calls on the Owner’s insurance are paid in a timely fashion.

 

6.5                               FEES AND EXPENSES FOR COMMERCIAL SERVICES

 

In consideration of the Manager providing the above Commercial Services to the Group, the Owner shall pay the Manager the following fees:

 

(a)                                 a variable management fee equal to 0.75% calculated on the collected operating revenues of the Vessels during the term of this Agreement, payable to the Manager monthly in arrears; and

 

(b)                                 a fee equal to 0.5% calculated on the price set forth in the memorandum of agreement of any Vessel bought or sold for or on behalf of the Owner or any Subsidiary, payable upon final delivery to the Owner or Subsidiary as applicable,

 

the fees in clauses (a) and (b) of this Section 6.5 being collectively referred to herein as the “Commercial Management Fee”;

 

(c)                                  the Commercial Management Fee does not include any out of pocket expenses (e.g. travelling, accommodation or other expenses of similar nature) of the Manager’s employees in relation to the provision of the Commercial Services. Such costs will be paid and expensed by the Owner over and above the Commercial Management Fee;

 

(d)                                 in addition to providing the Commercial Services in exchange for the Commercial Management Fee, the Manager shall, at no cost to any member of the Group, provide its office accommodation, office staff (including secretarial, accounting and administrative assistance), facilities and stationery, and shall pay for all printing, postage, domestic telephone and all other usual office expenses incurred by it as the Manager in or about the provision of the Commercial Services; and

 

(e)                                  the Manager hereby acknowledges that it will provide the Commercial Services to the Group in this Section 6 at its own cost in exchange for the Commercial Management Fee it receives pursuant to this Section 6, and shall pay for all of its own expenses and costs incurred by it as the Manager in providing such Commercial Services other than as set forth in Section 6.5(c) above.

 

7.                                      BUDGETS, CORPORATE PLANNING AND EXPENSES

 

7.1                               On or before October 31 of each year the Manager will prepare and submit to the Executive Officers a detailed draft budget for the next fiscal year in a format

 

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acceptable to the Executive Officers which will include (i) a statement of estimated revenue and expenses in providing the Crewing & Technical Services and the Commercial Services to the Group and (ii) a proposed budget for capital expenditures, repairs or alterations, including proposed expenditures in respect of dry-docking, together with an analysis as to when and why such replacements, improvements, renovations or expenditures may be required (collectively, the “Draft Budget”).

 

7.2                               For a period of thirty (30) days after receipt of the Draft Budget, the Executive Officers, from time to time, may request further details and submit written comments on the Draft Budget. If the Executive Officers do not agree with any term thereof, they will, within the same thirty (30) day period, give the Manager notice of any inquiries to the Draft Budget, which notice will include the list of items under consideration (the “Questioned Items”) and a proposal for the resolution of each such Questioned Item. The Executive Officers and the Manager will endeavor to resolve any such differences between them with respect to the Questioned Items.

 

7.3                               By December 10 of the relevant year, the Manager will prepare and deliver to the Owner a revised budget that has been approved by the Executive Officers (the “Approved Budget”). All expenses incurred by the Manager under the terms of this Agreement on behalf of any member of the Group under the Approved Budget may be debited against the account of the respective member of the Group, but shall in any event remain payable by the Owner to the Manager on demand.

 

7.4                               Any increase or change to the Approved Budget in excess of 7.5% shall require the written approval of two Executive Officers. Any expenses incurred by the Manager in excess of the Approved Budget will not be reimbursed or payable to the Manager.

 

7.5                               The Manager shall produce a monthly comparison between budgeted and actual expenditures to the Executive Officers. The Manager shall also maintain the records of all costs and expenses incurred, including any invoices, receipts and supplementary materials as are necessary or proper for the settlement of accounts.

 

7.6                               In the event the Executive Officers and the Manager dispute any specific expense or invoice within the Approved Budget and are unable to resolve their dispute within ten (10) Business Days, then the dispute shall be referred for resolution by a firm of independent accountants of nationally recognized standing reasonably satisfactory to each of the Manager and the Executive Officers (the “Accounting Referee”) which shall determine the disputed amounts within thirty (30) days of the referral of such dispute to such Accounting Referee. The determination of the Accounting Referee shall not require the Owner to pay more than the amount in dispute. The fees and expenses of the Accounting Referee shall be borne equally by the Owner and the Manager.

 

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7.7                               Insofar as any moneys are collected by the Manager under the terms of this Agreement (other than moneys payable by the Owner to the Manager), such moneys and any interest thereon shall be held to the credit of the relevant member of the Group in a separate bank account in the name thereof, but operated by the Manager.

 

7.8                               On or before the first day of each month during the term of this Agreement, the Owner shall advance to the Manager all amounts budgeted for the operation of each of the Vessels for such month. At the end of each calendar quarter, the Manager shall preliminarily reconcile the amounts advanced to it by the Owner with the amounts actually expended by it for the operation of each of the Vessels, and the Manager shall remit to the Owner, or credit to the Owner amounts to be advanced to it hereunder for future months, any unused portion of the amounts previously advanced by the Owner, or the Owner shall pay to the Manager any amounts properly expended by the Manager for the Vessels in excess of the amounts previously advanced by the Owner. The Owner and Manager will reconcile any amounts due to the Owner by the Manager or amounts due to the Manager by the Owner for each fiscal year of the Owner as promptly as practicable following the close of each such fiscal year.

 

7A.                            BACKSTOP OBLIGATION CREDIT

 

7A.1                     If the Plan Sponsor fails to make payment to the Owner of all, or any portion, of the Backstop Commitment Amount (as such term is defined in the Backstop Agreement) in accordance with the terms of the Backstop Agreement (the “Outstanding Backstop Amount”), the Manager agrees that the Owner shall apply (pro-rata across the Existing Fleet) some or all of the Outstanding Backstop Amount as a credit towards any fees (howsoever incurred) that it owes to the Manager under this Agreement from time to time (the “Backstop Obligation Credit”).

 

7A.2                     Each Backstop Obligation Credit shall reduce the Outstanding Backstop Amount by an equivalent dollar amount and the Owner may make any number of Backstop Obligation Credits until the Outstanding Backstop Amount has been reduced to zero.

 

8.                                      LIABILITY AND INDEMNITY

 

8.1                               Subject to Section 11.3(e), neither any member of the Group nor the Manager shall be under any liability for any failure to perform any of their obligations hereunder by reason of Force Majeure. “Force Majeure” shall mean any cause whatsoever of any nature or kind beyond the reasonable control of any member of the Group or the Manager, including, without limitation, acts of God, acts of civil or military authorities, acts of war or public enemy, acts of any court, regulatory agency or administrative body having jurisdiction, insurrections, riots, strikes or other labor disturbances, embargoes or other causes of a similar nature.

 

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8.2                               Subject to Section 8.1, the Manager shall be under no liability whatsoever to any member of the Group for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect, and howsoever arising in the course of the performance of this Agreement, unless and to the extent that the same is proved to have resulted from (i) the gross negligence or wilful default of the Manager, its employees, agents or any Submanager or (ii) any breach of this Agreement by the Manager or any Submanager.

 

8.3                               Except to the extent that the Manager would be liable under Section 8.2, the Owner hereby undertakes to keep the Manager and its employees, agents and the Submanager indemnified and to hold them harmless against all actions, proceedings, claims, demands or liabilities whatsoever and howsoever arising which may be brought against them or incurred or suffered by them arising out of or in connection with the performance of this Agreement, and against and in respect of all costs, losses, damages and expenses (including legal costs and expenses on a full indemnity basis) which the Manager, its employees, agents or the Submanager may suffer or incur (either directly or indirectly) in the course of the performance of this Agreement.

 

8.4                               The Manager will indemnify and save harmless the Owner and each other Subsidiary in the Group, and their respective current and former directors, officers, employees, subcontractors and current and future affiliates, from and against any and all costs, losses, damages and expenses (including legal costs and expenses on a full indemnity basis) which the Owner, any other company in the Group or any of their employees or agents may suffer as a result of (i) any losses incurred or suffered related to any liabilities or obligations that the Manager or any Submanager has agreed to pay or for which the Manager is otherwise responsible under this Agreement, (ii) the gross negligence or any willful default by the Manager, its employees, agents or any Submanager or (iii) any breach of this Agreement by the Manager or any Submanager.

 

8.5                               It is hereby expressly agreed that no employee or agent of the Manager (including any sub-contractor from time to time employed by the Manager) shall in any circumstances whatsoever be under any liability whatsoever to any member of the Group for any loss, damage or delay whatsoever kind arising or resulting directly or indirectly from any act, neglect or default on his part while acting in the course of or in connection with his employment and, without prejudice to the generality of the foregoing provisions in this Section 8, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability, defense and immunity of whatsoever nature applicable to the Manager or to which the Manager is entitled hereunder shall also be available and shall extend to protect every such employee or agent of the Manager acting as aforesaid and for the purpose of all the foregoing provisions of this Section 8 the Manager is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be their servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this

 

19

 

Agreement. Nothing in this Section 8.5 shall be construed so as to limit any liability the Manager may have to the Group under Section 8.2 hereof.

 

9.                                      RIGHTS OF THE MANAGER, RESTRICTIONS ON THE MANAGER’S AUTHORITY, AND NON-COMPETE PROVISIONS

 

9.1                               Except as may be expressly provided in this Agreement, the Manager shall be an independent contractor and not the agent of the Owner or any other member of the Group and shall have no right or authority to incur any obligation on behalf of any member of the Group or to bind any member of the Group in any way whatsoever. Nothing in this Agreement shall be deemed to make the Manager or any of its subsidiaries or employees an employee, joint venturer or partner of any member of the Group.

 

9.2                               The Owner acknowledges that the Manager shall have no responsibility hereunder, direct or indirect, with regard to the formulation of the business plans, policies, management or strategies (financial, tax, legal or otherwise) of any member of the Group, which is solely the responsibility of each respective member of the Group. Each member of the Group shall set its corporate policies independently through its respective board of directors and executive officers and nothing contained herein shall be construed to relieve such directors or officers of each respective member of the Group from the performance of their duties or to limit the exercise of their powers.

 

9.3                               Notwithstanding the other provisions of this Agreement:

 

(a)                                 the Manager may act with respect to a member of the Group upon any advice, resolutions, requests, instructions, recommendations, direction or information obtained from such member of the Group or any banker, accountant, broker, lawyer or other person acting as agent of or adviser to such member of the Group and the Manager shall incur no liability to such member of the Group for anything done or omitted or suffered in good faith in reliance upon such advice, instruction, resolution, recommendation, direction or information made or given by such member of the Group or its agents, in the absence of gross negligence or wilful misconduct by the Manager or its servants, and shall not be responsible for any misconduct, mistake, oversight, error or judgment, neglect, default, omission, forgetfulness or want of prudence on the part of any such banker, accountant, broker, lawyer, agent or adviser or other person as aforesaid;

 

(b)                                 the Manager shall not be under any obligation to carry out any request, resolution, instruction, direction or recommendation of any member of the Group or its agents if the performance thereof is or would be illegal or unlawful; and

 

20

 

(c)                                  the Manager shall incur no liability to any member of the Group for doing or failing to do any act or thing which it shall be required to do or perform or forebear from doing or performing by reason of any provision of any law or any regulation or resolution made pursuant thereto or any decision, order or judgment of any court or any lawful request, announcement or similar action of any person or body exercising or purporting to exercise the legitimate authority of any government or of any central or local governmental institution in each case where the above entity has jurisdiction.

 

9.4                               During the term of this Agreement the Manager shall allocate charter opportunities across the Existing Fleet fairly and with a view to generating the highest aggregate revenue for each Amended RA Facility’s Vessels.

 

9.5                               Subject to Section 9.6 below, during the term of this Agreement and for a period of one year from the date of actual termination of this Agreement, the Manager and any affiliate of the Manager (other than a Coustas Entity (or any (i) current or future beneficiaries of the Coustas Trust, (ii) entities beneficially owned by such beneficiaries or the Coustas Entities or (iii) other trusts established for the benefit of such beneficiaries or the Coustas Entities) in accordance with Section 3 of the Restrictive Covenant Agreement) shall be prohibited from, directly or indirectly, engaging in (i) the ownership or operation of Containerships larger than 2,500 TEUs, (ii) the ownership or operation of any Drybulk Carriers and (iii) the acquisition of or investment in any business involved in the ownership or operation of Containerships larger than 2,500 TEUs or Drybulk Carriers.

 

9.6                               The restrictions contained in Section 9.5 above shall cease to apply with immediate effect upon the occurrence of a Change of Control Release.

 

10.                               AVAILABILITY OF OFFICERS

 

10.1                        The Executive Officers will be directly employed by the Owner outside of this Agreement.

 

10.2                        The Manager shall make available to the Owner all such other officers, managers or employees that the Owner and the Manager agree shall be made available.

 

10.3                        The Executive Officers are entitled to direct the Manager to remove and replace any individual serving as an officer or any senior manager serving as head of a business unit from such position. Furthermore, the Manager agrees that it will not remove any individuals serving as officers or senior managers from their respective positions without the prior written consent of the Executive Officers. If any officer or senior manager who is made available to the Owner by the Manager resigns, is terminated or otherwise vacates his office, the Manager shall, as soon as practicable after acceptance of any resignation or after termination, use reasonable best efforts to identify suitable candidates for replacement of such officer.

 

21

 

10.4                        The Owner may employ directly any other officers, senior managers or employees as it may deem necessary that will not be subject to this Agreement.

 

10.5                        The Manager will report to the Owner and the Board of Directors through the Executive Officers.

 

11.                               TERMINATION OF THIS AGREEMENT

 

11.1                        This Agreement shall be effective as of the date hereof and, subject to Sections 11.2, 11.3, 11.4 and 11.5, shall continue until December 31, 2024.

 

11.2                        The Owner shall be entitled to terminate this Agreement by notice in writing to the Manager if:

 

(a)                                 the Manager neglects or fails to perform its principal duties and obligations under this Agreement in any material respect, and such neglect or failure is not remedied within twenty (20) Business Days after written notice of the same is given to the Manager by the Owner; or

 

(b)                                 any money payable by the Manager under or pursuant to this Agreement is not promptly paid or accounted for in full within ten (10) Business Days by the Manager in accordance with the provisions of this Agreement.

 

11.3                        The Owner shall be entitled to terminate this Agreement immediately if:

 

(a)                                 the Owner or the Manager ceases to conduct business, or all or substantially all of the properties or assets of either such party is sold, seized or appropriated;

 

(b)                                 the Owner or the Manager files a petition under any bankruptcy law, makes an assignment for the benefit of its creditors, seeks relief under any law for the protection of debtors or adopts a plan of liquidation, or if a petition is filed against the Owner or the Manager seeking to have it declared an insolvent or a bankrupt and such petition is not dismissed or stayed within forty (40) Business Days of its filing, or if the Owner or Manager shall admit in writing its insolvency or its inability to pay its debts as they mature, or if an order is made for the appointment of a liquidator, manager, receiver or trustee of the Owner or Manager of all or a substantial part of its assets, or if an encumbrancer takes possession of or a receiver or trustee is appointed over the whole or any part of the Manager’s or Owner’s undertaking, property or assets or if an order is made or a resolution is passed for the Manager’s or Owner’s winding up;

 

(c)                                  a distress, execution, sequestration or other process is levied or enforced upon or sued out against the Manager’s property which is not discharged within twenty (20) Business Days;

 

22

 

(d)                                 the Manager ceases or threatens to cease wholly or substantially to carry on its business otherwise than for the purpose of a reconstruction or amalgamation without insolvency previously approved by the Owner; or

 

(e)                                  either the Manager or the Owner is prevented from performing its obligations hereunder by reasons of Force Majeure for a period of two (2) consecutive months or more.

 

11.4                        In addition to the provisions in Sections 11.2 and 11.3, the Owner shall also be entitled to terminate any applicable Shipmanagement Agreement if:

 

(a)                                 the Owner or any Subsidiary ceases to be the owner of a Vessel by reason of a sale thereof or the Owner or any Subsidiary ceases to be registered as the Owner of a Vessel;

 

(b)                                 a Vessel becomes an actual or constructive or compromised or arranged total loss or an agreement has been reached with the underwriters in respect of the Vessel’s constructive, compromised or arranged total loss or if such agreement with the underwriters is not reached or it is adjudged by a competent tribunal that a constructive loss of the Vessel has occurred;

 

(c)                                  a Vessel is requisitioned for title or any other compulsory acquisition of a Vessel occurs, otherwise than by requisition by hire; or

 

(d)                                 a Vessel is captured, seized, detained or confiscated by any government or persons acting or purporting to act on behalf of any government and is not released from such capture, seizure, detention or confiscation within twenty (20) Business Days.

 

11.5                        The Manager shall be entitled to terminate this Agreement by notice in writing to the Owner:

 

(a)                                 if any moneys payable by the Owner under this Agreement shall not have been duly paid within sixty (60) Business Days of payment having been demanded by the Manager in writing; or

 

(b)                                 if the Owner defaults in the performance of any other of its material obligations under this Agreement and fails to remedy such default within sixty (60) Business Days after being given notice in writing by the Manager to remedy the same.

 

11.6                        Upon the effective date of termination pursuant to this Section 11, the Manager shall promptly terminate its service hereunder as may be required in order to minimize any interruption to the business of the members of the Group.

 

11.7                        Upon termination, the Manager shall, as promptly as possible, submit a final accounting of funds received and disbursed under this Agreement and of any remaining Crewing & Technical Management Fee and the Commercial

 

23

 

Management Fee due from the Owner, calculated pro rata to the date of termination, and any undisbursed funds of any member of the Group in the Manager’s possession or control will be paid by the Manager as directed by such member of the Group promptly upon the Manager’s receipt of all sums then due it under this Agreement, if any.

 

11.8                        Upon termination of this Agreement, the Manager shall release to the Owner the originals where possible, or otherwise certified copies, of all such accounts and all documents specifically relating to each Vessel or the provision of Crewing & Technical Services and the Commercial Services for each Vessel.

 

11.9                        The provisions of Section 8 shall survive any termination of this Agreement.

 

12.                               SALE AND RIGHT OF FIRST REFUSAL

 

12.1                        Unless expressly permitted by the Board of Directors of the Owner pursuant to Sections 12.2 and 12.3 below, during the term of this Agreement, John Coustas and/or any trust established for the Coustas family, under which John Coustas and/or members of his family are beneficiaries will collectively (i) own at least 80% of the outstanding capital stock of the Manager and (ii) hold at least 80% of the voting power of the outstanding capital stock of the Manager, considered for this purpose as a single class; if this provision is breached, the Owner shall have the right to purchase the capital stock of the Manager owned by John Coustas or any trust established for the Coustas family, under which John Coustas and/or members of his family are beneficiaries, at its fair market value.

 

12.2                        Throughout the duration of this Agreement and for one (1) year period following the expiry or termination of this Agreement, the Manager is prohibited from transferring, assigning, selling or disposing of a significant portion or all of its assets or property that is necessary for the performance of its services under this Agreement and under any Shipmanagement Agreement to any other party without the prior written consent of the Board of Directors.

 

12.3                        In the event that the Board of Directors permits the Manager to transfer, assign, sell or dispose of any assets or property pursuant to Section 12.2 above, the Manager hereby grants to the Owner a right of first refusal on any such proposed transfer, assignment, sale or disposition. The right of first refusal contained in this Section 12.3 is in effect during the term of this Agreement and shall extend for a one (1) year period following the expiry or termination of this Agreement.

 

12.4                        The Owner and the Manager shall have a period of 30 days to reach an agreement for the proposed sale, transfer, assignment or disposition of all or part of the Manager’s assets pursuant to Section 12.3 above. If no such agreement with respect to a sale is concluded within 30 days, then the Manager may transfer or sell such assets to any other third party provided that the sale is made on terms no less favorable than those last proposed by the Manager to the Owner.

 

24

 

12.5                        The Owner and the Manager acknowledge that all potential transfers pursuant to this Section 12 are subject to obtaining any and all written consents of governmental authorities and other non-affiliated third parties.

 

13.                               NOTICES

 

13.1                        All notices, consents and other communications hereunder, or necessary to exercise any rights granted hereunder, shall be in writing, sent either by prepaid registered mail or telefax, and will be validly given if delivered on a Business Day to an individual at the following address or fax number:

 

Danaos Corporation
 14 Akti Kondyli
 185 45 Piraeus
 Greece
 Attention: Chief Executive Officer

Fax: +30 210 419 6489

 

Danaos Shipping Company Limited
 14 Akti Kondyli
 185 45 Piraeus
 Greece
 Attention: General Manager

Fax: +30 210 422 0855

 

14.                               APPLICABLE LAW AND JURISDICTION

 

14.1                        This Agreement shall be governed by, and construed in accordance with, the laws of England. The parties hereto submit to the exclusive jurisdiction of the courts of England in connection with any claim arising out of or in connection with this Agreement.

 

15.                               ARBITRATION

 

15.1                        All disputes arising out of this Agreement shall be arbitrated in London in the following manner. One arbitrator is to be appointed by each of the parties hereto and a third by the two so chosen. Their decision or that of any two of them shall be final and, for the purpose of enforcing any award, this Agreement may be made a rule of the court. The arbitrators shall be commercial persons, conversant with shipping matters. Such arbitration is to be conducted in accordance with the rules of the London Maritime Arbitrators Association terms current at the time when the arbitration proceedings are commenced and in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof.

 

15.2                        In the event that the Owner or the Manager shall state a dispute and designate an arbitrator, in writing, the other party shall have twenty (20) Business Days to designate its own arbitrator. Upon failure to do so, the arbitrator appointed by the other party can render an award hereunder.

 

25

 

15.3                        Until such time as the arbitrators finally close the hearings, either party shall have the right by written notice served on the arbitrators and on the other party to specify further disputes or differences under this Agreement for hearing and determination.

 

15.4                        The arbitrators may grant any relief, and render an award, which they or a majority of them deem just and equitable and within the scope of this Agreement of the parties, including but not limited to the posting of security. Awards pursuant to this Section 15 may include costs, including a reasonable allowance for attorneys’ fees, and judgments may be entered upon any award made herein in any court having jurisdiction.

 

16.                               MISCELLANEOUS

 

16.1                        This Agreement and the Undertaking constitute the sole understanding and agreement of the parties hereto with respect to the subject matter hereof and thereunder, and supersede all prior agreements or understandings, written or oral, with respect thereto. This Agreement may not be amended, waived or discharged unless it is permitted under the terms of the Undertaking and except by an instrument in writing executed by the party against whom enforcement of such amendment, waiver or discharge is sought.

 

16.2                        During the term hereof, the Manager will not provide services hereunder through, or otherwise cause any member of the Group to have, an office or fixed place of business in the United States, and shall take reasonable steps not to cause income of any member of the Group to be subject to tax in any taxing jurisdiction, including the United States, the United Kingdom and Greece.

 

16.3                        This Agreement may be executed in one or more written counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.

 

26

 

IN WITNESS whereof the undersigned have executed this Agreement as of the date first above written.

 

	
SIGNED by
    	
)
    	
/s/ Evangelos Chatzis
    
	
for and on behalf of
    	
)
    	
Evangelos Chatzis
    
	
DANAOS CORPORATION
    	
)
    	
Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
in the presence of:
    	
 
    
	
/s/ Michail G. Alexiou
    	
 
    
	
Michail G. Alexiou
    	
 
    
	
Attorney at law
    	
 
    

 

27

 

	
SIGNED by
    	
)
    	
 
    
	
for and on behalf of 
    	
)
    	
/s/ Konstantinos Sfyris
    
	
DANAOS SHIPPING COMPANY   LIMITED 
    	
)
    	
Konstantinos Sfyris
    
	
in the presence of: 
    	
)
    	
Director
    

 

28

 

SCHEDULE A

 

SHIPOWNING SUBSIDIARIES

 

as of 10 August 2018

 

	
Shipowning Subsidiary
    	
 
    	
Vessel Name
    	
 
    	
Jurisdiction
    
	
Actaea Company Limited
    	
 
    	
Performance
    	
 
    	
Malta
    
	
Asteria Shipping Company Limited
    	
 
    	
Priority
    	
 
    	
Malta
    
	
Auckland Marine Inc.
    	
 
    	
Colombo
    	
 
    	
Liberia
    
	
Balticsea Marine Inc.
    	
 
    	
ZIM Kingston
    	
 
    	
Liberia
    
	
Bayview Shipping Inc.
    	
 
    	
ZIM Rio Grande
    	
 
    	
Liberia
    
	
Blacksea Marine Inc.
    	
 
    	
ZIM Luanda
    	
 
    	
Liberia
    
	
Boulevard Shiptrade S.A.
    	
 
    	
Dimitris C
    	
 
    	
Marshall Islands
    
	
Boxcarrier (No.1) Corp.
    	
 
    	
CMA CGM Moliere
    	
 
    	
Liberia
    
	
Boxcarrier (No.2) Corp.
    	
 
    	
CMA CGM Musset
    	
 
    	
Liberia
    
	
Boxcarrier (No.3) Corp.
    	
 
    	
CMA CGM Nerval
    	
 
    	
Liberia
    
	
Boxcarrier (No.4) Corp.
    	
 
    	
CMA CGM Rabelais
    	
 
    	
Liberia
    
	
Boxcarrier (No.5) Corp.
    	
 
    	
CMA CGM Racine
    	
 
    	
Liberia
    
	
Cellcontainer (No.1) Corp.
    	
 
    	
Express Argentina
    	
 
    	
Liberia
    
	
Cellcontainer (No.2) Corp.
    	
 
    	
Express Brazil
    	
 
    	
Liberia
    
	
Cellcontainer (No.3) Corp.
    	
 
    	
Express France
    	
 
    	
Liberia
    
	
Cellcontainer (No.4) Corp.
    	
 
    	
Express Spain
    	
 
    	
Liberia
    
	
Cellcontainer (No.5) Corp.
    	
 
    	
Express Black Sea
    	
 
    	
Liberia
    
	
Cellcontainer (No.6) Corp.
    	
 
    	
Express Berlin
    	
 
    	
Liberia
    
	
Cellcontainer (No.7) Corp.
    	
 
    	
Express Rome
    	
 
    	
Liberia
    
	
Cellcontainer (No.8) Corp.
    	
 
    	
Express Athens
    	
 
    	
Liberia
    

 

29

 

	
Shipowning Subsidiary
    	
 
    	
Vessel Name
    	
 
    	
Jurisdiction
    
	
Channelview Marine Inc.
    	
 
    	
ZIM Sao Paolo
    	
 
    	
Liberia
    
	
Containers Lines Inc.
    	
 
    	
Derby D
    	
 
    	
Liberia
    
	
Containers Services Inc.
    	
 
    	
ANL Tongala
    	
 
    	
Liberia
    
	
Continent Marine Inc.
    	
 
    	
ZIM Monaco
    	
 
    	
Liberia
    
	
Expresscarrier (No.1) Corp.
    	
 
    	
YM Mandate
    	
 
    	
Liberia
    
	
Expresscarrier (No.2) Corp.
    	
 
    	
YM Maturity
    	
 
    	
Liberia
    
	
Karlita Shipping Company Limited
    	
 
    	
Pusan C
    	
 
    	
Cyprus
    
	
Medsea Marine Inc.
    	
 
    	
ZIM Dalian
    	
 
    	
Liberia
    
	
Megacarrier (No.1) Corp.
    	
 
    	
Hyundai Honour
    	
 
    	
Liberia
    
	
Megacarrier (No.2) Corp.
    	
 
    	
Hyundai Respect
    	
 
    	
Liberia
    
	
Megacarrier (No.3) Corp.
    	
 
    	
Maersk Enping
    	
 
    	
Liberia
    
	
Megacarrier (No.4) Corp.
    	
 
    	
Maersk Exeter
    	
 
    	
Liberia
    
	
Megacarrier (No.5) Corp.
    	
 
    	
MSC Ambition
    	
 
    	
Liberia
    
	
Oceanew Shipping Limited
    	
 
    	
Europe
    	
 
    	
Cyprus
    
	
Oceanprize Navigation Limited
    	
 
    	
America
    	
 
    	
Cyprus
    
	
Ramona Marine Company Limited
    	
 
    	
CSCL Le Havre
    	
 
    	
Cyprus
    
	
Sarond Shipping Inc.
    	
 
    	
Danae C
    	
 
    	
Marshall Islands
    
	
Seacarriers Lines Inc.
    	
 
    	
YM Vancouver
    	
 
    	
Liberia
    
	
Seacarriers Services Inc.
    	
 
    	
YM Seattle
    	
 
    	
Liberia
    
	
Speedcarrier (No.1) Corp.
    	
 
    	
Vladivostok
    	
 
    	
Liberia
    
	
Speedcarrier (No.2) Corp.
    	
 
    	
Advance
    	
 
    	
Liberia
    
	
Speedcarrier (No.3) Corp.
    	
 
    	
Stride
    	
 
    	
Liberia
    
	
Speedcarrier (No.4) Corp.
    	
 
    	
Sprinter
    	
 
    	
Liberia
    
	
Speedcarrier (No.5) Corp.
    	
 
    	
Future
    	
 
    	
Liberia
    

 

30

 

	
Shipowning Subsidiary
    	
 
    	
Vessel Name
    	
 
    	
Jurisdiction
    
	
Speedcarrier (No.6) Corp.
    	
 
    	
Progress C
    	
 
    	
Liberia
    
	
Speedcarrier (No.7) Corp.
    	
 
    	
Highway
    	
 
    	
Liberia
    
	
Speedcarrier (No.8) Corp.
    	
 
    	
Bridge
    	
 
    	
Liberia
    
	
Teucarrier (No.1) Corp.
    	
 
    	
CMA CGM Attila
    	
 
    	
Liberia
    
	
Teucarrier (No.2) Corp.
    	
 
    	
CMA CGM Tancredi
    	
 
    	
Liberia
    
	
Teucarrier (No.3) Corp.
    	
 
    	
CMA CGM Bianca
    	
 
    	
Liberia
    
	
Teucarrier (No.4) Corp.
    	
 
    	
CMA CGM Samson
    	
 
    	
Liberia
    
	
Teucarrier (No.5) Corp.
    	
 
    	
CMA CGM Melisande
    	
 
    	
Liberia
    
	
Trindade Maritime Company
    	
 
    	
Amalia C
    	
 
    	
Marshall Islands
    
	
Vilos Navigation Company Ltd
    	
 
    	
MSC Zebra
    	
 
    	
Malta
    
	
Wellington Marine Inc.
    	
 
    	
Singapore
    	
 
    	
Liberia
    

 

31

 

SCHEDULE B

 

NON-SHIPOWNING SUBSIDIARIES

 

as of 10 August 2018

 

	
Non-Shipowning Subsidiary
    	
 
    	
Shipowning Subsidiaries Owned
    	
 
    	
Jurisdiction
    
	
Baker International S.A.
    	
 
    	
Boxcarrier (No.5) Corp.
   Channelview Marine Inc.
   Cellcontainer (No.4) Corp.
   Seacarriers Services Inc.
   Speedcarrier (No.4) Corp.
   Speedcarrier (No.6) Corp.
   Teucarrier (No.5) Corp.
    	
 
    	
Liberia
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Bayard Maritime Ltd.
    	
 
    	
Cellcontainer (No.5) Corp.
   Cellcontainer (No.7) Corp.
   Megacarrier (No.5) Corp.
   Oceanprize Navigation Limited Speedcarrier (No.5) Corp.
   Teucarrier (No.4) Corp.
    	
 
    	
Liberia
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Bounty Investment Inc.
    	
 
    	
Boxcarrier (No.2) Corp.
   Medsea Marine Inc.
   Megacarrier (No.3) Corp.
   Speedcarrier (No.8) Corp.
   Teucarrier (No.2) Corp.
    	
 
    	
Liberia
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Erato Navigation Inc.
    	
 
    	
Actaea Company Limited
   Oceanew Shipping Limited
   Trindade Maritime Company
   Vilos Navigation Company Ltd
    	
 
    	
Liberia
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Lito Navigation Inc.
    	
 
    	
Boxcarrier (No.4) Corp.
   Cellcontainer (No.2) Corp.
   Cellcontainer (No.8) Corp.
   Expresscarrier (No.2) Corp.
   Speedcarrier (No.2) Corp.
   Teucarrier (No.3) Corp.
    	
 
    	
Liberia
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Lydia Inc.
    	
 
    	
Balticsea Marine Inc.
    	
 
    	
Liberia
    

 

32

 

	
Non-Shipowning Subsidiary
    	
 
    	
Shipowning Subsidiaries Owned
    	
 
    	
Jurisdiction
    
	
 
    	
 
    	
Boxcarrier (No.3) Corp.
   Containers Lines Inc.
   Megacarrier (No.1) Corp.
   Speedcarrier (No.7) Corp.
   Wellington Marine Inc.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Sapfo Navigation Inc.
    	
 
    	
Boxcarrier (No.1) Corp.
   Cellcontainer (No.1) Corp.
   Expresscarrier (No.1) Corp.
   Megacarrier (No.2) Corp.
   Ramona Marine Company Limited
   Speedcarrier (No.1) Corp
   Teucarrier (No.1) Corp.
    	
 
    	
Liberia
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Tully Enterprises S.A.
    	
 
    	
Asteria Shipping Company Limited
   Boulevard Shiptrade S.A.
   Continent Marine Inc.
   Karlita Shipping Company Limited
   Megacarrier (No.4) Corp.
   Seacarriers Lines Inc.
   Sarond Shipping Inc.
    	
 
    	
Liberia
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Westwood Marine S.A.
    	
 
    	
Auckland Marine Inc.
   Bayview Shipping Inc.
   Blacksea Marine Inc.
   Cellcontainer (No.3) Corp.
   Cellcontainer (No.6) Corp.
   Containers Services Inc.
   Speedcarrier (No.3) Corp.
    	
 
    	
Liberia
    

 

33

 

APPENDIX I

 

FORM OF SHIPMANAGEMENT AGREEMENT

 

	
1. Date of Agreement
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
2. Owners (name, place of registered office and law   of registry)
    	
 
    	
3. Managers (name and law of registry)
    
	
 
    	
 
    	
 
    
	
ANNEX A // Subsidiary
    	
 
    	
DANAOS SHIPPING CO. LTD
    
	
 
    	
 
    	
 
    
	
Name
    	
 
    	
Name
    
	
 
    	
 
    	
 
    
	
Liberia / Cyprus / Singapore
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Place of registered office
    	
 
    	
Law of registry
    
	
 
    	
 
    	
 
    
	
Cyprus / Panama / Singapore / Greece / Bahamas
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Law of registry
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
4. Day and year of commencement of Agreement (Section 11*)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
5. Crew Management (state “yes” or “no” as agreed) (Section 5.1*)
    	
 
    	
6. Technical Management (state “yes” or “no” as   agreed) (Section 5.2*)
    
	
 
    	
 
    	
 
    
	
YES
    	
 
    	
YES
    
	
 
    	
 
    	
 
    
	
7. Commercial Management (state “yes” or “no” as   agreed) (Section 6.1*)
    	
 
    	
8. Insurance Arrangements (state “yes” or “no” as   agreed) (Section 6.4*)
    
	
 
    	
 
    	
 
    
	
YES
    	
 
    	
YES
    
	
 
    	
 
    	
 
    
	
9. Accounting Services (state “yes” or “no” as   agreed) (Section 6.3*)
    	
 
    	
10. Sale or purchase of the Vessel (state “yes” or   “no” as agreed) (Section 6.5(b)*)
    
	
 
    	
 
    	
 
    
	
YES
    	
 
    	
YES
    
	
 
    	
 
    	
 
    
	
11. Provisions (state “yes” or “no” as agreed) (Section 5.2*)
    	
 
    	
12. Bunkering (state “yes” or “no” as agreed)
    
	
 
    	
 
    	
 
    
	
YES
    	
 
    	
YES (if applicable)
    
	
 
    	
 
    	
 
    
	
13. Chartering Services Period (only to be filled in   if “yes” stated in Box 7) (Section 6.5(a)*)
    	
 
    	
14. Owner’s Insurance (Section 6.4*)
    
	
 
    	
 
    	
 
    
	
YES
    	
 
    	
YES
    
	
 
    	
 
    	
 
    
	
15. Crewing & Technical Management Fee,   Commercial Management Fee (state annual amount) (Sections 5.3 & 6.5*)
    	
 
    	
16. Severance Costs (state maximum amount)
    
	
 
    	
 
    	
N/A
    
	
 
    	
 
    	
 
    
	
17. Day and year of termination of Agreement (Section 11*)
    	
 
    	
18. Law and Arbitration (Sections 14, 15*)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
English Law; exclusive jurisdiction of the   Courts of England
    
	
 
    	
 
    	
 
    
	
19. Notices (state postal and cable address, telex   and telefax number for serving notice and communication to the Owners)   (Section 13*)
    	
 
    	
20. Notices (state postal and cable address, telex   and telefax number for serving notice and communication to the Managers)   (Section 13*)
    
	
 
    	
 
    	
 
    
	
Subsidiary. Same as box 20.
    	
 
    	
DANAOS SHIPPING CO. LTD.
    
	
 
    	
 
    	
14 Akti Kondyli, 185 45 Piraeus, Greece
    
	
 
    	
 
    	
Tel: 210 4196400 Fax: 210 4220855
    
	
 
    	
 
    	
Tlx: 212133 DECU GR
    
	
 
    	
 
    	
E-mail: danship@danaos.gr
    

 

*References are to the Management Agreement, dated as of 10 August 2018 between Danaos Corporation and Danaos Shipping Company Limited, as amended from time to time.

 

It is mutually agreed between the party stated in Box 2 and the party stated in Box 3 that this Agreement consists of Part I (the foregoing) and Part II (the Management Agreement, dated as of 10 August 2018 between Danaos Corporation and Danaos Shipping Company Limited, as amended from time to time) as well as Annex “A” (Details of Vessel) and each party agrees to be bound by both Part I and Part II hereto.

 

	
 
    	
 
    	
 
    
	
Signature(s) (Owners)
    	
 
    	
Signature(s) (Managers)
    

 

34

 

ANNEX “A” (DETAILS OF VESSEL OR VESSELS) TO SHIP MANAGEMENT AGREEMENT

 

	
Date of Agreement:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name of Vessel(s):
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Particulars of Vessel(s):
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
DETAILS
    	
 
    	
Vessel
    
	
 
    	
 
    	
 
    
	
Owner
    	
 
    	
 
    
	
Type
    	
 
    	
 
    
	
Class
    	
 
    	
 
    
	
Port of Registry
    	
 
    	
 
    
	
Year Built
    	
 
    	
 
    
	
Builder
    	
 
    	
Vessel’s details
    
	
LOA
    	
 
    	
 
    
	
Breadth Moulded
    	
 
    	
 
    
	
GRT
    	
 
    	
 
    
	
NRT
    	
 
    	
 
    
	
M/E Maker Type
    	
 
    	
 
    

 

35

 

APPENDIX II

 

FORM OF SUPERVISION AGREEMENT

 

THIS AGREEMENT is made the       day of                     20      

 

BETWEEN:

 

1.              DANAOS CORPORATION (or a subsidiary company to be nominated) a company incorporated under the laws of the Marshall Islands whose registered office is Trust Company Complex, Ajeltake Island, Ajeltake Road, Majuro, Marshall Islands MH96960 and whose principal place of business is at 14 Akti Kondyli, 185 45 Piraeus, Greece (the “Owner”) {if different from the Buyer under the Shipbuilding Contract otherwise Owner to be the same with the Buyer as herein defined}

 

2.              DANAOS SHIPPING CO. LTD. a company incorporated under the laws of Cyprus whose registered office is at 3 Christaki Kompou Street, Peter’s House, Limassol 3300 and whose principal place of business is at 14 Akti Kondyli, 185 45 Piraeus, Greece (the “Construction Supervisor”).

 

WHEREAS:

 

By a shipbuilding contract dated              and made between              (the “Builder”) and              (the “Buyer”) (the “Shipbuilding Contract”) the Builder agreed to construct, to the order of the Buyer, and sell to the Buyer, a              TEU container vessel, known during construction as Hull No.      and to be named        (the “Vessel”);

 

IT IS NOW AGREED as follows:

 

1.                                      DEFINITIONS

 

1.1                               Except as otherwise defined herein, all terms defined in the Shipbuilding Contract shall have the same respective meanings when used herein.

 

1.2                               In this Agreement, unless the context otherwise requires, the following expressions shall have the following meanings:

 

“Business Day” means:

 

(i)                                     in relation to a payment which is to be made hereunder or under any other document, a day, other than a Saturday or Sunday or a public holiday, on which major retail banks in London and New York, and (in respect of any payments which are to be made to the Builder)                 , are open for non-automated customer services; and

 

36

 

(ii)                                  in any other case, a day, other than a Saturday or Sunday or a public holiday, on which major retail banks in London and Athens are open for non-automated customer services.

 

“Building Period” means the period from the execution of this agreement to and including the date of delivery of the Vessel pursuant to the Shipbuilding Contract.

 

“Buyer’s Supplies” means all of the items to be furnished by the Buyer in accordance with Article            of the Shipbuilding Contract.

 

“Spares” means the items to be designated as spares by the parties hereto at the time of the delivery of the Vessel.

 

2.                                      APPOINTMENT

 

2.1                               The Owner hereby appoint the Construction Supervisor and the Construction Supervisor hereby agrees to act as the Owner’s supervisor towards the Builder and as the “Owner’s Representative” under the Shipbuilding Contract for the duration of the Building Period and to perform the duties and rights which rest with the Owner regarding the construction and delivery of the Vessel in accordance with all of the provisions of the Shipbuilding Contract. The Owner shall be responsible for, inter alia, determining the general policy of supervision of construction of the Vessel and the scope of activities of the Construction Supervisor and, in the performance of its duties under this Agreement, the Construction Supervisor shall at all times act strictly in accordance with any instructions or directions given to it by the Owner regarding such general policy or, in the absence of such instructions or directions, in accordance with the standards of a prudent supervisor providing services of the type to be provided under this Agreement, having due regard to the Owner’s interest. Any instructions so given shall be consistent with the nature and scope of the supervision services required to be performed by the Construction Supervisor under this Agreement and shall not require the Construction Supervisor to do or omit to do anything which may be contrary to any applicable law of any jurisdiction or which is inconsistent or contrary to any of the rights and duties of the Owner under the Shipbuilding Contract.

 

2.2                               Specific powers and duties of the Construction Supervisor

 

Without prejudice to the generality of the appointment made under Clause 2.1, and (where applicable) by way of addition to the rights, powers and duties so conferred, the Construction Supervisor shall, subject to this Clause 2 and to Clauses 3 and 4, have and be entrusted with the following rights, powers and duties in relation to the Shipbuilding Contract:

 

(a)                                 under Article          , to review, comment on, agree and approve the lists of plans and the drawings referred to; to attend the testing of the Vessel’s machinery, outfitting and equipment and to request any tests or inspections which the Construction Supervisor may consider appropriate

 

37

 

or desirable and to review and comment on the results of all tests and inspections; to carry out such inspections and give such advice or suggestions to the Builder as the Construction Supervisor may consider appropriate or desirable; and to give notice to the Builder in the event that the Construction Supervisor discovers any construction, material or workmanship which the Construction Supervisor believes does not or will not conform to the requirements of the Shipbuilding Contract and the specifications;

 

(b)                                 under Article         to appoint a representative of the Construction Supervisor for the purposes specified in that Article;

 

(c)                                  if any alteration or addition to the Shipbuilding Contract becomes obligatory or desirable, to consult with the Builder and make recommendations to the Owner as to whether or not acceptance should be given to any proposal notified to the Owner by the Builder;

 

(d)                                 under Article        to request and agree to any minor alterations, additions, or modifications to the Vessel or the specification and any substitute materials pursuant to Article        which the Construction Supervisor may consider appropriate or desirable, provided that if the cost of such variations or substitute materials would have the effect of altering the Contract Price (as defined in the Shipbuilding Contract) by more than five per cent (5%) from the Contract Price on the date hereof or the amount of any of the installments of the Contract Price due under the Shipbuilding Contract, the Construction Supervisor shall notify the same to the Owner in writing; to receive from and transmit to the Builder information relating to the requirements of the classification society and to give instructions and agree with the Builder regarding alterations, additions, or changes in connection with such requirements; and to approve the substitution of materials as requested by the Builder;

 

(e)                                  under Article        , to attend and witness the trials of the Vessel;

 

(f)                                   to determine whether the Vessel has been designed, constructed, equipped and completed in accordance with, and complies with, the Shipbuilding Contract and the Specifications and Plans (as defined in the Shipbuilding Contract); under Article       , Paragraph        , to give the Builder a notice of acceptance or (as the case may be) rejection of the Vessel, to require or request any further test and inspection of the Vessel, and to give and receive any further or other notice relative to such matters and generally to advise the Owner in respect of all such matters;

 

(g)                                  to sign together with the Owner any protocols as to sea trials, consumable stores, delivery and acceptance or otherwise, having first ascertained the appropriateness of so doing;

 

38

 

(h)                                 to accept on behalf of the Owner the documents specified in Article        , Paragraph          to be delivered by the Builder at Delivery and to confirm receipt thereof to the Owner;

 

(i)                                     to give and receive on behalf of the Owner any notice contemplated by the Shipbuilding Contract, provided that the Construction Supervisor shall not have authority to give on behalf of the Owner any notice which the Owner may be entitled to give to cancel, repudiate or rescind the Shipbuilding Contract without the prior written consent of the Owner; and

 

(j)                                    to purchase all Buyer’s Supplies as agent of the Owner and supply and deliver the same together with all necessary specifications, plans, drawings, instruction books, manuals, test reports and certificates to the Builder under Article        , and provide to the Owner a list of all such Buyer’s Supplies as soon as possible.

 

2.3                               The Construction Supervisor shall discharge its responsibilities under this Clause as the Owner’s agent.

 

2.4                               The costs of supplying and delivering Buyer’s Supplies pursuant to Article         shall be reimbursed by the Owner on Delivery against supporting invoices from the Construction Supervisor which the Construction Supervisor shall supply to the Owner at the same time as the notice to be given pursuant to Clause 3(c)(i).

 

3.                                      CONSTRUCTION SUPERVISOR’S DUTIES REGARDING CONSTRUCTION

 

The Construction Supervisor undertakes with the Owner with respect to the Shipbuilding Contract:

 

(a)                                 to notify the Owner in writing promptly on becoming aware of any likely change to any of the dates on which any installment under the Shipbuilding Contract is expected to be due;

 

(b)                                 to (i) notify the Owner in writing of the expected date on which the launching or, as the case may be, sea trials of the Vessel is or are to take place and (ii) promptly on the same day as the launching or, as the case may be, sea trials of the Vessel takes or take place to confirm that the launching or, as the case may be, sea trials of the Vessel has or have taken place and, where relevant, that the amount specified in such confirmation is due and payable;

 

(c)                                  to (i) advise the Owner in writing, four (4) Business Days prior to the date on which the delivery installment under the Shipbuilding Contract is anticipated to become due, of the times and amounts of payments to be made to the Builder under the Shipbuilding Contract and the amount due to the Construction Supervisor for Buyer’s Supplies and (ii) promptly confirm the same on the day on which such installment becomes due (and

 

39

 

being the date the same is required to be paid to the account referred to in Article        , Paragraph          of the Shipbuilding Contract);

 

(d)                                 not to accept the Vessel or delivery of the Vessel on the Owner’s behalf without the Owner’s prior written approval and unless the Construction Supervisor shall have previously certified to the Owner in writing, in the form of the certificate set out in Schedule 1 to this Agreement, that:

 

(i)                                     the Vessel has been duly completed and is ready for delivery to and acceptance by the Owner in or substantially in accordance with the Shipbuilding Contract and the Specifications and Plans;

 

(ii)                                  there is, to the best of the Construction Supervisor’s knowledge and belief having made due enquiry with the Builder, no lien or encumbrance on the Vessel other than the lien in favor of the Builder in respect of the delivery installment of the Contract Price due in accordance with Article          ;

 

(iii)                               the Vessel is safe and undamaged; and

 

(iv)                              the Vessel is recommended for classification by the                 (and the Construction Supervisor shall attach to its certificate the provisional certificate of               recommending such classification of the Vessel or a duplicate or photocopy of such provisional certificate or otherwise provide evidence of such classification to the Owner);

 

(e)                                  on receipt thereof from the Builder promptly to deliver the documents specified in Article       , Paragraph          to the Owner or as the Owner may direct; and

 

(f)                                   not without the prior written approval of the Owner to request of or agree with the Builder any material alterations, additions or modifications to the Vessel.

 

4.                                      CONSTRUCTION SUPERVISOR’S GENERAL OBLIGATIONS

 

4.1                               The Construction Supervisor undertakes to the Owner, with respect to the exercise and performance of its rights, powers and duties as the Owner’s representative under this Agreement, as follows:

 

(a)                                 it will well and faithfully serve the Owner as Owner’s agent and will at all times use its best endeavors to protect and promote all of the interests and the welfare of the Owner in relation to the Vessel including, without limitation, its design, construction, fitting out and purchase;

 

(b)                                 it will ensure the due and punctual observance and performance of all conditions, duties and obligations imposed on the Owner by the

 

40

 

Shipbuilding Contract (other than to pay the Contract Price) and will not without the prior written consent of the Owner:

 

(i)                                     exercise any rights of the Owner to cancel, repudiate or rescind the Shipbuilding Contract; or

 

(ii)                                  waive, modify or suspend any provision of the Shipbuilding Contract if as a result of such waiver, modification or suspension the Owner will or may suffer any adverse consequences;

 

(c)                                  it will use its best endeavors to ensure the observance and performance by the Builder of all conditions, duties and obligations imposed on the Builder by the Shipbuilding Contract;

 

(d)                                 it will at its own expense keep all necessary and proper books, accounts, records and correspondence files relating to its duties and activities under this Agreement and shall send quarterly reports to the Owner concerning the progress of the design and construction of the Vessel and keep the Owner promptly informed of any deviations from the building program; and

 

(e)                                  it will ensure that any employee(s) of the Construction Supervisor appointed by the Construction Supervisor as representative(s) of the Construction Supervisor for the purpose of Article .... shall have appropriate technical qualifications and experience in relation to the construction of ships of the same type as the Vessel and shall be familiar with good international shipbuilding practices.

 

5.                                      INSURANCE

 

The Construction Supervisor undertakes to keep its representatives at the Builder’s premises or on board the Vessel fully insured against all loss, damages or injuries incurred or suffered by any of them and agrees that the Owner shall not in any respect be liable or responsible for any loss or damage caused by any such persons to the Builder or the Builder’s equipment and the Construction Supervisor undertakes to keep its representatives, the Builder and the Owner fully and effectively indemnified against any liability, loss or claim for any such damage or injuries even to the extent that the same are not fully recovered under the terms of any policy or proceeds of insurance or were not caused by the gross negligence of the Builder or its employees, agents or sub-contractors.

 

6.                                      FEES

 

In consideration of the performance of the duties assigned to the Construction Supervisor in this Agreement the Owner shall pay to the Construction Supervisor the sum of USD$725,000 for its total supervision costs in connection with the supervision of the construction of the Vessel, and any expenses incurred under the Shipbuilding Contract against presentation of supporting invoices from the Construction Supervisor which the Construction Supervisor shall supply to the Owner at the same time as the notice to be given pursuant to Clause 3(c)(i). The construction

 

41

 

supervision fee shall include all costs which are incurred by the Construction Supervisor in connection with the ordinary exercise and performance by the Construction Supervisor of the rights, powers and duties entrusted to it pursuant to this Agreement.

 

7.                                      COMMENCEMENT - TERMINATION

 

This Agreement shall come into effect on                               and shall continue until delivery of the Vessel to the Owner by the Builder.

 

This Agreement may, however, be terminated with immediate effect by the Owner in the event that the Construction Supervisor is in material default of its obligations hereunder and/or in the event that the Shipbuilding Contract is cancelled or terminated. The Construction Supervisor shall in the event of immediate termination not be entitled to receive any payment in respect of the fees and other amounts described in Clause 6.

 

8.                                      LIABILITIES

 

Neither the Owner nor the Construction Supervisor shall be under any liability for any failure to perform any of their obligations hereunder by reason of any cause whatsoever beyond their control.

 

Without prejudice to the foregoing, the Construction Supervisor shall be under no liability whatsoever for any loss, damage, delay or expense of whatever nature, whether direct or indirect (including but not limited to loss of profit arising out of or in connection with detention of or delay of the Vessel) and however arising in the course of performance of its duties under this Agreement, unless the same is proved to have resulted solely from the negligence or willful misconduct of the Construction Supervisor.

 

9.                                      EMPLOYEES

 

9.1                               None of the employees and/or sub-contractors of the Construction Supervisor shall constitute, for the purposes of this Agreement, sub-agents of the Owner. The Construction Supervisor in its capacity as employer and contractor (and not in its capacity as agent for the Owner), shall (a) be responsible for the salaries, expenses and costs in respect of each of its employees and sub-contractors (not in its capacity as agent for the Owner) and (b) indemnify its employees and sub-contractors for any liabilities and losses incurred by such employees and sub-contractors. For the avoidance of doubt, the Owner shall not be liable for any liabilities, losses, costs or expenses incurred by the Construction Supervisor in its capacity as employer and contractor.

 

10.                               GOVERNING LAW - JURISDICTION

 

10.1                        This Agreement shall be governed by and be construed in accordance with English law.

 

10.2                        The Construction Supervisor agrees, for the benefit of the Owner, that any legal action or proceedings arising out of or in connection with this Agreement shall be

 

42

 

brought in the English courts and hereby irrevocably and unconditionally submits to the jurisdiction of such courts. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not.

 

10.3                        The Construction Supervisor agrees that the process by which any proceedings are begun under this Agreement may be served on it by being delivered in connection with any proceedings in England, to                    If this appointment ceases to be effective, the Construction Supervisor shall immediately appoint a further person in England to accept service of process on its behalf in England. Nothing contained herein shall affect the right to serve process in any other manner permitted by law.

 

11.                               COUNTERPARTS

 

This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument.

 

12.                               NOTICES

 

12.1                        Every notice or other communication under this Agreement shall:

 

(a)                                 be in writing delivered personally or by first-class prepaid letter (airmail if available) or facsimile transmission or other means of telecommunication (other than telex) in permanent written form;

 

(b)                                 be deemed to have been received, in the case of a letter, when delivered personally or three (3) days after it has been put into the post and, in the case of a facsimile transmission or other means of telecommunication (other than telex) in permanent written form, at the time of dispatch (provided that if the date of dispatch is a Saturday or Sunday or a public holiday in the country of the addressee or if the time of dispatch is after the close of business in the country of the addressee it shall be deemed to have been received at the opening of business on the next day which is not a Saturday or Sunday or public holiday); and

 

(c)                                  be sent:

 

(i)                                     To the Construction Supervisor at:

 

Danaos Shipping Co. Ltd
 14 Akti Kondyli
 185 45 Piraeus
 Greece
 Facsimile No.: +30 210 42 20 855
 Attention: Legal Department

 

43

 

(ii)                                  To the Owner at:

 

Danaos Corporation
 14 Akti Kondyli
 185 45 Piraeus
 Greece
 Facsimile No.: +30 210 42 20 855
 Attention: Legal Department

 

or to such other address and/or numbers for a party as is notified by such party to the other party under this Agreement.

 

12.2                        Each communication and document made or delivered by one party to another pursuant to this Agreement shall be in the English language.

 

13.                               CONTRACT (RIGHTS OF THIRD PARTIES) ACT 1999

 

A person who is not a party to this Agreement has no right under the Contract (Rights of Third Parties) Act 1999 to enforce any term of this Agreement.

 

IN WITNESS of which this Agreement has been duly executed the day and year first before written.

 

For the Owner

 

For the Construction Supervisor

 

44

 

SCHEDULE 1

 

FORM OF CONSTRUCTION CERTIFICATE

 

[On the headed notepaper of the Construction Supervisor]

 

[Vessel Owner] (the “Owner”)

[Address]

Facsimile: [                                  ]

Attention: [                                  ]

 

	
 
    	
Date:
    	
 
    

 

 

Dear Sirs,

 

[Name of Builder] (the “Builder”), [Name of Vessel] (the “Vessel”)

 

We refer to the construction supervision agreement dated [                                                                                                                           ] between the Owner and us (the “ Supervision Agreement”).

 

Words and expression defined in the Supervision Agreement (whether expressly or by incorporation by reference to another document) shall have the same meaning where used in this certificate.

 

We hereby certify, pursuant to Clause 3(d) of the Supervision Agreement, as follows:

 

(i)                                    the Vessel has been duly completed and is ready for delivery to and acceptance by the Owner in or substantially in accordance with the Shipbuilding Contract and the Specifications and Plans;

 

(ii)                                 there is, to the best of our knowledge and belief having made due enquiry with the Builder, no lien or encumbrance on the Vessel other than the lien in favor of the Builder in respect of the deliver installment of the Contract Price due in accordance with Article [ ];

 

(iii)                              the Vessel is safe and undamaged; and

 

(iv)                             the vessel is recommended for classification by [Name of the classification society] (the “Classification Society”).

 

With respect to paragraph (iv) above, please find attached to this certificate the provisional certificate of the Classification Society recommending such classification of the Vessel / a duplicate or photocopy of the provisional certificate of the Classification Society recommending such classification of the Vessel / the following evidence of the Classification Society’s recommendation of such classification of the Vessel [ ].

 

45

 

	
Yours faithfully
    
	
 
    
	
 
    	
 
    
	
for and on behalf of
    	
 
    

 

DANAOS SHIPPING COMPANY LIMITED

 

46

 

APPENDIX III

 

Restrictive Covenant Agreement

 

47

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