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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 20-F
(Mark One)

☐     REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE 
SECURITIES EXCHANGE ACT OF 1934

OR

☒     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

OR

☐     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
SECURITIES EXCHANGE ACT OF 1934

OR

☐     SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report: Not applicable

For the transition period from _______ to _______

Commission file number: 001-34848

 
SEANERGY MARITIME HOLDINGS CORP.
  
 
(Exact name of Registrant as specified in its charter)
  


 
(Translation of Registrant’s name into English)
  
     
   Republic of the Marshall Islands  
 
(Jurisdiction of incorporation or organization)
  
     
 
154 Vouliagmenis Avenue, 166 74 Glyfada, Greece
  
 
(Address of principal executive offices)
  
     
 
Stamatios Tsantanis, Chairman & Chief Executive Officer
  
 
Seanergy Maritime Holdings Corp.
  
 
154 Vouliagmenis Avenue, 166 74 Glyfada, Greece
  
 
Telephone: +30 213 0181507, Fax: +30 210 9638404
  
 
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
  



Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of class
Trading Symbol(s)
Name of exchange on which Registered
Common Shares, par value $0.0001 per share
SHIP
The Nasdaq Stock Market LLC
Preferred Stock Purchase Rights

The Nasdaq Stock Market LLC

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: As of December 31, 2023, there were 19,636,352 of the registrant’s common shares, $0.0001 par value, and 20,000 shares of the registrant’s Series B Preferred Stock, $0.0001 par value, outstanding.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes  ☒ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒ No

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐
Accelerated filer ☒
Non-accelerated filer ☐
   
Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.  ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).  ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☒
  
International Financial Reporting Standards as issued by the International Accounting Standards Board ☐
  
Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

 
☐ Item 17
  
☐ Item 18
  

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 
☐ Yes
  
☒ No
 

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. N/A

 
☐ Yes
  
☐ No
 


TABLE OF CONTENTS

 
ITEM 1.
 1
 
ITEM 2.
 1
 
ITEM 3.
 1
 
ITEM 4.
 35
 
ITEM 4A.
 57
 
ITEM 5.
 57
 
ITEM 6.
 74
 
ITEM 7.
 78
 
ITEM 8.
 80
 
ITEM 9.
 81
 
ITEM 10.
 82
 
ITEM 11.
 90
 
ITEM 12.
 90
       
 
ITEM 13.
 91
 
ITEM 14.
 91
 
ITEM 15.
 91
 
ITEM 16.
 92
 
ITEM 16A.
 92
 
ITEM 16B.
 92
 
ITEM 16C.
 92
 
ITEM 16D.
 93
 
ITEM 16E.
 93
 
ITEM 16F.
 93
 
ITEM 16G.
 93
 
ITEM 16H.
 94
 
ITEM 16I.
 94
 
ITEM 16J.
 94
 
ITEM 16K.
 94
 
ITEM 17.
 95
 
ITEM 18.
 95
 
ITEM 19.
 96

Table of Contents
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This annual report on Form 20-F contains certain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements include, but are not limited to, statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future and other statements that are other than statements of historical fact.  In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.  The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Without limiting the generality of the foregoing, all statements in this annual report concerning or relating to estimated and projected earnings, margins, costs, expenses, expenditures, cash flows, growth rates, future financial results and liquidity are forward-looking statements. In addition, we, through our senior management, from time to time may make forward-looking public statements concerning our expected future operations and performance and other developments.

The forward-looking statements in this annual report are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties.  Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.  As a result, you are cautioned not to rely on any forward-looking statements.

Many of these statements are based on our assumptions about factors that are beyond our ability to control or predict and are subject to risks and uncertainties that are described more fully in “Item 3. Key Information—D. Risk Factors.” Any of these factors or a combination of these factors could materially affect our future results of operations and the ultimate accuracy of the forward-looking statements. In addition to these important factors, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include among other things:


 •
changes in shipping industry trends, including charter rates, vessel values and factors affecting vessel supply and demand;
 

 •
changes in seaborne and other transportation patterns;
 

 •
changes in the supply of or demand for dry bulk commodities, including dry bulk commodities carried by sea, generally or in particular regions;
 

 •
changes in the number of newbuildings under construction in the dry bulk shipping industry;
 

 •
changes in the useful lives and the value of our vessels and the related impact on our compliance with loan covenants;
 

 •
the aging of our fleet and increases in operating costs;
 

 •
changes in our ability to complete future, pending or recent acquisitions or dispositions;
 

 •
our ability to achieve successful utilization of our fleet;
 

 •
changes to our financial condition and liquidity, including our ability to pay amounts that we owe and obtain additional financing to fund capital expenditures, acquisitions and other general corporate activities;
 

 •
risks related to our business strategy, areas of possible expansion or expected capital spending or operating expenses;
 

 •
changes in our ability to leverage the relationships and reputation in the dry bulk shipping industry of V.Ships Greece Ltd., or V.Ships Greece, and Global Seaways S.A., or Global Seaways, our technical and crew managers of certain of our vessels, and Fidelity Marine Inc., or Fidelity, our commercial manager;
 

 •
changes in the availability of crew, number of off-hire days, classification survey requirements and insurance costs for the vessels in our fleet;
 

 •
changes in our relationships with our contract counterparties, including the failure of any of our contract counterparties to comply with their agreements with us;
 

 •
loss of our customers, charters or vessels;
 

 •
damage to our vessels;
 

 •
potential liability from future litigation and incidents involving our vessels;
 
Table of Contents

 •
our future operating or financial results;
 

 •
acts of terrorism, war, piracy, and other hostilities;
 

 •
public health threats, pandemics, epidemics, other disease outbreaks or calamities (including, without limitation, the coronavirus, or COVID-19 pandemic), and governmental responses thereto;
 

 •
risks associated with the reemergence of the COVID-19 pandemic (and various variants that may emerge), including its effects on demand for dry bulk products, crew changes and the transportation thereof;
 

 •
changes in global and regional economic and political conditions;
 

 •
general domestic and international political conditions or events, including “trade wars” and the ongoing war between Russia and Ukraine and related sanctions, the war between Israel and Hamas or the Houthi crisis in the Red Sea;
 

 •
changes in governmental rules and regulations or actions taken by regulatory authorities, particularly with respect to the dry bulk shipping industry;
 

 •
our ability to continue as a going concern; and
 

 •
other factors discussed in “Item 3. Key Information—D. Risk Factors.”
 
Should one or more of the foregoing risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.  Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects, on us. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.

We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable laws.  If one or more forward-looking statements are updated, no inference should be drawn that additional updates will be made with respect to those or other forward-looking statements.

Table of Contents
PART I

Unless the context otherwise requires, as used in this annual report, the terms “Company,” “Seanergy,” “we,” “us,” and “our” refer to Seanergy Maritime Holdings Corp. and any or all of its subsidiaries, and “Seanergy Maritime Holdings Corp.” refers only to Seanergy Maritime Holdings Corp. and not to its subsidiaries.

We use the term deadweight tons, or “dwt,” in describing the size of vessels. Dwt, expressed in metric tons, each of which is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel can carry.  Unless otherwise indicated, all references to “U.S. dollars,” “dollars,” “U.S. $” and “$” in this annual report are to the lawful currency of the United States of America.  References in this annual report to our common shares are retroactively adjusted to reflect the Company’s reverse stock splits, including the one-for-ten reverse stock split which became effective as of February 16, 2023.

ITEM 1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2.
OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3.
KEY INFORMATION

A.
[Reserved]

B.
Capitalization and Indebtedness

Not applicable.

C.
Reasons for the Offer and Use of Proceeds

Not applicable.

D.
Risk Factors

Some of the following risks relate principally to the industry in which we operate and others relate to our business in general or our common stock.  If any of the following risks occur, our business, financial condition, operating results and cash flows could be materially adversely affected and the trading price of our securities could decline.

Summary of Risk Factors

Below is a summary of the principal factors that make an investment in our common stock speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the headings “Risks Relating to Our Industry,” “Risks Relating to Our Company” and “Risks Relating to Our Common Shares” and should be carefully considered, together with other information in this annual report on Form 20-F and our other filings with the Securities and Exchange Commission, before making an investment decision regarding our common stock.

Risks Relating to Our Industry
 

 •
Charter hire rates for dry bulk vessels are cyclical and volatile and the dry bulk market remains significantly below its historic high. This may adversely affect our earnings, revenue and profitability and our ability to comply with our loan covenants or covenants in other financing agreements.
 

 •
Outbreaks of epidemic and pandemic diseases, including COVID-19, and any relevant governmental responses thereto could adversely affect our business, results of operations or financial condition.
 

 •
We are currently dependent on index-linked charters, while in the past a part of our fleet was employed on a spot voyage basis. Any decrease in spot freight charter rates or indices in the future may adversely affect our earnings.
 
1
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 •
An over-supply of dry bulk vessel capacity may depress the current charter rates and vessel values and, in turn, adversely affect our profitability.
 

 •
If economic conditions throughout the world decline, it will negatively impact our results of operations, financial condition and cash flows, and could cause the market price of our common shares to decline.
 

 •
Political instability, terrorist attacks or other attacks, war, and international hostilities could affect our business, results of operations, cash flows and financial condition.
 

 •
Risks associated with operating ocean-going vessels could affect our business and reputation, which could adversely affect our revenues and expenses.
 

 •
Rising fuel prices may adversely affect our profits.
 

 •
Worldwide inflationary pressures could negatively impact our results of operations and cash flows.
 

 •
Our revenues are subject to seasonal fluctuations, which could affect our operating results and ability to service our debt or pay dividends.
 

 •
Climate change and greenhouse gas restrictions may be imposed.
 

 •
Pending and future tax law changes may result in significant additional taxes to us.
 

 •
Our operations may be adversely impacted by severe weather, including as a result of climate change.
 

 •
Increased regulation as well as scrutiny of environmental, social and governance matters may impact our business and reputation.
 

 •
Our vessels may call on ports located in or may operate in countries that are subject to restrictions or sanctions imposed by the United States, the European Union or other governments that could result in fines or other penalties imposed on us and may adversely affect our reputation and the market price of our common shares.
 

 •
Sulfur regulations to reduce air pollution from ships have required retrofitting of vessels and may cause us to incur significant costs.
 

 •
We are subject to regulation and liability under environmental laws that could require significant expenditures and affect our cash flows and net income.
 

 •
Regulations relating to ballast water discharge may adversely affect our revenues and profitability.
 

 •
Increased inspection procedures, tighter import and export controls and new security regulations could increase costs and disrupt our business.
 

 •
Acts of piracy on ocean-going vessels could adversely affect our business.
 

 •
The operation of dry bulk vessels has particular operational risks.
 

 •
If any of our vessels fails to maintain its class certification or fails any annual survey, intermediate survey, or special survey, or if any scheduled class survey takes longer or is more expensive than anticipated, this could have a material adverse impact on our financial condition and results of operations.
 

 •
As we employ seafarers covered by industry-wide collective bargaining agreements, a failure of industry groups to renew such agreements may disrupt our operations and adversely affect our earnings.
 

 •
Maritime claimants could arrest or attach one or more of our vessels, which could interrupt our cash flows.
 
2
Table of Contents

 •
Governments could requisition our vessels during a period of war or emergency, which could negatively impact our business, financial condition, results of operations, and available cash.
 
Risks Relating to Our Company
 

 •
The market values of our vessels may decrease, which could limit the amount of funds that we can borrow or trigger breaches of certain financial covenants under our current or future loan agreements and other financing agreements, and we may incur an impairment or, if we sell vessels following a decline in their market value, a loss.
 

 •
Newbuilding projects are subject to risks that could cause delays.
 

 •
We may be unable to obtain financing for the vessels we have agreed to acquire or any vessels we may acquire in the future.
 

 •
If the vessels we have agreed to acquire or may agree to acquire in the future are not delivered on time or are delivered with significant defects, our earnings and financial condition could suffer.
 

 •
Substantial debt levels could limit our flexibility to obtain additional financing and pursue other business opportunities.
 

 •
Our loan agreements and other financing arrangements contain, and we expect that other future loan agreements and financing arrangements will contain, restrictive covenants that may limit our liquidity and corporate activities, which could limit our operational flexibility and have an adverse effect on our financial condition and results of operations. In addition, because of the presence of cross-default provisions in our loan agreements and financing arrangements, a default by us under one loan agreement or financing arrangement could lead to defaults under multiple loans and financing agreements.
 

 •
We depend on officers and directors who are associated with United Maritime Corporation, of the Republic of the Marshall Islands (“United”), which may create conflicts of interest.
 

 •
If we fail to manage our planned growth properly, we may not be able to successfully expand our market share.
 

 •
Vessel aging and purchasing and operating secondhand vessels, such as our current fleet, may result in increased operating costs and vessel off-hire, which could adversely affect our financial condition and results of operations.
 

 •
Volatility of SOFR and potential changes of the use of SOFR as a benchmark could affect our profitability, earnings, and cash flow.
 

 •
The failure of our current or future counterparties to meet their obligations under our current or future contracts, including any charter agreements, could cause us to suffer losses or otherwise adversely affect our business.
 

 •
Rising crew costs may adversely affect our profits.
 

 •
We may not be able to attract and retain key management personnel and other employees in the shipping industry, which may negatively affect the effectiveness of our management and our results of operations.
 

 •
Our vessels may suffer damage, and we may face unexpected repair costs, which could adversely affect our cash flow and financial condition.
 

 •
We are exposed to U.S. dollar and foreign currency fluctuations and devaluations that could harm our reported revenue and results of operations.
 

 •
We maintain cash with a limited number of financial institutions including financial institutions that may be located in Greece, which will subject us to credit risk.
 

 •
We are a holding company and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy financial obligations or to pay dividends.
 
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 •
In the highly competitive international shipping industry, we may not be able to compete for charters with new entrants or established companies with greater resources, which may adversely affect our results of operations.
 

 •
Due to our lack of fleet diversification, adverse developments in the maritime dry bulk shipping industry would adversely affect our business, financial condition, and operating results.
 

 •
We are currently subject to litigation and we may be subject to similar or other litigation in the future.


•
The shipping industry has inherent operational risks that may not be adequately covered by our insurances. Further, because we obtain some of our insurances through protection and indemnity associations, we have been and may in the future be retrospectively subject to calls or premiums in amounts based not only on our own claim records, but also on the claim records of all other members of the protection and indemnity associations.
 

 •
Failure to comply with the U.S. Foreign Corrupt Practices Act of 1977, or FCPA, could result in fines, criminal penalties, and an adverse effect on our business.
 

 •
We partly depend on third-party technical and commercial managers for technical and commercial management of our ships. Our operations could be negatively affected if third-party managers fail to perform their services satisfactorily.
 

 •
Management fees will be payable to our managers regardless of our profitability, which could have a material adverse effect on our business, financial condition and results of operations.
 

 •
We may be classified as a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S. holders of our common stock.
 

 •
We may have to pay tax on U.S. source income, which would reduce our earnings.
 

 •
We may be subject to tax in the jurisdictions in which we or our vessel-owning or management subsidiaries are incorporated or operate.
 

 •
We are a “foreign private issuer,” which could make our common stock less attractive to some investors or otherwise harm our stock price.
 

 •
Our corporate governance practices are in compliance with, and are not prohibited by, the laws of the Republic of the Marshall Islands, and as such we are entitled to exemption from certain Nasdaq corporate governance standards. As a result, you may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.
 

 •
We conduct business in China, where the legal system is not fully developed and has inherent uncertainties that could limit the legal protections available to us.
 

 •
Changing laws and evolving reporting requirements could have an adverse effect on our business.
 

 •
A cyber-attack could materially disrupt our business.
 

 •
The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.
 

 •
The international nature of our operations may make the outcome of any potential bankruptcy proceedings difficult to predict.
 
Risks Relating to Our Common Shares
 

 •
We may issue additional common shares or other equity securities without shareholder approval, which would dilute our existing shareholders’ ownership interests and may depress the market price of our common shares.
 

 •
The market price of our common shares has been and may in the future be subject to significant fluctuations. Further, there is no guarantee of a continuing public market to resell our common shares.
 
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 •
A possible “short squeeze” due to a sudden increase in demand of our common stock that largely exceeds supply may lead to further price volatility in our common shares.
 

 •
We may not have the surplus or net profits required by law to pay dividends. The declaration and payment of dividends will always be subject to the discretion of our board of directors and will depend on a number of factors. Our board of directors may not declare dividends in the future.
 

 •
The superior voting rights of our Series B Preferred Shares may limit the ability of our common shareholders to control or influence corporate matters, and the interests of the holder of such shares could conflict with the interests of common shareholders.
 

 •
Anti-takeover provisions in our restated articles of incorporation, as amended, and fourth amended and restated bylaws could make it difficult for our shareholders to replace or remove our current board of directors or could have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of our common shares.
 

 •
Issuance of preferred shares, such as our Series B Preferred Shares, may adversely affect the voting power of our common shareholders and have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of our common shares.
 

 •
We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law, which may negatively affect the ability of shareholders to protect their interests.
 

 •
We may fail to meet the continued listing requirements of Nasdaq, which could cause our common shares to be delisted.


•
As a Marshall Islands corporation with principal executive offices in Greece, and also having subsidiaries in the Republic of the Marshall Islands and other offshore jurisdictions such as the Republic of Liberia, and the British Virgin Islands, our operations may be subject to economic substance requirements.


•
Our fourth amended and restated bylaws provide that the High Court of the Republic of Marshall Islands shall be the sole and exclusive forum for certain disputes between us and our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.


•
We may not achieve the intended benefits of having a forum selection provision if it is found to be unenforceable.


•
It may not be possible for investors to serve process on or enforce U.S. judgments against us.

Risks Relating to Our Industry

Charter hire rates for dry bulk vessels are cyclical and volatile and the dry bulk market remains significantly below its historic high. This may adversely affect our earnings, revenue and profitability and our ability to comply with our loan covenants or covenants in other financing agreements.

The volatility in the dry bulk charter market, from which we derive substantially all of our revenues, has affected the dry bulk shipping industry and has harmed our business. The Baltic Dry Index, or the BDI, a daily average of charter rates for key dry bulk routes published by the Baltic Exchange Limited, has long been viewed as the main benchmark to monitor the movements of the dry bulk vessel charter market and the performance of the entire dry bulk shipping market and has been very volatile in recent years. The BDI declined from an all-time high of 11,793 in May 2008 to an all-time low of 290 in February 2016, which represents a decline of approximately 98%. In the following years volatility was also apparent, albeit less extreme.  In 2023, the BDI ranged from a low of 530 on February 16, 2023 to a high of 3,346 on December 4, 2023. Although the BDI was 1,821 as of March 28, 2024, due to its volatile nature, there can be no assurance of the future performance of the BDI.

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The decline from historic highs and volatility in charter rates following 2008 is due to various factors, including the over-supply of dry bulk vessels, the lack of trade financing for purchases of commodities carried by sea, which resulted in a significant decline in cargo shipments, and trade disruptions caused by natural or other disasters, such as those that resulted from the dam collapse in Brazil in 2019 and the outbreak of the coronavirus infection in China. More recently, following Russia’s invasion of Ukraine in February 2022, the U.S., the EU, the UK and other countries have imposed sanctions against Russia and certain disputed regions of Ukraine, including, among others, prohibitions and restrictions on selling or importing goods, services or technology in or from affected regions, travel bans and asset freezes impacting connected individuals and political, military, business and financial organizations in Russia, severing large Russian banks from U.S. and/or other financial systems, and barring some Russian enterprises from raising money in the U.S. market. The U.S., EU and other countries could impose wider sanctions and take other actions. The war in Ukraine has resulted in higher freight market volatility and while the initial effect on the dry bulk freight market was positive, the long-term effects so far remain unclear. More recently, the war between Israel and Hamas has resulted in increased tensions in the Middle East region, including missile attacks by the Houthis on vessels in the Red Sea and thus creating uncertainty and risks to shipping operations in the region. Such circumstances have had and could in the future result in adverse consequences from time to time for dry bulk shipping, including, among other developments such as:

•
decrease in available financing for vessels;
 
•
no active secondhand market for the sale of vessels;
 
•
decrease in demand for dry bulk vessels and limited employment opportunities;
 
•
charterers seeking to renegotiate the rates for existing time charters;
 
•
widespread loan covenant defaults in the dry bulk shipping industry due to the substantial decrease in vessel values; and
 
•
declaration of bankruptcy by some operators, charterers and vessel owners.
 
The degree of charter hire rate volatility among different types of dry bulk vessels has varied widely. If we enter into a charter when charter hire rates are low, our revenues and earnings will be adversely affected and we may not be able to successfully charter our vessels at rates sufficient to allow us to operate our business profitably or meet our obligations. Further, if low charter rates in the dry bulk market decline further for any significant period, this could have an adverse effect on our vessel values and ability to comply with the financial covenants in our loan agreements or other financing agreements. In such a situation, unless our lenders are willing to provide waivers of covenant compliance or modifications to our covenants, our lenders could accelerate our debt and we could face the loss of our vessels. We expect continued volatility in market rates for our vessels in the foreseeable future with a consequent effect on our short and medium-term liquidity. We cannot assure you that future charter rates will enable us to cover our costs, operate our vessels profitably, or pay dividends.

The factors that influence demand for dry bulk shipping capacity include:


 •
supply of and demand for energy resources, commodities, and semi-finished consumer and industrial products and the location of consumption versus the location of their regional and global exploration production or manufacturing facilities;


•
the globalization of production and manufacturing;


•
global and regional economic and political conditions and developments;


•
armed conflicts and terrorist activities, including the ongoing war between Russia and Ukraine and the war outbreak between Israel and Hamas;


•
natural disasters and weather;


•
public health threats, pandemics, such as the COVID-19 pandemic, epidemics, and other disease outbreaks and governmental responses thereto;


•
embargoes and strikes;


•
disruptions and developments in international trade, including trade disputes or the imposition of tariffs on various commodities or finished goods;


•
changes in seaborne and other transportation patterns, including the distance cargo is transported by sea;


•
environmental and other legal or regulatory developments; and

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 •
political developments, including changes to trade policies or trade wars, including the provision or removal of economic stimulus measures meant to counteract the effects of sudden market disruptions due to financial, economic, or health crises.

Outbreaks of epidemic and pandemic diseases, including COVID-19, and any relevant governmental responses thereto could adversely affect our business, results of operations or financial condition.

Global public health threats, such as the COVID-19 outbreak, influenza and other highly communicable diseases or viruses, outbreaks, which have from time to time occurred in various parts of the world in which we operate, including China, could adversely impact our operations, as well as the operations of our customers. The COVID-19 pandemic has, among other things, caused factory closures and restrictions on travel, as well as labor shortages or lack of berths, delays and uncertainties relating to newbuildings, drydockings and vessel inspections, shortages or a lack of access to required spare parts and other functions of shipyards.

For example, the outbreak of COVID-19 caused severe global disruptions with governments in affected countries imposing travel bans, quarantines and other emergency public health measures. Companies had also taken precautions, such as requiring employees to work remotely, imposing travel restrictions and temporarily closing businesses. Although the incidence and severity of COVID-19 and its variants have diminished, similar restrictions and future prevention and mitigation measures against outbreaks of epidemic and pandemic diseases are likely to have an adverse impact on global economic conditions, which could materially and adversely affect our future operations. As a result of such measures, our vessels may not be able to call on, or disembark from ports, located in regions affected by the outbreak. In addition we may experience severe operational disruptions and delays, unavailability of normal port infrastructure and services including limited access to equipment, critical goods and personnel, disruptions to crew changes, quarantine of ships and/or crew, counterparty solidity, closure of ports and custom offices, as well as disruptions in the supply chain and industrial production, which may lead to reduced cargo demand, among other potential consequences attendant to epidemic and pandemic diseases.

The extent to which our business, operating results, cash flows, financial condition, financings, value of our vessels, and ability to pay dividends may be negatively affected by a resurgence of COVID-19 or future pandemics, epidemics, or other outbreaks of infectious diseases is highly uncertain and will depend on numerous evolving factors that we cannot predict, including, but not limited to, (i) the duration and severity of the infectious disease outbreak; (ii) the imposition of restrictive measures to combat the outbreak and slow disease transmission; (iii) the introduction of financial support measures to reduce the impact of the outbreak on the economy; (iv) shortages or reductions in the supply of essential goods, services, or labor; and (v) fluctuations in general economic or financial conditions tied to the outbreak, such as a sharp increase in interest rates or reduction in the availability of credit. We cannot predict the effect that an outbreak of a new COVID-19 variant or strain, or any future infectious disease outbreak, pandemic, or epidemic may have on our business, operating results, cash flows, and financial condition, which could be material and adverse.

We are currently dependent on index-linked charters, while in the past a part of our fleet was employed on a spot voyage basis. Any decrease in spot freight charter rates or indices in the future may adversely affect our earnings.

We currently have all of our vessels employed on time charters whose daily rates are linked to the Baltic Capesize Index, or BCI. Although none of our vessels are currently operating in the spot market on a voyage basis, we may employ any additional vessels we may acquire on a spot voyage basis, or on index-linked or fixed rate time charters.

Although the number of vessels in our fleet that are employed on spot voyages or have index-linked or fixed rate charters will vary from time to time, dictated by a multitude of factors and the chartering opportunities before us, we anticipate that a significant portion of our fleet will be affected by the spot freight market or the BCI. As a result, our financial performance will be significantly affected by conditions in the dry bulk spot freight market or the BCI and only our vessels that would operate under fixed-rate time charters would, during the period in which such vessels operate under such time charters, provide a fixed source of revenue to us. If future spot charter rates or indices decline, we may be unable to operate our vessels profitably, and our business, operating results, cash flows and financial condition will be significantly affected.

Historically, spot charter rates and dry bulk charter indices have been volatile as a result of the many conditions and factors that can affect the price of, supply of and demand for dry bulk capacity. The successful operation of our vessels in the competitive spot charter market depends upon, among other things, fixing profitable spot voyages and minimizing, to the extent possible, time spent waiting for charters and time spent traveling unladen to pick up cargo. The spot market is very volatile, and, in the past, there have been periods when spot rates declined below the operating cost of vessels. If future spot charter rates or the BCI decline, then we may be unable to profitably operate our vessels trading in the spot market or on BCI-linked charters profitably or meet our other obligations, including payments on indebtedness. Furthermore, as charter rates for spot charters are usually fixed for a single voyage, which may last up to several weeks, during periods in which spot charter rates are rising, we will generally experience delays in realizing the benefits from such increases. Spot charter rates are also not uniform globally and may vary substantially between different geographical regions; therefore, realizing opportunities in the spot market will also depend on the geographical location of our vessels at any given time.

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Additionally, when our vessels are chartered under a fixed rate time charter, if spot freight rates or short-term time charter rates fall significantly below the time charter equivalent rates that some of our charterers are obligated to pay us under the agreed time charter, the charterers may have an incentive to default on, or attempt to renegotiate the charter. If our charterers fail to pay their obligations, we would have to attempt to re-charter our vessels at lower charter rates, which would affect our ability to comply with our loan covenants and operate our vessels profitably. If we are not able to comply with our loan covenants and our lenders choose to accelerate our indebtedness and foreclose their liens, we could be required to sell vessels in our fleet and our ability to continue to conduct our business would be impaired.

An over-supply of dry bulk vessel capacity may depress the current charter rates and vessel values and, in turn, adversely affect our profitability.

The market supply of vessels generally increases with deliveries of new vessels and decreases with the recycling of older vessels, conversion of vessels to other uses, such as floating production and storage facilities, and loss of tonnage as a result of casualties. In previous years, the market supply of dry bulk vessels had increased due to the high level of new deliveries. Dry bulk newbuildings were delivered in significant numbers starting at the beginning of 2006 and continued to be delivered in significant numbers through 2017. In addition, the dry bulk newbuilding orderbook, extending up to 2028, was approximately 8.66% of the existing world dry bulk fleet as of the beginning of December 31, 2023, according to Clarksons Research, and the orderbook may increase further in proportion to the existing fleet. Even though the overall level of the orderbook has declined over the past years, an over-supply of dry bulk vessel capacity could depress the current charter rates. Factors that influence the supply of vessel capacity include:

•
the number of newbuilding orders and deliveries, including delays in new vessels’ deliveries;
 
•
the number of shipyards and their ability to deliver vessels;
 
•
potential disruption, including supply chain disruptions, of shipping routes due to accidents or political events;
 
•
scrapping and recycling rate of older vessels;
 
•
vessel casualties;
 
•
the price of steel and vessel equipment;
 
•
product imbalances (affecting the level of trading activity) and developments in international trade;
 
•
the number of vessels that are out of service, namely those that are laid-up, drydocked, awaiting repairs or otherwise not available for hire;
 
•
vessels’ average speed;
 
•
technological advances in vessel design and capacity;
 
•
availability of financing for new vessels and shipping activity;
 
•
the imposition of sanctions;
 
•
changes in national or international regulations that may effectively cause reductions in the carrying capacity of vessels or early obsolescence of tonnage;
 
•
changes in environmental and other regulations that may limit the useful life of vessels;
 
•
port or canal congestion; and
 
•
changes in market conditions, including political and economic events, wars (including the ongoing conflict between Russia and Ukraine and war outbreak between Israel and Hamas), acts of terrorism, natural disasters (including diseases, epidemics and pandemics) and changes in interest rates or inflation rates.
 
In addition to the prevailing and anticipated charter rates, factors that affect the rates of newbuilding, scrapping and laying-up include newbuilding prices, secondhand vessel values in relation to scrap prices, costs of bunkers and other operating costs, costs associated with classification society surveys, normal maintenance costs, insurance coverage costs, the efficiency and age profile of the existing dry bulk fleet in the market, as well as government and industry regulation of maritime transportation practices, particularly environmental protection laws and regulations. These factors influencing the supply of and demand for shipping capacity are outside of our control, and we may not be able to correctly assess the nature, timing and degree of changes in industry conditions.

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If dry bulk vessel capacity increases but the demand for vessel capacity does not increase or increases at a slower rate, charter rates could materially decline, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

If economic conditions throughout the world decline, it will negatively impact our results of operations, financial condition and cash flows, and could cause the market price of our common shares to decline.

Various macroeconomic factors, including rising inflation, higher interest rates, global supply chain constraints, and the effects of overall economic conditions and uncertainties, such as those resulting from the current and future conditions in the global financial markets, could adversely affect our business, results of operations, financial condition, and ability to pay dividends. Inflation and rising interest rates may negatively impact us by increasing our operating costs and our cost of borrowing. Interest rates, the liquidity of the credit markets, and the volatility of the capital markets could also affect the operation of our business and our ability to raise capital on favorable terms, or at all. Adverse economic conditions also affect demand for goods and oil. Reduced demand for these or other products could result in significant decreases in rates we obtain for chartering our vessels. In addition, the cost for crew members, oils and bunkers, and other supplies may increase. Furthermore, we may experience losses on our holdings of cash and investments due to failures of financial institutions and other parties. Difficult economic conditions may also result in a higher rate of losses on our accounts receivable due to credit defaults. As a result, downturns in the worldwide economy could have a material adverse effect on our business, results of operations, financial condition, and ability to pay dividends.

The world economy continues to face a number of actual and potential challenges, including the war between Ukraine and Russia and between Israel and Hamas, tensions in the Red Sea or Russia and NATO tensions, China and Taiwan disputes, the United States and China trade relations, instability between Iran and the West, hostilities between the United States and North Korea, political unrest and conflict in the Middle East, the South China Sea region, and other geographic countries and areas, terrorist or other attacks (including threats thereof) around the world, war (or threatened war) or international hostilities, and epidemics or pandemics, such as COVID-19 and its variants, and banking crises or failures, such as the recent Silicon Valley Bank, Signature Bank, and First Republic Bank failures. See also “— Outbreaks of epidemic and pandemic diseases, including COVID-19, and any relevant governmental responses thereto could adversely affect our business, results of operations, or financial condition.”. In addition, the continuing war in Ukraine, the length and breadth of which remains highly unpredictable, has led to increased economic uncertainty amidst fears of a more generalized military conflict or significant inflationary pressures, due to the increases in fuel and grain prices following the sanctions imposed on Russia. Furthermore, it is difficult to predict the intensity and duration of the war between Israel and Hamas or the Houthi rebel attacks on vessels transiting the Red Sea and their impact on shipping and the world economy is uncertain. If such conditions are sustained, the longer-term net impact on the dry bulk market and our business would be difficult to predict with any degree of accuracy. Such events may have unpredictable consequences and contribute to instability in the global economy or cause a decrease in worldwide demand for certain goods and, thus, shipping. We cannot predict how long current market conditions will last.

In Europe, concerns regarding the possibility of sovereign debt defaults by European Union member countries, including Greece, although generally alleviated, have in the past disrupted financial markets throughout the world, and may lead to weaker consumer demand in the European Union, the U.S. and other parts of the world. The withdrawal of the U.K. from the European Union, or Brexit, further increases the risk of additional trade protectionism. Brexit, or similar events in other jurisdictions, could impact global markets, including foreign exchange and securities markets; any resulting changes in currency exchange rates, tariffs, treaties and other regulatory matters could in turn adversely impact our business, operating results, cash flows and financial condition.

In addition, the recent economic slowdown in the Asia Pacific region, particularly in China, may exacerbate the effect of the weak economic trends in the rest of the world. Before the global economic financial crisis that began in 2008, China had one of the world’s fastest growing economies in terms of gross domestic product, or GDP, which had a significant impact on shipping demand. China’s GDP growth rate for the year ended December 31, 2022, was approximately 3.0%, one of its lowest rates in 50 years, thought to be mainly caused by the country’s zero-COVID policy and strict lockdowns. For the year ended December 31, 2023, China’s GDP growth rate recovered to 5.2%, but the economy continues to be weighed down by the ongoing crisis in the property market. It is possible that China and other countries in the Asia Pacific region will continue to experience volatile, slowed or even negative economic growth in the near future. Changes in the economic conditions of China, and changes in laws or policies adopted by its government or the implementation of these laws and policies by local authorities, including with regards to tax matters and environmental concerns (such as achieving carbon neutrality), could affect our vessels that are either chartered to Chinese customers or that call to Chinese ports, our vessels that undergo drydocking at Chinese shipyards and Chinese financial institutions that are generally active in ship financing, and could have a material adverse effect on our business, operating results, cash flows and financial condition.

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Furthermore, governments may turn to trade barriers to protect their domestic industries against foreign imports, thereby depressing shipping demand. There is significant uncertainty about the future relationship between the United States, China, and other exporting countries, including with respect to trade policies, treaties, government regulations, and tariffs. Protectionist developments, or the perception that they may occur, may have a material adverse effect on global economic conditions, and may significantly reduce global trade. Moreover, increasing trade protectionism may cause an increase in (i) the cost of goods exported from regions globally, particularly from the Asia-Pacific region, (ii) the length of time required to transport goods and (iii) the risks associated with exporting goods. Such increases may further reduce the quantity of goods to be shipped, shipping time schedules, voyage costs and other associated costs, which could have an adverse impact on our charterers’ business, operating results and financial condition and could thereby affect their ability to make timely charter hire payments to us and to employ our vessels. This could have a material adverse effect on our business, operating results, cash flows and financial condition.

Credit markets in the United States and Europe have in the past experienced significant contraction, deleveraging and reduced liquidity, and there is a risk that the U.S. federal government and state governments and European authorities may continue to implement a broad variety of governmental action and/or introduce new financial market regulations. Global financial markets and economic conditions have been, and continue to be, volatile and we face risks associated with the trends in the global economy, such as changes in interest rates, instability in the banking and securities markets around the world, the risk of sovereign defaults, and reduced levels of growth, among other factors. Major market disruptions and the current adverse changes in market conditions and regulatory climate worldwide may adversely affect our business, results or operations or impair our ability to borrow under our current financial arrangements or future financial arrangements we may enter into contemplating borrowing from the public and/or private equity and debt markets. Many lenders have increased interest rates, enacted tighter lending standards, refused to refinance existing debt at all or on terms similar to current debt and reduced (or in some cases ceased to provide) funding to borrowers and other market participants, including equity and debt investors and, in some cases, have been unwilling to provide financing on attractive terms or even at all. Due to these factors, we cannot be certain that financing will be available if needed and to the extent required, on acceptable terms or at all. In the absence of available financing or financing in favorable terms, we may be unable to complete vessel acquisitions, take advantage of business opportunities or respond to competitive pressures.

Political instability, terrorist attacks or other attacks, war, and international hostilities could affect our business, results of operations, cash flows and financial condition.

We conduct most of our operations outside of the United States and our business, results of operations, cash flows, financial condition, and available cash may be adversely affected by changing economic, political, and governmental conditions in the countries and regions in which our vessels or the vessels we may acquire are employed or registered. Moreover, we operate in a sector of the economy that is likely to be adversely impacted by the effects of political conflicts, including the war between Ukraine and Russia and between Israel and Hamas, Russia and NATO tensions, China and Taiwan disputes, United States and China trade relations, instability between Iran and the West, hostilities between the United States and North Korea, political unrest and conflicts in the Middle East, the South China Sea region, the Red Sea region (including missile attacks controlled by the Houthis on vessels transiting the Red Sea), and other countries and geographic areas, geopolitical events, such as Brexit, terrorist or other attacks (or threats thereof) around the world, and war (or threatened war) or international hostilities.

Continuing war and recent developments in Ukraine, the Middle East, tensions between the U.S. and Iran, the war between Israel and Hamas, and the conflict in the Red Sea, as well as other geographic countries and areas, terrorist or other attacks, and war (or threatened war) or international hostilities, such as the ones currently in progress between Russia and Ukraine, Israel and Hamas, China and Taiwan, and the U.S. and North Korea, have recently and may in the future lead to armed conflict or acts of terrorism around the world, which may contribute to further economic instability in the global financial markets and international commerce. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all.

The war between Russia and Ukraine may lead to further regional and international conflicts or armed action. This war has disrupted supply chains and caused instability in the energy markets and the global economy, with effects on shipping freight rates, which have experienced volatility. The United States and the United Kingdom, among other countries, as well as the European Union, have announced unprecedented economic sanctions and other penalties against certain persons, entities and activities connected to Russia, including removing Russian-based financial institutions from the Society for Worldwide Interbank Financial Telecommunication payment system and restricting imports of Russian oil, liquefied natural gas and coal. These sanctions have caused supply disruptions in the oil and gas markets and could continue to cause significant volatility in energy prices, which could result in increased inflation and may trigger a recession in the U.S. and China, among other regions. While much uncertainty remains regarding the global impact of the war in Ukraine, it is possible that such tensions could adversely affect our business, financial condition, results of operation, and cash flows. Since we employ Ukrainian and Russian seafarers, we may face problems in relation to their employment, repatriation, salary payments and be subject to claims to this respect. Moreover, we will be subject to additional insurance premiums in case we transit through or call to any port or area designated as listed areas by the Joint War Committee or other organizations. These factors may also result in the weakening of the financial condition of our charterers, suppliers, counterparties and other agents in the shipping industry. As a result, our business, operating results, cash flows and financial condition may be negatively affected since our operations are dependent on the success and economic viability of our counterparties.

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The ongoing war between Russia and Ukraine could result in the imposition of further economic sanctions by the United States, the United Kingdom, the European Union or other countries against Russia, trade tariffs or embargoes with uncertain impacts on the markets in which we operate. In addition, the U.S. and certain other North Atlantic Treaty Organization (NATO) countries have been supplying Ukraine with military aid. U.S. officials have also warned of the increased possibility of Russian cyberattacks, which could disrupt the operations of businesses involved in the drybulk industry, including ours and could create economic uncertainty particularly if such attacks spread to a broad array of countries and networks. Although Ukraine and Russia reached an agreement to extend an arrangement allowing shipment of grain from Ukrainian ports through a humanitarian corridor in the Black Sea in November 2022, Russia terminated this agreement in July 2023. While much uncertainty remains regarding the global impact of the war in Ukraine, it is possible that such tensions could adversely affect our business, financial condition, results of operation and cash flows.

Furthermore, the intensity and duration of the recently declared war between Israel and Hamas is difficult to predict and its impact on the world economy and our industry is uncertain. Although our business is not directly impacted by the war between Israel and Hamas, the related missile attacks by the Houthi regime in the Red Sea area has led to the diversion of a large part of the world fleet away from the Red Sea, increasing the ton-mile demand for most shipping sectors, including dry bulk, and resulting in higher freight rates. Rerouting away from the most convenient route for connecting East trade to the West and vice versa may, however, lead to increased operational costs and higher revenues. In case our vessels trade or transit via the Red Sea, we may incur increased insurance costs. While much uncertainty remains regarding the global impact of the war between Israel and Hamas, it is possible that such tensions could result in the eruption of further hostilities in other regions, including the Red Sea, and could adversely affect our business, financial condition, results of operation, and cash flows.

In the past, political conflicts have also resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian Gulf region. The ongoing war in Ukraine has resulted in missile attacks on commercial vessels in the Black Sea and the recent outbreak of conflict in the Red Sea has also resulted in missile attacks on vessels. Acts of terrorism and piracy have also affected vessels trading in regions such as the Gulf of Guinea, the Red Sea, the Gulf of Aden off the coast of Somalia, and the Indian Ocean. Any of these occurrences could have a material adverse impact on our future performance, operating results, cash flows, financial position and our ability to pay cash distributions to our shareholders.

Risks associated with operating ocean-going vessels could affect our business and reputation, which could adversely affect our revenues and expenses.

The operation of an ocean-going vessel carries inherent risks.  These risks include the possibility of:

•             crew strikes and/or boycotts;

•             acts of God;

•             damage to or destruction of vessels due to marine disaster;

•             terrorism, piracy or other detentions;

•             environmental accidents;

•             cargo and property losses or damage; and

•            business interruptions caused by mechanical failure, grounding, fire, explosions and collisions, human error, war, political action in various countries, labor strikes, epidemics or pandemics or adverse weather conditions and other circumstances or events.

Any of these circumstances or events could increase our costs or lower our revenues. Such circumstances could result in death or injury to persons, loss of property or environmental damage, delays in the delivery of cargo, loss of revenues from or termination of charter contracts, governmental fines, penalties or restrictions on conducting business, litigation with our employees, customers or third parties, higher insurance rates, and damage to our reputation and customer relationships generally, market disruptions, delays and rerouting and could also subject us to litigation. Epidemics and other public health incidents may also lead to crew member illness, which can disrupt the operations of our vessels, or result in the imposition of public health measures, which may prevent our vessels from calling on ports or discharging cargo in the affected areas or in other locations after having visited the affected areas. Although we maintain hull and machinery and war risks insurance, as well as protection and indemnity insurance, which may cover certain risks of loss resulting from such occurrences, our insurance coverage may be subject to deductibles and caps, or may not cover such losses, and any of these circumstances or events could increase our costs or lower our revenues. Furthermore, the involvement of our vessels and other vessels we may acquire in an environmental disaster may harm our reputation as a safe and reliable vessel owner and operator. Any of these circumstances or events could have a material adverse effect on our business, results of operations and financial condition, as well as our cash flows.

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If our vessels suffer damage, they may need to be repaired at a drydocking facility. The time and costs of repairs are unpredictable and may be substantial. We may have to pay repair costs that our insurance does not cover in full. The loss of earnings while our vessels are being repaired and repositioned, as well as the actual cost of these repairs and repositioning, would decrease our earnings. In addition, space at drydocking facilities is sometimes limited and not all drydocking facilities are conveniently located. We may be unable to find space at a suitable drydocking facility and be forced to travel to a drydocking facility that is not conveniently located to our vessels’ positions. The loss of earnings while these vessels are forced to wait for space or to travel to more distant drydocking facilities, or both, would decrease our earnings.

Rising fuel prices may adversely affect our profits.

The cost of fuel is a significant factor in negotiating voyage freight rates, although we generally do not directly bear the cost of fuel for vessels operating on time charters. As a result, an increase in the price of fuel may adversely affect our profitability if freight rates fail to rise to the extent required to cover a rise in the cost of fuel. The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oil and gas, actions by members of the Organization of the Petroleum Exporting Countries and other oil and gas producers, the imposition of new regulations adopted by the International Maritime Organization, or IMO, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns and regulations. While fuel prices remained generally lower in 2023 as compared to 2022 fuel has and may become much more expensive in the future, including as a result of the ongoing war in Ukraine and the sanctions against Russia, the imposition of sulfur oxide emissions limits in January 2020 and reductions of carbon emissions from January 2023 under new regulations adopted by the IMO, which may reduce the profitability and competitiveness of our business versus other forms of transportation, such as truck or rail.

Upon redelivery of any vessels at the end of a period time charter or a voyage charter, we may be obligated to repurchase bunkers on board at prevailing market prices, or purchase bunkers to refuel the vessel in case of a voyage charter, which could be materially higher than fuel prices at the inception of the charter period. However, given the current time charter agreements of our vessels and our chartering strategy, this cost is projected to be immaterial in the short to medium term. If in the future we decide to operate vessels on a voyage basis, then fuel would be the largest expense that we would incur with respect to vessels operating on voyage charter. Voyage charter contracts generally provide that the vessel owner bears the cost of fuel in the form of bunkers, which is a material operating expense. We currently cannot guarantee that we will hedge our fuel costs on any prospective future voyage charters, and, therefore, an increase in the price of fuel may negatively affect our profitability and our cash flows.

Worldwide inflationary pressures could negatively impact our results of operations and cash flows.

Inflation could have an adverse impact on our business and operating results and subsequently on our financial condition both directly through the increase of operating costs, including crew costs and materials necessary for the operation of our vessels and indirectly through its adverse impact on the world economy in terms of increasing interest rates and slowdown of global growth. Worldwide economies have in the recent past experienced inflationary pressures, with price increases seen across many sectors globally. In response to such inflationary pressures, central banks made steep increases in interest rates, which results in increases to the interest rates available to us for the financing of our operations and investment activity. If central banks continue to increase interest rates, or interest rates otherwise increase significantly, the resulting increase to the interest rates available to us on both existing loans on floating rate and new debt financings or refinancings we may pursue could adversely affect our cash flows and our ability to complete vessel acquisitions, take advantage of business opportunities, or respond to competitive pressures. Furthermore, during 2023, we experienced increased operating costs for crew, spares and lubricants that negatively affected our operating results. Consequently, if inflationary pressures intensify further, we may be unable to raise our charter rates enough to offset the increasing costs of our operations, which would decrease our profit margins and result in deterioration of our financial condition.

Whether the present inflationary pressures will transition to a long-term inflationary environment and the effect of such a development on charter rates, vessel demand, and operating expenses in the sector in which we operate are uncertain. Additionally, the monetary tightening implemented by a series of central banks around the world in order to curb inflationary pressures has also significantly increased the probability of an economic recession in the short- to medium-term future.

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Our revenues are subject to seasonal fluctuations, which could affect our operating results and ability to service our debt or pay dividends.

We operate in markets that have historically exhibited seasonal variations in demand and, as a result, in charter hire rates. This seasonality may result in quarter-to-quarter volatility in our operating results. The dry bulk shipping market is typically stronger in the fall and winter months in anticipation of increased consumption of coal and other raw materials in the northern hemisphere during the winter months. In addition, unpredictable weather patterns in these months tend to disrupt vessel schedules and supplies of certain commodities. As a result, our revenues may be weaker during the fiscal quarters ending March 31 and June 30, and, conversely, our revenues may be stronger during the fiscal quarters ending September 30 and December 31. This seasonality should not affect our operating results if our vessels are employed on fixed rate period time charters, but because our vessels are employed (the vessels we may acquire may be employed) in the spot market or on index-linked or fixed rate charters, seasonality may increase the volatility of and materially affect our operating results and cash flows, as well as our ability to pay dividends, if any, in the future.

Climate change and greenhouse gas restrictions may be imposed.

Due to concern over the risk of climate change, a number of countries and the IMO, have adopted, or are considering the adoption of, regulatory frameworks to reduce greenhouse gas emissions. These regulatory measures may include, among others, the adoption of cap and trade regimes, carbon taxes, increased efficiency standards and incentives or mandates for renewable energy. For instance, the IMO imposed a global 0.5% sulfur cap on marine fuels, down from the previous cap of 3.5%, which came into force on January 1, 2020. In addition, in July 2023, the IMO adopted the 2023 IMO Strategy on Reduction of GHG Emissions from Ships with enhanced targets to tackle harmful emissions and, which identifies “levels of ambition” towards reducing greenhouse gas emissions, including (1) decreasing the carbon intensity from ships through the implementation of further phases of EEDI for new ships; (2) reducing carbon dioxide emissions per transport work, as an average across international shipping, by at least 40% by 2030 compared to 2008 emission levels; and (3) pursuing net-zero greenhouse gas emissions by or around 2050 while pursuing efforts towards phasing them out entirely. These regulations and any additional regulations addressing similar goals could cause us to incur additional substantial expenses. See “Item 4. Information on the Company—B. Business Overview—Environmental and Other Regulations” for a discussion of these and other environmental regulations applicable to our operations.

In addition, although the emissions of greenhouse gases from international shipping currently are not subject to the Kyoto Protocol to the United Nations Framework Convention on Climate Change (this task was delegated under the Kyoto Protocol to the IMO for action), which required adopting countries to implement national programs to reduce emissions of certain gases, a new treaty may be adopted in the future that includes restrictions on shipping emissions. Compliance with changes in laws, regulations and obligations relating to climate change could increase our costs related to operating and maintaining our vessels and require us to install new emission controls, acquire allowances or pay taxes related to our greenhouse gas emissions, or administer and manage a greenhouse gas emissions program. Revenue generation and strategic growth opportunities may also be adversely affected.

Furthermore, on January 1, 2024, the EU Emissions Trading Scheme, or the ETS, for ships sailing into and out of EU ports came into effect, and the FuelEU Maritime Regulation is expected to come into effect on January 1, 2025.  The ETS is to apply gradually over the period from 2024 to 2026. 40% of allowances would have to be surrendered in 2025 for the year 2024; 70% of allowances would have to be surrendered in 2026 for the year 2025; and 100% of allowances would have to be surrendered in 2027 for the year 2026. Compliance is to be on a companywide (rather than per ship) basis and “shipping company” is defined widely to capture both the ship owner and any contractually appointed commercial operator/ship manager/bareboat charterer who assumes all duties and responsibilities for the ship under the ISM Code, as well as the responsibility for full compliance under the ETS. If the latter contractual arrangement is entered into this needs to be reflected in a certified mandate signed by both parties and presented to the administrator of the scheme. The cap under the ETS would be set by taking into account EU MRV system emissions data for the years 2018 and 2019, adjusted, from year 2021 and is to capture 100% of the emissions from intra-EU maritime voyages; 100% of emissions from ships at berth in EU ports and 50% of emissions from voyages which start or end at EU ports (but the other destination is outside the EU). Furthermore, the newly passed EU Emissions Trading Directive 2023/959/EC makes clear that all maritime allowances would be auctioned and there will be no free allocation. 78.4 million emissions allowances are to be allocated specifically to maritime. If we do not have allowances, we will be forced to purchase allowances from the market, which can be costly, especially if other shipping companies are similarly looking to do the same. New systems, including personnel, data management systems, costs recovery mechanisms, revised service agreement terms and emissions reporting procedures will have to be put in place, at significant cost, to prepare for and manage the administrative aspect of ETS compliance.  The cost of compliance and of our future EU emissions and costs to purchase an allowance for emissions (if we must purchase in order to comply) are unknown and difficult to predict, and are based on a number of factors, including the size of our fleet, our trips within and to and from the EU, and the prevailing cost of allowances.

Adverse consequences of climate change, including growing public concern about the environmental impact of climate change, may also adversely affect demand for our services. For example, increased regulation of greenhouse gases or other concerns relating to climate change may reduce the demand for coal in the future, one of the primary cargoes carried by our vessels. In addition, the physical effects of climate change, including changes in weather patterns, extreme weather events, rising sea levels, and scarcity of water resources, may negatively impact our operations. Any long-term economic consequences of climate change could have a significant financial and operational adverse impact on our business that we cannot predict with certainty at this time.

Pending and future tax law changes may result in significant additional taxes to us.

Pending and future tax law changes may result in significant additional taxes to us. For example, the Organization for Economic Cooperation and Development published a “Programme of Work,” which was divided into two pillars. Pillar One focused on the allocation of group profits among taxing jurisdictions based on a market-based concept rather than the historical “permanent establishment” concept. Pillar Two, among other things, introduced a global minimum tax. The foregoing proposals (in the event international consensus is achieved and implementing laws are adopted) and other possible future tax changes may have an adverse impact on us. Any requirement or legislation that requires us to pay more tax could have a material adverse effect on our business, results of operations, cash flows and financial condition, and our ability to pay dividends.

Our operations may be adversely impacted by severe weather, including as a result of climate change.

Tropical storms, hurricanes, typhoons, and other severe marine weather events could result in the suspension of operations at the planned ports of call for our vessels and require significant deviations from planned routes. In addition, climate change could result in an increase in the frequency and severity of these extreme weather events. The closure of ports, rerouting of vessels, damage of production facilities, as well as other delays caused by increasing frequency of severe weather, could stop operations or shipments for indeterminate periods and have a material adverse effect on our business, results or operations, and financial condition.

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Increased regulation as well as scrutiny of environmental, social and governance matters may impact our business and reputation.

In addition to the importance of their financial performance, companies are increasingly being judged by their performance on a variety of environmental, social and governance matters, or ESG, which are considered to contribute to the long-term sustainability of companies’ performance.

A variety of organizations measure the performance of companies on such ESG topics, and the results of these assessments are widely publicized. In addition, investment in funds that specialize in companies that perform well in such assessments are increasingly popular, and major institutional investors have publicly emphasized the importance of such ESG measures to their investment decisions. Topics taken into account in such assessments include, among others, the company’s efforts and impact on climate change and human rights, ethics and compliance with laws, and the role of the company’s board of directors in supervising various sustainability issues.

We actively manage a broad range of such ESG matters, taking into consideration their expected impact on the sustainability of our business over time, and the potential impact of our business on society and the environment. As far as the environmental aspect is concerned, since 2018 we have commenced implementing technical and operational measures aiming to improve the energy efficiency of our vessels and in extension reduce the CO2 emissions of the fleet.  During 2023 the attained EEXI for all our vessels have been calculated in accordance with regulation 23 of MARPOL Annex VI and the 2021 Guidelines on the method of calculation of the attained Energy Efficiency Existing Ship Index (EEXI) (resolution MEPC.333(76)) (EEXI Calculation Guidelines). All EEXI technical files containing the necessary information have been prepared in cooperation with the vessels’ recognized organizations, for which the on-board survey application is in progress. In addition, we have completed various biofuel trials in cooperation with leading charterers and operators. Moreover, we have installed scrubber and ballast water treatment systems, Energy Saving Devices, including artificial intelligence assisted remote performance monitoring systems, applied Existing Vessel Design Index, or EVDI, upgrades, very low friction silicon hull paints and hydrodynamic performance improving technologies, which constitute examples of the environmental practices we have adopted and aim to continue adopting on most of our vessels. We participate in various environmental initiatives in our industry and technical committees promoting various ESG matters. We have also secured and entered into two sustainability-linked financings for five of our vessels. However, in light of investors’ increased focus on ESG matters, there can be no certainty that we will manage such issues successfully, or that we will successfully meet the industry’s or society’s expectations as to our proper role. Any failure or perceived failure by us in this regard could have a material adverse effect on our reputation and on our business, share price, financial condition, or results of operations, including the sustainability of our business over time.

On March 6, 2024, the SEC adopted final rules to enhance and standardize climate-related disclosures by public companies and in public offerings. The final rules will become effective 60 days following publication of the adopting release in the Federal Register. As an accelerated filer, we will be required to provide the enhanced climate-related disclosures in our annual reports for the year ending December 31, 2026. On March 15, 2024, the Fifth Circuit Court of Appeals stayed application of these rules pending further judicial review, but on March 25, 2024 the Fifth Circuit Court of Appeals ordered the transfer of the petition to the Eighth Circuit Court of Appeals and the dissolution of the administrative stay. The impact of the ongoing litigation with respect to the content of these rules or the timing of their effectiveness is uncertain. Costs of compliance with these new rules may be significant and may have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Moreover, from time to time, we may incur additional costs, establish and publicly announce goals and commitments in respect of certain ESG items. While we may create and publish voluntary disclosures regarding ESG matters from time to time, many of the statements in those voluntary disclosures are based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith. Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many ESG matters. If we fail to achieve or improperly report on our progress toward achieving our environmental goals and commitments, the resulting scrutiny from market participants or regulators could adversely affect our reputation and/or our access to capital.

Our vessels may call on ports located in or may operate in countries that are subject to restrictions or sanctions imposed by the United States, the European Union or other governments that could result in fines or other penalties imposed on us and may adversely affect our reputation and the market price of our common shares.

During the year ended December 31, 2023, none of our vessels called on ports located in countries subject at that time to comprehensive sanctions and embargoes imposed by the U.S. government or countries identified by the U.S. government or other authorities as state sponsors of terrorism; however, our vessels may call on ports in these countries from time to time in the future on our charterers’ instructions subject to any applicable insurance arrangements and prior approvals, if required. The U.S. sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and such sanctions and embargo laws and regulations may be amended or strengthened over time.

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We believe that we are currently in compliance with all applicable sanctions and embargo laws and regulations.  In order to maintain compliance, we monitor and review the movement of our vessels on a daily basis.

We endeavor to provide that all or most of our future charters include provisions and trade exclusion clauses prohibiting the vessels from calling on ports where there is an existing U.S. embargo. Furthermore, as of the date hereof, neither the Company nor its subsidiaries have entered into or have any plans to enter into, directly or indirectly, any contracts, agreements or other arrangements with the governments of Iran, Syria, North Korea, Cuba or any entities controlled by the governments of these countries.

Due to the nature of our business and the evolving nature of the foregoing sanctions and embargo laws and regulations, there can be no assurance that we will be in compliance at all times in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations.  Any such violation could result in fines, penalties or other sanctions that could severely impact our ability to access U.S. capital markets and conduct our business, and could result in some investors deciding, or being required, to divest their interest, or refrain from investing, in us.  In addition, certain institutional investors may have investment policies or restrictions that prevent them from holding securities of companies that have contracts with countries identified by the U.S. government as state sponsors of terrorism.  The determination by these investors not to invest in, or to divest from, our common shares may adversely affect the price at which our common shares trade.  Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve us or our vessels, and those violations could in turn negatively affect our reputation.  In addition, our reputation and the market for our securities may be adversely affected if we engage in certain other activities, such as entering into charters with individuals or entities in countries subject to U.S. sanctions and embargo laws that are not controlled by the governments of those countries, or engaging in operations associated with those countries pursuant to contracts with third parties that are unrelated to those countries or entities controlled by their governments.

Sulfur regulations to reduce air pollution from ships have required retrofitting of vessels and may cause us to incur significant costs.

 Since January 1, 2020, IMO regulations have required vessels to comply with a global cap on the sulfur in fuel oil used on board of 0.5%, down from the previous cap of 3.5%. Compliance with this regulation is achieved by using 0.5% sulfur fuels on board; installing “scrubbers” for cleaning of the exhaust gas; or retrofitting vessels to be powered by liquefied natural gas. Nine of our vessels currently have scrubbers installed, while the remaining eight vessels in our fleet comply by burning low sulfur fuel (0.5% or 0.1%). Costs of compliance with these regulatory changes for our non-scrubber vessels or any non-scrubber vessels we may acquire may be significant and may have a material adverse effect on our future performance, results of operations, cash flows, and financial position. We have further developed ship specific implementation plans for safeguarding the smooth transition with the usage of compliant fuels for such vessels that will not be equipped with scrubbers. However, due to the fact that Mediterranean Sea will become a 0.1% sulfur emission control area by May 1, 2025, we may consider installing scrubbers in the rest or some of our vessels, if such investment is deemed beneficial. Costs of ongoing compliance may have a material adverse effect on our future performance, results of operations, cash flows and financial position. See Item 4. “Information on the Company—B. Business Overview—Environmental and Other Regulations—International Maritime Organization.”

We are subject to regulation and liability under environmental laws that could require significant expenditures and affect our cash flows and net income.

Our business and the operation of our vessels are materially affected by government regulation in the form of international conventions, national, state and local laws and regulations in force in the jurisdictions in which the vessels operate, as well as in the country or countries of their registration, including those governing oil spills, discharges to air and water, ballast water management, and the handling and disposal of hazardous substances and wastes.  These requirements include, but are not limited to, EU regulations; the U.S. Oil Pollution Act of 1990, or OPA; the U.S. Comprehensive Environmental Response; Compensation and Liability Act of 1980, or CERCLA; the U.S. Clean Air Act, including its amendments of 1977 and 1990, or the CAA; the U.S. Clean Water Act, or the CWA; the U.S. Maritime Transportation Security Act of 2002, or the MTSA; and regulations of the IMO. These include, but are not limited to, the International Convention on Civil Liability for Oil Pollution Damage of 1969, as from time to time amended and generally referred to as CLC; the IMO International Convention for the Prevention of Pollution from Ships of 1973, as from time to time amended and generally referred to as MARPOL, including the designation of emission control areas, or ECAs, thereunder; the IMO International Convention for the Safety of Life at Sea of 1974, as from time to time amended and generally referred to as SOLAS, the IMO International Convention on Load Lines of 1966, as from time to time amended and generally referred to as the LL Convention; the International Convention on Civil Liability for Bunker Oil Pollution Damage, generally referred to as the Bunker Convention; the IMO’s International Management Code for the Safe Operation of Ships and for Pollution Prevention, generally referred to as the ISM Code, the International Convention for the Control and Management of Ships’ Ballast Water and Sediments, generally referred to as the BWM Convention; and the International Ship and Port Facility Security Code, or ISPS.

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We may also incur additional costs in order to comply with other existing and future regulatory obligations, including, but not limited to, costs relating to the 0.5% sulfur cap on marine fuels, air emissions including greenhouse gases, the management of ballast water, maintenance and inspection, development and implementation of emergency procedures and insurance coverage or other financial assurance of our ability to address pollution incidents. These costs could have a material adverse effect on our business, results of operations, cash flows and financial condition and our available cash.  Because such conventions, laws and regulations are often revised, we cannot predict the ultimate cost of complying with such conventions, laws and regulations or the impact thereof on the resale price or useful life of vessels we may acquire in the future.  Additional conventions, laws and regulations may be adopted which could limit our ability to do business or increase the cost of our doing business and which may materially adversely affect our operations.

Regulations relating to ballast water discharge may adversely affect our revenues and profitability.

The IMO has imposed updated guidelines for ballast water management systems specifying the maximum amount of viable organisms allowed to be discharged from a vessel’s ballast water.  Depending on the date of the IOPP renewal survey, existing vessels constructed before September 8, 2017 must comply with the updated D-2 standard.  For all vessels, compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted organisms.  Ships constructed on or after September 8, 2017 are to comply with the D-2 standards. Vessels are required to meet the discharge standard D-2 by installing an approved Ballast Water Management System (or BWMS). Pursuant to the BWM Convention amendments, BWMSs installed on or after October 28, 2020 shall be approved in accordance with BWMS Code, while BWMSs installed before October 28, 2020 must be approved taking into account guidelines developed by the IMO or the BWMS Code. Ships sailing in U.S. waters are required to employ a type-approved BWMS which is compliant with United States Coast Guard, or USCG, regulations. Amendments to the BWM Convention entered into force in June 2022 concerning commissioning testing of BWMS and the form of the International Ballast Water Management Certificate. We have installed ballast water treatment systems in all our vessels which comply with the updated guidelines.  Nevertheless, we might incur compliance costs for any vessels we might acquire in the future, which might have a substantial effect on our profitability. Additionally, many countries already regulate the discharge of ballast water carried by vessels from country to country to prevent the introduction of invasive and harmful species via such discharges. The U.S., for example, requires vessels entering its waters from another country to conduct mid-ocean ballast exchange, or undertake some alternate measure, and to comply with certain reporting requirements. Amendments to the BWM Convention concerning commissioning testing of BWMS and the form of the International Ballast Water Management Certificate became effective in June 2022.

Furthermore, United States regulations are currently changing.  Although the 2013 Vessel General Permit, or VGP, program and U.S. National Invasive Species Act, or NISA, are currently in effect to regulate ballast discharge, exchange and installation, the Vessel Incidental Discharge Act, or VIDA, which was signed into law on December 4, 2018, requires that the U.S. Coast Guard develop implementation, compliance, and enforcement regulations regarding ballast water. It intends to replace the VGP scheme and streamline the patchwork of federal, state, and local requirements for the commercial vessel community.  The US Environmental Protection Agency, or EPA, has indicated that new federal discharge standards for vessels may be published in autumn 2024. The VIDA gave the EPA two years to develop new national discharge standards for vessels and the U.S. Coast Guard another two years to develop regulations and best management practices to implement and enforce those standards.  VIDA also specifies that the provisions of the VGP will continue to apply until EPA and the U.S. Coast Guard publish their final regulations, regardless of how long that takes, and that the permit cannot be modified during that time. On October 26, 2020, the EPA published a Notice of Proposed Rulemaking for Vessel Incidental Discharge National Standards of Performance under VIDA, and in November 2020, held virtual public meetings. On October 18, 2023, the EPA published a Supplemental Notice to the Vessel Incidental Discharge National Standards of Performance, which shares new ballast water information that the EPA received from the USCG. Under VIDA, all provisions of the VGP 2018 and the USCG ballast water regulations remain in force and effect as currently written until the EPA publishes standard. If the USCG spends the full two years to finalize the corresponding enforcement standards, the current 2013 VGP scheme will remain in force until 2026. This rule changes may have financial impact on our vessels and may result in vessels being banned from calling in the U.S. in case compliance issues arise.

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Increased inspection procedures, tighter import and export controls and new security regulations could increase costs and disrupt our business.

International shipping is subject to security and customs inspection and related procedures in countries of origin, destination and trans-shipment points. Since the events of September 11, 2001, there have been a variety of initiatives intended to enhance vessel security, such as the MTSA, which are the U.S. Coast Guard’s issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States and at certain ports and facilities. In addition, pursuant to the SOLAS Convention, dry bulk vessels and the ports in which we plan to operate are subject to the ISPS Code. These security procedures can result in seizure of vessel cargo, delays in the loading, discharging or trans-shipment and the levying of customs duties, fines or other penalties against exporters or importers and, in some cases, vessels. Future changes to the existing security procedures may be implemented that could affect the dry bulk sector. These changes have the potential to impose additional financial and legal obligations on vessels and, in certain cases, to render the shipment of certain types of goods uneconomical or impractical. These additional costs could reduce the volume of goods shipped, resulting in a decreased demand for vessels and have a negative impact on our business, revenues and customer relations.

Acts of piracy on ocean-going vessels could adversely affect our business.

Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the Red Sea, the Gulf of Aden off the coast of Somalia, and Indian Ocean and the Gulf of Guinea region off the coast of Nigeria, which has experienced increased incidents of piracy in recent years. Sea piracy incidents continue to occur, particularly in the South China Sea, the Indian Ocean, in the Gulf of Guinea and the Strait of Malacca, with dry bulk vessels particularly vulnerable to such attacks.  Acts of piracy could result in harm or danger to the crews that man our vessels.  Additionally, if piracy attacks result in regions in which our vessels are deployed being characterized as “war risk” zones by insurers or if our vessels are deployed in Joint War Committee “war and strikes” listed areas, premiums payable for insurance coverage could increase significantly and such insurance coverage may be more difficult to obtain, if available at all. In addition, crew and security equipment costs, including costs that may be incurred to employ onboard security armed guards, could increase in such circumstances. Furthermore, while we believe the charterer remains liable for charter payments when a vessel is seized by pirates, the charterer may dispute this and withhold charter hire until the vessel is released. A charterer may also claim that a vessel seized by pirates was not “on-hire” for a certain number of days and is therefore entitled to cancel the charterparty, a claim that we would dispute. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In addition, any detention hijacking as a result of an act of piracy against our vessels, or an increase in cost, or unavailability, of insurance for our vessels could have a material adverse impact on our business, financial condition and results of operations.

The operation of dry bulk vessels has particular operational risks.

The operation of dry bulk vessels has certain unique risks. With a dry bulk vessel, the cargo itself and its interaction with the vessel can be an operational risk. By their nature, dry bulk cargoes are often heavy, dense, easily shifted, and react badly to water exposure. In addition, dry bulk vessels are often subjected to battering treatment during discharging operations with grabs, jackhammers (to pry encrusted cargoes out of the hold) and small bulldozers. This treatment may cause damage to the vessel. Vessels damaged due to treatment during discharging procedures may affect a vessel’s seaworthiness while at sea. Hull fractures in dry bulk vessels may lead to the flooding of the vessels’ holds. If a dry bulk vessel suffers flooding in its forward holds, the bulk cargo may become so dense and waterlogged that its pressure may buckle the vessel’s bulkheads, leading to the loss of a vessel. If we are unable to adequately maintain our vessels, we may be unable to prevent these events. Any of these circumstances or events could negatively impact our business, financial condition, and results of operations. In addition, the loss of a vessel could harm our reputation as a safe and reliable vessel owner and operator.

If any of our vessels fails to maintain its class certification or fails any annual survey, intermediate survey, or special survey, or if any scheduled class survey takes longer or is more expensive than anticipated, this could have a material adverse impact on our financial condition and results of operations.

The hull and machinery of every commercial vessel must be certified by a classification society authorized by its country of registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and SOLAS.

A vessel must undergo annual, intermediate and special surveys. The vessel’s machinery may be on a continuous survey cycle, under which the machinery would be surveyed periodically over a five-year period. At the beginning, during and at the end of this cycle, every vessel is required to undergo inspection of her underwater parts that usually includes dry-docking. These surveys and dry-dockings can be costly and can result in delays in returning a vessel to operation.

If any vessel does not maintain its class, the vessel will not be allowed to carry cargo between ports and cannot be employed or insured. Any such inability to carry cargo or be employed, or any related violation of the covenants under our loans or other financing agreements, could have a material adverse impact on our financial condition and results of operations.

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As we employ seafarers covered by industry-wide collective bargaining agreements, a failure of industry groups to renew such agreements may disrupt our operations and adversely affect our earnings.

We employ a large number of seafarers. All the seafarers employed on the vessels in our fleet are covered by industry-wide collective bargaining agreements that set minimum standards in wages and labor conditions. We cannot assure you that these agreements will be renewed as necessary or will prevent labor interruptions. Any labor interruptions could disrupt our operations and harm our financial performance.

Maritime claimants could arrest or attach one or more of our vessels, which could interrupt our cash flows.

Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against a vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lien holder may enforce its lien by arresting a vessel through foreclosure proceedings. The arrest or attachment of one or more of our vessels could interrupt our cash flow and require us to pay large sums of funds to have the arrest lifted, which would have a material adverse effect on our financial condition and results of operations.

In addition, in some jurisdictions, such as South Africa, under the “sister ship” theory of liability, a claimant may arrest both the vessel that is subject to the claimant’s maritime lien and any “associated” vessel, which is any vessel owned or controlled by the same owner. Claimants could try to assert “sister ship” liability against one of our vessels for claims relating to another of our vessels.

Governments could requisition our vessels during a period of war or emergency, which could negatively impact our business, financial condition, results of operations, and available cash.

A government could requisition for title or hire one or more of our vessels. Requisition for title occurs when a government takes control of a vessel and becomes the owner. Also, a government could requisition a vessel for hire. Requisition for hire occurs when a government takes control of a vessel and effectively becomes the charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency. Although we would be entitled to compensation in the event of a requisition, the amount and timing of payment of such compensation is uncertain. Government requisition of one or more of our vessels could have a material adverse effect on our financial condition and results of operations.

Risks Relating to Our Company

The market values of our vessels may decrease, which could limit the amount of funds that we can borrow or trigger breaches of certain financial covenants under our current or future loan agreements and other financing agreements, and we may incur an impairment or, if we sell vessels following a decline in their market value, a loss.

The fair market values of our vessels are related to prevailing freight charter rates. While the fair market value of vessels and the freight charter market have a very close relationship as the charter market moves from trough to peak, the time lag between the effect of charter rates on market values of ships can vary. A decrease in the market value of our vessels could require us to raise additional capital in order to remain compliant with our loan covenants or the covenants in the other financing agreements and could result in the loss of our vessels (including, through foreclosure by our lenders and lessors) and adversely affect our earnings and financial condition.

The market value of dry bulk vessels, and Capesize dry bulk carriers in particular, has historically exhibited great volatility. From 2010 until today, the standard 182,000 dwt Capesize yard resale prices have fluctuated from $35.0 million in March 2016 to $74.0 million in March 2010. The fair market value of our vessels is dependent on other factors as well, including:

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general economic and market conditions affecting the shipping industry, including changes in global dry cargo commodity supply;

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prevailing levels of charter rates;

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competition from other shipping companies;

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sophistication and condition of the vessels;

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advances in efficiency, such as introduction of autonomous vessels;

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•
where the vessel was built and as-built specifications and subsequent modifications and improvements;

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lifetime maintenance record;

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supply and demand for vessels;
 
•
types, sizes, and age of vessels;
 
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number of newbuilding deliveries;
 
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the cost to order and construct a new vessel;
 
•
number of vessels scrapped or otherwise removed from the world fleet;
 
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the scrap value of vessels;
 
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changes in environmental and other regulations that may limit the useful life of vessels;
 
•
decreased costs and increases in use of other modes of transportation;
 
•
cost of secondhand vessel acquisitions;
 
•
whether the vessel is equipped with scrubbers;
 
•
global economic or pandemic-related crises;
 
•
governmental and other regulations, including environmental regulations;
 
•
ability of buyers to access financing and capital;
 
•
technological advances; and
 
•
the cost of retrofitting or modifying existing ships to respond to technological advances in vessel design or equipment, changes in applicable environmental or other regulations or standards, or otherwise.
 
In addition, as vessels age, they generally decline in value. If the fair market value of our vessels declines, we may not be in compliance with certain covenants in our loan agreements and other financing agreements we may enter into, and our lenders or lessors could accelerate our indebtedness or require us to pay down our indebtedness to a level where we are again in compliance with the covenants in our loan agreements and other financing agreements or foreclose their liens. If any of our current or future loan agreements and other financing agreements are accelerated, we may not be able to refinance our debt or obtain additional funding. We expect that we will enter into more loan agreements and other financing agreements in connection with our vessels, the vessels we have agreed to acquire or future vessel acquisitions.  For more information regarding our current loan facilities and other financing agreements, please see “Item 5. Operating and Financial Review and Prospects – B. Liquidity and Capital Resources – Loan Arrangements.”

In addition, if vessel values decline, we may have to record an impairment adjustment in our financial statements, which could adversely affect our financial results. Furthermore, if we sell one or more of our vessels at a time when vessel prices have fallen, the sale price may be less than the vessel’s carrying value on our consolidated financial statements, resulting in a loss on sale or an impairment loss being recognized, leading to a reduction in earnings.

Newbuilding projects are subject to risks that could cause delays.

We may enter into newbuilding contracts in connection with our vessel acquisition strategy. Newbuilding construction projects are subject to risks of delay inherent in any large construction project from numerous factors, including shortages of equipment, materials or skilled labor, unscheduled delays in the delivery of ordered materials and equipment or shipyard construction, failure of equipment to meet quality and/or performance standards, financial or operating difficulties experienced by equipment vendors or the shipyard, unanticipated actual or purported change orders, inability to obtain required permits or approvals, design or engineering changes, work stoppages and other labor disputes, adverse weather conditions, or any other events of force majeure. A shipyard’s failure to deliver a vessel on time may result in the delay of revenue from the vessel. Any such failure or delay could have a material adverse effect on our operating results.

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We may be unable to obtain financing for the vessels we have agreed to acquire or any vessels we may acquire in the future.

We can offer no assurance that we will be able to obtain the necessary financing either for the secondhand vessels we have agreed to acquire with expected deliveries within 2024 or for the acquisition of any vessels we may acquire in the future, on attractive terms or at all. If financing is not available when needed, or is available only on unfavorable terms, we may be unable to meet our purchase price payment obligations and complete the acquisition of such vessels and expand the size of our fleet. If we fail to fulfill our commitments thereunder, due to an inability to obtain financing or otherwise, we may also be liable for damages for breach of contract. Our failure to obtain the funds for these capital expenditures could have a material adverse effect on our business, results of operations, financial conditions, and cash flows.

If the vessels we have agreed to acquire or may agree to acquire in the future are not delivered on time or are delivered with significant defects, our earnings and financial condition could suffer.

Currently, we have agreed to acquire two Capesize vessels with expected deliveries within 2024 and may acquire additional vessels in the future. A delay in the delivery of any vessels to us, the failure of the contract counterparty to deliver a vessel at all, or us not taking delivery of a vessel could cause us to breach our obligations under the acquisition contract or under a related time charter and become liable for damages for breach of contract or could otherwise adversely affect our financial condition and results of operations. In cases where the fault lies with the contract counterparty, we would be entitled to compensation, but the amount and timing of payment of such compensation is uncertain. In addition, the delivery of any vessel with substantial defects could have similar consequences and, although we intend to inspect the condition of the vessels pre-acquisition, there is no assurance that we will be able to identify such defects. We have not received in the past, and do not expect to receive in the future, the benefit of warranties on any secondhand vessels we acquire. Any of these circumstances or events could have a material adverse effect on our business, operating results, cash flows and financial condition.

Substantial debt levels could limit our flexibility to obtain additional financing and pursue other business opportunities.

As of December 31, 2023, we had $236.4 million in debt outstanding across our loan facilities, sale and leaseback transactions and financial leases. Moreover, we anticipate that we will incur future indebtedness in connection with the acquisition of additional vessels, although there can be no assurance that we will be successful in identifying further vessels or securing such debt financing. Significant levels of debt could have important consequences to us, including the following:

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our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired, or such financing may be unavailable on favorable terms, or at all;
 
•
we may need to use a substantial portion of our cash from operations to make principal and interest payments on our bank debt and financing liabilities, reducing the funds that would otherwise be available for operations, future business opportunities and any future dividends to our shareholders;
 
•
our debt level could make us more vulnerable to competitive pressures or a downturn in our business or the economy generally than our competitors with less debt; and
 
•
our debt level may limit our flexibility in responding to changing business and economic conditions.
 
Our ability to service our indebtedness will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, some of which are beyond our control, as well as the interest rates applicable to our outstanding indebtedness. If the value of our vessels does not sufficiently serve as a security for our lenders, or if our operating income is not sufficient to service our indebtedness, we will be forced to take actions, such as reducing or delaying our business activities, acquisitions, investments or capital expenditures, selling assets, restructuring or refinancing our debt or seeking additional equity capital. We may not be able to effect any of these remedies on satisfactory terms, or at all. In addition, a lack of liquidity in the debt and equity markets could hinder our ability to refinance our debt or obtain additional financing on favorable terms in the future. For more information regarding our current loan agreements and other financing arrangements, please see “Item 5. Operating and Financial Review and Prospects – B. Liquidity and Capital Resources – Loan Arrangements.”

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Our loan agreements and other financing arrangements contain, and we expect that other future loan agreements and financing arrangements will contain, restrictive covenants that may limit our liquidity and corporate activities, which could limit our operational flexibility and have an adverse effect on our financial condition and results of operations. In addition, because of the presence of cross-default provisions in our loan agreements and financing arrangements, a default by us under one loan agreement or financing arrangement could lead to defaults under multiple loans and financing agreements.

Our loan agreements and other financial arrangements contain, and we expect that other future loan agreements and financing arrangements will contain, customary covenants and event of default clauses, financial covenants, restrictive covenants and performance requirements, which may affect operational and financial flexibility. Such restrictions could affect, and in many respects limit or prohibit, among other things, our ability to pay dividends, incur additional indebtedness, create liens, sell assets, or engage in mergers or acquisitions. These restrictions could limit our ability to plan for or react to market conditions or meet extraordinary capital needs or otherwise restrict corporate activities. There can be no assurance that such restrictions will not adversely affect our ability to finance our future operations or capital needs.

As a result of these restrictions, we may need to seek permission from our lenders and other financing counterparties in order to engage in some corporate actions. Our lenders’ and other financing counterparties’ interests may be different from ours and we may not be able to obtain their permission when needed. This may prevent us from taking actions that we believe are in our best interests, which may adversely impact our revenues, results of operations and financial condition.

A failure by us to meet our payment and other obligations, including our financial covenants and any security coverage requirements, could lead to defaults under our financing arrangements. Likewise, a decrease in vessel values or adverse market conditions could cause us to breach our financial covenants or security requirements (the market values of dry bulk vessels have generally experienced high volatility). In the event of a default that we cannot remedy, our lenders and other financing counterparties could then accelerate their indebtedness and foreclose on the respective vessels in our fleet. The loss of any of our vessels could have a material adverse effect on our business, results of operations and financial condition.

Because of the presence of cross-default provisions in our loan agreements and financing agreements, a default by us under a loan or financing agreement and the refusal of any lender or financing counterparty to grant or extend a waiver could result in the acceleration of our indebtedness under our other loans and financing agreements. A cross-default provision means that if we default on one loan, we would then default on our other loans containing a cross-default provision.

In the recent past, we have obtained waivers, deferrals and amendments of certain financial covenants, payment obligations and events of default under our loan facilities with our lenders. However, there can be no assurance that we will obtain similar waivers and deferrals from our lenders in the future, if needed, as we have obtained in the past.

For more information regarding our current loan facilities and other financing arrangements, please see “Item 5. Operating and Financial Review and Prospects – B. Liquidity and Capital Resources – Loan Arrangements.”

We depend on officers and directors who are associated with United Maritime Corporation, of the Republic of the Marshall Islands (“United”), which may create conflicts of interest.

Our officers and directors have fiduciary duties to manage our business in a manner beneficial to us and our shareholders. However, Stamatios Tsantanis, who serves as our Chairman and Chief Executive Officer, is also the Chairman and Chief Executive Officer of United. In addition, Stavros Gyftakis, who serves as our Chief Financial Officer, is the Chief Financial Officer and a director of United. Christina Anagnostara and Ioannis Kartsonas, who serve as independent directors for us, also serve as independent directors of United. These officers and directors have fiduciary duties and responsibilities to manage the business of United in a manner beneficial to it and its shareholders and may have conflicts of interest in matters involving or affecting us and our customers or shareholders, or when faced with decisions that could have different implications for United than they do for us. The resolution of these potential conflicts may not always be in our best interest or that of our shareholders and could have a material adverse effect on our business, results of operations, cash flows, and financial condition.

If we fail to manage our planned growth properly, we may not be able to successfully expand our market share.

Our fleet currently consists of 16 Capesize vessels and one Newcastlemax dry bulk vessel and we have agreed to acquire another two secondhand Capesize vessels with expected deliveries within 2024. Moreover, we may acquire additional vessels in the future. Our ability to manage our growth will primarily depend on our ability to:

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generate excess cash flow so that we can invest without jeopardizing our ability to cover current and foreseeable working capital needs, including debt service;
 
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finance our operations;
 
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locate and acquire suitable vessels;
 
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identify and consummate acquisitions or joint ventures;
 
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integrate any acquired businesses or vessels successfully with our existing operations;
 
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hire, train and retain qualified personnel and crew to manage and operate our growing business and fleet; and
 
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expand our customer base.
 
Growing any business by acquisitions presents numerous risks such as obtaining acquisition financing on acceptable terms or at all, undisclosed liabilities and obligations, difficulty in obtaining additional qualified personnel, managing relationships with customers and suppliers and integrating newly acquired operations into existing infrastructures. We may not be successful in executing our growth plans and we may incur significant additional expenses and losses in connection therewith.

Vessel aging and purchasing and operating secondhand vessels, such as our current fleet, may result in increased operating costs and vessel off-hire, which could adversely affect our financial condition and results of operations.

All of the vessels in our fleet are secondhand vessels. Our inspection of these or other secondhand vessels prior to purchase does not provide us with the same knowledge about their condition and the cost of any required or anticipated repairs that we would have had if these vessels had been built for and operated exclusively by us. We have not received in the past, and do not expect to receive in the future, the benefit of warranties on any secondhand vessels we acquire.

As the vessels in our fleet or other secondhand vessels we may acquire age, they may become less fuel efficient and costlier to maintain and will not be as advanced as recently constructed vessels due to improvements in design, technology and engineering, including improvements required to comply with government regulations. Rates for cargo insurance, paid by charterers, also increase with the age of a vessel, making older vessels less desirable to charterers, which could result in the lower utilization and, therefore, lower revenues.

In addition, charterers actively discriminate against hiring older vessels. Rightship, the ship vetting service founded by Rio Tinto and BHP-Billiton, has become a major vetting service in the dry bulk shipping industry, which ranks the suitability of vessels based on a scale of one to five stars. There are carriers that may not charter a vessel that Rightship has vetted with fewer than three stars. Therefore, a potentially deteriorated star rating for our vessels may affect their commercial operation and profitability and vessels in our fleet with lower ratings may experience challenges in securing charters. Effective as of January 1, 2018, Rightship’s age trigger for a dry cargo inspection for vessels over 8,000 dwt changed from 18 years to 14 years, after which an annual acceptable Rightship inspection will be required. Rightship may downgrade any vessel over 18 years of age that has not completed a satisfactory inspection by Rightship, in the same manner as any other vessel over 14 years of age, to two stars, which significantly decreases its chances of entering into a charter. Fifteen and two vessels in our operating fleet have three and four-star risk ratings from Rightship, respectively.

Governmental regulations and safety or other equipment standards related to the age or condition of vessels may require expenditures for alterations, or the addition of new equipment, to our vessels and may restrict the type of activities in which the vessels may engage. As our vessels age, market conditions may not justify those expenditures or enable us to operate our vessels profitably during the remainder of their useful lives.

In addition, unless we maintain cash reserves for vessel replacement, we may be unable to replace the vessels in our fleet upon the expiration of their useful lives. We estimate the useful life of our vessels to be 25 years from the date of initial delivery from the shipyard. Our cash flows and income are dependent on the revenues we earn by chartering our vessels to customers. If we are unable to replace the vessels in our fleet upon the expiration of their useful lives, our business, financial condition and results of operations will be materially adversely affected. Any reserves set aside for vessel replacement would not be available for other cash needs or dividends.

Volatility of SOFR and potential changes of the use of SOFR as a benchmark could affect our profitability, earnings, and cash flow.

The calculation of interest in most financing agreements in our industry had been historically based on the London Interbank Offered Rate (“LIBOR”). LIBOR had been the subject of national, international, and other regulatory guidance and proposals for reform. In response thereto, the Alternative Reference Rate Committee, a committee convened by the Federal Reserve Board that includes major market participants, had proposed the CME Group’s forward looking Secured Overnight Financing Rate (“SOFR”) term rates (“SOFR Term Rates”), based on the SOFR rate published by the New York Federal Reserve, as an alternative rate to replace U.S. dollar LIBOR. In December 2022, the Federal Reserve adopted a final rule that implements the Adjustable Interest Rate (LIBOR) Act identifying SOFR-based rates as replacement rates to LIBOR in certain financial contracts that do not have clear or practicable provisions for replacing LIBOR after June 30, 2023, when ICE Benchmark Administration, the administrator of LIBOR, ceased the publication of U.S. dollar LIBOR. While certain existing loan agreements previously used LIBOR, we have amended our loan agreements to transition from LIBOR to SOFR. SOFR is a broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury securities in the repurchase agreement (repo) market. SOFR has been adopted by most lenders in our industry as a replacement benchmark rate.

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An increase in SOFR, including as a result of the interest rate increases effected by the Federal Reserve and the Federal Reserve’s recent hike of U.S. interest rates in response to rising inflation, would affect the amount of interest payable under our existing loan agreements, which, in turn, could have an adverse effect on our profitability, earnings, cash flow, and ability to pay dividends. If SOFR performs differently than expected or if our lenders insist on a different reference rate to replace SOFR, that could increase our borrowing costs (and administrative costs to reflect the transaction), which would have an adverse effect on our profitability, earnings, and cash flows. Alternative reference rates may behave in a similar manner or have other disadvantages or advantages in relation to our future indebtedness and the transition to SOFR or other alternative reference rates in the future could have a material adverse effect on us.

In order to manage any future exposure to interest rate fluctuations, we may from time-to-time use interest rate derivatives to effectively fix any floating rate debt obligations, or we may maintain adequate cash balances in Euros. No assurance can, however, be given that the use of these derivative instruments, if any, may effectively protect us from adverse interest rate movements. The use of interest rate derivatives may affect our results through mark to market valuation of these derivatives. Also, adverse movements in interest rate derivatives may require us to post cash as collateral, which may impact our free cash position, and have the potential to cause us to breach covenants in our loan agreements that require maintenance of certain financial positions and ratios. Interest rate derivatives may also be impacted by the transition to SOFR or to other alternative rates.

The failure of our current or future counterparties to meet their obligations under our current or future contracts, including any charter agreements, could cause us to suffer losses or otherwise adversely affect our business.

We have entered, and plan to enter, into various contracts, including charterparties with our customers, vessel management agreements and other agreements, which subject us to counterparty risks. The ability and willingness of each of our current or future counterparties to perform its obligations under charter agreements with us will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the dry bulk shipping industry and the industries in which our counterparties operate, the overall financial condition of the counterparties, and the supply and demand for dry bulk commodities.
From time to time, those counterparties may account for a significant amount of our chartering activity and revenues. In addition, in challenging market conditions, there have been reports of charterers renegotiating their charters or defaulting on their obligations under charter agreements, and so our customers may fail to pay charter hire or attempt to renegotiate charter rates. Should a charterer fail to honor its obligations to us, it may be difficult to secure substitute employment for such vessel on favorable terms or at all, and any new charter arrangements we secure in the spot market or on time charters could be at lower rates. If our charterers fail to meet their obligations to us or attempt to renegotiate our charter agreements, we could suffer significant losses, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Rising crew costs may adversely affect our profits.

Crew costs are expected to be a significant expense for us. Recently, the limited supply of and increased demand for highly skilled and qualified crew, due to the increase in the size of the global shipping fleet, has created upward pressure on crewing costs. Increases in crew costs may adversely affect our profitability if we are not able to increase our rates.

We may not be able to attract and retain key management personnel and other employees in the shipping industry, which may negatively affect the effectiveness of our management and our results of operations.

Our success will depend to a significant extent upon the abilities and efforts of our management team, including our ability to retain key members of our management team and the ability of our management to recruit and hire suitable employees. The loss of any of these individuals could adversely affect our business prospects and financial condition. Difficulty in hiring and retaining personnel could adversely affect our business and results of operations.

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Our vessels may suffer damage, and we may face unexpected repair costs, which could adversely affect our cash flow and financial condition.

The operation of an ocean-going vessel carries inherent risks, which include the risk of the vessel or its cargo being damaged or lost because of events such as marine disasters, bad weather and other acts of God, business interruptions caused by mechanical failures, grounding, fire, explosions and collisions, human error, war, terrorism, piracy, labor strikes, boycotts and other similar circumstances or events.

If our vessels suffer damage, they may need to be repaired at a shipyard facility. The time and costs of repairs are unpredictable and may be substantial. The loss of earnings while our vessels are being repaired and repositioned, as well as the actual cost of these repairs and any repositioning costs, would decrease our earnings and reduce the amount of any dividends in the future. We may also be unable to find space at a suitable drydocking facility and be forced to travel to a drydocking facility that is not conveniently located to the position of our vessels. For more information see “—Risks associated with operating ocean-going vessels could affect our business and reputation, which could adversely affect our revenues and expenses.” We may not have insurance that is sufficient to cover all or any of these costs or losses and may have to pay repair costs not covered by our insurance.

We are exposed to U.S. dollar and foreign currency fluctuations and devaluations that could harm our reported revenue and results of operations.

We generate all of our revenues and incur the majority of our operating expenses in U.S. dollars, but we currently incur many of our general and administration expenses in currencies other than the U.S. dollar, primarily the euro. Because such portion of our expenses is incurred in currencies other than the U.S. dollar, our expenses may from time to time increase relative to our revenues as a result of fluctuations in exchange rates, particularly between the U.S. dollar and the euro, which could affect the amount of net income that we report in future periods. We may use financial derivatives to operationally hedge some of our currency exposure. Our use of financial derivatives involves certain risks, including the risk that losses on a hedged position could exceed the nominal amount invested in the instrument and the risk that the counterparty to the derivative transaction may be unable or unwilling to satisfy its contractual obligations, which could have an adverse effect on our results.

We maintain cash with a limited number of financial institutions including financial institutions that may be located in Greece, which will subject us to credit risk.

We maintain all of our cash with a limited number of financial institutions, including institutions that are located in Greece. These financial institutions located in Greece may be subsidiaries of international banks or Greek financial institutions. Although concerns relating to the sovereign debt crisis have largely been allayed and Greece has emerged from its bailout programs, the stand-alone financial strength of the banks and the anticipated additional pressures stemming from the legacy of the country’s multi-year debt crisis and the COVID-19 pandemic continue to create uncertain economic prospects.

Generally, only a portion of cash balances are covered by insurance in the event of default by a financial institution in Greece or elsewhere. Several banks, including banks in the United States and Switzerland, have recently been subject to extraordinary resolution procedures or sale because of the risk of such a default. In the event of such a default of a financial institution, we may lose part or all of our cash that we hold deposited with such financial institution.

We are a holding company and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy financial obligations or to pay dividends.

We are a holding company and our subsidiaries, which are all wholly owned by us either directly or indirectly, conduct all of our operations and own all of our operating assets. We have no significant assets other than the equity interests in our wholly owned subsidiaries. As a result, our ability to make dividend payments depends on our subsidiaries and their ability to distribute funds to us. The ability of a subsidiary to make these distributions could be affected by the covenants in our loan agreements, a claim or other action by a third party, including a creditor, and the laws of the British Virgin Islands, the Republic of Liberia, the Republic of the Marshall Islands and Malta, where our vessel-owning or other subsidiaries are incorporated, which regulate the payment of dividends by companies. If we are unable to obtain funds from our subsidiaries, we may not be able to satisfy our financial obligations.

In addition to its earnings, financial condition, cash requirements and availability, the ability of a subsidiary to make distributions to us could be affected by the covenants in our future loan agreements or other financing arrangements, a claim or other action by a third party, including a creditor, and the laws of its country of incorporation. If we are unable to obtain funds from our subsidiaries, we may not be able to satisfy our financial obligations and, consequently, our board of directors may exercise its discretion not to declare or pay any dividend.

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In the highly competitive international shipping industry, we may not be able to compete for charters with new entrants or established companies with greater resources, which may adversely affect our results of operations.

We operate in a highly competitive market that is capital intensive and highly fragmented. Competition arises primarily from other independent and state-owned dry bulk vessel owners, some of whom may have substantially greater resources than we do. Competition for the transportation of dry bulk cargoes by sea is intense and depends on price, location, size, age, condition and the acceptability of the vessel and its operators to the charterers. Due in part to the highly fragmented market, competitors with greater resources could enter the dry bulk shipping industry and operate larger fleets through consolidations or acquisitions and may be able to offer lower charter rates and higher quality vessels than we are able to offer. Although we believe that no single competitor has a dominant position in the markets in which we compete, we are aware that certain competitors may be able to devote greater financial and other resources to their activities than we can, resulting in a significant competitive threat to us. We cannot give assurances that we will continue to compete successfully with our competitors or that these factors will not erode our competitive position in the future.

Due to our lack of fleet diversification, adverse developments in the maritime dry bulk shipping industry would adversely affect our business, financial condition, and operating results.

Our business currently depends on the transportation of dry bulk commodities, and our fleet consists exclusively of Capesize vessels and one Newcastlemax dry bulk vessel. Our current lack of diversification could make us vulnerable to adverse developments in the maritime dry bulk shipping industry and demand for Capesize vessels in particular, which would have a significantly greater impact on our business, financial condition and operating results than it would if we maintained more diverse assets or lines of business.

We are currently subject to litigation and we may be subject to similar or other litigation in the future.

We have been and may from time to time in the future be involved in various litigation matters. On March 6, 2024, Sphinx Investment Corp., a purported shareholder of the Company, submitted a complaint in the High Court of the Republic of the Marshall Islands naming the Company and the members of its board of directors as defendants. The complaint alleges, among other things, violations of fiduciary duties in connection with the issuance of the Series B Preferred Shares in December 2021. We believe we have substantial defenses and intend to vigorously defend against the lawsuit. Other matters which may arise include, among other things, contract disputes, personal injury claims, environmental claims or proceedings, asbestos and other toxic tort claims, employment matters, governmental claims for taxes or duties, and other litigation that arises in the ordinary course of our business. We cannot predict with certainty the outcome or effect of any claim or other litigation matter. Furthermore, monitoring and defending against legal actions, whether or not meritorious, is time-consuming for our management and detracts from our ability to fully focus our internal resources on our business activities. Uncertainty regarding such pending legal actions, even if eventually resolved in our favor, could have an adverse effect on our ability to obtain financing, raise capital, or otherwise execute our business strategy. In addition, legal fees and costs incurred in connection with such activities may be significant, and we could in the future be subject to judgments or enter into settlements of claims for significant monetary damages. A decision adverse to our interests could result in the payment of substantial damages and could have a material adverse effect on our cash flow, results of operations, and financial position. Insurance may not be applicable or sufficient in all cases to reimburse us for the expenses or losses we may suffer in contesting and concluding such litigation, or insurers may not remain solvent. Substantial litigation costs, including a substantial self-insured retention that we may be required to satisfy before any insurance is applied to the claim, may adversely impact our business, operating results, or financial condition.

The shipping industry has inherent operational risks that may not be adequately covered by our insurances. Further, because we obtain some of our insurances through protection and indemnity associations, we have been and may in the future be retrospectively subject to calls or premiums in amounts based not only on our own claim records, but also on the claim records of all other members of the protection and indemnity associations.

We procure insurance for our fleet against risks commonly insured against by vessel owners and operators. Our current insurances include hull and machinery insurance, war risks insurance, demurrage and defense insurance and protection and indemnity insurance (which includes environmental damage and pollution insurance). We do not expect to maintain for our vessels insurance against loss of hire, which covers business interruptions that result from the loss of use of a vessel, except in cases when our vessels transit through or call at high risk areas. We may not be adequately insured against all risks or our insurers may not pay a particular claim. Even if our insurance coverage is adequate to cover our losses, we may not be able to timely obtain a replacement vessel in the event of a loss. Furthermore, in the future, we may not be able to obtain adequate insurance coverage at reasonable rates for our fleet. Our insurance policies also contain deductibles, limitations and exclusions which, although we believe are standard in the shipping industry, may nevertheless increase our costs. If our insurances are not enough to cover claims that may arise, the deficiency may have a material adverse effect on our financial condition and results of operations. We have been and may in the future be retrospectively subject to calls, or premiums, in amounts based not only on our own claim records but also the claim records of all other members of the protection and indemnity associations through which we receive indemnity insurance coverage for tort liability, including pollution-related liability. In the past, we paid approximately $0.3 million in response to these calls, and our payment of such calls could in the future result in significant expenses to us.

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Failure to comply with the U.S. Foreign Corrupt Practices Act of 1977, or FCPA, could result in fines, criminal penalties, and an adverse effect on our business.

We operate throughout the world, including countries with a reputation for corruption.  We are committed to doing business in accordance with applicable anti-corruption laws and have adopted a code of business conduct and ethics which is consistent and in full compliance with the FCPA.  We are subject, however, to the risk that we, our affiliated entities or our or their respective officers, directors, employees and agents may take action determined to be in violation of such anti-corruption laws, including the FCPA.  Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties, curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations or financial condition.  In addition, actual or alleged violations could damage our reputation and ability to do business.  Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management.

We partly depend on third-party technical and commercial managers for technical and commercial management of our ships. Our operations could be negatively affected if third-party managers fail to perform their services satisfactorily.

Seanergy Shipmanagement Corp., or Seanergy Shipmanagement, our wholly owned ship management subsidiary, provides technical management services to the majority of the vessels in our fleet, namely the M/Vs Dukeship, Fellowship, Friendship, Knightship, Lordship, Worldship, Hellasship, Partnership, Flagship, Patriotship, Honorship, Premiership, Geniuship, Squireship and Paroship and it is expected to undertake the technical management of the M/V Iconship upon her delivery to the Company. In addition, Seanergy Shipmanagement may undertake the technical management for the remaining vessels of our fleet in the future. Seanergy Management Corp., or Seanergy Management, our wholly owned management subsidiary, provides us with certain other management services.

Moreover, we also depend on third-party technical, crew and commercial managers. V.Ships Greece provide us with certain technical, general administrative and support services (including vessel maintenance, crewing, purchasing, shipyard supervision, assistance with regulatory compliance, accounting related to vessels and provisions) for the M/Vs Championship, Friendship and Titanship. V.Ships Greece provides crew management services to the M/Vs Fellowship, Lordship, Knightship, Premiership, Geniuship and Squireship. Global Seaways provides crew management services to the M/Vs Worldship, Dukeship, Hellasship, Partnership, Flagship, Patriotship, Honorship and Paroship. Fidelity provides us with commercial management services for our vessels.

Our operational success partly depends upon V.Ships Greece’s, Global Seaways’ and Fidelity’s satisfactory performance of these services. Our business would be harmed if V.Ships Greece, Global Seaways or Fidelity failed to perform these services satisfactorily. In addition, if our management agreements with any of these third parties were to be terminated or if their terms were to be altered, our business could be adversely affected, as we may not be able to immediately replace such services, and even if replacement services were immediately available, the terms offered could be less favorable than those under our existing management agreements.

In addition, our ability to compete for and enter into new period time and spot charters and to expand our relationships with our existing charterers depends significantly on our relationship with our third-party commercial manager, Fidelity. If Fidelity fails to perform its obligations, it may harm our ability to renew existing charters upon their expiration, obtain new charters, and maintain satisfactory relationships with our charterers and suppliers.

The failure of our third-party managers to perform their obligations satisfactorily could have a material adverse effect on our business, financial condition and results of operations. Because our third-party managers are each privately held companies, we and our shareholders might have little advance warning of financial or other problems affecting them even though their financial or other problems could have a material adverse effect on us. Although we may have rights against our third-party managers if they default on their obligations to us, our shareholders will share that recourse only indirectly to the extent that we recover funds.

Management fees will be payable to our managers regardless of our profitability, which could have a material adverse effect on our business, financial condition and results of operations.

Pursuant to our technical and crew management agreements we pay management fees to our managers as described in “Item 4. Information on the Company - B. Business Overview – Management of our fleet” in exchange for provision of technical, support and administrative services. The management fees do not cover expenses such as voyage expenses, vessel operating expenses, maintenance expenses and crewing costs, for which we reimburse the technical manager. The management fees are payable whether or not our vessels are employed and regardless of our profitability, and we have no ability to require our managers to reduce the management fees if our profitability decreases, which could have a material adverse effect on our business, financial condition and results of operations.

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We may be classified as a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S. holders of our common stock.

A foreign corporation will be treated as a “passive foreign investment company,” or PFIC, for U.S. federal income tax purposes if either (1) at least 75% of its gross income for any taxable year consists of certain types of “passive income” or (2) at least 50% of the average value of the corporation’s assets produce or are held for the production of those types of “passive income.” For purposes of these tests, “passive income” includes dividends, interest, gains from the sale or exchange of investment property, and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. For purposes of these tests, income derived from the performance of services does not constitute “passive income.” U.S. shareholders of a PFIC are subject to a disadvantageous U.S. federal income tax regime with respect to the income derived by the PFIC, the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.

Based upon our current and anticipated method of operations, we do not believe that we should be a PFIC with respect to our 2023 taxable year, and we do not expect to become a PFIC in 2024 or any future taxable year. In this regard, we intend to treat our gross income from time charters as active services income, rather than rental income. Accordingly, our income from our time chartering activities should not constitute “passive income,” and the assets that we own and operate in connection with the production of that income should not constitute passive assets. There is substantial legal authority supporting this position including case law and U.S. Internal Revenue Service, or IRS, pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, it should be noted that there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. Accordingly, no assurance can be given that the IRS or a court of law will accept this position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, no assurance can be given that we would not constitute a PFIC for any future taxable year if the nature and extent of our operations change.

If the IRS were to find that we are or have been a PFIC for any taxable year, our U.S. shareholders would face adverse U.S. federal income tax consequences and certain information reporting requirements. Under the PFIC rules, unless those shareholders make an election available under the United States Internal Revenue Code of 1986 as amended, or the Code (which election could itself have adverse consequences for such shareholders), such shareholders would be liable to pay U.S. federal income tax at the then prevailing income tax rates on ordinary income plus interest upon excess distributions and upon any gain from the disposition of their shares of our common stock, as if the excess distribution or gain had been recognized ratably over the shareholder’s holding period of the shares of our common stock. See “Item 10. Additional Information - E. Taxation – United States Federal Income Tax Consequences – United States Federal Income Taxation of U.S. Holders – Passive Foreign Investment Company Rules” for a more comprehensive discussion of the U.S. federal income tax consequences to U.S. shareholders if we are treated as a PFIC.

We may have to pay tax on U.S. source income, which would reduce our earnings.

Under the Code, 50% of the gross shipping income of a vessel-owning or chartering corporation, such as us and our subsidiaries, that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States, exclusive of certain U.S. territories and possessions, or “U.S. source gross shipping income” may be subject to a 4% U.S. federal income tax without allowance for deduction, unless that corporation qualifies for exemption from tax under Section 883 of the Code and the applicable Treasury Regulations promulgated thereunder.

We believe that we qualify for exemption from the 4% tax under Section 883 of the Code for our 2023 taxable year.  However, there are factual circumstances beyond our control that could cause us not to have the benefit of the tax exemption under Section 883 in 2024 or future years and thereby cause us to become subject to U.S. federal income tax on our U.S. source shipping income. For example, there is a risk that we could fail to qualify for exemption under Section 883 of the Code for a particular taxable year if “non-qualified” shareholders with a five percent or greater interest in our stock were, in combination with each other, to own 50% or more of the outstanding shares of our stock on more than half the days during the taxable year. See the description of the ownership tests which must be satisfied to qualify for exemption under Section 883 of the Code in “Item 10. Additional Information - E. Taxation – United States Federal Income Tax Consequences – Exemption of Operating Income from United States Federal Income Taxation.”

Because the availability of the exemption depends on factual circumstances beyond our control, we can give no assurances on the tax-exempt status of ourselves or that of any of our subsidiaries for our 2024 or subsequent taxable years. If we or our subsidiaries are not entitled to exemption under Section 883, we or our subsidiaries will be subject to the 4% U.S. federal income tax on 50% of any shipping income such companies derive that is attributable to the transport of cargoes to or from the United States. This tax is a cost, which, if unreimbursed, has a negative effect on our business and results in decreased earnings available for distribution to our shareholders.

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We may be subject to tax in the jurisdictions in which we or our vessel-owning or management subsidiaries are incorporated or operate.

In addition to the tax consequences discussed herein, we may be subject to tax in one or more other jurisdictions where we or our subsidiaries are incorporated or conduct activities. We are subject to a corporate flat tax for our subsidiaries in Malta for the period from January 1, 2023 to December 31, 2023 and could be subject to additional taxation in the future in Malta or other jurisdictions where our subsidiaries are incorporated or do business. The amount of any such tax imposed upon our operations or on our subsidiaries’ operations may be material and could have an adverse effect on our earnings.

We are a “foreign private issuer,” which could make our common stock less attractive to some investors or otherwise harm our stock price.

We are a “foreign private issuer,” as such term is defined in Rule 405 under the Securities Act. As a “foreign private issuer” the rules governing the information that we disclose differ from those governing U.S. corporations pursuant to the Exchange Act. We are not required to file quarterly reports on Form 10-Q or provide current reports on Form 8-K disclosing significant events within four days of their occurrence. In addition, our officers and directors are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchase and sales of our securities. Our exemption from the rules of Section 16 of the Exchange Act regarding sales of common stock by insiders means that you will have less data in this regard than shareholders of U.S. companies that are subject to the Exchange Act. Moreover, we are exempt from the proxy rules, and proxy statements that we distribute will not be subject to review by the Commission. Accordingly, there may be less publicly available information concerning us than there is for other U.S. public companies that are not foreign private issuers. These factors could make our common stock less attractive to some investors or otherwise harm our stock price.

Our corporate governance practices are in compliance with, and are not prohibited by, the laws of the Republic of the Marshall Islands, and as such we are entitled to exemption from certain Nasdaq corporate governance standards. As a result, you may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.

Our Company’s corporate governance practices are in compliance with, and are not prohibited by, the laws of the Republic of the Marshall Islands. Therefore, we are exempt from many of Nasdaq’s corporate governance practices other than the requirements regarding the disclosure of a going concern audit option, submission of a listing agreement, notification of material non-compliance with Nasdaq corporate governance practices, and the establishment and composition of an audit committee and a formal written audit committee charter. For a list of the practices followed by us in lieu of Nasdaq’s corporate governance rules, we refer you to “Item 16G. Corporate Governance” in this annual report. To the extent we rely on these or other exemptions our shareholders may not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements.

We conduct business in China, where the legal system is not fully developed and has inherent uncertainties that could limit the legal protections available to us.

Our vessels may be chartered to Chinese customers and from time to time on our charterers’ instructions, our vessels and other vessels we may acquire may call on Chinese ports. Such charters and voyages may be subject to regulations in China that may require us to incur new or additional compliance or other administrative costs and may require that we pay to the Chinese government new taxes or other fees. Applicable laws and regulations in China may not be well publicized and may not be known to us or our charterers in advance of us or our charterers becoming subject to them, and the implementation of such laws and regulations may be inconsistent. Changes in Chinese laws and regulations, including with regards to tax matters, or changes in their implementation by local authorities, could affect our vessels and other vessels we may acquire if chartered to Chinese customers as well as our vessels and other vessels we may acquire calling to Chinese ports and could have a material adverse impact on our business, financial conditions and results of operations.

Changing laws and evolving reporting requirements could have an adverse effect on our business.

Changing laws, regulations and standards relating to reporting requirements, including the European Union General Data Protection Regulation, or GDPR, which related to the collection, use, retention, security, processing and transfer of personally identifiable information about our customers and employees, may create additional compliance requirements for us. To maintain high standards of corporate governance and public disclosure, we have invested in, and continue to invest in, reasonably necessary resources to comply with evolving standards.

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GDPR broadens the scope of personal privacy laws to protect the rights of European Union citizens and requires organizations to report on data breaches within 72 hours and be bound by more stringent rules for obtaining the consent of individuals on how their data can be used. Non-compliance with GDPR or other data privacy laws may expose entities to significant fines or other regulatory claims which could have an adverse effect on our business, and results of operations.

A cyber-attack could materially disrupt our business.

We rely on information technology systems and networks in our operations and administration of our business. Information systems are vulnerable to security breaches by computer hackers and cyber terrorists. The safety and security of our vessels as well as our business operations could be targeted by individuals or groups seeking to sabotage or disrupt our information technology systems and networks, or to steal data. Despite our cybersecurity measures, a successful cyber-attack, including as a result of spam, targeted phishing type emails and ransomware attacks, or other breaches of or significant interruption or failure of our information technology systems, could materially disrupt our operations and their safety, or lead to unauthorized release of information or alteration of information in our systems. Any such attack or other breach of or significant interruption or failure of our information technology systems could have a material adverse effect on our business and results of operations. In addition, the unavailability of the information systems or the failure of these systems to perform as anticipated for any reason could disrupt our business and could result in decreased performance and increased operating costs, causing our business and results of operations to suffer.

Additionally, recent action by the IMO’s Maritime Safety Committee and United States agencies indicates that cybersecurity regulations for the maritime industry are likely to be further developed in the near future in an attempt to combat cybersecurity threats. Any changes in the nature of cyber threats might require us to adopt additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures. The war between Russia and Ukraine has been accompanied by cyber-attacks against the Ukrainian government and other countries in the region. It is possible that these attacks could have collateral effects on additional critical infrastructure and financial institutions globally, which could adversely affect our operations.  We rely on industry-accepted security measures and technology to securely maintain confidential and proprietary information maintained on our information systems. However, these measures and technology may not adequately prevent security breaches and, therefore, it is difficult to assess the likelihood of such threat and any potential impact at this time.

In July 2023, the SEC adopted rules requiring the mandatory disclosure of material cybersecurity incidents, as well as cybersecurity governance and risk management practices. A failure to disclosure could result in the imposition of injunctions, fines and other penalties by the SEC. Complying with these obligations could cause us to incur substantial costs and could increase negative publicity surrounding any cybersecurity incident.

The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.

Our vessels may call in ports in South America and other areas where smugglers attempt to hide drugs and other contraband on vessels, with or without the knowledge of crew members. Under some jurisdictions, vessels used for the conveyance of illegal drugs could subject such vessels to forfeiture to the government of these jurisdictions. To the extent our vessels are found with contraband, whether inside or attached to the hull of our vessels and whether with or without the knowledge of any member of our crew, we may face reputational damage and governmental or other regulatory claims or penalties which could have an adverse effect on our business, results of operations, cash flows and financial condition, as well as our ability to maintain cash flows, including cash available for distributions to pay dividends to our shareholders. Under some jurisdictions, vessels used for the conveyance of illegal drugs could be subject to forfeiture proceedings by the government of such jurisdiction.

The international nature of our operations may make the outcome of any potential bankruptcy proceedings difficult to predict.

The Marshall Islands has passed an act implementing the U.N. Commission on Internal Trade Law (UNCITRAL) Model Law on Cross-Border Insolvency, or the Model Law. The adoption of the Model Law is intended to implement effective mechanisms for dealing with issues related to cross-border insolvency proceedings and encourages cooperation and coordination between jurisdictions. Notably, the Model Law does not alter the substantive insolvency laws of any jurisdiction and does not create a bankruptcy code in the Marshall Islands. Instead, the Act allows for the recognition by the Marshall Islands of foreign insolvency proceedings, the provision of foreign creditors with access to courts in the Marshall Islands, and the cooperation with foreign courts. Consequently, in the event of any bankruptcy, insolvency or similar proceedings involving us or one of our subsidiaries, bankruptcy laws other than those of the United States could apply. We have limited operations in the United States. If we become a debtor under the United States bankruptcy laws, bankruptcy courts in the United States may seek to assert jurisdiction over all of our assets, wherever located, including property situated in other countries. There can be no assurance, however, that we would become a debtor in the United States or that a United States bankruptcy court would be entitled to, or accept, jurisdiction over such bankruptcy case or that courts in other countries that have jurisdiction over us and our operations would recognize a United States bankruptcy court’s jurisdiction if any other bankruptcy court would determine it had jurisdiction.


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Risks Relating to Our Common Shares

We may issue additional common shares or other equity securities without shareholder approval, which would dilute our existing shareholders’ ownership interests and may depress the market price of our common shares.

We may issue additional common shares or other equity securities of equal or senior rank in the future without shareholder approval in connection with, among other things, future vessel acquisitions, the repayment of outstanding indebtedness, and the conversion of convertible financial instruments.

Our issuance of additional common shares or other equity securities of equal or senior rank in these situations would have the following effects:

•
our existing shareholders’ proportionate ownership interest in us would decrease;

•
the proportionate amount of cash available for dividends payable per common share could decrease;

•
the relative voting strength of each previously outstanding common share could be diminished; and

•
the market price of our common shares could decline.

In addition, as of March 28, 2024, we may be obliged to issue additional common shares pursuant to the terms of outstanding warrants as follows:

•            27,304 common shares issuable upon the exercise of outstanding Class D warrants at an exercise price of $13.89 per share, which warrants were issued in our public offering which closed on April 2, 2020 and expire in April 2025; and

•             269,459 common shares issuable upon the exercise of outstanding Class E Warrants at an exercise price of $4.89 per share, which warrants were issued in our underwritten public offering which closed on August 20, 2020 and which expire in August 2025.

In addition, we may from time to time issue and sell up to an aggregate amount of $30 million of common shares pursuant to the ATM Sales Agreement we have entered into with B. Riley Securities, Inc., as sales agent, as described on our Form 6-K filed with the Commission on December 15, 2023.

Our issuance of additional common shares upon the exercise of such warrants would cause the proportionate ownership interest in us of our existing shareholders, other than the exercising warrant, to decrease; the relative voting strength of each previously outstanding common share held by our existing shareholders to decrease; and, depending on our share price when and if these warrants are exercised, may result in dilution to our shareholders.

The market price of our common shares has been and may in the future be subject to significant fluctuations. Further, there is no guarantee of a continuing public market to resell our common shares.

The market price of our common shares has been and may in the future be subject to significant fluctuations as a result of many factors, some of which are beyond our control. Among the factors that have in the past and could in the future affect our stock price are:

•
quarterly variations in our results of operations;

•
changes in market valuations of similar companies and stock market price and volume fluctuations generally;

•
changes in earnings estimates or the publication of research reports by analysts;

•
speculation in the press or investment community about our business or the shipping industry generally;

•
strategic actions by us or our competitors such as acquisitions or restructurings;

•
the thin trading market for our common shares, which makes it somewhat illiquid;

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•
regulatory developments;

•
additions or departures of key personnel;

•
general market conditions; and

•
domestic and international economic, market and currency factors unrelated to our performance.

On December 29, 2023, the closing price of our common shares on the Nasdaq Capital Market was $7.83 per share, as compared to $8.70, which was the closing price on March 28, 2024. In addition, there has from time to time in the past been significant volatility in our trading volumes on the Nasdaq Capital Market and volatility in our intra-day common share price. As a result, there is a potential for rapid and substantial decreases in the price of our common shares, including decreases unrelated to our operating performance or prospects.

The stock markets in general, and the markets for dry bulk shipping and shipping stocks in particular, have experienced extreme price and volume volatility that has sometimes been unrelated to the operating performance of individual companies. These broad market fluctuations may adversely affect the trading price of our common shares.

Additionally, there is no guarantee of a continuing public market to resell our common shares. Our common shares commenced trading on the Nasdaq Global Market on October 15, 2008. Since December 21, 2012, our common shares have traded on the Nasdaq Capital Market. We cannot assure you that an active and liquid public market for our common shares will continue.

On July 15, 2019, we received written notification from the Nasdaq Stock Market, indicating that because the closing bid price of our common stock for 30 consecutive business days, from May 31, 2019 to July 12, 2019, was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq Capital Market, we were not in compliance with Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the applicable grace period to regain compliance was 180 days, or until January 13, 2020. On January 14, 2020, we received written notification from the Nasdaq Stock Market, indicating that we were granted an additional 180-day grace period, until July 13, 2020, to cure our non-compliance with Nasdaq Listing Rule 5550(a)(2). We received written notification from the Nasdaq Stock Market dated April 17, 2020, granting an extension of the grace period to cure such non-compliance from July 13, 2020 to September 25, 2020. The extension was granted as part of Nasdaq’s determination to toll the compliance periods for all public companies, not meeting the continued listing requirements, such as the bid price requirement, due to the extraordinary market conditions and unprecedented turmoil in U.S. financial markets. On June 30, 2020, we conducted a 1-for-16 reverse stock split. On July 15, 2020, the Nasdaq Stock Market confirmed that we regained compliance with Nasdaq Listing Rule 5550(a)(2) concerning the minimum bid price of the Company’s common stock.

On September 30, 2020, we again received written notification from the Nasdaq Stock Market indicating that because the closing bid price of our common stock for 30 consecutive business days, from August 18, 2020 to September 29, 2020, was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq Capital Market, we were not in compliance with Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the applicable grace period to regain compliance was 180 days, or until March 29, 2021. On February 11, 2021, the Nasdaq Stock Market confirmed that we regained compliance with Nasdaq Listing Rule 5550(a)(2) concerning the minimum bid price of the Company’s common stock and this matter is now closed.

On January 26, 2022, we again received written notification from the Nasdaq Stock Market indicating that because the closing bid price of our common stock for 30 consecutive business days, from December 13, 2021 to January 25, 2022, was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq Capital Market, we were not in compliance with Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the applicable grace period to regain compliance was 180 days, or until July 25, 2022. On February 14, 2022, the Nasdaq Stock Market confirmed that we regained compliance with Nasdaq Listing Rule 5550(a)(2) concerning the minimum bid price of the Company’s common stock and this matter is now closed.

On August 1, 2022, we again received written notification from the Nasdaq Stock Market indicating that because the closing bid price of our common stock for 30 consecutive business days, from June 16, 2022 to July 29, 2022, was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq Capital Market, we were not in compliance with Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the applicable grace period to regain compliance was 180 days, or until January 30, 2023. On January 31, 2023, we received written notification from the Nasdaq Stock Market, indicating that we were granted an additional 180-day grace period, until July 31, 2023, to cure our non-compliance with Nasdaq Listing Rule 5550(a)(2). On February 16, 2023, we conducted a 1-for-10 reverse stock split. On March 6, 2023, we announced that the Nasdaq Stock Market confirmed that we regained compliance with Nasdaq Listing Rule 5550(a)(2) concerning the minimum bid price of the Company’s common stock and this matter is now closed.

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A possible “short squeeze” due to a sudden increase in demand of our common stock that largely exceeds supply may lead to further price volatility in our common shares.

Investors may purchase our common shares to hedge existing exposure in our common shares or to speculate on the price of our common shares. Speculation on the price of our common shares may involve long and short exposures. To the extent aggregate short exposure exceeds the number of common shares available for purchase in the open market, investors with short exposure may have to pay a premium to repurchase our common shares for delivery to lenders of our common shares. Those repurchases may in turn, dramatically increase the price of our common shares until investors with short exposure are able to purchase additional common shares to cover their short position. This is often referred to as a “short squeeze.” Following such a short squeeze, once investors purchase the shares necessary to cover their short position, the price of our common shares may rapidly decline. A short squeeze could lead to volatile price movements in our shares that are not directly correlated to the performance or prospects of our company.

We may not have the surplus or net profits required by law to pay dividends. The declaration and payment of dividends will always be subject to the discretion of our board of directors and will depend on a number of factors. Our board of directors may not declare dividends in the future.

The declaration, timing and amount of any dividend is subject to the discretion of our board of directors and will be dependent upon our earnings, financial condition, market prospects, capital expenditure requirements, investment opportunities, restrictions in our loan agreements, the provisions of Marshall Islands law affecting the payment of dividends to shareholders, overall market conditions and other factors. Our board of directors may not declare dividends in the future.

Further, Marshall Islands law generally prohibits the payment of dividends if the company is insolvent or would be rendered insolvent upon payment of such dividend, and dividends may be declared and paid out of our operating surplus. Dividends may also be declared or paid out of net profits for the fiscal year in which the dividend is declared and for the preceding fiscal year. We may not have the required surplus or net profits to pay dividends, and we may be unable to pay dividends in any anticipated amount or at all.

The superior voting rights of our Series B Preferred Shares may limit the ability of our common shareholders to control or influence corporate matters, and the interests of the holder of such shares could conflict with the interests of common shareholders.

While our common shares have one vote per share, each of our 20,000 Series B Preferred Shares presently outstanding has 25,000 votes per share; however, the voting power of the Series B Preferred Shares is limited such that no holder of Series B Preferred Shares may exercise voting rights pursuant to any Series B Preferred Shares that would result in the total number of votes a holder is entitled to vote on any matter submitted to a vote of shareholders of the Company to exceed 49.99% of the total number of votes eligible to be cast on such matter. The Series B Preferred Shares, however, have no dividend rights or distribution rights, other than the right upon dissolution to receive a payment equal to the par value per of $0.0001 per share.

As of the date of this annual report, our Chairman and Chief Executive Officer can therefore control 49.99% of the voting power of our outstanding capital stock. Our Chairman and Chief Executive Officer will have substantial control and influence over our management and affairs and over matters requiring shareholder approval, including the election of directors and significant corporate transactions, even though he owns significantly less than 50% of the Company economically.

The superior voting rights of our Series B Preferred Shares may limit our common shareholders’ ability to influence corporate matters. The interests of the holder of the Series B Preferred Shares may conflict with the interests of our common shareholders, and as a result, the holders of our capital stock may approve actions that our common shareholders do not view as beneficial. Any such conflicts of interest could adversely affect our business, financial condition and results of operations, and the trading price of our common shares.

Anti-takeover provisions in our restated articles of incorporation, as amended, and fourth amended and restated bylaws could make it difficult for our shareholders to replace or remove our current board of directors or could have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of our common shares.

Several provisions of our restated articles of incorporation, as amended, and fourth amended and restated bylaws may have anti-takeover effects. These provisions are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our board to maximize shareholder value in connection with any unsolicited offer to acquire our company. However, these anti-take-over provisions could make it difficult for our shareholders to change the composition of our board of directors in any one year, preventing them from changing the composition of our management. In addition, the same provisions may discourage, delay or prevent a merger or acquisition that some shareholders may consider favorable.

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These provisions:

•             authorize our board of directors to issue “blank check” preferred stock without shareholder approval, including preferred shares with superior voting rights, such as the Series B Preferred Shares;

•             provide for a classified board of directors with staggered, three-year terms;

•             permit the removal of any director only for cause;

•             prohibit shareholder action by written consent unless the written consent is signed by all shareholders entitled to vote on the action;

•             limit the persons who may call special meetings of shareholders; and

•             establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by shareholders at meetings of shareholders.

In addition, we have entered into an amended and restated shareholders’ rights agreement that makes it more difficult for a third party to acquire us without the support of our board of directors. See “Description of Securities” filed as Exhibit 2.5 hereto for a description of our amended and restated shareholders rights agreement. These anti-takeover provisions, along with provisions of our amended and restated shareholders rights agreement, could substantially impede the ability of our shareholders to impose a change in control and, as a result, may adversely affect the market price of our common shares and your ability to realize any potential change of control premium.

Issuance of preferred shares, such as our Series B Preferred Shares, may adversely affect the voting power of our common shareholders and have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of our common shares.

Our restated articles of incorporation, as amended, currently authorize our board of directors to issue preferred shares in one or more series and to determine the rights, preferences, privileges and restrictions, with respect to, among other things, dividends, conversion, voting, redemption, liquidation and the number of shares constituting any series without shareholders’ approval. Our board of directors has issued, and may in the future issue, preferred shares with voting rights superior to those of the common shares, such as the Series B Preferred Shares. If our board of directors determines to issue preferred shares, such issuance may discourage, delay or prevent a merger or acquisition that shareholders may consider favorable. The issuance of preferred shares with voting and conversion rights may also adversely affect the voting power of the holders of common shares. This could substantially impede the ability of public shareholders to benefit from a change in control and, as a result, may adversely affect the market price of our common shares and our shareholders’ ability to realize any potential change of control premium.

We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law, which may negatively affect the ability of shareholders to protect their interests.

Our corporate affairs are governed by our restated articles of incorporation, as amended, our fourth amended and restated bylaws and by the Marshall Islands Business Corporations Act, or the BCA. The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States. However, there have been few judicial cases in the Republic of the Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the laws of the Republic of the Marshall Islands are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in certain U.S. jurisdictions. Shareholder rights may differ as well. While the BCA does specifically incorporate the non-statutory law, or judicial case law, of the State of Delaware and other states with substantially similar legislative provisions, shareholders may have more difficulty in protecting their interests in the face of actions by the management, directors or controlling shareholders than would shareholders of a corporation incorporated in a U.S. jurisdiction.

Additionally, the Republic of the Marshall Islands does not have a legal provision for bankruptcy or a general statutory mechanism for insolvency proceedings. As such, in the event of a future insolvency or bankruptcy, our shareholders and creditors may experience delays in their ability to recover for their claims after any such insolvency or bankruptcy. Further, in the event of any bankruptcy, insolvency, liquidation, dissolution, reorganization or similar proceeding involving us or any of our subsidiaries, bankruptcy laws other than those of the United States could apply. If we become a debtor under U.S. bankruptcy law, bankruptcy courts in the United States may seek to assert jurisdiction over all of our assets, wherever located, including property situated in other countries. There can be no assurance, however, that we would become a debtor in the United States, or that a U.S. bankruptcy court would be entitled to, or accept, jurisdiction over such a bankruptcy case, or that courts in other countries that have jurisdiction over us and our operations would recognize a U.S. bankruptcy court’s jurisdiction if any other bankruptcy court would determine it had jurisdiction.

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We may fail to meet the continued listing requirements of Nasdaq, which could cause our common shares to be delisted.

There can be no assurance that we will remain in compliance with Nasdaq’s listing qualification rules, or that our common shares will not be delisted, which could have an adverse effect on the market price of, and the efficiency of the trading market for, our common shares and could cause a default under our loan facilities and other financing agreements.

 As a Marshall Islands corporation with principal executive offices in Greece, and also having subsidiaries in the Republic of the Marshall Islands and other offshore jurisdictions such as the Republic of Liberia and the British Virgin Islands, our operations may be subject to economic substance requirements.

The Council of the European Union, or the Council, routinely publishes a list of “non-cooperative jurisdictions” for tax purposes, which includes countries that the Council believes need to improve their legal framework and to work towards compliance with international standards in taxation. In 2019, the Republic of the Marshall Islands and the British Virgin Islands, among others, were placed by the E.U. on the list of non-cooperative jurisdictions for failing to implement certain commitments previously made to the E.U. by the agreed deadline. However, each was removed from the list of noncooperative jurisdictions within 2019. In February 2023, the Republic of the Marshall Islands and the British Virgin Islands (among others) were placed by the E.U. on the list of non-cooperative jurisdictions for lacking in the enforcement of economic substance requirement, and were subsequently removed from such list in October 2023. E.U. member states have agreed upon a set of measures, which they can choose to apply against the listed countries, including, increased monitoring and audits, withholding taxes and non-deductibility of costs, and although we are not currently aware of any such measures being adopted they can be adopted by one or more EU members states in the future. The European Commission has stated it will continue to support member states’ efforts to develop a more coordinated approach to sanctions for the listed countries. E.U. legislation prohibits certain E.U. funds from being channeled or transited through entities in non-cooperative jurisdictions.

We are a Marshall Islands corporation with principal executive offices in Greece. Several of our subsidiaries are organized in the Republic of the Marshall Islands, the British Virgin Islands and the Republic of Liberia. The Marshall Islands have enacted economic substance regulations relating to, inter alia, shipping business activities, with which we are obligated to comply. The Marshall Islands economic substance regulations require certain entities that carry out particular activities to comply with a three-part economic substance test whereby the entity must show that it (i) is directed and managed in the Marshall Islands in relation to that relevant activity, (ii) carries out core income-generating activity in relation to that relevant activity in the Marshall Islands (although it is being understood and acknowledged by the regulators that income-generated activities for shipping companies will generally occur in international waters) and (iii) having regard to the level of relevant activity carried out in the Marshall Islands has (a) an adequate amount of expenditures in the Marshall Islands, (b) adequate physical presence in the Marshall Islands and (c) an adequate number of qualified employees in the Marshall Islands. The British Virgin Islands have enacted similar legislation.

If we fail to comply with our obligations under such regulations or any similar law applicable to us in any other jurisdictions, we could be subject to financial penalties and spontaneous disclosure of information to foreign tax officials, or with respect to the Marshall Islands economic substance requirements, revocation of the formation documents and dissolution of the applicable non-compliant Marshall Islands entity or struck from the register of companies, in related jurisdictions. Any of the foregoing could be disruptive to our business and could have a material adverse effect on our business, financial conditions and operating results. Accordingly, any implementation of, or changes to, any of the economic substance regulations that impact us could increase the complexity and costs of carrying on business in these jurisdictions, and thus could adversely affect our business, financial condition or results of operations.

We do not know (i) if the E.U. will once again add the Republic of the Marshall Islands or the British Virgin Islands to, or add the Republic of Liberia to, the list of non-cooperative jurisdictions, (ii) what actions the jurisdictions may take, if any, to remove itself from such list if it should be placed back on the list of non-cooperative jurisdictions, (iii) how quickly the E.U. would react to any changes in legislation of the relevant jurisdictions, or (iv) how E.U. banks or other counterparties will react while we or any of our subsidiaries remain as entities organized and existing under the laws of listed countries during a period if the jurisdictions are placed on the list of non-cooperative jurisdictions. The effect of the E.U. list of non-cooperative jurisdictions, and any non-compliance by us with any legislation or regulations adopted by applicable countries to achieve removal from the list, including economic substance regulations, could have a material adverse effect on our business, financial conditions and operating results.

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Our fourth amended and restated bylaws provide that the High Court of the Republic of Marshall Islands shall be the sole and exclusive forum for certain disputes between us and our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

Our fourth amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, the High Court of the Republic of Marshall Islands shall be the sole and exclusive forum for (i) any shareholders’ derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or employee of the Company to the Company or the Company’s shareholders, (iii) any action asserting a claim arising pursuant to any provision of the BCA (as amended from time to time), or (iv) any action asserting a claim governed by the internal affairs doctrine. This forum selection provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits with respect to such claims.

We may not achieve the intended benefits of having a forum selection provision if it is found to be unenforceable.

Our fourth amended and restated bylaws include a forum selection provision as described above. However, the enforceability of similar forum selection provisions in other companies’ governing documents has been challenged in legal proceedings, and it is possible that in connection with any action a court could find the forum selection provision contained in our fourth amended and restated bylaws to be inapplicable or unenforceable in such action. In particular, Section 27 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. In addition, Section 22 of the Securities Act of 1933, as amended (the “Securities Act”), creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Shareholders’ derivative actions, including those arising under the Exchange Act or Securities Act, are subject to our forum selection provision. To the extent that the exclusive forum provision would apply to restrict the courts in which our shareholders may bring claims arising under the Exchange Act or the Securities Act and the rules and regulations thereunder, there is uncertainty as to whether a court would enforce such a provision. Investors cannot waive compliance with the federal securities laws and the rules and regulations promulgated thereunder. If a court were to find the forum selection provision to be inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we could be required to litigate claims in multiple jurisdictions, incur additional costs associated with resolving such action in other jurisdictions, or otherwise not receive the benefits that we expect our forum selection provisions to provide, which could adversely affect our business, financial condition and results of operations.

It may not be possible for investors to serve process on or enforce U.S. judgments against us.

We and all of our subsidiaries are incorporated in jurisdictions outside the U.S. and substantially all of our assets and those of our subsidiaries are located outside the U.S. In addition, most of our directors and officers are non-residents of the U.S., and all or a substantial portion of the assets of these non-residents are located outside the U.S. As a result, it may be difficult or impossible for U.S. investors to serve process within the U.S. upon us, our subsidiaries or our directors and officers or to enforce a judgment against us for civil liabilities in U.S. courts. In addition, you should not assume that courts in the countries in which we or our subsidiaries are incorporated or where our assets or the assets of our subsidiaries are located (1) would enforce judgments of U.S. courts obtained in actions against us or our subsidiaries based upon the civil liability provisions of applicable U.S. federal and state securities laws or (2) would enforce, in original actions, liabilities against us or our subsidiaries based on those laws.

ITEM 4.
INFORMATION ON THE COMPANY

A.
History and Development of the Company

Overview

We are an international shipping company specializing in the worldwide seaborne transportation of dry bulk commodities. We currently operate 16 Capesize dry bulk vessels and one Newcastlemax dry bulk vessel with a cargo-carrying capacity of approximately 3,054,820 dwt and an average fleet age of 13.1 years. The Company has agreed to purchase two secondhand Capesize dry bulk vessels with expected deliveries within 2024. Upon the completion of these deliveries, the Company’s operating fleet will consist of 18 Capesize dry bulk vessels and one Newcastlemax dry bulk vessel with an aggregate cargo carrying capacity of approximately 3,417,608 dwt.

We believe we have established a reputation in the international dry bulk shipping industry for operating and maintaining vessels with high standards of performance, reliability and safety. We have assembled a management team comprised of executives who have extensive experience operating large and diversified fleets, and who have strong ties to a number of international charterers.

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We were incorporated under the laws of the Republic of the Marshall Islands, pursuant to the BCA, on January 4, 2008, originally under the name Seanergy Merger Corp. We changed our name to Seanergy Maritime Holdings Corp. on July 11, 2008. Our executive offices are located at 154 Vouliagmenis Avenue, 166 74 Glyfada, Greece and our telephone number is + 30 213 0181507. Our website is www.seanergymaritime.com. The SEC maintains a website that contains reports, proxy and information statements, and other information that we file electronically at www.sec.gov.

History and Development

Business Development and Capital Expenditures and Divestitures

On February 19, 2021, we issued 4,415,000 of our common shares in a registered direct offering for a purchase price of $17.00 per common share, for aggregate gross proceeds of approximately $75.1 million.

During 2021, we entered into seven separate definitive agreements with certain unaffiliated third parties to purchase seven Capesize vessels having an aggregate cargo-carrying capacity of approximately 1,256,400 dwt for an aggregate gross purchase price of $193.2 million funded through a combination of cash on hand and debt financing.

On March 24, 2021, we issued 95,573 common shares to Jelco Delta Holding Corp., or JDH, following JDH’s exercise of its pre-funded warrants from the December 30, 2020 transaction. Please see “Item 5. Operating and Financial Review and Prospects – B. Liquidity and Capital Resources – Loan Arrangements – JDH Transactions”.

On August 10, 2021, our board of directors authorized a share repurchase plan of up to $17 million of our outstanding common shares or other securities, which has been substantially completed. Pursuant to the plan, we have repurchased common shares for $1.7 million, a common stock purchase warrant for $1.0 million and two convertible notes with an aggregate principal amount of $13.95 million (discussed below).

On September 30, 2021, we sold the M/V Leadership to an unaffiliated third party for a gross sale price of $12.6 million.

Between January 15, 2021 and October 1, 2021, we issued 3,226,371 of our common shares pursuant to exercises of outstanding Class E warrants with gross proceeds of $22.6 million.


Through a series of transactions during the period of November and December 2021, we repurchased 170,210 of our outstanding common shares at an average price of approximately $9.93.


On December 7, 2021, our board of directors authorized a new share repurchase plan pursuant to which we could repurchase up to $10.0 million of our outstanding common shares or other securities. This share repurchase plan has been fully utilized.  Pursuant to the plan, we repurchased $5.0 million on January 26, 2022 and an additional $5.0 million on March 10, 2022 in relation to a convertible note (discussed below).

On December 10, 2021, we entered into a stock purchase agreement and issued 20,000 Series B Preferred Shares, par value $0.0001 per share, to our Chairman and Chief Executive Officer, in return for cash consideration of $250,000.

On December 13, 2021, our previously issued Class A Warrants, trading under the symbol SHIPW, expired.

During 2022, we entered into two separate definitive agreements with certain unaffiliated third parties to purchase two Capesize vessels having an aggregate cargo-carrying capacity of approximately 361,415 dwt for an aggregate gross purchase price of $65.6 million funded through a combination of cash on hand and debt financing.

On January 26, 2022, we voluntarily prepaid $5.0 million of the outstanding balance of the Second JDH Note using cash on hand.

On January 26, 2022, we received written notification from the Nasdaq Stock Market indicating that because the closing bid price of our common stock for 30 consecutive business days, from December 13, 2021 to January 25, 2022, was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq Capital Market, we were not in compliance with Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the applicable grace period to regain compliance was 180 days, or until July 25, 2022. On February 14, 2022, the Nasdaq Stock Market confirmed that we regained compliance with Nasdaq Listing Rule 5550(a)(2) concerning the minimum bid price of the Company’s common stock.

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On February 28, 2022, we voluntarily prepaid the remaining balance of $1.85 million of the Second JDH Loan using cash on hand. All obligations under the Second JDH Loan were irrevocably and unconditionally discharged pursuant to the deed of release dated February 28, 2022.

On March 9, 2022, we initiated quarterly cash dividends and declared a quarterly dividend of $0.25 per share with respect to the fourth quarter of 2021 and a special dividend of $0.25 per share, which were paid on April 5, 2022.

On March 10, 2022, we voluntarily prepaid another $5.0 million of the outstanding balance of the Second JDH Note using cash on hand.

On May 13, 2022, our previously issued Class B Warrants, trading under the symbol SHIPZ, expired.

On May 27, 2022, we declared a quarterly cash dividend of $0.25 per share for the first quarter of 2022 which was paid on July 14, 2022 to all shareholders of record as of June 28, 2022.

On June 21, 2022, United’s application to list its common shares on the Nasdaq Capital Market was approved. The registration statement on Form 20-F, filed by United in connection with its spin-off from us (the “Spin-Off”), was declared effective by the SEC. To effect the Spin-Off, we contributed the vessel-owning subsidiary of the M/V Gloriuship to United along with $5.0 million in working capital, in connection with the distribution of (i) all of United’s issued and outstanding common shares to our shareholders, (ii) 40,000 of United’s Series B preferred shares, par value $0.0001 to the holder of all of our issued and outstanding Series B preferred shares and (iii) 5,000 of United’s 6.5% Series C Cumulative Convertible Perpetual Preferred Shares to us. Our common shareholders received one United common share for every 11.8 Seanergy common shares held at the close of business on June 28, 2022. The Spin-Off was effective upon the distribution of United’s common shares on July 5, 2022.

On June 28, 2022, our board of directors authorized a new share repurchase plan pursuant to which we could repurchase up to $5.0 million of our outstanding common shares, convertible note, and warrants (the “June 2022 Repurchase Plan”). On November 28, 2022, the board of directors authorized the extension of the June 2022 Repurchase Plan until December 31, 2023, and subsequently terminated it on December 13, 2023 in connection with the adoption of another repurchase plan. 362,161 common shares were repurchased under this plan before its termination, for an aggregate price of $1,582,664.

On July 6, 2022, we completed the spin-off of our wholly owned subsidiary, United, effective July 5, 2022. Our shareholders received one United share for every 11.8 shares of Seanergy held at the close of business on June 28, 2022. Additionally, our Chairman and Chief Executive Officer, Stamatios Tsantanis, received 40,000 of United’s Series B Preferred Shares and 5,000 of United’s Series C Cumulative Convertible Perpetual Preferred Shares were issued to the Company. Fractional common shares of United were not distributed. Instead, the distribution agent aggregated fractional common shares into whole shares, promptly sold such whole shares in the open market at prevailing rates and distributed the net cash proceeds from the sales pro rata to each holder who would otherwise have been entitled to receive fractional common shares in the distribution.

On July 26, 2022, we contributed another $5.0 million to United in exchange for an additional 5,000 of United’s newly issued Series C Cumulative Convertible Perpetual Preferred Shares, in connection with United’s funding of the deposits payable for four tanker vessels that were acquired by United.

On August 1, 2022, we received written notification from the Nasdaq Stock Market indicating that because the closing bid price of our common stock for 30 consecutive business days, from June 16, 2022 to July 29, 2022, was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq Capital Market, we were not in compliance with Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the applicable grace period to regain compliance is was 180 days, or until January 30, 2023. A second grace period until July 31, 2023 was granted by Nasdaq.  On February 16, 2023, at the opening of trading, we effected a one-for-ten reverse stock split of our common stock in order to cure the deficiency of the Nasdaq minimum bid price requirement originally communicated to us on August 1, 2022. On March 3, 2023, we received a letter from the Nasdaq Stock Market confirming that we regained compliance with Nasdaq Listing Rule 5550(a)(2) concerning the minimum bid price of the Company’s common stock and this matter is now closed.

On August 2, 2022, we declared a quarterly cash dividend of $0.25 per share for the second quarter of 2022 which was paid on October 11, 2022 to all shareholders of record as of September 25, 2022.

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On October 17, 2022, we received $0.17 million from United relating to dividends accrued under the Series C preferred shares from their original issuance date to the date thereof.

On November 28, 2022, the outstanding 10,000 Series C Cumulative Convertible Perpetual Preferred Shares of United held by us were redeemed by United at a price equal to 105% of the original issue price for a total cash inflow of $10.6 million, including all accrued and unpaid dividends up to the redemption date.

On November 30, 2022, we commenced a tender offer to purchase our outstanding Class E Warrants to purchase one common share, par value $0.0001, at a price of $0.20 per warrant. The tender offer expired at 5:00 P.M., Eastern Time, on January 10, 2023. A total of 4,038,114 Class E Warrants were tendered under the tender offer, representing approximately 47% of the outstanding Class E Warrants at the time of the tender offer.

On November 29, 2022, we declared a quarterly cash dividend of $0.25 per share for the third quarter of 2022 which was paid on January 30, 2023 to all shareholders of record as of December 28, 2022.

On December 22, 2022, we released our first Environmental, Social and Governance Report (“2021 ESG Report”) for the year ended December 31, 2021. The 2021 ESG Report provides an overview of our policies relating to environmental, social and governance commitments of the Company and has been developed in accordance with the Global Reporting Initiative Standards and the Sustainability Accounting Standards Board.

On December 27, 2022, we entered into definitive agreements to sell the 2005-built M/V Goodship and the 2006-built M/V Tradership, the oldest vessel in our fleet, to United, a related party for an aggregate gross sale price of $36.3 million. The M/V Goodship and the M/V Tradership were delivered to United on February 10, 2023 and February 28, 2023, respectively.

On January 3, 2023, we repaid another $8.0 million of the outstanding balance of the Second JDH Note using cash on hand, leaving approximately $3.2 million outstanding.

On March 13, 2023, we declared a quarterly cash dividend of $0.025 per share for the fourth quarter of 2022, which was paid on April 25, 2023 to all shareholders of record as of March 31, 2023.

On May 9, 2023, we entered into a 12-month bareboat charter agreement with an unaffiliated third party in Japan for a 2011-built Newcastlemax dry bulk vessel of 207,855 dwt built at Nantong COSCO KHI Ship Engineering Co Ltd. The vessel was renamed M/V Titanship and delivered to us on October 24, 2023. The bareboat charter agreement required a down payment of $7.0 million and includes a daily charter rate of $9,000 over the period of the bareboat charter and a purchase option of $20.2 million at the end of the bareboat charter. In aggregate, the acquisition cost for the vessel, following the exercise of the purchase option, will be approximately $30.5 million.

On May 24, 2023, we declared a quarterly cash dividend of $0.025 per share for the first quarter of 2023 which was paid on July 6, 2023 to all shareholders of record as of June 22, 2023.

On July 6, 2023, we announced that we repurchased 362,161 common shares at an average price of approximately $4.35 per share pursuant to the June 2022 Repurchase Plan.

On August 1, 2023, we declared a quarterly cash dividend of $0.025 per common share for the second quarter of 2023 which was paid on October 6, 2023 to all shareholders of record as of September 22, 2023.

On November 13, 2023, we declared a quarterly cash dividend of $0.025 per common share for the third quarter of 2023 which was paid January 10, 2024 to all shareholders of record as of December 22, 2023.

On December 1, 2023, we accomplished a strategic partnership under the European Union funded SAFeCRAFT Project Consortium (“SAFeCRAFT”), a breakthrough initiative concerning the utilization of alternative fuels. SAFeCRAFT aims to demonstrate the safety and viability of Sustainable Alternative Fuels (“SAFs”) in seaborne transportation, accelerating the adoption of SAFs technologies. Seanergy will provide one of its existing, conventionally fueled Capesize vessels as the demonstrating vessel under SAFeCRAFT which will be retrofitted to utilize hydrogen (H2) as the main energy source for electric power generation. This system is also expected to cover a portion of the vessel’s propulsion requirements and, therefore, to reduce reliance on conventional fuels. This project has a duration of 48 months starting from December 2023 and is co-funded by the consortium partners and the European Union’s key funding program for research and innovation, the “Horizon Europe” program, aligning with the FuelEU Maritime 2040 targets and demonstrating a decisive ambition to achieve a 26% reduction of CO2eq in an existing vessel.

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On December 6, 2023, we released our Environmental, Social and Governance Report for the year ended December 31, 2022 (“2022 ESG Report”). The 2022 ESG Report provides an overview of our policies relating to environmental, social and governance commitments of the Company and has been developed in accordance with the Global Reporting Initiative Standards and the Sustainability Accounting Standards Board.

On December 14, 2023, we announced that our Board of Directors authorized a new $25 million buyback program which could be utilized to repurchase our common shares and other securities. We also announced that our Chief Executive Officer intends to purchase an additional aggregate of up to $1,000,000 of our common shares in the open market, and that he had already purchased 200,000 of our common shares in the open market in 2023 to such date in an aggregate amount of $1,101,167, for an average purchase price of $5.43 per share.

On December 14, 2023, we entered into an ATM Sales Agreement with B. Riley Securities, Inc., as sales agent, pursuant to which we may issue and sell, from time to time, through or to the sales agent, up to an aggregate of $30 million of its common shares, par value $0.0001 per share. Up to the date of this report, the Company has issued and sold 309,634 common shares under the program at an average price of $7.87 per share, resulting in gross proceeds of $2.5 million.

On December 29, 2023, we repaid the remaining balance of $3.2 million on the Second JDH Note, as described herein.

In 2024 to date, we have issued 180,000 of our common shares pursuant to exercises of outstanding Class E warrants with gross proceeds of $0.9 million.

On February 5, 2024, we agreed to acquire a 181,392 dwt Capesize bulk carrier, built in 2013 in Japan, which will be renamed M/V Iconship. The purchase price of $33.7 million is expected to be funded through a combination of cash on hand and debt financing. The M/V Iconship is expected to be delivered between April and June 2024.

On March 5, 2024, we declared a quarterly dividend of $0.025 per common share for the fourth quarter of 2023 and a special dividend of $0.075 per common share, both payable on or about April 10, 2024 to all shareholders of record as of March 25, 2024.

On March 18, 2024, we agreed to acquire a 181,396 dwt Capesize bulk carrier, built in 2012 in Japan. The purchase price of $35.6 million is expected to be funded through a combination of cash on hand and debt financing. The vessel is expected to be delivered between July and October 2024.

B.
Business Overview

We are an international shipping company specializing in the worldwide seaborne transportation of dry bulk commodities.  We currently operate 16 Capesize dry bulk vessels and one Newcastlemax dry bulk vessel with a cargo-carrying capacity of approximately 3,054,820 dwt and an average fleet age of 13.1 years. Upon the completion of the delivery of the two secondhand Capesize vessels we have agreed to acquire with expected deliveries during 2024, we will operate 18 Capesize vessels and one Newcastlemax dry bulk vessel, with a cargo-carrying capacity of approximately 3,417,608 dwt.

We believe we have established a reputation in the international dry bulk shipping industry for operating and maintaining vessels with high standards of performance, reliability and safety. We have assembled a management team comprised of executives who have extensive experience operating large and diversified fleets, and who have strong ties to a number of international charterers.

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Our Current Fleet

The following table lists the vessels in our fleet as of the date of this annual report:

Vessel Name
Year Built
Dwt
Flag
Yard
Type of Employment
Titanship
2011
207,855
LIB
NACKS
T/C Index Linked(1)
Patriotship
2010
181,709
MI
Imabari
T/C Index Linked(2)
Dukeship
2010
181,453
MI
Sasebo
T/C Index Linked(3)
Worldship
2012
181,415
MI
Koyo-Imabari
T/C Index Linked(4)
Paroship
2012
181,415
LIB
Koyo-Imabari
T/C Index Linked(5)
Hellasship
2012
181,325
LIB
Imabari
T/C Index Linked(6)
Honorship
2010
180,242
MI
Imabari
T/C Index Linked(7)
Fellowship
2010
179,701
MI
Daewoo
T/C Index Linked(8)
Championship
2011
179,238
MI
Sungdong SB
T/C Index Linked(9)
Partnership
2012
179,213
MI
Hyundai
T/C Index Linked(10)
Knightship
2010
178,978
LIB
Hyundai
T/C Index Linked (11)
Lordship
2010
178,838
LIB
Hyundai
T/C Index Linked(12)
Friendship
2009
176,952
LIB
Namura
T/C Index Linked(13)
Flagship
2013
176,387
MI
Mitsui
T/C Index Linked(14)
Geniuship
2010
170,057
MI
Sungdong SB
T/C Index Linked(15)
Premiership
2010
170,024
MI
Sungdong SB
T/C Index Linked(16)
Squireship
2010
170,018
LIB
Sungdong SB
T/C Index Linked(17)
           

(1)         Chartered by Olam and delivered to the charterer October 28, 2023, for a period of minimum 11 to about 14 months at a daily charter hire based on a significant premium over the daily BCI. In addition, the T/C provides us with the option to convert the variable charter hire to a fixed rate for a period between two and 12 months priced at the prevailing Capesize Forward Freight Agreement rate, or FFA, rate for the selected period.

(2)         Chartered by Glencore and delivered to the charterer on November 19, 2022 for a period of about 12 to about 18 months. The gross daily rate of the T/C is based on a premium over the daily BCI and features a scrubber profit sharing scheme. In addition, the T/C provides us the option to convert the variable charter hire to a fixed rate for a period of between one and nine months priced at the prevailing Capesize FFA for the selected period. On September 22, 2023, we declared our option to extend the time charter agreement for six additional months to the original charter period. The extended period commenced on November 3, 2023. On February 26, 2024, Glencore agreed for a new extended period commencing after the maximum duration of the original period for a duration of minimum January 2025 up to maximum April 2025, while all other main terms of the time charter remain the same.

(3)         Chartered by NYK and delivered to the charterer on December 1, 2021 for a period of about 13 to about 18 months. The daily charter hire is based on a premium over the daily BCI. In addition, the time charter provides us the option to convert the variable charter hire to a fixed rate for a period of between two and 12 months priced at the prevailing Capesize FFA for the selected period. On March 17, 2023, NYK agreed to extend the T/C agreement in direct continuation from the maximum duration of the original period of the charter, for a periof of about 11 to maximum 15 months, while all other main terms of the time charter remain materially the same.

(4)         Chartered by NYK and delivered to the charterer on February 1, 2024 for a period of minimum 21 to about 24. The gross daily rate of the time charter agreement is based at a premium over the daily BCI and features a scrubber profit sharing scheme. In addition, the T/C provides us the option to convert the variable charter hire to a fixed rate for a period of between two and 12 months priced at the prevailing Capesize FFA rate for the selected period.

(5)         Chartered by Oldendorff and delivered to the charterer on January 12, 2023 for a period of about 10 months to maximum December 31, 2023. The daily charter hire is based on a premium over the daily BCI and features a scrubber profit sharing scheme. In addition, the time charter provides us with the option to convert the index linked rate to a fixed rate for a period of between three and nine months priced at the prevailing Capesize FFA for the selected period. On November 24, 2023, Oldendorff agreed to extend the time charter agreement in direct continuation from the previous agreement. On January 1, 2024, the new time charter period commenced for a duration of about 20 months to about 24 months, while all other main terms of the time charter remain materially the same.

(6)         Chartered by NYK and delivered to the charterer on May 10, 2021 for a period of minimum 11 to maximum 15 months. In addition, the T/C provides us the option to convert the variable charter hire to a fixed rate for a period between two and 12 months priced at the prevailing Capesize FFA rate for the selected period. In April 2022, the charter period was extended for minimum December 31, 2023 to maximum March 31, 2024 at a daily charter hire based on a premium over the BCI and on December 25, 2023, the time charter period was extended in direct continuation from the previous agreement. The new time charter period commenced on December 31, 2023 for a duration of minimum 12 months to maximum 16 months.

(7)          Chartered by NYK and delivered to the charterer on June 30, 2022 for a period of about 20 to about 24 months from the delivery date. The daily charter hire is based on a premium over the daily BCI. In addition, the time charter provides us with the option to convert the variable charter hire rate to a fixed rate for a period of between two and 12 months priced at the prevailing Capesize FFA for the selected period.

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(8)         Chartered by Anglo American, a leading global mining company, and delivered to the charterer on June 18, 2021 for a period of minimum 12 to about 15 months. In May 2022, the charter period was extended for minimum 20 to about 24 months with commencement from October 3, 2022 at a daily charter hire based on a premium over the BCI. In addition, the time charter provides us with the option to convert the variable charter hire to a fixed rate for a period of between three and 12 months priced at the prevailing Capesize FFA for the selected period.

(9)         Chartered by Cargill and delivered to the charterer on April 24, 2023 under a new T/C agreement for a period of about 24 to 30 months at an index linked rate, at a premium over the daily BCI and a new scrubber profit share scheme, with us receiving the majority of the monetary benefit. In addition, the time charter provides us with the option to convert the variable charter hire to a fixed rate for a period of between three and nine months priced at the prevailing Capesize FFA for the selected period.

(10)        Chartered by a major European utility and energy company and delivered to the charterer on September 11, 2019 for a period of minimum 33 to maximum 37 months with two optional periods of about 11 to maximum 13 months, at a daily rate based on a premium over the daily BCI and a scrubber profit sharing scheme. In addition, the time charter provides us with the option to convert the variable charter hire rate to a fixed rate for a period of between three and 12 months priced at the prevailing Capesize FFA for the selected period. In August 2022, the charterer of the M/V Partnership agreed to exercise the first optional period extending the T/C. On November 9, 2023 the second optional period commenced for a duration of about 11 months to a maximum of 13 months. For the second optional period, the fuel profit share of the Company is increased, while all other terms of the time charter remain materially the same.

(11)        Chartered by Glencore and delivered to the charterer on May 15, 2020 for a period of about 36 to about 42 months with two optional periods of 11 to 13 months. The daily charter hire is based on a premium over the daily BCI and features a scrubber profit sharing scheme. In addition, the time charter provides us with the option to convert the variable charter hire rate to a fixed rate for a period of between one and nine months priced at the prevailing Capesize FFA for the selected period. On March 28, 2023, Glencore agreed to exercise the first optional period extending the T/C after the maximum original period for a period of about 11 months to about 13 months including the option to us to convert this charter party to a fixed rate based on prevailing Capesize FFA for the selected period.

(12)       Chartered by a major European utility and energy company and delivered on October 1, 2023 for a duration until August 1, 2024 or September 30, 2024, in direct continuation from the previous agreement, at a daily charter hire based on the daily BCI. For the extended period, the fuel profit share of the Company has increased, the T/C provides us with the option to convert the variable charter hire rate to a fixed rate for a period of between three and 12 months priced at the prevailing Capesize FFA for the selected period, while all other main terms of the time charter remain materially the same.

(13)       Chartered by NYK and delivered to the charterer on July 29, 2021 for a period of minimum December 31, 2023 to maximum March 31, 2024. The daily charter hire is based on a premium over the daily BCI. In addition, the time charter provides us with the option to convert the variable charter hire rate to a fixed rate for a period of between two and 12 months priced at the prevailing Capesize FFA for the selected period. On December 25, 2023, the charterer agreed to extend the T/C agreement in direct continuation, with commencement from December 31, 2023, for minimum 12 to maximum 16 months, while all other main terms of the time charter remain materially the same.

(14)       Chartered by Cargill and delivered to the charterer on May 10, 2021 for a period of 60 months. The daily charter hire is based on a premium over the daily BCI minus $1,325 per day. In addition, the time charter provides us with the option to convert the variable charter hire rate to a fixed rate for a period of between three and 12 months priced at the prevailing Capesize FFA for the selected period.

(15)       Chartered by NYK and delivered to the charterer on February 5, 2022 for a period of about 11 to about 15 months. The daily charter hire is based on the daily BCI. In addition, the time charter provides us with the option to convert the index linked rate to a fixed rate for a period of between three and 12 months priced at the prevailing Capesize FFA for the selected period. On February 8, 2023, NYK agreed to extend the T/C agreement in direct continuation with commencement from May 20, 2023, for a period of about 11 months to a maximum of 15 months, while all other terms of the T/C remain unaltered.

(16)        Chartered by Glencore and delivered to the charterer on November 29, 2019 for a period of 36 to 42 months with two optional periods of 11 to 13 months. The first optional period commenced after the 42nd month for a period until May 29, 2023.  On November 17, 2023, Glencore exercised the second optional period which is expected to commence on April 29, 2024 for a period of minimum 11 to maximum 13 months at a rate based on the daily BCI and a scrubber profit sharing scheme. In addition, the time charter provides us with the option to convert the variable charter hire rate to a fixed rate for a period of between one and nine months priced at the prevailing Capesize FFA for the selected period.

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(17)       Chartered by Glencore and delivered to the charterer on December 19, 2019 for a period of 36 to 42 months with two optional periods of 11 to 13 months. The first optional period commenced after the 42nd month for a period until June 18, 2023.  On November 17, 2023, Glencore exercised the second optional period which is expected to commence on May 19, 2024 for a period of minimum 11 to maximum 13 months at a rate based on the daily BCI and a scrubber profit sharing scheme. In addition, the time charter provides us with the option to convert the variable charter hire rate to a fixed rate for a period of between one and nine months priced at the prevailing Capesize FFA for the selected period.

Key to Flags: MI – Marshall Islands, LIB – Liberia.

Our Business Strategy

We currently operate 16 Capesize vessels and one Newcastlemax dry bulk vessel. We also intend to continue to review the market from time to time in order to identify potential acquisition targets which will be accretive to our earnings per share. Our acquisition strategy mainly focuses on secondhand Capesize dry bulk vessels, although we may acquire vessels in other sectors which we believe offer attractive investment opportunities.

Management of Our Fleet

We manage our vessels’ operations, insurances and bunkering and have the general supervision of our third-party technical and commercial managers. In addition, we provide certain management services to vessels owned or operated by United.

Seanergy Shipmanagement, our wholly owned subsidiary, provides technical management services to the majority of the vessels of our fleet, namely the M/Vs Dukeship, Fellowship, Friendship, Knightship, Lordship, Worldship, Hellasship, Partnership, Flagship, Patriotship, Honorship, Premiership, Geniuship, Squireship and Paroship. In 2023 we paid a monthly fee of $14,000 and $10,000 per vessel for fourteen and one vessel, respectively, to Seanergy Shipmanagement. In addition, in 2023 we paid a monthly fee of $10,000 for the M/V Goodship which was sold to United in February 2023. Since January 1, 2024, we are paying a monthly fee of $14,000 and $10,000 per vessel for fourteen and one vessel, respectively, to Seanergy Shipmanagement. These technical management services include, inter alia, day-to-day operations, general administrative and support services, drydocking, bunkering, insurance arrangements and accounting related to vessels and provisions. These amounts are considered inter-company transactions and are, therefore, eliminated from our consolidated financial statements.

V.Ships Greece, an independent third party, currently provides technical management services to three of our vessels, the M/Vs Championship, Friendship and Titanship, that includes general administrative and support services, such as crewing and other technical management services, accounting related to vessels and provisions. V.Ships Limited was providing us with technical management services for three of our vessels in 2023. Pursuant to our technical management agreements with V.Ships Greece, in 2023 we paid monthly fees of $9,167 per vessel. In 2023 we also paid a monthly fee of $9,167 for the M/V Goodship which was sold to United in February 2023. In addition, in 2023 we paid to V.Ships Limited monthly fees of $9,013 for the M/V Geniuship until end January 2023, the M/V Squireship until mid-February 2023 and the M/V Tradership which was sold to United in February 2023. From January 1, 2024 onwards, we are paying a monthly fee of $10,000 per vessel to V.Ships Greece in exchange for providing these technical, support and administrative services. The management fees do not cover expenses such as voyage expenses, vessel operating expenses, maintenance expenses and crewing costs, which are reimbursed by us to V.Ships Greece. These technical management agreements are for an indefinite period until terminated by either party, giving the other notice in writing, in which event the applicable agreement shall terminate after one or two months from the date upon which such notice is received.

Seanergy Management has entered into a commercial management agreement with Fidelity, an independent third party, pursuant to which Fidelity provides commercial management services for all of the vessels in our fleet. Under the commercial management agreement, we have agreed to reimburse Fidelity for all reasonable running and/or out-of-pocket expenses, including but not limited to, telephone, fax, stationary and printing expenses, as well as any pre-approved travelling expenses. In addition, we have agreed to pay the following fees to Fidelity, (i) an annual fee of EUR 120,000 net payable in equal monthly payments and (ii) commission fees equal to 0.15% calculated on the collected gross hire/freight/demurrage payable when the relevant hire/freight/demurrage is collected. The fees under (i) and (ii) are capped at $0.4 million net per year. The commercial management agreement may be terminated by either party upon giving one-month prior written notice to the other party.

V.Ships Greece and Global Seaways provide crew management services to six and eight vessels of our fleet, respectively. V.Ships Limited and Anglo-Eastern Crew Management (Asia) Limited were providing us with crew management services for certain of our vessels in 2023. From January 1, 2023 to May 21, 2023, we paid a monthly fee of $2,000 per vessel to V.Ships Limited and from May 22, 2023 to December 31, 2023, a monthly fee of $2,100 per vessel to V.Ships Greece. In addition, in 2023 we paid a monthly fee of $90 per crew member or around $2,000 per vessel to Global Seaways and a monthly fee of $2,000 per vessel to Anglo-Eastern Crew Management (Asia) Limited. Since January 1, 2024, we are paying a monthly fee of $2,200 per vessel to V.Ships Greece and a fee of $90 per crew member or around $2,000 to Global Seaways.

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Employment of Our Fleet

As of the date of this report, all our vessels are employed under long-term time charters which have a charter hire calculated at an index-linked rate based on the 5-routes T/C average of the BCI. All our time charter agreements have the option to convert the index linked rate into a fixed rate corresponding to the prevailing value of the respective Capesize FFAs. In the future, we may opportunistically look to employ some of our vessels under time charter contracts with a fixed rate, should rates become more attractive.

The Dry Bulk Shipping Industry

The global dry bulk vessel fleet is divided into four categories based on a vessel’s carrying capacity.  These categories are:

Capesize. Capesize vessels have a carrying capacity exceeding 100,000 dwt. A sub-sector of the Capesize category is the Newcastlemax.  Only the largest ports around the world possess the infrastructure to accommodate vessels of this size.  Capesize vessels are primarily used to transport iron ore or coal and, to a much lesser extent, grains, primarily on long-haul routes.

Panamax. Panamax vessels have a carrying capacity of between 60,000 and 100,000 dwt.  These vessels are designed to meet the physical restrictions of the Panama Canal locks (hence their name “Panamax” — the largest vessels able to transit the Panama Canal prior to its 2016 expansion, making them more versatile than larger vessels).  These vessels carry coal, grains, and, to a lesser extent, minerals such as bauxite/alumina and phosphate rock.

Handymax/Supramax. Handymax vessels have a carrying capacity of between 30,000 and 60,000 dwt.  These vessels operate on a large number of geographically dispersed global trade routes, carrying primarily grains and minor bulks.  The standard vessels are usually built with 25-30-ton cargo gear, enabling them to discharge cargo where grabs are required (particularly industrial minerals), and to conduct cargo operations in countries and ports with limited infrastructure.  This type of vessel offers good trading flexibility and can, therefore, be used in a wide variety of bulk and neobulk trades, such as steel products.  Supramax are a sub-category of this category typically having a cargo carrying capacity of between 50,000 and 60,000 dwt.

Handysize. Handysize vessels have a carrying capacity of up to 30,000 dwt.  These vessels almost exclusively carry minor bulk cargo.  Increasingly, vessels of this type operate on regional trading routes, and may serve as trans-shipment feeders for larger vessels.  Handysize vessels are well suited for small ports with length and draft restrictions.  Their cargo gear enables them to service ports lacking the infrastructure for cargo loading and discharging.

The supply of dry bulk vessels is dependent on the delivery of new vessels and the removal of vessels from the global fleet, either through scrapping or loss.  The level of scrapping activity is generally a function of scrapping prices in relation to current and prospective charter market conditions, as well as operating, repair and survey costs.

The demand for dry bulk vessel capacity is determined by the underlying demand for commodities transported in dry bulk vessels, which in turn is influenced by trends in the global economy.  Demand for dry bulk vessel capacity is also affected by the operating efficiency of the global fleet, with port congestion, which has been a feature of the market since 2004, absorbing tonnage and therefore leading to a tighter balance between supply and demand.  In evaluating demand factors for dry bulk vessel capacity, we believe that dry bulk vessels can be the most versatile element of the global shipping fleets in terms of employment alternatives.

Charter Hire Rates

Charter hire rates fluctuate by varying degrees among dry bulk vessel size categories.  The volume and pattern of trade in a small number of commodities (major bulks) affect demand for larger vessels.  Therefore, charter rates and vessel values of larger vessels often show greater volatility.  Conversely, trade in a greater number of commodities (minor bulks) drives demand for smaller dry bulk vessels.  Accordingly, charter rates and vessel values for those vessels are subject to less volatility.

Charter hire rates paid for dry bulk vessels are primarily a function of the underlying balance between vessel supply and demand, although at times other factors may play a role.  Furthermore, the pattern seen in charter rates is broadly mirrored across the different charter types and the different dry bulk vessel categories.  However, because demand for larger dry bulk vessels is affected by the volume and pattern of trade in a relatively small number of commodities, charter hire rates (and vessel values) of larger ships tend to be more volatile than those for smaller vessels.

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In the time charter market, rates vary depending on the length of the charter period and vessel specific factors such as age, speed and fuel consumption.

In the voyage charter market, rates are influenced by cargo size, commodity, port dues and canal transit fees, as well as commencement and termination regions.  In general, a larger cargo size is quoted at a lower rate per ton than a smaller cargo size.  Routes with costly ports or canals generally command higher rates than routes with low port dues and no canals to transit.  Voyages with a load port within a region that includes ports where vessels usually discharge cargo or a discharge port within a region with ports where vessels load cargo also are generally quoted at lower rates, because such voyages generally increase vessel utilization by reducing the unloaded portion (or ballast leg) that is included in the calculation of the return charter to a loading area.

Within the dry bulk shipping industry, the charter hire rate references most likely to be monitored are the freight rate indices issued by the Baltic Exchange.  These references are based on actual charter hire rates under charters entered into by market participants as well as daily assessments provided to the Baltic Exchange by a panel of major shipbrokers.

Competition

We operate in markets that are highly competitive and based primarily on supply and demand.  We compete for charters on the basis of price, vessel location, size, age and condition of the vessel, as well as on its reputation.  Fidelity negotiates the terms of our charters (whether voyage charters, period time charters, bareboat charters or pools) based on market conditions. We currently compete primarily with other owners of dry bulk vessels, many of which may have more resources than us and may operate vessels that are newer, and therefore more attractive to charterers than vessels we may operate.  Ownership of dry bulk vessels is highly fragmented and is divided among publicly listed companies, state-controlled companies and independent dry bulk vessel owners.  We currently compete primarily with owners of dry bulk vessels in the Capesize class size.

Customers

Our customers include or have included national, regional and international companies.  Customers individually accounting for more than 10% of our revenues during the years ended December 31, 2023, 2022 and 2021 were:

Customer
  
2023
  
2022
  
2021
A
  
28%
  
24%
  
15%
B
  
25%
  
17%
  
23%
C
  
18%
  
18%
  
13%
D
  
12%
  
15%
  
11%
E
  
-
  
-
  
10%
Total
  
83%
  
74%
  
72%

Seasonality

Coal, iron ore and grains, which are the major bulks of the dry bulk shipping industry, are somewhat seasonal in nature. The energy markets primarily affect the demand for coal, with increases during hot summer periods when air conditioning and refrigeration require more electricity and towards the end of the calendar year in anticipation of the forthcoming winter period. The demand for iron ore tends to decline in the summer months because many of the major steel users, such as automobile makers, reduce their level of production significantly during the summer holidays. Grain trades are completely seasonal as they are driven by the harvest within a climate zone. Because three of the five largest grain producers (the United States of America, Canada and the European Union) are located in the northern hemisphere and the other two (Argentina and Australia) are located in the southern hemisphere, harvests occur throughout the year and grains transportation requires dry bulk shipping accordingly.

Our ESG Initiatives

Environmental

We comply with all applicable environmental regulations in a timely and efficient manner, and we implement measures to further reduce our carbon footprint, improve our environmental performance and protect the marine environment. We continuously monitor the performance of our vessels through remote performance monitoring systems and advanced data management systems and take action to improve the energy efficiency of our fleet both operationally and technically, in view of the greenhouse gas (GHG) strategy set for 2030 and 2050 by the IMO, the United Nations agency for maritime safety and the prevention of pollution by vessels.

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Nine of our vessels are retrofitted with Exhaust Gas Cleaning Systems (“EGCS”) in order to comply with emissions standards, titled IMO-2020, set by the IMO.
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We participate in the Poseidon Principles, which establish a framework for assessing and disclosing the climate alignment of ship finance portfolios and are consistent with the policies and ambitions of the IMO to reduce shipping’s total annual GHG emissions by at least 40% by 2030.
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We collaborate with our charterers within the scope of the Sea Cargo Charter, providing them with our vessel data to enable them to assess and report on the carbon intensity of the chartering activities of these vessels.
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We have engaged and actively participate in partnerships and alliances that promote sustainability in the maritime sector, including emission control and other environmental initiatives, such as the Getting to Zero Coalition, the Hellenic Decarbonization committee of RINA Classification Society and the Hellenic Marine Environment Protection Association.
•
We are active participants in several projects for the development and/or deployment of new green technologies and alternative fuels, including with respect to:

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the adoption of various latest technology voyage optimization platforms which aim to reduce fuel consumption and therefore our fleet’s CO2 footprint;

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the installation of energy-saving devices, such as propeller ducts, propeller boss cap fins and variable frequency drives, which aim to reduce the required propulsion power and CO2 emissions of our vessels;

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piloting and evaluating latest technology anti-fouling paints and hull cleaning technologies to reduce hull resistance and improve vessel’s energy efficiency; and

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the techno-economic feasibility assessment of alternative fuels in shipping by executing multiple biofuel trials;
•
We accomplished a strategic partnership via the European Union funded SAFeCRAFT Project Consortium (“SAFeCRAFT”), a breakthrough initiative concerning the utilization of alternative fuels. SAFeCRAFT aims to demonstrate the safety and viability of Sustainable Alternative Fuels (“SAFs”) in seaborne transportation, accelerating the adoption of SAFs technologies. In particular:

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We will provide one of our existing, conventionally fueled Capesize vessels as the demonstrating vessel under SAFeCRAFT which will be retrofitted to utilize hydrogen (H2) as the main energy source for electric power generation. This system is also expected to cover a portion of the vessel’s propulsion requirements and, therefore, to reduce reliance on conventional fuels.

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We will oversee the feasibility study and the retrofitting of the equipment in cooperation with Hydrus Engineering S.A., American Bureau of Shipping, National Technical University of Athens, Motor Oil (Hellas) Corinth Refineries S.A., University of Patras, Dresden University of Technology, RINA Services SPA, Pherousa Green Technologies AS, Foundation WEGEMT and University of Strathclyde, aiming to physically demonstrate this groundbreaking technology’s applicability to the existing maritime fleet.

Social

We are focused on continuously improving our social impact, including with respect to the health, safety and wellbeing of employees, both on board and ashore, to operational excellence, and to community support. We are dedicated to providing equal employment opportunities and treating our people fairly without regard to race, color, religious beliefs, age, sex, or any other classification.
•
We maintain high employee retention rates both on board and ashore and work to facilitate the professional development, continuous training and career advancement of our people.
•
We have an annual contract with an international organization covering 24/7 all seamen onboard the vessels medically and psychologically.
•
We initiated semi-annual crewing conferences to meet and greet with your seafarers with the aim to foster a sense of community, address concerns, and ensure effective communication between the management and the crew.
•
Our community investment activities focus on, but are not limited to, supporting vulnerable groups and youth education in Greece.

Governance

We apply corporate governance best practices, adhere to high ethical principles and ensure the high commercial performance of our fleet.
•
The Company is governed by a diverse and experienced, majority independent Board of Directors.
•
We have a transparent Code of Business Conduct & Ethics and Anti-Fraud Policy in place.

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•
We implement strong internal controls structured to ensure robust risk management.
•
We continuously cultivate an open reporting culture with respect to any violations of the Code of Ethics.
•
During 2022, we established a Sustainability Committee at Board level to guide and support the company’s ESG strategy.
•
Our Company uses advanced Enterprise Resource Planning and Business Intelligence systems to streamline operations and facilitate effective decision-making. We continuously upgrade and enhance our cybersecurity systems, processes, and policies to protect our company from cyber risks, both in the office and on our vessels.

Environmental and Other Regulations

Government regulation and laws significantly affect the ownership and operation of our fleet. We are subject to international conventions and treaties, national, state and local laws and regulations in force in the countries in which our vessels may operate or are registered relating to safety and health and environmental protection including the storage, handling, emission, transportation and discharge of hazardous and non-hazardous materials, and the remediation of contamination and liability for damage to natural resources. Compliance with such laws, regulations and other requirements entails significant expense, including vessel modifications and implementation of certain operating procedures.

A variety of government and private entities subject our vessels to both scheduled and unscheduled inspections. These entities include the local port authorities (applicable national authorities such as the USCG, harbor master or equivalent), classification societies, flag state administrations (countries of registry), terminal operators and charterers. Certain of these entities require us to obtain permits, licenses, certificates and other authorizations for the operation of our vessels. Failure to maintain necessary permits or approvals could require us to incur substantial costs or result in the temporary suspension of the operation of one or more of our vessels.

Increasing environmental concerns have created a demand for vessels that conform to stricter environmental standards. We are required to maintain operating standards for all of our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with United States and international regulations. We believe that the operation of our vessels is in substantial compliance with applicable environmental laws and regulations and that our vessels have all material permits, licenses, certificates or other authorizations necessary for the conduct of our operations. However, because such laws and regulations frequently change and may impose increasingly stricter requirements, we cannot predict the ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of our vessels. In addition, a future serious marine incident that causes significant adverse environmental impact could result in additional legislation or regulation that could negatively affect our profitability.

International Maritime Organization

The IMO, the United Nations agency for maritime safety and the prevention of pollution by vessels, has adopted the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto, collectively referred to as MARPOL 73/78 and herein as MARPOL, the International Convention for the Safety of Life at Sea of 1974, or SOLAS Convention, the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, or STCW, and the International Convention on Load Lines of 1966, or LL Convention. MARPOL establishes environmental standards relating to oil leakage or spilling, garbage management, sewage, air emissions, the handling and disposal of noxious liquids and the handling of harmful substances in packaged forms.  MARPOL is applicable to dry bulk, tanker and LNG carriers, among other vessels, and is broken into six Annexes, each of which regulates a different source of pollution. Annex I relates to oil leakage or spilling; Annexes II and III relate to harmful substances carried in bulk in liquid or in packaged form, respectively; Annexes IV and V relate to sewage and garbage management, respectively; and Annex VI, lastly, relates to air emissions. Annex VI was separately adopted by the IMO in September of 1997.

In 2013, the IMO’s Marine Environmental Protection Committee, or the MEPC, adopted a resolution amending MARPOL Annex I Condition Assessment Scheme, or CAS. These amendments became effective on October 1, 2014 and require compliance with the 2011 International Code on the Enhanced Programme of Inspections during Surveys of Bulk Carriers and Oil Tankers, or ESP Code, which provides for enhanced inspection programs. We may need to make certain financial expenditures to comply with these amendments.

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Air Emissions

In September of 1997, the IMO adopted Annex VI to MARPOL to address air pollution from vessels. Effective May 2005, Annex VI sets limits on sulfur oxide and nitrogen oxide emissions from all commercial vessel exhausts and prohibits “deliberate emissions” of ozone depleting substances (such as halons and chlorofluorocarbons), emissions of volatile compounds from cargo tanks, and the shipboard incineration of specific substances. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent controls on sulfur emissions, as explained below.  Emissions of “volatile organic compounds” from certain vessels, and the shipboard incineration (from incinerators installed after January 1, 2000) of certain substances (such as polychlorinated biphenyls, or PCBs) are also prohibited.  We believe that all our vessels are currently compliant in all material respects with these regulations.

The MEPC adopted amendments to Annex VI regarding emissions of sulfur oxide, nitrogen oxide, particulate matter and ozone depleting substances, which entered into force on July 1, 2010.  The amended Annex VI seeks to further reduce air pollution by, among other things, implementing a progressive reduction of the amount of sulfur contained in any fuel oil used on board ships. Effective January 1, 2020, there has been a global limit of 0.5% m/m sulfur oxide emissions (reduced from 3.50%).  This limitation can be met by using low-sulfur compliant fuel oil, alternative fuels, or certain exhaust gas cleaning systems.  Ships are required to obtain bunker delivery notes and International Air Pollution Prevention, or IAPP, Certificates from their flag states that specify sulfur content.  Additionally, at MEPC 73, amendments to Annex VI to prohibit the carriage of bunkers above 0.5% sulfur on ships became effective on March 1, 2020.  Additional amendments to Annex VI revising, among other terms, the definition of “Sulphur content of fuel oil” and “low-flashpoint fuel” and pertaining to the sampling and testing of onboard fuel oil, became effective in April 2022. Additional amendments to Annex VI, requiring bunker delivery notes to include a flashpoint of fuel oil or a statement that the flashpoint has been measured at or above 70°C as mandatory information, will become effective May 1, 2024.  These regulations subject ocean-going vessels to stringent emissions controls and may cause us to incur substantial costs.

MEPC 77 adopted a non-binding resolution which urges Member States and ship operators to voluntarily use distillate or other cleaner alternative fuels or methods of propulsion that are safe for ships and could contribute to the reduction of black carbon emissions from ships when operating in or near the Arctic.

Sulfur content standards are even stricter within certain “Emission Control Areas,” or ECAs. As of January 1, 2015, ships operating within an ECA were not permitted to use fuel with sulfur content in excess of 0.1%. Amended Annex VI establishes procedures for designating new ECAs. Currently, the IMO has designated four ECAs, including specified portions of the Baltic Sea area, North Sea area, North American area and United States Caribbean Sea area.  At the MEPC78, the IMO approved a proposal for a new ECA in the Mediterranean Sea as a whole to apply from July 1, 2025 such that the sulfur content of marine fuels does not exceed 0.1%. Ocean-going vessels in these areas are subject to stringent emission controls and may cause us to incur additional costs. If other ECAs are approved by the IMO, or other new or more stringent requirements relating to emissions from marine diesel engines or port operations by vessels are adopted by the U.S. Environmental Protection Agency, or EPA, or the states where we operate, compliance with these regulations could entail significant capital expenditures or otherwise increase the costs of our operations.

MEPC 79 adopted amendments to Annex VI on the reporting of mandatory values related to the implementation of the IMO short-term GHG reduction measure, including attained EEXI, CII and rating values to the IMO DCS, which will become effective May 1, 2024. MEPC 80 adopted the 2023 IMO Strategy on Reduction of GHG Emissions from Ships with enhanced targets to mitigate harmful emissions. The revised IMO GHG Strategy comprises a common ambition to ensure an uptake of alternative zero and near-zero GHG fuels by 2030 and to achieve net-zero emissions from international shipping by 2050. MEPC 81 will take place in spring 2024 in which the IMO will decide on the market-based mechanism to reach the emission reduction targets– either through a global emissions trading scheme for shipping or a global carbon levy.

Amended Annex VI also established new tiers of stringent nitrogen oxide emissions standards for marine diesel engines, depending on their date of installation. Now Annex VI provides for a three-tier reduction in NOx emissions from marine diesel engines, with the final tier (or Tier III) to apply to engines installed on vessels constructed on or after January 1, 2016 and which operate in the North American ECA or the U.S. Caribbean Sea ECA as well as ECAs designated in the future by the IMO. At MEPC 70 and MEPC 71, the MEPC approved the North Sea and Baltic Sea as ECAs for nitrogen oxide for ships built after January 1, 2021. The EPA promulgated equivalent (and in some senses stricter) emissions standards in late 2009. Additionally, amendments to Annex II, which strengthen discharge requirements for cargo residues and tank washings in specified sea areas (including North West European waters, Baltic Sea area, Western European waters and Norwegian Sea), came into effect in January 2021.

Regulation 22A of MARPOL Annex VI became effective as of March 1, 2018 and requires ships above 5,000 gross tonnage to collect and report annual data on fuel oil consumption to an IMO database, with the first year of data collection commencing on January 1, 2019.  The IMO used such data as the first step in its roadmap (through 2023) for developing its strategy to reduce greenhouse gas emissions from ships, as discussed further below. Amendments to Annex VI requiring bunker delivery notes to include a flashpoint of fuel oil or a statement that the flashpoint has been measured at or above 70°C as mandatory information, will become effective May 1, 2024. Pursuant to MPC 80, in July 2023, the IMO adopted the 2023 IMO Strategy on Reduction of GHG Emissions from Ships, which identifies a number of levels of ambition, including (1) decreasing the carbon intensity from ships through implementation of further phases of energy efficiency for new ships; (2) reducing carbon dioxide emissions per transport work, as an average across international shipping, by at least 40% by 2030; and (3) pursuing net-zero GHG emissions by or around 2050.

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MARPOL mandates certain measures relating to energy efficiency for ships. All ships are now required to develop and implement Ship Energy Efficiency Management Plans, or SEEMPS, and new ships must be designed in compliance with minimum energy efficiency levels per capacity mile as defined by the Energy Efficiency Design Index, or EEDI.  Under these measures, by 2025, all new ships built will be 30% more energy efficient than those built in 2014.

We may incur costs to comply with these revised standards. Additional or new conventions, laws and regulations, including those from states of the United States, may be adopted that could require the installation of expensive emission control systems and could adversely affect our business, results of operations, cash flows and financial condition.

Safety Management System Requirements

The SOLAS Convention was amended to address the safe manning of vessels and emergency training drills.  The Convention of Limitation of Liability for Maritime Claims, or the LLMC, sets limitations of liability for a loss of life or personal injury claim or a property claim against ship owners. We believe that our vessels are in substantial compliance with SOLAS and LLMC standards.

Under Chapter IX of the SOLAS Convention, or the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention, or the ISM Code, our operations are also subject to environmental standards and requirements. The ISM Code requires the party with operational control of a vessel to develop an extensive safety management system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vessels safely and describing procedures for responding to emergencies. We rely upon the safety management system that we and our technical management team have developed for compliance with the ISM Code. The failure of a vessel owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease available insurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports.

The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel’s management with the ISM Code requirements for a safety management system. No vessel can obtain a safety management certificate unless its manager has been awarded a document of compliance, issued by each flag state, under the ISM Code.  We have obtained applicable documents of compliance for our offices and safety management certificates for all of our vessels for which the certificates are required by the IMO. The document of compliance and safety management certificate are renewed as required.

Effective July 1, 2024, amendments to the International Code on the Enhanced Programme of Inspections during Surveys of Bulk Carriers and Oil Tankers, 2011 will become effective, addressing inconsistencies on examination of ballast tanks at annual surveys for bulk carriers and oil tankers.

Amendments to the SOLAS Convention Chapter VII apply to vessels transporting dangerous goods and require those vessels be in compliance with the International Maritime Dangerous Goods Code, or IMDG Code. Effective January 1, 2018, the IMDG Code includes (1) updates to the provisions for radioactive material, reflecting the latest provisions from the International Atomic Energy Agency, (2) new marking, packing and classification requirements for dangerous goods, and (3) new mandatory training requirements. Amendments to the IMDG Code relating to segregation requirements for certain substances, and classification and transport of carbon, following incidents involving the spontaneous ignition of charcoal, came into effect in June 2022. Updates to the IMDG Code, in line with the updates to the United Nations Recommendations on the Transport of Dangerous Goods, which set the recommendations for all transport modes, became effective January 1, 2024. Effective July 1, 2024, amendments to the International Code on the Enhanced Programme of Inspections during Surveys of Bulk Carriers and Oil Tankers, 2011 will become effective, addressing inconsistencies on examination of ballast tanks at annual surveys for bulk carriers and oil tankers.

Amendments to SOLAS chapter II-2, intended to prevent the supply of oil fuel not complying SOLAS flashpoint requirements, requiring that ships carrying oil fuel must, prior to bunkering, be provided with a declaration certifying that the oil fuel supplied is in conformity with regulation SOLAS II-2/4.2.1, will enter into effect January 1, 2026.

Regulation II-1/3-10 of the SOLAS Convention governs ship construction and stipulates that ships over 150 meters in length must have adequate strength, integrity, and stability to minimize risk of loss or pollution. Goal-based standards amendments in SOLAS regulation II-1/3-10 entered into force in 2012, and from July 1, 2016 with respect to new oil tankers and bulk carriers. Regulation II-1/3-10 requires that all oil tankers and bulk carriers of 150 meters in length and above, for which the building contract is placed on or after July 1, 2016, satisfy applicable structural requirements conforming to the functional requirements of the International Goal-based Ship Construction Standards for Bulk Carriers and Oil Tankers, or GBS Standards.

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The IMO has also adopted the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, or STCW.  As of February 2017, all seafarers are required to meet the STCW standards and be in possession of a valid STCW certificate.  Flag states that have ratified SOLAS and STCW generally employ the classification societies, which have incorporated SOLAS and STCW requirements into their class rules, to undertake surveys to confirm compliance.

Actions by the IMO’s Maritime Safety Committee and United States agencies indicate that cybersecurity regulations for the maritime industry are likely to be further developed in the near future in an attempt to combat cybersecurity threats. For example, effective January 2021, cyber-risk management systems must be incorporated by shipowners and managers. This might cause companies to create additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures.  The impact of such regulations is hard to predict at this time.

Pollution Control and Liability Requirements

The IMO has negotiated international conventions that impose liability for pollution in international waters and the territorial waters of the signatories to such conventions. For example, the IMO adopted the International Convention for the Control and Management of Ships’ Ballast Water and Sediments, or the BWM Convention, in 2004. The BWM Convention entered into force globally on September 9, 2017.  The BWM Convention requires ships to manage their ballast water to remove, render harmless, or avoid the uptake or discharge of new or invasive aquatic organisms and pathogens within ballast water and sediments.  The BWM Convention’s implementing regulations call for a phased introduction of mandatory ballast water exchange requirements, to be replaced in time with mandatory concentration limits, and require all ships to carry a ballast water record book and an international ballast water management certificate.

Specifically, ships over 400 gross tons generally must comply with a “D-1 standard,” requiring the exchange of ballast water only in open seas and away from coastal waters.  The “D-2 standard” specifies the maximum amount of viable organisms allowed to be discharged, and compliance dates vary depending on the IOPP renewal dates. For most ships, compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted organisms.  Ballast Water Management systems (or BWMS), which include systems that make use of chemical, biocides, organisms or biological mechanisms, or which alter the chemical or physical characteristics of the Ballast Water, must be approved in accordance with IMO Guidelines (Regulation D-3).  Pursuant to the BWM Convention amendments that entered into force in October 2019, BWMS installed on or after October 28, 2020 shall be approved in accordance with BWMS Code, while BWMS installed before October 23, 2020 must be approved taking into account guidelines developed by the IMO or the BWMS Code. Costs of compliance with these regulations may be substantial. The cost of compliance could increase for ocean carriers and may have a material effect on our operations. However, many countries already regulate the discharge of ballast water carried by vessels from country to country to prevent the introduction of invasive and harmful species via such discharges. The U.S., for example, requires vessels entering its waters from another country to conduct mid-ocean ballast exchange, or undertake some alternate measure, and to comply with certain reporting requirements. Amendments to the BWM Convention concerning commissioning testing of BWMS became effective in June 2022.

The IMO also adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage, or the Bunker Convention, to impose strict liability on ship owners (including the registered owner, bareboat charterer, manager or operator) for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The Bunker Convention requires registered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime (but not exceeding the amount calculated in accordance with the LLMC).  With respect to non-ratifying states, liability for spills or releases of oil carried as fuel in ship’s bunkers typically is determined by the national or other domestic laws in the jurisdiction where the events or damages occur.

Ships are required to maintain a certificate attesting that they maintain adequate insurance to cover an incident. In jurisdictions such as the United States where the Bunker Convention has not been adopted, various legislative schemes or common law govern, and liability is imposed either on the basis of fault or on a strict-liability basis.

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Anti‑Fouling Requirements

In 2001, the IMO adopted the International Convention on the Control of Harmful Antifouling Systems on Ships, or the “Antifouling Convention.” The Antifouling Convention entered into force in September 2008 and prohibits the use of organotin compound coatings to prevent the attachment of mollusks and other sea life to the hulls of vessels. Vessels of over 400 gross tons engaged in international voyages will also be required to undergo an initial survey before the vessel is put into service or before an International Antifouling System Certificate is issued for the first time; and subsequent surveys when the antifouling systems are altered or replaced. In 2023, amendments to the Anti-fouling Convention came into effect which include controls on the biocide cybutryne; ships shall not apply or re-apply anti-fouling systems containing this substance from January 1, 2023. We have obtained Antifouling System Certificates for all of our vessels that are subject to the Antifouling Convention.

Compliance Enforcement

Noncompliance with the ISM Code or other IMO regulations may subject the ship owner or bareboat charterer to increased liability, may lead to decreases in available insurance coverage for affected vessels and may result in the denial of access to, or detention in, some ports. The USCG and European Union authorities have indicated that vessels not in compliance with the ISM Code by applicable deadlines will be prohibited from trading in U.S. and European Union ports, respectively.  As of the date of this report, each of our vessels is ISM Code certified.  However, there can be no assurance that such certificates will be maintained in the future.  The IMO continues to review and introduce new regulations. It is impossible to predict what additional regulations, if any, may be passed by the IMO and what effect, if any, such regulations might have on our operations.

United States Regulations

The U.S. Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability Act

The U.S. Oil Pollution Act of 1990, or OPA, established an extensive regulatory and liability regime for the protection and clean-up of the environment from oil spills. OPA affects all “owners and operators” whose vessels trade or operate within the U.S., its territories and possessions or whose vessels operate in U.S. waters, which includes the U.S.’s territorial sea and its 200 nautical mile exclusive economic zone around the U.S.  The U.S. has also enacted the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, which applies to the discharge of hazardous substances other than oil, except in limited circumstances, whether on land or at sea.  OPA and CERCLA both define “owner and operator” in the case of a vessel as any person owning, operating or chartering by demise, the vessel.  Both OPA and CERCLA impact our operations.

Under OPA, vessel owners and operators are “responsible parties” and are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges of oil from their vessels, including bunkers (fuel).  OPA defines these other damages broadly to include:

(i)      injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;

(ii)     injury to, or economic losses resulting from, the destruction of real and personal property;

(iii)    loss of subsistence use of natural resources that are injured, destroyed or lost;

(iv)    net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;

(v)     lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and

(vi)    net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources.

OPA contains statutory caps on liability and damages; such caps do not apply to direct clean-up costs. On December 23, 2022, the USCG adjusted the limits of OPA liability for non-tank vessels, edible oil tank vessels, and any oil spill response vessels, to the greater of $1,300 per gross ton or $1,076,000 (subject to periodic adjustment for inflation). These limits of liability do not apply if an incident was proximately caused by the violation of an applicable U.S. federal safety, construction or operating regulation by a responsible party (or its agent, employee or a person acting pursuant to a contractual relationship), or a responsible party’s gross negligence or willful misconduct. The limitation on liability similarly does not apply if the responsible party fails or refuses to (i) report the incident where the responsible party knows or has reason to know of the incident; (ii) reasonably cooperate and assist as requested in connection with oil removal activities; or (iii) without sufficient cause, comply with an order issued under the Federal Water Pollution Act (Section 311 (c), (e)) or the Intervention on the High Seas Act.

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CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for clean-up, removal and remedial costs, as well as damages for injury to, or destruction or loss of, natural resources, including the reasonable costs associated with assessing the same, and health assessments or health effects studies. There is no liability if the discharge of a hazardous substance results solely from the act or omission of a third party, an act of God or an act of war. Liability under CERCLA is limited to the greater of $300 per gross ton or $5.0 million for vessels carrying a hazardous substance as cargo and the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering the responsible person liable for the total cost of response and damages) if the release or threat of release of a hazardous substance resulted from willful misconduct or negligence, or the primary cause of the release was a violation of applicable safety, construction or operating standards or regulations.  The limitation on liability also does not apply if the responsible person fails or refused to provide all reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject to OPA.

OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort law.  OPA and CERCLA both require owners and operators of vessels to establish and maintain with the USCG evidence of financial responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject. Vessel owners and operators may satisfy their financial responsibility obligations by providing a proof of insurance, a surety bond, qualification as a self-insurer or a guarantee. We comply and plan to comply going forward with the USCG’s financial responsibility regulations by providing applicable certificates of financial responsibility.

The 2010 Deepwater Horizon oil spill in the Gulf of Mexico resulted in additional regulatory initiatives or statutes, including higher liability caps under OPA, new regulations regarding offshore oil and gas drilling, and a pilot inspection program for offshore facilities.  However, several of these initiatives and regulations have been or may be revised.  For example, the U.S. Bureau of Safety and Environmental Enforcement’s, or BSEE, revised Production Safety Systems Rule, or PSSR, effective December 27, 2018, modified and relaxed certain environmental and safety protections under the 2016 PSSR.  Additionally, in August 2023, the BSEE released a final Well Control Rule, which strengthens testing and performance requirements, and may affect offshore drilling operations. Compliance with any new requirements of OPA and other environmental laws, and future legislation or regulations applicable to the operation of our vessels could negatively impact the cost of our operations and adversely affect our business.

OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, provided they accept, at a minimum, the levels of liability established under OPA and some states have enacted legislation providing for unlimited liability for oil spills.  Many U.S. states that border a navigable waterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a release of a hazardous substance.  These laws may be more stringent than U.S. federal law.  Moreover, some states have enacted legislation providing for unlimited liability for discharge of pollutants within their waters, although in some cases, states which have enacted this type of legislation have not yet issued implementing regulations defining vessel owners’ responsibilities under these laws. The Company intends to comply with all applicable state regulations in the ports where the Company’s vessels call.

We currently maintain pollution liability coverage insurance in the amount of $1 billion per incident for each of our vessels. If the damages from a catastrophic spill were to exceed our insurance coverage, that could have an adverse effect on our business and results of operation.

Other United States Environmental Initiatives

The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990), or CAA, requires the EPA to promulgate standards applicable to emissions of volatile organic compounds and other air contaminants.  The CAA requires states to adopt State Implementation Plans, or SIPs, some of which regulate emissions resulting from vessel loading and unloading operations which may affect our vessels.

The U.S. Clean Water Act, or CWA, prohibits the discharge of oil, hazardous substances and ballast water in U.S. navigable waters unless authorized by a duly issued permit or exemption, and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA and CERCLA. In 2015, the EPA expanded the definition of “waters of the United States,” or WOTUS, thereby expanding federal authority under the CWA. On December 30, 2022, the EPA and U.S. Army Corps of Engineers announced the final revised WOTUS rule, which was published on January 18, 2023, In August 2023, the EPA and Department of the Army issued a final rule to amend the revised WOTUS definition to conform the definition of WOTUS to the U.S. Supreme Court’s interpretation of the Clean Water Act in its decision dated May 25, 2023.

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The final rule became effective September 8, 2023 and operates to limit the Clean Water Act The EPA and the USCG have also enacted rules relating to ballast water discharge, compliance with which requires the installation of equipment on our vessels to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial costs, and/or otherwise restrict our vessels from entering U.S. Waters. The EPA will regulate these ballast water discharges and other discharges incidental to the normal operation of certain vessels within United States waters pursuant to the Vessel Incidental Discharge Act, or VIDA, which was signed into law on December 4, 2018, and requires that the U.S. Coast Guard develop implementation, compliance, and enforcement regulations regarding ballast water. It intends to replace the VGP scheme and streamline the patchwork of federal, state, and local requirements for the commercial vessel community. The US Environmental Protection Agency, or EPA, has indicated that new federal discharge standards for vessels may be published in autumn 2024. In the meantime, the agency has seemingly strengthened its inspection and enforcement efforts to ensure compliance with the extended VGP scheme and warns that non-compliance can result in significant penalties. The VIDA gave the EPA two years to develop new national discharge standards for vessels and the U.S/ Coast Guard another two years to develop regulations and best management practices to implement and enforce those standards. VIDA also specifies that the provisions of the VGP will continue to apply until EPA and the U.S. Coast Guard publish their final regulations, regardless of how long that takes, and that the permit cannot be modified during that time. On October 26, 2020, the EPA published a Notice of Proposed rulemaking for Vessel Incidental Discharge National Standards of Performance under VIDA, and in November 2020, held virtual public meetings. On October 18, 2023, the EPA published a Supplemental Notice to the Vessel Incidental Discharge National Standards of Performance, which shares new ballast water information that the EPA received from the USCG. Comments to the Supplemental Notice were due by December 18, 2023. Under VIDA, all provisions of the VGP 2018 and the USCG ballast water regulations remain in force and effect as currently written until the EPA publishes standard. The new regulations could require the installation of new equipment. Several U.S. states have added specific requirements to the Vessel General Permit and, in some cases, may require vessels to install ballast water treatment technology to meet biological performance standards. In addition, several U.S. states have added specific requirements to the VGP, including submission of a Notice of Intent, or NOI, or retention of a PARI form and submission of annual reports. Although EPA did issue a notice of proposed rulemaking in October 2020, a final rule on new discharge standards has still not been promulgated – which also means that a complete replacement scheme for the VGP is still some time away. A recent announcement on the EPA indicates that a final rule on the discharge standards may be ready in the autumn of 2024. Thus, if the USCG spends the full two years to finalize the corresponding enforcement standards, the current 2013 VGP scheme will remain in force until 2026. This rule changes may have financial impact on our vessels and may result in our vessels being banded from calling in US in case compliance issues arise.

European Union Regulations

In October 2009, the European Union amended a directive to impose criminal sanctions for illicit ship-source discharges of polluting substances, including minor discharges, if committed with intent, recklessly or with serious negligence and the discharges individually or in the aggregate result in deterioration of the quality of water. Aiding and abetting the discharge of a polluting substance may also lead to criminal penalties. The directive applies to all types of vessels, irrespective of their flag, but certain exceptions apply to warships or where human safety or that of the ship is in danger. Criminal liability for pollution may result in substantial penalties or fines and increased civil liability claims.  Regulation (EU) 2015/757 of the European Parliament and of the Council of April 29,2015 (amended by Regulation (EU) 2016/2071 with respect to methods of calculating, inter alia, emission and consumption) governs the monitoring, reporting and verification of carbon dioxide emissions from maritime transport, and, subject to some exclusions, requires companies with ships over 5,000 gross tonnage to monitor and report carbon dioxide emissions annually, which may cause us to incur additional expenses. As of January 2019, large ships calling at EU ports have been required to collect and publish data on carbon dioxide emissions and other information. The system entered into force on March 1, 2018. July 2020 saw the European Parliament’s Committee on Environment, Public Health and Food Safety vote in favor of the inclusion of vessels of 5,000 gross tons and above in the EU Emissions Trading System (in addition to voting for a revision to the monitoring, reporting and verification of CO2 emissions). In September 2020, the European Parliament adopted the proposal from the European Commission to amend the regulation on monitoring carbon dioxide emissions from maritime transport.

On July 14, 2021, the European Commission published a package of draft proposals as part of its ‘Fit for 55’ environmental legislative agenda and as part of the wider EU Green Deal growth strategy (the “Proposals”). There are two key initiatives relevant to maritime arising from the Proposals: (a) a bespoke emissions trading scheme for the maritime sector (ETS) which commenced in 2024 and which applies to all ships above a gross tonnage of 5,000; and (b) a FuelEU draft regulation which seeks to require all ships above a gross tonnage of 5,000 to carry on board a ‘FuelEU certificate of compliance’ from 30 June 2025 as evidence of compliance with the limits on the greenhouse gas intensity of the energy used on-board by a ship and with the requirements on the use of on-shore power supply (OPS) at berth. ETS was agreed in December 2022 and FuelEU was passed into law on July 25, 2023 and will apply from January 2025. More specifically, ETS is to apply gradually over the period from 2024 to 2026. In 2025 shipping companies would have to surrender 40% of ETS allowances for 2024 emissions; in 2026 shipping companies would have to surrender 70% of ETS allowances for the 2025 emissions and 100% in 2027 for 2026 emissions. The cap under the ETS would be set by taking into account EU MRV system emissions data for the years 2018 and 2019, adjusted, from year 2021 and is to capture 100% of the emissions from intra-EU maritime voyages; 100% of emissions from ships at berth in EU ports; and 50% of emissions from voyages which start or end at EU ports (but the other destination is outside the EU). More recent proposed amendments signal that 100% of non-EU emissions may be caught if the IMO does not introduce a global market-based measure by 2028.  All maritime allowances will be auctioned and there will be no free allocation for the shipping sector. From a risk management perspective, new systems, including, personnel, data management systems, costs recovery mechanisms, revised service agreement terms and emissions reporting procedures will have to be put in place, at significant cost, to prepare for and manage the administrative aspect of ETS compliance.

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Responsible recycling and scrapping of ships are becoming increasingly important issues for shipowners and charterers alike as the industry strives to replace old ships with cleaner, more energy efficient models. The recognition of the need to impose recycling obligations on the shipping industry is not new. In 2009, the IMO oversaw the creation of the Hong Kong Ship Recycling Convention (the “Hong Kong Convention”), which sets standards for ship recycling. Concerned at the lack of progress in satisfying the conditions needed to bring the Hong Kong Convention into force, the EU published its own Ship Recycling Regulation 1257/2013 (SRR) in 2013, with a view to facilitating early ratification of the Hong Kong Convention both within the EU and in other countries outside the EU. The 2013 regulations are vital to responsible ship recycling in the EU. SRR requires that, from 31 December 2020, all existing ships sailing under the flag of EU member states and non-EU flagged ships calling at an EU port or anchorage must carry on-board an Inventory of Hazardous Materials (IHM) with a certificate or statement of compliance, as appropriate. For EU-flagged vessels, a certificate (either an Inventory Certificate or Ready for Recycling Certificate) will be necessary, while non-EU flagged vessels will need a Statement of Compliance. Now that the Hong Kong Convention has been ratified and will enter into force on 26 June 2025, it is expected the EU Ship Recycling Regulation will be reviewed in light of this.

The European Union has adopted several regulations and directives requiring, among other things, more frequent inspections of high-risk ships, as determined by type, age, and flag as well as the number of times the ship has been detained. The European Union also adopted and extended a ban on substandard ships and enacted a minimum ban period and a definitive ban for repeated offenses. The regulation also provided the European Union with greater authority and control over classification societies, by imposing more requirements on classification societies and providing for fines or penalty payments for organizations that failed to comply. Furthermore, the EU has implemented regulations requiring vessels to use reduced sulfur content fuel for their main and auxiliary engines. Since January 1, 2015, vessels have been required to burn fuel with sulfur content not exceeding 0.1% while within EU member states’ territorial seas, exclusive economic zones and pollution control zones that are included in “SOx Emission Control Areas.” EU Directive (EU) 2016/802 establishes limits on the maximum sulfur content of gas oils and heavy fuel oil and contains fuel-specific requirements for ships calling at EU ports.

EU Directive 2004/35/CE (as amended) regarding the prevention and remedying of environmental damage addresses liability for environmental damage (including damage to water, land, protected species and habitats) on the basis of the “polluter pays” principle. Operators whose activities caused the environmental damage are liable for the damage (subject to certain exceptions). With regard to specified activities causing environmental damage, operators are strictly liable. The directive applies where damage has already occurred and where there is an imminent threat of damage. The directive requires preventative and remedial actions, and that operators report environmental damage or an imminent threat of such damage.

International Labor Organization

The International Labor Organization, or the ILO, is a specialized agency of the UN that has adopted the Maritime Labor Convention 2006, or MLC 2006. A Maritime Labor Certificate and a Declaration of Maritime Labor Compliance is required to ensure compliance with the MLC 2006 for all ships above 500 gross tons in international trade. We believe that all our vessels are in substantial compliance with and are certified to meet MLC 2006.

Greenhouse Gas Regulation

Currently, the emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the United Nations Framework Convention on Climate Change (this task having been delegated to the IMO), which entered into force in 2005 and pursuant to which adopting countries have been required to implement national programs to reduce greenhouse gas emissions with targets extended through 2020. In December 2009, more than 27 nations, including the U.S. and China, signed the Copenhagen Accord, which includes a non-binding commitment to reduce greenhouse gas emissions.  The 2015 United Nations Climate Change Conference in Paris resulted in the Paris Agreement, which entered into force on November 4, 2016 and does not directly limit greenhouse gas emissions from ships.  The United States rejoined the Paris Agreement in February 2021.

At MEPC 70 and MEPC 71, a draft outline of the structure of the initial strategy for developing a comprehensive IMO strategy on reduction of greenhouse gas emissions from ships was approved. In accordance with this roadmap, and as detailed above, pursuant to MPC 80, in July 2023, IMO adopted the 2023 IMO Strategy on Reduction of GHG Emissions from Ships, which identifies a number of “levels of ambition”, including (1) decreasing the carbon intensity from ships through the implementation of further phases of EEDI for new ships; (2) reducing carbon dioxide emissions per transport work, as an average across international shipping, by at least 40% by 2030, and (3) pursuing net-zero GHG emission by or around 2050. These regulations could cause us to incur additional substantial expenses.

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At MEPC 70 in October 2016, a mandatory data collection system (DCS) was adopted which requires ships above 5,000 gross tons to report consumption data for fuel oil, hours under way and distance travelled. Unlike the EU MRV (see below), the IMO DCS covers any maritime activity carried out by ships, including dredging, pipeline laying, ice-breaking, fish-catching and off-shore installations. The SEEMPs of all ships covered by the IMO DCS must include a description of the methodology for data collection and reporting. After each calendar year, the aggregated data are reported to the flag state. If the data have been reported in accordance with the requirements, the flag state issues a statement of compliance to the ship. Flag states subsequently transfer this data to an IMO ship fuel oil consumption database, which is part of the Global Integrated Shipping Information System (GISIS) platform. IMO will then produce annual reports, summarizing the data collected. Thus, currently, data related to the GHG emissions of ships above 5,000 gross tons calling at ports in the European Economic Area (EEA) must be reported in two separate, but largely overlapping, systems: the EU MRV – which applies since 2018 – and the IMO DCS – which applies since 2019. The proposed revision of Regulation (EU) 2015/757 adopted on 4 February 2019 aims to align and facilitate the simultaneous implementation of the two systems however it is still not clear when the proposal will be adopted.

IMO’s MEPC 76 adopted amendments to MAPROL Annex VI that will require ships to reduce their greenhouse gas emissions. Effective from January 1, 2023, the Revised MARPOL Annex VI includes carbon intensity measures (requirements for ships to calculate their Energy Efficiency Existing Ship Index (EEXI) following technical means to improve their energy efficiency and to establish their annual operational carbon intensity indicator and rating). MEPC 76 also adopted guidelines to support implementation of the amendments.

MEPC 79 adopted amendments to Annex VI on the reporting of mandatory values related to the implementation of the IMO short-term GHG reduction measure, including attained EEXI, CII and rating values to the IMO DCS, which will become effective May 1, 2024. MEPC 80 adopted the 2023 IMO Strategy on Reduction of GHG Emissions from Ships with enhanced targets to mitigate harmful emissions. The revised IMO GHG Strategy comprises a common ambition to ensure an uptake of alternative zero and near-zero GHG fuels by 2030 and to achieve net-zero emissions from international shipping by 2050. MEPC 81 will take place in spring 2024 in which the IMO will decide on the market-based mechanism to reach the emission reduction targets– either through a global emissions trading scheme for shipping or a global carbon levy.

In 2021, the EU adopted a European Climate Law (Regulation (EU) 2021/1119), establishing the aim of reaching net zero greenhouse gas emissions in the EU by 2050, with an intermediate target of reducing greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. In July 2021, the European Commission launched the “Fit for 55” (described above) to support the climate policy agenda. As of January 2019, large ships calling at EU ports have been required to collect and publish data on carbon dioxide emissions and other information.

In the United States, the EPA issued a finding that greenhouse gases endanger the public health and safety, adopted regulations to limit greenhouse gas emissions from certain mobile sources, and proposed regulations to limit greenhouse gas emissions from large stationary sources. The EPA or individual U.S. states could enact environmental regulations that could negatively affect our operations. On November 2, 2021, the EPA issued a proposed rule under the CAA designed to reduce methane emissions from oil and gas sources. In November 2022, the EPA issued a supplemental proposal that would achieve more comprehensive emissions reductions and add proposed requirements for sources not previously covered.  The EPA held a public hearing in January 2023 on the proposal and, in December 2023, the EPA announced a final rule to reduce methane and other air pollutants from the oil and natural gas industry. The rule includes “Emissions Guidelines” for states to follow as they develop plans to limit methane emissions from existing sources.

Any passage of climate control legislation or other regulatory initiatives by the IMO, the EU, the U.S. or other countries where we operate, or any treaty adopted at the international level to succeed the Kyoto Protocol or Paris Agreement, that restricts emissions of greenhouse gases could require us to make significant expenditures which we cannot predict with certainty at this time. Even in the absence of climate control legislation, our business may be indirectly affected to the extent that climate change may result in sea level changes or certain weather events.

Vessel Security Regulations

Since the terrorist attacks of September 11, 2001 in the United States, there have been a variety of initiatives intended to enhance vessel security such as the U.S. Maritime Transportation Security Act of 2002, or MTSA. To implement certain portions of the MTSA, the USCG issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States and at certain ports and facilities, some of which are regulated by the EPA.

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Similarly, Chapter XI-2 of the SOLAS Convention imposes detailed security obligations on vessels and port authorities and mandates compliance with the International Ship and Port Facilities Security Code, or the ISPS Code. The ISPS Code is designed to enhance the security of ports and ships against terrorism. To trade internationally, a vessel must attain an International Ship Security Certificate, or ISSC, from a recognized security organization approved by the vessel’s flag state. Ships operating without a valid certificate may be detained, expelled from, or refused entry at port until they obtain an ISSC.  The various requirements, some of which are found in the SOLAS Convention, include, for example, on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship’s identity, position, course, speed and navigational status; on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore; the development of vessel security plans; ship identification number to be permanently marked on a vessel’s hull; a continuous synopsis record kept onboard showing a vessel’s history including the name of the ship, the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship’s identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and compliance with flag state security certification requirements.

The USCG regulations, intended to align with international maritime security standards, exempt non-U.S. vessels from MTSA vessel security measures, provided such vessels have on board a valid ISSC that attests to the vessel’s compliance with the SOLAS Convention security requirements and the ISPS Code. Future security measures could have a significant negative financial impact on us.  We intend to comply with the various security measures addressed by MTSA, the SOLAS Convention and the ISPS Code.

The cost of vessel security measures has also been affected by the escalation in the frequency of acts of piracy against ships, notably off the coast of Somalia, including the Gulf of Aden and Arabian Sea area.  Substantial loss of revenue and other costs may be incurred as a result of detention of a vessel or additional security measures, and the risk of uninsured losses could significantly and negatively affect our business. Costs may be incurred in taking additional security measures in accordance with Best Management Practices to Deter Piracy, notably those contained in the BMP5 industry standard.

European mandatory non-financial reporting regulations

On November 10, 2022, the EU Parliament adopted the Corporate Sustainability Reporting Directive (“CSRD”). EU member states have 18 months from July 6, 2024, to integrate it into national law. The CSRD will create new, detailed sustainability reporting requirements and will significantly expand the number of EU and non-EU companies subject to the EU sustainability reporting framework. The required disclosures will go beyond environmental and climate change reporting to include social and governance matters (for example, respect for employee and human rights, anti-corruption and bribery, corporate governance and diversity and inclusion). In addition, it will require disclosure regarding the due diligence processes implemented by a company in relation to sustainability matters and the actual and potential adverse sustainability impacts of an in-scope company’s operations and value chain. The CSRD will begin to apply on a phased basis starting from financial year 2024 through to 2028, applicable to large EU and non-EU undertakings with substantial presence in the EU, subject to certain financial and employee thresholds being met. New systems, including personnel, data management systems and reporting procedures will have to be put in place, at significant cost, to prepare for and manage the administrative aspect of CSRD compliance.

Inspection by Classification Societies

The hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and SOLAS. Most insurance underwriters make it a condition for insurance coverage and lending that a vessel be certified “in class” by a classification society which is a member of the International Association of Classification Societies, the IACS.  The IACS has adopted harmonized Common Structural Rules, or the Rules, which apply to oil tankers and bulk carriers constructed on or after July 1, 2015.  The Rules attempt to create a level of consistency between IACS Societies.  All of our vessels are certified as being “in class” by all the applicable Classification Societies (e.g., American Bureau of Shipping, DNV, Lloyd’s Register of Shipping, Bureau Veritas).

A vessel must undergo annual surveys, intermediate surveys, dry-dockings and special surveys. In lieu of a special survey, a vessel’s machinery may be on a continuous survey cycle, under which the machinery would be surveyed periodically over a five-year period. Every vessel above 15 years of age is also required to be drydocked every 30 to 36 months for inspection of the underwater parts of the vessel.  If any vessel does not maintain its class and/or fails any annual survey, intermediate survey, drydocking or special survey, the vessel will be unable to carry cargo between ports and will be unemployable and uninsurable which could cause us to be in violation of certain covenants in our loan agreements. Any such inability to carry cargo or be employed, or any such violation of covenants, could have a material adverse impact on our financial condition and results of operations.

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Risk of Loss and Liability Insurance

General

The operation of any cargo vessel includes risks such as mechanical failure, physical damage, collision, property loss, cargo loss or damage and business interruption due to political circumstances in foreign countries, piracy incidents, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills and other environmental mishaps, and the liabilities arising from owning and operating vessels in international trade. OPA, which imposes virtually unlimited liability upon shipowners, operators and bareboat charterers of any vessel trading in the exclusive economic zone of the United States for certain oil pollution accidents in the United States, has made liability insurance more expensive for shipowners and operators trading in the United States market. We carry insurance coverage as customary in the shipping industry. However, not all risks can be insured, specific claims may be rejected and we might not be always able to obtain adequate insurance coverage at reasonable rates.

Hull & Machinery and War Risks Insurances

We maintain marine hull and machinery and war risks insurances, which include the risk of actual or constructive total loss, for all of our vessels.  Each of our vessels is covered up to at least its fair market value with deductibles of $150,000 per vessel per incident.  We also maintain increased value coverage for our vessels.  Under this increased value coverage, in the event of total loss of a vessel, we will be able to recover the sum insured under the increased value policy in addition to the sum insured under the hull and machinery policy.  Increased value insurance also covers excess liabilities which are not recoverable under our hull and machinery policy by reason of under insurance.

Protection and Indemnity Insurance

Protection and indemnity insurance, provided by mutual protection and indemnity associations, or P&I Associations, covers our third-party liabilities in connection with our shipping activities. This includes related expenses of injury, illness or death of crew, passengers and other third parties, loss or damage to cargo, claims arising from collisions with other vessels, damage to other third-party property such as fixed and floating objects, pollution arising from oil or other substances, salvage, towing and other related costs, including wreck removal. Protection and indemnity insurance is a form of mutual indemnity insurance, extended by protection and indemnity mutual associations, or “clubs.”

Our coverage limit is as per the International Group’s rules, where there are standard sub-limits for oil pollution at $1 billion, passenger liability at $2 billion and seamen liabilities at $3 billion.  The 12 P&I Associations that comprise the International Group insure approximately 90% of the world’s commercial tonnage and have entered into a pooling agreement to reinsure each association’s liabilities in excess of each association’s own retention of $10.0 million up to, currently, approximately $8.9 billion.  As a member of P&I Associations, which are a member of the International Group, we are subject to calls payable to the associations based on our claim records as well as the claim records of all other members of the individual associations and members of the shipping pool of P&I Associations comprising the International Group.

Permits and Authorizations

We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our vessels. The kinds of permits, licenses and certificates required depend upon several factors, including the commodity transported, the waters in which the vessel operates, the nationality of the vessel’s crew and the age of a vessel. We believe that we have obtained all permits, licenses and certificates currently required to permit our vessels to operate as planned. Additional laws and regulations, environmental or otherwise, may be adopted which could limit our ability to do business or increase the cost of us doing business in the future.

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C.
Organizational Structure

Seanergy Maritime Holdings Corp. is the ultimate parent company of the following wholly owned subsidiaries, either directly or indirectly, as of the date of this annual report:

Subsidiary
Jurisdiction of Incorporation
Seanergy Management Corp.
Republic of the Marshall Islands
Seanergy Shipmanagement Corp.
Republic of the Marshall Islands
Honor Shipping Co.
Republic of the Marshall Islands
Sea Genius Shipping Co.
Republic of the Marshall Islands
Traders Shipping Co.
Republic of the Marshall Islands
Gladiator Shipping Co.
Republic of the Marshall Islands
Premier Marine Co.
Republic of the Marshall Islands
Emperor Holding Ltd.
Republic of the Marshall Islands
Champion Marine Co.
Republic of the Marshall Islands
Fellow Shipping Co.
Republic of the Marshall Islands
Patriot Shipping Co.
Republic of the Marshall Islands
Flag Marine Co.
Republic of the Marshall Islands
World Shipping Co.
Republic of the Marshall Islands
Partner Marine Co.
Republic of the Marshall Islands
Duke Shipping Co.
Republic of the Marshall Islands
Atsea Ventures Corp.
Republic of the Marshall Islands
Squire Ocean Navigation Co.
Republic of Liberia
Lord Ocean Navigation Co.
Republic of Liberia
Knight Ocean Navigation Co.
Republic of Liberia
Good Ocean Navigation Co.
Republic of Liberia
Hellas Ocean Navigation Co.
Republic of Liberia
Friend Ocean Navigation Co.
Republic of Liberia
Paros Ocean Navigation Co.
Republic of Liberia
Titan Ocean Navigation Co.
Republic of Liberia
Icon Ocean Navigation Co.
Republic of Liberia
Partner Shipping Co. Limited
Malta
Pembroke Chartering Services Limited
Malta
Martinique International Corp.
British Virgin Islands
Harbour Business International Corp.
British Virgin Islands
 
D.
Property, Plants and Equipment

We do not own any real estate property. We maintain our principal executive offices at Glyfada, Greece. Other than our vessels, we do not have any material property. See “Item 4.B. Business Overview - Our Current Fleet” and “Item 5. Operating and Financial Review and Prospects — B. Liquidity and Capital Resources – Loan Arrangements.”

ITEM 4A.
UNRESOLVED STAFF COMMENTS

None.

ITEM 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion of the results of our operations and our financial condition should be read in conjunction with the financial statements and the notes to those statements included in “Item 18. Financial Statements.” This discussion contains forward-looking statements that involve risks, uncertainties, and assumptions.  Actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth in “Item 3. Key Information–D. Risk Factors.”

A.
Operating Results

Principal Factors Affecting Our Business

The principal factors that affect our financial position, results of operations and cash flows include the following:

•
number of vessels owned and operated;

•
voyage charter rates;

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•
time charter trip rates;

•
period time charter rates;

•
the nature and duration of our voyage charters;

•
vessels repositioning;

•
vessel operating expenses and direct voyage costs;

•
maintenance and upgrade work;

•
the age, condition and specifications of our vessels;

•
issuance of our common shares and other securities;

•
amount of debt obligations; and

•
financing costs related to debt obligations.

We are also affected by the types of charters we enter into. Vessels operating on fixed rate period time charters and bareboat time charters provide more predictable cash flows, but can yield lower revenue and profit margins than vessels operating in the spot charter market, either on trip time charters or voyage charters, during periods characterized by favorable market conditions.

Vessels operating in the spot charter market generate revenues that are less predictable, but can yield increased revenue and profit margins during periods of improvements in dry bulk rates. Spot charters also expose vessel owners to the risk of declining dry bulk rates and rising fuel costs in case of voyage charters. As of the date of this report, all of the Company’s fleet is time chartered on long-term, index-linked employment arrangements where daily charter rates track the fluctuations of the BCI. Out of the seventeen long-term employment agreements in place, one was agreed during 2024, four were agreed during 2023, three were agreed during 2022 and the remaining nine between 2018 and 2021.

Critical Accounting Policies

Critical accounting policies are those that are both most important to the portrayal of the company’s financial condition and results, and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. We have described in Item 5. Operating and Financial Review and Prospects – E. Critical Accounting Estimates our critical accounting estimates, because they potentially result in material different results under different assumptions and conditions. For a description of all our significant accounting policies, see Note 2 to our annual audited financial statements included in this annual report.

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Results of Operations

Year ended December 31, 2023 as compared to year ended December 31, 2022

(In thousands of U.S. Dollars, except for share and per share data)
  
Year ended December
31,
    
Change
  
   
2023
    
2022
    
Amount
    
%
  
Revenues:
                        
Vessel revenue, net
    
107,036
      
122,629
      
(15,593
)
    
(13
)%
Fees from related parties
    
3,198
      
2,391
      
807
      
34
%
Revenue, net
    
110,234
      
125,020
      
(14,786
)
    
(12
)%
                                 
Expenses:
                                
Voyage expenses
    
(2,851
)
    
(4,293
)
    
1,442
      
(34
)%
Vessel operating expenses
    
(42,260
)
    
(43,550
)
    
1,290
      
(3
)%
Management fees
    
(700
)
    
(1,368
)
    
668
      
(49
)%
General and administration expenses
    
(22,149
)
    
(17,412
)
    
(4,737
)
    
27
%
Depreciation and amortization
    
(28,831
)
    
(28,297
)
    
(534
)
    
2
%
Gain on sale of vessel, net
    
8,094
      
-
      
8,094
      
-
  
Loss on forward freight agreements, net
    
(188
)
    
(417
)
    
229
      
(55
)%
Operating income
    
21,349
      
29,683
      
(8,334
)
    
(28
)%
Other income / (expenses), net:
                                
Interest and finance costs
    
(20,694
)
    
(15,332
)
    
(5,362
)
    
35
%
Loss on extinguishment of debt
    
(540
)
    
(1,291
)
    
751
      
(58
)%
Interest and other income
    
2,443
      
1,361
      
1,082
      
80
%
Gain on spin-off of United Maritime Corporation
    
-
      
2,800
      
(2,800
)
    
(100
)%
Foreign currency exchange losses, net
    
(276
)
    
(10
)
    
(266
)
    
(2,660
)%
Total other expenses, net:
    
(19,067
)
    
(12,472
)
    
(6,595
)
    
53
%
Net income before income taxes
    
2,282
      
17,211
      
(14,929
)
    
(87
)%
Income taxes
    
-
      
28
      
(28
)
    
(100
)%
Net income
    
2,282
      
17,239
      
(14,957
)
    
(87
)%
                                 
Net income per common share
                                
Basic
    
0.12
      
0.97
                  
Diluted
    
0.12
      
0.96
                  
Weighted average number of common shares outstanding
                                
Basic
    
18,394,419
      
17,439,033
                  
Diluted
    
18,442,688
      
17,684,048
                  

Vessel Revenue, Net – The decrease was attributable to the decrease in prevailing charter rates and was partially offset by an increase in operating days. We had 5,953 operating days in 2023, as compared to 5,905 operating days in 2022. The TCE rate decreased by 13% in 2023 to $17,501, as compared to $20,040 in 2022. Please see reconciliation below of TCE rate (a non-GAAP measure) to net revenues from vessels, the most directly comparable U.S. GAAP measure.

Fees from Related Parties – The amount relates to fees regarding the commercial and technical management services provided from Seanergy to United Maritime Corporation (“United”) and commission earned by Seanergy on vessels sold and/ or purchased by United pursuant to the relevant management agreements. The increase is due to the fact that United commenced its operations in July 2022 and thus the fees for 2022 refer only to the period from July 6, 2022 until December 31, 2022 while the fees in 2023 related to the whole year. The 2023 amount comprises of $1.8 million commercial and technical management fees and $1.4 million of sale and purchase commissions. The 2022 amount comprises of $0.6 million commercial and technical management fees and $1.8 million of sale and purchase commissions.

Voyage Expenses – The decrease was primarily attributable to a decrease in bunkers consumption as a result of the decrease of repairs and off-hire days. We had 54 repairs and off-hire days for the year ended December 31, 2023, as compared to 314 days repairs and off-hire days during the comparable period of 2022.

Vessel Operating Expenses – Vessel operating expenses amounted to $42.3 million in the year ended December 31, 2023, compared to $43.6 million in the year ended December 31, 2022. The decrease was primarily attributable to the decrease in ownership days. We had 6,008 ownership days in 2023 as compared to 6,219 ownership days in 2022. The decrease was partially offset by increased inflation rates that affected mainly store supplies and increased crew costs.

Management Fees – The decrease was attributable to the change in the volume of technical management services outsourced. For the year ended December 31, 2023, we had 968 ownership days under third party technical management compared to 3,342 ownership days for the respective period in 2022.

General and Administration Expenses –The increase is mainly attributed to non-cash stock-based compensation which amounted to $8.9 million in 2023 compared to $7.0 million in 2022 and to the increased staff costs attributed to the growth of the Company.

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Depreciation and Amortization – For the year ended December 31, 2023, depreciation and amortization expense increased to $28.8 million from $28.3 million. The increase in depreciation expense is due to the increase in the number of vessels from 16 vessels as of December 31, 2022 to 17 vessels as of December 31, 2023. This was partially offset by the decrease of the amortization of deferred dry-docking costs which decreased to $4.2 million in 2023 from $4.9 million in 2022.

Loss on Forward Freight Agreements – The loss in the year ended December 31, 2023, is attributable to the net realized losses of our positions on the forward freight agreements entered within the year.

Interest and Finance Costs – The increase is primarily attributable to the increase in the average interest rate on our outstanding indebtedness, mainly driven by the increased Libor and SOFR rates for our interest bearing securities. The weighted average interest rate on our outstanding debt and convertible notes for the twelve months ended 2023 and 2022 was approximately 7.62% and 4.81%, respectively. Finally, non-cash interest expense of amortization of deferred finance costs and debt discounts for the years ended December 31, 2023 and 2022 was $2.2 million and $2.9 million, respectively.

Interest and Other Income – Interest and other income for the year ended December 31, 2023 consist of $1.9 million of insurance credits and insurance claims, and an amount of $0.5 million related to interest income from our short-term deposits. The interest and other income for 2022 is related to $0.5 million dividends received in relation to Series C preferred shares, $0.5 million of insurance credits and $0.4 million of interest income from our short-term time deposits.

Loss on Extinguishment of Debt – The loss in the year ended December 31, 2023, is mainly attributable to the write-off of unamortized deferred finance costs and debt discounts upon the full settlement of certain borrowing facilities, as follows: $0.37 million upon the full settlement of the outstanding balance of the Hanchen Sale and Leaseback, $0.1 million following the full settlement of the ABB Loan Facility and $0.07 million due to the partial prepayment of the August 2021 Alpha Bank Loan Facility (described below). The loss in the year ended December 31, 2022, is attributable to the write-off of unamortized deferred finance costs and debt discounts upon the settlement of certain borrowing facilities, as follows: $1.1 million related to the prepayment of the Second JDH Note and $0.1 million related to the February 2019 ATB Loan Facility.

Gain on Spin-Off of United Maritime Corporation – The gain in the year ended December 31, 2022, represents the difference between the fair value of assets contributed from Seanergy to United and their carrying value.

Please see Item 5.A of our Form 20-F filed with the SEC on March 31, 2023, for a discussion of the year-to-year comparison between 2022 and 2021.

B.
Liquidity and Capital Resources

Our principal source of funds has been our operating cash inflows, long-term borrowings from banks, sale and leaseback transactions and equity provided by the capital markets. Our principal use of funds has primarily been capital expenditures to establish our fleet, maintain the quality of our dry bulk vessels, comply with international shipping standards and environmental laws and regulations, fund working capital requirements, and make principal repayments and interest payments on our outstanding debt obligations.

Our funding and treasury activities are conducted in accordance with corporate policies to maximize investment returns while maintaining appropriate liquidity for both our short- and long-term needs. This includes arranging borrowing facilities on a cost-effective basis. Cash and cash equivalents are held primarily in U.S. dollars, with minimal amounts held in Euros.

As of December 31, 2023, we had cash and cash equivalents of $19.4 million, as compared to $26.0 million as of December 31, 2022.

Working capital is equal to current assets minus current liabilities, including the current portion of long-term debt. As of December 31, 2023, we had a working capital deficit of $44.4 million (which included an amount of $2.1 million relating to pre-collected revenue) as compared to a working capital deficit of $33.0 million as of December 31, 2022 (which included liabilities amounting to $12.7 million relating to cash deposit received from United for sale of vessels and an amount of $2.2 million relating to pre-collected revenue). The December 31, 2023 deficit is primarily due to the expected exercise of the purchase option price of $20.2 million for the purchase of the M/V Titanship and to planned loan repayments for the next 12 months, amounting to $33.0 million. For the year ended December 31, 2023, the Company realized a net income of $2.3 million and generated cash flow from operations of $31.3 million.

As of December 31, 2023, we had outstanding borrowings of $236.4 million (including long-term debt, finance lease liability and other financial liabilities) as compared to $259.9 million as of December 31, 2022.

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As of March 28, 2024, we had outstanding borrowings of $227.1 million (including long-term debt, finance lease liability and other financial liabilities). Our primary known and estimated liquidity needs for 2024 include obligations related to scheduled principal payments of outstanding borrowings and respective interest expenses payments, estimated drydocking expenditures, the purchase option price of $20.2 million for the expected exercise of the option to purchase the M/V Titanship, the acquisition of the vessel agreed on February 5, 2024 for $33.7 million and the acquisition of the vessel agreed on March 18, 2024 for $35.6 million, net of a $4.5 million deposit already paid of as of today. Our cash flow projections indicate that cash on hand and cash to be provided by operating activities and cash provided through refinancing certain of its existing loan agreements and through obtaining new financing agreements will be sufficient to cover the liquidity needs that become due in the twelve-month period ending one year after the financial statements’ issuance. Additional information on our annual scheduled obligations under our long-term debt and other financial liabilities are described in “Loan Arrangements” below and in Note 8 (“Long-Term Debt and Other Financial Liabilities”) and Note 7 (“Finance Lease, Right-of use Asset and Finance lease liabilities”) of our consolidated financial statements included in Item 18 of this annual report. Our medium- and long-term liquidity requirements relate to the operation and maintenance expenditures of our vessels. Sources of funding for our medium- and long-term liquidity requirements include cash flows from operations and new debt financing.

Cash Flows

(In thousands of US Dollars)
  
Year ended December 31,
  
   
2023
    
2022
    
2021
  
Cash Flow Data:
                  
Net cash provided by operating activities
    
31,323
      
37,286
      
80,760
  
Net cash provided by / (used in) investing activities
    
17,745
      
(56,263
)
    
(184,620
)
Net cash (used in) / provided by financing activities
    
(56,617
)
    
5,828
      
127,435
  

Year ended December 31, 2023, as compared to year ended December 31, 2022

Operating Activities:  Net cash provided by operating activities in 2023 consisted of net income after non-cash items of $34.9 million and the decrease in working capital of $3.6 million. The major driver of the change of net cash provided by operating activities was the decrease in charter rates that prevailed in the market for 2023 as compared to 2022. Net cash provided by operating activities in 2022 consisted of net income after non-cash items of $54.1 million and the decrease in working capital of $16.8 million.

Investing Activities: The 2023 cash inflow resulted from $23.9 million proceeds from sale of the M/Vs Goodship and Tradership to United and $1.3 million inflow from release of deposits. The 2023 cash inflow was partially offset by $7 million lease prepayments, $0.3 million payments for vessel improvements and $0.2 million for the purchase of other fixed assets. The 2022 cash outflow resulted from $70.3 million for the purchase of two vessels and payments for vessels improvements, $10 million investment in Series C preferred shares and $0.1 million for the purchase of other fixed assets. The 2022 cash outflow was offset by $12.7 million advances received in respect with the subsequent sale of two vessels, $10.0 million proceeds from the redemption of the Series C preferred shares and $1.5 million inflow from term deposits.

Financing Activities: The 2023 cash outflow resulted mainly from $88.7 million long-term debt and other financial liabilities payments, $11.2 million convertible notes repayments, $6.0 million of dividend payments, $1.7 million for common stock repurchases, $1.3 million financing and stock issuance fees payments, $0.8 million for warrants repurchases and $0.6 million of finance lease liabilities payments. The 2023 cash outflow was partially offset by the $53.8 million proceeds from long-term debt and other financial liabilities. The 2022 cash inflow resulted mainly from $124.8 million from proceeds of secured long-term debt. The 2022 cash inflow was offset by debt repayments of $89.7 million, $10.0 million repayments of convertible notes, $17.9 million of dividend payments and $1.4 million financing and stock issuance fees payments.

Please see Item 5.A of our Form 20-F filed with the SEC on March 31, 2023 for a discussion of the year-to-year comparison between 2022 and 2021.

Loan Arrangements

Loan Facilities amended during the year ended December 31, 2023

October 2022 Danish Ship Finance Loan Facility

On October 10, 2022, the Company entered into a $28.0 million loan facility with Danish Ship Finance A/S to refinance the existing UniCredit Bank Loan Facility secured by the M/Vs Premiership and Fellowship. The facility was divided in two equal tranches, has a term of five years, while the interest rate is 2.5% plus SOFR per annum. The repayment schedule of each tranche is comprised of six quarterly installments of $0.8 million followed by fourteen quarterly installments of $0.5 million and a balloon of $2.1 million payable together with the final installment. Each borrower is required to maintain minimum liquidity of $0.65 million in its retention account.

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On April 18, 2023, the Company entered a deed of accession, amendment and restatement to the October 2022 Danish Ship Finance Loan Facility to refinance the existing Championship Cargill Sale and Leaseback secured by the M/V Championship. The amended and restated facility includes a new tranche of $15.8 million secured by the M/V Championship. The new tranche is payable through eight quarterly installments of $0.7 million followed by 12 quarterly installments of $0.6 million and a balloon of $2.9 million payable together with the final installment bearing an interest rate of 2.65% plus 3-month term SOFR per annum. For the new tranche, the borrower is required to maintain minimum liquidity of $0.7 million in its retention account. The security cover ratio and all other covenants continue to apply per the terms of the October 2022 Danish Ship Finance Loan Facility. In particular, the Company is required to maintain a security cover higher than 133%, at any time the corporate leverage ratio (as defined therein) is equal to or less than 65%. If the corporate leverage ratio is higher than 65%, the Company is required to maintain a security cover ratio (as defined therein) higher than 143%. The Company is required to maintain a leverage ratio (as defined therein), that will not be higher than 85% until June 29, 2023 and 70% thereafter until the maturity of the loan. Furthermore, a new sustainability linked margin adjustment mechanism was introduced to all three tranches of the October 2022 Danish Ship Finance Loan Facility, whereby the interest margin can be increased or decreased by 0.05% based on the certain emission thresholds. As of December 31, 2023, $36.1 million was outstanding under the facility.

June 2022 Piraeus Bank Loan Facility

On June 22, 2022, the Company entered into a facility agreement with Piraeus Bank S.A. for a $38.0 million sustainability-linked term loan. The purpose of the loan was to partly finance the acquisition cost of the M/V Honorship, while also refinancing the November 2021 Piraeus Bank Loan Facility, which was secured by the M/V Worldship. On July 3, 2023, the Company entered into an overriding agreement to replace the LIBOR with term SOFR as reference rate, which is effective as of July 27, 2023. The facility bears interest at term SOFR plus a margin of 3.00% and a credit adjustment spread (as defined therein) and is repayable through four quarterly installments of $2.0 million, two quarterly installments of $1.5 million, followed by fourteen quarterly installments of $0.8 million and a balloon of $16.5 million payable together with the final installment. The margin is subject to a sustainability pricing adjustment whereby it may be decreased by up to 0.10% upon meeting certain emission reduction targets during the term of the facility. The Company is required to maintain a security cover ratio (as defined therein) of not less than 125% until December 24, 2023, and 130% thereafter until the maturity of the loan. As per the supplemental agreement entered into on July 3, 2023, the corporate leverage ratio (as defined in the facility agreement) required by the Company was reduced from 85% to 70% effective from June 30, 2023 until the maturity of the loan. The borrowers are required to maintain an aggregate minimum liquidity of $2.0 million in their operating accounts. As of December 31, 2023, $27.0 million was outstanding under the facility.

August 2021 Alpha Bank Loan Facility

On August 9, 2021, we entered into a $44.1 million secured loan facility with Alpha Bank S.A. (“Alpha Bank”) for the purposes of (i) refinancing of a pre-existing Alpha Bank loan facility and (ii) financing of the previously unencumbered M/V Friendship, effectively replacing the M/V Leadership in the security structure and increasing the loan amount. The August 2021 Alpha Bank Loan Facility is divided in two tranches, which were fully drawn on August 11, 2021: the Tranche A of $31.1 million was used to partly refinance the outstanding indebtedness over the M/Vs Squireship and Lordship and the Tranche B of $13.0 million was used to partly finance the M/V Friendship. On June 30, 2022, we entered into a supplemental agreement to the facility pursuant to which, the August 2021 Alpha Bank Loan Facility is cross collateralized with the June 2022 Alpha Bank Loan Facility.

On April 28, 2023, the Company prepaid $8.5 million to Tranche A and $3.5 million to Tranche B using the proceeds from the Village Seven Sale and Leaseback and as a result all the securities regarding the M/V Lordship were irrevocably and unconditionally released. Following the prepayment of the M/V Lordship, the Tranche A is repayable by seven quarterly installments of $0.6 million each and a balloon of $10.3 million payable together with the final installment. The Tranche B is repayable by eight quarterly installments of $0.3 million each and a balloon of $3.9 million payable together with the final installment. The repayment of installments for both tranches commenced in November 2023. The borrower owning the M/V Squireship is required to maintain an average quarterly minimum free liquidity of $0.5 million, whereas the borrower owning the M/V Friendship is required to maintain $0.5 million at all times. In addition, the borrowers shall ensure that the market value of the vessels plus any additional security shall not be less than 125% of the aggregate outstanding loan amount. Furthermore, on November 10, 2023, the Company entered into the second supplemental agreement pursuant to which, inter alia, LIBOR was replaced with term SOFR as the reference rate with retrospective effect from May 23, 2023. Following the transition from LIBOR to SOFR, the Tranche A bears interest at term SOFR plus a margin of 3.55% and the Tranche B bears interest at term SOFR plus a margin of 3.30%. As of December 31, 2023, $19.6 million was outstanding under the facility.

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Sinopac Loan Facility

On December 20, 2021, we entered into a $15.0 million secured loan facility with Sinopac Capital International (HK) Limited for the purpose of refinancing the outstanding indebtedness of the M/V Geniuship. On August 25, 2023, the Company entered into an overriding agreement to replace LIBOR with term SOFR as the reference rate which is effective as of September 12, 2023. The facility bears interest at term SOFR plus a margin of 3.5% and is repayable by four quarterly installments of $0.5 million, followed by sixteen quarterly installments of $0.4 million and a balloon installment of $6.7 million payable together with the final installment.  In addition, the borrower shall ensure that the market value of the vessel plus any additional security shall not be less than 130% of the total facility outstanding.  As of December 31, 2023, $11.3 million was outstanding under the facility.

Pre-existing Loan Facilities

June 2022 Alpha Bank Loan Facility

On June 21, 2022, we entered into a facility agreement with Alpha Bank for a $21.0 million term loan secured by the M/V Dukeship. The loan facility bears interest of SOFR plus a margin of 2.95% and is repayable through four quarterly installments of $1.0 million followed by twelve quarterly installments of $0.5 million and a final balloon of $11.0 million payable together with the sixteenth installment. The June 2022 Alpha Bank Loan Facility is cross collateralized with the August 2021 Alpha Bank Loan Facility. The Company is required to ensure that the security requirement ratio (as defined therein) shall not be less than 125% and the borrower is required to maintain minimum liquidity of $0.5 million in its operating account. As of December 31, 2023, $16.0 million was outstanding under the facility.

December 2022 Alpha Bank Loan Facility

On December 15, 2022, the Company entered into a facility agreement with Alpha Bank for a $16.5 million term loan for the purpose of partly financing the acquisition cost of the M/V Paroship. The loan facility bears interest of term SOFR plus a margin of 2.90% and is repayable through four quarterly installments of $0.5 million followed by twelve quarterly installments of $0.4 million and a final balloon of $9.6 million payable together with the sixteenth installment. In addition, the Company is required to maintain a security requirement (as defined therein) of not less than 125%, while the borrower is required to maintain minimum liquidity of $0.5 million in its operating account. As of December 31, 2023, $14.4 million was outstanding under the facility.

The borrowers under the loan facilities discussed above are the applicable vessel owning subsidiaries, while the Company has provided corporate guarantees in relation to performance of their obligations therein. These loan facilities are secured by mortgages, general assignments covering the respective vessels’ earnings, charter parties, insurances and requisition compensation; account pledge agreements covering the vessels’ earnings accounts; technical and commercial managers’ undertakings and pledge agreements covering the shares of the applicable vessel-owning subsidiaries. Certain of these loan facilities are additionally secured by specific charterparty assignments, usually for charterparties exceeding thirteen months in duration, second priority mortgages and general assignments and hedging assignment agreements.

Loan Facilities repaid during the years ended December 31, 2022 and December 31, 2023

ABB Loan Facility

On April 22, 2021, we entered into a $15.5 million secured loan facility with Aegean Baltic Bank S.A. (“ABB”). The loan was divided in two tranches of $7.5 million (“Tranche A”) and $8.0 million (“Tranche B”) to partly finance the acquisition cost of the M/Vs Goodship and Tradership, respectively. Each tranche bore an interest at LIBOR plus a margin 4.0% and was repayable in eighteen consecutive quarterly installments of $0.2 million each, with a final balloon payment of $3.9 million due in October 2025, for Tranche A and $4.4 million due in December 2025, for Tranche B. On February 9, 2023, in connection with the disposal of the M/V Goodship, the Company fully prepaid the outstanding loan amount of $6.1 million under the Tranche A. On February 24, 2023, in connection with the disposal of the M/V Tradership, the company fully prepaid the remaining outstanding loan amount of $6.8 million under the Tranche B. Following the full prepayment of the ABB Loan Facility, all securities created in favor of ABB were irrevocably and unconditionally released.

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UniCredit Bank Loan Facility

On September 11, 2015, we entered into a $52.7 million secured loan facility with UniCredit Bank AG to partly finance the acquisition of the M/Vs Premiership, Gladiatorship and Guardianship. On November 22, 2018, we entered into an amendment and restatement of the UniCredit Bank Loan Facility, following the sale of the M/Vs Gladiatorship and the Guardianship and the financing of the M/V Fellowship as replacement collateral. Following the supplemental agreement entered into on February 8, 2021, the facility had an expiry date in December 2022 and amortized through six consecutive quarterly repayments of $1.2 million each, followed by a balloon installment of $22.4 million on the maturity date. The applicable interest rate was LIBOR plus a margin of 3.5% per annum. On October 10, 2022, the facility was refinanced in full by the October 2022 Danish Ship Finance Loan Facility.

November 2021 Piraeus Bank Loan Facility

On November 12, 2021 we entered into a $16.9 million secured loan facility with Piraeus Bank S.A. for the purpose of partially financing the acquisition of the M/V Worldship. The facility bore interest at LIBOR plus a margin of 3.05% and was repayable in four quarterly installments of $1.0 million, followed by two quarterly installments of $0.8 million and fourteen quarterly installments of $0.4 million each and a balloon installment of $6.1 million due in November 2026. The margin of the facility was subject to a sustainability pricing adjustment, whereby it would be decreased to 2.95% if the M/V Worldship met certain emission reduction targets during the term of the facility. On June 22, 2022, the facility was refinanced in full by the June 2022 Piraeus Bank Loan Facility.

February 2019 ATB Loan Facility

On February 13, 2019, we entered into a $20.9 million secured loan facility with Amsterdam Trade Bank NV, or ATB, in order (i) to refinance the existing indebtedness over the M/V Partnership under a previous loan facility provided by the same lender and (ii) for general working capital purposes, and more specifically, for the financing of installation of open loop scrubber systems on the M/Vs Squireship and Premiership. The facility, as amended and/or supplemented from time to time, bore interest of LIBOR plus a margin of 4.65% and was divided in Tranche A relating to the refinancing of the M/V Partnership and Tranches B and C for the working capital purposes discussed above, respectively. Tranche A was repayable in sixteen consecutive quarterly installments of $0.2 million each and a balloon payment of $13.2 million in November 2022. Tranche B and C was repayable in twelve consecutive quarterly installments of $0.2 million with the last one falling due in August 2022. On February 28, 2022, the outstanding amount of $15.1 million was repaid in full and subsequently refinanced by the Chugoku Bank Sale and Leaseback.

July 2020 Entrust Facility

On July 15, 2020, we entered into a $22.5 million secured loan facility with Lucid Agency Services Limited and Lucid Trustee Services Limited as facility agent and security agent, respectively, and certain nominees of EnTrust Global as lenders, for the purpose of partly refinancing the settlement amount of $23.5 million under a previous loan facility with Hamburg Commercial Bank AG. The July 2020 Entrust Facility was made available in two tranches: the Tranche A of $6.5 million was used to partly refinance the outstanding indebtedness over the M/V Gloriuship and the Tranche B of $16.0 million was used to partly refinance the outstanding indebtedness over the M/V Geniuship. On December 20, 2021, the Tranche B was refinanced by the Sinopac Loan Facility. On July 28, 2022, after the Spin-Off and the resultant transfer of the M/V Gloriuship to United, we were replaced by United as guarantor under the facility.

Subordinated & Other Loan Facilities

Second JDH Loan (originally entered into in May 2017)

On February 28, 2022, the outstanding balance of $1.9 million of the Second JDH Loan was prepaid in full and all securities created in favor of JDH were also irrevocably and unconditionally released pursuant to a deed of release.

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Other Financial Liabilities: Sale and Leaseback Transactions

New Sale and Leaseback Activities during the year ended December 31, 2023

Evahline Sale and Leaseback

On March 29, 2023, we entered into a $19.0 million sale and leaseback agreement with a subsidiary of Evahline Inc. (“Evahline”) for the refinancing of the Hanchen Sale and Leaseback. The agreement became effective on April 6, 2023, upon the delivery of the M/V Knightship to the lessor. The Company sold and chartered back the vessel from Evahline on a bareboat basis for a six-year period. The financing’s applicable interest rate is 3-month term SOFR plus 2.80% per annum. Following the second anniversary of the bareboat charter, the Company has continuous options to repurchase the vessel at predetermined prices as set forth in the agreement. At the end of the six-year bareboat period, the ownership of the vessel will be transferred to the Company at no additional cost. The Company is required to maintain a minimum value (as defined therein) of at least 120% of the charterhire principal. The charterhire principal amortizes in seventy-two consecutive monthly installments paid in advance averaging approximately $0.3 million. The charterhire principal, as of December 31, 2023, was $16.6 million.

Village Seven Sale and Leaseback

On April 24, 2023, we entered into a $19.0 million sale and leaseback agreement for the M/V Lordship with Village Seven Co., Ltd and V7 Fune Inc. (collectively, “Village Seven”) to partially refinance the August 2021 Alpha Bank Loan Facility. The Company sold and chartered back the vessel from Village Seven on a bareboat basis for a period of four years and five months. The financing’s applicable interest rate is 3-month term SOFR plus 3.00% per annum. Following the second anniversary of the bareboat charter, the Company has continuous options to repurchase the vessel at predetermined prices as set forth in the agreement. At the end of the bareboat period, the Company has the option to repurchase the vessel at $7.8 million, which the Company expects to exercise. The sale and leaseback agreement does not include any financial covenants or security value maintenance provisions. The charterhire principal amortizes in fifty-three consecutive monthly installments paid in advance of approximately $0.2 million. The charterhire principal, as of December 31, 2023, was $17.1 million.

Sale and Leaseback Activities amended during the year ended December 31, 2023

 CMBFL Sale and Leaseback

On June 22, 2021, we entered into a $30.9 million sale and leaseback agreement with CMB Financial Leasing Co., Ltd. (“CMBFL”) to partly finance the acquisition of the M/Vs Hellasship and Patriotship. The Company sold and chartered back the vessels from two affiliates of CMBFL on a bareboat basis for a five-year period. On September 25, 2023, the Company entered into an amendment and restatement pursuant to which, inter alia, LIBOR was replaced with term SOFR as the reference rate, with retrospective effect from June 28, 2023. Following this transaction, the financings bear interest of term SOFR plus a margin of 3.5%. The Company is required to maintain a corporate leverage ratio (as defined therein), that will not be higher than 85% until maturity. Each of the bareboat charterers are required to maintain a value maintenance ratio (as defined therein) of at least 120% of the charterhire principal and a minimum liquidity of $0.55 million in its earnings account. The Company has continuous options to buy back the M/Vs Hellasship and Patriotship at any time following the second anniversary until the maturity of the bareboat charter at predetermined prices as defined in the agreement. The charterhire principal amortizes in twenty consecutive equal quarterly installments of $0.8 million along with a final balloon payment of $15.3 million payable together with the final installment. The charterhire principal, as of December 31, 2023, was $23.1 million.

Existing Sale and Leaseback Activities

Flagship Cargill Sale and Leaseback

On May 11, 2021, we entered into a $20.5 million sale and leaseback agreement with Cargill International SA (“Cargill”) to partly finance the acquisition of the M/V Flagship. The Company sold and chartered back the vessel from Cargill on a bareboat basis for a five-year period, having a purchase obligation at the end of the fifth year. The implied average applicable interest rate is equivalent to 2% per annum. The sale and leaseback agreement does not include any financial covenants or security value maintenance provisions. The Company has continuous options to buy back the vessel during the whole five-year sale and leaseback period at predetermined prices as set forth in the agreement and at the end of such period it has a purchase obligation at $10.0 million. Additionally, at the time of repurchase, if the market value of the vessel is greater than certain threshold prices, as set out in the agreement, the Company will pay to Cargill 15% of the difference between the market price and such threshold prices. The Company recognized a participation liability of $0.4 million as of December 31, 2023, which is included under Other liabilities – non-current in the consolidated balance sheets. The charterhire principal amortizes in sixty monthly installments averaging approximately $0.2 million each along with a balloon payment of $10.0 million at maturity. The charterhire principal, as of December 31, 2023, was $15.2 million.

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Chugoku Sale and Leaseback

On February 25, 2022 the Company entered into a $21.3 million sale and leaseback agreement with Chugoku Bank, Ltd. (“Chugoku”) to refinance the loan facilities secured by the M/V Partnership. The Company sold and chartered back the vessel from Chugoku on a bareboat basis for an eight-year period starting from March 9, 2022. The financing’s applicable interest rate is SOFR plus 2.90% per annum. Following the second anniversary of the bareboat charter, the Company has continuous options to repurchase the vessel at predetermined prices as set forth in the agreement. At the end of the eight-year bareboat period, the Company has the option to repurchase the vessel for $2.4 million, which the Company expects to exercise. The Company is required to maintain a minimum market value (as defined therein) of at least 120% of the charterhire principal. The charterhire principal amortizes in thirty-two consecutive quarterly installments averaging approximately $0.6 million along with a balloon payment of $2.4 million at the expiry of the bareboat charter.  The charterhire principal, as of December 31, 2023, was $17.3 million.

Sale and Leaseback Activities repaid during the year ended December 31, 2023

Hanchen Sale and Leaseback

On June 28, 2018, we entered into a $26.5 million sale and leaseback agreement for the M/V Knightship with Hanchen Limited (“Hanchen”), an affiliate of AVIC International Leasing Co., Ltd. The Company’s sold and chartered back the vessel on a bareboat basis for an eight-year period, having a purchase obligation at the end of the eighth year. The charterhire principal bore interest at LIBOR plus a margin of 4%. The Company had continuous options to buy back the M/V Knightship at any time following the second anniversary of the bareboat charter. Of the $26.5 million purchase price, $18.6 million were cash proceeds, $6.6 million were withheld by Hanchen as an upfront charterhire, and an amount of $1.3 million was paid by the Charterer to Hanchen as security of the due observance and performance by the Charterer of its obligations and undertakings as per the sale and leaseback agreement, or the Charterer’s Deposit. The Charterer was required to maintain a value maintenance ratio (as defined in the additional clauses of the bareboat charter) of at least 120% of the charterhire principal minus the amount of the Charterer’s Deposit. The Company had continuous options to buy back the M/V Knightship at any time following the second anniversary of the bareboat charter and a purchase obligation of $5.3 million at the end of the leaseback period.  The charterhire principal was repayable in thirty-two consecutive equal quarterly installments of approximately $0.5 million along with a balloon payment of $5.3 million payable together with the final installment. On April 6, 2023, the facility was refinanced by the Evahline Sale and Leaseback and the outstanding amount of $11.2 million, set-off by the Charterer’s Deposit, was repaid in full.

Championship Cargill Sale and Leaseback

On November 7, 2018, we entered into a $23.5 million sale and leaseback agreement for the M/V Championship with Cargill. The Company sold and chartered back the vessel from Cargill on a bareboat basis for a five-year period, having a purchase obligation at the end of the fifth year. The implied average applicable interest rate is equivalent to 4.71% per annum. The Company was required to maintain an amount of $1.6 million from the $23.5 million proceeds as a performance guarantee, which was set-off against the vessel repurchase price. Moreover, under the subject sale and leaseback agreement, an additional tranche was provided to the Company for an amount of up to $2.8 million for the purpose of financing the cost associated with the acquisition and installation on board the M/V Championship of an open loop scrubber system. The sale and leaseback agreement did not include any financial covenants or security value maintenance provisions. The Company had continuous options to buy back the vessel during the whole five-year sale and leaseback period at predetermined prices as set forth in the agreement at the end of which it has a purchase obligation at $14.1 million. Additionally, at the time of repurchase and as per the terms of the agreement, the Company also paid to Cargill 20% of the positive difference between the market price and the threshold price defined in the agreement for the time of the repurchase, which amounted to $0.9 million. The charterhire principal was repayable in sixty monthly installments averaging approximately $0.2 million each along with a balloon payment of $14.1 million, including the additional scrubber tranche, at maturity in November 2023. On April 24, 2023, the facility was refinanced by the October 2022 Danish Ship Finance Loan Facility and the total repayment amount stood at $16.5 million.

Certain of the Company’s sale and leaseback agreements discussed above are secured by a guarantee from the Company; general assignments covering the respective vessels’ earnings, insurances and requisition compensation; account pledge agreements; technical and commercial managers’ undertakings and pledge agreements covering the shares of the applicable bareboat charterer subsidiary.

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Convertible Note

 Second JDH Note

On September 7, 2015, we issued an up to $6.8 million, revolving convertible note to JDH, or the Second JDH Note. The Second JDH Note was amended and supplemented on various occasions and along with the other convertible notes and facilities between the Company and JDH, was subject to a comprehensive restructuring that became effective on December 31, 2020. Following the restructuring, the applicable interest rate was amended to a fixed rate of 5.5% per annum and the outstanding balance at that time was $21.2 million. On January 26, 2022, March 10, 2022 and January 3, 2023, we made three cash prepayments of $5.0 million, $5.0 million and $8.0 million, respectively. On December 29, 2023, the Company fully repaid the outstanding balance of $3.2 million in cash.

JDH Transactions

Securities Purchase Agreement

On December 30, 2020, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with JDH which set forth the terms of the amendments agreed for the then outstanding loan facilities with JDH (the “JDH Loan Facilities”), and the then outstanding convertible notes issued to JDH (the “JDH Notes”).

Pursuant to the Securities Purchase Agreement:

•
The Company prepaid $6.5 million of the principal amount of the Second JDH Loan on December 31, 2020.

•
In exchange for the settlement of all accrued and unpaid interest under the JDH Loan Facilities and JDH Notes through December 31, 2020 in an aggregate amount of $4.3 million and an amendment fee of $1.2 million, the Company issued, on January 8, 2021, 798,691 units (“Units”) at a price of $7.0 per Unit, with each Unit consisting of one common share of the Company (or, at JDH’s option, one pre-funded warrant in lieu of such common share) and ten warrants to purchase one common share at an exercise price of $7.0 per share.

•
The Company granted JDH an option, exercisable only once until 45 days after the effectiveness of the resale registration statement described below, to purchase up to 428,571 additional Units at a price of $7.0 per Unit in exchange for the forgiveness of principal under the Second JDH Loan in an amount equal to the aggregate purchase price of the Units. On April 26, 2021, JDH exercised this option to purchase 428,571 additional Units at a price of $7.0 per Unit in exchange for the settlement of principal under the Second JDH Loan in an amount of $3.0 million.

•
The Company granted JDH customary registration rights covering common shares issuable pursuant to the Securities Purchase Agreement as well as common shares underlying the JDH Notes. The registration statement covering the resale of these common shares was filed on February 19, 2021.

•
The Company and JDH agreed to amend the terms of each of the JDH Loan Facilities and JDH Notes pursuant to the omnibus supplemental agreements described below, including to extend the maturity date to December 31, 2024, to reduce the annual interest rate to 5.5% and to amend the conversion price under the JDH Notes to $12.00 per common share.

•
JDH agreed to a standstill undertaking, applicable for at least as long as the common shares are listed on Nasdaq, precluding any acquisition of the common shares, including through the exercise of warrants or the conversion of the JDH Notes, to the extent that it would result in JDH or its affiliates beneficially owning, including controlling the voting or disposition of, more than 9.99% of the outstanding common shares after giving effect to the acquisition.

•          JDH waived any and all prior breaches and events of default under the JDH Loan Facilities and JDH Notes.

The Securities Purchase Agreement and the transactions contemplated therein were approved by an independent committee of our board of directors.

The terms of the warrant and pre-funded warrant issued as part of Units are substantially the same as those of the Class E warrants and pre-funded warrants issued in the Company’s underwritten public offering in August 2020.

Omnibus Loan Supplemental Agreement

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On December 31, 2020, the Company entered into an omnibus supplemental agreement (the “Omnibus Loan Supplemental Agreement”), amending each of the JDH Loan Facilities to reflect the changes agreed with JDH in the Securities Purchase Agreement, including:

(i)
accrued and unpaid interest of an aggregate of $1.9 million through December 31, 2020 was deemed fully and finally settled;

(ii)
the interest rate payable from January 1, 2021 through the maturity date was fixed at 5.5% per annum;

(iii)
the maturity date was extended to December 31, 2024;

(iv)
the addition of cash sweep provisions whereby the Company will make prepayments semi-annually commencing the fiscal quarter ending March 31, 2021 of the greater of the Company’s cash balances in excess of $25.0 million or the revenue of the Company’s Capesize fleet attributable to a time charter equivalent rate in excess of $18,000 but not exceeding $21,000;

(v)
a mandatory prepayment on each of December 31, 2022 and December 31, 2023 of $8.0 million less any prepayments previously made under the cash sweep provisions;

(vi)
an option to apply the proceeds of any cash exercise of the warrants issued to JDH as part of Units as a prepayment;

(vii)
an amendment to the existing mandatory prepayment provisions in two of the JDH Loan Facilities such that the Company will make a mandatory prepayment of an amount equal to 25% of the net proceeds of any future public offering and any cash exercise of the Company’s outstanding Class E warrants (the prepayment obligations set forth in (iv)-(vi) above, the “Mandatory Prepayment Obligations”); and

(viii)
a cap of $12.0 million on all Mandatory Prepayment Obligations in any calendar year.

Omnibus Note Supplemental Agreement

On December 31, 2020, the Company entered into an omnibus supplemental agreement (the “Omnibus Note Supplemental Agreement”), amending each of the JDH Notes to reflect the changes agreed with JDH in the Securities Purchase Agreement, including:


 (i)
accrued and unpaid interest of an aggregate of $2.4 million through December 31, 2020 was deemed fully and finally settled;


(ii)
the interest rate payable from January 1, 2021 through the maturity date was fixed at 5.5% per annum;


(iii)
the maturity date was extended to December 31, 2024;


(iv)
the conversion price was amended to $12.0 per common share;


(v)
the existing conversion provision was amended to include a beneficial ownership limitation of 9.99% of the number of the common shares outstanding immediately after giving effect to the issuance of common shares issuable upon conversion; and


(vi)
the addition of provisions analogous to the Mandatory Prepayment Obligations requiring mandatory prepayment of the JDH Notes following the full repayment of the JDH Loan Facilities, and a cap of $12.0 million on all such mandatory prepayment obligations in any calendar year.

As of December 31, 2023 all JDH Loan Facilities and JDH Notes have been fully repaid.

C.
Research and development, patents and licenses, etc.

Not applicable.

D.
Trend Information

Our results of operations depend primarily on the charter rates earned by our vessels. The widely accepted benchmark of charter market in the dry bulk industry is the Baltic Dry Index, or the BDI. Over the course of 2023, the BDI registered a low of 530 on February 16, 2023 and a high of 3,346 on December 4, 2023.

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In the decade from 2010 to 2020 the performance of the BDI has been characterized by high volatility, as the growth in the size of the dry bulk fleet outpaced growth in vessel demand for an extended period of time.

Specifically, in the period from 2010 to 2023, the size of the fleet in terms of deadweight tons grew by an annual average of about 5.0% while the corresponding growth in demand for dry bulk carriers grew by 3.0%, resulting in a drop of about 50% in the value of the BDI over the period. In 2021, this volatility was apparent once again with the BDI registering a low of 1,303 on February 10, 2021 and a high of 5,650 on October 7, 2021. However, as the total size of the dry bulk fleet rose by about 3.6%, compared to demand growth of 3.8%, BDI increased by approximately 61% versus the previous year. In 2022, higher industrial input costs caused by rising inflation, the adverse economic impact of the Russian invasion of Ukraine and the extensive covid lockdowns in China combined to produce a negative effect on vessel demand, which registered a decline of 2.7% versus 2021. Dry bulk fleet supply rose by 2.8% in 2022, with effective fleet supply rising even further due to the unwinding of congestion caused by covid related vessel port delays. As a result of these factors, 2022 was a volatile year with the BDI reaching a high of 3,369 on May 23, 2022 and a low of 962 on August 31, 2022.  In 2023, the total size of the dry bulk fleet rose by about 3.1%, compared to demand growth of 5.2%. According to tentative projections, the total size of the dry bulk fleet is expected to rise by about 2.3% in 2024, compared to expected demand growth of 1.5%.

 Meanwhile, the wars between Russia and Ukraine and between Israel and Hamas have amplified the volatility in the dry bulk market with the BDI ranging since the beginning of the year up to March 28, 2024 between 1,308 and 2,419. In the short term, the effect of the invasion of Ukraine was mildly positive for the dry bulk market, yet the long-term effect, taking into consideration the indirect effects of the war, remains hard to determine with certainty. On one hand, changes in ton-mile demand have generally been supportive for the dry bulk market, given that cargoes such as grains, coal and iron ore exported previously from Ukraine and Russia were substituted by cargoes from different sources, while on the other hand the indirect negative effects of the war on general economic activity have reduced demand for industrial commodities to a certain extent.

As 100% of our fleet is employed on index-linked charter contracts, we will be exposed to any near-term volatility in the charter market, to the extent that we have not hedged the index-linked earnings through forward freight agreements. We believe we have structured our capital expenditure requirements, debt commitments and liquidity resources in a way that will provide us with financial flexibility (see “Item 5. Operating and Financial Review and Prospects - B. Liquidity and Capital Resources” for more information).

In addition, the continuing war in Ukraine has increased economic uncertainty amidst fears of a more generalized military conflict or significant inflationary pressures. Ultimately, the effects of these developments on charter rates, vessel demand and operating expenses in the dry bulk sector are uncertain. As described above, the initial effect of the invasion in Ukraine on the dry bulk freight markets ranged from neutral to positive, while the longer-term net impact on the dry bulk freight markets and our business, if any, would be difficult to predict. Regarding the possible impact of supply chain disruptions that have or may emanate from the military conflict in Ukraine, our operations have not been affected materially and we do not expect them to be in the future. The trading patterns of our vessels do not currently involve calling at Russian or Ukrainian ports, while on the other hand our suppliers and service providers have so far not been subject to any restrictions or disruptions in their operations. However, a potential area of impact has to do with the crewing of our vessels, as Ukraine, and Russia are major crewing hubs for the shipping industry. As a result, we expect disruptions and increased costs might be encountered in sourcing crew members for our fleet. This is expected to be a general issue for the shipping industry, which we do not expect will materially worsen our competitive position in the market.

Following the outbreak of the 2023 Israel–Hamas war, missile attacks by the Houthis have been reported at vessels passing off Yemen’s coast in the Red Sea in December 2023. This has caused several vessels to divert via the Cape of Good Hope in South Africa, in order to avoid transiting the Red Sea. The initial effect of Red Sea tensions on the dry bulk market has been positive for the dry bulk market as the longer route via Cape of Good Hope is absorbing more vessels, thereby reducing supply. Looking forward, it is impossible to predict the course of this conflict and whether there would be any serious escalation emanating from the current state of affairs. Similar to the war in Ukraine, we believe that a generalized conflict involving several Middle Eastern nations would possibly result in higher inflation and possibly slower economic growth, which could potentially have an adverse effect on the demand for dry bulk commodities. To the extent that Red Sea tensions remain contained to the region, the effects on the dry bulk market could be similar to what we have seen so far. Apart from the effect on the dry bulk market, the current situation presents a significant safety hazard for all vessels transiting the Red Sea, and could ultimately potentially result in heavy damage being sustained due to successful missile strikes.

Although inflation has had a moderate impact on our vessel operating expenses and corporate overheads, management does not consider inflation to be a significant risk to direct costs in the current and foreseeable economic environment. It is anticipated that insurance costs, which have risen over the last three years, may well continue to rise over the next few years. Maritime transportation is a specialized area and the number of vessels is increasing. There will therefore be an increased demand for qualified crew and this has and will continue to put inflationary pressure on crew costs. However, in a shipping downturn, costs subject to inflation can usually be controlled because shipping companies typically monitor costs to preserve liquidity and encourage suppliers and service providers to lower rates and prices in the event of a downturn.

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Important Measures and Definitions for Analyzing Results of Operations

We use a variety of financial and operational terms and concepts. These include the following:

Ownership days. Ownership days are the total number of calendar days in a period during which we owned or chartered in on bareboat basis each vessel in our fleet. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses recorded during that period. Our calculation of Ownership Days may not be comparable to that reported by other companies due to differences in methods of calculation.

Available days. Available days are the number of ownership days less the aggregate number of days that our vessels are off-hire due to major repairs, dry-dockings, lay-up or special or intermediate surveys. The shipping industry uses available days to measure the aggregate number of days in a period during which vessels are available to generate revenues. Our calculation of Available Days may not be comparable to that reported by other companies due to differences in methods of calculation.

Operating days. Operating days are the number of available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseen circumstances. Operating days include the days that our vessels are in ballast voyages without having fixed their next employment. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels could actually generate revenues. Our calculation of Operating Days may not be comparable to that reported by other companies due to differences in methods of calculation.

Fleet utilization. Fleet utilization is the percentage of time that our vessels were generating revenues and is determined by dividing operating days by ownership days for the relevant period. Fleet Utilization is used to measure a company’s ability to efficiently find suitable employment for its vessels and minimize the number of days that its vessels are off-hire for unforeseen events. We believe it provides additional meaningful information and assists management in making decisions regarding areas where we may be able to improve efficiency and increase revenue and because we believe that it provides useful information to investors regarding the efficiency of our operations.

Off-hire. The period a vessel is not being chartered or is unable to perform the services for which it is required under a charter.

Dry-docking. We periodically dry-dock each of our vessels for inspection, repairs and maintenance and any modifications to comply with industry certification or governmental requirements.

Time charter. A time charter is a contract for the use of a vessel for a specific period of time (period time charter) or for a specific voyage (trip time charter) during which the charterer pays substantially all of the voyage expenses, including port charges, bunker expenses, canal charges and other commissions. The vessel owner pays the vessel operating expenses, which include crew costs, provisions, deck and engine stores and spares, lubricants, insurance, maintenance and repairs. The vessel owner is also responsible for each vessel’s dry-docking and intermediate and special survey costs. Time charter rates are usually index linked during the term of the charter. Prevailing time charter rates do fluctuate on a seasonal and year-to-year basis and may be substantially higher or lower from a prior time charter agreement when the subject vessel is seeking to renew the time charter agreement with the existing charterer or enter into a new time charter agreement with another charterer. Fluctuations in time charter rates are influenced by changes in spot charter rates.

Bareboat charter.  A bareboat charter is generally a contract pursuant to which a vessel owner provides its vessel to a charterer for a fixed period of time at a specified daily rate. Under a bareboat charter, the charterer assumes responsibility for all voyage and vessel operating expenses and risk of operation.

Voyage charter.  A voyage charter is generally a contract to carry a specific cargo from a load port to a discharge port for an agreed-upon total amount. Under voyage charters, voyage expenses, such as port charges, bunker expenses, canal charges and other commissions, are paid by the vessel owner, who also pays vessel operating expenses.

TCE.  Time charter equivalent, or TCE, rate is defined as our net revenue less voyage expenses during a period divided by the number of our operating days during the period. Voyage expenses include port charges, bunker expenses, canal charges and other commissions.

Daily Vessel Operating Expenses. Daily Vessel Operating Expenses are calculated by dividing vessel operating expenses less pre-delivery expenses by ownership days for the relevant time periods. Vessel operating expenses include crew costs, provisions, deck and engine stores, lubricants, insurance, maintenance and repairs. Vessel operating expenses before pre-delivery expenses exclude one-time pre-delivery and pre-joining expenses associated with initial crew manning and supply of stores of Company’s vessels upon delivery.

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Performance Indicators

The figures shown below are non-GAAP statistical ratios used by management to measure performance of our vessels. For the “Fleet Data” figures, there are no comparable U.S. GAAP measures.


   
Year Ended December 31,
  
Fleet Data:
  
2023
    
2022
    
2021
  
                 
Ownership days
    
6,008
      
6,219
      
5,140
  
Available days(1)
    
6,008
      
5,954
      
5,040
  
Operating days(2)
    
5,953
      
5,905
      
4,987
  
Fleet utilization
    
99.1
%
    
95.0
%
    
97.0
%
                         
Average Daily Results:
                        
TCE rate(3)
  
$
17,501
    
$
20,040
    
$
27,399
  
Daily Vessel Operating Expenses(4)
  
$
6,879
    
$
6,819
    
$
6,211
  

(1)
During the year ended December 31, 2023, we had no off-hire days for scheduled dry-dockings and ballast water treatment installation for our vessels. During the year ended December 31, 2022, we incurred 265 off-hire days for seven scheduled dry-dockings and ballast water treatment installation on two of our vessels.

(2)
During the year ended December 31, 2023, we incurred 55 off-hire days due to unforeseen circumstances. During the year ended December 31, 2022, we incurred 49 off-hire days due to unforeseen circumstances.

(3)
We include TCE rate, which is not a recognized measure under U.S. GAAP measure, as we believe it provides additional meaningful information in conjunction with net revenues from vessels, the most directly comparable U.S. GAAP measure and because it assists our management in making decisions regarding the deployment and use of our vessel and because we believe that it provides useful information to investors regarding our financial performance. Our calculation of TCE rate may not be comparable to that reported by other companies. The following table reconciles our net revenues from vessels to TCE rate.

   
Year Ended December 31,
  
(In thousands of US Dollars, except operating days and TCE rate)
  
2023
    
2022
    
2021
  
                   
Net revenues from vessels
  
$
107,036
    
$
122,629
    
$
153,108
  
Voyage expenses
    
(2,851
)
    
(4,293
)
    
(16,469
)
Time charter equivalent revenues
  
$
104,185
    
$
118,336
    
$
136,639
  
Operating days
    
5,953
      
5,905
      
4,987
  
Daily time charter equivalent rate
  
$
17,501
    
$
20,040
    
$
27,399
  

(4)
We include Daily Vessel Operating Expenses, which is not recognized under U.S. GAAP measure, as we believe it provides additional meaningful information and assists management in making decisions regarding the deployment and the use of our vessels and because we believe that it provides useful information to investors regarding our financial performance. Our calculation of Daily Vessel Operating Expenses may not be comparable to that reported by other companies. The following table reconciles our vessels operating expenses to Daily Vessel Operating Expenses.
 
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(In thousands of US Dollars, except ownership days and Daily Vessel Operating Expenses)
  
Year Ended December 31,
  
   
2023
    
2022
    
2021
  
                   
Vessel operating expenses
  
$
42,260
    
$
43,550
    
$
36,332
  
Less: Pre-delivery expenses
    
(933
)
    
(1,144
)
    
(4,410
)
Vessel operating expenses before pre-delivery expenses
    
41,327
      
42,406
      
31,922
  
Ownership days
    
6,008
      
6,219
      
5,140
  
Daily Vessel Operating Expenses
  
$
6,879
    
$
6,819
    
$
6,211
  

Please also see “–B. Liquidity and Capital Resources.”

E.
Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of those financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions and conditions.

Critical accounting estimates are those that reflect significant judgments of uncertainties and potentially result in materially different results under different assumptions and conditions. We have described below what we believe is our most critical accounting estimate, because it generally involves a comparatively higher degree of judgment in its application. For a description of all our significant accounting policies, see Note 2 to our annual audited financial statements included in this annual report.

Impairment of long-lived assets (Vessels)

The Company’s long-lived assets are comprised of its owned vessels and the vessel acquired through a finance lease for which the Company has recorded a right of use asset. Reference to vessel for purposes of this discussion refers to both our vessels and the one vessel for which we have a right of use, unless otherwise stated. We review our Vessels for impairment whenever events or changes in circumstances, such as prevailing market conditions, obsolescence or damage to the asset, business plans to dispose a vessel earlier than the end of its useful life and other business plans, indicate that the carrying amount of the assets, plus any unamortized dry-docking costs, may not be recoverable. The volatile market conditions in the dry bulk market with decreased charter rates and decreased vessel market values are conditions we consider to be indicators of a potential impairment for our vessels. In the event the independent fair market value of a vessel is lower than its carrying value, we determine undiscounted projected operating cash flows for such vessel and compare it to the vessel’s carrying value, plus any unamortized dry-docking costs.  When the undiscounted projected operating cash flows expected to be generated by the use of the vessel and/or its eventual disposition are less than its carrying value, plus any unamortized dry-docking costs, we impair the carrying amount of the vessel. Measurement of the impairment loss is determined by the Company based on the fair value of the asset as determined by independent valuators and use of available market data. The undiscounted projected operating cash inflows are determined by considering the estimated future charter rate for the first calendar year, using  the average of three published third party estimates and for the period thereafter up to the end of the estimated useful life of the vessel the average 10-year historical daily charter earnings of similar size vessels excluding the outliers, published by a third party, adjusted for estimated commissions, expected off hires due to scheduled vessels’ maintenance and estimated unexpected off hires. In addition, an estimate of additional daily revenue for the scrubber-fitted vessels is also included, reflecting additional compensation from charterers that the Company earns due to the fuel cost savings that these vessels provide. The undiscounted projected operating cash outflows are determined by applying various assumptions regarding vessel operating expenses, management fees and scheduled vessels’ maintenance.

Our assessment concluded that no impairment loss should be recorded as of December 31, 2023 and 2022.

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Our Fleet – Illustrative Comparison of Possible Excess of Carrying Value Over Estimated Charter-Free Market Value of Certain Vessels

Historically, the market values of vessels have experienced volatility, which from time to time may be substantial.  As a result, the charter-free market value of certain of our vessels may have declined below those vessels’ carrying value, even though we would not impair those vessels’ carrying value under our accounting impairment policy. The table set forth below indicates (i) the carrying value of each of our vessels as of December 31, 2023 and 2022, respectively, and (ii) which of our vessels we believe had a basic market value below their carrying value. The carrying value includes, as applicable, vessel costs, plus any unamortized deferred dry-docking costs. This aggregate difference between the carrying value of these vessels and their market value of $14.1 million and $38.7 million, as of December 31, 2023 and 2022, respectively, represents the amount by which we believe we would have had to reduce our net income if we sold all of such vessels, on industry standard terms, in cash transactions, and to a willing buyer where we are not under any compulsion to sell, and where the buyer was not under any compulsion to buy as of December 31, 2023 and 2022, respectively. For purposes of this calculation, we assumed that the vessels would be sold at a price that reflected our estimate of their charter-free market values as of December 31, 2023 and 2022, respectively.

Our estimates of charter-free market value assume that our vessels were all in good and seaworthy condition without need for repair and if inspected would be certified in class without notations of any kind. Our estimates are based on information available from various industry sources, including:

•
reports by industry analysts and data providers that focus on our industry and related dynamics affecting vessel values;
•
news and industry reports of similar vessel sales;
•
offers that we may have received from potential purchasers of our vessels; and
•
vessel sale prices and values of which we are aware through both formal and informal communications with shipowners, shipbrokers, industry analysts and various other shipping industry participants and observers.

As we obtain information from various industry and other sources, our estimates of basic market value are inherently uncertain. In addition, vessel values are highly volatile; as such, our estimates may not be indicative of the current or future basic market value of our vessels or prices that we could achieve if we were to sell them.

 Carrying Value plus any unamortized dry-docking costs as of

Vessel
Year Built
  
Dwt
    
December 31, 2023
(in millions of U.S. dollars)
    
December 31, 2022
(in millions of U.S. dollars)
  
Titanship
2011
    
207,855
      
29.6
      
-
  
Patriotship
2010
    
181,709
      
23.2
      
24.6
  
Dukeship
2010
    
181,453
      
30.3
*
    
32.2
*
Worldship
2012
    
181,415
      
29.9
      
31.6
*
Paroship
2012
    
181,415
      
29.4
      
31.0
*
Hellasship
2012
    
181,325
      
26.1
      
28.1
*
Honorship
2010
    
180,242
      
31.4
*
    
33.5
*
Fellowship
2010
    
179,701
      
24.2
      
25.8
*
Championship
2011
    
179,238
      
33.0
*
    
35.6
*
Partnership
2012
    
179,213
      
29.3
      
31.7
*
Knightship
2010
    
178,978
      
19.4
      
20.6
  
Lordship
2010
    
178,838
      
18.9
      
19.9
  
Friendship
2009
    
176,952
      
23.2
      
25.3
*
Flagship
2013
    
176,387
      
26.8
      
28.7
  
Geniuship
2010
    
170,057
      
20.8
      
22.2
  
Premiership
2010
    
170,024
      
24.0
      
25.4
*
Squireship
2010
    
170,018
      
26.9
*
    
28.7
*
TOTAL
              
446.4
      
444.9
  

* Indicates dry bulk carrier vessels for which we believe, as of December 31, 2023 and 2022, respectively, the basic charter-free market value was lower than the vessel’s and right-of use asset’s carrying value plus any unamortized dry-docking costs.

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As presented in Balance Sheets as of December 31, 2023 and 2022.

   
December 31,
2023
(in millions of U.S. dollars)
    
December 31,
2022
(in millions of U.S. dollars)
  
Vessels, net
    
410.4
      
434.1
  
Finance lease, right-of use asset
    
29.6
      
-
  
Deferred charges and other investments, non-current
    
6.4
      
10.8
  
Total
    
446.4
      
444.9
  

We refer you to the risk factor entitled “The market values of our vessels may decrease, which could limit the amount of funds that we can borrow or trigger certain financial covenants under our loan agreements and other financing agreements, and we may incur an impairment or, if we sell vessels following a decline in their market value, a loss.”

Although we believe that the assumptions used to evaluate potential asset impairment are based on historical trends and are reasonable and appropriate, such assumptions are highly subjective. There can be no assurance as to how charter rates and vessel values will fluctuate in the future. Charter rates may, from time to time throughout our vessels’ lives, remain for a considerable period of time at depressed levels which could adversely affect our revenue and profitability, and future assessments of vessel impairment. To minimize such subjectivity, our analysis for the years ended December 31, 2023 and 2022 also involved sensitivity analysis to the model input we believe is more important and likely to change. In particular, in terms of our estimates for the time charter equivalent for the unfixed period, we use a combination of one-year charter rates estimate and the average of the trailing 10-year historical charter rates, excluding outliers. Although the trailing 10-year historical charter rates, excluding the outliers, cover at least a full business cycle, we sensitized our model with regards to long-term historical charter rate assumptions for the unfixed period beyond the first year. The impairment test that we conduct, when required, is most sensitive to variances in future time charter rates. Our sensitivity analysis revealed that, to the extent that going forward the 10-year historical charter rates, excluding the outliers, would not decline by more than 8% for Capesize vessels, we would not be required to recognize impairment. For the year ended December 31, 2023, indicators of impairment existed for four of our vessels as their carrying value plus any unamortized dry-docking costs was higher than their market value. The carrying value of the four vessels plus any unamortized dry-docking costs for which impairment indicators existed as at December 31, 2023, was $121.6 million.

ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.
Directors and Senior Management

Set forth below are the names, ages and positions of our current directors and executive officers. Members of our board of directors are elected annually on a staggered basis, and each director elected holds office for a three-year term. Officers are elected from time to time by vote of our board of directors and hold office until a successor is elected. The business address of each of our directors and executive officers listed below is 154 Vouliagmenis Avenue, 166 74 Glyfada, Greece.

Name
  
Age
  
Position
  
Director Class
Stamatios Tsantanis
  
52
  
Chairman, Chief Executive Officer & Director
  
A (term expires in 2025)
Stavros Gyftakis
  
45
  
Chief Financial Officer
    
Christina Anagnostara
  
53
  
Director*
  
B (term expires in 2026)
Elias Culucundis
  
81
  
Director*
  
A (term expires in 2025)
Dimitrios Anagnostopoulos
  
77
  
Director*
  
C (term expires in 2024)
Ioannis Kartsonas
  
52
  
Director*
  
C (term expires in 2024)

*Independent Director

Biographical information with respect to each of our directors and our executive officers is set forth below.

Stamatios Tsantanis has been a member of our board of directors and our Chief Executive Officer since October 1, 2012 and has led the Company’s significant growth to a world-renowned Capesize dry bulk company with a carrying capacity of approximately 3.1 million dwt. In addition, Mr. Tsantanis has been the Chairman of our board of directors since October 1, 2013 and also served as our Interim Chief Financial Officer from November 1, 2013 until October 2, 2018. Mr. Tsantanis is also the founder, Chairman, Chief Executive Officer and a member of the board of directors of United. Mr. Tsantanis has been actively involved in the shipping and finance industry since 1998 and has held senior management positions in prominent private and public shipping companies and financial institutions. He was formerly an investment banker at Alpha Finance, a member of the Alpha Bank Group, with active roles in a number of major shipping corporate finance transactions in the U.S. capital markets. Mr. Tsantanis holds a Master of Science (MSc) in Shipping Trade and Finance from Bayes Business School (formerly known as Cass Business School) of City University in London and a Bachelor of Science (BSc) in Shipping Economics from the University of Piraeus. He also serves in the board of directors of Breakwave Advisors LLC, the advisor of ETFMG (the manager of the NYSE-listed BDRY and BSEA) and is a fellow of the Institute of Chartered Shipbrokers.

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Stavros Gyftakis has served as our Chief Financial Officer since 2018, previously served as Finance Director since November 2017 and he has been instrumental in Seanergy’s capital raising, debt financing and refinancing activities since 2017. Mr. Gyftakis is also the Chief Financial Officer and a director in the board of directors of United. He has more than 18 years of experience in banking and corporate finance with focus on the shipping sector. Mr. Gyftakis has held key positions across a broad shipping finance spectrum, including, asset backed lending, debt and corporate restructurings, risk management, financial leasing and loan syndications. Before joining Seanergy, he was a Senior Vice President in the Greek shipping finance desk at DVB Bank SE. Mr. Gyftakis received his Master of Science (MSc) in Shipping Trade and Finance from Bayes Business School (formerly known as Cass Business School) in London with Distinction and holds a Master of Science (MSc) in Business Mathematics, awarded with Honors, from the Athens University of Economics and Business and a Bachelor of Science (BSc) in Mathematics from the Aristotle University of Thessaloniki.

Christina Anagnostara has been a member of our board of directors since December 2008 and she is a member of Seanergy’s Sustainability Committee. She has served as our Chief Financial Officer from November 17, 2008 until October 31, 2013. Since June 2022, Ms. Anagnostara is also a director in the board of directors of United.  She has more than 26 years of maritime and international business experience in the areas of finance, banking, capital markets, consulting, accounting and audit. Before joining Seanergy, she served in executive and board positions of publicly listed companies in the maritime industry and she was responsible for the financial, capital raising and accounting functions. Since June 2017 she is a Managing Director in the Investment Banking Division of AXIA Ventures Group and between 2014 and 2017 she provided advisory services to corporate clients involved in all aspects of the maritime industry. From 2006 to 2008, she served as the Chief Financial Officer and member of the board of directors of Global Oceanic Carriers Ltd, a dry bulk shipping company listed on the Alternative Investment Market of the London Stock Exchange. Between 1999 and 2006, she was a senior management consultant of the Geneva-based EFG Group. Prior to EFG Group, she worked for Eurobank EFG and Ernst & Young. Ms. Anagnostara has studied Economics in Athens and is a Certified Chartered Accountant.

Elias Culucundis has been a member of our board of directors since our inception, he is the Chairman and a member of   the Compensation and Nominating Committees and a member of the Audit Committee of Seanergy. Since 1999, Mr. Culucundis has been the President, Chief Executive Officer and Director of Equity Shipping Company Ltd., a company specializing in starting, managing and operating commercial and technical shipping projects. Additionally, from 1996 to 2000, he was a Director of Kassian Maritime Shipping Agency Ltd., a vessel management company operating a fleet of ten bulk carriers. During this time, Mr. Culucundis was also a Director of Point Clear Navigation Agency Ltd, a marine project company. From 1981 to 1995, Mr. Culucundis was a Director of Kassos Maritime Enterprises Ltd., a company engaged in vessel management. While at Kassos, he was initially a technical Director and eventually ascended to the position of Chief Executive Officer, overseeing a large fleet of Panamax, Aframax and VLCC tankers, as well as overseeing new vessel building contracts, specifications and the construction of newbuildings. From 1971 to 1980, Mr. Culucundis was a Director and the Chief Executive Officer of Off Shore Consultants Inc. and Naval Engineering Dynamics Ltd. In Off Shore Consultants Inc. he worked in Floating Production, Storage and Offloading vessel, or FPSO, design and construction and was responsible for the technical and commercial supervision of a pentagon-type drilling rig utilized by Royal Dutch Shell Plc. Seven FPSOs were designed and constructed that were subsequently utilized by Pertamina, ARCO, Total and Elf-Aquitaine. Naval Engineering Dynamics Ltd. was responsible for purchasing, re-building and operating vessels that had suffered major damage. From 1966 to 1971, Mr. Culucundis was employed as a Naval Architect for A.G. Pappadakis Co. Ltd., London, responsible for tanker and bulk carrier new buildings and supervising the technical operation of their fleet. He is a graduate of Kings College, Durham University, Great Britain, with a degree in Naval Architecture and Shipbuilding. He is a member of the Hellenic National Committee of American Bureau of Shipping and he served in the Council of the Union of Greek Shipowners. Mr. Culucundis is a Fellow of the Royal Institute of Naval Architects and a Chartered Engineer.

Dimitrios Anagnostopoulos has been a member of our board of directors since May 2009 and he is also the Chairman and a member of the Audit Committee and a member of the Compensation and Nominating Committees of Seanergy. Mr. Anagnostopoulos has over 50 years of experience in Shipping, Ship finance and Bank Management. Mr. Anagnostopoulos obtained his BSc at the Athens University of Economics and Business. His career began in the 1970’s as Assistant Lecturer at the same University followed by four years with the Onassis Shipping Group in Monaco. Mr. Anagnostopoulos also held various posts at the National Investment Bank of Industrial Development (ETEBA), Continental Illinois National Bank of Chicago, the Greyhound Corporation, and with ABN AMRO, where he spent nearly two decades with the bank, holding the positions of Senior Vice-President and Head of Shipping. From 2010 to 2023 he was a Board Member in the Aegean Baltic Bank. Since then, he remains an advisor to Aegean Baltic Bank’s management. In September 2023 he was elected Board Member of NYSE-listed Dynagas LNG Partners LP. Mr. Anagnostopoulos has been a speaker and panelist in various shipping conferences in Europe, and a regular guest lecturer at the Bayes Business School (formerly known as Cass Business School) of City University in London, the Athens University of Economics and Business and the ALBA Graduate Business School. He is a member (and ex-vice chairman) of the Association of Banking and Financial Executives of Greek Shipping and an Associate Member of the Institute of Energy of South East Europe. In 2008 he was named by the Lloyd’s Organization as Shipping Financier of the Year.

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Ioannis Kartsonas has been a member of our board of directors since May 2017 and he is the Chairman and a member of Seanergy’s Sustainability Committee. Mr. Kartsonas has also been a member of the board of directors of United since June 2022 and he is the Principal and Managing Partner of Breakwave Advisors LLC, a commodity-focused advisory firm based in New York. Mr. Kartsonas has been actively involved in finance and commodities trading since 2000. From 2011 to 2017, he was a Senior Portfolio Manager at Carlyle Commodity Management, a commodity-focused investment firm based in New York and part of the Carlyle Group, being responsible for the firm’s shipping and freight investments. During his tenure, he managed one of the largest freight futures funds globally. Prior to his role, Mr. Kartsonas was a Co-Founder and Portfolio Manager at Sea Advisors Fund, an investment fund focused in shipping. From 2004 to 2009, he was the leading Transportation Analyst at Citi Investment Research covering the broader transportation space, including the shipping industry. Prior to that, he was an Equity Analyst focusing on shipping and energy for Standard & Poor’s Investment Research. Mr. Kartsonas holds an MBA in Finance from the Simon School of Business, University of Rochester.

No family relationships exist among any of the directors and executive officers.

As a foreign private issuer listed on the Nasdaq Capital Market, we are required to disclose certain self-identified diversity characteristics about our directors pursuant to Nasdaq’s board diversity and disclosure rules approved by the Commission in August 2021. The Board Diversity Matrix set forth below contains the requisite information as of the date of this annual report.

Board Diversity Matrix (As of March 28, 2024)
 
To be completed by Foreign Issuers (with principal executive offices outside of the U.S.) and Foreign Private Issuers
Greece
  
Foreign Private Issuer
Yes
Disclosure Prohibited under Home Country Law
No
Total Number of Directors
5
 
Female
Male
Non-Binary
Did Not Disclose Gender
Part I: Gender Identity
Directors
1
4
0
0
Part II: Demographic Background
Underrepresented Individual in Home Country Jurisdiction
0
LGBTQ+
0
Did Not Disclose Demographic Background
0

B.
Compensation

For the year ended December 31, 2023, the Company paid its executive officers and directors aggregate compensation of $1.6 million. The Company’s executive officers are employed pursuant to employment and consulting contracts. We do not have a retirement plan for our officers or directors.

Each member of the Company’s board of directors received a fee of $0.1 million in 2023. The aggregate director fees paid by the Company for the years ended December 31, 2023, 2022 and 2021 totaled $0.5 million, $0.4 million and $0.4 million, respectively.

On January 12, 2011 our board of directors adopted the Seanergy Maritime Holdings Corp. 2011 Equity Incentive Plan, or the Plan. On January 12, 2022, the Plan, as previously amended, was further amended and restated to increase the aggregate number of shares of the common stock reserved for issuance under the Plan to 550,000 shares. On July 8, 2022, the Plan was further amended and restated to increase the aggregate number of shares of common stock reserved for issuance under the Plan to 400,000 shares. On March 27, 2023, the Plan was further amended and restated to increase the aggregate number of shares of common stock reserved for issuance under the Plan to 2,000,000 shares. On March 27, 2024, the Plan was further amended and restated to increase the aggregate number of shares of common stock reserved for issuance under the Plan to 550,000 shares. The Plan is administered by the Compensation Committee of our board of directors. Under the Plan, our officers, key employees, directors, consultants and service providers may be granted incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, and unrestricted stock at the discretion of our Compensation Committee. Any awards granted under the Plan that are subject to vesting are conditioned upon the recipient’s continued service as an employee or a director of the Company, through the applicable vesting date.

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On March 27, 2023, the Compensation Committee granted an aggregate of 1,823,800 restricted shares of common stock pursuant to the Plan. Of the total 1,823,800 shares issued on March 27, 2023, 1,330,000 shares were granted to the non-executive members of the board of directors and to the executive officers and 493,800 shares were granted to certain of the Company’s non-executive employees and to the sole director of the Company’s commercial manager, a non-employee. The fair value of each share on the grant date was $5.22. 607,974 shares vested on the date of the issuance, March 27, 2023, 607,913 shares vested on October 1, 2023 and 607,580 shares will vest on October 1, 2024, taking into consideration 333 forfeited shares. On March 27, 2024, the Compensation Committee granted an aggregate of 502,500 restricted shares of common stock pursuant to the Plan. Of the total 502,500 shares issued on March 27, 2024, 285,000 shares were granted to the non-executive members of the board of directors and to the executive officers and 217,500 shares were granted to certain of the Company’s non-executive employees and to the sole director of the Company’s commercial manager, a non-employee. The fair value of each share on the grant date was $8.42. Of the total restricted shares issued, 107,250 shares vested on the date of the issuance, March 27, 2024, 143,250 shares will vest on September 27, 2024, 108,000 shares will vest on March 27, 2025 and 144,000 shares will vest on September 26, 2025.

C.
Board Practices

Our directors do not have service contracts and do not receive any benefits upon termination of their directorships.  Our board of directors has an audit committee, a compensation committee, a nominating committee and a sustainability committee.  Our board of directors has adopted a charter for each of these committees.

Audit Committee

Our audit committee consists of Messrs. Dimitrios Anagnostopoulos and Elias Culucundis. Our board of directors has determined that the members of the audit committee meet the applicable independence requirements of the Commission and the Nasdaq Stock Market Rules. Our board of directors has determined that Mr. Dimitrios Anagnostopoulos is an “Audit Committee Financial Expert” under the Commission’s rules and the corporate governance rules of the Nasdaq Stock Market.

The audit committee has powers and performs the functions customarily performed by such a committee (including those required of such a committee by Nasdaq and the Commission). The audit committee is responsible for selecting and meeting with our independent registered public accounting firm regarding, among other matters, audits and the adequacy of our accounting and control systems.

Compensation Committee

Our compensation committee consists of Messrs. Dimitrios Anagnostopoulos and Elias Culucundis, each of whom is an independent director.  The compensation committee reviews and approves the compensation of our executive officers.

Nominating Committee

Our nominating committee consists of Messrs. Elias Culucundis and Dimitrios Anagnostopoulos, each of whom is an independent director.  The nominating committee is responsible for overseeing the selection of persons to be nominated to serve on our board of directors.

Sustainability Committee

Our sustainability committee was established on December 19, 2022 and it consists of Mr. Ioannis Kartsonas and Ms. Christina Anagnostara, each of whom is an independent director.  The sustainability committee promotes sustainability practices, guides, assists and supervises the Company in developing, articulating, and continuing to evolve, sustainability policies for the Company comprising environmental, social and governance matters. Additionally, it assesses the Company’s sustainability key risks and opportunities in relation to climate and environmental, social and governance aspects.

D.
Employees

As of December 31, 2023, 2022 and 2021, we had two executive officers, Mr. Stamatios Tsantanis and Mr. Stavros Gyftakis, and we employed Ms. Theodora Mitropetrou, our general counsel.  In addition, as of December 31, 2023, 2022 and 2021, we employed a support staff consisting of 81, 63 and 46 employees, respectively.

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E.
Share Ownership

The common shares beneficially owned by our directors and executive officers are disclosed below in “Item 7. Major Shareholders and Related Party Transactions.”

ITEM 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.
Major Shareholders

The following table sets out information as of the date of this annual report regarding the beneficial ownership of our common shares by (i) the owners of five percent or more of our outstanding common shares and (ii) our directors and executive officers.  The beneficial ownership information set forth in the table below is based on beneficial ownership reports furnished to the Commission or information regarding the beneficial ownership of our common shares delivered to us.  To the best of our knowledge, except as disclosed in the table below or with respect to our directors and executive officers, we are not controlled, directly or indirectly, by another corporation, by any foreign government or by any other natural or legal persons.  All of our shareholders, including the shareholders listed in this table, are entitled to one vote for each common share held.

Identity of Person or Group
Number of Shares Owned
Percent of Class (1)
Stamatios Tsantanis (2)
20,000 Series B Preferred Shares
100%
 
1,619,003 Common Shares
7.9%
George Economou (3)
1,859,096 Common Shares
9.1%
Konstantinos Konstantakopoulos (4)
1,265,847 Common Shares
6.2%
Stavros Gyftakis
231,345 Common Shares
1.1%
Christina Anagnostara
202,239 Common Shares
1.0%
Dimitrios Anagnostopoulos
93,333 Common Shares
0.5%
Ioannis Kartsonas
80,422 Common Shares
0.4%
Elias Culucundis
66,800 Common Shares
0.3%
Directors and executive officers as a group (6 individuals)
2,293,142 Common Shares
11.2%

(1)
Calculation of percent of class beneficially owned by each such person is based on 20,512,075 common shares outstanding as of March 28, 2024 and any additional shares that such person may be deemed to beneficially own in accordance with Rule 13d-3 under the Exchange Act.

(2)
Stamatios Tsantanis beneficially owns 20,000 Series B Preferred Shares, constituting 100% of our issued and outstanding Series B Preferred Shares, which were issued on December 10, 2021 pursuant to a stock purchase agreement between us and Stamatios Tsantanis.  Through his ownership of common shares and Series B Preferred Shares, Stamatios Tsantanis controls 49.99% of the voting power of our outstanding capital stock.  For a description of the Series B Preferred Shares, see “Description of Securities” filed as Exhibit 2.5 hereto. In our annual reports for the years ended December 31, 2022, 2021, and 2020, Stamatios Tsantanis was reported to beneficially own 6.8%, 2.0%, and less than one percent of our outstanding common shares, respectively.

(3)
This information is derived from an Amendment No. 5 to Schedule 13D jointly filed with the Commission on March 5, 2024 by Sphinx Investment Corp., Maryport Navigation Corp. and George Economou.  Based on this filing, Sphinx Investment Corp., Maryport Navigation Corp. and George Economou each have beneficial ownership of all shares indicated in the table above. Based on this filing, Sphinx Investment Corp. is a Marshall Islands corporation wholly-owned by Maryport Navigation Corp., which is a Liberian corporation controlled by George Economou. In our annual reports for the three preceding fiscal years, none of Sphinx Investment Corp., Maryport Navigation Corp. or George Economou was reported as an owner of five percent or more of our outstanding common shares.

(4)
This information is derived from an Amendment No. 1 to Schedule 13G jointly filed with the Commission on February 14, 2024 by Longshaw Maritime Investments S.A. and Konstantinos Konstantakopoulos. Based on this filing, Longshaw Maritime Investments S.A. and Konstantinos Konstantakopoulos each have beneficial ownership of all shares indicated in the table above. Based on this filing, Longshaw Maritime Investments S.A. is a Marshall Islands corporation controlled by Konstantinos Konstantakopoulos. In our annual reports for the three preceding fiscal years, neither of Longshaw Maritime Investments S.A. nor Konstantinos Konstantakopoulos was reported as an owner of five percent or more of our outstanding common shares.

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B.
Related Party Transactions

 On December 10, 2021, we entered into a stock purchase agreement and issued 20,000 of our Series B Preferred Shares, par value $0.0001 per share, to our Chairman and Chief Executive Officer, Stamatios Tsantanis, in return for cash consideration of $250,000. The issuance of the Series B preferred shares was approved by a special independent committee of the Board, which received a fairness opinion from an independent financial advisor. For a description of the Series B Preferred Shares, see “Description of Securities” filed as Exhibit 2.5 hereto.

United Spin-Off

On January 20, 2022, United was incorporated by us, under the laws of the Republic of the Marshall Islands to subsequently serve as the holding company of Sea Glorius Shipping Co, the vessel-owning subsidiary of the M/V Gloriuship that was contributed to United by us in connection with the Spin-Off. Additionally, in connection with the Spin-Off, our Chairman and Chief Executive Officer, Stamatios Tsantanis, received 40,000 Series B Preferred Shares, while 5,000 Series C Preferred Shares were issued to us in exchange for $5.0 million working capital contribution. Following the Spin-Off, we and United became independent publicly traded companies. The Spin-Off was pro rata to our shareholders, including holders of our outstanding common shares and Series B preferred shares, so that such holders maintained the same proportionate interest in us and in United both immediately before and immediately after the Spin-Off.

United Right of First Refusal/Offer

Prior to the consummation of the Spin-Off, we entered into a right of first refusal agreement with United pursuant to which we have a right of first refusal with respect to any opportunity available to United to sell, acquire or charter-in any Capesize vessel as well as with respect to chartering opportunities, other than short-term charters with a term of 13 months or less, available to United for Capesize vessels. In addition, United has a right of first offer with respect to any vessel sales by us.  The sales of M/V Goodship and M/V Tradership to United were made pursuant to the right of first refusal agreement.

Management Agreements

Prior to the consummation of the Spin-Off, United entered into a master management agreement with us for the provision of technical, administrative, commercial, brokerage and certain other services. Certain of these services are being contracted directly with our wholly owned subsidiaries, Seanergy Shipmanagement and Seanergy Management. The master management agreement provides for a fixed administration fee of $325 per vessel per day payable to Seanergy. The initial term of United’s master management agreement with us will expire on December 31, 2024. Unless three months’ notice of non-renewal is given by either party prior to the end of the current term, the agreement will automatically extend for additional 12-month periods. The master management agreement may be terminated immediately only for cause and at any time by either party with three months’ prior notice, and no termination fee will be payable.

In relation to technical management, Seanergy Shipmanagement is responsible for arranging, inter alia, for the day-to-day operations, inspections, maintenance, repairs, drydocking, purchasing, insurance and claims handling for the M/Vs Goodship, Gloriuship, Chrisea, Cretansea and Oasea, which are owned or operated by United. The technical management agreements with Seanergy Shipmanagement provide for a fixed management fee of $14,000 per vessel per month. The agreement for the M/V Goodship commenced on March 18, 2024. In 2023 and until March 17, 2024, United was paying to Seanergy Shipmanagement a fixed management fee of $10,000 for the M/V Goodship, which was also co-managed by V.Ships Greece.

Seanergy Management had entered into a commercial management agreement with United pursuant to which Seanergy Management acted as agent for United’s subsidiaries (directly or through subcontracting) for the commercial management of United’s vessels, including chartering, monitoring thereof, freight collection, and sale and purchase. Such agreement was in effect up until April 1, 2023, except for United’s last tanker vessel for which the agreement was valid until her sale in August 2023. Pursuant to this agreement, United was paying to Seanergy Management a fee equal to 1.25% of the gross freight, demurrage and charter hire collected from the employment of our vessels except for any vessels that would be chartered-out to Seanergy. Seanergy Management also earned a fee equal to 1% of the contract price of any vessel bought or sold by them on our behalf until March 31, 2023, except for any vessels bought or sold from or to Seanergy, or in respect of any vessel sale relating to a sale leaseback transaction.

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United Management Corp. (“United Management”), a subsidiary of United, has entered into a commercial management agreement with Seanergy Management, pursuant to which effective April 1, 2023 Seanergy Management acts as agent for United’s subsidiaries for the commercial management of their vessels, including post-fixture, monitoring thereof, freight collection, and sale and purchase. Pursuant to this agreement, each subsidiary is paying to Seanergy Management a commission fee equal to 0.75% of the collected gross hire, freight/ and demurrage and a fee equal to 1% of the contract price of any vessel bought, sold or bareboat chartered by Seanergy Management on United Management’s behalf, except for any vessels bought, sold or bareboat chartered from or to Seanergy, or in respect of any vessel sale relating to a sale and leaseback transaction.

Additional vessels that United may acquire in the future may be managed by us.

Contribution and Conveyance Agreement

Prior to the consummation of the Spin-Off, we entered into a contribution and conveyance agreement with United. Pursuant to the Contribution and Conveyance Agreement, we, in conjunction with the Spin-Off, (i) contributed Sea Glorius Shipping Co., together with $5.0 million in working capital and (ii) United agreed to indemnify us and Sea Glorius Shipping Co. for any and all obligations and other liabilities arising from or relating to the operation, management or employment of M/V Gloriuship prior to the effective date of the Spin-Off.

Share Purchase Agreement

On July 8, 2022, we entered into a share purchase agreement with United pursuant to which on July 26, 2022 we purchased additional 5,000 of United’s newly issued Series C Cumulative Convertible Perpetual Preferred Shares in exchange for $5.0 million payable in cash in connection with United’s obligation to pay the advance deposits pursuant to memoranda of agreement for the M/Ts Parosea, Bluesea, Minoansea and Epanastasea. On November 28, 2022 United redeemed all 10,000 Series C Preferred Shares issued to us pursuant to their terms for a gross redemption price (including all accrued and unpaid dividends up to the redemption date) of $10.6 million.

Vessels’ Sales

On December 27, 2022, we entered into two memoranda of agreement to sell two Capesize vessels to United for an aggregate purchase price of $36.3 million. On December 28, 2022, we received an advance of $12.7 million in cash, according to the terms of the agreements, which were separately presented as “Liability from contract with related party” in the accompanying consolidated balance sheets. Both vessels were delivered to United in February 2023. As of December 31, 2023, a gain on sale of vessel, net of sale expenses, amounting to $8.1 million was recognized and is presented as “Gain on sale of vessels, net” in the consolidated statements of income.

C.
Interests of Experts and Counsel

Not applicable.

ITEM 8.
FINANCIAL INFORMATION

A.
Consolidated Statements and Other Financial Information

See “Item 18. Financial Statements.”

Legal Proceedings

We have previously reported that between 2010 and 2017 certain of our then shareholders, including our former Chairman that served between 2008 to 2010, had brought suits in Greece against certain other shareholders of the Company, our former Chief Financial Officer, and such Chairman’s immediate successor that served between 2008 to 2013. The plaintiffs withdrew their suits filed in 2010 and 2014 and therefore these are now closed.

The hearing of the only two remaining suits that were filed in 2017 against, amongst other, the former Chairman’s immediate successor, took place on November 15, 2018 and the court’s final decision is expected to be issued. These suits seek damages from the defendants (including our former Chairman’s immediate successor that served between 2008 to 2013) for alleged willful misconduct that purportedly caused the plaintiffs damage both by way of diminution of the value of their shares in the Company and harm to their reputations. Our former Chairman’s immediate successor that served between 2008 to 2013 has advised us that he does not believe the action has any merit.

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Neither we nor our directors nor our current executive officers are named in any of these 2017 actions. We have also notified our insurance underwriters of these actions, and our underwriters are advancing a portion of the defendants’ legal expenses.

On March 6, 2024, Sphinx Investment Corp., a purported shareholder of the Company, submitted a complaint in the High Court of the Republic of the Marshall Islands naming the Company and the members of its board of directors as defendants. The complaint alleges, among other things, violations of fiduciary duties in connection with the issuance of the Series B Preferred Shares in December 2021. We believe we have substantial defenses and intend to vigorously defend against the lawsuit.

Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business.  Other than the proceedings mentioned above, we are not a party to any material litigation where claims or counterclaims have been filed against us other than routine legal proceedings incidental to our business.

Dividend Policy

The declaration, timing and amount of any dividend is subject to the discretion of our board of directors and will be dependent upon our earnings, financial condition, market prospects, capital expenditure requirements, investment opportunities, restrictions in our loan agreements, the provisions of the Marshall Islands law affecting the payment of dividends to shareholders, overall market conditions and other factors. We initiated the payment of quarterly cash dividends commencing with a quarterly dividend of $0.25 per share and a special dividend of $0.25 per share with respect to the fourth quarter of 2021 and have declared a quarterly dividend with respect to each quarter since that time. For the first quarter of 2023, we paid a quarterly dividend of $0.025 per common share on July 6, 2023 to all shareholders of record as of June 22, 2023. For the second quarter of 2023, we paid a quarterly dividend of $0.025 per common share on October 6, 2023 to all shareholders of record as of September 22, 2023. For the third quarter of 2023, we paid a quarterly dividend of $0.025 per common share on January 10, 2024 to all shareholders of record as of December 22, 2023. For the fourth quarter of 2023, we declared a quarterly dividend of $0.025 per common share and a special dividend of $0.075 per common share, payable on or about April 10, 2024 to all shareholders of record as of March 25, 2024. Total cash dividends distributed in 2023 totaled $6.0 million.  Our board of directors may review and amend our dividend policy from time to time in light of our plans for future growth and other factors. In addition, since we are a holding company with no material assets other than the shares of our subsidiaries and affiliates through which we conduct our operations, our ability to pay dividends will depend on our subsidiaries and affiliates distributing to us their earnings and cash flow. Some of our loan agreements limit our ability to pay dividends and our subsidiaries’ ability to make distributions to us.

B.
Significant Changes

There have been no significant changes since the date of the consolidated financial statements included in this annual report.

ITEM 9.
THE OFFER AND LISTING

A.
Offer and Listing Details

Our common shares trade on the Nasdaq Capital Market under the symbol “SHIP”.

B.
Plan of Distribution

Not applicable.

C.
Markets

Our common shares trade on the Nasdaq Capital Market under the symbol “SHIP”.

D.
Selling Shareholders

Not applicable.

E.
Dilution

Not applicable.

F.
Expenses of the Issue

Not applicable.

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ITEM 10.
ADDITIONAL INFORMATION

A.
Share Capital

Not applicable.

B.
Memorandum and Articles of Incorporation

Our restated articles of incorporation have been filed as an exhibit to our report filed with the Commission on Form 6-K on August 30, 2019.  Amendments to our restated articles of incorporation were filed as exhibits to our registration statement on Form F-1 filed on February 19, 2021 and our report of Form 6-K filed on February 15, 2023. Our restated articles of incorporation, as amended, contained in such exhibits are incorporated by reference.  Our fourth amended and restated bylaws have been filed with the Commission on Form 6-K on December 14, 2023, which we incorporate herein by reference.  A description of the material terms of our restated articles of incorporation, as amended, and our fourth amended and restated bylaws and of our capital stock is included in “Description of Securities” attached hereto as Exhibit 2.5 and incorporated by reference herein.

C.
Material contracts

Attached as exhibits to this annual report are the contracts we consider to be both material and outside the ordinary course of business and are to be performed in whole or in part after the filing of this annual report.  We refer you to “Item 4. Information on the Company – A. History and Development of the Company,” “Item 4. Information on the Company – B. Business Overview,” “Item 5. Operating and Financial Review and Prospects – B. Liquidity and Capital Resources – Loan Arrangements” and “Item 7. Major Shareholders and Related Party Transactions–B. Related Party Transactions” for a discussion of these contracts.  Other than as discussed in this annual report, we have no material contracts, other than contracts entered into in the ordinary course of business, to which we are a party.

D.
Exchange controls

Under Marshall Islands law, there are currently no restrictions on the export or import of capital, including foreign exchange controls, or restrictions that affect the remittance of dividends, interest or other payments to non-resident holders of our common shares.

E.
Taxation

The following is a summary of the material U.S. federal income tax and Marshall Islands tax consequences of the ownership and disposition of our common stock as well as the material U.S. federal and Marshall Islands income tax consequences applicable to us and our operations. The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of our common stock that is treated for U.S. federal income tax purposes as:

•
an individual citizen or resident of the United States;

•
a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of the United States, any state thereof or the District of Columbia;

•
an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source; or

•
a trust if (i) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized to control all substantial decisions of the trust, or (ii) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

If you are not described as a U.S. Holder and are not an entity treated as a partnership or other pass-through entity for U.S. federal income tax purposes, you will be considered a “Non-U.S. Holder.” The U.S. federal income tax consequences applicable to Non-U.S. Holders is described below under the heading “—United States Federal Income Taxation of Non-U.S. Holders.”

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This discussion does not consider the tax treatment of partnerships or other pass-through entities or persons who hold our common stock through such entities. If a partnership (or other entity classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our common stock, the U.S. federal income tax treatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership.

This summary is based on the U.S. Internal Revenue Code of 1986, as amended, or the Code, its legislative history, Treasury Regulations promulgated thereunder, published rulings and court decisions, all as currently in effect. These authorities are subject to change, possibly on a retroactive basis.

This summary does not address all aspects of U.S. federal income taxation that may be relevant to any particular holder based on such holder’s individual circumstances. In particular, this discussion considers only holders that will own and hold our common stock as capital assets within the meaning of Section 1221 of the Code and does not address the potential application of the alternative minimum tax or the U.S. federal income tax consequences to holders that are subject to special rules, including:

•
financial institutions or “financial services entities”;

•
broker-dealers;

•
taxpayers who have elected mark-to-market accounting for U.S. federal income tax purposes;

•
tax-exempt entities;

•
governments or agencies or instrumentalities thereof;

•
insurance companies;

•
regulated investment companies;

•
real estate investment trusts;

•
certain expatriates or former long-term residents of the United States;

•
persons that actually or constructively own 10% or more (by vote or value) of our shares;

•
persons that own shares through an “applicable partnership interest”;

•
persons required to recognize income for U.S. federal income tax purposes no later than when such income is reported on an “applicable financial statement”;

•
persons that hold our common stock as part of a straddle, constructive sale, hedging, conversion or other integrated transaction; or

•
persons whose functional currency is not the U.S. dollar.

This summary does not address any aspect of U.S. federal non-income tax laws, such as gift or estate tax laws, or state, local or non-U.S. tax laws.

We have not sought, nor do we intend to seek, a ruling from the Internal Revenue Service, or the IRS, as to any U.S. federal income tax consequence described herein. The IRS may disagree with the description herein, and its determination may be upheld by a court.

Because of the complexity of the tax laws and because the tax consequences to any particular holder of our common stock may be affected by matters not discussed herein, each such holder is urged to consult with its tax advisor with respect to the specific tax consequences of the ownership and disposition of our common stock, including the applicability and effect of state, local and non-U.S. tax laws, as well as U.S. federal tax laws.

United States Federal Income Tax Consequences Taxation of Operating Income in General

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Unless exempt from United States federal income taxation under the rules discussed below, a foreign corporation is subject to United States federal income taxation in respect of any income that is derived from the use of vessels, from the hiring or leasing of vessels for use on a time, voyage or bareboat charter basis, from the participation in a shipping pool, partnership, strategic alliance, joint operating agreement, code sharing arrangement or other joint venture it directly or indirectly owns or participates in that generates such income, or from the performance of services directly related to those uses, which we refer to as “shipping income,” to the extent that the shipping income is derived from sources within the United States. For these purposes, 50% of the gross shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States, exclusive of certain U.S. territories and possessions, constitutes income from sources within the United States, which we refer to as “U.S. source gross shipping income.”

Shipping income attributable to transportation that both begins and ends in the United States is considered to be 100% from sources within the United States. We are prohibited by law from engaging in transportation that produces income considered to be 100% from sources within the United States.

Shipping income attributable to transportation exclusively between non-U.S. ports will be considered to be 100% derived from sources outside the United States. Shipping income earned by us that is derived from sources outside the United States will not be subject to any United States federal income tax.

For our 2023 taxable year, we had U.S. source gross shipping income of approximately $1,693,820.

We are subject to a 4% tax imposed without allowance for deductions for such taxable year, as described in “—Taxation in Absence of Exemption,” unless we qualify for exemption from tax under Section 883 of the Code, the requirements of which are described in detail below.  For our 2023 taxable year, we believe that we qualified for the exemption from tax under Section 883 of the Code.

Exemption of Operating Income from United States Federal Income Taxation

Under Section 883 of the Code and the regulations thereunder, we will be exempt from United States federal income taxation on our U.S.-source shipping income if (i) we are organized in a foreign country (our “country of organization”) that grants an “equivalent exemption” to corporations organized in the United States and (ii) one of the following statements is true:

•
more than 50% of the value of our stock is owned, directly or indirectly, by “qualified shareholders,” that are persons (i) who are “residents” of our country of organization or of another foreign country that grants an “equivalent exemption” to corporations organized in the United States, and (ii) we satisfy certain substantiation requirements, which we refer to as the “50% Ownership Test”; or

•
our stock is “primarily” and “regularly” traded on one or more established securities markets in our country of organization, in another country that grants an “equivalent exemption” to United States corporations, or in the United States, which we refer to as the “Publicly-Traded Test.”

The jurisdictions where we and our ship-owning subsidiaries are incorporated grant “equivalent exemptions” to United States corporations. Therefore, we will be exempt from United States federal income taxation with respect to our U.S. source shipping income if we satisfy either the 50% Ownership Test or the Publicly-Traded Test.

50% Ownership Test

Under the regulations, a foreign corporation will satisfy the 50% Ownership Test for a taxable year if (i) for at least half of the number of days in the taxable year, more than 50% of the value of its stock is owned, directly or constructively through the application of certain attribution rules prescribed by the regulations, by one or more shareholders who are residents of foreign countries that grant “equivalent exemption” to corporations organized in the United States and (ii) the foreign corporation satisfies certain substantiation and reporting requirements with respect to such shareholders.

We did not satisfy the 50% Ownership Test for our 2023 taxable year. Furthermore, these substantiation requirements are onerous and therefore there can be no assurance that we would be able to satisfy them, even if our share ownership would otherwise satisfy the requirements of the 50% Ownership Test.

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Publicly-Traded Test

The regulations provide that the stock of a foreign corporation will be considered to be “primarily traded” on an established securities market in a country if the number of shares of each class of stock used to satisfy the Publicly Traded Test that is traded during the taxable year on all established securities markets in that country exceeds the number of shares in each such class that is traded during that year on established securities markets in any other single country.

Under the regulations, the stock of a foreign corporation will be considered “regularly traded” if one or more classes of its stock representing 50% or more of its outstanding shares, by total combined voting power of all classes of stock entitled to vote and by total combined value of all classes of stock, are listed on one or more established securities markets (such as the Nasdaq Capital Market on which our common shares are traded), which we refer to as the “listing threshold.”

The regulations further require that with respect to each class of stock relied upon to meet the listing requirement: (i) such class of the stock is traded on the market, other than in minimal quantities, on at least sixty (60) days during the taxable year or one-sixth (1/6) of the days in a short taxable year; and (ii) the aggregate number of shares of such class of stock traded on such market is at least 10% of the average number of shares of such class of stock outstanding during such year or as appropriately adjusted in the case of a short taxable year. Even if a foreign corporation does not satisfy both tests, the regulations provide that the trading frequency and trading volume tests will be deemed satisfied by a class of stock if such class of stock is traded on an established market in the United States and such class of stock is regularly quoted by dealers making a market in such stock.

Notwithstanding the foregoing, the regulations provide, in pertinent part, that a class of stock will not be considered to be “regularly traded” on an established securities market for any taxable year in which 50% or more of the vote and value of the outstanding shares of such class of stock are owned, actually or constructively under specified attribution rules, on more than half the days during the taxable year by persons who each own directly or indirectly 5% or more of the vote and value of such class of stock, whom we refer to as “5% Shareholders.” We refer to this restriction in the regulations as the “Closely-Held Rule.”

For purposes of being able to determine our 5% Shareholders, the regulations permit a foreign corporation to rely on Schedule 13G and Schedule 13D filings with the Commission. The regulations further provide that an investment company that is registered under the Investment Company Act of 1940, as amended, will not be treated as a 5% Shareholder for such purposes.

Based on our analysis of our shareholdings during 2023, we believe we satisfy the Publicly-Traded Test for the entire 2023 year in that less than 50% of our issued and outstanding common shares were held by 5% Shareholders for more than half the days during the 2023 taxable year.

Due to the factual nature of the issues involved, there can be no assurance that we or any of our subsidiaries will qualify for the benefits of Section 883 of the Code for our subsequent taxable years.

Taxation in Absence of Exemption

To the extent the benefits of Section 883 are unavailable, our U.S. source gross shipping income, to the extent not considered to be “effectively connected” with the conduct of a U.S. trade or business, as described below, would be subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions, otherwise referred to as the “4% Tax.” Since under the sourcing rules described above, no more than 50% of our shipping income would be treated as being derived from U.S. sources, the maximum effective rate of U.S. federal income tax on our shipping income would never exceed 2% under the 4% Tax.

To the extent the benefits of the Section 883 exemption are unavailable and our U.S. source gross shipping income is considered to be “effectively connected” with the conduct of a U.S. trade or business, as described below, any such “effectively connected” U.S. source gross shipping income, net of applicable deductions, would be subject to the U.S. federal corporate income tax currently imposed at a rate of 21%. In addition, we may be subject to the 30% “branch profits” tax on earnings effectively connected with the conduct of such trade or business, as determined after allowance for certain adjustments, and for certain interest paid or deemed paid attributable to the conduct of our U.S. trade or business.

Our U.S. source gross shipping income would be considered “effectively connected” with the conduct of a U.S. trade or business only if:

•
we have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and

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•
substantially all of our U.S. source gross shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States, or, in the case of income from the leasing of a vessel, is attributable to a fixed place of business in the United States.

We do not intend to have, or permit circumstances that would result in having, any vessel operating to the United States on a regularly scheduled basis, or earning income from the leasing of a vessel attributable to a fixed place of business in the United States. Based on the foregoing and on the expected mode of our shipping operations and other activities, we believe that none of our U.S. source gross shipping income will be “effectively connected” with the conduct of a U.S. trade or business.

United States Taxation of Gain on Sale of Vessels

Regardless of whether we qualify for exemption under Section 883, we will not be subject to United States federal income taxation with respect to gain realized on a sale of a vessel, provided the sale is considered to occur outside of the United States under United States federal income tax principles. In general, a sale of a vessel will be considered to occur outside of the United States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United States. It is expected that any sale of a vessel by us will be considered to occur outside of the United States.

United States Federal Income Taxation of U.S. Holders

Taxation of Distributions Paid on Common Stock

Subject to the passive foreign investment company, or PFIC, rules discussed below, any distributions made by us with respect to common shares to a U.S. Holder will generally constitute dividends, which may be taxable as ordinary income or “qualified dividend income” as described in more detail below, to the extent of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of our earnings and profits will be treated first as a non-taxable return of capital to the extent of the U.S. Holder’s tax basis in his common shares on a dollar-for-dollar basis and thereafter as capital gain. Because we are not a U.S. corporation, U.S. Holders that are corporations will generally not be entitled to claim a dividends-received deduction with respect to any distributions they receive from us.

Dividends paid on common shares to a U.S. Holder which is an individual, trust, or estate (a “U.S. Non-Corporate Holder”) will generally be treated as “qualified dividend income” that is taxable to such shareholders at preferential U.S. federal income tax rates provided that (1) the common shares are readily tradable on an established securities market in the United States (such as the Nasdaq Capital Market on which the common shares are currently listed); (2) we are not a passive foreign investment company, or PFIC, for the taxable year during which the dividend is paid or the immediately preceding taxable year (which we do not believe we are or have been, and do not expect to be); (3) the U.S. Non-Corporate Holder has owned the common shares for more than 60 days in the 121-day period beginning 60 days before the date on which the common shares become ex-dividend; and (4) certain other conditions are met.

Any dividends paid by us which are not eligible for these preferential rates will be taxed as ordinary income to a U.S. Holder.

Special rules may apply to any “extraordinary dividend”—generally, a dividend in an amount which is equal to or in excess of 10% of a shareholder’s adjusted basis in a common share—paid by us. If we pay an “extraordinary dividend” on our common stock that is treated as “qualified dividend income,” then any loss derived by a U.S. Non-Corporate Holder from the sale or exchange of such common stock will be treated as long-term capital loss to the extent of such dividend.

Sale, Exchange or other Disposition of Common Shares

Assuming we do not constitute a PFIC for any taxable year, a U.S. Holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our common shares in an amount equal to the difference between the amount realized by the U.S. Holder from such sale, exchange or other disposition and the U.S. Holder’s tax basis in such stock. Such gain or loss will be treated as long-term capital gain or loss if the U.S. Holder’s holding period in the common shares is greater than one year at the time of the sale, exchange or other disposition. A U.S. Holder’s ability to deduct capital losses is subject to certain limitations.

Passive Foreign Investment Company Rules

Special U.S. federal income tax rules apply to a U.S. Holder that holds stock in a foreign corporation classified as a PFIC for U.S. federal income tax purposes. In general, we will be treated as a PFIC with respect to a U.S. Holder if, for any taxable year in which such holder held our common shares, either:

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•
at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or

•
at least 50% of the average value of the assets held by us during such taxable year produce, or are held for the production of, passive income.

For purposes of determining whether we are a PFIC, we will be treated as earning and owning our proportionate share of the income and assets, respectively, of any of our subsidiary companies in which we own at least 25% of the value of the subsidiary’s stock or other ownership interest. Income earned, or deemed earned, by us in connection with the performance of services should not constitute passive income. By contrast, rental income, which includes bareboat hire, would generally constitute “passive income” unless we are treated under specific rules as deriving rental income in the active conduct of a trade or business.

Based on our current operations and future projections, we do not believe that we are or have been a PFIC during our 2023 taxable year, nor do we expect to become, a PFIC with respect to our 2024 taxable year or any future taxable year. Although there is no legal authority directly on point, our belief is based principally on the position that, for purposes of determining whether we are a PFIC, the gross income we derive or are deemed to derive from the time chartering and voyage chartering activities of our wholly owned subsidiaries should constitute services income, rather than rental income. Correspondingly, we believe that such income does not constitute passive income, and the assets that we or our wholly owned subsidiaries own and operate in connection with the production of such income, in particular the vessels, do not constitute passive assets for purposes of determining whether we are a PFIC. We believe there is substantial legal authority supporting our position consisting of case law and Internal Revenue Service pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. It should be noted that in the absence of any legal authority specifically relating to the statutory provisions governing PFICs, the Internal Revenue Service or a court could disagree with this position. In addition, although we intend to conduct our affairs in a manner so as to avoid being classified as a PFIC with respect to any taxable year, there can be no assurance that the nature of our operations will not change in the future.

As discussed more fully below, if we were to be treated as a PFIC for any taxable year, a U.S. Holder would be subject to different taxation rules depending on whether the U.S. Holder makes an election to treat us as a “Qualified Electing Fund,” which election is referred to as a “QEF election.” As an alternative to making a QEF election, a U.S. Holder should be able to make a “mark-to-market” election with respect to the common shares, as discussed below. In addition, if we were to be treated as a PFIC, a U.S. Holder would be required to file an IRS Form 8621 with respect to such holder’s common stock.

Taxation of U.S. Holders Making a Timely QEF Election

If a U.S. Holder makes a timely QEF election, which U.S. Holder is referred to as an “Electing Holder,” the Electing Holder must report each year for U.S. federal income tax purposes its pro rata share of our ordinary earnings and its net capital gain, if any, for our taxable year that ends with or within the taxable year of the Electing Holder, regardless of whether or not distributions were received from us by the Electing Holder. The Electing Holder’s adjusted tax basis in the common shares will be increased to reflect taxed but undistributed earnings and profits. Distributions of earnings and profits that had been previously taxed will result in a corresponding reduction in the adjusted tax basis in the common shares and will not be taxed again once distributed. An Electing Holder would generally recognize capital gain or loss on the sale, exchange or other disposition of the common shares. A U.S. Holder would make a QEF election with respect to any year that we are a PFIC by filing IRS Form 8621 with his, her or its U.S. federal income tax return. After the end of each taxable year, we will determine whether we were a PFIC for such taxable year. If we determine or otherwise become aware that we are a PFIC for any taxable year, we will use commercially best efforts to provide each U.S. Holder with all necessary information, including a PFIC Annual Information Statement, in order to enable such holder to make a QEF election for such taxable year.

Taxation of U.S. Holders Making a “Mark-to-Market” Election

Alternatively, if we were to be treated as a PFIC for any taxable year and, as anticipated, our common stock is treated as “marketable stock,” a U.S. Holder would be allowed to make a “mark-to-market” election with respect to our common shares. If that election is made, the U.S. Holder generally would include as ordinary income in each taxable year the excess, if any, of the fair market value of the common shares at the end of the taxable year over such U.S. Holder’s adjusted tax basis in the common shares. The U.S. Holder would also be permitted an ordinary loss in respect of the excess, if any, of the U.S. Holder’s adjusted tax basis in the common shares over the common shares’ fair market value at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. A U.S. Holder’s tax basis in such U.S. Holder’s common shares would be adjusted to reflect any such income or loss amount. Gain realized on the sale, exchange or other disposition of the common shares would be treated as ordinary income, and any loss realized on the sale, exchange or other disposition of the common shares would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously included by the U.S. Holder.

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Taxation of U.S. Holders Not Making a Timely QEF or Mark-to-Market Election

Finally, if we were to be treated as a PFIC for any taxable year, a U.S. Holder who does not make either a QEF election or a “mark-to-market” election for that year, whom we refer to as a “Non-Electing Holder,” would be subject to special rules with respect to (1) any excess distribution (i.e., the portion of any distributions received by the Non-Electing Holder on our common stock in a taxable year in excess of 125 percent of the average annual distributions received by the Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder’s holding period for the common stock), and (2) any gain realized on the sale, exchange or other disposition of our common stock. Under these special rules:

•
the excess distribution or gain would be allocated ratably over the Non-Electing Holders’ aggregate holding period for the common stock;

•
the amount allocated to the current taxable year and any taxable year before we became a passive foreign investment company would be taxed as ordinary income; and

•
the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.

These penalties would not apply to a pension or profit sharing trust or other tax-exempt organization that did not borrow funds or otherwise utilize leverage in connection with its acquisition of our common stock. If a Non-Electing Holder who is an individual dies while owning our common stock, such Non-Electing Holder’s successor generally would not receive a step-up in tax basis with respect to such stock.

Net Investment Income Tax

A U.S. Holder that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, is subject to a 3.8% tax on the lesser of (1) such U.S. Holder’s “net investment income” (or undistributed “net investment income” in the case of estates and trusts) for the relevant taxable year and (2) the excess of such U.S. Holder’s modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals will be between $125,000 and $250,000, depending on the individual’s circumstances). A U.S. Holder’s net investment income will generally include its gross dividend income and its net gains from the disposition of the common shares, unless such dividends or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). Net investment income generally will not include a U.S. Holder’s pro rata share of the Company’s income and gain (if we are a PFIC and that U.S. Holder makes a QEF election, as described above in “—Taxation of U.S. Holders Making a Timely QEF Election”). However, a U.S. Holder may elect to treat inclusions of income and gain from a QEF election as net investment income. Failure to make this election could result in a mismatch between a U.S. Holder’s ordinary income and net investment income. If you are a U.S. Holder that is an individual, estate or trust, you are urged to consult your tax advisor regarding the applicability of the net investment income tax to your income and gains in respect of your investment in our common shares.

United States Federal Income Taxation of Non-U.S. Holders

Dividends paid to a Non-U.S. Holder with respect to our common stock generally should not be subject to U.S. federal income tax, unless the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base that such holder maintains in the United States).

In addition, a Non-U.S. Holder generally should not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our common stock unless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base that such holder maintains in the United States) or the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case such gain from United States sources may be subject to tax at a 30% rate or a lower applicable tax treaty rate).

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Dividends and gains that are effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally should be subject to tax in the same manner as for a U.S. Holder and, if the Non-U.S. Holder is a corporation for U.S. federal income tax purposes, it also may be subject to an additional branch profits tax at a 30% rate or a lower applicable tax treaty rate.

Backup Withholding and Information Reporting

In general, information reporting for U.S. federal income tax purposes should apply to distributions made on our common stock within the United States to a non-corporate U.S. Holder and to the proceeds from sales and other dispositions of our common stock to or through a U.S. office of a broker by a non-corporate U.S. Holder. Payments made (and sales and other dispositions effected at an office) outside the United States will be subject to information reporting in limited circumstances.

In addition, backup withholding of U.S. federal income tax, currently at a rate of 24%, generally should apply to distributions paid on our common stock to a non-corporate U.S. Holder and the proceeds from sales and other dispositions of our common stock by a non-corporate U.S. Holder, who:

•
fails to provide an accurate taxpayer identification number;

•
is notified by the IRS that backup withholding is required; or

•
fails in certain circumstances to comply with applicable certification requirements.

A Non-U.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreign status, under penalties of perjury, on a duly executed applicable IRS Form W-8 or by otherwise establishing an exemption.

Backup withholding is not an additional tax. Rather, the amount of any backup withholding generally should be allowed as a credit against a U.S. Holder’s or a Non-U.S. Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.

Individuals who are U.S. Holders (and to the extent specified in applicable Treasury regulations, certain individuals who are Non-U.S. Holders and certain U.S. entities) who hold “specified foreign financial assets” (as defined in Section 6038D of the Code) are required to file IRS Form 8938 with information relating to the asset for each taxable year in which the aggregate value of all such assets exceeds $75,000 at any time during the taxable year or $50,000 on the last day of the taxable year (or such higher dollar amount as prescribed by applicable Treasury regulations). Specified foreign financial assets would include, among other assets, our common shares, unless the shares are held through an account maintained with a U.S. financial institution. Substantial penalties apply to any failure to timely file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not due to willful neglect. Additionally, in the event an individual U.S. Holder (and to the extent specified in applicable Treasury regulations, an individual Non-U.S. Holder or a U.S. entity) that is required to file IRS Form 8938 does not file such form, the statute of limitations on the assessment and collection of U.S. federal income taxes of such holder for the related tax year may not close until three years after the date that the required information is filed. U.S. Holders (including U.S. entities) and Non-U.S. Holders are encouraged to consult their own tax advisors regarding their reporting obligations under this legislation.

Marshall Islands Tax Consequences

We are incorporated in the Republic of the Marshall Islands.  Under current Marshall Islands law, we are not subject to tax on income or capital gains, no Marshall Islands withholding tax will be imposed upon payment of dividends by us to its shareholders, and holders of our common stock that are not residents of or domiciled or carrying on any commercial activity in the Republic of the Marshall Islands will not be subject to Marshall Islands tax on the sale or other disposition of our common stock.

F.
Dividends and paying agents

Not applicable.

G.
Statement by experts

Not applicable.

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H.
Documents on display

We file annual reports and other information with the Commission.  You may inspect and copy any report or document we file, including this annual report and the accompanying exhibits, at the Commission’s public reference facilities located at 100 F Street, N.E., Room 1580, Washington, D.C. 20549.  You may obtain information on the operation of the public reference facilities by calling the Commission at 1-800-SEC-0330, and you may obtain copies at prescribed rates.  Our Commission filings are also available to the public at the website maintained by the Commission at http://www.sec.gov, as well as on our website at http://www.seanergymaritime.com.  Information on our website does not constitute a part of this annual report and is not incorporated by reference.

We will also provide without charge to each person, including any beneficial owner of our common stock, upon written or oral request of that person, a copy of any and all of the information that has been incorporated by reference in this annual report.  Please direct such requests to Investor Relations, Seanergy Maritime Holdings Corp., 154 Vouliagmenis Avenue, 166 74 Glyfada, Greece, telephone number +30 213 0181507 or facsimile number +30 210 9638404.

I.
Subsidiary information

Not applicable.

ITEM 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We are exposed to risks associated with changes in interest rates relating to our unhedged variable–rate borrowings, according to which we pay interest at a rate of SOFR or term SOFR plus a margin; as such increases in interest rates could affect our results of operations and ability to service our debt.  As of December 31, 2023, we had aggregate variable-rate borrowings, of $198.5 million.  We have not entered into any hedging contracts to protect against interest rate fluctuations.

The following table sets forth the sensitivity of our existing loans as of December 31, 2023, as to a 100-basis point increase in Term SOFR and reflects the additional interest expense.

Year
Amount
2024
$1.9 million
2025
$1.5 million
2026
$1.0 million
2027
$0.4 million
2028
$0.1 million
2029
$0.05 million
2030
$0.01 million
Total
$5.0 million

Foreign Currency Exchange Rate Risk

We generate all of our revenue in U.S. dollars.  The minority of our operating expenses (approximately 10% in 2023) and about half of our general and administration expenses (approximately 49% in 2023) are in currencies other than the U.S. dollar, primarily the Euro.  For accounting purposes, expenses incurred in other currencies are converted into U.S. dollars at the exchange rate prevailing on the date of each transaction.  We do not consider the risk from exchange rate fluctuations to be material for our results of operations, as during 2023, these non-US dollar expenses represented 16% of our revenues.  However, the portion of our business conducted in other currencies could increase in the future, which could expand our exposure to losses arising from exchange rate fluctuations.  We have not hedged currency exchange risks associated with our expenses.

ITEM 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

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PART II

ITEM 13.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

On July 2, 2021, we adopted a shareholders rights agreement, pursuant to which each of our common shares includes one preferred stock purchase right that entitles the holder to purchase from us a unit consisting of one-thousandth of a share of our Series A Participating Preferred Shares if any third-party seeks to acquire control of a substantial block of our common shares without the approval of our board of directors. The shareholders rights agreement was amended and restated on December 13, 2023. See “Description of Securities” attached to this annual report as Exhibit 2.5 for a description of our amended and restated shareholders rights agreement.

ITEM 15.
CONTROLS AND PROCEDURES

a)
Disclosure Controls and Procedures

Management (our Chief Executive Officer and our Chief Financial Officer) has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, as of the end of the period covered by this annual report (as of December 31, 2023).  The term disclosure controls and procedures is defined under the Commission’s rules as controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management (our Chief Executive Officer and our Chief Financial Officer, or persons performing similar functions) as appropriate to allow timely decisions regarding required disclosure.  There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures.  Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of the evaluation date.

b)
Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is identified in Exchange Act Rule 13a-15(f).  Our internal control over financial reporting is a process designed under the supervision of our Chief Executive Officer and our Chief Financial Officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with U.S. GAAP.

Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures are being made only in accordance with the authorization of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the consolidated financial statements.

Management (our Chief Executive Officer and our Chief Financial Officer), has assessed the effectiveness of our internal control over financial reporting as of December 31, 2023, based on the framework established in Internal Control - Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission.  Based on this assessment, management has determined that the Company’s internal control over financial reporting is effective as of December 31, 2023.

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However, it should be noted that because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements with certainty even when determined to be effective and can only provide reasonable assurance with respect to financial statement preparation and presentation.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate / obsolete because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

c)
Attestation Report of the Registered Public Accounting Firm

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2023 has been audited by Deloitte Certified Public Accountants S.A., an independent registered public accounting firm, as stated in their report which appears below.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Seanergy Maritime Holdings Corp.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Seanergy Maritime Holdings Corp. and subsidiaries (the “Company”) as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2023, of the Company and our report dated April 3, 2024, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Management’s Annual Report on Internal Control Over Financial Reporting”. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


/s/ Deloitte Certified Public Accountants S.A.
Athens, Greece
April 3, 2024

d)
Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the year covered by this annual report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16.
[RESERVED]

ITEM 16A.
AUDIT COMMITTEE FINANCIAL EXPERT

Our board of directors has determined that Mr. Dimitrios Anagnostopoulos, an independent director and a member of our audit committee, is an “Audit Committee Financial Expert” under Commission rules and the corporate governance rules of the Nasdaq Stock Market.

ITEM 16B.
CODE OF ETHICS

We have adopted a Code of Business Conduct and Ethics that applies to our employees, officers and directors.  Our Code of Business Conduct and Ethics is available on the Corporate Governance section of our website at www.seanergymaritime.com.  Information on our website does not constitute a part of this annual report and is not incorporated by reference.  We will also provide a hard copy of our Code of Business Conduct and Ethics free of charge upon written request.  We intend to disclose any waivers to or amendments of the Code of Business Conduct and Ethics for the benefit of any of our directors and executive officers within 5 business days of such waiver or amendment.  Shareholders may direct their requests to the attention of Investor Relations, Seanergy Maritime Holdings Corp., 154 Vouliagmenis Avenue, 16674 Glyfada.

ITEM 16C.
PRINCIPAL ACCOUNTANT FEES AND SERVICES

Deloitte Certified Public Accountants S.A. (“Deloitte”), an independent registered public accounting firm, has audited our annual financial statements acting as our independent auditor for the fiscal year ended December 31, 2023 and for the fiscal year ended December 31, 2022. Audit, audit-related and non-audit services billed and accrued from Deloitte Certified Public Accountants S.A., as applicable are as follows:

   
2023
    
2022
  
Audit fees
  
$
318,000
    
$
300,000
  
Audit related fees
    
28,000
      
-
  
Tax fees
    
-
      
-
  
All other fees
    
-
      
-
  
Total fees
  
$
346,000
    
$
300,000
  

Audit fees for 2023 related to professional services rendered for the audit of our financial statements and the audit of internal control over financial reporting for the year ended December 31, 2023. Audit related fees relate to services in connection with equity offerings and issuance of comfort letters. Audit fees for 2022 related to professional services rendered for the audit of our financial statements for the year ended December 31, 2022. As per the audit committee charter, our audit committee pre-approves all audit, audit-related and non-audit services not prohibited by law to be performed by our independent registered public accounting firm and associated fees prior to the engagement of the independent registered public accounting firm with respect to such services.

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ITEM 16D.
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Period
  
Total
Number of
Shares (or Units)
Purchased
    
Average
Price Paid
per Share
(or Units)
    
Total Number of
Shares (or Units)
Purchased as Part
of Publicly Announced
Plans or Programs
    
Maximum Number (or
Approximate Dollar Value)
of Shares (or Units)
that May Yet Be Purchased
Under the Plans or Programs
  
May 1-31, 2023
    
110,386
    
$4.32
    
110,386
    
$0
  
June 1-30, 2023
    
251,775
    
$4.36
    
251,775
    
$0
  
December 13-31, 2023
    
13,370
    
$7.20
    
13,370
    
$24,903,436
  
February 1-29, 2024
    
115,312
    
$7.29
    
115,312
    
$24,059,991
  

In addition, the Company’s Chairman and Chief Executive Officer acquired, during 2023, a total of 200,000 common shares in the open market for an aggregate purchase price of approximately $1.1 million In addition, the Company’s Chief Financial Officer acquired 18,510 shares in the open market for an aggregate purchase price of approximately $100,000.

On June 28, 2022, our Board of Directors authorized the June 2022 Repurchase Plan pursuant to which we could repurchase up to $5.0 million of our outstanding common shares, convertible note, and warrants until December 31, 2022. On November 28, 2022, the Board of Directors authorized the extension of this plan until December 31, 2023. On December 13, 2023, the Board of Directors terminated the June 2022 Repurchase Plan expiring on December 31, 2023 and authorized the December 2023 Repurchase Plan pursuant to which we can repurchase up to $25.0 million of our outstanding common shares or other securities. This plan expires on December 31, 2025 and, as of the date of this annual report, $24,059,991 remains available for repurchases under this plan.

On November 28, 2022, the Board of Directors authorized also a tender offer to purchase our outstanding Class E Warrants to purchase one common share, par value $0.0001, at a price of $0.20 per warrant. The tender offer expired at 5:00 P.M., Eastern Time, on January 10, 2023. A total of 4,038,114 Class E Warrants were tendered under the tender offer.

ITEM 16F.
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

The disclosure called for by paragraph (a) of this Item 16F was previously reported, as that term is defined in Rule 12b-2 under the Exchange Act, in “Item 16F. Change in Registrant’s Certifying Accountant” of our annual report on Form 20-F for the fiscal year ended December 31, 2022, filed with the SEC on March 31, 2023.


ITEM16G.
CORPORATE GOVERNANCE

As a foreign private issuer, as defined in Rule 3b-4 under the Exchange Act, the Company is permitted to follow certain corporate governance rules of its home country in lieu of Nasdaq’s corporate governance rules.  The Company’s corporate governance practices deviate from Nasdaq’s corporate governance rules in the following ways:

•
In lieu of obtaining shareholder approval prior to the issuance of designated securities or the adoption of equity compensation plans or material amendments to such equity compensation plans, we will comply with provisions of the BCA, providing that the board of directors approves share issuances and adoptions of and material amendments to equity compensation plans. Likewise, in lieu of obtaining shareholder approval prior to the issuance of securities in certain circumstances, consistent with the BCA and our restated articles of incorporation, as amended, and fourth amended and restated bylaws, the board of directors approves certain share issuances.

•
The Company’s board of directors is not required to have an Audit Committee comprised of at least three members. Our Audit Committee is comprised of two members.

•
The Company’s board of directors is not required to meet regularly in executive sessions without management present.

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•
As a foreign private issuer, we are not required to solicit proxies or provide proxy statements to Nasdaq pursuant to Nasdaq corporate governance rules or Marshall Islands law. Consistent with Marshall Islands law and as provided in our fourth amended and restated bylaws, we will notify our shareholders of meetings between 15 and 60 days before the meeting. This notification will contain, among other things, information regarding business to be transacted at the meeting.

Other than as noted above, we are in full compliance with all other applicable Nasdaq corporate governance standards.

ITEM 16H.
MINE SAFETY DISCLOSURE

Not applicable.

ITEM 16I.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

ITEM 16J.
INSIDER TRADING POLICIES

Our Board of Directors has adopted the “Statement of Company Policy – Trading in the Company’s Securities” in relation to policies and procedures to detect and prevent insider trading (“Insider Trading Policy”) governing the purchase, sale, and other dispositions of our securities by directors, senior management, and employees that are reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and any listing standards applicable to us. A copy of our Insider Trading Policy has been filed as Exhibit 11.1 to this annual report.

ITEM 16K.
CYBERSECURITY

We believe that cybersecurity is fundamental in our operations and, as such, we are committed to maintaining robust governance and oversight of cybersecurity risks and to implementing comprehensive processes and procedures for identifying, assessing, and managing material risks from cybersecurity threats as part of our broader risk management system and processes. Our cybersecurity risk management strategy prioritizes detection, analysis and response to known, anticipated or unexpected threats; effective management of security risks; and resiliency against incidents. With the ever-changing cybersecurity landscape and continual emergence of new cybersecurity threats, our board of directors and senior management team ensure that adequate resources are devoted to cybersecurity risk management and the technologies, processes and people that support it. We implement risk-based controls to protect our information, the information of our customers, suppliers, and other third parties, our information systems, our business operations, and our vessels.

As part of our cybersecurity risk management system, our information and technology management team is comprised of a senior IT professional, leading an appropriately staffed information and technology department, having extensive experience and expertise on all information and technology matters, including cybersecurity. To this end, our information and technology management team tracks and logs privacy and security incidents across our Company, our vessels, our customers, suppliers and other third-party service providers to remediate and resolve any such incidents. Significant incidents are reviewed regularly by our information and technology management team to determine whether further escalation is appropriate. We also engage annually third parties, such as specialized assessors, consultants, as well as our internal audit department, to audit our information security systems, whose findings are reported to our senior management team. Any identified incident assessed as potentially being or potentially becoming material is immediately escalated for further assessment, and then reported to  our senior management team who is responsible to assess its overall materiality in due time and decide whether further reference to our board of directors is necessary. We further consult with outside counsel as appropriate, including on materiality analysis and disclosure requirements, and our senior management, in cooperation, if required, with our board of directors, makes the final materiality determinations and disclosure and other compliance decisions.

As we do not have a dedicated board committee solely focused on cybersecurity, our senior management team has oversight responsibility for risks and incidents relating to cybersecurity threats, including compliance with disclosure requirements, cooperation with law enforcement, and related effects on financial and other risks, and it reports any material findings and recommendations, as appropriate, to our board of directors for consideration.

Overall, our approach to cybersecurity risk management includes the following key elements:


 (i)
Continuous monitoring of cybersecurity threats, both internal and external. through the use of data analytics and network monitoring systems.


(ii)
Engagement of third party consultants and other advisors to assist in assessing points of vulnerability of our information security systems.

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 (iii)
Overall assessment of cybersecurity incidents materiality and potential impact on the company’s operations and financial condition by our senior management team and our board of directors, in cooperation, if considered necessary, with specialized external consultants.


(iv)
Oversight responsibility of cybersecurity risks and compliance with relevant disclosure requirements lies with our senior management team and our board of directors.


(v)
Training and Awareness – we have various information technology policies relating to cybersecurity. We also provide employee mandatory training that is administered on a periodic basis that reinforces our information technology policies, standards and practices, as well as the expectation that employees comply with these policies and identify and report potential cybersecurity risks. We also require employees to sign confidentiality agreements, where appropriate to their role.

We continue to invest in our cybersecurity systems and to enhance our internal controls and processes. Our business strategy, results of operations and financial condition have not been materially affected by risks from cybersecurity threats, including as a result of previously identified cybersecurity incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks or any future material incidents. While we have dedicated appropriate resources to identifying, assessing, and managing material risks from cybersecurity threats, our efforts may not be adequate, may fail to accurately assess the severity of an incident, may not be sufficient to prevent or limit harm, or may fail to sufficiently remediate an incident in a timely fashion, any of which could harm our business, reputation, results of operations and financial condition. For more information certain risks associated with cybersecurity, see “Item 3.D. Risk Factors— Risks Relating to Our Company —A cyber-attack could materially disrupt our business.”

PART III

ITEM 17.
FINANCIAL STATEMENTS

See “Item 18. Financial Statements.”

ITEM 18.
FINANCIAL STATEMENTS

The financial information required by this item, together with the report of Deloitte Certified Public Accountants S.A., is set forth on pages F-1 through F-40 and are filed as part of this annual report.

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ITEM 19.
EXHIBITS

Exhibit
Number
Description
   
1.1
   
1.2
   
1.3
   
1.4
   
2.1
   
2.2
   
2.3
   
2.4
   
Description of Securities*
   
Amended and Restated 2011 Equity Incentive Plan of the registrant adopted on March 27, 2024*
   
4.2
   
Form of Ship Technical Management Agreement with V.Ships Greece M/V Titanship*
   
4.4
   
4.5
   
4.6
   
4.7
   
4.8
   
4.9
   
4.10
   
4.11
   
4.12
   
4.13
   
4.14
   
4.15

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4.16
   
4.17
   
4.18
   
4.19
   
Amendment and Restatement Deed relating to a bareboat charter agreement dated 22 June 2021 in respect of the m/v Hellasship, dated September 25, 2023, between the registrant, Hellas Ocean Navigation Co. and Sea 241 Leasing Co. Limited*
   
4.21
   
4.22
   
Amendment and Restatement Deed relating to a bareboat charter agreement dated 22 June 2021 in respect of the m/v Patriotship, dated September 25, 2023, between the registrant, Patriot Shipping Co. and Sea 242 Leasing Co. Limited*
   
4.24
   
4.25
   
4.26
   
Second Supplemental Agreement dated November 10, 2023 between Friend Ocean Navigation Co., Squire Ocean Navigation Co., Duke Shipping Co. and Alpha Bank S.A. with respect to the Facility Agreement dated August 9, 2021*
   
4.28
   
Overriding Agreement dated August 25, 2023 to the Facility Agreement dated December 20, 2021 between, inter alia, the registrant, Sea Genius Shipping Co., Seanergy Shipmanagement Corp. and Sinopac Capital International (HK) Limited*
   
4.30
   
4.31
   
4.32
   
4.33
   
Supplemental Agreement dated July 3, 2023, relating to the Facility Agreement dated June 22, 2022, between the registrant, World Shipping Co., Honor Shipping Co. and Piraeus Bank S.A.*
   
Overriding Agreement dated July 3, 2023 to the Facility Agreement dated June 22, 2022 between the registrant, World Shipping Co., Honor Shipping Co., Seanergy Shipmanagement Corp. and Piraeus Bank S.A.*

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Deed of Accession, Amendment and Restatement relating to a facility agreement dated October 10, 2022, dated April 18 2023, between the registrant, Fellow Shipping Co., Premier Marine Co., Champion Marine Co. and Danish Ship Finance A/S*
   
4.37
   
4.38
   
4.39
   
4.40
   
4.41
   
4.42
   
Bareboat Charterparty dated April 24, 2023 between Village Seven Co., Ltd., V7 Fune Inc. and Lord Ocean Navigation Co. for the M/V Lordship*
   
Addendum No.1 to the Bareboat Charterparty dated April 24, 2023 between Village Seven Co., Ltd., V7 Fune Inc. and Lord Ocean Navigation Co. for the M/V Lordship, dated April 24, 2023*
   
Guarantee in respect of the M/V Lordship dated April 24, 2023 of the registrant in favor of Village Seven Co., Ltd. and V7 Fune Inc.*
   
Bareboat Charterparty dated May 9, 2023 between Mi-Das Line S.A. and Titan Ocean Navigation Co. for the M/V Titanship*
   
4.47
   
4.48
   
4.49
   
4.50
   
4.51
   
4.52
   
Commercial Management Agreement dated April 5, 2023 between Seanergy Management Corp. and United Management Corp.*
   
List of Subsidiaries*
   
Statement of Company Policy – Trading in the Company’s Securities*
   
Certificate of Principal Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act*
   
Certificate of Principal Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act*
   
Certificate of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

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Certificate of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
   
Consent of Deloitte Certified Public Accountants S.A.*
   
Consent of Ernst & Young (Hellas) Certified Auditors Accountants S.A.*
   
Policy for the Recovery of Erroneously Awarded Incentive Compensation*
   
101
The following financial information from the registrant’s annual report on Form 20-F for the fiscal year ended December 31, 2023, formatted in Inline Extensible Business Reporting Language (XBRL)*
(1) Consolidated Balance Sheets as of December 31, 2023 and 2022;
(2) Consolidated Statements of Income/(loss) for the years ended December 31, 2023, 2022 and 2021;
(3) Consolidated Statements of Shareholders’ (Deficit) / Equity for the years ended December 31, 2023, 2022 and 2021; and
(4) Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021.
   
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*

*Filed herewith

(1)
Incorporated herein by reference to Exhibit 3.1 to the registrant’s report on Form 6-K filed with the Commission on August 30, 2019.

(2)
Incorporated herein by reference to Exhibit 3.2 to the registrant’s registration statement on Form F-1 filed with the Commission on February 19, 2021.

(3)
Incorporated herein by reference to Exhibit 3.8 to the registrant’s report on Form 6-K filed with the Commission on February 15, 2023.

(4)
Incorporated herein by reference to Exhibit 1.1 to the registrant’s report on Form 6-K furnished to the Commission on December 14, 2023 .

(5)
Incorporated herein by reference to Exhibit 4.1 to the registrant’s report on Form 6-K filed with the Commission on February 15, 2023.

(6)
Incorporated herein by reference to Exhibit 3.1 to the registrant’s report on Form 6-K filed with the Commission on July 2, 2021.

(7)
Incorporated herein by reference to Exhibit 4.1 to the registrant’s report on Form 6-K furnished to the Commission on December 14, 2023.

(8)
Incorporated herein by reference to Exhibit 99.4 to the registrant’s report on Form 6-K filed with the Commission on December 10, 2021.

(9)
Incorporated herein by reference to Exhibit 4.6 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2023.

(10)
Incorporated herein by reference to Exhibit 4.7 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2023.

(11)
Incorporated herein by reference to Exhibit 4.10 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2022.

(12)
Incorporated herein by reference to Exhibit 4.11 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2022.

(13)
Incorporated herein by reference to Exhibit 4.52 to the registrant’s annual report on Form 20-F filed with the Commission on April 21, 2015.

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(14)
Incorporated herein by reference to Exhibit 4.14 to the registrant’s annual report on Form 20-F filed with the Commission on April 20, 2016.

(15)
Incorporated herein by reference to Exhibit 4.15 to the registrant’s annual report on Form 20-F filed with the Commission on April 20, 2016.

(16)
Incorporated herein by reference to Exhibit 4.13 to the registrant’s annual report on Form 20-F filed with the Commission on March 7, 2018.

(17)
Incorporated herein by reference to Exhibit 4.19 to the registrant’s annual report on Form 20-F filed with the Commission on March 25, 2019.

(18)
Incorporated herein by reference to Exhibit 4.17 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2022.

(19)
Incorporated herein by reference to Exhibit 4.58 to the registrant’s annual report on Form 20-F filed with the Commission on April 21, 2015.

(20)
Incorporated herein by reference to Exhibit 10.89 to the registrant’s registration statement on Form F-1 filed with the Commission on November 8, 2018.

(21)
Incorporated herein by reference to Exhibit 10.90 to the registrant’s registration statement on Form F-1 filed with the Commission on November 8, 2018.

(22)
Incorporated herein by reference to Exhibit 4.53 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2022.

(23)
Incorporated herein by reference to Exhibit 4.54 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2022.

(24)
Incorporated herein by reference to Exhibit 4.55 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2022.

(25)
Incorporated herein by reference to Exhibit 4.56 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2022.

(26)
Incorporated herein by reference to Exhibit 4.57 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2022.

(27)
Incorporated herein by reference to Exhibit 4.58 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2022.

(28)
Incorporated herein by reference to Exhibit 4.59 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2022.

(29)
Incorporated herein by reference to Exhibit 4.60 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2022.

(30)
Incorporated herein by reference to Exhibit 4.49 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2023.

(31)
Incorporated herein by reference to Exhibit 4.62 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2022.

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(32)
Incorporated herein by reference to Exhibit 4.63 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2022.

(33)
Incorporated herein by reference to Exhibit 4.64 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2022.

(34)
Incorporated herein by reference to Exhibit 4.53 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2023.

(35)
Incorporated herein by reference to Exhibit 4.54 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2023.

(36)
Incorporated herein by reference to Exhibit 4.56 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2023.

(37)
Incorporated herein by reference to Exhibit 4.1 to the registrant’s report on Form 6-K filed with the Commission on April 3, 2020.

(38)
Incorporated herein by reference to Exhibit 4.2 to the registrant’s report on Form 6-K filed with the Commission on April 3, 2020.

(39)
Incorporated herein by reference to Exhibit 4.59 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2023.

(40)
Incorporated herein by reference to Exhibit 4.60 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2023.

(41)
Incorporated herein by reference to Exhibit 4.61 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2023.

(42)
Incorporated herein by reference to Exhibit 4.1 to the registrant’s report on Form 6-K furnished to the Commission on August 19, 2020.

(43)
Incorporated herein by reference to Exhibit 4.2 to the registrant’s report on Form 6-K furnished to the Commission on August 19, 2020.

(44)
Incorporated herein by reference to Exhibit 4.67 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2023.

(45)
Incorporated herein by reference to Exhibit 4.68 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2023.

(46)
Incorporated herein by reference to Exhibit 4.69 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2023.

(47)
Incorporated herein by reference to Exhibit 4.70 to the registrant’s annual report on Form 20-F filed with the Commission on March 31, 2023.

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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

 
SEANERGY MARITIME HOLDINGS CORP.
   
 
By:
/s/ Stamatios Tsantanis
 
Name:
Stamatios Tsantanis
 
Title:
Chairman & Chief Executive Officer
     
Date: April 3, 2024
    

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
 
Page
   
F-2
   
Reports of Independent Registered Public Accounting Firm (PCAOB ID 1457) F-4
   
F-5
   
F-6
   
F-7
   
F-8
   
F-9

F-1
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Seanergy Maritime Holdings Corp.

Opinion on the Financial Statements
 
We have audited the accompanying consolidated balance sheets of Seanergy Maritime Holdings Corp. and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of income, stockholders’ equity, and cash flows, for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 3, 2024, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
 
Impairment of Long-Lived Assets – Future Charter Rates for vessels with impairment indicators – Refer to Note 2 of the consolidated financial statements.
 
Critical Audit Matter Description
 
The Company’s evaluation of its vessels, including the vessel acquired through a finance lease for which the Company has recorded a right of use asset, for impairment involves an initial assessment of each vessel to determine whether events or changes in circumstances exist that may indicate that the carrying amount of the vessel is greater than its fair value and may no longer be recoverable. As of December 31, 2023, 4 out of 17 vessels had an impairment indication.
 
F-2
Table of Contents
If indicators of impairment exist for a vessel, the Company determines the recoverable amount by estimating the undiscounted future cash flows associated with the vessel. If the carrying value of the vessel (plus the unamortized dry-docking costs) exceeds its undiscounted future net cash flows, the carrying value of the vessel is reduced to its fair value. The undiscounted cash flows incorporate various factors and significant assumptions, including estimated future charter rates for Capesize bulkers. Future charter rates reflect the estimated charter revenues which are based on a combination of charter rates estimates for the first calendar year, and the 10-year average historical charter earnings, of similar size vessels, excluding outliers, for the period thereafter up to the end of the estimated useful life of the vessel. The estimated future charter rates are then adjusted for estimated commissions, expected off hires due to scheduled maintenance and estimated unexpected off hires, adding an estimated premium for vessels with installed scrubbers if applicable.
 
We identified future charter rates for vessels with impairment indicators used in the undiscounted future cash flows analysis of vessels with an impairment indication as a critical audit matter because of the complex judgements made by management to estimate future charter rates and the significant impact they have on undiscounted cash flows expected to be generated over the remaining useful life of the vessel.
 
This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s projected charter rates.
 
How the Critical Audit Matter Was Addressed in the Audit
 
Our audit procedures related to the future charter rates for vessels with impairment indicators utilized in the undiscounted future cash flows included the following among others:
 
•
We tested the effectiveness of controls over management’s review of the impairment analysis, including the future charter rates used within the undiscounted future cash flows analysis.
•
We evaluated the reasonableness of the Company’s estimate of future charter rates by:
 
 
o
Evaluating the Company’s methodology for estimating the future charter rates utilized by using our industry experience. For the first calendar year the Company estimates the daily future charter rate using the average of three published third-party estimates. For the periods thereafter the Company bases its estimate on a published third party’s average 10-year historical daily charter earnings of similar size vessels excluding outliers. These future charter rates are then adjusted for estimated commissions, expected off hires due to scheduled maintenance, estimated unscheduled off hires and estimated premium for vessels with installed scrubbers.

 
o
Comparing the future charter rates utilized in the undiscounted future cash flow analysis to a) historical rate information for Capesize bulkers published by third parties, b) the Company’s budget, c) other external market sources, including analysts’ reports, d) market reports on spreads on marine fuel (for determination of premium for scrubber fitted vessels), reports on  prospective market outlook, and e) the Company’s historical records to assess estimated commissions and off hires.

 
o
Considering the consistency of the assumptions used with evidence obtained in other areas of the audit. This included, among others, 1) internal communications by management to the board of directors, and 2) external communications by management to analysts and investors.

/s/ Deloitte Certified Public Accountants S.A.
Athens, Greece
April 3, 2024
We have served as the Company’s auditor since 2022.

F-3
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Seanergy Maritime Holdings Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Seanergy Maritime Holdings Corp. (the Company) as of December 31, 2021, the related consolidated statements of operations, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.

We served as the Company’s auditor from 2012 to 2022.

Athens, Greece
March 31, 2022,

except for the retroactive effect of the reverse stock split effected on February 16, 2023, described in Note 1 to the consolidated financial statements, as to which the date is December 31, 2023 and 2022
March 31, 2023

F-4
Table of Contents
Seanergy Maritime Holdings Corp.
Consolidated Balance Sheets
(In thousands of US Dollars, except for share and per share data)

         
2023
    
2022
  
ASSETS
                  
Current assets:
                  
Cash and cash equivalents
    
4
      
19,378
      
26,027
  
Restricted cash
    
4, 8
      
50
      
1,650
  
Accounts receivable trade, net
    
13
      
896
      
720
  
Inventories
    
5
      
1,559
      
1,995
  
Prepaid expenses
            
1,238
      
1,096
  
Due from related parties
      3       308       829  
Assets held for sale     6
       -       28,252  
Other current assets
            
1,656
      
1,075
  
Total current assets
            
25,085
      
61,644
  
                         
Fixed assets:
                        
Vessels, net
    
6
      
410,476
      
434,133
  
Finance lease, right-of-use asset
     7       29,562       -  
Other fixed assets, net
            
423
      
412
  
Total fixed assets
            
440,461
      
434,545
  
                         
Other non-current assets:
                        
Deposits assets, non-current
    

     
-
      
1,325
  
Deferred charges and other investments, non-current
    
2
      
6,397
      
10,759
  
Restricted cash, non-current
    
4, 8
      
5,500
      
4,800
  
Operating lease, right-of-use asset
    
11
      
405
      
499
  
Other non-current assets
            
29
      
28
  
TOTAL ASSETS
            
477,877
      
513,600
  
                         
LIABILITIES AND STOCKHOLDERS’ EQUITY
                        
Current liabilities:
                        
Current portion of long-term debt and other financial liabilities, net of deferred finance costs and debt discounts of $1,175 and $1,856, respectively
    
8
      
31,780
      
35,051
  
Finance lease liability, current
     7
      21,778
       -
  
Debt related to assets held for sale, net of deferred finance costs of $NIL and $110, respectively
     8
       -       12,990  
Current portion of convertible notes, net of deferred finance costs and debt discounts of $NIL and $332, respectively
     9
       -       10,833  
Liability from contract with related party     3,6
       -       12,688  
Trade accounts and other payables
            
5,489
      
7,826
  
Accrued liabilities
            
7,736
      
8,374
  
Operating lease liability, current
    
11
      
105
      
108
  
Deferred revenue
    
13
      
2,136
      
2,232
  
Other current liabilities     12, 17
       491       4,548  
Total current liabilities
            
69,515
      
94,650
  
                         
Non-current liabilities:
                        
Long-term debt and other financial liabilities, net of current portion and deferred finance costs and debt discounts of $1,746 and $1,871, respectively
    
8
      
179,010
      
196,825
  
Operating lease liability, non-current
    
11
      
300
      
391
  
Deferred revenue, non-current
    
13
      
254
      
35
  
Other liabilities, non-current
      8      
353
      
-
  
Total liabilities
            
249,432
      
291,901
  
                         
Commitments and contingencies
    
11
      
     
 
                         
STOCKHOLDERS’ EQUITY
                        
Preferred stock, $0.0001 par value; 25,000,000 shares authorized; 20,000 and 20,000 shares issued and outstanding as at December 31, 2023 and 2022, respectively
     12
      
-
      
-
  
Common stock, $0.0001 par value; 500,000,000 authorized shares as at December 31, 2023 and 2022; 19,636,352 and 18,191,614 shares issued and outstanding as at December 31, 2023 and 2022, respectively
    
12
      
2
      
2
  
Additional paid-in capital
    
12
      
590,129
      
583,691
  
Accumulated deficit
    
     
(361,686
)
    
(361,994
)
Total stockholders’ equity
            
228,445
      
221,699
  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
            
477,877
      
513,600
  
The accompanying notes are an integral part of these consolidated financial statements.

F-5
Table of Contents
Seanergy Maritime Holdings Corp.
Consolidated Statements of Income
For the years ended December 31, 2023, 2022 and 2021
(In thousands of US Dollars, except for share and per share data)

 
  
Notes
    
2023
    
2022
    
2021
  

                       
Vessel revenue, net
     13       107,036       122,629       153,108  
Fees from related parties
     3       3,198       2,391       -  
Revenue, net
            
110,234
      
125,020
      
153,108
  
Expenses:
                                
Voyage expenses
    
13
      
(2,851
)
    
(4,293
)
    
(16,469
)
Vessel operating expenses
            
(42,260
)
    
(43,550
)
    
(36,332
)
Management fees
            
(700
)
    
(1,368
)
    
(1,435
)
General and administration expenses
     16      
(22,149
)
    
(17,412
)
    
(13,739
)
Amortization of deferred dry-docking costs
     2      
(4,155
)
    
(4,880
)
    
(2,793
)
Depreciation and amortization
     6      
(24,676
)
    
(23,417
)
    
(17,151
)
Gain on sale of vessel, net (including $8,094, $NIL and $NIL, to related party for the years ended December 31, 2023, 2022 and 2021, respectively - Note 3)
     3, 6
      
8,094
       -
      
697
  
(Loss) / gain on forward freight agreements, net
             (188 )     (417 )     24
  
Operating income
            
21,349
      
29,683
      
65,910
  
Other income / (expenses), net:
                                
Interest and finance costs
    
14
      
(20,694
)
    
(15,332
)
    
(17,779
)
Loss on extinguishment of debt
     8
       (540 )     (1,291 )     (6,863 )
Interest and other income
     3       2,443
       1,361
       161
  
Gain on spin-off of United Maritime Corporation
     3      
-
      
2,800
      
-
  
Foreign currency exchange losses, net
            
(276
)
    
(10
)
    
(81
)
Total other expenses, net
            
(19,067
)
    
(12,472
)
    
(24,562
)
Net income before income taxes
            
2,282
      
17,211
      
41,348
  
Income taxes
            
-
      
28
      
-
  
Net income
            
2,282
      
17,239
      
41,348
  
 
                                
Net income per common share, basic
    
15
      
0.12
      
0.97
      
2.70
  
Net income per common share, diluted
     15
       0.12
       0.96       2.50  

                               
Weighted average common shares outstanding, basic
    
15
      
18,394,419
      
17,439,033
      
15,332,191
  
Weighted average common shares outstanding, diluted
     15
       18,442,688
       17,684,048
       19,133,753
  

The accompanying notes are an integral part of these consolidated financial statements.

F-6
Table of Contents
Seanergy Maritime Holdings Corp.
Consolidated Statements of Stockholders’ Equity
For the years ended December 31, 2023, 2022 and 2021
 (In thousands of US Dollars, except for share data)

   
Preferred Stock Series B
    
Common stock
     Additional           Total  
   
# of Shares
    
Par
Value
    
# of Shares
    
Par
Value
    
paid-in
capital
    
Accumulated
deficit
    
stockholders’
equity
  
                                           
Balance, January 1, 2021
    
-
      
-
      
6,831,499
      
1
      
490,290
      
(394,597
)
    
95,694
  
Issuance of common stock (including the exercise of warrants) (Note 12)
    
-
      
-
      
9,238,754
      
1
      
98,217
      
-
      
98,218
  
Issuance of common stock and warrants for repayment of subordinated long-term debt (Note 8)
    
-
      
-
      
428,571
      
-
      
3,000
      
-
      
3,000
  
Issuance of common stock upon conversion of convertible notes (Note 9)
    
-
      
-
      
300,000
      
-
      
3,600
      
-
      
3,600
  
Issuance of preferred shares to related party (Note 12)
    
20,000
      
-
      
-
      
-
      
250
      
-
      
250
  
Stock based compensation (Note 16)
    
-
      
-
      
670,000
      
-
      
5,097
      
-
      
5,097
  
Repurchase of common stock (Note 12)
    
-
      
-
      
(170,210
)
    
-
      
(1,708
)
    
-
      
(1,708
)
Repurchase of warrants (Note 12)
    
-
      
-
      
-
      
-
      
(1,023
)
    
-
      
(1,023
)
Net income
    
-
      
-
      
-
      
-
      
-
      
41,348
      
41,348
  
Balance, December 31, 2021
    
20,000
      
-
      
17,298,614
      
2
      
597,723
      
(353,249
)
    
244,476
  
Cumulative adjustment due to adoption of ASU 2020-06 (Note 9)
    
-
      
-
      
-
      
-
      
(21,165
)
    
10,216
      
(10,949
)
Issuance of common stock (including the exercise of warrants) (Note 12)
    
-
      
-
      
10,000
      
-
      
70
      
-
      
70
  
Stock based compensation (Note 16)
    
-
      
-
      
883,000
      
-
      
7,185
      
-
      
7,185
  
Repurchase of warrants (Note 12)
    
-
      
-
      
-
      
-
      
(122
)
    
-
      
(122
)
Dividends ($1.25 per share) (Note 12)
    
-
      
-
      
-
      
-
      
-
      
(22,472
)
    
(22,472
)
United Maritime Corporation spin-off (Note 3)
    
-
      
-
      
-
      
-
      
-
      
(13,728
)
    
(13,728
)
Net income
    
-
      
-
      
-
      
-
      
-
      
17,239
      
17,239
  
Balance, December 31, 2022
    
20,000
      
-
      
18,191,614
      
2
      
583,691
      
(361,994
)
    
221,699
  
ATM offering (Note 12)
    
-
      
-
      
1,099
      
-
      
(191
)
    
-
      
(191
)
Stock based compensation (Note 16)
    
-
      
-
      
1,823,467
      
-
      
9,147
      
-
      
9,147
  
Dividends ($0.10 per share) (Note 12)
    
-
      
-
      
-
      
-
      
-
      
(1,974
)
    
(1,974
)
Warrants buyback (Note 12)
    
-
      
-
      
-
      
-
      
(816
)
    
-
      
(816
)
Share buyback (Note 12)
    
-
      
-
      
(375,531
)
    
-
      
(1,679
)
    
-
      
(1,679
)
Redemption of fractional shares due to reverse stock split
    
-
      
-
      
(4,297
)
    
-
      
(23
)
    
-
      
(23
)
Net income
     -      
-
      
-
      
-
      
-
      
2,282
      
2,282
  
Balance, December 31, 2023
    
20,000
      
-
      
19,636,352
      
2
      
590,129
      
(361,686
)
    
228,445
  

The accompanying notes are an integral part of these consolidated financial statements.

F-7
Table of Contents
Seanergy Maritime Holdings Corp.
Consolidated Statements of Cash Flows
For the years ended December 31, 2023, 2022 and 2021
(In thousands of US Dollars)

   
2023
    
2022
    
2021
  
Cash flows from operating activities:
                  
Net income
    
2,282
      
17,239
      
41,348
  
Adjustments to reconcile net income to net cash provided by operating activities:
                        
Depreciation and amortization
    
24,676
      
23,417
      
17,151
  
Amortization of deferred dry-docking costs
    
4,155
      
4,880
      
2,793
  
Amortization of deferred finance costs and debt discounts
    
2,241
      
2,859
      
3,659
  
Amortization of convertible note beneficial conversion feature
    
-
      
-
      
2,887
  
Stock based compensation
    
9,147
      
7,185
      
5,097
  
Loss on extinguishment of debt
    
540
      
1,291
      
6,863
  
Gain on spin-off of United Maritime Corporation
    
-
      
(2,800
)
    
-
  
Gain on sale of vessel, net
    
(8,094
)
    
-
      
(697
)
Changes in operating assets and liabilities:
                        
Accounts receivable trade, net
    
(176
)
    
(839
)
    
801
  
Inventories
    
219
      
(840
)
    
3,202
  
Prepaid expenses
    
(141
)
    
22
      
22
  
Other current assets
    
(581
)
    
(641
)
    
240
  
Deferred voyage expenses
    
-
      
-
      
621
  
Deferred charges, non-current
    
(211
)
    
(9,494
)
    
(6,433
)
Other non-current assets
    
(1
)
    
2
      
2
  
Trade accounts and other payables
    
(2,222
)
    
(589
)
    
348
  
Accrued liabilities
    
(1,155
)
    
2,155
      
2,187
  
Due from related parties
    
521
      
(595
)
    
-
  
Deferred revenue
    
(96
)
    
(5,463
)
    
3,225
  
Deferred revenue, non-current
    
219
      
(503
)
    
(2,236
)
Other liabilities, non-current
    
-
      
-
      
(320
)
Net cash provided by operating activities
    
31,323
      
37,286
      
80,760
  
Cash flows from investing activities:
                        
Proceeds from sale of vessels/assets held for sale
    
23,910
      
-
      
-
  
Vessels acquisitions and improvements
    
(314
)
    
(70,321
)
    
(197,214
)
Finance lease prepayments and other initial direct costs
    
(7,000
)
    
-
      
-
  
Deposits assets, non-current
    
1,325
      
-
      
-
  
Advances from related party from sale of vessels
    
-
      
12,688
      
12,600
  
Investment in Series C preferred shares
    
-
      
(10,000
)
    
-
  
Proceeds from redemption of Series C preferred shares
    
-
      
10,000
      
-
  
Term deposits
    
-
      
1,500
      
100
  
Purchase of other fixed assets
    
(176
)
    
(130
)
    
(106
)
Net cash provided by / (used in) investing activities
    
17,745
      
(56,263
)
    
(184,620
)
Cash flows from financing activities:
                        
Proceeds from issuance of common stock and warrants, net of underwriters fees and commissions
    
8
      
70
      
98,302
  
Proceeds from long-term debt and other financial liabilities
    
53,750
      
124,800
      
180,320
  
Proceeds from issuance of preferred stock
    
-
      
-
      
250
  
Repayments of long-term debt and other financial liabilities
    
(88,742
)
    
(89,698
)
    
(132,058
)
Repayments of convertible notes
    
(11,165
)
    
(10,000
)
    
(13,950
)
Payments for repurchase of common stock
    
(1,679
)
    
-
      
(1,708
)
Payments for repurchase of warrants
    
(808
)
    
-
      
(1,023
)
Dividends paid
    
(6,031
)
    
(17,924
)
    
-
  
Payments of financing and stock issuance costs
    
(1,318
)
    
(1,420
)
    
(2,698
)
Payments of finance lease liabilities
    
(609
)
    
-
      
-
  
Payments of fractional shares due to reverse stock split
    
(23
)
    
-
      
-
  
Net cash (used in) / provided by financing activities
    
(56,617
)
    
5,828
      
127,435
  
Net (decrease) / increase in cash and cash equivalents and restricted cash
    
(7,549
)
    
(13,149
)
    
23,575
  
Cash and cash equivalents and restricted cash at beginning of period
    
32,477
      
45,626
      
22,051
  
Cash and cash equivalents and restricted cash at end of period
    
24,928
      
32,477
      
45,626
  
 
                        
SUPPLEMENTAL CASH FLOW INFORMATION
                        
Cash paid during the period for:
                        
Interest
    
18,429
      
11,710
      
11,166
  
 
                        
Noncash investing activities:
                        
Vessels acquisitions and improvements
    
-
      
1,015
      
837
  
Finance lease, right-of use assets and initial direct costs
    
22,997
       -       -  
 
                        
Noncash financing activities:
                        
Dividends declared but not paid (Note 12)
    
491
      
4,548
      
-
  
Financing and stock issuance costs
    
562
      
-
      
-
  
Units issued for repayment of subordinated long-term debt (Note 8)
    
-
      
-
      
3,000
  
Repayment of subordinated long-term debt by issuance of units (Note 8)
    
-
      
-
      
(3,000
)
Common shares issued by conversion of notes
    
-
      
-
      
3,600
  
Notes reduction via conversion
    
-
      
-
      
(3,600
)

The accompanying notes are an integral part of these consolidated financial statements.
 
F-8
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)

1.
Basis of Presentation and General Information:
 
Seanergy Maritime Holdings Corp. (the “Company” or “Seanergy”) was formed under the laws of the Republic of the Marshall Islands on January 4, 2008, with executive offices located in Glyfada, Greece. The Company provides global transportation solutions in the dry bulk shipping sector through its subsidiaries.
 
The accompanying consolidated financial statements include the accounts of Seanergy Maritime Holdings Corp. and its subsidiaries (collectively, the “Company” or “Seanergy”).

On January 20, 2022, United Maritime Corporation (“United”) was incorporated by Seanergy (the “Parent”), under the laws of the Republic of the Marshall Islands to serve as the holding company of the vessel-owning subsidiary of the Gloriuship (“United Maritime Predecessor” or the “Predecessor”) upon effectiveness of the Spin-Off (described below). On July 5, 2022, the Company  completed the spin-off of its wholly-owned subsidiary, United. United’s shares commenced trading on the Nasdaq Capital Market on July 6, 2022 under the symbol “USEA” (Note 3).

On February 16, 2023, the Company’s common stock began trading on a split-adjusted basis, following the approval from the Company’s board of directors on February 9, 2023 to reverse split the Company’s common stock at a ratio of one-for-ten (Note 12). All share and per share amounts disclosed in the consolidated financial statements and notes give effect to this reverse stock split retroactively, for all periods presented. No fractional shares were issued in connection with the reverse split. Shareholders who would otherwise hold a fractional share of the Company’s common stock received a cash payment in lieu of such fractional share.

At December 31, 2023, the Company had a working capital deficit of $44,430, which includes an amount of $2,136 relating to pre-collected revenue and is included in deferred revenue in the accompanying consolidated balance sheets. This amount represents current liabilities that do not require future cash settlement. The working capital deficit is mainly attributable to the repayments due under the long-term debt, the other financial liabilities and the finance lease liabilities. For the year ended December 31, 2023, the Company realized a net income of $2,282 and generated cash flow from operations of $31,323. The Company is currently evaluating financing alternatives to finance the future commitments (Note 17) and the purchase option under its finance lease liability and has a signed term-sheet with one existing financier for one out of the two future commitments. The Company considered the terms in the signed term sheet with the financier mentioned above, the amount of time that the Company has available to finance the other future commitment and the finance lease liability, the current market conditions and market outlook, management’s network of lenders and financiers and the past history of successful financing. Based on the above, the Company believes it has the ability to finance its existing obligations and future commitments to acquire vessels as they come due via cash from operations and financing options and thus continue as a going concern over the next twelve months following the date of the issuance of these consolidated financial statements.

Consequently, the consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

F-9
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
a.           Subsidiaries in Consolidation:
 
Seanergy’s subsidiaries included in these consolidated financial statements:
 
Company
  
Country of
Incorporation
  
Vessel name
  
Date of Delivery
  
Date of
Sale/Disposal
Seanergy Management Corp. (1)(2)
  
Marshall Islands
  
N/A
  
N/A
  
N/A
Seanergy Shipmanagement Corp. (1)(2)
  
Marshall Islands
  
N/A
  
N/A
  
N/A
Emperor Holding Ltd. (1)
  
Marshall Islands
  
N/A
  
N/A
  
N/A
Pembroke Chartering Services Limited (1)(3)(4)
  
Malta
  
N/A
  
N/A
  
N/A
Sea Genius Shipping Co. (1)
  
Marshall Islands
  
Geniuship
  
October 13, 2015
  
N/A
Sea Glorius Shipping Co. (6)   Marshall Islands   Gloriuship   November 3, 2015   July 5, 2022
Premier Marine Co. (1)
  
Marshall Islands
  
Premiership
  
September 11, 2015
  
N/A
Squire Ocean Navigation Co. (1)
  
Liberia
  
Squireship
  
November 10, 2015
  
N/A
Lord Ocean Navigation Co. (1)(5)
  
Liberia
  
Lordship
  
November 30, 2016
  
April 28, 2023
Champion Marine Co. (1)
  
Marshall Islands
  
Championship
  
November 7, 2018
  
N/A
Fellow Shipping Co. (1)
  
Marshall Islands
  
Fellowship
  
November 22, 2018
  
N/A
Friend Ocean Navigation Co. (1)
  
Liberia
  
Friendship
  
July 27, 2021
  
N/A
World Shipping Co. (1)
  
Marshall Islands
  
Worldship
  
August 30, 2021
  
N/A
Duke Shipping Co. (1)
  
Marshall Islands
  
Dukeship
  
November 26, 2021
  
N/A
Partner Marine Co. (1)(5)
  
Marshall Islands
  
Partnership
  
March 9, 2022
  
N/A
Honor Shipping Co. (1)
  
Marshall Islands
  
Honorship
  
June 27, 2022
  
N/A
Paros Ocean Navigation Co. (1)
  
Liberia
  
Paroship
  
December 27, 2022
  
N/A
Knight Ocean Navigation Co. (1)(5)
  
Liberia
  
Knightship
  
December 13, 2016
  
April 6, 2023
Flag Marine Co. (1)(5)
  
Marshall Islands
  
Flagship
  
May 6, 2021
  
May 11, 2021
Hellas Ocean Navigation Co. (1)(5)
  
Liberia
  
Hellasship
  
May 6, 2021
  
June 28, 2021
Patriot Shipping Co. (1)(5)
  
Marshall Islands
  
Patriotship
  
June 1, 2021
  
June 28, 2021
Good Ocean Navigation Co. (1)(4)(Note 6)
  
Liberia
  
Goodship
  
August 7, 2020
  
February 10, 2023
Traders Shipping Co. (1)(4)(Note 6)
  
Marshall Islands
  
Tradership
  
June 9, 2021
  
February 28, 2023
Gladiator Shipping Co. (1)(7)
  
Marshall Islands
  
N/A
  
N/A
  
N/A
Partner Shipping Co. Limited (1)(4)
  
Malta
  
Partnership
  
May 31, 2017
  
March 9, 2022
Titan Ocean Navigation Co. (1)(5)   Liberia   Titanship   October 24, 2023   N/A
Martinique International Corp. (1)(7)
  
British Virgin Islands
  
N/A
  
N/A
  
N/A
Harbour Business International Corp. (1)(7)
  
British Virgin Islands
  
N/A
  
N/A
  
N/A

(1)
Subsidiaries wholly owned
(2)
Management companies
(3)
Chartering services company
(4)
Dormant companies
(5)
Bareboat charterers
(6)
Subsidiary and vessel contributed to United following the Spin-off on July 5, 2022
(7)
Dormant companies which no longer own a vessel since 2018

F-10
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
2.
Significant Accounting Policies:

(a)
Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) and include the accounts and operating results of Seanergy and its wholly-owned subsidiaries where Seanergy has control. Control is presumed to exist when Seanergy, through direct or indirect ownership, retains the majority of the voting interest. In addition, Seanergy evaluates its relationships with other entities to identify whether they are variable interest entities and to assess whether it is the primary beneficiary of such entities. If the determination is made that the Company is the primary beneficiary, then that entity is included in the consolidated financial statements. When the Company does not have a controlling interest in an entity, but exerts a significant influence over the entity, the Company applies the equity method of accounting. All intercompany balances and transactions have been eliminated on consolidation.
 
The Company deconsolidates a subsidiary or derecognizes a group of assets when the Company no longer controls the subsidiary or group of assets specified in Accounting Standards Codification (ASC or Codification) 810-10-40-3A. When control is lost, the Company derecognizes the assets and liabilities of the qualifying subsidiary or group of assets.

(b)
Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates could include evaluation of relationships with other entities to identify whether they are variable interest entities, determination of vessel useful lives, allocation of purchase price in a business combination, determination of vessels’ impairment and determination of goodwill impairment.
 
(c)
Foreign Currency Translation

Seanergy’s functional currency is the United States dollar since the Company’s vessels operate in international shipping markets and therefore primarily transact business in U.S. Dollars. The Company’s books of accounts are maintained in U.S. Dollars. Transactions involving other currencies are translated into the United States dollar using exchange rates that are in effect at the time of the transaction. At the balance sheet dates, monetary assets and liabilities, which are denominated in other currencies, are translated to United States dollars at the foreign exchange rate prevailing at year-end. Gains or losses resulting from foreign currency translation are reflected in the consolidated statements of income.
 
(d)
Concentration of Credit Risk

Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents and trade accounts receivable. The Company places its cash and cash equivalents, consisting mostly of deposits, with high credit qualified financial institutions. The Company performs periodic evaluations of the relative credit standing of the financial institutions in which it places its deposits. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of the financial condition of its customers, receives charter hires in advance and generally does not require collateral for its accounts receivable.
 
(e)
Cash and Cash Equivalents

Seanergy considers time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents.

(f)
Term Deposits

Seanergy classifies time deposits and all highly liquid investments with an original maturity of more than three months as Term Deposits.
 
F-11
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
(g)
Restricted Cash

Restricted cash is excluded from cash and cash equivalents. Restricted cash represents minimum cash deposits or cash collateral deposits required to be maintained with certain banks under the Company’s borrowing arrangements or in relation to bank guarantees issued on behalf of the Company, which are legally restricted as to withdrawal or use. In the event that the obligation relating to such deposits is expected to be terminated within the next twelve months, these deposits are classified as current assets; otherwise they are classified as non-current assets.
 
(h)
Accounts Receivable Trade, Net

Accounts receivable trade, net, include receivables from charterers, net of a provision for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for the purposes of determining the appropriate provision for doubtful accounts. The Company also assessed the provisions of ASC 326, Financial Instruments—Credit Losses, by assessing the counterparties’ credit worthiness and concluded that there is no material impact in the Company’s consolidated financial statements. No provision for doubtful accounts was established as of December 31, 2023 and 2022.

(i)
Inventories

Inventories consist of lubricants and bunkers, which are measured at the lower of cost or net realizable value. Net realizable value is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.  Cost is determined by the first in, first out method.
 
(j)
Insurance Claims

The Company records insurance claim recoveries for insured losses incurred on damage to fixed assets and for insured crew medical expenses and for legal fees covered by directors’ and officers’ liability insurance. Insurance claim recoveries are recorded, net of any deductible amounts, at the time the Company’s fixed assets suffer insured damages or when crew medical expenses are incurred, or when liabilities are incurred by the Company’s directors and officers in their capacities as officers and directors, recovery is probable under the related insurance policies, the claim is not subject to litigation and the Company can make an estimate of the amount to be reimbursed. The classification of the insurance claims into current and non-current assets is based on management’s expectations as to their collection dates. No provision for credit losses was recorded as of December 31, 2023 and 2022 pursuant to the provisions of ASC 326.
 
(k)
Vessels

Vessels acquired as a part of a business combination are recorded at fair market value on the date of acquisition. Vessels acquired as asset acquisitions are stated at historical cost, which consists of the contract price less discounts, plus any material expenses incurred upon acquisition (delivery expenses and other expenditures to prepare for the vessel’s initial voyage). Subsequent expenditures for conversions and major improvements are capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels. Expenditures for routine maintenance and repairs are expensed as incurred.
 
In addition, other long-term investments, relating to vessels’ equipment not yet installed, are included in “Deferred charges and other-long term investments, non-current” in the consolidated balance sheets. Amounts paid for this equipment are included in “Vessels acquisitions and improvements” under “Cash flows from investing activities” in the consolidated statements of cash flows.
 
(l)
Vessel Depreciation

Depreciation is computed using the straight-line method over the estimated useful life of the vessels (25 years from the date of their initial delivery from the shipyard), after considering the estimated salvage value. Salvage value is estimated by the Company by taking the cost of steel times the weight of the ship noted in lightweight ton. Salvage values are periodically reviewed and revised to recognize changes in conditions, new regulations or for other reasons. Revisions of salvage values affect the depreciable amount of the vessels and affect depreciation expense in the period of the revision and future periods.
 
F-12
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
(m)
Impairment of Long-Lived Assets (Vessels) and Right-of-use asset (finance lease)

The Company reviews its long-lived assets (Vessels) and right-of-use asset for impairment whenever events or changes in circumstances, such as prevailing market conditions, obsolesce or damage to the asset, business plans to dispose a vessel earlier than the end of its useful life and other business plans, indicate that the carrying amount of the assets, plus any unamortized dry-docking costs, may not be recoverable. The volatile market conditions in the dry bulk market with decreased charter rates and decreased vessel market values are conditions that the Company considers to be indicators of a potential impairment for its vessels and right-of-use asset.
 
If indicators of impairment are present the Company determines undiscounted projected operating cash flows for each related vessel and right-of-use asset and compares it to the vessel’s or right-of-use asset’s carrying value, plus any unamortized dry-docking costs. When the undiscounted projected operating cash flows expected to be generated by the use of the vessel and/or its eventual disposition are less than the vessel’s or right-of-use asset’s carrying value, plus any unamortized dry-docking costs, the Company impairs the carrying amount of the vessel or right-of-use asset. Measurement of the impairment loss is based on the fair value of the asset as determined by independent valuators and use of available market data. The undiscounted projected operating cash inflows are determined by considering the charter revenues from existing time charters for the fixed fleet days and an estimated daily time charter equivalent for the non-fixed days (based on a combination of one year charter rates estimates and the average of the trailing 10-year historical charter rates, excluding outliers) adjusted for commissions, expected off hires due to scheduled maintenance and estimated unexpected breakdown  off hires, along with an estimate of an additional daily revenue for each scrubber-fitted vessel, as applicable. The undiscounted projected operating cash outflows are determined by applying various assumptions regarding vessel operating expenses and scheduled maintenance.

For the year ended December 31, 2023, indicators of impairment existed for four of the Company’s vessels as their carrying value plus any unamortized dry-docking costs was higher than their market value. The carrying value of the Company’s vessels plus any unamortized dry-docking costs for which impairment indicators existed as at December 31, 2023, was $121,577. From the impairment exercise performed, the undiscounted projected operating cash flows expected to be generated by the use of these four vessels were higher than the vessels’ carrying value, plus any unamortized dry-docking costs, and thus the Company concluded that no impairment charge should be recorded.

(n)
Assets held for sale


The Company classifies a vessel along with associated inventories as being held for sale when all of the criteria under ASC 360, Property, Plant and Equipment, are met: (i) management has committed to a plan to sell the vessel; (ii) the vessel is available for immediate sale in its present condition; (iii) an active program to locate a buyer and other actions required to complete the plan to sell the vessel have been initiated; (iv) the sale of the vessel is probable, and transfer of the asset is expected to qualify for recognition as a completed sale within one year; (v) the vessel is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.



Vessels classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. The resulting difference, if any, is recorded under “Impairment loss” in the consolidated statements of income. The vessels are not depreciated once they meet the criteria to be classified as held for sale.

(o)
Dry-Docking and Special Survey Costs

The Company follows the deferral method of accounting for dry-docking costs and special survey costs whereby actual costs incurred are deferred and are amortized on a straight-line basis over the period through the date the next survey is scheduled to become due. Dry-docking costs which are not fully amortized by the next dry-docking period are expensed. Amounts are included in “Deferred charges and other investments, non-current”.
 
(p)
Commitments and Contingencies

Liabilities for loss contingencies, arising from claims, assessments, litigation, fines and penalties, environmental and remediation obligations and other sources are recorded when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

F-13
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
(q)
Revenue Recognition

Revenues are generated from time charters, bareboat charters and spot charters. A time charter is a contract for the use of a vessel as well as vessel operations for a specific period of time and a specified daily charter hire rate, which is generally payable in advance. A bareboat charter is a contract in which the vessel is provided to the charterer for a fixed period of time at a specified daily rate, which is generally payable in advance. Spot charter agreements are charter hires, where a contract is made in the spot market for the use of a vessel for a specific voyage at a specified charter rate per ton of cargo or for a lump sum amount.

The Company accounts for its time charter contracts as operating leases pursuant to ASC 842 “Leases”. The Company has determined that the non-lease component in its time charter contracts relates to services for the operation of the vessel, which comprise of crew, technical and safety services, among others. The Company further elected to adopt a practical expedient that provides it with the discretion to recognize lease revenue as a combined single lease component for all time charter contracts (operating leases) since it determined that the related lease component and non-lease component have the same timing and pattern of transfer and the predominant component is the lease. The Company qualitatively assessed that more value is ascribed to the use of the asset (i.e., the vessel) rather than to the services provided under the time charter agreements. Time charter revenue is recorded over the term of the charter agreement as the service is provided and collection of the related revenue is reasonably assured.

The Company accounts for its spot charter contracts following the provisions of ASC 606, Revenue from contracts with customers. The Company has determined that its spot charter agreements do not contain a lease because the charterer under such contracts does not have the right to control the use of the vessel since the Company retains control over the operations of the vessel, provided also that the terms of the spot charter are predetermined, and any change requires the Company’s consent and are therefore considered service contracts. Spot charter revenue is recognized on a pro-rata basis over the duration of the voyage from loading to discharge, when a voyage agreement exists, the price is fixed or determinable, service is provided and the collection of the related revenue is reasonably assured. For voyage charters, the Company satisfies its single performance obligation to transfer cargo under the contract over the voyage period. The Company has taken the practical expedient not to disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.


Demurrage income, which is considered a form of variable consideration and is recognized as the performance obligation is satisfied, is included in Vessel revenue, net and represents payments by the charterer to the vessel owner when loading or discharging time exceeds the stipulated time in the voyage charter agreements.



Despatch expense, which is considered a form of variable consideration and is recognized as the performance obligation is satisfied, is included in Vessel revenue, net and represents payments to the charterer by the vessel owner when loading or discharging time is faster than the stipulated time in the voyage charter agreements.


Deferred revenue represents cash received in advance of performance under the contract prior to the balance sheet date and is realized when the associated revenue is recognized under the contract in periods after such date.

(r)
Leases

Office lease

In April 2018, the Company moved into new office spaces. Under ASC 842, the lease is classified as an operating lease and a lease liability and right-of-use asset based on the present value of future minimum lease payments have been recognized on the balance sheet. The monthly rent expense is recorded in general and administration expenses. The Company has assessed the right-of-use asset for impairment, and since no impairment indicators existed, no impairment charge was recorded.

F-14
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
(s)
Sale and Leaseback Transactions

In accordance with ASC 842, the Company, as seller-lessee, determines whether the transfer of an asset should be accounted for as a sale in accordance with ASC 606. The existence of an option for the seller-lessee to repurchase the asset precludes the accounting for the transfer of the asset as a sale unless both of the following criteria are met: (1) the exercise price of the option is the fair value of the asset at the time the option is exercised and (2) there are alternative assets, substantially the same as the transferred asset, readily available in the marketplace; and the classification of the leaseback as a finance lease or a sales-type lease, precludes the buyer-lessor from obtaining control of the asset. If the transfer of the asset meets the criteria of sale, the Company, as seller-lessee recognizes the transaction price for the sale when the buyer-lessor obtains control of the asset, derecognizes the carrying amount of the underlying asset and accounts for the lease in accordance with ASC 842. If the transfer does not meet the criteria of sale, the Company does not derecognize the transferred asset, accounts for any amounts received as a financing arrangement and recognizes the difference between the amount of consideration received and the amount of consideration to be paid as interest.

(t)
Commissions

Commissions, which include address and brokerage commissions, are recognized in the same period as the respective charter revenues. Address commissions are payable to the charterer and are included in “Vessel revenue, net” while brokerage commissions to third parties are included in “Voyage expenses”. For the years ended December 31, 2023 and 2022, an amount of $3,869 and $4,554, respectively, was included in “Vessel revenue, net” related to commission to third parties.

(u)
Vessel Voyage Expenses

Vessel voyage expenses primarily consist of port, canal, bunker expenses and brokerage commissions expenses that are unique to a particular charter. Under time charter agreements and bareboat charters, the Company incurs and pays only for brokerage commissions. Under a spot charter, the Company incurs and pays for certain voyage expenses, primarily consisting of bunkers consumption, brokerage commissions, port and canal costs. Under ASC 606 and after implementation of ASC 340-40 “Other assets and deferred costs” for contract costs, incremental costs of obtaining a contract with a customer, and contract fulfillment costs, are capitalized and amortized as the performance obligation is satisfied, if certain criteria are met. The Company has adopted the practical expedient not to capitalize incremental costs when the amortization period (voyage period) is less than one year. Costs to fulfill the contract prior to arriving at the load port primarily consist of bunkers which are deferred and amortized during the voyage period. Voyage costs arising as performance obligation are expensed as incurred.

(v)
Vessel Operating Expenses

Vessel operating expenses are expensed in the period incurred. Vessel operating expenses comprise costs for crewing, insurance, lubricants, spare parts, provisions, stores, repairs and maintenance, including major overhauling and underwater inspection, and other minor miscellaneous expenses.

(w)
Finance Costs

Underwriting, legal and other direct costs incurred with the issuance of long-term debt or to refinance existing debt or convertible notes are deferred and amortized to interest expense over the life of the related debt using the effective interest method. The Company presents unamortized deferred finance costs as a reduction of long-term debt in the accompanying balance sheets. For the accounting of the unamortized deferred finance costs following debt extinguishment, see below (Note 2(ac)).

(x)
Income Taxes

Income taxes are accounted for under the asset and liability method. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits in interest expense and penalties in general and administration expenses.

F-15
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
Seanergy Management Corp. (“Seanergy Management”), the Company’s management company, established in Greece under Greek Law 89/67 (as amended to date), is subject to an annual contribution calculated on the total amount of foreign exchange annually imported and converted to Euros. The contribution to be paid in 2024 by Seanergy Management for 2023 is estimated at $103 and is included in “General and administration expenses”. The contribution paid in the years ended December 2023 and 2022 was $110 and $97, respectively.

Seanergy Shipmanagement Corp. (“Seanergy Shipmanagement”), the Company’s second management company, established in Greece under Greek Law 89/67 (as amended to date), is subject to an annual contribution calculated on the total amount of foreign exchange annually imported and converted to Euros. The contribution to be paid in 2024 by Seanergy Shipmanagement for 2023 is estimated at $NIL. No contribution was paid by Seanergy Shipmanagement in the years ended December 2023 and 2022.

One of the Company’s previous vessel-owning subsidiaries was registered in Malta since May 23, 2018. This subsidiary was subject to a corporate flat tax in Malta. No tax expense has been recognized for the years presented in these consolidated financial statements.

Pursuant to the Internal Revenue Code of the United States (the “Code”), U.S. source income from the international operations of ships is generally exempt from U.S. tax if the company operating the ships meets both of the following requirements: (a) the Company is organized in a foreign country that grants an equivalent exception to corporations organized in the United States and (b) either (i) more than 50% of the value of the Company’s stock is owned, directly or indirectly, by individuals who are “residents” of the Company’s country of organization or of another foreign country that grants an “equivalent exemption” to corporations organized in the United States (50% Ownership Test) or (ii) the Company’s stock is “primarily and regularly traded on an established securities market” in its country of organization, in another country that grants an “equivalent exemption” to United States corporations, or in the United States (Publicly-Traded Test).

Notwithstanding the foregoing, the regulations provide, in pertinent part, that each class of the Company’s stock will not be considered to be “regularly traded” on an established securities market for any taxable year in which 50% or more of the vote and value of the outstanding shares of such class are owned, actually or constructively under specified stock attribution rules, on more than half the days during the taxable year by persons who each own 5% or more of the value of such class of the Company’s outstanding stock (“5 Percent Override Rule”).

Based on the Company’s analysis of its shareholdings during 2023, the Publicly-Traded Test for the entire 2023 year has been satisfied in that less than 50% of the Company’s issued and outstanding shares were held by persons who each own directly or indirectly 5% or more of the vote and value of such class of stock for more than half the days during the 2023 taxable year. Effectively, the Company and each of its subsidiaries qualify for this statutory tax exemption for the 2023 taxable year.

Certain charterparties of the Company contain clauses that permit the Company to seek reimbursement from charterers of any U.S. tax paid. The Company has in the past sought reimbursement and has secured payment from most of its charterers. The Company’s U.S. federal income tax based on its U.S. source shipping income for 2023, 2022 and 2021, taking into consideration charterers’ reimbursement, was $NIL, $NIL and $NIL, respectively.

(y)
Stock-based Compensation

Stock-based compensation represents vested and non-vested common stock granted to directors and employees for their services as well as to non-employees. The Company calculates stock-based compensation expense for the award based on its fair value on the grant date and recognizes it on an accelerated basis over the vesting period. The Company accounts for forfeitures when incurred.
 
(z)
Earnings per Share

Basic earnings per common share are computed by dividing net income available to Seanergy’s shareholders by the weighted average number of common shares outstanding during the period. Unvested shares granted under the Company’s Equity Incentive Plan, or other, are entitled to receive dividends which are not refundable, even if such shares are forfeited, and therefore are considered participating securities for basic earnings per share calculation purposes, using the two-class method. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted at the beginning of the periods presented, or issuance date, if later. The treasury stock method is used to compute the dilutive effect of warrants and shares issued under the Equity Incentive Plan. The if-converted method is used to compute the dilutive effect of shares which could be issued upon conversion of the convertible notes. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted earnings per share.

F-16
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
(aa)
Segment Reporting

Seanergy reports financial information and evaluates its operations by total charter revenues and not by the length of vessel employment, customer, or type of charter. As a result, management, including the chief operating decision maker, reviews operating results solely by revenue per day and operating results of the fleet and thus, Seanergy has determined that it operates under one reportable segment. Furthermore, when Seanergy charters a vessel to a charterer, the charterer is free to trade the vessel worldwide and, as a result, disclosure of geographic information is impracticable.

(ab)
Fair Value Measurements

The Company follows the provisions of ASC 820, Fair Value Measurement, which defines fair value and provides guidance for using fair value to measure assets and liabilities. The guidance creates a fair value hierarchy of measurement and describes fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts.


(ac)
Debt Modifications and Extinguishments

Costs associated with new loans or debt modifications, including fees paid to lenders or required to be paid to third parties on the lender’s behalf for obtaining new loans or refinancing existing loans, are recorded as deferred charges. Costs paid directly to third parties are expensed as incurred. Deferred finance costs are presented as a deduction from the corresponding liability. Such fees are deferred and amortized to interest and finance costs during the life of the related debt using the effective interest method. Unamortized fees relating to loans repaid or refinanced, meeting the criteria of debt extinguishment, are expensed in the period the repayment or refinancing is made. In particular, ASC 470-50-40-2 indicates that for extinguishments of debt, the difference between the reacquisition price and the net carrying amount of the extinguished debt (which includes any deferred debt finance costs) should be recognized as a gain or loss when the debt is extinguished and identified as a separate item.

(ad)
Convertible Notes and related Beneficial Conversion Features

The convertible notes were accounted for in accordance with ASC 470-20 “Debt with Conversion and Other Options” until December 31, 2021. Under the provisions of ASC 470-20, the terms of each convertible note included an embedded conversion feature which provided for a conversion at the option of the holder into shares of common stock at a predetermined rate.  The Company determined that the conversion features were beneficial conversion features (“BCF”) pursuant to ASC 470-20. The Company considered the BCF guidance only after determining that the features did not need to be bifurcated under ASC 815 “Derivatives and Hedging” or separately accounted for under the cash conversion literature of ASC 470-20. Accounting for an embedded BCF in a convertible instrument under ASC 470-20 required that the BCF be recognized separately at issuance by allocating a portion of the proceeds equal to the intrinsic value of the BCF to additional paid-in capital, resulting in a discount on the convertible instrument. As from January 1, 2022, the Company follows the provisions of ASU No. 2020-06 and convertible notes are reported as a single liability instrument and the interest rate is the coupon interest rate.

(ae)
Derivatives – Forward Freight Agreements

From time to time, the Company may take positions in derivative instruments including forward freight agreements, or FFAs. Generally, FFAs and other derivative instruments may be used to hedge a vessel owner’s exposure to the charter market for a specified route and period of time. Upon settlement, if the contracted charter rate is less than the average of the rates for the specified route and time period, as reported by an identified index, the seller of the FFA is required to pay the buyer the settlement sum, being an amount equal to the difference between the contracted rate and the settlement rate, multiplied by the number of days in the specified period covered by the FFA. Conversely, if the contracted rate is greater than the settlement rate, the buyer is required to pay the seller the settlement sum. The FFAs are not intended to serve as an economic hedge for the Company’s vessels that are being chartered in the spot market, but are assumed across all dry bulk vessel sectors based on the Company’s views of the underlying markets and short-term outlook. The Company measures the fair value of all open positions at each reporting date on this basis (Level 1). There were no open positions as of December 31, 2023 and 2022. The Company’s FFAs do not qualify for hedge accounting and therefore gains or losses are recognized in the consolidated statements of income under “Gain on forward freight agreements, net” and in the consolidated statements of cash flows in changes in operating assets and liabilities.

F-17
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
(af)
Share and warrant repurchases

The Company records the repurchase of its common shares and warrants at cost. The Company’s common shares repurchased for retirement are immediately cancelled and the Company’s common stock is accordingly reduced. Any excess of the cost of the shares over their par value is allocated in additional paid-in capital, in accordance with ASC 505-30-30, Treasury Stock. For warrants repurchased, if the instrument is classified as equity, any cash paid in the settlement is recorded as an offset to additional paid-in capital. The Company’s warrants are all classified as equity.

(ag)
Non-monetary transactions



Under ASC “845-10-30-10 Nonmonetary Transactions, Nonreciprocal Transfers with Owners” and ASC 505-60 “Spinoffs and Reverse Spinoffs”, a pro-rata spin-off of a consolidated subsidiary or equity method investee that meets the definition of a business under ASC 805 Business Combinations (ASC 805) is recognized at the carrying amount (after reduction, if applicable, of impairment) of the nonmonetary assets distributed within equity and no gain or loss is recognized. If the pro-rata spin-off of a consolidated subsidiary or equity method investee does not meet the definition of a business under ASC 805, the nonreciprocal transfer of nonmonetary assets is accounted for at fair value, if the fair value of the nonmonetary asset distributed is objectively measurable and would be clearly realizable to the distributing entity in an outright sale at or near the time of the distribution, and the spinnor recognizes a gain or loss for the difference between the fair value and book value of the spinnee. A transaction is considered pro rata if each owner receives an ownership interest in the transferee in proportion to its existing ownership interest in the transferor (even if the transferor retains an ownership interest in the transferee). In accordance with ASC 805, if substantially all of the fair value of the gross assets distributed in a spin-off are concentrated in a single identifiable asset or group of similar identifiable assets, then the spin-off of a consolidated subsidiary does not meet the definition of a business. The Company evaluated the Spin-off (Note 3) and concluded that it was a pro rata distribution to the owners of the Company of shares of a consolidated subsidiary that does not meet the definition of a business under ASC 805, as the fair value of the gross assets contributed to United was concentrated in a group of similar identifiable assets, the vessel. The Company also assessed that the fair value of the nonmonetary assets transferred to United was objectively measurable and clearly realizable to the transferor in an outright sale at or near the time of the distribution, and thus the Spin-off was measured at fair value and a gain for the difference between the fair value and book value of the assets contributed to United was recognized.

(ah)
Finance Lease Liabilities & Right-of-Use Assets

Bareboat charter-in agreements that the Company may enter into are accounted for pursuant to ASC 842 and are classified as finance leases if they involve a purchase obligation or a purchase option that is reasonably certain, at inception, that will be exercised, among other factors. At the commencement date of the finance lease, a lessee initially measures the lease liability at the present value, using the discount rate determined on the commencement, of the lease payments to be made over the lease term, including any amount for the purchase the vessel, if applicable. Subsequently, the lease liability is increased by the interest on the lease liability and decreased by the lease payments during the period. The interest on the lease liability is determined in each period during the lease term as the amount that produces a constant periodic discount rate on the remaining balance of the liability, taking into consideration the reassessment requirements.

A lessee initially measures the finance right-of-use asset at cost which consists of the amount of the initial measurement of the lease liability; any lease payments made to the lessor at or before the commencement date, less any lease incentives received; and any initial direct costs incurred by the lessee. Subsequently, the finance right-of-use asset is measured at cost less any accumulated amortization and any accumulated impairment losses, taking into consideration the reassessment requirements. A lessee shall amortize the finance right-of-use asset on a straight-line basis (unless another systematic basis better represents the pattern in which the lessee expects to consume the right-of-use asset’s future economic benefits) from the commencement date to the earlier of the end of the useful life of the finance right-of-use asset or the end of the lease term. However, if the lease transfers ownership of the underlying asset to the lessee or the lessee is reasonably certain to exercise an option to purchase the underlying asset, the lessee shall amortize the right-of-use asset to the end of the useful life of the underlying asset. The Company elected the practical expedient on not separating lease components from nonlease components in accordance with ASC 842-10-15-37.

F-18
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
Recent Accounting Pronouncements Adopted

The Company has adopted ASU 2020-04, Reference Rate Reform (Topic 848), as amended by ASU 2022-06 Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848: Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. ASU 2020-04 applies to contracts that reference LIBOR or another reference rate expected to be terminated because of reference rate reform. The amendments in this Update are effective for all entities as of March 12, 2020 through December 31, 2022. The adoption of ASU No. 2020-04 did not have any effect in the Company’s consolidated financial statements and disclosures.

Recent Accounting Pronouncements



In November 2023, the FASB issued ASU 2023-07, which requires the disclosure of significant segment expenses that are part of an entity’s segment measure of profit or loss and regularly provided to the chief operating decision maker. In addition, it adds or makes clarifications to other segment-related disclosures, such as clarifying that the disclosure requirements in ASC 280 are required for entities with a single reportable segment and that an entity may disclose multiple measures of segment profit and loss. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024. Early adoption is permitted. The amendments should be adopted retrospectively. The Company does not believe that the adoption of this accounting standard will have a material effect on the consolidated financial statements and related disclosures.


There are no other recent accounting pronouncements the adoption of which is expected to have a material effect on the Company’s consolidated financial statements in the current or any future periods.

3.
Transactions with Related Parties:


On July 5, 2022, the Company completed the spin-off of its previously wholly-owned subsidiary, United (the “Spin-Off”). The Company’s shareholders received one common share of United for every 11.8 common shares of Seanergy held at the close of business on June 28, 2022, so that such holders maintained the same proportionate interest in the Parent and in United both immediately before and immediately after the Spin-Off. In addition, the Company’s Chief Executive Officer, being the holder of all of Seanergy’s issued and outstanding Series B preferred shares, received 40,000 of United’s Series B Preferred Shares par value $0.0001 (the “Series B Preferred Shares”).

On July 5, 2022, Seanergy entered into a Contribution and Conveyance Agreement with United. Pursuant to the Contribution and Conveyance Agreement, Seanergy, immediately prior to the Spin-Off, contributed (i) all of the Predecessor’s shares to United as a capital contribution, and (ii) an aggregate of $5,000 in cash as working capital, in exchange for the issuance of 5,000 of United’s 6.5% Series C Cumulative Convertible Preferred Shares (“Series C Preferred Shares”) to Seanergy, the cancellation of the 500 registered shares of United, then outstanding, and the issuance of 1,512,004 common shares of United to Seanergy and 40,000 of United’s Series B Preferred Shares to the holder of all Seanergy’s issued and outstanding Series B preferred shares (together, the “Distribution Shares”). Seanergy distributed the Distribution Shares to its shareholders on a pro rata basis as a special dividend. Additionally, Seanergy agreed to indemnify United for any and all obligations and other liabilities arising from or relating to the operation, management or employment of the Gloriuship prior to the effective date of the Spin-Off (July 5, 2022), except for the July 2020 EnTrust Facility.

On July 5, 2022, Seanergy entered into a Right of First Refusal Agreement with United. Pursuant to the agreement, Seanergy has a right of first refusal with respect to any opportunity available to United to sell, acquire or charter-in any Capesize vessel as well as with respect to chartering opportunities, other than short-term charters with a term of 13 months or less, available to United for Capesize vessels. In addition, United has a right of first offer with respect to any Capesize vessel sales by Seanergy. United exercised such right with respect to the sale of the Goodship and the Tradership (Note 6). Upon a change of control of United or Seanergy occurring, such rights terminate immediately.

F-19
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
As detailed in Note 2(ah), the  Company evaluated the Spin-Off under ASC 505-60 Spinoffs and Reverse Spinoffs, ASC 805 Business Combinations, referring to the definition of a business, and ASC 845-10-30-10 Nonreciprocal Transfers with Owners and concluded that the transaction is a pro rata spin-off of a consolidated subsidiary that does not meet the definition of a business under ASC 805, thus the transaction was accounted as a nonreciprocal transfer with owners at fair value, since the criteria imposed by ASC 845 were met. The aggregate fair value of $18,500 of the vessel contributed to the United was determined through Level 2 inputs of the fair value hierarchy by taking into consideration two third party valuations obtained for the vessel. The fair value of other assets contributed to the United, comprising the value of the time charter attached amounted to $308 for the Gloriuship which was accounted for, using the current time charter rates at the time of the Spin-off. The fair value of liabilities assumed, comprised loan and loan related fees amounted to $5,080. The net assets of $13,728 have been recorded as dividends in the accompanying consolidated balance sheets.

During the year ended December 31, 2022, “Gain on Spin-off of United Maritime Corporation” amounted to $2,800 represents the difference between the fair value of the assets contributed (i.e., the vessel and the attached time charter) and their carrying value. Carrying value consisting of vessel cost amounted to $12,902, unamortized deferred charges amounted to $3,058 and other costs amounted to $48.

On July 26, 2022, United issued 5,000 additional Series C Preferred Shares to Seanergy in exchange for $5,000 cash.

On November 28, 2022, United redeemed its outstanding 10,000 Series C Preferred Shares held by Seanergy at a price equal to 105% of the original issue price, resulting in a cash inflow of $10,500. As of December 31, 2022, dividends received in respect with the Series C Preferred Shares amounted to $243 and the difference between the redemption price and the original price of Series C preferred Shares amounted to $500 and are included in “Interest and other income” in the accompanying statements of income.


Management Agreements:

Master Management Agreement


On July 5, 2022, Seanergy entered into a master management agreement with United for the provision of technical, administrative, commercial, brokerage and certain other services. Certain of these services are being contracted directly with Seanergy’s wholly owned subsidiaries, Seanergy Shipmanagement Corp. (“Seanergy Shipmanagement”) and Seanergy Management. In consideration of Seanergy providing such services, United pays a fixed administration fee of $325 per vessel per day to Seanergy. The initial term of the master management agreement with United will expire on December 31, 2024. Unless three months’ notice of non-renewal is given by either party prior to the end of the then current term, this agreement will automatically extend for additional 12-month periods. The master management agreement may be terminated immediately only for cause and at any time by either party with three months’ prior notice, and no termination fee will be payable.


Technical Management Agreement

In relation to the technical management, Seanergy Shipmanagement is responsible for arranging (directly or by subcontracting) for the day-to-day operations, inspections, maintenance, repairs, drydocking, purchasing, insurance and claims handling for five of United’s vessels. Pursuant to the management agreements, Seanergy Shipmanagement earns a fixed management fee of $10 per month for such services for one vessel and a fixed management fee of $14 per month for the remaining four vessels.

Commercial Management Agreement

Seanergy Management had entered into a commercial management agreement with United pursuant to which Seanergy Management acted as agent for United’s subsidiaries (directly or through subcontracting) for the commercial management of their vessels, including chartering, monitoring thereof, freight collection, and sale and purchase up until March 31, 2023, except for one tanker vessel for which such agreement was in effect up until her sale to her new owners in August 2023. United was paying to Seanergy Management a fee equal to 1.25% of the gross freight, demurrage and charter hire collected from the employment of United’s vessels, except for any vessels that were chartered-out to Seanergy. Seanergy Management also earned a fee equal to 1% of the contract price of any vessel bought or sold by them on United’s behalf, except for any vessels bought or sold from or to Seanergy, or in respect of any vessel sale relating to a sale and leaseback transaction.


F-20
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
Effective as of April 1, 2023, Seanergy Management has entered into a new commercial management agreement with United’s subsidiary, United Management Corp. (“United Management”) pursuant to which Seanergy Management acts as agent for United’s subsidiaries for the commercial management of United’s vessels, including voyage monitoring, freight collection, postfixing, sale, purchase and bareboat chartering. United agreed to pay to Seanergy Management a fee equal to 0.75% of the gross freight, demurrage and charter hire collected from the employment of United’s vessels. In addition, Seanergy Management earns a fee equal to 1% of the contract price of any vessel bought, sold or bareboat chartered by them on United’s behalf (not including any vessels bought, sold or bareboat chartered from or to Seanergy, or any vessel sale relating to a sale and leaseback transaction).



During the years ended December 31, 2023 and 2022, fees charged from Seanergy to United in relation to the above-mentioned services amounted to $3,198 and $2,391, respectively and are presented in “Fees from related parties” in the accompanying statements of income.



As of December 31, 2023 and 2022, balance due from United amounted to $308 and $829, respectively and is included in “Due from related parties” in the accompanying consolidated balance sheets.



On December 27, 2022, Seanergy entered into two memoranda of agreement to sell two Capesize vessels to United for an aggregate purchase price of $36,250 (Note 6). On December 28, 2022, the Company received an advance of $12,688 in cash, according to the terms of the agreements, which is separately presented as “Liability from contract with related party” in the accompanying consolidated balance sheets. Both vessels were delivered to United in February 2023. As of December 31, 2023, a gain on sale of vessel, net of sale expenses, amounting to $8,094 was recognized and is presented as “Gain on sale of vessels, net” in the consolidated statements of income (Note 6).

4.
Cash and Cash Equivalents and Restricted Cash:

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows:

 
  
December 31,
2023
    
December 31,
2022
  
Cash and cash equivalents
    
19,378
      
26,027
  
Restricted cash
    
50
      
1,650
  
Restricted cash, non-current
    
5,500
      
4,800
  
Cash and cash equivalents and restricted cash
    
24,928
      
32,477
  


Restricted cash as of December 31, 2023 includes $2,000 of minimum liquidity requirements as per the Piraeus Bank Loan Facility (Note 8), $2,000 of minimum liquidity requirements as per the October 2022 Danish Ship Finance Loan Facility (Note 8), $500 of minimum liquidity requirements as per the August 2021 Alpha Bank Loan Facility (Note 8), $500 of minimum liquidity requirements as per the June 2022 Alpha Bank Loan Facility (Note 8), $500 of minimum liquidity requirements as per the December 2022 Alpha Bank Loan Facility (Note 8), and $50 of restricted deposits pledged as collateral regarding credit cards balances with one of the Company’s financial institutions. Minimum liquidity, not legally restricted, as of December 31, 2023, of $9,600 as per the Company’s credit facilities’ covenants, is included in “Cash and cash equivalents”.



Restricted cash as of December 31, 2022 includes $2,000 of minimum liquidity requirements as per the June 2022 Piraeus Bank Loan Facility (Note 8), $1,300 of minimum liquidity requirements as per the October 2022 Danish Ship Finance Loan Facility, $500 of minimum liquidity requirements as per the August 2021 Alpha Bank Loan Facility (Note 8), $500 of minimum liquidity requirements as per the June 2022 Alpha Bank Loan Facility (Note 8), $500 of minimum liquidity requirements as per the December 2022 Alpha Bank Loan Facility (Note 8), $1,600 of minimum liquidity requirement as per the Championship Cargill Sale and Leaseback (Note 8) and $50 of restricted deposits pledged as collateral regarding credit cards balances with one of the Company’s financial institutions. Minimum liquidity, not legally restricted, as of December 31, 2022, of $10,700 as per the Company’s credit facilities’ covenants, is included in “Cash and cash equivalents”.

F-21
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
5.
Inventories:

The amounts in the accompanying consolidated balance sheets are analyzed as follows:

 
  
December 31,
2023
    
December 31,
2022
  
Bunkers
    
-
      
392
  
Lubricants
    
1,559
      
1,603
  
Total
    
1,559
      
1,995
 

6.
Vessels, Net:
 
The amounts in the accompanying consolidated balance sheets are analyzed as follows:
 
 
  
December 31,
2023
    
December 31,
2022
  
Cost:
            
Beginning balance
    
511,516
      
488,049
  
- Additions
    
419
      
71,224
  
- Vessel contributed to United Maritime Corporation
     -       (17,948 )
- Transfer to “Assets held for sale”
     -       (29,809 )
Ending balance
    
511,935
      
511,516
  
 
                
Accumulated depreciation:
                
Beginning balance
    
(77,383
)
    
(61,987
)
- Depreciation for the period
    
(24,076
)
    
(23,294
)
- Vessel contributed to United Maritime Corporation
     -       5,046  
- Transfer to “Assets held for sale”
     -       2,852  
Ending balance
    
(101,459
)
    
(77,383
)
 
                
Net book value
    
410,476
      
434,133
  

Vessel contribution

On July 5, 2022, the Company contributed the Predecessor and the Gloriuship to United (Note 3).

Acquisitions

On November 9, 2022, the Company entered into an agreement with an unaffiliated third party for the purchase of a secondhand Capesize vessel, the Paroship, for a gross purchase price of $31,000. The vessel was delivered to the Company on December 27, 2022. The acquisition of the vessel was financed with cash on hand and through the December 2022 Alpha Bank Loan (Note 8).

On May 25, 2022, the Company entered into an agreement with an unaffiliated third party for the purchase of a secondhand Capesize vessel, the Honorship, for a gross purchase price of $34,600. The vessel was delivered to the Company on June 27, 2022. The acquisition of the vessel was financed with cash on hand and through the June 2022 Piraeus Bank Loan Facility (Note 8).

During the years ended December 31, 2023 and 2022, amounts of $419 and $5,624, respectively, of improvements were capitalized that concern improvements on vessels performance and meeting environmental standards mainly due to installation of ballast water treatment systems and other energy saving devices. The cost of these additions was accounted as major improvement and were capitalized over the vessels’ cost and will be depreciated over the remaining useful life of each vessel.  Amounts paid within the year for the additions are included in “Vessels acquisitions and improvements” under “Cash flows from investing activities” in the consolidated statement of cash flows.

F-22
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
As of December 31, 2023, all vessels, except for the Knightship, the Lordship, the Flagship, the Partnership, the Hellasship and the Patriotship that are financed through other financial liabilities (sale and leaseback agreements), are mortgaged to secure loans of the Company (Note 8).

Gain on sale of vessels, net

On December 27, 2022, the Company entered into an agreement with United for the sale of a secondhand Capesize vessel, the Goodship, for a gross purchase price of $17,500. The vessel was delivered to her new owners on February 10, 2023. As of December 31, 2022, the vessel along with the associated inventories were classified in current assets as “Assets held for sale” in the consolidated balance sheet, according to the provisions of ASC 360, as all the criteria for this classification were met. The specific vessel was not impaired as of December 31, 2022, since its carrying amount plus unamortized dry-dock costs as at the balance sheet date was lower than its sale price less cost to sell. As of December 31, 2022, an advance payment of $6,125 was received in cash (Note 3) according to the terms of the agreement, which is separately presented as “Liability from contract with related party” in the consolidated balance sheet. The vessel was delivered to her new owners on February 10, 2023. As of December 31, 2023, a gain on sale of vessel, net of sale expenses, amounting to $4,887 was recognized and is presented as “Gain on sale of vessels, net” in the consolidated statements of income.

On December 27, 2022, the Company entered into an agreement with United for the sale of a secondhand Capesize vessel, the Tradership, for a gross purchase price of $18,750. The vessel was delivered to her new owners on February 28, 2023. As of December 31, 2022, the vessel along with the associated inventories were classified in current assets as “Assets held for sale” in the consolidated balance sheet, according to the provisions of ASC 360, as all the criteria for this classification were met. The specific vessel was not impaired as of December 31, 2022, since its carrying amount plus unamortized dry-dock costs as at the balance sheet date was lower than its sale price less cost to sell. As of December 31, 2022, an advance payment of $6,563 was received in cash (Note 3) according to the terms of the agreement, which is separately presented as “Liability from contract with related party” in the consolidated balance sheet. The vessel was delivered to her new owners on February 28, 2023. As of December 31, 2023, a gain on sale of vessel, net of sale expenses, amounting to $3,207 was recognized and is presented as “Gain on sale of vessels, net” in the consolidated statements of income.

7.
Finance Lease, Right-of-use Assets and Finance Lease Liabilities:

On May 9, 2023, the Company entered into a twelve-month bareboat charter agreement with an unaffiliated third party for a secondhand Newcastlemax vessel, which was renamed Titanship. The Company advanced a down payment of $3,500 which was paid upon signing of the agreement and another down payment of $3,500 upon delivery of the vessel to the Company, which took place on October 24, 2023. The Company will be paying a daily bareboat rate of $9 over the period of the twelve-month bareboat charter. At the end of the bareboat period, the Company has an option to purchase the vessel for $20,210, which  the Company expects to exercise. The Company has classified the above transaction as a finance lease. At the commencement date, the Company recognized a finance lease liability equal to the present value of lease payments during the bareboat charter period using an incremental borrowing rate of 5.4%. The Company recognized a finance lease liability of $22,388 and a corresponding right-of-use asset of $29,998 which also includes $610 of initial direct costs. The amount of the right-of-use-assets is amortized on a straight-line method based on the estimated useful life of the vessel. During the year ended December 31, 2023, the amortization of the right-of-use asset amounted to $436 and is presented in the Company’s consolidated statements of income under “Depreciation and amortization”. Interest expense on the finance lease liability for the same period amounted to $219 (Note 14). As of December 31, 2023, the right-of-use amounted to $29,562 and is presented under “Finance lease, right-of-use asset” in the accompanying consolidated balance sheets. The weighted average remaining lease term for the bareboat charter was 0.81 years as of December 31, 2023.

The annual lease payments under the Titanship bareboat charter agreement are as follows:

Twelve month periods ending December 31,
  
Amount
  
2024
    
22,676
  
Total undiscounted lease payments
    
22,676
  
Less: Discount based on incremental borrowing rate
    
(898
)
Present value of finance lease liabilities
    
21,778
  
 
        
Finance lease liability, current
    
21,778
  
Finance lease liability, non-current
    
-
  
Present value of finance lease liabilities
    
21,778
  

F-23
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
8.
Long-Term Debt and Other Financial Liabilities:
 
The amounts in the accompanying consolidated balance sheets are analyzed as follows:

 
  
December 31,
2023
    
December 31,
2022
  
Long-term debt and other financial liabilities
    
213,711
      
235,603
  
Less: Deferred finance costs and debt discounts
    
(2,921
)
    
(3,727
)
Total
    
210,790
      
231,876
  
Less - current portion
    
(31,780
)
    
(35,051
)
Long-term portion
    
179,010
      
196,825
  
                 
Debt related to assets held for sale
     -       13,100  
Less: Deferred finance costs
     -       (110 )
Total
     -       12,990  
 
                
Total debt net of deferred finance costs and debt discounts
     210,790       244,866  

Senior long-term debt

Loan Facilities amended during the year ended December 31, 2023

October 2022 Danish Ship Finance Loan Facility

On October 10, 2022, the Company entered into a facility agreement with Danish Shipping Finance A/S for a $28,000 term loan for the purpose of refinancing the existing UniCredit Bank Loan Facility, which was secured by the Premiership and the Fellowship. The October 2022 Danish Ship Finance Loan Facility was divided in two equal tranches, bears interest of SOFR plus a margin of 2.50% and has a term of five years. The repayment schedule of each tranche comprises six quarterly installments of $780 followed by fourteen quarterly installments of $518 and a final balloon of $2,100 payable together with the twentieth installment. Each borrower is required to maintain minimum liquidity of $650 in its retention account.

On April 18, 2023, the Company amended and restated the loan facility with Danish Ship Finance entered in October 2022 to refinance the Championship Cargill Sale and Leaseback. The amended and restated facility includes a new tranche (Tranche C) of $15,750 secured by the Championship, while a sustainability adjustment mechanism was introduced in respect of the underlying interest rate of the facility. The new tranche has a five-year term and the repayment schedule comprises eight quarterly installments of $725 followed by twelve quarterly installments of $585 and a final balloon of $2,930 payable together with the final installment. The interest rate is 2.65% over 3-month term SOFR per annum, which can be increased or decreased by 0.05% based on certain emission reduction thresholds. For the new tranche secured by the Championship, the borrower is required to maintain a minimum liquidity amount of $700, while each of the borrowers under the Premiership and Fellowship tranches are still required to maintain minimum liquidity of $650 in their respective retention accounts. In addition, the Company is required to maintain a security cover ratio (as defined therein) of not less than 133%, at any time when the corporate leverage ratio (as defined therein) is equal to or less than 65%. If the corporate leverage ratio is higher than 65%, the Company is required to maintain a security cover (as defined therein) of not less than 143%. As of December 31, 2023, the amount outstanding under the facility was $36,060.

June 2022 Piraeus Bank Loan Facility

On June 22, 2022, the Company entered into a facility agreement with Piraeus Bank S.A. for a $38,000 sustainability-linked loan for the purpose of (i) refinancing the pre-existing November 2021 Piraeus Bank Loan Facility, which was secured by the Worldship and (ii) partly financing the acquisition cost of the Honorship. On July 3, 2023, the Company entered into an overriding agreement to replace the LIBOR with term SOFR as reference rate which is effective as of July 27, 2023. The loan bears interest of SOFR plus a margin of 3.00% and a credit adjustment spread (as defined therein). The margin is subject to a sustainability pricing adjustment whereby it may be decreased by up to 0.10% upon meeting certain emission reduction targets during the term of the facility. The term is five years and the repayment schedule comprises four quarterly installments of $2,000, followed by two quarterly installments of $1,500, followed by fourteen quarterly installments of $750 and a final balloon of $16,500 payable together with the final installment. As per the supplemental agreement entered into on July 3, 2023, the leverage ratio (as defined in the facility agreement) required by the Company was reduced from 85% to 70% effective from June 30, 2023 until the maturity of the loan. In addition, the Company is required to maintain a security cover ratio (as defined therein) of not less than 125% until December 24, 2023 and 130% thereafter until the maturity of the loan. The June 2022 Piraeus Bank Loan Facility was assessed based on provisions of ASC 470-50 and was treated as debt modification. As of December 31, 2023, the amount outstanding under the facility was $27,000.

F-24
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
August 2021 Alpha Bank Loan Facility

On August 9, 2021, the Company entered into a facility agreement with Alpha Bank S.A. for a $44,120 term loan for the purpose of (i) refinancing a pre-existing Alpha Bank loan facility which was secured by the Leadership, the Squireship and the Lordship and (ii) financing the previously unencumbered Friendship. Originally, the loan was divided into two tranches as follows: Tranche A, corresponding to the Squireship and the Lordship and Tranche B, corresponding to the Friendship. The facility agreement was assessed based on provisions of ASC 470-50 and was treated as debt modification of the pre-existing Alpha Bank loan facility. On April 28, 2023, the Company prepaid $8,506 of Tranche A and $3,470 of Tranche B using the proceeds from the Village Seven Sale and Leaseback (described below) and as a result all the securities regarding the Lordship were irrevocably and unconditionally released. Following the prepayment of the Lordship, the amortization schedule of the remaining tranches was amended whereby Tranche A is repayable through seven quarterly installments of $601 each and a final balloon of $10,284 payable together with the final installment and Tranche B is repayable through eight quarterly installments of $258 each and a final balloon of $3,918 payable together with the final installment. The repayment of installments for both tranches commenced in November 2023. The borrower owning the Squireship is required to maintain an average quarterly minimum free liquidity of $500, whereas the borrower owning the Friendship is required to maintain $500 at all times. In addition, the borrowers shall ensure that the market value of the vessels plus any additional security shall not be less than 125% of the aggregate outstanding loan amount. On June 30, 2022, the Company entered into a supplemental agreement to the facility pursuant to which, the August 2021 Alpha Bank Loan Facility was cross collateralized with the June 2022 Alpha Bank Loan Facility discussed below. Furthermore, on November 10, 2023, the Company entered into the second supplemental agreement pursuant to which, inter alia, the LIBOR was replaced with term SOFR as reference rate with retrospective effect from May 23, 2023. Following such transition, Tranche A bears interest at term SOFR plus a margin of 3.55% and Tranche B bears interest at term SOFR plus a margin of 3.30%. The August 2021 Alpha Bank Loan Facility is cross collateralized with the June 2022 Alpha Bank Loan Facility discussed below. As of December 31, 2023, the amount outstanding under the facility was $19,615.

Sinopac Loan Facility

On December 20, 2021, the Company entered into a $15,000 loan facility with Sinopac Capital International (HK) Limited to refinance the Tranche B of the July 2020 Entrust Facility secured by, inter alia, the Geniuship. On August 25, 2023 the Company entered into an overriding agreement to replace the LIBOR with term SOFR as reference rate which is effective as of September 12, 2023. The interest rate is Term SOFR plus a margin of 3.5%. The principal will be repaid over a five-year term, through four quarterly installments of $530 followed by 16 quarterly installments of $385 and a final balloon payment of $6,720 payable together with the last installment. The borrower is required to ensure that the market value of the vessel plus any additional security shall be not less than 130% of the aggregate outstanding loan amount. As of December 31, 2023, the amount outstanding under the facility was $11,340.

Pre – Existing Loan Facilities

June 2022 Alpha Bank Loan Facility

On June 21, 2022, the Company entered into a facility agreement with Alpha Bank S.A. for a $21,000 term loan secured by the Dukeship. The loan bears interest of SOFR plus a margin of 2.95% and the term is four years. The repayment schedule comprises four quarterly installments of $1,000 followed by twelve quarterly installments of $500 and a final balloon of $11,000 payable together with the sixteenth installment. In addition, the Company is required to maintain a security requirement ratio (as defined therein) not less than 125%. The borrower is required to maintain minimum liquidity of $500 in its operating account. The June 2022 Alpha Bank Loan Facility is cross collateralized with the August 2021 Alpha Bank Loan Facility. As of December 31, 2023, the amount outstanding under the facility was $16,000.

December 2022 Alpha Bank Loan Facility

On December 15, 2022, the Company entered into a facility agreement with Alpha Bank S.A. for a $16,500 term loan for the purpose of partly financing the acquisition cost of the Paroship. The interest rate of the facility is equal to term SOFR plus a margin of 2.90% and the term is four years. The repayment schedule comprises four quarterly installments of $525 followed by twelve quarterly installments of $400 and a final balloon of $9,600 payable together with the sixteenth installment. In addition, the Company is required to maintain a security requirement (as defined therein) of not less than 125%. The borrower is required to maintain minimum liquidity of $500 in its operating account. As of December 31, 2023, the amount outstanding under the facility was $14,400.

As of December 31, 2023, each of the facilities mentioned above was secured by a first priority mortgage over the respective vessel, general assignments covering the respective vessel’s earnings, charter parties, insurances and requisition compensation, account pledge agreements covering the vessel’s earnings accounts (excluding the Sinopac Loan Facility), technical and commercial managers’ undertakings, pledge agreements covering the shares of the applicable vessel-owning subsidiaries and a corporate guarantee by the Company. In addition, certain of these loan facilities were secured by specific charterparty assignments, for charterparties exceeding 12 or 13 months in duration and hedging assignment agreements.

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Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
Loan Facilities repaid during the years ended December 31, 2023 and 2022

November 2021 Piraeus Bank Loan Facility

On November 12, 2021, the Company entered into a $16,850 sustainability-linked loan facility with Piraeus Bank S.A. to finance part of the acquisition cost of the Worldship. The interest rate was LIBOR plus a margin of 3.05%, which could be decreased to 2.95% based on certain emission reduction thresholds (as described therein). The principal was scheduled to be repaid over a five-year term, through four installments of $1,000, followed by two installments of $750, followed by 14 installments of $375, followed by a balloon of $6,100 payable together with the last installment. On June 22, 2022, the Company refinanced the facility using the proceeds from the June 2022 Piraeus Bank Loan Facility.

UniCredit Bank Loan Facility

On September 11, 2015, the Company entered into a facility agreement with UniCredit Bank AG, for a secured loan facility of $52,705 to partially finance the acquisition of the Premiership, Gladiatorship and Guardianship. On November 22, 2018 following the sale of the Gladiatorship and Guardianship, the Company entered into an amendment and restatement of the facility in order to (i) release the respective vessel-owning subsidiaries of the Gladiatorship and the Guardianship as borrowers and (ii) include as replacement borrower the vessel-owning subsidiary of the Fellowship. On July 3, 2019, the Company entered into a supplemental agreement pursuant to which: (i) $2,208 of installments originally falling due within 2019 were deferred to the balloon installment on December 28, 2020, (ii) the applicable margin was increased from 3.20% to 4.20% with effect from March 26, 2019 until December 27, 2019 inclusive and reinstated to the original levels subsequently and (iii) the requirement for each borrower to hold minimum liquidity of $500 cash was cancelled. On February 8, 2021, the Company entered into a supplemental agreement to the facility pursuant to which: (i) the quarterly installments were reduced from $1,550 to $1,200, effective as of the December 2020 installment, (ii) the applicable margin was increased from 3.2% to 3.5% with effect as of December 29, 2020 until the maturity of the facility, (iii) the maturity of the loan was extended to December 29, 2022 from December 29, 2020 initially, and (iv) several of its financial covenants were waived with retrospective effect from June 2020 onwards. On October 13, 2022, the facility was refinanced in full by the October 2022 Danish Ship Finance Loan Facility.

February 2019 ATB Loan Facility

On February 13, 2019, the Company entered into a new loan facility with ATB, or the February 2019 ATB Loan Facility, in order to (i) refinance the existing indebtedness over the Partnership under the May 2017 ATB Loan Facility and (ii) finance of installation of open loop scrubber systems on the Squireship and Premiership. The interest rate of the facility was equal to LIBOR plus a margin of 4.65%. The February 2019 ATB Loan Facility was divided in Tranche A, relating to the refinancing of the Partnership, and Tranches B and C for the financing of the scrubber systems on the Squireship and the Premiership, respectively. Pursuant to the terms of the facility, Tranche A was repayable in sixteen equal quarterly installments of $200 and a balloon payment of $13,190 payable on November 27, 2022 and each of Tranche B and C was repayable in twelve quarterly installments of $189.8 until August 26, 2022. On February 12, 2021, the Company entered into a supplemental agreement to the facility to amend several of its financial covenants. On December 9, 2021, the Company entered into a supplemental letter to the facility pursuant to which: the lender (i) provided its consent for the prepayment of the Third JDH Note secured by the Partnership which was subject to an intercreditor agreement entered into between the Company, ATB and the holder of the convertible note, (ii) waived a breach of the borrower concerning the repayment of certain subordinated liabilities (as defined therein) in the amount of $1,080 and (iii) waived the borrower’s obligation to make an additional repayment (as defined therein) in the amount of $1,080. An amendment fee of $50 was paid in respect of the supplemental letter. On February 28, 2022, the outstanding balance of $15,129 was repaid in full with cash on hand and subsequently refinanced by the Chugoku Bank Sale and Leaseback.

July 2020 Entrust Facility

On July 15, 2020, the Company entered into a secured loan facility of $22,500 with Lucid Agency Services Limited and Lucid Trustee Services Limited, as facility agent and security agent, respectively, and certain nominees of EnTrust Global as lenders, the proceeds of which were used for the refinancing of a loan facility with Hamburg Commercial Bank AG secured by the Gloriuship and the Geniuship. The interest rate of the facility was equal to a fixed rate of 10.50%. The Company drew down the $22,500 on July 16, 2020. In addition, the July 2020 Entrust Facility was cross collateralized with a pre-existing facility with Entrust. The cross-collateral security structure was released following the full prepayment of the pre-existing facility that was subsequently financed by a loan facility with Alpha Bank repaid in 2021. On December 20, 2021, the Company repaid the balance of $14,618 related to Tranche B secured by the Geniuship. On the date of repayment, $438 of unamortized debt discounts were written off according to the debt extinguishment guidance of ASC 470-50 “Debt Modifications and Extinguishments”. The outstanding balance of the loan, amounting to $4,950, was transferred to United following completion of the Spin-Off.

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Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
ABB Loan Facility

On April 22, 2021, the Company entered into a facility agreement with Aegean Baltic Bank S.A. for a $15,500 term loan for the financing of the Goodship and the Tradership. The loan was divided into two tranches: (i) Tranche A of $7,500 for the Goodship, drawn down on April 26, 2021, and (ii) Tranche B of $8,000 for the Tradership, drawn down on June 14, 2021. The loan bore interest of LIBOR plus a margin of 4%. Tranche A was repayable in 18 quarterly installments of $200 each, with the last installment, together with a balloon installment of $3,900, payable in October 2025. Tranche B was repayable in 18 quarterly installments of $200 each, with the last installment being payable together with a balloon installment of $4,400. On February 9, 2023, in connection with the disposal of the Goodship, the Company fully prepaid the outstanding loan amount of Tranche A of $6,100 under the facility. On February 24, 2023, in connection with the disposal of the Tradership, the Company fully prepaid the remaining outstanding loan amount of Tranche B of $6,800. Following the full prepayment of the ABB Loan Facility, all securities created in favor of ABB were irrevocably and unconditionally released.

Other Financial Liabilities - Sale and Leaseback Transactions

New Sale and Leaseback Activities during the year ended December 31, 2023

Evahline Sale and Leaseback

On March 29, 2023, we entered into a $19,000 sale and leaseback agreement with a subsidiary of Evahline Inc. (“Evahline”) for the refinancing of the Hanchen Sale and Leaseback. The agreement became effective on April 6, 2023, upon the delivery of the Knightship to the lessor. Under ASC 842-40, the transaction was accounted for as a financial liability, as control remains with the Company and the Knightship will continue to be recorded as an asset on the Company’s balance sheet.  The Company sold and chartered back the vessel from Evahline on a bareboat basis for a six-year period. The applicable interest rate is 3-month term SOFR plus 2.80% per annum. Following the second anniversary of the bareboat charter, the Company has continuous options to repurchase the vessel at predetermined prices as set forth in the agreement. At the end of the six-year bareboat period, the ownership of the vessel will be transferred to the Company at no additional cost.  The Company is required to maintain a minimum value (as defined therein) of at least 120% of the charterhire principal. The charterhire principal amortizes in seventy-two consecutive monthly installments paid in advance averaging at $264. The charterhire principal as of December 31, 2023 was $16,625.

Village Seven Sale and Leaseback

On April 24, 2023, we entered into a $19,000 sale and leaseback agreement for the Lordship with Village Seven Co., Ltd and V7 Fune Inc. (collectively, “Village Seven”) to partially refinance the August 2021 Alpha Bank Loan Facility. Under ASC 842-40, the transaction was accounted for as a financial liability, as control remains with the Company and the Lordship will continue to be recorded as an asset on the Company’s balance sheet.  The Company sold and chartered back the vessel from Village Seven on a bareboat basis for a period of four years and five months. The applicable interest rate is 3-month term SOFR plus 3.00% per annum. Following the second anniversary of the bareboat charter, the Company has continuous options to repurchase the vessel at predetermined prices as set forth in the agreement. At the end of the bareboat period, the Company has the option to repurchase the vessel at $7,811, which the Company expects to exercise. The sale and leaseback agreement does not include any financial covenants or security value maintenance provisions. The charterhire principal amortizes in fifty-three consecutive monthly installments paid in advance averaging at $211. The charterhire principal as of December 31, 2023 was $17,091.

Sale and Leaseback Activities amended during the year ended December 31, 2023

CMB Financial Leasing Co., Ltd. (“CMBFL”) Sale and Leaseback

On June 22, 2021, the Company entered into sale and leaseback agreements for the Hellasship and the Patriotship in the total amount of a $30,900 with CMBFL for the purpose of financing the outstanding acquisition price of both vessels. The Company sold and chartered back the vessels from two affiliates of CMBFL on a bareboat basis for a five-year period. On September 25, 2023, the Company entered into an amendment and restatement pursuant to which, inter alia, the LIBOR was replaced with term SOFR as reference rate, with retrospective effect from June 28, 2023. Following such transaction, the financings bear interest at term SOFR plus a margin of 3.5%. The Company is required to maintain a corporate leverage ratio (as defined therein) that will not be higher than 85% until the maturity. Additionally, each bareboat Charterer is required to maintain minimum liquidity of $550 in its earnings account. The bareboat charterers are also required to maintain a value maintenance ratio of at least 120% of the charterhire principal. The Company has the option to buy back the vessels between the end of the second year until the end of the fifth year at predetermined prices as defined in the agreement. Under ASC 842-40, the transaction was accounted for as a financial liability, as control remains with the Company and the two vessels will continue to be recorded as an asset on the Company’s balance sheet. The charterhire principal amortizes in twenty quarterly installments of $780 each along with a balloon payment of $15,300 at maturity. The charterhire principal as of December 31, 2023, was $23,100.

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Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
Existing Sale and Leaseback Agreements

Chugoku Bank Sale and Leaseback

On February 25, 2022, the Company entered into a sale and leaseback transaction with Chugoku Bank, Ltd. to refinance the Partnership which was previously financed by the February 2019 ATB Loan Facility and the Second JDH Loan secured through first and second priority mortgages respectively. The drawdown of the funds under the sale and leaseback agreement occurred on March 9, 2022. Under ASC 842-40, the transaction was accounted for as a financial liability, as control remains with the Company and the Partnership will continue to be recorded as an asset on the Company’s balance sheet. The financing amount is $21,300 and the interest rate is 2.9% plus SOFR per annum. The principal will be repaid over an eight-year term, through 32 quarterly installments averaging at approximately $590, followed by a purchase option of $2,388 at the expiration of the bareboat, which the Company expects to exercise. Following the second anniversary of the bareboat charter, the Company has continuous options to repurchase the vessel at predetermined prices as set forth in the agreement. The charterhire principal as of December 31, 2023 was $17,259.

Flagship Cargill Sale and Leaseback

On May 11, 2021, the Company entered into a $20,500 sale and leaseback agreement with Cargill for the purpose of financing part of the acquisition cost of the Flagship. The Company sold and chartered back the vessel from Cargill on a bareboat basis for a five-year period, having a purchase obligation at the end of the fifth year. Under ASC 842-40, the transaction was accounted for as a financial liability, as control remains with the Company and the Flagship will continue to be recorded as an asset on the Company’s consolidated balance sheet. The implied average applicable interest rate is equivalent to 2% per annum. The sale and leaseback agreement does not include any financial covenants or security value maintenance provisions. The Company has continuous options to buy back the vessel during the whole five-year sale and leaseback period at predetermined prices as set forth in the agreement and at the end of such period it has a purchase obligation at $10,000. Additionally, at the time of repurchase, if the market value of the vessel is greater than certain threshold prices, as set forth in the agreement, the Company will pay to Cargill 15% of the difference between the market price and such threshold prices (the “Asset Upside Amount”). The Company recognized a participation liability of $353 as of December 31, 2023 and is included under Other liabilities – non-current in the consolidated balance sheets. No participation liability was recognized as of December 31, 2022, as the estimated market value did not exceed the threshold prices. The charterhire principal amortizes in sixty monthly installments averaging approximately $175 each along with a balloon payment of $10,000, at maturity on May 10, 2026. The charterhire principal as of December 31, 2023, was $15,221.

Sale and Leasebacks Agreements repaid during the year ended December 31, 2023

Hanchen Sale and Leaseback

On June 28, 2018, the Company entered into a $26,500 sale and leaseback agreement for the Knightship with Hanchen Limited (“Hanchen”), an affiliate of AVIC International Leasing Co., Ltd.. The Company’s wholly-owned subsidiary, Knight Ocean Navigation Co. (“Knight” or the “Charterer”) sold and chartered back the vessel on a bareboat basis for an eight year period, having a purchase obligation at the end of the eighth year. The charterhire principal bore interest at LIBOR plus a margin of 4%.  Under ASC 842-40, the transaction was accounted for as a financial liability.  Of the $26,500, $18,550 were cash proceeds, $6,625 was withheld by Hanchen as an upfront charterhire upon the delivery of the vessel, and an amount of $1,325, or Charterer’s Deposit, which was given as a deposit by Knight to Hanchen upon the delivery of the vessel in order to secure the due observance and performance by Knight of its obligations and undertakings as per the sale and leaseback agreement. The Charterer’s Deposit could be set off against the balloon payment at maturity. The Company had continuous options to buy back the Knightship at any time following the second anniversary of the bareboat charter and a purchase obligation of $5,299 at the end of the leaseback period. The charterhire principal was repayable in thirty-two consecutive equal quarterly installments of approximately $456 along with a balloon payment of $5,299 payable together with the final installment. On April 6, 2023, the facility was refinanced by the Evahline Sale and Leaseback and the outstanding charterhire principal of $11,221 was repaid in full.

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Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
Championship Cargill Sale and Leaseback 

On November 7, 2018, the Company entered into a $23,500 sale and leaseback agreement for the Championship with Cargill International SA (“Cargill”) for the purpose of refinancing the outstanding indebtedness of the Championship under a previous loan facility. The Company sold and chartered back the vessel from Cargill on a bareboat basis for a five-year period, having a purchase obligation at the end of the fifth year. The implied average applicable interest rate was equivalent to 4.71% per annum. Under ASC 842-40, the transaction was accounted for as a financial liability. The Company was required to maintain an amount of $1,600 as a security deposit which was set-off against the vessel repurchase price. Moreover, under the subject sale and leaseback agreement, an additional tranche was provided to the Company for an amount of up to $2,750 for the purpose of financing the cost associated with the acquisition and installation on board the Championship of an open loop scrubber system which was fully drawn. The sale and leaseback agreement did not include any financial covenants or security value maintenance provisions. Moreover, as part of the transaction, the Company issued 750 of its common shares to Cargill which were subject to customary statutory registration requirements. The fair market value of the shares on the date issued to Cargill was $1,541 and amortized over the lease term using the effective interest method.  The unamortized balance was accounted for as a deferred finance cost and is classified in other financial liabilities on the consolidated balance sheets. The Company had continuous options to buy back the vessel during the whole five-year sale and leaseback period at predetermined prices as set forth in the agreement and at the end of which period it had a purchase obligation at $14,051. Additionally, at the time of repurchase, if the market value of the vessel was greater than certain threshold prices, as set forth in the agreement, the Company would pay to Cargill 20% of the difference between the market price and such threshold prices (the “Profit Share Amount”). Additionally, upon the repurchase of the vessel, the Company was obliged to pay an amount for the remaining period of the initial charterhire based on the Baltic Capesize Index FFA curve and a discount rate on the BCI as per the sale and leaseback agreement (the “Washout Amount”). The charterhire principal was repayable in sixty monthly installments averaging approximately $167 each along with a balloon payment of $14,051, including the additional scrubber tranche, at maturity. On November 15, 2022, the Company exercised its option to purchase the Championship. On April 24, 2023, the Company paid (i) an amount of $793, accounting for the Profit Share Amount,  (ii) an amount of $113 for the Washout Amount and (iii) the purchase option price of $15,678 by using the proceeds from the  October 2022 Danish Ship Finance Loan Facility. 

All of the Company’s secured facilities (i.e., long-term debt and other financial liabilities) bear floating interest at SOFR plus a margin or fixed interest.

Certain of the Company’s long-term debt and other financial liabilities contain financial covenants and undertakings requiring the Company to maintain various financial ratios, including:

•
a minimum borrower’s liquidity;
•
a minimum guarantor’s liquidity;
•
a security coverage requirement; and
•
a leverage ratio.

As of December 31, 2023, the Company was in compliance with all covenants relating to its loan facilities as at that date.

As of December 31, 2023, ten of the Company’s owned vessels, having a net carrying value of $270,022, were subject to first and second priority mortgages as collaterals to their long-term debt facilities. In addition, the Company’s six bareboat chartered vessels, having a net carrying value of $140,454 as of December 31, 2023, have been financed through sale and leaseback agreements. As is in typical leaseback agreements, the title of ownership is held by the relevant lenders.

Subordinated long-term debt

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Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
Second JDH Loan (originally entered into in May 2017)
 
In February 2021, the Company prepaid $100 of the outstanding balance of the Second Jelco Delta Holding Corp., or JDH, Loan, using proceeds from (i) Class E warrants exercises during 2021 (Note 12) and (ii) its February 2021 registered direct offering (Note 12). On April 26, 2021, JDH exercised its option to purchase 428,571 additional Units (with each unit consisting of one common share of the Company, or, at JDH’s option, one pre-funded warrant in lieu of such common share, and ten warrant to purchase one common share at an exercise price of $7.0 per share) at a price of $7.0 per Unit in exchange for the settlement of principal under the Second JDH Loan in an amount of $3,000 (i.e., an amount equal to the aggregate purchase price of the units). The issuance of units to JDH and associated reduction in debt balance took place on May 6, 2021. On the same date, the Company fully amortized the unamortized balance of $424 of the fair value of the option to purchase the 428,571 Units, in accordance with its original conversion terms and recognized such amount in “Interest and Finance costs”.

On February 28, 2022, the Company voluntarily prepaid the remaining balance of $1,850 of the Second JDH Loan using cash on hand. All obligations under the Second JDH Loan were irrevocably and unconditionally discharged pursuant to the deed of release dated February 28, 2022.

The annual principal payments required to be made after December 31, 2023 for all long-term debt and other financial liabilities, are as follows:

Twelve-month periods ending December 31,
  
Amount
  
2024
    
32,955
  
2025
    
44,433
  
2026
    
76,786
  
2027
    
43,657
  
Thereafter
    
15,880
  
Total
    
213,711
  

9.
Convertible Notes:


The amounts in the accompanying consolidated balance sheets are analyzed as follows:

 
  
December 31,
2023
    
December 31,
2022
  
Convertible notes
    
-
      
11,165
  
Less: Deferred finance costs
    
-
      
(9
)
Less: Change in fair value of conversion option
    
-
      
(323
)
Total
    
-
      
10,833
  
Less – current portion
    
-
      
(10,833
)
Long-term portion
    
-
      
-
  

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Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
September 7, 2015 - $21,165 Revolving Convertible Note (Second JDH Note)

On January 26, 2022, the Company voluntarily prepaid $5,000 of the outstanding balance of the Second JDH Note using cash on hand (Note 8). In connection with this prepayment the Company’s cash sweep obligations for 2022 under the then outstanding JDH loans and JDH convertible notes were waived pursuant to a waiver letter signed on January 19, 2022. On March 10, 2022, the Company voluntarily prepaid another $5,000 of the outstanding balance of the Second JDH Note using cash on hand (Note 8). As of December 31, 2022, $11,165 was outstanding under the Second JDH Note.

Upon adoption of ASU No. 2020-06 on January 1, 2022, the Second JDH Note increased by $10,949, representing the net impact of two adjustments: (1) the $21,165 value of beneficial conversion feature (“BCF”), previously classified in additional paid-in-capital in stockholders’ equity, and (2) a $10,216 decrease to accumulated deficit for the cumulative effect of adoption related to the recorded amortization expense of BCF (Note 2).
 
The Company could, by giving five business days prior written notice to JDH at any time, had prepaid the whole or any part of the Second JDH Note in cash or, subject to JDH’s prior written agreement on the price per share, in a number of fully paid and nonassessable shares of the Company equal to the amount of the note(s) being prepaid divided by the agreed price per share. At JDH’s option, the Company’s obligation to repay the principal amount under the Second JDH Note or any part thereof could have been paid in common shares at a conversion price of $12.00 per share. JDH had also received customary registration rights with respect to any shares to have been received upon conversion of the Second JDH Note.

On January 3, 2023, the Company paid $8,000 of the outstanding balance of the Second JDH Note. The total remaining outstanding balance of $3,165 was fully repaid on December 29, 2023. As of December 31, 2023, there was no outstanding balance under the Second JDH Note.

10.
Financial Instruments:
 
The guidance for fair value measurements applies to all assets and liabilities that are being measured and reported on a fair value basis. This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The same guidance requires that assets and liabilities carried at fair value should be classified and disclosed in one of the following three categories based on the inputs used to determine its fair value:


 •
Level 1: Quoted market prices in active markets for identical assets or liabilities;

•
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data;

•
Level 3: Unobservable inputs that are not corroborated by market data.


(a)
Significant Risks and Uncertainties, including Business and Credit Concentration

The Company places its temporary cash investments, consisting mostly of deposits, primarily with high credit qualified financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions that are considered in the Company’s investment strategy. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers’ financial condition and generally does not require collateral for its accounts receivable and does not have any agreements to mitigate credit risk.

(b)
Fair Value of Financial Instruments

The fair values of the financial instruments shown in the consolidated balance sheets as of December 31, 2023 and 2022, represent management’s best estimate of the amounts that would be received to sell those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants at that date.

Those fair value measurements maximize the use of observable inputs. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company’s own judgments about the assumptions that market participants would use in pricing the asset or liability. Those judgments are developed by the Company based on the best information available in the circumstances.

F-31
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

a.
Cash and cash equivalents, restricted cash, accounts receivable trade, other current assets and trade accounts and other payables: the carrying amounts approximate fair value because of the short maturity of these instruments. Cash and cash equivalents and restricted cash, current are considered Level 1 items as they represent liquid assets with short-term maturities. The carrying value approximates the fair market value for interest bearing cash classified as restricted cash, non-current and are considered Level 1 item of the fair value hierarchy.
b.
Long-term debt and other financial liabilities: The carrying value of long-term debt and other financial liabilities with variable interest rates approximates the fair market value as the long-term debt and other financial liabilities bear interest at floating interest rate. The fair value of fixed interest long-term debt is estimated using prevailing market rates as of the period end. The Company believes the terms of its fixed interest long-term debt are similar to those that could be procured as of December 31, 2023, and the carrying value of $15,221 is 4% higher than the fair market value of $14,613. The fair value of the fixed interest long-term debt has been obtained through Level 2 inputs of the fair value hierarchy.

11.
Commitments and Contingencies:

Contingencies

Various claims, lawsuits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Company’s vessels. On March 6, 2024, Sphinx Investment Corp., a purported shareholder of the Company, submitted a complaint in the High Court of the Republic of the Marshall Islands naming the Company and the members of its board of directors as defendants. The complaint alleges, among other things, violations of fiduciary duties in connection with the issuance of the Series B Preferred Shares in December 2021. The Company believes it has substantial defenses and intends to vigorously defend against the lawsuit. As of December 31, 2023, management is not aware of any material claims or contingent liabilities, which have not been disclosed, or for which a provision has not been established in the accompanying consolidated financial statements.
 
The Company accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure. Currently, management is not aware of any such claims or contingent liabilities that should be disclosed, or for which a provision should be established in the accompanying consolidated financial statements. The Company is covered for liabilities associated with the individual vessels’ actions to the maximum limits as provided by Protection and Indemnity (P&I) Clubs, members of the International Group of P&I Clubs.

Commitments

The Company operates certain of its vessels under lease agreements. Time charters typically may provide for charterers’ options to extend the lease terms and termination clauses. The Company’s time charters range from 9 to 62 months and extension periods vary from 2 to 27 months. In addition, the time charters contain termination clauses which protect either the Company or the charterers from material adverse events. Variable lease payments in the Company’s time charters vary based on changes in the freight market index. The Company has the option to convert some of these variable lease payments to fixed based on the prevailing Capesize forward freight agreement rates.

The following table sets forth the Company’s future minimum contractual charter revenue based on vessels committed to non-cancelable time charter contracts as at December 31, 2023. For index-linked time charter contracts the calculation was made using the initial charter rates (these amounts do not include any assumed off-hire).

Twelve-month periods ending December 31,
  
Amount
  
2024
    
113,058
  
2025
    
29,954
  
2026     5,321
  
Total
    
148,333
  

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Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
Lease payments – office space

In April 2018, the Company moved into its new office spaces under a five-year lease term, with a Company’s option to extend the lease term for another five-year term. On September 16, 2020, the lease term was amended and set for ten years (i.e., April 2028), with a Company’s option to extend the lease term for two consecutive five-year terms thereafter. The monthly rent was set at Euro 12,747 and after the prepayment of Euro 250,000, on September 22, 2020 resulted in a reduced monthly rent of Euro 10,000 or ($11.1 based on the Euro/U.S. dollar exchange rate of €1.0000: $1.105 as of December 31, 2023). Under ASC 842, the lease is classified as an operating lease and an “operating lease liability” and an “operating lease, right-of-use asset” based on the present value of future minimum lease payments have been recognized on the balance sheet. The monthly rent expense is recorded in general and administration expenses. The rent expense for the years ended December 31, 2023, 2022 and 2021 was $166, $161 and $179, respectively.

The weighted average discount rate that was used for the recognition of these leases, which was the Company’s incremental borrowing rate at lease commencement, is approximately 6.24%. The following table sets forth the Company’s undiscounted office rental obligations as at December 31, 2023:

Twelve-month periods ending December 31,
 
Amount
 
2024
 
 
133
 
2025
 
 
133
 
2026
 
 
133
 
2027
 
 
133
 
Thereafter
 
 
32
 
Total
 
 
564
 
Less: discount based on incremental borrowing rate
 
 
(159
)
Present value of operating lease liability
 
 
405
 
 
 
 
 
 
Operating lease liability, current
 
 
105
 
Operating lease liability, non-current
 
 
300
 
Present value of operating lease liability
 
 
405
 

12.
Capital Structure:

(a)
Preferred Stock
 
The Company is authorized to issue up to 25,000,000 registered shares of preferred stock with a par value of $0.0001. The board of directors of the Company is expressly granted the authority to issue preferred shares and to establish such series of preferred shares with such designations, preferences and relative participating, rights, qualifications, limitations or restrictions as it determines. As at December 31, 2023 and 2022, the Company had 20,000 series B preferred shares issued and outstanding with par value $0.0001 per share. The series B preferred shares were issued on December 10, 2021, to the Company’s Chief Executive Officer, considered a related party, for a total cash consideration of $250. The issuance of the Series B preferred shares was approved by a special independent committee of the board of directors of the Company which obtained a fairness opinion from an independent financial advisor regarding the value of the preferred shares. Each series B preferred shares entitle the holder to 25,000 votes per share on all matters submitted to a vote of the shareholders of the Company, provided however, that no holder of series B preferred shares may exercise voting rights pursuant to series B preferred shares that would result in the aggregate voting power of any beneficial owner of such shares and its affiliates to exceed 49.99% of the total number of votes eligible to be cast on any matter submitted to a vote of shareholders of the Company. The holder of series B preferred shares shall have no special voting or consent rights and shall vote together as one class with the holders of the common shares on all matters put before the shareholders. The series B preferred shares are not convertible into common shares or any other security, are not redeemable, are not transferable and have no dividend rights. Upon any liquidation, dissolution or winding up of the Company, the series B preferred shares will rank pari-passu with the common shareholders and shall be entitled to receive a payment equal to the par value of $0.0001 per share. The Series B preferred holder has no other rights to distributions upon any liquidation, dissolution or winding up of the Company.

F-33
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
(b)
Common Stock
 
i)
NASDAQ Notifications – Effect of reverse stock split

On August 1, 2022, the Company received written notification from The Nasdaq Stock Market (“Nasdaq”), indicating that because the closing bid price of the Company’s common stock for 30 consecutive business days, from June 16, 2022, to July 29, 2022, was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq Capital Market, the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2). Pursuant to the Nasdaq Listing Rule 5810(c)(3)(A), the applicable grace period to regain compliance was 180 days, or until January 30, 2023. The Company could cure this deficiency if the closing bid price of its common stock was $1.00 per share or higher for at least ten consecutive business days during the grace period. On January 31, 2023, the Company received written notification from NASDAQ, indicating that the Company was granted an additional 180-day grace period, until July 31, 2023, to cure its non-compliance with Nasdaq Listing Rule 5550(a)(2). At the opening of trading on February 16, 2023, following the approval from the Company’s Board of Directors on February 9, 2023, the Company effected a one-for-ten reverse stock split of the Company’s common stock. On March 3, 2023, the Company received written notification from Nasdaq that the Company regained compliance with Nasdaq Listing Rule 5550(a)(2) concerning the minimum bid price of the Company’s common stock (Note 1).



On January 26, 2022, the Company received written notification from Nasdaq, indicating that because the closing bid price of the Company’s common stock for 30 consecutive business days, from December 13, 2021 to January 25, 2022, was below the minimum, $1.00 per share bid price requirement for continued listing on the Nasdaq Capital Market, the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2). On February 14, 2022, the Company received written notification from Nasdaq that the Company regained compliance with Nasdaq Listing Rule 5550(a)(2) concerning the minimum bid price of the Company’s common stock. The compliance was regained organically, as the closing bid price of the Company’s common stock had been at $1.00 per share or greater for at least 10 consecutive business days.


On February 11, 2021, the Company received written notification from Nasdaq that the Company regained compliance with Nasdaq Listing Rule 5550(a)(2) concerning the minimum bid price of the Company’s common stock, following the minimum bid price requirement originally communicated to the Company on September 30, 2020. The compliance was regained organically, as the closing bid price of the Company’s common stock had been at $1.00 per share or greater for at least 10 consecutive business days.
 
ii)
Dividends


On November 14, 2023, the Company announced a regular quarterly dividend of $0.025 per share for the third quarter of 2023 which was paid on January 10, 2024 to all shareholders of record as of December 22, 2023 (Note 17). The dividend declared on November 13, 2023 amounting to $491 is included in “Other current liabilities” as of December 31, 2023 in the accompanying consolidated balance sheet.



On August 2, 2023, the Company announced a regular quarterly dividend of $0.025 per share for the second quarter of 2023 to the shareholders of record as of September 22, 2023. The quarterly dividend of $492 for the second quarter of 2023 was paid on October 6, 2023.



On May 25, 2023, the Company announced a regular quarterly dividend of $0.025 per share for the first quarter of 2023 to the shareholders of record as of June 22, 2023. The quarterly dividend of $491 for the second quarter of 2023 was paid on July 6, 2023.



On March 14, 2023, the Company announced a regular quarterly dividend of $0.025 per share for the fourth quarter of 2022 to the shareholders of record as of March 31, 2023. The quarterly dividend of $500 for the fourth quarter of 2022 was paid on April 25, 2023.



On November 30, 2022, the Company announced a regular quarterly dividend of $0.25 per share for the third quarter of 2022 which was paid on January 30, 2023 to the shareholders of record as of December 28, 2022. The dividend declared on November 29, 2022 amounting to $4,548 is included in “Other current liabilities” as of December 31, 2022 in the accompanying consolidated balance sheet and were paid to the shareholders of record on January 30, 2023.



On August 4, 2022, the Company announced a regular quarterly dividend of $0.25 per share for the second quarter of 2022 to the shareholders of record as of September 25, 2022. The quarterly dividend of $4,548 for the second quarter of 2022 was paid on October 11, 2022.


F-34
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)

On May 31, 2022, the Company announced a regular quarterly dividend of $0.25 per share for the first quarter of 2022 to the shareholders of record as of June 28, 2022. The quarterly dividend of $4,460 for the first quarter of 2022 was paid on July 14, 2022.



On March 10, 2022, the Company announced a regular quarterly dividend of $0.25 per share as well as a special dividend of $0.25 per share for the fourth quarter of 2021 to all shareholders of record as of March 25, 2022. The quarterly dividend for the fourth quarter of 2021 of $4,458 and the special dividend of $4,458 were paid on April 5, 2022.



Total dividends declared in the years ended December 31, 2023 and December 31, 2022 amounted to $1,974 and $22,472, respectively.


iii)
Common stock issuances


On December 14, 2023, the Company entered into an “at the market” offering program with B. Riley Securities, Inc., as sales agent (the “Sales Agent”). In accordance with the terms of the at-the-market sale agreement with the Sales Agent, the Company may offer and sell a number of its common shares, having an aggregate offering price of up to $30,000 at any time and from time to time through the Sales Agent, as agent or principal. The Company intends to use the net proceeds from any sales under the “at the market” offering program for general corporate purposes, which may include buybacks of common shares, additions to working capital, capital expenditures, repayment of debt, financing of possible vessel acquisitions and other investments, or a combination thereof. As of December 31, 2023, 1,099 shares have been sold from the Company for gross proceeds of $8 under the offering program and are shown in the consolidated statements of stockholders’ equity, net of $199 offering expenses.

On July 2, 2021, the Company’s board of directors declared a dividend of one preferred share purchase right (a “Right”) for each of the Company’s outstanding common shares and adopted a shareholder rights plan. On December 13, 2023, the Company’s board of directors approved an amendment and restatement of the Rights Agreement to make certain technical or ministerial changes (the “Shareholders Rights Agreement”). The dividend was payable on July 19, 2021 to the shareholders of record on July 2, 2021. Each Right will allow its holder to purchase from the Company one one-thousandth of a Series A Participating Preferred Share (a “Preferred Share”) for $30.00 (the “Exercise Price”), once the Rights become exercisable. This portion of a Preferred Share will give the shareholder approximately the same dividend, voting and liquidation rights as would one common share. Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights. The Rights will not be exercisable until ten days after the public announcement that a person or group has become an “Acquiring Person” by obtaining beneficial ownership of 10% (15% in the case of a passive institutional investor) or more of the Company’s outstanding common shares. The Acquiring Person will not be entitled to exercise these Rights. If an Acquiring Person obtains beneficial ownership of 10% (15% in the case of a passive institutional investor) or more of the Company’s common shares, then each Right will entitle the holder to purchase for the Exercise Price, in lieu of one one-thousandth of a share of Series A Preferred Stock, a number of common shares having a then-current market value of twice the Exercise Price. In addition, if after an Acquiring Person obtains 10% (15% in the case of a passive institutional investor) or more of the Company’s common shares, (i) the Company merges into another entity; (ii) an acquiring entity merges into the Company; or (iii) the Company sells or transfers 50% or more of its assets, cash flow or earning power, then each Right will entitle the holder to purchase, for the Exercise Price, a number of common shares of the person engaging in the transaction having a then-current market value of twice the Exercise Price. The board of directors may redeem the Rights for $0.0001 per Right under certain circumstances. The Rights expire on the earliest of (i) December 14, 2026; or (ii) the redemption or exchange of the Rights. As at December 31, 2023, 2022 and 2021, no Rights were exercised.

On April 26, 2021, JDH exercised its option to purchase 428,571 additional Units (with each unit consisting of one common share of the Company, or, at JDH’s option, one pre-funded warrant in lieu of such common share, and ten warrants to purchase one common share at an exercise price of $7.00 per share) at a price of $7.00 per Unit in exchange for the settlement of principal under the Second JDH Loan in an amount of $3,000 (i.e., an amount equal to the aggregate purchase price of the units) (Note 8). 428,571 common shares were issued to JDH in this transaction.

On February 19, 2021, the Company sold 4,415,000 common shares under a registered direct offering at a price of $17 per common share, in exchange for gross proceeds of $75,055, or net proceeds of approximately $69,971.

F-35
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
 
iv)
Buybacks

On June 28, 2022, the Board of Directors of the Company authorized a share repurchase plan (“June 2022 Repurchase Plan”) under which the Company would repurchase up to $5,000 of its outstanding common shares, convertible note or warrants. On November 28, 2022, the Company’s Board of Directors authorized the extension of the June 2022 Repurchase Plan until December 31, 2023. On December 13, 2023, the Board of Directors of the Company terminated the June 2022 Repurchase Plan and authorized a new share repurchase plan (“December 2023 Repurchase Plan”) under which the Company may repurchase up to $25,000 of its outstanding common shares, convertible note or warrants.

During 2023, the Company repurchased 375,531 of its outstanding common shares at an average price of approximately $4.45 per share pursuant to its share repurchase programs for a total of $1,679, inclusive of commissions and fees. All the repurchased shares were cancelled as of December 31, 2023.

No repurchases have been made during the year 2022.

During the fourth quarter of 2021, the Company repurchased 170,210 of its outstanding common shares at an average price of approximately $9.93 pursuant to its share repurchase program for a total of $1,708, inclusive of commissions and fees. All the repurchased shares were cancelled as of December 31, 2021.

(c)          Warrants

All warrants are classified in equity, according to the Company’s accounting policy (Note 2).

Class E Warrants

On January 10, 2023, the Company completed its tender offer to purchase all outstanding Class E Warrants at a price of $0.20 per warrant. The total number of warrants tendered was 4,038,114 warrants, representing approximately 47% of the outstanding Class E Warrants at the time of the tender offer. During the year ended December 31, 2023, no shares were issued from Class E warrants exercises. As of December 31, 2023, 4,494,599 of Class E warrants remain outstanding at an exercise price of $4.915 per share.

During the year ended December 31, 2022, 10,000 shares were issued from 100,000 Class E warrants exercised, for proceeds of $70. As of December 31, 2022, 8,532,713 of Class E warrants remained outstanding.

Class D Warrants

As of December 31, 2023, the number of remaining Class D Warrants outstanding is 4,368,750 at an exercise price of $13.915 per share.

Representative Warrants

The Company’s previously issued Representative Warrants expired according to their terms in April 2023.

Class B Warrants

The Company’s previously issued Class B Warrants, trading under the symbol SHIPZ, expired according to their terms on May 13, 2022. Pursuant to such expiration trading of the Class B Warrants was terminated. The Class B Warrants were the last class of the Company’s warrants that were listed for trading.

As of December 31, 2023, the number of common shares that can potentially be issued under each outstanding warrant are:

Warrant
  
Shares to be issued
upon exercise of
remaining warrants
  
Class D
    
27,304
  
Class E
    
449,459
  
Total
    
476,763
  

F-36
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
13.
Vessel Revenue and Voyage Expenses:

Revenue Recognition

Demurrage income for the years ended December 31, 2023, 2022 and 2021 was $NIL, $NIL and $800, respectively.

Despatch expense for the years ended December 31, 2023, 2022 and 2021 was $NIL, $NIL and $110, respectively.

Disaggregation of Revenue

The following table presents the Company’s statements of income figures derived from spot charters and time charters for the years ended December 31, 2023, 2022 and 2021:

   
Year ended December 31,
  
   
2023
     2022
     2021
  
Vessel revenues from spot charters, net of commissions
    
-
      
-
      
28,264
  
Vessel revenues from time charters, net of commissions
    
107,036
      
122,629
      
124,844
  
Total
    
107,036
      
122,629
      
153,108
  

The Company disaggregates its revenue from contracts with customers by the type of charter (time and spot charters). As of December 31, 2023 and 2022, the trade accounts receivable was $896 and $720, respectively, and related to time charters.

The current portion of Deferred revenue as of December 31, 2023 was $2,136 and relates to cash received in advance of performance under operating leases and to premiums for energy devices (i.e. increased daily hire rates provided for by the chartering agreements) for specific equipment installed in the vessels. The non-current portion of Deferred revenue as of December 31, 2023 and 2022 was $254 and $35 and relates to cash received in advance of performance under operating leases and to premiums for energy devices (i.e. increased daily hire rates provided for by the chartering agreements) for specific equipment installed in the vessels. The Deferred revenue is allocated on a straight-line basis over the minimum duration of each charter party, except for unearned revenue, which represents cash received in advance of services which have not yet been provided.

Charterers individually accounting for more than 10% of revenues during the years ended December 31, 2023, 2022 and 2021 were:

Customer
  
2023
     2022
     2021
  
A
    
28
%
    
24
%
    
15
%
B
    
25
%
    
17
%
    
23
%
C
    
18
%
    
18
%
    
13
%
D
    
12
%
    
15
%
    
11
%
E
     -       -       10 %
Total
    
83
%
    
74
%
    
72
%

Voyage Expenses

The following table presents the Company’s statements of income figures derived from spot charters and time charters for the years ended December 31, 2023, 2022 and 2021:

   
Year ended December 31,
  
   
2023
    
2022
     2021
  
Voyage expenses from spot charters
    
-
      
-
      
13,465
  
Voyage expenses from time charters
    
2,851
      
4,293
      
3,004
  
Total
    
2,851
      
4,293
      
16,469
  

F-37
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
14.
Interest and Finance Costs:

Interest and finance costs are analyzed as follows:

 
  
Year ended December 31,
  
 
  
2023
    
2022
    
2021
  
Interest on long-term debt and other financial liabilities
    
17,864
      
11,609
      
8,766
  
Interest on finance lease liability     219       -       -  
Convertible notes interest expense
     178       694       2,067  
Amortization of deferred finance costs and debt discounts
    
2,155
      
2,575
      
3,333
  
Amortization of deferred finance costs and debt discounts (shares issued to third party - non-cash)
    
86
      
284
      
326
  
Amortization of convertible note beneficial conversion feature (non-cash)
     -       -       2,887  
Other
    
192
      
170
      
400
  
Total
    
20,694
      
15,332
      
17,779
  

15.
Earnings per Share:

The calculation of net income per common share is summarized below:


  
For the years ended December 31,
  
   
2023
    
2022
    
2021
  
                   
Net income
  
$
2,282
    
$
17,239
    
$
41,348
  
Less: Dividends to non-vested participating securities
    
(61
)
    
(227
)
    
-
  
Less: Undistributed earnings to non-vested participating securities
    
(10
)
    
(105
)
    
-
  
Net income attributable to common shareholders, basic
  
$
2,211
    
$
16,907
    
$
41,348
  
                         
Undistributed earnings to non-vested participating securities
  
$
10
    
$
105
    
$
-
  
Undistributed earnings reallocated to non-vested participating securities
    
(10
)
    
(51
)
    
-
  
Interest effect of convertible notes
    
-
      
-
      
6,473
  
Net income attributable to common shareholders, diluted
  
$
2,211
    
$
16,961
    
$
47,821
  
                         
Weighted average common shares outstanding, basic
    
18,394,419
      
17,439,033
      
15,332,191
  
Effect of dilutive securities:
                        
   Warrants
    
48,269
      
245,015
      
541,009
  
   Non-vested participating securities
    
-
      
-
      
169,522
  
   Convertible notes shares
    
-
      
-
      
3,091,031
  
Weighted average common shares outstanding, diluted
    
18,442,688
      
17,684,048
      
19,133,753
  
                         
Net income per share attributable to common shareholders, basic
  
$
0.12
    
$
0.97
    
$
2.70
  
Net income per share attributable to common shareholders, diluted
  
$
0.12
    
$
0.96
     $ 2.50  

F-38
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
As of December 31, 2023, 607,580 non-vested participating shares under the Company’s Equity Incentive Plan were excluded from the computation of diluted shares as their effect was already considered under the more dilutive two-class method used above (Note 16). Additionally, securities that could potentially dilute basic EPS in the future that were not included in the computation of diluted EPS as of December 31, 2023, because to do so would have anti-dilutive effect, are any incremental shares of unexercised warrants that are out-of-the money as of the reporting date (Note 12), calculated with the treasury stock method, as well as shares assumed to be converted with respect to the convertible notes (Note 9) calculated with the if-converted method.

As of December 31, 2022, non-vested participating shares under the Company’s Equity Incentive Plan of 294,231 were excluded from the computation of diluted shares as their effect was already considered under the more dilutive two-class method used above (Note 16). As of December 31, 2022, securities that could potentially dilute basic EPS in the future that were not included in the computation of diluted EPS, because to do so would have anti-dilutive effect, are 38,332 incremental shares of unexercised warrants that are out-of-the money as of the reporting date (Note 12), calculated with the treasury stock method, as well as 930,416 shares assumed to be converted with respect to the convertible notes (Note 9) calculated with the if-converted method.

As of December 31, 2021, securities that could potentially dilute basic EPS in the future that were not included in the computation of diluted EPS, because to do so would have anti-dilutive effect, were 81,230 potentially issuable shares of unexercised warrants that were out-of-the money as of December 31, 2021.

16.
Equity Incentive Plan:

On March 27, 2023, the Compensation Committee granted an aggregate of 1,823,800 restricted shares of common stock pursuant to the Equity Incentive Plan. Of the total 1,823,800 shares issued on March 27, 2023, 1,330,000  shares were granted to the non-executive members of the Board of Directors and to the executive officers and 493,800 shares were granted to certain of the Company’s non-executive employees and to the sole director of the Company’s commercial manager, a non-employee. The fair value of each share on the grant date was $5.22. 607,974 shares vested on the date of the issuance, March 27, 2023, 607,913 shares vested on October 1, 2023 and 607,580 shares will vest on October 1, 2024, taking into consideration 333 forfeited shares.

On July 8, 2022, the Company’s Equity Incentive Plan, as previously amended, was further amended and restated to increase the aggregate number of shares of the common stock reserved for issuance under the Plan to 400,000 shares. The same date, the Compensation Committee granted an aggregate of 350,000 restricted shares of common stock pursuant to the Equity Incentive Plan. Of the total 350,000 shares issued on July 12, 2022, 245,000 shares were granted to the non-executive members of the board of directors and to the executive officers and 105,000 shares were granted to certain of the Company’s non-executive employees and to the sole director of the Company’s commercial manager, a non-employee. The fair value of each share on the grant date was $6.90. 116,670 shares vested on the date of the issuance, July 12, 2022, 116,665 shares vested on October 1, 2022 and 116,665 shares vested on October 1, 2023.

On January 12, 2022, the Company’s Equity Incentive Plan, as previously amended, was further amended and restated to increase the aggregate number of shares of the common stock reserved for issuance under the Plan to 550,000 shares. On the same date, the Compensation Committee granted an aggregate of 533,700 restricted shares of common stock pursuant to the Equity Incentive Plan. Of the total 533,700 shares issued, 330,000 shares were granted to the non-executive members of the board of directors and to the executive officers and 203,700 shares were granted to certain of the Company’s non-executive employees and to the sole director of the Company’s commercial manager, a non-employee. The fair value of each share on the grant date was $9.10. 177,902 shares vested on the grant date, 177,566 shares vested on October 1, 2022 and 177,566 shares vested on October 1, 2023, taking into consideration 666 forfeited shares.

On August 2, 2021, the Company’s Equity Incentive Plan was amended and restated to increase the aggregate number of shares of the common stock reserved for issuance under the Plan to 350,000 shares. On the same date, the Compensation Committee granted an aggregate of 310,000 restricted shares of common stock pursuant to the Equity Incentive Plan. Of the total 310,000 shares issued, 218,500 shares were granted to the non-executive members of the board of directors and to the executive officers and 91,500 shares were granted to certain of the Company’s non-executive employees and to the sole director of the Company’s commercial manager, a non-employee and another non-employee. The fair value of each share on the grant date was $10.20. 103,335 shares vested on the grant date, 103,333 shares vested on October 1, 2021 and 103,332 shares vested on October 1, 2022.

On January 18, 2021, the Company’s Equity Incentive Plan was amended and restated to increase the aggregate number of shares of the common stock reserved for issuance under the Plan to 400,000 shares. On the same date, the Compensation Committee granted an aggregate of 360,000 restricted shares of common stock pursuant to the Equity Incentive Plan. Of the total 360,000 shares issued, 235,000 shares were granted to the non-executive members of the board of directors and to the executive officers and 125,000 shares were granted to certain of the Company’s non-executive employees and to the sole director of the Company’s commercial manager, a non-employee. The fair value of each share on the grant date was $8.10. 120,003 shares vested on the grant date, 119,999 shares vested on October 1, 2021 and 119,998 shares vested on October 1, 2022.

F-39
Table of Contents
Seanergy Maritime Holdings Corp.
Notes To The Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
The related expense for shares granted to the Company’s board of directors and certain of its employees for the years ended December 31, 2023, 2022 and 2021, amounted to $8,852, $6,973 and $4,907, respectively, and is included under general and administration expenses. The related expense for shares granted to non-employees for the years ended December 31, 2023, 2022 and 2021, amounted to $295, $212 and $190, respectively, and is included under voyage expenses.

Restricted shares during 2023, 2022 and 2021 are analyzed as follows:

 
  
Number
of Shares
    
Weighted
Average Grant
Date Price
  
Outstanding at December 31, 2021
    
223,330
    
$
7.88
  
Granted
    
883,700
      
8.23
  
Vested
    
(812,133
)
    
8.46
  
Forfeited
    (666 )     9.10  
Outstanding at December 31, 2022
    
294,231
    
$
7.32
  
Granted
    
1,823,800
      
5.22
  
Vested
    
(1,510,118
)
    
5.81
  
Forfeited
    
(333
)
    
5.22
  
Outstanding at December 31, 2023
    
607,580
    
$
4.78
  

The unrecognized cost for the non-vested shares granted to the Company’s board of directors and certain of its employees as of December 31, 2023 and 2022 amounted to $1,572 and $1,200, respectively. On December 31, 2023, the weighted-average period over which the total compensation cost related to non-vested awards granted to the Company’s board of directors and its other employees not yet recognized is expected to be recognized is 0.75 years.
 
17.
Subsequent Events

On January 10, 2024, the Company paid a regular quarterly cash dividend of $0.025 per share for the third quarter of 2023 to all shareholders of record as of December 22, 2023 (Note 12).

On February 5, 2024, the Company agreed to acquire the 181,392 dwt Capesize bulk carrier, built in 2013 in Japan, which will be renamed Iconship. The purchase price of $33,660 is expected to be funded through a combination of cash on hand and debt financing. The Iconship is expected to be delivered to the Company between April to June 2024.

On March 5, 2024, the Company declared a regular quarterly cash dividend of $0.025 per share for the fourth quarter of 2023 payable on or about April 10, 2024 to all shareholders of record as of March 22, 2024. In addition, the Company declared a special dividend of $0.075 per share payable on or about April 10, 2024 to all shareholders of record as of March 22, 2024.

On March 18, 2024, the Company entered into an agreement with an unaffiliated third party for the purchase of a secondhand Capesize vessel built in 2012 at a Japanese shipyard, at a gross purchase price of $35,600. The vessel is expected to be delivered between July and October 2024. The amount of $4,450 has been paid as advance payment.

During 2024 and as of the date of the issuance of these consolidated financial statements, 1,800,000 of the Class E warrants (Note 12) have been exercised for gross proceeds of $885. 2,694,599 Class E warrants remain outstanding.

During 2024 and as of the date of the issuance of these consolidated financial statements, 308,535 shares have been sold from the Company for gross proceeds of $2,503, under the “at-the-market” offering program.

During 2024 and as of the date of the issuance of these consolidated financial statements, 115,312 shares have been repurchased from the Company for gross amount of $843, under the December 2023 Repurchase Plan. All these shares are cancelled and removed from the Company’s share capital as of the date of issuance of these consolidated financial statements.

On March 27, 2024, the Company’s Equity Incentive Plan was amended and restated to increase the aggregate number of shares of the common stock reserved for issuance under the Plan to 550,000 shares. The same date, the Compensation Committee granted an aggregate of 502,500 restricted shares of common stock pursuant to the Plan. Of the total 502,500 shares issued on March 27, 2024, 285,000 shares were granted to the non-executive members of the board of directors and to the executive officers and 217,500 shares were granted to certain of the Company’s non-executive employees and to the sole director of the Company’s commercial manager, a non-employee. The fair value of each share on the grant date was $8.42. 107,250 shares vested on the date of the issuance, March 27, 2024, 143,250 shares will vest on September 27, 2024, 108,000 shares will vest on March 27, 2025 and 144,000 shares will vest on September 26, 2025.

F-40
EX-2.5 2 ef20015287_ex2-5.htm EXHIBIT 2.5
Exhibit 2.5

DESCRIPTION OF SECURITIES
 
For the complete terms of our capital stock, please refer to our restated articles of incorporation, as amended, and our fourth amended and restated bylaws, which are filed as exhibits to the annual report of which this exhibit forms a part. The Business Corporations Act (“BCA”) of the Republic of the Marshall Islands may also affect the terms of our capital stock.
 
For purposes of the following description of capital stock, references to “us”, “we” and “our” refer only to Seanergy Maritime Holdings Corp. and not any of its subsidiaries.
 
Capitalized terms used but not defined herein have the meanings given to them in the annual report of which this exhibit forms a part.
 
Purpose
 
Our purpose, as stated in our restated articles of incorporation, as amended, is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the BCA. Our restated articles of incorporation, as amended, and fourth amended and restated bylaws do not impose any limitations on the ownership rights of our shareholders.
 
Authorized Capitalization
 
Our authorized capital stock consists of 500,000,000 registered common shares, par value $0.0001 per share and 25,000,000 registered preferred shares with par value of $0.0001, of which 20,000 shares are designated as Series B Preferred Shares. As of December 31, 2023, 19,636,352 common shares were issued and outstanding and as of March 28, 2024, 20,512,075 common shares were issued and outstanding. As of December 31, 2023 and March 28, 2024, 20,000 Series B Shares were issued and outstanding. Our board of directors has the authority to establish such series of preferred shares and with such designations, preferences and relative, participating, optional or special rights and qualifications, limitations or restrictions as shall be stated in the resolution or resolutions providing for the issue of such preferred shares.
 
Description of Common Shares

Subject to preferences that may be applicable to any outstanding preferred shares, holders of common shares are entitled to receive ratably all dividends, if any, declared by our board of directors out of funds legally available for dividends. Upon our dissolution or liquidation or the sale of all or substantially all of our assets, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of our common shares will be entitled to receive pro rata our remaining assets available for distribution.  Holders of common shares do not have conversion, redemption or preemptive rights to subscribe to any of our securities.  The rights, preferences and privileges of holders of common shares are subject to the rights of the holders of any preferred shares which we have issued or may issue in the future.  Our common shares are not subject to any sinking fund provisions and no holder of any shares will be required to make additional contributions of capital with respect to our shares in the future.

We are not aware of any limitations on the rights to own our common shares, including rights of non-resident or foreign stockholders to hold or exercise voting rights on our common shares, imposed by foreign law or by our restated articles of incorporation, as amended, or fourth amended and restated bylaws.

Each outstanding common share entitles the holder to one vote on all matters submitted to a vote of stockholders.  Amendments to our amended and restated articles of incorporation, as amended, generally require the affirmative vote of the holders of a majority of all outstanding shares entitled to vote. Amendments to our fourth amended and restated bylaws generally require the affirmative vote of a majority of our entire board of directors or the affirmative vote of a majority of votes cast at a meeting of shareholders. Unless otherwise required by law, our restated articles of incorporation, as amended, or fourth amended and restated bylaws, at any annual or special general meeting of shareholders where there is a quorum, the affirmative vote of a majority of the votes cast by holders of shares of stock represented at the meeting shall be the act of the shareholders. At all meetings of shareholders except otherwise expressly provided by law, there must be present in person or proxy shareholders of record holding at least one third of the shares issued and outstanding and entitled to vote at such meeting in order to constitute a quorum but if less than a quorum is present, a majority of those shares present either in person or by proxy shall have power to adjourn any meeting until a quorum shall be present.
 
1
Description of Preferred Stock Purchase Rights

On July 2, 2021, our board of directors declared a dividend of one preferred share purchase right (a “Right”) for each of our outstanding common shares and adopted a shareholder rights plan, as set forth in the Shareholders Rights Agreement dated as of July 2, 2021 (the “Original Rights Agreement”), by and between us and Continental Stock Transfer & Trust Company, as rights agent. The dividend was paid on July 19, 2021 to the shareholders of record on July 19, 2021.

On December 13, 2023, the Company’s board of directors approved an amended and restated Shareholders Rights Agreement (the “Rights Agreement”) which, among other things, amends the Original Rights Agreement to extend the expiration date of the Rights to December 14, 2026.

Our board of directors has adopted the Rights Agreement to protect shareholders from coercive or otherwise unfair takeover tactics. In general terms, it works by imposing a significant penalty upon any person or group that acquires 10% (15% in the case of a passive institutional investor) or more of the outstanding common shares without the approval of the board of directors. The Rights Agreement should not interfere with any merger or other business combination approved by the board of directors.

The summary description of Rights Agreement and the related Rights in this section is not complete and is qualified in all respects by the terms of the Rights Agreement, filed as an exhibit hereto, and of the Certificate of Designations of Series A Participating Preferred Stock, which is filed as an exhibit to our current report on Form 6-K filed on July 2, 2021.

The Rights

The Rights initially trade with, and are inseparable from, our common shares. The Rights are evidenced only by the certificates or book-entry notations that represent our common shares. New Rights accompany any new common shares we issue or have issued after July 19, 2021, until the Distribution Date described below.

Exercise Price

Each Right will allow its holder to purchase from us one one-thousandth of a share of Series A Participating Preferred Shares (a “Preferred Share”) for $30.00 (the “Exercise Price”), once the Rights become exercisable. This portion of a Preferred Share will give the shareholder approximately the same dividend, voting and liquidation rights as would one common share. Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.

Exercisability

The Rights will not be exercisable until ten days after the public announcement that a person or group has become an “Acquiring Person” by obtaining beneficial ownership of 10% (15% in the case of a passive institutional investor) or more of our outstanding common shares.

Certain synthetic interests in securities created by derivative positions—whether or not such interests are considered to be ownership of the underlying common shares or are reportable for purposes of Regulation 13D of the Securities Exchange Act of 1934, as amended—are treated as beneficial ownership of the number of shares of our common shares equivalent to the economic exposure created by the derivative position, to the extent actual shares of our common shares are directly or indirectly held by counterparties to the derivatives contracts. Swaps dealers unassociated with any control intent or intent to evade the purposes of the Rights Agreement are excepted from such imputed beneficial ownership.

For persons who, prior to the time of public announcement of the Original Rights Agreement, beneficially own 10% (15% in the case of a passive institutional investor) or more of our outstanding common shares, the Rights Agreement “grandfathers” their current level of ownership, so long as they do not purchase additional shares in excess of certain limitations.

The date when the Rights become exercisable is the “Distribution Date.” Until that date, the common shares certificates (or, in the case of uncertificated shares, by notations in the book-entry account system) will also evidence the Rights, and any transfer of common shares will constitute a transfer of Rights. After that date, the Rights will separate from the common shares and be evidenced by book-entry credits or by Rights certificates that we will mail to all eligible holders of common shares. Any Rights held by an Acquiring Person are null and void and may not be exercised.

2
Preferred Share Provisions

Each one one-thousandth of a Preferred Share, if issued, will, among other things:


 •
not be redeemable;


•
entitle holders to quarterly dividend payments in an amount per share equal to the aggregate per share amount of all cash dividends, and the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in common shares or a subdivision of our outstanding common shares (by reclassification or otherwise), declared on common shares since the immediately preceding quarterly dividend payment date; and


•
entitle holders to one vote on all matters submitted to a vote of the shareholders of the Company.


•
The value of one one-thousandth interest in a Preferred Share should approximate the value of one common share.

Consequences of a Person or Group Becoming an Acquiring Person


 •
Flip In. If an Acquiring Person obtains beneficial ownership of 10% (15% in the case of a passive institutional investor) or more of our common shares, then each Right will entitle the holder thereof to purchase, for the Exercise Price, a number of common shares (or, in certain circumstances, cash, property or other securities of ours) having a then-current market value of twice the Exercise Price. However, the Rights are not exercisable following the occurrence of the foregoing event until such time as the Rights are no longer redeemable by us, as further described below.

Following the occurrence of an event set forth in preceding paragraph, all Rights that are or, under certain circumstances specified in the Rights Agreement, were beneficially owned by an Acquiring Person or certain of its transferees will be null and void.


 •
Flip Over. If, after an Acquiring Person obtains 10% (15% in the case of a passive institutional investor) or more of our common shares, (i) the Company merges into another entity; (ii) an acquiring entity merges into the Company; or (iii) the Company sells or transfers 50% or more of its assets, cash flow or earning power, then each Right (except for Rights that have previously been voided as set forth above) will entitle the holder thereof to purchase, for the Exercise Price, a number of common shares of the person engaging in the transaction having a then-current market value of twice the Exercise Price.


•
Notional Shares. Shares held by affiliates and associates of an Acquiring Person, including certain entities in which the Acquiring Person beneficially owns a majority of the equity securities, and Notional Common Shares (as defined in the Rights Agreement) held by counterparties to a Derivatives Contract (as defined in the Rights Agreement) with an Acquiring Person, will be deemed to be beneficially owned by the Acquiring Person.

Redemption

The board of directors may redeem the Rights for $0.0001 per Right under certain circumstances. If the board of directors redeems any Rights, it must redeem all of the Rights. Once the Rights are redeemed, the only right of the holders of the Rights will be to receive the redemption price of $0.0001 per Right, payable, at the option of the Company, in cash, common shares or such other form of consideration as the board of directors shall determine. The redemption price will be adjusted if the Company has a stock dividend or a stock split.

3
Exchange

After a person or group becomes an Acquiring Person, but before an Acquiring Person owns 50% or more of the outstanding common shares, the board of directors may extinguish the Rights by exchanging one common share or an equivalent security for each Right, other than Rights held by the Acquiring Person. In certain circumstances, we may elect to exchange the Rights for cash or other securities of the Company having a value approximately equal to one common share.

Expiration

The Rights expire on the earliest of (i) December 14, 2026; or (ii) the redemption or exchange of the Rights as described above.

Anti-Dilution Provisions

The board of directors may adjust the purchase price of the Preferred Shares, the number of Preferred Shares issuable and the number of outstanding Rights to prevent dilution that may occur from a stock dividend, a stock split, or a reclassification of the Preferred Shares or common shares. No adjustments to the Exercise Price of less than 1% will be made.

Amendments

The terms of the Rights and the Rights Agreement may be amended in any respect without the consent of the holders of the Rights for so long as the Rights are redeemable. Thereafter, the terms of the Rights and the Rights Agreement may be amended without the consent of the holders of Rights, with certain exceptions, in order to (i) cure any ambiguities; (ii) correct or supplement any provision contained in the Rights Agreement that may be defective or inconsistent with any other provision therein; (iii) shorten or lengthen any time period pursuant to the Rights Agreement; or (iv) make changes that do not adversely affect the interests of holders of the Rights (other than an Acquiring Person or an affiliate or associate of an Acquiring Person).

Taxes

The distribution of Rights should not be taxable for federal income tax purposes. However, following an event that renders the Rights exercisable or upon redemption of the Rights, shareholders may recognize taxable income.

Description of Series B Preferred Shares

The following description of the characteristics of the Series B Preferred Shares is a summary and does not purport to be complete and is qualified by reference to the Statement of Designation attached as an exhibit to the annual report of which this exhibit forms a part.

Voting.  To the fullest extent permitted by law, each Series B Preferred Share entitles the holder hereof to 25,000 votes per share on all matters submitted to a vote of our shareholders, provided however, that no holder of Series B Preferred Shares may exercise voting rights pursuant to Series B Preferred Shares that would result in the aggregate voting power of any beneficial owner of such shares and its affiliates (whether pursuant to ownership of Series B Preferred Shares, common shares or otherwise) to exceed 49.99% of the total number of votes eligible to be cast on any matter submitted to a vote of our shareholders. To the fullest extent permitted by law, the holder of Series B Preferred Shares shall have no special voting or consent rights and shall vote together as one class with the holders of the common shares on all matters put before the shareholders.

Conversion. The Series B Preferred Shares are not convertible into common shares or any other security.

Redemption.  The Series B Preferred Shares are not redeemable.

Dividends. The Series B Preferred Shares have no dividend rights.

Transferability. All issued and outstanding Series B Preferred Shares must be held of record by one holder, and the Series B Preferred Shares shall not be transferred or sold without the prior approval of our board of directors.

Liquidation Preference. Upon any liquidation, dissolution or winding up of the Company, the Series B Preferred Shares will rank pari-passu with the common shareholders and shall be entitled to receive a payment equal to the par value of $0.0001 per share. The holder of Series B Preferred Shares has no other rights to distributions upon any liquidation, dissolution or winding up of the Company.

4
Shareholder Meetings
 
Under our fourth amended and restated bylaws, annual shareholder meetings will be held at a time and place selected by our board of directors. The meetings may be held in or outside of the Marshall Islands. Special meetings of the shareholders, unless otherwise prescribed by law, may be called for any purpose or purposes at any time by the chairman of the board of directors, a majority of the entire board of directors, or the chief executive officer. Notice of every annual and special meeting of shareholders shall be given at least 15 but not more than 60 days before such meeting to each shareholder of record entitled to vote thereat.
 
Directors
 
Our directors are elected by the affirmative vote of a plurality of the votes cast at a meeting of the shareholders by the holders of shares entitled to vote in the election. Our restated articles of incorporation, as amended, and fourth amended and restated bylaws do not provide for cumulative voting in the election of directors.
 
The board of directors must consist of at least one member and not more than thirteen. Each director shall be elected to serve until the third succeeding annual meeting of shareholders and until his successor shall have been duly elected and qualified, except in the event of his death, resignation, removal, or the earlier termination of his term of office. The board of directors has the authority to fix the amounts which shall be payable to the members of our board of directors, and to members of any committee, for attendance at any meeting or for services rendered to us.
 
Classified Board
 
Our restated articles of incorporation, as amended, provide for the division of our board of directors into three classes of directors, with each class as nearly equal in number as possible, serving staggered, three-year terms. Approximately one-third of our board of directors will be elected each year. This classified board provision could discourage a third party from making a tender offer for our shares or attempting to obtain control of our company. It could also delay shareholders who do not agree with the policies of the board of directors from removing a majority of the board of directors for two years.
 
Election and Removal
 
Our fourth amended and restated bylaws require parties other than the board of directors to give advance written notice of nominations for the election of directors. The entire board of directors or any individual director may be removed, with cause, by a majority vote of the holders of the outstanding shares then entitled to vote at an election of directors. No director may be removed without cause by either the stockholders or the board of directors. Except as otherwise provided by applicable law, cause for the removal of a director shall be deemed to exist only if the director whose removal is proposed: (i) has been convicted, or has been granted immunity to testify in any proceeding in which another has been convicted, of a felony by a court of competent jurisdiction and that conviction is no longer subject to direct appeal; (ii) has been found to have been negligent or guilty of misconduct in the performance of his duties to the Corporation in any matter of substantial importance to the Corporation by (A) the affirmative vote of at least 80% of the directors then in office at any meeting of the board of directors called for that purpose or (B) a court of competent jurisdiction; or (iii) has been adjudicated by a court of competent jurisdiction to be mentally incompetent, which mental incompetence directly affects his ability to serve as a director of the corporation. These provisions may discourage, delay or prevent the removal of incumbent officers and directors.
 
Dissenters’ Rights of Appraisal and Payment
 
Under the BCA, our shareholders generally have the right to dissent from the sale of all or substantially all of our assets not made in the usual course of our business and receive payment of the fair value of their shares. However, the right of a dissenting shareholder to receive payment of the appraised fair value of his shares is not available under the BCA for the shares of any class or series of stock, which shares at the record date fixed to determine the shareholders entitled to receive notice of and to vote at the meeting of the shareholders to act upon the agreement of merger or consolidation, were either (i) listed on a securities exchange or admitted for trading on an interdealer quotation system or (ii) held of record by more than 2,000 holders. In the event of any further amendment of our articles of incorporation, a shareholder also has the right to dissent and receive payment for his or her shares if the amendment alters certain rights in respect of those shares. The dissenting shareholder must follow the procedures set forth in the BCA to receive payment.
 
Shareholders’ Derivative Actions
 
Under the BCA, any of our shareholders may bring an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the shareholder bringing the action is a holder of common shares both at the time the derivative action is commenced and at the time of the transaction to which the action relates.
 
5
Forum Selection

Our fourth amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, the High Court of the Republic of Marshall Islands shall be the sole and exclusive forum for (i) any shareholders’ derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or employee of the Company to the Company or the Company’s shareholders, (iii) any action asserting a claim arising pursuant to any provision of the BCA (as amended from time to time), or (iv) any action asserting a claim governed by the internal affairs doctrine. However, the enforceability of similar forum selection provisions in other companies’ governing documents has been challenged in legal proceedings, and it is possible that in connection with any action a court could find the forum selection provision contained in our fourth amended and restated bylaws to be inapplicable or unenforceable in such action. In particular, Section 27 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. In addition, Section 22 of the Securities Act of 1933, as amended (the “Securities Act”), creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Shareholders’ derivative actions, including those arising under the Exchange Act or Securities Act, are subject to our forum selection provision. To the extent that the exclusive forum provision would apply to restrict the courts in which our shareholders may bring claims arising under the Exchange Act or the Securities Act and the rules and regulations thereunder, there is uncertainty as to whether a court would enforce such a provision. Investors cannot waive compliance with the federal securities laws and the rules and regulations promulgated thereunder. If a court were to find the forum selection provision to be inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business, financial condition and results of operations. Any person or entity holding, owning, or otherwise acquiring any shares of capital stock of us shall be deemed to have notice of and consented to the forum selection provisions in our fourth amended and restated bylaws. Although our forum selection provisions shall not relieve us of our statutory duties to comply with the federal securities laws and the rules and regulations thereunder, and our shareholders are not deemed to have waived our compliance with these laws, rules, and regulations, as applicable, our forum selection provisions may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits with respect to such claims. For more information regarding the risks connected to the forum selection provisions in our fourth amended and restated bylaws, see “Risk Factors—We may not achieve the intended benefits of having a forum selection provision if it is found to be unenforceable.”

Indemnification of Officers and Directors

Our fourth amended and restated bylaws provide that we must indemnify our directors, officers, employees and agents, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. We are also required to advance certain expenses (including attorney's fees and disbursements and court costs) to our directors and officers and we may carry directors' and officers' insurance providing indemnification for our directors and officers for some liabilities. We believe that these indemnification provisions and this insurance are useful to attract and retain qualified directors and officers.

The indemnification provisions in our fourth amended and restated bylaws may discourage shareholders from bringing a lawsuit against directors and officers for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our shareholders. In addition, an investment in our common shares may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

Anti-takeover Provisions of our Charter Documents
 
Several provisions of our restated articles of incorporation, as amended, our fourth amended and restated bylaws and our Series B Shares may have anti-takeover effects. In addition, we have entered into the Rights Agreement, pursuant to which our board of directors may cause the substantial dilution of any person that attempts to acquire us without the approval of our board of directors. These provisions of our organizational documents and the Rights Agreement are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our board of directors to maximize shareholder value in connection with any unsolicited offer to acquire us. However, these anti-takeover provisions, including those summarized below, could also discourage, delay or prevent (1) the merger or acquisition of our company by means of a tender offer, a proxy contest or otherwise, that a shareholder may consider in its best interest and (2) the removal of incumbent officers and directors.
 
6
Classified Board of Directors

Our restated articles of incorporation, as amended, provide for the division of our board of directors into three classes of directors, with each class as nearly equal in number as possible, serving staggered, three-year terms. Approximately one-third of our board of directors is elected each year. This classified board provision could discourage a third party from making a tender offer for our shares or attempting to obtain control of us. It could also delay shareholders who do not agree with the policies of our board of directors from removing a majority of our board of directors for two years.

Election and Removal of Directors

Our restated articles of incorporation, as amended, prohibit cumulative voting in the election of directors. Our fourth amended and restated bylaws require parties other than the board of directors to give advance written notice of nominations for the election of directors. Our fourth amended and restated bylaws also provide that our directors may be removed only for cause and only upon the affirmative vote of a majority of the outstanding shares of our capital stock entitled to vote for those directors. These provisions may discourage, delay or prevent the removal of incumbent officers and directors.

Advance Notice Requirements for Shareholder Proposals and Director Nominations

Our fourth amended and restated bylaws provide that shareholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of shareholders must provide timely notice of their proposal in writing to the corporate secretary. Generally, to be timely, a shareholder’s notice must be received at our principal executive offices not less than 150 days nor more than 180 days prior to the one-year anniversary of the preceding year’s annual meeting. Our amended and restated bylaws also specify requirements as to the form and content of a shareholder’s notice. These provisions may impede shareholders’ ability to bring matters before an annual meeting of shareholders or make nominations for directors at an annual meeting of shareholders.

Limited Actions by Shareholders
 
Our fourth amended and restated bylaws provide that any action required or permitted to be taken by our shareholders must be effected at an annual or special meeting of shareholders or by the unanimous written consent of our shareholders.
 
Our fourth amended and restated bylaws provide that the chairman of the board of directors, a majority of the board of directors, or the chief executive officer may call special meetings of our shareholders and the business transacted at the special meeting is limited to the purposes stated in the notice. Accordingly, a shareholder may be prevented from calling a special meeting for shareholder consideration of a proposal over the opposition of our board of directors and shareholder consideration of a proposal may be delayed until the next annual meeting.
 
Blank Check Preferred Stock
 
Under the terms of our restated articles of incorporation, as amended, our board of directors has authority, without any further vote or action by our shareholders, to issue up to 25,000,000 shares of blank check preferred stock. Our board of directors may issue shares of preferred stock on terms calculated to discourage, delay or prevent a change of control of our company or the removal of our management.
 
Transfer Agent
 
The registrar and transfer agent for our common shares and warrants is Continental Stock Transfer & Trust Company.
 
Listing
 
Our common shares (including the Rights) trade on the Nasdaq Capital Market under the symbols “SHIP.”
 
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CERTAIN MARSHALL ISLANDS COMPANY CONSIDERATIONS
 
Our corporate affairs are governed by our restated articles of incorporation, as amended, fourth amended and restated bylaws and the BCA. The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States, including Delaware. While the BCA also provides that it is to be interpreted according to the laws of the State of Delaware and other states with substantially similar legislative provisions, there have been few, if any, court cases interpreting the BCA in the Marshall Islands, and we cannot predict whether Marshall Islands courts would reach the same conclusions as Delaware or other courts in the United States. Accordingly, you may have more difficulty in protecting your interests under Marshall Islands law in the face of actions by our management, directors or controlling shareholders than would shareholders of a corporation incorporated in a U.S. jurisdiction that has developed a substantial body of case law. Furthermore, the Marshall Islands lacks a bankruptcy statute, and in the event of any bankruptcy, insolvency, liquidation, dissolution, reorganization or similar proceeding involving the Company, the bankruptcy laws of the United States or of another country having jurisdiction over the Company would apply. The following table provides a comparison between certain statutory provisions of the BCA and the Delaware General Corporation Law relating to shareholders’ rights.
 
Marshall Islands
​
Delaware
Shareholder Meetings
Held at a time and place as designated in the bylaws.
​
May be held at such time or place as designated in the certificate of incorporation or the bylaws, or if not so designated, as determined by the board of directors.
Special meetings of the shareholders may be called by the board of directors or by such person or persons as may be authorized by the articles of incorporation or by the bylaws.
​
Special meetings of the shareholders may be called by the board of directors or by such person or persons as may be authorized by the certificate of incorporation or by the bylaws.
May be held in or outside of the Marshall Islands.
​
May be held in or outside of Delaware.
Notice:
​
Notice:
Whenever shareholders are required to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, date and hour of the meeting and, unless it is an annual meeting, indicate that it is being issued by or at the direction of the person calling the meeting.
​
Whenever shareholders are required to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, and the means of remote communication, if any.
A copy of the notice of any meeting shall be given personally or sent by mail not less than 15 nor more than 60 days before the meeting.
​
Written notice shall be given not less than 10 nor more than 60 days before the meeting.
Shareholders’ Voting Rights
Unless otherwise provided in the articles of incorporation, any action required by the BCA to be taken at a meeting of shareholders may be taken without a meeting if a consent or consents in writing, setting forth the action so taken, shall be signed by all the shareholders entitled to vote with respect to the subject matter thereof, or if the articles of incorporation so provide, by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.
​
Any action required to be taken by a meeting of shareholders may be taken without a meeting if a consent for such action is in writing and is signed by shareholders having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.
Any person authorized to vote may authorize another person or persons to act for him by proxy.
​
Any person authorized to vote may authorize another person or persons to act for him by proxy.

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Marshall Islands
  
Delaware
Unless otherwise provided in the articles of incorporation or the bylaws, a majority of shares entitled to vote constitutes a quorum. In no event shall a quorum consist of fewer than one-third of the common shares entitled to vote at a meeting.
​
For stock corporations, the certificate of incorporation or bylaws may specify the number of shares required to constitute a quorum but in no event shall a quorum consist of less than one-third of shares entitled to vote at a meeting. In the absence of such specifications, a majority of shares entitled to vote shall constitute a quorum.
When a quorum is once present to organize a meeting, it is not broken by the subsequent withdrawal of any shareholders.
​
When a quorum is once present to organize a meeting, it is not broken by the subsequent withdrawal of any shareholders.
The articles of incorporation may provide for cumulative voting in the election of directors.
​
The certificate of incorporation may provide for cumulative voting in the election of directors.
Removal:
​
Removal:
If the articles of incorporation or the bylaws so provide, any or all of the directors may be removed without cause by vote of the shareholders.
 
Any or all of the directors may be removed for cause by vote of the shareholders. The articles of incorporation or the specific provisions of a bylaw may provide for such removal by action of the board.
​
Any or all of the directors may be removed, with or without cause, by the holders of a majority of the shares entitled to vote except: (1) unless the certificate of incorporation otherwise provides, in the case of a corporation whose board is classified, shareholders may effect such removal only for cause, or (2) if the corporation has cumulative voting, if less than the entire board is to be removed, no director may be removed without cause if the votes cast against such director’s removal would be sufficient to elect such director if then cumulatively voted at an election of the entire board of directors, or, if there be classes of directors, at an election of the class of directors of which such director is a part.
Directors
Number of board members can be changed by an amendment to the bylaws, by the shareholders, or by action of the board under the specific provisions of a bylaw.
​
Number of board members shall be fixed by, or in a manner provided by, the bylaws, unless the certificate of incorporation fixes the number of directors, in which case a change in the number shall be made only by amendment to the certificate of incorporation.
The board of directors must consist of at least one member. If the board of directors is authorized to change the number of directors, it can only do so by a majority of the entire board of directors and so long as no decrease in the number shortens the term of any incumbent director.
​
The board of directors must consist of at least one member.
Dissenter’s Rights of Appraisal
Shareholders have a right to dissent from any plan of merger, consolidation or sale of all or substantially all assets not made in the usual course of business, and receive payment of the fair value of their shares. However, the right of a dissenting shareholder under the BCA to receive payment of the appraised fair value of his shares is not available for the shares of any class or series of stock, which shares at the record date fixed to determine the shareholders entitled to receive notice of and to vote at the meeting of the shareholders to act upon the agreement of merger or consolidation or any sale or exchange of all or substantially all assets, were either (i) listed on a securities exchange or admitted for trading on an interdealer quotation system or (ii) held of record by more than 2,000 holders.
​
Appraisal rights shall be available for the shares of any class or series of stock of a corporation in a merger or consolidation, subject to limited exceptions, such as a merger or consolidation of corporations listed on a national securities exchange in which listed shares are the offered consideration or if such shares are held of record by more than 2,000 holders.

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Marshall Islands
  
Delaware
A holder of any adversely affected shares who does not vote on or consent in writing to an amendment to the articles of incorporation has the right to dissent and to receive payment for such shares if the amendment:
​
  
Alters or abolishes any preferential right of any outstanding shares having preference; or
​
Creates, alters or abolishes any provision or right in respect to the redemption of any outstanding shares.
​
Alters or abolishes any preemptive right of such holder to acquire shares or other securities; or
​
Excludes or limits the right of such holder to vote on any matter, except as such right may be limited by the voting rights given to new shares then being authorized of any existing or new class.
​
Shareholders’ Derivative Actions
An action may be brought in the right of a corporation to procure a judgment in its favor, by a holder of shares or of voting trust certificates or of a beneficial interest in such shares or certificates. It shall be made to appear that the plaintiff is such a holder at the time the action is brought and that he was such a holder at the time of the transaction of which he complains, or that his shares or his interest therein devolved upon him by operation of law.
​
In any derivative suit instituted by a shareholder or a corporation, it shall be averred in the complaint that the plaintiff was a shareholder of the corporation at the time of the transaction of which he complains or that such shareholder’s stock thereafter devolved upon such shareholder by operation of law.
A complaint shall set forth with particularity the efforts of the plaintiff to secure the initiation of such action by the board of directors or the reasons for not making such effort. Such action shall not be discontinued, compromised or settled without the approval of the High Court of the Republic of The Marshall Islands.
​
  
Reasonable expenses including attorneys’ fees may be awarded if the action is successful.
​
A corporation may require a plaintiff bringing a derivative suit to give security for reasonable expenses if the plaintiff owns less than 5% of any class of stock and the common shares have a value of $50,000 or less.
​


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EX-4.1 3 ef20015287_ex4-1.htm EXHIBIT 4.1
Exhibit 4.1

AMENDED AND RESTATED
 
SEANERGY MARITIME HOLDINGS CORP.
2011 EQUITY INCENTIVE PLAN
 
ADOPTED ON MARCH 27, 2024
 
ARTICLE I.
General
 
1.1.
Purpose
 
The Seanergy Maritime Holdings Corp. 2011 Equity Incentive Plan (the “Plan”) is designed to provide certain Key Persons (as defined below), whose initiative and efforts are deemed to be important to the successful conduct of the business of Seanergy Maritime Holdings Corp. (the “Company”), with incentives to (a) enter into and remain in the service of the Company or its Affiliates (as defined below), (b) acquire a proprietary interest in the success of the Company, (c) maximize their performance and (d) enhance the long-term performance of the Company.
 
1.2.
Administration
 
(a)          Administration.  The Plan shall be administered by the Compensation Committee of the Company’s Board of Directors (the “Board”) or such other committee of the Board as may be designated by the Board to administer the Plan (the “Administrator”); provided that (i) in the event the Company is subject to Section 16 of the U.S. Securities Exchange Act of 1934, as amended (the “1934 Act”), the Administrator shall be composed of two or more directors, each of whom is a “Non-Employee Director” (a “Non-Employee Director”) under Rule 16b-3 (as promulgated and interpreted by the Securities and Exchange Commission (the “SEC”) under the 1934 Act, or any successor rule or regulation thereto as in effect from time to time (“Rule 16b-3”)), and (ii) the Administrator shall be composed solely of two or more directors who are “independent directors” under the rules of any stock exchange on which the Company’s Common Stock (as defined below) is traded; provided further, however, that, (A) the requirement in the preceding clause (i) shall apply only when required to exempt an Award intended to qualify for an exemption under the applicable provisions referenced therein, (B) the requirement in the preceding clause (ii) shall apply only when required pursuant to the applicable rules of the applicable stock exchange and (C) if at any time the Administrator is not so composed as required by the preceding provisions of this sentence, that fact will not invalidate any grant made, or action taken, by the Administrator hereunder that otherwise satisfies the terms of the Plan.  Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Administrator by the Plan, the Administrator shall have the full power and authority to: (1) designate the Persons (as defined below) to receive Awards (as defined below) under the Plan; (2) determine the types of Awards granted to a participant under the Plan; (3) determine the number of shares to be covered by, or with respect to which payments, rights or other matters are to be calculated with respect to, Awards; (4) determine the terms and conditions of any Awards; (5) determine whether, and to what extent, and under what circumstances, Awards may be settled or exercised in cash, shares, other securities, other Awards or other property, or cancelled, forfeited or suspended, and the methods by which Awards may be settled, exercised, cancelled, forfeited or suspended; (6) determine whether, to what extent, and under what circumstances cash, shares, other securities, other Awards, other property and other amounts payable with respect to an Award shall be deferred, either automatically or at the election of the holder thereof or the Administrator; (7) construe, interpret and implement the Plan and any Award Agreement (as defined below); (8) prescribe, amend, rescind or waive rules and regulations relating to the Plan, including rules governing its operation, and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (9)  correct any defect, supply any omission and reconcile any inconsistency in the Plan or any Award Agreement; and (10) make any other determination and take any other action that the Administrator deems necessary or desirable for the administration of the Plan.  Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Administrator, may be made at any time and shall be final, conclusive and binding upon all Persons.
 
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(b)         General Right of Delegation.  Except to the extent prohibited by applicable law, the applicable rules of a stock exchange or any charter, by-laws or other agreement governing the Administrator, the Administrator may delegate all or any part of its responsibilities to any Person or Persons selected by it; provided, however, that in no event shall an officer of the Company be delegated the authority to grant Awards to, or amend Awards held by, the following individuals: (i) individuals who are subject to Section 16 of the 1934 Act, or (ii) officers of the Company (or directors of the Company) to whom authority to grant or amend Awards has been delegated hereunder; provided, further, that any delegation of administrative authority shall only be permitted to the extent it is permissible under applicable securities laws (including, without limitation, Rule 16b-3, to the extent applicable) and the rules of any applicable stock exchange.  Any delegation hereunder shall be subject to the restrictions and limits that the Administrator specifies at the time of such delegation, and the Administrator may at any time rescind the authority so delegated or appoint a new delegate.  At all times, the delegatee appointed under this Section 1.2(b) shall serve in such capacity at the pleasure of the Administrator.
 
(c)          Indemnification.  No member of the Board, the Administrator or any employee of the Company or an Affiliate (each such Person, a “Covered Person”) shall be liable for any action taken or omitted to be taken or any determination made in good faith with respect to the Plan or any Award hereunder.  Each Covered Person shall be indemnified and held harmless by the Company against and from (i) any loss, cost, liability or expense (including attorneys’ fees) that may be imposed upon or incurred by such Covered Person in connection with or resulting from any action, suit or proceeding to which such Covered Person may be a party or in which such Covered Person may be involved by reason of any action taken or omitted to be taken under the Plan or any Award Agreement and (ii) any and all amounts paid by such Covered Person, with the Company’s approval, in settlement thereof, or paid by such Covered Person in satisfaction of any judgment in any such action, suit or proceeding against such Covered Person; provided that the Company shall have the right, at its own expense, to assume and defend any such action, suit or proceeding and, once the Company gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel of the Company’s choice.  The foregoing right of indemnification shall not be available to a Covered Person to the extent that a court of competent jurisdiction in a final judgment or other final adjudication, in either case not subject to further appeal, determines that the acts or omissions of such Covered Person giving rise to the indemnification claim resulted from such Covered Person’s bad faith, fraud or willful criminal act or omission or that such right of indemnification is otherwise prohibited by law or by the Company’s articles of incorporation or by-laws (in each case, as amended and/or restated).  The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which Covered Persons may be entitled under the Company’s articles of incorporation or by-laws (in each case, as amended and/or restated), as a matter of law, or otherwise, or any other power that the Company may have to indemnify such Persons or hold them harmless.
 
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(d)        Delegation of Authority to Senior Officers.  The Administrator may, in accordance with and subject to the terms of Section 1.2(b), delegate, on such terms and conditions as it determines, to one or more senior officers of the Company the authority to make grants of Awards to employees of the Company and its Subsidiaries (as defined below) (including any such prospective employee) and consultants of the Company and its Subsidiaries.
 
(e)          Award Grants.  Notwithstanding anything to the contrary contained herein, the Board may, in its sole discretion, at any time and from time to time, grant Awards to Non-Employee Directors or administer the Plan with respect to such Awards, in which event the Board shall have all the authority and responsibility granted to the Administrator herein with respect to such Awards.  In determining Awards to be granted under the Plan, the Administrator shall take into account such factors as it deem advisable, which may include taking into account the Company’s performance, the Award recipient’s performance, and/or the satisfaction of any performance goals or targets as may established from time to time.
 
1.3.
Persons Eligible for Awards
 
The Persons eligible to receive Awards under the Plan are those directors, officers and employees (including any prospective officer or employee) of the Company and its Subsidiaries and Affiliates and consultants and service providers (including individuals who are employed by or provide services to any entity that is itself such a consultant or service provider) to the Company and its Subsidiaries and Affiliates (collectively, “Key Persons”) as the Administrator shall select.
 
1.4.
Types of Awards
 
Awards may be made under the Plan in the form of (a) “incentive stock options” that are intended to qualify for special U.S. federal income tax treatment pursuant to Sections 421 and 422 of the Code (as defined below), as may be amended from time to time, or pursuant to a successor provision of the Code, and which is so designated in the applicable Award Agreement, (b) non-qualified stock options (i.e., any stock options granted under the Plan that are not “incentive stock options”), (c) stock appreciation rights, (d) restricted stock, (e) restricted stock units and (f) unrestricted stock, all as more fully set forth in the Plan.  The term “Award” means any of the foregoing that are granted under the Plan. No incentive stock option (other than an incentive stock option that may be assumed or issued by the Company in connection with a transaction to which Section 424(a) of the Code applies) may be granted under the Plan to a Person who is not eligible to receive an incentive stock option under the Code.
 
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1.5.
Shares Available for Awards; Adjustments for Changes in Capitalization
 
(a)          Maximum Number.  Subject to adjustment as provided in Section 1.5(c), the aggregate number of shares of common stock of the Company, par value $.0001 (“Common Stock”), with respect to which Awards may at any time be granted under the Plan shall be 550,000. The following shares of Common Stock shall again become available for Awards under the Plan: (i) any shares that are subject to an Award under the Plan and that remain unissued upon the cancellation or termination of such Award for any reason whatsoever; (ii) any shares of restricted stock forfeited pursuant to the Plan or the applicable Award Agreement; provided that any dividend equivalent rights with respect to such shares that have not theretofore been directly remitted to the grantee are also forfeited; and (iii) any shares in respect of which an Award is settled for cash without the delivery of shares to the grantee.  Any shares tendered or withheld to satisfy the grant or exercise price or tax withholding obligation pursuant to any Award shall again become available to be delivered pursuant to Awards under the Plan.
 
(b)          Source of Shares.  Shares issued pursuant to the Plan may be authorized but unissued Common Stock or treasury shares.  The Administrator may direct that any stock certificate evidencing shares issued pursuant to the Plan shall bear a legend setting forth such restrictions on transferability as may apply to such shares.
 
(c)         Adjustments.  (i)  In the event that any dividend or other distribution (whether in the form of cash, Company shares, other securities or other property), stock split, reverse stock split, reorganization, merger, consolidation, split-up, combination, repurchase or exchange of Company shares or other securities of the Company, issuance of warrants or other rights to purchase Company shares or other securities of the Company, or other similar corporate transaction or event, other than an Equity Restructuring (as defined below), affects the Company shares such that an adjustment is determined by the Administrator to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, then the Administrator shall, in such manner as it may deem equitable, adjust any or all of the number of shares or other securities of the Company (or number and kind of other securities or property) with respect to which Awards may be granted under the Plan, including the maximum number of shares issuable to an individual as set forth in Section 1.5(d).
 
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(ii)          The Administrator is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including the events described in Section 1.5(c)(i) or the occurrence of a Change in Control (as defined below), other than an Equity Restructuring) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or of changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange, accounting principles or law, whenever the Administrator determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, including providing for (A) adjustment to (1) the number of shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Awards or to which outstanding Awards relate and (2) the Exercise Price (as defined below) with respect to any Award and (B) a substitution or assumption of Awards, accelerating the exercisability or vesting of, or lapse of restrictions on, Awards, or accelerating the termination of Awards by providing for a period of time for exercise prior to the occurrence of such event, or, if deemed appropriate or desirable, providing for a cash payment to the holder of an outstanding Award in consideration for the cancellation of such Award (it being understood that, in such event, any option or stock appreciation right having a per share Exercise Price equal to, or in excess of, the Fair Market Value (as defined below) of a share subject to such option or stock appreciation right may be cancelled and terminated without any payment or consideration therefor); provided, however, that with respect to options and stock appreciation rights, unless otherwise determined by the Administrator, such adjustment shall be made in accordance with the provisions of Section 424(h) of the Code.
 
(iii)         In the event of (A) a dissolution or liquidation of the Company, (B) a sale of all or substantially all the Company’s assets or (C) a merger, reorganization or consolidation involving the Company or one of its Subsidiaries (as defined below), the Administrator shall have the power to:
 
(1)  provide that outstanding options, stock appreciation rights and/or restricted stock units (including any related dividend equivalent right) shall either continue in effect, be assumed or an equivalent award shall be substituted therefor by the successor corporation or a parent corporation or subsidiary corporation;
 
(2)  cancel, effective immediately prior to the occurrence of such event, options, stock appreciation rights and/or restricted stock units (including each dividend equivalent right related thereto) outstanding immediately prior to such event (whether or not then exercisable) and, in full consideration of such cancellation, pay to the holder of such Award a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Administrator) of the shares subject to such Award over the aggregate Exercise Price of such Award (it being understood that, in such event, any option or stock appreciation right having a per share Exercise Price equal to, or in excess of, the Fair Market Value of a share subject to such option or stock appreciation right may be cancelled and terminated without any payment or consideration therefor); or
 
(3)  notify the holder of an option or stock appreciation right in writing or electronically that each option and stock appreciation right shall be fully vested and exercisable for a period of 30 days from the date of such notice, or such shorter period as the Administrator may determine to be reasonable, and the option or stock appreciation right shall terminate upon the expiration of such period (which period shall expire no later than immediately prior to the consummation of the corporate transaction).
 
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(iv)         In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in this Section 1.5(c):
 
(A)          The number and type of securities or other property subject to each outstanding Award and the Exercise Price or grant price thereof, if applicable, shall be equitably adjusted; and
 
(B)         The Administrator shall make such equitable adjustments, if any, as the Administrator may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations set forth in Sections 1.5(a) and 1.5(d)).  The adjustments provided under this Section 1.5(c)(iv) shall be nondiscretionary and shall be final and binding on the affected participant and the Company.
 
(d)          Individual Limit.  Except for the limits set forth in this Section 1.5, no provision of this Plan shall be deemed to limit the number or value of shares of Common Stock with respect to which the Administrator may make Awards to any Key Person.  Subject to adjustment as provided in Section 1.5(c), the total number of shares of Common Stock with respect to which incentive stock options may be granted under the Plan to any one employee of the Company or a “parent corporation” or “subsidiary corporation” (as such terms are defined in Section 424 of the Code) of the Company during any one calendar year shall not exceed 3,125,000.  Incentive stock options granted and subsequently cancelled or deemed to be cancelled (e.g., as a result of re-pricing) in a calendar year count against the limit in the preceding sentence even after their cancellation.
 
1.6.
Definitions of Certain Terms
 
(a)          “Affiliate” shall mean (i) any entity that, directly or indirectly, is controlled by, controls or is under common control with, the Company and (ii) any entity in which the Company has a significant equity interest, in either case as determined by the Administrator.
 
(b)         Unless otherwise set forth in the applicable Award Agreement, in connection with a termination of employment or consultancy/service relationship or a dismissal from Board membership, for purposes of the Plan, the term “for Cause” shall be defined as follows:
 
(i)           if there is an employment, severance, consulting, service, change in control or other agreement governing the relationship between the grantee, on the one hand, and the Company or an Affiliate, on the other hand, that contains a definition of “cause” (or similar phrase), for purposes of the Plan, the term “for Cause” shall mean those acts or omissions that would constitute “cause” under such agreement; or
 
(ii)           if the preceding clause (i) is not applicable to the grantee, for purposes of the Plan, the term “for Cause” shall mean any of the following:
 
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(A)          any failure by the grantee substantially to perform the grantee’s employment or consulting/service or Board membership duties;
 
(B)          any excessive unauthorized absenteeism by the grantee;
 
(C)          any refusal by the grantee to obey the lawful orders of the Board or any other Person to whom the grantee reports;
 
(D)          any act or omission by the grantee that is or may be injurious to the Company or any Affiliate, whether monetarily, reputationally or otherwise;
 
(E)          any act by the grantee that is inconsistent with the best interests of the Company or any Affiliate;
 
(F)          the grantee’s gross negligence that is injurious to the Company or any Affiliate, whether monetarily, reputationally or otherwise;
 
(G)        the grantee’s material violation of any of the policies of the Company or an Affiliate, as applicable, including, without limitation, those policies relating to discrimination or sexual harassment;
 
(H)          the grantee’s material breach of his or her employment or service contract with the Company or any Affiliate;
 
(I)           the grantee’s unauthorized (1) removal from the premises of the Company or an Affiliate of any document (in any medium or form) relating to the Company or an Affiliate or the customers or clients of the Company or an Affiliate or (2) disclosure to any Person of any of the Company’s, or any Affiliate’s, confidential or proprietary information;
 
(J)           the grantee’s being convicted of, or entering a plea of guilty or nolo contendere to, any crime that constitutes a felony or involves moral turpitude; and
 
(K)          the grantee’s commission of any act involving dishonesty or fraud.
 
Any rights the Company or its Affiliates may have under the Plan in respect of the events giving rise to a termination or dismissal “for Cause” shall be in addition to any other rights the Company or its Affiliates may have under any other agreement with a grantee or at law or in equity.  Any determination of whether a grantee’s employment, consultancy/service relationship or Board membership is (or is deemed to have been) terminated “for Cause” shall be made by the Administrator.  If, subsequent to a grantee’s voluntary termination of employment or consultancy/service relationship or voluntarily resignation from the Board or involuntary termination of employment or consultancy/service relationship without Cause or removal from the Board other than “for Cause”, it is discovered that the grantee’s employment or consultancy/service relationship or Board membership could have been terminated “for Cause”, the Administrator may deem such grantee’s employment or consultancy/service relationship or Board membership to have been terminated “for Cause” upon such discovery and determination by the Administrator.
 
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(c)          “Code” shall mean the Internal Revenue Code of 1986, as amended.
 
(d)         Unless otherwise set forth in the applicable Award Agreement, “Disability” shall mean the grantee’s being unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or the grantee’s, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the grantee’s employer.  The existence of a Disability shall be determined by the Administrator.
 
(e)         “Equity Restructuring” shall mean a non-reciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the shares of Common Stock (or other securities of the Company) or the share price thereof and causes a change in the per share value of the shares underlying outstanding Awards.
 
(f)          “Exercise Price” shall mean (i) in the case of options, the price specified in the applicable Award Agreement as the price-per-share at which such share can be purchased pursuant to the option or (ii) in the case of stock appreciation rights, the price specified in the applicable Award Agreement as the reference price-per-share used to calculate the amount payable to the grantee.
 
(g)           The “Fair Market Value” of a share of Common Stock on any day shall be the closing price on the Nasdaq Global Market, or such other primary stock exchange upon which such shares are then listed, as reported for such day in The Wall Street Journal, or, if no such price is reported for such day, the average of the high bid and low asked price of Common Stock as reported for such day.  If no quotation is made for the applicable day, the Fair Market Value of a share of Common Stock on such day shall be determined in the manner set forth in the preceding sentence for the next preceding trading day.  Notwithstanding the foregoing, if there is no reported closing price or high bid/low asked price that satisfies the preceding sentences, or if otherwise deemed necessary or appropriate by the Administrator, the Fair Market Value of a share of Common Stock on any day shall be determined by such methods and procedures as shall be established from time to time by the Administrator.  The “Fair Market Value” of any property other than Common Stock shall be the fair market value of such property determined by such methods and procedures as shall be established from time to time by the Administrator.
 
(h)         “Person” shall mean any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental body or other entity of any kind.
 
(i)          “Repricing” shall mean (i) lowering the Exercise Price of an option or a stock appreciation right after it has been granted, (ii) the cancellation of an option or a stock appreciation right in exchange for cash or another Award when the Exercise Price exceeds the Fair Market Value of the underlying shares subject to the Award and (iii) any other action with respect to an option or a stock appreciation right that is treated as a repricing under (A) generally accepted accounting principles or (B) any applicable stock exchange rules.
 
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(j)          Unless otherwise set forth in the applicable Award Agreement, “Retirement” shall mean a grantee’s resignation of employment or consultancy/service relationship or dismissal from the Board, with the Company’s or its applicable Affiliate’s prior consent, on or after (i) his or her 65th birthday, (ii) the date on which he or she has attained age 60 and completed at least five years of service with the Company or one or more of its Affiliates (using any method of calculation the Administrator deems appropriate) or (iii) if approved by the Administrator, on or after his or her having completed at least 20 years of service with the Company or one or more of its Affiliates (using any method of calculation the Administrator deems appropriate).
 
(k)         “Subsidiary” shall mean any entity in which the Company, directly or indirectly, has a 50% or more equity interest.
 
ARTICLE II.
Awards Under The Plan
 
2.1.
Agreements Evidencing Awards
 
Each Award granted under the Plan shall be evidenced by a written certificate (“Award Agreement”), which shall contain such provisions as the Administrator may deem necessary or desirable and which may, but need not, require execution or acknowledgment by a grantee.  The Award shall be subject to all of the terms and provisions of the Plan and the applicable Award Agreement.
 
2.2.
Grant of Stock Options and Stock Appreciation Rights
 
(a)         Stock Option Grants.  The Administrator may grant non-qualified stock options and/or incentive stock options (collectively, “options”) to purchase shares of Common Stock from the Company to such Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan.  Except to the extent otherwise specifically provided in the applicable Award Agreement, no option will be treated as an “incentive stock option” for purposes of the Code.  Incentive stock options may be granted to employees of the Company and any “parent corporation” or “subsidiary corporation” (as such terms are defined in Section 424 of the Code) of the Company.  In the case of incentive stock options, the terms and conditions of such Awards shall be subject to such applicable rules as may be prescribed by Sections 421, 422 and 424 of the Code and any regulations related thereto, as may be amended from time to time.  If an option is intended to be an incentive stock option, and if for any reason such option (or any portion thereof) shall not qualify as an incentive stock option for purposes of Section 422 of the Code, then, to the extent of such non-qualification, such option (or portion thereof) shall be regarded as a non-qualified stock option appropriately granted under the Plan; provided that such option (or portion thereof) otherwise complies with the Plan’s requirements relating to option Awards.  It shall be the intent of the Administrator to not grant an Award in the form of stock options to any Key Person who is then subject to the requirements of Section 409A of the Code with respect to such Award if the Common Stock (as defined below) underlying such Award does not then qualify as “service recipient stock” for purposes of Section 409A.  Furthermore, it shall be the intent of the Administrator, in granting options to Key Persons who are subject to Section 409A and/or 457 of the Code, to structure such options so as to comply with the requirements of Section 409A and/or 457 of the Code, as applicable.
 
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(b)          Stock Appreciation Right Grants; Types of Stock Appreciation Rights.  The Administrator may grant stock appreciation rights to such Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan.  The terms of a stock appreciation right may provide that it shall be automatically exercised for a payment upon the happening of a specified event that is outside the control of the grantee and that it shall not be otherwise exercisable.  Stock appreciation rights may be granted in connection with all or any part of, or independently of, any option granted under the Plan.  It shall be the intent of the Administrator to not grant an Award in the form of stock appreciation rights to any Key Person (i) who is then subject to the requirements of Section 409A of the Code with respect to such Award if the Common Stock underlying such Award does not then qualify as “service recipient stock” for purposes of Section 409A or (ii) if such Award would create adverse tax consequences for such Key Person under Section 457A of the Code.
 
(c)          Nature of Stock Appreciation Rights.  The grantee of a stock appreciation right shall have the right, subject to the terms of the Plan and the applicable Award Agreement, to receive from the Company an amount equal to (i) the excess of the Fair Market Value of a share of Common Stock on the date of exercise of the stock appreciation right over the Exercise Price of the stock appreciation right, multiplied by (ii) the number of shares with respect to which the stock appreciation right is exercised.  Each Award Agreement with respect to a stock appreciation right shall set forth the Exercise Price of such Award and, unless otherwise specifically provided in the Award Agreement, the Exercise Price of a stock appreciation right shall equal the Fair Market Value of a share of Common Stock on the date of grant; provided that in no event may such Exercise Price be less than the greater of (A) the Fair Market Value of a share of Common Stock on the date of grant and (B) the par value of a share of Common Stock.  Payment upon exercise of a stock appreciation right shall be in cash or in shares of Common Stock (valued at their Fair Market Value on the date of exercise of the stock appreciation right) or any combination of both, all as the Administrator shall determine.  Repricing of stock appreciation rights granted under the Plan shall not be permitted (1) to the extent such action could cause adverse tax consequences to the grantee under Sections 409A or 457A of the Code or (2) without prior shareholder approval, to the extent such approval would be required to be obtained by the Company pursuant to the applicable rules of any applicable stock exchange on which the Common Stock is then listed, and any action that would be deemed to result in a Repricing of a stock appreciation right shall be deemed null and void if it would cause such adverse tax consequences or if any requisite shareholder approval related thereto is not obtained prior to the effective time of such action.  Upon the exercise of a stock appreciation right granted in connection with an option, the number of shares subject to the option shall be reduced by the number of shares with respect to which the stock appreciation right is exercised.  Upon the exercise of an option in connection with which a stock appreciation right has been granted, the number of shares subject to the stock appreciation right shall be reduced by the number of shares with respect to which the option is exercised.
 
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(d)          Option Exercise Price.  Each Award Agreement with respect to an option shall set forth the Exercise Price of such Award and, unless otherwise specifically provided in the Award Agreement, the Exercise Price of an option shall equal the Fair Market Value of a share of Common Stock on the date of grant; provided that in no event may such Exercise Price be less than the greater of (i) the Fair Market Value of a share of Common Stock on the date of grant and (ii) the par value of a share of Common Stock.  Repricing of options granted under the Plan shall not be permitted (1) to the extent such action could cause adverse tax consequences to the grantee under Sections 409A or 457A of the Code or (2) without prior shareholder approval, to the extent such approval would be required to be obtained by the Company pursuant to the applicable rules of any applicable stock exchange on which the Common Stock is then listed, and any action that would be deemed to result in a Repricing of an option shall be deemed null and void if it would cause such adverse tax consequences or if any requisite shareholder approval related thereto is not obtained prior to the effective time of such action.
 
2.3.
Exercise of Options and Stock Appreciation Rights
 
Subject to the other provisions of this Article II and the Plan, each option and stock appreciation right granted under the Plan shall be exercisable as follows:
 
(a)          Timing and Extent of Exercise.  Options and stock appreciation rights shall be exercisable at such times and under such conditions as determined by the Administrator and set forth in the corresponding Award Agreement, but in no event shall any portion of such Award be exercisable subsequent to the tenth anniversary of the date on which such Award was granted.  Unless the applicable Award Agreement otherwise provides, an option or stock appreciation right may be exercised from time to time as to all or part of the shares as to which such Award is then exercisable.
 
(b)          Notice of Exercise.  An option or stock appreciation right shall be exercised by the filing of a written notice with the Company or the Company’s designated exchange agent (the “Exchange Agent”), on such form and in such manner as the Administrator shall prescribe.
 
(c)          Payment of Exercise Price.  Any written notice of exercise of an option shall be accompanied by payment for the shares being purchased.  Such payment shall be made: (i) by certified or official bank check (or the equivalent thereof acceptable to the Company or its Exchange Agent) for the full option Exercise Price; (ii) with the consent of the Administrator, which consent shall be given or withheld in the sole discretion of the Administrator, by delivery of shares of Common Stock having a Fair Market Value (determined as of the exercise date) equal to all or part of the option Exercise Price and a certified or official bank check (or the equivalent thereof acceptable to the Company or its Exchange Agent) for any remaining portion of the full option Exercise Price; or (iii) at the sole discretion of the Administrator and to the extent permitted by law, by such other provision, consistent with the terms of the Plan, as the Administrator may from time to time prescribe (whether directly or indirectly through the Exchange Agent), or by any combination of the foregoing payment methods.
 
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(d)          Delivery of Certificates Upon Exercise.  Subject to Sections 3.2, 3.4 and 3.13, promptly after receiving payment of the full option Exercise Price, or after receiving notice of the exercise of a stock appreciation right for which the Administrator determines payment will be made partly or entirely in shares, the Company or its Exchange Agent shall (i) deliver to the grantee, or to such other Person as may then have the right to exercise the Award, a certificate or certificates for the shares of Common Stock for which the Award has been exercised or, in the case of stock appreciation rights, for which the Administrator determines will be made in shares or (ii) establish an account evidencing ownership of the stock in uncertificated form.  If the method of payment employed upon an option exercise so requires, and if applicable law permits, an optionee may direct the Company or its Exchange Agent, as the case may be, to deliver the stock certificate(s) to the optionee’s stockbroker.
 
(e)          No Stockholder Rights.  No grantee of an option or stock appreciation right (or other Person having the right to exercise such Award) shall have any of the rights of a stockholder of the Company with respect to shares subject to such Award until the issuance of a stock certificate to such Person for such shares.  Except as otherwise provided in Section 1.5(c), no adjustment shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) for which the record date is prior to the date such stock certificate is issued.
 
2.4.
Termination of Employment; Death Subsequent to a Termination of Employment
 
(a)         General Rule.  Except to the extent otherwise provided in paragraphs (b), (c), (d), (e) or (f) of this Section 2.4 or Section 3.5(b)(iii), a grantee who incurs a termination of employment or consultancy/service relationship or dismissal from the Board may exercise any outstanding option or stock appreciation right on the following terms and conditions: (i) exercise may be made only to the extent that the grantee was entitled to exercise the Award on the date of termination of employment or consultancy/service relationship or dismissal from the Board, as applicable; and (ii) exercise must occur within three months after termination of employment or consultancy/service relationship or dismissal from the Board but in no event after the original expiration date of the Award.
 
(b)        Dismissal “for Cause”.  If a grantee incurs a termination of employment or consultancy/service relationship or dismissal from the Board “for Cause”, all options and stock appreciation rights not theretofore exercised shall immediately terminate upon the grantee’s termination of employment or consultancy/service relationship or dismissal from the Board.
 
(c)         Retirement.  If a grantee incurs a termination of employment or consultancy/service relationship or dismissal from the Board as the result of his or her Retirement, then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such Retirement, remain exercisable for a period of three years after such Retirement; provided that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award.
 
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(d)       Disability.  If a grantee incurs a termination of employment or consultancy/service relationship or a dismissal from the Board by reason of a Disability, then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such termination or dismissal, remain exercisable for a period of one year after such termination or dismissal; provided that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award.
 
(e)          Death.
 
(i)            Termination of Employment as a Result of Grantee’s Death.  If a grantee incurs a termination of employment or consultancy/service relationship or leaves the Board as the result of his or her death, then any outstanding option or stock appreciation right shall, to the extent exercisable at the time of such death, remain exercisable for a period of one year after such death; provided that in no event may such option or stock appreciation right be exercised following the original expiration date of the Award.
 
(ii)          Restrictions on Exercise Following Death.  Any such exercise of an Award following a grantee’s death shall be made only by the grantee’s executor or administrator or other duly appointed representative reasonably acceptable to the Administrator, unless the grantee’s will specifically disposes of such Award, in which case such exercise shall be made only by the recipient of such specific disposition.  If a grantee’s personal representative or the recipient of a specific disposition under the grantee’s will shall be entitled to exercise any Award pursuant to the preceding sentence, such representative or recipient shall be bound by all the terms and conditions of the Plan and the applicable Award Agreement which would have applied to the grantee.
 
(f)           Administrator Discretion.  The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.4.
 
2.5.
Transferability of Options and Stock Appreciation Rights
 
Except as otherwise specifically provided in this Plan or the applicable Award Agreement evidencing an option or stock appreciation right, during the lifetime of a grantee, each such Award granted to a grantee shall be exercisable only by the grantee, and no such Award may be sold, assigned, transferred, pledged or otherwise encumbered or disposed of other than by will or by the laws of descent and distribution.  The Administrator may, in any applicable Award Agreement evidencing an option or stock appreciation right, permit a grantee to transfer all or some of the options or stock appreciation rights to (a) the grantee’s spouse, children or grandchildren (“Immediate Family Members”), (b) a trust or trusts for the exclusive benefit of such Immediate Family Members or (c) other parties approved by the Administrator.  Following any such transfer, any transferred options and stock appreciation rights shall continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer.
 
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2.6.
Grant of Restricted Stock
 
(a)         Restricted Stock Grants.  The Administrator may grant restricted shares of Common Stock to such Key Persons, in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions as the Administrator shall determine, subject to the provisions of the Plan.  A grantee of a restricted stock Award shall have no rights with respect to such Award unless such grantee accepts the Award within such period as the Administrator shall specify by accepting delivery of a restricted stock Award Agreement in such form as the Administrator shall determine and, in the event the restricted shares are newly issued by the Company, makes payment to the Company or its Exchange Agent by certified or official bank check (or the equivalent thereof acceptable to the Administrator) in an amount at least equal to the par value of the shares covered by the Award (which payment may be waived at the time of grant of the restricted stock Award to the extent the restricted shares granted hereunder are otherwise deemed to be fully paid and non-assessable).
 
(b)          Issuance of Stock Certificate.  Promptly after a grantee accepts a restricted stock Award in accordance with Section 2.6(a), subject to Sections 3.2, 3.4 and 3.13, the Company or its Exchange Agent shall issue to the grantee a stock certificate or stock certificates for the shares of Common Stock covered by the Award or shall establish an account evidencing ownership of the stock in uncertificated form.  Upon the issuance of such stock certificates, or establishment of such account, the grantee shall have the rights of a stockholder with respect to the restricted stock, subject to: (i) the nontransferability restrictions and forfeiture provisions described in the Plan (including paragraphs (d) and (e) of this Section 2.6); (ii) in the Administrator’s sole discretion, a requirement, as set forth in the Award Agreement, that any dividends paid on such shares shall be held in escrow and, unless otherwise determined by the Administrator, shall remain forfeitable until all restrictions on such shares have lapsed; and (iii) any other restrictions and conditions contained in the applicable Award Agreement.
 
(c)          Custody of Stock Certificate.  Unless the Administrator shall otherwise determine, any stock certificates issued evidencing shares of restricted stock shall remain in the possession of the Company until such shares are free of any restrictions specified in the applicable Award Agreement.  The Administrator may direct that such stock certificates bear a legend setting forth the applicable restrictions on transferability.
 
(d)          Nontransferability.  Except as otherwise specifically provided in this Plan or the applicable Award Agreement evidencing a restricted stock Award, shares of restricted stock granted under the Plan may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of prior to the lapsing of all restrictions thereon.  The Administrator at the time of grant shall specify the date or dates (which may depend upon or be related to the attainment of performance goals and other conditions) on which the nontransferability of the restricted stock shall lapse.  The Administrator may, in any applicable Award Agreement evidencing a restricted stock Award, permit a grantee to transfer all or some of the shares of restricted stock prior to the lapsing of all restrictions thereon to (i) the grantee’s Immediate Family Members, (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members or (iii) other parties approved by the Administrator.  Following any permitted transfer prior to the lapsing of all restrictions on the restricted stock, any transferred shares of restricted stock shall continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer.
 
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(e)          Consequence of Termination of Employment.  Unless otherwise set forth in the applicable Award Agreement, (i) a grantee’s termination of employment or consultancy/service relationship or dismissal from the Board for any reason other than death, Disability or Retirement shall cause the immediate forfeiture of all shares of restricted stock that have not yet vested as of the date of such termination of employment or consultancy/service relationship or dismissal from the Board and (ii) if a grantee incurs a termination of employment or consultancy/service relationship or dismissal from the Board as the result of his or her death, Disability or Retirement, all shares of restricted stock that have not yet vested as of the date of such termination or departure from the Board shall immediately vest as of such date.  Unless otherwise determined by the Administrator, all dividends paid on shares forfeited under this Section 2.6(e) that have not theretofore been directly remitted to the grantee shall also be forfeited, whether by termination of any escrow arrangement under which such dividends are held or otherwise.  The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.6(e).
 
2.7.
Grant of Restricted Stock Units
 
(a)          Restricted Stock Unit Grants.  The Administrator may grant restricted stock units to such Key Persons, and in such amounts and subject to such vesting and forfeiture provisions and other terms and conditions, as the Administrator shall determine, subject to the provisions of the Plan.  A restricted stock unit granted under the Plan shall confer upon the grantee a right to receive from the Company, conditioned upon the occurrence of such vesting event as shall be determined by the Administrator and specified in the Award Agreement, the number of such grantee’s restricted stock units that vest upon the occurrence of such vesting event multiplied by the Fair Market Value of a share of Common Stock on the date of vesting.  Payment upon vesting of a restricted stock unit shall be in cash or in shares of Common Stock (valued at their Fair Market Value on the date of vesting) or both, all as the Administrator shall determine, and such payments shall be made to the grantee at such time as provided in the Award Agreement, which the Administrator shall intend to be (i) if Section 409A of the Code is applicable to the grantee, within the period required by Section 409A such that it qualifies as a “short-term deferral” pursuant to Section 409A and the Treasury Regulations issued thereunder, unless the Administrator shall provide for deferral of the Award intended to comply with Section 409A, (ii) if Section 457A of the Code is applicable to the grantee, within the period required by Section 457A(d)(3)(B) such that it qualifies for the exemption thereunder, or (iii) if Sections 409A and 457A of the Code are not applicable to the grantee, at such time as determined by the Administrator.
 
(b)          Dividend Equivalents.  The Administrator may include in any Award Agreement with respect to a restricted stock unit a dividend equivalent right entitling the grantee to receive amounts equal to the ordinary dividends that would be paid, during the time such Award is outstanding and unvested, on the shares of Common Stock underlying such Award if such shares were then outstanding.  In the event such a provision is included in a Award Agreement, the Administrator shall determine whether such payments shall be (i) paid to the holder of the Award, as specified in the Award Agreement, either (A) at the same time as the underlying dividends are paid, regardless of the fact that the restricted stock unit has not theretofore vested, or (B) at the time at which the Award’s vesting event occurs, conditioned upon the occurrence of the vesting event, (ii) made in cash, shares of Common Stock or other property and (iii) subject to such other vesting and forfeiture provisions and other terms and conditions as the Administrator shall deem appropriate and as shall be set forth in the Award Agreement.
 
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(c)       Consequence of Termination of Employment.  Unless otherwise set forth in the applicable Award Agreement, (i) a grantee’s termination of employment or consultancy/service relationship or dismissal from the Board for any reason other than death, Disability or Retirement shall cause the immediate forfeiture of all restricted stock units that have not yet vested as of the date of such termination of employment or consultancy/service relationship or dismissal from the Board and (ii) if a grantee incurs a termination of employment or consultancy/service relationship or dismissal from the Board as the result of his or her death, Disability or Retirement, all restricted stock units that have not yet vested as of the date of such termination or departure from the Board shall immediately vest as of such date.  Unless otherwise determined by the Administrator, any dividend equivalent rights on any restricted stock units forfeited under this Section 2.7(c) that have not theretofore been directly remitted to the grantee shall also be forfeited, whether by termination of any escrow arrangement under which such dividends are held or otherwise.  The Administrator may, in writing, waive or modify the application of the foregoing provisions of this Section 2.7(c).
 
(d)          No Stockholder Rights.  No grantee of a restricted stock unit shall have any of the rights of a stockholder of the Company with respect to such Award unless and until a stock certificate is issued with respect to such Award upon the vesting of such Award (it being understood that the Administrator shall determine whether to pay any vested restricted stock unit in the form of cash or Company shares or both), which issuance shall be subject to Sections 3.2, 3.4 and 3.13.  Except as otherwise provided in Section 1.5(c), no adjustment to any restricted stock unit shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities or other property) for which the record date is prior to the date such stock certificate, if any, is issued.
 
(e)          Transferability of Restricted Stock Units.  Except as otherwise provided in an applicable Award Agreement evidencing a restricted stock unit, no restricted stock unit granted under the Plan shall be assignable or transferable.  The Administrator may, in any applicable Award Agreement evidencing a restricted stock unit, permit a grantee to transfer all or some of the restricted stock units to (i) the grantee’s Immediate Family Members, (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members or (iii) other parties approved by the Administrator.  Following any such transfer, any transferred restricted stock units shall continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer.
 
2.8.
Grant of Unrestricted Stock
 
The Administrator may grant (or sell at a purchase price at least equal to par value) shares of Common Stock free of restrictions under the Plan to such Key Persons and in such amounts and subject to such forfeiture provisions as the Administrator shall determine.  Shares may be thus granted or sold in respect of past services or other valid consideration.
 
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ARTICLE III.
Miscellaneous
 
3.1.
Amendment of the Plan; Modification of Awards
 
(a)         Amendment of the Plan.  The Board may from time to time suspend, discontinue, revise or amend the Plan in any respect whatsoever, except that no such amendment shall materially impair any rights or materially increase any obligations under any Award theretofore made under the Plan without the consent of the grantee (or, upon the grantee’s death, the Person having the right to exercise the Award).  For purposes of this Section 3.1, any action of the Board or the Administrator that in any way alters or affects the tax treatment of any Award shall not be considered to materially impair any rights of any grantee.
 
(b)       Stockholder Approval Requirement.  If (1) required by applicable rules or regulations of a national securities exchange or the SEC, the Company shall obtain stockholder approval with respect to any amendment to the Plan that (i) expands the types of Awards available under the Plan, (ii) materially increases the aggregate number of shares which may be issued under the Plan, except as permitted pursuant to Section 1.5(c), (iii) materially increases the benefits to participants under the Plan, including any material change to (A) permit, or that has the effect of, a Repricing of any outstanding Award, (B) reduce the price at which shares or options to purchase shares may be offered or (C) extend the duration of the Plan, or (iv) materially expands the class of Persons eligible to receive Awards under the Plan, or (2) the Administrator determines that it desires to retain the ability to grant incentive stock options under the Plan thereafter, the Company shall obtain stockholder approval with respect to any amendment to the Plan that (i) increases the number of shares that may be issued under the Plan or the individual limit set forth under Section 1.5(d) of the Plan (except, in each case, as permitted pursuant to Section 1.5(c)) or (ii) expands the class of Persons eligible to receive incentive stock options under the Plan.
 
(c)        Modification of Awards.  The Administrator may cancel any Award under the Plan.  The Administrator also may amend any outstanding Award Agreement, including, without limitation, by amendment which would: (i) accelerate the time or times at which the Award becomes unrestricted, vested or may be exercised; (ii) waive or amend any goals, restrictions or conditions set forth in the Award Agreement; or (iii) waive or amend the operation of Sections 2.4, 2.6(e) or 2.7(c) with respect to the termination of the Award upon termination of employment or consultancy/service relationship or dismissal from the Board; provided, however, that no such amendment shall be made without shareholder approval if such approval is necessary to comply with any tax or regulatory requirement applicable to the Award.  However, any such cancellation or amendment (other than an amendment pursuant to Section 1.5, 3.5 or 3.16) that materially impairs the rights or materially increases the obligations of a grantee under an outstanding Award shall be made only with the consent of the grantee (or, upon the grantee’s death, the Person having the right to exercise the Award).  In making any modification to an Award (e.g., an amendment resulting in a direct or indirect reduction in the Exercise Price or a waiver or modification under Section 2.4(f), 2.6(e) or 2.7(c)), the Administrator may consider the implications, if any, of such modification under the Code with respect to incentive stock options granted under the Plan and/or Sections 409A and 457A of the Code with respect to Awards granted under the Plan to individuals subject to such provisions of the Code.
 
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3.2.
Consent Requirement
 
(a)           No Plan Action Without Required Consent.  If the Administrator shall at any time determine that any Consent (as defined below) is necessary or desirable as a condition of, or in connection with, the granting of any Award under the Plan, the issuance or purchase of shares or other rights thereunder, or the taking of any other action thereunder (each such action being hereinafter referred to as a “Plan Action”), then such Plan Action shall not be taken, in whole or in part, unless and until such Consent shall have been effected or obtained to the full satisfaction of the Administrator.
 
(b)          Consent Defined.  The term “Consent” as used herein with respect to any Plan Action means (i) any and all listings, registrations or qualifications in respect thereof upon any securities exchange or under any federal, state or local law, rule or regulation, (ii) any and all written agreements and representations by the grantee with respect to the disposition of shares, or with respect to any other matter, which the Administrator shall deem necessary or desirable to comply with the terms of any such listing, registration or qualification or to obtain an exemption from the requirement that any such listing, qualification or registration be made and (iii) any and all consents, clearances and approvals in respect of a Plan Action by any governmental or other regulatory bodies.
 
3.3.
Nonassignability
 
Except as provided in Sections 2.4(e), 2.5, 2.6(d) or 2.7(e), (a) no Award or right granted to any Person under the Plan or under any Award Agreement shall be assignable or transferable other than by will or by the laws of descent and distribution and (b) all rights granted under the Plan or any Award Agreement shall be exercisable during the life of the grantee only by the grantee or the grantee’s legal representative or the grantee’s permissible successors or assigns (as authorized and determined by the Administrator).  All terms and conditions of the Plan and the applicable Award Agreements will be binding upon any permitted successors or assigns.
 
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3.4.
Taxes
 
(a)           Withholding.  A grantee or other Award holder under the Plan shall be required to pay, in cash, to the Company, and the Company and its Affiliates shall have the right and are hereby authorized to withhold from any Award, from any payment due or transfer made under any Award or under the Plan or from any compensation or other amount owing to such grantee or other Award holder, the amount of any applicable withholding taxes in respect of an Award, its grant, its exercise, its vesting, or any payment or transfer under an Award or under the Plan, and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for payment of such taxes.  Whenever shares of Common Stock are to be delivered pursuant to an Award under the Plan, with the approval of the Administrator, which the Administrator shall have sole discretion whether or not to give, the grantee may satisfy the foregoing condition by electing to have the Company withhold from delivery shares having a value equal to the amount of minimum tax required to be withheld.  Such shares shall be valued at their Fair Market Value as of the date on which the amount of tax to be withheld is determined.  Fractional share amounts shall be settled in cash.  Such a withholding election may be made with respect to all or any portion of the shares to be delivered pursuant to an Award as may be approved by the Administrator in its sole discretion.
 
(b)         Liability for Taxes.  Grantees and holders of Awards are solely responsible and liable for the satisfaction of all taxes and penalties that may arise in connection with Awards (including, without limitation, any taxes arising under Sections 409A and 457A of the Code) and the Company shall not have any obligation to indemnify or otherwise hold any such Person harmless from any or all of such taxes.  The Administrator shall have the discretion to organize any deferral program, to require deferral election forms, and to grant or, notwithstanding anything to the contrary in the Plan or any Award Agreement, to unilaterally modify any Award in a manner that (i) conforms with the requirements of Sections 409A and 457A of the Code (to the extent applicable), (ii) voids any participant election to the extent it would violate Sections 409A or 457A of the Code (to the extent applicable) and (iii) for any distribution event or election that could be expected to violate Section 409A of the Code, make the distribution only upon the earliest of the first to occur of a “permissible distribution event” within the meaning of Section 409A of the Code or a distribution event that the participant elects in accordance with Section 409A of the Code.  The Administrator shall have the sole discretion to interpret the requirements of the Code, including, without limitation, Sections 409A and 457A, for purposes of the Plan and all Awards.
 
3.5.
Change in Control
 
(a)          Change in Control Defined.  Unless otherwise set forth in the applicable Award Agreement, for purposes of the Plan, “Change in Control” shall mean the occurrence of any of the following:
 
 
19
(i) any “person” (as defined in Section 13(d)(3) of the 1934 Act), company or other entity (other than (A) the Company, (B) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or an Affiliate or (C) any company or other entity owned, directly or indirectly, by the holders of the voting stock of the Company in substantially the same proportions as their ownership of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company directly or indirectly “controls” (as defined in Rule 12b-2 under the 1934 Act)) acquires “beneficial ownership” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company; (ii) the sale of all or substantially all the Company’s assets in one or more related transactions to any “person” (as defined in Section 13(d)(3) of the 1934 Act), company or other entity, other than such a sale (A) to a Subsidiary which does not involve a material change in the equity holdings of the Company, (B) to an entity which has acquired all or substantially all the Company’s assets (any such entity described in clause (A) or (B), the “Acquiring Entity”) if, immediately following such sale, 50% or more of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Acquiring Entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Acquiring Entity) is beneficially owned by the holders of the voting stock of the Company, and such voting power among the persons who were holders of the voting stock of the Company immediately prior to such sale is, immediately following such sale, held in substantially the same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such sale;
 
(iii)        any merger, consolidation, reorganization or similar event of the Company or any Subsidiary as a result of which the holders of the voting stock of the Company immediately prior to such merger, consolidation, reorganization or similar event do not directly or indirectly hold 50% or more of the aggregate voting power of the capital stock of the surviving entity ordinarily entitled to elect directors of the surviving entity (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the aggregate voting power of the capital stock ordinarily entitled to elect directors of the surviving entity) and such voting power among the persons who were holders of the voting stock of the Company immediately prior to such sale is, immediately following such sale, held in substantially the same proportions as the aggregate voting power of the capital stock ordinarily entitled to elect directors of the Company immediately prior to such sale;
 
(iv)          the approval by the Company’s stockholders of a plan of complete liquidation or dissolution of the Company; or
 
(v)           during any period of 12 consecutive calendar months, individuals:
 

 (A)
who were directors of the Company on the first day of such period, or
 

 (B)
whose election or nomination for election to the Board was recommended or approved by at least a majority of the directors then still in office who were directors of the Company on the first day of such period, or whose election or nomination for election were so approved,
 
shall cease to constitute a majority of the Board.
 
Notwithstanding the foregoing, unless otherwise set forth in the applicable Award Agreement, for each Award subject to Section 409A of the Code, a Change in Control shall be deemed to have occurred under this Plan with respect to such Award only if a change in the ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company shall also be deemed to have occurred under Section 409A of the Code, provided that such limitation shall apply to such Award only to the extent necessary to avoid adverse tax effects under Section 409A of the Code.
 
20
(b)          Effect of a Change in Control.  Unless the Administrator provides otherwise in an Award Agreement, upon the occurrence of a Change in Control:
 
(i)           notwithstanding any other provision of this Plan, any Award then outstanding shall become fully vested and any restriction and forfeiture provisions thereon imposed pursuant to the Plan and the Award Agreement shall lapse and any Award in the form of an option or stock appreciation right shall be immediately exercisable;
 
(ii)           to the extent permitted by law and not otherwise limited by the terms of the Plan, the Administrator may amend any Award Agreement in such manner as it deems appropriate;
 
(iii)         a grantee who incurs a termination of employment or consultancy/service relationship or dismissal from the Board for any reason, other than a termination or dismissal “for Cause”, concurrent with or within one year following the Change in Control may exercise any outstanding option or stock appreciation right, but only to the extent that the grantee was entitled to exercise the Award on the date of his or her termination of employment or consultancy/service relationship or dismissal from the Board, until the earlier of (A) the original expiration date of the Award and (B) the later of (x) the date provided for under the terms of Section 2.4 without reference to this Section 3.5(b)(iii) and (y) the first anniversary of the grantee’s termination of employment or consultancy/service relationship or dismissal from the Board.
 
(c)          Miscellaneous.  Whenever deemed appropriate by the Administrator, any action referred to in paragraph (b)(ii) of this Section 3.5 may be made conditional upon the consummation of the applicable Change in Control transaction.  For purposes of the Plan and any Award Agreement granted hereunder, the term “Company” shall include any successor to Seanergy Maritime Holdings Corporation.
 
3.6.
Operation and Conduct of Business
 
Nothing in the Plan or any Award Agreement shall be construed as limiting or preventing the Company or any Affiliate from taking any action with respect to the operation and conduct of their business that they deem appropriate or in their best interests, including any or all adjustments, recapitalizations, reorganizations, exchanges or other changes in the capital structure of the Company or any Affiliate, any merger or consolidation of the Company or any Affiliate, any issuance of Company shares or other securities or subscription rights, any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or other securities or rights thereof, any dissolution or liquidation of the Company or any Affiliate, any sale or transfer of all or any part of the assets or business of the Company or any Affiliate, or any other corporate act or proceeding, whether of a similar character or otherwise.
 
21
3.7.
No Rights to Awards
 
No Key Person or other Person shall have any claim to be granted any Award under the Plan.
 
3.8.
Right of Discharge Reserved
 
Nothing in the Plan or in any Award Agreement shall confer upon any grantee the right to continue his or her employment with the Company or any Affiliate, his or her consultancy/service relationship with the Company or any Affiliate, or his or her position as a director of the Company or any Affiliate, or affect any right that the Company or any Affiliate may have to terminate such employment or consultancy/service relationship or service as a director.
 
3.9.
Non-Uniform Determinations
 
The Administrator’s determinations and the treatment of Key Persons and grantees and their beneficiaries under the Plan need not be uniform and may be made and determined by the Administrator selectively among Persons who receive, or who are eligible to receive, Awards under the Plan (whether or not such Persons are similarly situated).  Without limiting the generality of the foregoing, the Administrator shall be entitled, among other things, to make non-uniform and selective determinations, and to enter into non-uniform and selective Award Agreements, as to (a) the Persons to receive Awards under the Plan, (b) the types of Awards granted under the Plan, (c) the number of shares to be covered by, or with respect to which payments, rights or other matters are to be calculated with respect to, Awards and (d) the terms and conditions of Awards.
 
3.10.
Other Payments or Awards
 
Nothing contained in the Plan shall be deemed in any way to limit or restrict the Company from making any award or payment to any Person under any other plan, arrangement or understanding, whether now existing or hereafter in effect.
 
3.11.
Headings
 
Any section, subsection, paragraph or other subdivision headings contained herein are for the purpose of convenience only and are not intended to expand, limit or otherwise define the contents of such subdivisions.
 
3.12.
Effective Date and Term of Plan
 
(a)         Adoption; Stockholder Approval.  The Plan was adopted by the Board on January 12, 2011.  The Board may, but need not, make the granting of any Awards under the Plan subject to the approval of the Company’s stockholders.
 
(b)         Termination of Plan.  The Board may terminate the Plan at any time.  All Awards made under the Plan prior to its termination shall remain in effect until such Awards have been satisfied or terminated in accordance with the terms and provisions of the Plan and the applicable Award Agreements.  No Awards may be granted under the Plan following the tenth anniversary of the date on which the Plan was adopted by the Board.
 
22
3.13.
Restriction on Issuance of Stock Pursuant to Awards
 
The Company shall not permit any shares of Common Stock to be issued pursuant to Awards granted under the Plan unless such shares of Common Stock are fully paid and non-assessable under applicable law.  Notwithstanding anything to the contrary in the Plan or any Award Agreement, at the time of the exercise of any Award, at the time of vesting of any Award, at the time of payment of shares of Common Stock in exchange for, or in cancellation of, any Award, or at the time of grant of any unrestricted shares under the Plan, the Company and the Administrator may, if either shall deem it necessary or advisable for any reason, require the holder of an Award (a) to represent in writing to the Company that it is the Award holder’s then-intention to acquire the shares with respect to which the Award is granted for investment and not with a view to the distribution thereof or (b) to postpone the date of exercise until such time as the Company has available for delivery to the Award holder a prospectus meeting the requirements of all applicable securities laws; and no shares shall be issued or transferred in connection with any Award unless and until all legal requirements applicable to the issuance or transfer of such shares have been complied with to the satisfaction of the Company and the Administrator.  The Company and the Administrator shall have the right to condition any issuance of shares to any Award holder hereunder on such Person’s undertaking in writing to comply with such restrictions on the subsequent transfer of such shares as the Company or the Administrator shall deem necessary or advisable as a result of any applicable law, regulation or official interpretation thereof, and all share certificates delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Company or the Administrator may deem advisable under the Plan, the applicable Award Agreement or the rules, regulations and other requirements of the SEC, any stock exchange upon which such shares are listed, and any applicable securities or other laws, and certificates representing such shares may contain a legend to reflect any such restrictions.  The Administrator may refuse to issue or transfer any shares or other consideration under an Award if it determines that the issuance or transfer of such shares or other consideration might violate any applicable law or regulation or entitle the Company to recover the same under Section 16(b) of the 1934 Act, and any payment tendered to the Company by a grantee or other Award holder in connection with the exercise of such Award shall be promptly refunded to the relevant grantee or other Award holder.  Without limiting the generality of the foregoing, no Award granted under the Plan shall be construed as an offer to sell securities of the Company, and no such offer shall be outstanding, unless and until the Administrator has determined that any such offer, if made, would be in compliance with all applicable requirements of any applicable securities laws.
 
3.14.
Requirement of Notification of Election Under Section 83(b) of the Code or Upon Disqualifying Disposition Under Section 421(b) of the Code
 
(a)          Notification of Election Under Section 83(b) of the Code.  If an Award recipient, in connection with the acquisition of Company shares under the Plan, makes an election under Section 83(b) of the Code (to include in gross income in the year of transfer the amounts specified in Section 83(b) of the Code), the grantee shall notify the Administrator of such election within ten days of filing notice of the election with the U.S. Internal Revenue Service, in addition to any filing and notification required pursuant to regulations issued under Section 83(b) of the Code.
 
23
(b)          Notification of Disqualifying Disposition of Incentive Stock Options.  If an Award recipient shall make any disposition of Company shares delivered pursuant to the exercise of an incentive stock option under the circumstances described in Section 421(b) of the Code (relating to certain disqualifying dispositions) or any successor provision of the Code, the grantee shall notify the Company of such disposition within ten days thereof.
 
3.15.
Severability
 
If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Administrator, such provision shall be construed or deemed amended to conform to the applicable laws or, if it cannot be construed or deemed amended without, in the determination of the Administrator, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
 
3.16.
Sections 409A and 457A
 
To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Sections 409A and 457A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder.  Notwithstanding any provision of the Plan or any applicable Award Agreement to the contrary, in the event that the Administrator determines that any Award may be subject to Section 409A or 457A of the Code, the Administrator may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (i) exempt the Plan and Award from Sections 409A and 457A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (ii) comply with the requirements of Sections 409A and 457A of the Code and related Department of Treasury guidance and thereby avoid the application of penalty taxes under Sections 409A and 457A of the Code.
 
3.17.
Forfeiture; Clawback
 
The Administrator may, in its sole discretion, specify in the applicable Award Agreement that any realized gain with respect to options or stock appreciation rights and any realized value with respect to other Awards shall be subject to forfeiture or clawback, in the event of (a) a grantee’s breach of any non-competition, non-solicitation, confidentiality or other restrictive covenants with respect to the Company or any Affiliate or (ii) a financial restatement that reduces the amount of bonus or incentive compensation previously awarded to a grantee that would have been earned had results been properly reported.
 
24
3.18.
No Trust or Fund Created
 
Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and an Award recipient or any other Person.  To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or its Affiliate.
 
3.19.
No Fractional Shares
 
No fractional shares shall be issued or delivered pursuant to the Plan or any Award, and the Administrator shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional shares or whether such fractional shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.
 
3.20.
Governing Law
 
The Plan will be construed and administered in accordance with the laws of the State of New York, without giving effect to principles of conflict of laws.

 
25
EX-4.3 4 ef20015287_ex4-3.htm EXHIBIT 4.3
Exhibit 4.3

V.SHIPS SHIP MANAGEMENT AGREEMENT
Version Number
:          01-2020

Page Number
:          1 of 30
Doc:           VSMA
Name of Vessel
:

[Name of Owner]

and

V.SHIPS GREECE Ltd.

SHIP TECHNICAL MANAGEMENT AGREEMENT

V.SHIPS SHIP MANAGEMENT AGREEMENT
Version Number
:          01-2020

Page Number
:          2 of 30
Doc:           VSMA
Name of Vessel
:
SHIP TECHNICAL MANAGEMENT AGREEMENT

INDEX

PART
SUBJECT MATTER
PAGE NO.


 
Part I
Vessel Details
4
Part II
Terms of Agreement
  

 
1.
Definitions & Interpretation
6
  
 
2.
Appointment of Managers
6
  
 
3.
Basic Services
6
  
 
3.1
Crewing
6
  
 
3.2
Technical Management
8
  
 
3.3
Purchasing
9
  
 
 
 
3.5
Accounting and Budgeting
10
  
 
3.6
Operations
10
  
 
3.7
Information System Software
10
  
 
3.8
Shipboard Oil Pollution Emergency Plan
11
  
 
3.9
OPA
11
  
 
3.10
Assistance with Sale of Vessel
 12  
 
3.11
Vessel trading in high risk areas
 12  
 
4.
Other Services
12
  
 
5.
Managers’ Obligations
12
  
 
6.
Owners’ Obligations
 13  
 
7.
Documentation
13
  
 
8.
Management Fee
14
  
 
9.
Payments and Management of Funds
15
  
 
10.
Managers’ Right to Sub-Contract
16
  
 
11.
Responsibilities
16
  
 
11.1
Force Majeure
16
  
 
11.2
Liability to Owners
16
  
 
11.3
Indemnity – General
16
  
 
11.4
Indemnity – Tax
17
  
 
11.5
Himalaya
17
  
 
 
 
13.
Claims/Disputes
17
  
 
14.
Auditing, Records
18
  
 
15.
Inspection of Vessel
18
  
 
16.
Compliance with Laws & Regulations
18
  
 
17.
Duration of the Agreement
 19  
 
17.1
Termination by Notice
 19  
 
17.2
Termination by Default – Owners
 19  
 
17.3
Termination by Default – Managers
19
  
 
17.4
Liquidation
19
  
 
17.5
Extraordinary Termination
 20  
 
18.
Confidentiality
20
  
 
19.
Suspension of Services
20
  
 
20.
Law and Arbitration
20
  
 
21.
Amendments to Agreement
 21
  

V.SHIPS SHIP MANAGEMENT AGREEMENT
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Name of Vessel
:
 
22.
Time Limit for Claims
 21  
 
23.
Condition of Vessel
 21  
 
24.
Use of Associated Companies
21
  
 
25.
Notices
21
  
 
26.
Staff Loyalty
21
  
 
27.
Entire Agreement
 22  
 
28.
Partial Validity
 22  
 
29.
Non Waiver
 22  

Part III
Other Services
23-24
Part IV
Fee Schedule
 26
Part V
Fleet Details
 27
Part VI
Initial Budget
28-30

V.SHIPS SHIP MANAGEMENT AGREEMENT
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SHIP TECHNICAL MANAGEMENT AGREEMENT - PART I

1.  Vessel Details
  
Name:          
GT/NT:
Flag:
Class:
Type:          BULK CARRIER
Year Built:
      IMO number: 
 
   
2.   Owners
Name:          [Name of Owner]
 
2.1 Owners’ Registered Address (where the company is registered):
 
Country of Incorporation:
 
2.2 Owners’ business establishment address (head office and principal place of business):
 
Telephone Number:                                                                 Fax Number:
Contact Name:                                                                         Position:

  Email address:

2.3 Owners’ VAT registration number if business establishment address at 2.2 is in the European Union:
 
3.   Managers
Name:                             V.SHIPS GREECE Ltd.
Registered Office:           3rd Floor, Par-La-Ville Place, 14 Par-La-Ville Road, Hamilton HM 08, Bermuda
Country of Incorporation:  Bermuda

     Principal place of business: Piliou 1 & Ermoupoleos street, Piraeus 18541, Greece
     Telephone Number: +30 210 4102210
 Fax Number: +30 210 4294340
     Contact Name: (Mr.) Konstantinos Kontes Position: Managing Director
   
     Email address:  costas.kontes@vships.com
 
4.  Date of Commencement of Agreement (Clause 2.1)
Upon Owners’ delivery of the Vessel to the Managers, or upon any other date as may be notified by the Owners to the Managers.

5.  Notices to Owners:   at the Owners’ Principal Place of Business address, fax number and email address stated in Box 2
 
6.  Notices to Managers:     
at the address, fax number and email address stated in Box 3 with a copy to Marine Legal Services Limited, 1st floor, 63 Queen Victoria Street, London EC4N 4UA tel (44) (0) 20 7329 2422
Email: dora.costa@marinelegal.co.uk


Ship Technical Management Agreement
OWNERS
MANAGERS
V.SHIPS SHIP MANAGEMENT AGREEMENT
Version Number
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It is mutually agreed between the party mentioned in Box 2 of Part I (hereinafter called "the Owners") and the party mentioned in Box 3 of Part I (hereinafter called "the Managers") that this Agreement consisting of PARTS I to VI inclusive shall be performed subject to the conditions contained herein. In the event of a conflict of conditions, the provisions of an applicable Appendix of Part III shall prevail over the provisions of PART II to the extent of such conflict but only in respect of the Management Service to be provided in terms of such applicable Appendix. In the event of a conflict between the Fee Schedule and the provisions of an applicable Appendix of Part III, the provisions of the Fee Schedule shall prevail.

DATE OF AGREEMENT: ___
  
   
Signature(s) (Owners)
Signature(s) (Managers)
   
/s/ Stamatios Tsantanis
/s/ Konstantinos Kontes

 
 
Stamatios Tsantanis
Konstantinos Kontes
Title: President
Title: Managing Director

Ship Technical Management Agreement
OWNERS
MANAGERS
V.SHIPS SHIP MANAGEMENT AGREEMENT
Version Number
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Name of Vessel
:
SHIP TECHNICAL MANAGEMENT AGREEMENT - PART II

1.
Definitions and Interpretation
1.1
In this Agreement, in addition to terms defined in Part I, save where the context otherwise requires, the following words and expressions shall have the meanings hereby assigned to them.

"Basic Services" means services relating to Crewing, Technical Management, Purchasing, Operations, Accounting and Budgeting, Information System Software, Shipboard Oil Pollution Emergency Plan, OPA and Assistance with Sale provided in accordance with Clause 3.

"Crew Support Costs" means all expenses of a general nature not particularly referable to any individual vessel for the time being managed by the Managers and incurred for the purpose of providing an efficient and economic management service including, without prejudice to the generality of the foregoing, cost of crew standby pay, training schemes, cadet training schemes, study pay, recruitment and interviews.

"Fee Schedule" means the Schedule comprising Part IV or any revised Fee Schedule prepared by the Managers after the date hereof and agreed by the Owners in writing to record adjustments to the fees payable from time to time under this Agreement.

"Information System Software" means the Managers' proprietary ship management software in executable object code form as described in Clause 3.7.1 as the same may be upgraded and updated from time to time.

"ISM Code" means the International Management Code for the Safe Operation of Ships and for Pollution Prevention adopted by Resolution A.714 (18) of the International Maritime Organisation on 4 November 1994 and incorporated on 19 May 1994 into the SOLAS Convention 1974 as Chapter IX and any amendment thereto or substitution thereof.

“ISPS Code” means the International Ship and Port Facility Security Code as adopted on 12 December 2002 by resolution 2 of the Conference of Contracting Governments to the International Convention for the Safety of Life at Sea 1974 and any amendment thereto or substitution thereof.

"Management Services" means Basic Services and Other Services and all other functions performed by the Managers under the terms of this Agreement.

“MLC” means the Maritime Labour Convention 2006 and any amendment thereto, substitution thereof and ratification of the Maritime Labour Convention 2006 in the respective States national law.

"OPA" means the United States Oil Pollution Act of 1990, regulations made thereunder, and any amendment thereto or substitution thereof.

"Other Services" means any services provided by Managers affirmatively indicated in Part III of this Agreement.

"Severance Costs" means the costs which the employers are legally obliged to pay to or in respect of the Crew as a result of the early termination of any contract for service on board the Vessel.

"SMS" means a Safety Management System in accordance with the ISM Code.

“SSP” means a Ship Security Plan in accordance with the ISPS Code.

"STCW" means the International Maritime Organisation Convention on Standards of Training Certification and Watchkeeping for Seafarers 1978, as amended in 1995 and any amendment thereto or substitution thereof.

"the Vessel" shall mean the vessel details of which are set out in Box 1 of Part I.
1.2
Clause Headings are inserted for convenience and shall be ignored in construing this Agreement; words denoting the singular number shall include the plural number and vice versa; references to Parts are to Parts of this Agreement; references to Clauses are to Clauses of Part II except where otherwise expressly stated; and references to any enactment include any re-enactments, amendments and extensions thereof.

2.
Appointment of Managers
2.1
With effect from the date stated in Box 4 of Part I (the “Date of Commencement”) and continuing unless and until terminated as provided herein, the Owners hereby appoint the Managers and the Managers hereby agree to act as the managers of the Vessel in respect of the Management Services.
2.2
In performing any of the Management Services the Managers shall, as agents for and on behalf of the Owners, have authority to take such steps as the Managers may from time to time in their reasonable discretion consider to be necessary to enable them to perform this Agreement in accordance with sound ship management practice.

3.
Basic Services

Subject to the terms and conditions herein provided, during the period of this Agreement the Managers shall carry out, as agents for and on behalf of the Owners, the Basic Services in accordance with the following provisions of this Clause.

3.1
Crewing
3.1.1
The Managers shall provide suitably qualified crew for the Vessel and its trade as required by the Owners in accordance with current STCW requirements as agents for and on behalf of the Owners, provision of which includes but is not limited to the following functions:

V.SHIPS SHIP MANAGEMENT AGREEMENT
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(i)
select and engage Master, officers and crew (hereinafter collectively referred to as the "Crew"); where the Owners make a complaint about any member of the Crew the Managers will promptly investigate the same and if it proves to be justified, replace the Crew member concerned as soon as practicable;

(ii)
ensure that the applicable requirements of the law of the flag of the Vessel are satisfied in respect of manning levels, rank, qualification and certification of the Crew, and employment regulations including Crew’s tax, social insurance, discipline and other requirements;

(iii)
ensure that all members of the Crew have passed a medical examination with a qualified doctor certifying that they are fit for the duties for which they are engaged and are in possession of valid medical certificates which are valid for the duration of their service onboard the Vessel and issued in accordance with appropriate flag state requirements and P&I Club requirements; in the absence of applicable Flag state requirement medical certificate shall be dated no more than three (3) months prior to the respective Crew members leaving the country of domicile and maintained for the duration of their service on board the vessel;

(iv)
arrange of transportation of the Crew, including repatriation;

(v)
supervise the efficiency of the Crew and use the Manager’s standard crew appraisal system (written or electronic) and administration of all other Crew matters such as planning for the manning of the Vessel;

(vi)
make payroll arrangements, including settling manning and agency expenses for the manning agents in the Crew's country of origin and, if applicable, payment of Severance Costs;
  (vii)
if requested by the Owners, conducting union negotiations and making agreed payments to unions;

(viii)
verify that the Crew shall have a command of the English of a sufficient standard to enable them to perform their duties safely;

(ix)
operate the Managers' Drug and Alcohol Policy;

(ix)
arrange Crew training in accordance with the Managers' policies but always in compliance with STCW (and as provided for in the budget), records of such training being maintained in the Manager’s standard format and will be provided to the Owners on a monthly basis.
3.1.2
Crew Claims

The Managers will provide such information as requested by relevant brokers and/or P&I Club managers to enable such brokers or managers to prepare and process all Crew insurance claims with the Owners’ approval.
3.1.3
The Owners agree to implement and abide by all the terms and conditions of employment under which the Crew are engaged by the Crew Managers as agent for the Owners. The Owners shall be the employer of the Crew and under no circumstances shall the Crew Managers be deemed to be the employer of the Crew. The Owners authorise the Crew Managers to sign contracts of employment with the Crew as agent only for and on behalf of the Owners and/or to procure that a seafarer recruitment and placement service, in the country of domicile of each Crew member, signs a contract of employment with such Crew member as agent only for and on behalf of the Owners. If the Vessel is covered by an ITF approved agreement or any other CBA/national agreement the Owners also authorise the Crew Managers to sign the ITF approved agreement or any other CBA/national agreement on their behalf and agree to provide all information necessary for this purpose. The Managers to provide the Owners copies of the contracts of employment upon request.
3.1.4
The Owners to approve the engagement of any member of the Crew within four (4) working days of receipt from the Managers of reasonable details of the proposed appointee. No response within the stipulated timeframe indicates tacit approval.
3.1.5
In the event that any officers or ratings are supplied by the Owners or on their behalf, the Owners shall procure that they comply with the requirements of STCW and MLC. Owners will instruct such officers and ratings to obey all reasonable orders of the Managers.Any such officers or ratings shall, at the Owners’ cost, be trained in accordance with the Managers training matrix.
3.1.6
The Managers shall procure that the Crew consent to processing of their personal data for legitimate business purposes. The Owners warrant that personal data of the Crew will be processed in accordance with the requirements of  all applicable laws, rules, regulation, directives and governmental requirements relating in any way to the privacy, confidentiality, security, integrity and protection of personal data, including without limitation: (a) the Philippine Data Privacy Act of 2012 and its implementing rules and regulations (together the “DPA”); (b) the EU General Data Protection Regulation 2016/679 (“GDPR”), (c) the EU ePrivacy Directive 2002/58/EC as amended by Directive 2009/136/EC, and any EU  Member State national implementing legislation; (d) applicable laws regulating unsolicited telephone calls, email, text/SMS or other electronic or anti-spam legislation; (e) applicable laws relating to data breach notification; (f) applicable laws imposing minimum information security requirements; (g) applicable laws requiring the secure disposal of records containing personal data; and (h) applicable laws regulating cross-border data transfers of personal data; (i) UK Data Protection Act 2018; and (j) the United Kingdom General Data Protection Regulation (“UK GDPR”) each as amended or superseded from time to time.

Ship Technical Management Agreement
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MANAGERS
V.SHIPS SHIP MANAGEMENT AGREEMENT
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3.1.7
For the purposes of the MLC, the Owners shall be deemed “Shipowner” and under no circumstances whatsoever, notwithstanding the Managers agreeing to carry out specific obligations under the MLC on behalf of the Owners, shall the Managers be deemed “Shipowner”. It is a condition of this Agreement that the Owners shall provide all Crew with MLC compliant working and living conditions. The Owners shall ensure that, in case there is any Seafarer Recruitment & Placement Service supplying any member of the Crew to the Vessel or any entity directly employing other persons to work onboard the Vessel, the latter shall provide to the Managers documentary evidence of MLC compliance issued under the provisions laid down by the applicable ratifying administration or, in the case of a non-ratifying administration, documentary evidence from a Recognised Organisation that is accepted by the flag administration of the Vessel.
3.1.8
The Owners authorise the Managers to sign contracts of employment with the Crew as agent only for and on behalf of the Owners and/or to procure that a Seafarer Recruitment & Placement Service, in the country of domicile of a Crew member, signs contracts of employment with such Crew member as agent only for and on behalf of the Owners. The Managers to provide the Owners copies of all the contracts of employment upon request.
3.1.9
The Owners shall be responsible for the payment of wages to the Crew Managers. In accordance with the Owners instructions, the Crew Managers shall distribute the wages to the Crew as agents for and on behalf of the Owners.
3.1.10
In the event that the Crew payroll is administered by the Managers on behalf of the Owners, notwithstanding any provision herein to the contrary, the Managers do not provide advice on tax or social insurance to which the Crew may be subject. The Owners shall remain exclusively responsible and liable in respect of tax and social insurance which may be applicable to the Crew including, without limitation, advising the Managers of any tax, social insurance or other amounts required to be deducted from Crew remuneration.
3.2
Technical Management
The Managers shall provide technical management which includes, but is not limited to the following functions:

 (i)
provision of personnel to supervise the maintenance and general efficiency of the Vessel;

(ii)
arrangement and supervision of drydockings, repairs, modifications to and the upkeep of the Vessel to the standards agreed with the Owners provided that the Managers shall be entitled to incur the necessary expenditure, which is subject to Owners’ prior approval, to ensure that the Vessel will comply with all requirements and recommendations of the classification society and equipment manufacturers, and with the laws and regulations of the country of registry of the Vessel and of the places where she trades;

(iii)
arrangement of periodic analysis of the bunker fuel, lubricating oils and chemicals by third parties (the costs being included in the Vessel’s running costs);

(iv)
appointment of surveyors and technical consultants as the Managers may consider from time to time to be necessary, provided they are pre-approved by the Owners;

(v)
visits to the Vessel by superintendents or other staff of the Managers for up to 25 days on board the Vessel in any calendar year (or pro rata for part of a calendar year) excluding the dry-docking period of the vessel and visits to the Vessel by superintendents or other staff of the Managers in excess of this allowance to be pre-approved in writing by the Owners;

(vi)
notify and receive prior approval by the Owners of any non-budgeted item of expenditure;
 
(vii)
notify and receive prior approval by the Owners if there is an operational need to exceed quarterly budget allowance as attached to this agreement under Part VI.

(viii)
development, implementation and maintenance of an SMS and an SSP.

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3.3
Purchasing
3.3.1
The Managers shall arrange for the supply of necessary victualling, stores, spares, provisions, lubricating oils and services (including drydock services) for the Vessel for any amount of up to US$5,000. With respect to the supply of any items of an amount between US$5,000 to US$10,000 the Managers shall request the Owners pre-approval, which should be provided within 48 hours from the Managers’ request. No response within such stipulated timeframe indicates tacit approval by the Owners. For any purchase above US$10,000, the Managers will advise the details and quotations to the Owners in writing requesting authority to proceed. The Owners have the right to arrange for any purchasing and shall advise the Managers accordingly. To enable the Managers to arrange such supplies on the most advantageous terms, the Managers shall be entitled to join with other parties in making arrangements for bulk purchase. The Managers are presently members of MARCAS International Limited ("MARCAS"), a contracting association providing access to commodities and dry-dock services globally (www.marcas.org). MARCAS negotiates on behalf of its members with selected suppliers the best available price, terms and conditions for the bulk purchase of goods and services for the marine industry with the aim of offering to members and their clients savings on vessel technical operating costs.
3.3.2
Details of the suppliers contracted by MARCAS and prices available for the Vessel at the time of supply shall be made available to Owners upon their request. Owners acknowledge that all information relating to prices is confidential and undertake not to disclose the same to third parties without the prior written consent of the Managers.
3.3.3
Where MARCAS has negotiated terms and conditions with suppliers of any stores, spares provisions, or lubricating oils ("Goods") and/or suppliers of services required by the Vessel, then the purchase of such Goods and services will, unless operational or other circumstances otherwise require, be undertaken with such suppliers on the basis of the terms and conditions negotiated by MARCAS.
3.3.4
MARCAS will where practicable obtain a best price charter from suppliers that the prices for all Goods and services purchased by MARCAS's members will be the lowest prices available. If the Owners are able to obtain in good faith, on arms' length terms, on a true like for like basis (including quality, certification, timing, manufacturer, place of supply, etc., but ignoring taxes and exchange rate fluctuations), the same Goods and/or services at a lower price than that obtained by MARCAS, the Owners will supply full details to the Managers who will promptly raise the matter with MARCAS and pass on to Owners any refund obtained by MARCAS from the supplier.
3.3.5
The Owners have received details from the Managers of the business rules and operating procedures adopted by MARCAS, including provisions related to fees that MARCAS will retain as applicable, and agree to comply with such rules and operating procedures as the same may be amended from time to time.
3.3.6
The Owners acknowledge that they are aware that prices obtained from suppliers require strict adherence to the payment terms agreed with suppliers (normally 45 days from date of invoice) and any failure by the Owners to provide the Managers with funds to settle sums due to suppliers on time will (in the absence of a good faith dispute) result in an immediate 2% surcharge. The Managers are hereby expressly authorised to settle such surcharge charges from any sums held by them on behalf of Owners. The Owners further acknowledge that they are aware if payments to suppliers are regularly made late, or if suppliers are not satisfied with Owners' credit rating, suppliers may refuse to supply at the prices and on the terms negotiated by MARCAS.
3.3.7
The Owners acknowledge that the Managers may be requested by suppliers to disclose details of the beneficial ownership of the Owners and that the Managers may not be able to obtain the most advantageous terms from such suppliers should the Owners not agree to such disclosure.

NOT APPLICABLE
Ship Technical Management Agreement
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MANAGERS
V.SHIPS SHIP MANAGEMENT AGREEMENT
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3.5
Accounting and Budgeting
3.5.1
The Managers shall:
 (i) maintain records of all costs and expenditure incurred hereunder as well as data necessary or proper for the settlement of accounts between the parties;
 (ii) establish an accounting system for the Vessel and supply regular monthly reports (within 5 working days from the end of the preceding month) in accordance therewith in the Managers' standard format or, on agreement of an additional fee, such other form as may be mutually agreed in writing with the Owners.
3.5.2
The Managers shall present to the Owners annually a budget for the following calendar year in the Managers' standard format. The budget for the period in 2023 following the date stated in Box 4 of Part I is set out in Part VI.
3.5.3
The Owners shall notify the Managers of their acceptance and approval of the annual budget within 14 days of presentation and in the absence of any response the Owners shall be deemed to have accepted the said budget. In the event that the Owners do not accept an annual budget presented by the Managers within the period aforesaid and that budget is, in the reasonable opinion of the Managers, fair and reasonable, the Managers shall be entitled to terminate this Agreement by notice in writing, in which event this Agreement shall terminate on the expiry of a period of one (1) month from the date upon which such notice is given.
3.5.4
The Managers shall produce a monthly comparison between budgeted and actual expenditure of the Vessel in the Managers' standard format or, on agreement of an additional fee, such other form as may be mutually agreed in writing accompanied by proper written justification of variances reports. In addition if required by the Owners the Managers shall produce quarterly forecast report on the annual budget.
3.5.5
This Clause 3.5 is subject to the provisions of Part VI.

3.6   Operations
In cases requested and always in co-operation with the Owners, the Managers shall, as agents for the Owners, provide support for the appointment of agents.
 
3.7
Information System Software
3.7.1
The Managers will, subject to the remaining provisions of this Clause 3.7, provide the Owners and the Vessel with the Information System Software to allow information from both the Vessel’s and the Managers’ office to be accessed directly by the Owners via the "PartnerShip Network" secure website. Financial, technical and operational information relating to the Vessel will be available from both the Vessel and office outputs, with the ability to "drill down" on accounts. This will provide the Owners with immediate access to the same information available to the Managers and to reports generated for the Owners, with a view to providing improved efficiency and cost savings to the Owners in his overview of the management of the Vessel.
3.7.2
Should the Owners have existing software applications on board the Vessel which they wish to retain, the Owners will permit the Managers to carry out an on board audit to assess the suitability, compatibility with the Information System Software, and any risks or disadvantages associated with the continued use of such applications.
3.7.3
The main features of the Information System Software at the date of this Agreement are:

(i)
comprehensive management software providing single point of entry to the Vessel incorporating Crew administration, vessel noon reporting, operational and port reporting, defect and deficiency reporting and performance monitoring;

(ii)
a ship to shore and shore to ship e-mail package providing cost efficient communications available to both Owners and their charterers; and

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(iii)
a computerised maintenance system including inventory control and automated purchase order handling. (An initial charge, to be agreed with Owners, may be made for the set-up of the maintenance database, depending on the system currently existing on board the Vessel).
3.7.4
The costs for the Information System Software are set out in the Fee Schedule, and are included in the Vessel's running costs, as follows:

(i)
the license fee;

(ii)
remote access from the Owners' Office through the Managers' PartnerShip network;

(iii)
maintenance, updates and upgrades;

(iv)
24 hour support;

(v)
provision of anti-virus software and regular upgrades;

(vi)
operational manuals on CD ROM and regular updates;

(vii)
annual remote audit of the Vessel IT systems providing a system health check;

(viii)
user manuals and training of the Crew in the use of the Information System Software; and

(ix)
e-mail on board the Vessel.
3.7.5
Such costs do not include:

(i)
the costs of appropriate hardware on board the Vessel;

(ii)
travel and other related costs for installation support of the Information System Software on board the Vessel;

(iii)
the set-up cost of the data base for the maintenance system; the Client remains an owner of the PMS data, which can be exported at any given time on request.

(iv)
any specific reports specified by the Owners where new data/specialist reporting is required; and
 
(v)
costs incurred pursuant to clause 3.7.2.
3.7.6
Installation and set-up of the Information System Software will be undertaken on a date agreed between the Managers and the Owners having regard to the Vessel's schedule and the availability of the Managers' personnel.
3.7.7
Solely for the duration of this Agreement the Managers hereby grant the Owners a personal, non-transferable non-exclusive license to use a single copy of the Information System Software as installed by the Managers on a single computer on board the Vessel.
3.7.8
The Information System Software is owned by the Managers or its subsidiaries and is protected by applicable copyright and patent laws. The Owners may not copy the Information System Software (except for back-up purposes only) or any written materials which accompany it, and may not sell, rent, lease, lend, sub-license, reverse engineer or distribute the Information System Software or such written materials.
3.7.9
The Managers do not warrant that the Information System Software will meet the Owners' requirements or that the use or operation of the Information System Software will be uninterrupted or error free.

3.8
Shipboard Oil Pollution Emergency Plan
3.8.1
The Managers will prepare and obtain all necessary approvals for a shipboard oil pollution emergency plan (SOPEP) in a form approved by the Marine Environment Protection Committee of the International Maritime Organisation pursuant to the requirements of Regulation 26 of Annex I of the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto, as amended (MARPOL 73/78).
3.8.2
The SOPEP will be written in the English language and will be reviewed and updated from time to time. If required the Managers will arrange for the translation of the SOPEP into another language, the cost of translation being recoverable in terms of Clause 8.5.
3.8.3
The Managers will also undertake regular training of the Crew in the use of the SOPEP including drills to ensure that the SOPEP functions as expected and that contact and information details specified are accurate.

3.9
OPA
3.9.1
If instructed by the Owners, the Managers will:

(i)
arrange for the preparation, filing and updating of a contingency Vessel Response Plan in accordance with the requirements of OPA and instruct the Crew in all aspects of the operation of such plan;

(ii)
identify and ensure the availability by contract or otherwise of a Qualified Individual, a Spill Management Team, an Oil Spill Removal Organisation, resources having salvage, firefighting, lightering and, if applicable, dispersant capabilities, and public relations/media personnel to assist the Owners to deal with the media in the event of discharges of oil.
3.9.2
The Managers are expressly authorised as agents for the Owners to enter into such arrangements by Contract or otherwise as are required to ensure the availability of the services outlined in Clause 3.8.1. The Managers are further expressly authorised as agents for the Owners to enter into such other arrangements as may from time to time be necessary to satisfy the requirements of OPA or other Federal or State laws.

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3.9.3
The Owners will pay the fees due to third parties providing the services described above together with costs to the Managers if any. The level of fees will be included in the Vessel's running costs.
3.9.4
On termination of this Agreement, the Vessel Response Plan and all documentation will be returned to the Managers at the expense of the Owners, provided such expense does not exceed US$150.

3.10
Assistance with Sale of Vessel

The Managers shall, if requested, provide Owners with technical assistance in connection with any sale of the Vessel. The Managers will, if requested in writing by the Owners, comment on the terms of any proposed Memorandum of Agreement, but the Owners will remain solely responsible for agreeing the terms of any Memorandum of Agreement regulating any sale.

3.11
Vessel trading in high risk areas

In the event that the Vessel is to trade in a high risk area and in particular an area where piracy is prevalent, the Managers shall:

(i)
Comply in full with the guidance provided by ‘Best Management Practices to Deter Piracy off the Coast of Somalia and in the Arabian Sea Area (BMP)’ as may be revised from time to time and also with any similar guidance which may be issued for other high risk areas.

(ii)
Monitor daily guidance and updates provided by The Maritime Security Centre – Horn of Africa (MSCHOA) website (www.mschoa.org) as may be revised from time to time and advise the Vessel accordingly.

(iii)
Comply with the Managers’ guidelines for ‘Transiting off the coast of Somalia, the Arabian Sea, Gulf of Aden and Red Sea’ as may be revised from time to time and also with any similar guidance which may be issued for other high risk areas. The Managers’ guidelines set out their policy of full compliance with BMP and additional guidance and information on Self Protection Measures (SPM’s) and Citadels or Safe Areas. The Owners will be provided with a copy of the guidelines and costs for SPM’s will be included in the Vessel budget.

(iv)
Where appropriate, ensure the Vessel follows the International Recommended Transit Corridor (IRTC), using the services of an escorted convoy if available or joining a group transit if not.

(v)
Monitor routing recommendations for transiting high risk areas as provided by charterers and insurers and review the same as part of the risk assessment carried out for the transit concerned.
 
(vi)
Provide sufficient Self Protection Measures (SPM) appropriate to the vessel type, size and speed with a view to protecting the Crew as far as possible in the event of an attack. To be determined by the risk assessment required by BMP for the transit concerned and before entering the high risk area.

(vii)
Provide training for the Crew in BMP prior to transiting any high risk area.

4.
Other Services
4.1
Subject to the terms and conditions herein provided, during the period of this Agreement the Managers shall carry out, as agents for and on behalf of the Owners, such Other Services as shall have been indicated in Part III.
4.2
Other Services shall be provided in accordance with the terms of the Appendices contained in Part III.

5.
Managers' Obligations
5.1
The Managers undertake to use their best endeavours to provide the Basic Services, the Other Services and the Management Services as agents for and on behalf of the Owners in accordance with sound ship management practice and to protect and promote the interests of the Owners in all matters relating to the provision of Management Services provided however that the Managers in the performance of Management Services shall be entitled to have regard to their overall responsibility in relation to all vessels which may from time to time be entrusted to their management and in particular, but without prejudice to the generality of the foregoing, the Managers shall be entitled to allocate available supplies, manpower and services in such manner as in the prevailing circumstances the Managers in their reasonable discretion consider to be fair and reasonable.
5.2
The Managers shall procure that the requirements of the law of the flag of the Vessel are satisfied and they shall be deemed to be "the Company" as defined by the ISM Code, assuming the responsibility for the operation of the Vessel and taking over the duties and responsibilities imposed by the ISM Code and by the ISPS Code.
5.3
The Managers undertake the responsibility to cooperate fully with the Owner and/or any other third party audit firm the Owner chooses with regard to the establishment (design) and the annual testing of the internal controls followed by the Manager relating to the operations performed during providing the services described herein to the Owners (provision of Type II SSAE16 report included).

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6.   Owners' Obligations
6.1
The Owners shall pay all sums due to the Managers punctually in accordance with the terms of this Agreement. Time shall be of the essence in respect of the payment of all such sums.
6.2
The Owners shall report (or where the Owners are not the registered owners of the Vessel procure that the registered owners report) to the flag state administration the details of the Managers as the Company as required to comply with the ISM Code.
6.3
The Owners shall procure that throughout the period of this Agreement the Vessel will be insured at the Owners' expense for not less than sound market value or entered for full gross tonnage, as the case may be, for:

(i)
usual hull and machinery risks (including but not limited to Crew negligence) and excess liabilities;

(ii)
protection and indemnity risks (including but not limited to pollution risks, diversion expenses and Crew risks);

(iii)
freight, defense and demurrage;

(iv)
war risks (including but not limited to blocking and trapping, protection and indemnity, terrorism and Crew risks); and

(v)
in accordance with MLC, establish insurance to compensate Crew, and/or any officers or ratings supplied by the Owners or on their behalf, for monetary loss that they may incur as a result of the failure of a recruitment and placement service or Owners under the employment agreement, to meet its obligations to them; and

(vi)
such other optional insurances as may be agreed by the Owners (such as piracy, kidnap and ransom, loss of hire)

in accordance with the best practice of prudent owners of vessels of a similar type to the Vessel, with sound and reputable insurance companies underwriters or associations (provided that, protection and indemnity risks must be placed with a member of the International Group of P&I Clubs) ("the Owners' Insurances").
6.4
The Owners shall procure that all premiums and calls on the Owners’ Insurances are paid by their due date and that the Owners' Insurances name the Managers and any additional party designated by the Managers as a joint assured for protection and indemnity risks (including pollution risks) and a named assured on all other policies, with the benefit of full cover. The Owners shall, if applicable, provide the Managers with written evidence thereof to the reasonable satisfaction of the Managers on or prior to the Date of Commencement and/or on the date on which the Managers notify the Owners of the appointment of any additional party and within seven (7) days of each renewal date. The Owners shall provide Managers with an appropriate certificate of insurance covering any and all liabilities under the MLC including but not limited to financial security in accordance with regulation 2.5.
6.5
On termination of this Agreement (howsoever occasioned) or where the Owners make a change in the P&I Club in which the Vessel is entered, the Owners shall procure that the Managers and any additional party designated by the Managers as a joint or named assured shall cease to be a joint or named assured.
6.6
Owners are responsible for the payment of any tonnage tax applicable at the country where this agreement will be officially registered.
6.7
The Owners are responsible to maintain this management agreement for a minimum period of two (2) months.

7.
Documentation
7.1
On or prior to the Date of Commencement the Owners will deliver to the Managers:

(i)
copies of the Vessel’s Certificate of Registry,

(ii)
copies of all the Vessel’s trading and classification certificates,
 
(iii)
a copy of the Owners’ certificate of incorporation,
 
(iv)
full details of any resident registered agent for the registered owner of the Vessel,
 
(v)
if applicable, a copy of the bareboat charterparty pursuant to which the Owners are disponent owners of the Vessel,
 
(vi)
in the case of a new vessel, the Owners will deliver a copy of the Building Contract and specification, and in the case of a second hand vessel, a copy of the Memorandum of Agreement in terms of which the Owners acquired the Vessel. The Owners shall be entitled to delete any confidential information (such as price) from the Building Contract or Memorandum of Agreement,
 
(vii)
if the Owners are not the registered owners or the bareboat charterer of the Vessel, in addition to the above, evidence satisfactory to the Managers of their beneficial interest in the Vessel and of their authorisation from the registered owners to enter into this Agreement,
 
(viii)
the name and address of the bank through which the Owners will pay funds due under this Agreement.

In any event, the Managers reserve the right to request evidence satisfactory to them that the Owners are in goodstanding and that the person signing this Agreement on their behalf is duly authorized to do so.

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7.2.
The Owners will on request provide the Managers with full details, in writing, of the registered Owners.
7.3
The Owners shall be obliged to obtain any required guarantee, bond or other security including, without limitation, the SCAC code and International Carrier Bond as required in order to access the US Bureau of Customs and Border Protection automated manifest system, as required by 68 Fed Reg. 68139 and as amended, and USCG Certificate of Financial Responsibility for water pollution. The Owners shall also be obliged to obtain any permits, licences or the like required to be obtained by an operator of a vessel including, without limitation, the US EPA vessel general permit.
7.4
At the request of the Owners, the Managers will promptly deliver a duly executed technical manager’s undertaking and subordination to the Owners’ lenders’ rights. The Managers further agree that they will cooperate with the Owners’ lenders in providing such undertaking and subordination letter and any other further documentation which may be required by the Owners’ lenders.
 
8.
Management Fee
8.1
The Owners shall pay to the Managers a fee in the amounts stated in the Fee Schedule in respect of the Basic Services and Other Services which shall be payable by equal monthly installments, the first installment being payable on the Commencement of this Agreement and the payment of the agreed monthly budgeted amounts fifteen (15) days prior to the purchase of the Vessel including payment of the agreed pre-delivery budget and one (1) month fee applicable for the pre-delivery work in respect of the vessel and subsequent installments being payable monthly in advance and fees for Other Services (if applicable) shall be paid at the rates and times specified in the Fee Schedule.
8.2
If the Managers' superintendents or other staff spend more than 25 days onboard the Vessel in any calendar year but excluding the dry-docking period of the vessel (or pro rata for part of a calendar year) such days in excess of 25 on board the Vessel shall be charged at the rate of US$650 per man per day.
8.3
Where a charterers vetting inspection may be required and a pre-inspection is requested, the costs of such additional services shall be charged to the Vessel’s account.
8.4
If the Vessel is placed on time charter, any costs incurred in complying with charterers requirements (including, but not limited to, additional reporting requirements and visits to the charterers) will be paid by the Owners.
8.5
The Managers shall, at no extra cost to the Owners, provide their own office accommodation, office staff and office stationery. The Owners shall reimburse the Managers for all expenses properly incurred under the terms of this Agreement on behalf of the Owners, including, without prejudice to the foregoing generality, postage and communication expenses (which the Managers shall allocate among all vessels managed by them on a basis which the Managers consider to be fair and reasonable having regard to the trade of the vessels, the nationality of the Crews and other relevant factors), Crew Support Costs (as included in the Vessel's running costs), vessel documentation, administrative expenses of the SOPEP and SSP, travelling expenses and other out of pocket expenses properly and reasonably incurred by the Managers in pursuance of the Management Services. All the above costs will be incurred by the Managers, provided they have been approved by the Owners.
8.6
In the event of the termination of this Agreement on the completion of the two (2) months minimum period the fees payable to the Managers according to the provisions of Clause 8.1 shall, save as aftermentioned, be paid for a further period of two (2) calendar months from the effective date of termination. After that minimum period of the Agreement there will be only one (1) month fees applicable upon termination subject to agreement that the total value of management fees paid will be at least equivalent to four (4) months.
8.7
Fees payable to the Managers will be reviewed annually and shall be adjusted as a minimum by reference to the retail price index relevant to the domicile of the Managers. Where Management Services are wholly or partly provided by third parties, the fees therefor shall be adjusted immediately to take account of increases in the cost of such services. The Managers will, however, use all reasonable endeavours in negotiations with such third parties to minimise such increases.
8.8
All fees are exclusive of Value Added Taxes, if any, or other applicable taxes.
8.9
Save as otherwise provided in this Agreement, all discounts, rebates and commissions obtained by the Managers in the course of the management of the Vessel shall be credited to the Owners.
8.10
If as a result of collision, accident, emergency, or any other extraordinary circumstances, the Managers' workload is increased beyond that which the parties could reasonably have anticipated, the Managers shall be entitled to reasonable additional remuneration having regard to the nature of the incident, the personnel and resources of the Managers deployed, and all other relevant circumstances including insurance recoveries.
8.11
If the Owners decide to lay-up the Vessel and such lay-up lasts for more than two (2) months, an appropriate reduction of the management fee for the period exceeding the two (2) months until the Owners give written notice to remobilize the Vessel, shall be mutually agreed between the parties.

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9.
Payments and Management of Funds
9.1
All sums paid to the Managers by or on behalf of the Owners and all moneys collected by the Managers under the terms of this Agreement (other than fees payable by the Owners to the Managers) shall be held to the credit of the Owners in a separate bank account or accounts which shall be operated by the Managers. The Owners agree to provide to the Managers all information and documentation reasonably required to comply with banking “know your customer” procedures.
9.2
Where any sums howsoever arising and whether in respect of fees, budgeted expenditure, non-budgeted expenditure, other liabilities (present, future, liquidated or unliquidated) or expenses are owed to the Managers in connection with the Vessel, the Managers shall be entitled but not obliged at any time or times to apply any sums standing to the credit of the accounts referred to in Clause 9.1 to settle such sums but shall in any event remain payable by the Owners to the Managers on demand.
9.3
On or prior to the Date of Commencement the Owners shall provide to the Managers an amount equivalent to the prorated budgeted days’ expenditure from the Date of Commencement to the end of the first month in management. In addition all pre-delivery expenses are to be funded promptly by the Owners on request from the Managers. The Owners shall provide an amount equivalent to 1/12 of the annual budget for the first full month on or prior to the 1st day of the first full month of the management period. In subsequent months the Managers shall request amounts for the total anticipated monthly expenditure as laid out in clause 9.6.
9.4
On or prior to the Date of Commencement the Owners shall provide to the Managers a sum of US$17,000, which shall be available to the Managers in their sole discretion for payment of any sum due under the terms of this Agreement, which sum will be held in the Manager’s bank account (“the Float”). The Owners agree that on termination of this Agreement the Managers shall be entitled to retain all or part of the Float in payment of any sums then outstanding under the terms of this Agreement and, subject thereto, the Managers shall reimburse the balance of the Float to the Owners within two (2) months after the termination of this agreement.
9.5
The Owners agree that on termination of this agreement payment of all sums outstanding under the terms of the agreement are to be made in advance of the Vessel leaving management. The sum will include without prejudice to the generality of the foregoing, any amounts due to be paid to suppliers and other third parties (as evidenced, in the absence of manifest error, by an accounts payable listing produced by the Managers) and any outstanding accruals for items or services invoiced or delivered. The Owners irrevocably undertake to pay forthwith on request from the Managers any other sums which become due after the effective date of termination, but have been incurred during the prosecution of this Agreement.
9.6
The Managers shall each month request (by letter, telex, fax or e-mail) from the Owners the funds required to run the Vessel for the ensuing month. Such request will be for the total of the anticipated monthly expenditure, including, without prejudice to the generality of the foregoing, any sums due to be paid to suppliers and other third parties in the ensuing month (as conclusively evidenced, in the absence of manifest error, by an accounts payable listing produced by the Managers) and any outstanding accruals for items or services invoiced or delivered. In addition, the Owners shall provide the Managers upon request with any funds which the Managers may reasonably request to cover any unbudgeted, unexpected, occasional or extraordinary item of expenditure. All such funds shall be received by the Managers within five (5) days after the receipt of such requests and shall be held to the credit of the Owners in the account(s) referred to in Clause 9.1. The Managers shall be entitled to allocate such funds in such manner as the Managers reasonably determine, and it shall not be open to the Owners to direct the Managers otherwise and under no circumstances shall any funds received be held on trust by the Managers for any specific purpose. In case there is any surplus of funds, same will be applied on the quarterly budget.
9.7
Notwithstanding anything contained herein, the Managers shall in no circumstances be required to use or commit their own funds to finance the provision of the Management Services and all payments due shall be made punctually to the Managers (and not any third party) in accordance with the terms of this Agreement in full without any deduction whatsoever.
9.8
In addition to the funds referred to above the Owners shall pay and/or reimburse the Managers in respect of all expenses incurred prior to the Date of Commencement including, but not limited to, riding Crew wages, initial Crew movements, Crew standby expenses, communication and liaison expenses and ITF welfare contributions.

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10.
Managers' Right to Sub-Contract
10.1
The Managers shall be entitled to procure performance of the Managers' obligations hereunder by their parent, subsidiary or associated companies or (in the case of Other Services) third parties (hereinafter collectively called the "Sub-Managers") in accordance with the following provisions of this Clause 10.1, provided that the Owners have given their prior written consent:

(i)
any such performance of all or any of the Managers' obligations by the Sub-Managers shall be and constitute full and sufficient performance by the Managers of their obligations hereunder;

(ii)
the Owners hereby agree with the Managers that insofar as the Sub-Managers perform the obligations of the Managers the Sub-Managers shall be entitled to the benefits of the provisions of Clause 11; and

(iii)
any performance of the Managers' obligations by the Sub-Managers shall be without prejudice to the rights of the Owners hereunder for any failure by the Managers in performance of the Managers' duties and obligations hereunder and notwithstanding performance by the Sub-Managers the Managers shall remain responsible to the Owners for performance of their obligations hereunder.
10.2
The provisions of Clause 10.1 shall remain in force notwithstanding termination of this Agreement.

11.
Responsibilities

11.1
Force Majeure
11.1.1
Neither the Owners nor the Managers shall be liable for any loss or damage or total or partial failure to perform this Agreement (other than a failure to perform an obligation to pay money) caused wholly or partly by any circumstance or matter beyond the reasonable control of the relevant party, as the case may be, including (without limiting the generality of the foregoing) acts of God, acts of governmental authorities, fires, strikes, floods, epidemics, quarantine restrictions, wars, insurrections, riots, violent demonstrations, criminal offences (other than criminal offences attributable to each Party’s employees, agents or sub-contractors), acts and omissions of civil or military authority or of usurped power, requisition or hire by any governmental or other competent authority, embargoes.
11.1.2
Where a party seeks to rely upon a force majeure event as described in Clause 11.1.1 it will advise the other party of the force majeure event at the earliest opportunity and also advise that party of the likely duration of such force majeure situation.
11.2
Liability to Owners

(i)
Without prejudice to Clause 11.1, the Managers shall be under no liability whatsoever to the Owners for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect, (including but not limited to loss of profit arising out of or in connection with detention of or delay to the Vessel) and howsoever arising in the course of performance of the Management Services unless same is proved to have resulted solely from the negligence, gross negligence or wilful default of the Managers or their employees or agents, or sub-contractors employed by them in connection with the Vessel, in which case (save where loss, damage, delay or expense has resulted from the Managers' personal act or omission committed with the intent to cause same or recklessly and with knowledge that such loss, damage, delay or expense would probably result) the Managers' liability for each incident or series of incidents giving rise to a claim or claims shall never exceed a total of ten times the annual management fee payable hereunder for Basic Services.
 
(ii)
Notwithstanding anything that may appear to the contrary in this Agreement, the Managers shall not be responsible for any of the acts or omissions of the Crew even if such acts or omissions are negligent, grossly negligent or wilful, except only to the extent that they are shown to have resulted from a failure to discharge their obligations under Clause 3.1 in which case their liability shall be limited in accordance with the terms of this Clause 11.
 
11.3
Indemnity - General

Except to the extent and solely for the amount therein set out that the Managers would be liable under Clause 11.2, the Owners hereby undertake to keep the Managers and their employees, agents and sub-contractors indemnified and to hold them harmless against all actions, proceedings, claims, demands or liabilities whatsoever or howsoever arising out of or in connection with the performance of this Agreement, including, but not limited to, any and all liability arising under the MLC, and against and in respect of all costs, loss, damages and expenses (including legal costs and expenses on a full indemnity basis) which the Managers may suffer or incur (either directly or indirectly) in the course of the performance of this Agreement.
 
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11.4
Indemnity - tax
11.4.1
Without prejudice to the general indemnity set out in Clause 11.3, the Owners hereby undertake to keep the Managers, their employees, agents and sub-contractors indemnified and to hold them harmless against all taxes, imposts and duties levied by any government as a result of the trading or other activities of the Owners or the Vessel and that whether or not such taxes, imposts and duties are levied on the Owners or the Managers.

11.4.2
If the Owners are required to deduct or withhold taxes from any payments to the Crew Managers under this Agreement, then:


(i)
the Owners shall make such deductions and withholdings in accordance with all applicable laws;

(ii)
the Owners shall pay the full amount deducted or withheld to the appropriate governmental authority in accordance with all applicable laws; and

(iii)
the sum payable to the Crew Managers shall be increased by such additional amounts as necessary so that after making all required deductions and withholdings of taxes, the Crew Managers receive an amount equal to the sum they would have received had no such deductions of withholding taxes been required to be made.

11.5
"Himalaya"

Subject to any provision of the Agreement to the contrary, it is hereby expressly agreed that no employee or agent of the Managers (including every sub-contractor from time to time employed by the Managers and the employees of such sub-contractors) shall in any circumstances whatsoever be under any liability whatsoever to the Owners for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act neglect or default on his part while acting in the course of or in connection with his employment and, without prejudice to the generality of the foregoing provisions in this Clause, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability defense and immunity of whatsoever nature applicable to the Managers or to which the Managers are entitled hereunder shall also be available and shall extend to protect every such employee or agent of the Managers acting as aforesaid and for the purpose of all the foregoing provisions of this clause 11 the Managers are or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be their servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this Agreement.
11.6
The provisions of Clause 11 shall remain in force notwithstanding termination of this Agreement.
 
Liens
 
 
13.
Claims/Disputes
 
13.1
At the request of the Owners, the Managers shall handle and settle all claims arising out of the Management Services hereunder and keep the Owners informed regarding any incident of which the Managers become aware which gives or may give rise to claims or disputes involving third parties.
13.2
The Managers shall, as instructed by the Owners, bring or defend actions, suits or proceedings in connection with matters entrusted to the Managers according to this Agreement.
13.3
The Managers in cooperation with the Owners shall have power to obtain legal or technical or other outside expert advice in relation to the handling and settlement of claims and disputes or all other matters affecting the interests of the Owners in respect of the Vessel.
13.4
The Owners shall arrange for the provision of any necessary guarantee bond or other security.
13.5
The Owners agree to the use of MTI Network for crisis management response and agree to pay any fees additional to the annual retainer of MTI Network (as included in the budget) which may be incurred.

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14.
Auditing, Records
14.1
The Managers shall at all times maintain and keep true and correct accounts and shall make the same available at the Managers’ offices for inspection and auditing by the Owners at such times as may be mutually agreed. The Owners agree that the Managers shall be entitled to charge for their reasonable costs and expenses should the Owners require hard copies of supplier invoices and related documentation.
14.2
The Managers shall be entitled to electronically archive all of the Vessels' records and arrange safe storage of the same, the costs being included in the Vessel's running costs.
14.3
All accounting and other records relating the Vessel will be retained by the Managers for a period of two (2) years after the date of termination, for whatever reason, of this Agreement, and thereafter shall be destroyed or, if electronically archived, expunged unless the Owners request the Managers to deliver such records to them at the Owners' expense.
14.4
The Managers may request and the Owners shall, in a timely manner, make available all documentation, information and records reasonably required by the Managers to enable them to perform the Management Services.

15.
Inspection of Vessel

The Owners shall have the right at any time to inspect the Vessel for any reason they consider necessary. The Owners will, where practicable, give reasonable notice to the Managers of their intention to visit the Vessel. After such inspection should Owners advise Mangers of reasonable comments about the Vessel’s condition and the Crew’s performance, Managers undertake to take necessary rectifying actions at the Owners expense.

16.
Compliance with Laws and Regulations
16.1
The parties will not do or permit anything to be done which might cause any breach or infringement of the laws and regulations of the country of registry of the Vessel, and of the places where she trades, provided always that the Managers' obligations under this Clause will only relate to matters which the Managers are in fact capable of fulfilling and on the understanding that the Managers receive all necessary co-operation, information and funding from the Owners.
16.2
The Parties undertake, represent and warrant that on concluding this Agreement neither they, their Crew, nor any of their employees, agents, or sub-contractors is a Sanctioned Person.

The Parties warrant compliance with Global Trade Laws applicable directly or indirectly to the performance of this Agreement, and undertake that they will not, through any act or omission, place the other in violation of Global Trade Laws.

The Parties accept the requirement of this Clause as a condition of this Agreement entitling the innocent party, without prejudice to any claim for damages for breach of this Agreement to immediately terminate this Agreement should there be a breach, or known future conduct that would likely cause a breach (as determined by either Party in its reasonable discretion), of any of these prohibitions at the innocent Party’s absolute discretion. The Party in breach shall indemnify and hold harmless the innocent Party, its employees, agents and sub-contractors in respect of any loss suffered by any of them as a result of violations of this Clause including any penalties or costs associated with government investigations or enforcement actions under Global Trade Laws.
 
The Parties accept that the US, EU, and other relevant authorities may from time to time establish or change the applicable Global Trade Laws, and both Parties acknowledge that such an event may render continued performance by either or both under this Agreement illegal or unlawful. In that event and if either Party terminates this Agreement due to a change in US, EU, or other applicable sanctions, both Parties agree that (i) such termination shall not constitute a breach of this Agreement by the Party terminating, and the other Party waives any and all claims against the terminating Party for any loss, cost or expense, including consequential damages, that the other Party may incur by virtue of such termination; and (ii) both Parties agree to take reasonable steps to cooperate in winding down this Agreement.

In this Clause the following words and expressions shall have the meanings hereby assigned to them:

“Embargoed Country” means any country or geographic region subject to comprehensive economic sanctions or embargoes administered by the  U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) or the EU, including without limitation Cuba, Iran, North Korea, Syria, the Donetsk and Luhansk People’s Republics and the Crimea region.
 
“Global Trade Laws” means  the US Export Administration Regulations; the US International Traffic in Arms Regulations; the economic sanctions rules and regulations administered by OFAC as well as any relevant Executive Orders; the sanctions and export control rules and regulations administered by competent authorities in the United Kingdom, including but not limited to sanctions regimes implemented under the UK Sanctions and Anti-Money Laundering Act 2018, European Union Council Regulations on export controls, including Nos. 428/2009, 267/2012; other EU Council sanctions regulations, as implemented in EU Member States; United Nations sanctions policies; all relevant regulations made under any of the foregoing; and other applicable economic sanctions or export and import control laws.

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“Sanctioned Person”  means at any time: (a) any person or entity included on: OFAC’s Specially Designated Nationals and Blocked Persons List, the Sectoral Sanctions Identifications List, or the Foreign Sanctions Evaders List; the EU’s Consolidated List of Sanctions Targets; the UK Consolidated List of Asset Freeze Targets and list of persons named in relation to financial and investment restrictions; or any similar list; (b) any person resident in, or entity organised under the laws of, an Embargoed Country; or (c) any person or entity majority-owned or controlled or acting on behalf of any of the foregoing.

17.
Duration of the Agreement

17.1
Termination by Notice

This Agreement shall come into effect on the Date of Commencement for a minimum period of two (2) months and shall continue thereafter until terminated by either party giving to the other notice in writing, in which event this Agreement shall, subject as aftermentioned terminate on the expiry of a period of one (1) month from the date upon which such notice is received. Where the Vessel is not at a convenient port or place on the expiry of such period, this Agreement shall terminate on the subsequent arrival of the Vessel at a convenient port or place.
 
17.2
Termination by default - Owners
  (i)
The Managers shall be entitled to terminate the Agreement with immediate effect by notice in writing if any moneys requested by the Managers from the Owners, shall not have been received in the Managers' nominated account within fifteen (15) calendar days of payment having been requested in writing by the Managers or if the Owners fail to comply to the reasonable satisfaction of the Managers with the requirements of clauses 6.3, 6.4 and 6.5 or if the Vessel is repossessed by a mortgagee.
  (ii)
If the Owners

(a)
otherwise fail materially to meet their obligations hereunder for reasons within their control, or

(b)
proceed with employment of or continue to employ the Vessel in the carriage of contraband, blockade running or in an unlawful and/or sanctionable trade, or on a voyage or in a manner which, in the opinion of the Managers, is unduly hazardous or improper, or potentially unlawful and/or sanctionable or

(c)
fail to comply with any recommendation of the Managers which the Managers consider to be reasonable and non-compliance with which may affect the Managers’ reputation or its obligations under the ISM Code or any other applicable laws or regulations

then the Managers may give written notice to the Owners specifying the default and requiring them to remedy it. In the event that the Owners fail to remedy such default (in the case of (a) above, if remediable) within a reasonable time to the reasonable satisfaction of the Managers, the Managers shall be entitled to terminate this Agreement with immediate effect by notice in writing.

17.3
Termination by Default - Managers

If the Managers fail materially to meet their obligations under this Agreement for reasons within the control of the Managers, the Owners may give written notice to the Managers specifying the default and requiring them to remedy it as soon as practically possible. In the event that the Managers fail to remedy such default within a reasonable period of time but in any case latest within fifteen (15) days from the date of the Owners’ notice, if remediable, to the reasonable satisfaction of the Owners, the Owners shall be entitled to terminate this Agreement with immediate effect by notice in writing.

17.4
Liquidation

The Parties to this Agreement shall be entitled to terminate this Agreement forthwith in the event of an order being made or resolution passed for the winding up, dissolution, liquidation or bankruptcy of the Owners of the Vessel (otherwise than for the purpose of reconstruction or amalgamation) or the Managers or if a receiver or similar officer is appointed to the Owners or the Managers or if either Party ceases to carry on business or make any special arrangement or composition with their creditors or if the Owners suspend payment under this Agreement.

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17.5
Extraordinary Termination

This Agreement shall be deemed to be terminated in the case of the sale of the Vessel or its being bareboat chartered, if applicable and unless otherwise agreed, when the bareboat charter comes to an end or if the Vessel becomes a total loss or is declared as a constructive or compromised or arranged total loss or is requisitioned.  Notwithstanding such deemed termination, fees shall be paid in accordance with the provisions of Clause 8.6.
17.6
For the purpose of sub-clause 17.5 hereof:

(i)
the date upon which the Vessel is to be treated as having been sold or otherwise disposed of shall be the date on which the registered owners cease to be registered as owners of the Vessel;

(ii)
the Vessel shall not be deemed to be lost until either she has become an actual total loss or agreement has been reached with her Underwriters in respect of her constructive, compromised or arranged total loss or if such agreement with her underwriters is not reached it is adjudged by a competent tribunal that a constructive loss of the Vessel has occurred or a Notice of Abandonment is issued to underwriters.
17.7
The termination of this Agreement shall be without prejudice to all rights accrued due between the parties prior to the date of termination.
17.8
All outstanding fees and other sums payable by the Owners require to be paid in full on or prior to termination, for whatever reason, of this Agreement. Save where the Agreement is terminated by the Owners in accordance with Clause 17.3, the Managers shall be paid fees in accordance with Clause 8.6. The Owners shall also pay on demand Severance Costs together with repatriation costs and expenses.

18.
Confidentiality
18.1
As between the Owners and the Managers, the Owners hereby agree and acknowledge that all title and property in and to the management manuals of the Managers and other written material of the Managers concerning management functions and activities is vested in the Managers and the Owners agree not to disclose the same to any third party and, on the termination of this Agreement, to return all such manuals and other material to the Managers. For the purposes of this Clause reference to "the Managers" includes the parent, subsidiary and associated companies of the Managers and any third parties providing Management Services.
19.     Suspension of Services
 
If, at any time, the Owners have failed to pay the sums due and owing, as set out in Clause 9, or are in breach of any other terms of this Agreement, in addition to the Managers’ rights pursuant to Clause 17 to terminate, the Managers shall, without prejudice to their liberty to terminate, be entitled to withhold/suspend the performance of any and all of their obligations hereunder (including, but not limited to, removal of Crew) and shall have no responsibility whatsoever for any consequences thereof, in respect of which the Owners hereby indemnify the Managers, and fees (as set out in the Fee Schedule) shall continue to accrue and any extra expenses resulting from such withholding shall be for the Owners’ account.
 
20.
Law and Arbitration
20.1
This Agreement shall be governed by English law and any dispute arising out of or in connection with this Agreement shall be referred to arbitration in London in accordance with the Arbitration Act 1996 and any amendment thereto or substitution therefor.
20.2
The arbitration shall be conducted in accordance with the London Maritime Arbitrators' (LMAA) Terms current at the time when the arbitration is commenced.
20.3
Save as aftermentioned, the reference shall be to three arbitrators, one to be appointed by each party and the third by the two so appointed. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment to the other party requiring the other party to appoint its arbitrator within fourteen (14) days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and give notice that it has done so within the fourteen (14) days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the party referring the dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be as binding as if he had been appointed by agreement.
20.4
In cases where neither the claim nor any counterclaim exceeds the sum of US$50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.

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20.5
Unless otherwise provided for in a separate agreement, the Owners hereby agree that any claim by any company providing services under clause 24 below shall, unless such company elects otherwise, be subject to English law and any dispute shall be referred to arbitration in accordance with the foregoing provisions of this clause 20.
20.6
Except to the extent provided for in clauses 10, 11 and 20.5 no third party shall have the right to enforce any term of this Agreement.

21.
Amendments to Agreement
21.1
Any and all amendments will be agreed by all the parties in the Agreement and will be in writing.
21.2
It is hereby understood that upon the written request of the Owners, certain Management Services will cease to be performed by the Managers and the Management Fee will be reduced accordingly. An amendment reflecting this will be entered into between the Managers and the Owners.

22.
Time Limit for Claims

Any and all liabilities of either party to the other arising under this Agreement or otherwise in relation to the Vessel (except in the case of fraud) shall be deemed to be waived and absolutely barred on the relevant date unless prior to the relevant date written particulars of any claim (giving details of the alleged breach in respect of which such claim is made and a preliminary statement of the amount claimed) have been intimated in writing by the claimant by the relevant date, and any such claim shall be deemed (if it has not previously been satisfied, settled or withdrawn) to have been withdrawn unless arbitration proceedings have been commenced under Clause 20 prior to the expiry of six (6) months after the relevant date. For the purposes of this Clause 22, the "relevant date" is one year after the date of termination, for whatever reason, of this Agreement.

23.
Condition of Vessel

The Owners acknowledge that they are aware that the Managers are unable to confirm that the Vessel, its systems, equipment and machinery are free from defects, and agree that the Managers shall not in any circumstances be liable for any losses, costs, claims, liabilities and expenses which the Owners may suffer or incur resulting from pre-existing or latent deficiencies in the Vessel, its systems, equipment and machinery.
24.
Use of Associated Companies
24.1
The Managers hereby disclose to the Owners that they may, in the course of performing Management Services, utilize the services of companies associated with the Managers. Without prejudice to the foregoing generality, associated companies of the Managers may be used in connection with inter alia travel, insurance, port agency catering and consultancy services. Where companies associated with the Managers provide services in connection with the above or any other matters, such companies will be entitled to charge and retain for their own benefit usual remuneration for the provision of their services (whether in the form of commission or fees). The Managers will send a list of the Associated Companies to Owners on or prior to the Date of Commencement.
24.2
The Owners hereby consent to the arrangements set out in Clause 24.1.

25.
Notices
25.1
Any notice or other communication under or in relation to this Agreement (a "Communication") may be sent by fax, registered or recorded mail, by personal delivery.
25.2
The addresses of the parties for service of a Communication shall be as stated in Boxes 5 and 6 respectively of Part I.
25.3
A Communication shall be deemed to have been delivered and shall take effect:

(i)
in the case of a fax on the day of transmission; and

(iii)
if delivered personally or sent by registered or recorded mail at the time of delivery.

26.
Staff Loyalty

The Owners shall not and shall procure that their parent, subsidiary and associate companies shall not, without the written consent of the Managers, during the course of this Agreement or for a period of six (6) months following termination directly or indirectly offer any employment to any employee of the Managers engaged in providing Management Services or directly or indirectly induce or solicit any such person to take up employment with the Owners or any associated or affiliated company or use the services of any such person either independently or via a third party. In the event that the Managers agree to any of its employees accepting an offer of employment as aforesaid, the Owners shall pay to the Managers a sum equivalent to 25% of the new annual salary of that employee, payable within seven days of the date of the written agreement of the Managers. Such payment shall be construed as liquidated damages and not as a penalty, being the parties agreed reasonable estimate of the Managers’ loss. This clause will not apply to any staff recruited or seconded specifically from Seanergy for the Seanergy vessels.

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27.
Entire Agreement
27.1
This Agreement constitutes the entire agreement and understanding between the parties with respect to the subject matter of this Agreement and (in relation to such subject matter) supersedes all prior discussions, understandings and agreements between the parties and all prior representations and expressions of opinion by the parties.
27.2
Each of the parties acknowledges that it is not relying on any statements, warranties, representations or understandings (whether negligently or innocently made) given or made by or on behalf of the other in relation to the subject matter hereof and that it shall have no rights or remedies with respect to such subject matter otherwise than under this Agreement. The only remedy available shall be for breach of contract under the terms of this Agreement. Nothing in this clause shall, however, operate to limit or exclude any liability for fraud.

28.
Partial Validity

If any provision of this Agreement is or becomes or is held by any arbitrator or other competent body to be illegal, invalid or unenforceable in any respect under any law or jurisdiction, the provision shall be deemed to be amended to the extent necessary to avoid such illegality, invalidity or unenforceability, or, if such amendment is not possible, the provision shall be deemed to be deleted from this Agreement to the extent of such illegality, invalidity or unenforceability and the remaining provisions shall continue in full force and effect and shall not in any way be affected or impaired thereby.

29.
Non Waiver

No failure to exercise nor any delay in exercising any right, power, privilege or remedy under this Agreement shall in any way impair or affect the exercise thereof or operate as a waiver in whole or in part. No single or partial exercise of any right, power, privilege or remedy under this Agreement shall prevent any further or other exercise thereof or the exercise of any other right, power, privilege or remedy.
 
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SHIP TECHNICAL MANAGEMENT AGREEMENT - PART III

ASSOCIATED COMPANIES

1. Travel Management on a 24hour basis: (Global Marine Travel & Everyway Travel)

Services include controls for verifying quotes, integrated billing system, consultancy, cost control and account management, visa assistance, corporate travel.

2. Catering (OCL Oceanic Catering Limited)

Services include cargo ship, offshore, remote site, ferry and cruise catering, consulting for start-up, new building, and operational review, purchasing and logistics.

3. Training (Marlins – Seatec UK Ltd)

English language testing and computer-based training.

4. Condition monitoring (Seatec condition monitoring)

Routine Lube Oil & Fuel Oil analysis, annual thermal & vibration surveys, fluid analysis as required: Fuel Purifier, Cylinder Scrapedown, OWS and drinking water (as per MLC requirements).

5. Technical analysis of vessel performance (V Ships Ship Management (India) Pvt Ltd)

Services include the monitoring of vessel performance by collecting and analysing the main parameters affecting fuel consumption: main engine (ME) consumption, condition of hull and propeller, sludge production and itinerary management in terms of speed and rpm.
The above findings are compiled in monthly reports containing trends and comparisons to optimum performance and to sister/similar vessels, if any, with the purpose of improvement in speed and consumption, cleaning of hull/propeller, operation of vessel within charterparty limits and provision of documents in support of commercial claims.
The service is tailor-made to suit the existing recording equipment available onboard and will include suggestions for improvement fully supported by ROI analysis
The technical performance of the ME is analysed in terms of ME load balance, fuel injection pump, air cooler, Turbo Charge and Economiser conditions with the purpose of improvement in fuel and lube oil consumption and the streamlining spare parts procurement.

6. Safety services (Seatec  Safety Operations )

Safety inspections, pre-vetting, navigational and internal ISM/ISPS audits and on-board training provided world-wide. Ship security plans and Ship security assessments.

7. Radio & Communications (Seatec Communication)

Provision of satellite communications (FBB, VSAT, etc.) Bespoke solutions depending on vessel operational requirements.  Seatec Communication will endeavour to take over existing satellite communication contract at no extra cost to Owners with the purpose of being able to provide consistent, standardised and high quality services across the fleet.

Supply of electronic charts, GDMSS services, Inmarsat PSA and LRIT, crew prepaid cards, entertainment content to crew.

8. Underwater services (Seatek UK Ltd.)

Routine underwater inspections, propeller and hull cleaning. Underwater repair and maintenance as required.

Ship Technical Management Agreement
OWNERS
MANAGERS
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9. Engineering services and consultancy (Seatec UK Ltd)

Services include naval architecture, engineering, design, emergency response services, laser scanning, new construction supervision and project management services.

10. Navigation (Seatec Communications)

Supply, installation and maintenance of communication and navigation equipment including radars, ECDIS, autopilots.

11. Repairs and Installations (Seatec Repairs)

Provision of riding gangs, turnkey repairs and installations, engine overhauling, electrical installations, annual services and NDT testing.

13.OTHER SERVICES
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APPENDIX 5 - On Board Safety Audit and Safety Training (only applicable if not deleted – at no extra cost)

1.
The Managers shall arrange on board safety audit and training which will include the following functions:


(i)
preparation and updating of specialist safety manuals not already included in the SMS;


(ii)
periodic on board safety audit and on board safety training;

(iii)
reporting to the Vessel (via the Managers) on information gained from visits to other vessels and industry forums.

2.
The cost of the foregoing services shall be such sum as is set out in the Fee Schedule and shall be included in the budget agreed with the Owners.

3.
The Managers have entered into sub-contracts with third parties to permit them to supply this service.

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SHIP TECHNICAL MANAGEMENT AGREEMENT – PART IV

FEE SCHEDULE

SHIP NAME:

BASIC SERVICES (Clause 3 of Part II)
Amount
Frequency
     
Management Fee
    
Information System fees (Shipsure)
    
Planned maintenance - data base development fee
(maximum of 30 chargeable days)
    
Crewing: Fixed Cost invoice – Crewing Costs (Part VI)
 
Other Crew costs (ITF, SEPF, PNO fee etc.)
 
Management Expenses:
    

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SHIP TECHNICAL MANAGEMENT AGREEMENT - PART V

FLEET DETAILS

Per Part I, “1. Vessel Details”.

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SHIP TECHNICAL MANAGEMENT AGREEMENT - PART VI

INITIAL BUDGET

 As attached.
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Crew Complement

As per agreed budget.

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2023 Budget (all figures in USD)


EX-4.20 5 ef20015287_ex4-20.htm EXHIBIT 4.20
 

Exhibit 4.20

 

EXECUTION VERSION

 

Dated 25 September 2023

 

HELLAS OCEAN NAVIGATION CO.

as Charterers

 

SEA 241 LEASING CO. LIMITED

as Owners

 

SEANERGY MARITIME HOLDINGS CORP.

as Guarantor

 

AMENDMENT AND RESTATEMENT DEED

relating to a bareboat charter dated 22 June 2021 in respect of

m.v. “HELLASSHIP”

 



 

Index

 

Clause Page

 

1. Definitions and Interpretation 3
2. Conditions Precedent 4
3. Representations 5
4. Amendments and Confirmations 5
5. Further Assurance 7
6. Costs and Expenses 7
7. Notices 8
8. Counterparts 8
9. Governing Law 8
10. Enforcement 8

 

Schedules

Schedule 1 Conditions Precedent 9
Schedule 2 Form of Effective Date Notice 11
Schedule 3 Form of Amended and Restated Charter 12

 

Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Hellasship”

 

2
EXECUTION VERSION

THIS DEED is made on 25 September 2023

 

PARTIES

 

(1) HELLAS OCEAN NAVIGATION CO., a corporation incorporated and existing under the laws of the Republic of Liberia with its registered address at 80 Broad Street, Monrovia, Liberia (the “Charterers”);

 

(2) SEA 241 LEASING CO. LIMITED, a company incorporated under the laws of Hong Kong whose registered office is at 27/F, Three Exchange Square, 8 Connaught Place, Central, Hong Kong (the “Owners”); and

 

(3) SEANERGY MARITIME HOLDINGS CORP., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands with its registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960 (the “Guarantor”).

 

BACKGROUND

 

(A) By a bareboat charter dated 22 June 2021 (the “Charter”) and made between (i) the Owners, as owners and (ii) the Charterers, as bareboat charterers, the Owners have agreed to bareboat charter m.v. “HELLASSHIP” (the “Vessel”) to the Charterers pursuant to the terms and conditions contained therein.

 

(B) By a bareboat charter dated 22 June 2021 (the “Other Charter”) and made between (i) SEA 242 LEASING CO. LIMITED (the “Other Owner”), as owners and (ii) PATRIOT SHIPPING CO. (the “Other Charterer”), as bareboat charterers, the Other Owner has agreed to bareboat charter m.v. “PATRIOTSHIP” (the “Other Vessel”) to the Other Charterer pursuant to the terms and conditions contained therein.

 

(C) Without prejudice and in addition to the Owners’ rights under the Charter and other Leasing Documents, in view of the cessation of LIBOR, the Parties agree to enter into this Deed to amend the basis of calculation of “Variable Charterhire” in the Charter upon the terms and conditions as set out in this Deed.

 

OPERATIVE PROVISIONS

 

1. DEFINITIONS AND INTERPRETATION

 

1.1. Definitions

 

In this Deed:

 

“Amended and Restated Charter” means the Charter as amended and restated by this Deed in the form set out in Schedule 3 (Form of Amended and Restated Charter).

 

“Effective Date” means, subject to Clause 2 (Conditions Precedent), 28 June 2023, being the date to be specified as the Effective Date in the Effective Date Notice.

 

“Effective Date Notice” means the notice in the form set out in Schedule 2 (Form of Effective Date Notice).

 

Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Hellasship”

 

3

 

“Guarantee” means the guarantee in respect of the Charter dated 22 June 2021 and made by the Guarantor in favour of the Owners.

 

“Obligors” means collectively, the Charterers, the Other Charterer and the Guarantor (in its capacity as shareholder of the Charterers and a guarantor), and “Obligor” means each or any of them, as the context may require.

 

“Other Amendment and Restatement Deed” means the amendment and restatement deed to the Other Charter dated on or around the date of this Deed.

 

“Other Leasing Documents” means the Leasing Documents as defined in the Other Charter.

 

“Party” means a party to this Deed.

 

1.2. Defined expressions

 

Defined expressions in the Charter shall have the same meanings when used in this Deed unless the context otherwise requires or unless otherwise defined in this Deed.

 

1.3. Application of construction and interpretation provisions of Charter

 

Clause 66 (Definitions) of the Charter applies to this Deed as if it were expressly incorporated in it with any necessary modifications. In the event of any conflict or contradiction between the definitions contained in this Deed and the Charter, the definitions contained in this Deed shall prevail and supersede all such conflicting provisions.

 

1.4. Designation as a Leasing Document

 

The Charterers and the Owners designate this Deed as a “Leasing Document” under the Amended and Restated Charter.

 

1.5. Third party rights

 

Unless provided to the contrary in this Deed, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Deed.

 

2. CONDITIONS PRECEDENT

 

2.1. Conditions Precedent

 

The agreement of the Parties contained in Clause 4 (Amendments and Confirmations) is subject to:

 

(a) the Owners being satisfied that the conditions precedent specified in Schedule 1 (Conditions Precedent) are fulfilled on or before the date of this Deed;

 

(b) the representations to be made by each of the Charterers and the Guarantor (in its capacity as shareholder of the Charterers and a guarantor) in Clause 3 (Representations) are true in all material respects on the Effective Date and on the date of this Deed; and

 

Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Hellasship”

 

4

 

(c) the representations to be made by each of the Other Charterer and the Guarantor (in its capacity as shareholder of the Other Charterer and a guarantor) in clause 3 (Representations) of the Other Amendment and Restatement Deed are true in all material respects on the Effective Date and on the date of the Other Amendment and Restatement Deed.

 

2.2. Effective Date

 

The Owners shall notify the Charterers upon the conditions set out in Clause 2.1 (Conditions Precedent) being fulfilled to their satisfaction, whereupon they shall issue the Effective Date Notice.

 

3. REPRESENTATIONS

 

Each of the Charterers and the Guarantor (in its capacity as shareholder of the Charterers and a guarantor) makes the representations and warranties set out in the Leasing Documents to which it is a party, as amended and restated or supplemented (as the case may be) by this Deed and updated with appropriate modifications to refer to this Deed, by reference to the circumstances then existing on the Effective Date and on the date of this Deed.

 

4. AMENDMENTS AND CONFIRMATIONS

 

4.1. Specific amendments to the Charter

 

With retrospective effect on and from the Effective Date, the Charter shall be amended and restated in the form attached hereto as Schedule 3 (Form of Amended and Restated Charter), provided that:

 

(a) the new “Interest Rate” under the Amended and Restated Charter, together with the related provisions, shall apply retrospectively for the purposes of calculating the “Variable Charterhire” for any Hire Period starting on or after the Effective Date;

 

(b) in relation to any Hire Period starting before the Effective Date only, the “Variable Charterhire” for that Hire Period shall continue to be calculated upon the terms and conditions with respect to such calculation in the Charter, and such terms and conditions shall continue to apply to such Variable Charterhire until such time as such “Variable Charterhire” are fully paid; and

 

(c) the Charter, as amended and restated by this Deed, shall continue to be binding on each of the parties to it in accordance with its terms as so amended and restated.

 

4.2. Amendments to other Leasing Documents

 

With retrospective effect on and from the Effective Date, each of the other Leasing Documents, shall be, and shall be deemed by this Deed to be, amended as follows:

 

(a) by construing the definition of, and references throughout each of the other Leasing Documents to, the Charter as if the same referred to the Charter as amended and restated by this Deed;

 

(b) by construing references throughout each of the other Leasing Documents to “this Deed”, “this Account Assignment, Pledge and Charge Agreement”, “this Guarantee”, “this Letter of Undertaking” and other like expressions as if the same referred to such relevant Leasing Document as amended and supplemented by this Deed;

 

Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Hellasship”

 

5

 

(c) by construing references throughout each of the other Leasing Documents to “a Leasing Document”, “the Leasing Documents” and other like expressions as if the same referred to such relevant Leasing Document as amended and restated or supplemented (as the case may be) by this Deed; and

 

(d) by construing references throughout each of the other Leasing Documents to “Other Leasing Document” and other like expressions as if the same referred to such Other Leasing Document as amended and restated or supplemented (as the case may be) by the Other Amendment and Restatement Deed.

 

4.3. Obligors Confirmation

 

(a) Each of the Charterers and the Guarantor (in its capacity as shareholder of the Charterers and a guarantor) with retrospective effect on and from the Effective Date:

 

(i) confirms its acceptance of the Amended and Restated Charter;

 

(ii) agrees that it is bound as an Obligor (as defined in the Amended and Restated Charter);

 

(iii) confirms that the definition of, and references throughout each of the Leasing Documents (to which it is a party) to, the Charter and any of the other Leasing Documents shall be construed as if the same referred to the Charter and such other Leasing Documents as amended and restated or supplemented (as the case may be) by this Deed; and

 

(iv) confirms that the definition of, and references throughout each of the Leasing Documents (to which it is a party) to any of the Other Leasing Documents shall be construed as if the same referred to such Other Leasing Document as amended and restated or supplemented (as the case may be) by the Other Amendment and Restatement Deed.

 

(b) The Guarantor confirms that its guarantee and indemnity given under the Guarantee with retrospective effect on and from the Effective Date:

 

(i) continues to have full force and effect on the terms of the Amended and Restated Charter; and

 

(ii) extends to the obligations of the relevant Obligors under the Leasing Documents as amended and restated or supplemented (as the case may be) by this Deed.

 

4.4. Security confirmation

 

Each of the Charterers and the Guarantor (in its capacity as shareholder of the Charterers and a guarantor) confirms with retrospective effect on and from the Effective Date that:

 

(a) any Security Interest created by it under the Leasing Documents to which it is a party extends to the obligations of the relevant Obligors under (i) the Leasing Documents as amended and restated or supplemented (as the case may be) by this Deed and (ii) the Other Leasing Documents as amended and restated or supplemented (as the case may be) by the Other Amendment and Restatement Deed; and

 

Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Hellasship”

 

6

 

(b) the obligations of the relevant Obligors under (i) the Leasing Documents to which it is a party, as amended and restated or supplemented (as the case may be) by this Deed and (ii) the Other Leasing Documents to which it is a party, as amended and restated or supplemented (as the case may be) by the Other Amendment and Restatement Deed, are included in the Secured Liabilities (as defined in the Security Documents to which it is a party (other than the Account Charge)) and the Indebtedness (as defined in the Account Charge);

 

(c) any Security Interest created under the Leasing Documents to which it is a party continues in full force and effect on the terms of such Leasing Documents, notwithstanding the amendments and/or supplements set out or contemplated by this Deed; and

 

(d) to the extent that this confirmation creates a new Security Interest, such Security Interest shall be on the terms of the Leasing Documents in respect of which this confirmation is given.

 

4.5. Leasing Documents to remain in full force and effect

 

The Leasing Documents shall remain in full force and effect and, with retrospective effect on and from the Effective Date:

 

(a) in the case of the Charter, as amended and restated pursuant to Clause 4.1 (Specific amendments to the Charter);

 

(b) in the case of the other Leasing Documents, as amended and supplemented pursuant to Clause 4.2 (Amendments to other Leasing Documents);

 

(c) the Charter and the applicable provisions of this Deed will be read and construed as one document; and

 

(d) except to the extent expressly waived by the amendments effected by this Deed, no waiver is given by this Deed and the Owners expressly reserve all its rights and remedies in respect of any breach of or other Termination Event under the Leasing Documents.

 

5. FURTHER ASSURANCE

 

(a) Each of the Charterers and the Guarantor (in its capacity as shareholder of the Charterers and a guarantor) shall promptly, and in any event within the time period specified by the Owners do all such acts (including procuring or arranging any registration, notarisation or authentication or the giving of any notice) or execute or procure execution of all such documents (including assignments, transfers, mortgages, charges, notices, instructions, acknowledgements, proxies and powers of attorney), as the Owners may specify (and in such form and substance as the Owners may require in favour of the Owners or its nominee(s)) to implement the terms and provisions of this Deed.

 

(b) The Owners shall take all such action as is available to them (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security Interest conferred or intended to be conferred on the Owners by or pursuant to the Security Documents and the Charter as amended and restated or supplemented (as the case may be) by this Deed.

 

6. COSTS AND EXPENSES

 

The Charterers shall reimburse the Owners on demand for all reasonable and documented costs and expenses (including, without limitation, legal fees, taxes and other disbursements) incurred by the Owners in connection with or arising out of the negotiation, execution, operation or implementation of this Deed and any other documents required in connection herewith.

 

Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Hellasship”

 

7

  

7. NOTICES

 

Clause 46 (Notices) of the Charter, as amended and supplemented by this Deed applies to this Deed as if it were expressly incorporated in it with any necessary modifications.

 

8. COUNTERPARTS

 

This Deed 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 Deed.

 

9. GOVERNING LAW

 

This Deed and any non-contractual obligations arising under or in connection with it, shall be governed by and construed in accordance with English law.

 

10. ENFORCEMENT

 

Clause 65 (Governing Law and Enforcement) of the Charter applies to this Deed as if it were expressly incorporated in it with any necessary modifications.

 

This Deed has been entered into and delivered as a deed, on the date stated at the beginning of this Deed.

  

Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Hellasship”

  

8

SCHEDULE 1

 

CONDITIONS PRECEDENT

 

1 Corporate documents

 

1.1 If required, a copy of the resolutions of the board of directors (or equivalent) of each of the Charterers and the Guarantor:

 

(a) approving the terms of, and the transactions contemplated by, this Deed and resolving that it execute this Deed;

 

(b) authorising a specified person or persons to execute this Deed on its behalf; and

 

(c) authorising a specified person or persons, on its behalf, to sign and/or dispatch all documents and notices to be signed and/or dispatched by it under, or in connection with, this Deed.

 

1.2 If required, a copy of the power of attorney of each of the Charterers and the Guarantor authorising a specified person or persons to execute this Deed.

 

1.3 If required, a specimen of the signature of each person authorized by the resolutions referred to in paragraph 1.1 above.

 

1.4 If required, a copy of the resolutions signed by all the holder(s) of the issued shares of the Charterers, approving the terms of, and the transactions contemplated by this Deed.

 

1.5 A copy of a certificate of an officer or authorised signatory of each of the Charterers and the Guarantor certifying and confirming that its constitutional documents have not been amended since they were last provided to the Owners, or in the event such constitutional documents have been amended, such certificate to attach and certify each such copy amended constitutional document is correct, complete and in full force and effect as at a date no earlier than the date of this Deed, with originals to follow within 10 Business Days after the Effective Date.

 

1.6 A copy of a certificate of an officer or authorized signatory of each of the Charterers and the Guarantor addressed to the Owners certifying that each copy document relating to it specified in this Schedule is correct, complete and in full force and effect as at a date no earlier than the date of this Deed, with originals to follow within 10 Business Days after the Effective Date.

 

1.7 Copies of certificates of good standing or equivalent in respect of each of the Charterers and the Guarantor which has been issued on a date no later than thirty (30) calendar days (or such later date as the Owners may agree) before the date of the relevant legal opinion to be provided to the Owners pursuant to paragraph 4 below, with originals to follow within 10 Business Days after the Effective Date.

 

2 Amendment documents

 

2.1 A duly executed copy of this Deed, with originals to follow within 10 Business Days after the Effective Date.

 

2.2 A duly executed copy of the Other Amendment and Restatement Deed, with originals to follow within 10 Business Days after the Effective Date.

 

Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Hellasship”

 

9

 

2.3 Evidence that the Other Owner is satisfied that the conditions precedent specified in schedule 1 (Conditions Precedent) to the Other Amendment and Restatement Deed are fulfilled.

 

3 Fees and expenses

 

3.1 Evidence that all fees and expenses then due from the Charterers to the Owners under this Deed have been paid or will be paid in accordance with the relevant provisions thereof.

 

4 Legal opinions

 

4.1 A signed legal opinion of Watson Farley & Williams, legal advisers to the Owners on such matters on the laws of England as may be satisfactory to the Owners.

 

4.2 A signed legal opinion of Watson Farley & Williams, legal advisers to the Owners on such matters on the laws of the Republic of Liberia and the Republic of the Marshall Islands as may be satisfactory to the Owners.

 

4.3 A signed legal opinion by lawyers appointed by the Owners on such matters on the laws of any other jurisdiction as may be satisfactory to the Owners.

 

5 Other documents and evidence

 

5.1 Such other documents, authorisations, opinions or assurance which the Owners reasonably require in connection with the entry into and performance of the transactions contemplated by this Deed or for the validity and enforceability of the Amended and Restated Charter and the other Leasing Documents as amended and restated or supplemented (as the case may be) by this Deed, by giving advance notice to the Charterers.

 

Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Hellasship”

  

10

SCHEDULE 2

 

FORM OF EFFECTIVE DATE NOTICE

 

Amendment and Restatement Deed dated _______________________ 2023 (the “Deed”)

 

relating to a bareboat charter dated 22 June 2021 in respect of

m.v. “HELLASSHIP”

 

1. We refer to the Deed. This is the Effective Date Notice. Terms defined in the Deed shall have the same meaning in this Effective Date Notice.

 

2. By issuing this Effective Date Notice, we confirm that the conditions precedent set out in Clause 2.1 (Conditions Precedent) of the Deed are fulfilled to our satisfaction, and therefore the amendments contemplated in the Deed shall take effect retrospectively on and from 28 June 2023, being the Effective Date.

 

___________________________

For and on behalf of

SEA 241 LEASING CO. LIMITED

Name:

Title: 

 

Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Hellasship”

 

11

SCHEDULE 3

 

FORM OF AMENDED AND RESTATED CHARTER

 

Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Hellasship”

 

12

 

 

BIMCO 1. Shipbroker N/A 3. Owners/Place of business (Cl. 1) Sea 241 Leasing Co. Limited, a company incorporated under the laws of Hong Kong with registration number 3016198 whose registered office is at 27/F, Three Exchange Square, 8 Connaught Place Central, Hong Kong Vessel’s name, call sign and flag (Cl. 1 and 3) Hellasship Call Sign: 5LAL4 Flag:Liberia 6. Type of Vessel Bulk carrier 8. When/Where built 2012 Imabari Shipbuilding Co., Ltd. 10. Classification Society (Cl. 3) DNV BARECON 2001 STANDARD BAREBOAT CHARTER 2. Place and date 22 June 2021 4. Bareboat Charterers/Place of business (Cl. 1) PART I Hellas Ocean Navigation Co., a corporation incorporated under the laws of the Republic of Liberia whose registered address is at 80 Broad Street, Monrovia, Liberia 7. GT/NT 92752/60504 Total DWT (abt.) in metric tons on summer freeboard 181325 11. Date of last special survey by the Vessel’s classification society N/A 12 Further particulars of Vessel (also indicate minimum number of months’ validity of class certificates agreed acc. to Cl. 3) N/A 13. Port or Place of delivery (Cl. 3) Back to back with MOA delivery 16. Port or Place of redelivery (Cl. 15) See Clauses 41 and 42 14. Time for delivery (CI. 4) See Clause 34 15. Cancelling date (Cl. 5) See definition of “Cancelling Date” and Clause 33 18. Running days’ notice if other than stated in Cl. 4 20. Trading limits (CI. 6) Worldwide within International Navigating Limits and excluding any war listed area declared by the Joint War Committee 17. No. of months’ validity of trading and class certificates upon redelivery (Cl. 15) Three (3) months 19. Frequency of dry-docking (CI. 10(g)) In accordance with Approved Classification Society or requirements of Flag State 21. Charter period (Cl. 2) See Clause 32 22. Charter hire (Cl. 11) See Clause 36 23. New class and other safety requirements (state percentage of Vessel’s insurance value acc. to Box 29) (Cl. 10(a)(ii)) N/A 24. Rate of interest payable acc. to Cl. 11 (f) and, if applicable, acc. to PART IV See Clause 37 25. Currency and method of payment (Cl. 11) Dollars/Bank transfer 26. Place of payment; also state beneficiary and bank account (Cl. 27. Bank guarantee/bond (sum and place) (Cl. 24) (optional) N/A 11) See Clause 36 28. Mortgage(s), if any (state whether 12(a) or (b) applies; if 12(b) 29. Insurance (hull and machinery and war risks) (state value applies state date of Financial Instrument and name of Mortgagee(s)/Place of business) (Cl. 12) N/A acc. to Cl. 13(f) or, if applicable, acc. to Cl. 14(k)) (also state if Cl. 14 applies) See Clause 39 30. Additional insurance cover, if any, for Owners’ account limited 31. Additional insurance cover, if any, for Charterers’ account limited to (Cl. 13(b) or, if applicable, Cl. 14(g)) to (Cl. 13(b) or, if applicable, Cl. 14(g)) See Clause 39 See Clause 39 33. Brokerage commission and to whom payable (Cl. 27) 32. Latent defects (only to be filled in if period other than stated in CI. 3) N/A 34. Grace period (state number of clear banking days) (CI. 28) N/A N/A 35. Dispute Resolution (state 30(a), 30(b) or 30(c); if 30(c) agreed Place of Arbitration must be stated (Cl. 30) Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.

 



(c) Clause 30 not applicable. See Clause 65 36. War cancellation (indicate countries agreed) (Cl. 26(f)) N/A 37. Newbuilding Vessel (indicate with “yes” or “no” whether PART III applies) (optional) No 38. Name and place of Builders (only to be filled in if PART III applies) N/A 39. Vessel’s Yard Building No. (only to be filled in if PART III applies) N/A 40. Date of Building Contract (only to be filled in if PART III applies) N/A 41. Liquidated damages and costs shall accrue to (state party acc. to Cl. 1) a) N/A b) N/A c) N/A 42. Hire/Purchase agreement (indicate with “yes” or “no” whether PART IV applies) (optional) No, Part IV does not apply 43. Bareboat Charter Registry (indicate with “yes” or “no” whether PART V applies) (optional) No 44. Flag and Country of the Bareboat Charter Registry (only to be filled in if PART V applies) N/A 45. Country of the Underlying Registry (only to be filled in if PART V applies) N/A 46. Number of additional clauses covering special provisions, if agreed Clause 32 to Clause 66 PREAMBLE - It is mutually agreed that this Contract shall be performed subject to the conditions contained in this Charter which shall include PART I and PART II. In the event of a conflict of conditions, the provisions of PART I shall prevail over those of PART II to the extent of such conflict but no further. It is further mutually agreed that PART III and/or PART IV and/or PART V shall only apply and only form part of this Charter if expressly agreed and stated in Boxes 37, 42 and 43. If PART III and/or PART IV and/or PART V apply, it is further agreed that in the event of a conflict of conditions, the provisions of PART I and PART II shall prevail over those of PART III and/or PART IV and/or PART V to the extent of such conflict but no further. Signature (Owners) /s/ Zhou Ling Zhou Ling Attorney-in-fact Signature (Charterers)  /s/ Stavros Gyftakis Stavros Gyftakis Attorney-in-Fact Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.
 



 

 

1. Definitions PART II BARECON 2001 Standard Bareboat Charter In this Charter, the following terms shall have the meanings hereby assigned to them: “The Owners” shall mean the party identified in Box 3; “The Charterers” shall mean the party identified in Box 4; “The Vessel” shall mean the vessel named in Box 5 and with particulars as stated in Boxes 6 to 12. “Financial Instrument” has the meaning ascribed to it in Clause 66. means the mortgage, deed-of- covenant-or-other-such-financial-security-instrument as 10 annexed-to-this Charter-and-stated in Box 28. 11 2 Charter Period 12 In consideration of the hire detailed in Box 22, 13 the Owners have agreed to let and the Charterers have 14 agreed to hire the Vessel for the period stated in Box 21 15 (“The Charter Period”). See also Clause 32. 16 3. Delivery 17 (not applicable when Part III applies, as indicated in Box 37) 18 (a) The Owners-shall before-and-at-the-time of delivery 19 exercise due diligence-to-make the Vessel seaworthy 20 And in every respect-ready-in-hull, machinery-and 21 equipment-for-service-under-this-Charter 22 The Vessel shall be delivered by the Owners and taken 23 over by the Charterers at the port or place indicated in 24 Box 13, in such ready-safe-berth as the Charterers-may- 25 direct 26 (b) The Vessel-shall-be-properly-documented-on- 27 delivery in-accordance-with-the-laws of the flag State 28 indicated-in-Box-5 and the requirements of the 29 classification-society stated in Box-10. The Vessel-upon- 30 delivery shall have her survey cycles-up-to-date-and- 31-trading-and-class-certificates-valid-for-at-least the number- 32 of months-agreed in 80x-12- 33 (c) The delivery of the Vessel by the Owners and the 34 taking over of the Vessel by the Charterers shall 35 constitute a full performance by the Owners of all the 36 Owners’ obligations under this Clause 3, and thereafter 37 the Charterers shall not be entitled to make or assert 38 any claim against the Owners on account of any 39 conditions, representations or warranties expressed or 40 implied with respect to the Vessel, but-the-Owners-shall 41- be liable for-the-cost-of-but-not-the time for-repairs or 42 renewals-occasioned by latent defects in-the-Vessel, 43 her machinery-or-appurtenances, existing-at-the-time of 44-delivery-under-this Charter, provided-such-defects have 45 manifested themselves within twelve (12) months-after- 46-delivery-unless otherwise-provided in Box-32. 47 4. Time for Delivery (See Clause 34) 48(not applicable-when-Port-Hi-applies, -as indicated-in-Box-37) 49 The Vessel-shall-not-be-delivered-before-the-date 50 indicated-in-Box-14-without the Charterers-consent-and- the-Owners shall exercise-due-diligence-to-deliver-the- 52 Vessel not-later than the date-indicated-in-Box 15. 53 Unless otherwise-agreed in-Box-18, the-Owners shall 54give the Charterers-not-iess-than-thirty (30) running-days 55 preliminary-and-not-less-than-fourteen (14) running-days 56 definite-notice of the-date-on-which-the Vesselis 57 expected to be ready-for-delivery. 51 58 The Owners shall keep the Charterers-closely advised 59 of possible changes in the Vessel’s position, 60 5. Cancelling (See Clause 33) 61(not-applicable-when-Part-lil-applies, as indicated in Box-37) 62(a) Should the Vessel not be delivered latest-by-the- 63cancelling date indicated in Box-15, the Charterers-shall 64-have-the-option-of-cancelling-this-Charter-by-giving-the- 65 Owners notice-of-cancellation-within-thirty-six-(36)- 66-running-hours-after-the-cancelling-date-stated-in-Box 67 15, failing-which-this-Charter-shall-remain-in-full-force 68-and-effect 69(b) If it appears-that-the-Vessel will be delayed beyond 70 the cancelling date, the Owners-may-as-seen-as-they- 71are-in-a-position-to-state-with-reasonable-certainty-the- 72-day-on-which-the-Vessel-should-be-ready, give notice 73 thereof-to-the-Charterers asking whether-they-will- 74 exercise-their-option-of-cancelling, and-the-option-must- 75-then-be-declared-within-one-hundred-and-sixty-eight- 76 (168) running-hours-of-the-receipt-by-the-Charterers-of- 77such-notice-or-within-thirty-six-(36)-running-hours-after- 78-the-cancelling-date, whichever-is-the-earlier-if-the- 79 Charterers-de-not-then-exercise-their-option-of-cancelling 80 the seventh-day-after-the-readiness-date-stated in the 81 Owners’ notice shall be substituted-for-the-cancelling- 82 date indicated-in-Box-15-for-the-purpose-of-this-Clause-5 83 (c) Cancellation-under-this-Clause-5-shall-be-without- 84 prejudice-to-any-claim-the-Charterers may otherwise- 85-have-en-the-Owners-under-this-Charter 86 6. Trading Restrictions (See also Clauses 39.9(d) and 53.1(c)) 87 The Vessel shall be employed in lawful trades for the 88 carriage of suitable lawful merchandise within the trading 89 limits indicated in Box 20. 90 The Charterers undertake not to employ the Vessel or 91 suffer the Vessel to be employed otherwise than in 92 conformity with the terms of the contracts of insurance 93 (including any warranties expressed or implied therein) 94 without first obtaining the consent of the insurers to such 95 employment and complying with such requirements as 96 to extra premium or otherwise as the insurers may 97 prescribe. 98 The Charterers also undertake not to employ the Vessel 99 or suffer her employment in any trade or business which 100 is forbidden by the law of any country to which the Vessel 101 may sail or is otherwise illicit or in carrying illicit or 102 prohibited goods or in any manner whatsoever which 103 may render her liable to condemnation, destruction, 104 seizure or confiscation. 105 Notwithstanding any other provisions contained in this 106 Charter it is agreed that nuclear fuels or radioactive 107 products or waste are specifically excluded from the cargo permitted to be loaded or carried under this 108 109 Charter. This exclusion does not apply to radio-isotopes 110 used or intended to be used for any industrial, 111 commercial, agricultural, medical or scientific purposes 112 provided the Owners’ prior approval has been obtained 113 to loading thereof. 114 7. Surveys on Delivery and Redelivery (See Clauses 41.8 and 41.9) 115 (not-applicable when Part-li-applies, as indicated in Box-377 116 The Owners-and-Charterers-shall-each-appoint 117 surveyors for the purpose of determining and agreeing 118 in writing-the-condition-of-the-Vessel-at-the-time-of- 1-19-delivery-and-redelivery-hereunder-(if applicable) The Owners-shall 120-bear-all-expenses-of-the-On-hire-Survey-including loss Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. reproduction or distribution of this BIMCO SmartCon document will First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.

 



 

 

PART II BARECON 2001 Standard Bareboat Charter 121-al-time, if any, and the Charterers shall bear all expenses 122-of-the Off-hive-Survey including loss of time, if any, at 123-the-daily-eau-valent-to-the-rate-of-hire-of-pro-rata-thereal 124 8. Inspection (See Clause 54) 125 The Owners shall-have-the-right-of-any-time-after-giving 126 reasonable-notice-to-the-Gharterers to inspector-surly 127-the-Vessel-or-instruct-a duly-authorised surveyer-to-carry 128-ech-survey-on-their-behalf 129-(0)-to-ascertain the condition of the Vessel and satisfy 130-themselves that the Vessel is being properly repaired 134 and maintained-The-costs-and-fees for such inspection 132-or-survey-shell-be-paid-by the Owners-unless-the-Vessel 133Sound to requirerepaits-or-maintenante-in-order-to 134 achieve the conditionso provided 135-(blin-dry-dock if-the-Charterers-have-not-dry-docked- 136-He in accordance with Clause-10(g) The costs-and-fees 157-for-such-inspection or survey shall be paid-by-the 138-Charterers, and 139 (c) -for-any other commercial-reason-they consider 140-necessary-(provided it does not unduly-interfere with 141-the-commercial operation of the Vessel) The costs and 142-4ees-for-such inspection-and-survey shall-be-paid-by-the 143-Owners 144-All-time used in respect of inspection, survey-or-repairs 145-shall be fer-the-Caterers account-and-farm-part of the 146-Charter Period. 147 The Charterers-shall also permit the Owners to inspect 348 the Vessels-log-books whenever requested and shall 149-whenever-required-by-the Owners furnish them with-full- 350-information regarding-any-casualties or-other-accidents 151-or-damage-to-the-Vessel 152 9. Inventories, Oil and Stores 153-Acomplete inventory of the Vessel’s-entire-equipment 154-outfit including spare-parts-appliances-and-of-all- 155-consumable-stores-en-board-the-Vessel-shali be made 356-by the Charterers in conjunction-with-the-Owners-on 157-delivery and again on redelivery-al-the-Vessel-The 158-Charterers and the Owners, respectively, shall at the 159-time-of-delivery-and-redelivery take over and pay-for-all- 160-bunkers, lubricating oil, unbroached provisions, paints, 361-ropes and othe-consumabie-stores (excluding-spare 162-parts) in the said-Vessel at the then-current-market-prices 163 at the ports-of-delivery-and-redelivery-respectively the 164-Charterers shall ensure that al-spare-parts-listed-in-the- 365inventory and-used-during the Charter Period are 166-replaced-at-the expense prior to sedelivery-of-the- 167 Vessel 168 10. Maintenance and Operation 169 (a)(i)Maintenance and Repairs-During the Charter 170 Period the Vessel shall be in the full possession. 171 and at the absolute disposal for all purposes of the 172 Charterers and under their complete control in 173 every respect. The Charterers shall maintain the 174 Vessel, her machinery, boilers, appurtenances and 175 spare parts in a good state of repair, in efficient 176 operating condition and in accordance with good 177 commercial maintenance practice and, except-as 178 provided for in Clause 14/10, if applicable, at their 179 own expense they shall at all times keep the 180 Vessel’s Classification Glass fully up to date with the Classification 181 Society indicated in Box 10 and maintain all other 182 necessary certificates in force at all times. 183 (ii) New Class and Other Safety Requirements in the 184 event of any improvement, structural changes or 185 new equipment becoming necessary for the 186 continued operation of the Vessel by reason of new 187 class requirements or by compulsory legislation, the costs of compliance shall be for the Charterers account, 188-costing (excluding the Charterers loss of time) 189-more than the percentage stated in Box-23, or if 190-Box-23-is-left-blank-5-per-cent-of-the-Vessels 490-insurance-value-as-stated in box-29, then the 392-extent if-any-to-which-the-rate-of-hire-shall be varied- 193-and-the-ratio-in-which-the-cost-of-compliance-shall 194 be shared-between-the-parties concerned in order 195-10-achieve a reasonable-distribution-thereof.as 196 between the Owners-and-the-Charterers-having 197-regard, inter-ailato-the-length of the period 198 remaining-under-this-Charter-shali-in-the-absence 199 of agreement, be referred to the dispute resolution 200-method-agreed-in-Clause-30. 201 202 (iii) Financial Security-The Charterers shall maintain financial security or responsibility in respect of third 203 party liabilities as required by any government , 204 including federal, state or municipal or other division 205 or authority thereof, to enable the Vessel, without 206 penalty or charge, lawfully to enter, remain at, or 207 leave any port, place, territorial or contiguous 208 waters of any country, state or municipality in 209 performance of this Charter without any delay. This 210 obligation shall apply whether or not such 211 requirements have been lawfully imposed by such 212 government or division or authority thereof. 213 The Charterers shall make and maintain all arrange- 214 ments by bond or otherwise as may be necessary to 215 satisfy such requirements at the Charterers’ sole 216 expense and the Charterers shall indemnify the Owners 217 against all consequences whatsoever (including loss of 218 time) for any failure or inability to do so. 219 (b) Operation of the Vessel - The Charterers shall at 220 their own expense and by their own procurement man, 221 victual, navigate, operate, supply, fuel and, whenever 222 required, repair the Vessel during the Charter Period 223 and they shall pay all charges and expenses of every 224 kind and nature whatsoever incidental to their use and 225 operation of the Vessel under this Charter, including 226 annual Hag-State fees of the Flag State and any foreign general 227 municipality and/or state taxes. The Master, officers 228 and crew of the Vessel shall be the servants of the Charterers 229 for all purposes whatsoever, even if for any reason 230 appointed by the Owners. 231 Charterers shall comply with the regulations regarding 232 officers and crew in force in the country of the Vessel’s 233 flag or any other applicable law. 234 (c) The Charterers shall keep the Owners and-the 235 mortgageels) advised of the intended employment, 236 planned dry-docking and major repairs of the Vessel, 237 as reasonably required. 238 (d) Flag and Name of Vessel-During the Charter 239 Period, the Charterers shall have the liberty to paint the 240 Vessel in their own colours, install and display their 241 funnel Insignia and fly their own house flag. The Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.

 

 



 

 

PART II BARECON 2001 Standard Bareboat Charter 242 Charterers shall also have the liberty, with the Owners’ 243 consent, which shall not be unreasonably withheld, to 244 change the flag and/or the name of the Vessel during 245 the Charter Period (with all fees, costs and expenses arising in relation thereto for the Charterers’ account). Painting and re-painting, instalment 246 and re-instalment, registration and re-registration, if 247 required by the Owners, shall be at the Charterers’ 248 expense and time. 249 (e) Changes to the Vessel-See Clause 53.1(j). Subject-to- Clause-10(a)(), 250 the Charterers shali-make-no-structural changes-in-the- 251-Vessel-or-changes in-the-machinery, boilers, appurten- 252-ances-or-spare parts thereof-without in each-instance 253-first-securing the Owners-approval-thereof. if the Owners 254 so agree, the Charterers-shall, if-the-Owners-so-require 255-restore the Vessel to-its-former-condition before the 256-termination-of-this Charter: 257 (f) Use of the Vessel’s Outfit, Equipment and 258 Appliances - The Charterers shall have the use of all 259 outfit, equipment, and appliances on board the Vessel 260 at the time of delivery, provided the same or their 261 substantial equivalent shall be returned to the Owners 262 on redelivery in the same good order and condition as 263 when received, ordinary wear and tear excepted. The 264 Charterers shall from time to time during the Charter 265 Period replace, renew or substitute such items of equipment as shall be so 266 damaged or worn as to be unfit for use. The Charterers 267 are to procure that all repairs to or replacement of any 268 damaged, worn or lost parts or equipment be effected 269 in such manner (both as regards workmanship and 270 quality of materials) as not to diminish the value of the 271 Vessel. Title of any equipment so replaced, renewed or substituted shall vest in and remain with the Owners. The Charterers have the right to fit additional 272 equipment at their expense and risk but the Charterers 273 shall remove such equipment at the end of the period if 274 requested by the Owners. See also Clause 53.1(1). Any equipment including radio 275 equipment on hire on the Vessel at time of delivery shall 276 be kept and maintained by the Charterers and the 277 Charterers shall assume the obligations and liabilities 278 of the Owners-under-any-lease-contracts-in-connection 279 therewith-and shall reimburse the Owners for all 280 expenses incurred in connection therewith, also for any 281 new equipment required in order to comply with radio 282 regulations. 283 (g) Periodical Dry-Docking - The Charterers shall dry- 284 dock the Vessel and clean and paint her underwater 285 parts whenever the same may be necessary, but not 286 less than once during the period stated in Box 19 or, if 287 Box 19 has been left blank, every sixty (60) calendar 288 months after delivery or such other period as may be 289 required by the Classification Society or flag State. 290 11. Hire (See Clause 36) 291 (a) The Charterers shall pay hire due to the Owners 292 punctually in accordance-with-the-terms-of-this-Charter- 293 in respect-of-which-time shall be-of-the-essence. 294 (b) The Charterers-shall pay-to-the-Owners for the-hire 295-of-the-Vessel a lump-sum-in-the-amount-indicated-in 296 Box-22 which-shall-be-payable-not-later-than-every-thirty 297-(30) running days in advance, the-first-lump-sum-being 298 payable on the date and-hour-of-the-Vessel’s-delivery-to- 299 the Charterers. Hire-shall-be-paid-continuously 300-throughout-the-Charter-Period 301(c) Payment-of-hire shall be made in cash without- 302 discount-in-the-currency and in the manner-indicated-in 303 Box-25-and-at-the-place-mentioned-in-Box-26. 304-(d)-Final-payment-of hire, if for a period of less than- 305 thirty (30)-running-days, shall-be-calculated-proportionally- 306-according-to-the-number-of-days-and-hours-remaining 307-before-redelivery-and-advance payment to be effected 308-accordingly. 309(e) Should the Vessel be lost-or-missing, hire shall 310-cease-from-the-date-and-time-when-she-was-lost-or-last- 311 heard of The-date-upon-which the Vessel is to-be-treated 312-as-lost-or-missing-shall-be-ton (10) days after the Vessel 313-was-last-reported-or-when-the Vesselis-posted-as- 314-missing-by-Lloyd’s, whichever occurs-first. Any-hire-paid 315in-advance-to-be-adjusted-accordingly. 316 (1) Any-delay-in-payment of hire shall entitle-the- 317 Owners to interest-at-the-rate-per-annum-as-agreed- 318 in Box-24. If Box-24 has not been filled in, the three months 319-Interbank-offered rate in London (LIBOR or its successor) 320-for-the-currency-stated-in-Box-25,-as-quoted-by-the-British- 321 Bankers Association (BBA)-on-the-date-when-the-hire 322-fell due, increased by 2-per-cent, shall apply 323 (g) Payment-of-interest-due-under-sub-clause-11(4)- 324-shail-be-made-within-seven-(7)-running-days-of-the-date- 325 of the Owners-invoice-specifying-the-amount-payable 326 or, in the absence-of-an-invoice,-at-the-time-of-the-next- 327 hire payment-date. 328 12. Mortgage (See Clause 62) 329 (eniy-to apply if Box 28 has been appropriately filled in) 330 ) (a) The Owners warrant that they-have-not-effected 331 any mortgage(s) of the Vessel-and-that-they-shali-not- 332-effect-any-mortgage(s) without-the-prior-consent-of-the- 333 Charterers, which shall not-be-unreasonably withheld 334) (b) The Vessel-chartered-under-this-Charter is financed 335 by a mortgage according to the Financial Instrument. 336 The Charterers undertake to comply, and provide such- 337-information and documents-to-enable-the-Owners-to- 338-comply, with all-such-instructions-or-directions in regard- 339-to-the-employment, insurances, operation, repairs and 340 maintenance-of-the Vessel-as-laid down in-the-Financial 341 Instrument-or-as-may-be-directed-from-time to time-during- 342-the-currency of the Charter-by-the-mortgageefstin- 343-conformity with the Financial Instrument: The Charterers- 344-confirm that, for this purpose, they have acquainted- 345-themselves with ali relevant terms, conditions-and- 346 provisions of-the-Financial Instrument-and-agree-to 347 acknowledge this-in-writing-in-any-form-that-may-be- 348-required-by-the-mortgagee(s). The Owners warrant-that- 349-they-have-not-effected-any-mortgage(s) other than-stated- 350 in Box-28-and-that-they-shail-not-agree-to-any- 351 amendment-of-the mortgage(s) referred-to-in-Box-28-or- 352-effect-any-other-mortgage(s)-without-the-prior-consent 353-of-the-Charterers, which shall-not-be-unreasonably 354 withheld. 355 (Optional, Clauses-12(a)-and-12(b)-are-alternatives; 356 indicate alternative agreed-in-Box-28) 357 13. Insurance and Repairs (See also Clause 39) Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of t this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.

 



  

PART II BARECON 2001 Standard Bareboat Charter 358 (a) During the Charter Period the Vessel shall be kept 359 insured In ac.rordance With Clause 39 andby ~ GhlH~Fef5-i:l-l:--tAelr~xfleR5e against hull 36G------arul-mil€hiflff~n~~eFI-ilrul--ffiaeffiflity-Tisks- 36±------faR&-il ny risks agaif\5t-whiffi-+t:-i5-€6mpulsery-t-e--iffillie~ r--tAe-Bflefatien-ef the Vessel, including but not limited !Q_maintaining 363 financial security in accordance with sub-clause 364 10(a)(iii)) in such form as the Owners shall in writing 365 approve, which approval shall not be un-reasonably 366 withheld. Such insurances shall be arranged by the 367 Charterers to protect the interests of both the Owners 368 and the Charterers and the Owners’ Financiers mer-tgagee{-5)-(if any), and 369 The Charterers shall be at liberty to protect under such 370 insurances the interests of any managers they may 371 appoint provided such manager has entered into a manager’ s- 1.lhde rtak! ng in form and substance acceutable to the Owners and the Owners’ Financiers .ilf..£m1. Insurance policies shall cover the Owners, the mortgagee(s) (if any), he appo nted milnagers, and 372 the Charterers according to their respective interests. 373 Subject to the provisions of the agreed loss payable dauses, mafl€ial--lR5fFtlmeffi;-#- 374 aflV;- and the approval of the Owners and the insurers, 375 the Charterers shall effect all insured repairs and shall 376 undertake settlement and reimbursement from the 377 insurers of all costs in connection with such repairs as 378 well as insured charges, expenses and liabilities to the 379 extent of coverage under the insurances herein provided 380 for. 381 The Charterers also to remain responsible for and to 382 effect repairs and settlement of costs and expenses 383 incurred thereby in respect of all other repairs not 384 covered by the insurances and/or not exceeding any 385 possible franchise(s) or deductibles provided for in the 386 insurances. 387 All time used for repairs under the provisions of sub- 388 clause 13(a) afl&-fer repairs of latefi-Hlefe€t-s-ttEmr4Rg- 389 tetli*!se-3{€)-.1aGVe, including any deviation, shall be 390 for the Charterers’ account. 391 (b}-lf-#le-€6Haffiens-ef-#!e-al3eve-iflsurances per-m+t~ ffit~enal-+nsw;mce-te--Be-fll<!~~e-flaffie5-;-5tl€A-- 39-3-cever-sfiaH--l:Je-lirn#ed to the amount for each-iJarty-sel:- 394 out in B0*-3G-afla-Bol< 31, respectively, The Qwner-s-er- 395 the Charterers as-the-tase-may--l:Je shall immediately 396 furnish the ethe~rtv~ with particulars of any additional 397 insurance effected, including copies of any cover notes 398 or policies and the written consent of the insurers of 399 any such required insurance in any case where the 400 consent of such insurers is necessary. 401 (c) The Charterers shall upon the request of the 402 Owners, provide information and promptly execute such 403 documents as may be reasonably required to enable the Owners to 404 comply with the insurance provisions of the Financial 405 lnstrument J.lf..!!.mi 406 (d) Subject to the provisions of the Financiallnstru- 407 ments and dause 43, if any, should the Vessel become .!!.. Total LO!;S, a”-aEtHal, 408 _ cef\Stfu ffive,-cei1RflFGFF\ise&-er-agreea-tetal-less-Hnaer- 4G9--t-R€-insur-an€eS-feEjtlire9--tinaer-sliD-Eiause 13(a). all 410 insurance payments for such loss shall be paid to the 411 Owners {or, if applicable, the Owners’ Financiers} in accordance with the agreed loss payable clauses. wfie- 5AalHJ.ist-fffit!t-e-the-meneys--l:JetweeR-he~ na--tAe-Gtar-tefer-5-iK-€8r-diflg-te--theif...re.sf)effive- 413 interests. The Charterers undertake to notify the Owners and the Owners’ Financiers. 414 an4-tl1e mertgagee(s). if any, of any occurrences in 415 consequence of which the Vessel is likely to become a 416 tiotal l.b,oss~ a£-definea in this Clauseo 417 (e) The Owners shall upon the request of the 418 Charterers, promptly execute such documents as may 419 be required to enable the Charterers to abandon the 420 Vessel to insurers and claim a constructive total loss. 421 (f) For the purpose of insurance coverage against hull 422 and machinery and war risks under the provisions of 423 sub-clause 13(a), the value of the Vessel is the sum 424 indicated in Clause 39.B&~ 425 14. Insurance, Repairs and Classification ~tlalrBf’IY·<IHlpp/y.ij-elfpFe55/}’-0f!FEe£1-eflfi..sffifeti- 4 27 iR Be1C~fT-WhiEit-ev€Rt-QetJse--1-3-5hell-ee-roRSiiieFed~ elfferJ+ 429 (a) During-the Charter PeFieEI-the-VessekAaU-Be-*ej:lt:- 430 insured ey-tfle-Qwner-5-ttt:-theif-e.xf)efl5e-ttgainst hull and 43±----maffiifl~~elicy-eF~ eliEie-s-attaffiffi-.A.ereto. The Owners and/or insl/fefS- 433---s~Tall-Aet--flave.-any-rig!Tt-ef-r~ver-y-ef-Slffirega-tien- 4 3 4 a ga i nst:-t-R e C h a rt ere r-s-efl-i!EC-e\ffit-ef-less-ef-eF-ifR-Y~ age-te-ihe-\/~el-er--fler--ffiilffiinery-eF-ilj3J:HJft- 436 enance5-€6Ver~ttc-e;-er-eFI-ilccount of 43-7-----f)ayment-5--ffli!Be--te4isffiar-ge-Ba+ms-agaiflst--eHiaailffies- 4-3&--e-f-the-Vessel-ef-the-GwnefS-€8ver~ffi-insur-afl~ 4 3 9 Ins u ra nEe-flelities-sAall-tGvef-the-Ownffs.-i!na--tAe- 4 40 Charteref5-i!Emffiing-te-#leif-fespe€tive interests. 44±---(b}-fl uri ng-t-Re-C--flar-ter--Periea--tAe-Vesse+-4all--l:Je-kept~ nsures-ey--th~rer-5-ttt:-their-el<j:lense-agaifl5t- 4 4 3 Prete c-tieFI-i!Rs--lffilem.nity-risk-s--farul-an-y-r-isks-i!ga-iRst:- 444---whlffi-it-is-€empulser-y-te-+nsur-e--fer--tAe-e13er-atien-ef-#le- 44-5--Ve-ssel,inclutling-ma-int-a-iniflg-ftRafl€ial-seruffiy-in- 446--a€cer-di!n€e-Wi-tfl-soo-c-li!<!-se-lG{-at{-iiit)-+n-sHcMeFffi-ils- 44-~rl~e-Qwrr~-Hnalf..lfl.l_.,..rl ng-appr-eve-wfli~i!ll- 44&----net-BEH.rru:easonably..wil!-\h I~ 449---fc+Jn-t-he-eveffi-~r--negltgen€e-ef~e- 46G----Gflartffff-s-sAall-v+tiate-af!Y-8f-t-he-i n sura n ce herein- 4-5±------flroviaea,..#t~rers shall pay-t-e-t~e-Gwtters-all~ se-s-ttna-inaemnify-t-he-Qwner-5-i!gaif\st--all cia i ms a n9- 4-53----EI~er-wise-have-Been-€GIIefea.-l:Jy- 464----slK-h-insw-ance-c 4§3--(dt-The-bfiaftefffS-5~~13felliiH*-tfie- 4-5&-Gwners or OWflefS’-tJRaefWfiters, effect aiHfls.urea- 4!>+----f-ef)a-irs, a n d the C hafterefS-Sflall-tinaer-take-settlemCflt- 468----ef-all-mis€elli!ne81f5-e)(fle n ses in conn ecti en-wi-tft..sHffi.- 4§9---repairs as well as all insures charges, el<l3ense5-ilf\9- 460--liiffiiltties,--te the el(tent of ceverage-tlfl6er--tAe-insur-aR€e5- 4&±----flFG~aer-t~e-f)revisiens-ef-su&-€1illi-se--14fa+- 462 The Charterers to be-seatre<H-eirnbursement threttgf!- 463 the Owners’ UnaeJWr~enffittlfe5--HfH*l- 464 presentation of accounts. 4 55 (e) The Ch a rte re rs to-rema-ifl-respensiBle-feF-i:lf\6.-te- 465 effect re13airs and--settlement of costs and el<FJefl5es- Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.

 



  

PART II BARECON 2001 Standard Bareboat Charter 46+----iAruff-e&-ttlereay-ifl-r-esf3eE-H>f-all-el’her--r-epak-5-fiGt- 4&8--c-elleFeG-ay-#le-in5<~r-aflEe5-afld,ier-Aet--exreediAg--any- 469----j3e55ible--fr-a Affii£ef5j-er--Geffilc-tiale5-J*0viaed-f-er--if1-the- 4+G----iA5HFaflre!r. 4+1---{-ij-Ail-Hme-<~sed-f-eF-fej:lair-nJAeeHI1€-f3F011i5i0fl5-Bf~~ ause5--l-4-f6j--aA d 11 (e) a AEI-ffiHel3aif5-ef-lateAt~ efeEt-s--ac-c-effiiflg-t&-Q~eve,--tAffileiAg--aRV- 4+4---fleviat-i~ii-1:Je--fef-t-fle-{:---ihlr-t-er-er-?-ac-c-e~o~At--aA6-5ihlll- 4-7-3----ffif-m-j3af-t--ef--#le-Giafte-f-Pefioo” 4-76----+Ae-GWAer-5-5Hall-Ret-be-Fe513eA5ffile--fer aAy e><f3eAses 4H---a£--ar-e--i-00eeffi-ffi-#le-<~5e--aRd-eJ:Jefilt-ieFKJf-t-he-Ve£Sel- 4+&-f~me as may be-Fef!tlifed-te make suE-h--Fej:lair-5-c 4+9---{-gHkAe-E0RdffieRS--ef--l-he-abeve-ifl5tlraAC-e5-fl€Fffiit- 48Q--aaffitieR~-€-ffi--l:Je-f)JaEed-B-y-t-h€-j3artte5-5UC-fJ- 48-l----tevef-5flall-be-Jimited-t€>-#l e--am01ffit-fur-eaffi--j>aJ”-ty-5et~ i rrBo ~Ad--BGx-a!-, r~spelit-lvely41Je-Qwne~I ~ Re-G1M-t-er-er-5--aHRe-taSe-may-be-5Rall-immediately- 48 q fum is 11 t lie-el’hef--J}a rty--wit/t-j3ar-tiEiilaf5-0f--aRy--a€ai-tieAal- 4&5----iflwraRC-e--effeEted-;-iRC-HKiiRg---ffiJ:Jie5-ef--afly-c-ellff-flet-es- 48G----er-peliEie5-ane-tAe-wr-it-te-A--Eefl5eRt ef tlie iA5m-er-5-0f- 48+--aflY-suffi-refjllife&-iAwraREe-i!t--afly-e--ase-wfter-e-tAe- 48&---Eefl5eRt--ef-5uE-h-iflsBFer-5--i£-fleEeS~ 489-(-h~lieiile-tAe-\.le55el-beEeme-aR-aEt-Hai,ten5t-ruc--tiv-e,- 49Q--c-eml3r-emisefl-e-r-a~G55--lffleer-tAe-ifl5lliilflEe5- 49±-----refluir-eG-uAaef-5\J l:>-c-lil-ll5€-±4{-a},--all-ifl5tlfa REe-pa-ymefl& ~ffir--s1Jffi-Je55-51tall-ae-f)aie-te-tl1e-Gwner-s,-wh0-5hal~ 49J---Si5trib1Jt-e-tAe-meAeys-l:Jet-w-eeR-tAemselve5--aRG-fhe- 494--C--har-tefff5-aC-c-effii Ag-te--tReif-fe513eE-tive--iflteF-5-c 49-5---fi}-+f--#le-\.le55el-bewme5--afl--a Et-t~ah-Eefl5tr-HE-tive, 496-<:-empr-em-ised-er-aw-ee€1-t-etai-Je55-uflaer-t-h~€€5- 49+---a-rraflg€€1-13y---Ehe-GWRer-5-ifl-aEEerdaf!Ee--With-5<~9-c-la-1Jse- 498---±4fa-)-;-t-hi5-{:---ihlJ”-t-er--sflal~-e-rmiAate-a5-0-f-t-he-dat-e-ef-suffi- 499----l~ 3QQ-(j)-T-he-G1M-ter-er-5-5Hall-l!j3efl-tAe-r-e€11Je5t--ef-tfte- 3Ql----Qwfle&,-pr-emj3tly--el;eE~E-h--Gerumeflt5-a5-m ay-be §Q&-r-e~ale-l’he-GWAer-5--te-abaA€1eR-the-\.le55el- 3W----te-the-iflwfers-aA€1-c-laim--a-ESA5trlJEt-ive-tet-ai-Je~ §Q4---{k-j-Fer-t-h€-J:11Jr-J3ese-ef-iA5l!r-aflte-e-eveFage--aga-ifl5t--h-HII §~d-m-affi-iflept-aAd-wa-H-i5ks-1JA€1er-t-h€-f3r-el!i5iefl5-Sf §Q6----wiJ-Eiause--l-4fi3t,--t-he-va-11Je-ef-tRe-\.le55el-i5-tRe-5l!m~+--- iAEliEate€1-iR-B~ 3Q8-{J~-NBt-w-il’h5taAGiAg-aAY-EfliAg-c-eA-taine€1-iA-5Ul:J-c-J-al!se §G9---±G(-ah-it-is-agr-ee€1-t-hat-liooff-tfte-J:JFevi5iefl5-ek:---lause- 510 1 q, if-aJ:113Iic-able,--tfl-e-GwAer-5-5Aill ~~t-he-Vessel+ §±-l----Gia55-fu-lly-u\}-t-e-tlate-wi#t-t-he-tla-55ific-at-ieF!-!;ec-iet-y §±2----imli€ate€1-iA-Bex-±G-aRd·ma-iA-tafA-all--etoher Aecessary §1~--efti-ficates iA ferce at-al~tim~ 514 15. Redelivery (See Clauses 41 and 42) §-l-§--AH-he-exf*at-i0FKlf-the-C---ihll”-ter-Per~ed-t-he--V€55ei-5Rall §-l-&---13e-redeliver~rtere&t-e-tAe-GWA€-F-5-at--a- 517 safe a Aa-iEe-fJ”-ee-f)ert-el”-plaE-e-a-5-iAGiEat-e€1-iA-86)(-1-6,-ifl~ c-A-reae~erl’h-as-tAe-Gwner-s---may--OO--ec+.-+Ae §.±9----GAarterer-5-5Aall-give-l’he-GWfler-s-ABt-le55-t-ha-A-t-hirty~ Qj-rnRRiflg days’ pre I i miflafy-flet-i~ett-efl-date,~ ge-ef-J3ert5-0-f-reaeliv-ery-ef-13ert-Bf-13lilte-ef--J--eflelivepy- 3H----a-R€1-Aet-le55-tA-an-feur-t-eeR-(~e#Aite §B--rlet-iEe-ef-eJ<-flec--te-Eklat-e-aRd-J:10Ft-ef-j3iilte-ef-retle-liver-y-o~ AY---ffiaRges-tAefeafter-iA-t-he--Ve55el’-5-j3e5it-iefl-5ftall-be~ etffi~e-GWAer-5-c ~e-G1artefer5-W-arra-At-t-hat-l’hey-wiii-Aet-\}erfflit-t-he- 5 27 Vesse-1-te-ffimm eAEe-a-veyage-(iflc-llJdiRg-afi-YilreEediAg- ~alla5t-veyage}wftiffi-€il-Rn0H-ea-5eRabfy-be-ex-pected §29---te-be-Eemplet-e6-iA-t~me-te-a~ew-redelivery-ef-t-Re-\.le55e~ ~-hifl-t-he-tAarter-Jl-eriefh----NefWithsta-AGiAg-the-abeve, §~----5ftel!i€1-t-he-G1-art-eref-5-fail-t-e-r-eflelivef-tl1e-\.lessel--wil’hifl §~e-C---ihlrt-er-Periea,t-hetflaJ”-t-erer~y-tl1e-Bail-y~ ivaie-At-te-ti1e-rat-e-ef-hlre--s-tat-ea-ifl--gex-N--pll!s-W- 3J4---j3er-EeAt--ef-tB-tA e-mafket-rate,-wAiERever--i5--tfle-hi glier, §J-§..-fer-the-Rl!ffiber--ef-Bays-By-wh iffi-t-Retfl-a r-te-F-Pefied-i5- ~6--eJ<C-eeae4----AII-etReH-effA5;-{:-eRaitiefl5-afla--J3r-evi5ieAs-efS- 3-7--tl1-istAarter--sRall-c-e A-tiflue-te-a\}J:Jiy-, S-38-----S-lffijeEt-te-tA€-f3r-el!i5i0fl5-ef.Gial!Se-10;--the-Ve55€1-sflaiiS- 39--Ge--reflelivff-e6-t-e-the-GWAff-5-i-fl.-tRe-5ame-er---as-geea §4Q----stJ--tJC-t-lfl”-e,-st-a-te,-€eA€1 itien-amJ-c~a55--a5-tAat-iA-wR-iEA-5Ae §4±----wil5--tleliverea,-f-air-w-ear--aREl-tear-Rot affectiAg cla55- ~-c--€ftt€d” §4-3--The--Ve55el-\tj3eR-fedelivery-5Rall-have-her--51J-FVey-tytles §44----ll13-te--tlat-e-aAa-tJ”-ae iA g-aR&-Eia5s-Eer-tific-at-e£-vali G-ffir--atS4- 5----Iea-5t-tfte-ACJmbef--Elf-meRl’h5--agree€1-iA-B6)(-±+.- 546 16. Non-Lien 547 The Charterers will not suffer, nor permit to be continued, 548 any lien or encumbrance incurred by them or their 549 agents, which might have priority over the title and 550 interest of the Owners in the Vessel. The Charterers 551 further agree to fasten to the Vessel in a conspicuous 552 place and to keep so fastened during the Charter Period 553 a notice reading as follows: 554 “This Vessel is the property of (name of Owners). It is 555 under charter to (name of Charterers) and by the terms 556 of the Charter Party neither the Charterers nor the 557 Master have any right, power or authority to create, incur 558 or permit to be imposed on the Vessel any lien 559 whatsoever.” 560 17. Indemnity (See Clauses 38.3, 39.14, 39.15, 39.16, 39.17, 41.4. 44. 53.1(j), 57 and 58) §6±----{-a-}-The-(;1-larterers sliall in€1emR-ify-t-he-GWRer5--agaiA5t §62--aflY-Ies5;-tlam-age-ef-elfj3efl5€-iflE<Iff€fl--by-tAe-GWAer-s- 36~fi5iAg-eHt-ef-er-in-r-ela-tieA-te-tRe--e!3ffa-tien-eH:-Re-\.lesseiS64---- I:Jy---Ehe-C--hilr-t-er-er-s,-aR€1-against-a-Ay-lieA-ef-wRat5eever §6-5----flatlli-e-ar~5iflg-el!t--ef-aR-€VeRt-0EEHFriflg-tl-\friAg-tAe §e&---C--flart-eJ”--PefieEh-----#--tfte--Ve5se~e--arr-ested-er-etfterwi5e §&7---det-aiR-ed--by--1--ea-seA-ek-1 aim5-er-liefl5-arisiRg-elJ t-ef-Rer §58--eJ:Jer-at-ieA-her-e<~Aeer--By-t-he-G!ar-teFer-s,-t-he-tAM-t-e-rer-5- §69----shall-at---tReir-ewR-e-><-peRse-take-all-r-easeAilhle--stej3s-te- 570 secure tHat withiA a reaseAiillle--time-t-he-\.le5seH5- S1-l---r-eleased-;-iflooe-iA g-tA€-f3 r-evisioo-ef-baih SH---Wit-hel!t-13r-ej-ueite-te-t-he-generality-ef-t-he--feregeiRg,-the~--- ihlr-t-er-er5--agree-t-e-iAdemftify-ti1e-GWA er5--agaiA5t--all §.74-cefl5e€11JeAc-es-Bf-liaaili-tie5---ari5iAg-frem-t-he-Mils-t-er,- 3+-5----e#irer5-er-ageRt-5-5igRiAg-Sills-ef-b3ding-er-et-her §-7&---flerumeR&. §-7-7-(-b}-+f--the-\.le55el-be--af-Fe5{eti-Br-etoherwi5e-€1et-aifl-eG-By- S 78 Fe as eA-ef--a--8a-im-eF-EI aiffi5--aga-ifl5t---tfte-GwA-ef5,-tfte- 3-79----GWA€-F5-5flall-at-t-heir-eWfl-eJ<iJeR5e-8ke-ali-reaseAaale §80 steps to sec-lfl”-e-tftat-witRiR-a--reaseRable-time-1’he-Vessel §8±----i5-Feleased-;-iAoo~revi5iGfH3f.-bail-, S~-c-ir-c-ums8AEe5-t-Ae-GWfleFS-5Aall-iA€1emAify-t-he- 3~--har-t-er-ers-aga-ifl5t-a-Ay-les-s,-tlam-age-ef-e)(-J3efl5e §84---iflafff€€1-by---Ehe-Giarterer-s--(iR~a-i€1-l!Rder §8-5----th-is-C---ihl-rtert-as-a-Bifett-Eefl5e€11JeAEe-ef-5Uc-fJ-Mrest-er §8&----tleteR-tie~ 587 18. Lien 588 The Owners t-a-.sha1L have a lien upon all cargoes, sub-hires 589 and sub-freights belonging or due to the Charterers or Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.

 



  

PART II BARECON 2001 Standard Bareboat Charter 590 any sub-charterers and any Bill of Lading freight for all 591 claims under this Charte r~, an&-#!e Charterers to have-a §~eH--eA-t-fle-Ves5el-fef-il~Hfl~frffi-a9vafl€€-i3fla- 593 not earne&.- 594 19. Salvage 595 All salvage and towage performed by the Vessel shall 596 be for the Charterers’ benefit and the cost of repairing 597 damage occasioned thereby shall be borne by the 598 Charterers. 599 20. Wreck Removal 600 In the event of the Vessel becoming a wreck or 601 obstruction to navigation the Charterers shall indemnify 602 the Owners against any sums whatsoever which the 603 Owners shall become liable to pay and shall pay in 604 consequence of the Vessel becoming a wreck or 605 obstruction to navigation. 606 21. General Average 607 The Owners shall not contribute to General Average. 608 22. Assignment,-$uil-Cilar-ter-ami-Sale (See Clause 62) 699---{a) The Charterers shall-Rot assign this Charter ner 610 sub charter-tfle-Ve55ei-BR-iJ-W.feboat basis e><cept-wi#r M±-~r-ier consent in writing-ef-#le Owners, wfliffl...£haH& l~e-t~~ly-wi#lflel&,-afl!kuiljeH-ffi-5tlc-h-terms~- eflffit~eR5-il5-tfle-Gwners shall ap!*ffii€c 61~ (b) The-Gwners shall net-5ell-tfle Vessel during-#le& 1-§-c-Hr-fefl~~~h t !;-(;haflt~K£~t-wt ~ he-pfiGf-Wl’ittef\&± 6--c-ef\5eflt-ef4Ae Charterers, •..vfliffl...£hall-Affi-be-~ofRr-ea5Gfl~ 8,-;Hl!kuiljC€HG-tfle-buyer-aECepting an 618 assigf\FRent-e~ill’ter. 619 23. Contracts of Carriage 620 *) (a) The Charterers are to procure that all documents 621 issued during the Charter Period evidencing the terms 622 and conditions agreed in respect of carriage of goods 623 shall contain a paramount clause incorporating any 624 legislation relating to carrier’s liability for cargo 625 compulsorily applicable in the trade; if no such legislation 626 exists, the documents shall incorporate the Hague-Visby 627 Rules. The documents shall also contain the New Jason 628 Clause and the Both-to-Blame Collision Clause. ~-(-&8-Re-Glhlrte rers are to p rBE~Jre-t-Rat-all-j:la5senger- 6-30 ticl<ets issued suring the Charter Period for the carriage- 631 of passenger-5-iffiG-tfleir-luggage unaer this Charter--shalt~ ffiatA...a-flarameunt clause incor-j3eFi!Bf\g-afly-legi£iat-ien- 6~-elating to carrier’s lia~r-5-iffi8-#teir- 634--1u!if!i!ge-«~mpodklr-Hy-applieab~e-wffiEt*- leg•~ la t·ieJl ·CKJ5!s,l:he-1”’155Elflgef4 i cl<ets shall incorpofate~ e Athens Co~-#te Carriage of 637 Passengers an&-#! eil’-l:!.lgg.,gM\•.SW ,.-~7 , nd-afly~ rotecol thereto. 639---4--De!e~~fJ/iE.rlb/e; 640 24. Banlt Guar-ant-ee 641 fG~flly-if-Box 27fiiled in) 642 TAe-Glhlrter-ers undertak-e-te-f\Jr-flish, before deliver-y--ef- 643 l”l:le-v.essel;--;rfir-sH:-lass-~nk- g;laF<lntee-G F-bond in the- 644 5\fffl-itf\8-at-t-Re--j3\a€e-as-indicatea in BG*-2-7--as gttar-antee- 645 for full performance of their ohligafieFl5-tlft8e~ 646 GRar-ter~ 647 25. Requisition/Acquisition 648 (a) In the event of the Requisition for Hire of the Vessel 649 by any governmental or other competent authority 650 (hereinafter referred to as “Requisition for Hire”) 651 irrespective of the date during the Charter Period when 652 “Requisition for Hire” may occur and irrespective of the 653 length thereof and whether or not it be for an indefinite 654 or a limited period of time, and irrespective of whether it 655 may or will remain in force for the remainder of the 656 Charter Period, this Charter shall not be deemed thereby 657 or thereupon to be frustrated or otherwise terminated 658 and the Charterers shall continue to pay the stipulated 659 hire in the manner provided by this Charter until the time 660 when the Charter would have terminated pursuant to 661 any of the provisions hereof~ always-flr-evitle8--Rewever 662 ~~HJf.!:R~ui~ ~all--kt!’-H ire” any· Requisit~en- 663 ~ire Of-€GffiJ3ef\5iltieA-REeived or receival:Jie-ay-the- 6€i4---Gwflers shall be payal:Jie-te4he-Glhlr-ter-Cf5-ffifr~g-t-Re- &e-5 remainder oft h e-thar-tef-llerie8-er-the-j3efi00-ef...Ehe- &e-6 “Requisitien-for-Hj · v hk:-he\le be-*h!Hheft-er. 667 {bt-ffi-the-event-ef4he-GWflCFS-l3eiflg-tieprived of their 668 GWHership in the Vessei-B~ffil’llisery-A€fltli5i-tien 669 of the Vessel or requisition for--t#le-B~ 670 er-Bt her com pete nt-atJtheffiy-fflereif\aft-ef-fefer-r-e8-ffi.as 671 “Geffil’llisGPf-Aa11Jisi <Jo!A:-th!W;-lr-res peEtive-ef-t-Re-Wt-e 672 ffilfiflg-#te Charter Peried when “Com~~ 673 siBGfl-’C-may-eE€tlf~e-8eeme8 674 terminated as of the date-ef-.5u~Fflfl’llsefV 675 ~~ch event ChaFt-ef-Hife-ffi-l:le-cen5idere8 676 as earned am!-te-ile paid up to the date ana time-ef 677 ~--9ffiJ3ulsory Acquisition”-c 678 26. War 679 (a) &~:~bje~·l•u:·-aFG~~e-RfildRE ;». J.A.s.mJme-A-tz!ff-a!!lA-#..£or the purpose of this Clause, the words “War 680 Risks” shall include any war (whether actual or 681 threatened), act of war, civil war, hostilities, revolution, 682 rebellion, civil commotion, warlike operations, the laying 683 of mines (whether actual or reported), acts of piracy, 684 acts of terrorists, acts of hostility or malicious damage, 685 blockades (whether imposed against all vessels or 686 imposed selectively against vessels of certain flags or 687 ownership, or against certain cargoes or crews or 688 otherwise howsoever), by any person, body, terrorist or 689 political group, or the Government of any state 690 whatsoever, which may be dangerous or are likely to be 691 or to become dangerous to the Vessel, her cargo, crew 692 or other persons on board the Vessel. 693 (b) The Vessel, unless the written consent of the 694 Owners be first obtained and adeguall!. i11surances are obtained (such adea-uacy to be deteremlned by the Owners (acting reasonsbly\l, shall not continue to or go 695 through any port, place, area or zone (whether of land 696 or sea), or any waterway or canal, where it reasonably 697 appears that the Vessel, her cargo, crew or other 698 persons on board the Vessel, in the reasonable 699 judgement of the Owners, may be, or are likely to be, 700 exposed to War Risks. Should the Vessel be within any 701 such place as aforesaid, which only becomes danger- 702 ous, or is likely to be or to become dangerous, after her 703 entry into it, the Owners shall have the right to require 704 the Vessel to leave such area. 705 (c) The Vessel shall not load contraband cargo, or to 706 pass through any blockade, whether such blockade be 707 imposed on all vessels, or is imposed selectively in any 708 way whatsoever against vessels of certain flags or 709 ownership, or against certain cargoes or crews or Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.

 



  

PART II BARECON 2001 Standard Bareboat Charter 710 otherwise howsoever, or to proceed to an area where 711 she shall be subject, or is likely to be subject to 712 a belligerent’s right of search and/or confiscation. +±-3---{d~f-tfle-ifl 5Hr-er-s-ef..#le-war--r isks-ifi51Jraf!Ee,-WAeR 714 C lause-1-4-is-af)flliEasie,sRe~o~l&-f-eq~o~ir-e-paymern..ffi. +’l--3-j:lHomium5-ilflater-Eilll~eEa USe,J3Hr-5uant-te-t-l1e+± 6-Clhl!Wref5-’..Bffier-s,-tRe--Ve55el-i5-witRiR;-Bf-is-Gue-te-ent-er’ 7-±-7--ana-FemairrwitAiR,...a-n-y-iH”-ea-er-ar-eas--wAiffi-ilf€-5j3effiied+±&- by-s-u ffi-iRW Fef5-il~eiRg-slffijea-t-e-aa€1i tie Raf.j:JFemiums+± 9--l:!etause-ef-War-Risks,-t-ReA-5uffi..j:)Femimns-and,lef--€alls’ 7~1-ee-r-eimeur-se8-by-t-Re-C-l1ar-ter-eFS-t&-the--Gwfler-s-at+ 2-l--tRe-same-time--as-tRe-next-j3aymeRt of hiFe is-due- 722 (e) The Charterers shall have the liberty: 723 (i) to comply with all orders, directions, recommend- 724 ations or advice as to departure, arrival, routes, 725 sailing in convoy, ports of call, stoppages, 726 destinations, discharge of cargo, delivery, or in any 727 other way whatsoever, which are given by the 728 Government of the Nation under whose flag the 729 Vessel sails, or any other Government, body or 730 group whatsoever acting with the power to compel 731 compliance with their orders or directions; 732 (ii) to comply with the orders, directions or recom- 733 mendations of any war risks underwriters who have 734 the authority to give the same under the terms of 735 the war risks insurance; 736 (iii) to comply with the terms of any resolution of the 737 Security Council of the United Nations, any 738 directives ofthe European Community, the effective 739 orders of any other Supranational body which has 740 the right to issue and give the same, and with 741 national laws aimed at enforcing the same to which 742 the Owners are subject, and to obey the orders 743 and directions of those who are charged with their 744 enforcement. 745 (f) In the event of outbreak of war fwhetRef--t.Rer~e-a’ 7-46-deaar~ioR-ef-IN<lf-GF-Rot-Hil-between-any-two-Br--mer-e’ 747--ef-the-fellewiRg-rolffit.fier.t-11e-1Jflite~tate5-Bf-Amer~Eaj’ 748-RH5sia-;-the-t!nit-ea-~iAgaem-;-ffaREe;-and-t-11e-Peepl e’-s+ 49--Reflul:Jiic--ffi.C-H ina,-{·H·)..l:Je~eA-aAy-twG-Br--rner-e-ef-the+ 39-f.:-mmt-ri es-stat-efr.tn-8 (»(~6,.-betR-t-R e-Gwner-s-and-tfie+- 5-±--Ghaft-er-er-5--SH aii-Rilve-t-8€-l’igRt-te-{;-a Rc-el-tRis-{:-Har4eF;~ er-eu!JeA-t.fle-C-Har-t-eFeF5--5Aall--r-eaeliver-the-Vessel-te+ 33--i:Ae-GwRer-sin-ac-ror-danc-e-wit.ft.tlaus~kRe-V-essei+- 54---R aS-{;-ar-ge-B FH!ear-d-a#eHiisc-RMge-t-11 efeGf-at.. B-5-destiRatieA;-Gr-if..debaFFe€1-unaeF-this-Gau-se-fmm+ 36-feaEhiRg-eF-eflter~ng-it-at--a-fiear.,...e J’leA-iffi !kaf€-f)eft-as +-5+---€1ir-e(OteG-by-#le-Gwner-5;-er-i4Re-Vessei-Ras-n0-{;-ar-g& ‘7-58--ef!-l3ear-d,at-tR€-j3er+at-whiGM8e-Vessel-t-l1e~<;-er-#-at+- 59-sea-at-a-near,epen-aR!kafe-j3or-t-as-Gir-ec-te-S..l:Jy-tRe+ 6G-Gwner~-alk-ases hire shall continue to be paid in 761 accordance with Clause 11 a00--e*€ej3t-as-afer-esaia-all 762 other provisions of this Charter shall apply until 763 r-edel very the end of the Charter Period. 764 27. Commission +&-5---+Re-Gwner-s-te-j3ay-a-c-ommi55iefl-ilt-the-Fate-inaiEate8- +66--iA-80l<-3-3-te-t-R~Feker-s-namefr.tR Box 33 on-any-Rir-e+ 6-7---flaiG-undeF-t-Re-tRar-t-eH-f...ne-rate-is-int:liEat-ed-in-8eJ<-3-3, +68----#1€-(0Smffii-ssien-te-l:Je-f)aie-13y-the-Gwnef5-SRall-{;-over+ 69--t-l1e-aa-ual-e>!f!ens-es-ef-t.Ae-8r-ek-er-s-ane-a-reaseflilhle+ 7G.......fee-fer-theirwe F*.- ++1--lf-tfte...full-h ir-e-is-net-f)a ia-ewi Ag-te-13r-eaffi-ekRe-C-11aFter- -7-n---by-eit.fleF-Gf-t-R€-flil ft.ies-t~ Ft-y-1 iable-tR er-efer-sfia II+ 7J--indemnify-t-he-8Fek-er-s-aga inst-tAeif-less-ef..c-om mi55ierr. H4-SAellid-t-11€-flaft.ies-agr-ee-t-e-c-aAEei-t-11e-tRar4:-er,tRe+ l--5-Gwnff5-Shall-inaemnify-the-Brok€FS-against-aRY-Iess-ef’ 7+6-c-Bmmissien~n-s<J€~-ase-tR€-(0(3mmisskm-sf1all-net+ 7+--ex€eea-t-Re..l:Jf0k-eFage-en-e ne-year-’-5-hiFe- 778 28. Termination (See Clauses 41, 42 and 47) +79-{a}i::-Haft-er-er-?-Gef.ault 189--T-he-Gwner-s-shall-be-effiitled-te-withGFaw-t-11e-Vessei-ff0m. +&1-tA e-ser-11i Ge-ef-tne-C-Har-teFer-5-ana-te Fminate-t-11 e-C-11ar.fff. +&;!--witfl..immediat-e-e~..l:Jy-wr-it-t€R-fl0tiGe-to-t-11e-C-harter-er-s-iF. ~-ij-t-11e-Gtar4:-er-er-s-faike-j3ay-fliFe-in-aGC-Bf€ianc-e-witR+ 84--Giause--1-1.,...--However,w-her-e-tRer-e-is-a-faiklr-e-t-e+ S~k€-fiunEHittl-j3aymeffi-e.f-Air-e-Sue-te-ever-sigl*,+ Se--negligenc-e,er-r-er-s-er-0missiens-e~al’t-ef-t-11e+& 7--GtlaR:er-efS-ef-theiF..l:Jank-efS;-tne-Gwf\er-s-shall-give’ 7-88--t-!1e-C-har-t-eFer-s-wr-iit€fl-ltG~ee-ef..t.lte...llfflber-ef-{;-leaf+ S9-banking-£ays-stat-ea-ifl...Bex~[as-r-eEegnise8-at’ 7SJQ---#le-agfeea-fllac-e-ef-flavmeffil-irt-WhiGMe-r-eEt#y’ lSJ-1-tRe-fai lu r-e,ana-wfieR-sB-r-eGI’ifiea-wiff!ifl-5U ffi’ 7~mber--ef-days.fellowing-t8e-Gwnef?n<*iGe;-tlle+ 93----jhlymen t-sfia 11-stanEI-as-f-eglliar-aRd-j3\Jnc-t-\J al~ -794---Fai Ill Fe-ey-tRe-C-hafter-e-F5-t-e-pay-hir-e-wi tA in-the’ 7-9-5---Flumber--ef-Gays-stat€G-in-8ex-34-ef-t-l1eir-teEeiving- +9 6---#le-Gwner-?-neti ee-a s-wevi ded-Rer-eiA,-4all-eRt#le+ 97-t-h e-Gw ner-s-te-witR eFaw-t-11e-Vessef...f-r-em-t-he-seNiGe+ 9~f-tRethar-t€Fer-s-aRa-t-er-mina4e-tche-C-har-ter-witRe\Jt+ 99--fllftReF-RetiGey 89G-{ ii)-t-11e-C8a rt-eFer-s-faii-te-romf)ly-wit-114e-Fe(!Ui Fements-eh 8(}±.....~1-}-Gause-6-f!”-r-aa in g-Res-tr-ic-ti e Rs-) 892--fl1-Giause-1-3faHJRSlli-anc-e-ana-RefJair-5j 8~r-ev ieea-that-th e-GwneF5-Sinill-have-t-11e-eptien,..l:Jy- 8G4--wriH-en-netiGe-te-t-11e-thar-ter-er-s,to-give-t8e- 893--GI~ar-teFe-r-5-a-5J3eGifiea-Aumeer-ef-days-gr-aee-withingg6- wAiffi-t-e-r-ettify-tRe-f-a il-ur-e-witheut-j3FejtidiEe-t-e-t-11 e- 8G+--Gwner-?-r~ gllt--to-wit-R c:I-Faw-ana-t-eFmi na4e-Under-thi s- 89 8-*la~se-if-the-C-11ar-teFe-r-s-fu il-t-e-c-B m flly-wit-11-s~GAggg- n et~Eei 8±0--fii i)-t-11e-thaft-er-eF5-fail-to-r-ec-tify-any-f-ailufe-to..€em pi y- 8-1-1-witA-t-!1€-l’e<:jui r-ement-s-ef-s<J l:J..c-1ause-W(-a1fi} 8-1+--{-Ma int-eRa A Ge-am!--Repai$5-Seen-a5-fir-aGtiEally- 8-B-J3ess ii:Tie-aft-er-tRe-Gwf\er-5-Rilve-r-equest-ed-th ~R- 8-14-wr-itiAg-se40-de-aAS-in-any-event-se-tRat-tRe-Vessel-’s- 8±3--ifi5Ufilf1Ee-C-oveF-is-net-flr-efut:liee4 8l6- {b}-2wnef?Qefault 8l+-lf-t-Re-GwneF5--5hall..l:Jy-any-ac+er--emisskln..l:Je-iR..l:Jr-eaGh- 8-J..8---ef-t-Reir-0eli gatieAs-tJAaer-tRi~haft-er-te-tRe-extent-tRat- 81SJ....-t-l1e-C--Ra!’ter-er-s-ar-e-a ep r-ived-ef-t-lle-use-ef-.t.he-Vesse 1- &!G--aflfr-suffi-ereaGh-{;-entir~ues-fef...a-pefi ee-ef...fe llfteeA-{±4)&;!.±-- r-unning-Gays-a#er--w.fitreA-JtGtiEe-t.fleFeef-ftas-13een-given- 82~y-t-11e-C-HaHeFer-5-te-tRe-Gwner-5;-tRe-C-l1aFt-er-er-s-sllaii~ A-hlled-t-e-t-er-miRate-t-11i~har-t-er-with-immeEliate-e#eet~ A-fl9ti€€-to-the-Gwner-so 82-5--{<:lliss-ef..Ve.ssel 826 This Cha Fter-sfiall..l:Je-Seeme€1-t-e-be-t-er-mi Rat€c3-if-tAelhY-- Vessei..l:Jec-ernes-a-total-los<;-eHs-deEiaFeEl as a 8~8-wAStruc-tive-oF-€0FAflr-emise8-er-aFFaAge8-t-et-al-leS!r.----Fer~---# l€-flUf1305e-ef-tltis-sH-&-c~e--Ve55el-shall-net-9e& W---Eleemea-t-e-be-lest-unless-sRe-has-eitRer-9erome-an- 8-3-l--aEt-wl-tetal-less-er-agr-eemeflt-Ra s-Been--r-ea ffied-witl1- ~er--llfld.efWfit-r-s-ifl.-r-espeet-ef-Rer-tenst-r-uEfive, ~effij3remiseEI-er-ar-Filflge8-totaj-less-er-if-suc-h-agFeement- Copyright© 2001 SIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARE CON A and B. Amalgamated and revised in 1989. Revised 2001.

 



  

PART II BARECON 2001 Standard Bareboat Charter &!4--wi~Mler-HflEiefwr-it-ef5-i5..-flet-rea€Red-iH5-il$tlgea-hy-a- 8-33-------teFAJ)~~l:l\Jnttl-t-Rat~-Bfl5tf-<JGtive-less-ffi-t-Re-Ve5sel- 83e-ha5-BEC-IJH~ &!+---{ d)-f.i~R.er--j>aHy--sfla!Ule-eRffiletl-ro-ter-miR<He-#lis& 0&-----Gflar-t-er-witA--immetlial’e-e#eEt-Gy-wr-iHeA-f\efite-tB-t-Ae& l9----0t-Aer--j>ar-t~IH-R~F9er-Geing-maae-erg4Q.--- r-eselutieRfassetl-fer-#!e-wiflGiRg-t~j3;-tlisseMieR;& 4±--li<rHitlatieR-ef--W-Flkr-l!J’t-c--y--ef-tlte-et-Ref-J3ar4y-fet-flefwise~ han-fe!4Re-j)t!Fj3ese-ef-r-eteAs~Hl€t~ElfH) F a FA a I ga FA at-ieR-)- 8~F-if-.a-r-ereivef-i5-ilj)j)eiffietl.;-er-#-it-s\JSj)en~ 844-c-eases-te-€ilffy--BA-00s+Aess-er-mal<-e5-illT’f”5j3etial- 84§-affJAgeffieffi-Br--€()fAJ3GsitieR--W#it-~-er-s-o 846-----{e}-l-Re-reflflifl~ieA-ef-tflis--Giar-ter--shaH-he-wit-Reill- 847-----j)Fejueite-ffi-all-fi~tc-F-lled-ffile-hetweeA-fRe-j)aft-ies- 848------jffief-t-e-the-tla t e of te rFA iAatieA-ttAG-ffi-aAy-tlaim-thatg49-- ei~ef-J3aft.y-mighl--Rav~ 850 29. Repossession (See also dauses 41, 42 and 47) In the event the Vessel Is due for redelivery pursuant to Clause 41 or Ow ners liave made a request for redelivery of the Ves.ser lh accordance \’Jith the applicable provlslons o’f Clause 42..’1. 851 +~t-ef-the-ter-miftat~eA-ef-th.is-C--Rar-t-er-iA- 8-~tc-emance with the aJ3j3lic-able-J)r-evisieAs-ef-GaHse--2-&-;- 853 the Owners shall have the right to repossess the Vessel 854 from the Charterers at her current or next port of call, or 855 at a port or place convenient to them without hindrance 856 or interference by the Charterers, courts or local 857 authorities. Pending physical repossession of the Vessel 858 in accordance with this Clause 29, the Charterers shall 859 hold the Vessel as gratuitous bailee only to the Owners and the Charterers shall oro cure that the. master and crew follow the directions of the Owners . 860 +Ae-GwAer-s-shall-ar-r-aHge-fer-aA-ttt~~eri5etl-r-e~r-eseAt- 86±---ativ~l3eam-the-Vessel-as-seen-as-r-easGAal:lly- 86&------pfiK-t~eal71e-f-ellewiAg-#le-teFfA-iAatieA-Bf-tlte-thaft-er~eghl------ IJessel-shaH-he-tleemetl-te-13e-r-eJ)essessetl-by-tRe- 864----Gwners-ffeFA-tRe-thaftefer-5-llfJeA-the-hear-tl+Ag--ef--the~ e-GwAer+-r-e!)r-eseAtativ~ All arrangements 866 and expenses relating to the settling of wages, 867 disembarkation and repatriation of the Charterers’ 868 Master, officers and crew shall be the sole responsibility 869 of the Charterers. 870 30. Dispute Resolution (See Clause 65) 8+±----”-)--{a}-+Ais-tentr-aEt-sf1al~e-geverTtefl-by-amH:-eAstr-\Jee- 87 2 in a (OffiFS aAEe-W#h-IOAglish-law-antl-any-<lisJ*!te-ar ising- 87-3--eill-e.f-er--iA-€0AAeEt~eA-Wi~R-tffis-C--eAtfatt-slhlll-be-refefr-ed- 87 q to arb i~eA-iA-klmde n-irt-aff8F9an€e-wttA--t-Re-Affii-tfatieA- 87-5--AH-±9%-ef-iffiy-st-atllie FY-ffieEl#ic-ati o A-er-fe--eAJGtmeAt &7&----itler-eef-save-t-e--tfle-ext€At-Aecessaf)’-te-glve-e#e€He- 8+7---tfle-J)r-evisiens-ef-tRis-C--lat!~ 8 78 The a r 13 it rat ioo-shall--be-Ee Afit~e-ted-if1-atc-or-tlaflc-e-wit-A&- 79-t-Re-loeRtleA-Mar~time-H-bit-r-affif5-Asse8atieR-ftMAA)- 88Q.------+efffis-c-tlf-r~-Re-time-wAen-the-ar-bffioaBeA--j>f-eEee€1-g8±--- iAgs-ar-e-tefAfAeAcetl~ ~-Re-rereFeAre-sltall-be-te-t-RFee-amitfat-efSc-----A-~r-tv- 8&-3------wisltifl~r-bitrati en s h all-aj)j)BiAt-ifsg84- ar-bitFJter--and-seAd-Aetic-e-ef-s\JEA-aj)fl ei AtmeFIHA-wFit~Ag~ eF-j3aft-y-r-e<rHiring the other ~rty--te--aj}fleiAt-its- 886---ewn-ar-bit-r-affir--wi-fltiA--14-taleAaar--Gays-e.f-that-notite-aAd&& 7--st-atiAg--tRa-t-it-wilhtj3j3eiAt-its-affiiff.ater-as-sele-arb+tr-ater- 888-------lJ.Aless-the-et-Ref-Jhlf~~eiAts-its--ewn-amitfaffir--aHd- 8&9-give5-flet~€e that it has EleAe-se-wi-flwHfie-±4-tlays- &9G--sJ3ecifieEl. I~Aef-.pafty--tloes-Aet-aj)j3eiAt--its-ewA- 891-ar-bit-r-at-er-aAe-give-neti~at-it-Aas--tlene-se-witltiA-~e- 892--:J..4-aays-s~eEifiefl,.-tAe-J)aflcy-r-efff-riAg-a-Bisj3tlt-e-t-e- 893---a-r-bitr-atieA-fflilVTWi#le<~t the re q u iremeAt--ef..a.Ay-.fur-#ler- 894----flrioF-Ae~e-e~eJ’-ilafty,-aj:lfiOinHts-amffi-at-er-as- 89-5--se le-amit-Fatar-a A€1-sRa ll-atlllise-tRe-et-Rer--J3a Ft-y- 89 6-atcem i n g I y. The a war.fl--Bf-a-sele-amttr-aror-sf1all-he- 897---biAtling-BR-t~-!3affies as if he haEl-beef!-ttWeiAted-by- 89&---aweeffieAh 899---Net.ftiAg--Rer-eiA-shall-j)r-elleA~e-~ames-agr-e~Ag-iA- 9QQ---.wffiing-te-vaJ’V-{-Rese-j)ffillisieAS-toi3ffi\’iae-fe r-#!e- 9Q±-..ap~iAt-ment-ef-a--sele-amiff.ater. 9Q2.-.-...ffi-tases-wfleFe-A~ther--t-Re-claim-Aer--any-telffiteffiaim- 9Q.-3---exteetls-the-5\JFA-Bf..ti~”’Q,GQQ.-far-s\Jc-A-B~er--5lffi\-a5- 9Q4-t-fle-j)ar-ties-may-agFeef-t-Re-affiitfat~€)f1--sAall-te-ceoo\Jtted- 9G-5---iR-aff8maA~-th~mall-Ga-ims-PfecetllJf€- 9Q6--c-t~r-r-e~e-tim~e-affii-tr-atiefl--j)f8€€etl-iAgs-af€- 9Q7-..c-effifAeA€eth 9Q8..-..”’H~AtfJtt-sfiall-be-gever-fled-By-aAe-teASH\Jed- 9Q9--iA-acreman~--l~t~e-9-Bf-#ie-1mitee States Coee- 9±G--aAtl-the-Marffime-baw-ef-tf1e-1miteEl-St-ates-aml---aAV~ risiflg-etlt--ef.-ef.-iA-c-BRAffi~oo-with this CeAtfJEt- 9±2---sRall-be-r-efeffeEl-to--thfee-J)erseA5-ilt-New-¥-efk,--ene-t-e- 91~e-a~j3effiteEI--by-eac-h--ef-t.Re.-j:afl’ies--ReFet&,-aAtl-th~ir-tl- 9±4-by--the-twe-se-.ffiosew,-t-Reir--tletisieA-BHRat-ef-aAy-twe- 9±§---ef..t-fleFA-shaJJ-13e-fiAal,-af1tl-fef-t-fle-j)tlfilOSes-ef..eAfertiAg~- ny-awarfl,..-jtlagemeffi-may-be-eAtef€tl-BA-aA-aWaffi-by- 9-17-any-teiH-t-ef-c-empet-eAt-jHr~saiEtien,.-------T-fle-J)mEeeaiAg5- 9l8--sRall-9 e-c-e n Eluc-tetl--iA-a EC-Br-tlan Ee-vtit-h-the-r-<Jles-Bf--the- 9±9----!>etiety-ef...Mar-itime-Ar-bitFaters,-lAS 92G--JA-C-ases-wfleFe-Aei.fl1er-t-Re-tlaim-Aer-aAy-c-BHAteFC-laim- 9~eeas-the-st~m-ef.-YS$-5Q,GQr:f-fer-s\Jffi-.ot-Ref-5\Jffi-a5- 922--tRe-J)ar-ties-may-agfee}the-affii.ffatiGA-5Ra~-he-ceAElucted- 9~A-atcer-tlaAte-Willi-the--Silart-eAed-Arl3itfJtien-l’roEe81tFe- 924---ef..t.R~Hy--ef-Maffiime--Affii.tFatefS,-#lt-----t u rre nt at 92-5----the-t~ FA e-wfleA-t.fle-a r-bit-r-afieA-j3r-ereee iAgs-af€-EGFAFAeAcefr. 92&-’4--{-ec)--l-Ris-teAtFatt-sfiall-be-gevemetl-by-and-c--enst-r-\Jee- 9-P--iA-atceffiaA~-the-laws-ef.-~e-j)late-mutttally-agfeeEl- 928-Gy-th~ar~ies-anfl-any-BiSj)tlt-e-ar-isiAg-eill-ef-ef-iA- 929--€0AAeEt~e~At-Fac-t-shalJ-.be-r-efer-r-ed-te- 93 Q----affi+trat i o A at a FA lltwly-agFeee-fllate;-St~I:Jje~e- 9M---j3rereool’e5-aj)J3Iitabl e-t-her-eo------ 9-12-----{tl}-Netwi~aiAg-fa-h-tb+Bf-fc+-allove,-#le-J)afties- 93-3-may-agree-at-afly-t+me-te-r-efer--te-medi~ieA-ttAy- 934---El#feFeAte-ane,Ler-Gisj3\lte-ar~siflg-etlt--ef-er-iA-C-oAnectieA- 93-5-----wit-R-this--C--eAtfac+. ~n-t-Re-c-ase-ef-a-tlisj3ute-ifl-f€5J3eH-Bf-whlffi-amii:-r-atieA- 93-7----has-i:JeefH-ernmeAcetl-IJAaef (a). (13) or--f4aaeve,--tfle- 938---fellowiflg-shall-aj)J3Iy-c- 9 3 9 ( i) E it h er-iJar-ty-my-at--any-time-aHEI-frem-.time-te-time- 94G-elec-t-t-e-refer-t-Ae-tl isj3\Jt-e-er--j>ar-t--ef-~e-tl-isj3 Ht-e-te- 94±--metliatieA-by-serllite-eA-the-eth-er-paft-y-ef-a-wFiH€A- 942-----Aetite-{-t-fle-”MeEliat~eA-NetiE~IIiAg-eA-tR~ef- 943-----paft-y-te-agr-ee-ffi-FAetliat~oA~ 944-----{i i}-The-e~er--j>ar-t-y-sltall-ther-e\JpeA-Wit-RiA-±4-EaleAtlar- 94-5---tlays-ef.-recei!*-ef-t-Re-MetliatieA-Netice-teAfifm-.t.Rat- 946--t-Rey-agr-ee-te-mediatien,-in-wRic-h-tas~e-j)Jfties- 9q7 shall ther-eaft-er agree a FAetliaffif-Wi.thlA-.a-.fFt-her- 948-14--c-aleAdaHlays, failing-wAiffi-.on-t-fle-aJ)j3-litat~eA- 949--ef..eitRer-j3aft-y-a-metliaffir--wilJ-.be-Jj)peifltefl-j:)ffiFAj)tly% Q.-by--tlle-Affii-tr-atien-Tr-ii:JuRal-f”-tRe-TFibt.tAal’C}-ef-5\Jffi.. 9§±-----peFSen-as--tRe-Tribunal FAay-tlesigAate-fef--1-Rat% 2----j:ltlfilose. The FA eEl i atien-sR.all-be-cefiOOtted-iA-stlffi- 9-5-3----j)late-aAd-iA-tttffimante-vffih...slJc...fl-proceGllie--aAd- Copyright© 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.

 



  

PART II BARECON 2001 Standard Bareboat Charter 964--() ~e+H. l’fl1!M1Hhe-par-t es-mav-agr-ee:or71~Hhe~ finHJf-dlsag.reemtmt;-il5-may-be-oiet-Qy-t.fi 956 rneaiator. !l!>+-(iil}-1 ~u~-o9Jer-p:af£Y-do~t, gree--to.-men ctte,-tha 958-fae may-be-brnught-1<HiliHI~Iillfl-eHhe-+Fillunat- 9G9 d-mu-v-I:Je-tak-~-mto~-GI.mt-by -th~nlllinal-when- 960 nlloGit~ng-t:h eas~f-tht<-afb tfilt~on-a!rhet.ween · 961 tRe 13arties. 96 (lv}-Hie-medla km-5hall-fl~figh~-&i-elth r- 99-party-t-o-seek.~c-h-r-ehei-i>f-{i)~~~i 964-<~n51Efer-s-Aeee55ilry-to-prcoU!G-i&ln.-e~ 96!>4 v ~itli;.F-pii~V..xlvise-tl1e-+t.Jbum;41laHhe>,41 ve- 96~rnee-1-e-moo•a Jon,...+he..afbit.r.,r-ion-preEeduFe-shall 9G7 <-ont nue-4ufin(Hhe-ronduct-e h~ediat on-but- 968-tl’le--H’~tll:lllal mav-t-ake-if\~HT~edlii ~on-tlmetabl!Hnt()..o gGg ~~euRt-when-settrne--the-tl met-able-f~-stej:!s-lrHhe- 970 arbitration. ~-~v i)-YAlesSct*IH~FWlse-a~-s~fled.ln -tlle~ llledi;;tiGn lefl”l\5;-~aol;par{’f-Shatl-bear-lt§-Qwn-c-osi5- 9?3 irn:urr-ed n mediat on-und-!l;e-pa eH- all-!JI ~ ~~~ally-th~iate~SI! ... ~Ad p~ 9+-5-ivli}-+he-medla\ion-pr*esHita 1-De-wi tloo~l€e- 976-al1d<-onfitlential-<!nd-mHnforma tien~F-dOElJmenl3- 9-n--dlsc-lesed-fluring-lt-shal~be-fcYeillcd-te-l-he -T-rlbuna~ 978---e- rettl’- ~~~~khakhey-are-GIKlesaale-under- 9+9-rl,e-faw.and·fWl!lc-edure-gover.n ng·rhE!-ilrbiH.;~tten. 98Q-{Nore+he-tH~R-teHhovld-be-<~wur.~-!llo!-#re-medtorkm- 98-l-pFiX-e55-fflG’f”fi~FIIy-lnffiFFUpHime-llrrn~ ~ (e}-lf Box-a-5-jn-Par+l-i!HIOt-ilPP Gl”riat-ellffjlled-it’lp.;llb-i’ililUSe- 9~ a}of4Ris-flau$e-shall-aflp ~u!H;!a~t~O{d}-;hal~ ggq af!I’JIY iR all eases. ~~luuses-30(ur,-JQib)-ond-30(E}·or.e-alremo!Jves:- 98f>-lnffic.a~afi e-11greed-lf’-8o~ 987 31. Notices {See Clause 46) 988-(a) -Any-”flOOE~glvelrby-i!ltlter-par·ty-te-the-other- 989 · arty-shall-bein-wri ing-.and·may·be-s n b’f’-lax, ele- ., 9-90--Feglsl~r~ f r*Or~ · cl m;!ll F-ily· per-som~l~ c-e, 9 (b)-lke-addr-e~f.oihe-Par-t ~rep.;, ;vic-*f-5Ueh- ~munlc-*lon-shilll~-a~ll-Seile5+arnl-4· 993 rCSflCEtiveJy. Copyright © 2_00~ BIMCO. All rights r~served. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmanCon document will c~nst1tut: an •n_fnngement of BIMCO s copyright. Explanatory notes are available from BIMCO at www.bimco.org. F1rst published m 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.

 



  

PART Ill PROVISIONS TO APPLY FOR NEWBUILDING VESSELS ONLY (Optional, only to apply if expressly agreed and stated in Box 37) ±-. -SpeEifieatiOAS-i!Ad-BuildiAgteAtfaet ~-+Ae-Vessel-sltaJl..be-c-Bf\StTHeteEHA-ilC-teHiaHc~ ~e-EWildiAg-Geffir-act (here after ca lle&-”tfte-&lildiAg- 4--------G3Rtr-a~Aflel(eti-te-thi5-GtaFtef,ffla8e-Befweert-the.5-------- Befilaef5-aA8-tfle-GWACf5-ilflfl-iA-ilEffirtlaAEe-Wi#Hhe&------- sj:leffiicatiefl5-aAEHllans-a A A C)( e8 therel:e;--51Jch-BuiJdiAg+----- beAtfact,-5J*>cificatiefl5.-aAEI-f:)laA5-flaviflg-beefl-€eHAtef&--- sigAea-as-a~rBVetl-By-the-GtaFterer-s, 9 (b) NE>-£-haAge-5Hail-be-matle-iA-#le-Btlildif\g-GeRtr-act-eF- -W-------i A-the-5f)effiicatieR5-e F-f:)lafl5-ef-tlte-Vessel-a5-aj:>l*ffile8-by±+---- tAe-C--haHe!’-er-5-a5-afer~tl,wi#leHHAe-GflaHe!’-er-? -R------teASeffio H-------¥)-+Ae-th-aR’er-ers-sh-alJ-have.-tAe-rigflt-t-e-seAEI-theiF-± 4-------ref>reseAtative to the Butl8ers’ Yar8 to iAspect-tfle-.Vessel- 13 a~ring the co~rse of...fleF-CeR5tr-Hctien to satisfy themselve5- -1&---that-teAStHJctiofl-is-iA-ilccer~-appFeVed±+------ sjaec-ificatieAS-amJ-’f’lan s as refe rr-ed-te-t!A8ef-5HI:H=latJSe- 18 (a) of-tflis-GaHseo 19 (d) The Vessel shall be built-iA-ilc-wr.flance-wi#t-ti1e- ;uJ-Buil8if\g-GeAtfact-aAti-sfttH~e-ef-tlte-tlescrif:>fierHet-But~ r~Suaject4e-tA€-f:>F9visieAS-ekHb-clatise-~{c)fiitti!------- hereuAtler,-#le-Gtar-terer-s-sh-all-be-beuA8-ffi-acc~e~ el-freFA-tf1e-GwAer~ffij’)ieted-aAti-c-ef\St-r-uct-ed-iA~ cer8DA€e-Wit!T-tAe-&!iltlffig-GeAtract,-eA-#le-date-ef. ~livefV-l:>y-tAe-BtJilde&.----+Ae-Gtaffer-ers-uAa~h-af~ aviAg-ac-tef>t-ed-the-Vessel-tltey-wiii-Aef-tAereafter raise- 27 any claims-agaiAst-tlte-GwAer%if!-fesf)Cct-ef-t-Ae-VesseJ’.s~ Bffl’laA€e-ef-513Ccificatif)fl-{JF-8efec-ts,-if-aAy,~ eltAeless,-ifl-fespect-ef.afly-r-ef:>aifs,-fefllaceFAeflts-BF--- 3Q------tjefec-ts-whlcA-appeaF-WitAffi..tAe-fir-st-R-meAths-frt>ffi- 3±-------B eliveFY-by-the-Buildef5;-#le-GWAef5-5Aall-eR8 eavo ~ r to ~FAf:>el-tAe-Bui laef5-te-feflair,--FCJ3Ia€e-er--Femedy-aHy-defects~ r-te-rec-BveF-fffiFt’l-the-B<~ilaef5-ilflii-C*I’CAditur-eiACUFFe8-ifl- 34-------c-afl’{iA g-Bllf-s<icA-r-ef:>aifs;-fefllacemeAt5-e r-r-emea ier 3§.-----Hewever;--#le-GwRer-s’-liability-te-t/le-Gtart-eref5-Sitall-be- 36----limited-te-tAe-e><t-eflt-tAe..Gwffefave-a-valid-claim-agaiflsf- 3+------#le-B<~ilaefS-lffider-tAe-gt~i!filAt-ee-clat~se-ef-tfle-BllildiAg- 3&------teAtfact-{a-c-ef:>y-wf\efeflf-has-beeA-5tlflfl~etl4e-tAe~ aftefefS}-The--Gflafterers-slTall-be-l:Jollfltl-ffi-aCCef>HUcA- 40 s~FAs as file-Gwflers are reasonably-able-te-fec-BVeF-t!Atler- 4±--------t.flis-Gause-al’lti-sfttHl-ma*e-Ho-Wrt-Rer--8aim-BA-tAe-GWAeF5- ~rt-Ae-tli#ereAce-BetweCA-tlte-amt><~Atfsl-sO--Fec-BVerea-aflli- 43----tAe-a~Aait~ re on re paifs;-fef>lacemeflf-er- 44----reFAetlyiRg-tlefect.s-er-fef-af!V-le55-Bf.Bme-iREtiFf-e4 4-5-------AAy-li€!1fitlatee-tlamages-fef-f>ilysiEal-tlefec-ts-eHleficiCAcies- 4fr-----sh-all-aEEFtle-to-tAe-aEffiUAf-ef.t-Ae-f>aRy-stated-iA-8e><-4±fal- 4+------t>F-if.Aet-filletl-iA-Sh-all-be-sh-are~ually-betweeR-tAe-f>aHiCSc 48--------+Ae-c-e~lfiflg-a-Baim-Br--tlaims-agaiflsHhe-BllildeFS- 49-------tffltler-fAis-C-Iatise-fiAEiudiAg-aAV-liability-te-#te-Builders) §0----si1all-be-BeFAe-by-the-f>affy-st-ated-ifl-Bex-4l{bt-ef-iHlef §±.--filleEI-ift..5Aall-be sharea eq~ally-b~DftiCSc ~ime--and-fllaee-af-9elivery 53 (a) S~l:>ject to the Vessel--having-ceffij’)\eted-Aer- §4..--.acceptance trials iRcl<itliflg-ffial~meAt-ifl- S-5-------accer8aAEe-\Nith the Builtlif\g-GeAtfaEf-afld-sfleffiicatie/15- §6 to the satisfactioA-ef the Charteref5;-#le-GwACF5-5h-al\-give- !>+-----af\d-the-GflaR’eref5-Sh-a~e-Ve55el-afleaf §8 when rea dy-feHle~ffV-ilfldi> Fef>ffly-Gec-i!ffieRteti-af-t-Ae §9....-..B<!ilaeFS’--Yar-d-ef-SElffie-efAeF-Safe..aA8--Feadily-accessible- 6Q------tjeEk,-wAilff..ef...fllace-a5-fflay-be-agr-eed-b etwe en t he-jhlfties&±------- herete-aA8-tAe-Builde&.-tffidef-t-Ae-EWildiRg-Gentfact-t.he- ~llileer-5-Aave-estimated-fAaHh e Vesse I will-be-reaGy-f-er 63-----tlelivefV’{e-#le-Gwn e rs as thereiA-j:>revi8ed-b~e-8elivCP{- 64-----{)ate-fer--tA€-f7t!r’f79se-eHRis-Gtaffer-si1~e-tlat-e-wfleA- 6-5--t.fle-Vessel-is-irt-facf-reaGy-fBHlelivefY-by-#le-Billldef5-ilfteF€ i6------<:-BmplefieA-Bf.t-Fials-wi1efi1CF-fililt..be-Befere-BF-aft-er-as- 6+-----iRtlicated-iR-tAe-&!ildif\g-GeAtfaG.--:r.fle-C--har-teFer-s-shali-flef- 68------be-eflt#le8 to ref~se acce pta nce-ef.aeliver.y-ef.t-Ae-Vessel- 69-------afld-<if>DA-ilAEI-aftef-StlcA-ac-c-ef>taAC-e,--slli>jec-t-te-Gause- 70 1(8), the Charterers sha~-Ret-be-eAt-i#etl-te-make-aflV-€1aiFA- +±------agaif!St-the-Gw n e rs in respect-ef.arty-roflditieRS;~ r-eseAtatierts-eF-Wilff~es,-wAet-Aer-eJff>fe55-Bf-iffij’)~,+ 3-------as to the seaweltAiness of the-Vessei-Br-ifl-FCSf3CEt of 8elay+ 4-------ifl-tlelivery, +S---{b}-lf-fer-any-reaserH>tACF-th-all-il-tlefatilt-by-t-Ae-GWACF5- +€i-------t!Aaer--tAe-B~o~iltliAg-Geflt.ract;--t-Ae-8uiltlers becoFAe ent-itletl- 77 u n 8er-t-Aaf-C-Bfltfact-Ret-ffi-tleliver-tAe-Vessel-te-tA e Owners, +&-------tfle-Ghall upon g iviflg-te-tAe-Gtarterer-5-Wfittefl.+ 9-------fl DBEe-ef.Btiil der-s-l:>eceFA iAg-so-effiitleEI,-be-e><rused-freffi- 8G----giving-tlelivery-ef-tfle-Vessel-te-the-GAart-er-eF5-ilAEI-<ipeA- 8±-----receiflf-ef-suER-Aotice by the Chart-eFeF5-t.flis-GAartef-sltall~ se-te-have-effec+. 83 (c) If for af!Y-TCa5eA-t-Ae-0WflCF5-bec-eme-eAt-i#ed-llfltief- 84--------tAe-BHiltliRg-C-entr-acHe-r-ejec-t-tRe-Vessel-tfle-OWAeF5-Shall,&!>--- befer-e-eJ<€fEisiflg-wch-figfltt>f.fej ect-ien,-€8 AStlit-tAe- 86------Gtarteref5-ttR8-filefeUJ3eA 8+---fi}-if.tRe-GAartererTtle-Aot-wis~elivery-ef.tAe-Vessel- 88--------tAey-slhlll-iflfefffi-tfle-GWAer-s-withlfl-5evCA-f+t-r-lffifliflg-tlays- 89-------By-fletiEe-ifl-writiAg-aAEI-ufloA-reC~if>f-by-tlte-GwACFS-ef.sucA- 90----fletice-fAis-Gtaffer-sh-all-cease-te-have effect; or 9±-----{iij-if-tfle--Glaftefer-s-\Nish to take 8elivefY-E>HRe-Vessel~ ey-may-by-Aefice-ifl-Wfififlg-witRin-seveA-{;7f.run n ing days 9-3------fe€jtlir-e-tAe-OwflefS-t-e-flegewte-witA-tlte-B<~ilaeF5-as-to-tAe- 94--------tefms-A-Wi1icA-tleliveFY-Shellla-be-t-akeft-ttFHlteH-efrain-frt>FA 93 e><e rei s i ng-t-Aeif-Tigflt-te-fejectie~eFHeceij3f-ef.sucA- 96------flooEe-tile-GwAeF5-5Aall-ceFAmeAc-€-5<!cA-AegooafieAS-ilAGf 9+----eF-tak-e-delivery-ef-tfle-Vessel4reffi-fAe-Builaer-s-aA8-tleliver- 98--------heHo-tAe-GAilHer-er-sy 99-------{iii~taAces-sAall-tAe Charterefs-be-eAtitlea-te± GO---rejecHhe-VesseHmless-tAe-GwA eF5-ilfe-ilbl e-te-r-eject-tlte- 101 Vessel froFA-tAe-EWilaers-; ±m---fiv) if this Ch-art~der-stib-c-lati5e-fbt-er-fe-)-Bf. 103 this Cl aHSe,-tfle-GWACF5-SAilll-tAereaft-eH!ef-be-liable-te-t-A e± 04----{:..ftarterers-fef-aAy-c-laim-1mt!Cf-Sf-arisiAg-But-ef-tAis-Ghaftef± G§.......ef-it.s-terminafiefu ±G~i€jtli£iateG.flamages-feF-8elay-ifl-8elil!efY-tiA8ef-t-Ae 107 BillldiAg-Geffir-act-aAd-aAy-c-Bst-s-iflc-<~H-ed-ifti7Uf5Uing a claiFA ±G8--t-Aer-efer-sAall-aEERJe-te-tRe-acc-B<~Af-ekRe-flarty-stat-e8-irt± Gg.......&x-41{tt-eF-if.Aef-filleEI-ift..5Aall-be-si1ar-ed-etjtlally-betweefl±± 0---tAC-j:>afti~ U-±~uarantee-Werks 112 If nof-efilerwise-agreetl;--tfle-GWAef5-tttitherise-fAe- 113 Charterer-5-te-affaflge-fef-the g~arantee-wori<s to be±- 14---13erform e 8 in a ceo r8DA€e-WitA-tAe-blliltliAg-wAt-r-aEHerms;±± §........afl8 hire to COOOAHe-titJf~Ag-the-f>eReti-ef..guafaAtee-w01~ 116 The Cflafferer-s-have-te-advise-fAe-GWf\ef5-iH>e<IH-Ae±± l----J3erfermaAC-€-te-tAe-eJ<tCAHhe-GwA~ ±±8-4.-Name-of.Vessel ±±9----+Ae-name-ef-tRe-Ve55el-sh-all-be-mt~ttially-agree 8 b et·Ne en b!G--t-Ae-GWAef5-iln8 the Charterers and-fAe-Vessel-shall-be- Copyright© 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.

 



  

PART Ill PROVISIONS TO APPLY FOR NEWBUILDING VESSELS ONLY (Optional, only to apply if expressly agreed and stated in Box 37) -l-~a t\ted-ifl-truH:-ekluF5;-dl5}’llay :h-e-funneHmign!irar!El-Hy- 1·2-2 he-hause-fla!rJs-RiJUiJ1ed-brthe-f-lr;moer-es. 1~rSuNey-tl~R-e<l!!livery ~h~GwneB-an!Hne-<;llaFt-er-eFHI’IaiJ.aJ>PGJtH’S’JIVeyarrr H-6--for. :A M!U~f-ll~mll · ng-aod ·agrcein~·m.writ’ln-~h ‘l·’25-eeAaitum>OHhe4k5~-aHiie-tl~f-re-<iell ‘tlery, -lJ:.7-4Jilh&UI-pre)lldlce-«<-ffall~r+l l};-{he-Ghane~ 128----5hall-bear-ali5Uf’Jey.e ~r.d-;311-.otf’~f;;Jny, ,1,28-•AEIIJd I’J~~OSI:-G~OEklng-an.d-oooOEI!l n m-f~”*lUIFe<ir ~0--as.o,yell-as-.al”-re~l r-rosts-lnamed. :fle..fltar-teroi’S-51tall· a.-a~ lso-bea”’i!II·IOSHfl-tim-Hpeo ;.tn-EOnrwEtion-Wit-trany. ±a.:.”-ileekln~rnkirnleeku’t~el l-as repatr.5;-Wht€h-5hall-be~ 3-pald-i!Ht~Ma:~f-h re-{reHiay-efi}f3+al~ Copyright© 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of SIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.

 



  

PART IV HIRE/PURCHASE AGREEMENT (Optional, only to apply if expressly agreed and stated in Box 42) 1-----Gn-e-xplr-vl-joo-GHhls--(‘l’ti!r:ter--aRI.I-pr-evld~ CRarterers t-----hil\!~ 11111~-hetr nbllgall nwc-€or-dlng-t~r-H-and · ll· l........----ii.<.wcll-vHlilft..lll,if.-a!J!Jl ~Il l lt.lwgr-eeGrt- at.-Gtr 4-- --flii’J!Tieflt-o ~rRal-pilymeJ~H!I’-hlt:e-as;.peJ”Gii!USH·l· 5-{ le-fl~fteR!I:;.I\-a\11!-J’)UfGftiiSed-t-he-Vess~l-wllft· 6---(!oYefl(thlflg..b”elonging.to heF-i~nd~·W::ssel-ls-+ully-pald- 7 for. 8--ln-#tefo/l&wfng-por{)flr~iWie-GIVfll!f5~te-d-ro 9--CJHite-&:ller&-an€Hite.£-l>ertere~s-#ie-8Uyer,_ lG lhe-¥ess!!l?hall-be-del er~by·the-5eller-s.and-n~ke-n- Y-<~1ier-bv he-Buyer6-0tl-e-ljp1Fa~len-i)f..l.he-Gil r-ter~ :J..~he-Sellet~arat~tee-thakhe·VesSBI, t-the-tiR’Ie-(‘) H------de!lv~s-itee-ff-om--ai~Mumbfi!nreHJn<l·marli-lme- ·1 Jen~r-a ny-debt;-what:se ever other than those arising frollhilnythin~one-er-neWtme:--by-the-8\ly~:.>r~-any ex15l.Jng-mor-tgagHgf~ed -net~alil-eif-by4’he-ilme~ kleiiYe~houkl-i!n¥-c~a l m~hiEh lmve-0-e€1’1-iliii<fr.r~ ·1-S--pr-ter-li’Hhe-t~me-of-dehvet;’-be-made-vgainst- he-Ves;el.,. ~ell~ereby-~tnder,fake-«Hndemnif.y-tll~~ ~gaiR5HikonsequenEes-okueiH:.taims-t:~t~Krent- it- 8--c-an-be;zr-eYed-t·h, t>-r-he-Seller-s-are-r-esponslble-klr-su~l1 ~lalrns.-An’(-tilxesrootarl*.-wnrular-ilnfklthereh;~rg:e!r nd,e~penses-€9nnE~:H:d-wit~-~~·r<-hase-and ~~ISif;litOtHtnderSuver?flagnha l l:-be-ler-RuY~ ~c--i!€1\mi-:-An’f-l’a es, ~; onsular-and-oth~arR*-i!rn:l- 2 j’}QA5es-£GIIOIK-t~o.With,elosin~f-the--~1Jef’?r~l~U~r, 27 shalllle fer Sellers’ aece<~nt . ~~~ehange-i<l””r’!YmenK~khe-~;m-me n oh!s-hlr.e~ n$WimeAHhe-&e.l!erHhall-fum sl 1Huyer5-w th-<1- 30 Bill of Sale-duiy 1- ested-und-h:i-iil~eF IJ tlnr ~-.ti l~a t<Kettlng.;!iuHhe-regist<:!~c~mbRifiCe5;-lf. ~~1~lve1~ :he-Ve5sek-lle-$ellef5..sl1al4trev~ 33--... r-delet-lon-o’ thE-V”essel-ireRHh~hip!s-Regisl’ef-iU!ddel ver-a-ter-ti €ilte-af-deletlen·ta he-BdyeFs. a5-----+tle-SelleF5-5Aall.,.aHhe-timHH!ellv FV;-1”1and-t-a-t-Rea6-- 9uver~l!-dassi!tc.atl~lilc.~~w-hull,-engine-, 3+--i!nelt~luinS;-iM~ell-uH I I.plans-whleh-may· a t’-i~ller?pGssesslon The-Wtrele55-lnst;JII t-tell-iiOO-NautiwiiASt-ftlmen ts, <~Riess en hire, shalJ..ee..inei\lded- n-the-sale-w thoUH!ny 41 eJEtra f)ayrnent. 42-H!e Ve-s-sel· vlth evef\lth ng·belonging ta.her-5halll3e-v 43 Sellers’ risiE ana elEfleRse <!Rtil she is 8elivere8 to the u~bJ!!G-te-t-1;~000 tloll5-9i-Eh(S..£en ,;.;a.and~ l-wlrh-evet¥th r)g-belong ng-t~er .. 5-hall-he” Hl---<~ellverea-.1n0- ·en-G~he is at the time ef Elelivery, ‘l+---il1t-e r-wllleh-H1Mell~5hall hew Ae-r-espoAsib I ty-for- 48---pEY..slble-faui17GF-Gcllc-lem:-les--ef ny~esc-Ftf3tleJT.- ~y~r~undiHtoake-t.;,. pa.y Of R t’ei’ill-fl Gfi-<JI401!:! i0-Master...effieers-and-<Jtherper:SOOneJ: f..appa Rted by-t~le£-- fe!IEE5-lo-the-J)eft--whefe4ne-.Vessel-entere!Hile-Sarebeil 52 Chi!t=r~ 5-Jl~Use-3-{-Paf:t..IJ).nr-tn-pay-t~u ivaleflt.. ,§.3.-rost-faF-~eir-foom y-urany.-othe~---plare, Copyright© 2001 BIMCO, All rights reserved. Any unauthorised copying, duplication, reproduction or distribution ofthis BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.

 



  

PARTV PROVISIONS TO APPLY FOR VESSELS REGISTERED IN A BAREBOAT CHARTER REGISTRY (Optional, only to apply if expressly agreed and stated in Box 43) Definitions e the-pur1*J~ h1s-PAR+- , -he-fullowing-ti!fll”’Hhatl have tRe-m ~nlngs-here&y-asslg~9-therm 4-----!-’T.ll~ar-ewaH;l1aFI. r-Reg stry~l:lall me-an-the-teglsl!fy~- h~St-ate-wlw~flag-theJJesse~wll~nd lfl·Whle-h· e-bflatt-ere~-egi~T!-I”t~F!!beat~m;r-er5- +--dlol l’n<g-the-per~ed.(li-fhe-Silri!bnat~aRer, s----:q’he-Under!vlng- Regl;!pt!!...s.hi! l ~mean· l’he-reg Sfl”fer~ 9-&tate-irHYI1ic.JHhr-.GwoefHi ·he-lJeqel-;lr~ srered- 10--u5-G wne~nd..W.WhlGh-JuFisdiv£1orr-afld. C-Qn«’vl-ekbe- ~~f.wllk-eveFHJI’IO~ natiofHikhe-SareOOill; 12 CRarter Registration . ~,........::r~ Fmln&tlon-of- Charti!ll-by-Oofuult 14!-!Hh~~I-EhaFter-e<i-unt:leHhlr.-Gli!ft!!’I’-JH-eglS~r~ri- ±- Fn~~Sari!boilt-(;har~~Reglitfv-aHtut-e;i--lJT-8& il,-andi! fl---lH~e-f)l.ome~haiH:Iefaul r;.;he-pay~ent-of-any.;mmun s. 2,:!--due-und!!f·tHIHllGiliJilge(·s)..sl)e£lfleti-lrr8G~he~ llaFt-er~ajl, ktrrequ!Rd-by ·h£’-llloFtgagee;ihrecti!. tfle-CwneP.T-ttHe-Fegist-er-t~Ves5i!( m-th~di:Flylllg” ~Reg stf.Y-iiHlleWA-In..So -4S:- IFHh~vent-ekhe-¥essel-belRg-del~d • ‘Off!--#le- 26---BiiP’-..Boat·fharter-Regist-rv-aHt-ated-l!’rBGII~liHG-il· ~efault-bv-t-Ae--GwneFTl~~meflt-af-un’fiJffiOHA~- 2-8--due-unde-Hh!?-Ff\Oftgagefs~l’l.i!H!fS-5hO!ll hav 2-9--~ifiAH9-temliAate-t!l ~r-reH’or’thWIIA-and-wiflwu~<< W--pFejudl~ny.otnerelalm-they-mav-Oave-o~gillnst-th 31 Owners under this GRaFter. Copyright© 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.

 



 

EXECUTION VERSION

 

Term SOFR Amendments

 

ADDITIONAL CLAUSES TO BARECON 2001 DATED 22 JUNE 2021 AS AMENDED AND RESTATED BY 

AN AMENDMENT AND RESTATEMENT DEED DATED      25 September       2023

 

CLAUSE 32 – CHARTER PERIOD

 

32.1 The period of this Charter (the “Charter Period”) shall, subject to the terms of this Charter, continue for a period of sixty (60) months starting from the Commencement Date.

 

32.2 Notwithstanding the fact that the Charter Period shall commence on the Commencement Date, this Charter shall be:

  

(a) in full force and effect; and

 

(b) valid, binding and enforceable against the parties hereto,

 

with effect from the date hereof until the end of the Charter Period (subject to the terms of this Charter).

 

CLAUSE 33 – CANCELLATION

 

33.1 If:

  

(a) the Vessel is not delivered by the Charterers as sellers to the Owners as buyers under the MOA by the Cancelling Date (or such later date as the parties to the MOA may agree); or

 

(b) the MOA expires, is cancelled, terminated, rescinded or suspended or otherwise ceases to remain in full force and effect for any reason (in whole or in part),

 

then this Charter shall immediately terminate and be cancelled (without prejudice to 0 (Indemnities) and without the need for either the Owners or the Charterers to take any action whatsoever), provided that the Owners shall be entitled to retain all fees and expenses paid by the Charterers pursuant to 0 (Fees and Expenses) (and without prejudice to 0 (Fees and Expenses) and any clause of the MOA, if such fees have not been paid, the Charterers shall forthwith pay such fees and expenses to the Owners in accordance with 0 (Fees and Expenses)), save that if the Charter is terminated and/or the Vessel not delivered under the MOA for a reason solely related to a default of the Owners, then the Charterers shall not be obliged to pay the Arrangement Fee (and if the Arrangement Fee has already been paid at such time, the Owners shall refund the Arrangement Fee to the Charterers within a reasonable time). Any such payment by the Charterers under this Clause shall be irrevocable and unconditional and is acknowledged by the Charterers to be proportionate as to amount, having regard to the legitimate interest of the Owners, in protecting against the Owners’ risk of the Charterers failing to perform its obligations under this Charter. For the avoidance of doubt, the termination of the Charter shall not prejudice the operation of any provision of any Leasing Document which is expressed to survive the termination or cancellation of this Charter.

 

CLAUSE 34 – DELIVERY AND CHARTER OF VESSEL

 

34.1 This Charter is part of a transaction involving the sale, purchase and charter back of the Vessel and constitutes one of the Leasing Documents.

  

CMB Financial Leasing | Seanergy 

Amended and Restated Bareboat Charter Additional Clauses 

m.v. Hellasship 



34.2 The obligation of the Owners to charter the Vessel to the Charterers hereunder is subject to and conditional upon:

 

(a) no Termination Event or Potential Termination Event having occurred and being continuing on the date of this Charter and on the Commencement Date;

 

(b) the representations and warranties contained in 0 (Representations and Warranties) being true and correct on the date hereof and on the Commencement Date;

 

(c) the Delivery occurring on or before the Cancelling Date; and

 

(d) the Owners having received from the Charterers:

 

(i) on or before the Prepositioning Date, the documents or evidence set out in Part A of Schedule 2 (Conditions Precedent) in form and substance satisfactory to them; and

 

(ii) on the Commencement Date and prior to or simultaneously with the Owners executing a dated and timed copy of the protocol of delivery and acceptance evidencing delivery of the Vessel under the MOA and a dated and timed copy of the Acceptance Certificate, the documents or evidence set out in Part B of Schedule 2 (Conditions Precedent) in form and substance satisfactory to them,

 

and if any of the documents listed in sub-paragraph (d) above are not in the English language then they shall be accompanied by an English translation where required by the Owners.

 

34.3 On delivery to and acceptance by the Owners (in their capacity as buyers) of the Vessel from the Charterers (in their capacity as sellers) under the MOA, the Vessel shall be deemed to have been delivered to, and accepted without reservation by, the Charterers under this Charter and the Charterers shall become and be entitled to the possession and use of the Vessel on and subject to the terms and conditions of this Charter on the same day as the delivery date of the Vessel under the MOA.

  

34.4 On Delivery, as evidence of the commencement of the Charter Period, the Charterers shall sign and deliver to the Owners, the Acceptance Certificate. The Charterers shall be deemed to have accepted the Vessel under this Charter, and the commencement of the Charter Period having started, on Delivery even if, for whatever reason, the Acceptance Certificate is not signed.

  

34.5 The Charterers shall not be entitled for any reason whatsoever to refuse to accept delivery of the Vessel under this Charter once the Vessel has been delivered to and accepted by the Owners (in their capacity as buyers) from the Charterers (in their capacity as sellers) under the MOA, and the Owners shall not be liable for any losses, costs or expenses whatsoever or howsoever arising including without limitation, any loss of profit or any loss or otherwise:

 

(a) resulting directly or indirectly from any defect or alleged defect in the Vessel or any failure of the Vessel; or

 

(b) arising from any delay in the commencement of the Charter Period or any failure of the Charter Period to commence.

 

34.6 The Owners shall not be obliged to deliver the Vessel to the Charterers with any bunkers and unused lubricating oils and hydraulic oils and greases in storage tanks and unopened drums of the Vessel except for such items which are already on the Vessel on Delivery. The Owners shall not be responsible for the fitness, quality or quantity of any such bunkers and unused lubricating oils and hydraulic oils and greases and the Charterers shall make no claim against Owners in respect of the same.

CMB Financial Leasing | Seanergy

Amended and Restated Bareboat Charter Additional Clauses

m.v. Hellasship 

2

34.7 The Charterers shall procure receipt by the Owners of the conditions subsequent set out in Part C of Schedule 2 in a form and substance satisfactory to the Owners within the time periods permitted therein.

 

CLAUSE 35 – QUIET ENJOYMENT

 

35.1 Provided that no Potential Termination Event, Termination Event or Total Loss has occurred, the Owners hereby agree not to disturb or interfere in any way whatsoever with the Charterers’ lawful use, possession and quiet enjoyment of the Vessel during the Charter Period.

 

CLAUSE 36 – CHARTERHIRE AND ADVANCE CHARTERHIRE

 

36.1 In consideration of the Owners agreeing to charter the Vessel to the Charterers under this Charter at the request of the Charterers, the Charterers hereby irrevocably and unconditionally agree to pay to the Owners the Charterhire, the Advance Charterhire and all other amounts payable under this Charter in accordance with the terms of this Charter.

 

36.2 The Charterers shall pay to the Owners on the Commencement Date, an amount which is equal to the difference between the Purchase Price and the Financing Amount as of the Commencement Date (the “Advance Charterhire”). The Charterers shall be deemed to have paid the Advance Charterhire to the Owners on the Commencement Date by the Owners (as buyers under the MOA) setting off an amount equal to the Advance Charterhire against a corresponding amount of the Purchase Price payable by the Owners to the Charterers (as sellers) under the MOA.

 

36.3 The Advance Charterhire shall not bear interest and shall be non-refundable.

 

36.4 Following Delivery and commencing from the Commencement Date, the Charterers shall pay Charterhire in arrears in quarterly instalments on each Payment Date. Each instalment shall consist of:

 

(a) a capital element of Charterhire (the “Fixed Charterhire”) which shall be in an amount equivalent to 1/20*(Financing Amount less the Expiry Owners’ Costs); and

 

(b) a variable element of Charterhire (the “Variable Charterhire”) which shall be calculated by applying the aggregate of:

 

(i) the applicable Interest Rate for the relevant Hire Period; and

 

(ii) the Margin,

 

to the Owners’ Costs on the immediately preceding Payment Date (or, in the case of the First Payment Date only, on the Commencement Date) for the Hire Period ending on the relevant Payment Date by reference to the actual number of days elapsed in that Hire Period.

 

36.4A For the purposes of determining the Variable Charterhire:

 

(a) if no Term SOFR is available for any relevant Hire Period the applicable Reference Rate shall be the Interpolated Term SOFR for a period equal in length to that Hire Period;

 

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(b) if no Term SOFR is available for any relevant Hire Period and it is not possible to calculate the Interpolated Term SOFR, the applicable Reference Rate shall be the Historic Term SOFR;

 

(c) if paragraph (b) applies but no Historic Term SOFR is available for any relevant Hire Period, the applicable Reference Rate shall be the Interpolated Historic Term SOFR for a period equal in length to that Hire Period; and

 

(d) if paragraph (c) above applies but it is not possible to calculate the Interpolated Historic Term SOFR, there shall be no Reference Rate for that Term and Clause 37.3 shall apply for that Hire Period.

 

36.5 Charterhire shall be payable in arrears on the following dates (each a “Payment Date”):

  

(a) the first instalment of Charterhire shall be payable on the date falling three (3) months after the Commencement Date (the “First Payment Date”); and

 

(b) each subsequent instalment of Charterhire (other than the last instalment of Charterhire) shall be payable quarterly thereafter, with the final instalment of Charterhire payable on the last day of the Charter Period,

 

such that there are a total of twenty (20) Payment Dates during the Charter Period.

 

36.6 Payment of Charterhire on any Payment Date shall be made in same day available funds and received by the Owners by not later than 4.00 pm (Shanghai time). Any payment of Charterhire which is due to be made on a Payment Date which is not also a Business Day shall be made on the previous Business Day instead.

  

36.7 Time of payment of the Charterhire and any other payments by the Charterers under this Charter shall be of the essence of this Charter.

 

36.8 All payments of the Charterhire and any other moneys payable hereunder shall be made in Dollars.

 

36.9 All payments of the Charterhire and any other moneys payable hereunder shall be payable by the Charterers to the Owners’ designated bank account as the Owners may notify the Charterers in writing from time to time.

 

36.10 Payment of the Charterhire and any other amounts under this Charter shall be at the Charterers’ risk until receipt by the Owners.

 

36.11 The Vessel shall not at any time be deemed off-hire and the Charterers’ obligation to pay the Charterhire and any other amounts payable under this Charter (including but not limited to the Termination Sum) in Dollars shall be absolute and unconditional under any and all circumstances and shall not be affected by any circumstances of any nature whatsoever including but not limited to:

 

(a) (except in the case of the Advance Charterhire) any set off, counterclaim, recoupment, defence, claim or other right which the Charterers may at any time have against the Owners or any other person for any reason whatsoever including, without limitation, any act, omission or breach on the part of the Owners under this Charter or any other agreement at any time existing between the Owners and the Charterers;

 

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(b) any change, extension, indulgence or other act or omission in respect of any indebtedness or obligation of the Charterers, or any sale, exchange, release or surrender of, or other dealing in, any security for any such indebtedness or obligation;

 

(c) any title defect or encumbrance or any dispossession of the Vessel by title paramount or otherwise;

 

(d) any defect in the seaworthiness, condition, value, design, merchantability, operation or fitness for use of the Vessel or the ineligibility of the Vessel for any particular trade;

 

(e) the Total Loss or any damage to or forfeiture or court marshall’s or other sale of the Vessel if the Termination Sum or any part thereof remains due;

 

(f) any libel, attachment, levy, detention, sequestration or taking into custody of the Vessel or any restriction or prevention of or interference with or interruption or cessation in, the use or possession thereof by the Charterers;

 

(g) any insolvency, bankruptcy, reorganization, arrangement, readjustment, dissolution, liquidation or similar proceedings by or against the Charterers and any other Obligors;

 

(h) any invalidity, unenforceability, lack of due authorization or other defects, or any failure or delay in performing or complying with any of the terms and provisions of this Charter or any of the Leasing Documents by any party to this Charter or any other person;

 

(i) any enforcement or attempted enforcement by the Owners of their rights under this Charter or any of the Leasing Documents executed or to be executed pursuant to this Charter;

 

(j) any loss of use of the Vessel due to deficiency or default or strike of officers or crew, fire, breakdown, damage, accident, defective cargo or any other cause which would or might but for this provision have the effect of terminating or in any way affecting any obligation of the Charterers under this Charter; or

 

(k) any prevention, delay, deviation or disruption in the use of the Vessel resulting from the wide outbreak of any viruses (including the 2019 novel coronavirus), including but not limited to those caused by:

 

(i) closure of ports;

 

(ii) prohibitions or restrictions against the Vessel calling at or passing through certain ports;

 

(iii) restriction in the movement of personnel and/or shortage of labour affecting the operation of the Vessel or the operation of the ports (including stevedoring operations);

 

(iv) quarantine regulations affecting the Vessel, its cargo, the crew members or relevant port personnel;

 

(v) fumigation or cleaning of the Vessel; or

 

(vi) any claims raised by any sub-charterer or manager of the Vessel that a force majeure event or termination event (or any other analogous event howsoever called) has occurred under the relevant charter agreement or management agreement (as the case may be) of the Vessel as a result of the outbreak of such viruses.

 

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Nothing contained in this Section 36.11 shall be deemed to hinder or prevent the Charterers from pursuing any claim the Charterers may have at law against the Owner for damages for the Owner’s breach of its express obligations under this Charter.

 

36.12 All stamp duty, value added tax (for the avoidance of doubt, including without limitation, goods and services tax), withholding or other taxes and import and export duties and all other similar types of charges which may be levied or assessed on or in connection with:

 

(a) the operation of this Charter in respect of the hire and all other payments to be made pursuant to this Charter and the remittance thereof to the Owners; and

 

(b) the import, export, purchase, delivery and re-delivery of the Vessel,

 

shall be borne by the Charterers (for the avoidance of doubt, the above excludes any income tax or any tax arising from the Owners’ shares by competent tax authorities in their domicile, which shall be borne by the Owners). The Charterers shall pay, if applicable, value added tax and other similar tax levied on any Charterhire and other payments payable under this Charter by addition to, and at the time of payment of, such amounts.

 

CLAUSE 37 – CHANGES TO INTEREST RATE, DEFAULT INTEREST

 

37.1 If, before the Reporting Time, the Owners determine (which determination shall be conclusive and binding) that their cost of funds relating to the then prevailing Owners’ Costs or any part thereof would be in excess of the Market Disruption Rate, the the Owners shall promptly notify the Charterers accordingly.

 

37.2 Immediately following the notification referred to in Clause 37.1 above, if the Owners and the Charterers so require, the Owners and the Charterers, shall negotiate in good faith (for a period not more than thirty (30) days) with a view to agreeing upon a substitute or alternative basis for determining the Interest Rate for that Hire Period. Subject to Clause 37.3, any substitute or alternative basis agreed pursuant to this Clause shall, with the prior written consent of the Parties, be binding on the Parties.

 

37.3 If:

 

(a) this Clause 37.3 applies pursuant to Clause 36.4A or Clause 37.1;

 

(b) a substitute or alternative basis is not so requested and/agreed pursuant to Clause 37.2 above; or

 

(c) the amendment or waiver to the terms of the Leasing Documents is not so agreed pursuant to Clause 37.4,

 

the applicable Interest Rate shall be the rate per annum which is the sum of:

 

(i) the Margin; and

 

(ii) the cost of funds certified by the Owners (expressed as an annual rate of interest) relating to the Owners’ Costs or any part thereof during the relevant Hire Period (as reasonably determined by the Owners),

 

provided that if the rate pursuant to paragraph (c)(ii) above is less than zero, the relevant rate shall be deemed to be zero.

 

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If this Clause 37.3 applies pursuant to Clause 37.1 and the Owners do not notify a Funding Rate to the Charterers by the Reporting Time, the Owners’ cost of funds relating to that portion of the Owners’ Costs for that Hire Period shall be deemed, for the purposes of paragraph (c)(ii) above, to be the Market Disruption Rate.

 

37.4 On or at any time after the occurrence of a Published Rate Replacement Event, the Owners are entitled to make any amendment or waiver to the terms of the Leasing Documents (at the Charterers’ cost) which relates to:

 

(a) providing for the use of a Replacement Reference Rate in relation to Dollars in place of (or in addition to) that Published Rate; and

 

(b)

 

(i) aligning any provision of any Leasing Document to the use of that Replacement Reference Rate;

 

(ii) enabling that Replacement Reference Rate to be used for the calculation of the Interest Rate under this Charter (including, without limitation, any consequential changes required to enable that Replacement Reference Rate to be used for the purposes of this Charter);

 

(iii) implementing market conventions applicable to that Replacement Reference Rate;

 

(iv) providing for appropriate fallback (and market disruption) provisions for that Replacement Reference Rate; or

 

(v) adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Reference Rate (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation),

 

and pending any such amendment or waiver and the Replacement Reference Rate being utilised under the Leasing Documents to calculate the Interest rate, Clause 37.3 shall apply to the calculation of the Interest Rate.

 

37.5 If the Charterers fail to make any payment due under this Charter on the due date, they shall pay additional interest on such late payment at a rate which is equal to two per cent. (2%) per annum above the aggregate of (i) the applicable Interest Rate for the relevant Hire Period and (ii)  the Margin which shall apply prior to, during or following Delivery and shall accrue on a daily basis from the date on which such payment became due up to and excluding the date of payment thereof, and the Charterers and the Owners agree that such default rate is proportionate as to amount, having regard to the legitimate interest of the Owners, in protecting against the Owners’ risk of the Charterers failing to perform its obligations under this Charter.

 

37.6 All interest (including default interest) and any other payments under this Charter which are of an annual or periodic nature shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a three hundred and sixty (360) days’ year.

 

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CLAUSE 38 – POSSESSION OF VESSEL

 

38.1 The Charterers shall not, without the prior written consent of the Owners, assign, mortgage or pledge the Vessel or any interest therein and shall not permit the creation or existence of any Security Interest thereon (including for any monies paid in advance and not earned, and for any claims for damages arising from any breach by the Owners of this Charter and other amounts due to the Charterers under this Charter) except for the Permitted Security Interests.

  

38.2 The Charterers shall promptly notify any party (including without limitation, any sub-charterer) (as the Owners may request) in writing that the Vessel is the property of the Owners and the Charterers shall provide the Owners with a copy of such written notification.

 

38.3 If the Vessel is arrested, seized, impounded, forfeited, detained or taken out of their possession or control (whether or not pursuant to any distress, execution or other legal process), the Charterers shall procure the immediate release of the Vessel (whether by providing bail or procuring the provision of security or otherwise do such lawful things as the circumstances may require) and shall immediately notify the Owners of such event and shall indemnify the Owners against all documented losses, costs or charges incurred by the Owners by reason thereof in re-taking possession or otherwise in re-acquiring the Vessel.

 

38.4 The Charterers shall pay and discharge or cause any sub-charterer of the Vessel to pay and discharge all obligations and liabilities whatsoever which have given or may give rise to liens on or claims enforceable against the Vessel. The Charterers shall take all reasonable steps to prevent (and shall procure that a sub-charterer shall take all steps to prevent) an arrest of the Vessel.

 

CLAUSE 39 – INSURANCE

 

39.1 The Charterers shall procure that insurances for the Vessel are effected:

  

(a) in Dollars;

 

(b) in the case of fire and usual hull and machinery, marine risks and war risks (including blocking and trapping), on an agreed value basis of at least the higher of (i) one hundred per cent (100%) of then applicable Fair Market Value of the Vessel and (ii) one hundred and twenty per cent (120%) of the then prevailing Owners’ Costs;

 

(c) in the case of oil pollution liability risks, for an aggregate amount equal to the higher of (i) US$1,000,000,000 or (ii) the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine insurance market;

 

(d) in the case of protection and indemnity risks, in respect of the full tonnage of the Vessel and with a protection and indemnity club which is a member of the International Group of Protection and Indemnity Clubs;

 

(e) through brokers approved by the Owners and with first class international insurers and/or underwriters acceptable to the Owners and having a Standard & Poor’s rating of BBB+ or above, a Moody’s rating of A or above or an AM Best rating of A- or above or, in the case of war risks, through a protection and indemnity club which meets the requirements of paragraph (d) above; and

 

(f) otherwise on terms and in form acceptable to the Owners.

 

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39.2 In addition to the terms set out in Clause 13(a) (Insurance and Repairs), the Charterers shall procure that the Obligatory Insurances shall:

  

(a) subject always to paragraph (b), name the Owners and the Charterers as the only named assureds unless the interest of every other named assured or co-assured is limited:

 

(i) in respect of any Obligatory Insurances for hull and machinery and war risks;

 

(A) to any provable out-of-pocket expenses that they have incurred and which form part of any recoverable claim on underwriters; and

 

(B) to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against them); and

 

(ii) in respect of any Obligatory Insurances for protection and indemnity risks, to any recoveries they are entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against them,

 

and every other named assured or co-assured has undertaken in writing to the Owners or the Owners’ Financiers (if any) (in such form as they may require) that any deductible shall be apportioned between the Charterers and every other named assured or co-assured (save for the Owners or the Owners’ Financiers (if any)) in proportion to the gross claims made by or paid to each of them (provided that in the event they do not agree to this, the Charterers agree that they shall be responsible for bearing such deductible portion) and that they shall do all things necessary and provide all documents, evidence and information reasonably required to enable the Owners and the Owners’ Financiers (if any) in accordance with the terms of the loss payable clause, to collect or recover any moneys which at any time become payable in respect of the Obligatory Insurances;

 

(b) whenever the Owners require in respect of any Owners’ Financiers:

 

(i) in respect of fire and other usual marine risks and war risks, name (or be amended to name) the same as additional named assured for their rights and interests, warranted no operational interest and with full waiver of rights of subrogation against such Owners’ Financier, but without such financiers thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;

 

(ii) in relation to protection and indemnity risks, name (or be amended to name) the same as additional insured or co-assured for their rights and interests to the extent permissible under the relevant protection and indemnity club rules; and

 

(iii) name the Owners’ Financiers (if any) and the Owners as respectively the first ranking loss payee and the second ranking loss payee (and in the absence of any Owners’ Financiers, the Owners as first ranking loss payee) in accordance with the terms of the relevant loss payable clauses approved by the Owners’ Financiers and the Owners with such directions for payment in accordance with the terms of such relevant loss payable clause, as the Owners and the Owners’ Financiers (if any) may specify;

 

(c) provide that all payments by or on behalf of the insurers under the Obligatory Insurances to the Owners and/or the Owners’ Financiers (as applicable) shall be made without set-off, counterclaim, deduction or condition whatsoever;

 

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(d) provide that such Obligatory Insurances shall be primary without right of contribution from other insurances which may be carried by the Owners or the Owners’ Financiers (if any);

 

(e) provide that the Owners and/or the Owners’ Financiers (if any) may make proof of loss if the Charterers fail to do so; and

 

(f) provide that if any Obligatory Insurance is cancelled, or if any substantial change is made in the coverage which adversely affects the interest of the Owners and/or the Owners’ Financiers (if any), or if any Obligatory Insurance is allowed to lapse for non-payment of premium, such cancellation, change or lapse shall not be effective with respect to the Owners and/or the Owners’ Financiers (if any) for thirty (30) days after receipt by the Owners and/or the Owners’ Financiers (if any) of prior written notice from the insurers of such cancellation, change or lapse.

 

39.3 The Charterers shall:

 

(a) at least ten (10) days prior to Delivery (or such shorter period agreed by the parties), notify in writing the Owners of the terms and conditions of all Insurances;

 

(b) at least seven (7) days before the expiry of any Obligatory Insurance or otherwise before the change of appointment of any brokers (or other insurers) and any protection and indemnity or war risks association through which Obligatory Insurances are taken from time to time pursuant to this 0 (Insurance), notify the Owners of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom the Charterers propose to renew or obtain that Obligatory Insurance and of the proposed terms of such renewed or new insurance cover and obtain the Owners’ approval to such matters;

 

(c) at least two (2) days before the expiry of any Obligatory Insurance, procure that such Obligatory Insurance is renewed or to be renewed on its expiry date in accordance with the provisions of this Charter;

 

(d) procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal or the effective date of the new insurance and protection and indemnity cover notify the Owners in writing of the terms and conditions of the renewal; and

 

(e) as soon as practicable after the expiry of any Obligatory Insurance and within thirty (30) days after such expiry, deliver to the Owners a letter of undertaking as required by this Charter in respect of such Insurances for the Vessel as renewed pursuant to Clause 39.3 together with copies of the relevant policies or cover notes or entry certificates duly endorsed with the interest of the Owners and/or the Owners’ Financiers (if any).

 

39.4 The Charterers shall ensure that all insurance companies and/or underwriters, and/or insurance brokers (if any) provide the Owners with copies (or upon the Owners’ request, originals) of policies, cover notes and certificates of entry relating to the Obligatory Insurances which they are to effect or renew and letter or letters of undertaking in a form required by the Owners or the Owners’ Financiers (if any) and including undertakings by the insurance companies and/or underwriters that:

 

(a) they will have endorsed on each policy, immediately upon issuance, a loss payable clause and a notice of assignment complying with the provisions of this Charter and the Financial Instruments;

 

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(b) they will hold the benefit of such policies and such insurances, to the order of the Owners and/or the Owners’ Financiers (if any) and/or such other party in accordance with the said loss payable clause;

 

(c) they will advise the Owners and the Owners’ Financiers (if any) promptly of any material change to the terms of the Obligatory Insurances of which they are aware;

 

(d) they will notify the Owners and the Owners’ Financiers (if any) not less than fourteen (14) days before the expiry of the Obligatory Insurances, in the event of their not having received notice of renewal instructions from the Charterers and, in the event of their receiving instructions to renew, they will promptly notify the Owners and the Owners’ Financiers (if any) of the terms of the instructions; and

 

(e) if any of the Obligatory Insurances form part of any fleet cover, the Charterers shall procure that the insurance broker(s), or leading insurer, as the case may be, undertakes to the Owners and the Owners’ Financiers (if any) that such insurance broker or insurer will not set off against any sum recoverable in respect of a claim relating to the Vessel under such Obligatory Insurances any premiums due in respect of any other vessel under any fleet cover of which the Vessel forms a part or any premium due for other insurances, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums, and they will not cancel such Obligatory Insurances by reason of non-payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of the Vessel forthwith upon being so requested by the Owners or the Owners’ Financiers (if any) and where practicable.

 

39.5 The Charterers shall ensure that any protection and indemnity and/or war risks associations in which the Vessel is entered provides the Owners and the Owners’ Financiers (if any) with:

 

(a) a copy of the certificate of entry for the Vessel as soon as such certificate of entry is issued; and

 

(b) a copy of the letter or letters of undertaking in such form as may be required by the Owners or the Owners’ Financiers (if any) or in such association’s standard form.

 

39.6 The Charterers shall ensure that all policies relating to the Obligatory Insurances are deposited with the approved brokers (if any) through which the insurances are effected or renewed.

 

39.7 The Charterers shall procure that all premiums or other sums payable in respect of the Obligatory Insurances are punctually paid.

 

39.8 The Charterers shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.

 

39.9 The Charterers shall neither do nor omit to do (nor permit to be done or not to be done) any act or thing which would or might render any Obligatory Insurance invalid, void, voidable or unenforceable or render any sum payable under an Obligatory Insurance repayable in whole or in part and, in particular:

 

(a) the Charterers shall procure that all necessary action is taken and all requirements are complied with which may from time to time be applicable to the Obligatory Insurances, and (without limiting the obligations contained in this Clause) ensure that the Obligatory Insurances are not made subject to any exclusions or qualifications to which the Owners have not given their prior approval (unless such exclusions or qualifications are made in accordance with the rules of a protection and indemnity association which is a member of the International Group of Protection and Indemnity Clubs);

 

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(b) the Charterers shall not make or permit any changes relating to the classification or the classification society of the Vessel or, subject to procuring the provision of a replacement manager’s undertaking in substantially the same form as the Manager’s Undertaking, any changes to the manager or operator of the Vessel unless such changes have, if required, first been approved by the underwriters of the Obligatory Insurances and the Owners or the Owners’ Financiers (if any);

 

(c) the Charterers shall procure that all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Vessel is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation) are made and the Charterers shall promptly provide the Owners with copies of such declarations and a copy of its valid certificate of financial responsibility; and

 

(d) the Charterers shall not employ the Vessel, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the Obligatory Insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.

 

39.10 The Charterers shall not make or agree to any material alteration to the terms of any Obligatory Insurance nor waive any right relating to any Obligatory Insurance without the prior written consent of the Owners.

 

39.11 The Charterers shall not settle, compromise or abandon any claim under any Obligatory Insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all documents, evidence and information to enable the Owners to collect or recover any moneys which at any time become payable in respect of the Obligatory Insurances.

 

39.12 The Charterers shall provide the Owners with copies of all communications between the Charterers and:

 

(a) the approved brokers;

 

(b) the approved protection and indemnity and/or war risks associations; and

 

(c) the approved insurers and/or underwriters, which relate directly or indirectly to:

 

(i) prior to the occurrence of a continuing Termination Event, a Major Casualty or a Total Loss; and

 

(ii) at any time after the occurrence of a Termination Event and while it is continuing, any material communications whatsoever relating to the insurances of the Vessel.

 

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39.13 The Charterers shall promptly provide the Owners (or any persons which they may designate) with any information which the Owners may request for the purpose of:

 

(a) obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the Insurances (including but not limited to the report obtained under Clause 39.16); or

 

(b) effecting, maintaining or renewing any such insurances as are referred to in Clause 13(a) (Insurance and Repairs) or this 0 or dealing with or considering any matters relating to any such insurances;

 

39.14 The Charterers shall upon demand fully indemnify the Owners (including if requested by the Owners, make direct payment to the relevant insurer or broker for the same) in respect of all premiums and other expenses which are incurred by:

 

(a) the Owners in connection with or with a view to effecting, maintaining or renewing an innocent owners interest insurance and an innocent owners additional perils insurance or any similar protective shipowner insurance that is taken out in respect of the Vessel; and/or

 

(b) the Owners’ Financiers (if any) in connection with or with a view to effecting, maintaining or renewing a mortgagee’s interest insurance, a mortgagee’s additional perils insurance, all protection and indemnity insurance that is taken out in respect of the Vessel,

 

in each case as referred to in paragraphs (a) and (b) above, in such an amount as the Owners consider reasonable and on such other terms, through such insurers and generally in such manner as the Owners or the Owners’ Financiers (as the case may be) may from time to time consider appropriate.

 

39.15 The Charterers shall be solely responsible for and indemnify the Owners in respect of all loss or damage to the Vessel (insofar as the Owners shall not be reimbursed by the proceeds of any insurance in respect thereof) however caused occurring at any time or times before physical possession thereof is retaken by the Owners, with only reasonable wear and tear to the Vessel excepted.

 

39.16 The Charterers shall reimburse or indemnify the Owners for any expenses reasonably incurred by the Owners in obtaining a detailed report signed by an independent firm of marine insurance brokers approved by the Owners dealing with the Obligatory Insurances and stating the opinion of such firm as to the adequacy of the Obligatory Insurances:

 

(a) when an agreed form of such detailed report satisfactory to the Owners is obtained as a condition precedent requirement under Part A of Schedule 2 (Conditions Precedent) of this Charter;

 

(b) when the Owners procure the issuance of such detailed report no more than once every calendar year, unless a Termination Event has occurred in which case such reports may be procured at the Charterer’s cost at any such time; and

 

(c) further from time to time upon the Owners’ demand where, in the Owners’ opinion, at any time during the Charter Period there has been a material change in the terms of the Insurances and/or a change in the circumstances which would materially adversely affect the adequacy of the Obligatory Insurances.

 

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39.17 The Charterers shall:

 

(a) keep the Vessel insured at their expense against such other risks (not including loss of hire or earnings risks) which the Owners and the Owners’ Financiers (if any) consider reasonable for a prudent shipowner or operator to insure against for trading, management, operational and/or safety purposes at the relevant time (as notified by the Owners) and which risks are, at that time, generally insured against as market practice by owners or operators of vessels similar to the Vessel and having regard to the availability of such cover in the insurance market at that time; and

 

(b) upon demand fully indemnify the Owners in respect of all premiums and other expenses incurred by the Owners in respect of any other insurances which the Owners deem necessary (acting reasonably) and takes out in respect of the Vessel.

 

CLAUSE 40 – WARRANTIES RELATING TO VESSEL

 

40.1 It is expressly agreed and acknowledged that the Owners are not the manufacturer or original supplier of the Vessel but that the Owners (in their capacity as buyers) have purchased the Vessel from the Charterers (in their capacity as sellers) pursuant to the MOA at the request of the Charterers, for the purpose of then chartering the Vessel to the Charterers hereunder and that no condition, term, warranty or representation of any kind is or has been given to the Charterers by or on behalf of the Owners in respect of the Vessel (or any part thereof).

 

40.2 All conditions, terms or warranties express or implied by the law relating to the specifications, quality, description, merchantability or fitness for any purpose of the Vessel (or any part thereof) or otherwise are hereby expressly excluded.

 

40.3 The Charterers agree and acknowledge that the Owners shall not be liable for any claim, loss, damage, expense or other liability of any kind or nature caused directly or indirectly by the Vessel or by any inadequacy thereof or the use or performance thereof or any repairs thereto or servicing thereof and the Charterers shall not by reason thereof be released from any liability to pay any Charterhire or other payment due under this Charter.

 

CLAUSE 41 – TERMINATION AND REDELIVERY

 

41.1 Upon termination of the leasing of the Vessel under this Charter pursuant to Clause 47.2, the Charterers shall be obliged to pay the Owners the Termination Sum on the Termination Date and it is hereby agreed by the parties hereto that:

 

(a) without prejudice to Clause 42.2, the obligation to pay the Termination Sum is a continuing obligation and shall survive the termination of the leasing of the Vessel under this Charter and shall continue in full force and effect until irrevocably and unconditionally paid in full;

 

(b) payment of the Termination Sum is deemed to be proportionate as to amount, having regard to the legitimate interest of the Owners, in protecting against the Owners’ risk of the Charterers failing to perform its obligations under this Charter; and

 

(c) the Termination Sum shall, depending on the nature of the Termination Event(s) on the basis of which the Owners serve a Termination Notice, be either an obligation to pay damages following acceptance by the Owners of a breach of condition by the Charterers or an obligation to pay an agreed sum in specified circumstances which do not involve a breach of contract by the Charterers.

 

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41.2 If the Charterers fail to make any payment of the Termination Sum on the Termination Date, Clause 37.5 shall apply and the Owners shall be entitled to exercise their rights under 0.

 

41.3 Concurrently with the unconditional and irrevocable payment of the Termination Sum in full pursuant to the terms of this Charter, this Charter shall terminate and the Owners shall (save in the event of Total Loss or in the event that the Vessel has been sold or contracted to be sold pursuant to 0), at the cost of the Charterers, transfer the legal and beneficial ownership of the Vessel on an “as is where is” basis to the Charterers or their nominees free from all mortgages, encumbrances, liens, debts or any claims whatsoever incurred or permitted by the Owners (save for those liens, encumbrances and debts incurred by the Charterers or arising out of or in connection with this Charter), and shall execute a bill of sale and a protocol of delivery and acceptance evidencing the same and such sale shall be completed otherwise in accordance with Clause 56.1(a) and 56.1(b).

 

41.4 The Charterers hereby undertake to indemnify the Owners against any documented claims incurred in relation to the Vessel prior to such transfer of ownership. Any taxes, notarial, consular and other costs, charges and expenses connected with closing of the Owners’ register shall be for the Charterers’ account.

 

41.5 On natural expiration of this Charter, unless the Purchase Option Price is paid by the Charterers in accordance with 0, the Charterers shall re-deliver the Vessel to the Owners in accordance with Clause 41.6 and shall ensure that they have fulfilled their obligations under this Charter and made payment of all Charterhire and all other moneys pursuant to the terms of this Charter. In such case, the Charterers shall give the Owners not less than 20 running days’ preliminary notice of expected date and port or place of redelivery and not less than 3 running days’ definite notice of expected date and port or place of redelivery. Any changes thereafter in the Vessel’s position shall be notified immediately to the Owners.

 

41.6 If the Charterers are required to redeliver the Vessel to the Owners pursuant to the terms of this Charter, the Vessel shall be redelivered and taken over safely afloat at a safe and accessible berth or anchorage in such location as the Owners may require (which, for the avoidance of doubt, shall exclude any war listed area declared by the Joint War Committee). The Charterers shall ensure that, at the time of redelivery to the Owners, the Vessel:

 

(a) be in an equivalent class as she was as at the Commencement Date and without any recommendations or conditions and with valid, unextended certificates for not less than three (3) months and free of average damage affecting the Vessel’s classification and in the same or as good structure, state, condition and classification as that in which she was deemed on the Commencement Date, fair wear and tear not affecting the Vessel’s classification excepted;

  

(b) has passed her 5-year special survey (if applicable), and subsequent second intermediate surveys and drydock (if applicable) at the Charterers’ time and expense without any recommendations or conditions:

 

(i) to the satisfaction of the Approved Classification Society; and

 

(ii) in the case of the 5-year special survey, to the reasonable satisfaction of an Owners’ Surveyor appointed at the cost of the Charterers;

 

(c) has her survey cycles up-to-date and trading and class certificate valid for at least the number of months agreed in Box 17;

 

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(d) be re-delivered to the Owners together with all spare parts and spare equipment as were on board at the time of Delivery, and any such spare parts and spare equipment on board at the time of re-delivery shall be taken over by the Owners free of charge;

 

(e) be free of any cargo and Security Interest (save for the Security Interests granted pursuant to the Financial Instruments, if any);

 

(f) be free of any crew and officers unless otherwise instructed by the Owners;

 

(g) be free of any charter or other employment (unless the Owners wish to retain the continuance of any prevailing charter or as otherwise agreed by the Owners in their absolute discretion); and

 

(h) have such amount of bunkers on board the Vessel as would be sufficient to enable the Vessel to sail to the nearest bunker port in compliance with all bunkering fuel content regulations then applicable in such place of redelivery.

 

41.7 The Charterers warrant that they will not permit (or request any sub-charterer not to) the Vessel to commence a voyage (including any preceding ballast voyage) which cannot reasonably be expected to be completed in time to allow redelivery of the Vessel within any time period required by this 0 (Termination and Redelivery). Notwithstanding the above, should the Charterers fail to redeliver the Vessel within any time period required by this 0 (Termination and Redelivery), the Charterers shall pay the daily equivalent to the rate of Charterhire plus five per cent. (5%) or to the then applicable BCI rate, whichever is the higher, for the number of days by which the Charter Period is exceeded.

 

41.8 If the Charterers are required to redeliver the Vessel to the Owners under the terms of this Charter, the Owners shall be entitled to appoint surveyors (the “Owners’ Surveyor”) (but at Charterers’ cost) for the purpose of determining and agreeing in writing the condition of the Vessel at the time of such redelivery. The Charterers shall provide the Owners’ Surveyor with all such facilities and access to the Vessel as may be required to enable the Owners’ Surveyor to conduct its survey of the Vessel and shall take all such actions as may be reasonably recommended by the Owners’ Surveyor to ensure that the Vessel shall be redelivered in accordance with Clause 41.6.

 

41.9 The Owners shall not be obliged to accept redelivery of the Vessel until the Owners are reasonably satisfied that all conditions for the redelivery of the Vessel under this Charter are met, and the Vessel shall (if the redelivery is at the end of the Charter Period) continue to be on-hire under the terms of this Charter until such redelivery. The Owners reserve all rights to recover from the Charterers any costs, expense and/or liabilities incurred or suffered by them (including without limitation, the costs of any repairs which may be required to restore the Vessel to the condition required by Clause 41.6 as a result of the Vessel not being redelivered in accordance with the terms of this Charter.

 

41.10 The Owners shall, at the time of the redelivery of the Vessel, take over all bunkers, lubricating oil, unbroached provisions, paints, ropes, other consumable stores and spare parts in the Vessel at no cost to the Owners.

 

CLAUSE 42 – SALE OF VESSEL BY THE OWNERS IN THE EVENT OF NON-PAYMENT OF TERMINATION SUM

 

42.1 The Charterers agree that should the Termination Sum not be paid on the Termination Date:

 

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(a) save as required to comply with this Clause 42.1, the Charterers’ right to possess and operate the Vessel shall immediately cease and (without in any way affecting the Charterers’ obligation to pay the Charterer the Termination Sum and comply with its other obligations under this Charter) the Charterers shall hold the Vessel as gratuitous bailee only to the Owners, the Charterers shall procure that the master and crew follow the orders and directions of the Owners and the Charterers shall, upon the Owners’ request (at Owners’ sole discretion), be obliged to immediately (and at the Charterers’ own cost) redeliver the Vessel to the Owners at such ready and nearest safe port or location as the Owners may require and for the avoidance of doubt, any such redelivery shall not extinguish the Owners’ right to recover the Termination Sum from the Charterers under this Charter;

 

(b) the Owners shall be entitled (at Owners’ sole discretion) to operate the Vessel as they may require and may create whatsoever interests thereon, including without limitation charterparties or any other form of employment contracts provided that the Earnings of the Vessel during such period less its operational expenses (the “Net Trading Proceeds”) shall be applied against the Termination Sum and any other amounts payable under the Leasing Documents pursuant to 0 provided that if such use of the Vessel results in the Owners suffering a loss then such losses shall be included in the indemnities contained in 0 and be added to the Termination Sum; and

 

(c) the Owners shall be entitled (at Owners’ sole discretion) to immediately thereafter sell the Vessel to any person on such terms as they deem fit, subject to the right of the Charterers to have a period of 45 days from the Termination Date (the “Nomination Period”) to first nominate or identify a purchaser for the Vessel (a “Nominated Purchaser”) and the Owners shall sell the Vessel to such Nominated Purchaser subject to all of the following conditions being satisfied:

 

(i) the Nominated Purchaser is acceptable to the Owners (such acceptability not to be unreasonably withheld or delayed); and

 

(ii) the price to be paid by the Nominated Purchaser (after deducting any commissions, taxes and other costs of sale) is equal to or more than the applicable Termination Sum (unless otherwise agreed by the Owners in their absolute discretion) unless the shortfall is paid by any Obligor or member of the Group on or before such sale,

 

and any net sale proceeds (after deducting all fees, taxes, disbursements and any other documented costs and expenses incurred by the Owners in connection with such sale) (the “Net Sales Proceeds”) derived from any such sale to a Nominated Purchaser or any other person shall be applied towards reduction of the Termination Sum in accordance with 0 (General Application of Proceeds). If the Net Sales Proceeds are not sufficient to settle the Termination Sum in full, the Charterers shall remain liable to pay the shortfall and default interest shall continue to accrue on the unpaid portion of the Termination Sum in accordance with Clause 37.5.

 

42.2 Notwithstanding Clause 42.1, the Owners may, by written notice to the Charterers at any time after the expiry of the Nomination Period, elect to retain the Vessel instead of selling the Vessel instead of selling the Vessel under Clause 42.1(c) above (with such option to elect to retain the Vessel to take effect from such date as they may nominate after the Termination Date (regardless of date of the notice)), and in doing so, the Owners shall first obtain the Fair Market Value of the Vessel (after deducting any commissions, taxes and costs which would be likely to be incurred in connection with a sale of the Vessel) and if the Fair Market Value (less such deductions) of the Vessel as at the date of such nomination is less than the Termination Sum as at such date, the Charterers shall immediately pay the difference to the Owners upon the Owners’ demand. If the Fair Market Value of the Vessel (subject to the aforesaid deductions) exceeds the Termination Sum as at such date, the Owners shall within twenty five days (of the date of the notice) pay the difference to the Charterers.

 

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CLAUSE 43 – TOTAL LOSS

 

43.1 Throughout the Charter Period, the Charterer shall bear the full risk of any Total Loss of or any other damage to the Vessel howsoever arising. If the Vessel becomes a Total Loss after Delivery, the Charterer shall, subject to Clause 43.2, pay the Termination Sum to the Owners on the Total Loss Payment Date. Upon such receipt by the Owners of the Termination Sum, this Charter shall terminate (without prejudice to any provision of this Charter expressed to survive termination) but until such receipt, the Charterers shall remain liable to make all payments of Charterhire and all other amounts to the Owners under this Charter, notwithstanding that the Vessel has become a Total Loss.

 

43.2 Any Total Loss Proceeds unconditionally received by the Owners (or the Owners’ Financiers in accordance with the terms of the relevant loss payable clause) shall be applied in accordance with 0 and shall satisfy the obligation of the Charterers to pay the Termination Sum to the extent received by the Owners or the Owners’ Financiers in accordance with the terms of the relevant loss payable clause). The obligation of the Charterers to pay the Termination Sum shall remain unaffected and exist regardless of whether any of the insurers have agreed or refused to meet or has disputed in good faith, the claim for Total Loss.

 

43.3 If the Total Loss Proceeds unconditionally received by the Owners or the Owners’ Financiers in accordance with the terms of the relevant loss payable clause) are less than the Termination Sum, the Charterers shall pay such shortfall to the Owner on the Total Loss Payment Date.

 

44.4 The Owners shall have no obligation to supply to the Charterers with a replacement vessel following the occurrence of a Total Loss.

 

CLAUSE 44 – FEES AND EXPENSES

 

44.1 The Charterers shall pay to the Owners a non-refundable arrangement fee (the “Arrangement Fee”) in the amount and at the times agreed in the Fee Letter.

 

44.2 All costs and expenses including, but not limited to legal costs, expenses and other disbursements incurred by the Owners and each of their legal counsels in relation to preparing, negotiating and executing this Charter and the Leasing Documents and/or any Financial Instruments, shall be for the account of the Charterers (regardless of whether the transaction contemplated by the Leasing Documents actually completes).

 

44.3 If:

 

(a) the Charterers request an amendment, waiver or consent;

 

(b) the Charterers make a request to re-register the Vessel in another Flag State; or

 

(c) an amendment is required to address the fact that the Reference Rate is not or is likely not to be available for Dollars or any amendment or waiver arising from or in connection with Clause 37.4, the Charterers shall, on demand, reimburse the Owners for the amount of all reasonable and documented costs and expenses (including legal fees) incurred by the Owners in responding to, evaluating, negotiating or complying with that request or requirement (including, for the avoidance of doubt, any amounts the Owners have to pay under the terms of the Financial Instruments).

 

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44.4 All documented costs and expenses incurred by the Owners in relation to the acquisition, registration of title of the Vessel in the Owners’ name in the Flag State together with any and all fees (including but not limited to any vessel registration and tonnage fees and the Owners’ initial and ongoing registration and maintenance costs if required to be registered as a foreign maritime entity or the appointment of resident agents under the laws of the Flag State) payable by the Owners to register, maintain and/or renew such registration, shall be for the account of the Charterers. Without prejudice to the foregoing, if the Flag State requires the Owners to establish a physical presence or office in the jurisdiction of such Flag State, all fees, costs and expenses payable by the Owners to establish and maintain such physical presence or office shall be for the account of the Charterers. The Charterers shall promptly provide the Owners with evidence of payment of the annual register (including but not limited to the Owners’ being registered as a foreign maritime entity)/tonnage tax amounts payable to the Flag State or any other aforesaid costs, expenses and/or taxes when the same fall due.

 

44.5 All reasonable and documented costs and expenses (including legal fees) incurred by the Owners in relation to the transfer of title of the Vessel by the Owners to the Charterers and the re-delivery of the Vessel by the Charterers to the Owners pursuant to 0 (Termination and Redelivery) shall be for the account of the Charterers.

 

44.6 The Charterers shall, on demand, pay to the Owners the amount of all costs and expenses (including legal fees) incurred by the Owners in connection with the enforcement of, or the preservation of any rights under, any Leasing Document, including, without limitation, any action brought by the Owners to arrest or recover possession of the Vessel, and with any proceedings instituted by or against the Owners as a consequence of it entering into a Leasing Document or enforcing those rights.

 

CLAUSE 45 – NO WAIVER OF RIGHTS

 

45.1 No neglect, delay, act, omission or indulgence on the part of either Party in enforcing the terms and conditions of this Charter or any other Leasing Document (to which they are party to) shall prejudice the strict rights of that Party or be construed as a waiver thereof nor shall any single or partial exercise of any right of either party preclude any other or further exercise thereof.

 

45.2 No right or remedy conferred upon either Party by this Charter or any other Leasing Document shall be exclusive of any other right or remedy provided for herein or by law and all such rights and remedies shall be cumulative.

 

CLAUSE 46 – NOTICES

 

Any notice, certificate, demand or other communication to be served, given, made or sent under or in relation to this Charter shall be in English and in writing and (without prejudice to any other valid method or giving, making or sending the same) shall be deemed sufficiently given or made or sent if sent by registered post or by email to the following respective address: 

 

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(a) to the Owners: c/o CMB Financial Leasing Co., Ltd.
     

21F, China Merchants Bank Building

No. 1088 Lujiazui Ring Road

Shanghai

China 200120
       
      Attention: Chen Yujia
      Email: chenyujia098@cmbchina.com/
      zyzlsceb@cmbchina.com
      Tel: +86-21-61061534
         
  (b) to the Charterers:

Hellas Ocean Navigation Co.

c/o Seanergy Management Corp.

154 Vouliagmenis Avenue,

16674 Glyfada, Athens, Greece
      Attention: Mr. Stavros Gyftakis
      Email: legal@seanergy.gr and
      finance@seanergy.gr
      Tel: +30 210 8913520

 

or, if a party hereto changes its address or email address, to such other address (or email address) as that party may notify to the other.

 

CLAUSE 47 – TERMINATION EVENTS

 

47.1 The Owners and the Charterers hereby agree that any of the following events shall constitute a Termination Event:

 

(a) the Charterers or the Guarantor fails to pay or the Owners do not receive on the due date any amount payable pursuant to a Leasing Document, unless such failure to pay is caused by a technical error and payment is made within three (3) Business Days of its due date;

 

(b) the Charterers breach or omit to observe or perform or procure the performance of any of the undertakings in Clauses 34.7, 50.1(f), 0, 0, 53.1(b), 53.1(c), 53.1(d), 53.1(g) or 53.1(h);

 

(c) the Charterers fail to obtain and/or maintain the Insurances required under 0 (Insurance) in accordance with the provisions thereof (or any insurer in respect of such Insurances cancels the Insurances or disclaims liability with respect thereto);

 

(d) any Obligor commits any other breach of, or omits to observe or perform, any of their other obligations or undertakings in any Leasing Document (other than a breach referred to in paragraphs (a) to (c) above) or any Approved Manager that is not a member of the Group breaches any provision of, or omits to observe or perform, any of their obligations or undertakings in any Manager’s Undertaking unless such breach or omission is in the reasonable opinion of the Owners, remediable and the relevant Obligor or Approved Manager remedies such breach or omission to the satisfaction of the Owners (acting reasonably) within ten (10) Business Days of the earlier of (i) the date of the notice thereof from the Owners or (ii) upon the relevant Obligor or Approved Manager becoming aware of the same;

 

(e) any representation or warranty made by or on behalf of an Obligor, in or pursuant to any Leasing Document to which it is a party, proves to be, in the opinion of the Owners, untrue or misleading when it is made;

 

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(f) any of the following occurs in relation to any Financial Indebtedness of any Obligor:

 

(i) any Financial Indebtedness is not paid when due or not paid within any applicable grace period;

 

(ii) any Financial Indebtedness is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described) and following the expiry of any applicable grace period;

 

(iii) any commitment for any Financial Indebtedness is cancelled or suspended by any of its creditors as a result of an event of default (however described) and following the expiry of any applicable grace period;

 

(iv) any of its creditors becomes entitled to declare any Financial Indebtedness due and payable prior to its specified maturity as a result of an event of default (however described) and following the expiry of any applicable grace period; or

 

(v) any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of such Obligors or member of the Group ceases to be available or becomes capable of being terminated or declared due and payable or cash cover is required or becomes capable of being required, as a result of any termination event or event of default (howsoever defined) and following the expiry of any applicable grace period,

 

provided that no Termination Event will occur under this paragraph (f) in respect of the Guarantor if the aggregate amount of Financial Indebtedness falling within sub-paragraphs (i) to (v) above is less than US$5,000,000 (or its equivalent in any other currency or currencies);

 

(g) any of the following occurs in relation to any Obligor:

 

(i) it becomes unable to pay its debts as they fall due;

 

(ii) any administrative or other receiver is appointed over all or a substantial part of its assets unless as part of a solvent reorganisation which has been approved in writing by the Owners;

 

(iii) it makes any formal declaration of bankruptcy or any formal statement to the effect that it is insolvent or likely to become insolvent or a winding up or administration order is made in relation to it, or its members or directors of pass a resolution to the effect that it should be wound up, placed in administration or cease to carry on business or it makes any formal statement to the effect that it is reasonably likely to become insolvent;

 

(iv) a petition is filed in any Relevant Jurisdiction for its winding up or administration, or the appointment of a provisional liquidator over it;

 

(v) it petitions a court, or presents any proposal for, any form of judicial or non-judicial suspension or deferral of payments, reorganisation of its debt (or certain of its debt) or arrangement with all or a substantial proportion (by number or value) of their creditors or of any class of them or any such suspension or deferral of payments, reorganisation or arrangement is effected by court order, contract or otherwise;

 

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(vi) any meeting of its members or directors is summoned to authorise or take any action of a type described in paragraphs (ii), (iii), (iv) or (v) above;

 

(vii) in a country other than England and Wales, any event occurs or any procedure is commenced which, in the opinion of the Owners, is similar to any of the foregoing described in paragraphs (ii), (iii), (iv) or (v) above;

 

(viii) any expropriation, attachment, sequestration, distress or execution (or any analogous process in any jurisdiction) affects any of its asset or assets (other than a Total Loss of the Vessel) provided that no Termination Event will occur under this sub-paragraph in respect of the Guarantor unless the relevant event would have or is reasonably likely to have a Material Adverse Effect;

 

(ix) it fails to comply with or pay any sum due from it under any final judgment or any final order made or given by a court or tribunal of competent jurisdiction; or

 

(x) if it suspends or ceases to carry on all or a material part of its business;

 

(h) any consent, approval, authorisation, license or permit necessary to enable the Charterers to operate or charter the Vessel or to enable any Obligor or any Approved Manager to (i) comply with any provision of a Leasing Document to which it is a party or (ii) ensure that the obligations of that Obligor or Approved Manager under such Leasing Document are legal, valid, binding or enforceable, is not granted, expires without being renewed, is revoked or becomes, at the relevant time, expressly liable to or otherwise subject to automatic revocation or any condition of such a consent, approval, authorisation, license or permit is not fulfilled or waived within any applicable grace period (resulting in such consent, approval, authorisation, licence or permit being, at the relevant time, subject to automatic revocation or expiration);

 

(i) any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect;

 

(j) an Obligor suspends or ceases carrying on its business;

 

(k) the Security Interest constituted by any Security Document is in any way imperilled or in jeopardy or this Charter or any Leasing Document or any Security Interest created by a Security Document:

 

(i) is cancelled, terminated, rescinded or suspended or otherwise ceases to remain in full force and effect for any reason or no longer constitutes valid, binding and enforceable obligations of any party to that document for any reason whatsoever; or

 

(ii) is amended or varied without the prior written consent of the Owners, except for any amendment or variation which is expressly permitted by this Charter or any other relevant Leasing Document;

 

(l) any Obligor or any Approved Manager rescinds, repudiates (or purports to rescind or repudiates or purports to repudiate) a Leasing Document;

 

(m) it is or has become:

 

(i) unlawful or prohibited, whether as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or

 

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(ii) contrary to, or inconsistent with, any regulation,

 

for any Obligor or Approved Manager to maintain or give effect to any of its obligations under any Leasing Document;

 

(n) if it becomes unlawful in any applicable jurisdiction for the Owners to perform any of their obligations as contemplated by this Charter or any other Leasing Document to which they are a party;

 

(o) any Termination Event (as defined in the Other Charter) occurs under the Other Charter;

 

(p) if as a result of any Sanctions, the Owners or the Owners’ Financiers are prohibited from performing any of their obligations under the Leasing Documents, the Financial Instruments or the transactions contemplated under each of these respective documents;

 

(q) if any Obligor:

 

(i) is or becomes a Prohibited Person;

 

(ii) is owned or controlled by or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person;

 

(iii) owns or controls a Prohibited Person;

 

(iv) has a Prohibited Person serving as a director, officer or employee;

 

(r) any lease, hire purchase agreement, charter or any other financing arrangement in respect of any Fleet Vessel is terminated, cancelled or repudiated by the relevant lessor or owner or financier as a consequence of any termination event or event of default (howsoever defined therein); or

 

(s) a Change of Control in respect of the Charterers occurs without the prior written consent of the Owners.

 

47.2 Notwithstanding and without prejudice to 0 (Cancellation), upon the occurrence of any Termination Event, the Owners may issue a written notice to the Charterers terminating this leasing of the Vessel under this Charter and demanding payment of the Termination Sum (the “Termination Notice”), whereupon the Charterers shall be obliged to pay the Termination Sum to the Owners on the date specified by the Owners in their sole discretion in the Termination Notice (the “Termination Date” but which shall be no earlier than the date falling twenty (20) Business Days after the date of the Termination Notice).

 

47.3 For the avoidance of doubt, notwithstanding any action taken by the Owners following a Termination Event, the Charterers shall remain liable for the outstanding obligations on their part to be performed under this Charter including but not limited to all insurance, operational and maintenance covenants until such time as the Vessel is redelivered to the Owners in accordance with 0, or the title is transferred to the Charterers in accordance with Clause 41.3 or the Vessel is sold in accordance with 0.

 

47.4 Without limiting the generality of the foregoing or any other rights of the Owners, upon the occurrence of a Termination Event, the Charterers agree and acknowledge that the Owners shall have the sole and exclusive right and power to (i) settle, compromise, compound, adjust or defend any action, suit or proceeding relating to or pertaining to the Vessel and this Charter, (ii) make proof of loss, appear in and prosecute any action arising from any policy or policies of insurance maintained pursuant to this Charter, and settle, adjust or compromise any claims for loss, damage or destruction under, or take any other action in respect of, any such policy or policies and/or change or appoint a new manager for the Vessel and the appointment of any originally appointed manager may be terminated immediately without any recourse to the Owners.

 

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47.5 Each Termination Event shall either be a breach of condition by the Charterers where it involves a breach of this Charter or any of the other Leasing Document by the Charterers or shall otherwise be an agreed terminating event, the occurrence of which gives rise to a right of the Owners to terminate the leasing of the Vessel under this Charter and to exercise its rights under this clause.

 

CLAUSE 47A – MANDATORY SALE

 

If there is a Change of Control of the Guarantor, the Charterers shall immediately notify the Charterers of the same and (unless the Owners otherwise agree in writing) the Charterers shall be required to purchase the Vessel from the Owners by the Charterers paying the Termination Sum to the Owners within thirty (30) days from the Change of Control and (upon such payment of the Termination Sum) this Charter shall terminate and title to the Vessel shall be transferred in accordance with the procedures set out in Clause 41.3.

 

CLAUSE 48 – REPRESENTATIONS AND WARRANTIES

 

48.1 The Charterers represent and warrant to the Owners, save as otherwise stated in this Clause, as of the date hereof, and on each day henceforth until the last day of the Charter Period, as follows:

 

(a) each of the Obligors and any Approved Manager which is a member of the Group is duly incorporated and validly existing under the laws of its jurisdiction of incorporation;

 

(b) each Obligor and any Approved Manager which is a member of the Group has the corporate capacity and has taken all corporate actions to obtain and maintain all consents, approvals, authorisations, licenses or permits necessary or desirable for it:

 

(i) to enable it lawfully to enter into, exercise its rights and comply with and perform its obligations under each of the Leasing Documents to which it is a party; and

 

(ii) to make each of the Leasing Documents to which it is a party admissible in evidence in its Relevant Jurisdictions;

 

(c) all consents, approvals, authorisations, licences or permits referred to in 0(b) remain in full force and effect and nothing has occurred which makes any of them liable to revocation;

 

(d) each Leasing Document to which an Obligor and any Approved Manager which is a member of the Group, is a party constitutes such Obligor’s and Approved Manager’s legal, valid and binding obligations enforceable against such party (and where expressed to be a deed, shall be enforceable as a deed) in accordance with its respective terms;

 

(e) the entry into and performance by each Obligor and any Approved Manager which is a member of the Group, and the transactions contemplated by, each Leasing Document to which such Obligors and Approved Manager is a party do not and will not conflict with:

 

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(i) any law or regulation applicable to it (including Anti-Money Laundering Laws, Anti- Bribery and Anti-Corruption Laws, Sanctions or laws relating to anti-trust or collusion and laws relating to human rights violation);

 

(ii) its constitutional documents; and

 

(iii) any agreement or instrument binding upon it or any of its assets or constitute a default or termination event (however described) under any such agreement or instrument;

 

(f) the choice of governing law as stated in each Leasing Document and the agreement by the relevant parties thereto to refer disputes to the relevant courts or tribunals as stated in such Leasing Document are valid and binding against such parties;

 

(g) under the laws of the Relevant Jurisdictions of each Obligor and Approved Manager which is a member of the Group it is not necessary for any of the Leasing Documents to which it is a party to be registered, filed, recorded, notarised or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar taxes or fees be paid on or in relation to the Leasing Documents to which it is a party or the transactions contemplated by those Leasing Documents except payment of associated fees which registration, filings, taxes and fees will be made and paid promptly after the date of the relevant Leasing Documents to which it is a party;

 

(h) each Security Document to which an Obligor or Approved Manager which is a member of the Group is a party does now or, as the case may be, will upon execution and delivery create, the Security Interests it purports to create over any assets to which such Security Interest, by its terms, relates, and such Security Interests will, when created or intended to be created, be valid and effective;

 

(i) no party has any Security Interest (other than the Permitted Security Interests) or any other interest, right or claim over, in or in relation to the Vessel, this Charter, any moneys payable under any Leasing Document or over any assets which are, the subject of the Security Interests created or intended to be created by the Security Documents;

 

(j) the obligations of each Obligor, under each Leasing Document to which it is a party, are the direct, general and unconditional obligations of such Obligor and rank at least pari passu with all other present and future unsecured and unsubordinated creditors of each Obligor save for any obligation which is mandatorily preferred by law and not by virtue of any contract;

 

(k) all payments which an Obligor is liable to make under any Leasing Document to which such Obligor is a party may be made by such party without deduction or withholding for or on account of any tax payable under the laws of their jurisdiction of incorporation;

 

(l) no Obligor has failed to pay all taxes applicable to, or imposed on or in relation to it, its business or if applicable, the Vessel;

 

(m) no Obligor has breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect;

 

(n) no Obligor or other member of the Group, nor any of their subsidiaries, directors or officers, affiliates or any employee, has engaged in any activity or conduct which would violate any Anti-Bribery and Anti-Corruption Laws or Anti-Money Laundering Laws in any applicable jurisdiction and each Obligor and Group member has instituted and maintained policies and procedures designed to prevent violation of such laws, regulations and rules;

 

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(o) no Obligor or other member of the Group, nor any of their subsidiaries, directors or officers, or to the best of their knowledge affiliates or employees, has taken or will take any action in furtherance of an offer, payment, promise to pay or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any government official (which shall include without limitation, any officer or employee of a government or government owned or controlled entity or of a public international organisation or any person acting in an official capacity for and on behalf of the foregoing or any political party or party official or candidate for public office) to influence official action or secure an improper advantage;

 

(p) no Environmental Claim has been made or threatened against any Obligor or any other member of the Group;

 

(q) no Environmental Incident has occurred and no person has claimed that an Environmental Incident has occurred;

 

(r) no Termination Event or Potential Termination Event has occurred or might reasonably be expected to result from the entry into and performance of this Charter or any other Leasing Document and no other event or circumstance is outstanding which constitutes a default or a termination event (however described) under any other agreement or instrument which is binding on it or to which its assets are subject;

 

(s) no litigation, arbitration or administrative proceedings or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) of or before any court, arbitral body or agency have been started or threatened against any Obligor which has or is reasonably likely to have a Material Adverse Effect;

 

(t) the consolidated financial statements delivered pursuant to Clause 49.1(a) are prepared in accordance with GAAP consistently applied and give a true and fair view of (if audited) or fairly represent (if unaudited) the financial condition of the Guarantor as at the end of the period to which such financial statements relate;

 

(u) since the date of the Original Financial Statements or as the case may be, the date of any more recent financial statements delivered pursuant to Clause 49.1(a), there has been no material adverse change in the Guarantor’s or the Group’s business, assets or financial condition;

 

(v) in relation to any information provided by any Obligor for the purposes of this Charter:

 

(i) such information was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated;

 

(ii) any financial projections contained in such information have been prepared on the basis of recent historical information and on the basis of reasonable assumptions, and

 

(iii) nothing has occurred or been omitted from any such information and no information has been given or withheld that results in any such information being untrue or misleading;

 

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(w) no corporate action, legal proceeding or other procedure or step described in Clause 47.1(g) or circumstances described in Clause 47.1(f) has been taken or exists or, to their knowledge, threatened in relation to an Obligor;

 

(x) no Obligors, nor any of its assets are entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgment, execution or other enforcement);

 

(y) for the purposes of the Regulation, the centre of main interest (as that term is used in Article 3(1) of the Regulation) of each Obligor is situated in its jurisdiction of incorporation and it has no “establishment” (as that term is used in Article 2(10) of the Regulation) in any other jurisdiction;

 

(z) no Obligor is a US Tax Obligor and none of them have established a place of business in the United States of America;

 

(aa) no Obligor has established a place of business in the United Kingdom;

 

(bb) no Obligor, Approved Manager which is a member of the Group, sub-charterer (to the best of its knowledge) and no member of the Group:

 

(i) is a Prohibited Person;

 

(ii) is owned or controlled by or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person;

 

(iii) owns or controls a Prohibited Person; or

 

(iv) has a Prohibited Person serving as a director, officer or, to the best of its knowledge, employee;

 

(cc) no Obligor nor its respective directors, member, officers and any member of the Group nor (to the best of its knowledge) any or any sub-charterer is in breach of applicable Sanctions, has been or is currently being investigated on compliance with Sanctions, have received notice or are aware of any claim, action, suit or proceeding against any of them with respect to Sanctions, or have taken any action to evade the application of Sanctions; and

 

(dd) any factual information provided by the Charterers (or on their behalf) to the Owners was true and accurate as at the date it was provided or as the date at which such information was stated.

 

CLAUSE 49 – GENERAL INFORMATION UNDERTAKINGS

 

49.1 The Charterers undertake that they shall comply or procure compliance with the following information undertakings commencing from the date hereof and up to the last day of the Charter Period:

 

(a) they will send to the Owners:

 

(i) as soon as possible, but in no event later than ninety (90) days after the end of each financial half year of the Charterers, the unaudited semi-annual management accounts of the Charterers;

 

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(ii) as soon as possible, but in no event later than one hundred and fifty (150) days after the end of each financial year of the Charterers, the unaudited annual management accounts of the Charterers;

 

(iii) as soon as possible, but in no event later than ninety (90) days after the end of each financial half year of the Guarantor, the unaudited semi-annual consolidated financial accounts of the Guarantor;

 

(iv) as soon as possible, but in no event later than one hundred and fifty (150) days after the end of each financial year of the Guarantor, the audited annual consolidated financial accounts of the Guarantor;

 

(b) they will procure that each set of financial statements delivered pursuant to Clause 49.1(a) shall be certified by a duly authorised officer of the relevant company as giving a true and fair view (if audited) or fairly representing (if unaudited) its financial condition and operations as at the date as at which those financial statements were drawn up and the financial statements of the Guarantor shall be provided together with a Compliance Certificate signed by an authorized signatory of the Guarantor certifying that the financial covenants referred to in 0 have been complied with and setting out all relevant calculations and statements demonstrating compliance with such financial covenants;

 

(c) they will promptly provide to the Owners, copies of all notices and minutes relating to any of their extraordinary shareholders’ meetings which are despatched to the shareholders or to their creditors or any class thereof and its constitutional documents where these have been amended or varied (to the extent not contrary to the other provisions of this Charter);

 

(d) they will provide the Owners promptly upon becoming aware of them, the details of:

 

(i) any litigation, arbitration or administrative proceedings or investigations relating to any alleged or actual breach of any Sanctions or Anti-Money Laundering Laws which are current or pending against any Obligor, Approved Manager, sub-charterer or other member of the Group;

 

(ii) any litigation, arbitration or administrative proceedings or investigations relating to any other matters not referred to in paragraph (i) above (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) in relation to an Obligor; and

 

(iii) any Termination Event or Potential Termination Event that has occurred (and the steps, if any, being taken to remedy it);

 

(e) they will, promptly upon a request by the Owners, supply to the Owners a certificate signed by an officer on its behalf certifying that no Termination Event or Potential Termination Event has occurred (or if a Termination Event or Potential Termination Event has occurred, specifying the nature of the Potential Termination Event or Termination Event (and the steps, if any, being taken to remedy it);

 

(f) they will, as soon as practicable upon the request of the Owners, provide the Owners with any additional reasonable financial or other information relating to:

 

(i) themselves, any Obligor and/or the Vessel (including, but not limited to the condition and location of the Vessel, its Earnings and its Insurances);

 

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(ii) details of the Vessel’s management and employment status and copies of all accurate, complete and up-to-date records and logs of all voyages made by the Vessel (but not more than once every twelve months);

 

(iii) the Security Interests relating to any Leasing Documents;

 

(iv) compliance of each Obligor and any Approved Manager with the terms of the Leasing Documents;

 

(v) the financial condition, business and operations of the Obligors; or

 

(vi) to any other matter relevant to, or to any provision of any Leasing Document to which it is a party,

 

which may reasonably be requested by the Owners at any time; and

 

(g) they shall immediately notify the Owners in writing if any payments which they or any other Obligor, is liable to make under any Leasing Document is subject to deduction or withholding or any other tax whatsoever;

 

CLAUSE 50 – GENERAL UNDERTAKINGS

 

50.1 The Charterers undertake that they shall comply or procure compliance with the following general undertakings commencing from the date hereof and up to the last day of the Charter Period:

 

(a) they will, and will procure that each other Obligor and each Approved Manager which is a member of the Group shall, obtain and promptly renew or procure the provision or renewal of and provide copies of, from time to time, any necessary consents, approvals, authorisations, licenses or permits of any regulatory body or authority for the transactions contemplated under each Leasing Document to which any Obligor and each Approved Manager which is a member of the Group is a party (including without limitation the sale, chartering and operation of the Vessel);

 

(b) they will at their own cost, and will procure and each other Obligor and each Approved Manager which is a member of the Group, will:

 

(i) ensure that any Leasing Document to they are a party validly creates the obligations and the Security Interests which such Leasing Document purports to create; and

 

(ii) without limiting the generality of paragraph (i), promptly register, file, record or enrol any Leasing Document to which they are a party with any court or authority in all Relevant Jurisdictions, pay any stamp duty, registration or similar tax in all Relevant Jurisdictions in respect of any Leasing Document to which they are a party, give any notice or take any other step which, is or has become necessary or desirable for any such Leasing Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which such Leasing Document creates;

 

(c) they will not, and will procure each other Obligor will not, create or permit to subsist any Security Interest over any of its assets which are, the subject of the Security Interests created or intended to be created by the Security Documents, unless with the prior written approval of the Owners and save for Permitted Security Interests;

 

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(d) they will not, and will procure each Obligor will not, change the location of its centre of main interest (as that term is used in Article 3(1) of the Regulation) from that stated in relation to it under 48.1(y) and it will create no “establishment” (as that term is used in Article 2(10) of the Regulation) in any other jurisdiction;

 

(e) except with the Owners’ prior written consent, they will not, and will procure each other Obligor will not, make a substantial change to the general nature of their respective businesses from that carried on at the date of this Charter;

 

(f) except with the Owners’ prior written consent or where expressly permitted under the Leasing Documents, they will not, and will procure that each other Obligors will not, enter into any merger, amalgamation, demerger, solvent reorganisation or corporate reconstruction other than an internal group reorganisation under which the (i) the Charterers and Guarantor each survive and (ii) the Charterers remain wholly and directly (or indirectly) wholly owned by the Guarantor (and if indirectly owned, any replacement shareholder of the Charterers has entered into Share Security over the shares in the Charterers in a form acceptable to the Owners);

 

(g) they will not:

 

(i) enter into any borrowing except for loans from affiliates which are unsecured and fully subordinated to the Owners in a manner acceptable to the Owners and which are approved by the Owners in writing;

 

(ii) incur any liabilities or obligations to any party except for those reasonably incurred in the ordinary course of operating, chartering, repairing and maintaining the Vessel;

 

(iii) be the creditor in respect of any loan or any form of credit to any person;

 

(iv) give or allow to be outstanding any guarantee or indemnity to or for the benefit of any person in respect of any obligation of any other person or enter into any document under which they assume any liability of any other person other than any guarantee or indemnity given under the Leasing Documents;

 

(v) enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of the Vessel, its Earnings or its Insurances; and

 

(vi) without prejudice to the above sub-paragraphs (i) to (v), enter into any transaction (whether with another member of the Group or otherwise) which are, in any respect, less favourable than those which they could obtain an a bargain made at arms’ length; and

 

(h) they will not, and shall procure that the Guarantor shall not, following the occurrence of a Termination Event which is continuing or where any of the following would result in the occurrence of a Potential Termination Event or Termination Event or suffering a net loss in respect of the preceding financial year:

 

(i) declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its shares (or any class of its shares);

 

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(ii) repay or distribute any dividend or share premium reserve;

 

(iii) pay any management, advisory or other fee to or to the order of any of its shareholders; or

 

(iv) redeem, repurchase, defease, retire or repay any of their shares or resolve to do so.

 

CLAUSE 51 – FINANCIAL COVENANTS

 

51.1 The Charterers undertake that they shall procure that the Guarantor shall comply with the following financial covenants during the Charter Period:

 

(a) On each Testing Date and for the relevant Accounting Period throughout the Charter Period:

 

(i) Cash and Cash Equivalents divided by the number of Fleet Vessels shall not be lower than $500,000; and

 

(ii) the Leverage Ratio shall not be more than 85 per cent.

 

51.2 In this 0 (Financial Covenants):

 

“Accounting Information” means, (i) the annual audited financial statements of the Guarantor and (ii) the semi-annual unaudited consolidated financial statements of the Guarantor as provided to the Owners in accordance with Clause 49.1(a).

 

“Accounting Period” means:

 

(i) the financial year of the Guarantor ending 31 December of each calendar year; or

 

(ii) the financial half year of the Guarantor ending 30 June of each calendar year,

 

in respect of which, in each case, the relevant Accounting Information is required to be delivered pursuant to Clause 49.1(a).

 

“Cash and Cash Equivalents” shall be that shown in the balance sheet in the relevant Accounting Information and includes term deposits, restricted cash and amounts required by the Group’s lenders and lessors to be held for minimum liquidity purposes.

 

“Fleet Market Value” means valuations of the Fleet Vessels calculated in accordance with the principles set out in the definition of Fair Market Value but using one Approved Valuer.

 

“Fleet Vessels” means all vessels owned by the Guarantor and its subsidiaries.

 

“Market Value Adjusted Total Assets” means, as at the date of calculation, the aggregate of the Market Value Adjusted Other Assets and the Total Current Assets.

 

“Market Value Adjusted Other Assets” means, as at the date of calculation, the Fleet Market Value plus the book value (less depreciation and amortization computed in accordance with the applicable Accounting Information on a consolidated basis of all non-current assets of the Group (which, without limitation, shall exclude all Fleet Vessels)), as stated in the latest Accounting Information.

 

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“Total Current Assets” means, the aggregate of the cash, term deposits and marketable securities, trade and other receivables from persons (other than persons being members of the Group) realisable within 1 year such amount to be determined on a consolidated basis less any discounts, allowances and activated goodwill, in each case as shown in the applicable Accounting Information.

 

“Net Debt” means, as at the date of calculation, the Total Debt less any cash, term-deposits restricted cash and cash equivalents, in each case as stated in the applicable Accounting Information.

 

“Leverage Ratio” means, as at the date of calculation, the ratio (expressed as a percentage) of Net Debt to Market Value Adjusted Total Assets.

 

“Testing Date” means 30 June and 31 December of each financial year.

 

“Total Debt” means, as at the date of calculation, the current portion of long-term debt, net of deferred finance costs and the long-term debt, net of current portion and deferred finance costs of the Group as shown in the applicable Accounting Information.

 

51.3 The Charterers shall promptly notify the Owners if the Guarantor agrees to provide any more favourable financial covenants to a creditor than those that are set out in favour of the Owners under Clause 51.1 above (or to amend existing ones such that they place such creditor in a position which is comparatively more favourable in terms of the financial covenants than the position of the Owners) under any agreements entered into or to be entered into in connection with any Financial Indebtedness owed by the Guarantor or a Group member to a creditor. Such more favourable financial covenants shall be deemed as automatically incorporated into this Charter in favour of the Owners from the date of the financing agreements entered into in connection with such other Financial Indebtedness (in place of the financial covenants set out in Clause 51.1 or to supplement them, at the option of the Owners) and the Charterers agree that they will and shall procure that the Guarantor will promptly enter into such necessary documentation as may be required to amend and supplement (as applicable) this Charter and any applicable Leasing Document so as to record the incorporation of such more favourable financial covenants into this Charter and any applicable Leasing Document (as the case may be).

 

CLAUSE 52 – VALUATIONS

 

52.1 The Charterers undertake that they shall comply or procure compliance with the following undertakings commencing from the date hereof and up to the last day of the Charter Period:

 

(a) they shall at their cost:

 

(i) provide to the Owners valuations of the Vessel (to be addressed to the Owners) to enable the Owners to determine the Initial Market Value of the Vessel; and

 

(ii) at least twice per calendar year (on each Testing Date) and at any time after the occurrence of a Potential Termination Event or Termination Event which is continuing if requested by the Owners, provide to the Owners valuations of the Vessel (or any other vessel over which additional Security Interests have been created in accordance with Clause 52.1(b)) (to be addressed to the Owners) to enable the Owners to determine the Fair Market Value of the Vessel or such other relevant vessel; and

 

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(b) if at any time, the Vessel’s Fair Market Value falls below an amount equivalent to one hundred and twenty per cent (120%) of the Owners’ Costs (the “LTV Breach”, and the said difference between the Fair Market Value and one hundred and twenty per cent (120%) of the Owners’ Costs shall be referred to as the “shortfall” for the purposes of this paragraph), the Charterers shall, promptly and in any event no later than the date falling thirty (30) days from the date which the valuations relating to the Vessel’s Fair Market Value are received by the Owners and in the Owners’ sole discretion, either:

 

(i) make payment in an amount such as to eliminate the shortfall which payment shall be deemed to be an advance payment of hire and credited against future instalment(s) of Fixed Charterhire (or part thereof) payable in inverse order of maturity of payments of Fixed Charterhire; and/or

 

(ii) provide, or ensure that a third party has provided, additional Security Interests which, in the opinion of the Owners has a net realisable value at least equal to the shortfall and is acceptable to the Owners, and which is documented in such terms as the Owners may require.

 

CLAUSE 53 – VESSEL UNDERTAKINGS

 

53.1 The Charterers undertake that they shall comply or procure compliance with the following Vessel and Sanctions related undertakings commencing from the date hereof and up to the last day of the Charter Period:

 

(a) they will notify the Owners promptly upon becoming aware:

 

(i) that any Environmental Claim has been made against the Charterers or in connection with the Vessel, or that any Environmental Incident has occurred;

 

(ii) of any arrest or detention of the Vessel or any exercise of any lien on the Vessel or its Earnings or any requisition of the Vessel for hire;

 

(iii) any modification or alteration of the Vessel of a value in excess of the Major Casualty amount;

 

(iv) any casualty or occurrence as a result of which the Vessel has become or is, by the passing of time or otherwise, likely to become, a Major Casualty;

 

(v) that a Total Loss has occurred; and

 

(vi) any violation of Sanctions in relation to the Vessel,

 

and will keep the Owners fully up-to-date with all developments;

 

(b) they will comply, and will procure that each other Obligor and each other member of the Group and (on a best efforts basis) any sub-charterer will comply, with all Sanctions and all laws and regulations relating to them, the Vessel and its construction, ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code (including the maintenance of an ISSC), all Environmental Laws, all Anti-Money Laundering Laws, Anti-Bribery and Anti-Corruption Laws and the laws of the Vessel’s registry, and in particular, they shall effect and maintain a sanctions compliance policy which, inter alia, implements the recommendations of the Sanctions Advisory, to ensure compliance with all such laws and regulations implemented from time to time, including, without limitation they will, and will procure that each other Obligors, each other member of the Group and each sub-charterer will:

 

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(i) conduct their activities in a manner consistent with US and UN sanctions, as applicable;

 

(ii) have sufficient resources in place to ensure execution of and compliance with their own sanctions policies by their personnel, e.g., direct hires, contractors, and staff;

 

(iii) ensure subsidiaries and affiliates comply with the relevant policies, as applicable;

 

(iv) have relevant controls in place to monitor automatic identification system (AIS) transponders;

 

(v) have controls in place to screen and assess onboarding or offloading cargo in areas they determine to present a high risk;

 

(vi) have controls to assess authenticity of bills of lading, as necessary; and

 

(vii) have controls in place consistent with the Sanctions Advisory,

 

(c) without limiting Clause 53.1(b), they will procure that:

 

(i) the Vessel shall not be constructed, operated, employed, managed, used by or for the benefit of a Prohibited Person;

 

(ii) the Vessel shall not be employed in trading with any Prohibited Person or in any manner contrary to Sanctions;

 

(iii) notwithstanding any other provision of this paragraph (c), the Vessel shall not be permitted to call at any port in any Prohibited Country or any area or country where trading in such area or country would constitute or would be reasonably expected to constitute a breach of Sanctions;

 

(iv) the Vessel shall not be traded in any manner which would trigger the operation of any sanctions limitation or exclusion clause (or similar) in the Insurances or in any manner which would result or would reasonably be expected to result in any Obligor or the Owners becoming a Prohibited Person; and

 

(v) that each charterparty in respect of the Vessel shall contain, for the benefit of the Owners, language which gives effect to the provisions of Clause 53.1(c) as regards Sanctions and of this Clause and which permits refusal of employment or voyage orders if compliance would result in a breach of Sanctions and which prohibits trading to any Prohibited Country;

 

(d) they will, promptly notify the Owners and provide all information which may be relevant for the purposes of ascertaining whether the Obligors, the Approved Manager and any sub-charterer are in compliance with all laws and regulations and Sanctions applicable to and/or binding on them, and in particular, they shall notify the Owners in writing promptly upon being aware that any of the Charterers’ shareholders, directors, officers or employees is a Prohibited Person or has otherwise become a target of any Sanctions;

 

(e) save with the Owners’ prior consent in writing, they shall not agree or enter into, and shall procure that each Approved Manager does not agree or enter into, any transaction, arrangement, document or do or omit to do anything which will have the effect of varying, amending, supplementing or waiving any term of the relevant Management Agreement which would result in an annual increase of the management fee to more than ten per cent. (10%) of the management fee payable under the relevant Management Agreement as at the date of this Charter;

 

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(f) they shall not:

 

(i) change or appoint a manager of the Vessel other than an Approved Manager and provided that any such Approved Manager has (prior to accepting its appointment) entered into a Manager’s Undertaking in such form as may be acceptable to the Owners; or

 

(ii) terminate or otherwise assign or transfer any Management Agreement unless with the prior approval in writing by the Owners such approval not to be unreasonably withheld or delayed;

 

(g) with effect from and following Delivery, ensure that the Vessel will be registered in the Flag State under the name of the Owners;

 

(h) the Vessel shall be classed with an Approved Classification Society upon Delivery at the highest classification available for vessels of its type and be free of all overdue conditions (unless special dispensation is obtained from class and insurers), and maintain such class during the Charter Period;

 

(i) unless with the Owners’ prior written consent they shall not deactivate or lay up the Vessel;

 

(j) save for the installation of scrubbers (which, once installed shall form part of the Vessel and shall not be removed at redelivery) they shall not make any structural change to the Vessel without the prior written consent of the Owners other than a structural change that is mandatorily required by any applicable law and regulation and the Charterers shall provide the Owners with at least fifteen (15) days prior written notice of the commencement of any such alterations (as well as notification of such alterations being completed promptly after such completion) and shall provide the Owners with all information (including without limitation, any plans for the proposed modifications, repairs, replacement, installation or alteration, valuation reports and confirmation of class from the Approved Classification Society) as the Owners may reasonably require for the purposes of determining their approval together with evidence that the Obligatory Insurances have been appropriately updated, and shall indemnify the Owners against all costs and expenses incurred by the Owners in connection with all such proposed modifications, repairs, replacement, installation or alteration of the Vessel and if such modification, repair or replacement or installation is approved or satisfies the requirements of this Clause, once effected, shall form part of the Vessel and shall not (unless requested by Owners) be removed at any redelivery;

 

(k) they will procure that each Approved Manager shall, upon the request of the Owners at the expense of the Charterers, furnish the Owners with an inspection report setting out such matters relating to the condition of the Vessel as the Owners may require on an annual basis and if a Potential Termination Event or Termination Event occurs, at such other frequency as the Owners may otherwise require;

 

(l) subject to the other terms of this Charter, the Charterers may freely sub-charter the Vessel save that the Owners’ prior written consent shall be required:

 

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(i) to any sub-bareboat or demise charter of the Vessel;

 

(ii) to any Assignable Sub-Charter; and

 

(iii) to any employment of the Vessel which does not permit a transfer of the registered ownership of the Vessel without the consent of the applicable sub-charterer;

 

(m) they shall procure that:

 

(i) all Earnings in connection with the Vessel are paid into the Operating Account;

 

(ii) at all times during the Charter Period the Operating Account has a minimum credit balance of at least US$550,000; and

 

(iii) the Owners are given any information and access relating to the Operating Account that they may require; and

 

(n) they shall, upon the request of the Owners and at the cost of the Charterers, on or before 31st July in each calendar year commencing from 1 January 2022, supply or procure the supply to the Owners all information necessary in order for the Owners to comply with its or any Owners’ Financiers’ obligations under the Poseidon Principles in respect of the preceding year, including, without limitation, all ship fuel oil consumption data required to be collected and reported in accordance with Regulation 22A of Annex VI and any Statement of Compliance relating to the Vessel for the preceding calendar year and, for the avoidance of doubt, such information shall be “Confidential Information” for the purposes of 0 but the Charterers acknowledge that, in accordance with the Poseidon Principles, such information will form part of the information published regarding the Owners’ and/or Owners’ Financiers’ portfolio climate alignment.

 

CLAUSE 54 – INSPECTION OF VESSEL

 

54.1 Without prejudice to Clause 54.2 below, the Owners shall be entitled to inspect or survey the Vessel or instruct a duly authorized surveyor to carry out such survey on their behalf:

 

(a) to ascertain the condition of the Vessel and satisfy themselves that the Vessel is being properly repaired and maintained;

 

(b) in dry-dock if the Charterers have not dry-docked the Vessel in accordance with Clause 10(g) (Periodical Dry-docking);

 

(c) as may be required for classification purposes; and

 

(d) for any other commercial reason they consider necessary,

 

and in doing so, the Charterers shall afford the Owners or their authorised surveyor with all proper facilities in relation to such inspection or survey.

 

54.2 The Owners shall be entitled to exercise its rights of inspection or survey as described under Clause 54.1 (Inspection of Vessel) once a year (subject to provision of prior notice) without interference to the operation and trading of the Vessel save that upon the occurrence of a Termination Event or Potential Termination Event, the Owners shall have the right to inspect or survey the Vessel at any time (and for the avoidance of doubt, more than once a year).

 

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54.3 The costs and fees for any inspection and survey permitted under this Clause shall be paid by the Charterers.

 

54.4 All time used in respect of inspection, survey or repairs pursuant to this Clause shall be for the Charterers’ account and form part of the Charter Period.

 

54.5 The Charterers shall also permit the Owners to inspect the Vessel’s log books or survey reports whenever requested and shall whenever required by the Owners furnish them with full information regarding any casualties or other accidents or material damage to the Vessel.

 

CLAUSE 55 – PURCHASE OPTION

 

55.1 The Charterers shall have the option (the “Purchase Option”) to purchase the Vessel on any Purchase Option Date (as hereinafter defined) specified in the Purchase Option Notice (as hereinafter defined) at the applicable Purchase Option Price, subject to the other terms of this 0 (Purchase Option).

 

55.2 The Purchase Option shall be exercisable only (unless otherwise agreed by the Owners):

 

(a) upon the Charterers providing not less than forty five (45) days’ written notice (the “Purchase Option Notice”) to purchase the Vessel on a date specified therein (the “Purchase Option Date”) which Purchase Option Date shall, subject to Clause 60.1, fall on any anniversary of the Commencement Date on or after the second (2nd) anniversary of the Commencement Date or on the last day of the Charter Period (as the case may be) unless the Purchase Option Notice is served pursuant to a proposed Transfer by the Owners, in which case the Purchase Option Notice must be served by the Charterers within the time provided under Clause 62.4 (but regardless of whether this falls on or after the second (2nd) anniversary of the Commencement Date) and the Purchase Option Date specified in such Purchase Option Notice may fall on any Business Day being not less than thirty (30) days after the date of the relevant Purchase Option Notice; and

 

(b) in the absence of the occurrence of a Termination Event that is continuing on or prior to either the date of the Purchase Option Notice or the Purchase Option Date.

 

55.3 The Purchase Option Notice shall each be signed by a duly authorised officer or attorney of the Charterers and, once delivered to the Owners, will in each case be irrevocable and the Charterers shall be bound to pay to the Owners the Purchase Option Price on the Purchase Option Date.

 

55.4 The sale of the Vessel pursuant to the Charterers’ exercise of the Purchase Option shall be conducted in accordance with 0 (Sale of the Vessel).

 

CLAUSE 56 – SALE OF THE VESSEL

 

56.1 The sale of the legal and beneficial interest and title in the Vessel pursuant to the Charterers’ exercise of, as the case may be, the Charterers’ Purchase Option under 0 (Purchase Option) or pursuant to Clause 41.3 shall be on an “as is where is” and subject to the following terms and conditions:

 

(a) no condition, warranty or representation of any kind is or has been given by or on behalf of the Owners in respect of the Vessel or any part thereof, and accordingly the Charterers hereby confirm that they have not, in entering into this Charter, relied on any condition, warranty or representation by the Owners or any person on the Owners’ behalf, express or implied, whether arising by law or otherwise in relation to the Vessel or any part thereof, including, without limitation, warranties or representations as to the description, suitability, quality, merchantability, fitness for any purpose, value, state, condition, appearance, safety, durability, design or operation of any kind or nature of the Vessel or any part thereof, and the benefit of any such condition, warranty or representation by the Owners is hereby irrevocably and unconditionally waived by the Charterers to the extent permissible under applicable law, and the Charterers hereby also waive any rights which they may have in tort in respect of any of the matters referred to above and irrevocably agree that the Owners shall have no greater liability in tort in respect of any such matter than they would have in contract after taking account of all of the foregoing exclusions. No third party making any representation or warranty relating to the Vessel or any part thereof is the agent of the Owners nor has any such third party authority to bind the Owners thereby. Notwithstanding anything contained above, nothing contained herein is intended to obviate, remove or waive any rights or warranties or other claims relating thereto which the Charterers (or their nominee) or the Owners may have against the manufacturer or supplier of the Vessel or any third party;

 

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(b) the Vessel shall be free from all registered mortgages, liens, encumbrances, claims and debts whatsoever incurred by the Owners (save for those liens, encumbrances and debts arising out of or in connection with this Charter or the Leasing Documents);

 

(c) the Purchase Option Price or Termination Sum (as applicable) shall be paid by (or on behalf of) the Charterers to the Owners together with (without double counting) unpaid amounts of Charterhire, Breakfunding Costs (if applicable), default interest accruing under Clause 37.5 (if applicable), fees, expenses and any other moneys then owing by or accrued or due from the Charterers under this Charter; and

 

(d) concurrently with the Owners receiving irrevocable payment of the Purchase Option Price or the Termination Sum (as applicable) and all other moneys payable under this Charter in full pursuant to the terms of this Charter, the Owners shall (save in the event of Total Loss) (at Charterers’ cost) transfer the legal and beneficial ownership of the Vessel on an “as is where is” basis to the Charterers or their nominees and shall (at Charterers’ cost) execute a bill of sale and a protocol of delivery and acceptance evidencing the same and any other document strictly necessary to transfer the title of the Vessel, as well as procure the relevant ship registry to issue a certificate of title or any other evidence provided in accordance with the practice of such registry showing that the Vessel shall be free from any registered mortgages in favour of the Owners, to the Charterers and the relevant ship registry of the Vessel under the Charterers’ flag of choice (and to the extent required for such purposes, the Vessel shall be deemed first to have been redelivered to the Owners). Any fees (including legal fees), costs or disbursements incurred by the Owners in connection with the Charterers’ exercise of the Purchase Option or transfer of the Vessel following payment of the Termination Sum shall be indemnified or reimbursed by the Charterers to the Owners upon the Owners’ demand on or prior to the Purchase Option Date or date of payment of the Termination Sum (as applicable).

 

CLAUSE 57 – INDEMNITIES

 

57.1 The Charterers shall pay such amounts to the Owners, on the Owners’ demand, in respect of all claims, expenses, liabilities, losses, taxes, fees (including but not limited to any vessel registration and tonnage fees) suffered or incurred by or imposed on the Owners arising from this Charter and any Leasing Document, whether prior to, during or after termination of the leasing of this Charter, including without limitation:

 

 

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(a) as a result of incorporating the Owners in the relevant jurisdiction selected by the Charterers or required for the purpose of flying the flag of the Vessel in a particular jurisdiction;

 

(b) in connection with delivery, possession, performance, control, registration, repair, survey, insurance, maintenance, manufacture, purchase, ownership or operation of the Vessel (including but not limited to any social security contributions), or the financing or re-financing in relation to the Vessel obtained from the Owners’ Financiers;

 

(c) in connection with the prevention or release of liens or detention of or requisition, use, operation, redelivery, sale or disposal of the Vessel (or any part of it) and/or whether prior to, during or after termination;

 

(d) in connection with or following the occurrence of a Termination Event or Potential Termination Event (including without limitation, by reason thereof in re-taking possession or otherwise in acquiring the Vessel pursuant to Clause 38.3).

 

  Without prejudice to its generality, this Clause covers any claims, expenses, liabilities and losses which arise, or are asserted, under or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code, the MARPOL Protocol, any Environmental Law or any Sanctions.

 

57.2 The Charterers hereby irrevocably agree to indemnify and hold harmless the Owners against all consequences or liabilities arising from the master, officers or agents signing bills of lading or other documents and any claim, expense, liability or loss incurred by the Owners in liquidating or employing deposits from the Owners’ Financiers or third parties to fund the acquisition of the Vessel pursuant to the MOA.

 

57.3 Notwithstanding anything to the contrary herein (but subject and without prejudice to 0 (Cancellation)) and without prejudice to any right to damages or other claim which the Charterers may have at any time against the Owners under this Charter, the indemnities provided by the Charterers in favour of the Owners shall continue in full force and effect notwithstanding any breach of the terms of this Charter or termination of this Charter pursuant to the terms hereof or termination of this Charter by the Owners.

 

57.4 All rights which the Charterers have at any time (whether in respect of this Charter or any other transaction) against any Obligors shall be fully subordinated to the rights of the Owners under the Leasing Documents and until the end of this Charter and unless the Owners otherwise direct, the Charterers shall not exercise any rights which it may have (whether in respect of this Charter or any other transaction) by reason of performance by it of its obligations under any Leasing Document or by reason of any amount becoming payable, or liability arising, under this Clause:

 

(a) to be indemnified by any Obligor;

 

(b) to claim any contribution from any third party providing security for, or any other guarantor of, any Obligor under any Leasing Document;

 

(c) to take any benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of any Obligor under any Leasing Document or of any other guarantee or security taken pursuant to, or in connection with, any Leasing Document by any Obligors;

 

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(d) to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of any Leasing Document;

 

(e) to exercise any right of set-off against any Obligor; and/or

 

(f) to claim or prove as a creditor of any Obligor,

 

and if the Charterers receive any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Owners by any Obligor or in connection with any Leasing Document to be repaid in full on trust for the Owners and shall promptly pay or transfer the same to the Owners.

 

CLAUSE 58 – NO SET-OFF OR TAX DEDUCTION

 

58.1 All Charterhire and any payment made from the Charterers to enable the Owners to pay all amounts under a Leasing Document shall be paid punctually and:

 

(a) without any form of set-off, cross claim, condition or counterclaim;

 

(b) free and clear of any tax deduction or withholding unless required by law; and

 

(c) net of any bank charges or bank fees.

 

58.2 Without prejudice to Clause 58.1, if the Owners are required by law to make a tax deduction from any payment:

 

(a) the Owners shall notify the Charterers as soon as they become aware of the requirement; and

 

(b) the amount due in respect of the payment shall be increased by the amount necessary to ensure that the Owners receive and retain (free from any liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which they would otherwise have received.

 

58.3 The Charterers shall (within three (3) Business Days of demand by Owners) pay to the Owners an amount equal to any documented loss, liability or cost which the Owners (acting reasonably) determine will be or has been (directly or indirectly) suffered for or on account of tax by the Owners in respect of a Leasing Document.

 

58.4 Clause 58.3 shall not apply:

 

(a) with respect to any tax assessed on the Owners under the law of the jurisdiction in which the Owners are incorporated or, if different, the jurisdiction (or jurisdictions) in which the Owners are treated as resident for tax purposes if that tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by the Owners; or

 

(b) to the extent a loss, liability or cost is compensated for by an increased payment under Clause 58.2.

 

58.5 Notwithstanding any other provision to this Charter, if any deduction or withholding or other tax is or will be required to be made by the Charterers or the Owners in respect of a payment to the Owners as a result of the Owners being incorporated in a particular jurisdiction, the Owners shall have the right to transfer their interest in the Vessel (and this Charter) to any person nominated by the Owners and all costs in relation to such transfer shall be for the account of the Charterers.

 

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CLAUSE 59 – INCREASED COSTS

 

59.1 This 0 applies if the Owners notify the Charterers that they consider that as a result of:

 

(a) the introduction or alteration after the date of this Charter of a law or an alteration after the date of this Charter in the manner in which a law is interpreted or applied (disregarding any effect which relates to the application to payments under this Charter of a tax on the Owners’ overall net income); or

 

(b) complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Owners allocates capital resources to their obligations under this Charter) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Charter,

 

the Owners (or a parent company of them) has incurred or will incur an “increased cost”.

 

59.2 In this 0, “increased cost” means, in relation to the Owners:

 

(a) an additional or increased cost incurred as a result of, or in connection with, the Owners or the Owners’ parent company having entered into, or being a party to, this Charter, or funding the acquisition of the Vessel pursuant to the MOA or performing their obligations under this Charter (including as a result of, or in connection with, incorporating itself in a particular jurisdiction as requested by the Charterers or in order to fly a particular flag in respect of the Vessel);

 

(b) an additional or increased cost of funds relating to the financing the acquisition of the Vessel pursuant to the MOA; or

 

(c) a liability to make a payment or a return forgone, which is calculated by reference to any amounts received or receivable by the Owners under this Charter,

 

and for the purposes of this Clause, the Owners may in good faith allocate or spread costs and/or losses among their assets and liabilities (or any class of their assets and liabilities) on such basis as they consider appropriate.

 

59.3 Subject to the terms of Clause 59.1, the Charterers shall pay to the Owners, upon receipt of the Owners’ demand and any evidence thereto (where available to the Owners), the amounts which the Owners from time to time notify the Charterers to be necessary to compensate the Owners for the increased cost.

 

CLAUSE 60 – MISCELLANEOUS

 

60.1 Unless otherwise expressly stated to the contrary in this Charter, any payment which is due to be made on a day which is not a Business Day shall be made on the preceding Business Day instead.

 

60.2 If, at any time, any provision of any Leasing Document is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions under the law of that jurisdiction nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

 

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60.3 The Charterers waive any rights of sovereign immunity which they or any of their properties may enjoy in any jurisdiction and subjects itself to civil and commercial law with respect to their obligations under this Charter.

 

60.4 No term of this Charter is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Charter.

 

60.5 This Charter and each other Leasing Document 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 Charter or that Leasing Document, as the case may be.

 

CLAUSE 61 – FATCA

 

61.1 Defined terms

 

For the purposes of this 0, the following terms shall have the following meanings:

 

“Code” means the United States Internal Revenue Code of 1986, as amended.

 

“FATCA” means:

 

(a) sections 1471 to 1474 of the Code or any associated regulations;

 

(b) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or

 

(c) any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the IRS, the US government or any governmental or taxation authority in any other jurisdiction.

 

“FATCA Deduction” means a deduction or withholding from a payment under this Charter or the Leasing Documents required by or under FATCA.

 

“FATCA Exempt Party” means a Relevant Party that is entitled under FATCA to receive payments free from any FATCA Deduction.

 

“FATCA Non-Exempt Party” means any Relevant Party who is not a FATCA Exempt Party.

 

“IRS” means the United States Internal Revenue Service or any successor taxing authority or agency of the United States government.

 

“Relevant Party” means any of the parties to this Charter and the Leasing Documents.

 

61.2 FATCA Information

 

(a) Subject to paragraph (c) below, each Relevant Party shall, on the date of this Charter, and thereafter within ten (10) Business Days of a reasonable request by another Relevant Party:

 

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(i) confirm to that other party whether it is a FATCA Exempt Party or is not a FATCA Exempt Party; and

 

(ii) supply to the requesting party (with a copy to all other Relevant Parties) such other form or forms (including IRS Form W-8 or Form W-9 or any successor or substitute form, as applicable) and any other documentation and other information relating to its status under FATCA (including its applicable “pass thru percentage” or other information required under FATCA or other official guidance including intergovernmental agreements) as the requesting party reasonably requests for the purpose of the requesting party’s compliance with FATCA.

 

(b) If a Relevant Party confirms to any other Relevant Party that it is a FATCA Exempt Party or provides an IRS Form W-8 or W-9 to showing that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, or that the said form provided has ceased to be correct or valid, that party shall so notify all other Relevant Parties or provide the relevant revised form, as applicable, reasonably promptly.

 

(c) Nothing in this Clause shall oblige any Relevant Party to do anything which would or, in its reasonable opinion, might constitute a breach of any law or regulation, any policy of that party, any fiduciary duty or any duty of confidentiality, or to disclose any confidential information (including, without limitation, its tax returns and calculations); provided, however, that nothing in this paragraph shall excuse any Relevant Party from providing a true, complete and correct IRS Form W-8 or W-9 (or any successor or substitute form where applicable). Any information provided on such IRS Form W-8 or W-9 (or any successor or substitute forms) shall not be treated as confidential information of such party for purposes of this paragraph.

 

(d) If a Relevant Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with the provisions of this Charter or the provided information is insufficient under FATCA, then:

 

(i) if that party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such party shall be treated for the purposes of this Charter and the Leasing Documents as if it is a FATCA Non-Exempt Party; and

 

(ii) if that party failed to confirm its applicable passthru percentage then such party shall be treated for the purposes of this Charter and the Leasing Documents (and payments made thereunder) as if its applicable passthru percentage is 100%,

 

until (in each case) such time as the party in question provides sufficient confirmation, forms, documentation or other information to establish the relevant facts.

 

61.3 FATCA Deduction and gross-up by Relevant Party.

 

(a) If the representation made by the Charterers under 48.1(z) proves to be untrue or misleading such that the Charterers are required to make a FATCA Deduction, the Charterers shall make the FATCA Deduction and any payment required in connection with that FATCA Deduction within the time allowed and in the minimum amount required by FATCA.

 

(b) If the Charterers are required to make a FATCA Deduction then the Charterers shall increase the payment due from them to the Owners to an amount which (after making any FATCA Deduction) leaves an amount equal to the payment which would have been due if no FATCA Deduction had been required.

 

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(c) The Charterers shall promptly upon becoming aware that they must make a FATCA Deduction (or that there is any change in the rate or basis of a FATCA Deduction) notify the Owners accordingly. Within thirty (30) days of the Charterers making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, the Charterers shall deliver to the Owners evidence reasonably satisfactory to the Owners that the FATCA Deduction has been made or (as applicable) any appropriate payment paid to the relevant governmental or taxation authority.

 

61.4 FATCA Deduction by Owners.

 

The Owners may make any FATCA Deduction they are required by FATCA to make, and any payment required in connection with that FATCA Deduction, and the Owners shall not be required to increase any payment in respect of which they make such a FATCA Deduction or otherwise compensate the recipient for that FATCA Deduction.

 

61.5 FATCA Mitigation.

 

Notwithstanding any other provision to this Charter, if a FATCA Deduction is or will be required to be made by any party under Clause 61.4 in respect of a payment to the Owners as a result of the Owners not being a FATCA Exempt Party, the Owners shall have the right to transfer their interest in the Vessel (and this Charter) to any person nominated by the Owners and all costs in relation to such transfer shall be for the account of the Charterers.

 

CLAUSE 62 – ASSIGNMENT, TRANSFER AND REFINANCING

 

62.1 The Charterers shall not assign or transfer (whether by novation or otherwise) their rights and/or obligations under this Charter or any other Leasing Document without the prior written consent of the Owners.

 

62.2 The Charterers acknowledge that, at any time during the Charter Period:

 

(a) the Owners (at their own cost) are entitled to enter into certain funding arrangements with the Owners’ Financiers in order to refinance the Financing Amount (or part thereof), which funding arrangements may be secured, inter alia, by the relevant Financial Instruments;

 

(b) the Owners may do any of the following as security for the funding arrangements referred to in paragraph (a) above, in each case without consent of the Charterers (but after giving Charterers at least five (5) days prior written notice):

 

(i) execute a ship mortgage over the Vessel or any other Financial Instrument in favour of the Owners’ Financiers (provided that the Owners shall use reasonable endeavours to procure that the Owners’ Financiers enter into a quiet enjoyment letter on terms acceptable to the owners’ Financiers, Charterer and Owners);

 

(ii) assign their rights and interests to, in or in connection with this Charter and/or any other Leasing Document in favour of the Owners’ Financiers;

 

(iii) assign their rights and interests to, in or in connection with the Insurances, the Earnings and the Requisition Compensation of the Vessel in favour of the Owners’ Financiers; and

  

(iv) enter into any other document or arrangement which is necessary to give effect to such financing arrangements.

 

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62.3 The Charterers undertake to comply, and provide such information and documents reasonably required to enable the Owners to comply, with all such instructions or directions in regard to the employment, insurances, operation, repairs and maintenance of the Vessel as laid down in any Financial Instrument or as may be directed from time to time during the currency of this Charter by the Owners’ Financiers in conformity with any Financial Instrument provided always that the same are no more onerous than set out under the Leasing Documents. The Charterers further agree and acknowledge for themselves all relevant terms, conditions and provisions of each Financial Instrument (if any) and agree to acknowledge this in writing in any form that may be reasonably required by the Owners’ Financiers. The Charterers further agree to enter into any required acknowledgements of assignments and other customary documents as may be required in connection with the Financing Documents.

 

62.4 The Owners may procure a:

 

(a) change in the registered ownership of the Vessel; and/or

 

(b) assign or transfer by novation of any of its rights and obligations under any of the Leasing Documents (other than pursuant to Clause 62.2),

 

(any such event described in (a) and (b) above being a “Transfer”) to any affiliate or to another financial institution, trust, fund, leasing company or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in shipping loans, securities or other financial assets without the consent of the Charterers, provided that (other than in respect of a Transfer to an affiliate) the Owners shall give the Charterers at least 30 days prior written notice of their intention to effect a Transfer (a “Transfer Notice”). Within five (5) Business Days of the Owners serving a Transfer Notice on the Charterers, the Charterers may elect to serve a Purchase Option Notice on the Owners in accordance with Clause 55.2, following which the Charterers shall purchase the Vessel in accordance with the applicable terms of this Charter and the Owners shall not proceed with the relevant proposed Transfer (unless the Charterers fail to complete the purchase on the relevant Purchase Option Date in which case the Owners shall be free to effect such Transfer without reference to the Charterers and shall not be obliged to serve Transfer Notices for any future proposed Transfers). If the Charterers do not serve a Purchase Option Notice within the aforementioned five (5) Business Day period, then the Owners may proceed with the Transfer.

 

62.5 Any Transfer shall not in any manner whatsoever disturb or interfere with the Charterers’ lawful use, possession and quiet enjoyment of the Vessel during the Charter Period. The Charterers shall be liable to the applicable new owner of the Vessel for its performance of all obligations under this Charter (as novated) after any such Transfer and the Charterers shall procure that any party to a Leasing Document:

 

(i) becomes liable to the new of owner of the Vessel for its performance of all obligations pursuant to such Leasing Document; and

 

(ii) enters into all necessary documents or takes any necessary actions required for such Leasing Document and any Security Interest created thereunder remaining in full force and effect (or to be novated and/or re-executed) as from the completion of the relevant Transfer.

 

62.6 The Charterers agree and undertake to enter into any such usual documents and provide all necessary assistance as the Owners shall require to complete or perfect the any Transfer made pursuant to this 0 (Assignment, Transfer and Re-financing).

 

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CLAUSE 63 – CONFIDENTIALITY

 

The Parties agree to keep the terms and conditions of this Charter and any other Leasing Document (the “Confidential Information”) strictly confidential, provided that a Party may disclose Confidential Information in the following cases:

 

(a) it is already known to the public or becomes available to the public other than through the act or omission of the disclosing Party;

 

(b) it is required to be disclosed under the applicable laws of any Relevant Jurisdiction or by a governmental order, any stock exchange and/or securities and exchange commission laws and regulations including but not limited to the US SEC Rule or the Nasdaq Rules, decree, regulation or rule;

 

(c) in filings with a court or arbitral body in proceedings in which the Confidential Information is relevant and in discovery arising out of such proceedings;

 

(d) to any other party to a Leasing Document;

 

(e) to (or through) whom a Party assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Leasing Document (as permitted by the terms thereof);

 

(f) to any of the following persons (on a need to know basis):

 

(i) a shareholder or an Affiliate of either Party or a party referred to in paragraph (d);

 

(ii) its board of directors, employees, its shareholders, auditors, third party managers, external counsels or accountants;

 

(iii) professional advisers retained by a disclosing party;

 

(iv) any rating agencies;

 

(v) the Approved Classification Society;

 

(vi) the ship registry of the Flag State; and

 

(vii) in the case of the disclosing party being the Owners, persons advising on, providing or considering the provision of financing to the Owners or an Affiliate of the Owners,

 

provided that the disclosing party shall exercise due diligence to ensure that no such person shall disclose Confidential Information to any other party save for circumstances arising which are similar to those described under this Clause or such other circumstances as may be permitted by all Parties;

 

(g) to any person which is a classification society or other entity which the Owners or the Owners’ Financiers have engaged to make the calculations necessary to enable the Owners and/or the Owners’ Financiers to comply with their reporting obligations under the Poseidon Principles; or

 

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(h) with the prior written consent of all Parties and if required by any Party, subject to a corresponding confidentiality undertaking obtained from the party to whom the Confidential Information is disclosed to.

 

CLAUSE 64 – GENERAL APPLICATION OF PROCEEDS

 

64.1 Any Net Trading Proceeds, Net Sales Proceeds, Total Loss Proceeds, any proceeds realised by the Owners in connection with the enforcement of the Security Documents (unless otherwise specified in the Security Documents) and any proceeds received by the Owners from the Other Owner (as trustee for the Owners) shall be applied in the following order of application against amounts payable under the Leasing Documents:

 

(a) firstly, in or towards any amounts outstanding under the Leasing Documents other than the Termination Sum (including but not limited to any costs and expenses incurred in the enforcement of the Security Documents, to the extent these are not covered under the Termination Sum);

 

(b) secondly, in or towards satisfaction of the Charterers’ obligation to pay the Termination Sum (or such portion of it that then remains unpaid) in any order of application in the amounts comprising the Termination Sum as the Owners may determine; and

 

(c) thirdly, upon satisfaction in full of all amounts payable to the Owners under the Leasing Documents, in payment of any surplus to the Charterers, but subject always to the terms of the General Assignment.

 

CLAUSE 65 – GOVERNING LAW AND ENFORCEMENT

 

65.1 This Charter, and any non-contractual obligations arising out of or in connection with it, shall be governed by English law.

 

65.2 Any dispute arising out of or in connection with any Leasing Document (including a dispute regarding the existence, validity or termination of any Leasing Document or any non-contractual obligation arising out of or in connection with any Leasing Document) (a “Dispute”) shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.

 

65.3 The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced. The reference shall be to three (3) arbitrators. A Party wishing to refer the Dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other Party requiring the other Party to appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other Party appoints its own arbitrator and give notice that it has done so within the fourteen (14) days specified. If the other Party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the Party referring a Dispute to arbitration may, without the requirement of any further prior notice to the other Party, appoint its arbitrator as sole arbitrator and shall advise the other Party accordingly. The award of a sole arbitrator shall be binding on both Parties as if he had been appointed by agreement. Nothing herein shall prevent the Parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.

 

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65.4 In cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 (or such other sum as the Parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.

 

CLAUSE 66 – DEFINITIONS

 

66.1 In this Charter the following terms shall have the meanings ascribed to them below:

 

“Acceptance Certificate” means a certificate substantially in the form set out in Schedule 1 (Acceptance Certificate) to be signed by the Charterers at Delivery.

 

“Account Bank” means Alpha Bank S.A. or such other bank approved by the Owners.

 

“Account Charge” means the document creating charge(s) over the Operating Account executed or to be executed by the Charterers in favour of the Owners.

 

“Amendment and Restatement Deed” means the amendment and restatement deed dated 25 September 2023 and made among the Owners, the Charterers and the Guarantor in respect of this Charter.

 

“Advance Charterhire” has the meaning as defined under Clause 36.2 of the Charter.

 

“Affiliate” means in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.

 

“Annex VI” means Annex VI of the Protocol of 1997 to amend the International Convention for the Prevention of Pollution from Ships 1973 (Marpol), as modified by the Protocol of 1978 relating thereto.

 

“Anti-Bribery and Anti-Corruption Laws” means the US Foreign Corrupt Practices Act of 1977 as amended and the rules and regulations thereunder, the UK Bribery Act of 2010, and/or any similar laws, rules or regulations issued, administered or enforced by the United States, United Kingdom, the European Union or any of its member states, or any other country or governmental agency having jurisdiction over the Owners or any Obligors or their respective subsidiaries.

 

“Anti-Money Laundering Laws” means all applicable financial record-keeping and reporting requirements, anti-money laundering statutes (including all applicable rules and regulations thereunder) and all applicable related or similar laws, rules, regulations or guidelines, of all jurisdictions including and without limitation, the United States of America, the United Kingdom, Hong Kong and the People’s Republic of China and which in each case are:

 

(a) issued, administered or enforced by any governmental agency having jurisdiction over the Charterers or any other Obligors or their respective subsidiaries;

 

(b) of any jurisdiction in which the Charterers or any other Obligor conducts business; or

 

(c) to which the Charterers or any other Obligor is subjected or subject to.

 

“Approved Classification Society” means Bureau Veritas, Lloyds’ Register or any other classification society which is a member of the International Association of Classification Societies and approved by the Owners in writing. 

 

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“Approved Commercial Manager” means Fidelity Marine Inc., Seanergy Management Corp. or any other reputable ship management company as may be approved by the Owners in writing prior to its appointment as commercial manager of the Vessel.

 

“Approved Manager” means the Approved Commercial Manager or the Approved Technical Manager.

 

“Assignable Sub-charter” means any charter or any other form of employment contract relating to the Vessel, whether or not already in existence with a duration exceeding or capable of exceeding 12 months (inclusive of options to renew).

 

“Approved Technical Manager” means V Ships Limited (a Cyprus entity), V Ships Greece, Seanergy Shipmanagement Corp. or any other reputable ship management company as may be approved by the Owners in writing prior to its appointment as technical manager of the Vessel (such approval from the Owners not to be required for the appointment of an entity controlled by the Guarantor).

 

“Approved Valuer” means Simpson Spence Young, Clarksons Platou, Maersk Broker, Arrow Shipbrokers, Howe Robinson, Braemar ACM Shipbroking, Barry Rogliano Salles or such other independent and reputable shipbroker nominated by the Charterers and approved by the Owners.

 

“Arrangement Fee” has the meaning as defined under Clause 44.1.

 

“Breakfunding Costs” means all breakfunding costs and expenses (excluding the margin) incurred or payable by the Owners when a repayment or prepayment under the relevant funding arrangement entered into by the Owners for the purpose of financing the Purchase Price (or any part thereof) does not fall on a Payment Date, a Purchase Option Date or a date specified by the Owners in any Termination Notice.

 

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for business in the principal business centres of Shanghai, Singapore and Athens and/or:

 

(a) in respect of a day on which a payment is required to be made or other dealing is due to take place under this Charter in Dollars, a day on which banks are open in New York City; and

 

(b) in respect of the fixing of an interest rate in relation to the Owners’ Costs, a day which is a US Government Securities Business Day.

 

“Cancelling Date” has the meaning given to such term under the MOA.

 

“Change of Control” means:

 

(a) the Guarantor ceases to own and/or control directly or indirectly, all of the shares and voting rights in the Charterers; and/or

 

(b) the Guarantor ceases to be listed on Nasdaq.

 

“Charter Period” means the period described in Clause 32.1 unless it is terminated earlier in accordance with the provisions of this Charter. 

 

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“Charterhire” means each of, as the context may require, all of the instalments of hire payable hereunder on each applicable Payment Date comprising in each case both Fixed Charterhire and Variable Charterhire, as further detailed in 0.

 

“Commencement Date” means the date on which Delivery takes place.

 

“Compliance Certificate” means a certificate substantially in the form set out in Schedule 3.


“Credit Adjustment Spread” means zero point two two per cent. (0.22%) per annum.

 

“Delivery” means the physical and legal delivery of the Vessel from the Owners to the Charterers pursuant to the terms of this Charter.

 

“Dollars” and “US$” mean the lawful currency for the time being of the United States of America.

 

“Earnings” means all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Charterers and which arise out of the use or operation of the Vessel, including (but not limited to):

 

(a) all freight, hire and passage moneys;

 

(b) any compensation payable in the event of requisition of the Vessel for hire;

 

(c) any remuneration for salvage and towage services;

 

(d) any demurrage and detention moneys;

 

(e) damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Vessel;

 

(f) all moneys which are at any time payable to the Charterers in relation to general average contribution; and

 

(g) if and whenever the Vessel is employed on terms whereby any moneys falling within paragraphs (a) to (f) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to the Vessel.

 

“Environmental Claim” means any claim by any governmental, judicial or regulatory authority or any other person which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law and, for this purpose, “claim” includes a claim for damages, compensation, contribution, injury, fines, losses and penalties or any other payment of any kind, including in relation to clean-up and removal, whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset.

 

“Environmental Incident” means:

 

(a) any release, emission, spill or discharge of Environmentally Sensitive Material whether within the Vessel or from the Vessel into any other vessel or into or upon the air, water, land or soils (including the seabed) or surface water; or

 

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(b) any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, water, land or soils (including the seabed) or surface water from a vessel other than the Vessel and which involves a collision between the Vessel and such other vessel or some other incident of navigation or operation, in either case, in connection with which the Vessel is actually or potentially liable to be arrested, attached, detained or injuncted and/or the Vessel and/or any Obligors and/or any operator or manager of the Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or

 

(c) any other incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, water, land or soils (including the seabed) or surface water otherwise than from the Vessel and in connection with which the Vessel is actually or potentially liable to be arrested and/or where any Obligors and/or any operator or manager of the Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action.

 

“Environmental Law” means any present or future law relating to pollution or protection of human health or the environment, to conditions in the workplace, to the carriage, generation, handling, storage, use, release or spillage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material.

 

“Environmentally Sensitive Material” means and includes all contaminants, oil, oil products, toxic substances and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous.

 

“Expiry Owners’ Costs” means an amount equal to US$8,700,000.

 

“Fair Market Value” means the value of the Vessel determined as follows:

 

(a) subject to sub-paragraph (b) below, the arithmetic mean of the valuations shown by two (2) valuation reports prepared:

 

(i) on a date no earlier than fifteen (15) days prior to the relevant date of valuation (except in the case of the Initial Market Value, in which cash such valuation reports shall be prepared on a date no earlier than fifteen (15) days prior to the Commencement Date);

 

(ii) by Approved Valuers one nominated by the Owners and the other nominated by the Charterers;

 

(iii) without physical inspection of the Vessel or other vessel; and

 

(iv) on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms as between a willing seller and a willing buyer, without taking into account any charter whatsoever; and

 

(b) if there is a discrepancy of five per cent. (5%) or more between the market valuations shown on the two valuation reports obtained pursuant to paragraph (a) above (using the lower valuation figure as the denominator), the arithmetic mean of the valuations shown by three (3) valuation reports each prepared on the same terms and conditions as set out under paragraph (a) above (except that the third valuation report additionally required under this sub-paragraph (b) shall be prepared by an Approved Valuer nominated by the Owners).

 

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“Fee Letter” means the fee letter referred to under Clause 44.1 for payment of the Arrangement Fee.

 

“Financial Indebtedness” means, in relation to a person (the “debtor”), a liability of the debtor:

 

(a) for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;

 

(b) under any loan stock, bond, note or other security issued by the debtor;

 

(c) under any acceptance credit, guarantee or letter of credit facility made available to the debtor;

 

(d) under a financial lease, a deferred purchase consideration arrangement (other than deferred payments for assets or services obtained on normal commercial terms in the ordinary course of business) or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;

 

(e) under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or

 

(f) under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs (a) to (e) if the references to the debtor referred to the other person.

 

“Financial Instruments” means the applicable loan or facility agreement entered into between the Owners (or their affiliate) and the Owners’ Financiers and any mortgage, deed of covenants, assignment in respect of this Charter, assignment in respect of the Guarantees, assignment in respect of Earnings, Insurances and Requisition Compensation, manager’s undertaking and subordination (including assignment of manager’s interests in the Insurances) or any other financial security instruments granted by the Owners to the Owners’ Financiers as security for the financing or refinancing of the Owners’ acquisition of the Vessel.

 

“Financing Amount” shall have the same meaning as defined under the MOA.


“First Payment Date” shall have the meaning as defined under 36.5(a).

 

“Fixed Charterhire” shall have the meaning as defined under Clause 36.4(a).

 

“Flag State” means the flag state named in Box 5 of this Charter or any other state or jurisdiction approved in writing by the Owners.

 

“Fleet Vessel” means any ship or vessel (including, but not limited to, the Vessel and the Other Vessel) from time to time wholly leased, hired, chartered or financed under any lease, hire purchase agreement, charter or any other financing arrangement by affiliates of the Owners and/or the Other Owner to subsidiaries or affiliates of the Guarantor. 

 

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“Funding Rate” means any individual rate certified by the Owners to the Charterers pursuant to Clause 37.3(c)(ii).

 

“GAAP” means generally accepted accounting principles in the United States of America or such other accounting principles as agreed by both Parties.

 

“General Assignment” means the assignment agreement executed or to be executed between the Charterers and the Owners in respect of the Vessel, pursuant to which the Charterers shall, inter alia, assign its rights under:

 

(a) the Earnings, Insurances, Requisition Compensation in respect of the Vessel; and

 

(b) any Assignable Sub-charter,

 

in favour of the Owners.

 

“Group” means the Guarantor and its Subsidiaries (whether directly or indirectly owned) for the time being.

 

“Guarantee” means the guarantee executed by the Guarantor in favour of the Owners on or about the date hereof.

 

“Guarantor” means Seanergy Maritime Holdings Corp., a corporation incorporated and existing under the laws of the Republic of Marshall Islands.

 

“Hire Period” means (i) in the case of the first Hire Period, the period commencing on the Commencement Date and ending on the First Payment Date; and (ii) in the case of each subsequent Payment Date, the period of commencing on the last day of the preceding Hire Period and ending on the next occurring Payment Date.

 

“Historic Term SOFR” means, in relation to any Hire Period, the most recent applicable Term SOFR for a period equal in length to that Hire Period and which is as of a day which is no more than three (3) US Government Securities Business Days before the Quotation Day.

 

“Holding Company” means, in relation to a person, any other person in relation to which (i) it is a Subsidiary or (ii) it is a Subsidiary of a Subsidiary.

 

“IAPPC” means a valid international air pollution prevention certificate for the Vessel issued pursuant to the MARPOL Protocol.

 

“Initial Market Value” means, in relation to the Vessel, the Fair Market Value of the Vessel as at a date no earlier than fifteen (15) days prior to the Commencement Date.

 

“Insurances” means:

 

(a) all policies and contracts of insurance, including entries of the Vessel in any protection and indemnity or war risks association, which are effected in respect of the Vessel or otherwise in relation to it whether before, on or after the date of this Charter; and

 

(b) all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium and any rights in respect of any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Charter.

 

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“Interpolated Historic Term SOFR” means, in relation to any Hire Period, the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:

 

(a) either:

 

(i) the most recent applicable Term SOFR (as of a day which is not more than three (3) US Government Securities Business Days before the Quotation Day for the longest period (for which Term SOFR is available) which is less than that Hire Period; or

 

(ii) if no such Term SOFR is available for a period which is less than that Hire Period, SOFR for a day which is no more than five (5) US Government Securities Business Days (and no less than two (2) US Government Securities Business Days) before the Quotation Day; and

 

(b) the most recent applicable Term SOFR (as of a day which is not more than three (3) US Government Securities Business Days before the Quotation Day) for the shortest period (for which Term SOFR is available) which exceeds that Hire Period.

 

“Interpolated Term SOFR” means, in relation to any Hire Period, the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:

 

(a) either:

 

(i) the applicable Term SOFR (as of the Quotation Day in respect of that Hire Period) for the longest period (for which Term SOFR is available) which is less than that Hire Period; or

 

(ii) if no such Term SOFR is available for a period which is less than that Hire Period, SOFR for the day which is two (2) US Government Securities Business Days before the Quotation Day; and

 

(b) the applicable Term SOFR (as of the Quotation Day in respect of that Hire Period) for the shortest period (for which Term SOFR is available) which exceeds that Hire Period.

 

“Interest Rate” means, in relation to each Hire Period and subject to Clause 37.3, the percentage rate of interest per annum equal to the aggregate of (i) the applicable Reference Rate for the relevant Hire Period, (ii) the Margin and (iii) the Credit Adjustment Spread.

 

“ISM Code” means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organisation Assembly as Resolutions A.741 (18) and A.788 (19), as the same may be amended or supplemented from time to time (and the terms “safety management system”, “Safety Management Certificate” and “Document of Compliance” have the same meanings as are given to them in the ISM Code).

 

“ISPS Code” means the International Ship and Port Security Code as adopted by the Conference of Contracting Governments to the Safety of Life at Sea Convention 1974 on 13 December 2002 and incorporated as Chapter XI-2 of the Safety of Life at Sea Convention 1974, as the same may be supplemented or amended from time to time. 

 

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“ISSC” means a valid international ship security certificate for the Vessel issued pursuant to the ISPS Code.

 

“Leasing Documents” means this Charter, the Amendment and Restatement Deed, the Guarantees, the MOA, the Fee Letter and the Security Documents and each, as the context may require, the “Leasing Document”.

 

“Major Casualty” means any casualty to the Vessel in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds US$1,000,000 or the equivalent in any other currency.

 

“Management Agreement” means:

 

(a) the technical management agreement dated 22 April 2021 and made between V Ships Limited and the Charterers;

 

(b) the commercial management agreement dated 2 March 2015 and made between Fidelity Marine Inc. and Seanergy Management Corp. as amended by a first amendment dated 11 September 2015, a second amendment dated 24 February 2016, a third amendment dated 1 February 2018, a fourth amendment dated 28 June 2018 and as further amended from time to time), as acceded to by the Charterers pursuant to an accession letter dated 27 April 2021; and/or

 

(c) such other management agreement for the technical and/or commercial management of the Vessel as may be subsequently entered into in respect of the Vessel by the Charterers with an Approved Manager.

 

“Manager’s Undertaking” means, in relation to an Approved Manager, a letter of undertaking to be executed by that Approved Manager in favour of the Owners subordinating the rights of that Approved Manager against the Vessel and the Charterers to the rights of the Owners.

 

“Margin” means three point fifty per cent. (3.50%) per annum.

 

“Market Disruption Rate” means the percentage rate per annum which is the aggregate of the Reference Rate and the Credit Adjustment Spread.

 

“MARPOL Protocol” means Annex VI (Regulations for the Prevention of Air Pollution from Ships) to the International Convention for the Prevention of Pollution from Ships 1973 (as amended in 1978 and 1997).

 

“Material Adverse Effect” means, in the reasonable opinion of the Owners, a material adverse effect on:

 

(a) the business, operations, property, condition (financial or otherwise) of any Obligor or any member of the Group; or

 

(b) the ability of any Obligor to perform its obligations under any Leasing Document to which it is a party; or

 

(c) the validity or enforceability of, or the effectiveness or ranking of any Security Interests granted pursuant to, any of the Leasing Documents or the rights or remedies of the Owners under any of the Leasing Documents.

 

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“MOA” means the memorandum of agreement dated on or about the date of this Charter and made between the Owners (in their capacity as buyers) and the Charterers (in their capacity as sellers), pursuant to which the Charterers agree to sell and the Owners agree to purchase the Vessel upon the terms and conditions set out therein.

 

“Net Sales Proceeds” has the meaning given to it under Clause 42.1(c).

 

“Net Trading Proceeds” has the meaning given to it under Clause 42.1(b).

 

“Nominated Purchaser” has the meaning given to it under Clause 42.1(c).

 

“Nomination Period” has the meaning given to it under Clause 42.1(c).

 

“Obligatory Insurances” means any insurances of the Vessel required to be effected by or on behalf of the Charterers pursuant to 0.

 

“Obligors” means:

 

(a) the Charterers;

 

(b) the Guarantor;

 

(c) any Approved Manager which is an entity within the Group;

 

(d) any sub-charterer of the Vessel which is an entity within the Group; and

 

(e) any other party providing security for the Charterers’ obligations under this Charter pursuant to a Security Document or otherwise (except any Approved Manager or sub-charterer which are not entities within the Group).

 

“Operating Account” means an interest bearing account with account number 960- 01- 5006034452 opened in the name of the Charterers with the Account Bank.

 

“Original Financial Statements” means in relation to the Guarantor, its audited consolidated financial statements for the fiscal year ended 31 December 2020.

 

“Original Jurisdiction” means, in relation to an Obligor, the jurisdiction under whose laws they are incorporated as at the date of this Charter.

 

“Other Charter” means, in relation to the Other Vessel, the bareboat charterparty dated on or around the date of this Charter entered into between the Other Owner and the Other Charterer.

 

“Other Charterer” means Patriot Shipping Co.

 

“Other Owner” means Sea 242 Leasing Co. Limited.

 

“Other Vessel” means m.v. Patriotship.

 

“Owners’ Costs” means, on any relevant date, (i) the Financing Amount minus (ii) the aggregate Fixed Charterhire which has been paid by the Charterers and received by the Owners as at such date. 

 

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“Owners’ Financier” means any financier providing financing or refinancing facilities to the Owners or any affiliate of the Owners in respect of the Owners’ purchase and/or lease of the Vessel to the Charterers under the terms of the Leasing Documents.

 

“Owners’ Surveyor” means the surveyor appointed by the Owners in accordance with Clause 7.

 

“Party” means a party to this Charter, namely the Owners or the Charterers.

 

“Payment Date” shall have the meaning as defined under Clause 36.5.

 

“Permitted Security Interest” means:

 

(a) any Security Interest created by a Security Document or a Financial Instrument;

 

(b) any lien for unpaid master’s and crew’s wages in accordance with the ordinary course of operation of the Vessel or in accordance with usual reputable maritime practice;

 

(c) any lien for salvage;

 

(d) any lien for master’s disbursements incurred in the ordinary course of trading;

 

(e) any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of the Vessel provided such liens do not secure amounts more than thirty (30) days overdue;

 

(f) any Security Interest created in favour of a plaintiff or defendant in any action of the court or tribunal before whom such action is brought as security for costs and expenses where the Owners are prosecuting or defending such action in good faith by appropriate steps; and

 

(g) Security Interests arising by operation of law in respect of taxes which are not overdue or for payment of taxes which are overdue for payment but which are being contested by the Owners or the Charterers in good faith by appropriate steps and in respect of which adequate reserves have been made,

 

provided that the foregoing have not arisen due to the default or omission of any Obligor.

 

“Poseidon Principles” means the financial industry framework for assessing and disclosing the climate alignment of ship finance portfolios published in June 2019 as the same may be amended or replaced to reflect changes in applicable law or regulation or the introduction of or changes to mandatory requirements of the International Maritime Organisation from time to time.

 

“Potential Termination Event” means, an event or circumstance specified in 0 (Termination Event) which would with the giving of any notice, the lapse of time, and/or a determination of the Owners, constitute a Termination Event.

 

“Prepositioning Date” shall have the same meaning as defined under the MOA.

 

“Prohibited Countries” means those countries and territories subject to country-wide or territory-wide Sanctions and/or trade embargoes from time to time during the Charter Period, in particular but not limited to pursuant to the U.S.’s Office of Foreign Assets Control of the U.S. Department of Treasury (“OFAC”) or the United Nations.

 

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 “Prohibited Person” means any person, entity or any other party which is (i) located, domiciled, resident or incorporated in a Prohibited Country, and/or (ii) subject to any sanction administrated by the United Nations, the European Union, the United States and the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the United Kingdom, His Majesty’s Treasury (“HMT”) and the Foreign and Commonwealth Office of the United Kingdom, the Special Administrative Region of Hong Kong, the People’s Republic of China and/or (iii) owned or controlled by or affiliated with persons, entities or any other parties as referred to in (i) and (ii).

 

“Published Rate” means SOFR or Term SOFR for any Quoted Tenor.

 

“Published Rate Replacement Event” means, in relation to any Published Rate:

 

(a) the methodology, formula or other means of determining that Published Rate has, in the opinion of the Owners, materially changed;

 

(b) ​

 

(i)

 

(A) the administrator of that Published Rate or its supervisor publicly announces that such administrator is insolvent; or

 

(B) information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Published Rate is insolvent,

 

provided that, in each case, at that time, there is no successor administrator to continue to provide that Published Rate;

 

(ii) the administrator of that Published Rate publicly announces that it has ceased or will cease, to provide that Published Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide that Published Rate;

 

(iii) the supervisor of the administrator of that Published Rate publicly announces that such Published Rate has been or will be permanently or indefinitely discontinued; or

 

(iv) the administrator of that Published Rate or its supervisor announces that that Published Rate may no longer be used; or

 

(c) the administrator of that Published Rate (or the administrator of an interest rate which is a constituent element of that Published Rate) determines that that Published Rate should be calculated in accordance with its reduced submissions or other contingency or fallback policies or arrangements and either:

 

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(i) the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Owners and the Charterers) temporary; or

 

(ii) that Published Rate is calculated in accordance with any such policy or arrangement for a period no less than a reasonable period determined by the Owners; or

 

(d) in the opinion of the Owners, that Published Rate is otherwise no longer appropriate for the purposes of calculating interest under this Charter.

 

“Purchase Option” means the purchase option referred to in Clause 55.1.

 

“Purchase Option Date” shall have the meaning ascribed thereto in Clause 55.2.

 

“Purchase Option Fee” means:

 

(a) if the Purchase Option is exercised on the second (2nd) anniversary of the Commencement Date (or prior to it but only in accordance with Clause 62.4), two point five per cent. (2.50%) of the Owners’ Costs on that date;

 

(b) if the Purchase Option is exercised on the third (3rd) anniversary of the Commencement Date, one point five per cent. (1.50%) of the Owners’ Costs on that date; and

 

(c) if the Purchase Option is exercised on the fourth (4th) or fifth (5th) anniversary of the Commencement Date, zero per cent. (0%) of the Owners’ Costs on that date.

 

“Purchase Option Notice” shall have the meaning ascribed thereto in Clause 55.2.

 

“Purchase Option Price” means, in respect of any Purchase Option Date:

 

(a) if the Purchase Option Date falls prior to the last day of the Charter Period, the aggregate of:

 

(i) the Owners’ Costs prevailing as at the relevant Purchase Option Date;

 

(ii) any Variable Charterhire accrued but unpaid as at the date of payment of the Purchase Option Price;

 

(iii) any Purchase Option Fee;

 

(iv) any Breakfunding Costs;

 

(v) any reasonable and documented legal or other costs incurred by the Owners in connection with the exercise of the Purchase Option under 0 (Purchase Option); and

 

(vi) aside from the amounts described under paragraphs (i) to (v) above, any other moneys due and owing under the Leasing Documents at the relevant Purchase Option Date;

 

(b) if the Purchase Option Date falls on the last day of the Charter Period, the aggregate of:

 

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(i) the Expiry Owners’ Costs;

 

(ii) any Charterhire accrued but unpaid as at the date of payment of the Purchase Option Price;

 

(iii) any reasonable and documented legal or other costs incurred by the Owners in connection with the exercise of the Purchase Option under 0 (Purchase Option); and

 

(iv) aside from the amounts described under paragraphs (i) to (iii) above, any other moneys due and owing under the Leasing Documents at the relevant Purchase Option Date.

 

“Purchase Price” has the meaning given to it in the MOA.

 

“Quotation Day” means, in relation to any Hire Period, two (2) US Government Securities Business Days before the first day of that Hire Period unless market practice differs in the relevant syndicated loan market in which case the Quotation Day will be determined by the Owners in accordance with that market practice (and if quotations would normally be given on more than one day, the Quotation Day will be the last of those days).

 

“Quoted Tenor” means, in relation to Term SOFR, any period for which that rate is customarily displayed on the relevant page or screen of an information service.

 

“Reference Rate” means, in relation to a Hire Period:

 

(a) the applicable Term SOFR as of the relevant Quotation Day and for a period equal in length to the relevant Hire Period; or

 

(b) as otherwise determined pursuant to Clause 36.4A or Clause 37,

 

and if, in either case, that rate is less than zero, the Reference Rate shall be deemed to be zero.

 

“Relevant Jurisdiction” means, in relation to an Obligor:

 

(a) its Original Jurisdiction;

 

(b) any jurisdiction where any property owned by it and charged under a Leasing Document is situated;

 

(c) any jurisdiction where it conducts its business; or

 

(d) any jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it creating a Security Interest.

 

“Relevant Nominating Body” means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.

 

“Replacement Reference Rate” means a reference rate which is:

 

(a) formally designated, nominated or recommended as the replacement for a Published Rate by:

 

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(i) the administrator of that Published Rate; or

 

(ii) any Relevant Nominating Body,

 

and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the “Replacement Reference Rate” will be the replacement under paragraph (ii) above;

 

(b) in the opinion of the Owners, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor or alternative to a Published Rate; or

 

(c) in the opinion of the Owners, an appropriate successor or alternative to a Published Rate.

 

“Reporting Time” means close of business in Shanghai on the date falling one (1) Business Day after the Quotation Day for the relevant Hire Period.

 

“Requisition Compensation” includes all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (a) of the definition of “Total Loss”.

 

“Sanctions” means any sanctions, embargoes, freezing provisions, prohibitions or other restrictions relating to trading, doing business, investment, exporting, financing or making assets available (or other activities similar to or connected with any of the foregoing):

 

(a) imposed by law or regulation of the United Kingdom, the Council of the European Union, the United Nations or its Security Council, the People’s Republic of China, the Special Administrative Region of Hong Kong or the United States of America regardless of whether the same is or is not applicable or binding on any Obligor; or

 

(b) otherwise imposed by any law or regulation which are applicable to and/or binding on any Obligor (which shall include without limitation, any extra-territorial sanctions imposed by law or regulation of the United States of America).

 

“Sanctions Advisory” means the Sanctions Advisory for the Maritime Industry, Energy and Metals Sectors, and Related Communities issued May 14, 2020 by the US Department of the Treasury, Department of State and Coast Guard, as may be amended or supplemented, and any similar future advisory.

 

“Security Documents” means:

 

(a) the Account Charge;

 

(b) the General Assignment;

 

(c) the Shares Pledge;

 

(d) each Manager’s Undertaking; and

 

(e) any other security document conferring any Security Interest in respect of the obligations of the Charterers under or in connection with this Charter.

 

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“Security Interest” means:  


(a) a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;

 

(b) the security rights of a plaintiff under an action in rem; or

 

(c) any other right which confers on a creditor or potential creditor a right or privilege to receive the amount actually or contingently due to it ahead of the general unsecured creditors of the debtor concerned; however this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution.

 

“Shares Pledge” means a first priority pledge over the shares of the Charterers executed or to be executed by the Guarantor in favour of the Owners.

 

“SOFR” means the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York (or any other person which takes over the administration of that rate) published (before any correction, recalculation or republication by the administrator) by the Federal Reserve Bank of New York (or any other person which takes over the publication of that rate).

 

“Statement of Compliance” means a Statement of Compliance related to fuel oil consumption pursuant to regulations 6.6 and 6.7 of Annex VI.

 

“Subsidiary” means a subsidiary within the meaning of section 1159 of the UK Companies Act 2006.

 

“Term SOFR” means the term SOFR reference rate administered by CME Group Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant period published (before any correction, recalculation or republication by the administrator) by CME Group Benchmark Administration Limited (or any other person which takes over the publication of that rate).

 

“Termination Date” has the meaning given to it under Clause 47.2.

 

“Termination Event” means any event described in 0 (Termination Events).

 

“Termination Fee” means two per cent. (2.00%) of the Owners’ Costs as at the relevant date.

 

“Termination Notice” has the meaning given to it under Clause 47.2.

 

“Termination Sum” means, in respect of any date (such date being referred to as the “Relevant Date” for the purposes of this definition only), the aggregate of (without double counting amounts that may be included in more than one sub-paragraph below):

 

(a) the Owners’ Costs prevailing as at the Relevant Date;

 

(b) any Variable Charterhire accrued and unpaid as at the date of payment of the Termination Sum;

 

(c) the Termination Fee (other than in connection with a payment of the Termination Sum following a Total Loss);

 

(d) any Breakfunding Costs;

 

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(e) any and all evidenced and documented direct costs, losses and liabilities incurred by the Owners as a result of the early termination of the leasing under this Charter including but not limited to any legal costs, any agency or broker fees incurred in attempting to re-charter or otherwise dispose of the Vessel;

 

(f) any and all documented costs, losses and liabilities incurred by the Owners in locating, repossessing, recovering, repositioning, berthing, insuring and maintaining the Vessel and/or in collecting any payments due under this Charter and/or in obtaining the due performance of the obligations of the Charterers under this Charter or the other Leasing Documents; and

 

(g) aside from the amounts described under paragraphs (a) to (f) above, any other moneys due and owing under the Leasing Documents at the Relevant Date including any default interest on amounts under (a) to (f) above.

 

“Total Loss” means:

 

(a) any expropriation, confiscation, requisition (other than a requisition for hire) or acquisition of the Vessel, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority;

 

(b) any requisition for hire, arrest, condemnation, capture, seizure or detention of the Vessel (including any hijacking or theft but excluding any event specified in paragraph (a)  of this definition) unless it is redelivered within sixty (60) days to the full control of the Owners or the Charterers; or

  

(c) actual, constructive, compromised, agreed or arranged total loss of the Vessel.

 

“Total Loss Date” means, in relation to the Total Loss of the Vessel:

 

(a) in the case of a Total Loss occurring under paragraph (a) of the definition of Total Loss, on the date on which the expropriation, confiscation, requisition or, as the case may be, the acquisition of the Vessel is completed by delivery of the Vessel to the relevant government or official authority or the person or persons claiming to be or to represent the relevant government or official authority;

 

(b) in the case of a Total Loss occurring under paragraph (b) of the definition of Total Loss, the date falling on the expiration of such sixty (60) day period;

 

(c) in the case of an actual loss of the Vessel, the date on which it occurred; and

 

(d) in the case of a constructive, compromised, agreed or arranged total loss of the Vessel, the earliest of:

 

(i) the date when the Vessel was last heard of;

 

(ii) the date on which a notice of abandonment is given to the insurers; and

 

(iii) the date of any compromise, arrangement or agreement made by or on behalf of the Charterers with the insurers in which the insurers agree to treat the Vessel as a Total Loss.

 

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“Total Loss Payment Date” means, following the occurrence of a Total Loss, the earlier of:

 

(a) the date falling one hundred and fifty (150) days after the Total Loss Date or such later date as the Owners may agree; and

 

(b) the date on which the Owners receive the Total Loss Proceeds.

 

“Total Loss Proceeds” means the proceeds of any policy or contract of insurance or any Requisition Compensation in each case arising in respect of a Total Loss.

 

“Transfer” has the meaning given to it under Clause 62.4.

 

“Transfer Notice” has the meaning given to it under Clause 62.4.

 

“Treasury Transaction” means any derivative transaction entered into in connection with protection against or benefit from any fluctuation in price or rate.

 

“US” means the United States of America.

 

“US Government Securities Business Day” means any day other than:

 

(a) a Saturday or a Sunday; and

 

(b) a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in US Government securities.

 

“US Tax Obligor” means:

 

(a) a person which is resident for tax purposes in the US; or

 

(b) a person some or all of whose payments under the Leasing Documents are from sources within the US for US federal income tax purposes.

 

“Variable Charterhire” shall have the meaning as defined under Clause 36.4(b).

 

“Vessel” means the bulker vessel named m.v. Hellasship and registered or to be registered under the name of the Owners under the Flag State upon Delivery.

 

66.2 In this Charter:

 

“agreed form” means, in relation to a document, such document in a form agreed in writing between the Owners and the Charterers;

 

“asset” includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;

 

“company” includes any partnership, joint venture and unincorporated association;

 

“consent” includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation; 

 

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“contingent liability” means a liability which is not certain to arise and/or the amount of which remains unascertained;

 

“control” over a particular company means the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:

 

(a) cast, or control the casting of, fifty one per cent. (51%) or more of the maximum number of votes that might be cast at a general meeting of such company; or

 

(b) appoint or remove all, or the majority, of the directors or other equivalent officers of such company; or

 

(c) give directions with respect to the operating and financial policies of such company with which the directors or other equivalent officers of such company are obliged to comply;

 

the Owners’ “cost of funds” in relation to the Owners’ Costs or any part thereof is a reference to the average cost (determined either on an actual or a notional basis) which the Owners would incur if they were to fund or finance, from whatever source(s) they may reasonably select, an amount equal to the amount of the Owners’ Costs or any part thereof for a period equal in length to the Hire Period of the Owners’ Costs or any part thereof;

 

“document” includes a deed; also a letter or fax or email;

 

“expense” means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax;

 

“law” includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;

 

“legal or administrative action” means any legal proceeding or arbitration and any administrative or regulatory action or investigation;

 

“liability” includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;

 

“months” shall be construed in accordance with Clause 66.3;

 

“person” includes any company; any state, political sub-division of a state and local or municipal authority; and any international organisation;

 

“policy”, in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;

 

“protection and indemnity risks” means the usual risks covered by a protection and indemnity association which is a member of the International Group of Protection and Indemnity Clubs including pollution risks, extended passenger cover and 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 incorporation in them of clause 6 of the International Hull Clauses (1/11/02 or 1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/10/83) or clause 8 of the Institute Time Clauses (Hulls) (1/11/1995) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision; 

 

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“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; and

 

“tax” includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine.

 

66.3 Meaning of “month”

 

A period of one or more “months” ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started (“the numerically corresponding day”), but:

 

(a) on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or

 

(b) on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day;

 

and “month” and “monthly” shall be construed accordingly.

 

66.4 In this Charter:

 

(a) references to a Leasing Document or any other document being in the form of a particular appendix or to any document referred to in the recitals include references to that form with any modifications to that form which the Owners approve;

 

(b) references to, or to a provision of, a Leasing Document or any other document are references to it as amended or supplemented, whether before the date of this Charter or otherwise;

 

(c) references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Charter or otherwise;

 

(d) words denoting the singular number shall include the plural and vice versa;

 

(e) references to a page or screen of an information service displaying a rate shall include:

 

(i) any replacement page of that information service which displays that rate; and

 

(ii) the appropriate page of such other information service which displays that rate from time to time in place of that information service,

 

and, if such page or service ceases to be available, shall include any other page or service displaying that rate specified by the Owners after consultation with the Charterers.

 

66.5 A Potential Termination Event is “continuing” if it has not been remedied or waived and a Termination Event is “continuing” if it has not been waived.

 

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66.6 Headings

 

In interpreting a Leasing Document or any provision of a Leasing Document, all clauses, sub-clauses and other headings in that and any other Leasing Document shall be entirely disregarded. 

 

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EXECUTION PAGE

 

OWNERS  

 

SIGNED BY )

for and on behalf of )

SEA 241 LEASING CO. LIMITED )

as attorney-in-fact )

in the presence of )
   

Witness’ signature: )

Witness’ name: )

Witness’ address: )

 

CHARTERERS

 

SIGNED BY )

for and on behalf of )

HELLAS OCEAN NAVIGATION CO. )

as attorney-in-fact )

in the presence of )

 

Witness’ signature: )

Witness’ name: )

Witness’ address: )

 

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SCHEDULE 1

 

ACCEPTANCE CERTIFICATE

 

HELLAS OCEAN NAVIGATION CO. (the “Charterers”) hereby acknowledge that at [●] hours on [●], there was delivered to, and accepted by, the Charterers the vessel known as m.v. “Hellasship” (the “Vessel”), registered in the name of SEA 241 LEASING CO. LIMITED (the “Owners”) under the flag of Liberia with IMO number 9574236 under a charter dated [●] 2021 (the “Charter”) and made between the Owners and the Charterers and that Delivery (as defined in the Charter) thereupon took place and that, accordingly, the Vessel is and will be subject to all the terms and conditions contained in the Charter.

 

The Charterers warrant that the representations and warranties made by them in 0 (Representations and Warranties) of the Charter remain correct and that no Termination Event or Potential Termination Event (each as defined in the Charter) has occurred at the date of this Acceptance Certificate.

 

 

Name: 

Title:

for and on behalf of

HELLAS OCEAN NAVIGATION CO.

Dated: 

 

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SCHEDULE 2

 

CONDITIONS PRECEDENT

 

PART A

 

The following are the documents referred to in Clause 34.2(d)(i):

 

1 Corporate Authority

 

1.1 A copy of the constitutional documents of the Charterers and the Guarantor.

 

1.2 If required, a copy of the resolutions of the board of directors (or equivalent) of the Charterers and the Guarantor:

 

(a) approving the terms of, and the transactions contemplated by, the Leasing Documents to which it is a party and resolving that it execute the Leasing Documents to which it is a party;

 

(b) authorising a specified person or persons to execute the Leasing Documents to which it is a party on its behalf; and

 

(c) authorising a specified person or persons, on its behalf, to sign and/or dispatch all documents and notices to be signed and/or dispatched by it under, or in connection with, the Leasing Documents to which it is a party.

 

1.3 If required, a copy of the power of attorney of the Charterers and the Guarantor authorising a specified person or persons to execute the Leasing Documents to which it is a party.

 

1.4 If required, a specimen of the signature of each person authorized by the resolution referred to in paragraph 1.2 above.

 

1.5 If required, a copy of the resolutions signed by all the holder(s) of the issued shares of any Obligors, approving the terms of, and the transactions contemplated by such Leasing Document.

 

1.6 A copy of a certificate of an officer or authorized signatory of the Charterers and the Guarantor certifying that each copy document relating to it specified in this Schedule 2 Part A is correct, complete and in full force and effect as at a date no earlier than the date of this Charter.

 

2 Leasing Documents

 

2.1 A duly executed original of each Leasing Document (except the Security Documents) and of each document to be delivered under each of them.

 

2.2 Agreed forms of the Security Documents and of each document to be delivered under each of them.

 

2.3 Evidence that the Operating Account has been opened and maintained with the Account Bank and there is a credit balance of at least US$550,000.

 

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3 Initial Market Value

 

Valuations of the Vessel, addressed to the Owners and dated not earlier than fifteen (15) days before the Commencement Date indicating the Initial Market Value.

 

4 Legal opinion

 

4.1 An agreed form legal opinion by English legal advisers to the Owners on such matters on the laws of England in relation to the applicable documents listed in paragraphs 2.1 and 2.2 of Part A of this Schedule, in form and substance acceptable to the Owners.

 

4.2 Agreed forms of legal opinions by lawyers appointed by the Owners on such matters relating to the applicable documents listed in paragraphs 2.1 and 2.2 of Part A of this Schedule, concerning the laws of the Republic of Liberia, the Republic of the Marshall Islands, Greece and such other relevant jurisdictions as the Owners may reasonably require, in form and substance acceptable to the Owners.

 

5 Vessel Insurances

 

5.1 Evidence that the Vessel is or will be on Delivery insured in the manner required under Clause 39.1.

 

5.2 Agreed form of letters of undertaking relating to insurances as set out in Clause 39.1 from the relevant insurer, insurance broker, protection and indemnity association or war risks association (as the case may be).

 

5.3 An insurance report by an insurance advisor appointed by the Owners (but at the cost of the Charterers) in an agreed form acceptable to the Owners.

 

6 Others

 

6.1 Evidence that the Arrangement Fee and all other fees, costs and expenses then due from the Charterers to the Owners under the Leasing Documents have been paid and received by the Owners.

 

6.2 A copy of the Management Agreement and any amendments thereto.

 

6.3 A copy of any Assignable Sub-Charter and any amendments thereto.

 

6.4 Copies of the Document of Compliance of the Approved Technical Manager.

 

6.5 Copies of the Vessel’s Safety Management Certificate (together with any other details of the applicable Safety Management System which the Owners require) and of any other documents required under the ISM Code and the ISPS Code (including without limitation an ISSC and IAPPC).

 

6.6 A copy of the Vessel’s class certificate evidencing that the Vessel maintains its classification with the Approved Classification Society and a copy of the confirmation of class issued within three (3) Business Days prior to the Commencement Date confirming that the Vessel is free of all recommendations and conditions.

 

6.7 Copies of the Original Financial Statements.

 

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6.8 Such evidence relating to the Obligors as the Owners may reasonably require for their (or their financiers) to be able to satisfy each of their “know your customer” or similar identification procedures in relation to the Leasing Documents.

 

6.9 A copy of any other consents, approvals, authorization or other document, opinion or assurance which the Owners consider to be reasonably desirable in connection with the entry into and performance of the transactions contemplated by any of the Leasing Documents or for the validity and enforceability of such documents.

 

6.10 Such other documents as the Owners may reasonably require by giving notice to the Charterers.

 

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PART B

 

The following are the documents referred to in Clause 34.2(d)(ii):

 

1 Security Documents

 

1.1 A duly executed original of each of the Security Documents (and of each document to be delivered under each of them).

 

2 Vessel Documents

 

2.1 Documentary evidence that the Vessel is or will be:

 

(a) permanently or provisionally registered in the name of the Owners under the Flag State;

 

(b) in the absolute and unencumbered ownership of the Owners;

 

(c) unconditionally delivered by the Charterers to the Owners pursuant to the terms of the MOA, where such documents shall include without limitation:

 

(i) a copy of the notarized and/or legalised (if required by the Flag State) copies of the bill of sale duly executed by the Charterers and stating that the Vessel is free from all mortgages, encumbrances and liens (whether maritime or otherwise) or any other debts whatsoever (and where executed by an attorney of the Charterers, together with such a copy of the notarized and/or legalised (if required by the Flag State) Charterers’ power of attorney); and

  

(ii) a copy of the protocol of delivery and acceptance duly executed by the Charterers and the Owners.

 

2.2 Any additional documents as may be required by the competent authorities of the Flag State for the purpose of registering the Vessel.

 

3 Others

 

3.1 Evidence that any fees, costs and expenses then due from the Charterers to the Owners under the Leasing Documents have been paid and received by, or will be paid and received by, the Owners, on Delivery of the Vessel.

 

3.2 Such other documents as the Owners may reasonably require by giving notice to the Charterers.

 

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PART C

 

The following are the documents referred to in Clause 34.7:

 

1 Security Interests

 

Not later than five (5) Business Days after the Commencement Date, documentary evidence that the Security Interests intended to be created by each of the Security Documents have been duly perfected under applicable law (as applicable).

 

2 Legal opinions

 

Not later than three (3) Business Days after the Commencement Date, issued signed copies of the legal opinions referred to in paragraph 4 of Part A of Schedule 2 of this Charter.

 

3 Insurances

 

3.1 Not later than ten (10) Business Days after the Commencement Date, receipt of copies of the executed letters of undertaking and certificates of entry (as the case may be) relating to insurances as set out in Clause 39.1 acknowledged by the relevant insurer, insurance broker, protection and indemnity association or war risks association (as the case may be), each in the agreed form under paragraph 5 of Part A of Schedule 2 of this Charter.

 

3.2 Not later than fifteen (15) Business Days after the Commencement Date, the signed insurance report in the form agreed under paragraph 5 of Part A of Schedule 2 of this Charter.

 

4 Others

 

4.1 No later than six (6) months after the Commencement Date, evidence that (if applicable) the Vessel has been permanently registered with the Flag State.

 

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SCHEDULE 3

 

FORM OF COMPLIANCE CERTIFICATE

 

To: SEA 241 LEASING CO. LIMITED (the “Owner”)

 

From: SEANERGY MARITIME HOLDINGS CORP. (the “Guarantor”)

 

Date:             [●]

 

RE: THE BAREBOAT CHARTER (THE “CHARTER”) DATED 22 JUNE 2021 AS AMENDED AND RESTATED BY AN AMENDMENT AND RESTATEMENT DEED DATED                                   2023

 

1. We refer to the Charter. This is a Compliance Certificate. Unless otherwise specified, terms defined in the Charter shall have the same meaning in this compliance certificate.

 

2. We confirm that as calculated by reference to the semi-annual unaudited consolidated financial statements for the financial year ended [●],

 

(a) Cash and Cash Equivalents divided by the number of Fleet Vessels is not lower than $500,000; and

 

(b) the Leverage Ratio is not more than 85 per cent.

 

3. [We confirm that, as at the date hereof, no Termination Event has occurred and is continuing which has not been waived or remedied at the date hereof]1

 

For and on behalf of 

SEANERGY MARITIME HOLDINGS CORP.

 

 

 

Name(s): 

Chief Financial Officer

 

 

1 If this statement cannot be made, this compliance certificate should identify any Termination Event (as defined in the Charter) that is continuing and the steps, if any, being taken to remedy it. 

 

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EXECUTION PAGES

 

CHARTERERS

 

EXECUTED AND DELIVERED AS A DEED ) 
by    STAVROS GYFTAKIS ) 
HELLAS OCEAN NAVIGATION CO. )               /s/ Stavros Gyftakis
acting by ) 
as attorney-in-fact )

 

in the presence of: )

 

Witness’ signature: )              /s/ Ioannis Chrysospathis

Witness’ name: Ioannis Chrysospathis )
Witness’ address: )
154 Vouliagmenis Avenue         
16674 Glyfada, Athens, Greece  

 

Signature pages to Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Hellasship”


OWNERS

 

EXECUTED AND DELIVERED AS A DEED )

by )             /s/ Wong Lai Wa

SEA 241 LEASING CO. LIMITED )

acting by )             Wong Lai Wa

in the presence of: )             Attorney-in-Fact

 

Witness’ signature: )

Witness’ name:       Kwan Ka Ho )              /s/ Kwan Ka Ho

Witness’ address: )
Watson Farley & Williams LLP   
Suites 4610-4619, Jardine House  
1 Connaught Place, Hong Kong   

 

Signature pages to Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Hellasship”



GUARANTOR

 

EXECUTED AND DELIVERED AS A DEED ) 
by       STAVROS GYFTAKIS )          /s/ Stavros Gyftakis

SEANERGY MARITIME HOLDINGS CORP. )

acting by )

as attorney-in-fact )

 

in the presence of: )

 

Witness’ signature: ) 
Witness’ name: Ioannis Chrysospathis )            /s/ Ioannis Chrysospathis

Witness’ address: )
154 Vouliagmenis Avenue         
16674 Glyfada, Athens, Greece  

 

Signature pages to Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Hellasship”



EX-4.23 6 ef20015287_ex4-23.htm EXHIBIT 4.23
 

Exhibit 4.23

 

EXECUTION VERSION

 

Dated 25 September 2023

 

PATRIOT SHIPPING CO.

as Charterers

 

SEA 242 LEASING CO. LIMITED

as Owners

 

SEANERGY MARITIME HOLDINGS CORP.

as Guarantor

 

AMENDMENT AND RESTATEMENT DEED

relating to a bareboat charter dated 22 June 2021 in respect of

m.v. “PATRIOTSHIP”

 



 

Index

 

Clause Page

 

1. Definitions and Interpretation 3
2. Conditions Precedent 4
3. Representations 5
4. Amendments and Confirmations 5
5. Further Assurance 7
6. Costs and Expenses 7
7. Notices 8
8. Counterparts 8
9. Governing Law 8
10. Enforcement 8

 

Schedules

Schedule 1 Conditions Precedent 9
Schedule 2 Form of Effective Date Notice 11
Schedule 3 Form of Amended and Restated Charter 12
   
Execution  

 

Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Patriotship”

 

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THIS DEED is made on 25 September 2023

 

PARTIES

 

(1) PATRIOT SHIPPING CO., a corporation incorporated and existing under the laws of the Republic of Liberia with its registered address at 80 Broad Street, Monrovia, Liberia (the “Charterers”);

 

(2) SEA 242 LEASING CO. LIMITED, a company incorporated under the laws of Hong Kong whose registered office is at 27/F, Three Exchange Square, 8 Connaught Place, Central, Hong Kong (the “Owners”); and

 

(3) SEANERGY MARITIME HOLDINGS CORP., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands with its registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960 (the “Guarantor”).

 

BACKGROUND

 

(A) By a bareboat charter dated 22 June 2021 (the “Charter”) and made between (i) the Owners, as owners and (ii) the Charterers, as bareboat charterers, the Owners have agreed to bareboat charter m.v. “PATRIOTSHIP” (the “Vessel”) to the Charterers pursuant to the terms and conditions contained therein.

 

(B) By a bareboat charter dated 22 June 2021 (the “Other Charter”) and made between (i) SEA 241 LEASING CO. LIMITED (the “Other Owner”), as owners and (ii) HELLAS OCEAN NAVIGATION CO. (the “Other Charterer”), as bareboat charterers, the Other Owner has agreed to bareboat charter m.v. “HELLASSHIP” (the “Other Vessel”) to the Other Charterer pursuant to the terms and conditions contained therein.

 

(C) Without prejudice and in addition to the Owners’ rights under the Charter and other Leasing Documents, in view of the cessation of LIBOR, the Parties agree to enter into this Deed to amend the basis of calculation of “Variable Charterhire” in the Charter upon the terms and conditions as set out in this Deed.

 

OPERATIVE PROVISIONS

 

1. DEFINITIONS AND INTERPRETATION

 

1.1. Definitions

 

In this Deed:

 

“Amended and Restated Charter” means the Charter as amended and restated by this Deed in the form set out in Schedule 3 (Form of Amended and Restated Charter).

 

“Effective Date” means, subject to Clause 2 (Conditions Precedent), 28 June 2023, being the date to be specified as the Effective Date in the Effective Date Notice.

 

“Effective Date Notice” means the notice in the form set out in Schedule 2 (Form of Effective Date Notice).

 

Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Patriotship”

 

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“Guarantee” means the guarantee in respect of the Charter dated 22 June 2021 and made by the Guarantor in favour of the Owners.

 

“Obligors” means collectively, the Charterers, the Other Charterer and the Guarantor (in its capacity as shareholder of the Charterers and a guarantor), and “Obligor” means each or any of them, as the context may require.

 

“Other Amendment and Restatement Deed” means the amendment and restatement deed to the Other Charter dated on or around the date of this Deed.

 

“Other Leasing Documents” means the Leasing Documents as defined in the Other Charter.

 

“Party” means a party to this Deed.

 

1.2. Defined expressions

 

Defined expressions in the Charter shall have the same meanings when used in this Deed unless the context otherwise requires or unless otherwise defined in this Deed.

 

1.3. Application of construction and interpretation provisions of Charter

 

Clause 66 (Definitions) of the Charter applies to this Deed as if it were expressly incorporated in it with any necessary modifications. In the event of any conflict or contradiction between the definitions contained in this Deed and the Charter, the definitions contained in this Deed shall prevail and supersede all such conflicting provisions.

 

1.4. Designation as a Leasing Document

 

The Charterers and the Owners designate this Deed as a “Leasing Document” under the Amended and Restated Charter.

 

1.5. Third party rights

 

Unless provided to the contrary in this Deed, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Deed.

 

2. CONDITIONS PRECEDENT

 

2.1. Conditions Precedent

 

The agreement of the Parties contained in Clause 4 (Amendments and Confirmations) is subject to:

 

(a) the Owners being satisfied that the conditions precedent specified in Schedule 1 (Conditions Precedent) are fulfilled on or before the date of this Deed;

 

(b) the representations to be made by each of the Charterers and the Guarantor (in its capacity as shareholder of the Charterers and a guarantor) in Clause 3 (Representations) are true in all material respects on the Effective Date and on the date of this Deed; and

 

Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Patriotship”

 

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(c) the representations to be made by each of the Other Charterer and the Guarantor (in its capacity as shareholder of the Other Charterer and a guarantor) in clause 3 (Representations) of the Other Amendment and Restatement Deed are true in all material respects on the Effective Date and on the date of the Other Amendment and Restatement Deed.

 

2.2. Effective Date

 

The Owners shall notify the Charterers upon the conditions set out in Clause 2.1 (Conditions Precedent) being fulfilled to their satisfaction, whereupon they shall issue the Effective Date Notice.

 

3. REPRESENTATIONS

 

Each of the Charterers and the Guarantor (in its capacity as shareholder of the Charterers and a guarantor) makes the representations and warranties set out in the Leasing Documents to which it is a party, as amended and restated or supplemented (as the case may be) by this Deed and updated with appropriate modifications to refer to this Deed, by reference to the circumstances then existing on the Effective Date and on the date of this Deed.

 

4. AMENDMENTS AND CONFIRMATIONS

 

4.1. Specific amendments to the Charter

 

With retrospective effect on and from the Effective Date, the Charter shall be amended and restated in the form attached hereto as Schedule 3 (Form of Amended and Restated Charter), provided that:

 

(a) the new “Interest Rate” under the Amended and Restated Charter, together with the related provisions, shall apply retrospectively for the purposes of calculating the “Variable Charterhire” for any Hire Period starting on or after the Effective Date;

 

(b) in relation to any Hire Period starting before the Effective Date only, the “Variable Charterhire” for that Hire Period shall continue to be calculated upon the terms and conditions with respect to such calculation in the Charter, and such terms and conditions shall continue to apply to such Variable Charterhire until such time as such “Variable Charterhire” are fully paid; and

 

(c) the Charter, as amended and restated by this Deed, shall continue to be binding on each of the parties to it in accordance with its terms as so amended and restated.

 

4.2. Amendments to other Leasing Documents

 

With retrospective effect on and from the Effective Date, each of the other Leasing Documents, shall be, and shall be deemed by this Deed to be, amended as follows:

 

(a) by construing the definition of, and references throughout each of the other Leasing Documents to, the Charter as if the same referred to the Charter as amended and restated by this Deed;

 

(b) by construing references throughout each of the other Leasing Documents to “this Deed”, “this Account Assignment, Pledge and Charge Agreement”, “this Guarantee”, “this Letter of Undertaking” and other like expressions as if the same referred to such relevant Leasing Document as amended and supplemented by this Deed;

 

Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Patriotship”

 

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(c) by construing references throughout each of the other Leasing Documents to “a Leasing Document”, “the Leasing Documents” and other like expressions as if the same referred to such relevant Leasing Document as amended and restated or supplemented (as the case may be) by this Deed; and

 

(d) by construing references throughout each of the other Leasing Documents to “Other Leasing Document” and other like expressions as if the same referred to such Other Leasing Document as amended and restated or supplemented (as the case may be) by the Other Amendment and Restatement Deed.

 

4.3. Obligors Confirmation

 

(a) Each of the Charterers and the Guarantor (in its capacity as shareholder of the Charterers and a guarantor) with retrospective effect on and from the Effective Date:

 

(i) confirms its acceptance of the Amended and Restated Charter;

 

(ii) agrees that it is bound as an Obligor (as defined in the Amended and Restated Charter);

 

(iii) confirms that the definition of, and references throughout each of the Leasing Documents (to which it is a party) to, the Charter and any of the other Leasing Documents shall be construed as if the same referred to the Charter and such other Leasing Documents as amended and restated or supplemented (as the case may be) by this Deed; and

 

(iv) confirms that the definition of, and references throughout each of the Leasing Documents (to which it is a party) to any of the Other Leasing Documents shall be construed as if the same referred to such Other Leasing Document as amended and restated or supplemented (as the case may be) by the Other Amendment and Restatement Deed.

 

(b) The Guarantor confirms that its guarantee and indemnity given under the Guarantee with retrospective effect on and from the Effective Date:

 

(i) continues to have full force and effect on the terms of the Amended and Restated Charter; and

 

(ii) extends to the obligations of the relevant Obligors under the Leasing Documents as amended and restated or supplemented (as the case may be) by this Deed.

 

4.4. Security confirmation

 

Each of the Charterers and the Guarantor (in its capacity as shareholder of the Charterers and a guarantor) confirms with retrospective effect on and from the Effective Date that:

 

(a) any Security Interest created by it under the Leasing Documents to which it is a party extends to the obligations of the relevant Obligors under (i) the Leasing Documents as amended and restated or supplemented (as the case may be) by this Deed and (ii) the Other Leasing Documents as amended and restated or supplemented (as the case may be) by the Other Amendment and Restatement Deed; and

 

Amendment and Restatement Deed to BBC

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(b) the obligations of the relevant Obligors under (i) the Leasing Documents to which it is a party, as amended and restated or supplemented (as the case may be) by this Deed and (ii) the Other Leasing Documents to which it is a party, as amended and restated or supplemented (as the case may be) by the Other Amendment and Restatement Deed, are included in the Secured Liabilities (as defined in the Security Documents to which it is a party (other than the Account Charge)) and the Indebtedness (as defined in the Account Charge);

 

(c) any Security Interest created under the Leasing Documents to which it is a party continues in full force and effect on the terms of such Leasing Documents, notwithstanding the amendments and/or supplements set out or contemplated by this Deed; and

 

(d) to the extent that this confirmation creates a new Security Interest, such Security Interest shall be on the terms of the Leasing Documents in respect of which this confirmation is given.

 

4.5. Leasing Documents to remain in full force and effect

 

The Leasing Documents shall remain in full force and effect and, with retrospective effect on and from the Effective Date:

 

(a) in the case of the Charter, as amended and restated pursuant to Clause 4.1 (Specific amendments to the Charter);

 

(b) in the case of the other Leasing Documents, as amended and supplemented pursuant to Clause 4.2 (Amendments to other Leasing Documents);

 

(c) the Charter and the applicable provisions of this Deed will be read and construed as one document; and

 

(d) except to the extent expressly waived by the amendments effected by this Deed, no waiver is given by this Deed and the Owners expressly reserve all its rights and remedies in respect of any breach of or other Termination Event under the Leasing Documents.

 

5. FURTHER ASSURANCE

 

(a) Each of the Charterers and the Guarantor (in its capacity as shareholder of the Charterers and a guarantor) shall promptly, and in any event within the time period specified by the Owners do all such acts (including procuring or arranging any registration, notarisation or authentication or the giving of any notice) or execute or procure execution of all such documents (including assignments, transfers, mortgages, charges, notices, instructions, acknowledgements, proxies and powers of attorney), as the Owners may specify (and in such form and substance as the Owners may require in favour of the Owners or its nominee(s)) to implement the terms and provisions of this Deed.

 

(b) The Owners shall take all such action as is available to them (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security Interest conferred or intended to be conferred on the Owners by or pursuant to the Security Documents and the Charter as amended and restated or supplemented (as the case may be) by this Deed.

 

6. COSTS AND EXPENSES

 

The Charterers shall reimburse the Owners on demand for all reasonable and documented costs and expenses (including, without limitation, legal fees, taxes and other disbursements) incurred by the Owners in connection with or arising out of the negotiation, execution, operation or implementation of this Deed and any other documents required in connection herewith.

 

Amendment and Restatement Deed to BBC

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7. NOTICES

 

Clause 46 (Notices) of the Charter, as amended and supplemented by this Deed applies to this Deed as if it were expressly incorporated in it with any necessary modifications.

 

8. COUNTERPARTS

 

This Deed 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 Deed.

 

9. GOVERNING LAW

 

This Deed and any non-contractual obligations arising under or in connection with it, shall be governed by and construed in accordance with English law.

 

10. ENFORCEMENT

 

Clause 65 (Governing Law and Enforcement) of the Charter applies to this Deed as if it were expressly incorporated in it with any necessary modifications.

 

This Deed has been entered into and delivered as a deed, on the date stated at the beginning of this Deed.

  

Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Patriotship”

  

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SCHEDULE 1

 

CONDITIONS PRECEDENT

 

1 Corporate documents

 

1.1 If required, a copy of the resolutions of the board of directors (or equivalent) of each of the Charterers and the Guarantor:

 

(a) approving the terms of, and the transactions contemplated by, this Deed and resolving that it execute this Deed;

 

(b) authorising a specified person or persons to execute this Deed on its behalf; and

 

(c) authorising a specified person or persons, on its behalf, to sign and/or dispatch all documents and notices to be signed and/or dispatched by it under, or in connection with, this Deed.

 

1.2 If required, a copy of the power of attorney of each of the Charterers and the Guarantor authorising a specified person or persons to execute this Deed.

 

1.3 If required, a specimen of the signature of each person authorized by the resolutions referred to in paragraph 1.1 above.

 

1.4 If required, a copy of the resolutions signed by all the holder(s) of the issued shares of the Charterers, approving the terms of, and the transactions contemplated by this Deed.

 

1.5 A copy of a certificate of an officer or authorised signatory of each of the Charterers and the Guarantor certifying and confirming that its constitutional documents have not been amended since they were last provided to the Owners, or in the event such constitutional documents have been amended, such certificate to attach and certify each such copy amended constitutional document is correct, complete and in full force and effect as at a date no earlier than the date of this Deed, with originals to follow within 10 Business Days after the Effective Date.

 

1.6 A copy of a certificate of an officer or authorized signatory of each of the Charterers and the Guarantor addressed to the Owners certifying that each copy document relating to it specified in this Schedule is correct, complete and in full force and effect as at a date no earlier than the date of this Deed, with originals to follow within 10 Business Days after the Effective Date.

 

1.7 Copies of certificates of good standing or equivalent in respect of each of the Charterers and the Guarantor which has been issued on a date no later than thirty (30) calendar days (or such later date as the Owners may agree) before the date of the relevant legal opinion to be provided to the Owners pursuant to paragraph 4 below, with originals to follow within 10 Business Days after the Effective Date.

 

2 Amendment documents

 

2.1 A duly executed copy of this Deed, with originals to follow within 10 Business Days after the Effective Date.

 

2.2 A duly executed copy of the Other Amendment and Restatement Deed, with originals to follow within 10 Business Days after the Effective Date.

 

Amendment and Restatement Deed to BBC

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2.3 Evidence that the Other Owner is satisfied that the conditions precedent specified in schedule 1 (Conditions Precedent) to the Other Amendment and Restatement Deed are fulfilled.

 

3 Fees and expenses

 

3.1 Evidence that all fees and expenses then due from the Charterers to the Owners under this Deed have been paid or will be paid in accordance with the relevant provisions thereof.

 

4 Legal opinions

 

4.1 A signed legal opinion of Watson Farley & Williams, legal advisers to the Owners on such matters on the laws of England as may be satisfactory to the Owners.

 

4.2 A signed legal opinion of Watson Farley & Williams, legal advisers to the Owners on such matters on the laws of the Republic of the Marshall Islands as may be satisfactory to the Owners.

 

4.3 A signed legal opinion by lawyers appointed by the Owners on such matters on the laws of any other jurisdiction as may be satisfactory to the Owners.

 

5 Other documents and evidence

 

5.1 Such other documents, authorisations, opinions or assurance which the Owners reasonably require in connection with the entry into and performance of the transactions contemplated by this Deed or for the validity and enforceability of the Amended and Restated Charter and the other Leasing Documents as amended and restated or supplemented (as the case may be) by this Deed, by giving advance notice to the Charterers.

 

Amendment and Restatement Deed to BBC

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SCHEDULE 2

 

FORM OF EFFECTIVE DATE NOTICE

 

Amendment and Restatement Deed dated _______________________ 2023 (the “Deed”)

 

relating to a bareboat charter dated 22 June 2021 in respect of

m.v. “PATRIOTSHIP”

 

1. We refer to the Deed. This is the Effective Date Notice. Terms defined in the Deed shall have the same meaning in this Effective Date Notice.

 

2. By issuing this Effective Date Notice, we confirm that the conditions precedent set out in Clause 2.1 (Conditions Precedent) of the Deed are fulfilled to our satisfaction, and therefore the amendments contemplated in the Deed shall take effect retrospectively on and from 28 June 2023, being the Effective Date.

 

___________________________

For and on behalf of

SEA 242 LEASING CO. LIMITED

Name:

Title: 

 

Amendment and Restatement Deed to BBC

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SCHEDULE 3

 

FORM OF AMENDED AND RESTATED CHARTER

 

Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Patriotship”

 

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BIMCO 1. Shipbroker N/A 3. Owners/Place of business (Cl. 1) Sea 242 Leasing Co. Limited, a company incorporated under the laws of Hong Kong with registration number 3016198 whose registered office is at 27/F, Three Exchange Square, 8 Connaught Place Central, Hong Kong 5. Vessel’s name, call sign and flag (Cl. 1 and 3) Patriotship Call Sign: V7A4666 Flag:Marshall Islands Type of Vessel Bulk carrier 8. When/Where built 2010 Imabari Shipbuilding Co., Ltd. 10. Classification Society (Cl. 3) DNV BARECON 2001 STANDARD BAREBOAT CHARTER 2. Place and date. 22 June 2021 4. Bareboat Charterers/Place of business (Cl. 1) PART I Patriot Shipping Co., a corporation incorporated under the laws of the Republic of Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 7. GT/NT 93079/60504 9. Total DWT (abt.) in metric tons on summer freeboard 181709 11. Date of last special survey by the Vessel’s classification society N/A 12 Further particulars of Vessel (also indicate minimum number of months’ validity of class certificates agreed acc. to Cl. 3) N/A 13. Port or Place of delivery (Cl. 3) Back to back with MOA delivery 16. Port or Place of redelivery (CI. 15) See Clauses 41 and 42 14. Time for delivery (Cl. 4) See Clause 34 15. Cancelling date (Cl. 5) See definition of “Cancelling Date” and Clause 33 18. Running days’ notice if other than stated in Cl. 4 20. Trading limits (Cl. 6) Worldwide within International Navigating Limits and excluding any war listed area declared by the Joint War Committee 21. Charter period (Cl. 2) See Clause 32 17. No. of months’ validity of trading and class certificates upon redelivery (Cl. 15) Three (3) months 19. Frequency of dry docking (Cl. 10(g)) In accordance with Approved Classification Society or requirements of Flag State 22. Charter hire (Cl. 11) See Clause 36 23. New class and other safety requirements (state percentage of Vessel’s insurance value acc. to Box 29) (Cl. 10(a)(i)) N/A 24. Rate of interest payable acc. to Cl. 11 (f) and, if applicable, acc. 25. Currency and method of payment (Cl. 11) to PART IV See Clause 37 Dollars/Bank transfer 26. Place of payment; also state beneficiary and bank account (Cl. 27. Bank guarantee/bond (sum and place) (Cl. 24) (optional) 11) See Clause 36 N/A 28. Mortgage(s), if any (state whether 12(a) or (b) applies; if 12(b) 29. Insurance (hull and machinery and war risks) (state value applies state date of Financial Instrument and name of Mortgagee(s)/Place of business) (Cl. 12) N/A acc. to Cl. 13(f) or, if applicable, acc. to Cl. 14(k)) (also state if Cl. 14 applies) See Clause 39 30. Additional insurance cover, if any, for Owners’ account limited 31. Additional insurance cover, if any, for Charterers’ account to (Cl. 13(b) or, if applicable, Cl. 14(g)) See Clause 39 limited to (Cl. 13(b) or, if applicable, Cl. 14(g)) See Clause 39 32. Latent defects (only to be filled in if period other than stated in 33. Brokerage commission and to whom payable (CL. 27) Cl. 3) N/A N/A Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.



 

34.  Grace period (state number of clear banking days) (Cl.28) N/A 35. Dispute Resolution (state (30)(a), 30(b) or 30(c); if 30(c) agreed  Place of Arbitration must be stated (Cl. 30) (c) Clause 30 not applicable. See Clause 65 36. War cancellation (indicate countries agreed) (Cl. 26(f)) N/A 37. Newbuilding Vessel (indicate with “yes” or “no” whether PART III applies) (optional) No 38. Name and place of Builders (only to be filled in if PART III applies) N/A 39. Vessel’s Yard Building No. (only to be filled in if PART III applies) N/A40. Date of Building Contract (only to be filled in if PART III applies) N/A 41.Liquidated damages and costs shall accrue to (state party acc. to Cl. 1) a)N/A b)N/A c)N/A 42. Hire/Purchase agreement (indicate with “yes” or “no” whether PART IV applies) (optional) No, Part IV does not apply 43. Bareboat Charter Registry (indicate with “yes” or “no” whether PART V applies) (optional) No 44. Flag and Country of the Bareboat Charter Registry (only to be filled in if PART V applies) N/A45. Country of the Underlying Registry (only to be filled in if PART V applies) N/A 46. Number of additional clauses covering special provisions, if agreed Clause 32 to Clause 66 PREAMBLE - It is mutually agreed that this Contract shall be performed subject to the conditions contained in this Charter which shall include PART I and PART II. In the event of a conflict of conditions, the provisions of PART I shall prevail over those of PART II to the extent of such conflict but no further. It is further mutually agreed that PART III and/or PART IV and/or PART V shall only apply and only form part of this Charter if expressly agreed and stated in Boxes 37, 42 and 43. If PART III and/or PART IV and/or PART V apply, it is further agreed that in the event of a conflict of conditions, the provisions of PART I and PART II shall prevail over those of PART III and/or PART IV and/or PART V to the extent of such conflict but no further. Signature (Owners) /s/ Zhou Ling Zhou Ling Attorney-in-factSignature (Charterers)  /s/ Stavros Gyftakis Stavros Gyftakis Attorney-in-Fact Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.
 


 

1 1. Definitions 2 In this Charter, the following terms shall have the 3 meanings hereby assigned to them: 4 5 “The Owners” shall mean the party identified in Box 3; “The Charterers” shall mean the party identified in Box 4; 6 “The Vessel” shall mean the vessel named in Box 5 and 7 with particulars as stated in Boxes 6 to 12. 8 “Financial Instrument” has the meaning ascribed to it in 9 Clause 66, mesans the mortgage, deed of covenant er other such financial security instrument as 10 annexed to this Charter and stated in Box 28. PART II BARECON 2001 Standard Bareboat Charter 11 2 Charter Period 12 In consideration of the hire detailed in Box 22, 13 the Owners have agreed to let and the Charterers have 14 agreed to hire the Vessel for the period stated in Box 21 15 (The Charter Period), See also Clause 32. 16 3. Delivery 17 (not applicable when Part ill applies, as indicated in Box 37) 18 (a) The Owners shall before and at the time of delivery 19 exercise due diligence to make the Vessel seaworthy 20 Andin every respect ready in hull machinery and 21 equipment for service under this Charter 22 The Vessel shall be delivered by the Owners and taken 23 over by the Charterers at the port or place indicated in 24 Box 13, in such ready safe berth as the Charterers may 25 26 (b) The Vessel shall be properly documented on 27 delivery in aseerdance with the laws of the flag State 28 indicated in Box 5 and the requirements of the 29 classification society stated in Box 10 The Vessel upon 30 delivery shall have her survey cycles up to date and 31 trading and class certificates valid for at least the number 32 of months agreed in Box 12 33 (c) The delivery of the Vessel by the Owners and the 34 taking over of the Vessel by the Charterers shall 35 constitute a full performance by the Owners of all the 36 Owners’ obligations under this Clause 3, and thereafter 37 the Charterers shall not be entitled to make or assert 38 any claim against the Owners on account of any 39 conditions, representations or warranties expressed or 40 implied with respect to the Vessel, but the Owners shall 41 be liable for the cost of but not the time for repairs o 42 renewals occasioned by latent defects in the Vessel, 43 her machinery or appurtenances, existing at the time of 44 delivery under this Charter,provided such defects have 45 manifested themselves within twelve (2) months after 46 delivery unless otherwise provided in Box 32 47 4. Time for Delivery (See Clause 34) 48(not applicable when Port lopplies, as indicated in Box 37) 49The Vessel shall not be delivered before the date 50 indicated in Box 14 without the Charterers consent and 54 the Ownces shall exercise lee diligence to deliver the 52 Vessel not later than the date indicated in Box 15 53 Unless otherwise agreed in Box 18, the Owners shall 54 give the Charterers not less than thirty 4301 running days 55 preliminary and not less than Fourteen (14) running days 56definite notice of the date on which the Vessel is 57expected to be ready for delivery 58 The Owners shall keep the Charterers closely advised 59 of possible changes in the Vessels position 60 5. Cancelling (See Clause 33) 61(not applicable when Part 4 applies os indicated in Box 37 62 (a) Should the Vessel not be delivered latest by the 63 cancelling date indicated in Box 15, the Charterers shall 64 have the option el canceling this Charter by giving the 65 Owners notice ol cancellation within thirty sie (36) 66 running hours after the cancelling date stated in Box 6715, foiling which this Charter shall remain in full force 68andellest 69 (b) if it appears that the Vessel will be delayed beyond 70 the cancelling date, the Owners may as soon as they 74 are in a position to state with reasonable certainty the 72 day on which the Vessel should be ready, give notice 73 thereof to the Charterers asking whether they will 74 exercise their option of cancelling, and the option must 75 then be declared within one hundred and sixty eight 76 (168) running hours of the receipt by the Charterers of 77 such notice or within thirty six (36) running hours after 78 the cancelling date, whichever is the earlier if the 29 Charterers do not then exercise their option of cancelling 80 the seventh day after the readiness date stated in the 81 Owners notice shall be substituted for the cancelling 82 date indicated in Box 15 for the purpose of this Clause 5 83(c) Cancellation under this Clause shall be without 84 prejudice to any claim the Charterers may otherwise 85 have on the Owners under this Charter 86 6. Trading Restrictions (See also Clauses 39.9(d) and 53.1(c)) 87 The Vessel shall be employed in lawful trades for the 88 carriage of suitable lawful merchandise within the trading 89 limits indicated in Box 20. 90 The Charterers undertake not to employ the Vessel or 91 suffer the Vessel to be employed otherwise than in 92 conformity with the terms of the contracts of insurance 93 (including any warranties expressed or implied therein) 94 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. 95 96 97 98 The Charterers also undertake not to employ the Vessel 99 or suffer her employment in any trade or business which 100 is forbidden by the law of any country to which the Vessel 101 may sail or is otherwise illicit or in carrying illicit or 102 prohibited goods or in any manner whatsoever which 103 may render her liable to condemnation, destruction, 104 seizure or confiscation. 105 Notwithstanding any other provisions contained in this 106 Charter it is agreed that nuclear fuels or radioactive 107 products or waste are specifically excluded from the 108 109 cargo permitted to be loaded or carried under this Charter. This exclusion does not apply to radio isotopes 110 used or intended to be used for any industrial, 111 commercial, agricultural, medical or scientific purposes 112 provided the Owners’ prior approval has been obtained 113 to loading thereof. 114 7. Surveys on Delivery and Redelivery (See Clauses 41.8 and 41.9) 115 (not applicabile when Part iil applies, as indicated in Bex 37) 336 The Owners and Charterers shall each appoint 317 surveyors for the purpose of determining and agreeing 118 in writing the condition of the Vessel at the time of 119 delivery and redelivery hereunder fif applicable). The Owners shall 320 bear all expenses of the On hire Survey including loss Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.



 

 

PART II BARECON 2001 Standard Bareboat Charter 121 of time, any and the Charterers shall bear all expenses 122 of the Off hire Survey including loss of time, if any, et 123 the daily equivalent to the rate of hire or pro rate thereof 124 8. Inspection (See Clause 54) 125 The Owners shall have the right at amy time after giving 126 reasonable notice to the Charterers to inspect or survey 127 the Vessel or instruct a duly authorised surveyor to carry 128 out such survey on their behalf 129 (a) to ascertain the condition of the Vessel and satisly 130 themselves that the Vessel is being properly repaired and maintained The costs and fees for such inspection 132 or survey shall be paid by the Owners unless the Vessel 233 is found to require repairs or maintenance in order to 134 achieve the condition se provided 135 (b) in dry dock if the Charterers have not dry docked 336 Hor in accordance with Clause 10g). The costs and fees 337 for such inspection or survey shall be paid by the 138 Charterers and 139 (c) for any other commercial reason they consider 140 necessary (provided it dees not unduly interfere with 141 the commercial operation of the Vesselj The costs and 342 fees fer such inspection and survey shall be paid by the 143 Owners 144 All time used in respect of inspection, survey or repairs 145 shall be for the Charterers account and form part of the 146 Charter Period 147 The Charterers shall also permit the Owners to inspect 148 the Vescel’s leg books whenever requested and shall 149 whenever required by the Owners furnish them with full 150 information regarding any casualties or other accidents 151 or damage to the Vessel 152 9. Inventories, Oil and Stores 153 A complete inventory of the Vessel’s entire equipment, 154 outfit including spare parts, appliances and of all 455 consumable stores on board the Vessel shall be made 56 by the Charterers in Conjunction with the Owners on 157 delivery and again on redelivery of the Vessel The 358 Chartorers and the Owners, respectively, shall at the 159 time of delivery and redelivery take over and pay for all 160 bunkers, lubricating oil, unbreached provisions, paints 161 copes and other consumable stores (excluding spare 162 parts) in the said Vessel at the then current market prices 163 at the ports of delivery and redelivery, respectively. The 164 Charterers shall ensure that all spare parts listed in the 165 inventory and used during the Charter Feried are 166 replaced at their expense prior to redelivery of the 167 Vessel 168 10. Maintenance and Operation 169 (a)(i)Maintenance and Repairs During the Charter 170 Period the Vessel shall be in the full possession 171 and at the absolute disposal for all purposes of the 172 Charterers and under their complete control in 173 every respect. The Charterers shall maintain the 174 Vessel, her machinery, boilers, appurtenances and 175 spare parts in a good state of repair, in efficient. 176 operating condition and in accordance with good 177 commercial maintenance practice and, except as 178 provided for in Clause 14(1), if applicable, at their 179 own expense they shall at all times keep the 180 Vessel’s Classification Class fully up to date with the Classification 181 Society indicated in Box 10 and maintain all other 182 necessary certificates in force at all times. 183 184 event of any improvement, structural changes or (ii) New Class and Other Safety Requirements In the 185 new equipment becoming necessary for the 186 continued operation of the Vessel by reason of new 187 class requirements or by compulsory legislation, the costs of compliance shall be for the Charterers’ account. 388 389 mure than the percentage stated in Box 25,orif costing (excluding the Charterers loss of time 190 Box 23 is lelt blank 5 per cent of the Vessel’s 191 insurance value as stated in Box 29, then the 192 extent, if any, to which the rate of hire shall be varied 393 and the ratio in which the cost of compliance shall 394 be shared between the parties concerned in order 195 to achieve a reasonable distribution thereof as 196 between the Owners and the Charterers having 297 regard, inter alia, to the length of the peried 198 romaining under this Charter shall, in the absence 199 of agreement, be referred to the dispute resolution 200 method agreed in Clause 30 201 (iii) Financial Security The Charterers shall maintain 202 financial security or responsibility in respect of third 203 party liabilities as required by any government, 204 including federal, state or municipal or other division 205 or authority thereof, to enable the Vessel, without 206 penalty or charge, lawfully to enter, remain at, or 207 leave any port, place, territorial or contiguous 208 waters of any country, state or municipality in 209 performance of this Charter without any delay. This 210 obligation shall apply whether or not such 211 requirements have been lawfully imposed by such 212 government or division or authority thereof. 213 The Charterers shall make and maintain all arrange 214 ments by bond or otherwise as may be necessary to 215 satisfy such requirements at the Charterers’ sole 216 expense and the Charterers shall indemnify the Owners 217 against all consequences whatsoever (including loss of 218 time) for any failure or inability to do so.. 219 (b) Operation of the Vessel The Charterers shall at 220 their own expense and by their own procurement man, 221 victual, navigate, operate, supply, fuel and, whenever 222 required, repair the Vessel during the Charter Period 223 and they shall pay all charges and expenses of every 224 kind and nature whatsoever incidental to their use and 225 operation of the Vessel under this Charter, including 226 annual flag State fees of the Flag State and any foreign general 227 municipality and/or state taxes. The Master, officers 228 and crew of the Vessel shall be the servants of the Charterers 229 for all purposes whatsoever, even if for any reason 230 appointed by the Owners. 231 Charterers shall comply with the regulations regarding officers and crew in force in the country of the Vessel’s 232 233 flag or any other applicable law. 234 (c) The Charterers shall keep the Owners and the 235 mortgageelsi advised of the intended employment, 236 planned dry docking and major repairs of the Vessel, 237 as reasonably required. 238 (d) Flag and Name of Vessel During the Charter 239 Period, the Charterers shall have the liberty to paint the 240 Vessel in their own colours, install and display their 241 funnel insignia and fly their own house flag. The Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.



 

 

PART II BARECON 2001 Standard Bareboat Charter 242 Charterers shall also have the liberty, with the Owners’ 243 consent, which shall not be unreasonably withheld, to 244 change the flag and/or the name of the Vessel during 245 the Charter Period (with all fees, costs and expenses arising in relation thereto for the Charterers account). Painting and re painting, instaiment 246 and re instalment, registration and re registration, if 247 required by the Owners, shall be at the Charterers’ 248 expense and time. 249 (e) Changes to the Vessel See Clause 53.1(1). Subject to Clause 10fa)( 250 the Charterers shall make no structural changes in the 251 Vessel or changes in the machinery, boilers appurten 252 ances or spare parts thereof without in each instance 253 first securing the Owners approval thereof if the Owners 254 so agree, the Charterers shall, if the Owners so require 256 restore the Vessel to its former condition before the 256 termination of this Charter 257 (f) Lise of the Vessel’s Outfit, Equipment and 258 Appliances The Charterers shall have the use of all 259 outfit, equipment, and appliances on board the Vessel 260 at the time of delivery, provided the same or their 261 substantial equivalent shall be returned to the Owners 262 on redelivery in the same good order and condition as 263 when received, ordinary wear and tear excepted. The 264 Charterers shall from time to time during the Charter 265 Period replace, renew or substitute such items of equipment as shall be so 266 damaged or worn as to be unfit for use. The Charterers 267 are to procure that all repairs to or replacement of any 268 damaged, worn or lost parts or equipment be effected 269 in such manner (both as regards workmanship and 270 quality of materials) as not to diminish the value of the 271 Vessel. Title of any equipment so replaced, renewed or substituted shall vest in and remain with the Owners. The Charterers have the right to fit additional 272 equipment at their expense and risk but the Charterers 273 shall remove such equipment at the end of the period if 274 requested by the Owners. See also Clause 53.1(1), Any equipment including radio 275 equipment on hire on the Vessel at time of delivery shall 276 be kept and maintained by the Charterers and the 277 Charterers shall assume the obligations and liabilities 278 of the Owners under any lease contrasts in connection 279 therewith and shall reimburse the Owners for all 280 expenses incurred in connection therewith, also for any 281 new equipment required in order to comply with radio 282 regulations. 283 (8) Periodical Dry Docking The Charterers shall dry 284 dock the Vessel and clean and paint her underwater 285 parts whenever the same may be necessary, but not 286 less than once during the period stated in Box 19 or, if 287 Box 19 has been left blank, every sixty (60) calendar 288 months after delivery or such other period as may be 289 required by the Classification Society or flag State. 290 11. Hire (See Clause 36) 291(a) The Charterers shall pay hire duo to the Owners 292 punctually in accordance with the terms of this Charter 293 in respect of which time shall be of the essence 294 (b) The Charterers shali pay to the Owners for the hire 295 of the Vessel a lump sum in the amount indicated in 296 Box 22 which shall be payable not later than every thirty 297 430 running days in advance the first lump sum being 298 payable on the date and hour of the Vessel’s delivery 10 299 the Charterers Hire shall be paid continuously 300 throughout the Chartes Period 301 (e) Payment of hire shall be made in cash without 302 discount in the currency and in the manner ind cated in 303 Box 25 and at the place mentioned in Box 26 304(d) Final payment of hire, il for a period of less than 305 thirty (30) running days shall be calculated proportionally 306 ascording to the number of days and hours remaining 307 before recdelivery and advance payment to be effected 308 accordingly 309 (e) Should the Vessel be lost or missing hire shall 310 cease from the date and time when she was lost of last 311 heard of. The date upon which the Vessel is to be treated 322 as lost or missing shall be ten (10) days after the Vessel 243 was last reported or when the Vessel is posted as 314 missing by loyd’s, whichever oceurs first Any hire paid 316 in advance to be adjusted accordingly 316 (Any delay in payment of hire shall entitle the 247 Owners to interest at the rate per annum as agreed 318 in Box 24. If Box 24 has not been filled in the three months 249 Interbank offered rate in London (LIBOR or its successor) 320 for the currency stated in Box 25 as quoted by the British 321 Bankers Association (884) on the date when the hire 322 feli due, increased by per cent shall apply 323 (g) Payment of interest due under sub clause 11 324 shall be made within seven (?) running days of the date 325 of the Owners’ invoice speellying the amount payable 326 or, in the absence of an invoice, at the time of the next 327 hire payment date 328 12. Mortgage (See Clause 621 329 (only to apply if Box 28 has been appropriately filled in) 330(a) The Owners warrant that they have not ellected 331 any mortgage(s) of the Vessel and that they shall not 332 effect any mortgage(s) without the prior consent of the 333 Charterers, which shall not be unreasonably withheld 334) (b) The Vessel chartered under this Charter is fireanced 335 by a mortgage according to the Financial Instrument 336 The Charterers undertake to comply and provide such 337 information and documents to enable the Owners to with all such instructions or directions in regard 338 comply 339 te the employment, insurances, operation, repairs and 340 maintenance of the Vessel as laid down in the Financial 341 Instrument or as may be directed from time to time during 342 the currency of the Charter by the mortgageels) i 343 344 conformity with the Financial Instrument. Tise Chartovers confirm that for this purpose, they have acquainted 345 thomselves with all relevant terms conditions and 346 provisions of the Financial Instrument and agree to 347 acknowledge this in writing in any form that may be 348 required by the inertgagee(s) The Owners warrant that 349 they have not effected any mortgage(s) other than stated 250 in Box 28 and that they shali not agree to any 365 amendment of the mortgage(s) referred to in Box 28 or 352 effect any other mortgage(6) without the prior consent 363 of the Charterers, which shall not be unreasonably 354 withheld. 355 (Optional Clauses 12(0) and 12(b) are alternatives 356 indicate alternative agreed in Box 28) 357 13. Insurance and Repairs (See also Clause 39) Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.



 

 

PART II BARECON 2001 Standard Bareboat Charter 358 (a) During the Charter Period the Vessel shall be kept 359 insured in accordance with Clause 39 andby the Charterers at their expense against hull 360 and machinery, war omel Protection and indemnity risks 362 (ond any risks against which it is compulsory to insure 362 for the operation of the Vessel, including but not limited to maintaining 363 financial security in accordance with sub clause 364 10(a)(iii)) in such form as the Owners shall in writing 365 approve, which approval shall not be un reasonably 366 withheld. Such insurances shall be arranged by the 367 Charterers to protect the interests of both the Owners 368 and the Charterers and the Owners’ Financiers mortgagee(s) (if any), and 369 The Charterers shall be at liberty to protect under such 370 insurances the interests of any managers they may 371 appoint provided such manager has entered into a manager’s undertaking in form and substance acceptable to the Owners and the Owners’ Financiers (if any). Insurance policies shall cover the Owners, the mortgageels) (if any), the appointed managers, and 372 the Charterers according to their respective interests. 373 Subject to the provisions of the agreed loss payable. clauses, Financial instrument, 374 any, and the approval of the Owners and the insurers, 375 the Charterers shall effect all insured repairs and shall 376 undertake settlement and reimbursement from the 377 insurers of all costs in connection with such repairs as 378 well as insured charges, expenses and liabilities to the 379 extent of coverage under the insurances herein provided 380 for. 381 The Charterers also to remain responsible for and to 382 effect repairs and settlement of costs and expenses 383 incurred thereby in respect of all other repairs not 384 covered by the insurances and/or not exceeding any 385 possible franchise(s) or deductibles provided for in the 386 insurances. 387 All time used for repairs under the provisions of sub 388 clause 13(a) and for repairs of latent defects according 389 to Clause fel above, including any deviation, shall be 390 for the Charterers’ account. 391 (b) if the conditions of the above insurances permit 392 additional insurance to be placed by the parties, such 393 cover shall be limited to the amount for each party set 394 out in Box 30 and Box 31, respectively. The Owners 395 the Charterers as the case may be shall immediately 396 furnish the other party Owners with particulars of any additional 397 insurance effected, including copies of any cover notes 398 or policies and the written consent of the insurers of 399 any such required insurance in any case where the 400 consent of such insurers is necessary. 401 (c) The Charterers shall upon the request of the 402 Owners, provide information and promptly execute such 403 documents as may be reasonably required to enable the Owners to 404 comply with the insurance provisions of the Financial 405 Instrument (if any). 406 (d) Subject to the provisions of the Financial Instru 407 ments and Clause 43, if any, should the Vessel become a Total Loss, an actual 408 constructive, compromised or agreed total loss under 409 the insurances required sealer sub clause 13ja), all 410 insurance payments for such loss shall be paid to the 411 Owners (or, if applicable, the Owners’ Financiers) in accordance with the agreed loss pavable clauses, who shall distribute the moneys betweon the 413 Owners and the Charterers according to their respective 413 interests. The Charterers undertake to notify the Owners and the Owners’ Financiers, 414 and the mortgagee(s), if any, of any occurrences in 415 consequence of which the Vessel is likely to become a 416 Total Loss, as delined in this Clause 417 (e) The Owners shall upon the request of the 418 Charterers, promptly execute such documents as may 419 be required to enable the Charterers to abandon the 420 Vessel to insurers and claim a constructive total loss 421 (f) For the purpose of insurance coverage against hull 422 and machinery and war risks under the provisions of 423 sub clause 13(a), the value of the Vessel is the sum 424 indicated in Clause 39.Box 29. 425 14. Insurance, Repairs and Classification 426 (Optional only to apply if expressly agreed and stated 427 in Box 29, in which event Clause 13 shall be considered 428 deleted) 429 (a) During the Charter Period the Vessel shall be kept 430 insured by the Owners at their expense against hull and 434 machinery and war risks under the form of policy or 432 policies attached hereto. The Owners and/orinsurers 433 shall not have any right of recovery or subrogation 434 against the Charterers on account of loss of or any 435 damage to the Vessel or her machinery of appurt 436 enances cavered by such insurance of on account of 437 payments made to discharge claims against or liabilities 438 of the Vessel or the Owners covered by such insurance 439 insurance policies shall cover the Owners and the 440 Charterers according to their respective interests 441 442 insured by the Charterers at their exponse against (b) During the Charter Period the Vessel shall be kept 443 Protection and indemnity risks (and any risks against 444 which it is compulsory to insure for the operation of the 446 Vessel, inchiding maintaining financial security in 446 accordance with sub clause 10felij in such farm as 447 the Owners shall in writing approve which approval shall 448 not be unreasonably withheld 449 fe in the event that any act of negligence of the 450 Charterers shall vitiate any of the insurance herein 451 provided, the Charterers shall pay to the Owners all 452 losses and indemnify the Owners against all claims and 453 demands which would otherwise have been covered by 454 such insurance 455 (d) The Charterers shall, subject to the approval of the 456 Owners of Owners Underwriters, effect all insured 457 repairs, and the Charterers shall undertake settlement 458 el all miscellaneous expenses in connection with such 459 ropairs as well as all insured charges, expenses and 460labilities, to the extent of coverage under the insurances 461provided for under the provisions of sub clause 14(8) 462 The Charterers to bo secured reimbursement through 463 the Owners Underwriters for such expenditures upon 464 presentation of accounts 465 (e) The Charterers to remain responsible fer and to 466 ellect repairs and settlement of costs and expenses Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.



 

 

PART II BARECON 2001 Standard Bareboat Charter 467 incurred thereby in respect of all other repairs not 468 covered by the insurances and/or not exceeding any 469 possible franchisels or deductibles provided fer in the 470 insurances 471 (f) All time used for repairs under the provisions of 472 sub clauses 14(d) and 14je) and for repairs of latent 473 defects according to Clause 3 above, including any 474 deviation, shall be for the Charterers account and shall 475 form part of the Charter Period 476 The Owners shall not be responsible for any expenses 477 as are incident to the use and operation of the Vessel 478 for such time as may be required to make such repairs 479(g)f the conditions of the above insurances pormit 480 additional insurance to be placed by the parties such 481 cover shall be limited to the amount for each party set 482 out in Box 30 and Box 31 respectively. The Owners or 483 the Charterers as the case may be shall immediately 484 furnish the other party with particulars ol any additional 485 insurance effected, including copies of any cover notes 486 er policies and the written consent of the insurers of 487 any such required insurance in any case where the 488 consent of cuch insurers is necessary 489 (h) Should the Vessel become an actual, constructive, 490 compromised or agreed total loss under the insurances 491 required under sub clause 24ja), all insurance payments 492 for such loss shall be paid to the Owners who shall 493 distribute the moneys between themselves and the 494 Charterers according to their respective interests 496 (1) the Vessel becomes an actual, constructive 496 compromised or agreed total less under the insurances 497 arranged by the Owners in accordance with sub elause 498 14 a), this Charter shall terminate as of the date of such 499 1055 500 The Charterers shall upon the request of the 501 Owners, promptly execute such documents as may be 502 required to enable the Owners to abandon the Vessel 503 to the insurers and claim a constructive totai loss 504 505 and machinery and war risks under the provisions of (k) For the purpose el insurance coverage against bull 506 sub clause 14(a),the value of the Vessel is the sur 507 indicated in Box 29. 508 (1) Notwithstanding anything contained in sub clause 509 10(0), is agreed that under the provisions of Clause 510 14 if applicable, the Owners shall keep the Vessel’s 511 Gass fully up to date with the Classification Society 5 12 indicated in 80 10 and maintain all other necessary 513 certificates in force at ali times. 514 15. Redelivery (See Clauses 41 and 42) 515 At the expiration of the Charter Period the Vessel shali 516 be redelivered by the Charterers to the Owners at a 517 safe and ice free port or place as indicated in Box 16, in 538 such ready safe berth as the Owners may direct. The 539 Charterers shall give the Owners not less than thirty 520 (30) running days preliminary notice of expected date, 523 range el ports of redelivery or port or place of redelivery 522 and not less than fourteen (14) running days definite 523 notice of expected date and port or place of redelivery. 524 Any changes thereafter in the Vessel’s position shall be 525 notified immediately to the Owners 526 The Charterers warrant that they will not permit the 527 Vessel to commence a voyage fincluding any preeeding 578 ballast voyage which cannot reasonably be expected 529 to be completed in time to allow redelivery of the Vessel 530 within the Charter Period Notwithstanding the above, 531 should the Charterers fail to redeliver the Vessel within 532 The Charter Period, the Charterers shall pay the daily 533 equivalent to the rate of hire stated in Bex 22 plus 10 534 per cent or to the market rate whichever is the higher 535 for the number of days by which the Charter Period is 6 36 exceeded. All other terma conditions and provisions of 532 this Charter shall continue to apply 538 Subject to the provisions of Clause 10, the Vessel shall 539 be redelivered to the Owners in the same or as good 540 structure, state, condition and class as that in which she 541 was delivered, fair wear and tear not affecting class 542 excepted 543 The Vessel upon redelivery shall have her survey cycles 544 up to date and trading and class certificates valid for at 545 least the number of months agreed in Box 17 546 16. Non Lien 547 The Charterers will not suffer, nor permit to be continued, 548 any lien or encumbrance incurred by them or their 549 agents, which might have priority over the title and 550 interest of the Owners in the Vessel. The Charterers 551 further agree to fasten to the Vessel in a conspicuous 552 place and to keep so fastened during the Charter Period 553 a notice reading as follows: 554 “This Vessel is the property of (name of Owners). It is 555 under charter to (name of Charterers) and by the terms 556 of the Charter Party neither the Charterers nor the 557 Master have any right, power or authority to create, incur 558 or permit to be imposed on the Vessel any lien 559 whatsoever.” 560 17. Indemnity (See Clauses 38.3, 39.14, 39.15, 39.16, 39.17, 41.4, 44, 53.1(1), 57 and 58) 563 (a) The Charterers shall indemnify the Owners against 662 any less damage or expenseinturred by the Owners 563 arising 564 by the Charterert and against any lien of whatsoever out of or in relation to the operation of the Vessel 565 nature arising out of an event eccurring during the 566 Charter Period. If the Vessel be arrested or otherwise 567 detained by reason of claims or liens arising out of her 668 operation hereunder by the Charterers, the Charterers 569 shali at their own expense take ail reasonable steps to 570 secure that within a reasonable time the Vestel is 571 released, including the provision of bail 572 Without prejudice to the generality of the foregoing the 573 Charterers agree to indemnify the Owners against al 574 consequences or liabilities arising from the Master 575 officers or agents signing Bills of Lading or other 576 documents 577 (b) if the Vessel be arrested er otherwise detained by 578 reasure a claim er claims against the Owners, the 579 Owners shall at their own expense take all reasonable 580 steps to secure that within a reasonable time the Vessel 581 is released, inelling the provision of bail 582 In such circumstances the Owners shall indemnify the 583 Charterers against any loss, damage or expense 584incurred by the Charterers (including hire paid under 585 this Charter) as a direct consequence of such arrest or 586 detention 587 18. Lien 588 The Owners to shall have a lien upon all cargoes, sub hires 589 and sub freights belonging or due to the Charterers or Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.binco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.



 

 

PART II BARECON 2001 Standard Bareboat Charter 590 any sub charterers and any Bill of Lading freight for all 591 claims under this Charter., and the Charterers to have 592 lien on the Vessel for all moneys paid in advance and 593 not earned. 594 19. Salvage 595 All salvage and towage performed by the Vessel shall 596 be for the Charterers’ benefit and the cost of repairing 597 damage occasioned thereby shall be borne by the 598 Charterers. 599 20. Wreck Removal 600 In the event of the Vessel becoming a wreck or 601 obstruction to navigation the Charterers shall indemnify 602 the Owners against any sums whatsoever which the 603 Owners shall become liable to pay and shall pay in 604 consequence of the Vessel becoming a wreck or 605 obstruction to navigation. 606 21. General Average 607 The Owners shall not contribute to General Average. 608 22. Assignment Sub Charter and Sale (See Clause 621 609 (a) The Charterers chall not assign this Charter nor 610 sub charter the Vessel on a bareheat basis except with 611 the prior consent in writing of the Owners, which shall 612 not be unreasonably withheld, and subject to such terms 613 and conditions as the Owners shall approve 614 (b) The Owners shall not sell the Vessel during the 615 currency of this Charter except with the prior written 616 consent of the Charterers, which shall not be unreason 617ably withheld and subject to the buyer accepting on 638 assignment of this Charter 619 23. Contracts of Carriage 620) (a) The Charterers are to procure that all documents 621 issued during the Charter Period evidencing the terms 622 and conditions agreed in respect of carriage of goods 623 shall contain a paramount clause incorporating any 624 legislation relating to carrier’s liability for cargo 625 compulsorily applicable in the trade; if no such legislation 626 exists, the documents shall incorporate the Hague Visby 627 Rules. The documents shall also contain the New Jason 628 Clause and the Both to Blame Collision Clause. 629) The Charterers are to procure that all passenger 630 tickets issued during the Charter Period for the carriage 631 of passengers and their luggage under this Charter shail 632 contain a paramount clause incorporating any legislation 633 relating to carrier’s liability for passengers and their 634 luggage compulsorily applicable in the trade, if no such 635 legislation exists, the passenger tickets shall incorporate 636 the Athens Convention Relating to the Carriage of 637 Passengers and their luggage by Sea, 1974, and any 638 protocol thereto 639) Delete as applicable. 640 24. Bank Guarantee 641 (Optional only to apply Bow 27 filled in) 642 The Charterers undertake to furnish before delivery al 643 the Vessel, a first class bank guarantee or bond in the 644 sum and at the place as indicated in Box 27 es guarantee 645 for full performance of their obligations under this 646 Charter. 647 25. Requisition/Acquisition 648 (a) in the event of the Requisition for Hire of the Vessel 649 by any governmental or other competent authority 650 (hereinafter referred to as “Requisition for Hire”) 651 irrespective of the date during the Charter Period when 652 length thereof and whether or not it be for an indefinite “Requisition for Hire” may occur and irrespective of the 653 654 or a limited period of time, and irrespective of whether it 655 656 Charter Period, this Charter shall not be deemed thereby may or will remain in force for the remainder of the 657 or thereupon to be frustrated or otherwise terminated 658 and the Charterers shall continue to pay the stipulated 659 hire in the manner provided by this Charter until the time 660 when the Charter would have terminated pursuant to 661 any of the provisions hereof, always provided however 662 that in the event of Requisition for Hire any Requisition 663 Hiro or compensation received or receivable by the 664 Owners shall be payable to the Charterers during the 665 remainder of the Charter Period or the period of the 666 Requisition for Hire whichever be the shorter 667 (b) in the event of the Owners being deprived of their 668 ownership in the Vessel by any Compulsory Acquisition 669 of the Vessel or requisition for title by any governmental 670 or othercompetent authority (hereinafter referred to as 671 Compulsory Acquisition” then, irrespective of the date 672 during the Charter Period when Compulsory Acqui 673 sition may occur, this Charter shall be deemed 674 terminated as of the date of such Compulsory 675 Acquisition in such event Charter Hire to bo considered 676 as earned and to be paid up to the date and time of 677 such Compulsory Acquisition 678 26. War 679 (a) Subiect to the provisions of the Financial Instruments if any or the purpose of this Clause, the words “War 680 Risks shall include any war (whether actual or 681 threatened), act of war, civil war, hostilities, revolution, 682 rebellion, civil commotion, warlike operations, the laying 683 of mines (whether actual or reported), acts of piracy, 684 acts of terrorists, acts of hostility or malicious damage, 685 blockades (whether imposed against all vessels or 686 imposed selectively against vessels of certain flags or 687 ownership, or against certain cargoes or crews of 688 otherwise howsoever), by any person, body, terrorist or 689 political group, or the Government of any state 690 whatsoever, which may be dangerous or are likely to be 691 or to become dangerous to the Vessel, her cargo, crew 692 or other persons on board the Vessel. 693 (b) The Vessel, unless the written consent of the 694 Owners be first obtained and adequate insurances are obtained (such adequacy to be deteremined by the Owners (acting reasonably)), shall not continue to or go 695 through any port, place, area or zone (whether of land 696 or sea), or any waterway or canal, where it reasonably 697 appears that the Vessel, her cargo, crew or other 698 persons on board the Vessel, in the reasonable 699 judgement of the Owners, may be, or are likely to be, 700 exposed to War Risks. Should the Vessel be within any 701 such place as aforesaid, which only becomes danger 702 ous, or is likely to be or to become dangerous, after her 703 entry into it, the Owners shall have the right to require 704 the Vessel to leave such area. 705 (c) The Vessel shall not load contraband cargo, or to 706 707 pass through any blockade, whether such blockade be imposed on all vessels, or is imposed selectively in any 708 way whatsoever against vessels of certain flags or 709 ownership, or against certain cargoes or crews or Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.



 

 

PART II BARECON 2001 Standard Bareboat Charter 710 otherwise howsoever, or to proceed to an area where 711 she shall be subject, or is likely to be subject to 712 a belligerent’s right of search and/or confiscation. 213 (d) if the insurers of the war risks insurance, when 714 Clause 14 is applicable, should require payment of 745 premiums and/or calls because pursuant to the 716 Charterers orders the Vessel is within, or is due to enter 747 and remain within, any area or areas which ere specified 738 by suck insurers as being subject to edditional premiums 718 because of War Risks, then such premiums and/or calls 720 shall be reimbursed by the Charterers to tho Owners at 221 the same time as the next payment of hire is due 722 (e) The Charterers shall have the liberty: 723 (i) to comply with all orders, directions, recommend 724 ations or advice as to departure, arrival, routes, 725 sailing in convoy, ports of call, stoppages, 726 destinations, discharge of cargo, delivery, or in any 727 other way whatsoever, which are given by the 728 Government of the Nation under whose flag the 729 Vessel sails, or any other Government, body or 730 group whatsoever acting with the power to compel 731 compliance with their orders or directions; 732 (ii) to comply with the orders, directions or recom 733 mendations of any war risks underwriters who have 734 the authority to give the same under the terms of 735 the war risks insurance; 736 (illi) to comply with the terms of any resolution of the 737 Security Council of the United Nations, any 738 directives of the European Community, the effective 739 orders of any other Supranational body which has 740 the right to issue and give the same, and with 741 national laws aimed at enforcing the same to which 742 the Owners are subject, and to obey the orders 743 and directions of those who are charged with their 744 enforcement. 745 (f) in the event of outbreak of war (whether there be e 746 declaration of war or not between any two or more 247 of the following countries the United States of America) 748 Russia, the United Kingdom, France and the People’s 749 Republic of China, () between any two or more of the 750 countries stated in Box 36 both the Owners and the 751 Charterers shall have the right to cancel this Charter, 762 whereupon the Charterers shall tedeliver the Vessel to 753 the Owners in accordance with Clause 15, if the Vessel 754 has cargo on board after discharge thereof as 755 destination, or if debarned under this Clause from 756 reaching or entering it at a near, open and safe part es 757 directed by the Owners or if the Vessel has no cargo 758 on board, at the port at which the Vessel then is or if at 7594ea at a near, open and safe port as directed by the 760 Owners in all sases hire shall continue to be paid in 761 accordance with Clause 11 and except as aforesail all 762 other provisions of this Charter shall apply until 763 redelivery the end of the Charter Period. 764 27. Commission 765 The Owners to pay a commission at the rate indicated 766 іл Вок 33 to the Brokers named in Bos 33 on any hire 767 paid under the Charter if no rate is indicated in Box 33 768 the commission to be paid by the Owners shall cover 769 the actual expenses of the Brokers and a reasonable 770 fee for their work 771 if the full hire is not paid owing to breach of che Charter 272 by either of the parties the party kable therefor shall 773 indemnify the Brokers against their loss of commission. 774 Should the parties agree to cancel the Charter, the 775 Owners shall indemnify the Brokers against any loss of 776 commission but in such ease the commission shall not 777 exceed the brokerage on one year’s hire 778 28. Termination (See Clauses 41, 42 and 47) 779(a) Chartorers Default 780 The Owners shall be entitled te withdraw the Vessel fram 781 the service of the Charterers and terminate the Charter 782 with immediate effect by written notice to the Charterers if 783 (i) the Charterers fail to pay hire in accordance with 784 Clause 11 However, where there is a failure to 785 make punctual payment of hire due to oversight 786 negligence, errors or omissions on the part of the 787 Charterers or their bankers, the Owners shall give 788 the Charterers written notice of the number of clear 789 banking days stated in Box 34(as recognised at 790 the agreed place of payment) in which to rectify 791 the failure, and when so rectified within such 792 number of days following the Owners notice, the 793 payment shall stand es regular and punctual 794 Failure by the Charterers to pay hire within the 795 number of days stated in Box 34 of their receiving 706 the Owners notice as provided herein, shall entitle 797 the Owners to withdraw the Vessel from the service 798 of the Charterers and terminate the Charter without 299 further notice) 800 () the Charterers fail to comply with the requirements of 801 (1) Clause 6 (Trading Restrictions) 802 (2) Clause 431a) (Insurance and Repairs) 803 provided that the Owners shall have the option by 804 written notice to the Charterers, to give the 805 Charterers a specified number of days grace within 806 which to reetify the failure without prejudice to the 807 Owners right to withdraw and terminale under this 808 Clause if the Charterers fail to comply with such 809 notices 810 ( the Charterers fail to rectify any failure to comply 811 with the requirements of sub clause 10(a)(i) 812 (Maintenance and Repairs) as soon as practically 813 possible after the Owners have requested them in 834 writing so to do and in any event so that the Vessel’s 815 insurance covers not prejudiced 816 (b) Owners Default 817 if the Owners shall by any act or omission be in breach 318 of their obligations under this Charter to the extent that 819 the Charterers are deprived of the use of the Vessel 820 and such breach continues for a period of fourteen (14) 821 running days after written notice thereof has been given 822 by the Charterers to the Owners, the Charterers shall 823 be entitled to terminate this Charter with immediate effect 824 by writton notice to the Owners 825 (0) Loss of Vessel 826 This Charter shall be deemed to be terminated if the 827 Vessel becomes a total loss or is declared as 828 constructive or compromised or arranged total loss For 829 the purpose of this sub clause, the Vessel shall not be 830 deemed to be lost unless she has either become an 831 actual total less or agreement has been reached with 832 her underwriters in respect of hes constructives 833 compromised or arranged total loss or if such agreement Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.



 

 

PART II BARECON 2001 Standard Bareboat Charter 834 with her underwriters is not reached it is adjudged by a $35 competent tribunal that a constructive loss of the Vessel 836 has occurred, 837 (d) Either party shali be entitled to terminate this 838 Charter with immediate effect by written notice to the 839 other party in the event of an order being made er 840 resolution passed for the winding up dissolution 841 liquidation or bankruptcy of the other party (othorwise 842 than for the purpose of reconstruction or amalgamation) 843 or if a receiver is appointed on if it suspends payment 844 ceases to carry on business or makes any special 845 arrangement or composition with its ereditors 846 (e) The termination of this Charter shall be without 847 prejudice to all rights accrued due between the parties 848 prior to the date of termination and to any claim that 849 either party might have. 850 29. Repossession (See also Clauses 41, 42 and 47) In the event the Vessel is due for redelivery pursuant to Clause 41 or Owners have made a request for redelivery of the Vessel in accordance with the applicable provisions of Clause 42.1, 851 in the event of the termination of this Charter in 852 accordance with the applicable provisions of Clause 28, 853 the Owners shall have the right to repossess the Vessel 854 from the Charterers at her current or next port of call, or 855 at a port or place convenient to them without hindrance 856 or interference by the Charterers, courts or local 857 authorities. Pending physical repossession of the Vessel 858 in accordance with this Clause 29, the Charterers shall 859 hold the Vessel as gratuitous bailee only to the Owners and the Charterers shall procure that the master and crew follow the directions of the Owners. 860 The Owners shall arrange for an authorised represent 861 ative to board the Vessel as soon as reasonably 862 practicable following the termination of the Charter. The 863 Vessel shall be deemed to be repossessed by the 864 Owners from the Charterers upon the boarding of the 865 Vessel by the Owners representative All arrangements 866 and expenses relating to the settling of wages, 867 disembarkation and repatriation of the Charterers” 868 Master, officers and crew shall be the sole responsibility 869 of the Charterers. 870 30. Dispute Resolution (See Clause 65) 871(a) This Contract shall be governed by and construed 872 in accordance with English law and any dispute arising 873 cut of or in connection with this Gentrast shall be referred 874 to arbitration in London in accordance with the Arbitration 875 Act 1996 or any statutory modification or re enactment 876 thereal save to the extent necessary to give effect to 877 the provisions of cius Clause. 878 The arbitration shall be conducted in accordance with 879 the tandon Maritime Arbitrators Association (LMAAL 880 Terms current at the time when the arbitration proceed 881 ings are commenced. 882 The reference shall be to three orbitrators A porty 883 wishing to refera dispute to arbitration shall appoint its 884 arbitrator and send notice of such appointment in writing 885 to the other party requiring the other party to appoint its 886 own arbitrator within 14 calendar days of that notice and 887 stating that it will appoint its arbitrator as sole arbitrator 888 unless the other party appoints its own arbitrator and 289 gives notice that it has done so within the 14 days 890 specified #the other party does not appoint its own 891 arbitrator and give notice that it has done se within the 892 14 days specified, the party relering a dispute to 893 arbitration may, without the requirement of any further 894 prior notice to the other party appoint its arbitrator as 895 sole arbitrator and shail advise the other party 896 897 binding on both parties as if he had been appointed by accordingly The award of a sole arbitrator shall be 898 agreement 899 Nothing herein shali prevent the parties agreeing in 900 writing to vary these provisions to provide for the 901 appointment of a sole arbitrator. 902 In cases where neither the claim nor any counterclam 903 exceeds the sum of US$50,000 for sush other sum as 904 the parties may agree) the arbitration shall be conducted 905 in accordance with the MAA Small Claims Procedure 906 current at the time when the arbitration proceedings are 907 commenced 908)(b) This Contract shall be governed by and construed 909 in accordance with Title 9 of the United States Code 910 and the Maritime Law of the United States and any 911 dispute arising out of or in connection with this Contract 912 shall be referred to three persons at New York, one to 913 be appointed by each of the parties hereto, and the third 914 by the two so chosen their decision of that of any two 915 of them shall be final and for the purposes of eeforcing 916 917 any court of competent jurisdiction The proceedings any award, judgement may be entered on an award by 938 shall be conducted in accordance with the rules of the 919 Society of Maritime Arbitrators, Inc. 920 In cases where neither the claim ner any countercisin 922 exceeds the sum of US550,000 (or such other sum 922 the parties may agree) the arbitration shall be conducted 923 in accordance with the Shortened Arbitration Prosedure 924 of the Society of Maritime Arbitrators inc current al 925 the time when the arbitration proceedings are commenced 926(cis Contract shall be governed by and construed 927 in accordance with the laws of the place mutually agreed 928 by the parties and any dispute arising out of or in 929 connection with this Contract shail be referred to 930 arbitration at a mutually agreed place, subject to the 931 procedures applicable these 932 (d) Notwithstanding (a), (b)or(c)above, the parties 933 may ogree at any time to refer to mediation any 934 difference and/or dispute arising out of or in connection 935 with this Contract. 936 in the case of a dispute in respect of which arbitration 937 has been commenced under (a), (b) ar (c) above, the 936 following sha epply 939(1) Either party may al any time and from time to time 940 elect to refer the dispute or part of the dispute to 94 mediation by service on the other party of a written 942 notice the “Mediation Notice calling on the other 943 party to agree to mediation. 944 (i) The other party shall thereupon within 14 calendar 945 days of receipt of the Mediation Notice confirm that 946 they agree to mediation, in which case the parties 947 shali thereafter agree a mediator within a further 948 14 calendar days,failing which on the application 949 of either party a mediator will be appointed promptly 950 by the Arbitration Tribunal the Tribunal or such 951 person as the Tribunal may designate for that 952 purpose The mediation shall be conducted in such 953 place and n ascordance with such procedure and Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.



 

 

PART II BARECON 2001 Standard Bareboat Charter 954 on such terms as the parties may egree or in the 955 event of disagreement, as may be set by the 956 mediater 957 (il) If the other party does not agree to mediate, that 958fect may be brought to the attention of the Tribunal 959 and may be salien into account by the Tribunal when 960 allocating the costs of the arbitration as between 963 the parties 962 (iv) The mediation shall not affect the right of either 963 party to seek such relief or take such steps as it 964 considers necessary to protect its interest. 966 (v) Either party may advise the Tribunal that they have 966 agreed to mediation. The arbitration procedure shall 967 continue during the conduct of the mediation but 968 the Tribunal may take the mediation timetable inte 969 account when setting the timetable for steps in the 970 arbitration 971 (vi) Unless otherwise agreed on specified in the 972 mediation terms, each party shall bear its own costs 973 incurred in the mediation and the parties shall share 974 equally the mediator’s costs and expenses 976 (vii) The mediation process shall be without prejudice 976 and confidential and no information or documents 977 disclosed during it shall be revealed to the Tribunal 978 axcopt to the extent that they are disclosable under 979 the law and procedure governing the arbitration 980 (Note The parties should be aware that the mediation 981 process may not necessarily interrupt time limits.) 982 (e)if Box 35 in Porn is not appropriately filled in/sub clause 983 30(a) of this Clause shall apply Sub clause 30(d) shall 984 apply in all cases. 985 Sub clouses 30(a) 30(6) and 30te) are alternatives 986 indicate alternative agreed in Box 36 987 31. Notices (See Clause 46) 988 (a) Any notice to be given by either party to the other 989 party shall be in writing and may be sent by fax, telex 990 registered on recorded mail or by personal service 991 (b) The address of the Parties for service of such 992 сомтылюation shall be as stated in Boxes a and 4 993 respectively Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.



 

 

2 (a) The Vessel shali be constructed in accordance with the Building Contract (hereafter called the Building Contractas annexed to this Charter, made betwoon the 5 Builders and the Owners and in accordance with the specifications and plans annexed thereto, such Building Contract specifications and plans having been counter PART III PROVISIONS TO APPLY FOR NEWBUILDING VESSELS ONLY (Optional, only to apply if expressly agreed and stated in Box 37) Specifications and Building Contract signed as approved by the Charterers. (b) No change shall be made in the Building Contract or 10 in the specifications or plans of the Vessel as approved by 4 the Chartevers as aforesaid without the Charterers 12 consent 13(6) The Charterers shall have the right to send their 14 representative to the Builders Yard to inspect the Vessel 15 during the course of her construction to satisfy themselves 16 that construction in in accordance with such approved 17 specifications and plans as referred to under sub clause 18(a) of this Clause 19(d) The Vesselshail be built in accordance with the 20 Building Contract and shall be of the description set out 21 therein Subject to the provisions of sub dause (Hint 22 hereunder, the Charterers shail be bound to accept the 23 Vessel from the Owners, completed and constructed in 24accordance with the Buliding Contract on the date of 25 delivery by the Builders The Charterers undertake that 26 having accepted the Wessel they will not thereafter raise 27 any claims against the Owners in respect of the Vessel’s 28 performance or specification or defects, if any 29 Nevertheless, in respect of any repairs, replacements or 30 defects which appear within the first 12 months from 31 delivery by the Builders, the Owners shall endeavour to 32 compel the Builders to repair, replace of remedy any defects 33 or to recover from the Builders any expenditure incurred in 34 carrying out such ropairs, replacements or remedies 35 However, the Owners liability to the Charterers shail be 36 limited to the extent the Owners have a valid claim against 37 the Buliders under the guarantee clause of the Building 38 39 Charterers). The Charterers shall be bound to accept such Contract (a copy whereof has been supplied to the 40 sums as the Owners are reasonably able to recover under 41 this Clause and shall make no further claim en the Owners 42 for the difference between the amount(s) so recovered and 43 the actual expenditure on repairs, replacement or 44 remedying defects or for any loss of time incurred. 45Any liquidated damages for physical defects or deficiencies 46 shall accrue to the account of the party stated in Bow4fol 47 or if not filled in shall be shared equally between the parties 48 The costs of pursuing a claim or claims against the Builders 49 under this Clause (including any liability to the Builders 50 shall be borne by the party stated in Box 41(b) or if not 51 filled in shall be shared equally between the parties 52 2 Time and Place of Delivery 53 (a) Subject to the Vessel having completed her 54 acceptance trials including trials of cargo equipment in 55 accordance with the Building Contract and specifications to the satisfaction of the Charterers, the Owners shall give 56 57 and the Charterershal take delivery of the Vessel elicat 58 when readyfor delivery and properly documented at the 59 Builders Yard or some other safe and readilyaccessible 60dock wharl or plate as may be agreed between the parties 61 hereto and the Builders Under the Building Contract the 65 62 Builders have estimated that the Vessel will be ready for 63 delivery to the Owners as therein provided but the delivery 64 date for the purpose of this Charter shall be the date when the Vessel is in fact ready for delivery by the Builders after 66 completion of trials whether that be before or after as 67 indicated in the Building Contract The Charterers shall not 68 be entitled te reluse acceptance of delivery of the Vessel 69 and upon and after suck acceptance, subject to Clause 70 1(d), the Charterers shall not be entitled to make any claim 71against the Owners in respect of any conditions 72 representations or warranties, whether express or implied, 73 as to the seaworthiness of the Vessel on in respect of delay 74 in delivery. 75(b) if for any reason other than a default by the Owners 76 under the Building Contract, the Builders become entitled 77under that Contract not to deliver the Vessel to the Owners, 78 the Owners shall upon giving to the Charterers written 79 notice of Builders becoming so entitled, be excused from 80 giving delivery of the Vessel to the Charterers and upon 81 receipt of such notice by the Charterers this Charter shall 82 cease to have elfect 83 84 the Building Contract to reject the Wessef the Owners shall (c) if for any reason the Owners became entitled under 85before exereising such right of rejection, consult the 86 Charterers and thereupon 87(the Charterers do not wish to take delivery of the Vessel 88 they shall inform the Owners within seven(7) running days 89 by notice in writing and upon receipt by the Owners of such 90 notice this Charter shall cease to have effect or 91(ii) the Charterers wish to take delivery of the Vessel 92 they may by notice in writing within seven (7) running days 93 require the Owners to negotiate with the Builders as to the 94 terms on which delivery should be taken and/or refrain from 95exercising their right to rejection and upon receipt of such 96 notice the Owners shall commence such negotiations and/ 97or take delivery of the Vessel from the Builders and deliver 98 her to the Charterers 99 (iii) in no circumstances shall the Charterers be entitled to 100 reject the Vessel unless the Owners are able to reject the 101 Vessel from the Builders 102 (iv) thir Charter terminates under sub clause (b) or (c) of 103 this Clause, the Owners shall thereafter nut be liable to the 104 Charterers for any claim under or arising out of this Charter 105 on its termination 306 (d) Any liquidated damages for delay in delivery under the 107 Building Contract and any costs incurved in pursuing a claim 108 therefor shall accrue to the account of the party stated in 109 Box 41(c) or if not filled in shali be shared equally between 110 the parties 111 3 Guarantee Works 112 net otherwise egreed, the Owners authorise the 133 Charterers to arrange for the guarantee works to be 114 performed in accordance with the building contract terms 115 and hire to continue during the period of guarantee works 116 The Charterers have to advise the Owners about the 117 performance to the extent the Owners may request 118 4. Name of Vessel 119 The name of the Vessel shall be mutually agreed between 120 the Owners and the Charterers and the Vessel shall be Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.



 

 

PART III PROVISIONS TO APPLY FOR NEWBUILDING VESSELS ONLY (Optional, only to apply if expressly agreed and stated in Box 37) 321 painted in the colours, display the funnel insignia and fly 122 the house flag as required by the Charterers 123 5.Survey on Redelivery 124 The Owners and the Charterers shall appoint surveyors 126 for the purpose of determining and agreeing in writing the 126 condition of the Vessel at the time of re delivery 127 Without prjaus 15 (Part 1), the Charteren 128 shall bear all survey expenses and all other casts, if any 129 including the cost of docking and undocking if required, 130 as well as all repali costs incurred. The Charterers shall 131 aise bear all loss of time spent in connection with any 132 docking and undocking as well es repairs, which shall be 133 paid at the rate af hire per day or pra rata Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will. constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCD at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.



 

 

PART IV HIRE/PURCHASE AGREEMENT (Optional, only to apply if expressly agreed and stated in Box 42) On expiration of this Charter and provided the Charterers 27 shall be for Sellers account 2 have fulfilled their obligations according to Part Fand 3 ar well as Part if applicable it is agreed, that on 4 payment of the final payment of hire as per Clause 11 the Charterers have purchased the Vessel with 6 everything belonging to her and the Vessel is fully paid 7 for in the following paragraphs the Owners ore referred to as the Sellers and the Charterers as the Buyers 10 The Vessel shall be delivered by the Sellers and taken over by the Buyers on expiration of the Charter The Sellers guarantee that the Vessel at the time of delivery, is free from all encumbrances and maritime 13 12 34 heas or any debts whatsoever other than those arising 16 from anything done or not done by the Buyers or any existing mortgage agreed not to be paid off by the time 17 of delivery. Should any claims, which have been incurred prior to the time of delivery be made against the Vessel 19 20 the Sellers hereby undertake to indemnify tite Buyers against all consequences of such claims to the extent it con be proved that the Sellers are responsible for such 22 claims Any taxes, notarial,consalar and other charges 23 and expenses connected with the purchase and 24 registration under Buyers flag shall be for Buyers 26 account Any taxes consular and other charges and 26 expenses connected with closing of the Sellers registe 26 In exchange for payment of the last month’s hire 29 instalment the Sellers shall furnish the Buyers withva 30 Bill of Sale duly attested and legalized, together with a 31 certificate setting out the registered encumbrances, if any On delivery of the Vessel the Sellers shall provide 33 for deletion of the Vessel from the Ship’s Register and 34 deliver a certificate of deletion to the Buyers 35 The Sellers shali at the time of delivery, hand to the Buyers all classification certificates (for hull, engines, 36 27 anchors, chains, etc, as well as all plans which moy 38 be in Sellers possession 39 40 The Wireless Installation and Nautical instruments unless on hire, shall be included in the sale without ony extra payment. 41 42 The Vessel with everything belonging to horshail be at 43 Sellers risk and expense until she is delivered to the 44 Buyers, subject to the conditions of this Contract and 45 the Vessel with everything belonging to her shall be 46 delivered and taken over as she is at the time of delivery, after which the Sellers shall have ne responsibility for 47 48 possible faults or deficiencies of any description 49 The Buyers undertake to pay for the repatriation of the 50 Master,officers and other personnel if appointed by the 51 53 Sellers to the port where the Vessel entered the Bareboot Charter as per Clause 3 (Part or to pay the equivalent 53 cost for their journey to any other place. Copyright © 2001 BIMCD. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.



 

 

PART V PROVISIONS TO APPLY FOR VESSELS REGISTERED IN A BAREBOAT CHARTER REGISTRY (Optional, only to apply if expressly agreed and stated in Box 43) 17 3 Termination of Charter by Default 2 For the purpose of this PART V, the following terms shall 3 have the meanings hereby assigned to them Definitions The Bareboat Charter Registry shall mean the registry of the State whose flag the Vassol will fly and in which 6 the Charterers are registered as the bareboat charterers 7 during the period of the Bareboat Charter 8 “The Underiving Registry shall mean the registry of the 9 state in which the Owners of the Vessel are registered 10as Owners and to which jurisdiction and control of the 13 Vessel will revert upon termination of the Bareboat 12 Charter Registration 13 2. Mortgage 14 The Vessel chartered under this Charter is financed by 15 a mortgage and the provisions of Clause 12(b)(Part 16 shall apply. 18if the Vassel chartered under this Charter is registered 19 in a Boreboat Charter Registry es stated in Box 44, and 20 if the Owners shall default in the payment of any amounts 21 due undee the mortgagels) specified in Box 28,the 22 Charterers shall if so required by the mortgagee, direct 23 the Owners to re register the Vassel in the Underlying 24 Registry as shown in Box 46 25 in the event of the Vessel being deleted from the 26Bareboat Charter Registry as stated in Box 44, due to a 27 defoult by the Owners in the payment of any amounts 28 due under the mortgagels), the Charterers shall have 29 the right to terminate this Charter forthwith and without 30 prejudice to any other claim they may have against the 31 Owners under this Charter Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.



 

EXECUTION VERSION

 

Term SOFR Amendments

 

ADDITIONAL CLAUSES TO BARECON 2001 DATED 22 JUNE 2021 AS AMENDED AND RESTATED BY 

AN AMENDMENT AND RESTATEMENT DEED DATED      25 September       2023

 

CLAUSE 32 – CHARTER PERIOD

 

32.1 The period of this Charter (the “Charter Period”) shall, subject to the terms of this Charter, continue for a period of sixty (60) months starting from the Commencement Date.

 

32.2 Notwithstanding the fact that the Charter Period shall commence on the Commencement Date, this Charter shall be:

  

(a) in full force and effect; and

 

(b) valid, binding and enforceable against the parties hereto,

 

with effect from the date hereof until the end of the Charter Period (subject to the terms of this Charter).

 

CLAUSE 33 – CANCELLATION

 

33.1 If:

  

(a) the Vessel is not delivered by the Charterers as sellers to the Owners as buyers under the MOA by the Cancelling Date (or such later date as the parties to the MOA may agree); or

 

(b) the MOA expires, is cancelled, terminated, rescinded or suspended or otherwise ceases to remain in full force and effect for any reason (in whole or in part),

 

then this Charter shall immediately terminate and be cancelled (without prejudice to 0 (Indemnities) and without the need for either the Owners or the Charterers to take any action whatsoever), provided that the Owners shall be entitled to retain all fees and expenses paid by the Charterers pursuant to 0 (Fees and Expenses) (and without prejudice to 0 (Fees and Expenses) and any clause of the MOA, if such fees have not been paid, the Charterers shall forthwith pay such fees and expenses to the Owners in accordance with 0 (Fees and Expenses)), save that if the Charter is terminated and/or the Vessel not delivered under the MOA for a reason solely related to a default of the Owners, then the Charterers shall not be obliged to pay the Arrangement Fee (and if the Arrangement Fee has already been paid at such time, the Owners shall refund the Arrangement Fee to the Charterers within a reasonable time). Any such payment by the Charterers under this Clause shall be irrevocable and unconditional and is acknowledged by the Charterers to be proportionate as to amount, having regard to the legitimate interest of the Owners, in protecting against the Owners’ risk of the Charterers failing to perform its obligations under this Charter. For the avoidance of doubt, the termination of the Charter shall not prejudice the operation of any provision of any Leasing Document which is expressed to survive the termination or cancellation of this Charter.

 

CLAUSE 34 – DELIVERY AND CHARTER OF VESSEL

 

34.1 This Charter is part of a transaction involving the sale, purchase and charter back of the Vessel and constitutes one of the Leasing Documents.

  

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34.2 The obligation of the Owners to charter the Vessel to the Charterers hereunder is subject to and conditional upon:

 

(a) no Termination Event or Potential Termination Event having occurred and being continuing on the date of this Charter and on the Commencement Date;

 

(b) the representations and warranties contained in 0 (Representations and Warranties) being true and correct on the date hereof and on the Commencement Date;

 

(c) the Delivery occurring on or before the Cancelling Date; and

 

(d) the Owners having received from the Charterers:

 

(i) on or before the Prepositioning Date, the documents or evidence set out in Part A of Schedule 2 (Conditions Precedent) in form and substance satisfactory to them; and

 

(ii) on the Commencement Date and prior to or simultaneously with the Owners executing a dated and timed copy of the protocol of delivery and acceptance evidencing delivery of the Vessel under the MOA and a dated and timed copy of the Acceptance Certificate, the documents or evidence set out in Part B of Schedule 2 (Conditions Precedent) in form and substance satisfactory to them,

 

and if any of the documents listed in sub-paragraph (d) above are not in the English language then they shall be accompanied by an English translation where required by the Owners.

 

34.3 On delivery to and acceptance by the Owners (in their capacity as buyers) of the Vessel from the Charterers (in their capacity as sellers) under the MOA, the Vessel shall be deemed to have been delivered to, and accepted without reservation by, the Charterers under this Charter and the Charterers shall become and be entitled to the possession and use of the Vessel on and subject to the terms and conditions of this Charter on the same day as the delivery date of the Vessel under the MOA.

  

34.4 On Delivery, as evidence of the commencement of the Charter Period, the Charterers shall sign and deliver to the Owners, the Acceptance Certificate. The Charterers shall be deemed to have accepted the Vessel under this Charter, and the commencement of the Charter Period having started, on Delivery even if, for whatever reason, the Acceptance Certificate is not signed.

  

34.5 The Charterers shall not be entitled for any reason whatsoever to refuse to accept delivery of the Vessel under this Charter once the Vessel has been delivered to and accepted by the Owners (in their capacity as buyers) from the Charterers (in their capacity as sellers) under the MOA, and the Owners shall not be liable for any losses, costs or expenses whatsoever or howsoever arising including without limitation, any loss of profit or any loss or otherwise:

 

(a) resulting directly or indirectly from any defect or alleged defect in the Vessel or any failure of the Vessel; or

 

(b) arising from any delay in the commencement of the Charter Period or any failure of the Charter Period to commence.

 

34.6 The Owners shall not be obliged to deliver the Vessel to the Charterers with any bunkers and unused lubricating oils and hydraulic oils and greases in storage tanks and unopened drums of the Vessel except for such items which are already on the Vessel on Delivery. The Owners shall not be responsible for the fitness, quality or quantity of any such bunkers and unused lubricating oils and hydraulic oils and greases and the Charterers shall make no claim against Owners in respect of the same.

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34.7 The Charterers shall procure receipt by the Owners of the conditions subsequent set out in Part C of Schedule 2 in a form and substance satisfactory to the Owners within the time periods permitted therein.

 

CLAUSE 35 – QUIET ENJOYMENT

 

35.1 Provided that no Potential Termination Event, Termination Event or Total Loss has occurred, the Owners hereby agree not to disturb or interfere in any way whatsoever with the Charterers’ lawful use, possession and quiet enjoyment of the Vessel during the Charter Period.

 

CLAUSE 36 – CHARTERHIRE AND ADVANCE CHARTERHIRE

 

36.1 In consideration of the Owners agreeing to charter the Vessel to the Charterers under this Charter at the request of the Charterers, the Charterers hereby irrevocably and unconditionally agree to pay to the Owners the Charterhire, the Advance Charterhire and all other amounts payable under this Charter in accordance with the terms of this Charter.

 

36.2 The Charterers shall pay to the Owners on the Commencement Date, an amount which is equal to the difference between the Purchase Price and the Financing Amount as of the Commencement Date (the “Advance Charterhire”). The Charterers shall be deemed to have paid the Advance Charterhire to the Owners on the Commencement Date by the Owners (as buyers under the MOA) setting off an amount equal to the Advance Charterhire against a corresponding amount of the Purchase Price payable by the Owners to the Charterers (as sellers) under the MOA.

 

36.3 The Advance Charterhire shall not bear interest and shall be non-refundable.

 

36.4 Following Delivery and commencing from the Commencement Date, the Charterers shall pay Charterhire in arrears in quarterly instalments on each Payment Date. Each instalment shall consist of:

 

(a) a capital element of Charterhire (the “Fixed Charterhire”) which shall be in an amount equivalent to 1/20*(Financing Amount less the Expiry Owners’ Costs); and

 

(b) a variable element of Charterhire (the “Variable Charterhire”) which shall be calculated by applying the aggregate of:

 

(i) the applicable Interest Rate for the relevant Hire Period; and

 

(ii) the Margin,

 

to the Owners’ Costs on the immediately preceding Payment Date (or, in the case of the First Payment Date only, on the Commencement Date) for the Hire Period ending on the relevant Payment Date by reference to the actual number of days elapsed in that Hire Period.

 

36.4A For the purposes of determining the Variable Charterhire:

 

(a) if no Term SOFR is available for any relevant Hire Period the applicable Reference Rate shall be the Interpolated Term SOFR for a period equal in length to that Hire Period;

 

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(b) if no Term SOFR is available for any relevant Hire Period and it is not possible to calculate the Interpolated Term SOFR, the applicable Reference Rate shall be the Historic Term SOFR;

 

(c) if paragraph (b) applies but no Historic Term SOFR is available for any relevant Hire Period, the applicable Reference Rate shall be the Interpolated Historic Term SOFR for a period equal in length to that Hire Period; and

 

(d) if paragraph (c) above applies but it is not possible to calculate the Interpolated Historic Term SOFR, there shall be no Reference Rate for that Term and Clause 37.3 shall apply for that Hire Period.

 

36.5 Charterhire shall be payable in arrears on the following dates (each a “Payment Date”):

  

(a) the first instalment of Charterhire shall be payable on the date falling three (3) months after the Commencement Date (the “First Payment Date”); and

 

(b) each subsequent instalment of Charterhire (other than the last instalment of Charterhire) shall be payable quarterly thereafter, with the final instalment of Charterhire payable on the last day of the Charter Period,

 

such that there are a total of twenty (20) Payment Dates during the Charter Period.

 

36.6 Payment of Charterhire on any Payment Date shall be made in same day available funds and received by the Owners by not later than 4.00 pm (Shanghai time). Any payment of Charterhire which is due to be made on a Payment Date which is not also a Business Day shall be made on the previous Business Day instead.

  

36.7 Time of payment of the Charterhire and any other payments by the Charterers under this Charter shall be of the essence of this Charter.

 

36.8 All payments of the Charterhire and any other moneys payable hereunder shall be made in Dollars.

 

36.9 All payments of the Charterhire and any other moneys payable hereunder shall be payable by the Charterers to the Owners’ designated bank account as the Owners may notify the Charterers in writing from time to time.

 

36.10 Payment of the Charterhire and any other amounts under this Charter shall be at the Charterers’ risk until receipt by the Owners.

 

36.11 The Vessel shall not at any time be deemed off-hire and the Charterers’ obligation to pay the Charterhire and any other amounts payable under this Charter (including but not limited to the Termination Sum) in Dollars shall be absolute and unconditional under any and all circumstances and shall not be affected by any circumstances of any nature whatsoever including but not limited to:

 

(a) (except in the case of the Advance Charterhire) any set off, counterclaim, recoupment, defence, claim or other right which the Charterers may at any time have against the Owners or any other person for any reason whatsoever including, without limitation, any act, omission or breach on the part of the Owners under this Charter or any other agreement at any time existing between the Owners and the Charterers;

 

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(b) any change, extension, indulgence or other act or omission in respect of any indebtedness or obligation of the Charterers, or any sale, exchange, release or surrender of, or other dealing in, any security for any such indebtedness or obligation;

 

(c) any title defect or encumbrance or any dispossession of the Vessel by title paramount or otherwise;

 

(d) any defect in the seaworthiness, condition, value, design, merchantability, operation or fitness for use of the Vessel or the ineligibility of the Vessel for any particular trade;

 

(e) the Total Loss or any damage to or forfeiture or court marshall’s or other sale of the Vessel if the Termination Sum or any part thereof remains due;

 

(f) any libel, attachment, levy, detention, sequestration or taking into custody of the Vessel or any restriction or prevention of or interference with or interruption or cessation in, the use or possession thereof by the Charterers;

 

(g) any insolvency, bankruptcy, reorganization, arrangement, readjustment, dissolution, liquidation or similar proceedings by or against the Charterers and any other Obligors;

 

(h) any invalidity, unenforceability, lack of due authorization or other defects, or any failure or delay in performing or complying with any of the terms and provisions of this Charter or any of the Leasing Documents by any party to this Charter or any other person;

 

(i) any enforcement or attempted enforcement by the Owners of their rights under this Charter or any of the Leasing Documents executed or to be executed pursuant to this Charter;

 

(j) any loss of use of the Vessel due to deficiency or default or strike of officers or crew, fire, breakdown, damage, accident, defective cargo or any other cause which would or might but for this provision have the effect of terminating or in any way affecting any obligation of the Charterers under this Charter; or

 

(k) any prevention, delay, deviation or disruption in the use of the Vessel resulting from the wide outbreak of any viruses (including the 2019 novel coronavirus), including but not limited to those caused by:

 

(i) closure of ports;

 

(ii) prohibitions or restrictions against the Vessel calling at or passing through certain ports;

 

(iii) restriction in the movement of personnel and/or shortage of labour affecting the operation of the Vessel or the operation of the ports (including stevedoring operations);

 

(iv) quarantine regulations affecting the Vessel, its cargo, the crew members or relevant port personnel;

 

(v) fumigation or cleaning of the Vessel; or

 

(vi) any claims raised by any sub-charterer or manager of the Vessel that a force majeure event or termination event (or any other analogous event howsoever called) has occurred under the relevant charter agreement or management agreement (as the case may be) of the Vessel as a result of the outbreak of such viruses.

 

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Nothing contained in this Section 36.11 shall be deemed to hinder or prevent the Charterers from pursuing any claim the Charterers may have at law against the Owner for damages for the Owner’s breach of its express obligations under this Charter.

 

36.12 All stamp duty, value added tax (for the avoidance of doubt, including without limitation, goods and services tax), withholding or other taxes and import and export duties and all other similar types of charges which may be levied or assessed on or in connection with:

 

(a) the operation of this Charter in respect of the hire and all other payments to be made pursuant to this Charter and the remittance thereof to the Owners; and

 

(b) the import, export, purchase, delivery and re-delivery of the Vessel,

 

shall be borne by the Charterers (for the avoidance of doubt, the above excludes any income tax or any tax arising from the Owners’ shares by competent tax authorities in their domicile, which shall be borne by the Owners). The Charterers shall pay, if applicable, value added tax and other similar tax levied on any Charterhire and other payments payable under this Charter by addition to, and at the time of payment of, such amounts.

 

CLAUSE 37 – CHANGES TO INTEREST RATE, DEFAULT INTEREST

 

37.1 If, before the Reporting Time, the Owners determine (which determination shall be conclusive and binding) that their cost of funds relating to the then prevailing Owners’ Costs or any part thereof would be in excess of the Market Disruption Rate, the the Owners shall promptly notify the Charterers accordingly.

 

37.2 Immediately following the notification referred to in Clause 37.1 above, if the Owners and the Charterers so require, the Owners and the Charterers, shall negotiate in good faith (for a period not more than thirty (30) days) with a view to agreeing upon a substitute or alternative basis for determining the Interest Rate for that Hire Period. Subject to Clause 37.3, any substitute or alternative basis agreed pursuant to this Clause shall, with the prior written consent of the Parties, be binding on the Parties.

 

37.3 If:

 

(a) this Clause 37.3 applies pursuant to Clause 36.4A or Clause 37.1;

 

(b) a substitute or alternative basis is not so requested and/agreed pursuant to Clause 37.2 above; or

 

(c) the amendment or waiver to the terms of the Leasing Documents is not so agreed pursuant to Clause 37.4,

 

the applicable Interest Rate shall be the rate per annum which is the sum of:

 

(i) the Margin; and

 

(ii) the cost of funds certified by the Owners (expressed as an annual rate of interest) relating to the Owners’ Costs or any part thereof during the relevant Hire Period (as reasonably determined by the Owners),

 

provided that if the rate pursuant to paragraph (c)(ii) above is less than zero, the relevant rate shall be deemed to be zero.

 

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If this Clause 37.3 applies pursuant to Clause 37.1 and the Owners do not notify a Funding Rate to the Charterers by the Reporting Time, the Owners’ cost of funds relating to that portion of the Owners’ Costs for that Hire Period shall be deemed, for the purposes of paragraph (c)(ii) above, to be the Market Disruption Rate.

 

37.4 On or at any time after the occurrence of a Published Rate Replacement Event, the Owners are entitled to make any amendment or waiver to the terms of the Leasing Documents (at the Charterers’ cost) which relates to:

 

(a) providing for the use of a Replacement Reference Rate in relation to Dollars in place of (or in addition to) that Published Rate; and

 

(b)

 

(i) aligning any provision of any Leasing Document to the use of that Replacement Reference Rate;

 

(ii) enabling that Replacement Reference Rate to be used for the calculation of the Interest Rate under this Charter (including, without limitation, any consequential changes required to enable that Replacement Reference Rate to be used for the purposes of this Charter);

 

(iii) implementing market conventions applicable to that Replacement Reference Rate;

 

(iv) providing for appropriate fallback (and market disruption) provisions for that Replacement Reference Rate; or

 

(v) adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Reference Rate (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation),

 

and pending any such amendment or waiver and the Replacement Reference Rate being utilised under the Leasing Documents to calculate the Interest rate, Clause 37.3 shall apply to the calculation of the Interest Rate.

 

37.5 If the Charterers fail to make any payment due under this Charter on the due date, they shall pay additional interest on such late payment at a rate which is equal to two per cent. (2%) per annum above the aggregate of (i) the applicable Interest Rate for the relevant Hire Period and (ii)  the Margin which shall apply prior to, during or following Delivery and shall accrue on a daily basis from the date on which such payment became due up to and excluding the date of payment thereof, and the Charterers and the Owners agree that such default rate is proportionate as to amount, having regard to the legitimate interest of the Owners, in protecting against the Owners’ risk of the Charterers failing to perform its obligations under this Charter.

 

37.6 All interest (including default interest) and any other payments under this Charter which are of an annual or periodic nature shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a three hundred and sixty (360) days’ year.

 

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CLAUSE 38 – POSSESSION OF VESSEL

 

38.1 The Charterers shall not, without the prior written consent of the Owners, assign, mortgage or pledge the Vessel or any interest therein and shall not permit the creation or existence of any Security Interest thereon (including for any monies paid in advance and not earned, and for any claims for damages arising from any breach by the Owners of this Charter and other amounts due to the Charterers under this Charter) except for the Permitted Security Interests.

  

38.2 The Charterers shall promptly notify any party (including without limitation, any sub-charterer) (as the Owners may request) in writing that the Vessel is the property of the Owners and the Charterers shall provide the Owners with a copy of such written notification.

 

38.3 If the Vessel is arrested, seized, impounded, forfeited, detained or taken out of their possession or control (whether or not pursuant to any distress, execution or other legal process), the Charterers shall procure the immediate release of the Vessel (whether by providing bail or procuring the provision of security or otherwise do such lawful things as the circumstances may require) and shall immediately notify the Owners of such event and shall indemnify the Owners against all documented losses, costs or charges incurred by the Owners by reason thereof in re-taking possession or otherwise in re-acquiring the Vessel.

 

38.4 The Charterers shall pay and discharge or cause any sub-charterer of the Vessel to pay and discharge all obligations and liabilities whatsoever which have given or may give rise to liens on or claims enforceable against the Vessel. The Charterers shall take all reasonable steps to prevent (and shall procure that a sub-charterer shall take all steps to prevent) an arrest of the Vessel.

 

CLAUSE 39 – INSURANCE

 

39.1 The Charterers shall procure that insurances for the Vessel are effected:

  

(a) in Dollars;

 

(b) in the case of fire and usual hull and machinery, marine risks and war risks (including blocking and trapping), on an agreed value basis of at least the higher of (i) one hundred per cent (100%) of then applicable Fair Market Value of the Vessel and (ii) one hundred and twenty per cent (120%) of the then prevailing Owners’ Costs;

 

(c) in the case of oil pollution liability risks, for an aggregate amount equal to the higher of (i) US$1,000,000,000 or (ii) the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine insurance market;

 

(d) in the case of protection and indemnity risks, in respect of the full tonnage of the Vessel and with a protection and indemnity club which is a member of the International Group of Protection and Indemnity Clubs;

 

(e) through brokers approved by the Owners and with first class international insurers and/or underwriters acceptable to the Owners and having a Standard & Poor’s rating of BBB+ or above, a Moody’s rating of A or above or an AM Best rating of A- or above or, in the case of war risks, through a protection and indemnity club which meets the requirements of paragraph (d) above; and

 

(f) otherwise on terms and in form acceptable to the Owners.

 

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39.2 In addition to the terms set out in Clause 13(a) (Insurance and Repairs), the Charterers shall procure that the Obligatory Insurances shall:

  

(a) subject always to paragraph (b), name the Owners and the Charterers as the only named assureds unless the interest of every other named assured or co-assured is limited:

 

(i) in respect of any Obligatory Insurances for hull and machinery and war risks;

 

(A) to any provable out-of-pocket expenses that they have incurred and which form part of any recoverable claim on underwriters; and

 

(B) to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against them); and

 

(ii) in respect of any Obligatory Insurances for protection and indemnity risks, to any recoveries they are entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against them,

 

and every other named assured or co-assured has undertaken in writing to the Owners or the Owners’ Financiers (if any) (in such form as they may require) that any deductible shall be apportioned between the Charterers and every other named assured or co-assured (save for the Owners or the Owners’ Financiers (if any)) in proportion to the gross claims made by or paid to each of them (provided that in the event they do not agree to this, the Charterers agree that they shall be responsible for bearing such deductible portion) and that they shall do all things necessary and provide all documents, evidence and information reasonably required to enable the Owners and the Owners’ Financiers (if any) in accordance with the terms of the loss payable clause, to collect or recover any moneys which at any time become payable in respect of the Obligatory Insurances;

 

(b) whenever the Owners require in respect of any Owners’ Financiers:

 

(i) in respect of fire and other usual marine risks and war risks, name (or be amended to name) the same as additional named assured for their rights and interests, warranted no operational interest and with full waiver of rights of subrogation against such Owners’ Financier, but without such financiers thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;

 

(ii) in relation to protection and indemnity risks, name (or be amended to name) the same as additional insured or co-assured for their rights and interests to the extent permissible under the relevant protection and indemnity club rules; and

 

(iii) name the Owners’ Financiers (if any) and the Owners as respectively the first ranking loss payee and the second ranking loss payee (and in the absence of any Owners’ Financiers, the Owners as first ranking loss payee) in accordance with the terms of the relevant loss payable clauses approved by the Owners’ Financiers and the Owners with such directions for payment in accordance with the terms of such relevant loss payable clause, as the Owners and the Owners’ Financiers (if any) may specify;

 

(c) provide that all payments by or on behalf of the insurers under the Obligatory Insurances to the Owners and/or the Owners’ Financiers (as applicable) shall be made without set-off, counterclaim, deduction or condition whatsoever;

 

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(d) provide that such Obligatory Insurances shall be primary without right of contribution from other insurances which may be carried by the Owners or the Owners’ Financiers (if any);

 

(e) provide that the Owners and/or the Owners’ Financiers (if any) may make proof of loss if the Charterers fail to do so; and

 

(f) provide that if any Obligatory Insurance is cancelled, or if any substantial change is made in the coverage which adversely affects the interest of the Owners and/or the Owners’ Financiers (if any), or if any Obligatory Insurance is allowed to lapse for non-payment of premium, such cancellation, change or lapse shall not be effective with respect to the Owners and/or the Owners’ Financiers (if any) for thirty (30) days after receipt by the Owners and/or the Owners’ Financiers (if any) of prior written notice from the insurers of such cancellation, change or lapse.

 

39.3 The Charterers shall:

 

(a) at least ten (10) days prior to Delivery (or such shorter period agreed by the parties), notify in writing the Owners of the terms and conditions of all Insurances;

 

(b) at least seven (7) days before the expiry of any Obligatory Insurance or otherwise before the change of appointment of any brokers (or other insurers) and any protection and indemnity or war risks association through which Obligatory Insurances are taken from time to time pursuant to this 0 (Insurance), notify the Owners of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom the Charterers propose to renew or obtain that Obligatory Insurance and of the proposed terms of such renewed or new insurance cover and obtain the Owners’ approval to such matters;

 

(c) at least two (2) days before the expiry of any Obligatory Insurance, procure that such Obligatory Insurance is renewed or to be renewed on its expiry date in accordance with the provisions of this Charter;

 

(d) procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal or the effective date of the new insurance and protection and indemnity cover notify the Owners in writing of the terms and conditions of the renewal; and

 

(e) as soon as practicable after the expiry of any Obligatory Insurance and within thirty (30) days after such expiry, deliver to the Owners a letter of undertaking as required by this Charter in respect of such Insurances for the Vessel as renewed pursuant to Clause 39.3 together with copies of the relevant policies or cover notes or entry certificates duly endorsed with the interest of the Owners and/or the Owners’ Financiers (if any).

 

39.4 The Charterers shall ensure that all insurance companies and/or underwriters, and/or insurance brokers (if any) provide the Owners with copies (or upon the Owners’ request, originals) of policies, cover notes and certificates of entry relating to the Obligatory Insurances which they are to effect or renew and letter or letters of undertaking in a form required by the Owners or the Owners’ Financiers (if any) and including undertakings by the insurance companies and/or underwriters that:

 

(a) they will have endorsed on each policy, immediately upon issuance, a loss payable clause and a notice of assignment complying with the provisions of this Charter and the Financial Instruments;

 

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(b) they will hold the benefit of such policies and such insurances, to the order of the Owners and/or the Owners’ Financiers (if any) and/or such other party in accordance with the said loss payable clause;

 

(c) they will advise the Owners and the Owners’ Financiers (if any) promptly of any material change to the terms of the Obligatory Insurances of which they are aware;

 

(d) they will notify the Owners and the Owners’ Financiers (if any) not less than fourteen (14) days before the expiry of the Obligatory Insurances, in the event of their not having received notice of renewal instructions from the Charterers and, in the event of their receiving instructions to renew, they will promptly notify the Owners and the Owners’ Financiers (if any) of the terms of the instructions; and

 

(e) if any of the Obligatory Insurances form part of any fleet cover, the Charterers shall procure that the insurance broker(s), or leading insurer, as the case may be, undertakes to the Owners and the Owners’ Financiers (if any) that such insurance broker or insurer will not set off against any sum recoverable in respect of a claim relating to the Vessel under such Obligatory Insurances any premiums due in respect of any other vessel under any fleet cover of which the Vessel forms a part or any premium due for other insurances, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums, and they will not cancel such Obligatory Insurances by reason of non-payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of the Vessel forthwith upon being so requested by the Owners or the Owners’ Financiers (if any) and where practicable.

 

39.5 The Charterers shall ensure that any protection and indemnity and/or war risks associations in which the Vessel is entered provides the Owners and the Owners’ Financiers (if any) with:

 

(a) a copy of the certificate of entry for the Vessel as soon as such certificate of entry is issued; and

 

(b) a copy of the letter or letters of undertaking in such form as may be required by the Owners or the Owners’ Financiers (if any) or in such association’s standard form.

 

39.6 The Charterers shall ensure that all policies relating to the Obligatory Insurances are deposited with the approved brokers (if any) through which the insurances are effected or renewed.

 

39.7 The Charterers shall procure that all premiums or other sums payable in respect of the Obligatory Insurances are punctually paid.

 

39.8 The Charterers shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.

 

39.9 The Charterers shall neither do nor omit to do (nor permit to be done or not to be done) any act or thing which would or might render any Obligatory Insurance invalid, void, voidable or unenforceable or render any sum payable under an Obligatory Insurance repayable in whole or in part and, in particular:

 

(a) the Charterers shall procure that all necessary action is taken and all requirements are complied with which may from time to time be applicable to the Obligatory Insurances, and (without limiting the obligations contained in this Clause) ensure that the Obligatory Insurances are not made subject to any exclusions or qualifications to which the Owners have not given their prior approval (unless such exclusions or qualifications are made in accordance with the rules of a protection and indemnity association which is a member of the International Group of Protection and Indemnity Clubs);

 

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(b) the Charterers shall not make or permit any changes relating to the classification or the classification society of the Vessel or, subject to procuring the provision of a replacement manager’s undertaking in substantially the same form as the Manager’s Undertaking, any changes to the manager or operator of the Vessel unless such changes have, if required, first been approved by the underwriters of the Obligatory Insurances and the Owners or the Owners’ Financiers (if any);

 

(c) the Charterers shall procure that all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Vessel is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation) are made and the Charterers shall promptly provide the Owners with copies of such declarations and a copy of its valid certificate of financial responsibility; and

 

(d) the Charterers shall not employ the Vessel, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the Obligatory Insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.

 

39.10 The Charterers shall not make or agree to any material alteration to the terms of any Obligatory Insurance nor waive any right relating to any Obligatory Insurance without the prior written consent of the Owners.

 

39.11 The Charterers shall not settle, compromise or abandon any claim under any Obligatory Insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all documents, evidence and information to enable the Owners to collect or recover any moneys which at any time become payable in respect of the Obligatory Insurances.

 

39.12 The Charterers shall provide the Owners with copies of all communications between the Charterers and:

 

(a) the approved brokers;

 

(b) the approved protection and indemnity and/or war risks associations; and

 

(c) the approved insurers and/or underwriters, which relate directly or indirectly to:

 

(i) prior to the occurrence of a continuing Termination Event, a Major Casualty or a Total Loss; and

 

(ii) at any time after the occurrence of a Termination Event and while it is continuing, any material communications whatsoever relating to the insurances of the Vessel.

 

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39.13 The Charterers shall promptly provide the Owners (or any persons which they may designate) with any information which the Owners may request for the purpose of:

 

(a) obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the Insurances (including but not limited to the report obtained under Clause 39.16); or

 

(b) effecting, maintaining or renewing any such insurances as are referred to in Clause 13(a) (Insurance and Repairs) or this 0 or dealing with or considering any matters relating to any such insurances;

 

39.14 The Charterers shall upon demand fully indemnify the Owners (including if requested by the Owners, make direct payment to the relevant insurer or broker for the same) in respect of all premiums and other expenses which are incurred by:

 

(a) the Owners in connection with or with a view to effecting, maintaining or renewing an innocent owners interest insurance and an innocent owners additional perils insurance or any similar protective shipowner insurance that is taken out in respect of the Vessel; and/or

 

(b) the Owners’ Financiers (if any) in connection with or with a view to effecting, maintaining or renewing a mortgagee’s interest insurance, a mortgagee’s additional perils insurance, all protection and indemnity insurance that is taken out in respect of the Vessel,

 

in each case as referred to in paragraphs (a) and (b) above, in such an amount as the Owners consider reasonable and on such other terms, through such insurers and generally in such manner as the Owners or the Owners’ Financiers (as the case may be) may from time to time consider appropriate.

 

39.15 The Charterers shall be solely responsible for and indemnify the Owners in respect of all loss or damage to the Vessel (insofar as the Owners shall not be reimbursed by the proceeds of any insurance in respect thereof) however caused occurring at any time or times before physical possession thereof is retaken by the Owners, with only reasonable wear and tear to the Vessel excepted.

 

39.16 The Charterers shall reimburse or indemnify the Owners for any expenses reasonably incurred by the Owners in obtaining a detailed report signed by an independent firm of marine insurance brokers approved by the Owners dealing with the Obligatory Insurances and stating the opinion of such firm as to the adequacy of the Obligatory Insurances:

 

(a) when an agreed form of such detailed report satisfactory to the Owners is obtained as a condition precedent requirement under Part A of Schedule 2 (Conditions Precedent) of this Charter;

 

(b) when the Owners procure the issuance of such detailed report no more than once every calendar year, unless a Termination Event has occurred in which case such reports may be procured at the Charterer’s cost at any such time; and

 

(c) further from time to time upon the Owners’ demand where, in the Owners’ opinion, at any time during the Charter Period there has been a material change in the terms of the Insurances and/or a change in the circumstances which would materially adversely affect the adequacy of the Obligatory Insurances.

 

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39.17 The Charterers shall:

 

(a) keep the Vessel insured at their expense against such other risks (not including loss of hire or earnings risks) which the Owners and the Owners’ Financiers (if any) consider reasonable for a prudent shipowner or operator to insure against for trading, management, operational and/or safety purposes at the relevant time (as notified by the Owners) and which risks are, at that time, generally insured against as market practice by owners or operators of vessels similar to the Vessel and having regard to the availability of such cover in the insurance market at that time; and

 

(b) upon demand fully indemnify the Owners in respect of all premiums and other expenses incurred by the Owners in respect of any other insurances which the Owners deem necessary (acting reasonably) and takes out in respect of the Vessel.

 

CLAUSE 40 – WARRANTIES RELATING TO VESSEL

 

40.1 It is expressly agreed and acknowledged that the Owners are not the manufacturer or original supplier of the Vessel but that the Owners (in their capacity as buyers) have purchased the Vessel from the Charterers (in their capacity as sellers) pursuant to the MOA at the request of the Charterers, for the purpose of then chartering the Vessel to the Charterers hereunder and that no condition, term, warranty or representation of any kind is or has been given to the Charterers by or on behalf of the Owners in respect of the Vessel (or any part thereof).

 

40.2 All conditions, terms or warranties express or implied by the law relating to the specifications, quality, description, merchantability or fitness for any purpose of the Vessel (or any part thereof) or otherwise are hereby expressly excluded.

 

40.3 The Charterers agree and acknowledge that the Owners shall not be liable for any claim, loss, damage, expense or other liability of any kind or nature caused directly or indirectly by the Vessel or by any inadequacy thereof or the use or performance thereof or any repairs thereto or servicing thereof and the Charterers shall not by reason thereof be released from any liability to pay any Charterhire or other payment due under this Charter.

 

CLAUSE 41 – TERMINATION AND REDELIVERY

 

41.1 Upon termination of the leasing of the Vessel under this Charter pursuant to Clause 47.2, the Charterers shall be obliged to pay the Owners the Termination Sum on the Termination Date and it is hereby agreed by the parties hereto that:

 

(a) without prejudice to Clause 42.2, the obligation to pay the Termination Sum is a continuing obligation and shall survive the termination of the leasing of the Vessel under this Charter and shall continue in full force and effect until irrevocably and unconditionally paid in full;

 

(b) payment of the Termination Sum is deemed to be proportionate as to amount, having regard to the legitimate interest of the Owners, in protecting against the Owners’ risk of the Charterers failing to perform its obligations under this Charter; and

 

(c) the Termination Sum shall, depending on the nature of the Termination Event(s) on the basis of which the Owners serve a Termination Notice, be either an obligation to pay damages following acceptance by the Owners of a breach of condition by the Charterers or an obligation to pay an agreed sum in specified circumstances which do not involve a breach of contract by the Charterers.

 

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41.2 If the Charterers fail to make any payment of the Termination Sum on the Termination Date, Clause 37.5 shall apply and the Owners shall be entitled to exercise their rights under 0.

 

41.3 Concurrently with the unconditional and irrevocable payment of the Termination Sum in full pursuant to the terms of this Charter, this Charter shall terminate and the Owners shall (save in the event of Total Loss or in the event that the Vessel has been sold or contracted to be sold pursuant to 0), at the cost of the Charterers, transfer the legal and beneficial ownership of the Vessel on an “as is where is” basis to the Charterers or their nominees free from all mortgages, encumbrances, liens, debts or any claims whatsoever incurred or permitted by the Owners (save for those liens, encumbrances and debts incurred by the Charterers or arising out of or in connection with this Charter), and shall execute a bill of sale and a protocol of delivery and acceptance evidencing the same and such sale shall be completed otherwise in accordance with Clause 56.1(a) and 56.1(b).

 

41.4 The Charterers hereby undertake to indemnify the Owners against any documented claims incurred in relation to the Vessel prior to such transfer of ownership. Any taxes, notarial, consular and other costs, charges and expenses connected with closing of the Owners’ register shall be for the Charterers’ account.

 

41.5 On natural expiration of this Charter, unless the Purchase Option Price is paid by the Charterers in accordance with 0, the Charterers shall re-deliver the Vessel to the Owners in accordance with Clause 41.6 and shall ensure that they have fulfilled their obligations under this Charter and made payment of all Charterhire and all other moneys pursuant to the terms of this Charter. In such case, the Charterers shall give the Owners not less than 20 running days’ preliminary notice of expected date and port or place of redelivery and not less than 3 running days’ definite notice of expected date and port or place of redelivery. Any changes thereafter in the Vessel’s position shall be notified immediately to the Owners.

 

41.6 If the Charterers are required to redeliver the Vessel to the Owners pursuant to the terms of this Charter, the Vessel shall be redelivered and taken over safely afloat at a safe and accessible berth or anchorage in such location as the Owners may require (which, for the avoidance of doubt, shall exclude any war listed area declared by the Joint War Committee). The Charterers shall ensure that, at the time of redelivery to the Owners, the Vessel:

 

(a) be in an equivalent class as she was as at the Commencement Date and without any recommendations or conditions and with valid, unextended certificates for not less than three (3) months and free of average damage affecting the Vessel’s classification and in the same or as good structure, state, condition and classification as that in which she was deemed on the Commencement Date, fair wear and tear not affecting the Vessel’s classification excepted;

  

(b) has passed her 5-year special survey (if applicable), and subsequent second intermediate surveys and drydock (if applicable) at the Charterers’ time and expense without any recommendations or conditions:

 

(i) to the satisfaction of the Approved Classification Society; and

 

(ii) in the case of the 5-year special survey, to the reasonable satisfaction of an Owners’ Surveyor appointed at the cost of the Charterers;

 

(c) has her survey cycles up-to-date and trading and class certificate valid for at least the number of months agreed in Box 17;

 

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(d) be re-delivered to the Owners together with all spare parts and spare equipment as were on board at the time of Delivery, and any such spare parts and spare equipment on board at the time of re-delivery shall be taken over by the Owners free of charge;

 

(e) be free of any cargo and Security Interest (save for the Security Interests granted pursuant to the Financial Instruments, if any);

 

(f) be free of any crew and officers unless otherwise instructed by the Owners;

 

(g) be free of any charter or other employment (unless the Owners wish to retain the continuance of any prevailing charter or as otherwise agreed by the Owners in their absolute discretion); and

 

(h) have such amount of bunkers on board the Vessel as would be sufficient to enable the Vessel to sail to the nearest bunker port in compliance with all bunkering fuel content regulations then applicable in such place of redelivery.

 

41.7 The Charterers warrant that they will not permit (or request any sub-charterer not to) the Vessel to commence a voyage (including any preceding ballast voyage) which cannot reasonably be expected to be completed in time to allow redelivery of the Vessel within any time period required by this 0 (Termination and Redelivery). Notwithstanding the above, should the Charterers fail to redeliver the Vessel within any time period required by this 0 (Termination and Redelivery), the Charterers shall pay the daily equivalent to the rate of Charterhire plus five per cent. (5%) or to the then applicable BCI rate, whichever is the higher, for the number of days by which the Charter Period is exceeded.

 

41.8 If the Charterers are required to redeliver the Vessel to the Owners under the terms of this Charter, the Owners shall be entitled to appoint surveyors (the “Owners’ Surveyor”) (but at Charterers’ cost) for the purpose of determining and agreeing in writing the condition of the Vessel at the time of such redelivery. The Charterers shall provide the Owners’ Surveyor with all such facilities and access to the Vessel as may be required to enable the Owners’ Surveyor to conduct its survey of the Vessel and shall take all such actions as may be reasonably recommended by the Owners’ Surveyor to ensure that the Vessel shall be redelivered in accordance with Clause 41.6.

 

41.9 The Owners shall not be obliged to accept redelivery of the Vessel until the Owners are reasonably satisfied that all conditions for the redelivery of the Vessel under this Charter are met, and the Vessel shall (if the redelivery is at the end of the Charter Period) continue to be on-hire under the terms of this Charter until such redelivery. The Owners reserve all rights to recover from the Charterers any costs, expense and/or liabilities incurred or suffered by them (including without limitation, the costs of any repairs which may be required to restore the Vessel to the condition required by Clause 41.6 as a result of the Vessel not being redelivered in accordance with the terms of this Charter.

 

41.10 The Owners shall, at the time of the redelivery of the Vessel, take over all bunkers, lubricating oil, unbroached provisions, paints, ropes, other consumable stores and spare parts in the Vessel at no cost to the Owners.

 

CLAUSE 42 – SALE OF VESSEL BY THE OWNERS IN THE EVENT OF NON-PAYMENT OF TERMINATION SUM

 

42.1 The Charterers agree that should the Termination Sum not be paid on the Termination Date:

 

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(a) save as required to comply with this Clause 42.1, the Charterers’ right to possess and operate the Vessel shall immediately cease and (without in any way affecting the Charterers’ obligation to pay the Charterer the Termination Sum and comply with its other obligations under this Charter) the Charterers shall hold the Vessel as gratuitous bailee only to the Owners, the Charterers shall procure that the master and crew follow the orders and directions of the Owners and the Charterers shall, upon the Owners’ request (at Owners’ sole discretion), be obliged to immediately (and at the Charterers’ own cost) redeliver the Vessel to the Owners at such ready and nearest safe port or location as the Owners may require and for the avoidance of doubt, any such redelivery shall not extinguish the Owners’ right to recover the Termination Sum from the Charterers under this Charter;

 

(b) the Owners shall be entitled (at Owners’ sole discretion) to operate the Vessel as they may require and may create whatsoever interests thereon, including without limitation charterparties or any other form of employment contracts provided that the Earnings of the Vessel during such period less its operational expenses (the “Net Trading Proceeds”) shall be applied against the Termination Sum and any other amounts payable under the Leasing Documents pursuant to 0 provided that if such use of the Vessel results in the Owners suffering a loss then such losses shall be included in the indemnities contained in 0 and be added to the Termination Sum; and

 

(c) the Owners shall be entitled (at Owners’ sole discretion) to immediately thereafter sell the Vessel to any person on such terms as they deem fit, subject to the right of the Charterers to have a period of 45 days from the Termination Date (the “Nomination Period”) to first nominate or identify a purchaser for the Vessel (a “Nominated Purchaser”) and the Owners shall sell the Vessel to such Nominated Purchaser subject to all of the following conditions being satisfied:

 

(i) the Nominated Purchaser is acceptable to the Owners (such acceptability not to be unreasonably withheld or delayed); and

 

(ii) the price to be paid by the Nominated Purchaser (after deducting any commissions, taxes and other costs of sale) is equal to or more than the applicable Termination Sum (unless otherwise agreed by the Owners in their absolute discretion) unless the shortfall is paid by any Obligor or member of the Group on or before such sale,

 

and any net sale proceeds (after deducting all fees, taxes, disbursements and any other documented costs and expenses incurred by the Owners in connection with such sale) (the “Net Sales Proceeds”) derived from any such sale to a Nominated Purchaser or any other person shall be applied towards reduction of the Termination Sum in accordance with 0 (General Application of Proceeds). If the Net Sales Proceeds are not sufficient to settle the Termination Sum in full, the Charterers shall remain liable to pay the shortfall and default interest shall continue to accrue on the unpaid portion of the Termination Sum in accordance with Clause 37.5.

 

42.2 Notwithstanding Clause 42.1, the Owners may, by written notice to the Charterers at any time after the expiry of the Nomination Period, elect to retain the Vessel instead of selling the Vessel instead of selling the Vessel under Clause 42.1(c) above (with such option to elect to retain the Vessel to take effect from such date as they may nominate after the Termination Date (regardless of date of the notice)), and in doing so, the Owners shall first obtain the Fair Market Value of the Vessel (after deducting any commissions, taxes and costs which would be likely to be incurred in connection with a sale of the Vessel) and if the Fair Market Value (less such deductions) of the Vessel as at the date of such nomination is less than the Termination Sum as at such date, the Charterers shall immediately pay the difference to the Owners upon the Owners’ demand. If the Fair Market Value of the Vessel (subject to the aforesaid deductions) exceeds the Termination Sum as at such date, the Owners shall within twenty five days (of the date of the notice) pay the difference to the Charterers.

 

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CLAUSE 43 – TOTAL LOSS

 

43.1 Throughout the Charter Period, the Charterer shall bear the full risk of any Total Loss of or any other damage to the Vessel howsoever arising. If the Vessel becomes a Total Loss after Delivery, the Charterer shall, subject to Clause 43.2, pay the Termination Sum to the Owners on the Total Loss Payment Date. Upon such receipt by the Owners of the Termination Sum, this Charter shall terminate (without prejudice to any provision of this Charter expressed to survive termination) but until such receipt, the Charterers shall remain liable to make all payments of Charterhire and all other amounts to the Owners under this Charter, notwithstanding that the Vessel has become a Total Loss.

 

43.2 Any Total Loss Proceeds unconditionally received by the Owners (or the Owners’ Financiers in accordance with the terms of the relevant loss payable clause) shall be applied in accordance with 0 and shall satisfy the obligation of the Charterers to pay the Termination Sum to the extent received by the Owners or the Owners’ Financiers in accordance with the terms of the relevant loss payable clause). The obligation of the Charterers to pay the Termination Sum shall remain unaffected and exist regardless of whether any of the insurers have agreed or refused to meet or has disputed in good faith, the claim for Total Loss.

 

43.3 If the Total Loss Proceeds unconditionally received by the Owners or the Owners’ Financiers in accordance with the terms of the relevant loss payable clause) are less than the Termination Sum, the Charterers shall pay such shortfall to the Owner on the Total Loss Payment Date.

 

44.4 The Owners shall have no obligation to supply to the Charterers with a replacement vessel following the occurrence of a Total Loss.

 

CLAUSE 44 – FEES AND EXPENSES

 

44.1 The Charterers shall pay to the Owners a non-refundable arrangement fee (the “Arrangement Fee”) in the amount and at the times agreed in the Fee Letter.

 

44.2 All costs and expenses including, but not limited to legal costs, expenses and other disbursements incurred by the Owners and each of their legal counsels in relation to preparing, negotiating and executing this Charter and the Leasing Documents and/or any Financial Instruments, shall be for the account of the Charterers (regardless of whether the transaction contemplated by the Leasing Documents actually completes).

 

44.3 If:

 

(a) the Charterers request an amendment, waiver or consent;

 

(b) the Charterers make a request to re-register the Vessel in another Flag State; or

 

(c) an amendment is required to address the fact that the Reference Rate is not or is likely not to be available for Dollars or any amendment or waiver arising from or in connection with Clause 37.4, the Charterers shall, on demand, reimburse the Owners for the amount of all reasonable and documented costs and expenses (including legal fees) incurred by the Owners in responding to, evaluating, negotiating or complying with that request or requirement (including, for the avoidance of doubt, any amounts the Owners have to pay under the terms of the Financial Instruments).

 

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44.4 All documented costs and expenses incurred by the Owners in relation to the acquisition, registration of title of the Vessel in the Owners’ name in the Flag State together with any and all fees (including but not limited to any vessel registration and tonnage fees and the Owners’ initial and ongoing registration and maintenance costs if required to be registered as a foreign maritime entity or the appointment of resident agents under the laws of the Flag State) payable by the Owners to register, maintain and/or renew such registration, shall be for the account of the Charterers. Without prejudice to the foregoing, if the Flag State requires the Owners to establish a physical presence or office in the jurisdiction of such Flag State, all fees, costs and expenses payable by the Owners to establish and maintain such physical presence or office shall be for the account of the Charterers. The Charterers shall promptly provide the Owners with evidence of payment of the annual register (including but not limited to the Owners’ being registered as a foreign maritime entity)/tonnage tax amounts payable to the Flag State or any other aforesaid costs, expenses and/or taxes when the same fall due.

 

44.5 All reasonable and documented costs and expenses (including legal fees) incurred by the Owners in relation to the transfer of title of the Vessel by the Owners to the Charterers and the re-delivery of the Vessel by the Charterers to the Owners pursuant to 0 (Termination and Redelivery) shall be for the account of the Charterers.

 

44.6 The Charterers shall, on demand, pay to the Owners the amount of all costs and expenses (including legal fees) incurred by the Owners in connection with the enforcement of, or the preservation of any rights under, any Leasing Document, including, without limitation, any action brought by the Owners to arrest or recover possession of the Vessel, and with any proceedings instituted by or against the Owners as a consequence of it entering into a Leasing Document or enforcing those rights.

 

CLAUSE 45 – NO WAIVER OF RIGHTS

 

45.1 No neglect, delay, act, omission or indulgence on the part of either Party in enforcing the terms and conditions of this Charter or any other Leasing Document (to which they are party to) shall prejudice the strict rights of that Party or be construed as a waiver thereof nor shall any single or partial exercise of any right of either party preclude any other or further exercise thereof.

 

45.2 No right or remedy conferred upon either Party by this Charter or any other Leasing Document shall be exclusive of any other right or remedy provided for herein or by law and all such rights and remedies shall be cumulative.

 

CLAUSE 46 – NOTICES

 

Any notice, certificate, demand or other communication to be served, given, made or sent under or in relation to this Charter shall be in English and in writing and (without prejudice to any other valid method or giving, making or sending the same) shall be deemed sufficiently given or made or sent if sent by registered post or by email to the following respective address: 

 

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(a) to the Owners: c/o CMB Financial Leasing Co., Ltd.
     

21F, China Merchants Bank Building

No. 1088 Lujiazui Ring Road

Shanghai

China 200120
       
      Attention: Chen Yujia
      Email: chenyujia098@cmbchina.com/
      zyzlsceb@cmbchina.com
      Tel: +86-21-61061534
         
  (b) to the Charterers:

Patriot Shipping Co.

c/o Seanergy Management Corp.

154 Vouliagmenis Avenue,

16674 Glyfada, Athens, Greece
      Attention: Mr. Stavros Gyftakis
      Email: legal@seanergy.gr and
      finance@seanergy.gr
      Tel: +30 210 8913520

 

or, if a party hereto changes its address or email address, to such other address (or email address) as that party may notify to the other.

 

CLAUSE 47 – TERMINATION EVENTS

 

47.1 The Owners and the Charterers hereby agree that any of the following events shall constitute a Termination Event:

 

(a) the Charterers or the Guarantor fails to pay or the Owners do not receive on the due date any amount payable pursuant to a Leasing Document, unless such failure to pay is caused by a technical error and payment is made within three (3) Business Days of its due date;

 

(b) the Charterers breach or omit to observe or perform or procure the performance of any of the undertakings in Clauses 34.7, 50.1(f), 0, 0, 53.1(b), 53.1(c), 53.1(d), 53.1(g) or 53.1(h);

 

(c) the Charterers fail to obtain and/or maintain the Insurances required under 0 (Insurance) in accordance with the provisions thereof (or any insurer in respect of such Insurances cancels the Insurances or disclaims liability with respect thereto);

 

(d) any Obligor commits any other breach of, or omits to observe or perform, any of their other obligations or undertakings in any Leasing Document (other than a breach referred to in paragraphs (a) to (c) above) or any Approved Manager that is not a member of the Group breaches any provision of, or omits to observe or perform, any of their obligations or undertakings in any Manager’s Undertaking unless such breach or omission is in the reasonable opinion of the Owners, remediable and the relevant Obligor or Approved Manager remedies such breach or omission to the satisfaction of the Owners (acting reasonably) within ten (10) Business Days of the earlier of (i) the date of the notice thereof from the Owners or (ii) upon the relevant Obligor or Approved Manager becoming aware of the same;

 

(e) any representation or warranty made by or on behalf of an Obligor, in or pursuant to any Leasing Document to which it is a party, proves to be, in the opinion of the Owners, untrue or misleading when it is made;

 

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(f) any of the following occurs in relation to any Financial Indebtedness of any Obligor:

 

(i) any Financial Indebtedness is not paid when due or not paid within any applicable grace period;

 

(ii) any Financial Indebtedness is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described) and following the expiry of any applicable grace period;

 

(iii) any commitment for any Financial Indebtedness is cancelled or suspended by any of its creditors as a result of an event of default (however described) and following the expiry of any applicable grace period;

 

(iv) any of its creditors becomes entitled to declare any Financial Indebtedness due and payable prior to its specified maturity as a result of an event of default (however described) and following the expiry of any applicable grace period; or

 

(v) any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of such Obligors or member of the Group ceases to be available or becomes capable of being terminated or declared due and payable or cash cover is required or becomes capable of being required, as a result of any termination event or event of default (howsoever defined) and following the expiry of any applicable grace period,

 

provided that no Termination Event will occur under this paragraph (f) in respect of the Guarantor if the aggregate amount of Financial Indebtedness falling within sub-paragraphs (i) to (v) above is less than US$5,000,000 (or its equivalent in any other currency or currencies);

 

(g) any of the following occurs in relation to any Obligor:

 

(i) it becomes unable to pay its debts as they fall due;

 

(ii) any administrative or other receiver is appointed over all or a substantial part of its assets unless as part of a solvent reorganisation which has been approved in writing by the Owners;

 

(iii) it makes any formal declaration of bankruptcy or any formal statement to the effect that it is insolvent or likely to become insolvent or a winding up or administration order is made in relation to it, or its members or directors of pass a resolution to the effect that it should be wound up, placed in administration or cease to carry on business or it makes any formal statement to the effect that it is reasonably likely to become insolvent;

 

(iv) a petition is filed in any Relevant Jurisdiction for its winding up or administration, or the appointment of a provisional liquidator over it;

 

(v) it petitions a court, or presents any proposal for, any form of judicial or non-judicial suspension or deferral of payments, reorganisation of its debt (or certain of its debt) or arrangement with all or a substantial proportion (by number or value) of their creditors or of any class of them or any such suspension or deferral of payments, reorganisation or arrangement is effected by court order, contract or otherwise;

 

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(vi) any meeting of its members or directors is summoned to authorise or take any action of a type described in paragraphs (ii), (iii), (iv) or (v) above;

 

(vii) in a country other than England and Wales, any event occurs or any procedure is commenced which, in the opinion of the Owners, is similar to any of the foregoing described in paragraphs (ii), (iii), (iv) or (v) above;

 

(viii) any expropriation, attachment, sequestration, distress or execution (or any analogous process in any jurisdiction) affects any of its asset or assets (other than a Total Loss of the Vessel) provided that no Termination Event will occur under this sub-paragraph in respect of the Guarantor unless the relevant event would have or is reasonably likely to have a Material Adverse Effect;

 

(ix) it fails to comply with or pay any sum due from it under any final judgment or any final order made or given by a court or tribunal of competent jurisdiction; or

 

(x) if it suspends or ceases to carry on all or a material part of its business;

 

(h) any consent, approval, authorisation, license or permit necessary to enable the Charterers to operate or charter the Vessel or to enable any Obligor or any Approved Manager to (i) comply with any provision of a Leasing Document to which it is a party or (ii) ensure that the obligations of that Obligor or Approved Manager under such Leasing Document are legal, valid, binding or enforceable, is not granted, expires without being renewed, is revoked or becomes, at the relevant time, expressly liable to or otherwise subject to automatic revocation or any condition of such a consent, approval, authorisation, license or permit is not fulfilled or waived within any applicable grace period (resulting in such consent, approval, authorisation, licence or permit being, at the relevant time, subject to automatic revocation or expiration);

 

(i) any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect;

 

(j) an Obligor suspends or ceases carrying on its business;

 

(k) the Security Interest constituted by any Security Document is in any way imperilled or in jeopardy or this Charter or any Leasing Document or any Security Interest created by a Security Document:

 

(i) is cancelled, terminated, rescinded or suspended or otherwise ceases to remain in full force and effect for any reason or no longer constitutes valid, binding and enforceable obligations of any party to that document for any reason whatsoever; or

 

(ii) is amended or varied without the prior written consent of the Owners, except for any amendment or variation which is expressly permitted by this Charter or any other relevant Leasing Document;

 

(l) any Obligor or any Approved Manager rescinds, repudiates (or purports to rescind or repudiates or purports to repudiate) a Leasing Document;

 

(m) it is or has become:

 

(i) unlawful or prohibited, whether as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or

 

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(ii) contrary to, or inconsistent with, any regulation,

 

for any Obligor or Approved Manager to maintain or give effect to any of its obligations under any Leasing Document;

 

(n) if it becomes unlawful in any applicable jurisdiction for the Owners to perform any of their obligations as contemplated by this Charter or any other Leasing Document to which they are a party;

 

(o) any Termination Event (as defined in the Other Charter) occurs under the Other Charter;

 

(p) if as a result of any Sanctions, the Owners or the Owners’ Financiers are prohibited from performing any of their obligations under the Leasing Documents, the Financial Instruments or the transactions contemplated under each of these respective documents;

 

(q) if any Obligor:

 

(i) is or becomes a Prohibited Person;

 

(ii) is owned or controlled by or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person;

 

(iii) owns or controls a Prohibited Person;

 

(iv) has a Prohibited Person serving as a director, officer or employee;

 

(r) any lease, hire purchase agreement, charter or any other financing arrangement in respect of any Fleet Vessel is terminated, cancelled or repudiated by the relevant lessor or owner or financier as a consequence of any termination event or event of default (howsoever defined therein); or

 

(s) a Change of Control in respect of the Charterers occurs without the prior written consent of the Owners.

 

47.2 Notwithstanding and without prejudice to 0 (Cancellation), upon the occurrence of any Termination Event, the Owners may issue a written notice to the Charterers terminating this leasing of the Vessel under this Charter and demanding payment of the Termination Sum (the “Termination Notice”), whereupon the Charterers shall be obliged to pay the Termination Sum to the Owners on the date specified by the Owners in their sole discretion in the Termination Notice (the “Termination Date” but which shall be no earlier than the date falling twenty (20) Business Days after the date of the Termination Notice).

 

47.3 For the avoidance of doubt, notwithstanding any action taken by the Owners following a Termination Event, the Charterers shall remain liable for the outstanding obligations on their part to be performed under this Charter including but not limited to all insurance, operational and maintenance covenants until such time as the Vessel is redelivered to the Owners in accordance with 0, or the title is transferred to the Charterers in accordance with Clause 41.3 or the Vessel is sold in accordance with 0.

 

47.4 Without limiting the generality of the foregoing or any other rights of the Owners, upon the occurrence of a Termination Event, the Charterers agree and acknowledge that the Owners shall have the sole and exclusive right and power to (i) settle, compromise, compound, adjust or defend any action, suit or proceeding relating to or pertaining to the Vessel and this Charter, (ii) make proof of loss, appear in and prosecute any action arising from any policy or policies of insurance maintained pursuant to this Charter, and settle, adjust or compromise any claims for loss, damage or destruction under, or take any other action in respect of, any such policy or policies and/or change or appoint a new manager for the Vessel and the appointment of any originally appointed manager may be terminated immediately without any recourse to the Owners.

 

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47.5 Each Termination Event shall either be a breach of condition by the Charterers where it involves a breach of this Charter or any of the other Leasing Document by the Charterers or shall otherwise be an agreed terminating event, the occurrence of which gives rise to a right of the Owners to terminate the leasing of the Vessel under this Charter and to exercise its rights under this clause.

 

CLAUSE 47A – MANDATORY SALE

 

If there is a Change of Control of the Guarantor, the Charterers shall immediately notify the Charterers of the same and (unless the Owners otherwise agree in writing) the Charterers shall be required to purchase the Vessel from the Owners by the Charterers paying the Termination Sum to the Owners within thirty (30) days from the Change of Control and (upon such payment of the Termination Sum) this Charter shall terminate and title to the Vessel shall be transferred in accordance with the procedures set out in Clause 41.3.

 

CLAUSE 48 – REPRESENTATIONS AND WARRANTIES

 

48.1 The Charterers represent and warrant to the Owners, save as otherwise stated in this Clause, as of the date hereof, and on each day henceforth until the last day of the Charter Period, as follows:

 

(a) each of the Obligors and any Approved Manager which is a member of the Group is duly incorporated and validly existing under the laws of its jurisdiction of incorporation;

 

(b) each Obligor and any Approved Manager which is a member of the Group has the corporate capacity and has taken all corporate actions to obtain and maintain all consents, approvals, authorisations, licenses or permits necessary or desirable for it:

 

(i) to enable it lawfully to enter into, exercise its rights and comply with and perform its obligations under each of the Leasing Documents to which it is a party; and

 

(ii) to make each of the Leasing Documents to which it is a party admissible in evidence in its Relevant Jurisdictions;

 

(c) all consents, approvals, authorisations, licences or permits referred to in 0(b) remain in full force and effect and nothing has occurred which makes any of them liable to revocation;

 

(d) each Leasing Document to which an Obligor and any Approved Manager which is a member of the Group, is a party constitutes such Obligor’s and Approved Manager’s legal, valid and binding obligations enforceable against such party (and where expressed to be a deed, shall be enforceable as a deed) in accordance with its respective terms;

 

(e) the entry into and performance by each Obligor and any Approved Manager which is a member of the Group, and the transactions contemplated by, each Leasing Document to which such Obligors and Approved Manager is a party do not and will not conflict with:

 

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(i) any law or regulation applicable to it (including Anti-Money Laundering Laws, Anti- Bribery and Anti-Corruption Laws, Sanctions or laws relating to anti-trust or collusion and laws relating to human rights violation);

 

(ii) its constitutional documents; and

 

(iii) any agreement or instrument binding upon it or any of its assets or constitute a default or termination event (however described) under any such agreement or instrument;

 

(f) the choice of governing law as stated in each Leasing Document and the agreement by the relevant parties thereto to refer disputes to the relevant courts or tribunals as stated in such Leasing Document are valid and binding against such parties;

 

(g) under the laws of the Relevant Jurisdictions of each Obligor and Approved Manager which is a member of the Group it is not necessary for any of the Leasing Documents to which it is a party to be registered, filed, recorded, notarised or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar taxes or fees be paid on or in relation to the Leasing Documents to which it is a party or the transactions contemplated by those Leasing Documents except payment of associated fees which registration, filings, taxes and fees will be made and paid promptly after the date of the relevant Leasing Documents to which it is a party;

 

(h) each Security Document to which an Obligor or Approved Manager which is a member of the Group is a party does now or, as the case may be, will upon execution and delivery create, the Security Interests it purports to create over any assets to which such Security Interest, by its terms, relates, and such Security Interests will, when created or intended to be created, be valid and effective;

 

(i) no party has any Security Interest (other than the Permitted Security Interests) or any other interest, right or claim over, in or in relation to the Vessel, this Charter, any moneys payable under any Leasing Document or over any assets which are, the subject of the Security Interests created or intended to be created by the Security Documents;

 

(j) the obligations of each Obligor, under each Leasing Document to which it is a party, are the direct, general and unconditional obligations of such Obligor and rank at least pari passu with all other present and future unsecured and unsubordinated creditors of each Obligor save for any obligation which is mandatorily preferred by law and not by virtue of any contract;

 

(k) all payments which an Obligor is liable to make under any Leasing Document to which such Obligor is a party may be made by such party without deduction or withholding for or on account of any tax payable under the laws of their jurisdiction of incorporation;

 

(l) no Obligor has failed to pay all taxes applicable to, or imposed on or in relation to it, its business or if applicable, the Vessel;

 

(m) no Obligor has breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect;

 

(n) no Obligor or other member of the Group, nor any of their subsidiaries, directors or officers, affiliates or any employee, has engaged in any activity or conduct which would violate any Anti-Bribery and Anti-Corruption Laws or Anti-Money Laundering Laws in any applicable jurisdiction and each Obligor and Group member has instituted and maintained policies and procedures designed to prevent violation of such laws, regulations and rules;

 

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(o) no Obligor or other member of the Group, nor any of their subsidiaries, directors or officers, or to the best of their knowledge affiliates or employees, has taken or will take any action in furtherance of an offer, payment, promise to pay or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any government official (which shall include without limitation, any officer or employee of a government or government owned or controlled entity or of a public international organisation or any person acting in an official capacity for and on behalf of the foregoing or any political party or party official or candidate for public office) to influence official action or secure an improper advantage;

 

(p) no Environmental Claim has been made or threatened against any Obligor or any other member of the Group;

 

(q) no Environmental Incident has occurred and no person has claimed that an Environmental Incident has occurred;

 

(r) no Termination Event or Potential Termination Event has occurred or might reasonably be expected to result from the entry into and performance of this Charter or any other Leasing Document and no other event or circumstance is outstanding which constitutes a default or a termination event (however described) under any other agreement or instrument which is binding on it or to which its assets are subject;

 

(s) no litigation, arbitration or administrative proceedings or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) of or before any court, arbitral body or agency have been started or threatened against any Obligor which has or is reasonably likely to have a Material Adverse Effect;

 

(t) the consolidated financial statements delivered pursuant to Clause 49.1(a) are prepared in accordance with GAAP consistently applied and give a true and fair view of (if audited) or fairly represent (if unaudited) the financial condition of the Guarantor as at the end of the period to which such financial statements relate;

 

(u) since the date of the Original Financial Statements or as the case may be, the date of any more recent financial statements delivered pursuant to Clause 49.1(a), there has been no material adverse change in the Guarantor’s or the Group’s business, assets or financial condition;

 

(v) in relation to any information provided by any Obligor for the purposes of this Charter:

 

(i) such information was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated;

 

(ii) any financial projections contained in such information have been prepared on the basis of recent historical information and on the basis of reasonable assumptions, and

 

(iii) nothing has occurred or been omitted from any such information and no information has been given or withheld that results in any such information being untrue or misleading;

 

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(w) no corporate action, legal proceeding or other procedure or step described in Clause 47.1(g) or circumstances described in Clause 47.1(f) has been taken or exists or, to their knowledge, threatened in relation to an Obligor;

 

(x) no Obligors, nor any of its assets are entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgment, execution or other enforcement);

 

(y) for the purposes of the Regulation, the centre of main interest (as that term is used in Article 3(1) of the Regulation) of each Obligor is situated in its jurisdiction of incorporation and it has no “establishment” (as that term is used in Article 2(10) of the Regulation) in any other jurisdiction;

 

(z) no Obligor is a US Tax Obligor and none of them have established a place of business in the United States of America;

 

(aa) no Obligor has established a place of business in the United Kingdom;

 

(bb) no Obligor, Approved Manager which is a member of the Group, sub-charterer (to the best of its knowledge) and no member of the Group:

 

(i) is a Prohibited Person;

 

(ii) is owned or controlled by or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person;

 

(iii) owns or controls a Prohibited Person; or

 

(iv) has a Prohibited Person serving as a director, officer or, to the best of its knowledge, employee;

 

(cc) no Obligor nor its respective directors, member, officers and any member of the Group nor (to the best of its knowledge) any or any sub-charterer is in breach of applicable Sanctions, has been or is currently being investigated on compliance with Sanctions, have received notice or are aware of any claim, action, suit or proceeding against any of them with respect to Sanctions, or have taken any action to evade the application of Sanctions; and

 

(dd) any factual information provided by the Charterers (or on their behalf) to the Owners was true and accurate as at the date it was provided or as the date at which such information was stated.

 

CLAUSE 49 – GENERAL INFORMATION UNDERTAKINGS

 

49.1 The Charterers undertake that they shall comply or procure compliance with the following information undertakings commencing from the date hereof and up to the last day of the Charter Period:

 

(a) they will send to the Owners:

 

(i) as soon as possible, but in no event later than ninety (90) days after the end of each financial half year of the Charterers, the unaudited semi-annual management accounts of the Charterers;

 

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(ii) as soon as possible, but in no event later than one hundred and fifty (150) days after the end of each financial year of the Charterers, the unaudited annual management accounts of the Charterers;

 

(iii) as soon as possible, but in no event later than ninety (90) days after the end of each financial half year of the Guarantor, the unaudited semi-annual consolidated financial accounts of the Guarantor;

 

(iv) as soon as possible, but in no event later than one hundred and fifty (150) days after the end of each financial year of the Guarantor, the audited annual consolidated financial accounts of the Guarantor;

 

(b) they will procure that each set of financial statements delivered pursuant to Clause 49.1(a) shall be certified by a duly authorised officer of the relevant company as giving a true and fair view (if audited) or fairly representing (if unaudited) its financial condition and operations as at the date as at which those financial statements were drawn up and the financial statements of the Guarantor shall be provided together with a Compliance Certificate signed by an authorized signatory of the Guarantor certifying that the financial covenants referred to in 0 have been complied with and setting out all relevant calculations and statements demonstrating compliance with such financial covenants;

 

(c) they will promptly provide to the Owners, copies of all notices and minutes relating to any of their extraordinary shareholders’ meetings which are despatched to the shareholders or to their creditors or any class thereof and its constitutional documents where these have been amended or varied (to the extent not contrary to the other provisions of this Charter);

 

(d) they will provide the Owners promptly upon becoming aware of them, the details of:

 

(i) any litigation, arbitration or administrative proceedings or investigations relating to any alleged or actual breach of any Sanctions or Anti-Money Laundering Laws which are current or pending against any Obligor, Approved Manager, sub-charterer or other member of the Group;

 

(ii) any litigation, arbitration or administrative proceedings or investigations relating to any other matters not referred to in paragraph (i) above (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) in relation to an Obligor; and

 

(iii) any Termination Event or Potential Termination Event that has occurred (and the steps, if any, being taken to remedy it);

 

(e) they will, promptly upon a request by the Owners, supply to the Owners a certificate signed by an officer on its behalf certifying that no Termination Event or Potential Termination Event has occurred (or if a Termination Event or Potential Termination Event has occurred, specifying the nature of the Potential Termination Event or Termination Event (and the steps, if any, being taken to remedy it);

 

(f) they will, as soon as practicable upon the request of the Owners, provide the Owners with any additional reasonable financial or other information relating to:

 

(i) themselves, any Obligor and/or the Vessel (including, but not limited to the condition and location of the Vessel, its Earnings and its Insurances);

 

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(ii) details of the Vessel’s management and employment status and copies of all accurate, complete and up-to-date records and logs of all voyages made by the Vessel (but not more than once every twelve months);

 

(iii) the Security Interests relating to any Leasing Documents;

 

(iv) compliance of each Obligor and any Approved Manager with the terms of the Leasing Documents;

 

(v) the financial condition, business and operations of the Obligors; or

 

(vi) to any other matter relevant to, or to any provision of any Leasing Document to which it is a party,

 

which may reasonably be requested by the Owners at any time; and

 

(g) they shall immediately notify the Owners in writing if any payments which they or any other Obligor, is liable to make under any Leasing Document is subject to deduction or withholding or any other tax whatsoever;

 

CLAUSE 50 – GENERAL UNDERTAKINGS

 

50.1 The Charterers undertake that they shall comply or procure compliance with the following general undertakings commencing from the date hereof and up to the last day of the Charter Period:

 

(a) they will, and will procure that each other Obligor and each Approved Manager which is a member of the Group shall, obtain and promptly renew or procure the provision or renewal of and provide copies of, from time to time, any necessary consents, approvals, authorisations, licenses or permits of any regulatory body or authority for the transactions contemplated under each Leasing Document to which any Obligor and each Approved Manager which is a member of the Group is a party (including without limitation the sale, chartering and operation of the Vessel);

 

(b) they will at their own cost, and will procure and each other Obligor and each Approved Manager which is a member of the Group, will:

 

(i) ensure that any Leasing Document to they are a party validly creates the obligations and the Security Interests which such Leasing Document purports to create; and

 

(ii) without limiting the generality of paragraph (i), promptly register, file, record or enrol any Leasing Document to which they are a party with any court or authority in all Relevant Jurisdictions, pay any stamp duty, registration or similar tax in all Relevant Jurisdictions in respect of any Leasing Document to which they are a party, give any notice or take any other step which, is or has become necessary or desirable for any such Leasing Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which such Leasing Document creates;

 

(c) they will not, and will procure each other Obligor will not, create or permit to subsist any Security Interest over any of its assets which are, the subject of the Security Interests created or intended to be created by the Security Documents, unless with the prior written approval of the Owners and save for Permitted Security Interests;

 

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(d) they will not, and will procure each Obligor will not, change the location of its centre of main interest (as that term is used in Article 3(1) of the Regulation) from that stated in relation to it under 48.1(y) and it will create no “establishment” (as that term is used in Article 2(10) of the Regulation) in any other jurisdiction;

 

(e) except with the Owners’ prior written consent, they will not, and will procure each other Obligor will not, make a substantial change to the general nature of their respective businesses from that carried on at the date of this Charter;

 

(f) except with the Owners’ prior written consent or where expressly permitted under the Leasing Documents, they will not, and will procure that each other Obligors will not, enter into any merger, amalgamation, demerger, solvent reorganisation or corporate reconstruction other than an internal group reorganisation under which the (i) the Charterers and Guarantor each survive and (ii) the Charterers remain wholly and directly (or indirectly) wholly owned by the Guarantor (and if indirectly owned, any replacement shareholder of the Charterers has entered into Share Security over the shares in the Charterers in a form acceptable to the Owners);

 

(g) they will not:

 

(i) enter into any borrowing except for loans from affiliates which are unsecured and fully subordinated to the Owners in a manner acceptable to the Owners and which are approved by the Owners in writing;

 

(ii) incur any liabilities or obligations to any party except for those reasonably incurred in the ordinary course of operating, chartering, repairing and maintaining the Vessel;

 

(iii) be the creditor in respect of any loan or any form of credit to any person;

 

(iv) give or allow to be outstanding any guarantee or indemnity to or for the benefit of any person in respect of any obligation of any other person or enter into any document under which they assume any liability of any other person other than any guarantee or indemnity given under the Leasing Documents;

 

(v) enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of the Vessel, its Earnings or its Insurances; and

 

(vi) without prejudice to the above sub-paragraphs (i) to (v), enter into any transaction (whether with another member of the Group or otherwise) which are, in any respect, less favourable than those which they could obtain an a bargain made at arms’ length; and

 

(h) they will not, and shall procure that the Guarantor shall not, following the occurrence of a Termination Event which is continuing or where any of the following would result in the occurrence of a Potential Termination Event or Termination Event or suffering a net loss in respect of the preceding financial year:

 

(i) declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its shares (or any class of its shares);

 

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(ii) repay or distribute any dividend or share premium reserve;

 

(iii) pay any management, advisory or other fee to or to the order of any of its shareholders; or

 

(iv) redeem, repurchase, defease, retire or repay any of their shares or resolve to do so.

 

CLAUSE 51 – FINANCIAL COVENANTS

 

51.1 The Charterers undertake that they shall procure that the Guarantor shall comply with the following financial covenants during the Charter Period:

 

(a) On each Testing Date and for the relevant Accounting Period throughout the Charter Period:

 

(i) Cash and Cash Equivalents divided by the number of Fleet Vessels shall not be lower than $500,000; and

 

(ii) the Leverage Ratio shall not be more than 85 per cent.

 

51.2 In this 0 (Financial Covenants):

 

“Accounting Information” means, (i) the annual audited financial statements of the Guarantor and (ii) the semi-annual unaudited consolidated financial statements of the Guarantor as provided to the Owners in accordance with Clause 49.1(a).

 

“Accounting Period” means:

 

(i) the financial year of the Guarantor ending 31 December of each calendar year; or

 

(ii) the financial half year of the Guarantor ending 30 June of each calendar year,

 

in respect of which, in each case, the relevant Accounting Information is required to be delivered pursuant to Clause 49.1(a).

 

“Cash and Cash Equivalents” shall be that shown in the balance sheet in the relevant Accounting Information and includes term deposits, restricted cash and amounts required by the Group’s lenders and lessors to be held for minimum liquidity purposes.

 

“Fleet Market Value” means valuations of the Fleet Vessels calculated in accordance with the principles set out in the definition of Fair Market Value but using one Approved Valuer.

 

“Fleet Vessels” means all vessels owned by the Guarantor and its subsidiaries.

 

“Market Value Adjusted Total Assets” means, as at the date of calculation, the aggregate of the Market Value Adjusted Other Assets and the Total Current Assets.

 

“Market Value Adjusted Other Assets” means, as at the date of calculation, the Fleet Market Value plus the book value (less depreciation and amortization computed in accordance with the applicable Accounting Information on a consolidated basis of all non-current assets of the Group (which, without limitation, shall exclude all Fleet Vessels)), as stated in the latest Accounting Information.

 

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“Total Current Assets” means, the aggregate of the cash, term deposits and marketable securities, trade and other receivables from persons (other than persons being members of the Group) realisable within 1 year such amount to be determined on a consolidated basis less any discounts, allowances and activated goodwill, in each case as shown in the applicable Accounting Information.

 

“Net Debt” means, as at the date of calculation, the Total Debt less any cash, term-deposits restricted cash and cash equivalents, in each case as stated in the applicable Accounting Information.

 

“Leverage Ratio” means, as at the date of calculation, the ratio (expressed as a percentage) of Net Debt to Market Value Adjusted Total Assets.

 

“Testing Date” means 30 June and 31 December of each financial year.

 

“Total Debt” means, as at the date of calculation, the current portion of long-term debt, net of deferred finance costs and the long-term debt, net of current portion and deferred finance costs of the Group as shown in the applicable Accounting Information.

 

51.3 The Charterers shall promptly notify the Owners if the Guarantor agrees to provide any more favourable financial covenants to a creditor than those that are set out in favour of the Owners under Clause 51.1 above (or to amend existing ones such that they place such creditor in a position which is comparatively more favourable in terms of the financial covenants than the position of the Owners) under any agreements entered into or to be entered into in connection with any Financial Indebtedness owed by the Guarantor or a Group member to a creditor. Such more favourable financial covenants shall be deemed as automatically incorporated into this Charter in favour of the Owners from the date of the financing agreements entered into in connection with such other Financial Indebtedness (in place of the financial covenants set out in Clause 51.1 or to supplement them, at the option of the Owners) and the Charterers agree that they will and shall procure that the Guarantor will promptly enter into such necessary documentation as may be required to amend and supplement (as applicable) this Charter and any applicable Leasing Document so as to record the incorporation of such more favourable financial covenants into this Charter and any applicable Leasing Document (as the case may be).

 

CLAUSE 52 – VALUATIONS

 

52.1 The Charterers undertake that they shall comply or procure compliance with the following undertakings commencing from the date hereof and up to the last day of the Charter Period:

 

(a) they shall at their cost:

 

(i) provide to the Owners valuations of the Vessel (to be addressed to the Owners) to enable the Owners to determine the Initial Market Value of the Vessel; and

 

(ii) at least twice per calendar year (on each Testing Date) and at any time after the occurrence of a Potential Termination Event or Termination Event which is continuing if requested by the Owners, provide to the Owners valuations of the Vessel (or any other vessel over which additional Security Interests have been created in accordance with Clause 52.1(b)) (to be addressed to the Owners) to enable the Owners to determine the Fair Market Value of the Vessel or such other relevant vessel; and

 

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(b) if at any time, the Vessel’s Fair Market Value falls below an amount equivalent to one hundred and twenty per cent (120%) of the Owners’ Costs (the “LTV Breach”, and the said difference between the Fair Market Value and one hundred and twenty per cent (120%) of the Owners’ Costs shall be referred to as the “shortfall” for the purposes of this paragraph), the Charterers shall, promptly and in any event no later than the date falling thirty (30) days from the date which the valuations relating to the Vessel’s Fair Market Value are received by the Owners and in the Owners’ sole discretion, either:

 

(i) make payment in an amount such as to eliminate the shortfall which payment shall be deemed to be an advance payment of hire and credited against future instalment(s) of Fixed Charterhire (or part thereof) payable in inverse order of maturity of payments of Fixed Charterhire; and/or

 

(ii) provide, or ensure that a third party has provided, additional Security Interests which, in the opinion of the Owners has a net realisable value at least equal to the shortfall and is acceptable to the Owners, and which is documented in such terms as the Owners may require.

 

CLAUSE 53 – VESSEL UNDERTAKINGS

 

53.1 The Charterers undertake that they shall comply or procure compliance with the following Vessel and Sanctions related undertakings commencing from the date hereof and up to the last day of the Charter Period:

 

(a) they will notify the Owners promptly upon becoming aware:

 

(i) that any Environmental Claim has been made against the Charterers or in connection with the Vessel, or that any Environmental Incident has occurred;

 

(ii) of any arrest or detention of the Vessel or any exercise of any lien on the Vessel or its Earnings or any requisition of the Vessel for hire;

 

(iii) any modification or alteration of the Vessel of a value in excess of the Major Casualty amount;

 

(iv) any casualty or occurrence as a result of which the Vessel has become or is, by the passing of time or otherwise, likely to become, a Major Casualty;

 

(v) that a Total Loss has occurred; and

 

(vi) any violation of Sanctions in relation to the Vessel,

 

and will keep the Owners fully up-to-date with all developments;

 

(b) they will comply, and will procure that each other Obligor and each other member of the Group and (on a best efforts basis) any sub-charterer will comply, with all Sanctions and all laws and regulations relating to them, the Vessel and its construction, ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code (including the maintenance of an ISSC), all Environmental Laws, all Anti-Money Laundering Laws, Anti-Bribery and Anti-Corruption Laws and the laws of the Vessel’s registry, and in particular, they shall effect and maintain a sanctions compliance policy which, inter alia, implements the recommendations of the Sanctions Advisory, to ensure compliance with all such laws and regulations implemented from time to time, including, without limitation they will, and will procure that each other Obligors, each other member of the Group and each sub-charterer will:

 

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(i) conduct their activities in a manner consistent with US and UN sanctions, as applicable;

 

(ii) have sufficient resources in place to ensure execution of and compliance with their own sanctions policies by their personnel, e.g., direct hires, contractors, and staff;

 

(iii) ensure subsidiaries and affiliates comply with the relevant policies, as applicable;

 

(iv) have relevant controls in place to monitor automatic identification system (AIS) transponders;

 

(v) have controls in place to screen and assess onboarding or offloading cargo in areas they determine to present a high risk;

 

(vi) have controls to assess authenticity of bills of lading, as necessary; and

 

(vii) have controls in place consistent with the Sanctions Advisory,

 

(c) without limiting Clause 53.1(b), they will procure that:

 

(i) the Vessel shall not be constructed, operated, employed, managed, used by or for the benefit of a Prohibited Person;

 

(ii) the Vessel shall not be employed in trading with any Prohibited Person or in any manner contrary to Sanctions;

 

(iii) notwithstanding any other provision of this paragraph (c), the Vessel shall not be permitted to call at any port in any Prohibited Country or any area or country where trading in such area or country would constitute or would be reasonably expected to constitute a breach of Sanctions;

 

(iv) the Vessel shall not be traded in any manner which would trigger the operation of any sanctions limitation or exclusion clause (or similar) in the Insurances or in any manner which would result or would reasonably be expected to result in any Obligor or the Owners becoming a Prohibited Person; and

 

(v) that each charterparty in respect of the Vessel shall contain, for the benefit of the Owners, language which gives effect to the provisions of Clause 53.1(c) as regards Sanctions and of this Clause and which permits refusal of employment or voyage orders if compliance would result in a breach of Sanctions and which prohibits trading to any Prohibited Country;

 

(d) they will, promptly notify the Owners and provide all information which may be relevant for the purposes of ascertaining whether the Obligors, the Approved Manager and any sub-charterer are in compliance with all laws and regulations and Sanctions applicable to and/or binding on them, and in particular, they shall notify the Owners in writing promptly upon being aware that any of the Charterers’ shareholders, directors, officers or employees is a Prohibited Person or has otherwise become a target of any Sanctions;

 

(e) save with the Owners’ prior consent in writing, they shall not agree or enter into, and shall procure that each Approved Manager does not agree or enter into, any transaction, arrangement, document or do or omit to do anything which will have the effect of varying, amending, supplementing or waiving any term of the relevant Management Agreement which would result in an annual increase of the management fee to more than ten per cent. (10%) of the management fee payable under the relevant Management Agreement as at the date of this Charter;

 

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(f) they shall not:

 

(i) change or appoint a manager of the Vessel other than an Approved Manager and provided that any such Approved Manager has (prior to accepting its appointment) entered into a Manager’s Undertaking in such form as may be acceptable to the Owners; or

 

(ii) terminate or otherwise assign or transfer any Management Agreement unless with the prior approval in writing by the Owners such approval not to be unreasonably withheld or delayed;

 

(g) with effect from and following Delivery, ensure that the Vessel will be registered in the Flag State under the name of the Owners;

 

(h) the Vessel shall be classed with an Approved Classification Society upon Delivery at the highest classification available for vessels of its type and be free of all overdue conditions (unless special dispensation is obtained from class and insurers), and maintain such class during the Charter Period;

 

(i) unless with the Owners’ prior written consent they shall not deactivate or lay up the Vessel;

 

(j) save for the installation of scrubbers (which, once installed shall form part of the Vessel and shall not be removed at redelivery) they shall not make any structural change to the Vessel without the prior written consent of the Owners other than a structural change that is mandatorily required by any applicable law and regulation and the Charterers shall provide the Owners with at least fifteen (15) days prior written notice of the commencement of any such alterations (as well as notification of such alterations being completed promptly after such completion) and shall provide the Owners with all information (including without limitation, any plans for the proposed modifications, repairs, replacement, installation or alteration, valuation reports and confirmation of class from the Approved Classification Society) as the Owners may reasonably require for the purposes of determining their approval together with evidence that the Obligatory Insurances have been appropriately updated, and shall indemnify the Owners against all costs and expenses incurred by the Owners in connection with all such proposed modifications, repairs, replacement, installation or alteration of the Vessel and if such modification, repair or replacement or installation is approved or satisfies the requirements of this Clause, once effected, shall form part of the Vessel and shall not (unless requested by Owners) be removed at any redelivery;

 

(k) they will procure that each Approved Manager shall, upon the request of the Owners at the expense of the Charterers, furnish the Owners with an inspection report setting out such matters relating to the condition of the Vessel as the Owners may require on an annual basis and if a Potential Termination Event or Termination Event occurs, at such other frequency as the Owners may otherwise require;

 

(l) subject to the other terms of this Charter, the Charterers may freely sub-charter the Vessel save that the Owners’ prior written consent shall be required:

 

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(i) to any sub-bareboat or demise charter of the Vessel;

 

(ii) to any Assignable Sub-Charter; and

 

(iii) to any employment of the Vessel which does not permit a transfer of the registered ownership of the Vessel without the consent of the applicable sub-charterer;

 

(m) they shall procure that:

 

(i) all Earnings in connection with the Vessel are paid into the Operating Account;

 

(ii) at all times during the Charter Period the Operating Account has a minimum credit balance of at least US$550,000; and

 

(iii) the Owners are given any information and access relating to the Operating Account that they may require; and

 

(n) they shall, upon the request of the Owners and at the cost of the Charterers, on or before 31st July in each calendar year commencing from 1 January 2022, supply or procure the supply to the Owners all information necessary in order for the Owners to comply with its or any Owners’ Financiers’ obligations under the Poseidon Principles in respect of the preceding year, including, without limitation, all ship fuel oil consumption data required to be collected and reported in accordance with Regulation 22A of Annex VI and any Statement of Compliance relating to the Vessel for the preceding calendar year and, for the avoidance of doubt, such information shall be “Confidential Information” for the purposes of 0 but the Charterers acknowledge that, in accordance with the Poseidon Principles, such information will form part of the information published regarding the Owners’ and/or Owners’ Financiers’ portfolio climate alignment.

 

CLAUSE 54 – INSPECTION OF VESSEL

 

54.1 Without prejudice to Clause 54.2 below, the Owners shall be entitled to inspect or survey the Vessel or instruct a duly authorized surveyor to carry out such survey on their behalf:

 

(a) to ascertain the condition of the Vessel and satisfy themselves that the Vessel is being properly repaired and maintained;

 

(b) in dry-dock if the Charterers have not dry-docked the Vessel in accordance with Clause 10(g) (Periodical Dry-docking);

 

(c) as may be required for classification purposes; and

 

(d) for any other commercial reason they consider necessary,

 

and in doing so, the Charterers shall afford the Owners or their authorised surveyor with all proper facilities in relation to such inspection or survey.

 

54.2 The Owners shall be entitled to exercise its rights of inspection or survey as described under Clause 54.1 (Inspection of Vessel) once a year (subject to provision of prior notice) without interference to the operation and trading of the Vessel save that upon the occurrence of a Termination Event or Potential Termination Event, the Owners shall have the right to inspect or survey the Vessel at any time (and for the avoidance of doubt, more than once a year).

 

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54.3 The costs and fees for any inspection and survey permitted under this Clause shall be paid by the Charterers.

 

54.4 All time used in respect of inspection, survey or repairs pursuant to this Clause shall be for the Charterers’ account and form part of the Charter Period.

 

54.5 The Charterers shall also permit the Owners to inspect the Vessel’s log books or survey reports whenever requested and shall whenever required by the Owners furnish them with full information regarding any casualties or other accidents or material damage to the Vessel.

 

CLAUSE 55 – PURCHASE OPTION

 

55.1 The Charterers shall have the option (the “Purchase Option”) to purchase the Vessel on any Purchase Option Date (as hereinafter defined) specified in the Purchase Option Notice (as hereinafter defined) at the applicable Purchase Option Price, subject to the other terms of this 0 (Purchase Option).

 

55.2 The Purchase Option shall be exercisable only (unless otherwise agreed by the Owners):

 

(a) upon the Charterers providing not less than forty five (45) days’ written notice (the “Purchase Option Notice”) to purchase the Vessel on a date specified therein (the “Purchase Option Date”) which Purchase Option Date shall, subject to Clause 60.1, fall on any anniversary of the Commencement Date on or after the second (2nd) anniversary of the Commencement Date or on the last day of the Charter Period (as the case may be) unless the Purchase Option Notice is served pursuant to a proposed Transfer by the Owners, in which case the Purchase Option Notice must be served by the Charterers within the time provided under Clause 62.4 (but regardless of whether this falls on or after the second (2nd) anniversary of the Commencement Date) and the Purchase Option Date specified in such Purchase Option Notice may fall on any Business Day being not less than thirty (30) days after the date of the relevant Purchase Option Notice; and

 

(b) in the absence of the occurrence of a Termination Event that is continuing on or prior to either the date of the Purchase Option Notice or the Purchase Option Date.

 

55.3 The Purchase Option Notice shall each be signed by a duly authorised officer or attorney of the Charterers and, once delivered to the Owners, will in each case be irrevocable and the Charterers shall be bound to pay to the Owners the Purchase Option Price on the Purchase Option Date.

 

55.4 The sale of the Vessel pursuant to the Charterers’ exercise of the Purchase Option shall be conducted in accordance with 0 (Sale of the Vessel).

 

CLAUSE 56 – SALE OF THE VESSEL

 

56.1 The sale of the legal and beneficial interest and title in the Vessel pursuant to the Charterers’ exercise of, as the case may be, the Charterers’ Purchase Option under 0 (Purchase Option) or pursuant to Clause 41.3 shall be on an “as is where is” and subject to the following terms and conditions:

 

(a) no condition, warranty or representation of any kind is or has been given by or on behalf of the Owners in respect of the Vessel or any part thereof, and accordingly the Charterers hereby confirm that they have not, in entering into this Charter, relied on any condition, warranty or representation by the Owners or any person on the Owners’ behalf, express or implied, whether arising by law or otherwise in relation to the Vessel or any part thereof, including, without limitation, warranties or representations as to the description, suitability, quality, merchantability, fitness for any purpose, value, state, condition, appearance, safety, durability, design or operation of any kind or nature of the Vessel or any part thereof, and the benefit of any such condition, warranty or representation by the Owners is hereby irrevocably and unconditionally waived by the Charterers to the extent permissible under applicable law, and the Charterers hereby also waive any rights which they may have in tort in respect of any of the matters referred to above and irrevocably agree that the Owners shall have no greater liability in tort in respect of any such matter than they would have in contract after taking account of all of the foregoing exclusions. No third party making any representation or warranty relating to the Vessel or any part thereof is the agent of the Owners nor has any such third party authority to bind the Owners thereby. Notwithstanding anything contained above, nothing contained herein is intended to obviate, remove or waive any rights or warranties or other claims relating thereto which the Charterers (or their nominee) or the Owners may have against the manufacturer or supplier of the Vessel or any third party;

 

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(b) the Vessel shall be free from all registered mortgages, liens, encumbrances, claims and debts whatsoever incurred by the Owners (save for those liens, encumbrances and debts arising out of or in connection with this Charter or the Leasing Documents);

 

(c) the Purchase Option Price or Termination Sum (as applicable) shall be paid by (or on behalf of) the Charterers to the Owners together with (without double counting) unpaid amounts of Charterhire, Breakfunding Costs (if applicable), default interest accruing under Clause 37.5 (if applicable), fees, expenses and any other moneys then owing by or accrued or due from the Charterers under this Charter; and

 

(d) concurrently with the Owners receiving irrevocable payment of the Purchase Option Price or the Termination Sum (as applicable) and all other moneys payable under this Charter in full pursuant to the terms of this Charter, the Owners shall (save in the event of Total Loss) (at Charterers’ cost) transfer the legal and beneficial ownership of the Vessel on an “as is where is” basis to the Charterers or their nominees and shall (at Charterers’ cost) execute a bill of sale and a protocol of delivery and acceptance evidencing the same and any other document strictly necessary to transfer the title of the Vessel, as well as procure the relevant ship registry to issue a certificate of title or any other evidence provided in accordance with the practice of such registry showing that the Vessel shall be free from any registered mortgages in favour of the Owners, to the Charterers and the relevant ship registry of the Vessel under the Charterers’ flag of choice (and to the extent required for such purposes, the Vessel shall be deemed first to have been redelivered to the Owners). Any fees (including legal fees), costs or disbursements incurred by the Owners in connection with the Charterers’ exercise of the Purchase Option or transfer of the Vessel following payment of the Termination Sum shall be indemnified or reimbursed by the Charterers to the Owners upon the Owners’ demand on or prior to the Purchase Option Date or date of payment of the Termination Sum (as applicable).

 

CLAUSE 57 – INDEMNITIES

 

57.1 The Charterers shall pay such amounts to the Owners, on the Owners’ demand, in respect of all claims, expenses, liabilities, losses, taxes, fees (including but not limited to any vessel registration and tonnage fees) suffered or incurred by or imposed on the Owners arising from this Charter and any Leasing Document, whether prior to, during or after termination of the leasing of this Charter, including without limitation:

 

 

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(a) as a result of incorporating the Owners in the relevant jurisdiction selected by the Charterers or required for the purpose of flying the flag of the Vessel in a particular jurisdiction;

 

(b) in connection with delivery, possession, performance, control, registration, repair, survey, insurance, maintenance, manufacture, purchase, ownership or operation of the Vessel (including but not limited to any social security contributions), or the financing or re-financing in relation to the Vessel obtained from the Owners’ Financiers;

 

(c) in connection with the prevention or release of liens or detention of or requisition, use, operation, redelivery, sale or disposal of the Vessel (or any part of it) and/or whether prior to, during or after termination;

 

(d) in connection with or following the occurrence of a Termination Event or Potential Termination Event (including without limitation, by reason thereof in re-taking possession or otherwise in acquiring the Vessel pursuant to Clause 38.3).

 

  Without prejudice to its generality, this Clause covers any claims, expenses, liabilities and losses which arise, or are asserted, under or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code, the MARPOL Protocol, any Environmental Law or any Sanctions.

 

57.2 The Charterers hereby irrevocably agree to indemnify and hold harmless the Owners against all consequences or liabilities arising from the master, officers or agents signing bills of lading or other documents and any claim, expense, liability or loss incurred by the Owners in liquidating or employing deposits from the Owners’ Financiers or third parties to fund the acquisition of the Vessel pursuant to the MOA.

 

57.3 Notwithstanding anything to the contrary herein (but subject and without prejudice to 0 (Cancellation)) and without prejudice to any right to damages or other claim which the Charterers may have at any time against the Owners under this Charter, the indemnities provided by the Charterers in favour of the Owners shall continue in full force and effect notwithstanding any breach of the terms of this Charter or termination of this Charter pursuant to the terms hereof or termination of this Charter by the Owners.

 

57.4 All rights which the Charterers have at any time (whether in respect of this Charter or any other transaction) against any Obligors shall be fully subordinated to the rights of the Owners under the Leasing Documents and until the end of this Charter and unless the Owners otherwise direct, the Charterers shall not exercise any rights which it may have (whether in respect of this Charter or any other transaction) by reason of performance by it of its obligations under any Leasing Document or by reason of any amount becoming payable, or liability arising, under this Clause:

 

(a) to be indemnified by any Obligor;

 

(b) to claim any contribution from any third party providing security for, or any other guarantor of, any Obligor under any Leasing Document;

 

(c) to take any benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of any Obligor under any Leasing Document or of any other guarantee or security taken pursuant to, or in connection with, any Leasing Document by any Obligors;

 

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(d) to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of any Leasing Document;

 

(e) to exercise any right of set-off against any Obligor; and/or

 

(f) to claim or prove as a creditor of any Obligor,

 

and if the Charterers receive any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Owners by any Obligor or in connection with any Leasing Document to be repaid in full on trust for the Owners and shall promptly pay or transfer the same to the Owners.

 

CLAUSE 58 – NO SET-OFF OR TAX DEDUCTION

 

58.1 All Charterhire and any payment made from the Charterers to enable the Owners to pay all amounts under a Leasing Document shall be paid punctually and:

 

(a) without any form of set-off, cross claim, condition or counterclaim;

 

(b) free and clear of any tax deduction or withholding unless required by law; and

 

(c) net of any bank charges or bank fees.

 

58.2 Without prejudice to Clause 58.1, if the Owners are required by law to make a tax deduction from any payment:

 

(a) the Owners shall notify the Charterers as soon as they become aware of the requirement; and

 

(b) the amount due in respect of the payment shall be increased by the amount necessary to ensure that the Owners receive and retain (free from any liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which they would otherwise have received.

 

58.3 The Charterers shall (within three (3) Business Days of demand by Owners) pay to the Owners an amount equal to any documented loss, liability or cost which the Owners (acting reasonably) determine will be or has been (directly or indirectly) suffered for or on account of tax by the Owners in respect of a Leasing Document.

 

58.4 Clause 58.3 shall not apply:

 

(a) with respect to any tax assessed on the Owners under the law of the jurisdiction in which the Owners are incorporated or, if different, the jurisdiction (or jurisdictions) in which the Owners are treated as resident for tax purposes if that tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by the Owners; or

 

(b) to the extent a loss, liability or cost is compensated for by an increased payment under Clause 58.2.

 

58.5 Notwithstanding any other provision to this Charter, if any deduction or withholding or other tax is or will be required to be made by the Charterers or the Owners in respect of a payment to the Owners as a result of the Owners being incorporated in a particular jurisdiction, the Owners shall have the right to transfer their interest in the Vessel (and this Charter) to any person nominated by the Owners and all costs in relation to such transfer shall be for the account of the Charterers.

 

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CLAUSE 59 – INCREASED COSTS

 

59.1 This 0 applies if the Owners notify the Charterers that they consider that as a result of:

 

(a) the introduction or alteration after the date of this Charter of a law or an alteration after the date of this Charter in the manner in which a law is interpreted or applied (disregarding any effect which relates to the application to payments under this Charter of a tax on the Owners’ overall net income); or

 

(b) complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Owners allocates capital resources to their obligations under this Charter) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Charter,

 

the Owners (or a parent company of them) has incurred or will incur an “increased cost”.

 

59.2 In this 0, “increased cost” means, in relation to the Owners:

 

(a) an additional or increased cost incurred as a result of, or in connection with, the Owners or the Owners’ parent company having entered into, or being a party to, this Charter, or funding the acquisition of the Vessel pursuant to the MOA or performing their obligations under this Charter (including as a result of, or in connection with, incorporating itself in a particular jurisdiction as requested by the Charterers or in order to fly a particular flag in respect of the Vessel);

 

(b) an additional or increased cost of funds relating to the financing the acquisition of the Vessel pursuant to the MOA; or

 

(c) a liability to make a payment or a return forgone, which is calculated by reference to any amounts received or receivable by the Owners under this Charter,

 

and for the purposes of this Clause, the Owners may in good faith allocate or spread costs and/or losses among their assets and liabilities (or any class of their assets and liabilities) on such basis as they consider appropriate.

 

59.3 Subject to the terms of Clause 59.1, the Charterers shall pay to the Owners, upon receipt of the Owners’ demand and any evidence thereto (where available to the Owners), the amounts which the Owners from time to time notify the Charterers to be necessary to compensate the Owners for the increased cost.

 

CLAUSE 60 – MISCELLANEOUS

 

60.1 Unless otherwise expressly stated to the contrary in this Charter, any payment which is due to be made on a day which is not a Business Day shall be made on the preceding Business Day instead.

 

60.2 If, at any time, any provision of any Leasing Document is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions under the law of that jurisdiction nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

 

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60.3 The Charterers waive any rights of sovereign immunity which they or any of their properties may enjoy in any jurisdiction and subjects itself to civil and commercial law with respect to their obligations under this Charter.

 

60.4 No term of this Charter is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Charter.

 

60.5 This Charter and each other Leasing Document 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 Charter or that Leasing Document, as the case may be.

 

CLAUSE 61 – FATCA

 

61.1 Defined terms

 

For the purposes of this 0, the following terms shall have the following meanings:

 

“Code” means the United States Internal Revenue Code of 1986, as amended.

 

“FATCA” means:

 

(a) sections 1471 to 1474 of the Code or any associated regulations;

 

(b) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or

 

(c) any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the IRS, the US government or any governmental or taxation authority in any other jurisdiction.

 

“FATCA Deduction” means a deduction or withholding from a payment under this Charter or the Leasing Documents required by or under FATCA.

 

“FATCA Exempt Party” means a Relevant Party that is entitled under FATCA to receive payments free from any FATCA Deduction.

 

“FATCA Non-Exempt Party” means any Relevant Party who is not a FATCA Exempt Party.

 

“IRS” means the United States Internal Revenue Service or any successor taxing authority or agency of the United States government.

 

“Relevant Party” means any of the parties to this Charter and the Leasing Documents.

 

61.2 FATCA Information

 

(a) Subject to paragraph (c) below, each Relevant Party shall, on the date of this Charter, and thereafter within ten (10) Business Days of a reasonable request by another Relevant Party:

 

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(i) confirm to that other party whether it is a FATCA Exempt Party or is not a FATCA Exempt Party; and

 

(ii) supply to the requesting party (with a copy to all other Relevant Parties) such other form or forms (including IRS Form W-8 or Form W-9 or any successor or substitute form, as applicable) and any other documentation and other information relating to its status under FATCA (including its applicable “pass thru percentage” or other information required under FATCA or other official guidance including intergovernmental agreements) as the requesting party reasonably requests for the purpose of the requesting party’s compliance with FATCA.

 

(b) If a Relevant Party confirms to any other Relevant Party that it is a FATCA Exempt Party or provides an IRS Form W-8 or W-9 to showing that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, or that the said form provided has ceased to be correct or valid, that party shall so notify all other Relevant Parties or provide the relevant revised form, as applicable, reasonably promptly.

 

(c) Nothing in this Clause shall oblige any Relevant Party to do anything which would or, in its reasonable opinion, might constitute a breach of any law or regulation, any policy of that party, any fiduciary duty or any duty of confidentiality, or to disclose any confidential information (including, without limitation, its tax returns and calculations); provided, however, that nothing in this paragraph shall excuse any Relevant Party from providing a true, complete and correct IRS Form W-8 or W-9 (or any successor or substitute form where applicable). Any information provided on such IRS Form W-8 or W-9 (or any successor or substitute forms) shall not be treated as confidential information of such party for purposes of this paragraph.

 

(d) If a Relevant Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with the provisions of this Charter or the provided information is insufficient under FATCA, then:

 

(i) if that party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such party shall be treated for the purposes of this Charter and the Leasing Documents as if it is a FATCA Non-Exempt Party; and

 

(ii) if that party failed to confirm its applicable passthru percentage then such party shall be treated for the purposes of this Charter and the Leasing Documents (and payments made thereunder) as if its applicable passthru percentage is 100%,

 

until (in each case) such time as the party in question provides sufficient confirmation, forms, documentation or other information to establish the relevant facts.

 

61.3 FATCA Deduction and gross-up by Relevant Party.

 

(a) If the representation made by the Charterers under 48.1(z) proves to be untrue or misleading such that the Charterers are required to make a FATCA Deduction, the Charterers shall make the FATCA Deduction and any payment required in connection with that FATCA Deduction within the time allowed and in the minimum amount required by FATCA.

 

(b) If the Charterers are required to make a FATCA Deduction then the Charterers shall increase the payment due from them to the Owners to an amount which (after making any FATCA Deduction) leaves an amount equal to the payment which would have been due if no FATCA Deduction had been required.

 

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(c) The Charterers shall promptly upon becoming aware that they must make a FATCA Deduction (or that there is any change in the rate or basis of a FATCA Deduction) notify the Owners accordingly. Within thirty (30) days of the Charterers making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, the Charterers shall deliver to the Owners evidence reasonably satisfactory to the Owners that the FATCA Deduction has been made or (as applicable) any appropriate payment paid to the relevant governmental or taxation authority.

 

61.4 FATCA Deduction by Owners.

 

The Owners may make any FATCA Deduction they are required by FATCA to make, and any payment required in connection with that FATCA Deduction, and the Owners shall not be required to increase any payment in respect of which they make such a FATCA Deduction or otherwise compensate the recipient for that FATCA Deduction.

 

61.5 FATCA Mitigation.

 

Notwithstanding any other provision to this Charter, if a FATCA Deduction is or will be required to be made by any party under Clause 61.4 in respect of a payment to the Owners as a result of the Owners not being a FATCA Exempt Party, the Owners shall have the right to transfer their interest in the Vessel (and this Charter) to any person nominated by the Owners and all costs in relation to such transfer shall be for the account of the Charterers.

 

CLAUSE 62 – ASSIGNMENT, TRANSFER AND REFINANCING

 

62.1 The Charterers shall not assign or transfer (whether by novation or otherwise) their rights and/or obligations under this Charter or any other Leasing Document without the prior written consent of the Owners.

 

62.2 The Charterers acknowledge that, at any time during the Charter Period:

 

(a) the Owners (at their own cost) are entitled to enter into certain funding arrangements with the Owners’ Financiers in order to refinance the Financing Amount (or part thereof), which funding arrangements may be secured, inter alia, by the relevant Financial Instruments;

 

(b) the Owners may do any of the following as security for the funding arrangements referred to in paragraph (a) above, in each case without consent of the Charterers (but after giving Charterers at least five (5) days prior written notice):

 

(i) execute a ship mortgage over the Vessel or any other Financial Instrument in favour of the Owners’ Financiers (provided that the Owners shall use reasonable endeavours to procure that the Owners’ Financiers enter into a quiet enjoyment letter on terms acceptable to the owners’ Financiers, Charterer and Owners);

 

(ii) assign their rights and interests to, in or in connection with this Charter and/or any other Leasing Document in favour of the Owners’ Financiers;

 

(iii) assign their rights and interests to, in or in connection with the Insurances, the Earnings and the Requisition Compensation of the Vessel in favour of the Owners’ Financiers; and

  

(iv) enter into any other document or arrangement which is necessary to give effect to such financing arrangements.

 

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62.3 The Charterers undertake to comply, and provide such information and documents reasonably required to enable the Owners to comply, with all such instructions or directions in regard to the employment, insurances, operation, repairs and maintenance of the Vessel as laid down in any Financial Instrument or as may be directed from time to time during the currency of this Charter by the Owners’ Financiers in conformity with any Financial Instrument provided always that the same are no more onerous than set out under the Leasing Documents. The Charterers further agree and acknowledge for themselves all relevant terms, conditions and provisions of each Financial Instrument (if any) and agree to acknowledge this in writing in any form that may be reasonably required by the Owners’ Financiers. The Charterers further agree to enter into any required acknowledgements of assignments and other customary documents as may be required in connection with the Financing Documents.

 

62.4 The Owners may procure a:

 

(a) change in the registered ownership of the Vessel; and/or

 

(b) assign or transfer by novation of any of its rights and obligations under any of the Leasing Documents (other than pursuant to Clause 62.2),

 

(any such event described in (a) and (b) above being a “Transfer”) to any affiliate or to another financial institution, trust, fund, leasing company or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in shipping loans, securities or other financial assets without the consent of the Charterers, provided that (other than in respect of a Transfer to an affiliate) the Owners shall give the Charterers at least 30 days prior written notice of their intention to effect a Transfer (a “Transfer Notice”). Within five (5) Business Days of the Owners serving a Transfer Notice on the Charterers, the Charterers may elect to serve a Purchase Option Notice on the Owners in accordance with Clause 55.2, following which the Charterers shall purchase the Vessel in accordance with the applicable terms of this Charter and the Owners shall not proceed with the relevant proposed Transfer (unless the Charterers fail to complete the purchase on the relevant Purchase Option Date in which case the Owners shall be free to effect such Transfer without reference to the Charterers and shall not be obliged to serve Transfer Notices for any future proposed Transfers). If the Charterers do not serve a Purchase Option Notice within the aforementioned five (5) Business Day period, then the Owners may proceed with the Transfer.

 

62.5 Any Transfer shall not in any manner whatsoever disturb or interfere with the Charterers’ lawful use, possession and quiet enjoyment of the Vessel during the Charter Period. The Charterers shall be liable to the applicable new owner of the Vessel for its performance of all obligations under this Charter (as novated) after any such Transfer and the Charterers shall procure that any party to a Leasing Document:

 

(i) becomes liable to the new of owner of the Vessel for its performance of all obligations pursuant to such Leasing Document; and

 

(ii) enters into all necessary documents or takes any necessary actions required for such Leasing Document and any Security Interest created thereunder remaining in full force and effect (or to be novated and/or re-executed) as from the completion of the relevant Transfer.

 

62.6 The Charterers agree and undertake to enter into any such usual documents and provide all necessary assistance as the Owners shall require to complete or perfect the any Transfer made pursuant to this 0 (Assignment, Transfer and Re-financing).

 

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CLAUSE 63 – CONFIDENTIALITY

 

The Parties agree to keep the terms and conditions of this Charter and any other Leasing Document (the “Confidential Information”) strictly confidential, provided that a Party may disclose Confidential Information in the following cases:

 

(a) it is already known to the public or becomes available to the public other than through the act or omission of the disclosing Party;

 

(b) it is required to be disclosed under the applicable laws of any Relevant Jurisdiction or by a governmental order, any stock exchange and/or securities and exchange commission laws and regulations including but not limited to the US SEC Rule or the Nasdaq Rules, decree, regulation or rule;

 

(c) in filings with a court or arbitral body in proceedings in which the Confidential Information is relevant and in discovery arising out of such proceedings;

 

(d) to any other party to a Leasing Document;

 

(e) to (or through) whom a Party assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Leasing Document (as permitted by the terms thereof);

 

(f) to any of the following persons (on a need to know basis):

 

(i) a shareholder or an Affiliate of either Party or a party referred to in paragraph (d);

 

(ii) its board of directors, employees, its shareholders, auditors, third party managers, external counsels or accountants;

 

(iii) professional advisers retained by a disclosing party;

 

(iv) any rating agencies;

 

(v) the Approved Classification Society;

 

(vi) the ship registry of the Flag State; and

 

(vii) in the case of the disclosing party being the Owners, persons advising on, providing or considering the provision of financing to the Owners or an Affiliate of the Owners,

 

provided that the disclosing party shall exercise due diligence to ensure that no such person shall disclose Confidential Information to any other party save for circumstances arising which are similar to those described under this Clause or such other circumstances as may be permitted by all Parties;

 

(g) to any person which is a classification society or other entity which the Owners or the Owners’ Financiers have engaged to make the calculations necessary to enable the Owners and/or the Owners’ Financiers to comply with their reporting obligations under the Poseidon Principles; or

 

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(h) with the prior written consent of all Parties and if required by any Party, subject to a corresponding confidentiality undertaking obtained from the party to whom the Confidential Information is disclosed to.

 

CLAUSE 64 – GENERAL APPLICATION OF PROCEEDS

 

64.1 Any Net Trading Proceeds, Net Sales Proceeds, Total Loss Proceeds, any proceeds realised by the Owners in connection with the enforcement of the Security Documents (unless otherwise specified in the Security Documents) and any proceeds received by the Owners from the Other Owner (as trustee for the Owners) shall be applied in the following order of application against amounts payable under the Leasing Documents:

 

(a) firstly, in or towards any amounts outstanding under the Leasing Documents other than the Termination Sum (including but not limited to any costs and expenses incurred in the enforcement of the Security Documents, to the extent these are not covered under the Termination Sum);

 

(b) secondly, in or towards satisfaction of the Charterers’ obligation to pay the Termination Sum (or such portion of it that then remains unpaid) in any order of application in the amounts comprising the Termination Sum as the Owners may determine; and

 

(c) thirdly, upon satisfaction in full of all amounts payable to the Owners under the Leasing Documents, in payment of any surplus to the Charterers, but subject always to the terms of the General Assignment.

 

CLAUSE 65 – GOVERNING LAW AND ENFORCEMENT

 

65.1 This Charter, and any non-contractual obligations arising out of or in connection with it, shall be governed by English law.

 

65.2 Any dispute arising out of or in connection with any Leasing Document (including a dispute regarding the existence, validity or termination of any Leasing Document or any non-contractual obligation arising out of or in connection with any Leasing Document) (a “Dispute”) shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.

 

65.3 The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced. The reference shall be to three (3) arbitrators. A Party wishing to refer the Dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other Party requiring the other Party to appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other Party appoints its own arbitrator and give notice that it has done so within the fourteen (14) days specified. If the other Party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the Party referring a Dispute to arbitration may, without the requirement of any further prior notice to the other Party, appoint its arbitrator as sole arbitrator and shall advise the other Party accordingly. The award of a sole arbitrator shall be binding on both Parties as if he had been appointed by agreement. Nothing herein shall prevent the Parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.

 

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65.4 In cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 (or such other sum as the Parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.

 

CLAUSE 66 – DEFINITIONS

 

66.1 In this Charter the following terms shall have the meanings ascribed to them below:

 

“Acceptance Certificate” means a certificate substantially in the form set out in Schedule 1 (Acceptance Certificate) to be signed by the Charterers at Delivery.

 

“Account Bank” means Alpha Bank S.A. or such other bank approved by the Owners.

 

“Account Charge” means the document creating charge(s) over the Operating Account executed or to be executed by the Charterers in favour of the Owners.

 

“Amendment and Restatement Deed” means the amendment and restatement deed dated 25 September 2023 and made among the Owners, the Charterers and the Guarantor in respect of this Charter.

 

“Advance Charterhire” has the meaning as defined under Clause 36.2 of the Charter.

 

“Affiliate” means in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.

 

“Annex VI” means Annex VI of the Protocol of 1997 to amend the International Convention for the Prevention of Pollution from Ships 1973 (Marpol), as modified by the Protocol of 1978 relating thereto.

 

“Anti-Bribery and Anti-Corruption Laws” means the US Foreign Corrupt Practices Act of 1977 as amended and the rules and regulations thereunder, the UK Bribery Act of 2010, and/or any similar laws, rules or regulations issued, administered or enforced by the United States, United Kingdom, the European Union or any of its member states, or any other country or governmental agency having jurisdiction over the Owners or any Obligors or their respective subsidiaries.

 

“Anti-Money Laundering Laws” means all applicable financial record-keeping and reporting requirements, anti-money laundering statutes (including all applicable rules and regulations thereunder) and all applicable related or similar laws, rules, regulations or guidelines, of all jurisdictions including and without limitation, the United States of America, the United Kingdom, Hong Kong and the People’s Republic of China and which in each case are:

 

(a) issued, administered or enforced by any governmental agency having jurisdiction over the Charterers or any other Obligors or their respective subsidiaries;

 

(b) of any jurisdiction in which the Charterers or any other Obligor conducts business; or

 

(c) to which the Charterers or any other Obligor is subjected or subject to.

 

“Approved Classification Society” means Bureau Veritas, Lloyds’ Register or any other classification society which is a member of the International Association of Classification Societies and approved by the Owners in writing. 

 

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“Approved Commercial Manager” means Fidelity Marine Inc., Seanergy Management Corp. or any other reputable ship management company as may be approved by the Owners in writing prior to its appointment as commercial manager of the Vessel.

 

“Approved Manager” means the Approved Commercial Manager or the Approved Technical Manager.

 

“Assignable Sub-charter” means any charter or any other form of employment contract relating to the Vessel, whether or not already in existence with a duration exceeding or capable of exceeding 12 months (inclusive of options to renew).

 

“Approved Technical Manager” means V Ships Limited (a Cyprus entity), V Ships Greece, Seanergy Shipmanagement Corp. or any other reputable ship management company as may be approved by the Owners in writing prior to its appointment as technical manager of the Vessel (such approval from the Owners not to be required for the appointment of an entity controlled by the Guarantor).

 

“Approved Valuer” means Simpson Spence Young, Clarksons Platou, Maersk Broker, Arrow Shipbrokers, Howe Robinson, Braemar ACM Shipbroking, Barry Rogliano Salles or such other independent and reputable shipbroker nominated by the Charterers and approved by the Owners.

 

“Arrangement Fee” has the meaning as defined under Clause 44.1.

 

“Breakfunding Costs” means all breakfunding costs and expenses (excluding the margin) incurred or payable by the Owners when a repayment or prepayment under the relevant funding arrangement entered into by the Owners for the purpose of financing the Purchase Price (or any part thereof) does not fall on a Payment Date, a Purchase Option Date or a date specified by the Owners in any Termination Notice.

 

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for business in the principal business centres of Shanghai, Singapore and Athens and/or:

 

(a) in respect of a day on which a payment is required to be made or other dealing is due to take place under this Charter in Dollars, a day on which banks are open in New York City; and

 

(b) in respect of the fixing of an interest rate in relation to the Owners’ Costs, a day which is a US Government Securities Business Day.

 

“Cancelling Date” has the meaning given to such term under the MOA.

 

“Change of Control” means:

 

(a) the Guarantor ceases to own and/or control directly or indirectly, all of the shares and voting rights in the Charterers; and/or

 

(b) the Guarantor ceases to be listed on Nasdaq.

 

“Charter Period” means the period described in Clause 32.1 unless it is terminated earlier in accordance with the provisions of this Charter. 

 

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“Charterhire” means each of, as the context may require, all of the instalments of hire payable hereunder on each applicable Payment Date comprising in each case both Fixed Charterhire and Variable Charterhire, as further detailed in 0.

 

“Commencement Date” means the date on which Delivery takes place.

 

“Compliance Certificate” means a certificate substantially in the form set out in Schedule 3.


“Credit Adjustment Spread” means zero point two two per cent. (0.22%) per annum.

 

“Delivery” means the physical and legal delivery of the Vessel from the Owners to the Charterers pursuant to the terms of this Charter.

 

“Dollars” and “US$” mean the lawful currency for the time being of the United States of America.

 

“Earnings” means all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Charterers and which arise out of the use or operation of the Vessel, including (but not limited to):

 

(a) all freight, hire and passage moneys;

 

(b) any compensation payable in the event of requisition of the Vessel for hire;

 

(c) any remuneration for salvage and towage services;

 

(d) any demurrage and detention moneys;

 

(e) damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Vessel;

 

(f) all moneys which are at any time payable to the Charterers in relation to general average contribution; and

 

(g) if and whenever the Vessel is employed on terms whereby any moneys falling within paragraphs (a) to (f) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to the Vessel.

 

“Environmental Claim” means any claim by any governmental, judicial or regulatory authority or any other person which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law and, for this purpose, “claim” includes a claim for damages, compensation, contribution, injury, fines, losses and penalties or any other payment of any kind, including in relation to clean-up and removal, whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset.

 

“Environmental Incident” means:

 

(a) any release, emission, spill or discharge of Environmentally Sensitive Material whether within the Vessel or from the Vessel into any other vessel or into or upon the air, water, land or soils (including the seabed) or surface water; or

 

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(b) any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, water, land or soils (including the seabed) or surface water from a vessel other than the Vessel and which involves a collision between the Vessel and such other vessel or some other incident of navigation or operation, in either case, in connection with which the Vessel is actually or potentially liable to be arrested, attached, detained or injuncted and/or the Vessel and/or any Obligors and/or any operator or manager of the Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or

 

(c) any other incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, water, land or soils (including the seabed) or surface water otherwise than from the Vessel and in connection with which the Vessel is actually or potentially liable to be arrested and/or where any Obligors and/or any operator or manager of the Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action.

 

“Environmental Law” means any present or future law relating to pollution or protection of human health or the environment, to conditions in the workplace, to the carriage, generation, handling, storage, use, release or spillage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material.

 

“Environmentally Sensitive Material” means and includes all contaminants, oil, oil products, toxic substances and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous.

 

“Expiry Owners’ Costs” means an amount equal to US$6,600,000.

 

“Fair Market Value” means the value of the Vessel determined as follows:

 

(a) subject to sub-paragraph (b) below, the arithmetic mean of the valuations shown by two (2) valuation reports prepared:

 

(i) on a date no earlier than fifteen (15) days prior to the relevant date of valuation (except in the case of the Initial Market Value, in which cash such valuation reports shall be prepared on a date no earlier than fifteen (15) days prior to the Commencement Date);

 

(ii) by Approved Valuers one nominated by the Owners and the other nominated by the Charterers;

 

(iii) without physical inspection of the Vessel or other vessel; and

 

(iv) on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms as between a willing seller and a willing buyer, without taking into account any charter whatsoever; and

 

(b) if there is a discrepancy of five per cent. (5%) or more between the market valuations shown on the two valuation reports obtained pursuant to paragraph (a) above (using the lower valuation figure as the denominator), the arithmetic mean of the valuations shown by three (3) valuation reports each prepared on the same terms and conditions as set out under paragraph (a) above (except that the third valuation report additionally required under this sub-paragraph (b) shall be prepared by an Approved Valuer nominated by the Owners).

 

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“Fee Letter” means the fee letter referred to under Clause 44.1 for payment of the Arrangement Fee.

 

“Financial Indebtedness” means, in relation to a person (the “debtor”), a liability of the debtor:

 

(a) for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;

 

(b) under any loan stock, bond, note or other security issued by the debtor;

 

(c) under any acceptance credit, guarantee or letter of credit facility made available to the debtor;

 

(d) under a financial lease, a deferred purchase consideration arrangement (other than deferred payments for assets or services obtained on normal commercial terms in the ordinary course of business) or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;

 

(e) under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or

 

(f) under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs (a) to (e) if the references to the debtor referred to the other person.

 

“Financial Instruments” means the applicable loan or facility agreement entered into between the Owners (or their affiliate) and the Owners’ Financiers and any mortgage, deed of covenants, assignment in respect of this Charter, assignment in respect of the Guarantees, assignment in respect of Earnings, Insurances and Requisition Compensation, manager’s undertaking and subordination (including assignment of manager’s interests in the Insurances) or any other financial security instruments granted by the Owners to the Owners’ Financiers as security for the financing or refinancing of the Owners’ acquisition of the Vessel.

 

“Financing Amount” shall have the same meaning as defined under the MOA.


“First Payment Date” shall have the meaning as defined under 36.5(a).

 

“Fixed Charterhire” shall have the meaning as defined under Clause 36.4(a).

 

“Flag State” means the flag state named in Box 5 of this Charter or any other state or jurisdiction approved in writing by the Owners.

 

“Fleet Vessel” means any ship or vessel (including, but not limited to, the Vessel and the Other Vessel) from time to time wholly leased, hired, chartered or financed under any lease, hire purchase agreement, charter or any other financing arrangement by affiliates of the Owners and/or the Other Owner to subsidiaries or affiliates of the Guarantor. 

 

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“Funding Rate” means any individual rate certified by the Owners to the Charterers pursuant to Clause 37.3(c)(ii).

 

“GAAP” means generally accepted accounting principles in the United States of America or such other accounting principles as agreed by both Parties.

 

“General Assignment” means the assignment agreement executed or to be executed between the Charterers and the Owners in respect of the Vessel, pursuant to which the Charterers shall, inter alia, assign its rights under:

 

(a) the Earnings, Insurances, Requisition Compensation in respect of the Vessel; and

 

(b) any Assignable Sub-charter,

 

in favour of the Owners.

 

“Group” means the Guarantor and its Subsidiaries (whether directly or indirectly owned) for the time being.

 

“Guarantee” means the guarantee executed by the Guarantor in favour of the Owners on or about the date hereof.

 

“Guarantor” means Seanergy Maritime Holdings Corp., a corporation incorporated and existing under the laws of the Republic of Marshall Islands.

 

“Hire Period” means (i) in the case of the first Hire Period, the period commencing on the Commencement Date and ending on the First Payment Date; and (ii) in the case of each subsequent Payment Date, the period of commencing on the last day of the preceding Hire Period and ending on the next occurring Payment Date.

 

“Historic Term SOFR” means, in relation to any Hire Period, the most recent applicable Term SOFR for a period equal in length to that Hire Period and which is as of a day which is no more than three (3) US Government Securities Business Days before the Quotation Day.

 

“Holding Company” means, in relation to a person, any other person in relation to which (i) it is a Subsidiary or (ii) it is a Subsidiary of a Subsidiary.

 

“IAPPC” means a valid international air pollution prevention certificate for the Vessel issued pursuant to the MARPOL Protocol.

 

“Initial Market Value” means, in relation to the Vessel, the Fair Market Value of the Vessel as at a date no earlier than fifteen (15) days prior to the Commencement Date.

 

“Insurances” means:

 

(a) all policies and contracts of insurance, including entries of the Vessel in any protection and indemnity or war risks association, which are effected in respect of the Vessel or otherwise in relation to it whether before, on or after the date of this Charter; and

 

(b) all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium and any rights in respect of any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Charter.

 

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“Interpolated Historic Term SOFR” means, in relation to any Hire Period, the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:

 

(a) either:

 

(i) the most recent applicable Term SOFR (as of a day which is not more than three (3) US Government Securities Business Days before the Quotation Day for the longest period (for which Term SOFR is available) which is less than that Hire Period; or

 

(ii) if no such Term SOFR is available for a period which is less than that Hire Period, SOFR for a day which is no more than five (5) US Government Securities Business Days (and no less than two (2) US Government Securities Business Days) before the Quotation Day; and

 

(b) the most recent applicable Term SOFR (as of a day which is not more than three (3) US Government Securities Business Days before the Quotation Day) for the shortest period (for which Term SOFR is available) which exceeds that Hire Period.

 

“Interpolated Term SOFR” means, in relation to any Hire Period, the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:

 

(a) either:

 

(i) the applicable Term SOFR (as of the Quotation Day in respect of that Hire Period) for the longest period (for which Term SOFR is available) which is less than that Hire Period; or

 

(ii) if no such Term SOFR is available for a period which is less than that Hire Period, SOFR for the day which is two (2) US Government Securities Business Days before the Quotation Day; and

 

(b) the applicable Term SOFR (as of the Quotation Day in respect of that Hire Period) for the shortest period (for which Term SOFR is available) which exceeds that Hire Period.

 

“Interest Rate” means, in relation to each Hire Period and subject to Clause 37.3, the percentage rate of interest per annum equal to the aggregate of (i) the applicable Reference Rate for the relevant Hire Period, (ii) the Margin and (iii) the Credit Adjustment Spread.

 

“ISM Code” means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organisation Assembly as Resolutions A.741 (18) and A.788 (19), as the same may be amended or supplemented from time to time (and the terms “safety management system”, “Safety Management Certificate” and “Document of Compliance” have the same meanings as are given to them in the ISM Code).

 

“ISPS Code” means the International Ship and Port Security Code as adopted by the Conference of Contracting Governments to the Safety of Life at Sea Convention 1974 on 13 December 2002 and incorporated as Chapter XI-2 of the Safety of Life at Sea Convention 1974, as the same may be supplemented or amended from time to time. 

 

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“ISSC” means a valid international ship security certificate for the Vessel issued pursuant to the ISPS Code.

 

“Leasing Documents” means this Charter, the Amendment and Restatement Deed, the Guarantees, the MOA, the Fee Letter and the Security Documents and each, as the context may require, the “Leasing Document”.

 

“Major Casualty” means any casualty to the Vessel in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds US$1,000,000 or the equivalent in any other currency.

 

“Management Agreement” means:

 

(a) the technical management agreement dated 19 May 2021 and made between V Ships Limited and the Charterers;

 

(b) the commercial management agreement dated 2 March 2015 and made between Fidelity Marine Inc. and Seanergy Management Corp. as amended by a first amendment dated 11 September 2015, a second amendment dated 24 February 2016, a third amendment dated 1 February 2018, a fourth amendment dated 28 June 2018 and as further amended from time to time), as acceded to by the Charterers pursuant to an accession letter dated 19 May 2021; and/or

 

(c) such other management agreement for the technical and/or commercial management of the Vessel as may be subsequently entered into in respect of the Vessel by the Charterers with an Approved Manager.

 

“Manager’s Undertaking” means, in relation to an Approved Manager, a letter of undertaking to be executed by that Approved Manager in favour of the Owners subordinating the rights of that Approved Manager against the Vessel and the Charterers to the rights of the Owners.

 

“Margin” means three point fifty per cent. (3.50%) per annum.

 

“Market Disruption Rate” means the percentage rate per annum which is the aggregate of the Reference Rate and the Credit Adjustment Spread.

 

“MARPOL Protocol” means Annex VI (Regulations for the Prevention of Air Pollution from Ships) to the International Convention for the Prevention of Pollution from Ships 1973 (as amended in 1978 and 1997).

 

“Material Adverse Effect” means, in the reasonable opinion of the Owners, a material adverse effect on:

 

(a) the business, operations, property, condition (financial or otherwise) of any Obligor or any member of the Group; or

 

(b) the ability of any Obligor to perform its obligations under any Leasing Document to which it is a party; or

 

(c) the validity or enforceability of, or the effectiveness or ranking of any Security Interests granted pursuant to, any of the Leasing Documents or the rights or remedies of the Owners under any of the Leasing Documents.

 

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“MOA” means the memorandum of agreement dated on or about the date of this Charter and made between the Owners (in their capacity as buyers) and the Charterers (in their capacity as sellers), pursuant to which the Charterers agree to sell and the Owners agree to purchase the Vessel upon the terms and conditions set out therein.

 

“Net Sales Proceeds” has the meaning given to it under Clause 42.1(c).

 

“Net Trading Proceeds” has the meaning given to it under Clause 42.1(b).

 

“Nominated Purchaser” has the meaning given to it under Clause 42.1(c).

 

“Nomination Period” has the meaning given to it under Clause 42.1(c).

 

“Obligatory Insurances” means any insurances of the Vessel required to be effected by or on behalf of the Charterers pursuant to 0.

 

“Obligors” means:

 

(a) the Charterers;

 

(b) the Guarantor;

 

(c) any Approved Manager which is an entity within the Group;

 

(d) any sub-charterer of the Vessel which is an entity within the Group; and

 

(e) any other party providing security for the Charterers’ obligations under this Charter pursuant to a Security Document or otherwise (except any Approved Manager or sub-charterer which are not entities within the Group).

 

“Operating Account” means an interest bearing account with account number 960- 01- 5006034700 opened in the name of the Charterers with the Account Bank.

 

“Original Financial Statements” means in relation to the Guarantor, its audited consolidated financial statements for the fiscal year ended 31 December 2020.

 

“Original Jurisdiction” means, in relation to an Obligor, the jurisdiction under whose laws they are incorporated as at the date of this Charter.

 

“Other Charter” means, in relation to the Other Vessel, the bareboat charterparty dated on or around the date of this Charter entered into between the Other Owner and the Other Charterer.

 

“Other Charterer” means Patriot Shipping Co.

 

“Other Owner” means Sea 241 Leasing Co. Limited.

 

“Other Vessel” means m.v. Hellasship.

 

“Owners’ Costs” means, on any relevant date, (i) the Financing Amount minus (ii) the aggregate Fixed Charterhire which has been paid by the Charterers and received by the Owners as at such date. 

 

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“Owners’ Financier” means any financier providing financing or refinancing facilities to the Owners or any affiliate of the Owners in respect of the Owners’ purchase and/or lease of the Vessel to the Charterers under the terms of the Leasing Documents.

 

“Owners’ Surveyor” means the surveyor appointed by the Owners in accordance with Clause 7.

 

“Party” means a party to this Charter, namely the Owners or the Charterers.

 

“Payment Date” shall have the meaning as defined under Clause 36.5.

 

“Permitted Security Interest” means:

 

(a) any Security Interest created by a Security Document or a Financial Instrument;

 

(b) any lien for unpaid master’s and crew’s wages in accordance with the ordinary course of operation of the Vessel or in accordance with usual reputable maritime practice;

 

(c) any lien for salvage;

 

(d) any lien for master’s disbursements incurred in the ordinary course of trading;

 

(e) any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of the Vessel provided such liens do not secure amounts more than thirty (30) days overdue;

 

(f) any Security Interest created in favour of a plaintiff or defendant in any action of the court or tribunal before whom such action is brought as security for costs and expenses where the Owners are prosecuting or defending such action in good faith by appropriate steps; and

 

(g) Security Interests arising by operation of law in respect of taxes which are not overdue or for payment of taxes which are overdue for payment but which are being contested by the Owners or the Charterers in good faith by appropriate steps and in respect of which adequate reserves have been made,

 

provided that the foregoing have not arisen due to the default or omission of any Obligor.

 

“Poseidon Principles” means the financial industry framework for assessing and disclosing the climate alignment of ship finance portfolios published in June 2019 as the same may be amended or replaced to reflect changes in applicable law or regulation or the introduction of or changes to mandatory requirements of the International Maritime Organisation from time to time.

 

“Potential Termination Event” means, an event or circumstance specified in 0 (Termination Event) which would with the giving of any notice, the lapse of time, and/or a determination of the Owners, constitute a Termination Event.

 

“Prepositioning Date” shall have the same meaning as defined under the MOA.

 

“Prohibited Countries” means those countries and territories subject to country-wide or territory-wide Sanctions and/or trade embargoes from time to time during the Charter Period, in particular but not limited to pursuant to the U.S.’s Office of Foreign Assets Control of the U.S. Department of Treasury (“OFAC”) or the United Nations.

 

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“Prohibited Person” means any person, entity or any other party which is (i) located, domiciled, resident or incorporated in a Prohibited Country, and/or (ii) subject to any sanction administrated by the United Nations, the European Union, the United States and the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the United Kingdom, His Majesty’s Treasury (“HMT”) and the Foreign and Commonwealth Office of the United Kingdom, the Special Administrative Region of Hong Kong, the People’s Republic of China and/or (iii) owned or controlled by or affiliated with persons, entities or any other parties as referred to in (i) and (ii).

 

“Published Rate” means SOFR or Term SOFR for any Quoted Tenor.

 

“Published Rate Replacement Event” means, in relation to any Published Rate:

 

(a) the methodology, formula or other means of determining that Published Rate has, in the opinion of the Owners, materially changed;

 

(b) ​

 

(i)

 

(A) the administrator of that Published Rate or its supervisor publicly announces that such administrator is insolvent; or

 

(B) information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Published Rate is insolvent,

 

provided that, in each case, at that time, there is no successor administrator to continue to provide that Published Rate;

 

(ii) the administrator of that Published Rate publicly announces that it has ceased or will cease, to provide that Published Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide that Published Rate;

 

(iii) the supervisor of the administrator of that Published Rate publicly announces that such Published Rate has been or will be permanently or indefinitely discontinued; or

 

(iv) the administrator of that Published Rate or its supervisor announces that that Published Rate may no longer be used; or

 

(c) the administrator of that Published Rate (or the administrator of an interest rate which is a constituent element of that Published Rate) determines that that Published Rate should be calculated in accordance with its reduced submissions or other contingency or fallback policies or arrangements and either:

 

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(i) the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Owners and the Charterers) temporary; or

 

(ii) that Published Rate is calculated in accordance with any such policy or arrangement for a period no less than a reasonable period determined by the Owners; or

 

(d) in the opinion of the Owners, that Published Rate is otherwise no longer appropriate for the purposes of calculating interest under this Charter.

 

“Purchase Option” means the purchase option referred to in Clause 55.1.

 

“Purchase Option Date” shall have the meaning ascribed thereto in Clause 55.2.

 

“Purchase Option Fee” means:

 

(a) if the Purchase Option is exercised on the second (2nd) anniversary of the Commencement Date (or prior to it but only in accordance with Clause 62.4), two point five per cent. (2.50%) of the Owners’ Costs on that date;

 

(b) if the Purchase Option is exercised on the third (3rd) anniversary of the Commencement Date, one point five per cent. (1.50%) of the Owners’ Costs on that date; and

 

(c) if the Purchase Option is exercised on the fourth (4th) or fifth (5th) anniversary of the Commencement Date, zero per cent. (0%) of the Owners’ Costs on that date.

 

“Purchase Option Notice” shall have the meaning ascribed thereto in Clause 55.2.

 

“Purchase Option Price” means, in respect of any Purchase Option Date:

 

(a) if the Purchase Option Date falls prior to the last day of the Charter Period, the aggregate of:

 

(i) the Owners’ Costs prevailing as at the relevant Purchase Option Date;

 

(ii) any Variable Charterhire accrued but unpaid as at the date of payment of the Purchase Option Price;

 

(iii) any Purchase Option Fee;

 

(iv) any Breakfunding Costs;

 

(v) any reasonable and documented legal or other costs incurred by the Owners in connection with the exercise of the Purchase Option under 0 (Purchase Option); and

 

(vi) aside from the amounts described under paragraphs (i) to (v) above, any other moneys due and owing under the Leasing Documents at the relevant Purchase Option Date;

 

(b) if the Purchase Option Date falls on the last day of the Charter Period, the aggregate of:

 

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(i) the Expiry Owners’ Costs;

 

(ii) any Charterhire accrued but unpaid as at the date of payment of the Purchase Option Price;

 

(iii) any reasonable and documented legal or other costs incurred by the Owners in connection with the exercise of the Purchase Option under 0 (Purchase Option); and

 

(iv) aside from the amounts described under paragraphs (i) to (iii) above, any other moneys due and owing under the Leasing Documents at the relevant Purchase Option Date.

 

“Purchase Price” has the meaning given to it in the MOA.

 

“Quotation Day” means, in relation to any Hire Period, two (2) US Government Securities Business Days before the first day of that Hire Period unless market practice differs in the relevant syndicated loan market in which case the Quotation Day will be determined by the Owners in accordance with that market practice (and if quotations would normally be given on more than one day, the Quotation Day will be the last of those days).

 

“Quoted Tenor” means, in relation to Term SOFR, any period for which that rate is customarily displayed on the relevant page or screen of an information service.

 

“Reference Rate” means, in relation to a Hire Period:

 

(a) the applicable Term SOFR as of the relevant Quotation Day and for a period equal in length to the relevant Hire Period; or

 

(b) as otherwise determined pursuant to Clause 36.4A or Clause 37,

 

and if, in either case, that rate is less than zero, the Reference Rate shall be deemed to be zero.

 

“Relevant Jurisdiction” means, in relation to an Obligor:

 

(a) its Original Jurisdiction;

 

(b) any jurisdiction where any property owned by it and charged under a Leasing Document is situated;

 

(c) any jurisdiction where it conducts its business; or

 

(d) any jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it creating a Security Interest.

 

“Relevant Nominating Body” means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.

 

“Replacement Reference Rate” means a reference rate which is:

 

(a) formally designated, nominated or recommended as the replacement for a Published Rate by:

 

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(i) the administrator of that Published Rate; or

 

(ii) any Relevant Nominating Body,

 

and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the “Replacement Reference Rate” will be the replacement under paragraph (ii) above;

 

(b) in the opinion of the Owners, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor or alternative to a Published Rate; or

 

(c) in the opinion of the Owners, an appropriate successor or alternative to a Published Rate.

 

“Reporting Time” means close of business in Shanghai on the date falling one (1) Business Day after the Quotation Day for the relevant Hire Period.

 

“Requisition Compensation” includes all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (a) of the definition of “Total Loss”.

 

“Sanctions” means any sanctions, embargoes, freezing provisions, prohibitions or other restrictions relating to trading, doing business, investment, exporting, financing or making assets available (or other activities similar to or connected with any of the foregoing):

 

(a) imposed by law or regulation of the United Kingdom, the Council of the European Union, the United Nations or its Security Council, the People’s Republic of China, the Special Administrative Region of Hong Kong or the United States of America regardless of whether the same is or is not applicable or binding on any Obligor; or

 

(b) otherwise imposed by any law or regulation which are applicable to and/or binding on any Obligor (which shall include without limitation, any extra-territorial sanctions imposed by law or regulation of the United States of America).

 

“Sanctions Advisory” means the Sanctions Advisory for the Maritime Industry, Energy and Metals Sectors, and Related Communities issued May 14, 2020 by the US Department of the Treasury, Department of State and Coast Guard, as may be amended or supplemented, and any similar future advisory.

 

“Security Documents” means:

 

(a) the Account Charge;

 

(b) the General Assignment;

 

(c) the Shares Pledge;

 

(d) each Manager’s Undertaking; and

 

(e) any other security document conferring any Security Interest in respect of the obligations of the Charterers under or in connection with this Charter.

 

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“Security Interest” means: 

 

(a) a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;

 

(b) the security rights of a plaintiff under an action in rem; or

 

(c) any other right which confers on a creditor or potential creditor a right or privilege to receive the amount actually or contingently due to it ahead of the general unsecured creditors of the debtor concerned; however this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution.

 

“Shares Pledge” means a first priority pledge over the shares of the Charterers executed or to be executed by the Guarantor in favour of the Owners.

 

“SOFR” means the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York (or any other person which takes over the administration of that rate) published (before any correction, recalculation or republication by the administrator) by the Federal Reserve Bank of New York (or any other person which takes over the publication of that rate).

 

“Statement of Compliance” means a Statement of Compliance related to fuel oil consumption pursuant to regulations 6.6 and 6.7 of Annex VI.

 

“Subsidiary” means a subsidiary within the meaning of section 1159 of the UK Companies Act 2006.

 

“Term SOFR” means the term SOFR reference rate administered by CME Group Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant period published (before any correction, recalculation or republication by the administrator) by CME Group Benchmark Administration Limited (or any other person which takes over the publication of that rate).

 

“Termination Date” has the meaning given to it under Clause 47.2.

 

“Termination Event” means any event described in 0 (Termination Events).

 

“Termination Fee” means two per cent. (2.00%) of the Owners’ Costs as at the relevant date.

 

“Termination Notice” has the meaning given to it under Clause 47.2.

 

“Termination Sum” means, in respect of any date (such date being referred to as the “Relevant Date” for the purposes of this definition only), the aggregate of (without double counting amounts that may be included in more than one sub-paragraph below):

 

(a) the Owners’ Costs prevailing as at the Relevant Date;

 

(b) any Variable Charterhire accrued and unpaid as at the date of payment of the Termination Sum;

 

(c) the Termination Fee (other than in connection with a payment of the Termination Sum following a Total Loss);

 

(d) any Breakfunding Costs;

 

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(e) any and all evidenced and documented direct costs, losses and liabilities incurred by the Owners as a result of the early termination of the leasing under this Charter including but not limited to any legal costs, any agency or broker fees incurred in attempting to re-charter or otherwise dispose of the Vessel;

 

(f) any and all documented costs, losses and liabilities incurred by the Owners in locating, repossessing, recovering, repositioning, berthing, insuring and maintaining the Vessel and/or in collecting any payments due under this Charter and/or in obtaining the due performance of the obligations of the Charterers under this Charter or the other Leasing Documents; and

 

(g) aside from the amounts described under paragraphs (a) to (f) above, any other moneys due and owing under the Leasing Documents at the Relevant Date including any default interest on amounts under (a) to (f) above.

 

“Total Loss” means:

 

(a) any expropriation, confiscation, requisition (other than a requisition for hire) or acquisition of the Vessel, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority;

 

(b) any requisition for hire, arrest, condemnation, capture, seizure or detention of the Vessel (including any hijacking or theft but excluding any event specified in paragraph (a)  of this definition) unless it is redelivered within sixty (60) days to the full control of the Owners or the Charterers; or

  

(c) actual, constructive, compromised, agreed or arranged total loss of the Vessel.

 

“Total Loss Date” means, in relation to the Total Loss of the Vessel:

 

(a) in the case of a Total Loss occurring under paragraph (a) of the definition of Total Loss, on the date on which the expropriation, confiscation, requisition or, as the case may be, the acquisition of the Vessel is completed by delivery of the Vessel to the relevant government or official authority or the person or persons claiming to be or to represent the relevant government or official authority;

 

(b) in the case of a Total Loss occurring under paragraph (b) of the definition of Total Loss, the date falling on the expiration of such sixty (60) day period;

 

(c) in the case of an actual loss of the Vessel, the date on which it occurred; and

 

(d) in the case of a constructive, compromised, agreed or arranged total loss of the Vessel, the earliest of:

 

(i) the date when the Vessel was last heard of;

 

(ii) the date on which a notice of abandonment is given to the insurers; and

 

(iii) the date of any compromise, arrangement or agreement made by or on behalf of the Charterers with the insurers in which the insurers agree to treat the Vessel as a Total Loss.

 

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“Total Loss Payment Date” means, following the occurrence of a Total Loss, the earlier of:

 

(a) the date falling one hundred and fifty (150) days after the Total Loss Date or such later date as the Owners may agree; and

 

(b) the date on which the Owners receive the Total Loss Proceeds.

 

“Total Loss Proceeds” means the proceeds of any policy or contract of insurance or any Requisition Compensation in each case arising in respect of a Total Loss.

 

“Transfer” has the meaning given to it under Clause 62.4.

 

“Transfer Notice” has the meaning given to it under Clause 62.4.

 

“Treasury Transaction” means any derivative transaction entered into in connection with protection against or benefit from any fluctuation in price or rate.

 

“US” means the United States of America.

 

“US Government Securities Business Day” means any day other than:

 

(a) a Saturday or a Sunday; and

 

(b) a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in US Government securities.

 

“US Tax Obligor” means:

 

(a) a person which is resident for tax purposes in the US; or

 

(b) a person some or all of whose payments under the Leasing Documents are from sources within the US for US federal income tax purposes.

 

“Variable Charterhire” shall have the meaning as defined under Clause 36.4(b).

 

“Vessel” means the bulker vessel named m.v. Patriotship and registered or to be registered under the name of the Owners under the Flag State upon Delivery.

 

66.2 In this Charter:

 

“agreed form” means, in relation to a document, such document in a form agreed in writing between the Owners and the Charterers;

 

“asset” includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;

 

“company” includes any partnership, joint venture and unincorporated association;

 

“consent” includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation; 

 

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“contingent liability” means a liability which is not certain to arise and/or the amount of which remains unascertained;

 

“control” over a particular company means the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:

 

(a) cast, or control the casting of, fifty one per cent. (51%) or more of the maximum number of votes that might be cast at a general meeting of such company; or

 

(b) appoint or remove all, or the majority, of the directors or other equivalent officers of such company; or

 

(c) give directions with respect to the operating and financial policies of such company with which the directors or other equivalent officers of such company are obliged to comply;

 

the Owners’ “cost of funds” in relation to the Owners’ Costs or any part thereof is a reference to the average cost (determined either on an actual or a notional basis) which the Owners would incur if they were to fund or finance, from whatever source(s) they may reasonably select, an amount equal to the amount of the Owners’ Costs or any part thereof for a period equal in length to the Hire Period of the Owners’ Costs or any part thereof;

 

“document” includes a deed; also a letter or fax or email;

 

“expense” means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax;

 

“law” includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;

 

“legal or administrative action” means any legal proceeding or arbitration and any administrative or regulatory action or investigation;

 

“liability” includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;

 

“months” shall be construed in accordance with Clause 66.3;

 

“person” includes any company; any state, political sub-division of a state and local or municipal authority; and any international organisation;

 

“policy”, in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;

 

“protection and indemnity risks” means the usual risks covered by a protection and indemnity association which is a member of the International Group of Protection and Indemnity Clubs including pollution risks, extended passenger cover and 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 incorporation in them of clause 6 of the International Hull Clauses (1/11/02 or 1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/10/83) or clause 8 of the Institute Time Clauses (Hulls) (1/11/1995) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision; 

 

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“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; and

 

“tax” includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine.

 

66.3 Meaning of “month”

 

A period of one or more “months” ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started (“the numerically corresponding day”), but:

 

(a) on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or

 

(b) on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day;

 

and “month” and “monthly” shall be construed accordingly.

 

66.4 In this Charter:

 

(a) references to a Leasing Document or any other document being in the form of a particular appendix or to any document referred to in the recitals include references to that form with any modifications to that form which the Owners approve;

 

(b) references to, or to a provision of, a Leasing Document or any other document are references to it as amended or supplemented, whether before the date of this Charter or otherwise;

 

(c) references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Charter or otherwise;

 

(d) words denoting the singular number shall include the plural and vice versa;

 

(e) references to a page or screen of an information service displaying a rate shall include:

 

(i) any replacement page of that information service which displays that rate; and

 

(ii) the appropriate page of such other information service which displays that rate from time to time in place of that information service,

 

and, if such page or service ceases to be available, shall include any other page or service displaying that rate specified by the Owners after consultation with the Charterers.

 

66.5 A Potential Termination Event is “continuing” if it has not been remedied or waived and a Termination Event is “continuing” if it has not been waived.

 

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66.6 Headings

 

In interpreting a Leasing Document or any provision of a Leasing Document, all clauses, sub-clauses and other headings in that and any other Leasing Document shall be entirely disregarded. 

 

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EXECUTION PAGE

 

OWNERS  

 

SIGNED BY )

for and on behalf of )

SEA 242 LEASING CO. LIMITED )

as attorney-in-fact )

in the presence of )
   

Witness’ signature: )

Witness’ name: )

Witness’ address: )

 

CHARTERERS

 

SIGNED BY )

for and on behalf of )

PATRIOT SHIPPING CO. )

as attorney-in-fact )

in the presence of )

 

Witness’ signature: )

Witness’ name: )

Witness’ address: )

 

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SCHEDULE 1

 

ACCEPTANCE CERTIFICATE

 

PATRIOT SHIPPING CO. (the “Charterers”) hereby acknowledge that at [●] hours on [●], there was delivered to, and accepted by, the Charterers the vessel known as m.v. “Patriotship” (the “Vessel”), registered in the name of SEA 242 LEASING CO. LIMITED (the “Owners”) under the flag of Liberia with IMO number 9446441 under a charter dated [●] 2021 (the “Charter”) and made between the Owners and the Charterers and that Delivery (as defined in the Charter) thereupon took place and that, accordingly, the Vessel is and will be subject to all the terms and conditions contained in the Charter.

 

The Charterers warrant that the representations and warranties made by them in 0 (Representations and Warranties) of the Charter remain correct and that no Termination Event or Potential Termination Event (each as defined in the Charter) has occurred at the date of this Acceptance Certificate.

 

 

Name: 

Title:

for and on behalf of

PATRIOT SHIPPING CO.

Dated: 

 

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SCHEDULE 2

 

CONDITIONS PRECEDENT

 

PART A

 

The following are the documents referred to in Clause 34.2(d)(i):

 

1 Corporate Authority

 

1.1 A copy of the constitutional documents of the Charterers and the Guarantor.

 

1.2 If required, a copy of the resolutions of the board of directors (or equivalent) of the Charterers and the Guarantor:

 

(a) approving the terms of, and the transactions contemplated by, the Leasing Documents to which it is a party and resolving that it execute the Leasing Documents to which it is a party;

 

(b) authorising a specified person or persons to execute the Leasing Documents to which it is a party on its behalf; and

 

(c) authorising a specified person or persons, on its behalf, to sign and/or dispatch all documents and notices to be signed and/or dispatched by it under, or in connection with, the Leasing Documents to which it is a party.

 

1.3 If required, a copy of the power of attorney of the Charterers and the Guarantor authorising a specified person or persons to execute the Leasing Documents to which it is a party.

 

1.4 If required, a specimen of the signature of each person authorized by the resolution referred to in paragraph 1.2 above.

 

1.5 If required, a copy of the resolutions signed by all the holder(s) of the issued shares of any Obligors, approving the terms of, and the transactions contemplated by such Leasing Document.

 

1.6 A copy of a certificate of an officer or authorized signatory of the Charterers and the Guarantor certifying that each copy document relating to it specified in this Schedule 2 Part A is correct, complete and in full force and effect as at a date no earlier than the date of this Charter.

 

2 Leasing Documents

 

2.1 A duly executed original of each Leasing Document (except the Security Documents) and of each document to be delivered under each of them.

 

2.2 Agreed forms of the Security Documents and of each document to be delivered under each of them.

 

2.3 Evidence that the Operating Account has been opened and maintained with the Account Bank and there is a credit balance of at least US$550,000.

 

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3 Initial Market Value

 

Valuations of the Vessel, addressed to the Owners and dated not earlier than fifteen (15) days before the Commencement Date indicating the Initial Market Value.

 

4 Legal opinion

 

4.1 An agreed form legal opinion by English legal advisers to the Owners on such matters on the laws of England in relation to the applicable documents listed in paragraphs 2.1 and 2.2 of Part A of this Schedule, in form and substance acceptable to the Owners.

 

4.2 Agreed forms of legal opinions by lawyers appointed by the Owners on such matters relating to the applicable documents listed in paragraphs 2.1 and 2.2 of Part A of this Schedule, concerning the laws of the Republic of Liberia, the Republic of the Marshall Islands, Greece and such other relevant jurisdictions as the Owners may reasonably require, in form and substance acceptable to the Owners.

 

5 Vessel Insurances

 

5.1 Evidence that the Vessel is or will be on Delivery insured in the manner required under Clause 39.1.

 

5.2 Agreed form of letters of undertaking relating to insurances as set out in Clause 39.1 from the relevant insurer, insurance broker, protection and indemnity association or war risks association (as the case may be).

 

5.3 An insurance report by an insurance advisor appointed by the Owners (but at the cost of the Charterers) in an agreed form acceptable to the Owners.

 

6 Others

 

6.1 Evidence that the Arrangement Fee and all other fees, costs and expenses then due from the Charterers to the Owners under the Leasing Documents have been paid and received by the Owners.

 

6.2 A copy of the Management Agreement and any amendments thereto.

 

6.3 A copy of any Assignable Sub-Charter and any amendments thereto.

 

6.4 Copies of the Document of Compliance of the Approved Technical Manager.

 

6.5 Copies of the Vessel’s Safety Management Certificate (together with any other details of the applicable Safety Management System which the Owners require) and of any other documents required under the ISM Code and the ISPS Code (including without limitation an ISSC and IAPPC).

 

6.6 A copy of the Vessel’s class certificate evidencing that the Vessel maintains its classification with the Approved Classification Society and a copy of the confirmation of class issued within three (3) Business Days prior to the Commencement Date confirming that the Vessel is free of all recommendations and conditions.

 

6.7 Copies of the Original Financial Statements.

 

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6.8 Such evidence relating to the Obligors as the Owners may reasonably require for their (or their financiers) to be able to satisfy each of their “know your customer” or similar identification procedures in relation to the Leasing Documents.

 

6.9 A copy of any other consents, approvals, authorization or other document, opinion or assurance which the Owners consider to be reasonably desirable in connection with the entry into and performance of the transactions contemplated by any of the Leasing Documents or for the validity and enforceability of such documents.

 

6.10 Such other documents as the Owners may reasonably require by giving notice to the Charterers.

 

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PART B

 

The following are the documents referred to in Clause 34.2(d)(ii):

 

1 Security Documents

 

1.1 A duly executed original of each of the Security Documents (and of each document to be delivered under each of them).

 

2 Vessel Documents

 

2.1 Documentary evidence that the Vessel is or will be:

 

(a) permanently or provisionally registered in the name of the Owners under the Flag State;

 

(b) in the absolute and unencumbered ownership of the Owners;

 

(c) unconditionally delivered by the Charterers to the Owners pursuant to the terms of the MOA, where such documents shall include without limitation:

 

(i) a copy of the notarized and/or legalised (if required by the Flag State) copies of the bill of sale duly executed by the Charterers and stating that the Vessel is free from all mortgages, encumbrances and liens (whether maritime or otherwise) or any other debts whatsoever (and where executed by an attorney of the Charterers, together with such a copy of the notarized and/or legalised (if required by the Flag State) Charterers’ power of attorney); and

  

(ii) a copy of the protocol of delivery and acceptance duly executed by the Charterers and the Owners.

 

2.2 Any additional documents as may be required by the competent authorities of the Flag State for the purpose of registering the Vessel.

 

3 Others

 

3.1 Evidence that any fees, costs and expenses then due from the Charterers to the Owners under the Leasing Documents have been paid and received by, or will be paid and received by, the Owners, on Delivery of the Vessel.

 

3.2 Such other documents as the Owners may reasonably require by giving notice to the Charterers.

 

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PART C

 

The following are the documents referred to in Clause 34.7:

 

1 Security Interests

 

Not later than five (5) Business Days after the Commencement Date, documentary evidence that the Security Interests intended to be created by each of the Security Documents have been duly perfected under applicable law (as applicable).

 

2 Legal opinions

 

Not later than three (3) Business Days after the Commencement Date, issued signed copies of the legal opinions referred to in paragraph 4 of Part A of Schedule 2 of this Charter.

 

3 Insurances

 

3.1 Not later than ten (10) Business Days after the Commencement Date, receipt of copies of the executed letters of undertaking and certificates of entry (as the case may be) relating to insurances as set out in Clause 39.1 acknowledged by the relevant insurer, insurance broker, protection and indemnity association or war risks association (as the case may be), each in the agreed form under paragraph 5 of Part A of Schedule 2 of this Charter.

 

3.2 Not later than fifteen (15) Business Days after the Commencement Date, the signed insurance report in the form agreed under paragraph 5 of Part A of Schedule 2 of this Charter.

 

4 Others

 

4.1 No later than six (6) months after the Commencement Date, evidence that (if applicable) the Vessel has been permanently registered with the Flag State.

 

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SCHEDULE 3

 

FORM OF COMPLIANCE CERTIFICATE

 

To: SEA 242 LEASING CO. LIMITED (the “Owner”)

 

From: SEANERGY MARITIME HOLDINGS CORP. (the “Guarantor”)

 

Date:             [●]

 

RE: THE BAREBOAT CHARTER (THE “CHARTER”) DATED 22 JUNE 2021 AS AMENDED AND RESTATED BY AN AMENDMENT AND RESTATEMENT DEED DATED                                   2023

 

1. We refer to the Charter. This is a Compliance Certificate. Unless otherwise specified, terms defined in the Charter shall have the same meaning in this compliance certificate.

 

2. We confirm that as calculated by reference to the audited annual consolidated financial statements for the financial year ended [●],

 

(a) Cash and Cash Equivalents divided by the number of Fleet Vessels is not lower than $500,000; and

 

(b) the Leverage Ratio is not more than 85 per cent.

 

3. [We confirm that, as at the date hereof, no Termination Event has occurred and is continuing which has not been waived or remedied at the date hereof]1

 

For and on behalf of 

SEANERGY MARITIME HOLDINGS CORP.

 

 

 

Name(s): 

President

 

 

1 If this statement cannot be made, this compliance certificate should identify any Termination Event (as defined in the Charter) that is continuing and the steps, if any, being taken to remedy it. 

 

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EXECUTION PAGES

 

CHARTERERS

 

EXECUTED AND DELIVERED AS A DEED ) 
by    STAVROS GYFTAKIS ) 
PATRIOT SHIPPING CO. )               /s/ Stavros Gyftakis
acting by ) 
as attorney-in-fact )

 

in the presence of: )

 

Witness’ signature: )              /s/ Ioannis Chrysospathis

Witness’ name: Ioannis Chrysospathis )
Witness’ address: )
154 Vouliagmenis Avenue         
16674 Glyfada, Athens, Greece  

 

Signature pages to Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Patriotship”



OWNERS

 

EXECUTED AND DELIVERED AS A DEED )

by )             /s/ Wong Lai Wa

SEA 242 LEASING CO. LIMITED )

acting by )             Wong Lai Wa

in the presence of: )             Attorney-in-Fact

 

Witness’ signature: )

Witness’ name:       Kwan Ka Ho )              /s/ Kwan Ka Ho

Witness’ address: )
Watson Farley & Williams LLP   
Suites 4610-4619, Jardine House  
1 Connaught Place, Hong Kong   

 

Signature pages to Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Patriotship”



GUARANTOR

 

EXECUTED AND DELIVERED AS A DEED ) 
by       STAVROS GYFTAKIS )          /s/ Stavros Gyftakis

SEANERGY MARITIME HOLDINGS CORP. )

acting by )

as attorney-in-fact )

 

in the presence of: )

 

Witness’ signature: ) 
Witness’ name: Ioannis Chrysospathis )            /s/ Ioannis Chrysospathis

Witness’ address: )
154 Vouliagmenis Avenue         
16674 Glyfada, Athens, Greece  

 

Signature pages to Amendment and Restatement Deed to BBC

CMBFL & Seanergy - m.v. “Patriotship”



EX-4.27 7 ef20015287_ex4-27.htm EXHIBIT 4.27
Exhibit 4.27

Dated: 10th November, 2023
 
ALPHA BANK S.A.
(as Lender)
FRIEND OCEAN NAVIGATION CO. and
SQUIRE OCEAN NAVIGATION CO.
(as joint and several Borrowers)
- and -
DUKE SHIPPING CO.
 
(as Collateral Owner and Corporate Guarantor)
 
 
SECOND SUPPLEMENTAL AGREEMENT
 
in relation to a Loan Agreement dated 9th August, 2021
for a secured floating interest rate loan facility of (initially)
US $44,120,000
 

THEO V. SIOUFAS & CO.

LAW OFFICES

Piraeus


 
TABLE OF CONTENTS
  
     
CLAUSE
HEADINGS
PAGE
     
 
1.
DEFINITIONS
4
       
 
2.
REPRESENTATIONS AND WARRANTIES
5
       
 
3.
AGREEMENT OF THE LENDER
6
       
 
4.
CONDITIONS
6
       
 
5.
VARIATIONS TO THE PRINCIPAL AGREEMENT
7
       
 
6.
CONTINUANCE OF PRINCIPAL AGREEMENT AND THE SECURITY DOCUMENTS
18
       
 
7.
ENTIRE AGREEMENT AND AMENDMENT
18
       
 
8.
FEES AND EXPENSES
19
       
 
9.
MISCELLANEOUS
19
       
 
10.
LAW AND JURISDICTION
19


THIS SECOND SUPPLEMENTAL AGREEMENT (“this Supplemental Agreement”) is made this 10th day of November, 2023
 
B E T W E E N:
 
(1)
ALPHA BANK S.A., a banking société anonyme incorporated in and pursuant to the laws of the Hellenic Republic with its head office at 40 Stadiou Street, Athens GR 102 52, Greece, acting through its office at 93 Akti Miaouli, Piraeus, Greece (the “Lender”); and
 
(2)           (a) FRIEND OCEAN NAVIGATION CO., a corporation duly incorporated and validly existing under the laws of the Republic of Liberia, whose registered address is at 80 Broad Street, Monrovia, Republic of Liberia (and includes its successors) (the “Friend Borrower”); and
 

 (b)
SQUIRE OCEAN NAVIGATION CO., a corporation duly incorporated and validly existing under the laws of the Republic of Liberia, whose registered address is at 80 Broad Street, Monrovia, Republic of Liberia (and includes its successors) (the “Squire Borrower”),
 
as joint and several borrowers (hereinafter together called the “Borrowers” and singly a “Borrower”), and
 
(3)
DUKE SHIPPING CO., a company duly incorporated in the Republic of the Marshall Islands having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (hereinafter called the “Collateral Owner” which expression shall include its successors, as corporate guarantor,
 
IS SUPPLEMENTAL to a loan agreement dated 9 August, 2021 made (originally) between (1) the Lender as lender, and (2) the Borrowers and Lord Ocean Navigation Co., of the Republic of Liberia (the “Released Borrower”) (therein together referred to as the “Borrowers” and hereinafter together called the “Original Borrowers”), as joint and several borrowers, as amended and/or supplemented by (i) a First Supplemental Letter to Loan Agreement dated 1 December, 2021 addressed by the Lender to and accepted by the Original Borrowers and Seanergy Maritime Holdings Corp., of the Republic of the Marshall Islands (the “Existing Corporate Guarantor”) and (ii) a First Supplemental Agreement dated 30th June, 2022 made between the Lender, the Original Borrowers, the Existing Corporate Guarantor and the Collateral Owner, (the Collateral Owner together with the Existing Corporate Guarantor hereinafter called the “Corporate Guarantors”) (the said loan agreement as amended and/or supplemented by the said First Supplemental Letter and the said First Supplemental Agreement is hereinafter called the “Principal Agreement”) on the terms and conditions of which the Lender agreed to advance and has advanced to the Originals Borrowers a secured floating interest rate term loan facility in the amount of up to United States Dollars Forty four million one hundred twenty thousand (US$44,120,000) (the “Loan”) for the purposes therein specified (the Principal Agreement as hereby amended and/or supplemented and as the same may hereinafter be further varied, amended and/or supplemented is hereinafter called the “Loan Agreement”).
 
W H E R E A S:
 
(A)
each of the Borrowers hereby acknowledges and confirms that (a) the Lender has advanced to the Borrowers, as joint and several borrowers, the full amount of the Commitment in the principal amount of United States Dollars Forty four million one hundred twenty thousand (US$44,120,000) and (b) as at the date hereof the principal amount of United States Dollars Twenty million four hundred seventy four thousand four hundred two (US$20,474,402) in respect of the Loan remains outstanding; and
 
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(B)
pursuant to a Corporate Guarantee dated 9 August, 2021 (the “Existing Corporate Guarantee”), the Existing Corporate Guarantor irrevocably and unconditionally guaranteed the due and timely repayment of the Loan and interest and default interest accrued thereon and all other monies payable under the Loan Agreement and the Security Documents and the performance of all the obligations of the Borrowers under the Loan Agreement and the Security Documents executed in accordance thereto;
 
(C)
pursuant to a Corporate Guarantee dated 30th June, 2022 (the “New Corporate Guarantee”), the Collateral Owner irrevocably and unconditionally guaranteed the due and timely repayment of the Loan and interest and default interest accrued thereon and all other monies payable under the Loan Agreement and the Security Documents and the performance of all the obligations of the Borrowers under the Loan Agreement and the Security Documents executed in accordance thereto;
 
(D)
pursuant to an Approved Commercial Manager’s Undertaking (the “Seanergy Approved Commercial Manager’s Undertaking”) dated 11th August, 2021 Seanergy Management Corp., of the Republic of the Marshall Islands (the “Seanergy Manager”), having an office established in Greece (at 154 Vouliagmenis Avenue, 16674 Glyfada, Greece) under laws 378/68, 27/75, 2234/94, 3752/09 and 4150/13 (as amended and in force at the date hereof), as Approved Commercial Manager, has (inter alia) subordinated any claims it may have against (inter alia) the Friend Borrower and the Squire Borrower and/or their respective m/vs “FRIENDSHIP” and “SQUIRESHIP” to the claims of the Lender under the Loan Agreement and the Security Documents as security for the Outstanding Indebtedness;
 
(E)
pursuant to a Technical Manager’s Undertaking (the “Seanergy Approved Technical Manager’s Undertaking for the Squireship”) dated 28th February, 2023 the Seanergy Shipmanagement Corp., of the Republic of the Marshall Islands (the “Seanergy Technical Manager”), having an office established in Greece (at 154 Vouliagmenis Avenue, 16674 Glyfada, Greece) under laws 378/68, 27/75, 2234/94, 3752/09 and 4150/13 (as amended and in force at the date hereof),, as Approved Technical Manager, has (inter alia) subordinated any claims it may have against the Squire Borrower and/or its m/v “SQUIRESHIP” to the claims of the Lender under the Loan Agreement and the Security Documents as security for the Outstanding Indebtedness;
 
(F)
pursuant to an Approved Commercial Manager’s Undertaking (the “Fidelity Approved Commercial Manager’s Undertaking”) dated 11th August, 2021  Fidelity Marine Inc., of the Republic of the Marshall Islands (the “Fidelity Manager”), having an office established in Greece (at Vassileos Georgiou B’ Street, 16673 Voula, Greece) under laws 378/68, 27/75, 2234/94, 3752/09 and 4150/13 (as amended and in force at the date hereof), as Approved Commercial Manager, has (inter alia) subordinated any claims it may have against (inter alia) the Friend Borrower and the Squire Borrower and/or their respective m/vs “FRIENDSHIP” and “SQUIRESHIP” to the claims of the Lender under the Loan Agreement and the Security Documents as security for the Outstanding Indebtedness;
 
(G)
pursuant to an Approved Technical Manager’s Undertaking (the “V.Ships Greece Approved Technical Manager’s Undertaking”) dated 11th August, 2021 V.SHIPS Greece Ltd., having an established office in Greece (at Piliou 1 & Ermoupoleos Street, Piraeus, 18541, Greece) under laws 378/68, 27/75, 2234/94, 3752/09 and 4150/13 (as amended and in force at the date hereof), as Approved Technical Manager, has (inter alia) subordinated any claims it may have against the Friend Borrower and/or its m/v “FRIENDSHIP” to the claims of the Lender under the Loan Agreement and the Security Documents as security for the Outstanding Indebtedness;
 
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(H)
pursuant to an Approved Technical Manager’s Undertaking (the “Seanergy Approved Technical Manager’s Undertaking for the Friendship”) dated 11th August, 2021 the Seanergy Technical Manager, as Approved Technical Manager, has (inter alia) subordinated any claims it may have against the Friend Borrower and/or its m/v “FRIENDSHIP” to the claims of the Lender under the Loan Agreement and the Security Documents as security for the Outstanding Indebtedness;
 
(I)
pursuant to:
 

 (a)
an Approved Commercial Manager’s Undertaking delivered by the Seanergy Manager (the “Seanergy Manager Approved Commercial Manager’s Undertaking for the Dukeship”) and dated 30th June, 2022 in respect of the m/v “DUKESHIP”;
 

 (b)
an Approved Technical Manager’s Undertaking delivered by the Seanergy Technical Manager dated 30th June, 2022 (the “Dukeship Approved Technical Manager’s Undertaking”) in respect of the m/v “DUKESHIP”; and
 

 (c)
an Approved Commercial Manager’s Undertaking delivered by the Fidelity Manager  (the “Fidelity Manager Approved Commercial Manager’s Undertaking for the Dukeship”) dated 30th June, 2022 in respect of the m/v “DUKESHIP”;
 
the Seanergy Manager, as Approved Commercial Manager, the Seanergy Technical Manager, as Approved Technical Manager and the Fidelity Manager, as Approved Commercial Manager, respectively, have  (inter alia) subordinated any claims they may have against the Collateral Owner and/or the m/v “DUKESHIP” to the claims of the Lender under the Loan Agreement and the Security Documents as security for the Outstanding Indebtedness
 
(J)
pursuant to a Deed of Release dated 28 April, 2023 the Lender has (inter alia) unconditionally and irrevocably released the Released Borrower from all its undertakings, obligations and liabilities, under the Released Finance Documents (and in relation to  the Accounts Pledge Agreement only to the extent it pertains to the Released Borrower and its Operating Account) to which it is a party; and
 
(K)
the Borrowers and the other Security Parties have requested the Lender to grant its consent to the replacement of LIBOR by Term SOFR, and the Lender has agreed thereto, conditionally upon terms that the Principal Agreement shall be amended in the manner hereinafter set out in Clause 5 (Variations to the Principal Agreement) of this Supplemental Agreement.
 
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NOW THEREFORE IT IS HEREBY AGREED AS FOLLOWS:
 
1.
DEFINITIONS

1.1
Defined terms and expressions
 
Words and expressions defined in the Principal Agreement and not otherwise defined herein (including the Recitals hereto) shall have the same meanings when used in this Supplemental Agreement.
 
1.2
Additional definitions
 
In addition, in this Supplemental Agreement the words and expressions specified below shall have the meanings attributed to them below:
 
“Effective Date” means the date hereof or such earlier or later date as the Lender may agree in writing upon which all the conditions contained in Clause 5 (Variations to the Principal Agreement) shall have been satisfied and this Supplemental Agreement shall become effective;
 
“Loan Agreement” means the Principal Agreement as hereby amended and as the same may from time to time be further amended and/or supplemented;
 
“Mortgage” in relation to each Vessel means the first or, as the case may be, second  preferred ship mortgage registered over that Vessel in favour of the Lender (together, the “Mortgages”);
 
“Mortgage Amendment” in relation to a Vessel and the Mortgage registered thereon means the amendment No. 1 to that Mortgage in favour of the Lender, whereby that Mortgage shall be amended as therein specified, to be executed by the relevant Owner of that Vessel in favour of the Lender, in form satisfactory to the Lender (together the “Mortgages Amendments”);
 
“Owner” in relation to a Vessel means the owner of that Vessel as specified in the definition “Vessels” in this Clause 1.2 and “Owners” means any or all of them, as the context may require;
 
“Rate Switch Date” means 23rd May, 2023;
 
“Transaction Documents” together means this Supplemental Agreement and each Mortgage Amendment, and “Transaction Document” means any of them as the context may require; and
 
“Vessels” means:
 

 (a)
the capesize bulk carrier motor vessel “FRIENDSHIP“, of about 89,603 gt and 58,437 nt, built in 2009 and having IMO No. 9410454 registered under the laws and flag of the Republic of Liberia under Official Number: 21000 in the ownership of the Friend Borrower (the “FRIENDSHIP”);
 

 (b)
the capesize bulk carrier motor vessel “SQUIRESHIP“, of about 88,479 gt and 56,828 nt, built in 2010 and having IMO No. 9391646 registered under the laws and flag of the Republic of Liberia in the ownership of the Squire Borrower (the “SQUIRESHIP”); and
 
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 (c)
the capesize bulk carrier motor vessel “DUKESHIP” of about 93,385 gt and 60,175 nt, built in 2010 and having IMO No. 9402304, registered under the laws and flag of the Republic of the Marshall Islands in the ownership of the Collateral Owner (the “DUKESHIP”),
 
in each case, together with all her boats, engines, machinery tackle outfit spare gear fuel consumable and other stores belongings and appurtenances whether on board or ashore and whether now owned or hereafter acquired and all the additions, improvements and replacements in or on the above described vessel,
 
(hereinafter together called the “Vessels”, and “Vessel” means any of them, as the context may require).
 
1.3
Application of interpretation provisions of Loan Agreement
 
Clause 1.3 (Interpretation) and Clause 1.4 (Construction of certain terms) of the Principal Agreement applies to this Supplemental Agreement as if it were expressly incorporated in it with any necessary modifications.
 
2.
REPRESENTATIONS AND WARRANTIES

2.1
Representations and warranties under the Finance Documents
 
The Borrowers hereby jointly and severally represent and warrant to the Lender, as at the date hereof, that the representations and warranties set forth in the Principal Agreement and each of the Security Documents to which such Security Party is a party (updated mutatis mutandis to the date of this Supplemental Agreement) are true and correct as if all references therein to “this Agreement” were references to the Principal Agreement as amended and supplemented by this Supplemental Agreement.
 
2.2
Additional Representations and warranties
 
In addition to the above, the Borrowers hereby jointly and severally represent and warrant to the Lender as at the date of this Supplemental Agreement that:
 

 a.
each of the corporate Security Parties is duly formed, is validly existing and in good standing under the laws of the place of its incorporation, has full power to carry on its business as it is now being conducted and to enter into and perform its obligations under the Principal Agreement, this Supplemental Agreement and the other Transaction Documents, and has complied with all statutory and other requirements relative to its business;
 

 b.
all necessary licences, consents and authorities, governmental or otherwise under this Supplemental Agreement, the Principal Agreement and the other Transaction Documents have been obtained and, as of the date of this Supplemental Agreement, no further consents or authorities are necessary for any of the Security Parties to enter into this Supplemental Agreement and the other Transaction Document(s) or otherwise perform its obligations hereunder;
 

 c.
each of the Transaction Documents constitutes, the legal, valid and binding obligations of the Security Parties thereto enforceable in accordance with its terms;
 
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 d.
the execution and delivery of, and the performance of the provisions of the Transaction Documents do not, and will not contravene any applicable law or regulation existing at the date hereof or any contractual restriction binding on any of the Security Parties or its respective constitutional documents;
 

 e.
no action, suit or proceeding is pending or threatened against any of the Borrowers and the other Security Parties or their assets before any court, board of arbitration or administrative agency which could or might result in any material adverse change in the business or condition (financial or otherwise) of the Borrowers or any of the other Security Parties; and
 

 f.
none of the Borrowers and the other Security Parties is and at the Effective Date will be in default under any agreement by which it is or will be at the Effective Date bound or in respect of any financial commitment, or obligation.
 
2.3
Survival
 
The representations and warranties of the Security Parties in this Supplemental Agreement shall survive the execution of this Supplemental Agreement and shall be deemed to be repeated at the commencement of each Interest Period.
 
3.
AGREEMENT OF THE LENDER

The Lender, relying upon each of the representations and warranties set out in Clause 2 (Representations and warranties) hereby agrees with the Security Parties, subject to and upon the terms and conditions of this Supplemental Agreement and in particular, but without limitation, subject to the fulfilment of the conditions precedent set out in Clause 4 (Conditions), that the Principal Agreement be amended in the manner more particularly set out in Clause 5 (Variations to the Principal Agreement).
 
4.
CONDITIONS

4.1
Conditions
 
The agreement of the Lender contained in Clause 3 (Agreement of the Lender) shall be expressly subject to the condition that the Lender shall have received on or before the Effective Date in form and substance satisfactory to the Lender and their legal advisers:
 

 a.
a certificate of good standing or equivalent document issued by the competent authorities of the place of its incorporation in respect of each of the Borrowers and the other corporate Security Parties;
 

 b.
a recent certificate of incumbency of each corporate Security Party issued by the appropriate authority or, as appropriate, signed by the secretary or a director thereof, stating the officers and the directors of each of them;
 

 c.
certified and duly legalised copies of resolutions duly passed by the Board of Directors, or the Sole Director as the case may be, of each of the Borrowers and the other corporate Security Parties, evidencing approval of this Supplemental Agreement and each of the other Transaction Documents to which the relevant Security Party is or is to be a party and authorising appropriate officers or attorneys to execute the same and to sign all notices required to be given under this Supplemental Agreement on its behalf or other evidence of such approvals and authorisations as shall be acceptable to the Lender;
 
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 d.
all documents evidencing any other necessary action or approvals or consents with respect to this Supplemental Agreement evidencing approval of this Supplemental Agreement and each of the other Transaction Documents to which the relevant Security Party is or is to be a party and authorising appropriate officers or attorneys to execute the same and to sign all notices required to be given under this Supplemental Agreement on its behalf or other evidence of such approvals and authorisations as shall be acceptable to the Lender;
 

 e.
the originals of any power(s) of attorney issued in favour of any person executing this Supplemental Agreement and each of the other Transaction Documents to which the relevant Security Party is or is to be a party;
 

 f.
all documents evidencing any other necessary action or approvals or consents with respect to this Supplemental Agreement and each of the other Transaction Documents;
 

 g.
such favourable legal opinions from lawyers acceptable to the Lender and their legal advisors as the Lender shall require; and
 

 h.
each Mortgage Amendment duly executed by the respective parties thereto and, where appropriate, duly registered through the appropriate Registry over the relevant Vessel in favour of the Lender.
 
5.
VARIATIONS TO THE PRINCIPAL AGREEMENT

5.1
Amendments
 
In consideration of the agreement of the Lender contained in Clause 3 (Agreement of the Lender), the Borrowers hereby agree with the Lender that (subject to the satisfaction of the conditions precedent contained in Clause 4 (Conditions), the provisions of the Principal Agreement shall be varied and/or amended and/or supplemented as follows:
 

 a.
with retrospective effect as from the Rate Switch Date, the following definitions in Clause 1.2 (Definitions) of the Principal Agreement shall be amended to read as follows:
 
“Break Costs” means the amount (if any) by which:
 

 (a)
the interest which the Lender should have received for the period from the date of receipt of all or any part of its participation in the Loan or an Unpaid Sum to the last day of the current Interest Period in relation to the Loan, the relevant part of the Loan or that Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
 
exceeds
 

 (b)
the amount which the Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.;
 
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““Final Maturity Date” means (i) in respect of Tranche A, 21st May 2025 and (ii) in respect of Tranche B, the 11th August, 2025”;
 
“Margin” means:
 

 (i)
in respect of Tranche A, three point five four five nine eight per centum (3.54598%) per annum; and
 

 (ii)
in respect of Tranche B, three point two nine five nine eight per centum (3.29598%) per annum;
 
“Quotation Day” means, in relation to any period for which an interest rate is to be determined, two US Government Securities Business Days before the first day of that period unless market practice differs in the relevant loan market in which case the Quotation Day will be determined by the Lender in accordance with market practice (and if quotations would normally be given on more than one day, the Quotation Day will be the last of those days);
 
“UK Bail-In Legislation” means Part 1 of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutes or their Affiliates (otherwise than through liquidation, administration or other insolvency proceedings);
 

 b.
with retrospective effect as from the Rate Switch Date, the terms “Banking Day” and “Banking Days” shall be replaced by the terms “Business Day” and “Business Days” throughout the Principal Agreement and the Security Documents and the definition “Banking Day” shall be replaced by the following new definition, which shall be added in alphabetical order in Clause 1.2 (Definitions) of the Principal Agreement:
 
“Business Day” means:
 

 (a)
a day (other than a Saturday or Sunday) on which banks are open for general business in Athens and Piraeus;
 

 (b)
in New York; and
 

 (c)
(in relation to the fixing of any interest rate which is required to be determined under this Agreement or any Finance Document), a US Government Securities Business Day;”;
 

 c.
with retrospective effect as from the Rate Switch Date, the following new definitions shall be added in alphabetical order in Clause 1.2 (Definitions) of the Principal Agreement:
 
“Historic Term SOFR” means, in relation to the Loan or any part of the Loan, the most recent applicable Term SOFR for a period equal in length to the Interest Period of the Loan or that part of the Loan and which is as of a day which is no more than five (5) US Government Securities Business Days before the Quotation Day;
 
“Interpolated Historic Term SOFR” means, in relation to the Loan or any part of the Loan, the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:
 
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(a)
either:
 

 (i)
the most recent applicable Term SOFR (as of a day which is not more than three US Government Securities Business Days before the Quotation Day) for the longest period (for which Term SOFR is available) which is less than the Interest Period of the Loan or that part of the Loan; or
 

 (ii)
if no such Term SOFR is available for a period which is less than the Interest Period of the Loan or that part of the Loan, SOFR for a day which is no more than three (3) US Government Securities Business Days (and no less than two US Government Securities Business Days) before the Quotation Day; and
 

 (b)
the most recent applicable Term SOFR (as of a day which is not more than three US Government Securities Business Days before the Quotation Day) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of the Loan or that part of the Loan.
 
“Interpolated Term SOFR” means, in relation to the Loan or any part of the Loan, the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:
 

 (a)
either:
 

 (i)
the applicable Term SOFR (as of the Quotation Day) for the longest period (for which Term SOFR is available) which is less than the Interest Period of the Loan or that part of the Loan; or
 

 (ii)
if no such Term SOFR is available for a period which is less than the Interest Period for the Loan, SOFR for the day which is three US Government Securities Business Days before the Quotation Day; and
 

 (b)
the applicable Term SOFR (as of the Quotation Day)  for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of the Loan or that part of the Loan;
 
“Market Disruption Rate” means the Reference Rate;
 
“Reference Rate” means, in relation to the Loan or any part of the Loan:
 

 (a)
the applicable Term SOFR as of the Quotation Day and for a period equal in length to the Interest Period of the Loan or that part of the Loan; or
 

 (b)
as otherwise determined pursuant to Clause 3.8 (Unavailability of Term SOFR),
 
and if, in either case, that rate is less than zero, the Reference Rate shall be deemed to be zero;
 
“SOFR” means the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York (or any other person which takes over the administration of that rate) published (before any correction, recalculation or republication by the administrator) by the Federal Reserve Bank of New York (or any other person which takes over the publication of that rate); “Term SOFR” means the term SOFR reference rate administered by CME Group Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant period published (before any correction, recalculation or republication by the administrator) by CME Group Benchmark Administration Limited (or any other person which takes over the publication of that rate);
 
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“US Government Securities Business Day” means any day other than:
 

 (a)
a Saturday or a Sunday; and
 

 (b)
a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in US Government securities;”;
 
d.
with retrospective effect as from the Rate Switch Date, Clause 3 (Interest) of the Principal Agreement shall be replaced in whole and shall read as follows:
 
  “3.1
Normal Interest Rate
 
The Borrowers shall pay interest on the Loan (or as the case may be, each portion thereof to which a different Interest Period relates) in respect of each Interest Period related thereto on each Interest Payment Date.  The interest rate for the calculation of interest shall be the rate per annum determined by the Lender to be the aggregate of:
 

 (a)
the applicable Margin; and
 

 (b)
the Reference Rate for that Interest Period.
 

 3.2
Selection of Interest Periods
 
The Borrowers may by notice received by the Lender not later than 11:30 a.m. (Athens time) on the second Business Day before the beginning of each Interest Period specify (subject to Clause 3.3 (Determination of Interest Periods)) whether such Interest Period shall have a duration of one (1) or three (3) months (or such other period as may be requested by the Borrowers and as the Lender, in its sole discretion, may agree to).
 

 3.3
Determination of Interest Periods
 
Every Interest Period shall, subject to market availability to be conclusively determined by the Lender, be of the duration specified by the Borrowers pursuant to Clause 3.2 (Selection of Interest Periods) but so that:
 

 (a)
Initial Interest Period: each Interest Period will commence forthwith upon the expiry of the preceding Interest Period;
 

 (b)
Interest tranches: if any Interest Period in respect of the Loan would otherwise overrun one or more Repayment Dates, then, in the case of the last Repayment Date, such Interest Period shall end on such Repayment Date, and in the case of any other Repayment Date or Dates the amount of the Loan shall be divided into parts so that there is one part equal to the amount of the relevant Repayment Instalment or Repayment Instalments due on each Repayment Date falling during that Interest Period and having an Interest Period ending on the relevant Repayment Date and another part equal to the amount of the balance of the Loan having an Interest Period determined in accordance with Clause 3.2 (Selection of Interest Periods) and the other provisions of this Clause 3.3 and the other provisions of this Clause 3.3;
 
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 (c)
Final Interest Period: no Interest Period in respect of the Loan shall extend beyond the Final Maturity Date;
 

 (d)
Failure to notify: if the Borrowers fail to specify the duration of an Interest Period in accordance with the provisions of Clause 3.2 (Selection of Interest Periods) and this Clause 3.3, such Interest Period shall have a duration of three (3) months unless another period shall be determined by the Lender at its sole discretion provided, always, that such period (whether of three (3) months or of different duration) shall comply with this Clause 3.3,
 
provided, always, that:
 

 (i)
any Interest Period which commences on the last day of a calendar month, and any Interest Period which commences on the day on which there is no numerically corresponding day in the calendar month during which such Interest Period is due to end, shall end on the last Business Day of the calendar month during which such Interest Period is due to end; and
 

 (ii)
if the last day of an Interest Period is not a Business Day the Interest Period shall be extended until the next following Business Day unless such next following Business Day falls in the next calendar month in which case such Interest Period shall be shortened to expire on the preceding Business Day.
 
3.4          Default Interest
 

 (a)
Default interest: If the Borrowers fail to pay any sum (including, without limitation, any sum payable pursuant to this Clause 3.4) on its due date for payment under any of the Finance Documents, the Borrowers shall pay interest on such sum from the due date up to the date of actual payment (as well after as before judgement) at the rate determined by the Lender pursuant to this Clause 3.4. The period beginning on such due date and ending on such date of payment shall be divided into successive periods as selected by the Lender each of which (other than the first, which shall commence on such due date) shall commence on the last day of the preceding such period. The rate of interest applicable to each such period shall be the aggregate (as determined by the Lender) of (i) two per cent (2%) per annum, (ii) the Margin and (iii) the Reference Rate. Such interest shall be due and payable on the last day of each such period as determined by the Lender and each such day shall, for the purposes of this Agreement, be treated as an Interest Payment Date, provided that if such unpaid sum is of principal which became due and payable by reason of a declaration by the Lender under Clause 9.2 (Consequences of Default – Acceleration) or a prepayment pursuant to Clauses 4.2 (Voluntary Prepayment), 4.3 (Compulsory Prepayment in case of Total Loss or sale of a Vessel), 8.5(a)(i), 12.1 (Unlawfulness) and 12.2 (Increased cost) on a date other than an Interest Payment Date relating thereto, the first such period selected by the Lender shall be of a duration equal to the period between the due date of such principal sum and such Interest Payment Date and interest shall be payable on such principal sum during such period at a rate two per cent (2%) above the rate applicable thereto immediately before it fell due. If for the reasons specified in Clause 3.6 (Market disruption), the Lender is unable to determine a rate in accordance with the foregoing provisions of this Clause 3.4, interest on any sum not paid on its due date for payment shall be calculated at a rate determined by the Lender to be two per cent (2%) per annum above what is or, as the case may be, would be payable under Clause 3.7(a).”;
 
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 3.5
Notification of duration of Interest Periods and interest rate
 
The Lender shall notify the Borrowers promptly of the duration of each Interest Period and of each rate of interest determined by it under this Clause 3 without prejudice to the right of the Lender to make determinations at its sole discretion, but this shall not be taken to imply that the Borrowers are liable to pay such interest only with effect from the date of the Lender’s notification. However, omission of the Lender to make such notification (without the application of the Borrowers) will not constitute and will not be interpreted as if to constitute a breach of obligation of the Lender except in case of wilful misconduct.
 

 3.6
Market disruption
 
If before close of business in Athens the Quotation Day for the relevant Interest Period, the Lender determines (in its sole discretion) that its cost of funds relating to the Loan would be in excess of the Market Disruption Rate, then Clause 3.7 (Cost of funds) shall apply to the Loan for the relevant Interest Period.
 

 3.7
Cost of funds
 

 (a)
If this Clause 3.7 (Cost of funds) applies, the rate of interest on the Loan or the relevant part of the Loan for the relevant Interest Period shall not be calculated as per clause 3.1 but, instead, shall be the percentage rate per annum which is the sum of:
 
 
(i)
the Margin; and
 

 (ii)
the rate notified by the Lender to the Borrowers, which expresses as a percentage rate per annum the Lender’s cost of funds relating to the Loan or the relevant part thereof.
 

 (b)
If this Clause 3.7 (Cost of funds) applies and the Lender or the Borrowers so require, the Lender and the Borrowers shall enter into negotiations (for a period of not more than 20 Business Days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.
 

 (c)
Subject to Clause 3.9 (Changes to reference rates), any substitute or alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lender and the Borrowers, be binding on all Parties.
 

 (d)
If any rate notified under sub-paragraph (ii) of paragraph (a) above is less than zero, the relevant rate shall be deemed to be zero.
 
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 (e)
If no substitute or alternative basis is agreed pursuant to paragraph (b) above, the Borrowers may give the Lender not less than 5 Business Days’ notice of their intention to prepay the Loan at the end of the interest period set by the Lender.
 

 (f)
A notice under paragraph (e) above shall be irrevocable; and on the last Business Day of the interest period set by the Lender the Borrowers shall prepay (without premium or penalty) the Loan, together with accrued interest thereon at the applicable interest rate and the balance of the Outstanding Indebtedness.
 

 (g)
The provisions of Clause 4 (Repayment-Prepayment) shall apply in relation to the prepayment made hereunder.
 
 
3.8
Unavailability of Term SOFR
 

 (a)
Interpolated Term SOFR:  If no Term SOFR is available for the Interest Period of the Loan or any part of the Loan, the applicable Reference Rate shall be the Interpolated Term SOFR for a period equal in length to the Interest Period of the Loan or that part of the Loan.
 

 (b)
Historic Term SOFR: If no Term SOFR is available for the Interest Period of the Loan or any part of the Loan and it is not possible to calculate the Interpolated Term SOFR, the applicable Reference Rate shall be the Historic Term SOFR for the Loan or that part of the Loan.
 

 (c)
Interpolated Historic Term SOFR: If paragraph (b) above applies but no Historic Term SOFR is available for the Interest Period of the Loan or any part of the Loan, the applicable Reference Rate shall be the Interpolated Historic Term SOFR for a period equal in length to the Interest Period of the Loan or that part of the Loan.
 

 (d)
Cost of funds:  If paragraph (c) above applies but it is not possible to calculate the Interpolated Term Historic SOFR, there shall be no Reference Rate for the Loan or that part of the Loan (as applicable) and Clause 3.7 (Cost of Funds) shall apply to the Loan or that part of the Loan for that Interest Period.
 
 
3.9
Changes to reference rates
 

 (a)
If a Published Rate Replacement Event has occurred in relation to any Published Rate, any amendment or waiver which relates to:
 
 
(i)
providing for the use of a Replacement Reference Rate; and
 
(ii)
 
  (A)
aligning any provision of any Finance Document to the use of that Replacement Reference Rate;
 

 (B)
enabling that Replacement Reference Rate to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Reference Rate to be used for the purposes of this Agreement);
 
13

 (C)
implementing market conventions applicable to that Replacement Reference Rate;
 

 (D)
providing for appropriate fallback (and market disruption) provisions for that Replacement Reference Rate; or
 

 (E)
adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Reference Rate (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation),
 
may be made with the consent of the Lender.
 

 (b)
In this Clause 3.9 (Changes to reference rates):
 
“Published Rate” means:
 

 (a)
SOFR; or
 

 (b)
Term SOFR for any Quoted Tenor;
 
“Published Rate Contingency Period” means, in relation to:
 

 (a)
Term SOFR (all Quoted Tenors), 10 US Government Securities Business Days; and
 

 (b)
SOFR, 10 US Government Securities Business Days.
 
“Published Rate Replacement Event” means, in relation to a Published Rate:
 

 (a)
the methodology, formula or other means of determining that Published Rate has, in the opinion of the Lender, materially changed;
 

 (b)
 
 
(i)

 

 (A)
the administrator of that Published Rate or its supervisor publicly announces that such administrator is insolvent; or
 

 (B)
information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Published Rate is insolvent,
 
provided that, in each case, at that time, there is no successor administrator to continue to provide that Published Rate;
 
14

 (ii)
the administrator of that Published Rate publicly announces that it has ceased or will cease to provide that Published Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide that Published Rate;
 

 (iii)
the supervisor of the administrator of that Published Rate publicly announces that such Published Rate has been or will be permanently or indefinitely discontinued; or
 

 (iv)
the administrator of that Published Rate or its supervisor announces that that Published Rate may no longer be used; or
 

 (c)
the administrator of that Published Rate (or the administrator of an interest rate which is a constituent element of that Published Rate) determines that that Published Rate should be calculated in accordance with its reduced submissions or other contingency or fallback policies or arrangements and either:
 

 (i)
the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Lender) temporary; or
 

 (ii)
that Published Rate is calculated in accordance with any such policy or arrangement for a period no less than the applicable Published Rate Contingency Period; or
 

 (d)
in the opinion of the Lender, that Published Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement.
 
“Quoted Tenor” means, in relation to Term SOFR, any period for which that rate is customarily displayed on the relevant page or screen of an information service.
 
“Relevant Nominating Body” means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.
 
“Replacement Reference Rate” means a reference rate which is:
 

 (a)
formally designated, nominated or recommended as the replacement for a Published Rate by:
 

 (i)
the administrator of that Published Rate; or
 

 (ii)
any Relevant Nominating Body,
 
and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the “Replacement Reference Rate” will be the replacement under paragraph (ii) above;
 
15

 (b)
in the opinion of the Lender, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor or alternative to a Published Rate; or
 

 (c)
in the opinion of the Lender, an appropriate successor or alternative to a Published Rate.”;
 

 e.
with retrospective effect as from 28th April, 2023, Clause 4.1 (Repayment) of the Principal Agreement shall be amended to read as follows:
 
 
“4.1
Repayment
 
The Borrowers shall and it is expressly undertaken by the Borrowers to repay the Loan jointly and severally as follows:
 

 (a)
Tranche A (amounting as at the date of the Second Supplemental  Agreement to $14,493,969) shall be repaid by (a) seven (7) quarterly equal repayment instalments in the amount of Dollars Six hundred one thousand four hundred and eighty one ($601,481) each (the “Tranche A Repayment Instalments”), the first of which to be repaid on the 23rd November, 2023 and each of the subsequent ones consecutively falling due for payment on each of the dates falling three (3) months after the immediately preceding Repayment Date with the last (the 7th) of such Repayment Instalments falling due for payment on the Final Maturity Date relative to Tranche A and (b) a balloon instalment in the amount of Dollars Ten million two hundred eighty three thousand six hundred two ($10,283,602) to be repaid together with the last (the 7th) Trance A Repayment Instalment on the Final Maturity Date relative to such Tranche (the ”Tranche A Balloon Instalment”);
 

 (b)
Tranche B (amounting as at the date of the Second Supplemental Agreement to $5,980,433) shall be repaid by (a) eight (8) quarterly equal repayment instalments in the amount of Dollars Two hundred fifty seven thousand seven hundred and seventy seven ($257,777) each (the “Tranche B Repayment Instalments”), the first of which to be repaid on the 13th November, 2023 and each of the subsequent ones consecutively falling due for payment on each of the dates falling three (3) months after the immediately preceding Repayment Date with the last (the 8th) of such Repayment Instalments falling due for payment on the Final Maturity Date relative to Tranche B and (b) a balloon instalment in the amount of Dollars Three million nine hundred eighteen thousand two hundred seventeen ($3,918,217) to be repaid together with the last (the 8th) Trance B Repayment Instalment on the Final Maturity Date relative to such Tranche (the ”Tranche B Balloon Instalment”) provided that (a) if the last Repayment Date relative to a Tranche would otherwise fall after the Final Maturity Date relative to such Tranche, the last Repayment Date for such Tranche shall be the Final Maturity Date relative thereto, (b) there shall be no Repayment Dates for each Tranche after the Final Maturity Date relative to such Tranche, (c) on the Final Maturity Date for Tranche B, the Borrowers shall also pay to the Lender any and all other monies then due and payable under this Agreement and the other Finance Documents, (d) if any part of the Commitment, or a Tranche, as the case may be, is not advanced to the Borrowers the amounts of the Repayment Instalments relative to such Tranche  and the Balloon Instalment relative to such Tranche shall be reduced pro-rata, and (e) if any of the Repayment Instalments shall become due on a day which is not a Business Day, the due date therefor shall be extended to the next succeeding Business Day unless such Business Day falls in the next calendar month, in which event such due date shall be the immediately preceding Business Day.”;
 
16

 f.
with retrospective effect as from the Rate Switch Date, Clause 12.1 (Unlawfulness) of the Principal Agreement shall be amended to read as follows:
 
 
“12.1
Unlawfulness
 
If any change in, or introduction of, any law, regulation or regulatory requirement or any request of any central bank, monetary, regulatory or other authority or any order of any court renders it unlawful or contrary to any such regulation, requirement, request or order for the Lender to advance the Commitment or the relevant part thereof (as the case may be) or to maintain or fund the Loan, notice shall be given promptly by the Lender to the Borrowers whereupon the Commitment shall be reduced to zero and the Borrowers shall be obliged to prepay the Loan or to determine or charge interest rates based upon Term SOFR either (i) forthwith or (ii) on a future specified date not being earlier than the latest date permitted by the relevant law or regulation, together with accrued interest thereon to the date of prepayment and all other sums payable by the Borrowers under this Agreement.”;
 

 g.
with retrospective effect as from the Rate Switch Date, the following definitions in Clause 1.2 (Definitions) of the Principal Agreement shall be deleted:
 
“Alternative Rate”, “Banking Day”, “LIBOR”, “Negotiation Period”, “Replacement Benchmark”, “Screen Rate” and “Screen Rate Replacement Event”.
 
5.2
Security Documents
 
With effect as from the Effective Date the definition “Security Documents” shall be deemed to include the Security Documents as amended and/or supplemented in pursuance to the terms hereof and any document or documents (including if the context requires the Loan Agreement) that may now or hereafter be executed as security for the repayment of the Loan, interest thereon and any other moneys payable by the Borrowers under the Principal Agreement and the Security Documents (as herein defined) as well as for the performance by the Borrowers and the other Security Parties (as herein defined) of all obligations, covenants and agreements pursuant to the Principal Agreement, this Supplemental Agreement and/or the Security Documents.
 
5.3
Construction
 

 (a)
With effect from the Effective Date all references in the Principal Agreement and the other Finance Documents to:
 

 (i)
“this Agreement”, “hereunder”, “herein” and the like and in the Security Documents to the “Loan Agreement” shall be construed as references to the Principal Agreement as amended and/or supplemented by this Supplemental Agreement;
 
17

 (ii)
“Mortgage” shall be construed as references to a Mortgage, as amended and/or supplemented by the relevant Mortgage Amendment; and
 

 (iii)
‘London time’ shall be construed as references to ‘Athens time’; and
 

 (b)
With effect from the Rate Switch Date all references in the Principal Agreement and the other Finance Documents to Clause 3.6 (Market disruption – Non Availability)’ shall be amended to read:
 
“Clause 3.6 (Market disruption) and Clause 3.7 (Cost of funds)”.
 
6.
RECONFIRMATION

6.1
Reconfirmation of obligations
 
Each of the Borrowers hereby reconfirms its obligations under the Principal Agreement and their compliance with the covenants contained therein, as amended herein, of the Principal Agreement.
 
6.2
Acknowledgement
 
Each of the Security Parties acknowledges and agrees, for the avoidance of doubt, that each of the Security Documents to which it is a party and its obligations thereunder, shall remain in full force and effect notwithstanding the amendments made to the Principal Agreement by this Supplemental Agreement and each Mortgage and the waivers and other amendments agreed by the Lender in this Supplemental Agreement.
 
7.
CONTINUANCE OF PRINCIPAL AGREEMENT AND THE SECURITY DOCUMENTS

Save for the alterations to the Principal Agreement, and the Security Documents made or to be made pursuant to this Supplemental Agreement, and such further modifications (if any) thereto as may be necessary to make the same consistent with the terms of this Supplemental Agreement, the Principal Agreement shall remain in full force and effect and apply to this Supplemental Agreement as well, as if repeated in extenso herein, and the security constituted by the Security Documents shall continue  to remain valid and enforceable and the Borrowers hereby reconfirm their obligations under the Principal Agreement as hereby amended and under the Security Documents to which each of them is a party.
 
8.
ENTIRE AGREEMENT AND AMENDMENT

8.1
Entire Agreement
 
The Principal Agreement, the other Security Documents, and this Supplemental Agreement represent the entire agreement among the parties hereto with respect to the subject matter hereof and supersede any prior expressions of intent or understanding with respect to this transaction and may be amended only by an instrument in writing executed by the parties to be bound or burdened thereby.
 
8.2
Supplemental Agreement - Application of Principal Agreement provisions
 
This Supplemental Agreement is supplementary to and incorporated in the Principal Agreement, all terms and conditions whereof, including, but not limited to, provisions on payments, calculation of interest and Events of Default, shall apply to the performance and interpretation of this Supplemental Agreement.
 
18
9.
COSTS AND EXPENSES

9.1
Costs and expenses
 
The Borrowers hereby covenant and agree to pay to the Lender upon demand and from time to time all reasonable and documented costs, charges, registration and recording fees, duties and expenses (including legal fees) incurred by the Lender in connection with the negotiation, preparation, execution and enforcement or attempted enforcement of this Supplemental Agreement and any document executed pursuant thereto and/or in preserving or protecting or attempting to preserve or protect the security created hereunder and/or under the Security Documents.
 
9.2          Stamp Duty etc.
 
The Borrowers hereby covenant and agree to pay and discharge all stamp duties, registration and recording fees and charges and any other charges whatsoever and wheresoever payable or due in respect of this Supplemental Agreement and/or any document executed pursuant hereto.
 
10.
ASSIGNMENT

The provisions of Clause 14 (Assignment, Transfer, Participation, Lending Office) of the Principal Agreement shall apply to this Supplemental Agreement as if the same were set out herein in full.
 
11.
MISCELLANEOUS

11.1
Incorporation of Loan Agreement provisions
 
Without prejudice to Clauses 6 (Reconfirmation), 7 (Continuance of Principal Agreement and the Security Documents) and 8 (Entire agreement and amendment) of this Supplemental Agreement, the provisions of Clauses 2.9 (Evidence), 17 (Notices and communications) and 15.7 (Severability of provisions) of the Principal Agreement apply to this Supplemental Agreement as well and they are deemed to be repeated as if set forth in extenso herein.
 
11.2
Counterparts
 
This Supplemental Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument.
 
12.
LAW AND JURISDICTION

12.1
Governing Law
 
This Supplemental Agreement and any non-contractual obligations arising out of or in relation to it shall be governed by and construed in accordance with English law and the provisions of Clause 18 (Law and Jurisdiction) of the Principal Agreement (as hereby amended) shall apply mutatis mutandis to this Supplemental Agreement as if the same were set out herein in full.
 
19
12.2
Third Party Rights
 
A person who is not a party to this Supplemental Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Supplemental Agreement.
 
IN WITNESS whereof the parties hereto have caused this Supplemental Agreement to be duly executed the date first above written.
 
[Intentionally left blank]
 
20
EXECUTION PAGE
 
THE BORROWERS

     
SIGNED by
 )
Mr. Stavros Gyftakis )
for and on behalf of
) /s/ Stavros Gyftakis  
FRIEND OCEAN NAVIGATION CO., )
 
of the Republic of Liberia, in the presence of: )
 Attorney-in-fact  

Witness: /s/ Elena Zempilla
Name: Eleni Fanouria Zempilla
Address: Defteras Merarchias 13

Piraeus, Greece
Occupation: t. Attorney-at-law

SIGNED by )
Mr. Stavros Gyftakis )
for and on behalf of )
 /s/ Stavros Gyftakis  
SQUIRE OCEAN NAVIGATION CO. )
  
of the Republic of Liberia, in the presence of: )
 Attorney-in-fact

Witness: /s/ Elena Zempilla
Name: Eleni Fanouria Zempilla
Address: Defteras Merarchias 13

Piraeus, Greece
Occupation: t. Attorney-at-law

THE COLLATERAL OWNER
    



SIGNED by )
Mr. Stavros Gyftakis )

for and on behalf of )

DUKE SHIPPING CO., )
 /s/ Stavros Gyftakis
of the Republic of the Marshall Islands, )

in the presence of: )
 Attorney-in-fact

Witness: /s/ Elena Zempilla
Name: Eleni Fanouria Zempilla
Address: Defteras Merarchias 13

Piraeus, Greece
Occupation: t. Attorney-at-law

21
LENDER
    
     
SIGNED by
 )
/s/ Konstantinos Flokos
  
Mr. Konstantinos Flokos and
 )
    
Mrs.
 )
Attorney-in-fact
  
for and on behalf of
 )
    
ALPHA BANK S.A.,
 )
/s/ E. D. Makri
  
in the presence of:
 )
 
 
Attorney-in-fact
  

Witness:
/s/ Elena Zempilla
Name:
Eleni Fanouria Zempilla
Address:
Defteras Merarchias 13
 
Piraeus, Greece
Occupation:
t. Attorney-at-law

22
CORPORATE GUARANTOR’S ACKNOWLEDGEMENT
 
We, SEANERGY MARITIME HOLDINGS CORP., a corporation duly incorporated in the Republic of Marshall Islands, hereby confirm and acknowledge that we have read and understood the terms and conditions of the above Second Supplemental Agreement and agree in all respects to the same and hereby confirm that:
 
(a)
as at the date hereof  the principal sum of United States Dollars Twenty million four hundred seventy four thousand four hundred two (US$20,474,402) in respect of the Loan remains outstanding;
 
(b)
notwithstanding the variation to the Principal Agreement contained in Clause 5 (Variations to the Principal Agreement) of the above Second Supplemental Agreement, the provisions of the Corporate Guarantee (as defined therein) executed by us in favour of the Lender shall remain in full force and effect as security of the obligations of the Borrowers under the Principal Agreement, as amended by the above Second Supplemental Agreementand in respect of all sums due to the Lender under the Principal Agreement (as so amended), and we shall remain liable under the Corporate Guarantee (as defined therein) for all obligations and liabilities assumed by us under the Corporate Guarantee (as defined therein).
 
Dated: 10th November, 2023
   
For and on behalf of
Seanergy Maritime Holdings Corp.
(as Corporate Guarantor)
 
/s/ Stamatios Tsantanis


Stamatios Tsantanis
Chairman / CEO / Director

23
APPROVED MANAGER’S ACKNOWLEDGEMENT
 
We, SEANERGY SHIPMANAGEMENT CORP., a corporation duly incorporated in the Republic of Marshall Islands, having an office established in Greece (at 154 Vouliagmenis Avenue, 16674 Glyfada, Greece) under laws 378/68, 27/75, 2234/94, 3752/09 and 4150/13 (as amended and in force at the date hereof), hereby confirm and acknowledge that we have read and understood the terms and conditions of the above Second Supplemental Agreement and agree in all respects to the same and hereby confirm that:
 
(a)
as at the date hereof  the principal sum of United States Dollars Twenty million four hundred seventy four thousand four hundred two (US$20,474,402) in respect of the Loan remains outstanding; and
 
(b)
notwithstanding the variation to the Principal Agreement contained in Clause 5 (Variations to the Principal Agreement) of the above Second Supplemental Agreement, the provisions of the Seanergy Approved Technical Manager’s Undertaking RIDER for the FRIENDSHIP (as defined therein) dated 11th August, 2021 executed by us in favour of the Lender shall remain in full force and effect as security of the obligations of the Borrowers under the Principal Agreement, as amended by the above Second Supplemental Agreementand in respect of all sums due to the Lender under the Principal Agreement (as so amended), and we shall remain liable under the Seanergy Approved Technical Manager’s Undertaking for the FRIENDSHIP (as defined therein) for all obligations and liabilities assumed by us under the Seanergy Approved Technical Manager’s Undertaking for the FRIENDSHIP (as defined therein).
 
Dated: 10th November, 2023
  
   
For and on behalf of
  
SEANERGY SHIPMANAGEMENT CORP.
(as Approved Manager)
  
   
/s/ Stamatios Tsantanis
  

 
Stamatios Tsantanis
  
Legal Representative
  

24
APPROVED MANAGER’S ACKNOWLEDGEMENT
 
We, SEANERGY SHIPMANAGEMENT CORP., a corporation duly incorporated in the Republic of Marshall Islands, having an office established in Greece (at 154 Vouliagmenis Avenue, 16674 Glyfada, Greece) under laws 378/68, 27/75, 2234/94, 3752/09 and 4150/13 (as amended and in force at the date hereof), hereby confirm and acknowledge that we have read and understood the terms and conditions of the above Second Supplemental Agreement and agree in all respects to the same and hereby confirm that:
 
(a)
as at the date hereof  the principal sum of United States Dollars Twenty million four hundred seventy four thousand four hundred two (US$20,474,402) in respect of the Loan remains outstanding; and
 
(b)
notwithstanding the variation to the Principal Agreement contained in Clause 5 (Variations to the Principal Agreement) of the above Second Supplemental Agreement, the provisions of the Seanergy Approved Technical Manager’s Undertaking for the SQUIRESHIP (as defined therein) dated 28th February, 2023 in respect of m/v “SQUIRESHIP” executed by us in favour of the Lender shall remain in full force and effect as security of the obligations of the Borrowers under the Principal Agreement, as amended by the above Second Supplemental Agreementand in respect of all sums due to the Lender under the Principal Agreement (as so amended), and we shall remain liable under the Seanergy Approved Technical Manager’s Undertaking for the SQUIRESHIP (as defined therein) for all obligations and liabilities assumed by us under the Seanergy Approved Technical Manager’s Undertaking for the SQUIRESHIP (as defined therein).
 
Dated: 10th November, 2023
  
   
For and on behalf of
  
SEANERGY SHIPMANAGEMENT CORP.
(as Approved Manager)
  
   
/s/ Stamatios Tsantanis
  

 
Stamatios Tsantanis
  
Legal Representative
  
   


25
EX-4.29 8 ef20015287_ex4-29.htm EXHIBIT 4.29
Exhibit 4.29

Execution Version

To:         SEA GENIUS SHIPPING CO.
Trust Company Complex, Ajeltake Road,
Ajeltake Island, Majuro,
MH96960, the Marshall Islands
as borrower
(the “Borrower”)
 
SEANERGY MARITIME HOLDINGS CORP.
Trust Company Complex, Ajeltake Road,
Ajeltake Island, Majuro, MH96960, Marshall Islands
as guarantor and as shareholder (the “Guarantor”)
 
SEANERGY SHIPMANAGEMENT CORP.
 
Trust Company Complex, Ajeltake Road,
Ajeltake Island, Majuro, MH96960, Marshall Islands
as manager
(the “Technical Manager”)
 
FIDELITY MARINE INC.
Trust Company Complex Ajeltake Road, Ajeltake Island,
Majuro, Marshall Islands MH 96960
(the “Commercial Manager”)
 
From: SINOPAC CAPITAL INTERNATIONAL (HK) LIMITED
Suites 3306, 33F, Tower 1, The Gateway, 25 Canton Road,
Tsim Sha Tsui, Kowloon, Hong Kong
(the “Lender”)
25   August     2023
 
Dear all
 
Facility agreement dated 20 December 2021 (the “Facility Agreement”) and made between, amongst others, (i) the Borrower, (ii) the Guarantor and (iii) the Lender in respect of a loan facility of up to $15,000,000.
 

 1
LIBOR DISCONTINUANCE
 

 (a)
The Obligor Parties:
 

 (i)
acknowledge that the discontinuation of LIBOR will affect a great number of facility agreements in the international and domestic loan markets, as they will need to be amended to provide for a replacement benchmark rate;
 

 (ii)
note that it is considered in the market that the most efficient way to amend such facility agreements (including the Facility Agreement) is to adopt a standardised approach in their amendment; and
 

 (iii)
consequently, accept that the provisions of this Agreement will override any conflicting provisions in the Facility Agreement, without the need to list such provisions or to, otherwise, specifically refer to them in this Agreement.



(b)
To address the issue of LIBOR discontinuation, this Agreement supplements the Facility Agreement and:
 

 (i)
sets out the terms for the replacement of LIBOR as the benchmark rate for the calculation of interest under the Facility Agreement by a successor rate (the “LIBOR Replacement”); and
 

 (ii)
effects the consequential amendments to the Facility Agreement necessary to give effect to the LIBOR Replacement,
 
while so far as possible not affecting any other provisions of the Finance Documents or any other rights or obligations of any parties to the Finance Documents.
 

 2
INTERPRETATION
 

 (a)
Definitions
 
In this Agreement:
 
“Amended Facility Agreement” means the Facility Agreement as amended and supplemented by this Agreement.
 
“Effective Date” means the date on which the Lender notifies the Borrower as to the satisfaction of the conditions precedent as provided in Part 3 (Conditions Precedent) of the Schedule in form and substance satisfactory to the Lender.
 
“LIBOR” means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate).
 
“Mortgage” means a first preferred Marshall Islands mortgage over m.v. “GENIUSHIP” with official number 6628 executed by the Borrower in favour of the Lender duly recorded on December 23, 2021 at 11:00 A.M., E.E.T. in Piraeus, Greece (December 23, 2021 at 04:00 A.M., E.S.T. in the Central Office of the Maritime Administrator) in Book PM 32 at Page 2923.
 
“Mortgage Addendum” means the ship mortgage addendum entered or to be entered into between the Borrower and the Lender in relation to the Mortgage.
 
“Obligor Party” means the Borrower, the Guarantor, the Commercial Manager and the Technical Manager.
 

 (b)
Defined expressions
 
All other defined expressions shall have the meaning given to them in Part 2 of the Schedule.
 

 (c)
Construction
 

 (i)
References to “this Agreement” shall include the Schedule to it.
 

 (ii)
Clause 1.2 (construction) of the Facility Agreement applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.
 

 (d)
Designation as a Finance Document

2
The Borrower and the Lender designate this Agreement as a Finance Document.
 

 (e)
Third party rights
 

 (i)
Unless provided to the contrary in a Finance Document, a person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.
 

 (ii)
Notwithstanding any term of any Finance Document, the consent of any person who is not a party to the Amended Facility Agreement is not required to rescind or vary this Agreement at any time.
 

 3
CONDITIONS PRECEDENT
 

 (a)
The Effective Date cannot occur unless the Lender has received all of the documents and other evidence listed in Part 3 (Conditions Precedent) of the Schedule in form and substance satisfactory to the Lender on or before 23 September 2023 or such later date as the Lender may agree with the Borrower.
 

 (b)
The Lender shall notify the Borrower promptly upon being satisfied as to the satisfaction of the conditions precedent referred to in Paragraph (a) above.
 

 4
REPRESENTATIONS
 

 (a)
Obligor Party representations
 
On the date of this Agreement and on the Effective Date, each Obligor Party represents and warrants that:
 

 (i)
it is a corporation, duly incorporated or formed and validly existing under the laws of its jurisdiction of incorporation or formation;
 

 (ii)
the obligations expressed to be assumed by it in this Agreement are, subject to any general principles of law limiting its obligations which are applicable to creditors generally, legal, valid, binding and enforceable obligations;
 

 (iii)
the entry into and performance by it of this Agreement does not and will not:
 

 (A)
conflict with any law or regulation applicable to it, its constitutional documents or any agreement or instrument binding upon it or any of its assets; or
 

 (B)
constitute a default or termination event (however described) under any agreement or instrument binding on it or any of its assets; and
 

 (iv)
it has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, this Agreement, the Mortgage Addendum and the Amended Facility Agreement.
 

 (b)
No representations or advice
 

 (i)
Each Obligor Party confirms to the Lender that it has made (and shall continue to make) its own independent investigation and assessment of the merits and effect of the amendments contemplated by this Agreement, including, without limitation:

3

 (A)
the impact of those amendments on the payments to be made under the Amended Facility Agreement (and under any associated transaction, including any hedging or derivative transaction entered into or to be entered into in relation to the Amended Facility Agreement);
 

 (B)
the administration of, submission of data to, or any other matter related to, any rate referred to in, or contemplated by, the Amended Facility Agreement;
 

 (C)
the suitability of any rate referred to in, or contemplated by, the Amended Facility Agreement for any Obligor Party or any entity related to it; or
 

 (D)
the composition or characteristics of any rate referred to in, or contemplated by, the Amended Facility Agreement, including whether it is similar to, produces the same value or economic equivalence to, or has the same volume or liquidity as, any rate which it replaces (in whole or in part).
 

 (ii)
The Lender does not make any representation or warranty as to any matter referred to in sub-paragraph (i) above. Each Obligor Party agrees that it has not entered into this Agreement in reliance on any representation or warranty from the Lender, acknowledges that it is responsible for taking its own advice in relation to this Agreement and the matters referred to in sub- paragraph (i) above and agrees that it has not received or relied upon any such advice from the Lender, and waives all rights and remedies in respect of those matters.
 

 5
AMENDMENTS
 

 (a)
Amendments
 

 (i)
On and from the Effective Date, the amendments set out in Part 1 and Part 2 of the Schedule will take effect and will override any contrary provisions in the Facility Agreement.
 

 (ii)
This Agreement shall be read together with the Facility Agreement and, when there is any conflict between this Agreement and any other provision of any Finance Document, this Agreement will prevail (without prejudice to any rights or obligations accruing before the Effective Date).
 

 (b)
Consents
 
On the Effective Date, each Obligor Party:
 

 (i)
confirms its acceptance of the Amended Facility Agreement;
 

 (ii)
(in the case of the Borrower and the Guarantor) agrees that it is bound as an Obligor (as defined in the Amended Facility Agreement);
 

 (iii)
confirms that the definition of, and references throughout each of the Finance Documents to, the Facility Agreement shall be construed as if the same referred to the Amended Facility Agreement; and
 

 (iv)
(if it is the Guarantor) confirms that its guarantee and indemnity (included in clause 17 (Guarantee and indemnity) of the Facility Agreement):

4

 (A)
continues to have full force and effect on the terms of the Amended Facility Agreement; and
 

 (B)
extends to the obligations of the relevant Obligors under the Finance Documents as amended and supplemented by this Agreement and the Mortgage Addendum.
 

 (c)
Security confirmation
 
On the Effective Date, each Obligor Party confirms that:
 

 (i)
any Security created by it under the Finance Documents extends to the obligations of the relevant Obligor Parties under the Amended Facility Agreement and the other Finance Documents as amended by the Mortgage Addendum;
 

 (ii)
the obligations of the relevant Obligor Parties under the Amended Facility Agreement and the other Finance Documents as amended by the Mortgage Addendum are included in the Secured Liabilities (as defined in the Finance Documents to which it is a party); and
 

 (iii)
the Security created under the Finance Documents continues in full force and effect on the terms of the respective Finance Documents; and
 

 (iv)
this Security confirmation neither creates nor purports to create a registrable Security.
 

 (d)
Finance Documents to remain in full force and effect
 
The Finance Documents shall remain in full force and effect and, from the Effective Date:
 

 (i)
in the case of the Facility Agreement as amended and supplemented pursuant to this Agreement;
 

 (ii)
the Facility Agreement and the applicable provisions of this Agreement will be read and construed as one document; and
 

 (iii)
except to the extent expressly waived by the amendments effected by this Agreement, no waiver is given by this Agreement and the Lender expressly reserves all its respective rights and remedies in respect of any breach of, or default (however described) under, the Finance Documents.
 

 6
MISCELLANEOUS
 

 (a)
Clause 16.2 (amendment costs) of the Facility Agreement, applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.
 

 (b)
This Agreement 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 Agreement.
 

 7
GOVERNING LAW AND JURISDICTION
 

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

5

 (b)
The courts of England have 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 or any non-contractual obligation arising out of or in connection with this Agreement) (a “Dispute”).
 

 (c)
The Obligor Parties accept that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Obligor Party will argue to the contrary.
 

 (d)
To the extent allowed by law, this Paragraph 7 (Governing Law and Jurisdiction) is for the benefit of the Lender only. As a result, the Lender shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions.
 
If you agree to the terms of this Agreement, please sign where indicated below.

6
Yours faithfully


/s/ ZHUY XIYU
ZHU XIYU
Attorney-in-fact


 
Duly authorised on behalf of SINOPAC CAPITAL INTERNATIONAL (HK) LIMITED as Lender

7
We hereby acknowledge receipt of the above Agreement and confirm our agreement to its terms.
 
BORROWER
  
   
SIGNED by Stavros Gyftakis
  
as attorney-in-fact
)   /s/ Stavros Gyftakis
for and on behalf of
)
SEA GENIUS SHIPPING CO.
)
in the presence of: Maria Moschopoulou
)
 
)   /s/ Maria Moschopoulou
   
Date: 25 August 2023  

GUARANTOR
  
   
SIGNED by Stavros Gyftakis
  
as attorney-in-fact
)   /s/ Stavros Gyftakis
for and on behalf of
)
SEANERGY MARITIME HOLDINGS CORP.
)
in the presence of: Maria Moschopoulou
)
 
)   /s/ Maria Moschopoulou
   
Date: 25 August 2023
  
   
TECHNICAL MANAGER
  
   
SIGNED by Stamatios Tsantanis
  
as President
)   /s/ Stamatios Tsantanis
for and on behalf of
)
SEANERGY SHIPMANAGEMENT CORP.
)
in the presence of: Maria Moschopoulou
)

)   /s/ Maria Moschopoulou

 
Date: 25 August 2023
  
   
COMMERCIAL MANAGER
  
   
SIGNED by Nikolaos Frantzeskakis
  
as President
)    /s/ Nikolaos Frantzeskakis
for and on behalf of
)
FIDELITY MARINE INC.
)
in the presence of: Maria Moschopoulou
)

)   /s/ Maria Moschopoulou

 
Date: 25 August 2023
  

8
SCHEDULE

PART 1
 
TERM SOFR OPERATIVE PROVISIONS
 

 1
RATE SWITCH
 

 1.1
Switch to Reference Rate
 
Subject to Paragraph 1.2 (Delayed switch for existing LIBOR Loans) below, on and from the Rate Switch Date:
 

 (a)
use of the Reference Rate will replace the use of LIBOR for the calculation of interest for any Loan or Unpaid Sum; and
 

 (b)
any Loan or Unpaid Sum shall be a “Term SOFR Loan” and Paragraph 2.1 (Calculation of interest–Term SOFR Loans) below shall apply to such Loan or Unpaid Sum.


1.2
Delayed switch for existing LIBOR Loans
 
If the Rate Switch Date falls before the last day of an Interest Period for a LIBOR Loan:
 

 (a)
that Loan or Unpaid Sum (as applicable) shall continue to be a LIBOR Loan for that Interest Period and the clause headed “Calculation of interest” in the Facility Agreement (or, in the absence of such clause, any provision in the Facility Agreement setting out the rate of interest on a LIBOR Loan) shall continue to apply to such Loan or Unpaid Sum (as applicable) for that Interest Period;
 

 (b)
any provision of this Part 1 which is expressed to relate solely to a Term SOFR Loan shall not apply in relation to such Loan or Unpaid Sum (as applicable) for that Interest Period; and
 

 (c)
on and from the first day of the next Interest Period (if any) for such Loan or Unpaid Sum (as applicable):
 

 (i)
such Loan or Unpaid Sum (as applicable) shall be a “Term SOFR Loan”; and
 

 (ii)
Paragraph 2.1 (Calculation of interest –Term SOFR Loans) below shall apply to it.
 

 2
INTEREST
 

 2.1
Calculation of interest – Term SOFR Loans
 
The rate of interest on each Term SOFR Loan for an Interest Period is the percentage rate per annum which is the aggregate of the applicable:
 

 (a)
Margin; and
 

 (b)
Reference Rate.

9

 3
INTEREST PERIODS
 
An Interest Period in respect of a LIBOR Loan may not be selected if it would extend beyond the Rate Switch Date.
 

 4
CHANGES TO THE CALCULATION OF INTEREST
 

 4.1
Unavailability of Term SOFR
 

 (a)
Interpolated Term SOFR: If no Term SOFR is available for the Interest Period of a Term SOFR Loan, the applicable Reference Rate shall be the Interpolated Term SOFR for a period equal in length to the Interest Period of that Term SOFR Loan.
 

 (b)
Historic Term SOFR: If no Term SOFR is available for the Interest Period of a Term SOFR Loan and it is not possible to calculate the Interpolated Term SOFR, the applicable Reference Rate shall be the Historic Term SOFR for that Term SOFR Loan.
 

 (c)
Interpolated Historic Term SOFR: If sub-paragraph (b) above applies but no Historic Term SOFR is available for the Interest Period of a Term SOFR Loan, the applicable Reference Rate shall be the Interpolated Historic Term SOFR for a period equal in length to the Interest Period of that Term SOFR Loan.
 

 (d)
Cost of funds: If sub-paragraph (c) above applies but it is not possible to calculate the Interpolated Historic Term SOFR, Paragraph 4.3 (Cost of funds) below shall apply to that Term SOFR Loan for that Interest Period.
 

 4.2
Market disruption
 
In the case of a Term SOFR Loan, if, (a) before close of business in Taiwan on the day immediately following the Term SOFR Quotation Day, the Lender determines (in its sole discretion) that its cost of funds relating to that Term SOFR Loan would be in excess of the Market Disruption Rate or (b) before close of business on the Term SOFR Quotation Day for the relevant Interest Period, deposits in dollars are not available to the Lender in the Relevant Market in the ordinary course of business in sufficient amounts to fund the Loan (or the relevant part thereof) for that Interest Period, then Paragraph 4.3 (Cost of funds) below shall apply to that Term SOFR Loan for the relevant Interest Period.
 

 4.3
Cost of funds
 

 (a)
If this Paragraph 4.3 (Cost of funds) applies to a Term SOFR Loan for an Interest Period, Paragraph 2.1 (Calculation of interest - Term SOFR Loans) above shall not apply to that Term SOFR Loan for that Interest Period and the rate of interest on that Term SOFR Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:
 

 (i)
the Margin; and
 

 (ii)
the rate notified to the Borrower by the Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum its cost of funds relating to that Term SOFR Loan.
 

 (b)
If this Paragraph 4.3 (Cost of funds) applies and the Lender or the Borrower so requires, the Lender and the Borrower shall enter into negotiations (for a period of not more than 15 days)

10
with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.
 

 (c)
Subject to Paragraph 5 (Replacement Reference Rate) below, any substitute or alternative basis agreed pursuant to sub-paragraph (b) above shall, with the prior consent of the Lender and the Borrower, be binding on all parties to the Facility Agreement.
 

 (d)
If any rate notified by the Lender under sub-paragraph (ii) of sub-paragraph (a) above is less than zero, the relevant rate shall be deemed to be zero.
 

 (e)
If this Paragraph 4.3 (Cost of funds) applies, the Lender shall, as soon as practicable, notify the Borrower.
 

 4.4
Break Costs
 
The Borrower shall, within three Business Days of demand by the Lender, pay to the Lender its Break Costs (if any) attributable to all or any part of a Term SOFR Loan being paid by the Borrower on a day prior to the last day of an Interest Period for that Term SOFR Loan.
 

 5
REPLACEMENT REFERENCE RATE
 

 (a)
If a Published Rate Replacement Event has occurred in relation to any Published Rate, any amendment or waiver which relates to:
 

 (i)
providing for the use of a Replacement Reference Rate in place of that Published Rate; and
 
(ii)
 

 (A)
aligning any provision of any Finance Document to the use of that Replacement Reference Rate;
 

 (B)
enabling that Replacement Reference Rate to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Reference Rate to be used for the purposes of this Agreement);
 

 (C)
implementing market conventions applicable to that Replacement Reference Rate;
 

 (D)
providing for appropriate fallback (and market disruption) provisions for that Replacement Reference Rate; or
 

 (E)
adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Reference Rate (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation),
 
may be made with the consent of the Lender and the Borrower.

11

 (b)
In this Paragraph 5: 
 
“Published Rate” means:


 (a)
SOFR; or
 

 (b)
Term SOFR for any Quoted Tenor.
 
“Published Rate Contingency Period” means, in relation to:
 

 (a)
Term SOFR (all Quoted Tenors), 10 US Government Securities Business Days; and
 

 (b)
SOFR, 10 US Government Securities Business Days.
 
“Published Rate Replacement Event” means, in relation to a Published Rate:
 

 (a)
the methodology, formula or other means of determining that Published Rate has, in the opinion of the Lender and the Borrower, materially changed;
 
(b)
 
(i)
 

 (A)
the administrator of that Published Rate or its supervisor publicly announces that such administrator is insolvent; or
 

 (B)
information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Published Rate is insolvent,
 
provided that, in each case, at that time, there is no successor administrator to continue to provide that Published Rate;
 

 (ii)
the administrator of that Published Rate publicly announces that it has ceased or will cease to provide that Published Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide that Published Rate;
 

 (iii)
the supervisor of the administrator of that Published Rate publicly announces that such Published Rate has been or will be permanently or indefinitely discontinued; or
 

 (iv)
the administrator of that Published Rate or its supervisor announces that that Published Rate may no longer be used; or
 

 (c)
the administrator of that Published Rate (or the administrator of an interest rate which is a constituent element of that Published Rate) determines that that Published Rate should be calculated in accordance with its reduced submissions or other contingency or fallback policies or arrangements and either:
 
12

 (i)
the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Lender and the Borrower) temporary; or
 

 (ii)
that Published Rate is calculated in accordance with any such policy or arrangement for a period no less than the applicable Published Rate Contingency Period; or
 

 (d)
in the opinion of the Lender and the Borrower, that Published Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement.
 
“Quoted Tenor” means, in relation to Term SOFR, any period for which that rate is customarily displayed on the relevant page or screen of an information service.
 
“Relevant Nominating Body” means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.
 
“Replacement Reference Rate” means a reference rate which is:
 

 (a)
formally designated, nominated or recommended as the replacement for a Published Rate by:
 

 (i)
the administrator of that Published Rate (provided that the market or economic reality that such reference rate measures is the same as that measured by that Published Rate); or
 

 (ii)
any Relevant Nominating Body,
 
and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the “Replacement Reference Rate” will be the replacement under paragraph (ii) above;
 

 (b)
in the opinion of the Lender and the Borrower, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor or alternative to a Published Rate; or
 

 (c)
in the opinion of the Lender and the Borrower, an appropriate successor or alternative to a Published Rate.
 

 6
MISCELLANEOUS
 

 (a)
After the Rate Switch Date, any reference in the Amended Facility Agreement to the London Interbank Market shall be deemed to be to the Relevant Market.
 

 (b)
After the Rate Switch Date any reference to clause 41.1 (replacement of screen rate) in the Facility Agreement shall be deemed to a reference to Paragraph 5 (replacement reference rate) above.
 
13
PART 2

GENERAL DEFINITIONS AND CONSTRUCTION
 

 1
Definitions
 
In this Agreement:
 
“Break Costs” means, in respect of any Term SOFR Loan the amount (if any) by which:
 

 (a)
the interest which the Lender should have received for the period from the date of receipt of all or any part of its participation in the relevant Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
 
exceeds
 

 (b)
the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.
 
“Business Day” means:
 

 (a)
the “Business Day” as defined in the Facility Agreement; and
 

 (b)
(in relation to the fixing of an interest rate for a Term SOFR Loan) which is a US Government Securities Business Day relating to that Term SOFR Loan.
 
“Funding Rate” means, in relation to a Term SOFR Loan, any individual rate notified by the Lender pursuant to sub-paragraph (a)(ii) of Paragraph 4.3 (Cost of funds) of Part 1 (Term SOFR Operative Provisions) of this Schedule.
 
“Historic Term SOFR” means, in relation to any Term SOFR Loan, the most recent applicable Term SOFR for a period equal in length to the Interest Period of that Term SOFR Loan and which is as of a day which is no more than three US Government Securities Business Days before the Term SOFR Quotation Day.
 
“Interpolated Term SOFR” means, in relation to any Term SOFR Loan, the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:
 

 (a)
either:
 
 
(i)
the applicable Term SOFR (as of the Term SOFR Quotation Day) for the longest period (for which Term SOFR is available) which is less than the Interest Period of that Term SOFR Loan; or
 
 
(ii)
if no such Term SOFR is available for a period which is less than the Interest Period of that Term SOFR Loan, SOFR for the day which is two US Government Securities Business Days before the Term SOFR Quotation Day; and

14
 
(b)
the applicable Term SOFR (as of the Term SOFR Quotation Day) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of that Term SOFR Loan.

“Interpolated Historic Term SOFR” means, in relation to any Term SOFR Loan, the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:
 

 (a)
either:
 

 (i)
the most recent applicable Term SOFR (as of a day which is not more than three US Government Securities Business Days before the Term SOFR Quotation Day) for the longest period (for which Term SOFR is available) which is less than the Interest Period of that Term SOFR Loan; or
 

 (ii)
if no such Term SOFR is available for a period which is less than the Interest Period of that Term SOFR Loan, the most recent SOFR for a day which is no more than five US Government Securities Business Days (and no less than two US Government Securities Business Days) before the Term SOFR Quotation Day; and
 

 (b)
the most recent applicable Term SOFR (as of a day which is not more than three US Government Securities Business Days before the Term SOFR Quotation Day) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of that Term SOFR Loan.
 
“LIBOR Loan” means a Loan or, if applicable, Unpaid Sum which is not a Term SOFR Loan.
 
“Loan” means any amount borrowed and outstanding under the Finance Documents whether defined in the Facility Agreement as a Loan, part of the Loan, an Advance, a Tranche or a Drawing.
 
“Market Disruption Rate” means the percentage rate per annum which is the Reference Rate.
 
“Rate Switch Date” means the first day of the first Interest Period to commence after 30 June 2023, or any other date agreed as such between the Borrower and the Lender.
 
“Reference Rate” means, in relation to any Term SOFR Loan:


 (a)
the applicable Term SOFR as of the Quotation Day and for a period equal in length to the Interest Period of that Term SOFR Loan; or
 
 
(b)
as otherwise determined pursuant to Paragraph 4.1 (Unavailability of Term SOFR), and if, in either case, that rate is less than zero, the Reference Rate shall be deemed to be zero.
 
“Relevant Market” means the market for overnight cash borrowing collateralised by US Government securities.
 
“SOFR” means the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York (or any other person which takes over the administration of that rate) published (before any correction, recalculation or republication by the administrator) by the Federal Reserve Bank of New York (or any other person which takes over the publication of that rate).

15
“Term SOFR” means the Term SOFR reference rate administered by CME Group Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant period published (before any correction, recalculation or republication by the administrator) by CME Group Benchmark Administration Limited (or any other person which takes over the publication of that rate).
 
“Term SOFR Loan” means a Loan or, if applicable, Unpaid Sum which is, or becomes, a “Term SOFR Loan” pursuant to Paragraph 1 (Rate Switch) of Part 1 (Term SOFR Operative Provisions) of this Schedule.
 
“Term SOFR Quotation Day” means, in relation to any period for which an interest rate is to be determined in respect of a Term SOFR Loan, two US Government Securities Business Days before the first day of that period (unless market practice differs in the relevant syndicated loan market, in which case the Term SOFR Quotation Day will be determined by the Lender in accordance with that market practice (and if quotations would normally be given on more than one day, the Term SOFR Quotation Day will be the last of those days)).
 
“US Government Securities Business Day” means any day other than:
 

 (a)
a Saturday or a Sunday; and
 

 (b)
a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in US Government securities.
 

 2
Defined expressions
 
Defined expressions in the Facility Agreement shall have the same meanings when used in this Agreement unless the context otherwise requires or unless otherwise defined in this Agreement.


 3
Construction
 
Unless a contrary indication appears, a reference in this Agreement to:
 

 (a)
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;
 

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

 (c)
the Lender’s “cost of funds” in relation to any Term SOFR Loan is a reference to the average cost (determined either on an actual or a notional basis) which that Lender would incur if it were to fund, from whatever source(s) it may reasonably select, an amount equal to the amount of that Term SOFR Loan for a period equal in length to the Interest Period of that Term SOFR Loan;
 

 (d)
a page or screen of an information service displaying a rate shall include:
 
16

 (i)
any replacement page of that information service which displays that rate; and
 

 (ii)
the appropriate page of such other information service which displays that rate from time to time in place of that information service,
 
and, if such page or service ceases to be available, shall include any other page or service displaying that rate specified by the Lender after consultation with the Borrower.

17
PART 3

CONDITIONS PRECEDENT


 1
Corporate documentation
 

 (a)
A copy of the constitutional documents of each Obligor or alternatively a certificate from a duly authorised officer or director (as appropriate) of that Obligor, confirming that the documents delivered to the Lender under paragraph 1.1 of part A of Schedule 2 (conditions precedent and subsequent) of the Facility Agreement are correct, complete and in full force and effect as at the Effective Date.
 

 (b)
A copy of a resolution of the board of directors of each Obligor:
 

 (i)
approving the terms of, and the transactions contemplated by, this Agreement and, where appropriate, the Mortgage Addendum and resolving that it execute this Agreement and, where appropriate, the Mortgage Addendum;
 

 (ii)
authorising a specified person or persons to execute this Agreement and, where appropriate, the Mortgage Addendum on its behalf; and
 

 (iii)
authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched by it under, or in connection with, this Agreement and, where appropriate, the Mortgage Addendum.
 

 (c)
An original of the power of attorney of any Obligor authorising a specified person or persons to execute this Agreement and, where appropriate, the Mortgage Addendum.
 

 (d)
A specimen of the signature of each person authorised by the resolution referred to in paragraph (b) above.
 

 (e)
A copy of a resolution signed by the holder(s) of the issued shares in the Borrower, approving the terms of, and the transactions contemplated by, this Agreement and, where appropriate, the Mortgage Addendum.
 

 2
Finance Documents
 

 (a)
A duly executed original of this Agreement.
 

 (b)
A duly executed original of the Mortgage Addendum together with documentary evidence that the Mortgage Addendum has been duly registered as a valid ship mortgage addendum to the Mortgage in accordance with the laws of Republic of the Marshall Islands.
 

 3
Legal Opinions
 

 (a)
A legal opinion of legal adviser to the Lender in England, substantially in the form distributed to the Lender before signing this Agreement.
 

 (b)
A legal opinion of legal adviser to the Lender in Republic of the Marshall Islands, substantially in the form distributed to the Lender before signing this Agreement.
 

 4
Other documents and evidence

18

 4.1
A certificate signed by an officer of the Borrower confirming that as at the proposed Effective Date and the date of this Deed:
 

 (a)
no Default has occurred and is continuing or is reasonably likely to result from the occurrence of the Effective Date;
 

 (b)
the Repeating Representations to be made by each Transaction Obligor are true;
 

 (c)
the Ship has neither been sold nor become a Total Loss; and
 

 (d)
no event or series of events has occurred which is likely to have a Material Adverse Effect;
 

 4.2
A copy of any other Authorisation or other document, opinion or assurance which the Lender considers to be necessary or desirable (if it has notified the Borrower accordingly) in connection with the entry into and performance of the transactions contemplated by this Deed and the Mortgage Addendum or for the validity and enforceability of any Finance Document as amended, restated and/or supplemented by this Deed or by the Mortgage Addendum.
 

 4.3
Evidence that the fees, costs and expenses then due from the Borrower pursuant to clause 16.2 (amendment costs) of the Facility Agreement have been paid or will be paid by the Effective Date.


19
EX-4.34 9 ef20015287_ex4-34.htm EXHIBIT 4.34
Exhibit 4.34

Dated    3    July 2023
 
WORLD SHIPPING CO. and
HONOR SHIPPING CO.
as joint and several Borrowers and Hedge Guarantors
 
and
 
SEANERGY MARITIME HOLDINGS CORP.
as Guarantor

and

PIRAEUS BANK S.A.
as Lender
 
SUPPLEMENTAL AGREEMENT
 
relating to a facility agreement dated 22 June 2022
in respect of the refinancing of the existing indebtedness secured on m.v. “WORLDSHIP” and financing part of
the acquisition cost of m.v. “HONORSHIP”



Index

Clause
  
Page
     
1
Definitions and Interpretation
2
2
Conditions Precedent
3
3
Representations
3
4
Amendments to Facility Agreement and Other Finance Documents
3
5
Further Assurance
5
6
Costs and Expenses
5
7
Notices
5
8
Counterparts
5
9
Governing Law
5
10
Enforcement
5

Schedules
 
Schedule 1 The Parties
7
The Hedge Guarantors
7
Schedule 2 Conditions Precedent
8
   
Execution
  
   
Execution Pages
9


THIS AGREEMENT is made on     3     July 2023
 
PARTIES
 

 (1)
WORLD SHIPPING CO., a corporation incorporated in the Republic of the Marshall Islands with registration number 109649, whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 as a borrower (“Borrower A”)
 

 (2)
HONOR SHIPPING CO., a corporation incorporated in the Republic of the Marshall Islands with registration number 114553, whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 as a borrower (“Borrower B”)
 

 (3)
SEANERGY MARITIME HOLDINGS CORP., a corporation incorporated in the Republic of the Marshall Islands with registration number 27721, whose registered address is at the Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH 96960, Marshall Islands as guarantor (the “Guarantor”)
 

 (4)
THE COMPANIES listed in Schedule 1 (The Parties) of this Agreement as hedge guarantors (the “Hedge Guarantors”)
 

 (5)
PIRAEUS BANK S.A., having its registered address at 4 Amerikis Street, 105 64 Athens, Greece with Corporate Registration Number 157660660000 acting through its office at 170 Alexandras Avenue, 11521 Athens, Greece as lender (the “Lender”)
 
BACKGROUND
 

 (A)
By the Facility Agreement, the Lender agreed to make available to the Borrowers a facility of (originally) up to $38,000,000, of which an amount of $32,000,000 is outstanding by way of principal as at the date hereof.
 

 (B)
By a master agreement (on the ISDA 2002 Master Agreement form and including the schedule thereto) dated as of 22 June 2022 (as amended and supplemented from time to time, the “Master Agreement”) and made between (i) the Lender as swap bank and (ii) the Borrowers, the Lender agreed the terms and conditions under which it would enter into interest rate swap transactions with the Borrowers from time to time to hedge the Borrowers’ exposure to interest rate fluctuations under the Facility Agreement.
 

 (C)
In accordance with clause 22.4 (Most favoured nation), the Guarantor has notified the Lender that it has provided to another creditor(s) additional or more favourable financial covenants than those which were provided under the Facility Agreement.
 

 (D)
Accordingly, the Borrowers and the Guarantor have requested (the “Request”) that the Lender agrees (inter alia) to amend clause 22.1 (financial covenants of the guarantor) of the Facility Agreement amending the financial covenants in order to achieve parity with such other creditor(s) and comply with the undertaking in clause 22.1 (financial covenants of the guarantor) of the Facility Agreement.
 

 (E)
This Agreement sets out the terms and conditions on which the Lender agrees, with effect on and from the Effective Date, to:
 

 (i)
the Request; and
 

 (ii)
the consequential amendments to the Facility Agreement and the other Finance Documents in connection with the Request.
 

OPERATIVE PROVISIONS
 

 1
DEFINITIONS AND INTERPRETATION
 

 1.1
Definitions
 
In this Agreement:
 
“Amended Facility Agreement” means the Facility Agreement as amended and supplemented by this Agreement.
 
“Effective Date” means the date on which the Lender notifies the Borrowers as to the satisfaction of the conditions precedent as provided in paragraph (b) of Clause 2 (Conditions Precedent).
 
“Facility Agreement” means the facility agreement dated 22 June 2022, as amended by a side letter agreement dated 24 June 2022, each made between, amongst others, (i) the Borrowers as owners and hedge guarantors, (ii) the Guarantor as guarantor and the (iii) the Lender as lender.
 
“Party” means a party to this Agreement.
 

 1.2
Defined expressions
 
Defined expressions in the Facility Agreement and the other Finance Documents shall have the same meanings when used in this Agreement unless the context otherwise requires or unless otherwise defined in this Agreement.
 

 1.3
Application of construction and interpretation provisions of Facility Agreement
 
Clause 1.2 (construction) of the Facility Agreement applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.
 

 1.4
Agreed forms of new, and supplements to, Finance Documents
 
References in Clause 1.1 (Definitions) to any new or supplement to a Finance Document being in “agreed form” are to that Finance Document:
 

 (a)
in a form attached to a certificate dated the same date as this Agreement (and signed by the Borrowers and the Lender); or
 

 (b)
in any other form agreed in writing between the Borrowers and the Lender.
 

 1.5
Designation as a Finance Document
 
The Borrowers and the Lender designate this Agreement as a Finance Document.
 

 1.6
Third party rights
 

 (a)
Unless 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 to enjoy the benefit of any term of this Agreement.
 
2

 (b)
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.
 

 2
CONDITIONS PRECEDENT
 

 (a)
The Effective Date cannot occur unless the Lender has received all of the documents and other evidence listed in Schedule 2 (Conditions Precedent) of this Agreement in form and substance satisfactory to the Lender on or before the Effective Date or such later date as the Lender may agree with the Borrowers.
 

 (b)
The Lender shall notify the Borrowers promptly upon being satisfied as to the satisfaction of the conditions precedent referred to in paragraph (a) above.
 

 3
REPRESENTATIONS
 

 3.1
Facility Agreement representations
 
Each Obligor that is a party to the Facility Agreement makes the representations and warranties set out in clause 20 (representations) of the Facility Agreement, as amended and supplemented by this Agreement and updated with appropriate modifications to refer to this Agreement, by reference to the circumstances then existing on the date of this Agreement and on the Effective Date.
 

 3.2
Finance Document representations
 
Each Obligor makes the representations and warranties set out in the Finance Documents (other than the Facility Agreement) to which it is a party, as amended and supplemented by this Agreement and updated with appropriate modifications to refer to this Agreement, by reference to the circumstances then existing on the date of this Agreement and on the Effective Date.
 

 4
AMENDMENTS TO FACILITY AGREEMENT AND OTHER FINANCE DOCUMENTS
 

 4.1
Specific amendments to the Facility Agreement
 
With effect on and from the Effective Date the Facility Agreement shall be, and shall be deemed by this Agreement to have been, amended as follows:
 

 (a)
by deleting sub-paragraph (ii) of paragraph (a) of clause 22.1 (financial covenants of the guarantor) of the Facility Agreement and replacing it with the following new sub-paragraph (ii):
 
“(ii) the Leverage Ratio shall not exceed:


 (A)
until and including 29 June 2023, 85 per cent; and
 

 (B)
from 30 June 2023 until the end of the Security Period, 70 per cent.";"; and
 

 (b)
by construing references throughout to "this Agreement" and other like exressions as if the same referred to the Facility Agreement as amended and supplemented by this Agreement.

3

 4.2
Amendments to Finance Documents
 
With effect on and from the Effective Date, each of the Finance Documents other than the Facility Agreement shall be, and shall be deemed by this Agreement to have been, amended as follows:


 (a)
the definition of, and references throughout each of the Finance Documents to, the Facility Agreement and any of the other Finance Documents shall be construed as if the same referred to the Facility Agreement and those Finance Documents as amended and supplemented by this Agreement; and
 

 (b)
by construing references throughout each of the Finance Documents to "this Agreement", "this Deed", "hereunder" and other like expressions as if the same referred to such Finance Documents as amended and supplemented by this Agreement.
 

 4.3
Obligor Confirmation
 
On the Effective Date, each Obligor:
 

 (a)
confirms its acceptance of the amendments effected by this Agreement;
 

 (b)
agrees that it is bound as an Obligor (as defined in the Facility Agreement);
 

 (c)
confirms that the definition of, and references throughout each of the Finance Documents to, the Facility Agreement and any of the other Finance Documents shall be construed as if the same referred to the Facility Agreement and those Finance Documents as amended and supplemented by this Agreement;
 

 (d)
(if it is a Guarantor or a Hedge Guarantor) confirms that its guarantee and indemnity:
 

 (i)
continues to have full force and effect on the terms of the Amended Facility Agreement; and
 

 (ii)
extends to the obligations of the relevant Obligors under the Finance Documents as amended and supplemented by this Agreement.
 

 4.4
Security confirmation
 
On the Effective Date, each Obligor confirms that:
 

 (a)
any Security created by it under the Finance Documents extends to the obligations of the relevant Obligors under the Finance Documents as amended and supplemented by this Agreement;
 

 (b)
the obligations of the relevant Obligors under the Amended Facility Agreement are included in the Secured Liabilities (as defined in the Security Documents to which it is a party);
 

 (c)
the Security created under the Finance Documents continues in full force and effect on the terms of the respective Finance Documents; and
 

 (d)
to the extent that this confirmation creates a new Security, such Security shall be on the terms of the Security Documents in respect of which this confirmation is given.

4

 4.5
Finance Documents to remain in full force and effect
 
The Finance Documents shall remain in full force and effect and, from the Effective Date:
 

 (a)
in the case of the Facility Agreement as amended and supplemented pursuant to Clause 4.1 (Specific amendments to the Facility Agreement) of this Agreement;
 

 (b)
in the case of the each Finance Document (other than the Facility Agreement) as amended and supplemented pursuant to Clause 4.2 (Amendments to Finance Documents) of this Agreement;
 

 (c)
each Finance Document and the applicable provisions of this Agreement will be read and construed as one document; and
 

 (d)
except to the extent expressly waived by the amendments effected by this Agreement, no waiver is given by this Agreement and the Lender expressly reserves all its rights and remedies in respect of any breach of or other Default under the Finance Documents.
 

 5
FURTHER ASSURANCE
 
Clause 23.22 (further assurance) of the Facility Agreement, as amended and supplemented by this Agreement, applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.
 

 6
COSTS AND EXPENSES
 
Clause 16.2 (amendment costs) of the Facility Agreement, as amended and supplemented by this Agreement, applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.
 

 7
NOTICES
 
Clause 36 (notices) of the Facility Agreement, as amended and supplemented by this Agreement, applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.
 

 8
COUNTERPARTS
 
This Agreement 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 Agreement.
 

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

 10
ENFORCEMENT
 

 10.1
Jurisdiction
 

 (a)
The courts of England have 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 or any non-contractual obligation arising out of or in connection with this Agreement) (a "Dispute").

5

 (b)
The Obligors accept that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Obligor will argue to the contrary.
 

 (c)
To the extent allowed by law, this Clause 10.1 (Jurisdiction) is for the benefit of the Lender only. As a result, the Lender shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions.
 

 10.2
Service of process
 

 (a)
Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales):
 

 (i)
irrevocably appoints Messrs Shoreside Agents Ltd, presently at 5 St Helen's Place, London EC3A 6AB (T: +44 (0)20 3771 8869, M: + 44 (0) 7591 440086, Fax: +44 (0)20 3771 8870, attention: Andrew Johnson) as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and
 

 (ii)
agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned.
 

 (b)
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 Borrowers (on behalf of all the Obligors) must immediately (and in any event within five days of such event taking place) appoint another agent on terms acceptable to the Lender. Failing this, the Lender may appoint another agent for this purpose.
 
This Agreement has been entered into on the date stated at the beginning of this Agreement.

6
SCHEDULE 1

THE PARTIES

THE HEDGE GUARANTORS

Name of  Hedge
Guarantor
  
Place of Incorporation
  
Registration number
(or equivalent, if any)
  
Address for Communication
             
 
World Shipping Co.
  
 
Republic of the Marshall Islands
  
 
109649
  
c/o  154   Vouliagmenis
Avenue, 166 74 Glyfada, Greece
 
Attention: Stamatios
Tsantanis/ Stavros Gyftakis
 
Email sgyftakis@seanergy.gr
   finance@seanergy.gr
 
Tel.: +30 213 0181507
             
Honor Shipping Co.
  
Republic of the Marshall Islands
  
114553
  
c/o          154          Vouliagmenis
Avenue, 166 74 Glyfada, Greece
 
Attention: Stamatios
Tsantanis/ Stavros Gyftakis
 
Email sgyftakis@seanergy.gr
finance@seanergy.gr
 
Tel.: +30 213 0181507

7
SCHEDULE 2

CONDITIONS PRECEDENT
 

 1
Obligors
 
Documents of the kind specified in schedule 2, part A, paragraph 1 of the Facility Agreement.
 

 2
Security
 
A duly executed original of this Agreement.
 

 3
Legal opinions
 
A legal opinion of Watson Farley & Williams, legal advisers to the Lender in England, substantially in the form obtained by the Lender before signing this Agreement.
 

 4
Other documents and evidence
 

 4.1
Evidence that any process agent referred to in Clause 10.2 (Service of process) of this Agreement has accepted its appointment in relation to this Agreement.
 

 4.2
A copy of any other Authorisation or other document, opinion or assurance which the Lender considers to be necessary or desirable (if it has notified the Borrowers accordingly) in connection with the entry into and performance of the transactions contemplated by this Agreement, or for the validity and enforceability of any Finance Document as amended and supplemented by this Agreement.
 

 4.3
Evidence that the fees, costs and expenses then due from the Borrowers pursuant to Clause 6 (Costs and Expenses) of this Agreement have been paid or will be paid by the Effective Date.

8
EXECUTION PAGES

BORROWERS


SIGNED by Stavros Gyftakis
)
as attorney-in-fact
)      /s/ Stavros Gyftakis
for and on behalf of
)
WORLD SHIPPING CO.
)
in the presence of:
)


Witness' signature:
)      /s/ Maria Kalothetou
Witness' name: Maria Kalothetou
)
Witness' address:
)
154 Vouliagmenis Avenue
16674, Glyfada, Athens, Greece

SIGNED by Stavros Gyftakis
)
as attorney-in-fact
)      /s/ Stavros Gyftakis
for and on behalf of
)
HONOR SHIPPING CO.
)
in the presence of:
)
   
Witness' signature:
)     /s/ Maria Kalothetou
Witness' name: Maria Kalothetou
)
Witness' address:
)
154 Vouliagmenis Avenue
16674, Glyfada, Athens, Greece
  

GUARANTOR  
   
SIGNED by Stavros Gyftakis
)
as attorney-in-fact
)      /s/ Stavros Gyftakis
duly authorised
)
for and on behalf of
)
SEANERGY MARITIME HOLDINGS CORP.
)
in the presence of:
)
   
Witness' signature:
)    /s/ Maria Kalothetou
Witness' name: Maria Kalothetou
)
Witness' address:
)
154 Vouliagmenis Avenue
16674, Glyfada, Athens, Greece
  

9
HEDGE GUARANTORS  
   
SIGNED by Stavros Gyftakis
)
as attorney-in-fact
)  /s/ Stavros Gyftakis
for and on behalf of
)
WORLD SHIPPING CO.
)
in the presence of:
)

 
Witness' signature:
)  /s/ Maria Kalothetou
Witness' name: Maria Kalothetou
)
Witness' address:
)
 154 Vouliagmenis Avenue
16674, Glyfada, Athens, Greece
  

SIGNED by Stavros Gyftakis
)
as attorney-in-fact
)  /s/ Stavros Gyftakis
for and on behalf of
)
HONOR SHIPPING CO.
)
in the presence of:
)

 
Witness' signature:
)  /s/ Maria Kalothetou
Witness' name: Maria Kalothetou
)
Witness' address:
)
 154 Vouliagmenis Avenue
16674, Glyfada, Athens, Greece
 

LENDER  
   
SIGNED by
)
and by
) /s/ Konstantinos Kontopoulos          /s/ Birlis Charalampos
     Konstantinos Kontopoulos          BIRLIS CHARALAMPOS
duly authorised
)
for and on behalf of
)
PIRAEUS BANK S.A.
)
in the presence of:
)
   
Witness' signature:
) /s/ Charikleia Mavromati
Witness' name:
)
Witness' address:
 
)         CHARIKLEIA MAVROMATI
                 ATTORNEY-AT-LAW
WATSON FARLEY & WILLIAMS GREECE
             348 SYNGROU AVENUE
                 176 74 KALIITHEA
                  ATHENS GREECE


10
EX-4.35 10 ef20015287_ex4-35.htm EXHIBIT 4.35
Exhibit 4.35
 
To:
WORLD SHIPPING CO.
(“Borrower A”)
and
HONOR SHIPPING CO.
(“Borrower B”)
each of Trust Company Complex
Ajeltake Road, Ajeltake Island, Majuro
Marshall Islands MH 96960
as joint and several borrowers and joint and several hedge guarantors
(together, the “Borrowers” and each a “Borrower”)

SEANERGY MARITIME HOLDINGS CORP.
Trust Company Complex
Ajeltake Road, Ajeltake Island, Majuro
Marshall Islands MH 96960
In its capacities as guarantor and shareholder
(the “Guarantor”)
 
SEANERGY SHIPMANAGEMENT CORP.
Trust Company Complex
Ajeltake Road, Ajeltake Island,
Majuro, Marshall Islands MH 96960
(the “Approved Manager”)
 
From: PIRAEUS BANK S.A.
170 Alexandras Avenue
115 21 Athens
Greece
with General Commercial Registry
corporate registration number 157660660000
(the “Lender”)

 
 3
July 2023

Dear all
 
Facility agreement dated 22 June 2022 as amended and supplemented by a side letter agreement dated 24 June 2022 and by a supplemental agreement dated 3 July 2023 (together, the “Facility Agreement”) made between (i) the Borrowers, as joint and several borrowers and joint and several hedge guarantors, (ii) the Guarantor as guarantor and (iii) the Lender, as lender, in respect of a loan facility of (originally) up to US$38,000,000
 
1
LIBOR DISCONTINUANCE
 
(a)
The Transaction Obligors:
 
  (i)
acknowledge that the discontinuation of LIBOR will affect a great number of facility agreements in the international and domestic loan markets, as they will need to be amended to provide for a replacement benchmark rate;



(ii)
note that it is considered in the market that the most efficient way to amend such facility agreements (including the Facility Agreement) is to adopt a standardised approach in their amendment; and
 

 (iii)
consequently, accept that the provisions of this Agreement will override any conflicting provisions in the Facility Agreement, without the need to list such provisions or to, otherwise, specifically refer to them in this Agreement.
 
(b)
To address the issue of LIBOR discontinuation, this Agreement supplements the Facility Agreement and:
 

 (i)
sets out the main terms for the replacement of LIBOR as the benchmark rate for the calculation of interest under the Facility Agreement by a successor rate (the “LIBOR Replacement”); and


(ii)
effects the consequential amendments required to the Facility Agreement, to give effect to the LIBOR Replacement.

2
INTERPRETATION
 
(a)
Definitions
 
In this Agreement:
 
“Amended Facility Agreement” means the Facility Agreement as amended and supplemented by this Agreement.
 
“Effective Date” means the date on which the Lender notifies the Borrowers as to the satisfaction of the conditions precedent as provided in Part 3 (Conditions Precedent) of the Schedule in form and substance satisfactory to the Lender.
 
“Mortgage A” means a first preferred Marshall Islands mortgage over m.v. “WORLDSHIP” with official number 9531 executed by Borrower A in favour of the Lender duly recorded on June 27, 2022 at 12:12 P.M., E.E.S.T. at Piraeus, Greece (June 27, 2022 at 05:12 A.M., E.D.S.T. in the Central Office of the Maritime Administrator) in Book PM 33 at Page 1320.

“Mortgage Addenda” means together the Mortgage Addendum A and the Mortgage Addendum B.
 
“Mortgage Addendum A” means a mortgage addendum to Mortgage A to be entered into between Borrower A and the Lender.
 
“Mortgage Addendum B” means a mortgage addendum to Mortgage B to be entered into between Borrower B and the Lender.

“Mortgage B” means a first preferred Marshall Islands mortgage over m.v. “HONORSHIP” with official number 10071 executed by Borrower B in favour of the Lender duly recorded on June 27, 2022 at 06:31 A.M., E.E.S.T. at Piraeus, Greece (June 26, 2022 at 11:31 P.M., E.D.S.T. in the Central Office of the Maritime Administrator) in Book PM 33 at Page 1328.

2
(b)
Defined expressions
 
All other defined expressions shall have the meaning given to them in Part 2 of the Schedule. Any other defined expressions in the Facility Agreement and the other Finance Documents shall continue to have the same meanings and shall have the same meanings when used in this Agreement, unless the context otherwise requires or unless otherwise defined in this Agreement (including Part 2 of the Schedule hereto).

(c)
Construction
 

 (i)
References to “this Agreement” shall include the Schedule to it.
 

 (ii)
Clause 1.2 (construction) of the Facility Agreement applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.
 
(d)
Designation as a Finance Document
 
The Borrowers and the Lender designate this Agreement as a Finance Document.
 

 (e)
Third party rights
 

 (i)
Unless provided to the contrary in a Finance Document, a person (other than the Lender or a Transaction Obligor) has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.
 

 (ii)
Notwithstanding any term of any Finance Document, the consent of any person (other than the Lender or a Transaction Obligor) is not required to rescind or vary this Agreement at any time.
 
3
CONDITIONS PRECEDENT
 
(a)
The Effective Date cannot occur unless the Lender has received all of the documents and other evidence listed in Part 3 (Conditions Precedent) of the Schedule in form and substance satisfactory to the Lender on or before the date of this Agreement or such later date as the Lender may agree with the Borrowers.
 
(b)
The Lender shall notify the Borrowers promptly upon being satisfied as to the satisfaction of the conditions precedent referred to in paragraph (a) above.
 
4
REPRESENTATIONS
 
(a)
Transaction Obligor representations
 
On the date of this Agreement and on the Effective Date, each Transaction Obligor represents and warrants to the Lender that:

  (i)
it is a corporation, duly incorporated or formed and validly existing under the laws of its jurisdiction of incorporation or formation;

3
  (ii)
the obligations expressed to be assumed by it in this Agreement are, subject to any general principles of law limiting its obligations which are applicable to creditors generally, legal, valid, binding and enforceable obligations;


(iii)
the entry into and performance by it of this Agreement does not and will not:

  (A)
conflict with any law or regulation applicable to it, its constitutional documents or any agreement or instrument binding upon it or any of its assets; or
 

 (B)
constitute a default or termination event (however described) under any agreement or instrument binding on it or any of its assets; and
 

 (iv)
it has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, this Agreement and, in the case of the Borrowers, the Amended Facility Agreement.
 
(b)
No representations or advice
 

 (i)
Each Transaction Obligor confirms to the Lender that it has made (and shall continue to make) its own independent investigation and assessment of the merits and effect of the amendments contemplated by this Agreement, including, without limitation:
 

 (A)
the impact of those amendments on the payments to be made under the Amended Facility Agreement (and under any associated transaction, including any hedging or derivative transaction entered into or to be entered into in relation to the Amended Facility Agreement);
 

 (B)
the administration of, submission of data to, or any other matter related to, any rate referred to in, or contemplated by, the Amended Facility Agreement;
 

 (C)
the suitability of any rate referred to in, or contemplated by, the Amended Facility Agreement for any Transaction Obligor or any entity related to it; or


(D)
the composition or characteristics of any rate referred to in, or contemplated by, the Amended Facility Agreement, including whether it is similar to, produces the same value or economic equivalence to, or has the same volume or liquidity as, any rate which it replaces (in whole or in part).


(ii)
The Lender makes no representation or warranty as to any matter referred to in sub- paragraph (i) above. Each Transaction Obligor agrees that it has not entered into this Agreement in reliance on any such representation or warranty, acknowledges that it is responsible for taking its own advice in relation to this Agreement and the matters referred to in sub- paragraph (i) above and agrees that it has not received or relied upon any such advice from the Lender, and waives all rights and remedies in respect of those matters.

4
5
AMENDMENTS

(a)
Amendments


(i)
On and from the Effective Date, the amendments set out in Part 1 and Part 2 of the Schedule will take effect and will override any contrary provisions in the Facility Agreement.
 

 (ii)
This Agreement shall be read together with the Facility Agreement and, when there is any conflict between this Agreement and any other provision of any Finance Document, this Agreement will prevail (without prejudice to any rights or obligations accruing before the Effective Date).
 
(b)
Consents
 
On the Effective Date:


 (i)
each Borrower:
 

 (A)
confirms its acceptance of the Amended Facility Agreement;
 

 (B)
agrees that it is bound as a Borrower (as defined in the Amended Facility Agreement);
 

 (C)
confirms that the definition of, and references throughout each of the Finance Documents to, the Facility Agreement shall be construed as if the same referred to the Amended Facility Agreement; and
 

 (ii)
the Guarantor confirms that:


(A)
its guarantee (included in clause 17 (Guarantee and indemnity) of the Facility Agreement) extends to the obligations of the Borrowers under the Finance Documents as amended and supplemented by this Agreement;


(B)
the obligations of the Borrowers under the Finance Documents as amended and supplemented by this Agreement are included in the Secured Liabilities; and
 

 (C)
its guarantee (included in clause 17 (Guarantee and indemnity) of the Facility Agreement) continues to have full force and effect in accordance with its terms as so extended.
 
(c)
Security confirmation
 
On the Effective Date, each Transaction Obligor confirms that:


 (i)
any Security created by it under the Finance Documents extends to the obligations of the Borrowers under the Amended Facility Agreement and the other Finance Documents;

5

 (ii)
the obligations of the Borrowers under the Amended Facility Agreement are included in the Secured Liabilities (as defined in the Finance Documents to which it is a party);
 

 (iii)
the Security created under the Finance Documents continues in full force and effect on the terms of the respective Finance Documents; and


(iv)
this Security confirmation neither creates nor purports to create a registrable Security.
 
(d)
Finance Documents to remain in full force and effect

The Finance Documents shall remain in full force and effect and, from the Effective Date:

  (i)
in the case of the Facility Agreement as amended and supplemented pursuant to this Agreement;
 

 (ii)
the Facility Agreement and the applicable provisions of this Agreement will be read and construed as one document; and
 

 (iii)
except to the extent expressly waived by the amendments effected by this Agreement, no waiver is given by this Agreement and the Lender expressly reserves all its rights and remedies in respect of any breach of, or default (however described) under the Finance Documents.

6
MISCELLANEOUS
 
(a)
This Agreement 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 Agreement.
 
(b)
The Borrowers shall, on demand, pay the Lender the amount of all costs and expenses (including legal fees of legal advisers of the Lender) reasonably incurred by the Lender in connection with the negotiation, preparation, printing and execution of this Agreement and any other documents referred to in this Agreement.

7
GOVERNING LAW AND JURISDICTION
 
(a)
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
 
(b)
The courts of England have 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 or any non-contractual obligation arising out of or in connection with this Agreement) (a “Dispute”).
 
(c)
The Borrowers accept that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly the Borrowers will not argue to the contrary.
 
(d)
To the extent allowed by law, this Paragraph 7 (Governing Law and Jurisdiction) is for the benefit of the Lender only. As a result, the Lender shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions.
 
6
Yours faithfully

LENDER




SIGNED by )
 /s/ Konstantinos Kontopoulos /s/ Birlis Charalampos
duly authorised for and on behalf of )
 Konstantinos Kontopoulos
 BIRLIS CHARALAMPOS
PIRAEUS BANK S.A. )

in the presence of: )
 /s/ Charikleia Mavromati


CHARIKLEIA MAVROMATI

ATTORNEY-AT-LAW

WATSON FARLEY & WILLIAMS GREECE
  348 SYNGROU AVENUE
  176 74 KALIITHEA
  ATHENS GREECE

We hereby acknowledge receipt of the above Agreement and confirm our agreement to its terms.

SIGNED by Stavros Gyftakis )
 /s/ Stavros Gyftakis
its attorney-in fact )
for and on behalf of
 )
WORLD SHIPPING CO. )
in the presence of: Maria Kalothetou )
 /s/ Maria Kalothetou
Date: 3
 July 2023 154 Vouliagmenis Avenue  

16674 Glyfada, Athens Greece  


SIGNED by Stavros Gyftakis )
 /s/ Stavros Gyftakis
its attorney-in fact )
for and on behalf of )
HONOR SHIPPING CO. )
in the presence of: Maria Kalothetou )
 /s/ Maria Kalothetou
Date: 3
 July 2023 154 Vouliagmenis Avenue

16674 Glyfada, Athens Greece

7
SIGNED by Stavros Gyftakis ) /s/ Stavros Gyftakis
its attorney-in fact
)
for and on behalf of )
SEANERGY MARITIME HOLDINGS CORP. )
in the presence of: Maria Kalothetou ) /s/ Maria Kalothetou
Date: 3
 July 2023 154 Vouliagmenis Avenue

16674 Glyfada, Athens Greece

SIGNED by Stamatios Tsantanis ) /s/ Stamatios Tsantanis
its President )
for and on behalf of )
SEANERGY SHIPMANAGEMENT CORP. )
in the presence of: Maria Kalothetou ) /s/ Maria Kalothetou
Date: 3
 July 2023 154 Vouliagmenis Avenue

16674 Glyfada, Athens Greece

8
SCHEDULE

PART 1
 
TERM SOFR OPERATIVE PROVISIONS

1
RATE SWITCH
 
1.1
Switch to Reference Rate
 
Subject to Paragraph 1.2 (Delayed switch for existing LIBOR Loans) below, on and from the Rate Switch Date:
 
(a)
use of the Reference Rate will replace the use of LIBOR for the calculation of interest for any Loan, any part of the Loan or Unpaid Sum; and
 
(b)
any Loan or any part of the Loan or Unpaid Sum shall be a “Term SOFR Loan” and Paragraph 2.1 (Calculation of interest – Term SOFR Loans) below shall apply to such Loan, any such part of the Loan or Unpaid Sum.
 
1.2
Delayed switch for existing LIBOR Loans
 
If the Rate Switch Date falls before the last day of an Interest Period for a LIBOR Loan:
 
(a)
any Loan, relevant part of the Loan or Unpaid Sum (as applicable) shall continue to be a LIBOR Loan for that Interest Period and the clause headed “Calculation of interest” in the Facility Agreement (or, in the absence of such clause, any provision in the Facility Agreement setting out the rate of interest on a LIBOR Loan) shall continue to apply to such Loan, relevant part of the Loan or Unpaid Sum (as applicable) for that Interest Period;
 
(b)
any provision of this Part 1 which is expressed to relate solely to a Term SOFR Loan shall not apply in relation to such Loan, relevant part of the Loan or Unpaid Sum (as applicable) for that Interest Period; and
 
(c)
on and from the first day of the next Interest Period (if any) for such Loan, relevant part of the Loan or Unpaid Sum (as applicable):
 
  (i)
such Loan, relevant part of the Loan or Unpaid Sum (as applicable) shall be a “Term SOFR Loan”; and
 

 (ii)
Paragraph 2.1 (Calculation of interest – Term SOFR Loans) below shall apply to it.
 
2
INTEREST
 
2.1
Calculation of interest – Term SOFR Loans
 
The rate of interest on each Term SOFR Loan for an Interest Period is the percentage rate per annum which is the aggregate of the applicable:

9
(a)
Margin;
 
(b)
Reference Rate; and
 
(c)
Credit Adjustment Spread.
 
3
INTEREST PERIODS

(a)
An Interest Period in respect of a LIBOR Loan may not be selected if it would extend beyond the Rate Switch Date.
 
(b)
In respect of a Term SOFR Loan, the Borrowers may select an Interest Period of one, three or six Months or of any other period agreed between the Borrowers and the Lender.
 
4
CHANGES TO THE CALCULATION OF INTEREST
 
4.1
Unavailability of Term SOFR

(a)
Interpolated Term SOFR: If no Term SOFR is available for the Interest Period of a Term SOFR Loan, the applicable Reference Rate shall be the Interpolated Term SOFR for a period equal in length to the Interest Period of that Term SOFR Loan.
 
(b)
Cost of funds: If no Term SOFR is available for the Interest Period and it is not possible to calculate the Interpolated Term SOFR, Paragraph 4.3 (Cost of funds) below shall apply to that Term SOFR Loan for that Interest Period.
 
4.2
Market disruption
 
In the case of a Term SOFR Loan, if, before close of business in London on the Term SOFR Quotation Day, the Lender notifies the Borrowers that the cost to it of funding that Term SOFR Loan would be in excess of the Market Disruption Rate then Paragraph 4.3 (Cost of funds) below shall apply to that Term SOFR Loan for the relevant Interest Period.
 
4.3
Cost of funds
 
(a)
If this Paragraph 4.3 (Cost of funds) applies to a Term SOFR Loan for an Interest Period, Paragraph 2.1 (Calculation of interest - Term SOFR Loans) above shall not apply to that Term SOFR Loan for that Interest Period and the rate of interest on that Term SOFR Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:


(i)
the Margin; and
 

 (ii)
the rate notified to the Borrowers by the Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period for that Term SOFR Loan, to be that which expresses as a percentage rate per annum the cost to the Lender of funding that Term SOFR Loan.
 
(b)
If this Paragraph 4.3 (Cost of funds) applies and the Lender or the Borrowers so require, the Lender and the Borrowers shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.
 
10
(c)
If paragraph (d) below does not apply and any rate notified by the Lender under sub-paragraph (ii) of paragraph (a) above is less than zero, the relevant rate shall be deemed to be zero.

(d)
If this Paragraph 4.3 (Cost of funds) applies pursuant to Paragraph 4.2 (Market disruption) and the Lender’s Funding Rate is less than the Market Disruption Rate, the Lender’s cost of funds in relation to the relevant Term SOFR Loan for that Interest Period shall be deemed, for the purposes of sub-paragraph (ii) of paragraph (a) above, to be the Market Disruption Rate for that Term SOFR Loan.
 
4.4
Break Costs
 
The Borrowers shall, on demand by the Lender, pay to the Lender its Break Costs (if any) attributable to all or any part of a Term SOFR Loan being paid by the Borrowers on a day prior to the last day of an Interest Period for that Term SOFR Loan.

5
PREPAYMENTS
 
5.1
Voluntary prepayment
 
There may be no more than two voluntary prepayments in part of any Term SOFR Loan made in each 12-month period beginning on the Rate Switch Date unless the relevant prepayment is made at the end of an Interest Period relating to that Term SOFR Loan.

6
MISCELLANEOUS
 
After the Rate Switch Date, any reference in the Amended Facility Agreement to the London Interbank Market shall be deemed to be to the Relevant Market.

11
PART 2
 
GENERAL DEFINITIONS AND CONSTRUCTION
 
1
Definitions
 
In this Agreement:
 
“Break Costs” means, in respect of any Term SOFR Loan the amount (if any) by which:

(a)
the interest which the Lender should have received for the period from the date of receipt of all or any part of its participation in the relevant Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
 
exceeds
 
(b)
the amount which the Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.
 
“Business Day” means:
 
(a)
a day (other than a Saturday or a Sunday) on which banks are open for general business in Athens and New York; and
 
(b)
(in relation to the fixing of an interest rate for a Term SOFR Loan) which is a US Government Securities Business Day relating to that Term SOFR Loan.
 
“Credit Adjustment Spread” means, in respect of the Interest Period for any Term SOFR Loan, the rate set out in Column B opposite the length of such Interest Period in the table below:

 
A: Length of Interest
Period
  
B: Credit Adjustment
Spread
  
         
 
≤ 1 Month
  
0.11448%
  
         
 
> 1 Month and ≤ 3
Months
  
0.26161%
  
         
 
> 3 Months and ≤ 6
Months
  
0.42826%
  

12
“Interest Period”:

(a)
has, if the Facility Agreement contains a definition of “Interest Period”, the meaning given to it in that definition; or
 
(b)
if the Facility Agreement does not contain a definition of “Interest Period”, means any period by reference to which interest or other payments in respect of any Loan, any part of the Loan or Unpaid Sum are calculated.
 
“Finance Document” means:
 
(a)
if the Facility Agreement contains a definition of “Finance Document”, any document falling within that definition; or
 
(b)
if the Facility Agreement does not contain a definition of “Finance Document”:
 

 (i)
the Facility Agreement;
 

 (ii)
any mandate letter or fee letter entered into in relation to the Facility Agreement;
 

 (iii)
any document under which any guarantee, Security or other assurance against loss is provided in relation to amounts owing under the Facility Agreement or any other Finance Document;


(iv)
any document under which a Borrower becomes a party to the Facility Agreement or ceases to be a party to the Facility Agreement;


(v)
any master agreement, confirmation, schedule or other agreement entered into by the Borrowers for the purpose of hedging interest payable under the Facility Agreement;
 

 (vi)
any document expressing any intercreditor arrangement, priority arrangement in relation to Security or any similar agreement between the Lender and any creditors of the Borrowers;


(vii)
this Agreement; and


(viii)
any other document designated as a “Finance Document” by the Lender and the Borrowers.

“Funding Rate” means, in relation to a Term SOFR Loan, any individual rate notified by the Lender to the Borrowers pursuant to sub-paragraph (a)(ii) of Paragraph 4.3 (Cost of funds) above.
 
“Interpolated Term SOFR” means, in relation to any Term SOFR Loan, the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:


 (a)
either:

13

 (i)
the applicable Term SOFR (as of the Term SOFR Quotation Day) for the longest period (for which Term SOFR is available) which is less than the Interest Period of that Term SOFR Loan; or
 

 (ii)
if no such Term SOFR is available for a period which is less than the Interest Period of that Term SOFR Loan, SOFR for the day which is two US Government Securities Business Days before the Term SOFR Quotation Day; and


(b)
the applicable Term SOFR (as of the Term SOFR Quotation Day) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of that Term SOFR Loan.
 
“LIBOR” means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate).

“LIBOR Loan” means any Loan, the Loan, part of the Loan or, if applicable, Unpaid Sum which is not a Term SOFR Loan.
 
“Loan”:

(a)
has, if the Facility Agreement contains a definition of “Loan”, the meaning given to it in that definition; or
 
(b)
if the Facility Agreement does not contain a definition of “Loan”, means a loan made or to be made under the Facility Agreement or the principal amount outstanding for the time being of that loan.
 
“Margin”:
 
(a)
has, if the Facility Agreement contains a definition of “Margin”, the meaning given to it in that definition; or
 
(b)
if the Facility Agreement does not contain a definition of “Margin”, means any margin, spread, or any other amount which, prior to the Rate Switch Date, was added to LIBOR to calculate any interest or other amount under the Facility Agreement.
 
“Market Disruption Rate” means the percentage rate per annum which is the aggregate of the Reference Rate and the applicable Credit Adjustment Spread.
 
“part of the Loan”:

(a)
has, if the Facility Agreement contains a definition of “part of the Loan”, the meaning given to it in that definition; or

(b)
if the Facility Agreement does not contain a definition of “part of the Loan”, means an advance, a tranche or any part of the Loan, as the context may require.

14
“Rate Switch Date” means the first day of the Interest Period in respect of the Loan fixed after the Effective Date or any other date agreed as such between the Lender and the Borrowers, but in any event no later than the end of the first interest period falling due after 30 June 2023.
 
“Reference Rate” means, in relation to any Term SOFR Loan:
 
  (a)
the applicable Term SOFR as of the Term SOFR Quotation Day and for a period equal in length to the Interest Period of that Term SOFR Loan; or
 

 (b)
as otherwise determined pursuant to Paragraph 4.1 (Unavailability of Term SOFR),
 
and if, in either case, the aggregate of that rate and the Credit Adjustment Spread is less than zero, the Reference Rate shall be deemed to be such a rate that the aggregate of the Reference Rate and the Credit Adjustment Spread is zero.
 
“Relevant Market” means the market for overnight cash borrowing collateralised by US Government securities.
 
“Secured Liabilities”:

(a)
has, if the Finance Documents contain a definition of “Secured Liabilities” or “Secured Obligations”, the meaning given to that term in that definition (as applicable); or
 
(b)
if the Finance Documents do not contain a definition of “Secured Liabilities” or “Secured Obligations”, means all present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever) of the security provider or the Transaction Obligors (as the case may be) to the Lender under or in connection with the Finance Documents.
 
“Security”:
 
(a)
has, if the Facility Agreement contains a definition of “Security” or “Security Interest”, the meaning given to that term in that definition (as applicable); or
 
(b)
if the Facility Agreement does not contain a definition of “Security” or “Security Interest”, means any mortgage, charge, pledge, lien or other security interest (in any jurisdiction) which secures any obligation of any person, or any other agreement or arrangement having a similar effect.
 
“SOFR” means the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York (or any other person which takes over the administration of that rate) published (before any correction, recalculation or republication by the administrator) by the Federal Reserve Bank of New York (or any other person which takes over the publication of that rate).
 
“Term SOFR” means the Term SOFR reference rate administered by CME Group Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant period published (before any correction, recalculation or republication by the administrator) by CME Group Benchmark Administration Limited (or any other person which takes over the publication of that rate).

15
“Term SOFR Loan” means a Loan or, if applicable, Unpaid Sum which is, or becomes, a “Term SOFR Loan” pursuant to Paragraph 1 (Rate Switch) of Part 1 (Term SOFR Operative Provisions) of this Schedule.
 
“Term SOFR Quotation Day” means, in relation to any period for which an interest rate is to be determined in respect of a Term SOFR Loan, two US Government Securities Business Days before the first day of that period (unless market practice differs in the relevant loan market, in which case the Term SOFR Quotation Day will be determined by the Lender in accordance with that market practice (and if quotations would normally be given on more than one day, the Term SOFR Quotation Day will be the last of those days)).

“Transaction Obligor” means the Borrowers, the Guarantor or the Approved Manager. “Unpaid Sum”:
 
(a)
has, if the Facility Agreement contains a definition of “Unpaid Sum”, the meaning given to it in that definition; or
 
(b)
if the Facility Agreement does not contain a definition of “Unpaid Sum”, means any sum due and payable but unpaid by the Borrowers under the Finance Documents, howsoever defined (if at all).
 
“US Government Securities Business Day” means any day other than:
 

 (a)
a Saturday or a Sunday; and
 

 (b)
a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in US Government securities.
 
2
Construction
 
Unless a contrary indication appears, a reference in this Agreement to:
 
(a)
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;
 
(b)
a provision of law is a reference to that provision as amended or re-enacted from time to time;
 
(c)
the Lender’s “cost of funds” in relation to any Term SOFR Loan is a reference to the average cost (determined either on an actual or a notional basis) which the Lender would incur if it were to fund, from whatever source(s) it may reasonably select, an amount equal to the amount of that Term SOFR Loan for a period equal in length to the Interest Period of that Term SOFR Loan;
 
(d)
a page or screen of an information service displaying a rate shall include:
 

 (i)
any replacement page of that information service which displays that rate; and
 

 (ii)
the appropriate page of such other information service which displays that rate from time to time in place of that information service,
 
and, if such page or service ceases to be available, shall include any other page or service displaying that rate specified by the Lender after consultation with the Borrowers.

16
PART 3

CONDITIONS PRECEDENT
 
1
Corporate documentation

(a)
A copy of the constitutional documents of each Transaction Obligor.
 
(b)
A copy of a resolution of the board of directors of each Transaction Obligor (other than the Approved Manager):
 

 (i)
approving the terms of, and the transactions contemplated by, this Agreement and, where appropriate, the relevant Mortgage Addendum and resolving that it executes this Agreement and, where appropriate, the relevant Mortgage Addendum;
 

 (ii)
authorising a specified person or persons to execute this Agreement and, where appropriate, the relevant Mortgage Addendum on its behalf; and
 

 (iii)
authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched by it under, or in connection with, this Agreement and, where appropriate, the relevant Mortgage Addendum.

(c)
An original of the power of attorney of each Transaction Obligor (other than the Approved Manager)authorising a specified person or persons to execute this Agreement and, where appropriate, the relevant Mortgage Addendum.

(d)
A specimen of the signature of each person authorised by the resolution referred to in paragraph (b) above.
 
(e)
A copy of a resolution signed by all the holders of the issued shares in each Borrower approving the terms of, and the transactions contemplated by, this Agreement and, where appropriate, the relevant Mortgage Addendum.
 
2
Finance Documents

(a)
A duly executed original of this Agreement.

(b)
Duly executed originals of the Mortgage Addenda together with documentary evidence that the Mortgage Addenda have been duly registered as valid addenda in accordance with the laws of the Republic of the Marshall Islands.
 
3
Legal Opinions
 
(a)
A legal opinion of Watson Farley & Williams Greece, legal advisers to the Lender in England, substantially in the form distributed to the Lender before signing this Agreement.
 
(b)
Legal opinions of the legal advisers to the Lender in the jurisdiction of the Marshall Islands and such other relevant jurisdictions as the Lender may require.

4
Other documents and evidence

Evidence that the fees, costs and expenses then due from the Borrowers pursuant to paragraph (b) of Clause 6 (Miscellaneous) have been paid or will be paid by the date of this Agreement.


 17
EX-4.36 11 ef20015287_ex4-36.htm EXHIBIT 4.36
Exhibit 4.36

Dated 18 April 2023
 
FELLOW SHIPPING CO.
PREMIER MARINE CO.
as Original Borrowers

and
 
CHAMPION MARINE CO.
as Additional Borrower

and

SEANERGY MARITIME HOLDINGS CORP.
as Parent Guarantor and as Shareholder

and
 
DANISH SHIP FINANCE A/S
as Lender

DEED OF ACCESSION, AMENDMENT AND RESTATEMENT
relating to a facility agreement dated 10 October 2022



Index

Clause
  
Page
     
1
Definitions and Interpretation
3
2
Agreement of the Lender
4
3
Conditions Precedent
5
4
Representations
5
5
Amendment and Restatement of Facility Agreement and other finance documents
5
6
Accession and Assumption
6
7
Security
7
8
Further Assurances
8
9
Costs and Expenses
8
10
Notices
8
11
Counterparts
8
12
Law and Jurisdiction
8
13
Enforcement
8
 
Schedules
  
   
Schedule 1 Conditions Precedent
10
   
Execution
  
   
Execution Pages
13
   
Appendices
  
   
Appendix Form of Amended and Restated Facility Agreement


THIS DEED is made on 18 April 2023
 
PARTIES
 
(1)
FELLOW SHIPPING CO., a corporation incorporated in the Republic of the Marshall Islands, with registered number 97694, whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands as a borrower (“Original Borrower A”)
 
(2)
PREMIER MARINE CO., a corporation incorporated in the Republic of the Marshall Islands, with registered number 77643, whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands as a borrower (“Original Borrower B”)
 
(3)
CHAMPION MARINE CO., a corporation incorporated in the Republic of the Marshall Islands, with registered number 98305, whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands as a borrower (“Additional Borrower”);
 
(4)
SEANERGY MARITIME HOLDINGS CORP., a corporation incorporated in the Republic of the Marshall Islands, with registered number 27721, whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands as a parent guarantor (in such capacity, the “Parent Guarantor”) and as shareholder (in such capacity, the “Shareholder”)
 
(5)
DANISH SHIP FINANCE A/S of Sankt Annae Plads 3, Dk-1250 Copenhagen K, Denmark as lender (the “Lender”)
 
BACKGROUND
 
(A)
By a facility agreement dated 10 October 2022 and made among (i) the Original Borrowers as joint and several borrowers, (ii) the Parent Guarantor as guarantor and (ii) the Lender, the Lender agreed to make available to the Original Borrowers a facility of $28,000,000.
 
(B)
The Original Borrowers have requested (the “Request”) that the Lender consents to, inter alia, the following:
 

 (i)
the Additional Borrower acceding to the Facility Agreement and to certain of the other Finance Documents and assuming jointly and severally with the Original Borrowers, the Original Borrowers’ obligations thereunder; and
 

 (ii)
the increase of the Facility by an amount of up to $15,750,000 to be made available to the Borrowers, as joint and several borrowers in one additional tranche to refinance part of the existing indebtedness secured over the m.v. “CHAMPIONSHIP” having IMO No. 9403516 (the “New Ship”).
 
(C)
This Deed sets out the terms and conditions on which the Lender shall agree, with effect on and from the Effective Date, to:
 

 (i)
the Request; and
 


 (ii)
the amendment and restatement of the Facility Agreement and any consequential amendments to certain provisions of the Facility Agreement and the other Finance Documents subject to the terms and conditions of this Deed (the “Consequential Amendments”).
 
(D)
The Parties have agreed to amend and restate the Facility Agreement as set out in this Deed.
 
OPERATIVE PROVISIONS

2
1
DEFINITIONS AND INTERPRETATION
 
1.1
Definitions
 
In this Deed:
 
“Amended and Restated Facility Agreement” means the Facility Agreement, as amended and restated by this Deed, in the form set out in the Appendix.
 
“Borrowers” means the Original Borrowers and the Additional Borrower.
 
“Effective Date” means the date on which the Lender confirms in writing that all the conditions precedent in Clause 3 (Conditions precedent) have been satisfied.
 
“Existing Ship” means Existing Ship A or Existing Ship B.
 
“Existing Ship A” means the m.v. “FELLOWSHIP” registered in the ownership of Original Borrower A under the Marshall Islands flag.
 
“Existing Ship B” means the m.v. “PREMIERSHIP” registered in the ownership of Original Borrower B under the Marshall Islands flag.
 
“Facility Agreement” means the facility agreement referred to in Recital (A).
 
“Mortgage Addendum” means, in relation to each Existing Ship, an addendum to the Mortgage in respect thereof in agreed form.
 
“New Tranche” has the meaning given to it in Recital (B).
 
“Original Borrowers” means together Original Borrower A and Original Borrower B.

“Party” means a party to this Deed.
 
“Supplemental Account Security” means, in relation to each Account Security a document creating second priority Security over the Accounts of the relevant Original Borrower, in agreed form and, in the plural means, both of them.
 
“Supplemental Charterparty Assignment” means, in relation to each Existing Ship, a document creating second priority Security over the rights of the relevant Original Borrower under the Assignable Charter in respect of that Existing Ship, in agreed form and, in the plural means, both of them.
 
“Supplemental General Assignment” means, in relation to each Existing Ship, a document creating second priority Security over that Existing Ship’s Earnings, its Insurances and any Requisition Compensation in relation to that Existing Ship in agreed form and, in the plural means, both of them.
 
“Supplemental Security Document” means together:
 

 (a)
the Mortgage Addenda;
 

 (b)
the Supplemental Account Securities;


(c)
the Supplemental Charterparty Assignments;

3

 (d)
the Supplemental General Assignments; and
 

 (e)
the Supplemental Shares Securities.
 
“Supplemental Shares Security” means, in relation to each Original Borrower, a document creating second priority Security over the issued shares of that Original Borrower in agreed form.
 
1.2
Defined expressions
 
Defined expressions in the Facility Agreement and the other Finance Documents shall have the same meanings when used in this Deed unless the context otherwise requires or unless otherwise defined in this Deed.
 
1.3
Application of construction and interpretation provisions of Facility Agreement
 
Clauses 1.2 (construction) to 1.5 (third party rights) (inclusive) of the Facility Agreement apply to this Deed as if they were expressly incorporated in it with any necessary modifications.
 
1.4
Agreed forms of new, and supplements to, Finance Documents
 
References in Clause 1.1 (Definitions) to any document being in “agreed form” are to that document:
 
(a)
in a form attached to a certificate dated the same date as this Deed (and signed by the Borrowers and the Lender); or
 
(b)
in any other form agreed in writing between the Borrowers and the Lender.
 
1.5
Designation as a Finance Document
 
The Borrowers and the Lender designate this Deed as a Finance Document.

1.6
Third party rights
 
(a)
Unless 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 to enjoy the benefit of any term of this Deed.
 
(b)
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 Deed at any time.
 
2
AGREEMENT OF THE LENDER
 
(a)
The Lender agrees subject to and upon the terms and conditions set out in Clause 3 (Conditions Precedent) of this Deed, to:
 

 (i)
the Request; and
 

 (ii)
the Consequential Amendments.
 
(b)
The agreement of the parties to this Deed contained in this Clause 2 (Agreement of the Lender) shall have effect on and from the Effective Date.

4
3
CONDITIONS PRECEDENT
 
(a)
The Effective Date cannot occur unless the Lender has received all of the documents and other evidence listed in Schedule 1 (Conditions Precedent) in form and substance satisfactory to the Lender on or before the Effective Date or such later date as the Lender may agree with the Borrowers.
 
(b)
The Lender shall notify the Borrowers promptly upon being satisfied as to the satisfaction of the conditions precedent referred to in paragraph (a) above.
 
4
REPRESENTATIONS
 
4.1
Facility Agreement representations
 
(a)
Each Obligor that is a party to the Facility Agreement makes the representations and warranties set out in clause 19 (representations) of the Facility Agreement, as amended and restated by this Deed and updated with appropriate modifications to refer to this Deed and, where appropriate, the relevant Supplemental Security Documents, by reference to the circumstances then existing on the date of this Deed and on the Effective Date.
 
(b)
The Additional Borrower makes the representations and warranties set out in clause 19 (representations) of the Facility Agreement, as amended and restated by this Deed and updated with appropriate modifications to refer to this Deed by reference to the circumstances then existing on the date of this Deed and on the Effective Date.
 
4.2
Finance Document representations
 
Each Obligor makes the representations and warranties set out in the Finance Documents (other than the Facility Agreement) to which it is a party, as amended and restated and/or supplemented by this Deed and updated with appropriate modifications to refer to this Deed and, where appropriate, the relevant Mortgage Addendum, by reference to the circumstances then existing on the date of this Deed and on the Effective Date.
 
5
AMENDMENT AND RESTATEMENT OF FACILITY AGREEMENT AND OTHER FINANCE DOCUMENTS
 
5.1
Amendment and restatement of the Facility Agreement
 
With effect on and from the Effective Date (and subject to its occurrence), the Facility Agreement shall be amended and restated in the form of the Amended and Restated Facility Agreement and, shall be deemed by this Deed to be amended and as so amended and restated, the Facility Agreement shall continue to be binding on each of the parties to it in accordance with its terms as so amended and restated.
 
5.2
Amendments to Finance Documents
 
With effect on and from the Effective Date (and subject to its occurrence), each of the Finance Documents (other than the Facility Agreement and each Mortgage which is amended and supplemented by the relevant Mortgage Addendum) shall be, and shall be deemed by this Deed to be, amended as follows:

5
(a)
the definition of, and references throughout each of the Finance Documents to the “Facility Agreement” and any of the other Finance Documents shall be construed as if the same referred to, respectively:
 

 (i)
the Amended and Restated Facility Agreement; and
 

 (ii)
the other Finance Documents as amended and supplemented by this Clause 5.2 (Amendments to Finance Documents) and by such further or consequential modification as may be necessary to give full effect to the terms of this Deed;
 
(b)
the definition of, and references throughout each of the Finance Documents to, a Mortgage shall be construed as if the same referred to that Mortgage as amended and supplemented by the relevant Mortgage Addendum;
 
(c)
by construing references throughout each of the Finance Documents to “the Borrowers” as if the same referred to the Borrowers (including, for the avoidance of doubt, the Additional Borrower) as joint and several borrowers, or, where the context so requires, any of them;
 
(d)
by construing references throughout each of the Finance Documents to “this Agreement”, “this Deed”, “hereunder” and other like expressions as if the same referred to those Finance Documents as amended and/or supplemented by this Deed; and
 
(e)
all cross references in the Facility Agreement will be updated accordingly to reflect the relevant clauses in the Amended and Restated Facility Agreement.
 
5.3
Finance Documents to remain in full force and effect
 
The Facility Agreement and each of the other Finance Documents shall remain in full force and effect and from the Effective Date:

(a)
in the case of the Facility Agreement as amended and restated pursuant to Clause 5 (Amendment and restatement of Facility Agreement and other finance documents);
 
(b)
in the case of the other Finance Documents as amended pursuant to Clause 5.2 (Amendments to Finance Documents) and the relevant Mortgage Addendum; and
 
(c)
the Facility Agreement and the applicable provisions of this Deed will be read and construed as one document; and
 
(d)
except to the extent expressly waived by the amendments effected by this Deed, no waiver is given by this Deed and the Lender expressly reserves all its rights and remedies in respect of any breach of or other Default under the Finance Documents.
 
6
ACCESSION AND ASSUMPTION
 
With effect on and from the Effective Date:
 
(a)
the Additional Borrower agrees that:
 

 (i)
it will accede to the Facility Agreement as amended and restated by this Deed as a Borrower and it will assume the obligations of the Original Borrowers thereunder; and

6

 (ii)
it will be bound, on a joint and several basis with the Original Borrowers, by the terms of the Amended and Restated Facility Agreement;
 
(b)
each Original Borrower confirms and acknowledges that it is and remains a party to the Facility Agreement and that its respective obligations under the Facility Agreement and the other Finance Documents remain in full force and effect;
 
(c)
each Original Borrower further agrees to be jointly and severally liable together with the Additional Borrowers for:
 

 (i)
the repayment of the New Tranche plus interest accrued thereon in accordance with the Amended and Restated Facility Agreement; and


(ii)
all other obligations and liabilities under the Amended and Restated Facility Agreement;
 
(d)
the Original Borrowers, the Parent Guarantor and the Lender agree to the accession by the Additional Borrower to the Amended and Restated Facility Agreement as amended and supplemented by this Deed; and
 
(e)
the Parent Guarantor:
 

 (i)
confirms its acceptance of the amendments effected by this Deed;
 

 (ii)
agrees that it is bound as an Obligor (as defined in the Amended and Restated Facility Agreement); and
 

 (iii)
confirms that its guarantee and indemnity:
 

 (A)
continues to have full force and effect on the terms of the Amended and Restated Facility Agreement; and
 

 (B)
extends to the obligations of the relevant Obligors under the Finance Documents as amended and supplemented by this Deed.
 
7
SECURITY
 
On the Effective Date, each Obligor confirms that:
 
(a)
any Security created by it under the Finance Documents to which it is a party extends to the obligations of the Obligors under the Amended and Restated Facility Agreement and the other Finance Documents (as amended and restated by this Deed and as may be further amended and supplemented from time to time);
 
(b)
the obligations of the Obligors arising under the Amended and Restated Facility Agreement and the other Finance Documents (as amended and restated by this Deed and as may be further amended and supplemented from time to time) are included in the Secured Liabilities; and
 
(c)
the Security created pursuant to the Finance Documents continues in full force and effect on the terms of the respective Finance Documents (as amended and supplemented by this Deed and as may be further amended and supplemented from time to time).

7
8
FURTHER ASSURANCES
 
Clause 22.25 (further assurance) of the Facility Agreement applies to this Deed as if it were expressly incorporated in this Deed with any necessary modifications.
 
9
COSTS AND EXPENSES
 
The provisions of clause 16 (costs and expenses) of the Facility Agreement, as amended and restated by this Deed, shall apply to this Deed as if they were expressly incorporated in this Deed with any necessary modifications.

10
NOTICES
 
The provisions of clause 34 (notices) of the Facility Agreement shall apply to this Deed as if they were expressly incorporated in this Deed with any necessary modifications.
 
11
COUNTERPARTS
 
This Deed may be executed in any number of counterparts.
 
12
LAW AND JURISDICTION
 
12.1
Governing law
 
This Deed and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.
 
13
ENFORCEMENT
 
13.1
Jurisdiction
 
(a)
The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Deed (including a dispute regarding the existence, validity or termination of this Deed or any non-contractual obligation arising out of or in connection with this Deed) (a “Dispute”).

(b)
The Parties accept that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.
 
(c)
To the extent allowed by law, this Clause 13.1 (Jurisdiction) is for the benefit of the Lender only. As a result, the Lender shall be not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions.

13.2
Process agent

Each of the Borrowers, the Parent Guarantor and the Sharheolder irrevocably appoints Shoreside Agents Ltd, presently at 5 St Helen’s Place, London EC3A 6AB, England (T: +44 (0)20 3771 8869, M: + 44 (0) 7591 440086, F: +44 (0)20 3771 8870, attention: Andrew Johnson) to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English Courts which are connected with this Deed.
 
This DEED has been duly executed by or on behalf of the parties hereto as a Deed and has, on the date stated at the beginning of this Deed, been delivered as a Deed.

8
SCHEDULE 1
CONDITIONS PRECEDENT

1
Obligors and Additional Borrower
 
1.1
A certificate from an officer of each Obligor and the Additional Borrower confirming the names and offices of all their respective directors and officers and the shareholding of each of its shareholders as the case may be and having attached thereto true and complete copies of their constitutional documents.
 
1.2
A copy of a resolution of the board of directors of each Obligor and the Additional Borrower:
 
(a)
approving the terms of, and the transactions contemplated by, this Deed and (as applicable) each Supplemental Security Document to which it is a party and (as applicable) the Mortgage Addendum to which it is a party and resolving that it execute this Deed, (if applicable) each Supplemental Security Document to which it is a party and (if applicable) the Mortgage Addendum to which it is a party;
 
(b)
authorising a specified person or persons to execute this Deed and (as applicable) each Supplemental Security Document and each Mortgage Addendum to which it is a party on its behalf; and
 
(c)
authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, a Utilisation Request) to be signed and/or despatched by it under, or in connection with, this Deed, each Supplemental Security Document to which it is a party, each Mortgage Addendum to which it is a party and any other Finance Document to which it is a party.
 
1.3
An original of the power of attorney of any Obligor or the Additional Borrower authorising a specified person or persons to execute this Deed and (as applicable) each Supplemental Security Document and each Mortgage Addendum to which it is a party.
 
1.4
A specimen of the signature of each person authorised by the resolutions referred to in paragraph 1.2 above.
 
1.5
A resolution signed by the Shareholder as the holder of the issued shares in each Borrower, approving the terms of, and the transactions contemplated by, this Deed and (as applicable) each Supplemental Security Document and each Mortgage Addendum to which that Borrower is a party.
 
1.6
A certificate of each Obligor and the Additional Borrower (signed by an officer) confirming that borrowing or guaranteeing, as appropriate, the Total Commitments (as defined in the Amended and Restated Facility Agreement) would not cause any borrowing, guaranteeing or similar limit binding on that Obligor or the Additional Borrower to be exceeded.
 
1.7
A certificate of each Obligor and the Additional Borrower that is incorporated outside the UK (signed by an officer) certifying either that (i) it has not delivered particulars of any UK Establishment to the Registrar of Companies as required under the Overseas Regulations or (ii) it has a UK Establishment and specifying the name and registered number under which it is registered with the Registrar of Companies.

9
1.8
A certificate of an authorised signatory of the relevant Obligor and the Additional Borrower certifying that each copy document relating to it specified in this Schedule 1 (Conditions Precedent) is correct, complete and in full force and effect as at a date no earlier than the date of this Deed.
 
1.9
Evidence that each Obligor and the Additional Borrower is in goodstanding under the laws of its Original Jurisdiction (to be confirmed pursuant to a copy of a goodstanding certificate not older than 90 days from the date of this Deed).
 
2
Agreement and Security
 
2.1
A duly executed original of this Deed signed by all Parties to it.
 
2.2
A duly executed original of each Supplemental Security Document (and any other document required thereunder).
 
2.3
A duly executed original of each Mortgage Addendum and evidence that such Mortgage Addendum has been duly registered as a valid addendum to the Mortgage in respect of the relevant Existing Ship in accordance with the laws of the jurisdiction of its applicable Approved Flag.
 
3
Legal opinions
 
3.1
A legal opinion of Watson Farley & Williams, Greece legal advisers to the Lender in England, substantially in the form distributed to the Lenders before signing this Deed.
 
3.2
If an Obligor is incorporated in a jurisdiction other than England and Wales, a legal opinion of the legal advisers to the Lender in the relevant jurisdiction, substantially in the form distributed to the Original Lenders before signing this Deed.
 
3.3
Legal opinions of the legal advisers to the Lender in the jurisdiction of the Approved Flag of each Existing Ship and such other relevant jurisdictions as the Lender may require.
 
4
Other documents and evidence
 
4.1
A copy of a certificate signed by an officer of each Borrower confirming that as at the Effective Date and the date of this Deed:
 
(a)
no Default has occurred and is continuing or is reasonably likely to result from the occurrence of the Effective Date; or
 
(b)
no event described in clause 7.5 (mandatory prepayment on sale or Total Loss) of the Facility Agreement has occurred.
 
4.2
A copy of any other Authorisation or other document, opinion or assurance which the Lender considers to be necessary or desirable in connection with the entry into and performance of the transactions contemplated by this Deed, each Mortgage Addendum and each Supplemental Security Document or for the validity and enforceability of any Finance Document as amended, restated and/or supplemented by this Deed, each Supplemental Security Document or each Mortgage Addendum.

10
4.3
Such evidence as the Lender may require to be able to satisfy each of their “know your customer” or similar identification procedures in relation to the transactions contemplated by this Deed.
 
4.4
A copy of the Group Structure Chart in a form acceptable to the Lender.

4.5
Documentary evidence that the agent for service of process named in Clause 13.2 (Process agent) has accepted its appointment.
 
4.6
Evidence that the fees, costs and expenses then due from the Borrowers pursuant to Clause 9 (Costs and Expenses) have been paid or will be paid by the Effective Date.

11
EXECUTION PAGES

ORIGINAL BORROWERS
  
   
EXECUTED AS A DEED
)
by Stavros Gyftakis
)  /s/ Stavros Gyftakis
duly authorised attorney-in-fact
)
for and on behalf of
)
FELLOW SHIPPING CO.
)
in the presence of:
)

Witness’ signature:
)  /s/ Eliza – Elisavet Makri
  
Witness’ name:
)
  
Witness’ address:
) ELIZA – ELISAVET MAKRI
  
 
ATTORNEY-AT-LAW
  
 
WATSON FARLEY & WILLIAMS GREECE
  
 
348 SYNGROU AVENUE
  
 
176 74  KALLITHEA
  
 
ATHENS – GREECE
  

EXECUTED AS A DEED
)
by Stavros Gyftakis
) /s/ Stavros Gyftakis
duly authorised attorney-in-fact
)
for and on behalf of
)
PREMIER MARINE CO.
)
in the presence of:
)

Witness’ signature:
)  /s/ Eliza – Elisavet Makri
  
Witness’ name:
)
  
Witness’ address:
) ELIZA – ELISAVET MAKRI
  
 
ATTORNEY-AT-LAW
  
 
WATSON FARLEY & WILLIAMS GREECE
  
 
348 SYNGROU AVENUE
  
 
176 74 KALLITHEA
  
 
ATHENS - GREECE
  

ADDITIONAL BORROWER
  
   
EXECUTED AS A DEED
)
by Stavros Gyftakis
) /s/ Stavros Gyftakis
duly authorised attorney-in-fact
)
for and on behalf of
)
CHAMPION MARINE CO.
)
in the presence of:
)
  
     
Witness’ signature:
)  /s/ Eliza – Elisavet Makri
  
Witness’ name:
)
  
Witness’ address:
) ELIZA – ELISAVET MAKRI
  
 
ATTORNEY-AT-LAW
  
 
WATSON FARLEY & WILLIAMS GREECE
  
 
348 SYNGROU AVENUE
  
 
176 74 KALLITHEA
  
 
ATHENS - GREECE
  

12
PARENT GUARANTOR

EXECUTED AS A DEED
)
by Stavros Gyftakis
) /s/ Stavros Gyftakis
duly authorised attorney-in-fact
)
for and on behalf of
)
SEANERGY MARITIME HOLDINGS CORP.
)
in the presence of:
)

Witness’ signature:
)  /s/ Eliza – Elisavet Makri
  
Witness’ name:
)
  
Witness’ address:
) ELIZA – ELISAVET MAKRI
  
 
ATTORNEY-AT-LAW
  
 
WATSON FARLEY & WILLIAMS GREECE
  
 
348 SYNGROU AVENUE
  
 
176 74 KALLITHEA
  
 
ATHENS - GREECE
  

SHAREHOLDER

EXECUTED AS A DEED
)
by Stavros Gyftakis
) /s/ Stavros Gyftakis
duly authorised attorney-in-fact
)
for and on behalf of
)
SEANERGY MARITIME HOLDINGS CORP.
 )
in the presence of:
)

Witness’ signature:
)  /s/ Eliza – Elisavet Makri
  
Witness’ name:
)
  
Witness’ address:
) ELIZA – ELISAVET MAKRI
  
 
ATTORNEY-AT-LAW
  
 
WATSON FARLEY & WILLIAMS GREECE
  
 
348 SYNGROU AVENUE
  
 
176 74 KALLITHEA
  
 
ATHENS - GREECE
  

LENDER

EXECUTED AS A DEED
)
by Kelina Kantzou
) /s/ Kelina Kantzou
duly authorised attorney-in-fact
)
for and on behalf of
)
DANISH SHIP FINANCE A/S
)
in the presence of:
)

Witness’ signature:
)  /s/ Maria Ioanna Pantelaki
  
Witness’ name:
)
  
Witness’ address:
) MARIA IOANNA PANTELAKI
  
 
ATTORNEY-AT-LAW
  
 
WATSON FARLEY & WILLIAMS GREECE
  
 
348 SYNGROU AVENUE
  
 
176 74 KALLITHEA
  
 
ATHENS - GREECE
  

13
APPENDIX
 
FORM OF AMENDED AND RESTATED FACILITY AGREEMENT

Amendments are indicated as follows:

1
additions are indicated by [underlined text in blue]; and

2
deletions are shown by [strike-through text in red].

[Append marked-up version]

14
 
Facility Agreement dated 10 October 2022 as amended and restated by a Deed of Accession, Amendment and Restatement dated April 2023 relating to a US$28,000,000 facility (increased by US$15,750,000 to US$43,750,000)
 
FELLOW SHIPPING CO.
PREMIER MARINE CO.
CHAMPION MARINE CO.
as joint and several Borrowers
 
and
 
SEANERGY MARITIME HOLDINGS CORP.
as Parent Guarantor
 
and
 
DANISH SHIP FINANCE A/S
as Original Lender
 
FACILITY AGREEMENT
 
relating to
(i) the refinancing of the Existing Indebtedness
over m.v. “FELLOWSHIP” and m.v. “PREMIERSHIP”, (ii) the financing of the acquisition cost of m.v. “CHAMPIONSHIP”
and (iii) general corporate purposes
 


Index

Clause
  
Page
     
Section 1 Interpretation
3
1
Definitions and Interpretation
3
Section 2 The Facility
31
2
The Facility
31
3
Purpose
31
4
Conditions of Utilisation
32
Section 3 Utilisation
33
5
Utilisation
33
Section 4 Repayment, Prepayment and Cancellation
35
6
Repayment
35
7
Prepayment and Cancellation
35
Section 5 Costs of Utilisation
36
8
Interest
39
9
Interest Periods
40
10
Changes to the Calculation of Interest
41
11
Fees
42
Section 6 Additional Payment Obligations
43
12
Tax Gross Up and Indemnities
43
13
Increased Costs
46
14
Other Indemnities
48
15
Mitigation by the Lender
50
16
Costs and Expenses
51
Section 7 Guarantees and Joint and Several Liability of Borrowers
53
17
Guarantee and Indemnity – Parent Guarantor
53
18
Joint and Several Liability of the Borrowers
56
Section 8 Representations, Undertakings and Events of Default
58
19
Representations
58
20
Information Undertakings
65
21
Financial Covenants
70
22
General Undertakings
72
23
Insurance Undertakings
78
24
General Ship Undertakings
85
25
Security Cover
92
26
Accounts
95
27
Events of Default
95
Section 9 The Lender and the Obligors
100
28
Changes to the Lender
100
29
Changes to the Transaction Obligors
101
Section 10 Administration
102
30
Payment Mechanics
102
31
Set-Off
104
32
Conduct of Business by the Lender
104
33
Bail-In
104
34
Notices
104
35
Calculations and Certificates
106
36
Partial Invalidity
107
37
Remedies and Waivers
107


38
Entire Agreement
107
39
Settlement or Discharge Conditional
107
40
Irrevocable Payment
108
41
Amendments
108
42
Confidential Information
110
43
Confidentiality of Funding Rates
113
44
Counterparts
114
Section 11 Governing Law and Enforcement
115
45
Governing Law
115
46
Enforcement
115
     
Schedules
  
     
Schedule 1 The Parties
116
 
Part A The Obligors
116
 
Part B The Original Lender
117
Schedule 2 Conditions Precedent
118
 
Part A Conditions Precedent to each Utilisation Request
118
 
Part B Conditions Precedent to Utilisation
121
Schedule 3 Utilisation Request
123
Schedule 4 Form of Compliance Certificate
125
Schedule 5 Timetables
127
Schedule 6 Repayment Schedules
128
Schedule 7 Reference Rate Terms
133
Schedule 8 Daily Non-Cumulative Compounded RFR Rate
137
Schedule 9 Cumulative Compounded RFR Rate
139
Schedule 10 Sustainability Margin Adjustment Schedule
140
Schedule 11 Form of Sustainability Compliance Certificate
143

 
Execution
  

 
Execution Pages
145


THIS AGREEMENT is made on 10 October 2022 as amended and restated on the Effective Date by the Deed of Accession, Amendment and Restatement dated       April 2023
 
PARTIES
 
FELLOW SHIPPING CO., a corporation incorporated in the Republic of the Marshall Islands, with registered number 97694, whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands as borrower (“Borrower A”)
 
PREMIER MARINE CO., a corporation incorporated in the Republic of the Marshall Islands, with registered number 77643, whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands as borrower (“Borrower B”)
 
CHAMPION MARINE CO., a corporation incorporated in the Republic of the Marshall Islands, with registered number 98305, whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands as borrower (“Borrower C” and together with Borrower A and Borrower B, the “Borrowers”)
 
SEANERGY MARITIME HOLDINGS CORP., a corporation incorporated in the Republic of the Marshall Islands, with registered number 27721, whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH96960, Marshall Islands as guarantor (the “Parent Guarantor”); and
 
DANISH SHIP FINANCE A/S as lender (the “Original Lender”)
 
BACKGROUND
 
(A)
The Lenders made available to the Borrowers:
 

 (i) Tranche A, in the amount of $14,000,000 on 10 October 2022 for the purpose of refinancing the existing indebtedness secured on Ship A and for general corporate purposes; and
 
(ii)      Tranche B, in the amount of $14,000,000 on 10 October 2022 for the purposes of refinancing the existing indebtedness secured on Ship B and for general corporate purposes.
 
(B)
The principal amount of the Loan outstanding as the date of the Deed of Accession, Amendment and Restatement is $24,880,000.
 
(C)
By the Deed of Accession, Amendment and Restatement, the Lender agreed to certain amendments to this Agreement and the other Finance Documents for the purpose of, amongst others:
 

 (i) Borrower C acceding to this Agreement as additional borrower;
 

 (ii) effecting an increase of the Facility under this Agreement by an amount of up to $15,750,000 (in the aggregate amount of 43,750,000) to be made available to the Borrowers in one additional Tranche for the purpose of refinancing part of the existing indebtedness secured on Ship C.
 

(D)
This Agreement sets out the terms and conditions of the making of the Facility (or any part thereof) by the Lenders to the Borrowers as amended and restated by the Deed of Accession, Amendment and Restatement.
 
OPERATIVE PROVISIONS
 
2
SECTION 1
 
INTERPRETATION
 
1.
DEFINITIONS AND INTERPRETATION
 
1.1
Definitions
 
In this Agreement:
 
“Account Bank” means Joh. Berenberg, Gossler & Co. KG acting through its office at Hamburg, Germany or any replacement bank or other financial institution as may be approved by the Lender.
 
“Accounting Period” means each consecutive three month period, during the Security Period ending on each Security Cover Testing Date of each financial year.
 
“Accounts” means the Earnings Accounts and the Retention Accounts.
 
“Account Security” means a document creating Security over any Account in agreed form.
 
“Additional Business Day” means any day specified as such in the Reference Rate Terms.
 
“Advance” means a borrowing of all or part of a Tranche under this Agreement.
 
“Affiliate” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
 
“Annex VI” means Annex VI of the Protocol of 1997 to amend the International Convention for the Prevention of Pollution from Ships 1973 (Marpol), as modified by the Protocol of 1978 relating thereto.
 
“Approved Brokers” means any firm or firms of insurance brokers approved in writing by the Lender, such approval not to be unreasonably withheld or delayed.
 
“Approved Classification” means, in relation to Ship A and Ship B as at the date of this Agreement and in relation to Ship C as at the Effective Date:
 

 (a)
in relation to Ship A, 100A1 Bulk Carrier, CSR, BC-A, GRAB[25], Holds Nos. 2, 4, 6 and 8 may be empty, ESP,*IWS, LI, LMC UMS, BWTS*, Descriptive Notes: ShipRight (SCM), BWMP (T) with the relevant Approved Classification Society;
 

 (b)
in relation to Ship B, A1, Bulk Carrier, BC-A Holds 2, 4, 6 and 8 may be empty ESP, AMS, ACCU, Additional Notations: BWT, CRC(I), UWILD with the relevant Approved Classification Society; and
 

 (c)
in relation to Ship C, I HULL MACH Bulk carrier CSR CPS(WBT) BC-A ( maximum cargo density 3.00 t/m3; holds 2,4,6 and 8 may be empty) GRAB [30] ESP Unrestricted navigation EGCS-SCRUBBER , { AUT-UMS , MON-SHAFT , INWATERSURVEY,
 
or, in each case, or the equivalent classification with another Approved Classification Society.
 
“Approved Classification Society” means in relation to Ship A and Ship B as at the date of this Agreement and in relation to Ship C as at the Effective Date:
 
3

 (a)
in relation to Ship A, Lloyd’s Register (LR); and
 
 

 (b)
in relation to Ship B, American Bureau of Shipping (ABS); and
 

 (c)
in relation to Ship C, Bureau Veritas (BV),
 
or, in each case, any other classification society approved in writing by the Lender (such approval not to be unreasonably withheld or delayed).
 
“Approved Commercial Manager” means:
 

 (a)
Seanergy Management Corp., a corporation incorporated in the Republic of the Marshall Islands with registered number 29849, whose registered address is at the Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH 96960, Marshall Islands;
 

 (b)
Fidelity Marine Inc., a corporation incorporated in the Republic of the Marshall Islands with registered number 341411 whose registered address is at the Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH 96960, Marshall Islands; or
 

 (c)
any other person approved in writing by the Lender as the commercial manager of a Ship (such approval not to be unreasonably withheld).
 
“Approved Crew Manager” means:
 

 (a)
V. Ships Greece Ltd., a corporation incorporated in Bermuda having a registered office at 3rd floor, Par La Ville Place, 14 Par La Ville Road, Hamilton HM08, Bermuda;
 

 (b)
V. Ships Limited, a corporation incorporated and existing under the laws of Cyprus whose registered office is at Zenas Gunther, 16-18, Agia Triada, 3035 Limassol, Cyprus;
 

 (c)
Global Seaways S.A. of the Republic of the Marshall Islands, with registered number 85479 whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH 96960, Marshall Islands;
 

 (d)
OSM Ship Management B AS of Norway, with registered office at Svinoddveien 12, 4836, Arendal Norway; or
 

 (e)
any other person approved in writing by the Lender as the crew manager of a Ship (such approval not to be unreasonably withheld).
 
“Approved Flag” means, in relation to a Ship, the flag of the Marshall Islands or Isle of Man or any other flag approved in writing by the Lender.
 
“Approved Manager” means, in relation to a Ship, the Approved Commercial Manager, the Approved Technical Manager or the Approved Crew Manager of that Ship.
 
“Approved Technical Manager” means:
 

 (a)
in respect of Ship A, Seanergy Shipmanagement Corp., a corporation incorporated in the Republic of the Marshall Islands with registered number 71736, whose registered address is at the Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH 96960, Marshall Islands; and
 
4

 (b)
in respect of each of Ship B or Ship C, either (i) V.Ships Limited, a corporation incorporated and existing under the laws of Cyprus whose registered office is at Zenas Gunther, 16-18, Agia Triada, 3035 Limassol, Cyprus or (ii) Seanergy Shipmanagement Corp., a corporation incorporated in the Republic of the Marshall Islands with registered number 71736, whose registered address is at the Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH 96960, Marshall Islands or (iii) V. Ships Greece Ltd., a corporation incorporated in Bermuda having a registered office at 3rd floor, Par La Ville Place, 14 Par La Ville Road, Hamilton HM08, Bermuda,
 
or, in each case, any other person approved in writing by the Lender as the technical manager of a Ship (such approval not to be unreasonably withheld).
 
“Approved Valuer” means Arrow Sale & Purchase (UK) Ltd., Braemar Seascope, Clarksons Platou, Fearnleys AS, Galbraiths or Simpson Spence Young (or any Affiliate of such person through which valuations are commonly issued) and any other firm or firms of independent sale and purchase shipbrokers approved in writing by the Lender.
 
“Article 55 BRRD” means Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.
 
“Assignable Charter” means, in relation to a Ship:
 

 (a)
any time charterparty, consecutive voyage charter or contract of affreightment in respect of that Ship having a duration (or capable of having a duration) of more than 13 months (including options); and
 

 (b)
any consecutive voyage charter of any duration entered into with another member of the Group,
 
and, in each case, any guarantee of the obligations of the charterer under such charter in each case made on terms and with a charterer acceptable in all respects to the Lender.
 
“Authorisation” means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation, legalisation or registration.
 
“Availability Period” means, in respect of Tranche C, the period from and including the Effective Date to and including 1 May 2023 or such later date as the Lender and the Borrowers may agree to or, if earlier, the date the Lender’s obligation to make that Tranche available is cancelled or terminated.
 
“Available Facility” means the Commitment minus:
 

 (a)
the amount of the outstanding Loan; and
 

 (b)
in relation to any proposed Utilisation, the amount of any Advance that is due to be made on or before the proposed Utilisation Date.
 
“Bail-In Action” means the exercise of any Write-down and Conversion Powers.
 
“Bail-In Legislation” means:
 
5

 (a)
in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 BRRD, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time;
 

 (b)
in relation to any state other than such an EEA Member Country and the United Kingdom, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation; and
 

 (c)
in relation to the United Kingdom, the UK Bail-In Legislation.
 
“Balloon Instalment” has the meaning given to it in Clause 6.1 (Repayment of Loan).
 
“Borrower” means Borrower A, Borrower B or Borrower C.
 
“Break Costs” means any amount specified as such in the Reference Rate Terms.
 
“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for general business in London, New York, Copenhagen and Athens and in relation to:
 

 (a)
any date for payment or purchase of an amount relating to the Loan, any part of the Loan or Unpaid Sum; or
 

 (b)
the determination of the first day or the last day of an Interest Period for the Loan, any part of the Loan or Unpaid Sum or otherwise in relation to the determination of the length of such an Interest Period,
 
which is an Additional Business Day relating to the Loan, that part of the Loan or Unpaid Sum.
 
“Cash” shall have the meaning given to such term in the Latest Financial Statements (for the avoidance of doubt, including cash equivalents, restricted cash and term deposits).
 
“Central Bank Rate” has the meaning given to that term in the Reference Rate Terms.
 
“Central Bank Rate Adjustment” has the meaning given to that term in the Reference Rate Terms.
 
“Central Bank Rate Spread” has the meaning given to that term in the Reference Rate Terms
 
“Charter” means, in relation to a Ship, any charter relating to that Ship, or other contract for its employment, whether or not already in existence (including, without limitation, any Assignable Charter).
 
“Charter Guarantee” means any guarantee, bond, letter of credit or other instrument (whether or not already issued) supporting a Charter.
 
“Charterparty Assignment” means, in relation to a Ship, the assignment creating Security over the rights of the Borrower owing that Ship under any Assignable Charter and any Charter Guarantee in respect thereof in agreed form.
 
“Code” means the US Internal Revenue Code of 1986.
 
“Commercial Management Agreement” means the agreement entered into between the Approved Commercial Manager and Seanergy Management Corp. regarding the commercial management of a Ship, whereby the Borrower owning that Ship has acceded to by means of a deed of accession.
 
6
“Commitment” means $43,750,000 (which was $28,000,000 on the date of this Agreement and has been increased by $15,750,000 with effect on the Effective Date), to the extent not cancelled or reduced under this Agreement.
 
“Compliance Certificate” means a certificate in the form set out in Schedule 4 (Form of Compliance Certificate) or in any other form agreed between the Parent Guarantor, the Borrowers and the Lender.
 
“Compounded Reference Rate” means, in relation to any RFR Banking Day during the Interest Period of the Loan or any part of the Loan, the percentage rate per annum which is the Daily Non-Cumulative Compounded RFR Rate for that RFR Banking Day.
 
“Compounding Methodology Supplement” means, in relation to the Daily Non-Cumulative Compounded RFR Rate or the Cumulative Compounded RFR Rate, a document which:
 

 (a)
is agreed in writing by the Borrowers and the Lender;
 

 (b)
specifies a calculation methodology for that rate; and
 

 (c)
has been made available to the Borrowers and the Lender.
 
“Confidential Information” means all information relating to any Transaction Obligor, the Group, the Finance Documents or the Facility of which the Lender becomes aware in its capacity as, or for the purpose of becoming, the Lender or which is received by the Lender in relation to, or for the purpose of becoming the Lender under, the Finance Documents or the Facility from any member of the Group or any of its advisers in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes:
 

 (a)
information that:
 

 (i)
is or becomes public information other than as a direct or indirect result of any breach by the Lender of Clause 42 (Confidential Information);
 

 (ii)
is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or
 

 (iii)
is known by the Lender before the date the information is disclosed to it by any member of the Group or any of its advisers or is lawfully obtained by the Lender after that date, from a source which is, as far as the Lender is aware, unconnected with the Group and which, in either case, as far as the Lender is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and
 

 (b)
any Funding Rate.
 
“Confidentiality Undertaking” means a confidentiality undertaking in substantially the appropriate form recommended by the LMA from time to time or in any other form agreed between the Borrowers and the Lender.
 
7
“Crew Management Agreement” means the agreement entered into between a Borrower and the Approved Crew Manager regarding the crew management of a Ship.
 
“Cumulative Compounded RFR Rate” means, in relation to an Interest Period for the Loan or any part of the Loan, the percentage rate per annum determined by the Lender in accordance with the methodology set out in Schedule 9 (Cumulative Compounded RFR Rate) or in any relevant Compounding Methodology Supplement.
 
“Daily Non-Cumulative Compounded RFR Rate” means, in relation to any RFR Banking Day during an Interest Period for the Loan or any part of the Loan, the percentage rate per annum determined by the Lender in accordance with the methodology set out in Schedule 8 (Daily Non-Cumulative Compounded RFR Rate) or in any relevant Compounding Methodology Supplement.
 
“Daily Rate” means the rate specified as such in the Reference Rate Terms.
 
“Deed of Accession, Amendment and Restatement” means the deed of accession, amendment and restatement dated ______ March 2023 and made between (i) the Borrowers, (ii) the Guarantor in its capacity as guarantor, (iii) the Guarantor in its capacity as shareholder and (iv) the Lender.
 
“Deed of Release” means a deed releasing the Existing Security in a form acceptable to the Lender.
 
“Default” means an Event of Default or a Potential Event of Default.
 
“Delegate” means any delegate, agent, attorney or co-trustee appointed by the Lender.
 
“Disruption Event” means either or both of:
 

 (a)
a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties or, if applicable, any Transaction Obligor; or
 

 (b)
the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party or, if applicable, any Transaction Obligor preventing that, or any other, Party or, if applicable, any Transaction Obligor:
 

 (i)
from performing its payment obligations under the Finance Documents; or
 

 (ii)
from communicating with other Parties or, if applicable, any Transaction Obligor in accordance with the terms of the Finance Documents,
 
and which (in either such case) is not caused by, and is beyond the control of, the Party or, if applicable, any Transaction Obligor whose operations are disrupted.
 
“Document of Compliance” has the meaning given to it in the ISM Code.
 
“dollars” and “$” mean the lawful currency, for the time being, of the United States of America.
 
8
“Earnings” means, in relation to a Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to a Borrower or the Lender and which arise out of or in connection with or relate to the use or operation of that Ship, including (but not limited to):
 

 (a)
the following, save to the extent that any of them is, with the prior written consent of the Lender, pooled or shared with any other person:
 

 (i)
all freight, hire and passage moneys including, without limitation, all moneys payable under, arising out of or in connection with a Charter or a Charter Guarantee;
 

 (ii)
the proceeds of the exercise of any lien on sub-freights;
 

 (iii)
compensation payable to a Borrower or the Lender in the event of requisition of that Ship for hire or use;
 

 (iv)
remuneration for salvage and towage services;
 

 (v)
demurrage and detention moneys;
 

 (vi)
without prejudice to the generality of sub-paragraph (i) above, damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Ship;
 

 (vii)
all moneys which are at any time payable under any Insurances in relation to loss of hire;
 

 (viii)
all monies which are at any time payable to a Borrower in relation to general average contribution; and
 

 (b)
if and whenever that Ship is employed on terms whereby any moneys falling within sub-paragraphs (i) to (viii) of paragraph (a) above are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Ship.
 
“Earnings Account” means, in relation to a Borrower:
 

 (a)
an account in the name of that Borrower with the Account Bank designated “USD Current Account”;
 

 (b)
any other account in the name of that Borrower with the Account Bank which may, with the prior written consent of the Lender, be opened in the place of the account referred to in paragraph (a) above, irrespective of the number or designation of such replacement account; or
 

 (c)
any sub-account of any account referred to in paragraphs (a) or (b) above.
 
“EEA Member Country” means any member state of the European Union, Iceland, Liechtenstein and Norway.
 
“Effective Date” has the meaning given to the term “Effective Date” in the Deed of Accession, Amendment and Restatement.
 
9
“Environmental Approval” means any present or future permit, ruling, variance or other Authorisation required under any Environmental Law.
 
“Environmental Claim” means any claim by any governmental, judicial or regulatory authority or any other person which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law and, for this purpose, “claim” includes a claim for damages, compensation, contribution, injury, fines, losses and penalties or any other payment of any kind, including in relation to clean-up and removal, whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset.
 
“Environmental Incident” means:
 

 (a)
any release, emission, spill or discharge of Environmentally Sensitive Material whether within a Ship or from a Ship into any other vessel or into or upon the air, water, land or soils (including the seabed) or surface water; or
 

 (b)
any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, water, land or soils (including the seabed) or surface water from a vessel other than any Ship and which involves a collision between any Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or a Ship and/or any Transaction Obligor and/or any operator or manager of a Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or
 

 (c)
any other incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, water, land or soils (including the seabed) or surface water otherwise than from a Ship and in connection with which a Ship is actually or potentially liable to be arrested and/or where any Transaction Obligor and/or any operator or manager of a Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action, other than in accordance with an Environmental Approval.
 
“Environmental Law” means any present or future law relating to pollution or protection of human health or the environment, to conditions in the workplace, to the carriage, generation, handling, storage, use, release or spillage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material.
 
“Environmentally Sensitive Material” means and includes all contaminants, oil, oil products, toxic substances and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous.
 
“ESG Presentation” means the Parent Guarantor’s environmental, social and corporate governance included in the corporate presentation published by the Parent Guarantor on its website on September 2022.
 
“EU Bail-In Legislation Schedule” means the document described as such and published by the LMA from time to time.
 
10
“euro” and “€” means the single currency unit of the Participating Member States.
 
“EU Ship Recycling Regulation” means Regulation (EU) No 1257/2013 of the European Parliament and of the Council of 20 November 2013 on ship recycling and amending Regulation (EC) No 1013/2006 and Directive 2009/16/EC.
 
“Event of Default” means any event or circumstance specified as such in Clause 27 (Events of Default).
 
“Existing Lender” means Unicredit Bank AG.
 
“Existing Facility Agreement” means the facility agreement dated 11 September 2015 (as amended and/or supplemented and/or restated from time to time) and entered into between (i) the Borrowers as joint and several borrowers, (ii) the Parent Guarantor, as guarantor and (iii) the Existing Lender, as lender.
 
“Existing Indebtedness” means, at any date:
 

 (a)
in respect of Borrower A and Borrower B, the outstanding Financial Indebtedness of Borrower A and Borrower B on that date under the Existing Facility Agreement; and
 

 (b)
in respect of Borrower C, the outstanding Financial Indebtedness of Borrower C under a bareboat charter dated November 7, 2018 and made between Borrower C as charterer and Cargill International SA as owner;
 
“Existing Security” means any Security created to secure the Existing Indebtedness.
 
“Facility” means the term loan facility made available under this Agreement as described in Clause 2 (The Facility).
 
“Facility Office” means the office or offices through which the Lender will perform its obligations under this Agreement.
 
“FATCA” means:
 

 (a)
sections 1471 to 1474 of the Code or any associated regulations;
 

 (b)
any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or
 

 (c)
any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.
 
“FATCA Deduction” means a deduction or withholding from a payment under a Finance Document required by FATCA.
 
“FATCA Exempt Party” means a Party that is entitled to receive payments free from any FATCA Deduction.
 
11
“Finance Document” means:
 

 (a)
this Agreement;
 

 (b)
the Deed of Accession, Amendment and Restatement;
 

 (c)
each Utilisation Request;
 

 (d)
any Reference Rate Supplement;
 

 (e)
any Compounding Methodology Supplement;
 

 (f)
any Security Document;
 

 (g)
any Subordination Agreement;
 

 (h)
any other document which is executed for the purpose of establishing any priority or subordination arrangement in relation to the Secured Liabilities; or
 

 (i)
any other document designated as such by the Lender and the Borrowers.
 
“Financial Indebtedness” means any indebtedness for or in relation to:
 

 (a)
moneys borrowed;
 

 (b)
any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;
 

 (c)
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
 

 (d)
the amount of any liability in relation to any lease or hire purchase contract which would, in accordance with GAAP, be treated as a balance sheet liability;
 

 (e)
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
 

 (f)
any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition having the commercial effect of a borrowing;
 

 (g)
any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that derivative transaction, that amount) shall be taken into account);
 

 (h)
any counter-indemnity obligation in relation to a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and
 

 (i)
the amount of any liability in relation to any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above.
 
12
“Fleet Market Value” means, in relation to the Fleet Vessels, as at the date of calculation, the aggregate Market Value thereof as most recently determined.
 
“Fleet Vessels”  means the vessels from time to time owned directly or indirectly by the Parent Guarantor or which are chartered to the Parent Guarantor or its Subsidiaries by way of a time charter agreement of duration exceeding 18 months (including extensions options), financial lease, bareboat or demise charter and “Fleet Vessel” means any of them.
 
“Funding Rate” means any individual rate notified by the Lender to the Borrowers pursuant to sub-paragraph (ii) of paragraph (a) of Clause 10.3 (Cost of funds).
 
“GAAP” means generally accepted accounting principles in the US or IFRS.
 
“General Assignment” means, in relation to a Ship, the general assignment creating Security over:
 

 (a)
that Ship’s Earnings, its Insurances and any Requisition Compensation in relation to that Ship; and
 

 (b)
any Charter and any Charter Guarantee in relation to that Ship,
 
in agreed form.
 
“Group” means the Parent Guarantor and its Subsidiaries from time to time.
 
“Group Structure Chart” means the group structure chart provided by the Parent Guarantor to the Lender and in such form as agreed between the Parent Guarantor and the Lender.
 
“Holding Company” means, in relation to a person, any other person in relation to which it is a Subsidiary.
 
“IFRS” means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.
 
“Indemnified Person” has the meaning given to it in Clause 14.2 (Other indemnities).
 
“Initial Market Value” means, in relation to a Ship, the Market Value of that Ship determined pursuant to a valuation (or, if required by the Lender, two valuations) provided to the Lender under paragraph 6.1 of Part A of Schedule 2 (Conditions Precedent).
 
“Insurances” means, in relation to a Ship:
 

 (a)
all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, effected in relation to that Ship, the Earnings or otherwise in relation to that Ship whether before, on or after in respect of Ship A and Ship B, the date of this Agreement and in respect of Ship C, the Effective Date; and
 

 (b)
all rights and other assets relating to, or derived from, any of such policies, contracts or entries, including any rights to a return of premium and any rights in relation to any claim whether or not the relevant policy, contract of insurance or entry has expired on or after in respect of Ship A and Ship B, the date of this Agreement and in respect of Ship C, the Effective Date.
 
13
“Interest Payment” means the aggregate amount of interest that is, or is scheduled to become, payable under any Finance Document.
 
“Interest Payment Date” has the meaning given to it in Clause 8.2 (Payment of interest).
 
“Interest Period” means, in relation to the Loan or any part of the Loan, each period determined in accordance with Clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 (Default interest).
 
“Inventory of Hazardous Materials” means, in relation to a Ship, an inventory certificate or statement of compliance (as applicable) issued by the relevant classification society or shipyard authority which is supplemented by a list of any and all materials known to be potentially hazardous utilised in the construction of, or otherwise installed on, that Ship, pursuant to the requirements of the EU Ship Recycling Regulation and/or the Safe and Environmentally Sound Recycling of Ships, 2009.
 
“ISM Code” means the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (including the guidelines on its implementation), adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time.
 
“ISPS Code” means the International Ship and Port Facility Security (ISPS) Code as adopted by the International Maritime Organization’s (IMO) Diplomatic Conference of December 2002, as the same may be amended or supplemented from time to time.
 
“ISSC” means an International Ship Security Certificate issued under the ISPS Code.
 
“Latest Financial Statements” means, as at the date of calculation or, as the case may be, in respect of an Accounting Period, the annual audited or (as the case may be) quarterly unaudited (in respect of the Accounting Period of each financial year) consolidated financial statements the Parent Guarantor is obliged to deliver to the Lender pursuant to Clause 20.2 (Financial statements).
 
“Lender” means:
 

 (a)
the Original Lender; and
 

 (b)
any bank, financial institution, trust, fund or other entity which has become the Lender in accordance with Clause 28 (Changes to the Lender),
 
which in each case has not ceased to be a Party in accordance with this Agreement.
 
“Leverage Ratio” means, as at the date of calculation, the ratio (expressed as a percentage) of Net Debt to Market Value Adjusted Total Assets less Cash.
 
“LMA” means the Loan Market Association or any successor organisation.
 
“Loan” means the loan to be made available under the Facility or the aggregate principal amount outstanding for the time being of the borrowings under the Facility and a “part of the Loan” means an Advance, a Tranche, a part of a Tranche or any other part of the Loan as the context may require.
 
“Lookback Period” means the number of days specified as such in the Reference Rate Terms.
 
14
“Major Casualty” means, in relation to a Ship, any casualty to that Ship in relation to which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $1,000,000 or the equivalent in any other currency.
 
“Management Agreement” means a Technical Management Agreement, a Commercial Management Agreement or a Crew Management Agreement.
 
“Manager’s Undertaking” means, in relation to a Ship, the letter of undertaking from each of its Approved Manager (other than the Approved Crew Manager), subordinating the rights of that Approved Manager (other than the Approved Crew Manager) against that Ship and the relevant Borrower to the rights of the Lender and including (inter alia) a first priority assignment of that Approved Manager’s (other than the Approved Crew Manager’s) rights, title and interest in the Insurances of that Ship in agreed form.
 
“Mandatory Cost” has the meaning given to it in Clause 14.3 (Mandatory Cost).
 
“Margin” means:
 

 (a)
subject to paragraph (b) below:
 

 (i)
in respect of each of Tranche A and Trance B, 2.50 per annum; and
 

 (ii)
in respect of Tranche C, 2.65 per annum; or
 

 (b)
such other rate per annum as may be determined to be the Margin from time to time in accordance with the adjustment provisions of Clause 8.5 (Sustainability Margin adjustment) and Schedule 10 (Sustainability Margin Adjustment Schedule).
 
“Market Disruption Rate” means the rate (if any) specified as such in the Reference Rate Terms.
 
“Market Value” means, in relation to a Ship or any other vessel, at any date, an amount determined by the Lender as being an amount equal to the market value of that Ship or vessel shown by a valuation prepared:
 

 (a)
as at a date not more than 30 days previously (and in relation to the valuation for the purposes of determining the Initial Market Value, 10 days previously);
 

 (b)
by an Approved Valuer selected and appointed by the Lender;
 

 (c)
with or without physical inspection of that Ship or vessel (as the Lender may require); and
 

 (d)
on the basis of a sale for prompt delivery for a price payable in full in cash on delivery on normal arm’s length commercial terms as between a willing seller and a willing buyer on an “as is where is” basis, free of any Charter,
 
Provided that the Borrowers may request a second valuation, such second valuation to be provided on the same terms as above and the Market Value will be the arithmetic mean of the two valuations. If the market value of that Ship as evidenced in one of the two valuations provided as per above exceeds by more than 10 per cent. the market value of that Ship as evidenced in the other valuation to be provided under paragraph (a) above (such difference to be determined with reference to the lowest valuation), then a third valuation shall be obtained by an Approved Valuer (selected and appointed by the Lender) prepared in accordance with the above requirements referred under paragraph (a) above and the Market Value of that Ship shall be determined as the arithmetic mean of all three valuations.
 
15
“Market Value Adjusted Other Assets” means, as at the date of calculation, the Fleet Market Value plus the book value (less depreciation and amortization computed in accordance with the Latest Financial Statements on a consolidated basis) of all non-current assets of the Group (which, without limitation, shall exclude all Fleet Vessels), as stated in the Latest Financial Statements.
 
“Market Value Adjusted Total Assets” means, as at the date of calculation, the aggregate of the Market Value Adjusted Other Assets and the Total Current Assets.
 
“Material Adverse Effect” means a material adverse effect on:
 

 (a)
the business, operations, property, condition (financial or otherwise) or prospects of any Transaction Obligor; or
 

 (b)
the ability of any Transaction Obligor to perform its obligations under any Finance Document; or
 

 (c)
the validity or enforceability of, or the effectiveness or ranking of any Security granted or intended to be granted pursuant to any of, the Finance Documents or the rights or remedies of the Lender under any of the Finance Documents.
 
“Month” means, in relation to an Interest Period (or any other period for the accrual of commission or fees), a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, subject to adjustment in accordance with the rules specified as Business Day Conventions in the Reference Rate Terms.
 
“Mortgage” means, in relation to a Ship, a first preferred Marshall Islands ship mortgage on that Ship in agreed form or any replacement first preferred or first priority ship mortgage on that Ship under the laws of an Approved Flag in agreed form.
 
“Mortgage Addendum” means, in relation to the Mortgage in respect of each of Ship A and Ship B, an addendum to that Mortgage in agreed form and, in the plural means, both of them.
 
“Net Debt” means, as at the date of calculation, the Total Debt less Cash, in each case as stated in the Latest Financial Statements.
 
“Notes” means, as at the date of calculation, the aggregate outstanding amount of certain notes or bonds issued or to be issued by the Parent Guarantor to certain lenders/holders.
 
“Obligor” means a Borrower or the Parent Guarantor.
 
“Original Financial Statements” means:
 

 (a)
in relation to the Parent Guarantor:
 

 (i)
the audited consolidated financial statements of the Group for its financial year ended 31 December 2021; and
 
16

 (ii)
the unaudited consolidated financial statements of the Group for its financial quarter year ended 30 June 2022;
 

 (b)
in relation to each of Borrower A and Borrower B:
 

 (i)
its unaudited financial statements for its financial year ended December 2021; and
 

 (ii)
its unaudited consolidated financial statements for its financial quarter year ended 30 June 2022; and
 

 (c)
in relation to Borrower C, its unaudited financial statements for its financial year ended December 2022.
 
“Original Jurisdiction” means, in relation to an Obligor, the jurisdiction under whose laws that Obligor is incorporated in respect of Borrower A, Borrower B and the Parent Guarantor, as at the date of this Agreement and, in respect of Borrower C, as at the Effective Date.
 
“Overseas Regulations” means the Overseas Companies Regulations 2009 (SI 2009/1801).
 
“Participating Member State” means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
 
“Party” means a party to this Agreement.
 
“Perfection Requirements” means the making or procuring of filings, stampings, registrations, notarisations, endorsements, translations and/or notifications of any Finance Document (and/or any Security created under it) necessary for the validity, enforceability (as against the relevant Obligor or any relevant third party) and/or perfection of that Finance Document.
 
“Permitted Charter” means, in relation to a Ship, a Charter:
 

 (a)
which is a time, voyage or consecutive voyage charter;
 

 (b)
the duration of which does not exceed and is not capable of exceeding, by virtue of any optional extensions, 13 months, unless it is an Assignable Charter that has been approved by the Lender and has been assigned to the Lender pursuant to a Charterparty Assignment;
 

 (c)
which is entered into on bona fide arm’s length terms at the time at which that Ship is fixed; and
 

 (d)
in relation to which not more than two months’ hire is payable in advance,
 
and any other Charter which is approved in writing by the Lender.
 
“Permitted Financial Indebtedness” means:
 

 (a)
any Financial Indebtedness incurred under the Finance Documents;
 

 (b)
until the Utilisation Date of each Tranche, the relevant Existing Indebtedness being financed by that Tranche;
 
17

 (c)
any Financial Indebtedness that is subordinated to all Financial Indebtedness incurred under the Finance Documents pursuant to a Subordination Agreement or otherwise and which is, in the case of any such Financial Indebtedness of a Borrower, the subject of Subordinated Debt Security; and
 

 (d)
any Financial Indebtedness incurred or created, in a Borrower’s or each Approved Manager’s ordinary course of business and in respect of the Parent Guarantor, in the ordinary course of its business of holding single purpose shipowning Subsidiaries, assisting such Subsidiaries with acquiring and financing their vessels and providing guarantees to secure the liabilities of such Subsidiaries (including any Notes issued by the Parent Guarantor or any of its Subsidiaries other than the Borrowers).
 
“Permitted Security” means:
 

 (a)
Security created by the Finance Documents;
 

 (b)
until the Utilisation Date of each Tranche, the Existing Security relating to the Ship being financed under that Tranche;
 

 (c)
liens for unpaid master’s and crew’s wages in accordance with first class ship ownership and management practice and not being enforced through arrest;
 

 (d)
liens for salvage;
 

 (e)
liens for master’s disbursements incurred in the ordinary course of trading in accordance with first class ship ownership and management practice and not being enforced through arrest; and
 

 (f)
any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of any Ship:
 

 (i)
not as a result of any default or omission by any Borrower;
 

 (ii)
not being enforced through arrest; and
 

 (iii)
subject, in the case of liens for repair or maintenance, to Clause 24.16 (Restrictions on chartering, appointment of managers etc.),
 
provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested in good faith by appropriate steps and for the payment of which adequate reserves are held and provided further that such proceedings do not give rise to a material risk of the relevant Ship or any interest in it being seized, sold, forfeited or lost).
 
“Poseidon Principles” means the financial industry framework for assessing and disclosing the climate alignment of ship finance portfolios published in June 2019 as the same may be amended or replaced to reflect changes in applicable law or regulation or the introduction of or changes to mandatory requirements of the International Maritime Organisation from time to time.
 
“Potential Event of Default” means any event or circumstance specified in Clause 27 (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.
 
18
“Prohibited Person” means any person (whether designated by name or by reason of being included in a class of persons):
 

 (a)
listed on, or 50% or more owned in aggregate or controlled by a person listed on, or acting on behalf of a person listed on, any Sanctions List;
 

 (b)
resident, located or having a place of business in, incorporated under the laws of, or owned or (directly or indirectly) controlled by, or acting on behalf of, a person resident, located or having a place of business in or organised under the laws of a country or territory that is the target of country-wide or territory-wide Sanctions; or
 

 (c)
otherwise a target of Sanctions (including a person with whom a US person or other national under the jurisdiction of a Sanctions Authority would be prohibited or restricted by law from engaging in trade, business or other activities).
 
“Receiver” means a receiver or receiver and manager or administrative receiver of the whole or any part of the Security Assets.
 
“Reference Rate Supplement” means a document which:
 

 (a)
is agreed in writing by the Borrowers and the Lender;
 

 (b)
specifies the relevant terms which are expressed in this Agreement to be determined by reference to Reference Rate Terms; and
 

 (c)
has been made available to the Borrowers and the Lender.
 
“Reference Rate Terms” means the terms set out in Schedule 9 (Cumulative Compounded RFR Rate) or in any Reference Rate Supplement.
 
“Related Fund” in relation to a fund (the “first fund”), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.
 
“Relevant Jurisdiction” means, in relation to a Transaction Obligor:
 

 (a)
Its Original Jurisdiction;
 

 (b)
any jurisdiction where any asset subject to, or intended to be subject to, any of the Transaction Security created, or intended to be created, by it is situated;
 

 (c)
any jurisdiction where it conducts its business; and
 

 (d)
the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.
 
“Relevant Market” means the market specified as such in the Reference Rate Terms.
 
19
“Repayment Date” means each date on which a Repayment Instalment is required to be paid under Clause 6.1 (Repayment of Loan).
 
“Repayment Instalment” has the meaning given to it in Clause 6.1 (Repayment of Loan).
 
“Repayment Schedule” means each of the repayment schedules in Schedule 6 (Repayment Schedules).
 
“Repeating Representation” means each of the representations set out in Clause 19 (Representations) except Clause 19.10 (Insolvency), Clause 19.11 (No filing or stamp taxes) and Clause 19.12 (Deduction of Tax) and any representation of any Transaction Obligor made in any other Finance Document that is expressed to be a “Repeating Representation” or is otherwise expressed to be repeated.
 
“Reporting Day” means the day (if any) specified as such in the Reference Rate Terms.
 
“Reporting Time” means the relevant time (if any) specified as such in the Reference Rate Terms.
 
“Representative” means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.
 
“Requisition” means, in relation to a Ship:
 

 (a)
any expropriation, confiscation, requisition (excluding a requisition for hire or use which does not involve a requisition for title) or acquisition of that Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected (whether de jure or de facto) by any government or official authority or by any person or persons claiming to be or to represent a government or official authority; and
 

 (b)
any capture or seizure of that Ship (including any hijacking or theft) by any person whatsoever.
 
“Requisition Compensation” includes all compensation or other moneys payable to a Borrower by reason of any Requisition or any arrest or detention of a Ship in the exercise or purported exercise of any lien or claim.
 
“Resolution Authority” means any body which has authority to exercise any Write-down and Conversion Powers.
 
“Retention Account” means, in relation to a Borrower:
 

 (a)
an account in the name of that Borrower with the Account Bank designated “USD Cash Collateral Account”;
 

 (b)
any other account in the name of that Borrower with the Account Bank which may, with the prior written consent of the Lender, be opened in the place of the account referred to in paragraph (a) above, irrespective of the number or designation of such replacement account; or
 

 (c)
any sub-account of any account referred to in paragraphs (a) or (b) above.
 
20
“RFR” means the rate specified as such in the Reference Rate Terms.
 
“RFR Banking Day” means any day specified as such in the Reference Rate Terms.
 
“Safety Management Certificate” has the meaning given to it in the ISM Code.
 
“Safety Management System” has the meaning given to it in the ISM Code.
 
“Sanctions” means the economic or financial sanctions laws, orders and/or regulations, trade embargoes, prohibitions, decisive executive orders or restrictive measures implemented, adapted, improved, administered, enacted or enforced by any Sanctions Authority (whether or not any Transaction Obligor or any Affiliate of any Transaction Obligor is legally bound to comply with such laws, regulations, embargoes or measures).
 
“Sanctions Authority” means any of:
 

 (a)
the United States of America;
 

 (b)
the United Nations;
 

 (c)
the European Union;
 

 (d)
any member state of the European Economic Area;
 

 (e)
the United Kingdom; or
 

 (f)
any country which any Obligor is registered,
 
and includes any government entity of any of the above, including, without limitation, the Office of Foreign Assets Control of the US Department of Treasury (OFAC), the United States Department of State, the United States Department of Commerce or any other agency of the United States Government, the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.
 
“Sanctions List” means:
 

 (a)
the “Specially Designated Nationals and Blocked Persons” list maintained by OFAC;
 

 (b)
the Consolidated List of persons, groups and entities subject to the European Union financial sanctions;
 

 (c)
in the case of His Majesty’s Treasury of the United Kingdom, the Consolidated List of Financial Sanctions Targets and the List of Persons subject to Restrictive Measures in View of Russia’s Actions Destabilising the situation in Ukraine; or
 

 (d)
any similar list maintained by, or public announcement of Sanctions designation made by, any other Sanctions Authority.
 
“Secured Liabilities” means all present and future obligations and liabilities, (whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever) of each Transaction Obligor to the Lender under or in connection with each Finance Document.
 
“Security” means a mortgage, pledge, lien, charge, assignment, hypothecation or security interest or any other agreement or arrangement having the effect of conferring security.
 
21
“Security Assets” means all of the assets of the Transaction Obligors which from time to time are, or are expressed to be, the subject of the Transaction Security.
 
“Security Cover Ratio” means at any relevant time during the Security Period, the ratio (expressed as a percentage) of the aggregate Market Value of the Ships then subject to a Mortgage plus (the Minimum Liquidity Amount plus the net realisable value of any additional Security previously provided under Clause 25 (Security Cover) to the aggregate of the Loan, as determined by the Lender pursuant to Clause 25.1 (Minimum required security cover)).
 
“Security Cover Testing Date” means, in relation to a Ship, 31 March, 30 June, 30 September and 31 December in each calendar year during the Security Period.
 
“Security Document” means:
 

 (a)
any Shares Security;
 

 (b)
any Mortgage;
 

 (c)
any General Assignment;
 

 (d)
any Charterparty Assignment;
 

 (e)
any Account Security;
 

 (f)
any Manager’s Undertaking;
 

 (g)
any Subordinated Debt Security;
 

 (h)
any Supplemental Security Document;
 

 (i)
any other document (whether or not it creates Security) which is executed as security for the Secured Liabilities; or
 

 (j)
any other document designated as such by the Lender and the Borrowers.
 
“Security Period” means the period starting on the date of this Agreement and ending on the date on which the Lender is satisfied that there is no outstanding Commitment in force and that the Secured Liabilities have been irrevocably and unconditionally paid and discharged in full.
 
“Security Property” means:
 

 (a)
the Transaction Security expressed to be granted in favour of the Lender and all proceeds of that Transaction Security;
 

 (b)
all obligations expressed to be undertaken by a Transaction Obligor to pay amounts in relation to the Secured Liabilities to the Lender and secured by the Transaction Security together with all representations and warranties expressed to be given by a Transaction Obligor or any other person in favour of the Lender; and
 

 (c)
the Lender’s interest in any turnover trust created under the Finance Documents.
 
“Shares Security” means, in relation to a Borrower, a document creating Security over the share capital in that Borrower in agreed form.
 
22
“Ship” means Ship A, Ship B or Ship C.
 
“Ship A” means the 179,701 dwt dry bulk carrier vessel “FELLOWSHIP” built in 2010 having IMO no. 9522099 registered in the name of Borrower A under an Approved Flag (which at the date of this Agreement is the Marshall Islands flag) and everything now or in the future belonging to her on board and ashore.
 
“Ship B” means the 170,024 dwt dry bulk carrier vessel “PREMIERSHIP” built in 2010 having IMO no. 9398747 registered in the name of Borrower B at the date of this Agreement under the flag of the Isle of Man and to be registered in the name of Borrower B on the Utilization Date of Tranche B under the Marshall Islands flag and everything now or in the future belonging to her on board and ashore.
 
“Ship C” means the 179,238 dwt dry bulk carrier vessel “CHAMPIONSHIP” built in 2011 having IMO no. 9403516 registered at the Effective Date in the name of Borrower C under an Approved Flag (which at the date of the Effective Date is the Marshall Islands flag) and everything now or in the future belonging to her on board and ashore.
 
“Specified Time” means a day or time determined in accordance with Schedule 5 (Timetables).
 
“Statement of Compliance” means a Statement of Compliance related to fuel oil consumption pursuant to regulations 6.6 and 6.7 of Annex VI.
 
“Subordinated Creditor” means the Parent Guarantor.
 
“Subordinated Debt Security” means a Security over Subordinated Liabilities entered into or to be entered into by a Subordinated Creditor in favour of the Lender in an agreed form.
 
“Subordinated Finance Document” means:
 

 (a)
a Subordinated Loan Agreement; and
 

 (b)
any other document relating to or evidencing Subordinated Liabilities.
 
“Subordinated Liabilities” means all indebtedness owed or expressed to be owed by the Borrowers to a Subordinated Creditor whether under the Subordinated Finance Documents or otherwise.
 
“Subordinated Loan Agreement” means any loan agreement made between (a) a Borrower and (b) a Subordinated Creditor.
 
“Subordination Agreement” means a subordination agreement entered into or to be entered into by each Subordinated Creditor and the Lender in agreed form.
 
“Subsidiary” means a subsidiary within the meaning of section 1159 of the Companies Act 2006.
 
“Sustainability Margin Adjustment Effective Date” has the meaning given to such term in Schedule 10 (Sustainability Margin Adjustment Schedule).
 
“Sustainability Compliance Certificate” means a certificate in the form set out in Schedule 11 (Form of Sustainability Compliance Certificate) or in any other form agreed between the Borrowers and the Lender.
 
23
“Supplemental Charterparty Assignment” means, in relation to Ship A and Ship B, a document creating second priority Security over the rights of the relevant Borrower under the Initial Charter in respect of that Ship, in agreed form.
 
“Supplemental General Assignment” means, in relation to Ship A and Ship B, a document creating second priority Security over (inter alia) that Ship’s Earnings, its Insurances and any Requisition Compensation in relation to that Ship in agreed form.
 
“Supplemental Security Document” means:
 

 (a)
the Mortgage Addenda;
 

 (b)
any Supplemental Account Security;
 

 (c)
any Supplemental General Assignment;
 

 (d)
any Supplemental Charterparty Assignment; and
 

 (e)
any Supplemental Shares Security;
 
“Supplemental Shares Security” means, in relation to Borrower A and Borrower B, a document creating second priority Security over the issued shares of that Borrower in agreed form.
 
“Tax” means any tax, 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 Credit” has the meaning given to it in Clause 12.1 (Definitions).
 
“Tax Deduction” has the meaning given to it in Clause 12.1 (Definitions).
 
“Tax Payment” has the meaning given to it in Clause 12.1 (Definitions).
 
“Technical Management Agreement” means the agreement entered into between a Borrower and the Approved Technical Manager regarding the technical management of a Ship.
 
“Termination Date” means:
 

 (a)
in relation to each of Tranche A and Trance B, the earlier of:
 

 (i)
the date falling on the fifth anniversary of the Utilisation Date of that Tranche; and
 

 (ii)
15 October 2027;
 

 (b)
in relation to Tranche C, the earlier of:
 

 (i)
the date falling on the fifth anniversary of the Utilisation Date of Tranche C; and
 

 (ii)
1 May 2028.
 
“Third Parties Act” has the meaning given to it in Clause 1.5 (Third party rights).
 
24
“Total Current Assets” means, the aggregate of the cash and marketable securities, trade and other receivables from persons (other than persons being members of the Group) plus inventories, prepaid expenses, voyage expenses and other current assets realisable within one year such amount to be determined on a consolidated basis less any discounts, allowances and activated goodwill, in each case as shown in the Latest Financial Statements.
 
“Total Debt” means, as at the date of calculation, the current portion of long-term debt, net of deferred finance costs and the long-term debt, net of current portion and deferred finance costs of the Group as shown in the Latest Financial Statements and any current Notes.
 
“Total Loss” means, in relation to a Ship:
 

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

 (b)
any Requisition of that Ship unless that Ship is returned to the full control of the relevant Borrower within 30 days of such Requisition.
 
“Total Loss Date” means, in relation to the Total Loss of a Ship:
 

 (a)
in the case of an actual loss of that Ship, the date on which it occurred or, if that is unknown, the date when that Ship was last heard of;
 

 (b)
in the case of a constructive, compromised, agreed or arranged total loss of that Ship, the earlier of:
 

 (i)
the date on which a notice of abandonment is given (or deemed or agreed to be given) to the insurers; and
 

 (ii)
the date of any compromise, arrangement or agreement made by or on behalf of the relevant Borrower with that Ship’s insurers in which the insurers agree to treat that Ship as a total loss; and
 

 (c)
in the case of any other type of Total Loss, the date (or the most likely date) on which it appears to the Lender that the event constituting the total loss occurred.
 
“Tranche” means Tranche A, Tranche B or Tranche C.
 
“Tranche A” means, in relation to Ship A, that part of the Loan made or to be made available to the Borrowers for the purpose of refinancing part of the Existing Indebtedness secured over Ship A in a principal amount not exceeding that specified in Clause 5.3 (Currency and amount) or, as the context may require, the amount outstanding thereunder at any relevant time.
 
“Tranche B” means, in relation to Ship B, that part of the Loan made or to be made available to the Borrowers for the purpose of refinancing part of the Existing Indebtedness secured over Ship B in a principal amount not exceeding that specified in Clause 5.3 (Currency and amount) or, as the context may require, the amount outstanding thereunder at any relevant time.
 
“Tranche C” means, in relation to Ship C, that part of the Loan made or to be made available to the Borrowers for the purpose of financing the acquisition cost of Ship C in a principal amount not exceeding that specified in Clause 5.3 (Currency and amount) or, as the context may require, the amount outstanding thereunder at any relevant time.
 
“Transaction Document” means:
 
25

 (a)
a Finance Document;
 

 (b)
a Subordinated Finance Document;
 

 (c)
any Charter and any Charter Guarantee relating thereto; or
 

 (d)
any other document designated as such by the Lender and a Borrower.
 
“Transaction Obligor” means an Obligor, any Approved Manager who is a member of the Group or any other member of the Group who executes a Transaction Document.
 
“Transaction Security” means the Security created or evidenced or expressed to be created or evidenced under the Security Documents.
 
“UK Bail-In Legislation” means Part 1 of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutes or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings).
 
“UK Establishment” means a UK establishment as defined in the Overseas Regulations.
 
“Unpaid Sum” means any sum due and payable but unpaid by a Transaction Obligor under the Finance Documents.
 
“US” means the United States of America.
 
“US Tax Obligor” means:
 

 (a)
a person which is resident for tax purposes in the US; or
 

 (b)
a person some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.
 
“Utilisation” means a utilisation of the Facility.
 
“Utilisation Date” means the date of a Utilisation, being the date on which the relevant Advance is to be made.
 
“Utilisation Request” means a notice substantially in the form set out in Schedule 3 (Utilisation Request).
 
“VAT” means:
 

 (a)
any value added tax imposed by the Value Added Tax Act 1994;
 

 (b)
any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and
 

 (c)
any other tax of a similar nature, whether imposed in the United Kingdom or a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) or (b) above, or imposed elsewhere.
 
“Write-down and Conversion Powers” means:
 
26

 (a)
in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule;
 

 (b)
in relation to any other applicable Bail-In Legislation other than the UK Bail-In Legislation:
 

 (i)
any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and
 

 (ii)
any similar or analogous powers under that Bail-In Legislation; and
 

 (c)
in relation to the UK Bail-In Legislation, any powers under that UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail-In Legislation that are related to or ancillary to any of those powers.
 
1.2
Construction
 
(a)
Unless a contrary indication appears, a reference in this Agreement to:
 

 (i)
the “Account Bank”, the “Lender”, any “Obligor”, any “Party”, any “Transaction Obligor” or any other person shall be construed so as to include its successors in title and permitted assigns;
 

 (ii)
“applicable Sanctions” includes (but is not limited to):
 

 (i)
any Sanctions applicable to any of the Obligors or any other member of the Group or any of their Affiliates, directors, officers or employees; or
 

 (ii)
any Sanctions which would otherwise apply either directly or indirectly to the performance of any of the Parties’ rights and obligations under this Agreement.
 

 (iii)
“assets” includes present and future properties, revenues and rights of every description;
 

 (iv)
a liability which is “contingent” means a liability which is not certain to arise and/or the amount of which remains unascertained;
 
27

 (v)
“document” includes a deed and also a letter, fax, email or telex;
 

 (vi)
“expense” means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable Tax including VAT;
 

 (vii)
the Lender’s “cost of funds” in relation to its participation in the Loan or any part of the Loan is a reference to the average cost (determined either on an actual or a notional basis) which the Lender would incur if it were to fund, from whatever source(s) it may reasonably select, an amount equal to the amount of that participation in the Loan or that part of the Loan for a period equal in length to the Interest Period of the Loan or that part of the Loan;
 

 (viii)
a “Finance Document”, a “Security Document” or “Transaction Document” or any other agreement or instrument is a reference to that Finance Document, Security Document or Transaction Document or other agreement or instrument as amended, replaced, novated, supplemented, extended or restated;
 

 (ix)
“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;
 

 (x)
“law” includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;
 

 (xi)
“proceedings” means, in relation to any enforcement provision of a Finance Document, proceedings of any kind, including an application for a provisional or protective measure;
 

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

 (xiii)
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;
 

 (xiv)
a reference to a “Ship”, its name, its flag and, if applicable, its port of registry shall include any replacement name, flag and, if applicable, replacement port of registry, in each case, as may be approved in writing from time to time by the Lender;
 

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

 (xvi)
a time of day is a reference to London time;
 

 (xvii)
any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of a jurisdiction other than England, be deemed to include that which most nearly approximates in that jurisdiction to the English legal term;
 

 (xviii)
words denoting the singular number shall include the plural and vice versa; and
 
28

 (xix)
“including” and “in particular” (and other similar expressions) shall be construed as not limiting any general words or expressions in connection with which they are used.
 
(b)
Section, Clause and Schedule headings are for ease of reference only and are not to be used for the purposes of construction or interpretation of the Finance Documents.
 
(c)
Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under, or in connection with, any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.
 
(d)
A reference in this Agreement to a page or screen of an information service displaying a rate shall include:
 

 (i)
any replacement page of that information service which displays that rate; and
 

 (ii)
the appropriate page of such other information service which displays that rate from time to time in place of that information service,
 
and, if such page or service ceases to be available, shall include any other page or service displaying that rate specified by the Lender after consultation with the Borrowers.
 
(e)
A reference in this Agreement to a Central Bank Rate shall include any successor rate to, or replacement rate for, that rate.
 
(f)
Any Reference Rate Supplement overrides anything in:
 

 (i)
Schedule 7 (Reference Rate Terms); or
 

 (ii)
any earlier Reference Rate Supplement.
 
(g)
A Compounding Methodology Supplement relating to the Daily Non-Cumulative Compounded RFR Rate or the Cumulative Compounded RFR Rate overrides anything relating to that rate in:
 

 (i)
Schedule 8 (Daily Non-Cumulative Compounded RFR Rate) or Schedule 9 (Cumulative Compounded RFR Rate), as the case may be; or
 

 (ii)
any earlier Compounding Methodology Supplement.
 
(h)
A Potential Event of Default is “continuing” if it has not been remedied or waived and an Event of Default is “continuing” if it has not been waived.
 
1.3
Construction of insurance terms
 
In this Agreement:
 
“approved” means, for the purposes of Clause 23 (Insurance Undertakings), approved in writing by the Lender.
 
“excess risks” means, in respect of a Ship, the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of that Ship in consequence of its insured value being less than the value at which that Ship is assessed for the purpose of such claims.
 
29
“obligatory insurances” means all insurances effected, or which any Borrower is obliged to effect, under Clause 23 (Insurance Undertakings) or any other provision of this Agreement or of another Finance Document.
 
“policy” includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms.
 
“protection and indemnity risks” means the usual risks covered by a protection and indemnity association which is a member of the International Group of Protection and Indemnity Associations, including pollution risks and 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 incorporation in them of clause 6 of the International Hull Clauses (1/11/02) (1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/10/83) (1/11/95) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision.
 
“war risks” includes the risk of mines and all risks excluded by clauses 29, 30 or 31 of the International Hull Clauses (1/11/02), clauses 29 or 30 of the International Hull Clauses (1/11/03), clauses 24, 25 or 26 of the Institute Time Clauses (Hulls) (1/11/95) or clauses 23, 24 or 25 of the Institute Time Clauses (Hulls) (1/10/83) or any equivalent provision.
 
1.4
Agreed forms of Finance Documents
 
References in Clause 1.1 (Definitions) to any Finance Document being in “agreed form” are to that Finance Document:
 
(a)
in a form attached to a certificate dated the same date as this Agreement (and signed by each Borrower and the Lender); or
 
(b)
in any other form agreed in writing between each Borrower and the Lender.
 
1.5
Third party rights
 
(a)
Unless expressly provided to the contrary in a Finance Document, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the “Third Parties Act”) to enforce or to enjoy the benefit of any term of this Agreement.
 
(b)
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.
 
(c)
Any Affiliate, Receiver or Delegate or any other person described in paragraph (f) of Clause 14.2 (Other indemnities) may, subject to this Clause 1.5 (Third party rights) and the Third Parties Act, rely on any Clause of this Agreement which expressly confers rights on it.

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SECTION 2
 
THE FACILITY
 
2.
THE FACILITY
 
2.1
The Facility
 
Subject to the terms of this Agreement, the Lender makes available to the Borrowers a dollar term loan facility in three Tranches in an aggregate amount not exceeding the Commitment.
 
2.2
Borrowers’ Agent
 
(a)
Each Borrower by its execution of this Agreement irrevocably appoints the Parent Guarantor to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises:
 

 (i)
the Parent Guarantor on its behalf to supply all information concerning itself contemplated by this Agreement to the Lender and to give all notices and instructions (including Utilisation Requests), to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by any Borrower notwithstanding that they may affect the Borrowers, without further reference to or the consent of that Borrower; and
 

 (ii)
the Lender to give any notice, demand or other communication to that Borrower pursuant to the Finance Documents to the Parent Guarantor,
 
and in each case the Borrowers shall be bound as though the Borrowers themselves had given the notices and instructions (including, without limitation, any Utilisation Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.
 
(b)
Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Parent Guarantor or given to the Parent Guarantor under any Finance Document on behalf of a Borrower or in connection with any Finance Document (whether or not known to any Borrower) shall be binding for all purposes on that Borrower as if that Borrower had expressly made, given or concurred with it. In the event of any conflict between any notices or other communications of the Parent Guarantor and any Borrower, those of the Parent Guarantor shall prevail.
 
3.
PURPOSE
 
3.1
Purpose
 
Each Borrower shall apply all amounts borrowed by it under the Facility only for the purpose stated in the preamble (Background) to this Agreement.
 
3.2
Monitoring
 
The Lender is not bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
 
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4.
CONDITIONS OF UTILISATION
 
4.1
Initial conditions precedent
 
The Borrowers may not deliver a Utilisation Request unless the Lender has received all of the documents and other evidence listed in Part A of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Lender.
 
4.2
Further conditions precedent
 
The Lender will only be obliged to comply with Clause 5.4 (Advances) if:
 
(a)
on the date of each Utilisation Request and on each proposed Utilisation Date and before an Advance is made available:
 

 (i)
no Default which is continuing has occurred or would result from the proposed Advance;
 

 (ii)
the Repeating Representations (and on the first Utilisation date all the representations set out in Clause 19 (Representations)) to be made by each Obligor are true;
 

 (iii)
no event described in paragraph (a) of Clause 7.2 (Change of control) has occurred;
 

 (iv)
in the case of an Advance under a Tranche, the Ship in respect of which such Advance is to be made has neither been sold nor become a Total Loss;
 

 (v)
there has been no material adverse change in the assets, business or financial condition of or the assets, business or consolidated financial condition of the Group, since 2 March 2023 (being the date of acceptance by the Borrowers of the Lender’s initial offer letter);
 

 (vi)
no other prepayment or cancellation event under Clause 7 (Prepayment and Cancellation) has occurred; and
 
(b)
in the case of the Advance under a Tranche, the Lender has received on or before the relevant Utilisation Date, or is satisfied it will receive when the Advance is made available, all of the documents and other evidence listed in Part B of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Lender.
 
4.3
Notification of satisfaction of conditions precedent
 
The Lender shall notify the Borrowers promptly upon being satisfied as to the satisfaction of the conditions precedent referred to in Clause 4.1 (Initial conditions precedent) and Clause 4.2 (Further conditions precedent).
 
4.4
Waiver of conditions precedent
 
If the Lender, at its discretion, permits an Advance to be borrowed before any of the conditions precedent referred to in Clause 4.1 (Initial conditions precedent) or Clause 4.2 (Further conditions precedent) has been satisfied, the Borrowers shall ensure that that condition is satisfied within five Business Days after the relevant Utilisation Date or such later date as the Lender may agree in writing with the Borrowers.
 
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SECTION 3
 
UTILISATION
 
5.
UTILISATION
 
5.1
Delivery of a Utilisation Request
 
(a)
The Borrowers may utilise a Tranche by delivery to the Lender of a duly completed Utilisation Request not later than the Specified Time.
 
(b)
The Borrowers may not deliver more than one Utilisation Request under a Tranche.
 
5.2
Completion of a Utilisation Request
 
(a)
Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:
 

 (i)
the proposed Utilisation Date is a Business Day within the relevant Availability Period;
 

 (ii)
the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount);
 

 (iii)
all applicable deductible items have been completed; and
 

 (iv)
the proposed Interest Period complies with Clause 9 (Interest Periods).
 
(b)
Only one Advance may be requested in each Utilisation Request.
 
5.3
Currency and amount
 
(a)
The currency specified in a Utilisation Request must be dollars.
 
(b)
 

 (i)
The amount of the Advance under Tranche A is $14,000,000 and was utilised on 12 October 2022;
 

 (ii)
The amount of the Advance under Tranche B is $14,000,000 and was utilised on 12 October 2022; and
 

 (iii)
The amount of the proposed Advance under Tranche C may not exceed the lesser of (i) $15,750,000 and (ii) an amount which equals 60 per cent of the Initial Market Value of Ship C.
 
(c)
The amount of the proposed Advance must be an amount which is not more than the Available Facility.
 
5.4
Advances
 
If the conditions set out in this Agreement have been met, the Lender shall make each Advance available by the Utilisation Date through its Facility Office.
 
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5.5
Cancellation of Commitment
 
The Commitment in respect of any Tranche which is unutilised at the end of the Availability Period for such Tranche shall then be cancelled.
 
5.6
Retentions and payment to third parties
 
The Borrowers irrevocably authorise the Lender:
 
(a)
to deduct from the proceeds of any Advance any fees then payable to the Lender in accordance with Clause 11 (Fees), any solicitors fees and disbursements together with any applicable VAT and any other items listed as deductible items in the relevant Utilisation Request and to apply them in payment of the items to which they relate; and
 
(b)
on each Utilisation Date, to pay to, or for the account of, the relevant Borrower which is to utilise the relevant Advance, the balance (after any deduction made in accordance with paragraph (a) above) of the amount of such Advance.  That payment shall be made in the case of each Tranche, to the account of the Existing Lender under the Existing Facility Agreement which the Borrowers may specify in the relevant Utilisation Request and any surplus shall be paid to the Borrowers in the account designated by them in the relevant Utilisation Request.
 
5.7
Disbursement of Advance to third party
 
Payment by the Lender under Clause 5.6 (Retentions and payment to third parties) to a person other than a Borrower shall constitute the making of the relevant Advance and the Borrowers shall at that time become indebted, as principal and direct obligor, to the Lender in an amount equal to that Advance.
 
5.8
Prepositioning of funds
 
If, in respect of any proposed Advance under a Tranche, the Lender, at the request of the Borrowers and on terms acceptable to the Lender and in its absolute discretion, prepositions funds with the Existing Lender or any other bank, each Borrower and the Parent Guarantor:
 
(a)
agree to pay interest on the amount of the funds so prepositioned at the rate described in Clause 8.1 (Calculation of interest) on the basis of successive interest periods of one day and so that interest shall be paid together with the first payment of interest on such Advance after its Utilisation Date or, if such Utilisation Date does not occur, within three Business Days of demand by the Lender; and
 
(b)
shall, without duplication, indemnify the Lender against any costs, loss or liability it may incur in connection with such arrangement.
 
34
SECTION 4
 
REPAYMENT, PREPAYMENT AND CANCELLATION
 
6.
REPAYMENT
 
6.1
Repayment of Loan
 
Save as otherwise repaid or prepaid, the Borrowers shall repay each Tranche by consecutive quarterly instalments (each a “Repayment Instalment”) and a balloon instalment (each a “Balloon Instalment”) in accordance with the relevant Repayment Schedule, the first such Repayment Instalment in respect of each Tranche shall be repaid on the date falling three Months after the relevant Utilisation Date in respect of the relevant Advance relating to that Tranche (except for Tranche C where the first Repayment Date is 12th July 2023), each subsequent Repayment Instalment shall be payable in three monthly intervals thereafter and the last such Repayment Instalment together with the Balloon Instalment in respect of each Tranche on the Termination Date in respect of that Tranche.
 
6.2
Reduction of Repayment Instalments
 
If any part of the Facility is cancelled, the Repayment Instalments (including the Balloon Instalments) falling after that cancellation shall be reduced pro rata by the amount cancelled.
 
6.3
Termination Date
 
On the final Termination Date, the Borrowers shall additionally pay to the Lender all other sums then accrued and owing under the Finance Documents.
 
6.4
Reborrowing
 
No Borrower may reborrow any part of the Facility which is repaid.
 
7.
PREPAYMENT AND CANCELLATION
 
7.1
Illegality
 
If:
 
it becomes unlawful in any applicable jurisdiction for the Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain all or any part of the Loan or it becomes unlawful for any Affiliate of the Lender for the Lender to do so:
 
(a)
the Lender shall promptly notify the Borrowers upon becoming aware of that event and the Available Facility will be immediately cancelled; and
 
(b)
the Borrowers shall prepay the Loan on the last day of the Interest Period for the Loan occurring after the Lender has notified the Borrowers or, if earlier, the date specified by the Lender in the notice delivered to the Borrowers (being no earlier than the last day of any applicable grace period permitted by law) and the Commitment shall be cancelled; and
 
(c)
accrued interest and all other amounts accrued for the Lender under the Finance Documents shall be immediately due and payable.
 
35
7.2
Change of control
 
(a)
If:
 

 (i)
 the Parent Guarantor ceases to directly or indirectly own and control a Borrower; or
 

 (ii)
the Parent Guarantor ceases to be listed on the Nasdaq or any other stock exchange acceptable to the Lender:
 

 (A)
the Parent Guarantor shall promptly notify the Lender upon becoming aware of that event; and
 

 (B)
the Lender may, by not less than 10 Business Days’ notice to the Borrowers, cancel the Facility and declare the Loan, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Facility will be cancelled and the Loan and all such outstanding interest and other amounts will become due and payable within 30 Business Days of the change of control event having occurred.
 
(b)
For the purpose of paragraph (a)(i) above “control” means:
 

 (i)
the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:
 

 (A)
cast, or control the casting of, 100 per cent. of the maximum number of votes that might be cast at a general meeting of a Borrower; or
 

 (B)
appoint or remove all, or the majority, of the directors or other equivalent officers of a Borrower; or
 

 (C)
give directions with respect to the operating and financial policies of a Borrower with which the directors or other equivalent officers of that Borrower are obliged to comply; and/or
 

 (ii)
the holding beneficially of 100 per cent. of the issued share capital of a Borrower (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital).
 
7.3
Voluntary and automatic cancellation
 
(a)
The Borrowers may, if they give the Lender not less than ten (10) Business Days’ (or such shorter period as the Lender may agree) prior notice, cancel the whole or any part (being a minimum amount of $500,000) of the Available Facility.  Any cancellation under this Clause 7.3 (Voluntary and automatic cancellation) shall reduce the amount of the relevant Tranche then unutilised rateably.
 
(b)
The unutilised Commitment (if any) in respect of a Tranche shall be automatically cancelled at close of business on the Utilisation Date of that Tranche.
 
7.4
Voluntary prepayment of a Tranche
 
(a)
Subject to paragraph (b) below, the Borrowers may, if they give the Lender not less than ten (10) RFR Banking Days’ (or such shorter period as the Lender may agree) prior notice, prepay the whole or any part of the Loan (but, if in part, being an amount that reduces the amount of the Loan by a minimum amount of $500,000 or a multiple of that amount).
 
36
(b)
The Loan may only be prepaid after the last day of the Availability Period (or, if earlier, the day on which the Available Facility is zero).
 
(c)
If more than two voluntary prepayments in part of the Loan are made in any 12-month period beginning on the first Utilisation Date, the Borrowers shall upon demand from the Lender, pay a fee to the Lender in the amount of $5,000 in respect of each such additional voluntary prepayment.
 
(d)
Any partial prepayment under this Clause 7.4 (Voluntary prepayment of a Tranche) shall be applied against the outstanding Repayment Instalments (excluding, for the avoidance of doubt, the Balloon Instalment) of the Tranche specified by the Borrowers in order of maturity.
 
7.5
Mandatory prepayment on sale or Total Loss
 
(a)
If a Ship is sold (without prejudice to paragraph (a) of Clause 22.12 (Disposals)) or becomes a Total Loss, the Borrowers shall on the Relevant Date prepay all outstanding amounts under the Tranche applicable to such Ship.
 
(b)
On the Relevant Date, the Borrowers shall also prepay:
 

 (i)
such part of the Loan as shall eliminate any shortfall arising if the ratio set out in Clause 25 (Security Cover) were applied immediately following the payment referred to in paragraph (a) above; and
 

 (ii)
if applicable, such amount as may be required to maintain the Security Cover Ratio which applied immediately before the sale or Total Loss if such Security Cover Ratio was higher than that required under Clause 25 (Security Cover).
 
(c)
In this Clause 7.5 (Mandatory prepayment on sale or Total Loss):
 
“Relevant Amount” means the amount required to be prepaid under paragraphs (a) and (b) of this Clause 7.5 (Mandatory prepayment on sale or Total Loss).
 
“Relevant Date” means:
 

 (a)
in the case of a sale of a Ship, the date on which the sale is completed by delivery of that Ship and transfer of title of that Ship to the buyer; and
 

 (b)
in the case of a Total Loss:
 

 (i)
if and to the extent that such prepayment is not, in the reasonable opinion of the Lender, covered by the proceeds of insurance payable in respect of such Total Loss, within thirty (30) days after the Total Loss Date; and
 

 (ii)
if and to the extent that such prepayment is, in the reasonable opinion of the Lender, covered by the proceeds of insurance relating to such Total Loss, on the earlier of (1) the date falling six (6) Months after the Total Loss Date (or, if the Lender has received a written confirmation from the relevant insurers that the full insurance claim relating to such Total Loss will be covered in such form as the Lender may reasonably require, such period shall be extended to twelve (12) Months after the Total Loss Date) and (2) the date of receipt by the Lender of the proceeds of insurance relating to such Total Loss.
 
37
(d)
Any surplus following the prepayment of a Tranche pursuant to this Clause 7.5 (Mandatory prepayment on sale or Total Loss) shall be applied pro rata against the other Tranches and within each such Tranche pro rata against the Repayment Instalments for each Repayment Date falling after that prepayment and the relevant Balloon Instalment.
 
7.6
Restrictions
 
(a)
Any notice of cancellation or prepayment given by any Party under this Clause 7 (Prepayment and Cancellation) shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.
 
(b)
Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid in connection with that prepayment and, subject to any Break Costs, without premium or penalty.
 
(c)
No Borrower may reborrow any part of the Facility which is prepaid.
 
(d)
No Borrower shall repay or prepay all or any part of the Loan or cancel all or any part of the Commitment except at the times and in the manner expressly provided for in this Agreement.
 
(e)
No amount of the Commitment cancelled under this Agreement may be subsequently reinstated.
 
38
SECTION 5
 
COSTS OF UTILISATION
 
8.
INTEREST
 
8.1
Calculation of interest
 
(a)
The rate of interest on the Loan or any part of the Loan for any day during an Interest Period is the percentage rate per annum which is the aggregate of:
 

 (i)
the applicable Margin;
 

 (ii)
the Compounded Reference Rate for that day.
 
(b)
If any day during an Interest Period for the Loan or any part of the Loan is not an RFR Banking Day, the rate of interest on the Loan or that part of the Loan for that day will be the rate applicable to the immediately preceding RFR Banking Day.
 
8.2
Payment of interest
 
The Borrowers shall pay accrued interest on the Loan or any part of the Loan on the last day of each Interest Period (each an “Interest Payment Date”).
 
8.3
Default interest
 
(a)
If an Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate which is two per cent.  per annum higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted part of the Loan in the currency of the Unpaid Sum for successive Interest Periods, each of a duration selected by the Lender.  Any interest accruing under this Clause 8.3 (Default interest) shall be immediately payable by the Obligor on demand by the Lender.
 
(b)
Default interest (if unpaid) arising on an Unpaid Sum will be compounded with the Unpaid Sum at the end of each Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.
 
8.4
Notifications
 
(a)
The Lender shall promptly upon an Interest Payment being determinable, notify:
 

 (i)
the Borrowers of that Interest Payment;
 

 (ii)
the Borrowers of:
 

 (A)
each applicable rate of interest relating to the determination of that Interest Payment; and
 

 (B)
to the extent it is then determinable, the Market Disruption Rate (if any) relating to the Loan or the relevant part of the Loan.
 
This paragraph (a) shall not apply to any Interest Payment determined pursuant to Clause 10.3 (Cost of funds).
 
39
(b)
The Lender shall promptly notify the Borrowers of the Funding Rate relating to the Loan or any part of the Loan.
 
(c)
The Lender shall promptly notify the Borrowers of the determination of a rate of interest relating to the Loan or any part of the Loan to which Clause 10.3 (Cost of funds) applies.
 
(d)
This Clause 8.4 (Notifications) shall not require the Lender to make any notification to any Party on a day which is not a Business Day.
 
8.5
Sustainability Margin adjustment
 
(a)
As of the applicable Sustainability Margin Adjustment Effective Date in any given calendar year, the Margin (as specified in paragraph (a) of its definition in Clause 1.1 (Definitions)) for the immediate following 12 months-period during the Security Period will be determined and adjusted in accordance with the terms set out in Schedule 10 (Sustainability Margin Adjustment Schedule) (as amended) and Schedule 11 (Form of Sustainability Compliance Certificate) and references to “Margin” in this Agreement shall be construed accordingly.
 
(b)
The Borrowers undertake to execute (or procure the execution of) any documentation supplemental to this Agreement and any other Security Document, at the Lender’s sole direction, for the purposes of reflecting an amendment to the rate of the Margin.
 
9.
INTEREST PERIODS
 
9.1
Selection of Interest Periods
 
(a)
The Interest Period for each Tranche shall be three Months or any other period agreed between the Borrowers and the Lender.
 
(b)
An Interest Period in respect of a Tranche or any part of a Tranche shall not extend beyond the relevant Termination Date.
 
(c)
The first Interest Period for each of Tranche A and Tranche B shall start on the Utilisation Date relating to such Tranche and each subsequent Interest Period shall start on the last day of its preceding Interest Period.
 
(d)
The first Interest Period for Tranche C shall start on the Utilisation Date of Tranche C and shall end on the last day of the Interest Period applicable to Tranche A and Trance B applicable to them on the date on which Tranche C was utilised.
 
(e)
Each Tranche shall have one Interest Period only at any time.
 
9.2
Changes to Interest Periods
 
(a)
In respect of a Repayment Instalment, before the first day of an Interest Period for the relevant Tranche, the Lender may establish an Interest Period for a part of the relevant Tranche equal to such Repayment Instalment to end on the Repayment Date relating to it.
 
(b)
If the Lender makes any change to an Interest Period referred to in this Clause 9.2 (Changes to Interest Periods), it shall promptly notify the Borrowers.
 
40
9.3
Non-Business Days
 
Any rules specified as “Business Day Conventions” in the Reference Rate Terms shall apply to each Interest Period.
 
10.
CHANGES TO THE CALCULATION OF INTEREST
 
10.1
Interest calculation if no RFR or Central Bank Rate
 
If:
 
(a)
there is no RFR or Central Bank Rate for the purposes of calculating the Daily Non-Cumulative Compounded RFR Rate for an RFR Banking Day during an Interest Period for the Loan or any part of the Loan; and
 
(b)
“Cost of funds will apply as a fallback” is specified in the Reference Rate Terms,
 
Clause 10.3 (Cost of funds) shall apply to the Loan or that part of the Loan (as applicable) for that Interest Period.
 
10.2
Market disruption
 
If:
 
(a)
a Market Disruption Rate is specified in the Reference Rate Terms; and
 
(b)
before the Reporting Time for the Loan or any part of the Loan, the Lender notifies the Borrowers that its cost of funds relating to its participation in the Loan or that part of the Loan would be in excess of that Market Disruption Rate,
 
then Clause 10.3 (Cost of funds) shall apply to the Loan or that part of the Loan (as applicable) for the relevant Interest Period.
 
10.3
Cost of funds
 
(a)
If this Clause 10.3 (Cost of funds) applies to the Loan or part of the Loan for an Interest Period, Clause 8.1 (Calculation of interest) shall not apply to the Loan or that part of the Loan for that Interest Period and the rate of interest on the Loan or that part of the Loan for that Interest Period shall be the percentage rate per annum which is the sum of:
 

 (i)
the applicable Margin; and
 

 (ii)
the rate notified to the Borrowers by the Lender as soon as practicable and in any event by the Reporting Time for the Loan or that part of the Loan to be that which expresses as a percentage rate per annum its cost of funds relating to its participation in the Loan or that part of the Loan.
 
(b)
If this Clause 10.3 (Cost of funds) applies and the Lender or the Borrowers so require, the Lender and the Borrowers shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest or (as the case may be) an alternative basis for funding.
 
41
(c)
Subject to Clause 41.1 (Changes to reference rates), any substitute or alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of the Lender and the Borrowers, be binding on all Parties.
 
(d)
If a substitute or alternative basis is not agreed pursuant to paragraph (c) above, the rate of interest shall continue to be determined in accordance with paragraph (a) above.
 
(e)
If paragraph (f) below does not apply and any rate notified to the Lender under sub-paragraph (ii) of paragraph (a) above is less than zero, the relevant rate shall be deemed to be zero.
 
(f)
If this Clause 10.3 (Cost of funds) applies pursuant to Clause 10.2 (Market disruption) and the Lender’s Funding Rate is less than the relevant Market Disruption Rate, the Lender’s cost of funds relating to the Loan or the relevant part of the Loan for that Interest Period shall be deemed, for the purposes of sub-paragraph (ii) of paragraph (a) above, to be the Market Disruption Rate for the Loan or that part of the Loan.
 
(g)
If this Clause 10.3 (Cost of funds) applies, the Lender shall, as soon as is practicable, notify the Borrowers.
 
10.4
Break Costs
 
(a)
If an amount is specified as Break Costs in the Reference Rate Terms, the Borrowers shall, within three Business Days of demand by the Lender, pay to the Lender its Break Costs (if any) attributable to all or any part of the Loan or Unpaid Sum being paid by the Borrowers on a day before the last day of an Interest Period for the Loan, the relevant part of the Loan or that Unpaid Sum.
 
(b)
The Lender shall as soon as reasonably practicable provide a certificate confirming the amount of its Break Costs for any Interest Period in respect of which they become, or may become, payable.
 
11.
FEES
 
The Borrowers shall pay to Lender a non-refundable arrangement fee in the amount of $126,000 (representing 0.80 per cent. of the maximum amount of Tranche C) on the Utilisation Date of Tranche C.
 
42
SECTION 6
 
ADDITIONAL PAYMENT OBLIGATIONS
 
12.
TAX GROSS UP AND INDEMNITIES
 
12.1
Definitions
 
(a)
In this Agreement:
 
“Tax Credit” means a credit against, relief or remission for, or repayment of any Tax.
 
“Tax Deduction” means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.
 
“Tax Payment” means either the increase in a payment made by an Obligor to the Lender under Clause 12.2 (Tax gross-up) or a payment under Clause 12.3 (Tax indemnity).
 
(b)
Unless a contrary indication appears, in this Clause 12 (Tax Gross Up and Indemnities) reference to “determines” or “determined” means a determination made in the absolute discretion of the person making the determination.
 
12.2
Tax gross-up
 
(a)
Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.
 
(b)
The Borrowers shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Lender accordingly.  Similarly, the Lender shall notify the Borrowers and that Obligor on becoming so aware in respect of a payment payable to the Lender.
 
(c)
If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor 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.
 
(d)
If an Obligor is required to make a Tax Deduction, that Obligor 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.
 
(e)
Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Lender evidence reasonably satisfactory to the Lender that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
 
12.3
Tax indemnity
 
(a)
The Obligors shall (within three Business Days of demand by the Lender) pay to the Lender an amount equal to the loss, liability or cost which the Lender determines will be or has been (directly or indirectly) suffered for or on account of Tax by the Lender in respect of a Finance Document.
 
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(b)
Paragraph (a) above shall not apply:
 

 (i)
with respect to any Tax assessed on the Lender:
 

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

 (B)
under the law of the jurisdiction in which the Lender’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 income received or receivable (but not any sum deemed to be received or receivable) by the Lender; or
 

 (ii)
to the extent a loss, liability or cost:
 

 (A)
is compensated for by an increased payment under Clause 12.2 (Tax gross-up); or
 

 (B)
relates to a FATCA Deduction required to be made by a Party.
 
(c)
The Lender shall, if making, or intending to make, a claim under paragraph (a) above, promptly notify the Obligors of the event which will give, or has given, rise to the claim.
 
12.4
Tax Credit
 
If an Obligor makes a Tax Payment and the Lender determines that:
 
(a)
a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was received; and
 
(b)
the Lender has obtained and utilised that Tax Credit,
 
the Lender shall pay an amount to the Obligor which the Lender determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.
 
12.5
Stamp taxes
 
The Obligors shall pay and, within three Business Days of demand, indemnify the Lender against any cost, loss or liability which the Lender incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.
 
12.6
VAT
 
(a)
All amounts expressed to be payable under a Finance Document by any Party to the Lender which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, if VAT is or becomes chargeable on any supply made by the Lender to any Party under a Finance Document and the Lender is required to account to the relevant tax authority for the VAT, that Party must pay to the Lender (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and the Lender must promptly provide an appropriate VAT invoice to that Party).
 
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(b)
Where a Finance Document requires any Party to reimburse or indemnify the Lender for any cost or expense, that Party shall reimburse or indemnify (as the case may be) the Lender for the full amount of such cost or expense, including such part of it as represents VAT, save to the extent that the Lender reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.
 
(c)
Any reference in this Clause 12.6 (VAT) to any Party shall, at any time when that Party is treated as a member of a group or unity (or fiscal unity) for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the person who is treated at that time as making the supply, or (as appropriate) receiving the supply, under the grouping rules provided for in Article 11 of Council Directive 2006/112/EC (or as implemented by the relevant member state of the European Union or equivalent provisions imposed elsewhere) so that a reference to a Party shall be construed as a reference to that Party or the relevant group or unity (or fiscal unity) of which that Party is a member for VAT purposes at the relevant time or the relevant representative member (or representative or head) of that group or unity at the relevant time (as the case may be).
 
(d)
In relation to any supply made by the Lender to any Party under a Finance Document, if reasonably requested by the Lender, that Party must promptly provide the Lender with details of that Party’s VAT registration and such other information as is reasonably requested in connection with the Lender’s VAT reporting requirements in relation to such supply.
 
12.7
FATCA Information
 
(a)
Subject to paragraph (c) below, each Party shall, within ten Business Days of a reasonable request by another Party:
 

 (i)
confirm to that other Party whether it is:
 

 (A)
a FATCA Exempt Party; or
 

 (B)
not a FATCA Exempt Party; and
 

 (ii)
supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party’s compliance with FATCA; and
 

 (iii)
supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party’s compliance with any other law, regulation or exchange of information regime.
 
(b)
If a Party confirms to another Party pursuant to sub-paragraph (i) of paragraph (a) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.
 
(c)
Paragraph (a) above shall not oblige the Lender to do anything and sub-paragraph (iii) of paragraph (a) above shall not oblige any other Party to do anything which would or might in its reasonable opinion constitute a breach of:
 

 (i)
any law or regulation;
 
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 (ii)
any fiduciary duty; or
 

 (iii)
any duty of confidentiality.
 
(d)
If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with sub-paragraphs (i) or (ii) of paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.
 
12.8
FATCA Deduction
 
(a)
Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
 
(b)
Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment.
 
13.
INCREASED COSTS
 
13.1
Increased costs
 
(a)
Subject to Clause 13.3 (Exceptions), the Borrowers shall, within three Business Days of a demand by the Lender, pay for the account of the Lender the amount of any Increased Costs incurred by the Lender or any of its Affiliates as a result of:
 

 (i)
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation; or
 

 (ii)
compliance with any law or regulation made,
 
in each case after the date of this Agreement; or
 

 (iii)
the implementation, application of or compliance with Basel III or CRD IV or any law or regulation that implements or applies Basel III or CRD IV.
 
(b)
In this Agreement:
 

 (i)
“Basel III” means:
 

 (A)
the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III: International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;
 
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 (B)
the rules for global systemically important banks contained in “Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text” published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and
 

 (C)
any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”.
 

 (ii)
“CRD IV” means:
 

 (A)
Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending regulation (EU) No. 648/2012, as amended by Regulation (EU) 2019/876;
 

 (B)
Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, as amended by Directive (EU) 2019/878; and
 

 (C)
any other law or regulation which implements Basel III.
 

 (iii)
“Increased Costs” means:
 

 (A)
a reduction in the rate of return from the Facility or on the Lender’s (or its Affiliate’s) overall capital;
 

 (B)
an additional or increased cost; or
 

 (C)
a reduction of any amount due and payable under any Finance Document,
 
which is incurred or suffered by the Lender or any of its Affiliates to the extent that it is attributable to the Lender having entered into the Commitment or funding or performing its obligations under any Finance Document.
 
13.2
Increased cost claims
 
If the Lender intends to make a claim pursuant to Clause 13.1 (Increased costs) it shall promptly notify the Borrowers.
 
13.3
Exceptions
 
Clause 13.1 (Increased costs) does not apply to the extent any Increased Cost is:
 
(a)
attributable to a Tax Deduction required by law to be made by an Obligor;
 
(b)
attributable to a FATCA Deduction required to be made by a Party;
 
(c)
compensated for by Clause 12.3 (Tax indemnity) (or would have been compensated for under Clause 12.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in paragraph (b) of Clause 12.3 (Tax indemnity) applied);
 
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(d)
compensated for by any payment made pursuant to Clause 14.3 (Mandatory Cost); or
 
(e)
attributable to the wilful breach by the Lender or its Affiliates of any law or regulation.
 
14.
OTHER INDEMNITIES
 
14.1
Currency indemnity
 
(a)
If any sum due from an Obligor under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of:
 

 (i)
making or filing a claim or proof against that Obligor; or
 

 (ii)
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
 
that Obligor shall, as an independent obligation, on demand, indemnify the Lender against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
 
(b)
Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.
 
14.2
Other indemnities
 
(a)
Each Obligor shall, on demand, indemnify the Lender and any Receiver and Delegate against:
 

 (i)
any cost, loss or liability incurred by it as a result of:
 

 (A)
the occurrence of any Event of Default; or
 

 (B)
a failure by a Transaction Obligor to pay any amount due under a Finance Document on its due date; or
 

 (C)
funding, or making arrangements to fund, an Advance requested by the Borrowers in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by the Lender alone); or
 

 (D)
the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrowers; or
 

 (E)
investigating any event which it reasonably believes is a Default; or
 

 (F)
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or
 

 (G)
instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents; and
 
48

 (ii)
any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Lender (otherwise than by reason of the Lender’s gross negligence or wilful misconduct) or, in the case of any cost, loss or liability pursuant to Clause 30.8 (Disruption to Payment Systems etc.) notwithstanding the Lender’s negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Lender in acting as Lender under the Finance Documents.
 
(b)
Each Obligor shall, on demand, indemnify the Lender, each Affiliate of the Lender and any Receiver and Delegate and each officer or employee of the Lender or its Affiliate or any Receiver or Delegate (as applicable) (each such person for the purposes of this Clause 14.2 (Other indemnities) an “Indemnified Person”), against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by that Indemnified Person pursuant to or in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry, in connection with or arising out of the entry into and the transactions contemplated by the Finance Documents, having the benefit of any Security constituted by the Finance Documents or which relates to the condition or operation of, or any incident occurring in relation to, any Ship unless such cost, loss or liability is caused by the gross negligence or wilful misconduct of that Indemnified Person.
 
(c)
No Party other than the Lender or the Receiver or Delegate (as applicable) may take any proceedings against any officer, employee or agent of the Lender or the Receiver or Delegate (as applicable) in respect of any claim it might have against the Lender or the Receiver or Delegate or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Transaction Document or any Security Property.
 
(d)
Without limiting, but subject to any limitations set out in paragraph (b) above, the indemnity in paragraph (b) above shall cover any cost, loss or liability incurred by each Indemnified Person in any jurisdiction:
 

 (i)
arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions; or
 

 (ii)
in connection with any Environmental Claim.
 
(e)
Each Obligor shall, on demand, indemnify the Lender and every Receiver and Delegate against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by any of them:
 

 (i)
in relation to or as a result of:
 

 (A)
any failure by the Borrowers to comply with its obligations under Clause 16 (Costs and Expenses);
 

 (B)
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;
 

 (C)
the taking, holding, protection or enforcement of the Finance Documents and the Transaction Security;
 

 (D)
the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Lender and each Receiver and Delegate by the Finance Documents or by law;
 
49

 (E)
any default by any Transaction Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents;
 

 (F)
any action by any Transaction Obligor which vitiates, reduces the value of, or is otherwise prejudicial to, the Transaction Security; and
 

 (G)
instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents;
 

 (ii)
which otherwise relates to any of the Security Property or the performance of the terms of this Agreement or the other Finance Documents (otherwise, in each case, than by reason of the Lender’s or Receiver’s or Delegate’s gross negligence or wilful misconduct).
 
(f)
Any Affiliate or Receiver or Delegate or any officer or employee of the Lender, or of any of its Affiliates or any Receiver or Delegate (as applicable) may rely on this Clause 14.2 (Other indemnities) and the provisions of the Third Parties Act, subject to Clause 1.5 (Third party rights) and the provisions of the Third Parties Act.
 
14.3
Mandatory Cost
 
Each Borrower shall, on demand by the Lender, pay to the Lender, such amount which the Lender certifies in a notice to the Borrowers to be its good faith determination of the amount necessary to compensate it for complying with:
 
(a)
if the Lender is lending from a Facility Office in a Participating Member State, the minimum reserve requirements (or other requirements having the same or similar purpose) of the European Central Bank (or any other authority or agency which replaces all or any of its functions) in respect of loans made from that Facility Office; and
 
(b)
if the Lender is lending from a Facility Office in the United Kingdom, any reserve asset, special deposit or liquidity requirements (or other requirements having the same or similar purpose) of the Bank of England (or any other governmental authority or agency) and/or paying any fees to the Financial Conduct Authority and/or the Prudential Regulation Authority (or any other governmental authority or agency which replaces all or any of their functions),
 
which, in each case, is referable to the Loan.
 
14.4
Lender’s management time
 
Any amount payable to the Lender under Clause 14.2 (Other indemnities) and Clause 16 (Costs and Expenses) shall include the cost of utilising the Lender’s excessive management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Lender may notify to the Borrowers, and is in addition to any fee paid or payable to the Lender under Clause 11 (Fees).
 
15.
MITIGATION BY THE LENDER
 
15.1
Mitigation
 
(a)
The Lender shall, in consultation with the Borrowers, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 (Illegality), Clause 12 (Tax Gross Up and Indemnities), Clause 13 (Increased Costs) or paragraph (a) of Clause 14.3 (Mandatory Cost) including (but not limited to) assigning its rights and/or transferring its obligations under the Finance Documents to another Affiliate or Facility Office.
 
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(b)
Paragraph (a) above does not in any way limit the obligations of any Transaction Obligor under the Finance Documents.
 
15.2
Limitation of liability
 
(a)
Each Obligor shall, on demand, indemnify the Lender for all costs and expenses reasonably incurred by the Lender as a result of steps taken by it under Clause 15.1 (Mitigation).
 
(b)
The Lender is not obliged to take any steps under Clause 15.1 (Mitigation) if either:
 

 (i)
a Default has occurred and is continuing; or
 

 (ii)
in the opinion of the Lender (acting reasonably), to do so might be prejudicial to it.
 
16.
COSTS AND EXPENSES
 
16.1
Transaction expenses
 
The Obligors shall, on demand, pay the Lender the amount of all costs and expenses (including legal fees) reasonably incurred by it in connection with the negotiation, preparation, printing, execution and perfection of:
 
(a)
this Agreement and any other documents referred to in this Agreement or in a Security Document; and
 
(b)
any other Finance Documents executed after the date of this Agreement.
 
16.2
Amendment costs
 
Subject to Clause 16.4 (Reference rate transition costs), if:
 
(a)
a Transaction Obligor requests an amendment, waiver or consent;
 
(b)
an amendment is required either pursuant to Clause 30.6 (Change of currency); or
 
(c)
a Transaction Obligor requests, and the Lender agrees to, the release of all or any part of the Security Assets from the Transaction Security,
 
the Obligors shall, on demand, reimburse the Lender for the amount of all costs and expenses (including legal fees) reasonably incurred by the Lender in responding to, evaluating, negotiating or complying with that request or requirement.
 
16.3
Enforcement and preservation costs
 
The Obligors shall, on demand, pay to the Lender the amount of all costs and expenses (including legal fees) incurred by the Lender in connection with the enforcement of, or the preservation of any rights under, any Finance Document or the Transaction Security and with any proceedings instituted by or against the Lender as a consequence of it entering into a Finance Document, taking or holding the Transaction Security, or enforcing those rights.
 
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16.4
Reference rate transition costs
 
The Borrowers shall on demand reimburse the Lender for the amount of all costs and expenses (including legal fees) reasonably incurred by the Lender in connection with:
 
(a)
the negotiation or entry into of any Reference Rate Supplement or Compounding Methodology Supplement; or
 
(b)
any amendment, waiver or consent relating to:
 

 (i)
any Reference Rate Supplement or Compounding Methodology Supplement; or
 

 (ii)
any change arising as a result of an amendment required under Clause 41.1 (Changes to reference rates).
 
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SECTION 7
 
GUARANTEES AND JOINT AND SEVERAL LIABILITY OF BORROWERS
 
17.
GUARANTEE AND INDEMNITY – PARENT GUARANTOR
 
17.1
Guarantee and indemnity
 
The Parent Guarantor irrevocably and unconditionally:
 
(a)
guarantees to the Lender punctual performance by each Transaction Obligor (other than the Parent Guarantor) of all such other Transaction Obligor’s obligations under the Finance Documents;
 
(b)
undertakes with the Lender that whenever a Transaction Obligor (other than the Parent Guarantor) does not pay any amount when due under or in connection with any Finance Document, the Parent Guarantor shall immediately on demand pay that amount as if it were the principal obligor; and
 
(c)
agrees with the Lender that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify the Lender immediately on demand against any cost, loss or liability it incurs as a result of a Transaction Obligor (other than the Parent Guarantor) not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due.  The amount payable by the Parent Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 17 (Guarantee and Indemnity – Parent Guarantor) if the amount claimed had been recoverable on the basis of a guarantee.
 
17.2
Continuing guarantee
 
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Transaction Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
 
17.3
Reinstatement
 
If any discharge, release or arrangement (whether in respect of the obligations of any Transaction Obligor or any security for those obligations or otherwise) is made by the Lender in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of the Parent Guarantor under this Clause 17 (Guarantee and Indemnity – Parent Guarantor) will continue or be reinstated as if the discharge, release or arrangement had not occurred.
 
17.4
Waiver of defences
 
The obligations of the Parent Guarantor under this Clause 17 (Guarantee and Indemnity – Parent Guarantor) and in respect of any Transaction Security will not be affected or discharged by an act, omission, matter or thing which, but for this Clause 17.4 (Waiver of defences), would reduce, release or prejudice any of its obligations under this Clause 17 (Guarantee and Indemnity – Parent Guarantor) or in respect of any Transaction Security (without limitation and whether or not known to it or the Lender) including:
 
53
(a)
any time, waiver or consent granted to, or composition with, any Transaction Obligor or other person;
 
(b)
the release of any other Transaction Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;
 
(c)
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect or delay in perfecting, or refusal or neglect to take up or enforce, or delay in taking or enforcing any rights against, or security over assets of, any Transaction Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
 
(d)
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of a Transaction Obligor or any other person;
 
(e)
any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;
 
(f)
any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or
 
(g)
any insolvency or similar proceedings.
 
17.5
Immediate recourse
 
The Parent Guarantor waives any right it may have of first requiring the Lender (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person (including without limitation to commence any proceedings under any Finance Document or to enforce any Transaction Security) before claiming or commencing proceedings under this Clause 17 (Guarantee and Indemnity – Parent Guarantor).  This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
 
17.6
Appropriations
 
Until all amounts which may be or become payable by the Transaction Obligors under or in connection with the Finance Documents have been irrevocably paid in full, the Lender (or any trustee or agent on its behalf) may:
 
(a)
refrain from applying or enforcing any other moneys, security or rights held or received by the Lender (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Parent Guarantor shall not be entitled to the benefit of the same; and
 
(b)
hold in an interest-bearing suspense account any moneys received from the Parent Guarantor or on account of the Parent Guarantor’s liability under this Clause 17 (Guarantee and Indemnity – Parent Guarantor).
 
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17.7
Deferral of Parent Guarantor’s rights
 
All rights which the Parent Guarantor at any time has (whether in respect of this guarantee, a mortgage or any other transaction) against any Borrower, any other Transaction Obligor or their respective assets shall be fully subordinated to the rights of the Lender under the Finance Documents and until the end of the Security Period and unless the Lender otherwise directs, the Parent Guarantor will not exercise any rights which it may have (whether in respect of any Finance Document to which it is a Party or any other transaction) by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 17 (Guarantee and Indemnity – Parent Guarantor):
 
(a)
to be indemnified by a Transaction Obligor;
 
(b)
to claim any contribution from any third party providing security for, or any other guarantor of, any Transaction Obligor’s obligations under the Finance Documents;
 
(c)
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Lender under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by the Lender;
 
(d)
to bring legal or other proceedings for an order requiring any Transaction Obligor to make any payment, or perform any obligation, in respect of which the Parent Guarantor has given a guarantee, undertaking or indemnity under Clause 17.1 (Guarantee and indemnity);
 
(e)
to exercise any right of set-off against any Transaction Obligor; and/or
 
(f)
to claim or prove as a creditor of any Transaction Obligor in competition with the Lender.
 
If the Parent Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Lender by the Transaction Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Lender and shall promptly pay or transfer the same to the Lender or as the Lender may direct for application in accordance with Clause 30 (Payment Mechanics).
 
17.8
Additional security
 
This guarantee and any other Security given by the Parent Guarantor is in addition to and is not in any way prejudiced by, and shall not prejudice, any other guarantee or Security or any other right of recourse now or subsequently held by the Lender or any right of set-off or netting or right to combine accounts in connection with the Finance Documents.
 
17.9
Applicability of provisions of Guarantee to other Security
 
Clauses 17.2 (Continuing guarantee), 17.3 (Reinstatement), 17.4 (Waiver of defences), 17.5 (Immediate recourse), 17.6 (Appropriations), 17.7 (Deferral of Parent Guarantor’s rights) and 17.8 (Additional security) shall apply, with any necessary modifications, to any Security which the Parent Guarantor creates (whether at the time at which it signs this Agreement or at any later time) to secure the Secured Liabilities or any part of them.
 
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18.
JOINT AND SEVERAL LIABILITY OF THE BORROWERS
 
18.1
Joint and several liability
 
All liabilities and obligations of the Borrowers under this Agreement shall, whether expressed to be so or not, be joint and several.
 
18.2
Waiver of defences
 
The liabilities and obligations of a Borrower shall not be impaired by:
 
(a)
this Agreement being or later becoming void, unenforceable or illegal as regards any other Borrower;
 
(b)
the Lender entering into any rescheduling, refinancing or other arrangement of any kind with any other Borrower;
 
(c)
the Lender releasing any other Borrower or any Security created by a Finance Document;
 
(d)
any time, waiver or consent granted to, or composition with any other Borrower or other person;
 
(e)
the release of any other Borrower or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;
 
(f)
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any other Borrower or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
 
(g)
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of any other Borrower or any other person;
 
(h)
any amendment, novation, supplement, extension, restatement (however fundamental, and whether or not more onerous) or replacement of a Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;
 
(i)
any unenforceability, illegality or invalidity of any obligation or any person under any Finance Document or any other document or security; or
 
(j)
any insolvency or similar proceedings.
 
18.3
Principal Debtor
 
Each Borrower declares that it is and will, throughout the Security Period, remain a principal debtor for all amounts owing under this Agreement and the Finance Documents and no Borrower shall, in any circumstances, be construed to be a surety for the obligations of any other Borrower under this Agreement.
 
18.4
Borrower restrictions
 
(a)
Subject to paragraph (b) below, during the Security Period no Borrower shall:
 
56

 (i)
claim any amount which may be due to it from any other Borrower whether in respect of a payment made under, or matter arising out of, this Agreement or any Finance Document, or any matter unconnected with this Agreement or any Finance Document;
 

 (ii)
take or enforce any form of security from any other Borrower for such an amount, or in any way seek to have recourse in respect of such an amount against any asset of any other Borrower;
 

 (iii)
set off such an amount against any sum due from it to any other Borrower;
 

 (iv)
prove or claim for such an amount in any liquidation, administration, arrangement or similar procedure involving any other Borrower; or
 

 (v)
exercise or assert any combination of the foregoing.
 
(b)
If during the Security Period, the Lender, by notice to a Borrower, requires it to take any action referred to in paragraph (a) above in relation to any other Borrower, that Borrower shall take that action as soon as practicable after receiving the Lender’s notice.
 
18.5
Deferral of Borrowers’ rights
 
Until all amounts which may be or become payable by the Borrowers under or in connection with the Finance Documents have been irrevocably paid in full and unless the Lender otherwise directs, no Borrower will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents:
 
(a)
to be indemnified by any other Borrower; or
 
(b)
to claim any contribution from any other Borrower in relation to any payment made by it under the Finance Documents.
 
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SECTION 8
 
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
 
19.
REPRESENTATIONS
 
19.1
General
 
Each Obligor makes the representations and warranties set out in this Clause 19 (Representations) to the Lender on the date of this Agreement and on the Effective Date.
 
19.2
Status
 
(a)
It is a corporation, duly incorporated and validly existing in good standing under the law of its Original Jurisdiction.
 
(b)
It and each Transaction Obligor has the power to own its assets and carry on its business as it is being conducted.
 
19.3
Share capital and ownership
 
(a)
Each Borrower is authorized to issue 500 registered shares of no par value common stock, all of which shares have been issued in registered form and are fully paid and non-assessable.
 
(b)
The legal title to and beneficial interest in the shares in each Borrower is held by the Parent Guarantor free of any Security (other than Permitted Security) or any other claim.
 
(c)
The legal title to and beneficial interest in the shares in each of the Approved Managers, which are members of the Group, is held by the Parent Guarantor free of any Security (other than Permitted Security) or any other claim.
 
(d)
None of the shares in any Borrower is subject to any option to purchase, pre-emption rights or similar rights.
 
(e)
The Parent Guarantor is authorised to issue 525,000,000 registered shares consisting of (i) 500,000,000 registered shares of common stock with a par value of US$0.0001 each (out of which 20,011,117 registered shares of common stock have been issued and are fully paid as at the Effective Date) and (ii) 25,000,000 registered shares of preferred stock with a par value of US$0.0001 each, out of which 20,000 registered shares of preferred stock have been issued and are fully paid as at the Effective Date and 8,863,341 warrants are outstanding to purchase an aggregate of 487,791 registered shares of common stock as at the Effective Date.
 
19.4
Binding obligations
 
The obligations expressed to be assumed by it in each Transaction Document to which it is a party are legal, valid, binding and enforceable obligations.
 
19.5
Validity, effectiveness and ranking of Security
 
(a)
Each Finance Document to which it is a party does now or, as the case may be, will upon execution and delivery create, subject to the Perfection Requirements, the Security it purports to create over any assets to which such Security, by its terms, relates, and such Security will, when created or intended to be created, be valid and effective.
 
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(b)
No third party has or will have any Security (except for Permitted Security) over any assets that are the subject of any Transaction Security granted by it.
 
(c)
Subject to the Perfection Requirements, the Transaction Security granted by it to the Lender has or will when created or intended to be created have first ranking priority or such other priority it is expressed to have in the Finance Documents and is not subject to any prior ranking or pari passu ranking Security.
 
(d)
No concurrence, consent or authorisation of any person is required for the creation of or otherwise in connection with any Transaction Security.
 
19.6
Non-conflict with other obligations
 
The entry into and performance by it of, and the transactions contemplated by, each Transaction Document to which it is a party do not and will not conflict with:
 
(a)
any law or regulation applicable to it;
 
(b)
its constitutional documents; or
 
(c)
any agreement or instrument binding upon it or any Transaction Obligor or any of its assets or any member of the Transaction Obligor’s assets or constitute a default or termination event (however described) under any such agreement or instrument.
 
19.7
Power and authority
 
(a)
It has the power to enter into, perform and deliver, and has taken all necessary action to authorise:
 

 (i)
its entry into, performance and delivery of, each Transaction Document to which it is or will be a party and the transactions contemplated by those Transaction Documents; and
 

 (ii)
in the case of each Borrower, its registration of its Ship under its Approved Flag.
 
(b)
No limit on its powers will be exceeded as a result of the borrowing, granting of security or giving of guarantees or indemnities contemplated by the Transaction Documents to which it is a party.
 
19.8
Validity and admissibility in evidence
 
All Authorisations required or desirable:
 
(a)
to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Transaction Documents to which it is a party; and
 
(b)
to make the Transaction Documents to which it is a party admissible in evidence in its Relevant Jurisdictions,
 
have been obtained or effected and are in full force and effect.
 
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19.9
Governing law and enforcement
 
(a)
The choice of governing law of each Transaction Document to which it is a party will be recognised and enforced in its Relevant Jurisdictions.
 
(b)
Any judgment obtained in relation to a Transaction Document to which it is a party in the jurisdiction of the governing law of that Transaction Document will be recognised and enforced in its Relevant Jurisdictions.
 
19.10
Insolvency
 
No:
 
(a)
corporate action, legal proceeding or other procedure or step described in paragraph (a) of Clause 27.8 (Insolvency proceedings); or
 
(b)
creditors’ process described in Clause 27.9 (Creditors’ process),
 
has been taken or, to its knowledge, threatened in relation to a member of the Group; and none of the circumstances described in Clause 27.7 (Insolvency) applies to a Transaction Obligor.
 
19.11
No filing or stamp taxes
 
Under the laws of its Relevant Jurisdictions it is not necessary that the Finance Documents to which it is a party be registered, filed, recorded, notarised or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar Taxes or fees be paid on or in relation to the Finance Documents to which it is a party or the transactions contemplated by those Finance Documents except registration of any Mortgages at the relevant ship registry and any filing, recording or enrolling or any tax or fee payable which is referred to in any legal opinion delivered pursuant to Clause 4 (Conditions of Utilisation) and which will be made or paid by the Obligors promptly after the date of the relevant Finance Document.
 
19.12
Deduction of Tax
 
It is not required to make any Tax Deduction from any payment it may make under any Finance Document to which it is a party.
 
19.13
No default
 
(a)
No Event of Default and, on the date of this Agreement, on the Effective Date and on each Utilisation Date, no Default is continuing or might reasonably be expected to result from the making of any Utilisation or the entry into, the performance of, or any transaction contemplated by, any Transaction Document.
 
(b)
No other event or circumstance is outstanding which constitutes a default or a termination event (however described) under any other agreement or instrument which is binding on it or to which its assets are subject which might reasonably be expected to have a Material Adverse Effect.
 
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19.14
No misleading information
 
(a)
Any factual information provided by any member of the Group for the purposes of this Agreement was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated.
 
(b)
The financial projections contained in any such information have been prepared on the basis of recent historical information and on the basis of reasonable assumptions.
 
(c)
Nothing has occurred or been omitted from any such information and no information has been given or withheld that results in any such information being untrue or misleading in any material respect.
 
19.15
Financial Statements
 
(a)
Its Original Financial Statements were prepared in accordance with GAAP consistently applied unless expressly disclosed to the Lender in writing to the contrary before the date of this Agreement or (as applicable) the Effective Date.
 
(b)
Its Original Financial Statements give a true and fair view of its financial condition as at the end of the relevant financial year and its results of operations during the relevant financial year (consolidated in the case of the Parent Guarantor) unless expressly disclosed to the Lender in writing to the contrary before the date of this Agreement or (as applicable) the Effective Date.
 
(c)
There has been no material adverse change in its assets, business or financial condition (or the assets, business or consolidated financial condition of the Group, in the case of the Parent Guarantor) since 2 March 2023 (being the date of acceptance of the Lender’s offer letter).
 
(d)
Its most recent financial statements delivered pursuant to Clause 20.2 (Financial statements):
 

 (i)
have been prepared in accordance with Clause 20.4 (Requirements as to financial statements); and
 

 (ii)
give a true and fair view of (if audited) or fairly represent (if unaudited) its financial condition as at the end of the relevant financial year and operations during the relevant financial year (consolidated in the case of the Parent Guarantor).
 
(e)
Since the date of the most recent financial statements delivered pursuant to Clause 20.2 (Financial statements) there has been no material adverse change in its business, assets or financial condition (or the business or consolidated financial condition of the Group, in the case of the Parent Guarantor).
 
19.16
Pari passu ranking
 
Its payment obligations under the Finance Documents to which it is a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
 
19.17
No proceedings pending or threatened
 
(a)
No litigation, arbitration or administrative proceedings or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) of or before any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect have (to the best of its knowledge and belief (having made due and careful enquiry)) been started or threatened against it or any other Transaction Obligor.
 
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(b)
No judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body which might reasonably be expected to have a Material Adverse Effect has (to the best of its knowledge and belief (having made due and careful enquiry)) been made against it or any Transaction Obligor.
 
19.18
Validity and completeness of the Deed of Release
 
(a)
The Deed of Release constitutes legal, valid, binding and enforceable obligations of the Existing Lender.
 
(b)
The copy of the Deed of Release delivered to the Lender on the relevant Utilisation Date is a true and complete copy.
 
(c)
No amendments or additions to the Deed of Release have been agreed nor have any rights under the Deed of Release been waived.
 
19.19
Valuations
 
(a)
All information supplied by it or on its behalf to an Approved Valuer for the purposes of a valuation delivered to the Lender in accordance with this Agreement was true and accurate as at the date it was supplied or (if appropriate) as at the date (if any) at which it is stated to be given.
 
(b)
It has not omitted to supply any information to an Approved Valuer which, if disclosed, would adversely affect any valuation prepared by such Approved Valuer.
 
(c)
There has been no change to the factual information provided pursuant to paragraph (a) above in relation to any valuation between the date such information was provided and the date of that valuation which, in either case, renders that information untrue or misleading in any material respect.
 
19.20
No breach of laws
 
It has not (and no other member of the Group has) breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.
 
19.21
No Charter
 
Except as disclosed by a Borrower to the Lender in writing on or before the date of this Agreement or (as applicable) on the Effective Date, no Ship is subject to any Charter other than a Permitted Charter.
 
19.22
Compliance with Environmental Laws
 
All Environmental Laws relating to the ownership, operation and management of each Ship and the business of each member of the Group (as now conducted and as reasonably anticipated to be conducted in the future) and the terms of all Environmental Approvals have been complied with.
 
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19.23
No Environmental Claim
 
No Environmental Claim has been made or threatened against a Transaction Obligor or any Ship which might reasonably be expected to have a Material Adverse Effect.
 
19.24
No Environmental Incident
 
No Environmental Incident has occurred and no person has claimed that an Environmental Incident has occurred.
 
19.25
ISM and ISPS Code compliance
 
All requirements of the ISM Code and the ISPS Code as they relate to each Borrower, each Approved Manager and each Ship have been complied with.
 
19.26
Taxes paid
 
(a)
It is not and no other member of the Group is materially overdue in the filing of any Tax returns and it is not (and no other member of the Group is) overdue in the payment of any amount in respect of Tax.
 
(b)
No claims or investigations are being, or are reasonably likely to be, made or conducted against it (or any other member of the Group) with respect to Taxes.
 
19.27
Financial Indebtedness
 
No Transaction Obligor has any Financial Indebtedness outstanding other than Permitted Financial Indebtedness.
 
19.28
Overseas companies
 
No Obligor has delivered particulars, whether in its name stated in the Finance Documents or any other name, of any UK Establishment to the Registrar of Companies as required under the Overseas Regulations or, if it has so registered, it has provided to the Lender sufficient details to enable an accurate search against it to be undertaken by the Lender at the Companies Registry.
 
19.29
Good title to assets
 
It has good, valid and marketable title to, or valid leases or licences of, and all appropriate Authorisations to use, the assets necessary to carry on its business as presently conducted.
 
19.30
Ownership
 
(a)
Each Borrower is the sole legal and beneficial owner of its Ship, its Earnings and its Insurances.
 
(b)
With effect on and from the date of its creation or intended creation, each Transaction Obligor will be the sole legal and beneficial owner of any asset that is the subject of any Transaction Security created or intended to be created by such Transaction Obligor.
 
(c)
The constitutional documents of each Transaction Obligor do not and could not restrict or inhibit any transfer of the shares of the Borrowers on creation or enforcement of the security conferred by the Security Documents.
 
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19.31
Centre of main interests and establishments
 
For the purposes of The Council of the European Union Regulation No. 2015/848 on Insolvency Proceedings (recast)(the “Regulation”), its centre of main interest (as that term is used in Article 3(1) of the Regulation) is situated at the address for communication stated in Schedule 1 (The Parties), Part A (The Obligors) and it has no “establishment” (as that term is used in Article 2(10) of the Regulation) in any other jurisdiction.
 
19.32
Place of business
 
No Transaction Obligor has a place of business in any country other than the Hellenic Republic and its head office functions are carried out in each case at the address for communication stated in Schedule 1 (The Parties) Part A (The Obligors).
 
19.33
No employee or pension arrangements
 
No Obligor has any employees or any liabilities under any pension scheme.
 
19.34
Sanctions
 
(a)
No Transaction Obligor nor any other member of the Group, nor any of their respective directors or officers nor, to the knowledge of any Transaction Obligor, any of their employees or persons acting on any of their behalf:
 

 (i)
is a Prohibited Person or is involved in any transaction through which it is likely to become a Prohibited Person;
 

 (ii)
is owned or controlled by, or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person;
 

 (iii)
owns or controls a Prohibited Person;
 

 (iv)
is in breach of applicable Sanctions; or
 

 (v)
is involved in or has received notice of or is aware of any claim, action, suit, proceeding or investigation against it with respect to Sanctions by any Sanctions Authority.
 
(b)
None of the Ships is a vessel with which any person is prohibited or restricted from dealing with under any Sanctions.
 
(c)
Each Transaction Obligor procures compliance by each member of the Group with applicable Sanctions.
 
(d)
No proceeds of any part of the Loan shall be made available directly or indirectly, to or for the benefit of a Prohibited Person that could result in the Lender being in violation of Sanctions or in a manner that would be contrary to Sanctions nor shall they be otherwise directly or indirectly applied in a manner or for a purpose prohibited by applicable Sanctions.
 
(e)
No member of the Group or any Affiliate of any member of the Group are the subject of any Sanctions or is subject to any restrictive measures, embargoes or prohibitions by a Sanctions Authority.
 
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19.35
Anti-bribery, anti-corruption and anti-money laundering
 
No Transaction Obligor nor any of its subsidiaries, directors or officers, beneficial owners or, to the best knowledge of such Transaction Obligor, any affiliate, agent or employee of it, has engaged in any activity or conduct which would violate any applicable anti-bribery, anti-corruption or anti-money laundering laws, regulations or rules in any applicable jurisdiction and each Transaction Obligor has instituted and maintains policies and procedures designed to prevent violation of such laws, regulations and rules.
 
19.36
US Tax Obligor
 
No Obligor is a US Tax Obligor.
 
19.37
No immunity
 
No Obligor, nor any of their assets are entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit attachment prior to judgement, execution or other enforcement).
 
19.38
Group Structure Chart
 
The Group Structure Chart delivered to the Lender pursuant to paragraph 1.8 of Part A of Schedule 2 (Conditions precedent) is true, complete and accurate in all material respects.
 
19.39
No other business
 
No Borrower shall engage in any business other than the ownership and operation of its Ship.
 
19.40
Repetition
 
The Repeating Representations are deemed to be made by each Obligor by reference to the facts and circumstances then existing on the date of each Utilisation Request and the first day of each Interest Period.
 
20.
INFORMATION UNDERTAKINGS
 
20.1
General
 
The undertakings in this Clause 20 (Information Undertakings) remain in force throughout the Security Period unless the Lender otherwise permits.
 
20.2
Financial statements
 
(a)
The Borrowers shall supply to the Lender:
 

 (i)
as soon as they become available, but in any event within 150 days after the end of each of their respective financial years their respective unaudited financial statements for that financial year; and
 

 (ii)
as soon as the same become available, but in any event within 90 days after the end of each quarter of each of their respective financial years their respective unaudited financial statements for that financial quarter year;
 
(b)
The Parent Guarantor shall supply to the Lender:
 
65

 (i)
as soon as they become available, but in any event within 150 days after the end of each of its respective financial years its respective consolidated audited financial statements for that financial year (including balance sheet and profit and loss statement); and
 

 (ii)
as soon as the same become available, but in any event within 90 days after the end of each quarter of each of its respective financial years its respective consolidated unaudited financial statements for that financial quarter year.
 
20.3
Compliance Certificate
 
(a)
The Parent Guarantor shall supply to the Lender, with each set of its consolidated financial statements (audited and unaudited) delivered pursuant to Clause 20.2 (Financial statements), a Compliance Certificate (including valuations showing the Market Value of the Ships and any other supporting schedules and evidence) setting out (in reasonable detail) computations as to compliance with Clause 21 (Financial Covenants) and Clause 25 (Security Cover) as at the date as at which those financial statements were drawn up.
 
(b)
Each Compliance Certificate shall be signed by the Chief Financial Officer of the Parent Guarantor.
 
20.4
Requirements as to financial statements
 
(a)
Each set of financial statements delivered by a Borrower pursuant to Clause 20.2 (Financial statements) shall be certified by an officer of the relevant company as giving a true and fair view (if audited) or fairly representing (if unaudited) its financial condition and operations as at the date as at which those financial statements were drawn up.
 
(b)
The Borrowers shall procure that each set of financial statements delivered pursuant to Clause 20.2 (Financial statements) is prepared using GAAP.
 
(c)
The Borrowers shall procure that each set of financial statements of an Obligor delivered pursuant to Clause 20.2 (Financial statements) is prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements for that Obligor unless, in relation to any set of financial statements, it notifies the Lender that there has been a change in GAAP, the accounting practices or reference periods and its auditors (or, if appropriate, the auditors of the Obligor) deliver to the Lender:
 

 (i)
a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which that Obligor’s Original Financial Statements were prepared; and
 

 (ii)
sufficient information, in form and substance as may be reasonably required by the Lender, to enable the Lender to determine whether Clause 21 (Financial Covenants) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and that Obligor’s Original Financial Statements.
 
Any reference in this Agreement to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.
 
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20.5
DAC6
 
(a)
In this Clause 20.5 (DAC6), “DAC6” means the Council Directive of 25 May 2018 (2018/822/EU) amending Directive 2011/16/EU or any replacement legislation applicable in the United Kingdom.
 
(b)
The Parent Guarantor shall supply to the Lender:
 

 (i)
promptly upon the making of such analysis or the obtaining of such advice, any analysis made or advice obtained on whether any transaction contemplated by the Transaction Documents or any transaction carried out (or to be carried out) in connection with any transaction contemplated by the Transaction Documents contains a hallmark as set out in Annex IV of DAC6; and
 

 (ii)
promptly upon the making of such reporting and to the extent permitted by applicable law and regulation, any reporting made to any governmental or taxation authority by or on behalf of any member of the Group or by any adviser to such member of the Group in relation to DAC6 or any law or regulation which implements DAC6 and any unique identification number issued by any governmental or taxation authority to which any such report has been made (if available).
 
20.6
Information: miscellaneous
 
Each Obligor shall and shall procure that each other Transaction Obligor shall supply to the Lender:
 
(a)
all documents dispatched by it to its shareholders (or any class of them) or its creditors generally at the same time as they are dispatched;
 
(b)
promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings or investigations (including proceedings or investigations relating to any alleged or actual breach of the ISM Code or of the ISPS Code) which are current, threatened or pending against any member of the Group, and which might, if adversely determined, have a Material Adverse Effect;
 
(c)
promptly upon becoming aware of them, the details of any judgment or order of a court, arbitral body or agency which is made against any member of the Group and which might have a Material Adverse Effect;
 
(d)
promptly, its constitutional documents where these have been amended or varied;
 
(e)
promptly, such further information and/or documents regarding:
 

 (i)
each Ship, goods transported on each Ship, its Earnings and its Insurances;
 

 (ii)
the Security Assets;
 

 (iii)
compliance of the Transaction Obligors with the terms of the Finance Documents;
 
67

 (iv)
the financial condition, business and operations of a Transaction Obligor;
 

 (v)
any press releases that are material for the client relationship;
 

 (vi)
(if available and when so requested by the Lender), consolidated projections of the Group and cash flow forecasts, as soon as they become available,
 
as the Lender may reasonably request; and
 
(f)
promptly, upon the request of the Lender and at the cost of the Borrowers, on or before 31st July of each calendar year, supply or procure the supply to the Lender of all information necessary in order for the Lender to comply with its obligations under the Poseidon Principles in respect of the preceding calendar year, including, without limitation, all ship fuel oil consumption data required to be collected and reported in accordance with Regulation 22A of Annex VI and any Statement of Compliance, in each case relating to the Ships for the preceding calendar year, and consents to the Lender obtaining such information from third parties, provided always that, for the avoidance of doubt, such information shall be “Confidential Information” for the purpose of Clause 42 (Confidential Information) but the Borrowers acknowledge that, in accordance with the Poseidon Principles, such information will form part of the information published regarding the relevant Lender’s portfolio climate alignment;
 
(g)
upon request of the Lender, all of the relevant data and information relating to the environmental, social and governance (i.e. sustainability) aspects of each Borrowers’ business model necessary to build the Lender’s environmental, social and governance rating of the Borrowers (including, without limitation, the ESG Presentation);
 
(h)
promptly, such further information and/or documents as the Lender may reasonably request so as to enable the Lender to comply with any laws applicable to it or as may be required by any regulatory authority including all information necessary in order for the Lender to carry out all relevant sanctions screenings and be satisfied it has complied with all applicable sanctions regulations including the Lender’s internal Sanction Compliance Procedure;
 
(i)
promptly following a request by the Lender, a statement from the Borrowers, the Parent Guarantor and/or any security provider confirming that the documents, data or information previously provided to the Lender as part of the conditions precedent relating to customer due diligence measures including the Lender’s AML/CTF procedure as well as compliance with sanctions regulations including the Lender’s Sanction Compliance Procedure is up-to-date or (as the case may be), such updated documents, data or information as requested by the Lender; and
 
(j)
promptly, such further information and/or documents as the Lender may reasonably request.
 
20.7
Notification of Default
 
(a)
Each Obligor shall notify the Lender of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).
 
(b)
Promptly upon a request by the Lender, each Borrower shall supply to the Lender a certificate signed by an officer on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).
 
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20.8
“Know your customer” checks
 
(a)
If:
 

 (i)
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
 

 (ii)
any change in the status of a Transaction Obligor (or of a Holding Company of a Transaction Obligor) (including, without limitation, a change of ownership of a Transaction Obligor or of a Holding Company of a Transaction Obligor) after the date of this Agreement; or
 

 (iii)
a proposed assignment or transfer by the Lender of any of its rights and obligations under this Agreement,
 
obliges the Lender (or, in the case of paragraph (a) above, any prospective assignee) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Lender (for itself or, in the case of the event described in paragraph (iii) above, on behalf of any prospective assignee) in order for the Lender or, in the case of the event described in paragraph (iii) above, any prospective assignee to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
 
(b)
Each Obligor shall promptly upon the request of the Lender supply, or procure the supply of, such documentation and information as the Lender reasonably deems necessary or advisable to comply with customer due diligence as required by the Danish Consolidating Act no. 1022 of 13th August 2013 on Measures to Prevent Money Laundering and Financing of Terrorism (as amended and supplemented) including, without limitation:
 

 (i)
a copy of the Group Structure Chart covering the Borrowers, the Parent Guarantor and any other Transaction Obligor (the “Customers”) evidencing the complete ownership and control structure of the Customers including the ownership stake belonging to beneficial owners (unbroken chain of entities from the Customers to beneficial owner(s)) meaning the natural person(s) who ultimately owns or controls through direct or indirect ownership of more than 20 per cent. of the shares or voting rights in the Customers or through control via other means and/or the natural person(s) on whose behalf a transaction or activity is being conducted (except for beneficial owners in companies listed on a regulated market that is subject to disclosure requirements consistent with EU law or equivalent international standards, provided that if only part of such companies’ shares are listed, the beneficial owners, if any, of such remaining unlisted shares shall be subject to the disclosure requirements) or, if no such person(s) are identified or if there is any doubt that the person(s) identified are the beneficial owner(s), in addition to the so identified beneficial owner(s), the natural person(s) who hold the position of senior management officials in the Parent Guarantor;
 

 (ii)
copies of proof of identity and country of residence of the Customers and any beneficial owner(s) (except for beneficial owners in listed companies as described in sub-paragraph (i) above) or, if no such person(s) are identified or if there is any doubt that the person(s) identified are the beneficial owner(s), in addition to the so identified beneficial owner(s), the natural person(s) who hold the position of senior management officials in the Parent Guarantor, shall be verified in the following manner:
 
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 (A)
in relation to natural persons (e.g. beneficial owner(s) or senior management officials), proof of identity shall include name, date of birth and civil registration number, if applicable, verified on the basis of copies of passport or driver’s license, other government issued documents, lawyer’s statements or a legal opinion;
 

 (B)
in relation to legal persons (e.g. Customers and/or any listed parent company), proof of identity shall include registered name, country of incorporation, business/company registration number, tax identification number (TIN), if available, legal entity identifier (LEI), if available, or similar government issued identification number, transcript from companies house or companies registry, Articles of Association and Memorandum of Association, or other government issued documents. Alternatively, lawyer’s statements, legal opinion or confirmation from the registered office of the Customer or listed parent company confirming name or business identification number;
 

 (iii)
Proof of identity of the signatory shall be verified on the basis of passport, identity card issued by a governmental authority or driver’s license in relation to the signing of authority of any person executing a document on behalf of the Customers;
 

 (iv)
copies of any powers of attorney, documentation evidencing general authority or legal opinion in relation to the signing authority of any attorney-in-fact executing a document on behalf of the Customers. The proof of identity of any attorney-in-fact shall be verified on the basis of passport, identity card issued by a governmental authority or driver’s license. Alternatively, if the attorney-in-fact is an attorney-at-law qualified in a EU/EEA member state, a print-out of the webpage of the relevant law firm with whom the attorney-at-law is employed evidencing such employment; and
 

 (v)
a statement from the Customers confirming that the documents, data or information previously provided to the Lender under paragraphs (i), (ii)(i), (iii) and (iv) above is up-to-date, or, alternatively, any relevant updated documents, data or information.
 
(c)
The Borrower shall supply or procure to supply, upon the request of the Lender, all information necessary in order for the Lender to carry out all relevant sanctions screenings and be satisfied it has complied with all applicable sanctions regulations including the Lender’s internal Sanction Compliance Procedure and such other documentation and information as the Lender deems necessary and/or advisable in order to comply with any law and/or regulation regarding money laundering and/or the financing of terrorist activities (including, without limitation, such documentation and information as the Lender deems necessary and/or advisable in order to comply with customer due diligence measures for purposes of AML/CTF checks as required by the Danish Act on Measures to Prevent Money Laundering and Financing of Terrorism).
 
21.
FINANCIAL COVENANTS
 
21.1
Parent Guarantor’s financial covenants:
 
The Parent Guarantor shall ensure that at all times:
 
(a)
it shall maintain Cash in an amount not less than the product of (i) the number of Fleet Vessels and (ii) $500,000; and
 
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(b)
the Leverage Ratio shall not exceed:
 

 (i)
for the period ending on 29 June 2023 (such date inclusive), 85 per cent.; and
 

 (ii)
thereafter, 70 per cent.
 
(c)
The financial covenants contained in this Clause 21 (Financial Covenants) shall be tested quarterly on each Security Cover Testing Date, on the basis of the account statements provided under paragraph (b) of Clause 20.2 (Financial statements) and shall be confirmed in the relevant Compliance Certificate referred to in Clause 20.3 (Compliance Certificate).
 
21.2
Borrowers’ financial covenants
 
(a)
Each Borrower shall, for the period commencing on the Utilisation Date in respect of the relevant Tranche being utilised to finance the Ship owned by that Borrower and ending on the date on which that Tranche has been repaid in full, maintain in its Retention Account a minimum liquidity amount of not less than (i) in the case of Borrower A and Borrower B, $650,000 and (ii) in the case of Borrower C, $700,000 (the “Minimum Liquidity Amount”) free of any Security, other than Security created in favour of the Lender.
 
(b)
On any Security Cover Testing Date falling on a date 18 Months after the Utilisation Date relating to each of Tranche A and Tranche B, on which the Loan to Value Ratio in respect of Ship A or Ship B is less 50 per cent. an amount of $150,000 may, at the Borrowers’ request be released from the Retention Account in relation to that Ship to the Borrowers.  In the event that at any time after such release the Loan to Value Ratio is equal to or above 50 per cent. the Borrowers shall ensure that the Minimum Liquidity Amount of $650,000 is restored in the relevant Retention Account.
 
(c)
For the purposes of this Clause 21.2 (Borrowers’ financial covenants), “Loan to Value Ratio” means, in respect of each Ship, the ratio of the Tranche relating to such Ship expressed as a percentage of the Market Value of such Ship.
 
(d)
The financial covenants contained in this Clause 21 (Financial Covenants) shall be tested quarterly on each Security Cover Testing Date, on the basis of the account statements provided under paragraph (b) of Clause 20.2 (Financial statements) and shall be confirmed in the relevant Compliance Certificate referred to in Clause 20.3 (Compliance Certificate).
 
21.3
Most favoured nation
 
The Parent Guarantor undertakes to procure that the Lender shall receive equal treatment with creditors under any other financing which the Parent Guarantor or any of its Subsidiaries have entered or will enter into in relation to any financial or other covenant which the Parent Guarantor provides. Accordingly, should the Parent Guarantor provide to any other creditor additional or more favourable financial or other covenants than those which the Lender has been provided under this or any other Finance Document, the Parent Guarantor shall promptly notify the Lender in writing and give to the Lender a reasonably detailed description of those financial or other covenants and shall, within 15 Business Days from notifying the Lender, enter into such documentation supplemental to the Finance Documents as the Lender may require in order to achieve parity with the lender or (as applicable) lenders under such other financing.
 
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22.
GENERAL UNDERTAKINGS
 
22.1
General
 
The undertakings in this Clause 22 (General Undertakings) remain in force throughout the Security Period except as the Lender may otherwise permit.
 
22.2
Authorisations
 
Each Obligor shall, and shall procure that each other Transaction Obligor will, promptly:
 
(a)
obtain, comply with and do all that is necessary to maintain in full force and effect;
 
(b)
supply certified copies to the Lender of,
 
any Authorisation required under any law or regulation of a Relevant Jurisdiction or the state of the Approved Flag at any time of each Ship to enable it to:
 

 (i)
perform its obligations under the Transaction Documents to which it is a party;
 

 (ii)
ensure the legality, validity, enforceability or admissibility in evidence in any Relevant Jurisdiction or in the state of the Approved Flag at any time of each Ship of any Transaction Document to which it is a party; and
 

 (iii)
own and operate each Ship (in the case of the Borrowers).
 
22.3
Compliance with laws
 
Each Obligor shall, and each Obligor shall procure that each other Transaction Obligor which is a member of the Group will, comply in all respects with all laws and regulations to which it may be subject and shall ensure that no Transaction Obligor which is a member of the Group shall engage or conspire to engage in any activity or conduct which would violate any applicable anti-bribery, anti-corruption or anti-money laundering laws, regulations or rules in any applicable jurisdiction.
 
22.4
Environmental compliance
 
Each Obligor shall, and shall procure that each other Transaction Obligor and each member of the Group will,:
 
(a)
comply with all Environmental Laws;
 
(b)
obtain, maintain and ensure compliance with all requisite Environmental Approvals;
 
(c)
implement procedures to monitor compliance with and to prevent liability under any Environmental Law,
 
where failure to do so has or is reasonably likely to have a Material Adverse Effect.
 
22.5
Environmental Claims
 
Each Obligor shall, and shall procure that each other Transaction Obligor will, promptly upon becoming aware of the same, inform the Lender in writing of:
 
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(a)
any Environmental Claim against any member of the Group which is current, pending or threatened; and
 
(b)
any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the Group,
 
where the claim, if determined against that member of the Group, has or is reasonably likely to have a Material Adverse Effect.
 
22.6
Taxation
 
(a)
Each Obligor shall, and shall procure that each other Transaction Obligor will, pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:
 

 (i)
such payment is being contested in good faith;
 

 (ii)
adequate reserves are maintained for those Taxes and the costs required to contest them and both have been disclosed in its latest financial statements delivered to the Lender under Clause 20.2 (Financial statements); and
 

 (iii)
such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.
 
(b)
No Obligor shall change its residence for Tax purposes.
 
22.7
Overseas companies
 
Each Obligor shall, and shall procure that each other Transaction Obligor will, promptly inform the Lender if it delivers to the Registrar particulars required under the Overseas Regulations of any UK Establishment and it shall comply with any directions given to it by the Lender regarding the recording of any Transaction Security on the register which it is required to maintain under The Overseas Companies (Execution of Documents and Registration of Charges) Regulations 2009.
 
22.8
No change to centre of main interests
 
No Obligor shall change the location of its centre of main interest (as that term is used in Article 3(1) of the Regulation) from that stated in relation to it in Clause 19.31 (Centre of main interests and establishments) and it will create no “establishment” (as that term is used in Article 2(10) of the Regulation) in any other jurisdiction.
 
22.9
Pari passu ranking
 
Each Obligor shall, and shall procure that each other Transaction Obligor will, ensure that at all times any unsecured and unsubordinated claims of the Lender against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.
 
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22.10
Title
 
(a)
Each Borrower shall hold the legal title to, and own the entire beneficial interest in its Ship, its Earnings and its Insurances.
 
(b)
With effect on and from its creation or intended creation, each Obligor shall hold the legal title to, and own the entire beneficial interest in any other assets the subject of any Transaction Security created or intended to be created by such Obligor.
 
22.11
Negative pledge
 
(a)
No Obligor shall create or permit to subsist any Security over any of its assets which are the subject of the Security created or intended to be created by the Finance Documents.
 
(b)
No Borrower shall, and the Borrowers shall procure that no other Transaction Obligor (other than the Approved Managers and the Parent Guarantor) will:
 

 (i)
sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor;
 

 (ii)
sell, transfer or otherwise dispose of any of its receivables on recourse terms;
 

 (iii)
enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or
 

 (iv)
enter into any other preferential arrangement having a similar effect,
 
in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.
 
(c)
Paragraphs (a) and (b) above do not apply to any Permitted Security.
 
22.12
Disposals
 
(a)
No Borrower shall enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset (including, without limitation any Ship, its Earnings or its Insurances).
 
(b)
The Parent Guarantor shall not enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose all or substantially all of its assets.
 
(c)
Paragraph (a) above does not apply to any Charter as all Charters are subject to Clause 24.16 (Restrictions on chartering, appointment of managers etc.).
 
22.13
Merger
 
(a)
No Borrower will enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction.
 
(b)
The Parent Guarantor will not enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction, unless after such amalgamation, demerger, merger, consolidation or corporate reconstruction (i) the Parent Guarantor remains the surviving entity and (ii) the financial covenants set out in Clause 21 (Financial Covenants) are complied with.
 
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22.14
Change of business
 
(a)
The Parent Guarantor shall procure that no substantial change is made to the general nature of the business of the Parent Guarantor or the Group from that carried on at the date of this Agreement or (as applicable) the Effective Date.
 
(b)
No Borrower shall engage in any business other than the ownership and operation of its Ship.
 
22.15
Financial Indebtedness
 
No Borrower shall incur or permit to be outstanding any Financial Indebtedness except Permitted Financial Indebtedness.
 
22.16
Expenditure and transfer of turnover
 
(a)
No Borrower shall incur any expenditure, except for expenditure reasonably incurred in the ordinary course of owning, operating, insuring, maintaining and repairing its Ship.
 
(b)
No Obligor will permit a leakage to the effect that any assets, turnover and/or income of that Obligor will be transferred to any Affiliate or any third party.
 
22.17
Share capital
 
No Borrower shall:
 
(a)
purchase, cancel or redeem any of its issued shares;
 
(b)
increase or reduce the number of shares it is authorised to issue;
 
(c)
issue any further shares except to the Parent Guarantor and provided such new shares are made subject to the terms of the Shares Security applicable to that Borrower immediately upon the issue of such new shares in a manner satisfactory to the Lender and the terms of that Shares Security are complied with;
 
(d)
appoint any further director or officer of that Borrower (unless the provisions of the Shares Security applicable to that Borrower are complied with).
 
22.18
Dividends
 
An Obligor may:
 
(a)
declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital);
 
(b)
repay or distribute any dividend or share premium reserve;
 
(c)
pay any management, advisory or other fee to or to the order of any of its shareholders; or
 
(d)
redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so,
 
provided that:
 

 (i)
no Event of Default has occurred and is continuing; and
 
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 (ii)
none of the above would result in the occurrence of an Event of Default; and
 

 (iii)
the Security Cover Ratio required under Clause 25.1 (Minimum required security cover) is complied with; and
 

 (iv)
the Obligors are in compliance with the provisions in clause 21 (Financial covenants).
 
22.19
Other transactions
 
No Borrower shall:
 
(a)
be the creditor in respect of any loan or any form of credit to any person other than another Obligor and where such loan or form of credit is Permitted Financial Indebtedness;
 
(b)
give or allow to be outstanding any guarantee or indemnity to or for the benefit of any person in respect of any obligation of any other person or enter into any document under which that Borrower assumes any liability of any other person other than any guarantee or indemnity given under the Finance Documents;
 
(c)
enter into any material agreement (including, without limitation, any joint ventures or investments) other than:
 

 (i)
the Transaction Documents;
 

 (ii)
any other agreement expressly allowed under any other term of this Agreement (including, for the avoidance of any doubt, agreements in the ordinary course of their business); and
 
(d)
enter into any transaction on terms which are, in any respect, less favourable to that Obligor than those which it could obtain in a bargain made at arms’ length;
 
(e)
acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks;
 
(f)
amend or terminate any material agreement to which it is a party; or
 
(g)
amend its constitutional documents.
 
22.20
Unlawfulness, invalidity and ranking; Security imperilled
 
No Obligor shall, and the Obligors shall procure that no other Transaction Obligor will, do (or fail to do) or cause or permit another person to do (or omit to do) anything which is likely to:
 
(a)
make it unlawful for a Transaction Obligor to perform any of its obligations under the Transaction Documents;
 
(b)
cause any obligation of a Transaction Obligor under the Transaction Documents to cease to be legal, valid, binding or enforceable;
 
(c)
cause any Transaction Document to cease to be in full force and effect;
 
(d)
cause any Transaction Security to rank after, or lose its priority to, any other Security; and
 
(e)
imperil or jeopardise the Transaction Security.
 
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22.21
Sanctions
 
(a)
No Transaction Obligor, nor any of their respective directors, officers or employees will (and the Obligors shall procure that no other member of the Group will):
 

 (i)
directly or indirectly, make any proceeds of the Loans available to, or for the benefit of, a Prohibited Person or permit or authorise any such proceeds to be applied in a manner or for a purpose prohibited by Sanctions; and/or
 

 (ii)
engage in any activities, business or transactions that could result in it or any other member of the Group or Lender being designated as a Prohibited Person; and/or
 

 (iii)
directly or indirectly fund all or part of any payment or repayment under the Facility out of proceeds derived from transactions which would be prohibited by Sanctions or by sanctions policies of the Lender or which would otherwise cause the Lender or other national under the jurisdiction of a Sanctions Authority to be in breach of Sanctions.
 
(b)
The Transaction Obligors will not receive any payment from a Prohibited Person.
 
(c)
Each Transaction Obligor shall (and the Obligors shall procure that each other member of the Group will) comply in all respects with applicable Sanctions.
 
(d)
The Transaction Obligors shall institute and maintain policies and procedures designed to promote and achieve compliance by each member of the Group with applicable Sanctions.
 
22.22
Financial years
 
No Obligor shall change the duration of any of its financial years.
 
22.23
No change of domicile
 
No Obligor shall change its Original Jurisdiction or its place of domicile.
 
22.24
NASDAQ listing
 
The Parent Guarantor shall maintain its listing on the NASDAQ Stock Exchange or any other stock exchange acceptable to the Lender.
 
22.25
Further assurance
 
(a)
Each Obligor shall, and shall procure that each other Transaction Obligor will, promptly, and in any event within the time period specified by the Lender do all such acts (including procuring or arranging any registration, notarisation or authentication or the giving of any notice) or execute or procure execution of all such documents (including assignments, transfers, mortgages, charges, notices, instructions, acknowledgments, proxies and powers of attorney), as the Lender may specify (and in such form as the Lender may require in favour of the Lender or its nominee(s)):
 

 (i)
to create, perfect, vest in favour of the Lender or protect the priority of the Security or any right of any kind created or intended to be created under or evidenced by the Finance Documents (which may include the execution of a mortgage, charge, assignment or other Security over all or any of the assets which are, or are intended to be, the subject of the Transaction Security) or for the exercise of any rights, powers and remedies of the Lender or any Receiver or Delegate provided by or pursuant to the Finance Documents or by law;
 
77

 (ii)
to confer on the Lender Security over any property and assets of that Transaction Obligor located in any jurisdiction equivalent or similar to the Security intended to be conferred by or pursuant to the Finance Documents;
 

 (iii)
to facilitate or expedite the realisation and/or sale of, the transfer of title to or the grant of, any interest in or right relating to the assets which are, or are intended to be, the subject of the Transaction Security or to exercise any power specified in any Finance Document in respect of which the Security has become enforceable; and/or
 

 (iv)
to enable or assist the Lender to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to any item of the Security Property.
 
(b)
Each Obligor shall, and shall procure that each other Transaction Obligor will, take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred on the Lender by or pursuant to the Finance Documents.
 
(c)
At the same time as an Obligor delivers to the Lender any document executed by itself or another Transaction Obligor pursuant to this Clause 22.25 (Further assurance), that Obligor shall deliver, or shall procure that such other Transaction Obligor will deliver, to the Lender a certificate signed by an oficer of that Obligor’s or Transaction Obligor which shall:
 

 (i)
set out the text of a resolution of that Obligor’s or Transaction Obligor’s directors specifically authorising the execution of the document specified by the Lender; and
 

 (ii)
state that either the resolution was duly passed at a meeting of the directors validly convened and held, throughout which a quorum of directors entitled to vote on the resolution was present, or that the resolution has been signed by all the directors of that Obligor or Transaction Obligor and is valid under that Obligor’s or Transaction Obligor’s articles of association or other constitutional documents.
 
23.
INSURANCE UNDERTAKINGS
 
23.1
General
 
The undertakings in this Clause 23 (Insurance Undertakings) remain in force from the date of this Agreement or (as applicable) the Effective Date throughout the rest of the Security Period except as the Lender may otherwise permit.
 
23.2
Maintenance of obligatory insurances
 
Each Borrower shall keep the Ship owned by it insured at its expense against:
 
(a)
fire and usual marine risks (including hull and machinery and excess risks);
 
(b)
war risks (including London blocking and trapping or similar arrangements and acts of terrorism and piracy);
 
(c)
protection and indemnity risks; and
 
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(d)
any other risks against which the Lender considers, having regard to practices and other circumstances prevailing at the relevant time, it would be reasonable for that Borrower to insure and which are specified by the Lender by the notice to that Borrower.
 
23.3
Terms of obligatory insurances
 
Each Borrower shall effect such insurances:
 
(a)
in dollars;
 
(b)
in the case of hull and machinery risks (but excluding hull interest and excess risks) in an amount equal to 80 per cent. of the Market Value of that Ship;
 
(c)
in the case of hull and machinery risks plus freight interest and hull interest and any other marine risks such as increased value and excess risks, in an amount on an agreed value basis at least equal to the greater of:
 

 (i)
the Market Value of that Ship; and
 

 (ii)
an amount which equals 120 per cent. of the Tranche relating to that Ship then outstanding;
 
(d)
in the case of war risks (extended to cover piracy and terrorism if those risks are excluded from the fire and usual marine risks cover and to cover war protection and indemnity and crew liability), in an amount on an agreed value basis of at least equal to the greater of:
 

 (i)
the Market Value of that Ship; and
 

 (ii)
an amount which equals 120 per cent. of the Tranche relating to that Ship then outstanding;
 
(e)
in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine insurance market (for the time being $1,000,000,000);
 
(f)
in the case of protection and indemnity risks, in respect of the full tonnage of its Ship;
 
(g)
on approved terms (based on Nordic Marine Insurance Plan, Institute Time Clauses Terms or other recognised marine insurance terms); and
 
(h)
through Approved Brokers and with approved insurance companies and/or underwriters with minimum A- (S&P) rating or A3 (Moody’s) rating or A- (AM Best) rating, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.
 
23.4
Further protections for the Lender
 
(a)
In addition to the terms set out in Clause 23.3 (Terms of obligatory insurances), each Borrower shall procure that the obligatory insurances effected by it shall:
 

 (i)
subject always to paragraph (iii), name that Borrower as the sole named insured unless the capacity of every other named insured or co-insured is included on the policies (e.g. as owner, manager, crew manager, holding company etc.) and the interest of such other named insured or co-insured is limited:
 
79

 (A)
in respect of any obligatory insurances for hull and machinery and war risks;
 

 (1)
to any provable out-of-pocket expenses that it has incurred and which form part of any recoverable claim on underwriters; and
 

 (2)
to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against it); and
 

 (ii)
in respect of any obligatory insurances for protection and indemnity risks, to any recoveries it is entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against it;
 
and every other named insured has undertaken in writing to the Lender (in such form as it requires) that any deductible shall be apportioned between that Borrower and every other named insured in proportion to the gross claims made or paid by each of them and that it shall do all things necessary and provide all documents, evidence and information to enable the Lender to collect or recover any moneys which at any time become payable in respect of the obligatory insurances;
 

 (iii)
whenever the Lender requires, name (or be amended to name) the Lender as additional named insured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Lender, but without the Lender being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;
 

 (iv)
name the Lender as loss payee with such directions for payment as the Lender may specify;
 

 (v)
provide that all payments by or on behalf of the insurers under the obligatory insurances to the Lender shall be made without set off, counterclaim or deductions or condition whatsoever and include waiver of lien for any fleet premiums;
 

 (vi)
provide that the obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Lender; and
 

 (vii)
provide that the Lender may make proof of loss if that Borrower fails to do so.
 
(b)
In the case the relevant obligatory insurances form part of a fleet cover, the Borrowers shall procure that, the brokers, underwriters, protection and indemnity and/or war risks associations (but excluding P&I insurers) shall undertake to the Lender that they shall neither set off against any claim payable by the insurers in respect of the Ships any premiums or calls due in respect of other vessels forming part of such fleet cover or in respect of other insurances forming part of such fleet cover nor cancel any of the relevant obligatory insurances by reason of non-payment of premiums or calls due in respect of other vessels forming part of such fleet cover or in respect of other insurances forming part of such fleet cover.
 
23.5
Renewal of obligatory insurances
 
Each Borrower shall:
 
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(a)
at least 21 days before the expiry of any obligatory insurance effected by it:
 

 (i)
notify the Lender of the Approved Brokers (or other insurers) and any protection and indemnity or war risks association through or with which it proposes to renew that obligatory insurance and of the proposed terms of renewal; and
 

 (ii)
obtain the Lender’s approval to the matters referred to in sub-paragraph (i) above;
 
(b)
at least seven days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Lender’s approval pursuant to paragraph (a) above; and
 
(c)
procure that the Approved Brokers and/or the approved war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Lender in writing of the terms and conditions of the renewal.
 
23.6
Copies of policies; letters of undertaking
 
Each Borrower shall ensure that the Approved Brokers provide the Lender with:
 
(a)
pro forma copies of all policies relating to the obligatory insurances which they are to effect or renew; and
 
(b)
copies of all cover notes in form acceptable to the Lender;
 
(c)
a letter or letters of undertaking in a form required by the Lender and including undertakings by the Approved Brokers that:
 

 (i)
they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 23.4 (Further protections for the Lender);
 

 (ii)
they will hold such policies, and the benefit of such insurances, to the order of the Lender in accordance with such loss payable clause;
 

 (iii)
they will advise the Lender immediately of any material change to the terms of the obligatory insurances;
 

 (iv)
they will, if they have not received notice of renewal instructions from the relevant Borrower or its agents, notify the Lender not less than seven days before the expiry of the obligatory insurances;
 

 (v)
if they receive instructions to renew the obligatory insurances, they will promptly notify the Lender of the terms of the instructions;
 

 (vi)
they will not set off against any sum recoverable in respect of a claim relating to the Ship owned by that Borrower under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of that Ship or otherwise, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts and they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts; and
 
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 (vii)
they will arrange for a separate policy to be issued in respect of the Ship owned by that Borrower forthwith upon being so requested by the Lender.
 
23.7
Copies of certificates of entry
 
Each Borrower shall ensure that any protection and indemnity and/or war risks associations in which the Ship owned by it is entered provide the Lender with:
 
(a)
a copy of the certificate of entry for that Ship;
 
(b)
copies of all cover notes in form acceptable to the Lender;
 
(c)
a letter or letters of undertaking in such form as may be required by the Lender; and
 
(d)
a copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to that Ship.
 
23.8
Deposit of original policies
 
Each Borrower shall ensure that all policies relating to obligatory insurances effected by it are deposited with the Approved Brokers through which the insurances are effected or renewed.
 
23.9
Payment of premiums
 
Each Borrower shall punctually pay all premiums or other sums payable in respect of the obligatory insurances effected by it and produce all relevant receipts when so required by the Lender.
 
23.10
Guarantees
 
Each Borrower shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.
 
23.11
Compliance with terms of insurances
 
(a)
No Borrower shall do or omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part.
 
(b)
Without limiting paragraph (a) above, each Borrower shall:
 

 (i)
take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in sub-paragraph (iii) of paragraph (c) of Clause 23.6 (Copies of policies; letters of undertaking)) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Lender has not given its prior approval;
 

 (ii)
not make any changes relating to the classification or classification society or manager or operator of the Ship owned by it approved by the underwriters of the obligatory insurances;
 

 (iii)
make (and promptly supply copies to the Lender of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Ship owned by it is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and
 
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 (iv)
not employ the Ship owned by it, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.
 
23.12
Alteration to terms of insurances
 
No Borrower shall make or agree to any alteration to the terms of any obligatory insurance or waive any right relating to any obligatory insurance.
 
23.13
Settlement of claims
 
Each Borrower shall:
 
(a)
not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty; and
 
(b)
do all things necessary and provide all documents, evidence and information to enable the Lender to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
 
23.14
Provision of copies of communications
 
Each Borrower shall provide the Lender, at the time of each such communication, with copies of all written communications (other than communications of an entirely routine nature)  between that Borrower and:
 
(a)
the Approved Brokers;
 
(b)
the approved protection and indemnity and/or war risks associations; and
 
(c)
the approved insurance companies and/or underwriters,
 
which relate directly or indirectly to:
 

 (i)
that Borrower’s obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
 

 (ii)
any credit arrangements made between that Borrower and any of the persons referred to in paragraphs (a) or (b) above relating wholly or partly to the effecting or maintenance of the obligatory insurances.
 
23.15
Provision of information
 
Each Borrower shall promptly provide the Lender (or any persons which it may designate) with any information which the Lender (or any such designated person) requests for the purpose of:
 
(a)
obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or
 
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(b)
effecting, maintaining or renewing any such insurances as are referred to in Clause 23.16 (Mortgagee’s interest and, additional perils insurances) or dealing with or considering any matters relating to any such insurances,
 
and the Borrowers shall, forthwith upon demand, indemnify the Lender in respect of all fees and other expenses incurred by or for the account of the Lender in connection with any such report as is referred to in paragraph (a) above.
 
23.16
Mortgagee’s interest and additional perils insurances
 
(a)
The Lender shall be entitled from time to time to effect, maintain and renew a mortgagee’s interest marine insurance and a mortgagee’s interest additional perils insurance in an amount of not less than 110 per cent. of the Loan, on such terms, through such insurers and generally in such manner as the Lender may from time to time consider appropriate.
 
(b)
The Borrowers shall upon demand fully indemnify the Lender in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any insurance referred to in paragraph (a) above or dealing with, or considering, any matter arising out of any such insurance.
 
(c)
The Lender shall be entitled to disclose all necessary information for the purpose of effecting the insurance cover under paragraph (b) above, including without limitation, the name of the Ships, the IMO number of the Ships and the outstanding amount of the Secured Liabilities.
 
23.17
Review of insurance requirements
 
The Lender shall be entitled to review the requirements of this Clause 23 (Insurance Undertakings) from time to time in order to take account of any changes in circumstances after the date of this Agreement which are, in the opinion of the Lender, significant and capable of affecting the relevant Borrower or its Ship and its or their insurance (including, without limitation, changes in the availability or the cost of insurance coverage or the risks to which that Borrower may be subject).
 
23.18
Modification of insurance requirements
 
The Lender shall notify the relevant Borrower of any proposed modification under Clause 23.17 (Review of insurance requirements) to the requirements of this Clause 23 (Insurance Undertakings) which the Lender considers appropriate in the circumstances, and such modification shall take effect within 10 Business Days’ from the date it is notified in writing to the relevant Borrower as an amendment to this Clause 23 (Insurance Undertakings) and shall bind the Borrowers accordingly.
 
23.19
Insurance opinion
 
The Lender shall have the right to have the Insurances in relation to a Ship reviewed and inspected (i) once annually unless there is an Event of Default whereby the Lender shall have the right to have the Insurances reviewed as often as deemed required and (ii) at all other times concurrently with the renewal of any Insurances, by an insurance consultant appointed by the Lender, at the cost of the Borrowers.
 
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24.
GENERAL SHIP UNDERTAKINGS
 
24.1
General
 
The undertakings in this Clause 24 (General Ship Undertakings) remain in force on and from the date of this Agreement or (as applicable) the Effective Date and throughout the rest of the Security Period except as the Lender may otherwise permit.
 
24.2
Ships’ names and registration
 
Each Borrower shall, in respect of the Ship owned by it:
 
(a)
keep that Ship registered in its name under the Approved Flag from time to time at its port of registration;
 
(b)
not do or allow to be done anything as a result of which such registration might be suspended, cancelled or imperilled;
 
(c)
not enter into any dual flagging arrangement in respect of that Ship; and
 
(d)
not change the name of that Ship,
 
provided that any agreed change of name or the Approved flag of a Ship shall be subject to:
 

 (i)
that Ship remaining subject to Security securing the Secured Liabilities created by a first priority or preferred ship mortgage on that Ship and, if appropriate, a first priority deed of covenant collateral to that mortgage (or equivalent first priority Security) on substantially the same terms as the Mortgage on that Ship and on such other terms and in such other form as the Lender shall approve or require; and
 

 (ii)
the execution of such other documentation amending and supplementing the Finance Documents as the Lender shall approve or require.
 
24.3
Repair and classification
 
Each Borrower shall keep the Ship owned by it in a good and safe condition and state of repair:
 
(a)
consistent with first class ship ownership and management practice;
 
(b)
classed with an Approved Classification Society;
 
(c)
so as to maintain the Approved Classification free of material overdue recommendations and/or conditions affecting that Ship’s class or adverse notations; and
 
(d)
so as to ensure that its Market Value is not materially reduced.
 
24.4
Classification society undertaking
 
Each Borrower shall, in respect of the Ship owned by it, instruct the relevant Approved Classification Society (and procure that the Approved Classification Society undertakes with the Lender):
 
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(a)
to send to the Lender, following receipt of a written request from the Lender, certified true copies of all original class records held by the Approved Classification Society in relation to that Ship;
 
(b)
to allow the Lender (or its agents), at any time and from time to time, to inspect the original class and related records of that Borrower and that Ship at the offices of the Approved Classification Society and to take copies of them;
 
(c)
to notify the Lender immediately in writing if the Approved Classification Society:
 

 (i)
receives notification from that Borrower or any person that that Ship’s Approved Classification Society is to be changed; or
 

 (ii)
becomes aware of any facts or matters which may result in or have resulted in a change, suspension, discontinuance, withdrawal or expiry of that Ship’s class under the rules or terms and conditions of that Borrower or that Ship’s membership of the Approved Classification Society;
 
(d)
following receipt of a written request from the Lender:
 

 (i)
to confirm that that Borrower is not in default of any of its contractual obligations or liabilities to the Approved Classification Society, including confirmation that it has paid in full all fees or other charges due and payable to the Approved Classification Society; or
 

 (ii)
to confirm that that Borrower is in default of any of its contractual obligations or liabilities to the Approved Classification Society, to specify to the Lender in reasonable detail the facts and circumstances of such default, the consequences of such default, and any remedy period agreed or allowed by the Approved Classification Society.
 
24.5
Modifications
 
No Borrower shall make any modification or repairs to, or replacement of, any Ship or equipment installed on it which would or might materially alter the structure, type or performance characteristics of that Ship or materially reduce its value.
 
24.6
Removal and installation of parts
 
(a)
Subject to paragraph (b) below, no Borrower shall remove any material part of any Ship, or any item of equipment installed on any Ship unless:
 

 (i)
the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed;
 

 (ii)
the replacement part or item is free from any Security in favour of any person other than the Lender; and
 

 (iii)
the replacement part or item becomes, on installation on that Ship, the property of that Borrower and subject to the security constituted by the Mortgage on that Ship.
 
(b)
A Borrower may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship owned by that Borrower.
 
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24.7
Surveys
 
Each Borrower shall submit the Ship owned by it regularly to all periodic or other surveys which may be required for classification purposes and, if so required by the Lender, provide the Lender, with copies of all survey reports.
 
24.8
Inspection
 
Each Borrower shall permit the Lender (acting through surveyors or other persons appointed by it for that purpose) to board the Ship owned by it upon the Lender’s request to inspect, at all reasonable times upon reasonable notice and without interfering with the Vessel’s schedule and Provided that no Event of Default has occurred, its condition and documents (including, without limitation, class records) or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspection, at the Borrowers’ expenses, Provided that if no Event of Default has occurred, the Borrowers shall pay the expenses for one inspection per calendar year in respect of each Ship.
 
24.9
Prevention of and release from arrest
 
(a)
Each Borrower shall, in respect of the Ship owned by it, promptly discharge:
 

 (i)
all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against that Ship, its Earnings or its Insurances;
 

 (ii)
all Taxes, dues and other amounts charged in respect of that Ship, its Earnings or its Insurances; and
 

 (iii)
all other outgoings whatsoever in respect of that Ship, its Earnings or its Insurances.
 
(b)
Each Borrower shall, immediately upon receiving notice of the arrest of the Ship owned by it or of its detention in exercise or purported exercise of any lien or claim, take all steps necessary to procure its release by providing bail or otherwise as the circumstances may require.
 
24.10
Compliance with laws etc.
 
Each Borrower shall:
 
(a)
comply, or procure compliance with all laws or regulations:
 

 (i)
relating to its business generally; and
 

 (ii)
relating to the Ship owned by it, its ownership, employment, operation, management and registration,
 
including, but not limited to:
 

 (A)
the ISM Code;
 

 (B)
the ISPS Code;
 

 (C)
all Environmental Laws;
 

 (D)
all Sanctions; and
 
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 (E)
the laws of the Approved Flag; and
 
(b)
obtain, comply with and do all that is necessary to maintain in full force and effect any Environmental Approvals; and
 
(c)
without limiting paragraph (a) above, not employ the Ship owned by it nor allow its employment, operation or management in any manner contrary to any law or regulation including but not limited to the ISM Code, the ISPS Code, all Environmental Laws and Sanctions (or which would be contrary to Sanctions if Sanctions were binding on each Transaction Obligor).
 
24.11
ISPS Code
 
Without limiting paragraph (a) of Clause 24.10 (Compliance with laws etc.), each Borrower shall:
 
(a)
procure that the Ship owned by it and the company responsible for that Ship’s compliance with the ISPS Code comply with the ISPS Code;
 
(b)
maintain an ISSC for that Ship; and
 
(c)
notify the Lender immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.
 
24.12
Sanctions
 
(a)
No Borrower shall, and each Borrower shall procure that no Transaction Obligor shall, use any revenue or benefit derived from any activity or dealing with a Prohibited Person in discharging any obligation due or owing to the Lender.
 
(b)
Each Borrower undertakes that it shall, and it shall procure that each Transaction Obligor shall:
 

 (i)
be in compliance with all Sanctions; and
 

 (ii)
not be subject to or the target of any action by any regulatory or enforcement authority or third party in relation to any Sanctions of any Sanctions Authority.
 
(c)
Each Borrower undertakes that it will prevent its Ship from being used, directly or indirectly:
 

 (i)
by, or for the benefit of, any Prohibited Person or any person owned or controlled by any Prohibited Person (including being sold, chartered, leased or otherwise provided directly or indirectly to any Prohibited Person) in breach of Sanctions;
 

 (ii)
in any trade which could expose a Ship, the Lender, the Approved Manager(s), a Ship’s crew or a Ship’s insurers to enforcement proceedings arising from Sanctions or any other consequences whatsoever arising from Sanctions;
 

 (iii)
in any trade which would trigger the operation of any sanctions limitation or exclusion clause (or similar) in the Insurances; and/or
 

 (iv)
in any transport of any goods that are prohibited to be sold, supplied, transferred, purchased, exported or imported under any Sanctions.
 
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(d)
Each Borrower shall procure that each charterparty in respect of its Ship (other than the time charter relating to Ship B dated 17 October 2018, as further amended and entered into between Borrower B and Glencore) shall include standard clauses on “Sanctions and Designated Entities” included in BIMCO’s standard documentation or any equivalent language and (ii) without limitation to the foregoing, for the benefit of that Borrower, language which gives effect to the provisions of this Clause 24.12 (Sanctions) and which permits refusal of employment or voyage orders if compliance would result in a breach of Sanctions.
 
(e)
Without prejudice to the rights of the Lender under any other provisions of this Agreement and the other Finance Documents, if a Borrower discovers that its Ship, without its knowledge, has been sold, chartered, transferred, leased or otherwise provided directly or indirectly to any Prohibited Person in breach of applicable law, it shall terminate as soon as possible, and in any case within thirty (30) days, after the day it discovers that any of the events described in this Clause 24.12 (Sanctions) has occurred, the relationship with the Prohibited Person. In this case the Borrowers will also inform the Lender immediately upon becoming so aware.
 
(f)
Each Borrower will provide the Lender, upon the Lender’s written request, with all reasonably relevant documentation related to its Ship and the transported goods which the Lender is required to disclose to a regulatory authority of any Sanctions Authority pursuant to any Sanctions.
 
24.13
Illegal trading and Trading in war zones
 
(a)
No Borrower shall cause or permit any Ship to enter or trade to any zone which is declared a war zone by any government or by that Ship’s war risks insurers or which is otherwise excluded from the scope of coverage of the obligatory insurances unless:
 

 (i)
the prior written consent of the Lender has been given; and
 

 (ii)
that Borrower has (at its expense) effected any special, additional or modified insurance cover which the Lender may require.
 
(b)
No Borrower shall cause or permit any Ship to enter or trade in any manner contrary to law or in any area which is not covered by the Ship’s Insurances.
 
24.14
Provision of information
 
Without prejudice to Clause 20.6 (Information: miscellaneous) each Borrower shall, in respect of the Ship owned by it, promptly provide the Lender with any information which it requests regarding:
 
(a)
that Ship, its employment, position and engagements;
 
(b)
the Earnings and payments and amounts due to its master and crew;
 
(c)
any expenditure incurred, or likely to be incurred, in connection with the operation, maintenance or repair of that Ship and any payments made by it in respect of that Ship;
 
(d)
any towages and salvages; and
 
(e)
its compliance, the Approved Manager’s compliance and the compliance of that Ship with the ISM Code and the ISPS Code,
 
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and, upon the Lender’s request, promptly provide copies of any current Assignable Charter (including any Permitted Charter) relating to that Ship, of any current guarantee of any such Charter (including any Permitted Charter), the Ship’s Safety Management Certificate and any relevant Document of Compliance.
 
24.15
Notification of certain events
 
Each Borrower shall, in respect of the Ship owned by it, immediately notify the Lender by fax or email, confirmed forthwith by letter, of:
 
(a)
any casualty to that Ship which is or is likely to be or to become a Major Casualty;
 
(b)
any occurrence as a result of which that Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss;
 
(c)
any requisition of that Ship for hire;
 
(d)
any requirement or recommendation made in relation to that Ship by any insurer or classification society or by any competent authority which is not immediately complied with;
 
(e)
any arrest or detention of that Ship or any exercise or purported exercise of any lien on that Ship or the Earnings;
 
(f)
any intended dry docking of that Ship;
 
(g)
any Environmental Claim made against that Borrower or in connection with that Ship, or any Environmental Incident;
 
(h)
any claim for breach of the ISM Code or the ISPS Code being made against that Borrower, an Approved Manager or otherwise in connection with that Ship;
 
(i)
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,
 
(j)
any notice, or such Borrower becoming aware, of any claim, action, suit, proceeding or investigation against any Transaction Obligor, any of its Subsidiaries or any of their respective directors, officers, employees or agents with respect to Sanctions; or
 
(k)
any circumstances which could give rise to a breach of any representation or undertaking in this Agreement, or any Event of Default, relating to Sanctions,
 
and each Borrower shall keep the Lender advised in writing on a regular basis and in such detail as the Lender shall require as to that Borrower’s, any such Approved Manager’s or any other person’s response to any of those events or matters.
 
24.16
Restrictions on chartering, appointment of managers etc.
 
No Borrower shall, in relation to the Ship owned by it:
 
(a)
let that Ship on demise charter for any period;
 
(b)
enter into any time, voyage or consecutive voyage charter in respect of that Ship (other than a Permitted Charter) or “charter-in” any vessel;
 
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(c)
terminate a Management Agreement unless such Management Agreement is replaced by another Management Agreement with an Approved Manager prior to the date of such termination and such Approved Manager provides a Manager’s Undertaking;
 
(d)
appoint a manager of that Ship other than an Approved Manager and or agree to any material alteration to the terms of an Approved Manager’s appointment (and for the avoidance of doubt, any amendment on the duration, the management fees, the termination provisions, the parties and the governing law of any Management Agreement is considered material);
 
(e)
de activate or lay up that Ship; or
 
(f)
put that Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $1,000,000 (or the equivalent in any other currency) unless that person has first given to the Lender and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its Earnings for the cost of such work or for any other reason.
 
24.17
Notice of Mortgage
 
Each Borrower shall keep the relevant Mortgage registered against the Ship owned by it as a valid first priority or (as applicable) first preferred mortgage, carry on board that Ship a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the master’s cabin of that Ship a framed printed notice stating that that Ship is mortgaged by that Borrower to the Lender.
 
24.18
Sharing of Earnings
 
No Borrower shall enter into any agreement or arrangement for the sharing of any Earnings provided that if a Borrower enters into pool arrangements (with the Lender’s prior consent), it will provide the Lender with a copy of the relevant pool agreement and on-hire certificate.
 
24.19
Charterparty Assignment
 
If a Borrower enters into any Assignable Charter, that Borrower shall, promptly after the date on which it enters into such Assignable Charter:
 
(a)
provide the Lender with a certified true copy of such Assignable Charter;
 
(b)
execute in favour of the Lender a Charterparty Assignment in respect of that Assignable Charter (such Charterparty Assignment to be notified to the relevant charterer and any charter guarantor and that Borrower shall use its best endeavours to obtain an executed acknowledgment of the notice from the relevant charterer and charter guarantor in such form as the Lender may approve or require) and shall deliver to the Lender such other documents as it may reasonably require (including, without limitation, documents equivalent to those referred to at paragraph 1 of Part A of Schedule 2 (Conditions Precedent) in respect of such Charterparty Assignment).
 
24.20
Inventory of Hazardous Materials
 
Each Borrower shall ensure that the Ship owned by it maintains a valid and up to date Inventory of Hazardous Materials (IHM) which is certified in accordance with the EU Ship Recycling Regulation, 2013 and/or the International Maritime Organisation’s (IMO) Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 as further described by IMO and/or that Ship’s Approved Classification Society.
 
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24.21
Sustainable and socially responsible dismantling of a Ship
 
(a)
Each Borrower shall institute and maintain policies and procedures to ensure that its Ship or, as the case may be, any other vessel previously financed by the Lender shall be dismantled, scrapped or, as the case may be, recycled as follows:
 

 (i)
in the case of it being EU flagged and to the extent applicable to its Ship or, as the case may be, the relevant vessel, be recycled at an approved yard under the EU Ship Recycling Regulation; and
 

 (ii)
in the case of it being non-EU flagged and to the extent applicable to its Ship or, as the case may be, the relevant vessel, be recycled at a yard certified (by a classification society acceptable to the Lender and which is a member of IACS) to operate under The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 and/or the EU Ship Recycling Regulation,
 
Provided that its Ship or, as the case may be, the relevant vessel is, at the time of such dismantling, scrapping or recycling, owned by any member of the Group or any intermediary to which the ownership has been transferred for the purposes of dismantling, scrapping or recycling.
 
(b)
Each Borrower shall institute and maintain safe, sustainable, socially and environmentally responsible policies and procedures with respect to dismantling of its Ship.
 
24.22
Notification of compliance
 
Each Borrower shall promptly provide the Lender from time to time with evidence (in such form as the Lender requires) that it is complying with this Clause 24 (General Ship Undertakings).
 
25.
SECURITY COVER
 
25.1
Minimum required security cover
 
(a)
Clause 25.2 (Provision of additional security; prepayment) applies, if the Lender notifies the Borrowers that
 
 
the Security Cover Ratio is below:

25
 

 (i)
133 per cent. of the Loan, at any time when the Corporate Leverage Ratio is equal to or less than 65 per cent.; or
 

 (ii)
143 per cent. of the Loan, at any time when the Corporate Leverage Ratio is higher than 65 per cent.
 
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(the “Relevant Percentage”).
 
(b)
For the purposes of determining which Relevant Percentage is applicable at any time during the Security Period, the Corporate Leverage Ratio shall be tested on a quarterly basis on each Security Cover Testing Date and shall determine the Relevant Percentage in relation to the Security Cover Ratio set out in paragraph (a) above for the relevant financial quarter falling after the next Security Cover Testing Date (i.e. if for instance the Corporate Leverage Ratio as of 30 June is equal to or less than 65%, the applicable Relevant Percentage for the period 1 October to 31 December will be 133%, same test basis 30 September to determine the Relevant Percentage for the period 1 January to 31 March and so on hereafter).
 
(c)
For the purposes of this Clause 25.1 (Minimum required security cover) “Corporate Leverage Ratio” means, as at the date of calculation, the ratio (expressed as a percentage) of Net Debt to Market Value Adjusted Total Assets.
 
25.2
Provision of additional security; prepayment
 
(a)
If the Lender serves a notice on the Borrowers under Clause 25.1 (Minimum required security cover), the Borrowers shall, on or before the date falling one Month after the date on which the Lender’s notice is served (the “Prepayment Date”), prepay such part of the Loan as shall eliminate the shortfall. Any prepayment under this paragraph (a) of Clause 25.2 (Provision of additional security; prepayment) shall reduce the Tranches rateably and within each Tranche in inverse order of maturity the amount of each Repayment Instalment (including the Balloon Instalment) falling after that prepayment by the amount prepaid.
 
(b)
A Borrower may, instead of making a prepayment as described in paragraph (a) above, provide, or ensure that a third party has provided, additional security which, in the opinion of the Lender:
 

 (i)
has a net realisable value at least equal to the shortfall; and
 

 (ii)
is documented in such terms as the Lender may approve or require,
 
before the Prepayment Date; and conditional upon such security being provided in such manner, it shall satisfy such prepayment obligation.
 
25.3
Value of additional vessel security
 
The net realisable value of any additional security which is provided under Clause 25.2 (Provision of additional security; prepayment) which constitutes a first preferred or first priority mortgage over a vessel shall be the Market Value of the vessel concerned.
 
25.4
Valuations binding
 
Any valuation under this Clause 25 (Security Cover) shall be binding and conclusive as regards each Borrower.
 
25.5
Provision of information
 
(a)
Each Borrower shall promptly provide the Lender and any Approved Valuer acting under this Clause 25 (Security Cover) with any information which the Lender or the shipbroker may request for the purposes of the valuation.
 
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(b)
If a Borrower fails to provide the information referred to in paragraph (a) above by the date specified in the request, the valuation may be made on any basis and assumptions which the shipbroker or the Lender considers prudent.
 
25.6
Prepayment mechanism
 
Any prepayment pursuant to Clause 25.2 (Provision of additional security; prepayment) shall be made in accordance with the relevant provisions of Clause 7 (Prepayment and Cancellation) and shall be treated as a voluntary prepayment pursuant to Clause 7.4 (Voluntary prepayment of a Tranche).
 
25.7
Provision of valuations
 
The Borrower shall provide the Lender with a valuation (or, if required by the Lender, two valuations) of each Ship from an Approved Valuer and any other vessel over which additional Security has been created in accordance with Clause 25.2 (Provision of additional security; prepayment), to enable the Lender to determine the Fair Market Value of that Ship on (a) a Security Cover Testing Date and (b) any other date on which the Lender is of the reasonable opinion that the Security Cover Ratio set out in Clause 25.1 (Minimum required security cover) may have been breached (such valuation being an “Interim Valuation”), PROVIDED that unless an Event of Default has occurred and is continuing or the Borrower is required to prepay the Loan pursuant to Clause 7 (Prepayment and Cancellation), the Lender shall bear the cost of any subsequent Interim Valuations during that calendar year.
 
25.8
Frequency of valuations
 
The Borrowers acknowledge and agree that the Lender may require or commission valuations of the Ships and test the minimum required security cover pursuant to Clause 25.1 (Minimum required security cover) at any time the Lender shall deem necessary – and thus, the frequency of such testing shall neither be limited to the delivery of a Compliance Certificate nor the delivery of valuation statements on each Security Cover Testing Date – to the effect that a breach of the minimum value security cover shall be remedied by the Borrowers at the time of ascertainment of such breach by the Lender on or before the date falling one Month after such breach and Provided that the Borrowers shall only pay for the costs and expenses of the valuations referred to in Clause 25.7 (Provision of valuations).
 
25.9
Release of additional security
 
If at any time the Lender holds additional Cash security provided under this Clause 25 (Security Cover) and the Borrowers are in compliance with the minimum required security cover under Clause 25.1 (Minimum required security cover) for an immediate preceding consecutive period of three Months (without taking into account the Cash security to be released), the Borrower may six months after the date on which such additional security has been provided and by 30 days prior written notice to the Lender and at the Borrowers’ expense, require the release and discharge of the relevant part of the additional security, Provided that the Borrowers demonstrate to the Lender that, if the test under Clause 25.1 (Minimum required security cover) were to be applied immediately following the release of such additional security, the Borrowers would be in compliance with the minimum required security cover under Clause 25.1 (Minimum required security cover). The Lender shall then promptly direct release and discharge the relevant part of that additional security if no Event of Default is then continuing or will result from such release and discharge.
 
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26.
ACCOUNTS
 
26.1
Accounts
 
No Borrower may, without the prior consent of the Lender, maintain any bank account other than its Earnings Account and its Retention Account.
 
26.2
Payment of Earnings
 
(a)
Each Borrower shall ensure that, subject only to the provisions of the General Assignment to which it is a party, all the Earnings in respect of the Ship owned by it are paid in its Earnings Account and no set off rights will be granted by any Borrower to the Account Bank.
 
(b)
All Earnings of a Ship arising out of its employment shall be available to the relevant Borrower until the Lender has served a notice to the Borrowers that an Event of Default has occurred and is continuing.
 
(c)
Each Borrower shall ensure that on the first Utilisation Date the Minimum Liquidity Amount is credited to its Retention Account.
 
26.3
Location of Accounts
 
Each Borrower shall promptly:
 
(a)
comply with any requirement of the Lender as to the location or relocation of its Earnings Account and its Retention Account (or either of them); and
 
(b)
execute any documents which the Lender specifies to create or maintain in favour of the Lender Security over (and/or rights of set-off, consolidation or other rights in relation to) the Earnings Accounts and the Retention Accounts.
 
27.
EVENTS OF DEFAULT
 
27.1
General
 
Each of the events or circumstances set out in this Clause 27 (Events of Default) is an Event of Default except for Clause 27.19 (Acceleration) and Clause 27.20 (Enforcement of security).
 
27.2
Non-payment
 
A Transaction Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place 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 five Business Days of its due date.
 
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27.3
Specific obligations
 
A breach occurs of Clause 4.4 (Waiver of conditions precedent), Clause 19.34 (Sanctions), Clause 20 (Information Undertakings), Clause 21 (Financial Covenants), Clause 22.10 (Title), Clause 22.11 (Negative pledge), paragraph (g) of Clause 22.19 (Other transactions), Clause 22.20 (Unlawfulness, invalidity and ranking; Security imperilled), Clause 22.21 (Sanctions), Clause 23.2 (Maintenance of obligatory insurances), Clause 23.3 (Terms of obligatory insurances), Clause 23.5 (Renewal of obligatory insurances), Clause 24.2 (Ship’s name and registration), paragraphs (a) to (c) of Clause 24.3 (Repair and classification), Clause 24.10 (Compliance with laws etc.) (insofar as that Clause relates to Sanctions), Clause 24.12 (Sanctions), paragraph (d) of Clause 24.16 (Restrictions on chartering, appointment of managers, etc.), save to the extent such breach is a failure to pay and therefore subject to Clause 27.2 (Non-payment), Clause 25 (Security Cover).
 
27.4
Other obligations
 
(a)
A Transaction Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 27.2 (Non-payment) and Clause 27.3 (Specific obligations)).
 
(b)
No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within five Business Days of the Lender giving notice to the Borrowers or (if earlier) any Transaction Obligor becoming aware of the failure to comply.
 
27.5
Misrepresentation
 
Any representation or statement made or deemed to be made by a Transaction Obligor in the Finance Documents or any other document delivered by or on behalf of any Transaction Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading when made or deemed to be made.
 
27.6
Cross default
 
(a)
Any Financial Indebtedness of any Transaction Obligor is not paid when due nor within any originally applicable grace period.
 
(b)
Any Financial Indebtedness of any Transaction Obligor is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).
 
(c)
Any commitment for any Financial Indebtedness of any Transaction Obligor is cancelled or suspended by a creditor of any member of the Group as a result of an event of default (however described).
 
(d)
Any creditor of any Transaction Obligor becomes entitled to declare any Financial Indebtedness of any Transaction Obligor due and payable prior to its specified maturity as a result of an event of default (however described).
 
(e)
No Event of Default will occur under this Clause 27.6 (Cross default) in respect of a person if, the aggregate amount of Financial Indebtedness with any creditors other than the Lender or commitment for Financial Indebtedness with any creditors other than the Lender falling within paragraphs (a) to (d) above, is less than (i) $500,000 in respect of the Borrowers and any member of the Group (other than the Parent Guarantor) and (ii) $5,000,000 in respect of the Parent Guarantor (or, in each case, its equivalent in any other currency).
 
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27.7
Insolvency
 
(a)
A Transaction Obligor:
 

 (i)
is unable or admits inability to pay its debts as they fall due;
 

 (ii)
is deemed to, or is declared to, be unable to pay its debts under applicable law;
 

 (iii)
suspends or threatens to suspend making payments on any of its debts; or
 

 (iv)
by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors (excluding the Lender in its capacity as such) with a view to rescheduling any of its indebtedness.
 
(b)
The value of the assets of any Transaction Obligor is less than its liabilities (taking into account contingent and prospective liabilities).
 
(c)
A moratorium is declared in respect of any indebtedness of any Transaction Obligor.  If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.
 
27.8
Insolvency proceedings
 
(a)
Any corporate action, legal proceedings or other procedure or step is taken in relation to:
 

 (i)
the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Transaction Obligor;
 

 (ii)
a composition, compromise, assignment or arrangement with any creditor of any Transaction Obligor;
 

 (iii)
the appointment of a liquidator, receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of any Transaction Obligor or any of its assets; or
 

 (iv)
enforcement of any Security over any assets of any Transaction Obligor,
 
or any analogous procedure or step is taken in any jurisdiction.
 
(b)
Paragraph (a) above shall not apply to any winding-up petition or other proceeding which is frivolous or vexatious and is discharged, stayed or dismissed within 14 days of commencement.
 
27.9
Creditors’ process
 
Any expropriation, attachment, sequestration, distress or execution (or any analogous process in any jurisdiction) affects any asset or assets of a Transaction Obligor (other than an arrest or detention of a Ship referred to in Clause 27.13 (Arrest)) and is not discharged within 30 days.
 
27.10
Unlawfulness, invalidity and ranking
 
(a)
It is or becomes unlawful for a Transaction Obligor to perform any of its obligations under the Finance Documents.
 
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(b)
Any obligation of a Transaction Obligor under the Finance Documents is not or ceases to be legal, valid, binding or enforceable.
 
(c)
Any Finance Document ceases to be in full force and effect or to be continuing or is or purports to be determined or any Transaction Security is alleged by a party to it (other than the Lender) to be ineffective.
 
(d)
Any Transaction Security proves to have ranked after, or loses its priority to, any other Security.
 
27.11
Security imperilled
 
Any Security created or intended to be created by a Finance Document is in any way imperilled or in jeopardy.
 
27.12
Cessation of business
 
Any Transaction Obligor suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business.
 
27.13
Arrest
 
Any arrest of a Ship or its detention in the exercise or the purported exercise of any lien or claim unless it is redelivered to the full control of the relevant Borrower within 30 days of such arrest or detention.
 
27.14
Expropriation
 
The authority or ability of any Transaction Obligor to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any Transaction Obligor or any of its assets other than:
 
(a)
an arrest or detention of a Ship referred to in Clause 27.13 (Arrest); or
 
(b)
any Requisition.
 
27.15
Repudiation and rescission of agreements
 
A Transaction Obligor (or any other relevant party) rescinds or purports to rescind or repudiates or purports to repudiate a Transaction Document or any of the Transaction Security or evidences an intention to rescind or repudiate a Transaction Document or any Transaction Security or a Transaction Document or any of the Transaction Security otherwise ceases to remain in full force and effect for any reason.
 
27.16
Litigation
 
Any litigation, arbitration or administrative proceedings or investigations of, or before, any court, arbitral body or agency are started or threatened, or any judgment or order of a court, arbitral body or agency is made, in relation to any of the Transaction Documents or the transactions contemplated in any of the Transaction Documents or against any member of the Group or its assets which has or is reasonably likely to have a Material Adverse Effect unless in such case (i) the relevant member of the Group has taken active measures to dispute such proceedings or disputes and such proceedings or disputes are dismissed or withdrawn within thirty (30) days of being made or presented or (ii) the combined value of such proceedings or disputes in respect of such member of the Group (other than a Borrower) does not exceed $1,000,000 (or its equivalent in any other currency) in aggregate.
 
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27.17
Material adverse change
 
Any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect.
 
27.18
Audit qualification
 
The Parent Guarantor’s auditors qualify their report on any audited annual consolidated financial statements of the Parent Guarantor.
 
27.19
Acceleration
 
On and at any time after the occurrence of an Event of Default the Lender may by notice to the Borrowers:
 
(a)
cancel the Commitment, whereupon it shall immediately be cancelled;
 
(b)
declare that all or part of the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon it shall become immediately due and payable; and/or
 
(c)
declare that all or part of the Loan be payable on demand, whereupon it shall immediately become payable on demand by the Lender,
 
and the Lender may serve notices under paragraphs (a), (b) and (c) above simultaneously or on different dates and the Lender may take any action referred to in Clause 27.20 (Enforcement of security) if no such notice is served or simultaneously with or at any time after the service of any of such notice.
 
27.20
Enforcement of security
 
On and at any time after the occurrence of an Event of Default which is continuing the Lender may take any action which, as a result of the Event of Default or any notice served under Clause 27.19 (Acceleration), the Lender is entitled to take under any Finance Document or any applicable law or regulation.
 
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SECTION 9
 
THE LENDER AND THE OBLIGORS
 
28.
CHANGES TO THE LENDER
 
28.1
Assignment by the Lender
 
Subject to this Clause 28 (Changes to the Lender), the Lender (the “Existing Lender”) may, by giving to the Borrowers ten days’ prior notice, assign all (but not part) of its rights under the Finance Documents to another 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 (the “New Lender”).
 
28.2
Conditions of assignment
 
(a)
The consent of the Borrowers is required for an assignment by the Existing Lender, unless the assignment is:
 

 (i)
to an Affiliate of the Existing Lender; or
 

 (ii)
made at a time when an Event of Default is continuing.
 
(b)
The consent of the Borrowers to an assignment must not be unreasonably withheld or delayed.  Each Borrower will be deemed to have given its consent five Business Days after the Existing Lender has requested it unless consent is expressly refused by that Borrower within that time.
 
(c)
The consent of a Borrower to an assignment must not be withheld solely because the assignment may result in an increase to any amount payable under Clause 14.3 (Mandatory Cost).
 
(d)
If:
 

 (i)
the Existing Lender assigns any of its rights or obligations under the Finance Documents or changes its Facility Office; and
 

 (ii)
as a result of circumstances existing at the date the assignment or change occurs, a Transaction Obligor would be obliged to make a payment to the New Lender or the Existing Lender acting through its new Facility Office under Clause 12 (Tax Gross Up and Indemnities) or under that Clause as incorporated by reference or in full in any other Finance Document or Clause 13 (Increased Costs),
 
then the New Lender or the Existing Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender would have been if the assignment or change had not occurred.
 
(e)
Each Obligor on behalf of itself and each Transaction Obligor agrees that all rights and interests (present, future or contingent) which the Existing Lender has under or by virtue of the Finance Documents are assigned to the New Lender absolutely, free of any defects in the Existing Lender’s title and of any rights or equities which the Borrowers or any other Transaction Obligor had against the Existing Lender.
 
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(f)
No costs or expenses in relation to such an assignment or transfer shall be borne by any Transaction Obligor.
 
28.3
Security over Lender’s rights
 
In addition to the other rights provided to the Lender under this Clause 28 (Changes to the Lender), the Lender may without consulting with or obtaining consent from any Transaction Obligor, at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of the Lender including, without limitation:
 
(a)
any charge, assignment or other Security to secure obligations to a federal reserve or central bank; and
 
(b)
if the Lender is a fund, any charge, assignment or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by the Lender as security for those obligations or securities,
 
except that no such charge, assignment or Security shall:
 

 (i)
release the Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security for the Lender as a party to any of the Finance Documents; or
 

 (ii)
require any payments to be made by a Transaction Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the Lender under the Finance Documents.
 
29.
CHANGES TO THE TRANSACTION OBLIGORS
 
No Transaction Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.

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SECTION 10
 
ADMINISTRATION
 
30.
PAYMENT MECHANICS
 
30.1
Payments to the Lender
 
(a)
On each date on which a Transaction Obligor is required to make a payment under a Finance Document, that Transaction Obligor shall make an amount equal to such payment available to the Lender (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 Lender as being customary at the time for settlement of transactions in the relevant currency in the place of payment.
 
(b)
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 such Participating Member State or London, as specified by the Lender) and with such bank as the Lender, in each case, specifies.
 
30.2
Application of receipts; partial payments
 
(a)
If the Lender receives a payment that is insufficient to discharge all the amounts then due and payable by a Transaction Obligor under the Finance Documents, the Lender may apply that payment towards the obligations of that Transaction Obligor under the Finance Documents in any manner it may decide.
 
(b)
Paragraph (a) above will override any appropriation made by a Transaction Obligor.
 
30.3
No set-off by Transaction Obligors
 
All payments to be made by a Transaction Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
 
30.4
Business Days
 
(a)
Any payment under the Finance Documents 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).
 
(b)
During any extension of the due date for payment of any principal or an Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.
 
30.5
Currency of account
 
(a)
Subject to paragraphs (b) and (c) below, dollars is the currency of account and payment for any sum due from a Transaction Obligor under any Finance Document.
 
(b)
Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.
 
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(c)
Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.
 
30.6
Change of currency
 
(a)
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:
 

 (i)
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 Lender (after consultation with the Borrowers); and
 

 (ii)
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 Lender (acting reasonably).
 
(b)
If a change in any currency of a country occurs, this Agreement will, to the extent the Lender (acting reasonably and after consultation with the Borrowers) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Market and otherwise to reflect the change in currency.
 
30.7
Currency conversion
 
The obligations of any Transaction Obligor to pay in the due currency shall only be satisfied to the extent of the amount of the due currency purchased after deducting the costs of conversion.
 
30.8
Disruption to Payment Systems etc.
 
If either the Lender determines (in its discretion) that a Disruption Event has occurred or the Lender is notified by a Borrower that a Disruption Event has occurred:
 
(a)
the Lender may, and shall if requested to do so by a Borrower, consult with the Borrowers with a view to agreeing with the Borrowers such changes to the operation or administration of the Facility as the Lender may deem necessary in the circumstances;
 
(b)
the Lender shall not be obliged to consult with the Borrowers in relation to any changes mentioned in paragraph (a) above if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;
 
(c)
any such changes agreed upon by the Lender and the Borrowers shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties and any Transaction Obligors as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents;
 
(d)
the Lender shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever (including, without limitation for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Lender) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 30.8 (Disruption to Payment Systems etc.).
 
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31.
SET-OFF
 
The Lender may set off any matured obligation due from a Transaction Obligor under the Finance Documents (to the extent beneficially owned by the Lender) against any matured obligation owed by the Lender to that Transaction Obligor, regardless of the place of payment, booking branch or currency of either obligation.  If the obligations are in different currencies, the Lender may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
 
32.
CONDUCT OF BUSINESS BY THE LENDER
 
No provision of this Agreement will:
 
(a)
interfere with the right of the Lender to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
 
(b)
oblige the Lender to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or
 
(c)
oblige the Lender to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.
 
33.
BAIL-IN
 
Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the parties to a Finance Document, each Party acknowledges and accepts that any liability of any party to a Finance Document under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:
 
(a)
any Bail-In Action in relation to any such liability, including (without limitation):
 

 (i)
a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;
 

 (ii)
a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and
 

 (iii)
a cancellation of any such liability; and
 
(b)
a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.
 
34.
NOTICES
 
34.1
Communications in writing
 
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.
 
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34.2
Addresses
 
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 are:
 
(a)
in the case of the Borrowers, that specified in Schedule 1 (The Parties); and
 
(b)
in the case of any other Obligor or the Lender, that specified in Schedule 1 (The Parties) or, if it becomes a Party after the date of this Agreement, that notified in writing to the Lender on or before the date on which it becomes a Party;
 
or any substitute address, fax number or department or officer as an Obligor may notify to the Lender (or the Lender may notify to the other Parties, if a change is made by the Lender) by not less than five Business Days’ notice.
 
34.3
Delivery
 
(a)
Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:
 

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

 (ii)
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 34.2 (Addresses), if addressed to that department or officer.
 
(b)
Any communication or document to be made or delivered to the Lender will be effective only when actually received by it and then only if it is expressly marked for the attention of the department or officer of the Lender specified in Schedule 1 (The Parties) (or any substitute department or officer as the Lender shall specify for this purpose).
 
(c)
Any communication or document made or delivered to the Borrowers in accordance with this Clause will be deemed to have been made or delivered to each of the Transaction Obligors.
 
(d)
Any communication or document which becomes effective, in accordance with paragraphs (a) to (c) above, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.
 
34.4
Electronic communication
 
(a)
Any communication to be made or document to be delivered by one Party to another under or in connection with the Finance Documents may be made or delivered by electronic mail or other electronic means (including, without limitation, by way of posting to a secure website) if those two Parties:
 

 (i)
notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and
 
105

 (ii)
notify each other of any change to their address or any other such information supplied by them by not less than five Business Days’ notice.
 
(b)
Any such electronic communication or delivery as specified in paragraph (a) above to be made between an Obligor and the Lender may only be made in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted from of communication or delivery.
 
(c)
Any such electronic communication or document as specified in paragraph (a) above made or delivered by one Party to another will be effective only when actually received (or made available) in readable form and in the case of any electronic communication or document made or delivered by a Party to the Lender only if it is addressed in such a manner as the Lender shall specify for this purpose.
 
(d)
Any electronic communication or document which becomes effective, in accordance with paragraph (c) above, after 5.00 p.m. in the place in which the Party to whom the relevant communication or document is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.
 
(e)
Any reference in a Finance Document to a communication being sent or received or a document being delivered shall be construed to include that communication or document being made available in accordance with this Clause 34.4 (Electronic communication).
 
34.5
English language
 
(a)
Any notice given under or in connection with any Finance Document must be in English.
 
(b)
All other documents provided under or in connection with any Finance Document must be:
 

 (i)
in English; or
 

 (ii)
if not in English, and if so required by the Lender, accompanied by a certified English translation prepared by a translator approved by the Lender and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.
 
35.
CALCULATIONS AND CERTIFICATES
 
35.1
Accounts
 
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by the Lender are prima facie evidence of the matters to which they relate.
 
35.2
Certificates and determinations
 
Any certification or determination by the Lender 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.
 
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35.3
Day count convention
 
(a)
Any interest, commission or fee accruing under a Finance Document will accrue from day to day and the amount of any such interest, commission or fee is calculated:
 

 (i)
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 Relevant Market differs, in accordance with that market practice); and
 

 (ii)
subject to paragraph (b) below, without rounding.
 
(b)
The aggregate amount of any accrued interest, commission or fee which is, or becomes, payable by an Obligor under a Finance Document shall be rounded to 2 decimal places.
 
36.
PARTIAL INVALIDITY
 
If, at any time, any provision of a Finance Document is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions under the law of that jurisdiction nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
 
37.
REMEDIES AND WAIVERS
 
(a)
No failure to exercise, nor any delay in exercising, on the part of the Lender or any Receiver or Delegate, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any Finance Document.  No election to affirm any Finance Document on the part of the Lender or any Receiver or Delegate shall be effective unless it is in writing.  No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy.  The rights and remedies provided in each Finance Document are cumulative and not exclusive of any rights or remedies provided by law.
 
(b)
No variation or amendment of a Finance Document shall be valid unless in writing and signed by the Lender.
 
38.
ENTIRE AGREEMENT
 
(a)
This Agreement, in conjunction with the other Finance Documents, constitutes the entire agreement between the Parties and supersedes all previous agreements, understandings and arrangements between them, whether in writing or oral, in respect of its subject matter.
 
(b)
Each Obligor acknowledges that it has not entered into this Agreement or any other Finance Document in reliance on, and shall have no remedies in respect of, any representation or warranty that is not expressly set out in this Agreement or in any other Finance Document.
 
39.
SETTLEMENT OR DISCHARGE CONDITIONAL
 
Any settlement or discharge under any Finance Document between the Lender and any Transaction Obligor shall be conditional upon no security or payment to the Lender by any Transaction Obligor or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.
 
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40.
IRREVOCABLE PAYMENT
 
If the Lender considers that an amount paid or discharged by, or on behalf of, a Transaction Obligor or by any other person in purported payment or discharge of an obligation of that Transaction Obligor to the Lender under the Finance Documents is capable of being avoided or otherwise set aside on the liquidation or administration of that Transaction Obligor or otherwise, then that amount shall not be considered to have been unconditionally and irrevocably paid or discharged for the purposes of the Finance Documents.
 
41.
AMENDMENTS
 
41.1
Changes to reference rates
 
(a)
If an RFR Replacement Event has occurred any amendment or waiver which relates to:
 

 (i)
providing for the use of a Replacement Reference Rate in place of the RFR; and
 
(ii)
 

 (A)
aligning any provision of any Finance Document to the use of that Replacement Reference Rate;
 

 (B)
enabling that Replacement Reference Rate to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Reference Rate to be used for the purposes of this Agreement);
 

 (C)
implementing market conventions applicable to that Replacement Reference Rate;
 

 (D)
providing for appropriate fallback (and market disruption) provisions for that Replacement Reference Rate; or
 

 (E)
adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Reference Rate (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation),
 
may be made with the consent of the Lender and the Borrowers.
 
(b)
An amendment or waiver that relates to, or has the effect of, aligning the means of calculation of interest on the Loan or any part of the Loan under this Agreement to any recommendation of a Relevant Nominating Body which:
 

 (i)
relates to the use of the RFR on a compounded basis in the international or any relevant domestic syndicated loan markets; and
 

 (ii)
is issued on or after the date of this Agreement,
 
may be made with the consent of the Lender and the Borrowers.
 
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(c)
In this Clause 41.1 (Changes to reference rates):
 
“Relevant Nominating Body” means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.
 
“Replacement Reference Rate” means a reference rate which is:
 

 (a)
formally designated, nominated or recommended as the replacement for the RFR by:
 

 (i)
the administrator of the RFR (provided that the market or economic reality that such reference rate measures is the same as that measured by the RFR); or
 

 (ii)
any Relevant Nominating Body,
 
and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the “Replacement Reference Rate” will be the replacement under sub-paragraph (ii) above;
 

 (b)
in the opinion of the Lender and the Borrowers, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor or alternative to the RFR; or
 

 (c)
in the opinion of the Lender and the Borrowers, an appropriate successor or alternative to the RFR.
 
“RFR Replacement Event” means:
 

 (a)
the methodology, formula or other means of determining the RFR has, in the opinion of the Lender and the Borrowers materially changed;
 
(b)
 
(i)
 

 (A)
the administrator of the RFR or its supervisor publicly announces that such administrator is insolvent; or
 

 (B)
information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of the RFR is insolvent,
 
provided that, in each case, at that time, there is no successor administrator to continue to provide the RFR;
 

 (ii)
the administrator of the RFR publicly announces that it has ceased or will cease, to provide the RFR permanently or indefinitely and, at that time, there is no successor administrator to continue to provide the RFR;
 
109

 (iii)
the supervisor of the administrator of the RFR publicly announces that the RFR has been or will be permanently or indefinitely discontinued; or
 

 (iv)
the administrator of the RFR or its supervisor announces that the RFR may no longer be used; or
 

 (c)
the administrator of the RFR determines that the RFR should be calculated in accordance with its reduced submissions or other contingency or fallback policies or arrangements and either:
 

 (i)
the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Lender and the Borrowers) temporary; or
 

 (ii)
the RFR is calculated in accordance with any such policy or arrangement for a period no less than the period specified as the “RFR Contingency Period” in the Reference Rate Terms; or
 

 (d)
in the opinion of the Lender and the Borrowers, the RFR is otherwise no longer appropriate for the purposes of calculating interest under this Agreement.
 
41.2
Obligor Intent
 
Without prejudice to the generality of Clauses 1.2 (Construction), 17.4 (Waiver of defences) and 18.2 (Waiver of defences), each Obligor expressly confirms that it intends that any guarantee contained in this Agreement or any other Finance Document and any Security created by any Finance Document shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following:  business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.
 
42.
CONFIDENTIAL INFORMATION
 
42.1
Confidentiality
 
The Lender agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 42.2 (Disclosure of Confidential Information) and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.
 
42.2
Disclosure of Confidential Information
 
The Lender may disclose:
 
(a)
to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, insurers, insurance advisors, insurance brokers, partners and Representatives such Confidential Information as the Lender shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;
 
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(b)
to any person:
 

 (i)
to (or through) whom it assigns (or may potentially assign) all or any of its rights and/or obligations under one or more Finance Documents and, in each case, to any of that person’s Affiliates, Related Funds, Representatives and professional advisers;
 

 (ii)
with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Transaction Obligors and to any of that person’s Affiliates, Related Funds, Representatives and professional advisers;
 

 (iii)
appointed by the Lender or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf;
 

 (iv)
who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in sub-paragraph (i) or (ii) of paragraph (b) above;
 

 (v)
to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;
 

 (vi)
to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitrations, administrative or other investigations, proceedings or disputes;
 

 (vii)
to whom or for whose benefit the Lender charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 28.3 (Security over Lender’s rights);
 

 (viii)
which is a classification society or other entity which the Lender has engaged to make the calculations necessary to enable the Lender to comply with its reporting obligations under the Poseidon Principles;
 

 (ix)
who is a Party, a member of the Group or any related entity of a Transaction Obligor;
 

 (x)
as a result of the registration of any Finance Document as contemplated by any Finance Document or any legal opinion obtained in connection with any Finance Document; or
 

 (xi)
with the consent of the Parent Guarantor;
 
in each case, such Confidential Information as the Lender shall consider appropriate if:
 

 (A)
in relation to sub-paragraphs (i), (ii) and (iii) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;
 
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 (B)
in relation to sub-paragraphs (iv) and (viii) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;
 

 (C)
in relation to sub-paragraphs (v), (vi) and (vii) of paragraph (b) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Lender, it is not practicable so to do in the circumstances;
 
(c)
to any person appointed by the Lender or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this paragraph (c) if the service provider to whom the Confidential Information is to be given has entered in to a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Borrowers and the Lender;
 
(d)
to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Transaction Obligors if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information.
 
42.3
DAC6
 
Nothing in any Finance Document shall prevent disclosure of any Confidential Information or other matter to the extent that preventing that disclosure would otherwise cause any transaction contemplated by the Finance Documents or any transaction carried out in connection with any transaction contemplated by the Finance Documents to become an arrangement described in Part II A 1 of Annex IV of Directive 2011/16/EU.
 
42.4
Entire agreement
 
This Clause 42 (Confidential Information) constitutes the entire agreement between the Parties in relation to the obligations of the Lender under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
 
42.5
Inside information
 
The Lender acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Lender undertakes not to use any Confidential Information for any unlawful purpose.
 
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42.6
Notification of disclosure
 
The Lender agrees (to the extent permitted by law and regulation) to inform the Borrowers:
 
(a)
of the circumstances of any disclosure of Confidential Information made pursuant to sub-paragraph (v) of paragraph (b) of Clause 42.2 (Disclosure of Confidential Information) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and
 
(b)
upon becoming aware that Confidential Information has been disclosed in breach of this Clause 42 (Confidential Information).
 
42.7
Continuing obligations
 
The obligations in this Clause 42 (Confidential Information) are continuing and, in particular, shall survive and remain binding on the Lender for a period of 12 months from the earlier of:
 
(a)
the date on which all amounts payable by the Obligors under or in connection with this Agreement have been paid in full and the Commitment has been cancelled or otherwise ceased to be available; and
 
(b)
the date on which the Lender otherwise ceases to be the Lender.
 
43.
CONFIDENTIALITY OF FUNDING RATES
 
43.1
Confidentiality and disclosure
 
(a)
Each Obligor agrees to keep each Funding Rate confidential and not to disclose it to anyone, save to the extent permitted by paragraph (b) below.
 
(b)
The Lender and each Obligor may disclose any Funding Rate, to:
 

 (i)
any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives, if any person to whom that Funding Rate is to be given pursuant to this paragraph (i) is informed in writing of its confidential nature and that it may be price sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or is otherwise bound by requirements of confidentiality in relation to it;
 

 (ii)
any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate is to be given is informed in writing of its confidential nature and that it may be price sensitive information except that there shall be no requirement to so inform if, in the opinion of the Lender or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances;
 
113

 (iii)
any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that Funding Rate is to be given is informed in writing of its confidential nature and that it may be price sensitive information except that there shall be no requirement to so inform if, in the opinion of the Lender or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; and
 

 (iv)
any person with the consent of the Lender.
 
43.2
Related obligations
 
(a)
Each Obligor acknowledges that each Funding Rate is or may be price sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each Obligor undertakes not to use any Funding Rate for any unlawful purpose.
 
(b)
The Lender and each Obligor agree (to the extent permitted by law and regulation) to inform the Lender:
 

 (i)
of the circumstances of any disclosure made pursuant to sub-paragraph (ii) of paragraph (b) of Clause 43.1 (Confidentiality and disclosure) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and
 

 (ii)
upon becoming aware that any information has been disclosed in breach of this Clause 43 (Confidentiality of Funding Rates).
 
43.3
No Event of Default
 
No Event of Default will occur under Clause 27.4 (Other obligations) by reason only of an Obligor’s failure to comply with this Clause 43 (Confidentiality of Funding Rates).
 
44.
COUNTERPARTS
 
Each Finance Document 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 the Finance Document.
 
114
SECTION 11
 
GOVERNING LAW AND ENFORCEMENT
 
45.
GOVERNING LAW
 
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
 
46.
ENFORCEMENT
 
46.1
Jurisdiction
 
(a)
Unless specifically provided in another Finance Document in relation to that Finance Document, the courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with any Finance Document (including a dispute regarding the existence, validity or termination of any Finance Document or any non-contractual obligation arising out of or in connection with any Finance Document) (a “Dispute”).
 
(b)
The Obligors accept that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Obligor will argue to the contrary.
 
(c)
To the extent allowed by law, this Clause 46.1 (Jurisdiction) is for the benefit of the Lender only.  As a result, the Lender shall be not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions.
 
46.2
Service of process
 
(a)
Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales):
 

 (i)
irrevocably appoints Shoreside Agents Ltd, presently at 5 St Helen’s Place, London EC3A 6AB, England (T: +44 (0)20 3771 8869, M: + 44 (0) 7591 440086, F: +44 (0)20 3771 8870, attention: Andrew Johnson) as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and
 

 (ii)
agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned.
 
(b)
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 Borrowers (on behalf of all the Obligors) must immediately (and in any event within five days of such event taking place) appoint another agent on terms acceptable to the Lender.  Failing this, the Lender may appoint another agent for this purpose.
 
This Agreement has been entered into on the date stated at the beginning of this Agreement.
 
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SCHEDULE 1

THE PARTIES
 
PART A
 
THE OBLIGORS
 
Name of Borrower
Place of Incorporation
Registration number
(or equivalent, if any)
Address for
Communication
       
Premier Marine Co.
Republic of the Marshall Islands
77643
c/o 154 Vouliagmenis Avenue, 166 74 Glyfada, Greece
 
Attention: Stamatios Tsantanis/ Stavros Gyftakis
 
sgyftakis@seanergy.gr
finance@seanergy.gr
Tel.: +30 213 0181507
       
Fellow Shipping Co.
Republic of the Marshall Islands
97694
c/o 154 Vouliagmenis Avenue, 166 74 Glyfada, Greece
 
Attention: Stamatios Tsantanis/ Stavros Gyftakis
 
sgyftakis@seanergy.gr finance@seanergy.gr
Tel.: +30 213 0181507
       
       
Champion Marine Co.
Republic of the Marshall Islands
98305
c/o 154 Vouliagmenis Avenue, 166 74 Glyfada, Greece

Attention: Stamatios Tsantanis/ Stavros Gyftakis

sgyftakis@seanergy.gr finance@seanergy.gr
Tel.: +30 213 0181507

116
Name of Guarantor
Place of Incorporation
Registration number
(or equivalent, if any)
Address for
Communication
Seanergy Maritime Holdings Corp.
Republic of the Marshall Islands
27721
c/o 154 Vouliagmenis Avenue, 166 74 Glyfada, Greece
 
Attention: Stamatios Tsantanis/ Stavros Gyftakis
 
sgyftakis@seanergy.gr
finance@seanergy.gr
Tel.: +30 213 0181507

PART B
 
THE ORIGINAL LENDER
 
Name of Original Lender
Address for Communication
   
DANISH SHIP FINANCE A/S
Sankt Annae Plads 3
DK-1250 Copenhagen K
Denmark
Attn: Henrik Søgaard (HSO@shipfinance.dk),
Iben Nordland (INJ@shipfinance.dk) and
loanadmin@shipfinance.dk 

117
SCHEDULE 2
 
CONDITIONS PRECEDENT
 
PART A
 
CONDITIONS PRECEDENT TO EACH UTILISATION REQUEST
 
1
Obligors
 
1.1
A copy of the constitutional documents of each Transaction Obligor.
 
1.2
A copy of a resolution of the board of directors of each Obligor:
 
(a)
evidencing corporate benefit;
 
(b)
approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute the Finance Documents to which it is a party;
 
(c)
authorising a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and
 
(d)
authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, a Utilisation Request) to be signed and/or despatched by it under, or in connection with, the Finance Documents to which it is a party.
 
1.3
An original of the power of attorney of any Obligor authorising a specified person or persons to execute the Finance Documents to which it is a party (the original to follow within 30 days from the Utilisation Date).
 
1.4
A specimen of the signature of each person authorised by the resolution referred to in paragraph 1.2 above.
 
1.5
A copy of a resolution signed by the Parent Guarantor as the holder of the issued shares in each Borrower, approving the terms of, and the transactions contemplated by, the Finance Documents to which that Borrower is a party.
 
1.6
A copy of the certificate of each Obligor (signed by an officer) confirming that borrowing or guaranteeing, as appropriate, the Commitment would not cause any borrowing, guaranteeing or similar limit binding on that Obligor to be exceeded.
 
1.7
A copy of the certificate of each Transaction Obligor that is incorporated outside the UK (signed by an officer, or a director, as applicable) certifying either that (i) it has not delivered particulars of any UK Establishment to the Registrar of Companies as required under the Overseas Regulations or (ii) it has a UK Establishment and specifying the name and registered number under which it is registered with the Registrar of Companies.
 
1.8
A copy of the Group Structure Chart in a form acceptable to the Lender.
 
1.9
A copy of the certificate of an authorised signatory of each Obligor certifying that each copy document relating to it specified in this Part A of Schedule 2 (Conditions Precedent) is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement or (as applicable) the Effective Date.
 
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1.10
A copy of a goodstanding certificate in respect of each Obligor dated not earlier than three months from the date of this Agreement or the Effective Date (as applicable).
 
2
Finance Documents
 
2.1
A duly executed original of any Subordination Agreement and copies of each Subordinated Finance Document (if applicable).
 
2.2
A duly executed original of any Finance Document not otherwise referred to in this Schedule 2 (Conditions Precedent).
 
2.3
A duly executed original of any other document required to be delivered by each Finance Document if not otherwise referred to this Schedule 2 (Conditions Precedent).
 
3
Security
 
3.1
A duly executed original of the Account Security in relation to each Account and of the Shares Security in respect of each Borrower (and of each document to be delivered under each of them).
 
3.2
A duly executed original of the Subordinated Debt Security (if applicable).
 
4
Legal opinions
 
4.1
A legal opinion of Watson Farley & Williams, Greece, legal advisers to the Lender in England.
 
4.2
If a Transaction Obligor is incorporated in a jurisdiction other than England and Wales, a legal opinion of the legal advisers to the Lender in the relevant jurisdiction.
 
5
Shareholder’s loans
 
5.1
Any shareholder loans agreements (if applicable) in respect of any loan from the Parent Guarantor to a Borrower, together with evidence:
 
(a)
of corporate benefit; and
 
(b)
that any relevant financial assistance laws have been complied with.
 
6
Other documents and evidence
 
6.1
A valuation of each Ship, addressed to the Lender, stated to be for the purposes of this Agreement and dated not earlier than ten (10) days before the Utilisation Date for the Advance under the Tranche relating to each respective Ship from an Approved Valuer in order to determine the Initial Market Value of the each Ship.
 
6.2
Evidence that any process agent referred to in Clause 46.2 (Service of process), if not an Obligor, has accepted its appointment.
 
6.3
A copy of any other Authorisation or other document, opinion or assurance which the Lender considers to be necessary or desirable (if it has notified the Borrowers accordingly) in connection with the entry into and performance of the transactions contemplated by any Transaction Document or for the validity and enforceability of any Transaction Document.
 
6.4
Copies of the Original Financial Statements of each Obligor.
 
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6.5
Copies of any mandates or other documents required in connection with the opening or operation of the Accounts.
 
6.6
Evidence that the fees, costs and expenses then due from the Borrowers pursuant to Clause 11 (Fees) and Clause 16 (Costs and Expenses) have been paid or will be paid by the first Utilisation Date.
 
6.7
Such evidence as the Lender may require evidencing that the Ships are insured in accordance with the provisions of this Agreement and all requirements in this Agreement in respect of insurances have been complied with.
 
6.8
Such evidence as the Lender may require to be able to satisfy its “know your customer” or similar identification procedures in relation to the transactions contemplated by the Finance Documents, including, without limitation:
 
(a)
full disclosure of structure and ownership of the Borrowers and the Parent Guarantor;
 
(b)
the identity of the ultimate owner(s) shall be proven via acceptable documentation and the Lender shall receive certified copies of documents of identification to include address regarding the ultimate owner(s) – for example passport(s);
 
(c)
signatures on this Agreement and the other Finance Documents shall be verified and the signatories’ identity including address and civil registration number if any shall be documented via passports or other acceptable documentation; and
 
(d)
such other documentation and information as the Lender deems necessary and/or advisable in order to comply with any law and/or regulation regarding money laundering and/or the financing of terrorist activities (including, without limitation, such documentation and information as the Lender deem necessary and/or advisable in order to comply with customer due diligence measures for purposes of AML/CTF checks as required by the Danish Act on Measures to Prevent Money Laundering and Financing of Terrorism).
 
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PART B
 
CONDITIONS PRECEDENT TO UTILISATION
 
In this Part B of Schedule 2 (Conditions Precedent):
 
“Relevant Borrower” means the Borrower who owns or will own the Relevant Ship.
 
“Relevant Ship” means the Ship which is financed by the Tranche utilised on the relevant Utilisation Date.
 
1
Borrowers
 
A copy of a certificate of an officer of the Relevant Borrower certifying that each copy document which it is required to provide under this Part B of Schedule 2 (Conditions Precedent) is correct, complete and in full force and effect as at the Utilisation Date of the Advance under the relevant Tranche.
 
2
Ship and other security
 
2.1
A duly executed original of the Mortgage, the General Assignment and any Charterparty Assignment in respect of the Relevant Ship and of each document to be delivered under or pursuant to each of them together with documentary evidence that the Mortgage in respect of the Relevant Ship has been duly registered or (as applicable) recorded as a valid first preferred or (as applicable) priority ship mortgage in accordance with the laws of the jurisdiction of its Approved Flag.
 
2.2
Documentary evidence that:
 
(a)
Ship A is definitively and permanently and Ship B is provisionally registered in the name of the Relevant Borrower under the Approved Flag applicable to the Relevant Ship;
 
(b)
the Relevant Ship is in the absolute and unencumbered ownership of the Relevant Borrower save as contemplated by the Finance Documents;
 
(c)
the Relevant Ship maintains the Approved Classification with the Approved Classification Society free of overdue recommendations and conditions of the Approved Classification Society; and
 
(d)
the Relevant Ship is insured in accordance with the provisions of this Agreement and all requirements in this Agreement in respect of insurances have been complied with.
 
2.3
Documents establishing that the Relevant Ship will, as from the Utilisation Date of the Advance under the Tranche relating to that Ship, be managed commercially by the Approved Commercial Manager and managed technically by the relevant Approved Technical Manager on terms acceptable to the Lender, together with:
 
(a)
a Manager’s Undertaking for each Approved Manager for such Relevant Ship; and
 
(b)
copies of the Inventory of Hazardous Materials relating to such Relevant Ship, the relevant Approved Technical Manager’s Document of Compliance and of the Relevant Ship’s Safety Management Certificate (together with any other details of the applicable Safety Management System which the Lender requires) and of any other documents required under the ISM Code and the ISPS Code in relation to such Relevant Ship including without limitation an ISSC and a Tonnage Certificate.
 
121
2.4
An opinion from an independent insurance consultant acceptable to the Lender on such matters relating to the Insurances as the Lender may require.
 
3
Legal opinions
 
Legal opinions of the legal advisers to the Lender in the jurisdiction of the Approved Flag of the Relevant Ship and such other relevant jurisdictions as the Lender may require.
 
4
Other documents and evidence
 
4.1
A copy of any other Authorisation or other document, opinion or assurance which the Lender considers to be necessary or desirable (if it has notified the Borrowers accordingly) in connection with the entry into and performance of the transactions contemplated by any Transaction Document referred to in paragraph 2 (Ship and other security) above or for the validity and enforceability of any such Transaction Document.
 
4.2
Copies of any charterparties, pool agreement and on-hire certificate in respect of the Relevant Ship.
 
4.3
Evidence that the fees, costs and expenses then due from the Borrowers pursuant to Clause 11 (Fees) and Clause 16 (Costs and Expenses) have been paid or will be paid by the Utilisation Date for the Advance under the relevant Tranche.
 
4.4
Evidence that all sums then due (if any) to the Lender in respect of the Existing Indebtedness, other than the sums financed pursuant to the Tranches, have been paid in full to the Lender.
 
4.5
A copy of each Deed of Release and any relevant notices of reassignment (if applicable) in respect of the Relevant Ship.
 
122
SCHEDULE 3
 
UTILISATION REQUEST
 
From:
Fellow Shipping Co.
 
 Premier Marine Co.
 
 Champion Marine Co.
   
To: Danish Ship Finance A/S

Dated: [ ●] 2023
 
Fellow Shipping Co., Premier Marine Co. and Champion Marine Co. – $43,750,000 Facility Agreement dated 10 October 2022 as amended and restated by a Deed of Accession, Amendment and Restatement dated [●] 2023 (the “Agreement”)
 
1
We refer to the Agreement.  This is a Utilisation Request.  Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.
 
2
We wish to borrow the Advance under Tranche C on the following terms:
 

 Proposed Utilisation Date:
[●] (or, if that is not a Business Day, the next Business Day)
 

 Amount:
[●] or, if less, the Available Facility


Interest Period for Tranche C:
First Interest Period from the Utilisation Date until the 12th of July 2023 and thereafter every 3 Months.
 
3
You are authorised and requested to deduct from the Advance prior to funds being remitted the following amounts set out against the following items:
 
Deductible Items
 
Arrangement Fee
 
Minimum Liquidity Amount (to be transferred to the relevant Retention Account)
 
Net proceeds of Advance          _____________
 
4
We confirm that each condition specified in Clause 4.1 (Initial conditions precedent) and Clause 4.2 (Further conditions precedent) of the Agreement as they relate to the Advance to which this Utilisation Request refers is satisfied on the date of this Utilisation Request.
 
5
The [net] proceeds of this Advance should be credited to [account].
 
123
6
This Utilisation Request is irrevocable.
 
Yours faithfully

[●]
authorised signatory for
Fellow Shipping Co.

[●]
authorised signatory for
Premier Marine Co.

[●]
authorised signatory for
Champion Marine Co.

124
SCHEDULE 4
 
FORM OF COMPLIANCE CERTIFICATE
 

To: Danish Ship Finance A/S as Lender


From:
Seanergy Maritime Holdings Corp.

Fellow Shipping Co.

Premier Marine Co.
 
Champion Marine Co.

Dated: [●]
 
Fellow Shipping Co., Premier Marine Co. and Champion Marine Co. – $43,750,000 Facility Agreement dated 10 October 2022 as amended and restated by a Deed of Accession, Amendment and Restatement dated [●] 2023 (the “Agreement”)
 
1
We refer to the Agreement.  This is a Compliance Certificate.  Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.
 
2
We confirm that:
 
[Insert details of covenants to be certified]
 
3
We confirm that no Default is continuing.
 
Signed:

 
 
Director Director
of of
Fellow Shipping Co. Premier Marine Co.
   
     
Chief Financial Officer
of
Seanergy Maritime Holdings Corp.
  

125
126
SCHEDULE 5

TIMETABLES
 
Delivery of a duly completed Utilisation Request (Clause 5.1 (Delivery of a Utilisation Request))
  
Three Business Days before the intended Utilisation Date (Clause 5.1 (Delivery of a Utilisation Request))

127
SCHEDULE 6
 
REPAYMENT SCHEDULES
 
 

128
 
         

129
     
 

130
 
131
 
132
SCHEDULE 7

REFERENCE RATE TERMS
 
CURRENCY:
  
Dollars.
     
Cost of funds as a fallback
  
Cost of funds will apply as a fallback.
 
Definitions
    
     
Additional Business Days:
  
An RFR Banking Day.
     
Break Costs:
  
Any cost or amount which is incurred or suffered by the Lender (as reasonably determined by the Lender) to the extent that it is attributable to (1) a payment by the Borrowers to the Lender of any amount of principal due or which would have become due under this Agreement prior to the date upon which such amount should have been repaid in accordance with the terms and conditions of this Agreement or (2) failure by the Borrowers to utilise an amount under this Agreement following the delivery by the Borrowers to the Lender of a Utilisation Request which corresponds to all of part of such unutilised amount.
     
Business Day Conventions (definition of “Month” and Clause 9.3 (Non-Business Days)):
  
(a)       If any period is expressed to accrue by reference to a Month or any number of Months then, in respect of the last Month of that period:
     
   
(i)          subject to sub-paragraph (iii) below, if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;
     
   
(ii)        if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and
     
   
(iii)       if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.

133
   
(b)         If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
     
Central Bank Rate:
  
(c)         The short-term interest rate target set by the US Federal Open Market Committee as published by the Federal Reserve Bank of New York from time to time; or

(d)          if that target is not a single figure, the arithmetic mean of:

(i)        the upper bound of the short-term interest rate target range set by the US Federal Open Market Committee and published by the Federal Reserve Bank of New York; and

(ii)         the lower bound of that target range.
     
Central Bank Rate Adjustment:
 
  
In relation to the Central Bank Rate prevailing at close of business on any RFR Banking Day, the 20 per cent. trimmed arithmetic mean (calculated by the Lender), of the Central Bank Rate Spreads for the five most immediately preceding RFR Banking Days for which the RFR is available.
     
Central Bank Rate Spread
  
In relation to any RFR Banking Day, the difference (expressed as a percentage rate per annum) calculated by the Lender of:
 
the RFR for that RFR Banking Day; and
 
the Central Bank Rate prevailing at close of business on that RFR Banking Day.
 
     
Daily Rate:
  
The “Daily Rate” for any RFR Banking Day is:
     
   
(a)          the RFR for that RFR Banking Day; or
     
   
(b)         if the RFR is not available for that RFR Banking Day, the percentage rate per annum which is the aggregate of:
     
   
(i)          the Central Bank Rate for that RFR Banking Day; and

134
   
(ii)         the applicable Central Bank Rate Adjustment; or
     
   
(c)       if paragraph (b) above applies but the Central Bank Rate for that RFR Banking Day is not available, the percentage rate per annum which is the aggregate of:

(i)         the most recent Central Bank Rate for a day which is no more than five RFR Banking Days before that RFR Banking Day; and

(ii)         the applicable Central Bank Rate Adjustment,

rounded, in either case, to four decimal places and if, in either case, that rate is less than zero, the Daily Rate shall be deemed to be zero.
     
Interest Periods
  
     
Length of Interest Period in absence of selection (paragraph (a) of Clause 9.1 (Selection of Interest Periods)):
  
Three Months
     
Periods capable of selection as Interest Periods (paragraph (a) of Clause 9.1 (Selection of Interest Periods)):
  
Three Months
     
Lookback Period:
  
Five RFR Banking Days.
     
Market Disruption Rate:  
The percentage rate per annum which is the aggregate of the cumulative compounded RFR (determined in accordance with the calculation methodology for the Cumulative Compounded RFR Rate in LMA’s Single Currency Compounded Rate Facilities Agreement with a Lookback Period) for the Interest Period of the relevant Loan and (a) in respect of each of Tranche A and Tranche B 1.38% and (b) in respect of Tranche C 1.23%.

 
 
     
Relevant Market:
  
The market for overnight cash borrowing collateralised by US Government securities.

135
Reporting Day:
  
The Business Day which follows the day which is the Lookback Period prior to the last day of the Interest Period.
     
Reporting Times
    
     
Deadline for Lender to report market disruption in accordance with Clause 10.2 (Market disruption)
  
Close of business in London on the Reporting Day for the Loan or the relevant part of the Loan.
     
Deadline for Lender to report their cost of funds in accordance with Clause 10.3 (Cost of funds)
  
Close of business on the date falling two Business Days after the Reporting Day for the Loan or the relevant part of the Loan (or, if earlier, on the date falling three Business Days before the date on which interest is due to be paid in respect of the Interest Period for the Loan or that part of the Loan).
     
RFR:
  
The secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York (or any other person which takes over the administration of that rate) published by the Federal Reserve Bank of New York (or any other person which takes over the publication of that rate).
     
RFR Banking Day:
  
Any day other than:

(a)          a Saturday or Sunday; and

(b)         a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in US Government securities.
     
RFR Contingency Period
  
Fifteen RFR Banking Days

136
SCHEDULE 8

DAILY NON-CUMULATIVE COMPOUNDED RFR RATE
 
The “Daily Non-Cumulative Compounded RFR Rate” for any RFR Banking Day “i” during an Interest Period for the Loan or any part of the Loan is the percentage rate per annum (without rounding, to the extent reasonably practicable for the Lender performing the calculation, taking into account the capabilities of any software used for that purpose) calculated as set out below:
 
 
where:
 
“UCCDRi” means the Unannualised Cumulative Compounded Daily Rate for that RFR Banking Day “i”;
 
“UCCDRi-1” means, in relation to that RFR Banking Day “i”, the Unannualised Cumulative Compounded Daily Rate for the immediately preceding RFR Banking Day (if any) during that Interest Period;
 
“dcc” means 360 or, in any case where market practice in the Relevant Market is to use a different number for quoting the number of days in a year, that number;
 
“ni” means the number of calendar days from, and including, that RFR Banking Day “i” up to, but excluding, the following RFR Banking Day; and
 
the “Unannualised Cumulative Compounded Daily Rate” for any RFR Banking Day (the “Cumulated RFR Banking Day”) during that Interest Period is the result of the below calculation (without rounding, to the extent reasonably practicable for the Lender performing the calculation, taking into account the capabilities of any software used for that purpose):
 
 
where:
 
“ACCDR” means the Annualised Cumulative Compounded Daily Rate for that Cumulated RFR Banking Day;
 
“tni” means the number of calendar days from, and including, the first day of the Cumulation Period to, but excluding, the RFR Banking Day which immediately follows the last day of the Cumulation Period;
 
“Cumulation Period” means the period from, and including, the first RFR Banking Day of that Interest Period to, and including, that Cumulated RFR Banking Day;
 
“dcc” has the meaning given to that term above; and
 
the “Annualised Cumulative Compounded Daily Rate” for that Cumulated RFR Banking Day is the percentage rate per annum (rounded to four decimal places) calculated as set out below:
 
137
 
where:
 
“d0” means the number of RFR Banking Days in the Cumulation Period;
 
“Cumulation Period” has the meaning given to that term above;
 
“i” means a series of whole numbers from one to d0, each representing the relevant RFR Banking Day in chronological order in the Cumulation Period;
 
“DailyRatei-LP” means, for any RFR Banking Day “i” in the Cumulation Period, the Daily Rate for the RFR Banking Day which is the Lookback Period prior to that RFR Banking Day “i”;
 
“ni” means, for any RFR Banking Day “i” in the Cumulation Period, the number of calendar days from, and including, that RFR Banking Day “i” up to, but excluding, the following RFR Banking Day; The “Cumulative Compounded RFR Rate” for any Interest Period for the Loan or any part of the Loan is the percentage rate per annum (rounded to the same number of decimal places as is specified in the definition of “Annualised Cumulative Compounded Daily Rate” in Schedule 8 (Daily Non-Cumulative Compounded RFR Rate)) calculated as set out below:
 
“dcc” has the meaning given to that term above; and
 
“tni” has the meaning given to that term above.
 
138
SCHEDULE 9

CUMULATIVE COMPOUNDED RFR RATE
 
 
 
where:
 
“d0” means the number of RFR Banking Days during the Interest Period;
 
“i” means a series of whole numbers from one to d0, each representing the relevant RFR Banking Day in chronological order during the Interest Period;
 
“DailyRatei-LP” means for any RFR Banking Day “i” during the Interest Period, the Daily Rate for the RFR Banking Day which is the Lookback Period prior to that RFR Banking Day “i”;
 
“ni” means, for any RFR Banking Day “i”, the number of calendar days from, and including, that RFR Banking Day “i” up to, but excluding, the following RFR Banking Day;
 
“dcc” means 360 or, in any case where market practice in the Relevant Market is to use a different number for quoting the number of days in a year, that number; and
 
“d” means the number of calendar days during that Interest Period.
 
139
SCHEDULE 10
 
SUSTAINABILITY MARGIN ADJUSTMENT SCHEDULE
 
In this Schedule 10 (Sustainability Margin Adjustment Schedule):
 
AER:
Shall mean the average efficiency ratio of any vessel in the Fleet, as calculated in accordance with Section 2.1 of the Poseidon Principles as follows:
 
 
Where (a) Ci is the carbon emissions for voyage i computed using the fuel consumption and carbon factor of each type of fuel, (b) DWT is the deadweight of a vessel, and (c) Di is the distance travelled on voyage i. The AER with respect to any vessel in the Fleet is computed for all voyages performed by that vessel over a calendar year.
   
DWT:
Shall mean with respect to any vessel in the Fleet, the difference in tons between the displacement of that vessel in water of relative density of 1025 kg/m3 at the summer load draught (taken as the maximum summer draught as certified in the stability booklet approved by the relevant maritime administration or an organization recognized by it) and the lightweight of that vessel as certified in the stability booklet approved by the relevant maritime administration or an organization recognized by it.
   
Fleet
Shall mean at any relevant time all Fleet Vessels.
   
Fleet Carbon
Intensity
Certificate(s):
Shall mean the certificate(s) from a Recognised Organisation approved by the Lender relating to each vessel in the Fleet and a particular calendar year setting out the AER of a vessel in the Fleet for all voyages performed by it during that calendar year using the ship fuel oil consumption data submitted to the International Maritime Organization, required to be collected and reported in accordance with Regulation 22A of Annex VI in respect of that calendar year and for which the Recognized Organization issued a statement of compliance for fuel oil consumption reporting and evidencing a Vessel’s Fleet Sustainability Score.
   
Fleet
Sustainability
Score:
Shall mean, with respect to any calendar year, the weighted average of all Vessel Sustainability Scores based on Vessel Weighting, as set out in the formula below:
 
   
Owned Days:
Shall mean, for a given vessel in the Fleet, the number of days in a calendar year that such vessel is owned, whether directly or indirectly, by the Parent or its subsidiaries from time to time.
   
Recognised
Organisation:
Shall mean, in respect of any vessel in the Fleet, an organisation approved by the maritime administration of such vessel’s Flag State to verify that the ship energy efficiency management plans of vessels registered in that Flag State are in compliance with Regulation 22A of Annex VI and to issue “statements of compliance for fuel oil consumption reporting” confirming that vessels registered in that Flag State are in compliance with that regulation.

140
Sustainability
Compliance
Certificate:
Shall mean a compliance certificate signed by a Director of the Parent substantially in the form set out in Schedule 11 (Form of Sustainability Compliance Certificate) or any other form satisfactory to the Lender (acting reasonably), that shows to the satisfaction of the Lender the calculation of the Fleet Sustainability Score and sets forth the Sustainability Margin Adjustment.
   
Trajectory
Value:
The median climate alignment score of a vessel type and size in a given year, as set out in the below matrix calculated based on Appendix 3 (Calculation of decarbonization trajectories per ship type and size class) of the Poseidon Principles Technical Guidance (as the same may be amended, updated and developed from time to time):
   
   
AER trajectory value
 
Ship type and size (dwt)
2022
2023
2024
2025
2026
2027
2028
 
Bulk carrier,
0-9.999
20.6950
20.1826
19.6702
19.1578
18.6455
18.1331
17.6207
 
Bulk carrier,
10.000-34.999
6.4407
6.2813
6.1218
5.9624
5.8029
5.6434
5.4840
 
Bulk carrier,
35.000-59.999
4.5799
4.4665
4.3531
4.2398
4.1264
4.0130
3.8996
 
Bulk carrier,
60.000-99.999
3.5176
3.4305
3.3435
3.2564
3.1693
3.0822
2.9951
 
Bulk carrier,
100.000-199.999
2.4097
2.3501
2.2904
2.2307
2.1711
2.1114
2.0518
 
Bulk carrier,
200.000+
2.0750
2.0236
1.9722
1.9209
1.8695
1.8181
1.7668
   
Vessel
Sustainability
 Score:
Shall mean, for a given vessel in the Fleet, and a particular calendar year, the percentage difference between that vessel’s AER and the relevant Trajectory Value at the same point in time, calculated as set out in Section 2.3 of the Poseidon Principles. A vessel’s Vessel Sustainability Score shall be evidenced by the relevant Fleet Carbon Intensity Certificate.
   
Vessel
Weighting:
Shall mean, for a given vessel in the Fleet, and a particular calendar year, the product of (i) Owned Days and (ii) the respective vessel’s DWT.

1
The Borrowers shall furnish to the Lender, not later than 30 June in each calendar year, a Sustainability Compliance Certificate for the prior calendar year (commencing with the calendar year ended 31 December 2022).  Following receipt of the Sustainability Compliance Certificate for the relevant calendar year, the Margin shall increase or decrease subject to achievement against the Fleet Sustainability Score targets (defined in the table below) (rounded to two decimal places) (“Sustainability Margin Adjustment”).
 
2
The Sustainability Margin Adjustment will, subject to delivery of the relevant Sustainability Compliance Certificate, take place the 15th Business Day after 30 June in the relevant calendar year (the “Sustainability Margin Adjustment Effective Date”). The Sustainability Margin Adjustment will apply as follows:
 
141
Sustainability Margin Adjustment in following calendar year
Fleet Sustainability Score Target 2022
Fleet Sustainability Score Target 2023
Fleet Sustainability Score Target 2024
Fleet Sustainability Score Target 2025
Fleet Sustainability Score Target 2026
Fleet Sustainability Score Target 2027+ years
Margin + 0.05%
Fleet Sust.
Score >  1.00
Fleet Sust.
Score > 1.00
Fleet Sust.
Score > 1.00
Fleet Sust.
Score > 1.00
Fleet Sust.
Score > 1.00
Fleet Sust.
Score  > 1.00
Margin – 0.05%
Fleet Sust.
Score < 1.00
Fleet Sust.
Score < 1.00
Fleet Sust.
Score < 1.00
Fleet Sust.
Score < 1.00
Fleet Sust.
Score < 1.00
Fleet Sust.
Score < 1.00

3
The Sustainability Margin Adjustment shall at no time exceed 0.05% as a decrease or an increase from the initial Margin set out in sub-paragraph (a) of that definition (i.e. 2.50% or 2.65%) which would otherwise apply without giving effect to any Sustainability Margin Adjustment. Consequently, as of the first Sustainability Margin Adjustment Effective Date following the date of this Agreement the Margin shall be (i) in the case of Tranche A or Tranche B, either 2.45% per annum or 2.55% per annum and (ii) in the case of Tranche C, either 2.60% per annum or 2.70% per annum.
 
4
If the Borrowers fail to provide a Sustainability Compliance Certificate for a calendar year, the Sustainability Margin Adjustment shall, subject to the cap referred to in paragraph 4 above, increase by 0.05% on the Sustainability Margin Adjustment Effective Date. Any increase in the Margin under this paragraph 5 shall apply until the next Sustainability Margin Adjustment Effective Date.  If the Borrowers fail to provide a Sustainability Compliance Certificate within the required timeframe for a calendar year due to unexpected delays/difficulties, they may request for a grace period of up to 30 days to provide such Sustainability Compliance Certificate, provided that the Margin Adjustment Effective Date shall remain unchanged. For the avoidance of doubt, the Borrowers may elect not to furnish a Sustainability Compliance Certificate and such election will not constitute a Default or an Event of Default.
 
5
If there are material changes to Trajectory Values due to changes made by IMO or otherwise, the Borrowers and the Lender will enter into a consultation period of up to 60 Business Days (or such longer period as may be agreed) to agree on a new Sustainability Margin Adjustment mechanism and make any necessary changes to this Agreement. If no agreement can be reached, the Borrowers shall be entitled to elect to (a) continue to apply the existing provisions of this Schedule 10 (Sustainability Margin Adjustment Schedule) or (b) disregard the provisions of this Schedule 10 (Sustainability Margin Adjustment Schedule) and all other provisions of this Agreement relating to the Sustainability Margin Adjustment, in which case the Margin of 2.50% for each of Tranche A and Tranche B and 2.65% for Tranche C per annum shall apply.
 
6
Upon the disapplication of the Sustainability Margin Adjustment mechanism, the Borrowers must ensure that no further announcement, disclosure, or communication refers to the Agreement and the Facility granted hereunder as a “Sustainability Linked Loan Facility” in any way. For the avoidance of doubt, the Borrowers do not need to rectify previous publications which may have referred to the Sustainability Linked Loan Facility status which were correct at the time of publication.
 
142
SCHEDULE 11

FORM OF SUSTAINABILITY COMPLIANCE CERTIFICATE
 
To:
DANISH SHIP FINANCE A/S as Lender

Sankt Annæ Plads 3

DK-1250 Copenhagen C

Denmark
   
From:
 SEANERGY MARITIME HOLDINGS CORP.
 
Dated:  [●]
 
Dear Sirs
 
Fellow Shipping Co., Premier Marine Co. and Champion Marine Co. – $43,750,000 Facility Agreement dated 10 October 2022 as amended and restated by a Deed of Accession, Amendment and Restatement dated [●] 2023 (the “Agreement”)
 
1
We refer to the Agreement. This is a Sustainability Compliance Certificate for calendar year [●] (the “Relevant Year”).  Terms defined in the Agreement have the same meaning when used in this Sustainability Compliance Certificate unless given a different meaning in this Sustainability Compliance Certificate.
 
2
We confirm that in respect of the Relevant Year, the Fleet Sustainability Score calculated in accordance with the Agreement is as follows:
 
IMO no.
Ship
DWT
Distance (D)
CO2 (C)
AER
Owned Days
[●]
A
[●]
[●]
[●]
[●]
  
[●]
B
[●]
[●]
[●]
[●]
  
[●]
C
[●]
[●]
[●]
[●]
  
[●]
D
[●]
[●]
[●]
[●]
  
Fleet Sustainability Score
[●]

3
We confirm that the above AER has been verified by [Name of Approved Classification Society] on a vessel-by-vessel basis as set out in the Fleet Carbon Intensity Certificates.
 
4
Enclosed with this Sustainability Compliance Certificate are the Fleet Carbon Intensity Certificates from a Recognized Organization for each vessel in the Fleet which sets out each such vessel’s Vessel Sustainability Score.
 
143
5
For the 12-month period as and from the immediately next Sustainability Margin Adjustment Effective Date, the Margin applying in respect of all Loans under the Agreement should be [[●]] per cent per annum.
 
Signed by:
 

Chief Financial Officer of SEANERGY MARITIME HOLDINGS CORP.
 
144
EXECUTION PAGES
 
BORROWERS

SIGNED by
)
duly authorised attorney-in-fact
)
for and on behalf of
)
FELLOW SHIPPING CO.
)
in the presence of:
)
   
Witness’ signature:
)
Witness’ name:
)
Witness’ address:
)
   
SIGNED by
)
duly authorised attorney-in-fact
)
for and on behalf of
)
PREMIER MARINE CO.
)
in the presence of:
)
   
Witness’ signature:
)
Witness’ name:
)
Witness’ address:
)
   
SIGNED by
)
duly authorised attorney-in-fact
)
for and on behalf of
)
CHAMPION MARINE CO.
)
in the presence of:
)
   
Witness’ signature:
)
Witness’ name:
)
Witness’ address:
)
   
GUARANTOR
  
   
SIGNED by
)
duly authorised attorney-in-fact
)
for and on behalf of
)
SEANERGY MARITIME HOLDINGS CORP.
)
in the presence of:
)
   
Witness’ signature:
)
Witness’ name:
)
Witness’ address:
)

145
ORIGINAL LENDER
  
   
SIGNED by
)
duly authorised
)
for and on behalf of
)
DANISH SHIP FINANCE A/S
)
in the presence of:
)
   
Witness’ signature:
)
Witness’ name:
)
Witness’ address:
)


146
EX-4.43 12 ef20015287_ex4-43.htm EXHIBIT 4.43
Exhibit 4.43

PART II
BARECON 2001 Standard Bareboat Charter

 
 

1.
Shipbroker
UNIVERship Co., Ltd., Japan & Fearnley Securities AS, Norway
 2.
Place and date
24th April 2023
3.
Owners/Place of business (Cl.1)
Village Seven Co., Ltd. (99.99% ownership)
6-21、Konan 3-chome, Minato-ku, Tokyo, Japan , and
 
V7 Fune Inc. (0.01% ownership)
BICSA Financial Center, 60th Floor, Balboa Avenue,
Panama City, Republic of Panama
 
c/o6-21, Konan 3-chome, Minato-ku, Tokyo, Japan
Email:
 4.
Bareboat Charterers / Place of business (Cl.1)
Lord Ocean Navigation Co.
 
(guaranteed by Seanergy Maritime Holdings Corp., of the Republic of the Marshall Islands)
80 Broad Str, Monrovia, Republic of Liberia
 
c/o 154 Vouliagmenis Avenue,
16674 Glyfada, Greece
Email:
5.
Vessel’s name, call sign and flag (Cl. 1 and 3)
MV Lordship
Call Sign: A8SZ3
Flag: Liberia
6.
Type of Vessel
Bulk carrier

 7.
GT/NT
93564/59500 tons
8.
When / Where built
2010
Hyundai Heavy Industries
 9.
Total DWT (abt.) in metric tons on summer freeboard
178,838.4 tons
10.
Classification Society (Cl.3)
BV or other IACS
 11.
Date of last special survey by the Vessel’s classification  society
2 August 2019
12.
Further particulars of Vessel (also indicate minimum number of months’ validity of class certificates agreed acc. to (Cl.3)
13.
Port or Place of delivery (Cl.3)
Safely afloat at an accessible safe berth or anchorage at a safe port or at sea within World Wide Range at the Charterer’s option.
 14.
Time for delivery (Cl. 4)
25th April 2023 – 26 May 2023 in Charterer’s option
15. Cancelling date (Cl.5)
26 May 2023
16.
Port or Place of redelivery (Cl.15)
Safely afloat at an accessible safe berth or anchorage at a safe
port or place worldwide, in Charterers’ option
 17.
No. of months’ validity of trading and class certificates
upon redelivery (Cl. 15)
minimum 3 months
18.
Running days’ notice if other than stated in Cl.4
N/A
 19.
Frequency of dry-docking (Cl. 10(g))
As required by the Classification Society
20.
Trading limits (Cl. 6)
World Wide trading within Institute Warranty Limits (IWL). Charterers may breach IWL against paying all additional premium/expenses. North Korea and States sanctioned by UN to be excluded in case sanctions apply to Charterers and/or Vessel and prohibit trading, and Owners to be informed by Charterers. Failure to provide such notifications shall not constitute a breach of this Charter, but if such calling constitute a breach of UN sanctions, then Charterers to undertake to indemnify Owners against all direct loss and costs sustained as a result of such violation.
21.
Charter period
4 years and 5 months from delivery
 22.
Charter hire (Cl. 11)
See also Clause 44
 
Fixed part: USD6,940.64 per day; plus
Floating part: (3M CME TERM SOFR + 3.00%) x Loan
Outstanding x Number of Days / 360
 
Loan Outstanding as per Clause 44.
If 3M CME TERM SOFR falls below zero, then 3M CME TERM SOFR equal to zero to be applied to calculate the
Floating Part of the Charter Hire.
23.
New class and other safety requirements (state percentage of Vessel’s insurance value acc. to Box 29) (Cl.10 (a)(ii))
N/A
24.
Rate of interest payable acc. to Cl. 11 (f) and, if applicable, acc.
to PART IV
3 month CME TERM SOFR plus 3 (three) percentage points per
annum
 25.
Currency and method of payment (Cl. 11)
USD, payable monthly in advance by bank transfer
(Floating part of the Charter Hire to be determined no later than 5 Banking Days before hire due date)

Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document
will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org.
First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.

26.
Place of payment; also state beneficiary and bank account (Cl. 11)
SUMITOMO MITSUI BANKING CORPORATION
Address: 1-1, Nishi-Shinjuku 2-chome, Shinjuku-ku, Tokyo,
Japan
Dollar Ordinary a / c no:
Account Name: VILLAGE SEVEN CO., LTD.
Swift Code:　
 
 27.
Bank guarantee / bond (sum and place) (Cl. 24) (optional)
N/A
 
28.
Mortgage(s), if any (state whether 12 (a) or (b) applies; if 12 (b)
applies state date of Financial Instrument and name of
Mortgage(s) / Place of business) (Cl.12)
SUMITOMO MITSUI BANKING CORPORATION
Address: 1-1, Nishi-Shinjuku 2-chome, Shinjuku-ku, Tokyo,
Japan
Date of Financial Instrument: 〔TBA〕
 
 29.
Insurance (hull and machinery and war risks) (state value
acc. to Cl. 13(f) or, if applicable, acc. to Cl. 14(k)) (also
state if Cl. 14 applies)
See Clause 41
30.
Additional insurance cover, if any, for Owners’ account limited to (Cl. 13 (b) or, if applicable, Cl. 14(g))

N/A
 31.
Additional insurance cover, if any, for Charterers’ account limited to (Cl. 13 (b) or, if applicable, Cl. 14(g))

N/A
32.
Latent defects (only to be filled in if period other than stated in
Cl. 3)
N/A
 33.
Brokerage commission and to whom payable (Cl. 27)
N/A
34.
Grace period (state number of clear banking days) (Cl.28)
Five (5) Banking days
 35.
Dispute Resolution (state 30 (a), 30(b) or 30(c); if 30(c) agreed Place of Arbitration must be stated (Cl. 30)
(a) English law, London arbitration
36.
War cancellation (indicate countries agreed) (Cl.26 (f))
N/A
37.
Newbuilding Vessel (indicate with “yes” or “no” whether PART
III applies) (optional)
No
 38.
 Name and place of Builders (only to be filled in if PART III applies)
N/A
39.
Vessel’s Yard Building No. (only to be filled in if PART III applies)
N/A
 40.
Date of Building Contract (only to be filled in if PART III applies)
N/A
41.
Liquidated damages and costs shall accrue to (state party acc. to Cl. 1
a)
b)
c)
42.
Hire / Purchase agreement (indicate with “yes” or “no” whether PART IV applies) (optional)
See however Clause 40
 43.
Bareboat Charter Registry (indicate with “yes” or “no” whether PART V applies) (optional)
Yes, in Charterers’ option
44.
Flag and Country of the Bareboat Charter Registry (only to be filled in if PART V applies) (optional)
Liberia
 45.
Country of the Underlying Registry (only to be filled in if PART V applies)
Liberia
46.
Number of additional clauses covering special provisions, if agreed
See Clause 32-47
 
PREAMBLE - It is mutually agreed that this Contract shall be performed subject to the conditions contained in this Charter which shall include PART I and PART II. In the event of a conflict of conditions, the provisions of PART I shall prevail over those of PART II to the extent of such conflict but no further. It is further mutually agreed that PART III and/or PART IV and/or PART V shall only apply and only form part of this Charter if expressly agreed and stated in Boxes 37, 42 and 43. If PART III and/or PART IV and/or PART V apply, it is further agreed that in the event of a conflict of conditions, the provisions of PART I and PART II shall prevail over those of PART III and/or PART IV and/or PART V to the extent of such conflict but no further.

Village Seven Co., Ltd. & V7 FUNE Inc.
Lord Ocean Navigation Co.
Signature (Owners)

 /s/ Mamoru Nanamura
Signature (Charterers)

 /s/ Stavros Gyftakis
Mamoru Nanamura
Stavros Gyftakis
Representative Director/President of each of the Owners
Director/ Treasurer

Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document
will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org.
First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.
PART II
BARECON 2001 Standard Bareboat Charter
1
1. Definitions
2
In this Charter, the following terms shall have the
3
meanings hereby assigned to them:
4
“The Owners” shall mean the party identified in Box 3;
5
“The Charterers” shall mean the party identified in Box 4;
6
“The Vessel” shall mean the vessel named in Box 5 and
7
with particulars as stated in Boxes 6 to 12.
8
“Financial Instrument” means the mortgage, deed of
9
covenant or other such financial security instrument as
10
annexed to this Charter and stated in Box 28.
“MOA” means the Memorandum of Agreement entered into between the Owners as buyers and the Charterers as sellers dated April ____, 2023.
11
“Banking Days” means a day on which banks are open for transaction of business of the nature required by this Charter in Liberia, Tokyo, Greece, London and New York.
12
2. Charter Period
13
In consideration of the hire detailed in Box 22,
14
the Owners have agreed to let and the Charterers have
15
agreed to hire the Vessel for the period stated in Box 21
16
(“The Charter Period”).
17
3. Delivery See also clauses 33, 34 and 35.
23
The Vessel shall be delivered by the Owners and taken
24
over by the Charterers at the port/berth/anchorage or place indicated in
25
Box 13
34
(c) The delivery of the Vessel by the Owners and the
35
taking over of the Vessel by the Charterers shall
36
constitute a full performance by the Owners of all the
37
Owners’ obligations under this Clause 3, and thereafter
38
the Charterers shall not be entitled to make or assert
39
any claim against the Owners on account of any
40
conditions, representations or warranties expressed or
41
implied with respect to the Vessel.
4. Time for Delivery See clause 33
60
5. Cancelling See clause 33
86
6. Trading Restrictions
87
The Vessel shall be employed in lawful trades for the
88
carriage of suitable lawful merchandise within the trading
89
limits indicated in Box 20.
90
The Charterers undertake not to employ the Vessel or
91
suffer the Vessel to be employed otherwise than in
92
conformity with the terms of the contracts of insurance
93
(including any warranties expressed or implied therein)
94
without first obtaining the consent of the insurers to such
95
employment and complying with such requirements as
96
to extra premium or otherwise as the insurers may
97
prescribe.
98
The Charterers also undertake not to employ the Vessel
99
or suffer her employment in any trade or business which
100
is forbidden by the law of any country to which the Vessel
101
may sail or is otherwise illicit or in carrying illicit or
102
prohibited goods or in any manner whatsoever which
103
may render her liable to condemnation, destruction,
104
seizure or confiscation.
105
Notwithstanding any other provisions contained in this
106
Charter it is agreed that nuclear fuels or radioactive
107
products or waste are specifically excluded from the
108
cargo permitted to be loaded or carried under this

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will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org.
First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.
PART II
BARECON 2001 Standard Bareboat Charter
109
Charter. This exclusion does not apply to radio-isotopes
110
used or intended to be used for any industrial,
111
commercial, agricultural, medical or scientific purposes
112
provided the Owners’ prior approval has been obtained
113
to loading thereof.
114
7. Surveys on Delivery and Redelivery See clauses 36 and 37
115
(not applicable when Part III applies, as indicated in Box 37)
Not earlier than 45 days nor later than 30 days or if not possible then as soon as the Vessel becomes available before re-delivery of the Vessel, the Owners and the Charterers shall jointly agree upon the appointment of an independent surveyor for the purpose of determining in writing the condition of the Vessel at the time of redelivery hereunder. The surveyor, whose decision shall be final and binding on both parties, shall report in writing, specifying all items, if any, which have not been properly maintained in accordance with the terms and conditions of the Charter and the work required to correct such deficiencies. The costs of such a surveyor shall be equally shared between the parties. In the event that the parties are not able to agree upon a single surveyor, each shall appoint their own and the two surveyors so appointed shall conduct a joint survey of the Vessel. In such event, each party shall pay their own appointed surveyor’s costs. The survey shall be carried out at the port of redelivery and in Charterer’s time. Any works required as a result of such survey shall be carried by the Charterer prior to their redelivering of the Vessel. This clause shall not apply if Charterers exercise their purchase option as set out in Clause 40.
124
8. Inspection
125
The Owners shall, once a year, have the right after giving
126
reasonable notice to the Charterers to inspect or survey
127
the Vessel or instruct a duly authorised surveyor to carry
128
out such survey on their behalf provided it does not interfere with the operation and trading of the Vessel and/or crew:-
129
(a) to ascertain the condition of the Vessel and satisfy
130
themselves that the Vessel is being properly repaired
131
and maintained. The costs and fees for such inspection
132
or survey shall be paid by the Owners unless the Vessel
133
is found to require repairs or maintenance in order to
134
achieve the condition so provided;
135
(b) in dry-dock if the Charterers have not dry-docked
136
Her in accordance with Clause 10(g). The costs and fees
137
for such inspection or survey shall be paid by the
138
Charterers; and
144
All time used in respect of inspection, survey or repairs
145
shall be for the Charterers’ account and form part of the
146
Charter Period.
147
The Charterers shall also permit the Owners to inspect
148
the Vessel’s log books whenever reasonably requested and shall
149
whenever required by the Owners furnish them with full
150
information regarding any casualties or other accidents
151
or damage to the Vessel.
152
9. Inventories, Oil and Stores
168
10. Maintenance and Operation
169
(a)(i) Maintenance and Repairs - During the Charter
170
Period the Vessel shall be in the full possession
171
and at the absolute disposal for all purposes of the
172
Charterers and under their complete control in
173
every respect. The Charterers shall maintain the
174
Vessel, her machinery, boilers, appurtenances and
175
spare parts in a good state of repair, in efficient
176
operating condition and in accordance with good
177
commercial maintenance practice and,
178
, at their
179
own expense they shall at all times keep the
180
Vessel’s Class fully up to date with the Classification
181
Society indicated in Box 10 and maintain all other
182
necessary certificates in force at all times.
183
(ii) New Class and Other Safety Requirements - In the
184
event of any improvement, structural changes or
185
new equipment becoming necessary for the
186
continued operation of the Vessel by reason of new
187
class requirements or by compulsory legislation
including but not limited to Ballast Water Treatment System, the cost and time of compliance shall be for the Charterers account. Notwithstanding the foregoing, Charterers are allowed to make improvements to the Vessel provided cost of same to be for the Charterers account.
Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document
will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org.
First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.
PART II
BARECON 2001 Standard Bareboat Charter
201
(iii) Financial Security - The Charterers shall maintain
202
financial security or responsibility in respect of third
203
party liabilities as required by any government,
204
including federal, state or municipal or other division
205
or authority thereof, to enable the Vessel, without
206
penalty or charge, lawfully to enter, remain at, or
207
leave any port, place, territorial or contiguous
208
waters of any country, state or municipality in
209
performance of this Charter without any delay. This
210
obligation shall apply whether or not such
211
requirements have been lawfully imposed by such
212
government or division or authority thereof.
213
The Charterers shall make and maintain all arrange-
214
ments by bond or otherwise as may be necessary to
215
satisfy such requirements at the Charterers’ sole
216
expense and the Charterers shall indemnify the Owners
217
against all consequences whatsoever (including loss of
218
time) for any failure or inability to do so.
219
(b) Operation of the Vessel - The Charterers shall at
220
their own expense and by their own procurement man,
221
victual, navigate, operate, supply, fuel and, whenever
222
required, repair the Vessel during the Charter Period
223
and they shall pay all charges and expenses of every
224
kind and nature whatsoever incidental to their use and
225
operation of the Vessel under this Charter, including
226
annual flag State fees and any foreign general
227
municipality and/or state taxes. The Master, officers
228
and crew of the Vessel shall be the servants of the Charterers
229
for all purposes whatsoever, even if for any reason
230
appointed by the Owners.
231
Charterers shall comply with the regulations regarding
232
officers and crew in force in the country of the Vessel’s
233
flag or any other applicable law.
234
(c) The Charterers shall keep the Owners and the
235
mortgagee(s) advised of the intended employment,
236
planned dry-docking and major repairs of the Vessel,
237
as reasonably required.
238
(d) Flag and Name of Vessel – The Owners have no rights to change the name and the flag of the Vessel during the Charter Period. During the Charter Period, the Charterers shall have the liberty to paint the Vessel in their own colours, install and display their
239
funnel insignia and fly their own house flag. The
240
Charterers shall also have the liberty, with the Owners’
241
consent, which shall not be unreasonably withheld, to
242
change the Class (to be a member of IACS) during
243
the Charter Period by providing 14 Banking Days prior notice to the Owners and such expense shall be for Charterer’s account. In case Charterers do not exercise their Purchase Option, as set out in clause 40,painting and re-painting, instalment
244
and re-instalment, registration and re-registration at redelivery, if
245
required by the Owners, shall be at the Charterers’
246
expense and time. Tonnage tax charged on the basis of tonnage by the Vessel’s flag state during the Charter Period for current and any new flag to be for Charterers’ account. During the Charter Period, the Charterers shall have the option to change the flag of the Vessel with the Owners’ prior written consent which shall not be unreasonably withheld or delayed, provided that all costs and expense incurred by the Owners in relation to flag changes (including but not limited to documentation fee in relation to the Financial Documents and deletion of the existing registration of the ownership and mortgage of the Vessel and the new registration of ownership and mortgage over the Vessel) shall be on Charterers’ account.
247
(e) Changes to the Vessel – Subject to Clause 10(a)(ii),
248
the Charterers shall make no structural changes in the
249
Vessel or changes in the machinery, boilers, appurten-
250
ances or spare parts thereof without in each instance
first securing the Owners’ approval thereof. Notwithstanding the above, Owners’ consent will not be required for any changes (including structural changes) to the vessel related to the installation of the ammonia (propulsion) system on the Vessel. 
254    .
255
(f) Use of the Vessel’s Outfit, Equipment and
256
Appliances - The Charterers shall have the use of all
257
outfit, equipment, and appliances on board the Vessel
258
at the time of delivery, provided the same or their
259
substantial equivalent shall be returned to the Owners
260
on redelivery in the same condition as
261
when received, ordinary wear and tear excepted. The
262
Charterers shall from time to time during the Charter
263
Period replace such items of equipment as shall be so
264
damaged or worn as to be unfit for use. The Charterers
265
are to procure that all repairs to or replacement of any
266
damaged, worn or lost parts or equipment be effected
267
in such manner (both as regards workmanship and
268
quality of materials) as not to diminish the value of the
269
Vessel. The Charterers have the right to fit additional
270
equipment at their expense and risk but the Charterers
271
shall remove such equipment at the end of the period if
272
requested by the Owners. Any equipment including radio
273
equipment on hire on the Vessel at time of delivery shall
274
be kept and maintained by the Charterers and the
275
Charterers shall assume the obligations and liabilities
276
of the Owners under any lease contracts in connection
277
therewith and shall reimburse the Owners for all
278
expenses incurred in connection therewith, also for any
279
new equipment required in order to comply with radio
280
regulations.
281
(g) Periodical Dry-Docking - The Charterers shall dry-
282
dock the Vessel and clean and paint her underwater
283
parts whenever the same may be necessary,
284
285
286
287
288
11. Hire
289
(a) The Charterers shall pay hire due to the Owners
 
Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document
will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org.
First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.
PART II
BARECON 2001 Standard Bareboat Charter
290
punctually in accordance with the terms of this Charter
291
in respect of which time shall be of the essence.
292
(b) The Charterers shall pay to the Owners for the hire
293
of the Vessel the rate indicated in
Box 22 which shall be payable monthly
in advance, the first hire being
296
payable on the date and hour of the Vessel’s delivery to
297
the Charterers. Hire shall be paid continuously
298
throughout the Charter Period.
299
(c) Payment of hire shall be made in cash without
300
discount in the currency and in the manner indicated
301
Box 25 and at the place mentioned in Box 26.
302
(d) Final payment of hire, if for a period of less than
303
one calendar month , shall be calculated proportionally
304
according to the number of days and hours remaining
305
before redelivery and advance payment to be effected
306
accordingly.
314
(f) Any delay in payment of hire shall entitle the
315
Owners to interest at the rate per annum as agreed
316
in Box 24.
321
(g) Payment of interest due under sub-clause 11(f)
322
shall be made within seven (7) Banking Days of the date
323
of the Owners’ invoice specifying the amount payable
324
or, in the absence of an invoice, at the time of the next
325
hire payment date.
326
12. Mortgage
327
(only to apply if Box 28 has been appropriately filled in)
332
*)  (b) The Vessel chartered under this Charter is financed
333
by a mortgage according to the Financial Instrument.
At the reasonable request of the Owner, the Charterers
shall provide such documents and information as the
 Owners reasonably needs towards their financiers.
347
 The Owners warrant that
348
they have not effected any mortgage(s) other than stated
349
in Box 28 and that they shall not agree to any
350
amendment of the mortgage(s) referred to in Box 28 or
351
effect any other mortgage(s) without the prior consent
352
of the Charterers, which shall not be unreasonably
353
withheld.
354
*)  (Optional, Clauses 12(a) and 12(b) are alternatives;
355
indicate alternative agreed in Box 28).
356
13. Insurance and Repairs see also clause 41
357
(a) During the Charter Period the Vessel shall be kept
358
insured by the Charterers at their expense against hull
359
and machinery, war and Protection and Indemnity risks
360
(and any risks against which it is compulsory to insure
361
for the operation of the Vessel, including maintaining
362
financial security in accordance with sub-clause
363
10(a)(iii)) in such form as the Owners shall in writing approve, which approval shall not be unreasonably withheld
364
365
. Such insurances shall be arranged by the
366
Charterers to protect the interests of both the Owners
367
and the Charterers and the mortgagee(s) (if any), and
368
The Charterers shall be at liberty to protect under such
369
insurances the interests of any managers they may
370
appoint. Insurance policies shall cover the Owners and
371
the Charterers according to their respective interests.
372
Subject to the provisions of the Financial Instrument, if
373
any, and the approval of the Owners and the insurers,
374
the Charterers shall effect all insured repairs and shall
375
undertake settlement and reimbursement from the
376
insurers of all costs in connection with such repairs as
377
well as insured charges, expenses and liabilities to the
378
extent of coverage under the insurances herein provided
379
for.
380
The Charterers also to remain responsible for and to
381
effect repairs and settlement of costs and expenses
382
incurred thereby in respect of all other repairs not
383
covered by the insurances and/or not exceeding any
384
possible franchise(s) or deductibles provided for in the
385
insurances.
386
All time used for repairs under the provisions of sub-
387
clause 13(a) and for repairs of latent defects according
388
to Clause 3(c) above, including any deviation, shall be
389
for the Charterers’ account.
390
(b)
391
392
393
The Owners or
394
the Charterers as the case may be shall immediately
395
furnish the other party with particulars of any additional
396
insurance effected, including copies of any cover notes
397
or policies and the written consent of the insurers of
398
any such required insurance in any case where the
399
consent of such insurers is necessary.
400
(c) The Charterers shall upon the request of the
401
Owners, provide reasonable information and promptly execute such
402
documents as may be reasonably required to enable the Owners to
403
comply with the insurance provisions of the Financial
404
Instrument. Cost and time, if any, for Owners’ account.
405
(d) Subject to the provisions of the Financial Instru-
406
ment, if any, should the Vessel become an actual,
407
constructive, compromised or agreed total loss under
408
the insurances required under sub-clause 13(a), all
409
insurance payments for such loss shall be paid in accordance with clause 41 to the
 
Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document
will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org.
First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.
PART II
BARECON 2001 Standard Bareboat Charter
410
Owners who shall distribute the moneys between the
411
Owners and the Charterers according to their respective
412
interests. The Charterers undertake to notify the Owners
413
and the mortgagee(s), if any, of any occurrences in
414
consequence of which the Vessel is likely to become a
415
total loss as defined in this Clause.
416
(e) The Owners shall upon the request of the
417
Charterers, promptly execute such documents as may
418
be required to enable the Charterers to abandon the
419
Vessel to insurers and claim a constructive total loss.
420
(f) For the purpose of insurance coverage against hull
421
and machinery and war risks under the provisions of
422
sub-clause 13(a), the value of the Vessel is the sum
423
indicated in Clause 41.
513
15. Redelivery
514
At the expiration of the Charter Period the Vessel shall
515
be redelivered by the Charterers to the Owners at a
516
safe and ice-free port or place as indicated in Box 16, in
517
such ready safe berth as the Charterers may direct. The
518
Charterers shall give the Owners not less than thirty
519
(30) running days’ preliminary notice of expected date,
520
range of ports of redelivery or port or place of redelivery
521
and not less than fourteen (14)  running days’ definite
522
notice of expected date and port or place of redelivery.
523
Any changes thereafter in the Vessel’s position shall be
524
notified immediately to the Owners.
525
The Charterers warrant that they will not permit the
526
Vessel to commence a voyage (including any preceding
527
ballast voyage) which cannot reasonably be expected
528
to be completed in time to allow redelivery of the Vessel
529
within the Charter Period.  Notwithstanding the above,
530
should the Charterers fail to redeliver the Vessel within
531
the Charter Period, the Charterers shall pay the daily
532
equivalent to the rate of hire stated in Box 22 (USD 6,940.64) plus 10 per cent. or to the market rate, whichever is the higher,

Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document
will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org.
First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.
PART II
BARECON 2001 Standard Bareboat Charter
533
534
for the number of days by which the Charter Period is
535
exceeded.  All other terms, conditions and provisions of
536
this Charter shall continue to apply.
537
Subject to the provisions of Clause 10, the Vessel shall
538
be redelivered to the Owners in the same
539
 condition and class as that in which she
540
was delivered, fair wear and tear not affecting class
541
excepted.
542
The Vessel upon redelivery shall have her survey cycles
543
up to date and trading and class certificates valid for at
544
least the number of months agreed in Box 17.
This Clause shall not apply if the Charterers exercise their purchase option set out in clause 40, in which event, a Protocol of Delivery and Acceptance and a Bill of Sale will be signed.
545
16. Non-Lien
546
The Charterers will not suffer, nor permit to be continued,
547
any lien or encumbrance incurred by them or their
548
agents, which might have priority over the title and
549
interest of the Owners in the Vessel.
550
551
552
553
554
555
556
557
558
17. Indemnity
559
(a) The Charterers shall indemnify the Owners against
560
any loss, damage or expense incurred by the Owners
561
arising out of or in relation to the operation of the Vessel
562
by the Charterers, and against any lien of whatsoever
563
nature arising out of an event occurring during the
564
Charter Period.  If the Vessel be arrested or otherwise
565
detained by reason of claims or liens arising out of her
566
operation hereunder by the Charterers, the Charterers
567
shall at their own expense take all reasonable steps to
568
secure that within a reasonable time the Vessel is
569
released, including the provision of bail.
570
Without prejudice to the generality of the foregoing, the
571
Charterers agree to indemnify the Owners against all
572
consequences or liabilities arising from the Master,
573
officers or agents signing Bills of Lading or other
574
documents.
575
(b) If the Vessel be arrested or otherwise detained by
576
reason of a claim or claims against the Owners, the
577
Owners shall at their own expense take all necessary
578
steps to secure that, within a reasonable time,  the Vessel
579
is released, including the provision of bail.
580
In such circumstances the Owners shall indemnify the
581
Charterers against any loss, damage or expense
582
incurred by the Charterers (including hire paid under
583
this Charter) as a direct consequence of such arrest or
584
detention.
585
18. Lien
586
The Owners to have a lien upon all cargoes, sub-hires
587
and sub-freights belonging or due to the Charterers or
588
any sub-charterers and any Bill of Lading freight for all
589
claims under this Charter, and the Charterers to have a
590
lien on the Vessel for all moneys paid in advance and
591
not earned.
592
19. Salvage
593
All salvage and towage performed by the Vessel shall
594
be for the Charterers’ benefit and the cost of repairing
595
damage occasioned thereby shall be borne by the
596
Charterers.
597
20. Wreck Removal
598
In the event of the Vessel becoming a wreck or
599
obstruction to navigation the Charterers shall indemnify
600
the Owners against any sums whatsoever which the
601
Owners shall become liable to pay and shall pay in
602
consequence of the Vessel becoming a wreck or
603
obstruction to navigation.
604
21. General Average
605
The Owners shall not contribute to General Average.
606
22. Assignment, Sub-Charter and Sale see also clause 38
607
(a) The Charterers shall not assign this Charter nor
608
sub-charter the Vessel on a bareboat basis (internal bareboat charters excluded) except with
609
the prior consent in writing of the Owners, which shall
610
not be unreasonably withheld or delayed, and subject to such terms
611
and conditions as the Owners shall approve.
612
(b) see clauses 39 and 40  
617
23. Contracts of Carriage
618
*)  (a) The Charterers are to procure that all documents
619
issued during the Charter Period evidencing the terms
620
and conditions agreed in respect of carriage of goods
621
shall contain a paramount clause incorporating any
622
legislation relating to carrier’s liability for cargo
623
compulsorily applicable in the trade; if no such legislation
624
exists, the documents shall incorporate the Hague Rules or Hague-Visby
625
Rules. The documents shall also contain the New Jason
626
Clause and the Both-to-Blame Collision Clause.
638
24. Bank Guarantee
645
25. Requisition/Acquisition
646
(a) In the event of the Requisition for Hire of the Vessel
647
by any governmental or other competent authority
648
(hereinafter referred to as “Requisition for Hire”)
649
irrespective of the date during the Charter Period when
650
“Requisition for Hire” may occur and irrespective of the
651
length thereof and whether or not it be for an indefinite
 
Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document
will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org.
First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.
PART II
BARECON 2001 Standard Bareboat Charter
652
or a limited period of time, and irrespective of whether it
653
may or will remain in force for the remainder of the
654
Charter Period, this Charter shall not be deemed thereby
655
or thereupon to be frustrated or otherwise terminated
656
and the Charterers shall continue to pay the stipulated
657
hire in the manner provided by this Charter until the time
658
when the Charter would have terminated pursuant to
659
any of the provisions hereof always provided however
660
that in the event of “Requisition for Hire” any Requisition
661
Hire or compensation received or receivable by the
662
Owners shall be payable to the Charterers during the
663
remainder of the Charter Period or the period of the
664
“Requisition for Hire” whichever be the shorter.
665
(b) In the event of the Owners being deprived of their
666
ownership in the Vessel by any Compulsory Acquisition
667
of the Vessel or requisition for title by any governmental
668
or other competent authority (hereinafter referred to as
669
“Compulsory Acquisition”), then, irrespective of the date
670
during the Charter Period when “Compulsory Acqui-
671
sition” may occur, this Charter shall be deemed
672
terminated as of the date of such “Compulsory
673
Acquisition”. In such event Charter Hire to be considered
674
as earned and to be paid up to the date and time of
675
such “Compulsory Acquisition”.
676
26. War
677
(a) For the purpose of this Clause, the words “War
678
Risks” shall include any war (whether actual or
679
threatened), act of war, civil war, hostilities, revolution,
680
rebellion, civil commotion, warlike operations, the laying
681
of mines (whether actual or reported), acts of piracy,
682
acts of terrorists, acts of hostility or malicious damage,
683
blockades (whether imposed against all vessels or
684
imposed selectively against vessels of certain flags or
685
ownership, or against certain cargoes or crews or
686
otherwise howsoever), by any person, body, terrorist or
687
political group, or the Government of any state
688
whatsoever, which may be dangerous or are likely to be
689
or to become dangerous to the Vessel, her cargo, crew
690
or other persons on board the Vessel.
703
(c) The Vessel shall not load contraband cargo, or to
704
pass through any blockade, whether such blockade be
705
imposed on all vessels, or is imposed selectively in any
706
way whatsoever against vessels of certain flags or
707
ownership, or against certain cargoes or crews or
708
otherwise howsoever, or to proceed to an area where
709
she shall be subject, or is likely to be subject to
710
a belligerent’s right of search and/or confiscation.
720
(e) The Charterers shall have the liberty:
721
(i) to comply with all orders, directions, recommend-
722
ations or advice as to departure, arrival, routes,
723
sailing in convoy, ports of call, stoppages,
724
destinations, discharge of cargo, delivery, or in any
725
other way whatsoever, which are given by the
726
Government of the Nation under whose flag the
727
Vessel sails, or any other Government, body or
728
group whatsoever acting with the power to compel
729
compliance with their orders or directions;
730
(ii) to comply with the orders, directions or recom-
731
mendations of any war risks underwriters who have
732
the authority to give the same under the terms of
733
the war risks insurance;
734
(iii) to comply with the terms of any resolution of the
735
Security Council of the United Nations, any
736
directives of the European Community, the effective
737
orders of any other Supranational body which has
738
the right to issue and give the same, and with
739
national laws aimed at enforcing the same to which
740
the Owners are subject, and to obey the orders
741
and directions of those who are charged with their
742
enforcement.
762
27. Commission
776
28. Termination
777
(a) Charterers’ Default
778
The Owners shall be entitled to withdraw the Vessel from

Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document
will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org.
First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.
PART II
BARECON 2001 Standard Bareboat Charter
779
the service of the Charterers and terminate the Charter
780
with immediate effect by written notice to the Charterers if:
781
(i) the Charterers fail to pay hire in accordance with
782
Clause 11.  However, where there is a failure to
783
make punctual payment of hire due to oversight,
784
negligence, errors or omissions on the part of the
785
Charterers or their bankers, the Owners shall give
786
the Charterers written notice of the number of clear
787
Banking days stated in Box 34 (as recognised at
788
the agreed place of payment) in which to rectify
789
the failure, and when so rectified within such
790
number of days following the Owners’ notice, the
791
payment shall stand as regular and punctual.
792
Failure by the Charterers to pay hire within the
793
number of days stated in Box 34 of their receiving
794
the Owners’ notice as provided herein, shall entitle
795
the Owners to withdraw the Vessel from the service
796
of the Charterers and terminate the Charter without
797
further notice;
798
(ii) the Charterers fail to comply with the requirements of:
799
(1) Clause 6 (Trading Restrictions)
800
(2) Clause 13(a) (Insurance and Repairs)
801
provided that the Owners may, by
802
written notice to the Charterers, give the
803
Charterers a specified number of days grace within
804
which to rectify the failure without prejudice to the
805
Owners’ right to withdraw and terminate under this
806
Clause if the Charterers fail to comply with such
807
notice;
808
(iii) the Charterers fail to rectify any failure to comply
809
with the requirements of sub-clause 10(a)(i)
810
(Maintenance and Repairs) within a reasonable time
811
 after the Owners have requested them in
812
writing so to do and in any event so that the Vessel’s
813
insurance cover is not prejudiced.
814
(iv) In the event of a termination as aforesaid, the Charterers shall be entitled to exercise its Purchase Option set out in Clause 40 within 30 days from receipt of Owners’ written notice of termination. If such Purchase Option is exercised within the due date, this Charter Party shall continue in full force and effect until the successful completion of the sale of the Vessel pursuant to the Purchase Option at which point in time any default (except for any outstanding payment following a default under clause 28(a)(i)) shall be deemed cured with no further rights or obligations between the parties.
815
(b) Owners’ Default
816
If the Owners shall by any act or omission be in breach
817
of their obligations under this Charter to the extent that
818
the Charterers are deprived of the use of the Vessel
819
and such breach continues for a period of fourteen (14)
820
running days after written notice thereof has been given
821
by the Charterers to the Owners, the Charterers shall
822
be entitled to terminate this Charter with immediate effect
823
by written notice to the Owners.
824
(c) Loss of Vessel See clause 41
836
(d) Either party shall be entitled to terminate this
837
Charter with immediate effect by written notice to the
838
other party and its Guarantor in the event of an order being made or
839
resolution passed for the winding up, dissolution,
840
liquidation or bankruptcy of the other party (otherwise
841
than for the purpose of reconstruction or amalgamation)
842
or if a receiver is appointed, or if it suspends payment,
843
ceases to carry on business or makes any special
844
arrangement or composition with its creditors.
845
(e) The termination of this Charter shall be without
846
prejudice to all rights accrued due between the parties
847
prior to the date of termination and to any claim that
848
either party might have. 
849
29. Repossession
850
In the event of the termination of this Charter in
851
accordance with the applicable provisions of Clause 28,
852
the Owners shall have the right to repossess the Vessel
853
from the Charterers at her current or next port of call, or
854
at a port or place convenient to them without hindrance
855
or interference by the Charterers, courts or local
856
authorities.  Pending physical repossession of the Vessel
857
in accordance with this Clause 29, the Charterers shall
858
hold the Vessel as gratuitous bailee only to the Owners.
859
The Owners shall arrange for an authorised represent-
860
ative to board the Vessel as soon as reasonably
861
practicable following the termination of the Charter.  The
862
Vessel shall be deemed to be repossessed by the
863
Owners from the Charterers upon the boarding of the
864
Vessel by the Owners’ representative.  All arrangements
865
and expenses relating to the settling of wages,
866
disembarkation and repatriation of the Charterers’
867
Master, officers and crew shall be the sole responsibility
868
of the Charterers.
869
30. Dispute Resolution
870
*)          (a) This Contract shall be governed by and construed
871
in accordance with English law and any dispute arising
872
out of or in connection with this Contract shall be referred
873
to arbitration in London in accordance with the Arbitration
874
Act 1996 or any statutory modification or re-enactment
875
thereof save to the extent necessary to give effect to
876
the provisions of this Clause.
877
The arbitration shall be conducted in accordance with
878
the London Maritime Arbitrators Association (LMAA)
879
Terms current at the time when the arbitration proceed-
880
ings are commenced.
881
The reference shall be to three arbitrators.  A party
882
wishing to refer a dispute to arbitration shall appoint its
883
arbitrator and send notice of such appointment in writing
884
to the other party requiring the other party to appoint its
885
own arbitrator within 14 calendar days of that notice and
886
stating that it will appoint its arbitrator as sole arbitrator
887
unless the other party appoints its own arbitrator and
888
gives notice that it has done so within the 14 days
889
specified.  If the other party does not appoint its own
890
arbitrator and give notice that it has done so within the
891
14 days specified, the party referring a dispute to
892
arbitration may, without the requirement of any further
893
prior notice to the other party, appoint its arbitrator as
894
sole arbitrator and shall advise the other party
895
accordingly. The award of a sole arbitrator shall be
896
binding on both parties as if he had been appointed by
 
Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document
will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org.
First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.
PART II
BARECON 2001 Standard Bareboat Charter
897
agreement.
898
Nothing herein shall prevent the parties agreeing in
899
writing to vary these provisions to provide for the
900
appointment of a sole arbitrator.
901
In cases where neither the claim nor any counterclaim
902
exceeds the sum of US$100,000 (or such other sum as
903
the parties may agree) the arbitration shall be conducted
904
in accordance with the LMAA Small Claims Procedure
905
current at the time when the arbitration proceedings are
906
commenced.
931
(d) Notwithstanding (a), (b) or (c) above, the parties
932
may agree at any time to refer to mediation any
933
difference and/or dispute arising out of or in connection
934
with this Contract.
935
In the case of a dispute in respect of which arbitration
936
has been commenced under (a), (b) or (c) above, the
937
following shall apply:-
938
(i) Either party may at any time and from time to time
939
elect to refer the dispute or part of the dispute to
940
mediation by service on the other party of a written
941
notice (the “Mediation Notice”) calling on the other
942
party to agree to mediation.
943
(ii) The other party shall thereupon within 14 calendar
944
days of receipt of the Mediation Notice confirm that
945
they agree to mediation, in which case the parties
946
shall thereafter agree a mediator within a further
947
14 calendar days, failing which on the application
948
of either party a mediator will be appointed promptly
949
by the Arbitration Tribunal (“the Tribunal”) or such
950
person as the Tribunal may designate for that
951
purpose.  The mediation shall be conducted in such
952
place and in accordance with such procedure and
953
on such terms as the parties may agree or, in the
954
event of disagreement, as may be set by the
955
mediator.
956
(iii) If the other party does not agree to mediate, that
957
fact may be brought to the attention of the Tribunal
958
and may be taken into account by the Tribunal when
959
allocating the costs of the arbitration as between
960
the parties.
961
(iv) The mediation shall not affect the right of either
962
party to seek such relief or take such steps as it
963
considers necessary to protect its interest.
964
(v) Either party may advise the Tribunal that they have
965
agreed to mediation. The arbitration procedure shall
966
continue during the conduct of the mediation but
967
the Tribunal may take the mediation timetable into
968
account when setting the timetable for steps in the
969
arbitration.
970
(vi) Unless otherwise agreed or specified in the
971
mediation terms, each party shall bear its own costs
972
incurred in the mediation and the parties shall share
973
equally the mediator’s costs and expenses.
974
(vii) The mediation process shall be without prejudice
975
and confidential and no information or documents
976
disclosed during it shall be revealed to the Tribunal
977
except to the extent that they are disclosable under
978
the law and procedure governing the arbitration.
979
(Note: The parties should be aware that the mediation
980
process may not necessarily interrupt time limits.)
986
31. Notices
987
(a) Any notice to be given by either party to the other
988
party shall be in writing and may be sent by e-mail,
989
registered or recorded mail or by personal service.
990
(b) The address of the Parties for service of such
991
communication shall be as stated in Boxes 3 and 4
992
respectively.


Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document
will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org.
First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.
PART II
BARECON 2001 Standard Bareboat Charter

Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document
will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org.
First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.
PART III
PROVISIONS TO APPLY FOR NEWBUILDING VESSELS ONLY
(Optional, only to apply if expressly agreed and stated in Box 37)
Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document
will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org.
First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.
PART V
 PROVISIONS TO APPLY FOR VESSELS REGISTERED IN A
BAREBOAT CHARTER REGISTRY

 
 
Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document
will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org.
First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.
PART IV
HIRE/PURCHASE AGREEMENR(Optional, only to apply if expressly agreed and stated in Box 43)

1
1.    Definitions
2
For the purpose of this PART V, the following terms shall
3
have the meanings hereby assigned to them:
4
“The Bareboat Charter Registry” shall mean the registry
5
of the State whose flag the Vessel will fly and in which
6
the Charterers are registered as the bareboat charterers
7
during the period of the Bareboat Charter.
8
“The Underlying Registry” shall mean the registry of the
9
state in which the Owners of the Vessel are registered
10
as Owners and to which jurisdiction and control of the
11
Vessel will revert upon termination of the Bareboat
12
Charter Registration.
13
2.     Mortgage
14
The Vessel chartered under this Charter is financed by
15
a mortgage and the provisions of Clause 12(b) (Part II)
16
shall apply.
17
3.   Termination of Charter by Default
18
In the event of the Vessel being deleted from the
19
Bareboat Charter Registry as stated in Box 44, due to a
20
default by the Owners in the payment of any amounts
21
due under the mortgage(s), the Charterers shall have
22
the right to terminate this Charter forthwith and without
23
prejudice to any other claim they may have against the
24
Owners under this Charter.


Rider Clauses 32 to 47
to be deemed incorporated to the
Bareboat Charter Party
Dated 24th April 2023
(the “Charter”) Between
Lord Ocean Navigation Co. (guaranteed by Seanergy Maritime Holdings Corp.) as Charterers
and Village Seven Co., Ltd. and V7 Fune Inc. as Owners
in respect of the vessel

MV “Lordship”
 
32.
Additional Definitions

In this Charter, unless the context otherwise requires, the following expressions shall have the following meanings:
 
“Additional Clauses” means these additional clauses 32 to 47 to the Barecon 2001 bareboat charter dated 24th April 2023.
 
“Charter” means the Barecon 2001 bareboat charter dated XX April 2023 and these Additional Clauses.
 
“Charterers’ Guarantor” means Seanergy Maritime Holdings Corp.
 
“Charter Hire” means the charter hire as per Box 22, Clause 11 and Clause 44.
 
“Classification Society” means classification society of the Vessel as indicated in Box 10 or such other classification society elected in accordance with Clause 10.
 
“Delivery Date” has the meaning given to it in Clause 33.

“Loan Outstanding” has the meaning given to it in Clause 44.
 
“MOA” means the memorandum of agreement in respect of the Vessel of even date herewith entered into between the Charterers (as sellers) and the Owners (as buyers) (as the same may be amended, supplemented or varied from time to time).
 
“Mortgagee” means Sumitomo Mitsui Banking Corporation (SMBC), in its capacity as registered holder of a first priority mortgage on the Vessel or any replacement holder of a first priority mortgage on the Vessel.

“Owners” means collectively Village Seven Co., Ltd. and V7 Fune Inc.

“Purchase Option” means Charterers’ option to purchase the Vessel as further described in Clause 40.

“Purchase Option Price” means the price payable by the Charterers to the Owners for the purchase of the Vessel in accordance with Clause 40.


“Quotation Day” means, in relation to any period for which 3 Month TERM CME SOFR is to be determined, five (5) US Government Securities Business Days before the first day of that period. The first Quotation Day will be five (5) US Government Securities Business Days before the Delivery Date.

“Total Loss” has the meaning given to it in Clause 41.

33.
 Delivery

The Charterers shall take delivery of the Vessel under this Charter simultaneously with delivery by the Charterers as sellers to the Owners as buyers under the MOA, and the Owners shall be obliged to deliver the Vessel to the Charterers hereunder in the same moment as the Owners is taking delivery of the Vessel under the MOA (such date to be referred to as the “Delivery Date”) without any settlement for any remaining bunkers and unused lubricating oils including hydraulic oils and greases, unbroached provisions, paints, ropes and other consumable stores which are excluded from the sale and taken over by the Charterers from the Sellers directly.
 
In the event that the Vessel is not delivered under the MOA for whatever reason, this Charter shall automatically terminate.

34.
Conditions for delivery

Prior to delivery of the Vessel under this Charter, the parties shall exchange the following documents:
(a)
one (1) copy of a Certificate of Incumbency or equivalent issued not more than five (5) Banking Days before the date of delivery of the Vessel, stating all Directors and that the subject company is in good standing;


(b)
certified copies of the corporate resolutions of the Owners and the Charterers approving the contents of and the entering into of the Charter;


(c)
one (1) copy of a notarised or legalized and apostilled Power of Attorney granted by the Owners and the Charterers with respect to the representative(s) at closing and the persons signing this Charter and the MOA, with the originals to be exchanged within five (5) Banking Days from the date of delivery of the Vessel; and


(d)
such other documents as each of the Owners and Charterers may reasonably require.

35.
Vessel’s condition on delivery

The Vessel shall be delivered under this Charter in the same condition and with the same equipment, inventory and spare parts as she is delivered to the Owners under the MOA. The Charterers know the Vessel’s condition at the time of delivery, and expressly agree that the Vessel’s condition as delivered under the MOA is acceptable and in accordance with the provisions of this Charter. The Vessel shall be delivered to the Charterers under the Charter strictly “as is/where is”, and the Charterers shall have no claim against the Owners under this Charter or otherwise as a result of the Vessel’s physical condition.


36.
Inspection on re-delivery of the Vessel (see also clause 7)

In connection with the redelivery of the Vessel under the Charter, the Vessel shall not be dry-docked unless required by the Classification Society.

In lieu of dry-docking, Owners shall have the right to appoint a diver acceptable to the Classification Society to undertake an underwater inspection at a convenient port after giving reasonable notice and with due consultation between Owners and Charterers. Such divers’ inspection shall be carried out at Owners’ expense and without interference to the Vessel’s trading and normal operation.

Should such underwater inspection reveal damages that affect the class of the Vessel whereby such damage repairs cannot be made to the Vessel without dry-docking and the Classification Society will not grant an extension, then Vessel is to be dry-docked as soon as possible by Charterers to repair such damages to the Classification Society’s satisfaction at Charterers’ time and expense.

If in the opinion of the Classification Society the damages do not necessitate immediate dry-docking, then the Classification Society shall issue a certificate showing the extent and place of damage and Charterers shall repair same to the satisfaction of the Classification Society at next dry-docking, provided that such dry-docking is within the Charter Period. If the next Classification Society dry- docking is after the re-delivery of the Vessel under this Charter, the Charterers shall in their option (i) repair such damages before redelivery of the Vessel hereunder or (ii) provide the Owners with an agreed lump sum, (the Charterers and the Owners shall each select a reputable shipyard in the redelivery range and obtain from such shipyard a quotation for the cost of repairs of the damage. The estimated cost of repairs shall be defined as the average of the two quotations obtained from the two shipyards), a first class bank guarantee or sum a cash deposit to be provided, in the Charterers’ option, covering the expected costs of such repairs.
 
This Clause 36 shall not apply if the Charterers exercise their purchase option as set out in Clause 40.

The Vessel with everything belonging to her shall be at the Charterers’ risk and expense until she is delivered to the Owners, but subject to the terms and conditions of this Charter she shall be re- delivered and taken over as she was at the time of joint surveys in accordance with clause 7 in this Charter, fair wear and tear excepted.

37.
Familiarisation
 
The Owners shall have a right to place two representatives on board the Vessel for familiarisation purposes twenty-one (21) days prior to the redelivery of the Vessel to Owners under this Charter. These representatives shall sign the Charterers’ usual indemnity form. Charterers shall cooperate with Owners’ representatives for their reasonable comments, requests and questions which they may have for familiarisation purpose.
 
This Clause 37 shall not apply if the Charterers exercise their purchase option as set out in Clause 40.

38.
Owners’ Assignment, Performance Guarantee and Quiet Enjoyment Letter

The Owners warrant that its purpose and business will be the acquisition and bareboat chartering out of the Vessel as contemplated in this Charter and the MOA attached as Appendix A.


The Owners shall have the right to assign to any and all mortgagees of the Vessel who are banks financing the Vessel any and all of the rights, benefits and interest of the Owners in and to this Charter, including but not limited to assignments of earnings and assignment of this Charter and Vessel’s insurance subject to Clause 41.

The Charterers are entitled to receive a quiet enjoyment letter from the financiers of the Owners, in customary form for these transactions, and the Owners shall also agree to issue a quiet enjoyment letter from the Owners to its customers if so requested by the Charterer’s customer. Such quiet enjoyment letters to be on terms acceptable to the Charterers.

The Owners hereby undertake to the Charterers throughout the term of this Charter that, as long as no Charterers’ Default has occurred and is continuing, the Owners shall not disturb or interfere in any way whatsoever with the quiet and peaceful use, enjoyment, possession and employment of the Vessel by the Charterers.

The performance of the Charterers hereunder shall be guaranteed by the Charterers’ Guarantor. The guarantee shall be in the format attached hereto as Appendix B.
 
39.
Transfer of the Vessel


(a)
Any change of ownership of the Vessel or of the ownership of the Owners during the Charter Period shall require the Charterers’ prior written approval which Charterers shall be at full discretion whether to grant or decline.


(b)
The Owners undertake that V7 Fune Inc. shall remain a wholly owned subsidiary of Village Seven Co., Ltd. during the term of this Charter. A change of control in V7 Fune Inc. shall be deemed as owners’ default under Clause 28 of this Charter.


(c)
Each of the Owners and Charterers shall during the Charter Period be entitled to assign their rights and obligations to any of their affiliates under the Charter subject to the prior written consent of the other Party, which shall not be unreasonably withheld, and in such case the guarantees granted hereunder shall continue to remain in full force and effect irrespective of the said assignment(s) under the Charter. Each Party shall bear their own costs related to the above assignments.

40.
Charterers’ Purchase Option
 
Charterers may purchase the Vessel at any time during the Charter (the “Purchase Option”), starting from the 2nd anniversary of the Delivery Date, or in case of a default hereunder by the Owners, at any time during the Charter at a price (the “Purchase Option Price”) calculated as follows:
 
The Purchase Option Price = [A – [ (A-B) / 365 x C]]*1.03
 
Where:
 
A:
the Loan Outstanding at the end of the year preceding the year in which the Vessel is delivered (i.e. Loan Outstanding in month 24, 36, 48 or 53 as the case may be). If the Vessel is delivered at an exact anniversary of the Delivery Date, “A” in the formula above shall be the same as “B” i.e. Loan Outstanding at the date on which the Vessel is delivered;


 
B:
the Loan Outstanding at the end of the year in which the Vessel is delivered (i.e. in month 24, 36, 48, or 53 as the case may be); and

 
C:
the actual number of days from the beginning of the year in which the Vessel was delivered to (and including) the actual delivery date of the Vessel under the Purchase Option.
 
Notwithstanding the following paragraph, the Purchase Option Price at the end of the period of this Charter shall be USD7,811,111.00.
 
Charterers obligation to pay Charter Hire shall cease to apply from the actual delivery date of the Vessel under Purchase Option.

The Charterers must give a minimum of 90 (ninety) days’ written notice of their intention to buy the Vessel, subject to the options being exercised in the months from August to March, otherwise the Charterers must give a minimum of 120 (one hundred twenty) days’ written notice of their intention to buy the vessel (in April to July). The Purchase Option Price shall be paid to the Owners upon delivery of the Vessel as per Clause 3 of the MOA attached hereto as Appendix A. The Vessel shall be delivered as soon as possible after expiry of the 90 (ninety) or 120 (one hundred twenty) days’ notice and Owners undertake to render the necessary assistance in order to achieve this. Once the Purchase Option has been exercised by Charterers, they may not withdraw same.
 
The Charterers shall accept the Vessel on an “AS IS, WHERE IS” basis and the Owners shall, take such steps to obtain and furnish such documents and take such other actions as the Charterers may reasonably request in order to facilitate the sale and re-registration of the Vessel under such flag as the Charterers may designate.

With respect to such sale, the Owners warrant that the Vessel at such sale shall be free of any encumbrances, debts, mortgages and maritime liens whatsoever and that the Owners have not committed any act or omission which would impair title to the Vessel and Owners hereby agree to indemnify and hold harmless Charterers in respect of any and all damages, costs and expenses whatsoever resulting from any breach of such warranty.
 
The terms and conditions of the form of the MOA attached hereto as Appendix A shall govern the purchase of the Vessel as set out in this Clause 40.
 
Upon completion of such purchase of the Vessel as set out in this Clause 40, the Charter and all further rights and obligations of the parties hereunder (except for indemnities and other obligations that by their nature should survive the termination of this Charter) shall terminate.

41.
Insurance


(a)
For the purposes of this Charter, the term “Total Loss” shall mean any actual or constructive or compromised or agreed or arranged total loss of the Vessel including any such total loss as may arise during a requisition for hire.


(b)
The Charterers undertake with the Owners that throughout the Charter Period:-


(i)
without prejudice to their obligations under Clause 13 hereof, they will keep the Vessel insured on the basis of the Institute of London Underwriters “Institute Time Clause-Hull” and “Institute War and Strikes Clauses” as amended or similar, as the Charterers shall choose with such insurers (including P&I Clubs and war risks Associations) as the Charterers shall choose, provided that all insurances are issued with reputable insurers and that any P&I association which is a member of the International Group of P&I Clubs and the current H&M terms and underwriters shall be deemed to be pre-approved (it being agreed and understood by the Charterers that there shall be no element of self-insurance or insurance through captive insurance companies without the prior written consent of the Owners);



(ii)
the policies in respect of the insurances against fire and usual marine risks and the policies or entries in respect of the insurances against war risks shall, in each case, be endorsed to the effect that payment of a claim for a Total Loss will be made to the Owners (or the Mortgagees as assignees thereof) (who shall upon the receipt thereof apply the same in the manner described in Clause 41(e) hereof);
 
(iii)
the Charterers shall procure that duplicates or copies of all cover notes, policies and certificates of entry shall be furnished to the Owners for their custody, upon request;


(iv)
the Charterers shall procure that the insurers and the war risk and protection and indemnity associations with which the Vessel is entered shall:


(A)
furnish the Owners and Mortgagee with a letter or letter of undertaking in such form as may from time to time be reasonably required by the Owners, and


(B)
supply to the Owners such information in relation to the insurances effected, or to be effected, with them as the Owners may from time to time reasonably require; and


(v)
the Charterers shall procure that the policies, entries or other instruments evidencing the insurances are endorsed to the effect that the insurers shall give to the Owners not less than five
(5) days prior written notification of any amendment, suspension, cancellation or termination of the insurances, unless subject to any automatic termination/cancellation of cover provisions in the relevant insurances, in which event, if such insurances are automatically terminated/cancelled, Owners shall be advised promptly and Charterers shall immediately procure re-instatement or replacement insurances of those terminated/cancelled insurances.


(c)
Notwithstanding anything to the contrary contained in Clauses 13 and 41 (b) hereof, the Vessel shall be kept insured during the Charter Period in respect of marine and war risks on hull and machinery basis for not less than one hundred and ten per cent (110%) of the Loan Outstanding or the Purchase Option Prices, whichever is higher (hereinafter referred to as the “Minimum Insured Value”).

The Owners may request the Charterers to increase the insurance value above the Minimum Insured Value, however, any additional insurance costs related thereby shall be for the Owners’ account.
 
(d)
If the Vessel becomes a Total Loss or becomes subject to Compulsory Acquisition the chartering of the Vessel to the Charterers hereunder shall cease and the Charterers shall:-


(i)
immediately pay to the Owners all hire, and any other amounts, which have fallen due for payment under this Charter and have not been paid as at up to the date on which the Total Loss or Compulsory Acquisition occurred as described below (the “Date of Loss”) and shall cease to be under any liability to pay any further hire. All hire and any other amounts prepaid by the Charterers relating to the period after the Date of Loss shall be forthwith refunded by the Owners and any hire paid in advance to be adjusted/reimbursed.


(ii)
For the purpose of ascertaining the Date of Loss:-



(A)
an actual total loss of the Vessel shall be deemed to have occurred on the actual date the Vessel was lost but in the event of the date of the loss being unknown the actual total loss shall be deemed to have occurred on the date on which it is acknowledged by the insurers to have occurred;


(B)
a constructive, compromised, agreed, or arranged total loss of the Vessel shall be deemed to have occurred on the date that notice claiming such a total loss of the Vessel is given to the insurers, or, if the insurers do not admit such a claim, at the date and time at which a total loss is subsequently admitted by the insurers or the date and time adjudged by a competent court of law or arbitration tribunal to have occurred. Either the Owners or, with the prior written consent of the Owners (such consent not to be unreasonably withheld), the Charterers shall be entitled to give notice claiming a constructive total loss but prior to the giving of such notice there shall be consultation between the Charterers and the Owners and the party proposing to give such notice shall be supplied with all such information as such party may request; Each of the Owners and the Charterers, upon the request of the other, shall promptly execute such documents as may be required to enable the other to abandon the Vessel and claim a constructive total loss and shall give all possible assistance in pursuing the said claim; and


(C)
Compulsory Acquisition shall be deemed to have occurred at the time of occurrence of the relevant circumstances described in Clause 25(b) hereof.


(e)
All moneys payable under the insurance effected by the Charterers pursuant to Clauses 13 and 41, or other compensation, in respect of a Total Loss or pursuant to Compulsory Acquisition of the Vessel shall be received in full by the Owners (or the Mortgagees as assignees thereof) and applied by the Owners (or, as the case may be, the Mortgagees):

FIRSTLY, in payment of all the Owners’ or the Charterers’ costs incidental to the collection thereof,
 
SECONDLY, in or towards payment to the Owners (to the extent that the Owners have not already received the same in full) of a sum equal to the Purchase Option Price as per the provisions in clause 40 immediately above, for the year in which the Date of Loss occurs and which shall be calculated pro rata per diem (and determined on the same principles should a Date of Loss occur prior to the Purchase Option being applicable),
 
THIRDLY, in payment of any surplus to the Charterers by way of compensation for early termination.
(f)
In respect of partial losses, any payment by insurance underwriters not exceeding USD7500,000.00 shall be paid directly to the Charterers who shall apply the same to effect the repairs in respect of which payment is made. Any moneys in excess of USD 750,000.00 payable under such insurance other than Total Loss shall be paid to the Charterers subject to the prior written consent of the Owners or the Owners’ bank but such consent shall not be unreasonably withheld or delayed. In the absence of such prior written consent the money shall be paid to the Owners or the Owners’ bank who shall apply the same for Charterers’ effect of the repairs in respect of which payment is made.


(g)
The provisions of Clauses 13 and 41 hereof shall not apply in any way to the proceeds of any additional insurance cover effected by the Owners and/or the Charterers for their own account and benefit.


(h)
The Charterers shall promptly notify the Owners of:




(i)
any accident to the Vessel involving repairs the cost of which exceeds USD 750,000.00 or the equivalent in any other currencies; or


(ii)
any occurrence in consequence whereof the Vessel has become a Total Loss or Compulsory Acquisition.

42.
 Inconsistency
 
In case of any inconsistency between (i) the standard terms of this Charter and (ii) the Rider Clauses, the latter shall prevail.

43.
Registration Fees
 
Any and all documented fees and charges incurred by the Owners/Buyers in connection with registration or reregistration of the Vessel on delivery or re-delivery of the Vessel, including but not limited to SMBC’s upfront fee, mortgage registration fees, escrow agent fees, if any, and discharge of mortgage fees at the end of the Charter, to be borne by the Charterers, with the aggregate amount to be limited to USD 100,000.00.

44.
Floating part of charter hire

In the charter hire structure set out in Box 22, the Floating part shall be calculated by Loan Outstanding in the table set out below times (3 Month TERM CME SOFR plus 3.00%) times number of days during the upcoming month divided by 360 days.

3 Month TERM CME SOFR will be set on each applicable Quotation Day, will be updated on a quarterly basis and shall remain stable for three (3) consecutive charter hire payments. Should the 3 Month TERM CME SOFR rate fall below zero, a SOFR rate equal to zero to be applied.
 
Month
Loan Outstanding
Month
Loan Outstanding
0
19,000,000
27
13,300,000
1
18,788,889
28
13,088,889
2
18,577,778
29
12,877,778
3
18,366,667
30
12,666,667
4
18,155,556
31
12,455,556
5
17,944,444
32
12,244,444
6
17,733,333
33
12,033,333
7
17,522,222
34
11,822,222
8
17,311,111
35
11,611,111
9
17,100,000
36
11,400,000
10
16,888,889
37
11,188,889
11
16,677,778
38
10,977,778
12
16,466,667
39
10,766,667
13
16,255,556
40
10,555,556
14
16,044,444
41
10,344,444
15
15,833,333
42
10,133,333
16
15,622,222
43
9,922,222
17
15,411,111
44
9,711,111
18
15,200,000
45
9,500,000
19
14,988,889
46
9,288,889
20
14,777,778
47
9,077,778
21
14,566,667
48
8,866,667
22
14,355,556
49
8,655,556
23
14,144,444
50
8,444,444
24
13,933,333
51
8,233,333
25
13,722,222
52
8,022,222
26
13,511,111
53
7,811,111
 

45.
Charterers’ information undertaking


(a)
The Charterers shall obtain an appraisal report from Clarksons Platou, Braemar ACM, Fearnleys AS, Arrow Valuations, Simpson Spence & Young Limited, Howe Robinson, BRS Group and Allied Shipbroking or any other firm or firms of shipbrokers approved in writing by the Owners as of each last bussiness day of March during the Charter Period and provide such report to the Owners.


(b)
The Charterers and/or the Charterers’ Guarantor shall provide the Owners with each of its audited or unaudited (in the case of the Charterer) financial reports on an annual basis during the Charter Period within 180 days from each of its financial year end.

46.
Money laundering, sanctions, anti-corruption:

Notwithstanding any other clause in this Charter, each Party warrants, represents and undertakes to the other Party on a continuing basis:

(Money laundering):
that it, and parties acting on its behalf in relation to this Charter, shall observe and abide with, including but not limited any law, official requirement or other regulatory measure or procedure implemented to combat money laundering as defined in any laws or regulations applicable to such Party, and
 
(Sanctions):
that it, nor any of their directors, executive managers and owners, is sanctioned by USA, the UK, the European union or the United Nations or any other nation or governmental body or organization relevant to the trading of the Vessel under this Charter, and
 
that it, its directors, executive managers and owners, has not been a party, either directly or indirectly, to any contract or conduct in contravention of any applicable sanctions legislation or directives of either the USA, the UK, the European union or the United Nations or any other nation or governmental body or organization relevant to the trading of the Vessel under this Charter. Moreover, the Party is acting for itself only and is not acting on behalf of any other individual or corporation, and
 
(Anti-corruption):
that it, its directors, executive managers and owners shall comply with all applicable anti-corruption laws, regulations and contractual provisions, including without limitation the US Foreign Corrupt Practices Act and the UK Bribery Act, and


that it, its directors, executive managers and owners shall not, directly or through third parties, in relation to the Charter, give, promise or attempt to give, or approve or authorize the giving of, anything of value to any person, any public official or any entity for the purpose of:
-
securing any improper advantage for either Party;

-
inducing or influencing anyone improperly to take action or refrain from taking action in order for either Party to obtain or retain business, or to secure the direction of business to either Party;

-
inducing or influencing anyone to use his/her influence with any Government or public international organization for such purpose; and

that:
 
-
to the best of its knowledge, none of its directors, executive managers or owners have carried out any of the actions described above;

-
all remuneration received under this Charter is solely intended as compensation for the services expressly provided under this Charter, including the Parties’ related documented costs and expenses, and that it is not receiving remuneration for any other purpose; and,

-
neither the Party, nor any of its companies, directors, executive managers or owners shall use any part of said remuneration for any purpose prohibited under this clause 46

(Others):
that neither it, its directors, executive managers and owners, have been suspended from doing business in any form subject to investigation or charged with or sentenced for relevant criminal behaviour, fraud, false statements, corruption or other related activities;
 
47.
Confidentiality
 
This Charter including all negotiations, fixtures and written correspondence shall remain strictly confidential between the Owners, the Charterers, financiers/banks and insurance companies provided however that each of the Owners, Charterers and Seanergy Maritime Holdings Corp. may disclose as much as may be necessary of the terms of this Charter and relevant documentation to their auditors, third party managers, legal counsels, accountants, affiliates and as otherwise may be required by applicable laws or regulations, including but not limited to any stock exchange and/or securities and exchange commission laws and regulations. Any report or release or publication of the lease back shall not be grounds for either the Owners or the Charterers to withdraw from their obligations under this Charter. Press releases or reports as required by stock exchange rules and regulations are allowed.


IN WITNESS HEREOF the Owners and the Charterers have signed and executed TWO COPIES of this Charter the day and year first written.

For the Owners:
For the Charterers:
   
/s/ Mamoru Nanamura
/s/ Stavros Gyftakis
     
Village Seven Co., Ltd.
Lord Ocean Navigation Co.
Mamoru Nanamura
Stavros Gyftakis
Representative Director/ President
Director/ Treasurer

For the Owners:
 
/s/ Mamoru Nanamura
   
V7 Fune Inc.
Mamoru Nanamura Representative Director/ President

List of Appendices:
  
   
Appendix A:
Memorandum of Agreement for purchase option
Appendix B:
Form of performance guarantees


Appendix A
 
 

 
SALESFORM 2012
 
Norwegian Shipbrokers` Association`s
 
Memorandum of Agreement for sale and purchase of ships

1
Dated:
2
3
Village Seven Co., Ltd. of 6-21, Konan 3-chome, Minato-ku, Tokyo, Japan (owners of the 99.99% of the
4
shares, title 4 and ownership and interest in the Vessel), (owner of the 99.99% of the shares, title and
5
ownership and interest in the 5 Vessel), and V7 Fune Inc. of BICSA Financial Center, 60th Floor, Balboa
6
Avenue, Panama City, Republic of Panama 6 (owner of the 0.01% of the shares, title and ownership and
7
interest in the Vessel) , hereinafter called the “Sellers”, have agreed to sell, and
8
9
Lord Ocean Navigation Co., of 80 Broad Street, Monrovia, Liberia (guaranteed by Seanergy Maritime
10
Holdings Corp.), hereinafter called the “Buyers”, have agreed to buy:
11
12
Name of vessel: M/V Lordship
13
14
IMO Number: 9519066
15
16
Classification Society: BV
17
18
Class Notation:
19
Bulk carrier CSR BC-A (holds 2,4,6 and 8 may be empty) ESP GRAB 30
20
21
22
Year of Build: 2010          Builder/Yard: Hyundai Heavy Industries
23
24
Flag: Liberia          Place of Registration:          GT/NT: 93,564 / 59,500
25
26
hereinafter called the “Vessel”, on the following terms and conditions:
27
28
Definitions
29
30
“Banking Days” are days (other than a Saturday and Sunday) on which banks are open in Liberia, Tokyo,
31
Piraeus, London and New York
32
33
.
34
“Buyers’ Nominated Flag State” means Liberia. ).
35
36
“BBCP” means Bareboat Charter Party dated 24th April 2023 agreed between Lord Ocean Navigation Co.
37
(guaranteed by Seanergy Maritime Holdings Corp.) and Village Seven Co., Ltd., and V7 Fune Inc., as owners
38
(as from time to time amended, novated and supplemented).
39
40
“Charterer” means Charterers as defined under the BBCP.
41
42
“Owners” means Owners as defined under the BBCP.
43
“Class” means the class notation referred to above.
44
“Classification Society” means the Society referred to above.


45
46
47
48
“In writing” or “written” means a letter handed over from the Sellers to the Buyers or vice versa, a registered
49
letter, email or telefax.
50
“Parties” means the Sellers and the Buyers.
51
“Purchase Price” means the price for the Vessel as stated in Clause 1 (Purchase Price).
52
“Sellers’ Account” means an account held with Sellers’ Bank (state details of bank account) at the Sellers’
53
Bank.
54
“Sellers’ Bank” means such bank or banks
55
notified in writing by the Sellers to the Buyers for receipt of the Purchase Price.
56
57
1.         Purchase Price
58
59
The Purchase Price shall be the Purchase Option Price calculated in accordance with Clause 40 of the
60
BBCP.
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
3.         Payment
78
79
80
81
82
83
84
(ii)The Purchase Price and all other sums payable on delivery by the Buyers to the Sellers
85
under this Agreement shall be remitted  in full free of bank charges to a suspense account with
86
the Sellers’ Bank and held to Buyers’ order at least three (3) Banking days prior to the expected time of
87
delivery of the Vessel in order for the Sellers’ Bank to confirm the funds in the Sellers’ Bank before the
88
expected delivery date with a SWIFT(MT199) message to confirm that the funds are to be released to the
89
Sellers against a copy of the executed Protocol of Delivery and Acceptance confirming delivery of


90
the Vessel and/or returned in accordance with their instructions, including that the Sellers’ Bank shall return the
91
funds in full without any deductions if delivery has for any reason not taken place within ten (10) Banking
92
Days from the date of transfer to the Sellers Bank, or such other manner as may be agreed between the
93
Sellers and the Buyers.
94
95
4.         Inspection
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
provided that the Sellers receive written notice of acceptance of the Vessel from the Buyers within seventy-
118
119
120
121
122
123
124
125
126
127
128
129
5.         Time and place of delivery and notices
130
131
(a)          The Vessel shall be delivered and taken over safely afloat at the Vessel’s location at the time of delivery.
132
133
134
135
The Buyers, as the Charterers under the BBCP, having exercised their purchase option, are to give Sellers
136
not less than 90 days’ notice of the approximate date of which they (or their nominee) intend to take delivery
137
of the Vessel under the Agreement, followed by, 20, 15, 7, 5 and 3 days’ notice of estimated time of arrival
138
at intended place of delivery of the Vessel and 1 day definite notice of the time and intended place of delivery of
139
the Vessel.
140
141
Expected time of delivery: 91-120 days after the Buyers issuance of their notice of intention to purchase the
142
Vessel pursuant to BBCP Clause 40, or such later date as maybe agreed by the Sellers.
143


144
Cancelling Date : 150 days after Buyers issuance of their
145
notice of intention to purchase the Vessel pursuant to BBCP Clause 40, or such later date as may be
146
agreed by the Sellers.
147
148
149
150
151
152
153
 
154
155
(c) If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the Vessel will not be ready
156
for delivery by the Cancelling Date they may notify the Buyers in writing stating the date when they anticipate
157
that the Vessel will be ready for delivery and proposing a new Cancelling Date. Upon receipt of
158
such notification the Buyers shall have the option of either cancelling this Agreement in accordance with
159
Clause 14 (Sellers’ Default) within three (3) Banking Days of receipt of the notice or of accepting the new
160
date as the new Cancelling Date. If the Buyers have not declared their option within three (3) Banking Days
161
of receipt of the Sellers’ notification or if the Buyers accept the new date, the date proposed in the Sellers’
162
notification shall be deemed to be the new Cancelling Date and shall be substituted for the Cancelling Date
163
stipulated in line144-146.
164
165
If this Agreement is maintained with the new Cancelling Date all other terms and conditions hereof including
166
those contained in Clauses 5(b) and 5(d) shall remain unaltered and in full force and effect.
167
168
(d) Cancellation, failure to cancel or acceptance of the new Cancelling Date shall be entirely without prejudice
169
to any claim for damages the Buyers may have under Clause 14 (Sellers’ Default) for the Vessel not being
170
ready by the original Cancelling Date.
171
172
(e) Should the Vessel become an actual, constructive or compromised total loss before delivery
173
 this Agreement
174
shall be null and void without any liability upon the Sellers or the Buyers under this Agreement.
175
176
177
6.         Divers Inspection / Drydocking
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193
194
195
196


198
199
200
201
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
219
220
221
222
223
224
225
226
227
228
229
230
231
232
233
234
235
236
237
238
239
240
241
242
243
244
245
246
247
248
249
250

251
252
253
254
255
256
257
258
259
260
261
262
263
264
265
266
267
268
269
270
7.         Spares, bunkers and other items
271
272
The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on shore.
273
All spare parts and spare equipment including spare tail-end shaft(s) and/or spare propeller(s)/propeller
274
blade(s), if any, belonging to the Vessel at the time of delivery used or unused, whether on board
275
or not, including any spares on order shall  remain the Buyers’ property.
276
277
278
279
280
281
282
283
284
285
286
287
288
289
Items on board at the time of delivery which are on hire or owned by third parties, not listed
290
above, shall remain with
291
the Buyers.
292
293
Any remaining bunkers and unused lubricating and hydraulic oils and greases in storage tanks and
294
unopened drums shall remain the property of the Buyers.
295
296
297
298
299
300
301
302
303
304


305
306
307
308
309
310
311
312
313
314
315
316
8.         Documentation
317
318
The place of closing: Virtual Closing or physical closing in JAPAN, to be agreed between the Sellers and
319
the Buyers
320
321
In exchange for payment of Purchase Price the Sellers shall furnish the Buyers with delivery documents
322
reasonably required by the Buyers. The delivery documents to be exchanged between the parties shall be
323
listed in an addendum hereto, namely “Addendum no.1”: List of delivery documents”
324
325
326
327
328
329
330
331
332
333
334
335
336
337
338
339
340
341
342
343
344
345
346
347
348
349
350
351
352
353
354
355
356
357
358


359
360
361
362
363
364
365
366
367
368
369
370
371
372
373
374
375
376
377
378
379
380
381
382
383
384
385
386
387
388
389
390
391
392
393
394
395
396
397
398
399
400
401
402
(g) The Parties shall sign and deliver to each other a Protocol of Delivery and Acceptance confirming the date
403
and time of delivery of the Vessel from the Sellers to the Buyers.
404
405
9.         Encumbrances
406
407
Other than any charter entered into by the Buyers, the Sellers warrant that the Vessel, at the time of
408
delivery, is free from all charters, claims, taxes, encumbrances, mortgages and maritime liens or any other
409
debts whatsoever, except for those created or incurred by the Charterers. The Sellers make no warranty as
410
to whether the Vessel being subject to Port State or other administrative detentions at the time of
411
delivery. The Sellers hereby undertake to indemnify the Buyers against all consequences of claims made
412
against the Vessel which have been incurred prior to the time of delivery.

413
414
10.        Taxes, fees and expenses
415
416
Any taxes, fees and expenses in connection with the purchase  of the Vessel
417
and its registration  shall be for the Buyers’ account, whereas similar charges in
418
connection with the closing of the Sellers’ register shall be for the Sellers’ account.
419
420
11.        Condition of delivery
421
422
The Vessel with everything belonging to her shall be at the Sellers’ risk and expense until she is delivered to
423
the Buyers, but subject to the terms and conditions of this Agreement she shall be delivered and taken over
424
“as is where is”  at the time of  delivery.
425
Save for any breach by Sellers under the terms of this Agreement or as Owners under the BBCP, the
426
Buyers, in their capacity as Charterers under the BBCP, to be responsible for ensuring that the Vessel is in a
427
position and physical condition to be delivered to Buyers on the Delivery Date and remain responsible for
428
the Vessel under the terms of the BBCP until the time of delivery to the Buyers.
429
430
431
432
433
434
435
436
437
438
439
440
441
442
443
444
12.        Name/markings
445
446
447
448
13.        Buyers’ default
449
450
451
452
453
454
Should the Purchase Price not be paid in accordance with Clause 3 (Payment) and such failure is not
455
remedied within five (5) Banking Days then the Sellers have the right to cancel this Agreement,
456
457
 and claim  compensation for their losses and for all
458
expenses incurred by the Sellers in preparation of the sale of the Vessel .
459
460
14.       Sellers’ default
461
462
Should the Sellers fail to
463
validly complete a legal transfer by the Cancelling Date the Buyers shall have the option of cancelling this
464
Agreement and


466
467
468
469
470
471
 the Sellers shall make due compensation to the Buyers for their
472
loss and for all expenses incurred by the Buyers
473
.
474
475
15.        Buyers’ representatives
476
477
478
479
480
481
482
483
484
16.        Law and Arbitration
485
486
(a)* This Agreement or any non-contractual obligation shall be governed by and construed in accordance with
487
English law and any dispute arising out of or in connection with this Agreement shall be referred to
488
arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-
489
enactment thereof save to the extent necessary to give effect to the provisions of this Clause.
490
491
The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA)
492
Terms current at the time when the arbitration proceedings are commenced.
493
494
The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its
495
arbitrator and send notice of such appointment in writing to the other party requiring the other party to
496
appoint its own arbitrator within fourteen (14) calendar days of that notice and stating that it will appoint its
497
arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has
498
done so within the fourteen (14) days specified. If the other party does not appoint its own arbitrator and
499
give notice that it has done so within the fourteen (14) days specified, the party referring a dispute to
500
arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as
501
sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on
502
both Parties as if the sole arbitrator had been appointed by agreement.
503
504
In case where neither the claim nor any counterclaim exceeds the sum of US$100,000 the arbitration shall
505
be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration
506
proceedings are commenced.
507
508
509
510
511
512
513
514
515
516
517
518
519


520
521
522
523
524
525
526
527
17.        Notices
528
529
All notices to be provided under this Agreement shall be in writing.
530
531
Contact details for recipients of notices are as follows:
532
533
For the Buyers: c/o 154 Vouliagmenis Avenue, 166 74, Glyfada, Greece
534
Email: legal@seanergy.gr & finance@seanergy.gr
535
536
For the Sellers: c/o Village Seven Co., Ltd. C/O Village Seven Co., Ltd. , 6-21、Konan 3-chome, Minato-ku,
537
Tokyo, Japan
538
Email: nanasan@septeni-holdings.co.jp
539
540
18.         Confidentiality
541
This Agreement including all negotiations, fixtures and written correspondence shall remain strictly
542
confidential between the Sellers, the Buyers, financiers/banks and insurance companies provided however
543
that each of the Sellers, the Buyers and Seanergy Maritime Holdings Corp. may disclose as much as may
544
be necessary of the terms of this Agreement and relevant documentation to their auditors, third party
545
managers, legal counsels, accountants, affiliates and as otherwise may be required by applicable laws or
546
regulations, including but not limited to any stock exchange and/or securities and exchange commission
547
laws and regulations. Any report or release or publication of the sale shall not be grounds for either the
548
Sellers or the Buyers to withdraw from their obligations under this Agreement. Press releases or reports as
549
required by stock exchange rules and regulations are allowed.
550
19.
551
20.        Entire Agreement
552
553
554
555
556
557
558
559
560
561
562
563
564
565
566
Village Seven Co., Ltd and V7 Fune Inc.
Lord Ocean Navigation Co.
567
    
568
For and on behalf of the Sellers
For and behalf of the Buyers
569
    
570
    
571
    
572
    
573
Name: Mamoru Nanamura
Name: XXXX
574
Title: Representative Director / President
 Title: XXXX


Appendix B

 
Date :
To: Village Seven Co., Ltd.,
6-21, Konan 3-chome, Minato-ku, Tokyo, Japan and
V7 Fune Inc.
BICSA Financial Center, 60th Floor, Balboa Avenue, Panama City, Republic of Panama
(collectively, the “Owners)
 

Dear Sirs,
GUARANTEE
 
In consideration of the entry into by you of a Memorandum of Agreement (hereinafter called the “MOA”) dated 24 April 2023, with Lord Ocean Navigation Co. as sellers (hereinafter called “Lord Ocean”) for the sale and purchase of the motor vessel “Lordship” with IMO number 9519066 (hereinafter called the “Vessel”) and a Bareboat Charter Party (hereinafter called the “BBCP”) dated 24 April 2023, with Lord Ocean as charterers for the bareboat chartering of the Vessel, we, the undersigned, as the primary obligor, irrevocably and unconditionally guarantee to you and your successors and assignees the due and punctual performance by Lord Ocean of all its liabilities, obligations and responsibilities under the MOA and the BBCP, and any supplements, amendments, changes or modifications hereafter made thereto.
 
If, at any time, default is made by Lord Ocean in the performance and/or observance of any term, provision, condition, obligation or agreement, or in any other matter or thing pertaining to the MOA or the BBCP, and any supplements, amendments, changes or modifications hereafter made thereto, or in the payment of any sums payable pursuant thereto which are to be complied with by Lord Ocean, its successors or assignees, then we will perform, or cause to be so performed, all terms, provisions, conditions, obligations and agreements contained in the MOA or the BBCP, and any supplements, amendments, changes or modifications hereafter made thereto, and will pay, as our own debt and within three (3) Banking Days (as defined in the BBCP) on demand, any sum that is due and payable in consequence of the non-performance by Lord Ocean, its successors and assignees, of any of the said terms, provisions, conditions, obligations and agreements.
 
Any demand made by the Owners under this guarantee shall be made in writing signed by an authorized signatory of the Owners and shall specify the default of Lord Ocean and shall be accompanied by a copy of the notice of such default served on Lord Ocean by the Owners together with a statement (if any) that Lord Ocean have failed to remedy such default within any applicable grace period.
 

We hereby irrevocably and unconditionally agree to indemnify you on demand and keep you indemnified against all costs, charges, expenses, claims, liabilities, losses, duties and fees (including, but not limited to, reasonable and documented legal fees and expenses on a full indemnity basis) and taxes thereon suffered or incurred by you, directly as a result of any breach or non-performance of, or non-compliance by Lord Ocean with, any of its obligations under or pursuant to the MOA or the BBCP, and any supplements, amendments, changes or modifications hereafter made thereto, or as a result of any of those obligations being or becoming void, voidable or unenforceable.
 
The undersigned hereby affirm and consent to any and all amendments, changes or modifications to be hereafter made to the MOA or BBCP without requesting any further notice and without such amendments, changes or modifications in any way affecting, changing or releasing us from our obligations given under this guarantee.

We hereby represent, warrant and undertake, that:


 a)
We have full power, authority and capacity to enter into and perform our obligations under this guarantee and have taken all necessary corporate or other action (as the case may be) required to enable us to do so and our entry into of this guarantee will not exceed any power in our constitutional documents;
  b)
This guarantee constitutes valid and legally binding obligations of us enforceable in accordance with its terms;
  c)
All consents, licenses, approvals and authorizations of governmental authorities and agencies required to make this guarantee valid, enforceable and admissible in evidence and to authorize and permit the execution, delivery and performance of this guarantee by us have been obtained or made and will remain in full force and effect and there has been no default in the observance of any of the terms or conditions of any of them;

d)
We have not taken nor received, and undertake that until all the obligations of Lord Ocean under the MOA or the BBCP, and any supplements, amendments, changes or modifications hereafter made thereto have been paid or discharged in full we will not take or receive, the benefit of any security from Lord Ocean or any other person in respect of our obligations under this guarantee;

e)
We will promptly inform you of any occurrence of which we become aware which might adversely affect the ability of us to perform our obligations under this guarantee and will from time to time, if so reasonably requested by you, confirm to you in writing that, save as otherwise stated in such confirmation, no event of default under the BBCP has occurred and is continuing; and

f)
We will not assign or transfer any of our rights or obligations under this guarantee.

This guarantee:


 a)
shall become effective upon signing of the MOA and BBCP and shall only become null and void upon the fulfillment of all obligations of Lord Ocean under the MOA and BBCP whereafter this guarantee shall be immediately returned to us upon such fulfillment;

b)
shall be in addition to, and shall not be prejudiced or affected by, any other security for the obligations of Lord Ocean which may be from time to time held by you; and



c)
shall not be discharged or prejudiced by the liquidation, bankruptcy or dissolution (or proceedings analogous thereto) of Lord Ocean or the appointment of a receiver or administrative receiver or administrator or trustee or similar officer of any of the assets of Lord Ocean or any term or concessions given by you to Lord Ocean or any other party, or, subject to applicable limitation periods, by anything which you may do or omit to do or by any other dealing or thing whatsoever which but for the provisions of this paragraph might operate to discharge us from liability.
 
The provisions of clause 31 (Notices) of the BBCP shall apply (mutatis mutandis) to this guarantee.

This guarantee, and all rights and obligations arising hereunder shall be governed by and construed and determined and may be enforced in accordance with the Laws of England.
 
Any dispute arising out of in connection with this guarantee shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this clause.
 
The arbitration shall be conducted under and in accordance with London Maritime Arbitrator Association (L.M.A.A.) terms and conditions current at the time when the arbitration proceedings are commenced.
 
The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement. Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.
 
In cases where neither the claim nor any counterclaim exceeds the sum of US$200,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.

For and on behalf of
Seanergy Maritime Holdings Corp. (as the “Guarantor”)
 
   
Name: Stavros Gyftakis
Title: Chief Financial Officer


EX-4.44 13 ef20015287_ex4-44.htm EXHIBIT 4.44
Exhibit 4.44

ADDENDUM No 1

to the Bareboat Charter Party Dated 24 April 2023
(hereinafter called the “Charter”)
between
Lord Ocean Navigation Co. (guaranteed by Seanergy Maritime Holdings Corp.), as Charterers
and
Village Seven Co., Ltd., and V7 Fune, as Owners
in respect of the vessel
MV Lordship

This Addendum N° 1 is dated 24th of April, 2023 and is a supplement to the Charter. Words and expressions defined in the Charter shall have the same meaning when used herein.

1.
Owners’ Put Option
 
In the event Charterers have not exercised their final Purchase Option at the end of the Charter period, as defined in Clause 40 of the Charter, Owners have the option to sell the Vessel back to the Charterers at the end of the Charter period of this charter at the price of USD 7,811,111.00 (the “Put Option Price”). The Owners must give a notice of their decision to sell the Vessel minimum 60 (sixty) days prior to the end of the Charter Period. The sale of the Vessel from Owners as sellers to the Charterers as buyers shall be in accordance with the same mechanism as otherwise defined in Clause 40 of the Charter in the case of the Charterers exercising their Purchase Option.

Save as stated above, the terms and conditions of the Charter shall remain in force.

IN WITNESS HEREOF the Owners and the Charterers have signed and executed TWO COPIES of this Agreement the day and year first written.

For the Owners:
For the Charterers:
   
/s/ Mamoru Nanamura
/s/ Stavros Gyftakis

     
Mamoru Nanamura
Stavros Gyftakis
Representative Director
Director/ Treasurer
Village Seven Co., Ltd.
Lord Ocean Navigation Co.
   
For the Owners:
  
   
/s/ Mamoru Nanamura
  

   
Mamoru Nanamura
  
Director/President
  
V7 Fune Inc.
  


EX-4.45 14 ef20015287_ex4-45.htm EXHIBIT 4.45
Exhibit 4.45

  Date : 24 April 2023
To: Village Seven Co., Ltd.,
6-21, Konan 3-chome, Minato-ku, Tokyo, Japan
and
V7 Fune Inc.
BICSA Financial Center, 60th Floor, Balboa Avenue, Panama City, Republic of Panama
(collectively, the “Owners)

Dear Sirs,
GUARANTEE

In consideration of the entry into by you of a Memorandum of Agreement (hereinafter called the “MOA”) dated 24 April 2023, with Lord Ocean Navigation Co. as sellers (hereinafter called “Lord Ocean”) for the sale and purchase of the motor vessel “Lordship” with IMO number 9519066 (hereinafter called the “Vessel”) and a Bareboat Charter Party (hereinafter called the “BBCP”) dated 24 April 2023, with Lord Ocean as charterers for the bareboat chartering of the Vessel, we, the undersigned, as the primary obligor, irrevocably and unconditionally guarantee to you and your successors and assignees the due and punctual performance by Lord Ocean of all its liabilities, obligations and responsibilities under the MOA and the BBCP, and any supplements, amendments, changes or modifications hereafter made thereto.

If, at any time, default is made by Lord Ocean in the performance and/or observance of any term, provision, condition, obligation or agreement, or in any other matter or thing pertaining to the MOA or the BBCP, and any supplements, amendments, changes or modifications hereafter made thereto, or in the payment of any sums payable pursuant thereto which are to be complied with by Lord Ocean, its successors or assignees, then we will perform, or cause to be so performed, all terms, provisions, conditions, obligations and agreements contained in the MOA or the BBCP, and any supplements, amendments, changes or modifications hereafter made thereto, and will pay, as our own debt and within three (3) Banking Days (as defined in the BBCP) on demand, any sum that is due and payable in consequence of the non-performance by Lord Ocean, its successors and assignees, of any of the said terms, provisions, conditions, obligations and agreements.


Any demand made by the Owners under this guarantee shall be made in writing signed by an authorized signatory of the Owners and shall specify the default of Lord Ocean and shall be accompanied by a copy of the notice of such default served on Lord Ocean by the Owners together with a statement (if any) that Lord Ocean have failed to remedy such default within any applicable grace period.

We hereby irrevocably and unconditionally agree to indemnify you on demand and keep you indemnified against all costs, charges, expenses, claims, liabilities, losses, duties and fees (including, but not limited to, reasonable and documented legal fees and expenses on a full indemnity basis) and taxes thereon suffered or incurred by you, directly as a result of any breach or non-performance of, or non-compliance by Lord Ocean with, any of its obligations under or pursuant to the MOA or the BBCP, and any supplements, amendments, changes or modifications hereafter made thereto, or as a result of any of those obligations being or becoming void, voidable or unenforceable.

The undersigned hereby affirm and consent to any and all amendments, changes or modifications to be hereafter made to the MOA or BBCP without requesting any further notice and without such amendments, changes or modifications in any way affecting, changing or releasing us from our obligations given under this guarantee.

We hereby represent, warrant and undertake, that:

  a)
We have full power, authority and capacity to enter into and perform our obligations under this guarantee and have taken all necessary corporate or other action (as the case may be) required to enable us to do so and our entry into of this guarantee will not exceed any power in our constitutional documents;

b)
This guarantee constitutes valid and legally binding obligations of us enforceable in accordance with its terms;

c)
All consents, licenses, approvals and authorizations of governmental authorities and agencies required to make this guarantee valid, enforceable and admissible in evidence and to authorize and permit the execution, delivery and performance of this guarantee by us have been obtained or made and will remain in full force and effect and there has been no default in the observance of any of the terms or conditions of any of them;



d)
We have not taken nor received, and undertake that until all the obligations of Lord Ocean under the MOA or the BBCP, and any supplements, amendments, changes or modifications hereafter made thereto have been paid or discharged in full we will not take or receive, the benefit of any security from Lord Ocean or any other person in respect of our obligations under this guarantee;

e)
We will promptly inform you of any occurrence of which we become aware which might adversely affect the ability of us to perform our obligations under this guarantee and will from time to time, if so reasonably requested by you, confirm to you in writing that, save as otherwise stated in such confirmation, no event of default under the BBCP has occurred and is continuing; and

f)
We will not assign or transfer any of our rights or obligations under this guarantee.

This guarantee:


 a)
shall become effective upon signing of the MOA and BBCP and shall only become null and void upon the fulfillment of all obligations of Lord Ocean under the MOA and BBCP whereafter this guarantee shall be immediately returned to us upon such fulfillment;

b)
shall be in addition to, and shall not be prejudiced or affected by, any other security for the obligations of Lord Ocean which may be from time to time held by you; and

c)
shall not be discharged or prejudiced by the liquidation, bankruptcy or dissolution (or proceedings analogous thereto) of Lord Ocean or the appointment of a receiver or administrative receiver or administrator or trustee or similar officer of any of the assets of Lord Ocean or any term or concessions given by you to Lord Ocean or any other party, or, subject to applicable limitation periods, by anything which you may do or omit to do or by any other dealing or thing whatsoever which but for the provisions of this paragraph might operate to discharge us from liability.

The provisions of clause 31 (Notices) of the BBCP shall apply (mutatis mutandis) to this guarantee.

This guarantee, and all rights and obligations arising hereunder shall be governed by and construed and determined and may be enforced in accordance with the Laws of England.


Any dispute arising out of in connection with this guarantee shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this clause.

The arbitration shall be conducted under and in accordance with London Maritime Arbitrator Association (L.M.A.A.) terms and conditions current at the time when the arbitration proceedings are commenced.

The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement. Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.

In cases where neither the claim nor any counterclaim exceeds the sum of US$200,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.

For and on behalf of

Seanergy Maritime Holdings Corp. (as the “Guarantor”)
  
   
/s/ Stavros Gyftakis
  

   
   
Name: Stavros Gyftakis
  
   
Title: Chief Financial Officer
  


EX-4.46 15 ef20015287_ex4-46.htm EXHIBIT 4.46
Exhibit 4.46

 1.  Shipbroker  Japan Shipping Services Co., Ltd.  2. Place and date  9th May, 2023  3.  Owners/Place of business (Cl. 1)  Mi-Das LINE S.A.  Vallarino Building, 3rd Floor, Fifty Second (52) and Elvira Mendez Street, City of Panama, Republic of Panama  4. Bareboat Charterers/Place of business (Cl. 1)  Titan Ocean Navigation Co., of 80 Broad Street, Monrovia, Liberia guaranteed by Seanergy Maritime Holdings Corp., of Trust Company  Complex, Ajeltake Road, Ajeltake Island, MH 96960 Majuro, Marshall Islands  5.  Vessel’s name, call sign and flag (Cl. 1 and 3)  Name: M.V. CAPE ETERNITY Flag: PANAMA  IMO: 9603362  6.  Type of Vessel Bulk Carrier  7. GT/NT  GT:106,261 NT: 67,694  8.  When/Where built  October 2011  Nantong COSCO KHI Ship Eng  9. Total DWT (abt.) in metric tons on summer freeboard  Abt. 207,855 DWT  10. Classification Society (Cl. 3) NK (Nippon Kaiji Kyokai)  11. Date of last special survey by the Vessel’s classification society  6th August 2021  12 Further particulars of Vessel (also indicate minimum num Cl. 3)  All of Class NK Certificates, trading, national and international certificates shall be clean, valid and unextended  at the time of delivery on the vessel and continuous survey cycles shall be up to date without extension at the time of delivery.  13. Port or Place of delivery (Cl. 3)  Charter free, free of stowaways, safely afloat at a safe berth or a safe accessible anchorage at a safe port  Singapore/Japan range or Skaw/Passero range including EIRE/U.K., excluding Black Sea and Azov Sea and Russia, or Boston Bahia/Blanca range including US  Gulf/Caribs/East Coast Central America/North Coast South America in Owners option but always at a place  suitable for safe crew exchanges and usual delivery formalities.  14. Time for delivery (Cl. 4)  Between 1st August  2023 and 20th December 2023 in Owners’ option.  15. Cancelling date (Cl. 5)  20th December 2023  16. Port or Place of redelivery (Cl. 15)  Singapore/Japan range or Skaw/Passero range including EIRE/U.K., excluding Black Sea and Azov Sea and Russia, or Boston Bahia/Blanca range including US  Gulf/Caribs/East Coast Central America/North Coast South America in Charterers’ option  17. No. of months’ validity of trading and class certificates upon redelivery (Cl. 15)  Three months or less in case the delivery takes place during the annual / renewal process of the certificates.  18. Running days’ notice if other than stated in Cl. 4  See clause 32  19. Frequency of dry-docking (Cl. 10(g))  As required by class  Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will  constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001. 

 Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will  constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.  20. Trading limits (Cl. 6)  Worldwide Trading always within Institute Warranty Limits (IWL). However, any country designated pursuant to any international (including United Nations, or United States or European Union or member state of European Union or United Kingdom or Japan, Panama, China) or regulation imposing trade and economic sanctions, prohibitions or restrictions (which may be amended from time to time during the Charter period), North Korea, Israel, and other countries sanctioned / boycotted / banned by UN or USA, Japan, Panama, China, to be excluded from trading. If the situation of the country(ies) or a country not including in trading is changed, both parties will discuss. War or warlike zone to be excluded. Charterers may breach IWL against payment of  additional premium / expense prior to Charterers’ written notice to the Owners but need prior written Owners’ consent. Owners’ written response to be received within 24 hours not to delay the operation of the Vessel.  21. Charter period (Cl. 2)  12 months + 30days at Charterers’ option, from the time of delivery.  22. Charter hire (Cl. 11)  USD 9,000 per day  23. New class and other safety requirements (state percentage of Vessel’s insurance value acc. to Box 29)(Cl. 10(a)(ii))  See Clause 37  24. Rate of interest payable acc. to Cl. 11 (f) and, if applicable, acc. to PART IV  5.0%  25. Currency and method of payment (Cl. 11)  United States Dollars (see also clause 11)  26. Place of payment; also state beneficiary and bank account (Cl. 11)  BANK NAME: THE KAGAWA BANK, LTD. BRANCH NAME: IMABARI  BRANCH SWIFT CODE: BANK ADDRESS:  1-3-2 BEKKUCHO,IMABARI-CITY EHIME JAPAN  BENEFICIARY’S USD ACCOUNT NO:  BENEFICIARY: MI-DAS LINE S.A. BENEFICIARY ADDRESS:  VALLARINO BUILDING, 3RD FLOOR,FIFTY SECOND(52) AND ELVIRA MENDEZ STREET, CITY OF PANAMA,  REPUBLIC OF PANAMA  27. Bank guarantee/bond (sum and place) (Cl. 24) (optional)  N/A  28. Mortgage(s), if any (state whether 12(a) or (b) applies; if 12(b) applies state date of Financial Instrument and  name of Mortgagee(s)/Place of business) (Cl. 12)  See Clause 33  29. Insurance (hull and machinery and war risks) (state value acc. to Cl. 13(f) or, if applicable, acc. to Cl. 14(k)) (also state if Cl. 14 applies)  See Clause 34  30. Additional insurance cover, if any, for Owners’ account limited to (Cl. 13(b) or, if applicable, Cl. 14(g))  N/A  31. Additional insurance cover, if any, for Charterers’ account limited to (Cl. 13(b) or, if applicable, Cl. 14(g))  See Clause 13(b)  32. Latent defects (only to be filled in if period other than stated in Cl. 3)  N/A  33. Brokerage commission and to whom payable (Cl. 27)  N/A  34. Grace period (state number of clear banking days) (Cl. 28)  Three (3) banking days (as defined in clause 1)  35. Dispute Resolution (state 30(a), 30(b) or 30(c); if 30(c) agreed Place of Arbitration must be stated (Cl. 30)  36. War cancellation (indicate countries agreed) (Cl. 26(f))  N/A  37. Newbuilding Vessel (indicate with “yes” or “no” whether PART III applies) (optional)  N/A  38. Name and place of Builders (only to be filled in if PART III applies)  N/A 
 


 o.  Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.  39. Vessel’s Yard Building No. (only to be filled in if PART III applies)  N/A  40. Date of Building Contract (only to be filled in if PART III applies)  N/A  Liquidated damages and costs shall accrue to (state party acc. to Cl. 1)  N/A  N/A  N/A  42. Hire/Purchase agreement (indicate with “yes” or “no” whether PART IV applies) (optional)  See Clause 36  43. Bareboat Charter Registry (indicate with “yes” or “no” whether PART V applies) (optional)  No  44. Flag and Country of the Bareboat Charter Registry (only to be filled in if PART V applies)  Liberia  45. Country of the Underlying Registry (only to be filled in if PART V applies)  N/A  46. Number of additional clauses covering special provisions, if agreed  See Clause 32 to 44  PREAMBLE - It is mutually agreed that this Contract shall be performed subject to the conditions contained in this Charter  which shall include PART I and PART II. In the event of a conflict of conditions, the provisions of PART I shall prevail over those of PART II to the extent of such conflict but no further. It is further mutually agreed that PART III and/or PART IV and/or PART V shall only apply and only form part of this Charter if expressly agreed and stated in Boxes 37, 42 and 43. If PART III and/or PART IV and/or PART V apply, it is further agreed that in the event of a conflict of conditions, the provisions of PART I and PART II shall prevail over those of PART III and/or PART IV and/or PART V to the extent of such conflict but no further.  Signature (Owners)  Mi-Das Line S.A.  /s/ Genji Ohkouchi Name: Genji Ohkouchi Title: President  Signature (Charterers)  Titan Ocean Navigation Co.,  /s/ Stamatios Tsantanis Nsme: Stamatios Tsantanis Title : President 
 

 PART II  BARECON 2001 Standard Bareboat Charter  1.  Definitions  In this Charter, the following terms shall have the meanings hereby assigned to them: “The Owners” shall mean the party identified in Box 3.  “The Charterers” shall mean the party identified in Box 4.  “The Vessel” shall mean the vessel named in Box 5 and with particulars as stated in Boxes 6 to 12. “The Charter” means this Bareboat Charter with Rider clauses and as later amended  “The Parties” jointly refers to both the Owners and the Charterers.  “Banking Days” are days on which banks are open in the United States of America (New York), Panama, Japan,  Cyprus and Greece and Buyers nominated flag state  “Financial Instrument” means the mortgage, deed of covenant or other such financial security instrument as annexed to this Charter and stated in Box 28.  2.  Charter Period  In consideration of the hire detailed in Box 22, the Owners have agreed to let and the Charterers have agreed to hire the Vessel for the period stated in Box 21 (“The Charter Period”).  3.  Delivery See Clause 32  (not applicable when Part III applies, as indicated in Box 37)  The Owners shall before and at the time of delivery exercise due diligence to make deliver the Vessel seaworthy and in every respect ready in hull, machinery and equipment for service under this Charter following  completion of an Underwater Inspection to be arranged by Charterers and paid by Charterers at the delivery  port with NK class surveyor attendance arranged by Owners. Charterers to declared their option for underwater inspection following receipt of the 7 days’ notice by Owners. In the event that damage affecting class is found, Owners to cover all expenses for the relevant repairs during the Vessel’s redelivery or exercise of purchase option. In the event that the Class requires the repairs to be performed immediately (CoC), the repairs to be  arranged prior to delivery of the Vessel from the Owners to the Charterers at Owners’ cost.   The Vessel shall be delivered by the Owners and taken over by the Charterers at the port or place indicated in Box 13 in such ready safe berth as the Charterers may direct. The Vessel delivery place should be available for crew exchanges and should be mutually agreed between the Owners and the Charterers. In case if due to  Coronavirus issue, the delivery of the Vessel is affected or delayed by reasons, including but not limited to crew change not being able to take place at the intended delivery port, the new delivery place to mutually agreed between the Owners and the charterers. The sharing cost of related expenses as a result of such delays and change in delivery port to be shared 50/50 by both parties including the consumed bunkers and lubricating oils from the final discharging port to the actual delivery port. If delivery of the Vessel is expected to take place  beyond the original Cancelling Date mentioned herein, then, the Cancelling Date shall be extended with mutual agreement by the parties.  The Vessel shall be properly documented on delivery in accordance with the laws of the flag state indicated in Box 5 and the requirements of the classification society stated in Box 10. The Vessel upon delivery shall have her survey cycles up to date and trading and class certificates valid and unextended at the time of the delivery for at least the number ofone months agreed in Box 12.   The Vessel shall be delivered charter free, free from AGM, free of stowaways and taken over safely afloat at the port or place indicated in Box 13. The Vessel shall be delivered with swept/clean cargo holds at the time of  delivery, however the Owners have an option to deliver the vessel with her holds as they are without cleaning after discharge, against compensation of USD 4,000 in lieu of cargo hold cleaning.  Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon  document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001. 
 

 PART II  BARECON 2001 Standard Bareboat Charter   The Vessel shall be delivered with her class maintained, free of condition, recommendations also free of damage affecting her class. The Owners shall provide the Charterers with Class Maintenance Certificate to be  issued by Class NK dated not more than three (3) Banking Days prior to the expected date of delivery showing that, on the basis of the review of the Vessel’s survey records filed in the Class head office, the Vessel’s class is  maintained without outstanding condition, recommendations (which does not mean “Note” and “Observation”).  (c)  The delivery of the Vessel by the Owners and the taking over of the Vessel by the Charterers shall constitute a full performance by the Owners of all the Owners’ obligations under this Clause 3, and thereafter the Charterers shall not be entitled to make or assert any claim against the Owners on account of any conditions, representations or warranties expressed or implied with respect to the Vessel. but the Owners shall be liable for the cost of but not the time for repairs or renewals occasioned by latent defects in the Vessel, her machinery or appurtenances, existing at the time of delivery under this Charter, provided such defects have manifested themselves within twelve (12) months after delivery unless otherwise provided in Box 32.  Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document  will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.  4.  Time for Delivery (See also Clause 32)  (not applicable when Part III applies, as indicated in Box 37)  The Vessel shall not be delivered before within the date indicated in Box 14 without the Charterers’ consent andin the Owners’ option shall exercise due diligence to deliver the Vessel not later than the date indicated in Box 15.  The Buyers crew are Syrian, In case that the Vessel shall be redelivered from current Charterers in USA(or any other port/country where Syrian crew can not go), then the Owners will shift the vessel to the place where Buyers can send their crews to onboard the vessel for delivery and buyers will pay the ballasting cost such as FO/DO consumed.  Unless otherwise agreed in Box 18, the Owners shall give the Charterers not less than thirty (30) running days’ preliminary and not less than fourteen (14) running days’ definite notice of the date on which the Vessel is expected to be ready for delivery. The Owners shall tender the Charterers 30/20/15/20/15/10/7/53 days’ approximate notices with intended delivery port and 3, 2, 1 days’ definite notices delivery. Along with the Ten (10), days approximate notice Sellers at least to nominate Delivery Country. The Owners shall keep the Charterers closely advised of possible changes in the Vessel’s position.  The Charterers shall take delivery of the Vessel within three (3) Banking Days after the Owners have tendered to the Charterers “Notice of Readiness for Delivery” (NOR) in accordance with the terms and conditions of this agreement, the date of tendering such NOR exclusive.  Save for the case that the Owners and the Charterers do not reach the agreement of the delivery place, in the event the Charterers do not take delivery of the Vessel within the period specified above, the Charterers shall pay to the Owners for each day of the delay upto the tenth (10th) day of the delay the liquidated fied damages of US$10,000 per day pro rata. If the delay exceeds ten (10) days then the Owners shall have the right to cancel this agreement and claim proven damages for their losses following therefrom. In this case, the deposit Downpayment together with interest shall be forfeited to the Owners.  5.  Cancelling  (not applicable when Part III applies, as indicated in Box 37)  Should the Vessel not be delivered latest by the cancelling date indicated in Box 15, the Charterers shall have the option of cancelling this Charter by giving the Owners notice of cancellation within thirty-six (36) running hours after the cancelling date stated in Box 15, failing which this Charter shall remain in full force and effect.  If it appears that the Vessel will be delayed beyond the cancelling date, the Owners may, as soon as they are in a position to state with reasonable certainty the day on which the Vessel should be ready, give notice thereof to the Charterers asking whether they will exercise their option of cancelling, and the option must then be  declared within one hundred and sixty-eight (168) running hours of the receipt by the Charterers of such notice or within thirty-six (36) running hours after the cancelling date, whichever is the earlier. If the Charterers do not 
 

 PART II  BARECON 2001 Standard Bareboat Charter  then exercise their option of cancelling, the seventh day after the readiness date stated in the Owners’ notice shall be substituted for the cancelling date indicated in Box 15 for the purpose of this Clause 5.  (c)  Cancellation under this Clause 5 shall be without prejudice to any claim the Charterers may otherwise have on the Owners under this Charter.   In the event that the Charterers cancel this agreement, part of the Deposit Downpayment already remitted and interest if any shall be returned to the Charterers within 5 Banking Days.  Trading Restrictions  The Vessel shall be employed in lawful trades for the carriage of suitable lawful merchandise within the trading limits indicated in Box 20.  The Charterers undertake not to employ the Vessel or suffer the Vessel to be employed otherwise than in conformity with the terms of the contracts of insurance (including any warranties expressed 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.  The Charterers also undertake not to employ the Vessel or suffer her employment in any trade or business which is forbidden by the law of any country to which the Vessel may sail or is otherwise illicit or in carrying illicit or prohibited goods or in any manner whatsoever which may render her liable to condemnation, destruction, seizure or confiscation.  Notwithstanding any other provisions contained in this Charter it is agreed that nuclear fuels or radioactive products or waste are specifically excluded from the cargo permitted to be loaded or carried under this Charter. This exclusion does not apply to radio-isotopes used or intended to be used for any industrial, commercial, agricultural, medical or scientific purposes provided the Owners’ prior approval has been obtained to loading thereof.  Surveys on Delivery and Redelivery  (not applicable when Part III applies, as indicated in Box 37)  The Owners and Charterers shall each appoint surveyors for the purpose of determining and agreeing in writing the condition of the Vessel at the time of delivery and redelivery hereunder. The Owners shall bear all expenses of the On-hire Survey including loss of time, if any, and the Charterers shall bear all expenses of the Off-hire Survey including loss of time, if any, at the daily equivalent to the rate of hire or pro rata thereof. The Owners shall have the right at their expense but at Charterers’ time to arrange an underwater inspection by a diver approved by the Classification Society no earlier than 45 days and no later 30 days prior to redelivery of the Vessel. This inspection shall take place at a convenient port at Charterers’ option and shall be carried out without interference to the Vessel’s normal operation. Should such underwater inspection reveal major condition that affect the Class of the Vessel and such Class items require immediate rectification in accordance with specific instruction from the Classification Society and the Class will not grant an extension, and whereby such repairs cannot be made to the Vessel without immediate dry-docking, then the Vessel shall be dry-docked as soon as possible by Charterers in order to repair such Class items to the Classification Society’s satisfaction at Charterers’ reasonable expense and time. Any expense or time related to other repairs carried out during such dry-docking by Owners, and which are not the responsibility of Charterers under the Charter, shall be for Owner’s account. This clause 7 shall not apply if Charterers exercise their purchase option as set out in Clause 39.  8. Inspection  The Owners shall have the right at any time once per year after giving reasonable notice to the Charterers to inspect or survey the Vessel or instruct a duly authorised surveyor to carry out such survey on their behalf always provided such inspection or survey does not delay or interfere with the normal operation of the Vessel:  Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document  will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001. 
 

 PART II  BARECON 2001 Standard Bareboat Charter  to ascertain the condition of the Vessel and satisfy themselves that the Vessel is being properly repaired and maintained. Such notice to be made no late than 30 days prior the Inspection or survey and the Charterers to keep the Owners well informed of the Vessel’s itinerary for inspection purpose. The costs and fees for such inspection or survey shall be paid by the Owners unless the Vessel is found to require repairs or maintenance to meet a condition required by Class or the Vessel’s Flag State in order to achieve the condition so provided;  in dry-dock if the Charterers have not dry-docked Her in accordance with Clause 10(g). The costs and fees for such inspection or survey shall be paid by the Charterers; and  (c)(c) for any other commercial reason they consider necessary (provided it does not unduly interfere with the commercial operation of the Vessel). The costs and fees for such inspection and survey shall be paid by the Owners.  All time used in respect of inspection, survey or repairs shall be for the Charterers’ account and form part of the Charter Period which inspection, survey or repairs shall not be interfere with the Vessel’s normal operation..  The Charterers shall also permit the Owners to inspect the Vessel’s log books whenever requested and shall whenever required by the Owners furnish them with full information regarding any casualties or other accidents or damage to the Vessel.  9.  Inventories, Oil and Stores  The Vessel shall be delivered with everything belonging to the Vessel on board including used and/or unused stores, spare parts, radio equipments and navigational aids except the Owners’ personal computers with software used for e-mail communication and ship’s management at the time of delivery. Provisions and bonded stores shall be settled by cash between the Owners’ crews and the Charterers’ crews upon delivery.A complete inventory of the Vessel’s entire equipment, outfit including spare parts, appliances and of all consumable stores on board the Vessel shall be made by the Charterers in conjunction with the Owners on delivery and again on redelivery of the Vessel. The Charterers and the Owners, respectively, shall at the time of delivery and redelivery take over and pay for all bunkers, lubricating oil, unbroached provisions, paints, ropes and other consumable stores (excluding spare parts) in the said Vessel at the then current market prices at the ports of delivery and redelivery, respectively. The Charterers shall ensure that all spare parts listed in the inventory and used during the Charter Period are replaced at their expense prior to redelivery of the Vessel.  The Vessel has neither spare propeller nor spare tail-end shaft. Inmarsat will be decommissioned during Panama Panama office hours, the Owners shall act swiftly after delivery of the Vessel.  Excluded from this agreement are personal effects of Master, Officers and crews including slop chest, log books (copies may be taken by the Charterers), ISM manuals, SMS, SSP (Ship Security Plan), original certificates to be returned to competent authorities and hire or third party’s items and current Charterers’ property and manuals/records of ship manager, which exclusively for use by the Owners on the Vessel and to be taken ashore by the Owners on or before delivery of the Vessel.  The Charterers shall take over and pay extra only for remaining Bunkers (i.e. VLSFO/LSMDO/LSMGO) and unused lubricating/hydraulic/grease oils in tanks, unopened drams and unopened cans onboard at the time of delivery. Remaining Bunkers for VLSFO and LSMGO to be paid at the previous Charterers’ contract price with supporting voucher or estimate price if not available upon deductions as per bunker wire PLATTS prices of last bunkering port or the nearest major port on the day of redelivery from previous Charterers or previous working day if redelivery from previous Charterers falls within weekend or holiday, actual purchased prices to be settled against supporting vouchers issued by bunker suppliers as per bunker wire PLATTS prices of last bunkering port on the day of redelivery from previous Charterers or previous working day if redelivery from previous Charterers falls within weekend or holiday, and Lubricating Oils to be paid at Owners’ net purchase price excluding barging cost by supporting vouchers. The quantities of remaining Bunkers and Lubricating Oils at the time of delivery for the settlement shall be sounded and fixed by between the Owners’ and Charterers’ representatives on an estimation basis latest by three (3) three (3) days prior to the expected date of delivery of the Vessel. The Charterers shall pay for Bunkers and Lubricating oils together with 1st hire payment based on the expected/roughly calculated amount. The surplus or shortage, if any, shall be adjusted at 2nd hire payment.  Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document  will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001. 
 

 Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document  will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.  PART II  BARECON 2001 Standard Bareboat Charter  If the Vessel will be shifted to other delivery place from last discharging port, then the cost for Bunkers/Lubs consumed for the Vessel shifting to other delivery place to be equally shared fully paid by between the Owners and the Charterers from. The quantities of the bunker/lubs consumption to be ascertained based on the Vessel’s figures, from DLOSP last discharging port to APS delivery port. last discharging port to be the delivery place, and additionally the Charterers will pay US$5,000/d as liquidate damages from the date (a)the vessel is redelivered from previous charterers at last discharging port until the date that Owners can tender N/R at newly agreed delivery port if this is due to the Buyers/Charterers.  In case the vessel is redelivered from present Charterers at South Korea, PRC, Taiwan, Vietnam, Thailand and Philippines, the cost of bunkers consumed for the vessel shifting to nearest delivery port as aforementioned to be shared equally between the Sellers and the Buyers. The quantities of the bunker consumptions to be ascertained based on the vessel’s figures, from DLOSP last discharging port to APS delivery port.  All plans/drawings/instruction manuals (excluding ISM manuals, SMS and SSP) which are onboard shall be delivered to the Charterers ‘as they are’ upon delivery of the Vessel without extra cost to Charterers.  All plans/drawings/instruction manuals (excluding ISM manuals, SMS and SSP) which are kept in the Owners’ office shall be dispatched to the Charterers’ designated place after delivery of the Vessel at the Charterers’ account.  Maintenance and Operation  (i) Maintenance and Repairs - During the Charter Period the Vessel shall be in the full possession and at the absolute disposal for all purposes of the Charterers and under their complete control in every respect. The Charterers shall maintain the Vessel, her machinery, boilers, appurtenances and spare parts in a good state of repair, in efficient operating condition and in accordance with good commercial maintenance practice and, except as provided for in Clause 14(l), if applicable, at their own expense they shall at all times keep the Vessel’s Class fully up to date with the Classification Society indicated in Box 10 and maintain all other necessary certificates in force at all times.   New Class and Other Safety Requirements - In the event of any improvement, structural changes or new equipment becoming necessary for the continued operation of the Vessel by reason of new class requirements or by compulsory legislation (including but not limited to Ballast Water Treatment System, New Panama, Sox and Nox) the cost and time of compliance shall be for Charterers account. If those new equipment needs to be removed when the Vessel will be redelivered, the cost and time of removal shall be for Charterers account. Notwithstanding the foregoing, Charterers are allowed to make improvements to the Vessel provided cost of same to be for Charterers account subject to the prior written consent of the Owners.)costing (excluding the Charterers’ loss of time) more than the percentage stated in Box 23, or if Box 23 is left blank, 5 per cent of the Vessel’s insurance value as stated in Box 29, then the terms as stated in Clause 37 extent, if any, to which the rate of hire shall be varied and the ratio in which the cost of compliance shall be shared between the parties concerned in order to achieve a reasonable distribution thereof as between the Owners and the Charterers having regard, inter alia, to the length of the period remaining under this Charter shall, in the absence of agreement, be referred to the dispute resolution method agreed in Clause 30.   Financial Security - The Charterers shall maintain financial security or responsibility in respect of third party liabilities as required by any government, including federal, state or municipal or other division or authority thereof, to enable the Vessel, without penalty or charge, lawfully to enter, remain at, or leave any port, place, territorial or contiguous waters of any country, state or municipality in performance of this Charter without any delay. This obligation shall apply whether or not such requirements have been lawfully imposed by such government or division or authority thereof.  The Charterers shall make and maintain all arrangements by bond or otherwise as may be necessary to satisfy such requirements at the Charterers’ sole expense and the Charterers shall indemnify the Owners against all consequences whatsoever (including loss of time) for any failure or inability to do so.  (b) Operation of the Vessel - The Charterers shall at their own expense and by their own procurement man, victual, navigate, operate, supply, fuel and, whenever required, repair the Vessel during the Charter Period and they shall pay all charges and expenses of every kind and nature whatsoever incidental to their use and operation of the Vessel under this Charter, including annual flag state fees and any foreign general municipality 
 

 Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document  will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.  PART II  BARECON 2001 Standard Bareboat Charter  and/or state taxes. The Master, officers and crew of the Vessel shall be the servants of the Charterers for all purposes whatsoever, even if for any reason appointed by the Owners.  Charterers shall comply with the regulations regarding officers and crew in force in the country of the Vessel’s flag or any other applicable law.  (c)  The Charterers shall keep the Owners and the mortgagee(s) advised of the intended employment, planned drydocking and major repairs of the Vessel, as reasonably required.  Flag and Name of Vessel – See Clauses 33 and 34 During the Charter Period, the Charterers shall have the liberty to paint the Vessel in their own colours, install and display their funnel insignia and fly their own house flag. The Charterers shall also have the liberty, with the Owners’ consent, which shall not be unreasonably withheld, to change the flag and/or the name of the Vessel during the Charter Period. Painting and re-painting, instalment and re-instalment, registration and re-registration, if required by the Owners, shall be at the Charterers’ expense and time.  Changes to the Vessel – Subject to Clause 10(a)(ii), the Charterers shall make no structural changes in the Vessel or changes in the machinery, boilers, appurtenances or spare parts thereof without in each instance first securing the Owners’ approval thereof. If the Owners so agree, the Charterers shall, if the Owners so require, restore the Vessel to its former condition before the termination of this Charter.  (f)  Use of the Vessel’s Outfit, Equipment and Appliances - The Charterers shall have the use of all outfit, equipment, and appliances on board the Vessel at the time of delivery, provided the same or their substantial equivalent shall be returned to the Owners on redelivery in the same good order and condition as when received, ordinary wear and tear excepted. The Charterers shall from time to time during the Charter Period replace such items of equipment as shall be so damaged or worn as to be unfit for use. The Charterers are to procure that all repairs to or replacement of any damaged, worn or lost parts or equipment be effected in such manner (both as regards workmanship and quality of materials) as not to diminish the value of the Vessel. The Charterers have the right to fit additional equipment, with Owners’ prior consent not to be unreasonably withheld, at the Charterers’ expense at their expense and risk but the Charterers shall remove such equipment at the end of the period unless Charterers purchase the Vessel upon redeliveryif requested by the Owners. Any equipment including radio equipment on hire on the Vessel at time of delivery shall be kept and maintained by the Charterers and the Charterers shall assume the obligations and liabilities of the Owners under any lease contracts in connection therewith and shall reimburse the Owners for all expenses incurred in connection therewith, also for any new equipment required in order to comply with radio regulations. See Clause 37 Clause 40.  (g) Periodical Dry-Docking - The Charterers shall dry-dock the Vessel and clean and paint her underwater parts whenever the same may be necessary, but not less than once during the period stated in Box 19 required by the Classification Society or flag state. or, if Box 19 has been left blank, every sixty (60) calendar months after delivery or such other period as may be required by the Classification Society or flag state.  Hire  The Charterers shall pay hire due to the Owners punctually in accordance with the terms of this Charter in respect of which time shall be of the essence.  (c)  (b) The Charterers shall pay to the Owners for the hire of the Vessel a lump sum monthly in advance in the amount indicated in Box 22 which shall be payable not later than every thirty (30) running days monthly in advance, the first lumpsum lump sum being payable on the date and hour of the Vessel’s delivery to the Charterers. Hire shall be paid continuously throughout the Charter Period. If hire payment date is National holiday in Japan, New York, Cyprus and GreeceSwitzerland, hire to be paid one day prior to that date. Full amount of hire shall be available in Owner’s nominated account on a monthly basis by the due date.  Payment of hire shall be made in cash without discount free of bank charges in the currency and in the manner indicated in Box 25 and at the place mentioned in Box 26.  (d) Final payment of hire, if for a period of less than thirty (30) running days one month, shall be calculated proportionally according to the number of days and hours remaining before redelivery or purchase and advance 
 

 PART II  BARECON 2001 Standard Bareboat Charter  payment to be effected accordingly.  (f)  (e) Should the Vessel be lost or missing, hire shall cease from the date and time when she was lost or last heard of. The date upon which the Vessel is to be treated as lost or missing shall be ten (10) days after the Vessel was last reported or when the Vessel is posted as missing by Lloyd’s, whichever occurs first. Any hire paid in advance to be adjusted accordingly.  Any delay in payment of hire shall entitle the Owners to interest at the rate per annum as agreed in Box 24. If Box 24 has not been filled in, the three months Interbank offered rate in London (LIBOR or its successor) for the  currency stated in Box 25, as quoted by the British Bankers’ Association (BBA) on the date when the hire fell due, increased by 2 per cent, shall apply.  Payment of interest due under sub-clause 11(f) shall be made within seven (7) running banking days of the date of the Owners’ invoice specifying the amount payable or, in the absence of an invoice, at the time of the next hire payment date.  Notwithstanding anything to the contrary contained herein, the Charterers shall make all payments under this Charter without any set-off or counter claim whatsoever and free and clear of any withholding or deduction for, or on account of, any present or future income, freight, stamp or other taxes, levies, imposts, duties, fees, charges, restrictions or conditions of any nature except any loss caused by the Owners.  12. Mortgage (See Clause 3633)  (only to apply if Box 28 has been appropriately filled in)  (a)* The Owners warrant that they have not effected any mortgage(s) of the Vessel and that they shall not effect any mortgage(s) without the prior consent of the Charterers, which shall not be unreasonably withheld.  (b)*  The Vessel chartered under this Charter is financed by a mortgage according to the Financial Instrument.  The Charterers undertake to comply, and provide such information and documents to enable the Owners to  comply, with all such instructions or directions in regard to the employment, insurances, operation, repairs and maintenance of the Vessel as laid down in the Financial Instrument or as may be directed from time to time during the currency of the Charter by the mortgagee(s) in conformity with the Financial Instrument. The Charterers confirm that, for this purpose, they have acquainted themselves with all relevant terms, conditions and provisions of the Financial Instrument and agree to acknowledge this in writing in any form that may be required by the mortgagee(s). The Owners warrant that they have not effected any mortgage(s) other than stated in Box 28 and that they shall not agree to any amendment of the mortgage(s) referred to in Box 28 or effect any other mortgage(s) without the prior consent of the Charterers, which shall not be unreasonably withheld.  *(Optional, Clauses 12(a) and 12(b) are alternatives; indicate alternative agreed in Box 28).  Insurance and Repairs See Clause 3734 and 4239  During the Charter Period the Vessel shall be kept insured by the Charterers at their expense against hull and machinery, war and Protection and Indemnity risks (and any risks against which it is compulsory to insure for the operation of the Vessel, including maintaining financial security in accordance with sub-clause 10(a)(iii)) in such form as the Owners shall in writing approve, which approval shall not be unreasonably withheld. Such insurances shall be arranged by the Charterers to protect the interests of both the Owners and the Charterers and the mortgagee(s) (if any), and the Charterers shall be at liberty to protect under such insurances the interests of any managers they may appoint. Insurance policies shall cover the Owners and the Charterers according to their respective interests.  Subject to the provisions of the Financial Instrument, if any, and the approval of the Owners and the insurers, the Charterers shall effect all insured repairs and shall undertake settlement and reimbursement from the insurers of all costs in connection with such repairs as well as insured charges, expenses and liabilities to the extent of coverage under the insurances herein provided for.  The Charterers also to remain responsible for and to effect repairs and settlement of costs and expenses incurred  Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document  will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001. 
 



 PART II  BARECON 2001 Standard Bareboat Charter  thereby in respect of all other repairs not covered by the insurances and/or not exceeding any possible franchise(s) or deductibles provided for in the insurances.  All time used for repairs under the provisions of sub-clause 13(a) and for repairs of latent defects according to Clause 3(c) above, including any deviation, shall be for the Charterers’ account.   If the conditions of the above insurances permit additional insurance to be placed by the parties, such cover shall be limited to the amount for each party set out in Box 30 and Box 31, respectively. The Owners or the Charterers as the case may be shall immediately furnish the other party with particulars of any additional insurance effected, including copies of any cover notes or policies and the written consent of the insurers of any such required insurance in any case where the consent of such insurers is necessary.  The Charterers shall upon the request of the Owners, provide information and promptly execute such documents as may be required to enable the Owners to comply with the insurance provisions of the Financial Instrument.  Subject to the provisions of the Financial Instrument, if any, s Should the Vessel become an actual, constructive, compromised or agreed total loss under the insurances required under sub-clause 13(a), all insurance payments for such loss shall be paid to the Owners who shall distribute and the moneys distributed between the Owners and the Charterers according to their respective interests in accordance with Clause 42.39. The Charterers undertake to notify the Owners and the mortgagee(s), if any, of any occurrences in consequence of which the Vessel is likely to become a total loss as defined in this Clause.  The Owners shall upon the request of the Charterers, promptly execute such documents as may be required to enable the Charterers to abandon the Vessel to insurers and claim a constructive total loss.  (f)  For the purpose of insurance coverage against hull and machinery and war risks under the provisions of subclause 13(a), the value of the Vessel is the sum indicated in Box 29.  Insurance, Repairs and Classification  (Optional, only to apply if expressly agreed and stated in Box 29, in which event Clause 13 shall be considered deleted).   During the Charter Period the Vessel shall be kept insured by the Owners at their expense against hull and machinery and war risks under the form of policy or policies attached hereto. The Owners and/or insurers shall not have any right of recovery or subrogation against the Charterers on account of loss of or any damage to the Vessel or her machinery or appurtenances covered by such insurance, or on account of payments made to  discharge claims against or liabilities of the Vessel or the Owners covered by such insurance. Insurance policies  shall cover the Owners and the Charterers according to their respective interests.  (b) During the Charter Period the Vessel shall be kept insured by the Charterers at their expense against Protection and Indemnity risks (and any risks against which it is compulsory to insure for the operation of the Vessel,  including maintaining financial security in accordance with sub-clause 10(a)(iii)) in such form as the Owners shall  in writing approve which approval shall not be unreasonably withheld.  (c) In the event that any act or negligence of the Charterers shall vitiate any of the insurance herein provided, the Charterers shall pay to the Owners all losses and indemnify the Owners against all claims and demands which  would otherwise have been covered by such insurance.  (d) The Charterers shall, subject to the approval of the Owners or Owners’ Underwriters, effect all insured repairs, and the Charterers shall undertake settlement of all miscellaneous expenses in connection with such repairs as  well as all insured charges, expenses and liabilities, to the extent of coverage under the insurances provided for  under the provisions of sub-clause 14(a).  The Charterers to be secured reimbursement through the Owners’ Underwriters for such expenditures upon  presentation of accounts.  (e) The Charterers to remain responsible for and to effect repairs and settlement of costs and expenses incurred thereby in respect of all other repairs not covered by the insurances and/or not exceeding any possible  franchise(s) or deductibles provided for in the insurances.  Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document  will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001. 
 




 PART II  BARECON 2001 Standard Bareboat Charter   All time used for repairs under the provisions of sub-clauses 14(d) and 14(e) and for repairs of latent defects according to Clause 3 above, including any deviation, shall be for the Charterers’ account and shall form part of the Charter Period.  The Owners shall not be responsible for any expenses as are incident to the use and operation of the Vessel for such time as may be required to make such repairs.   If the conditions of the above insurances permit additional insurance to be placed by the parties such cover shall be limited to the amount for each party set out in Box 30 and Box 31, respectively. The Owners or the Charterers as the case may be shall immediately furnish the other party with particulars of any additional Insurance effected,  including copies of any cover notes or policies and the written consent of the insurers of any such required  insurance in any case where the consent of such insurers is necessary.  (h) Should the Vessel become an actual, constructive, compromised or agreed total loss under the insurances required under sub-clause 14(a), all insurance payments for such loss shall be paid to the Owners, who shall  distribute the moneys between themselves and the Charterers according to their respective interests.  (i) If the Vessel becomes an actual, constructive, compromised or agreed total loss under the insurances arranged by the Owners in accordance with sub-clause 14(a), this Charter shall terminate as of the date of such loss.  The Charterers shall upon the request of the Owners, promptly execute such documents as may be required to enable the Owners to abandon the Vessel to the insurers and claim a constructive total loss.  For the purpose of insurance coverage against hull and machinery and war risks under the provisions of subclause 14(a), the value of the Vessel is the sum indicated in Box 29.   Notwithstanding anything contained in sub-clause 10(a), it is agreed that under the provisions of Clause 14, if applicable, the Owners shall keep the Vessel’s Class fully up to date with the Classification Society indicated in Box 10 and maintain all other necessary certificates in force at all times.  15. Redelivery  At the expiration of the Charter Period unless the Charterers have exercised their purchase option the Vessel shall be redelivered by the Charterers to the Owners at a safe and ice-free port or place as indicated in Box 16, in such ready safe berth as the Owners Charterers may direct. The Charterers shall give the Owners not less than sixty (60), thirty (30), twenty (20), ten (10) and seven (7) running days’ preliminary notice of expected date, range of ports of redelivery or port or place of redelivery and not less than fourteen (14), five (5), three (3) and one (1) running days’ definite notice of expected date and port or place of redelivery.  Any changes thereafter in the Vessel’s position shall be notified immediately to the Owners.  The Charterers warrant that they will not permit the Vessel to commence a voyage (including any preceding ballast voyage) which cannot reasonably be expected to be completed in time to allow redelivery of the Vessel within the Charter Period. Notwithstanding the above, should the Charterers fail to redeliver the Vessel within the Charter Period due to the fault of the Charterers, the Charterers shall pay the daily equivalent to the rate of hire stated in Box 22 plus 10 per cent or to the market rate, whichever is the higher, for the number of days by which the Charter Period is exceeded. All other terms, conditions and provisions of this Charter shall continue to apply.  Subject to the provisions of Clause 10, the Vessel shall be redelivered to the Owners in the same or as good structure, state, condition and class as that in which she was delivered, fair wear and tear not affecting class excepted.  The Vessel upon redelivery shall have her survey cycles up to date and trading and class certificates valid for at least the number of months agreed in Box 17 if applicable.  Unless the Charterers exercise their option to purchase the Vessel, the Owners shall have the right at their expense but at the Charterers’ time to arrange an underwater inspection by a diver approved by the Classification Society no earlier than 45 days and no later 30 days prior to redelivery of the Vessel. This inspection shall take  Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document  will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001. 
 


 PART II  BARECON 2001 Standard Bareboat Charter  place at a convenient port at Charterers’ option and shall be carried out without interference to the Vessel’s normal operation. Should such underwater inspection reveal major condition that affect the Class of the Vessel and such Class items require immediate rectification in accordance with specific instruction from the Classification Society and the Class will not grant an extension, and whereby such repairs cannot be made to the Vessel without immediate dry-docking, then the Vessel shall be dry-docked as soon as possible by Charterers in order to repair such Class items. Any related to other repairs carried out during such drydocking by the Owners and which are not the responsibility of the Charterers under the Charter, shall be the Owners’ account. This clause shall not apply if the Charterers exercise their purchase option as set out in Clause 36.  Non-Lien  The Charterers will not suffer, nor permit to be continued, any lien or encumbrance incurred by them or their agents, which might have priority over the title and interest of the Owners in the Vessel. The Charterers further agree to fasten to the Vessel in a conspicuous place and to keep so fastened during the Charter Period a notice reading as follows:  “This Vessel is the property of (name of Owners). It is under charter to (name of Charterers) and by the terms of the Charter Party neither the Charterers nor the Master have any right, power or authority to create, incur or permit to be imposed on the Vessel any lien whatsoever.”  Indemnity  The Charterers shall indemnify the Owners, in each case as properly documented and evidenced, against any loss, damage or documented and reasonable expense incurred by the Owners arising out of or in relation to the operation of the Vessel by the Charterers, and against any lien of whatsoever nature arising out of an event occurring during the Charter Period. If the Vessel be arrested or otherwise detained by reason of claims or liens arising out of her operation hereunder by the Charterers, the Charterers shall at their own expense take all reasonable steps to secure that within a reasonable time the Vessel is released, including the provision of bail.  Without prejudice to the generality of the foregoing, the Charterers agree to indemnify the Owners against all consequences or liabilities arising from the Master, officers or agents signing Bills of Lading or other documents.  If the Vessel be arrested or otherwise detained by reason of a claim or claims against the Owners, the Owners shall at their own expense take all reasonable steps to secure that within a reasonable time the Vessel is released, including the provision of bail.  In such circumstances the Owners shall indemnify the Charterers against any loss, damage or documented expense incurred by the Charterers (including hire paid under this Charter) as a direct consequence of such arrest or detention.  The Charterers shall indemnify the Owners, in each case as properly documented and evidenced; against any and all liabilities, obligations, taxes- imposed on, or suffered by the Owners and relating to the operation of the Vessel and this Charter (excluding the taxed levied on the Owners by the competent tax authorities in its state of residence in relation to the Charterhire and (tax imposed on the overall net income of the Owners), losses, damages, penalties, fees, claims, actions, suits and cost (excluding loss of profit or business interruption expenses) of whatsoever kind and nature which may be incurred by the Charterers (whether during or after the Charter Period) or incurred by the Owners during the Charter Period only and in consequence of or in any way relating to or arising out of this Charter, the ownership, documentation, delivery, possession, use, operation, chartering, sub- chartering, condition, maintenance, or repair of the Vessel including without limitation, claims or penalties arising from any violation of the laws of any foreign country or political subdivision thereof; any claim as a result of latent or other defects in the Vessel, whether or not discoverable by the Charterer or the Owners and any claims for patent, trademark or copyright infringement in connection to this Charter or the Vessel, and any claims for injury or damages caused by pollution, leaking or spillage of cargo caried by the Vessel; and any claims by owners of cargo or other third parties arising in connection with any of the matters aforesaid.  If there arise any pollution event or incident by or on around the Vessel, in consequence of or in any way relating to or arising out of, including without limitation, any presence, emission, release or leak of any pollutant in Charterers shall promptly take all necessary actions and steps to prevent occurrence of any losses and/or damages to the Vessel and this parties lives and properties or occurrence of any violation of MARPOL or domestic  Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document  will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001. 
 

 PART II  BARECON 2001 Standard Bareboat Charter  law or regulation including OPA 90 or regulations adopting MARPOL as a result of which the Vessel is ordered not to leave by the coast guard or police or prosecutors or other judicial persons, and if any such losses and/or damages occur or any claim is made by any coast guard or police or prosecutors or other judicial persons for fine and other civil, criminal or administrative offence or made by any third party for liabilities against the Vessel or the Charterers or the Owners, then Charterers shall indemnify the Owners against the aforesaid loss or damages or claim by way of settlement with such third parties or payments to them in accordance with P&I insurers recommendation and approvals as far as with respect to such claims covered by P&I Insurance so that the Vessel, the Charterers and the Owners will entirely be discharged and released from such claim and remedied in respect of such losses, damages and claims.  (e) The Charterers shall not be obliged to indemnify the Owners under this Charter to the extent any losses are caused by the gross neglligence or wilful misconduct of the Owners.  Lien  The Owners to have a lien upon all cargoes, sub-hires and sub-freights belonging or due to the Charterers or any sub-charterers and any Bill of Lading freight for all claims under this Charter, and the Charterers to have a lien on the Vessel for all moneys paid in advance and not earned.  Salvage  All salvage and towage performed by the Vessel shall be for the Charterers’ benefit and the cost of repairing damage occasioned thereby shall be borne by the Charterers.  Wreck Removal  In the event of the Vessel becoming a wreck or obstruction to navigation the Charterers shall indemnify the Owners against any sums whatsoever which the Owners shall become liable to pay and shall pay in consequence of the Vessel becoming a wreck or obstruction to navigation.  General Average  The Owners shall not contribute to General Average.  Assignment, Sub-Charter and Sale See also Clause 35  The Charterers shall not assign this Charter nor sub-charter the Vessel on a bareboat basis except with the prior consent in writing of the Owners, which shall not be unreasonably withheld, and subject to such terms and conditions as the Owners shall approve.  The Owners shall not sell the Vessel during the currency of this Charter except with the prior written consent of the Charterers, which shall not be unreasonably withheld or delayed, and subject to the buyer accepting an assignment of this Charter.  Contracts of Carriage  * The Charterers are to procure that all documents issued during the Charter Period evidencing the terms and conditions agreed in respect of carriage of goods shall contain a paramount clause incorporating any legislation relating to carrier’s liability for cargo compulsorily applicable in the trade; if no such legislation exists, the documents shall incorporate the Hague Rules or the Hague-Visby Rules. The documents shall also contain the New Jason Clause and the Both-to-Blame Collision Clause.  * The Charterers are to procure that all passenger tickets issued during the Charter Period for the carriage of passengers and their luggage under this Charter shall contain a paramount clause incorporating any legislation relating to carrier’s liability for passengers and their luggage compulsorily applicable in the trade; if no such  legislation exists, the passenger tickets shall incorporate the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, 1974, and any protocol thereto.  *Delete as applicable.  Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document  will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001. 
 

 (e)  The Charterers shall have the liberty:  Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document  will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.  PART II  BARECON 2001 Standard Bareboat Charter  Bank Guarantee  (Optional, only to apply if Box 27 filled in)  The Charterers undertake to furnish, before delivery of the Vessel, a first class bank guarantee or bond in the sum and at the place as indicated in Box 27 as guarantee for full performance of their obligations under this Charter.  Requisition/Acquisition  In the event of the Requisition for Hire of the Vessel by any governmental or other competent authority (hereinafter referred to as “Requisition for Hire”) irrespective of the date during the Charter Period when “Requisition for Hire” may occur and irrespective of the length thereof and whether or not it be for an indefinite or a limited period of time, and irrespective of whether it may or will remain in force for the remainder of the Charter Period, this Charter shall not be deemed thereby or thereupon to be frustrated or otherwise terminated and the Charterers shall continue to pay the stipulated hire in the manner provided by this Charter until the time when the Charter would have terminated pursuant to any of the provisions hereof always provided however that in the event of “Requisition for Hire” any Requisition Hire or compensation received or receivable by the Owners shall be payable to the Charterers during the remainder of the Charter Period or the period of the “Requisition for Hire” whichever be the shorter.  In the event of the Owners being deprived of their ownership in the Vessel by any Compulsory Acquisition of the Vessel or requisition for title by any governmental or other competent authority (hereinafter referred to as “Compulsory Acquisition”), then, irrespective of the date during the Charter Period when “Compulsory Acquisition” may occur, this Charter shall be deemed terminated as of the date of such “Compulsory Acquisition”. In such event Charter Hire to be considered as earned and to be paid up to the date and time of such “Compulsory Acquisition”. However, in that case, the Charterers and the Owners shall firstly discuss the situation and agree the alternative method mutually in good faith prior to such termination.  War  For the purpose of this Clause, the words “War Risks” shall include any war (whether actual or threatened), act of war, civil war, hostilities, revolution, rebellion, civil commotion, warlike operations, the laying of mines (whether actual or reported), acts of piracy, acts of terrorists, acts of hostility or malicious damage, blockades (whether imposed against all vessels or imposed selectively against vessels of certain flags or ownership, or against certain cargoes or crews or otherwise howsoever), by any person, body, terrorist or political group, or the Government of any state whatsoever, which may be dangerous or are likely to be or to become dangerous to the Vessel, her cargo, crew or other persons on board the Vessel.  The Vessel, unless the written consent of the Owners be first obtained, shall not continue to or go through any port, place, area or zone (whether of land or sea), or any waterway or canal, where it reasonably appears that the Vessel, her cargo, crew or other persons on board the Vessel, in the reasonable judgement of the Owners, may be, or are likely to be, exposed to War Risks. Should the Vessel be within any such place as aforesaid, which only becomes dangerous, or is likely to be or to become dangerous, after her entry into it, the Owners shall have the right to require the Vessel to leave such area.  (c)  The Vessel shall not load contraband cargo, or to pass through any blockade, whether such blockade be imposed on all vessels, or is imposed selectively in any way whatsoever against vessels of certain flags or ownership, or against certain cargoes or crews or otherwise howsoever, or to proceed to an area where she shall be subject, or is likely to be subject to a belligerent’s right of search and/or confiscation.  (d) If the insurers of the war risks insurance, when Clause 14 is applicable, should require payment of premiums and/or calls because, pursuant to the Charterers’ orders, the Vessel is within, or is due to enter and remain within, any area or areas which are specified by such insurers as being subject to additional premiums because of War Risks, then such premiums and/or calls shall be reimbursed by the Charterers to the Owners at the same time as the next payment of hire is due. 
 

 (ii) the Charterers fail to comply with the requirements of:  Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org.  First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.  PART II  BARECON 2001 Standard Bareboat Charter   to comply with all orders, directions, recommendations or advice as to departure, arrival, routes, sailing in convoy, ports of call, stoppages, destinations, discharge of cargo, delivery, or in any other way whatsoever, which are given by the Government of the Nation under whose flag the Vessel sails, or any other Government, body or group whatsoever acting with the power to compel compliance with their orders or directions;   to comply with the orders, directions or recommendations of any war risks underwriters who have the authority to give the same under the terms of the war risks insurance;   to comply with the terms of any resolution of the Security Council of the United Nations, any directives of the European Community, the effective orders of any other Supranational body which has the right to issue and give the same, and with national laws aimed at enforcing the same to which the Owners are subject, and to obey the orders and directions of those who are charged with their enforcement.  (f)  In the event of outbreak of war (whether there be a declaration of war or not)   between any two or more of the following countries: the United States of America; Russia; the United Kingdom; France; and the People’s Republic of China,   between any two or more of the countries stated in Box 36, both the Owners and the Charterers shall have the right to cancel this Charter subject to mutual agreement, whereupon the Charterers shall redeliver the Vessel to the Owners in accordance with Clause 15, if the Vessel has cargo on board after discharge thereof at destination, or if debarred under this Clause from reaching or entering it at a near, open and safe port as directed by the Owners Charterers, or if the Vessel has no cargo on board, at the port at which the Vessel then is or if at sea at a near, open and safe port as directed by the Owners decided by mutual consultation between the Owners and the Charterers. In all cases hire shall continue to be paid in accordance with Clause 11 and except as aforesaid all other provisions of this Charter shall apply until redelivery. However, neither party shall be entitled to terminate this Charter Party on account of minor and/or local war like operations or economic warfare anywhere, which will not interfere with the Vessel’s trades.  Commission  The Owners to pay a commission at the rate indicated in Box 33 to the Brokers named in Box 33 on any hire paid under the Charter. If no rate is indicated in Box 33, the commission to be paid by the Owners shall cover the actual expenses of the Brokers and a reasonable fee for their work.  If the full hire is not paid owing to breach of the Charter by either of the parties the party liable therefor shall indemnify the Brokers against their loss of commission.  Should the parties agree to cancel the Charter, the Owners shall indemnify the Brokers against any loss of commission but in such case the commission shall not exceed the brokerage on one year’s hire.  Termination  Charterers’ Default  The Owners shall be entitled to withdraw the Vessel from the service of the Charterers and terminate the Charter with immediate effect by written notice to the Charterers if:  (i) the Charterers fail to pay hire in accordance with Clause 11. However, where there is a failure to make punctual payment of hire due to oversight, negligence, errors or omissions on the part of the Charterers or their bankers, the Owners shall give the Charterers written notice of the number of clear banking days stated in Box 34 (as recognised at the agreed place of payment) in which to rectify the failure, and when so rectified within such number of days following the Owners’ notice, the payment shall stand as regular and punctual.  Failure by the Charterers to pay hire within the number of days stated in Box 34 of their receiving the Owners’ notice as provided herein, shall entitle the Owners to withdraw the Vessel from the service of the Charterers and terminate the Charter without further notice; 
 

 Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document  will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.  PART II  BARECON 2001 Standard Bareboat Charter  Clause 6 (Trading Restrictions)  Clause 13(a) (Insurance and Repairs)  provided that the Owners shall have the option, by written notice to the Charterers, to give the Charterers a specified number of 21 banking days grace within which to rectify the failure without prejudice to the Owners’ right to withdraw and terminate under this Clause if the Charterers fail to comply with such notice;  (iii) the Charterers fail to rectify any failure to comply with the requirements of sub-clause 10(a)(i) (Maintenance and Repairs) as soon as practically possible within 21 banking days after the Owners have requested them in writing so to do and in any event so that the Vessel’s insurance cover is not prejudiced.  (b) Owners’ Default  If the Owners shall by any act or omission be in breach of their obligations under this Charter to the extent that the Charterers are deprived of the use of the Vessel and such breach continues for a period of twenty one (21)fourteen (14) running banking days after written notice thereof has been given by the Charterers to the Owners, the Charterers shall be entitled to terminate this Charter with immediate effect by written notice to the Owners.  (c)  Loss of Vessel See also Clause 39  This Charter shall be deemed to be terminated if the Vessel becomes a total loss or is declared as a constructive or compromised or arranged total loss. For the purpose of this sub-clause, the Vessel shall not be deemed to be lost unless she has either become an actual total loss or agreement has been reached with her underwriters in respect of her constructive, compromised or arranged total loss or if such agreement with her underwriters is not reached it is adjudged by a competent tribunal that a constructive loss of the Vessel has occurred.  Either party shall be entitled to terminate this Charter with immediate effect by written notice to the other party in the event of an order being made or resolution passed for the winding up, dissolution, liquidation or bankruptcy of the other party (otherwise than for the purpose of reconstruction or amalgamation) or if a receiver is appointed, or if it suspends payment, ceases to carry on business or makes any special arrangement or composition with its creditors.  The termination of this Charter shall be without prejudice to all rights accrued due between the parties prior to the date of termination and to any claim that either party might have.  Repossession  In the event of the termination of this Charter in accordance with the applicable provisions of Clause 28, the Owners shall have the right to repossess the Vessel from the Charterers at her current or next port of call, or at a port or place convenient to them without hindrance or interference by the Charterers, courts or local authorities. Pending physical repossession of the Vessel in accordance with this Clause 29, the Charterers shall hold the Vessel as gratuitous bailee only to the Owners. The Owners shall arrange for an authorised representative to board the Vessel as soon as reasonably practicable following the termination of the Charter. The Vessel shall be deemed to be repossessed by the Owners from the Charterers upon the boarding of the Vessel by the Owners’ representative. All arrangements and expenses relating to the settling of wages, disembarkation and repatriation of the Charterers’ Master, officers and crew shall be the sole responsibility of the Charterers.  Dispute Resolution  a)* This Contract shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Contract shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.  The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced. 
 

 PART II  BARECON 2001 Standard Bareboat Charter  The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement.  Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.  In cases where neither the claim nor any counterclaim exceeds the sum of US$50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.  (b) * This Contract shall be governed by and construed in accordance with Title 9 of the United States Code and the Maritime Law of the United States and any dispute arising out of or in connection with this Contract shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them shall be final, and for the purposes of enforcing any  award, judgement may be entered on an award by any court of competent jurisdiction. The proceedings shall be  conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc.  In cases where neither the claim nor any counterclaim exceeds the sum of US$50,000 (or such other sum as the  parties may agree) the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of  the Society of Maritime Arbitrators, Inc. current at the time when the arbitration proceedings are commenced.  (c) * This Contract shall be governed by and construed in accordance with the laws of the place mutually agreed by the parties and any dispute arising out of or in connection with this Contract shall be referred to arbitration at a mutually agreed place, subject to the procedures applicable there.  Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document  will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.  Notwithstanding (a), (b) or (c) above, the parties may agree at any time to refer to mediation any difference and/or dispute arising out of or in connection with this Contract.  In the case of a dispute in respect of which arbitration has been commenced under (a), (b) or (c) above, the following shall apply:   Either party may at any time and from time to time elect to refer the dispute or part of the dispute to mediation by service on the other party of a written notice (the “Mediation Notice”) calling on the other party to agree to mediation.   The other party shall thereupon within 14 calendar days of receipt of the Mediation Notice confirm that they agree to mediation, in which case the parties shall thereafter agree a mediator within a further 14 calendar days, failing which on the application of either party a mediator will be appointed promptly by the Arbitration Tribunal (“the Tribunal”) or such person as the Tribunal may designate for that purpose. The mediation shall be conducted in such place and in accordance with such procedure and on such terms as the parties may agree or, in the event of disagreement, as may be set by the mediator.   If the other party does not agree to mediate, that fact may be brought to the attention of the Tribunal and may be taken into account by the Tribunal when allocating the costs of the arbitration as between the parties.   The mediation shall not affect the right of either party to seek such relief or take such steps as it considers necessary to protect its interest.   Either party may advise the Tribunal that they have agreed to mediation. The arbitration procedure shall continue during the conduct of the mediation but the Tribunal may take the mediation timetable into account when setting the timetable for steps in the arbitration. 
 

 Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon document  will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001.  PART II  BARECON 2001 Standard Bareboat Charter   Unless otherwise agreed or specified in the mediation terms, each party shall bear its own costs incurred in the mediation and the parties shall share equally the mediator’s costs and expenses.   The mediation process shall be without prejudice and confidential and no information or documents disclosed during it shall be revealed to the Tribunal except to the extent that they are disclosable under the law and procedure governing the arbitration.  (Note: The parties should be aware that the mediation process may not necessarily interrupt time limits.)  (e) If Box 35 in Part I is not appropriately filled in, sub-clause 30(a) of this Clause shall apply. Sub-clause 30(d) shall apply in all cases.  *Sub-clauses 30(a), 30(b) and 30(c) are alternatives; indicate alternative agreed in Box 35.  Notices   Any notice to be given by either party to the other party shall be in writing and may be sent by fax, telex,e-mail or registered or recorded mail or by personal service.  The address of the Parties for service of such communication shall be as follows : stated in Boxes 3 and 4 respectively.  For Owners :  c/o Doun Kisen Co., Ltd.  1307-8 Koh Goh Namikata-cho, Imabari-city, Ehime-pref, Japan Attention : Mr. Ryosuke Okochi & Mr. Takeomi Yagi  Tel :  E-mail :  For Charterers :  [TBA], of 80 Broad Street, Monrovia, Liberia guaranteed by Seanergy Maritime Holdings Corp., of Trust Company Complex, Ajeltake Road, Ajeltake Island, MH 96960 Majuro, Marshall Islands  Attention : Mr. Stavros Gyftakis Email :  Tel : 
 



 PART II  BARECON 2001 Standard Bareboat Charter  PART III  PROVISIONS TO APPLY FOR NEWBUILDING VESSELS ONLY  (Optional, only to apply if expressly agreed and stated in Box 37)  Specifications and Building Contract  The Vessel shall be constructed in accordance with the Building Contract (hereafter called “the Building Contract”) as annexed to this Charter, made between the Builders and the Owners and in accordance with the specifications  and plans annexed thereto, such Building Contract, specifications and plans having been counter-signed as  approved by the Charterers.  (b) No change shall be made in the Building Contract or in the specifications or plans of the Vessel as approved by the Charterers as aforesaid, without the Charterers’ consent.   The Charterers shall have the right to send their representative to the Builders’ Yard to inspect the Vessel during the course of her construction to satisfy themselves that construction is in accordance with such approved specifications and plans as referred to under sub-clause (a) of this Clause.   The Vessel shall be built in accordance with the Building Contract and shall be of the description set out therein. Subject to the provisions of sub-clause 2(c)(ii) hereunder, the Charterers shall be bound to accept the Vessel from the Owners, completed and constructed in accordance with the Building Contract, on the date of delivery by the Builders. The Charterers undertake that having accepted the Vessel they will not thereafter raise any claims against the Owners in respect of the Vessel’s performance or specification or defects, if any.  Nevertheless, in respect of any repairs, replacements or defects which appear within the first 12 months from delivery by the Builders, the Owners shall endeavour to compel the Builders to repair, replace or remedy any  defects or to recover from the Builders any expenditure incurred in carrying out such repairs, replacements or  remedies.  However, the Owners’ liability to the Charterers shall be limited to the extent the Owners have a valid claim against  the Builders under the guarantee clause of the Building Contract (a copy whereof has been supplied to the Charterers). The Charterers shall be bound to accept such sums as the Owners are reasonably able to recover under this Clause and shall make no further claim on the Owners for the difference between the amount(s) so recovered and the actual expenditure on repairs, replacement or remedying defects or for any loss of time incurred.  Any liquidated damages for physical defects or deficiencies shall accrue to the account of the party stated in Box  41(a) or if not filled in shall be shared equally between the parties.  The costs of pursuing a claim or claims against the Builders under this Clause (including any liability to the Builders)  shall be borne by the party stated in Box 41(b) or if not filled in shall be shared equally between the parties.  2. Time and Place of Delivery   Subject to the Vessel having completed her acceptance trials including trials of cargo equipment in accordance with the Building Contract and specifications to the satisfaction of the Charterers, the Owners shall give and the Charterers shall take delivery of the Vessel afloat when ready for delivery and properly documented at the Builders’ Yard or some other safe and readily accessible dock, wharf or place as may be agreed between the parties hereto and the Builders. Under the Building Contract the Builders have estimated that the Vessel will be ready for delivery to the Owners as therein provided but the delivery date for the purpose of this Charter shall be the date when the Vessel is in fact ready for delivery by the Builders after completion of trials whether that be before or after as indicated in the Building Contract. The Charterers shall not be entitled to refuse acceptance of delivery of the Vessel and upon and after such acceptance, subject to Clause 1(d), the Charterers shall not be entitled to make any claim against the Owners in respect of any conditions, representations or warranties, whether express or implied, as to the seaworthiness of the Vessel or in respect of delay in delivery.   If for any reason other than a default by the Owners under the Building Contract, the Builders become entitled under that Contract not to deliver the Vessel to the Owners, the Owners shall upon giving to the Charterers written notice of Builders becoming so entitled, be excused from giving delivery of the Vessel to the Charterers  Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon  document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001. 
 




 PART II  BARECON 2001 Standard Bareboat Charter  and upon receipt of such notice by the Charterers this Charter shall cease to have effect.  If for any reason the Owners become entitled under the Building Contract to reject the Vessel the Owners shall, before exercising such right of rejection, consult the Charterers and thereupon   if the Charterers do not wish to take delivery of the Vessel they shall inform the Owners within seven (7) running days by notice in writing and upon receipt by the Owners of such notice this Charter shall cease to have effect; or  if the Charterers wish to take delivery of the Vessel they may by notice in writing within seven (7) running days require the Owners to negotiate with the Builders as to the terms on which delivery should be taken and/or refrain from exercising their right to rejection and upon receipt of such notice the Owners shall commence such negotiations and/or take delivery of the Vessel from the Builders and deliver her to the Charterers;  in no circumstances shall the Charterers be entitled to reject the Vessel unless the Owners are able to reject the Vessel from the Builders;  if this Charter terminates under sub-clause (b) or (c) of this Clause, the Owners shall thereafter not be liable to the Charterers for any claim under or arising out of this Charter or its termination.   Any liquidated damages for delay in delivery under the Building Contract and any costs incurred in pursuing a claim therefor shall accrue to the account of the party stated in Box 41(c) or if not filled in shall be shared equally between the parties.  Guarantee Works  If not otherwise agreed, the Owners authorise the Charterers to arrange for the guarantee works to be performed in accordance with the building contract terms, and hire to continue during the period of guarantee works. The Charterers have to advise the Owners about the performance to the extent the Owners may request.  Name of Vessel  The name of the Vessel shall be mutually agreed between the Owners and the Charterers and the Vessel shall be painted in the colours, display the funnel insignia and fly the house flag as required by the Charterers.  Survey on Redelivery  The Owners and the Charterers shall appoint surveyors for the purpose of determining and agreeing in writing the condition of the Vessel at the time of redelivery.  Without prejudice to Clause 15 (Part II), the Charterers shall bear all survey expenses and all other costs, if any, including the cost of docking and undocking, if required, as well as all repair costs incurred. The Charterers shall also bear all loss of time spent in connection with any docking and undocking as well as repairs, which shall be paid at the rate of hire per day or pro rata.  Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org.  BIMCO SmartCon  First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001. 
 




 PART II  BARECON 2001 Standard Bareboat Charter  PART IV  HIRE/PURCHASE AGREEMENT  (Optional, only to apply if expressly agreed and stated in Box 42)  On expiration of this Charter and provided the Charterers have fulfilled their obligations according to Part I and II as well as Part III, if applicable, it is agreed, that on payment of the final payment of hire as per Clause 11 the Charterers have purchased the Vessel with everything belonging to her and the Vessel is fully paid for.  In the following paragraphs the Owners are referred to as the Sellers and the Charterers as the Buyers. The Vessel shall be delivered by the Sellers and taken over by the Buyers on expiration of the Charter.  The Sellers guarantee that the Vessel, at the time of delivery, is free from all encumbrances and maritime liens or any debts whatsoever other than those arising from anything done or not done by the Buyers or any existing mortgage agreed not to be paid off by the time of delivery. Should any claims, which have been incurred prior to the time of delivery be made against the Vessel, the Sellers hereby undertake to indemnify the Buyers against all consequences of such claims to the extent it can be proved that the Sellers are responsible for such claims. Any taxes, notarial, consular and other charges and expenses connected with the purchase and registration under Buyers’ flag, shall be for Buyers’ account. Any taxes, consular and other charges and expenses connected with closing of the Sellers’ register, shall be for Sellers’ account.  In exchange for payment of the last month’s hire instalment the Sellers shall furnish the Buyers with a Bill of Sale duly attested and legalized, together with a certificate setting out the registered encumbrances, if any. On delivery of the Vessel the Sellers shall provide for deletion of the Vessel from the Ship’s Register and deliver a certificate of deletion to the Buyers.  The Sellers shall, at the time of delivery, hand to the Buyers all classification certificates (for hull, engines, anchors, chains, etc.), as well as all plans which may be in Sellers’ possession.  The Wireless Installation and Nautical Instruments, unless on hire, shall be included in the sale without any extra payment.  The Vessel with everything belonging to her shall be at Sellers’ risk and expense until she is delivered to the Buyers, subject to the conditions of this Contract and the Vessel with everything belonging to her shall be delivered and taken over as she is at the time of delivery, after which the Sellers shall have no responsibility for possible faults or deficiencies of any description.  The Buyers undertake to pay for the repatriation of the Master, officers and other personnel if appointed by the Sellers to the port where the Vessel entered the Bareboat Charter as per Clause 3 (Part II) or to pay the equivalent cost for their journey to any other place.  Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon  document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001. 
 




 PART II  BARECON 2001 Standard Bareboat Charter  PART V  PROVISIONS TO APPLY FOR VESSELS REGISTERED IN A BAREBOAT CHARTER REGISTRY  (Optional, only to apply if expressly agreed and stated in Box 43)  2. Definitions  For the purpose of this PART V, the following terms shall have the meanings hereby assigned to them:  “The Bareboat Charter Registry” shall mean the registry of the State whose flag the Vessel will fly and in which the Charterers are registered as the bareboat charterers during the period of the Bareboat Charter.  “The Underlying Registry” shall mean the registry of the state in which the Owners of the Vessel are registered as Owners and to which jurisdiction and control of the Vessel will revert upon termination of the Bareboat Charter Registration.  Mortgage  The Vessel chartered under this Charter is financed by a mortgage and the provisions of Clause 12(b) (Part II) shall  apply.  Termination of Charter by Default  If the Vessel chartered under this Charter is registered in a Bareboat Charter Registry as stated in Box 44, and if the  Owners shall default in the payment of any amounts due under the mortgage(s) specified in Box 28, the Charterers shall, if so required by the mortgagee, direct the Owners to re-register the Vessel in the Underlying Registry as shown in Box 45.  In the event of the Vessel being deleted from the Bareboat Charter Registry as stated in Box 44, due to a default by the Owners in the payment of any amounts due under the mortgage(s), the Charterers shall have the right to  terminate this Charter forthwith and without prejudice to any other claim they may have against the Owners under this Charter.  Copyright © 2001 BIMCO. All rights reserved. Any unauthorised copying, duplication, reproduction or distribution of this BIMCO SmartCon  document will constitute an infringement of BIMCO’s copyright. Explanatory notes are available from BIMCO at www.bimco.org. First published in 1974 as BARECON A and B. Amalgamated and revised in 1989. Revised 2001. 
 


ADDITIONAL CLAUSES TO M/V “CAPE ETERNITY " BAREBOAT CHARTER PARTY DATED 9TH May, 2023

32.
Downpayment
 
As security for the correct fulfillment of this Charter, the Charterers shall make a downpayment of US$7,000,000.- (United States Dollars Seven Million only) in cash (hereinafter called the “Deposit Downpayment”), of which US$3,500,000.- (United States Dollars Three Million Five Hundred Thousand only) is to be paid upon signing of BBCP, and additional US$3,500,000.- (United States Dollars Three Million Five Hundred Thousand only) is to be paid upon commencement of BBCP .
 
If this Charter terminates under sub-clause (b) of Clause 28 or in case of Clause 5, the Owners shall refund the Deposit Downpayment if already paid to the Charterers and the Charterers shall have the right to claim their further losses, if any.
 
If this Charter terminates under sub-clause (a) of Clause 28, the Owners shall not be liable to return the Deposit Downpayment to the Charterers and may have the right to claim their further losses, if any.
 
If the Charter terminates due to “Loss of Vessel” under sub-clause (c) of Clause 28, the Charterers shall recover the Deposit Downpayment from the insurance payments paid and the Owners shall not be liable to return the Deposit Downpayment to the Charterers.
 
33.
Mortgage and Assignment
 
Excepting that the Owners shall be entitled to assign their rights, title and interest in and to this Charter by way of security to THE KAGAWA BANK, LTD. (the Mortgagee), neither Party shall assign its right or obligations or any part thereof to any third parties without the written consent of the other.
 
The Owners have the right to register a first priority mortgage on the Vessel in favor of the Mortgagee securing a loan (not exceeding the amount referred to above) under the relevant loan agreement under standard mortgage and security documentation but on the basis that the Owners undertake to procure from the Mortgagee a letter of quiet enjoyment in a form and substance satisfactory to the Charterers (the Letter of Quiet Enjoyment).
 
The Charterers agree to sign an acknowledgement of the Owners’ charter hire assignment (in form and substance satisfactory to the Charterers acting reasonably) or any other comparable document reasonably required by the Mortgagee, in favor of the Mortgagee (on the basis that this does not impose any greater liability to the Charterers than the liabilities they have under this Charter). During the course of the Charter the Owners have the right to register a substitute mortgage in favor of another bank provided such registration is effected in a similar amount to the loan amount outstanding with the Mortgagee at that time and a Letter of Quiet Enjoyment (in form and substance satisfactory to the Charterers and the Mortgagee) is provided in favor to the Charterers. Any costs incurred by the Charterers in respect of any of the above arrangements shall be for Owners’ account.
 
34.
Insurance
 
For Hull insurance purposes, the insured amount shall be an amount determined by the Charterers but shall on the Delivery Date not be less than 110% of USD33,544,500.00 In respect of partial losses, any payment by Underwriters not exceeding USD500,000 shall be paid directly to the Charterers who shall apply the same to effect the repairs in respect of which payment is made.

ADDITIONAL CLAUSES TO M/V "CAPE ETERNITY " BAREBOAT CHARTER PARTY DATED 9TH May, 2023
Any moneys in excess of USD500,000 payable under such insurance other than Total Loss shall be paid to the Charterers subject to the prior written consent of the Owners or the Owners’ bank but such consent shall not be unreasonably withheld or delayed. Such consent to be granted if the Owners are satisfied (acting reasonably) that all damage resulting from the partial loss will be made good and repaired and all liabilities in respect of repairing such damage will be discharged. If the Charterers or the Vessel’s insurers request the Owners consent or authority to the insurers making payment to a ship repairer on account of repairs being made to the Vessel as a result of it suffering such a partial loss, then, the Owners shall not unreasonably withheld or delay giving such consent or authority. In the absence of such prior written consent the money shall be paid to the Owners or the Owners’ bank. In case of repair work being expected exceeding USD300,000 the Charters will inform the Owners of details in a timely manner.
 
(a) Hull and Machinery insurance shall be taken out and maintained to be effective in the joint names of both the Charterers and the Owners as co-assured with the insurers against such fire and usual marine risks; and
 
(b) P&I Club insurance shall be effected by an entry or entries of the Vessel with or in any P&I Club to protect and indemnify the Owners as co-assured and the Vessel against all P&I risks (including, but not limited to, pollution spillage and leakage risks).

35.
Optional Periods
 
There are no options to extend the Charter.

36.
Purchase of the Vessel by the Charterers
 

 (a)
The Charterers (or their guaranteed nominee) may exercise their Purchase Option to purchase the Vessel from the Owners at the end of the Charter Period, for US$20,210,000.- (United States Dollars Twenty Million Twenty One Hundred Thousand only) (the “Purchase Option Price”) to the Owners on a strictly “as is where is” basis. The Charterers shall pay such Purchase Option Price in cash to the Owners upon transfer of title to the Vessel pursuant to the Sale Contract under clause (b) below.
 

 (b)
A separate sale and purchase contract (the “Sale Contract”) shall be executed between the Charterers (or the buyer nominated by the Charterers) and the Owners as seller on standard Norwegian Saleform 2012 terms, the form of which is appended as Exhibit A.
 

 (c)
Notwithstanding the provisions of Clause 36(b) any Sale Contract shall include the following provisions:
 

 (i)
the Owners guarantee that the Vessel, at the time of delivery, is free from all charters, encumbrances, mortgages, maritime liens or other debts or liabilities whatsoever.  Should any claims which have been incurred prior to the time of delivery be made against the Vessel, the Owners shall indemnify the buyer against all consequences of such claims;
 

 (ii)
the Owners shall furnish the buyer with documentation requested by the buyer including but not limited to:
 
ADDITIONAL CLAUSES TO M/V "CAPE ETERNITY " BAREBOAT CHARTER PARTY DATED 9TH May, 2023
  a.
evidence of the authorisation and capacity for the Owners to sell the Vessel and enter into all documentation in connection with such sale including but not limited to resolutions of the shareholders of the Owners, resolutions of the board of directors of the Owners and any power of attorney under which the Owners’ representatives sign any of the delivery documents (in each case notarised and apostilled or legalised), original certificates of good standing in respect of the Owners and certified true copies of the certificate of incorporation and articles of association (or equivalent) of the Owner;
 

 b.
documentation validly transferring title to the Vessel to the buyer;
 

 c.
any documentation required for the registration of the Vessel on the buyer’s chosen flag under the name of the buyer;
 

 d.
evidence that the Vessel is free from all registered encumbrances and has been (or will be shortly after delivery) deleted from its current Flag State registry;
 

 e.
evidence that the Vessel has class maintained status with the Classification Society;
 

 f.
documentation usually provided by a seller to a buyer in a second hand vessel sale and purchase transaction including but not limited to letters undertaking the vessel is not boycotted or blacklisted by any nation or organisation, undertakings to deliver deletion certificates and closed CSR forms within four (4) weeks of the delivery if not provided at delivery and commercial invoices for the Vessel and all other items purchased  by the buyer at delivery; and
 

 g.
all classification, technical and other documents in the possession of the Owners in relation to the Vessel;
 

 (iii)
any taxes, notarial, consular and other charges and expenses connected with the purchase and registration under buyer's flag shall be for buyer's account. Any taxes, consular and other charges and expenses connected with closing of the Vessels current flag, shall be for sellers' account; and
 

 (iv)
all spares on board and on order shall be included in the sale.
 

 (d)
If following the expiry of the Charter Period, the Owners from its act or omission fails to transfer title to the Vessel to the Charterers, the Owners shall within 10 days of the Charterers’ written demand:
 
ADDITIONAL CLAUSES TO M/V "CAPE ETERNITY " BAREBOAT CHARTER PARTY DATED 9TH May, 2023

(i)
pay to the Charterers the amount by which the fair market value of the Vessel (as determined by a broker appointed by the Charterers) exceeds the Purchase Option Price; and
 

 (ii)
keep the Charterers indemnified for all documented losses and expenses incurred by the Charterers due to the failure to transfer title.

37.
Improvements and Additions
 
The Charterers shall maintain, equip and operate the Vessel so as to comply in all mutual respects with the provisions of all laws and regulations of the Vessels flag country and of any other country or jurisdiction within which the vessel may operate.
 
The Charterers shall have the right to fit additional equipment to the Vessel and to make one or more improvements and additions to the Vessel at their expense and risk.
 
The Charterers shall also have the right to make structural or non–severable improvements and additions to the Vessel at their own cost, expense and risk provided that such improvements and additions shall not, or be reasonably likely to, diminish the market value of the Vessel or prejudice its marketability, in either case, in a material way.
 
With reference to the above second and third paragraphs, in the event that the Charterers fit additional equipment and/or make improvement, the Charterers shall give notice to the Owners of its details before completion of such fitting and/or improvement.
 
In the event of any structural changes to the Vessel or installation of new equipment becoming necessary for the continued operation of the Vessel by reason of new class requirements or by compulsory legislation, such as but not limited to Ballast Water Treatment System, the cost of measures needed for compliance shall be for the Charterers’ account
 
38.
Quiet Enjoyment
 
(a)
The Owners agree and undertake that during the period of the Charter they will not (and will procure that the Mortgagee will not) interfere in any way whatsoever with the quiet use, possession and enjoyment of the Vessel by the Charterers provided that (i) the Charterers perform their obligation under this Charter, (ii) there are no grounds entitling the Owners to terminate the chartering of the Vessel to the Charterers under this Charter and (iii) notice of the Owners intention to terminate the Charter has not been served on the Charterers.
 
(b)
The Owners shall ensure that on entering into any Financial Instrument, the prospective Mortgagee of the Vessel provides the Charterers with a Letter of Quiet Enjoyment in accordance with the terms of Clause 33 and Clause 38(a) above. In addition to the provisions of Clause 36, the Written Consent will confirm that to the extent that the Charterers have paid to the Owners or the Mortgagee the any loan outstanding balance or, if applicable the relevant purchase option price (as the same is set out in Clause 39), payable on such date, the Mortgagee will immediately release the Financial Instrument.
 
39.
Total Loss Proceeds
 
Upon the occurrence of a total loss of the type referred to in clause 13(d) of this Charter all insurance proceeds in respect of that loss shall be paid to the Owners who shall apply such proceeds, as follows;
 
ADDITIONAL CLAUSES TO M/V "CAPE ETERNITY " BAREBOAT CHARTER PARTY DATED 9TH May, 2023
(a)
Firstly, in payment of all the Owners’ and Charterers’ reasonable, properly incurred and documented costs incidental to the collection of the total loss proceeds;
 
(b)
Secondly, in retention by the Owners of all amounts of outstanding hire and interest due and owing to the Owners by the Charterers under this Charter at such time;
 
(c)
Thirdly, in retention by the Owners of an amount equal to the Outstanding BBC Principal Balance of the Owners at the relevant time of receipt of the total loss proceeds; and
 
(d)
Fourthly, any balance shall be promptly paid by the Owners to the Charterers.
 
For the purpose of this clause, Outstanding BBC Principal Balance means, at any relevant date, the amount set out in appendix 1 attached to this Charter during the period in which the date of receipt of the total loss proceeds occurs.
 
40.
Familiarization
 
In the event that the Charterers have not exercised their purchase option and Charter Period expires, the Owners shall have the right to place two representatives onboard the Vessel prior to redelivery once the Charterers have given their thirty (30) days preliminary notice.
 
The Owners shall have the right at their expense but at the Charterers time to arrange for an underwater inspection by a diver approved by the Classification Society no later than 2 weeks prior to the redelivery of the Vessel.
 
The inspection shall take place at a convenient port at the Charterers option and shall be carried out without interference to the Vessel’s normal operation.
 
Should such underwater inspection reveal major concern of Class items requiring immediate rectification in accordance with specific instructions from the Classification Society whereby such repairs cannot be made to the Vessel without immediate dry-docking, then the Vessel shall be dry-docked as soon as possible by the Charterers in order to repair such Class items to the Classification Societies satisfaction at the Charterers reasonable expense and time.
 
Any expenses related to other repairs carried out dry-docking by the Owners, and which are not the responsibility of the Charterers under the Charter, shall be for the Owners’ account.
 
41.
Extra Payments
 
In addition to above payments, the following costs are payable by the Charterers:
 
(a)
Any fees and expenses for flag registration of the Vessel in Charterers nominated flag state and deletion of the flag registration of the Vessel in Charterers nominated flag state. The flag of Panama will be maintained during the charter period. The Owners and the Charterers shall settle the flag annual tax for the year 2023 per Pro Rata Calculation.
 
(b)
Annual flag maintenance fees including tonnage tax of Panama are the Charterers account.
 
ADDITIONAL CLAUSES TO M/V "CAPE ETERNITY " BAREBOAT CHARTER PARTY DATED 9TH May, 2023

(c)
All other documentation and works required due to flag and ownership change, including change of DOC/SMC/ISSC/MLC/CLC, class certificates, change of country name on hull, change of radio and navigational aids registration, Annual Tonnage Tax of the flag country throughout the Charter period shall be for the Charterers’ time and cost including agent fees. In case of a change of Ownership after delivery under this Charter for Owners matter or reason, these costs to be for Owners’ account.
 
42.
Representations and Warranties
 
Each Party represents and warrants to the other Party that:
 
(a)
it is duly incorporated and validly existing and in good standing under the laws of its place of incorporation;
 
(b)
it has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it, to execute and to comply with this Charter;
 
(c)
all the consents referred to in paragraph (b) above remain in force and nothing has occurred which makes any of them liable to revocation;
 
(d)
this Charter constitutes legal, valid and binding obligations enforceable against it in accordance with its terms;
 
(e)
The execution by it of this Charter and its compliance with this Charter will not involve or lead to a contravention of:
 
 
(i)
any law or regulation;
 
 
(ii)
its constitutional documents; or
 
 
(iii)
any material contractual or other material obligation or material restriction which is binding on it or any of its assets.
 
43.
General
 
(a)
The terms and conditions of this Charter shall not be varied otherwise than by an instrument in writing executed by or on behalf of the Owners and the Charterers.
 
(b)
If, at any time, any provision of this Charter is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions under the law of that jurisdiction nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
 
(c)
This Charter 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 the Charter.
 
(d)
This Charter constitutes the entire agreement between the Parties and supersedes and extinguishes all previous agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter.
 
(e)
A person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Charter.
 
44.
Charterers’ representatives
 
After this Agreement has been signed by the Parties and the first part of the Deposit Downpayment has been lodged, the Charterers have the right to place two (2) representatives on board the Vessel at their sole risk and expense.
 
ADDITIONAL CLAUSES TO M/V "CAPE ETERNITY " BAREBOAT CHARTER PARTY DATED 9TH May, 2023
These representatives are on board for the purpose of familiarization and in the capacity of observers only, and they shall not interfere in any respect with the operation of the Vessel. The Charterers and the Charterers’ representatives shall sign the Owners’ P&I Club’s standard letter of Indemnity prior to their embarkation.
 
*** End ***
 

EX-4.53 16 ef20015287_ex4-53.htm EXHIBIT 4.53
Exhibit 4.53

DATED 5 APRIL 2023

United Management Corp.

-and-

Seanergy Management Corp.


COMMERCIAL
MANAGEMENT AGREEMENT


1
THIS AGREEMENT, dated 5 April 2023, is made between:
 
A) United Management Corp., a company incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, MH 96960 Majuro, Marshall Islands (hereinafter called the “Company”) for its own behalf and as agent for and on behalf of the Shipowning Entities;
 
-and-
 
B) Seanergy Management Corp., a company incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, MH 96960 Majuro, Marshall Islands (hereinafter called the “Commercial Manager”).
 
WHEREAS:
 
(A)      The Company has been appointed by its shipowning affiliated entities and its affiliated entities engaged with bareboat chartering or sub-bareboat chartering from time to time (the “Shipowning Entities” and together with the Company, the “Group” and any of them a “member of the Group”) as their agent to appoint and instruct on behalf of the Group agents for the provision of commercial management services and to monitor the performance of such agents.
 
(B)        The Company, on behalf of the Group, wishes to appoint the Commercial Manager as the agent of the Group to provide the Management Services for the vessels owned, bareboat chartered or sub-bareboat chartered by the Shipowning Entities from time to time (the “Vessels” and each a “Vessel”), on the terms and conditions set out herein.
 
WHEREBY IT IS AGREED as follows:-
 
1.
Definitions
 
1.1
In this Agreement, except where the context otherwise requires:-
 
“Effective Date” means 1 April 2023;
 
“Management Services” means the services provided by the Commercial Manager pursuant to Clause 6.
 
1.2.
Unless the context otherwise requires, words in the singular include the plural and vice versa.
 
1.3.
References to any document include the same as varied, supplemented or replaced from time to time.
 
2
1.4.
References to any enactment include re-enactments, amendments and extensions thereof.
 
1.5.
Clause headings are for convenience of reference only and are not to be taken into account in construction.
 
2
Appointment of Commercial Manager
 
In consideration of the premises and the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
 
The Company as principal and as agent for and on behalf of the Shipowning Entities hereby appoints as at the Effective Date the Commercial Manager as the agent of the Group for the provision of the Management Services.
 
3
Purpose, Authority and Basis of Agreement
 
3.1
Subject to the terms and conditions provided herein during the period of this Agreement, the Commercial Manager shall carry out the Management Services in respect of the Vessels as agent for and on behalf of the Shipowning Entities. The Commercial Manager (unless otherwise provided for herein) shall have authority to take such actions as it may from time to time in its discretion consider necessary to enable it to perform its obligations pursuant hereunder in accordance with sound ship management practices, provided the Company has given its written approval.
 
3.2
The Company hereby ratifies, confirms and undertakes at all times to ratify and to confirm all lawful conduct of the Commercial Manager, its employees, agents and subcontractors in connection with the provision of the Management Services pursuant to this Agreement.
 
3.3
The Company shall procure forthwith that each Shipowning Entity (including such entities as may become members of the Group from time to time) shall evidence its agreement to be bound by the terms and conditions of this Agreement by executing a deed of accession to this Agreement in the form of Schedule 1.
 
4
Obligations of Commercial Manager
 
The Commercial Manager undertakes in so far as applicable to its respective duties pursuant to this Agreement to use its best endeavours to provide the Management Services and to protect and promote the interests of the Company and of the Shipowning Entities in all matters relating to the efficient commercial management of the Vessels provided however that without prejudice to the generality of the foregoing, the Commercial Manager shall not be:
 

 (a)
required to exercise its powers pursuant hereto as to give preference in any respect to Shipowning Entities, it being understood and agreed that the Commercial Manager shall so far as is practicable ensure a fair distribution of available manpower, supplies and services to all ships owned or managed by it;
 
3

 (b)
restricted from carrying on or (whether as manager or otherwise) being concerned or interested in carrying on any business which is or may be similar to or competitive with the business presently or at any time carried on by the Shipowning Entity; and
 

 (c)
answerable for the consequences of any decision or exercise of judgment taken or made in the exercise of its powers and taken or made honestly and in good faith.
 
5
Obligations of the Company
 
The Company shall pay or procure that the relevant member of the Group pays any moneys due to the Commercial Manager pursuant to this Agreement following receipt of a debit note/invoice issued by the Commercial Manager to the relevant member of the Group.
 
6
Management Services
 
6.1
As at the Effective Date, the Commercial Manager shall provide and/or procure the provision of the services specified hereunder in the name of the Shipowning Entities or otherwise on its behalf and do all things which may be expedient or necessary for the provision of said services or otherwise in relation to the commercial operation of the Vessels, such services as stated below:
 
 
(a)
Commercial Management
 

 (i)
Postfixture
 

 (ii)
Commercial operation
 
Commercial operation of the Vessels, which includes, but is not limited to, the following functions:
 

 (aa)
Issuing voyage instructions, monitoring of voyage performance, speed and use of weather routing services, if deemed necessary by the Commercial Manager;
 

 (bb)
arranging the scheduling of the Vessel according to the terms of the Vessel’s employment and issuing or causing to be issued documents, which may be required under the charter contracts on behalf of and in the name of the Shipowning Entities or charterers, following the Company’s and/or the Shipowning Entities’ information and approval;

4

 (cc)
appointing stevedores, agents and negotiating tug-boat service contracts, provided such appointments are on competitive terms and prices;
 

 (dd)
Arranging surveys associated with the commercial operation of the Vessels; and
 

 (ee)
Estimation of bunker quantities and types to be supplied. Buying and supplying bunkers to the Vessel on the Shipowning Entities’ behalf and account in compliance with requirements of safe navigation and delivery provisions of voyage charters as required.

 
(iii)
Sale, purchase and bareboat chartering

Identifying potential opportunities and supervisinjg the sale, purchase or bareboat charter in of the Vessels, including but not limited to the negotiation and the performance of the relevant sale, purchase and bareboat chartering agreements.


(iv)
Accounting Services
 

 (aa)
calculating and arranging for the collection of and receiving for and on behalf of the Shipowning Entity all hire, revenue or other monies of whatsoever kind to which the Shipowning Entity may from time to time be entitled arising out of the employment of or otherwise in connection with the Vessel and to this end co-ordinating the invoicing procedures on behalf of the Shipowning Entity of all aforesaid amounts due to the Shipowning Entity;
 

 (bb)
arranging for the proper payment to the Company, or the Shipowning Entity or its nominee of all such monies;
 

 (cc)
establishing and operating an accounting system which meets the requirements of the Company and providing regular accounting services, supplying regular reports and records in this regard; and
 

 (dd)
maintaining the records of all costs and expenditure incurred as well as data necessary or proper for the settlement of accounts between the parties.
 
6.2
The Commercial Manager shall not be entitled to appoint any third party to provide any of the Management Services provided by it without the prior written consent of the Company, provided however that where such consent is obtained and appointment made, in each such case the Commercial Manager shall continue to be responsible for the due performance of the Management Services concerned.
 
6.3
The Commercial Manager shall have the express authority to negotiate, conclude and execute all forms of documentation and agreements including contracts and acknowledgements on behalf of the Company in so far as is necessary for the provision by the Commercial Manager of its Management Services, provided that all such documentation will be approved in advance in writing by the Company.
 
5
7
Fees
 
7.1
For the services performed by the Commercial Manager pursuant to this Agreement, the Company shall procure that the relevant member of the Group pays, to the Commercial Manager: (i) a commission fee equal to zero point seventy five percent (0.75%) calculated on the collected gross hire/ freight/ demurrage payable when the relevant hire/ freight/ demurrage are collected (except for any Vessels that are chartered - out to Seanergy), and (ii) a fee equal to one per cent (1%) of the contract price of any Vessel bought, sold, bareboat chartered by the Commercial Manager on the Company's (and the respective Shipowning Entity's) behalf, except for any Vessels bought, sold or bareboat chartered from or to Seanergy, or in respect of any Vessel sale relating to a sale leaseback transaction (collectively, the "Fee").
 
7.2.
The Fee hereunder shall be paid to the Commercial Manager to an account of the Commercial Manager advised in writing to the Company.
 
8
Accounts and Management of Funds
 
8.1
In so far as applicable to the Commercial Managers’ Services, the Commercial Manager shall operate accounting systems satisfactory to the Shipowning Entities and provide regular services, reports and records in this regard and maintain records of all expenditure and cost together with information necessary and appropriate for the settlement of accounts between the parties hereto.
 
8.2
Notwithstanding any contrary provisions herein the Commercial Manager shall in no circumstances whatsoever be required to use or commit its own funds to finance the provision of the Management Services.
 
8.3
The Commercial Manager shall at all times maintain and keep true and correct accounts and shall make the same available for inspection and auditing by the Company at such times as may be mutually agreed. On the termination, for whatever reasons, of this Agreement, the Commercial Manager shall release to the Shipowning Entities, if so requested, the originals where possible, or otherwise certified copies, of all such accounts and all documents specifically relating to the Vessels and their commercial operation.
 
9
Management Expenses
 
9.1
The Commercial Manager shall, at no extra cost to the Company, provide its office accommodation and office staff. The Company will reimburse the Commercial Manager for all reasonable running and/or out of pocket expenses, including but not limited to, telephone, fax, stationary and printing expenses. Any required travelling expenses in relation to this Agreement and the Management Services will be pre-approved by the Company and the relevant expenses will be reimbursed to the Commercial Manager.
 
9.2
All moneys collected by the Commercial Manager pursuant to this Agreement (other than moneys payable by the Company to the Commercial Manager) and any interest thereon shall be held to the credit of each applicable Shipowning Entity in a separate bank account.
 
6
10
Termination
 
This Agreement may be terminated by either party giving to the other one (1) month prior notice in writing or by mutual written agreement between the parties.
 
10.1
Company’s default
 
The Commercial Manager shall be entitled to terminate its appointment under this Agreement with immediate effect by notice in writing if any monies payable by   the Company under this Agreement shall not have been received by the Commercial Manager within ten (10) running days of receipt by the Company of the Manager’s written request.
 
10.2
Commercial Managers’ default
 
If the Commercial Manager fails to meet its obligations under clauses 5 and 8 of this Agreement for any reason within its control, the Company may give notice to the Commercial Manager of the default, requesting also to remedy it as soon as practically possible. In the event that the Commercial Manager fails to remedy said default within a reasonable time to the satisfaction of the Company, the Company shall be entitled to terminate the Agreement with immediate effect by notice in writing.
 
10.3
Extraordinary Termination
 
This Agreement shall be deemed to be terminated in the case of the sale of the Vessel or if the Vessel becomes a total loss or is declared as a constructive or compromised or arranged total loss or is requisitioned.
 
10.4
For the purpose of sub-clause 10.3. hereof:
 

 (a)
the date upon which the Vessel is to be treated as having been sold or otherwise disposed of shall be the date on which the Shipowning Entity cease to be registered as owner of the Vessel;
 

 (b)
the Vessel shall only be deemed lost where she has become an actual total loss or agreement has been reached with her underwriters in respect of her constructive, compromised or arranged total loss or if such agreement with her underwriters is not reached it is nevertheless adjudged by a competent tribunal that a constructive total loss of the Vessel has been occurred.
 
10.5
Either party hereto may by notice to the other party terminate forthwith the appointment if an order is made or resolution is passed for the winding up, dissolution, liquidation or bankruptcy of such party (otherwise than for the purpose of reconstruction or amalgamation) or if any party ceases to carry on business or makes any special arrangement or composition with its creditors.
 
7
10.6
The termination of this Agreement shall be without prejudice to all rights accrued due between the parties prior to the date of termination.
 
11
Insurances
 
The Company shall procure that, throughout the period of this Agreement,
 

 (a)
at no expense to the Commercial Manager, the Vessels are insured for not less than their sound market value or entered for their full gross tonnage, as the case may be for:
 

 (i)
usual hull and machinery marine risks (including crew negligence) and excess liabilities;
 

 (ii)
protection and indemnity risks (including pollution risks and crew insurances); and
 

 (iii)
war risks (including protection and indemnity and crew risks),
 
in accordance with the best practice of prudent owners of ships of a similar type to the Vessels, with first class insurance companies, underwriters or associations (the “Shipowning Entities’ Insurances”);
 

 (b)
all premiums and calls on the Shipowning Entities’ Insurances are paid promptly by their due date;
 

 (c)
the Shipowning Entities’ Insurances name the Commercial Manager and, subject to underwriters’ agreement, any third party designated by the Commercial Manager as a joint assured, with full cover, with the Company procuring on behalf of the relevant Shipowning Entity that the cover, if reasonably obtainable, shall be obtained on such terms that neither the Commercial Manager nor any such third party shall be under any liability in respect of premiums or calls arising in connection with the Shipowning Entities’ Insurances; and
 

 (d)
written evidence is provided, to the reasonable satisfaction of the Commercial Manager, of compliance with the obligations under Clause 4 within a reasonable time from the commencement of this Agreement, and of each renewal date and, if specifically requested, of each payment date of the Shipowning Entities’ Insurances.
 
12
Force Majeure
 
Neither the Company nor the Commercial Manager shall be under any liability for any failure to perform or delay in the performance of any of their obligations under this Agreement by reason of any cause whatsoever beyond their reasonable control.
 
8
13
Indemnities
 
13.1
Subject to any liability of the Commercial Manager pursuant to Clause 13.2 hereto the members of the Group hereby ratify and confirm, and undertake at all times to ratify and confirm, whatever may be done or caused to be done by the Commercial Manager in the course of or in the provision of the Management Services and the members of the Group hereby undertake to keep the Commercial Manager and its respective employees and agents indemnified and to hold them harmless against all actions, proceedings, claims, demands or liabilities whatsoever or howsoever arising which may be brought against them or any one of them or incurred or suffered by them or any one of them arising out of or in connection with the performance of this Agreement, and against and in respect of all loss, damages, costs and expenses (including legal costs and expenses on a full indemnity basis) which the Commercial Manager may suffer or incur (either directly or indirectly) in defending or settling the same.
 
13.2
The Commercial Manager shall be under no liability whatsoever to the members of the Group for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect, (including but not limited to loss of profit arising out of or in connection with detention of or delay to the Vessel) and howsoever arising in the course of the performance of the Management Services hereunder unless same is proved to have resulted solely from the negligence, gross negligence or willful default of the Commercial Manager or its employees or agents or subcontractors employed by it in connection with the Vessel, in which case (except where loss, damage, delay or expense has resulted from the Commercial Managers’ personal act or omission committed with the intent to cause same or recklessly and with knowledge that such loss, damage delay or expense would probably result) the Commercial Manager’s liability (any such liability arising in accordance herewith always being on an individual basis in relation to each Manager) for all incidents or series of incidents arising in any calendar year shall never exceed a total of 10 times the actual annual management fees paid in that year.
 
13.3
No employee, agent or subcontractor of the Commercial Manager shall in any circumstances whatsoever be liable to the members of the Group for any loss, damage or delay arising or resulting directly or indirectly from any act, neglect or default on his part while acting in the course or in connection with his employment and without prejudice to the generality of the forgoing provisions of this Clause 13, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability, defence and immunity of whatsoever nature applicable to and enjoyed by the Commercial Manager or to which the said Commercial Manager is entitled hereunder shall also be available and shall extend to protect every such employee, agent or subcontractor of the Commercial Manager acting as aforesaid and for the purpose of all the foregoing provisions of this Clause 13 the Commercial Manager is or shall be deemed to be acting as agents or trustee on behalf of and for the benefit of all persons who are or might be their servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this Agreement.
 
9
14
Confidentiality and Commercial Manager’s Documents
 
14.1
Save for the purpose of enforcing or carrying out as may be necessary the rights or obligations of the Commercial Manager hereunder, the Commercial Manager agrees to maintain and to use its best endeavours to procure that its officers and employees maintain confidence and secrecy in respect of all information relating to the Company’s business received by the Commercial Manager directly or indirectly pursuant to this Agreement.
 
14.2
As between the Company, the members of the Group and the Commercial Manager, the Company hereby agrees and acknowledges that all title and property in and to the management manuals of the Commercial Manager and other written material concerning management functions and activities is vested in the Commercial Manager and the Company agrees not to disclose the same to any third party and, on termination of this Agreement, to return all such manuals and other material to the Commercial Manager.
 
15
Notices and Other Matters
 
15.1
Every notice, request, demand or other communication under this Agreement shall:
 

 (a)
be in writing, delivered personally or by registered or recorded first-class prepaid letter (airmail if available) facsimile or telex;
 

 (b)
be deemed to have been received, subject as otherwise provided in this Agreement, in the case of a telex at the time of dispatch with confirmed answerback of the addressee appearing at the beginning and end of the communication (provided that if the date of dispatch is not a business day in the country of the addressee it shall be deemed to have been received at the opening of business on the next such business day), in the case of a facsimile at the time of dispatch evidenced by a timed and dated transmittal confirmation (provided that if the date of dispatch is not a business day in the country of the addressee it shall be deemed to have been received at the opening of business on the next business day), and in the case of a letter when delivered personally or five (5) days after it has been put into the post; and
 

 (c)
be sent to the respective addresses hereto or to such other address, facsimile or telex number as is notified by the parties hereto to the other parties to this Agreement:
 
(i) in respect of the Company to:

10
UNITED MANAGEMENT CORP.
c/o 154 Vouliagmenis Avenue,
16674 Glyfada, Greece
Emails: ops@seanergy.gr and legal@usea.gr
Tel: +30 213 0181507
 
(ii) in respect of the Commercial Manager to:
 
SEANERGY MANAGEMENT CORP.
154 Vouliagmenis Avenue,
16674 Glyfada, Greece
Email: legal@seanergy.gr
Tel: +30 213 0181507
 
16
Law and Arbitration
 
16.1
This Agreement shall be governed by English Law and any dispute arising out of or in connection herewith shall be referred to arbitration in London.
 
16.2
Arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) rules current at the time of commencement of the arbitration.
 
16.3
Any referral made pursuant to this Clause 16 shall be to three (3) Arbitrators on the following basis: if a dispute arises between the parties then each shall appoint an Arbitrator and the two Arbitrators so appointed shall appoint a third.
 
16.4
Upon receipt of notice of appointment of an Arbitrator by the first notifying party (who shall therein state that it shall appoint its own arbitrator as sole arbitrator if the other party does not appoint an Arbitrator in accordance herewith), the second party shall appoint its Arbitrator and give notice of such appointment within fourteen (14) days, failing which the prior notifying party shall be entitled either to appoint its Arbitrator as Sole Arbitrator or appoint an Arbitrator on behalf of the second party who shall accept such appointment as if it had been made by itself.
 
16.5
If a party does not appoint its own Arbitrator and give due notice in accordance with Clause 16.4 the party referring the dispute to arbitration may without requirement for further notice to such other party failing to so appoint make appointment in accordance with Clause 16.4 and shall advise the other party accordingly and the award of a Sole Arbitrator or panel appointed in accordance with Clause 16.4 shall be binding on all parties as if appointment had been by agreement.
 
16.6
Nothing in this Clause 16 shall prevent the parties agreeing in writing to vary these provisions to provide for appointment of a Sole Arbitrator or to consolidate arbitration proceedings hereunder where thought appropriate or desirable.
 
16.7
In cases where neither the claim nor any counterclaim exceeds the sum of UK £50,000 (or such other sum as the parties may agree) (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.
 
11
16.8
Any such Arbitration shall be in accordance with and subject to the Arbitration Act 1996 and any statutory amendment or modification thereto.

17
Miscellaneous
 
17.1
Subject to Clause 17.2 this Commercial Management Agreement contains the entire agreement and understanding between the parties and supersedes all prior negotiations, representations, warranties and other documents or matter related to any of the subject matter of this Commercial Management Agreement.
 
17.2
This Agreement may be amended by mutual agreement of both parties hereto provided that any such amendment is evidenced by written amendment duly executed by both parties and following which any such amendment shall be considered part of, appended to and read together with this Agreement.
 
17.3
All details of or pertaining to this Agreement shall be kept strictly private and confidential.
 
IN WITNESS WHEREOF the Company and the Commercial Manager have caused this Agreement to be duly executed as a deed the day and year first before written.
 
EXECUTED as a DEED
  
By Stamatios Tsantanis
/s/ Stamatios Tsantanis
the duly authorised attorney of
  
UNITED MANAGEMENT CORP.
  
of the Marshall Islands
  

EXECUTED as a DEED
  
By Stavros Gyftakis
/s/ Stavros Gyftakis
the duly authorised attorney of
  
SEANERGY MANAGEMENT CORP.
  
of the Marshall Islands
  

12
Schedule 1

Deed of Accession
[          ] 20 [  ]

From:           [           ]

To:           [           ]

Dear Sirs,

Re:          
 Commercial Management Agreement of [          ] and made between (1) United Management Corp. (the “Company”) and Seanergy Management Corp. (the “Commercial Manager”)

We refer to the Commercial Management Agreement (the “Agreement”). We are a Shipowning Entity as defined in the Agreement and are to become [owners][disponent owners] of the motor vessel “[]” (the “Vessel”).

We hereby confirm that:

(a)
the Company has entered into the Agreement as our agent, for and on our behalf; and

(b)
we are bound to observe the terms and conditions of the Agreement as if we were a named signatory therein.

We confirm that we are the Company’s principal in respect of the Agreement as it relates to the Vessel and ourselves.  We hereby confirm that the Company has full authority on our behalf (i) to execute the Agreement and any agreement or addendum supplemental thereto, (ii) to give to the Commercial Manager any instructions required of us under the Agreement, (iii) to exercise any of our rights under the Agreement and (iv) to act in accordance with the terms contained in the Agreement, both on our behalf and on all matters relating to us, which are the subject of the Agreement and as they relate to the Vessel.  We hereby confirm that we will be bound by any actions taken by the Company under the Agreement on our behalf and we hereby confirm and ratify any such actions taken by the Company.

The terms and provisions of this letter shall be governed by and construed in accordance with English law, and this letter is being executed as a deed on the date first above written.

Yours faithfully,
 

 
For and on behalf of
[                                          ]


13
EX-8.1 17 ef20015287_ex8-1.htm EXHIBIT 8.1
Exhibit 8.1

List of Subsidiaries of Seanergy Maritime Holdings Corp.
 
 
Subsidiary
  
Jurisdiction of Incorporation
 
Seanergy Management Corp.
  
Republic of the Marshall Islands
 
Seanergy Shipmanagement Corp.
  
Republic of the Marshall Islands
 
Honor Shipping Co.
  
Republic of the Marshall Islands
 
Sea Genius Shipping Co.
  
Republic of the Marshall Islands
 
Traders Shipping Co.
  
Republic of the Marshall Islands
 
Gladiator Shipping Co.
  
Republic of the Marshall Islands
 
Premier Marine Co.
  
Republic of the Marshall Islands
 
Emperor Holding Ltd.
  
Republic of the Marshall Islands
 
Champion Marine Co.
  
Republic of the Marshall Islands
 
Fellow Shipping Co.
  
Republic of the Marshall Islands
 
Patriot Shipping Co.
  
Republic of the Marshall Islands
 
Flag Marine Co.
  
Republic of the Marshall Islands
 
World Shipping Co.
  
Republic of the Marshall Islands
 
Partner Marine Co.
  
Republic of the Marshall Islands
 
Duke Shipping Co.
  
Republic of the Marshall Islands
 
Atsea Ventures Corp.
  
Republic of the Marshall Islands
 
Squire Ocean Navigation Co.
  
Republic of Liberia
 
Lord Ocean Navigation Co.
  
Republic of Liberia
 
Knight Ocean Navigation Co.
  
Republic of Liberia
 
Good Ocean Navigation Co.
  
Republic of Liberia
 
Hellas Ocean Navigation Co.
  
Republic of Liberia
 
Friend Ocean Navigation Co.
  
Republic of Liberia
 
Paros Ocean Navigation Co.
  
Republic of Liberia
 
Titan Ocean Navigation Co.
  
Republic of Liberia
 
Icon Ocean Navigation Co.
  
Republic of Liberia




 
Partner Shipping Co. Limited
  
Malta
 
Pembroke Chartering Services Limited
  
Malta
 
Martinique International Corp.
  
British Virgin Islands
 
Harbour Business International Corp.
  
British Virgin Islands


EX-11.1 18 ef20015287_ex11-1.htm EXHIBIT 11.1
Exhibit 11.1

Statement of Company Policy – Trading in the Company’s Securities

TO:
All Employees, Officers and Directors of Seanergy Maritime Holdings Corp. (the “Company”) and its Affiliates
FROM:
Stamatios Tsantanis, Chairman and Chief Executive Officer
RE:
Statement of Company Policy - Securities Trading By Company and Affiliate Personnel
 
The Need for a Policy Statement
 
The purchase or sale of securities while aware of material nonpublic information, or the disclosure of material nonpublic information to others who then trade in securities, is prohibited by the federal securities laws.  Insider trading violations are pursued vigorously by the United States government and are punished severely.  While the regulatory authorities concentrate their efforts on the individuals who trade, or who tip inside information to others who trade, the federal securities laws also impose potential liability on companies and other “controlling persons” if they fail to take reasonable steps to prevent insider trading by company personnel.
 
The Company’s Board of Directors has adopted this Policy Statement both to satisfy the Company’s obligation to prevent insider trading and to help Company personnel avoid the severe consequences associated with violations of the insider trading laws.  The Policy Statement also is intended to prevent even the appearance of improper conduct on the part of anyone employed by or associated with the Company.
 
The Consequences
 
The consequences of an insider trading violation can be severe:
 
Company-Imposed Sanctions. An employee’s failure to comply with the Company’s insider trading policy may subject the employee to Company-imposed sanctions, including dismissal for cause, whether or not the employee’s failure to comply results in a violation of law. The Company requires all Company personnel and their relations to comply with the law and with the Company insider trading policy. Needless to say, a violation of law, or even an investigation by the Securities and Exchange Commission (“SEC”) that does not result in prosecution, can tarnish one’s reputation and irreparably damage a career.
 
Page 1 of 4
Penalties for insider trading are severe for every individual involved regardless of whether they personally benefited from the violation. Penalties may include:
 

 •
Jail sentences;

•
Civil injunctions;

•
Civil monetary damages;

•
Criminal fines;

•
Fines for the Company.
 
Any individual who is aware on material non-public information from their relationship with the Company is prohibited from trading on or tipping that information to another person to trade on. An employee who tips information to a person who then trades is subject to the same penalties as the tippee, even if the employee did not trade and did not profit from the tippee’s trading.
 
Statement of Policy
 
It is the policy of the Company that no director, officer or other employee of the Company or any of the Company’s affiliates (a “Covered Person”) who is aware of material nonpublic information relating to the Company may, directly or through family members or other persons or entities, (a) buy or sell securities of the Company (other than pursuant to a pre-approved trading plan that complies with SEC Rule 10b5-1), or engage in any other action to take personal advantage of that information, or (b) pass that information on to others outside the Company, including family and friends.  In addition, it is the policy of the Company that no Covered Person who, in the course of working for or on behalf of the Company, learns of material nonpublic information about a company with which the Company does business, including a customer or supplier of the Company, may trade in that company’s securities until the information becomes public or is no longer material.
 
Transactions that may be necessary or justifiable for independent reasons (such as the need to raise money for an emergency expenditure) are not exempt from the policy.  The securities laws do not recognize such mitigating circumstances, and, in any event, even the appearance of an improper transaction must be avoided to preserve the Company’s reputation for adhering to the highest standards of conduct.
 
Disclosure of Information to Others. The Company has established procedures for releasing material information about the Company in a manner that is designed to achieve broad public dissemination of the information immediately upon its release.  You may not, therefore, disclose information to anyone outside the Company, including family members and friends, other than in accordance with those procedures.  You also may not discuss the Company or its business in an internet “chat room” or similar internet-based forum.
 
Page 2 of 4
Material Information. Material information is any information that a reasonable investor would consider important in making a decision to buy, hold, or sell securities.  Any information that could be expected to affect the Company’s stock price, whether it is positive or negative, should be considered material.  Some examples of information that ordinarily would be regarded as material are:


 •
Projections of future earnings or losses, or other earnings guidance;

•
Earnings that are inconsistent with the consensus expectations of the investment community;

•
A pending or proposed merger, acquisition or tender offer;

•
A pending or proposed acquisition or disposition of a significant asset or vessel;

•
A change in dividend policy, the declaration of a stock split, or an offering of additional securities;

•
A change in management;

•
Development of a significant new product or process;

•
Impending bankruptcy or the existence of severe liquidity problems;

•
The gain or loss of a significant charterer.
 
“20-20” Hindsight. Remember, anyone scrutinizing your transactions will be doing so after the fact, with the benefit of hindsight.  As a practical matter, before engaging in any transaction, you should carefully consider how enforcement authorities and others might view the transaction in hindsight.
 
When Information is “Public”. If you are aware of material nonpublic information, you may not trade until the information has been disclosed broadly to the marketplace (such as by press release or a SEC filing) and the investing public has had time to absorb the information fully. To avoid the appearance of impropriety, as a general rule, information should not be considered fully absorbed by the marketplace until the second trading day after the information is released. If, for example, the Company were to make an announcement on a Monday, you should not trade in the Company’s securities until Wednesday.  If an announcement were made on a Friday, Tuesday generally would be the first eligible trading day.
 
Transactions by Family Members. The insider trading policy also applies to your family members who reside with you, anyone else who lives in your household, and any family members who do not live in your household but whose transactions in securities are directed by you or are subject to your influence or control (such as parents or children who consult with you before they trade in securities).  You are responsible for the transactions of these other persons and therefore should make them aware of the need to confer with you before they trade in the Company’s securities.
 
Transactions under Future Company Plans
 
Stock Option Exercises. The Company’s insider trading policy does not apply to the exercise of an employee stock option.  The policy does apply, however, to any sale of stock as part of a broker-assisted cashless exercise of an option, or any other market sale for the purpose of generating the cash needed to pay the exercise price of an option.
 
Page 3 of 4
Trading Windows and Blackout Periods
 
Trading Windows. A Covered Person may trade in Company securities only during the period beginning at the opening of trading on the second full trading day following the Company’s widespread public release of quarterly or year-end operating results, and ending at the close of trading on the 30th day following the end of the next quarter (or, if such 30th day is not a trading day, on the next trading day), as long as the Covered Person is not in possession of material nonpublic information or subject to any special trade blackout.
 
No Trading During Trading Windows While in the Possession of Material Nonpublic Information. No Covered Person possessing material nonpublic information concerning the Company may trade in Company securities even during applicable trading windows. Persons possessing such information may trade during a trading window only after the opening of trading on the second full trading day following the Company’s widespread public release of the information.
 
No Trading During Blackout Periods. No Covered Person may trade in Company securities outside of the applicable trading windows or during any special blackout periods that the Company’s CEO may designate.  In addition, no Covered Person may disclose to any outside third party that a special blackout period has been designated.
 
Pre-Clearance by CEO. All transactions in Company securities by a Covered Person must be cleared in advance by the Company’s CEO.
 
Exception for Transfers Pursuant to Rule 10b5-1
 
Blackout periods shall not prohibit transfers of Company securities made pursuant to a written contract, letter of instruction or plan that (a) complies with the requirements of SEC Rule 10b5-1 (a “Rule 10b5-1 Plan”), and (b) has been approved by the Company’s CEO in advance of the first trade thereunder. In order to receive such approval from the Company’s CEO a Covered Person must certify in writing that (i) such Covered Person was not in possession of material nonpublic information about the Company at the time the Rule 10b5-1 Plan was adopted, (ii) that all trades made under the Rule 10b5-1 Plan will comply with Rule 10b5-1 Plan and applicable securities laws, and (iii) the Rule 10b5-1 Plan complies with the requirements of Rule 10b5-1.  No such approval by the CEO shall be considered the CEO’s or the Company’s determination that the Rule 10b5-1 Plan satisfies the requirements of Rule 10b5-1. It shall be the sole responsibility of the person establishing the Rule 10b5-1 Plan to ensure that such plan complies with the requirements of Rule 10b5-1.

Miscellaneous

Post-Termination Transactions. This Policy Statement will continue to apply to your transactions in Company securities even after you have terminated your employment with or position as a director of the Company or its affiliates.  If you are in possession of material nonpublic information when your employment or directorship terminates, you may not trade in Company securities until that information has become public or is no longer material.


Page 4 of 4
EX-12.1 19 ef20015287_ex12-1.htm EXHIBIT 12.1
Exhibit 12.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

I, Stamatios Tsantanis, certify that:

1.          I have reviewed this annual report on Form 20-F of Seanergy Maritime Holdings Corp. (the “Company”);

2.          Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.          Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4.          The Company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)          Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)          Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5.          The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

(a)          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: April 3, 2024

/s/ Stamatios Tsantanis
Stamatios Tsantanis
Chairman, Chief Executive Officer and Director (Principal Executive Officer)


EX-12.2 20 ef20015287_ex12-2.htm EXHIBIT 12.2
Exhibit 12.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

I, Stavros Gyftakis, certify that:

1.          I have reviewed this annual report on Form 20-F of Seanergy Maritime Holdings Corp. (the “Company”);

2.          Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.          Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4.          The Company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)          Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)          Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5.          The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

(a)          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: April 3, 2024

/s/ Stavros Gyftakis
Stavros Gyftakis
Chief Financial Officer and Director (Principal Financial Officer)


EX-13.1 21 ef20015287_ex13-1.htm EXHIBIT 13.1
Exhibit 13.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350
 
In connection with this annual report of Seanergy Maritime Holdings Corp. (the “Company”) on Form 20-F for the year ended December 31, 2023 as filed with the Securities and Exchange Commission (the “SEC”) on or about the date hereof (the “Report”), I, Stamatios Tsantanis, Chairman, Chief Executive Officer and Director of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
     (1)  the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
     (2)  the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.
 
Date: April 3, 2024

/s/ Stamatios Tsantanis
Stamatios Tsantanis
Chairman, Chief Executive Officer and Director (Principal Executive Officer)


EX-13.2 22 ef20015287_ex13-2.htm EXHIBIT 13.2
Exhibit 13.2

PRINCIPAL FINANCIAL OFFICER CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350
 
In connection with this annual report of Seanergy Maritime Holdings Corp. (the “Company”) on Form 20-F for the year ended December 31, 2023 as filed with the Securities and Exchange Commission (the “SEC”) on or about the date hereof (the “Report”), I, Stavros Gyftakis, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
 
     (1)  the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
     (2)  the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.
 
Date: April 3, 2024

/s/ Stavros Gyftakis
Stavros Gyftakis
Chief Financial Officer and Director (Principal Financial Officer)


EX-15.1 23 ef20015287_ex15-1.htm EXHIBIT 15.1
Exhibit 15.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in Registration Statement Nos. 333-166697, 333-169813, 333-237500, 333-238136, 333-253332 and 333-257693 on Form F-3 of our reports dated April 3, 2024, relating to the consolidated financial statements of Seanergy Maritime Holdings Corp. and the effectiveness of Seanergy Maritime Holdings Corp.'s internal control over financial reporting appearing in this Annual Report on Form 20-F for the year ended December 31, 2023.

/s/ Deloitte Certified Public Accountants S.A.

Athens, Greece
April 3, 2024



EX-15.2 24 ef20015287_ex15-2.htm EXHIBIT 15.2
Exhibit 15.2

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

(1)
Registration Statement (Form F-3 No. 333-166697) of Seanergy Maritime Holdings Corp.,

(2)
Registration Statement (Form F-3 No. 333-169813) of Seanergy Maritime Holdings Corp.,

(3)
Registration Statement (Form F-3 No. 333-237500) of Seanergy Maritime Holdings Corp.,

(4)
Registration Statement (Form F-3 No. 333-238136) of Seanergy Maritime Holdings Corp.,

(5)
Registration Statement (Form F-3 No. 333-253332) of Seanergy Maritime Holdings Corp., and

(6)
Registration Statement (Form F-3 No. 333-257693) of Seanergy Maritime Holdings Corp.;

of our report dated March 31, 2022 (except for the retroactive effect of the reverse stock split effected on February 16, 2023, described in Note 1 to the consolidated financial statements, as to which the date is March 31, 2023), with respect to the consolidated financial statements of Seanergy Maritime Holdings Corp. included in this Annual Report (Form 20-F) for the year ended December 31, 2023.

/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.

Athens, Greece
April 3, 2024


EX-97.1 25 ef20015287_ex97-1.htm EXHIBIT 97.1
Exhibit 97.1

SEANERGY MARITIME HOLDINGS CORP.
 
Policy for the Recovery of Erroneously Awarded Incentive Compensation
 
Adopted Date: November 30, 2023
 
1.
Introduction
 
The Board of Directors (the “Board”) of Seanergy Maritime Holdings Corp. (the “Company”) has adopted this policy (the “Policy”), which provides for recoupment, otherwise referred to as “clawback,” of certain Erroneously Awarded Incentive Compensation from Covered Executives in the event of an Accounting Restatement resulting from material noncompliance with financial reporting requirements under the federal securities laws.
 
This Policy is designed to comply with Section 10D, as implemented by Rule 10D-1, of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and is made in accordance with the applicable listing rules (the “Nasdaq Rules”) of the Nasdaq Stock Market (“Nasdaq”).
 
2.
Covered Executives
 
This Policy applies to each individual who is (i) a current or former executive officer, as determined by the Committee in accordance with Section 10D and Rule 10D-1 of the Exchange Act and the Nasdaq Rules; (ii) a current or former employee who is classified by the Committee as an executive officer of the Company, which includes without limitation any of the Company’s president, principal financial officer, principal accounting officer (or if there is no such accounting officer, the controller), vice president in charge of a principal business unit, division or function (such as sales, administration or finance), and any other person who performs policy-making functions for the Company (including executive officers of a parent or subsidiary if they perform policy-making functions for the Company); and (iii) an employee who may from time to time be deemed subject to this Policy by the Committee (“Covered Executives”). For the avoidance of doubt, the identification of an executive officer for purposes of this Policy shall include each executive officer who is or was identified pursuant to Item 401(b) of Regulation S-K or Item 6.A of Form 20-F, as applicable.
 
This Policy shall be binding and enforceable against all Covered Executives, as described herein, and, to the extent required by applicable law or guidance from the United States Securities and Exchange Commission (the “SEC”) or Nasdaq, Covered Executives’ beneficiaries, heirs, executors, administrators or other legal representatives.
 
3.
Recovery of Erroneously Awarded Incentive Compensation
 
In the event the Company is required to prepare an Accounting Restatement of its financial statements, the Compensation Committee (if composed entirely of independent directors, or in the absence of such a committee, a majority of independent directors serving on the Board) (the “Committee”) will determine the amount of Erroneously Awarded Incentive Compensation (defined below) and the Company will promptly provide each Covered Executive who received Erroneously Awarded Incentive Compensation with a written notice containing the amount of Erroneously Awarded Incentive Compensation received by such Covered Executive and shall require the forfeiture, repayment, or return, as applicable, of not less than the full amount of any Erroneously Awarded Incentive Compensation received or deemed received by any Covered Executive, except to the extent determined impracticable in Section 7 below.
 

(a)          Cash Awards. With respect to cash awards, the Erroneously Awarded Incentive Compensation is the difference between the amount of the cash award (whether payable as a lump sum or over time) that was received and the amount that should have been received applying the restated Financial Reporting Measure.
 
(b)          Cash Awards Paid from Bonus Pools. With respect to cash awards paid from bonus pools, the Erroneously Awarded Incentive Compensation is the pro rata portion of any deficiency that results from the aggregate bonus pool that is reduced based on applying the restated Financial Reporting Measure.
 
(c)          Equity Awards. With respect to equity awards, if the shares, options or Stock Appreciation Rights (hereinafter, SARs) are still held at the time of recovery, the Erroneously Awarded Incentive Compensation is the number of such securities received in excess of the number that should been received applying the restated Financial Reporting Measure (or the value in excess of that number). If the options or SARs have been exercised, but the underlying shares have not been sold, the Erroneously Awarded Incentive Compensation is the number of shares underlying the excess options or SARs (or the value thereof). If the underlying shares have already been sold, then the Committee and/or Board shall determine the amount which most reasonably estimates the Erroneously Awarded Incentive Compensation.
 
(d)          Compensation Based on Stock Price or Total Shareholder Return. For Incentive Compensation based on (or derived from) stock price or total shareholder return, where the amount of Erroneously Awarded Incentive Compensation is not subject to mathematical recalculation directly from the information in the applicable Accounting Restatement, (i) the amount shall be determined by the Committee and/or Board based on a reasonable estimate of the effect of the Accounting Restatement on the stock price or total shareholder return upon which the Incentive Compensation was received; and (ii) the Committee and/or Board shall maintain documentation of such determination of that reasonable estimate and provide such documentation to the Exchange in accordance with applicable listing standards.
 
Incentive Compensation shall be deemed “received” in the Company’s fiscal period during which the Financial Reporting Measure specified in the Incentive Compensation award is attained, even if (a) the payment or grant of the Incentive Compensation to the Covered Executive occurs after the end of that period or (b) the Incentive Compensation remains contingent and subject to further conditions thereafter, such as time-based vesting.
 
Any recovery under this Policy shall be made reasonably promptly and in accordance with the Exchange Act and Nasdaq Rules.
 
4.
Incentive Compensation and Financial Reporting Measures
 
For purposes of this Policy:
 
2
“Accounting Restatement” means an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements (a “Big R” restatement), or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (a “little r” restatement). For the avoidance of doubt, in no event will a restatement of the Company’s financial statements that is not due in whole or in part to the Company’s material noncompliance with any financial reporting requirement under applicable law (including any rule or regulation promulgated thereunder) be considered an Accounting Restatement under this Policy. For example, a restatement due exclusively to a retrospective application of any one or more of the following will not be considered an Accounting Restatement under this Policy: (i) a change in accounting principles; (ii) revision to reportable segment information due to a change in the structure of the Company’s internal organization; (iii) reclassification due to a discontinued operation; (iv) application of a change in reporting entity, such as from a reorganization of entities under common control; and (v) revision for stock splits, reverse stock splits, stock dividends or other changes in capital structure.
 
“Financial Reporting Measures” are measures that are determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and all other measures that are derived wholly or in part from such measures. Share price and total shareholder return (and any measures that are derived wholly or in part from share price or total shareholder return) shall, for purposes of this Policy, be considered Financial Reporting Measures. For the avoidance of doubt, a Financial Reporting Measure need not be presented in the Company’s financial statements or included in a filing with the SEC.
 
“Incentive Compensation” means any compensation that is granted, earned, or vested based wholly or in part on the attainment of a Financial Reporting Measure.
 
For purposes of this Policy, specific examples of Incentive Compensation include, but are not limited to:
 
(a)          Non-equity incentive plan awards that are earned based, wholly or in part, based on satisfaction of a Financial Reporting Measure performance goal;
 
(b)          Bonuses paid from a “bonus pool,” the size of which is determined, wholly or in part, based on satisfaction of a Financial Reporting Measure performance goal;
 
(c)          Other cash awards based on satisfaction of a Financial Reporting Measure performance goal;
 
(d)          Restricted stock, restricted stock units, performance share units, stock options and SARs that are granted or become vested, wholly or in part, on satisfaction of a Financial Reporting Measure performance goal; and
 
(e)          Proceeds received upon the sale of shares acquired through an incentive plan that were granted or vested based, wholly or in part, on satisfaction of a Financial Reporting Measure performance goal.
 
3
For purposes of this Policy, Incentive Compensation excludes:
 
(a)          Any base salaries (except with respect to any salary increases earned, wholly or in part, based on satisfaction of a Financial Reporting Measure performance goal);
 
(b)          Bonuses paid solely at the discretion of the Committee or Board that are not paid from a “bonus pool” that is determined by satisfying a Financial Reporting Measure performance goal;
 
(c)          Bonuses paid solely upon satisfying one or more subjective standards and/or completion of a specified employment period;
 
(d)          Non-equity incentive plan awards earned solely upon satisfying one or more strategic measures (e.g., consummating a merger or divestiture) or operational measures (e.g., completion of a project, acquiring a specified number of vessels, attainment of a certain market share associated with overall business growth); and
 
(e)          Equity awards that vest solely based on the passage of time and/or satisfaction of one or more non-Financial Reporting Measures (e.g., a time-vested award, including time-vesting stock options or restricted share rights).
 
“Incentive Compensation Eligible for Recovery” means Incentive Compensation received by a Covered Executive:
 
(a)          after beginning of service as a Covered Executive;
 
(b)          who served as a Covered Executive at any time during the performance period for the applicable Incentive Compensation (regardless of whether such individual is serving as a Covered Executive at the time the Erroneously Awarded Incentive Compensation is required to be repaid);
 
(c)          while the Company had a class of securities listed on a national securities exchange or a national securities association;
 
(d)          during the applicable Recovery Period; and
 
(e)          on or after the effective date of the applicable Nasdaq Rules (i.e., October 2, 2023).
 
“Recovery Period” means, with respect to any Accounting Restatement, the three (3) completed fiscal years of the Company immediately preceding the Restatement Date.  In addition to these last three completed fiscal years, this Policy must apply to any transition period (that results from a change in the Company’s fiscal year) within or immediately following those three completed fiscal years. However, a transition period between the last day of the Company’s previous fiscal year end and the first day of its new fiscal year that comprises a period of nine to 12 months would be deemed a completed fiscal year.
 
4
“Restatement Date” means the earlier to occur of (i) the date the Board, a committee of the Board or the officers of the Company authorized to take such action if Board action is not required, concludes, or reasonably should have concluded, that the Company is required to prepare an Accounting Restatement, or (ii) the date a court, regulator or other legally authorized body directs the Company to prepare an Accounting Restatement.
 
5.
Erroneously Awarded Incentive Compensation – Amount Subject to Recovery
 
The amount to be recovered will be, with respect to each Covered Executive in connection with an Accounting Restatement, the amount of the Incentive Compensation Eligible for Recovery based on the erroneous data that exceeds the Incentive Compensation Eligible for Recovery that otherwise would have been received by the Covered Executive had it been determined based on the restated results (calculated without regard to any taxes paid), as determined by the Committee (the “Erroneously Awarded Incentive Compensation”).
 
For Incentive Compensation based on (or derived from) stock price, total shareholder return, or similar metric where the amount of Erroneously Awarded Incentive Compensation is not subject to mathematical recalculation directly from the information in the applicable Accounting Restatement, the amount shall be determined by the Committee based on a reasonable estimate of the effect of the Accounting Restatement on the stock price, total shareholder return, or other such metric upon which the Incentive Compensation was received. The Company shall maintain documentation of the determination of such reasonable estimate, and, if required by applicable law, regulation or Nasdaq Rule, provide the relevant documentation to Nasdaq.
 
The Company shall promptly provide each Covered Executive with a written notice containing the amount of any Erroneously Awarded Incentive Compensation and a demand for repayment or return of such compensation, as applicable.
 
6.
Method of Recovery
 
The Committee will determine, in its sole discretion, the method for recouping Erroneously Awarded Incentive Compensation hereunder which may include, without limitation, any of the following or combination thereof:
 
(a)          requiring reimbursement of cash Incentive Compensation Eligible for Recovery previously paid;
 
(b)          seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer, or other disposition of any equity-based awards;
 
(c)          offsetting the recouped amount from any compensation otherwise owed by the Company to the Covered Executive;
 
(d)          cancelling outstanding vested or unvested equity awards; and/or
 
(e)          taking any other remedial and recovery action permitted by law, as determined by the Committee.
 
5
Except as set forth in Section 7 below, in no event may the Company accept an amount that is less than the amount of Erroneously Awarded Incentive Compensation in satisfaction of a Covered Executive’s obligations hereunder. To the extent that a Covered Executive fails to repay all Erroneously Awarded Incentive Compensation to the Company when due, the Company shall take all actions reasonable and appropriate to recover such Erroneously Awarded Incentive Compensation from the applicable Covered Executive. The applicable Covered Executive shall also be required to reimburse the Company for any and all expenses reasonably incurred (including legal fees) by the Company in recovering such Erroneously Awarded Incentive Compensation in accordance with the immediately preceding sentence.
 
To the extent that the Covered Executive has already reimbursed the Company for any Erroneously Awarded Incentive Compensation received under any duplicative recovery obligations established by the Company or applicable law, it shall be appropriate for any such reimbursed amount to be credited to the amount of Erroneously Awarded Incentive Compensation that is subject to recovery under this Policy. To the extent that the Erroneously Awarded Incentive Compensation is recovered under a foreign recovery regime, the recovery would meet the obligations of Rule 10D-1.
 
7.
Impracticality
 
The Company shall recover any Erroneously Awarded Incentive Compensation in accordance with this Policy, unless such recovery would be duplicative of compensation recovered by the Company from the Covered Executive pursuant to Section 304 of the Sarbanes-Oxley Act or would be impracticable, as determined by the Committee in accordance with Rule 10D-1 of the Exchange Act and the Nasdaq Rules, and any of the following conditions are satisfied:
 
(a)          The Committee has determined that the direct expenses paid to a third party to assist in enforcing the Policy would exceed the amount to be recovered. Before making this determination, the Company must make a reasonable attempt to recover the Erroneously Awarded Incentive Compensation, document such attempt(s) and provide such documentation to Nasdaq; or
 
(b)          Recovery would violate home country law where that law was adopted prior to November 28, 2022, provided that, before determining that it would be impracticable to recover any amount of Erroneously Awarded Incentive Compensation based on violation of home country law, the Company has obtained an opinion of home country counsel, acceptable to Nasdaq, that recovery would result in such a violation and a copy of the opinion is provided to Nasdaq; or
 
(c)          Recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of Section 401(a)(13) or Section 411(a) of the Internal Revenue Code of 1986, as amended, and regulations thereunder.
 
6
8.
No Indemnification
 
The Company shall not insure or indemnify any Covered Executive against the loss of any Erroneously Awarded Incentive Compensation that is repaid, returned or recovered in accordance with the terms of this Policy, or for any claims relating to the Company’s enforcement of any of its rights under this Policy.
 
The Company shall not enter into any agreement or arrangement that exempts any Incentive Compensation that is granted, paid or awarded to any Covered Executive from the application of this Policy or that waives the Company’s right to recover any Incentive Compensation Eligible for Recovery, and this Policy shall supersede any such agreement (whether entered into before, on or after the Effective Date of this Policy). While a Covered Executive may purchase a third-party insurance policy to fund potential recovery obligations under this Policy, the Company may not pay or reimburse the Covered Executive for premiums for such an insurance policy.
 
9.
Other Recovery Rights
 
The Committee intends that this Policy will be applied to the fullest extent required by applicable law. Any employment agreement, equity award agreement, compensatory plan or any other agreement or arrangement with a Covered Executive shall be deemed to include, as a condition to the grant of any benefit thereunder, an agreement by the Covered Executive to abide, where applicable, by the terms of this Policy.
 
The Committee may require that any employment agreement, equity award agreement, or similar agreement entered into on or after the Effective Date shall, as a condition to the grant of any benefit thereunder, require a Covered Executive to agree to abide, where applicable, by the terms of this Policy.
 
Any right of recovery under this Policy is in addition to, and not in lieu of, any other remedies or rights of recovery that may be available to the Company under applicable law, regulation or rule or pursuant to the terms of any similar policy in any employment agreement, equity award agreement, or similar agreement and any other legal remedies available to the Company.
 
10.
Disclosure Requirements
 
The Company shall file all disclosures with respect to this Policy required by applicable SEC filings and rules.
 
11.
Interpretation
 
The Committee is authorized to interpret and construe this Policy and to make all determinations necessary, appropriate, or advisable for the administration of this Policy, and for the Company’s compliance with Nasdaq Rules, Section 10D, Rule 10D-1 and any other applicable law, regulation, rule or interpretation of the SEC or Nasdaq promulgated or issued in connection therewith. It is intended that this Policy be interpreted in a manner that is consistent with the requirements of Section 10D and Rule 10D-1 of the Exchange Act and any applicable rules or standards adopted by the SEC or Nasdaq.
 
12.
Amendment and Termination
 
The Committee may amend or terminate this Policy from time to time in its discretion; provided that, no amendment or termination of this Policy shall be effective if such amendment or termination would cause the Company to violate any applicable federal securities laws, SEC rule or Nasdaq Rule.
 
7
13.
Effective Date
 
This Policy shall be effective as of December 1, 2023 (the “Effective Date”) and shall apply to Incentive Compensation that is approved, awarded or granted to Covered Executives on or after October 2, 2023.
 
14.
Policy Administration
 
This Policy shall be administered by the Committee, and any determinations made by the Committee shall be final and binding on all affected individuals.
 
8

ANNEX A
 
Seanergy Maritime Holdings Corp.
 
Policy for the Recovery of Erroneously Awarded Incentive Compensation
 
Acknowledgement Form
 
By signing below, the undersigned acknowledges and confirms they have received and reviewed a copy of the Seanergy Maritime Holdings Corp. Policy for the Recovery of Erroneously Awarded Incentive Compensation (the “Policy”). Capitalized terms used but not otherwise defined in this Acknowledgement Form shall have the meanings given to such terms in the Policy.
 
By signing this Acknowledgement Form, the undersigned acknowledges and agrees that they are and will continue to be subject to the Policy and that the Policy will apply both during and after the undersigned’s employment with the Company. Further, by signing below, the undersigned agrees to abide by the terms of the Policy, including, without limitation, by returning any Erroneously Awarded Incentive Compensation to the Company to the extent required by, and in a manner permitted by, the Policy.
 
For the avoidance of doubt, any recovery affected under the Policy shall not constitute grounds to terminate the undersigned’s employment for “Good Reason” (or any term of similar meaning) under any employment, change in control or severance, equity award or compensation arrangements, agreements, plans or programs.
 
 
 
 
Signed
   
 
 
 
Name (Printed)
   
 
 
 
Date


9