Document:

Exhibit 4.28

 

 

Dated 24 January 2011

 

US$80,000,000 Term Loan Facility Agreement in respect of Hull No. S460 under construction at Hyundai Samho Heavy Industries Co., Ltd

 

DANAOS CORPORATION
 as borrower and Company

 

Provided by the banks and financial institutions listed in Schedule 1

 

Citibank, N.A.

 

EFG Eurobank Ergasias S.A.

 

as Existing Hedge Counterparties

 

Citibank, N.A., London Branch
 as Account Bank

 

Citibank International Plc
 as Facility Agent

 

and

 

Citibank, N.A. London Branch

                                                                                                                                                    as Security Trustee

 

Norton Rose LLP

3 More London Riverside

London

SE1 2AQ

 

The provisions of this Agreement are subject to the provisions of the Restructuring Agreement (as herein defined)

 

 

Contents

 

	
Clause
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
1
    	
Purpose and definitions
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
2
    	
The Total Commitments and   the Loan
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
3
    	
Interest and Interest   Periods
    	
 
    	
15
    
	
 
    	
 
    	
 
    	
 
    
	
4
    	
Repayment, prepayment and   cancellation
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    
	
5
    	
Commitment commission, fees   and expenses
    	
 
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
6
    	
Payments; accounts and   calculations
    	
 
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
7
    	
Tax Gross up
    	
 
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
8
    	
Representations and warranties
    	
 
    	
24
    
	
 
    	
 
    	
 
    	
 
    
	
9
    	
Undertakings
    	
 
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
10
    	
Conditions precedent
    	
 
    	
38
    
	
 
    	
 
    	
 
    	
 
    
	
11
    	
Events of Default
    	
 
    	
39
    
	
 
    	
 
    	
 
    	
 
    
	
12
    	
Indemnities
    	
 
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
13
    	
Increased costs
    	
 
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
14
    	
Security, set-off and   pro-rata payments
    	
 
    	
44
    
	
 
    	
 
    	
 
    	
 
    
	
15
    	
Earnings Account
    	
 
    	
46
    
	
 
    	
 
    	
 
    	
 
    
	
16
    	
Assignment, substitution   and Facility Office
    	
 
    	
48
    
	
 
    	
 
    	
 
    	
 
    
	
17
    	
Appointment of the Facility   Agent and Security Trustee
    	
 
    	
49
    
	
 
    	
 
    	
 
    	
 
    
	
18
    	
Notices and other matters
    	
 
    	
50
    
	
 
    	
 
    	
 
    	
 
    
	
19
    	
Confidentiality
    	
 
    	
53
    
	
 
    	
 
    	
 
    	
 
    
	
20
    	
Governing law
    	
 
    	
53
    
	
 
    	
 
    	
 
    	
 
    
	
21
    	
Enforcement
    	
 
    	
54
    
	
 
    	
 
    	
 
    	
 
    
	
Schedule 1   The Lenders and the Existing Hedge Counterparties
    	
 
    	
55
    
	
 
    	
 
    	
 
    
	
Schedule 2   Form of Drawdown Notice
    	
 
    	
56
    
	
 
    	
 
    	
 
    
	
Schedule 3   Documents and evidence required as conditions precedent
    	
 
    	
57
    
	
 
    	
 
    	
 
    
	
Schedule 4   Form of Substitution Certificate
    	
 
    	
66
    
	
 
    	
 
    	
 
    
	
Schedule 5   Form of Increase Confirmation
    	
 
    	
70
    
					

 

 

THIS AGREEMENT is dated 24 January 2011 and made BETWEEN:

 

(1)                        DANAOS CORPORATION as borrower and Company;

 

(2)                        the banks and financial institutions whose names and addresses are set out in Part 1 of Schedule 1 as lenders;

 

(3)                        the banks and financial institutions whose names and addresses are set out in Part 2 of Schedule 1 as existing hedge counterparties;

 

(4)                        CITIBANK, N.A., London Branch as account bank;

 

(5)                        CITIBANK INTERNATIONAL Plc as facility agent; and

 

(6)                        CITIBANK, N.A., London Branch as security agent and trustee.

 

IT IS AGREED as follows:

 

1                              Purpose and definitions

 

Purpose

 

1.1                     This Agreement sets out the terms and conditions upon and subject to which the Lenders agree, according to their several obligations, to make available to the Company a loan of up to eighty million US Dollars (US$80,000,000) to be used for the purpose of financing part of the cost of construction and purchase of one 12,600 TEU containership which will at the time of delivery be registered in the name of the Owner under the laws and flag of the Flag State.

 

Defined expressions

 

1.2                     Words and expressions defined in the Restructuring Agreement shall, unless the context otherwise requires or unless otherwise defined herein, have the same meanings when used in this Agreement whether or not the Restructuring Termination Date has occurred.

 

Definitions

 

1.3                     In this Agreement, unless the context otherwise requires:

 

Accession Undertaking means a document substantially in the form set out in Schedule 1 of the Agency Agreement.

 

Account Bank means Citibank N.A., London Branch and includes its successors in title.

 

Advance means each borrowing of a proportion of the Total Commitments by the Company or (as the context may require) the outstanding principal amount of such borrowing.

 

Agency Agreement means the trust and agency deed executed or (as the context may require) to be executed between the Combined Creditors in the agreed form.

 

Approved Brokers means such firm of insurance brokers, appointed by the Owner, as may from time to time be approved in writing by the Security Trustee (acting on the instructions of the Lenders) for the purposes of the Finance Documents.

 

Assignee has the meaning given to that term in clause 16.3.

 

Builder means Hyundai Samho Heavy Industries Co., Ltd of 1700, Yongdang - Ri, Samho - Eup, Youngam - Gun, Chollanam - Do, Korea and includes its successors in title.

 

Casualty Amount means five hundred thousand US Dollars (US$500,000) (or the equivalent in any other currency).

 

1

 

Charter means the time charterparty dated 18 October 2007 (as amended by Addendum No. 1 thereto and Addendum No. 2 dated 18 June 2009) entered into by the Owner and the Charterer relating to the chartering of the Ship for an initial fixed period of twelve (12) years commencing on the Delivery Date.

 

Charter Assignment means a specific assignment of the Charter executed or (as the context may require) to be executed by the Owner in favour of the Security Trustee (as security agent and trustee on behalf of the Combined Creditors) in a form and substance acceptable to the Security Trustee (acting on the instructions of the Combined Creditors).

 

Charterer means Hyundai Merchant Marine Co., Ltd. of Hyundai Group Building, 1-7 Yeonji-dong, Jongro-ku, Seoul 110-052, Korea.

 

Classification means the classification +100 AS, Container Ship, Solas II-2 Reg.19, +MC, AUT, IW, RSD, STAR, ERS, BWM with the Classification Society or such other classification as the Facility Agent (acting on the instructions of the Lenders) shall, at the request of the Company, have agreed in writing shall be treated as the Classification in relation to the Ship for the purposes of the Finance Documents.

 

Classification Society means Germanischer Lloyd or such other classification society who is a member of the International Association of Classification Societies which the Facility Agent (acting on the instructions of the Lenders) shall, at the request of the Company, have agreed in writing shall be treated as the Classification Society in relation to the Ship for the purposes of the Finance Documents.

 

Combined Creditors means collectively, the Creditors and the Existing Hedge Counterparties and Combined Creditor means any of them.

 

Commitment means, in relation to each of the Lenders, the amount set out opposite its name in Schedule 1 or, as the case may be, in any relevant Substitution Certificate or, as the case may be, assumed by it in accordance with clause 2.2, to the extent not cancelled, reduced or transferred by it under any relevant term of this Agreement.

 

Company means Danaos Corporation, a corporation domesticated and existing under the laws of the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, The Marshall Islands MH 96960 and includes its successors in title.

 

Compulsory Acquisition means requisition for title or other compulsory acquisition, requisition, appropriation, expropriation, deprivation, forfeiture or confiscation for any reason of the Ship by any Government Entity or other competent authority, whether de jure or de facto, but shall exclude requisition for use or hire not involving requisition of title.

 

Contract means the shipbuilding contract dated 28 September 2007 (as supplemented and amended by Addendum No 1 dated 28 September 2007, Addendum No 2 dated 24 June 2009 and by the agreement dated 27 September 2010 relating to a seller’s credit) and made between the Builder and the Owner, as the same may hereafter be supplemented and/or amended from time to time, relating to the construction and purchase of the Ship.

 

Contract Assignment Consent and Acknowledgement means, in relation to the Ship, the acknowledgement of notice of, and consent to, the assignment in respect of the Contract to be given by the Builder, in the form scheduled to the relevant Pre-delivery Security Assignment or otherwise in a form and substance acceptable to the Security Trustee (acting on the instructions of the Combined Creditors).

 

Contract Instalment Advance means an Advance made, or to be made, to finance, in part, the payment of the keel-laying instalment of the Contract Price.

 

Contract Price means the price payable by the Owner to the Builder in accordance with the Contract, being US$166,166,000 or such other sum as is determined in accordance with the terms and conditions of the Contract.

 

2

 

Contribution means in relation to a Lender, the principal amount of the Loan owing to such Lender at any relevant time.

 

Creditors means collectively, the Account Bank, the Facility Agent, the Security Trustee and the Lenders and Creditor means any of them.

 

Default means an Event of Default or any event or circumstance specified in clause 11 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

 

Delivery means the delivery of the Ship by the Builder to, and the acceptance of the Ship by, the Owner pursuant to the Contract.

 

Delivery Date means the date upon which Delivery of the Ship occurs.

 

Delivery Date Advance means an Advance made, or to be made, to finance, in part, the instalment of the Contract Price falling due on the Delivery Date.

 

DOC means a document of compliance issued to an Operator in accordance with rule 13 of the ISM Code.

 

Drawdown Date means any date, being a Business Day falling during the Drawdown Period, on which an Advance is, or is to be, made.

 

Drawdown Notice means a notice substantially in the terms of Schedule 2.

 

Drawdown Period means the period from the date of this Agreement and ending on the Termination Date or the period ending on such earlier date (if any) on which:

 

(a)                        the aggregate amount of all Advances is equal to the Total Commitments; or

 

(b)                       the Total Commitments are reduced to zero pursuant to clause 11.21 or clause 13 or any other provision of this Agreement.

 

Earnings means all moneys whatsoever from time to time due or payable to the Owner during the Security Period arising out of the use or operation of the Ship including all freight, hire and passage moneys, income arising out of pooling arrangements, compensation payable to the Owner in the event of requisition of the Ship for hire, remuneration for salvage or towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship and any sums recoverable under any loss of earnings insurance.

 

Earnings Account means an interest bearing Dollar account of the Company to be opened by the Company with the Account Bank and includes any other account designated in writing by the Account Bank to be the Earnings Account for the purposes of this Agreement.

 

Earnings Account Charge means the charge executed or (as the context may require) to be executed by the Company in favour of the Security Trustee (as security agent and trustee on behalf of the Combined Creditors) in respect of the Earnings Account in a form and substance acceptable to the Security Trustee (acting on the instructions of the Combined Creditors).

 

Environmental Claim means:

 

(a)                        any and all enforcement, clean-up, removal or other governmental or regulatory action or order or claim instituted or made pursuant to any Environmental Law or resulting from a Spill; or

 

(b)                       any claim made by any other person relating to a Spill.

 

3

 

Environmental Incident means any Spill:

 

(a)                        from any Fleet Vessel; or

 

(b)                       from any other vessel in circumstances where:

 

(i)         any Fleet Vessel or its owner, operator or manager may be liable for Environmental Claims arising from the Spill (other than Environmental Claims arising and fully satisfied before the date of this Agreement); and/or

 

(ii)      any Fleet Vessel may be arrested or attached in connection with any such Environmental Claims.

 

Environmental Laws means all laws, regulations and conventions concerning pollution or protection of human health or the environment.

 

Event of Default means an event or circumstance specified as such in clause 11.1.

 

Existing Hedge Counterparties means the banks and financial institutions whose names and addresses are set out in Part 2 of Schedule 1 and Existing Hedge Counterparty means either of them.

 

Existing Master Swap Agreements means:

 

(a)                        the agreement dated 5 December 2007 (as amended on 21 January 2008) made between the Company and Citibank, N.A.; and

 

(b)                       the agreement dated 5 December 2007 made between the Company and EFG Eurobank Ergasias S.A.,

 

each comprising an ISDA Master Agreement and Schedule thereto and any Confirmations (as defined therein) supplemental thereto.

 

Facility Agent means Citibank International Plc of 5th Floor, Citigroup Centre, 25 Canada Square, Canary Wharf, London E14 5LB or such other person as may be appointed facility agent for the Creditors pursuant to the Agency Agreement and includes its successors and assigns.

 

Facility Defaulting Lender means any Lender:

 

(a)                        which in breach of its obligations under a Finance Document, has failed to make its participation in an Advance available or has notified a Party that it will not make its participation in an Advance available by the proposed Drawdown Date on which such Advance is intended to be made in accordance with the provisions of this Agreement;

 

(b)                       which, in breach of its obligations under a Finance Document, has otherwise rescinded or repudiated a Finance Document; or

 

(c)                        with respect to which a Finance Party Insolvency Event has occurred and is continuing,

 

unless:

 

(i)                          its failure to pay is caused by:

 

(A)                    administrative or technical error; or

 

(B)                      a Disruption Event; and

 

payment is made within 3 Business Days of its due date; or

 

(ii)                       the Lender is:

 

4

 

(A)                    disputing in good faith whether it is contractually obliged to make the payment in question; or

 

(B)                      is asserting in good faith that it is entitled to rescind or repudiate the relevant Finance Documents,

 

and has provided reasonably detailed information to the Company (with a copy to the Facility Agent) setting out on what basis it believes that it is not contractually obliged to make such payment or is entitled to rescind or repudiate the relevant Finance Document.

 

Facility Office means the office or offices notified by a Lender to the Facility Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days’ written notice) as the office through which it will perform its obligations under this Agreement.

 

Fee Letter means the letter executed or (as the context may require) to be executed by the Company, the Facility Agent, the Security Trustee and the Account Bank.

 

Final Repayment Date means, subject to clauses 6.13 and 6.14, 31 December 2018.

 

Finance Documents means:

 

(a)                        this Agreement;

 

(b)                       the Agency Agreement;

 

(c)                        the Earnings Account Charge;

 

(d)                       the Charter Assignment;

 

(e)                        any Contract Assignment Consent and Acknowledgement;

 

(f)                          the Fee Letter;

 

(g)                       the General Assignment;

 

(h)                       the Manager’s Undertaking;

 

(i)                           the Existing Master Swap Agreements;

 

(j)                           the Mortgage;

 

(k)                        the Owner’s Guarantee;

 

(l)                           the Owner Share Pledge;

 

(m)                     the Pre-delivery Security Assignment;

 

(n)                       any Refund Guarantee Assignment Consent and Acknowledgement;

 

(o)                       the Restructuring Documents;

 

(p)                       the Vendor Finance Intercreditor Agreement;

 

(q)                       any other documents as may have been or shall from time to time after the date of this Agreement be executed to guarantee and/or secure all or any part of the Loan, interest thereon and other moneys from time to time owing by the Company pursuant to this Agreement, the Existing Master Swap Agreements and/or the Restructuring Documents (whether or not any such document also secures moneys from time to time owing pursuant to any other document or agreement); and

 

5

 

(r)                          any other document designated as such by Security Trustee and the Company.

 

Flag State means the Republic of Liberia or such other state or territory approved in writing by the Facility Agent (acting on the instructions of the Lenders), at the request of the Company, as being the Flag State of the Ship for the purposes of the Finance Documents.

 

Fleet Vessel means the Ship and any other vessel owned, operated, managed or crewed by any member of the Group.

 

General Assignment means the general assignment executed or (as the context may require) to be executed by the Owner in favour of the Security Trustee (as security agent and trustee on behalf of the Combined Creditors) in a form and substance acceptable to the Security Trustee (acting on the instructions of the Combined Creditors).

 

Government Entity means and includes (whether having a distinct legal personality or not) any national or local government authority, board, commission, department, division, organ, instrumentality, court or agency and any association, organisation or institution of which any of the foregoing is a member or to whose jurisdiction any of the foregoing is subject or in whose activities any of the foregoing is a participant.

 

Impaired Agent means the Facility Agent at any time when:

 

(a)                        it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment;

 

(b)                       the Facility Agent otherwise rescinds or repudiates a Finance Document;

 

(c)                        (if the Facility Agent is also a Lender) it is a Facility Defaulting Lender under paragraph (a) or (b) of the definition of Facility Defaulting Lender; or

 

(d)                       a Finance Party Insolvency Event has occurred and is continuing with respect to the Facility Agent;

 

unless, in the case of paragraph (a) above:

 

(i)         its failure to pay is caused by:

 

(A)                              administrative or technical error; or

 

(B)                                a Disruption Event; and

 

payment is made within 3 Business Days of its due date; or

 

(ii)      the Facility Agent is disputing in good faith whether it is contractually obliged to make the payment in question.

 

Increase Confirmation means a confirmation substantially in the form set out in Schedule 5.

 

Increase Lender has the meaning given to that term in clause 2.2.

 

Insurances means all policies and contracts of insurance (which expression includes all entries of the Ship in a protection and indemnity or war risks association) which are from time to time during the Security Period in place or taken out or entered into by or for the benefit of the Owner (whether in the sole name of the Owner, or in the joint names of the Owner and the Mortgagee (as security agent and trustee on behalf of the Combined Creditors) or otherwise) in respect of the Ship and her Earnings or otherwise howsoever in connection with the Ship and all benefits thereof (including claims of whatsoever nature and return of premiums).

 

Intercreditor Agent means the intercreditor agent from time to time under the Restructuring Agreement.

 

6

 

ISM Code means the International Management Code for the Safe Operation of Ships and for Pollution Prevention constituted pursuant to Resolution A. 741(18) of the International Maritime Organisation and incorporated into the Safety of Life at Sea Convention and includes any amendments or extensions thereto and any regulation issued pursuant thereto.

 

ISPS Code means the International Ship and Port Facility Security Code constituted pursuant to Resolution A 942(22) of the International Maritime Organisation and incorporated into the Safety of Life at Sea Convention and includes any amendments or extensions thereto and any regulation issued pursuant thereto.

 

ISSC means an International Ship Security Certificate issued in respect of the Ship under the provisions of the ISPS Code.

 

Lenders mean the banks and financial institutions listed in Part 1 of Schedule 1 and includes their respective successors in title, Assignees and Substitutes.

 

Loan means the aggregate principal amount owing to the Lenders under this Agreement at any relevant time.

 

Loss Payable Clauses means the provisions regulating the manner of payment of sums receivable under the Insurances which are to be incorporated in the relevant insurance documents, such provisions to be in the forms set out in Schedule 1 to the General Assignment, or in such other forms as may from time to time be required or agreed in writing by the Security Trustee (acting on the instructions of the Combined Creditors).

 

Majority Lenders means:

 

(a)                        prior to the first Drawdown Date, that Lender or those Lenders whose Commitment or the aggregate of whose Commitments (as the case may be) is equal to or greater than 662/3 per cent of the Total Commitments; and

 

(b)                       following the first Drawdown Date that Lender or those Lenders whose Contribution or the aggregate of whose Contributions (as the case may be) is at any time equal to or greater than 662/3 per cent of the Loan.

 

Management Agreement means an agreement executed or (as the context may require) to be executed between the Owner and the Manager in a form previously approved in writing by the Facility Agent  (acting on the instructions of the Lenders)  or any other agreement previously approved in writing by the Facility Agent (acting on the instructions of the Lenders) between the Owner and the Manager providing (inter alia) for the Manager to manage the Ship and Management Agreements means all of them.

 

Manager means Danaos Shipping Company Limited of 14 Akti Kondyli 118545 Piraeus, Greece in its capacity as the commercial and technical manager of the Ship or any other person appointed by the Owner, with the prior written consent of the Facility Agent (acting on the instructions of the Lenders), as the manager of the Ship and includes its successors in title and assignees.

 

Manager’s Undertaking means an undertaking executed or (as the context may require) to be executed by the Manager in favour of the Security Trustee (as security agent and trustee on behalf of the Combined Creditors), such undertaking to be in a form and substance acceptable to the Security Trustee (acting on the instructions of the Combined Creditors).

 

Material Adverse Effect means, in the reasonable opinion of the Majority Lenders, a material adverse effect on:

 

(a)                        the business, operations, property, condition (financial or otherwise) or prospects of the Company or the Owner;

 

(b)                       the ability of the Company or the Owner to perform its obligations under the Finance Documents or the Restructuring Documents;

 

7

 

(c)                        the validity or enforceability of, or the effectiveness or ranking of any Security granted or purporting to be granted pursuant to any of, the Finance Documents or the rights or remedies of any Creditor under any of the Finance Documents; or

 

(d)                       the Ship or another Vessel.

 

Mortgage means the first preferred Liberian mortgage of the Ship executed or (as the context may require) to be executed by the Owner in favour of the Security Trustee (as security agent and trustee on behalf of the Combined Creditors) in a form and substance acceptable to the Security Trustee (acting on the instructions of the Combined Creditors).

 

Mortgaged Ship means, at any relevant time, the Ship which is at such time subject to the Mortgage and/or whose Earnings, Insurances (as defined in the Mortgage and/or General Assignment) and Requisition Compensation are subject to a Security pursuant to the relevant Finance Documents and the Ship shall, for the purposes of this Agreement, be deemed to be a Mortgaged Ship as from the date that the Mortgage of the Ship shall have been executed and registered in accordance with this Agreement until whichever shall be the earlier of (a) the payment in full of the amount required to be paid to the Combined Creditors and, where applicable, the Cash Cover required to be provided pursuant to clauses 4.7, 4.8 and 4.9 following the sale or Total Loss of such Ship and (b) the date on which all moneys owing under the Finance Documents have been repaid in full.

 

Notice of Assignment of Insurances means a notice of assignment in the form set out in Schedule 2 to the General Assignment or in such other form as may from time to time be required or agreed in writing by the Security Trustee (acting on the instructions of the Combined Creditors).

 

Operator means any person who is from time to time during the Security Period concerned in the operation of the Ship and falls within the definition of Company set out in rule 1.1.2 of the ISM Code.

 

Owner means Megacarrier (No.5) Corp., a company incorporated in the Republic of Liberia and whose registered office is at 80 Broad Street, Monrovia, Republic of Liberia.

 

Owner’s Guarantee means the guarantee issued or (as the context may require) to be issued by the Owner in favour of the Security Trustee (as security agent and trustee on behalf of the Combined Creditors) in a form and substance acceptable to the Security Trustee (acting on the instructions of the Combined Creditors), as (inter alia) security for all moneys and the discharge of all liabilities due, owing or incurred by the Company under or pursuant to the Finance Documents to which the Company is or is to be a party and the Existing Finance Documents to which the Company is or is to be a party.

 

Owner Share Pledge means the pledge of all of the issued shares of the Owner executed or (as the context may require) to be executed by the Shareholder in favour of the Security Trustee (as security agent and trustee on behalf of the Combined Creditors) in a form and substance acceptable to the Security Trustee (acting on the instructions of the Combined Creditors).

 

Party means a party to this Agreement.

 

Pollutant means and includes oil and its products, any other polluting, toxic or hazardous substance whose release into the environment is regulated or penalised by Environmental Laws.

 

Pre-delivery Security Assignment means an assignment of the Contract and Refund Guarantee executed or (as the context may require) to be executed by the Owner in favour of the Security Trustee (as security agent and trustee on behalf of the Combined Creditors) in a form and substance acceptable to the Security Trustee (acting on the instructions of the Combined Creditors).

 

Protocol of Delivery and Acceptance means, in relation to the Ship, the protocol of delivery and acceptance to be signed by or on behalf of the Builder and the Owner evidencing the

 

8

 

delivery and acceptance of the Ship pursuant to the Contract, such protocol to be in a form and substance satisfactory to the Facility Agent.

 

Refund Guarantee means refund guarantee no. M16FBO710XD00018 dated 2 October 2007 issued by the Refund Guarantor in favour of the Owner in respect of the Builder’s obligations under the Contract and any further guarantee(s) to be issued by the Refund Guarantor in respect of such obligations and any extensions, variations, amendments, renewals or replacements thereto or thereof.

 

Refund Guarantee Assignment Consent and Acknowledgement means in relation to the Ship, the acknowledgement of notice, and consent to, the assignment in respect of the Refund Guarantee to be given by the Refund Guarantor, in the form scheduled to the Pre-delivery Security Assignment or otherwise in a form and substance acceptable to the Security Trustee (acting on the instructions of the Combined Creditors).

 

Refund Guarantor means Shinhan Bank of 1st floor, Hyundai B/D 140-2, Gye-Dong, Jongro-Gu, Seoul, Korea.

 

Registry means the offices of the Deputy Commissioner for Maritime Affairs of the Republic of Liberia in New York.

 

Requisition Compensation means all sums of money or other compensation from time to time payable during the Security Period by reason of the Compulsory Acquisition of the Ship.

 

Restructuring Agreement means the agreement of even date herewith made between, among others, the Company, certain subsidiaries of the Company, the Intercreditor Agent, certain existing finance parties and certain financial institutions.

 

Security Party means the Company, the Owner, the Shareholder, the Refund Guarantor, the Builder, the Charterer and the Manager or any other person who may at any time be a party to any of the Finance Documents (other than the Security Trustee and the other Combined Creditors) and Security Parties means all of them.

 

Security Period means the period commencing on the date of this Agreement and terminating upon discharge of the security created by the Finance Documents by payment of all money payable thereunder.

 

Security Trustee means Citibank, N.A., London Branch of 14th Floor, Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB or such other person as may be appointed security agent and trustee for the Combined Creditors pursuant to the Agency Agreement and includes its successors and assigns.

 

Shareholder means Bayard Maritime Limited, a company incorporated in the Republic of Liberia and whose registered office is at 80 Broad Street, Monrovia, Republic of Liberia.

 

Ship means the 12,600 TEU class container vessel currently under construction or (as the context may require) to be constructed by the Builder pursuant to the Contract, which is to be identified during construction as Hull No. S460 and to be registered at Delivery in the ownership of the Owner through the Registry under the laws and flag of the Flag State.

 

SMC means a safety management certificate issued in respect of the Ship in accordance with rule 13 of the ISM Code.

 

Spill means any actual or threatened emission, spill, release or discharge of a Pollutant into the environment.

 

Subsidiary of a person means any company or entity directly or indirectly controlled by such person, and for this purpose control means either the ownership of more than fifty per cent (50%) of the voting share capital (or equivalent rights of ownership) of such company or entity or the power to direct its policies and management, whether by contract or otherwise.

 

Substitute has the meaning ascribed thereto in clause 16.4.

 

9

 

Substitution Certificate means a certificate substantially in the form of Schedule 4 (or in such other form as the Facility Agent shall approve or require).

 

SWIFT message means a message sent through the secure financial messaging system established by the Society for Worldwide Interbank Financial Telecommunication.

 

Termination Date means 23 January 2013 or such other date as may be agreed in writing between the Company and the Facility Agent (acting on the instructions of the Lenders).

 

Total Commitments means the aggregate of the Commitments, being eighty million Dollars (US$80,000,000) at the date of this Agreement.

 

Total Loss means in relation to the Ship:

 

(a)                        actual, constructive, compromised or arranged total loss of the Ship; or

 

(b)                       the Compulsory Acquisition of the Ship; or

 

(c)                        the hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of the Ship (other than where the same amounts to the Compulsory Acquisition of such Ship) by any Government Entity, or by persons acting or purporting to act on behalf of any Government Entity, unless the Ship be released and restored to the Owner from such hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation within thirty (30) days after the occurrence thereof.

 

Underlying Documents means collectively the Contract, the Charter, the Refund Guarantee, the Management Agreement and the Vendor Finance Documents (other than the Vendor Finance Intercreditor Agreement) and Underlying Document means any of them.

 

Vendor Finance Intercreditor Agreement means the intercreditor agreement made or (as the context may require) to be made between, amongst others, the Owner, Hyundai and the Security Trustee (as security agent and trustee for the Combined Creditors) in relation to the ranking and priority of the liabilities of certain of the Security Parties under the Finance Documents and the Vendor Finance Documents (and of any related Security created or expressed to be created in favour of Hyundai) in relation to the Ship.

 

Headings

 

1.4                      Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.

 

Construction of certain terms

 

1.5                      Unless a contrary indication appears, any reference in this Agreement to:

 

(a)                        any Lender, any Existing Hedge Counterparty, the Account Bank, any Creditor, the Facility Agent, the Security Trustee, any Combined Creditor, the Company, any Group Company, or any Party shall be construed so as to include its successors in title, permitted assigns and permitted transferees and, in the case of the Facility Agent or the Security Trustee any person for the time being appointed as facility agent or security trustee in accordance with the Finance Documents;

 

(b)                       a document in agreed form is a document which is previously agreed in writing by or on behalf of the Company and the Security Trustee (acting on the instructions of the Combined Creditors) or, if not so agreed, is in the form specified by the Facility Agent (acting on the instructions of the Lenders) or in the form actually executed by both the relevant Security Party or relevant Security Parties and the Security Trustee and/or the other Combined Creditors;

 

(c)                        assets includes present and future properties, revenues and rights of every description;

 

10

 

(d)                       a Finance Document or an Underlying Document or a Restructuring Document or any other agreement or instrument is a reference to that Finance Document or that Underlying Document or that Restructuring Document or other agreement or instrument as amended, novated, supplemented, extended or restated by this Agreement or otherwise and, in relation to the Restructuring Documents only, at any time after the Restructuring Termination Date and, until such time as the Finance Documents shall have been amended in accordance with clause 9.1(gg), the Restructuring Agreement in force immediately prior to the Restructuring Termination Date;

 

(e)                        guarantee means any guarantee, letter of credit, bond, indemnity or similar assurance against loss, or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to make an investment in or loan to any person or to purchase assets of any person where, in each case, such obligation is assumed in order to maintain or assist the ability of such person to meet its indebtedness;

 

(f)                          indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

 

(g)                       a person includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);

 

(h)                       a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

 

(i)                           including, include or includes shall be construed without limitation;

 

(j)                           a reference to Security under shall be construed as Security created or expressed or purported to be created pursuant to the document to which such expression refers;

 

(k)                        words importing the plural shall include the singular and vice versa;

 

(l)                           a provision of law is a reference to that provision as amended or re-enacted;

 

(m)                     a time of day is a reference to London time; and

 

(n)                       a reference to any party acting in good faith shall, in the case of the Creditors and any Party acting in the capacity as a trustee by reason of their administrative role only be deemed not to be satisfied if such party acts contrary to specific and binding instructions received from, in the case of each such party, the party or parties entitled to give such instructions.

 

1.6                      Section, clause and Schedule headings are for ease of reference only.

 

1.7                      A Default or an Event of Default is continuing if it has not been remedied or waived.

 

Insurance terms

 

1.8                      In clause 9.1(d):

 

(a)                        excess risks means the proportion (if any) of claims for general average, salvage and salvage charges and under the ordinary collision clause not recoverable in consequence of the value at which a vessel is assessed for the purpose of such claims exceeding her insured value;

 

(b)                       protection and indemnity risks means the usual risks (including oil pollution and freight, demurrage and defence cover) covered by a protection and indemnity association which is a member of the International Group of Protection and Indemnity Clubs (including the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the

 

11

 

incorporation in such policies of clause 8 of the Institute Time Clauses (Hulls) (1/11/95) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision); and

 

(c)                        war risks includes those risks covered by the standard form of English marine policy with Institute War and Strikes Clauses Hulls - Time (1/11/95) attached or similar cover.

 

Third party rights

 

1.9                      Unless expressly provided to the contrary in a Finance Document a person who is not a Party has no right under the Third Parties Act to enforce or enjoy the benefit of any term of this Agreement.

 

1.10                Notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.

 

Effectiveness of Majority Lenders decision

 

1.11                Where this Agreement provides for any matter to be determined by reference to the opinion of the Majority Lenders or to be subject to the consent or request of the Majority Lenders or for any action to be taken on the instructions of the Majority Lenders, such opinion, consent, request or instructions shall (as between the Lenders) only be regarded as having been validly given or issued by the Majority Lenders if all the Lenders shall have received prior notice of the matter on which such opinion, consent, request or instructions are required to be obtained and a majority of the Lenders shall have given or issued such opinion, consent, request or instructions.

 

2                              The Total Commitments and the Loan

 

Agreement to lend

 

2.1                      The Lenders, relying upon each of the representations and warranties in clause 8 and the representations and warranties contained in the Restructuring Agreement, agree to pay to the Builder and, in the case of the Delivery Advance, the Builder and the Company the Contract Instalment Advance and the Delivery Date Advance, in each case by way of loan to the Company, upon and subject to the terms of this Agreement.  The obligation of each Lender under this Agreement shall be to contribute that portion of the Loan which its Commitment bears to the Total Commitments.

 

Increase

 

2.2

 

(a)                        The Company may, by giving prior notice to the Facility Agent by no later than the date falling 5 Business Days after the effective date of a cancellation of the available, undrawn portion of the Commitment of a Facility Defaulting Lender in accordance with clause 4.13, request that the Total Commitments be increased (and the Total Commitments shall be so increased) in an aggregate amount of up to the amount of the available undrawn portion of the Commitment so cancelled as follows:

 

(i)                          the increased Commitment will be assumed by one or more Lenders or other banks, financial institutions, trusts, funds or other entities (each an Increase Lender) selected by the Company (each of which shall not be a member of the Group and which is further acceptable to the Facility Agent (acting reasonably) and each of which confirms its willingness to assume and does assume all the obligations of a Lender corresponding to that part of the increased Commitments which it is to assume, as if it had been a Lender, but it being agreed and acknowledged that no Lender which is not a Facility Defaulting Lender shall be obliged to accept a request to assume any increased Commitment in accordance with the provisions of this clause 2.2);

 

(ii)                       each of the Security Parties and any Increase Lender shall assume obligations towards one another and/or acquire rights against one another as the Security

 

12

 

Parties and the Increase Lender would have assumed and/or acquired had the Increase Lender been a Lender;

 

(iii)                    each Increase Lender shall become a Party as a “Lender” and any Increase Lender and each of the other Creditors shall assume obligations towards one another and acquire rights against one another as that Increase Lender and those Creditors would have assumed and/or acquired had the Increase Lender been a Lender;

 

(iv)                   the Commitments of the Lenders (other than the relevant Facility Defaulting Lender) shall continue in full force and effect; and

 

(v)                      any increase in the Total Commitments shall take effect on the date specified by the Company in the notice referred to above or any later date on which the conditions set out in paragraph (b) below are satisfied.

 

(b)                       An increase in the Total Commitments will only be effective on:

 

(i)                          the execution by the Facility Agent of an Increase Confirmation from the relevant Increase Lender;

 

(ii)                       in relation to an Increase Lender which is not a Lender immediately prior to the relevant increase:

 

(A)                    the performance by the Facility Agent of all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender, the completion of which the Facility Agent shall promptly notify to the Company and the Increase Lender; and

 

(B)                      the Increase Lender acceding to (1) the Restructuring Agreement as a Participating Lender in accordance with its terms and (2) the Agency Agreement as a Lender in accordance with its terms.

 

(c)                        Each Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt) that the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the increase becomes effective.

 

(d)                       Unless the Facility Agent otherwise agrees or the increased Commitment is assumed by an Existing Lender, the Company shall, on the date upon which the increase takes effect, pay to the Facility Agent (for its own account) a fee of $2,000 and the Company shall promptly on demand pay the Facility Agent the amount of all costs and expenses (including legal fees) reasonably incurred by it in connection with any increase in Commitments under this clause 2.2.

 

(e)                        The Company may pay to the Increase Lender a fee in the amount and at the times agreed between the Company and the Increase Lender in a letter between the Company and the Increase Lender setting out that fee.  A reference in this Agreement to a Fee Letter shall include any letter referred to in this paragraph.

 

(f)                          Unless expressly agreed to the contrary, the Lenders make no representation or warranty and assume no responsibility to an Increase Lender for:

 

(i)                          the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;

 

(ii)                       the financial condition of any Security Party;

 

(iii)                    the performance and observance by any Security Party of its obligations under the Finance Documents or any other documents; or

 

13

 

(iv)                   the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,

 

and any representations or warranties implied by law are excluded.

 

(g)                       Each Increase Lender confirms to the Lenders and the other Creditors that it:

 

(i)                          has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of the Company and each other Security Party and their respective related entities in connection with its participation of this Agreement and had not relied exclusively on any information provided to it by any of the Combined Creditors in connection with any Finance Documents; and

 

(ii)                       will continue to make its own independent appraisal of the creditworthiness of the Company and each other Security Party and their respective related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.

 

(h)                       Nothing in any Finance Document obliges a Lender to:

 

(i)                          accept a transfer or assignment from an Increase Lender of any of the rights and obligations assigned or transferred under this clause 2.2; or

 

(ii)                       support any losses directly or indirectly incurred by an Increase Lender by reason of the non-performance by any Security Party of its obligations under the Finance Documents or otherwise.

 

Obligations several

 

2.3                      The obligations of each Creditor under the Finance Documents are several.  Failure by a Creditor to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents.  No Creditor is responsible for the obligations of any other Creditor under the Finance Documents.

 

Interests several

 

2.4                      Notwithstanding any other term of this Agreement the interests of the Creditor are several and the amount due to the Facility Agent or the Security Trustee (for its own account) and to each other Creditor is a separate and independent debt.  The Facility Agent, the Security Trustee and each other Creditor shall have the right to protect and enforce their respective rights arising out of this Agreement and it shall not be necessary for the Facility Agent, the Security Trustee or any other Creditor (as the case may be) to be joined as an additional party in any proceedings for this purpose.

 

Drawdown

 

2.5                      Subject to the terms and conditions of this Agreement, each Advance shall be made following receipt by the Facility Agent from the Company of a Drawdown Notice not later than 10 a.m. on the third Business Day before the Drawdown Date relative to such Advance, which shall be a Business Day falling within the Drawdown Period, on which such Advance is intended to be made. A Drawdown Notice shall be effective on actual receipt by the Facility Agent and, once given, shall, subject to the provisions relating to market disruption contained in the Restructuring Agreement, be irrevocable.

 

2.6                      The amount of each Advance shall, subject to the following provisions of this clause 2, be for such amount as is specified in the Drawdown Notice for that Advance provided that the Lenders shall under no circumstances be required to make the Loan or any part thereof available if the making of the Loan or such part would result in:

 

14

 

(a)                        the aggregate of the Advances exceeding the lesser of (a) Eighty million US Dollars (US$80,000,000) and (b) forty eight per cent (48%) of the Contract Price of the Ship at Delivery; or

 

(b)                       the Loan having more than two (2) Advances and/or any Advance being for an amount less than five million US Dollars (US$5,000,000)).

 

2.7                      The Contract Instalment Advance shall be in the maximum amount of sixteen million US Dollars (US$16,000,000) and applied in or towards financing the keel-laying instalment of the Contract Price and may be made on any Business Day falling within the Drawdown Period subject to the keel-laying instalment of the Contract Price having become due and payable by the Owner under the Contract.

 

2.8                      The Delivery Date Advance shall be in the maximum amount of sixty four million US Dollars (US$64,000,000) and applied in or towards:

 

(a)                        in an amount of fifty eight million one hundred and twenty seven thousand US Dollars (US$58,127,000), in financing the delivery instalment of the Contract Price; and

 

(b)                       in an amount of up to five million eight hundred and seventy three thousand US Dollars (US$5,873,000) in reimbursement to the Company, in part, of previous payments of the Contract Price made by the Company,

 

and may be made on any Business Day falling within the Drawdown Period up to and upon the Delivery Date subject to the delivery instalment of the Contract Price having become due and payable by the Owner under the Contract.

 

Availability

 

2.9                      Upon receipt of a Drawdown Notice complying with the terms of this Agreement the Facility Agent shall notify each Lender thereof of the Drawdown Date and, subject to the provisions of clause 10, on the date specified in the Drawdown Notice, each Lender shall make available to the Company its portion of the relevant Advance in accordance with clause 6.1 and clause 6.2.  The Company acknowledges that payment of the Contract Instalment Advance or part of the Delivery Date Advance to the Builder in accordance with clause 6.1 and clause 6.2 shall satisfy the obligation of the Lenders to lend the Contract Instalment Advance or that portion of the Delivery Date Advance to the Company under this Agreement.

 

Termination of Total Commitments

 

2.10                Any part of the Total Commitments undrawn at the end of the relevant Drawdown Period shall thereupon be automatically cancelled.

 

Application of proceeds

 

2.11                Without prejudice to the Company’s obligations under clause 9.1(b), the Lenders shall have no responsibility for the application of proceeds of the Loan (or any part thereof) by the Company.

 

3                              Interest and Interest Periods

 

Calculation of interest

 

3.1                      The rate of interest on each Advance and/or, as the case may be, the Loan for each Interest Period shall be determined by the Facility Agent and calculated in accordance with the provisions set out in the Restructuring Agreement.

 

Payment of interest

 

3.2                      The Company shall pay accrued interest on each Advance and/or, as the case may be, the Loan on the last day of each Interest Period in accordance with the provisions of the Restructuring Agreement.

 

15

 

Default interest

 

3.3                      If the Company fails to pay any amount payable by it under a Finance Document, the provisions relating to default interest set out in the Restructuring Agreement shall apply.

 

Notification of rates of interest

 

3.4                      The Facility Agent shall promptly notify the Lenders and the Company of the determination of a rate of interest under the Restructuring Agreement.

 

Interest Periods

 

3.5                      Interest Periods and other provisions relating to interest shall be as determined in accordance with the Restructuring Agreement.

 

4                              Repayment, prepayment and cancellation

 

Repayment

 

4.1                      Without prejudice to clause 4.2, the Company shall repay amounts outstanding under this Agreement in the manner set out in the Restructuring Agreement.

 

4.2                      On the Final Repayment Date (without prejudice to any other provision of this Agreement or the Restructuring Agreement), the Loan shall be repaid in full.

 

Voluntary cancellation

 

4.3                      The Company may, if it gives the Facility Agent not less than 15 Business Days’ (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount of five hundred thousand US Dollars (US$500,000)) of the Loan which is undrawn at the proposed date of cancellation. Upon any such cancellation the Total Commitments shall be reduced by the same amount.

 

Mandatory Cancellation

 

4.4                      Where clause 24.2 of the Restructuring Agreement applies, if the Loan is not fully drawn at the time such clause applies, any undrawn amount (or such relevant part thereof) shall be cancelled in accordance with clause 24.2 of the Restructuring Agreement.  Upon any such cancellation the Total Commitments shall be reduced by the same amount.

 

Voluntary prepayment

 

4.5                      The Company may voluntarily prepay the Loan in the manner set out in the Restructuring Agreement.

 

4.6                      Every notice of prepayment shall be effective only on actual receipt by the Facility Agent, shall be irrevocable, shall specify the amount to be prepaid and shall oblige the Company to make such prepayment on the date specified.

 

Mandatory prepayment on Total Loss

 

4.7                      On the Mortgaged Ship becoming a Total Loss or suffering damage or being involved in an incident which in the opinion of the Lenders may result in the Mortgaged Ship being subsequently determined to be a Total Loss, the obligation of the Lenders to make the Loan shall immediately cease.

 

4.8                      The Company shall, following a Total Loss of the Mortgaged Ship, comply with the provisions of clauses 18.4 and 18.5 of the Restructuring Agreement.

 

For the purpose of this Agreement, a Total Loss shall be deemed to have occurred:

 

16

 

(a)                        in the case of an actual total loss of the Mortgaged Ship on the actual date and at the time the Mortgaged Ship was lost or, if such date is not known, on the date on which the Mortgaged Ship was last reported;

 

(b)                       in the case of a constructive total loss of the Mortgaged Ship, upon the date and at the time notice of abandonment of the Mortgaged Ship is given to the insurers of the Mortgaged Ship for the time being (provided a claim for total loss is admitted by such insurers) or, if such insurers do not forthwith admit such a claim, at the date and at the time at which either a total loss is subsequently admitted by the insurers or a total loss is subsequently adjudged by a competent court of law or arbitration tribunal to have occurred;

 

(c)                        in the case of a compromised or arranged total loss, on the date upon which a binding agreement as to such compromised or arranged total loss has been entered into by the insurers of the Mortgaged Ship;

 

(d)                       in the case of Compulsory Acquisition, on the date upon which the relevant requisition of title or other compulsory acquisition occurs; and

 

(e)                        in the case of hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of the Mortgaged Ship (other than where the same amounts to Compulsory Acquisition of the Mortgaged Ship) by any Government Entity, or by persons purporting to act on behalf of any Government Entity, which deprives the Owner of the use of the Mortgaged Ship for more than thirty (30) days, upon the expiry of the period of thirty (30) days after the date upon which the relevant hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation occurred.

 

Mandatory prepayment on sale

 

4.9                      Upon the date on which a sale of the Mortgaged Ship by the Owner is completed by the transfer of title to the purchaser in exchange for payment of all or part of the relevant purchase price the Company shall prepay the Loan and shall otherwise comply with the provisions of clauses 18.5, 23.11 and 23.12 of the Restructuring Agreement.

 

Mandatory pre-delivery cancellation and prepayment

 

4.10                If, prior to the Ship’s Delivery:

 

(a)                        the Owner or the Builder rescinds or purports to rescind or repudiates or purports to repudiate the Contract or evidences an intention to rescind, repudiate, cancel or terminate the Contract; or

 

(b)                       any of the matters contained in clause 25.13 (Insolvency) to clause 25.18 (Creditors process) of the Restructuring Agreement shall occur in relation to the Builder; or

 

(c)                        any of the events or circumstances specified in paragraph 1 of article XI of the Contract occurs and the Builder has not irrevocably and unconditionally waived such default;

 

(d)                       the relevant Contract is for any reason and by any method suspended, cancelled, terminated or rescinded or otherwise ceases to remain in full force and effect; or

 

(e)                        a competent court or arbitration panel decides that the Contract has been validly cancelled, terminated or rescinded or that it ceases to have full force and effect; or

 

(f)       the Contract is amended or varied in a way prohibited by any Finance Document; or

 

(g)                       the Refund Guarantee is repudiated, cancelled, rescinded or otherwise terminated or is not or ceases to be legal, valid, binding and enforceable obligations of the relevant Refund Guarantor or it is or becomes unlawful for the Refund Guarantor to perform its obligations under it and the Refund Guarantee is not immediately replaced or reinstated or reconfirmed in a form and manner and by a person in each case approved in advance by the Lenders; or

 

17

 

(h)                       Delivery of the Ship has not occurred by the Termination Date,

 

then the Facility Agent may, and shall if so directed by the Majority Lenders, by notice to the Company with effect from the date 10 Business Days after the giving of such notice (or such later date as may be approved in advance by the Majority Lenders) cancel the Commitment (whereupon the Total Commitments shall be reduced by such Commitment).  The Company shall on the date such cancellation takes effect prepay the Loan.

 

Charter

 

4.11                If

 

(a)                        the Charter is for any reason and by any method cancelled, terminated or rescinded or is not or ceases to be legal, valid, binding and enforceable or otherwise ceases to remain in full force and effect; or

 

(b)                       a competent court or arbitration panel decides that the Charter has been validly cancelled, terminated or rescinded or has ceased to be legal, valid, binding and enforceable or otherwise has ceased to have full force and effect;

 

then on the date falling sixty (60) days after first occurrence of any event described in clause 4.11(a) or (b) above the Commitment shall be cancelled (whereupon the Total Commitments shall be reduced by such Commitment) and the Company shall on the date such cancellation takes effect prepay the Loan.  Provided always that the Commitment shall not be cancelled and the Company shall not be obliged to prepay the Loan if a replacement charterer or charterers acceptable to the Lenders enters into a time charter on substantially the same terms as the Charter or on such other terms as may be acceptable to the Lenders with the Owner within the said sixty (60) days referred to above.

 

Other prepayments

 

4.12                The Loan shall also be prepaid and, where applicable, the Total Commitments reduced, in accordance with certain other applicable provisions of the Restructuring Agreement.

 

Right of replacement or repayment and cancellation in relation to a Facility Defaulting Lender

 

4.13

 

(a)                        If any Lender becomes a Facility Defaulting Lender, the Company may, at any time whilst the Lender continues to be a Facility Defaulting Lender, give the Facility Agent 5 Business Days’ notice of cancellation of each available, unused Commitment of that Lender.

 

(b)                       On the notice referred to in paragraph (a) becoming effective, each available, unused Commitment of the Facility Defaulting Lender shall immediately be reduced to zero.

 

(c)                        The Facility Agent shall, as soon as practicable after receipt of a notice referred to in paragraph (a) above, notify all Lenders.

 

Amounts payable on prepayment

 

4.14                Any prepayment of all or part of the Loan under this Agreement shall be made together with:

 

(a)                        accrued interest on the amount to be prepaid to the date of such prepayment;

 

(b)                       any Break Costs;

 

(c)                        any additional amount payable under clauses 7 or 13.1; and

 

(d)                       all others sums payable by the Company to the Security Trustee and/or the other Creditors under this Agreement or any of the other Finance Documents including any

 

18

 

accrued commitment commission payable under clause 5 and any amounts payable under clause 12.

 

5                              Commitment commission, fees and expenses

 

Commitment commission

 

5.1                      The Company shall pay to the Facility Agent (for the account of each Lender) a fee in US Dollars computed at the rate of zero point seven five per cent (0.75%) per annum on the undrawn portion of that Lender’s Commitment calculated from the date of this Agreement (the start date).

 

5.2                      The Company shall pay the accrued commitment commission on the last day of the period of three months commencing on the start date, on the last day of each successive period of three months, on the Termination Date and, if cancelled in full, on the cancelled amount of the relevant Lender’s Commitment at the time the cancellation is effective.

 

5.3                      No commitment commission is payable to the Facility Agent (for the account of a Lender) on any undrawn portion of that Lender’s Commitment for any day on which that Lender is a Facility Defaulting Lender.

 

Agency fee

 

5.4                      The Company shall pay to the Facility Agent (for its own account) an agency fee in the amount and at the times agreed in the Fee Letter.

 

Security Trustee fee

 

5.5                      The Company shall pay to the Security Agent (for its own account) a security agency fee in the amount and at the times agreed in the Fee Letter.

 

The commitment commission referred to in clause 5.1 and the fees referred to in clauses 5.4 and 5.5 shall be payable by the Company whether or not any part of the Total Commitments is ever advanced.

 

Transaction expenses

 

5.6                      Subject to the provisions of clause 14.1 of the Restructuring Agreement or save as otherwise agreed in writing by the Company prior to the date of this Agreement, the Company shall promptly on demand pay the Facility Agent and the other Creditors the amount of all costs and expenses (which shall include legal fees) reasonably incurred by any of them in connection with:

 

(a)                        the negotiation, preparation, printing, execution and perfection of this Agreement and any other Finance Documents; and

 

(b)                       any other Finance Document executed after the date of this Agreement.

 

Amendment costs

 

5.7                      If:

 

(a)                        the Company requests an amendment, waiver or consent; or

 

(b)                       an amendment is required pursuant to clause 6.18 and clause 6.19 (Change of currency),

 

the Company shall, within three Business Days of demand, reimburse the Facility Agent and the other Creditors for the amount of all costs and expenses (which shall include legal fees) incurred by them in responding to, evaluating, negotiating or complying with that request or requirement.

 

19

 

Enforcement and preservation costs

 

5.8                      The Company shall, within three Business Days of demand, pay to the Security Trustee and the other Creditors the amount of all costs and expenses (which shall include legal fees) incurred by them in connection with the enforcement of or the preservation of any rights under any Finance Document and any proceedings instituted by or against the Security Trustee as a consequence of taking or holding the Security under the Finance Documents or enforcing these rights.

 

Other transaction costs

 

5.9                      In the event of:

 

(a)                        a Default; or

 

(b)                       the Security Trustee and/or the Facility Agent being requested by a Group Company or the Majority Lenders to undertake duties which the Security Trustee and the Company agree to be of an exceptional nature and/or outside the scope of the normal duties of the Security Trustee under the Finance Documents,

 

the Company shall pay to:

 

(i)                          the Security Trustee any additional remuneration that may be agreed between them in respect of the Security Trustee’s ongoing costs; and

 

(ii)                       the Facility Agent any additional remuneration that may be agreed between them in respect of the Facility Agent’s management time.

 

5.10                If the Security Trustee and/or the Facility Agent (as relevant) fail to agree with the Company upon the nature of the duties or upon any additional remuneration, that dispute shall be determined by arbitration in London in accordance with the rules of the London Maritime Arbitrators Association and shall be final and binding upon the parties to this Agreement.

 

Stamp taxes

 

5.11                The Company shall pay and, within three Business Days of demand, indemnify each Creditor against any cost, loss or liability that Creditor incurs in relation to all stamp duty, documentary, registration and other similar Taxes payable in respect of any Finance Document.

 

VAT

 

5.12                All amounts set out or expressed in a Finance Document to be payable by any Party to a Creditor which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, and accordingly, subject to clause 5.13 below, if VAT is or becomes chargeable on any supply made by any Creditor to any Party under a Finance Document, that Party shall pay to the Creditor (in addition to and at the same time as paying any other  consideration for such supply) an amount equal to the amount of such VAT (and such Creditor shall promptly provide an appropriate VAT invoice to such Party).

 

5.13                If VAT is or becomes chargeable on any supply made by any Creditor (the Supplier) to any other Creditor (the Recipient) under a Finance Document, and any Party other than the Recipient (the Subject Party) is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration), such Party shall also pay to the Supplier (in addition to and at the same time as paying such amount) an amount equal to the amount of such VAT.  The Recipient will promptly pay to the Subject Party an amount equal to any credit or repayment obtained by the Recipient from the relevant tax authority which the Recipient reasonably determines is in respect of such VAT.

 

20

 

6                              Payments; accounts and calculations

 

Payments to the Facility Agent

 

6.1                      On each date on which the Company or a Lender is required to make a payment under a Finance Document, the Company or Lender shall make the same available to the Facility Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Facility Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

 

6.2                      Payment shall be made to such account in the principal financial centre of the country of that currency (or, in relation to euro, in a principal financial centre in a Participating Member State or London) with such bank as the Facility Agent specifies.

 

Distributions by the Facility Agent

 

6.3                      Each payment received by the Facility Agent under the Finance Documents for another Party shall, subject to clause 6.4 (Distributions to the Company) and clauses 6.5 and 6.6 (Clawback), be made available by the Facility Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Facility Agent by not less than five Business Days’ written notice with a bank in the principal financial centre of the country of that currency (or, in relation to euro, in the principal financial centre of a Participating Member State or London).

 

Distributions to the Company

 

6.4                      The Facility Agent may (with the consent of the Company or in accordance with clauses 6.5 and 6.6 (Clawback)) apply any amount received by it for the Company in or towards payment (on the date and in the currency and funds of receipt) of any amount due from the Company under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.

 

Clawback

 

6.5                      Where a sum is to be paid to the Facility Agent under the Finance Documents for another Party, the Facility Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

 

6.6                      If the Facility Agent pays an amount to another Party and it proves to be the case that the Facility Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Facility Agent shall on demand refund the same to the Facility Agent together with interest on that amount from the date of payment to the date of receipt by the Facility Agent, calculated by the Facility Agent to reflect its cost of funds and shall further indemnify the Facility Agent on demand for any and all other loss or expense which the Facility Agent may sustain or incur as a consequence of the Facility Agent not actually having received that amount.

 

Impaired Agent

 

6.7                      If, at any time, the Facility Agent becomes an Impaired Agent, the Company or a Lender which is required to make a payment under the Finance Documents to the Facility Agent in accordance with clauses 6.1 and 6.2 (Payments to the Facility Agent) may instead either pay that amount direct to the required recipient or pay that amount to an interest-bearing account held with an Acceptable Bank within the meaning of paragraph (a) of the definition of Acceptable Bank (as defined in the Restructuring Agreement) and in relation to which no Insolvency Event has occurred and is continuing, in the name of the Company or the Lender making the payment and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents. In each case such payments must be made on the due date for payment under the Finance Documents.

 

21

 

6.8                      All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the beneficiaries of that trust account pro rata to their respective entitlements.

 

6.9                      A Party which has made a payment in accordance with clause 6.7 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account.

 

6.10                Promptly upon the appointment of a successor Facility Agent in accordance with the provisions of the Agency Agreement, each Party which has made a payment to a trust account in accordance with clause 6.7 shall give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Facility Agent for distribution in accordance with clause 6.3 (Distributions by the Facility Agent).

 

Partial payments

 

6.11                If the Facility Agent receives a payment for application against amounts due in respect of any Finance Documents that is insufficient to discharge all the amounts then the provisions of clause 14.1 (Application of moneys) shall apply.

 

Set-off by Company

 

6.12                All payments to be made by the Company under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.

 

Business Days

 

6.13                Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).

 

6.14                During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

 

Currency of account

 

6.15                Subject to clauses 6.16 and 6.17 below, US Dollars is the currency of account and payment for any sum due under any Finance Document.

 

6.16                Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

 

6.17                Any amount expressed to be payable in a currency other than US Dollars shall be paid in that other currency.

 

Change of currency

 

6.18                Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:

 

(a)                        any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Facility Agent (after consultation with the Company); and

 

(b)                       any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Facility Agent (acting reasonably).

 

6.19                If a change in any currency of a country occurs, this Agreement will, to the extent the Facility Agent (acting reasonably and after consultation with the Parent) specifies to be necessary, be

 

22

 

amended to comply with any generally accepted conventions and market practice in the London interbank market and otherwise to reflect the change in currency.

 

Loan account

 

6.20                Each Lender shall maintain, in accordance with its usual practice, an account evidencing the amounts from time to time lent by, owing to and paid to it under the Finance Documents.  The Facility Agent shall maintain a control account showing the Loan and other sums owing by the Company under the Finance Documents and all payments in respect thereof made by the Company from time to time.  The control account shall, in the absence of manifest error, be conclusive as to the amount from time to time owing by the Company under the Finance Documents.

 

Accounts

 

6.21                In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Creditor are prima facie evidence of the matters to which they relate.

 

Certificates and determinations

 

6.22                Any certification or determination by a Creditor of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.

 

Day count convention

 

6.23                Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the London interbank market differs, in accordance with that market practice.

 

7                              Tax Gross up

 

Definitions

 

7.1                      In this clause:

 

Protected Party means a Creditor which is or will be subject to any liability or required to make any payment for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.

 

Tax Deduction means a deduction or withholding for or on account of Tax from a payment under a Finance Document.

 

Unless a contrary indication appears, in this clause 7 a reference to determines or determined means a determination made in the absolute discretion of the person making the determination.

 

Tax gross-up

 

7.2                      The Company shall make all payments to be made by it under, and in connection with, the Finance Documents, without any Tax Deduction, unless a Tax Deduction is required by law.

 

7.3                      The Company shall promptly upon becoming aware that it must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Facility Agent accordingly.  Similarly, a Lender shall notify the Facility Agent on becoming so aware in respect of a payment payable to that Lender.  If the Facility Agent receives such notification from a Lender it shall notify the Company.

 

7.4                      If a Tax Deduction is required by law to be made by the Company, the amount of the payment due from the Company shall be increased to an amount which (after making any Tax

 

23

 

Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.

 

7.5                      If the Company is required to make a Tax Deduction, the Company shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

 

7.6                      Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Group Company making that Tax Deduction shall deliver to the Facility Agent for the Creditor entitled to the payment evidence reasonably satisfactory to that Creditor that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

 

Tax indemnity

 

7.7                      The Company shall (within three Business Days of demand by the Facility Agent or another Creditor) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.

 

7.8                      Clause 7.7 above shall not apply:

 

(a)                        with respect to any Tax assessed on a Creditor:

 

(i)                          under the law of the jurisdiction in which that Creditor is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Creditor is treated as resident for tax purposes; or

 

(ii)                       under the law of the jurisdiction in which that Creditor’s Facility Office is located in respect of amounts received or receivable in that jurisdiction,

 

if that Tax is imposed on or calculated by reference to the net overall income received or receivable (but not any sum deemed to be received or receivable) of that Creditor; or

 

(b)                       to the extent a loss, liability or cost is compensated for by an increased payment under clauses 7.2 to 7.6 (Tax gross-up).

 

7.9                      A Protected Party making, or intending to make a claim under clause 7.7 above shall promptly notify the Facility Agent of the event which will give, or has given, rise to the claim, following which the Facility Agent shall notify the Company.

 

7.10                A Protected Party shall, on receiving a payment from a Group Company under clause 7.7, notify the Facility Agent.

 

8                              Representations and warranties

 

Restructuring Agreement representations and warranties

 

8.1                      The Company makes the representations and warranties set out in the Restructuring Agreement to each Creditor on the terms set out in the Restructuring Agreement and at the times set out in the Restructuring Agreement.

 

No money laundering

 

8.2                      The Company represents and warrants to each Creditor that, in relation to the borrowing by it of the Loan, the performance and discharge of its obligations and liabilities under the Finance Documents to which it is or is to be a party and the transactions and other arrangements effected or contemplated respectively thereby (a) it is acting for its own account and (b) that the foregoing will not involve or lead to a contravention of any law, official requirement or other regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1 of Directive 2005/60/EC of the European Parliament and of the Council) and/or Art. 305 bis of the Swiss Penal Code.

 

24

 

Initial representations and warranties

 

8.3                      The Company makes the further representations and warranties set out in this clause 8.3 to each Creditor.

 

(a)                        No Default under Contract or Refund Guarantee

 

the Owner is not in default of any of its obligations under the Contract or any of its obligations upon the performance or observance of which depend the continued liability of the Refund Guarantor in accordance with the terms of the Refund Guarantee;

 

(b)                       No Security in respect of pre-delivery security

 

the Owner has not previously charged, encumbered or assigned the benefit of any of its rights, title and interest in or to the Contract or the Refund Guarantee and such benefit and all such rights, title and interest are freely assignable and chargeable in the manner contemplated by the Finance Documents;

 

(c)                        the Ship

 

the Ship will on the Delivery Date be:

 

(i)                          in the absolute ownership of the Owner who will on and after the Delivery Date be the sole, legal and beneficial owner of the Ship;

 

(ii)                       registered in the name of the Owner under the laws and flag of the Flag State through the Registry;

 

(iii)                    operationally seaworthy and in every way fit for service; and

 

(iv)                   classed with the Classification free of all requirements and recommendations of the Classification Society;

 

(d)                       Ship’s employment

 

save for the Charter, the Ship will not on or before the Delivery Date be subject to any charter or contract or to any agreement to enter into any charter or contract which, if entered into after the date of the Mortgage would have required the consent of the Security Trustee (acting on the instructions of the Lenders) and on the Delivery Date there will not be any agreement or arrangement whereby the Earnings may be shared with any other person;

 

(e)                        Freedom from Security

 

neither the Ship, nor her Earnings, Insurances or Requisition Compensation (each as defined in the General Assignment) nor the Earnings Account nor the Charter nor any other properties or rights which are, or are to be, the subject of any of the Finance Documents nor any part thereof will at any time during the Security Period, be subject to any Security other than as permitted under the Restructuring Agreement;

 

(f)                          Environmental matters

 

to the best of the knowledge and belief of the Company and its officers:

 

(i)                          all Environmental Laws applicable to any Fleet Vessel have been complied with and all consents, licences and approvals required under such Environmental Laws have been obtained and complied with; and

 

(ii)                       no Environmental Claim has been made or threatened or is pending against any member of the Group or any Fleet Vessel and not fully satisfied; and

 

(iii)                    there has been no Environmental Incident; and

 

25

 

(g)                       Copies true and complete

 

the copies of each of the Underlying Documents delivered or to be delivered to the Lenders pursuant to clause 10 are, or will when delivered be, true and complete copies of such documents and each of such documents will when delivered constitutes valid and binding obligations of the parties thereto enforceable in accordance with its terms and there have been no amendments or variations thereof or defaults thereunder.

 

Repetition of representations and warranties

 

8.4                      On and as of the date of each Advance and (except in relation to the representations and warranties in clause 8.3) on the last day of each Interest Period the Company shall be deemed to repeat the representations and warranties in clauses 8.1 to 8.3 as if made with reference to the facts and circumstances existing on such day.

 

9                              Undertakings

 

General

 

9.1                      The Company undertakes with the Creditors that, from the date of this Agreement and so long as any moneys are owing under any of the Finance Documents and while all or any part of the Total Commitments remains outstanding, it will:

 

(a)                        Notice of Default

 

(i)                          promptly inform the Facility Agent and each of the other Creditors of any occurrence of which it becomes aware which might adversely affect the ability of any Security Party to perform its obligations under any of the Finance Documents or the Underlying Documents and, without limiting the generality of the foregoing, will inform the Facility Agent and each of the other Creditors of any event or circumstance giving rise to a prepayment event of the type set out in, or an entitlement on the Facility Agent to serve a notice of prepayment under, clauses 4.7, 4.8, 4.9, 4.10 and 4.11 and of any Default forthwith upon becoming aware thereof and will from time to time, if so requested by the Facility Agent or any Creditor, confirm to the Facility Agent and each of the Creditors in writing that, save as otherwise stated in such confirmation, no Default has occurred and is continuing; and

 

(ii)                       promptly inform the Facility Agent and each of the other Creditors of any occurrence of which it becomes aware which might adversely affect the ability or rights of the Owner to make any claims under the Contract or the Refund Guarantee or which might reduce or release any of the obligations of the Builder under the Contract or the Refund Guarantor under such Refund Guarantee;

 

(b)                       Use of proceeds

 

use the Loan for its own benefit and exclusively for the purpose specified in clause 1.1;

 

(c)                        Obligations under Finance Documents and Underlying Documents

 

duly and punctually perform and procure that each Security Party (other than the Builder, the Refund Guarantor and the Charterer) and each Group Company performs, and complies with, each of the obligations expressed to be assumed by it under the Finance Documents (including the Restructuring Documents and including the undertakings contained in clauses 22, 23 and 24 of the Restructuring Agreement) and the Underlying Documents;

 

26

 

(d)                       Insurance

 

(i)                          Insured risks, amounts and terms

 

procure that the Owner insures and keeps the Ship insured free of cost and expense to the Security Trustee and in the sole name of the Owner or, if so required by the Security Trustee, in the joint names of the Owner and the Security Trustee (as security agent and trustee on behalf of the Combined Creditors) (but without liability on the part of the Security Trustee for premiums or calls):

 

(A)                    against fire and usual marine risks (including excess risks) and war risks (including war protection and indemnity risks with a separate limit not less than the hull value and including also terrorism and piracy to the extent not covered under the hull and machinery policy), on full conditions and on an agreed value basis, in such amounts (but not in any event less than whichever shall be the greater of:

 

(1)                        the Market Value of the Ship for the time being;

 

(2)                        such amount as is at least equal to one hundred and twenty per cent (120%) of the Loan; and

 

(3)                        for as long as the Vendor Finance Documents are in place, 125% of the Contract Price,

 

and upon such terms as shall from time to time be approved in writing by the Security Trustee;

 

(B)                      against protection and indemnity risks (including but not limited to (i) war risk protection and indemnity risks in excess of the basic war protection and indemnity cover and (ii) pollution risks for the highest amount in respect of which cover is or may become available for ships of the same type, size, age and flag as the Ship) for the full value and tonnage of the Ship (as approved in writing by the Security Trustee) and upon such terms as shall from time to time be approved in writing by the Security Trustee;

 

(C)                      if and when so requested by the Security Trustee, against loss of earnings in such amounts and upon such terms as shall from time to time be approved in writing by the Security Trustee;

 

(D)                     if and when so requested by the Security Trustee, against political risks on such terms and in such amounts as shall from time to time be approved in writing by the Security Trustee; and

 

(E)                       in respect of such other matters of whatsoever nature and howsoever arising in respect of which insurance would be maintained by a prudent owner of the Ship;

 

and to procure that the Owner pays to the Security Trustee (as security agent and trustee on behalf of the Combined Creditors) the cost (as conclusively certified by the Security Trustee) of (aa) any mortgagee’s interest insurance (including mortgagee’s interest insurance - additional perils (pollution) coverage) which the Security Trustee may from time to time effect in respect of the Ship upon such terms and in such amounts not exceeding one hundred and twenty per cent (120%) (but being not less than one hundred and ten per cent (110%)) of the aggregate of (i) the Loan and (ii) any other sum as may be mutually agreed upon between the Owner and the Security Trustee, as it shall deem desirable and (bb) any other insurance cover which the Security Trustee may from time to time effect in respect of the Ship and/or in respect of its interest or potential third party liability as mortgagee of the Ship as the Security Trustee shall deem desirable having regard to any limitations in respect of amount or extent of cover which may from

 

27

 

time to time be applicable to any of the other insurances referred to in this clause 9.1(d)(i);

 

(ii)                       Approved brokers, insurers and associations

 

procure that the Owner effects and keeps effected the insurances aforesaid in such currency as the Security Trustee may approve and through the Approved Brokers (other than the said mortgagee’s interest insurance (including mortgagee’s interest insurance - additional perils (pollution) coverage) which shall be effected through brokers nominated by the Security Trustee) and with such insurance companies and/or underwriters as shall from time to time be approved in writing by the Security Trustee; provided however that the insurances against war risks and protection and indemnity risks may be effected by the entry of the Ship with such war risks and protection and indemnity associations as shall from time to time be approved in writing by the Security Trustee;

 

(iii)                    Fleet liens, set-off and cancellation

 

if any of the insurances referred to in clause 9.1(d)(i) form part of a fleet cover, procure that the Owner procures that the Approved Brokers shall undertake to the Security Trustee (as security agent and trustee on behalf of the Combined Creditors) that they shall neither set off against any claims in respect of the Ship any premiums due in respect of other vessels under such fleet cover or any premiums due for other insurances, nor cancel the insurance for reason of non-payment of premiums for other vessels under such fleet cover or of premiums for such other insurances, and shall undertake to issue a separate policy in respect of the Ship if and when so requested by the Security Trustee;

 

(iv)                   Payment of premiums and calls

 

procure that the Owner punctually pays all premiums, calls, contributions or other sums payable in respect of all such insurances and produces all relevant receipts or other evidence of payment when so required by the Security Trustee;

 

(v)                      Renewal

 

procure that the Owner, at least 21 days before the relevant policies, contracts or entries expire, notifies the Security Trustee of the names of the brokers and/or the war risks and protection and indemnity associations proposed to be employed by the Owner or any other party for the purposes of the renewal of such insurances and of the amounts in which such insurances are proposed to be renewed and the risks to be covered and, subject to compliance with any requirements of the Security Trustee pursuant to this clause 9.1(d), procure that the Owner procures that appropriate instructions for the renewal of such Insurances on the terms so specified are given to the Approved Brokers and/or to the approved war risks and protection and indemnity associations at least 14 days before the relevant policies, contracts or entries expire, and that the Approved Brokers and/or the approved war risks and protection and indemnity associations will at least 7 days before such expiry (or within such shorter period as the Security Trustee may from time to time agree) and procure that the Owner confirms in writing to the Security Trustee as and when such renewals have been effected in accordance with the instructions so given;

 

(vi)                   Guarantees

 

procure that the Owner arranges for the execution and delivery of such guarantees or indemnities as may from time to time be required by any protection and indemnity or war risks association;

 

28

 

(vii)                Hull policy documents, notices, loss payable clauses and brokers’ undertakings

 

procure that the Owner deposits with the Approved Brokers (or procures the deposit of) all slips, cover notes, policies, certificates of entry or other instruments of insurance from time to time issued in connection with such of the insurances referred to in clause 9.1(d)(i) as are effected through the Approved Brokers and to further procure that the Owner procures that the interest of the Security Trustee (as security agent and trustee on behalf of the Combined Creditors) be endorsed thereon by incorporation of the relevant Loss Payable Clause and, where the Insurances have been assigned to the Security Trustee (as security agent and trustee on behalf of the Combined Creditors), by means of a Notice of Assignment of Insurances (signed by the Owner and by any other assured who shall have assigned its interest in the Insurances to the Security Trustee (as security agent and trustee on behalf of the Combined Creditors)) and that the Security Trustee be furnished with pro forma copies thereof and a letter or letters of undertaking from the Approved Brokers in such form as shall from time to time be required by the Security Trustee;

 

(viii)             Associations’ loss payable clauses, undertakings and certificates

 

procure that the Owner procures that any protection and indemnity and/or war risks associations in which the Ship is for the time being entered endorses the relevant Loss Payable Clause on the relevant certificate of entry or policy and furnishes the Security Trustee with a copy of such certificate of entry or policy and a letter or letters of undertaking in such form as may from time to time be required by the Security Trustee (as security agent and trustee on behalf of the Combined Creditors) and, where required to be issued under the terms of insurance/indemnity provided by the protection and indemnity association in which the Ship is for the time being entered, a certified copy of each United States of America voyage quarterly declaration (or other similar document or documents) made by the Owner in relation to the Ship in accordance with the requirements of such association;

 

(ix)                     Extent of cover and exclusions

 

procure that the Owner takes all necessary action and complies with all requirements which may from time to time be applicable to the Insurances (including the making of all requisite declarations within any prescribed time limits and the payment of any additional premiums or calls) so as to ensure that the Insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior written consent and to procure that the Owner procures that they are otherwise maintained on terms and conditions from time to time approved in writing by the Security Trustee;

 

(x)                        Correspondence with brokers and associations

 

procure that the Owner provides to the Security Trustee, at the time of each such communication, copies of all written communications between the Owner and the Approved Brokers and approved war risks and protection and indemnity associations which relate to (i) compliance with requirements from time to time applicable to the Insurances including all requisite declarations and payments of additional premiums or calls referred to in clause 9.1(d)(i)(ix) and (ii) any credit arrangements made between the Owner and the Approved Brokers and approved war risks and protection and indemnity associations relating wholly or partly to the effecting or maintenance of the Insurances;

 

(xi)                     Independent report

 

if so requested by the Security Trustee, but at the cost of the Company and the Owner, procure that the Owner furnishes the Security Trustee on the date of the Mortgage, annually thereafter, and from time to time with a detailed report signed by an independent firm of marine insurance brokers appointed by the Security

 

29

 

Trustee dealing with the insurances maintained on the Ship and stating the opinion of such firm as to the adequacy thereof and compliance with the provisions of this clause 9.1(d);

 

(xii)                  Collection of claims

 

procure that the Owner does all things necessary and provides all documents, evidence and information to enable the Security Trustee (as security agent and trustee on behalf of the Combined Creditors) to collect or recover any moneys which shall at any time become due in respect of the Insurances;

 

(xiii)               Employment of Ship

 

procure that the Owner does not employ the Ship or suffer the Ship to be employed otherwise than in conformity with the terms of the Insurances (including any warranties express or implied therein) without first obtaining the consent of the insurers to such employment and complying with such requirements as to extra premium or otherwise as the insurers may prescribe;

 

(xiv)              Application of recoveries

 

procure that the Owner applies all sums receivable under the Insurances which are paid to the Owner in accordance with the Loss Payable Clauses in repairing all damage and/or in discharging the liability in respect of which such sums shall have been received; and

 

(xv)                 Co-assured

 

procure that any person other than the Company or the Owner who is named as an assured or co-assured in the Insurances of the Ship immediately enters into an assignment in respect of its interests in the Insurances in favour of the Security Trustee on such terms and in such form as the Security Trustee (acting on the instructions of the Lenders) may require.

 

It is acknowledged and agreed that any rights, discretions, consents or approvals exercisable or to be given by the Security Trustee pursuant to this sub clause 9.1(d) shall be exercised or given by the Security Trustee acting on the instructions of the Majority Lenders.

 

(e)                        Ship’s name and registration

 

procure that the Owner does not change the name of the Ship and keeps the Ship registered as a Liberian ship and further procures that procure that the Owner does not do or does not suffer anything to be done, or does not omit to do anything the doing or omission of which could or might result in such registration being forfeited or imperilled or which could or might result in the Ship being required to be registered under any other flag than the Liberian flag and procure that the Owner does not register the Ship or permits its registration under any other flag without the prior written consent of the Security Trustee (acting on the instructions of the Lenders);

 

(f)                          Repair

 

procure that the Owner keeps the Ship in a good and efficient state of repair consistent with first-class ship ownership and management practice and to further procure that the Owner procures that all repairs to or replacement of any damaged, worn or lost parts or equipment are effected in such manner (both as regards workmanship and quality of materials) as not to diminish the value of the Ship;

 

(g)                       Modification; removal of parts; equipment owned by third parties

 

procure that the Owner does not without the prior written consent of the Security Trustee to or suffer any other person to:

 

30

 

(i)                          make any modification to the Ship in consequence of which her structure, type or performance characteristics could or might be materially altered or her value materially reduced; or

 

(ii)                       remove any material part of the Ship or any equipment the value of which is such that its removal from the Ship would materially reduce the value of the Ship without replacing the same with equivalent parts or equipment which are owned by the Owner free from Security save for it being subject to the security constituted by the Mortgage; or

 

(iii)                    install on the Ship any equipment owned by a third party which cannot be removed without causing damage to the structure or fabric of the Ship;

 

(h)                       Maintenance of class; compliance with regulations

 

procure that the Owner maintains the Classification as the class of the Ship free of all overdue recommendations, requirements and conditions affecting class and complies with and ensures that the Ship at all times complies with the provisions of all laws, regulations and requirements (statutory or otherwise) from time to time applicable to vessels registered under the laws and flag of the Republic of Liberia or otherwise applicable to the Ship, its ownership, management, operation or to the business of the Owner;

 

(i)                           Surveys

 

procure that the Owner submits the Ship to continuous surveys and such periodical or other surveys as may be required for classification purposes and if so required procure that the Owner supplies to the Security Trustee copies of all survey reports issued in respect thereof;

 

(j)                           Inspection

 

procure that the Owner ensures that the Security Trustee and any of the other Combined Creditors, by surveyors or other persons appointed by it or them for such purpose, may board the Ship (at the cost of the Owner and at the risk of the Owner save for where it is shown to have been directly and mainly caused by the gross negligence of or wilful misconduct of such surveyor or other person) at all reasonable times for the purpose of inspecting her and to procure that the Owner affords all proper facilities for such inspections and for this purpose procure that the Owner gives the Security Trustee reasonable advance notice of any intended drydocking of the Ship (whether for the purpose of classification, survey or otherwise) provided that such boarding and inspection does not materially disrupt the Ship’s reasonable operation, repairs or maintenance;

 

(k)                        No liens; prevention of and release from arrest

 

procure that the Owner promptly pays and discharges all debts, damages, liabilities and outgoings whatsoever which have given or may give rise to maritime, statutory or possessory liens on, or claims enforceable against, the Ship, her Earnings or Insurances or any part thereof and, in the event of a writ or libel being filed against the Ship, her Earnings or Insurances or any part thereof, or of any of the same being arrested, attached or levied upon pursuant to legal process or purported legal process or in the event of detention of the Ship in exercise or purported exercise of any such lien or claim as aforesaid, to procure that the Owner procures the immediate release of the Ship, her Earnings and Insurances from such arrest, detention, attachment or levy or, as the case may be, the discharge of the writ or libel forthwith upon receiving notice thereof by providing bail or procuring the provision of security or otherwise as the circumstances may require;

 

(l)                           Employment

 

procure that the Owner does not employ the Ship or permit her employment in any manner, trade or business which is forbidden by Liberian law or international law, or

 

31

 

which is otherwise unlawful or illicit under the law of any relevant jurisdiction, or in carrying illicit or prohibited goods, or in any manner whatsoever which may render her liable to condemnation in a prize court, or to destruction, seizure, confiscation, penalty or sanctions or otherwise contrary to the provisions of the Restructuring Agreement and, in the event of hostilities in any part of the world (whether war be declared or not) and to procure that the Owner does not employ the Ship or permit her employment in carrying any contraband goods, or to enter or trade to or to continue to trade in any zone which has been declared a war zone by any Government Entity or by the Ship’s war risks insurers unless the prior written consent of the war risks insurers is obtained and such special insurance cover as the war risks insurers may require shall have been effected by the Owner and at its expense;

 

(m)                     Information

 

procure that the Owner promptly furnishes to the Security Trustee all such information as the Security Trustee may from time to time require regarding the Ship, her Earnings and Insurances, her employment, position and engagements, any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ship and any payments made in respect of the Ship, particulars of all towages and salvages, and copies of all charters and other contracts for her employment and of any charter guarantees or otherwise howsoever concerning her;

 

(n)                       Notification of certain events

 

procure that the Owner notifies the Security Trustee forthwith by fax thereafter confirmed by letter of:

 

(i)                          any damage to the Ship requiring repairs the cost of which will or might exceed the Casualty Amount;

 

(ii)                       any occurrence in consequence of which the Ship has or may become a Total Loss;

 

(iii)                    any requisition of the Ship for hire;

 

(iv)                   any requirement, condition or recommendation made by any insurer or the Classification Society or by any competent authority which is not, or cannot be, complied with in accordance with its terms;

 

(v)                      any arrest or detention of the Ship or any exercise or purported exercise of a lien or other claim on the Ship or the Earnings or Insurances or any part thereof;

 

(vi)                   any intended drydocking of the Ship which the Owner knows or reasonably determines will or may exceed (or has exceeded) 20 days in total;

 

(vii)                any petition or notice of meeting to consider any resolution to wind-up the Owner (or any event analogous thereto under the laws of the place of its incorporation);

 

(viii)             any claim for breach of the ISM Code or the ISPS Code being made against the Owner or otherwise in connection with the Ship and, to the extent that the Owner is aware of such claim, any such claim being made against any Operator;

 

(ix)                     any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with; or

 

(x)                        the occurrence of any Default,

 

and procure that the Owner advises the Security Trustee in writing, on a regular basis and in such detail as the Security Trustee shall require, of the Owner’s or any other person’s response to any of the foregoing events;

 

32

 

(o)                       Payment of outgoings and evidence of payments

 

procure that the Owner promptly pays all taxes, tolls, dues and other outgoings whatsoever in respect of the Ship and her Earnings and Insurances and to keep proper books of account in respect of the Ship and her Earnings and, as and when the Security Trustee may so require, procure that the Owner makes such books available for inspection on behalf of the Security Trustee, and furnishes satisfactory evidence that the wages and allotments and the insurance and pension contributions of the Master and crew are being promptly and regularly paid and that all deductions from crew’s wages in respect of any tax liability are being properly accounted for and that the Master has no claim for disbursements other than those incurred by him in the ordinary course of trading on the voyage then in progress;

 

(p)                       Security

 

procure that the Owner does not without the prior written consent of the Security Trustee (acting on the instructions of the Combined Creditors) (and then only subject to such conditions as the Security Trustee may impose (acting on the instructions of the Combined Creditors)) create or purport or agree to create or permit to arise or subsist any Security (other than as permitted by the Restructuring Agreement) over or in respect of the Ship, any share or interest therein or in the Insurances, Earnings or Requisition Compensation or any part thereof or interest therein other than to or in favour of the Security Trustee;

 

(q)                       Sale or other disposal

 

procure that the Owner does not without the prior written consent of the Security Trustee (acting on the instructions of the Combined Creditors) (and then only subject to such terms as the Security Trustee may impose (acting on the instructions of the Combined Creditors)) sell, agree to sell, transfer, abandon or otherwise dispose of the Ship or any share or interest therein;

 

(r)                          Chartering

 

procure that the Owner does not except pursuant to the Charter, without the prior written consent of the Security Trustee (acting on the instructions of the Lenders) (which the Security Trustee shall have full liberty to withhold) and, if such consent is given, only subject to such conditions as the Security Trustee (acting on the instructions of the Lenders) may impose, to let the Ship:

 

(i)                          on demise charter for any period;

 

(ii)                       by any time or consecutive voyage charter for a term which exceeds or which by virtue of any optional extensions therein contained might exceed twelve months’ duration;

 

(iii)                    on terms whereby more than two months’ hire (or the equivalent) is payable in advance; or

 

(iv)                   below the market rate prevailing at the time when the Ship is fixed or other than on arms’ length terms;

 

(s)                        Sharing of Earnings

 

procure that the Owner does not without the prior written consent of the Security Trustee (and then only subject to such conditions as the Security Trustee may impose) (acting on the instructions of the Combined Creditors) to enter into any agreement or arrangement:

 

(i)                          whereby the Earnings may be shared with any other person;

 

(ii)                       for the postponement of any date on which any Earnings are due;

 

33

 

(iii)                    for the reduction of the amount of Earnings or otherwise for the release or adverse alteration of any right of the Owner to any Earnings; or

 

(iv)                   for the release of, or adverse alteration to, any guarantee or Security relating to any Earnings;

 

(t)                          Payment of Earnings

 

procure that the Owner procures that the Earnings are paid to the Earnings Account at all times pursuant to the provisions of clause 7.1 of the Owner Guarantee and to procure that the same are paid to the Security Trustee (as security agent and trustee on behalf of the Combined Creditors) at all times if and when the same shall be or shall have become so payable in accordance with the Finance Documents and to procure that that any Earnings which are so payable and which are in the hands of the Owner’s brokers or agents are duly accounted for and paid over to the Security Trustee (as security agent and trustee on behalf of the Combined Creditors) forthwith on demand;

 

(u)                       Repairers’ liens

 

procure that the Owner does not without the prior written consent of the Security Trustee (as security agent and trustee on behalf of the Combined Creditors) put the Ship into the possession of any person for the purpose of work being done upon her in an amount exceeding or likely to exceed the Casualty Amount unless such person shall first have given to the Security Trustee (as security agent and trustee on behalf of the Combined Creditors) in terms satisfactory to it, a written undertaking not to exercise any lien on the Ship or her Earnings for the cost of such work or otherwise;

 

(v)                       Manager

 

procure that the Owner does not without the prior written consent of the Security Trustee (acting on the instructions of the Lenders) appoint a manager of the Ship other than the Manager or terminate or amend the terms of the Management Agreement;

 

(w)                     Registration of Mortgage and compliance with Liberian law

 

procure that the Owner causes the Mortgage to be recorded with the Deputy Commissioner for Maritime Affairs of the Republic of Liberia as prescribed by Chapter 3 of Title 21 of the Liberian Code of Laws of 1956 as amended and otherwise procure that the Owner complies with and satisfies all the requirements and formalities established by the said Liberian Code of Laws and any other pertinent legislation of the Republic of Liberia to perfect and maintain the Mortgage as a valid and enforceable first and preferred lien upon the Ship and furnishes to the Security Trustee from time to time such proofs as the Security Trustee may reasonably request for its satisfaction with respect to the Owner’s compliance with the provisions of this sub-clause;

 

(x)                         Notice of Mortgage

 

procure that the Owner places and, at all times and places, uses due diligence to retain a properly certified copy of the Mortgage (which shall form part of the Ship’s documents) on board the Ship with her papers and causes such certified copy of the Mortgage to be exhibited to any and all persons having business with the Ship which might create or imply any commitment or encumbrance whatsoever or in respect of the Ship (other than a lien for crew’s wages and salvage) and to any representative of the Security Trustee and to further procure that the Owner places and keeps prominently displayed in the chart room and in the Master’s cabin of the Ship a framed printed notice in plain type reading as follows:

 

“NOTICE OF MORTGAGE

 

This Vessel is covered by a First Preferred Mortgage to [here insert name of Security Trustee] of [here insert address of Security Trustee] (as security agent and trustee on behalf of itself and certain other creditors parties) under authority of Title 21 of the

 

34

 

Liberian Code of Laws of 1956 as amended.  Under the terms of the said Mortgage neither the Owner nor any charterer nor the Master of this Vessel nor any other person has any right, power or authority to create, incur or permit to be imposed upon this Vessel any lien whatsoever other than for crew’s wages and salvage”

 

and in terms of the said notice it is hereby agreed that save and subject as otherwise herein provided, neither the Owner nor any charterer nor the Master of the Ship nor any other person has any right, power or authority to create, incur or permit to be imposed upon the Ship any lien whatsoever other than for crew’s wages and salvage;

 

(y)                       Conveyance on default

 

procure that the Owner where the Ship is (or is to be) sold in exercise of any power contained in the Mortgage or otherwise conferred on the Security Trustee, to execute, forthwith upon request by the Security Trustee, such form of conveyance of the Ship as the Security Trustee may require;

 

(z)                         Anti-drug abuse

 

procure that the Owner, without prejudice to clause 9.1(k), takes all necessary and proper precautions to prevent any infringements of the Anti-Drug Abuse Act of 1986 of the United States of America or any similar legislation applicable to the Ship in any jurisdiction in or to which the Ship shall be employed or located or trade or which may otherwise be applicable to the Ship and/or the Owner and, if the Security Trustee shall so require, procure that the Owner enters into a “Carrier Initiative Agreement” with the United States Customs Service and procure that such agreement (or any similar agreement hereafter introduced by any Government Entity of the United States of America) is maintained in full force and effect and performed by the Owner;

 

(aa)                  Environmental matters

 

(i)                          Notice of claims and incidents:  procure that the Owner notifies the Security Trustee as soon as reasonably practicable by fax (thereafter confirmed by letter) of:

 

(A)                    the making of any Environmental Claim against any member of the Group or any Fleet Vessel; or

 

(B)                      the occurrence of any Environmental Incident which may give rise to any such Environmental Claims;

 

(ii)                       Compliance with Environmental Laws:  procure that the Owner procures compliance with all Environmental Laws applicable to all Fleet Vessels and the terms of all consents, licences and approvals obtained under such laws; and

 

(iii)                    Information:  procure that the Owner keeps the Security Trustee regularly and punctually informed in writing, and in reasonable detail, of the nature of, and response to, any such Environmental Incident and the defence to any such Environmental Claim;

 

(bb)                ISM Code

 

(i)                          Compliance with the ISM Code: procure that the Owner complies with and ensure that the Ship and any Operator at all times complies with the requirements of the ISM Code;

 

(ii)                       Withdrawal of DOC or SMC: procure that the Owner immediately informs the Security Trustee of any threatened or actual withdrawal of any Operator’s DOC or any SMC;

 

35

 

(iii)                    Issue of DOC or SMC: procure that the Owner promptly informs the Security Trustee of the issue of each DOC and each SMC or of the receipt by any Operator of notification that any application for the same has been refused; and

 

(iv)                   Copy documentation: procure that the Owner provides the Security Trustee promptly on request with a copy (certified as a true copy by the Owner) of each DOC and each SMC; and

 

(cc)                  ISPS Code

 

(i)                          Compliance with the ISPS Code: procure that the Owner complies with and ensure that the Ship and any Operator at all times comply with the requirements of the ISPS Code;

 

(ii)                       Withdrawal of ISSC: procure that the Owner immediately informs the Security Trustee of any threatened or actual withdrawal of the ISSC or any other certification required in order for the Owner, any Operator and/or the Ship to comply with the ISPS Code;

 

(iii)                    Issue of ISSC: procure that the Owner promptly informs the Security Trustee of the issue of the ISSC or of the receipt by any Operator of notification that any application for the same has been refused; and

 

(iv)                   Copy documentation: procure that the Owner provides the Security Trustee promptly on request with a copy (certified as a true copy by the Owner) of the ISSC;

 

(dd)                Lay up, dry-dockings and major repairs

 

procure that the Owner does not without the prior written consent of the Security Trustee (and then only subject to such conditions as the Security Trustee may impose) de-activate or lay up the Ship and gives the Security Trustee sufficient notice whenever practicable of dry-docking surveys and major repairs in order that the Security Trustee may have a representative (if desired);

 

(ee)                  Survey and safety reports

 

procure that the Owner delivers to the Security Trustee, at the request of the Security Trustee but at the cost of the Owner, at intervals not less than twelve months and, following an Event of Default, as often as the Security Trustee may require, a report prepared by surveyors or inspectors acceptable to the Security Trustee in relation to the seaworthiness and safe operation of the Ship and crew training and safety procedures in connection with the Ship and all cargo-handling operations and to procure that the Owner produces evidence to the Security Trustee that any recommendations made in such reports have been complied with, or will be complied with in accordance with their terms, in full and thereafter procure that the Owner procures that such recommendations are so complied with;

 

(ff)                      Classification

 

procure that the Owner irrevocably and unconditionally grants to the Security Trustee a power of attorney permitting the Security Trustee and representatives thereof to examine the class records of the Ship at any time and, without cost or expense to the Security Trustee, and to procure that the Owner irrevocably and unconditionally instructs and authorises the Classification Society of the Ship as follows, to procure that the Owner uses its best efforts to obtain from the Classification Society a written undertaking to the Security Trustee:

 

(i)                          to send to the Security Trustee, following receipt of a written request from the Security Trustee, certified true copies of all original class records held by the Classification Society relating to the Ship;

 

36

 

(ii)                       to allow the Security Trustee (or its agents), at any time and from time to time if an Event of Default (in the sole opinion of the Security Trustee) has occurred and is continuing, to inspect the original class and related records of the Owner and the Ship at the offices of the Classification Society and to take copies of them; and

 

(iii)                    following receipt of a written request from the Security Trustee:

 

(A)                    to advise of any facts or matters which may result in or have resulted in a change, suspension, discontinuance, withdrawal or expiry of the Ship’s class under the rules or terms and conditions of the Classification Society; and

 

(B)                      to confirm that the Owner is not in default of any of its contractual obligations or liabilities to the Classification Society and, without limiting the foregoing, that it has paid in full all fees or other charges due and payable to the Classification Society; and

 

(C)                      if the Owner is in default of any of its contractual obligations or liabilities to the Classification Society, to specify to the Security Trustee in reasonable detail the facts and circumstances of such default, the consequences thereof, and any remedy period agreed or allowed by the Classification Society; and

 

(D)                     to notify the Security Trustee immediately in writing if the Classification Society receives notification from the Owner or any other person that the Ship’s Classification Society is to be changed.

 

Notwithstanding the above instructions and undertaking given for the benefit of the Security Trustee, the Company shall procure that the Owner shall continue to be responsible to the Classification Society for the performance and discharge of all its obligations and liabilities relating to or arising out of or in connection with the contract it has with the Classification Society, and nothing herein or therein shall be construed as imposing any obligation or liability of the Security Trustee to the Classification Society in respect thereof.

 

The Company shall procure that the Owner further notifies the Classification Society that all the foregoing instructions and authorisations shall remain in full force and effect until revoked or modified by written notice to the Classification Society received from the Security Trustee, and further procures that that the Owner shall reimburse the Classification Society for all its costs and expenses incurred in complying with the foregoing instructions; and

 

(gg)                Restructuring Termination Date

 

will procure that any Security Party will, in the event that the Restructuring Termination Date occurs and amounts are still outstanding under the Finance Documents:

 

(i)                          assist the Creditors in effecting any amendments to the Finance Documents to incorporate all provisions contained in the Restructuring Documents which are not contained in the Finance Documents which are required by the Facility Agent and/or the other Creditors; and

 

(ii)                       procure the execution, signing, perfecting and doing by each of the other Security Parties of, any and every such further assurance, document, act or thing as in the reasonable opinion of the Facility Agent and/or the Creditors may be necessary or desirable in connection with the provisions of this clause 9.1(gg).

 

Negative undertaking

 

9.2               The Company undertakes with the Facility Agent and the other Combined Creditors that, from the date of this Agreement and so long as any moneys are owing under the Finance Documents

 

37

 

and while all or any part of the Total Commitments remains outstanding, it will not without the prior written consent of the Facility Agent incur any obligations except for obligations arising under the Underlying Documents or the Finance Documents or permitted by the Restructuring Agreement or contracts entered into in the ordinary course of its trading as at the date of this Agreement and will procure that no other Group Company will, without the prior written consent of the Lenders, incur any obligations other than in the ordinary course of its trading as at the date of this Agreement.

 

10                       Conditions precedent

 

Documents and evidence

 

10.1

 

(a)                        Drawdown Notice for First Advance

 

The obligation of the Lenders to make the Total Commitments available shall be subject to the condition that the Facility Agent, or its duly authorised representative, shall have received, not later than three (3) Business Days before the day on which the Drawdown Notice for the first Advance is given, the documents and evidence specified in Part 1 of Schedule 3 in form and substance (including as to all commercial terms) satisfactory to the Facility Agent or (as the case may be) the Lenders.

 

(b)                       Contract Instalment Advance

 

The obligation of the Lenders to make any Advance (including the first Advance) which is the Contract Instalment Advance shall be subject to the condition that the Facility Agent, or its duly authorised representative, shall have received, on or prior to the day on which that Advance is intended to be made, the documents and evidence specified in Part 2 of Schedule 3 in form and substance (including as to all commercial terms) satisfactory to the Facility Agent or (as the case may be) the Lenders.

 

(c)                        Delivery Date Advance

 

The obligation of the Lenders to make the Delivery Date Advance shall be subject to the further condition that the Facility Agent, or its duly authorised representative, shall have received on or prior to the Delivery Date, the documents and evidence specified in Part 3 of Schedule 3 in form and substance (including as to all commercial terms) satisfactory to the Facility Agent or (as the case may be) the Lenders.

 

General conditions precedent

 

10.2                The obligation of the Lenders to make any Advance shall be subject to the further conditions that, at the time of the giving of the Drawdown Notice in respect of the relevant Advance, and at the time of the making of the relevant Advance:

 

(a)                        the representations and warranties contained in (i) clause 8, and (ii) clause 5 of the Owner’s Guarantee and expressed to be made or repeated on the date of each Advance are true and correct on and as of each such time as if each was made with respect to the facts and circumstances existing at such time; and

 

(b)                       no Default shall have occurred and be continuing or would result from the making of such Advance.

 

Waiver of conditions precedent

 

10.3                The conditions specified in this clause 10 are inserted solely for the benefit of the Lenders and may be waived by the Lenders in whole or in part and with or without conditions.

 

38

 

Further conditions precedent

 

10.4                Not later than five (5) Business Days prior to each Drawdown Date and not later than five (5) Business Days prior to each Interest Payment Date, the Lenders may request and the Company shall, not later than two (2) Business Days prior to such date, deliver to the Lenders on such request further favourable certificates and/or opinions as to any or all of the matters which are the subject of clauses 8, 9, 10 and 11 and clauses 5 and 6 of the Owner’s Guarantee.

 

11                       Events of Default

 

Events of Default

 

11.1                Each of the events or circumstances set out in this clause 11 is an Event of Default (save for clause 11.21 and clause 11.22 (Acceleration)).

 

Non-payment

 

11.2                A Security Party does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless:

 

(a)                        its failure to pay is caused by:

 

(i)                          administrative or technical error; or

 

(ii)                       a Disruption Event; and

 

(b)                       payment is made within 3 Business Days of its due date.

 

Breach of insurance and other obligations

 

11.3                The Company or the Owner fails to obtain and/or maintain the Insurances (as defined in, and in accordance with the requirements of, the Finance Documents) or if any insurer in respect of such Insurances cancels the Insurances or disclaims liability by reason, in either case, of mis-statement in any proposal for the Insurances or for any other failure or default on the part of the Company or the Owner or any other person or the Company or the Owner commits any breach of or omits to observe any of the obligations or undertakings expressed to be assumed by it under clause 9.2 and clause 6.2 of the Owner Guarantee respectively.

 

Other obligations

 

11.4                Any Security Party commits any breach of or omits to observe any of its obligations or undertakings expressed to be assumed by it under any of the Finance Documents or any of the Underlying Documents (other than those referred to in clause 11.3 above) and, in respect of any such breach or omission which in the opinion of the Majority Lenders is capable of remedy, such action as the Majority Lenders may require shall not have been taken within 10 Business Days of the Majority Lenders notifying the relevant Security Party of such default and of such required action.

 

Misrepresentation

 

11.5                Any representation or warranty made or deemed to be made or repeated by or in respect of any Security Party in or pursuant to any of the Finance Documents or in any notice, certificate or statement referred to in or delivered under any of the Finance Documents or any of the Underlying Documents is or proves to have been incorrect or misleading when made or deemed to be made or repeated.

 

Unlawfulness and invalidity

 

11.6                It is or becomes unlawful for the Company or a Security Party to perform any of its obligations under the Finance Documents or any Security under the Finance Documents ceases to be effective or is or becomes unlawful.

 

39

 

11.7                Any obligation or obligations of the Company or a Security Party under any Finance Documents are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Combined Creditors under the Finance Documents.

 

11.8                Any Finance Document ceases to be in full force and effect or any Security under the Finance Documents ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to it (other than a Creditor) to be ineffective.

 

Repudiation and rescission of agreements

 

11.9                The Company or a Security Party (or any other relevant party) rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or any of the Security under the Finance Documents or evidences an intention to rescind or repudiate a Finance Document or any Security under the Finance Documents.

 

Arrest

 

11.10          The Ship is arrested, confiscated, seized, taken in execution, impounded, forfeited, detained in exercise or purported exercise of any possessory lien or other claim or otherwise taken from the possession of the Owner and the Owner shall fail to procure the release of such Ship within a period of fourteen (14) days thereafter.

 

Registration

 

11.11          The registration of the Ship under the laws and flag of the Flag State is cancelled or terminated without the prior written consent of the Facility Agent (acting on the instructions of the Lenders) or, if the Ship is only provisionally registered on the Delivery Date, the Ship is not permanently registered under the laws and flag of the Flag State within sixty (60) days after the Delivery Date.

 

Unrest

 

11.12          The Flag State becomes involved in hostilities or civil war or there is a seizure of power in the Flag State by unconstitutional means if, in any such case, such event could in the opinion of the Facility Agent reasonably be expected to have a material adverse effect on the Security under the Finance Documents (provided that the occurrence of such circumstances shall not give rise to an Event of Default if the Owner within ten (10) Business Days of such occurrence (or such longer period as may be agreed by the Facility Agent) changes the Flag State (with a substitute mortgage registered over the Ship and other appropriate security documents and amendments to the Finance Documents executed in favour of the Security Trustee (as security agent and trustee on behalf of the Combined Creditors) in a form and substance acceptable to the Combined Creditors (all at the cost of the Company) to a standard offshore maritime jurisdiction acceptable to the Facility Agent (acting on the instructions of the Lenders)).

 

Environmental Incidents

 

11.13          There is an Environmental Incident which gives rise, or may give rise, to an Environmental Claim which could, in the opinion of the Lenders and/or the Facility Agent be expected to have a material adverse effect (i) on the business, assets, operations, property or financial condition of any Security Party (other than the Charterer, the Builder and the Refund Guarantor) or the Group taken as a whole or (ii) on the Security under the Finance Documents or the enforceability of that security in accordance with its terms.

 

P&I

 

11.14          The Company, the Owner or any other person fails or omits to comply with any requirements of the protection and indemnity association or other insurer with which the Ship is entered for insurance or insured against protection and indemnity risks (including oil pollution risks) to the effect that any cover (including any cover in respect of liability for Environmental Claims arising in jurisdictions where the Ship operates or trades) is or may be liable to cancellation, qualification or exclusion at any time.

 

40

 

Breach of Charter

 

11.15          There is a breach by the Owner or the Charterer of the Charter unless, within sixty (60) days of the first occurrence of such breach either (a) such breach is remedied to the satisfaction of the Facility Agent, or (b) a replacement charterer or charterers acceptable to the Lenders enters into a time charter with the Owner on substantially the same terms as the Charter or on such other terms as may be acceptable to the Lenders.

 

Manager

 

11.16          (a) The Management Agreement is for any reason and by any method cancelled, terminated or rescinded or is not or ceases to be legal, valid, binding and enforceable or otherwise ceases to remain in full force and effect or (b) there is a breach by the Owner or the Manager of the Management Agreement or the Manager ceases to be the manager of the Ship.

 

Failure to drawdown Delivery Date Advance

 

11.17          The Company fails to drawdown the Delivery Date Advance without the prior written consent of the Facility Agent (acting on the instructions of the Lenders).

 

Existing Master Swap Agreements

 

11.18          (a) An Event of Default or Potential Event of Default (in each case as defined in the Existing Master Swap Agreements) has occurred and is continued under any Existing Master Swap Agreement or (b) an Early Termination Date (as defined in the Existing Master Swap Agreements) has occurred or been or become capable of being effectively designated under any Existing Master Swap Agreement or (c) a person entitled to do so gives notice of an Early Termination Date under Section 6(b)(iv) of any Existing Master Swap Agreement or (d) any Existing Master Swap Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason.

 

Material adverse change

 

11.19          Any event or circumstance occurs which the Majority Lenders believe has or is likely to have a Material Adverse Effect.

 

Restructuring Agreement

 

11.20          There is an Event of Default under, and as defined in, the Restructuring Agreement.

 

Acceleration

 

11.21          The Facility Agent may and, if so directed by the Majority Lenders, shall and without prejudice to any other rights of the Lenders, at any time after the happening of an Event of Default by notice to the Company declare that:

 

(a)                        the obligation of each Lender to make its Commitment available shall be terminated, whereupon the Commitment of each Lender shall be reduced to zero forthwith; and/or

 

(b)                       the Loan and all interest and commitment commission accrued and all other sums payable under the Finance Documents have become due and payable, whereupon the same shall, immediately or in accordance with the terms of such notice, become due and payable.

 

Demand basis

 

11.22          If, pursuant to clause 11.21, the Facility Agent declares the Loan to be due and payable on demand, the Facility Agent may (with the prior approval of the Majority Lenders) by written notice to the Company:

 

41

 

(a)                        call for repayment of the Loan on such date as may be specified whereupon the Loan shall become due and payable on the date so specified together with all interest and commitment commission accrued and all other sums payable under this Agreement; or

 

(b)                       withdraw such declaration with effect from the date specified in such notice.

 

12                       Indemnities

 

Miscellaneous indemnities

 

12.1                The Company shall, within three Business Days of demand, indemnify each Creditor, against any loss or expense which such Creditor shall certify as sustained or incurred by it as a consequence of:

 

(a)                        any default in payment by any Security Party of any sum under any of the Finance Documents when due;

 

(b)                       the occurrence of any other Event of Default; or

 

(c)                        any prepayment of the Loan or part thereof being made under clause 4, or any other repayment of the Loan or part thereof being made otherwise than on an Interest Payment Date relating to the part of the Loan prepaid or repaid; or

 

(d)                       any Advance not being made for any reason (excluding any default by the Facility Agent or any Lender) after the Drawdown Notice in relation thereto has been given,

 

including, in any such case, but not limited to, any loss or expense sustained or incurred by any Lender in maintaining or funding its Contribution or any part thereof or in liquidating or re-employing deposits from third parties acquired or contracted for to fund, effect or maintain its Contribution or any part thereof or any other amount owing to such Lender.

 

Environmental indemnity

 

12.2                The Company shall indemnify the Facility Agent and each of the other Creditors on demand and hold each such Creditor harmless from and against all costs, charges, claims, demands, expenses, losses, actions, proceedings (whether civil or criminal), liabilities, judgements, orders, sanctions, penalties and fines, or other outgoings of whatever nature (including those arising under Environmental Laws) which may be suffered, incurred or paid by or made or asserted against the Facility Agent or any other Creditor at any time, whether before or after the prepayment in full of principal and interest under this Agreement, relating to, or arising directly or indirectly in any manner or for any cause or reason whatsoever out of an Environmental Claim made or asserted against the Facility Agent or any other Creditor which would or could not have been brought if such other Creditor or the Facility Agent had not entered into any of the Finance Documents and/or exercised any of its rights, powers and discretions thereby conferred and/or performed any of its obligations thereunder and/or been involved in any of the transactions contemplated by the Finance Documents.

 

13                       Increased costs

 

13.1                If the result of any change in, or in the interpretation or application of, or the introduction of, any law or any regulation, request or requirement (whether or not having the force of law, but, if not having the force of law, with which the Facility Agent and/or any Lender or, as the case may be, its holding company habitually complies), including those relating to Taxation, capital adequacy, liquidity, reserve assets, cash ratio deposits and special deposits, is to:

 

(a)                        subject any Lender to Taxes or change the basis of Taxation of any Lender with respect to any payment under any of the Finance Documents (other than Taxes or Taxation on the overall net income, profits or gains of such Lender imposed in the jurisdiction in which its principal office or Facility Office is located); and/or

 

42

 

(b)                       increase the cost to, or impose an additional cost on, any Lender or its holding company in making or keeping its Commitment available or maintaining or funding its Contribution; and/or

 

(c)                        reduce the amount payable or the effective return to any Lender under any of the Finance Documents; and/or

 

(d)                       reduce any Lender’s or its holding company’s rate of return on its overall capital by reason of a change in the manner in which it is required to allocate capital resources to its obligations under any of the Finance Documents; and/or

 

(e)                        require any Lender or its holding company to make a payment or forgo a return on or calculated by reference to any amount received or receivable by it under any of the Finance Documents; and/or

 

(f)                          require any Lender or its holding company to incur or sustain a loss (including a loss of future potential profits) by reason of being obliged to deduct all or part of its Commitment or its Contribution from its capital for regulatory purposes,

 

then and in each such case (subject to clause 13.2):

 

(i)                          such Lender shall notify the Company in writing of such event promptly upon its becoming aware of the same;

 

(ii)                       subject to the terms of the Restructuring Agreement, the Facility Agent shall negotiate with the Company in good faith with a view to restructuring the transaction constituted by the Finance Documents in a way which will (in the reasonable opinion of the Facility Agent) satisfactorily avoid either the unlawfulness or increased costs concerned (each as the case may be) without either decreasing the amounts or net returns due to the Facility Agent and the Lenders under the Finance Documents or which would, but for such unlawfulness or such increased costs (each as the case may be), have been so due, or otherwise adversely affecting the rights, interests and security of the Lenders under the transaction as presently constituted and will not (in the reasonable opinion of the Facility Agent) increase the cost to the Company of or otherwise adversely affect the rights, and interests of the Company under the transactions (and unless the Facility Agent nominates a longer period (which it shall be at liberty to do)), such negotiations shall continue for a period of thirty (30) days after the Company has been given notice under clause 13.1(f)(i) or for such lesser period as is permitted under applicable law having regard to either the unlawfulness or the increased costs concerned (such period called the Negotiation Period); and

 

(iii)                    if at the end of the Negotiation Period the Facility Agent and the Company have not reached agreement on a restructuring of the transaction on the basis described in sub-clause (ii) above then the Company shall on demand, made at any time after expiry of the Negotiation Period whether or not the relevant Lender’s Contribution has been repaid, pay to such Lender the amount which the Lender specifies (in a certificate (which shall be conclusive in the absence of manifest error) setting forth the basis of the computation of such amount but not including any matters which such Lender or its holding company regards as confidential) is required to compensate such Lender and/or (as the case may be) its holding company for such liability to Taxes for such alternative funding, increased cost, reduction, payment or forgone return or loss.

 

For the purposes of this clause 13.1 holding company means the company or entity (if any) within the consolidated supervision of which such Lender is included.

 

Exception

 

13.2                Nothing in clause 13.1 shall entitle any Lender to receive any amount in respect of compensation for any such liability to Taxes, increased or additional cost, reduction, payment, foregone return or loss (a) to the extent that the same is taken into account in calculating the

 

43

 

Mandatory Cost or (b) to the extent that the same is the subject of an additional payment under clause 7.

 

14                       Security, set-off and pro-rata payments

 

Application of moneys

 

14.1                All moneys received by the Facility Agent and/or the Lenders under or pursuant to any of the Finance Documents shall, save as otherwise provided by the provisions of this Agreement or any of the other Finance Documents (including the Vendor Finance Intercreditor Agreement), be applied by the Facility Agent and/or the Lenders in the following manner:

 

(a)                        first, in or towards pro rata payment of all unpaid fees, commissions and expenses which may be owing to the Facility Agent or the Security Trustee under any of the Finance Documents;

 

(b)                       second, in or towards payment of all unpaid fees and expenses which may be owing to the Account Bank under any of the Finance Documents;

 

(c)                        third, in or towards payment of all unpaid fees, commissions and expenses which may be owing to the Lenders under any of the Finance Documents;

 

(d)                       fourth, in or towards payment of any arrears of interest owing in respect of the Loan or any part thereof;

 

(e)                        fifth, in or towards payment to the Lenders of the Loan (whether the same is due and payable or not);

 

(f)                          sixth, in or towards payment to any Lender for any loss suffered by reason of any such payment in respect of principal not being effected on an Interest Payment Date relating to the part of the Loan repaid;

 

(g)                       seventh, in or towards payment to any Lender of any other sums owing to it under any of the Finance Documents;

 

(h)                       eighth, in or toward payment of all unpaid fees, commissions and expenses which may be owing to the Existing Facility Agent or any other Existing Creditor under any of the Existing Finance Documents and the Finance Documents;

 

(i)                           ninth, pro-rata in or towards payment to any Existing Hedge Counterparty of any sums owing to such Existing Hedge Counterparty under the relevant Existing Master Swap Agreement and, if more than one, pro rata to the sums owing to the Existing Hedge Counterparties;

 

(j)                           tenth, in or towards payment to any Creditor (other than a Lender) of any other sums owing to it under any of the Finance Documents; and

 

(k)                        eleventh, the surplus (if any) shall be applied by the Company in accordance with the provisions of the Restructuring Agreement and, following the Final Discharge Date, shall be paid to the Company,

 

or in such other manner as the Combined Creditors may determine.

 

14.2                The Facility Agent shall, if so directed by the Combined Creditors, vary the order set out in clause 14.1 above.

 

14.3                Clauses 14.1 and 14.2 above will override any appropriation made by the Company.

 

Set-off

 

14.4                The Company authorises each Creditor (without prejudice to any of such Creditor’s rights at law, in equity or otherwise), at any time and without notice to the Company:

 

44

 

(a)                        to apply any credit balance to which the Company is then entitled standing upon any account of the Company with any branch of such Creditor in or towards satisfaction of any sum due and payable from the Company to such Creditor under any of the Finance Documents;

 

(b)                       in the name of the Company and/or such Creditor to do all such acts and to execute all such documents as may be necessary or expedient to effect such application; and

 

(c)                        to combine and/or consolidate all or any accounts in the name of the Company with such Creditor.

 

For this purpose, each such Creditor is authorised to purchase with the moneys standing to the credit of such account such other currencies as may be necessary to effect such application.  No Creditor shall be obliged to exercise any right given to it by this clause 14.4.  Each Creditor  shall notify the Facility Agent and the Company forthwith upon the exercise or purported exercise of any right of set-off giving full details in relation thereto and the Facility Agent shall inform the other Creditor.

 

For the purpose of this clause 14.4, the term “Creditor” includes each of the relevant Creditor’s holding companies and Subsidiaries and each Subsidiary of each of the relevant Creditor’s holding companies.

 

14.5                Without prejudice to their rights hereunder and/or under the Existing Master Swap Agreements, an Existing Hedge Counterparty may, subject to the provisions of the Restructuring Agreement, at the same time as, or at any time after, any Default under this Agreement or the Company’s default under the relevant Existing Master Swap Agreement, set-off any amount due now or in the future from the Company to that Existing Hedge Counterparty under this Agreement against any amount due from that Existing Hedge Counterparty to the Company under the relevant Existing Master Swap Agreement and apply the first amount in discharging the second amount.  The effect of any set-off under this clause 14.5 shall be effective to extinguish or, as the case may require, reduce the liabilities of that Existing Hedge Counterparty under the relevant Existing Master Swap Agreement.

 

Pro-rata payments

 

14.6                If at any time the proportion which any Lender (the Recovering Lender) has received or recovered (other than from an Assignee, a Substitute or a sub-participant in such Lender’s Contribution or any other payment of an amount due to the Recovering Lender for its sole account pursuant to clauses 5.1, 12.1 or 13.1) in respect of its share of any payment to be made for the account of the Recovering Lender and one or more other Lenders under any of the Finance Documents is greater (the amount of the excess being referred to in this clause 14.6 as the excess amount) than the proportion of the share of such payment received or recovered by the Lender receiving or recovering the smallest or no proportion of its share, then:

 

(a)                        within two (2) Business Days of such receipt or recovery, the Recovering Lender shall pay to the Facility Agent an amount equal (or equivalent) to the excess amount;

 

(b)                       the Facility Agent shall treat such payment as if it were part of the payment to be made by the Company and shall distribute the same in accordance with clause 14.1; and

 

(c)                        as between the Company and the Recovering Lender the excess amount shall be treated as not having been paid but the obligations of the Company to the other Lenders shall, to the extent of the amount so paid to them, be treated as discharged.

 

Each Lender shall forthwith notify the Facility Agent of any such receipt or recovery by such Lender other than by payment through the Facility Agent.  If any excess amount subsequently has to be wholly or partly refunded by the Recovering Lender which paid an amount equal thereto to the Facility Agent under (a) above each Lender to which any part of such amount was distributed shall on request from the Recovering Lender repay to the Recovering Lender such Lender’s pro-rata share of the amount which has to be refunded by the Recovering Lender.  Each Lender shall on request supply to the Facility Agent such information as the Facility Agent may from time to time request for the purpose of this clause 14.6.  Notwithstanding the

 

45

 

foregoing provisions of this clause 14.6 no Recovering Lender shall be obliged to share any excess amount which it receives or recovers pursuant to legal proceedings taken by it to recover any sums owing to it under this Agreement with any other party which has a legal right to, but does not, either join in such proceedings or commence and diligently pursue separate proceedings to enforce its rights in the same or another court (unless the proceedings instituted by the Recovering Lender are instituted by it without prior notice having been given to such party through the Facility Agent).

 

No release

 

14.7                For the avoidance of doubt it is hereby declared that failure by any Recovering Lender to comply with the provisions of clause 14.6 shall not release any other Recovering Lender from any of its obligations or liabilities under clause 14.6.

 

No charge

 

14.8                The provisions of this clause 14 shall not, and shall not be construed so as to, constitute a charge by a Lender over all or any part of a sum received or recovered by it in the circumstances mentioned in clause 14.4.

 

Further assurance

 

14.9                The Company undertakes that the Finance Documents shall both at the date of execution and delivery thereof and so long as any moneys are owing under any of the Finance Documents be valid and binding obligations of the respective parties thereto and rights of the Facility Agent enforceable in accordance with their respective terms and that it will, at its expense, execute, sign, perfect and do, and will procure the execution, signing, perfecting and doing by each of the other Security Parties of, any and every such further assurance, document, act or thing as in the reasonable opinion of the Facility Agent and/or Lenders may be necessary or desirable for perfecting the security contemplated or constituted by the Finance Documents.

 

Conflicts

 

14.10          In the event of any conflict between this Agreement and any of the other Finance Documents (other than the Restructuring Documents, the Vendor Finance Intercreditor Agreement and the Agency Agreement) to which the Company is a party, the provisions of this Agreement shall prevail.

 

14.11          In the event of any conflict between the Finance Documents (other than the Restructuring Documents, the Vendor Finance Intercreditor Agreement and the Agency Agreement) and the Restructuring Agreement, the provisions of the Restructuring Agreement shall prevail.

 

14.12          In the event of any conflict between the Agency Agreement and this Agreement, the provisions of the Agency Agreement shall prevail.

 

14.13   In the event of any conflict between the Vendor Finance Intercreditor Agreement and the application provisions of this Agreement and the Agency Agreement, the provisions of the Vendor Finance Intercreditor Agreement shall prevail.

 

15                       Earnings Account

 

General

 

15.1                The Company undertakes with the Creditors that it will:

 

(a)                        on or before the first Drawdown Date, open the Earnings Account; and

 

(b)                       procure that all moneys payable to the Owner in respect of the Earnings (as defined in the General Assignment) of the Ship shall, unless and until the Security Trustee directs to the contrary pursuant to proviso (a) to clause 2.1 of the General Assignment, be paid to the Earnings Account Provided however that if any of the moneys paid to the Earnings Account are payable in a currency other than US Dollars, the Company shall instruct the

 

46

 

Account Bank to convert such moneys into US Dollars at the Account Bank’s spot rate of exchange at the relevant time for the purchase of US Dollars with such currency and the term spot rate of exchange shall include any premium and costs of exchange payable in connection with the purchase of US Dollars with such currency.

 

Account terms

 

15.2                The Company shall, unless and until a Default shall occur and the Security Trustee shall direct to the contrary, be entitled from time to time, subject to the agreement of the Account Bank, to require that moneys for the time being standing to the credit of the Earnings Account be transferred in such amounts and for such periods as the Company selects to fixed-term deposit accounts (deposit accounts) opened in the name of the Company with the Account Bank.

 

15.3                The Company shall not be entitled pursuant to clause 15.5 to withdraw moneys standing to the credit of the Earnings Account which are the subject of a fixed term deposit until the expiry of the period of such deposit unless the Company shall, on withdrawing such moneys, pay to the Account Bank on demand any loss or expense which the Account Bank shall certify that it has sustained or incurred as a result of such withdrawal being made prior to the expiry of the period of the relevant deposit and the Account Bank shall be entitled to debit the Earnings Account for the amount so certified prior to such withdrawal being made.

 

15.4                In the event that any moneys so deposited pursuant to clauses 15.2 and 15.3 are to applied pursuant to clause 15.5, the Company shall, on such application being made, pay to the Account Bank on demand any loss or expense which the Account Bank shall certify that it has sustained or incurred as a result of such application being made prior to the expiry of the period of the relevant deposit and the Account Bank shall be entitled to debit the Earnings Account for the amount so certified prior to such application being made.  Any deposit accounts shall, for all the purposes of the Finance Documents and the Existing Finance Documents, be deemed to be sub-accounts of the Earnings Account from which the moneys deposited in the deposit accounts were transferred and all references in the Finance Documents and the Existing Finance Documents to the Earnings Account shall be deemed to include the deposit accounts deemed as aforesaid to be sub-accounts thereof.

 

Earnings Account: withdrawals

 

15.5                Unless the Security Trustee otherwise agrees in writing, the Company shall not be entitled to withdraw any moneys from the Earnings Account at any time from the date of this Agreement and so long as any moneys are owing under the Finance Documents and the Existing Finance Documents save that, unless and until a Default shall occur and the Security Trustee shall direct to the contrary, the Company may, subject to clauses 15.2, 15.3 and 15.4, only withdraw moneys from the Earnings Account in accordance with the provisions of the Restructuring Agreement.

 

Application of account

 

15.6                At any time after the occurrence of an Event of Default but subject to the provisions of the Restructuring Agreement, the Security Trustee may, without notice to the Company, instruct the Account Bank to apply all moneys then standing to the credit of the Earnings Account (together with interest from time to time accruing or accrued thereon) in or towards satisfaction of any sums due to the Combined Creditors under the Finance Documents and the Existing Finance Documents in the manner specified in the Agency Agreement.

 

Charging of account

 

15.7                The Earnings Account and all amounts from time to time standing to the credit thereof shall be subject to the security constituted and the rights conferred by the Earnings Account Charge.

 

47

 

16                       Assignment, substitution and Facility Office

 

Benefit and burden

 

16.1                This Agreement shall be binding upon, and enure for the benefit of, the Lenders and the Facility Agent and the Company and their respective successors.

 

No assignment by Company

 

16.2                The Company may not assign or transfer any of its rights or obligations under this Agreement.

 

Assignment by Lenders

 

16.3                Each Lender may assign all or any part of its rights in respect of its Contribution under this Agreement or under any of the other Finance Documents to any other bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (an Assignee) without the prior written consent of the Company. An assignment will only be effective on the Assignee acceding to (a) the Restructuring Agreement as a Participating Lender in accordance with its terms and (b) the Agency Agreement as a Lender in accordance with its terms.

 

Substitution

 

16.4                Each Lender may transfer, by way of novation, all or any part of its rights, benefits and/or obligations under this Agreement to another person (a Substitute) without the prior written consent of the Company.

 

16.5                Any such novation shall be effected upon:

 

(a)                        five (5) Business Days’ prior notice by delivery to the Facility Agent of a duly completed Substitution Certificate duly executed by such Lender, the Substitute and the Facility Agent (for itself, the Company and the other Creditors);

 

(b)                       the Substitute acceding to (a) the Restructuring Agreement as a Participating Lender in accordance with its terms and (b) the Agency Agreement as a Lender in accordance with its terms; and

 

(c)                        following receipt by the transferring Lender from the Substitute of an amount equal to the portion of the Contribution being transferred.

 

16.6                On the effective date specified in a Substitution Certificate or, if later, the date specified in the Accession Undertaking, each so executed and delivered, to the extent that they are expressed in such Substitution Certificate to be the subject of the novation effected pursuant to clauses 16.4 to 16.6:

 

(a)                        the existing parties to this Agreement and the Lender party to the relevant Substitution Certificate shall be released from their respective obligations towards one another under this Agreement (discharged obligations) and their respective rights against one another under this Agreement (discharged rights) shall be cancelled (except for those rights that arose prior to that date);

 

(b)                       the Substitute party to the relevant Substitution Certificate and the existing parties to this Agreement (other than the Lender party to such Substitution Certificate) shall assume obligations towards each other which differ from the discharged obligations only insofar as they are owed to or assumed by such Substitute instead of to or by such Lender; and

 

(c)                        the Substitute party to the relevant Substitution Certificate and the existing parties to this Agreement (other than the Lender party to such Substitution Certificate) shall acquire rights against each other which differ from the discharged rights only insofar as they are exercisable by or against such Substitute instead of by or against such Lender

 

48

 

and, on the date upon which such novation takes effect, the Substitute shall pay to the Facility Agent for its own account a fee of US$2,000.  The Facility Agent shall promptly notify the other parties hereto of the receipt by it of any Substitution Certificate or any Increase Confirmation and shall promptly deliver a copy of such Substitution Certificate or Increase Confirmation to the Company.

 

In the event any Lender transfers by way of novation all or any part of its rights, benefits and/or obligations under this Agreement to another person, this Agreement and the Finance Documents shall remain in full force and effect.

 

Reliance on Substitution Certificate

 

16.7               The Facility Agent, the other Creditors and the Company shall be fully entitled to rely on any Substitution Certificate delivered to the Facility Agent in accordance with the foregoing provisions of this clause 16 which is complete and regular on its face as regards its contents and purportedly signed on behalf of the relevant Lender and the Substitute and neither the Facility Agent, nor the Creditors nor the Company shall have any liability or responsibility to any party as a consequence of placing reliance on and acting in accordance with any such Substitution Certificate if it proves to be the case that the same was not authentic or duly authorised.

 

Signing of Substitution Certificate

 

16.8               The Company and each of the Creditors irrevocably authorise the Facility Agent to countersign each Substitution Certificate on its behalf without any further consent of, or consultation with, the Company or such Creditor (as the case may be).

 

Construction of certain references

 

16.9               If any Lender assigns all or any part of its rights or novates all or any part of its rights, benefits and obligations as provided in clause 16.3 or 16.4 all relevant references in this Agreement to such Lender shall thereafter be construed as a reference to such Lender and/or its Assignee or Substitute (as the case may be) to the extent of their respective interests.

 

Documenting assignments and novations

 

16.10         If any Lender assigns all or any part of its rights or novates all or any part of its rights, benefits and/or obligations as provided in clauses 16.3 or 16.4 the Company undertakes, immediately on being requested to do so by the Facility Agent and at the cost of the Lender that has so assigned or novated all or any part of its rights and/or obligations, to enter into, and procure that the other Security Parties shall enter into, such documents as may be necessary or desirable to transfer to the Assignee or Substitute all or the relevant part of such Lender’s interest in the Finance Documents and all relevant references in this Agreement to such Lender shall thereafter be construed as a reference to the Lender and/or its Assignee or Substitute (as the case may be) to the extent of their respective interests.

 

Facility Office

 

16.11         Each Lender shall lend through its office at the address specified in Schedule 1 or, as the case may be, in any relevant Substitution Certificate or through any other office of such Lender selected from time to time by it through which such Lender wishes to lend for the purposes of this Agreement. If the office through which such Lender is lending is changed pursuant to this clause 16.11, such Lender shall notify the Facility Agent promptly of such change and the Facility Agent shall notify the Lenders and the Company.

 

17                       Appointment of the Facility Agent and Security Trustee

 

The terms and basis on which the Facility Agent and the Security Trustee have been appointed by the Lenders and the other Creditors as facility agent and by the Lenders and the other Combined Creditors as security agent and trustee respectively are set out in the Agency Agreement including, among other things, the manner in which any decision to exercise any right, powers, discretion or authority or to carry out any duty are to be made between the

 

49

 

Creditors or the Combined Creditors (as the case may be).  Accordingly, in exercising its respective rights or carrying out any duties under this Agreement, the Facility Agent and the Security Trustee shall respectively be entitled to the benefit of all protections and provisions expressed to be created in its favour pursuant to the Agency Agreement.

 

18                       Notices and other matters

 

Communications in writing

 

18.1               Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter or in accordance with clause 18.9.

 

Addresses

 

18.2               The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:

 

(a)                        in the case of the Company, that identified with its name below;

 

(b)                       in the case of each Creditor, that identified with its name below,

 

or any substitute address or fax number or department or officer as the Party may notify to the Facility Agent (or the Facility Agent may notify to the other Parties, if a change is made by the Facility Agent) by not less than five Business Days’ notice.

 

Delivery

 

18.3               Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will, subject to clause 18.9, only be effective:

 

(a)                        if by way of fax, when received in legible form; or

 

(b)                       if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address,

 

and, if a particular department or officer is specified as part of its address details provided under clause 18.2 (Addresses), if addressed to that department or officer.

 

18.4               Subject to clause 18.9, any communication or document to be made or delivered to the Facility Agent or the Security Trustee will be effective only when actually received by the Facility Agent or the Security Trustee and then only if it is expressly marked for the attention of the department or officer identified with the Facility Agent’s or the Security Trustee’s signature below (or any substitute department or officer as the Facility Agent or the Security Trustee shall specify for this purpose).

 

18.5               All notices from or to the Company (including, without limitation, any notices delivered or to be delivered pursuant to clause 18.9) shall be sent through the Facility Agent

 

18.6               Any communication or document made or delivered to the Company in accordance with clauses 18.3 to 18.5 and clause 18.9 will be deemed to have been made or delivered to each of the Security Parties.

 

Notification of address, email address and fax number

 

18.7               Promptly upon receipt of notification of an address, email address or fax number or change of address, email address or fax number pursuant to clause 18.2 or clause 18.9 or changing its own address or fax number, the Facility Agent shall notify the other Parties.

 

50

 

Communication when Facility Agent is Impaired Agent

 

18.8                If the Facility Agent is an Impaired Agent the Parties may, instead of communicating with each other through the Facility Agent, communicate with each other directly and (while the Facility Agent is an Impaired Agent) all the provisions of the Finance Documents which require communications to be made or notices to be given to or by the Facility Agent shall be varied so that communications may be made and notices given to or by the relevant Parties directly. This provision shall not operate after a replacement Facility Agent has been appointed.

 

Electronic communication

 

18.9                Any communication to be made between the Parties under or in connection with the Finance Documents may also be made by electronic mail or other electronic means, if the Parties:

 

(a)                        agree that, unless and until notified to the contrary, this is to be an accepted form of communication (which initial agreement is confirmed by the Parties as at the date of this Agreement);

 

(b)                       notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

 

(c)                        notify each other of any change to their address or any other such information supplied by them.

 

18.10          Any electronic communication made between the Parties will be effective only when actually received in readable form and in the case of any electronic communication made by the Company, a Creditor or Combined Creditor to the Facility Agent, Security Trustee and the relevant Creditor or Combined Creditor only if it is addressed in such a manner as the Facility Agent, Security Trustee and the relevant Creditor or Combined Creditor shall specify for this purpose.

 

Use of websites

 

18.11          The Company may satisfy its obligation under this Agreement to deliver any information in relation to those Creditors (the Website Creditors) who accept this method of communication by posting this information onto an electronic website designated by the Company and the Creditors (the Designated Website) if:

 

(a)                        the Facility Agent expressly agrees (after consultation with each of the Creditors) that they will accept communication of the information by this method;

 

(b)                       both the Company and the Facility Agent are aware of the address of and any relevant password specifications for the Designated Website; and

 

(c)                        the information is in a format previously agreed between the Company and the Facility Agent.

 

If any Creditor (a Paper Form Creditor) does not agree to the delivery of information electronically then the Facility Agent shall notify the Company accordingly and the Company shall at its own cost supply the information to the Facility Agent (in sufficient copies for each Paper Form Creditor) in paper form.  In any event the Company shall at its own cost supply to each Creditor with at least one copy in paper form of any information required to be provided by it.

 

18.12         The Facility Agent shall supply each Website Creditor with the address of and any relevant password specifications for the Designated Website following designation of that website by the Company and the Facility Agent.

 

18.13         The Company shall promptly upon becoming aware of its occurrence notify the Facility Agent if:

 

(a)                        the Designated Website cannot be accessed due to technical failure;

 

51

 

(b)                       the password specifications for the Designated Website change;

 

(c)                        any new information which is required to be provided under this Agreement is posted onto the Designated Website;

 

(d)                       any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or

 

(e)                        the Company becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software.

 

If the Company notifies the Facility Agent under clauses 18.13(a) or 18.13(e) above, all information to be provided by the Company under this Agreement after the date of that notice shall be supplied in paper form unless and until the Facility Agent and each Website Creditor is satisfied that the circumstances giving rise to the notification are no longer continuing.

 

18.14         Any Website Creditor may request, through the Facility Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website.  The Company shall at its own cost comply with any such request within ten Business Days.

 

English language

 

18.15         Any notice given under or in connection with any Finance Document must be in English.

 

18.16         All other documents provided under or in connection with any Finance Document must be:

 

(a)                        in English; or

 

(b)                       if not in English, and if so required by the Facility Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

 

No implied waivers, remedies cumulative

 

18.17         No failure or delay on the part of the Facility Agent, the other Combined Creditors or any of them to exercise any power, right or remedy under any of the Finance Documents shall operate as a waiver thereof, nor shall any single or partial exercise by the Facility Agent, the other Combined Creditors or any of them of any power, right or remedy preclude any other or further exercise thereof or the exercise of any other power, right or remedy.  The remedies provided in the Finance Documents are cumulative and are not exclusive of any remedies provided by law.

 

Disenfranchisement of Facility Defaulting Lenders

 

18.18

 

(a)                        For so long as a Facility Defaulting Lender has any available, undrawn portion of its Commitment, in ascertaining the Majority Lenders or whether any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents, that Facility Defaulting Lender’s Commitment will be reduced by the amount of the available undrawn portion of its Commitment.

 

(b)                       For the purposes of this clause 18.18, the Facility Agent may assume that the following Lenders are Facility Defaulting Lenders:

 

(i)                           any Lender which has notified the Agent that it has become a Facility Defaulting Lender;

 

52

 

(ii)                       any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs (a), (b) or (c) of the definition of “Facility Defaulting Lender” has occurred,

 

unless it has received notice to the contrary from the Lender concerned (together with any supporting evidence reasonably requested by the Facility Agent) or the Facility Agent is otherwise aware that the Lender has ceased to be a Facility Defaulting Lender.

 

Replacement of a Facility Defaulting Lender

 

18.19

 

(a)                        The Company may, at any time a Lender has become and continues to be a Facility Defaulting Lender, by giving 5 Business Days’ prior written notice to the Facility Agent and such Lender replace such Lender by requiring such Lender to (and to the extent permitted by law such Lender shall) transfer pursuant to clause 16 all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity (a Replacement Lender) selected by the Company, and which (unless the Facility Agent is an Impaired Agent) is acceptable to the Facility Agent (acting reasonably) and which confirms its willingness to assume and does assume all the obligations or all the relevant obligations of the transferring Lender (including the assumption of the transferring Lender’s contributions or unfunded Commitments (as the case may be) on the same basis as the transferring Lender) for a purchase price in cash payable at the time of transfer equal to the outstanding principal amount of such Lender’s contributions and all accrued interest,  Break Costs and other amounts payable in relation thereto under the Finance Documents (but it being agreed and acknowledged that no Lender which is not a Facility Defaulting Lender shall be obliged to accept a request to assume any transfer of that Lender’s contribution or unfunded Commitment pursuant to this clause 18.19).

 

(b)                       Any transfer of rights and obligations of a Facility Defaulting Lender pursuant to this clause shall be subject to the following conditions:

 

(i)                          the Company shall have no right to replace the Facility Agent;

 

(ii)                       neither the Facility Agent nor the Facility Defaulting Lender shall have any obligation to the Company to find a Replacement Lender;

 

(iii)                    the transfer must take place no later than 10 Business Days after the notice referred to in paragraph (a) above;

 

(iv)                   in no event shall the Facility Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Facility Defaulting Lender pursuant to the Finance Documents; and

 

(v)                      if the Replacement Lender was not a Lender immediately prior to the issue of the notice in paragraph (a) by the Company, the Replacement Lender acceding to (A) the Restructuring Agreement as a Participating Lender in accordance with its terms and (B) Agency Agreement as a Lender in accordance with its terms.

 

19                       Confidentiality

 

The Parties agree and acknowledge that the disclosure of Confidential Information by any Creditor shall be governed by the provisions of the Restructuring Agreement.

 

20                       Governing law

 

This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

 

53

 

21                       Enforcement

 

Jurisdiction of English courts

 

21.1                The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement) or any non-contractual obligation arising out of or in connection with this Agreement (a Dispute).

 

21.2                The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

 

21.3                Clauses 21.1 to 21.3 are for the benefit of the Creditors only.  As a result, no Creditor shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, the Creditors may take concurrent proceedings in any number of jurisdictions.

 

Service of process

 

21.4                Without prejudice to any other mode of service allowed under any relevant law, the Company:

 

(a)                        irrevocably appoints Danaos Management Consultants (UK) Limited (company number 02680889) presently of 4 Staple Inn, Holborn, London WC1V 7QU as its agent for service of process in relation to any proceedings before the English courts in connection with this Agreement; and

 

(b)                       agrees that failure by an agent for service of process to notify the Company of the process will not invalidate the proceedings concerned.

 

(c)                        If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Company must immediately (and in any event within five days of such event taking place) appoint another agent on terms acceptable to the Facility Agent.  Failing this, the Facility Agent may appoint another agent for this purpose.

 

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

 

54

 

Schedule 1

The Lenders and the Existing Hedge Counterparties

 

Part 1

 

The Lenders and their Commitments

 

 

	
Name
    	
 
    	
Address and fax
    	
 
    	
Commitment
   (US$)
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Citibank, N.A., London Branch
    	
 
    	
9th Floor Citigroup Centre, 

Canada Square, Canary Wharf, 

London E14 5LB  

 

Fax: +44 207 986 5312
    	
 
    	
US$
    	
65,000,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
EFG Eurobank Ergasias S.A.
    	
 
    	
83 Akti   Miaouli & Flessa Street  

5th Floor  

185 38 Piraeus  

Greece  

 

Fax: +30 210 458   7877
    	
 
    	
US$
    	
15,000,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL
    	
 
    	
 
    	
 
    	
US$
    	
80,000,000
    	
 
    

 

Part 2

 

The Existing Hedge Counterparties

 

	
Name
    	
 
    	
Address and fax
    
	
 
    	
 
    	
 
    
	
Citibank, N.A.
    	
 
    	
Capital Markets Documentation Unit  

388 Greenwich Street  

New York, New York 10013  

 

Fax: +1 212 657 3992
    
	
 
    	
 
    	
 
    
	
EFG Eurobank Ergasias S.A.
    	
 
    	
8 Othonos Street  

Athens 105 57  

Greece  

 

Fax: +30 210 333   7281
    

 

55

 

Schedule 2

Form of Drawdown Notice

 

(referred to in clause 2.5)

 

	
To:
    	
Citibank International Plc
    
	
 
    	
Citigroup Centre
    
	
 
    	
5th Floor CGC2
    
	
 
    	
London E14 5LB
    
	
 
    	
 
    
	
 
    	
Attention: Loans Agency
    

 

201[·]

 

Term Loan Facility Agreement dated [·] 2011

(the Facility Agreement) in respect of Hull No. S460

 

We refer to the above Facility Agreement and hereby give you notice that we wish to draw down the [Contract Instalment] [Delivery Date] Advance, namely US$[·] for value [·].  The funds should be credited as follows:

 

1                                [Contract Instalment Advance:  [US$[•] of] the Contract Instalment Advance to [insert details of Builder’s account] with [insert details of Builder’s bank].]

 

2                                [Delivery Date Advance:

 

(a)                        US$[·] of the Delivery Date Advance to [insert details of Builder’s account] with [insert details of Builder’s bank]; and

 

(b)                       US$ [·] (being the balance of the above-mentioned Delivery Date Advance) to the [Earnings Account].]

 

We confirm that:

 

(a)                        no event or circumstance has occurred and is continuing which constitutes a Default;

 

(b)                       the representations and warranties contained in, or referred to in:

 

(i)                          clause 8 of the Facility Agreement; and

 

(ii)                       clause 5 of the Owner’s Guarantee,

 

are true and correct at the date hereof as if made with respect to the facts and circumstances existing at such date;

 

(c)                        the borrowing to be effected by the drawdown of the above-mentioned Advance will be within our corporate powers, has been validly authorised by appropriate corporate action and will not cause any limit on our borrowings (whether imposed by statute, regulation, agreement or otherwise) to be exceeded; and

 

(d)                       there has been no material adverse change in our financial position from that described by us to the Facility Agent and the Lenders in the negotiation of the Facility Agreement.

 

Words and expressions defined in the Facility Agreement shall have the same meanings where used herein.

 

	
 
    	
For and on behalf of
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
DANAOS CORPORATION
    	
 
    

 

56

 

Schedule 3 

Documents and evidence required as conditions precedent

 

(referred to in clause 10)

 

Part 1

 

(a)                        Constitutional documents

 

copies, certified by an officer of each Security Party (other than the Builder, the Refund Guarantor and the Charterer) as true, complete and up to date copies of all documents which contain or establish or relate to the constitution of that Security Party;

 

(b)                        Corporate authorisations

 

copies of resolutions of the directors and, if required by special legal advisers to the Facility Agent or any other Combined Creditor, the shareholders of each Security Party (other than of the Builder, the Refund Guarantor and the Charterer) approving such of the Underlying Documents and the Finance Documents to which such Security Party is, or is to be, party and authorising the signature, delivery and performance of such Security Party’s obligations thereunder, certified (in a certificate dated no earlier than five (5) Business Days prior to the date of this Agreement) by an officer of such Security Party;

 

(i)                                               being true and correct;

 

(ii)                                            being duly passed at meetings of the directors of such Security Party and, if applicable, of the shareholders of such Security Party each duly convened and held;

 

(iii)                                         not having been amended, modified or revoked; and

 

(iv)                                        being in full force and effect,

 

together with originals or certified copies of any powers of attorney issued by any Security Party pursuant to such resolutions;

 

(c)                        Specimen signatures

 

copies of the signatures of the persons who have been authorised on behalf of each Security Party (other than the Builder, the Refund Guarantor and the Charterer) to sign such of the Underlying Documents and the Finance Documents to which such Security Party is, or is to be, party and to give notices and communications, including notices of drawing, under or in connection with the Finance Documents, certified (in a certificate dated no earlier than five (5) Business Days prior to the date of this Agreement) by an officer of such Security Party as being the true signatures of such persons;

 

(d)                        Certificates of incumbency

 

a list of directors and officers of each Security Party (other than the Builder, the Refund Guarantor and the Charterer specifying the names and positions of such persons, certified (in a certificate dated no earlier than five (5) Business Days prior to the date of this Agreement) by an officer of such Security Party to be true, complete and up to date;

 

(e)                        Company’s consents and approvals

 

a confirmation from the Company that no consents, authorisations, licences and approvals are necessary in any Relevant Jurisdiction to enable it to borrow the Loan and to perform its obligations under this Agreement and each of the other Finance Documents;

 

57

 

(f)                          Other consents and approvals

 

a confirmation from each of the other Security Parties (other than the Builder, the Refund Guarantor and the Charterer) that no consents, authorisations, licences and approvals are necessary in any Relevant Jurisdiction to enable that Security Party to enter into and to perform its obligations under the Finance Documents to which it is a party;

 

(g)                       Certified Underlying Documents

 

a copy, certified (in a certificate dated no earlier than five (5) Business Days prior to the date of this Agreement) as a true and complete copy by an officer of the Company of each of the Underlying Documents (other than the Refund Guarantee which shall be an original unless issued by way of SWIFT message);

 

(h)                       Fee Letter

 

the Fee Letter duly executed by the parties thereto;

 

(i)                          Restructuring Agreement

 

the Restructuring Agreement duly executed by the parties thereto together with evidence, in a form and substance satisfactory to the Lenders, that the Closing Date has occurred;

 

(j)                          Sinosure

 

evidence that the Company has complied, in full, with the provisions of clause 24 of the Restructuring Agreement

 

(k)                      Required Equity Issue

 

(i)                                              evidence that the Company has received the proceeds of the Required Equity Issue; and

 

(ii)                                           evidence that the Coustas Family has contributed (directly or through any company or legal entity) at least 50% to the Required Equity Issue;

 

(l)                          KEXIM Facility Agreements

 

evidence that the financial covenants under the KEXIM Facility Agreements are consistent with the terms of the Restructuring Agreement, or long term waivers are entered into (each in form acceptable to the Lenders in their sole discretion) such that defaults are not triggered under the KEXIM Facility Agreements where they would not be triggered under the Restructuring Agreement;

 

(m)                    Equity contribution

 

evidence that the Owner has paid all instalments under the Contract which have fallen due as at the relevant Drawdown Date in full other than those instalments to be financed by this Loan;

 

(n)                       Company’s process agent

 

a copy, certified as a true copy by the Company’s solicitors or other person acceptable to the Lenders of a letter from the Company’s agent for receipt of service of proceedings referred to in clause 21.4(a) accepting its appointment under the said clause and under each of the other Finance Documents in which it is or is to be appointed as the Company’s agent;

 

(o)                        Know your customer and money laundering requirements

 

evidence that all information required in relation to any Security Party (other than in relation to the Builder, the Refund Guarantor and the Charterer) and/or the directors and the ultimate beneficial owners thereof in order for each Lender to complete its due diligence formalities and “know your customer” requirements in accordance with applicable laws, regulations or internal

 

58

 

guidelines of such Lender in connection with this Agreement and the other Finance Documents has been provided and is satisfactory in all respects to each relevant Lender; and

 

(p)                        Refund Guarantee

 

an original of or, if issued by way of SWIFT message, a copy of the Refund Guarantee, in a form and substance acceptable to the Lenders.

 

59

 

Part 2

 

(a)                        Conditions precedent

 

evidence that the conditions precedent set out in Part 1 of Schedule 3, remain fully satisfied;

 

(b)                        Earnings Accounts

 

evidence that the Earnings Account has been opened;

 

(c)                        Finance Documents

 

the Earnings Account Charge, the Charter Assignment, the Owner’s Guarantee, the Owner Share Pledge, the Pre-delivery Security Assignment and the Vendor Finance Intercreditor Agreement, duly executed by the parties thereto;

 

(d)                        Notices of assignment and acknowledgements

 

(i)                                              the Contract Assignment Consent and Acknowledgement and the Refund Guarantee Assignment Consent and Acknowledgement duly executed and copies of duly executed notices of assignment together with original duly executed acknowledgements thereof required by the terms of the Finance Documents referred to in (c) above and in the forms prescribed by such Finance Documents; and

 

(ii)                                           all the requirements of the Owner Share Pledge fully satisfied;

 

(e)                        No claim

 

evidence satisfactory to the Lenders that the Builder (and any other party who may have a claim pursuant to the Contract) has no claims against the Ship, the Company or the Owner and that there have been no breaches of the terms of the Contract or the Refund Guarantee or any default thereunder;

 

(f)                          No variations to Contract

 

evidence that there have been no amendments or variations agreed to the Contract and that no action has been taken by the Company, the Owner or the Builder which might in any way render the Contract inoperative or unenforceable, in whole or in part;

 

(g)                       No Security

 

evidence acceptable to the Lenders that there is no Security of any kind created or permitted by any person on or relating to the Contract or the Refund Guarantee;

 

(h)                       Invoice

 

a certified copy of the invoice in respect of which payment is due to the Builder from the Owner and such other evidence as the Lenders may reasonably require that such payment is due and payable to the Builder together with certified copies of receipts for earlier payments paid under the Contract;

 

(i)                          Process agent

 

if not already provided, a copy, certified as a true copy by the Company’s solicitors or other person acceptable to the Lenders of a letter from each Security Party’s (other than the Builder, the Refund Guarantor and the Charterer) agent for receipt of service of proceedings accepting its appointment under each of the Finance Documents (other than this Agreement) in which it is or is to be appointed as such Security Party’s agent;

 

60

 

(j)                          Legal opinions

 

(i)                        English opinion

 

an opinion of Norton Rose LLP, special legal advisers in England and Wales to the Facility Agent and the Security Trustee;

 

(ii)                    Liberian opinion

 

an opinion of Holland & Knight LLP, special legal advisers in the Republic of Liberia to the Facility Agent and the Security Trustee;

 

(iii)                Marshall Islands opinion

 

an opinion of Holland & Knight LLP, special legal advisers in the Republic of the Marshall Islands to the Facility Agent and the Security Trustee;

 

(iv)                   New York opinion

 

an opinion of Holland & Knight LLP, special legal advisers in the State of New York Islands to the Facility Agent and the Security Trustee;

 

(v)                       Korean opinion

 

if required by the Creditors, an opinion of Lee & Ko, special legal advisers in Korea to the Facility Agent and the Security Trustee; and

 

(vi)                   Further opinions

 

any such further opinion as may be required by the Facility Agent and/or the other Creditors;

 

(k)                      Equity contribution

 

evidence that the Owner has deposited into the Earnings Account its equity contribution for the keel-laying instalment under the Contract which is to be part financed by the Contract Instalment Advance in a manner acceptable to the Lenders in their sole discretion and in an amount which when aggregated with the Contract Instalment Advance is at least equal to relevant instalment under the Contract;

 

(l)                          Fees and commissions

 

payment of any fees and commissions due from the Company pursuant to the terms of clause 5 or any other provision of the Finance Documents; and

 

(m)                    Sinosure

 

evidence that the requirements of clause 24.5 of the Restructuring Agreement have been complied with.

 

61

 

Part 3

 

(a)                      Conditions precedent

 

evidence that the conditions precedent set out in Part 1 and Part 2 of Schedule 3, remain fully satisfied;

 

(b)                      No claim

 

evidence satisfactory to the Lenders that the Builder (and any other party who may have a claim pursuant to the Contract) has no claims against the Ship or the Company, the Owner and that there have been no breaches of the terms of the Contract or the Refund Guarantee or any default thereunder;

 

(c)                      No variations to Contract

 

evidence that there have been no amendments or variations agreed to the Contract and that no action has been taken by the Company, the Owner or the Builder which might in any way render the Contract inoperative or unenforceable, in whole or in part;

 

(d)                      Invoice

 

a certified copy of the valid invoice relating to the delivery instalment due under the Contract in respect of which the relevant part of the Delivery Date Advance is to be applied in payment together with certified copies of receipts and the corresponding invoices for earlier payments paid under the Contract (if not already provided pursuant to Part 2);

 

(e)                      No Security

 

evidence acceptable to the Lenders that there is no Security of any kind created or permitted by any person on or relating to the Contract or the Refund Guarantee;

 

(f)                        Ship conditions

 

evidence that the Ship:

 

(i)                                             Registration and Security

 

is registered in the name of the Owner through the Registry under the laws and flag of the Flag State and that the Ship and its Earnings, Insurances and Requisition Compensation (as defined in the General Assignment) are free of Security;

 

(ii)                                         Classification

 

maintains the Classification free of all requirements and recommendations of the Classification Society;

 

(iii)                           Insurance

 

is insured in accordance with the provisions of the Finance Documents and all requirements of the Finance Documents in respect of such insurance have been complied with and confirmation from the protection and indemnity association or other insurer with which the Ship is, or is to be, entered for insurance or insured against protection and indemnity risks (including oil pollution risks) that any necessary declarations required by the association or insurer for the removal of any oil pollution exclusion have been made and that any such exclusion does not apply to the Ship);

 

(iv)                              Charter

 

has been delivered by the Owner to the Charterer under the Charter;

 

62

 

(g)                     Finance Documents

 

the Mortgage, the Charter Assignment, the General Assignment, the Manager’s Undertaking and (if not already provided pursuant to Schedule 3, Part 2), the Earnings Account Charge  each duly executed by the parties thereto;

 

(h)                     Notices of assignment and acknowledgements

 

copies of duly executed notices of assignment and notices of charge together with original duly executed acknowledgements thereof required by the terms of the Finance Documents referred to in (g) above and in the forms prescribed by such Finance Documents;

 

(i)                        Owner’s further corporate authorisations

 

copies of the resolutions of the Owner’s directors and, if required by special legal advisers to the Facility Agent or any other Combined Creditor, shareholders evidencing authorisation of the acceptance of the delivery of the Ship and authorisation and approval of the Mortgage and the General Assignment and the transactions contemplated therein and any other documents issued or to be issued pursuant thereto and authorising its appropriate officer or other representative to execute the same on its behalf certified in the manner referred to in paragraph (b) of Part 1 of this Schedule (or other evidence of such authorisation, approval and/or ratification) and any power of attorney issued pursuant to the said resolutions;

 

(j)                        Updated certificates of incumbency

 

a list of directors and officers of each Security Party (other than the Builder, the Refund Guarantor and the Charterer) specifying the names and positions of such persons and copies of the signatures of the persons who have been authorised on behalf of such Security Party to sign such of the Underlying Documents and the Finance Documents to which such Security Party is, or is to be, party and to give notices and communications, including notices of drawing, under or in connection with the Finance Documents, certified (in a certificate dated no earlier than five (5) Business Days prior to the Delivery Date) by an officer of such Security Party to be, in the case of the list of directors, true, complete and up to date and, in the case of the specimen signatures, true signatures of such persons or a certificate by an officer of such Security Party that the list provided in respect of the Security Party pursuant to paragraph (d) of Part 1 of this Schedule and that the specimen signatures provided in respect of the Security Party pursuant to paragraph (c) of Part 1 of this Schedule remain true, complete and up to date;

 

(k)                    Mortgage registration

 

evidence that the Mortgage has been registered against the Ship through the Registry under the laws and flag of the Flag State;

 

(l)                        Insurance undertakings

 

confirmations from the relevant P&I Club, War Risks Club and brokers/insurers confirming that Letters of Undertaking will be issued in respect of the Ship in a form and substance acceptable to the Lenders in their sole discretion;

 

(m)                  Insurance opinion

 

an opinion, in a form and substance acceptable to the Lenders, from insurance consultants appointed by the Lenders, on the insurances effected or to be effected in respect of the Ship upon and following the Delivery Date;

 

(n)                      Legal opinions

 

(i)                                             English opinion

 

an opinion of Norton Rose LLP, special legal advisers in England and Wales to the Facility Agent and the Security Trustee;

 

63

 

(ii)                                         Liberian opinion

 

an opinion of Holland & Knight LLP, special legal advisers in the Republic of Liberia to the Facility Agent and the Security Trustee;

 

(iii)                                     Marshall Islands opinion

 

an opinion of Holland & Knight LLP, special legal advisers in the Republic of the Marshall Islands to the Facility Agent and the Security Trustee;

 

(iv)                                        Korean opinion

 

if required by the Creditors, an opinion of Lee & Ko, special legal advisers in Korea to the Facility Agent and the Security Trustee; and

 

(v)                                            Further opinions

 

any such further opinion as may be required by the Facility Agent and/or the other Creditors;

 

(o)                      Process agent

 

a copy, certified as a true copy by the Company’s solicitors or other person acceptable to the Lenders of a letter from each Security Party’s ((other than the Builder, the Refund Guarantor and the Charterer) agent for receipt of service of proceedings accepting its appointment under each of the Finance Documents (other than this Agreement) in which it is or is to be appointed as such Security Party’s agent;

 

(p)                      Title documents

 

copies of the Builder’s certificate and bill of sale in favour of the Owner from the Builder and the Protocol of Delivery and Acceptance duly executed and such other evidence as the Lenders may reasonably require (including evidence of the Builder’s corporate authorisations to deliver title to the Ship) that the Owner will obtain good title to the Ship on or before the Delivery Date;

 

(q)                      Export licences

 

a copy, certified as a true and complete copy by an officer of the Company of all consents, authorisations, licences and approvals required by the Owner and the Builder (if any) in connection with the export by the Builder of the Ship;

 

(r)                      Certified Underlying Documents

 

a copy, certified as a true and complete copy by an officer of the Company of the Management Agreement;

 

(s)                      Manager’s confirmation

 

the Manager of the Ship has confirmed in writing that the representations and warranties set out in clauses 8.3(e) and 8.3(f)are true and correct;

 

(t)                        ISM Code and ISPS Code documentation

 

a certified true copy of the SMC, DOC and ISSC for the Ship;

 

(u)                     Payment of Contract Price

 

evidence that, subject to the terms of the relevant Vendor Finance Facility Agreement, the Contract Price for the Ship has been (or upon drawdown of the relevant part of the Delivery Date Advance will have been) paid in full;

 

64

 

(v)                       Fees and commissions

 

evidence that all fees and commissions due under clause 5 or under any other provisions of the Finance Documents have been paid in full; and

 

(w)                    Sinosure

 

if the Contract Instalment Advance has not been made at or by the time of Delivery, evidence that the requirements of clause 24.5 of the Restructuring Agreement have been complied with.

 

65

 

Schedule 4

Form of Substitution Certificate

 

[Note: Lenders are advised not to employ Substitution Certificates or otherwise to assign, novate or transfer interests in the Agreement without first ensuring that the transaction complies with all applicable laws and regulations in all applicable jurisdictions.]

 

To:                              [insert name] on its own behalf, as agent for the Creditors party to (and as defined in) the Facility Agreement mentioned below and on behalf of Danaos Corporation.

 

Attention:

 

[Date]

 

Substitution Certificate

 

This Substitution Certificate relates to a US$80,000,000 Term Facility Agreement dated [·] 2011 (the Facility Agreement) between, among others, Danaos Corporation, the banks whose respective names and addresses are set out in Schedule 1 thereto as Lenders, [insert name] as Facility Agent and [insert name] as security agent and trustee.

 

1                                [name of Existing Lender] (the Existing Lender) (a) confirms the accuracy of the summary of its participation in the Facility Agreement set out in the schedule below; and (b) requests [name of Substitute Lender] (the Substitute) to accept by way of novation the portion of such participation specified in the schedule hereto by counter-signing and delivering this Substitution Certificate to the Facility Agent at its address for the service of notices specified in the Facility Agreement.

 

2                                The Substitute hereby requests the Facility Agent (on behalf of itself and the other Creditors) to accept this Substitution Certificate as being delivered to the Facility Agent pursuant to and for the purposes of clause 16.4 of the Facility Agreement, so as to take effect in accordance with the respective terms thereof on [date of transfer] (the Effective Date) or on such later date as may be determined in accordance with the respective terms thereof.

 

3                                The Facility Agent (on behalf of itself, the other Creditors and all other parties to the Agency Agreement) confirms the novation effected by this Substitution Certificate pursuant to and for the purposes of clause 16.4 of the Facility Agreement so as to take effect in accordance with the respective terms thereof.

 

4                                The Substitute confirms:

 

(a)                        that it has received a copy of the Facility Agreement and each of the other Finance Documents and all other documentation and information required by it in connection with the transactions contemplated by this Substitution Certificate;

 

(b)                       that it has made and will continue to make its own assessment of the validity, enforceability and sufficiency of the Facility Agreement, the other Finance Documents and this Substitution Certificate and has not relied and will not rely on the Existing Lender or the Facility Agent or any statements made by either of them in that respect;

 

(c)                        that it has made and will continue to make its own credit assessment of the Company and has not relied and will not rely on the Existing Lender or the Facility Agent or any statements made by either of them in that respect; and

 

(d)                       that, accordingly, neither the Existing Lender nor the Facility Agent shall have any liability or responsibility to the Substitute in respect of any of the foregoing matters.

 

5                               Execution of this Substitution Certificate by the Substitute constitutes its representation to the Existing Lender and all other parties to the Facility Agreement that it has power to become party to the Facility Agreement as a Lender on the terms herein and therein set out and has taken all necessary steps to authorise execution and delivery of this Substitution Certificate.

 

66

 

6                                The Existing Lender makes no representation or warranty and assumes no responsibility with respect to the legality, validity, effectiveness, adequacy or enforceability of the Facility Agreement or any of the other Finance Documents or any document relating thereto and assumes no responsibility for the financial condition of the Company or any other party to the Facility Agreement or any of the other Finance Documents or for the performance and observance by the Company or any other such party of any of its obligations under the Facility Agreement or any of the other Finance Documents or any document relating thereto and any and all such conditions and warranties, whether express or implied by law or otherwise, are hereby excluded.

 

7                                The Substitute hereby undertakes to the Existing Lender, the Company and the Facility Agent and each of the other parties to the Facility Agreement that it will perform in accordance with their terms all those obligations which by the respective terms of the Facility Agreement will be assumed by it after acceptance of this Substitution Certificate by the Facility Agent.

 

8                                All terms and expressions used but not defined in this Substitution Certificate shall bear the meaning given to them in the Facility Agreement.

 

9                                This Substitution Certificate and the rights and obligations of the parties hereunder shall be governed by and construed in accordance with English law.

 

Note:                    This Substitution Certificate is not a security, bond, note, debenture, investment or similar instrument.

 

AS WITNESS the hands of the authorised signatories of the parties hereto on the date appearing below.

 

67

 

The Schedule

 

	
Commitment: US$
    	
Portion Transferred: US$
    
	
 
    	
 
    
	
Contribution: US$
    	
Portion Transferred: US$
    
	
 
    	
 
    
	
Next Interest Payment Date:
    	
 
    

 

68

 

Administrative Details of Substitute

 

Facility Office:

 

Account for payments:

 

Telephone:

 

Fax:

 

Attention:

 

	
[Existing Lender]
    	
[Substitute]
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    
	
Date:
    	
Date:
    
					

 

The Facility Agent

 

	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

on its own behalf

 

and on behalf of the Company, the Lenders, the Security Trustee and the other Creditors.

 

Date:

 

69

 

Schedule 5

Form of Increase Confirmation

 

To:                              [·] as Facility Agent, and Danaos Corporation as Company, for and on behalf of each Security Party

 

From:                [the Increase Lender] (the Increase Lender)

 

Dated:             [·]

 

Term Loan Facility Agreement
 dated [·] 2011 (the Facility Agreement) in respect of Hull No. S460

 

1                                We refer to the Facility Agreement.  This is an Increase Confirmation.  Terms defined in the Facility Agreement have the same meaning in this Increase Confirmation unless given a different meaning in this Increase Confirmation.

 

2                                We refer to clause 2.2 (Increase) of the Facility Agreement.

 

3                                The Increase Lender agrees to assume and will assume all of the obligations corresponding to the Commitment specified in the Schedule (the Relevant Commitment) as if it was a Lender under the Agreement.

 

4                                The proposed date on which the increase in relation to the Increase Lender and the Relevant Commitment is to take effect is [insert date] (the Increase Date).

 

5                                [New Lender only: On the Increase Date, the Increase Lender becomes party to the Finance Documents as a Lender.]

 

6                                The Facility Office and address, fax number and attention details for notices to the Increase Lender for the purposes of clause 18.2 (Addresses) are set out in the Schedule.

 

7                                The Increase Lender expressly acknowledges the limitations on the Lenders’ obligations referred to in paragraph (f) of clause 2.2 (Increase).

 

8                                This Increase Confirmation may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Increase Confirmation.

 

9                                This Increase Confirmation and any non-contractual obligations arising out of or in connection with it are governed by English law.

 

70

 

THE SCHEDULE

 

Relevant Commitment/rights and obligations to be assumed by the Increase Lender

 

[insert relevant details]

 

[Facility office address, fax number and attention details for notices and account details for payments]

 

[Increase Lender]

 

By:

 

This Increase Confirmation is accepted as an Increase Confirmation for the purposes of the Agreement by the Facility Agent and the Increase Date is confirmed as [insert date].

 

Facility Agent:

 

By:

 

 

Security Trustee:

 

By:

 

71

 

Company

 

	
SIGNED by
    	
)
    	
 
    
	
for and on behalf of
    	
)
    	
 
    
	
DANAOS CORPORATION
    	
)
    	
 
    
	
pursuant to a power of attorney
    	
)
    	
 
    
	
dated
    	
)
    	
/s/   Iraklis Prokopakis
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Attorney-in-fact
    

 

	
Address:
    	
c/o Danaos Shipping   Co. Ltd.
    
	
 
    	
14 Akti Kondyli
    
	
 
    	
185 45 Piraeus
    
	
 
    	
Greece
    
	
 
    	
 
    
	
Fax:
    	
+30 210 419 6489
    
	
 
    	
 
    
	
Attention:
    	
Legal Department
    

 

 

Lenders

 

	
SIGNED by
    	
)
    	
 
    
	
for and on behalf of
    	
)
    	
 
    
	
CITIBANK, N.A., LONDON BRANCH
    	
)
    	
 
    
	
 
    	
 
    	
/s/   Authorised Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Authorised signatory
    

 

	
Address:
    	
9th Floor Citigroup   Centre
    
	
 
    	
Canada Square
    
	
 
    	
Canary Wharf
    
	
 
    	
London E14 5LB
    
	
 
    	
 
    
	
Fax:
    	
+44 207 986 5312
    
	
 
    	
 
    
	
Attention:
    	
Responsible officer   for Danaos Corp.
    

 

 

	
SIGNED by
    	
)
    	
 
    
	
for and on behalf of
    	
)
    	
 
    
	
EFG EUROBANK ERGASIAS S.A.
    	
)
    	
 
    
	
 
    	
 
    	
/s/   Authorised Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Authorised signatory
    

 

	
Address:
    	
83 Akti Miaouli &   Flessa Street
    
	
 
    	
5th Floor
    
	
 
    	
185 38 Piraeus
    
	
 
    	
Greece
    
	
 
    	
 
    
	
Fax:
    	
+30 210 458 7877
    
	
 
    	
 
    
	
Attention:
    	
Ms Sissy Ydraiou/Mr   John Tsirikos
    

 

72

 

Existing Hedge Counterparties

 

	
SIGNED by
    	
)
    	
 
    
	
for and on behalf of
    	
)
    	
 
    
	
CITIBANK, N.A.
    	
)
    	
 
    
	
 
    	
 
    	
/s/   Authorised Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Authorised signatory
    

 

	
Address:
    	
Capital Markets   Documentation Unit
    
	
 
    	
388 Greenwich   Street
    
	
 
    	
New York, New York,   10013
    
	
 
    	
 
    
	
Fax:
    	
 +1 212 657 3992
    
	
 
    	
 
    
	
Attention:
    	
Director   Derivatives Operations
    
	
 
    	
 
    
	
Copy:
    	
Legal Department
    
	
 
    	
388 Greenwich   Street
    
	
 
    	
17th Floor
    
	
 
    	
New York, New York   10013
    
	
 
    	
 
    
	
Attention:
    	
Senior Deputy   General Counsel, Citi Markets and Banking
    
	
 
    	
 
    
	
Fax:
    	
+1 212 816 5550
    

 

 

	
SIGNED by
    	
)
    	
 
    
	
for and on behalf of
    	
)
    	
 
    
	
EFG EUROBANK ERGASIAS S.A.
    	
)
    	
 
    
	
 
    	
 
    	
/s/   Authorised Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Authorised signatory
    

 

	
Address:
    	
8 Othonos Street
    
	
 
    	
Athens 105 57
    
	
 
    	
Greece
    
	
 
    	
 
    
	
Fax:
    	
+30 210 333 7281
    
	
 
    	
 
    
	
Attention:
    	
Ms Sofia Tatsi/Ms   Elli Hudaverdi
    

 

73

 

Account Bank

 

	
SIGNED by
    	
)
    	
 
    
	
for and on behalf of
    	
)
    	
 
    
	
CITIBANK, N.A., LONDON BRANCH
    	
)
    	
 
    
	
 
    	
 
    	
/s/   Authorised Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Authorised signatory
    

 

	
Address:
    	
14th Floor   Citigroup Centre
    
	
 
    	
Canada Square
    
	
 
    	
Canary Wharf
    
	
 
    	
London E14 5LB
    
	
 
    	
 
    
	
Fax:
    	
+44 20 7508 3883
    
	
 
    	
 
    
	
Attention:
    	
Account Bank Team
    

 

 

Facility Agent

 

	
SIGNED by
    	
)
    	
 
    
	
for and on behalf of
    	
)
    	
 
    
	
CITIBANK INTERNATIONAL Plc
    	
)
    	
 
    
	
 
    	
 
    	
/s/   Authorised Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Authorised signatory
    

 

	
Address:
    	
5th Floor Citigroup   Centre
    
	
 
    	
25 Canada Square
    
	
 
    	
Canary Wharf
    
	
 
    	
London E14 5LB
    
	
 
    	
 
    
	
Fax:
    	
+44 208 363 3824
    
	
 
    	
 
    
	
Attention:
    	
Loans Agency
    

 

 

Security Trustee

 

	
SIGNED by
    	
)
    	
 
    
	
for and on behalf of
    	
)
    	
 
    
	
CITIBANK, N.A. LONDON BRANCH
    	
)
    	
 
    
	
 
    	
 
    	
/s/   Authorised Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Authorised signatory
    

 

	
Address:
    	
14th Floor   Citigroup Centre
    
	
 
    	
Canada Square
    
	
 
    	
Canary Wharf
    
	
 
    	
London E14 5LB
    
	
 
    	
 
    
	
Fax:
    	
+44 20 7986 4526
    
	
 
    	
 
    
	
Attention:
    	
Agency &   Trust
    

 

74Exhibit 4.29

 

AGREEMENT

 

This Agreement is made on this 27th day of September 2010 by and between:

 

(1)                                  CELLCONTAINER (NO. 6) CORP. (the “Buyer”); and

 

(2)                                  HYUNDAI SAMHO HEAVY INDUSTRIES CO., LTD. (the “Builder”),

 

(hereinafter the parties referred to individually as the “Party” and collectively as the “Parties”), to amend and supplement the Contract as defined hereinafter.

 

WHEREAS:

 

A.                                   The Buyer and the Builder entered into a shipbuilding contract on 9 November 2007 as amended and supplemented from time to time (the “Contract”) for the construction and sale of one (1) 10,100 TEU class container carrier, having the Builder’s Hull No S461 (the “Vessel”).

 

B.                                     The Buyer desires to amend the terms of payment of the Contract Price and to postpone part of the final instalment of the Contract Price (as that term is defined in the Contract) until after delivery of the Vessel.

 

C.                                     The Buyer is willing to execute and deliver to the Builder the Mortgage, Assignment and the Time Charter Assignment (each as hereinafter defined) in respect of the Vessel as security for the payment of the postponed part of the final instalment referred to in Recital (B) above.

 

D.                                    Danaos Corporation (the “Guarantor”) is willing to execute and deliver to the Builder the Letter of Guarantee (as hereinafter defined) guaranteeing the payment of the postponed part of the final instalment referred to in Recital (B) above.

 

E.                                      The Builder is willing to agree to such amendment of the terms of payment of the Contract Price and deferral of part of the final instalment upon the terms and conditions herein below.

 

NOW, THEREFORE, for good and valuable consideration the Parties hereby agree to enter into this AGREEMENT on the following terms and conditions.

 

1                                          DEFINITIONS

 

“Assignment” has the meaning given in Clause 4.4.

 

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for general business in London, New York, Athens and Seoul.

 

“Delivery Instalment” has the meaning given in Clause 3.1.

 

“Delivery Instalment Due Date” has the meaning given in Clause 3.2.

 

“Due Date” means the Delivery Instalment Due Date and any Post Delivery Instalment Due Date and in the plural means both of them.

 

“Event of Default” has the meaning given in Clause 9.

 

 

“First Loan” means the Loan made or to be made available to, amongst others, the Buyer by the First Mortgagee in respect of (inter alia) the Vessel.

 

“First Mortgagee” means The Royal Bank of Scotland plc.

 

“First Security” means (i) the first preferred Liberian mortgage over the Vessel in favour of the First Mortgagee and (ii) the first priority assignment of the earnings, insurance and requisition compensation relating to the Vessel in favour of the First Mortgagee.

 

“Intercreditor Deed” means the intercreditor deed between the First Mortgagee and the Builder under which the Post Delivery Instalment shall rank behind the claims of the First Mortgagee under the First Loan entered into or to be entered into between (inter alia) the First Mortgagee and the Buyer providing (inter alia) for the First Security.

 

“Letter of Guarantee” has the meaning given in Clause 4.2.

 

“Mortgage” has the meaning given in Clause 4.3.

 

“Post Delivery Instalment” has the meaning given in Clause 3.1.

 

“Post Delivery Instalment Due Date” has the meaning given in Clause 3.3.

 

“Promissory Note” has the meaning given in Clause 4.1.

 

“Second Security” means the Mortgage, the Assignment and the Time Charter Assignment.

 

“Tax” means any tax (other than tax on the overall income of the Builder, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

 

“Tax Deduction” means a deduction or withholding for or on account of Tax from a payment under a Transaction Document except for those imposed in Korea upon the payment of the Post Delivery Instalment.

 

“Time Charterer” means Hanjin Shipping Co., Ltd of Seoul.

 

“Time Charter” means the time charter dated 15 November 2007 as amended by addendum no. 1 dated 19 August 2009 between the Buyer and the Time Charterer.

 

“Time Charter Assignment” has the meaning given in Clause 4.5

 

“Total Loss” means: (a) actual, constructive, compromised, agreed or arranged total loss of the Vessel; (b) requisition for title or other compulsory acquisition of the Vessel otherwise than by requisition for hire; (c) capture, seizure, arrest, detention, or confiscation of the Vessel by any person, governmental authority or government or by persons acting or purporting to act on behalf of any government or any other person which deprives the Buyer of the use of the Vessel for 90 days or more after that occurrence; and (d) requisition for hire of the Vessel by any government or by persons acting or purporting to act on behalf of any government which deprives the Buyer of the use of the Vessel for a period of 90 days or more.

 

“Transaction Documents” means the Contract, this Agreement, the Second Security, the Promissory Notes, the Letter of Guarantee, the Time Charter Assignment and the Intercreditor Deed.

 

 

2                                          ADJUSTMENT OF PAYMENT

 

2.1                                 Article X. 2 of the Contract shall be amended and shall henceforth be read as follows:-

 

“2. TERMS OF PAYMENT

 

The payments of the CONTRACT PRICE shall be made as follows:

 

(a)   First Instalment

 

U.S. Dollars Twenty Nine Million Forty Eight Thousand only (US$29,048,000) shall be paid within four (4) business days of receipt by the BUYER of an original refund guarantee issued by the SHINHAN BANK of Korea (hereinafter called the “SHINHAN”) in the form annexed hereto as Exhibit “A”.

 

Under this CONTRACT, in counting the business days, only Saturdays and Sundays are excepted. When a due date falls on a day when banks are not open for business in New York, N.Y., U.S.A, Korea, London and Greece, such due date shall fall due upon the first business day next following.

 

(b)   Second Instalment

 

U.S. Dollars Twenty Nine Million Forty Eight Thousand only (US$29,048,000) shall be paid within six (6) months from the date of signing this CONTRACT.

 

(c)   Third Instalment

 

U.S. Dollars Seven Million Two Hundred Sixty Two Thousand only (US$7,262,000) shall be paid within three (3) business days of receipt by the BUYER of an e-mailed or facsimiled advice from the BUILDER upon keel laying.

 

(d)   Fourth Instalment

 

U.S. Dollars Seven Million Two Hundred Sixty Two Thousand only (US$7,262,000) shall be paid within three (3) business days of receipt by the BUYER of an e-mailed or facsimiled advice from the BUILDER upon launching.

 

(e)   Fifth Instalment

 

U.S. Dollars Seventy Two Million Six Hundred Twenty Thousand only (US$72,620,000) plus or minus any increase or decrease due to modifications and/or adjustment, if any, arising prior to delivery of the VESSEL of the CONTRACT PRICE under Articles III and V of this CONTRACT shall be paid to the BUILDER concurrently with the delivery of the VESSEL. (The date stipulated for payment of each of the five instalments mentioned above is hereinafter in this Article and in Article XI referred to as the “DUE DATE” of that instalment.)

 

It is understood and agreed upon by the BUILDER and the BUYER that all payments under the provisions of this Article shall not be delayed or withheld by the BUYER due to any dispute or disagreement of whatsoever nature arising between the BUILDER and the BUYER. Should there be any dispute in this connection, the matter shall be dealt with in accordance with the provisions of arbitration in Article XIII hereof.”

 

 

In consideration of the aforesaid adjustment of the payment terms of the Contract, interest shall accrue at the rate of six per cent (6%) per annum. In relation to each Post Delivery Instalment from the date on which such Post-Delivery Instalment was originally due under the Contract but for the provisions of this Agreement up to the date of actual payment.

 

Notwithstanding clause 2.1, the Buyer has an option to pay the fourth instalment and part of the fifth instalment earlier than the expected due date of such instalments as described in the below table.

 

	
Principal
   (Adjusted
   amount)
    	
 
    	
Original payment
   terms
    	
 
    	
Adjusted payment
   terms
    	
 
    	
Due date of Interest
    
	
US$ 29,048,000
    	
 
    	
to be paid within three (3) business days from event of first   steel cutting
    	
 
    	
to be paid upon delivery (or earlier at the Buyer’s option)
    	
 
    	
to be paid upon delivery together with fifth (5th) installment
    
	
US$ 14,524,000
    	
 
    	
to be paid within three (3) business days from event of keel   laying
    	
 
    	
to be paid upon delivery (or earlier at the Buyer’s option)
    	
 
    	
to be paid upon delivery together with fifth (5th) installment
    
	
US$7,262,000
    	
 
    	
to be paid within three (3) business days from event of keel   laying
    	
 
    	
to be paid within three (3) business days from event of   launching (or earlier at the Buyer’s option)
    	
 
    	
to be paid together with fourth (4th) installment within three   (3) business days from the event of launching
    

 

All payments of interest shall accrue from day-to-day and shall be calculated on the basis of the actual number of days elapsed in a three hundred and sixty (360) day year.

 

For the sake of clarity, the Builder shall notify the Buyer of the exact amount of interest according to the relevant provisions of the Contract.”

 

3                                          POSTPONEMENT OF PAYMENT OF INSTALMENTS

 

3.1                                 The final instalment of the Contract Price under the Contract will be payable by the Buyer as the delivery instalment (the “Delivery Instalment”) and the post delivery instalment (the “Post Delivery Instalment”).

 

3.2                                 The Delivery Instalment in the sum of U.S. Dollars Fifty Million Nine Hundred and Four Thousand Eight Hundred and Sixty (US$50,904,860) plus any increase or minus any decrease due to modifications and/or adjustment, if any, to the Contract Price under Articles III and V of the Contract arising prior to delivery of the Vessel shall be paid by the Buyer on the delivery of the Vessel which is scheduled on February 1, 2011] or such later date as is permissible pursuant to the Contract (the “Delivery Instalment Due Date”).

 

3.3                                 The Post Delivery Instalment amounting to U.S. Dollars Twenty One Million Seven Hundred and Fifteen Thousand One Hundred and Forty (US$21,715,140) shall be paid over a period of four (4) years from the actual delivery of the Vessel in six (6) equal instalments the first due

 

 

date being 1st August 2012 and the remaining six instalments payable semi-annually thereafter as listed in Table 1. (each a “Post Delivery Instalment Due Date”). Interest shall accrue at the rate of eight per cent (8%) per annum on all of the outstanding balance of the Post Delivery Instalment which shall be paid by the Buyer semi-annually the first due date being 1st August 2011 and at six month intervals thereafter as listed in Table 1. The rate of interest shall be increased to ten per cent (10%) per annum in the event of default.

 

<Repayment schedule for the Post Delivery Instalment based on the the delivery of the Vessel on February 1, 2011.>

 

Table 1

 

	
PAYMENT
    	
 
    	
DUE DATE
    	
 
    	
PRINCIPAL(A)
    	
 
    	
INTEREST(B)
    	
 
    	
TOTAL(A+B)
    	
 
    
	
1st
    	
 
    	
1-Aug-11
    	
 
    	
—
    	
 
    	
$
    	
873,431
    	
 
    	
$
    	
873,431
    	
 
    
	
 
    	
 
    	
1-Feb-12
    	
 
    	
—
    	
 
    	
$
    	
887,907
    	
 
    	
$
    	
887,907
    	
 
    
	
 
    	
 
    	
1-Aug-12
    	
 
    	
$
    	
3,619,190
    	
 
    	
$
    	
878,256
    	
 
    	
$
    	
4,497,446
    	
 
    
	
2nd
    	
 
    	
1-Feb-13
    	
 
    	
$
    	
3,619,190
    	
 
    	
$
    	
739,923
    	
 
    	
$
    	
4,359,113
    	
 
    
	
3rd
    	
 
    	
1-Aug-13
    	
 
    	
$
    	
3,619,190
    	
 
    	
$
    	
582,287
    	
 
    	
$
    	
4,201,477
    	
 
    
	
4th
    	
 
    	
1-Feb-14
    	
 
    	
$
    	
3,619,190
    	
 
    	
$
    	
443,953
    	
 
    	
$
    	
4,063,143
    	
 
    
	
5th
    	
 
    	
1-Aug-14
    	
 
    	
$
    	
3,619,190
    	
 
    	
$
    	
291,143
    	
 
    	
$
    	
3,910,333
    	
 
    
	
6th
    	
 
    	
1-Feb-15
    	
 
    	
$
    	
3,619,190
    	
 
    	
$
    	
147,984
    	
 
    	
$
    	
3,767,174
    	
 
    
	
TOTAL
    	
 
    	
 
    	
 
    	
$
    	
21,715,140
    	
 
    	
$
    	
4,844,884
    	
 
    	
$
    	
26,560,024
    	
 
    

 

The figures in above Table 1 shall be adjusted in accordance with Clause 3.3 if the actual delivery of the Vessel is other than February 1, 2011.

 

3.4                                 It is understood and agreed by the Builder and the Buyer that no payments to be made by the Buyer pursuant to this Clause 3 shall be delayed or withheld by the Buyer due to any dispute or disagreement of whatsoever nature arising between the Builder and the Buyer. If a Due Date would otherwise fall on a day which is not a Business Day, that Due Date will instead be on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

 

3.5                                 The Buyer shall make all payments without any Tax Deduction, unless a Tax Deduction is required by law.

 

3.6                                 If a Tax Deduction is required by law to be made by the Buyer, the amount of the payment due from the Buyer shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.

 

3.7                                 The Buyer may at any time, if it gives the Builder not less than 15 days’ prior notice, prepay the whole or part of the Post Delivery Instalment, but if in part then the Buyer shall state which of the Promissory Notes is to be prepaid and such Promissory Note shall be prepaid in full and not in part. Any prepayment shall be made together with accrued interest.

 

3.8                                 Article X. 8 of the Contract shall be amended and shall hereafter be read so that at the end of the first paragraph the following wording is inserted:-

 

 

“In the event that the BUYER pays to the BUILDER any amount in excess of the pre-delivery instalments, the BUILDER will procure that Shinhan Bank of Korea will amend its letter of guarantee (or arrange for the issue of a replacement) so as to include such excess amount.

 

4                                          SECURITIES TO BE FURNISHED BY THE BUYER

 

As a condition precedent to the effectiveness of this Agreement the Buyer shall furnish the Builder with securities as follows upon the delivery of the Vessel.

 

4.1                                 Promissory Notes

 

The Buyer shall execute and deliver to the Builder six (6) promissory notes (each individually a “Promissory Note” and collectively the “Promissory Notes”) as follows:

 

(a)                                  Each Promissory Note shall relate to an instalment under the Post Delivery Instalment and shall be for a payment of an amount of principal (A) and interest (B) as listed in Table 1 next to the corresponding instalment to which that Promissory Note relates.

 

(b)                                 Each Promissory Note shall be in the form annexed hereto as Exhibit “A”.

 

4.2                                 Letter of Guarantee

 

The Buyer shall furnish the Builder with an unconditional letter of guarantee, being in the form annexed hereto as Exhibit “B” and in respect of each Promissory Note issued by the Buyer (each individually a “Letter of Guarantee” and collectively the “Letters of Guarantee”) each such Letter of Guarantee to be duly executed and delivered by the Guarantor guaranteeing the payment by the Buyer of the principal sums and interest specified in the relevant Promissory Note.

 

4.3                                 Second Preferred Mortgage on the Vessel

 

The Buyer shall execute and deliver to the Builder a second preferred Liberian mortgage over the Vessel in the maximum principal amount of US$28,229,682 in form and substance satisfactory to the Builder (the “Mortgage”)  as security for (i) the Buyer’s obligations under the Promissory Notes and (ii) the obligations of the Buyer under this Agreement.

 

4.4                                 Second Priority Assignment

 

The Buyer shall execute and deliver to the Builder a second priority assignment of its interests in the earnings, insurances and requisition compensation of the Vessel in form and substance satisfactory to the Builder (the “Assignment”)  as security for (i) the Buyer’s obligations under the Promissory Notes and (ii) the obligations of the Buyer under this Agreement.

 

4.5                                 Time Charter Assignment

 

The Buyer shall execute and deliver to the Builder a second priority assignment of its interests in the Time Charter of the Vessel in form and substance satisfactory to the Builder (the “Time Charter Assignment”)  as security for (i) the Buyer’s obligations under the Promissory Notes and (ii) the obligations of the Buyer under this Agreement.

 

 

5                                          OTHER CONDITIONS PRECEDENT

 

The Buyer shall, on or prior to delivery of the Vessel, provide the following to the Builder:

 

5.1                                 satisfactory evidence that the earnings, insurance and requisition compensation of the Vessel are free from encumbrances other than the First Security.

 

5.2                                 satisfactory evidence that the Vessel is insured and classed as provided by the terms of the Mortgage and that the Mortgage is duly registered on the Liberian Ship Register;

 

5.3                                 certified true copies of the constitutional documents of the Buyer and the Guarantor together with certified true copies of board resolutions of the Buyer and certified extract of the standing resolutions of the Guarantor and a power of attorney authorising the execution of this Agreement, the Second Security, the Promissory Notes and the Letters of Guarantee and to which the Buyer and the Guarantor is, or will be a party;

 

5.4                                 certified true copies of all licenses, consents or approvals which may be required by the Buyer or the Guarantor in connection with the execution and validity and enforceability of any of the documents to which they are a party;

 

5.5                                 originals or certified true copies from the Buyer’s and the Guarantor’s agents for receipt of service and proceedings accepting their appointment under each of the documents in which they are to be appointed as agents;

 

5.6                                 the Intercreditor Deed duly signed;

 

5.7                                 satisfactory legal opinions addressed to the Builder on matters of Liberian and Marshall Islands law relating to the due execution of all documents by the Buyer and the Guarantor and the validity of this Agreement, the Promissory Notes, the Letter of Guarantee and all of the Second Security executed in favour of the Builder.

 

6                                          DEFAULT INTEREST

 

If the Builder does not receive on the due date any sum due from the Buyer under this Agreement (or any other agreement entered into by the Buyer in connection with this Agreement), the Buyer shall on demand pay interest on such sum from and including the due date to the date of actual payment (as well as before judgment) at the rate per annum of ten per cent (10%).

 

7                                          CALCULATION OF INTEREST

 

All payments of interest hereunder shall accrue from day-to-day and shall be calculated on the basis of the actual number of days elapsed in a three hundred and sixty (360) day year.

 

8                                          GENERAL UNDERTAKINGS

 

The Buyer further undertakes that, throughout the period from the date hereof until the full amount of the Delivery Instalment and Post Delivery Instalment together with accrued interest thereon has been paid to the Builder:

 

8.1                                 it will ensure that at all times the claims of the Builder against it under this Agreement rank at least pari passu with the claims of all its other unsecured creditors save those whose claims are preferred by any bankruptcy, insolvency or other similar laws of general application;

 

 

8.2                                 it will ensure that at all times the insured value of the Vessel in the hull and machinery policies shall in no event be less than one hundred and twenty five per cent (125%) of, the contract price under the Contract; the Buyer will (i) upon the Builder’s written request provide the Builder with copies of the said insurance policies; and (ii) notify the Builder promptly and in writing of any changes to the insured value of the Vessel whether made pursuant to this undertaking or otherwise;

 

8.3                                 it shall procure that the interest of the Builder shall be endorsed on the relevant hull and machinery policy by incorporation of a loss payable clause (in a form agreed by the Builder) and notice of assignment of insurances signed by the Buyer and that the Builder shall be furnished with proforma copies thereof and a letter of undertaking in such form as is customary;

 

8.4                                 it shall procure that the interest of the Builder shall be endorsed on the Certificate of Entry or policy of the protection and indemnity and/or war risks association by incorporation of a loss payable clause (in a form agreed by the Builder) and notice of assignment of insurances signed by the Buyer and that the Builder shall be furnished with a copy of the certificate of entry or policy and a letter of undertaking in such form as is customary by the P&I association;

 

8.5                                 it shall ensure that the earnings, insurances and requisition compensation of the Vessel are free from encumbrances other than the First Security and Second Security;

 

8.6                                 it shall not create or permit to subsist any mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect over any of its assets other than the First Security and Second Security and liens arising in the ordinary course of business or by operation of law.

 

9                                          EVENTS OF DEFAULT

 

Each of the following events shall constitute an event of default (each an “Event of Default”) (whether such event shall occur or come about voluntarily or involuntarily or by operation of law or regulation or pursuant to, or in compliance with, any judgment, decree or order of any court or other authority):

 

9.1                                 The Buyer fails to pay any amount (whether in respect of principal, interest or otherwise) due and payable by the Buyer to the Builder under this Agreement or any of the Promissory Notes on the due date and such failure is not remedied within 15 days; or

 

9.2                                 the Buyer or the Guarantor defaults in the due performance and discharge of any of its other duties or liabilities under this Agreement or the Transaction Documents to which it is a party unless such failure, in the Builder’s opinion, is capable of remedy and is remedied within 30 days of such failure; or

 

9.3                                 any order shall be made by any competent court or other competent authority or a resolution shall be passed by the Buyer or the Guarantor, for the appointment of a liquidator of, or otherwise for the winding-up or dissolution of the Buyer or the Guarantor, except for the purpose of amalgamation or re-organisation (not involving or arising out of insolvency) the terms of which shall have received the prior written approval of the Builder; or

 

9.4                                 an administrator, receiver, administrative receiver, manager, trustee or similar official is appointed (and such appointment is not cancelled or withdrawn within 30 days) for all or a

 

 

part of the assets and undertaking of the Buyer having a value of at least $500,000 or the Guarantor having a value of at least $5,000,000; or

 

9.5                                 it becomes unlawful for the Buyer or the Guarantor to perform and discharge any of its duties and liabilities contained in this Agreement and/or the Transaction Documents to which it is a party or for the Builder to exercise any of its rights and powers under this Agreement and/or the Transaction Documents; or

 

9.6                                 anything is done or omitted to be done by the Buyer or the Guarantor which materially prejudices the security under the second security and has not been cured within 30 days of the builder giving notice thereof to the Buyer; or

 

9.7                                 the First Loan is declared due and payable prior to its stated maturity by reason of an event of default (howsoever defined), or

 

9.8                                 an event of default occurs under the Shipbuilding Contract as amended in respect of Hull No. S458.

 

10                                    POWERS ON DEFAULT

 

10.1                           Upon the occurrence of an Event of Default, the Builder may, by notice to the Buyer, declare that the Post Delivery Instalment together with accrued interest is either immediately due and payable or payable on demand, whereupon the Post Delivery Instalment together with accrued interest shall become immediately due and payable or (as the case may be) payable on demand being made by the Builder.

 

10.2                           In addition the Builder may take any other action, exercise any other right or pursue any other remedy conferred upon the Builder by this Agreement and/or the Transaction Documents or by any applicable law or regulation or otherwise as a consequence of such Event of Default.

 

10.3                           Save for the amendments contained herein, all other terms and conditions of the Contract shall remain valid and in full force.

 

10.4                           The Builder’s rights under this Clause are subject to the provisions of the Intercreditor Deed.

 

11                                    TOTAL LOSS

 

Following the occurrence of a Total Loss with respect to the Vessel, the Post Delivery Instalment together with accrued interest on the Post Delivery Instalment shall become due and payable on the earlier of (i) 120 days after such Total Loss has occurred or is deemed to have occurred, and (ii) the day on which insurance proceeds or other compensation monies in respect of the Total Loss have been received by the party entitled thereto.

 

12                                    [NOT USED]

 

13                                    COSTS AND EXPENSES

 

The Buyer shall promptly on demand pay the Builder the amount of all costs and expenses (including legal fees) reasonably incurred by the Builder in connection with the negotiation, preparation, printing and execution of this Agreement and any other documents referred to in this Agreement; and any other documents executed after the date of this Agreement.

 

 

14                                    CONFIDENTIALITY

 

This Agreement shall be kept strictly private and confidential and shall not be disclosed to any other third party. Notwithstanding the foregoing, disclosure is permitted (i) to the Buyer’s and Guarantor’s financiers and potential financiers, (ii) to the Buyer’s and Guarantor’s shareholders and affiliates, (iii) to Buyer’s and Guarantor’s legal and financial advisers and (iv) as may be required by law (including by virtue of rules and regulations of any securities exchange authorities).

 

15                                    ENTIRE AGREEMENT

 

This Agreement shall constitute an integral part of the Contract and shall constitute the only and entire agreement between the Parties with respect to the subject matter hereof and unless otherwise expressly agreed between the Parties, all other agreements, oral or written, made and entered into between the Parties prior to the execution of this Agreement shall be null and void.

 

16                                    ENFORCEMENT AND JURISDICTION

 

This Agreement and any non-contractual obligations arising in connection with this Agreement is governed by and construed in accordance with English law.

 

16.1                           The High Court in London England has exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement) (a “Dispute”).

 

16.2                           The Parties agree that the High Court in London England is the most appropriate and convenient court to settle Disputes and accordingly no Party will argue to the contrary.

 

16.3                           Clause 15.2 is for the benefit of the Builder only. As a result, the Builder shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.

 

16.4                           To the extent allowed by law, the Builder may take concurrent proceedings in any number of jurisdictions.

 

16.5                           Without prejudice to any other mode of service allowed under any relevant law, the Buyer:

 

16.5.1                  irrevocably appoints Danaos Management Consultants whose registered office is at 4 Staples Inn, Holborn, London WC1V 7QU as its agent for service of process in relation to any proceedings before the English courts in connection with this Agreement or any Transaction Document; and

 

16.5.2                  agree that failure by a process agent to notify any Buyer of the process will not invalidate the proceedings concerned.

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed on the day and year first above written.

 

 

	
SIGNATURES
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
For   and on behalf of
    	
 
    	
 
    
	
CELLCONTAINER   (NO. 6) CORP.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Zoi Lappa
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Zoi   Lappa
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Attorney-in-Fact
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
For   and on behalf of
    	
 
    	
 
    
	
HYUNDAI   SAMHO HEAVY INDUSTRIES CO., LTD.
    	
 
    	
In   witness M. Papanikolaou
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/ Michalis Papanikolaou
    
	
By:
    	
/s/   E.C. Han
    	
 
    	
MICHALIS PAPANIKOLAOU

ATTORNEY AT LAW

DANAOS SHIPPING CO., LTD.
   14, AKTI KONDYLI
   118 52 PIRAEUS
    
	
 
    	
 
    	
 
    
	
Name:
    	
E.C.   Han
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Attorney-in-Fact
    	
 
    

 

 

EXHIBIT A

PROMISSORY NOTE NO.       

 

	
US$
    	
Date:                     20    
    

 

For value received, Cellcontainer (No. 6) Corp. a corporation duly organized and existing under the laws of Liberia having its registered office at 80 Broad Street, Monrovia, Liberia hereby unconditionally promises to pay on                      to Hyundai Samho Heavy Industries Co., Ltd. or its nominee or its assignees, or any other holder hereof from time to time or its order the principal sum of US$                                    only, and to pay interest on the said principal sum from and including [·] at the rate of eight per cent (8%) per annum, the first payment of interest to be due and payable on [·]  and thereafter payable semi-annually on the [·] and on the [·] of each and every year, until maturity (whether by acceleration or otherwise) and thereafter at the rate of ten per cent (10%) per annum until the principal sum and the interest thereon are fully paid.

 

Interest shall be calculated on the basis of the actual days elapsed and a year of three hundred sixty (360) days. Both principal and interest shall be payable in United States Dollars in immediately available funds at the account of the [Korea Exchange Bank, Seoul, Korea] (Account No. [·]) with [JP Morgan Chase Bank, New York, U.S.A.] without any deduction or withholding for or on account of any present or future taxes or other charges.

 

If the maker of this note is required to make any such deduction or withholding from any payment hereunder, the maker shall pay such additional amount as may be necessary in order that the actual amount received after deduction or withholding shall be equal to the amount that would have been received if such deduction or withholding were not required.

 

This note is one of a series of six (6) promissory notes in the aggregate principal amount of US$[    ] of like form and tenor except their respective numbers, principal amounts and dates of maturity (together the “Series Notes”). Each of said notes is secured by a letter of guarantee issued by DANAOS CORPORATION a corporation duly organized and existing under the laws of [   ] having its registered office at [    ].

 

In the event of a default in the payment of the principal when the same shall become due and payable, then interest at the rate of ten per cent (10%) per annum on the principal and any accrued interest from the due date to the date of payment shall be due and payable together with the principal and accrued interest.

 

In the event default shall be made in the payment of the principal or interest on this note, or in the payment of the principal of or interest on any of the other Series Notes, as and when the same shall become due and payable and such default shall continue for a period of fifteen (15) days, the holder of this note may at its option declare the principal of and accrued interest on this note to be forthwith due and payable, whereupon the same shall be forthwith due and payable, and the holder hereof shall have the other remedies herein or by law provided.

 

The maker of this note may, if it gives the holder not less than fifteen (15) days’ prior notice, prepay the whole of this note by payment of the principal hereof together with accrued interest hereon to and including the date of prepayment, provided, however that there shall be no default in payment of principal or interest on this note or on any of the other Series Notes as of the date of such prepayment.

 

 

This note may be transferred or assigned by the holder of this note to any bank with the prior notice to the maker.

 

The maker unconditionally agrees to promptly pay to and reimburse the holder hereof on demand any and all reasonable costs and expenses including, without limitation to, reasonable attorney’s fees incidental to the enforcement or attempted enforcement of this note.

 

The holder of this note shall be under no obligation to make presentment, protest, demand or notice of any kind whatsoever for the payment of this note.

 

The maker and the endorsers of this note hereby waive the right to interpose any defense, set-off or counterclaim of any nature or description in any action or proceeding arising on, out of, under or by reason of this note.

 

The maker hereby authorizes and empowers the holder of this note to acknowledge on the maker’s behalf by endorsement the receipt of the payment or prepayment of the principal sum or interest thereon. Upon full payment of all sums payable on this note and the other Series Notes, the holder of this note shall immediately return this note to the maker with such endorsement to the effect that this note has been fully paid.

 

This note and any non-contractual obligations arising in connection with this note shall be governed by and construed in accordance with the laws of England. The maker and the endorsers hereby consent to any legal action or proceeding in relation to this note being brought in the High Court in London, England and hereby irrevocably waives any immunity from suit, attachment, (before or after judgment) or execution on a judgment to which they or their property may be entitled.

 

The maker and the endorsers hereby irrevocably submit to the exclusive jurisdiction of the courts of England.

 

Without prejudice to any other mode of service allowed under any relevant law, the undersigned:

 

irrevocably appoints [   ] whose registered office is at [   ] as its agent for service of process in relation to any proceedings before the High Court in London, England in connection with this note; and

 

agrees that failure by a process agent to notify the undersigned of the process will not invalidate the proceedings concerned.

 

The maker hereby certifies and declares that all acts, conditions and things required to be done and performed and to have happened precedent to the creation and issuance of this note, and to constitute this note the valid obligation of the maker in accordance with its terms, have been done and performed and have happened in due and strict compliance with all applicable laws and regulation.

 

IN WITNESS WHEREOF, the undersigned has caused this note be signed in its corporate name by its representative thereunto duly authorized on the day and year first above written.

 

 

	
 
    	
For and on behalf of
    
	
 
    	
 
    
	
 
    	
CELLCONTAINER (NO. 6) CORP.]
    
	
 
    	
By
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

 

EXHIBIT B

 

	
 
    	
Date:                20     
    

 

Hyundai Samho Heavy Industries Co., Ltd.
 1700, Yongdang-Ri, Samho-Eup,

Youngam-Gun, Chollanam-Do,

KOREA

 

LETTER OF GUARANTEE NO.     

 

Gentlemen:

 

In consideration of your completing and delivering one (1) 10,100 TEU Class Container Carrier, your Hull No. 461 (hereinafter called the “Vessel”), to CELLCONTAINER (NO. 6) CORP. (hereinafter called the “Buyer”), on deferred payment basis, under a certain shipbuilding Contract dated 9 November 2007, as amended, entered into by and between you and the Buyer, the undersigned, as primary obligor and not as surety merely, does hereby irrevocably, absolutely and unconditionally guarantee jointly and severally the due and punctual payment (whether at the stated maturity, by acceleration or otherwise) by the Buyer of the promissory note No.       in the principal amount of US$                        to be due and payable on                            to be issued by the Buyer to the order of yourself upon delivery of the Vessel pursuant to the said shipbuilding Contract, and also guarantee the due and punctual payment by the Buyer of interest on this promissory note No.       , the first payment of interest to be due and payable on [   ] and thereafter payable semi-annually, at the rate of eight per cent (8%) per annum until maturity (by acceleration or otherwise) and thereafter at the rate of ten per cent (10%) per annum until full payment. Interest shall be calculated on the basis of the actual days elapsed and a year of three hundred sixty (360) days.

 

The undersigned hereby waives the right to interpose any defense, set-off or counter-claim of any nature or description in any action or proceedings arising on, out of, under or by reason of the notes or this letter of guarantee or said shipbuilding Contract.

 

The Promissory Note No.      is one of a series of six (6) Promissory Notes in the aggregate principal amount of US$ [   ].

 

In the event that the Buyer fails to pay the said Promissory Note and/or interest thereon on the maturity date (by acceleration or otherwise) in accordance with the terms of the said promissory notes, the undersigned will pay to you the amounts due immediately upon receipt by us of written demand from you including a statement that the Buyer is in default of payment of the said promissory notes and/or interest thereon, without requesting you to take any or further procedure or step against the Buyer or with respect to the promissory notes and/or interest thereon, together with default interest on any such amounts demanded by you as aforesaid from the due date thereof until the payment in full of such amounts at the rate of ten per cent (10%) per annum payable in accordance with the terms of the said promissory notes and any and all reasonable costs and expenses including, without limitation, reasonable attorney’s fees incidental to the enforcement or attempted enforcement of this guarantee.

 

The undersigned hereby consents to any renewals, changes, extensions or partial payments of the promissory notes or the indebtedness for which they are given without prior notice to us, and consents that no such renewals, changes, extensions or partial payments shall discharge any party to the promissory note or us from any liability thereon or hereon in whole or in part (other than to the extent of any such partial prepayment).

 

 

The undersigned hereby agrees that this guarantee and undertaking hereunder shall be assignable to and shall inure to the benefit of the holder of the promissory note No.     as if each of them was originally named herein.

 

The payment by the undersigned under this guarantee shall be made in United States Dollars in immediately available funds by telegraphic transfer to the account of the [Korea Exchange Bank, Seoul, Korea] (Account No. [·]) with [JP Morgan Chase Bank, New York, U.S.A.] in favour of you or your assignee without deduction, withholding or set-off. In the event that any deduction or withholding is imposed on any payment to be made hereunder by law or by any taxing authority, the undersigned agrees to pay such additional amount as may be necessary in order that the actual amount received after deduction or withholding shall be equal to the amount that would have been received if such deduction or withholding were not required after allowance for any increase in taxes or charges payable by virtue of the receipt of such additional amount.

 

This letter of guarantee shall come into full force and effect upon delivery of the Vessel by you to the Buyer and shall continue in force and effect until the full payment of the promissory note No.    and interest thereon whichever occurs last.

 

The obligation of the undersigned hereunder is joint and several with any other guarantee or security and absolute and unconditional irrespective of any legal limitation, disability, incapacity or other circumstance relating to the Buyer or any other person, or any amendment or supplement to the said shipbuilding Contract, the promissory notes or any other document, instrument or agreement contemplated therein or of the genuineness, legality, validity, regularity or enforceability of the said shipbuilding Contract, the Promissory Notes or any other documents, instruments or agreements contemplated therein.

 

This shall be a continuing guarantee and shall cover and secure any ultimate balance owing under the promissory note No.    , but you shall not be obliged to exhaust your recourse against the Buyer or the securities which you may hold before being entitled to payment from the undersigned of the obligation hereby guaranteed.

 

The undersigned hereby represents and warrants that (A) the undersigned is a company duly organised and validly existing and in full compliance with the laws of [   ] and has full legal right, power and authority to execute this letter of guarantee and to perform its obligations hereunder, (B) it has taken all appropriate and necessary corporate action to authorize the issuance of this letter of guarantee and the performance by it of its obligations hereunder, (C) the execution, delivery and performance of this letter of guarantee and the covenants herein contained will not violate or contravene any provisions of any applicable treaty, law or regulation or any judgment order or decree of any court, or governmental agency, or violate or result in breach of its constitutional documents, (D) this letter of guarantee constitutes the legal, valid and binding obligations of the undersigned enforceable in accordance with its terms subject to overriding principles, if any, of insolvency law, and (E) it has obtained all necessary consents, licenses, approvals, and authorisations, and registrations or declarations, with any governmental authority required in connection with the validity and enforceability of its guarantee and the same are in full force and effect.

 

This letter of guarantee and any non-contractual obligations arising in connection with this letter of guarantee shall be governed by and construed in accordance with the laws of England. The undersigned hereby irrevocably consents that any legal action or proceeding against the undersigned, or any of its property, with respect to this letter of guarantee may be brought in the High Court in London, England, and by execution and delivery of this letter of guarantee the undersigned hereby accepts in regard to any such action or proceeding, for itself and in respect of its property, generally and unconditionally the exclusive jurisdiction of the aforesaid court.

 

 

Notwithstanding anything to the contrary contained in this letter of guarantee or any of the documents executed as security therefore, the agreement, obligations and liabilities of the undersigned herein contained are joint and several and shall be construed accordingly. The undersigned agrees and consents to be bound by this letter of guarantee notwithstanding that this letter of guarantee may be invalid or unenforceable against the undersigned, whether or not the deficiency is known to yourself. You shall be at liberty to release the undersigned from this letter of guarantee and to compound with or otherwise vary or agree to vary the liability or to grant time and indulgence to make other arrangements with the undersigned without prejudicing or affecting the rights and remedies of yourself against the other undersigned.

 

Without prejudice to any other mode of service allowed under any relevant law, the undersigned irrevocably appoints [   ] whose registered office is at [   ] as its agent for service of process in relation to any proceedings before the High Court in London, England in connection with this letter of guarantee; and

 

agrees that failure by a process agent to notify the undersigned of the process will not invalidate the proceedings concerned.

 

The undersigned represents and warrants that this letter of guarantee is a commercial act and that the undersigned is not entitled to claim immunity from legal proceedings with respect to itself or any of its properties or assets on the grounds of sovereignty or otherwise under any law. To the extent that the undersigned or any of its properties or assets has or hereafter may acquire any right to immunity from set-off, legal proceedings, attachment prior to judgment, other attachment or execution of judgment on the grounds of sovereignty or otherwise, the undersigned for itself and its properties and other assets hereby irrevocably waives such right to immunity in respect of its obligations under this letter of guarantee.

 

After this letter of guarantee shall have expired as aforesaid, you will return the same to the undersigned without any request from the undersigned.

 

IN WITNESS WHEREOF, the undersigned has caused this letter of guarantee to be executed and delivered by its duly authorised representative on the day and year above written.

 

	
Yours very truly,
    	
 
    
	
 
    	
 
    
	
 
    	
for and on behalf of
    
	
 
    	
 
    
	
 
    	
DANAOS CORPORATION. 
    
	
 
    	
By
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title :
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
for and on behalf of
    

 

	
  

  	
  AGREEMENT This
  Agreement is made on this 27th day of September 2010 by and between: (1)
  MEGACARRIER (N0.1) CORP. (the “Buyer”); and (2) HYUNDAI SAMHO HEAVY
  INDUSTRIES CO., LTD. (the “Builder”), (hereinafter the parties referred to
  individually as the “Party” and collectively as the “Parties”), to amend and
  supplement the Contract as defined hereinafter. WHEREAS: A. The Buyer and the
  Builder entered into a shipbuilding contract on 28 September, 2007 as amended
  and supplemented from time to time (the “Contract”) for the construction and
  sale of one (1) 12,600 TEU class container carrier, having the Builder’s Hull
  No S456 (the “Vessel”). B. The Buyer desires to postpone part of the final
  instalment of the Contract Price (as that term is defined in the Contract)
  until after delivery of the Vessel. C. The Buyer is willing to execute and
  deliver to the Builder the Mortgage, Assignment and the Time Charter
  Assignment (each as hereinafter defined) in respect of the Vessel as security
  for the payment of the postponed part of the final instalment referred to in
  Recital (B) above. D. Danaos Corporation (the “Guarantor”) is willing to
  execute and deliver to the Builder the Letter of Guarantee (as hereinafter
  defined) guaranteeing the payment of the postponed part of the final
  instalment referred to in Recital (B) above. E. The Builder is willing to
  agree to such deferral of part of the final instalment upon the terms and
  conditions herein below. NOW, THEREFORE, for good and valuable consideration
  the Parties hereby agree to enter into this AGREEMENT on the following terms
  and conditions. 1 DEFINITIONS “Assignment” has the meaning given in Clause
  3.4. “Business Day” means a day (other than a Saturday or Sunday) on which
  banks are open for general business in London, New York, Athens and Seoul.
  “Delivery Instalment” has the meaning given in Clause 2.1. “Delivery
  Instalment Due Date” has the meaning given in Clause 2.2. “Due Date” means
  the Delivery Instalment Due Date and any Post Delivery Instalment Due Date
  and in the plural means both of them. “Event of Default” has the meaning
  given in Clause 8. “First Loan” means the Loan made or to be made available
  to, amongst others, the Buyer by the First Mortgagee in respect of (inter
  alia) the Vessel. 

  

 

	
  

  	
  “First
  Mortgagee” means the agent that the lenders, Deutsche Schiffsbank
  Aktiengesellschaft, Credit Suisse AG, Emporiki Bank of Greece S.A., and
  Deutsche Bank AG Filiale Deutschlandgeschaft, will appoint. “First Security”
  means (i) the first preferred Liberian mortgage over the Vessel in
  favour of the First Mortgagee and (ii) the first priority assignment of
  the earnings, insurance and requisition compensation relating to the Vessel
  in favour of the First Mortgagee. “Intercreditor Deed” means the
  intercreditor deed between the First Mortgagee and the Builder under which
  the Post Delivery Instalment shall rank behind the claims of the First
  Mortgagee under the First Loan entered into or to be entered into between
  (inter alia) the First Mortgagee and the Buyer providing (inter alia) for the
  First Security. “Letter of Guarantee” has the meaning given in Clause 3.2.
  “Mortgage” has the meaning given in Clause 3.3. “Post Delivery Instalment”
  has the meaning given in Clause 2.1. “Post Delivery Instalment Due Date” has
  the meaning given in Clause 2.3. “Promissory Note” has the meaning given in
  Clause 3.1. “Second Security” means the Mortgage, the Assignment and the Time
  Charter Assignment. “Tax” means any tax (other than tax on the overall income
  of the Builder, levy, impost, duty or other charge or withholding of a
  similar nature (including any penalty or interest payable in connection with
  any failure to pay or any delay in paying any of the same). “Tax Deduction”
  means a deduction or withholding for or on account of Tax from a payment under
  a Transaction Document except for those imposed in Korea upon the payment of
  the Post Delivery Instalment. “Time Charterer” means Hyundai Merchant Marine
  Co., Ltd of Korea. “Time Charter” means the time charter dated 18
  October 2007 as amended by addendum no. 1 and addendum no. 2 between the
  Buyer and the Time Charterer. “Time Charter Assignment” has the meaning given
  in clause 3.5. “Total Loss” means: (a) actual, constructive,
  compromised, agreed or arranged total loss of the Vessel; (b) requisition for
  title or other compulsory acquisition of the Vessel otherwise than by
  requisition for hire; (c) capture, seizure, arrest, detention, or
  confiscation of the Vessel by any person, governmental authority or
  government or by persons acting or purporting to act on behalf of any
  government or any other person which deprives the Buyer of the use of the
  Vessel for 90 days or more after that occurrence; and (d) requisition
  for hire of the Vessel by any government or by persons acting or purporting
  to act on behalf of any government which deprives the Buyer of the use of the
  Vessel for a period of 90 days or more. “Transaction Documents” means the
  Contract, this Agreement, the Second Security, the Promissory Notes, the
  Letter of Guarantee, the Time Charter Assignment and the Intercreditor Deed. 

  

 

	
  

  	
  2 POSTPONEMENT
  OF PAYMENT OF INSTALMENTS 2.1 The final instalment of the Contract Price
  under the Contract will be payable by the Buyer as the delivery instalment
  (the “Delivery Instalment”) and the post delivery instalment (the “Post
  Delivery Instalment”). 2.2 The Delivery Instalment in the sum of U.S. Dollars
  Fifty Eight Million Four Hundred and Twenty Seven Thousand Two Hundred and
  Eighty (US$ 58,427,280) plus any increase or minus any decrease due to
  modifications and/or adjustment, if any, to the Contract Price under Articles
  III and V of the Contract arising prior to delivery of the Vessel shall be
  paid by the Buyer on the delivery of the Vessel which is scheduled on
  February 10, 2012 or such later date as is permissible pursuant to the
  Contract (the “Delivery Instalment Due Date”). 2.3 The Post Delivery
  Instalment amounting to U.S. Dollars Twenty Five Million Thirty Thousand
  Seven Hundred and Twenty (US$25,030,720) shall be paid over a period of four
  (4) years from the actual delivery of the Vessel in seven (7) equal
  instalments the first due date being 10 February 2013 and the remaining
  six instalments payable semi-annually thereafter as listed in Table 1. (each
  a “Post Delivery Instalment Due Date”). Interest shall accrue at the rate of
  eight per cent (8%) per annum on all of the outstanding balance of the Post
  Delivery Instalment which shall be paid by the Buyer semi-annually the first
  due date being 10 August 2012 and at six month intervals thereafter as
  listed in Table 1. The rate of interest shall be increased to ten per cent
  (10%) per annum in the event of default. <Repayment schedule for the Post
  Delivery Instalment based on the the delivery of the Vessel on
  February 10, 2011> Table 1 Instalment Post Delivery Instalment Due
  Date Principal(A) Interest (B) Total (A+B) 10-Aug-12 - $1,012,353 $1,012,353
  1st 10-Feb-13 $3,575,817 $1,023,478 $4,599,295 2nd 10-Aug-13 $3,575,817
  $862,963 $4,438,780 3rd 10-Feb-14 $3,575,817 $731,055 $4,306,872 4th
  10-Aug-14 $3,575,817 $575,309 $4,151,126 5th 10-Feb-15 $3,575,817 $438,633
  $4,014,450 6th 10-Aug-15 $3,575,817 $287,654 $3,863,471 7th 10-Feb-16
  $3,575,818 $146,211 $3,722,029 TOTAL $25,030,720 $5,077,656 $30,108,376 The
  figures in above Table 1 shall be adjusted in accordance with Clause 2.3 if
  the actual delivery of the Vessel is other than February 10, 2012. 

  

 

	
  

  	
  2.4 It is
  understood and agreed by the Builder and the Buyer that no payments to be
  made by the Buyer pursuant to this Clause 2 shall be delayed or withheld by
  the Buyer due to any dispute or disagreement of whatsoever nature arising
  between the Builder and the Buyer. If a Due Date would otherwise fall on a
  day which is not a Business Day, that Due Date will instead be on the next
  Business Day in that calendar month (if there is one) or the preceding
  Business Day (if there is not). 2.5 The Buyer shall make all payments without
  any Tax Deduction, unless a Tax Deduction is required by law. 2.6 If a Tax
  Deduction is required by law to be made by the Buyer, the amount of the payment
  due from the Buyer shall be increased to an amount which (after making any
  Tax Deduction) leaves an amount equal to the payment which would have been
  due if no Tax Deduction had been required. 2.7 The Buyer may at any time, if
  it gives the Builder not less than 15 days’ prior notice, prepay the whole or
  part of the Post Delivery Instalment, but if in part then the Buyer shall
  state which of the Promissory Notes is to be prepaid and such Promissory Note
  shall be prepaid in full and not in part. Any prepayment shall be made
  together with accrued interest. 2.8 Article X. 8 of the Contract shall
  be amended and shall hereafter be read so that at the end of the first
  paragraph the following wording is inserted:- “In the event that the BUYER
  pays to the BUILDER any amount in excess of the pre-delivery instalments, the
  BUILDER will procure that Wood Bank of Korea will amend its letter of
  guarantee (or arrange for the issue of a replacement) so as to include such
  excess amount. 3 SECURITIES TO BE FURNISHED BY THE BUYER As a condition
  precedent to the effectiveness of this Agreement the Buyer shall furnish the
  Builder with securities as follows upon the delivery of the Vessel. 3.1
  Promissory Notes The Buyer shall execute and deliver to the Builder seven (7) promissory
  notes (each individually a “Promissory Note” and collectively the “Promissory
  Notes”) as follows: (a) Each Promissory Note shall relate to an instalment
  under the Post Delivery Instalment and shall be for a payment of an amount of
  principal (A) and interest (B) as listed in Table 1 next to the
  corresponding instalment to which that Promissory Note relates. (b) Each
  Promissory Note shall be in the form annexed hereto as Exhibit “A”. 3.2
  Letter of Guarantee The Buyer shall furnish the Builder with an unconditional
  letter of guarantee, being in the form annexed hereto as Exhibit “B” and
  in respect of each Promissory Note issued by the Buyer (each individually a
  “Letter of Guarantee” and collectively the “Letters of Guarantee”) each such
  Letter of Guarantee to be duly executed and delivered by the Guarantor
  guaranteeing the payment by the Buyer of the principal sums and interest
  specified in the relevant Promissory Note. 

  

 

	
  

  	
  3.3 Second
  Preferred Mortgage on the Vessel The Buyer shall execute and deliver to the
  Builder a second preferred Liberian mortgage over the Vessel in the maximum
  principal amount of US$32,539,936 in form and substance satisfactory to the
  Builder (the “Mortgage”) as security for (i) the Buyer’s obligations
  under the Promissory Notes and (ii) the obligations of the Buyer under
  this Agreement. 3.4 Second Priority Assignment The Buyer shall execute and
  deliver to the Builder a second priority assignment of its interests in the
  earnings, insurances and requisition compensation of the Vessel in form and
  substance satisfactory to the Builder (the “Assignment”) as security for
  (1) the Buyer’s obligations under the Promissory Notes and (ii) the
  obligations of the Buyer under this Agreement. 3.5 Time Charter Assignment
  The Buyer shall execute and deliver to the Builder a second priority
  assignment of its interests in the Time Charter of the Vessel in form and
  substance satisfactory to the Builder (the “Time Charter Assignment”) as
  security for (i) the Buyer’s obligations under the Promissory Notes and
  (ii) the obligations of the Buyer under this Agreement. 4 OTHER
  CONDITIONS PRECEDENT The Buyer shall, on or prior to delivery of the Vessel,
  provide the following to the Builder: 4.1 satisfactory evidence that the
  earnings, insurance and requisition compensation of the Vessel are free from
  encumbrances other than the First Security. 4.2 satisfactory evidence that
  the Vessel is insured and classed as provided by the terms of the Mortgage
  and that the Mortgage is duly registered on the Liberian Ship Register; 4.3
  certified true copies of the constitutional documents of the Buyer and the
  Guarantor together with certified true copies of board resolutions of the
  Buyer and certified extract of the standing resolutions of the Guarantor and
  a power of attorney authorising the execution of this Agreement, the Second
  Security, the Promissory Notes and the Letters of Guarantee and to which the
  Buyer and the Guarantor is, or will be a party; 4.4 certified true copies of
  all licenses, consents or approvals which may be required by the Buyer or the
  Guarantor in connection with the execution and validity and enforceability of
  any of the documents to which they are a party; 4.5 originals or certified
  true copies from the Buyer’s and the Guarantor’s agents for receipt of service
  and proceedings accepting their appointment under each of the documents in
  which they are to be appointed as agents; 4.6 the Intercreditor Deed duly
  signed; 4.7 satisfactory legal opinions addressed to the Builder on matters
  of Liberian and Marshall Islands law relating to the due execution of all
  documents by the Buyer and the Guarantor and 

  

 

	
  

  	
  the validity of
  this Agreement, the Promissory Notes, the Letter of Guarantee and all of the
  Second Security executed in favour of the Builder. 5 DEFAULT INTEREST If the
  Builder does not receive on the due date any sum due from the Buyer under
  this Agreement (or any other agreement entered into by the Buyer in
  connection with this Agreement), the Buyer shall on demand pay interest on
  such sum from and including the due date to the date of actual payment (as
  well as before judgment) at the rate per annum of ten per cent (10%). 6
  CALCULATION OF INTEREST All payments of interest hereunder shall accrue from
  day-to-day and shall be calculated on the basis of the actual number of days
  elapsed in a three hundred and sixty (360) day year. 7 GENERAL UNDERTAKINGS
  The Buyer further undertakes that, throughout the period from the date hereof
  until the full amount of the Delivery Instalment and Post Delivery Instalment
  together with accrued interest thereon has been paid to the Builder: 7.1 it
  will ensure that at all times the claims of the Builder against it under this
  Agreement rank at least pari passu with the claims of all its other unsecured
  creditors save those whose claims are preferred by any bankruptcy, insolvency
  or other similar laws of general application; 7.2 it will ensure that at all
  times the insured value of the Vessel in the hull and machinery policies
  shall in no event be less than one hundred and twenty five per cent (125%)
  of, the contract price under the Contract; the Buyer will (i) upon the
  Builder’s written request provide the Builder with copies of the said
  insurance policies; and (ii) notify the Builder promptly and in writing
  of any changes to the insured value of the Vessel whether made pursuant to
  this undertaking or otherwise; 7.3 it shall procure that the interest of the
  Builder shall be endorsed on the relevant hull and machinery policy by
  incorporation of a loss payable clause (in a form agreed by the Builder) and
  notice of assignment of insurances signed by the Buyer and that the Builder
  shall be furnished with proforma copies thereof and a letter of undertaking
  in such form as is customary; 7.4 it shall procure that the interest of the
  Builder shall be endorsed on the Certificate of Entry or policy of the
  protection and indemnity and/or war risks association by incorporation of a
  loss payable clause (in a form agreed by the Builder) and notice of
  assignment of insurances signed by the Buyer and that the Builder shall be
  furnished with a copy of the certificate of entry or policy and a letter of
  undertaking in such form as is customary by the P&I association; 7.5 it
  shall ensure that the earnings, insurances and requisition compensation of
  the Vessel are free from encumbrances other than the First Security and
  Second Security; 7.6 it shall not create or permit to subsist any mortgage,
  charge, pledge, lien or other security interest securing any obligation of
  any person or any other agreement or arrangement having a similar effect over
  any of its assets other than the First Security and Second Security and liens
  arising a in the ordinary course of business or by operation of law. 

  

 

	
  

  	
  8 EVENTS OF
  DEFAULT Each of the following events shall constitute an event of default
  (each an “Event of Default”) (whether such event shall occur or come about
  voluntarily or involuntarily or by operation of law or regulation or pursuant
  to, or in compliance with, any judgment, decree or order of any court or
  other authority): 8.1 The Buyer fails to pay any amount (whether in respect
  of principal, interest or otherwise) due and payable by the Buyer to the
  Builder under this Agreement or any of the Promissory Notes on the due date
  and such failure is not remedied within 15 days; or 8.2 the Buyer or the
  Guarantor defaults in the due performance and discharge of any of its other
  duties or liabilities under this Agreement or the Transaction Documents to
  which it is a party unless such failure, in the Builder’s opinion, is capable
  of remedy and is remedied within 30 days of such failure; or 8.3 any order
  shall be made by any competent court or other competent authority or a
  resolution shall be passed by the Buyer or the Guarantor, for the appointment
  of a liquidator of, or otherwise for the winding-up or dissolution of the
  Buyer or the Guarantor, except for the purpose of amalgamation or
  re-organisation (not involving or arising out of insolvency) the terms of
  which shall have received the prior written approval of the Builder; or 8.4
  an administrator, receiver, administrative receiver, manager, trustee or
  similar official is appointed (and such appointment is not cancelled or
  withdrawn within 30 days) for all or a part of the assets and undertaking of
  the Buyer having a value of at least $500,000 or the Guarantor having a value
  of at least $5,000,000; or 8.5 it becomes unlawful for the Buyer or the
  Guarantor to perform and discharge any of its duties and liabilities
  contained in this Agreement and/or the Transaction Documents to which it is a
  party or for the Builder to exercise any of its rights and powers under this
  Agreement and/or the Transaction Documents; or 8.6 anything is done or
  omitted to be done by the Buyer or the Guarantor which materially prejudices
  the security under the second security and has not been cured within 30 days
  of the builder giving notice thereof to the Buyer; or 8.7 the First Loan is
  declared due and payable prior to its stated maturity by reason of an event
  of default (howsoever defined), or 8.8 an event of default occurs under the
  Shipbuilding Contract as amended in respect of Hull No. S457. 9 POWERS ON
  DEFAULT 9.1 Upon the occurrence of an Event of Default, the Builder may, by
  notice to the Buyer, declare that the Post Delivery Instalment together with
  accrued interest is either immediately due and payable or payable on demand,
  whereupon the Post Delivery Instalment together with accrued interest shall
  become immediately due and payable or (as the case may be) payable on demand
  being made by the Builder. 9.2 in addition the Builder may take any other
  action, exercise any other right or pursue any other remedy conferred upon
  the Builder by this Agreement and/or the Transaction Documents or by any
  applicable law or regulation or otherwise as a consequence of such Event of
  Default. 

  

 

	
  

  	
  9.3 Save for
  the amendments contained herein, all other terms and conditions of the
  Contract shall remain valid and in full force. 9.4 The Builder’s rights under
  this Clause are subject to the provisions of the lntercreditor Deed. 10 TOTAL
  LOSS Following the occurrence of a Total Loss with respect to the Vessel, the
  Post Delivery Instalment together with accrued interest on the Post Delivery
  Instalment shall become due and payable on the earlier of (i) 120 days
  after such Total Loss has occurred or is deemed to have occurred, and
  (ii) the day on which insurance proceeds or other compensation monies in
  respect of the Total Loss have been received by the party entitled thereto.
  11 [NOT USED] 12 COSTS AND EXPENSES The Buyer shall promptly on demand pay
  the Builder the amount of all costs and expenses (including legal fees)
  reasonably incurred by the Builder in connection with the negotiation,
  preparation, printing and execution of this Agreement and any other documents
  referred to in this Agreement; and any other documents executed after the
  date of this Agreement. 13 CONFIDENTIALITY This Agreement shall be kept
  strictly private and confidential and shall not be disclosed to any other
  third party. Notwithstanding the foregoing, disclosure is permitted
  (i) to the Buyer’s and Guarantor’s financiers and potential financiers,
  (ii) to the Buyer’s and Guarantor’s shareholders and affiliates,
  (iii) to Buyer’s and Guarantor’s legal and financial advisers and
  (iv) as may be required by law (including by virtue of rules and
  regulations of any securities exchange authorities). 14 ENTIRE AGREEMENT This
  Agreement shall constitute an integral part of the Contract and shall
  constitute the only and entire agreement between the Parties with respect to
  the subject matter hereof and unless otherwise expressly agreed between the
  Parties, all other agreements, oral or written, made and entered into between
  the Parties prior to the execution of this Agreement shall be null and void.
  15 ENFORCEMENT AND JURISDICTION This Agreement and any non-contractual
  obligations arising in connection with this Agreement is governed by and
  construed in accordance with English law. 15.1 The High Court in London
  England has exclusive jurisdiction to settle any dispute arising out of or in
  connection with this Agreement (including a dispute regarding the existence,
  validity or termination of this Agreement) (a “Dispute”). 15.2 The Parties
  agree that the High Court in London England is the most appropriate and
  convenient court to settle Disputes and accordingly no Party will argue to
  the contrary. 15.3 Clause 15.2 is for the benefit of the Builder only. As a
  result, the Builder shall not be prevented from taking proceedings relating
  to a Dispute in any other courts with jurisdiction. 

  

 

	
  

  	
  15.4 To the
  extent allowed by law, the Builder may take concurrent proceedings in any
  number of jurisdictions. 15.5 Without prejudice to any other mode of service
  allowed under any relevant law, the Buyer: 15.5.1 irrevocably appoints Danaos
  Management Consultants whose registered office is at 4 Staples Inn, Holborn,
  London WC1V 7QU as its agent for service of process in relation to any
  proceedings before the English courts in connection with this Agreement or
  any Transaction Document; and 15.5.2 agree that failure by a process agent to
  notify any Buyer of the process will not invalidate the proceedings
  concerned. IN WITNESS WHEREOF, the Parties have caused this Agreement to be
  duly executed on the day and year first above written. SIGNATURES For and on
  behalf of MEGACARRIER (NO. 1) CORP . By : Name : [ILLEGIBLE] Title : Attorney-in-fact
  In witness : M. Papanicolaou MICHALIS PAPANICOLAOU ATTORNEY AT LAW DANAOS
  SHIPPING CO., LTD. 14, AKTI KONDYLI 118 52 PIRAEUS For and on behalf of
  HYUNDAI SAMHO HEAVY INDUSTRIES CO., LTD. By : Name : E.C. HAN Title :
  ATTORNEY -IN- FACT 

  

 

	
  

  	
  EXHIBIT A
  PROMISSORY NOTE NO. US$ Date: 20 For value received, Megacarrier (No. 1)
  Corp. a corporation duly organized and existing under the laws of Liberia
  having its registered office at 80 Broad Street, Monrovia, Liberia hereby
  unconditionally promises to pay on to Hyundai Samho Heavy Industries
  Co., Ltd. or its nominee or its assignees, or any other holder hereof
  from time to time or its order the principal sum of US$ only, and to pay
  interest on the said principal sum from and including [·] at the rate of eight per cent (8%) per annum, the first
  payment of interest to be due and payable on [·] and thereafter payable semi-annually on the [·] and on the [·] of each and every year, until maturity (whether by
  acceleration or otherwise) and thereafter at the rate of ten per cent (10%)
  per annum until the principal sum and the interest thereon are fully paid.
  Interest shall be calculated on the basis of the actual days elapsed and a
  year of three hundred sixty (360) days. Both principal and interest shall be
  payable in United States Dollars in immediately available funds at the
  account of the [Korea Exchange Bank, Seoul, Korea] (Account No. [·]) with JP Morgan Chase Bank, New York, U.S.A.] without any
  deduction or withholding for or on account of any present or future taxes or
  other charges. If the maker of this note is required to make any such
  deduction or withholding from any payment hereunder, the maker shall pay such
  additional amount as may be necessary in order that the actual amount
  received after deduction or withholding shall be equal to the amount that
  would have been received if such deduction or withholding were not required.
  This note is one of a series of seven (7) promissory notes in the
  aggregate principal amount of US$ [ ] of like form and tenor except their
  respective numbers, principal amounts and dates of maturity (together the
  “Series Notes”). Each of said notes is secured by a letter of guarantee
  issued by DANAOS CORPORATION a corporation duly organized and existing under
  the laws of [ ] having its registered office at [ ]. In the event of a
  default in the payment of the principal when the same shall become due and
  payable, then interest at the rate of ten per cent (10%) per annum on the
  principal and any accrued interest from the due date to the date of payment
  shall be due and payable together with the principal and accrued interest. In
  the event default shall be made in the payment of the principal or interest
  on this note, or in the payment of the principal of or interest on any of the
  other Series Notes, as and when the same shall become due and payable
  and such default shall continue for a period of fifteen (15) days, the holder
  of this note may at its option declare the principal of and accrued interest
  on this note to be forthwith due and payable, whereupon the same shall be
  forthwith due and payable, and the holder hereof shall have the other
  remedies herein or by law provided. The maker of this note may, if it gives
  the holder not less than fifteen (15) days’ prior notice, prepay the whole of
  this note by payment of the principal hereof together with accrued interest
  hereon to and including the date of prepayment, provided, however that there
  shall be no default in payment of principal or interest on this note or on
  any of the other Series Notes as of the date of such prepayment: 

  

 

	
  

  	
  This note may
  be transferred or assigned by the holder of this note to any bank with the
  prior notice to the maker. The maker unconditionally agrees to promptly pay
  to and reimburse the holder hereof on demand any and all reasonable costs and
  expenses including, without limitation to, reasonable attorney’s fees
  incidental to the enforcement or attempted enforcement of this note. The
  holder of this note shall be under no obligation to make presentment,
  protest, demand or notice of any kind whatsoever for the payment of this
  note. The maker and the endorsers of this note hereby waive the right to
  interpose any defense, set-off or counterclaim of any nature or description
  in any action or proceeding arising on, out of, under or by reason of this
  note. The maker hereby authorizes and empowers the holder of this note to
  acknowledge on the maker’s behalf by endorsement the receipt of the payment
  or prepayment of the principal sum or interest thereon. Upon full payment of
  all sums payable on this note and the other Series Notes, the holder of
  this note shall immediately return this note to the maker with such
  endorsement to the effect that this note has been fully paid. This note and
  any non-contractual obligations arising in connection with this note shall be
  governed by and construed in accordance with the laws of England. The maker
  and the endorsers hereby consent to any legal action or proceeding in
  relation to this note being brought in the High Court in London, England and
  hereby irrevocably waives any immunity from suit, attachment, (before or
  after judgment) or execution on a judgment to which they or their property
  may be entitled. The maker and the endorsers hereby irrevocably submit to the
  exclusive jurisdiction of the courts of England. Without prejudice to any
  other mode of service allowed under any relevant law, the undersigned:
  irrevocably appoints [ ] whose registered office is at [ ] as its agent for
  service of process in relation to any proceedings before the High Court in
  London, England in connection with this note; and agrees that failure by a
  process agent to notify the undersigned of the process will not invalidate the
  proceedings concerned. The maker hereby certifies and declares that all acts,
  conditions and things required to be done and performed and to have happened
  precedent to the creation and issuance of this note, and to constitute this
  note the valid obligation of the maker in accordance with its terms, have
  been done and performed and have happened in due and strict compliance with
  all applicable laws and regulation. IN WITNESS WHEREOF, the undersigned has
  caused this note be signed in its corporate name by its representative
  thereunto duly authorized on the day and year first above written. 

  

 

	
  

  	
  For and on
  behalf of MEGACARRIER (NO. 1) CORP. BY Name : Title : 

  

 

	
  

  	
  EXHIBIT B
  Date: 20 Hyundai Samho Heavy Industries Co., Ltd. 1700, Yongdang-Ri,
  Samho-Eup, Youngam-Gun, Chollanam-Do, KOREA LETTER OF GUARANTEE NO. Gentlemen
  : In consideration of your completing and delivering one (1) 12,600 TEU
  Class Container Carrier, your Hull No. 456 (hereinafter called the
  ‘Vessel”), to MEGACARR1ER (NO. 1) CORP. (hereinafter called the “Buyer”), on
  deferred payment basis, under a certain shipbuilding Contract dated 28
  September 2007, as amended, entered into by and between you and the
  Buyer, the undersigned, as primary obligor and not as surety merely, does
  hereby irrevocably, absolutely and unconditionally guarantee jointly and
  severally the due and punctual payment (whether at the stated maturity, by
  acceleration or otherwise) by the Buyer of the promissory note No. in the
  principal amount of US$ to be due and payable on to be issued by the Buyer to
  the order of yourself upon delivery of the Vessel pursuant to the said
  shipbuilding Contract, and also guarantee the due and punctual payment by the
  Buyer of interest on this promissory note No. the first payment of interest
  to be due and payable on [ ] and thereafter payable semi-annually, at the
  rate of eight per cent (8%) per annum until maturity (by acceleration or
  otherwise) and thereafter at the rate of ten per cent (10%) per annum until
  full payment. Interest shall be calculated on the basis of the actual days
  elapsed and a year of three hundred sixty (360) days. The undersigned hereby
  waives the right to interpose any defense, set-off or counter-claim of any
  nature or description in any action or proceedings arising on, out of, under
  or by reason of the notes or this letter of guarantee or said shipbuilding
  Contract. The Promissory Note No. is one of a series of (7) Promissory
  Notes in the aggregate principal amount of US$ [ ] In the event that the
  Buyer fails to pay the said Promissory Note and/or interest thereon on the
  maturity date (by acceleration or otherwise) in accordance with the terms of
  the said promissory notes, the undersigned will pay to you the amounts due
  immediately upon receipt by us of written demand from you including a
  statement that the Buyer is in default of payment of the said promissory
  notes and/or interest thereon, without requesting you to take any or further
  procedure or step against the Buyer or with respect to the promissory notes
  and/or interest thereon, together with default interest on any such amounts
  demanded by you as aforesaid from the due date thereof until the payment in
  full of such amounts at the rate of ten per cent (10%) per annum payable in
  accordance with the terms of the said promissory notes and any and all
  reasonable costs and expenses including, without limitation, reasonable
  attorney’s fees incidental to the enforcement or attempted enforcement of
  this guarantee. The undersigned hereby consents to any renewals, changes,
  extensions or partial payments of the promissory notes or the indebtedness
  for which they are given without prior notice to us, and consents that no
  such renewals, changes, extensions or partial payments shall discharge any
  party to the promissory note or us from any liability thereon or hereon in
  whole or in part (other than to the extent of any such partial prepayment). 

  

 

	
  

  	
  The undersigned
  hereby agrees that this guarantee and undertaking hereunder shall be
  assignable to and shall inure to the benefit of the holder of the promissory
  note No. as if each of them was originally named herein. The payment by the
  undersigned under this guarantee shall be made in United States Dollars in
  immediately available funds by telegraphic transfer to the account of the
  [Korea Exchange Bank, Seoul, Korea.] (Account No. [•]) with [JP Morgan
  Chase Bank, New York, U.S.A.] in favour of you or your assignee without
  deduction, withholding or set-off. In the event that any deduction or
  withholding is imposed on any payment to be made hereunder by law or by any
  taxing authority, the undersigned agrees to pay such additional amount as may
  be necessary in order that the actual amount received after deduction or
  withholding shall be equal to the amount that would have been received if
  such deduction or withholding were not required after allowance for any
  increase in taxes or charges payable by virtue of the receipt of such
  additional amount. This letter of guarantee shall come into full force and
  effect upon delivery of the Vessel by you to the Buyer and shall continue in
  force and effect until the full payment of the promissory note No. and
  interest thereon whichever occurs last. The obligation of the undersigned
  hereunder is joint and several with any other guarantee or security and
  absolute and unconditional irrespective of any legal limitation, disability,
  incapacity or other circumstance relating to the Buyer or any other person,
  or any amendment or supplement to the said shipbuilding Contract, the
  promissory notes or any other document, instrument or agreement contemplated
  therein or of the genuineness, legality, validity, regularity or
  enforceability of the said shipbuilding Contract, the Promissory Notes or any
  other documents, instruments or agreements contemplated therein. This shall be
  a continuing guarantee and shall cover and secure any ultimate balance owing
  under the promissory note No. but you shall not be obliged to exhaust
  your recourse against the Buyer or the securities which you may hold before
  being entitled to payment from the undersigned of the obligation hereby
  guaranteed. The undersigned hereby represents and warrants that (A) the
  undersigned is a company duly organised and validly existing and in full
  compliance with the laws of the [ ] and has full legal right, power and
  authority to execute this letter of guarantee and to perform its obligations
  hereunder, (B) it has taken all appropriate and necessary corporate
  action to authorize the issuance of this letter of guarantee and the
  performance by it of its obligations hereunder, (C) the execution,
  delivery and performance of this letter of guarantee and the covenants herein
  contained will not violate or contravene any provisions of any applicable
  treaty, law or regulation or any judgment order or decree of any court, or
  governmental agency, or violate or result in breach of its constitutional
  documents, (D) this letter of guarantee constitutes the legal, valid and
  binding obligations of the undersigned enforceable in accordance with its
  terms subject to overriding principles, if any, of insolvency law, and
  (E) it has obtained all necessary consents, licenses, approvals, and
  authorisations, and registrations or declarations, with any governmental
  authority required in connection with the validity and enforceability of its
  guarantee and the same are in full force and effect. This letter of guarantee
  and any non-contractual obligations arising in connection with this letter of
  guarantee shall be governed by and construed in accordance with the laws of
  England. The undersigned hereby irrevocably consents that any legal action or
  proceeding against the undersigned, or any of its property, with respect to
  this letter of guarantee may be brought in the High Court in London, England,
  and by execution and delivery of this letter of guarantee the undersigned
  hereby accepts in regard to any such action or proceeding, for itself and in
  respect of its property, generally and unconditionally the exclusive
  jurisdiction of the aforesaid court. 

  

 

	
  

  	
  Notwithstanding
  anything to the contrary contained in this letter of guarantee or any of the
  documents executed as security therefore, the agreement, obligations and
  liabilities of the undersigned herein contained are joint and several and
  shall be construed accordingly. The undersigned agrees and consents to be
  bound by this letter of guarantee notwithstanding that this letter of
  guarantee may be invalid or unenforceable against the undersigned, whether or
  not the deficiency is known to yourself. You shall be at liberty to release
  the undersigned from this letter of guarantee and to compound with or
  otherwise vary or agree to vary the liability or to grant time and indulgence
  to make other arrangements with the undersigned without prejudicing or
  affecting the rights and remedies of yourself against the other undersigned.
  Without prejudice to any other mode of service allowed under any relevant
  law, the undersigned irrevocably appoints [ ] whose registered office is at [
  ] as its agent for service of process in relation to any proceedings before
  the High Court in London, England in connection with this letter of
  guarantee; and agrees that failure by a process agent to notify the
  undersigned of the process will not invalidate the proceedings concerned. The
  undersigned represents and warrants that this letter of guarantee is a
  commercial act and that the undersigned is not entitled to claim immunity
  from legal proceedings with respect to itself or any of its properties or
  assets on the grounds of sovereignty or otherwise under any law. To the
  extent that the undersigned or any of its properties or assets has or
  hereafter may acquire any right to immunity from set-off, legal proceedings,
  attachment prior to judgment, other attachment or execution of judgment on
  the grounds of sovereignty or otherwise, the undersigned for itself and its
  properties and other assets hereby irrevocably waives such right to immunity
  in respect of its obligations under this letter of guarantee. After this
  letter of guarantee shall have expired as aforesaid, you will return the same
  to the undersigned without any request from the undersigned. IN WITNESS
  WHEREOF, the undersigned has caused this letter of guarantee to be executed
  and delivered by its duly authorised representative on the day and year above
  written. Yours very truly, for and on behalf of DANAOS CORPORATION. By Name:
  Title : for and on behalf of 

  

 

 

	
  

  	
  AGREEMENT This
  Agreement is made on this 27th day of September 2010 by and between: (1) MEGACARRIER
  (NO.2) CORP. (the “Buyer”); and (2) HYUNDAI SAMHO HEAVY INDUSTRIES CO., LTD.
  (the “Builder”), (hereinafter the parties referred to individually as the “Party”
  and collectively as the “Parties”), to amend and supplement the Contract as
  defined hereinafter. WHEREAS: A. The Buyer and the Builder entered into a
  shipbuilding contract on 28 September, 2007 as amended and supplemented from
  time to time (the “Contract”) for the construction and sale of one (1) 12,600
  TEU class container carrier, having the Builder’s Hull No S457 (the
  “Vessel”). B. The Buyer desires to postpone part of the final instalment of
  the Contract Price (as that term is defined in the Contract) until after
  delivery of the Vessel. C. The Buyer is willing to execute and deliver to the
  Builder the Mortgage, Assignment and the Time Charter Assignment (each as
  hereinafter defined) in respect of the Vessel as security for the payment of
  the postponed part of the final instalment referred to in Recital (B) above.
  D. Danaos Corporation (the “Guarantor”) is willing to execute and deliver to
  the Builder the Letter of Guarantee (as hereinafter defined) guaranteeing the
  payment of the postponed part of the final instalment referred to in Recital
  (B) above. E. The Builder is willing to agree to such deferral of part of the
  final instalment upon the terms and conditions herein below. NOW, THEREFORE,
  for good and valuable consideration the Parties hereby agree to enter into
  this AGREEMENT on the following terms and conditions. DEFINITIONS
  “Assignment” has the meaning given in Clause 3.4. “Business Day” means a day
  (other than a Saturday or Sunday) on which banks are open for general
  business in London, New York Athens and Seoul. “Delivery Instalment” has the
  meaning given in Clause 2.1. “Delivery Instalment Due Date” has the meaning
  given in Clause 2.2. “Due Date” means the Delivery Instalment Due Date and
  any Post Delivery Instalment Due Date and in the plural means both of them.
  “Event of Default” has the meaning given in Clause 8. “First Loan” means the
  Loan made or to be made available to, amongst others, the Buyer by the First
  Mortgagee in respect of (inter alia) the Vessel.

  

 

	
  

  	
  “First
  Mortgagee” means the agent that the lenders, Deutsche Schiffsbank
  Aktiengesellschaft, Credit Suisse AG, Emporiki Bank of Greece S.A., and
  Deutsche Bank AG Filiale Deutschlandgeschaft, will appoint. “First Security”
  means (i) the first preferred Liberian mortgage over the Vessel in favour of
  the First Mortgagee and (ii) the first priority assignment of the earnings,
  insurance and requisition compensation relating to the Vessel in favour of
  the First Mortgagee. “Intercreditor Deed” means the intercreditor deed
  between the First Mortgagee and the Builder under which the Post Delivery
  Instalment shall rank behind the claims of the First Mortgagee under the
  First Loan entered into or to be entered into between (inter alia) the First
  Mortgagee and the Buyer providing (inter alia) for the First Security.
  “Letter of Guarantee” has the meaning given in Clause 3.2. “Mortgage” has the
  meaning given in Clause 3.3. “Post Delivery Instalment” has the meaning given
  in Clause 2.1. “Post Delivery Instalment Due Date” has the meaning given in
  Clause 2.3. “Promissory Note” has the meaning given in Clause 3.1. “Second
  Security” means the Mortgage, the Assignment and the Time Charter Assignment.
  “Tax” means any tax (other than tax on the overall income of the Builder,
  levy, impost, duty or other charge or withholding of a similar nature
  (including any penalty or interest payable in connection with any failure to
  pay or any delay in paying any of the same). “Tax Deduction” means a
  deduction or withholding for or on account of Tax from a payment under a Transaction
  Document except for those imposed in Korea upon the payment of the Post
  Delivery Instalment. “Time Charterer” means Hyundai Merchant Marine Co., Ltd
  of Korea. “Time Charter” means the time charter dated 18 October 2007 as
  amended by addendum no. 1 and addendum no. 2 between the Buyer and the Time
  Charterer. “Time Charter Assignment” has the meaning given in Clause 3.5.
  “Total Loss” means: (a) actual, constructive, compromised, agreed or arranged
  total loss of the Vessel; (b) requisition for title or other compulsory
  acquisition of the Vessel otherwise than by requisition for hire; (c)
  capture, seizure, arrest, detention, or confiscation of the Vessel by any
  person, governmental authority or government or by persons acting or
  purporting to act on behalf of any government or any other person which
  deprives the Buyer of the use of the Vessel for 90 days or more after that
  occurrence; and (d) requisition for hire of the Vessel by any government or
  by persons acting or purporting to act on behalf of any government which
  deprives the Buyer of the use of the Vessel for a period of 90 days or more.
  “Transaction Documents” means the Contract, this Agreement, the Second
  Security, the Promissory Notes, the Letter of Guarantee, the Time Charter
  Assignment and the Intercreditor Deed.

  

 

	
  

  	
  2 POSTPONEMENT
  OF PAYMENT OF INSTALMENTS 2.1 The final instalment of the Contract Price
  under the Contract will be payable by the Buyer as the delivery instalment
  (the “Delivery Instalment”) and the post delivery instalment (the “Post
  Delivery Instalment”). 2.2 The Delivery Instalment in the sum of U.S. Dollars
  Fifty Eight Million Five Hundred and Two Thousand and Thirty Five
  US$58,502,035) plus any increase or minus any decrease due to modifications
  and/or adjustment, if any, to the Contract Price under Articles III and V of
  the Contract arising prior to delivery of the Vessel shall be paid by the
  Buyer on the delivery of the Vessel which is scheduled on February 16, 2012
  or such later date as is permissible pursuant to the Contract (the “Delivery
  Instalment Due Date”). 2.3 The Post Delivery Instalment amounting to U.S.
  Dollars Twenty Four Million Nine Hundred and Fifty Five Thousand Nine Hundred
  and Sixty Five (US$24,955,965) shall be paid over a period of four (4) years
  from the actual delivery of the Vessel in seven (7) equal instalments the
  first due date being 16 February 2013 and the remaining six instalments
  payable semi-annually thereafter as listed in Table 1. (each a “Post Delivery
  Instalment Due Date”). Interest shall accrue at the rate of eight per cent
  (8%) per annum on all of the outstanding balance of the Post Delivery
  Instalment which shall be paid by the Buyer semi-annually the first due date
  being 16 August 2012 and at six month intervals thereafter as listed in Table
  1. The rate of interest shall be increased to ten per cent (10%) per annum in
  the event of default. <Repayment schedule for the Post Delivery Instalment
  based on the the delivery of the Vessel on February 16, 2012.> Table 1
  PAYMENT DUE DATE PRINCIPAL(A) INTEREST(B) TOTAL(A+B) 1st 16-Aug-12 -
  $1,009,330 $1,009,330 16-Feb-13 $3,565,137 $1,020,421 $4,585,558 2nd
  16-Aug-13 $3,565,137 $860,386 $4,425,523 3rd 16-Feb-14 $3,565,137 $728,872
  $4,294,009 4th 16-Aug-14 $3,565,137 $573,591 $4,138,728 5th 16-Feb-15 $3,565,137
  $437,323 $4,002,460 6th 16-Aug-15 $3,565,137 $286,795 $3,851,932 7th
  16-Feb-16 $3,565,143 $145,774 $3,710,917 TOTAL $24,955,965 $5,062,492
  $30,018,457 The figures in above Table 1 shall be adjusted in accordance with
  Clause 2.3 if the actual delivery of the Vessel is other than February 16,
  2012. 2.4 It is understood and agreed by the Builder and the Buyer that no
  payments to be made by the Buyer pursuant to this Clause 2 shall be delayed
  or withheld by the Buyer due to any dispute or disagreement of whatsoever
  nature arising between the Builder and the Buyer. If a Due Date would
  otherwise fall on a day which is not a Business Day, that Due Date will
  instead be on the next Business Day in that calendar month (if there is one)
  or the preceding Business Day (if there is not). 

  

 

	
  

  	
  2.5 The Buyer
  shall make all payments without any Tax Deduction, unless a Tax Deduction is
  required by law. 2.6 If a Tax Deduction is required by law to be made by the
  Buyer, the amount of the payment due from the Buyer shall be increased to an
  amount which (after making any Tax Deduction) leaves an amount equal to the
  payment which would have been due if no Tax Deduction had been required. 2.7
  The Buyer may at any time, if it gives the Builder not less than 15 days’
  prior notice, prepay the whole or part of the Post Delivery Instalment, but
  if in part then the Buyer shall state which of the Promissory Notes is to be
  prepaid and such Promissory Note shall be prepaid in full and not in part.
  Any prepayment shall be made together with accrued interest. 2.8 Article X. 8
  of the Contract shall be amended and shall hereafter be read so that at the
  end of the first paragraph the following wording is inserted:- “In the event
  that the BUYER pays to the BUILDER any amount in excess of the pre-delivery
  instalments, the BUILDER will procure that Woori Bank of Korea will amend its
  letter of guarantee (or arrange for the issue of a replacement) so as to
  include such excess amount. 3 SECURITIES TO BE FURNISHED BY THE BUYER As a
  condition precedent to the effectiveness of this Agreement the Buyer shall
  furnish the Builder with securities as follows upon the delivery of the
  Vessel. 3.1 Promissory Notes The Buyer shall execute and deliver to the
  Builder seven (7) promissory notes (each individually a “Promissory Note” and
  collectively the “Promissory Notes”) as follows: (a) Each Promissory Note
  shall relate to an instalment under the Post Delivery Instalment and shall be
  for a payment of an amount of principal (A) and interest (B) as listed in Table
  1 next to the corresponding instalment to which that Promissory Note relates.
  (b) Each Promissory Note shall be in the form annexed hereto as Exhibit “A”.
  3.2 Letter of Guarantee The Buyer shall furnish the Builder with an
  unconditional letter of guarantee, being in the form annexed hereto as
  Exhibit “B” and in respect of each Promissory Note issued by the Buyer (each
  individually a “Letter of Guarantee” and collectively the “Letters of
  Guarantee”) each such Letter of Guarantee to be duly executed and delivered
  by the Guarantor guaranteeing the payment by the Buyer of the principal sums
  and interest specified in the relevant Promissory Note. 3.3 Second Preferred
  Mortgage on the Vessel The Buyer shall execute and deliver to the Builder a
  second preferred Liberian mortgage over the Vessel in the maximum principal
  amount of US$32,442,755 in form and substance satisfactory to the Builder
  (the “Mortgage”) as security for (i) the Buyer’s obligations under the
  Promissory Notes and (ii) the obligations of the Buyer under this Agreement. 

  

 

	
  

  	
  3.4 Second
  Priority Assignment The Buyer shall execute and deliver to the Builder a
  second priority assignment of its interests in the earnings, insurances and
  requisition compensation of the Vessel in form and substance satisfactory to
  the Builder (the “Assignment”) as security for (i) the Buyer’s obligations
  under the Promissory Notes and (ii) the obligations of the Buyer under this
  Agreement. 3.5 Time Charter Assignment The Buyer shall execute and deliver to
  the Builder a second priority assignment of its interests in the Time Charter
  of the Vessel in form and substance satisfactory to the Builder (the “Time
  Charter Assignment”) as security for (i) the Buyer’s obligations under the
  Promissory Notes and (ii) the obligations of the Buyer under this Agreement.
  4 OTHER CONDITIONS PRECEDENT The Buyer shall, on or prior to delivery of the
  Vessel, provide the following to the Builder: 4.1 satisfactory evidence that
  the earnings, insurance and requisition compensation of the Vessel are free
  from encumbrances other than the First Security. 4.2 satisfactory evidence
  that the Vessel is insured and classed as provided by the terms of the
  Mortgage and that the Mortgage is duly registered on the Liberian Ship
  Register; 4.3 certified true copies of the constitutional documents of the
  Buyer and the Guarantor together with certified true copies of board
  resolutions of the Buyer and certified extract of the standing resolutions of
  the Guarantor and a power of attorney authorising the execution of this
  Agreement, the Second Security, the Promissory Notes and the Letters of
  Guarantee and to which the Buyer and the Guarantor is, or will be a party;
  4.4 certified true copies of all licenses, consents or approvals which may be
  required by the Buyer or the Guarantor in connection with the execution and
  validity and enforceability of any of the documents to which they are a
  party; 4.5 originals or certified true copies from the Buyer’s and the
  Guarantor’s agents for receipt of service and proceedings accepting their
  appointment under each of the documents in which they are to be appointed as
  agents; 4.6 the Intercreditor Deed duly signed; 4.7 satisfactory legal
  opinions addressed to the Builder on matters of Liberian and Marshall Islands
  law relating to the due execution of all documents by the Buyer and the
  Guarantor and the validity of this Agreement, the Promissory Notes, the
  Letter of Guarantee and all of the Second Security executed in favour of the
  Builder. 5 DEFAULT INTEREST If the Builder does not receive on the due date
  any sum due from the Buyer under this Agreement (or any other agreement
  entered into by the Buyer in connection with this Agreement), the Buyer shall
  on demand pay interest on such sum from and including the due 

  

 

	
  

  	
  date to the date
  of actual payment (as well as before judgment) at the rate per annum of ten
  per cent (10%). 6 CALCULATION OF INTEREST All payments of interest hereunder
  shall accrue from day-to-day and shall be calculated on the basis of the
  actual number of days elapsed in a three hundred and sixty (360) day year. 7
  GENERAL UNDERTAKINGS The Buyer further undertakes that, throughout the period
  from the date hereof until the full amount of the Delivery Instalment and
  Post Delivery Instalment together with accrued interest thereon has been paid
  to the Builder: 7.1 it will ensure that at all times the claims of the
  Builder against it under this Agreement rank at least pari passu with the
  claims of all its other unsecured creditors save those whose claims are
  preferred by any bankruptcy, insolvency or other similar laws of general
  application; 7.2 it will ensure that at all times the insured value of the
  Vessel in the hull and machinery policies shall in no event be less than one
  hundred and twenty five per cent (125%) of, the contract price under the
  Contract; the Buyer will (i) upon the Builder’s written request provide the
  Builder with copies of the said insurance policies; and (ii) notify the
  Builder promptly and in writing of any changes to the insured value of the
  Vessel whether made pursuant to this undertaking or otherwise; 7.3 it shall
  procure that the interest of the Builder shall be endorsed on the relevant
  hull and machinery policy by incorporation of a loss payable clause (in a
  form agreed by the Builder) and notice of assignment of insurances signed by
  the Buyer and that the Builder shall be furnished with proforma copies
  thereof and a letter of undertaking in such form as is customary; 7.4 it
  shall procure that the interest of the Builder shall be endorsed on the Certificate
  of Entry or policy of the protection and indemnity and/or war risks
  association by incorporation of a loss payable clause (in a form agreed by
  the Builder) and notice of assignment of insurances signed by the Buyer and
  that the Builder shall be furnished with a copy of the certificate of entry
  or policy and a letter of undertaking in such form as is customary by the
  P&I association; 7.5 it shall ensure that the earnings, insurances and
  requisition compensation of the Vessel are free from encumbrances other than
  the First Security and Second Security; 7.6 it shall not create or permit to
  subsist any mortgage, charge, pledge, lien or other security interest
  securing any obligation of any person or any other agreement or arrangement
  having a similar effect over any of its assets other than the First Security
  and Second Security and liens arising in the ordinary course of business or
  by operation of law. 8 EVENTS OF DEFAULT Each of the following events shall
  constitute an event of default (each an “Event of Default”) (whether such
  event shall occur or come about voluntarily or involuntarily or by operation
  of law or regulation or pursuant to, or in compliance with, any judgment,
  decree or order of any court or other authority): 

  

 

	
  

  	
  8,1 The Buyer
  fails to pay any amount (whether in respect of principal, interest or
  otherwise) due and payable by the Buyer to the Builder under this Agreement
  or any of the Promissory Notes on the due date and such failure is not
  remedied within 15 days; or 8.2 the Buyer or the Guarantor defaults in the
  due performance and discharge of any of its other duties or liabilities under
  this Agreement or the Transaction Documents to which it is a party unless
  such failure, in the Builder’s opinion, is capable of remedy and is remedied
  within 30 days of such failure; or 8.3 any order shall be made by any
  competent court or other competent authority or a resolution shall be passed
  by the Buyer or the Guarantor, for the appointment of a liquidator of, or
  otherwise for the winding-up or dissolution of the Buyer or the Guarantor,
  except for the purpose of amalgamation or re-organisation (not involving or
  arising out of insolvency) the terms of which shall have received the prior
  written approval of the Builder; or 8.4 an administrator, receiver,
  administrative receiver, manager, trustee or similar official is appointed
  (and such appointment is not cancelled or withdrawn within 30 days) for all
  or a part of the assets and undertaking of the Buyer having a value of at
  least $500,000 or the Guarantor having a value of at least $5,000,000; or 8.5
  it becomes unlawful for the Buyer or the Guarantor to perform and discharge
  any of its duties and liabilities contained in this Agreement and/or the
  Transaction Documents to which it is a party or for the Builder to exercise
  any of its rights and powers under this Agreement and/or the Transaction
  Documents; or 8.6 anything is done or omitted to be done by the Buyer or the
  Guarantor which materially prejudices the security under the second security
  and has not been cured within 30 days of the builder giving notice thereof to
  the Buyer; or 8.7 the First Loan is declared due and payable prior to its
  stated maturity by reason of an event of default (howsoever defined), or 8.8
  an event of default occurs under the Shipbuilding Contract as amended in
  respect of Hull No. 5456. 9 POWERS ON DEFAULT 9.1 Upon the occurrence of an
  Event of Default, the Builder may, by notice to the Buyer, declare that the
  Post Delivery Instalment together with accrued interest is either immediately
  due and payable or payable on demand, whereupon the Post Delivery Instalment
  together with accrued interest shall become immediately due and payable or
  (as the case may be) payable on demand being made by the Builder. 9.2 In
  addition the Builder may take any other action, exercise any other right or
  pursue any other remedy conferred upon the Builder by this Agreement and/or
  the Transaction Documents or by any applicable law or regulation or otherwise
  as a consequence of such Event of Default. 9.3 Save for the amendments
  contained herein, all other terms and conditions of the Contract shall remain
  valid and in full force. 9.4 The Builder’s rights under this Clause are
  subject to the provisions of the Intercreditor Deed. 

  

 

	
  

  	
  10 TOTAL LOSS
  Following the occurrence of a Total Loss with respect to the Vessel, the Post
  Delivery Instalment together with accrued interest on the Post Delivery
  Instalment shall become due and payable on the earlier of (i) 120 days after
  such Total Loss has occurred or is deemed to have occurred, and (ii) the day
  on which insurance proceeds or other compensation monies in respect of the
  Total Loss have been received by the party entitled thereto. 11 [NOT USED] 12
  COSTS AND EXPENSES The Buyer shall promptly on demand pay the Builder the
  amount of all costs and expenses (including legal fees) reasonably incurred
  by the Builder in connection with the negotiation, preparation, printing and
  execution of this Agreement and any other documents referred to in this
  Agreement; and any other documents executed after the date of this Agreement.
  13 CONFIDENTIALITY This Agreement shall be kept strictly private and
  confidential and shall not be disclosed to any other third party.
  Notwithstanding the foregoing, disclosure is permitted (i) to the Buyer’s and
  Guarantor’s financiers and potential financiers, (ii) to the Buyer’s and
  Guarantor’s shareholders and affiliates, (iii) to Buyer’s and Guarantor’s
  legal and financial advisers and (iv) as may be required by law (including by
  virtue of rules and regulations of any securities exchange authorities). 14
  ENTIRE AGREEMENT This Agreement shall constitute an integral part of the
  Contract and shall constitute the only and entire agreement between the
  Parties with respect to the subject matter hereof and unless otherwise
  expressly agreed between the Parties, all other agreements, oral or written,
  made and entered into between the Parties prior to the execution of this
  Agreement shall be null and void. 15 ENFORCEMENT AND JURISDICTION This
  Agreement and any non-contractual obligations arising in connection with this
  Agreement is governed by and construed in accordance with English law. 15.1
  The High Court in London England has exclusive jurisdiction to settle any
  dispute arising out of or in connection with this Agreement (including a
  dispute regarding the existence, validity or termination of this Agreement)
  (a “Dispute”). 15.2 The Parties agree that the High Court in London England
  is the most appropriate and convenient court to settle Disputes and accordingly
  no Party will argue to the contrary. 15.3 Clause 15.2 is for the benefit of
  the Builder only. As a result, the Builder shall not be prevented from taking
  proceedings relating to a Dispute in any other courts with jurisdiction. 15.4
  To the extent allowed by law, the Builder may take concurrent proceedings in
  any number of jurisdictions. 15.5 Without prejudice to any other mode of
  service allowed under any relevant law, the Buyer: 

  

 

	
  

  	
  15.5.1
  irrevocably appoints Danaos Management Consultants whose registered office is
  at 4 Staples Inn, Holborn, London WCIV 7QU as its agent for service of
  process in relation to any proceedings before the English courts in
  connection with this Agreement or any Transaction Document; and 15.5.2 agree
  that failure by a process agent to notify any Buyer of the process will not
  invalidate the proceedings concerned. IN WITNESS WHEREOF, the Parties have
  caused this Agreement to be duly executed on the day and year first above
  written. SIGNATURES For and on behalf of MEGACARRIER (NO. 2) CORP . By:
  Illegible Name: Illegible Tittle: Attorney-in-fact For and on behalf of
  HYUNDAI SAMHO HEAVY INDUSTRIES CO., LTD. By: Illegible Name :Illegible Title:
  Attorney-in-fact

  

 

	
  

  	
  EXHIBIT A
  PROMISSORY NOTE NO.US$ Date: 20 For value received, Megacarrier (No. 2) Corp.
  a corporation duly organized and existing under the laws of Liberia having
  its registered office at 80 Broad Street, Monrovia, Liberia hereby
  unconditionally promises to pay on to Hyundai Samho Heavy Industries Co.,
  Ltd. or its nominee or its assignees, or any other holder hereof from time to
  time or its order the principal sum of US$ only, and to pay interest on the
  said principal sum from and including [•] at the rate of eight per cent (8%)
  per annum, the first payment of interest to be due and payable on [•] and
  thereafter payable semi-annually on the [•] and on the [•] of each and every
  year, until maturity (whether by acceleration or otherwise) and thereafter at
  the rate of ten per cent (10%) per annum until the principal sum and the
  interest thereon are fully paid. Interest shall be calculated on the basis of
  the actual days elapsed and a year of three hundred sixty (360) days. Both
  principal and interest shall be payable in United States Dollars in
  immediately available funds at the account of the [Korea Exchange Bank,
  Seoul, Korea] (Account No. [•]) with [JP Morgan Chase Bank, New York, U.S.A.]
  without any deduction or withholding for or on account of any present or
  future taxes or other charges. If the maker of this note is required to make
  any such deduction or withholding from any payment hereunder, the maker shall
  pay such additional amount as may be necessary in order that the actual
  amount received after deduction or withholding shall be equal to the amount
  that would have been received if such deduction or withholding were not
  required. This note is one of a series of seven (7) promissory notes in the
  aggregate principal amount of US$[ ] of like form and tenor except their
  respective numbers, principal amounts and dates of maturity (together the
  “Series Notes”). Each of said notes is secured by a letter of guarantee
  issued by DANAOS CORPORATION a corporation duly organized and existing under
  the laws of [ ] having its registered office at [ ]. In the event of a
  default in the payment of the principal when the same shall become due and
  payable, then interest at the rate of ten per cent (10%) per annum on the
  principal and any accrued interest from the due date to the date of payment
  shall be due and payable together with the principal and accrued interest. In
  the event default shall be made in the payment of the principal or interest
  on this note, or in the payment of the principal of or interest on any of the
  other Series Notes, as and when the same shall become due and payable and
  such default shall continue for a period of fifteen (15) days, the holder of
  this note may at its option declare the principal of and accrued interest on
  this note to be forthwith due and payable, whereupon the same shall be
  forthwith due and payable, and the holder hereof shall have the other
  remedies herein or by law provided. The maker of this note may, if it gives
  the holder not less than fifteen (15) days’ prior notice, prepay the whole of
  this note by payment of the principal hereof together with accrued interest
  hereon to and including the date of prepayment, provided, however that there
  shall be no default in payment of principal or interest on this note or on
  any of the other Series Notes as of the date of such prepayment: 

  

 

	
  

  	
  This note may
  be transferred or assigned by the holder of this note to any bank with the
  prior notice to the maker. The maker unconditionally agrees to promptly pay
  to and reimburse the holder hereof on demand any and all reasonable costs and
  expenses including, without limitation to, reasonable attorney’s fees
  incidental to the enforcement or attempted enforcement of this note. The
  holder of this note shall be under no obligation to make presentment,
  protest, demand or notice of any kind whatsoever for the payment of this
  note. The maker and the endorsers of this note hereby waive the right to
  interpose any defense, set-off or counterclaim of any nature or description
  in any action or proceeding arising on, out of, under or by reason of this
  note. The maker hereby authorizes and empowers the holder of this note to
  acknowledge on the maker’s behalf by endorsement the receipt of the payment
  or prepayment of the principal sum or interest thereon. Upon full payment of
  all sums payable on this note and the other Series Notes, the holder of this
  note shall immediately return this note to the maker with such endorsement to
  the effect that this note has been fully paid. This note and any
  non-contractual obligations arising in connection with this note shall be
  governed by and construed in accordance with the laws of England. The maker
  and the endorsers hereby consent to any legal action or proceeding in
  relation to this note being brought in the High Court in London, England and
  hereby irrevocably waives any immunity from suit, attachment, (before or
  after judgment) or execution on a judgment to which they or their property
  may be entitled. The maker and the endorsers hereby irrevocably submit to the
  exclusive jurisdiction of the courts of England. Without prejudice to any other
  mode of service allowed under any relevant law, the undersigned: irrevocably
  [  ] whose registered office is at [  ] as its agent for service of process in
  relation to any proceedings before the High Court in London, England in
  connection with this note; and agrees that failure by a process agent to
  notify the undersigned of the process will not invalidate the proceedings
  concerned. The maker hereby certifies and declares that all acts, conditions
  and things required to be done and performed and to have happened precedent
  to the creation and issuance of this note, and to constitute this note the
  valid obligation of the maker in accordance with its terms, have been done
  and performed and have happened in due and strict compliance with all
  applicable laws and regulation. IN WITNESS WHEREOF, the undersigned has
  caused this note be signed in its corporate name by its representative
  thereunto duly authorized on the day and year first above written. 

  

 

	
  

  	
  For and on
  behalf of [MEGACARRIER (NO. 2) CORP.] By Name: Title: 

  

 

	
  

  	
  EXHIBIT B Date:
  20 Hyundai Samho Heavy Industries Co., Ltd. 1700, Yongdang-Ri, Samho-Eup,
  Youngam-Gun, Chollanam-Do, KOREA LETTER OF GUARANTEE NO. Gentlemen : In
  consideration of your completing and delivering one (1) 12,600 TEU Class
  Container Carrier, your Hull No. 457 (hereinafter called the “Vessel”), to
  MEGACARRIER (NO. 2) CORP. (hereinafter called the “Buyer”), on deferred
  payment basis, under a certain shipbuilding Contract dated 28 September 2007,
  as amended, entered into by and between you and the Buyer, the undersigned,
  as primary obligor and not as surety merely, does hereby irrevocably,
  absolutely and unconditionally guarantee jointly and severally the due and
  punctual payment (whether at the stated maturity, by acceleration or otherwise)
  by the Buyer of the promissory note No. in the principal amount of US$ to be
  due and payable on to be issued by the Buyer to the order of yourself upon
  delivery of the Vessel pursuant to the said shipbuilding Contract, and also
  guarantee the due and punctual payment by the Buyer of interest on this
  promissory note No. , the first payment of interest to be due and payable on [
  ] and thereafter payable semi-annually, at the rate of eight per cent (8%)
  per annum until maturity (by acceleration or otherwise) and thereafter at the
  rate of ten per cent (10%) per annum until full payment. Interest shall be
  calculated on the basis of the actual days elapsed and a year of three
  hundred sixty (360) days. The undersigned hereby waives the right to
  interpose any defense, set-off or counter-claim of any nature or description
  in any action or proceedings arising on, out of, under or by reason of the
  notes or this letter of guarantee or said shipbuilding Contract. The
  Promissory Note No. is one of a series of (7) Promissory Notes in the
  aggregate principal amount ofUS$[ ] In the event that the Buyer fails to pay
  the said Promissory Note and/or interest thereon on the maturity date (by
  acceleration or otherwise) in accordance with the terms of the said
  promissory notes, the undersigned will pay to you the amounts due immediately
  upon receipt by us of written demand from you including a statement that the
  Buyer is in default of payment of the said promissory notes and/or interest
  thereon, without requesting you to take any or further procedure or step
  against the Buyer or with respect to the promissory notes and/or interest
  thereon, together with default interest on any such amounts demanded by you
  as aforesaid from the due date thereof until the payment in full of such amounts
  at the rate of ten per cent (10%) per annum payable in accordance with the
  terms of the said promissory notes and any and all reasonable costs and
  expenses including, without limitation, reasonable attorney’s fees incidental
  to the enforcement or attempted enforcement of this guarantee. The
  undersigned hereby consents to any renewals, changes, extensions or partial
  payments of the promissory notes or the indebtedness for which they are given
  without prior notice to us, and consents that no such renewals, changes,
  extensions or partial payments shall discharge any party to the promissory
  note or us from any liability thereon or hereon in whole or in part (other
  than to the extent of any such partial prepayment). 

  

 

	
  

  	
  The undersigned
  hereby agrees that this guarantee and undertaking hereunder shall be
  assignable to and shall inure to the benefit of the holder of the promissory
  note No. as if each of them was originally named herein. The payment by the
  undersigned under this guarantee shall be made in United States Dollars in
  immediately available funds by telegraphic transfer to the account of the
  [Korea Exchange Bank, Seoul, Korea] (Account No. [•]) with [JP Morgan Chase
  Bank, New York, U.S.A.] in favour of you or your assignee without deduction,
  withholding or set-off. In the event that any deduction or withholding is
  imposed on any payment to be made hereunder by law or by any taxing
  authority, the undersigned agrees to pay such additional amount as may be
  necessary in order that the actual amount received after deduction or
  withholding shall be equal to the amount that would have been received if
  such deduction or withholding were not required after allowance for any
  increase in taxes or charges payable by virtue of the receipt of such
  additional amount. This letter of guarantee shall come into full force and
  effect upon delivery of the Vessel by you to the Buyer and shall continue in
  force and effect until the full payment of the promissory note No. and
  interest thereon whichever occurs last. The obligation of the undersigned
  hereunder is joint and several with any other guarantee or security and
  absolute and unconditional irrespective of any legal limitation, disability,
  incapacity or other circumstance relating to the Buyer or any other person,
  or any amendment or supplement to the said shipbuilding Contract, the
  promissory notes or any other document, instrument or agreement contemplated
  therein or of the genuineness, legality, validity, regularity or
  enforceability of the said shipbuilding Contract, the Promissory Notes or any
  other documents, instruments or agreements contemplated therein. This shall
  be a continuing guarantee and shall cover and secure any ultimate balance
  owing under the promissory note No. , but you shall not be obliged to exhaust
  your recourse against the Buyer or the securities which you may hold before
  being entitled to payment from the undersigned of the obligation hereby
  guaranteed. The undersigned hereby represents and warrants that (A) the
  undersigned is a company duly organised and validly existing and in full
  compliance with the laws of the [ ] and has full legal right, power and
  authority to execute this letter of guarantee and to perform its obligations
  hereunder, (B) it has taken all appropriate and necessary corporate action to
  authorize the issuance of this letter of guarantee and the performance by it
  of its obligations hereunder, (C) the execution, delivery and performance of
  this letter of guarantee and the covenants herein contained will not violate
  or contravene any provisions of any applicable treaty, law or regulation or
  any judgment order or decree of any court, or governmental agency, or violate
  or result in breach of its constitutional documents, (D) this letter of
  guarantee constitutes the legal, valid and binding obligations of the
  undersigned enforceable in accordance with its terms subject to overriding
  principles, if any, of insolvency law, and (E) it has obtained all necessary
  consents, licenses, approvals, and authorisations, and registrations or
  declarations, with any governmental authority required in connection with the
  validity and enforceability of its guarantee and the same are in full force
  and effect. This letter of guarantee and any non-contractual obligations
  arising in connection with this letter of guarantee shall be governed by and
  construed in accordance with the laws of England. The undersigned hereby
  irrevocably consents that any legal action or proceeding against the
  undersigned, or any of its property, with respect to this letter of guarantee
  may be brought in the High Court in London, England, and by execution and
  delivery of this letter of guarantee the undersigned hereby accepts in regard
  to any such action or proceeding, for itself and in respect of its property,
  generally and unconditionally the exclusive jurisdiction of the aforesaid
  court. 

  

 

	
  

  	
  Notwithstanding
  anything to the contrary contained in this letter of guarantee or any of the
  documents executed as security therefore, the agreement, obligations and
  liabilities of the undersigned herein contained are joint and several and
  shall be construed accordingly. The undersigned agrees and consents to be
  bound by this letter of guarantee notwithstanding that this letter of
  guarantee may be invalid or unenforceable against the undersigned, whether or
  not the deficiency is known to yourself. You shall be at liberty to release
  the undersigned from this letter of guarantee and to compound with or
  otherwise vary or agree to vary the liability or to grant time and indulgence
  to make other arrangements with the undersigned without prejudicing or
  affecting the rights and remedies of yourself against the other undersigned.
  Without prejudice to any other mode of service allowed under any relevant
  law, the undersigned irrevocably appoints [ ] whose registered office is at [
  ] as its agent for service of process in relation to any proceedings before
  the High Court in London, England in connection with this letter of
  guarantee; and agrees that failure by a process agent to notify the
  undersigned of the process will not invalidate the proceedings concerned. The
  undersigned represents and warrants that this letter of guarantee is a
  commercial act and that the undersigned is not entitled to claim immunity
  from legal proceedings with respect to itself or any of its properties or
  assets on the grounds of sovereignty or otherwise under any law. To the
  extent that the undersigned or any of its properties or assets has or
  hereafter may acquire any right to immunity from set-off, legal proceedings,
  attachment prior to judgment, other attachment or execution of judgment on
  the grounds of sovereignty or otherwise, the undersigned for itself and its
  properties and other assets hereby irrevocably waives such right to immunity
  in respect of its obligations under this letter of guarantee. After this
  letter of guarantee shall have expired as aforesaid, you will return the same
  to the undersigned without any request from the undersigned. IN WITNESS
  WHEREOF, the undersigned has caused this letter of guarantee to be executed and
  delivered by its duly authorised representative on the day and year above
  written. Yours very truly, for and on behalf of DANAOS CORPORATION. By Name:
  Title : for and on behalf of 

  

 

 

	
  

  	
  AGREEMENT This
  Agreement is made on this 27th day of September 2010 by and between: (1)
  MEGACARRIER (NO.3) CORP. (the “Buyer”); and (2) HYUNDAI SAMHO HEAVY INDUSTRIES
  CO., LTD. (the “Builder”), (hereinafter the parties referred to individually
  as the “Party” and collectively as the “Parties”), to amend and supplement
  the Contract as defined hereinafter. WHEREAS: A. The Buyer and the Builder
  entered into a shipbuilding contract on 28 September, 2007 as amended and
  supplemented from time to time (the “Contract”) for the construction and sale
  of one (1) 12,600 TEU class container carrier, having the Builder’s Hull No
  S458 (the “Vessel”). B. The Buyer desires to postpone part of the final
  instalment of the Contract Price (as that term is defined in the Contract)
  until after delivery of the Vessel. C. The Buyer is willing to execute and
  deliver to the Builder the Mortgage, Assignment and the Time Charter
  Assignment (each as hereinafter defined) in respect of the Vessel as security
  for the payment of the postponed part of the final instalment referred to in
  Recital (B) above. D. Danaos Corporation (the “Guarantor”) is willing to
  execute and deliver to the Builder the Letter of Guarantee (as hereinafter
  defined) guaranteeing the payment of the postponed part of the final
  instalment referred to in Recital (B) above. E. The Builder is willing to
  agree to such deferral of part of the final instalment upon the terms and
  conditions herein below. NOW, THEREFORE, for good and valuable consideration
  the Parties hereby agree to enter into this AGREEMENT on the following terms
  and conditions. 1 DEFINITIONS “Assignment” has the meaning given in Clause
  3.4. “Business Day” means a day (other than a Saturday or Sunday) on which
  banks are open for general business in London, New York Athens and Seoul.
  “Delivery Instalment” has the meaning given in Clause 2.1. “Delivery
  Instalment Due Date” has the meaning given in Clause 2.2. “Due Date” means
  the Delivery Instalment Due Date and any Post Delivery Instalment Due Date
  and in the plural means both of them. “Event of Default” has the meaning
  given in Clause 8. “First Loan” means the Loan or to be made available to,
  amongst others, the Buyer by the First Mortgagee in respect of (inter alia)
  the Vessel.

  

 

	
  

  	
   “First Mortgagee” means The Royal Bank of
  Scotland plc. “First Security” means (i) the first preferred Liberian
  mortgage over the Vessel in favour of the First Mortgagee and (ii) the first
  priority assignment of the earnings, insurance and requisition compensation
  relating to the Vessel in favour of the First Mortgagee. “Intercreditor Deed”
  means the intercreditor deed between the First Mortgagee and the Builder
  under which the Post Delivery Instalment shall rank behind the claims of the
  First Mortgagee under the First Loan entered into or to be entered into
  between (inter alia) the First Mortgagee and the Buyer providing (inter alia)
  for the First Security. “Letter of Guarantee” has the meaning given in Clause
  3.2. “Mortgage” has the meaning given in Clause 3.3. “Post Delivery Instalment”
  has the meaning given in Clause 2.1. “Post Delivery Instalment Due Date” has
  the meaning given in Clause 2.3. “Promissory Note” has the meaning given in
  Clause 3.1. “Second Security” means the Mortgage, the Assignment and the Time
  Charter Assignment. “Tax” means any tax (other than tax on the overall income
  of the Builder, levy, impost, duty or other charge or withholding of a
  similar nature (including any penalty or interest payable in connection with
  any failure to pay or any delay in paying any of the same). “Tax Deduction”
  means a deduction or withholding for or on account of Tax from a payment
  under a Transaction Document except for those imposed in Korea upon the
  payment of the Post Delivery Instalment. “Time Charterer” means Hyundai
  Merchant Marine Co., Ltd of Korea. “Time Charter” means the time charter
  dated 18 October 2007 as amended by addendum no. 1 and addendum no. 2 between
  the Buyer and the Time Charterer. “Time Charter Assignment” has the meaning
  given in clause 3.5 “Total Loss” means: (a) actual, constructive,
  compromised, agreed or arranged total loss of the Vessel; (b) requisition for
  title or other compulsory acquisition of the Vessel otherwise than by
  requisition for hire; (c) capture, seizure, arrest, detention, or
  confiscation of the Vessel by any person, governmental authority or
  government or by persons acting or purporting to act on behalf of any
  government or any other person which deprives the Buyer of the use of the
  Vessel for 90 days or more after that occurrence; and (d) requisition for
  hire of the Vessel by any government or by persons acting or purporting to
  act on behalf of any government which deprives the Buyer of the use of the
  Vessel for a period of 90 days or more. “Transaction Documents” means the
  Contract, this Agreement, the Second Security, the Promissory Notes, the
  Letter of Guarantee, the Time Charter Assignment and the Intercreditor Deed.

  

 

	
  

  	
  2 POSTPONEMENT
  OF PAYMENT OF INSTALMENTS 2.1 The final instalment of the Contract Price
  under the Contract will be payable by the Buyer as the delivery instalment
  (the “Delivery Instalment”) and the post delivery instalment (the “Post
  Delivery Instalment”). 2.2 The Delivery Instalment in the sum of U.S. Dollars
  Fifty Eight Million Five Hundred and Two Thousand and Thirty Five (US$58,502,035)
  plus any increase or minus any decrease due to modifications and/or
  adjustment, if any, to the Contract Price under Articles III and V of the
  Contract arising prior to delivery of the Vessel shall be paid by the Buyer
  on the delivery of the Vessel which is scheduled on May 3, 2012 or such later
  date as is permissible pursuant to the Contract (the “Delivery Instalment Due
  Date”). 2.3 The Post Delivery Instalment amounting to U.S. Dollars Twenty
  Four Million Nine Hundred Fifty Five Thousand Nine Hundred and Sixty Five
  (US$24,955,965) shall be paid over a period of four (4) years from the actual
  delivery of the Vessel in seven (7) equal instalments the first due date
  being 3 May 2013 and the remaining six instalments payable semi-annually thereafter
  as listed in Table 1. (each a “Post Delivery Instalment Due Date”). Interest
  shall accrue at the rate of eight per cent (8%) per annum on all of the
  outstanding balance of the Post Delivery Instalment which shall be paid by
  the Buyer semi-annually the first due date being 3 November 2012 and at six
  month intervals thereafter as listed in Table 1. The rate of interest shall
  be increased to ten per cent (10%) per annum in the event of default.
  <Repayment schedule for the Post Delivery Instalment based on the the
  delivery of the Vessel on May 3, 2012.> Table 1 PAYMENT DUE DATE
  PRINCIPAL(A) INTEREST(B) TOTAL(A+B) 1st 3-Nov-12 - $1,020,421 $1,020,421
  3-May-13 $3,565,137 $1,003,784 $4,568,921 2nd 3-Nov-13 $3,565,137 $874,647
  $4,439,784 3rd 3-May-14 3-Nov-14 $3,565,137 $3,565,137 $716,988 $583,098
  $4,282,125 $4,148,235 4th 5th 3-May-15 $3,565,137 $430,193 $3,995,330 6th
  3-Nov-15 $3,565,137 $291,549 $3,856,686 7th 3-May-16 $3,565,143 $144,190
  $3,709,333 TOTAL $24,955,965 $5,064,870 $30,020,835  The figures in above Table 1 shall be
  adjusted in accordance with Clause 2.3 if the actual delivery of the Vessel
  is other than May 3, 2012. 2.4 It is understood and agreed by the Builder and
  the Buyer that no payments to be made by the Buyer pursuant to this Clause 2
  shall be delayed or withheld by the Buyer due to any dispute or disagreement
  of whatsoever nature arising between the Builder and the Buyer. If a Due Date
  would otherwise fall on a day which is not a Business Day, that Due Date will
  instead be on the next Business Day in that calendar month (if there is one)
  or the preceding Business Day (if there is not). 2.5 The Buyer shall make all
  payments without any Tax Deduction, unless a Tax Deduction is required by
  law.

  

 

	
  

  	
  2.6 If a Tax
  Deduction is required by law to be made by the Buyer, the amount of the
  payment due from the Buyer shall be increased to an amount which (after
  making any Tax Deduction) leaves an amount equal to the payment which would
  have been due if no Tax Deduction had been required. 2.7 The Buyer may at any
  time, if it gives the Builder not less than 15 days’ prior notice, prepay the
  whole or part of the Post Delivery Instalment, but if in part then the Buyer
  shall state which of the Promissory Notes is to be prepaid and such
  Promissory Note shall be prepaid in full and not in part. Any prepayment
  shall be made together with accrued interest. 2.8 Article X. 8 of the
  Contract shall be amended and shall hereafter be read so that at the end of
  the first paragraph the following wording is inserted:- “In the event that
  the BUYER pays to the BUILDER any amount in excess of the pre-delivery
  instalments, the BUILDER will procure that Woori Bank of Korea will amend its
  letter of guarantee (or arrange for the issue of a replacement) so as to
  include such excess amount. 3 SECURITIES TO BE FURNISHED BY THE BUYER As a
  condition precedent to the effectiveness of this Agreement the Buyer shall
  furnish the Builder with securities as follows upon the delivery of the
  Vessel. 3.1 Promissory Notes The Buyer shall execute and deliver to the
  Builder seven (7) promissory notes (each individually a “Promissory Note” and
  collectively the “Promissory Notes”) as follows: (a) Each Promissory Note
  shall relate to an instalment under the Post Delivery Instalment and shall be
  for a payment of an amount of principal (A) and interest (B) as listed in
  Table 1 next to the corresponding instalment to which that Promissory Note
  relates. (b) Each Promissory Note shall be in the form annexed hereto as
  Exhibit “A”. 3.2 Letter of Guarantee The Buyer shall furnish the Builder with
  an unconditional letter of guarantee, being in the form annexed hereto as
  Exhibit “B” and in respect of each Promissory Note issued by the Buyer (each
  individually a “Letter of Guarantee” and collectively the “Letters of
  Guarantee”) each such Letter of Guarantee to be duly executed and delivered
  by the Guarantor guaranteeing the payment by the Buyer of the principal sums
  and interest specified in the relevant Promissory Note. 3.3 Second Preferred
  Mortgage on the Vessel The Buyer shall execute and deliver to the Builder a
  second preferred Liberian mortgage over the Vessel in the maximum principal
  amount of US$32,442,755 in form and substance satisfactory to the Builder
  (the “Mortgage”) as security for (i) the Buyer’s obligations under the
  Promissory Notes and (ii) the obligations of the Buyer under this Agreement.

  

 

	
  

  	
  3.4 Second
  Priority Assignment The Buyer shall execute and deliver to the Builder a
  second priority assignment of its interests in the earnings, insurances and
  requisition compensation of the Vessel in form and substance satisfactory to
  the Builder (the “Assignment”) as security for (i) the Buyer’s obligations
  under the Promissory Notes and (ii) the obligations of the Buyer under this
  Agreement. 3.5 Time Charter Assignment The Buyer shall execute and deliver to
  the Builder a second priority assignment of its interests in the Time Charter
  of the Vessel in form and substance satisfactory to the Builder (the “Time
  Charter Assignment”) as security for (i) the Buyer’s obligations under the
  Promissory Notes and (ii) the obligations of the Buyer under this Agreement.
  4 OTHER CONDITIONS PRECEDENT The Buyer shall, on or prior to delivery of the
  Vessel, provide the following to the Builder: 4.1 satisfactory evidence that
  the earnings, insurance and requisition compensation of the Vessel are free
  from encumbrances other than the First Security. 4.2 satisfactory evidence
  that the Vessel is insured and classed as provided by the terms of the
  [Mortgage] and that the Mortgage is duly registered on the Liberian Ship
  Register; 4.3 certified true copies of the constitutional documents of the
  Buyer and the Guarantor together with certified true copies of board
  resolutions of the Buyer and certified extract of the standing resolutions of
  the Guarantor and a power of attorney authorising the execution of this
  Agreement, the Second Security, the Promissory Notes and the Letters of
  Guarantee and to which the Buyer and the Guarantor is, or will be a party;
  4.4 certified true copies of all licenses, consents or approvals which may be
  required by the Buyer or the Guarantor in connection with the execution and
  validity and enforceability of any of the documents to which they are a
  party; 4.5 originals or certified true copies from the Buyer’s and the
  Guarantor’s agents for receipt of service and proceedings accepting their
  appointment under each of the documents in which they are to be appointed as
  agents; 4.6 the Intercreditor Deed duly signed; 4.7 satisfactory legal
  opinions addressed to the Builder on matters of Liberian and Marshall Islands
  law relating to the due execution of all documents by the Buyer and the
  Guarantor and the validity of this Agreement, the Promissory Notes, the
  Letter of Guarantee and all of the Second Security executed in favour of the
  Builder. 5 DEFAULT INTEREST If the Builder does not receive on the due date
  any sum due from the Buyer under this Agreement (or any other agreement
  entered into by the Buyer in connection with this Agreement), the Buyer shall
  on demand pay interest on such sum from and including the due date to the
  date of actual payment (as well as before judgment) at the rate per annum of
  ten per cent (10%).

  

 

	
  

  	
  6 CALCULATION
  OF INTEREST All payments of interest hereunder shall accrue from day-to-day and
  shall be calculated on the basis of the actual number of days elapsed in a
  three hundred and sixty (360) day year. 7 GENERAL UNDERTAKINGS The Buyer
  further undertakes that, throughout the period from the date hereof until the
  full amount of the Delivery Instalment and Post Delivery Instalment together
  with accrued interest thereon has been paid to the Builder: 7.1 it will
  ensure that at all times the claims of the Builder against it under this
  Agreement rank at least pari passu with the claims of all its other unsecured
  creditors save those whose claims are preferred by any bankruptcy, insolvency
  or other similar laws of general application; 7.2 it will ensure that at all
  times the insured value of the Vessel in the hull and machinery policies
  shall in no event be less than one hundred and twenty five per cent (125%)
  of, the contract price under the Contract; the Buyer will (i) upon the
  Builder’s written request provide the Builder with copies of the said
  insurance policies; and (ii) notify the Builder promptly and in writing of
  any changes to the insured value of the Vessel whether made pursuant to this
  undertaking or otherwise; 7.3 it shall procure that the interest of the
  Builder shall be endorsed on the relevant hull and machinery policy by
  incorporation of a loss payable clause (in a form agreed by the Builder) and
  notice of assignment of insurances signed by the Buyer and that the Builder
  shall be furnished with proforma copies thereof and a letter of undertaking
  in such form as is customary; 7.4 it shall procure that the interest of the
  Builder shall be endorsed on the Certificate of Entry or policy of the
  protection and indemnity and/or war risks association by incorporation of a
  loss payable clause (in a form agreed by the Builder) and notice of assignment
  of insurances signed by the Buyer and that the Builder shall be furnished
  with a copy of the certificate of entry or policy and a letter of undertaking
  in such form as is customary by the P&I association; 7.5 it shall ensure
  that the earnings, insurances and requisition compensation of the Vessel are
  free from encumbrances other than the First Security and Second Security; 7.6
  it shall not create or permit to subsist any mortgage, charge, pledge, lien
  or other security interest securing any obligation of any person or any other
  agreement or arrangement having a similar effect over any of its assets other
  than the First Security and Second Security and liens arising in the ordinary
  course of business or by operation of law. 8 EVENTS OF DEFAULT Each of the
  following events shall constitute an event of default (each an “Event of
  Default”) (whether such event shall occur or come about voluntarily or
  involuntarily or by operation of law or regulation or pursuant to, or in
  compliance with, any judgment, decree or order of any court or other
  authority): 8.1 The Buyer fails to pay any amount (whether in respect of
  principal, interest or otherwise) due and payable by the Buyer to the Builder
  under this Agreement or any of the Promissory Notes on the due date and such
  failure is not remedied within 15 days; or

  

 

	
  

  	
  8.2 the Buyer
  or the Guarantor defaults in the due performance and discharge of any of its
  other duties or liabilities under this Agreement or the Transaction Documents
  to which it is a party unless such failure, in the Builder’s opinion, is
  capable of remedy and is remedied within 30 days of such failure; or 8.3 any
  order shall be made by any competent court or other competent authority or a
  resolution shall be passed by the Buyer or the Guarantor, for the appointment
  of a liquidator of, or otherwise for the winding-up or dissolution of the
  Buyer or the Guarantor, except for the purpose of amalgamation or
  re-organisation (not involving or arising out of insolvency) the terms of
  which shall have received the prior written approval of the Builder; or 8.4
  an administrator, receiver, administrative receiver, manager, trustee or
  similar official is appointed (and such appointment is not cancelled or
  withdrawn within 30 days) for all or a part of the assets and undertaking of
  the Buyer having a value of at least $500,000 or the Guarantor having a value
  of at least $5,000,000; or 8.5 it becomes unlawful for the Buyer or the
  Guarantor to perform and discharge any of its duties and liabilities
  contained in this Agreement and/or the Transaction Documents to which it is a
  party or for the Builder to exercise any of its rights and powers under this
  Agreement and/or the Transaction Documents; or 8.6 anything is done or
  omitted to be done by the Buyer or the Guarantor which materially prejudices
  the security under the second security and has not been cured within 30 days
  of the builder giving notice thereof to the Buyer; or 8.7 the First Loan is
  declared due and payable prior to its stated maturity by reason of an event of
  default (howsoever defined), or 8.8 an event of default occurs under the
  Shipbuilding Contract as amended in respect of Hull No. S461. 9 POWERS ON
  DEFAULT 9.1 Upon the occurrence of an Event of Default, the Builder may, by
  notice to the Buyer, declare that the Post Delivery Instalment together with
  accrued interest is either immediately due and payable or payable on demand,
  whereupon the Post Delivery Instalment together with accrued interest shall
  become immediately due and payable or (as the case may be) payable on demand
  being made by the Builder. 9.2 In addition the Builder may take any other
  action, exercise any other right or pursue any other remedy conferred upon
  the Builder by this Agreement and/or the Transaction Documents or by any
  applicable law or regulation or otherwise as a consequence of such Event of
  Default. 9.3 Save for the amendments contained herein, all other terms and
  conditions of the Contract shall remain valid and in full force. 9.4 The
  Builder’s rights under this Clause are subject to the provisions of the
  Intercreditor Deed. 10 TOTAL LOSS Following the occurrence of a Total Loss
  with respect to the Vessel, the Post Delivery Instalment together with
  accrued interest on the Post Delivery Instalment shall become due and payable
  on the earlier of (i) 120 days after such Total Loss has occurred or is
  deemed to

  

 

	
  

  	
  have occurred,
  and (ii) the day on which insurance proceeds or other compensation monies in
  respect of the Total Loss have been received by the party entitled thereto.
  11 [NOT USED] 12 COSTS AND EXPENSES The Buyer shall promptly on demand pay
  the Builder the amount of all costs and expenses (including legal fees)
  reasonably incurred by the Builder in connection with the negotiation,
  preparation, printing and execution of this Agreement and any other documents
  referred to in this Agreement; and any other documents executed after the
  date of this Agreement. 13 CONFIDENTIALITY This Agreement shall be kept
  strictly private and confidential and shall not be disclosed to any other third
  party. Notwithstanding the foregoing, disclosure is permitted (i) to the
  Buyer’s and Guarantor’s financiers and potential financiers, (ii) to the
  Buyer’s and Guarantor’s shareholders and affiliates, (iii) to Buyer’s and
  Guarantor’s legal and financial advisers and (iv) as may be required by law
  (including by virtue of rules and regulations of any securities exchange
  authorities). 14 ENTIRE AGREEMENT This Agreement shall constitute an integral
  part of the Contract and shall constitute the only and entire agreement
  between the Parties with respect to the subject matter hereof and unless
  otherwise expressly agreed between the Parties, all other agreements, oral or
  written, made and entered into between the Parties prior to the execution of
  this Agreement shall be null and void. 15 ENFORCEMENT AND JURISDICTION This
  Agreement and any non-contractual obligations arising in connection with this
  Agreement is governed by and construed in accordance with English law. 15.1
  The High Court in London England has exclusive jurisdiction to settle any
  dispute arising out of or in connection with this Agreement (including a
  dispute regarding the existence, validity or termination of this Agreement)
  (a “Dispute”). 15.2 The Parties agree that the High Court in London England is
  the most appropriate and convenient court to settle Disputes and accordingly
  no Party will argue to the contrary. 15.3 Clause 15.2 is for the benefit of
  the Builder only. As a result, the Builder shall not be prevented from taking
  proceedings relating to a Dispute in any other courts with jurisdiction. 15.4
  To the extent allowed by law, the Builder may take concurrent proceedings in
  any number of jurisdictions. 15.5 Without prejudice to any other mode of
  service allowed under any relevant law, the Buyer: 15.5.1 irrevocably
  appoints Danaos Management Consultants whose registered office is at 4
  Staples Inn, Holborn, London WC1V 7QU as its agent for service of process in
  relation to any proceedings before the English courts in connection with this
  Agreement or any Transaction Document; and

  

 

	
  

  	
  15.5.2 agree
  that failure by a process agent to notify any Buyer of the process will not
  invalidate the proceedings concerned. IN WITNESS WHEREOF, the Parties have
  caused this Agreement to be duly executed on the day and year first above
  written. SIGNATURES For and on behalf of MEGACARRIER (NO. 3) CORP .
  By:[ILLEGIBLE] Name: Zoi Lappa Title: Attorney-in-fact In Witness: M.
  Papanikolaou MICHALIS PAPANIKOLAOU ATTORNEY AT LAW DANAOS SHIPPING CO., LTD.
  14, AKTI KANDYLI 118 52 PIRALUS For and on behalf of HYUNDAI SAMHO HEAVY
  INDUSTRIES CO., LTD. By: Name: E.C. Han Title: Attorney-in-fact

  

 

	
  

  	
   EXHIBIT A PROMISSORY NOTE NO. US$ Date: 20
  For value received, Megacarrier (No. 3) Corp. a corporation duly organized
  and existing under the laws of Liberia having its registered office at 80
  Broad Street, Monrovia, Liberia hereby unconditionally promises to pay on to
  Hyundai Samho Heavy Industries Co., Ltd. or its nominee or its assignees, or
  any other holder hereof from time to time or its order the principal sum of
  US$ only, and to pay interest on the said principal sum from and including
  [•] at the rate of eight per cent (8%) per annum, the first payment of
  interest to be due and payable on [•] and thereafter payable semi-annually on
  the [•] and on the [•] of each and every year, until maturity (whether by
  acceleration or otherwise) and thereafter at the rate of ten per cent (10%)
  per annum until the principal sum and the interest thereon are fully paid.
  Interest shall be calculated on the basis of the actual days elapsed and a
  year of three hundred sixty (360) days. Both principal and interest shall be
  payable in United States Dollars in immediately available funds at the
  account of the [Korea Exchange Bank, Seoul, Korea] (Account No. [•] with [JP
  Morgan Chase Bank, New York, U.S.A.] without any deduction or withholding for
  or on account of any present or future taxes or other charges. If the maker
  of this note is required to make any such deduction or withholding from any
  payment hereunder, the maker shall pay such additional amount as may be
  necessary in order that the actual amount received after deduction or
  withholding shall be equal to the amount that would have been received if
  such deduction or withholding were not required. This note is one of a series
  of seven (7) promissory notes in the aggregate principal amount of US$[ ] of
  like form and tenor except their respective numbers, principal amounts and
  dates of maturity (together the “Series Notes”). Each of said notes is
  secured by a letter of guarantee issued by DANAOS CORPORATION a corporation
  duly organized and existing under the laws of [ ] having its registered
  office at [ ]. In the event of a default in the payment of the principal when
  the same shall become due and payable, then interest at the rate of ten per
  cent (10%) per annum on the principal and any accrued interest from the due
  date to the date of payment shall be due and payable together with the
  principal and accrued interest. In the event default shall be made in the
  payment of the principal or interest on this note, or in the payment of the
  principal of or interest on any of the other Series Notes, as and when the
  same shall become due and payable and such default shall continue for a
  period of fifteen (15) days, the holder of this note may at its option
  declare the principal of and accrued interest on this note to be forthwith
  due and payable, whereupon the same shall be forthwith due and payable, and
  the holder hereof shall have the other remedies herein or by law provided.
  The maker of this note may, if it gives the holder not less than fifteen (15)
  days’ prior notice, prepay the whole of this note by payment of the principal
  hereof together with accrued interest hereon to and including the date of
  prepayment, provided, however that there shall be no default in payment of
  principal or interest on this note or on any of the other Series Notes as of
  the date of such prepayment.

  

 

	
  

  	
  This note may
  be transferred or assigned by the holder of this note to any bank with the
  prior notice to the maker. The maker unconditionally agrees to promptly pay
  to and reimburse the holder hereof on demand any and all reasonable costs and
  expenses including, without limitation to, reasonable attorney’s fees
  incidental to the enforcement or attempted enforcement of this note. The
  holder of this note shall be under no obligation to make presentment,
  protest, demand or notice of any kind whatsoever for the payment of this
  note. The maker and the endorsers of this note hereby waive the right to
  interpose any defense, set-off or counterclaim of any nature or description
  in any action or proceeding arising on, out of, under or by reason of this
  note. The maker hereby authorizes and empowers the holder of this note to
  acknowledge on the maker’s behalf by endorsement the receipt of the payment
  or prepayment of the principal sum or interest thereon. Upon full payment of
  all sums payable on this note and the other Series Notes, the holder of this
  note shall immediately return this note to the maker with such endorsement to
  the effect that this note has been fully paid. This note and any
  non-contractual obligations arising in connection with this note shall be
  governed by and construed in accordance with the laws of England. The maker
  and the endorsers hereby consent to any legal action or proceeding in
  relation to this note being brought in the High Court in London, England and
  hereby irrevocably waives any immunity from suit, attachment, (before or
  after judgment) or execution on a judgment to which they or their property
  may be entitled. The maker and the endorsers hereby irrevocably submit to the
  exclusive jurisdiction of the courts of England. Without prejudice to any
  other mode of service allowed under any relevant law, the undersigned:
  irrevocably appoints [ ] whose registered office is at [ ] as its agent for
  service of process in relation to any proceedings before the High Court in
  London, England in connection with this note; and agrees that failure by a
  process agent to notify the undersigned of the process will not invalidate
  the proceedings concerned. The maker hereby certifies and declares that all
  acts, conditions and things required to be done and performed and to have
  happened precedent to the creation and issuance of this note, and to constitute
  this note the valid obligation of the maker in accordance with its terms,
  have been done and performed and have happened in due and strict compliance
  with all applicable laws and regulation. IN WITNESS WHEREOF, the undersigned
  has caused this note be signed in its corporate name by its representative
  thereunto duly authorized on the day and year first above written.

  

 

	
  

  	
  For and on
  behalf of [MEGACARRIER (NO. 3) CORP.] By Name: Title:

  

 

	
  

  	
   EXHIBIT B Date: 20 Hyundai Samho Heavy
  Industries Co., Ltd. 1700, Yongdang-Ri, Samho-Eup, Youngam-Gun, Chollanam-Do,
  KOREA LETTER OF GUARANTEE NO. Gentlemen : In consideration of your completing
  and delivering one (1) 12,600 TEU Class Container Carrier, your Hull No. 458
  (hereinafter called the “Vessel”), to MEGACARRIER (NO. 3) CORP. (hereinafter
  called the “Buyer”), on deferred payment basis, under a certain shipbuilding
  Contract dated 28 September 2007, as amended, entered into by and between you
  and the Buyer, the undersigned, as primary obligor and not as surety merely,
  does hereby irrevocably, absolutely and unconditionally guarantee jointly and
  severally the due and punctual payment (whether at the stated maturity, by
  acceleration or otherwise) by the Buyer of the promissory note No. in the
  principal amount of US$ to be due and payable on to be issued by the Buyer to
  the order of yourself upon delivery of the Vessel pursuant to the said
  shipbuilding Contract, and also guarantee the due and punctual payment by the
  Buyer of interest on this promissory note No. , the first payment of interest
  to be due and payable on [ ] and thereafter payable semi-annually, at the
  rate of eight per cent (8%) per annum until maturity (by acceleration or
  otherwise) and thereafter at the rate of ten per cent (10%) per annum until
  full payment. Interest shall be calculated on the basis of the actual days
  elapsed and a year of three hundred sixty (360) days. The undersigned hereby
  waives the right to interpose any defense, set-off or counter-claim of any
  nature or description in any action or proceedings arising on, out of, under
  or by reason of the notes or this letter of guarantee or said shipbuilding
  Contract. The Promissory Note No. is one of a series of (7) Promissory Notes
  in the aggregate principal amount of US$ [ ]. In the event that the Buyer
  fails to pay the said Promissory Note and/or interest thereon on the maturity
  date (by acceleration or otherwise) in accordance with the terms of the said
  promissory notes, the undersigned will pay to you the amounts due immediately
  upon receipt by us of written demand from you including a statement that the
  Buyer is in default of payment of the said promissory notes and/or interest
  thereon, without requesting you to take any or further procedure or step
  against the Buyer or with respect to the promissory notes and/or interest
  thereon, together with default interest on any such amounts demanded by you
  as aforesaid from the due date thereof until the payment in full of such
  amounts at the rate of ten per cent (10%) per annum payable in accordance
  with the terms of the said promissory notes and any and all reasonable costs
  and expenses including, without limitation, reasonable attorney’s fees
  incidental to the enforcement or attempted enforcement of this guarantee. The
  undersigned hereby consents to any renewals, changes, extensions or partial
  payments of the promissory notes or the indebtedness for which they are given
  without prior notice to us, and consents that no such renewals, changes,
  extensions or partial payments shall discharge any party to the promissory
  note or us from any liability thereon or hereon in whole or in part (other
  than to the extent of any such partial prepayment).

  

 

	
  

  	
  The undersigned
  hereby agrees that this guarantee and undertaking hereunder shall be
  assignable to and shall inure to the benefit of the holder of the promissory
  note No. as if each of them was originally named herein. The payment by the
  undersigned under this guarantee shall be made in United States Dollars in
  immediately available funds by telegraphic transfer to the account of the
  [Korea Exchange Bank, Seoul, Korea] (Account No. [•] with [JP Morgan Chase
  Bank, New York, U.S.A.] in favour of you or your assignee without deduction,
  withholding or set-off. In the event that any deduction or withholding is imposed
  on any payment to be made hereunder by law or by any taxing authority, the
  undersigned agrees to pay such additional amount as may be necessary in order
  that the actual amount received after deduction or withholding shall be equal
  to the amount that would have been received if such deduction or withholding
  were not required after allowance for any increase in taxes or charges
  payable by virtue of the receipt of such additional amount. This letter of
  guarantee shall come into full force and effect upon delivery of the Vessel
  by you to the Buyer and shall continue in force and effect until the full
  payment of the promissory note No. and interest thereon whichever occurs
  last. The obligation of the undersigned hereunder is joint and several with
  any other guarantee or security and absolute and unconditional irrespective
  of any legal limitation, disability, incapacity or other circumstance
  relating to the Buyer or any other person, or any amendment or supplement to
  the said shipbuilding Contract, the promissory notes or any other document,
  instrument or agreement contemplated therein or of the genuineness, legality,
  validity, regularity or enforceability of the said shipbuilding Contract, the
  Promissory Notes or any other documents, instruments or agreements contemplated
  therein. This shall be a continuing guarantee and shall cover and secure any
  ultimate balance owing under the promissory note No. , but you shall not be
  obliged to exhaust your recourse against the Buyer or the securities which
  you may hold before being entitled to payment from the undersigned of the
  obligation hereby guaranteed. The undersigned hereby represents and warrants
  that (A) the undersigned is a company duly organised and validly existing and
  in full compliance with the laws of the [ ] and has full legal right, power
  and authority to execute this letter of guarantee and to perform its
  obligations hereunder, (B) it has taken all appropriate and necessary
  corporate action to authorize the issuance of this letter of guarantee and
  the performance by it of its obligations hereunder, (C) the execution,
  delivery and performance of this letter of guarantee and the covenants herein
  contained will not violate or contravene any provisions of any applicable
  treaty, law or regulation or any judgment order or decree of any court, or
  governmental agency, or violate or result in breach of its constitutional
  documents, (D) this letter of guarantee constitutes the legal, valid and
  binding obligations of the undersigned enforceable in accordance with its terms
  subject to overriding principles, if any, of insolvency law, and (E) it has
  obtained all necessary consents, licenses, approvals, and authorisations, and
  registrations or declarations, with any governmental authority required in
  connection with the validity and enforceability of its guarantee and the same
  are in full force and effect. This letter of guarantee and any
  non-contractual obligations arising in connection with this letter of
  guarantee shall be governed by and construed in accordance with the laws of
  England. The undersigned hereby irrevocably consents that any legal action or
  proceeding against the undersigned, or any of its property, with respect to
  this letter of guarantee may be brought in the High Court in London, England,
  and by execution and delivery of this letter of guarantee the undersigned
  hereby accepts in regard to any such action or proceeding, for itself and in
  respect of its property, generally and unconditionally the exclusive
  jurisdiction of the aforesaid court.

  

 

	
  

  	
   Notwithstanding anything to the contrary
  contained in this letter of guarantee or any of the documents executed as
  security therefore, the agreement, obligations and liabilities of the
  undersigned herein contained are joint and several and shall be construed accordingly.
  The undersigned agrees and consents to be bound by this letter of guarantee
  notwithstanding that this letter of guarantee may be invalid or unenforceable
  against the undersigned, whether or not the deficiency is known to yourself.
  You shall be at liberty to release the undersigned from this letter of
  guarantee and to compound with or otherwise vary or agree to vary the
  liability or to grant time and indulgence to make other arrangements with the
  undersigned without prejudicing or affecting the rights and remedies of
  yourself against the other undersigned. Without prejudice to any other mode
  of service allowed under any relevant law, the undersigned irrevocably
  appoints [ ] whose registered office is at [ ] as its agent for service of
  process in relation to any proceedings before the High Court in London,
  England in connection with this letter of guarantee; and agrees that failure
  by a process agent to notify the undersigned of the process will not
  invalidate the proceedings concerned. The undersigned represents and warrants
  that this letter of guarantee is a commercial act and that the undersigned is
  not entitled to claim immunity from legal proceedings with respect to itself
  or any of its properties or assets on the grounds of sovereignty or otherwise
  under any law. To the extent that the undersigned or any of its properties or
  assets has or hereafter may acquire any right to immunity from set-off, legal
  proceedings, attachment prior to judgment, other attachment or execution of
  judgment on the grounds of sovereignty or otherwise, the undersigned for
  itself and its properties and other assets hereby irrevocably waives such
  right to immunity in respect of its obligations under this letter of
  guarantee. After this letter of guarantee shall have expired as aforesaid,
  you will return the same to the undersigned without any request from the
  undersigned. IN WITNESS WHEREOF, the undersigned has caused this letter of
  guarantee to be executed and delivered by its duly authorised representative
  on the day and year above written. Yours very truly, for and on behalf of
  DANAOS CORPORATION. By Name: Title : for and on behalf of

  

 

 

	
  

  	
  AGREEMENT This
  Agreement is made on this 27th day of September 2010 by and between: (1)
  MEGACARRIER (NO.4) CORP. (the “Buyer”); and (2) HYUNDAI SAMHO HEAVY
  INDUSTRIES CO., LTD. (the “Builder”), (hereinafter the parties referred to
  individually as the “Party” and collectively as the “Parties”), to amend and
  supplement the Contract as defined hereinafter. WHEREAS: A. The Buyer and the
  Builder entered into a shipbuilding contract on 28 September, 2007 as amended
  and supplemented from time to time (the “Contract”) for the construction and
  sale of one (1) 12,600 TEU class container carrier, having the Builder’s Hull
  No S459 (the “Vessel”). B. The Buyer desires to postpone part of the final
  instalment of the Contract Price (as that term is defined in the Contract)
  until after delivery of the Vessel. C. The Buyer is willing to execute and
  deliver to the Builder the Mortgage, Assignment and the Time Charter
  Assignment (each as hereinafter defined) in respect of the Vessel as security
  for the payment of the postponed part of the final instalment referred to in
  Recital (B) above. D. Danaos Corporation (the “Guarantor”) is willing to
  execute and deliver to the Builder the Letter of Guarantee (as hereinafter
  defined) guaranteeing the payment of the postponed part of the final
  instalment referred to in Recital (B) above. E. The Builder is willing to
  agree to such deferral of part of the final instalment upon the terms and
  conditions herein below. NOW, THEREFORE, for good and valuable consideration
  the Parties hereby agree to enter into this AGREEMENT on the following terms
  and conditions. 1 DEFINITIONS “Assignment” has the meaning given in Clause
  3.4. “Business Day” means a day (other than a Saturday or Sunday) on which
  banks are open for general business in London, New York Athens and Seoul.
  “Delivery Instalment” has the meaning given in Clause 2.1. “Delivery
  Instalment Due Date” has the meaning given in Clause 2.2. “Due Date” means
  the Delivery Instalment Due Date and any Post Delivery Instalment Due Date
  and in the plural means both of them. “Event of Default” has the meaning
  given in Clause 8. “First Loan” means the Loan made or to be made available
  to, amongst others, the Buyer by the First Mortgagee in respect of (inter alia)
  the Vessel.

  

 

	
  

  	
  “First
  Mortgagee” means the agent that the lenders, HSH Nordbank AG, Piraeus Bank
  A.E., and Aegean Baltic Bank S.A., will appoint. “First Security” means (i)
  the first preferred Liberian mortgage over the Vessel in favour of the First
  Mortgagee and (ii) the first priority assignment of the earnings, insurance
  and requisition compensation relating to the Vessel in favour of the First
  Mortgagee. “Intercreditor Deed” means the intercreditor deed between the
  First Mortgagee and the Builder under which the Post Delivery Instalment shall
  rank behind the claims of the First Mortgagee under the First Loan entered
  into or to be entered into between (inter alia) the First Mortgagee and the
  Buyer providing (inter alia) for the First Security. “Letter of Guarantee”
  has the meaning given in Clause 3.2. “Mortgage” has the meaning given in
  Clause 3.3. “Post Delivery Instalment” has the meaning given in Clause 2.1.
  “Post Delivery Instalment Due Date” has the meaning given in Clause 2.3.
  “Promissory Note” has the meaning given in Clause 3.1. “Second Security”
  means the Mortgage, the Assignment and the Time Charter Assignment. “Tax”
  means any tax (other than tax on the overall income of the Builder, levy,
  impost, duty or other charge or withholding of a similar nature (including
  any penalty or interest payable in connection with any failure to pay or any
  delay in paying any of the same). “Tax Deduction” means a deduction or
  withholding for or on account of Tax from a payment under a Transaction
  Document except for those imposed in Korea upon the payment of the Post
  Delivery Instalment. “Time Charterer” means Hyundai Merchant Marine Co., Ltd
  of Korea. “Time Charter” means the time charter dated 18 October 2007 as
  amended by addendum no. 1 and addendum no. 2 between the Buyer and the Time
  Charterer. “Time Charter Assignment” has the meaning given in clause 3.5
  “Total Loss” means: (a) actual, constructive, compromised, agreed or arranged
  total loss of the Vessel; (b) requisition for title or other compulsory
  acquisition of the Vessel otherwise than by requisition for hire; (c)
  capture, seizure, arrest, detention, or confiscation of the Vessel by any
  person, governmental authority or government or by persons acting or
  purporting to act on behalf of any government or any other person which
  deprives the Buyer of the use of the Vessel for 90 days or more after that
  occurrence; and (d) requisition for hire of the Vessel by any government or
  by persons acting or purporting to act on behalf of any government which
  deprives the Buyer of the use of the Vessel for a period of 90 days or more.
  “Transaction Documents” means the Contract, this Agreement, the Second
  Security, the Promissory Notes, the Letter of Guarantee, the Time Charter
  Assignment and the Intercreditor Deed.

  

 

	
  

  	
  2 POSTPONEMENT
  OF PAYMENT OF INSTALMENTS 2.1 The final instalment of the Contract Price
  under the Contract will be payable by the Buyer as the delivery instalment
  (the “Delivery Instalment”) and the post delivery instalment (the “Post
  Delivery Instalment”). 2.2 The Delivery Instalment in the sum of U.S. Dollars
  Fifty Eight Million Five Hundred and Two Thousand and Thirty Five
  (US$58,502,035) plus any increase or minus any decrease due to modifications
  and/or adjustment, if any, to the Contract Price under Articles III and V of
  the Contract arising prior to delivery of the Vessel shall be paid by the
  Buyer on the delivery of the Vessel which is scheduled on June 7, 2012 or
  such later date as is permissible pursuant to the Contract (the “Delivery
  Instalment Due Date”). 2.3 The Post Delivery Instalment amounting to U.S.
  Dollars Twenty Four Million Nine Hundred Fifty Five Thousand Nine Hundred and
  Sixty Five (US$24,955,965) shall be paid over a period of four (4) years from
  the actual delivery of the Vessel in seven (7) equal instalments the first
  due date being 7 June 2013 and the remaining six instalments payable
  semi-annually thereafter as listed in Table 1. (each a “Post Delivery
  Instalment Due Date”). Interest shall accrue at the rate of eight per cent
  (8%) per annum on all of the outstanding balance of the Post Delivery
  Instalment which shall be paid by the Buyer semi-annually the first due date
  being 7 December 2012 and at six month intervals thereafter as listed in
  Table 1. The rate of interest shall be increased to ten per cent (10%) per
  annum in the event of default. <Repayment schedule for the Post Delivery
  Instalment based on the delivery of the Vessel on June 7, 2012.> Table I
  PAYMENT DUE DATE PRINCIPAL(A) INTEREST(B) TOTAL(A+B) 1st 7-Dec-12 -
  $1,014,875 $1,014,875 7-Jun-13 $3,565,137 $1,009,330 $4,574,467 2nd 7-Dec-13
  $3,565,137 $869,893 $4,435,030 3rd 7-Jun-14 $3,565,137 $720,950 $4,286,087
  4th 7-Dec-14 $3,565,137 $579,929 $4,145,066 5th 7-Jun-15 $3,565,137 $432,570
  $3,997,707 6th 7-Dec-15 $3,565,137 $289,964 $3,855,101 7th 7-Jun-16
  $3,565,143 $144,982 $3,710,125 TOTAL $24,955,965 $5,062,493 $30,018,458 The
  figures in above Table 1 shall be adjusted in accordance with Clause 2.3 if
  the actual delivery of the Vessel is other than 7 June, 2012. 2.4 It is
  understood and agreed by the Builder and the Buyer that no payments to be
  made by the Buyer pursuant to this Clause 2 shall be delayed or withheld by
  the Buyer due to any dispute or disagreement of whatsoever nature arising
  between the Builder and the Buyer. If a Due Date would otherwise fall on a day
  which is not a Business Day, that Due Date will instead be on the next
  Business Day in that calendar month (if there is one) or the preceding
  Business Day (if there is not). 2.5 The Buyer shall make all payments without
  any Tax Deduction, unless a Tax Deduction is required by law.

  

 

	
  

  	
  2.6 If a Tax
  Deduction is required by law to be made by the Buyer, the amount of the
  payment due from the Buyer shall be increased to an amount which (after
  making any Tax Deduction) leaves an amount equal to the payment which would
  have been due if no Tax Deduction had been required. 2.7 The Buyer may at any
  time, if it gives the Builder not less than 15 days’ prior notice, prepay the
  whole or part of the Post Delivery Instalment, but if in part then the Buyer
  shall state which of the Promissory Notes is to be prepaid and such
  Promissory Note shall be prepaid in full and not in part. Any prepayment
  shall be made together with accrued interest. 2.8 Article X. 8 of the
  Contract shall be amended and shall hereafter be read so that at the end of
  the first paragraph the following wording is inserted:- “In the event that
  the BUYER pays to the BUILDER any amount in excess of the pre-delivery
  instalments, the BUILDER will procure that Shinhan Bank of Korea will amend
  its letter of guarantee (or arrange for the issue of a replacement) so as to
  include such excess amount. 3 SECURITIES TO BE FURNISHED BY THE BUYER As a
  condition precedent to the effectiveness of this Agreement the Buyer shall
  furnish the Builder with securities as follows upon the delivery of the
  Vessel. 3.1 Promissory Notes The Buyer shall execute and deliver to the
  Builder seven (7) promissory notes (each individually a “Promissory Note” and
  collectively the “Promissory Notes”) as follows: (a) Each Promissory Note shall
  relate to an instalment under the Post Delivery Instalment and shall be for a
  payment of an amount of principal (A) and interest (B) as listed in Table 1
  next to the corresponding instalment to which that Promissory Note relates.
  (b) Each Promissory Note shall be in the form annexed hereto as Exhibit “A”.
  3.2 Letter of Guarantee The Buyer shall furnish the Builder with an
  unconditional letter of guarantee, being in the form annexed hereto as
  Exhibit “B” and in respect of each Promissory Note issued by the Buyer (each
  individually a “Letter of Guarantee” and collectively the “Letters of
  Guarantee”) each such Letter of Guarantee to be duly executed and delivered
  by the Guarantor guaranteeing the payment by the Buyer of the principal sums
  and interest specified in the relevant Promissory Note. 3.3 Second Preferred
  Mortgage on the Vessel The Buyer shall execute and deliver to the Builder a
  second preferred Liberian mortgage over the Vessel in the maximum principal
  amount of US$32,442,755 in form and substance satisfactory to the Builder
  (the “Mortgage”) as security for (i) the Buyer’s obligations under the
  Promissory Notes and (ii) the obligations of the Buyer under this Agreement.

  

 

	
  

  	
  3.4 Second
  Priority Assignment The Buyer shall execute and deliver to the Builder a
  second priority assignment of its interests in the earnings, insurances and
  requisition compensation of the Vessel in form and substance satisfactory to
  the Builder (the “Assignment”) as security for (i) the Buyer’s obligations
  under the Promissory Notes and (ii) the obligations of the Buyer under this
  Agreement. 3.5 Time Charter Assignment The Buyer shall execute and deliver to
  the Builder a second priority assignment of its interests in the Time Charter
  of the Vessel in form and substance satisfactory to the Builder (the “Time
  Charter Assignment”) as security for (i) the Buyer’s obligations under the
  Promissory Notes and (ii) the obligations of the Buyer under this Agreement.
  4 OTHER CONDITIONS PRECEDENT The Buyer shall, on or prior to delivery of the
  Vessel, provide the following to the Builder: 4.1 satisfactory evidence that
  the earnings, insurance and requisition compensation of the Vessel are free
  from encumbrances other than the First Security. 4.2 satisfactory evidence
  that the Vessel is insured and classed as provided by the terms of the
  [Mortgage] and that the Mortgage is duly registered on the Liberian Ship
  Register; 4.3 certified true copies of the constitutional documents of the
  Buyer and the Guarantor together with certified true copies of board
  resolutions of the Buyer and certified extract of the standing resolutions of
  the Guarantor and a power of attorney authorising the execution of this
  Agreement, the Second Security, the Promissory Notes and the Letters of
  Guarantee and to which the Buyer and the Guarantor is, or will be a party;
  4.4 certified true copies of all licenses, consents or approvals which may be
  required by the Buyer or the Guarantor in connection with the execution and
  validity and enforceability of any of the documents to which they are a
  party; 4.5 originals or certified true copies from the Buyer’s and the
  Guarantor’s agents for receipt of service and proceedings accepting their
  appointment under each of the documents in which they are to be appointed as
  agents; 4.6 the Intercreditor Deed duly signed; 4.7 satisfactory legal
  opinions addressed to the Builder on matters of Liberian and Marshall Islands
  law relating to the due execution of all documents by the Buyer and the
  Guarantor and the validity of this Agreement, the Promissory Notes, the
  Letter of Guarantee and all of the Second Security executed in favour of the
  Builder. 5 DEFAULT INTEREST If the Builder does not receive on the due date
  any sum due from the Buyer under this Agreement (or any other agreement
  entered into by the Buyer in connection with this Agreement), the Buyer shall
  on demand pay interest on such sum from and including the due date to the
  date of actual payment (as well as before judgment) at the rate per annum of
  ten per cent (10%).

  

 

	
  

  	
  6 CALCULATION
  OF INTEREST All payments of interest hereunder shall accrue from day-to-day
  and shall be calculated on the basis of the actual number of days elapsed in
  a three hundred and sixty (360) day year. 7 GENERAL UNDERTAKINGS The Buyer
  further undertakes that, throughout the period from the date hereof until the
  full amount of the Delivery Instalment and Post Delivery Instalment together
  with accrued interest thereon has been paid to the Builder: 7.1 it will
  ensure that at all times the claims of the Builder against it under this
  Agreement rank at least pari passu with the claims of all its other unsecured
  creditors save those whose claims are preferred by any bankruptcy, insolvency
  or other similar laws of general application; 7.2 it will ensure that at all
  times the insured value of the Vessel in the hull and machinery policies
  shall in no event be less than one hundred and twenty five per cent (125%)
  of, the contract price under the Contract; the Buyer will (i) upon the
  Builder’s written request provide the Builder with copies of the said
  insurance policies; and (ii) notify the Builder promptly and in writing of
  any changes to the insured value of the Vessel whether made pursuant to this
  undertaking or otherwise; 7.3 it shall procure that the interest of the Builder
  shall be endorsed on the relevant hull and machinery policy by incorporation
  of a loss payable clause (in a form agreed by the Builder) and notice of
  assignment of insurances signed by the Buyer and that the Builder shall be
  furnished with proforma copies thereof and a letter of undertaking in such
  form as is customary; 7.4 it shall procure that the interest of the Builder
  shall be endorsed on the Certificate of Entry or policy of the protection and
  indemnity and/or war risks association by incorporation of a loss payable
  clause (in a form agreed by the Builder) and notice of assignment of
  insurances signed by the Buyer and that the Builder shall be furnished with a
  copy of the certificate of entry or policy and a letter of undertaking in
  such form as is customary by the P&I association; 7.5 it shall ensure
  that the earnings, insurances and requisition compensation of the Vessel are
  free from encumbrances other than the First Security and Second Security; 7.6
  it shall not create or permit to subsist any mortgage, charge, pledge, lien
  or other security interest securing any obligation of any person or any other
  agreement or arrangement having a similar effect over any of its assets other
  than the First Security and Second Security and liens arising in the ordinary
  course of business or by operation of law. 8 EVENTS OF DEFAULT Each of the
  following events shall constitute an event of default (each an “Event of
  Default”) (whether such event shall occur or come about voluntarily or
  involuntarily or by operation of law or regulation or pursuant to, or in
  compliance with, any judgment, decree or order of any court or other
  authority): 8.1 The Buyer fails to pay any amount (whether in respect of
  principal, interest or otherwise) due and payable by the Buyer to the Builder
  under this Agreement or any of the Promissory Notes on the due date and such
  failure is not remedied within 15 days; or

  

 

	
  

  	
  8.2 the Buyer
  or the Guarantor defaults in the due performance and discharge of any of its
  other duties or liabilities under this Agreement or the Transaction Documents
  to which it is a party unless such failure, in the Builder’s opinion, is
  capable of remedy and is remedied within 30 days of such failure; or 8.3 any
  order shall be made by any competent court or other competent authority or a
  resolution shall be passed by the Buyer or the Guarantor, for the appointment
  of a liquidator of, or otherwise for the winding-up or dissolution of the
  Buyer or the Guarantor, except for the purpose of amalgamation or
  re-organisation (not involving or arising out of insolvency) the terms of
  which shall have received the prior written approval of the Builder; or 8.4
  an administrator, receiver, administrative receiver, manager, trustee or
  similar official is appointed (and such appointment is not cancelled or
  withdrawn within 30 days) for all or a part of the assets and undertaking of
  the Buyer having a value of at least $500,000 or the Guarantor having a value
  of at least $5,000,000; or 8.5 it becomes unlawful for the Buyer or the
  Guarantor to perform and discharge any of its duties and liabilities
  contained in this Agreement and/or the Transaction Documents to which it is a
  party or for the Builder to exercise any of its rights and powers under this
  Agreement and/or the Transaction Documents; or 8.6 anything is done or
  omitted to be done by the Buyer or the Guarantor which materially prejudices
  the security under the second security and has not been cured within 30 days
  of the builder giving notice thereof to the Buyer; or 8.7 the First Loan is
  declared due and payable prior to its stated maturity by reason of an event
  of default (howsoever defined), or 8.8 an event of default occurs under the
  Shipbuilding Contract as amended in respect of Hull No. S462. 9 POWERS ON
  DEFAULT 9.1 Upon the occurrence of an Event of Default, the Builder may, by
  notice to the Buyer, declare that the Post Delivery Instalment together with
  accrued interest is either immediately due and payable or payable on demand,
  whereupon the Post Delivery Instalment together with accrued interest shall
  become immediately due and payable or (as the case may be) payable on demand
  being made by the Builder. 9.2 In addition the Builder may take any other
  action, exercise any other right or pursue any other remedy conferred upon
  the Builder by this Agreement and/or the Transaction Documents or by any
  applicable law or regulation or otherwise as a consequence of such Event of
  Default. 9.3 Save for the amendments contained herein, all other terms and
  conditions of the Contract shall remain valid and in full force. 9.4 The
  Builder’s rights under this Clause are subject to the provisions of the
  Intercreditor Deed. 10 TOTAL LOSS Following the occurrence of a Total Loss
  with respect to the Vessel, the Post Delivery Instalment together with accrued
  interest on the Post Delivery Instalment shall become due and payable on the
  earlier of (i) 120 days after such Total Loss has occurred or is deemed to

  

 

	
  

  	
  have occurred,
  and (ii) the day on which insurance proceeds or other compensation monies in
  respect of the Total Loss have been received by the party entitled thereto.
  11 [NOT USED] 12 COSTS AND EXPENSES The Buyer shall promptly on demand pay
  the Builder the amount of all costs and expenses (including legal fees)
  reasonably incurred by the Builder in connection with the negotiation,
  preparation, printing and execution of this Agreement and any other documents
  referred to in this Agreement; and any other documents executed after the
  date of this Agreement. 13 CONFIDENTIALITY This Agreement shall be kept
  strictly private and confidential and shall not be disclosed to any other
  third party. Notwithstanding the foregoing, disclosure is permitted (i) to
  the Buyer’s and Guarantor’s financiers and potential financiers, (ii) to the
  Buyer’s and Guarantor’s shareholders and affiliates, (iii) to Buyer’s and
  Guarantor’s legal and financial advisers and (iv) as may be required by law
  (including by virtue of rules and regulations of any securities exchange
  authorities). 14 ENTIRE AGREEMENT This Agreement shall constitute an integral
  part of the Contract and shall constitute the only and entire agreement
  between the Parties with respect to the subject matter hereof and unless
  otherwise expressly agreed between the Parties, all other agreements, oral or
  written, made and entered into between the Parties prior to the execution of
  this Agreement shall be null and void. 15 ENFORCEMENT AND JURISDICTION This
  Agreement and any non-contractual obligations arising in connection with this
  Agreement is governed by and construed in accordance with English law. 15.1
  The High Court in London England has exclusive jurisdiction to settle any
  dispute arising out of or in connection with this Agreement (including a
  dispute regarding the existence, validity or termination of this Agreement)
  (a “Dispute”). 15.2 The Parties agree that the High Court in London England
  is the most appropriate and convenient court to settle Disputes and
  accordingly no Party will argue to the contrary. 15.3 Clause 15.2 is for the
  benefit of the Builder only. As a result, the Builder shall not be prevented
  from taking proceedings relating to a Dispute in any other courts with
  jurisdiction. 15.4 To the extent allowed by law, the Builder may take
  concurrent proceedings in any number of jurisdictions. 15.5 Without prejudice
  to any other mode of service allowed under any relevant law, the Buyer:
  15.5.1 irrevocably appoints Danaos Management Consultants whose registered
  office is at 4 Staples Inn, Holborn, London WC1V 7QU as its agent for service
  of process in relation to any proceedings before the English courts in
  connection with this Agreement or any Transaction Document; and

  

 

	
  

  	
  15.5.2 agree
  that failure by a process agent to notify any Buyer of the process will not
  invalidate the proceedings concerned. IN WITNESS WHEREOF, the Parties have
  caused this Agreement to be duly executed on the day and year first above
  written. SIGNATURES For and on behalf of MEGACARRIER (NO. 4) CORP . By:
  [ILLEGIBLE] Name: [ILLEGIBLE] Title: Attorney -in-fact For and on behalf of
  HYUNDAI SAMHO HEAVY INDUSTRIES CO., LTD. By:[ILLEGIBLE] Name : E.C. HAN
  Title:ATTORNEY-IN-FACT [ILLEGIBLE] MICHALIS PAPANIKOLAOU ATTORNEY AT LAW
  DANAOS SHIPPING CO., LTD. 14, AKTI KONDYLI 118 52 PIRAEUS

  

 

	
  

  	
  EXHIBIT A
  PROMISSORY NOTE NO. US$ Date: 20 For value received, Megacarrier (No. 4)
  Corp. a corporation duly organized and existing under the laws of Liberia
  having its registered office at 80 Broad Street, Monrovia, Liberia hereby
  unconditionally promises to pay on to Hyundai Samho Heavy Industries Co.,
  Ltd. or its nominee or its assignees, or any other holder hereof from time to
  time or its order the principal sum of US$ only, and to pay interest on the
  said principal sum from and including [•] at the rate of eight per cent (8%)
  per annum, the first payment of interest to be due and payable on [•] and
  thereafter payable semi-annually on the [•] and on the [•] of each and every
  year, until maturity (whether by acceleration or otherwise) and thereafter at
  the rate of ten per cent (10%) per annum until the principal sum and the
  interest thereon are fully paid. Interest shall be calculated on the basis of
  the actual days elapsed and a year of three hundred sixty (360) days. Both
  principal and interest shall be payable in United States Dollars in
  immediately available funds at the account of the [Korea Exchange Bank,
  Seoul, Korea] (Account No. [•]) with [JP Morgan Chase Bank, New York, U.S.A.]
  without any deduction or withholding for or on account of any present or
  future taxes or other charges. If the maker of this note is required to make
  any such deduction or withholding from any payment hereunder, the maker shall
  pay such additional amount as may be necessary in order that the actual
  amount received after deduction or withholding shall be equal to the amount
  that would have been received if such deduction or withholding were not
  required. This note is one of a series of seven (7) promissory notes in the
  aggregate principal amount of US$[ ] of like form and tenor except their
  respective numbers, principal amounts and dates of maturity (together the
  “Series Notes”). Each of said notes is secured by a letter of guarantee
  issued by DANAOS CORPORATION a corporation duly organized and existing under
  the laws of [ ] having its registered office at [ ]. In the event of a default
  in the payment of the principal when the same shall become due and payable,
  then interest at the rate of ten per cent (10%) per annum on the principal
  and any accrued interest from the due date to the date of payment shall be
  due and payable together with the principal and accrued interest. In the
  event default shall be made in the payment of the principal or interest on
  this note, or in the payment of the principal of or interest on any of the
  other Series Notes, as and when the same shall become due and payable and
  such default shall continue for a period of fifteen (15) days, the holder of
  this note may at its option declare the principal of and accrued interest on
  this note to be forthwith due and payable, whereupon the same shall be
  forthwith due and payable, and the holder hereof shall have the other
  remedies herein or by law provided. The maker of this note may, if it gives
  the holder not less than fifteen (15) days’ prior notice, prepay the whole of
  this note by payment of the principal hereof together with accrued interest
  hereon to and including the date of prepayment, provided, however that there
  shall be no default in payment of principal or interest on this note or on
  any of the other Series Notes as of the date of such prepayment.

  

 

	
  

  	
  This note may
  be transferred or assigned by the holder of this note to any bank with the
  prior notice to the maker. The maker unconditionally agrees to promptly pay
  to and reimburse the holder hereof on demand any and all reasonable costs and
  expenses including, without limitation to, reasonable attorney’s fees
  incidental to the enforcement or attempted enforcement of this note. The
  holder of this note shall be under no obligation to make presentment,
  protest, demand or notice of any kind whatsoever for the payment of this
  note. The maker and the endorsers of this note hereby waive the right to
  interpose any defense, set-off or counterclaim of any nature or description
  in any action or proceeding arising on, out of, under or by reason of this
  note. The maker hereby authorizes and empowers the holder of this note to
  acknowledge on the maker’s behalf by endorsement the receipt of the payment
  or prepayment of the principal sum or interest thereon. Upon full payment of
  all sums payable on this note and the other Series Notes, the holder of this
  note shall immediately return this note to the maker with such endorsement to
  the effect that this note has been fully paid. This note and any
  non-contractual obligations arising in connection with this note shall be
  governed by and construed in accordance with the laws of England. The maker
  and the endorsers hereby consent to any legal action or proceeding in
  relation to this note being brought in the High Court in London, England and
  hereby irrevocably waives any immunity from suit, attachment, (before or
  after judgment) or execution on a judgment to which they or their property
  may be entitled. The maker and the endorsers hereby irrevocably submit to the
  exclusive jurisdiction of the courts of England. Without prejudice to any other
  mode of service allowed under any relevant law, the undersigned: irrevocably
  appoints [  ] whose registered office
  is at [  ] as its agent for service of
  process in relation to any proceedings before the High Court in London,
  England in connection with this note; and agrees that failure by a process
  agent to notify the undersigned of the process will not invalidate the
  proceedings concerned. The maker hereby certifies and declares that all acts,
  conditions and things required to be done and performed and to have happened
  precedent to the creation and issuance of this note, and to constitute this
  note the valid obligation of the maker in accordance with its terms, have
  been done and performed and have happened in due and strict compliance with
  all applicable laws and regulation. IN WITNESS WHEREOF, the undersigned has
  caused this note be signed in its corporate name by its representative
  thereunto duly authorized on the day and year first above written.

  

 

	
  

  	
  For and on
  behalf of [MEGACARRIER (NO. 4) CORP.] By Name: Title:

  

 

	
  

  	
  EXHIBIT B Date:
  20 Hyundai Samho Heavy Industries Co., Ltd. 1700, Yongdang-Ri, Samho-Eup,
  Youngam-Gun, Chollanam-Do, KOREA LETTER OF GUARANTEE NO. Gentlemen : In
  consideration of your completing and delivering one (1) 12,600 TEU Class
  Container Carrier, your Hull No. 459 (hereinafter called the “Vessel”), to
  MEGACARRIER (NO. 4) CORP. (hereinafter called the “Buyer”), on deferred
  payment basis, under a certain shipbuilding Contract dated 28 September 2007,
  as amended, entered into by and between you and the Buyer, the undersigned,
  as primary obligor and not as surety merely, does hereby irrevocably,
  absolutely and unconditionally guarantee jointly and severally the due and
  punctual payment (whether at the stated maturity, by acceleration or
  otherwise) by the Buyer of the promissory note No. in the principal amount of
  US$ to be due and payable on to be issued by the Buyer to the order of
  yourself upon delivery of the Vessel pursuant to the said shipbuilding
  Contract, and also guarantee the due and punctual payment by the Buyer of
  interest on this promissory note No. , the first payment of interest to be
  due and payable on [ ] and thereafter payable semi-annually, at the rate of
  eight per cent (8%) per annum until maturity (by acceleration or otherwise)
  and thereafter at the rate of ten per cent (10%) per annum until full
  payment. Interest shall be calculated on the basis of the actual days elapsed
  and a year of three hundred sixty (360) days. The undersigned hereby waives
  the right to interpose any defense, set-off or counter-claim of any nature or
  description in any action or proceedings arising on, out of, under or by
  reason of the notes or this letter of guarantee or said shipbuilding
  Contract. The Promissory Note No. is one of a series of (7) Promissory Notes
  in the aggregate principal amount of US$ [ ]. In the event that the Buyer
  fails to pay the said Promissory Note and/or interest thereon on the maturity
  date (by acceleration or otherwise) in accordance with the terms of the said
  promissory notes, the undersigned will pay to you the amounts due immediately
  upon receipt by us of written demand from you including a statement that the
  Buyer is in default of payment of the said promissory notes and/or interest
  thereon, without requesting you to take any or further procedure or step
  against the Buyer or with respect to the promissory notes and/or interest
  thereon, together with default interest on any such amounts demanded by you
  as aforesaid from the due date thereof until the payment in full of such
  amounts at the rate of ten per cent (10%) per annum payable in accordance
  with the terms of the said promissory notes and any and all reasonable costs
  and expenses including, without limitation, reasonable attorney’s fees
  incidental to the enforcement or attempted enforcement of this guarantee. The
  undersigned hereby consents to any renewals, changes, extensions or partial
  payments of the promissory notes or the indebtedness for which they are given
  without prior notice to us, and consents that no such renewals, changes,
  extensions or partial payments shall discharge any party to the promissory
  note or us from any liability thereon or hereon in whole or in part (other
  than to the extent of any such partial prepayment).

  

 

	
  

  	
  The undersigned
  hereby agrees that this guarantee and undertaking hereunder shall be
  assignable to and shall inure to the benefit of the holder of the promissory
  note No. as if each of them was originally named herein. The payment by the
  undersigned under this guarantee shall be made in United States Dollars in
  immediately available funds by telegraphic transfer to the account of the
  [Korea Exchange Bank, Seoul, Korea] (Account No. [•]) with [JP Morgan Chase
  Bank, New York, U.S.A.] in favour of you or your assignee without deduction,
  withholding or set-off. In the event that any deduction or withholding is
  imposed on any payment to be made hereunder by law or by any taxing
  authority, the undersigned agrees to pay such additional amount as may be
  necessary in order that the actual amount received after deduction or
  withholding shall be equal to the amount that would have been received if
  such deduction or withholding were not required after allowance for any
  increase in taxes or charges payable by virtue of the receipt of such additional
  amount. This letter of guarantee shall come into full force and effect upon
  delivery of the Vessel by you to the Buyer and shall continue in force and
  effect until the full payment of the promissory note No. and interest thereon
  whichever occurs last. The obligation of the undersigned hereunder is joint
  and several with any other guarantee or security and absolute and
  unconditional irrespective of any legal limitation, disability, incapacity or
  other circumstance relating to the Buyer or any other person, or any
  amendment or supplement to the said shipbuilding Contract, the promissory
  notes or any other document, instrument or agreement contemplated therein or
  of the genuineness, legality, validity, regularity or enforceability of the
  said shipbuilding Contract, the Promissory Notes or any other documents,
  instruments or agreements contemplated therein. This shall be a continuing
  guarantee and shall cover and secure any ultimate balance owing under the
  promissory note No., but you shall not be obliged to exhaust your recourse
  against the Buyer or the securities which you may hold before being entitled
  to payment from the undersigned of the obligation hereby guaranteed. The
  undersigned hereby represents and warrants that (A) the undersigned is a
  company duly organised and validly existing and in full compliance with the
  laws of the [  ] and has full legal
  right, power and authority to execute this letter of guarantee and to perform
  its obligations hereunder, (B) it has taken all appropriate and necessary corporate
  action to authorize the issuance of this letter of guarantee and the
  performance by it of its obligations hereunder, (C) the execution, delivery
  and performance of this letter of guarantee and the covenants herein
  contained will not violate or contravene any provisions of any applicable
  treaty, law or regulation or any judgment order or decree of any court, or
  governmental agency, or violate or result in breach of its constitutional
  documents, (D) this letter of guarantee constitutes the legal, valid and
  binding obligations of the undersigned enforceable in accordance with its
  terms subject to overriding principles, if any, of insolvency law, and (E) it
  has obtained all necessary consents, licenses, approvals, and authorisations,
  and registrations or declarations, with any governmental authority required
  in connection with the validity and enforceability of its guarantee and the
  same are in full force and effect. This letter of guarantee and any
  non-contractual obligations arising in connection with this letter of
  guarantee shall be governed by and construed in accordance with the laws of
  England. The undersigned hereby irrevocably consents that any legal action or
  proceeding against the undersigned, or any of its property, with respect to
  this letter of guarantee may be brought in the High Court in London, England,
  and by execution and delivery of this letter of guarantee the undersigned
  hereby accepts in regard to any such action or proceeding, for itself and in
  respect of its property, generally and unconditionally the exclusive
  jurisdiction of the aforesaid court.

  

 

	
  

  	
  Notwithstanding
  anything to the contrary contained in this letter of guarantee or any of the
  documents executed as security therefore, the agreement, obligations and
  liabilities of the undersigned herein contained are joint and several and
  shall be construed accordingly. The undersigned agrees and consents to be
  bound by this letter of guarantee notwithstanding that this letter of
  guarantee may be invalid or unenforceable against the undersigned, whether or
  not the deficiency is known to yourself. You shall be at liberty to release
  the undersigned from this letter of guarantee and to compound with or
  otherwise vary or agree to vary the liability or to grant time and indulgence
  to make other arrangements with the undersigned without prejudicing or
  affecting the rights and remedies of yourself against the other undersigned.
  Without prejudice to any other mode of service allowed under any relevant
  law, the undersigned irrevocably appoints [ ] whose registered office is at [
  ] as its agent for service of process in relation to any proceedings before
  the High Court in London, England in connection with this letter of
  guarantee; and agrees that failure by a process agent to notify the
  undersigned of the process will not invalidate the proceedings concerned. The
  undersigned represents and warrants that this letter of guarantee is a
  commercial act and that the undersigned is not entitled to claim immunity
  from legal proceedings with respect to itself or any of its properties or
  assets on the grounds of sovereignty or otherwise under any law. To the
  extent that the undersigned or any of its properties or assets has or
  hereafter may acquire any right to immunity from set-off, legal proceedings,
  attachment prior to judgment, other attachment or execution of judgment on
  the grounds of sovereignty or otherwise, the undersigned for itself and its
  properties and other assets hereby irrevocably waives such right to immunity
  in respect of its obligations under this letter of guarantee. After this
  letter of guarantee shall have expired as aforesaid, you will return the same
  to the undersigned without any request from the undersigned. IN WITNESS
  WHEREOF, the undersigned has caused this letter of guarantee to be executed
  and delivered by its duly authorised representative on the day and year above
  written. Yours very truly, for and on behalf of DANAOS CORPORATION. By Name:
  Title : for and on behalf of

  

 

 

	
  

  	
  AGREEMENT This
  Agreement is made on this 27th day of September 2010 by and between: (1)
  MEGACARRIER (NO.5) CORP. (the “Buyer”); and (2) HYUNDAI SAMHO HEAVY
  INDUSTRIES CO., LTD. (the “Builder”), (hereinafter the parties referred to
  individually as the “Party” and collectively as the “Parties”), to amend and
  supplement the Contract as defined hereinafter. WHEREAS: A. The Buyer and the
  Builder entered into a shipbuilding contract on 28 September, 2007 as amended
  and supplemented from time to time (the “Contract”) for the construction and
  sale of one (1) 12,600 TEU class container carrier, having the Builder’s Hull
  No S460 (the “Vessel”). B. The Buyer desires to postpone part of the final
  instalment of the Contract Price (as that term is defined in the Contract)
  until after delivery of the Vessel. C. The Buyer is willing to execute and
  deliver to the Builder the Mortgage, Assignment and the Time Charter
  Assignment (each as hereinafter defined) in respect of the Vessel as security
  for the payment of the postponed part of the final instalment referred to in
  Recital (B) above. D. Danaos Corporation (the “Guarantor”) is willing to
  execute and deliver to the Builder the Letter of Guarantee (as hereinafter
  defined) guaranteeing the payment of the postponed part of the final
  instalment referred to in Recital (B) above. E. The Builder is willing to
  agree to such deferral of part of the final instalment upon the terms and
  conditions herein below. NOW, THEREFORE, for good and valuable consideration
  the Parties hereby agree to enter into this AGREEMENT on the following terms
  and conditions. 1 DEFINITIONS “Assignment” has the meaning given in Clause
  3.4. “Business Day” means a day (other than a Saturday or Sunday) on which
  banks are open for general business in London, New York Athens and Seoul.
  “Delivery Instalment” has the meaning given in Clause 2.1. “Delivery
  Instalment Due Date” has the meaning given in Clause 2.2. “Due Date” means
  the Delivery Instalment Due Date and any Post Delivery Instalment Due Date
  and in the plural means both of them. “Event of Default” has the meaning
  given in Clause 8. “First Loan” means the Loan made or to be made available
  to, amongst others, the Buyer by the First Mortgagee in respect of (inter
  alia) the Vessel.

  

 

	
  

  	
  “First
  Mortgagee” means the agent that the lenders, Citibank, N.A. and EFG Eurobank
  Ergasias S.A., will appoint. “First Security” means (i) the first preferred
  Liberian mortgage over the Vessel in favour of the First Mortgagee and (ii)
  the first priority assignment of the earnings, insurance and requisition
  compensation relating to the Vessel in favour of the First Mortgagee.
  “Intercreditor Deed” means the intercreditor deed between the First Mortgagee
  and the Builder under which the Post Delivery Instalment shall rank behind
  the claims of the First Mortgagee under the First Loan entered into or to be
  entered into between (inter alia) the First Mortgagee and the Buyer providing
  (inter alia) for the First Security “Letter of Guarantee” has the meaning
  given in Clause 3.2. “Mortgage” has the meaning given in Clause 3.3. “Post
  Delivery Instalment” has the meaning given in Clause 2.1. “Post Delivery
  Instalment Due Date” has the meaning given in Clause 2.3. “Promissory Note”
  has the meaning given in Clause 3.1. “Second Security” means the Mortgage,
  the Assignment and the Time Charter Assignment. “Tax” means any tax (other
  than tax on the overall income of the Builder, levy, impost, duty or other
  charge or withholding of a similar nature (including any penalty or interest
  payable in connection with any failure to pay or any delay in paying any of
  the same). “Tax Deduction” means a deduction or withholding for or on account
  of Tax from a payment under a Transaction Document except for those imposed
  in Korea upon the payment of the Post Delivery Instalment. “Time Charterer”
  means Hyundai Merchant Marine Co., Ltd of Korea. “Time Charter” means the
  time charter dated 18 October 2007 as amended by addendum no. 1 and addendum
  no. 2 between the Buyer and the Time Charterer. “Time Charter Assignment” has
  the meaning given in clause 3.5 “Total Loss” means: (a) actual, constructive,
  compromised, agreed or arranged total loss of the Vessel; (b) requisition for
  title or other compulsory acquisition of the Vessel otherwise than by
  requisition for hire; (c) capture, seizure, arrest, detention, or
  confiscation of the Vessel by any person, governmental authority or
  government or by persons acting or purporting to act on behalf of any
  government or any other person which deprives the Buyer of the use of the Vessel
  for 90 days or more after that occurrence; and (d) requisition for hire of
  the Vessel by any government or by persons acting or purporting to act on
  behalf of any government which deprives the Buyer of the use of the Vessel
  for a period of 90 days or more. “Transaction Documents” means the Contract,
  this Agreement, the Second Security, the Promissory Notes, the Letter of
  Guarantee, the Time Charter Assignment and the Intercreditor Deed.

  

 

	
  

  	
  2 POSTPONEMENT
  OF PAYMENT OF INSTALMENTS 2.1 The final instalment of the Contract Price
  under the Contract will be payable by the Buyer as the delivery instalment
  (the “Delivery Instalment”) and the post delivery instalment (the “Post
  Delivery Instalment”). 2.2 The Delivery Instalment in the sum of U.S. Dollars
  Fifty Eight Million Five Hundred and Two Thousand and Thirty Five
  (US$58,502,035) plus any increase or minus any decrease due to modifications
  and/or adjustment, if any, to the Contract Price under Articles III and V of
  the Contract arising prior to delivery of the Vessel shall be paid by the
  Buyer on the delivery of the Vessel which is scheduled on June 27, 2012 or
  such later date as is permissible pursuant to the Contract (the “Delivery
  Instalment Due Date”). 2.3 The Post Delivery Instalment amounting to U.S. Dollars
  Twenty Four Million Nine Hundred Fifty Five Thousand Nine Hundred and Sixty
  Five (US$24,955,965) shall be paid over a period of four (4) years from the
  actual delivery of the Vessel in seven (7) equal instalments the first due
  date being June 27, 2013 and the remaining six instalments payable
  semi-annually thereafter as listed in Table 1. (each a “Post Delivery
  Instalment Due Date”). Interest shall accrue at the rate of eight per cent
  (8%) per annum on all of the outstanding balance of the Post Delivery
  Instalment which shall be paid by the Buyer semi-annually the first due date
  being December 27, 2012 and at six month intervals thereafter as listed in
  Table 1. The rate of interest shall be increased to ten per cent (10%) per
  annum in the event of default. <Repayment schedule for the Post Delivery
  Instalment based on the the delivery of the Vessel on June 27, 2012.>
  Table 1 PAYMENT DUE DATE PRINCIPAL(A) INTEREST(B) TOTAL(A+B) 1st
  27-Dec-12  $1,014,875 $1,014,875
  27-Jun-13 $3,565,137 $1,009,330 $4,574,467 2nd 27-Dec-13 $3,565,137 $869,893
  $4,435,030 3rd 27-Jun-14 $3,565,137 $720,950 $4,286,087 4th 27-Dec-14
  $3,565,137 $579,929 $4,145,066 5th 27-Jun-15 $3,565,137 $432,570 $3,997,707
  6th 27-Dec-15 $3,565,137 $289,964 $3,855,101 7th 27-Jun-16 $3,565,143 $144,982
  $3,710,125 TOTAL $24,955,965 $5,062,493 $30,018,458  The figures in above Table 1 shall be
  adjusted in accordance with Clause 2.3 if the actual delivery of the Vessel
  is other than June 27, 2012. 2.4 It is understood and agreed by the Builder
  and the Buyer that no payments to be made by the Buyer pursuant to this
  Clause 2 shall be delayed or withheld by the Buyer due to any dispute or
  disagreement of whatsoever nature arising between the Builder and the Buyer.
  If a Due Date would otherwise fall on a day which is not a Business Day, that
  Due Date will instead be on the next Business Day in that calendar month (if
  there is one) or the preceding Business Day (if there is not). 2.5 The Buyer
  shall make all payments without any Tax Deduction, unless a Tax Deduction is
  required by law.

  

 

	
  

  	
  2.6 If a Tax
  Deduction is required by law to be made by the Buyer, the amount of the
  payment due from the Buyer shall be increased to an amount which (after
  making any Tax Deduction) leaves an amount equal to the payment which would
  have been due if no Tax Deduction had been required. 2.7 The Buyer may at any
  time, if it gives the Builder not less than 15 days’ prior notice, prepay the
  whole or part of the Post Delivery Instalment, but if in part then the Buyer
  shall state which of the Promissory Notes is to be prepaid and such
  Promissory Note shall be prepaid in full and not in part. Any prepayment
  shall be made together with accrued interest. 2.8 Article X. 8 of the
  Contract shall be amended and shall hereafter be read so that at the end of
  the first paragraph the following wording is inserted:- “In the event that
  the BUYER pays to the BUILDER any amount in excess of the pre-delivery
  instalments, the BUILDER will procure that Shinhan Bank of Korea will amend
  its letter of guarantee (or arrange for the issue of a replacement) so as to
  include such excess amount. 3 SECURITIES TO BE FURNISHED BY THE BUYER As a
  condition precedent to the effectiveness of this Agreement the Buyer shall
  furnish the Builder with securities as follows upon the delivery of the
  Vessel. 3.1 Promissory Notes The Buyer shall execute and deliver to the
  Builder seven (7) promissory notes (each individually a “Promissory Note” and
  collectively the “Promissory Notes”) as follows: (a) Each Promissory Note shall
  relate to an instalment under the Post Delivery Instalment and shall be for a
  payment of an amount of principal (A) and interest (B) as listed in Table 1
  next to the corresponding instalment to which that Promissory Note relates.
  (b) Each Promissory Note shall be in the form annexed hereto as Exhibit “A”.
  3.2 Letter of Guarantee The Buyer shall furnish the Builder with an
  unconditional letter of guarantee, being in the form annexed hereto as
  Exhibit “B” and in respect of each Promissory Note issued by the Buyer (each
  individually a “Letter of Guarantee” and collectively the “Letters of
  Guarantee”) each such Letter of Guarantee to be duly executed and delivered
  by the Guarantor guaranteeing the payment by the Buyer of the principal sums
  and interest specified in the relevant Promissory Note. 3.3 Second Preferred
  Mortgage on the Vessel The Buyer shall execute and deliver to the Builder a
  second preferred Liberian mortgage over the Vessel in the maximum principal
  amount of US$32,442,755 in form and substance satisfactory to the Builder
  (the “Mortgage”) as security for (i) the Buyer’s obligations under the
  Promissory Notes and (ii) the obligations of the Buyer under this Agreement.

  

 

	
  

  	
  3.4 Second
  Priority Assignment The Buyer shall execute and deliver to the Builder a
  second priority assignment of its interests in the earnings, insurances and
  requisition compensation of the Vessel in form and substance satisfactory to
  the Builder (the “Assignment”) as security for (i) the Buyer’s obligations under
  the Promissory Notes and (ii) the obligations of the Buyer under this
  Agreement. 3.5 Time Charter Assignment The Buyer shall execute and deliver to
  the Builder a second priority assignment of its interests in the Time Charter
  of the Vessel in form and substance satisfactory to the Builder (the “Time
  Charter Assignment”) as security for (i) the Buyer’s obligations under the
  Promissory Notes and (ii) the obligations of the Buyer under this Agreement.
  4 OTHER CONDITIONS PRECEDENT The Buyer shall, on or prior to delivery of the
  Vessel, provide the following to the Builder: 4.1 satisfactory evidence that
  the earnings, insurance and requisition compensation of the Vessel are free
  from encumbrances other than the First Security. 4.2 satisfactory evidence
  that the Vessel is insured and classed as provided by the terms of the
  [Mortgage] and that the Mortgage is duly registered on the Liberian Ship
  Register; 4.3 certified true copies of the constitutional documents of the
  Buyer and the Guarantor together with certified true copies of board
  resolutions of the Buyer and certified extract of the standing resolutions of
  the Guarantor and a power of attorney authorising the execution of this
  Agreement, the Second Security, the Promissory Notes and the Letters of
  Guarantee and to which the Buyer and the Guarantor is, or will be a party;
  4.4 certified true copies of all licenses, consents or approvals which may be
  required by the Buyer or the Guarantor in connection with the execution and
  validity and enforceability of any of the documents to which they are a
  party; 4.5 originals or certified true copies from the Buyer’s and the
  Guarantor’s agents for receipt of service and proceedings accepting their
  appointment under each of the documents in which they are to be appointed as
  agents; 4.6 the Intercreditor Deed duly signed; 4.7 satisfactory legal
  opinions addressed to the Builder on matters of Liberian and Marshall Islands
  law relating to the due execution of all documents by the Buyer and the
  Guarantor and the validity of this Agreement, the Promissory Notes, the
  Letter of Guarantee and all of the Second Security executed in favour of the
  Builder. 5 DEFAULT INTEREST If the Builder does not receive on the due date
  any sum due from the Buyer under this Agreement (or any other agreement
  entered into by the Buyer in connection with this Agreement), the Buyer shall
  on demand pay interest on such sum from and including the due date to the
  date of actual payment (as well as before judgment) at the rate per annum of
  ten per cent (10%).

  

 

	
  

  	
  6 CALCULATION
  OF INTEREST All payments of interest hereunder shall accrue from day-to-day
  and shall be calculated on the basis of the actual number of days elapsed in
  a three hundred and sixty (360) day year. 7 GENERAL UNDERTAKINGS The Buyer
  further undertakes that, throughout the period from the date hereof until the
  full amount of the Delivery Instalment and Post Delivery Instalment together
  with accrued interest thereon has been paid to the Builder: 7.1 it will
  ensure that at all times the claims of the Builder against it under this
  Agreement rank at least pari passu with the claims of all its other unsecured
  creditors save those whose claims are preferred by any bankruptcy, insolvency
  or other similar laws of general application; 7.2 it will ensure that at all
  times the insured value of the Vessel in the hull and machinery policies
  shall in no event be less than one hundred and twenty five per cent (125%)
  of, the contract price under the Contract; the Buyer will (i) upon the
  Builder’s written request provide the Builder with copies of the said
  insurance policies; and (ii) notify the Builder promptly and in writing of
  any changes to the insured value of the Vessel whether made pursuant to this
  undertaking or otherwise; 7.3 it shall procure that the interest of the Builder
  shall be endorsed on the relevant hull and machinery policy by incorporation
  of a loss payable clause (in a form agreed by the Builder) and notice of
  assignment of insurances signed by the Buyer and that the Builder shall be
  furnished with proforma copies thereof and a letter of undertaking in such
  form as is customary; 7.4 it shall procure that the interest of the Builder
  shall be endorsed on the Certificate of Entry or policy of the protection and
  indemnity and/or war risks association by incorporation of a loss payable
  clause (in a form agreed by the Builder) and notice of assignment of
  insurances signed by the Buyer and that the Builder shall be furnished with a
  copy of the certificate of entry or policy and a letter of undertaking in
  such form as is customary by the P&I association; 7.5 it shall ensure
  that the earnings, insurances and requisition compensation of the Vessel are
  free from encumbrances other than the First Security and Second Security; 7.6
  it shall not create or permit to subsist any mortgage, charge, pledge, lien
  or other security interest securing any obligation of any person or any other
  agreement or arrangement having a similar effect over any of its assets other
  than the First Security and Second Security and liens arising in the ordinary
  course of business or by operation of law. 8 EVENTS OF DEFAULT Each of the
  following events shall constitute an event of default (each an “Event of
  Default”) (whether such event shall occur or come about voluntarily or
  involuntarily or by operation of law or regulation or pursuant to, or in
  compliance with, any judgment, decree or order of any court or other
  authority): 8.1 The Buyer fails to pay any amount (whether in respect of
  principal, interest or otherwise) due and payable by the Buyer to the Builder
  under this Agreement or any of the Promissory Notes on the due date and such
  failure is not remedied within 15 days; or

  

 

	
  

  	
  8.2 the Buyer
  or the Guarantor defaults in the due performance and discharge of any of its
  other duties or liabilities under this Agreement or the Transaction Documents
  to which it is a party unless such failure, in the Builder’s opinion, is
  capable of remedy and is remedied within 30 days of such failure; or 8.3 any
  order shall be made by any competent court or other competent authority or a
  resolution shall be passed by the Buyer or the Guarantor, for the appointment
  of a liquidator of, or otherwise for the winding-up or dissolution of the
  Buyer or the Guarantor, except for the purpose of amalgamation or
  re-organisation (not involving or arising out of insolvency) the terms of
  which shall have received the prior written approval of the Builder; or 8.4
  an administrator, receiver, administrative receiver, manager, trustee or
  similar official is appointed (and such appointment is not cancelled or
  withdrawn within 30 days) for all or a part of the assets and undertaking of
  the Buyer having a value of at least $500,000 or the Guarantor having a value
  of at least $5,000,000; or 8.5 it becomes unlawful for the Buyer or the
  Guarantor to perform and discharge any of its duties and liabilities
  contained in this Agreement and/or the Transaction Documents to which it is a
  party or for the Builder to exercise any of its rights and powers under this
  Agreement and/or the Transaction Documents; or 8.6 anything is done or
  omitted to be done by the Buyer or the Guarantor which materially prejudices
  the security under the second security and has not been cured within 30 days
  of the builder giving notice thereof to the Buyer; or 8.7 the First Loan is
  declared due and payable prior to its stated maturity by reason of an event
  of default (howsoever defined), or 9 POWERS ON DEFAULT 9.1 Upon the
  occurrence of an Event of Default, the Builder may, by notice to the Buyer,
  declare that the Post Delivery Instalment together with accrued interest is
  either immediately due and payable or payable on demand, whereupon the Post
  Delivery Instalment together with accrued interest shall become immediately
  due and payable or (as the case may be) payable on demand being made by the
  Builder. 9.2 In addition the Builder may take any other action, exercise any
  other right or pursue any other remedy conferred upon the Builder by this
  Agreement and/or the Transaction Documents or by any applicable law or
  regulation or otherwise as a consequence of such Event of Default. 9.3 Save
  for the amendments contained herein, all other terms and conditions of the
  Contract shall remain valid and in full force. 9.4 The Builder’s rights under
  this Clause are subject to the provisions of the Intercreditor Deed. 10 TOTAL
  LOSS Following the occurrence of a Total Loss with respect to the Vessel, the
  Post Delivery Instalment together with accrued interest on the Post Delivery
  Instalment shall become due and payable on the earlier of (i) 120 days after
  such Total Loss has occurred or is deemed to have occurred, and (ii) the day
  on which insurance proceeds or other compensation monies in respect of the
  Total Loss have been received by the party entitled thereto.

  

 

	
  

  	
  11 [NOT USED]
  12 COSTS AND EXPENSES The Buyer shall promptly on demand pay the Builder the
  amount of all costs and expenses (including legal fees) reasonably incurred
  by the Builder in connection with the negotiation, preparation, printing and
  execution of this Agreement and any other documents referred to in this
  Agreement; and any other documents executed after the date of this Agreement.
  13 CONFIDENTIALITY This Agreement shall be kept strictly private and
  confidential and shall not be disclosed to any other third party. Notwithstanding
  the foregoing, disclosure is permitted (i) to the Buyer’s and Guarantor’s
  financiers and potential financiers, (ii) to the Buyer’s and Guarantor’s
  shareholders and affiliates, (iii) to Buyer’s and Guarantor’s legal and
  financial advisers and (iv) as may be required by law (including by virtue of
  rules and regulations of any securities exchange authorities). 14 ENTIRE
  AGREEMENT This Agreement shall constitute an integral part of the Contract
  and shall constitute the only and entire agreement between the Parties with
  respect to the subject matter hereof and unless otherwise expressly agreed
  between the Parties, all other agreements, oral or written, made and entered
  into between the Parties prior to the execution of this Agreement shall be
  null and void. 15 ENFORCEMENT AND JURISDICTION This Agreement and any
  non-contractual obligations arising in connection with this Agreement is
  governed by and construed in accordance with English law. 15.1 The High Court
  in London England has exclusive jurisdiction to settle any dispute arising
  out of or in connection with this Agreement (including a dispute regarding
  the existence, validity or termination of this Agreement) (a “Dispute”). 15.2
  The Parties agree that the High Court in London England is the most
  appropriate and convenient court to settle Disputes and accordingly no Party
  will argue to the contrary. 15.3 Clause 15.2 is for the benefit of the
  Builder only. As a result, the Builder shall not be prevented from taking
  proceedings relating to a Dispute in any other courts with jurisdiction. 15.4
  To the extent allowed by law, the Builder may take concurrent proceedings in
  any number of jurisdictions. 15.5 Without prejudice to any other mode of
  service allowed under any relevant law, the Buyer: 15.5.1 irrevocably appoints
  Danaos Management Consultants whose registered office is at 4 Staples Inn,
  Holborn, London WC1V 7QU as its agent for service of process in relation to
  any proceedings before the English courts in connection with this Agreement
  or any Transaction Document; and 15.5.2 agree that failure by a process agent
  to notify any Buyer of the process will not invalidate the proceedings
  concerned.

  

 

	
  

  	
  IN WITNESS
  WHEREOF, the Parties have caused this Agreement to be duly executed on the
  day and year first above written. SIGNATURES For and on behalf of MEGACARRIER
  (NO. 5) CORP By: [ILLEGIBLE] Name: [ILLEGIBLE] Title: Attorney-in-fact  For and on behalf of HYUNDAI SAMHO HEAVY
  INDUSTRIES CO., LTD. [ILLEGIBLE] [ILLEGIBLE] ATTORNEY AT LAW By [ILLEGIBLE]
  [ILLEGIBLE] Name : [ILLEGIBLE] 14, AKTI [ILLEGIBLE] Title ATTORNEY-IN-FACT
  188 52 PIRALUS

  

 

	
  

  	
  EXHIBIT A
  PROMISSORY NOTE NO. US$ Date: 20 For value received, Megacarrier (No. 5)
  Corp. a corporation duly organized and existing under the laws of Liberia
  having its registered office at 80 Broad Street, Monrovia, Liberia hereby
  unconditionally promises to pay on to Hyundai Samho Heavy Industries Co.,
  Ltd. or its nominee or its assignees, or any other holder hereof from time to
  time or its order the principal sum of US$ only, and to pay interest on the
  said principal sum from and including [•] at the rate of eight per cent (8%)
  per annum, the first payment of interest to be due and payable on [•] and
  thereafter payable semi-annually on the [•] and on the [•] of each and every
  year, until maturity (whether by acceleration or otherwise) and thereafter at
  the rate of ten per cent (10%) per annum until the principal sum and the
  interest thereon are fully paid. Interest shall be calculated on the basis of
  the actual days elapsed and a year of three hundred sixty (360) days. Both
  principal and interest shall be payable in United States Dollars in
  immediately available funds at the account of the [Korea Exchange Bank,
  Seoul, Korea] (Account No. [•]) with [JP Morgan Chase Bank, New York, U.S.A.]
  without any deduction or withholding for or on account of any present or
  future taxes or other charges. If the maker of this note is required to make
  any such deduction or withholding from any payment hereunder, the maker shall
  pay such additional amount as may be necessary in order that the actual
  amount received after deduction or withholding shall be equal to the amount
  that would have been received if such deduction or withholding were not
  required. This note is one of a series of seven (7) promissory notes in the
  aggregate principal amount of US$[ ] of like form and tenor except their
  respective numbers, principal amounts and dates of maturity (together the
  “Series Notes”). Each of said notes is secured by a letter of guarantee
  issued by DANAOS CORPORATION a corporation duly organized and existing under
  the laws of [ ] having its registered office at [ ]. In the event of a
  default in the payment of the principal when the same shall become due and
  payable, then interest at the rate of ten per cent (10%) per annum on the
  principal and any accrued interest from the due date to the date of payment
  shall be due and payable together with the principal and accrued interest. In
  the event default shall be made in the payment of the principal or interest
  on this note, or in the payment of the principal of or interest on any of the
  other Series Notes, as and when the same shall become due and payable and
  such default shall continue for a period of fifteen (15) days, the holder of
  this note may at its option declare the principal of and accrued interest on
  this note to be forthwith due and payable, whereupon the same shall be
  forthwith due and payable, and the holder hereof shall have the other
  remedies herein or by law provided. The maker of this note may, if it gives
  the holder not less than fifteen (15) days’ prior notice, prepay the whole of
  this note by payment of the principal hereof together with accrued interest
  hereon to and including the date of prepayment, provided, however that there
  shall be no default in payment of principal or interest on this note or on
  any of the other Series Notes as of the date of such prepayment.

  

 

	
  

  	
  This note may
  be transferred or assigned by the holder of this note to any bank with the
  prior notice to the maker. The maker unconditionally agrees to promptly pay
  to and reimburse the holder hereof on demand any and all reasonable costs and
  expenses including, without limitation to, reasonable attorney’s fees
  incidental to the enforcement or attempted enforcement of this note. The
  holder of this note shall be under no obligation to make presentment,
  protest, demand or notice of any kind whatsoever for the payment of this
  note. The maker and the endorsers of this note hereby waive the right to
  interpose any defense, set-off or counterclaim of any nature or description
  in any action or proceeding arising on, out of, under or by reason of this
  note. The maker hereby authorizes and empowers the holder of this note to
  acknowledge on the maker’s behalf by endorsement the receipt of the payment
  or prepayment of the principal sum or interest thereon. Upon full payment of
  all sums payable on this note and the other Series Notes, the holder of this
  note shall immediately return this note to the maker with such endorsement to
  the effect that this note has been fully paid. This note and any
  non-contractual obligations arising in connection with this note shall be
  governed by and construed in accordance with the laws of England. The maker
  and the endorsers hereby consent to any legal action or proceeding in
  relation to this note being brought in the High Court in London, England and
  hereby irrevocably waives any immunity from suit, attachment, (before or
  after judgment) or execution on a judgment to which they or their property
  may be entitled. The maker and the endorsers hereby irrevocably submit to the
  exclusive jurisdiction of the courts of England. Without prejudice to any
  other mode of service allowed under any relevant law, the undersigned:
  irrevocably appoints [ ] whose registered office is at[ ] as its agent for
  service of process in relation to any proceedings before the High Court in
  London, England in connection with this note; and agrees that failure by a
  process agent to notify the undersigned of the process will not invalidate
  the proceedings concerned. The maker hereby certifies and declares that all
  acts, conditions and things required to be done and performed and to have
  happened precedent to the creation and issuance of this note, and to
  constitute this note the valid obligation of the maker in accordance with its
  terms, have been done and performed and have happened in due and strict
  compliance with all applicable laws and regulation. IN WITNESS WHEREOF, the
  undersigned has caused this note be signed in its corporate name by its representative
  thereunto duly authorized on the day and year first above written.

  

 

	
  

  	
  For and on
  behalf of [MEGACARRIER (NO. 5) CORP.] By Name: Title: 

  

 

	
  

  	
  EXHIBIT B Date:
  20 Hyundai Samho Heavy Industries Co., Ltd. 1700, Yongdang-Ri, Samho-Eup,
  Youngam-Gun, Chollanam-Do, KOREA LETTER OF GUARANTEE NO. Gentlemen : In
  consideration of your completing and delivering one (1) 12,600 TEU Class
  Container Carrier, your Hull No. 460 (hereinafter called the “Vessel”), to
  MEGACARRIER (NO. 5) CORP. (hereinafter called the “Buyer”), on deferred
  payment basis, under a certain shipbuilding Contract dated 28 September 2007,
  as amended, entered into by and between you and the Buyer, the undersigned,
  as primary obligor and not as surety merely, does hereby irrevocably, absolutely
  and unconditionally guarantee jointly and severally the due and punctual
  payment (whether at the stated maturity, by acceleration or otherwise) by the
  Buyer of the promissory note No. in the principal amount of US$ to be due and
  payable on to be issued by the Buyer to the order of yourself upon delivery
  of the Vessel pursuant to the said shipbuilding Contract, and also guarantee
  the due and punctual payment by the Buyer of interest on this promissory note
  No. , the first payment of interest to be due and payable on [ ]and
  thereafter payable semi-annually, at the rate of eight per cent (8%) per
  annum until maturity (by acceleration or otherwise) and thereafter at the
  rate of ten per cent (10%) per annum until full payment. Interest shall be
  calculated on the basis of the actual days elapsed and a year of three
  hundred sixty (360) days. The undersigned hereby waives the right to
  interpose any defense, set-off or counter-claim of any nature or description
  in any action or proceedings arising on, out of, under or by reason of the
  notes or this letter of guarantee or said shipbuilding Contract. The
  Promissory Note No. is one of a series of (7) Promissory Notes in the
  aggregate principal amount of US$ [ ]. In the event that the Buyer fails to
  pay the said Promissory Note and/or interest thereon on the maturity date (by
  acceleration or otherwise) in accordance with the terms of the said
  promissory notes, the undersigned will pay to you the amounts due immediately
  upon receipt by us of written demand from you including a statement that the
  Buyer is in default of payment of the said promissory notes and/or interest
  thereon, without requesting you to take any or further procedure or step
  against the Buyer or with respect to the promissory notes and/or interest
  thereon, together with default interest on any such amounts demanded by you
  as aforesaid from the due date thereof until the payment in full of such
  amounts at the rate of ten per cent (10%) per annum payable in accordance
  with the terms of the said promissory notes and any and all reasonable costs
  and expenses including, without limitation, reasonable attorney’s fees
  incidental to the enforcement or attempted enforcement of this guarantee. The
  undersigned hereby consents to any renewals, changes, extensions or partial
  payments of the promissory notes or the indebtedness for which they are given
  without prior notice to us, and consents that no such renewals, changes,
  extensions or partial payments shall discharge any party to the promissory
  note or us from any liability thereon or hereon in whole or in part (other
  than to the extent of any such partial prepayment).

  

 

	
  

  	
  The undersigned
  hereby agrees that this guarantee and undertaking hereunder shall be
  assignable to and shall inure to the benefit of the holder of the promissory
  note No. as if each of them was originally named herein. The payment by the
  undersigned under this guarantee shall be made in United States Dollars in
  immediately available funds by telegraphic transfer to the account of the
  [Korea Exchange Bank, Seoul, Korea] (Account No. [•]) with [JP Morgan
  Chase Bank, New York, U.S.A.] in favour of you or your assignee without
  deduction, withholding or set-off. In the event that any deduction or
  withholding is imposed on any payment to be made hereunder by law or by any
  taxing authority, the undersigned agrees to pay such additional amount as may
  be necessary in order that the actual amount received after deduction or
  withholding shall be equal to the amount that would have been received if
  such deduction or withholding were not required after allowance for any
  increase in taxes or charges payable by virtue of the receipt of such
  additional amount. This letter of guarantee shall come into full force and
  effect upon delivery of the Vessel by you to the Buyer and shall continue in
  force and effect until the full payment of the promissory note No. and
  interest thereon whichever occurs last. The obligation of the undersigned
  hereunder is joint and several with any other guarantee or security and
  absolute and unconditional irrespective of any legal limitation, disability,
  incapacity or other circumstance relating to the Buyer or any other person,
  or any amendment or supplement to the said shipbuilding Contract, the
  promissory notes or any other document, instrument or agreement contemplated
  therein or of the genuineness, legality, validity, regularity or
  enforceability of the said shipbuilding Contract, the Promissory Notes or any
  other documents, instruments or agreements contemplated therein. This shall
  be a continuing guarantee and shall cover and secure any ultimate balance
  owing under the promissory note No. , but you shall not be obliged to exhaust
  your recourse against the Buyer or the securities which you may hold before
  being entitled to payment from the undersigned of the obligation hereby
  guaranteed. The undersigned hereby represents and warrants that (A) the
  undersigned is a company duly organised and validly existing and in full
  compliance with the laws of the [ ] and has full legal right, power and
  authority to execute this letter of guarantee and to perform its obligations
  hereunder, (B) it has taken all appropriate and necessary corporate action to
  authorize the issuance of this letter of guarantee and the performance by it
  of its obligations hereunder, (C) the execution, delivery and performance of
  this letter of guarantee and the covenants herein contained will not violate
  or contravene any provisions of any applicable treaty, law or regulation or
  any judgment order or decree of any court, or governmental agency, or violate
  or result in breach of its constitutional documents, (D) this letter of
  guarantee constitutes the legal, valid and binding obligations of the
  undersigned enforceable in accordance with its terms subject to overriding
  principles, if any, of insolvency law, and (E) it has obtained all necessary
  consents, licenses, approvals, and authorisations, and registrations or
  declarations, with any governmental authority required in connection with the
  validity and enforceability of its guarantee and the same are in full force and
  effect. This letter of guarantee and any non-contractual obligations arising
  in connection with this letter of guarantee shall be governed by and
  construed in accordance with the laws of England. The undersigned hereby
  irrevocably consents that any legal action or proceeding against the
  undersigned, or any of its property, with respect to this letter of guarantee
  may be brought in the High Court in London, England, and by execution and
  delivery of this letter of guarantee the undersigned hereby accepts in regard
  to any such action or proceeding, for itself and in respect of its property,
  generally and unconditionally the exclusive jurisdiction of the aforesaid
  court.

  

 

	
  

  	
  Notwithstanding
  anything to the contrary contained in this letter of guarantee or any of the
  documents executed as security therefore, the agreement, obligations and
  liabilities of the undersigned herein contained are joint and several and
  shall be construed accordingly. The undersigned agrees and consents to be
  bound by this letter of guarantee notwithstanding that this letter of
  guarantee may be invalid or unenforceable against the undersigned, whether or
  not the deficiency is known to yourself. You shall be at liberty to release
  the undersigned from this letter of guarantee and to compound with or
  otherwise vary or agree to vary the liability or to grant time and indulgence
  to make other arrangements with the undersigned without prejudicing or
  affecting the rights and remedies of yourself against the other undersigned.
  Without prejudice to any other mode of service allowed under any relevant
  law, the undersigned irrevocably appoints [ ] whose registered office is at [
  ] as its agent for service of process in relation to any proceedings before
  the High Court in London, England in connection with this letter of
  guarantee; and agrees that failure by a process agent to notify the
  undersigned of the process will not invalidate the proceedings concerned. The
  undersigned represents and warrants that this letter of guarantee is a
  commercial act and that the undersigned is not entitled to claim immunity
  from legal proceedings with respect to itself or any of its properties or
  assets on the grounds of sovereignty or otherwise under any law. To the
  extent that the undersigned or any of its properties or assets has or
  hereafter may acquire any right to immunity from set-off, legal proceedings,
  attachment prior to judgment, other attachment or execution of judgment on
  the grounds of sovereignty or otherwise, the undersigned for itself and its
  properties and other assets hereby irrevocably waives such right to immunity
  in respect of its obligations under this letter of guarantee. After this
  letter of guarantee shall have expired as aforesaid, you will return the same
  to the undersigned without any request from the undersigned. IN WITNESS
  WHEREOF, the undersigned has caused this letter of guarantee to be executed
  and delivered by its duly authorised representative on the day and year above
  written. Yours very truly, for and on behalf of DANAOS CORPORATION. By Name:
  Title : for and on behalf of

  

 

 

 

	
  

  	
  AGREEMENT This
  Agreement is made on this 27th day of September 2010 by and between: (1) CELL
  CONTAINER (NO. 7) CORP. (the “Buyer”); and (2) HYUNDAI SAMHO HEAVY INDUSTRIES
  CO., LTD. (the ‘Builder”), (hereinafter the parties referred to individually
  as the “Party” and collectively as the “Parties”), to amend and supplement
  the Contract as defined hereinafter. WHEREAS: A. The Buyer and the Builder
  entered into a shipbuilding contract on 9 November 2007 as amended and
  supplemented from time to time (the “Contract”) for the construction and sale
  of one (1) 10,100 TEU class container carrier, having the Builder’s Hull No
  5462 (the “Vessel”). B. The Buyer desires to amend the terms of payment of
  the Contract Price and to postpone part of the final instalment of the
  Contract Price (as that term is defined in the Contract) until after delivery
  of the Vessel. C. The Buyer is willing to execute and deliver to the Builder
  the Mortgage, Assignment and the Time Charter Assignment (each as hereinafter
  defined) in respect of the Vessel as security for the payment of the
  postponed part of the final instalment referred to in Recital (B) above. D.
  Danaos Corporation (the “Guarantor”) is willing to execute and deliver to the
  Builder the Letter of Guarantee (as hereinafter defined) guaranteeing the
  payment of the postponed part of the final instalment referred to in Recital
  (B) above. E. The Builder is willing to agree to such amendment of the terms
  of payment of the Contract Price and deferral of part of the final instalment
  upon the terms and conditions herein below. NOW, THEREFORE, for good and
  valuable consideration the Parties hereby agree to enter into this AGREEMENT
  on the following terms and conditions. 1 DEFINITIONS “Assignment” has the
  meaning given in Clause 4.4. “Business Day” means a day (other than a
  Saturday or Sunday) on which banks are open for general business in London,
  New York, Athens and Seoul. “Delivery Instalment” has the meaning given in
  Clause 3.1. “Delivery Instalment Due Date” has the meaning given in Clause
  3.2. “Due Date” means the Delivery Instalment Due Date and any Post Delivery
  Instalment Due Date and in the plural means both of them. “Event of Default”
  has the meaning given in Clause 9.

  

 

	
  

  	
  “First Loan”
  means the Loan made or to be made available to, amongst others, the Buyer by
  the First Mortgagee in respect of (inter
  alia) the Vessel. “First Mortgagee” means the agent that the lenders,
  HSH Nordbank AG, Piraeus Bank A.E., and Aegean Baltic Bank S.A., will
  appoint. “First Security” means (i) the first preferred Liberian
  mortgage over the Vessel in favour of the First Mortgagee and (ii) the
  first priority assignment of the earnings, insurance and requisition
  compensation relating to the Vessel in favour of the First Mortgagee.
  “Intercreditor Deed” means the intercreditor deed between the First Mortgagee
  and the Builder under which the Post Delivery Instalment shall rank behind
  the claims of the First Mortgagee under the First Loan entered into or to be
  entered into between (inter alia) the First Mortgagee and the Buyer providing
  (inter alia) for the First Security. “Letter of Guarantee” has the meaning
  given in Clause 4.2. “Mortgage” has the meaning given in Clause 4.3. “Post
  Delivery Instalment” has the meaning given in Clause 3.1. “Post Delivery Instalment
  Due Date” has the meaning given in Clause 3.3. “Promissory Note” has the
  meaning given in Clause 4.1. “Second Security” means the Mortgage, the
  Assignment and the Time Charter Assignment. “Tax” means any tax (other than
  tax on the overall income of the Builder, levy, impost, duty or other charge
  or withholding of a similar nature (including any penalty or interest payable
  in connection with any failure to pay or any delay in paying any of the
  same). “Tax Deduction” means a deduction or withholding for or on account of
  Tax from a payment under a Transaction Document except for those imposed in
  Korea upon the payment of the Post Delivery Instalment. “Time Charterer”
  means Hanjin Shipping Co., Ltd of Seoul. “Time Charter” means the time
  charter dated 15 November 2007 as amended by addendum no. 1 dated 19
  August 2009 between the Buyer and the Time Charterer. “Time Charter
  Assignment” has the meaning given in Clause 4.5 “Total Loss” means:
  (a) actual, constructive, compromised, agreed or arranged total loss of
  the Vessel; (b) requisition for title or other compulsory acquisition of
  the Vessel otherwise than by requisition for hire; (c) capture, seizure,
  arrest, detention, or confiscation of the Vessel by any person, governmental
  authority or government or by persons acting or purporting to act on behalf
  of any government or any other person which deprives the Buyer of the use of
  the Vessel for 90 days or more after that occurrence; and
  (d) requisition for hire of the Vessel by any government or by persons
  acting or purporting to act on behalf of any government which deprives the
  Buyer of the use of the Vessel for a period of 90 days or more. “Transaction
  Documents” means the Contract, this Agreement, the Second Security, the
  Promissory Notes, the Letter of Guarantee, the Time Charter Assignment and
  the Intercreditor deed.

  

 

	
  

  	
  2 ADJUSTMENT OF
  PAYMENT 2.1 Article X. 2 of the Contract shall be amended and shall
  henceforth be read as follows:- “2. TERMS OF PAYMENT The payments of the
  CONTRACT PRICE shall be made as follows: (a) First Instalment U.S. Dollars
  Twenty Nine Million Forty Eight Thousand only (US$29,048,000) shall be paid
  within four (4) business days of receipt by the BUYER of an original
  refund guarantee issued by the SHINHAN BANK of Korea (hereinafter called the
  “SHINHAN”) in the form annexed hereto as Exhibit “A”. Under this
  CONTRACT, in counting the business days, only Saturdays and Sundays are
  excepted. When a due date falls on a day when banks are not open for business
  in New York, N.Y., U.S.A, Korea, London and Greece, such due date shall fall
  due upon the first business day next following. (b) Second Instalment U.S.
  Dollars Twenty Nine Million Forty Eight Thousand only (US$29,048,000) shall
  be paid within six (6) months from the date of signing this CONTRACT.
  (c) Third Instalment U.S. Dollars Seven Million Two Hundred Sixty Two
  Thousand only (US$7,262,000) shall be paid within three (3) business
  days of receipt by the BUYER of an e-mailed or facsimiled advice from the
  BUILDER upon keel laying. (d) Fourth Instalment U.S. Dollars Seven Million
  Two Hundred Sixty Two Thousand only (US$7,262,000) shall be paid within three
  (3) business days of receipt by the BUYER of an e-mailed or facsimiled
  advice from the BUILDER upon launching. (e) Fifth Instalment’ U.S. Dollars
  Seventy Two Million Six Hundred Twenty Thousand only (US$72,620,000) plus or
  minus any increase or decrease due to modifications and/or adjustment, if
  any, arising prior to delivery of the VESSEL of the CONTRACT PRICE under
  Articles III and V of this CONTRACT shall be paid to the BUILDER concurrently
  with the delivery of the VESSEL. (The date stipulated for payment of each of
  the five instalments mentioned above is hereinafter in this Article and
  in Article XI referred to as the “DUE DATE” of that instalment.) It is
  understood and agreed upon by the BUILDER and the BUYER that all payments
  under the provisions of this Article shall not be delayed or withheld by
  the BUYER due to any dispute or disagreement of whatsoever nature arising
  between the BUILDER and the BUYER. Should there be any dispute in this
  connection, the matter shall be dealt with in accordance with the provisions
  of arbitration in Article XIII hereof.”

  

 

	
  

  	
  In
  consideration of the aforesaid adjustment of the payment terms of the Contract,
  interest shall accrue at the rate of six per cent (6%) per annum. In relation
  to each Post Delivery Instalment from the date on which such Post-Delivery
  Instalment was originally due under the Contract but for the provisions of
  this Agreement up to the date of actual payment. Notwithstanding clause 2.1,
  the Buyer has an option to pay the fourth instalment and part of the fifth
  instalment earlier than the expected due date of such instalments as
  described in the below table. Principal (Adjusted amount) Original payment
  terms Adjusted payment terms Due date of Interest US$ 29,048,000 to be paid
  within three (3) business days from event of first steel cutting to be
  paid upon delivery (or earlier at the Buyer’s option) to be paid upon
  delivery together with fifth (5th) installment US$ 14,524,000 to be paid
  within three (3) business days from event of keel laying to be paid upon
  delivery (or earlier at the Buyer’s option) to be paid upon delivery together
  with fifth (5th) installment US$7,262,000 to be paid within three
  (3) business days from event of keel laying to be paid within three
  (3) business days from event of launching (or earlier at the Buyer’s
  option) to be paid together with fourth (4t(5)) installment within three
  (3) business days from the event of launching All payments of interest
  shall accrue from day-to-day and shall be calculated on the basis of the
  actual number of days elapsed in a three hundred and sixty (360) day year.
  For the sake of clarity, the Builder shall notify the Buyer of the exact
  amount of interest according to the relevant provisions of the Contract.” 3
  POSTPONEMENT OF PAYMENT OF INSTALMENTS 3.1 The final instalment of the
  Contract Price under the Contract will be payable by the Buyer as the
  delivery instalment (the “Delivery Instalment”) and the post delivery
  instalment (the “Post Delivery Instalment”). 3.2 The Delivery Instalment in
  the sum of U.S. Dollars Fifty Million Nine Hundred and Four Thousand Eight
  Hundred and Sixty (US$50,904,860) plus any increase or minus any decrease due
  to modifications and/or adjustment, if any, to the Contract Price under
  Articles III and V of the Contract arising prior to delivery of the Vessel
  shall be paid by the Buyer on the delivery of the Vessel which is scheduled
  on March 15, 2011 or such later date as is permissible pursuant to the
  Contract (the “Delivery Instalment Due Date”). The Post Delivery Instalment
  amounting to U.S. Dollars Twenty One Million Seven Hundred and Fifteen
  Thousand One Hundred and Forty (US$21,715,140) shall be paid over a period of
  four (4) years from the actual delivery of the Vessel in six
  (6) equal instalments the first due

  

 

	
  

  	
  date being 15
  September 2012 and the remaining six instalments payable semi-annually
  thereafter as listed in Table 1. (each a “Post Delivery Instalment Due
  Date”). Interest shall accrue at the rate of eight per cent (8%) per annum on
  all of the outstanding balance of the Post Delivery Instalment which shall be
  paid by the Buyer semi-annually the first due date being 15
  September 2011 and at six month intervals thereafter as listed in Table
  1. The rate of interest shall be increased to ten per cent (10%) per annum in
  the event of default. <Repayment schedule for the Post Delivery Instalment
  based on the the delivery of the Vessel on March 15, 2011> Table 1
  PAYMENT DUE DATE PRINCIPAL(A) INTEREST(B) TOTAL (A+B) 1st 15-Sep-11 $887,907
  $887,907 15-Mar-12 - $878,256 $878,256 15-Sep-12 $3,619,190 $887,907
  $4,507,097 2nd 15-Mar-13 $3,619,190 $727,859 $4,347,049 3rd 15-Sep-13
  $3,619,190 $591,938 $4,211,128 4th 15-Mar-14 $3,619,190 $436,715 $4,055,905
  5th 15-Sep-14 $3,619,190 $295,969 $3,915,159 6th 15-Mar-15 $3,619,190
  $145,571 $3,764,761 TOTAL $21,715,140 $4,852,122 $26,567,262 The figures in
  above Table 1 shall be adjusted in accordance with Clause 3.3 if the actual
  delivery of the Vessel is other than March 15, 2011. 3.4 It is
  understood and agreed by the Builder and the Buyer that no payments to be
  made by the Buyer pursuant to this Clause 3 shall be delayed or withheld by
  the Buyer due to any dispute or disagreement of whatsoever nature arising
  between the Builder and the Buyer. If a Due Date would otherwise fall on a
  day which is not a Business Day, that Due Date will instead be on the next
  Business Day in that calendar month (if there is one) or the preceding
  Business Day (if there is not). 3.5 The Buyer shall make all payments without
  any Tax Deduction, unless a Tax Deduction is required by law. 3.6 If a Tax
  Deduction is required by law to be made by the Buyer, the amount of the
  payment due from the Buyer shall be increased to an amount which (after
  making any Tax Deduction) leaves an amount equal to the payment which would
  have been due if no Tax Deduction had been required. 3.7 The Buyer may at any
  time, if it gives the Builder not less than 15 days’ prior notice, prepay the
  whole or part of the Post Delivery Instalment, but if in part then the Buyer
  shall state which of the Promissory Notes is to be prepaid and such
  Promissory Note shall be prepaid in full and not in part. Any prepayment
  shall be made together with accrued interest. 3.8 Article X. 8 of the
  Contract shall be amended and shall hereafter be read so that at the end of
  the first paragraph the following wording is inserted:-

  

 

	
  

  	
  “In the event
  that the BUYER pays to the BUILDER any amount in excess of the pre-delivery
  instalments, the BUILDER will procure that Shinhan Bank of Korea will amend
  its letter of guarantee (or arrange for the issue of a replacement) so as to
  include such excess amount. 4 SECURITIES TO BE FURNISHED BY THE BUYER As a
  condition precedent to the effectiveness of this Agreement the Buyer shall
  furnish the Builder with securities as follows upon the delivery of the
  Vessel. 4.1 Promissory Notes The Buyer shall execute and deliver to the
  Builder six (6) promissory notes (each individually a “Promissory Note”
  and collectively the “Promissory Notes”) as follows: (a) Each Promissory Note
  shall relate to an instalment under the Post Delivery Instalment and shall be
  for a payment of an amount of principal (A) and interest (B) as
  listed in Table 1 next to the corresponding instalment to which that
  Promissory Note relates. (b) Each Promissory Note shall be in the form
  annexed hereto as Exhibit “A”. 4.2 Letter of Guarantee The Buyer shall
  furnish the Builder with an unconditional letter of guarantee, being in the
  form annexed hereto as Exhibit “B” and in respect of each Promissory
  Note issued by the Buyer (each individually a “Letter of Guarantee” and
  collectively the “Letters of Guarantee”) each such Letter of Guarantee to be
  duly executed and delivered by the Guarantor guaranteeing the payment by the
  Buyer of the principal sums and interest specified in the relevant Promissory
  Note. 4.3 Second Preferred Mortgage on the Vessel The Buyer shall execute and
  deliver to the Builder a second preferred Liberian mortgage over the Vessel
  in the maximum principal amount of US$28,229,682 in form and substance
  satisfactory to the Builder (the “Mortgage”) as security for (i) the
  Buyer’s obligations under the Promissory Notes and (ii) the obligations
  of the Buyer under this Agreement. 4.4 Second Priority Assignment The Buyer
  shall execute and deliver to the Builder a second priority assignment of its
  interests in the earnings, insurances and requisition compensation of the
  Vessel in form and substance satisfactory to the Builder (the “Assignment”)
  as security for (i) the Buyer’s obligations under the Promissory Notes
  and (ii) the obligations of the Buyer under this Agreement. 4.5 Time
  Charter Assignment The Buyer shall execute and deliver to the Builder a
  second priority assignment of its interests in the Time Charter of the Vessel
  in form and substance satisfactory to the Builder (the “Time Charter
  Assignment”) as security for (i) the Buyer’s obligations under the
  Promissory Notes and (ii) the obligations of the Buyer under this
  Agreement.

  

 

	
  

  	
  5 OTHER
  CONDITIONS PRECEDENT The Buyer shall, on or prior to delivery of the Vessel,
  provide the following to the Builder: 5.1 satisfactory evidence that the
  earnings, insurance and requisition compensation of the Vessel are free from
  encumbrances other than the First Security. 5.2 satisfactory evidence that
  the Vessel is insured and classed as provided by the terms of the Mortgage
  and that the Mortgage is duly registered on the Liberian Ship Register; 5.3 certified
  true copies of the constitutional documents of the Buyer and the Guarantor
  together with certified true copies of board resolutions of the Buyer and
  certified extract of the standing resolutions of the Guarantor and a power of
  attorney authorising the execution of this Agreement, the Second Security,
  the Promissory Notes and the Letters of Guarantee and to which the Buyer and
  the Guarantor is, or will be a party; 5.4 certified true copies of all
  licenses, consents or approvals which may be required by the Buyer or the
  Guarantor in connection with the execution and validity and enforceability of
  any of the documents to which they are a party; 5.5 originals or certified
  true copies from the Buyer’s and the Guarantor’s agents for receipt of
  service and proceedings accepting their appointment under each of the
  documents in which they are to be appointed as agents; 5.6 the Intercreditor
  Deed duly signed; 5.7 satisfactory legal opinions addressed to the Builder on
  matters of Liberian and Marshall Islands law relating to the due execution of
  all documents by the Buyer and the Guarantor and the validity of this
  Agreement, the Promissory Notes, the Letter of Guarantee and all of the
  Second Security executed in favour of the Builder. 6 DEFAULT INTEREST If the
  Builder does not receive on the due date any sum due from the Buyer under
  this Agreement (or any other agreement entered into by the Buyer in
  connection with this Agreement), the Buyer shall on demand pay interest on
  such sum from and including the due date to the date of actual payment (as
  well as before judgment) at the rate per annum of ten per cent (10%). 7
  CALCULATION OF INTEREST All payments of interest hereunder shall accrue from
  day-to-day and shall be calculated on the basis of the actual number of days
  elapsed in a three hundred and sixty (360) day year. 8 GENERAL UNDERTAKINGS
  The Buyer further undertakes that, throughout the period from the date hereof
  until the full amount of the Delivery Instalment and Post Delivery Instalment
  together with accrued interest thereon has been paid to the Builder: 8.1 it
  will ensure that at all times the claims of the Builder against it under this
  Agreement rank at least pari passu with the claims of all its other unsecured
  creditors save those whose claims are preferred by any bankruptcy, insolvency
  or other similar laws of general application;

  

 

	
  

  	
  8.2 it will
  ensure that at all times the insured value of the Vessel in the hull and
  machinery policies shall in no event be less than one hundred and twenty five
  per cent (125%) of, the contract price under the Contract; the Buyer will
  (i) upon the Builder’s written request provide the Builder with copies
  of the said insurance policies; and (ii) notify the Builder promptly and
  in writing of any changes to the insured value of the Vessel whether made
  pursuant to this undertaking or otherwise; 8.3 it shall procure that the
  interest of the Builder shall be endorsed on the relevant hull and machinery
  policy by incorporation of a loss payable clause (in a form agreed by the Builder)
  and notice of assignment of insurances signed by the Buyer and that the
  Builder shall be furnished with proforma copies thereof and a letter of
  undertaking in such form as is customary; 8.4 it shall procure that the
  interest of the Builder shall be endorsed on the Certificate of Entry or
  policy of the protection and indemnity and/or war risks association by
  incorporation of a loss payable clause (in a form agreed by the Builder) and
  notice of assignment of insurances signed by the Buyer and that the Builder
  shall be furnished with a copy of the certificate of entry or policy and a
  letter of undertaking in such form as is customary by the PM association; 8.5
  it shall ensure that the earnings, insurances and requisition compensation of
  the Vessel are free from encumbrances other than the First Security and
  Second Security; 8.6 it shall not create or permit to subsist any mortgage,
  charge, pledge, lien or other security interest securing any obligation of
  any person or any other agreement or arrangement having a similar effect over
  any of its assets other than the First Security and Second Security and liens
  arising in the ordinary course of business or by operation of law. 9 EVENTS
  OF DEFAULT Each of the following events shall constitute an event of default (each
  an “Event of Default”) (whether such event shall occur or come about
  voluntarily or involuntarily or by operation of law or regulation or pursuant
  to, or in compliance with, any judgment, decree or order of any court or
  other authority): 9.1 The Buyer fails to pay any amount (whether in respect
  of principal, interest or otherwise) due and payable by the Buyer to the
  Builder under this Agreement or any of the Promissory Notes on the due date
  and such failure is not remedied within 15 days; or 9.2 the Buyer or the
  Guarantor defaults in the due performance and discharge of any of its other
  duties or liabilities under this Agreement or the Transaction Documents to
  which it is a party unless such failure, in the Builder’s opinion, is capable
  of remedy and is remedied within 30 days of such failure; or 9.3 any order
  shall be made by any competent court or other competent authority or a
  resolution shall be passed by the Buyer or the Guarantor, for the appointment
  of a liquidator of, or otherwise for the winding-up or dissolution of the
  Buyer or the Guarantor, except for the purpose of amalgamation or
  re-organisation (not involving or arising out of insolvency) the terms of
  which shall have received the prior written approval of the Builder; or 9.4
  an administrator, receiver, administrative receiver, manager, trustee or
  similar official is appointed (and such appointment is not cancelled or
  withdrawn within 30 days) for all or a

  

 

	
  

  	
  part of the
  assets and undertaking of the Buyer having a value of at least $500,000 or
  the Guarantor having a value of at least $5,000,000; or 9.5 it becomes
  unlawful for the Buyer or the Guarantor to perform and discharge any of its
  duties and liabilities contained in this Agreement and/or the Transaction
  Documents to which it is a party or for the Builder to exercise any of its
  rights and powers under this Agreement and/or the Transaction Documents; or
  9.6 anything is done or omitted to be done by the Buyer or the Guarantor
  which materially prejudices the security under the second security and has
  not been cured within 30 days of the builder giving notice thereof to the
  Buyer; or 9.7 the First Loan is declared due and payable prior to its stated
  maturity by reason of an event of default (howsoever defined), or 9.8 an
  event of default occurs under the Shipbuilding Contract as amended in respect
  of Hull No. 5459. 10 POWERS ON DEFAULT 10.1 Upon the occurrence of an Event
  of Default, the Builder may, by notice to the Buyer, declare that the Post
  Delivery Instalment together with accrued interest is either immediately due
  and payable or payable on demand, whereupon the Post Delivery Instalment
  together with accrued interest shall become immediately due and payable or
  (as the case may be) payable on demand being made by the Builder. 10.2 In addition
  the Builder may take any other action, exercise any other right or pursue any
  other remedy conferred upon the Builder by this Agreement and/or the
  Transaction Documents or by any applicable law or regulation or otherwise as
  a consequence of such Event of Default. 10.3 Save for the amendments
  contained herein, all other terms and conditions of the Contract shall remain
  valid and in full force. 10.4 The Builder’s rights under this Clause are
  subject to the provisions of the Intercreditor Deed. 11 TOTAL LOSS Following
  the occurrence of a Total Loss with respect to the Vessel, the Post Delivery
  Instalment together with accrued interest on the Post Delivery Instalment
  shall become due and payable on the earlier of (i) 120 days after such
  Total Loss has occurred or is deemed to have occurred, and (ii) the day
  on which insurance proceeds or other compensation monies in respect of the
  Total Loss have been received by the party entitled thereto. 12 [NOT USED] 13
  COSTS AND EXPENSES The Buyer shall promptly on demand pay the Builder the
  amount of all costs and expenses (including legal fees) reasonably incurred
  by the Builder in connection with the negotiation, preparation, printing and
  execution of this Agreement and any other documents referred to in this Agreement;
  and any other documents executed after the date of this Agreement.

  

 

	
  

  	
  14
  CONFIDENTIALITY This Agreement shall be kept strictly private and
  confidential and shall not be disclosed to any other third party.
  Notwithstanding the foregoing, disclosure is permitted (i) to the
  Buyer’s and Guarantor’s financiers and potential financiers, (ii) to the
  Buyer’s and Guarantor’s shareholders and affiliates, (iii) to Buyer’s
  and Guarantor’s legal and financial advisers and (iv) as may be required
  by law (including by virtue of rules and regulations of any securities
  exchange authorities). 15 ENTIRE AGREEMENT This Agreement shall constitute an
  integral part of the Contract and shall constitute the only and entire
  agreement between the Parties with respect to the subject matter hereof and
  unless otherwise expressly agreed between the Parties, all other agreements,
  oral or written, made and entered into between the Parties prior to the
  execution of this Agreement shall be null and void. 16 ENFORCEMENT AND
  JURISDICTION This Agreement and any non-contractual obligations arising in
  connection with this Agreement is governed by and construed in accordance
  with English law. 16.1 The High Court in London England has exclusive
  jurisdiction to settle any dispute arising out of or in connection with this
  Agreement (including a dispute regarding the existence, validity or
  termination of this Agreement) (a “Dispute”). 16.2 The Parties agree that the
  High Court in London England is the most appropriate and convenient court to
  settle Disputes and accordingly no Party will argue to the contrary. 16.3
  Clause 15.2 is for the benefit of the Builder only. As a result, the Builder
  shall not be prevented from taking proceedings relating to a Dispute in any
  other courts with jurisdiction. 16.4 To the extent allowed by law, the
  Builder may take concurrent proceedings in any number of jurisdictions. 16.5
  Without prejudice to any other mode of service allowed under any relevant
  law, the Buyer: 16.5.1 irrevocably appoints Danaos Management Consultants
  whose registered office is at 4 Staples Inn, Holborn, London WCIV 7QU as its
  agent for service of process in relation to any proceedings before the
  English courts in connection with this Agreement or any Transaction Document;
  and 16.5.2 agree that failure by a process agent to notify any Buyer of the
  process will not invalidate the proceedings concerned. IN WITNESS WHEREOF,
  the Parties have caused this Agreement to be duly executed on the day and
  year first above written.

  

 

	
  

  	
  SIGNATURES For
  and on behalf of CELLCONTAINER (NO. 7) CORP. By: [ILLEGIBLE] Name:
  [ILLEGIBLE] Title: ATTORNEY-IN-FACT For and on behalf of HYUNDAI SAMHO HEAVY
  INDUSTRIES CO., LTD. By: [ILLEGIBLE] Name: E. C. HAN Title:
  ATTORNEY-IN-FACT In witness M. Papankoluau MICHALIS PAPANIKOLUAU ATTORNEY AT
  LAW DANAOS SHIPPNG CO.. LTD. 14. AKT1 KONDYL1 118 52 PIRACUS

  

 

	
  

  	
  EXHIBIT A
  PROMISSORY NOTE NO. US$ Date: 20 For value received, Cellcontainer
  (No. 7) Corp. a corporation duly organized and existing under the laws
  of Liberia having its registered office at 80 Broad Street, Monrovia, Liberia
  hereby unconditionally promises to pay on to Hyundai Samho Heavy Industries
  Co., Ltd. or its nominee or its assignees, or any other holder hereof
  from time to time or its order the principal sum of US$ only, and to pay
  interest on the said principal sum from and including [•] at the rate
  of eight per cent (8%) per annum, the first payment of interest to be due and
  payable on [•] and thereafter payable semi-annually on the [•]
  and on the [•] of each
  and every year, until maturity (whether by acceleration or otherwise) and thereafter
  at the rate of ten per cent (10%) per annum until the principal sum and the
  interest thereon are fully paid. Interest shall be calculated on the basis of
  the actual days elapsed and a year of three hundred sixty (360) days. Both
  principal and interest shall be payable in United States Dollars in
  immediately available funds at the account of the [Korea Exchange Bank,
  Seoul, Korea] (Account No. [•] with [  ] Morgan Chase Bank,
  New York, U.S.A.] without any deduction or withholding for or on account of
  any present or future taxes or other charges. If the maker of this note is
  required to make any such deduction or withholding from any payment hereunder,
  the maker shall pay such additional amount as may be necessary in order that
  the actual amount received after deduction or withholding shall be equal to
  the amount that would have been received if such deduction or withholding
  were not required. This note is one of a series of six (6) promissory
  notes in the aggregate principal amount of US$[  ] of like form and
  tenor except their respective numbers, principal amounts and dates of
  maturity (together the “Series Notes”). Each of said notes is secured by
  a letter of guarantee issued by DANAOS CORPORATION a corporation duly
  organized and existing under the laws of [   ] having its
  registered office at [ ]. In the event of a default in the payment of the
  principal when the same shall become due and payable, then interest at the
  rate of ten per cent (10%) per annum on the principal and any accrued
  interest from the due date to the date of payment shall be due and payable
  together with the principal and accrued interest. In the event default shall
  be made in the payment of the principal or interest on this note, or in the
  payment of the principal of or interest on any of the other
  Series Notes, as and when the same shall become due and payable and such
  default shall continue for a period of fifteen (15) days, the holder of this
  note may at its option declare the principal of and accrued interest on this
  note to be forthwith due and payable, whereupon the same shall be forthwith
  due and payable, and the holder hereof shall have the other remedies herein
  or by law provided. The maker of this note may, if it gives the holder not
  less than fifteen (15) days’ prior notice, prepay the whole of this note by
  payment of the principal hereof together with accrued interest hereon to and
  including the date of prepayment, provided, however that there shall be no default
  in payment of principal or interest on this note or on any of the other
  Series Notes as of the date of such prepayment.

  

 

	
  

  	
  This note may
  be transferred or assigned by the holder of this note to any bank with the
  prior notice to the maker. The maker unconditionally agrees to promptly pay
  to and reimburse the holder hereof on demand any and all reasonable costs and
  expenses including, without limitation to, reasonable attorney’s fees
  incidental to the enforcement or attempted enforcement of this note. The
  holder of this note shall be under no obligation to make presentment,
  protest, demand or notice of any kind whatsoever for the payment of this
  note. The maker and the endorsers of this note hereby waive the right to
  interpose any defense, set-off or counterclaim of any nature or description
  in any action or proceeding arising on, out of, under or by reason of this
  note. The maker hereby authorizes and empowers the holder of this note to
  acknowledge on the maker’s behalf by endorsement the receipt of the payment
  or prepayment of the principal sum or interest thereon. Upon full payment of
  all sums payable on this note and the other Series Notes, the holder of
  this note shall immediately return this note to the maker with such
  endorsement to the effect that this note has been fully paid. This note and
  any non-contractual obligations arising in connection with this note shall be
  governed by and construed in accordance with the laws of England. The maker
  and the endorsers hereby consent to any legal action or proceeding in
  relation to this note being brought in the High Court in London, England and
  hereby irrevocably waives any immunity from suit, attachment, (before or
  after judgment) or execution on a judgment to which they or their property
  may be entitled. The maker and the endorsers hereby irrevocably submit to the
  exclusive jurisdiction of the courts of England. Without prejudice to any
  other mode of service allowed under any relevant law, the undersigned: irrevocably
  appoints [   ] whose registered office is at [   ]
  as its agent for service of process in relation to any proceedings before the
  High Court in London, England in connection with this note; and agrees that
  failure by a process agent to notify the undersigned of the process will not
  invalidate the proceedings concerned. The maker hereby certifies and declares
  that all acts, conditions and things required to be done and performed and to
  have happened precedent to the creation and issuance of this note, and to
  constitute this note the valid obligation of the maker in accordance with its
  terms, have been done and performed and have happened in due and strict
  compliance with all applicable laws and regulation. IN WITNESS WHEREOF, the
  undersigned has caused this note be signed in its corporate name by its
  representative thereunto duly authorized on the day and year first above
  written.

  

 

	
  

  	
  For and on
  behalf of CELLCONTAINER (NO. 7) CORP.] By Name: Title:

  

 

	
  

  	
  EXHIBIT B Date:
  20 Hyundai Samho Heavy Industries Co., Ltd. 1700, Yongdang-Ri,
  Samho-Eup, Youngam-Gun, Chollanam-Do, KOREA LETTER OF GUARANTEE NO. Gentlemen
  : In consideration of your completing and delivering one (1) 10,100 TEU
  Class Container Carrier, your Hull No. 462 (hereinafter called the
  “Vessel”), to CELLCONTAINER (NO. 7) CORP. (hereinafter called the “Buyer”),
  on deferred payment basis, under a certain shipbuilding Contract dated
  November 9, 2007, as amended, entered into by and between you and the
  Buyer, the undersigned, as primary obligor and not as surety merely, does
  hereby irrevocably, absolutely and unconditionally guarantee jointly and
  severally the due and punctual payment (whether at the stated maturity, by
  acceleration or otherwise) by the Buyer of the promissory note No. in the
  principal amount of US$ to be due and payable on to be issued by the Buyer to
  the order of yourself upon delivery of the Vessel pursuant to the said
  shipbuilding Contract, and also guarantee the due and punctual payment by the
  Buyer of interest on this promissory note No. , the first payment of interest
  to be due and payable on [   ] and thereafter payable
  semi-annually, at the rate of eight per cent (8%) per annum until maturity
  (by acceleration or otherwise) and thereafter at the rate of ten per cent
  (10%) per annum until full payment. Interest shall be calculated on the basis
  of the actual days elapsed and a year of three hundred sixty (360) days. The
  undersigned hereby waives the right to interpose any defense, set-off or
  counter-claim of any nature or description in any action or proceedings
  arising on, out of, under or by reason of the notes or this letter of
  guarantee or said shipbuilding Contract. The Promissory Note No. is one of a
  series of six (6) Promissory Notes in the aggregate principal amount of
  US$ [   ] In the event that the Buyer fails to pay the said
  Promissory Note and/or interest thereon on the maturity date (by acceleration
  or otherwise) in accordance with the terms of the said promissory notes, the
  undersigned will pay to you the amounts due immediately upon receipt by us of
  written demand from you including a statement that the Buyer is in default of
  payment of the said promissory notes and/or interest thereon, without
  requesting you to take any or further procedure or step against the Buyer or with
  respect to the promissory notes and/or interest thereon, together with
  default interest on any such amounts demanded by you as aforesaid from the
  due date thereof until the payment in full of such amounts at the rate of ten
  per cent (10%) per annum payable in accordance with the terms of the said
  promissory notes and any and all reasonable costs and expenses including,
  without limitation, reasonable attorney’s fees incidental to the enforcement
  or attempted enforcement of this guarantee. The undersigned hereby consents
  to any renewals, changes, extensions or partial payments of the promissory
  notes or the indebtedness for which they are given without prior notice to
  us, and consents that no such renewals, changes, extensions or partial
  payments shall discharge any party to the promissory note or us from any
  liability thereon or hereon in whole or in part (other than to the extent of
  any such partial prepayment).

  

 

	
  

  	
  The undersigned
  hereby agrees that this guarantee and undertaking hereunder shall be assignable
  to and shall inure to the benefit of the holder of the promissory note No. as
  if each of them was originally named herein. The payment by the undersigned
  under this guarantee shall be made in United States Dollars in immediately
  available funds by telegraphic transfer to the account of the [Korea Exchange
  Bank, Seoul, Korea] (Account No. [•]) with [JP Morgan Chase Bank, New
  York, U.S.A.] in favour of you or your assignee without deduction,
  withholding or set-off. In the event that any deduction or withholding is
  imposed on any payment to be made hereunder by law or by any taxing
  authority, the undersigned agrees to pay such additional amount as may be
  necessary in order that the actual amount received after deduction or
  withholding shall be equal to the amount that would have been received if
  such deduction or withholding were not required after allowance for any
  increase in taxes or charges payable by virtue of the receipt of such
  additional amount. This letter of guarantee shall come into full force and
  effect upon delivery of the Vessel by you to the Buyer and shall continue in
  force and effect until the full payment of the promissory note No. and
  interest thereon whichever occurs last. The obligation of the undersigned
  hereunder is joint and several with any other guarantee or security and
  absolute and unconditional irrespective of any legal limitation, disability,
  incapacity or other circumstance relating to the Buyer or any other person,
  or any amendment or supplement to the said shipbuilding Contract, the
  promissory notes or any other document, instrument or agreement contemplated
  therein or of the genuineness, legality, validity, regularity or
  enforceability of the said shipbuilding Contract, the Promissory Notes or any
  other documents, instruments or agreements contemplated therein. This shall
  be a continuing guarantee and shall cover and secure any ultimate balance
  owing under the promissory note No. , but you shall not be obliged to
  exhaust your recourse against the Buyer or the securities which you may hold
  before being entitled to payment from the undersigned of the obligation
  hereby guaranteed. The undersigned hereby represents and warrants that
  (A) the undersigned is a company duly organised and validly existing and
  in full compliance with the, laws of [   ] and has full legal
  right, power and authority to execute this letter of guarantee and to perform
  its obligations hereunder, (B) it has taken all appropriate and
  necessary corporate action to authorize the issuance of this letter of
  guarantee and the performance by it of its obligations hereunder,
  (C) the execution, delivery and performance of this letter of guarantee
  and the covenants herein contained will not violate or contravene any
  provisions of any applicable treaty, law or regulation or any judgment order
  or decree of any court, or governmental agency, or violate or result in
  breach of its constitutional documents, (D) this letter of guarantee
  constitutes the legal, valid and binding obligations of the undersigned
  enforceable in accordance with its terms subject to overriding principles, if
  any, of insolvency law, and (E) it has obtained all necessary consents,
  licenses, approvals, and authorisations, and registrations or declarations,
  with any governmental authority required in connection with the validity and
  enforceability of its guarantee and the same are in full force and effect.
  This letter of guarantee and any non-contractual obligations arising in
  connection with this letter of guarantee shall be governed by and construed
  in accordance with the laws of England. The undersigned hereby irrevocably
  consents that any legal action or proceeding against the undersigned, or any
  of its property, with respect to this letter of guarantee may be brought in
  the High Court in London, England, and by execution and delivery of this
  letter of guarantee the undersigned hereby accepts in regard to any such
  action or proceeding, for itself and in respect of its property, generally
  and unconditionally the exclusive jurisdiction of the aforesaid court.

  

 

	
  

  	
  Notwithstanding
  anything to the contrary contained in this letter of guarantee or any of the
  documents executed as security therefore, the agreement, obligations and
  liabilities of the undersigned herein contained are joint and several and
  shall be construed accordingly. The undersigned agrees and consents to be
  bound by this letter of guarantee notwithstanding that this letter of
  guarantee may be invalid or unenforceable against the undersigned, whether or
  not the deficiency is known to yourself. You shall be at liberty to release
  the undersigned from this letter of guarantee and to compound with or
  otherwise vary or agree to vary the liability or to grant time and indulgence
  to make other arrangements with the undersigned without prejudicing or
  affecting the rights and remedies of yourself against the other undersigned.
  Without prejudice to any other mode of service allowed under any relevant
  law, the undersigned irrevocably appoints [   ] whose
  registered office is at [ ] as its agent for service of process in relation
  to any proceedings before the High Court in London, England in connection
  with this letter of guarantee; and agrees that failure by a process agent to
  notify the undersigned of the process will not invalidate the proceedings
  concerned. The undersigned represents and warrants that this letter of
  guarantee is a commercial act and that the undersigned is not entitled to
  claim immunity from legal proceedings with respect to itself or any of its
  properties or assets on the grounds of sovereignty or otherwise under any
  law. To the extent that the undersigned or any of its properties or assets
  has or hereafter may acquire any right to immunity from set-off, legal
  proceedings, attachment prior to judgment, other attachment or execution of
  judgment on the grounds of sovereignty or otherwise, the undersigned for
  itself and its properties and other assets hereby irrevocably waives such
  right to immunity in respect of its obligations under this letter of
  guarantee. After this letter of guarantee shall have expired as aforesaid,
  you will return the same to the undersigned without any request from the
  undersigned. IN WITNESS WHEREOF, the undersigned has caused this letter of
  guarantee to be executed and delivered by its duly authorised representative
  on the day and year above written. Yours very truly, for and on behalf of
  DANAOS CORPORATION. By Name: Title : for and on behalf of

  

 

 

	
  

  	
  AGREEMENT This
  Agreement is made on this 27th day of September 2010 by and between: (1)
  CELLCONTAINER (NO. 8) CORP. (the “Buyer”); and (2) HYUNDAI SAMHO HEAVY
  INDUSTRIES CO., LTD. (the “Builder”), (hereinafter the parties referred to
  individually as the “Party” and collectively as the “Parties”), to amend and
  supplement the Contract as defined hereinafter. WHEREAS: A. The Buyer and the
  Builder entered into a shipbuilding contract on 9 November 2007 as amended
  and supplemented from time to time (the “Contract”) for the construction and
  sale of one (1) 10,100 TEU class container carrier, having the Builder’s Hull
  No S463 (the “Vessel”). B. The Buyer desires to amend the terms of payment of
  the Contract Price and to postpone part of the final instalment of the
  Contract Price (as that term is defined in the Contract) until after delivery
  of the Vessel. C. The Buyer is willing to execute and deliver to the Builder
  the Mortgage, Assignment and the Time Charter Assignment (each as hereinafter
  defined) in respect of the Vessel as security for the payment of the
  postponed part of the final instalment referred to in Recital (B) above. D.
  Danaos Corporation (the “Guarantor”) is willing to execute and deliver to the
  Builder the Letter of Guarantee (as hereinafter defined) guaranteeing the
  payment of the postponed part of the final instalment referred to in Recital
  (B) above. E. The Builder is willing to agree to such amendment of the terms
  of payment of the Contract Price and deferral of part of the final instalment
  upon the terms and conditions herein below. NOW, THEREFORE, for good and
  valuable consideration the Parties hereby agree to enter into this AGREEMENT
  on the following terms and conditions. 1 DEFINITIONS “Assignment” has the
  meaning given in Clause 4.4. “Business Day” means a day (other than a
  Saturday or Sunday) on which banks are open for general business in London,
  New York, Athens and Seoul. “Delivery Instalment” has the meaning given in
  Clause 3.1. “Delivery Instalment Due Date” has the meaning given in Clause
  3.2. “Due Date” means the Delivery Instalment Due Date and any Post Delivery
  Instalment Due Date and in the plural means both of them. “Event of Default”
  has the meaning given in Clause 9.

  

 

	
  

  	
  “First Loan”
  means the Loan made or to be made available to, amongst others, the Buyer by
  the First Mortgagee in respect of (inter alia) the Vessel. “First Mortgagee”
  means the agent that the lenders, ABN AMRO Bank N.V., Lloyds TSB Bank Plc,
  and National Bank of Greece S.A., will appoint. “First Security” means (i)
  the first preferred Liberian mortgage over the Vessel in favour of the First
  Mortgagee and (ii) the first priority assignment of the earnings, insurance
  and requisition compensation relating to the Vessel in favour of the First
  Mortgagee. “Intercreditor Deed” means the intercreditor deed between the
  First Mortgagee and the Builder under which the Post Delivery Instalment
  shall rank behind the claims of the First Mortgagee under the First Loan
  entered into or to be entered into between (inter alia) the First Mortgagee
  and the Buyer providing (inter alia) for the First Security. “Letter of
  Guarantee” has the meaning given in Clause 4.2. “Mortgage” has the meaning
  given in Clause 4.3. “Post Delivery Instalment” has the meaning given in
  Clause 3.1. “Post Delivery Instalment Due Date” has the meaning given in
  Clause 3.3. “Promissory Note” has the meaning given in Clause 4.1. “Second
  Security” means the Mortgage, the Assignment and the Time Charter Assignment.
  “Tax” means any tax (other than tax on the overall income of the Builder,
  levy, impost, duty or other charge or withholding of a similar nature
  (including any penalty or interest payable in connection with any failure to
  pay or any delay in paying any of the same). “Tax Deduction” means a
  deduction or withholding for or on account of Tax from a payment under a
  Transaction Document except for those imposed in Korea upon the payment of
  the Post Delivery Instalment. “Time Charterer” means Hanjin Shipping Co., Ltd
  of Seoul. “Time Charter” means the time charter dated 15 November 2007 as
  amended by addendum no. 1 dated 19 August 2009 between the Buyer and the Time
  Charterer. “Time Charter Assignment” has the meaning given in Clause 4.5
  “Total Loss” means: (a) actual, constructive, compromised, agreed or arranged
  total loss of the Vessel; (b) requisition for title or other compulsory
  acquisition of the Vessel otherwise than by requisition for hire; (c)
  capture, seizure, arrest, detention, or confiscation of the Vessel by any
  person, governmental authority or government or by persons acting or
  purporting to act on behalf of any government or any other person which
  deprives the Buyer of the use of the Vessel for 90 days or more after that
  occurrence; and (d) requisition for hire of the Vessel by any government or
  by persons acting or purporting to act on behalf of any government which
  deprives the Buyer of the use of the Vessel for a period of 90 days or more.

  

 

	
  

  	
  “Transaction
  Documents” means the Contract, this Agreement, the Second Security, the
  Promissory Notes, the Letter of Guarantee, the Time Charter Assignment and
  the Intercreditor Deed. 2 ADJUSTMENT OF PAYMENT 2.1 Article X. 2 of the
  Contract shall be amended and shall henceforth be read as follows:- “2. TERMS
  OF PAYMENT The payments of the CONTRACT PRICE shall be made as follows: (a)
  First Instalment U.S. Dollars Twenty Nine Million Forty Eight Thousand only
  (US$29,048,000) shall be paid within four (4) business days of receipt by the
  BUYER of an original refund guarantee issued by the SHINHAN BANK of Korea (hereinafter
  called the “SHINHAN”) in the form annexed hereto as Exhibit “A”. Under this
  CONTRACT, in counting the business days, only Saturdays and Sundays are
  excepted. When a due date falls on a day when banks are not open for business
  in New York, N.Y., U.S.A, Korea, London and Greece, such due date shall fall
  due upon the first business day next following. (b) Second Instalment U.S.
  Dollars Twenty Nine Million Forty Eight Thousand only (US$29,048,000) shall
  be paid within six (6) months from the date of signing this CONTRACT. (c)
  Third Instalment U.S. Dollars Seven Million Two Hundred Sixty Two Thousand
  only (US$7,262,000) shall be paid within three (3) business days of receipt
  by the BUYER of an e-mailed or facsimiled advice from the BUILDER upon keel
  laying. (d) Fourth Instalment U.S. Dollars Seven Million Two Hundred Sixty
  Two Thousand only (US$7,262,000) shall be paid within three (3) business days
  of receipt by the BUYER of an e-mailed or facsimiled advice from the BUILDER
  upon launching. (e) Fifth Instalment U.S. Dollars Seventy Two Million Six
  Hundred Twenty Thousand only (US$72,620,000) plus or minus any increase or
  decrease due to modifications and/or adjustment, if any, arising prior to
  delivery of the VESSEL of the CONTRACT PRICE under Articles III and V of this
  CONTRACT shall be paid to the BUILDER concurrently with the delivery of the
  VESSEL. (The date stipulated for payment of each of the five instalments
  mentioned above is hereinafter in this Article and in Article XI referred to
  as the “DUE DATE” of that instalment.) It is understood and agreed upon by
  the BUILDER and the BUYER that all payments under the provisions of this
  Article shall not be delayed or withheld by the BUYER due to any dispute or
  disagreement of whatsoever nature arising between the BUILDER and the BUYER.
  Should

  

 

	
  

  	
  there be any
  dispute in this connection, the matter shall be dealt with in accordance with
  the provisions of arbitration in Article XIII hereof.” In consideration of
  the aforesaid adjustment of the payment terms of the Contract, interest shall
  accrue at the rate of six per cent (6%) per annum. In relation to each Post
  Delivery Instalment from the date on which such Post-Delivery Instalment was
  originally due under the Contract but for the provisions of this Agreement up
  to the date of actual payment. Notwithstanding clause 2.1, the Buyer has an
  option to pay the fourth instalment and part of the fifth instalment earlier
  than the expected due date of such instalments as described in the below
  table. Principal (Adjusted amount) Original payment terms Adjusted payment
  terms Due date of Interest US$ 29,048,000 to be paid within three (3)
  business days from event of first steel cutting to be paid upon delivery (or
  earlier at the Buyer’s option) to be paid upon delivery together with fifth
  (5th) installment US$ 14,524,000 to be paid within three (3) business days
  from event of keel laying to be paid upon delivery (or earlier at the Buyer’s
  option) to be paid upon delivery together with fifth (5th) installment
  US$7,262,000 to be paid within three (3) business days from event of keel
  laying to be paid within three (3) business days from event of launching (or
  earlier at the Buyer’s option) to be paid together with fourth (4th)
  installment within three (3) business days from the event of launching All
  payments of interest shall accrue from day-to-day and shall be calculated on
  the basis of the actual number of days elapsed in a three hundred and sixty
  (360) day year. For the sake of clarity, the Builder shall notify the Buyer of
  the exact amount of interest according to the relevant provisions of the
  Contract.” 3 POSTPONEMENT OF PAYMENT OF INSTALMENTS 3.1 The final instalment
  of the Contract Price under the Contract will be payable by the Buyer as the
  delivery instalment (the “Delivery Instalment”) and the post delivery
  instalment (the “Post Delivery Instalment”). 3.2 The Delivery Instalment in
  the sum of U.S. Dollars Fifty Million Nine Hundred and Four Thousand Eight
  Hundred and Sixety (US$50,904,860) plus any increase or minus any decrease
  due to modifications and/or adjustment, if any, to the Contract Price under
  Articles III and V of the Contract arising prior to delivery of the Vessel
  shall be paid by the Buyer on the delivery of the Vessel which is scheduled
  on May 25, 2011 or such later date as is permissible pursuant to the Contract
  (the “Delivery Instalment Due Date”). 

  

 

	
  

  	
  3.3 The Post
  Delivery Instalment amounting to U.S. Dollars Twenty One Million Seven
  Hundred and Fifteen Thousand One Hundred and Forty (US$21,715,140) shall be
  paid over a period of four (4) years from the actual delivery of the Vessel
  in six (6) equal instalments the first due date being November 25, 2012 and
  the remaining six instalments payable semi-annually thereafter as listed in
  Table 1. (each a “Post Delivery Instalment Due Date”). Interest shall accrue
  at the rate of eight per cent (8%) per annum on all of the outstanding
  balance of the Post Delivery Instalment which shall be paid by the Buyer
  semi-annually the first due date being November 25, 2011 and at six month
  intervals thereafter as listed in Table 1. The rate of interest shall be
  increased to ten per cent (10%) per annum in the event of default.
  <Repayment schedule for the Post Delivery Instalment based on the the
  delivery of the Vessel on May 25, 2011> Table 1 PAYMENT DUE DATE
  PRINCIPAL(A) INTEREST(B) TOTAL(A+B) 1st 25-Nov-11 - $887,907 $887,907
  25-May-12 - $878,256 $878,256 25-Nov-12 $3,619,190 $887,907 $4,507,097 2nd
  25-May-13 $3,619,190 9,190 $727,859 $4,347,049 3rd 25-Nov-13 $3,619,190 $591,938
  $4,211,128 4th 25-May-14 $3,619,190 $436,715 $4,055,905 5th 25-Nov-14
  $3,619,190 $295,969 $3,915,159 6th 25-May-15 $3,619,190 $145,571 $3,764,761
  TOTAL $21,715,140 $4,852,122 $26,567,262 
  The figures in above Table 1 shall be adjusted in accordance with
  Clause 3.3 if the actual delivery of the Vessel is other than May 25, 2011.
  3.4 It is understood and agreed by the Builder and the Buyer that no payments
  to be made by the Buyer pursuant to this Clause 3 shall be delayed or
  withheld by the Buyer due to any dispute or disagreement of whatsoever nature
  arising between the Builder and the Buyer. If a Due Date would otherwise fall
  on a day which is not a Business Day, that Due Date will instead be on the
  next Business Day in that calendar month (if there is one) or the preceding
  Business Day (if there is not). 3.5 The Buyer shall make all payments without
  any Tax Deduction, unless a Tax Deduction is required by law. 3.6 If a Tax
  Deduction is required by law to be made by the Buyer, the amount of the payment
  due from the Buyer shall be increased to an amount which (after making any
  Tax Deduction) leaves an amount equal to the payment which would have been
  due if no Tax Deduction had been required. 3.7 The Buyer may at any time, if
  it gives the Builder not less than 15 days’ prior notice, prepay the whole or
  part of the Post Delivery Instalment, but if in part then the Buyer shall
  state which of the Promissory Notes is to be prepaid and such Promissory Note
  shall be prepaid in full and not in part. Any prepayment shall be made
  together with accrued interest.

  

 

	
  

  	
  3.8 Article X.
  8 of the Contract shall be amended and shall hereafter be read so that at the
  end of the first paragraph the following wording is inserted:- “In the event
  that the BUYER pays to the BUILDER any amount in excess of the pre-delivery
  instalments, the BUILDER will procure that Woori Bank of Korea will amend its
  letter of guarantee (or arrange for the issue of a replacement) so as to
  include such excess amount. 4 SECURITIES TO BE FURNISHED BY THE BUYER As a
  condition precedent to the effectiveness of this Agreement the Buyer shall
  furnish the Builder with securities as follows upon the delivery of the
  Vessel. 4.1 Promissory Notes The Buyer shall execute and deliver to the
  Builder six (6) promissory notes (each individually a “Promissory Note” and
  collectively the “Promissory Notes”) as follows: (a) Each Promissory Note
  shall relate to an instalment under the Post Delivery Instalment and shall be
  for a payment of an amount of principal (A) and interest (B) as listed in
  Table 1 next to the corresponding instalment to which that Promissory Note
  relates. (b) Each Promissory Note shall be in the form annexed hereto as
  Exhibit “A”. 4.2 Letter of Guarantee The Buyer shall furnish the Builder with
  an unconditional letter of guarantee, being in the form annexed hereto as
  Exhibit “B” and in respect of each Promissory Note issued by the Buyer (each
  individually a “Letter of Guarantee” and collectively the “Letters of
  Guarantee”) each such Letter of Guarantee to be duly executed and delivered
  by the Guarantor guaranteeing the payment by the Buyer of the principal sums
  and interest specified in the relevant Promissory Note. 4.3 Second Preferred
  Mortgage on the Vessel The Buyer shall execute and deliver to the Builder a
  second preferred Liberian mortgage over the Vessel in the maximum principal
  amount of US$28,229,682 in form and substance satisfactory to the Builder
  (the “Mortgage”) as security for (i) the Buyer’s obligations under the
  Promissory Notes and (ii) the obligations of the Buyer under this Agreement.
  4.4 Second Priority Assignment The Buyer shall execute and deliver to the
  Builder a second priority assignment of its interests in the earnings,
  insurances and requisition compensation of the Vessel in form and substance
  satisfactory to the Builder (the “Assignment”) as security for (i) the
  Buyer’s obligations under the Promissory Notes and (ii) the obligations of
  the Buyer under this Agreement. 4.5 Time Charter Assignment 

  

 

	
  

  	
  The Buyer shall
  execute and deliver to the Builder a second priority assignment of its
  interests in the Time Charter of the Vessel in form and substance
  satisfactory to the Builder (the “Time Charter Assignment”) as security for
  (i) the Buyer’s obligations under the Promissory Notes and (ii) the
  obligations of the Buyer under this Agreement. 5 OTHER CONDITIONS PRECEDENT
  The Buyer shall, on or prior to delivery of the Vessel, provide the following
  to the Builder: 5.1 satisfactory evidence that the earnings, insurance and
  requisition compensation of the Vessel are free from encumbrances other than
  the First Security. 5.2 satisfactory evidence that the Vessel is insured and
  classed as provided by the terms of the Mortgage and that the Mortgage is
  duly registered on the Liberian Ship Register; 5.3 certified true copies of
  the constitutional documents of the Buyer and the Guarantor together with
  certified true copies of board resolutions of the Buyer and certified extract
  of the standing resolutions of the Guarantor and a power of attorney authorising
  the execution of this Agreement, the Second Security, the Promissory Notes
  and the Letters of Guarantee and to which the Buyer and the Guarantor is, or
  will be a party; 5.4 certified true copies of all licenses, consents or
  approvals which may be required by the Buyer or the Guarantor in connection
  with the execution and validity and enforceability of any of the documents to
  which they are a party; 5.5 originals or certified true copies from the
  Buyer’s and the Guarantor’s agents for receipt of service and proceedings
  accepting their appointment under each of the documents in which they are to
  be appointed as agents; 5.6 the Intercreditor Deed duly signed; 5.7
  satisfactory legal opinions addressed to the Builder on matters of Liberian
  and Marshall Islands law relating to the due execution of all documents by
  the Buyer and the Guarantor and the validity of this Agreement, the
  Promissory Notes, the Letter of Guarantee and all of the Second Security
  executed in favour of the Builder. 6 DEFAULT INTEREST If the Builder does not
  receive on the due date any sum due from the Buyer under this Agreement (or
  any other agreement entered into by the Buyer in connection with this
  Agreement), the Buyer shall on demand pay interest on such sum from and
  including the due date to the date of actual payment (as well as before
  judgment) at the rate per annum of ten percent (10%). 7 CALCULATION OF
  INTEREST All payments of interest hereunder shall accrue from day-to-day and
  shall be calculated on the basis of the actual number of days elapsed in a
  three hundred and sixty (360) day year. 

  

 

	
  

  	
  8 GENERAL
  UNDERTAKINGS The Buyer further undertakes that, throughout the period from
  the date hereof until the full amount of the Delivery Instalment and Post
  Delivery Instalment together with accrued interest thereon has been paid to
  the Builder: 8.1 it will ensure that at all times the claims of the Builder
  against it under this Agreement rank at least pari passu with the claims of
  all its other unsecured creditors save those whose claims are preferred by
  any bankruptcy, insolvency or other similar laws of general application; 8.2
  it will ensure that at all times the insured value of the Vessel in the hull
  and machinery policies shall in no event be less than one hundred and twenty five
  per cent (125%) of, the contract price under the Contract; the Buyer will (i)
  upon the Builder’s written request provide the Builder with copies of the
  said insurance policies; and (ii) notify the Builder promptly and in writing
  of any changes to the insured value of the Vessel whether made pursuant to
  this undertaking or otherwise; 8.3 it shall procure that the interest of the
  Builder shall be endorsed on the relevant hull and machinery policy by
  incorporation of a loss payable clause (in a form agreed by the Builder) and
  notice of assignment of insurances signed by the Buyer and that the Builder
  shall be furnished with proforma copies thereof and a letter of undertaking
  in such form as is customary; 8.4 it shall procure that the interest of the
  Builder shall be endorsed on the Certificate of Entry or policy of the
  protection and indemnity and/or war risks association by incorporation of a
  loss payable clause (in a form agreed by the Builder) and notice of
  assignment of insurances signed by the Buyer and that the Builder shall be
  furnished with a copy of the certificate of entry or policy and a letter of
  undertaking in such form as is customary by the P&I association; 8.5 it
  shall ensure that the earnings, insurances and requisition compensation of
  the Vessel are free from encumbrances other than the First Security and
  Second Security; 8.6 it shall not create or permit to subsist any mortgage,
  charge, pledge, lien or other security interest securing any obligation of
  any person or any other agreement or arrangement having a similar effect over
  any of its assets other than the First Security and Second Security and liens
  arising in the ordinary course of business or by operation of law. 9 EVENTS
  OF DEFAULT Each of the following events shall constitute an event of default
  (each an “Event of Default”) (whether such event shall occur or come about
  voluntarily or involuntarily or by operation of law or regulation or pursuant
  to, or in compliance with, any judgment, decree or order of any court or
  other authority): 9.1 The Buyer fails to pay any amount (whether in respect
  of principal, interest or otherwise) due and payable by the Buyer to the
  Builder under this Agreement or any of the Promissory Notes on the due date
  and such failure is not remedied within 15 days; or 9.2 the Buyer or the
  Guarantor defaults in the due performance and discharge of any of its other
  duties or liabilities under this Agreement or the Transaction Documents to
  which it is a party unless such failure, in the Builder’s opinion, is capable
  of remedy and is remedied within 30 days of such failure; or 

  

 

	
  

  	
  9.3 any order
  shall be made by any competent court or other competent authority or a
  resolution shall be passed by the Buyer or the Guarantor, for the appointment
  of a liquidator of, or otherwise for the winding-up or dissolution of the
  Buyer or the Guarantor, except for the purpose of amalgamation or
  re-organisation (not involving or arising out of insolvency) the terms of
  which shall have received the prior written approval of the Builder; or 9.4
  an administrator, receiver, administrative receiver, manager, trustee or
  similar official is appointed (and such appointment is not cancelled or
  withdrawn within 30 days) for all or a part of the assets and undertaking of
  the Buyer having a value of at least $500,000 or the Guarantor having a value
  of at least $5,000,000; or 9.5 it becomes unlawful for the Buyer or the
  Guarantor to perform and discharge any of its duties and liabilities
  contained in this Agreement and/or the Transaction Documents to which it is a
  party or for the Builder to exercise any of its rights and powers under this
  Agreement and/or the Transaction Documents; or 9.6 anything is done or
  omitted to be done by the Buyer or the Guarantor which materially prejudices
  the security under the second security and has not been cured within 30 days
  of the builder giving notice thereof to the Buyer; or 9.7 the First Loan is
  declared due and payable prior to its stated maturity by reason of an event
  of default (howsoever defined), or 10 POWERS ON DEFAULT 10.1 Upon the
  occurrence of an Event of Default, the Builder may, by notice to the Buyer,
  declare that the Post Delivery Instalment together with accrued interest is
  either immediately due and payable or payable on demand, whereupon the Post Delivery
  Instalment together with accrued interest shall become immediately due and
  payable or (as the case may be) payable on demand being made by the Builder.
  10.2 In addition the Builder may take any other action, exercise any other
  right or pursue any other remedy conferred upon the Builder by this Agreement
  and/or the Transaction Documents or by any applicable law or regulation or
  otherwise as a consequence of such Event of Default. 10.3 Save for the
  amendments contained herein, all other terms and conditions of the Contract
  shall remain valid and in full force. 10.4 The Builder’s rights under this
  Clause are subject to the provisions of the Intercreditor Deed. 11 TOTAL LOSS
  Following the occurrence of a Total Loss with respect to the Vessel, the Post
  Delivery Instalment together with accrued interest on the Post Delivery
  Instalment shall become due and payable on the earlier of (i) 120 days after
  such Total Loss has occurred or is deemed to have occurred, and (ii) the day
  on which insurance proceeds or other compensation monies in respect of the
  Total Loss have been received by the party entitled thereto. 

  

 

	
  

  	
  12 [NOT USED]
  13 COSTS AND EXPENSES The Buyer shall promptly on demand pay the Builder the
  amount of all costs and expenses (including legal fees) reasonably incurred
  by the Builder in connection with the negotiation, preparation, printing and
  execution of this Agreement and any other documents referred to in this
  Agreement; and any other documents executed after the date of this Agreement.
  14 CONFIDENTIALITY This Agreement shall be kept strictly private and
  confidential and shall not be disclosed to any other third party.
  Notwithstanding the foregoing, disclosure is permitted (i) to the Buyer’s and
  Guarantor’s financiers and potential financiers, (ii) to the Buyer’s and
  Guarantor’s shareholders and affiliates, (iii) to Buyer’s and Guarantor’s
  legal and financial advisers and (iv) as may be required by law (including by
  virtue of rules and regulations of any securities exchange authorities). 15
  ENTIRE AGREEMENT This Agreement shall constitute an integral part of the
  Contract and shall constitute the only and entire agreement between the
  Parties with respect to the subject matter hereof and unless otherwise
  expressly agreed between the Parties, all other agreements, oral or written,
  made and entered into between the Parties prior to the execution of this
  Agreement shall be null and void. 16 ENFORCEMENT AND JURISDICTION This
  Agreement and any non-contractual obligations arising in connection with this
  Agreement is governed by and construed in accordance with English law. 16.1
  The High Court in London England has exclusive jurisdiction to settle any
  dispute arising out of or in connection with this Agreement (including a
  dispute regarding the existence, validity or termination of this Agreement)
  (a “Dispute”). 16.2 The Parties agree that the High Court in London England
  is the most appropriate and convenient court to settle Disputes and
  accordingly no Party will argue to the contrary. 16.3 Clause 15.2 is for the
  benefit of the Builder only. As a result, the Builder shall not be prevented
  from taking proceedings relating to a Dispute in any other courts with
  jurisdiction. 16.4 To the extent allowed by law, the Builder may take
  concurrent proceedings in any number of jurisdictions. 16.5 Without prejudice
  to any other mode of service allowed under any relevant law, the Buyer: 16.5.1
  irrevocably appoints Danaos Management Consultants whose registered office is
  at 4 Staples Inn, Holborn, London WC1V 7QU as its agent for service of
  process in relation to any proceedings before the English courts in
  connection with this Agreement or any Transaction Document; and 16.5.2 agree
  that failure by a process agent to notify any Buyer of the process will not
  invalidate the proceedings concerned. 

  

 

	
  

  	
  IN WITNESS
  WHEREOF, the Parties have caused this Agreement to be duly executed on the
  day and year first above written. SIGNATURES For and on behalf of
  CELLCONTAINER (NO. 8) CORP. By: [ILLEGIBLE] Name: [ILLEGIBLE] Title:
  [ILLEGIBLE] For and on behalf of HYUNDAI SAMHO HEAVY INDUSTRIES CO., LTD. By:
  [ILLEGIBLE] Name: [ILLEGIBLE] Title: [ILLEGIBLE] In Witness: [ILLEGIBLE]
  [ILLEGIBLE] 

  

 

	
  

  	
  EXHIBIT A
  PROMISSORY NOTE NO. US$ Date: 20 For value received, Cellcontainer (No. 8)
  Corp. a corporation duly organized and existing under the laws of Liberia
  having its registered office at 80 Broad Street, Monrovia, Liberia hereby
  unconditionally promises to pay on to Hyundai Samho Heavy Industries Co.,
  Ltd. or its nominee or its assignees, or any other holder hereof from time to
  time or its order the principal sum of US$ only, and to pay interest on the
  said principal sum from and including [•] at the rate of eight per cent (8%)
  per annum, the first payment of interest to be due and payable on [•] and
  thereafter payable semi-annually on the [•] and on the [•] of each and every
  year, until maturity (whether by acceleration or otherwise) and thereafter at
  the rate of ten per cent (10%) per annum until the principal sum and the
  interest thereon are fully paid. Interest shall be calculated on the basis of
  the actual days elapsed and a year of three hundred sixty (360) days. Both
  principal and interest shall be payable in United States Dollars in
  immediately available funds at the account of the [Korea Exchange Bank,
  Seoul, Korea] (Account No. [•]) with [JP Morgan Chase Bank, New York, U.S.A.]
  without any deduction or withholding for or on account of any present or
  future taxes or other charges. If the maker of this note is required to make
  any such deduction or withholding from any payment hereunder, the maker shall
  pay such additional amount as may be necessary in order that the actual
  amount received after deduction or withholding shall be equal to the amount
  that would have been received if such deduction or withholding were not
  required. This note is one of a series of six (6) promissory notes in the
  aggregate principal amount of US$[ ] of like form and tenor except their
  respective numbers, principal amounts and dates of maturity (together the
  “Series Notes”). Each of said notes is secured by a letter of guarantee
  issued by DANAOS CORPORATION a corporation duly organized and existing under
  the laws of [ ] having its registered office at [ ]. In the event of a
  default in the payment of the principal when the same shall become due and
  payable, then interest at the rate of ten per cent (10%) per annum on the
  principal and any accrued interest from the due date to the date of payment
  shall be due and payable together with the principal and accrued interest. In
  the event default shall be made in the payment of the principal or interest
  on this note, or in the payment of the principal of or interest on any of the
  other Series Notes, as and when the same shall become due and payable and
  such default shall continue for a period of fifteen (15) days, the holder of
  this note may at its option declare the principal of and accrued interest on
  this note to be forthwith due and payable, whereupon the same shall be
  forthwith due and payable, and the holder hereof shall have the other
  remedies herein or by law provided. The maker of this note may if it gives
  the holder not less than fifteen (15) days’ prior notice, prepay the whole of
  this note by payment of the principal hereof together with accrued interest
  hereon to and including the date of prepayment, provided, however that there
  shall be no default in payment of principal or interest on this note or on
  any of the other Series Notes as of the date of such prepayment.

  

 

	
  

  	
  This note may
  be transferred or assigned by the holder of this note to any bank with the
  prior notice to the maker. The maker unconditionally agrees to promptly pay
  to and reimburse the holder hereof on demand any and all reasonable costs and
  expenses including, without limitation to, reasonable attorney’s fees
  incidental to the enforcement or attempted enforcement of this note. The
  holder of this note shall be under no obligation to make presentment,
  protest, demand or notice of any kind whatsoever for the payment of this
  note. The maker and the endorsers of this note hereby waive the right to
  interpose any defense, set-off or counterclaim of any nature or description
  in any action or proceeding arising on, out of, under or by reason of this
  note. The maker hereby authorizes and empowers the holder of this note to
  acknowledge on the maker’s behalf by endorsement the receipt of the payment
  or prepayment of the principal sum or interest thereon. Upon full payment of
  all sums payable on this note and the other Series Notes, the holder of this
  note shall immediately return this note to the maker with such endorsement to
  the effect that this note has been fully paid. This note and any
  non-contractual obligations arising in connection with this note shall be
  governed by and construed in accordance with the laws of England. The maker
  and the endorsers hereby consent to any legal action or proceeding in
  relation to this note being brought in the High Court in London, England and
  hereby irrevocably waives any immunity from suit, attachment, (before or
  after judgment) or execution on a judgment to which they or their property
  may be entitled. The maker and the endorsers hereby irrevocably submit to the
  exclusive jurisdiction of the courts of England. Without prejudice to any
  other mode of service allowed under any relevant law, the undersigned:
  irrevocably appoints [ ] whose registered office is at [ ] as its agent for
  service of process in relation to any proceedings before the High Court in
  London, England in connection with this note; and agrees that failure by a
  process agent to notify the undersigned of the process will not invalidate
  the proceedings concerned. The maker hereby certifies and declares that all
  acts, conditions and things required to be done and performed and to have
  happened precedent to the creation and issuance of this note, and to
  constitute this note the valid obligation of the maker in accordance with its
  terms, have been done and performed and have happened in due and strict
  compliance with all applicable laws and regulation. IN WITNESS WHEREOF, the
  undersigned has caused this note be signed in its corporate name by its
  representative thereunto duly authorized on the day and year first above
  written. 

  

 

	
  

  	
  For and on
  behalf of CELLCONTAINER (NO. 8) CORP.] By Name: Title:

  

 

	
  

  	
  EXHIBIT B Date:
  20 Hyundai Samho Heavy Industries Co., Ltd. 1700, Yongdang-Ri, Samho-Eup,
  Youngam-Gun, ChoIlanam-Do, KOREA LETTER OF GUARANTEE NO. Gentlemen : In
  consideration of your completing and delivering one (1) 10,100 TEU Class
  Container Carrier, your Hull No. 463 (hereinafter called the “Vessel”), to
  CELLCONTAINER (NO. 8) CORP. (hereinafter called the “Buyer”), on deferred
  payment basis, under a certain shipbuilding Contract dated November 9, 2007],
  as amended, entered into by and between you and the Buyer, the undersigned,
  as primary obligor and not as surety merely, does hereby irrevocably,
  absolutely and unconditionally guarantee jointly and severally the due and
  punctual payment (whether at the stated maturity, by acceleration or
  otherwise) by the Buyer of the promissory note No. in the principal amount of
  US$ to be due and payable on to be issued by the Buyer to the order of
  yourself upon delivery of the Vessel pursuant to the said shipbuilding
  Contract, and also guarantee the due and punctual payment by the Buyer of
  interest on this promissory note No. ,the first payment of interest to be due
  and payable on [ ] and thereafter payable semi-annually, at the rate of eight
  per cent (8%) per annum until maturity (by acceleration or otherwise) and
  thereafter at the rate of ten per cent (10%) per annum until full payment.
  Interest shall be calculated on the basis of the actual days elapsed and a
  year of three hundred sixty (360) days. The undersigned hereby waives the
  right to interpose any defense, set-off or counter-claim of any nature or
  description in any action or proceedings arising on, out of, under or by
  reason of the notes or this letter of guarantee or said shipbuilding
  Contract. The Promissory Note No. is one of a series of six (6) Promissory
  Notes in the aggregate principal amount of US$ [ ]. In the event that the
  Buyer fails to pay the said Promissory Note and/or interest thereon on the
  maturity date (by acceleration or otherwise) in accordance with the terms of
  the said promissory notes, the undersigned will pay to you the amounts due
  immediately upon receipt by us of written demand from you including a
  statement that the Buyer is in default of payment of the said promissory
  notes and/or interest thereon, without requesting you to take any or further
  procedure or step against the Buyer or with respect to the promissory notes
  and/or interest thereon, together with default interest on any such amounts
  demanded by you as aforesaid from the due date thereof until the payment in
  full of such amounts at the rate of ten per cent (10%) per annum payable in
  accordance with the terms of the said promissory notes and any and all
  reasonable costs and expenses including, without limitation, reasonable
  attorney’s fees incidental to the enforcement or attempted enforcement of this
  guarantee. The undersigned hereby consents to any renewals, changes,
  extensions or partial payments of the promissory notes or the indebtedness
  for which they are given without prior notice to us, and consents that no
  such renewals, changes, extensions or partial payments shall discharge any
  party to the promissory note or us from any liability thereon or hereon in
  whole or in part (other than to the extent of any such partial prepayment). 

  

 

	
  

  	
  The undersigned
  hereby agrees that this guarantee and undertaking hereunder shall be
  assignable to and shall inure to the benefit of the holder of the promissory
  note No. as if each of them was originally named herein. The payment by the
  undersigned under this guarantee shall be made in United States Dollars in immediately
  available funds by telegraphic transfer to the account of the [Korea Exchange
  Bank, Seoul, Korea] (Account No. [•]) with [JP Morgan Chase Bank, New York,
  U.S.A.] in favour of you or your assignee without deduction, withholding or
  set-off. In the event that any deduction or withholding is imposed on any
  payment to be made hereunder by law or by any taxing authority, the
  undersigned agrees to pay such additional amount as may be necessary in order
  that the actual amount received after deduction or withholding shall be equal
  to the amount that would have been received if such deduction or withholding
  were not required after allowance for any increase in taxes or charges
  payable by virtue of the receipt of such additional amount. This letter of
  guarantee shall come into full force and effect upon delivery of the Vessel
  by you to the Buyer and shall continue in force and effect until the full
  payment of the promissory note No. and interest thereon whichever occurs
  last. The obligation of the undersigned hereunder is joint and several with
  any other guarantee or security and absolute and unconditional irrespective
  of any legal limitation, disability, incapacity or other circumstance
  relating to the Buyer or any other person, or any amendment or supplement to
  the said shipbuilding Contract, the promissory notes or any other document,
  instrument or agreement contemplated therein or of the genuineness, legality,
  validity, regularity or enforceability of the said shipbuilding Contract, the
  Promissory Notes or any other documents, instruments or agreements
  contemplated therein. This shall be a continuing guarantee and shall cover
  and secure any ultimate balance owing under the promissory note No. , but you
  shall not be obliged to exhaust your recourse against the Buyer or the
  securities which you may hold before being entitled to payment from the
  undersigned of the obligation hereby guaranteed. The undersigned hereby
  represents and warrants that (A) the undersigned is a company duly organised
  and validly existing and in full compliance with the laws of t[ ] and has
  full legal right, power and authority to execute this letter of guarantee and
  to perform its obligations hereunder, (B) it has taken all appropriate and
  necessary corporate action to authorize the issuance of this letter of
  guarantee and the performance by it of its obligations hereunder, (C) the
  execution, delivery and performance of this letter of guarantee and the
  covenants herein contained will not violate or contravene any provisions of
  any applicable treaty, law or regulation or any judgment order or decree of
  any court, or governmental agency, or violate or result in breach of its
  constitutional documents, (D) this letter of guarantee constitutes the legal,
  valid and binding obligations of the undersigned enforceable in accordance
  with its terms subject to overriding principles, if any, of insolvency law,
  and (E) it has obtained all necessary consents, licenses, approvals, and
  authorisations, and registrations or declarations, with any governmental authority
  required in connection with the validity and enforceability of its guarantee
  and the same are in full force and effect. This letter of guarantee and any
  non-contractual obligations arising in connection with this letter of
  guarantee shall be governed by and construed in accordance with the laws of
  England. The undersigned hereby irrevocably consents that any legal action or
  proceeding against the undersigned, or any of its property, with respect to
  this letter of guarantee may be brought in the High Court in London, England,
  and by execution and delivery of this letter of guarantee the undersigned
  hereby accepts in regard to any such action or proceeding, for itself and in
  respect of its property, generally and unconditionally the exclusive jurisdiction
  of the aforesaid court. ________________________________________

  

 

	
  

  	
  Notwithstanding
  anything to the contrary contained in this letter of guarantee or any of the
  documents executed as security therefore, the agreement, obligations and
  liabilities of the undersigned herein contained are joint and several and
  shall be construed accordingly. The undersigned agrees and consents to be
  bound by this letter of guarantee notwithstanding that this letter of
  guarantee may be invalid or unenforceable against the undersigned, whether or
  not the deficiency is known to yourself. You shall be at liberty to release
  the undersigned from this letter of guarantee and to compound with or
  otherwise vary or agree to vary the liability or to grant time and indulgence
  to make other arrangements with the undersigned without prejudicing or
  affecting the rights and remedies of yourself against the other undersigned.
  Without prejudice to any other mode of service allowed under any relevant
  law, the undersigned irrevocably appoints [ ] whose registered office is at [
  ] as its agent for service of process in relation to any proceedings before
  the High Court in London, England in connection with this letter of
  guarantee; and agrees that failure by a process agent to notify the undersigned
  of the process will not invalidate the proceedings concerned. The undersigned
  represents and warrants that this letter of guarantee is a commercial act and
  that the undersigned is not entitled to claim immunity from legal proceedings
  with respect to itself or any of its properties or assets on the grounds of
  sovereignty or otherwise under any law. To the extent that the undersigned or
  any of its properties or assets has or hereafter may acquire any right to
  immunity from set-off, legal proceedings, attachment prior to judgment, other
  attachment or execution of judgment on the grounds of sovereignty or
  otherwise, the undersigned for itself and its properties and other assets
  hereby irrevocably waives such right to immunity in respect of its
  obligations under this letter of guarantee. After this letter of guarantee
  shall have expired as aforesaid, you will return the same to the undersigned
  without any request from the undersigned. IN WITNESS WHEREOF, the undersigned
  has caused this letter of guarantee to be executed and delivered by its duly
  authorised representative on the day and year above written. Yours very
  truly, for and on behalf of DANAOS CORPORATION. By Name: Title: for and on
  behalf of

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00187-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00187-of-00352.parquet"}]]