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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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, 2024

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, 2024, there were 20,374,165 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
 


TABLE OF CONTENTS

 
ITEM 1.
 6
 
ITEM 2.
 6
 
ITEM 3.
 6
 
ITEM 4.
 39
 
ITEM 4A.
 60
 
ITEM 5.
 61
 
ITEM 6.
 75
 
ITEM 7.
 78
 
ITEM 8.
 80
 
ITEM 9.
 81
 
ITEM 10.
 81
 
ITEM 11.
 89
 
ITEM 12.
 89
PART II  
 
ITEM 13.
 90
 
ITEM 14.
 90
 
ITEM 15.
90
 
ITEM 16.
 92
 
ITEM 16A.
 92
 
ITEM 16B.
 92
 
ITEM 16C.
 92
 
ITEM 16D.
 92
 
ITEM 16E.
 92
 
ITEM 16F.
 93
 
ITEM 16G.
 93
 
ITEM 16H.
 93
 
ITEM 16I.
 93
 
ITEM 16J.
 93
 
ITEM 16K.
 94
 
ITEM 17.
 95
 
ITEM 18.
 95
 
ITEM 19.
 96

3
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;

4

 •
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;


•
our future operating or financial results;


•
changes in interest or inflation rates;


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


•
public health threats, pandemics, epidemics, other disease outbreaks or calamities, and governmental responses thereto;


•
changes in global and regional economic and political conditions, 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;


•
changes in tariffs, trade barriers, embargos and regulatory requirements;


•
general domestic and international political conditions or events, including trade wars, acts of hostility or potential, threatened, or ongoing war including between Russia and Ukraine (and related sanctions), Israel and Hamas, and China and Taiwan, the conflict between Israel and Hezbollah, the Houthi crisis in the Red Sea, the tensions between Israel and Iran, tensions between the U.S. and China, the U.S. and Panama and the U.S. and the European Union and North Atlantic Treaty Organization (“NATO”) members;


•
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 to implement and maintain adequate Environmental, Social and Governance ("ESG") practices, policies, programs, goals and targets;


•
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.

5
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, 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.

•
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.

6

 •
Significant tariffs or other restrictions imposed on imports by the U.S. and related countermeasures taken by impacted foreign countries could have a material adverse effect on our operations and financial results.

•
A recent proposal by the U.S. to impose new port fees on Chinese-operated vessels, Chinese-built vessels, non-Chinese companies operating Chinese-built vessels and companies with newbuilding orders at Chinese shipyards, and to restrict a percentage of U.S. products to being transported on U.S. vessels could have a material adverse effect on our operations and financial results.

•
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.

•
Increases in fuel prices may adversely affect our profits.

•
Worldwide inflationary pressures could negatively impact our 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.

•
Technological developments which affect global trade flows and supply chains are challenging some of our largest customers and may therefore affect our business and results of operations.

•
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.

•
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 vessels we may acquire in the future.

•
If the vessels we may 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 operation.

• 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.

7

 •
We maintain cash with a limited number of financial institutions, which may 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.

•
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 legal proceedings 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, crew and commercial managers for technical, crew 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.

•
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.

8
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 2024, the BDI ranged from a low of 976 on December 19, 2024 to a high of 2,419 on March 18, 2024. Although the BDI was 1,650 as of March 18, 2025, due to its volatile nature, there can be no assurance of the future performance of the BDI.

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 liabilities, 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;


•
changes in interest or inflation rates;

9

 •
general domestic and international political conditions or events, including trade wars, retaliatory economic measures, acts of hostility or potential, threatened, or ongoing war including between Russia and Ukraine (and related sanctions), Israel and Hamas, and China and Taiwan, the conflict between Israel and Hezbollah, the Houthi crisis in the Red Sea, the tensions between Israel and Iran, tensions between the U.S. and China, the U.S. and Panama and the U.S. and the European Union and NATO members;


•
global and regional economic and political conditions and developments, 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;


•
natural disasters and weather;


•
public health threats, pandemics, 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 or trade barriers 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


•
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, 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.

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. Restrictions and future prevention and mitigation measures against outbreaks of epidemic and pandemic diseases, such as travel restrictions and temporarily closing business, 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. The COVID-19 pandemic also, 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. Other future disease outbreaks or COVID-19 variants may cause us to 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 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. This impact could be material and adverse.

We are currently almost entirely 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. However, for two of these vessels, the daily hire includes a fixed floor rate as well as a profit-sharing scheme based on a premium over the daily 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.

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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, we may be unable to operate our vessels trading in the spot market or our 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.

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 10.5% of the existing world dry bulk fleet as of the beginning of March 2025, 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:

 
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the number of newbuilding orders and deliveries, including delays in new vessels’ deliveries;


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the number of shipyards and their ability to deliver vessels;


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potential disruption, including supply chain disruptions, of shipping routes due to accidents or political events;


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scrapping and recycling rate of older vessels;


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vessel casualties;


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the price of steel and vessel equipment;


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product imbalances (affecting the level of trading activity) and developments in international trade;


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the number of vessels that are out of service, namely those that are laid-up, drydocked, awaiting repairs or otherwise not available for hire;


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vessels’ average speed;


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technological advances in vessel design and capacity;


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availability of financing for new vessels and shipping activity;

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the imposition of sanctions, tariffs, trade barriers or embargos;


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changes in national or international regulations that may effectively cause reductions in the carrying capacity of vessels or early obsolescence of tonnage;


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changes in environmental and other regulations that may limit the useful life of vessels;


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port or canal congestion;


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changes in interest or inflation rates;


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changes in market conditions, including general domestic and international political conditions or events, including trade wars, acts of hostility or potential, threatened, or ongoing war including between Russia and Ukraine (and related sanctions), the war between Israel and Hamas, and China and Taiwan, the conflict between Israel and Hezbollah, the Houthi crisis in the Red Sea, and the tensions between Israel and Iran, tensions between the U.S. and China, the U.S. and Panama and the U.S. and the European Union and NATO members; and


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changes in global and regional economic and political conditions, 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.

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.

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 between Israel and Iran, tensions in the Red Sea or Russia and NATO tensions, China and Taiwan disputes, the United States and China trade relations, tensions between the U.S. and NATO members, tensions between the U.S. and Panama, 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, epidemics or pandemics, and banking crises or failures. See also “— Outbreaks of epidemic and pandemic diseases 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. Although a cease-fire declared between Israel and Hamas on January 15, 2025, heightened regional tension and renewed conflict in Gaza and Yemen developed in March 2025, which may lead to continued attacks on vessels transiting the Red Sea. 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.

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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 U.S. implementation of tariffs and related countermeasures taken by impacted foreign countries further increases the risk of additional trade protectionism. The withdrawal of the United Kingdom from the EU, or 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.

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.

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 recovered from 3.0% in 2022 to 5.2% in 2023, but the economy continued to be weighed down by the ongoing crisis in the property market. For the year ended December 31, 2024, China’s GDP growth rate declined slightly to at approximately 5.0%. Looking ahead, the China’s economic growth is expected to remain steady, with forecasts projecting a GDP growth rate of around 5.0% for 2025. Although the Chinese government has implemented economic stimulus measures, 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.

The U.S. and global capital markets, including credit markets, continue to experience volatility and uncertainty, 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 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. While recent developments in the global credit markets have been supportive of borrowing and refinancing, 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.

Significant tariffs or other restrictions imposed on imports by the U.S. and related countermeasures taken by impacted foreign countries could have a material adverse effect on our operations and financial results.

If significant tariffs or other restrictions are implemented on imports by the U.S. and related countermeasures are taken by impacted foreign countries, our business, including operating results, cash flows and financial condition, may be adversely affected. In January 2025, during the initial days of President Trump's second term, the U.S. announced the imposition of additional substantial tariffs on imports from various countries, including China, Canada and Mexico, and the subject countries have imposed or indicated their intention to impose counter measures. In February 2025, the U.S. imposed tariffs of 10% on all imported goods from China, followed by an additional 10% tariff in March 2025. The U.S. also imposed a 25% tariff on all steel and aluminum imports, beginning in March 2025. On February 13, 2025, President Trump ordered his trade advisers to come up with “reciprocal” tariffs on U.S. trade partners to retaliate against taxes, tariffs, regulations and subsidies, thus increasing the possibility of a global trade war. If implemented, such tariffs and countermeasures could increase the cost of raw materials and components that we transport, disrupt global supply chains and create additional operational challenges. If further tariffs are imposed on a broader range of imports, or if retaliatory trade measures are enacted by affected countries, these factors could reduce demand for commodities carried by sea, result in the loss of customers and harm our competitive position in key markets. Additionally, ongoing trade tensions and uncertainty regarding future trade policies could negatively impact global economic conditions and consumer confidence, further affecting our business performance.

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A recent proposal by the U.S. to impose new port fees on Chinese-operated vessels, Chinese-built vessels, non-Chinese companies operating Chinese-built vessels and companies with newbuilding orders at Chinese shipyards, and to restrict a percentage of U.S. products to being transported on U.S. vessels could have a material adverse effect on our operations and financial results.

The United States Trade Representative (USTR) has recently put forward significant trade actions under Section 301 of the Trade Act of 1974 with the aim of addressing China's dominance in the maritime, logistics, and shipbuilding industries.  These proposed actions, should they be enacted, have the potential to dramatically increase the port fees and overall operating expenses for ships calling at U.S. ports. Specifically, the USTR is proposing a series of service fees that would function as direct increases to port-related costs.

The proposal would include a service fee targeting Chinese operators of up to $1.0 million for each instance a vessel operated by a Chinese entity enters a U.S. port.  Alternatively, the fee could be calculated at a rate of up to $1,000 per dwt of the vessel for each port entrance.

Another proposed service fee focuses on operators with fleets comprised of Chinese-built Vessels.  Under this proposal, fees could reach as high as $1.5 million each time a Chinese-built vessel owned by a non-Chinese operator enters a U.S. port.  Furthermore, a tiered fee structure is under consideration, based on the proportion of Chinese-built vessels within an operator’s fleet.  Operators with fleets that are 50% or more Chinese-built could face fees of up to $1.0 million dollars per port call; for operators with fleets that are greater than 25% and less than 50% Chinese-built, the fee could be up to $750,000 per port call; and for operators whose fleets have greater than 0% and less than 25% percent Chinese-built vessels, the port fee could reach up to $500,000 per vessel entrance. Another option being considered is an additional fee of up to $1.0 million per port entrance if 25% or more of an operator’s fleet is composed of vessels constructed in China.

A further proposed service fee is aimed at operators with newbuilding orders for Chinese vessels.  This fee would be based on the percentage of vessels an operator has ordered from Chinese shipyards or expects to receive from them within the next 24 months. Operators with 50% or more of their vessel orders placed with Chinese shipyards could be charged up to $1.0 million per vessel entrance.  For those with greater than 25% to less than 50% percent of their orders in Chinese shipyards, the fee could reach $750,000, and for those with greater than 0% to less than 25%, it could be up to $500,000 per vessel entrance.  Another possibility is a flat fee of up to $1.0 million dollars per port entrance if 25% or more of an operator’s total vessel orders over the next 24 months are with Chinese shipyards.

Beyond these direct fee increases, the proposed actions also encompass “restrictions on services” designed to promote the transport of U.S. goods on U.S. vessels. These restrictions would be phased in over several years, starting with a requirement that a small percentage of U.S. exports be transported on U.S.-flagged vessels by U.S. operators, escalating to a larger percentage over time, with a portion specifically mandated to be on U.S.-flagged and U.S.-built vessels. Another proposed restriction would require U.S. goods to be exported on U.S.-flagged, U.S.-built vessels, with exceptions only granted if operators demonstrate that at least 20% of U.S. products per calendar year are transported on U.S.-flagged and U.S.-built vessels. These restrictions could reduce the demand for non-U.S. built vessels, including ours.

The actual implementation of these proposed actions remains uncertain. The final form, scope, and effective dates of any measures that are ultimately adopted may significantly differ from the current proposals. Additionally, specifics, such as applicability to sale and leaseback arrangements with Chinese leasing financiers, has not been clarified.  In a sale and leaseback arrangement, the Chinese leasing financiers are the registered owners of the vessels.  Furthermore, retaliatory measures from China or other nations could further compound disruptions and cost increases within the global shipping industry.

In addition to direct port fee increases, retaliatory actions by China or other countries could indirectly impact port-related costs. For example, China could impose retaliatory port fees or restrictions on vessels of non-Chinese origin calling at Chinese ports, which could disrupt global shipping patterns and potentially increase congestion and costs at ports worldwide, including U.S. ports.

Of the 21 vessels we operate, one was constructed in China. However, we have entered into and may further enter in the future into sale and leaseback transactions with Chinese financial institutions. Additionally, we may enter into contracts for the purchase of secondhand vessels constructed in China or shipbuilding contracts for newbuildings constructed in Chinese shipyards. Given the potential magnitude of these proposed port-related fees and the many uncertainties surrounding their implementation, it is not possible at this time to fully predict the ultimate financial impact.  However, if measures similar to those that have been proposed are implemented, port fees for our vessels or vessels we charter and our operating costs for voyages calling at U.S. ports could materially increase. Even though port fees are typically borne by the charterer, if port fees are assessed due to our ownership of the relevant vessel, it is possible that charterers may demand that we bear these costs or otherwise reduce the applicable charter rate.  This, in turn, could significantly reduce our profitability, negatively impact our ability to compete effectively, and materially and adversely affect our operations and financial results.

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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 where our vessels or 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 uncertainty and armed conflicts, including the war between Ukraine and Russia and between Israel and Hamas and Hezbollah, Russia and NATO tensions, U.S. and NATO tensions, China and Taiwan disputes, U.S. and China trade relations, instability between Iran and the West, hostilities between the U.S. and North Korea and the U.S. and Panama, 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 or Gulf of Aden), and other countries and geographic areas, geopolitical events, such Brexit, or another withdrawal from the European Union, terrorist or other attacks (or threats thereof) around the world and war (or threatened war) or international hostilities. Such events may contribute to further economic instability in the global financial markets and international commerce and 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.

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 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.
 
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.

Past terrorist attacks and the ongoing threat of future incidents worldwide continue to instigate uncertainty in the global financial markets, potentially affecting our business, operating outcomes and financial condition. Recent acts of terror perpetrated by Houthi rebels in the Red Sea region further heighten concerns about the impact on maritime transportation along key routes, such as the Red Sea route, affecting our shipping operations. 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. A cease-fire between Israel and Hamas was declared on January 15, 2025, but there is no certainty that the cease-fire will continue. Further President Trump’s proposal to annex Gaza has raised fears that Houthi militant group could renew its threat against commercial ships crossing the Red Sea, after declaring in January 2025 that it would stop targeting most vessels following the Israel-Hamas ceasefire.

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Ongoing conflicts and recent developments in regions such as Ukraine, Russia, North Korea, Myanmar, and the Middle East (including Iran, Iraq, Israel, Palestine, Syria, the Persian Gulf, Yemen), coupled with the presence of the United States or other armed forces in the Middle East, may lead to additional acts of terrorism and armed conflict globally. These events may contribute to heightened economic instability in the worldwide financial markets. Significant tariffs or other restrictions being imposed on imports by the U.S. and related countermeasures taken by impacted foreign countries, may be adversely affect our business, operating results, cash flows, and financial condition. See “— Significant tariffs or other restrictions imposed on imports by the U.S. and related countermeasures taken by impacted foreign countries could have a material adverse effect on our operations and financial results.”

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:


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crew strikes and/or boycotts;
 

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acts of God;
 

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damage to or destruction of vessels due to marine disaster;
 

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terrorism, piracy or other detentions;
 

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environmental accidents;


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cargo and property losses or damage; and
 

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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.

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.

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Increases in 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 2024 and 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 tariffs and trade restrictions, 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, while under time charter agreements fuel expenses are borne by the charterers. We currently cannot guarantee that we will continue to employ our vessels on a time charter basis, or that we will hedge our fuel costs on any prospective future voyage charters. As a result, an increase in the price of fuel may negatively affect our profitability and cash flows in the future.

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 the inflationary pressures in recent years, central banks made steep increases in interest rates, which resulted in increases to the interest rates available to us for the financing of our operations and investment activity. Although central banks have started decreasing interest rates, future monetary policies cannot be guaranteed. If central banks increase interest rates again, 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, if inflationary pressures intensify, 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. There is uncertainty regarding inflation due to the likely shift in policy following numerous elections around the world. Trade tariffs announced by President Trump and retaliatory tariffs and countermeasures from affected countries could trigger economic uncertainty but the impact on inflation is unclear.

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.
 
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. This seasonality should not affect our operating results if our vessels are employed on fixed rate period time charters, but because most of our vessels are employed (the vessels we may acquire may be employed) on index-linked charters (or occasionally in the spot voyage market), 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.

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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. At the conclusion of MEPC 82, a draft legal text was used as a basis for ongoing talks about mid-term GHG reduction measures, which are expected to be adopted in 2025.  The proposed mid-term measures include a goal-based marine fuel standard, phasing in the mandatory use of fuels with less GHG intensity, and a global GHG emission pricing mechanism.  These regulations and any additional regulations addressing similar goals could cause us to incur additional substantial expenses and could have a material adverse effect on our business, operating results, cash flows and financial condition and our ability to pay dividends. 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 came  into effect on January 1, 2025.  The ETS applies 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 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 Directive 2023/959 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. To prepare for and manage the administrative aspects of EU ETS compliance, we have made significant investments in new systems, including personnel, data management, cost recovery mechanisms, revised service agreement terms, and transparent emissions reporting procedures. However, the cost of future 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.

Additionally, on July 25, 2023, the European Council of the European Union adopted the Fuel EU Maritime Regulation 2023/1805 (“FuelEU”) under the FuelEU Initiative of its “Fit-for-55” package which sets limitations on the acceptable yearly greenhouse gas intensity of the energy used by covered vessels. Among other things, FuelEU requires that greenhouse gas intensity of fuel used by covered vessels is reduced by 2% starting January 1, 2025, with additional reductions contemplated every five years (up to 80% by 2050). Shipping companies may enter into pooling mechanisms with other shipping companies in order to achieve compliance, bank surplus emissions and borrow compliance balances from future years.  A FuelEU Document of Compliance is required to be kept on board a vessel to show compliance by June 30, 2026. Both the ETS and FuelEU schemes have significant impacts on the management of the vessels calling to EU ports, by increasing the complexity and monitoring of, and costs associated with the operation of vessels and affecting the relationships with our time charterers.
 
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.
 
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Technological developments which affect global trade flows and supply chains are challenging some of our largest customers and may therefore affect our business and results of operations.

By reducing the cost of labor through automation and digitization, including by means of new technologies in artificial intelligence and machine learning, among others, and empowering consumers to demand goods whenever and wherever they choose, technology is changing the business models and production of goods in many industries, including those of some of our largest customers. Consequently, supply chains are being pulled closer to the end-customer and are required to be more responsive to changing demand patterns. As a result, fewer intermediate and raw inputs are traded, which could lead to a decrease in shipping activity. If automation and digitization become more commercially viable and/or production becomes more regional or local, total containerized trade volumes would decrease, which would adversely affect demand for our services. Supply chain disruptions caused by geopolitical and economic events, pandemics, rising tariff barriers and environmental concerns also accelerate these trends.

Tax law changes may result in significant additional taxes to us.
 
Tax law changes may result in significant additional taxes to us. For example, the Organization for Economic Cooperation and Development (the “OECD”) 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, operates to impose a minimum tax rate of 15% calculated on a jurisdictional basis. More than 130 countries have signed on to the Pillar Two rules released in December 2021 that, among other provisions, give the countries the right to “tax back” profit that is currently taxed below the minimum 15% rate. The framework calls for law enactment by OECD and G20 members in 2022 to take effect in 2023 and 2024. Presently, it is difficult to assess if and to what extent such changes will impact our tax burden. Further developments and unexpected implementation mechanics could adversely affect our effective tax rate or result in higher cash tax liabilities. 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.

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.

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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. These rules were challenged in federal courts, and, in April 2024, the SEC announced that it would voluntarily stay the effectiveness of the rules pending judicial review. On February 11, 2025 acting SEC Chair Mark Uyeda directed the Commission’s staff to pause their defense of the rule and request that the Court not schedule the case for argument. It is unclear if the rules will be enforced or repealed. Costs of compliance with ESG or climate change 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, 2024, 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.

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. On a fully delivered basis nine of our vessels currently have scrubbers installed while the remaining twelve 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 our vessels that are not 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.”

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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.

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. Additional amendments to the BWM Convention, concerning the form of the Ballast Water Record Book, are expected to enter into force on February 1, 2025. 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.

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. On September 20, 2024, the EPA finalized national standards of performance for non-recreational vessels 79-feel in length and longer with respect to incidental discharges and on October 9, 2024, the Vessel Incidental Discharge National Standards of Performance were published. Within two years of publication, the USCG is required to develop corresponding implementation regulations. 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. Several U.S. states have added specific requirements to the Vessel General Permit including submission of a Notice of Intent, or NOI, or retention of a Permit Authorization and Record of Inspection (PARI) form and submission of annual reports. 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 $77.0 million in May 2024. The fair market value of our vessels is dependent on other factors as well, including:


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


•
prevailing levels of charter rates;


•
competition from other shipping companies;


•
sophistication and condition of the vessels;


•
advances in efficiency, such as introduction of autonomous vessels;


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


•
lifetime maintenance record;

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 •
supply and demand for vessels;


•
types, sizes, and age of vessels;


•
number of newbuilding deliveries;


•
the cost to order and construct a new vessel;


•
number of vessels scrapped or otherwise removed from the world fleet;


•
the scrap value of vessels;


•
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 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 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 purchase options or obligations under our financing arrangements within 2025, or for the acquisition of any vessels we may agree to 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 may acquire in the future are not delivered on time or are delivered with significant defects, our earnings and financial condition could suffer.

We have historically expanded our fleet through the acquisition of secondhand vessels 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, 2024, we had $ 261.5 million in debt outstanding across our loan facilities and sale and leaseback transactions. 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:


 •
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.”

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.

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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, 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 19 Capesize vessels and two Newcastlemax dry bulk vessels. Moreover, we may acquire additional vessels in the future. Our ability to manage our growth will primarily depend on our ability to:


 •
generate excess cash flow so that we can invest without jeopardizing our ability to cover current and foreseeable working capital needs, including debt service;


•
finance our operations;


•
locate and acquire suitable vessels;


•
identify and consummate acquisitions or joint ventures;


•
integrate any acquired businesses or vessels successfully with our existing operations;


•
hire, train and retain qualified personnel and crew to manage and operate our growing business and fleet; and


•
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.

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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 we may acquire 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, five and one vessels in our operating fleet have three, four and five-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 majority of our loan and sale and leaseback agreements bear floating rate interest linked either to the Secured Overnight Financing Rate (“SOFR”) or Term SOFR. An increase in the SOFR, would affect the amount of interest payable under our existing debt, 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. 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.

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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 anticipated to be a major expense for us. The growing global shipping fleet has led to higher demand for highly skilled and qualified crew, driving crewing costs upward. If we are unable to raise our rates accordingly, these rising costs could negatively impact our profitability.

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.

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 , which may subject us to credit risk.

We maintain all of our cash with a limited number of financial institutions mostly located in Europe.
 
Generally, only a portion of these cash balances are covered by insurance in the event of default by a financial institution. 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.
 
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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.

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 two Newcastlemax dry bulk vessels. 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 legal proceedings in the future.

From time to time, we may be involved in legal proceedings which may include shareholder litigation, contract claims, regulatory matters, other claims associated with our operations, as well as other legal proceedings arising in the ordinary course of business. In March 2024, a shareholder filed a lawsuit in the High Court of the Republic of the Marshall Islands against the Company and its board, which was dismissed in October 2024 on multiple grounds. The plaintiff has appealed the dismissal. While we believe we have substantial defenses to this appeal, we cannot predict its ultimate outcome.
 
Legal proceedings, regardless of merit, can be time-consuming, costly, and divert management’s attention from strategic priorities. Any unfavorable ruling or settlement could result in financial obligations, reputational impact, or regulatory considerations. While we maintain insurance coverage where applicable, subject to customary deductibles, there is no guarantee it will be applicable or sufficiently cover litigation costs or potential liabilities.
 
We do not expect any current legal matters to have a material adverse effect on us. However, future legal proceedings could arise that may have a material effect on our financial condition, operations, or business strategy.
 
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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 in the future could result in significant expenses to us.

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, crew and commercial managers for technical, crew 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, Kaizenship and Iconship. 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, Paroship, Titanship, Meiship and Blueship. 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, Kaizenship and Iconship. 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.

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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.

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 2024 taxable year, and we do not expect to become a PFIC in 2025 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.

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We believe that we qualify for exemption from the 4% tax under Section 883 of the Code for our 2024 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 2025 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 common shares were, in combination with each other, to own 50% or more of our outstanding common shares 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 2025 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.

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 rate tax for our subsidiaries in Malta for the period from January 1, 2024 to December 31, 2024 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.

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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.

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.

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 18, 2025, 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 $13.13 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 $4.13 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 $25.1 million of common shares pursuant to the ATM Sales Agreement we have entered into with B. Riley Securities, Inc., as sales agent, as amended to date, 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;


•
regulatory developments;


•
additions or departures of key personnel;


•
general market conditions; and


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

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On December 31, 2024, the closing price of our common shares on the Nasdaq Capital Market was $6.95 per share, as compared to $7.27, which was the closing price on March 18, 2025. 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 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 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.

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.

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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 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.

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.

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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.

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 could be 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-generating 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.

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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 being struck from the register of companies. 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 any such jurisdiction 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.

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.

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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 19 Capesize dry bulk vessels and two Newcastlemax dry bulk vessels with a cargo-carrying capacity of approximately 3,803,918 dwt and an average fleet age of approximately 13.8 years.

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.

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 January 26, 2022, we voluntarily prepaid $5.0 million of the outstanding balance of the Second JDH Note, which we had entered with Jelco Delta Holding Corp. (“JDH”) on September 7, 2015, 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.

On February 28, 2022, we voluntarily prepaid the remaining balance of $1.85 million of the second facility loan (or the “Second JDH Loan”), which we had entered with JDH on May 24, 2017, 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 25, 2022, we agreed to acquire a 180,242 dwt Capesize bulk carrier, built in 2010 in Japan. The vessel was delivered on June 27, 2022, and was renamed M/V Honorship. The purchase price of $34.6 million was funded with cash on hand and through the June 2022 Piraeus Bank Loan Facility, as described herein.

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 and 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.

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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, our 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 (the “December 2023 Repurchase Plan”). 362,161 common shares were repurchased under the June 2022 Repurchase 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.

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 9, 2022, we agreed to acquire a 181,415 dwt Capesize bulk carrier, built in 2012 in Japan. The vessel was delivered on December 27, 2022, and was renamed M/V Paroship. The purchase price of $31.0 million was funded with cash on hand and through the December 2022 Alpha Bank Loan Facility, as described herein.

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 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 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 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.

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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 included 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, was 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.

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 for Marine Transportation.

On December 14, 2023, we announced that our board of directors authorized the 2023 December Repurchase Plan, pursuant to which we could purchase up to $25.0 million of our outstanding common shares, convertible note, and warrants until December 31, 2025.

On December 14, 2023, we entered into an ATM Sales Agreement with B. Riley Securities, Inc., as sales agent, as amended to date, 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 577,219 common shares under the program at an average price of $8.57 per share, resulting in gross proceeds of $4.9 million.

On December 29, 2023, we repaid the remaining balance of 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. 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.

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

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On February 5, 2024, we agreed to acquire a 181,392 dwt Capesize bulk carrier, built in 2013 in Japan. The vessel was delivered on June 11, 2024, and was renamed M/V Iconship. The purchase price of $33.7 million was funded with cash on hand and through the AVIC Iconship Sale and Leaseback, as described herein.

On March 5, 2024, we declared a regular quarterly cash dividend of $0.025 per common share for the fourth quarter of 2023 and a special cash dividend of $0.075 per common share, which was paid 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 vessel was delivered on October 1, 2024 and was renamed M/V Kaizenship. The purchase price of $35.6 million was funded with cash on hand and through the Hinode Sale and Leaseback, as described below.

On May 14, 2024, we declared a regular quarterly cash dividend of $0.025 per common share for the first quarter of 2024 and a special cash dividend of $0.125 per common share, which was paid July 10, 2024 to all shareholders of record as of June 25, 2024.

In August 2024, our board of directors adopted an updated dividend policy, as described herein.

On August 5, 2024 we declared a quarterly dividend of $0.25 per common share for the second quarter of 2024, which was paid October 10, 2024 to all shareholders of record as of September 27, 2024.

In October 2024, we exercised the purchase option and took delivery of the M/V Titanship, for an aggregate price of $20.2 million. The exercise of the purchase option was financed with proceeds from the October 2024 Alpha Bank Loan Facility, as described herein.

On November 1, 2024, we released our Environmental, Social and Governance Report for the year ended December 31, 2023 (“2023 ESG Report”). The 2023 ESG Report provides an overview of our policies relating to environmental, social and governance commitments and has been developed in accordance with the Global Reporting Initiative Standards and the Sustainability Accounting Standards Board for Marine Transportation.

On November 1, 2024, we declared a quarterly dividend of $0.26 per common share for the third quarter of 2024, which was paid January 10, 2025 to all shareholders of record as of December 27, 2024.

On December 12, 2024, we agreed to acquire a 207,851 dwt Newcastlemax vessel, built in 2013 in Japan. The vessel was delivered on February 27, 2025 and was renamed M/V Meiship. The purchase price of $37.0 million was funded through a combination of cash on hand and proceeds from the February 2025 Piraeus Bank Loan Facility, as described herein.

On January 23, 2025, we entered into a six-month bareboat charter with an unaffiliated third party in Japan for a 178,459 dwt Capesize bulk carrier, built in 2011 in Japan. The vessel was renamed M/V Blueship and was delivered on February 25, 2025. The bareboat charter agreement required a downpayment of $8.0 million and includes a daily charter rate of $9,750 and a purchase obligation of $22.5 million at the end of the bareboat charter.

On March 5, 2025, we declared a quarterly dividend of $0.10 per common share for the fourth quarter of 2024 payable on or about April 10, 2025 to all shareholders of record as of March 27, 2025.

B.
Business Overview

We are an international shipping company specializing in the worldwide seaborne transportation of dry bulk commodities.  We currently operate 19 Capesize dry bulk vessels and two Newcastlemax dry bulk vessels, predominantly built in Japan and S. Korea, with a cargo-carrying capacity of approximately 3,803,918 dwt and an average fleet age of approximately 13.8 years.

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)
Meiship
2013
207,851
MI
Imabari
T/C Index Linked(2)
Patriotship
2010
181,709
MI
Imabari
T/C Index Linked(3)
Dukeship
2010
181,453
MI
Sasebo
T/C Index Linked(4)
Worldship
2012
181,415
MI
Koyo-Imabari
T/C Index Linked(5)
Paroship
2012
181,415
LIB
Koyo-Imabari
T/C Index Linked(6)
Kaizenship
2012
181,396
POR
Koyo Dock
T/C Index Linked(7)
Iconship
2013
181,392
LIB
Imabari
T/C Index Linked(8)
Hellasship
2012
181,325
LIB
Imabari
T/C Index Linked(9)
Honorship
2010
180,242
MI
Imabari
T/C Index Linked(10)
Fellowship
2010
179,701
MI
Daewoo
T/C Index Linked(11)
Championship
2011
179,238
MI
Sungdong SB
T/C Index Linked (12)
Partnership
2012
179,213
MI
Hyundai
T/C Index Linked(13)
Knightship
2010
178,978
LIB
Hyundai
T/C Index Linked(14)
Lordship
2010
178,838
LIB
Hyundai
T/C Index Linked(15)
Blueship
2011
178,459
MI
Mitsui SB
T/C Index Linked(16)
Friendship
2009
176,952
LIB
Namura
T/C Index Linked(17)
Flagship
2013
176,387
MI
Mitsui
T/C Index Linked(18)
Geniuship
2010
170,057
MI
Sungdong SB
T/C Index Linked(19)
Premiership
2010
170,024
MI
Sungdong SB
T/C Index Linked(20)
Squireship
2010
170,018
LIB
Sungdong SB
T/C Index Linked(21)
           

(1)
Chartered by Costamare Bulkers and delivered to the charterer on September 28, 2024, for a period of minimum 24 to maximum 30 months. The daily hire has a fixed floor rate plus a profit-sharing scheme based on a significant premium over the daily BCI.
 
(2)
Chartered by Costamare Bulkers and delivered to the charterer on March 3, 2025, for a period of about 12 to about 15 months. The daily hire has a fixed floor rate plus a profit-sharing scheme based on a significant premium over the daily BCI.
 
(3)
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 with us receiving the majority of the monetary benefit. 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.  Following three consecutive extensions, the new extended time charter period is for a duration of minimum October 1, 2025 and maximum March 31, 2026.
 
(4)
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. Following two consecutive extensions, the new extended time charter period is for a duration of minimum June 30, 2025 and maximum September 30, 2025.

(5)
Chartered by NYK and delivered to the charterer on February 1, 2024 for a period of minimum 21 to about 24 months. 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 with us receiving the majority of the monetary benefit. 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.

(6)
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 with us receiving the majority of the monetary benefit. 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 to about 24 months.

(7)
Chartered by MOL and delivered to the charterer on October 4, 2024 for a period of minimum 10 to maximum 12 months. The daily charter hire is based on a premium over the daily BCI. 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 10 months priced at the prevailing Capesize FFA rate for the selected period.

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(8)
Chartered by Costamare Bulkers and delivered to the charterer on June 15, 2024 for a period of minimum 21 to about 24 months. The daily charter hire is based on a premium over the daily BCI. 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.

(9)
Chartered by NYK and delivered to the charterer on May 10, 2021 for a period of minimum 11 to maximum 15 months. The daily charter hire is based on a premium over the daily BCI. 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.  Following three consecutive extensions, the new extended time charter period commenced from January 8, 2025 for a duration of minimum 15 to about 18 months.

(10)
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. On May 29, 2024, the extension of the time charter period commenced for a period of minimum March 16, 2025 to maximum July 15, 2025.

(11)
Chartered by Anglo American and delivered to the charterer on June 18, 2021 for a period of minimum 12 to about 15 months. 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 to a fixed rate for a period of between three and 12 months priced at the prevailing Capesize FFA for the selected period. Following two consecutive extensions, the new extended time charter period commenced from October 18, 2024, for a duration of minimum 20 to about 24 months.

(12)
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.

(13)
Chartered by NYK and delivered to the charterer on November 14, 2024 for a period of minimum 15 to maximum 18 months from the delivery date. The daily charter hire is based on a premium over the daily BCI and a 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 rate to a fixed rate for a period of between two and 12 months priced at the prevailing Capesize FFA for the selected period.

(14)
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. In March 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. In May 2024, Glencore agreed to exercise the second optional period extending the T/C with commencement from December 28, 2024 for a period of minimum 11 to maximum 13 months.

(15)
Chartered by Costamare Bulkers and delivered to the charterer on July 31, 2024 for a period of minimum January 1, 2026 to maximum May 31, 2026. The daily charter hire is based on a premium over the daily BCI and a 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 rate to a fixed rate for a period of between two and 12 months priced at the prevailing Capesize FFA for the selected period.

(16)
Chartered by NYK and is expected to be delivered to the charterer following the completion of her drydock, for a period of minimum 15 to about 19 months from the delivery date. The daily charter hire is based on the daily BCI plus $1,500 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 two and 12 months priced at the prevailing Capesize FFA for the selected period.

(17)
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.  Following two consecutive extensions, the new extended time charter period commenced from December 31, 2024, for a duration of minimum 12 to about 15 months.
 
44
(18)
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.

(19)
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.  Following two consecutive extensions, the new extended time charter period commenced from July 19, 2024, for a duration of about 11 to about 13 months.

(20)
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 June 2024. In November 2023, Glencore exercised the second optional period with commencement from April 2024 for a period of maximum May 2025. In December 2024, the T/C was extended for a period of minimum March 1, 2027 to maximum May 30, 2027 at a rate based on the daily BCI and a scrubber profit sharing 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 rate to a fixed rate for a period of between one and nine months priced at the prevailing Capesize FFA for the selected period.

(21)
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 July 2024.  In November 2023, Glencore exercised the second optional period with commencement from May 2024 for a period of maximum June 2025. In December 2024, the T/C was extended for a period of minimum March 1, 2027 to maximum May 30, 2027 at a rate based on the daily BCI and a scrubber profit sharing 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 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, POR - Portugal.

Our Business Strategy

We currently operate 19 Capesize vessels and two Newcastlemax dry bulk vessels. We also intend to continue to review the market from time to time aiming 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, Kaizenship and Iconship. 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 inter-company services do not affect our consolidated financial statements.

V.Ships Greece, an independent third party, currently provides technical management services to six of our vessels, the M/Vs Championship, Friendship, Titanship, Paroship, Blueship and Meiship, that includes general administrative and support services, such as crewing and other technical management services, accounting related to vessels and provisions. In 2024, we paid a monthly fee of $10,000 per vessel to V.Ships Greece in exchange for providing these technical, support and administrative services. Since January 1, 2025, we pay a monthly fee of $10,833 per vessel to V.Ships Greece. 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.

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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 nine vessels of our fleet, respectively. In 2024, we paid a monthly fee of $2,200 per vessel to V.Ships Greece. In addition, in 2024 we paid a monthly fee of $90 per crew member or around $2,000 per vessel to Global Seaways. Since January 1, 2025, we pay a monthly fee of $2,300 per vessel to V.Ships Greece and a fee of between $95 to $120 per crew member or around $2,300 to Global Seaways.

Employment of Our Fleet

As of the date of this report, the majority of 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, while two of our vessels earn a daily hire of a fixed floor rate plus a profit-sharing scheme based on a significant premium over the daily BCI. All of our index-linked time charter agreements have the option to convert the floating 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.

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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.

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, 2024, 2023 and 2022 were:

Customer
  
2024
    
2023
    
2022
  
A
   34
%

  28
%

  24
%

B
   22
%

  25
%

  17
%

C
   12
%

  18
%

  18
%

D
   -

    12
%

  15
%

Total
   68
%

  83
%

  74
%


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.

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Our ESG Initiatives

Environmental

We  aim to 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 high frequency remote performance monitoring systems and advanced data reporting 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.


 •
Nine of our vessels are retrofitted with Exhaust Gas Cleaning Systems (“EGCS”), that is, scrubbers, in order to comply with emissions standards, titled IMO-2020, set by the IMO.

•
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.

•
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.

•
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 Global Maritime Forum (GMF), the Hellenic Decarbonization committee of RINA Classification Society, Hellenic Marine Environment Protection Association, Intercargo’s Emissions Working Group, which refers to the IMO Correspondence Group on the Review of the Short-Term GHG Reduction Measure and we participate in Blue Visby Consortium to lower emissions while enhancing overall fleet efficiency.

•
We engage in thorough external assessments for ESG verification, intended to ensure our initiatives and operations align with established environmental, social, and governance standards. This external validation, conducted by CSE (Centre for Sustainability and Excellence), affirms our commitment to sustainability.

•
We have developed a compliance framework that allows for rapid adaptation to new environmental regulations and standards as they emerge globally.

•
We are active participants in several projects for the development and/or deployment of new green technologies and alternative fuels, including with respect to:

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

-
the installation of energy-saving devices, such as deck compressors, Variable Frequency Drives (VFDs), and LED lighting to optimize energy utilization and reduce unnecessary energy loss across the fleet;

-
the installation of hydrodynamic improvements by propulsion-enhancing devices such as Mewis Ducts, Propeller Boss Cap Fins (PBCFs), and Pre-Swirl Stators to reduce resistance and increase thrust;

-
piloting and evaluating latest technology silicone with biocides antifouling coatings and performing Computational Fluid Dynamics (CFD) studies and Hull Roughness Measurement assessments to reduce hull resistance and optimize hull performance and sustain fuel efficiency; and

-
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:

-
We provided 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.

-
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, Metacon S.A.,, Foundation WEGEMT and University of Strathclyde, aiming to physically demonstrate this groundbreaking technology’s applicability to the existing maritime fleet.

48
Social

We are focused on our efforts to continuously improve 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 providing 24/7 medical and psychological coverage for all seamen onboard the vessels, as well as direct assistance.

•
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 strive to 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.

•
We maintain strong internal controls intended to ensure robust risk management.

•
We intend to cultivate an open reporting culture with respect to any violations of the Code of Ethics.

•
In 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 maintain cybersecurity systems, processes, and policies intended 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.

49
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. On July 1, 2024, amendments to the ESP Code became effective, addressing inconsistencies on examination of ballast tanks at annual surveys for bulk carriers and oil tankers. We may need to make certain financial expenditures to comply with these amendments.

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, became 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 MEPC 78, 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%. MEPC 82 adopted additional amendments to Annex VI designating the Canadian Arctic and the Norwegian Sea as ECAs, which will become effective on March 1, 2026. 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.

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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, became 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. In March 2024, MEPC 81 agreed on a draft outline of an ‘IMO net-zero framework’ for cutting GHG emissions from international shipping, which lists regulations under MARPOL to be adopted or amended to allow a new global pricing mechanism for maritime GHG emissions. At the conclusion of MEPC 82, a draft legal text was used as a basis for ongoing talks about mid-term GHG reduction measures, which are expected to be adopted in 2025. The proposed mid-term measures include a goal-based marine fuel standard, phasing in the mandatory use of fuels with less GHG intensity, and a global GHG emission pricing mechanism.

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, became effective May 1, 2024.

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 became effective, addressing inconsistencies on examination of ballast tanks at annual surveys for bulk carriers and oil tankers.

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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 became 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.

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. Additional amendments to the BWM Convention, concerning the form of the Ballast Water Record Book, entered into force on February 1, 2025.

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.

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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.

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

General

Newly elected President Donald Trump has signed a number of executive orders and directives that are likely to have an impact on U.S. regulations.  For example, a regulatory freeze was issued, which permits the withdrawal of rules sent to be published and authorizes those in charge of federal agencies to delay for 60 days the effective date of rules that have been published but are not yet effective. This regulatory freeze impacts U.S. EPA decisions and proposed amendments.  Additionally federal agencies have placed employees on leave as a result of an executive order regarding diversity, equity and inclusion programs, which may impact implementation and enforcement of regulations. This and additional executive orders could impact regulatory requirements.

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.

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OPA contains statutory caps on liability and damages; such caps do not apply to direct clean-up costs. Effective March 2023, 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.

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.  The final rule became effective September 8, 2023 and operates to limit the Clean Water Act.

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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.

On September 20, 2024, the EPA finalized national standards of performance for non-recreational vessels 79-feet in length and longer with respect to incidental discharges and on October 9, 2024, these Vessel Incidental Discharge National Standards of Performance were published. Within two years of publication, the USCG is required to develop corresponding implementation regulations. Until such regulations are final, effective, and enforceable, vessels will continue to be subject to the VGP 2013 requirements and USCG ballast water regulations, including USCG technology for all vessels equipped with ballast water tanks bound for U.S. ports or entering U.S. waters. 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. Any upcoming rule changes may have a financial impact on our vessels and may result in our vessels being banned from calling in the U.S. 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  entered into force on January 1, 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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Additionally, on July 25, 2023, the European Council of the European Union adopted the FuelEU under the FuelEU Initiative of its “Fit-for-55” package which sets limitations on the acceptable yearly greenhouse gas intensity of the energy used by covered vessels. Among other things, the Maritime Fuel Regulation requires that greenhouse gas intensity of fuel used by covered vessels is reduced by 2% starting January 1, 2025, with additional reductions contemplated every five years (up to 80% by 2050). Shipping companies may enter into pooling mechanisms with other shipping companies in order to achieve compliance, bank surplus emissions and borrow compliance balances from future years.  A FuelEU Document of Compliance is required to be kept on board a vessel to show compliance by June 30, 2026. Both the ETS and FuelEU schemes have significant impacts on the management of the vessels calling to EU ports, by increasing the complexity and monitoring of, and costs associated with the operation of vessels and affecting the relationships with our time charterers.

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. In January 2025, President Trump signed an executive order to start the process of withdrawing the United States from the Paris Agreement; the withdrawal will take at least one year to complete.

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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.

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 became 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. At the conclusion of MEPC 82, a draft legal text was used as a basis for ongoing discussions about mid-term GHG reduction measures, which are expected to be adopted in 2025.  The proposed mid-term measures include a goal-based marine fuel standard, phasing in the mandatory use of fuels with less GHG intensity, and a global GHG emission pricing mechanism.

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, which was published on March 8, 2024. 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.

57
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.

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. We note that following the publication of the Omnibus package of proposals on February 26, 2025 which are designed to simplify EU regulations and cut red tape, the application of all reporting requirements in the CSRD for companies that are due to report in 2026 and 2027 is postponed and to 2028. If implemented into law, the Omnibus package will simplify compliance for SMEs and all companies with up to 1,000 employees and 50 million turnover will be outside the scope of the CSRD. For the companies in scope (above 1,000 employees and 50 million turnover), the Commission will adopt a delegated act to revise and simplify the existing sustainability reporting standards (ESRS). The proposed provisions in CSRD also create a derogation for companies with more than 1,000 employees and a turnover below EUR 450 million by making the reporting of Taxonomy voluntary, and also, put a stronger emphasis on transition finance by introducing the option of reporting on partial Taxonomy-alignment.

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, NKK).

58
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.

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.

59
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
Kaizen Shipping Co.
Republic of the Marshall Islands
Blue Shipping Co.
Republic of the Marshall Islands
Mei Shipping Co.
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.

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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;


•
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, the majority of 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, while two of our vessels earn a daily hire of a fixed floor rate plus a profit-sharing scheme based on a significant premium over the daily BCI. Out of the 21 long-term employment agreements in place, two were agreed during 2025, five were agreed during 2024, one was agreed during 2023, five were agreed during 2022 and the remaining eight 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, 2024 as compared to year ended December 31, 2023

(In thousands of U.S. Dollars, except for share and per share
data)
  
Year ended December 31,
    
Change
  
   
2024
    
2023
    
Amount
    
%
  
Revenues:
                        
Vessel revenue, net
    
164,881
      
107,036
      
57,845
      
54
%
Fees from related parties
    
2,578
      
3,198
      
(620
)
    
(19
)%
Revenue, net
    
167,459
      
110,234
      
57,225
      
52
%
                                 
Expenses:
                                
Voyage expenses
    
(3,297
)
    
(2,851
)
    
(446
)
    
16
%
Vessel operating expenses
    
(46,985
)
    
(42,260
)
    
(4,725
)
    
11
%
Management fees
    
(760
)
    
(700
)
    
(60
)
    
9
%
General and administration expenses
    
(23,971
)
    
(22,149
)
    
(1,822
)
    
8
%
Depreciation and amortization
    
(29,695
)
    
(28,831
)
    
(864
)
    
3
%
Gain on sale of vessel, net
    
-
      
8,094
      
(8,094
)
    
(100
)%
Loss on forward freight agreements, net
    
(177
)
    
(188
)
    
11
      
(6
)%
Operating income
    
62,574
      
21,349
      
41,225
      
193
%
Other income / (expenses), net:
                                
Interest and finance costs
    
(20,603
)
    
(20,694
)
    
91
      
-
  
Loss on extinguishment of debt
    
(653
)
    
(540
)
    
(113
)
    
21
%
Interest and other income
    
2,096
      
2,443
      
(347
)
    
(14
)%
Foreign currency exchange gain / (losses), net
    
58
      
(276
)
    
334
      
(121
)%
Total other expenses, net:
    
(19,102
)
    
(19,067
)
    
(35
)
    
-
  
Net income
    
43,472
      
2,282
      
41,190
      
1,805
%
                                 
Net income per common share
                                
Basic
    
2.12
      
0.12
                  
Diluted
    
2.11
      
0.12
                  
Weighted average number of common shares
outstanding
                                
Basic
    
19,745,379
      
18,394,419
                  
Diluted
    
19,879,876
      
18,442,688
                  

Vessel Revenue, Net – The increase was mainly attributable to the increase in prevailing charter rates and secondarily to the increase in operating days. We had 6,447 operating days in 2024, as compared to 5,953 operating days in 2023. The TCE rate increased by 43% in 2024 to $25,063, as compared to $17,501 in 2023. 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 2024 amount comprises of $2.1 million commercial and technical management fees and $0.5 million of sale and purchase commissions related to two vessels’ sale and purchase transactions. The 2023 amount comprises $1.8 million commercial and technical management fees and $1.4 million of sale and purchase commissions related to six vessels’ sale and purchase transactions. The decrease was partially offset by the increased commercial and technical management fees due to the increased number of vessels and revenues of United during 2024 in comparison to 2023.

Voyage Expenses – The increase was primarily attributable to the increase of the amount of brokerage commissions as a result of the increased revenue for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was also attributable to increased bunkers consumption as a result of the increase of repairs and off-hire days. We had 71 repair and off-hire days for the year ended December 31, 2024, as compared to 55 repair and off-hire days during the comparable period of 2023.

Vessel Operating Expenses - Vessel operating expenses amounted to $47.0 million in the year ended December 31, 2024, compared to $42.3 million in the year ended December 31, 2023. The increase was primarily attributable to the increase in ownership days. We had 6,518 ownership days in 2024 as compared to 6,008 ownership days in 2023.

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Management Fees - The increase was mainly attributable to the increase in ownership days. For the year ended December 31, 2024, we had 1,186 ownership days under third party technical management compared to 968 ownership days for the respective period in 2023.

General and Administration Expenses – The increase is mainly attributed to the costs associated with the complaint filed in March 2024, described below, which was partially offset from the decreased stock based compensation, a non-cash item, which was $4.8 million in 2024 for shares granted pursuant to our 2011 Equity Incentive Plan, compared to $8.9 million in 2023.

Depreciation and Amortization – For the year ended December 31, 2024, depreciation and amortization expense increased to $29.7 million from $28.8 million. The increase in depreciation expense is due to an increase in ownership days. We had 6,518 ownership days in 2024 compared to 6,008 days in 2023. This was partially offset by the increase of the scrap rate effective from January 1, 2024, resulting in lower depreciation expense in 2024 as compared to 2023 by $1.9 million.

Interest and Finance Costs – The weighted average interest rate on our outstanding debt for the twelve months ended 2024 and 2023 was approximately 7.74% and 7.62%, respectively, an increase driven by the significantly higher SOFR rates for the most part of 2024. Non-cash interest expense of amortization of deferred finance costs and debt discounts for the years ended December 31, 2024 and 2023 was $1.7 million and $2.2 million, respectively.

Loss on Extinguishment of Debt – The loss in the year ended December 31, 2024, is attributable to the full settlement of the CMBFL Sale and Leaseback, secured by the M/V Hellasship and M/V Patriotship (described below). 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.

Interest and Other Income – Interest and other income for the year ended December 31, 2024 consist of $0.9 million of insurance credits and insurance claims, and an amount of $1.2 million related to interest income from our short-term time deposits. The interest and other income for 2023 is related to $1.9 million of insurance credits and insurance claims, and an amount of $0.5 million related to interest income from our short-term time deposits.

Please see Item 5.A of our Form 20-F filed with the SEC on April 3, 2024, for a discussion of the year-to-year comparison between 2023 and 2022.

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, 2024, we had cash and cash equivalents of $21.9 million, as compared to $19.4 million as of December 31, 2023. Additionally, as of December 31, 2024, we had $13.1 million restricted cash, which includes $8.0 million as pledged capital, at the Company’s option, for one-month interest period as described in Note 4 of the consolidated financial statements. As of December 31, 2023, we had $5.6 million restricted cash.

Working capital is equal to current assets minus current liabilities, including the current portion of long-term debt. As of December 31, 2024, we had a working capital deficit of $15.7 million (which included an amount of $2.1 million relating to pre-collected revenue) as compared to a working capital deficit of $44.4 million as of December 31, 2023 (which included an amount of $2.1 million relating to pre-collected revenue). The December 31, 2024 deficit is primarily scheduled loan repayments for the next 12 months, amounting to $39.0 million. For the year ended December 31, 2024, the Company realized a net income of $43.5 million and generated cash flow from operations of $75.3 million.

As of December 31, 2024, we had outstanding borrowings of $261.5 million (including long-term debt and other financial liabilities) as compared to $236.4 million (including long-term debt, finance lease liability and other financial liabilities) as of December 31, 2023.

63
As of March 19, 2025, we had outstanding borrowings of $326.7 million (including long-term debt, finance lease liability and other financial liabilities). Our primary known and estimated liquidity needs for 2025 include obligations related to scheduled principal payments of outstanding borrowings and respective interest expenses payments, estimated drydocking expenditures, and the exercise of the purchase obligation for the M/V Blueship according to the bareboat charter agreed on January 23, 2025 amounting to $22.5 million. As of December 31, 2024, we were obligated to make fixed amortization payments totaling $39.0 million to December 31, 2025, related to the long-term bank debt and other financial liabilities. Our cash flow projections indicate that cash on hand and cash to be provided by operating activities, as well as cash which has been or will be provided through refinancing certain of our 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. 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. Additional information on our annual scheduled obligations under our long-term debt and other financial liabilities are described in “Loan Arrangements” below in Note 8 (“Long-Term Debt and Other Financial Liabilities”)  and in Note 17 (“Subsequent Events”) of our consolidated financial statements included in Item 18 of this annual report.

Cash Flows

(In thousands of US Dollars)
  
Year ended December 31,
  
   
2024
    
2023
    
2022
  
Cash Flow Data:
                  
Net cash provided by operating activities
    
75,278
      
31,323
      
37,286
  
Net cash (used in) / provided by investing activities
    
(79,372
)
    
17,745
      
(56,263
)
Net cash provided by / (used in) financing activities
    
14,082
      
(56,617
)
    
5,828
  

Year ended December 31, 2024, as compared to year ended December 31, 2023

Operating Activities: Net cash provided by operating activities in 2024 consisted of net income after non-cash items of $80.5 million and the decrease in working capital of $5.3 million. The major driver of the change of net cash provided by operating activities was the increase in revenues due to the increased operating days and the favorable movement in charter rates that prevailed in the market for 2024 as compared to 2023. 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.

Investing Activities: The 2024 cash outflow resulted from $70.7 million payments for vessels acquisitions and improvements, $4.4 million payments due from related party (United), $3.7 million advances for the acquisition of the M/V Meiship and $0.6 million for lease prepayments. 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 $7.0 million lease prepayments, $0.3 million payments for vessel improvements and $0.2 million for the purchase of other fixed assets.

Financing Activities: The 2024 cash inflow resulted mainly from $120.8 million proceeds from long-term debt and other financial liabilities and $5.8 million proceeds from issuance of common stock and warrants. The 2024 cash inflow was partially offset by the $73.0 million long-term debt and other financial liabilities payments, $21.8 million finance lease liabilities payments, $10.8 million dividend payments, $4.8 million for common stock repurchases and $2.6 million financing and stock issuance fees payments. 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.

Please see Item 5.A of our Form 20-F filed with the SEC on April 3, 2024 for a discussion of the year-to-year comparison between 2023 and 2022.

Loan Arrangements

New Loan Facilities during the year ended December 31, 2024

October 2024 Alpha Bank Loan Facility

On October 21, 2024, the Company entered into a facility agreement with Alpha Bank S.A. (“Alpha Bank”) for a $34.0 million term loan for the purpose of (i) refinancing the December 2022 Alpha Bank Loan Facility, which was secured by the M/V Paroship, (ii) financing the purchase option for the M/V Titanship and iii) providing liquidity for working capital purposes. The facility was drawn on October 22, 2024. The loan bears interest of term SOFR plus a margin of 2.40% per annum. The Company has the option to pledge cash deposits in the form of time deposit up to the aggregate amount of the loan outstanding at the time. For the part of the loan equal to the pledged amount, the margin will be reduced to 0.75% per annum for the term of the pledged time deposit, which as per the agreement shall coincide with an interest period of the facility. The term of the facility is five years, and the repayment schedule comprises of four quarterly installments of $1.2 million, followed by sixteen quarterly installments of $0.9 million and a final balloon of $14.8 million payable together with the final installment. In addition, the Company is required to maintain a security cover ratio (as defined therein) of not less than 125%. As of December 31, 2024, the outstanding amount under this facility was $34.0 million.

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Pre-existing Loan Facilities

Sinopac Loan Facility

On December 20, 2021, the Company 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 3.50% per annum 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, 2024, $9.8 million was outstanding under the facility.

June 2022 Alpha Bank Loan Facility

On June 21, 2022, the Company 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% per annum and the term is four years. The repayment schedule comprises of 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 was 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, 2024, $14.0 million was outstanding under the facility.

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 pre-existing loan facility with UniCredit Bank AG, which was secured by the M/Vs Premiership and Fellowship. The facility was initially divided into 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 14 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.

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 as per the terms of the October 2022 Danish Ship Finance Loan Facility. In particular, the Company is required to maintain a security cover ratio (as defined therein) 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, 2024, $28.0 million was outstanding under the facility.

Loan Facilities repaid during the years ended December 31, 2024 and December 31, 2023

ABB Loan Facility

On April 22, 2021, the Company 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 4.00% per annum and was repayable in 18 consecutive quarterly installments of $0.2 million each, with a final balloon payment of $3.9 million for Tranche A and $4.4 million 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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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 to partially finance the acquisition cost of the M/V Paroship. The loan facility bore interest of term SOFR plus a margin of 2.90% per annum and was repayable through four quarterly installments of $0.5 million followed by 12 quarterly installments of $0.4 million and a final balloon of $9.6 million payable together with the final installment. In addition, the Company was required to maintain a security requirement (as defined therein) of not less than 125%, while the borrower was required to maintain minimum liquidity of $0.5 million in its operating account. On October 22, 2024, the Company fully refinanced the outstanding amount of $13.2 million using the proceeds from the October 2024 Alpha Bank Loan Facility and all securities created in favor of Alpha Bank were irrevocably and unconditionally released.

New Loan Facilities after the year ended December 31, 2024

February 2025 Piraeus Bank Loan Facility

On February 24, 2025, the Company entered into a facility agreement with Piraeus Bank S.A. (“Piraeus Bank”) for a $53.6 million term loan for the purpose of (i) refinancing the June 2022 Piraeus Bank Loan Facility, which was secured by the M/Vs Worldship and Honorship, (ii) partially financing the acquisition cost of the M/V Meiship. The facility was drawn on February 25, 2025. The loan bears interest of term SOFR plus a margin of 2.05% per annum. The interest margin can be decreased by 0.05% per vessel based on the achievement of certain emission thresholds. The term of the facility is five years and the repayment schedule comprises of 20 quarterly installments of $1.5 million and a final balloon of $24.6 million payable together with the final installment. The Company is required to maintain a security cover ratio (as defined therein) of not less than 125% until the second anniversary of the drawdown date, and 130% thereafter until the maturity of the loan and a corporate leverage ratio (as defined therein), that will not be higher than 70% until maturity. In addition, the borrowers are required to maintain an aggregate minimum liquidity of $3.0 million in their operating accounts.

Loan Facilities repaid after the year ended December 31, 2024

June 2022 Piraeus Bank Loan Facility

On June 22, 2022, the Company entered into a facility agreement with Piraeus Bank 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 pre-existing 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 bore interest at term SOFR plus a margin of 3.00% per annum and a credit adjustment spread (as defined therein). As per a 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. On November 29, 2024, the Company entered into a second supplemental agreement to (i) extend the maturity to December 24, 2027, (ii) amend the repayment schedule by adding two quarterly installments of $0.8 million, (iii) reduce the pre-existing margin of 3.00% to 2.60% per annum with retroactive effect from June 25, 2024, and (iv) eliminate the credit adjustment spread with retroactive effect from June 25, 2024. The loan facility was repayable through four quarterly installments of $2.0 million, followed by two quarterly installments of $1.5 million, followed by 16 quarterly installments of $0.8 million and a final balloon of $15.0 million payable together with the final installment. The Company was 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 borrowers were required to maintain an aggregate minimum liquidity of $2.0 million in their operating accounts. As of December 31, 2024, $24.0 million was outstanding under the facility.

On February 27, 2025, the Company fully refinanced the outstanding amount of $24.0 million using the proceeds from the February 2025 Piraeus Bank Loan Facility and all securities created in favor of Piraeus Bank were irrevocably and unconditionally released.

August 2021 Alpha Bank Loan Facility

On August 9, 2021, the Company entered into a $44.1 million secured loan facility with 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. The facility was divided into two tranches, which were fully drawn on August 11, 2021: Tranche A of $31.1 million secured by the M/Vs Squireship and Lordship and Tranche B of $13.0 million secured by the M/V Friendship. On June 30, 2022, we entered into a supplemental agreement to the facility pursuant to which, it was cross collateralized with the June 2022 Alpha Bank Loan Facility.

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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 was 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 was 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 was required to maintain an average quarterly minimum free liquidity of $0.5 million, whereas the borrower owning the M/V Friendship was required to maintain $0.5 million at all times. In addition, the borrowers should ensure that the market value of the vessels plus any additional security should 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, with Tranche A bearing interest at term SOFR plus a margin of 3.55% per annum and Tranche B bearing interest at term SOFR plus a margin of 3.30% per annum. As of December 31, 2024, $16.2 million was outstanding under the facility.

On March 20, 2025, the Company fully refinanced the outstanding amount of $15.3 million under the facility using the proceeds from the Huarong Squireship Sale and Leaseback and the Huarong Friendship Sale and Leaseback and all securities created in favor of Alpha Bank were irrevocably and unconditionally released.

As of December 31, 2024, 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. The August 2021 Alpha Bank Loan Facility and June 2022 Alpha Bank Loan Facility were also secured by second priority collateral accounts pledge agreements, second preferred ship mortgages and second priority general assignment of the insurances, earnings and requisition compensation. 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.
 
Other Financial Liabilities: Sale and Leaseback Transactions

New Sale and Leaseback Activities during the year ended December 31, 2024

AVIC Iconship Sale and Leaseback

On June 4, 2024, the Company entered into a $21.9 million sale and leaseback agreement with Hao Cancer Limited (“Hao Cancer”), an affiliate of AVIC International Leasing Co., Ltd. to partially finance the acquisition of the M/V Iconship. The agreement became effective on June 11, 2024, upon the delivery of the vessel to the lessor. The Company sold and chartered back the vessel on a bareboat basis for a five-year period, having a purchase obligation at the end of the fifth year. The charterhire principal amortizes in four quarterly installments of $0.8 million followed by 16 quarterly installments of $0.5 million along with a purchase obligation of $11.5 million at the expiry of the bareboat charter, bearing an interest rate of 3-month term SOFR plus 2.55% per annum. The installments are paid in advance. The Company has continuous options to repurchase the vessel at any time of the bareboat charter period and at predetermined prices as set forth in the agreement. The Company is required to maintain a corporate leverage ratio (as defined therein), that will not be higher than 75% until maturity. The bareboat charterer is required to maintain a security cover ratio (as defined therein) of at least 120% of the charterhire principal. As of December 31, 2024, the amount outstanding under the AVIC Iconship Sale and Leaseback was $19.7 million.

AVIC Hellasship Sale and Leaseback

On June 4, 2024, the Company entered into a $19.5 million sale and leaseback agreement with Hao Leo Limited (“Hao Leo”), an affiliate of AVIC International Leasing Co., Ltd. to partially refinance the CMBFL Sale and Leaseback, secured by the M/Vs Hellaship and Patriotship. The agreement became effective on June 28, 2024, upon the delivery of the M/V Hellaship to the lessor. The Company sold and chartered back the vessel on a bareboat basis for a five-year period, having a purchase obligation at the end of the fifth year. The charterhire principal amortizes in four quarterly installments of $0.7 million followed by 16 quarterly installments of $0.4 million along with a purchase obligation of $10.5 million at the expiry of the bareboat charter, bearing an interest rate of 3-month term SOFR plus 2.55% per annum. The installments are paid in advance. The Company has continuous options to repurchase the vessel at any time of the bareboat charter period and at predetermined prices as set forth in the agreement. The Company is required to maintain a corporate leverage ratio (as defined therein), that will not be higher than 75% until maturity. The bareboat charterer is required to maintain a security cover ratio (as defined therein) of at least 120% of the charterhire principal. As of December 31, 2024, the amount outstanding under the AVIC Hellasship Sale and Leaseback was $17.4 million.

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AVIC Patriotship Sale and Leaseback

On June 4, 2024, the Company entered into a $16.9 million sale and leaseback agreement with Hao Virgo Limited (“Hao Virgo”), an affiliate of AVIC International Leasing Co., Ltd. to partially refinance the CMBFL Sale and Leaseback, secured by the M/Vs Hellasship and Patriotship. The agreement became effective on June 28, 2024, upon the delivery of the M/V Patriotship to the lessor. The Company sold and chartered back the vessel on a bareboat basis for a five-year period, having a purchase obligation at the end of the fifth year. The charterhire principal amortizes in four quarterly installments of $0.6 million followed by 16 quarterly installments of $0.3 million along with a purchase obligation of $9.5 million at the expiry of the bareboat charter, bearing an interest rate of 3-month term SOFR plus 2.55% per annum. The installments are paid in advance. The Company has continuous options to repurchase the vessel at any time of the bareboat charter period and at predetermined prices as set forth in the agreement. The Company is required to maintain a corporate leverage ratio (as defined therein), that will not be higher than 75% until maturity. The bareboat charterer is required to maintain a security cover ratio (as defined therein) of at least 120% of the charterhire principal. As of December 31, 2024, the amount outstanding under the AVIC Patriotship Sale and Leaseback was $15.1 million.

Hinode Sale and Leaseback

On August 29, 2024, the Company entered into a $28.5 million sale and leaseback agreement with Hinode Kaiun Co., Ltd and Sunmarine Maritime S.A. (collectively, “Hinode”) for the purpose of financing part of the acquisition cost of the M/V Kaizenship. The agreement became effective on October 1, 2024, upon the delivery of the M/V Kaizenship to the lessor. The Company sold and chartered back the vessel from Hinode on a bareboat basis for a six-year period, having a purchase obligation at the end of the sixth year. The charterhire principal amortizes in 72 consecutive monthly installments paid in advance at $0.3 million each, bearing an interest rate of 1-month term SOFR plus 2.50% per annum. Following the fourth 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 an obligation to purchase the vessel at the price of $8.3 million. The sale and leaseback agreement does not include any financial covenants or security value maintenance provisions. The charterhire principal as of December 31, 2024 was $27.3 million.

Existing Sale and Leaseback Activities

Flagship Cargill Sale and Leaseback

On May 11, 2021, the Company 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 2.00% 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 $1.1 million and $0.3  million as of December 31, 2024 and December 31, 2023, respectively. The charterhire principal amortizes in 60 monthly installments averaging approximately $0.2 million each along with a purchase obligation of $10.0 million at maturity. The charterhire principal, as of December 31, 2024, was $13.1 million.

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 32 consecutive quarterly installments averaging approximately $0.6 million along with a purchase obligation of $2.4 million at the expiry of the bareboat charter.  The charterhire principal, as of December 31, 2024, was $14.9 million.

Evahline Sale and Leaseback

On March 29, 2023, the Company 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 72 consecutive monthly installments paid in advance averaging approximately $0.3 million. The charterhire principal, as of December 31, 2024, was $13.5 million.

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Village Seven Sale and Leaseback

On April 24, 2023, the Company 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 the price of $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 53 consecutive monthly installments paid in advance of approximately $0.2 million. The charterhire principal, as of December 31, 2024, was $14.6 million.

Sale and Leaseback Activities repaid during the years ended December 31, 2023 and December 31, 2024

Hanchen Sale and Leaseback

On June 28, 2018, the Company 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 4.00% per annum. 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 charterhire principal was repayable in 32 consecutive equal quarterly installments of approximately $0.5 million along with a purchase obligation 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, the Company 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 was 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 had 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 60 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.

CMBFL Sale and Leaseback

On June 22, 2021, the Company entered into sale and leaseback agreements for the M/Vs Hellasship and Patriotship in the total amount of a $30.9 million with CMB Financial Leasing Co., Ltd. (“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 bore interest at term SOFR plus a margin of 3.50% per annum. The Company had 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. The charterhire principal was repayable in 20 quarterly installments of $0.8 million each along with the purchase obligation of $15.3 million at maturity. On June 28, 2024, the facility was refinanced by the AVIC Hellasship Sale and Leaseback and the AVIC Patriotship Sale and Leaseback, while the outstanding charterhire principal of $21.5 million was repaid in full.
 
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New Sale and Leaseback Activities after the year ended December 31, 2024

Huarong Squireship Sale and Leaseback

On March 13, 2025, the Company entered into a $18.0 million sale and leaseback agreement for the M/V Squireship with an affiliate of China Huarong Shipping Financial Leasing Company Ltd. (“Huarong”) to refinance Tranche A of the August 2021 Alpha Bank Loan Facility, secured by the M/V Squireship. The agreement became effective on March 20, 2025, upon the delivery of the M/V Squireship to the lessor. The Company sold and chartered back the vessel on a bareboat basis for a five-year period, having a purchase obligation at the end of the fifth year. The charterhire principal amortizes in 20 quarterly installments of $0.5 million along with a purchase obligation of $8.5 million at the expiry of the bareboat charter, bearing an interest rate of 3-month term SOFR plus 2.15% per annum. The Company has continuous options to repurchase the vessel at any time of the bareboat charter period at predetermined prices as set forth in the agreement following the first anniversary of the bareboat charter. The sale and leaseback agreement does not include any financial covenants or security value maintenance provisions.

Huarong Friendship Sale and Leaseback

On March 13, 2025, the Company entered into a $16.5 million sale and leaseback agreement for the M/V Friendship with an affiliate of Huarong to refinance Tranche B of the August 2021 Alpha Bank Loan Facility, secured by the M/V Friendship. The agreement became effective on March 20, 2025, upon the delivery of the M/V Friendship to the lessor. The Company sold and chartered back the vessel on a bareboat basis for a five-year period, having a purchase obligation at the end of the fifth year. The charterhire principal amortizes in 20 quarterly installments of $0.4 million along with a purchase obligation of $7.7 million at the expiry of the bareboat charter, bearing an interest rate of 3-month term SOFR plus 2.15% per annum. The Company has continuous options to repurchase the vessel at any time of the bareboat charter period at predetermined prices as set forth in the agreement following the first anniversary of the bareboat charter. The sale and leaseback agreement does not include any financial covenants or security value maintenance provisions.

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 5.50% 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.

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 2024, the BDI registered a low of 976 on December 19, 2024 and a high of 2,419 on March 18, 2024.

The historic performance of the BDI has been characterized by high volatility driven by changes in supply and demand for vessels. Over an extended period of time in recent years, the growth in the size of the dry bulk fleet has outpaced growth in vessel demand. Specifically, in the period from 2010 to 2024, 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 2024, the total size of the dry bulk fleet rose by about 3.0%, compared to demand growth of 4.9%. According to tentative projections, the total size of the dry bulk fleet is expected to rise by about 3.0% in 2025, compared to expected demand growth of 0.7%.

Capesize dry bulk vessels primarily transport iron ore and coal, with bauxite gaining a larger share year by year. China is a major player in the global iron ore market, importing more than 70% of seaborne iron ore. Australia and Brazil dominate exports, accounting for nearly 80% of global iron ore exports combined. Since 2000, the growth in China's iron ore and coal imports has significantly influenced the dry bulk market, though, this trend has slowed since 2015. On the bauxite front, China's bauxite imports are playing an increasingly vital role in Capesize markets. Infrastructure improvements in West Africa, led by Guinea, are expected to further boost bauxite trade, while, the giant Simandou iron ore project is anticipated to significantly increase iron ore exports from the region.
 
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The significant geopolitical developments, with most notable the recent conflicts in Ukraine and Gaza, along with escalating tariff disputes, have to a certain extent disrupted dry bulk seaborne trade, affecting global shipping routes, freight rates, and maritime security. Further to the direct impact on seaborne trade, these events affected the seaborne trade through their impact, realized or expected, on economic activity and inflation.
 
While the ongoing war in Ukraine, especially at its first stages, heightened economic uncertainty, it has had minimal impact on the dry bulk market so far. Initially, the effect ranged from neutral to positive, with shifts in ton-mile demand supporting the market. Our operations have not been materially affected, as our vessels do not currently operate in Russian or Ukrainian ports, and our suppliers and service providers have not faced restrictions or disruptions in their activities. We do not anticipate significant impacts in the future. Meanwhile, the 2023 Israel–Hamas war and subsequent missile attacks by the Houthis in the Red Sea have led vessels to divert via the Cape of Good Hope, which had a modestly positive impact on the dry bulk market by reducing supply. While the cease-fire declared on January 15, 2025 eased tensions in the region, attacks resumed in March 2025 and the future direction of the conflict remains highly uncertain and may continue to pose a significant safety hazard for vessels transiting the Red Sea. Finally, potential trade tariffs from the new US administration could pose risks for dry bulk vessels. The administration's proposed tariffs, including a 20% tariff on Chinese products, could lead to higher import costs and trade imbalances. These tariffs may affect shipping volumes, routes, and demand patterns, potentially impacting the dry bulk market. We may need to adjust our operational strategies to navigate these changes.
 
As the majority of our fleet is employed on index-linked charter contracts, and two of them two of our vessels earn a daily hire of a fixed floor rate plus a profit-sharing scheme based on the BCI index rate, 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).

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 repair days that our vessels are off-hire due to major repairs, dry-dockings, lay-up or special or intermediate surveys, which are the repair days. 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 off-hire days that our vessels are off-hire due to unforeseen circumstances, which are the off-hire days. Operating days include the idle 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.

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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.

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:
  
2024
    
2023
    
2022
  
                 
Ownership days
    
6,518
      
6,008
      
6,219
  
Available days(1)
    
6,485
      
6,008
      
5,954
  
Operating days(2)
    
6,447
      
5,953
      
5,905
  
Fleet utilization
    
98.9
%
    
99.1
%
    
95.0
%
                         
Average Daily Results:
                        
TCE rate(3)
  
$
25,063
    
$
17,501
    
$
20,040
  
Daily Vessel Operating Expenses(4)
  
$
6,976
    
$
6,879
    
$
6,819
  

(1)
During the year ended December 31, 2024, we had incurred 33 off-hire days for scheduled dry-dockings and ballast water treatment installation for our vessels. 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.

(2)
During the year ended December 31, 2024, we had incurred 38 off-hire days due to unforeseen circumstances. During the year ended December 31, 2023, we incurred 55 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)
  
2024
    
2023
    
2022
  
                   
Net revenues from vessels
  
$
164,881
    
$
107,036
    
$
122,629
  
Voyage expenses
    
(3,297
)
    
(2,851
)
    
(4,293
)
Time charter equivalent revenues
  
$
161,584
    
$
104,185
    
$
118,336
  
Operating days
    
6,447
      
5,953
      
5,905
  
Daily time charter equivalent rate
  
$
25,063
    
$
17,501
    
$
20,040
  

(4)
We include Daily Vessel Operating Expenses, which is a non GAAP metric, 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,
  
   
2024
    
2023
    
2022
  
                   
Vessel operating expenses
  
$
46,985
    
$
42,260
    
$
43,550
  
Pre-delivery expenses
    
(1,515
)
    
(933
)
    
(1,144
)
Vessel operating expenses before pre-delivery expenses
    
45,470
      
41,327
      
42,406
  
Ownership days
    
6,518
      
6,008
      
6,219
  
Daily Vessel Operating Expenses
  
$
6,976
    
$
6,879
    
$
6,819
  

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 owned vessels and vessels financed under sale and leaseback agreements. Reference to vessels for purposes of this discussion refers to both owned vessels and vessels financed under sale and leaseback agreements. We review our vessels for impairment whenever there are relevant 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 two 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, 2024 and 2023.

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, 2024 and 2023, 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 $2.6 million and $14.1 million, as of December 31, 2024 and 2023, 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, 2024 and 2023, 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, 2024 and 2023, respectively.

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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, 2024
(in millions of U.S. dollars)
      
December 31, 2023
(in millions of U.S. dollars)
  
Titanship
  
2011
    
207,855
      
28.2
        
29.6
  
Patriotship
  
2010
    
181,709
      
21.9
        
23.2
  
Dukeship
  
2010
    
181,453
      
28.4
        
30.3
*
Worldship
  
2012
    
181,415
      
28.3
        
29.9
  
Paroship
  
2012
    
181,415
      
27.8
        
29.4
  
Kaizenship
  
2012
    
181,396
      
35.1
*
      
-
  
Iconship
  
2013
    
181,392
      
32.7
        
-
  
Hellasship
  
2012
    
181,325
      
24.3
        
26.1
  
Honorship
  
2010
    
180,242
      
29.3
        
31.4
*
Fellowship
  
2010
    
179,701
      
22.6
        
24.2
  
Championship
  
2011
    
179,238
      
30.7
        
33.0
*
Partnership
  
2012
    
179,213
      
27.1
        
29.3
  
Knightship
  
2010
    
178,978
      
18.5
        
19.4
  
Lordship
  
2010
    
178,838
      
20.8
        
18.9
  
Friendship
  
2009
    
176,952
      
21.1
        
23.2
  
Flagship
  
2013
    
176,387
      
24.9
        
26.8
  
Geniuship
  
2010
    
170,057
      
19.4
        
20.8
  
Premiership
  
2010
    
170,024
      
22.6
        
24.0
  
Squireship
  
2010
    
170,018
      
25.3
        
26.9
*
TOTAL
                
489.0
        
446.4
  

*
Indicates dry bulk carrier vessels for which we believe, as of December 31, 2024 and 2023, 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.
 
As presented in Balance Sheets as of December 31, 2024 and 2023.

   
December 31,
2024
(in millions of U.S. dollars)
    
December 31,
2023
(in millions of U.S. dollars)
  
Vessels, net
    
484.5
      
410.4
  
Finance lease, right-of use asset
    
-
      
29.6
  
Deferred dry-docking charges, non-current
    
4.5
      
6.4
  
Total
    
489.0
      
446.4
  

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, 2024 and 2023 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 10% for Capesize vessels, we would not be required to recognize impairment. For the year ended December 31, 2024, indicators of impairment existed for one of our vessels as their carrying value plus any unamortized dry-docking costs was higher than their market value. The carrying value of the one vessel plus any unamortized dry-docking costs for which impairment indicators existed as at December 31, 2024, was $35.1 million.

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ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.
Directors and Senior Management

Our board of directors consists of five directorships divided into three classes. 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
  
53
  
Chairman, Chief Executive Officer & Director
  
A (term expires in 2025)
Stavros Gyftakis
  
46
  
Chief Financial Officer
    
Christina Anagnostara
  
54
  
Director*
  
B (term expires in 2026)
Elias Culucundis
  
82
  
Director*
  
A (term expires in 2025)
Dimitrios Anagnostopoulos
  
78
  
Director*
  
C (term expires in 2027)
Ioannis Kartsonas
  
53
  
Director*
  
C (term expires in 2027)

*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. Under his leadership, Seanergy has grown into a prominent Capesize dry bulk company with a carrying capacity of approximately 3.8 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, an international shipping company with a cargo carrying capacity of approximately 0.9 million dwt. 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, as well as financial institutions.  He 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. Mr. Tsantanis also serves in the board of directors of Breakwave Advisors LLC, the Commodity Trading Advisor (CTA) for the Breakwave Dry Bulk Shipping ETF (NYSE: BDRY) and the Breakwave Tanker Shipping ETF (NYSE: BWET) and is a fellow of the Institute of Chartered Shipbrokers.

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 the Company’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 19 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 the Company, 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 the Company’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 the Company, 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 CFO and Director 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.

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Elias Culucundis has been a member of our board of directors since our inception, he is the Chairman and a member of  the Company’s Compensation and Nominating Committees and a member of the Company’s Audit Committee. 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 Company’s Compensation and Nominating Committees. 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.

Ioannis Kartsonas has been a member of our board of directors since May 2017 and he is the Chairman and a member of the Company’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, the Commodity Trading Advisor (CTA) for the Breakwave Dry Bulk Shipping ETF (NYSE: BDRY) and the Breakwave Tanker Shipping ETF (NYSE: BWET). 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 this 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.

B.
Compensation

For the year ended December 31, 2024, the Company paid its executive officers and directors aggregate compensation of $2.0 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 2024. The aggregate director fees paid by the Company for the years ended December 31, 2024, 2023 and 2022 totaled $0.5 million, $0.5 million and $0.4 million, respectively.

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On January 12, 2011 our board of directors adopted the Seanergy Maritime Holdings Corp. 2011 Equity Incentive Plan, or the Plan. On March 27, 2024, the Plan, as previously amended, was amended and restated to increase the aggregate number of shares of common stock reserved for issuance under the Plan to 550,000 shares. On March 12, 2025, the Plan was further amended and restated to increase the aggregate number of shares of common stock reserved for issuance under the Plan to 600,000 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.

On March 27, 2024, the Compensation Committee granted an aggregate of 502,500 restricted shares of common stock pursuant to the Plan, of which 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, 142,150 shares vested on September 27, 2024, taking into consideration 1,100 forfeited shares, 108,000 shares will vest on March 27, 2025 and 144,000 shares will vest on September 26, 2025.

On March 12, 2025, the Compensation Committee granted an aggregate of 528,200 restricted shares of common stock pursuant to the Plan, of which 311,500 shares were granted to the non-executive members of the board of directors and to the executive officers and 216,700 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 $7.35. Of the total restricted shares issued, 125,300 shares vested on the date of the issuance, March 12, 2025, 160,000 shares will vest on September 12, 2025, 104,100 shares will vest on March 12, 2026 and 138,800 shares will vest on September 14, 2026.
 
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 recommending to the board of directors candidates for election.

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.

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D.
Employees

As of December 31, 2024, 2023 and 2022, 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, 2024, 2023 and 2022, we employed a support staff consisting of 93, 81 and 63 employees, respectively.

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.”


 F.
Disclosure of registrant’s action to recover erroneously awarded compensation

None.
 
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)
1,892,403 Common Shares
9.1%
Konstantinos Konstantakopoulos (3)
2,218,949 Common Shares
10.6%
George Economou (4)
1,859,096 Common Shares
8.9%
Stavros Gyftakis
237,031 Common Shares
1.1%
Christina Anagnostara
212,239 Common Shares
1.0%
Dimitrios Anagnostopoulos
113,333 Common Shares
0.5%
Elias Culucundis
86,800 Common Shares
0.4%
Ioannis Kartsonas
55,422 Common Shares
0.3%
Directors and executive officers as a group (6 individuals)
2,597,228 Common Shares
12.4%
Stamatios Tsantanis (2)
20,000 Series B Preferred Shares
100%

(1)
Calculation of percent of class beneficially owned by each such person is based on 20,902,365 common shares outstanding as of March 18, 2025 and any additional shares that such person may be deemed to beneficially own in accordance with Rule 13d-3 under the Exchange Act.

(2)
In addition to the common share ownership of Mr. Tsantanis, the number of common shares beneficially he owned includes 10,000 common shares underlying 100 American-style call option contracts, 50 of which expire on July 18, 2025 and 50 of which expire on October 17, 2025, all with a strike price of $8.00. In our annual reports for the years ended December 31, 2023, 2022, and 2021, Stamatios Tsantanis was reported to beneficially own 7.9%, 6.8% and 2.0%, respectively, of our then outstanding common shares. In addition, Mr. 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.

(3)
This information is derived from an Amendment No. 2 to Schedule 13G jointly filed with the Commission on March 13, 2025 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 report for the year ended December 31, 2023, Longshaw Maritime Investments S.A. and Konstantinos Konstantakopoulos were jointly reported to beneficially own 6.2% of our then outstanding common shares, and in our annual reports for the years ended December 31, 2022 and 2021 none of Konstantinos Konstantakopoulos or Longshaw Maritime Investments S.A.  were reported as an owners of five percent or more of our then outstanding common shares.

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(4)
This information is derived from an Amendment No. 8 to Schedule 13D jointly filed with the Commission on October 15, 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 report for the year ended December 31, 2023, Sphinx Investment Corp., Maryport Navigation Corp. and George Economou were jointly reported to beneficially own 9.1% of our then outstanding common shares, and in our annual reports for the years ended December 31, 2022 and 2021 none of Sphinx Investment Corp., Maryport Navigation Corp. or George Economou were reported as an owners of five percent or more of our then outstanding common shares.

B.
Related Party Transactions

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 term of United’s master management agreement with us expires on December 31, 2025. 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, Nisea and Synthesea, 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, for the M/V Nisea on September 10, 2024 and the M/V Synthesea on February 4, 2025. 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.

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.

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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. No vessels were sold during the year ended December 31, 2024.

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.

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, a shareholder filed a complaint in the High Court of the Republic of the Marshall Islands against the Company and its board of directors, alleging fiduciary duty violations related to the issuance of Series B Preferred Shares in December 2021. In October 2024, the High Court dismissed the lawsuit in its entirety.
 
The plaintiff has since filed a notice of appeal, which remains pending. While the outcome cannot be predicted with certainty, we believe we have substantial defenses and intend to vigorously defend against any appeal.
 
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.

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Dividend Policy

In August 2024, our board of directors adopted an updated dividend policy, pursuant to which we intend to distribute approximately 50% of our operating cash flow (the amount presented in our cash flow statement for the period in question, incorporating all operating expenses, variations in working capital, interest expenses and amounts paid for drydocking),
 

 •
Less: debt repayments (this amount captures loan facilities, finance lease liabilities and other financial liabilities),

•
Less: discretionary quarterly reserve (this amount will be assessed by the board of directors on a quarterly basis taking into consideration, among other things, (a) the share buybacks completed during the quarter, (b) anticipated capital expenditures such as vessel acquisitions and (c) a targeted liquidity buffer for all business purposes).
 
Any future dividends declared will be at the discretion and remain subject to approval of the board of directors each quarter, after its review of our financial condition and other factors, including but not limited to our earnings, prevailing charter market conditions, capital requirements, investment opportunities, limitations under our debt agreements and applicable provisions of Marshall Islands law. Our dividend policy and declaration and payment of dividends may be changed at any time and are subject to legally available funds and the board of directors’ determination that each declaration and payment is at the time in the best interests of the Company and its shareholders after review of our financial performance. 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. There can be no assurance that our board of directors will declare or pay any dividend in the future.

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.

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 on 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.

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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 represents the opinion of our United States and Marshall Islands tax counsel, Watson Farley & Williams LLP, and 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.”

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;

82

 •
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

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 2024 taxable year, we had U.S. source gross shipping income of approximately $1,763,648.

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 2024 taxable year, we believe that we qualified for the exemption from tax under Section 883 of the Code.

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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 2024 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.

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.

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Based on our analysis of our shareholdings during 2024, we believe we satisfy the Publicly-Traded Test for the entire 2024 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 2024 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


•
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 earn 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.

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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:


 •
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 2024 taxable year, nor do we expect to become, a PFIC with respect to our 2025 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. 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.

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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.

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.

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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).

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.  In the opinion of our Marshall Islands tax counsel, Watson Farley & Williams LLP, 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 our 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.

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F.
Dividends and paying agents

Not applicable.

G.
Statement by experts

Not applicable.

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.

J.
Annual Report to Security Holders

We are currently not required to provide an annual report to security holders in response to the requirements of Form 6-K.

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, 2024, we had aggregate variable-rate borrowings, of $248.4 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, 2024, assuming no changes to our borrowings after December 31, 2024, as to a 100-basis point increase in Term SOFR and reflects the additional interest expense.

Year
Amount
2025
$2.3 million
2026
$1.8 million
2027
$1.3 million
2028
$0.9 million
2029
$0.6 million
2030
$0.1 million
Total
$7.0 million

Foreign Currency Exchange Rate Risk

We generate all of our revenue in U.S. dollars.  The minority of our operating expenses (approximately 9% in 2024) and about half of our general and administration expenses (approximately 52% in 2024) 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 2024, these non-US dollar expenses represented 12% 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 as of December 31, 2024.

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, 2024).  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, 2024, 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, 2024.

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, 2024 has been audited by Deloitte Certified Public Accountants S.A., an independent registered public accounting firm, as stated in their report which appears below.

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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, 2024, 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, 2024, 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, 2024 of the Company and our report dated March 21, 2025, 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
March 21, 2025

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.

91
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, 2024 and for the fiscal year ended December 31, 2023. Audit, audit-related and non-audit services billed and accrued from Deloitte Certified Public Accountants S.A., as applicable are as follows:

   
2024
    
2023
  
Audit fees
  
$
479,000
    
$
318,000
  
Audit related fees
    
33,000
      
28,000
  
Tax fees
    
-
      
-
  
All other fees
    
-
      
-
  
Total fees
  
$
512,000
    
$
346,000
  

Audit fees for 2024 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, 2024. Audit fees also include fees for any services associated with audits of subsidiaries of the Company and with registration statements, reports and documents filed with the SEC. Audit related fees relate to services in connection with equity offerings and issuance of comfort letters. 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. 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.

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
  
February 1-29, 2024
    
115,312
    
$
7.29
      
115,312
    
$
24,059,991
  
June 1-30, 2024
    
80,000
    
$
10.97
      
80,000
    
$
23,180,991
  
July 1-31, 2024
    
86,903
    
$
10.18
      
86,903
    
$
22,294,701
  
September 1-30, 2024
    
10,000
    
$
10.00
      
10,000
    
$
22,194,453
  
October 1-31, 2024
    
111,826
    
$
10.37
      
111,826
    
$
21,032,653
  
November 1-30, 2024
    
85,000
    
$
8.80
      
85,000
    
$
20,282,766
  
December 1-31, 2024
    
30,000
    
$
7.64
      
30,000
    
$
20,053,003
  

92
In addition, the Company’s Chairman and Chief Executive Officer acquired, during 2024, a total of 33,400 common shares in the open market for an aggregate purchase price of approximately $0.3 million. In 2025, until March 18, 2025, he acquired a total of 34,000 common shares in the open market for an aggregate purchase price of approximately $0.2 million.

On December 13, 2023, the board of directors authorized the December 2023 Repurchase Plan. This plan expires on December 31, 2025 and, as of the date of this annual report, 532,411 common shares have been repurchased in the open market under this plan at an average price of $9.29 per share and approximately $20.1 million remains available for repurchases under this plan.

ITEM 16F.
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

None.

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.


•
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 our annual report on Form 20-F for the fiscal year ended December 31, 2023, filed with the SEC on April 3, 2024.

93
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.


(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.”

94
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-39 and are filed as part of this annual report.

95
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 12, 2025*
   
4.2
   
4.3
   
4.4
   
Form of Ship Technical Management Agreement with V.Ships Greece for the M/Vs Blueship and Meiship*
   
Form of Addendum to Ship Technical Management Agreements with V.Ships Greece in relation to emissions scheme obligations for the M/Vs Friendship, Titanship, Paroship and Championship*
   
Form of Guarantee in respect of the M/Vs Friendship, Titanship, Paroship, Championship, Blueship and Meiship between the registrant and V.Ships Greece in relation to emission scheme obligations*
   
4.8

96
4.9
   
4.10
   
4.11
   
4.12
   
4.13
   
4.14
   
4.15
   
4.16
   
4.17
   
4.18
   
4.19
   
4.20
   
4.21
   
4.22
97
4.23
   
4.24
   
4.25
   
4.26
   
4.27
   
4.28
   
4.29
   
4.30
   
4.31
   
4.32
   
Addendum No.2 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 May 22, 2024*
   
4.34
   
Bareboat Charter dated June 4, 2024 between Hao Leo Limited and Hellas Ocean Navigation Co. for the M/V Hellasship*
   
Bareboat Charter dated June 4, 2024 between Hao Virgo Limited and Patriot Shipping Co. for the M/V Patriotship*
   
Bareboat Charter dated June 4, 2024 between Hao Cancer Limited and Icon Ocean Navigation Co. for the M/V Iconship*
   
Form of Guarantee in respect of the M/Vs Hellasship, Patriotship and Iconship between the registrant and Hao Leo Limited, Hao Virgo Limited and Hao Cancer Limited, respectively*

98
Bareboat Charter dated August 29, 2024 between Hinode Kaiun Co., Ltd., Sunmarine Maritime S.A. and Kaizen Shipping Co. for the M/V Kaizenship*
   
Supplementary Agreement to the Bareboat Charter dated August 29, 2024 between Hinode Kaiun Co., Ltd., Sunmarine Maritime S.A. and Kaizen Shipping Co. for the M/V Kaizenship, dated August 29, 2024*
   
Guarantee in respect of the M/V Kaizenship dated August 29, 2024 of the registrant in favour of Hinode Kaiun Co., Ltd. and Sunmarine Maritime S.A.*
   
Facility Agreement dated October 21, 2024 between the registrant, Paros Ocean Navigation Co., Titan Ocean Navigation Co. and Alpha Bank S.A.*
   
Bareboat Charter dated January 23, 2025 between Bluejay Maritime S.A. and Blue Shipping Co. for the M/V Blueship*
   
Guarantee in respect of the M/V Blueship dated January 23, 2025 of the registrant in favour of Bluejay Maritime S.A.*
   
Facility Agreement dated February 24, 2025 between the registrant, World Shipping Co., Honor Shipping Co., Mei Shipping Co. and Piraeus Bank S.A.*
   
Bareboat Charter Agreement dated March 13, 2025 between Insight 22 Holding Limited and Squire Ocean Navigation Co. for the M/V Squireship*
   
Bareboat Charter Agreement dated March 13, 2025 between Insight 23 Holding Limited and Friend Ocean Navigation Co. for the M/V Friendship*
   
Form of Guarantee in respect of the M/Vs Squireship and Friendship between the registrant and Insight 22 Holding Limited and Insight 23 Holding Limited respectively*
   
4.49
   
4.50
   
4.51
   
4.52
   
4.53
   
4.54
   
4.55
   
List of Subsidiaries*

99
11.1
   
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*
   
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 Watson Farley & Williams LLP*
   
97.1
   
101
The following financial information from the registrant’s annual report on Form 20-F for the fiscal year ended December 31, 2024, formatted in Inline Extensible Business Reporting Language (XBRL)*
(1) Consolidated Balance Sheets as of December 31, 2024 and 2023;
(2) Consolidated Statements of Income/(loss) for the years ended December 31, 2024, 2023 and 2022;
(3) Consolidated Statements of Shareholders’ (Deficit) / Equity for the years ended December 31, 2024, 2023 and 2022; and
(4) Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022.
   
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*

*
Filed herewith
 
100
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: March 21, 2025
    

101
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
 
Page
   
F-2
   
F-3
   
F-4
   
F-5
   
F-6
   
F-7

F-1
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, 2024 and 2023, the related consolidated statements of income, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2024, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, 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, 2024, 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 March 21, 2025, 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 Matters

Critical audit matters are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ Deloitte Certified Public Accountants S.A.
Athens, Greece
March 21, 2025
We have served as the Company’s auditor since 2022.

F-2
Seanergy Maritime Holdings Corp.
Consolidated Balance Sheets
December 31, 2024 and 2023
(In thousands of US Dollars, except for share and per share data)

         
2024
    
2023
  
ASSETS
                  
Current assets:
                  
Cash and cash equivalents
    
4
      
21,866
      
19,378
  
Restricted cash
    
4, 8
      
8,050
      
50
  
Accounts receivable trade, net
    
13
      
404
      
896
  
Inventories
    
5
      
1,693
      
1,559
  
Prepaid expenses
            
3,528
      
1,238
  
Due from related parties
     3       7,271       308  
Other current assets
     2      
2,113
      
1,656
  
Intangible assets
     2       973       -  
Total current assets
            
45,898
      
25,085
  
                         
Fixed assets:
                        
Vessels, net
    
6
      
484,492
      
410,476
  
Advances for vessel acquisition
     6
      3,700       -  
Finance lease, right-of-use asset
     7       -       29,562  
Other fixed assets, net
            
267
      
423
  
Total fixed assets
            
488,459
      
440,461
  
                         
Other non-current assets:
                        
Deferred charges and other investments, non-current
    
2
      
6,127
      
6,397
  
Intangible assets, non-current
     2
      60       -  
Restricted cash, non-current
    
4, 8
      
5,000
      
5,500
  
Operating lease, right-of-use asset
    
11
      
282
      
405
  
Other non-current assets
            
27
      
29
  
TOTAL ASSETS
            
545,853
      
477,877
  
                         
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 $1,627 and $1,175, respectively
    
8
      
37,401
      
31,780
  
Finance lease liability, current
     7
       -
       21,778
  
Trade accounts and other payables
            
7,112
      
5,489
  
Accrued liabilities
     2      
9,626
      
7,736
  
Operating lease liability, current
    
11
      
93
      
105
  
Deferred revenue
    
13
      
2,094
      
2,136
  
Other current liabilities     12, 17
       5,297       491  
Total current liabilities
            
61,623
      
69,515
  
                         
Non-current liabilities:
                        
Long-term debt and other financial liabilities, net of current portion and deferred finance costs and debt discounts of $2,237 and $1,746, respectively
    
8
      
220,186
      
179,010
  
Operating lease liability, non-current
    
11
      
189
      
300
  
Deferred revenue, non-current
    
13
      
67
      
254
  
Other liabilities, non-current
     8      
1,609
      
353
  
Total liabilities
            
283,674
      
249,432
  
                         
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, 2024 and 2023, respectively
     12
      
-
      
-
  
Common stock, $0.0001 par value; 500,000,000 authorized shares as at December 31, 2024 and 2023; 20,374,165 and 19,636,352 shares issued and outstanding as at December 31, 2024 and 2023, respectively
    
12
      
2
      
2
  
Additional paid-in capital
    
12
      
595,947
      
590,129
  
Accumulated deficit
            
(333,770
)
    
(361,686
)
Total stockholders’ equity
            
262,179
      
228,445
  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
            
545,853
      
477,877
  

The accompanying notes are an integral part of these consolidated financial statements.

F-3
Seanergy Maritime Holdings Corp.
Consolidated Statements of Income
For the years ended December 31, 2024, 2023 and 2022
(In thousands of US Dollars, except for share and per share data)


  
Notes
    
2024
    
2023
    
2022
  
Vessel revenue, net
     13       164,881       107,036       122,629  
Fees from related parties
     3       2,578       3,198       2,391  
Revenue, net
            
167,459
      
110,234
      
125,020
  
Expenses:
                                
Voyage expenses
    

     
(3,297
)
    
(2,851
)
    
(4,293
)
Vessel operating expenses
            
(46,985
)
    
(42,260
)
    
(43,550
)
Management fees
            
(760
)
    
(700
)
    
(1,368
)
General and administration expenses
     16      
(23,971
)
    
(22,149
)
    
(17,412
)
Amortization of deferred dry-docking costs
     2      
(4,202
)
    
(4,155
)
    
(4,880
)
Depreciation and amortization
     6, 7
      
(25,493
)
    
(24,676
)
    
(23,417
)
Gain on sale of vessels, net from related party
     3, 6
      
-
       8,094
      
-
  
Loss on forward freight agreements, net
             (177 )     (188 )     (417 )
Operating income
            
62,574
      
21,349
      
29,683
  
Other income / (expenses), net:
                                
Interest and finance costs
    
14
      
(20,603
)
    
(20,694
)
    
(15,332
)
Loss on extinguishment of debt
     8
       (653 )     (540 )     (1,291 )
Interest and other income
     3       2,096
       2,443
       1,361
  
Gain on spin-off of United Maritime Corporation
     3      
-
      
-
      
2,800
  
Foreign currency exchange gains/ (losses), net
            
58
      
(276
)
    
(10
)
Total other expenses, net
            
(19,102
)
    
(19,067
)
    
(12,472
)
Net income before income taxes
            
43,472
      
2,282
      
17,211
  
Income taxes
            
-
      
-
      
28
  
Net income
            
43,472
      
2,282
      
17,239
  
 
                                
Net income per common share, basic
    
15
      
2.12
      
0.12
      
0.97
  
Net income per common share, diluted
     15
       2.11
       0.12       0.96  

                               
Weighted average common shares outstanding, basic
    
15
      
19,745,379
      
18,394,419
      
17,439,033
  
Weighted average common shares outstanding, diluted
     15
       19,879,876
       18,442,688
       17,684,048
  

The accompanying notes are an integral part of these consolidated financial statements.

F-4
Seanergy Maritime Holdings Corp.
Consolidated Statements of Stockholders’ Equity
For the years ended December 31, 2024, 2023 and 2022
 (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, 2022
    
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
  
Issuance of common stock (including the exercise of warrants) (Note 12)
    -       -       180,000       -       885       -       885  
ATM offering (Note 12)
     -       -       576,120       -       4,796       -       4,796  
Stock based compensation (Note 16)
     -       -       500,734       -       4,987       -       4,987  
Dividends ($0.76 per share) (Note 12)
     -       -       -       -       -       (15,556 )     (15,556 )
Share buyback (Note 12)
    -       -       (519,041 )     -       (4,850 )     -       (4,850 )
Net income     -       -       -       -       -       43,472       43,472  
Balance, December 31, 2024
    20,000       -       20,374,165       2       595,947       (333,770 )     262,179  

The accompanying notes are an integral part of these consolidated financial statements.

F-5
Seanergy Maritime Holdings Corp.
Consolidated Statements of Cash Flows
For the years ended December 31, 2024, 2023 and 2022
(In thousands of US Dollars)

   
2024
    
2023
    
2022
  
Cash flows from operating activities:
                  
Net income
    
43,472
      
2,282
      
17,239
  
Adjustments to reconcile net income to net cash provided by operating activities:
                        
Depreciation and amortization
    
25,493
      
24,676
      
23,417
  
Amortization of deferred dry-docking costs
    
4,202
      
4,155
      
4,880
  
Amortization of deferred finance costs and debt discounts
    
1,726
      
2,241
      
2,859
  
Stock based compensation
    
4,987
      
9,147
      
7,185
  
Loss on extinguishment of debt
    
653
      
540
      
1,291
  
Gain on spin-off of United Maritime Corporation
    
-
      
-
      
(2,800
)
Gain on sale of vessels, net
    
-
      
(8,094
)
    
-
  
Changes in operating assets and liabilities:
                        
Accounts receivable trade, net
    
492
      
(176
)
    
(839
)
Due (to) / from related parties
     (2,552 )     521       (595 )
Inventories
    
(135
)
    
219
      
(840
)
Prepaid expenses
    
(2,291
)
    
(141
)
    
22
  
Other current assets
    
(457
)
    
(581
)
    
(641
)
Deferred charges, non-current
     (2,953 )     (211 )     (9,494 )
Intangible assets, current
     (973 )     -       -  
Intangible assets, non-current
     (60 )     -       -  
Other non-current assets
    
2
      
(1
)
    
2
  
Trade accounts and other payables
    
1,475
      
(2,222
)
    
(589
)
Accrued liabilities
    
2,427
      
(1,155
)
    
2,155
  
Deferred revenue
    
(42
)
    
(96
)
    
(5,463
)
Deferred revenue, non-current
    
(188
)
    
219
      
(503
)
Net cash provided by operating activities
    
75,278
      
31,323
      
37,286
  
Cash flows from investing activities:
                        
Proceeds from sale of vessels/assets held for sale
    
-
      
23,910
      
-
  
Due from related parties
     (4,411 )     -       -  
Vessels acquisitions and improvements
    
(70,651
)
    
(314
)
    
(70,321
)
Advances for vessel acquisition
     (3,700 )     -       -  
Finance lease prepayments and other initial direct costs
    
(610
)
    
(7,000
)
    
-
  
Deposits assets, non-current
    
-
      
1,325
      
-
  
Advances from related party from sale of vessels
    
-
      
-
      
12,688
  
Investment in Series C preferred shares
    
-
      
-
      
(10,000
)
Proceeds from redemption of Series C preferred shares
    
-
      
-
      
10,000
  
Term deposits
    
-
      
-
      
1,500
  
Purchase of other fixed assets
    
-
      
(176
)
    
(130
)
Net cash (used in) / provided by investing activities
    
(79,372
)
    
17,745
      
(56,263
)
Cash flows from financing activities:
                        
Proceeds from issuance of common stock and warrants, net of underwriters fees and commissions
    
5,823
      
8
      
70
  
Proceeds from long-term debt and other financial liabilities
    
120,779
      
53,750
      
124,800
  
Proceeds from other non-current liabilities
     503       -       -  
Repayments of long-term debt and other financial liabilities
    
(73,038
)
    
(88,742
)
    
(89,698
)
Repayments of convertible notes
    
-
      
(11,165
)
    
(10,000
)
Payments for repurchase of common stock
    
(4,850
)
    
(1,679
)
    
-
  
Payments for repurchase of warrants
    
-
      
(808
)
    
-
  
Dividend payments
    
(10,750
)
    
(6,031
)
    
(17,924
)
Payments of financing and stock issuance costs
    
(2,607
)
    
(1,318
)
    
(1,420
)
Payments of finance lease liabilities
    
(21,778
)
    
(609
)
    
-
  
Payments of fractional shares due to reverse stock split
    
-
      
(23
)
    
-
  
Net cash provided by / (used in) financing activities
    
14,082
      
(56,617
)
    
5,828
  
Net increase / (decrease) in cash and cash equivalents and restricted cash
    
9,988
      
(7,549
)
    
(13,149
)
Cash and cash equivalents and restricted cash at beginning of period
    
24,928
      
32,477
      
45,626
  
Cash and cash equivalents and restricted cash at end of period
    
34,916
      
24,928
      
32,477
  
 
                        
SUPPLEMENTAL CASH FLOW INFORMATION
                        
Cash paid during the period for:
                        
Interest
    
20,051
      
18,429
      
11,710
  
 
                        
Noncash investing activities:
                        
Vessels acquisitions and improvements
    
119
      
-
      
1,015
  
Finance lease, right-of use assets and initial direct costs
    
-
       22,997       -  
 
                        
Noncash financing activities:
                        
Dividends declared but not paid (Note 12)
    
5,297
      
491
      
4,548
  
Financing and stock issuance costs
    
857
      
562
      
-
  

The accompanying notes are an integral part of these consolidated financial statements.

F-6
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 December 31, 2024, the Company had a working capital deficit of $15,725, which includes an amount of $2,094 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, 2024, the Company realized a net income of $43,472 and generated cash flow from operations of $75,278. The Company believes it has the ability to continue as a going concern over the next twelve months following the date of the issuance of these financial statements and finance its obligations as they come due via cash from operations and through refinancing its existing loan agreements (Note 17).

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-7
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. (7)
   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
  
March 9, 2022
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, 2024
Patriot Shipping Co. (1)(5)
  
Marshall Islands
  
Patriotship
  
June 1, 2021
  
June 28, 2024
Good Ocean Navigation Co. (1)(4)
  
Liberia
  
Goodship
  
August 7, 2020
  
February 10, 2023
Traders Shipping Co. (1)(4)
  
Marshall Islands
  
Tradership
  
June 9, 2021
  
February 28, 2023
Gladiator Shipping Co. (1)(4)
  
Marshall Islands
  
Gladiatorship
  
September 29, 2015
  
October 11, 2018
Partner Shipping Co. Limited (1)(4)
  
Malta
  
Partnership
  
May 31, 2017
  
March 9, 2022
Titan Ocean Navigation Co. (1)   Liberia   Titanship   October 24, 2024   N/A
Icon Ocean Navigation Co. (1)(5)
   Liberia   Iconship   June 11, 2024   June 11, 2024
Kaizen Shipping Co. (1)(5)
   Marshall Islands   Kaizenship   October 1, 2024   October 1, 2024
Martinique International Corp. (1)(6)
  
British Virgin Islands
  
Bremen Max
  
September 11, 2008
  
March 7, 2014
Harbour Business International Corp. (1)(6)
  
British Virgin Islands
  
Hamburg Max
  
September 25, 2008
  
March 10, 2014
Atsea Ventures Corp. (1)
   Marshall 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)
Dormant companies since 2018
(7)
Subsidiary and vessel contributed to United following the Spin-off on July 5, 2022

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)
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.

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)
(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.
 
(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, 2024 and 2023.

(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, 2024 and 2023 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.

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)
In addition, other investments, relating to vessels’ equipment not yet installed, are included in “Deferred charges and other 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 (LWT). 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.

Effective January 1, 2024 and following management’s reassessment of the residual value of the vessels, the estimated scrap value per LWT was increased to $0.35 from $0.30. Management’s estimate was based on the average demolition prices prevailing in the market in the last 15 years. The effect of this change in accounting estimate, which did not require retrospective application as per ASC 250 “Accounting Changes and Error Corrections”, was to increase net income for the year ended December 31, 2024, by $1,925 or by $0.09 for basic and diluted earnings per share based on the Company’s existing fleet as of January 1, 2024.
 
(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, 2024, indicators of impairment existed for one of the Company’s vessels as its carrying value plus any unamortized dry-docking costs was higher than its market value. The carrying value of the Company’s vessel plus any unamortized dry-docking costs for which impairment indicators existed as at December 31, 2024, was $35,083. From the impairment exercise performed, the undiscounted projected operating cash flows expected to be generated by the use of this vessel were higher than the vessel’s carrying value, plus any unamortized dry-docking costs, and thus the Company concluded that no impairment charge should be recorded.

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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)
(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.

(q)
Revenue Recognition

Revenues are generated from time 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. 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.

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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)
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.

Fees from related parties: The Company accounts for fees from related parties in accordance with ASC 606. Seanergy earns, either directly or through a subsidiary, a fixed fee per day and month in accordance with the master management agreement and technical management agreements, respectively, entered into with United and certain of United’s subsidiaries (Note 3). In addition, according to the commercial management agreement entered into with a subsidiary of United, the Company earns through a subsidiary a fixed percentage on the gross freight, demurrage and charter hire, except for any vessels that are chartered-out to the Company (Note 3). These commission fees are recognized ratably over the duration of the charter or voyage period. Seanergy earns also a fee equal to 1% of the contract price of any vessel bought or sold or bareboat chartered by them on United’s behalf. Fees related to sale and purchase or bareboat chartering services are recognized upon completion of the relevant purchase or sale.

(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.

(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, 2024, 2023 and 2022, an amount of $6,108, $3,869 and $4,554, respectively, was included in “Vessel revenue, net” related to address 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. 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.

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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)
(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.

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 2025 by Seanergy Management for 2024 is estimated at $152 and is included in “General and administration expenses”. The contribution paid in the years ended December 2024 and 2023 was $103 and $110, 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 2025 by Seanergy Shipmanagement for 2024 is estimated at $NIL. No contribution was paid by Seanergy Shipmanagement in the years ended December 2024 and 2023.

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 2024, the Publicly-Traded Test for the entire 2024 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 2024 taxable year. Effectively, the Company and each of its subsidiaries qualify for this statutory tax exemption for the 2024 taxable year.

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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)
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 2024, 2023 and 2022, 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.

(aa)
Segment Reporting

The Company reports financial information and evaluates its operations by total charter revenues and not by the length of vessel employment, customer, type of charter or geographical area as the charterer is free to trade the vessel worldwide and as a result, the disclosure of geographic information is impracticable. Although revenue can be identified for different types of charters, management does not identify expenses, profitability or other financial information for different charters. The Chief Operating Decision Maker (or “CODM”) assesses performance for the vessel operations segment and decides how to allocate resources based on consolidated net income.  As a result, management, including the CODM, reviewed operating results solely by revenue and consolidated operating results of the fleet, and thus the Company had determined that it had only one operating and reportable segment and has identified the Chairman and Chief Executive Officer as the CODM in accordance with ASC 280, “Segment Reporting”. The accounting policies applied to the reportable segment are the same as those used in the preparation of the Company’s consolidated financial statements.

(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.

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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)
(ad)
Convertible Notes

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 the Company’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, 2024 and 2023. The Company’s FFAs do not qualify for hedge accounting and therefore gains or losses are recognized in the consolidated statements of income under “Loss on forward freight agreements, net” and in the consolidated statements of cash flows in changes in operating assets and liabilities.

(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” 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 United Maritime Corporation 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.

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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)
(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.

(ai)
European Union’s Emissions Trading System

The European Union’s Emissions Trading System (“EU ETS”) was extended to cover the maritime transportation industry commencing January 1, 2024, with application to all large ships of at least 5,000 gross tonnage. Vessels are in the scope of the scheme for those voyages which begin, end or pass through European Union (“EU”) waters. The Company has an obligation to surrender EU ETS emissions allowances (“EUAs”) to the EU for each ton of reported greenhouse gas emissions in the scope of the EU ETS. Where vessels are operated under tiime charters, such EUAs due to the EU are provided to the Company by the charterers pursuant to the terms of the time charter agreement.

Liabilities in relation to EUAs obligations under the EU ETS, but not yet surrendered, are categorized as “Accrued liabilities” if settlement to the EU is due within 12 months of the reporting date, and within “Other non-current liabilities” if settlement is due after 12 months of the reporting date. The liability is based on the total number of EUAs required to be submitted based on level of emissions occurring on or prior to the period end. For partially completed voyages, the value of the liability is initially estimated using the cost of EUAs that may be required to be submitted at the reporting date and updated following completion of the voyage. An equal and opposite asset is recognized in relation to EUAs due from charterers, within “Other current assets” or in case when the charterer has provided the Company with EUAs within “Intangible assets”. EUAs purchased and held by the Company intended to be used to settle its EUA obligations are categorized as intangible assets, valued at cost. These assets are not subject to amortization but are reviewed for impairment at the reporting date.

As of December 31, 2024, the Company recorded $698 in “Other current assets” and $1,671 in “Accrued liabilities”.

As of December 31, 2024, the Company held EUAs amounting to $973 that were provided by the charterers and are expected to be surrendered in September 2025 and are classified as “Intangible assets” in the accompanying consolidated balance sheets. The Company also held EUAs amounting to $60 to settle future EUA obligations and are classified as “Intangible assets, non-current” in the accompanying consolidated balance sheets as of December 31, 2024.

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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)
Recent Accounting Pronouncements Adopted

The Company has adopted ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, 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 CODM. 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. The Company has one reportable segment and has identified the Chairman and Chief Executive Officer as the CODM in accordance with ASC 280. The accounting policies applied to the reportable segment  are the same as those used in the preparation of the Company’s consolidated financial statements. The adoption of ASU No. 2023-07 did not have any effect in the Company’s consolidated financial statements, other than the disclosures made in this paragraph.

Recent Accounting Pronouncements



In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”. The standard is intended to require more detailed disclosure about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements. The Company is currently assessing the impact this standard will have on its consolidated financial statements.



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 Maritime Corporation (“United” or the “Spin-Off”).

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 consolidated  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 $0.3 per vessel per day to Seanergy. The initial term of the master management agreement with United expired on December 31, 2024, and was automatically extended for an additional 12-month period. 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.


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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)
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 thereafter a fixed management fee of $14 per month for five United vessels.

On July 19, 2024, the technical management of one of United’s vessel with Seanergy Shipmanagement was terminated due to her sale and on September 10, 2024, Seanergy Shipmanagement undertook the technical management of another United vessel. As of December 31, 2024, Seanergy Shipmanagement earns a fixed management fee of $14 per month for the aforesaid services for five United 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.


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 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, but not including any vessels bought, sold or bareboat chartered from or to Seanergy, or any vessel sale relating to a sale and leaseback transaction.

Right of First Refusal Agreement


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 the Company. United exercised such right with respect to the sale of the Goodship and the Tradership (Note 6). 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).

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.
 

During the years ended December 31, 2024, 2023 and 2022, fees charged from Seanergy to United in relation to the above-mentioned services amounted to $2,578, $3,198 and $2,391 respectively and are presented in “Fees from related parties” in the consolidated statements of income.



As of December 31, 2024 and 2023, balance due from United amounted to $7,271 and $308, respectively, and is included in “Due from related parties” in the accompanying consolidated balance sheets.

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)
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,
2024
    
December 31,
2023
  
Cash and cash equivalents
    
21,866
      
19,378
  
Restricted cash
    
8,050
      
50
  
Restricted cash, non-current
    
5,000
      
5,500
  
Cash and cash equivalents and restricted cash
    
34,916
      
24,928
  


Restricted cash as of December 31, 2024 includes $8,000 as pledged, at the Company’s option, capital for a one-month interest period as per the October 2024 Alpha Bank Loan Facility (Note 8) and $50 of restricted deposits pledged as collateral for credit cards balances with one of the Company’s financial institutions. Restricted cash, non-current as of December 31, 2024 includes $2,000 of minimum liquidity requirements as per the June 2022 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). Minimum liquidity, not legally restricted, as of December 31, 2024, of $9,500 as per the Company’s credit facilities’ covenants, is included in “Cash and cash equivalents” in the consolidated balance sheet.

Restricted cash as of December 31, 2023 includes $50 of restricted deposits pledged as collateral regarding credit cards balances with one of the Company’s financial institutions. Restricted cash, non-current as of December 31, 2023 includes $2,000 of minimum liquidity requirements as per the June 2022 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). 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” in the consolidated balance sheet.

5.
Inventories:

As of December 31, 2024 and 2023, inventories amounted to $1,693 and $1,559, respectively, in the accompanying consolidated balance sheets related to lubricants.

6.
Vessels, Net:
 
The amounts in the accompanying consolidated balance sheets are analyzed as follows:
 
 
  
December 31,
2024
    
December 31,
2023
  
Cost:
            
Beginning balance
    
511,935
      
511,516
  
- Additions
    
98,202
      
419
  
Ending balance
    
610,137
      
511,935
  
 
                
Accumulated depreciation:
                
Beginning balance
    
(101,459
)
    
(77,383
)
- Depreciation for the period
    
(24,186
)
    
(24,076
)
Ending balance
    
(125,645
)
    
(101,459
)
 
                
Net book value
    
484,492
      
410,476
  

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)
Acquisitions

On October 24, 2024, following the exercise of the purchase option of the Titanship bareboat charter, an amount of $28,412 was derecognized from “Finance Lease, Right-of-use Assets” and recognized as “Vessels, net” (Note 7) in the accompanying consolidated balance sheet. The acquisition of the vessel was financed through the October 2024 Alpha Bank Loan Facility (Note 8).

On March 18, 2024, the Company entered into an agreement with an unaffiliated party for the purchase of a secondhand Capesize vessel, the Kaizenship, for a gross purchase price of $35,600. The vessel was delivered to the Company on October 1, 2024. The acquisition of the vessel was financed with cash on hand and through the Hinode Sale and Leaseback (Note 8).

On February 5, 2024, the Company entered into an agreement with an unaffiliated third party for the purchase of a secondhand Capesize vessel, the Iconship, for a gross purchase price of $33,660. The vessel was delivered to the Company on June 11, 2024. The acquisition of the vessel was financed with cash on hand and through the AVIC Iconship Sale and Leaseback (Note 8).

During the years ended December 31, 2024 and 2023, amounts of $530 and $419, 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.

As of December 31, 2024, all vessels, except for the vessels financed through other financial liabilities for which ownership is held by the lessors (i.e., sale and leaseback agreements) are mortgaged to secure loans of the Company (Note 8).

Advances for vessel acquisition

On December 12, 2024, the Company entered into an agreement with an unaffiliated party for the purchase of a secondhand Newcastlemax vessel, the Berge Kita, which was renamed Meiship, for a gross purchase price of $37,000. On December 13, 2024, the Company paid an advance of $3,700 according to terms of the agreement and the advance is included in “Advances for vessel acquisition” in the consolidated balance sheet as of December 31, 2024. Delivery of the vessel took place on February 27, 2025 (Note 17). The acquisition of the vessel was financed with cash on hand and through the 2025 Piraeus Bank Loan Facility (Note 17).

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. During the year ended 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. During the year ended 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.

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)
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, the 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 was 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 had an option to purchase the vessel for $20,210, which the Company exercised. The Company had 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 included $610 of initial direct costs. The amount of the right-of-use-assets was amortized on a straight-line method based on the estimated useful life of the vessel. On October 24, 2024, the Company exercised the purchase option for the Titanship and purchased the vessel at a price of $20,210 which was financed from the October 2024 Alpha Bank Loan Facility (Note 8). Following the exercise of the purchase option, the unamortized balance of $28,412 was transferred from “Finance Lease, Right-of-use Assets” to “Vessels, net” (Note 6) in the accompanying consolidated balance sheet.

During the years ended December 31, 2024 and 2023, the amortization of the right-of-use asset amounted to $1,150 and $436, respectively, 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 $898 and $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.

8.
Long-Term Debt and Other Financial Liabilities:
 

The amounts in the accompanying consolidated balance sheets are analyzed as follows:


   
December 31,
2024
   
December 31,
2023
 
Long-term debt and other financial liabilities
    
261,451
      
213,711
  
Less: Deferred finance costs and debt discounts
    
(3,864
)
    
(2,921
)
Total
    
257,587
      
210,790
  
Less - current portion
    
(37,401
)
    
(31,780
)
Long-term portion
    
220,186
      
179,010
  



Senior long-term debt


New Loan Facilities during the year ended December 31, 2024



October 2024 Alpha Bank Loan Facility


On October 21, 2024, the Company entered into a facility agreement with Alpha Bank S.A. for a $34,000 term loan for the purpose of (i) refinancing the December 2022 Alpha Bank Loan Facility, which was secured by the Paroship, (ii) financing the purchase option for the Titanship (Note 7) and iii) providing liquidity for working capital purposes. The facility was drawn on October 22, 2024. The loan bears interest of term SOFR plus a margin of 2.40% per annum. The Company has the option to pledge cash deposits in the form of time deposit up to the aggregate amount of the loan outstanding at the time. For the part of the loan equal to the pledged amount, the margin will be reduced to 0.75% per annum, for the term of the pledged time deposit, which as per the agreement shall coincide with an interest period of the facility. The term of the facility is five years and the repayment schedule comprises of four quarterly installments of $1,200, followed by sixteen quarterly installments of $900 and a final balloon of $14,800 payable together with the final installment. In addition, the Company is required to maintain a security cover ratio (as defined therein) of not less than 125%. The refinancing of the December 2022 Alpha Bank Loan Facility was assessed based on the provisions of ASC 470-50 and was treated as debt modification. As of December 31, 2024, the outstanding amount under this facility was $34,000.

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)
Loan Facilities amended during the year ended December 31, 2024



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 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 was effective from July 27, 2023. The loan bore interest of term SOFR plus a margin of 3.00% per annum and a credit adjustment spread (as defined therein). As per a 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. On November 29, 2024, the Company entered into a second supplemental agreement to (i) extend the maturity to December 24, 2027, (ii) amend the repayment schedule by adding two quarterly installments of $750, (iii) reduce the pre-existing margin of 3.00% to 2.60% per annum with retroactive effect from June 25, 2024, and (iv) eliminate the credit adjustment spread with retroactive effect from June 25, 2024. The facility was repayable through four quarterly installments of $2,000, followed by two quarterly installments of $1,500, followed by sixteen quarterly installments of $750 and a final balloon of $15,000 payable together with the final installment. In addition, the Company was 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 borrowers were required to maintain an aggregate minimum liquidity of $2,000 in their operating accounts. On February 27, 2025, the Company fully refinanced the June 2022 Piraeus Bank Loan Facility (Note 17). As of December 31, 2024, the amount outstanding under the facility was $24,000.


Pre – Existing Loan Facilities

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.  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. 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 was repayable through seven quarterly installments of $601 each and a final balloon of $10,284 payable together with the final installment and Tranche B was 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. 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 bore interest at term SOFR plus a margin of 3.55% per annum and Tranche B bore interest at term SOFR plus a margin of 3.30% per annum. The borrower owning the Squireship was required to maintain an average quarterly minimum free liquidity of $500, whereas the borrower owning the Friendship was required to maintain $500 at all times. In addition, the borrowers should ensure that the market value of the vessels plus any additional security should not be less than 125% of the aggregate outstanding loan amount. On March 20, 2025, the Company fully refinanced the August 2021 Alpha Bank Loan Facility (Note 17). As of December 31, 2024, the amount outstanding under the facility was $16,178.

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)
Sinopac Loan Facility

On December 20, 2021, the Company entered into a $15,000 loan facility with Sinopac Capital International (HK) Limited to refinance a part (Tranche B) of a pre-existing facility with Entrust Global 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 3.50% per annum. The principal is repayable 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, 2024, the amount outstanding under the facility was $9,800.

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% per annum 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 was cross collateralized with the August 2021 Alpha Bank Loan Facility until it was fully repaid (Note 17). As of December 31, 2024, the amount outstanding under the facility was $14,000.


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 a pre-existing loan facility with UniCredit Bank AG, which was secured by the Premiership and the Fellowship. The October 2022 Danish Ship Finance Loan Facility, initially divided in two equal tranches, bears interest of SOFR plus a margin of 2.50% per annum 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 A/S 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. 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, 2024, the amount outstanding under the facility was $27,969.

As of December 31, 2024, 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. The August 2021 Alpha Bank Loan Facility and June 2022 Alpha Bank Loan Facility were also secured by second priority collateral accounts pledge agreements, second preferred ship mortgages and second priority general assignment of the insurances, earnings and requisition compensation. 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.

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)
Loan Facilities repaid during the years ended December 31, 2024 and 2023


ABB Loan Facility


On April 22, 2021, the Company entered into a facility agreement with Aegean Baltic Bank S.A. (“ABB”) 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 4.00% per annum. Tranche A was repayable in 18 quarterly installments of $200 each, with the last installment, together with a balloon installment of $3,900. 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.

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 was equal to 2.90% plus term SOFR per annum. The principal was scheduled to be repaid over a four-year term, through four quarterly installments of $525, followed by twelve quarterly installments of $400 and a final balloon of $9,600 payable together with the last installment. In addition, the Company was required to maintain a security requirement (as defined therein) of not less than 125%. The borrower was required to maintain minimum liquidity of $500 in its operating account. On October 22, 2024, the Company refinanced the facility using the proceeds from the October 2024 Alpha Bank Loan Facility and all securities created in favor of Alpha Bank were irrevocably and unconditionally released.


Other Financial Liabilities - Sale and Leaseback Transactions


New Sale and Leaseback Activities during the year ended December 31, 2024

AVIC Iconship Sale and Leaseback

On June 4, 2024, the Company entered into a $21,905 sale and leaseback agreement with Hao Cancer Limited (“Hao Cancer”), an affiliate of AVIC International Leasing Co., Ltd. to partially finance the acquisition of the Iconship. The agreement became effective on June 11, 2024, upon the delivery of the vessel to the lessor. Under ASC 842-40, the transaction was accounted for as a financial liability, as control remains with the Company and the Iconship continues to be recorded as an asset on the Company’s balance sheet. The Company sold and chartered back the vessel on a bareboat basis for a five-year period, having a purchase obligation at the end of the fifth year. The charterhire principal amortizes in four quarterly installments of $750 followed by sixteen quarterly installments of $463 along with a purchase obligation of $11,500 at the expiry of the bareboat charter, bearing an interest rate of 3-month term SOFR plus 2.55% per annum. The installments are paid in advance. The Company has continuous options to repurchase the vessel at any time of the bareboat charter period and at predetermined prices as set forth in the agreement. The Company is required to maintain a corporate leverage ratio (as defined therein), that will not be higher than 75% until maturity. The bareboat charterer is required to maintain a security cover ratio (as defined therein) of at least 120% of the charterhire principal. As of December 31, 2024, the amount outstanding under the AVIC Iconship Sale and Leaseback was $19,655.

AVIC Hellasship Sale and Leaseback

On June 4, 2024, the Company entered into a $19,500 sale and leaseback agreement with Hao Leo Limited (“Hao Leo”), an affiliate of AVIC International Leasing Co., Ltd. to partially refinance the CMBFL Sale and Leaseback, secured by the Hellasship and Patriotship. The agreement became effective on June 28, 2024, upon the delivery of the Hellasship to the lessor. The Company sold and chartered back the vessel 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 Hellaship continues to be recorded as an asset on the Company’s balance sheet. The charterhire principal amortizes in four quarterly installments of $700 followed by sixteen quarterly installments of $388 along with a purchase obligation of $10,500 at the expiry of the bareboat charter, bearing an interest rate of 3-month term SOFR plus 2.55% per annum. The installments are paid in advance. The Company has continuous options to repurchase the vessel at any time of the bareboat charter period and at predetermined prices as set forth in the agreement. The Company is required to maintain a corporate leverage ratio (as defined therein), that will not be higher than 75% until maturity. The bareboat charterer is required to maintain a security cover ratio (as defined therein) of at least 120% of the charterhire principal. As of December 31, 2024, the amount outstanding under the AVIC Hellasship Sale and Leaseback was $17,400.

F-25
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)
AVIC Patriotship Sale and Leaseback

On June 4, 2024, the Company entered into a $16,874 sale and leaseback agreement with Hao Virgo Limited (“Hao Virgo”), an affiliate of AVIC International Leasing Co., Ltd. to partially refinance the CMBFL Sale and Leaseback, secured by the Hellasship and Patriotship. The agreement became effective on June 28, 2024, upon the delivery of the Patriotship to the lessor. The Company sold and chartered back the vessel 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 Patriotship continues to be recorded as an asset on the Company’s balance sheet. The charterhire principal amortizes in four quarterly installments of $600 followed by sixteen quarterly installments of $311 along with a purchase obligation of $9,500 at the expiry of the bareboat charter, bearing an interest rate of 3-month term SOFR plus 2.55% per annum. The installments are paid in advance. The Company has continuous options to repurchase the vessel at any time of the bareboat charter period and at predetermined prices as set forth in the agreement. The Company is required to maintain a corporate leverage ratio (as defined therein), that will not be higher than 75% until maturity. The bareboat charterer is required to maintain a security cover ratio (as defined therein) of at least 120% of the charterhire principal. As of December 31, 2024, the amount outstanding under the AVIC Patriotship Sale and Leaseback was $15,074.

Hinode Sale and Leaseback

On August 29, 2024, the Company entered into a $28,500 sale and leaseback agreement with Hinode Kaiun Co., Ltd and Sunmarine Maritime S.A. (collectively, “Hinode”) for the purpose of financing part of the acquisition cost of the Kaizenship. The agreement became effective on October 1, 2024, upon the delivery of the Kaizenship to the lessor. The Company sold and chartered back the vessel from Hinode on a bareboat basis for a six-year period, having a purchase obligation at the end of the sixth year. Under ASC 842-40, the transaction was accounted for as financial liability, as control remains with the Company and the Kaizenship will continue to be recorded as an asset on the Company’s consolidated balance sheet. The charterhire principal amortizes in seventy-two consecutive monthly installments paid in advance at $288 each, bearing an interest rate of 1-month term SOFR plus 2.50% per annum. Following the fourth 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 an obligation to purchase the vessel at the price of $8,250. The sale and leaseback agreement does not include any financial covenants or security value maintenance provisions. The charterhire principal as of December 31, 2024 was $27,347.

Existing Sale and Leaseback Agreements


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 $1,106 and $353 as of December 31, 2024 and December 31, 2023, respectively, and is included under “Other liabilities – non-current” in the consolidated balance sheets. 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, 2024, was $13,095.

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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)
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 a pre-existing loan facility with Amsterdam Trade Bank N.V. 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 SOFR plus a margin of 2.90% 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, 2024 was $14,925.


Evahline Sale and Leaseback


On March 29, 2023, the Company 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, 2024 was $13,458.


Village Seven Sale and Leaseback


On April 24, 2023, the Company 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 the price of $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, 2024 was $14,551.



Sale and Leasebacks Agreements repaid during the year ended December 31, 2024 and 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 4.00% per annum. Under ASC 842-40, the transaction was accounted for as a financial liability. 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 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”). 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.


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 CMB Financial Leasing (“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 bore interest at term SOFR plus a margin of 3.50% per annum. The Company had 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. The charterhire principal was repayable in twenty quarterly installments of $780 each along with a balloon payment of $15,300 at maturity. On June 28, 2024, the facility was refinanced by the AVIC Hellasship Sale and Leaseback and the AVIC Patriotship Sale and Leaseback, while the outstanding charterhire principal of $21,540 was repaid in full. As a result of the refinancing, an amount of $649 relating to deferred finance costs and other related expenses was recognized as loss on debt extinguishment according to the debt extinguishment guidance of ASC 470-50 “Debt Modifications and Extinguishments” and was included in “Loss on extinguishment of debt” in the consolidated statements of income.



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, 2024, the Company was in compliance with all covenants relating to its loan facilities as at that date.


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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)

As of December 31, 2024, eleven of the Company’s owned vessels, having a net carrying value of $282,687, were subject to first and second priority mortgages as collaterals to their long-term debt facilities. In addition, the Company’s eight bareboat chartered vessels, having a net carrying value of $201,805 as of December 31, 2024, have been financed through sale and leaseback agreements. As is in typical leaseback agreements, the title of ownership is held by the relevant lenders.



The annual principal payments required to be made after December 31, 2024 for all long-term debt and other financial liabilities, taking into consideration subsequent developments described in Note 17 for the facility agreement with Piraeus Bank and the sale and leaseback agreements with Huarong, are as follows:



Twelve-month periods ending December 31,
  
Amount
  
2025
   
39,027
  
2026
   
63,698
  
2027
   
43,630
  
2028
   
27,645
  
Thereafter
    
87,451
  
Total
    
261,451
  

9.
Convertible Notes:

September 7, 2015 - $21,165 Revolving Convertible Note (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 a 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. Following the adoption of ASU No. 2020-06, an amount of $11,165 was outstanding under the Second JDH Note as of December 31, 2022. 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.

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.

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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)
(b)
Fair Value of Financial Instruments

The principal financial assets of the Company consist of Cash and cash equivalents, restricted cash, accounts receivable trade and other current assets. The principal financial liabilities of the Company consist of trade accounts and other payables long-term debt and other financial liabilities.

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. The carrying value approximates the fair market value for interest bearing cash classified as restricted cash, non-current.
b.
Long-term debt and other financial liabilities: The carrying value of long-term debt and other financial liabilities with variable interest rates (obtained through Level 2 inputs of the fair value hierarchy) 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 for the Flagship Cargill Sale and Leaseback are similar to those that could be procured as of December 31, 2024, and the carrying value of $13,095 is 3.3% higher than the fair market value of $12,665. 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

Legal proceedings are a common aspect of the shipping industry and may arise from regulatory matters, contract disputes, or other operational issues. These may include claims related to charter agreements, insurance matters, or regulatory compliance. In March 2024, a shareholder filed a lawsuit in the High Court of the Republic of the Marshall Islands against the Company and its board, alleging fiduciary duty violations concerning the Series B Preferred Shares issued in December 2021. The plaintiff sought, among other things, to cancel the Series B Preferred Shares and claim unspecified damages. In October 2024, the High Court dismissed the lawsuit in full, and in November 2024 the plaintiff filed a notice of appeal, which is currently pending before the Supreme Court of the Republic of the Marshall Islands. While the outcome cannot be predicted with certainty, the Company believes it has substantial defenses and intends to vigorously defend against any appeal.
 
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.

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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)
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 11 to 60 months and extension periods vary from 7 to 26 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 on 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, 2024. 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
  
2025
    
121,214
  
2026
    
33,511
  
2027     2,486
  
Total
    
157,211
  

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 ($10.4 based on the Euro/U.S. dollar exchange rate of €1.0000: $1.0393 as of December 31, 2024). 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, 2024, 2023 and 2022 was $165, $166 and $161, 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, 2024:

Twelve-month periods ending December 31,
  
Amount
  
2025
    
125
  
2026
    
125
  
2027
    
125
  
2028
    
31
  
Total
    
406
  
Less: discount based on incremental borrowing rate
    
(124
)
Present value of operating lease liability
    
282
  
 
        
Operating lease liability, current
    
93
  
Operating lease liability, non-current
    
189
  
Present value of operating lease liability
    
282
  

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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)
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, 2024 and 2023, 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, 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.

(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.
 
ii)
Dividends

On November 1, 2024, the Company declared a regular quarterly dividend of $0.26 per share for the third quarter of 2024 which was paid on January 10, 2025 to all shareholders of record as of December 27, 2024 (Note 17). The dividend amounting to $5,297 is included in “Other current liabilities” as of December 31, 2024 in the accompanying consolidated balance sheet.

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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)
On August 5, 2024, the Company declared a regular quarterly cash dividend of $0.25 per share for the second quarter of 2024, to all shareholders of record as of September 27, 2024. The dividends amounting to $5,150 were paid on October 10, 2024.

On May 14, 2024, the Company declared a regular quarterly cash dividend of $0.025 per share for the first quarter of 2024 and a special dividend of $0.125 per share, to all shareholders of record as of June 25, 2024. The dividends amounting to $3,108 were paid on July 10, 2024.

On March 5, 2024, the Company declared a regular quarterly dividend of $0.025 per share for the fourth quarter of 2023 and a special dividend of $0.075 per share, to all shareholders of record as of March 25, 2024. The dividends amounting to $2,001 were paid on April 10, 2024.


On November 13, 2023, the Company declared a regular quarterly dividend of $0.025 per share for the third quarter of 2023, to all shareholders of record as of December 22, 2023. The dividends amounting to $491 were paid on January 10, 2024 and was included in “Other current liabilities” as of December 31, 2023 in the accompanying consolidated balance sheet.



On August 1, 2023, the Company declared a regular quarterly dividend of $0.025 per share for the second quarter of 2023 to all shareholders of record as of September 22, 2023. The dividends amounting to $492 were paid on October 6, 2023.



On May 24, 2023, the Company declared a regular quarterly dividend of $0.025 per share for the first quarter of 2023 to all shareholders of record as of June 22, 2023. The dividends amounting to $491 were paid on July 6, 2023.



On March 13, 2023, the Company declared a regular quarterly dividend of $0.025 per share for the fourth quarter of 2022 to all shareholders of record as of March 31, 2023. The dividends amounting to $500 were paid on April 25, 2023.



Total dividends declared in the years ended December 31, 2024 and December 31, 2023 amounted to $15,556 and $1,974, 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. During the year ended December 31, 2024, 576,120 shares have been sold from the Company for gross proceeds of $5,091 under the “at-the-market” offering program and are shown in consolidated statement of stockholder’s equity as of December 31, 2024, net of $295 offering expenses.

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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)
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”). 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, 2024, 2023 and 2022, no Rights were exercised.

iv)
Buybacks

In December 2023, the Board of Directors of the Company authorized a new share repurchase plan under which the Company may repurchase up to $25,000 of its outstanding common shares, convertible note or warrants (the “December 2023 Repurchase Plan”). During 2024, the Company repurchased 519,041 of its outstanding common shares at an average price of approximately $9.35 per share for a total of $4,850, inclusive of commissions and fees. All the repurchased shares have been cancelled as of December 31, 2024.

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 the December 2023 Repurchase Plan. 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 were made during the year 2022.

(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, 2024, 180,000 shares were issued from Class E warrants, for proceeds of $885. During the year ended December 31, 2023, no shares were issued from Class E warrants exercises. As of December 31, 2024, 2,694,599 of Class E warrants remain outstanding at an exercise price of $4.39 per share.

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)
Class D Warrants

As of December 31, 2024, the number of remaining Class D Warrants outstanding is 4,368,750 at an exercise price of $13.39 per share.

Representative Warrants

The Company’s previously issued Representative Warrants expired according to their terms in April 2023.

As of December 31, 2024, 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
    
269,459
  
Total
    
296,763
  

13.
Vessel Revenue:

Vessel revenue, net for the year ended December 31, 2024, 2023 and 2022 was $164,881, $107,036 and $122,629, respectively, and was derived from time charters.

As of December 31, 2024 and 2023, the trade accounts receivable was $404 and $896, respectively, and related to time charters.

The current portion of Deferred revenue as of December 31, 2024 and 2023 was $2,094 and $2,136, respectively, 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, 2024 and 2023 was $67 and $254, respectively, 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.

Charterers individually accounting for more than 10% of revenues during the years ended December 31, 2024, 2023 and 2022 were:

Customer
  
2024
     2023
     2022
  
A
    
34
%
    
28
%
    
24
%
B
    
22
%
    
25
%
    
17
%
C
    
12
%
    
18
%
    
18
%
D
    
-
   
12
%
    
15
%
Total
    
68
%
    
83
%
    
74
%

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)
14.
Interest and Finance Costs:

Interest and finance costs are analyzed as follows:

 
  
Year ended December 31,
  
 
  
2024
    
2023
    
2022
  
Interest on long-term debt and other financial liabilities
    
17,838
      
17,864
      
11,609
  
Interest on finance lease liability
     898       219       -  
Convertible notes interest expense
     -       178       694  
Amortization of deferred finance costs and debt discounts
    
1,726
      
2,155
      
2,575
  
Amortization of deferred finance costs and debt discounts (shares issued to third party - non-cash)
    
-
      
86
      
284
  
Other
    
141
      
192
      
170
  
Total
    
20,603
      
20,694
      
15,332
  

15.
Earnings per Share:

The calculation of net income per common share is summarized below:

 
For the years ended December 31,
  
   
2024
    
2023
    
2022
  
                   
Net income
  
$
43,472
    
$
2,282
    
$
17,239
  
Less: Dividends to non-vested participating securities
    
(549
)
    
(61
)
    
(227
)
Less: Undistributed earnings to non-vested participating securities
    
(980
)
    
(10
)
    
(105
)
Net income attributable to common shareholders, basic
  
$
41,943
    
$
2,211
    
$
16,907
  
                         
Undistributed earnings to non-vested participating securities
  
$
980
    
$
10
    
$
105
  
Undistributed earnings reallocated to non-vested participating securities
    
(974
)
    
(10
)
    
(51
)
Net income attributable to common shareholders, diluted
  
$
41,949
    
$
2,211
    
$
16,961
  
                         
Weighted average common shares outstanding, basic
    
19,745,379
      
18,394,419
      
17,439,033
  
Effect of dilutive securities:
                        
   Warrants
    
134,497
      
48,269
      
245,015
  
Weighted average common shares outstanding, diluted
    
19,879,876
      
18,442,688
      
17,684,048
  
                         
Net income per share attributable to common shareholders, basic
  
$
2.12
    
$
0.12
    
$
0.97
  
Net income per share attributable to common shareholders, diluted
  
$
2.11
    
$
0.12
     $ 0.96  

As of December 31, 2024 and 2023, 252,000 and 607,580, respectively, 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, 2024 and 2023, because to do so would have anti-dilutive effect, are 27,304 and 27,304 incremental shares, respectively, of unexercised warrants that are out-of-the money as of the reporting date (Note 12), calculated with the treasury stock method.

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)
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.

16.
Equity Incentive Plan:

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. On 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, 142,150 shares vested on September 27, 2024, taking into consideration 1,100 forfeited shares, 108,000 shares will vest on March 27, 2025 and 144,000 shares will vest on September 26, 2025.

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 607,247 shares vested on October 1, 2024, taking into consideration 666 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.

The related expense for shares granted to the Company’s board of directors and certain of its employees for the years ended December 31, 2024, 2023 and 2022, amounted to $4,843, $8,852 and $6,973, respectively, and is included under general and administration expenses. The related expense for shares granted to non-employees for the years ended December 31, 2024, 2023 and 2022, amounted to $144, $295 and $212, respectively, and is included under voyage expenses.

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)
Restricted shares during 2024 and 2023 are analyzed as follows:

 
  
Number
of Shares
    
Weighted
Average Grant
Date Price
  
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
  
Granted
    
502,500
      
8.42
  
Vested
    
(856,314
)
    
6.15
  
Forfeited
    
(1,766
)
    
7.21
  
Outstanding at December 31, 2024
    
252,000
    
$
7.36
  

The unrecognized cost for the non-vested shares granted to the Company’s board of directors, certain of its employees and the Company’s commercial manager, a non-employee, as of December 31, 2024 and 2023 amounted to $808 and $1,572, respectively. On December 31, 2024, 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 0.74 years.
 
17.
Subsequent Events:

On January 10, 2025, the Company paid a regular quarterly cash dividend of $0.26 per share for the third quarter of 2024 to all shareholders of record as of December 27, 2024 (Note 12).

On January 23, 2025, the Company entered into a six-month bareboat charter agreement with an unaffiliated third party for a secondhand Capesize vessel, which was renamed Blueship. The Company advanced a down payment of $4,000 which was paid upon signing of the agreement and another down payment of $4,000 upon delivery of the vessel to the Company, which took place on February 25, 2025. The Company will be paying a daily charter rate of $10 over the period of the bareboat charter, while it also has a purchase obligation of $22,500 at the end of the bareboat charter.

On February 24, 2025, the Company entered into a facility agreement with Piraeus Bank S.A. for a $53,560 term loan for the purpose of (i) refinancing the June 2022 Piraeus Bank Loan Facility, which was secured by the Worldship and Honorship and (ii) partially financing the acquisition cost of the Meiship. The facility was drawn on February 25, 2025. The loan bears interest of term SOFR plus a margin of 2.05% per annum. The interest margin can be decreased by 0.05% per vessel based on the achievement of certain emission thresholds. The term is five years and the repayment schedule comprises twenty quarterly installments of $1,450 and a final balloon of $24,560 payable together with the final installment. The Company is required to maintain a corporate leverage ratio (as defined therein), that will not be higher than 70% until maturity. In addition, the Company is required to maintain a security cover ratio (as defined therein) of not less than 125% until the second anniversary of the facility’s utilization date and 130% thereafter until the maturity of the loan. The borrowers were required to maintain an aggregate minimum liquidity of $3,000 in their operating accounts.

On February 27, 2025, the Company took delivery of the Meiship (Note 5).

On March 5, 2025, the Company declared a regular quarterly cash dividend of $0.10 per share for the fourth quarter of 2024 payable on or about April 10, 2025 to all shareholders of record as of March 27, 2025.

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)
On March 12, 2025, 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 600,000 shares. On the same date, the Compensation Committee granted an aggregate of 528,200 restricted shares of common stock pursuant to the Plan. Of the total 528,200 shares issued on March 12, 2025, 311,500 shares were granted to the non-executive members of the board of directors and to the executive officers and 216,700 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 $7.35. 125,300 shares vested on the date of the issuance, March 12, 2025, 160,000 shares will vest on September 12, 2025, 104,100 shares will vest on March 12, 2026 and 138,800 shares will vest on September 14, 2026.

On March 13, 2025, the Company entered into a $18,000 sale and leaseback agreement for Squireship with an affiliate of China Huarong Shipping Financial Leasing Company Ltd. (“Huarong”) to refinance the Tranche A of the August 2021 Alpha Bank Loan Facility, secured by the Squireship. The agreement became effective on March 20, 2025, upon the delivery of the Squireship to the lessor. The Company sold and chartered back the vessel on a bareboat basis for a five-year period, having a purchase obligation at the end of the fifth year. The charterhire principal amortizes in 20 quarterly installments of $475 along with a balloon payment of $8,500 at the expiry of the bareboat charter, bearing an interest rate of 3-month term SOFR plus 2.15% per annum. The Company has continuous options to repurchase the vessel at any time throughout the bareboat charter period and at predetermined prices as set forth in the agreement following the first anniversary of the bareboat charter.

On March 13, 2025, the Company entered into a $16,500 sale and leaseback agreement for Friendship with an affiliate of Huarong to refinance the Tranche B of the August 2021 Alpha Bank Loan Facility, secured by the Friendship. The agreement became effective on March 20, 2025, upon the delivery of the Friendship to the lessor. The Company sold and chartered back the vessel on a bareboat basis for a five-year period, having a purchase obligation at the end of the fifth year. The charterhire principal amortizes in 20 quarterly installments of $443 along with a balloon payment of $7,650 at the expiry of the bareboat charter, bearing an interest rate of 3-month term SOFR plus 2.15% per annum. The Company has continuous options to repurchase the vessel at any time throughout the bareboat charter period and at predetermined prices as set forth in the agreement following the first anniversary of the bareboat charter.


F-39
EX-2.5 2 ef20039029_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, 2024, 20,374,165 common shares were issued and outstanding and as of March 18, 2025, 20,902,365 common shares were issued and outstanding. As of December 31, 2024 and March 18, 2025, 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.”
 
7
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.

8
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.

9
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.
​
​
​


10
EX-4.1 3 ef20039029_ex4-1.htm EXHIBIT 4.1
Exhibit 4.1

AMENDED AND RESTATED
 
SEANERGY MARITIME HOLDINGS CORPORATION
2011 EQUITY INCENTIVE PLAN
 
ADOPTED ON MARCH 12, 2025
 
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.
 
1
(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.
 
2
(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.
 
(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 600,000. 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.
 
15
(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.
 
16
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.
 
17
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.
 
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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-4.5 4 ef20039029_ex4-5.htm EXHIBIT 4.5
Exhibit 4.5

V.SHIPS SHIP MANAGEMENT AGREEMENT
Version Number
:
 01-2020

Page Number
:
 1 of 33
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 33
Doc:     VSMA
 File
:
     
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
8
  
 
 
 
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
  

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21.
Amendments to Agreement
21
  
 
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
  

30.
Emission Scheme / Emission Allowances and
    
 
FuelEU
22
  

Part III
Associated Companies & Other Services
25-27
  
Part IV
Fee Schedule
28
  
Part V
Fleet Details
29
  
Part VI
Initial Budget
30-32
  
Part VII
Form of Standby Letter of Credit
33
  

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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):
C/O 154 VOULIAGMENIS AVENUE, 16674 GLYFADA, ATHENS, GREECE
Telephone Number: +30 213 018 1507
 Fax Number: +30 210 9638404
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:
 Position:
 
Email address:
 
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

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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)
  

 

 
[Name]
  
[Name]
  
Title:
  
Title:
  

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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:
 
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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;

(x)
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.
 
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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 under Part VI;
 
(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.
3.3.8
If requested by Owners for assistance, storage and purchase of Emission Allowances, MARCAS may receive an introductory fee from the Trader in consideration of its activities but does not have any authority or ability to negotiate or vary the terms applicable to the purchase of the Emission Allowances or bind the Trader.

NOT APPLICABLE
 
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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 2025 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:
 
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  (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

(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.
 
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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.
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.
 
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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).

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.
 
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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.
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
Without prejudice to any fees payable to the Managers by the Owners under Clause 30, 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.
 
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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.

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.
 
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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.

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.



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.
 
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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.

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.
 
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“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.
 
“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.
 
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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.

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.
 
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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.
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.
30.
Emission Scheme / Emission Allowances and FuelEU
“Emission Allowances” means an allowance, credit, quota, permit or equivalent, representing a right of a Vessel to emit a specified quantity of greenhouse gas emissions recognised by the Emission Scheme.
“Emission Data” means data and records of the Vessel’s emissions in the form and manner necessary to calculate its Emission Allowances.
“Emission Scheme” means a greenhouse gas emissions trading scheme which for the purposes of this Clause shall include the European Union Emissions Trading System and any other similar systems imposed by applicable lawful authorities that regulate the issuance, allocation, trading or surrendering of Emission Allowances.
“Responsible Entity” means the party responsible for compliance under the Emissions Scheme(s) applicable to the Vessel by law, regulation and/or agreement.
Where the Managers are made the Responsible Entity under any Emission Scheme(s) applicable to the Vessel, or assume that responsibility by mandate from the registered owners or by agreement between the Parties in accordance with such Emission Scheme(s), the following shall apply:
Emission Data
(a)
The Managers shall provide the Owners with Emission Data in a timely manner and in accordance with the Emission Scheme together with the calculation of the Emission Allowances required. Such Emission Data shall be verified by an accredited verifier as required under the Emission Scheme and if required by Owners audited by an independent party approved by them, at the Owners’ expense.
(b)
Where the Owners require Emission Data in respect of a specific voyage, the Owners shall pay to the Managers a fee for such verified Emission Data, in any area subject to an Emission Scheme applicable to the Vessel, which shall include the fees of the accredited verifier.
(c)
The Managers shall monitor and report Emission Data to the administering authority, as well as submit the applicable Emission Allowances to the competent authority, in accordance with the Emission Scheme(s) applicable to the Vessel and subject to the provisions of this Clause.
 
 
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Emission Allowances
(d)
The Managers have provided the Owners with an estimate of the Emission Allowances that the Vessel is expected to incur up to and including the following quarter of the Emission Scheme period (“Initial Period”). The Owners shall within ten business days of signing this Agreement provide the Managers (the Company or Managers’ nominee) with security in the form of either (i) a standby letter of credit substantially in the form set out Part VII hereto; or (ii) a parent company guarantee in a format acceptable to the Managers (limited to a maximum amount of 50% of the combined actual and estimated values of the Emission Allowances at any one time, following the acquisition of the Vessels by the Owners) and remittance to the Managers by the Owners (or their nominee) of a maximum of 50% of the estimated Emissions Allowances for the ensuing quarter in accordance with the provisions of this Clause; or (iii) any other security in form and substance acceptable to the Managers, be it a standby letter of credit or otherwise (in either case, “Security”) in the full amount of the combined actual and estimated values of the Emission Allowances for the Initial Period at the then market price (as determined by the Trader) for purchase of the Emission Allowances, at the Owners’ option.
(e)
For each subsequent quarter of the then current period of the Emission Scheme, the Managers shall prepare and present in writing to the Owners: (i) any increases in Emission Allowances, compared to the estimated Emission Allowances, incurred by the Vessels in the previous quarter; (ii) the Managers estimate of the Emission Allowances for the ensuing quarter basis the Emission Allowances incurred for the Vessel during the previous quarter; and (iii) any increase in the market price of the Emission Allowances (all together the “Adjustment”). The Owners (or their nominee) shall provide the Managers (the Company or Managers’ nominee) with increased Security for the Adjustment by the 10th (tenth) business day of the last month within the previous quarter.
(f)
On completion of the then current period of the Emission Scheme (“Completed Period”), upon which Emission Allowances are calculated and subsequently become due for surrender (as detailed within the relevant Emission Scheme), the Managers will continue to calculate the amount of Security required on a quarterly basis for the Completed Period and the Owners (or their nominee, as applicable) shall continue to provide additional Security as required until the Owners have provided the Managers (the Company or Managers’ nominee) with the full amount of the Emission Allowances required to fulfil the Managers (the Company or Managers’ nominee) obligations under the applicable Emission Scheme(s).
(g)
The requirements detailed in (d), (e) and (f) above shall be repeated for subsequent periods covered by Emission Schemes and the initial Security for the first quarter of the forthcoming Emission Scheme period shall be provided to the Managers by the 10th (tenth) business day of the month prior to the commencement of the forthcoming Emission Scheme period.
(h)
In the event the Managers consider it necessary to draw down on or otherwise make a claim or demand under the Security, the Managers shall provide the Owners five business days’ written notice in advance.
(i)
Thirty running days prior to termination of this Management Agreement, the Managers shall prepare and present to the Owners, in writing, their estimates of the Emission Allowances required to fulfil the Managers’ obligations under the applicable Emission Scheme(s) for the Vessel for the current period of the Emission Scheme(s) and any following period should termination not occur in the current period of the Emission Scheme(s) (where the Management Agreement is terminated in circumstances which do not allow thirty days’ notice the Managers shall notify the Owners of said Emission Allowances as soon as possible). Within ten running days of such notification, but not later than the termination of the Management Agreement, the Emission Allowances notified by the Managers shall be transferred by the Owners (or their nominee) to the Managers.
(j)
Any difference between the Emission Allowances estimated according to subclause (i) above and the Emission Allowances actually due under the Emission Scheme(s) applicable to the Vessel, as at the time and date of termination of this Management Agreement and / or the time and date of the release of the Managers from their obligations under the Emission Scheme (whichever occurs latest), shall be reconciled and settled between the Parties within ten running days and following such reconciliation, the Managers (the Company or Managers’ nominee) shall release the Security to the Owners (or their nominee, as may be applicable).
(k)
Notwithstanding the Managers agreeing to be the Responsible Entity, the Owners (or their nominee) are obliged to procure and transfer to the Managers the requisite Emission Allowances.
(l)
Emission Allowances are to be transferred to the Managers within ten business days after receipt by the Owners of the Managers’ written request. In the event that the Owners fail to procure and transfer to the Managers Emission Allowances in accordance with this Clause, the Manager shall notify the Owners in writing to request rectification within five business days from a such written notice. In such case shall the Owners fail to procure and transfer the Emissions Allowance, the Managers are at liberty to purchase Emission Allowances for the final Emissions Allowances due to the competent authority. Any and all costs and expenses incurred by such purchase shall be for Owners’ account.
 
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(m)
The Parties may agree to the Owners (or their nominee) providing the Managers (the Company or the Managers’ nominee) with the Emission Allowances as replacement for the Security, and when the Owners do so the Managers (the Company or Managers’ nominee) shall reduce the Security requirements in accordance with the value of the Emission Allowances received, as determined by the Trader.
(n)
The Managers shall surrender the Emission Allowances in accordance with the Emission Scheme(s) applicable to the Vessel, subject always to the Owners (or their nominee) providing such Emission Allowances to the Managers.
(o)
Any Emission Allowances or other Security transferred by the Owners (or their nominee, as may be applicable) to the Managers under this Clause shall be held to the credit of the Owners until surrendered to the administering authority of the Emission Scheme(s) applicable to the Vessel or returned to the Owners.
Management Fees
(p)
The management fees for providing the Owners with the services covered under this Clause are as follows and shall be reviewed on an annual basis:
   
Management Fees Breakdown
  
 (USD)
1
  
Set-Up Costs
  
US$4,000 per MOHA
2
  
Liability Management Fee
  
US$5,000 for the Vessel per year
3
  
Emission Management Service Fee
  
US$550 per EU event per Vessel
(capped at US$10,000 annually)
4
  
Validated Voyage Emission Data Including Verifier Fee
  
$100 per voyage
Additional costs & expenses (charged at cost to Owners)
   
Price Breakdown
  
Price
1
  
OceanScore Technology
  
Set-Up Price: 250 EUR for the Vessel
 
Annual Cost: 900 EUR for the Vessel
2
  
MOHA Maintenance Fee
  
$500 annually per MOHA (estimated)
[With the exception of the MOHA Set-Up Costs and the MOHA Maintenance Fee], the fees, costs and expenses will not be applied until the Vessel commences trading in accordance with the Emission Scheme.
(q)
All reasonable costs and expenses not itemised above, including, but not limited to, the purchase of Emission Allowances, incurred by the Managers in providing the services under this clause shall be reimbursed by the Owners at cost against presentation of vouchers / invoices. Owners must pay invoices issued in respect of fees, costs and expenses incurred under this Clause within thirty running days and if not itemised above after their approval or in accordance with the Trader’s terms and conditions.
Miscellaneous Provisions
(r)
The Managers’ associated company MARCAS (see Clause 3.3 in this Agreement) has developed a strategic partnership with an Emission Allowances trader (“Trader”). The Trader can assist Owners in the opening of trading accounts and the purchasing of Emission Allowances and the procedures involved with the surrendering of the Emission Allowances.
(s)
The Owners accept that any Emission Allowances purchased by the Managers for the Owners is solely at the Owners risk and on the terms and conditions of the Trader, this also applies where the Managers purchase Emission Allowances for the Owners to comply with any Emission Scheme(s).
(t)
All applicable charges in respect of any Security (including without limitation, opening, advising, confirmation, amendment and correspondent charges, charges) shall be for the Owners’ sole account.
(u)
The issuance of any other Security shall not be construed as excluding Owners’ responsibility for making payment of amounts payable to the Managers under the Management Agreement or otherwise when due.
(v)
Any Security shall take effect in accordance with its terms (including any agreed amendment(s) thereto) but such terms shall not alter, add to or in any way affect the provisions of this Management Agreement.
(w)
Any claim, drawing, or demand on any Security paid to the Managers shall be deemed to be a payment of the relevant amount by the Owners.
FuelEU
(x)
FuelEU – The Owners and the Managers shall agree on an addendum to this Agreement to allocate the responsibility of the EU’s FuelEU: REGULATION (EU) 2023/1805 between the parties. If the parties cannot mutually agree on any amendments to this Agreement or security that may be required to be provided or adjustments to the management fees, then either party may terminate this Agreement by giving the other party two months’ notice of termination.

 
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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.

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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

APPENDIX 1* - Chartering



APPENDIX 2* - Post Fixture Services









APPENDIX 3* - Surveys or other Consultancy Services


 
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APPENDIX 4* - Bunker Services





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
As per agreed budget
Monthly in advance
Information System fees (Shipsure)
As per agreed budget
Per year
Planned maintenance - data base development fee (maximum of 30 chargeable days)
 
As per agreed budget
30 days of invoice
Crewing: Fixed Cost invoice – Crewing Costs (Part VI)
 
 
Other Crew costs (ITF, SEPF, PNO fee etc.)
 
 
Management Expenses:
 
 
As per agreed budget
Monthly
 
 
Monthly
 
 
Monthly

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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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 2025 Budget (all figures in USD)

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:
     
SHIP TECHNICAL MANAGEMENT AGREEMENT - PART VII
FORM OF STANDBY LETTER OF CREDIT
[Date]
[Beneficiary Name]
[Address]
[Attn: xxx]
Issuing Bank:          [Issuing Bank Name]
[Address of the Issuing Bank]
 
(SWIFT CODE: XXXXXXXX)
 
We hereby open in favour of (Beneficiary) by order of and for the account of our Applicant (Name of Applicant and address), our Irrevocable Standby Letter of Credit No._______ dated　_______ (the “Standby Letter of Credit”) up to the total aggregate amount not exceeding_________ (amount in words) (the “Standby Letter of Credit Amount”).
 
This Standby Letter of Credit is available with the Issuing Bank by payment upon presentation of the following documents:
 
In case that the Applicant failed to pay the amount due to the Beneficiary,
 
(1) Beneficiary’s signed statement evidencing the following:
 
“We certify that the amount of this drawing (US$....) under Standby Letter of Credit number ……..　of ……. represents funds due to us as ……　has failed to pay the aforementioned amount, in full or in part, in accordance with the terms and conditions of the ship management agreements between Applicant and Beneficiary.”
 
This Standby Letter of Credit is effective from …….. and our obligations under this Standby Letter of Credit shall expire on …….. (the “Termination Date”) irrespective whether this Standby Letter of Credit is returned to us or not, at our counters, without affecting any liability that we have to you following receipt by us of any written demand from you on or prior to the Termination Date.
 
All costs and expenses incurred in or arising from the opening, amending and advising in respect of issuance of this Standby Letter of Credit shall be for the Applicant’s account.
 
The Beneficiary is entitled to make written demands for partial payments or drawings under this Standby Letter of Credit but aggregate amount shall not exceed the Standby Letter of Credit Amount. The amount available for drawing under this Standby Letter of Credit shall be automatically reduced by the amount of any payment(s) made by us in satisfaction of a demand in respect thereof.
 
For reimbursement, upon compliance with the terms and conditions of this Standby Letter of Credit, we hereby undertake to effect payment in accordance with your instructions.
 
We hereby irrevocably agree that all documents drawn under and in compliance with the terms of this Standby Letter of Credit will be duly honoured by us at our counters mentioned in the above paragraphs, on or before the Termination date.
 
 
This Standby Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits, 2007 Revision, International Chamber of Commerce Publication No.600, and as to matters not addressed by UCP shall be governed by English Law.
 
Duly authorised signatory,
 
(Issuing Bank)
 
 
Ship Technical Management Agreement
OWNERS
MANAGERS
EX-4.6 5 ef20039029_ex4-6.htm EXHIBIT 4.6
Exhibit 4.6

Addendum to Ship Management Agreement
 
THIS ADDENDUM, constituting an amendment to the Management Agreement (“Addendum”) is entered into on [____] between:
 
A.
[Name of Owner], with its registered address at [___] (“Owners”); and
 
B.
V.Ships Greece Ltd., with its registered office at 3rd Floor, Par la Ville Place, 14 Par la Ville Road, Hamilton, HM08, Bermuda (the “Managers”),
 
each a “Party” and together the “Parties”.
 
RECITALS:
 
(A)
A ship management agreement has been entered into between the Owners and the Managers in respect of the motor vessel [_____] with IMO Number: [_____] (the “Vessel”) dated [_____] (the “Management Agreement”).
 
(B)
New emission schemes relating to greenhouse gas emissions trading schemes (including but not limited to the European Union Emissions Trading System) are being included into law in various jurisdictions and the Parties wish to set out their obligations in facilitating compliance with such emission schemes.
 
(C)
The Parties also wish to agree on any additional management services that will be required to be provided by the Managers, on behalf of the Owners, to facilitate compliance with the applicable emission schemes.
 
(D)
The Parties agree to amend the Management Agreement as follows.
 
OPERATIVE PROVISIONS:
 
Condition Precedent
 
1.
This Addendum shall not come into force unless and until the Managers confirm in writing to the Owners that the Owners (or their nominee) have provided to the Managers the requisite Security set out herein (in form and substance acceptable to the Managers). Until such time as the Managers have provided such confirmation in writing to the Owners, the Owners remain the Responsible Entity and this Addendum shall not apply to the Management Agreement. Upon such written confirmation by the Managers, this Addendum shall come into force [_____].
 
2.
If at any point during the term of the Management Agreement, in accordance with this Addendum, Security is not in place (or, in the opinion of the Managers, is not acceptable), including, for the avoidance of doubt, any Adjustments to the Security, for whatever reason, and in case the Owners have not rectified and provided the agreed Security within 5 business days from a written notice from the Managers to the Owners, the Managers shall have the right to terminate this Addendum (and at the Managers discretion the Management Agreement) forthwith. In the event of such a termination, Owners shall or shall procure that they or any other party acceptable under the Emission Scheme be the Responsible Entity and assume all responsibility and liability, past, present and future howsoever arising with respect to any and all Emission Schemes.
 
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Management Agreement

1.
Except as hereby amended, all definitions, terms and conditions of the Management Agreement apply to this Addendum and remain in full force and effect.
 
2.
The Parties hereby agree as follows and the following words and expressions are hereby added to the Management Agreement:

The Parties agree to amend the Management Agreement as follows:
 
New Clause
 
“Emission Allowances” means an allowance, credit, quota, permit or equivalent, representing a right of a Vessel to emit a specified quantity of greenhouse gas emissions recognised by the Emission Scheme.

“Emission Data” means data and records of the Vessel’s emissions in the form and manner necessary to calculate its Emission Allowances.

“Emission Scheme” means a greenhouse gas emissions trading scheme which for the purposes of this Clause shall include the European Union Emissions Trading System and any other similar systems imposed by applicable lawful authorities that regulate the issuance, allocation, trading or surrendering of Emission Allowances.

“Responsible Entity” means the party responsible for compliance under the Emissions Scheme(s) applicable to the Vessel by law, regulation and/or agreement.

Where the Managers are made the Responsible Entity under any Emission Scheme(s) applicable to the Vessel, or assume that responsibility by mandate from the registered owners or by agreement between the Parties in accordance with such Emission Scheme(s), the following shall apply:
 
Emission Data

 
(a)
The Managers shall provide the Owners with Emission Data in a timely manner and in accordance with the Emission Scheme together with the calculation of the Emission Allowances required. Such Emission Data shall be verified by an accredited verifier as required under the Emission Scheme and if required by Owners audited by an independent party approved by them, at the Owners’ expense.
 
 
(b)
Where the Owners require Emission Data in respect of a specific voyage, the Owners shall pay to the Managers a fee of USD 100 per voyage for such verified Emission Data, in any area subject to an Emission Scheme applicable to the Vessel, which shall include the fees of the accredited verifier.

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 (c)
The Managers shall monitor and report Emission Data to the administering authority, as well as submit the applicable Emission Allowances to the competent authority, in accordance with the Emission Scheme(s) applicable to the Vessel and subject to the provisions of this Addendum.
 
Emission Allowances
 

 (d)
The Managers have provided the Owners with a calculation of the Emission Allowances incurred by the Vessel prior to the date of this Addendum, together with an estimate of the Emission Allowances that the Vessel is expected to incur up to and including the following quarter of the Emission Scheme period (“Initial Period”). The Owners shall within ten business days of signing this Addendum provide the Managers (the Company or Managers’ nominee) with security in the form of either (i) a standby letter of credit substantially in the form set out in Schedule 1 hereto; or (ii) a parent company guarantee in a format acceptable to the Managers (limited to a maximum amount of 50% of the combined actual and estimated values of the Emission Allowances at any one time) and remittance to the Managers by the Owners (or their nominee) of a maximum of 50% of the estimated Emissions Allowances for the ensuing quarter in accordance with the provisions of this Addendum; or (iii) any other security in form and substance acceptable to the Managers, be it a standby letter of credit or otherwise (in either case, “Security”) in the full amount of the combined actual and estimated values of the Emission Allowances for the Initial Period at the then market price (as determined by the Trader) for purchase of the Emission Allowances, at the Owners’ option. The Owners (or their nominee) will also remit within twenty (20) running days the Emission Allowances incurred so far and up to the date of the Addendum.
 

 (e)
For each subsequent quarter of the then current period of the Emission Scheme, the Managers shall prepare and present in writing to the Owners: (i) any increases in Emission Allowances, compared to the estimated Emission Allowances, incurred by the Vessels in the previous quarter; (ii) the Managers estimate of the Emission Allowances for the ensuing quarter basis the Emission Allowances incurred for the Vessel during the previous quarter; and (iii) any increase in the market price of the Emission Allowances (all together the “Adjustment”). The Owners (or their nominee) shall provide the Managers (the Company or Managers’ nominee) with increased Security for the Adjustment by the 10th (tenth) business day of the last month within the previous quarter.
 

 (f)
On completion of the then current period of the Emission Scheme (“Completed Period”), upon which Emission Allowances are calculated and subsequently become due for surrender (as detailed within the relevant Emission Scheme), the Managers will continue to calculate the amount of Security required on a quarterly basis for the Completed Period and the Owners (or their nominee, as applicable) shall continue to provide additional Security as required until the Owners have provided the Managers (the Company or Managers’ nominee) with the full amount of the Emission Allowances required to fulfil the Managers (the Company or Managers’ nominee) obligations under the applicable Emission Scheme(s).
 
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 (g)
The requirements detailed in (d), (e) and (f) above shall be repeated for subsequent periods covered by Emission Schemes and the initial Security for the first quarter of the forthcoming Emission Scheme period shall be provided to the Managers by the 10th (tenth) business day of the month prior to the commencement of the forthcoming Emission Scheme period.
 

 (h)
In the event the Managers consider it necessary to draw down on or otherwise make a claim or demand under the Security, the Managers shall provide the Owners five business days’ written notice in advance.
 

 (i)
Thirty running days prior to termination of this Management Agreement, the Managers shall prepare and present to the Owners, in writing, their estimates of the Emission Allowances required to fulfil the Managers’ obligations under the applicable Emission Scheme(s) for the Vessel for the current period of the Emission Scheme(s) and any following period should termination not occur in the current period of the Emission Scheme(s) (where the Management Agreement is terminated in circumstances which do not allow thirty days’ notice the Managers shall notify the Owners of said Emission Allowances as soon as possible). Within ten running days of such notification, but not later than the termination of the Management Agreement, the Emission Allowances notified by the Managers shall be transferred by the Owners (or their nominee) to the Managers.
 

 (j)
Any difference between the Emission Allowances estimated according to subclause (i) above and the Emission Allowances actually due under the Emission Scheme(s) applicable to the Vessel, as at the time and date of termination of this Management Agreement and / or the time and date of the release of the Managers from their obligations under the Emission Scheme (whichever occurs latest), shall be reconciled and settled between the Parties within ten running days and following such reconciliation, the Managers (the Company or Managers’ nominee) shall release the Security to the Owners (or their nominee, as may be applicable).
 

 (k)
Notwithstanding the Managers agreeing to be the Responsible Entity, the Owners (or their nominee) are obliged to procure and transfer to the Managers the requisite Emission Allowances.


(l)
Emission Allowances are to be transferred to the Managers within ten business days after receipt by the Owners of the Managers’ written request. In the event that the Owners fail to procure and transfer to the Managers Emission Allowances in accordance with this Addendum, the Manager shall notify the Owners in writing to request rectification within five business days from a such written notice. In such case shall the Owners fail to procure and transfer the Emissions Allowance, the Managers are at liberty to purchase Emission Allowances for the final Emissions Allowances due to the competent authority. Any and all costs and expenses incurred by such purchase shall be for Owners’ account.


(m)
The Parties may agree to the Owners (or their nominee) providing the Managers (the Company or the Managers’ nominee) with the Emission Allowances as replacement for the Security, and when the Owners do so the Managers (the Company or Managers’ nominee) shall reduce the Security requirements in accordance with the value of the Emission Allowances received, as determined by the Trader.

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 (n)
The Managers shall surrender the Emission Allowances in accordance with the Emission Scheme(s) applicable to the Vessel, subject always to the Owners (or their nominee) providing such Emission Allowances to the Managers.
 

 (o)
Any Emission Allowances or other Security transferred by the Owners (or their nominee, as may be applicable) to the Managers under this Clause shall be held to the credit of the Owners until surrendered to the administering authority of the Emission Scheme(s) applicable to the Vessel or returned to the Owners.
 
Management Fees
 

 (p)
The management fees for providing the Owners with the services covered under this Addendum are as follows and shall be reviewed on an annual basis:
 
 
Management Fees Breakdown
  
(USD)
1
Set-Up Costs
  
US$4,000 per MOHA
2
Liability Management Fee
  
US$5,000 for the Vessel per year
3
Emission Management Service Fee
  
US$550 per EU event per Vessel
(capped at US$10,000 annually)


Additional costs & expenses (charged at cost to Owners)
 
Price Breakdown
  
Price
1
OceanScore Technology
  
Set-Up Price: 250 EUR for the Vessel
 
Annual Cost: 900 EUR for the Vessel
2
MOHA Maintenance Fee
  
$500 annually per MOHA (estimated)
 
With the exception of the MOHA Set-Up Costs and the MOHA Maintenance Fee, the fees, costs and expenses will not be applied until a Vessel commences trading in accordance with the Emission Scheme.
 

 (q)
All reasonable costs and expenses not itemised above, including, but not limited to, the purchase of Emission Allowances, incurred by the Managers in providing the services under this Addendum shall be reimbursed by the Owners at cost against presentation of vouchers / invoices. Owners must pay invoices issued in respect of fees, costs and expenses incurred under this Addendum within thirty running days and if not itemised above after their approval or in accordance with the Trader’s terms and conditions.
 
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Miscellaneous Provisions


 (r)
The Managers’ associated company MARCAS (see Clause 3.3 in the Management Agreement) has developed a strategic partnership with an Emission Allowances trader (“Trader”). The Trader can assist Owners in the opening of trading accounts and the purchasing of Emission Allowances and the procedures involved with the surrendering of the Emission Allowances.


(s)
The Owners accept that any Emission Allowances purchased by the Managers for the Owners is solely at the Owners risk and on the terms and conditions of the Trader, this also applies where the Managers purchase Emission Allowances for the Owners to comply with any Emission Scheme(s).


(t)
All applicable charges in respect of any Security (including without limitation, opening, advising, confirmation, amendment and correspondent charges, charges) shall be for the Owners’ sole account.
 

 (u)
The issuance of any other Security shall not be construed as excluding Owners’ responsibility for making payment of amounts payable to the Managers under the Management Agreement or otherwise when due.


(v)
Any Security shall take effect in accordance with its terms (including any agreed amendment(s) thereto) but such terms shall not alter, add to or in any way affect the provisions of this Management Agreement.
 

 (w)
Any claim, drawing, or demand on any Security paid to the Managers shall be deemed to be a payment of the relevant amount by the Owners.
 
3.
The following Clause is added to Clause 3.3 – PURCHASING of the Management Agreements:
 
If requested by Owners for assistance, storage and purchase of Emission Allowances, MARCAS may receive an introductory fee from the Trader in consideration of its activities but does not have any authority or ability to negotiate or vary the terms applicable to the purchase of the Emission Allowances or bind the Trader.
 
4.
This Addendum shall be governed by and construed in accordance with English law and arbitration as provided in the Management Agreement.
 
Agreed by the Parties as evidenced by their authorised signatories:
 
6/9
 
For and on behalf of [_____]
 
  
For and on behalf of V.Ships Greece Ltd.
 
Name:
  
Name:
 
Position:
  
Position:
 
Date:
  
Date:

7/9
Schedule 1 – Form of Standby Letter of Credit
 
[Date]
 
[Beneficiary Name]
 
[Address]
 
[Attn: xxx]
 
Issuing Bank: [Issuing Bank Name]
 
[Address of the Issuing Bank]
 
(SWIFT CODE: XXXXXXXX)
 
We hereby open in favour of (Beneficiary) by order of and for the account of our Applicant (Name of Applicant and address), our Irrevocable Standby Letter of Credit No._______ dated　_______ (the “Standby Letter of Credit”) up to the total aggregate amount not exceeding_________ (amount in words) (the “Standby Letter of Credit Amount”).
 
This Standby Letter of Credit is available with the Issuing Bank by payment upon presentation of the following documents:
 
In case that the Applicant failed to pay the amount due to the Beneficiary,
 
(1) Beneficiary’s signed statement evidencing the following:
 
“We certify that the amount of this drawing (US$....) under Standby Letter of Credit number ……..　of ……. represents funds due to us as ……　has failed to pay the aforementioned amount, in full or in part, in accordance with the terms and conditions of the ship management agreements between Applicant and Beneficiary.”
 
This Standby Letter of Credit is effective from …….. and our obligations under this Standby Letter of Credit shall expire on …….. (the “Termination Date”) irrespective whether this Standby Letter of Credit is returned to us or not, at our counters, without affecting any liability that we have to you following receipt by us of any written demand from you on or prior to the Termination Date.
 
All costs and expenses incurred in or arising from the opening, amending and advising in respect of issuance of this Standby Letter of Credit shall be for the Applicant’s account.
 
The Beneficiary is entitled to make written demands for partial payments or drawings under this Standby Letter of Credit but aggregate amount shall not exceed the Standby Letter of Credit Amount. The amount available for drawing under this Standby Letter of Credit shall be automatically reduced by the amount of any payment(s) made by us in satisfaction of a demand in respect thereof.
 
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For reimbursement, upon compliance with the terms and conditions of this Standby Letter of Credit, we hereby undertake to effect payment in accordance with your instructions.
 
We hereby irrevocably agree that all documents drawn under and in compliance with the terms of this Standby Letter of Credit will be duly honoured by us at our counters mentioned in the above paragraphs, on or before the Termination date.
 
This Standby Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits, 2007 Revision, International Chamber of Commerce Publication No.600, and as to matters not addressed by UCP shall be governed by English Law.
 
Duly authorised signatory,

 
  
 
 
 
 (Issuing Bank)
 
 

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EX-4.7 6 ef20039029_ex4-7.htm EXHIBIT 4.7
Exhibit 4.7

On Demand Guarantee

Dated this [__] day of [___], by

A.        Seanergy Maritime Holdings Corp., with registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (hereinafter “Guarantor”),

in favor of

B.          V.Ships Greece Ltd., with registered office at 3rd Floor, Par la Ville Place, 14 Par la Ville Road, Hamilton, HM08, Bermuda (hereinafter “V. Ships”).

WHEREAS, each of [___]  of [___] (each hereinafter referred to as the “Owner” and collectively the “Owners”), each being a wholly-owned subsidiary of the Guarantor, has entered into or is contemplating entering, under its capacity as owner or disponent owner (as may be applicable), a technical management agreement (dated [___] respectively and as novated and/or amended and/or supplemented from time to time) with V.Ships, under its capacity as technical manager, in relation to the M/Vs [___], respectively (hereinafter each referred to as the “Vessel” and collectively the “Vessels”), on the terms and conditions agreed therein (each such addendum, as the same may from time to time be modified, amended and supplemented, shall be referred hereinafter to as the “Management Agreement Addendum” and collectively the “Management Agreement Addenda”).

WHEREAS, each Management Agreement Addendum relates to the assumption by V.Ships of the relevant compliance obligations for each respective Vessel under any applicable Emission Scheme (as defined therein), while each Owner shall perform the obligations particularly mentioned therein.

WHEREAS, each Management Agreement Addendum provides that the parent company of each Owner shall provide a guarantee in favor of V.Ships as particularly described therein.

WHEREAS, this Guarantee is the guarantee mentioned under the Management Agreement Addenda.

NOW THEREFORE, in consideration of the foregoing, the Guarantor hereby covenants and agrees as follows:


 1.
Guarantee: The Guarantor hereby guarantees the maximum amount of 50% (fifty per cent) of the combined actual and estimated values of the Emission Allowances (as defined in each Management Agreement Addenda) for each Vessel at any time during the duration of the respective technical management agreement or the Management Agreement Addendum or after their termination as long as any Emission Allowances remain due from the Owners (or their nominee) to V.Ships under such respective technical management agreement or Management Agreement Addendum, as may be applicable.
 
1

 2.
Payment Demand and Terms of Payment: If any of the Owners (or its nominee, as may be applicable pursuant to the provisions of the respective Management Agreement Addendum) fails for whatever reason to remit the 50% (fifty per cent) of the required Emissions Allowances when due to V.Ships in accordance with the provisions of the respective Management Agreement Addendum, V.Ships shall notify the Guarantor in writing of the manner in which such Owner has failed to perform and demand that payment be made by the Guarantor under this Guarantee specifying the bank account V.Ships wish to receive payment ( “Payment Demand”).
 
The Guarantor shall within twenty (20) Greek business days after receipt of such Payment Demand, make payment in-full of the respective amount due to the bank account specified in the Payment Demand.
 

 3.
Waivers: This is an on demand, unconditional and irrevocable Guarantee and not merely a surety. Therefore, the Guarantor hereby waives (a) any right to assert any counterclaim or other defenses before payment and to exercise any right to set-off; (b) any right to require that any action or proceeding be brought against each of the Owners or any other person in advance of payment.
 
No delay of V.Ships in the exercise of or failure to exercise any right hereunder shall operate as a waiver of such rights, a waiver of any other rights or a release of the Guarantor from any obligations hereunder.
 

 4.
Termination: This Guarantee shall terminate in relation to each Owner on the date that the obligations of that Owner to make payment of all Emissions Allowances under the Management Agreement Addendum is fulfilled, regardless of a termination of the respective technical management agreement or the respective Management Agreement Addendum for the relevant Vessel.
 

 5.
Representations and warranties: The Guarantor represents and warrants that:
(a) it is an entity duly organised and validly existing under the laws of the jurisdiction of its incorporation and has the corporate power and authority to execute, deliver and carry out the terms and provisions of this Guarantee;
(b) no authorisation, approval, consent or order of, or registration or filing with, any court or other governmental body having jurisdiction over the Guarantor is required on the part of the Guarantor for execution and delivery of this Guarantee; and
(c) this Guarantee, when executed and delivered, will constitute a valid and legally binding agreement of the Guarantor.


 6.
Miscellaneous: This Guarantee shall be binding upon the Guarantor, its successors and assigns and inure to the benefit of and be enforceable by V.Ships, its successors and assigns.

This Guarantee shall be governed by and interpreted in accordance with English law and shall be refeed to arbitration in London in accordance with the Arbitration Act 1966 and any amendment thereto or substitution therefor. More specific provisions in relation to the arbitration proceedings as described in the respective technical management Agreement for the relevant Vessel, shall apply mutatis mutandis for this Guarantee.

2
No term or provision of this Guarantee, included this provision, shall be amended, modified, altered, waived or supplemented except in writing duly signed by the Guarantor and V.Ships.


  
 
For and on behalf of the
For and on behalf of the
Guarantor
V. Ships Greece Ltd.
Name:
Name:
Title:
Title:


3
EX-4.33 7 ef20039029_ex4-33.htm EXHIBIT 4.33
Exhibit 4.33

ADDENDUM No. 2
 
to
 
Bareboat Charterparty dated April 24th, 2023
 
for
 
MV "LORDSHIP"
 
between

Village Seven Co., Ltd.
 
and
 
V7 Fune Inc.
 
as owners
 
and
 
Lord Ocean Navigation Co.
 
as charterers
 
1
This Addendum No. 2 (the “Amendment”) is entered into on 22nd May 2024 by and between:
 
(i)
Village Seven Co., Ltd., a company incorporated and registered under the laws of Japan with registered address at 6-21, Konan 3-chome, Minato-ku, Tokyo, Japan, as owners with 99.99% ownership;
 
(ii)
V7 Fune Inc., a company incorporated and registered under the laws of Panama with registered address at BICSA Financial Center, 60th Floor, Balboa Avenue, Panama City, Republic of Panama with 0.99% ownership (together with Village Seven  Co., Ltd., the “Owners”); and
 
(iii)
Lord Ocean Navigation Co., a limited company with registered address at 80 Broad Street, Monrovia as charterers (the “Charterers").
 
Each of the Owners and the Charterers is hereinafter referred to as a Party and collectively the Parties.
 
WHEREAS

(A)
The Parties have entered into a bareboat charterparty agreement dated April 24th, 2023 (hereinafter as the same may from time to time be amended, supplemented, novated or replaced, the "Charter"), whereby the Owners have agreed to let the vessel "LORDSHIP" IMO no. 9519066, (the "Vessel") on charter to the Charterers on the terms set out therein.
 
(B)
Following the new EU Commission Implementing Regulation (EU) 2023/2599, which imposes the responsibilities in relation to compliance with the Emission Scheme (as defined below) on the registered owners of each vessel responsible for compliance with the EU Emission Scheme, the Parties agree to enter into this Amendment and incorporate and include in the Charter the additional clause stipulated herein.
 
Terms defined in the Charter shall have the same meaning when used herein.
 
NOW THEREFORE THE PARTIES HAVE AGREED AS FOLLOWS:

 
1
AMENDMENTS TO THE CHARTER
 
The Charter shall be amended, with retrospective effect from 1st January 2024, as follows:
 
2
The following clause shall be deemed inserted in direct succession of Clause 10, paragraph (g), and incorporated in the Charter, as a new paragraph of Clause 10, "paragraph (h) - Emission Scheme":

///
(h) Emission Scheme

Notwithstanding any other provision in this Charter, the Owners and the Charterers agree as follows:

"Emission Allowances" means an allowance, credit, quota, permit or equivalent, representing a right of a vessel to emit a specified quantity of greenhouse gas emissions recognised by the Emission Scheme, or generally in connection with emissions, carbon reduction or other environmental or sustainability national or international laws or regulations applicable to the Vessel and her operation.

"Emission Scheme" means a greenhouse gas emissions trading scheme and any emissions, carbon reduction or other environmental or sustainability national or international laws or regulations applicable to the Vessel and her operation, which for the purposes of this Clause shall include (without limitation) the European Union Emissions Trading System and any other similar systems imposed by any similar or equivalent international, regional, national or local scheme implemented by the IMO or any other lawful national or other authority that regulate the issuance, allocation, trading or surrendering of Emission Allowances.


 (i)
Subject to any mandatory provisions of any applicable Emissions Scheme and the corresponding national or international laws and regulations, the Charterers shall exercise their best endeavours to take all necessary actions to procure that they or the Vessel’s ISM Company shall be the sole responsible party for compliance of all Emission Scheme obligations in relation to the Vessel, provided this is feasible and legally permissible, pursuant to any domestic or international law or regulation, directed to the Owners as registered or beneficial owners of the Vessel.
 

 (ii)
Notwithstanding sub-paragraph (i) above, the Charterers shall be permitted to sub-delegate such Emission Scheme responsibility on to any entity, including without limitation to the relevant holder of Document of Compliance/ISM Company under the ISM Code in respect of the Vessel. Such sub-delegation shall be documented in accordance with the requirements imposed by the relevant Emissions Scheme and copy of such documentation shall be provided by or made available to the Owners, as may be applicable, including but not limited to any written mandate requested by the competent authorities.
 

 (iii)
The Charterers and the Owners shall co-operate and assist  each other to deliver all such forms as are required to be filed to any relevant authorities in relation to the delegation and assumption of any Emission Scheme responsibilities within reasonable time and always in accordance with any deadlines set by the competent authority and the applicable laws and regulations.
 
3

 (iv)
Without limiting the foregoing, throughout the Charter Period, the Charterers, or any mandated entity, shall arrange for providing and paying for or otherwise surrendering the Emission Allowances corresponding to the Vessel’s emissions under the scope of the applicable Emission Scheme and surrender those Emissions Allowances (relating to the period of the Charter) within the timeframes established by the applicable Emissions Scheme.
 

 (v)
Emission Allowances, taxes, charges, levies, fees, fines, costs or expenses incurred or imposed in connection with any Emissions Scheme, shall be for the Charterers' account and are to be settled directly by them or their mandated entity (subject always to any mandatory provisions of the applicable Emissions Scheme or relevant laws or regulations).
 

 (vi)
The Charterers shall use their best endeavours to ensure that the Charterers, or any mandated, as above, entity shall comply, sign, acknowledge in writing in any form that may be reasonably required, and provide all such information and documents to the Owners as necessary to enable the Owners and any Emission Scheme obligor to document and evidence to any authority their delegation/mandating of all Emission Scheme obligations in relation to the Vessel (and the assumption of same by the relevant mandated entity), as may be required from time to time during the Charter Period by the Owners, any manager or other mandated entity, and any relevant Emission Scheme authority, in conformity with the provisions of this Clause. In relation to the Emission Scheme being the European Union Emissions Trading System, the Owners and the Charterers or the Vessel’s ISM Company, or any mandated by the Charterers entity, shall complete and sign a mandate form in form and substance as required (from time to time) by the competent administering authority and/or EU Commission Implementing Regulation (EU) 2023/2599, the Directive 2003/87/EC, currently and indicatively in form as appended hereto (see Exhibit 1) (the "Mandate Form").The Owners shall also ensure to provide the Charterers with all necessary information, documents or details as above and as same may be required by any authorities in connection any applicable Emissions Scheme, including but not limited to opening any accounts and/or surrendering any Emissions Allowances, in order to ensure that the Vessel will comply with any applicable Emissions Scheme laws and regulations
 

 (vii)
The Owners undertake to relay to the Charterers, without delay, any information that might be received by the Owners for any reason whatsoever, including by error of any authority, and which might relate to compliance with any Emission Scheme.
///
 
2
NO FURTHER AMENDMENTS
 
All other terms and conditions of the Charter shall remain in full force and effect.
 
4
3
COSTS
 
Save as expressly set forth in the Charter and in this Amendment, each Party shall carry their own costs incurred in relation to this Amendment.
 
4
GOVERNING LAW AND JURISDICTION
 
This Amendment and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English law.
 
Clause 30 of the Charter shall apply to this Amendment, mutatis mutandis.
 
5
CONFLICT
 
In case of any inconsistency between any of the provisions of this Amendment and the provisions of the Charter, the provisions of this Amendment shall prevail.
 
* * *

The Parties have caused this Amendment to be signed by their duly authorized representative on the date first above written.
 
Village Seven Co., Ltd.
as Owners (with 99.9% ownership)
  
Lord Ocean Navigation Co.
as Charterers
 
/s/ Mamoru Nanamura
  
/s/ Stavros Gyftakis
By: Mamoru Nanamura
Title: Representative
  
By: Stavros Gyftakis
Title: Director

5
V7 Fune Inc.,
as Owners (with 0.01% ownership)
 
/s/ Mamoru Nanamura
By: Mamoru Nanamura
Title: Director/President


6
EX-4.35 8 ef20039029_ex4-35.htm EXHIBIT 4.35
Exhibit 4.35

1.          Shipbroker

N/A
2.          Place and date

4 June 2024
3.          Owners/Place of business (Cl. 1)
 
HAO LEO LIMITED, a corporation incorporated in the Republic of Liberia with registration number C-127273 and registered office address at 80 Broad Street, Monrovia, the Republic of Liberia
4.          Bareboat Charterers/Place of business (Cl. 1)
 
Hellas Ocean Navigation Co., a corporation incorporated in the Republic of Liberia with registration number C-122545 and registered address at 80 Broad Street, Monrovia, the Republic of Liberia
5.          Vessel’s name, call sign and flag (Cl. 1 and 3)

Hellasship

Call sign: 5LAL4 Republic of Liberia
6.          Type of Vessel

BULK CARRIER
7.          GT/NT

92,752/60,504
8          When/Where built

2012
9.          Total DWT (abt.) in metric tons on summer freeboard

181.325mt
10.        Classification Society (Cl. 3)

DNV
11.        Date of last special survey by the Vessel’s classification society

TBA
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 at such location as agreed under clause 5 of the MOA
14.          Time for delivery (Cl. 4)

SEE CLAUSE 34
15.        Cancelling date (Cl. 5)

SEE CLAUSE 33
16.        Port or Place of redelivery (Cl. 15)

SEE CLAUSE 41
17.        No. of months' validity of trading and class certificates upon redelivery (Cl. 15)

THREE (3) MONTHS

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.
18.        Running days’ notice if other than stated in Cl. 4

N/A
19.        Frequency of dry-docking (Cl. 10(g))

In accordance with the Classification Society or Flag State requirements
20.        Trading limits (Cl. 6)

Worldwide within International Navigating Limits, please also see clauses 48.1(r)
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.       
25.        Currency and method of payment (Cl. 11)

USD/BANK TRANSFER
26.        Place of payment; also state beneficiary and bank account (Cl. 11)

SEE CLAUSE 36
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 12(b)
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 39 - CLAUSE 14 DOES NOT APPLY
30.        Additional insurance cover, if any, for Owners’ account limited to (Cl. 13(b) or, if applicable, Cl. 14(g))

SEE CLAUSE 39
31.          Additional insurance cover, if any, for Charterers’ account 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 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)


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)

choose an item   SEE CLAUSE 30(a)
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, Part III does not apply
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

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.
41.      Liquidated damages and costs shall accrue to (state party acc. to Cl. 1)

(a)          N/A

(b)

(c)
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, PART V DOES NOT APPLY
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 61

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/ Yang Guangyi
Yang Guangyi
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.
PART II
1       1.      Definitions
 
2                In this Charter, the following terms shall have the meanings hereby assigned to them:
 
3                “The Owners” shall mean the party identified in Box 3;
 
4                “The Charterers” shall mean the party identified in Box 4;
 
5                “The Vessel” shall mean the vessel named in Box 5 and with particulars as stated in Boxes 6 to 12.
 
6               
7               
 
8       2.      Charter Period

9                In consideration of the hire detailed in Box 22, the Owners have agreed to let and the Charterers have agreed to
10              hire the Vessel for the period stated in Box 21 (“The Charter Period”). See also Clause 32.

11     3.      Delivery
 
12              (not applicable when Part III applies, as indicated in Box 37)
 
13         
14             
 
15              The Vessel shall be delivered by the Owners and taken over by the Charterers at the port or place indicated in
16              Box 13 
 
17     (b)     The Vessel shall be properly documented on delivery in accordance with the laws of the flag state indicated in
18              Box 5 and the requirements of the classification society stated in Box 10. 
19             
             

21     (c)     The delivery of the Vessel by the Owners and the taking over of the Vessel by the Charterers shall constitute a
22              full performance by the Owners of all the Owners’ obligations under this Clause 3, and thereafter the Charterers
23              shall not be entitled to make or assert any claim against the Owners on account of any conditions,
24              representations or warranties expressed or implied with respect to the Vessel. 
25             
26             
27             
 
28     4.      Time for Delivery (See Clause 34)
 
29             
30              
31             
32             
33             
34             
35             
 
36     5.      Cancelling (See Clause 33)

37             
38         
39             
40             
41        
42             
43             
44             
45             
46             
47             
48         
 
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
49              .
 
50     6.      Trading Restrictions

51              The Vessel shall be employed in lawful trades for the carriage of suitable lawful merchandise operating within the trading
52              limits indicated in Box 20.
 
53              The Charterers undertake not to employ the Vessel or suffer the Vessel to be employed otherwise than in
54              conformity with the terms of the contracts of insurance (including any warranties expressed or implied therein)
55              without first obtaining the consent of the insurers to such employment and complying with such requirements
56              as to extra premium or otherwise as the insurers may prescribe.

57              The Charterers also undertake not to employ the Vessel or suffer her employment in any trade or business which
58              is forbidden by the law of any country to which the Vessel may sail or is otherwise illicit or in carrying illicit or
59              prohibited goods or in any manner whatsoever which may render her liable to condemnation, destruction,
60              seizure or confiscation.
 
61              Notwithstanding any other provisions contained in this Charter it is agreed that nuclear fuels or radioactive
62              products or waste are specifically excluded from the cargo permitted to be loaded or carried under this Charter.
63              This exclusion does not apply to radio-isotopes used or intended to be used for any industrial, commercial,
64              agricultural, medical or scientific purposes provided the Owners’ prior approval has been obtained to loading
65               thereof.
 
66     7.      Surveys on Redelivery
 
67             

68     -        Between 30 to 45 days prior to re-delivery of the Vessel (or such other date as may be mutually agreed between the Owners and the Charterers), 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 to the Charterers and the Owners, 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 borne by the Charterers. 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. This clause shall not apply if the Charterers exercise their Purchase Option or Purchase Obligation as set out in Clauses 49 and 50 respectively.  
69             
70             
71              .
 
72     8.      Inspection

73              The Owners shall have the right at any time after giving reasonable notice in writing to the Charterers to inspect or survey
74              the Vessel or instruct a duly authorised surveyor to carry out such survey on their behalf:

75     (a)     to ascertain the condition of the Vessel and satisfy themselves that the Vessel is being properly repaired and
76              maintained. The Charterers shall pay for the costs and fees for such inspection or survey up to once every calendar year. For such inspection or survey carried out for the second or subsequent time within a calendar year, without prejudice to paragraphs (b) to (d) below in this Clause, the costs and fees incurred shall be paid by the Owners unless the Vessel is
77              found to require material repairs or maintenance in order to achieve the condition so provided(in which case the Charterers shall pay the costs and fees of such inspection or survey);
 
78     (b)     in dry-dock if the Charterers have not dry-docked Her in accordance with Clause 10(g). The costs and fees for
79              such inspection or survey shall be paid by the Charterers up to once every calendar year (with the Owners bearing the costs and fees for any subsequent inspection made on the same basis in respect of the Vessel in dry-dock within the same calendar year); 
 
80     (c)     for any other commercial reason they consider necessary (provided it does not unduly interfere with the
81              commercial operation of the Vessel). The costs and fees for such inspection and survey shall be paid by the
82              Owners; and.-
(d) the Owner shall be entitled to exercise its rights of inspection or survey under this Clause at any time following the occurrence of a Termination Event which is continuing, after giving reasonable notice in writing to the Charterers (and in such case the costs and fees for such inspection or survey shall be paid by the Charterers).
 
83              All time used in respect of inspection, survey or repairs shall be for the Charterers’ account and form part of the
84              Charter Period. The Charterers shall provide all due and necessary assistance to facilitate the Owners or Owners' surveyor's inspection of the Vessel in accordance with this Clause.
 
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
85              The Charterers shall also permit the Owners to inspect the Vessel’s log books whenever requested and shall
86              whenever required by the Owners furnish them with full information regarding any casualties or other accidents
87              or damage to the Vessel.
 
88     9.      Inventories, Oil and Stores

89              A complete inventory of the Vessel’s entire equipment, outfit including spare parts, appliances and of all
90              consumable stores on board the Vessel shall be made by the Charterers i on
91              delivery and again on redelivery of the Vessel. The Charterers , shall at the time of
92              delivery  take over  all bunkers, lubricating oil, unbroached provisions, paints, ropes
93              and other consumable stores (excluding spare parts) in the said Vessel  at the
94              ports of delivery . The Charterers shall ensure that all spare parts listed in the
95              inventory and used during the Charter Period are replaced at their expense prior to redelivery of the Vessel (if applicable) to the Owners.
 
96     10.    Maintenance and Operation

97     (a)     (i) Maintenance and Repairs - During the Charter Period the Vessel shall be in the full possession and at the
98              absolute disposal for all purposes of the Charterers and under their complete control in every respect. The
99              Charterers shall maintain the Vessel, her machinery, boilers, appurtenances and spare parts in a good state of
100            repair, in efficient operating condition and in accordance with good commercial maintenance practice and,
101             if applicable, at their own expense they shall at all times keep the Vessel’s
102            Class fully up to date with the Classification Society indicated in Box 10 and maintain all other necessary
103            certificates in force at all times.

104            (ii) New Class and Other Safety Requirements - In the event of any improvement, structural changes or new
105            equipment becoming necessary for the continued operation of the Vessel by reason of new class requirements or by compulsory legislation, the Charterers shall ensure that the same are complied with and the time and cost of compliance shall be on the Charterers' account. 
106           
107           
108           
109           
110           
111           
 
112            (iii) Financial Security - The Charterers shall maintain financial security or responsibility in respect of third party
113            liabilities as required by any government, including federal, state or municipal or other division or authority
114            thereof, to enable the Vessel, without penalty or charge, lawfully to enter, remain at, or leave any port, place,
115            territorial or contiguous waters of any country, state or municipality in performance of this Charter without any
116            delay. This obligation shall apply whether or not such requirements have been lawfully imposed by such
117            government or division or authority thereof.
 
118            The Charterers shall make and maintain all arrangements by bond or otherwise as may be necessary to satisfy
119            such requirements at the Charterers’ sole expense and the Charterers shall indemnify the Owners against all
120            consequences whatsoever (including loss of time) for any failure or inability to do so.
 
121   (b)    Operation of the Vessel - The Charterers shall at their own expense and by their own procurement man, victual,
122            navigate, operate, supply, fuel and, whenever required, repair the Vessel during the Charter Period and they
123            shall pay all charges and expenses of every kind and nature whatsoever incidental to their use and operation of
124            the Vessel under this Charter, including annual flag state fees and any foreign general municipality and/or state
125            taxes. The Master, officers and crew of the Vessel shall be the servants of the Charterers for all purposes
126            whatsoever, even if for any reason appointed by the Owners.
 
127            Charterers shall comply with the regulations regarding officers and crew in force in the country of the Vessel’s
128            flag or any other applicable law.

129   (c)      The Charterers shall keep the Owners and any mortgagee(s) advised of the intended employment, planned dry-
130            docking and major repairs of the Vessel, as reasonably required.
 
131   (d)    Flag and Name of Vessel – During the Charter Period, the Charterers shall have the liberty to paint the Vessel in
132            their own colours, install and display their funnel insignia and fly their own house flag. The Charterers shall also
133            have the liberty, with the Owners’ consent,  and which, subject to Clause 42.4, shall be granted in the case of the relevant Flag State, to change the flag and/or
134            the name of the Vessel during the Charter Period. Painting and re-painting, instalment and re-instalment,
135            registration and re-registration, , shall be at the Charterers’ expense and time.
 
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
136   (e)     Changes to the Vessel – Subject to Clause 10(a)(ii), the Charterers shall make no structural changes in the Vessel
137            or changes in the machinery, boilers, appurtenances or spare parts thereof without in each instance first securing
138            the Owners’ approval thereof (such approval not to be unreasonably withheld or delayed).  
                 
139            .
 
140   (f)     Use of the Vessel’s Outfit, Equipment and Appliances - The Charterers shall have the use of all outfit, equipment,
141            and appliances on board the Vessel at the time of delivery, provided the same or their substantial equivalent
142            shall be returned to the Owners on redelivery in the same good order and condition as when received, ordinary
143            wear and tear excepted. The Charterers shall from time to time during the Charter Period replace such items of
144            equipment as shall be so damaged or worn as to be unfit for use. The Charterers are to procure that all repairs
145            to or replacement of any damaged, worn or lost parts or equipment be effected in such manner (both as regards
146            workmanship and quality of materials) as not to diminish the value of the Vessel. Title of any equipment so replaced shall, unless agreed between the Owners and the Charterers, remain with the Owners. The Charterers have the right
147            to fit additional equipment at their expense and risk (provided that no structural damage is caused to the Vessel by reason of such installation) andthe Charterers shall, at their expense remove such equipment and make good any damage caused by the fitting or removal of such additional equipment 
148             if requested by the Owners at the time of redelivery of the Vessel. Any equipment including radio equipment on hire
                  on the Vessel at
149            time of delivery shall be kept and maintained by the Charterers and the Charterers shall assume the obligations
150            and liabilities of the Owners under any lease contracts in connection therewith and shall reimburse the Owners
151            for all expenses incurred in connection therewith, also for any new equipment required in order to comply with
152            radio regulations.

153   (g)     Periodical Dry-Docking - The Charterers shall dry-dock the Vessel and clean and paint her underwater parts
154            whenever the same may be necessary in accordance with Classification Society or Flag State requirements, but not less than once
155           
156           
 
157  11.     Hire  (See Clause 36)

158       
159           
\     
 
   
 
    
.
 
     .
.

    
.
 
   
.
 
   12.    Mortgage

 
  
 
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
(b)*   The Vessel chartered under this Charter may be  financed by  mortgage(s) according to the Financial Instruments.
 
             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 Instruments or as may be directed from time to time
            during the currency of the Charter by the mortgagee(s) in conformity with each Financial Instrument (if any) as long as the requested information and documents are reasonably required. The
            Charterers 
agree to acknowledge each Financial Instrument (if any)  in writing in any form
that may be reasonably
            required by the mortgagee(s). 
 
13.    Insurance and Repairs  (See also Clause 39)

(a)    Without prejudice to Clause 39, 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 but not limited to 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 agreed loss payable clauses, 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
            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.
 
   
The Charterers
 shall timely furnish Owners the  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.
 
(c)     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 each Financial Instrument (if any).
 
(d)     , Should the Vessel become ,
a Ttotal Lloss under the insurances required under sub-clause 13(a), all insurance payments
           for such loss shall be paid to the Owners (or if applicable, its financiers) in accordance with the agreed loss payable clauses.  
The Charterers undertake to notify the Owners and the mortgagee(s), if
, of any occurrences in consequence of which the Vessel is likely to become a Ttotal Lloss 
 
    
 
(f)     For the purpose of insurance coverage against hull and machinery and war risks under the provisions of sub-
            clause 13(a), the value of the Vessel is the sum indicated in 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
 
    
          
           
          
           
 
    
           
 
    
 
)    
           
           
 
    
 
   
           
           
 
    
          
.
 
    
 
    
           
 
     
 
    
 
    
 
15.    Redelivery See Clause 41

           
            
 
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
          
           
           t
.

 
            
 
16.     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(except for Permitted Security Interests). 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 .”
 
17.     Indemnity (See Clauses 42 and 52)

    
           
           
           
           
)    
          
 
18.    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, 
 
19.    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.
 
20.    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.
 
21.    General Average

            The Owners shall not contribute to General Average.
22.    Assignment, Sub-Charter and Sale (See Clause 59)

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
    
           
 
    
.
 
23.    Contracts of Carriage
 
(a)*     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-Visby Rules. The documents shall also contain the New Jason Clause and
            the Both-to-Blame Collision Clause.
 
    
           
 
*Delete as applicable.
 
24.    Corporate  Guarantee

 
            The Charterers undertake to furnish, on or about the date of this Charter  corporate guarantees from the Guarantors 
as guarantee and the other Security Documents at Delivery for full performance of their obligations under this
            Charter.
 
25.    Requisition/Acquisition

(a)     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 if all hire has been
paid by the Charterers hereunder then
           in the event of “Requisition for Hire” any Requisition Hire or compensation is received or receivable by the Owners,
            the same 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.
 
    
           
.
 
26.    War

a)     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.
 
(b)    Without first obtaining the written consent of the Owners and complying with the terms of Clause [39 and such other requirements (including but not limited to payment of extra insurance premiums) as may be prescribed by the insurers, the Vessel   shall not continue to or go through any
 
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
            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.
 
   
           
           
          
 
(e)     The Charterers shall have the liberty:

            (i) 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;

            (ii) 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;

            (iii) 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

 
          
          
           
           
          
 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.
 
   

           
          
.
 
28.     Termination (See Clauses 41 and 45)

    

          
           
           
 
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
 
 
 
 
 
    
 
 
    

 
    
.
 
    
.

   29.    Repossession
 
            Subject to Clause 41, In the event of the termination of this Charter in accordance with the applicable provisions of Clause 45, 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 and the Charterers shall procure that the master and crew follow the orders and directions of 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.
 
30.    Dispute Resolution

   (a)* This Charter and any non-contractual obligations arising out of or in connection with it 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.

            The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its
 
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
            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$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. The language of the arbitration shall be English.

  
          
          
           
 
  
           
 
   
           
          
          
           
          
.
 
.

           
           
 
    
 
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
 
31.     Notices (See Clause 44)

)    
    

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
       

    
               
 
    
 
    
              
 
    
             
 
             
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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
;
 
 
 
    
 
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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
              
               I
.
 
 
.
 
              
               
              
            
 
 
 
 
             
 
 
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
.                    
 
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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

ADDITIONAL CLAUSES TO BARECON 2001


CLAUSE 32
– CHARTER PERIOD
 
32.1
For the avoidance of doubt, 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).
 
32.2
The Charter Period shall, subject to the terms of this Charter, continue for a period of sixty (60) months from the Commencement Date.
 
CLAUSE 33
– CANCELLATION
 
If the MOA expires, is cancelled, terminated, rescinded or suspended or otherwise ceases to remain in full force and effect for any reason, then this Charter shall immediately terminate and be cancelled (with the exception of Clause 52(Indemnities) and other provisions hereof expressed to survive such termination or cancellation) without the need for either of the Owners or the Charterers to take any action whatsoever, save that in case the Vessel is not delivered under the MOA for a reason solely related to a default of the Owners under the terms of the Leasing Documents, then the Owners shall refund the Handling Fee to the Charterers within a reasonable time or if same is not yet paid, the Charterers shall not be obliged to pay such fee.
 
CLAUSE 34
– DELIVERY 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.
 
34.2
The obligation of the Owners to charter the Vessel to the Charterers hereunder is subject to and conditional upon:
 
(a)
the delivery of the Vessel to the Owners as buyers under the MOA by the Charterers as sellers under the MOA and, for the purposes of this Charter, the Vessel shall be deemed delivered to the Charterers simultaneously with delivery of the Vessel to the Owners pursuant to the MOA and at Delivery the Charterers shall, subject to Clause 9 (Inventories, oil and stores), keep all bunkers, lubrication oil, unbroached provisions, paints, ropes and other consumable stores in the Vessel which were delivered under the MOA;
 
(b)
no Potential Termination Event or Termination Event having occurred which is continuing from the date of this Charter to the last day of the Charter Period;
 
(c)
the representations and warranties contained in Clause 47(Representations and warranties) being true and correct on the date hereof and on the Commencement Date;
 
(d)
Delivery occurring on or before the Cancelling Date;
 
(e)
the Owners (by themselves or by their legal counsels) having received from the Charterers:
 

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(i)
on or before the date falling two (2) Business Days (or such other period as the Owners may agree in their sole discretion or as otherwise specified in Part A of Schedule 2) prior to the Prepositioning Date, the documents or evidence set out in Part A of Schedule 2 in form and substance satisfactory to them;
 

 (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, the documents or evidence set out in Part B of Schedule 2 in form and substance satisfactory to them; and
 

 (iii)
after Delivery, the documents and evidence set out in Part C of Schedule 2 in form and substance satisfactory to them within the time periods set out thereunder,
 
and if any of the documents listed in sub-clauses (i) and (ii) above are not in the English language then they shall be accompanied by an English translation.
 
34.3
The conditions precedent and conditions subsequent specified in Clause 34.2(e) are inserted for the sole benefit of the Owners and may be waived or deferred in whole or in part by the Owners. Upon the requirements of Clause 34.2 being fulfilled or waived to the satisfaction of the Owners, the Owners shall give notice thereof in writing to the Charterers.
 
34.4
On delivery to and acceptance by the Buyers of the Vessel under the MOA from the Sellers and subject to the provisions of this Clause (Delivery of Vessel), 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 full use of the Vessel on and subject to the terms and conditions of this Charter.
 
34.5
On Delivery, as evidence of the commencement of the Charter Period, the Charterers shall sign and deliver to the Owners, the Acceptance Certificate. Without prejudice to this Clause (Delivery of Vessel), 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.
 
34.6
Without prejudice to and notwithstanding the provisions of this Clause (Delivery of Vessel), 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 (as buyers) under the MOA from the Sellers, 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.
 
34.7
Subject to Clause 9 (Inventories, oil and stores), the Owners shall not be obliged to deliver the Vessel to the Charterers with any bunkers and unused lubricating oils and greases in storage tanks and unopened drums of the Vessel except for such items which are already on the Vessel on the delivery of the Vessel from the Sellers to the Buyers under the MOA.
 
CLAUSE 35
– QUIET ENJOYMENT
 
35.1
Provided that the Charterers do not breach any terms of this Charter or any other Pertinent Document, the Owners hereby irrevocably and unconditionally agree not to disturb or interfere with the Charterers' lawful use, possession and quiet enjoyment of the Vessel during the Charter Period in any way whatsoever. The Owners shall procure that the Owners' Financier (if any) enter into a quiet enjoyment agreement with the Charterers on such terms (including but not limited to a purchase option in respect of the Vessel given in favour of the Charterers) as may be agreed between the Owners, the Owners' Financier and the Charterers.
 

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CLAUSE 36
– 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 Advance Charterhire and Charterhire in respect of the charter of the Vessel.
 
36.2
On the Commencement Date, the Charterers shall pay to the Owners the Advance Charterhire, payment of which shall be deemed to have been made by the Charterers to the Owners by the Charterers setting off their obligation to pay the Advance Charterhire against the Buyers' obligation to pay a corresponding equivalent amount of part of the Purchase Price under clause 18(b) of the MOA.
 
36.3
Following Delivery, the Charterers shall pay quarterly instalments of Charterhire in advance on each payment date ("Payment Date") as follows:
 

 (a)
in 20 quarterly instalments, the first payable on the Commencement Date and each subsequent instalment to be paid at 3-monthly intervals thereafter, with the amount of each instalment being:
 

 (i)
in respect of each of the 1st to 4th quarterly instalments, US$700,000; and
 

 (ii)
in respect of each of the 5th to 20th quarterly instalments, in an amount equal to 1/16 of the difference between (A) the Initial Charterhire Principal Balance without Balloon and (B) the aggregate amount of the 1st to 4th quarterly instalments due and payable under sub-paragraph (i) above;
 

 (b)
on the Charter Expiry Date, the Charterhire Balloon Instalment; and
 

 (c)
on the Commencement Date and on the first day of every subsequent Term thereafter, the Variable Charterhire.
 
36.4
The Vessel shall not at any time be deemed off-hire and the Charterers' obligation to pay  Charterhire and other amounts payable under this Charter shall be paid in Dollars and shall be absolutely and unconditionally payable 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;
 
(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 modification (including but not limited to the installation of scrubbers) being performed on the Vessel or any part thereof;
 

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(e)
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;
 
(f)
the Total Loss or any damage to or forfeiture or court marshall's or other sale of the Vessel;
 
(g)
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;
 
(h)
any insolvency, bankruptcy, reorganization, arrangement, readjustment, dissolution, liquidation or similar proceedings by or against the Charterers;
 
(i)
any invalidity, unenforceability, lack of due authorization or other defects, or any failure or delay in performing or employing with any of the terms and provisions of this Charter or any of the Pertinent Documents by any party to this Charter or any other person;
 
(j)
any enforcement or attempted enforcement by the Owners of their rights under this Charter or any of the Pertinent Documents executed or to be executed pursuant to this Charter;
 
(k)
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
 
(l)
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.
 
36.5
All payments of Charterhire and any other moneys payable hereunder shall be made in Dollars.
 
36.6
Time of payment of Charterhire and other payments by the Charterers shall be of the essence of this Charter and shall be received by the Owners in same day available funds and not later than 5.00 pm (Shanghai time) on the due date of such payment.
 
36.7
All Charterhire and any moneys payable hereunder shall be payable by the Charterers to the Owners to such account as the Owners may notify the Charterers in writing.
 

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36.8
Payment of Charterhire shall be at the Charterers' risk until receipt by the Owners.
 
36.9
All stamp duty, value added 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. Should such value added tax obligation become established or payable, the Owners shall notify the Charterers immediately in this respect.
 
36.10
If the Charterers fail to make any payment due under this Charter on the due date, they shall pay interest on such late payment at the default rate of two per cent. (2%) per annum above the applicable Interest Rate and accruing from the date on which such payment became due until the date of payment thereof.
 
36.11
All Variable Charterhire, 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 360 day year (or any other period agreed in writing between the Owners and the Charterers).
 
36.12
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.
 
36.13
The Owners shall notify the Charterers of the Interest Rate in respect of a Term as soon as reasonably practicable after such Interest Rate is determined by the Owners on each Quotation Day.
 
CLAUSE 37
– CHANGES TO THE CALCULATION OF INTEREST
 
37.1
Unavailability of Term SOFR
 
(a)
Interpolated Term SOFR:  If no Term SOFR is available for the relevant Term, the applicable Reference Rate shall be the Interpolated Term SOFR for a period equal in length to the relevant Term.
 
(b)
Historic Term SOFR: If no Term SOFR is available for the relevant Term and it is not possible to calculate the Interpolated Term SOFR, the applicable Reference Rate shall be the Historic Term SOFR for the relevant Term.
 
(c)
Interpolated Historic Term SOFR: If paragraph (b) above applies but no Historic Term SOFR is available for the relevant Term, the applicable Reference Rate shall be the Interpolated Historic Term SOFR for a period equal in length to the relevant Term.
 
(d)
Cost of funds:  If paragraph (c) above applies but it is not possible to calculate the Interpolated Historic Term SOFR, there shall be no Reference Rate for the relevant Term and Clause 37.3 (Cost of funds) shall apply to the Charterhire Principal Balance for that Term.
 

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37.2
Market disruption.
 
If, in relation to any Term, the Owners determine (which determination shall be conclusive and binding) that the Reference Rate does not reflect the cost of funds of the Owners, the Owners shall notify the Charterers accordingly and Clause 37.3 (Cost of funds) shall apply for such Term.
 
37.3
Cost of funds.
 

 (a)
If this Clause 37.3 (Cost of funds) applies to the Charterhire Principal Balance for a Term, the Interest Rate shall be the rate per annum which is the sum of:
 

 (A)
the Margin; and
 

 (B)
the cost certified by the Owners (expressed as an annual rate of interest) of funding the Charterhire Principal Balance during the relevant Term (as reasonably determined by the Owners).
 

 (b)
If this Clause 37.3 (Cost of funds) applies and the Charterers so require, the Owners and the Charterers 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.
 

 (c)
Subject to Clause 37.4 (Changes to reference rates) below, any substitute or alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of the Owners and the Charterers, be binding on all Parties.
 

 (d)
If any rate notified by the Owners under sub-paragraph (B) of paragraph (a) above is less than zero, the relevant rate shall be deemed to be zero.
 
37.4
Changes to reference rates
 
If a Published Rate Replacement Event has occurred in relation to any Published Rate, the Owners are entitled to make any amendment or waiver to the terms of the Leasing Documents (at the Charterers' costs) which relates to:
 

 (a)
providing for the use of a Replacement Reference Rate 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


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(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),

may be made with the consent of the Owners and the Charterers.

37.5
For the purposes of Clause 37.4 (Changes to reference rates):
 
"Published Rate" means Term SOFR for three (3) months.

"Published Rate Contingency Period" means ten (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 Owners, materially changed;


(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:


(i)
the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Owners) temporary; or


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(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 Owners, that Published Rate is otherwise no longer appropriate for the purposes of calculating interest under this Charter.

"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 benchmark 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 Owners, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor or alternative to that Published Rate; or


(c)
in the opinion of the Owners, an appropriate successor or alternative to a Published Rate.

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 of any Security Interest thereon other than Permitted Security Interests.
 
38.2
The Charterers shall promptly notify in writing any party (as the Owners may reasonably request), including any Approved Sub-charterer, that the Vessel is the property of the Owners and the Charterers shall provide the Owners with a copy of such written notification and satisfactory evidence that such party has received 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 losses, costs or charges incurred by the Owners by reason thereof in re-taking possession or otherwise in re-acquiring the Vessel.
 

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38.4
The Charterers shall pay and discharge or cause any permitted sub-lessee of the Vessel, including any Approved Sub-charterer, 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 and take all reasonable steps to prevent an arrest (threatened or otherwise) of the Vessel.
 
Clause 39
– INSURANCE
 
39.1
The Charterers shall at their expense procure that such insurances are effected at all times during the Charter Period in form and substance satisfactory to the Owners and the Owners' Financier (if any):
 
(a)
in Dollars;
 
(b)
in the case of hull & machinery (including excess risk), fire and usual marine risks and war risks, on an agreed value basis of at least the higher of (i) one hundred and twenty per cent (120%) of the Charterhire Principal Balance at the relevant time and (ii) the applicable Market Value of the Vessel at the relevant time;
 
(c)
in the case of oil pollution liability risks for the Vessel, for an aggregate amount equal to the highest level of cover from time to time available under protection and indemnity club entry and in the international marine insurance market and for an amount of not less than US$1,000,000,000;
 
(d)
in relation to protection and indemnity risks, in respect of the full tonnage of the Vessel and with a member of the International Group of P&I Clubs or such other independent and reputable protection and indemnity club member (in each case, which is acceptable to the Owners and the Owners' Financier (if any));
 
(e)
on customary terms acceptable to the Owners and the Owners' Financier (if any); and
 
(f)
with first class international insurers and/or underwriters notified to the Owners (or in the case of war risks and protection and indemnity risks, with approved war risks and protection and indemnity risks associations) with a minimum of Standard & Poor's rating of A or above, Moody's rating of A or above or AM Best rating of A- or above, unless otherwise acceptable to the Owners;
 
39.2
In addition to the terms set out in Clause 13(a), the Charterers shall procure that the obligatory insurances shall:
 
(a)
subject always to paragraph (b), name the Owners, the Approved Managers 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;
 

 (1)
to any provable out-of-pocket expenses that they have 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 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,
 

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and every other named assured or co-assured has undertaken in writing to the Owners or the Owners' Financier if any (in such form as they may reasonably require) that any deductible shall be apportioned between the Charterers and every other named assured or co-assured in proportion to the gross claims made or paid by each of them and that they shall do all things necessary and provide all documents, evidence and information to enable the Owners and the Owners' Financier (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 or the Owners' Financier (if any) requires:
 

 (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 financiers, 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; and
 

 (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;
 

 (iii)
name the Owners' Financier (as applicable) and the Owners (as applicable) as respectively the first ranking loss payee and the second ranking loss payee (and in the absence of any financiers, name the Owners as first ranking loss payee) in accordance with the terms of the relevant loss payable clauses approved by the Owners' Financier 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' Financier (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' Financier (as applicable) shall be made without set-off, counterclaim or deductions or condition whatsoever;
 
(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' Financier (if any);
 
(e)
provide that the Owners and/or the Owners' Financier (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' Financier (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' Financier (if any) for thirty (30) days after receipt by the Owners and/or the Owners' Financier (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 lesser period agreed by the parties), notify in writing the Owners (copied to the Owners' Financier (if any)) of the terms and conditions of all Insurances;
 
(b)
at least ten (10) days (or such other lesser period agreed by the Owners) before the expiry of any obligatory 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 that obligatory insurance and of the proposed terms of renewal;
 

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(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 insurance 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, 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(c) 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' Financier (if any).
 
39.4
The Charterers shall ensure that all insurance companies and/or underwriters, and/or (if any) insurance brokers provide the Owners with copies of all policies, cover notes and certificates of entry relating to the obligatory insurances which they are to effect or renew and of a letter or letters or undertaking in a form required by the Owners and/or the Owners' Financier 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;
 
(b)
they will hold the benefit of such policies and such insurances, to the order of the Owners and/or the Owners' Financier (if any) and/or such other party in accordance with the said loss payable clause;
 
(c)
they will advise the Owners and the Owners' Financier (if any) promptly of any material change to the terms of the obligatory insurances of which they are aware;
 
(d)
following a written application from the Owners and/or the Owners' Financier (if any) not later than one (1) month before the expiry of the obligatory insurances they will notify the Owners and the Owners' Financier (if any) not less than twelve (12) 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' Financier (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' Financier (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 and/or the Owners' Financier (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' Financier (if any) with:
 
(a)
a copy of the certificate of entry for the Vessel as soon as such certificate of entry is issued;
 

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(b)
a letter or letters of undertaking in such form as may be required by the Owners and the Owners' Financier (if any) or in such association's standard form; and
 
(c)
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 the Vessel.
 
39.6
The Charterers shall ensure that all policies relating to obligatory insurances are deposited with the insurance brokers 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 and produce all relevant receipts when so required by the Owners.
 
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 39 (Insurance)) 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 associations);
 
(b)
the Charterers shall not make or permit any changes relating to the classification or classification society except with the prior written approval of the Owners (not to be unreasonably withheld or delayed in the case of a change of classification society to another member of the International Association of Classification Societies), provided that the Owners shall be entitled to withhold their consent if such change in classification or classification society adversely affects the insurance cover required under Clause 39 (Insurance).
 
(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 the 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 and/or the Owners' Financier (if any), such consent not be unreasonably withheld or delayed, and for the purposes of this Clause 39.10, "material" alterations shall include, without limitation, any change to the identity of the beneficiaries under such insurances or scope of cover, reduction to the insured amount (if such reduction results in the Charterers failing to comply with the requirements of Clause 39 (Insurance) below), limitation on the scope of the cover (if such limitation in scope results in the Charterers failing to comply with the requirements of Clause 39 (Insurance) below) and any other amendment which would cause a breach under the terms of this Charter or any other Leasing Document.
 

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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 upon written request, copies of:
 
(a)
all material communications between the Charterers and:
 

 (i)
the insurance brokers; and
 

 (ii)
the approved protection and indemnity and/or war risks associations; and
 

 (iii)
the first class international insurers and/or underwriters, which relate directly or indirectly to:
 

 (A)
the Charterers' obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
 

 (B)
any credit arrangements made between the Charterers and any of the persons referred to in paragraphs (i) or (ii) relating wholly or partly to the effecting or maintenance of the obligatory insurances; and
 
(b)
any material communication with all parties involved in case of a claim under any of the Vessel's insurances.
 
39.13
The Charterers shall promptly provide the Owners (or any persons which they may designate) with:
 
(a)
any information which the Owners or the Owners' Financier (or any such designated person) request for the purpose of:
 

 (i)
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, in accordance with Clause 39.17; and/or
 

 (ii)
effecting, maintaining or renewing any such insurances as are referred to in Clause 13(a) or dealing with or considering any matters relating to any such insurances; and
 
(b)
after the occurrence of a Termination Event which is continuing, copies of all material communications between all parties in case of a claim under any of the Vessel's insurances.
 
39.14
If one or more of the obligatory insurances are not effected and maintained with first class international insurers or are effected with an insurance or captive subsidiary of the Owners or the Charterers, then the Charterers shall procure, at their own expense, that the relevant insurers maintain in full force and effect facultative reinsurances with reinsurers and through brokers, in each case, of recognised standing and acceptable in all respects to the Owners. Any reinsurance policy shall include, if and when permitted by law, a cut-through clause in a form acceptable to the Owners.  The Charterers shall procure that underwriters of the primary insurances assign each reinsurance to the relevant financiers in full, if required.
 

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39.15
The Charterers shall upon demand fully indemnify the Owners in respect of all premiums and other documented expenses which are reasonably incurred by (i) the Owners in connection with or with a view to effecting, maintaining or renewing a lessor's/innocent owner's interest insurance and a lessor's/innocent owner's additional perils (pollution) insurance (which shall each cover at least 120% of the then Charterhire Principal Balance)  that is taken out in respect of the Vessel and/or (ii) the Owners' Financier (if any) in connection with or with a view to effecting, maintaining or renewing a mortgagee's interest insurance and a mortgagee's additional perils (pollution) insurance that is taken out in respect of the Vessel (which shall be on such terms as requested by the Owners' Financier from time to time).
 
39.16
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, reasonable wear and tear to the Vessel only excepted.
 
39.17
The Charterers shall:
 
(a)
If so requested by the Owners, but at the expense of the Charterers, furnish the Owners once a year (or, after a Termination Event has occurred and is continuing, as many times per year as the Owners may require) with a detailed report signed by an independent firm of marine insurance brokers appointed by the Owners dealing with the Insurances and stating the opinion of such firm as to the adequacy of the Insurances;
 
(b)
reimburse the Owners any documented expenses customarily incurred by the Owners in obtaining the reports described in Clause 39.17(a); and
 
(c)
procure that there is delivered to the insurance brokers described in Clause 39.17(a) such information in relation to the Insurances as such brokers may reasonably require.
 
39.18
The Charterers shall keep the Vessel insured at their expense against such other risks which the Owners or the Owners' Financier consider reasonable for a prudent shipowner or operator to insure against at the relevant time (as notified by the Owners, taking into account recommendations from the Owners' insurance advisors, shipping industry associations or regulatory institutions) and which are, at that time, generally insured against by owners or operators of vessels similar to the Vessel (including but not limited to kidnap and ransom insurances, which the Charterers acknowledge shall fall within the scope of this Clause).
 
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 which has been purchased by the Buyers from the Sellers pursuant to the MOA 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 or the other Leasing Documents.
 

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CLAUSE 41
– TERMINATION, REDELIVERY AND TOTAL LOSS
 
41.1
If the Termination Purchase Price becomes payable in accordance with Clause 45.2  or Mandatory Sale Price becomes payable in accordance with Clause 46 (Mandatory Sale), it is agreed by the Parties that (i) payment of the Termination Purchase Price is deemed to be proportionate as to amount, having regard to the legitimate interests of the Owners, in protecting against the Owners' risk of the Charterers failing to perform its obligations under this Charter or (ii) payment of the Mandatory Sale Price becomes is deemed to be proportionate as to amount, having regard to the legitimate interests of the Owners, in protecting against the Owners' risk of being required to sell the Vessel to the Charterers upon the occurrence of any of the events described under Clause 46 (Mandatory Sale).
 
41.2
Upon the Termination Notice Date or Mandatory Sale Date, the Charterers' right to possess and operate the Vessel shall immediately cease (without in any way affecting the Charterers' obligation to pay the Termination Purchase Price or Mandatory Sale Price, as the case may be).
 
41.3
Upon irrevocable receipt by the Owners in full of the (i) Termination Purchase Price pursuant to Clause 45.2  or (ii) the Mandatory Sale Price pursuant to Clause 46 (Mandatory Sale):
 
(a)
this Charter shall terminate (provided that any provision hereof expressed to survive such termination shall do so in accordance with its terms); and
 
(b)
the Owners shall 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 created by the Owners, and in this regard shall execute a bill of sale and a protocol of delivery and acceptance evidencing the same and such sale shall be completed in accordance with Clause 51(Sale of the Vessel to the Charterers).
 
41.4
If the Charterers fail to make any payment of the Termination Purchase Price or Mandatory Sale Price on the due date thereof:
 
(a)
interest on such outstanding amount shall accrue in accordance with Clause 36.10; and

(b)
the Charterers shall:


(i)
upon the Owners' prior written request (at the Owners' sole discretion), be obliged to (and at the Charterers' own cost) redeliver the Vessel to the Owners at such ready and nearest safe port as the Owners may require and taking into account the Vessel's then employment schedule; further and for the avoidance of doubt, the Owners shall be entitled (at the 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.  The Earnings in respect of the Vessel during such period less its operational expenses (including without limitation any maintenance costs of, and costs for bunkering, lubricants or oils for, the Vessel) shall be applied against the Termination Purchase Price or Mandatory Sale Price (as the case may be) and any other amounts payable under the Leasing Documents in any manner the Owners deem fit and any excess of such amount after such application shall be paid to the Charterers.  Upon redelivery of the Vessel this Charter shall terminate save for the provisions set out in Clause 30 (Dispute resolution), Clause 36.10, this Clause 41 (Termination, Redelivery and Total Loss) and Clause 52(Indemnities) and any other provisions expressed or implied to survive termination; and/or
 

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(ii)
the Owners shall at any point following such redelivery be entitled (at the Owners' sole discretion) to sell the Vessel on terms they deem fit (an "Owners' Sale") in which case the sale proceeds (after deducting all fees, taxes, disbursements, any maintenance costs of, and costs for bunkering or oils for, the Vessel and any other documented costs and expenses incurred by the Owners in connection with such sale) (the "Net Sales Proceeds") derived from such sale shall be applied against the Termination Purchase Price or Mandatory Sale Price (as the case may be) and any other amounts payable under Clause 52(Indemnities) in any manner the Owners deem fit and any excess of such amount after such application shall be paid to the Charterers.  If the Net Sales Proceeds are not in an amount sufficient to discharge in full the Termination Purchase Price or Mandatory Sale Price (as the case may be) and any other amounts payable under Clause 52(Indemnities), the Charterers shall continue to be liable for the shortfall and interest shall continue to accrue on such shortfall in accordance with Clause 36.10. Upon completion of such Owners' Sale this Charter shall terminate save for Clause 36.10, this Clause 41.4(b)(ii), Clause 52(Indemnities) and any other provisions expressed or implied to survive termination; or
 
(c)
the Charterers shall, upon the Owners' prior written request (at the Owners' sole discretion) be obliged to (and at the Charterers' own cost) redeliver the Vessel to the Owners at such ready and nearest safe port as the Owners may require and taking into account the Vessel's then employment schedule; and as from such redelivery the Owners shall maintain ownership of such Vessel and own, operate or sell or otherwise use it in any manner they deem fit and apply the then current Market Value of the Vessel (the "Termination Value") against the Termination Purchase Price or Mandatory Sale Price (as the case may be) and all other amounts payable to the Owners under this Charter in which case if:


(i)
the amount of the Termination Value is in excess of the aggregate amounts due to the Owners under the Leasing Documents at the relevant time, such excess will be paid to the Charterers; or
 

 (ii)
in case the amount of the Termination Value is not sufficient to discharge in full the aggregate amounts due to the Owners under the Leasing Documents following such application the Charterers shall continue to be liable for the shortfall and interest shall continue to accrue on such shortfall in accordance with Clause 36.10.
 
(d)
Any terms expressly provided to survive post-termination of this Charter shall continue to be in full force and effect at all times thereafter.

41.5
If the Charterers are required to redeliver the Vessel to the Owners pursuant to Clause 41.4, the Charterers shall ensure that the Vessel shall, at the time of redelivery to the Owners (at the Charterers' cost and expense):
 
(a)
be in compliance with its Insurances;
 
(b)
be in an equivalent class as she was as at the Commencement Date without any overdue recommendation or condition, and with valid 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;
 

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(c)
have passed her 5-year and if applicable, 10-year special surveys, and subsequent second intermediate surveys and drydock at the Charterers' time and expense without any overdue condition or outstanding issue and to the satisfaction of the Classification Society;
 
(d)
have her survey cycles up to date and trading and class certificate valid for at least the number of months agreed in Box 17;
 
(e)
be redelivered to the Owners together with all spare parts and spare equipment as were on board at the time of Delivery (but only to the extent they have not already been used in the operation of the Vessel), 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;
 
(f)
be free of any cargo and Security Interest (other than Permitted Security Interests);
 
(g)
be free of any charter unless the Owners wish to retain the continuance of any then existing charter;
 
(h)
be free of officers and crew (unless otherwise agreed by the Owners);
 
(i)
have had her underwater parts treated with ample anti-fouling to last for the ensuing period up to the next scheduled dry docking of the Vessel; and
 
(a)
be redelivered to the Owners together with all material information generated during the Charter Period in respect of the use, possession, operation, navigation, utilization of lubricating oil and the physical condition of the Vessel, whether or not such information is contained in the Charterers' equipment, computer or property.
 
41.6
The Owners shall, (unless otherwise agreed) at the time of the redelivery of the Vessel, take over all bunkers, lubricating oil, unbroached provisions, paints, ropes and other consumable stores (excluding spare parts) in the Vessel at no cost to the Owners.
 
41.7
If the Vessel, for any reason, becomes a Total Loss after Delivery, the Charterers shall pay the Termination Purchase Price to the Owners on the earlier of:
 
(a)
the date falling one hundred and eighty (180) days after such Total Loss has occurred; and
 
(b)
the date of receipt by the Owners and/or the Owners' Financier (if any), in accordance with the terms of the relevant loss payable clause, of the proceeds of insurance relating to such Total Loss,
 
provided that it is hereby agreed that any insurance proceeds in respect of the Vessel received by the Owners or the Owners' Financier shall be applied in or towards discharging the Charterers' obligation to pay the Termination Purchase Price  and any interest accrued thereon (and such application shall be deemed satisfaction of the Charterers' obligation to pay the Termination Purchase Price to the extent so satisfied) and in the event that the insurance proceeds received from the insurers exceed the Termination Purchase Price due (and any interest accrued thereon), the excess shall be firstly paid towards satisfying any amounts outstanding and owing by the Charterers and thereafter paid to the Charterers by way of rebate of hire.
 
For the avoidance of doubt, in the event that the Vessel becomes a Total Loss:
 

 (A)
payment of Charterhire and all other sums payable hereunder during such period shall continue to be made by the Charterers in accordance with the terms of this Charter unless and until the Owners receive the Termination Purchase Price whereby this Charter shall terminate (without prejudice to any provision of this Charter expressed to survive termination);
 

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(B)
should insurance proceeds be received by the Owners or the Owners' Financiers in their capacity as assignee (pursuant to assignment of such insurances from the Owners to the Owners' Financiers) from the insurers, the Charterers' obligations to pay the Termination Purchase Price shall be accordingly reduced by such insurance proceeds but in the event that such insurance proceeds be less than the amount of the Termination Purchase Price together with any interest accrued thereon, the Charterers remain obliged to pay to the Owners the balance so that the full amount of the Termination Purchase Price due together with any interest accrued thereon are received by the Owners;
 

  (C)
the obligation of the Charterers to pay the Termination Purchase Price 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.
 
41.8
The Owners shall have no obligation to supply to the Charterers with a replacement vessel following the occurrence of a Total Loss.
 
CLAUSE 42
– FEES AND EXPENSES
 
42.1
In consideration of the Owners entering into this Charter, the Charterers shall pay to the Owners or its nominee a non-refundable handling fee (the "Handling Fee") at such time and in such amount to be set out in a Handling Fee Letter.
 
42.2
Without prejudice to any other rights of the Owners hereunder, the Charterers shall promptly pay to the Owners on written demand on a full indemnity basis the amount of all documented costs, charges and expenses incurred by the Owners in collecting any Charterhire or other payments not paid on the due date under this Charter and in remedying any other failure of the Charterers to observe the terms and conditions of this Charter.
 
42.3
All documented costs and expenses (including, but not limited to, negotiation costs, inspections, valuations, legal fees, insurance reports, registration costs in the Flag State and any other expenses) customarily incurred by the Owners in connection with the negotiation and entry into all documentation in relation to this Charter and the Leasing Documents, shall be for the account of the Charterers (for the avoidance of doubt, regardless of whether the Commencement Date occurs), provided that the Charterers' liability for such costs and expenses shall be capped at US$100,000 in aggregate in connection with this Charter and the Other Charters (unless otherwise agreed in writing by the Owners and the Charterers) .
 
42.4
All documented costs and expenses customarily incurred by the Owners in relation to the acquisition and registration of the Vessel and this Charter by the Owners 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) payable by the Owners to such Flag State to maintain and/or renew such registration shall be for the account of the Charterers (for the avoidance of doubt, regardless of whether the Commencement Date occurs). 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.
 
42.5
If the Charterers request for a change of Flag State, the Charterers shall pay or reimburse the Owners (as the case may be) in respect of all documented costs, expenses and/or taxes which are payable to effect such change.
 
CLAUSE 43
- NO WAIVER OF RIGHTS
 
43.1
No neglect, delay or indulgence on the part of either Party in enforcing the terms and conditions of this Charter 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.
 

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43.2
No right or remedy conferred upon either Party by this Charter 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 44
- NOTICES
 
44.1
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 addresses:
 
 
(A)
to the Owners:
c/o AVIC International Leasing Co., Ltd
16/F, Hangrong Mansion, 1481 Guozhan Road, Pudong,
Shanghai, China, 200126
Attention: Ryan Zhang
Ship Leasing Dept.
Tel: +86-21-22262623
Email: zhangqiang@chinaleasing.net
   

 
(B)
to the Charterers:
c/o Seanergy Maritime Holdings Corp.
154 Vouliagmenis Avenue, 16674, Glyfada, Greece   
Attention: Mr. Stavros Gyftakis
Email: legal@seanergy.gr, finance@seanergy.gr 
Tel: +30 213 018 507

or, if a party hereto changes its address or e-mail address, to such other address or e-mail address as that Party may notify to the other.
 
CLAUSE 45
– TERMINATION EVENTS
 
45.1
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 make any payment within five (5) Business Days of its due date or on demand in accordance with the terms of any Leasing Document to which it is a party, unless such failure to pay is caused by a technical error and payment is made within five (5) Business Days of its due date;
 
(b)
the Charterers breach or omit to observe or perform any of their undertakings in Clause 48.1(j), (k), (l), (o), (p), (q), (r), (s), (t) or (u) or the Guarantor breaches or omits to observe or perform any of its undertakings contained in the Guarantee, provided that no Termination Event under this Clause 45.1(b) will be triggered if the breach or omission to observe or perform falls within the situations set out under Clause 46 (Mandatory Sale);
 
(c)
the Charterers fail to obtain and/or maintain the Insurances required under Clause 39 (Insurance) in accordance with the provisions thereof or any insurer in respect of such Insurances cancels the Insurances or disclaims liability with respect thereto;
 

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(d)
any Relevant Person commits any other breach of, or omits to observe or perform, any of their other obligations or undertakings in this Charter or any other Leasing Document (other than a breach referred to in paragraphs (a), (b) or (c) above) unless such breach or omission is in the reasonable opinion of the Owners, remediable and such Relevant Person remedies such breach or omission to the satisfaction of the Owners within ten (10) Business Days of the earlier of (i) notice thereof from the Owners and (ii) upon such Relevant Person upon becoming aware of the same;
 
(e)
any representation or warranty made by any Obligor in or pursuant to any Leasing Document to which it is a party or in any notice or other document, certificate or statement delivered by it pursuant thereto or in connection therewith is or proves to be untrue or misleading in a material way when it is made;
 
(f)
any of the following occurs in relation to any Financial Indebtedness of an Obligor (other than an Approved Manager which is not an Affiliate of the Obligors):
 

 (i)
any Financial Indebtedness of such Obligor is not paid when due or, if so payable, on demand after any applicable grace period has expired; or
 

 (ii)
any Financial Indebtedness of such Obligor becomes due and payable, or declared to be due and payable, prior to its stated maturity date as a consequence of any event of default and not as a consequence of the exercise of any voluntary right of prepayment, following the expiry of any applicable grace period; or
 

 (iii)
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 Obligor 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 after any applicable grace period has expired,
 
and no Termination Event will occur under this paragraph if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within sub-paragraphs (i) to (iii) above is (I) less than US$5,000,000 (or its equivalent in any other currency) in respect of the Guarantor or (II) less than US$500,000 (or its equivalent in any other currency) in respect of the Charterers.
 
(g)
any of the following occurs in relation to an Obligor:
 

 (i)
it becomes unable to pay their debts as they fall due; or
 

 (ii)
in the case of any Obligor other than the Guarantor, any of its assets (with a value amounting in aggregate to US$500,000 are subject to any form of execution, attachment, arrest, sequestration or distress (or any analogous process in any jurisdiction) which is not discharged within forty five (45) days;
 

 (iii)
in the case of the Guarantor, any of its assets are subject to any form of execution, attachment, arrest, sequestration or distress (or any analogous process in any jurisdiction) which is not discharged within forty five (45) days and which results in or is reasonably likely to result in a Material Adverse Effect;
 

 (iv)
any administrative or other receiver is appointed over all or a substantial part of the assets of such Obligor unless as part of a solvent reorganisation which has been approved by the Owners; or
 

 (v)
it makes any formal declaration of bankruptcy or any formal statement to the effect that they are insolvent or likely to become insolvent, or a winding up or administration order is made in relation to such Obligor, or the shareholders or directors of such Obligor pass a resolution to the effect that they should be wound up, placed in administration or cease to carry on business; or
 

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(vi)
a petition is presented in any Relevant Jurisdiction for the winding up or administration, or the appointment of a provisional liquidator, of an Obligor unless the petition is being contested in good faith and on substantial grounds and is dismissed or withdrawn within thirty (30) days of the presentation of the petition; or
 

 (vii)
an Obligor petitions a court, or presents any proposal for, any form of judicial or non-judicial suspension or deferral of payments, reorganisation of their debt (or certain of their 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; or
 

 (viii)
any meeting of the shareholders or board of directors of an Obligor is summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraph (ii) to (vii) above; or
 

 (ix)
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 referred to in paragraphs (ii) to (vii) above inclusive;
 
(h)
an Obligor (other than a third-party Approved Manager) suspends or ceases or threatens to suspend or cease carrying on all or a material part of its business;
 
(i)
any consent, approval, authorisation, license or permit necessary to enable the Charterers to operate or charter the Vessel or to enable any of them to comply with any provision of this Charter or the other Leasing Documents to which it is a party or to ensure that the obligations of the Charterers  are legal, valid, binding or enforceable is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent, approval, authorisation, license or permit is not fulfilled;
 
(j)
any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect;
 
(k)
the Vessel is subject to any form of execution, attachment, arrest, sequestration or distress which is not discharged within sixty (60) days (or such longer period as the Owners may agree);
 
(l)
this Charter or any Security Interest created by a Leasing 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;
 
(m)
an Obligor rescinds or purports to rescind or repudiates or purports to repudiate a Leasing Document;
 
(n)
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 to maintain or give effect to any of its obligations under this Charter or any of the other Leasing Documents to which it is a party in the manner it is contemplated under such Pertinent Document or any of the obligations of any Obligor under any Pertinent Document to which it is a party are not or cease to be legal, valid, binding and enforceable;
 
(o)
the Security Interest constituted by any Leasing Document is in any way imperilled or in jeopardy;
 
(p)
the Vessel is not delivered latest by the Cancelling Date; or
 
(q)
any Termination Event (as defined in any Other Charter) occurs under such Other Charter.
 
45.2
Upon the occurrence of a Termination Event which is continuing, the Owners shall be entitled to notify in writing the Charterers of the occurrence of the same, terminating this Charter and demanding payment of the Termination Purchase Price, whereupon the Charterers shall be obliged to pay to the Owners the Termination Purchase Price on the date (the "Termination Notice Date") specified by the Owners in their discretion in the said notice (which shall not occur earlier than 15 Business Days following the date which the Owners provide such notice to the Charterers).
 
45.3
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.
 
45.4
Without limiting the generality of the foregoing or any other rights of the Owners, upon the occurrence of a Termination Event which is continuing, the Owners shall have the sole and exclusive right and power to (i) settle, compromise, compound, adjust or defend any actions, suits or proceedings 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 (iii) change or appoint a new manager for the Vessel to another Approved Manager, and the appointment of the pre-existing Approved Manager may be terminated immediately without any recourse to the Owners in line with the terms of the Approved Management Agreement.
 
CLAUSE 46
– MANDATORY SALE
 
46.1
If any of the following occurs:
 
(a)
it becomes unlawful in any applicable jurisdiction for the Owners to perform any of their obligations as contemplated by any Leasing Document or for the Owners' Financiers (if any) to perform their obligations under the Financial Instruments;
 
(b)
any Sanctions imposed by the law or regulation of the People's Republic of China deviates from those imposed by the United Nations and compliance with such Sanctions is or has become:
 

 (i)
illegal or unlawful; or
 

 (ii)
unduly onerous (including, without limitation, a scenario where Charterers are not able to perform their global operation and trading, directly because of such Sanctions) or wholly impractical,
 

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for the Charterers or Guarantor to comply with while maintaining or giving effect to any of their obligations under this Charter or any of the other Leasing Documents to which they are respectively a party to;
 
(c)
the Approved Sub-charterer or any Third Party Approved Manager, or any of their respective directors or officers, is or becomes a Restricted Person, unless (i) such Approved Sub-charterer is replaced under a substitute Approved Sub-charter in accordance with Clause 48.1(o) or Third Party Approved Manager is being replaced under a substitute Approved Management Agreement in accordance with Clause 48.1(v)(ii), as the case may be, and in each case within 20 Business Days from the date of occurrence of the aforesaid event  and (ii) during such cure period as mentioned in sub-paragraph (i) above, in the Owners' opinion, there is no risk that the Owners are in breach of Sanctions by continuing to perform their obligations under any Leasing Document;
 
(d)
the Approved Sub-charterer or any Third Party Approved Manager acts in breach of any laws or regulations relating to the Vessel and its ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code, all Environmental Laws, the laws of the Vessel's registry, all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws, unless (i) such Approved Sub-charterer is replaced under a substitute Approved Sub-charter in accordance with Clause 48.1(o) or Third Party Approved Manager is being replaced under a substitute Approved Management Agreement in accordance with Clause 48.1(v)(ii), as the case may be, and in each case within 20 Business Days from the date of occurrence of the aforesaid event and (ii) during such cure period as mentioned in sub-paragraph (i) above, in the Owners’ opinion there is no risk that the Owners are in breach of Sanctions by continuing to perform their obligations under any Leasing Document; or
 
(e)
any consent, approval, authorisation, license or permit necessary to enable an Approved Sub-charterer to operate or charter the Vessel is not granted, expires without being renewed or is revoked, in each case for a period of more than 30 days, and notwithstanding the above the Approved Sub-charterer continues operating the Vessel,
 
the Charterers shall, in consideration of the Owners transferring all the Owners’ legal and beneficial title in the Vessel to the Charterers, pay the Mandatory Sale Price to the Owners on the date specified by the Owners (being no earlier than the last day of any applicable grace period permitted by law) in a written notice (“Mandatory Sale Notice") delivered by the Owners to the Charterers (such payment date being subject to the consultation period under Clause 46.2 below and in any case not earlier than fifteen (15) Business Days following the date which the Owners provide the Mandatory Sale Notice to the Charterers), and this Charter shall terminate in accordance with the procedures set out in Clause 41 (Termination, Redelivery and Total Loss).

46.2
If the Mandatory Sale Price becomes payable under this Clause 46 (Mandatory Sale), the Owners shall in good faith consult with the Charterers for the Owners or any Obligors to take all reasonable steps to mitigate any such circumstances, provided that:
 
(a)
this Clause 46 (Mandatory Sale) does not in any way limit the obligations of any Obligor under any Leasing Documents;
 
(b)
the Owners are not obliged to take any steps or enter into any consultation with the Charterers under this Clause 46 (Mandatory Sale) if, in the opinion of the Owners, to continue performing the Owners’ obligations under the Leasing Documents may be prejudicial to the Owners; and
 
(c)
subject to sub-paragraphs (a) and (b) above and unless otherwise agreed in writing between the Owners and the Charterers, such consultation period shall expire sixty (60) days from the earlier of (i) the date of occurrence of the circumstances resulting in the Mandatory Sale Price becoming payable under this Clause 46 (Mandatory Sale) and (ii) the date of the Mandatory Sale Notice, following which the Charterers shall immediately pay the Mandatory Sale Price to the Owners.
 

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CLAUSE 47
REPRESENTATIONS AND WARRANTIES
 
47.1
The Charterers represent and warrant to the Owners as of the date hereof, and on each day henceforth until the last day of the Charter Period (unless otherwise stated expressly to the contrary below), as follows:
 
(a)
as at the date of this Charter, the Charterers are (i) wholly legally owned and controlled by the Shareholder and (ii) wholly beneficially owned and controlled by the Guarantor;
 
(b)
each Obligor is duly incorporated and validly existing under the laws of its jurisdiction of its incorporation;
 
(c)
each Obligor has the corporate capacity, and has taken all corporate actions and obtained all consents, approvals, authorisations, licenses or permits necessary for it:
 

 (i)
to execute each of the Pertinent Documents to which it is a party; and
 

 (ii)
to comply with and perform its obligations under each of the Pertinent Documents to which it is a party;
 
(d)
the entry into and performance by any Obligor by it of, and the transactions contemplated by, each Pertinent Document to which it is a party do not and will not conflict with:
 

 (i)
any law or regulation applicable to it;
 

 (ii)
its constitutional documents; or
 

 (iii)
any agreement or instrument binding upon it or constitute a default or termination event (however described) under any such agreement or instrument.
 
(e)
all the consents, approvals, authorisations, licenses or permits referred to in Clause 47.1(c) remain in force and nothing has occurred which makes any of them liable to revocation;
 
(f)
each of the Pertinent Documents to which an Obligor is a party constitutes such Obligor’s legal, valid and binding obligations enforceable against such party in accordance with its respective terms and any relevant insolvency laws affecting creditors’ rights generally;
 
(g)
no third 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 or any moneys payable hereunder and/or any of the other Leasing Documents;
 
(h)
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 the jurisdiction of incorporation;
 
(i)
no legal or administrative action (i) involving the Charterers involving claim(s) amounting in aggregate to more than US$100,000 or (ii) involving the Guarantor involving a claim which results in or is reasonably likely to result in a Material Adverse Effect, has been commenced or taken;
 
(j)
each Obligor has paid all taxes applicable to, or imposed on or in relation to it, its business or if applicable, the Vessel, except for those being contested in good faith with adequate reserves;
 

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(k)
the choice of governing law as stated in each Pertinent Document to which a Relevant Person is party to and the agreement by such party to refer disputes to the relevant courts or tribunals as stated in such Pertinent Document are valid and binding against such Relevant Person;
 
(l)
no Obligor nor any of their assets are entitled to immunity on the grounds of sovereignty or otherwise from any set-off, legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgment, execution or other enforcement);
 
(m)
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 such Obligor save for any obligation which is mandatorily preferred by law and not by virtue of any contract;
 
(n)
each Security Document creates (or once entered into, will create) the Security Interest which it is expressed to create with the ranking and priority it is expressed to have;
 
(o)
no Obligor is a US Tax Obligor;
 
(p)
no Obligor, nor any of their respective directors, officers or, to the best of their knowledge (after due and careful enquiry), employees or agents is a Restricted Person, and the Vessel is not the target of Sanctions;
 
(q)
each Obligor, and their respective directors, officers and, to the best of their knowledge (after due and careful enquiry), employees and agents, is in compliance with all Sanctions laws, and none of them have been or are currently being investigated on compliance with Sanctions, they have not received notice or are aware of any claim, action, suit or proceeding against any of them with respect to Sanctions and they have not taken any action to evade the application of Sanctions;
 
(r)
the Vessel is not employed, operated or managed in any manner which (i) is contrary to any Sanctions and in particular, the Vessel is not used by or to benefit any party which is a Restricted Person or trade to any Restricted Country or otherwise to any area or country where trading the Vessel to such area or country would constitute a breach of any Sanctions or published boycotts imposed by any of the United Nations, the European Union, the United States of America or the United Kingdom; or (ii) would trigger the operation of any sanctions limitation or exclusion clause in any insurance documentation;
 
(s)
each Obligor is not in breach of any laws or regulations relating to the Vessel and its ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code, all Environmental Laws, the laws of the Vessel's registry, all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws and each of the Obligors has instituted and maintained systems, controls, policies and procedures designed to:
 

 (i)
prevent and detect incidences of bribery and corruption, money laundering and terrorism financing; and
 

 (ii)
promote and achieve compliance with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws;
 
(t)
none of the Obligors is insolvent or in liquidation or administration or subject to any other formal or informal insolvency procedure, and no receiver, administrative receiver, administrator, liquidator, trustee or analogous officer has been appointed in respect of any Obligor or all or material part of their assets;
 
(u)
no Termination Event or Potential Termination Event is continuing or might reasonably be expected to result from the entry into and performance of this Charter or any other Leasing Document;
 

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(v)
as at the date of this Charter, the Vessel is commercially and technically managed under an Approved Management Agreement which remains in full force and effect;
 
(w)
as at the date of this Charter, the Charterers have not entered into any other investments, any sale or leaseback agreements, any off-balance sheet transaction or incur any other liability or obligation (including without limitation, any Financial Indebtedness of any obligations under a guarantee) except:
 

 (i)
liabilities and obligations under the Leasing Documents to which they are or, as the case may be, will be a party;
 

 (ii)
liabilities or obligations reasonably incurred in the normal course of its business of trading, operating and chartering, maintaining and repairing the Vessel; or
 

 (iii)
liabilities, obligations and agreements as otherwise already disclosed to the Owners;
 
(x)
any factual information provided by the Charterers (or on their behalf) to the Owners was true and accurate in all material respects as at the date it was provided or as the date at which such information was stated; and
 
(y)
the entry by each Obligor into any Pertinent Document does not in any way cause any breach, and is in all respects permitted, under the terms of any document which it is entered into.
 
CLAUSE 48
– CHARTERERS’ UNDERTAKINGS
 
48.1
The Charterers undertake that, except with the Owners’ prior written consent, the Charterers 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)
there shall  be no change of ownership or control of the Charterers from that described under Clause 47.1(a) following the Commencement Date;
 
(b)
there shall be sent to the Owners:
 

 (i)
as soon as possible, but in no event later than one hundred and eighty (180) days after the end of each financial year of the Charterers, the unaudited annual financial reports of the Charterers;
 

 (ii)
as soon as possible, but in no event later than ninety (90) days after the end of each half-year, the unaudited financial reports of the Charterers in each case certified as to their correctness by a director of the Charterers;
 

 (iii)
as soon as possible, but in no event later than one hundred and eighty (180) days after the end of each financial year of the Guarantor, the audited consolidated annual financial reports of the Guarantor; and
 

 (iv)
as soon as possible, but in no event later than ninety (90) days after the end of each half-year, the unaudited financial reports of the Guarantor certified as to their correctness by an officer of the Guarantor,
 
and each set of financial statements referred to in shall be in English;
 
(c)
following the occurrence of a Termination Event which is continuing, they will provide to the Owners, at the same time as they are despatched, copies of all notices and minutes relating to any of their extraordinary shareholders’ meeting which are despatched to the Charterers’ and the Shareholder’s respective shareholders or creditors or any class of them;
 

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(d)
they will provide or will procure that each Obligor provides the Owners with details of any legal or administrative action involving such Obligor or the Vessel as soon as such action is instituted or it becomes apparent to such Obligor that it is likely to be instituted and is likely to have a Material Adverse Effect on the ability of such Obligor to perform their obligations under each Leasing Document to which it is a party;
 
(e)
they will, and will procure that each other Obligor will, obtain and promptly renew or procure the obtainment 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 it is a party (including without limitation to sell, charter and operate the Vessel);
 
(f)
they will not, and will procure that each other Obligor will not, create, assume or permit to exist any Security Interest of any kind upon any Leasing Document to which such Obligor is a party, and if applicable, the Vessel, in each case other than the Permitted Security Interests;
 
(g)
they will at their own cost, and will procure that each other Obligor will:
 

 (i)
do all that such Obligor reasonably can to ensure that any Leasing Document to which such Obligor is a party validly creates the obligations and the Security Interests which such Obligor purports to create; and
 

 (ii)
without limiting the generality of paragraph (i), promptly register, file, record or enrol any Pertinent Document to which such Obligor is 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 Pertinent Document to which such Obligor is a party, give any notice or take any other step which, is or has become necessary or desirable for any such Pertinent Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which such Obligor creates;
 
(h)
they will, and will procure that each other Obligor will, notify the Owners as soon as it becomes aware of the occurrence of:
 

 (i)
any incident relating to the Vessel which results, or is anticipated to result, in repairs on the Vessel which exceed US$1,000,000;
 

 (ii)
any material safety incidents taking place on board the Vessel;
 

 (iii)
any Environmental Claim which is made against the Charterers, Approved Sub-charterer or any Approved Manager in connection with the Vessel (provided that such claim(s) exceed US$1,000,000 in aggregate) or any Environmental Incident;
 

 (iv)
any arrest or detention of the Vessel, any exercise or purported exercise of any lien on that Vessel or its Earnings or any requisition of that Vessel for hire; and
 

 (v)
any Potential Termination Event or a Termination Event,
 
and will keep the Owners fully up-to-date with all developments and the Charterers will, if so requested by the Owners, provide any such certificate signed by its director(s), confirming that there exists no Potential Termination Event or Termination Event;
 
(i)
they will, and will procure that each other Obligor will, as soon as practicable after receiving the request, provide the Owners with any additional financial or other information relating:
 

 (i)
to themselves and/or the Vessel (including, but not limited to the condition and location of the Vessel); or
 

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(ii)
to any other matter relevant to, or to any provision of any Leasing Document to which it is a party,
 
which may be reasonably requested by the Owners (or the Owners’ Financier (if any)) at any time;
 
(j)
they will comply, or procure compliance, and will procure that each other Obligor will comply or procure compliance, with all laws or regulations relating to the Vessel and its construction, ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code, all Environmental Laws and the laws of the Vessel’s registry provided that any non-compliance shall not (and shall not be expected to) materially adversely affect the obligations of an Obligor or any Third Party Approved Manager under each Leasing Document to which it is a party or materially adverse effect the normal operations of the Vessel;
 
(k)
subject to Clause 10(d) of this Charter, the Vessel shall be registered under the Flag State;
 
(l)
the Vessel shall be classed with the Classification Society upon Delivery and shall be free of any overdue conditions or recommendations;
 
(m)
upon request, they will provide or they will procure to be provided to the Owners the report(s) of the survey(s) conducted pursuant to Clause 7 (Surveys on Redelivery) of this Charter in form and substance satisfactory to the Owners;
 
(n)
except with the Owners’ prior written consent (not to be unreasonably withheld) or were expressly permitted under the Leasing Documents, the Charterers shall not enter into any form of merger, sub-division, amalgamation or other reorganisation, provided that in the case of any Obligor other than the Charterers, such merger, sub-division, amalgamation or other reorganisation is permitted without restrictions so long as the Guarantor remains the surviving entity of any such process;
 
(o)
the Charterers may freely sub-charter the Vessel provided that:
 

 (i)
except with the Owner’s prior written consent, they shall not permit the sub-chartering of the Vessel (A) on a bareboat basis or (B) on any other basis exceeding thirteen (13) months (including any optional extensions thereto); and
 

 (ii)
as a condition precedent to the delivery of the Vessel (or condition subsequent to be satisfied within 3 Business Days of the delivery) under any such Approved Sub-charter, the Charterers shall assign all their rights and interests under such Approved Sub-charter (provided that if such Approved Sub-Charter is made otherwise than on a bareboat basis, it is capable of exceeding 13 months) on terms acceptable to the Owners and shall use reasonable commercial efforts to procure that the relevant Approved Sub-charterer gives a written acknowledgment of such assignment in form and substance reasonably acceptable to the Owners and provide such documents as the Owners may reasonably require regarding the due execution of such Approved Sub-charter (and such Approved Sub-charterer shall assign its insurance interest in the case where any such Approved Sub-charter is a bareboat charter);
 
(p)
they shall not make or pay any dividend or other distribution (in cash or in kind) in respect of its issued shares following the occurrence of a Termination Event which is continuing or which would result in a Termination Event;
 
(q)
they shall comply and shall procure that each Obligor (including, in each case, procuring or as the case may be, using all reasonable endeavours to procure the respective officers, directors, employees, consultants, agents and/or intermediaries of the relevant entity to do the same) complies with all laws and regulations in respect of Sanctions;
 

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(r)
the Vessel shall not be employed, operated or managed in any manner which (i) is contrary to any Sanctions and in particular, the Vessel shall not be used by or to benefit any party which is a target of Sanctions and/or is a Restricted Person or trade to any area or country which is a Restricted Country or otherwise where trading the Vessel to such area or country would constitute or reasonably be expected to constitute a breach of any Sanctions or published boycotts imposed by any of the United Nations, the European Union, the United States of America or the United Kingdom, (ii) would result or reasonably be expected to result in any Relevant Person or the Owners becoming a Restricted Person or (iii) would trigger the operation of any sanctions limitation or exclusion clause in any insurance documentation;
 
(s)
they shall, and shall procure that each Obligor shall (including procuring or as the case may be, using all reasonable endeavours to procure the respective officers, directors, employees, consultants, agents and/or intermediaries of the relevant entity to do the same) shall:
 

 (i)
comply with all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws;
 

 (ii)
maintain systems, controls, policies and procedures designed to promote and achieve ongoing compliance with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws; and
 

 (iii)
in respect of the Charterers, not use, or permit or authorize any person to directly or indirectly use, the Purchase Price for any purpose that would breach any Anti-Money Laundering Laws, Anti-Terrorism Financing Laws or Business Ethics Laws;
 
(t)
in respect of the Charterers, not lend, invest, contribute or otherwise make available the Purchase Price to or for any other person in a manner which would result in a violation of Anti-Money Laundering Laws, Anti-Terrorism Financing Laws or Business Ethics Laws;
 
(u)
they shall, and shall procure that each other Obligor shall promptly notify the Owners of any non-compliance, by any Obligor or their respective officers, directors, employees, consultants, agents or intermediaries or (on a best efforts basis) by the Approved Sub-charterer, with all laws and regulations relating to Sanctions, Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws (including but not limited to notifying the Owners in writing immediately upon being aware that any Obligor or its shareholders, directors, officers or employees or any Approved Sub-charterer is a Restricted Person or has otherwise become a target of Sanctions) as well as provide all information (once available) in relation to its business and operations which may be relevant for the purposes of ascertaining whether any of the aforesaid parties are in compliance with such laws;
 
(v)
in respect of the management of the Vessel:
 

 (i)
they shall ensure that the Vessel be commercially and/or technically managed under an Approved Management Agreement;
 

 (ii)
they shall not appoint or permit to be appointed any manager of the Vessel unless it is an Approved Manager or unless the Owners have provided their prior approval for another new manager, such approval not to be unreasonably withheld or delayed, and such new manager enters into a Manager’s Undertaking; and
 

 (iii)
they shall not, save with the prior written consent of the Owners (such consent not to be unreasonably withheld or delayed), agree or enter into any transaction, arrangement, document or do or omit to do anything which will have the effect of materially varying, amending or supplement the terms of an Approved Management Agreement;
 

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(w)
they shall not, and shall procure that they shall not agree or enter into any transaction, arrangement, document or do or omit to do anything which will have the effect of varying, amending or supplementing the material terms of an Approved Sub-charter (which, in the case of such Approved Sub-charter being made otherwise on a bareboat basis, is limited to such Approved Sub-charters which are capable of exceeding thirteen (13) months);
 
(x)
they shall ensure that all Earnings and any other amounts received by them in connection with the Vessel are paid into the Earnings Account;
 
(y)
from the Commencement Date and during the Charter Period, they shall not enter into any other investments, any sale or leaseback agreements, any off-balance sheet transaction or incur any other liability or obligation (including without limitation, any Financial Indebtedness of any obligations under a guarantee) except:
 

 (i)
liabilities and obligations under the Leasing Documents to which it is or, as the case may be, will be a party; or
 

 (ii)
liabilities or obligations reasonably incurred in the normal course of its business of trading, operating and chartering, maintaining and repairing the Vessel; and
 
(z)
any transaction entered into with their Affiliates shall be on arm’s length basis and in good faith;
 
(aa)
they will ensure and procure that:
 

 (i)
the Market Value of the Vessel shall be ascertained at the expenses of the Charterers from time to time in the following circumstances:
 

 (A)
upon the occurrence of a Termination Event which is continuing, at any time at the request of the Owners;
 

 (B)
in the absence of a Termination Event which is continuing:
 

 (i)
from the first anniversary of the Commencement Date, at least once every calendar year during the Charter Period, with such report to be dated no more than thirty (30) calendar days prior to every anniversary of the Commencement Date occurring within the Charter Period or on such other date as the Owners may request; and
 

 (ii)
at any time at the request of the Owners if the Owners have determined (in their sole reasonable discretion) that the Market Value of the Vessel falls below the Minimum Amount; and
 

 (ii)
the Charterers shall pay the Owners the amount of the fees and expenses incurred by the Owners in connection with any matter arising out of this paragraph (aa);
 
(bb)
if and when the Market Value of the Vessel falls below an amount (the “Minimum Amount”) which equals to 120% of the Charterhire Principal Balance as at the preceding anniversary of the Commencement Date, the Charterers shall, upon request, promptly and in any event not later than the date falling five (5) Business Days after the Owners notify them of such circumstance, provide, or ensure the provision of additional security which in the opinion of the Owners has a net realizable value of at least equal to the shortfall and is acceptable to the Owners, and which is documented in such terms as the Owners may require. (Such difference between the Market Value and the Minimum Amount being referred to as the “shortfall” for the purposes of this paragraph);
 

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(cc)
they shall, and shall procure that each other Obligor will provide the Owners with access to class records in respect of the Vessel if and when requested by the Owners;
 
(dd)
they shall ensure that no Change of Control shall occur without the prior written consent of the Owners;
 
(ee)
they shall ensure that they and/or the Approved Managers shall comply with the Maritime Labour Convention, 2006;
 
(ff)
they:
 

 (i)
shall or shall procure that any other organisation or person whom the Charterers have contractually agreed to take over all duties and responsibilities imposed by the ISM Code (including the relevant Approved Manager as an ISM Company or any Approved Sub-charterer of the Vessel) will:
 

 (A)
surrender any Emission Allowances in respect of the Vessel under any applicable Emission Scheme; and
 

 (B)
promptly upon the Owners’ request, provide and submit such signed mandate letter in the form required by the Owners and the relevant administering  authority and provide any other information and documents as required by the Owners and/or the relevant administering authority in relation to any applicable Emission Scheme;
 

 (ii)
shall fulfil all obligations which may be imposed on the Owners as registered owner of the Vessel by the MARPOL Carbon Intensity Regulations;
 
(gg)
without prejudice to paragraph (ff) above, in relation to EU ETS:
 

 (i)
the Charterers acknowledge that if the Vessel stops at ports in the European Union, they will incur liabilities under EU ETS and Fuel EU Maritime;
 

 (ii)
the Charterers acknowledge and agree that if they intend to sail the Vessel into ports in the European Union, the Charterers shall register the Vessel as part of a shipping company as required under the EU ETS and shall comply in all respects with the EU ETS and Fuel EU Maritime;
 

 (iii)
if required by the competent administering authority or the Owners (due to the requirements of the competent administering authority), the Charterers shall provide a letter in a format to be agreed by the Owners (and which is in a format acceptable to the competent Emission Scheme Authority) confirming that they or the competent ISM Company have assumed responsibility for the operation of the Vessel from the Owners (the "ETS and Fuel EU Maritime Letter"); and
 

 (iv)
the Charterers shall, or procure that the relevant Approved Manager as ISM Company shall, submit the ETS and Fuel EU Maritime Letter to the relevant Emission Scheme Authority upon registration of the Vessel pursuant to the EU ETS and shall provide the Owners with evidence of such registration (if available by the said authority) promptly; and
 

 (v)
the Owners hereby acknowledge and undertake to timely assist the Charterers on the above, including but not limited to signing any mandate letters, forms or other instruments and providing any necessary information, in relation to an Emissions Scheme that may be necessary for the Charterers and/or the ISM Company to complete any relevant procedures; and
 

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(hh)
they shall (and they shall procure that each of the Approved Manager and where/if applicable, on a best efforts basis the Approved Sub-charterer shall):
 

 (i)
co-operate and exchange all relevant data and information with each other in a timely manner to:
 

 (A)
facilitate compliance by the Charterers and any other Emission Scheme Participant with any applicable Emission Scheme; and
 

 (B)
enable the Charterers and any other Emission Scheme Participant to calculate the amount of Emission Allowances in respect of the Vessel which are required to be surrendered to the relevant Emission Scheme Authority for that Emission Scheme during the Charter Period; and
 

 (ii)
promptly supply to the relevant Emission Scheme Authority relating to any applicable Emission Scheme with all relevant documents (including without limitation, any relevant mandating documents required in connection with surrendering the relevant Emission Allowances to the relevant Emission Scheme Authority relating to the relevant Emission Scheme) required to be provided to such Emission Scheme Authority relating to such Emission Scheme,
 
and to do all such things necessary or advisable to ensure that the Owners, the Charterers, each Emission Scheme Participant and the Vessel will be in compliance with all Environmental Laws.

CLAUSE 49
– PURCHASE OPTION
 
49.1
The Charterers shall have the option, at any time after the Commencement Date, to purchase the Vessel on any date (the “Purchase Option Date”) specified in a notice (the “Purchase Option Notice”) at the applicable Purchase Option Price, subject always to giving the Owners no less than forty five (45) days’ prior written notice.
 
49.2
A Purchase Option Notice shall be signed by a duly authorised officer or attorney of the Charterers and, once delivered to the Owners, is irrevocable and the Charterers shall be bound to pay to the Owners the Purchase Option Price on the Purchase Option Date.
 
49.3
Only one Purchase Option Notice may be served throughout the duration of the Charter Period.
 
49.4
Upon the Owners’ receipt in full of the Purchase Option Price, the Owners shall transfer the legal and beneficial ownership of the Vessel on an “as is where is” basis (and otherwise in accordance with the terms and conditions set out in Clause 51 (Sale of the Vessels to the Charterers)) to the Charterers or their nominees and shall 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 to the Charterers (and to the extent required for such purposes the Vessel shall be deemed first to have been redelivered to the Owners).
 
CLAUSE 50
– PURCHASE OBLIGATION
 
Subject to the other provisions of this Charter, in consideration of the Owners entering into this Charter, on the Charter Expiry Date, provided all moneys owing and payable under this Charter have been fully and irrevocably paid to the Owners (including the Charterhire Balloon Instalment), the Charterers shall be obliged to (i) purchase from the Owners all of the Owners’ beneficial and legal right, title and interest in the Vessel and all belonging to her and the Owners, (ii) perform their obligations referred to in Clause 51 (Sale of the Vessel to the Charterers) and (iii) pay the Purchase Obligation Price on the Charter Expiry Date in relation thereto (unless the Owners agree otherwise in writing and upon such terms and conditions as the Owners may deem fit in their absolute discretion).
 

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CLAUSE 51
– SALE OF THE VESSEL TO THE CHARTERERS
 
51.1
All legal and beneficial interest and title in the Vessel shall be transferred to the Charterers by the Owners pursuant to the terms of Clause 41 (Termination, Redelivery and Total Loss), Clause 49 (Purchase option) or Clause 50(Purchase obligation) (as the case may be) on an “as is where is” basis and on the following terms and conditions:
 
(a)
the Charterers expressly agree and acknowledge that 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 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, the Charterers hereby also waive any rights which they may have in tort in respect of any of the matters referred to under this Clause 51 (Sale of the Vessel to the Charterers) and irrevocably agree that (i) 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; (ii) 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 and (iii) 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;
 
(b)
the Vessel shall be free from all mortgages or any other liens, encumbrances, claims or debts whatsoever created by the Owners (save for those mortgages, liens, encumbrances or debts created under the Leasing Documents);
 
(c)
the Purchase Option Price, the Purchase Obligation Price, the Termination Purchase Price or the Mandatory Sale Price (as the case may be) shall be paid by (or on behalf of) the Charterers to the Owners on respectively the Purchase Option Date, the Charter Expiry Date, the Termination Notice Date or Mandatory Sale Date (as applicable), together with unpaid amounts of Charterhire and other moneys owing by or accrued or due from the Charterers under this Charter on or prior to the Purchase Option Date, the Charter Expiry Date, the Termination Notice Date or Mandatory Sale Date (as the case may be) which remain unpaid; and
 
(d)
upon the Purchase Option Price, the Purchase Obligation Price, the Termination Purchase Price or the Mandatory Sale Price (as the case may be) and all other moneys payable under this Charter being fully and irrevocably paid to the Owners on, and in accordance with, the terms set forth in this Charter (except in the case of Total Loss) the Owners agree (at the cost of the Charterers) to enter into (i) a bill of sale and (ii) a protocol of delivery and acceptance, and the Vessel shall accordingly be deemed delivered to the Charterers on the date and time set out in such protocol of delivery and acceptance (and to the extent required for such purposes the Vessel shall be deemed first to have been redelivered to the Owners).
 

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CLAUSE 52
– INDEMNITIES
 
52.1
The Charterers agree to indemnify and keep the Owners (collectively, the “Indemnitees”) indemnified against all claims, expenses, liabilities, losses, reasonable and documented fees (including but not limited to any vessel registration and tonnage fees) suffered or incurred by or imposed on the Indemnitees directly arising from this Charter and any Leasing Document or in connection with delivery, possession, performance, control, registration, repair, survey, insurance, maintenance, manufacture, purchase, ownership and operation of the Vessel by the Indemnitees and the costs related to the prevention or release of liens or detention of or requisition, use, operation or redelivery, sale or disposal of the Vessel or any part of it and whether prior to, during or after termination of the leasing of this Charter and whether or not the Vessel is in the possession or the control of the Charterers or otherwise. Without prejudice to its generality, this Clause 52 (Indemnities) covers any claims, expenses, liabilities and losses which directly 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. Such indemnity obligation shall survive the termination of the Charter Period.
 
52.2
Without prejudice to the above Clause 52.1, if any sum (a “Sum”) due from a Relevant Person (other than any Approved Sub-charterer which is not a member of the Group) under the Leasing Documents, 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:
 
(a)
making or filing a claim or proof against that Relevant Person; or
 
(b)
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
 
the Charterers shall, as an independent obligation, on demand, indemnify the Owners 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.
 
52.3
The obligations of the Charterers under Clause 52(Indemnities) and in respect of any Security Interest created pursuant to the Security Documents will not be affected or discharged by an act, omission, matter or thing which would reduce, release or prejudice any of its obligations under Clause 52 (Indemnities) or in respect of any Security Interest created pursuant to the Security Documents (without limitation and whether or not known to it or any Relevant Person) including:
 
(a)
any time, waiver or consent granted to, or composition with, any Relevant Person or other person;
 
(b)
the release of any other Relevant Person or any other person under the terms of any composition or arrangement with any creditor of the Guarantor or any of its affiliates;
 
(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 Relevant Person 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 Relevant Person or any other person;
 

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(e)
any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Leasing Document or any other document or security;
 
(f)
any unenforceability, illegality or invalidity of any obligation of any person under any Security Document or any other document or security; or
 
(g)
any insolvency or similar proceedings.
 
52.4
In consideration of the Charterers requesting the Other Owners to charter the Other Vessels to the relevant Other Charterers under the relevant Other Charters, the Charterers hereby irrevocably and unconditionally undertake to pay immediately on demand from any Other Owner such amounts in respect of all claims, expenses, liabilities, losses, documented fees of every kind and nature and all other moneys due, owing and/or payable to any Other Owner under or in connection with any Other Charter, and to indemnify and hold such Other Owner harmless against all such moneys, costs, fees and expenses.
 
52.5
Notwithstanding anything to the contrary herein 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.
 
52.6
All rights which the Charterers have at any time (whether in respect of this Charter or any other transaction) against any of the Other Charterers or the Guarantor 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 the Leasing Documents or by reason of any amount becoming payable, or liability arising, under this Clause 52 (Indemnities):
 
(a)
to be indemnified by any of the Other Charterers or the Guarantor;
 
(b)
to claim any contribution from any third party providing security for, or any other guarantor of, the Other Charterers’ or the Guarantor’s obligations under the Leasing Documents;
 
(c)
to take any benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of any of the Other Charterers or the Guarantor under the Leasing Documents or of any other guarantee or security taken pursuant to, or in connection with, the Leasing Documents by any of the aforesaid parties;
 
(d)
to bring legal or other proceedings for an order requiring any of the Other Charterers or the Guarantor or any of them to make any payment, or perform any obligation, in respect of any Leasing Document;
 
(e)
to exercise any right of set-off against any of the Other Charterers or the Guarantor; and/or
 
(f)
to claim or prove as a creditor of any of the Other Charterers or the Guarantor,
 
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 or any Other Owner by any of the Other Charterers or the Guarantor under or in connection with the Leasing Documents to be repaid in full on trust for the Owners or the Other Owners and shall promptly pay or transfer the same to the Owners or the Other Owners as may be directed by the Owners.
 

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52.7
The Charterers hereby irrevocably agree to indemnify and hold harmless the Owners against any claim, expense, liability or loss incurred by the Owners (and which is notified to the Charterers) in liquidating or employing deposits from the Owners’ Financier or third parties to fund the acquisition of the Vessel pursuant to the MOA, on or prior to the Commencement Date.
 
CLAUSE 53
– NO SET-OFF OR TAX DEDUCTION
 
53.1
All payments of Charterhire, the Purchase Obligation Price, the Purchase Option Price, the Termination Purchase Price and any other payment made from the Charterers to enable the Owners to pay all amounts under a Pertinent Document shall be paid punctually:
 
(a)
without any form of set-off, cross-claim or condition (except in the case of Advance Charterhire which shall be subject to the set-off under Clause 36.2 above) and in the case of Charterhire, without previous demand unless otherwise agreed with the Owners; and
 
(b)
free and clear of any tax deduction or withholding unless required by law.
 
53.2
Without prejudice to Clause 53.1, if the Charterers are required by law to make a tax deduction from any payment:
 
(a)
the Charterer shall notify the Owners 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.
 
53.3
In this Clause (No set-off or tax deduction) “tax deduction” means any deduction or withholding for or on account of any present or future tax, other than a FATCA Deduction.
 
CLAUSE 54
– INCREASED COSTS
 
54.1
This Clause 54(Increased costs) applies if the Owners notify the Charterers that they consider (acting in good faith) 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) or the Owners’ Financier has incurred or will incur an “increased cost”.

54.2
In this Clause 54 (Increased costs), “increased cost” means, in relation to the Owners or the Owners’ Financier:
 
(a)
an additional or increased cost incurred as a result of, or in connection with, as the case may be, (i) the Owners having entered into, or being a party to, this Charter, of funding the acquisition of the Vessel pursuant to the MOA or performing their obligations under this Charter or (ii) the Owners’ Financier entering into the funding arrangements described under Clause 59.2(a);
 

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(b)
a reduction in the amount of any payment to the Owners under this Charter or in the effective return which such a payment represents to the Owners on their capital;
 
(c)
an additional or increased cost of funding the acquisition of the Vessel pursuant to the MOA; or
 
(d)
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Owners under this Charter,
 
and for the purposes of this Clause 54.2 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.

54.3
Subject to the terms of Clause 54.1, the Charterers shall pay to the Owners, on the Owners’ demand, the amounts which the Owners from time to time notify the Charterers to be necessary to compensate the Owners for the increased cost.
 
CLAUSE 55
– FATCA
 
55.1
Defined terms. For the purposes of this Clause 55(FATCA), 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.
 
“Relevant Party” means any of the parties to this Charter and the Leasing Documents except the Approved Sub-charterer.
 
“IRS” means the United States Internal Revenue Service or any successor taxing authority or agency of the United States government.
 
55.2
FATCA Information.
 
(a)
Subject to paragraph (c) below, each Relevant Party shall 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 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.
 
(b)
If a Relevant Party confirms to any other Relevant Party 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 so notify all other Relevant Parties reasonably promptly.
 
(c)
Nothing in this Clause (FATCA) 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 fiduciary duty or any duty of confidentiality.
 
(d)
If a Relevant 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 Relevant Party shall be treated for the purposes of the Leasing Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Relevant Party in question provides the requested confirmation, forms, documentation or other information.
 
55.3
FATCA Deduction and gross-up by Relevant Party
 
(a)
If the representation made by the Charterers under Clause 47.1(o) 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.
 
(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.
 
55.4
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.
 
55.5
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 55.3 (FATCA deduction and gross-up by relevant party) 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.
 

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CLAUSE 56
– CONFIDENTIALITY
 
56.1
The Parties agree to keep the terms and conditions of this Charter and any other Leasing Documents (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)
disclosure is made to any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, insurers, insurance advisors, insurance brokers, partners as the relevant Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (b) is informed by the disclosing Party 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;
 
(c)
it is required to be disclosed under the applicable laws of any Relevant Jurisdiction, by a governmental order, decree, regulation or rule, by an order of a court, tribunal or listing exchange of the Relevant Jurisdiction, provided that the disclosing Party shall give written notice of such required disclosure to the other Party prior to the disclosure;
 
(d)
it is required to be disclosed to any governmental, banking, taxation or other regulatory authority or similar body, pursuant to the rules of any relevant stock exchange and/or securities and exchange commission rules (including, but not limited to, the US Securities and Exchange Commission Rule or the Nasdaq Rules); or pursuant to any applicable law or regulation;
 
(e)
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;
 
(f)
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), provided that such person receiving Confidential Information shall undertake that it would not disclose Confidential Information to any other party save for circumstances arising which are similar to those described under this Clause (Confidentiality) or such other circumstances as may be permitted by all Parties;
 
(g)
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 either paragraph (f) above or this paragraph (g)(i) or (g)(ii) (including the employees, officers and directors thereof);
 

 (ii)
professional advisers retained by a disclosing party; or
 

 (iii)
persons advising on, providing or considering the provision of financing to the disclosing party or an Affiliate,

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 (Confidentiality) or such other circumstances as may be permitted by all Parties; or

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(h)
with the prior written consent of all Parties.
 
CLAUSE 57
– PARTIAL INVALIDITY
 
If, at any time, any provision of a 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.
 
CLAUSE 58
– SETTLEMENT OR DISCHARGE CONDITIONAL
 
58.1
Any settlement or discharge under any Leasing Document between the Owners and any Relevant Person or any other person shall be conditional upon no security or payment to the Owners by any Relevant Person or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.
 
58.2
If the Owners consider (acting reasonably) that an amount paid or discharged by, or on behalf of, a Relevant Person in purported payment or discharge of an obligation of that Relevant Person to the Owners under the Leasing Documents is capable of being avoided or otherwise set aside on the liquidation or administration of that Relevant Person or otherwise, then that amount shall not be considered to have been unconditionally and irrevocably paid or discharged for the purposes of the Leasing Documents.
 
CLAUSE 59
– CHANGES TO THE PARTIES
 
59.1
Assignment or transfer by the Charterers
 
The Charterers shall not assign their rights or transfer by novation any of their rights and obligations under the Leasing Documents except with the prior consent in writing of the Owners.
 
59.2
Assignment or transfer by the Owners
 
Subject to Clause 35 (Quiet enjoyment) above, the Charterers acknowledge that, at any time during the Charter Period:
 
(a)
the Owners are entitled to enter into certain funding arrangements with their financier(s), (the "Owners’ Financier"), in order to finance in part or in full of the Purchase Price, 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 the prior consent of the Charterers:
 

 (i)
execute a ship mortgage over the Vessel or any other Financial Instrument in favour of an Owners’ Financier (if there is any financing charter registration in respect of this Charter, the Charterers shall cooperate with the Owners to de-register such financing charter registration or to assign all interest in and to such financing charter in favour of the Owner’s Financier to the satisfaction of the Owner’s Financier, provided that such de-registration or assignment shall not affect the Charterers’ rights to operate the Vessel in accordance with the terms of this Charter);
 

 (ii)
assign their rights and interests to, in or in connection with this Charter and any other Leasing Document in favour of that Owners’ Financier;
 

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(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 that Owners’ Financier; and
 

 (iv)
enter into any other document or arrangement which is necessary to give effect to such financing arrangements.
 
(c)
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’ Financier in conformity with any Financial Instrument.
 
(d)
The Owners may transfer by novation (or otherwise) any of its rights and obligations under the Leasing Documents and/or sell the Vessel at any time with the prior written consent of the Charterers (such consent not to be unreasonably withheld or delayed), provided that such consent would not be required if such transfer is made:
 

 (i)
to another lessor or financial institution or trust, fund, leasing company 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 or to any other party at any time;
 

 (ii)
to an affiliate of the Owners;
 

 (iii)
at such time following the occurrence of a Termination Event which is continuing; or
 

 (iv)
in accordance with the Charterers’ exercise of the Purchase Option under Clause 49 (Purchase option) or of the Purchase Obligation under Clause 50 (Purchase obligation).
 
(e)
Following any change in the registered ownership of the Vessel permitted pursuant to Clause 59.2, this Charter would continue on identical terms (save for logical, consequential or mutually agreed amendments), and the Charterers hereby agree that they shall be liable to the aforesaid new owner of the Vessel for its performance of all obligations pursuant to this Charter after change of the registered ownership of the Vessel from the Owners to such new owner and shall procure that the Guarantor shall execute a guarantee in favour of the new owners for the inter alia, obligations of the Charterers under this Charter, in substantially in the same form as the Guarantee (or such other form as the Guarantor and the new owners may agree).
 
59.3
The Charterers agree and undertake to enter into any such usual documents as the Owners shall reasonably require to complete or perfect the transfer of the Vessel (with the benefit and burden of this Charter) pursuant to Clause 59.2 (Assignment or transfer by the Owners), at no cost to the Charterers.
 
CLAUSE 60
– MISCELLANEOUS
 
60.1
The Charterers waive any rights of sovereign immunity which they or any of their assets may enjoy in any jurisdiction and subjects itself to civil and commercial law with respect to their obligations under this Charter.
 
60.2
No term of this Charter is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not party to this Charter, save that any of the Other Owners may rely on the rights conferred on them under Clause 52.2.
 

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60.3
This Charter and each 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.
 
60.4
These additional clauses shall be read together with the BARECON 2001, and shall constitute a single instrument. In the case of any conflict between the provisions of these additional terms and the BARECON 2001, these additional terms shall prevai–.
 
CLAUSE 61
- DEFINITIONS
 
61.1
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 to be signed by the Charterers at Delivery.
 
“Account Bank” means Alpha Bank S.A. acting through its office at 93 Akti Miaouli street, 18538, Piraeus, Greece or such other bank as may be approved in writing by the Owners.
 
“Account Security” means the document creating security over the Earnings Account executed or to be executed by the Charterers in favour of the Owners and the Other Owners, in the agreed form.
 
"Advance Charterhire” means an amount equivalent to 35% of the applicable Purchase Price.
 
“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.
 
"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 European Union 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 any Relevant Person, Approved Sub-charterer or the Owners; (b) of any jurisdiction in which any Relevant Person, Approved Sub-charterer or the Owners conduct business; or (c) to which any Relevant Person, Approved Sub-charterer or the Owners is subjected or subject to.
 
“Anti-Terrorism Financing Laws” means all applicable anti-terrorism laws, rules, regulations or guidelines of any jurisdiction, including and not limited to the United States of America or the People’s Republic of China which are: (a) issued, administered or enforced by any governmental agency, having jurisdiction over any Relevant Person, Approved Sub-charterer or the Owners; (b) of any jurisdiction in which any Relevant Person, Approved Sub-charterer or the Owners conduct business; or (c) to which any Relevant Person, Approved Sub-charterer or the Owners are subjected or subject to.
 
“Approved Commercial Management Agreement” means:
 

 (a)
the management agreement in respect of the Vessel dated 2 March 2015 originally made between Seanergy Management Corp. and Fidelity Marine Inc., as amended and/or supplemented by an amendment deed no. 1 dated 11 September 2015, an amendment deed no. 2 dated 24 February 2016, an amendment deed no. 3 dated 1 February 2018, an amendment deed no. 4 dated 28 June 2018 and an amendment deed no. 5 dated 3 November 2021 and an accession deed dated 27 April 2021; or
 

 (b)
such other management agreement entered into after the date of this Charter to be made between the Charterers as owner and an Approved Commercial Manager as commercial manager,
 

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in each case as may be further amended and/or supplemented from time to time.
 
“Approved Commercial Manager” means Fidelity Marine Inc., a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands MH96960, or any other first class internationally recognised and reputable manager which may, with the prior written approval of the Owners, be appointed as a commercial manager of the Vessel.
 
“Approved Crew Management Agreement” means:
 

 (a)
the crew management agreement in respect of the Vessel dated 19 May 2022 made between the Charterers as owner and Global Seaways S.A. as crew manager; or
 

 (b)
such other management agreement entered into after the date of this Charter to be made between the Charterers as owner and an Approved Crew Manager as crew manager,
 
in each case as may be amended and/or supplemented from time to time.
 
“Approved Crew Manager” means Global Seaways S.A., a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands MH96960, or any other first class internationally recognized and reputable manager which may, with the prior written approval of the Owners, be appointed as a crew manager of the Vessel.
 
“Approved Management Agreement” means an Approved Commercial Management Agreement, Approved Crew Management Agreement, Approved Services Management Agreement or an Approved Technical Management Agreement.
 
“Approved Manager” means an Approved Commercial Manager, Approved Crew Manager, Approved Services Manager or an Approved Technical Manager.
 
"Approved Services Manager” means Seanergy Management Corp., a corporation in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands MH96960, or any other first class internationally recognized and reputable manager which may, with the prior written approval of the Owners, be appointed as a services manager of the Vessel.
 
"Approved Services Management Agreement” means:
 

 (a)
the services management agreement in respect of the Vessel dated 27 April 2021 made between the Charterers as owner and Seanergy Management Corp. as services manager; or
 

 (b)
such other management agreement entered into after the date of this Charter to be made between the Charterers as owner and an Approved Services Manager as services manager,
 
in each case as may be amended and/or supplemented from time to time.
 
“Approved Sub-charter” means the Existing Sub-charter or any charter entered into by the Charterers as disponent owner which the Charterers are not prohibited from entering into under Clause 48.1(o).
 
“Approved Sub-charterer” means the Existing Sub-charterer or any sub-charterer of the Vessel under an Approved Sub-charter.
 

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“Approved Technical Management Agreement” means:
 

 (a)
the management agreement in respect of the Vessel dated 18 May 2022 made between the Charterers as owner and Seanergy Shipmanagement Corp. as technical manager; or
 

 (b)
such other management agreement entered into after the date of this Charter to be made between the Charterers as owner and an Approved Technical Manager as technical manager,
 
in each case as may be amended and/or supplemented from time to time.
 
“Approved Technical Manager” means Seanergy Shipmanagement Corp., a corporation incorporated in the Republic of The Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands MH96960, or any other first class internationally recognised and reputable manager which may, with the prior written approval of the Owners (such approval not to be unreasonably withheld or delayed), be appointed as a technical manager of the Vessel.
 
“Approved Valuer” means Arrow, Braemar, BRS, Clarksons Platou, Fearnleys, Howe Robinson, Maersk, Seaborne Shipbrokers S.A., Simpson Spence Young or such other independent and reputable shipbroker nominated by the Charterers and approved by the Owners.
 
“Breakfunding Costs” means all breakfunding costs and expenses 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 do not fall on a Payment Date.
 
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in Greece, Hong Kong, London, New York and Shanghai and any jurisdiction in which any Earnings Account is opened and in relation to the fixing of Term SOFR, which is a US Government Securities Business Day.
 
"Business Ethics Law" means any laws, regulations and/or other legally binding requirements or determinations in relation to corruption, fraud, collusion, bid-rigging or anti-trust, human rights violations (including forced labour and human trafficking) which are applicable to any Relevant Person, Approved Sub-charterer or the Owners or to any jurisdiction where activities are performed and which shall include but not be limited to (i) the United Kingdom Bribery Act 2010 and (ii) the United States Foreign Corrupt Practices Act 1977 and all rules and regulations under each of (i) and (ii).
 
“Buyers” means the Owners acting in their capacity as buyer of the Vessel under the MOA.
 
“Cancelling Date” shall have the same meaning as defined under the MOA.
 
"Change of Control" means the Charterers ceasing to be wholly and (either directly or indirectly) owned and controlled by the Guarantor.
 
“Charter Expiry Date” means the date falling five (5) years from the Commencement Date.
 
“Charter Period” means the period commencing on the Commencement Date and described in Clause 32.2 unless it is either terminated earlier or extended in accordance with the provisions of this Charter.
 
“Charterhire” means each of, or as the context may require, (i) all of the quarterly instalments of hire payable under this Charter comprising of a Fixed Charterhire element and a Variable Charterhire element and (ii) the Charterhire Balloon Instalment .
 

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“Charterhire Balloon Instalment” means an amount equal to US$10,500,000.
 
“Charterhire Principal Balance” means, on any relevant date, (i) the Net Purchase Price minus (ii) the aggregate Fixed Charterhire which have been paid by the Charterers and received by the Owners as at such date.
 
“Classification Society” means the vessel classification society referred to in Box 10 (Classification Society) of this Charter or such other vessel classification society (being a member of the International Association of Classification Societies) acceptable to the Owners.
 
“Commencement Date” means the date on which Delivery takes place.
 
“Delivery” means the delivery of the physical and legal delivery of the Vessel from the Owners to the Charterers hereunder.
 
“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) and which arise out of the use or operation of the Vessel, including (but not limited to):
 

 (a)
all freight, hire and passage moneys, compensation payable in the event of requisition of the Vessel for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Vessel; and
 

 (b)
if and whenever the Vessel is employed on terms whereby any moneys falling within paragraph (a) 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.
 
“Earnings Account” means, an account in the name of the Charterers with the Account Bank or any other replacement earnings account in the name of the Charterers with any other bank which may, with the prior written consent of the Owners, be opened.

"Emission Allowances" means an allowance, credit, quota, permit or equivalent, representing a right of a vessel to emit a specified quantity of greenhouse gas emissions recognised by the Emission Scheme.
 
"Emission Scheme" means a greenhouse gas emissions trading scheme which for the purposes of this Charter shall include the EU ETS and any other similar systems imposed by applicable lawful authorities that regulate the issuance, allocation, trading or surrendering of Emission Allowances.

"Emission Scheme Authority" means in relation to an Emission Scheme, the relevant authority administering or otherwise implementing such Emissions Scheme.

"Emission Scheme Participant" means in relation to an Emission Scheme, any person which is responsible for complying with the requirements of such Emissions Scheme.

“Environmental Claim” means:


 (a)
any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or which relates to any Environmental Law; or
 

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(b)
any claim by any other person which relates to an Environmental Incident, and “claim” means a claim for damages, compensation, fines, penalties or any other payment; 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 of Environmentally Sensitive Material from the Vessel; or
 

 (b)
any incident in which Environmentally Sensitive Material is released 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 liable to be arrested, attached, detained or injuncted and/or the Vessel and/or the Owners and/or the Charterers and/or the Approved Sub-charterer and/or any other operator or manager of the Vessel is at fault or otherwise liable to any legal or administrative action; or
 

 (c)
any other incident involving the Vessel in which Environmentally Sensitive Material is released otherwise than from the Vessel and in connection with which the Vessel is actually arrested and/or where the Owners and/or the Charterers and/or the Approved Sub-charterer and/or any other operator or manager of the Vessel is at fault or otherwise liable to any legal or administrative action.
 
“Environmental Law” means any law relating to pollution or protection of the environment, to the carriage or releases of Environmentally Sensitive Material.

“Environmentally Sensitive Material” means oil, oil products and any other substances (including any chemical, gas or other hazardous or noxious substance) which are (or are capable of being or becoming) polluting, toxic or hazardous.

"ETS and Fuel EU Maritime Letter" shall have the meaning as defined under 48.1(gg)(iii).
 
“EU ETS" means the European Union Emissions Trading System specifically applicable to shipping pursuant to the Directive (EU) 2023/959 of the European Parliament and of the Council of 10 May 2023 amending European Directive 2003/87/EC and the Commission Implementing Regulation (EU) 2023/2599 of 22 November 2023 laying down rules for the application of Directive 2003/87/EC of the European Parliament and of the Council as regards the administration of shipping companies by administering authorities in respect of a shipping company.

“Existing Charter” has the meaning given to such term in the MOA.

“Existing Sub-charter” means the time charterparty in respect of the Vessel dated 6 April 2021 entered into between the Charterers as disponent owner and the Existing Sub-charterer as charterer, as amended and/or supplemented from time to time.
 
“Existing Sub-charterer” means Nippon Yusen Kabushiki Kaisha acting through its office at 3-2 Marunouchi 2-chome, Chiyoda-Ku Tokyo, 100-0005, Japan.
 
“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;
 

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(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 (f) if the references to the debtor referred to the other person;
 
“Financial Instruments” means any mortgage, deed of covenant, the general assignment or such other financial security instruments as may be granted to the Owners’ Financier as security for the obligations of the Owners in relation to the financing or refinancing of the acquisition of the Vessel.
 
“Fixed Charterhire” means the portion of Charterhire payable under Clause 36.3(a).

“Flag State” means the flag state as stated in Box 5 of this Charter or such other flag state as may be approved in writing by the Owners (such approval not to be unreasonably withheld or delayed).
 
"Fuel EU Maritime" means Fuel EU Maritime Regulation 2023/1805 dated 13 September 2023 on the use of renewable and low-carbon fuels in maritime transport, and amending Directive 2009/16/EC.
 
“General Assignment” means the general assignment in agreed form which is executed or to be executed by the Charterers in favour of the Owners in respect of the Vessel, pursuant to which the Charterers shall, inter alia, assign its rights in relation to amongst others (i) Insurances, Earnings and Requisition Compensation and (ii) any Approved Sub-charter (provided that in the case of a sub-time charter, such sub-time charter has a balance duration exceeding or capable of exceeding 13 months in the period on and following the Commencement Date)  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 in the Republic of Marshall Islands with its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960.
 
“Handling Fee Letter” means any fee letter dated on or around the date hereof setting out the handling fee or other fee payable by the Charterers to the Owners pursuant to Clause 42.1.
 

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“Historic Term SOFR” means the most recent applicable Term SOFR for a period equal in length to the relevant Term and which is as of a day which is no more than three US Government Securities Business Days before the Quotation Day.
 
“Holding Company” means, in relation to a person, any other person in relation to which it is a subsidiary.
 
“IAPPC” means a valid international air pollution prevention certificate for the Vessel issued pursuant to the MARPOL Protocol.
 
“Initial Charterhire Principal Balance without Balloon” means the Net Purchase Price minus the Charterhire Balloon Instalment.
 
“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;
 
"Interest Rate" means, in relation to Variable Charterhire, the aggregate of the Reference Rate and the Margin.
 
“Interpolated Historic Term SOFR” means the rate 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 Quotation Day) for the longest period (for which Term SOFR is available) which is less than the relevant Term; or
 

 (ii)
if no such Term SOFR is available for a period which is less than the relevant Term, 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 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 relevant Term.
 
“Interpolated Term SOFR” means the rate which results from interpolating on a linear basis between:
 

 (a)
either
 

 (i)
the applicable Term SOFR (as of the Quotation Day, prior to 5pm (New York time)) for the longest period (for which Term SOFR is available) which is less than the relevant Term; or
 

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(ii)
if no such Term SOFR is available for a period which is less than the relevant Term, SOFR for the day which is two US Government Securities Business Days before the Quotation Day, prior to 5pm (New York time); and
 

 (b)
the applicable Term SOFR (as of the Quotation Day, prior to 5pm (New York time)) for the shortest period (for which Term SOFR is available) which exceeds the relevant Term.
 
“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, supplemented or replaced 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.
 
"ISSC" means an International Ship Security Certificate issued under the ISPS Code.
 
"ISM Company” means the entity responsible for the Vessel's compliance with the ISM Code at any relevant time.
 
“Leasing Documents” means this Charter, the MOA and the Security Documents.
 
“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.
 
“Manager’s Undertaking” means each of the letters of undertaking, in agreed form, to be executed by the relevant Approved Manager under which, amongst others, such Approved Manager agrees to assign its rights (if any) in Insurances in favour of the Owners as well as subordinate its rights against the Charterers to the rights of the Owners.
 
"Mandatory Sale Date” means such date which the Charterers are required to pay the Mandatory Sale Price to the Owners under Clause 46 (Mandatory Sale).
 
“Mandatory Sale Notice” means the written notice from the Owners to the Charterers as described under Clause 46.1 above.
 
"Mandatory Sale Price" means, in respect of any date (for the purposes of this definition only, the "Relevant Date"), the aggregate of:
 

 (a)
the Charterhire Principal Balance as at the Relevant Date;
 

 (b)
any accrued but unpaid Variable Charterhire, as at the Relevant Date;
 

 (c)
any Breakfunding Costs;
 

 (d)
any costs incurred and expenses incurred by the Owners (and the Owners’ Financier (if any)) in locating, repossessing or recovering the Vessel or collecting any payments due under this Charter or in obtaining the due performance of the obligations of the Charterers under this Charter or the other Leasing Documents and any default interest in relation thereto;
 

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(e)
any direct losses and liabilities and documented costs and expenses (including, without limitation, legal fees) incurred by the Owners in connection with the termination of this Charter under Clause 46 (Mandatory Sale); and
 

 (f)
all other outstanding amounts payable under the Leasing Documents together with any applicable interest thereon.
 
“Margin” means 2.55% per annum.
 
“Market Value” means, in relation to the Vessel, the arithmetic mean of the valuations shown by two (2) valuation reports each addressed to the Owners and prepared (at the Charterers’ Cost):
 

 (i)
on a date no earlier than thirty (30) days prior to the relevant date of determination;
 

 (ii)
by Approved Valuers;
 

 (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, free of any existing charter or other contract of employment or such other basis as may be agreed between the Charterers and the Owners.
 
"MARPOL Carbon Intensity Regulations" means the regulations contained in Chapters 1, 2 and 4 of Revised MARPOL Annex VI which relate to “Regulations on the Carbon Intensity of International Shipping” and Resolution MEPC.328(76) implementing the CII and any associated guidelines and/or subsequent amendments, including the Ship Energy Efficiency Management Plan (SEEMP).
 
“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) or prospects of any Obligor; 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.
 
“MOA” means the memorandum of agreement entered into by the Sellers and the Buyers dated on the date hereof in relation to the sale and purchase of the Vessel.
 
“Net Purchase Price” has the meaning given to such term in the MOA.
 
"Net Sales Proceeds" has the meaning given to it under Clause 41.4(b)(ii).
 

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“Obligor” means any of the Charterers, the Guarantor, the Shareholder, any Approved Manager (other than a Third Party Approved Manager) and only in relation to a Security Document any party entering into such Security Document or any other party providing security for the Charterers’ obligations under this Charter pursuant to a Security Document.
 
“Original Financial Statements” means the audited financial statements (in English) of the Guarantor and the unaudited financial statements (in English) of the Charterers for the financial year ended 31 December 2023.
 
“Original Jurisdiction” means, in relation to any Obligor, the jurisdiction under whose laws they are incorporated as at the date of this Charter.
 
“Other Charter” means, in relation to each Other Vessel, a bareboat charterparty entered into between the relevant Other Owner, as owner, and the corresponding Other Charterer, as bareboat charterer.
 
“Other Charterer” means either Icon Ocean Navigation Co., a corporation incorporated in the Republic of Liberia and Patriot Shipping Co., a corporation in the Republic of the Marshall Islands (and “Other Charterers” mean both of them).
 
“Other Owner” means either Hao Cancer Limited or Hao Virgo Limited, each incorporated in the Republic of Liberia.
 
“Other Security Documents” means the Security Documents (as defined in any Other Charter) in respect of such Other Charter.
 
“Other Vessel” means any of the bulk carriers named “Kinokawa Maru” (to be renamed “Iconship”) with IMO number 9641895 and “Patriotship” with IMO number 9446441.
 
“Owners’ Financier” shall have the meaning as defined under Clause 59.2(a).
 
“Owners’ Sale” shall have the meaning as defined under Clause 41.4(b)(ii).
 
“Party” means any party to this Charter.
 
“Payment Date” shall have the meaning as defined under Clause 36.3.
 
“Payment Notice” shall have the same meaning as defined under the MOA.
 
“Permitted Security Interests” means:
 

 (a)
Security Interests created by a Leasing Document or a Financial Instrument;
 

 (b)
liens 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)
liens for salvage;
 

 (d)
liens for master’s disbursements incurred in the ordinary course of trading;
 

 (e)
any other liens 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
 

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(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.
 
“Pertinent Document” means any Approved Sub-charter and each of the Leasing Documents.

“Potential Termination Event” means, an event or circumstance which, with the giving of any notice, the lapse of time, a determination of the Owners and/or the satisfaction of any other condition, would constitute a Termination Event.
 
“Prepositioning Date” shall have the same meaning as defined under the MOA.
 
"Purchase Obligation" means the purchase obligation referred to in Clause 50 (Purchase obligation).
 
"Purchase Obligation Price" means an amount equal to US$100.
 
"Purchase Option" means the early purchase option which the Charterers are entitled to exercise pursuant to Clause 49 (Purchase option).
 
"Purchase Option Date" has the meaning given to that term in Clause 49.1.
 
“Purchase Option Fee” means:
 

 (a)
one point five per cent. (1.50%) of the Charterhire Principal Balance as at the Purchase Option Date, if the Purchase Option Date falls after the Commencement Date up to and including the third (3rd) anniversary of the Commencement Date; or
 

 (b)
nil, if the Purchase Option Date falls after the third (3rd) anniversary of the Commencement Date.
 
"Purchase Option Notice" has the meaning given to that term in Clause 49.1.
 
"Purchase Option Price" means the aggregate of:
 

 (a)
the Charterhire Principal Balance as at the Purchase Option Date;
 

 (b)
the applicable Purchase Option Fee;
 

 (c)
any accrued but unpaid Variable Charterhire as at the Purchase Option Date;
 

 (d)
a nominal fee of US$100;
 

 (e)
any Breakfunding Costs;
 

 (f)
any costs incurred and expenses incurred by the Owners in collecting any payments due under this Charter or in obtaining the due performance of the obligations of the Charterers under this Charter or the other Leasing Documents and any default interest in relation thereto;
 

 (g)
any reasonable and documented losses, liabilities, costs and expenses (including, without limitation, legal fees) incurred by the Owners in connection with the exercise of the Purchase Option under Clause 49 (Purchase option); and
 

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(h)
all other amounts due and outstanding under this Charter and the other Leasing Documents together with any applicable interest thereon.
 
“Purchase Price” has the meaning given to such term in the MOA.
 
“Quotation Day” means, in relation to any period for which an interest rate is to be determined, ten (10) US Government Securities Business Days before the first day of that period (or such earlier date as may be mutually agreed between the Owners and the Charterers} unless market practice differs in the relevant interbank market in which case the Quotation Day will be determined by the Owners in accordance with that market practice in the relevant interbank market (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 Term:


 (a)
the applicable Term SOFR for three (3) months as of the relevant Quotation Day; or
 

 (b)
as otherwise determined pursuant to Clause 37 (Changes to the calculation of interest),
 
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 each Obligor:
 

 (a)
its Original Jurisdiction;
 

 (b)
any jurisdiction where any property owned by it and charged under a Pertinent Document is situated;
 

 (c)
any jurisdiction where it conducts its business; and
 

 (d)
any jurisdiction whose laws govern the perfection of any of the Pertinent Documents entered into by it creating a Security Interest.
 
“Relevant Person” means each of the Charterers, the Other Charterers, the Shareholder, the Guarantor, any Approved Manager and any other party providing security in favour of the Owners in connection with the Charterers’ obligations under this Charter.

"Requisition" means:
 

 (a)
any expropriation, confiscation, requisition (excluding a requisition for hire or use for a fixed period equal to or less than one (1) year without any right to an extension, such requisition not involving a requisition for title) 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 (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 arrest, capture or seizure of the Vessel (including any hijacking or theft) by any person whatsoever.
 

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“Requisition Compensation” includes all compensation or other moneys payable to the Charterers by reason of any Requisition or any arrest or detention of the Vessel in the exercise or purported exercise of any lien or claim.
 
“Restricted Countries” means those countries or territories subject to country-wide or territory-wide Sanctions and/or trade embargoes or whose government is the target of Sanctions, in particular but not limited to pursuant to the U.S.'s Office of Foreign Asset Control of the U.S. Department of Treasury (“OFAC”) including at the date of this Charter, but without limitation, Iran, Cuba, Iran, North Korea, Syria and Crimea and Venezuela and any additional countries or territories based on respective country-wide or territory-wide Sanctions being imposed by OFAC or any of the regulative bodies referred to in the definition of Restricted Persons.
 
“Restricted Person” means a person, entity or any other parties (i) located, domiciled, resident or incorporated in Restricted Countries, and/or (ii) owned or controlled by or affiliated with persons, entities or any other parties as referred to in (i).
 
“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 United Kingdom, the Council of the European Union, the United Nations or its Security Council, the United States of America or the People’s Republic of China; or
 

 (b)
otherwise imposed by any law or regulation binding on a Party or to which a Party is subject.
 
“Security Documents” means each of the Guarantee, the Account Security, the General Assignment, the Shares Security Deed, the Manager’s Undertakings, the Trust Deed and any other security documents granting a Security Interest in respect of the obligations of the Charterers under or in connection with this Charter.
 
“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;
 
“Sellers” means the Charterers acting in their capacity as seller of the Vessel under the MOA.
 
“Shareholder” means the Guarantor acting in its capacity as shareholder of the Charterers.
 
“Shares Security Deed” means the pledge of shares executed or to be executed by the Shareholder in favour of the respective Owners over the shares in the respective Charterers, in agreed form.
 
"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).
 

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"Term" means a period of three (3) months’ duration or any other period agreed between the Owners and the Charterers, provided that:
 

 (a)
the first Term shall commence on (and include) the Commencement Date;
 

 (b)
each subsequent Term shall commence on (and include) the last day of the preceding Term;
 

 (c)
any Term which would otherwise overrun a Payment Date shall instead end on (and include) that Payment Date; and
 

 (d)
any Term which would otherwise extend beyond the Charter Period shall instead end on (and include) the last day of the Charter Period.
 
"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 Event” means any event described in Clause 45 (Termination Events).
 
“Termination Fee” means two per cent. (2%) of the Charterhire Principal Balance provided that the Termination Purchase Price becomes payable in accordance with Clause 45.2 (other than where the Owners’ right to terminate the Charter under Clause 45.2 arises directly from a Total Loss of the Vessel).
 
“Termination Notice Date” shall have the meaning as defined under Clause 45.2.
 
"Termination Purchase Price" means, in respect of any date (for the purposes of this definition only, the "Relevant Date"), the aggregate of:
 

 (a)
the Charterhire Principal Balance as at the Relevant Date;
 

 (b)
any accrued but unpaid Variable Charterhire, as at the Relevant Date;
 

 (c)
the Termination Fee as at the Relevant Date (if applicable) (except in the case of a Total Loss);
 

 (d)
any Breakfunding Costs;
 

 (e)
any costs incurred and expenses incurred by the Owners (and the Owners’ Financier (if any)) in locating, repossessing or recovering the Vessel or collecting any payments due under this Charter or in obtaining the due performance of the obligations of the Charterers under this Charter or the other Leasing Documents and any default interest in relation thereto;
 

 (f)
any direct losses and liabilities and documented costs and expenses (including, without limitation, legal fees) incurred by the Owners in connection with the termination of this Charter under Clause 45 (Termination Events); and
 

 (g)
all other outstanding amounts payable under the Leasing Documents together with any applicable interest thereon.
 

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"Third Party Approved Manager” means any Approved Manager not being a subsidiary of the Guarantor.
 
“Total Loss” means:
 

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

 (b)
any Requisition of the Vessel unless the Vessel is returned to the full control of the Borrower within forty five (45) days of such Requisition.
 
“Total Loss Date” means:
 

 (a)
in the case of an actual loss of the Vessel, the date on which it occurred or, if that is unknown, the date when the Vessel was last heard of;
 

 (b)
in the case of a constructive, compromised, agreed or arranged total loss of the Vessel, the earlier of:
 

 (i)
the date on which a notice of abandonment is given to the insurers; and
 

 (ii)
the date of any compromise, arrangement or agreement made by or on behalf of the Owners with the insurers in which the insurers agree to treat the Vessel as a Total Loss;
 

 (c)
in the case of any other type of Total Loss, the date (or the most likely date) on which it appears to the Owners that the event constituting the total loss occurred.
 
"Trust Deed" means a trust deed dated on or around the date of this Charter entered into between the Owners, the Other Owners, the Charterers, the Other Charterers, the Guarantor, the Shareholder and the Approved Managers  which, inter alia, sets out the obligations of the Owners or any Other Owner (as the case may be) in respect of holding on trust all moneys or other assets received or recovered by or on behalf of the Owners and the Other Owners by virtue of any Security Interest or other rights granted to the Owners and/or Other Owners under or by virtue of the Security Documents and/or Other Security Documents.
 
"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 United States of America or (b) a person some or all of whose payments under the Leasing Documents are from sources within the United States for United States federal income tax purposes.
 
"Variable Charterhire" means, in relation to a Payment Date, the interest component of charterhire payable calculated by applying the applicable Interest Rate for the relevant Term to the Charterhire Principal Balance as at such date immediately prior to such Payment Date (and in the case of the first Payment Date, on the Net Purchase Price as of the Commencement Date).
 
“Vessel” means the bulk carrier named “Hellasship” with IMO number 9574236.
 
61.2
In this Charter:
 

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“agreed form” means, in relation to a document, such document in a form agreed in writing between the Owners and the Charterers and, if required by the Owners in their sole discretion, the Owners’ Financier;
 
“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;
 
“contingent liability” means a liability which is not certain to arise and/or the amount of which remains unascertained;
 
“continuing” means, in relation to any Termination Event, a Termination Event which has not been waived by the Owners and in relation to any Potential Termination Event, a Potential Termination Event which has not been waived by the Owners or remedied to the satisfaction of the Owners;
 
“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, more than fifty one per cent. (51%), 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;
 
“cost of funds”, unless a contrary indication appears, in relation to the Charterhire Principal Balance or any part thereof, means the average cost (determined either on an actual or a notional basis) which the Owners would incur if it were to fund, from whatever source(s) they may reasonably select, an amount equal to the amount of the Charterhire Principal Balance or that part thereof for a period equal in length to the Term of the Charterhire Principal Balance or that part thereof.
 
“document” includes a deed; also a letter, fax or telex;
 
“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 61.3;
 

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“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 P&I 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;
 
“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;
 
“subsidiary” has the meaning given in Clause 61.4; 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.
 
61.3
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 preceding the numerically corresponding day if the numerically corresponding day is not a Business 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.
 
61.4
Meaning of “subsidiary”. A company (S) is a subsidiary of another company (P) if:
 

 (a)
a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or
 

 (b)
P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or
 

 (c)
P has the direct or indirect power to appoint or remove a majority of the directors of S; or
 

 (d)
P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P; or
 

 (e)
and any company of which S is a subsidiary is a parent company of S.
 

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61.5
In this Charter:
 

 (a)
references to a Pertinent 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 Pertinent 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; and
 

 (d)
words denoting the singular number shall include the plural and vice versa.
 
61.6
Headings.  In interpreting a Pertinent Document or any provision of a Pertinent Document, all clauses, sub-clauses and other headings in that and any other Pertinent Document shall be entirely disregarded.
 

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SCHEDULE 1

Acceptance Certificate

HELLAS OCEAN NAVIGATION CO. (the “Charterers”) hereby acknowledges that at          hours on          , there was delivered to, and accepted by, the Charterers the Vessel known as m.v. “HELLASSHIP”, registered in the name of HAO LEO LIMITED (the “Owners”) under the flag of the Republic of Liberia with official number ___________ under a bareboat charter dated ____________________ (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 Clause 47 (Representations and Warranties) of the Charter remain correct and that no Termination Event (as defined in the Charter) has occurred and is continuing at the date of this Acceptance Certificate.
 
Name:
Title: Attorney-in-fact
for and on behalf of
HELLAS OCEAN NAVIGATION CO.
Date:


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SCHEDULE 2
 
PART A

The following are the documents referred to in Clause 34.2(e)(i):

1
Corporate Authority
 
1.1
A copy of the constitutional documents of each Obligor.
 
1.2
If required, a copy of the resolutions of the board of directors (or equivalent) of the Guarantor and the Charterers
 
(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)
authorizing 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 applicable, a copy of the power of attorney of any party (other than any Approved Sub-charterer) to a Leasing Document 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 the Charterers, approving the terms of, and the transactions contemplated by such Leasing Document.
 
1.6
A certificate of an officer or authorized signatory of each Obligor party to a Leasing Document 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
Duly executed copies of each Leasing Document (other than the General Assignment, the Manager’s Undertakings, the Shares Security Deed, the Account Security and the Trust Deed) and of each document to be delivered under each of them.
 
2.2
Agreed forms of the General Assignment, the Manager’s Undertakings, the Shares Security Deed, the Account Security and the Trust Deed, and of each document to be delivered under each of them.
 
3
Valuation(s) of the Vessel
 
Valuation(s) of the Vessel, addressed to the Owners and dated not earlier than thirty (30) days before the Commencement Date indicating that the Vessel’s Market Value is not less than 120% of the Net Purchase Price.
 

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4
Vessel Documents
 
4.1
A copy of each executed Approved Management Agreement establishing that the Vessel will, as from the Commencement Date, be managed by such Approved Manager and approved by the Owners.
 
4.2
A copy of the Document of Compliance of the relevant Approved Technical Manager in respect of technical management of the Vessel.
 
5
Legal opinions
 
5.1
An agreed form legal opinion by English legal advisers to the Owners on such matters on the laws of England in relation to the documents listed in paragraphs 2.1 and 2.2 of Part A of this Schedule, in form and substance acceptable to the Owners.
 
5.2
Agreed forms of legal opinions by lawyers appointed by the Owners on such matters relating to the documents listed in paragraphs 2.1 and 2.2 of Part A of this Schedule, concerning the laws of Liberia, Marshall Islands, Greece and such other relevant jurisdictions as the Owners may require, in form and substance acceptable to the Owners.
 
6
Vessel Insurances
 
6.1 Agreed form of letters of undertaking and certificates of entry (as the case may be) relating to insurances as set out in Clause 39 (Insurance) acknowledged by the relevant insurer, insurance broker, protection and indemnity association or war risks association (as the case may be).
 
6.2
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.
 
7
Approved Sub-charter
 
Copies of the relevant Approved Sub-charter to be in force and effect as at the Commencement Date.
 
8
Payment Notice
 
A duly completed Payment Notice to be received by the Owners not later than two (2) Business Days (or such other shorter period agreed with the Owners) prior to the Prepositioning Date.
 
9
Sellers’ payment of balance early purchase price
 
Evidence that the Sellers have paid the Delivery Shortfall (as defined under the MOA) not later than one (1) Business Day prior to the Prepositioning Date in accordance with Clause 18 of the MOA.

10
Deed of Release
 
An agreed form deed of release discharging (i) all of the Charterers’ obligations under the Existing Charter and documents conferring Security Interests entered into in connection with the Existing Charter and (ii) all Security Interests encumbering the Vessel or any part thereof (if any), in such form as is satisfactory to the Owners.
 
11
Others
 
11.1
Evidence that the Earnings Account has been opened.
 

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11.2
Copies of the Original Financial Statements.
 
11.3
Evidence that the Handling Fee (if due) and any fees, costs and expenses then due from the Charterers to the Owners under the Leasing Documents have been paid to and received by, or will be paid to and received by, the Owners.
 
11.4
Such evidence relating to a Relevant Person 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 Pertinent Documents.
 
11.5
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 documents listed in paragraphs 2.1 and 2.2 of Part A of this Schedule or for the validity and enforceability of such documents.
 
11.6
If required, evidence that any process agent referred to under the Leasing Documents has accepted its appointment.
 
11.7
Such other information and documents as the Owners may require by giving reasonable notice to the Charterers.
 

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PART B

The following are the documents referred to in Clause 34.2(e)(ii):

1
Security Documents
 
Duly executed copies of each of the General Assignment, the Managers’ Undertakings, the Shares Security Deed, the Account Security and the Trust Deed and of each document to be delivered under each of them.
 
2
Vessel Documents in relation to Title
 
Documentary evidence that the Vessel:
 
(a)
is or will be definitively registered in the name of the Owners under the Flag State;
 
(b)
is or will be in the absolute and unencumbered ownership of the Owners; and
 
(c)
has been or will be unconditionally delivered by the Sellers to the Buyers pursuant to the terms of the MOA.
 
3
Vessel Document
 
A copy of the Vessel’s class certificate evidencing that the Vessel maintains such classification (free of any overdue recommendations and conditions) as is acceptable to the Owners.

4
Deed of Release
 
An executed deed of release discharging (i) all of the Charterers’ obligations under the Existing Charter and documents conferring Security Interests entered into in connection with the Existing Charter and (ii) all Security Interests encumbering the Vessel or any part thereof (if any), in such form as is satisfactory to the Owners.
 
5
Others
 
5.1
Evidence that any fees, costs and expenses then due from the Charterers to the Owners under the Leasing Documents have been paid to and received by, or will be paid to and received by, the Owners, on Delivery of the Vessel.
 
5.2
Such other documents as the Owners may reasonably require by giving two (2) Business Days' prior written notice to the Charterers.
 

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PART C

The following are the documents referred to in Clause 34.2(e)(iii):

1
Vessel Documents
 
Not later than 2 Business Days from the Commencement Date, 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).
 
2
Registration of security
 
Documentary evidence that, if applicable, the Security Interests intended to be created by the Security Documents have been duly perfected within the time periods as set out under applicable law.
 
3
Legal opinions
 
Not later than three (3) Business Days after the Commencement Date, issued signed copies of the legal opinions referred to in paragraphs 5.1 and 5.2 of Schedule 2 Part A.
 
4
Insurances
 
(a)
Not later than fifteen (15) 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 (Insurance) 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 6.1 of Schedule 2 Part A.
 
(b)
Not later than twenty (20) Business Days after the Commencement Date, the signed insurance report in the form agreed under paragraph 6.2 of Schedule 2 Part A.


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EXECUTION PAGE
 
OWNERS
  
   
SIGNED BY
)
for and on behalf of
) /s/ Yang Guangyi
HAO LEO LIMITED
)  Attorney-in-fact
   
in the presence of
)
   
Witness’ signature: /s/ Yixin Zhang
)
Witness’ name:
) Yixin Zhang
Witness’ address:
)
16/F, Hangrong Mansion, 1481 Guozhan Road, Pudong, Shanghai, China


CHARTERERS
  
   
SIGNED BY    Stavros Gyftakis
)
attorney-in-fact
)  /s/ Stavros Gyftakis
for and on behalf of
)
HELLAS OCEAN NAVIGATION CO.
)
in the presence of
)
   
Witness’ signature:
)  /s/ Maria Moschopoulou
Witness’ name: Maria Moschopoulou
 )
Witness’ address: 154 Vouliagmenis Avenue,
)
16674 Glyfada, Athens Greece
  



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EX-4.36 9 ef20039029_ex4-36.htm EXHIBIT 4.36
 Exhibit 4.36

 

1.          Shipbroker

N/A
2.         Place and date

4 June 2024
3.          Owners/Place of business (Cl. 1)
 
HAO VIRGO LIMITED, a corporation incorporated in the Republic of Liberia with registration number C-127274 and registered office address at 80 Broad Street, Monrovia, the Republic of Liberia and registered as Foreign Maritime Entity in the Republic of the Marshall Islands with registration number 914686
4.         Bareboat Charterers/Place of business (Cl. 1)
 
Patriot Shipping Co., a corporation incorporated in the Republic of the Marshall Islands with registration number 108410 and registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960
5.          Vessel’s name, call sign and flag (Cl. 1 and 3)

Patriotship

Call sign: V7A4666

Republic of the Marshall Islands
6.          Type of Vessel

BULK CARRIER
7.         GT/NT

93,079/60,504
8           When/Where built

2010
9.         Total DWT (abt.) in metric tons on summer freeboard

181.709mt
10.         Classification Society (Cl. 3)

DNV
11.       Date of last special survey by the Vessel’s classification society

TBA
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 at such location as agreed under clause 5 of the MOA
14.          Time for delivery (Cl. 4)

SEE CLAUSE 34
15.       Cancelling date (Cl. 5)

SEE CLAUSE 33
16.         Port or Place of redelivery (Cl. 15)

SEE CLAUSE 41
17.       No. of months' validity of trading and class certificates upon redelivery (Cl. 15)

THREE (3) MONTHS

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.
18.        Running days’ notice if other than stated in Cl. 4

N/A
19.       Frequency of dry-docking (Cl. 10(g))

In accordance with the Classification Society or Flag State requirements
20.        Trading limits (Cl. 6)

Worldwide within International Navigating Limits, please also see clauses 48.1(r)
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.        
25.       Currency and method of payment (Cl. 11)

USD/BANK TRANSFER
26.         Place of payment; also state beneficiary and bank account (Cl. 11)

SEE CLAUSE 36
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 12(b)
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 39 - CLAUSE 14 DOES NOT APPLY
30.         Additional insurance cover, if any, for Owners’ account limited to (Cl. 13(b) or, if applicable, Cl. 14(g))

SEE CLAUSE 39
31.       Additional insurance cover, if any, for Charterers’ account 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 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)

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)

choose an item   SEE CLAUSE 30(a)
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, Part III does not apply
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

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.
 
41.         Liquidated damages and costs shall accrue to (state party acc. to Cl. 1)
 
(a)        N/A
 
(b)
 
(c)

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, PART V DOES NOT APPLY
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 61

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)
 
Signature (Charterers)
 
/s/ Yang Guangyi
Yang Guangyi
Attorney-in-fact
/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.
PART II
1     1.            Definitions

2                    In this Charter, the following terms shall have the meanings hereby assigned to them:

3                    “The Owners” shall mean the party identified in Box 3;

4                    “The Charterers” shall mean the party identified in Box 4;

5                    “The Vessel” shall mean the vessel named in Box 5 and with particulars as stated in Boxes 6 to 12.

6                  
7                   
8      2.            Charter Period

9                    In consideration of the hire detailed in Box 22, the Owners have agreed to let and the Charterers have agreed to
10                  hire the Vessel for the period stated in Box 21 (“The Charter Period”). See also Clause 32.

11    3.            Delivery

12                  (not applicable when Part III applies, as indicated in Box 37)

13             
14                 
15                  The Vessel shall be delivered by the Owners and taken over by the Charterers at the port or place indicated in
16                  Box 13 
17   (b)          The Vessel shall be properly documented on delivery in accordance with the laws of the flag state indicated in
18                  Box 5 and the requirements of the classification society stated in Box 10. 
19                 
                 .

21   (c)          The delivery of the Vessel by the Owners and the taking over of the Vessel by the Charterers shall constitute a
22                  full performance by the Owners of all the Owners’ obligations under this Clause 3, and thereafter the Charterers
23                  shall not be entitled to make or assert any claim against the Owners on account of any conditions,
24                  representations or warranties expressed or implied with respect to the Vessel. 
25                 
26                 
27                 
28   4.            Time for Delivery (See Clause 34)

29                 
30                 
31                 
32                 
33                 
34                 
35                 
36   5.            Cancelling (See Clause 33)

37                 
38            
39                  option of cancelling this Charter by giving the Owners notice of cancellation within thirty-six (36) running hours
40                 
41            
42                 
43                 
44                
45                 
46                 
47                 
48            

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PART II
49                  
50    6.            Trading Restrictions

51                  The Vessel shall be employed in lawful trades for the carriage of suitable lawful merchandise operating within the trading
52                  limits indicated in Box 20.

53                  The Charterers undertake not to employ the Vessel or suffer the Vessel to be employed otherwise than in
54                  conformity with the terms of the contracts of insurance (including any warranties expressed or implied therein)
55                  without first obtaining the consent of the insurers to such employment and complying with such requirements
56                  as to extra premium or otherwise as the insurers may prescribe.

57                  The Charterers also undertake not to employ the Vessel or suffer her employment in any trade or business which
58                  is forbidden by the law of any country to which the Vessel may sail or is otherwise illicit or in carrying illicit or
59                  prohibited goods or in any manner whatsoever which may render her liable to condemnation, destruction,
60                  seizure or confiscation.

61                  Notwithstanding any other provisions contained in this Charter it is agreed that nuclear fuels or radioactive
62                  products or waste are specifically excluded from the cargo permitted to be loaded or carried under this Charter.
63                 This exclusion does not apply to radio-isotopes used or intended to be used for any industrial, commercial,
64                  agricultural, medical or scientific purposes provided the Owners’ prior approval has been obtained to loading
65                  thereof.

66   7.            Surveys on Redelivery

67                 
68    -            Between 30 to 45 days prior to re-delivery of the Vessel (or such other date as may be mutually agreed between the Owners and the Charterers), 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 to the Charterers and the Owners, 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 borne by the Charterers. 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. This clause shall not apply if the Charterers exercise their Purchase Option or Purchase Obligation as set out in Clauses 49 and 50 respectively.  
69                 
70                 
71                 
72    8.           Inspection

73                  The Owners shall have the right at any time after giving reasonable notice in writing to the Charterers to inspect or survey
74                  the Vessel or instruct a duly authorised surveyor to carry out such survey on their behalf:

75   (a)           to ascertain the condition of the Vessel and satisfy themselves that the Vessel is being properly repaired and
76                  maintained. The Charterers shall pay for the costs and fees for such inspection or survey up to once every calendar year. For such inspection or survey carried out for the   second or subsequent time within a calendar year, without prejudice to paragraphs (b) to (d) below in this Clause, the costs and fees incurred shall be paid by the Owners unless the Vessel is
77                  found to require material repairs or maintenance in order to achieve the condition so provided(in which case the Charterers shall pay the costs and fees  of such inspection or survey);

78   (b)          in dry-dock if the Charterers have not dry-docked Her in accordance with Clause 10(g). The costs and fees for
79                  such inspection or survey shall be paid by the Charterers up to once every calendar year (with the Owners bearing the costs and fees for any subsequent inspection made on the same basis in respect of the Vessel in dry-dock within the same calendar year); 
80   (c)           for any other commercial reason they consider necessary (provided it does not unduly interfere with the
81                  commercial operation of the Vessel). The costs and fees for such inspection and survey shall be paid by the
82                  Owners; and.
(d) the Owner shall be entitled to exercise its rights of inspection or survey under this Clause at any time following the occurrence of a Termination Event which is continuing, after giving reasonable notice in writing to the Charterers (and in such case the costs and fees for such inspection or survey shall be paid by the Charterers).

83                  All time used in respect of inspection, survey or repairs shall be for the Charterers’ account and form part of the
84                  Charter Period. The Charterers shall provide all due and necessary assistance to facilitate the Owners or Owners' surveyor's inspection of the Vessel in accordance with this Clause.

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PART II
85                  The Charterers shall also permit the Owners to inspect the Vessel’s log books whenever requested and shall
86                  whenever required by the Owners furnish them with full information regarding any casualties or other accidents
87                  or damage to the Vessel.

88    9.           Inventories, Oil and Stores

89                  A complete inventory of the Vessel’s entire equipment, outfit including spare parts, appliances and of all
90                  consumable stores on board the Vessel shall be made by the Charterers i on
91                  delivery and again on redelivery of the Vessel. The Charterers , shall at the time of
92                  delivery  take over  all bunkers, lubricating oil, unbroached provisions, paints, ropes
93                  and other consumable stores (excluding spare parts) in the said Vessel  at the
94                  ports of delivery . The Charterers shall ensure that all spare parts listed in the
95                  inventory and used during the Charter Period are replaced at their expense prior to redelivery of the Vessel (if applicable) to the Owners.

96   10.          Maintenance and Operation

97   (a)          (i) Maintenance and Repairs - During the Charter Period the Vessel shall be in the full possession and at the
98                  absolute disposal for all purposes of the Charterers and under their complete control in every respect. The
99                  Charterers shall maintain the Vessel, her machinery, boilers, appurtenances and spare parts in a good state of
100                repair, in efficient operating condition and in accordance with good commercial maintenance practice and,
101                if applicable, at their own expense they shall at all times keep the Vessel’s
102               Class fully up to date with the Classification Society indicated in Box 10 and maintain all other necessary
103               certificates in force at all times.

104                (ii) New Class and Other Safety Requirements - In the event of any improvement, structural changes or new
105                equipment becoming necessary for the continued operation of the Vessel by reason of new class requirements or by compulsory legislation, the Charterers shall ensure that the same are complied with and the time and cost of compliance shall be on the Charterers' account. 
106              
107              
108              
109              
110              
111              
112                (iii) Financial Security - The Charterers shall maintain financial security or responsibility in respect of third party
113                liabilities as required by any government, including federal, state or municipal or other division or authority
114                thereof, to enable the Vessel, without penalty or charge, lawfully to enter, remain at, or leave any port, place,
115                territorial or contiguous waters of any country, state or municipality in performance of this Charter without any
116                delay. This obligation shall apply whether or not such requirements have been lawfully imposed by such
117                government or division or authority thereof.

118               The Charterers shall make and maintain all arrangements by bond or otherwise as may be necessary to satisfy
119               such requirements at the Charterers’ sole expense and the Charterers shall indemnify the Owners against all
120               consequences whatsoever (including loss of time) for any failure or inability to do so.

121  (b)         Operation of the Vessel - The Charterers shall at their own expense and by their own procurement man, victual,
122                navigate, operate, supply, fuel and, whenever required, repair the Vessel during the Charter Period and they
123                shall pay all charges and expenses of every kind and nature whatsoever incidental to their use and operation of
124                the Vessel under this Charter, including annual flag state fees and any foreign general municipality and/or state
125                taxes. The Master, officers and crew of the Vessel shall be the servants of the Charterers for all purposes
126                whatsoever, even if for any reason appointed by the Owners.

127                Charterers shall comply with the regulations regarding officers and crew in force in the country of the Vessel’s
128                flag or any other applicable law.

129 (c)          The Charterers shall keep the Owners and any mortgagee(s) advised of the intended employment, planned dry-
130                docking and major repairs of the Vessel, as reasonably required.

131 (d)          Flag and Name of Vessel – During the Charter Period, the Charterers shall have the liberty to paint the Vessel in
132                their own colours, install and display their funnel insignia and fly their own house flag. The Charterers shall also
133                have the liberty, with the Owners’ consent,  and which, subject to Clause 42.4, shall be granted in the case of the relevant Flag State, to change the flag and/or
134                the name of the Vessel during the Charter Period. Painting and re-painting, instalment and re-instalment,
135                registration and re-registration, , shall be at the Charterers’ expense and time.

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PART II
136     (e)       Changes to the Vessel – Subject to Clause 10(a)(ii), the Charterers shall make no structural changes in the Vessel
137                or changes in the machinery, boilers, appurtenances or spare parts thereof without in each instance first securing
138                the Owners’ approval thereof (such approval not to be unreasonably withheld or delayed).  
139              
140     (f)       Use of the Vessel’s Outfit, Equipment and Appliances - The Charterers shall have the use of all outfit, equipment,
141                and appliances on board the Vessel at the time of delivery, provided the same or their substantial equivalent
142                shall be returned to the Owners on redelivery in the same good order and condition as when received, ordinary
143                wear and tear excepted. The Charterers shall from time to time during the Charter Period replace such items of
144                equipment as shall be so damaged or worn as to be unfit for use. The Charterers are to procure that all repairs
145                to or replacement of any damaged, worn or lost parts or equipment be effected in such manner (both as regards
146               workmanship and quality of materials) as not to diminish the value of the Vessel. Title of any equipment so replaced shall, unless agreed between the Owners and the Charterers, remain with the Owners. The Charterers have  the right
147                to fit additional equipment at their expense and risk (provided that no structural damage is caused to the Vessel by reason of such installation) andthe Charterers shall, at their expense remove such equipment and make good any damage caused by the fitting or removal of such additional equipment 
148                 if requested by the Owners at the time of redelivery of the Vessel. Any equipment including radio equipment on hire on the Vessel at
149                time of delivery shall be kept and maintained by the Charterers and the Charterers shall assume the obligations
150                and liabilities of the Owners under any lease contracts in connection therewith and shall reimburse the Owners
151                for all expenses incurred in connection therewith, also for any new equipment required in order to comply with
152                radio regulations.

153     (g)       Periodical Dry-Docking - The Charterers shall dry-dock the Vessel and clean and paint her underwater parts
154                whenever the same may be necessary in accordance with Classification Society or Flag State requirements,
155               
156               
157    11.       Hire  (See Clause 36)

158    (      
159               
 
\         
         
         
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.

12.          Mortgage
    

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PART II
   (b)*     The Vessel chartered under this Charter may be  financed by  mortgage(s) according to the Financial Instruments.
               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 Instruments or as may be directed from time to time
                during the currency of the Charter by the mortgagee(s) in conformity with each Financial Instrument (if any) as long as the requested information and documents are reasonably required. The
               Charterers 
agree to acknowledge each Financial Instrument (if any)  in writing in any form
                      that may  be reasonably
191                required by the mortgagee(s). 
13.          Insurance and Repairs  (See also Clause 39)

  (a)         Without prejudice to Clause 39, 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 but not limited to 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 agreed loss payable clauses, 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
               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.

         
The Charterers
 shall timely furnish Owners the  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.

(c)          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 each Financial Instrument (if any).

(d)          , Sshould the Vessel become 
a Ttotal Lloss under the insurances required under sub-clause 13(a), all insurance payments
                for such loss shall be paid to the Owners (or if applicable, its financiers) in accordance with the agreed loss payable clauses.  
The Charterers undertake to notify the Owners and the mortgagee(s), if
, of any occurrences in consequence of which the Vessel is likely to become a Ttotal Lloss 
         
(f)           For the purpose of insurance coverage against hull and machinery and war risks under the provisions of sub-
               clause 13(a), the value of the Vessel is the sum indicated in Clause 39..
         

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PART II
          
              
              
              
237               
         
               
                i
         
       
            
         
         
              
               
         
              
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15.          Redelivery See Clause 41

               
               

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PART II
              
              
               
.

               
  16.         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(except for Permitted Security Interests). 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 .”

17.          Indemnity (See Clauses 42 and 52)
          
               
               
               
              
         
               
18.          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, 
19.          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.

20.          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.

21.          General Average

                The Owners shall not contribute to General Average.

22.          Assignment, Sub-Charter and Sale (See Clause 59)

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PART II
          
               
          
.

23.          Contracts of Carriage

(a)*         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-Visby Rules. The documents shall also contain the New Jason Clause and
                the Both-to-Blame Collision Clause.

       
               
                *Delete as applicable.

24.          Corporate  Guarantee

                The Charterers undertake to furnish, on or about the date of this Charter  corporate guarantees from the Guarantors 
as guarantee and the other Security Documents at Delivery for full performance of their obligations under this
                Charter.

25. Requisition/Acquisition

(a)           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 if all hire has been paid by the Charterers hereunder then
                in the event of “Requisition for Hire” any Requisition Hire or compensation is received or receivable by the Owners,
                the same 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.
          
               
.

26.          War

(a)           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.

(b)           Without first obtaining the written consent of the Owners and complying with the terms of Clause [39 and such other requirements (including but not limited to payment of extra insurance premiums) as may be prescribed by the insurers, the Vessel   shall not continue to or go through any

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PART II
                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.

          
               
               
               

(e)          The Charterers shall have the liberty:

                (i) 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;

                (ii) 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;

                (iii) 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
               
               
               
               
               
 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.

          
               
               
.

28.          Termination (See Clauses 41 and 45)

          
               
               
               

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PART II
          
          
          
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29.          Repossession

                Subject to Clause 41, In the event of the termination of this Charter in accordance with the applicable provisions of Clause 45, 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 and the Charterers shall procure that the master and crew follow the orders and directions of 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.

30.          Dispute Resolution

(a)* This Charter and any non-contractual obligations arising out of or in connection with it 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.

                The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its

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PART II
                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$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. The language of the arbitration shall be English.

       
               
               
               
               
          
               
               
               
               
               
.

.

               
              
          

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
31.          Notices (See Clause 44)

          
          

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
           
          
                   
          
          
                   
          
                 
                 
                 
                 
                 
                 
                 
                 
           
         
                 
                 
                 
                 
                 
.

         
                 
                 
          
                 
 
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
;

          
           
           
.

           
,
.

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
                   
                   
.

.

                   
                   
                 
                 

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
                  
.

           
.

           
.

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

ADDITIONAL CLAUSES TO BARECON 2001

CLAUSE 32
– CHARTER PERIOD

32.1
For the avoidance of doubt, 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).
 
32.2
The Charter Period shall, subject to the terms of this Charter, continue for a period of sixty (60) months from the Commencement Date.

CLAUSE 33
– CANCELLATION

If the MOA expires, is cancelled, terminated, rescinded or suspended or otherwise ceases to remain in full force and effect for any reason, then this Charter shall immediately terminate and be cancelled (with the exception of Clause 52(Indemnities) and other provisions hereof expressed to survive such termination or cancellation) without the need for either of the Owners or the Charterers to take any action whatsoever, save that in case the Vessel is not delivered under the MOA for a reason solely related to a default of the Owners under the terms of the Leasing Documents, then the Owners shall refund the Handling Fee to the Charterers within a reasonable time or if same is not yet paid, the Charterers shall not be obliged to pay such fee.
 
CLAUSE 34
– DELIVERY 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.

34.2
The obligation of the Owners to charter the Vessel to the Charterers hereunder is subject to and conditional upon:

(a)
the delivery of the Vessel to the Owners as buyers under the MOA by the Charterers as sellers under the MOA and, for the purposes of this Charter, the Vessel shall be deemed delivered to the Charterers simultaneously with delivery of the Vessel to the Owners pursuant to the MOA and at Delivery the Charterers shall, subject to Clause 9 (Inventories, oil and stores), keep all bunkers, lubrication oil, unbroached provisions, paints, ropes and other consumable stores in the Vessel which were delivered under the MOA;

(b)
no Potential Termination Event or Termination Event having occurred which is continuing from the date of this Charter to the last day of the Charter Period;

(c)
the representations and warranties contained in Clause 47(Representations and warranties) being true and correct on the date hereof and on the Commencement Date;

(d)
Delivery occurring on or before the Cancelling Date;

(e)
the Owners (by themselves or by their legal counsels) having received from the Charterers:

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(i)
on or before the date falling two (2) Business Days (or such other period as the Owners may agree in their sole discretion or as otherwise specified in Part A of Schedule 2) prior to the Prepositioning Date, the documents or evidence set out in Part A of Schedule 2 in form and substance satisfactory to them;

 
(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, the documents or evidence set out in Part B of Schedule 2 in form and substance satisfactory to them; and

 
(iii)
after Delivery, the documents and evidence set out in Part C of Schedule 2 in form and substance satisfactory to them within the time periods set out thereunder,

and if any of the documents listed in sub-clauses (i) and (ii) above are not in the English language then they shall be accompanied by an English translation.
 
34.3
The conditions precedent and conditions subsequent specified in Clause 34.2(e) are inserted for the sole benefit of the Owners and may be waived or deferred in whole or in part by the Owners. Upon the requirements of Clause 34.2 being fulfilled or waived to the satisfaction of the Owners, the Owners shall give notice thereof in writing to the Charterers.

34.4
On delivery to and acceptance by the Buyers of the Vessel under the MOA from the Sellers and subject to the provisions of this Clause (Delivery of Vessel), 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 full use of the Vessel on and subject to the terms and conditions of this Charter.

34.5
On Delivery, as evidence of the commencement of the Charter Period, the Charterers shall sign and deliver to the Owners, the Acceptance Certificate. Without prejudice to this Clause (Delivery of Vessel), 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.

34.6
Without prejudice to and notwithstanding the provisions of this Clause (Delivery of Vessel), 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 (as buyers) under the MOA from the Sellers, 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.

34.7
Subject to Clause 9 (Inventories, oil and stores), the Owners shall not be obliged to deliver the Vessel to the Charterers with any bunkers and unused lubricating oils and greases in storage tanks and unopened drums of the Vessel except for such items which are already on the Vessel on the delivery of the Vessel from the Sellers to the Buyers under the MOA.

CLAUSE 35
– QUIET ENJOYMENT

35.1
Provided that the Charterers do not breach any terms of this Charter or any other Pertinent Document, the Owners hereby irrevocably and unconditionally agree not to disturb or interfere with the Charterers' lawful use, possession and quiet enjoyment of the Vessel during the Charter Period in any way whatsoever. The Owners shall procure that the Owners' Financier (if any) enter into a quiet enjoyment agreement with the Charterers on such terms (including but not limited to a purchase option in respect of the Vessel given in favour of the Charterers) as may be agreed between the Owners, the Owners' Financier and the Charterers.

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CLAUSE 36
– 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 Advance Charterhire and Charterhire in respect of the charter of the Vessel.

36.2
On the Commencement Date, the Charterers shall pay to the Owners the Advance Charterhire, payment of which shall be deemed to have been made by the Charterers to the Owners by the Charterers setting off their obligation to pay the Advance Charterhire against the Buyers' obligation to pay a corresponding equivalent amount of part of the Purchase Price under clause 18(b) of the MOA.

36.3
Following Delivery, the Charterers shall pay quarterly instalments of Charterhire in advance on each payment date ("Payment Date") as follows:

 
(a)
in 20 quarterly instalments, the first payable on the Commencement Date and each subsequent instalment to be paid at 3-monthly intervals thereafter, with the amount of each instalment being:

 
(i)
in respect of each of the 1st to 4th quarterly instalments, US$600,000; and

 
(ii)
in respect of each of the 5th to 20th quarterly instalments, in an amount equal to 1/16 of the difference between (A) the Initial Charterhire Principal Balance without Balloon and (B) the aggregate amount of the 1st to 4th quarterly instalments due and payable under sub-paragraph (i) above;

 
(b)
on the Charter Expiry Date, the Charterhire Balloon Instalment; and

 
(c)
on the Commencement Date and on the first day of every subsequent Term thereafter, the Variable Charterhire.

36.4
The Vessel shall not at any time be deemed off-hire and the Charterers' obligation to pay  Charterhire and other amounts payable under this Charter shall be paid in Dollars and shall be absolutely and unconditionally payable 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;

(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 modification (including but not limited to the installation of scrubbers) being performed on the Vessel or any part thereof;

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(e)
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;

(f)
the Total Loss or any damage to or forfeiture or court marshall's or other sale of the Vessel;

(g)
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;

(h)
any insolvency, bankruptcy, reorganization, arrangement, readjustment, dissolution, liquidation or similar proceedings by or against the Charterers;

(i)
any invalidity, unenforceability, lack of due authorization or other defects, or any failure or delay in performing or employing with any of the terms and provisions of this Charter or any of the Pertinent Documents by any party to this Charter or any other person;

(j)
any enforcement or attempted enforcement by the Owners of their rights under this Charter or any of the Pertinent Documents executed or to be executed pursuant to this Charter;

(k)
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

(l)
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.

36.5
All payments of Charterhire and any other moneys payable hereunder shall be made in Dollars.

36.6
Time of payment of Charterhire and other payments by the Charterers shall be of the essence of this Charter and shall be received by the Owners in same day available funds and not later than 5.00 pm (Shanghai time) on the due date of such payment.

36.7
All Charterhire and any moneys payable hereunder shall be payable by the Charterers to the Owners to such account as the Owners may notify the Charterers in writing.

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36.8
Payment of Charterhire shall be at the Charterers' risk until receipt by the Owners.

36.9
All stamp duty, value added 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. Should such value added tax obligation become established or payable, the Owners shall notify the Charterers immediately in this respect.
 
36.10
If the Charterers fail to make any payment due under this Charter on the due date, they shall pay interest on such late payment at the default rate of two per cent. (2%) per annum above the applicable Interest Rate and accruing from the date on which such payment became due until the date of payment thereof.

36.11
All Variable Charterhire, 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 360 day year (or any other period agreed in writing between the Owners and the Charterers).

36.12
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.

36.13
The Owners shall notify the Charterers of the Interest Rate in respect of a Term as soon as reasonably practicable after such Interest Rate is determined by the Owners on each Quotation Day.

CLAUSE 37
– CHANGES TO THE CALCULATION OF INTEREST

37.1
Unavailability of Term SOFR

(a)
Interpolated Term SOFR:  If no Term SOFR is available for the relevant Term, the applicable Reference Rate shall be the Interpolated Term SOFR for a period equal in length to the relevant Term.

(b)
Historic Term SOFR: If no Term SOFR is available for the relevant Term and it is not possible to calculate the Interpolated Term SOFR, the applicable Reference Rate shall be the Historic Term SOFR for the relevant Term.

(c)
Interpolated Historic Term SOFR: If paragraph (b) above applies but no Historic Term SOFR is available for the relevant Term, the applicable Reference Rate shall be the Interpolated Historic Term SOFR for a period equal in length to the relevant Term.

(d)
Cost of funds:  If paragraph (c) above applies but it is not possible to calculate the Interpolated Historic Term SOFR, there shall be no Reference Rate for the relevant Term and Clause 37.3 (Cost of funds) shall apply to the Charterhire Principal Balance for that Term.

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37.2
Market disruption.

If, in relation to any Term, the Owners determine (which determination shall be conclusive and binding) that the Reference Rate does not reflect the cost of funds of the Owners, the Owners shall notify the Charterers accordingly and Clause 37.3 (Cost of funds) shall apply for such Term.
 
37.3
Cost of funds.

 
(a)
If this Clause 37.3 (Cost of funds) applies to the Charterhire Principal Balance for a Term, the Interest Rate shall be the rate per annum which is the sum of:

 
(A)
the Margin; and

 
(B)
the cost certified by the Owners (expressed as an annual rate of interest) of funding the Charterhire Principal Balance during the relevant Term (as reasonably determined by the Owners).

 
(b)
If this Clause 37.3 (Cost of funds) applies and the Charterers so require, the Owners and the Charterers 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.

 
(c)
Subject to Clause 37.4 (Changes to reference rates) below, any substitute or alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of the Owners and the Charterers, be binding on all Parties.

 
(d)
If any rate notified by the Owners under sub-paragraph (B) of paragraph (a) above is less than zero, the relevant rate shall be deemed to be zero.

37.4
Changes to reference rates

If a Published Rate Replacement Event has occurred in relation to any Published Rate, the Owners are entitled to make any amendment or waiver to the terms of the Leasing Documents (at the Charterers' costs) which relates to:
 
 
(a)
providing for the use of a Replacement Reference Rate 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

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(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),

may be made with the consent of the Owners and the Charterers.

37.5
For the purposes of Clause 37.4 (Changes to reference rates):

"Published Rate" means Term SOFR for three (3) months.

"Published Rate Contingency Period" means ten (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 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:

 
(i)
the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Owners) temporary; or

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(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 Owners, that Published Rate is otherwise no longer appropriate for the purposes of calculating interest under this Charter.

"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 benchmark 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 Owners, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor or alternative to that Published Rate; or

 
(c)
in the opinion of the Owners, an appropriate successor or alternative to a Published Rate.
 
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 of any Security Interest thereon other than Permitted Security Interests.

38.2
The Charterers shall promptly notify in writing any party (as the Owners may reasonably request), including any Approved Sub-charterer, that the Vessel is the property of the Owners and the Charterers shall provide the Owners with a copy of such written notification and satisfactory evidence that such party has received 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 losses, costs or charges incurred by the Owners by reason thereof in re-taking possession or otherwise in re-acquiring the Vessel.

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38.4
The Charterers shall pay and discharge or cause any permitted sub-lessee of the Vessel, including any Approved Sub-charterer, 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 and take all reasonable steps to prevent an arrest (threatened or otherwise) of the Vessel.

CLAUSE 39
– INSURANCE

39.1
The Charterers shall at their expense procure that such insurances are effected at all times during the Charter Period in form and substance satisfactory to the Owners and the Owners' Financier (if any):

(a)
in Dollars;

(b)
in the case of hull & machinery (including excess risk), fire and usual marine risks and war risks, on an agreed value basis of at least the higher of (i) one hundred and twenty per cent (120%) of the Charterhire Principal Balance at the relevant time and (ii) the applicable Market Value of the Vessel at the relevant time;

(c)
in the case of oil pollution liability risks for the Vessel, for an aggregate amount equal to the highest level of cover from time to time available under protection and indemnity club entry and in the international marine insurance market and for an amount of not less than US$1,000,000,000;

(d)
in relation to protection and indemnity risks, in respect of the full tonnage of the Vessel and with a member of the International Group of P&I Clubs or such other independent and reputable protection and indemnity club member (in each case, which is acceptable to the Owners and the Owners' Financier (if any));

(e)
on customary terms acceptable to the Owners and the Owners' Financier (if any); and

(f)
 with first class international insurers and/or underwriters notified to the Owners (or in the case of war risks and protection and indemnity risks, with approved war risks and protection and indemnity risks associations) with a minimum of Standard & Poor's rating of A or above, Moody's rating of A or above or AM Best rating of A- or above, unless otherwise acceptable to the Owners;

39.2
In addition to the terms set out in Clause 13(a), the Charterers shall procure that the obligatory insurances shall:

(a)
subject always to paragraph (b), name the Owners, the Approved Managers 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;

 
(1)
to any provable out-of-pocket expenses that they have 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 them); and

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(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' Financier if any (in such form as they may reasonably require) that any deductible shall be apportioned between the Charterers and every other named assured or co-assured in proportion to the gross claims made or paid by each of them and that they shall do all things necessary and provide all documents, evidence and information to enable the Owners and the Owners' Financier (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 or the Owners' Financier (if any) requires:

 
(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 financiers, 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; and

 
(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;

 
(iii)
name the Owners' Financier (as applicable) and the Owners (as applicable) as respectively the first ranking loss payee and the second ranking loss payee (and in the absence of any financiers, name the Owners as first ranking loss payee) in accordance with the terms of the relevant loss payable clauses approved by the Owners' Financier 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' Financier (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' Financier (as applicable) shall be made without set-off, counterclaim or deductions or condition whatsoever;

(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' Financier (if any);

(e)
provide that the Owners and/or the Owners' Financier (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' Financier (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' Financier (if any) for thirty (30) days after receipt by the Owners and/or the Owners' Financier (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 lesser period agreed by the parties), notify in writing the Owners (copied to the Owners' Financier (if any)) of the terms and conditions of all Insurances;

(b)
at least ten (10) days (or such other lesser period agreed by the Owners) before the expiry of any obligatory 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 that obligatory insurance and of the proposed terms of renewal;

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(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 insurance 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, 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(c) 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' Financier (if any).

39.4
The Charterers shall ensure that all insurance companies and/or underwriters, and/or (if any) insurance brokers provide the Owners with copies of all policies, cover notes and certificates of entry relating to the obligatory insurances which they are to effect or renew and of a letter or letters or undertaking in a form required by the Owners and/or the Owners' Financier 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;

(b)
they will hold the benefit of such policies and such insurances, to the order of the Owners and/or the Owners' Financier (if any) and/or such other party in accordance with the said loss payable clause;

(c)
they will advise the Owners and the Owners' Financier (if any) promptly of any material change to the terms of the obligatory insurances of which they are aware;

(d)
following a written application from the Owners and/or the Owners' Financier (if any) not later than one (1) month before the expiry of the obligatory insurances they will notify the Owners and the Owners' Financier (if any) not less than twelve (12) 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' Financier (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' Financier (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 and/or the Owners' Financier (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' Financier (if any) with:

(a)
a copy of the certificate of entry for the Vessel as soon as such certificate of entry is issued;

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(b)
a letter or letters of undertaking in such form as may be required by the Owners and the Owners' Financier (if any) or in such association's standard form; and

(c)
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 the Vessel.

39.6
The Charterers shall ensure that all policies relating to obligatory insurances are deposited with the insurance brokers 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 and produce all relevant receipts when so required by the Owners.

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 39 (Insurance)) 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 associations);

(b)
the Charterers shall not make or permit any changes relating to the classification or classification society except with the prior written approval of the Owners (not to be unreasonably withheld or delayed in the case of a change of classification society to another member of the International Association of Classification Societies), provided that the Owners shall be entitled to withhold their consent if such change in classification or classification society adversely affects the insurance cover required under Clause 39 (Insurance).

(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 the 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 and/or the Owners' Financier (if any), such consent not be unreasonably withheld or delayed, and for the purposes of this Clause 39.10, "material" alterations shall include, without limitation, any change to the identity of the beneficiaries under such insurances or scope of cover, reduction to the insured amount (if such reduction results in the Charterers failing to comply with the requirements of Clause 39 (Insurance) below), limitation on the scope of the cover (if such limitation in scope results in the Charterers failing to comply with the requirements of Clause 39 (Insurance) below) and any other amendment which would cause a breach under the terms of this Charter or any other Leasing Document.

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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 upon written request, copies of:

(a)
all material communications between the Charterers and:

 
(i)
the insurance brokers; and

 
(ii)
the approved protection and indemnity and/or war risks associations; and

 
(iii)
the first class international insurers and/or underwriters, which relate directly or indirectly to:

 
(A)
the Charterers' obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and

 
(B)
any credit arrangements made between the Charterers and any of the persons referred to in paragraphs (i) or (ii) relating wholly or partly to the effecting or maintenance of the obligatory insurances; and

(b)
any material communication with all parties involved in case of a claim under any of the Vessel's insurances.

39.13
The Charterers shall promptly provide the Owners (or any persons which they may designate) with:

(a)
any information which the Owners or the Owners' Financier (or any such designated person) request for the purpose of:

 
(i)
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, in accordance with Clause 39.17; and/or

 
(ii)
effecting, maintaining or renewing any such insurances as are referred to in Clause 13(a) or dealing with or considering any matters relating to any such insurances; and

(b)
after the occurrence of a Termination Event which is continuing, copies of all material communications between all parties in case of a claim under any of the Vessel's insurances.

39.14
If one or more of the obligatory insurances are not effected and maintained with first class international insurers or are effected with an insurance or captive subsidiary of the Owners or the Charterers, then the Charterers shall procure, at their own expense, that the relevant insurers maintain in full force and effect facultative reinsurances with reinsurers and through brokers, in each case, of recognised standing and acceptable in all respects to the Owners. Any reinsurance policy shall include, if and when permitted by law, a cut-through clause in a form acceptable to the Owners.  The Charterers shall procure that underwriters of the primary insurances assign each reinsurance to the relevant financiers in full, if required.

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39.15
The Charterers shall upon demand fully indemnify the Owners in respect of all premiums and other documented expenses which are reasonably incurred by (i) the Owners in connection with or with a view to effecting, maintaining or renewing a lessor's/innocent owner's interest insurance and a lessor's/innocent owner's additional perils (pollution) insurance (which shall each cover at least 120% of the then Charterhire Principal Balance)  that is taken out in respect of the Vessel and/or (ii) the Owners' Financier (if any) in connection with or with a view to effecting, maintaining or renewing a mortgagee's interest insurance and a mortgagee's additional perils (pollution) insurance that is taken out in respect of the Vessel (which shall be on such terms as requested by the Owners' Financier from time to time).

39.16
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, reasonable wear and tear to the Vessel only excepted.

39.17
The Charterers shall:

(a)
If so requested by the Owners, but at the expense of the Charterers, furnish the Owners once a year (or, after a Termination Event has occurred and is continuing, as many times per year as the Owners may require) with a detailed report signed by an independent firm of marine insurance brokers appointed by the Owners dealing with the Insurances and stating the opinion of such firm as to the adequacy of the Insurances;

(b)
reimburse the Owners any documented expenses customarily incurred by the Owners in obtaining the reports described in Clause 39.17(a); and

(c)
procure that there is delivered to the insurance brokers described in Clause 39.17(a) such information in relation to the Insurances as such brokers may reasonably require.

39.18
The Charterers shall keep the Vessel insured at their expense against such other risks which the Owners or the Owners' Financier consider reasonable for a prudent shipowner or operator to insure against at the relevant time (as notified by the Owners, taking into account recommendations from the Owners' insurance advisors, shipping industry associations or regulatory institutions) and which are, at that time, generally insured against by owners or operators of vessels similar to the Vessel (including but not limited to kidnap and ransom insurances, which the Charterers acknowledge shall fall within the scope of this Clause).

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 which has been purchased by the Buyers from the Sellers pursuant to the MOA 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 or the other Leasing Documents.

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CLAUSE 41
– TERMINATION, REDELIVERY AND TOTAL LOSS

41.1
If the Termination Purchase Price becomes payable in accordance with Clause 45.2  or Mandatory Sale Price becomes payable in accordance with Clause 46 (Mandatory Sale), it is agreed by the Parties that (i) payment of the Termination Purchase Price is deemed to be proportionate as to amount, having regard to the legitimate interests of the Owners, in protecting against the Owners' risk of the Charterers failing to perform its obligations under this Charter or (ii) payment of the Mandatory Sale Price becomes is deemed to be proportionate as to amount, having regard to the legitimate interests of the Owners, in protecting against the Owners' risk of being required to sell the Vessel to the Charterers upon the occurrence of any of the events described under Clause 46 (Mandatory Sale).

41.2
Upon the Termination Notice Date or Mandatory Sale Date, the Charterers' right to possess and operate the Vessel shall immediately cease (without in any way affecting the Charterers' obligation to pay the Termination Purchase Price or Mandatory Sale Price, as the case may be).

41.3
Upon irrevocable receipt by the Owners in full of the (i) Termination Purchase Price pursuant to Clause 45.2  or (ii) the Mandatory Sale Price pursuant to Clause 46 (Mandatory Sale):

(a)
this Charter shall terminate (provided that any provision hereof expressed to survive such termination shall do so in accordance with its terms); and

(b)
the Owners shall 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 created by the Owners, and in this regard shall execute a bill of sale and a protocol of delivery and acceptance evidencing the same and such sale shall be completed in accordance with Clause 51(Sale of the Vessel to the Charterers).

41.4
If the Charterers fail to make any payment of the Termination Purchase Price or Mandatory Sale Price on the due date thereof:

(a)
interest on such outstanding amount shall accrue in accordance with Clause 36.10; and

(b)
the Charterers shall:

 
(i)
upon the Owners' prior written request (at the Owners' sole discretion), be obliged to (and at the Charterers' own cost) redeliver the Vessel to the Owners at such ready and nearest safe port as the Owners may require and taking into account the Vessel's then employment schedule; further and for the avoidance of doubt, the Owners shall be entitled (at the 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.  The Earnings in respect of the Vessel during such period less its operational expenses (including without limitation any maintenance costs of, and costs for bunkering, lubricants or oils for, the Vessel) shall be applied against the Termination Purchase Price or Mandatory Sale Price (as the case may be) and any other amounts payable under the Leasing Documents in any manner the Owners deem fit and any excess of such amount after such application shall be paid to the Charterers.  Upon redelivery of the Vessel this Charter shall terminate save for the provisions set out in Clause 30 (Dispute resolution), Clause 36.10, this Clause 41 (Termination, Redelivery and Total Loss) and Clause 52(Indemnities) and any other provisions expressed or implied to survive termination; and/or

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(ii)
the Owners shall at any point following such redelivery be entitled (at the Owners' sole discretion) to sell the Vessel on terms they deem fit (an "Owners' Sale") in which case the sale proceeds (after deducting all fees, taxes, disbursements, any maintenance costs of, and costs for bunkering or oils for, the Vessel and any other documented costs and expenses incurred by the Owners in connection with such sale) (the "Net Sales Proceeds") derived from such sale shall be applied against the Termination Purchase Price or Mandatory Sale Price (as the case may be) and any other amounts payable under Clause 52(Indemnities) in any manner the Owners deem fit and any excess of such amount after such application shall be paid to the Charterers.  If the Net Sales Proceeds are not in an amount sufficient to discharge in full the Termination Purchase Price or Mandatory Sale Price (as the case may be) and any other amounts payable under Clause 52(Indemnities), the Charterers shall continue to be liable for the shortfall and interest shall continue to accrue on such shortfall in accordance with Clause 36.10. Upon completion of such Owners' Sale this Charter shall terminate save for Clause 36.10, this Clause 41.4(b)(ii), Clause 52(Indemnities) and any other provisions expressed or implied to survive termination; or

(c)
the Charterers shall, upon the Owners' prior written request (at the Owners' sole discretion) be obliged to (and at the Charterers' own cost) redeliver the Vessel to the Owners at such ready and nearest safe port as the Owners may require and taking into account the Vessel's then employment schedule; and as from such redelivery the Owners shall maintain ownership of such Vessel and own, operate or sell or otherwise use it in any manner they deem fit and apply the then current Market Value of the Vessel (the "Termination Value") against the Termination Purchase Price or Mandatory Sale Price (as the case may be) and all other amounts payable to the Owners under this Charter in which case if:

 
(i)
the amount of the Termination Value is in excess of the aggregate amounts due to the Owners under the Leasing Documents at the relevant time, such excess will be paid to the Charterers; or

 
(ii)
in case the amount of the Termination Value is not sufficient to discharge in full the aggregate amounts due to the Owners under the Leasing Documents following such application the Charterers shall continue to be liable for the shortfall and interest shall continue to accrue on such shortfall in accordance with Clause 36.10.

(d)
Any terms expressly provided to survive post-termination of this Charter shall continue to be in full force and effect at all times thereafter.

41.5
If the Charterers are required to redeliver the Vessel to the Owners pursuant to Clause 41.4, the Charterers shall ensure that the Vessel shall, at the time of redelivery to the Owners (at the Charterers' cost and expense):

(a)
be in compliance with its Insurances;

(b)
be in an equivalent class as she was as at the Commencement Date without any overdue recommendation or condition, and with valid 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;

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(c)
have passed her 5-year and if applicable, 10-year special surveys, and subsequent second intermediate surveys and drydock at the Charterers' time and expense without any overdue condition or outstanding issue and to the satisfaction of the Classification Society;

(d)
have her survey cycles up to date and trading and class certificate valid for at least the number of months agreed in Box 17;

(e)
be redelivered to the Owners together with all spare parts and spare equipment as were on board at the time of Delivery (but only to the extent they have not already been used in the operation of the Vessel), 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;

(f)
be free of any cargo and Security Interest (other than Permitted Security Interests);

(g)
be free of any charter unless the Owners wish to retain the continuance of any then existing charter;

(h)
be free of officers and crew (unless otherwise agreed by the Owners);

(i)
have had her underwater parts treated with ample anti-fouling to last for the ensuing period up to the next scheduled dry docking of the Vessel; and

(a)
be redelivered to the Owners together with all material information generated during the Charter Period in respect of the use, possession, operation, navigation, utilization of lubricating oil and the physical condition of the Vessel, whether or not such information is contained in the Charterers' equipment, computer or property.

41.6
The Owners shall, (unless otherwise agreed) at the time of the redelivery of the Vessel, take over all bunkers, lubricating oil, unbroached provisions, paints, ropes and other consumable stores (excluding spare parts) in the Vessel at no cost to the Owners.

41.7
If the Vessel, for any reason, becomes a Total Loss after Delivery, the Charterers shall pay the Termination Purchase Price to the Owners on the earlier of:

(a)
the date falling one hundred and eighty (180) days after such Total Loss has occurred; and

(b)
the date of receipt by the Owners and/or the Owners' Financier (if any), in accordance with the terms of the relevant loss payable clause, of the proceeds of insurance relating to such Total Loss,

provided that it is hereby agreed that any insurance proceeds in respect of the Vessel received by the Owners or the Owners' Financier shall be applied in or towards discharging the Charterers' obligation to pay the Termination Purchase Price  and any interest accrued thereon (and such application shall be deemed satisfaction of the Charterers' obligation to pay the Termination Purchase Price to the extent so satisfied) and in the event that the insurance proceeds received from the insurers exceed the Termination Purchase Price due (and any interest accrued thereon), the excess shall be firstly paid towards satisfying any amounts outstanding and owing by the Charterers and thereafter paid to the Charterers by way of rebate of hire.
 
For the avoidance of doubt, in the event that the Vessel becomes a Total Loss:
 
 
(A)
payment of Charterhire and all other sums payable hereunder during such period shall continue to be made by the Charterers in accordance with the terms of this Charter unless and until the Owners receive the Termination Purchase Price whereby this Charter shall terminate (without prejudice to any provision of this Charter expressed to survive termination);
 
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(B)
should insurance proceeds be received by the Owners or the Owners' Financiers in their capacity as assignee (pursuant to assignment of such insurances from the Owners to the Owners' Financiers) from the insurers, the Charterers' obligations to pay the Termination Purchase Price shall be accordingly reduced by such insurance proceeds but in the event that such insurance proceeds be less than the amount of the Termination Purchase Price together with any interest accrued thereon, the Charterers remain obliged to pay to the Owners the balance so that the full amount of the Termination Purchase Price due together with any interest accrued thereon are received by the Owners;
 

 (C)
the obligation of the Charterers to pay the Termination Purchase Price 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.
 
41.8
The Owners shall have no obligation to supply to the Charterers with a replacement vessel following the occurrence of a Total Loss.

CLAUSE 42
– FEES AND EXPENSES

42.1
In consideration of the Owners entering into this Charter, the Charterers shall pay to the Owners or its nominee a non-refundable handling fee (the "Handling Fee") at such time and in such amount to be set out in a Handling Fee Letter.

42.2
Without prejudice to any other rights of the Owners hereunder, the Charterers shall promptly pay to the Owners on written demand on a full indemnity basis the amount of all documented costs, charges and expenses incurred by the Owners in collecting any Charterhire or other payments not paid on the due date under this Charter and in remedying any other failure of the Charterers to observe the terms and conditions of this Charter.

42.3
All documented costs and expenses (including, but not limited to, negotiation costs, inspections, valuations, legal fees, insurance reports, registration costs in the Flag State and any other expenses) customarily incurred by the Owners in connection with the negotiation and entry into all documentation in relation to this Charter and the Leasing Documents, shall be for the account of the Charterers (for the avoidance of doubt, regardless of whether the Commencement Date occurs), provided that the Charterers' liability for such costs and expenses shall be capped at US$100,000 in aggregate in connection with this Charter and the Other Charters (unless otherwise agreed in writing by the Owners and the Charterers) .

42.4
All documented costs and expenses customarily incurred by the Owners in relation to the acquisition and registration of the Vessel and this Charter by the Owners 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) payable by the Owners to such Flag State to maintain and/or renew such registration shall be for the account of the Charterers (for the avoidance of doubt, regardless of whether the Commencement Date occurs). 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.

42.5
If the Charterers request for a change of Flag State, the Charterers shall pay or reimburse the Owners (as the case may be) in respect of all documented costs, expenses and/or taxes which are payable to effect such change.

CLAUSE 43
 - NO WAIVER OF RIGHTS

43.1
No neglect, delay or indulgence on the part of either Party in enforcing the terms and conditions of this Charter 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.

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43.2
No right or remedy conferred upon either Party by this Charter 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 44
- NOTICES

44.1
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 addresses:

(A)
to the Owners:
c/o AVIC International Leasing Co., Ltd
   
16/F, Hangrong Mansion, 1481 Guozhan Road, Pudong,
Shanghai, China, 200126
    Attention: Ryan Zhang
    Ship Leasing Dept.
    Tel: +86-21-22262623
    Email: zhangqiang@chinaleasing.net
     
(B) to the Charterers: c/o Seanergy Maritime Holdings Corp.
    154 Vouliagmenis Avenue, 16674, Glyfada, Greece
    Attention: Mr. Stavros Gyftakis
   
Email: legal@seanergy.gr, finance@seanergy.gr
    Tel: +30 213 018 507

or, if a party hereto changes its address or e-mail address, to such other address or e-mail address as that Party may notify to the other.
 
CLAUSE 45
– TERMINATION EVENTS

45.1
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 make any payment within five (5) Business Days of its due date or on demand in accordance with the terms of any Leasing Document to which it is a party, unless such failure to pay is caused by a technical error and payment is made within five (5) Business Days of its due date;

(b)
the Charterers breach or omit to observe or perform any of their undertakings in Clause 48.1(j), (k), (l), (o), (p), (q), (r), (s), (t) or (u) or the Guarantor breaches or omits to observe or perform any of its undertakings contained in the Guarantee, provided that no Termination Event under this Clause 45.1(b) will be triggered if the breach or omission to observe or perform falls within the situations set out under Clause 46 (Mandatory Sale);

(c)
the Charterers fail to obtain and/or maintain the Insurances required under Clause 39 (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 Relevant Person commits any other breach of, or omits to observe or perform, any of their other obligations or undertakings in this Charter or any other Leasing Document (other than a breach referred to in paragraphs (a), (b) or (c) above) unless such breach or omission is in the reasonable opinion of the Owners, remediable and such Relevant Person remedies such breach or omission to the satisfaction of the Owners within ten (10) Business Days of the earlier of (i) notice thereof from the Owners and (ii) upon such Relevant Person upon becoming aware of the same;

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(e)
any representation or warranty made by any Obligor in or pursuant to any Leasing Document to which it is a party or in any notice or other document, certificate or statement delivered by it pursuant thereto or in connection therewith is or proves to be untrue or misleading in a material way when it is made;

(f)
any of the following occurs in relation to any Financial Indebtedness of an Obligor (other than an Approved Manager which is not an Affiliate of the Obligors):

 
(i)
any Financial Indebtedness of such Obligor is not paid when due or, if so payable, on demand after any applicable grace period has expired; or

 
(ii)
any Financial Indebtedness of such Obligor becomes due and payable, or declared to be due and payable, prior to its stated maturity date as a consequence of any event of default and not as a consequence of the exercise of any voluntary right of prepayment, following the expiry of any applicable grace period; or

 
(iii)
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 Obligor 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 after any applicable grace period has expired,

and no Termination Event will occur under this paragraph if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within sub-paragraphs (i) to (iii) above is (I) less than US$5,000,000 (or its equivalent in any other currency) in respect of the Guarantor or (II) less than US$500,000 (or its equivalent in any other currency) in respect of the Charterers.
 
(g)
any of the following occurs in relation to an Obligor:

 
(i)
it becomes unable to pay their debts as they fall due; or

 
(ii)
in the case of any Obligor other than the Guarantor, any of its assets (with a value amounting in aggregate to US$500,000 are subject to any form of execution, attachment, arrest, sequestration or distress (or any analogous process in any jurisdiction) which is not discharged within forty five (45) days;

 
(iii)
in the case of the Guarantor, any of its assets are subject to any form of execution, attachment, arrest, sequestration or distress (or any analogous process in any jurisdiction) which is not discharged within forty five (45) days and which results in or is reasonably likely to result in a Material Adverse Effect;

 
(iv)
any administrative or other receiver is appointed over all or a substantial part of the assets of such Obligor unless as part of a solvent reorganisation which has been approved by the Owners; or

 
(v)
it makes any formal declaration of bankruptcy or any formal statement to the effect that they are insolvent or likely to become insolvent, or a winding up or administration order is made in relation to such Obligor, or the shareholders or directors of such Obligor pass a resolution to the effect that they should be wound up, placed in administration or cease to carry on business; or

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(vi)
a petition is presented in any Relevant Jurisdiction for the winding up or administration, or the appointment of a provisional liquidator, of an Obligor unless the petition is being contested in good faith and on substantial grounds and is dismissed or withdrawn within thirty (30) days of the presentation of the petition; or

 
(vii)
an Obligor petitions a court, or presents any proposal for, any form of judicial or non-judicial suspension or deferral of payments, reorganisation of their debt (or certain of their 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; or

 
(viii)
any meeting of the shareholders or board of directors of an Obligor is summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraph (ii) to (vii) above; or

 
(ix)
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 referred to in paragraphs (ii) to (vii) above inclusive;

(h)
an Obligor (other than a third-party Approved Manager) suspends or ceases or threatens to suspend or cease carrying on all or a material part of its business;

(i)
any consent, approval, authorisation, license or permit necessary to enable the Charterers to operate or charter the Vessel or to enable any of them to comply with any provision of this Charter or the other Leasing Documents to which it is a party or to ensure that the obligations of the Charterers  are legal, valid, binding or enforceable is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent, approval, authorisation, license or permit is not fulfilled;

(j)
any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect;

(k)
the Vessel is subject to any form of execution, attachment, arrest, sequestration or distress which is not discharged within sixty (60) days (or such longer period as the Owners may agree);

(l)
this Charter or any Security Interest created by a Leasing 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;

(m)
an Obligor rescinds or purports to rescind or repudiates or purports to repudiate a Leasing Document;

(n)
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 to maintain or give effect to any of its obligations under this Charter or any of the other Leasing Documents to which it is a party in the manner it is contemplated under such Pertinent Document or any of the obligations of any Obligor under any Pertinent Document to which it is a party are not or cease to be legal, valid, binding and enforceable;
 
(o)
the Security Interest constituted by any Leasing Document is in any way imperilled or in jeopardy;

(p)
the Vessel is not delivered latest by the Cancelling Date; or

(q)
any Termination Event (as defined in any Other Charter) occurs under such Other Charter.

45.2
Upon the occurrence of a Termination Event which is continuing, the Owners shall be entitled to notify in writing the Charterers of the occurrence of the same, terminating this Charter and demanding payment of the Termination Purchase Price, whereupon the Charterers shall be obliged to pay to the Owners the Termination Purchase Price on the date (the "Termination Notice Date") specified by the Owners in their discretion in the said notice (which shall not occur earlier than 15 Business Days following the date which the Owners provide such notice to the Charterers).

45.3
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.

45.4
Without limiting the generality of the foregoing or any other rights of the Owners, upon the occurrence of a Termination Event which is continuing, the Owners shall have the sole and exclusive right and power to (i) settle, compromise, compound, adjust or defend any actions, suits or proceedings 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 (iii) change or appoint a new manager for the Vessel to another Approved Manager, and the appointment of the pre-existing Approved Manager may be terminated immediately without any recourse to the Owners in line with the terms of the Approved Management Agreement.

CLAUSE 46
– MANDATORY SALE

46.1
If any of the following occurs:

(a)
it becomes unlawful in any applicable jurisdiction for the Owners to perform any of their obligations as contemplated by any Leasing Document or for the Owners' Financiers (if any) to perform their obligations under the Financial Instruments;

(b)
any Sanctions imposed by the law or regulation of the People's Republic of China deviates from those imposed by the United Nations and compliance with such Sanctions is or has become:

 
(i)
illegal or unlawful; or

 
(ii)
unduly onerous (including, without limitation, a scenario where Charterers are not able to perform their global operation and trading, directly because of such Sanctions) or wholly impractical,

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for the Charterers or Guarantor to comply with while maintaining or giving effect to any of their obligations under this Charter or any of the other Leasing Documents to which they are respectively a party to;
 
(c)
the Approved Sub-charterer or any Third Party Approved Manager, or any of their respective directors or officers, is or becomes a Restricted Person, unless (i) such Approved Sub-charterer is replaced under a substitute Approved Sub-charter in accordance with Clause 48.1(o) or Third Party Approved Manager is being replaced under a substitute Approved Management Agreement in accordance with Clause 48.1(v)(ii), as the case may be, and in each case within 20 Business Days from the date of occurrence of the aforesaid event  and (ii) during such cure period as mentioned in sub-paragraph (i) above, in the Owners' opinion, there is no risk that the Owners are in breach of Sanctions by continuing to perform their obligations under any Leasing Document;

(d)
the Approved Sub-charterer or any Third Party Approved Manager acts in breach of any laws or regulations relating to the Vessel and its ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code, all Environmental Laws, the laws of the Vessel's registry, all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws, unless (i) such Approved Sub-charterer is replaced under a substitute Approved Sub-charter in accordance with Clause 48.1(o) or Third Party Approved Manager is being replaced under a substitute Approved Management Agreement in accordance with Clause 48.1(v)(ii), as the case may be, and in each case within 20 Business Days from the date of occurrence of the aforesaid event and (ii) during such cure period as mentioned in sub-paragraph (i) above, in the Owners’ opinion there is no risk that the Owners are in breach of Sanctions by continuing to perform their obligations under any Leasing Document; or

(e)
any consent, approval, authorisation, license or permit necessary to enable an Approved Sub-charterer to operate or charter the Vessel is not granted, expires without being renewed or is revoked, in each case for a period of more than 30 days, and notwithstanding the above the Approved Sub-charterer continues operating the Vessel,

the Charterers shall, in consideration of the Owners transferring all the Owners’ legal and beneficial title in the Vessel to the Charterers, pay the Mandatory Sale Price to the Owners on the date specified by the Owners (being no earlier than the last day of any applicable grace period permitted by law) in a written notice (“Mandatory Sale Notice") delivered by the Owners to the Charterers (such payment date being subject to the consultation period under Clause 46.2 below and in any case not earlier than fifteen (15) Business Days following the date which the Owners provide the Mandatory Sale Notice to the Charterers), and this Charter shall terminate in accordance with the procedures set out in Clause 41 (Termination, Redelivery and Total Loss).
 
46.2
If the Mandatory Sale Price becomes payable under this Clause 46 (Mandatory Sale), the Owners shall in good faith consult with the Charterers for the Owners or any Obligors to take all reasonable steps to mitigate any such circumstances, provided that:

(a)
this Clause 46 (Mandatory Sale) does not in any way limit the obligations of any Obligor under any Leasing Documents;

(b)
the Owners are not obliged to take any steps or enter into any consultation with the Charterers under this Clause 46 (Mandatory Sale) if, in the opinion of the Owners, to continue performing the Owners’ obligations under the Leasing Documents may be prejudicial to the Owners; and

(c)
subject to sub-paragraphs (a) and (b) above and unless otherwise agreed in writing between the Owners and the Charterers, such consultation period shall expire sixty (60) days from the earlier of (i) the date of occurrence of the circumstances resulting in the Mandatory Sale Price becoming payable under this Clause 46 (Mandatory Sale) and (ii) the date of the Mandatory Sale Notice, following which the Charterers shall immediately pay the Mandatory Sale Price to the Owners.

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CLAUSE 47
REPRESENTATIONS AND WARRANTIES

47.1
The Charterers represent and warrant to the Owners as of the date hereof, and on each day henceforth until the last day of the Charter Period (unless otherwise stated expressly to the contrary below), as follows:

(a)
as at the date of this Charter, the Charterers are (i) wholly legally owned and controlled by the Shareholder and (ii) wholly beneficially owned and controlled by the Guarantor;

(b)
each Obligor is duly incorporated and validly existing under the laws of its jurisdiction of its incorporation;

(c)
each Obligor has the corporate capacity, and has taken all corporate actions and obtained all consents, approvals, authorisations, licenses or permits necessary for it:

 
(i)
to execute each of the Pertinent Documents to which it is a party; and

 
(ii)
to comply with and perform its obligations under each of the Pertinent Documents to which it is a party;

(d)
the entry into and performance by any Obligor by it of, and the transactions contemplated by, each Pertinent Document to which it is a party do not and will not conflict with:

 
(i)
any law or regulation applicable to it;

 
(ii)
its constitutional documents; or

 
(iii)
any agreement or instrument binding upon it or constitute a default or termination event (however described) under any such agreement or instrument.

(e)
all the consents, approvals, authorisations, licenses or permits referred to in Clause 47.1(c) remain in force and nothing has occurred which makes any of them liable to revocation;

(f)
each of the Pertinent Documents to which an Obligor is a party constitutes such Obligor’s legal, valid and binding obligations enforceable against such party in accordance with its respective terms and any relevant insolvency laws affecting creditors’ rights generally;

(g)
no third 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 or any moneys payable hereunder and/or any of the other Leasing Documents;

(h)
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 the jurisdiction of incorporation;

(i)
no legal or administrative action (i) involving the Charterers involving claim(s) amounting in aggregate to more than US$100,000 or (ii) involving the Guarantor involving a claim which results in or is reasonably likely to result in a Material Adverse Effect, has been commenced or taken;

(j)
each Obligor has paid all taxes applicable to, or imposed on or in relation to it, its business or if applicable, the Vessel, except for those being contested in good faith with adequate reserves;

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(k)
the choice of governing law as stated in each Pertinent Document to which a Relevant Person is party to and the agreement by such party to refer disputes to the relevant courts or tribunals as stated in such Pertinent Document are valid and binding against such Relevant Person;

(l)
no Obligor nor any of their assets are entitled to immunity on the grounds of sovereignty or otherwise from any set-off, legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgment, execution or other enforcement);

(m)
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 such Obligor save for any obligation which is mandatorily preferred by law and not by virtue of any contract;

(n)
each Security Document creates (or once entered into, will create) the Security Interest which it is expressed to create with the ranking and priority it is expressed to have;

(o)
no Obligor is a US Tax Obligor;

(p)
no Obligor, nor any of their respective directors, officers or, to the best of their knowledge (after due and careful enquiry), employees or agents is a Restricted Person, and the Vessel is not the target of Sanctions;

(q)
each Obligor, and their respective directors, officers and, to the best of their knowledge (after due and careful enquiry), employees and agents, is in compliance with all Sanctions laws, and none of them have been or are currently being investigated on compliance with Sanctions, they have not received notice or are aware of any claim, action, suit or proceeding against any of them with respect to Sanctions and they have not taken any action to evade the application of Sanctions;

(r)
the Vessel is not employed, operated or managed in any manner which (i) is contrary to any Sanctions and in particular, the Vessel is not used by or to benefit any party which is a Restricted Person or trade to any Restricted Country or otherwise to any area or country where trading the Vessel to such area or country would constitute a breach of any Sanctions or published boycotts imposed by any of the United Nations, the European Union, the United States of America or the United Kingdom; or (ii) would trigger the operation of any sanctions limitation or exclusion clause in any insurance documentation;

(s)
each Obligor is not in breach of any laws or regulations relating to the Vessel and its ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code, all Environmental Laws, the laws of the Vessel's registry, all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws and each of the Obligors has instituted and maintained systems, controls, policies and procedures designed to:

 
(i)
prevent and detect incidences of bribery and corruption, money laundering and terrorism financing; and

 
(ii)
promote and achieve compliance with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws;

(t)
none of the Obligors is insolvent or in liquidation or administration or subject to any other formal or informal insolvency procedure, and no receiver, administrative receiver, administrator, liquidator, trustee or analogous officer has been appointed in respect of any Obligor or all or material part of their assets;

(u)
no Termination Event or Potential Termination Event is continuing or might reasonably be expected to result from the entry into and performance of this Charter or any other Leasing Document;

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(v)
as at the date of this Charter, the Vessel is commercially and technically managed under an Approved Management Agreement which remains in full force and effect;

(w)
as at the date of this Charter, the Charterers have not entered into any other investments, any sale or leaseback agreements, any off-balance sheet transaction or incur any other liability or obligation (including without limitation, any Financial Indebtedness of any obligations under a guarantee) except:

 
(i)
liabilities and obligations under the Leasing Documents to which they are or, as the case may be, will be a party;

 
(ii)
liabilities or obligations reasonably incurred in the normal course of its business of trading, operating and chartering, maintaining and repairing the Vessel; or

 
(iii)
liabilities, obligations and agreements as otherwise already disclosed to the Owners;

(x)
any factual information provided by the Charterers (or on their behalf) to the Owners was true and accurate in all material respects as at the date it was provided or as the date at which such information was stated; and

(y)
the entry by each Obligor into any Pertinent Document does not in any way cause any breach, and is in all respects permitted, under the terms of any document which it is entered into.

CLAUSE 48
– CHARTERERS’ UNDERTAKINGS

48.1
The Charterers undertake that, except with the Owners’ prior written consent, the Charterers 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)
there shall  be no change of ownership or control of the Charterers from that described under Clause 47.1(a) following the Commencement Date;

(b)
there shall be sent to the Owners:

 
(i)
as soon as possible, but in no event later than one hundred and eighty (180) days after the end of each financial year of the Charterers, the unaudited annual financial reports of the Charterers;

 
(ii)
as soon as possible, but in no event later than ninety (90) days after the end of each half-year, the unaudited financial reports of the Charterers in each case certified as to their correctness by a director of the Charterers;

 
(iii)
as soon as possible, but in no event later than one hundred and eighty (180) days after the end of each financial year of the Guarantor, the audited consolidated annual financial reports of the Guarantor; and

 
(iv)
as soon as possible, but in no event later than ninety (90) days after the end of each half-year, the unaudited financial reports of the Guarantor certified as to their correctness by an officer of the Guarantor,

and each set of financial statements referred to in shall be in English;
 
(c)
following the occurrence of a Termination Event which is continuing, they will provide to the Owners, at the same time as they are despatched, copies of all notices and minutes relating to any of their extraordinary shareholders’ meeting which are despatched to the Charterers’ and the Shareholder’s respective shareholders or creditors or any class of them;

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(d)
they will provide or will procure that each Obligor provides the Owners with details of any legal or administrative action involving such Obligor or the Vessel as soon as such action is instituted or it becomes apparent to such Obligor that it is likely to be instituted and is likely to have a Material Adverse Effect on the ability of such Obligor to perform their obligations under each Leasing Document to which it is a party;

(e)
they will, and will procure that each other Obligor will, obtain and promptly renew or procure the obtainment 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 it is a party (including without limitation to sell, charter and operate the Vessel);

(f)
they will not, and will procure that each other Obligor will not, create, assume or permit to exist any Security Interest of any kind upon any Leasing Document to which such Obligor is a party, and if applicable, the Vessel, in each case other than the Permitted Security Interests;

(g)
they will at their own cost, and will procure that each other Obligor will:

 
(i)
do all that such Obligor reasonably can to ensure that any Leasing Document to which such Obligor is a party validly creates the obligations and the Security Interests which such Obligor purports to create; and

 
(ii)
without limiting the generality of paragraph (i), promptly register, file, record or enrol any Pertinent Document to which such Obligor is 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 Pertinent Document to which such Obligor is a party, give any notice or take any other step which, is or has become necessary or desirable for any such Pertinent Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which such Obligor creates;

(h)
they will, and will procure that each other Obligor will, notify the Owners as soon as it becomes aware of the occurrence of:

 
(i)
any incident relating to the Vessel which results, or is anticipated to result, in repairs on the Vessel which exceed US$1,000,000;

 
(ii)
any material safety incidents taking place on board the Vessel;

 
(iii)
any Environmental Claim which is made against the Charterers, Approved Sub-charterer or any Approved Manager in connection with the Vessel (provided that such claim(s) exceed US$1,000,000 in aggregate) or any Environmental Incident;

 
(iv)
any arrest or detention of the Vessel, any exercise or purported exercise of any lien on that Vessel or its Earnings or any requisition of that Vessel for hire; and

 
(v)
any Potential Termination Event or a Termination Event,

and will keep the Owners fully up-to-date with all developments and the Charterers will, if so requested by the Owners, provide any such certificate signed by its director(s), confirming that there exists no Potential Termination Event or Termination Event;
 
(i)
they will, and will procure that each other Obligor will, as soon as practicable after receiving the request, provide the Owners with any additional financial or other information relating:

 
(i)
to themselves and/or the Vessel (including, but not limited to the condition and location of the Vessel); or

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(ii)
to any other matter relevant to, or to any provision of any Leasing Document to which it is a party,

which may be reasonably requested by the Owners (or the Owners’ Financier (if any)) at any time;
 
(j)
they will comply, or procure compliance, and will procure that each other Obligor will comply or procure compliance, with all laws or regulations relating to the Vessel and its construction, ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code, all Environmental Laws and the laws of the Vessel’s registry provided that any non-compliance shall not (and shall not be expected to) materially adversely affect the obligations of an Obligor or any Third Party Approved Manager under each Leasing Document to which it is a party or materially adverse effect the normal operations of the Vessel;

(k)
subject to Clause 10(d) of this Charter, the Vessel shall be registered under the Flag State;

(l)
the Vessel shall be classed with the Classification Society upon Delivery and shall be free of any overdue conditions or recommendations;

(m)
upon request, they will provide or they will procure to be provided to the Owners the report(s) of the survey(s) conducted pursuant to Clause 7 (Surveys on Redelivery) of this Charter in form and substance satisfactory to the Owners;

(n)
except with the Owners’ prior written consent (not to be unreasonably withheld) or were expressly permitted under the Leasing Documents, the Charterers shall not enter into any form of merger, sub-division, amalgamation or other reorganisation, provided that in the case of any Obligor other than the Charterers, such merger, sub-division, amalgamation or other reorganisation is permitted without restrictions so long as the Guarantor remains the surviving entity of any such process;

(o)
the Charterers may freely sub-charter the Vessel provided that:

 
(i)
except with the Owner’s prior written consent, they shall not permit the sub-chartering of the Vessel (A) on a bareboat basis or (B) on any other basis exceeding thirteen (13) months (including any optional extensions thereto); and

 
(ii)
as a condition precedent to the delivery of the Vessel (or condition subsequent to be satisfied within 3 Business Days of the delivery) under any such Approved Sub-charter, the Charterers shall assign all their rights and interests under such Approved Sub-charter (provided that if such Approved Sub-Charter is made otherwise than on a bareboat basis, it is capable of exceeding 13 months) on terms acceptable to the Owners and shall use reasonable commercial efforts to procure that the relevant Approved Sub-charterer gives a written acknowledgment of such assignment in form and substance reasonably acceptable to the Owners and provide such documents as the Owners may reasonably require regarding the due execution of such Approved Sub-charter (and such Approved Sub-charterer shall assign its insurance interest in the case where any such Approved Sub-charter is a bareboat charter);

(p)
they shall not make or pay any dividend or other distribution (in cash or in kind) in respect of its issued shares following the occurrence of a Termination Event which is continuing or which would result in a Termination Event;

(q)
they shall comply and shall procure that each Obligor (including, in each case, procuring or as the case may be, using all reasonable endeavours to procure the respective officers, directors, employees, consultants, agents and/or intermediaries of the relevant entity to do the same) complies with all laws and regulations in respect of Sanctions;

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(r)
the Vessel shall not be employed, operated or managed in any manner which (i) is contrary to any Sanctions and in particular, the Vessel shall not be used by or to benefit any party which is a target of Sanctions and/or is a Restricted Person or trade to any area or country which is a Restricted Country or otherwise where trading the Vessel to such area or country would constitute or reasonably be expected to constitute a breach of any Sanctions or published boycotts imposed by any of the United Nations, the European Union, the United States of America or the United Kingdom, (ii) would result or reasonably be expected to result in any Relevant Person or the Owners becoming a Restricted Person or (iii) would trigger the operation of any sanctions limitation or exclusion clause in any insurance documentation;

(s)
they shall, and shall procure that each Obligor shall (including procuring or as the case may be, using all reasonable endeavours to procure the respective officers, directors, employees, consultants, agents and/or intermediaries of the relevant entity to do the same) shall:

 
(i)
comply with all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws;

 
(ii)
maintain systems, controls, policies and procedures designed to promote and achieve ongoing compliance with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws; and

 
(iii)
in respect of the Charterers, not use, or permit or authorize any person to directly or indirectly use, the Purchase Price for any purpose that would breach any Anti-Money Laundering Laws, Anti-Terrorism Financing Laws or Business Ethics Laws;

(t)
in respect of the Charterers, not lend, invest, contribute or otherwise make available the Purchase Price to or for any other person in a manner which would result in a violation of Anti-Money Laundering Laws, Anti-Terrorism Financing Laws or Business Ethics Laws;

(u)
they shall, and shall procure that each other Obligor shall promptly notify the Owners of any non-compliance, by any Obligor or their respective officers, directors, employees, consultants, agents or intermediaries or (on a best efforts basis) by the Approved Sub-charterer, with all laws and regulations relating to Sanctions, Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws (including but not limited to notifying the Owners in writing immediately upon being aware that any Obligor or its shareholders, directors, officers or employees or any Approved Sub-charterer is a Restricted Person or has otherwise become a target of Sanctions) as well as provide all information (once available) in relation to its business and operations which may be relevant for the purposes of ascertaining whether any of the aforesaid parties are in compliance with such laws;

(v)
in respect of the management of the Vessel:

 
(i)
they shall ensure that the Vessel be commercially and/or technically managed under an Approved Management Agreement;

 
(ii)
they shall not appoint or permit to be appointed any manager of the Vessel unless it is an Approved Manager or unless the Owners have provided their prior approval for another new manager, such approval not to be unreasonably withheld or delayed, and such new manager enters into a Manager’s Undertaking; and

 
(iii)
they shall not, save with the prior written consent of the Owners (such consent not to be unreasonably withheld or delayed), agree or enter into any transaction, arrangement, document or do or omit to do anything which will have the effect of materially varying, amending or supplement the terms of an Approved Management Agreement;

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(w)
they shall not, and shall procure that they shall not agree or enter into any transaction, arrangement, document or do or omit to do anything which will have the effect of varying, amending or supplementing the material terms of an Approved Sub-charter (which, in the case of such Approved Sub-charter being made otherwise on a bareboat basis, is limited to such Approved Sub-charters which are capable of exceeding thirteen (13) months);

(x)
they shall ensure that all Earnings and any other amounts received by them in connection with the Vessel are paid into the Earnings Account;

(y)
from the Commencement Date and during the Charter Period, they shall not enter into any other investments, any sale or leaseback agreements, any off-balance sheet transaction or incur any other liability or obligation (including without limitation, any Financial Indebtedness of any obligations under a guarantee) except:

 
(i)
liabilities and obligations under the Leasing Documents to which it is or, as the case may be, will be a party; or

 
(ii)
liabilities or obligations reasonably incurred in the normal course of its business of trading, operating and chartering, maintaining and repairing the Vessel; and

(z)
any transaction entered into with their Affiliates shall be on arm’s length basis and in good faith;

(aa)
they will ensure and procure that:

 
(i)
the Market Value of the Vessel shall be ascertained at the expenses of the Charterers from time to time in the following circumstances:

 
(A)
upon the occurrence of a Termination Event which is continuing, at any time at the request of the Owners;

 
(B)
in the absence of a Termination Event which is continuing:

 
(i)
from the first anniversary of the Commencement Date, at least once every calendar year during the Charter Period, with such report to be dated no more than thirty (30) calendar days prior to every anniversary of the Commencement Date occurring within the Charter Period or on such other date as the Owners may request; and

 
(ii)
at any time at the request of the Owners if the Owners have determined (in their sole reasonable discretion) that the Market Value of the Vessel falls below the Minimum Amount; and

 
(ii)
the Charterers shall pay the Owners the amount of the fees and expenses incurred by the Owners in connection with any matter arising out of this paragraph (aa);

(bb)
if and when the Market Value of the Vessel falls below an amount (the “Minimum Amount”) which equals to 120% of the Charterhire Principal Balance as at the preceding anniversary of the Commencement Date, the Charterers shall, upon request, promptly and in any event not later than the date falling five (5) Business Days after the Owners notify them of such circumstance, provide, or ensure the provision of additional security which in the opinion of the Owners has a net realizable value of at least equal to the shortfall and is acceptable to the Owners, and which is documented in such terms as the Owners may require. (Such difference between the Market Value and the Minimum Amount being referred to as the “shortfall” for the purposes of this paragraph);

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(cc)
they shall, and shall procure that each other Obligor will provide the Owners with access to class records in respect of the Vessel if and when requested by the Owners;

(dd)
they shall ensure that no Change of Control shall occur without the prior written consent of the Owners;

(ee)
they shall ensure that they and/or the Approved Managers shall comply with the Maritime Labour Convention, 2006;

(ff)
they:

 
(i)
shall or shall procure that any other organisation or person whom the Charterers have contractually agreed to take over all duties and responsibilities imposed by the ISM Code (including the relevant Approved Manager as an ISM Company or any Approved Sub-charterer of the Vessel) will:

 
(A)
surrender any Emission Allowances in respect of the Vessel under any applicable Emission Scheme; and

 
(B)
promptly upon the Owners’ request, provide and submit such signed mandate letter in the form required by the Owners and the relevant administering  authority and provide any other information and documents as required by the Owners and/or the relevant administering authority in relation to any applicable Emission Scheme;

 
(ii)
shall fulfil all obligations which may be imposed on the Owners as registered owner of the Vessel by the MARPOL Carbon Intensity Regulations;

(gg)
without prejudice to paragraph (ff) above, in relation to EU ETS:

 
(i)
the Charterers acknowledge that if the Vessel stops at ports in the European Union, they will incur liabilities under EU ETS and Fuel EU Maritime;

 
(ii)
the Charterers acknowledge and agree that if they intend to sail the Vessel into ports in the European Union, the Charterers shall register the Vessel as part of a shipping company as required under the EU ETS and shall comply in all respects with the EU ETS and Fuel EU Maritime;

 
(iii)
if required by the competent administering authority or the Owners (due to the requirements of the competent administering authority), the Charterers shall provide a letter in a format to be agreed by the Owners (and which is in a format acceptable to the competent Emission Scheme Authority) confirming that they or the competent ISM Company have assumed responsibility for the operation of the Vessel from the Owners (the "ETS and Fuel EU Maritime Letter"); and

 
(iv)
the Charterers shall, or procure that the relevant Approved Manager as ISM Company shall, submit the ETS and Fuel EU Maritime Letter to the relevant Emission Scheme Authority upon registration of the Vessel pursuant to the EU ETS and shall provide the Owners with evidence of such registration (if available by the said authority) promptly; and

 
(v)
the Owners hereby acknowledge and undertake to timely assist the Charterers on the above, including but not limited to signing any mandate letters, forms or other instruments and providing any necessary information, in relation to an Emissions Scheme that may be necessary for the Charterers and/or the ISM Company to complete any relevant procedures; and

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(hh)
they shall (and they shall procure that each of the Approved Manager and where/if applicable, on a best efforts basis the Approved Sub-charterer shall):

 
(i)
co-operate and exchange all relevant data and information with each other in a timely manner to:

 
(A)
facilitate compliance by the Charterers and any other Emission Scheme Participant with any applicable Emission Scheme; and

 
(B)
enable the Charterers and any other Emission Scheme Participant to calculate the amount of Emission Allowances in respect of the Vessel which are required to be surrendered to the relevant Emission Scheme Authority for that Emission Scheme during the Charter Period; and

 
(ii)
promptly supply to the relevant Emission Scheme Authority relating to any applicable Emission Scheme with all relevant documents (including without limitation, any relevant mandating documents required in connection with surrendering the relevant Emission Allowances to the relevant Emission Scheme Authority relating to the relevant Emission Scheme) required to be provided to such Emission Scheme Authority relating to such Emission Scheme,

and to do all such things necessary or advisable to ensure that the Owners, the Charterers, each Emission Scheme Participant and the Vessel will be in compliance with all Environmental Laws.

CLAUSE 49
– PURCHASE OPTION

49.1
The Charterers shall have the option, at any time after the Commencement Date, to purchase the Vessel on any date (the “Purchase Option Date”) specified in a notice (the “Purchase Option Notice”) at the applicable Purchase Option Price, subject always to giving the Owners no less than forty five (45) days’ prior written notice.

49.2
A Purchase Option Notice shall be signed by a duly authorised officer or attorney of the Charterers and, once delivered to the Owners, is irrevocable and the Charterers shall be bound to pay to the Owners the Purchase Option Price on the Purchase Option Date.

49.3
Only one Purchase Option Notice may be served throughout the duration of the Charter Period.

49.4
Upon the Owners’ receipt in full of the Purchase Option Price, the Owners shall transfer the legal and beneficial ownership of the Vessel on an “as is where is” basis (and otherwise in accordance with the terms and conditions set out in Clause 51 (Sale of the Vessels to the Charterers)) to the Charterers or their nominees and shall 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 to the Charterers (and to the extent required for such purposes the Vessel shall be deemed first to have been redelivered to the Owners).

CLAUSE 50
– PURCHASE OBLIGATION

Subject to the other provisions of this Charter, in consideration of the Owners entering into this Charter, on the Charter Expiry Date, provided all moneys owing and payable under this Charter have been fully and irrevocably paid to the Owners (including the Charterhire Balloon Instalment), the Charterers shall be obliged to (i) purchase from the Owners all of the Owners’ beneficial and legal right, title and interest in the Vessel and all belonging to her and the Owners, (ii) perform their obligations referred to in Clause 51 (Sale of the Vessel to the Charterers) and (iii) pay the Purchase Obligation Price on the Charter Expiry Date in relation thereto (unless the Owners agree otherwise in writing and upon such terms and conditions as the Owners may deem fit in their absolute discretion).
 
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CLAUSE 51
– SALE OF THE VESSEL TO THE CHARTERERS

51.1
All legal and beneficial interest and title in the Vessel shall be transferred to the Charterers by the Owners pursuant to the terms of Clause 41 (Termination, Redelivery and Total Loss), Clause 49 (Purchase option) or Clause 50(Purchase obligation) (as the case may be) on an “as is where is” basis and on the following terms and conditions:

(a)
the Charterers expressly agree and acknowledge that 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 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, the Charterers hereby also waive any rights which they may have in tort in respect of any of the matters referred to under this Clause 51 (Sale of the Vessel to the Charterers) and irrevocably agree that (i) 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; (ii) 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 and (iii) 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;

(b)
the Vessel shall be free from all mortgages or any other liens, encumbrances, claims or debts whatsoever created by the Owners (save for those mortgages, liens, encumbrances or debts created under the Leasing Documents);

(c)
the Purchase Option Price, the Purchase Obligation Price, the Termination Purchase Price or the Mandatory Sale Price (as the case may be) shall be paid by (or on behalf of) the Charterers to the Owners on respectively the Purchase Option Date, the Charter Expiry Date, the Termination Notice Date or Mandatory Sale Date (as applicable), together with unpaid amounts of Charterhire and other moneys owing by or accrued or due from the Charterers under this Charter on or prior to the Purchase Option Date, the Charter Expiry Date, the Termination Notice Date or Mandatory Sale Date (as the case may be) which remain unpaid; and

(d)
upon the Purchase Option Price, the Purchase Obligation Price, the Termination Purchase Price or the Mandatory Sale Price (as the case may be) and all other moneys payable under this Charter being fully and irrevocably paid to the Owners on, and in accordance with, the terms set forth in this Charter (except in the case of Total Loss) the Owners agree (at the cost of the Charterers) to enter into (i) a bill of sale and (ii) a protocol of delivery and acceptance, and the Vessel shall accordingly be deemed delivered to the Charterers on the date and time set out in such protocol of delivery and acceptance (and to the extent required for such purposes the Vessel shall be deemed first to have been redelivered to the Owners).

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CLAUSE 52
– INDEMNITIES

52.1
The Charterers agree to indemnify and keep the Owners (collectively, the “Indemnitees”) indemnified against all claims, expenses, liabilities, losses, reasonable and documented fees (including but not limited to any vessel registration and tonnage fees) suffered or incurred by or imposed on the Indemnitees directly arising from this Charter and any Leasing Document or in connection with delivery, possession, performance, control, registration, repair, survey, insurance, maintenance, manufacture, purchase, ownership and operation of the Vessel by the Indemnitees and the costs related to the prevention or release of liens or detention of or requisition, use, operation or redelivery, sale or disposal of the Vessel or any part of it and whether prior to, during or after termination of the leasing of this Charter and whether or not the Vessel is in the possession or the control of the Charterers or otherwise. Without prejudice to its generality, this Clause 52 (Indemnities) covers any claims, expenses, liabilities and losses which directly 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. Such indemnity obligation shall survive the termination of the Charter Period.

52.2
Without prejudice to the above Clause 52.1, if any sum (a “Sum”) due from a Relevant Person (other than any Approved Sub-charterer which is not a member of the Group) under the Leasing Documents, 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:

(a)
making or filing a claim or proof against that Relevant Person; or

(b)
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

the Charterers shall, as an independent obligation, on demand, indemnify the Owners 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.
 
52.3
The obligations of the Charterers under Clause 52(Indemnities) and in respect of any Security Interest created pursuant to the Security Documents will not be affected or discharged by an act, omission, matter or thing which would reduce, release or prejudice any of its obligations under Clause 52 (Indemnities) or in respect of any Security Interest created pursuant to the Security Documents (without limitation and whether or not known to it or any Relevant Person) including:

(a)
any time, waiver or consent granted to, or composition with, any Relevant Person or other person;

(b)
the release of any other Relevant Person or any other person under the terms of any composition or arrangement with any creditor of the Guarantor or any of its affiliates;

(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 Relevant Person 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 Relevant Person or any other person;

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(e)
any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Leasing Document or any other document or security;

(f)
any unenforceability, illegality or invalidity of any obligation of any person under any Security Document or any other document or security; or

(g)
any insolvency or similar proceedings.

52.4
In consideration of the Charterers requesting the Other Owners to charter the Other Vessels to the relevant Other Charterers under the relevant Other Charters, the Charterers hereby irrevocably and unconditionally undertake to pay immediately on demand from any Other Owner such amounts in respect of all claims, expenses, liabilities, losses, documented fees of every kind and nature and all other moneys due, owing and/or payable to any Other Owner under or in connection with any Other Charter, and to indemnify and hold such Other Owner harmless against all such moneys, costs, fees and expenses.

52.5
Notwithstanding anything to the contrary herein 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.

52.6
All rights which the Charterers have at any time (whether in respect of this Charter or any other transaction) against any of the Other Charterers or the Guarantor 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 the Leasing Documents or by reason of any amount becoming payable, or liability arising, under this Clause 52 (Indemnities):

(a)
to be indemnified by any of the Other Charterers or the Guarantor;

(b)
to claim any contribution from any third party providing security for, or any other guarantor of, the Other Charterers’ or the Guarantor’s obligations under the Leasing Documents;

(c)
to take any benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of any of the Other Charterers or the Guarantor under the Leasing Documents or of any other guarantee or security taken pursuant to, or in connection with, the Leasing Documents by any of the aforesaid parties;

(d)
to bring legal or other proceedings for an order requiring any of the Other Charterers or the Guarantor or any of them to make any payment, or perform any obligation, in respect of any Leasing Document;

(e)
to exercise any right of set-off against any of the Other Charterers or the Guarantor; and/or

(f)
to claim or prove as a creditor of any of the Other Charterers or the Guarantor,

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 or any Other Owner by any of the Other Charterers or the Guarantor under or in connection with the Leasing Documents to be repaid in full on trust for the Owners or the Other Owners and shall promptly pay or transfer the same to the Owners or the Other Owners as may be directed by the Owners.

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52.7
The Charterers hereby irrevocably agree to indemnify and hold harmless the Owners against any claim, expense, liability or loss incurred by the Owners (and which is notified to the Charterers) in liquidating or employing deposits from the Owners’ Financier or third parties to fund the acquisition of the Vessel pursuant to the MOA, on or prior to the Commencement Date.

CLAUSE 53
– NO SET-OFF OR TAX DEDUCTION

53.1
All payments of Charterhire, the Purchase Obligation Price, the Purchase Option Price, the Termination Purchase Price and any other payment made from the Charterers to enable the Owners to pay all amounts under a Pertinent Document shall be paid punctually:

(a)
without any form of set-off, cross-claim or condition (except in the case of Advance Charterhire which shall be subject to the set-off under Clause 36.2 above) and in the case of Charterhire, without previous demand unless otherwise agreed with the Owners; and

(b)
free and clear of any tax deduction or withholding unless required by law.

53.2
Without prejudice to Clause 53.1, if the Charterers are required by law to make a tax deduction from any payment:

(a)
the Charterer shall notify the Owners 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.

53.3
In this Clause (No set-off or tax deduction) “tax deduction” means any deduction or withholding for or on account of any present or future tax, other than a FATCA Deduction.

CLAUSE 54
– INCREASED COSTS

54.1
This Clause 54(Increased costs) applies if the Owners notify the Charterers that they consider (acting in good faith) 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) or the Owners’ Financier has incurred or will incur an “increased cost”.

54.2
In this Clause 54 (Increased costs), “increased cost” means, in relation to the Owners or the Owners’ Financier:

(a)
an additional or increased cost incurred as a result of, or in connection with, as the case may be, (i) the Owners having entered into, or being a party to, this Charter, of funding the acquisition of the Vessel pursuant to the MOA or performing their obligations under this Charter or (ii) the Owners’ Financier entering into the funding arrangements described under Clause 59.2(a);

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(b)
a reduction in the amount of any payment to the Owners under this Charter or in the effective return which such a payment represents to the Owners on their capital;

(c)
an additional or increased cost of funding the acquisition of the Vessel pursuant to the MOA; or

(d)
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Owners under this Charter,

and for the purposes of this Clause 54.2 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.

54.3
Subject to the terms of Clause 54.1, the Charterers shall pay to the Owners, on the Owners’ demand, the amounts which the Owners from time to time notify the Charterers to be necessary to compensate the Owners for the increased cost.

CLAUSE 55
– FATCA

55.1
Defined terms. For the purposes of this Clause 55(FATCA), 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.
 
“Relevant Party” means any of the parties to this Charter and the Leasing Documents except the Approved Sub-charterer.
 
“IRS” means the United States Internal Revenue Service or any successor taxing authority or agency of the United States government.
 
55.2
FATCA Information.

(a)
Subject to paragraph (c) below, each Relevant Party shall 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 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.

(b)
If a Relevant Party confirms to any other Relevant Party 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 so notify all other Relevant Parties reasonably promptly.

(c)
Nothing in this Clause (FATCA) 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 fiduciary duty or any duty of confidentiality.

(d)
If a Relevant 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 Relevant Party shall be treated for the purposes of the Leasing Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Relevant Party in question provides the requested confirmation, forms, documentation or other information.

55.3
FATCA Deduction and gross-up by Relevant Party

(a)
If the representation made by the Charterers under Clause 47.1(o) 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.

(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.

55.4
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.

55.5
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 55.3 (FATCA deduction and gross-up by relevant party) 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.
 
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CLAUSE 56
– CONFIDENTIALITY

56.1
The Parties agree to keep the terms and conditions of this Charter and any other Leasing Documents (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)
disclosure is made to any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, insurers, insurance advisors, insurance brokers, partners as the relevant Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (b) is informed by the disclosing Party 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;

(c)
it is required to be disclosed under the applicable laws of any Relevant Jurisdiction, by a governmental order, decree, regulation or rule, by an order of a court, tribunal or listing exchange of the Relevant Jurisdiction, provided that the disclosing Party shall give written notice of such required disclosure to the other Party prior to the disclosure;

(d)
it is required to be disclosed to any governmental, banking, taxation or other regulatory authority or similar body, pursuant to the rules of any relevant stock exchange and/or securities and exchange commission rules (including, but not limited to, the US Securities and Exchange Commission Rule or the Nasdaq Rules); or pursuant to any applicable law or regulation;

(e)
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;

(f)
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), provided that such person receiving Confidential Information shall undertake that it would not disclose Confidential Information to any other party save for circumstances arising which are similar to those described under this Clause (Confidentiality) or such other circumstances as may be permitted by all Parties;

(g)
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 either paragraph (f) above or this paragraph (g)(i) or (g)(ii) (including the employees, officers and directors thereof);

 
(ii)
professional advisers retained by a disclosing party; or

 
(iii)
persons advising on, providing or considering the provision of financing to the disclosing party or an Affiliate,

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 (Confidentiality) or such other circumstances as may be permitted by all Parties; or

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(h)
with the prior written consent of all Parties.

CLAUSE 57
– PARTIAL INVALIDITY

If, at any time, any provision of a 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.
 
CLAUSE 58
– SETTLEMENT OR DISCHARGE CONDITIONAL

58.1
Any settlement or discharge under any Leasing Document between the Owners and any Relevant Person or any other person shall be conditional upon no security or payment to the Owners by any Relevant Person or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.

58.2
If the Owners consider (acting reasonably) that an amount paid or discharged by, or on behalf of, a Relevant Person in purported payment or discharge of an obligation of that Relevant Person to the Owners under the Leasing Documents is capable of being avoided or otherwise set aside on the liquidation or administration of that Relevant Person or otherwise, then that amount shall not be considered to have been unconditionally and irrevocably paid or discharged for the purposes of the Leasing Documents.

CLAUSE 59
– CHANGES TO THE PARTIES

59.1
Assignment or transfer by the Charterers

The Charterers shall not assign their rights or transfer by novation any of their rights and obligations under the Leasing Documents except with the prior consent in writing of the Owners.
 
59.2
Assignment or transfer by the Owners

Subject to Clause 35 (Quiet enjoyment) above, the Charterers acknowledge that, at any time during the Charter Period:
 
(a)
the Owners are entitled to enter into certain funding arrangements with their financier(s), (the "Owners’ Financier"), in order to finance in part or in full of the Purchase Price, 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 the prior consent of the Charterers:

 
(i)
execute a ship mortgage over the Vessel or any other Financial Instrument in favour of an Owners’ Financier (if there is any financing charter registration in respect of this Charter, the Charterers shall cooperate with the Owners to de-register such financing charter registration or to assign all interest in and to such financing charter in favour of the Owner’s Financier to the satisfaction of the Owner’s Financier, provided that such de-registration or assignment shall not affect the Charterers’ rights to operate the Vessel in accordance with the terms of this Charter);

 
(ii)
assign their rights and interests to, in or in connection with this Charter and any other Leasing Document in favour of that Owners’ Financier;

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(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 that Owners’ Financier; and

 
(iv)
enter into any other document or arrangement which is necessary to give effect to such financing arrangements.

(c)
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’ Financier in conformity with any Financial Instrument.

(d)
The Owners may transfer by novation (or otherwise) any of its rights and obligations under the Leasing Documents and/or sell the Vessel at any time with the prior written consent of the Charterers (such consent not to be unreasonably withheld or delayed), provided that such consent would not be required if such transfer is made:

 
(i)
to another lessor or financial institution or trust, fund, leasing company 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 or to any other party at any time;

 
(ii)
to an affiliate of the Owners;

 
(iii)
at such time following the occurrence of a Termination Event which is continuing; or

 
(iv)
in accordance with the Charterers’ exercise of the Purchase Option under Clause 49 (Purchase option) or of the Purchase Obligation under Clause 50 (Purchase obligation).

(e)
Following any change in the registered ownership of the Vessel permitted pursuant to Clause 59.2, this Charter would continue on identical terms (save for logical, consequential or mutually agreed amendments), and the Charterers hereby agree that they shall be liable to the aforesaid new owner of the Vessel for its performance of all obligations pursuant to this Charter after change of the registered ownership of the Vessel from the Owners to such new owner and shall procure that the Guarantor shall execute a guarantee in favour of the new owners for the inter alia, obligations of the Charterers under this Charter, in substantially in the same form as the Guarantee (or such other form as the Guarantor and the new owners may agree).

59.3
The Charterers agree and undertake to enter into any such usual documents as the Owners shall reasonably require to complete or perfect the transfer of the Vessel (with the benefit and burden of this Charter) pursuant to Clause 59.2 (Assignment or transfer by the Owners), at no cost to the Charterers.

CLAUSE 60
– MISCELLANEOUS

60.1
The Charterers waive any rights of sovereign immunity which they or any of their assets may enjoy in any jurisdiction and subjects itself to civil and commercial law with respect to their obligations under this Charter.

60.2
No term of this Charter is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not party to this Charter, save that any of the Other Owners may rely on the rights conferred on them under Clause 52.2.

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60.3
This Charter and each 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.

60.4
These additional clauses shall be read together with the BARECON 2001, and shall constitute a single instrument. In the case of any conflict between the provisions of these additional terms and the BARECON 2001, these additional terms shall prevai–.

CLAUSE 61
- DEFINITIONS

61.1
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 to be signed by the Charterers at Delivery.
 
“Account Bank” means Alpha Bank S.A. acting through its office at 93 Akti Miaouli street, 18538, Piraeus, Greece or such other bank as may be approved in writing by the Owners.
 
“Account Security” means the document creating security over the Earnings Account executed or to be executed by the Charterers in favour of the Owners and the Other Owners, in the agreed form.
 
"Advance Charterhire” means an amount equivalent to either (i) an amount that would result in a Net Purchase Price of US$16,874,000 (if the Purchase Price is between US$25,960,000 and US$27,500,000 (both figures inclusive) or (ii) 35% of the Purchase Price (if the Purchase Price is lower than US$25,960,000).

“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.
 
"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 European Union 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 any Relevant Person, Approved Sub-charterer or the Owners; (b) of any jurisdiction in which any Relevant Person, Approved Sub-charterer or the Owners conduct business; or (c) to which any Relevant Person, Approved Sub-charterer or the Owners is subjected or subject to.
 
“Anti-Terrorism Financing Laws” means all applicable anti-terrorism laws, rules, regulations or guidelines of any jurisdiction, including and not limited to the United States of America or the People’s Republic of China which are: (a) issued, administered or enforced by any governmental agency, having jurisdiction over any Relevant Person, Approved Sub-charterer or the Owners; (b) of any jurisdiction in which any Relevant Person, Approved Sub-charterer or the Owners conduct business; or (c) to which any Relevant Person, Approved Sub-charterer or the Owners are subjected or subject to.
 
“Approved Commercial Management Agreement” means:
 
 
(a)
the management agreement in respect of the Vessel dated 2 March 2015 originally made between Seanergy Management Corp. and Fidelity Marine Inc., as amended and/or supplemented by an amendment deed no. 1 dated 11 September 2015, an amendment deed no. 2 dated 24 February 2016, an amendment deed no. 3 dated 1 February 2018, an amendment deed no. 4 dated 28 June 2018 and an amendment deed no. 5 dated 3 November 2021 and an accession deed dated 19 May 2021; or

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(b)
such other management agreement entered into after the date of this Charter to be made between the Charterers as owner and an Approved Commercial Manager as commercial manager,

in each case as may be further amended and/or supplemented from time to time.
 
“Approved Commercial Manager” means Fidelity Marine Inc., a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands MH96960, or any other first class internationally recognised and reputable manager which may, with the prior written approval of the Owners, be appointed as a commercial manager of the Vessel.
 
“Approved Crew Management Agreement” means:
 
 
(a)
the crew management agreement in respect of the Vessel dated 18 August 2022 made between the Charterers as owner and Global Seaways S.A. as crew manager; or

 
(b)
such other management agreement entered into after the date of this Charter to be made between the Charterers as owner and an Approved Crew Manager as crew manager,

in each case as may be amended and/or supplemented from time to time.
 
“Approved Crew Manager” means Global Seaways S.A., a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands MH96960, or any other first class internationally recognized and reputable manager which may, with the prior written approval of the Owners, be appointed as a crew manager of the Vessel.
 
“Approved Management Agreement” means an Approved Commercial Management Agreement, Approved Crew Management Agreement, Approved Services Management Agreement or an Approved Technical Management Agreement.
 
“Approved Manager” means an Approved Commercial Manager, Approved Crew Manager, Approved Services Manager or an Approved Technical Manager.
 
"Approved Services Manager” means Seanergy Management Corp., a corporation in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands MH96960, or any other first class internationally recognized and reputable manager which may, with the prior written approval of the Owners, be appointed as a services manager of the Vessel.
 
"Approved Services Management Agreement” means:
 
 
(a)
the services management agreement in respect of the Vessel dated 19 May 2021 made between the Charterers as owner and Seanergy Management Corp. as services manager; or

 
(b)
such other management agreement entered into after the date of this Charter to be made between the Charterers as owner and an Approved Services Manager as services manager,

in each case as may be amended and/or supplemented from time to time.
 
“Approved Sub-charter” means the Existing Sub-charter or any charter entered into by the Charterers as disponent owner which the Charterers are not prohibited from entering into under Clause 48.1(o).
 
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“Approved Sub-charterer” means the Existing Sub-charterer or any sub-charterer of the Vessel under an Approved Sub-charter.
 
“Approved Technical Management Agreement” means:
 
 
(a)
the management agreement in respect of the Vessel dated 2 September 2022 made between the Charterers as owner and Seanergy Shipmanagement Corp. as technical manager; or

 
(b)
such other management agreement entered into after the date of this Charter to be made between the Charterers as owner and an Approved Technical Manager as technical manager,

in each case as may be amended and/or supplemented from time to time.
 
“Approved Technical Manager” means Seanergy Shipmanagement Corp., a corporation incorporated in the Republic of The Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands MH96960, or any other first class internationally recognised and reputable manager which may, with the prior written approval of the Owners (such approval not to be unreasonably withheld or delayed), be appointed as a technical manager of the Vessel.
 
“Approved Valuer” means Arrow, Braemar, BRS, Clarksons Platou, Fearnleys, Howe Robinson, Maersk, Seaborne Shipbrokers S.A., Simpson Spence Young or such other independent and reputable shipbroker nominated by the Charterers and approved by the Owners.
 
“Breakfunding Costs” means all breakfunding costs and expenses 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 do not fall on a Payment Date.
 
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in Greece, Hong Kong, London, New York and Shanghai and any jurisdiction in which any Earnings Account is opened and in relation to the fixing of Term SOFR, which is a US Government Securities Business Day.
 
"Business Ethics Law" means any laws, regulations and/or other legally binding requirements or determinations in relation to corruption, fraud, collusion, bid-rigging or anti-trust, human rights violations (including forced labour and human trafficking) which are applicable to any Relevant Person, Approved Sub-charterer or the Owners or to any jurisdiction where activities are performed and which shall include but not be limited to (i) the United Kingdom Bribery Act 2010 and (ii) the United States Foreign Corrupt Practices Act 1977 and all rules and regulations under each of (i) and (ii).
 
“Buyers” means the Owners acting in their capacity as buyer of the Vessel under the MOA.
 
“Cancelling Date” shall have the same meaning as defined under the MOA.
 
"Change of Control" means the Charterers ceasing to be wholly and (either directly or indirectly) owned and controlled by the Guarantor.

“Charter Expiry Date” means the date falling five (5) years from the Commencement Date.
 
“Charter Period” means the period commencing on the Commencement Date and described in Clause 32.2 unless it is either terminated earlier or extended in accordance with the provisions of this Charter.
 
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“Charterhire” means each of, or as the context may require, (i) all of the quarterly instalments of hire payable under this Charter comprising of a Fixed Charterhire element and a Variable Charterhire element and (ii) the Charterhire Balloon Instalment .
 
“Charterhire Balloon Instalment” means an amount equal to US$ 9,500,000.
 
“Charterhire Principal Balance” means, on any relevant date, (i) the Net Purchase Price minus (ii) the aggregate Fixed Charterhire which have been paid by the Charterers and received by the Owners as at such date.
 
“Classification Society” means the vessel classification society referred to in Box 10 (Classification Society) of this Charter or such other vessel classification society (being a member of the International Association of Classification Societies) acceptable to the Owners.
 
“Commencement Date” means the date on which Delivery takes place.
 
“Delivery” means the delivery of the physical and legal delivery of the Vessel from the Owners to the Charterers hereunder.
 
“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) and which arise out of the use or operation of the Vessel, including (but not limited to):
 
 
(a)
all freight, hire and passage moneys, compensation payable in the event of requisition of the Vessel for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Vessel; and

 
(b)
if and whenever the Vessel is employed on terms whereby any moneys falling within paragraph (a) 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.

“Earnings Account” means, an account in the name of the Charterers with the Account Bank or any other replacement earnings account in the name of the Charterers with any other bank which may, with the prior written consent of the Owners, be opened.

"Emission Allowances" means an allowance, credit, quota, permit or equivalent, representing a right of a vessel to emit a specified quantity of greenhouse gas emissions recognised by the Emission Scheme.
 
"Emission Scheme" means a greenhouse gas emissions trading scheme which for the purposes of this Charter shall include the EU ETS and any other similar systems imposed by applicable lawful authorities that regulate the issuance, allocation, trading or surrendering of Emission Allowances.

"Emission Scheme Authority" means in relation to an Emission Scheme, the relevant authority administering or otherwise implementing such Emissions Scheme.

"Emission Scheme Participant" means in relation to an Emission Scheme, any person which is responsible for complying with the requirements of such Emissions Scheme.

“Environmental Claim” means:

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(a)
any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or which relates to any Environmental Law; or

 
(b)
any claim by any other person which relates to an Environmental Incident,

and “claim” means a claim for damages, compensation, fines, penalties or any other payment; 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 of Environmentally Sensitive Material from the Vessel; or

 
(b)
any incident in which Environmentally Sensitive Material is released 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 liable to be arrested, attached, detained or injuncted and/or the Vessel and/or the Owners and/or the Charterers and/or the Approved Sub-charterer and/or any other operator or manager of the Vessel is at fault or otherwise liable to any legal or administrative action; or

 
(c)
any other incident involving the Vessel in which Environmentally Sensitive Material is released otherwise than from the Vessel and in connection with which the Vessel is actually arrested and/or where the Owners and/or the Charterers and/or the Approved Sub-charterer and/or any other operator or manager of the Vessel is at fault or otherwise liable to any legal or administrative action.

“Environmental Law” means any law relating to pollution or protection of the environment, to the carriage or releases of Environmentally Sensitive Material.

“Environmentally Sensitive Material” means oil, oil products and any other substances (including any chemical, gas or other hazardous or noxious substance) which are (or are capable of being or becoming) polluting, toxic or hazardous.

"ETS and Fuel EU Maritime Letter" shall have the meaning as defined under 48.1(gg)(iii).
 
“EU ETS" means the European Union Emissions Trading System specifically applicable to shipping pursuant to the Directive (EU) 2023/959 of the European Parliament and of the Council of 10 May 2023 amending European Directive 2003/87/EC and the Commission Implementing Regulation (EU) 2023/2599 of 22 November 2023 laying down rules for the application of Directive 2003/87/EC of the European Parliament and of the Council as regards the administration of shipping companies by administering authorities in respect of a shipping company.

“Existing Charter” has the meaning given to such term in the MOA.

“Existing Sub-charter” means the time charterparty in respect of the Vessel dated 8 November 2022 entered into between the Charterers as disponent owner and the Existing Sub-charterer as charterer, as amended and/or supplemented from time to time.
 
“Existing Sub-charterer” means Costamare Bulkers Inc. with its registered office at ST Shipping and Transport Pte. Ltd. acting through its office at 1 Temasek Avenue #34-01 Millenia Tower, Singapore 039192.
 
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“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 (f) if the references to the debtor referred to the other person;

“Financial Instruments” means any mortgage, deed of covenant, the general assignment or such other financial security instruments as may be granted to the Owners’ Financier as security for the obligations of the Owners in relation to the financing or refinancing of the acquisition of the Vessel.
 
“Fixed Charterhire” means the portion of Charterhire payable under Clause 36.3(a).

“Flag State” means the flag state as stated in Box 5 of this Charter or such other flag state as may be approved in writing by the Owners (such approval not to be unreasonably withheld or delayed).
 
"Fuel EU Maritime" means Fuel EU Maritime Regulation 2023/1805 dated 13 September 2023 on the use of renewable and low-carbon fuels in maritime transport, and amending Directive 2009/16/EC.
 
“General Assignment” means the general assignment in agreed form which is executed or to be executed by the Charterers in favour of the Owners in respect of the Vessel, pursuant to which the Charterers shall, inter alia, assign its rights in relation to amongst others (i) Insurances, Earnings and Requisition Compensation and (ii) any Approved Sub-charter (provided that in the case of a sub-time charter, such sub-time charter has a balance duration exceeding or capable of exceeding 13 months in the period on and following the Commencement Date)  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.
 
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“Guarantor” means Seanergy Maritime Holdings Corp., a corporation incorporated in the Republic of Marshall Islands with its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960.
 
“Handling Fee Letter” means any fee letter dated on or around the date hereof setting out the handling fee or other fee payable by the Charterers to the Owners pursuant to Clause 42.1.
 
“Historic Term SOFR” means the most recent applicable Term SOFR for a period equal in length to the relevant Term and which is as of a day which is no more than three US Government Securities Business Days before the Quotation Day.
 
“Holding Company” means, in relation to a person, any other person in relation to which it is a subsidiary.
 
“IAPPC” means a valid international air pollution prevention certificate for the Vessel issued pursuant to the MARPOL Protocol.
 
“Initial Charterhire Principal Balance without Balloon” means the Net Purchase Price minus the Charterhire Balloon Instalment.
 
“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;

"Interest Rate" means, in relation to Variable Charterhire, the aggregate of the Reference Rate and the Margin.
 
“Interpolated Historic Term SOFR” means the rate 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 Quotation Day) for the longest period (for which Term SOFR is available) which is less than the relevant Term; or

 
(ii)
if no such Term SOFR is available for a period which is less than the relevant Term, 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 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 relevant Term.

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“Interpolated Term SOFR” means the rate which results from interpolating on a linear basis between:
 
 
(a)
either

 
(i)
the applicable Term SOFR (as of the Quotation Day, prior to 5pm (New York time)) for the longest period (for which Term SOFR is available) which is less than the relevant Term; or

 
(ii)
if no such Term SOFR is available for a period which is less than the relevant Term, SOFR for the day which is two US Government Securities Business Days before the Quotation Day, prior to 5pm (New York time); and

 
(b)
the applicable Term SOFR (as of the Quotation Day, prior to 5pm (New York time)) for the shortest period (for which Term SOFR is available) which exceeds the relevant Term.

“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, supplemented or replaced 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.
 
"ISSC" means an International Ship Security Certificate issued under the ISPS Code.

"ISM Company” means the entity responsible for the Vessel's compliance with the ISM Code at any relevant time.
 
“Leasing Documents” means this Charter, the MOA and the Security Documents.
 
“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.
 
“Manager’s Undertaking” means each of the letters of undertaking, in agreed form, to be executed by the relevant Approved Manager under which, amongst others, such Approved Manager agrees to assign its rights (if any) in Insurances in favour of the Owners as well as subordinate its rights against the Charterers to the rights of the Owners.
 
"Mandatory Sale Date” means such date which the Charterers are required to pay the Mandatory Sale Price to the Owners under Clause 46 (Mandatory Sale).
 
“Mandatory Sale Notice” means the written notice from the Owners to the Charterers as described under Clause 46.1 above.
 
"Mandatory Sale Price" means, in respect of any date (for the purposes of this definition only, the "Relevant Date"), the aggregate of:
 
  (a)
the Charterhire Principal Balance as at the Relevant Date;

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  (b)
any accrued but unpaid Variable Charterhire, as at the Relevant Date;

  (c)
any Breakfunding Costs;

  (d)
any costs incurred and expenses incurred by the Owners (and the Owners’ Financier (if any)) in locating, repossessing or recovering the Vessel or collecting any payments due under this Charter or in obtaining the due performance of the obligations of the Charterers under this Charter or the other Leasing Documents and any default interest in relation thereto;

  (e)
any direct losses and liabilities and documented costs and expenses (including, without limitation, legal fees) incurred by the Owners in connection with the termination of this Charter under Clause 46 (Mandatory Sale); and

  (f)
all other outstanding amounts payable under the Leasing Documents together with any applicable interest thereon.

“Margin” means 2.55% per annum.
 
“Market Value” means, in relation to the Vessel, the arithmetic mean of the valuations shown by two (2) valuation reports each addressed to the Owners and prepared (at the Charterers’ Cost):
 
 
(i)
on a date no earlier than thirty (30) days prior to the relevant date of determination;

 
(ii)
by Approved Valuers;

 
(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, free of any existing charter or other contract of employment or such other basis as may be agreed between the Charterers and the Owners.

"MARPOL Carbon Intensity Regulations" means the regulations contained in Chapters 1, 2 and 4 of Revised MARPOL Annex VI which relate to “Regulations on the Carbon Intensity of International Shipping” and Resolution MEPC.328(76) implementing the CII and any associated guidelines and/or subsequent amendments, including the Ship Energy Efficiency Management Plan (SEEMP).
 
“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) or prospects of any Obligor; 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 entered into by the Sellers and the Buyers dated on the date hereof in relation to the sale and purchase of the Vessel.
 
“Net Purchase Price” has the meaning given to such term in the MOA.

"Net Sales Proceeds" has the meaning given to it under Clause 41.4(b)(ii).

“Obligor” means any of the Charterers, the Guarantor, the Shareholder, any Approved Manager (other than a Third Party Approved Manager) and only in relation to a Security Document any party entering into such Security Document or any other party providing security for the Charterers’ obligations under this Charter pursuant to a Security Document.
 
“Original Financial Statements” means the audited financial statements (in English) of the Guarantor and the unaudited financial statements (in English) of the Charterers for the financial year ended 31 December 2023.
 
“Original Jurisdiction” means, in relation to any Obligor, the jurisdiction under whose laws they are incorporated as at the date of this Charter.
 
“Other Charter” means, in relation to each Other Vessel, a bareboat charterparty entered into between the relevant Other Owner, as owner, and the corresponding Other Charterer, as bareboat charterer.
 
“Other Charterer” means either Icon Ocean Navigation Co., a corporation incorporated in the Republic of Liberia and Hellas Ocean Navigation Co., a corporation incorporated in the Republic of Liberia (and “Other Charterers” mean both of them).
 
“Other Owner” means either Hao Cancer Limited or Hao Leo Limited, each incorporated in the Republic of Liberia.
 
“Other Security Documents” means the Security Documents (as defined in any Other Charter) in respect of such Other Charter.
 
“Other Vessel” means any of the bulk carriers named “Kinokawa Maru” (to be renamed “Iconship”) with IMO number 9641895 and “Hellasship” with IMO number 9574236.
 
“Owners’ Financier” shall have the meaning as defined under Clause 59.2(a).
 
“Owners’ Sale” shall have the meaning as defined under Clause 41.4(b)(ii).
 
“Party” means any party to this Charter.
 
“Payment Date” shall have the meaning as defined under Clause 36.3.
 
“Payment Notice” shall have the same meaning as defined under the MOA.
 
“Permitted Security Interests” means:
 
 
(a)
Security Interests created by a Leasing Document or a Financial Instrument;

 
(b)
liens 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)
liens for salvage;

 
(d)
liens for master’s disbursements incurred in the ordinary course of trading;

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(e)
any other liens 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.

“Pertinent Document” means any Approved Sub-charter and each of the Leasing Documents.

“Potential Termination Event” means, an event or circumstance which, with the giving of any notice, the lapse of time, a determination of the Owners and/or the satisfaction of any other condition, would constitute a Termination Event.
 
“Prepositioning Date” shall have the same meaning as defined under the MOA.

"Purchase Obligation" means the purchase obligation referred to in Clause 50 (Purchase obligation).
 
"Purchase Obligation Price" means an amount equal to US$100.
 
"Purchase Option" means the early purchase option which the Charterers are entitled to exercise pursuant to Clause 49 (Purchase option).
 
"Purchase Option Date" has the meaning given to that term in Clause 49.1.
 
“Purchase Option Fee” means:
 
 
(a)
one point five per cent. (1.50%) of the Charterhire Principal Balance as at the Purchase Option Date, if the Purchase Option Date falls after the Commencement Date up to and including the third (3rd) anniversary of the Commencement Date; or

 
(b)
nil, if the Purchase Option Date falls after the third (3rd) anniversary of the Commencement Date.

"Purchase Option Notice" has the meaning given to that term in Clause 49.1.
 
"Purchase Option Price" means the aggregate of:
 
 
(a)
the Charterhire Principal Balance as at the Purchase Option Date;

 
(b)
the applicable Purchase Option Fee;

 
(c)
any accrued but unpaid Variable Charterhire as at the Purchase Option Date;

 
(d)
a nominal fee of US$100;

 
(e)
any Breakfunding Costs;

 
(f)
any costs incurred and expenses incurred by the Owners in collecting any payments due under this Charter or in obtaining the due performance of the obligations of the Charterers under this Charter or the other Leasing Documents and any default interest in relation thereto;

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(g)
any reasonable and documented losses, liabilities, costs and expenses (including, without limitation, legal fees) incurred by the Owners in connection with the exercise of the Purchase Option under Clause 49 (Purchase option); and

 
(h)
all other amounts due and outstanding under this Charter and the other Leasing Documents together with any applicable interest thereon.

“Purchase Price” has the meaning given to such term in the MOA.
 
“Quotation Day” means, in relation to any period for which an interest rate is to be determined, ten (10) US Government Securities Business Days before the first day of that period (or such earlier date as may be mutually agreed between the Owners and the Charterers} unless market practice differs in the relevant interbank market in which case the Quotation Day will be determined by the Owners in accordance with that market practice in the relevant interbank market (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 Term:

 
(a)
the applicable Term SOFR for three (3) months as of the relevant Quotation Day; or

 
(b)
as otherwise determined pursuant to Clause 37 (Changes to the calculation of interest),

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 each Obligor:
 
 
(a)
its Original Jurisdiction;

 
(b)
any jurisdiction where any property owned by it and charged under a Pertinent Document is situated;

 
(c)
any jurisdiction where it conducts its business; and

 
(d)
any jurisdiction whose laws govern the perfection of any of the Pertinent Documents entered into by it creating a Security Interest.

“Relevant Person” means each of the Charterers, the Other Charterers, the Shareholder, the Guarantor, any Approved Manager and any other party providing security in favour of the Owners in connection with the Charterers’ obligations under this Charter.

"Requisition" means:

 
(a)
any expropriation, confiscation, requisition (excluding a requisition for hire or use for a fixed period equal to or less than one (1) year without any right to an extension, such requisition not involving a requisition for title) 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 (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

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(b)
any arrest, capture or seizure of the Vessel (including any hijacking or theft) by any person whatsoever.

“Requisition Compensation” includes all compensation or other moneys payable to the Charterers by reason of any Requisition or any arrest or detention of the Vessel in the exercise or purported exercise of any lien or claim.
 
“Restricted Countries” means those countries or territories subject to country-wide or territory-wide Sanctions and/or trade embargoes or whose government is the target of Sanctions, in particular but not limited to pursuant to the U.S.'s Office of Foreign Asset Control of the U.S. Department of Treasury (“OFAC”) including at the date of this Charter, but without limitation, Iran, Cuba, Iran, North Korea, Syria and Crimea and Venezuela and any additional countries or territories based on respective country-wide or territory-wide Sanctions being imposed by OFAC or any of the regulative bodies referred to in the definition of Restricted Persons.
 
“Restricted Person” means a person, entity or any other parties (i) located, domiciled, resident or incorporated in Restricted Countries, and/or (ii) owned or controlled by or affiliated with persons, entities or any other parties as referred to in (i).
 
“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 United Kingdom, the Council of the European Union, the United Nations or its Security Council, the United States of America or the People’s Republic of China; or

 
(b)
otherwise imposed by any law or regulation binding on a Party or to which a Party is subject.

“Security Documents” means each of the Guarantee, the Account Security, the General Assignment, the Shares Security Deed, the Manager’s Undertakings, the Trust Deed and any other security documents granting a Security Interest in respect of the obligations of the Charterers under or in connection with this Charter.
 
“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;

“Sellers” means the Charterers acting in their capacity as seller of the Vessel under the MOA.
 
“Shareholder” means the Guarantor acting in its capacity as shareholder of the Charterers.
 
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“Shares Security Deed” means the pledge of shares executed or to be executed by the Shareholder in favour of the respective Owners over the shares in the respective Charterers, in agreed form.
 
"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" means a period of three (3) months’ duration or any other period agreed between the Owners and the Charterers, provided that:
 
 
(a)
the first Term shall commence on (and include) the Commencement Date;

 
(b)
each subsequent Term shall commence on (and include) the last day of the preceding Term;

 
(c)
any Term which would otherwise overrun a Payment Date shall instead end on (and include) that Payment Date; and

 
(d)
any Term which would otherwise extend beyond the Charter Period shall instead end on (and include) the last day of the Charter Period.

"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 Event” means any event described in Clause 45 (Termination Events).
 
“Termination Fee” means two per cent. (2%) of the Charterhire Principal Balance provided that the Termination Purchase Price becomes payable in accordance with Clause 45.2 (other than where the Owners’ right to terminate the Charter under Clause 45.2 arises directly from a Total Loss of the Vessel).
 
“Termination Notice Date” shall have the meaning as defined under Clause 45.2.
 
"Termination Purchase Price" means, in respect of any date (for the purposes of this definition only, the "Relevant Date"), the aggregate of:
 
 
(a)
the Charterhire Principal Balance as at the Relevant Date;

 
(b)
any accrued but unpaid Variable Charterhire, as at the Relevant Date;

 
(c)
the Termination Fee as at the Relevant Date (if applicable) (except in the case of a Total Loss);

 
(d)
any Breakfunding Costs;

 
(e)
any costs incurred and expenses incurred by the Owners (and the Owners’ Financier (if any)) in locating, repossessing or recovering the Vessel or collecting any payments due under this Charter or in obtaining the due performance of the obligations of the Charterers under this Charter or the other Leasing Documents and any default interest in relation thereto;

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  (f)
any direct losses and liabilities and documented costs and expenses (including, without limitation, legal fees) incurred by the Owners in connection with the termination of this Charter under Clause 45 (Termination Events); and

  (g)
all other outstanding amounts payable under the Leasing Documents together with any applicable interest thereon.

"Third Party Approved Manager” means any Approved Manager not being a subsidiary of the Guarantor.
 
“Total Loss” means:
 
 
(a)
actual, constructive, compromised, agreed or arranged total loss of the Vessel; or

 
(b)
any Requisition of the Vessel unless the Vessel is returned to the full control of the Borrower within forty five (45) days of such Requisition.

“Total Loss Date” means:
 
 
(a)
in the case of an actual loss of the Vessel, the date on which it occurred or, if that is unknown, the date when the Vessel was last heard of;

 
(b)
in the case of a constructive, compromised, agreed or arranged total loss of the Vessel, the earlier of:

 
(i)
the date on which a notice of abandonment is given to the insurers; and

 
(ii)
the date of any compromise, arrangement or agreement made by or on behalf of the Owners with the insurers in which the insurers agree to treat the Vessel as a Total Loss;

 
(c)
in the case of any other type of Total Loss, the date (or the most likely date) on which it appears to the Owners that the event constituting the total loss occurred.

"Trust Deed" means a trust deed dated on or around the date of this Charter entered into between the Owners, the Other Owners, the Charterers, the Other Charterers, the Guarantor, the Shareholder and the Approved Managers  which, inter alia, sets out the obligations of the Owners or any Other Owner (as the case may be) in respect of holding on trust all moneys or other assets received or recovered by or on behalf of the Owners and the Other Owners by virtue of any Security Interest or other rights granted to the Owners and/or Other Owners under or by virtue of the Security Documents and/or Other Security Documents.
 
"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 United States of America or (b) a person some or all of whose payments under the Leasing Documents are from sources within the United States for United States federal income tax purposes.
 
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"Variable Charterhire" means, in relation to a Payment Date, the interest component of charterhire payable calculated by applying the applicable Interest Rate for the relevant Term to the Charterhire Principal Balance as at such date immediately prior to such Payment Date (and in the case of the first Payment Date, on the Net Purchase Price as of the Commencement Date).
 
“Vessel” means the bulk carrier named “Patriotship” with IMO number 9446441.
 
61.2
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 and, if required by the Owners in their sole discretion, the Owners’ Financier;
 
“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;
 
“contingent liability” means a liability which is not certain to arise and/or the amount of which remains unascertained;
 
“continuing” means, in relation to any Termination Event, a Termination Event which has not been waived by the Owners and in relation to any Potential Termination Event, a Potential Termination Event which has not been waived by the Owners or remedied to the satisfaction of the Owners;
 
“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, more than fifty one per cent. (51%), 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;

“cost of funds”, unless a contrary indication appears, in relation to the Charterhire Principal Balance or any part thereof, means the average cost (determined either on an actual or a notional basis) which the Owners would incur if it were to fund, from whatever source(s) they may reasonably select, an amount equal to the amount of the Charterhire Principal Balance or that part thereof for a period equal in length to the Term of the Charterhire Principal Balance or that part thereof.
 
“document” includes a deed; also a letter, fax or telex;
 
“expense” means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax;
 
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“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 61.3;
 
“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 P&I 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;
 
“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;
 
“subsidiary” has the meaning given in Clause 61.4; 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.
 
61.3
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 preceding the numerically corresponding day if the numerically corresponding day is not a Business 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.
 
61.4
Meaning of “subsidiary”. A company (S) is a subsidiary of another company (P) if:

 
(a)
a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or

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(b)
P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or

 
(c)
P has the direct or indirect power to appoint or remove a majority of the directors of S; or

 
(d)
P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P; or

 
(e)
and any company of which S is a subsidiary is a parent company of S.

61.5
In this Charter:

 
(a)
references to a Pertinent 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 Pertinent 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; and

 
(d)
words denoting the singular number shall include the plural and vice versa.

61.6
Headings.  In interpreting a Pertinent Document or any provision of a Pertinent Document, all clauses, sub-clauses and other headings in that and any other Pertinent Document shall be entirely disregarded.

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SCHEDULE 1

Acceptance Certificate

PATRIOT SHIPPING CO. (the “Charterers”) hereby acknowledges that at          hours on          , there was delivered to, and accepted by, the Charterers the Vessel known as m.v. “PATRIOTSHIP”, registered in the name of HAO VIRGO LIMITED(the “Owners”) under the flag of the Republic of the Marshall Islands with official number ___________ under a bareboat charter dated ____________________ (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 Clause 47 (Representations and Warranties) of the Charter remain correct and that no Termination Event (as defined in the Charter) has occurred and is continuing at the date of this Acceptance Certificate.

 
 
Name:
 
Title: Attorney-in-fact
 
for and on behalf of
 
PATRIOT SHIPPING CO.
 
Date:
 

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SCHEDULE 2
 
PART A

The following are the documents referred to in Clause 34.2(e)(i):

1
Corporate Authority

1.1
A copy of the constitutional documents of each Obligor.

1.2
If required, a copy of the resolutions of the board of directors (or equivalent) of the Guarantor and the Charterers

(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)
authorizing 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 applicable, a copy of the power of attorney of any party (other than any Approved Sub-charterer) to a Leasing Document 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 the Charterers, approving the terms of, and the transactions contemplated by such Leasing Document.

1.6
A certificate of an officer or authorized signatory of each Obligor party to a Leasing Document 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
Duly executed copies of each Leasing Document (other than the General Assignment, the Manager’s Undertakings, the Shares Security Deed, the Account Security and the Trust Deed) and of each document to be delivered under each of them.

2.2
Agreed forms of the General Assignment, the Manager’s Undertakings, the Shares Security Deed, the Account Security and the Trust Deed, and of each document to be delivered under each of them.

3
Valuation(s) of the Vessel

Valuation(s) of the Vessel, addressed to the Owners and dated not earlier than thirty (30) days before the Commencement Date indicating that the Vessel’s Market Value is not less than 120% of the Net Purchase Price.
 
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4
Vessel Documents

4.1
A copy of each executed Approved Management Agreement establishing that the Vessel will, as from the Commencement Date, be managed by such Approved Manager and approved by the Owners.

4.2
A copy of the Document of Compliance of the relevant Approved Technical Manager in respect of technical management of the Vessel.

5
Legal opinions

5.1
An agreed form legal opinion by English legal advisers to the Owners on such matters on the laws of England in relation to the documents listed in paragraphs 2.1 and 2.2 of Part A of this Schedule, in form and substance acceptable to the Owners.

5.2
Agreed forms of legal opinions by lawyers appointed by the Owners on such matters relating to the documents listed in paragraphs 2.1 and 2.2 of Part A of this Schedule, concerning the laws of Liberia, Marshall Islands, Greece and such other relevant jurisdictions as the Owners may require, in form and substance acceptable to the Owners.

6
Vessel Insurances

6.1
Agreed form of letters of undertaking and certificates of entry (as the case may be) relating to insurances as set out in Clause 39 (Insurance) acknowledged by the relevant insurer, insurance broker, protection and indemnity association or war risks association (as the case may be).

6.2
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.

7
Approved Sub-charter

Copies of the relevant Approved Sub-charter to be in force and effect as at the Commencement Date.
 
8
Payment Notice

A duly completed Payment Notice to be received by the Owners not later than two (2) Business Days (or such other shorter period agreed with the Owners) prior to the Prepositioning Date.
 
9
Sellers’ payment of balance early purchase price

Evidence that the Sellers have paid the Delivery Shortfall (as defined under the MOA) not later than one (1) Business Day prior to the Prepositioning Date in accordance with Clause 18 of the MOA.

10
Deed of Release

An agreed form deed of release discharging (i) all of the Charterers’ obligations under the Existing Charter and documents conferring Security Interests entered into in connection with the Existing Charter and (ii) all Security Interests encumbering the Vessel or any part thereof (if any), in such form as is satisfactory to the Owners.
 
11
Others

11.1
Evidence that the Earnings Account has been opened.

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11.2
Copies of the Original Financial Statements.

11.3
Evidence that the Handling Fee (if due) and any fees, costs and expenses then due from the Charterers to the Owners under the Leasing Documents have been paid to and received by, or will be paid to and received by, the Owners.

11.4
Such evidence relating to a Relevant Person 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 Pertinent Documents.

11.5
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 documents listed in paragraphs 2.1 and 2.2 of Part A of this Schedule or for the validity and enforceability of such documents.

11.6
If required, evidence that any process agent referred to under the Leasing Documents has accepted its appointment.

11.7
Such other information and documents as the Owners may require by giving reasonable notice to the Charterers.

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PART B

The following are the documents referred to in Clause 34.2(e)(ii):

1
Security Documents

Duly executed copies of each of the General Assignment, the Managers’ Undertakings, the Shares Security Deed, the Account Security and the Trust Deed and of each document to be delivered under each of them.
 
2
Vessel Documents in relation to Title

Documentary evidence that the Vessel:
 
(a)
is or will be definitively registered in the name of the Owners under the Flag State;

(b)
is or will be in the absolute and unencumbered ownership of the Owners; and

(c)
has been or will be unconditionally delivered by the Sellers to the Buyers pursuant to the terms of the MOA.

3
Vessel Document

A copy of the Vessel’s class certificate evidencing that the Vessel maintains such classification (free of any overdue recommendations and conditions) as is acceptable to the Owners.

4
Deed of Release

An executed deed of release discharging (i) all of the Charterers’ obligations under the Existing Charter and documents conferring Security Interests entered into in connection with the Existing Charter and (ii) all Security Interests encumbering the Vessel or any part thereof (if any), in such form as is satisfactory to the Owners.
 
5
Others

5.1
Evidence that any fees, costs and expenses then due from the Charterers to the Owners under the Leasing Documents have been paid to and received by, or will be paid to and received by, the Owners, on Delivery of the Vessel.

5.2
Such other documents as the Owners may reasonably require by giving two (2) Business Days' prior written notice to the Charterers.

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PART C

The following are the documents referred to in Clause 34.2(e)(iii):

1
Vessel Documents

Not later than 2 Business Days from the Commencement Date, 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).
 
2
Registration of security

Documentary evidence that, if applicable, the Security Interests intended to be created by the Security Documents have been duly perfected within the time periods as set out under applicable law.
 
3
Legal opinions

Not later than three (3) Business Days after the Commencement Date, issued signed copies of the legal opinions referred to in paragraphs 5.1 and 5.2 of Schedule 2 Part A.
 
4
Insurances

(a)
Not later than fifteen (15) 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 (Insurance) 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 6.1 of Schedule 2 Part A.

(b)
Not later than twenty (20) Business Days after the Commencement Date, the signed insurance report in the form agreed under paragraph 6.2 of Schedule 2 Part A.

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EXECUTION PAGE
 
OWNERS
 
 
 
 
 
SIGNED BY
 )
for and on behalf of
 ) /s/ Yang Guangyi
HAO VIRGO LIMITED  )
Attorney-in-fact
in the presence of  )
 
 
 
 
Witness’ signature: /s/ Yixin Zhang  
 )
 
Witness’ name:    Yixin Zhang )
 
Witness’ address:    
)
 
16/F, Hangrong Mansion, 1481 Guozhan Road, Pudong, Shanghai, China

CHARTERERS
 
 
 
 
 
SIGNED BY   Stavros Gyftakis  
 )
attorney-in-fact  ) /s/ Stavros Gyftakis
for and on behalf of
 )

PATRIOT SHIPPING CO.  )
 
in the presence of
 )  

 
 
Witness’ signature:
  )
 
Witness’ name:    Maria Moschopoulou 
) /s/ Maria Moschopoulou
Witness’ address:  154 Vouliagmenis Avenue,
 )
 
 16674 Glyfada, Athens Greece


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EX-4.37 10 ef20039029_ex4-37.htm EXHIBIT 4.37
Exhibit 4.37

 

1.          Shipbroker

N/A
2.          Place and date

4 June 2024
3.          Owners/Place of business (Cl. 1)
 
HAO CANCER LIMITED, a corporation incorporated in the Republic of Liberia with registration number C-126712 and registered office address at 80 Broad Street, Monrovia, the Republic of Liberia
4.          Bareboat Charterers/Place of business (Cl. 1)
 
Icon Ocean Navigation Co., a corporation incorporated in the Republic of Liberia with registration number C-127030 and registered address at 80 Broad Street, Monrovia, the Republic of Liberia
5.          Vessel’s name, call sign and flag (Cl. 1 and 3)

Kinokawa Maru (to be renamed Iconship) Call

sign: 5LQN3

Republic of Liberia
6.          Type of Vessel

BULK CARRIER
7.          GT/NT

92,752/60,504
8           When/Where built

2013
9.          Total DWT (abt.) in metric tons on summer

freeboard

181.392mt
10.        Classification Society (Cl. 3)

Nippon Kaiji Koyokai
11.        Date of last special survey by the Vessel’s classification

society

TBA
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 at such location as agreed under clause 5 of the MOA
14.          Time for delivery (Cl. 4)

SEE CLAUSE 34
15.         Cancelling date (Cl. 5)

SEE CLAUSE 33
16.          Port or Place of redelivery (Cl. 15)

SEE CLAUSE 41
17.          No. of months' validity of trading and class certificates upon redelivery (Cl. 15)

THREE (3) MONTHS

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.
18.        Running days’ notice if other than stated in Cl. 4

N/A
19.        Frequency of dry-docking (Cl. 10(g))

In accordance with the Classification Society or Flag State requirements
20.         Trading limits (Cl. 6)

Worldwide within International Navigating Limits, please also see clauses 48.1(r)
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.         
25.        Currency and method of payment (Cl. 11)

USD/BANK TRANSFER
26.         Place of payment; also state beneficiary and bank account (Cl. 11)

SEE CLAUSE 36
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 12(b)
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 39 - CLAUSE 14 DOES NOT APPLY
30.        Additional insurance cover, if any, for Owners’ account limited to (Cl. 13(b) or, if applicable, Cl. 14(g))

SEE CLAUSE 39
31.        Additional insurance cover, if any, for Charterers’ account 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 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)

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)

choose an item   SEE CLAUSE 30(a)
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, Part III does not apply
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

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.
41.         Liquidated damages and costs shall accrue to (state party acc. to Cl. 1)

(a)          N/A

(b)

(c)
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, PART V DOES NOT APPLY
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 61

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/ Yang Guangyi
Yang Guangyi
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.
PART II
1       1.       Definitions

2                  In this Charter, the following terms shall have the meanings hereby assigned to them:

3                 “The Owners” shall mean the party identified in Box 3;

4                  “The Charterers” shall mean the party identified in Box 4;

5                  “The Vessel” shall mean the vessel named in Box 5 and with particulars as stated in Boxes 6 to 12.

                 
7                 
8       2.        Charter Period

9                  In consideration of the hire detailed in Box 22, the Owners have agreed to let and the Charterers have agreed to
10                hire the Vessel for the period stated in Box 21 (“The Charter Period”). See also Clause 32.

11     3.        Delivery

12                (not applicable when Part III applies, as indicated in Box 37)

13           
14               
15                The Vessel shall be delivered by the Owners and taken over by the Charterers at the port or place indicated in
16                Box 13 
17     (b)       The Vessel shall be properly documented on delivery in accordance with the laws of the flag state indicated in
18                Box 5 and the requirements of the classification society stated in Box 10. 
19               
               
21     (c)       The delivery of the Vessel by the Owners and the taking over of the Vessel by the Charterers shall constitute a
22                full performance by the Owners of all the Owners’ obligations under this Clause 3, and thereafter the Charterers
23                shall not be entitled to make or assert any claim against the Owners on account of any conditions,
24                representations or warranties expressed or implied with respect to the Vessel. 
25               
26               
27               
28     4.        Time for Delivery (See Clause 34)

29              
30               
31               
32              
33               
34              
35               
36     5.        Cancelling (See Clause 33)

37               
38          
39               
40              
41          
42               
43               
44               
45               
46               
47               
48           

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
49               .

50      6.       Trading Restrictions

51                The Vessel shall be employed in lawful trades for the carriage of suitable lawful merchandise operating within the trading
52                limits indicated in Box 20.

53               The Charterers undertake not to employ the Vessel or suffer the Vessel to be employed otherwise than in
54                conformity with the terms of the contracts of insurance (including any warranties expressed or implied therein)
55                without first obtaining the consent of the insurers to such employment and complying with such requirements
56               as to extra premium or otherwise as the insurers may prescribe.

57               The Charterers also undertake not to employ the Vessel or suffer her employment in any trade or business which
58               is forbidden by the law of any country to which the Vessel may sail or is otherwise illicit or in carrying illicit or
59               prohibited goods or in any manner whatsoever which may render her liable to condemnation, destruction,
60               seizure or confiscation.

61                Notwithstanding any other provisions contained in this Charter it is agreed that nuclear fuels or radioactive
62                products or waste are specifically excluded from the cargo permitted to be loaded or carried under this Charter.
63                This exclusion does not apply to radio-isotopes used or intended to be used for any industrial, commercial,
64               agricultural, medical or scientific purposes provided the Owners’ prior approval has been obtained to loading
65                thereof.

66     7.       Surveys on Redelivery

67              
68              Between 30 to 45 days prior to re-delivery of the Vessel (or such other date as may be mutually agreed between the Owners and the Charterers), 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 to the Charterers and the Owners, 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 borne by the Charterers. 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. This clause shall not apply if the Charterers exercise their Purchase Option or Purchase Obligation as set out in Clauses 49 and 50 respectively.  
69              
70              
71               .

72     8.        Inspection

73               The Owners shall have the right at any time after giving reasonable notice in writing to the Charterers to inspect or survey
74               the Vessel or instruct a duly authorised surveyor to carry out such survey on their behalf:

75     (a)      to ascertain the condition of the Vessel and satisfy themselves that the Vessel is being properly repaired and
76              maintained. The Charterers shall pay for the costs and fees for such inspection or survey up to once every calendar year. For such inspection or survey carried out for the second or subsequent time within a calendar year, without prejudice to paragraphs (b) to (d) below in this Clause, the costs and fees incurred shall be paid by the Owners unless the Vessel is
77              found to require material repairs or maintenance in order to achieve the condition so provided(in which case the Charterers shall pay the costs and fees of such inspection or survey);

78     (b)      in dry-dock if the Charterers have not dry-docked Her in accordance with Clause 10(g). The costs and fees for
79              such inspection or survey shall be paid by the Charterers up to once every calendar year (with the Owners bearing the costs and fees for any subsequent inspection made on the same basis in respect of the Vessel in dry-dock within the same calendar year); 
80     (c)      for any other commercial reason they consider necessary (provided it does not unduly interfere with the
81               commercial operation of the Vessel). The costs and fees for such inspection and survey shall be paid by the
82               Owners; and.
(d) the Owner shall be entitled to exercise its rights of inspection or survey under this Clause at any time following the occurrence of a Termination Event which is continuing, after giving reasonable notice in writing to the Charterers (and in such case the costs and fees for such inspection or survey shall be paid by the Charterers).

83               All time used in respect of inspection, survey or repairs shall be for the Charterers’ account and form part of the
84              Charter Period. The Charterers shall provide all due and necessary assistance to facilitate the Owners or Owners' surveyor's inspection of the Vessel in accordance with this Clause.

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
85                The Charterers shall also permit the Owners to inspect the Vessel’s log books whenever requested and shall
86                whenever required by the Owners furnish them with full information regarding any casualties or other accidents
87               or damage to the Vessel.

88     9.        Inventories, Oil and Stores

89               A complete inventory of the Vessel’s entire equipment, outfit including spare parts, appliances and of all
90                consumable stores on board the Vessel shall be made by the Charterers i on
91               delivery and again on redelivery of the Vessel. The Charterers , shall at the time of
92               delivery  take over  all bunkers, lubricating oil, unbroached provisions, paints, ropes
93               and other consumable stores (excluding spare parts) in the said Vessel  at the
94               ports of delivery . The Charterers shall ensure that all spare parts listed in the
95               inventory and used during the Charter Period are replaced at their expense prior to redelivery of the Vessel (if applicable) to the Owners.

96     10.      Maintenance and Operation

97     (a)      (i) Maintenance and Repairs - During the Charter Period the Vessel shall be in the full possession and at the
98               absolute disposal for all purposes of the Charterers and under their complete control in every respect. The
99               Charterers shall maintain the Vessel, her machinery, boilers, appurtenances and spare parts in a good state of
100             repair, in efficient operating condition and in accordance with good commercial maintenance practice and,
101               if applicable, at their own expense they shall at all times keep the Vessel’s
102             Class fully up to date with the Classification Society indicated in Box 10 and maintain all other necessary
103             certificates in force at all times.

104              (ii) New Class and Other Safety Requirements - In the event of any improvement, structural changes or new
105            equipment becoming necessary for the continued operation of the Vessel by reason of new class requirements or by compulsory legislation, the Charterers shall ensure that the same are complied with and the time and cost of compliance shall be on the Charterers' account. 
106             
107            
108            
109            
110            
111            
112              (iii) Financial Security - The Charterers shall maintain financial security or responsibility in respect of third party
113              liabilities as required by any government, including federal, state or municipal or other division or authority
114             thereof, to enable the Vessel, without penalty or charge, lawfully to enter, remain at, or leave any port, place,
115              territorial or contiguous waters of any country, state or municipality in performance of this Charter without any
116              delay. This obligation shall apply whether or not such requirements have been lawfully imposed by such
117             government or division or authority thereof.

118             The Charterers shall make and maintain all arrangements by bond or otherwise as may be necessary to satisfy
119             such requirements at the Charterers’ sole expense and the Charterers shall indemnify the Owners against all
120             consequences whatsoever (including loss of time) for any failure or inability to do so.

121   (b)      Operation of the Vessel - The Charterers shall at their own expense and by their own procurement man, victual,
122             navigate, operate, supply, fuel and, whenever required, repair the Vessel during the Charter Period and they
123             shall pay all charges and expenses of every kind and nature whatsoever incidental to their use and operation of
124             the Vessel under this Charter, including annual flag state fees and any foreign general municipality and/or state
125             taxes. The Master, officers and crew of the Vessel shall be the servants of the Charterers for all purposes
126              whatsoever, even if for any reason appointed by the Owners.

127             Charterers shall comply with the regulations regarding officers and crew in force in the country of the Vessel’s
128             flag or any other applicable law.

129    (c)      The Charterers shall keep the Owners and any mortgagee(s) advised of the intended employment, planned dry-
130 docking and major repairs of the Vessel, as reasonably required.

131   (d)      Flag and Name of Vessel – During the Charter Period, the Charterers shall have the liberty to paint the Vessel in
132              their own colours, install and display their funnel insignia and fly their own house flag. The Charterers shall also
133            have the liberty, with the Owners’ consent,  and which, subject to Clause 42.4, shall be granted in the case of the relevant Flag State, to change the flag and/or

134             the name of the Vessel during the Charter Period. Painting and re-painting, instalment and re-instalment,
135             registration and re-registration, , shall be at the Charterers’ expense and time.

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
136   (e)      Changes to the Vessel – Subject to Clause 10(a)(ii), the Charterers shall make no structural changes in the Vessel
137             or changes in the machinery, boilers, appurtenances or spare parts thereof without in each instance first securing
138             the Owners’ approval thereof (such approval not to be unreasonably withheld or delayed).  
139            .

140    (f)      Use of the Vessel’s Outfit, Equipment and Appliances - The Charterers shall have the use of all outfit, equipment,
141             and appliances on board the Vessel at the time of delivery, provided the same or their substantial equivalent
142             shall be returned to the Owners on redelivery in the same good order and condition as when received, ordinary
143             wear and tear excepted. The Charterers shall from time to time during the Charter Period replace such items of
144             equipment as shall be so damaged or worn as to be unfit for use. The Charterers are to procure that all repairs
145              to or replacement of any damaged, worn or lost parts or equipment be effected in such manner (both as regards
146             workmanship and quality of materials) as not to diminish the value of the Vessel. Title of any equipment so replaced shall, unless agreed between the Owners and the Charterers, remain with the Owners. The Charterers have the right
147            to fit additional equipment at their expense and risk (provided that no structural damage is caused to the Vessel by reason of such installation) andthe Charterers shall, at their expense remove such equipment and make good any damage caused by the fitting or removal of such additional equipment 
148              if requested by the Owners at the time of redelivery of the Vessel. Any equipment including radio equipment on hire on the Vessel at
149             time of delivery shall be kept and maintained by the Charterers and the Charterers shall assume the obligations
150             and liabilities of the Owners under any lease contracts in connection therewith and shall reimburse the Owners
151             for all expenses incurred in connection therewith, also for any new equipment required in order to comply with
152              radio regulations.

153    (g)     Periodical Dry-Docking - The Charterers shall dry-dock the Vessel and clean and paint her underwater parts
154            whenever the same may be necessary in accordance with Classification Society or Flag State requirements,
155           
156           
157    11.     Hire  (See Clause 36)

158   (     
159            
 
\     
     
     
.

     
.

      
.

     
.

12.      Mortgage

 

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
   (b)*  The Vessel chartered under this Charter may be  financed by  mortgage(s) according to the Financial Instruments.

             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 Instruments or as may be directed from time to time
           during the currency of the Charter by the mortgagee(s) in conformity with each Financial Instrument (if any) as long as the requested information and documents are reasonably required. The
             Charterers 
agree to acknowledge each Financial Instrument (if any)  in writing in any form that may be reasonably
             required by the mortgagee(s). 
   13.     Insurance and Repairs  (See also Clause 39)

   (a)     Without prejudice to Clause 39, 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 but not limited to 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 agreed loss payable clauses, 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
            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.

     
The Charterers
 shall timely furnish Owners the  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.

   (c)       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 each Financial Instrument (if any).

   (d)     , Sshould the Vessel become 
a Ttotal Lloss under the insurances required under sub-clause 13(a), all insurance payments
             for such loss shall be paid to the Owners (or if applicable, its financiers) in accordance with the agreed loss payable clauses.  
The Charterers undertake to notify the Owners and the mortgagee(s), if
, of any occurrences in consequence of which the Vessel is likely to become a Ttotal Lloss 
    
   (f)       For the purpose of insurance coverage against hull and machinery and war risks under the provisions of sub-
             clause 13(a), the value of the Vessel is the sum indicated in 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
     
             
            
            
            
           
    
240             
    
     
             
           
     
      
            
            
     
             
.

    
     
           

      
     
      
   15.      Redelivery See Clause 41

             

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
            
             
            
.

            
   16.      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(except for Permitted Security Interests). 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 .”

  17.     Indemnity (See Clauses 42 and 52)

     
            
             
             
            
     
           
   18.     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, 
   19.     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.

  20.     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.

  21.      General Average

             The Owners shall not contribute to General Average.

   22.     Assignment, Sub-Charter and Sale (See Clause 59)

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
     
             
    
.

23.          Contracts of Carriage

  (a)*   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-Visby Rules. The documents shall also contain the New Jason Clause and
             the Both-to-Blame Collision Clause.

 
           
             *Delete as applicable.

   24.      Corporate  Guarantee

            The Charterers undertake to furnish, on or about the date of this Charter  corporate guarantees from the Guarantors 
as guarantee and the other Security Documents at Delivery for full performance of their obligations under this
             Charter.
 
  25.      Requisition/Acquisition

   (a)     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 if all hire has been paid by the Charterers hereunder then
            in the event of “Requisition for Hire” any Requisition Hire or compensation is received or receivable by the Owners,
              the same 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.

    
            
.

   26.     War

  (a)      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.

   (b)     Without first obtaining the written consent of the Owners and complying with the terms of Clause [39 and such other requirements (including but not limited to payment of extra insurance premiums) as may be prescribed by the insurers, the Vessel   shall not continue to or go through any

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
             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.

      I
           
           
           

(e)      The Charterers shall have the liberty:

             (i) 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;

             (ii) 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;

             (iii) 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 (

            
            
           
            
            
 Hire shall continue to be paid in accordance with Clause 11 and except as aforesaid all
414             other provisions of this Charter shall apply until redelivery.

     
            
            
.

28.     Termination (See Clauses 41 and 45)

    
           
            
           

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
  
   
   
.

   
.

29.    Repossession

            Subject to Clause 41, In the event of the termination of this Charter in accordance with the applicable provisions of Clause 45, 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 and the Charterers shall procure that the master and crew follow the orders and directions of 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.

    30.   Dispute Resolution

   (a)* This Charter and any non-contractual obligations arising out of or in connection with it 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.

            The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its

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
             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$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. The language of the arbitration shall be English.

  
           
          
of the Society of Maritime Arbitrators, Inc. current at the time when the arbitration proceedings are commenced.

 
          
    
           
           
           
          
           
.

.

            
           
   

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
   31.    Notices (See Clause 44)

    
   

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PART III
     
    
                
   
   
                
   
            
             
            
              
             
             
              
           

    
   
             
4              
             
             
             
.

   
             
             
    
            
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
;

    
     
    
.

    
,
.

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
               
               
.

.

               
               
            
delivered and taken over as she is at the time of delivery, after which the Sellers shall have no responsibility for
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
          
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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

ADDITIONAL CLAUSES TO BARECON 2001

CLAUSE 32
– CHARTER PERIOD
 
32.1
For the avoidance of doubt, 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).
 
32.2
The Charter Period shall, subject to the terms of this Charter, continue for a period of sixty (60) months from the Commencement Date.
 
CLAUSE 33
– CANCELLATION
 
If the MOA expires, is cancelled, terminated, rescinded or suspended or otherwise ceases to remain in full force and effect for any reason, then this Charter shall immediately terminate and be cancelled (with the exception of Clause 52(Indemnities) and other provisions hereof expressed to survive such termination or cancellation) without the need for either of the Owners or the Charterers to take any action whatsoever, save that in case the Vessel is not delivered under the MOA for a reason solely related to a default of the Owners under the terms of the Leasing Documents, then the Owners shall refund the Handling Fee to the Charterers within a reasonable time or if same is not yet paid, the Charterers shall not be obliged to pay such fee.
 
CLAUSE 34
– DELIVERY 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.
 
34.2
The obligation of the Owners to charter the Vessel to the Charterers hereunder is subject to and conditional upon:
 
(a)
the delivery of the Vessel to the Owners as buyers under the MOA by the Charterers as sellers under the MOA and, for the purposes of this Charter, the Vessel shall be deemed delivered to the Charterers simultaneously with delivery of the Vessel to the Owners pursuant to the MOA and at Delivery the Charterers shall, subject to Clause 9 (Inventories, oil and stores), keep all bunkers, lubrication oil, unbroached provisions, paints, ropes and other consumable stores in the Vessel which were delivered under the MOA;
 
(b)
no Potential Termination Event or Termination Event having occurred which is continuing from the date of this Charter to the last day of the Charter Period;
 
(c)
the representations and warranties contained in Clause 47(Representations and warranties) being true and correct on the date hereof and on the Commencement Date;
 
(d)
Delivery occurring on or before the Cancelling Date;
 
(e)
the Owners (by themselves or by their legal counsels) having received from the Charterers:
 

 (i)
on or before the date falling two (2) Business Days (or such other period as the Owners may agree in their sole discretion or as otherwise specified in Part A of Schedule 2) prior to the Prepositioning Date, the documents or evidence set out in Part A of Schedule 2 in form and substance satisfactory to them;
 
 
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AVICL Seanergy - Additional Clauses to Barecon 2001 (m.v. “Iconship”)

(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, the documents or evidence set out in Part B of Schedule 2 in form and substance satisfactory to them; and
 

 (iii)
after Delivery, the documents and evidence set out in Part C of Schedule 2 in form and substance satisfactory to them within the time periods set out thereunder,
 
and if any of the documents listed in sub-clauses (i) and (ii) above are not in the English language then they shall be accompanied by an English translation.
 
34.3
The conditions precedent and conditions subsequent specified in Clause 34.2(e) are inserted for the sole benefit of the Owners and may be waived or deferred in whole or in part by the Owners. Upon the requirements of Clause 34.2 being fulfilled or waived to the satisfaction of the Owners, the Owners shall give notice thereof in writing to the Charterers.
 
34.4
On delivery to and acceptance by the Buyers of the Vessel under the MOA from the Sellers and subject to the provisions of this Clause (Delivery of Vessel), 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 full use of the Vessel on and subject to the terms and conditions of this Charter.
 
34.5
On Delivery, as evidence of the commencement of the Charter Period, the Charterers shall sign and deliver to the Owners, the Acceptance Certificate. Without prejudice to this Clause (Delivery of Vessel), 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.
 
34.6
Without prejudice to and notwithstanding the provisions of this Clause (Delivery of Vessel), 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 (as buyers) under the MOA from the Sellers, 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.
 
34.7
Subject to Clause 9 (Inventories, oil and stores), the Owners shall not be obliged to deliver the Vessel to the Charterers with any bunkers and unused lubricating oils and greases in storage tanks and unopened drums of the Vessel except for such items which are already on the Vessel on the delivery of the Vessel from the Sellers to the Buyers under the MOA.
 
CLAUSE 35
– QUIET ENJOYMENT
 
35.1
Provided that the Charterers do not breach any terms of this Charter or any other Pertinent Document, the Owners hereby irrevocably and unconditionally agree not to disturb or interfere with the Charterers' lawful use, possession and quiet enjoyment of the Vessel during the Charter Period in any way whatsoever. The Owners shall procure that the Owners' Financier (if any) enter into a quiet enjoyment agreement with the Charterers on such terms (including but not limited to a purchase option in respect of the Vessel given in favour of the Charterers) as may be agreed between the Owners, the Owners' Financier and the Charterers.
 
 
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AVICL Seanergy - Additional Clauses to Barecon 2001 (m.v. “Iconship”)
CLAUSE 36
– 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 Advance Charterhire and Charterhire in respect of the charter of the Vessel.
 
36.2
On the Commencement Date, the Charterers shall pay to the Owners the Advance Charterhire, payment of which shall be deemed to have been made by the Charterers to the Owners by the Charterers setting off their obligation to pay the Advance Charterhire against the Buyers' obligation to pay a corresponding equivalent amount of part of the Purchase Price under clause 18(b) of the MOA.
 
36.3
Following Delivery, the Charterers shall pay quarterly instalments of Charterhire in advance on each payment date ("Payment Date") as follows:
 

 (a)
in 20 quarterly instalments, the first payable on the Commencement Date and each subsequent instalment to be paid at 3-monthly intervals thereafter, with the amount of each instalment being:
 

 (i)
in respect of each of the 1st to 4th quarterly instalments, US$750,000; and
 

 (ii)
in respect of each of the 5th to 20th quarterly instalments, in an amount equal to 1/16 of the difference between (A) the Initial Charterhire Principal Balance without Balloon and (B) the aggregate amount of the 1st to 4th quarterly instalments due and payable under sub-paragraph (i) above;
 

 (b)
on the Charter Expiry Date, the Charterhire Balloon Instalment; and
 

 (c)
on the Commencement Date and on the first day of every subsequent Term thereafter, the Variable Charterhire.
 
36.4
The Vessel shall not at any time be deemed off-hire and the Charterers' obligation to pay  Charterhire and other amounts payable under this Charter shall be paid in Dollars and shall be absolutely and unconditionally payable 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;
 
(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 modification (including but not limited to the installation of scrubbers) being performed on the Vessel or any part thereof;
 
(e)
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;
 
(f)
the Total Loss or any damage to or forfeiture or court marshall's or other sale of the Vessel;
 
 
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(g)
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;
 
(h)
any insolvency, bankruptcy, reorganization, arrangement, readjustment, dissolution, liquidation or similar proceedings by or against the Charterers;
 
(i)
any invalidity, unenforceability, lack of due authorization or other defects, or any failure or delay in performing or employing with any of the terms and provisions of this Charter or any of the Pertinent Documents by any party to this Charter or any other person;
 
(j)
any enforcement or attempted enforcement by the Owners of their rights under this Charter or any of the Pertinent Documents executed or to be executed pursuant to this Charter;
 
(k)
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
 
(l)
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.
 
36.5
All payments of Charterhire and any other moneys payable hereunder shall be made in Dollars.
 
36.6
Time of payment of Charterhire and other payments by the Charterers shall be of the essence of this Charter and shall be received by the Owners in same day available funds and not later than 5.00 pm (Shanghai time) on the due date of such payment.
 
36.7
All Charterhire and any moneys payable hereunder shall be payable by the Charterers to the Owners to such account as the Owners may notify the Charterers in writing.
 
36.8
Payment of Charterhire shall be at the Charterers' risk until receipt by the Owners.
 
36.9
All stamp duty, value added 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:
 
 
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(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. Should such value added tax obligation become established or payable, the Owners shall notify the Charterers immediately in this respect.
 
36.10
If the Charterers fail to make any payment due under this Charter on the due date, they shall pay interest on such late payment at the default rate of two per cent. (2%) per annum above the applicable Interest Rate and accruing from the date on which such payment became due until the date of payment thereof.
 
36.11
All Variable Charterhire, 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 360 day year (or any other period agreed in writing between the Owners and the Charterers).
 
36.12
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.
 
36.13
The Owners shall notify the Charterers of the Interest Rate in respect of a Term as soon as reasonably practicable after such Interest Rate is determined by the Owners on each Quotation Day.
 
CLAUSE 37
– CHANGES TO THE CALCULATION OF INTEREST
 
37.1
Unavailability of Term SOFR
 
(a)
Interpolated Term SOFR:  If no Term SOFR is available for the relevant Term, the applicable Reference Rate shall be the Interpolated Term SOFR for a period equal in length to the relevant Term.
 
(b)
Historic Term SOFR: If no Term SOFR is available for the relevant Term and it is not possible to calculate the Interpolated Term SOFR, the applicable Reference Rate shall be the Historic Term SOFR for the relevant Term.
 
(c)
Interpolated Historic Term SOFR: If paragraph (b) above applies but no Historic Term SOFR is available for the relevant Term, the applicable Reference Rate shall be the Interpolated Historic Term SOFR for a period equal in length to the relevant Term.
 
(d)
Cost of funds:  If paragraph (c) above applies but it is not possible to calculate the Interpolated Historic Term SOFR, there shall be no Reference Rate for the relevant Term and Clause 37.3 (Cost of funds) shall apply to the Charterhire Principal Balance for that Term.
 
37.2
Market disruption.
 
If, in relation to any Term, the Owners determine (which determination shall be conclusive and binding) that the Reference Rate does not reflect the cost of funds of the Owners, the Owners shall notify the Charterers accordingly and Clause 37.3 (Cost of funds) shall apply for such Term.
 
37.3
Cost of funds.
 
 
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(a)
If this Clause 37.3 (Cost of funds) applies to the Charterhire Principal Balance for a Term, the Interest Rate shall be the rate per annum which is the sum of:
 

 (A)
the Margin; and
 

 (B)
the cost certified by the Owners (expressed as an annual rate of interest) of funding the Charterhire Principal Balance during the relevant Term (as reasonably determined by the Owners).
 

 (b)
If this Clause 37.3 (Cost of funds) applies and the Charterers so require, the Owners and the Charterers 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.
 

 (c)
Subject to Clause 37.4 (Changes to reference rates) below, any substitute or alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of the Owners and the Charterers, be binding on all Parties.
 

 (d)
If any rate notified by the Owners under sub-paragraph (B) of paragraph (a) above is less than zero, the relevant rate shall be deemed to be zero.
 
37.4
Changes to reference rates
 
If a Published Rate Replacement Event has occurred in relation to any Published Rate, the Owners are entitled to make any amendment or waiver to the terms of the Leasing Documents (at the Charterers' costs) which relates to:
 

 (a)
providing for the use of a Replacement Reference Rate 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),

 
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may be made with the consent of the Owners and the Charterers.

37.5
For the purposes of Clause 37.4 (Changes to reference rates):
 
"Published Rate" means Term SOFR for three (3) months.

"Published Rate Contingency Period" means ten (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 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:


(i)
the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Owners) 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 Owners, that Published Rate is otherwise no longer appropriate for the purposes of calculating interest under this Charter.

 
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"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 benchmark 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 Owners, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor or alternative to that Published Rate; or


(c)
in the opinion of the Owners, an appropriate successor or alternative to a Published Rate.

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 of any Security Interest thereon other than Permitted Security Interests.
 
38.2
The Charterers shall promptly notify in writing any party (as the Owners may reasonably request), including any Approved Sub-charterer, that the Vessel is the property of the Owners and the Charterers shall provide the Owners with a copy of such written notification and satisfactory evidence that such party has received 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 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 permitted sub-lessee of the Vessel, including any Approved Sub-charterer, 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 and take all reasonable steps to prevent an arrest (threatened or otherwise) of the Vessel.
 
 
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Clause 39
– INSURANCE
 
39.1
The Charterers shall at their expense procure that such insurances are effected at all times during the Charter Period in form and substance satisfactory to the Owners and the Owners' Financier (if any):
 
(a)
in Dollars;
 
(b)
in the case of hull & machinery (including excess risk), fire and usual marine risks and war risks, on an agreed value basis of at least the higher of (i) one hundred and twenty per cent (120%) of the Charterhire Principal Balance at the relevant time and (ii) the applicable Market Value of the Vessel at the relevant time;
 
(c)
in the case of oil pollution liability risks for the Vessel, for an aggregate amount equal to the highest level of cover from time to time available under protection and indemnity club entry and in the international marine insurance market and for an amount of not less than US$1,000,000,000;
 
(d)
in relation to protection and indemnity risks, in respect of the full tonnage of the Vessel and with a member of the International Group of P&I Clubs or such other independent and reputable protection and indemnity club member (in each case, which is acceptable to the Owners and the Owners' Financier (if any));
 
(e)
on customary terms acceptable to the Owners and the Owners' Financier (if any); and
 
(f)
with first class international insurers and/or underwriters notified to the Owners (or in the case of war risks and protection and indemnity risks, with approved war risks and protection and indemnity risks associations) with a minimum of Standard & Poor's rating of A or above, Moody's rating of A or above or AM Best rating of A- or above, unless otherwise acceptable to the Owners;
 
39.2
In addition to the terms set out in Clause 13(a), the Charterers shall procure that the obligatory insurances shall:
 
(a)
subject always to paragraph (b), name the Owners, the Approved Managers 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;
 

 (1)
to any provable out-of-pocket expenses that they have 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 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' Financier if any (in such form as they may reasonably require) that any deductible shall be apportioned between the Charterers and every other named assured or co-assured in proportion to the gross claims made or paid by each of them and that they shall do all things necessary and provide all documents, evidence and information to enable the Owners and the Owners' Financier (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;
 
 
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(b)
whenever the Owners or the Owners' Financier (if any) requires:
 

 (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 financiers, 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; and
 

 (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;
 

 (iii)
name the Owners' Financier (as applicable) and the Owners (as applicable) as respectively the first ranking loss payee and the second ranking loss payee (and in the absence of any financiers, name the Owners as first ranking loss payee) in accordance with the terms of the relevant loss payable clauses approved by the Owners' Financier 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' Financier (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' Financier (as applicable) shall be made without set-off, counterclaim or deductions or condition whatsoever;
 
(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' Financier (if any);
 
(e)
provide that the Owners and/or the Owners' Financier (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' Financier (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' Financier (if any) for thirty (30) days after receipt by the Owners and/or the Owners' Financier (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 lesser period agreed by the parties), notify in writing the Owners (copied to the Owners' Financier (if any)) of the terms and conditions of all Insurances;
 
(b)
at least ten (10) days (or such other lesser period agreed by the Owners) before the expiry of any obligatory 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 that obligatory insurance and of the proposed terms of renewal;
 
(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 insurance 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
 
 
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(e)
as soon as practicable after the expiry of any obligatory insurance, 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(c) 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' Financier (if any).
 
39.4
The Charterers shall ensure that all insurance companies and/or underwriters, and/or (if any) insurance brokers provide the Owners with copies of all policies, cover notes and certificates of entry relating to the obligatory insurances which they are to effect or renew and of a letter or letters or undertaking in a form required by the Owners and/or the Owners' Financier 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;
 
(b)
they will hold the benefit of such policies and such insurances, to the order of the Owners and/or the Owners' Financier (if any) and/or such other party in accordance with the said loss payable clause;
 
(c)
they will advise the Owners and the Owners' Financier (if any) promptly of any material change to the terms of the obligatory insurances of which they are aware;
 
(d)
following a written application from the Owners and/or the Owners' Financier (if any) not later than one (1) month before the expiry of the obligatory insurances they will notify the Owners and the Owners' Financier (if any) not less than twelve (12) 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' Financier (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' Financier (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 and/or the Owners' Financier (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' Financier (if any) with:
 
(a)
a copy of the certificate of entry for the Vessel as soon as such certificate of entry is issued;
 
(b)
a letter or letters of undertaking in such form as may be required by the Owners and the Owners' Financier (if any) or in such association's standard form; and
 
(c)
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 the Vessel.
 
 
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39.6
The Charterers shall ensure that all policies relating to obligatory insurances are deposited with the insurance brokers 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 and produce all relevant receipts when so required by the Owners.
 
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 39 (Insurance)) 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 associations);
 
(b)
the Charterers shall not make or permit any changes relating to the classification or classification society except with the prior written approval of the Owners (not to be unreasonably withheld or delayed in the case of a change of classification society to another member of the International Association of Classification Societies), provided that the Owners shall be entitled to withhold their consent if such change in classification or classification society adversely affects the insurance cover required under Clause 39 (Insurance).
 
(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 the 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 and/or the Owners' Financier (if any), such consent not be unreasonably withheld or delayed, and for the purposes of this Clause 39.10, "material" alterations shall include, without limitation, any change to the identity of the beneficiaries under such insurances or scope of cover, reduction to the insured amount (if such reduction results in the Charterers failing to comply with the requirements of Clause 39 (Insurance) below), limitation on the scope of the cover (if such limitation in scope results in the Charterers failing to comply with the requirements of Clause 39 (Insurance) below) and any other amendment which would cause a breach under the terms of this Charter or any other Leasing Document.
 
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.
 
 
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39.12
The Charterers shall provide the Owners upon written request, copies of:
 
(a)
all material communications between the Charterers and:
 

 (i)
the insurance brokers; and
 

 (ii)
the approved protection and indemnity and/or war risks associations; and
 

 (iii)
the first class international insurers and/or underwriters, which relate directly or indirectly to:
 

 (A)
the Charterers' obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
 

 (B)
any credit arrangements made between the Charterers and any of the persons referred to in paragraphs (i) or (ii) relating wholly or partly to the effecting or maintenance of the obligatory insurances; and
 
(b)
any material communication with all parties involved in case of a claim under any of the Vessel's insurances.
 
39.13
The Charterers shall promptly provide the Owners (or any persons which they may designate) with:
 
(a)
any information which the Owners or the Owners' Financier (or any such designated person) request for the purpose of:
 

 (i)
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, in accordance with Clause 39.17; and/or
 

 (ii)
effecting, maintaining or renewing any such insurances as are referred to in Clause 13(a) or dealing with or considering any matters relating to any such insurances; and
 
(b)
after the occurrence of a Termination Event which is continuing, copies of all material communications between all parties in case of a claim under any of the Vessel's insurances.
 
39.14
If one or more of the obligatory insurances are not effected and maintained with first class international insurers or are effected with an insurance or captive subsidiary of the Owners or the Charterers, then the Charterers shall procure, at their own expense, that the relevant insurers maintain in full force and effect facultative reinsurances with reinsurers and through brokers, in each case, of recognised standing and acceptable in all respects to the Owners. Any reinsurance policy shall include, if and when permitted by law, a cut-through clause in a form acceptable to the Owners.  The Charterers shall procure that underwriters of the primary insurances assign each reinsurance to the relevant financiers in full, if required.
 
39.15
The Charterers shall upon demand fully indemnify the Owners in respect of all premiums and other documented expenses which are reasonably incurred by (i) the Owners in connection with or with a view to effecting, maintaining or renewing a lessor's/innocent owner's interest insurance and a lessor's/innocent owner's additional perils (pollution) insurance (which shall each cover at least 120% of the then Charterhire Principal Balance)  that is taken out in respect of the Vessel and/or (ii) the Owners' Financier (if any) in connection with or with a view to effecting, maintaining or renewing a mortgagee's interest insurance and a mortgagee's additional perils (pollution) insurance that is taken out in respect of the Vessel (which shall be on such terms as requested by the Owners' Financier from time to time).
 
 
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39.16
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, reasonable wear and tear to the Vessel only excepted.
 
39.17
The Charterers shall:
 
(a)
If so requested by the Owners, but at the expense of the Charterers, furnish the Owners once a year (or, after a Termination Event has occurred and is continuing, as many times per year as the Owners may require) with a detailed report signed by an independent firm of marine insurance brokers appointed by the Owners dealing with the Insurances and stating the opinion of such firm as to the adequacy of the Insurances;
 
(b)
reimburse the Owners any documented expenses customarily incurred by the Owners in obtaining the reports described in Clause 39.17(a); and
 
(c)
procure that there is delivered to the insurance brokers described in Clause 39.17(a) such information in relation to the Insurances as such brokers may reasonably require.
 
39.18
The Charterers shall keep the Vessel insured at their expense against such other risks which the Owners or the Owners' Financier consider reasonable for a prudent shipowner or operator to insure against at the relevant time (as notified by the Owners, taking into account recommendations from the Owners' insurance advisors, shipping industry associations or regulatory institutions) and which are, at that time, generally insured against by owners or operators of vessels similar to the Vessel (including but not limited to kidnap and ransom insurances, which the Charterers acknowledge shall fall within the scope of this Clause).
 
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 which has been purchased by the Buyers from the Sellers pursuant to the MOA 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 or the other Leasing Documents.
 
CLAUSE 41
– TERMINATION, REDELIVERY AND TOTAL LOSS
 
41.1
If the Termination Purchase Price becomes payable in accordance with Clause 45.2  or Mandatory Sale Price becomes payable in accordance with Clause 46 (Mandatory Sale), it is agreed by the Parties that (i) payment of the Termination Purchase Price is deemed to be proportionate as to amount, having regard to the legitimate interests of the Owners, in protecting against the Owners' risk of the Charterers failing to perform its obligations under this Charter or (ii) payment of the Mandatory Sale Price becomes is deemed to be proportionate as to amount, having regard to the legitimate interests of the Owners, in protecting against the Owners' risk of being required to sell the Vessel to the Charterers upon the occurrence of any of the events described under Clause 46 (Mandatory Sale).
 
 
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41.2
Upon the Termination Notice Date or Mandatory Sale Date, the Charterers' right to possess and operate the Vessel shall immediately cease (without in any way affecting the Charterers' obligation to pay the Termination Purchase Price or Mandatory Sale Price, as the case may be).
 
41.3
Upon irrevocable receipt by the Owners in full of the (i) Termination Purchase Price pursuant to Clause 45.2  or (ii) the Mandatory Sale Price pursuant to Clause 46 (Mandatory Sale):
 
(a)
this Charter shall terminate (provided that any provision hereof expressed to survive such termination shall do so in accordance with its terms); and
 
(b)
the Owners shall 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 created by the Owners, and in this regard shall execute a bill of sale and a protocol of delivery and acceptance evidencing the same and such sale shall be completed in accordance with Clause 51(Sale of the Vessel to the Charterers).
 
41.4
If the Charterers fail to make any payment of the Termination Purchase Price or Mandatory Sale Price on the due date thereof:
 
(a)
interest on such outstanding amount shall accrue in accordance with Clause 36.10; and

(b)
the Charterers shall:


(i)
upon the Owners' prior written request (at the Owners' sole discretion), be obliged to (and at the Charterers' own cost) redeliver the Vessel to the Owners at such ready and nearest safe port as the Owners may require and taking into account the Vessel's then employment schedule; further and for the avoidance of doubt, the Owners shall be entitled (at the 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.  The Earnings in respect of the Vessel during such period less its operational expenses (including without limitation any maintenance costs of, and costs for bunkering, lubricants or oils for, the Vessel) shall be applied against the Termination Purchase Price or Mandatory Sale Price (as the case may be) and any other amounts payable under the Leasing Documents in any manner the Owners deem fit and any excess of such amount after such application shall be paid to the Charterers.  Upon redelivery of the Vessel this Charter shall terminate save for the provisions set out in Clause 30 (Dispute resolution), Clause 36.10, this Clause 41 (Termination, Redelivery and Total Loss) and Clause 52(Indemnities) and any other provisions expressed or implied to survive termination; and/or
 

 (ii)
the Owners shall at any point following such redelivery be entitled (at the Owners' sole discretion) to sell the Vessel on terms they deem fit (an "Owners' Sale") in which case the sale proceeds (after deducting all fees, taxes, disbursements, any maintenance costs of, and costs for bunkering or oils for, the Vessel and any other documented costs and expenses incurred by the Owners in connection with such sale) (the "Net Sales Proceeds") derived from such sale shall be applied against the Termination Purchase Price or Mandatory Sale Price (as the case may be) and any other amounts payable under Clause 52(Indemnities) in any manner the Owners deem fit and any excess of such amount after such application shall be paid to the Charterers.  If the Net Sales Proceeds are not in an amount sufficient to discharge in full the Termination Purchase Price or Mandatory Sale Price (as the case may be) and any other amounts payable under Clause 52(Indemnities), the Charterers shall continue to be liable for the shortfall and interest shall continue to accrue on such shortfall in accordance with Clause 36.10. Upon completion of such Owners' Sale this Charter shall terminate save for Clause 36.10, this Clause 41.4(b)(ii), Clause 52(Indemnities) and any other provisions expressed or implied to survive termination; or
 
 
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(c)
the Charterers shall, upon the Owners' prior written request (at the Owners' sole discretion) be obliged to (and at the Charterers' own cost) redeliver the Vessel to the Owners at such ready and nearest safe port as the Owners may require and taking into account the Vessel's then employment schedule; and as from such redelivery the Owners shall maintain ownership of such Vessel and own, operate or sell or otherwise use it in any manner they deem fit and apply the then current Market Value of the Vessel (the "Termination Value") against the Termination Purchase Price or Mandatory Sale Price (as the case may be) and all other amounts payable to the Owners under this Charter in which case if:


(i)
the amount of the Termination Value is in excess of the aggregate amounts due to the Owners under the Leasing Documents at the relevant time, such excess will be paid to the Charterers; or
 

 (ii)
in case the amount of the Termination Value is not sufficient to discharge in full the aggregate amounts due to the Owners under the Leasing Documents following such application the Charterers shall continue to be liable for the shortfall and interest shall continue to accrue on such shortfall in accordance with Clause 36.10.
 
(d)
Any terms expressly provided to survive post-termination of this Charter shall continue to be in full force and effect at all times thereafter.

41.5
If the Charterers are required to redeliver the Vessel to the Owners pursuant to Clause 41.4, the Charterers shall ensure that the Vessel shall, at the time of redelivery to the Owners (at the Charterers' cost and expense):
 
(a)
be in compliance with its Insurances;
 
(b)
be in an equivalent class as she was as at the Commencement Date without any overdue recommendation or condition, and with valid 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;
 
(c)
have passed her 5-year and if applicable, 10-year special surveys, and subsequent second intermediate surveys and drydock at the Charterers' time and expense without any overdue condition or outstanding issue and to the satisfaction of the Classification Society;
 
(d)
have her survey cycles up to date and trading and class certificate valid for at least the number of months agreed in Box 17;
 
(e)
be redelivered to the Owners together with all spare parts and spare equipment as were on board at the time of Delivery (but only to the extent they have not already been used in the operation of the Vessel), 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;
 
(f)
be free of any cargo and Security Interest (other than Permitted Security Interests);
 
 
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(g)
be free of any charter unless the Owners wish to retain the continuance of any then existing charter;
 
(h)
be free of officers and crew (unless otherwise agreed by the Owners);
 
(i)
have had her underwater parts treated with ample anti-fouling to last for the ensuing period up to the next scheduled dry docking of the Vessel; and
 
(a)
be redelivered to the Owners together with all material information generated during the Charter Period in respect of the use, possession, operation, navigation, utilization of lubricating oil and the physical condition of the Vessel, whether or not such information is contained in the Charterers' equipment, computer or property.
 
41.6
The Owners shall, (unless otherwise agreed) at the time of the redelivery of the Vessel, take over all bunkers, lubricating oil, unbroached provisions, paints, ropes and other consumable stores (excluding spare parts) in the Vessel at no cost to the Owners.
 
41.7
If the Vessel, for any reason, becomes a Total Loss after Delivery, the Charterers shall pay the Termination Purchase Price to the Owners on the earlier of:
 
(a)
the date falling one hundred and eighty (180) days after such Total Loss has occurred; and
 
(b)
the date of receipt by the Owners and/or the Owners' Financier (if any), in accordance with the terms of the relevant loss payable clause, of the proceeds of insurance relating to such Total Loss,
 
provided that it is hereby agreed that any insurance proceeds in respect of the Vessel received by the Owners or the Owners' Financier shall be applied in or towards discharging the Charterers' obligation to pay the Termination Purchase Price  and any interest accrued thereon (and such application shall be deemed satisfaction of the Charterers' obligation to pay the Termination Purchase Price to the extent so satisfied) and in the event that the insurance proceeds received from the insurers exceed the Termination Purchase Price due (and any interest accrued thereon), the excess shall be firstly paid towards satisfying any amounts outstanding and owing by the Charterers and thereafter paid to the Charterers by way of rebate of hire.
 
For the avoidance of doubt, in the event that the Vessel becomes a Total Loss:
 

 (A)
payment of Charterhire and all other sums payable hereunder during such period shall continue to be made by the Charterers in accordance with the terms of this Charter unless and until the Owners receive the Termination Purchase Price whereby this Charter shall terminate (without prejudice to any provision of this Charter expressed to survive termination);
 

 (B)
should insurance proceeds be received by the Owners or the Owners' Financiers in their capacity as assignee (pursuant to assignment of such insurances from the Owners to the Owners' Financiers) from the insurers, the Charterers' obligations to pay the Termination Purchase Price shall be accordingly reduced by such insurance proceeds but in the event that such insurance proceeds be less than the amount of the Termination Purchase Price together with any interest accrued thereon, the Charterers remain obliged to pay to the Owners the balance so that the full amount of the Termination Purchase Price due together with any interest accrued thereon are received by the Owners;
 

  (C)
the obligation of the Charterers to pay the Termination Purchase Price 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.
 
 
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41.8
The Owners shall have no obligation to supply to the Charterers with a replacement vessel following the occurrence of a Total Loss.
 
CLAUSE 42
– FEES AND EXPENSES
 
42.1
In consideration of the Owners entering into this Charter, the Charterers shall pay to the Owners or its nominee a non-refundable handling fee (the "Handling Fee") at such time and in such amount to be set out in a Handling Fee Letter.
 
42.2
Without prejudice to any other rights of the Owners hereunder, the Charterers shall promptly pay to the Owners on written demand on a full indemnity basis the amount of all documented costs, charges and expenses incurred by the Owners in collecting any Charterhire or other payments not paid on the due date under this Charter and in remedying any other failure of the Charterers to observe the terms and conditions of this Charter.
 
42.3
All documented costs and expenses (including, but not limited to, negotiation costs, inspections, valuations, legal fees, insurance reports, registration costs in the Flag State and any other expenses) customarily incurred by the Owners in connection with the negotiation and entry into all documentation in relation to this Charter and the Leasing Documents, shall be for the account of the Charterers (for the avoidance of doubt, regardless of whether the Commencement Date occurs), provided that the Charterers' liability for such costs and expenses shall be capped at US$100,000 in aggregate in connection with this Charter and the Other Charters (unless otherwise agreed in writing by the Owners and the Charterers) .
 
42.4
All documented costs and expenses customarily incurred by the Owners in relation to the acquisition and registration of the Vessel and this Charter by the Owners 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) payable by the Owners to such Flag State to maintain and/or renew such registration shall be for the account of the Charterers (for the avoidance of doubt, regardless of whether the Commencement Date occurs). 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.
 
42.5
If the Charterers request for a change of Flag State, the Charterers shall pay or reimburse the Owners (as the case may be) in respect of all documented costs, expenses and/or taxes which are payable to effect such change.
 
CLAUSE 43
- NO WAIVER OF RIGHTS
 
43.1
No neglect, delay or indulgence on the part of either Party in enforcing the terms and conditions of this Charter 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.
 
43.2
No right or remedy conferred upon either Party by this Charter 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 44
- NOTICES
 
44.1
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 addresses:
 
 
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(A)
to the Owners:
c/o AVIC International Leasing Co., Ltd
16/F, Hangrong Mansion, 1481 Guozhan Road, Pudong,
Shanghai, China, 200126
Attention: Ryan Zhang
Ship Leasing Dept.
Tel: +86-21-22262623
Email: zhangqiang@chinaleasing.net
 
(B)
to the Charterers:
c/o Seanergy Maritime Holdings Corp.
154 Vouliagmenis Avenue, 16674, Glyfada, Greece
Attention: Mr. Stavros Gyftakis
Email: legal@seanergy.gr, finance@seanergy.gr
Tel: +30 213 018 507
 
or, if a party hereto changes its address or e-mail address, to such other address or e-mail address as that Party may notify to the other.
 
CLAUSE 45
– TERMINATION EVENTS
 
4.1
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 make any payment within five (5) Business Days of its due date or on demand in accordance with the terms of any Leasing Document to which it is a party, unless such failure to pay is caused by a technical error and payment is made within five (5) Business Days of its due date;
 
(b)
the Charterers breach or omit to observe or perform any of their undertakings in Clause 48.1(j), (k), (l), (o), (p), (q), (r), (s), (t) or (u) or the Guarantor breaches or omits to observe or perform any of its undertakings contained in the Guarantee, provided that no Termination Event under this Clause 45.1(b) will be triggered if the breach or omission to observe or perform falls within the situations set out under Clause 46 (Mandatory Sale);
 
(c)
the Charterers fail to obtain and/or maintain the Insurances required under Clause 39 (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 Relevant Person commits any other breach of, or omits to observe or perform, any of their other obligations or undertakings in this Charter or any other Leasing Document (other than a breach referred to in paragraphs (a), (b) or (c) above) unless such breach or omission is in the reasonable opinion of the Owners, remediable and such Relevant Person remedies such breach or omission to the satisfaction of the Owners within ten (10) Business Days of the earlier of (i) notice thereof from the Owners and (ii) upon such Relevant Person upon becoming aware of the same;
 
(e)
any representation or warranty made by any Obligor in or pursuant to any Leasing Document to which it is a party or in any notice or other document, certificate or statement delivered by it pursuant thereto or in connection therewith is or proves to be untrue or misleading in a material way when it is made;
 
(f)
any of the following occurs in relation to any Financial Indebtedness of an Obligor (other than an Approved Manager which is not an Affiliate of the Obligors):
 

 (i)
any Financial Indebtedness of such Obligor is not paid when due or, if so payable, on demand after any applicable grace period has expired; or
 
 
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(ii)
any Financial Indebtedness of such Obligor becomes due and payable, or declared to be due and payable, prior to its stated maturity date as a consequence of any event of default and not as a consequence of the exercise of any voluntary right of prepayment, following the expiry of any applicable grace period; or
 

 (iii)
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 Obligor 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 after any applicable grace period has expired,
 
and no Termination Event will occur under this paragraph if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within sub-paragraphs (i) to (iii) above is (I) less than US$5,000,000 (or its equivalent in any other currency) in respect of the Guarantor or (II) less than US$500,000 (or its equivalent in any other currency) in respect of the Charterers.
 
(g)
any of the following occurs in relation to an Obligor:
 

 (i)
it becomes unable to pay their debts as they fall due; or
 

 (ii)
in the case of any Obligor other than the Guarantor, any of its assets (with a value amounting in aggregate to US$500,000 are subject to any form of execution, attachment, arrest, sequestration or distress (or any analogous process in any jurisdiction) which is not discharged within forty five (45) days;
 

 (iii)
in the case of the Guarantor, any of its assets are subject to any form of execution, attachment, arrest, sequestration or distress (or any analogous process in any jurisdiction) which is not discharged within forty five (45) days and which results in or is reasonably likely to result in a Material Adverse Effect;
 

 (iv)
any administrative or other receiver is appointed over all or a substantial part of the assets of such Obligor unless as part of a solvent reorganisation which has been approved by the Owners; or
 

 (v)
it makes any formal declaration of bankruptcy or any formal statement to the effect that they are insolvent or likely to become insolvent, or a winding up or administration order is made in relation to such Obligor, or the shareholders or directors of such Obligor pass a resolution to the effect that they should be wound up, placed in administration or cease to carry on business; or
 

 (vi)
a petition is presented in any Relevant Jurisdiction for the winding up or administration, or the appointment of a provisional liquidator, of an Obligor unless the petition is being contested in good faith and on substantial grounds and is dismissed or withdrawn within thirty (30) days of the presentation of the petition; or
 

 (vii)
an Obligor petitions a court, or presents any proposal for, any form of judicial or non-judicial suspension or deferral of payments, reorganisation of their debt (or certain of their 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; or
 

 (viii)
any meeting of the shareholders or board of directors of an Obligor is summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraph (ii) to (vii) above; or
 
 
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(ix)
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 referred to in paragraphs (ii) to (vii) above inclusive;
 
(h)
an Obligor (other than a third-party Approved Manager) suspends or ceases or threatens to suspend or cease carrying on all or a material part of its business;
 
(i)
any consent, approval, authorisation, license or permit necessary to enable the Charterers to operate or charter the Vessel or to enable any of them to comply with any provision of this Charter or the other Leasing Documents to which it is a party or to ensure that the obligations of the Charterers  are legal, valid, binding or enforceable is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent, approval, authorisation, license or permit is not fulfilled;
 
(j)
any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect;
 
(k)
the Vessel is subject to any form of execution, attachment, arrest, sequestration or distress which is not discharged within sixty (60) days (or such longer period as the Owners may agree);
 
(l)
this Charter or any Security Interest created by a Leasing 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;
 
(m)
an Obligor rescinds or purports to rescind or repudiates or purports to repudiate a Leasing Document;
 
(n)
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
 

 (ii)
contrary to, or inconsistent with, any regulation,
 
for any Obligor to maintain or give effect to any of its obligations under this Charter or any of the other Leasing Documents to which it is a party in the manner it is contemplated under such Pertinent Document or any of the obligations of any Obligor under any Pertinent Document to which it is a party are not or cease to be legal, valid, binding and enforceable;
 
(o)
the Security Interest constituted by any Leasing Document is in any way imperilled or in jeopardy;
 
(p)
the Vessel is not delivered latest by the Cancelling Date; or
 
(q)
any Termination Event (as defined in any Other Charter) occurs under such Other Charter.
 
45.2
Upon the occurrence of a Termination Event which is continuing, the Owners shall be entitled to notify in writing the Charterers of the occurrence of the same, terminating this Charter and demanding payment of the Termination Purchase Price, whereupon the Charterers shall be obliged to pay to the Owners the Termination Purchase Price on the date (the "Termination Notice Date") specified by the Owners in their discretion in the said notice (which shall not occur earlier than 15 Business Days following the date which the Owners provide such notice to the Charterers).
 
 
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45.3
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.
 
45.4
Without limiting the generality of the foregoing or any other rights of the Owners, upon the occurrence of a Termination Event which is continuing, the Owners shall have the sole and exclusive right and power to (i) settle, compromise, compound, adjust or defend any actions, suits or proceedings 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 (iii) change or appoint a new manager for the Vessel to another Approved Manager, and the appointment of the pre-existing Approved Manager may be terminated immediately without any recourse to the Owners in line with the terms of the Approved Management Agreement.
 
CLAUSE 46
– MANDATORY SALE
 
46.1
If any of the following occurs:
 
(a)
it becomes unlawful in any applicable jurisdiction for the Owners to perform any of their obligations as contemplated by any Leasing Document or for the Owners' Financiers (if any) to perform their obligations under the Financial Instruments;
 
(b)
any Sanctions imposed by the law or regulation of the People's Republic of China deviates from those imposed by the United Nations and compliance with such Sanctions is or has become:
 

 (i)
illegal or unlawful; or
 

 (ii)
unduly onerous (including, without limitation, a scenario where Charterers are not able to perform their global operation and trading, directly because of such Sanctions) or wholly impractical,
 
for the Charterers or Guarantor to comply with while maintaining or giving effect to any of their obligations under this Charter or any of the other Leasing Documents to which they are respectively a party to;
 
(c)
the Approved Sub-charterer or any Third Party Approved Manager, or any of their respective directors or officers, is or becomes a Restricted Person, unless (i) such Approved Sub-charterer is replaced under a substitute Approved Sub-charter in accordance with Clause 48.1(o) or Third Party Approved Manager is being replaced under a substitute Approved Management Agreement in accordance with Clause 48.1(v)(ii), as the case may be, and in each case within 20 Business Days from the date of occurrence of the aforesaid event  and (ii) during such cure period as mentioned in sub-paragraph (i) above, in the Owners' opinion, there is no risk that the Owners are in breach of Sanctions by continuing to perform their obligations under any Leasing Document;
 
(d)
the Approved Sub-charterer or any Third Party Approved Manager acts in breach of any laws or regulations relating to the Vessel and its ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code, all Environmental Laws, the laws of the Vessel's registry, all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws, unless (i) such Approved Sub-charterer is replaced under a substitute Approved Sub-charter in accordance with Clause 48.1(o) or Third Party Approved Manager is being replaced under a substitute Approved Management Agreement in accordance with Clause 48.1(v)(ii), as the case may be, and in each case within 20 Business Days from the date of occurrence of the aforesaid event and (ii) during such cure period as mentioned in sub-paragraph (i) above, in the Owners’ opinion there is no risk that the Owners are in breach of Sanctions by continuing to perform their obligations under any Leasing Document; or
 
 
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(e)
any consent, approval, authorisation, license or permit necessary to enable an Approved Sub-charterer to operate or charter the Vessel is not granted, expires without being renewed or is revoked, in each case for a period of more than 30 days, and notwithstanding the above the Approved Sub-charterer continues operating the Vessel,
 
the Charterers shall, in consideration of the Owners transferring all the Owners’ legal and beneficial title in the Vessel to the Charterers, pay the Mandatory Sale Price to the Owners on the date specified by the Owners (being no earlier than the last day of any applicable grace period permitted by law) in a written notice (“Mandatory Sale Notice") delivered by the Owners to the Charterers (such payment date being subject to the consultation period under Clause 46.2 below and in any case not earlier than fifteen (15) Business Days following the date which the Owners provide the Mandatory Sale Notice to the Charterers), and this Charter shall terminate in accordance with the procedures set out in Clause 41 (Termination, Redelivery and Total Loss).
 
46.2
If the Mandatory Sale Price becomes payable under this Clause 46 (Mandatory Sale), the Owners shall in good faith consult with the Charterers for the Owners or any Obligors to take all reasonable steps to mitigate any such circumstances, provided that:
 
(a)
this Clause 46 (Mandatory Sale) does not in any way limit the obligations of any Obligor under any Leasing Documents;
 
(b)
the Owners are not obliged to take any steps or enter into any consultation with the Charterers under this Clause 46 (Mandatory Sale) if, in the opinion of the Owners, to continue performing the Owners’ obligations under the Leasing Documents may be prejudicial to the Owners; and
 
(c)
subject to sub-paragraphs (a) and (b) above and unless otherwise agreed in writing between the Owners and the Charterers, such consultation period shall expire sixty (60) days from the earlier of (i) the date of occurrence of the circumstances resulting in the Mandatory Sale Price becoming payable under this Clause 46 (Mandatory Sale) and (ii) the date of the Mandatory Sale Notice, following which the Charterers shall immediately pay the Mandatory Sale Price to the Owners.
 
CLAUSE 47
REPRESENTATIONS AND WARRANTIES
 
47.1
The Charterers represent and warrant to the Owners as of the date hereof, and on each day henceforth until the last day of the Charter Period (unless otherwise stated expressly to the contrary below), as follows:
 
(a)
as at the date of this Charter, the Charterers are (i) wholly legally owned and controlled by the Shareholder and (ii) wholly beneficially owned and controlled by the Guarantor;
 
(b)
each Obligor is duly incorporated and validly existing under the laws of its jurisdiction of its incorporation;
 
(c)
each Obligor has the corporate capacity, and has taken all corporate actions and obtained all consents, approvals, authorisations, licenses or permits necessary for it:
 

 (i)
to execute each of the Pertinent Documents to which it is a party; and
 

 (ii)
to comply with and perform its obligations under each of the Pertinent Documents to which it is a party;
 
 
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(d)
the entry into and performance by any Obligor by it of, and the transactions contemplated by, each Pertinent Document to which it is a party do not and will not conflict with:
 

 (i)
any law or regulation applicable to it;
 

 (ii)
its constitutional documents; or
 

 (iii)
any agreement or instrument binding upon it or constitute a default or termination event (however described) under any such agreement or instrument.
 
(e)
all the consents, approvals, authorisations, licenses or permits referred to in Clause 47.1(c) remain in force and nothing has occurred which makes any of them liable to revocation;
 
(f)
each of the Pertinent Documents to which an Obligor is a party constitutes such Obligor’s legal, valid and binding obligations enforceable against such party in accordance with its respective terms and any relevant insolvency laws affecting creditors’ rights generally;
 
(g)
no third 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 or any moneys payable hereunder and/or any of the other Leasing Documents;
 
(h)
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 the jurisdiction of incorporation;
 
(i)
no legal or administrative action (i) involving the Charterers involving claim(s) amounting in aggregate to more than US$100,000 or (ii) involving the Guarantor involving a claim which results in or is reasonably likely to result in a Material Adverse Effect, has been commenced or taken;
 
(j)
each Obligor has paid all taxes applicable to, or imposed on or in relation to it, its business or if applicable, the Vessel, except for those being contested in good faith with adequate reserves;
 
(k)
the choice of governing law as stated in each Pertinent Document to which a Relevant Person is party to and the agreement by such party to refer disputes to the relevant courts or tribunals as stated in such Pertinent Document are valid and binding against such Relevant Person;
 
(l)
no Obligor nor any of their assets are entitled to immunity on the grounds of sovereignty or otherwise from any set-off, legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgment, execution or other enforcement);
 
(m)
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 such Obligor save for any obligation which is mandatorily preferred by law and not by virtue of any contract;
 
(n)
each Security Document creates (or once entered into, will create) the Security Interest which it is expressed to create with the ranking and priority it is expressed to have;
 
(o)
no Obligor is a US Tax Obligor;
 
(p)
no Obligor, nor any of their respective directors, officers or, to the best of their knowledge (after due and careful enquiry), employees or agents is a Restricted Person, and the Vessel is not the target of Sanctions;
 
(q)
each Obligor, and their respective directors, officers and, to the best of their knowledge (after due and careful enquiry), employees and agents, is in compliance with all Sanctions laws, and none of them have been or are currently being investigated on compliance with Sanctions, they have not received notice or are aware of any claim, action, suit or proceeding against any of them with respect to Sanctions and they have not taken any action to evade the application of Sanctions;
 
 
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(r)
the Vessel is not employed, operated or managed in any manner which (i) is contrary to any Sanctions and in particular, the Vessel is not used by or to benefit any party which is a Restricted Person or trade to any Restricted Country or otherwise to any area or country where trading the Vessel to such area or country would constitute a breach of any Sanctions or published boycotts imposed by any of the United Nations, the European Union, the United States of America or the United Kingdom; or (ii) would trigger the operation of any sanctions limitation or exclusion clause in any insurance documentation;
 
(s)
each Obligor is not in breach of any laws or regulations relating to the Vessel and its ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code, all Environmental Laws, the laws of the Vessel's registry, all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws and each of the Obligors has instituted and maintained systems, controls, policies and procedures designed to:
 

 (i)
prevent and detect incidences of bribery and corruption, money laundering and terrorism financing; and
 

 (ii)
promote and achieve compliance with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws;
 
(t)
none of the Obligors is insolvent or in liquidation or administration or subject to any other formal or informal insolvency procedure, and no receiver, administrative receiver, administrator, liquidator, trustee or analogous officer has been appointed in respect of any Obligor or all or material part of their assets;
 
(u)
no Termination Event or Potential Termination Event is continuing or might reasonably be expected to result from the entry into and performance of this Charter or any other Leasing Document;
 
(v)
as at the date of this Charter, the Vessel is commercially and technically managed under an Approved Management Agreement which remains in full force and effect;
 
(w)
as at the date of this Charter, the Charterers have not entered into any other investments, any sale or leaseback agreements, any off-balance sheet transaction or incur any other liability or obligation (including without limitation, any Financial Indebtedness of any obligations under a guarantee) except:
 

 (i)
liabilities and obligations under the Leasing Documents to which they are or, as the case may be, will be a party;
 

 (ii)
liabilities or obligations reasonably incurred in the normal course of its business of trading, operating and chartering, maintaining and repairing the Vessel; or
 

 (iii)
liabilities, obligations and agreements as otherwise already disclosed to the Owners;
 
(x)
any factual information provided by the Charterers (or on their behalf) to the Owners was true and accurate in all material respects as at the date it was provided or as the date at which such information was stated; and
 
(y)
the entry by each Obligor into any Pertinent Document does not in any way cause any breach, and is in all respects permitted, under the terms of any document which it is entered into.
 
 
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CLAUSE 48
– CHARTERERS’ UNDERTAKINGS
 
48.1
The Charterers undertake that, except with the Owners’ prior written consent, the Charterers 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)
there shall  be no change of ownership or control of the Charterers from that described under Clause 47.1(a) following the Commencement Date;
 
(b)
there shall be sent to the Owners:
 

 (i)
as soon as possible, but in no event later than one hundred and eighty (180) days after the end of each financial year of the Charterers, the unaudited annual financial reports of the Charterers;
 

 (ii)
as soon as possible, but in no event later than ninety (90) days after the end of each half-year, the unaudited financial reports of the Charterers in each case certified as to their correctness by a director of the Charterers;
 

 (iii)
as soon as possible, but in no event later than one hundred and eighty (180) days after the end of each financial year of the Guarantor, the audited consolidated annual financial reports of the Guarantor; and
 

 (iv)
as soon as possible, but in no event later than ninety (90) days after the end of each half-year, the unaudited financial reports of the Guarantor certified as to their correctness by an officer of the Guarantor,
 
and each set of financial statements referred to in shall be in English;
 
(c)
following the occurrence of a Termination Event which is continuing, they will provide to the Owners, at the same time as they are despatched, copies of all notices and minutes relating to any of their extraordinary shareholders’ meeting which are despatched to the Charterers’ and the Shareholder’s respective shareholders or creditors or any class of them;
 
(d)
they will provide or will procure that each Obligor provides the Owners with details of any legal or administrative action involving such Obligor or the Vessel as soon as such action is instituted or it becomes apparent to such Obligor that it is likely to be instituted and is likely to have a Material Adverse Effect on the ability of such Obligor to perform their obligations under each Leasing Document to which it is a party;
 
(e)
they will, and will procure that each other Obligor will, obtain and promptly renew or procure the obtainment 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 it is a party (including without limitation to sell, charter and operate the Vessel);
 
(f)
they will not, and will procure that each other Obligor will not, create, assume or permit to exist any Security Interest of any kind upon any Leasing Document to which such Obligor is a party, and if applicable, the Vessel, in each case other than the Permitted Security Interests;
 
(g)
they will at their own cost, and will procure that each other Obligor will:
 

 (i)
do all that such Obligor reasonably can to ensure that any Leasing Document to which such Obligor is a party validly creates the obligations and the Security Interests which such Obligor purports to create; and
 
 
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(ii)
without limiting the generality of paragraph (i), promptly register, file, record or enrol any Pertinent Document to which such Obligor is 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 Pertinent Document to which such Obligor is a party, give any notice or take any other step which, is or has become necessary or desirable for any such Pertinent Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which such Obligor creates;
 
(h)
they will, and will procure that each other Obligor will, notify the Owners as soon as it becomes aware of the occurrence of:
 

 (i)
any incident relating to the Vessel which results, or is anticipated to result, in repairs on the Vessel which exceed US$1,000,000;
 

 (ii)
any material safety incidents taking place on board the Vessel;
 

 (iii)
any Environmental Claim which is made against the Charterers, Approved Sub-charterer or any Approved Manager in connection with the Vessel (provided that such claim(s) exceed US$1,000,000 in aggregate) or any Environmental Incident;
 

 (iv)
any arrest or detention of the Vessel, any exercise or purported exercise of any lien on that Vessel or its Earnings or any requisition of that Vessel for hire; and
 

 (v)
any Potential Termination Event or a Termination Event,
 
and will keep the Owners fully up-to-date with all developments and the Charterers will, if so requested by the Owners, provide any such certificate signed by its director(s), confirming that there exists no Potential Termination Event or Termination Event;
 
(i)
they will, and will procure that each other Obligor will, as soon as practicable after receiving the request, provide the Owners with any additional financial or other information relating:
 

 (i)
to themselves and/or the Vessel (including, but not limited to the condition and location of the Vessel); or
 

 (ii)
to any other matter relevant to, or to any provision of any Leasing Document to which it is a party,
 
which may be reasonably requested by the Owners (or the Owners’ Financier (if any)) at any time;
 
(j)
they will comply, or procure compliance, and will procure that each other Obligor will comply or procure compliance, with all laws or regulations relating to the Vessel and its construction, ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code, all Environmental Laws and the laws of the Vessel’s registry provided that any non-compliance shall not (and shall not be expected to) materially adversely affect the obligations of an Obligor or any Third Party Approved Manager under each Leasing Document to which it is a party or materially adverse effect the normal operations of the Vessel;
 
(k)
subject to Clause 10(d) of this Charter, the Vessel shall be registered under the Flag State;
 
(l)
the Vessel shall be classed with the Classification Society upon Delivery and shall be free of any overdue conditions or recommendations;
 
(m)
upon request, they will provide or they will procure to be provided to the Owners the report(s) of the survey(s) conducted pursuant to Clause 7 (Surveys on Redelivery) of this Charter in form and substance satisfactory to the Owners;
 
 
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(n)
except with the Owners’ prior written consent (not to be unreasonably withheld) or were expressly permitted under the Leasing Documents, the Charterers shall not enter into any form of merger, sub-division, amalgamation or other reorganisation, provided that in the case of any Obligor other than the Charterers, such merger, sub-division, amalgamation or other reorganisation is permitted without restrictions so long as the Guarantor remains the surviving entity of any such process;
 
(o)
the Charterers may freely sub-charter the Vessel provided that:
 

 (i)
except with the Owner’s prior written consent, they shall not permit the sub-chartering of the Vessel (A) on a bareboat basis or (B) on any other basis exceeding thirteen (13) months (including any optional extensions thereto); and
 

 (ii)
as a condition precedent to the delivery of the Vessel (or condition subsequent to be satisfied within 3 Business Days of the delivery) under any such Approved Sub-charter, the Charterers shall assign all their rights and interests under such Approved Sub-charter (provided that if such Approved Sub-Charter is made otherwise than on a bareboat basis, it is capable of exceeding 13 months) on terms acceptable to the Owners and shall use reasonable commercial efforts to procure that the relevant Approved Sub-charterer gives a written acknowledgment of such assignment in form and substance reasonably acceptable to the Owners and provide such documents as the Owners may reasonably require regarding the due execution of such Approved Sub-charter (and such Approved Sub-charterer shall assign its insurance interest in the case where any such Approved Sub-charter is a bareboat charter);
 
(p)
they shall not make or pay any dividend or other distribution (in cash or in kind) in respect of its issued shares following the occurrence of a Termination Event which is continuing or which would result in a Termination Event;
 
(q)
they shall comply and shall procure that each Obligor (including, in each case, procuring or as the case may be, using all reasonable endeavours to procure the respective officers, directors, employees, consultants, agents and/or intermediaries of the relevant entity to do the same) complies with all laws and regulations in respect of Sanctions;
 
(r)
the Vessel shall not be employed, operated or managed in any manner which (i) is contrary to any Sanctions and in particular, the Vessel shall not be used by or to benefit any party which is a target of Sanctions and/or is a Restricted Person or trade to any area or country which is a Restricted Country or otherwise where trading the Vessel to such area or country would constitute or reasonably be expected to constitute a breach of any Sanctions or published boycotts imposed by any of the United Nations, the European Union, the United States of America or the United Kingdom, (ii) would result or reasonably be expected to result in any Relevant Person or the Owners becoming a Restricted Person or (iii) would trigger the operation of any sanctions limitation or exclusion clause in any insurance documentation;
 
(s)
they shall, and shall procure that each Obligor shall (including procuring or as the case may be, using all reasonable endeavours to procure the respective officers, directors, employees, consultants, agents and/or intermediaries of the relevant entity to do the same) shall:
 

 (i)
comply with all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws;
 

 (ii)
maintain systems, controls, policies and procedures designed to promote and achieve ongoing compliance with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws; and
 

 (iii)
in respect of the Charterers, not use, or permit or authorize any person to directly or indirectly use, the Purchase Price for any purpose that would breach any Anti-Money Laundering Laws, Anti-Terrorism Financing Laws or Business Ethics Laws;
 
 
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(t)
in respect of the Charterers, not lend, invest, contribute or otherwise make available the Purchase Price to or for any other person in a manner which would result in a violation of Anti-Money Laundering Laws, Anti-Terrorism Financing Laws or Business Ethics Laws;
 
(u)
they shall, and shall procure that each other Obligor shall promptly notify the Owners of any non-compliance, by any Obligor or their respective officers, directors, employees, consultants, agents or intermediaries or (on a best efforts basis) by the Approved Sub-charterer, with all laws and regulations relating to Sanctions, Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws (including but not limited to notifying the Owners in writing immediately upon being aware that any Obligor or its shareholders, directors, officers or employees or any Approved Sub-charterer is a Restricted Person or has otherwise become a target of Sanctions) as well as provide all information (once available) in relation to its business and operations which may be relevant for the purposes of ascertaining whether any of the aforesaid parties are in compliance with such laws;
 
(v)
in respect of the management of the Vessel:
 

 (i)
they shall ensure that the Vessel be commercially and/or technically managed under an Approved Management Agreement;
 

 (ii)
they shall not appoint or permit to be appointed any manager of the Vessel unless it is an Approved Manager or unless the Owners have provided their prior approval for another new manager, such approval not to be unreasonably withheld or delayed, and such new manager enters into a Manager’s Undertaking; and
 

 (iii)
they shall not, save with the prior written consent of the Owners (such consent not to be unreasonably withheld or delayed), agree or enter into any transaction, arrangement, document or do or omit to do anything which will have the effect of materially varying, amending or supplement the terms of an Approved Management Agreement;
 
(w)
they shall not, and shall procure that they shall not agree or enter into any transaction, arrangement, document or do or omit to do anything which will have the effect of varying, amending or supplementing the material terms of an Approved Sub-charter (which, in the case of such Approved Sub-charter being made otherwise on a bareboat basis, is limited to such Approved Sub-charters which are capable of exceeding thirteen (13) months);
 
(x)
they shall ensure that all Earnings and any other amounts received by them in connection with the Vessel are paid into the Earnings Account;
 
(y)
from the Commencement Date and during the Charter Period, they shall not enter into any other investments, any sale or leaseback agreements, any off-balance sheet transaction or incur any other liability or obligation (including without limitation, any Financial Indebtedness of any obligations under a guarantee) except:
 

 (i)
liabilities and obligations under the Leasing Documents to which it is or, as the case may be, will be a party; or
 

 (ii)
liabilities or obligations reasonably incurred in the normal course of its business of trading, operating and chartering, maintaining and repairing the Vessel; and
 
(z)
any transaction entered into with their Affiliates shall be on arm’s length basis and in good faith;
 
(aa)
they will ensure and procure that:
 

 (i)
the Market Value of the Vessel shall be ascertained at the expenses of the Charterers from time to time in the following circumstances:
 
 
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(A)
upon the occurrence of a Termination Event which is continuing, at any time at the request of the Owners;
 

 (B)
in the absence of a Termination Event which is continuing:
 

 (i)
from the first anniversary of the Commencement Date, at least once every calendar year during the Charter Period, with such report to be dated no more than thirty (30) calendar days prior to every anniversary of the Commencement Date occurring within the Charter Period or on such other date as the Owners may request; and
 

 (ii)
at any time at the request of the Owners if the Owners have determined (in their sole reasonable discretion) that the Market Value of the Vessel falls below the Minimum Amount; and
 

 (ii)
the Charterers shall pay the Owners the amount of the fees and expenses incurred by the Owners in connection with any matter arising out of this paragraph (aa);
 
(bb)
if and when the Market Value of the Vessel falls below an amount (the “Minimum Amount”) which equals to 120% of the Charterhire Principal Balance as at the preceding anniversary of the Commencement Date, the Charterers shall, upon request, promptly and in any event not later than the date falling five (5) Business Days after the Owners notify them of such circumstance, provide, or ensure the provision of additional security which in the opinion of the Owners has a net realizable value of at least equal to the shortfall and is acceptable to the Owners, and which is documented in such terms as the Owners may require. (Such difference between the Market Value and the Minimum Amount being referred to as the “shortfall” for the purposes of this paragraph);
 
(cc)
they shall, and shall procure that each other Obligor will provide the Owners with access to class records in respect of the Vessel if and when requested by the Owners;
 
(dd)
they shall ensure that no Change of Control shall occur without the prior written consent of the Owners;
 
(ee)
they shall ensure that they and/or the Approved Managers shall comply with the Maritime Labour Convention, 2006;
 
(ff)
they:
 

 (i)
shall or shall procure that any other organisation or person whom the Charterers have contractually agreed to take over all duties and responsibilities imposed by the ISM Code (including the relevant Approved Manager as an ISM Company or any Approved Sub-charterer of the Vessel) will:
 

 (A)
surrender any Emission Allowances in respect of the Vessel under any applicable Emission Scheme; and
 

 (B)
promptly upon the Owners’ request, provide and submit such signed mandate letter in the form required by the Owners and the relevant administering  authority and provide any other information and documents as required by the Owners and/or the relevant administering authority in relation to any applicable Emission Scheme;
 

 (ii)
shall fulfil all obligations which may be imposed on the Owners as registered owner of the Vessel by the MARPOL Carbon Intensity Regulations;
 
(gg)
without prejudice to paragraph (ff) above, in relation to EU ETS:
 
 
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(i)
the Charterers acknowledge that if the Vessel stops at ports in the European Union, they will incur liabilities under EU ETS and Fuel EU Maritime;
 

 (ii)
the Charterers acknowledge and agree that if they intend to sail the Vessel into ports in the European Union, the Charterers shall register the Vessel as part of a shipping company as required under the EU ETS and shall comply in all respects with the EU ETS and Fuel EU Maritime;
 

 (iii)
if required by the competent administering authority or the Owners (due to the requirements of the competent administering authority), the Charterers shall provide a letter in a format to be agreed by the Owners (and which is in a format acceptable to the competent Emission Scheme Authority) confirming that they or the competent ISM Company have assumed responsibility for the operation of the Vessel from the Owners (the "ETS and Fuel EU Maritime Letter"); and
 

 (iv)
the Charterers shall, or procure that the relevant Approved Manager as ISM Company shall, submit the ETS and Fuel EU Maritime Letter to the relevant Emission Scheme Authority upon registration of the Vessel pursuant to the EU ETS and shall provide the Owners with evidence of such registration (if available by the said authority) promptly; and
 

 (v)
the Owners hereby acknowledge and undertake to timely assist the Charterers on the above, including but not limited to signing any mandate letters, forms or other instruments and providing any necessary information, in relation to an Emissions Scheme that may be necessary for the Charterers and/or the ISM Company to complete any relevant procedures; and
 
(hh)
they shall (and they shall procure that each of the Approved Manager and where/if applicable, on a best efforts basis the Approved Sub-charterer shall):
 

 (i)
co-operate and exchange all relevant data and information with each other in a timely manner to:
 

 (A)
facilitate compliance by the Charterers and any other Emission Scheme Participant with any applicable Emission Scheme; and
 

 (B)
enable the Charterers and any other Emission Scheme Participant to calculate the amount of Emission Allowances in respect of the Vessel which are required to be surrendered to the relevant Emission Scheme Authority for that Emission Scheme during the Charter Period; and
 

 (ii)
promptly supply to the relevant Emission Scheme Authority relating to any applicable Emission Scheme with all relevant documents (including without limitation, any relevant mandating documents required in connection with surrendering the relevant Emission Allowances to the relevant Emission Scheme Authority relating to the relevant Emission Scheme) required to be provided to such Emission Scheme Authority relating to such Emission Scheme,
 
and to do all such things necessary or advisable to ensure that the Owners, the Charterers, each Emission Scheme Participant and the Vessel will be in compliance with all Environmental Laws.

CLAUSE 49
– PURCHASE OPTION
 
49.1
The Charterers shall have the option, at any time after the Commencement Date, to purchase the Vessel on any date (the “Purchase Option Date”) specified in a notice (the “Purchase Option Notice”) at the applicable Purchase Option Price, subject always to giving the Owners no less than forty five (45) days’ prior written notice.
 
 
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49.2
A Purchase Option Notice shall be signed by a duly authorised officer or attorney of the Charterers and, once delivered to the Owners, is irrevocable and the Charterers shall be bound to pay to the Owners the Purchase Option Price on the Purchase Option Date.
 
49.3
Only one Purchase Option Notice may be served throughout the duration of the Charter Period.
 
49.4
Upon the Owners’ receipt in full of the Purchase Option Price, the Owners shall transfer the legal and beneficial ownership of the Vessel on an “as is where is” basis (and otherwise in accordance with the terms and conditions set out in Clause 51 (Sale of the Vessels to the Charterers)) to the Charterers or their nominees and shall 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 to the Charterers (and to the extent required for such purposes the Vessel shall be deemed first to have been redelivered to the Owners).
 
CLAUSE 50
– PURCHASE OBLIGATION
 
Subject to the other provisions of this Charter, in consideration of the Owners entering into this Charter, on the Charter Expiry Date, provided all moneys owing and payable under this Charter have been fully and irrevocably paid to the Owners (including the Charterhire Balloon Instalment), the Charterers shall be obliged to (i) purchase from the Owners all of the Owners’ beneficial and legal right, title and interest in the Vessel and all belonging to her and the Owners, (ii) perform their obligations referred to in Clause 51 (Sale of the Vessel to the Charterers) and (iii) pay the Purchase Obligation Price on the Charter Expiry Date in relation thereto (unless the Owners agree otherwise in writing and upon such terms and conditions as the Owners may deem fit in their absolute discretion).
 
CLAUSE 51
– SALE OF THE VESSEL TO THE CHARTERERS
 
51.1
All legal and beneficial interest and title in the Vessel shall be transferred to the Charterers by the Owners pursuant to the terms of Clause 41 (Termination, Redelivery and Total Loss), Clause 49 (Purchase option) or Clause 50(Purchase obligation) (as the case may be) on an “as is where is” basis and on the following terms and conditions:
 
(a)
the Charterers expressly agree and acknowledge that 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 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, the Charterers hereby also waive any rights which they may have in tort in respect of any of the matters referred to under this Clause 51 (Sale of the Vessel to the Charterers) and irrevocably agree that (i) 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; (ii) 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 and (iii) 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 mortgages or any other liens, encumbrances, claims or debts whatsoever created by the Owners (save for those mortgages, liens, encumbrances or debts created under the Leasing Documents);
 
(c)
the Purchase Option Price, the Purchase Obligation Price, the Termination Purchase Price or the Mandatory Sale Price (as the case may be) shall be paid by (or on behalf of) the Charterers to the Owners on respectively the Purchase Option Date, the Charter Expiry Date, the Termination Notice Date or Mandatory Sale Date (as applicable), together with unpaid amounts of Charterhire and other moneys owing by or accrued or due from the Charterers under this Charter on or prior to the Purchase Option Date, the Charter Expiry Date, the Termination Notice Date or Mandatory Sale Date (as the case may be) which remain unpaid; and
 
(d)
upon the Purchase Option Price, the Purchase Obligation Price, the Termination Purchase Price or the Mandatory Sale Price (as the case may be) and all other moneys payable under this Charter being fully and irrevocably paid to the Owners on, and in accordance with, the terms set forth in this Charter (except in the case of Total Loss) the Owners agree (at the cost of the Charterers) to enter into (i) a bill of sale and (ii) a protocol of delivery and acceptance, and the Vessel shall accordingly be deemed delivered to the Charterers on the date and time set out in such protocol of delivery and acceptance (and to the extent required for such purposes the Vessel shall be deemed first to have been redelivered to the Owners).
 
CLAUSE 52
– INDEMNITIES
 
52.1
The Charterers agree to indemnify and keep the Owners (collectively, the “Indemnitees”) indemnified against all claims, expenses, liabilities, losses, reasonable and documented fees (including but not limited to any vessel registration and tonnage fees) suffered or incurred by or imposed on the Indemnitees directly arising from this Charter and any Leasing Document or in connection with delivery, possession, performance, control, registration, repair, survey, insurance, maintenance, manufacture, purchase, ownership and operation of the Vessel by the Indemnitees and the costs related to the prevention or release of liens or detention of or requisition, use, operation or redelivery, sale or disposal of the Vessel or any part of it and whether prior to, during or after termination of the leasing of this Charter and whether or not the Vessel is in the possession or the control of the Charterers or otherwise. Without prejudice to its generality, this Clause 52 (Indemnities) covers any claims, expenses, liabilities and losses which directly 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. Such indemnity obligation shall survive the termination of the Charter Period.
 
52.2
Without prejudice to the above Clause 52.1, if any sum (a “Sum”) due from a Relevant Person (other than any Approved Sub-charterer which is not a member of the Group) under the Leasing Documents, 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:
 
(a)
making or filing a claim or proof against that Relevant Person; or
 
(b)
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
 
the Charterers shall, as an independent obligation, on demand, indemnify the Owners 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.
 
 
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52.3
The obligations of the Charterers under Clause 52(Indemnities) and in respect of any Security Interest created pursuant to the Security Documents will not be affected or discharged by an act, omission, matter or thing which would reduce, release or prejudice any of its obligations under Clause 52 (Indemnities) or in respect of any Security Interest created pursuant to the Security Documents (without limitation and whether or not known to it or any Relevant Person) including:
 
(a)
any time, waiver or consent granted to, or composition with, any Relevant Person or other person;
 
(b)
the release of any other Relevant Person or any other person under the terms of any composition or arrangement with any creditor of the Guarantor or any of its affiliates;
 
(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 Relevant Person 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 Relevant Person or any other person;
 
(e)
any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Leasing Document or any other document or security;
 
(f)
any unenforceability, illegality or invalidity of any obligation of any person under any Security Document or any other document or security; or
 
(g)
any insolvency or similar proceedings.
 
52.4
In consideration of the Charterers requesting the Other Owners to charter the Other Vessels to the relevant Other Charterers under the relevant Other Charters, the Charterers hereby irrevocably and unconditionally undertake to pay immediately on demand from any Other Owner such amounts in respect of all claims, expenses, liabilities, losses, documented fees of every kind and nature and all other moneys due, owing and/or payable to any Other Owner under or in connection with any Other Charter, and to indemnify and hold such Other Owner harmless against all such moneys, costs, fees and expenses.
 
52.5
Notwithstanding anything to the contrary herein 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.
 
52.6
All rights which the Charterers have at any time (whether in respect of this Charter or any other transaction) against any of the Other Charterers or the Guarantor 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 the Leasing Documents or by reason of any amount becoming payable, or liability arising, under this Clause 52 (Indemnities):
 
(a)
to be indemnified by any of the Other Charterers or the Guarantor;
 
(b)
to claim any contribution from any third party providing security for, or any other guarantor of, the Other Charterers’ or the Guarantor’s obligations under the Leasing Documents;
 
(c)
to take any benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of any of the Other Charterers or the Guarantor under the Leasing Documents or of any other guarantee or security taken pursuant to, or in connection with, the Leasing Documents by any of the aforesaid parties;
 
 
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(d)
to bring legal or other proceedings for an order requiring any of the Other Charterers or the Guarantor or any of them to make any payment, or perform any obligation, in respect of any Leasing Document;
 
(e)
to exercise any right of set-off against any of the Other Charterers or the Guarantor; and/or
 
(f)
to claim or prove as a creditor of any of the Other Charterers or the Guarantor,
 
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 or any Other Owner by any of the Other Charterers or the Guarantor under or in connection with the Leasing Documents to be repaid in full on trust for the Owners or the Other Owners and shall promptly pay or transfer the same to the Owners or the Other Owners as may be directed by the Owners.
 
52.7
The Charterers hereby irrevocably agree to indemnify and hold harmless the Owners against any claim, expense, liability or loss incurred by the Owners (and which is notified to the Charterers) in liquidating or employing deposits from the Owners’ Financier or third parties to fund the acquisition of the Vessel pursuant to the MOA, on or prior to the Commencement Date.
 
CLAUSE 53
– NO SET-OFF OR TAX DEDUCTION
 
53.1
All payments of Charterhire, the Purchase Obligation Price, the Purchase Option Price, the Termination Purchase Price and any other payment made from the Charterers to enable the Owners to pay all amounts under a Pertinent Document shall be paid punctually:
 
(a)
without any form of set-off, cross-claim or condition (except in the case of Advance Charterhire which shall be subject to the set-off under Clause 36.2 above) and in the case of Charterhire, without previous demand unless otherwise agreed with the Owners; and
 
(b)
free and clear of any tax deduction or withholding unless required by law.
 
53.2
Without prejudice to Clause 53.1, if the Charterers are required by law to make a tax deduction from any payment:
 
(a)
the Charterer shall notify the Owners 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.
 
53.3
In this Clause (No set-off or tax deduction) “tax deduction” means any deduction or withholding for or on account of any present or future tax, other than a FATCA Deduction.
 
CLAUSE 54
– INCREASED COSTS
 
54.1
This Clause 54(Increased costs) applies if the Owners notify the Charterers that they consider (acting in good faith) 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
 
 
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(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) or the Owners’ Financier has incurred or will incur an “increased cost”.

54.2
In this Clause 54 (Increased costs), “increased cost” means, in relation to the Owners or the Owners’ Financier:
 
(a)
an additional or increased cost incurred as a result of, or in connection with, as the case may be, (i) the Owners having entered into, or being a party to, this Charter, of funding the acquisition of the Vessel pursuant to the MOA or performing their obligations under this Charter or (ii) the Owners’ Financier entering into the funding arrangements described under Clause 59.2(a);
 
(b)
a reduction in the amount of any payment to the Owners under this Charter or in the effective return which such a payment represents to the Owners on their capital;
 
(c)
an additional or increased cost of funding the acquisition of the Vessel pursuant to the MOA; or
 
(d)
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Owners under this Charter,
 
and for the purposes of this Clause 54.2 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.

54.3
Subject to the terms of Clause 54.1, the Charterers shall pay to the Owners, on the Owners’ demand, the amounts which the Owners from time to time notify the Charterers to be necessary to compensate the Owners for the increased cost.
 
CLAUSE 55
– FATCA
 
55.1
Defined terms. For the purposes of this Clause 55(FATCA), 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.
 
 
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“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.
 
“Relevant Party” means any of the parties to this Charter and the Leasing Documents except the Approved Sub-charterer.
 
“IRS” means the United States Internal Revenue Service or any successor taxing authority or agency of the United States government.
 
55.2
FATCA Information.
 
(a)
Subject to paragraph (c) below, each Relevant Party shall within ten (10) Business Days of a reasonable request by another Relevant Party:
 

 (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 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.
 
(b)
If a Relevant Party confirms to any other Relevant Party 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 so notify all other Relevant Parties reasonably promptly.
 
(c)
Nothing in this Clause (FATCA) 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 fiduciary duty or any duty of confidentiality.
 
(d)
If a Relevant 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 Relevant Party shall be treated for the purposes of the Leasing Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Relevant Party in question provides the requested confirmation, forms, documentation or other information.
 
55.3
FATCA Deduction and gross-up by Relevant Party
 
(a)
If the representation made by the Charterers under Clause 47.1(o) 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.
 
(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.
 
 
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55.4
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.
 
55.5
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 55.3 (FATCA deduction and gross-up by relevant party) 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 56
– CONFIDENTIALITY
 
56.1
The Parties agree to keep the terms and conditions of this Charter and any other Leasing Documents (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)
disclosure is made to any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, insurers, insurance advisors, insurance brokers, partners as the relevant Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (b) is informed by the disclosing Party 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;
 
(c)
it is required to be disclosed under the applicable laws of any Relevant Jurisdiction, by a governmental order, decree, regulation or rule, by an order of a court, tribunal or listing exchange of the Relevant Jurisdiction, provided that the disclosing Party shall give written notice of such required disclosure to the other Party prior to the disclosure;
 
(d)
it is required to be disclosed to any governmental, banking, taxation or other regulatory authority or similar body, pursuant to the rules of any relevant stock exchange and/or securities and exchange commission rules (including, but not limited to, the US Securities and Exchange Commission Rule or the Nasdaq Rules); or pursuant to any applicable law or regulation;
 
(e)
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;
 
(f)
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), provided that such person receiving Confidential Information shall undertake that it would not disclose Confidential Information to any other party save for circumstances arising which are similar to those described under this Clause (Confidentiality) or such other circumstances as may be permitted by all Parties;
 
 
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(g)
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 either paragraph (f) above or this paragraph (g)(i) or (g)(ii) (including the employees, officers and directors thereof);
 

 (ii)
professional advisers retained by a disclosing party; or
 

 (iii)
persons advising on, providing or considering the provision of financing to the disclosing party or an Affiliate,

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 (Confidentiality) or such other circumstances as may be permitted by all Parties; or

(h)
with the prior written consent of all Parties.
 
CLAUSE 57
– PARTIAL INVALIDITY
 
If, at any time, any provision of a 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.
 
CLAUSE 58
– SETTLEMENT OR DISCHARGE CONDITIONAL
 
58.1
Any settlement or discharge under any Leasing Document between the Owners and any Relevant Person or any other person shall be conditional upon no security or payment to the Owners by any Relevant Person or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.
 
58.2
If the Owners consider (acting reasonably) that an amount paid or discharged by, or on behalf of, a Relevant Person in purported payment or discharge of an obligation of that Relevant Person to the Owners under the Leasing Documents is capable of being avoided or otherwise set aside on the liquidation or administration of that Relevant Person or otherwise, then that amount shall not be considered to have been unconditionally and irrevocably paid or discharged for the purposes of the Leasing Documents.
 
CLAUSE 59
– CHANGES TO THE PARTIES
 
59.1
Assignment or transfer by the Charterers
 
The Charterers shall not assign their rights or transfer by novation any of their rights and obligations under the Leasing Documents except with the prior consent in writing of the Owners.
 
59.2
Assignment or transfer by the Owners
 
Subject to Clause 35 (Quiet enjoyment) above, the Charterers acknowledge that, at any time during the Charter Period:
 
(a)
the Owners are entitled to enter into certain funding arrangements with their financier(s), (the "Owners’ Financier"), in order to finance in part or in full of the Purchase Price, 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 the prior consent of the Charterers:
 
 
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(i)
execute a ship mortgage over the Vessel or any other Financial Instrument in favour of an Owners’ Financier (if there is any financing charter registration in respect of this Charter, the Charterers shall cooperate with the Owners to de-register such financing charter registration or to assign all interest in and to such financing charter in favour of the Owner’s Financier to the satisfaction of the Owner’s Financier, provided that such de-registration or assignment shall not affect the Charterers’ rights to operate the Vessel in accordance with the terms of this Charter);
 

 (ii)
assign their rights and interests to, in or in connection with this Charter and any other Leasing Document in favour of that Owners’ Financier;
 

 (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 that Owners’ Financier; and
 

 (iv)
enter into any other document or arrangement which is necessary to give effect to such financing arrangements.
 
(c)
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’ Financier in conformity with any Financial Instrument.
 
(d)
The Owners may transfer by novation (or otherwise) any of its rights and obligations under the Leasing Documents and/or sell the Vessel at any time with the prior written consent of the Charterers (such consent not to be unreasonably withheld or delayed), provided that such consent would not be required if such transfer is made:
 

 (i)
to another lessor or financial institution or trust, fund, leasing company 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 or to any other party at any time;
 

 (ii)
to an affiliate of the Owners;
 

 (iii)
at such time following the occurrence of a Termination Event which is continuing; or
 

 (iv)
in accordance with the Charterers’ exercise of the Purchase Option under Clause 49 (Purchase option) or of the Purchase Obligation under Clause 50 (Purchase obligation).
 
(e)
Following any change in the registered ownership of the Vessel permitted pursuant to Clause 59.2, this Charter would continue on identical terms (save for logical, consequential or mutually agreed amendments), and the Charterers hereby agree that they shall be liable to the aforesaid new owner of the Vessel for its performance of all obligations pursuant to this Charter after change of the registered ownership of the Vessel from the Owners to such new owner and shall procure that the Guarantor shall execute a guarantee in favour of the new owners for the inter alia, obligations of the Charterers under this Charter, in substantially in the same form as the Guarantee (or such other form as the Guarantor and the new owners may agree).
 
59.3
The Charterers agree and undertake to enter into any such usual documents as the Owners shall reasonably require to complete or perfect the transfer of the Vessel (with the benefit and burden of this Charter) pursuant to Clause 59.2 (Assignment or transfer by the Owners), at no cost to the Charterers.
 
 
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CLAUSE 60
– MISCELLANEOUS
 
60.1
The Charterers waive any rights of sovereign immunity which they or any of their assets may enjoy in any jurisdiction and subjects itself to civil and commercial law with respect to their obligations under this Charter.
 
60.2
No term of this Charter is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not party to this Charter, save that any of the Other Owners may rely on the rights conferred on them under Clause 52.2.
 
60.3
This Charter and each 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.
 
60.4
These additional clauses shall be read together with the BARECON 2001, and shall constitute a single instrument. In the case of any conflict between the provisions of these additional terms and the BARECON 2001, these additional terms shall prevai–.
 
CLAUSE 61
- DEFINITIONS
 
61.1
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 to be signed by the Charterers at Delivery.
 
“Account Bank” means Alpha Bank S.A. acting through its office at 93 Akti Miaouli street, 18538, Piraeus, Greece or such other bank as may be approved in writing by the Owners.
 
“Account Security” means the document creating security over the Earnings Account executed or to be executed by the Charterers in favour of the Owners and the Other Owners, in the agreed form.
 
"Advance Charterhire” means an amount equivalent to 35% of the applicable Purchase Price.
 
“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.
 
"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 European Union 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 any Relevant Person, Approved Sub-charterer or the Owners; (b) of any jurisdiction in which any Relevant Person, Approved Sub-charterer or the Owners conduct business; or (c) to which any Relevant Person, Approved Sub-charterer or the Owners is subjected or subject to.
 
“Anti-Terrorism Financing Laws” means all applicable anti-terrorism laws, rules, regulations or guidelines of any jurisdiction, including and not limited to the United States of America or the People’s Republic of China which are: (a) issued, administered or enforced by any governmental agency, having jurisdiction over any Relevant Person, Approved Sub-charterer or the Owners; (b) of any jurisdiction in which any Relevant Person, Approved Sub-charterer or the Owners conduct business; or (c) to which any Relevant Person, Approved Sub-charterer or the Owners are subjected or subject to.
 
“Approved Commercial Management Agreement” means:
 
 
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(a)
the management agreement in respect of the Vessel dated 2 March 2015 originally made between Seanergy Management Corp. and Fidelity Marine Inc., as amended and/or supplemented by an amendment deed no. 1 dated 11 September 2015, an amendment deed no. 2 dated 24 February 2016, an amendment deed no. 3 dated 1 February 2018, an amendment deed no. 4 dated 28 June 2018 and an amendment deed no. 5 dated 3 November 2021 and an accession deed dated 21 May 2024; or
 

 (b)
such other management agreement entered into after the date of this Charter to be made between the Charterers as owner and an Approved Commercial Manager as commercial manager,
 
in each case as may be further amended and/or supplemented from time to time.
 
“Approved Commercial Manager” means Fidelity Marine Inc., a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands MH96960, or any other first class internationally recognised and reputable manager which may, with the prior written approval of the Owners, be appointed as a commercial manager of the Vessel.
 
“Approved Crew Management Agreement” means:
 

 (a)
the crew management agreement in respect of the Vessel dated 19 May 2024 made between the Charterers as owner and Global Seaways S.A. as crew manager; or
 

 (b)
such other management agreement entered into after the date of this Charter to be made between the Charterers as owner and an Approved Crew Manager as crew manager,
 
in each case as may be amended and/or supplemented from time to time.
 
“Approved Crew Manager” means Global Seaways S.A., a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands MH96960, or any other first class internationally recognized and reputable manager which may, with the prior written approval of the Owners, be appointed as a crew manager of the Vessel.
 
“Approved Management Agreement” means an Approved Commercial Management Agreement, Approved Crew Management Agreement, Approved Services Management Agreement or an Approved Technical Management Agreement.
 
“Approved Manager” means an Approved Commercial Manager, Approved Crew Manager, Approved Services Manager or an Approved Technical Manager.
 
"Approved Services Manager” means Seanergy Management Corp., a corporation in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands MH96960, or any other first class internationally recognized and reputable manager which may, with the prior written approval of the Owners, be appointed as a services manager of the Vessel.
 
"Approved Services Management Agreement” means:
 

 (a)
the services management agreement in respect of the Vessel dated 21 May 2024 made between the Charterers as owner and Seanergy Management Corp. as services manager; or
 

 (b)
such other management agreement entered into after the date of this Charter to be made between the Charterers as owner and an Approved Services Manager as services manager,
 
 
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in each case as may be amended and/or supplemented from time to time.
 
“Approved Sub-charter” means the Existing Sub-charter or any charter entered into by the Charterers as disponent owner which the Charterers are not prohibited from entering into under Clause 48.1(o).
 
“Approved Sub-charterer” means the Existing Sub-charterer or any sub-charterer of the Vessel under an Approved Sub-charter.
 
“Approved Technical Management Agreement” means:
 

 (a)
the management agreement in respect of the Vessel dated 21 May 2024 made between the Charterers as owner and Seanergy Shipmanagement Corp. as technical manager; or
 

 (b)
such other management agreement entered into after the date of this Charter to be made between the Charterers as owner and an Approved Technical Manager as technical manager,
 
in each case as may be amended and/or supplemented from time to time.
 
“Approved Technical Manager” means Seanergy Shipmanagement Corp., a corporation incorporated in the Republic of The Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall Islands MH96960, or any other first class internationally recognised and reputable manager which may, with the prior written approval of the Owners (such approval not to be unreasonably withheld or delayed), be appointed as a technical manager of the Vessel.
 
“Approved Valuer” means Arrow, Braemar, BRS, Clarksons Platou, Fearnleys, Howe Robinson, Maersk, Seaborne Shipbrokers S.A., Simpson Spence Young or such other independent and reputable shipbroker nominated by the Charterers and approved by the Owners.
 
“Breakfunding Costs” means all breakfunding costs and expenses 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 do not fall on a Payment Date.
 
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in Greece, Hong Kong, London, New York and Shanghai and any jurisdiction in which any Earnings Account is opened and in relation to the fixing of Term SOFR, which is a US Government Securities Business Day.
 
"Business Ethics Law" means any laws, regulations and/or other legally binding requirements or determinations in relation to corruption, fraud, collusion, bid-rigging or anti-trust, human rights violations (including forced labour and human trafficking) which are applicable to any Relevant Person, Approved Sub-charterer or the Owners or to any jurisdiction where activities are performed and which shall include but not be limited to (i) the United Kingdom Bribery Act 2010 and (ii) the United States Foreign Corrupt Practices Act 1977 and all rules and regulations under each of (i) and (ii).
 
“Buyers” means the Owners acting in their capacity as buyer of the Vessel under the MOA.
 
“Cancelling Date” shall have the same meaning as defined under the MOA.
 
"Change of Control" means the Charterers ceasing to be wholly and (either directly or indirectly) owned and controlled by the Guarantor.
 
“Charter Expiry Date” means the date falling five (5) years from the Commencement Date.
 
 
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AVICL Seanergy - Additional Clauses to Barecon 2001 (m.v. “Iconship”)
“Charter Period” means the period commencing on the Commencement Date and described in Clause 32.2 unless it is either terminated earlier or extended in accordance with the provisions of this Charter.
 
“Charterhire” means each of, or as the context may require, (i) all of the quarterly instalments of hire payable under this Charter comprising of a Fixed Charterhire element and a Variable Charterhire element and (ii) the Charterhire Balloon Instalment .
 
“Charterhire Balloon Instalment” means an amount equal to US$11,500,000.
 
“Charterhire Principal Balance” means, on any relevant date, (i) the Net Purchase Price minus (ii) the aggregate Fixed Charterhire which have been paid by the Charterers and received by the Owners as at such date.
 
“Classification Society” means the vessel classification society referred to in Box 10 (Classification Society) of this Charter or such other vessel classification society (being a member of the International Association of Classification Societies) acceptable to the Owners.
 
“Commencement Date” means the date on which Delivery takes place.
 
“Delivery” means the delivery of the physical and legal delivery of the Vessel from the Owners to the Charterers hereunder.
 
“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) and which arise out of the use or operation of the Vessel, including (but not limited to):
 

 (a)
all freight, hire and passage moneys, compensation payable in the event of requisition of the Vessel for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Vessel; and
 

 (b)
if and whenever the Vessel is employed on terms whereby any moneys falling within paragraph (a) 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.
 
“Earnings Account” means, an account in the name of the Charterers with the Account Bank or any other replacement earnings account in the name of the Charterers with any other bank which may, with the prior written consent of the Owners, be opened.

"Emission Allowances" means an allowance, credit, quota, permit or equivalent, representing a right of a vessel to emit a specified quantity of greenhouse gas emissions recognised by the Emission Scheme.

"Emission Scheme" means a greenhouse gas emissions trading scheme which for the purposes of this Charter shall include the EU ETS and any other similar systems imposed by applicable lawful authorities that regulate the issuance, allocation, trading or surrendering of Emission Allowances.

"Emission Scheme Authority" means in relation to an Emission Scheme, the relevant authority administering or otherwise implementing such Emissions Scheme.

"Emission Scheme Participant" means in relation to an Emission Scheme, any person which is responsible for complying with the requirements of such Emissions Scheme.

 
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AVICL Seanergy - Additional Clauses to Barecon 2001 (m.v. “Iconship”)
“Environmental Claim” means:


 (a)
any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or which relates to any Environmental Law; or
 

 (b)
any claim by any other person which relates to an Environmental Incident,
 
and “claim” means a claim for damages, compensation, fines, penalties or any other payment; 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 of Environmentally Sensitive Material from the Vessel; or
 

 (b)
any incident in which Environmentally Sensitive Material is released 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 liable to be arrested, attached, detained or injuncted and/or the Vessel and/or the Owners and/or the Charterers and/or the Approved Sub-charterer and/or any other operator or manager of the Vessel is at fault or otherwise liable to any legal or administrative action; or
 

 (c)
any other incident involving the Vessel in which Environmentally Sensitive Material is released otherwise than from the Vessel and in connection with which the Vessel is actually arrested and/or where the Owners and/or the Charterers and/or the Approved Sub-charterer and/or any other operator or manager of the Vessel is at fault or otherwise liable to any legal or administrative action.
 
“Environmental Law” means any law relating to pollution or protection of the environment, to the carriage or releases of Environmentally Sensitive Material.

“Environmentally Sensitive Material” means oil, oil products and any other substances (including any chemical, gas or other hazardous or noxious substance) which are (or are capable of being or becoming) polluting, toxic or hazardous.

"ETS and Fuel EU Maritime Letter" shall have the meaning as defined under 48.1(gg)(iii).

“EU ETS" means the European Union Emissions Trading System specifically applicable to shipping pursuant to the Directive (EU) 2023/959 of the European Parliament and of the Council of 10 May 2023 amending European Directive 2003/87/EC and the Commission Implementing Regulation (EU) 2023/2599 of 22 November 2023 laying down rules for the application of Directive 2003/87/EC of the European Parliament and of the Council as regards the administration of shipping companies by administering authorities in respect of a shipping company.

“Existing Sub-charter” means the time charterparty in respect of the Vessel dated 27 May 2024 entered into between the Charterers as disponent owner and the Existing Sub-charterer as charterer, as amended and/or supplemented from time to time.
 
“Existing Sub-charterer” means Costamare Bulkers Inc. with its registered office at Trust Company Complex, Ajeltake Road, Majuro, Marshall Islands.
 
“Financial Indebtedness” means, in relation to a person (the “debtor”), a liability of the debtor:

 
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(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 (f) if the references to the debtor referred to the other person;
 
“Financial Instruments” means any mortgage, deed of covenant, the general assignment or such other financial security instruments as may be granted to the Owners’ Financier as security for the obligations of the Owners in relation to the financing or refinancing of the acquisition of the Vessel.
 
“Fixed Charterhire” means the portion of Charterhire payable under Clause 36.3(a).

“Flag State” means the flag state as stated in Box 5 of this Charter or such other flag state as may be approved in writing by the Owners (such approval not to be unreasonably withheld or delayed).
 
"Fuel EU Maritime" means Fuel EU Maritime Regulation 2023/1805 dated 13 September 2023 on the use of renewable and low-carbon fuels in maritime transport, and amending Directive 2009/16/EC.
 
“General Assignment” means the general assignment in agreed form which is executed or to be executed by the Charterers in favour of the Owners in respect of the Vessel, pursuant to which the Charterers shall, inter alia, assign its rights in relation to amongst others (i) Insurances, Earnings and Requisition Compensation and (ii) any Approved Sub-charter (provided that in the case of a sub-time charter, such sub-time charter has a balance duration exceeding or capable of exceeding 13 months in the period on and following the Commencement Date)  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 in the Republic of Marshall Islands with its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960.
 
 
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AVICL Seanergy - Additional Clauses to Barecon 2001 (m.v. “Iconship”)
“Handling Fee Letter” means any fee letter dated on or around the date hereof setting out the handling fee or other fee payable by the Charterers to the Owners pursuant to Clause 42.1.
 
“Historic Term SOFR” means the most recent applicable Term SOFR for a period equal in length to the relevant Term and which is as of a day which is no more than three US Government Securities Business Days before the Quotation Day.
 
“Holding Company” means, in relation to a person, any other person in relation to which it is a subsidiary.
 
“IAPPC” means a valid international air pollution prevention certificate for the Vessel issued pursuant to the MARPOL Protocol.
 
“Initial Charterhire Principal Balance without Balloon” means the Net Purchase Price minus the Charterhire Balloon Instalment.
 
“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;
 
"Interest Rate" means, in relation to Variable Charterhire, the aggregate of the Reference Rate and the Margin.
 
“Interpolated Historic Term SOFR” means the rate 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 Quotation Day) for the longest period (for which Term SOFR is available) which is less than the relevant Term; or
 

 (ii)
if no such Term SOFR is available for a period which is less than the relevant Term, 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 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 relevant Term.
 
“Interpolated Term SOFR” means the rate which results from interpolating on a linear basis between:
 

 (a)
either
 
 
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AVICL Seanergy - Additional Clauses to Barecon 2001 (m.v. “Iconship”)

(i)
the applicable Term SOFR (as of the Quotation Day, prior to 5pm (New York time)) for the longest period (for which Term SOFR is available) which is less than the relevant Term; or
 

 (ii)
if no such Term SOFR is available for a period which is less than the relevant Term, SOFR for the day which is two US Government Securities Business Days before the Quotation Day, prior to 5pm (New York time); and
 

 (b)
the applicable Term SOFR (as of the Quotation Day, prior to 5pm (New York time)) for the shortest period (for which Term SOFR is available) which exceeds the relevant Term.
 
“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, supplemented or replaced 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.
 
"ISSC" means an International Ship Security Certificate issued under the ISPS Code.
 
"ISM Company” means the entity responsible for the Vessel's compliance with the ISM Code at any relevant time.
 
“Leasing Documents” means this Charter, the MOA and the Security Documents.
 
“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.
 
“Manager’s Undertaking” means each of the letters of undertaking, in agreed form, to be executed by the relevant Approved Manager under which, amongst others, such Approved Manager agrees to assign its rights (if any) in Insurances in favour of the Owners as well as subordinate its rights against the Charterers to the rights of the Owners.
 
"Mandatory Sale Date” means such date which the Charterers are required to pay the Mandatory Sale Price to the Owners under Clause 46 (Mandatory Sale).
 
“Mandatory Sale Notice” means the written notice from the Owners to the Charterers as described under Clause 46.1 above.
 
"Mandatory Sale Price" means, in respect of any date (for the purposes of this definition only, the "Relevant Date"), the aggregate of:
 

 (a)
the Charterhire Principal Balance as at the Relevant Date;
 

 (b)
any accrued but unpaid Variable Charterhire, as at the Relevant Date;
 

 (c)
any Breakfunding Costs;
 
 
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AVICL Seanergy - Additional Clauses to Barecon 2001 (m.v. “Iconship”)

(d)
any costs incurred and expenses incurred by the Owners (and the Owners’ Financier (if any)) in locating, repossessing or recovering the Vessel or collecting any payments due under this Charter or in obtaining the due performance of the obligations of the Charterers under this Charter or the other Leasing Documents and any default interest in relation thereto;
 

 (e)
any direct losses and liabilities and documented costs and expenses (including, without limitation, legal fees) incurred by the Owners in connection with the termination of this Charter under Clause 46 (Mandatory Sale); and
 

 (f)
all other outstanding amounts payable under the Leasing Documents together with any applicable interest thereon.
 
“Margin” means 2.55% per annum.
 
“Market Value” means, in relation to the Vessel, the arithmetic mean of the valuations shown by two (2) valuation reports each addressed to the Owners and prepared (at the Charterers’ Cost):
 

 (i)
on a date no earlier than thirty (30) days prior to the relevant date of determination;
 

 (ii)
by Approved Valuers;
 

 (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, free of any existing charter or other contract of employment or such other basis as may be agreed between the Charterers and the Owners.
 
"MARPOL Carbon Intensity Regulations" means the regulations contained in Chapters 1, 2 and 4 of Revised MARPOL Annex VI which relate to “Regulations on the Carbon Intensity of International Shipping” and Resolution MEPC.328(76) implementing the CII and any associated guidelines and/or subsequent amendments, including the Ship Energy Efficiency Management Plan (SEEMP).
 
“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) or prospects of any Obligor; 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.
 
“MOA” means the memorandum of agreement entered into by the Sellers and the Buyers dated on the date hereof in relation to the sale and purchase of the Vessel.
 
“Net Purchase Price” has the meaning given to such term in the MOA.
 
 
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"Net Sales Proceeds" has the meaning given to it under Clause 41.4(b)(ii).
 
“Obligor” means any of the Charterers, the Guarantor, the Shareholder, any Approved Manager (other than a Third Party Approved Manager) and only in relation to a Security Document any party entering into such Security Document or any other party providing security for the Charterers’ obligations under this Charter pursuant to a Security Document.
 
“Original Financial Statements” means the audited financial statements (in English) of the Guarantor and the unaudited financial statements (in English) of the Charterers for the financial year ended 31 December 2023.
 
“Original Jurisdiction” means, in relation to any Obligor, the jurisdiction under whose laws they are incorporated as at the date of this Charter.
 
“Other Charter” means, in relation to each Other Vessel, a bareboat charterparty entered into between the relevant Other Owner, as owner, and the corresponding Other Charterer, as bareboat charterer.
 
“Other Charterer” means either Hellas Ocean Navigation Co., a corporation incorporated in the Republic of Liberia and Patriot Shipping Co., a corporation incorporated in the Republic of the Marshall Islands (and “Other Charterers” mean both of them).
 
“Other Owner” means either Hao Leo Limited or Hao Virgo Limited, each incorporated in the Republic of Liberia.
 
“Other Security Documents” means the Security Documents (as defined in any Other Charter) in respect of such Other Charter.
 
“Other Vessel” means any of the bulk carriers named “Hellasship” with IMO number 9574236 and “Patriotship” with IMO number 9446441.
 
“Owners’ Financier” shall have the meaning as defined under Clause 59.2(a).
 
“Owners’ Sale” shall have the meaning as defined under Clause 41.4(b)(ii).
 
“Party” means any party to this Charter.
 
“Payment Date” shall have the meaning as defined under Clause 36.3.
 
“Payment Notice” shall have the same meaning as defined under the MOA.
 
“Permitted Security Interests” means:
 

 (a)
Security Interests created by a Leasing Document or a Financial Instrument;
 

 (b)
liens 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)
liens for salvage;
 

 (d)
liens for master’s disbursements incurred in the ordinary course of trading;
 

 (e)
any other liens 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
 
 
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(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.
 
“Pertinent Document” means any Approved Sub-charter and each of the Leasing Documents.

“Potential Termination Event” means, an event or circumstance which, with the giving of any notice, the lapse of time, a determination of the Owners and/or the satisfaction of any other condition, would constitute a Termination Event.
 
“Prepositioning Date” shall have the same meaning as defined under the MOA.
 
"Purchase Obligation" means the purchase obligation referred to in Clause 50 (Purchase obligation).
 
"Purchase Obligation Price" means an amount equal to US$100.
 
"Purchase Option" means the early purchase option which the Charterers are entitled to exercise pursuant to Clause 49 (Purchase option).
 
"Purchase Option Date" has the meaning given to that term in Clause 49.1.
 
“Purchase Option Fee” means:
 

 (a)
one point five per cent. (1.50%) of the Charterhire Principal Balance as at the Purchase Option Date, if the Purchase Option Date falls after the Commencement Date up to and including the third (3rd) anniversary of the Commencement Date; or
 

 (b)
nil, if the Purchase Option Date falls after the third (3rd) anniversary of the Commencement Date.
 
"Purchase Option Notice" has the meaning given to that term in Clause 49.1.
 
"Purchase Option Price" means the aggregate of:
 

 (a)
the Charterhire Principal Balance as at the Purchase Option Date;
 

 (b)
the applicable Purchase Option Fee;
 

 (c)
any accrued but unpaid Variable Charterhire as at the Purchase Option Date;
 

 (d)
a nominal fee of US$100;
 

 (e)
any Breakfunding Costs;
 

 (f)
any costs incurred and expenses incurred by the Owners in collecting any payments due under this Charter or in obtaining the due performance of the obligations of the Charterers under this Charter or the other Leasing Documents and any default interest in relation thereto;
 

 (g)
any reasonable and documented losses, liabilities, costs and expenses (including, without limitation, legal fees) incurred by the Owners in connection with the exercise of the Purchase Option under Clause 49 (Purchase option); and
 
 
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AVICL Seanergy - Additional Clauses to Barecon 2001 (m.v. “Iconship”)

(h)
all other amounts due and outstanding under this Charter and the other Leasing Documents together with any applicable interest thereon.
 
“Purchase Price” has the meaning given to such term in the MOA.
 
“Quotation Day” means, in relation to any period for which an interest rate is to be determined, ten (10) US Government Securities Business Days before the first day of that period (or such earlier date as may be mutually agreed between the Owners and the Charterers} unless market practice differs in the relevant interbank market in which case the Quotation Day will be determined by the Owners in accordance with that market practice in the relevant interbank market (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 Term:


 (a)
the applicable Term SOFR for three (3) months as of the relevant Quotation Day; or
 

 (b)
as otherwise determined pursuant to Clause 37 (Changes to the calculation of interest),
 
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 each Obligor:
 

 (a)
its Original Jurisdiction;
 

 (b)
any jurisdiction where any property owned by it and charged under a Pertinent Document is situated;
 

 (c)
any jurisdiction where it conducts its business; and
 

 (d)
any jurisdiction whose laws govern the perfection of any of the Pertinent Documents entered into by it creating a Security Interest.
 
“Relevant Person” means each of the Charterers, the Other Charterers, the Shareholder, the Guarantor, any Approved Manager and any other party providing security in favour of the Owners in connection with the Charterers’ obligations under this Charter.

"Requisition" means:
 

 (a)
any expropriation, confiscation, requisition (excluding a requisition for hire or use for a fixed period equal to or less than one (1) year without any right to an extension, such requisition not involving a requisition for title) 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 (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 arrest, capture or seizure of the Vessel (including any hijacking or theft) by any person whatsoever.
 
 
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AVICL Seanergy - Additional Clauses to Barecon 2001 (m.v. “Iconship”)
“Requisition Compensation” includes all compensation or other moneys payable to the Charterers by reason of any Requisition or any arrest or detention of the Vessel in the exercise or purported exercise of any lien or claim.
 
“Restricted Countries” means those countries or territories subject to country-wide or territory-wide Sanctions and/or trade embargoes or whose government is the target of Sanctions, in particular but not limited to pursuant to the U.S.'s Office of Foreign Asset Control of the U.S. Department of Treasury (“OFAC”) including at the date of this Charter, but without limitation, Iran, Cuba, Iran, North Korea, Syria and Crimea and Venezuela and any additional countries or territories based on respective country-wide or territory-wide Sanctions being imposed by OFAC or any of the regulative bodies referred to in the definition of Restricted Persons.
 
“Restricted Person” means a person, entity or any other parties (i) located, domiciled, resident or incorporated in Restricted Countries, and/or (ii) owned or controlled by or affiliated with persons, entities or any other parties as referred to in (i).
 
“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 United Kingdom, the Council of the European Union, the United Nations or its Security Council, the United States of America or the People’s Republic of China; or
 

 (b)
otherwise imposed by any law or regulation binding on a Party or to which a Party is subject.
 
“Security Documents” means each of the Guarantee, the Account Security, the General Assignment, the Shares Security Deed, the Manager’s Undertakings, the Trust Deed and any other security documents granting a Security Interest in respect of the obligations of the Charterers under or in connection with this Charter.
 
“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;
 
“Sellers” means the Charterers acting in their capacity as seller of the Vessel under the MOA.
 
“Shareholder” means the Guarantor acting in its capacity as shareholder of the Charterers.
 
“Shares Security Deed” means the pledge of shares executed or to be executed by the Shareholder in favour of the respective Owners over the shares in the respective Charterers, in agreed form.
 
"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).
 
 
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"Term" means a period of three (3) months’ duration or any other period agreed between the Owners and the Charterers, provided that:
 

 (a)
the first Term shall commence on (and include) the Commencement Date;
 

 (b)
each subsequent Term shall commence on (and include) the last day of the preceding Term;
 

 (c)
any Term which would otherwise overrun a Payment Date shall instead end on (and include) that Payment Date; and
 

 (d)
any Term which would otherwise extend beyond the Charter Period shall instead end on (and include) the last day of the Charter Period.
 
"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 Event” means any event described in Clause 45 (Termination Events).
 
“Termination Fee” means two per cent. (2%) of the Charterhire Principal Balance provided that the Termination Purchase Price becomes payable in accordance with Clause 45.2 (other than where the Owners’ right to terminate the Charter under Clause 45.2 arises directly from a Total Loss of the Vessel).
 
“Termination Notice Date” shall have the meaning as defined under Clause 45.2.
 
"Termination Purchase Price" means, in respect of any date (for the purposes of this definition only, the "Relevant Date"), the aggregate of:
 

 (a)
the Charterhire Principal Balance as at the Relevant Date;
 

 (b)
any accrued but unpaid Variable Charterhire, as at the Relevant Date;
 

 (c)
the Termination Fee as at the Relevant Date (if applicable) (except in the case of a Total Loss);
 

 (d)
any Breakfunding Costs;
 

 (e)
any costs incurred and expenses incurred by the Owners (and the Owners’ Financier (if any)) in locating, repossessing or recovering the Vessel or collecting any payments due under this Charter or in obtaining the due performance of the obligations of the Charterers under this Charter or the other Leasing Documents and any default interest in relation thereto;
 

 (f)
any direct losses and liabilities and documented costs and expenses (including, without limitation, legal fees) incurred by the Owners in connection with the termination of this Charter under Clause 45 (Termination Events); and
 

 (g)
all other outstanding amounts payable under the Leasing Documents together with any applicable interest thereon.
 
"Third Party Approved Manager” means any Approved Manager not being a subsidiary of the Guarantor.
 
“Total Loss” means:
 
 
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(a)
actual, constructive, compromised, agreed or arranged total loss of the Vessel; or
 

 (b)
any Requisition of the Vessel unless the Vessel is returned to the full control of the Borrower within forty five (45) days of such Requisition.
 
“Total Loss Date” means:
 

 (a)
in the case of an actual loss of the Vessel, the date on which it occurred or, if that is unknown, the date when the Vessel was last heard of;
 

 (b)
in the case of a constructive, compromised, agreed or arranged total loss of the Vessel, the earlier of:
 

 (i)
the date on which a notice of abandonment is given to the insurers; and
 

 (ii)
the date of any compromise, arrangement or agreement made by or on behalf of the Owners with the insurers in which the insurers agree to treat the Vessel as a Total Loss;
 

 (c)
in the case of any other type of Total Loss, the date (or the most likely date) on which it appears to the Owners that the event constituting the total loss occurred.
 
"Trust Deed" means a trust deed dated on or around the date of this Charter entered into between the Owners, the Other Owners, the Charterers, the Other Charterers, the Guarantor, the Shareholder and the Approved Managers  which, inter alia, sets out the obligations of the Owners or any Other Owner (as the case may be) in respect of holding on trust all moneys or other assets received or recovered by or on behalf of the Owners and the Other Owners by virtue of any Security Interest or other rights granted to the Owners and/or Other Owners under or by virtue of the Security Documents and/or Other Security Documents.
 
"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 United States of America or (b) a person some or all of whose payments under the Leasing Documents are from sources within the United States for United States federal income tax purposes.
 
"Variable Charterhire" means, in relation to a Payment Date, the interest component of charterhire payable calculated by applying the applicable Interest Rate for the relevant Term to the Charterhire Principal Balance as at such date immediately prior to such Payment Date (and in the case of the first Payment Date, on the Net Purchase Price as of the Commencement Date).
 
“Vessel” means the bulk carrier named “Kinokawa Maru” (to be renamed “Iconship”) with IMO number 9641895.
 
61.2
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 and, if required by the Owners in their sole discretion, the Owners’ Financier;
 
 
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“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;
 
“contingent liability” means a liability which is not certain to arise and/or the amount of which remains unascertained;
 
“continuing” means, in relation to any Termination Event, a Termination Event which has not been waived by the Owners and in relation to any Potential Termination Event, a Potential Termination Event which has not been waived by the Owners or remedied to the satisfaction of the Owners;
 
“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, more than fifty one per cent. (51%), 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;
 
“cost of funds”, unless a contrary indication appears, in relation to the Charterhire Principal Balance or any part thereof, means the average cost (determined either on an actual or a notional basis) which the Owners would incur if it were to fund, from whatever source(s) they may reasonably select, an amount equal to the amount of the Charterhire Principal Balance or that part thereof for a period equal in length to the Term of the Charterhire Principal Balance or that part thereof.
 
“document” includes a deed; also a letter, fax or telex;
 
“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 61.3;
 
“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;
 
 
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“protection and indemnity risks” means the usual risks covered by a protection and indemnity association which is a member of the International Group of P&I 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;
 
“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;
 
“subsidiary” has the meaning given in Clause 61.4; 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.
 
61.3
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 preceding the numerically corresponding day if the numerically corresponding day is not a Business 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.
 
61.4
Meaning of “subsidiary”. A company (S) is a subsidiary of another company (P) if:
 

 (a)
a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or
 

 (b)
P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or
 

 (c)
P has the direct or indirect power to appoint or remove a majority of the directors of S; or
 

 (d)
P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P; or
 

 (e)
and any company of which S is a subsidiary is a parent company of S.
 
61.5
In this Charter:
 

 (a)
references to a Pertinent 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;
 
 
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(b)
references to, or to a provision of, a Pertinent 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; and
 

 (d)
words denoting the singular number shall include the plural and vice versa.
 
61.6
Headings.  In interpreting a Pertinent Document or any provision of a Pertinent Document, all clauses, sub-clauses and other headings in that and any other Pertinent Document shall be entirely disregarded.
 
 
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SCHEDULE 1

Acceptance Certificate

ICON OCEAN NAVIGATION CO. (the “Charterers”) hereby acknowledges that at          hours on          , there was delivered to, and accepted by, the Charterers the Vessel known as m.v. “ICONSHIP”, registered in the name of HAO CANCER LIMITED (the “Owners”) under the flag of the Republic of Liberia with official number ___________ under a bareboat charter dated ____________________ (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 Clause 47 (Representations and Warranties) of the Charter remain correct and that no Termination Event (as defined in the Charter) has occurred and is continuing at the date of this Acceptance Certificate.
 

  
Name:
  
Title: Attorney-in-fact
  
for and on behalf of
  
ICON OCEAN NAVIGATION CO.
Date:
  

 
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SCHEDULE 2
 
PART A

The following are the documents referred to in Clause 34.2(e)(i):

1
Corporate Authority
 
1.1
A copy of the constitutional documents of each Obligor.
 
1.2
If required, a copy of the resolutions of the board of directors (or equivalent) of the Guarantor and the Charterers
 
(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)
authorizing 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 applicable, a copy of the power of attorney of any party (other than any Approved Sub-charterer) to a Leasing Document 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 the Charterers, approving the terms of, and the transactions contemplated by such Leasing Document.
 
1.6
A certificate of an officer or authorized signatory of each Obligor party to a Leasing Document 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
Duly executed copies of each Leasing Document (other than the General Assignment, the Manager’s Undertakings, the Shares Security Deed, the Account Security and the Trust Deed) and of each document to be delivered under each of them.
 
2.2
Agreed forms of the General Assignment, the Manager’s Undertakings, the Shares Security Deed, the Account Security and the Trust Deed, and of each document to be delivered under each of them.
 
3
Valuation(s) of the Vessel
 
Valuation(s) of the Vessel, addressed to the Owners and dated not earlier than thirty (30) days before the Commencement Date indicating that the Vessel’s Market Value is not less than 120% of the Net Purchase Price.
 
 
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4
Vessel Documents
 
4.1
A copy of each executed Approved Management Agreement establishing that the Vessel will, as from the Commencement Date, be managed by such Approved Manager and approved by the Owners.
 
4.2
A copy of the Document of Compliance of the relevant Approved Technical Manager in respect of technical management of the Vessel.
 
5
Legal opinions
 
5.1
An agreed form legal opinion by English legal advisers to the Owners on such matters on the laws of England in relation to the documents listed in paragraphs 2.1 and 2.2 of Part A of this Schedule, in form and substance acceptable to the Owners.
 
5.2
Agreed forms of legal opinions by lawyers appointed by the Owners on such matters relating to the documents listed in paragraphs 2.1 and 2.2 of Part A of this Schedule, concerning the laws of Liberia, Marshall Islands, Greece and such other relevant jurisdictions as the Owners may require, in form and substance acceptable to the Owners.
 
6
Vessel Insurances
 
6.1
Agreed form of letters of undertaking and certificates of entry (as the case may be) relating to insurances as set out in Clause 39 (Insurance) acknowledged by the relevant insurer, insurance broker, protection and indemnity association or war risks association (as the case may be).
 
6.2
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.
 
7
Approved Sub-charter
 
Copies of the relevant Approved Sub-charter to be in force and effect as at the Commencement Date.
 
8
Payment Notice
 
A duly completed Payment Notice to be received by the Owners not later than two (2) Business Days (or such other shorter period agreed with the Owners) prior to the Prepositioning Date.
 
9
Sellers’ payment of balance early purchase price
 
Evidence that the Sellers have paid the Delivery Shortfall (as defined under the MOA) not later than one (1) Business Day prior to the Prepositioning Date in accordance with Clause 18 of the MOA.

10
Others
 
10.1
Evidence that the Earnings Account has been opened.
 
10.2
Copies of the Original Financial Statements.
 
10.3
Evidence that the Handling Fee (if due) and any fees, costs and expenses then due from the Charterers to the Owners under the Leasing Documents have been paid to and received by, or will be paid to and received by, the Owners.
 
 
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10.4
Such evidence relating to a Relevant Person 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 Pertinent Documents.
 
10.5
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 documents listed in paragraphs 2.1 and 2.2 of Part A of this Schedule or for the validity and enforceability of such documents.
 
10.6
If required, evidence that any process agent referred to under the Leasing Documents has accepted its appointment.
 
10.7
Such other information and documents as the Owners may require by giving reasonable notice to the Charterers.
 
 
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PART B

The following are the documents referred to in Clause 34.2(e)(ii):

1
Security Documents
 
Duly executed copies of each of the General Assignment, the Managers’ Undertakings, the Shares Security Deed, the Account Security and the Trust Deed and of each document to be delivered under each of them.
 
2
Vessel Documents in relation to Title
 
Documentary evidence that the Vessel:
 
(a)
is or will be definitively registered in the name of the Owners under the Flag State;
 
(b)
is or will be in the absolute and unencumbered ownership of the Owners; and
 
(c)
has been or will be unconditionally delivered by the Sellers to the Buyers pursuant to the terms of the MOA.
 
3
Vessel Document
 
A copy of the Vessel’s class certificate evidencing that the Vessel maintains such classification (free of any overdue recommendations and conditions) as is acceptable to the Owners.

4
Others
 
4.1
Evidence that any fees, costs and expenses then due from the Charterers to the Owners under the Leasing Documents have been paid to and received by, or will be paid to and received by, the Owners, on Delivery of the Vessel.
 
4.2
Such other documents as the Owners may reasonably require by giving two (2) Business Days' prior written notice to the Charterers.
 
 
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PART C

The following are the documents referred to in Clause 34.2(e)(iii):

1
Vessel Documents
 
Not later than 2 Business Days from the Commencement Date, 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).
 
2
Registration of security
 
Documentary evidence that, if applicable, the Security Interests intended to be created by the Security Documents have been duly perfected within the time periods as set out under applicable law.
 
3
Legal opinions
 
Not later than three (3) Business Days after the Commencement Date, issued signed copies of the legal opinions referred to in paragraphs 5.1 and 5.2 of Schedule 2 Part A.
 
4
Insurances
 
(a)
Not later than fifteen (15) 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 (Insurance) 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 6.1 of Schedule 2 Part A.
 
(b)
Not later than twenty (20) Business Days after the Commencement Date, the signed insurance report in the form agreed under paragraph 6.2 of Schedule 2 Part A.
 
 
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EXECUTION PAGE
 
OWNERS

SIGNED BY
)
for and on behalf of
) /s/ Yang Guangyi
HAO CANCER LIMITED
) Attorney-in-fact
in the presence of
)
   
Witness’ signature:     /s/ Yixin Zhang
)
Witness’ name: Yixin Zhang
)
Witness’ address:
)
   16/F, Hangrong Mansion, 1481 Guozhan Road, Pudong, Shanghai, China

CHARTERERS

SIGNED BY  Stavros Gyftakis
)
attorney-in-fact
)   /s/ Stavros Gyftakis
for and on behalf of
)
ICON OCEAN NAVIGATION CO.
)
in the presence of
)
   
Witness’ signature:
)
Witness’ name: Maria Moschopoulou
) /s/ Maria Moschopoulou
Witness’ address: 154 Vouliagmenis Avenue,
)
   16674 Glyfada, Athens Greece
  


 
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EX-4.38 11 ef20039029_ex4-38.htm EXHIBIT 4.38
Exhibit 4.38

EXECUTION VERSION

Dated _____________________

SEANERGY MARITIME HOLDINGS CORP.
as Guarantor

– and –

[_____]
as Owner


GUARANTEE


relating to a Bareboat Charter in respect of the vessel named m.v. [______] with IMO Number [____]

dated ____________________



INDEX
 
CLAUSE
  
PAGE
     
1
INTERPRETATION
1
     
2
GUARANTEE
2
     
3
LIABILITY AS PRINCIPAL AND INDEPENDENT DEBTOR
2
     
4
EXPENSES
 3
     
5
ADJUSTMENT OF TRANSACTIONS
4
     
6
PAYMENTS
4
     
7
INTEREST
5
     
8
SUBORDINATION
5
     
9
ENFORCEMENT
6
     
10
REPRESENTATIONS AND WARRANTIES
6
     
11
UNDERTAKINGS
9
     
12
FINANCIAL COVENANTS
12
     
13
JUDGMENTS AND CURRENCY INDEMNITY
13
     
14
SET‑OFF
14
     
15
SUPPLEMENTAL
14
     
16
ASSIGNMENT
15
     
17
NOTICES
16
     
18
INVALIDITY OF LEASING DOCUMENTS
16
     
19
CONFIDENTIALITY
17
     
20
INCORPORATION OF BAREBOAT CHARTER PROVISIONS
18
     
21
GOVERNING LAW AND ARBITRATION
18
     
SCHEDULE 1
20
   
FORM OF COMPLIANCE CERTIFICATE
20
   
EXECUTION PAGE
21
 

THIS GUARANTEE is made on ____________________
 
BETWEEN
 
(1)
SEANERGY MARITIME HOLDINGS CORP., a corporation incorporated under the laws of the Republic of the Marshall Islands with registration number 27721 whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (the “Guarantor”); and
 
(2)
[____], a corporation incorporated under the laws of the [____] with registration number [____] whose registered address is at [_____] (the “Owner” which expression includes its successors and assigns).
 
BACKGROUND
 
(A)
By a memorandum of agreement dated _________________ (as amended and supplemented from time to time, the “MOA”) and made between (i) [_____] (the “Bareboat Charterer”) as sellers and (ii) the Owner as buyers, the Bareboat Charterer has agreed to sell and deliver and the Owner has agreed to purchase and accept the legal and beneficial title of the Vessel pursuant to the terms and conditions contained therein.
 
(B)
By a bareboat charterparty dated _________________  (as amended and supplemented from time to time, the “Bareboat Charter”) and made between (i) the Bareboat Charterer as bareboat charterers and (ii) the Owner as owner, the Owner has agreed to bareboat charter the Vessel to the Bareboat Charterer pursuant to the terms and conditions contained therein.
 
(C)
The Guarantor is the direct shareholder of the Bareboat Charterer and directly holds all of the issued shares in the Bareboat Charterer.
 
(D)
It is one of the conditions precedent to the purchase of the Vessel by the Owner from the Bareboat Charterer under the MOA and the subsequent chartering of the Vessel by the Owner to the Bareboat Charterer under the Bareboat Charter that the Guarantor enters into this Deed.
 
(E)
This Guarantee is the Guarantee referred to in the Bareboat Charter.
 
IT IS AGREED as follows:
 
1
INTERPRETATION
 
1.1
Defined expressions.  Words and expressions defined in the Bareboat Charter shall have the same meanings when used in this Guarantee unless the context otherwise requires.
 
1.2
Construction of certain terms.
 
In this Guarantee:
 
“bankruptcy” includes a liquidation, receivership or administration and any form of suspension of payments, arrangement with creditors or reorganisation under any corporate or insolvency law of any country.
 
“Compliance Certificate” means a certificate in the form set out in Schedule 1 (Form of Compliance Certificate) or in any other form agreed between the Guarantor and the Owner.
 
“Party” means a party to this Guarantee.
 

“Security Period” means the period starting on the date of this Guarantee and ending on the date on which the Owner is satisfied that all present and future liabilities of the Bareboat Charterer under or in connection with the Leasing Documents have been irrevocably paid in full.
 
2
GUARANTEE
 
2.1
Guarantee and indemnity.
 
The Guarantor unconditionally and irrevocably:
 
(a)
guarantees the due payment of all amounts payable by the Bareboat Charterer under or in connection with the Leasing Documents (or any of them) to which the Bareboat Charterer is a party;
 
(b)
guarantees the punctual performance by the Bareboat Charterer of all the Bareboat Charterer’s obligations under or in connection with the Leasing Documents (or any of them) to which the Bareboat Charterer is a party;
 
(c)
undertakes to pay to the Owner, within three (3) Business Days from the Owner’s demand as if it was the principal obligor, any such amount which is not paid by the Bareboat Charterer when due and payable under or in connection with the Leasing Documents (or any of them) taking into account any grace period for such payment as may be applicable under the terms of the Leasing Documents; and
 
(d)
undertakes to fully indemnify, as an independent and primary obligation, the Owner within three (3) Business Days from its demand in respect of all documented claims, expenses, liabilities, costs and losses which are made or brought against or incurred by the Owner as a result of or in connection with any obligation or liability of the Bareboat Charterer under the Leasing Documents to which the Bareboat Charterer is a party and/or any obligation or liability guaranteed by the Guarantor being or becoming unenforceable, invalid, void or illegal; and the amount recoverable under this indemnity shall be equal to the amount which the Owner would otherwise have been entitled to recover under the Leasing Documents to which the Bareboat Charterer is a party.
 
2.2
No limit on number of demands.
 
The Owner may serve more than one demand under Clause 2.1 (Guarantee and indemnity).
 
2.3
Guarantee of whole amount.
 
This Guarantee shall be construed and take effect as a guarantee of all amounts due to the Owner under the Leasing Documents (or any of them) to which the Bareboat Charterer is a party.
 
3
LIABILITY AS PRINCIPAL AND INDEPENDENT DEBTOR
 
3.1
Principal and independent debtor.
 
The Guarantor shall be liable under this Guarantee as a principal and independent debtor and accordingly it shall not have, as regards this Guarantee, any of the rights or defences of a surety.
 
3.2
Waiver of rights and defences.
 
Without limiting the generality of Clause 3.1 (Principal and independent debtor), the Guarantor shall neither be discharged by, nor have any claim against the Owner in respect of:
 
2
(a)
any time, waiver or consent granted to, or composition with, any Obligor or other person;
 
(b)
the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Guarantor and its subsidiaries;
 
(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 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 an Obligor or any other person;
 
(e)
any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Leasing 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 Leasing Document or other document or security;
 
(f)
any unenforceability, illegality or invalidity of any obligation of any person under any Leasing Document or any other document or security; or
 
(g)
any insolvency or similar proceedings.
 
3.3
Immediate recourse.
 
The Guarantor waives any right it may have of first requiring the Owner 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 Leasing Document or to enforce any Security Interests granted under the Security Documents) before claiming or commencing proceedings under this Guarantee.  This waiver applies irrespective of any law or any provision of a Leasing Document to the contrary.
 
3.4
Appropriations.
 
Until all amounts which may be or become payable by the Obligors under or in connection with the Leasing Documents have been irrevocably paid in full, the Owner may refrain from applying or enforcing any other moneys, security or rights held or received by the Owner 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 Guarantor shall not be entitled to the benefit of the same.
 
3.5
Guarantor Intent
 
Without prejudice to the generality of Clause 3.2 (Waiver of rights and defences), the Guarantor expressly confirms that it intends that this Guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Leasing Documents.
 
4
EXPENSES
 
4.1
Costs of preservation of rights, enforcement etc.
 
The Guarantor shall pay to the Owner within three (3) Business Days of its demand the amount of all documented expenses (including, without limitation, out of pocket expenses and legal fees) incurred by the Owner in connection with the enforcement of, or the preservation of any rights under this Guarantee or any other Leasing Document, including any advice, claim or proceedings relating to this Guarantee or any other Leasing Document.
 
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4.2
Fees and expenses payable under Bareboat Charter.
 
Clause 4.1 (Costs of preservation of rights, enforcement etc.) is without prejudice to the Guarantor’s liabilities in respect of the Bareboat Charterer’s obligations under clause 42 (fees and expenses) of the Bareboat Charter.
 
5
ADJUSTMENT OF TRANSACTIONS
 
5.1
Reinstatement of obligation to pay.
 
The Guarantor shall pay to the Owner within three (3) Business Days from its demand any amount which the Owner is required, or agrees, to pay pursuant to any claim by, or settlement with, a trustee in bankruptcy of the Bareboat Charterer on the ground that the Bareboat Charter (as the case may be), or a payment by the Bareboat Charterer or other Relevant Person , was invalid or on any similar ground.
 
6
PAYMENTS
 
6.1
Method of payments.
 
Any amount due under this Guarantee shall be paid:
 
(a)
in immediately available funds;
 
(b)
to such account as the Owner may from time to time notify to the Guarantor;
 
(c)
without any form of set‑off (save as otherwise agreed under the Bareboat Charter), cross‑claim or condition; and
 
(d)
free and clear of any tax deduction or withholding for or on account of any tax payable under the laws of its Relevant Jurisdictions except a tax deduction or withholding which the Guarantor is required by law to make.
 
6.2
Grossing-up for taxes.
 
If the Guarantor is required by law to make a tax deduction, the amount due to the Owner shall be increased by the amount necessary to ensure that the Owner receives and retains a net amount which, after the tax deduction, is equal to the full amount that it would otherwise have received.
 
6.3
Indemnity and evidence of payment of taxes.
 
(a)
The Guarantor shall fully indemnify the Owner within three (3) Business Days of the Owner’s demand in respect of all documented claims, expenses, liabilities and losses incurred by the Owner by reason of any failure of the Guarantor to make any tax deduction or by reason of any increased payment not being made on the due date for such payment in accordance with Clause 6.2 (Grossing-up for taxes).
 
(b)
Within thirty (30) days after making tax deduction, the Guarantor shall deliver to the Owner any receipts, certificates or other documentary evidence satisfactory to the Owner that the tax had been paid to the appropriate taxation authority.
 
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7
INTEREST
 
7.1
Accrual of interest.
 
Any amount due under this Guarantee shall carry interest following the date on which the Owner demands payment of it from the Guarantor until it is actually paid, unless interest on that same amount also accrues under the relevant Leasing Document.
 
7.2
Calculation of interest.
 
Subject to Clause 7.1, interest on any due but unpaid amounts under this Guarantee shall be calculated and accrue in the same way as interest under clause 36.10 of the Bareboat Charter, as applicable.
 
7.3
Guarantee extends to interest payable under Leasing Documents.
 
For the avoidance of doubt, it is confirmed that this Guarantee covers all interest payable under the Leasing Documents.
 
8
SUBORDINATION
 
8.1
Subordination of rights of Guarantor.
 
All rights which the Guarantor at any time has (whether in respect of this Guarantee or any other transaction) against the Bareboat Charterer or any other Obligor or any Other Charterer or their respective assets shall be fully subordinated to the rights of the Owner under the Leasing Documents until the end of the Security Period and unless the Owner otherwise directs, the Guarantor will not exercise any rights which it may have (whether in respect of any Leasing Document to which it is a party or any other transaction) by reason of performance by it of its obligations under the Leasing Documents or by reason of any amount being payable, or liability arising, under this Guarantee:
 
(a)
to be indemnified by an Obligor or any Other Charterer;
 
(b)
to claim any contribution from any third party providing security for, or any other guarantor of, any Obligor’s ’obligations under the Leasing Documents or any Other Charterer’s obligations under the Leasing Documents (as defined in the Other Charters);
 
(c)
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Owner under the Leasing Documents or of any other guarantee or security taken pursuant to, or in connection with, the Leasing Documents by the Owner;
 
(d)
to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which the Guarantor has given a guarantee, undertaking or indemnity under Clause 2.1 (Guarantee);
 
(e)
to exercise any right of set-off against any Obligor or Other Charterer; and/or
 
(f)
to claim or prove as a creditor of any Obligor or Other Charterer in competition with the Owner.
 
8.2
Turnover.
 
If the Guarantor receives any benefit, payment or distribution in relation to any of the rights referred to in Clause 8.1 (Subordination of rights of Guarantor) it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Owner by the Obligors under or in connection with the Leasing Documents to be repaid in full on trust for the Owner and shall promptly pay or transfer the same to the Owner for application in accordance with the Leasing Documents.
 
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9
ENFORCEMENT
 
9.1
No requirement to commence proceedings against Bareboat Charterer.
 
The Owner will not need to commence any proceedings under, or enforce any Security Interest created by any Leasing Document before claiming or commencing proceedings under this Guarantee.
 
9.2
Conclusive evidence of certain matters.
 
However, as against the Guarantor:
 
(a)
any judgment or order of a court in England, the Republic of Liberia or the Republic of the Marshall Islands or any arbitral award of the arbitration in London in connection with any Leasing Document; and
 
(b)
any statement or admission of the Bareboat Charterer in connection with any Leasing Document,
 
shall be binding and conclusive as to all matters of fact and law to which it relates.
 
9.3
Suspense account.
 
The Owner may, for the purpose of claiming or proving in an insolvency of any Relevant Person (other than any Approved Sub-charterer which is not a member of the Group), place any sum received or recovered under or by virtue of this Guarantee on a separate interest bearing suspense or other nominal account without applying it in satisfaction of the Bareboat Charterer’s or Guarantor’s obligations under any Leasing Document.
 
10
REPRESENTATIONS AND WARRANTIES
 
10.1
General.
 
The Guarantor represents and warrants to the Owner, as at the date of this Guarantee and throughout the Charter Period, as follows.
 
10.2
Status.
 
(a)
The Guarantor is duly incorporated and validly existing and in good standing under the laws of the Republic of the Marshall Islands.
 
(b)
The Guarantor is not a US Tax Obligor.
 
10.3
Corporate power.
 
The Guarantor has the corporate capacity, and has taken all corporate action and obtained all consents, approvals, authorisations, licenses or permits necessary for it:
 
(a)
to execute this Guarantee or any other Leasing Document to which it is a party; and
 
(b)
to make all the payments contemplated by, and to comply with, this Guarantee or any other Leasing Document to which it is a party.
 
10.4
Consents in force.
 
All the consents, approvals, authorisations, licenses or permits referred to in Clause 10.3 (Corporate power) remain in force and nothing has occurred which makes any of them liable to revocation.
 
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10.5
Legal validity.
 
This Guarantee and the other Leasing Documents to which it is a party constitute the Guarantor’s legal, valid and binding obligations enforceable against the Guarantor in accordance with their terms subject to any relevant insolvency laws affecting creditors’ rights generally.
 
10.6
No third party Security Interests.
 
Without limiting the generality of Clause 10.5 (Legal validity), at the time of the execution and delivery of this Guarantee and any other Security Document to which the Guarantor is a party:
 
(a)
the Guarantor will have the right to create all the Security Interests which the Security Documents purport to create; and
 
(b)
no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates.
 
10.7
No conflicts.
 
The execution by the Guarantor of this Guarantee and the other Leasing Document to which it is a party and its compliance with this Guarantee and such other Leasing Documents will not involve or lead to a contravention of:
 
(a)
any law or regulation; or
 
(b)
the constitutional documents of the Guarantor; or
 
(c)
any contractual or other obligation or restriction which is binding on the Guarantor or any of its assets.
 
10.8
No withholding taxes.
 
All payments which the Guarantor is liable to make under this Guarantee and the other Leasing Documents to which it is a party may be made without deduction or withholding for or on account of any tax payable under any law of any Relevant Jurisdiction of the Guarantor.
 
10.9
No default.
 
No Termination Event or Potential Termination Event has occurred and is continuing.
 
10.10
Information.
 
All information which has been provided in writing by or on behalf of the Guarantor to the Owner in connection with any Leasing Document satisfies the requirements of Clause 11.2 (Information provided to be accurate); all audited and unaudited accounts which have been so provided satisfies the requirements of Clause 11.4 (Form of financial statements); and there has been no material adverse effect in the financial position or state of affairs of the Guarantor from that disclosed in the latest of those accounts.
 
10.11
No litigation.
 
No legal or administrative action involving the Guarantor which involves claim(s) amounting in aggregate to more than US$5,000,000 has been commenced or taken.
 
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10.12
Sanction.
 
The Guarantor and each other Obligor and their respective directors, officers or, to the best of their knowledge (after due and careful enquiry), employees or any person acting on its behalf is in compliance with all Sanctions laws, and none of them:
 
(a)
is a Restricted Person;
 
(b)
has been or is currently being investigated on compliance with Sanctions;
 
(c)
has received notice of or is aware of any claim, action, suit or proceeding against any of them with respect of Sanctions; and
 
(d)
has not taken any action to evade the application of Sanctions.
 
10.13
Anti-Money Laundering and other Laws.
 
The Guarantor and each other Obligor is not in breach of Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws and each Relevant Person has instituted and maintained systems, controls, policies and procedures designed to:
 
(a)
prevent and detect incidences of bribery and corruption, money-laundering and terrorism financing; and
 
(b)
promote and achieve compliance with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws.
 
10.14
Provisions of Leasing Documents.
 
The Guarantor is fully familiar with and agrees with all provisions of the Leasing Documents to which the Bareboat Charterer is a party.
 
10.15
No waiver.
 
No oral or written statement has been made to the Guarantor by or on behalf of the Owner or any other person which could be construed as a waiver of any provisions of this Guarantee or a statement of intention not to enforce this Guarantee in accordance with its terms.
 
11
UNDERTAKINGS
 
11.1
General.
 
The Guarantor undertakes with the Owner to comply with the following provisions of this Clause 11 (Undertakings) at all times during the Charter Period, except as the Owner may otherwise permit.
 
11.2
Information provided to be accurate.
 
All financial and other information which is provided in writing by or on behalf of the Guarantor under or in connection with this Guarantee will be true and not misleading and will not omit any material fact or consideration.
 
11.3
Provision of financial statements.
 
The Guarantor will send to the Owner:
 
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(a)
as soon as possible, but in no event later than one hundred and eighty (180) days after the end of each financial year of the Guarantor (beginning with the financial year ending 31 December 2023), the audited consolidated annual financial reports of the Guarantor for that financial year; and
 
(b)
as soon as possible, but in no event later than ninety (90) days after the end of each half-year of the Guarantor, the unaudited financial reports of the Guarantor certified as to their correctness by an officer of the Guarantor.
 
11.4
Form of financial statements.
 
All accounts (audited and unaudited) delivered under Clause 11.3 (Provision of financial statements) will:
 
(a)
be prepared in accordance with all applicable laws and generally accepted accounting principles consistently applied;
 
(b)
give a true and fair view of (in respect of the audited and unaudited accounts) or fairly representing (in the case of the management accounts) the state of affairs of the Guarantor at the date of those accounts and of their profit for the period to which those accounts relate;
 
(c)
fully disclose or provide for all significant liabilities of the Guarantor and its subsidiaries; and
 
(d)
if not in the English language, be accompanied by an English translation duly certified as to its correctness.
 
11.5
Shareholder and creditor notices.
 
Following the occurrence of a Termination Event which is continuing, the Guarantor will send the Owner, at the same time as they are despatched, copies of all notices and minutes relating to any of its extraordinary shareholders’ meetings which are despatched to the Guarantor’s shareholders or creditors or any class of them.
 
11.6
Consents.
 
The Guarantor will maintain in force and promptly obtain or renew, and will, upon the request of the Owner, promptly send certified copies to the Owner of, all consents required:
 
(a)
for the Guarantor to perform its obligations under this Guarantee and any other Leasing Document to which it is a party; and
 
(b)
for the validity or enforceability of this Guarantee and any other Leasing Document to which it is a party,
 
and the Guarantor will comply with the terms of all such consents.
 
11.7
Maintenance of Security Interests.
 
The Guarantor will:
 
(a)
at its own cost, do all that it reasonably can to ensure that any Security Document to which it is a party validly creates the obligations and the Security Interests which it purports to create; and
 
(b)
without limiting the generality of paragraph (a) above, at its own cost, promptly register, file, record or enroll any Security Document to which it is a party with any court or authority in all Relevant Jurisdictions, pay any stamp, registration or similar tax in all Relevant Jurisdictions in respect of any Security Document to which it is a party, give any notice or take any other step which may be or become necessary or desirable for any Security Document to which it is a party to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.
 
9
11.8
Notification of litigation.
 
The Guarantor will provide, and will procure that each other Obligor shall provide, the Owner with details of any legal, arbitral or administrative action involving the Guarantor or such other Obligor or the Vessel as soon as such action is instituted or it becomes apparent to the Guarantor or such other Obligor (as the case may be) that it is likely to be instituted and is likely to have a Material Adverse Effect on the ability of the Guarantor or such other Obligor (as the case may be) to perform their obligations under each Leasing Document to which they are respectively a party.
 
11.9
Notification of default.
 
The Guarantor will notify the Owner as soon as the Guarantor becomes aware of:
 
(a)
the occurrence of a Termination Event or a Potential Termination Event; or
 
(b)
any matter which indicates that a Termination Event or a Potential Termination Event may have occurred,
 
and will thereafter keep the Owner fully up-to-date with all developments.
 
11.10
Maintenance of status.
 
The Guarantor will maintain its separate corporate existence as a corporation and remain in good standing under the laws of the Republic of the Marshall Islands.
 
11.11
Negative Pledge.
 
The Guarantor shall procure that the Bareboat Charterer will not, create or permit to arise any Security Interest over any of the Bareboat Charterer’s assets present or future except Security Interests created or permitted by the Security Documents.
 
11.12
Pari passu.
 
The Guarantor shall procure that its liabilities under this Guarantee will rank at least pari passu with all its other present and future unsecured liabilities, except for liabilities which are mandatorily preferred by law.
 
11.13
No disposal of assets, change of business.
 
The Guarantor:
 
(a)
shall not make any substantial change to the nature of its business or its corporate structure from that existing at the date of this Guarantee; and
 
(b)
shall procure that the Bareboat Charterer will not transfer, lease (other than in relation to the chartering of the Vessel under an Approved Sub-charter) or otherwise dispose any of its assets, whether by one transaction or a number of transactions, whether related or not, except in the usual course of its trading operations.
 
11.14
No merger etc.
 
Except with the Owners’ prior written consent (not to be unreasonably withheld) or were expressly permitted under the Leasing Documents, the Guarantor shall procure that the Bareboat Charterer will not, enter into any form of merger, sub-division, amalgamation or other reorganisation, provided that in the case of any Obligor other than the Bareboat Charterer, such merger, sub-division, amalgamation or other reorganisation is permitted so long as the Guarantor remains the surviving entity of any such process.
 
10
11.15
Sanctions.
 
The Guarantor shall comply, and shall procure that each other Obligor complies, with all applicable laws and regulations in respect of Sanctions, and in particular, they shall procure that the Bareboat Charterer effect and maintain a sanctions compliance policy to ensure compliance with all such laws and regulations implemented from time to time.
 
11.16
Trading not contrary to Sanctions.
 
The Guarantor shall procure that the Vessel shall not be employed, operated or managed in any manner which (i) is contrary to any Sanctions and in particular, the Vessel shall not be used by or to benefit any party which is a target of Sanctions and/or is a Restricted Person or trade to any area or country where trading the Vessel to such area or country would constitute or reasonably be expected to constitute a breach of any Sanctions or published boycotts imposed by any of the United Nations, the European Union, the United States of America, the United Kingdom or the People's Republic of China, (ii) would result or reasonably be expected to result in any Relevant Person or the Owner becoming a Restricted Person or (iii) would trigger the operation of any sanctions limitation or exclusion clause in any insurance documentation.
 
11.17
Compliance with Anti-Money Laundering Laws and other Laws.
 
The Guarantor:
 
(a)
shall, and shall procure that each other Obligor will, promptly notify the Owner of any non-compliance, by itself or its officers, directors, employees, consultants, agents or intermediaries, with all laws and regulations relating to Sanctions, Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws (including but not limited to notifying the Owner in writing immediately upon being aware that any Relevant Person or its shareholders, directors, officers or employees is a Restricted Person or has otherwise become a target of Sanctions) as well as provide all information (once available) in relation to its business and operations which may be relevant for the purposes of ascertaining whether any of the aforesaid parties are in compliance with such laws;
 
(b)
shall, and shall procure that each other Obligor (including procuring or as the case may be, using all reasonable endeavours to procure the respective officers, directors, employees, consultants, agents and/or intermediaries of the relevant entity to do the same):
 

 (i)
comply with all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws;
 

 (ii)
maintain systems, controls, policies and procedures designed to promote and achieve ongoing compliance with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws; and
 

 (iii)
in respect of the Bareboat Charterer, not to use, or permit or authorise any person to directly or indirectly use, the Financing Amount for any purpose that would breach any Anti-Money Laundering Laws, Anti-Terrorism Financing Laws or Business Ethics Laws;
 
(c)
procure the Bareboat Charterer not to lend, invest, contribute or otherwise make available the Purchase Price to or for any other person in a manner which would result in a violation of Anti-Money Laundering Laws, Anti-Terrorism Financing Laws or Business Ethics Laws.
 
11
11.18
FATCA.
 
The Guarantor shall not, and shall procure that the Bareboat Charterer will not become a US Tax Obligor.
 
11.19
Maintenance of ownership of Bareboat Charterer.
 
The Guarantor shall remain the legal and beneficial owner of all the issued and allotted shares of the Bareboat Charterer.
 
12
FINANCIAL COVENANTS
 
12.1
Financial covenants.
 
The Guarantor shall ensure that on each Testing Date and for the relevant Accounting Period throughout the Charter Period:
 
(a)
its Cash and Cash Equivalents divided by the number of Fleet Vessels shall not be lower than US$500,000; and
 
(b)
the Leverage Ratio shall not be more than 75%.
 
For the purposes of this Clause 12.1 (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 Owner in accordance with Clause 11.3 (Provision of financial statements).
 
"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 11.3 (Provision of financial statements).
 
“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 Market Value as set out in the Bareboat Charter.
 
“Fleet Vessels” means all vessels owned by the Guarantor and its subsidiaries.
 
“Group” means the Guarantor and its subsidiaries.
 
“Leverage Ratio” means, as at the date of calculation, the ratio (expressed as a percentage) of Net Debt to Market Value Adjusted Total 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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“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.
 
“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.
 
"Testing Date" means 30 June and 31 December of each financial year.
 
"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.
 
"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.
 
12.2
Compliance Certificate.
 
(a)
The Guarantor shall supply to the Owner, a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 12.1 (Financial covenants) together with:
 

 (i)
the annual consolidated accounts of the Guarantor to be provided to the Owner in accordance with Clause 11.3(a) (Provision of financial statements); and
 

 (ii)
the semi-annual consolidated accounts of the Guarantor to be provided to the Owner in accordance with Clause 11.3(b) (Provision of financial statements).
 
(b)
Each Compliance Certificate shall be signed by a director or an officer of the Guarantor.
 
13
JUDGMENTS AND CURRENCY INDEMNITY
 
13.1
Judgments relating to Leasing Documents.
 
This Guarantee shall cover any amount payable by the Bareboat Charterer under or in connection with any judgment relating to any Leasing Document.
 
13.2
Currency indemnity.
 
If any sum due from the Guarantor to the Owner under this Guarantee or under any order or judgment relating to this Guarantee has to be converted from the currency in which this Guarantee provided for the sum to be paid (the “Contractual Currency”) into another currency (the “Payment Currency”) for the purpose of:
 
(a)
making or lodging any claim or proof against the Guarantor, whether in its liquidation, any arrangement involving it or otherwise; or
 
(b)
obtaining an order or judgment from any court or other tribunal; or
 
(c)
enforcing any such order or judgment;
 
the Guarantor shall, on demand, indemnify the Owner against the loss arising when the amount of the payment actually received by the Owner is converted at the available rate of exchange into the Contractual Currency.
 
In this Clause 13.2 (Currency indemnity), the “available rate of exchange” means the rate at which the Owner is able at the opening of business (Beijing time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.
 
13
14
SET‑OFF
 
14.1
Application of credit balances.
 
The Owner may, following the occurrence of a Termination Event which is continuing, without prior notice, but notifying the Guarantor afterwards:
 
(a)
apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Guarantor at any office in any country of either an affiliate of the Owner or the Owner’s financiers in or towards satisfaction of any sum then due from the Guarantor to the Owner under this Guarantee and any other Security Document; and
 
(b)
for that purpose:
 

 (i)
break, or alter the maturity of, all or any part of a deposit of the Guarantor;
 

 (ii)
convert or translate all or any part of a deposit or other credit balance into Dollars; and
 

 (iii)
enter into any other transaction or make any entry with regard to the credit balance which the Owner considers appropriate.
 
14.2
Existing rights unaffected.
 
The Owner shall not be obliged to exercise any of its rights under Clause 14.1 (Application of credit balances); and those rights shall be without prejudice and in addition to any right of set‑off, combination of accounts, charge, lien or other right or remedy to which the Owner is entitled (whether under the general law or any document).
 
15
SUPPLEMENTAL
 
15.1
Continuing guarantee.
 
This Guarantee shall remain in force as a continuing security at all times from the date of this Guarantee up to the last day of the Security Period.
 
15.2
Rights cumulative, non-exclusive.
 
The Owner’s rights under and in connection with this Guarantee are cumulative, may be exercised as often as appears expedient and shall not be taken to exclude or limit any right or remedy conferred by law.
 
15.3
No impairment of rights under Guarantee.
 
If the Owner omits to exercise, delays in exercising or invalidly exercises any of its rights under this Guarantee, that shall not impair that or any other right of the Owner under this Guarantee.
 
15.4
Severability of provisions.
 
If any provision of this Guarantee is or subsequently becomes void, illegal, unenforceable or otherwise invalid, that shall not affect the validity, legality or enforceability of its other provisions.
 
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15.5
Guarantee not affected by other security.
 
This Guarantee shall not impair, nor be impaired by, any other guarantee, any Security Interest or any right of set-off or netting or to combine accounts which the Owner may now or later hold in connection with the Leasing Documents.
 
15.6
Guarantor bound by Leasing Documents.
 
The Guarantor agrees with the Owner to be bound by all provisions of each Leasing Document in the same way as if those provisions had been set out (with any necessary modifications) in this Guarantee.
 
15.7
Applicability of provisions of Guarantee to other Security Interests.
 
Any Security Interest which the Guarantor creates (whether at the time at which it signs this Guarantee or at any later time) to secure any liability under this Guarantee shall be a principal and independent security, and Clauses 3 (Liability as principal and independent debtor) and 18 (Invalidity of Leasing Documents) shall, with any necessary modifications, apply to it, notwithstanding that the document creating the Security Interest neither describes it as a principal or independent security nor includes provisions similar to Clauses 3 (Liability as principal and independent debtor) and 18 (Invalidity of Leasing Documents).
 
15.8
Applicability of provisions of Guarantee to other rights.
 
Clauses 3 (Liability as principal and independent debtor) and 18 (Invalidity of Leasing Documents) shall also apply to any right of set-off or netting or to combine accounts which the Guarantor creates by an agreement entered into at the time of this Guarantee or at any later time (notwithstanding that the agreement does not include provisions similar to Clauses 3 (Liability as principal and independent debtor) and 18 (Invalidity of Leasing Documents)), being an agreement referring to this Guarantee.
 
15.9
Third party rights.
 
Other than the Other Owners, a person who is not a party to this Guarantee has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Guarantee.
 
15.10
Counterpart.
 
This Guarantee 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 Guarantee.
 
15.11
Immunity.
 
The Guarantor waives any rights of sovereign immunity which it or any of its assets may enjoy in any jurisdiction and subjects itself to civil and commercial law with respect to their obligations under this Guarantee.
 
16
ASSIGNMENT
 
16.1
Assignment or transfer by Guarantor.
 
The Guarantor shall not assign any of its rights or transfer by novation of its rights and obligations under this Guarantee except with the Owner’s prior consent in writing.
 
16.2
Assignment by Owner.
 
The Owner may assign or transfer its rights under and in connection with this Guarantee to the same extent as it may do so under the Bareboat Charter.
 
15
17
NOTICES
 
17.1
Notices.
 
Any notice, certificate, demand or other communication to be served, given made or sent under or in relation to this Guarantee 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, fax or by email to the following respective addresses:
 
 
(A)
to the Owner:
 
 
 
 
 
 
c/o AVIC International Leasing Co., Ltd
16/F, Hangrong Mansion, 1481 Guozhan Road, Pudong,
Shanghai, China, 200126
 
Attention: Ryan Zhang
Ship Leasing Dept.
Tel: +86-21-22262623
Email: zhangqiang@chinaleasing.net




 
(B)
to the Guarantor:
c/o Seanergy Maritime Holdings Corp.
154 Vouliagmenis Avenue,
16674 Glyfada, Athens, Greece
 
Attention: Legal Department
Email: legal@seanergy.gr and finance@seanergy.gr
Tel: +30 210 8913520

or, if a party hereto changes its address or fax number, to such other address or fax number as that party may notify to the other.
 
17.2
Service of notices
 
Any such communication shall be deemed to have reached the Party to whom it was addressed (a) when delivered (in case of a registered letter), or (b) when actually received in readable form (in case of an email). A notice or other such communication received on a non-working day or after 5.00 p.m. in the place of receipt shall be deemed to be served on the next following working day in such place.
 
17.3
Validity of demands.
 
A demand under this Guarantee shall be valid notwithstanding that it is served:
 
(a)
on the date on which the amount to which it relates is payable by the Bareboat Charterer under a Leasing Document;
 
(b)
at the same time as the service of a notice under clause 45.2 of the Bareboat Charter;
 
and a demand under this Guarantee may refer to all amounts payable under or in connection with a Leasing Document without specifying a particular sum or aggregate sum.
 
18
INVALIDITY OF LEASING DOCUMENTS
 
18.1
Invalidity of Leasing Documents.
 
In the event of:
 
16
(a)
any Leasing Document now being or later becoming, with immediate or retrospective effect, void, illegal, unenforceable or otherwise invalid for any other reason whatsoever, whether of a similar kind or not; or
 
(b)
without limiting the scope of paragraph (a), a bankruptcy or insolvency of any Relevant Person, the introduction of any law or any other matter resulting in any Relevant Person being discharged from liability under any Leasing Document, or any Leasing Document ceasing to operate (for example, by interest ceasing to accrue),
 
this Guarantee shall cover any amount which would have been or become payable under or in connection with a Leasing Document if such Leasing Document had been and remained entirely valid, legal and enforceable, or the Bareboat Charterer had not suffered bankruptcy or insolvency, or any combination of such events or circumstances, as the case may be, and the Bareboat Charterer had remained fully liable under it for liabilities whether invalidly incurred or validly incurred but subsequently retrospectively invalidated; and references in this Guarantee to amounts payable by the Bareboat Charterer under or in connection with a Leasing Document shall include references to any amount which would have so been or become payable as aforesaid.
 
19
CONFIDENTIALITY
 
The Parties agree to keep the terms and conditions of this Guarantee (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, decree, regulation or rule, by an order of a court, tribunal or listing exchange of the Relevant Jurisdiction, provided that the disclosing Party shall give written notice of such required disclosure to the other Party prior to the disclosure;
 
(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 (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), provided that such person receiving Confidential Information shall undertake that it would not 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;
 
(e)
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 either paragraph (c) or (d) (including the employees, officers and directors thereof);
 

 (ii)
professional advisers retained by a disclosing party; or
 

 (iii)
persons advising on, providing or considering the provision of financing to the disclosing party or an affiliate,

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 19 (Confidentiality) or such other circumstances as may be permitted by all Parties; or

17
(f)
with the prior written consent of all Parties.
 
20
INCORPORATION OF BAREBOAT CHARTER PROVISIONS
 
20.1
The following provisions of the Bareboat Charter apply to this Guarantee as if they were expressly incorporated therein with any necessary modifications:
 
clause 43 (No waiver of rights);

clause 53 (no set-off or tax deduction); and
 
clause 55 (FATCA).
 
20.2
Clause 20.1 (Incorporation of Bareboat Charter provisions) is without prejudice to the application to this Guarantee of any provision of the Bareboat Charter which, by its terms, applies or relates to this Guarantee.
 
21
GOVERNING LAW AND ARBITRATION
 
21.1
This Guarantee and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.
 
21.2
Any dispute arising out of or in connection with this Guarantee (including a dispute regarding the existence, validity or termination of this Guarantee or any non-contractual obligation arising out of or in connection with this Guarantee) (a "Dispute")), shall be referred to and finally resolved by 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 21 (Governing law and arbitration). 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.
 
21.3
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 the date which the notice is delivered to the other party 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 14 days specified. If the other party does not appoint its own arbitrator and gives 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.
 
21.4
Where the reference is to three arbitrators the procedure for making appointments shall be in accordance with the procedure for full arbitration stated above.
 
21.5
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.
 
21.6
The language of the arbitration shall be English.
 
18
THIS GUARANTEE has been executed and delivered as a deed on the date stated at the beginning of this Guarantee.

19
SCHEDULE 1
 
FORM OF COMPLIANCE CERTIFICATE
 
To:
[___]

From:
SEANERGY MARITIME HOLDINGS CORP.

Date: [●]

Dear Sirs

1.
We refer to a guarantee dated [●] (“Guarantee”) issued by us in favour of you.

2.
This is the Compliance Certificate referred to under Clause 12.2 of the Guarantee. Terms defined in the Guarantee have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.

3.
We enclose with this certificate a copy of the [annual audited consolidated accounts/semi-annual consolidated accounts] of the Guarantor for the [financial year/half year] ended on [●].

4.
The accounts referred to in paragraph 3 above (i) have been prepared in accordance with all applicable laws and accounting principles consistently applied, (ii) give a true and fair view of the state of affairs of the Bareboat Charterer, the Guarantor and the Group at the date of the accounts and (iii) fully disclose or provide for all significant liabilities of the Bareboat Charterer, the Guarantor and the Group.

5.
We also enclose a spreadsheet of our calculations of the financial covenants set out in Clause 12.1 of the Guarantee.

6.
We represent and warrant that no Termination Event or Potential Termination Event has occurred as at the date of this Compliance Certificate except for the following matter or event (set out all material details or matters or events).

7.
In addition, we confirm compliance with the financial covenants set out in Clause 12.1 of the Guarantee for the [12 months/6 months] ending as at the date to which the enclosed accounts are prepared.

8.
We certify that, based on the calculations enclosed herein, as at [●]:

(a)
the book value of Cash and Cash Equivalents is [●];
 
(b)
the Leverage Ratio is [●] per cent.;
 
9.
This Compliance Certificate shall be governed by, and construed in accordance with, English law.

Signed:
  
 
     
  SEANERGY MARITIME HOLDINGS CORP.
 
20
EXECUTION PAGE
 
GUARANTOR

EXECUTED AND DELIVERED AS A DEED
)
by
)
for and on behalf of
)
SEANERGY MARITIME HOLDINGS CORP.
)
as attorney-in-fact
)
in the presence of:
)
   
Witness’ signature:
)
Witness’ name:
)
Witness’ address:
)
   
OWNER
  
   
SIGNED, SEALED AND DELIVERED
)
for and on behalf of
)
[____]
)
acting by
)
its authorised signatory
)
in the presence of:
)
   
Witness’ signature:
)
Witness’ name:
)
Witness’ address:
)


21
EX-4.39 12 ef20039029_ex4-39.htm EXHIBIT 4.39
Exhibit 4.39
 
PART II
BARECON 2001 Standard Bareboat Charter
 
 

1.        Shipbroker
ITOCHU Corporation
5-1, Kita-Aoyama 2-chome,
Minato-ku, Tokyo 107-8077, Japan
2.   Place and date
August 29, 2024
3.      Owners/Place of business (Cl.1)
Hinode Kaiun Co., Ltd. (99% ownership)
7-35-10 Hiro Koshingai, Kure-city, Hiroshima, Japan
and
Sunmarine Maritime S.A. (1% ownership)
15th Floor, Aquilino de la Guardia Street, Marbella, Panama City, Republic of Panama
 
c/o Hinode Kaiun Co.,Ltd.
Telephone: +81-823-76-6107
Email: hinodekaiun-3@utopia.ocn.ne.jp
Attention: Masataka Hanada
4.   Bareboat Charterers / Place of business (Cl.1)
        Kaizen Shipping Co.
        Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960,  Marshall Islands
 
(guaranteed by Seanergy Maritime Holdings Corp., of the Republic of the Marshall Islands)
 
 c/o 154 Vouliagmenis Avenue,
 16674 Glyfada, Greece
 Email: legal@seanergy.gr and finance@seanergy.gr
5.      Vessel’s name, call sign and flag (Cl. 1 and 3)
MV Orange Tiara (tbr Kaizenship)
Call Sign: TBA
Flag: Liberia
 
6.      Type of Vessel
Bulk carrier
7.   GT/NT
      92,758/60,504 tons
8.      When / Where built
2012
           Koyo Dockyard Co. Ltd.
9.   Total DWT (abt.) in metric tons on summer freeboard
181,396 tons
10.    Classification Society (Cl.3)
TBA or other IACS
11. Date of last special survey by the Vessel’s classification  society
 TBA
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)
 1 July 2024 – 31 October 2024 in    Charterer’s option
15.  Cancelling date (Cl.5)
 N/A
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. War-like zones, Russia, North Korea and States sanctioned by the UN, USA, EU, UK, Japan or the Vessel’s flag state are excluded. If Charterers call at a State which constitutes a breach of such sanctions, then Charterers to undertake to indemnify Owners against all losses and costs sustained as a result of such violation in accordance with Clauses 17 and 46.
21.    Charter period
    6 years from delivery
22. Charter hire (Cl. 11)
        See also Clause 44
 
Fixed part: USD288,197.9 per month or USD9,475.00 per day; plus
Floating part: Loan Outstanding Balance x (1M CME TERM SOFR + 2.50% / 360
 
        Loan Outstanding Balance as per Clause 44.
        If 1M CME TERM SOFR falls below zero, then 1M 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
1 month CME TERM SOFR plus 2.50 (two point fifty) 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.
PART II
BARECON 2001 Standard Bareboat Charter
26.    Place of payment; also state beneficiary and bank account (Cl. 11)
Beneficiary: SUNMARINE MARITIME S.A.
Banks: THE CHUGOKU BANK,LTD.,
Branch: KURE BRANCH
Address:  3-6-1,HONDORI,KURE-CITY,HIROSHIMA-PREF.,JAPAN
Swift Code: CHGKJPJZ
Account No.: 1348595
 
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)
  THE CHUGOKU BANK, LTD. Address: 2-9, Higashigosho-cho, Onomichi City, Hiroshima-Pref., Japan
 
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)
 Clause 14 does not apply.
 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)
   Three (3) 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)
  Part IV does not apply, 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)
   Madeira
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 32-49

PREAMBLE - It is mutually agreed that this Contract shall be performed subject to the conditions contained in this Charter which shall include PART I, PART II and Rider Clauses 32 to 49. 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.
 
Hinode Kaiun Co., Ltd.
Kaizen Shipping Co.
Signature (Owners)
Signature (Charterers)
 
 

/s/ Teruyoshi Hanada
/s/ Stavros Gyftakis
     
Name: Teruyoshi Hanada
Name: Stavros Gyftakis
   
Title: President
Title: Director

Sunmarine Maritime S.A.
 
Signature (Owners)
 
 
 

/s/ Teruyoshi Hanada
 
 
 
Name: Teruyoshi Hanada
 
Title: President
 

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
stated in Box 28.
 
"MOA" means the Memorandum of Agreement entered into between the Owners as buyers and the Charterers as sellers dated […] ____, 2024.
11
"Banking Days" means a day on which banks are open for transaction of business of the nature required by this Charter in Madeira, 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

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
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 commercial 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
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
154
155
156
157
158
159
160
161
162
163
164
165
166
167
   
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 or scrubber, 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 and do not devalue the market value 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
   
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 or delayed, to
242
change the flag and/or the name of the Vessel and/or Class (to be a member of IACS) during
243
the Charter Period and such expense shall be for Charterer’s account. In case Charterers do not exercise their Purchase Option set out in clause 40 and the Vessel is re-delivered to the Owners, 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. 
   
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
251
first securing the Owners’ approval thereof. Notwithstanding the above, Owners' consent will not be required for any changes (including structural changes) to the vessel, provided that such changes do not devalue the market value of the Vessel or refer to modifications that will ensure compliance with existing or upcoming environmental laws and regulations.  If the Owners
252
so agree, the Charterers shall, if the Owners so require,
253
restore the Vessel to its former condition before the
254
termination of this Charter at the Charterer’s account.
   
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, but not less
284
than once every sixty (60) calendar months or such other
285
period as may be required by the Classification Society or
286
Flag State.
287
  
   
288
11. Hire
289
(a) The Charterers shall pay hire due to the Owners
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
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
Box 22 which shall be payable monthly
295
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 request for their financing purposes.
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
  

Such insurances shall be arranged by the
365
Charterers to protect the interests of both the Owners
366
and the Charterers and the mortgagee(s) (if any), and
367
The Charterers shall be at liberty to protect under such
368
insurances the interests of any managers they may
369
appoint. Insurance policies shall cover the Owners and
370
the Charterers according to their respective interests.
371
Subject to the provisions of the Financial Instrument, if
372
any, and the approval of the Owners and the insurers,
373
the Charterers shall effect all insured repairs and shall
374
undertake settlement and reimbursement from the
375
insurers of all costs in connection with such repairs as
376
well as insured charges, expenses and liabilities to the
377
extent of coverage under the insurances herein provided
378
for.
379
The Charterers also to remain responsible for and to
380
effect repairs and settlement of costs and expenses
381
incurred thereby in respect of all other repairs not
382
covered by the insurances and/or not exceeding any
383
possible franchise(s) or deductibles provided for in the
384
insurances.
385
All time used for repairs under the provisions of sub-
386
clause 13(a) and for repairs of latent defects according
387
to Clause 3(c) above, including any deviation, shall be
388
for the Charterers’ account.
   
389
(b) 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.
390
  
391
  
392
The Owners or
393
the Charterers as the case may be shall immediately
394
furnish the other party with particulars of any additional
395
insurance effected, including copies of any cover notes
396
or policies and the written consent of the insurers of
397
any such required insurance in any case where the
398
consent of such insurers is necessary.
   
399
(c) The Charterers shall upon the request of the
400
Owners, provide reasonable information and promptly execute such
401
documents as may be reasonably required to enable the Owners to
402
comply with the insurance provisions of the Financial
403
Instrument.
   
404
(d) Subject to the provisions of the Financial Instru-
405
ment, if any, should the Vessel become an actual,
406
constructive, compromised or agreed total loss under
407
the insurances required under sub-clause 13(a), all
408
insurance payments for such loss shall be paid in accordance with clause 41 to the
409
Owners who shall distribute the moneys between 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 and the Charterers according to their respective
411
interests. The Charterers undertake to notify the Owners
412
and the mortgagee(s), if any, of any occurrences in
413
consequence of which the Vessel is likely to become a
414
total loss as defined in this Clause.
   
415
(e) The Owners shall upon the request of the
416
Charterers, promptly execute such documents as may
417
be required to enable the Charterers to abandon the
418
Vessel to insurers and claim a constructive total loss.
   
419
(f) For the purpose of insurance coverage against hull
   
420
and machinery and war risks under the provisions of
421
sub-clause 13(a), the value of the Vessel is the sum
422
indicated in Clause 41(c).
   
   
   
   
   
   
   
   
   
   
   
   
   
512
15. Redelivery
513
At the expiration of the Charter Period the Vessel shall
514
be redelivered by the Charterers to the Owners at a
515
safe and ice-free port or place as indicated in Box 16, in
516
such ready safe berth as the Charterers may direct. The
517
Charterers shall give the Owners not less than thirty
518
(30) running days’ preliminary notice of expected date,
519
range of ports of redelivery or port or place of redelivery
520
and not less than fourteen (14) running days’ definite
521
notice of expected date and port or place of redelivery.
522
Any changes thereafter in the Vessel’s position shall be
523
notified immediately to the Owners.
524
The Charterers warrant that they will not permit the
525
Vessel to commence a voyage (including any preceding
526
ballast voyage) which cannot reasonably be expected
527
to be completed in time to allow redelivery of the Vessel
528
within the Charter Period.  Notwithstanding the above,
529
should the Charterers fail to redeliver the Vessel within
530
the Charter Period, the Charterers shall pay the daily
531
equivalent to the rate of hire that stated in Box 22 (USD 9,475.0) plus 10 per cent. or to the market rate, whichever is the higher,
532
  
533
for the number of days by which the Charter Period is

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
534
exceeded.  All other terms, conditions and provisions of
535
this Charter shall continue to apply.
536
Subject to the provisions of Clause 10, the Vessel shall
537
be redelivered to the Owners in the same
538
condition and class as that in which she
539
was delivered, fair wear and tear not affecting class
540
excepted.
541
The Vessel upon redelivery shall have her survey cycles
542
up to date and trading and class certificates valid for at
543
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
   
544
16. Non-Lien
545
The Charterers will not suffer, nor permit to be continued,
546
any lien or encumbrance incurred by them or their
547
agents, which might have priority over the title and
548
interest of the Owners in the Vessel. The Charterers further
549
agree to fasten to the Vessel in a conspicuous place and to
550
keep so fastened during the Charter Period a notice reading
551
as follows:
552
“This Vessel is the property of Hinode Kaiun Co., Ltd. (99% ownership) and
553
Sunmarine Maritime S.A. (1% ownership). It is under charter to
554
Kaizen Shipping Co. and by terms of the Charter Party
555
neither the Charterers nor the Master have any right, power
556
authority to create, incur or permit to be imposed on the
557
Vessel any lien.
   
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 (including deadfreight and demurrage) 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  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-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”)

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
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
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

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
776
28. Termination
777
(a) Charterers’ Default
778
The Owners shall be entitled to withdraw the Vessel from
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 the Purchase Option set out in Clause 40 within 10 Banking 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, which shall be within 45 days of the exercise of the Purchase Option hereunder, at which point in time any default (except for any outstanding payment following a default under clause 28(a)(i), or any indemnification obligations arising from a breach of the trading restrictions under clause 28(a)(ii)(1)) 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 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

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
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
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 AGREEMENT(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 49
to be deemed incorporated to the
Bareboat Charter Party
Dated August 29, 2024
(the "Charter")
Between
Kaizen Shipping Co. (guaranteed by Seanergy Maritime Holdings Corp.) as Charterers
And
Hinode Kaiun Co., Ltd. and Sunmarine Maritime S.A. as Owners (guaranteed by Hinode Kaiun Co., Ltd.)
in respect of the vessel MV “Orange Tiara” (to be renamed Kaizenship)

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 48 to the Barecon 2001 bareboat charter dated August 29, 2024.

“Charter” means the Barecon 2001 bareboat charter dated August 29, 2024 and these Additional Clauses.

“Charter Expiry Date” means the date falling six (6) years from the Delivery Date.

“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 Balance” 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 THE CHUGOKU BANK, LTD., 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 Hinode Kaiun Co., Ltd. and Sunmarine Maritime S.A.

“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.

“Purchase Price in Case of Owners’ Default” means the price described in Clause 40.


“Quotation Day” means, in relation to any period for which 1 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 of the Vessel 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 are 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 shall be kept by the Charterers as sellers.

In the event that the Vessel is not delivered under the MOA for whatever reason, this Charter shall automatically be terminated and treated as null and void. For the avoidance of doubt, this provision shall not prejudice any rights and claims the Owners and/or the Charterers may have under the relevant provisions of the MOA.

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 shareholders 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 MOA and 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 on a "as is/where is" basis, 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 re-delivery 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 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 of cash, which sum shall be the average of two quotations for the cost of repair of the damage obtained by each of the Charterers and the Owners from a reputable shipyard in the re-delivery range.

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 and the Owners 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 familiarization 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 their purpose and business include the acquisition and bareboat chartering out of the Vessel as contemplated in this Charter and the MOA.

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, the guarantee by the Charterers’ Guarantor referred to below and the Vessel’s insurances subject to Clause 41.

The Charterers are entitled to receive a quiet enjoyment letter from the financiers of the Owners. Such quiet enjoyment letters to be on terms acceptable to the Charterers and the financiers of the Owners.


The performance of the Charterers hereunder shall be guaranteed by the Charterers' Guarantor and the performance of the Owners shall be guaranteed by Hinode Kaiun Co., Ltd.. Such guarantees shall be in the format attached hereto as Appendix A.

39.
Transfer of the Vessel
 

 (a)
Any change of ownership of the Vessel or of the ownership of the Owners during the Charter Period, excluding any such change by the application of law, shall require the Charterers' prior written approval which Charterers shall be at full discretion whether to grant or decline.


(b)
The Owners undertake that Sunmarine Maritime S.A. shall remain a wholly owned subsidiary of Hinode Kaiun Co., Ltd. during the term of this Charter. A change of control in Sunmarine Maritime S.A. 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 or delayed, 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 4th  anniversary of the Delivery Date (the "Purchase Option Price"), or in case of a default hereunder by the Owners, at any time during the Charter at a price (the "Purchase Price in Case of Owners’ Default") calculated as follows in Appendix B.

Charterers’ obligation to pay Charter Hire shall cease to apply from the actual delivery date of the Vessel under the Purchase Option.

The Charterers must give a minimum of 90 (ninety) days' written notice of their intention to buy the Vessel. The Purchase Option Price shall be paid to the Owners upon delivery of the Vessel. The Vessel shall be delivered as soon as possible and no later than 30 days after expiry of the 90 (ninety) 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 Owners agree (at the cost of the Charterers) to enter into (i) a bill of sale and (ii) a protocol of delivery and acceptance, and the Vessel shall accordingly be deemed delivered to the Charterers on the date and time set out in such protocol of delivery and acceptance (and to the extent required for such purposes the Vessel shall be deemed first to have been redelivered to the Owners). In case a financier is involved in the transaction from Charterers’ side, Owners, Charterers and Charterers’ financier shall agree a closing memo which will describe the closing mechanics, including but not limited to the remittance of the Purchase Option Price and its release to Owners.

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 and mortgages 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.


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 the P&I association is a member of the International Group of P&I Clubs;

 
(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 Balance (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 42, 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 Loan Outstanding Balance as of the date of the Total Loss,

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 USD1,000,000.00 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 1,000,000.00 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 1,000,000.00 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 and other Fees
 
Any and all reasonable and documented fees, expenses and charges incurred by the Owners in connection with the purchase and registration of the Vessel on delivery under the MOA and this Charter, including initial and annual flag state fees and legal fees for reviewing the terms of this Charter and the MOA, shall be borne by the Charterers. Any such costs to be pre-approved by the Charterers.

44.
Floating part of charter hire
 
In the charter hire structure set out in Box 22, the Floating part shall be calculated by the Loan Outstanding Balance, as per the table below, times (1 Month TERM CME SOFR plus 2.50%) times number of days during the upcoming month divided by 360 days.

1 Month TERM CME SOFR will be set on each applicable Quotation Day, will be updated on a monthly basis and shall apply only on the respective charter hire payment. Should the 1 Month TERM CME SOFR rate fall below zero, a SOFR rate equal to zero to be applied.
　　　
Loan Outstanding Balance for the calculation of floating part of charter hire
(Amounts in US$ at the beginning of each Month):
 
1st Year
1st Month
28,500,000.0
  
2nd Year
13th Month
25,041,625.0
1st Year
2nd Month
28,211,802.1
  
2nd Year
14th Month
24,753,427.1
1st Year
3rd Month
27,923,604.2
  
2nd Year
15th Month
24,465,229.2
1st Year
4th Month
27,635,406.3
  
2nd Year
16th Month
24,177,031.3
1st Year
5th Month
27,347,208.3
  
2nd Year
17th Month
23,888,833.3
1st Year
6th Month
27,059,010.4
  
2nd Year
18th Month
23,600,635.4
1st Year
7th Month
26,770,812.5
  
2nd Year
19th Month
23,312,437.5
1st Year
8th Month
26,482,614.6
  
2nd Year
20th Month
23,024,239.6
1st Year
9th Month
26,194,416.7
  
2nd Year
21st Month
22,736,041.7
1st Year
10th Month
25,906,218.8
  
2nd Year
22nd Month
22,447,843.8
1st Year
11th Month
25,618,020.8
  
2nd Year
23rd Month
22,159,645.8
1st Year
12th Month
25,329,822.9
  
2nd Year
24th Month
21,871,447.9
3rd Year
25th Month
21,583,250.0
  
4th Year
37th Month
18,124,875.0
3rd Year
26th Month
21,295,052.1
  
4th Year
38th Month
17,836,677.1
3rd Year
27th Month
21,006,854.2
  
4th Year
39th Month
17,548,479.2
3rd Year
28th Month
20,718,656.3
  
4th Year
40th Month
17,260,281.3
3rd Year
29th Month
20,430,458.3
  
4th Year
41st Month
16,972,083.3


3rd Year
30th Month
20,142,260.4
  
4th Year
42nd Month
16,683,885.4
3rd Year
31st Month
19,854,062.5
  
4th Year
43rd Month
16,395,687.5
3rd Year
32nd Month
19,565,864.6
  
4th Year
44th Month
16,107,489.6
3rd Year
33rd Month
19,277,666.7
  
4th Year
45th Month
15,819,291.7
3rd Year
34th Month
18,989,468.8
  
4th Year
46th Month
15,531,093.8
3rd Year
35th Month
18,701,270.8
  
4th Year
47th Month
15,242,895.8
3rd Year
36th Month
18,413,072.9
  
4th Year
48th Month
14,954,697.9
5th Year
49th Month
14,666,500.0
  
6th Year
61st Month
11,208,125.0
5th Year
50th Month
14,378,302.1
  
6th Year
62nd Month
10,919,927.1
5th Year
51st Month
14,090,104.2
  
6th Year
63rd Month
10,631,729.2
5th Year
52nd Month
13,801,906.3
  
6th Year
64th Month
10,343,531.3
5th Year
53rd Month
13,513,708.3
  
6th Year
65th Month
10,055,333.3
5th Year
54th Month
13,225,510.4
  
6th Year
66th Month
9,767,135.4
5th Year
55th Month
12,937,312.5
  
6th Year
67th Month
9,478,937.5
5th Year
56th Month
12,649,114.6
  
6th Year
68th Month
9,190,739.6
5th Year
57th Month
12,360,916.7
  
6th Year
69th Month
8,902,541.7
5th Year
58th Month
12,072,718.8
  
6th Year
70th Month
8,614,343.7
5th Year
59th Month
11,784,520.8
  
6th Year
71st Month
8,326,145.8
5th Year
60th Month
11,496,322.9
  
6th Year
72nd Month
8,037,947.9

45.
Charterers’ information undertaking
 
The Charterers shall obtain an appraisal report from Clarksons Platou, Braemar ACM, Fearnleys AS, Arrow Valuations, Simpson Spence & Young Limited, Howe Robinson, BRS Group, Seaborne and Allied Shipbroking or any other firm or firms of shipbrokers approved in writing by the Owners as of each last business day of March during the Charter Period and provide such report to the Owners.

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 under any sanction, prohibition or blacklist whatsoever imposed by the USA, the UK, the European union, any EU member state, the Arab Boycott League, Japan, China 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 the USA, the UK, the European union, any EU member state, the Arab Boycott League, Japan, China 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, and

(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.

The Owners and the Charterers shall indemnify the other party for any costs, damages or losses of whatsoever nature which such other party may suffer as a result of breach of this Clause 46.

47.
ETS – Emission Trading Scheme
 
Notwithstanding any other provision in this Charter, the Owners and the Charterers agree as follows:

"Emission Allowances" means an allowance, credit, quota, permit or equivalent, representing a right of a vessel to emit a specified quantity of greenhouse gas emissions recognised by the Emission Scheme, or generally in connection with emissions, carbon reduction or other environmental or sustainability national or international laws or regulations applicable to the Vessel and her operation.

"Emission Scheme" means a greenhouse gas emissions trading scheme and any emissions, carbon reduction or other environmental or sustainability national or international laws or regulations applicable to the Vessel and her operation, which for the purposes of this Clause 48 shall include (without limitation) the European Union Emissions Trading System and any other similar systems imposed by any similar or equivalent international, regional, national or local scheme implemented by the IMO or any other lawful national or other authority that regulate the issuance, allocation, trading or surrendering of Emission Allowances.


 (i)
Subject to any mandatory provisions of any applicable Emissions Scheme and the corresponding national or international laws and regulations, the Charterers shall exercise their best endeavours to take all necessary actions to  be the sole responsible party for compliance with all Emission Scheme obligations in relation to the Vessel, provided this is feasible and legally permissible, pursuant to any domestic or international law or regulation, directed to the Owners as registered or beneficial owners of the Vessel.
 


 (ii)
Notwithstanding sub-paragraph (i) above, the Charterers shall be permitted to sub-delegate such Emission Scheme responsibility on to any entity, including without limitation to the relevant holder of Document of Compliance/ISM Company under the ISM Code in respect of the Vessel, as it may be lawfully allowed by the applicable Emission Scheme and subject to the consent of the holder of the Document of Compliance/ISM Company of the Vessel. Such sub-delegation shall be documented in accordance with the requirements imposed by the relevant Emissions Scheme and a signed copy of such documentation shall be provided by or made available to the Owners, as may be applicable, including but not limited to any written mandate requested by the competent authorities.
 

 (iii)
The Charterers and the Owners shall co-operate and assist each other to deliver all such forms as are required to be filed to any relevant authorities in relation to the delegation and assumption of any Emission Scheme responsibilities within reasonable time and always in accordance with any deadlines set by the competent authority and the applicable laws or regulations.
 

 (iv)
Without limiting the foregoing, throughout the Charter Period, the Charterers or any mandated entity, shall arrange for providing and paying for or otherwise surrendering the Emission Allowances corresponding to the Vessel’s emissions under the scope of the applicable Emission Scheme without any delay whatsoever.
 

 (v)
Emission Allowances, taxes, charges, levies, fees, fines, costs or expenses incurred or imposed in connection with any Emissions Scheme, shall be for the Charterers' account and are to be settled directly by them or their mandated entity (subject always to any mandatory provisions of the applicable Emissions Scheme or relevant laws or regulations).
 

 (vi)
The Charterers shall use their best endeavours to ensure that the Charterers or any mandated, as above, entity shall comply, sign, acknowledge in writing in any form that may be reasonably required, and provide all such information and documents to the Owners as necessary to enable the Owners and any Emission Scheme obligor to document and evidence to any authority their delegation/mandating of all Emission Scheme obligations in relation to the Vessel (and the assumption of same by the relevant mandated entity), as may be required from time to time during the Charter Period by the Owners, any manager or other mandated entity, and any relevant Emission Scheme authority, in conformity with the provisions of this Clause. The Owners shall also ensure to provide the Charterers with all necessary information, documents or details as above and as same may be required by any authorities in connection any applicable Emissions Scheme, including but not limited to opening any accounts and/or surrendering any Emissions Allowances, in order to ensure that the Vessel will comply with any applicable Emissions Scheme laws and regulations.
 

 (vii)
The Owners undertake to relay to the Charterers, without delay, any information that might be received by the Owners for any reason whatsoever, including by error of any authority, and which might relate to compliance with any Emission Scheme.
 
48.
Confidentiality
 
This Charter including all negotiations, fixtures and written correspondence shall remain strictly confidential between the Owners, the Charterers, financiers/banks, external counsels, auditors and insurance companies provided however that each of the Owners, Charterers and Charterers’ Guarantor 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/ Teruyoshi Hanada
 
 /s/ Stavros Gyftakis
 
 
 
 
 
Hinode Kaiun Co., Ltd.
 
 Kaizen Shipping Co.
 
Teruyoshi Hanada
 
 Stavros Gyftakis
 
President
 
 Director/ Treasurer
 
 
 
 
 
/s/ Teruyoshi Hanada
 
 
 
       
Sunmarine Maritime S.A.
 
 
 
Teruyoshi Hanada
 
 
 
President
 
 
 


 Appendices:

Appendix A:
Form of performance guarantees
Appendix B: Purchase Option Prices


Appendix A

Performance Guarantee



 1.
Charterers’ Guarantor Guarantee

Date : […] […] 2024

To:
Hinode Kaiun Co., Ltd.
7-35-10 Hiro Koshingai, Kure-city, Hiroshima, Japan

Sunmarine Maritime S.A.
15th Floor, Aquilino de la Guardia Street, Marbella, Panama City, Republic of Panama

Dear Sirs,
GUARANTEE

In consideration of the entry into by you of a Memorandum of Agreement (hereinafter called the “MOA”) dated […] […] 2024, with Kaizen Shipping Co. as sellers (hereinafter called “Kaizen Shipping”) for the sale and purchase of the motor vessel "Orange Tiara" (tbr Kaizenship) with IMO number 9624445 (hereinafter called the “Vessel”) and a Bareboat Charter Party (hereinafter called the “BBCP”) dated […] […] 2024, with Kaizen Shipping as charterers for the bareboat chartering of the Vessel, we, the undersigned, as the primary obligor, guarantee to you and your successors and assignees the due and punctual performance by Kaizen Shipping  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 Kaizen Shipping 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 Kaizen Shipping, 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 seven (7) Banking Days (as defined in the BBCP) on demand, any sum that is due and payable in consequence of the non-performance by Kaizen Shipping, its successors and assignees, of any of the said terms, provisions, conditions, obligations and agreements.

Any demand made by you under this guarantee shall be made in writing signed by an authorized signatory of you and shall specify the default of Kaizen Shipping and shall be accompanied by a copy of the notice of such default served on Kaizen Shipping by you together with a statement (if any) that Kaizen Shipping have failed to remedy such default within any applicable grace period.

We hereby agree to indemnify you on demand and keep you indemnified against all costs, expenses, claims, liabilities, and fees (including, but not limited to, reasonable and documented legal fees) thereon suffered or incurred by you, directly as a result of any breach or non-performance of, or non-compliance by Kaizen Shipping 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.

We 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 Kaizen Shipping 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 Kaizen Shipping or any other person in respect of our obligations under this guarantee;
e)           We will 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 Kaizen Shipping under the MOA and BBCP whereafter this guarantee shall be immediately returned to us;
b)           shall be in addition to, and shall not be prejudiced or affected by, any other security for the obligations of Kaizen Shipping 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 Kaizen Shipping or the appointment of a receiver or administrative receiver or administrator or trustee or similar officer of any of the assets of Kaizen Shipping or any term or concessions given by you to Kaizen Shipping 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$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.


For and on behalf of
Seanergy Maritime Holdings Corp. (as the “Guarantor”)

 
 
Name:
 
Title:
 



2.
Hinode Kaiun Co., Ltd. Guarantee

Date : […] […] 2024
To:
Kaizen Shipping Co.
Trust Company Complex, Ajeltake Road, Ajeltake Island, MH96960 Majuro, Marshall Islands (Charterers)

Dear Sirs,
GUARANTEE

In consideration of the entry into by you of a Memorandum of Agreement (hereinafter called the “MOA”) dated […] […] 2024, with Hinode Kaiun Co., Ltd. and Sunmarine Maritime S.A. as buyers (hereinafter called “Buyers”) for the sale and purchase of the motor vessel "Orange Tiara" (tbr Kaizenship) with IMO number 9624445 (hereinafter called the “Vessel”) and a Bareboat Charter Party (hereinafter called the “BBCP”) dated […] […] 2024, with the Buyers  as owners for the bareboat chartering of the Vessel, we, the undersigned, as the primary obligor, guarantee to you and your successors and assignees the due and punctual performance by Sunmarine Maritime S.A.  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 Sunmarine Maritime S.A. 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 Sunmarine Maritime S.A., 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 seven (7) Banking Days (as defined in the BBCP) on demand, any sum that is due and payable in consequence of the non-performance by Sunmarine Maritime S.A., its successors and assignees, of any of the said terms, provisions, conditions, obligations and agreements.

Any demand made by the Charterers under this guarantee shall be made in writing signed by an authorized signatory of the Charterers and shall specify the default of Sunmarine Maritime S.A. and shall be accompanied by a copy of the notice of such default served on Sunmarine Maritime S.A.  by the Charterers together with a statement (if any) that Sunmarine Maritime S.A. have failed to remedy such default within any applicable grace period.

We hereby agree to indemnify you on demand and keep you indemnified against all costs, expenses, claims, liabilities, and fees (including, but not limited to, reasonable and documented legal fees) thereon suffered or incurred by you, directly as a result of any breach or non-performance of, or non-compliance by Sunmarine Maritime S.A. 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.

We 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 Sunmarine Maritime S.A. 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 Sunmarine Maritime S.A. or any other person in respect of our obligations under this guarantee;
e)           We will 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 Sunmarine Maritime S.A. under the MOA and BBCP whereafter this guarantee shall be immediately returned to us;
b)           shall be in addition to, and shall not be prejudiced or affected by, any other security for the obligations of Sunmarine Maritime S.A. 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 Sunmarine Maritime S.A. or the appointment of a receiver or administrative receiver or administrator or trustee or similar officer of any of the assets of Sunmarine Maritime S.A. or any term or concessions given by you to Sunmarine Maritime S.A.  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$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.


For and on behalf of
Hinode Kaiun Co., Ltd. (as the “Guarantor”)

 
 
Name: […]
 
Title: […]
 


Appendix B

Purchase Option Prices & Purchase Prices in Case of Owners’ Default
               
   
Purchase Option Price at the end of each month
(in USD)
Purchase Price in
Case of Owners' Default during each month (in USD)
    
Purchase Option Price at the end
of each month
(in USD)
Purchase Price in
Case of Owners'
Default during each month (in USD)
               
1st Year
1st Month
N/A
28,211,802.1
2nd Year
13th Month
N/A
24,753,427.1
1st Year
2nd Month
N/A
27,923,604.2
2nd Year
14th Month
N/A
24,465,229.2
1st Year
3rd Month
N/A
27,635,406.3
2nd Year
15th Month
N/A
24,177,031.3
1st Year
4th Month
N/A
27,347,208.3
2nd Year
16th Month
N/A
23,888,833.3
1st Year
5th Month
N/A
27,059,010.4
2nd Year
17th Month
N/A
23,600,635.4
1st Year
6th Month
N/A
26,770,812.5
2nd Year
18th Month
N/A
23,312,437.5
1st Year
7th Month
N/A
26,482,614.6
2nd Year
19th Month
N/A
23,024,239.6
1st Year
8th Month
N/A
26,194,416.7
2nd Year
20th Month
N/A
22,736,041.7
1st Year
9th Month
N/A
25,906,218.8
2nd Year
21st Month
N/A
22,447,843.8
1st Year
10th Month
N/A
25,618,020.8
2nd Year
22nd Month
N/A
22,159,645.8
1st Year
11th Month
N/A
25,329,822.9
2nd Year
23rd Month
N/A
21,871,447.9
1st Year
12th Month
N/A
25,041,625.0
2nd Year
24th Month
N/A
21,583,250.0
3rd Year
25th Month
N/A
21,295,052.1
4th Year
37th Month
N/A
17,836,677.1
3rd Year
26th Month
N/A
21,006,854.2
4th Year
38th Month
N/A
17,548,479.2
3rd Year
27th Month
N/A
20,718,656.3
4th Year
39th Month
N/A
17,260,281.3
3rd Year
28th Month
N/A
20,430,458.3
4th Year
40th Month
N/A
16,972,083.3
3rd Year
29th Month
N/A
20,142,260.4
4th Year
41st Month
N/A
16,683,885.4
3rd Year
30th Month
N/A
19,854,062.5
4th Year
42nd Month
N/A
16,395,687.5
3rd Year
31st Month
N/A
19,565,864.6
4th Year
43rd Month
N/A
16,107,489.6
3rd Year
32nd Month
N/A
19,277,666.7
4th Year
44th Month
N/A
15,819,291.7
3rd Year
33rd Month
N/A
18,989,468.8
4th Year
45th Month
N/A
15,531,093.8
3rd Year
34th Month
N/A
18,701,270.8
4th Year
46th Month
N/A
15,242,895.8
3rd Year
35th Month
N/A
18,413,072.9
4th Year
47th Month
N/A
14,954,697.9
3rd Year
36th Month
N/A
18,124,875.0
4th Year
48th Month
15,700,000.0
14,666,500.0
5th Year
49th Month
15,391,666.7
14,378,302.1
6th Year
61st Month
11,687,500.0
10,919,927.1
5th Year
50th Month
15,083,333.3
14,090,104.2
6th Year
62nd Month
11,375,000.0
10,631,729.2
5th Year
51st Month
14,775,000.0
13,801,906.3
6th Year
63rd Month
11,062,500.0
10,343,531.3
5th Year
52nd Month
14,466,666.7
13,513,708.3
6th Year
64th Month
10,750,000.0
10,055,333.3
5th Year
53rd Month
14,158,333.3
13,225,510.4
6th Year
65th Month
10,437,500.0
9,767,135.4
5th Year
54th Month
13,850,000.0
12,937,312.5
6th Year
66th Month
10,125,000.0
9,478,937.5
5th Year
55th Month
13,541,666.7
12,649,114.6
6th Year
67th Month
9,812,500.0
9,190,739.6
5th Year
56th Month
13,233,333.3
12,360,916.7
6th Year
68th Month
9,500,000.0
8,902,541.7
5th Year
57th Month
12,925,000.0
12,072,718.8
6th Year
69th Month
9,187,500.0
8,614,343.7
5th Year
58th Month
12,616,666.7
11,784,520.8
6th Year
70th Month
8,875,000.0
8,326,145.8
5th Year
59th Month
12,308,333.3
11,496,322.9
6th Year
71st Month
8,562,500.0
8,037,947.9
5th Year
60th Month
12,000,000.0
11,208,125.0
6th Year
72nd Month
8,250,000.0
7,749,750.0


EX-4.40 13 ef20039029_ex4-40.htm EXHIBIT 4.40
Exhibit 4.40

Dated  August 29, 2024

SUPPLEMENTARY AGREEMENT to the Bareboat Charter Party
Dated August 29, 2024
(the "Charter")
Between
Kaizen Shipping Co. (guaranteed by Seanergy Maritime Holdings Corp.) as Charterers
And
Hinode Kaiun Co., Ltd. and Sunmarine Maritime S.A. as Owners
(guaranteed by Hinode Kaiun Co., Ltd.)
in respect of the vessel MV “Orange Tiara” (to be renamed Kaizenship)

IT IS THIS DAY MUTUALLY AGREED between Hinode Kaiun Co., Ltd. and Sunmarine Maritime S.A. (guaranteed by Hinode Kaiun Co., Ltd.) as Owners and Kaizen Shipping Co. (guaranteed by Seanergy Maritime Holdings Corp.) as Charterers, as follows.

This AGREEMENT is supplemental to and amends the Charter, and forms an integral part thereof. Unless otherwise defined herein terms and expressions used in this Agreement shall have the same meanings as used in the Charter.

1.
In consideration of the mutual promises herein contained and for other good and valuable consideration the receipt and adequacy of which the parties hereby specifically acknowledge, the Charter is hereby amended to include a purchase obligation of the Charterers.

2.
Provided that the Charter is not terminated prior to the end of the 6th year of the Charter Period for any reason (including but not limited to the exercise by the Charterers of the option to purchase the Vessel or the occurrence of any total loss of the Vessel), the Charterers shall be obligated to purchase the Vessel at the time of the end of the 6th year of the Charter Period from the Owners (the “Purchase Obligation”) and shall pay the “Purchase Option Price at the end of each month (in USD)” for the 72nd Month as specified in Appendix B of the Charter (the “Purchase Obligation Price”).

3.
For purchasing the Vessel, in the event that no Purchase Option notice (as referred to in the third paragraph of Clause 40 of the Charter) has been given by the Charterers to the Owners on the date which is 90 days prior to the end of the 6th year of the Charter Period, a notice of confirmation of the Purchase Obligation shall be issued by the Owners in order to confirm the terms of the transfer from the Owners to the Charterers. However, failure by the Owners (as sellers under the Purchase Obligation) to give such notice shall not relieve the Charterers of their obligation to purchase the Vessel at the end of the 6th year of the Charter Period.

4.
In the event of the Purchase Obligation taking effect at the end of the 6th year of the Charter Period, the Vessel shall be deemed to be re-delivered to the Owners in accordance with the terms of the Charter and concurrently delivered to the Charterers on the terms and conditions of the Purchase Obligation.

5.
In the event of the Purchase Obligation taking effect, the Charter shall be terminated upon the due re-delivery of the Vessel from the Charterers to the Owners and concurrent delivery of her from the Owners to the Charterers in accordance with this Agreement. This termination shall not affect the rights, claims, obligations and liabilities which accrued between the Owners and the Charterers under the Charter unless otherwise agreed under the Charter and the indemnities and other obligations that by their nature should survive the termination of the Charter.

6.
The Owners shall not be obligated to deliver the Vessel to the Charterers until and unless all amounts due and payable under the Charter, including but not limited to the Purchase Obligation Price, have been paid in full.

- 1 -
7.
The Owners agree (at the cost of the Charterers) to enter into (i) a bill of sale and (ii) a protocol of delivery and acceptance, and the Vessel shall accordingly be deemed delivered to the Charterers on the date and time set out in such protocol of delivery and acceptance (and to the extent required for such purposes the Vessel shall be deemed first to have been redelivered to the Owners).

8.
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 and mortgages whatsoever except any such encumbrances or debts which may arise out of or in connection with the demise charter or operation of the Vessel by or any other reason whatsoever attributable to the Charterers or their sub-charterers 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.

9.
Clause 7 (Surveys on Delivery and Re-delivery), clause 15 (Redelivery), clause 36 (Inspection on re-delivery of the Vessel), and clause 37 (Familiarisation) shall not apply if the Charterers exercise their Purchase Obligation.

10.
All other terms and conditions of the Charter shall remain in full force and effect.

This AGREEMENT shall be governed by English law as is the Charter and Clause 30 of the Charter shall apply.

For and on behalf of the Owners: 
  For and on behalf of the Charterers:
Hinode Kaiun Co., Ltd.
  Kaizen Shipping Co.
 
  
 
/s/ Teruyoshi Hanada   /s/ Stavros Gyftakis
     
By
: Teruyoshi Hanada 
  By : Stavros Gyftakis
Title : President
  Title : Director

For and on behalf of the Owners:
 
Sunmarine Maritime S.A.
 
 
 
/s/ Teruyoshi Hanada   
    
By 
: Teruyoshi Hanada  
Title
: President  


- 2 -
EX-4.41 14 ef20039029_ex4-41.htm EXHIBIT 4.41
Exhibit 4.41

Date : August 29, 2024
To:            Hinode Kaiun Co., Ltd.
7-35-10 Hiro Koshingai, Kure-city, Hiroshima, Japan

Sunmarine Maritime S.A.
15th Floor, Aquilino de la Guardia Street, Marbella, Panama City, Republic of Panama

Dear Sirs,
GUARANTEE

In consideration of the entry into by you of a Memorandum of Agreement (hereinafter called the “MOA”) dated August 29, 2024, with Kaizen Shipping Co. as sellers (hereinafter called “Kaizen Shipping”) for the sale and purchase of the motor vessel "Orange Tiara" (tbr Kaizenship) with IMO number 9624445 (hereinafter called the “Vessel”) and a Bareboat Charter Party (hereinafter called the “BBCP”) dated August 29, 2024, with Kaizen Shipping as charterers for the bareboat chartering of the Vessel, we, the undersigned, as the primary obligor, guarantee to you and your successors and assignees the due and punctual performance by Kaizen Shipping  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 Kaizen Shipping 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 Kaizen Shipping, 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 seven (7) Banking Days (as defined in the BBCP) on demand, any sum that is due and payable in consequence of the non-performance by Kaizen Shipping, its successors and assignees, of any of the said terms, provisions, conditions, obligations and agreements.


Any demand made by you under this guarantee shall be made in writing signed by an authorized signatory of you and shall specify the default of Kaizen Shipping and shall be accompanied by a copy of the notice of such default served on Kaizen Shipping by you together with a statement (if any) that Kaizen Shipping have failed to remedy such default within any applicable grace period.

We hereby agree to indemnify you on demand and keep you indemnified against all costs, expenses, claims, liabilities, and fees (including, but not limited to, reasonable and documented legal fees) thereon suffered or incurred by you, directly as a result of any breach or non-performance of, or non-compliance by Kaizen Shipping 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.

We 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 Kaizen Shipping 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 Kaizen Shipping or any other person in respect of our obligations under this guarantee;


 
e)
We will 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 Kaizen Shipping under the MOA and BBCP whereafter this guarantee shall be immediately returned to us;
 
b)
shall be in addition to, and shall not be prejudiced or affected by, any other security for the obligations of Kaizen Shipping 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 Kaizen Shipping or the appointment of a receiver or administrative receiver or administrator or trustee or similar officer of any of the assets of Kaizen Shipping or any term or concessions given by you to Kaizen Shipping 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$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.

For and on behalf of
Seanergy Maritime Holdings Corp. (as the “Guarantor”)
 
/s/ Stavros Gyftakis

 
   
Name: Stavros Gyftakis
Title: Director


EX-4.42 15 ef20039029_ex4-42.htm EXHIBIT 4.42
Exhibit 4.42

Dated 21 October 2024
 
up to $34,000,000
 
TERM LOAN FACILITY
 
TITAN OCEAN NAVIGATION CO.
PAROS OCEAN NAVIGATION CO.
as joint and several Borrowers
 
and
 
SEANERGY MARITIME HOLDINGS CORP.
as Parent Guarantor
 
and
 
ALPHA BANK S.A.
as Original Lender
 
FACILITY AGREEMENT
 
relating to
the financing of the purchase option in respect of m.v. "TITANSHIP",
the refinancing of the existing indebtedness secured on m.v. "PAROSHIP"
and
the provision of liquidity for working capital purposes
Index
Clause
  
Page
   
Section 1 Interpretation
2
1
Definitions and Interpretation
2
Section 2 The Facility
28
2
The Facility
28
3
Purpose
28
4
Conditions of Utilisation
29
Section 3 Utilisation
31
5
Utilisation
31
Section 4 Repayment, Prepayment and Cancellation
33
6
Repayment
33
7
Prepayment and Cancellation
33
Section 5 Costs of Utilisation
37
8
Interest
37
9
Interest Periods
38
10
Changes to the Calculation of Interest
39
11
Fees
40
Section 6 Additional Payment Obligations
41
12
Tax Gross Up and Indemnities
41
13
Increased Costs
44
14
Other Indemnities
46
15
Mitigation by the Lender
48
16
Costs and Expenses
49
Section 7 Guarantees and Joint and Several Liability of Borrowers
50
17
Guarantee and Indemnity – Parent Guarantor
50
18
Joint and Several Liability of the Borrowers
53
Section 8 Representations, Undertakings and Events of Default
55
19
Representations
55
20
Information Undertakings
62
21
Financial Covenants
64
22
General Undertakings
65
23
Insurance Undertakings
72
24
General Ship Undertakings
77
25
Security Cover
84
26
Accounts and Application of Earnings
85
27
Events of Default
86
Section 9 Changes to The Parties
91
28
Changes to the Lender
91
29
Changes to the Transaction Obligors
92
Section 10 Administration
94
30
Payment Mechanics
94
31
Set-Off
96
32
Conduct of Business by the Lender
96
33
Bail-In
96
34
Notices
97
35
Calculations and Certificates
98
36
Partial Invalidity
99
37
Remedies and Waivers
99


38
Entire Agreement
99
39
Settlement or Discharge Conditional
100
40
Irrevocable Payment
100
41
Amendments
100
42
Confidential Information
100
43
Confidentiality of Funding Rates
103
44
Amendments
104
45
Counterparts
106
46
Data Protection
106
47
Governing Law and Enforcement
108
48
Enforcement
108

Schedules
  
   
Schedule 1 The Parties
110
Part A The Obligors
110
Part B The Original Lender
111
Schedule 2 Conditions precedent
112
Part A Conditions precedent to Utilisation Request
112
Part B Conditions precedent to utilisation
115
Schedule 3 Requests
117
Part A Utilisation Request
117
Part B Selection Notice
119
Schedule 4 Form of Compliance Certificate
120
Schedule 5 Details of the Ships
121
Schedule 6 Timetables
122
   
Execution
  
   
Execution Pages
123


THIS AGREEMENT is made on 21 October 2024
 
PARTIES
 
(1)
TITAN OCEAN NAVIGATION CO., a corporation incorporated in the Republic of Liberia, with registered number C-125681, whose registered address is at 80 Broad Street, Monrovia, Liberia as a borrower ("Borrower A")
 
(2)
PAROS OCEAN NAVIGATION CO., a corporation incorporated in the Republic of Liberia, with registered number C-125033, whose registered address is at 80 Broad Street, Monrovia, Liberia as a borrower ("Borrower B")
 
(3)
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, Marshall Islands MH 96960 as guarantor (the "Parent Guarantor")
 
(4)
ALPHA BANK S.A., acting through its office at 93, Akti Miaouli, GR-185 38, Piraeus, Greece, as lender (the "Original Lender")
 
BACKGROUND
 
The Lender has agreed to make available to the Borrowers a secured term loan facility of up to the lesser of (i) $34,000,000 and (ii) circa 45 per cent. of the aggregate Initial Market Value of the Ships, in three advances, for the purposes of:
 
(A)
financing the Purchase Option of Ship A by way of a loan in a principal amount not exceeding $20,210,000;
 
(B)
refinancing the Existing Indebtedness in respect of Ship B by way of a loan in a principal amount not exceeding $13,200,000; and
 
(C)
providing liquidity for working capital purposes in a principal amount of $590,000.
 
OPERATIVE PROVISIONS
 

SECTION 1
 
INTERPRETATION
 
1
DEFINITIONS AND INTERPRETATION
 
1.1
Definitions
 
In this Agreement:
 
"Account" means each of the Earnings Accounts and the Cash Collateral Account and in plural means both of them.
 
"Account Bank" means Alpha Bank S.A. acting through its office at 93 Akti Miaouli, 185 38, Piraeus, Greece or any replacement bank or other financial institution as may be approved by the Lender (including without limitation, any Subsidiary of the Lender).
 
"Account Security" means a document creating Security over an Account in agreed form.
 
"Adjusted Margin" has the meaning given to it in Clause 8.5 (Margin reset).
 
"Advance" means Advance A or Advance B or Advance C.
 
"Advance A" means an amount of up to $20,210,000 for the purpose of financing the Purchase Option Price of Ship A.
 
"Advance B" means an amount of up to $13,200,000 for the purpose of refinancing the Existing Indebtedness secured on Ship B.
 
"Advance C" means an amount of up to $590,000 for the purpose of providing liquidity for working capital purposes.
 
"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.
 
"Approved Brokers" means any firm or firms of insurance brokers approved in writing by the Lender, such approval not to be unreasonably withheld.
 
"Approved Classification" means, in relation to a Ship, as at the date of this Agreement, the classification in relation to that Ship specified in Schedule 5 (Details of the Ships) or the equivalent classification with another Approved Classification Society.
 
"Approved Classification Society" means, in relation to a Ship, as at the date of this Agreement, the classification society in relation to that Ship specified in Schedule 5 (Details of the Ships) or any other classification society which is a member of IACS, approved in writing by the Lender.
 
"Approved Commercial Manager" means in relation to a Ship, as at the date of this Agreement:
 

 (a)
Fidelity Marine Inc.;
 

 (b)
Seanergy Management Corp. ("Seanergy Management");
 
2

 (c)
a direct or indirect wholly owned Subsidiary of the Parent Guarantor; or
 

 (d)
any other person not being a wholly owned Subsidiary of the Parent Guarantor approved in writing by the Lender as the commercial manager of a Ship.
 
"Approved Crew Manager" means, in relation to a Ship, as at the date of this Agreement:
 

 (a)
V.Ships Greece Ltd. ("V.Ships"), a corporation incorporated in Bermuda, with registered office at 3rd Floor, Par-La-Ville Place, 14 Par-La-Ville Road, Hamilton HM 08, Bermuda;
 

 (b)
Global Seaways S.A., a company incorporated in the Republic of the Marshall Islands with registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960; or
 

 (c)
or any other person approved in writing by the Lender as the crew manager of that Ship.
 
"Approved Flag" means, in relation to a Ship, as at the date of this Agreement, the flag in relation to that Ship specified in Schedule 5 (Details of the Ships) or such other flag and, if applicable port of registry, approved in writing by the Lender and a reference to "the Approved Flag" in respect of a Ship shall be a reference to the flag and, if applicable port of registry, under which that Ship is then flagged with the agreement of 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 in relation to a Ship, as at the date of this Agreement:
 

 (a)
V.Ships;
 

 (b)
Seanergy Shipmanagement Corp. ("Seanergy Shipmanagement"), a company incorporated in the Republic of the Marshall Islands with registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960;
 

 (c)
a direct or indirect wholly owned Subsidiary of the Parent Guarantor; or
 

 (d)
any other person not being a direct or indirect wholly owned Subsidiary of the Parent Guarantor approved in writing by the Lender as the technical manager of a Ship.
 
"Approved Valuer" means Maersk Broker Advisory Services A/S, Clarksons Valuations Limited, Braemar ACM Valuations Limited, Simpson Spence & Young Valuations Services Ltd, Arrow Research Limited, Fearnleys Shipbrokers A/S, Allied Shipbroking Ltd. (or any Affiliate of such person through which valuations are commonly issued) or such other first-class independent sale and purchase shipbroker as may be approved in writing or appointed by the Lender from time to time.
 
"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, the relevant Existing Charter and any Charter in respect of that Ship which has or is capable of having, by virtue of any optional extensions, a duration of more than 13 months (or capable of having a remaining duration exceeding 13 months, taking into account any extension options) made on terms and with a Charterer acceptable to the Lender.
 
3
"Authorisation" means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation, legalisation or registration.
 
"Availability Period" means the period from and including the date of this Agreement to and including the earlier of:
 

 (a)
31 October 2024; and
 

 (b)
if earlier, the date on which the Commitment is fully borrowed, 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:
 

 (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" shall have the meaning set out in Clause 6.1 (Repayment of Loan).
 
"Borrower" means Borrower A or Borrower B.
 
"Break Costs" means the amount (if any) by which:
 

 (a)
the interest (excluding the Margin) which the Lender should have received for the period from the date of receipt of all or any part of 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 for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.
 
4
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in London, Athens, Piraeus and New York and, in relation to the fixing of an interest rate, which is a US Government Securities Business Day.
 
"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).
 
"Cash Collateral Account" means:
 
 
(a)
an account in the name of Seanergy Shipmanagement with the Account Bank; or
 

 (b)
any other account in the name of a Transaction Obligor 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.
 
"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, for the avoidance of doubt, any Assignable Charter).
 
"Charter Guarantee" means any guarantee, bond, letter of credit or other instrument (whether or not already issued) supporting a Charter.
 
"Charterer" means any reputable charterer, acceptable to the Lender in its absolute discretion, which shall enter into an Assignable Charter as charterer and including, without limitation, an Existing Charterer.
 
"Charterparty Assignment" means the assignment creating Security over the rights of a Borrower under any Assignable Charter and any Charter Guarantee relative thereto in the agreed form.
 
"Code" means the US Internal Revenue Code of 1986.
 
"Commercial Management Agreement" means the agreement entered into between an Approved Commercial Manager and Seanergy Management regarding the commercial management of a Ship, whereby the Borrower owning that Ship has acceded thereto by the relevant deed of accession.
 
"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 and the Lender.
 
"Crew Management Agreement" means the agreement entered into between a Borrower and an Approved Crew Manager regarding the crew management of a Ship.
 
"Commitment" means $34,000,000, to the extent not cancelled or reduced under this Agreement.
 
5
"Confidential Information" means all information relating to any Transaction Obligor, 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 Transaction Obligor 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 Transaction Obligor or any of its advisers; or
 

 (iii)
is known by the Lender before the date the information is disclosed to it by any Transaction Obligor 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 a Transaction Obligor 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.
 
"Data Protection Legislation" means local laws and regulations on data protection, the GDPR Regulation and any guidelines published by the European Data Protection Board and competent data protection authorities.
 
"Deed of Covenant" means, in relation to a Ship, the deed of covenant collateral to the Mortgage over that Ship and creating Security over that Ship in agreed form.
 
"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.
 
"Delivery Date" means, in relation to Ship A, the date on which that Ship is delivered by the Lessor to Borrower A under the MOA.
 
"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
 
6

 (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.
 
"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-paragraph (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.
 
7
"Earnings Account" means, in relation to a Borrower:
 

 (a)
an account in the name of that Borrower with the Account Bank designated "[name of Borrower] - Earnings 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 paragraph (a) or (b) above.
 
"EEA Member Country" means any member state of the European Union, Iceland, Liechtenstein and Norway.
 
"Environmental Approval" means any present or future permit, ruling, variance or other Authorisation required under 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 vessel disposal, energy efficiency, carbon reduction, emissions, emissions trading, 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.
 
8
"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.
 
"Escrow Agent" means Tanaka & Partners LPC of 17, Kamda Konya-cho, Chiyoda-ku.
 
"Escrow Agreement" means the escrow agreement dated 18 October 2024 and made between (i) the Escrow Agent, (ii) Borrower A, (iii) the Lessor and (iv) the Lender in respect of the payment of the Purchase Option Price, as the same may be amended and/or supplemented from time to time.
 
"EU Bail-In Legislation Schedule" means the document described as such and published by the LMA from time to time.
 
"European Data Protection Board" means the independent European body, which contributes to the consistent application of data protection rules throughout the European Union and promotes cooperation between the European Union's data protection authorities.
 
"Event of Default" means any event or circumstance specified as such in Clause 27 (Events of Default).
 
"Existing Charter" means Existing Charter A or Existing Charter B.
 
"Existing Charter A" means, in respect of Ship A, a time charterparty entered into between Borrower A and Existing Charterer A having a duration of minimum 24 months to maximum 30 months (+/- 15 days in Existing Charterer B's option), commencing on and from the delivery of Ship A to the Existing Charterer A, as evidenced by a recapitulation email dated 23 September 2024.
 
"Existing Charter B" means, in respect of Ship B, a time charterparty entered into between Borrower B and Existing Charterer B having a duration of minimum 20 months to maximum 24 months (+/- 15 days in Existing Charterer B's option), commencing on and from the delivery of Ship B to the Existing Charterer B, as evidenced by a recapitulation email dated 24 November 2023.
 
"Existing Charterer" means Existing Charterer A or Existing Charterer B.
 
"Existing Charterer A" means Costamare Bulkers Inc., a corporation incorporated in the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Majuro, Marshall Islands.
 
"Existing Charterer B" means Oldendorff Carriers GMBH & CO. KG., a company incorporated in Germany whose registered office is at Willy-Brandt-Allee 6, 23554, Lubeck, Germany.
 
"Existing Bareboat Charter" means, in relation to Ship A, the bareboat charter agreement dated 9 May 2023 and made between (i) Borrower A, as charterers and (ii) the Lessor, as owner pursuant to which Borrower A shall exercise the purchase option.
 
"Existing Lender" means the Original Lender, in its capacity as lender under the Existing Loan Agreement.
 
9
"Existing Loan Agreement" means the loan agreement dated 15 December 2022 and entered into between Borrower B as borrower and the Existing Lender as lender for the purpose of part financing the purchase price of Ship B.
 
"Existing Indebtedness" means, in relation to Borrower B, the outstanding Financial Indebtedness of Borrower B on that date under the Existing Loan Agreement amounting to $13,200,000 at the date of this Agreement.
 
"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 paragraph (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.
 
"Finance Document" means:
 

 (a)
this Agreement;
 

 (b)
the Utilisation Request;
 

 (c)
any Security Document;
 

 (d)
any Subordination Agreement;
 

 (e)
any other document which is executed for the purpose of establishing any priority or subordination arrangement in relation to the Secured Liabilities; or
 

 (f)
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;
 
10

 (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 paragraph (a) to (h) above.
 
"Fleet Vessels" means the vessels from time to time owned by the members of the Group (including any vessels bareboat chartered to a member of the Group pursuant to a lease financing) and "Fleet Vessel" means any of them.
 
"Funding Rate" means any rate notified by the Lender to an Obligor pursuant to sub-paragraph (ii) of paragraph (a) of Clause 10.3 (Cost of funds).
 
"GAAP" means generally accepted accounting principles in the US, including IFRS.
 
"General Assignment" means, in relation to a Ship, the general assignment creating Security over that Ship's Earnings, its Insurances and any Requisition Compensation in relation to that Ship in agreed form.
 
"Group" means the Parent Guarantor and its Subsidiaries from time to time, including, without limitation, the Borrowers.
 
"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 three US Government Securities Business Days before the Quotation Day.
 
"Holding Company" means, in relation to a person, any other person in relation to which it is a Subsidiary.
 
11
"IACS" means the International Association of Classification Societies.
 
"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 paragraph 2 of Part B 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 the date of this Agreement; 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 before the date of this Agreement.
 
"Interest Payment Date" has the meaning given to it in paragraph (a) of 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).
 
"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:
 

 (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 five 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:
 
12

 (a)
either
 

 (i)
the applicable Term SOFR (as of the Specified Time) 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 the day (which is two US Government Securities Business Days) before the Quotation Day; and
 

 (b)
the applicable Term SOFR (as of the Specified Time) for the shortest period (for which Term SOFR is available) which exceeds the Interest Period of the Loan or that part of the Loan.
 
"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, the annual audited 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.
 
"Lessor" means MI-DAS LINE S.A., in its capacity as seller under the MOA.
 
"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 or any other part of the Loan as the context may require.
 
"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 $750,000 or the equivalent in any other currency.
 
"Management Agreement" means a Commercial Management Agreement, a Technical Management Agreement or a Crew Management Agreement.
 
13
"Manager's Undertaking" means the letter of undertaking from the Approved Technical Manager and the letter of undertaking from the Approved Commercial Manager subordinating the rights of the Approved Technical Manager and the Approved Commercial Manager and assigning its rights and interest in the Insurances, respectively against each Ship and each Borrower to the rights of the Lender in agreed form.
 
"Margin" means:
 

 (a)
2.4 per cent. per annum; or
 

 (b)
at all times when Clause 8.5 (Margin reset) applies, the Adjusted Margin.
 
"Market Disruption Rate" means the Reference Rate.
 
"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:
 

 (a)
the market value of that Ship or vessel shown by a valuation prepared:
 

 (i)
by an Approved Valuer;
 

 (ii)
with or without physical inspection of that Ship or vessel (as the Lender may require); and
 

 (iii)
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, free of any Charter,
 
Less
 

 (b)
an amount determined by the Lender as being an amount equal to the amount of the usual and reasonable expenses which would be reasonably likely to be incurred in connection with a sale described in sub‑paragraph (iii) of paragraph (a) above.
 
"Material Adverse Effect" means in the reasonable opinion of the Lender a material adverse effect on:
 

 (a)
the business, operations, property, condition (financial or otherwise) or prospects of any Obligor or the Obligors as a whole; or
 

 (b)
the ability of any 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.
 
"Minimum Cash Reserve" has the meaning given to it in Clause 21.1 (Minimum Cash Reserve).
 
"Minimum Security Cover Ratio" means the minimum Security Cover Ratio as required pursuant to Clause 25.1 (Minimum required security cover).
 
"MOA" means the memorandum of agreement dated 3 October 2024 and made between (i) Borrower A as buyer and (ii) the Lessor, as seller for the purpose of Borrower A exercising the purchase option under the Existing Bareboat Charter.
 
14
"Month" means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:
 

 (a)
(subject to paragraph (c) 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;
 

 (b)
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
 

 (c)
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.
 
The above rules will only apply to the last Month of any period.
 
"Mortgage" means, in relation to a Ship, the first preferred or, as the case may be, priority 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.
 
"Obligor" means a Borrower or the Parent Guarantor.
 
"Original Financial Statements" means:
 

 (a)
in relation to the Parent Guarantor, its audited consolidated financial statements for its financial year ended 31 December 2023; and
 

 (b)
in relation to each Borrower, its unaudited financial statements for its financial year ended 31 December 2023.
 
"Original Jurisdiction" means, in relation to an Obligor, the jurisdiction under whose laws that Obligor is incorporated as at the date of this Agreement.
 
"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)
an Existing Charter;
 

 (b)
a Charter:
 

 (i)
which is a time, voyage or consecutive voyage charter;
 
15

 (ii)
the duration of which does not exceed and is not capable of exceeding, by virtue of any optional extensions, 13 months;
 

 (iii)
which is entered into on bona fide arm's length terms at the time at which that Ship is fixed; and
 

 (iv)
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)
in relation to Borrower B, until the Utilisation Date, the Existing Indebtedness;
 

 (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 ordinary course of business up to an amount of $500,000.
 
"Permitted Security" means:
 

 (a)
Security created by the Finance Documents;
 

 (b)
in relation to Borrower B, until the Utilisation Date, the Existing Security;
 

 (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); "Pledged Amount" has the meaning given to it in Clause 8.5 (Margin Reset).
 
16

 (g)
Security arising by operation of law in respect of Taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made; and
 

 (h)
any Security created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses where a Borrower is actively prosecuting or defending such proceedings or arbitration in good faith.
 
 
"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.
 
"Prohibited Person" means any person who is the subject of Sanctions (whether designated by name or by reason of being included in a class of persons to whom the applicable Sanctions apply in accordance with their terms) provided that, in the case of a person:
 

 (a)
who is not themselves a Transaction Obligor, a Subsidiary of a Transaction Obligor or one of their respective directors, officers or employees; and
 

 (b)
who is targeted only by "sectoral sanctions," or other Sanctions that do not generally prohibit transactions with such person,
 
such person shall be a Prohibited Person with respect to a transaction only to the extent that:
 

 (i)
a Transaction Obligor, the Lender or any other person organised or resident in the US, UK or EU would be prohibited by the law of such jurisdiction from entering into, directly or indirectly, such transaction with such person; or
 

 (ii)
the transaction involving such person would require a specific Authorisation by an applicable Sanctions authority.
 
"Purchase Option Price" means, in relation to Ship A, the total amount of $20,210,000 payable under the Existing Bareboat Charter pursuant to the terms of the MOA.
 
"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 syndicated loan market in which case the 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 Quotation Day will be the last of those days).
 
"Quoted Tenor" means any period for which Term SOFR is customarily displayed on the relevant page or screen of an information service.
 
"Receiver" means a receiver or receiver and manager or administrative receiver of the whole or any part of the Security Assets.
 
"Reference Rate" means, in relation to the Loan or any part of the Loan:
 

 (a)
the applicable Term SOFR as of the Specified Time and for a period equal in length to the Interest Period of the Loan or that part of the Loan; or
 
17

 (b)
as otherwise determined pursuant to Clause 10.1 (Unavailability of Term SOFR),
 
and if, in either case, that rate is less than zero, the Reference Rate shall be deemed to be zero.
 
"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 for overnight cash borrowing collateralised by US Government Securities.
 
"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.
 
"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).
 
"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), Clause 19.12 (Deduction of Tax), Clause 19.13 (No default), Clause 19.16 (Pari passu ranking), Clause 19.17 (No proceedings pending or threatened), Clause 19.21 (No Charter) and paragraph (a)(iii) of Clause 19.34 (Sanctions) 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.
 
"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
 
18

 (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.
 
"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.
 
"Sanctioned Country" means a country or territory whose government is the target of Sanctions or that is subject to comprehensive country-wide or territory-wide Sanctions (including, without limitation, as regards US Sanctions, Cuba, Syria, Iran, North Korea, Crimea and Venezuela).
 
"Sanctioned Ship" means a ship which is the subject of Sanctions.
 
"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 or the United States of America; or
 

 (b)
otherwise imposed by any law or regulation binding on a Transaction Obligor or to which a Transaction Obligor is subject (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.
 
"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.
 
"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, the aggregate of (i) the Market Value of the Ships and (ii) the net realisable value of additional Security previously provided under Clause 25 (Security Cover), expressed as a percentage of the aggregate amount of the Secured Liabilities.

19
"Security Document" means:
 

 (a)
any Mortgage;
 

 (b)
any General Assignment;
 

 (c)
any Deed of Covenant;
 

 (d)
any Manager's Undertaking;
 

 (e)
any Account Security;
 

 (f)
any Charterparty Assignment;
 

 (g)
any Subordinated Debt Security;
 

 (h)
any other document (whether or not it creates Security) which is executed as security for the Secured Liabilities; or
 

 (i)
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.
 
"Selection Notice" means a notice substantially in the form set out in Part B (Selection Notice) of Schedule 3 (Requests) given in accordance with Clause 9 (Interest Periods).
 
"Ship" means Ship A or Ship B.
 
"Ship A" means m.v. "TITANSHIP", a bulker carrier type of vessel which is to be registered, on the Delivery Date, in the ownership of Borrower A under an Approved Flag, further details of which are set out opposite its name in Schedule 5 (Details of the Ships).
 
"Ship B" means m.v. "PAROSHIP", a bulker carrier type of vessel, which is registered in the ownership of Borrower B under an Approved Flag, further details of which are set out opposite its name in Schedule 5 (Details of the Ships).
 
20
"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).
 
"Specified Time" means a day or time determined in accordance with Schedule 6 (Timetables).
 
"Subordinated Creditor" means:
 

 (a)
a Transaction Obligor; or
 

 (b)
any other person who becomes a Subordinated Creditor in accordance with this Agreement.
 
"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 a Borrower to a Subordinated Creditor whether under the Subordinated Finance Documents or otherwise.
 
"Subordinated Loan Agreement" means any loan agreement made or to be made between (i) any Borrower and (ii) a Subordinated Creditor.
 
"Subordination Agreement" means a subordination agreement entered into or to be entered into by (i) a Subordinated Creditor, (ii) a Borrower and (iii) the Lender in agreed form.
 
"Subsidiary" means a subsidiary within the meaning of section 1159 of the Companies Act 2006.
 
"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.
 
"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).
 
21
"Termination Date" means the date falling on the fifth anniversary of the Utilisation Date.
 
"Third Parties Act" has the meaning given to it in Clause 1.5 (Third party rights).
 
"Total Loss" means, in relation to a Ship:
 

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

 (b)
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, unless that Ship is returned to the full control of the relevant Borrower within 120 days of such Requisition; or
 

 (c)
any capture or seizure of that Ship (including any hijacking or theft) by any person whatsoever, unless that Ship is returned to the full control of the relevant Borrower within 180 days of such Requisition; or
 
in each case, such later period agreed by the Lender.
 
"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.
 
"Transaction Document" means:
 

 (a)
a Finance Document;
 

 (b)
the MOA;
 

 (c)
a Subordinated Finance Document;
 

 (d)
any Assignable Charter;
 

 (e)
any Charter Guarantee;
 
22

 (f)
any Management Agreement;
 

 (g)
any Deed of Release; or
 

 (h)
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 person (other than any Approved Manager who is not a 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 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 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 the Utilisation, being the date on which the Loan is to be made.
 
"Utilisation Request" means a notice substantially in the form set out in Part A (Utilisation Request) of Schedule 3 (Requests).
 
"VAT" means:
 

 (a)
any value added tax imposed by the Value Added Tax Act 1994;
 
23

 (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:
 

 (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 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; and
 

 (c)
in relation to any other applicable 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.
 
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)
"assets" includes present and future properties, revenues and rights of every description;
 

 (iii)
a liability which is "contingent" means a liability which is not certain to arise and/or the amount of which remains unascertained;
 
24

 (iv)
the Lender's "cost of funds" in relation to the funding of 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 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.
 

 (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)
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;
 

 (viii)
"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;
 

 (ix)
"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;
 

 (x)
"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;
 

 (xi)
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);
 

 (xii)
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;
 

 (xiii)
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;
 

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

 (xv)
a time of day is a reference to London time;
 

 (xvi)
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;
 

 (xvii)
words denoting the singular number shall include the plural and vice versa; and
 
25

 (xviii)
"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)
The determination of the extent to which a rate is "for a period equal in length" to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.
 
(c)
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.
 
(d)
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.
 
(e)
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.
 
"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:
 
26
(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.
 
27
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, in one Utilisation, a secured dollar term loan facility in an aggregate amount not exceeding the Commitment, in Advance A, Advance B and Advance C.
 
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 Borrower, 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 Borrower shall be bound as though the Borrower itself 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.
 
28
4
CONDITIONS OF UTILISATION
 
4.1
Initial conditions precedent
 
The Borrowers may not deliver the 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
Conditions precedent to Utilisation Request
 
The Lender will only be obliged to comply with Clause 5.4 (Lender's Participation) if:
 
(a)
on the date of the Utilisation Request and on the proposed Utilisation Date and before the Loan is made available:
 

 (i)
no Default which is continuing has occurred or would result from the proposed advance of the Loan;
 

 (ii)
the Repeating Representations to be made by each Transaction Obligor are true in all material respects;
 

 (iii)
no event has occurred which would give rise to the provisions of Clause 10.2 (Market disruption);
 

 (iv)
no event described in paragraph (a) of Clause 7.2 (Change of control) has occurred; and
 

 (v)
no Ship has been sold or become a Total Loss; and
 
(b)
the Lender has received on or before the proposed Utilisation Date, or is satisfied it will receive when the Loan is made available, all of the documents and other evidence listed in Part A of Schedule 2 (Conditions precedent) in form and substance satisfactory to the Lender.
 
4.3
Conditions precedent to Utilisation
 
The Lender shall only be obliged to comply with Clause 5.4 (Lender's participation) if:
 
(a)
on the Utilisation Date and, in the case of Advance A, before it is released to the Lessor:
 

 (i)
no Default which is continuing has occurred or would result from the proposed Utilisation or, as the case may be, release;
 

 (ii)
the Repeating Representations to be made by each Transaction Obligor are true;
 

 (iii)
no event has occurred which would give rise to the provisions of Clause 10.2 (Market disruption);
 

 (iv)
no Ship has been sold or become a Total Loss; and
 

 (v)
no event described in paragraph (a) of Clause 7.2 (Change of control) has occurred; and
 
(b)
the Lender has received on the Delivery Date, or is satisfied it will receive when the proposed advance of the Loan is made available, or in the case of Advance A, on the date that such Advance is released to the Lessor, all of the documents and other evidence listed in Part B of Schedule 2 (Conditions precedent) in form and substance satisfactory to the Lender.
 
29
4.4
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), Clause 4.2 (Conditions precedent to Utilisation Request) or Clause 4.3 (Conditions precedent to release of Loan).
 
4.5
Waiver of conditions precedent
 
If the Lender, at its discretion, permits the Loan to be borrowed before any of the conditions precedent referred to in Clause 4.1 (Initial conditions precedent), Clause 4.2 (Conditions precedent to Utilisation Request) or Clause 4.3 (Conditions precedent to Utilisation) has been satisfied, the Borrowers shall ensure that that condition is satisfied within ten Business Days after the Utilisation Date or such later date as the Lender may agree in writing with the Borrowers.
 
30
SECTION 3

UTILISATION
 
5
UTILISATION
 
5.1
Delivery of the Utilisation Request
 
(a)
The Borrowers may utilise the Facility 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 for the Loan.
 
5.2
Completion of the Utilisation Request
 
(a)
The 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 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 Utilisation may be requested in the Utilisation Request.
 
5.3
Currency and amount
 
(a)
The currency specified in the Utilisation Request must be dollars.
 
(b)
The amount of the Loan must be an amount not exceeding the lesser of (i) $34,000,000 and (ii) circa 45 per cent. of the aggregate Initial Market Value of the Ships and shall be available in the following Advances:
 

 (i)
in relation to Advance A, an amount not exceeding $20,210,000;
 

 (ii)
in relation to Advance B, an amount not exceeding $13,200,000; and
 
 
(iii)
in relation to Advance C, an amount not exceeding $590,000.
 
(c)
The amount of the Loan must be an amount which is not more than the Available Facility.
 
5.4
Lender's Participation
 
If the conditions set out in this Agreement have been met, the Lender shall make the Loan available by the Utilisation Date through its Facility Office.
 
5.5
Cancellation of Commitment
 
On the earlier of the date on which the Loan has been made and the end of the Availability Period, any Commitment which is then unutilised shall be cancelled.
 
31
5.6
Retentions and payment to third parties
 
The Borrowers irrevocably authorise the Lender:
 
(a)
to deduct from the proceeds of the Loan 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 Utilisation Request and to apply them in payment of the items to which they relate; and
 
(b)
on the Utilisation Date, to pay to, or for the account of, the Borrowers the amount of the Loan as follows:
 

 (i)
subject to Clause 5.8 (Prepositioning of funds), in the case of Advance A, to the account of the Escrow Agent which the Borrowers specify in the Utilisation Request, to be held to the order of the Lender in accordance with the terms of the Escrow Agreement;
 

 (ii)
in the case of Advance B, to the account of the Existing Lender under the Existing Loan Agreement which the Borrowers specify in the Utilisation Request; and
 

 (iii)
in the case of Advance C, to the account of Borrower B.
 
5.7
Disbursement of Loan 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 Loan and the Borrowers shall at that time become indebted, as principal and direct obligor, to the Lender in an amount equal to the Loan.
 
5.8
Prepositioning of funds
 
If the Lender, at the request of the Borrowers and on terms acceptable to the Lender and in its absolute discretion, prepositions Advance A (the "Prepositioned Funds") with the Lessor's bank or any other bank (including, for the avoidance of doubt, the Escrow Agent's bank), as the Borrowers may have agreed with the Lender in advance of the proposed Utilisation Date and as specified in the Utilisation Request, the following terms shall apply:
 

 (a)
the Prepositioned Funds shall be held to the order of the Lender until such time as the Lender confirms in writing that the Prepositioned Funds may be released to the Lessor in accordance with Clause 5.6 (Retentions and payment to third parties);
 

 (b)
the date on which the Prepositioned Funds are prepositioned shall constitute the Utilisation Date;
 

 (c)
the Obligors 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 the Loan after the Utilisation Date or, if such Utilisation Date does not occur, within three Business Days of demand by the Lender; and
 

 (d)
the Obligors shall, without duplication, indemnify the Lender against any costs, loss or liability it may incur in connection with such arrangement.
 
32
SECTION 4
 
REPAYMENT, PREPAYMENT AND CANCELLATION
 
6
REPAYMENT
 
6.1
Repayment of Loan
 
(a)
The Borrowers shall repay the Loan by:
 

 (i)
twenty (20) consecutive quarterly instalments (each an "Instalment" and together, the "Instalments"), the first four (4) (1st to 4th (both inclusive)) such Instalments each in an amount equal to $1,200,000, followed by sixteen (16) such Instalments (5th to 20th (both inclusive)) each in an amount equal to $900,000; and
 

 (ii)
on the Repayment Date of the last (20th) and final Instalment, a balloon instalment in the amount of $14,800,000 (the "Balloon Instalment" and together with the Instalments, the "Repayment Instalments"),
 
provided that if the amount of the Loan utilised by the Borrowers is less than the Commitment, the Instalments and the Balloon Instalment shall be reduced pro rata by an amount in aggregate equal to such undrawn amount.
 
(b)
The first Instalment shall be repaid on the date falling three Months after the Utilisation Date, each subsequent Instalment at three monthly intervals thereafter and the last Instalment payable together with the Balloon Instalment on the Termination Date.
 
6.2
Reduction of Repayment Instalments
 
If any part of the Facility is cancelled, the Repayment Instalments falling after that cancellation shall be reduced pro rata by the amount cancelled.
 
6.3
Termination Date
 
On the 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 and Sanctions affecting the Lender
 
If it becomes unlawful or contrary to Sanctions 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 upon such notification, the Available Facility will be immediately cancelled; and
 
33
(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.
 
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 7 Business Days' (or such shorter period as the Lender may agree) prior notice, cancel the whole or any part (being a minimum amount of $100,000 (or an integral multiple thereof) or such other amount as the Lender may agree) of the Available Facility.
 
34
(b)
The unutilised Commitment (if any) shall be automatically cancelled at close of business on the earlier of (a) the Utilisation Date and (b) the end of the Availability Period.
 
7.4
Voluntary prepayment of Loan
 
(a)
The Borrowers may, if they give the Lender not less than 7 Business 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 $100,000 or a multiple of that amount (or such other amount as the Lender may agree)).
 
(b)
Any partial prepayment under this Clause 7.4 (Voluntary prepayment of Loan) shall reduce pro rata against the Instalments and the Balloon Instalment falling due after that prepayment by, the amount prepaid or, at the Borrowers' request and in the sole discretion of the Lender, in order of maturity of the Repayment Instalments falling due after the date of such partial prepayment.
 
7.5
Mandatory prepayment on sale or Total Loss or Refinancing
 
(a)
If a Ship is sold (without prejudice to paragraph (a) of Clause 22.12 (Disposals)) or becomes a Total Loss or in the case of a refinancing of a Ship by another bank or financial institution (the "Refinancing"), the Borrowers shall on the Relevant Date prepay the Relevant Amount.
 
(b)
In this Clause 7.5 (Mandatory prepayment on sale or Total Loss or Refinancing):
 
"Relevant Amount" means an amount which after the application of the prepayment to be made pursuant to this Clause 7.5 (Mandatory prepayment on sale of Total Loss or Refinancing) is equal to (a) the Loan, multiplied by the ratio of the Market Value of the Ship which is sold or has become a Total Loss to the aggregate Market Value of the Ships plus (b) any additional amount, as may be required, so that the Security Cover Ratio immediately after such prepayment is equal to or higher than 125 per cent.
 
"Relevant Date" means:
 

 (a)
in the case of a sale of a Ship, on the date on which the sale is completed by delivery of that Ship to the buyer of that Ship; and
 

 (b)
in the case of a Total Loss of a Ship, on the earlier of:
 

 (i)
the date falling 180 days after the Total Loss Date; and
 

 (ii)
the date of receipt by the Lender of the proceeds of insurance relating to such Total Loss.
 

 (c)
in the case of the Refinancing, the day on which the amount of the existing indebtedness under this Agreement is repaid or prepaid in full.
 
(c)
Any remaining proceeds of the sale or Total Loss of a Ship after the prepayment referred to in paragraph (a) above has been made together with all other amounts that are payable on any such prepayment pursuant to the Finance Documents shall be released to the Borrower that owned the relevant Ship Provided that no Event of Default which is continuing has occurred on or prior to the date of such release.
 
35
(d)
Unless otherwise agreed between the Lender and the Borrowers, any partial prepayment of the Loan under this Clause 7.5 (Mandatory prepayment on sale or Total Loss or Refinancing) shall reduce pro rata against the Instalments and the Balloon Instalment falling due after that prepayment.
 
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 and subject to any Break Costs, without premium or penalty.
 
(c)
Neither Borrower may reborrow any part of the Facility which is prepaid.
 
(d)
Neither 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.
 
36
SECTION 5
 
COSTS OF UTILISATION
 
8
INTEREST
 
8.1
Calculation of interest
 
The rate of interest on the Loan or any part of the Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:
 
(a)
Margin; and
 
(b)
Reference Rate for that Interest Period.
 
8.2
Payment of interest
 
(a)
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").
 
(b)
If an Interest Period is longer than three Months, the Borrowers shall also pay interest then accrued on the Loan or the relevant part of the Loan on the dates falling at three Monthly intervals after the first day of the Interest Period.
 
8.3
Default interest
 
(a)
If a Transaction 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, subject to paragraph (b) below, is 2 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 Obligors on demand by the Lender.
 
(b)
If an Unpaid Sum consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan or that part of the Loan:
 

 (i)
the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan or that part of the Loan; and
 

 (ii)
the rate of interest applying to that Unpaid Sum during that first Interest Period shall be 2 per cent. per annum higher than the rate which would have applied if that Unpaid Sum had not become due.
 
(c)
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.
 
37
8.4
Notifications
 
The Lender shall promptly notify the Borrowers of the determination of a rate of interest under this Agreement.
 
8.5
Margin Reset
 
(a)
The Borrowers, the Parent Guarantor or any of its Subsidiaries may by no later than the first day of any Interest Period (the "Relevant Interest Period") pledge additional cash deposits in the form of time deposits (in increments of $1,000,000) up to the aggregate amount of the Loan outstanding at the time (the "Pledged Amount") in the Cash Collateral Account whereby the Margin for only that part of the Loan being equal to the Pledged Amount, shall be reduced to 0.75 per cent. per annum (the "Adjusted Margin").
 
(b)
The Obligors shall retain the Pledged Amount in the Cash Collateral Account for the whole duration of the Relevant Interest Period and may only make use of the whole or part of it after the end of the Relevant Interest Period and subject to the Lender receiving notice of such intention of the Borrowers by no later than 11 a.m. (Athens time) on the third Business Day before the beginning of the next Interest Period.
 
9
INTEREST PERIODS
 
9.1
Selection of Interest Periods
 
(a)
The Borrowers may select the Interest Period for the Loan in the Utilisation Request. Subject to paragraph (f) and Clause 9.2 (Changes to Interest Periods), the Borrowers may select each subsequent Interest Period in respect of the Loan in a Selection Notice.
 
(b)
Each Selection Notice is irrevocable and must be delivered to the Lender by the Borrowers not later than the Specified Time.
 
(c)
If the Borrowers fail to select an Interest Period in the Utilisation Request or fail to deliver a Selection Notice to the Lender in accordance with paragraphs (a) and (b) above, the relevant Interest Period will, subject to paragraphs (f) below and Clause 9.2 (Changes to Interest Periods), be three Months.
 
(d)
Subject to this Clause 9 (Interest Periods), the Borrowers may select an Interest Period of one or three Months or any other period agreed between the Borrowers and the Lender.
 
(e)
An Interest Period in respect of the Loan shall not extend beyond the final Termination Date.
 
(f)
In respect of a Repayment Instalment, the Borrowers may request in the relevant Selection Notice that an Interest Period for a part of the Loan equal to such Repayment Instalment shall end on the Repayment Date relating to it and, subject to paragraph (d) above, select a longer Interest Period for the remaining part of the Loan.
 
(g)
The first Interest Period for the Loan shall start on the Utilisation Date and each subsequent Interest Period shall start on the last day of the preceding Interest Period.
 
(h)
Except for the purposes of paragraph (f) above and Clause 9.2 (Changes to Interest Periods), the Loan shall have one Interest Period only at any time.
 
38
9.2
Changes to Interest Periods
 
(a)
In respect of a Repayment Instalment, before the commencement of an Interest Period, the Lender may establish an Interest Period for a part of the Loan equal to such Repayment Instalment to end on the Repayment Date relating to it and the remaining part of the Loan shall have the Interest Period selected in the relevant Selection Notice, subject to paragraph (d) of Clause 9.1 (Selection of Interest Periods).
 
(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.
 
9.3
Non-Business Days
 
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).
 
10
CHANGES TO THE CALCULATION OF INTEREST
 
10.1
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 a period equal in length to the Interest Period of 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 (b) above applies but it is not possible to calculate the Interpolated Historic Term SOFR, there shall be no Reference Rate for that Loan or that part the Loan and Clause 10.3 (Cost of funds) shall apply to the Loan or that part of the Loan for that Interest Period.
 
10.2
Market disruption
 
If before close of business in London on the Quotation Day for the relevant Interest Period, the Borrowers receive notification from the Lender that its cost of funds relating to the Loan or that part of the Loan would be in excess of the 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.
 
39
10.3
Cost of funds
 
(a)
If this Clause 10.3 (Cost of funds) applies to the Loan or that part of the Loan for an Interest Period and the rate of interest on the Loan or that part of the 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 by the Lender to the Borrowers as soon as practicable and in any event within three Business Days of the first day of that Interest Period (or, if earlier, on the date falling two Business Days 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 the Loan or that part of the Loan; and
 
(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.
 
(c)
Subject to Clause 44.1 (Changes to reference rates), any substitute or alternative basis agreed pursuant to paragraph (b) above shall be binding on all Parties.
 
10.4
Break Costs
 
The Borrowers shall, within three Business Days of demand by the Lender, pay to the Lender its Break Costs attributable to all or any part of the Loan or an Unpaid Sum being paid by the Borrowers on a day prior to the last day of an Interest Period for the Loan, the relevant part of the Loan or that Unpaid Sum.
 
11
FEES
 
11.1
Arrangement fee
 
The Borrowers shall pay to the Lender on the Utilisation Date, a non-refundable arrangement fee of 0.80 per cent. of the Loan.
 
40
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.
 
41
(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).
 
42
(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 (c) 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;
 
43

 (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;
 
44

 (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, amongst others, 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, amongst others, 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);
 
45
(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;
 

 (B)
a failure by a Transaction Obligor to pay any amount due under a Finance Document on its due date;
 

 (C)
funding, or making arrangements to fund, the Loan requested by the Borrowers in the 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; and
 

 (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.
 
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(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 a Borrower 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;
 

 (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;
 
47

 (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.
 
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 and Sanctions affecting the Lender), Clause 12 (Tax Gross Up and Indemnities), or Clause 13 (Increased Costs) including (but not limited to) assigning its rights under the Finance Documents to another Affiliate or Facility Office.
 
(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).
 
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(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) 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
 
If:
 
(a)
a Transaction Obligor requests an amendment, waiver or consent;
 
(b)
an amendment is required 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.
 
49
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 other 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:
 
50
(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).
 
51
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.
 
52
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.
 
53
18.4
Borrower restrictions
 
(a)
Subject to paragraph (b) below, during the Security Period no Borrower shall:
 

 (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.
 
54
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.
 
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 other 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 authorised to issue 500 registered shares with no par value, all of which shares have been issued fully paid.
 
(b)
The Parent Guarantor is authorised to issue 525,000,000 shares consisting of 500,000,000 registered shares of common stock with a par value of US$0.0001 each and 25,000,000 registered shares of preferred stock with a par value of US$0.0001 each, out of which, as at the date of this Agreement, 20,600,991 registered shares of common stock, 20,000 Series B preferred shares, 4,368,750 class D warrants are outstanding to purchase 27,304 registered shares of common stock and 2,694,599 class E warrants are outstanding to purchase 269,459 registered shares of common stock.
 
(c)
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.
 
(d)
None of the shares in any Borrower is subject to any option to purchase, pre-emption rights or similar rights.
 
19.4
Binding obligations
 
The obligations expressed to be assumed by it in each Transaction Document to which each 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.
 
(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.
 
55
(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 each 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 such Transaction Obligor or any such 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)
the 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 a Borrower, the registration of the Ship owned by it under the relevant Approved Flag.
 
(b)
No limit on each Obligor's 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.
 
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.
 
56
(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 member of the Group.
 
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 for the registration of a Mortgage, which registration will be made on the date of that Mortgage.
 
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 and on the Utilisation Date, no Default is continuing or might reasonably be expected to result from the making of a 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 and which might reasonably expected to have a Material Adverse Effect.
 
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.
 
57
(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.
 
(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.
 
(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 the date of the Original Financial Statements.
 
(d)
Its most recent financial statements delivered pursuant to Clause 20.2 (Financial statements):
 

 (i)
have been prepared in accordance with Clause 20.3 (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.
 
(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 other Transaction Obligor.
 
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19.18
Validity and completeness of the Deed of Release and the MOA
 
(a)
Each of the Deed of Release and the MOA constitute legal, valid, binding and enforceable obligations of the Existing Lender and the Lessor (as applicable).
 
(b)
The copies of the Deed of Release and the MOA delivered to the Lender before the date of this Agreement are true and complete copy.
 
(c)
No amendments or additions to the Deed of Release or the MOA have been agreed nor have any rights under the Deed of Release or the MOA 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
 
No Obligor 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, neither 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.
 
19.23
No Environmental Claim
 
No Environmental Claim has been made or threatened against any Transaction Obligor or either Ship which might reasonably 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 which could give rise to an Environmental Claim.
 
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19.25
ISM and ISPS Code compliance
 
All requirements of the ISM Code and the ISPS Code as they relate to each Borrower, any Approved Manager and each Ship have been complied with.
 
19.26
Taxes paid
 
(a)
It is not materially overdue in the filing of any Tax returns and it is not 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 with respect to Taxes.
 
19.27
Financial Indebtedness
 
Neither Borrower has any Financial Indebtedness outstanding other than Permitted Financial Indebtedness.
 
19.28
Overseas companies
 
No Transaction 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)
With effect on and from the Delivery Date, Borrower A will be the sole legal and beneficial owner of Ship A, its Earnings and its Insurances.
 
(b)
Borrower B is the sole legal and beneficial owner of Ship B, its Earnings and its Insurances.
 
(c)
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.
 
(d)
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.
 
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 in Greece and it has no "establishment" (as that term is used in Article 2(10) of the Regulation) in any other jurisdiction.
 
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19.32
Place of business
 
No Obligor has a place of business in any country other than Greece and its executive office functions are carried out, in the case of each Obligor, at c/o 154 Vouliagmenis Avenue, 166 74 Glyfada, Athens, Greece.
 
19.33
No employee or pension arrangements
 
Neither Borrower has any employees or any liabilities under any pension scheme.
 
19.34
Sanctions
 
(a)
No Transaction Obligor nor, to the best of the knowledge of each such Transaction Obligor, their respective directors, officers, employees or their respective agents:
 

 (i)
are a Prohibited Person or are otherwise owned or controlled by or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person;
 

 (ii)
own or control a Prohibited Person; or
 

 (iii)
have received notice of or are aware of any claim, action, suit, proceedings or investigation against them with respect to Sanctions.
 
(b)
Each Transaction Obligor, their Subsidiaries and, to the best of the knowledge of each such Transaction Obligor, their respective directors, officers, employees or their respective agents, are in compliance with Sanctions in all material respects and are not knowingly engaged in any activity that would reasonably be expected to result in such Transaction Obligor being designated as a Prohibited Person.
 
(c)
Neither Ship is a Sanctioned Ship.
 
19.35
US Tax Obligor
 
No Obligor is a US Tax Obligor.
 
19.36
Anti-corruption law
 
Each Obligor has conducted its respective business in compliance with applicable anti-corruption laws and has instituted and maintained procedures designed to promote and achieve compliance with such laws, and to the best knowledge and belief of each Obligor, each other Transaction Obligor has conducted its respective business in compliance with applicable anti-corruption laws and has instituted and maintained procedures designed to promote and achieve compliance with such laws.
 
19.37
Completeness of documents
 
The copies of any Transaction Documents and any other relevant documents provided or to be provided by the Borrowers to the Lender in accordance with Clause 4 (Conditions of Utilisation) are, or will be, true and accurate copies of the originals and represent, or will represent, the full agreement between the parties to those documents and there are no commission, rebates, premiums or other payments due or to become due in connection with the subject matter of those documents other than as disclosed to, and approved in writing by, the Lender.
 
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19.38
Money Laundering
 
Any borrowing by the Borrowers under this Agreement, and the performance of its obligations under the Finance Documents, will be for its own account and will not involve any breach by it of any law or regulatory measure relating to "money laundering" as defined in Article 1 of the Directive 2015/849/EC of the European Parliament and of the Council of the European Communities.
 
19.39
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 the 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
 
The Obligors shall supply to the Lender:
 
(a)
as soon as they become available, but in any event within 180 days after the end of each of its financial years, the annual audited consolidated financial statements of the Parent Guarantor for that financial year; and
 
(b)
as soon as they become available, but in any event within 180 days after the end of each of their respective financial years, the annual unaudited financial statements of each Borrower for that financial year.
 
20.3
Compliance Certificate
 
(a)
The Parent Guarantor shall supply to the Lender a Compliance Certificate together with each set of financial statements delivered pursuant to paragraph (a) of Clause 20.2 (Financial statements), setting out (in reasonable detail) computations as to compliance with Clause 21 (Financial Covenants) as at the date as at which those financial statements were drawn up and shall be reported on by the Parent Guarantor's auditors in the form agreed by the Parent Guarantor and the Lender before the date of this Agreement.
 
(b)
Each Compliance Certificate shall be signed by a senior officer (including, for the avoidance of doubt, the Chief Financial Officer) of the Parent Guarantor.
 
20.4
Requirements as to financial statements
 
(a)
Each set of financial statements delivered by the Obligors 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.
 
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(b)
The Borrowers shall procure that each set of financial statements delivered pursuant to Clause 20.2 (Financial statements) is prepared using GAAP.
 
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 or is required to be disclosed pursuant to The International Tax Enforcement (Disclosable Arrangements) Regulations 2023; 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 or under The International Tax Enforcement (Disclosable Arrangements) Regulations 2023 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 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 Transaction Obligor 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 Transaction Obligor 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;
 
63

 (iv)
the financial condition, business and operations of any Transaction Obligor,
 
as the Lender may reasonably request;
 
(f)
bank statements from any relevant account bank as evidence of compliance with Clause 21.1 (Minimum Cash Reserve); and
 
(g)
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.
 
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 its senior 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).
 
20.8
"Know your customer" checks
 
If:
 
(a)
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;
 
(b)
any change in the status of a Transaction Obligor (including, without limitation, a change of ownership of a Transaction Obligor) after the date of this Agreement; or
 
(c)
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 (c) 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 (c) above, on behalf of any prospective assignee) in order for the Lender or, in the case of the event described in paragraph (c) 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.
 
21
FINANCIAL COVENANTS
 
21.1
Minimum Cash Reserve
 
(a)
The Parent Guarantor shall ensure that at all times it shall maintain Cash in an amount not less than the product of (i) the number of Fleet Vessels and (ii) $500,000 per Fleet Vessel (the "Minimum Cash Reserve").
 
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(b)
The financial covenant set out in paragraph (a) above shall be tested by reference to the financial statements of the Parent Guarantor delivered pursuant to paragraph (a) of Clause 20.2 (Financial Statements) and each Compliance Certificate delivered pursuant to Clause 20.3 (Compliance Certificate).
 
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;
 

 (iii)
own and operate each Ship (in the case of the Borrowers); and
 
(c)
without prejudice to the generality of the above, ensure that if, but for the obtaining of an Authorisation, an Obligor would be in breach of any of the provisions of this Agreement which relate to Sanctions or, by reason of Sanctions, would be prohibited from performing any provision of this Agreement, such an Authorisation is obtained so as to avoid such breach or to enable such performance.
 
22.3
Compliance with laws
 
Each Obligor shall, and shall procure that each other Transaction Obligor will, comply in all respects with all laws and regulations to which it may be subject, if failure so to comply has or is reasonably likely to have a Material Adverse Effect.
 
22.4
Environmental compliance
 
Each Obligor shall, and shall procure that each other Transaction Obligor 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.
 
65
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:
 
(a)
any Environmental Claim against any Transaction Obligor 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 Transaction Obligor,
 
where the claim, if determined against that Transaction Obligor, 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, and the Obligors shall procure that no other Transaction Obligor will, 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.
 
66
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.
 
22.10
Title
 
(a)
With effect from the Delivery Date, Borrower A shall hold the legal title to, and own the entire beneficial interest in Ship A, its Earnings and its Insurances.
 
(b)
Borrower B shall hold the legal title to, and own the entire beneficial interest in Ship B, its Earnings and its Insurances.
 
(c)
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)
Neither Borrower shall:
 

 (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 Obligor 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:
 

 (i)
in the case of a Borrower, any asset (including without limitation its Ship, its Earnings or its Insurances); and
 

 (ii)
in the case of the Parent Guarantor, all or substantially all of its assets.
 
(b)
Paragraph (a) above does not apply to:
 
67

 (i)
any Charter as all Charters are subject to Clause 24.16 (Restrictions on chartering, appointment of managers etc.); and
 

 (ii)
a sale of a Ship Provided that the Borrowers comply with the prepayment obligations in Clause 7 (Prepayment and Cancellation).
 
22.13
Merger
 
No Obligor shall enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction other than an amalgamation, demerger, merger, consolidation or corporate reconstruction of the Parent Guarantor under which the Parent Guarantor is the surviving entity.
 
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.
 
(b)
Neither Borrower shall engage in any business other than the ownership and operation of its Ship.
 
22.15
Financial Indebtedness
 
Neither Borrower shall incur or permit to be outstanding any Financial Indebtedness except for Permitted Financial Indebtedness and any Financial Indebtedness to be incurred in the normal course of a Borrower's operations, with the Lender's prior written consent.
 
22.16
Expenditure
 
Neither Borrower shall incur any expenditure, except for expenditure reasonably incurred in the ordinary course of owning, operating, insuring, maintaining and repairing its Ship.
 
22.17
Share capital
 
Neither 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 other than to the Parent Guarantor and provided such new shares are made subject to the terms of a 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
 
Neither Borrower shall, following the occurrence of an Event of Default which is continuing or would result from such payment or declaration:
 
68
(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.
 
22.19
Other transactions
 
Neither Borrower shall:
 
(a)
be the creditor in respect of any loan or any form of credit to any person other than another Transaction 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 other than:
 

 (i)
the Transaction Documents;
 

 (ii)
any other agreement expressly allowed under any other term of this Agreement; and
 
(d)
enter into any transaction on terms which are, in any respect, less favourable to that Borrower than those which it could obtain in a bargain made at arms' length; or
 
(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.
 
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 or contrary to Sanctions 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 undertakings
 
(a)
No proceeds of the Loan or any part of the Loan shall be made available, directly or indirectly, to or for the benefit of a Prohibited Person nor shall they be otherwise, directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions, or to fund any activity in a Sanctioned Country or in any manner which would cause the Lender to be in breach of or made subject to Sanctions, or at risk of being in breach of or made subject to Sanctions.
 
(b)
No Transaction Obligor shall fund all or any part of any payment or repayment under the Loan out of proceeds directly or indirectly derived from any activity in a Sanctioned Country or any transaction with a Prohibited Person, or out of proceeds directly or indirectly derived from any other transactions which would be prohibited by Sanctions or in any other manner which would cause the Lender to be in breach of or made subject to Sanctions, or at risk of being in breach of or made subject to Sanctions and no such proceeds shall be paid into an Earnings Account.
 
(c)
Each of the Transaction Obligors has implemented and shall maintain in effect a Sanctions compliance policy which, in accordance with the recommendations of the Sanctions Advisory, is designed to ensure compliance by each such Transaction Obligor, their Subsidiaries and their respective directors, officers, employees and agents with Sanctions.
 
22.22
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 reasonably 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;
 

 (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.
 
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(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 22.22 (Further assurance), that Obligor shall deliver, or shall procure that such other Transaction Obligor will deliver, to the Lender reasonable evidence that that Obligor's or Transaction Obligor's execution of such document has been duly authorised by it.
 
22.23
Financial developments
 
Without prejudice to the obligations of the Obligors pursuant to Clause 20.6 (Information miscellaneous), the Obligors shall promptly inform the Lender of all major financial developments affecting the Obligors or any Approved Manager, including but not limited to their financial standing, commitments and operations as the Lender may reasonably request from time to time.
 
22.24
Anti-corruption law
 
(a)
Each Obligor shall not directly or indirectly use the proceeds of the Loan for any purpose which would breach the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions.
 
(b)
Each Obligor shall:
 

 (i)
conduct its businesses in compliance with applicable anti-corruption laws; and
 

 (ii)
maintain procedures designed to promote and achieve compliance with such laws.
 
22.25
No variation, release etc. of MOA
 
Borrower A shall not, whether by a document, by conduct, by acquiescence or in any other way:
 
(a)
vary the MOA; or
 
(b)
release, waive, suspend, subordinate or permit to be lost or impaired any interest or right of any kind which Borrower A has at any time to, in or in connection with, the MOA or in relation to any matter arising out of or in connection with the MOA.
 
22.26
Provision of information relating to MOA
 
Without prejudice to Clause 20.6 (Information: miscellaneous), Borrower A shall:
 
(a)
immediately inform the Lender if any breach of the MOA occurs or a serious risk of such a breach arises and of any other event or matter affecting the MOA which has or is reasonably likely to have a Material Adverse Effect; and
 
(b)
upon the reasonable request of the Lender, keep the Lender informed as to any notice of readiness of delivery of Ship A.
 
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22.27
No assignment etc. of MOA
 
Borrower A shall not assign, novate, transfer or dispose of any of its rights or obligations under the MOA.
 
23
INSURANCE UNDERTAKINGS
 
23.1
General
 
The undertakings in this Clause 23 (Insurance Undertakings) remain in force from the date of this Agreement 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;
 
(c)
protection and indemnity risks; and
 
(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 notice to that Borrower.
 
23.3
Terms of obligatory insurances
 
Each Borrower shall effect such insurances:
 
(a)
in dollars;
 
(b)
in the case of fire and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of:
 

 (i)
125 per cent. of the amount of the Loan; and
 

 (ii)
the Market Value of the Ships;
 
(c)
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;
 
(d)
in the case of protection and indemnity risks, in respect of the full tonnage of its Ship;
 
(e)
on approved terms; and
 
(f)
through Approved Brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.
 
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23.4
Further protections for the Lender
 
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:
 
(a)
subject always to paragraph (b), name that Borrower as the sole named insured unless the interest of every other named insured 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 it has 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 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;
 
(b)
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;
 
(c)
name the Lender as loss payee with such directions for payment as the Lender may specify;
 
(d)
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;
 
(e)
provide that the obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Lender; and
 
(f)
provide that the Lender may make proof of loss if that Borrower fails to do so.
 
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 7 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)
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 7 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
 

 (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.
 
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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)
a letter or letters of undertaking in such form as may be required by the Lender; and
 
(c)
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 and without prejudice to the Borrowers' obligations under Clause 23 (General Ship Undertakings), 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 (b) 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 unless they are approved by the underwriters of the obligatory insurances (to the extent this is required under the terms 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
 
75

 (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
 
Neither Borrower shall make or agree to any alteration to the material terms of any obligatory insurance or waive any right relating to any obligatory insurance, subject to the prior written consent of the Lender (such consent not to be unreasonably withheld or delayed).
 
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 material communication (being any communication which is of a routine nature), with copies of all written communications 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) reasonably 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
 
76
(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 each in an amount equal to 120 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.
 
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 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 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 related Deed of Covenant (if applicable) 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.
 
77
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; and
 
(b)
so as to maintain the Approved Classification free of overdue recommendations and conditions affecting that Ship's class.
 
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):
 
(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.
 
78
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 and the related Deed of Covenant (if applicable).
 
(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.
 
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
 
(a)
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 reasonable notice and without interfering with that Ship's daily operations and normal course of trading to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections.
 
(b)
Each Borrower shall permit the Lender, at its own cost, to inspect the Ship owned by it once in each 12-month period (starting on the Utilisation Date) and at any time after an Event of Default has occurred and is continuing.
 
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.
 
79
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
 

 (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.
 
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 and Ship trading
 
Without limiting Clause 24.10 (Compliance with laws etc.), each Borrower shall procure:
 
(a)
that the Ship owned by it shall not be used by or for the benefit of a Prohibited Person or in trading to or from a Sanctioned Country;
 
(b)
that the Ship owned by it shall not otherwise be used in any manner contrary to Sanctions, or in a manner that creates a risk that a Transaction Obligor will become a Prohibited Person or in any manner which would likely cause the Lender to be in breach of or made subject to Sanctions, or at risk of being in breach of or made subject to Sanctions;
 
(c)
that the Ship owned by it shall not be used in trading in any manner that likely creates a risk that such Ship will become a Sanctioned Ship;
 
80
(d)
that the Ship owned by it shall not be traded in any manner which would likely trigger the operation of any sanctions limitation or exclusion clause (or similar) in the Insurances; and
 
(e)
without prejudice to the above provisions of this Clause 24.12 (Sanctions and Ship trading), that each time charterparty in respect of the Ship owned by it shall contain, for the benefit of that Borrower, language which gives effect to the provisions of paragraph (a) of Clause 24.10 (Compliance with laws etc.) as regards Sanctions and paragraph (b) and (c) of this Clause 24.12 (Sanctions and Ship trading) and which charterparty permits refusal of employment or voyage orders if such employment or compliance with such orders either results, or risks resulting in non-compliance with such provisions or breaches, or risks breaching (in the opinion of that Borrower) Sanctions.
 
24.13
Trading in war zones or excluded areas
 
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:
 
(a)
the prior written consent of the Lender has been given; and
 
(b)
that Borrower has (at its expense) effected any special, additional or modified insurance cover which the Lender may require.
 
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 reasonably 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, an Approved Manager's compliance and the compliance of that Ship with the ISM Code and the ISPS Code,
 
and, upon the Lender's request, promptly provide copies of any current Charter relating to that Ship, of any current guarantee of any such 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 in writing, of:
 
(a)
any casualty to that Ship which is or is likely to be or to become a Major Casualty;
 
81
(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 likely 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 or any of their Subsidiaries or any of their respective directors, officers or employees with respect to Sanctions; or
 
(k)
any circumstances which could give rise to a material 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 reasonably require as to that Borrower's or 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 (without the prior written consent of the Lender which shall not be unreasonably withheld) 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;
 
(c)
waive or fail to enforce any rights under an Assignable Charter relevant to that Ship (or any of its provisions), unless such waiver or failure to enforce does not have a Material Adverse Effect and is promptly notified to the Lender;
 
(d)
terminate a Management Agreement unless such Management Agreement is replaced by another Management Agreement with an Approved Manager acceptable to the Lender and such Approved Manager provides a manager's undertaking on substantially the same terms as the Manager's Undertaking;
 
82
(e)
appoint a manager of that Ship other than an Approved Manager or agree to any material alteration to the terms of a Management Agreement or any other Approved Manager's appointment;
 
For the avoidance of doubt, "material" alteration shall include, without limitation, any provisions of the Management Agreement relating to commissions, management fees, duration of the contract, sanctions, change of control or merger.
 
(f)
de activate or lay up that Ship; or
 
(g)
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 $850,000 (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 preferred or, as the case may be, priority 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
 
Neither Borrower shall enter into any agreement or arrangement for the sharing of any Earnings.
 
24.19
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).
 
24.20
Charterparty Assignment
 
If a Borrower enters into any Assignable Charter (subject to obtaining the prior written consent of the Lender in accordance with paragraph (a) or paragraph (b) (as the case may be) of Clause 24.16 (Restrictions on chartering, appointment of managers etc.)) that Borrower shall, at the request of the Lender, execute in favour of the Lender a Charterparty Assignment in respect of that Assignable Charter and shall:
 
(a)
in the case where such Assignable Charter is a time charter, serve notice of that Charterparty Assignment on the relevant charterer and any charter guarantor to and use its reasonable endeavours to procure that that charterer and that charter guarantor acknowledges such notice in such form as the Lender may reasonably approve or require;
 
(b)
in the case where such Assignable Charter is a demise or bareboat charter, use its reasonable endeavours to procure that the relevant bareboat charterer (i) undertakes to: (A) comply with all of that Borrower's undertakings with regard to the employment, insurances, operation, repairs and maintenance of the Ship owned by it contained in this Agreement, the Mortgage on that Ship, any related Deed of Covenant (if applicable) and any General Assignment in relation to that Ship and (B) subordinate its rights and interests under the relevant Assignable Charter to the rights and interests of the Lender under the Finance Documents and (ii) provides an assignment of its rights, title and interest in the Insurances, Earnings and Requisition Compensation of that Ship in agreed form; and
 
83
(c)
in any case, deliver to the Lender such other documents in connection with that Charterparty Assignment as the Lender may reasonably require (including, without limitation, documents equivalent to those referred to in paragraphs 1.2, 1.3, 1.4, 1.5, 2.1, 5.1, 5.2 and 6.1 of Part A of Schedule 2 (Conditions Precedent) in relation to that Borrower and that Assignable Charter).
 
25
SECURITY COVER
 
25.1
Minimum required security cover
 
Clause 25.2 (Provision of additional security; prepayment) applies if the Lender notifies the Borrowers that the Security Cover Ratio is below 125 per cent. of the Loan.
 
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.
 
(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 shipbroker 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 Loan) but ignoring any restriction as to prepayments being made on the last day of the Interest Period.
 
25.7
Provision of valuations
 
Each Borrower shall provide the Lender with a valuation of the Ship owned by it and any other vessel over which additional Security has been created in accordance with Clause 25.2 (Provision of additional security; prepayment), from an Approved Valuer, selected by and addressed to the Lender, at the Borrowers' expense, to enable the Lender to determine the Market Value of that Ship or vessel prior to the Utilisation Date, upon a Ship being sold or becomes Total Loss or at least once in every calendar year thereafter Provided that no Event of Default has occurred, in which case the Lender shall be entitled to obtain at any time, at the Borrowers' expense, valuations of that Ship, from Approved Valuers selected by the Lender, showing the Market Value of that Ship.
 
25.8
Release of additional security
 
If at any time the Lender holds additional security provided under this Clause 25 (Security Cover) and the Borrowers are in compliance with the Minimum Security Cover Ratio under Clause 25.1 (Minimum required security cover) for an immediate preceding consecutive period of at least 30 days (without taking into account the additional security to be released), the Borrowers may 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, at the Borrowers' cost, promptly release and discharge the relevant part of that additional security if no Default is then continuing or will result from such release and discharge.
 
26
ACCOUNTS AND APPLICATION OF EARNINGS
 
26.1
Accounts
 
No Borrower may, without the prior consent of the Lender, maintain any bank account other than the Accounts.
 
26.2
Payment of Earnings
 
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 to its Earnings Account.
 
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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 Accounts; and
 
(b)
execute any documents which the Lender reasonably 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 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 at and in the currency in which it is expressed to be payable unless:
 
(a)
its failure to pay is caused by:
 

 (i)
administrative or technical error; or
 

 (ii)
a Disruption Event; and
 
(b)
payment is made within 5 Business Days of its due date.
 
27.3
Specific obligations
 
A breach occurs of Clause 4.5 (Waiver of conditions precedent), Clause 21 (Financial Covenants), Clause 22.10 (Title), Clause 22.11 (Negative pledge), Clause 22.20 (Unlawfulness, invalidity and ranking; Security imperilled), Clause 23.2 (Maintenance of obligatory insurances), Clause 23.3 (Terms of obligatory insurances), Clause 23.5 (Renewal of obligatory insurances), Clause 24.12 (Sanctions and Ship trading), or, 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 15 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 in any material respect when made or deemed to be made.
 
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27.6
Cross default
 
(a)
Any Financial Indebtedness of any Obligor is not paid when due nor within any originally applicable grace period.
 
(b)
Any Financial Indebtedness of any 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 Obligor is cancelled or suspended by a creditor of any Obligor as a result of an event of default (however described).
 
(d)
Any creditor of any Obligor becomes entitled to declare due and payable any Financial Indebtedness of any Obligor 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 each of the Borrowers and (ii) $5,000,000 in respect of the Parent Guarantor (or, in each case, its equivalent in any other currency).
 
27.7
Insolvency
 
(a)
An 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 Obligor is less than its liabilities (taking into account contingent and prospective liabilities).
 
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 Obligor;
 

 (ii)
a composition, compromise, assignment or arrangement with any creditor of any Obligor;
 
87

 (iii)
the appointment of a liquidator (other than in respect of a solvent liquidation of a member of the Group which is not a Transaction Obligor), receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of any Obligor or any of their respective assets (as applicable); or
 

 (iv)
enforcement of any Security over any assets of any Obligor,
 
or any analogous procedure or step is taken in any jurisdiction.
 
(b)
Paragraph (a) above shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 14 days of commencement.
 
(c)
No Event of Default will occur under this Clause 27.8 (Insolvency proceedings) if any of the events described in paragraph (a) above occurs in respect of an Approved Manager and the relevant Borrower replaces such Approved Manager by another Approved Manager and delivers to the Lender the documents referred to at paragraph 3.4 of Part B of Schedule 2 (Conditions Precedent) within 10 Business Days from the date of such occurrence.
 
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 Business Days (or such later period agreed by the Lender).
 
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.
 
(b)
Any obligation of a Transaction Obligor under the Finance Documents is not or ceases to be legal, valid, binding or enforceable if that cessation individually or together with any other cessations materially or adversely affects the interests of the Lender under the Finance Documents.
 
(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.
 
88
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 60 days of such arrest or detention.
 
27.14
Expropriation
 
The authority or ability of a 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, unless such Transaction Obligor upon receiving notice of such event procures the release of the relevant assets and such assets are redelivered to the full control of that Transaction Obligor within 30 days of such event, 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
 
(a)
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 Transaction Obligor or their respective assets which has or is reasonably likely to have a Material Adverse Effect.
 
(b)
No Event of Default will occur under this clause if:
 

 (i)
the monetary value of the subject matter of such litigation, arbitration or administrative proceedings or investigations is assessable and the combined value thereof does not exceed (i) $500,000 in respect of each of the Borrowers and (ii) $5,000,000 in respect of the Parent Guarantor (or, in each case, its equivalent in any other currency); or
 

 (ii)
any of the circumstances described under paragraph (a) above is stayed or complied or discharged with within 30 Business Days of its commencement.
 
27.17
Sanctions
 
(a)
Any Transaction Obligor nor, to the best of the knowledge of each such Transaction Obligor, any of their respective Subsidiaries, directors, officers or employees is designated a Prohibited Person or a Ship is designated a Sanctioned Ship.
 
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(b)
This Clause 27.17 (Sanctions) is without prejudice to any other Event of Default which may occur by reason of breach of, or non-compliance with, any of the other provisions of this Agreement which relate to Sanctions.
 
27.18
Material adverse change
 
Any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect.
 
27.19
Acceleration
 
On and at any time after the occurrence of an Event of Default which is continuing, the Lender may by notice to the Borrowers:
 
(a)
cancel the Commitment, whereupon it shall immediately or in accordance with the provisions of such notice 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 or in accordance with the provisions of such notice due and payable; and/or
 
(c)
declare that all or part of the Loan be payable on demand, whereupon it shall immediately or in accordance with the provisions of such notice 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

CHANGES TO THE PARTIES
 
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 assign or transfer all any of its rights or transfer by novation any of its rights and obligations or may sub-participate any amount of the Loan under the Finance Documents to another first class international bank or financial institution, insurer or to a trust, social security fund, pension fund, capital investment company, financial intermediary or special purpose vehicle associated to any of them 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 Lender may, at any time, without the consent of or consultation with but upon prior 15 days notice to the Transaction Obligors, cause all or any part of its rights, benefits and/or obligations under this Agreement and the other Finance Documents to be assigned or transferred:
 

 (i)
to an Affiliate of the Existing Lender;
 

 (ii)
to a New Lender;
 

 (iii)
if the Existing Lender is a fund, to a fund which is a Related Fund; or
 

 (iv)
made at a time when an Event of Default has occurred and is continuing.
 
(b)
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.
 
(c)
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 any Borrower or any other Transaction Obligor had against the Existing Lender.
 
91
(d)
Any cost of such assignment or transfer or granting of sub-participation shall be for the account of the Lender and/or the assignee/transferee or sub-participant unless any such assignment, transfer or sub-participation is undertaken at the request of the Borrowers, in which case any cost arising shall be borne by the Borrowers.
 
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
 
29.1
Assignment or transfer by Transaction Obligors
 
No Transaction Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.
 
29.2
Additional Subordinated Creditors
 
(a)
The Borrowers may request that any person becomes a Subordinated Creditor, with the prior approval of the Lender, by delivering to the Lender:
 

 (i)
a duly executed Subordination Agreement;
 

 (ii)
a duly executed Subordinated Debt Security; and
 

 (iii)
such constitutional documents, corporate authorisations and other documents and matters as the Lender may reasonably require, in form and substance satisfactory to the Lender, to verify that the person's obligations are legally binding, valid and enforceable and to satisfy any applicable legal and regulatory requirements.
 
92
(b)
A person referred to in paragraph (a) above will become a Subordinated Creditor on the date the Lender enters into the Subordination Agreement and the Subordinated Debt Security delivered under paragraph (a) above.
 
93
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:
 

 (i)
first, in or towards payment of any unpaid fees, costs and expenses of, and any other amounts owing to, the Lender, any Receiver and any Delegate under the Finance Documents;
 

 (ii)
secondly, in or towards payment of any accrued interest and fees due but unpaid to the Lender under this Agreement;
 

 (iii)
thirdly, in or towards payment of any principal due but unpaid to the Lender under this Agreement; and
 

 (iv)
fourthly, in or towards payment of any other sum due to the Lender but unpaid under the Finance Documents.
 
(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).
 
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(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.
 
(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;
 
95
(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 Obligor 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.).
 
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.
 
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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 email or letter.
 
34.2
Addresses
 
The address, email 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, email, 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:
 
97

 (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
 

 (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 form 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.
 
98
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.
 
35.3
Day count convention and interest calculation
 
(a)
Any interest, commission or fee accruing under a Finance Document will accrue from day to day and 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 a Transaction 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.
 
99
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.
 
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
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;
 
100
(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)
who is a Party, a member of the Group or any related entity of a Transaction Obligor;
 

 (viii)
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
 

 (ix)
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;
 

 (B)
in relation to sub-paragraph (iv) 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;
 
101

 (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.
 
42.6
Notification of disclosure
 
The Lender agrees (to the extent permitted by law and regulation) to inform the Borrowers:
 
102
(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)
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 sub-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;
 

 (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
 
103

 (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)
Each Obligor agrees (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
AMENDMENTS
 
44.1
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 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 Borrowers.
 
104
(b)
In this Clause 44.1 (Changes to reference rates):
 
"Published Rate" means:
 

 (a)
SOFR; or
 

 (b)
Term SOFR for any Quoted Tenor.
 
"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 Borrowers, 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:
 
105

 (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)
that Published Rate is calculated in accordance with any such policy or arrangement for a period no less 15 Business Days; or
 

 (d)
in the opinion of the Lender and the Borrowers, that Published Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement.
 
"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:
 

 (b)
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
 

 (c)
any Relevant Nominating Body,
 

 (d)
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 (b) above;
 

 (e)
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 a Published Rate; or
 

 (f)
in the opinion of the Lender and the Borrowers, an appropriate successor or alternative to a Published Rate.
 
45
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.
 
46
DATA PROTECTION
 
46.1
Data Protection
 
For the scope of this Agreement, all Parties may exchange and process personal data. The Parties will be acting as separate independent controllers, determining the purposes and the means of the processing made by them or on their behalf:
 
(a)
The Parties agree and undertake to process the personal data exclusively for the purposes defined in this Agreement and in accordance with the provisions of this Agreement and the applicable Data Protection Legislation, including local laws and regulations, the GDPR Regulation and any guidelines published by the European Data Protection Board and competent supervisory authorities.
 
106
(b)
The Parties have designed and implemented appropriate policies and procedures for the protection of personal data and undertake to treat the personal data exchanged as strictly confidential.
 
(c)
The Parties shall limit access to the personal data to individuals and/or legal entities strictly necessary for the performance, management and monitoring of this Agreement. The Parties shall ensure any individual and/or legal entity that is granted access to the personal data exchanged shall be subject to an obligation of secrecy and/or have signed in advance a confidentiality and/or data protection agreement.
 
(d)
If required, the Parties agree to mutual co-operation, support and assistance in case of requests, incidents and audits regarding the protection of the personal data processed under this Agreement, including but not limited to data subject requests, data breach incidents, data protection impact assessments, data protection audits, requests to provide information to supervisory authorities, etc.
 
(e)
The Parties hereby agree and undertake to:
 

 (i)
ensure the security and the confidentiality of the processing by implementing appropriate technical and organisational measures that ensure a level of security appropriate to the risk of the processing of the personal data exchanged. In assessing the appropriate level of security, account shall be taken of the risks that are presented by processing, in particular from accidental or unlawful destruction, loss, alteration, unauthorised disclosure of, or access to personal data transmitted, stored or otherwise processed;
 

 (ii)
ensure the accuracy of the personal data exchanged and retain them for the minimum amount of time necessary to fulfill the objectives of processing defined by each Party in an entirely independent manner, unless otherwise permitted by law;
 

 (iii)
to not retain and process personal data for purposes other than the ones described in this Agreement; and
 

 (iv)
to not disclose personal data of any other Party to any third party, unless such disclosure is authorised by such other Party or is required by a statutory obligation of the disclosing Party. The disclosing Party shall inform the other Party in advance of any statutory obligations that apply regarding the disclosure of personal data to third parties.
 
(f)
In the event that, for the purposes of this Agreement or as required by applicable EU or local law or other statutory obligation, it is necessary to transmit the personal data exchanged to a third country outside the European Economic Area or an international organisation, such transmission shall take place only if there are sufficient guarantees ensuring that the level of protection of personal data as provided by the GDPR Regulation is not undermined.
 
(g)
Each Party is solely liable for the processing of the personal data exchanged that is performed by such Party or on its behalf. In the event that any of the Parties is found liable for unlawful processing of the personal data exchanged, data breach or other unlawful act or omission related to individual's rights on the protection of their data, such Party shall be responsible to indemnify and hold harmless any other Party against all claims, actions, third party claims, losses, damages and expenses incurred by the other Party, which are directly connected with and attributable to its liability, and arising directly or indirectly out of or in connection with a breach of this Agreement or breach of the applicable Data Protection Legislation unless such Party demonstrates that it was not liable. Limitations of liability included in this Agreement or otherwise agreed between the Parties shall not apply to this Clause.
 
107
For the purposes of this Clause 46 (Data Protection), the terms "personal data", "process/processing", "controller", "processor", "data subject", "data subject request", "data breach incident" and "supervisory authority" shall have the same meaning as in the GDPR Regulation.
 
46.2
Process of personal data
 
Each Borrower hereby expressly gives its consent to the communication for process in the meaning of Law 2472/97 by the Lender of its personal data contained in this Agreement, the Finance Documents, in the relevant Earnings Account for onwards communication thereof to an inter-banking database record called "Teiresias" kept and solely used by banks and financial institutions. Each Borrower is entitled at any relevant time throughout the Security Period to revoke its consent given hereunder by written notice addressed to the Lender and the Registrar of "Teiresias A.E." at 2, Alamanas street, 15125 Maroussi, Athens, Greece.
 
47
GOVERNING LAW AND ENFORCEMENT
 
Governing Law
 
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
 
48
ENFORCEMENT
 
48.1
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 48.1 (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.
 
48.2
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
 
108

 (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 5 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.
 
109
SCHEDULE 1
 
THE PARTIES
 
PART A
 
THE OBLIGORS
 
Name of Borrower
Place of Incorporation
Registration number (or
equivalent, if any)
Address for
Communication
TITAN OCEAN
NAVIGATION CO.
Republic of Liberia
C-125681
154 Vouliagmenis Avenue, 166 74 Glyfada, Athens Greece
Tel: +302130181507
Email: legal@seanergy.gr
Fax: +302109638404
       
PAROS OCEAN
NAVIGATION CO.
Republic of Liberia
C-125033
154 Vouliagmenis Avenue, 166 74 Glyfada, Athens Greece
Tel: +302130181507
Email: legal@seanergy.gr
Fax: +302109638404
       

Name of Parent
Guarantor
Place of Incorporation
Registration number (or
equivalent, if any)
Address for
Communication
       
SEANERGY MARITIME HOLDINGS CORP.
Republic of the Marshall Islands
 27721
154 Vouliagmenis Avenue, 166 74 Glyfada, Athens Greece
Tel: +302130181507
Email: legal@seanergy.gr
Fax: +302109638404

110
PART B
 
THE ORIGINAL LENDER
 
Name of Original Lender
Address for Communication
ALPHA BANK S.A.
Shipping Division
93, Akti Miaouli
GR-185 38, Piraeus
Greece
Fax: +30 210 429 0268
Tel: +30 210 429 0116
Email: shipping@alpha.gr
Attn: the Manager

111
SCHEDULE 2
 
CONDITIONS PRECEDENT
 
PART A
 
CONDITIONS PRECEDENT TO UTILISATION REQUEST
 
1
Obligors
 
1.1
A copy of the constitutional documents of each Obligor.
 
1.2
A copy of a resolution of the board of directors of each Obligor:
 
(a)
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;
 
(b)
authorising a specified person or persons to execute the Finance 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 despatch all documents and notices (including, if relevant, the Utilisation Request and each Selection Notice) 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 copy 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.
 
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 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 Transaction Obligor to be exceeded.
 
1.7
A certificate of each Obligor 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.
 
1.8
A certificate of an authorised signatory of the relevant 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.
 
112
2
Assignable Charter, MOA and other documents
 
2.1
Copies of any Assignable Charter and such documentary evidence as the Lender and its legal advisers may require in relation to the due authorisation and execution by the relevant Borrower and the Charterer of such Assignable Charter.
 
2.2
Copies of all documents signed or issued by Borrower A or the Lessor (or both of them) under or in connection with the MOA.
 
2.3
Such documentary evidence as the Lender and its legal advisers may require in relation to the due authorisation and execution of documents referred to in paragraph 2.2 of this Part A, Schedule 2 (Conditions Precedent) by each of the parties thereto.
 
3
Finance Documents
 
3.1
A duly executed original of the Subordination Agreement and copies of each Subordinated Finance Document.
 
3.2
A duly executed original of any Finance Document not otherwise referred to in this Schedule 2 (Conditions Precedent).
 
3.3
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).
 
4
Security
 
A duly executed original of each Account Security in relation to the Accounts (and of each document to be delivered under each of them).
 
5
Legal opinions
 
5.1
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.
 
5.2
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, substantially in the form obtained by the Lender before signing this Agreement.
 
6
Other documents and evidence
 
6.1
Evidence that any process agent referred to in Clause 48.2 (Service of process), if not a Transaction Obligor, has accepted its appointment.
 
6.2
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 any Transaction Document or for the validity and enforceability of any Transaction Document.
 
6.3
A valuation of each Ship, addressed to the Lender, stated to be for the purposes of this Agreement and dated on a date specified by and acceptable to the Lender before the Utilisation Date from an Approved Valuer and showing the Market Value of that Ship.
 
6.4
The Original Financial Statements.
 
113
6.5
The original or a copy 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 Utilisation Date.
 
6.7
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.
 
114
PART B

CONDITIONS PRECEDENT TO UTILISATION
 
1
Borrowers
 
A certificate of an authorised signatory of each 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.
 
2
Release of Existing Security
 
An original of the Deed of Release and of each document to be delivered under or pursuant to it, together with evidence satisfactory to the Lender of its due execution by the parties to it.
 
3
Ship and other security
 
3.1
A duly executed original of the Mortgage and the Deed of Covenant (if applicable), the General Assignment and of each document to be delivered under or pursuant to each of them together with documentary evidence that on the Delivery Date the Mortgage in respect of each Ship has been duly registered as a valid first preferred or, as the case may be, priority ship mortgage in accordance with the laws of the jurisdiction of its Approved Flag.
 
3.2
Documentary evidence that:
 
(a)
Ship A has been unconditionally delivered by the Lessor to, and accepted by, Borrower A under the MOA and that the full purchase price representing the Purchase Option Price payable to the Lessor and all other sums due to the Lessor under the MOA, other than the sums to be financed pursuant to the Utilisation of the Loan, have been paid;
 
(b)
each Ship is definitively and permanently registered in the name of the relevant Borrower under the Approved Flag;
 
(c)
each Ship is in the absolute and unencumbered ownership of the relevant Borrower save as contemplated by the Finance Documents;
 
(d)
each Ship maintains the Approved Classification with the Approved Classification Society free of all overdue recommendations and conditions of the Approved Classification Society; and
 
(e)
each 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.
 
3.3
Documents establishing that each Ship will, as from the Utilisation Date, be managed commercially by its Approved Commercial Manager and managed technically by its Approved Technical Manager on terms acceptable to the Lender, together with:
 
(a)
a Manager's Undertaking for each of the Approved Technical Manager and the Approved Commercial Manager; and
 
(b)
copies of the relevant Approved Technical Manager's Document of Compliance and of each 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 each Ship including without limitation an ISSC.
 
115
3.4
An opinion from an independent insurance consultant acceptable to the Lender on such matters relating to the Insurances as the Lender may require.
 
4
Legal opinions
 
Legal opinions of the legal advisers to the Lender in the jurisdiction of the Approved Flag of each Ship and such other relevant jurisdictions as the Lender may require.
 
5
Other documents and evidence
 
5.1
Evidence that the Minimum Cash Reserve required pursuant to Clause 21.1 (Minimum Cash Reserve) has been maintained by the Parent Guarantor or will be funded by the Loan.
 
5.2
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.
 
116
SCHEDULE 3
 
REQUESTS
 
PART A
 
UTILISATION REQUEST
 
From:
Titan Ocean Navigation Co.
Paros Ocean Navigation Co.

To:
ALPHA BANK S.A.
Shipping Division
93, Akti Miaouli
GR-185 38, Piraeus
Greece
 
Dated: [●] 2024
 
Titan Ocean Navigation Co. and Paros Ocean Navigation Co. – Up to $34,000,000 Facility Agreement dated [●] 2024 (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 Loan on the following terms:
 
Proposed Utilisation Date:
[●] 2024 (or, if that is not a Business Day, the next Business Day)


Amount: 
[●] or, if less, the Available Facility


Interest Period for the Loan:
[●]

3
You are authorised and requested to deduct from the Loan prior to funds being remitted the following amounts set out against the following items:
 
 
Deductible Items
 $
 
 
 
 
 
Arrangement Fee
 
 
 
 
 
 
 
Lender's solicitors' fees inclusive of disbursements and VAT
 
 
 
 
 
 
 
[●] legal opinion fees (if any)
 
 
 
 
 
 
 
Net proceeds of Loan
 
 
  
4
We confirm that each condition specified in Clause 4.1 (Initial conditions precedent), Clause 4.2 (Conditions precedent to Utilisation Request) and Clause 4.3 (Conditions precedent to Utilisation) of the Agreement are satisfied on the date of this Utilisation Request.
 
5
The [net] proceeds of the Loan should be credited to [account].
 
117
6
This Utilisation Request is irrevocable.
 
Yours faithfully
 
 
  
 
Name:
 
Title:
 
for and on behalf of
 
Titan Ocean Navigation Co.  

 
  
 
Name:
 
Title:
 
for and on behalf of
 
Paros Ocean Navigation Co.
  

118
PART B
 
SELECTION NOTICE
 
From:
Titan Ocean Navigation Co.
Paros Ocean Navigation Co. 

To:
ALPHA BANK S.A.
Shipping Division
93, Akti Miaouli
GR-185 38, Piraeus
Greece
 
Dated: [●] 2024
 
Titan Ocean Navigation Co. and Paros Ocean Navigation Co. – Up to $34,000,000 Facility Agreement dated [●] 2024 (the "Agreement")
 
1
We refer to the Agreement.  This is a Selection Notice.  Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice.
 
2
We request that, subject to paragraph (f) of Clause 9.1 (Selection of Interest Periods) of the Agreement, the next Interest Period for the Loan be [●] Months.
 
3
This Selection Notice is irrevocable.
 
Yours faithfully
 
 
  
 
Name:
 
Title:
 
for and on behalf of
 
Titan Ocean Navigation Co.  

 
  
 
Name:
 
Title:
 
for and on behalf of
 
Paros Ocean Navigation Co.
  

119
SCHEDULE 4
 
FORM OF COMPLIANCE CERTIFICATE
 
To:         Alpha Bank S.A., as Lender
 
From:     Seanergy Maritime Holdings Corp., as Parent Guarantor

Dated: [●]
 
Titan Ocean Navigation Co. and Paros Ocean Navigation Co. – Up to $34,000,000 Facility Agreement dated [●] 2024 (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 we maintain an unencumbered credit balance of [●] in respect of each Fleet Vessel.
 
3
[We confirm that no Default is continuing.]
 
Signed:
 
     
[Officer]  
of  
[Parent Guarantor]  
 
     
for and on behalf of
  
[name of auditors of the Parent Guarantor]
  
 
120
SCHEDULE 5
 
DETAILS OF THE SHIPS
 
Ship name
Name
of the Borrower owner
Type
GRT
NRT
Approved Flag and port of registration
Approved Classification Society
Approved Classification
Approved Commercial Manager
Approved Technical Manager
"TITANSHIP"
(IMO no: 9603362)
Titan Ocean Navigation Co.
Bulk Carrier
106,251
67,694
Liberia
LR
¦100A1 Bulk Carrier, CSR, BC-A, GRAB[20], Hold Nos. 2, 4, 6 and 8 May Be Empty, ESP, ShipRight ACS(B), *IWS, LI ¦LMC, UMS
Fidelity Marine Inc. as commercial manager;

Seanergy Management Corp.
V.Ships Greece Ltd.
"PAROSHIP"
(IMO no: 9614880)
Paros Ocean Navigation Co.
Bulk Carrier
93,074
60,504
Liberia
LR
¦100A1 Bulk Carrier, CSR, BC-A, GRAB[20], Hold Nos. 2, 4, 6 and 8 May Be Empty, ESP, *IWS, LI ¦LMC, UMS, EGCS(Open, Partial)
Fidelity Marine Inc.

Seanergy Management Corp.
V.Ships Greece Ltd.

121
SCHEDULE 6

TIMETABLES
 
Delivery of a duly completed Utilisation Request (Clause 5.1 (Delivery of the Utilisation Request)) or a Selection Notice (Clause 9.1 (Selection of Interest Periods))
Two Business Days before the intended Utilisation Date (Clause 5.1 (Delivery of the Utilisation Request)) or the expiry of the preceding Interest Period (Clause 9.1 (Selection of Interest Periods))
   
Term SOFR is fixed
Noon on the Quotation Day

122
EXECUTION PAGES
 
BORROWERS
      
       
SIGNED by
Stavros Gyftakis
)
/s/ Stavros Gyftakis
as attorney-in-fact
  
)
  
for and on behalf of
  
)
  
TITAN OCEAN NAVIGATION CO.
)
  
in the presence of:
  
)
  
       
Witness' signature:
  
)
/s/ Maria Moschopoulou
Witness' name:
Maria Moschopoulou
)
  
Witness' address:
154 Vouliagmenis Avenue,
)
  
 
166 74, Glyfada, Greece
    
       
SIGNED by
Stavros Gyftakis
)
/s/ Stavros Gyftakis
as attorney-in-fact
  
)
  
for and on behalf of
  
)
  
PAROS OCEAN NAVIGATION CO.
)
  
in the presence of:
  
)
  
       
Witness' signature:
  
)
/s/ Maria Moschopoulou
Witness' name:
Maria Moschopoulou
)
  
Witness' address:
154 Vouliagmenis Avenue,
)
  
 
166 74, Glyfada, Greece
    
       
PARENT GUARANTOR
    
       
SIGNED by
Stavros Gyftakis
)
/s/ Stavros Gyftakis
as attorney-in-fact
  
)
  
for and on behalf of
  
)
  
SEANERGY MARITIME HOLDINGS CORP.
)
  
in the presence of:
  
)
  
       
Witness' signature:
  
)
   /s/ Maria Moschopoulou
Witness' name:
Maria Moschopoulou
)
  
Witness' address:
154 Vouliagmenis Avenue,
)
  
 
166 74, Glyfada, Greece
    
       
ORIGINAL LENDER
    
       
SIGNED by
C. V. Flokos
)
/s/ C. V. Flokos
and
N. D. Kagkarakis
)
duly authorised
  
)
 /s/ N. D. Kagkarakis
for and on behalf of
  
)
  
ALPHA BANK S.A.
)
  
in the presence of:
  
)
  
       
Witness' signature:
  
)
 /s/ Michail Arkadis
Witness' name:
Michail Arkadis
)
  
Witness' address: 
 WATSON FARLEY & WILLIAMS GREECE )  
   
348 SYNGROU AVENUE    

KALLITHEA 176 74 ATHENS - GREECE    


123
EX-4.43 16 ef20039029_ex4-43.htm EXHIBIT 4.43
Exhibit 4.43

In 1974 as  “Barecon’A’ ”and “Barecon ‘B’ ” Revised and amalgamated 1989. Revised 2001 1. Shipbroker ITOCHU Corporation, Japan THE BALTIC AND INTERNATIONAL MARITIME COUNCIL(BIMCO) STANDARD BAREBOAT CHARTER CODE NAME: “BARECON 2001” PART I 2. Place and date 23rd January, 2025, Athens 3.Owners/Place of business (Cl.1) Bluejay Maritime S.A., of the Republic of Panama 4.Bareboat charterers(Charterers)/Place of business (Cl.1) Blue Shipping Co., of the Republic of the Marshall Islands, guaranteed by Seanergy Maritime Holdings Corp., of the Republic of the Marshall Islands 5.Vessel’s name, Call Sign and Flag (Cl. 1 and 3) M/V Zampa Blue, 3FYS6, Panamanian flag 6.Type of Vessel Bulk Carrier 7.GRT/NRT 92,249 / 57,461 8. When/Where built 2011 / Mitsui Engineering & Shipbuilding Co., Ltd. 9.Total DWT (abt.) in metric tons on summer freeboard 178,459 10. Classification Society (Cl. 3) NK 11. Date of last special survey by the Vessel’s classification society 6th October, 2020 12. Further particulars of Vessel (also indicate minimum number of months’ validity of class certificates agreed acc. to Cl. 3) The Documentary Committee of the Japan Shipping Exchange, Inc., Tokyo 13.Port or Place of delivery (Cl.3) Safely afloat, charter-free at a safe berth or anchorage of a safe port within Singapore/Japan range at the BB Owner’s option. 14.Time for delivery (Cl.4) Between 6th January and 31st March 2025 (intention for delivery at the end of February or in March 2025, upon completion of current voyage) 15.Canceling date (Cl.5) 31st March 2025 16.Port of Place of redelivery (Cl.15) N/A 17.No. of months’ validity of trading and class certificates upon redelivery (Cl.15) N/A 18.Running days’ notice in other than stated in Cl.4 See Clause 4 19.Frequency of dry-docking (Cl.10(g)) As per Classification Society requirements 20.Trading limits (Cl.6) Always safely afloat worldwide trading within current IWL excluding any country sanctioned by the U.N. / U.S. / EU. The Charterers have option to break the IWL subject to (i) payment by the Charterers of any and all premiums, expenses and risks and (ii) where required by the relevant insurance terms, the relevant underwriters’ approval. 21. Charter Period (Cl.2) Firm Six (6) months with Charterer’s purchase obligation at the end of the BBC period 22.Charter Hire (Cl.11) USD 9,750 per day (See also Clause 11). 23. New class and other safety requirements (state percentage of Vessel’s insurance value acc. To Box 29) (Cl.10(a)(ii)) See Clause 10. (a). (ii) 24. Rate of interest payable acc. to Cl.11(f) and, if applicable, acc. to PART IV Four (4) % per annum 25. Currency and method of payment (Cl.11) United States Dollars payable monthly in advance (Continued)


(continued)“BARECON 2001” Standard Bareboat Charter PART I 26.Place of payment; also state beneficiary and bank account (Cl. 11) Japan, beneficiary being the Owners and bank account to be advised in writing. 27.Bank guarantee/bond (sum and place) (Cl. 22) (optional) N/A 28.Mortgage(s), if any.  (state whether Cl. 12(a) or (b) applies; if 12(b) applies state date of Financial Instrument and name of Mortgagee(s)/Place of business) (Cl. 12)  N/A 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)) N/A 32.Latent defects (only to be filled in if period other than stated in Cl. 3)N/A33.Brokerage commission and to whom payable (Cl. 27) Charterers shall pay commission to ITOCHU Corporation as follows; (1)USD 150,000.- upon delivery of the Vessel from the Owners to the Charterers (2)USD 150,000.- at the end of the Charter Period 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) English law & Arbitration - See Clause 30 36.War cancellation (indicate countries agreed) (Cl.26(e))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) N/A 42.Hire/Purchase agreement (indicate with “yes” or “no” whether Part IV applies) (optional) Part IV does not apply, see however Clause 36 43Bareboat Charter Registry (indicate with “yes” or “no” whether Part V applies) (optional) Part V does not apply, but Bareboat Charter Registration is in Charterers’ option – See Clause 40 44.Flag and Country of the Bareboat Charter Registry (only to be filled in if Part V applies) Marshall Islands 45.Country of the Underlying Registry (only to be filled in if Part V applies) Panama 46. Number of additional clauses covering special provisions, if agreed Clauses 32 to 49 inclusive PREAMB
LE - 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 shall only form part of this Charter if expressly agreed and stated in the Boxes 37, 42 and 43.  If PART III and/or PART IV and/or PART V apply, it is further mutually 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/ Kyosuke Sato Name: Kyosuke Sato Title:  Treasurer Signature (Charterers) /s/ Stavros Gyftakis Name: Stavros Gyftakis Title:Director


PART II
“BARECON 2001’' Standard Bareboat Charter

1
1. Definitions
2
In this Charter, the following terms shall have the meanings hereby assigned to them:
3
“Banking Day” shall mean a day (other than a Saturday or Sunday):
4
(a) (other than in relation to any date for payment) which is not a public holiday in Tokyo, New York City,
5
the Republic of the Marshall Islands, Panama and Greece; and
6
(b) (in relation to any date for payment) on which banks and financial markets are open for business in
7
New York City, Tokyo, the Republic of the Marshall Islands, Panama and Greece.
8
“Delivery Date” means the date, falling not later that the date set out in Box 15 (as may be extended by
9
Clause 5), that the Vessel is delivered to and accepted by the Charterers under this Charter.
10
“Inspection” means the physical inspection of the Vessel carried out by IDWAL at Nouadhibou, Mauritania
11
on 26- 27 December 2024 which has been purchased by the Charterers.
12
“The Owners” shall mean the party identified in Box 3.
13
“The Charterers” shall mean the party identified in Box 4.
14
“The Vessel” shall mean the vessel named in Box 5 and with particulars as stated in Boxes 6 to 12.
15
  
16
  
17
2. Charter Period
18
In consideration of the hire detailed in Box 22 and the purchase obligation contained in Clause 36,
19
the Owners have agreed to let and the Charterers have agreed to hire the Vessel for the period stated in
20
Box 21. See also Clause 33.
21
  
22
3. Delivery (See also Clause 32)
23
24
(a)
 The Owners shall deliver the Vessel seaworthy and in every respect ready in hull, machinery and
25
equipment for service under this Charter, and, subject to the terms and conditions of this Charter,
26
she shall be delivered and taken over as she was at the time of the Inspection (fair wear and tear
27
excepted), free of cargo and free of stowaways, with her class maintained without
28
condition/recommendation (which also mean “Observation”) evidenced by a Class Maintenance
29
Certificate to be issued by Class NK dated not more than three (3) Banking Days prior to the
30
expected date of delivery, free of average damage affecting the Vessel’s Class and not subject to
31
Port State or other administrative detentions. The Vessel shall be delivered by the Owners and
32
taken over by the Charterers at the port or place indicated in Box 13. The Vessel delivery place
33
should be available for crew exchanges and should be mutually agreed between the Owners and
34
the Charterers.


35
 (b)
The Vessel shall be properly documented on delivery in accordance with the laws of the flag State
36
indicated in Box 5 and the requirements of the Classification Society stated in Box 10. The Vessel
37
upon delivery shall have her survey cycles up to date and trading, national, international and class
38
certificates clean, valid and unextended at the time of delivery.
39
 (c)
The delivery of the Vessel by the Owners and the taking over of the Vessel by the Charterers shall
40
constitute a full performance by the Owners of all the Owners’ obligations under this Clause 3, and
41
thereafter the Charterers shall not be entitled to make or assert any claim against the Owners on
42
account of any conditions, representations or warranties expressed or implied with respect to the
43
Vessel
44
45
46
.
47
  
48
4. Time for Delivery –SEE ALSO CLAUSE 32
49
50
The Vessel shall not be delivered before  6th January, 2025. The Owners
51
shall exercise due diligence to deliver the Vessel not later than the date indicated in Box 15. Unless
52
otherwise agreed in Box 18, the Owners shall give to the Charterers 30 days, 20 days, 10 days, 7
53
days 3 days, and 2 days approximate notices and 1 day definite notice of the date
54
on which the Vessel is expected to be ready for delivery. Along with the ten (10) days approximate
55
notice, Owners shall at least nominate the delivery port. The Owners shall keep the Charterers closely
56
advised of possible changes in the Vessel’s position and the Vessel shall not be tendered by the Owners
57
to the Charterers for delivery under this Charter unless all the above notices have been provided to the
58
Charterers in accordance with this Clause 4.
59
  
60
5. Cancelling
61
62
(a) Should the Vessel not be delivered latest by the cancelling date indicated in Box 15, the Charterers
63
shall have the option of cancelling this Charter by giving the Owners notice of cancellation within thirty-six
64
(36) running hours after the cancelling date stated in Box 15, failing which this Charter shall remain in full
65
force and effect.
66
(b) If it appears that the Vessel will be delayed beyond the cancelling date, the Owners may, as soon as
67
they are in a position to state with reasonable certainty the day on which the Vessel should be ready, give
68
notice thereof to the Charterers asking whether they will exercise their option of cancelling, and the option
69
must then be declared within one hundred and sixty-eight (168) running hours of the receipt by the
70
Charterers of such notice or within thirty-six (36) running hours after the cancelling date, whichever is the
71
earlier. If the Charterers do not then exercise their option of cancelling, the seventh day after the readiness


72
date stated in the Owner’s notice shall be substituted for the cancelling date indicated in Box 15 for the
73
purpose of this Clause 5.
74
(c) Cancellation under this Clause 5 shall be without prejudice to any claim the Charterers may otherwise
75
have on the Owners under this Charter.
76
In the event that the Charterers cancel this Agreement in accordance with this Clause 5, the 1st Advanced
77
Hire already remitted and interest if any shall be returned to the Charterers within 5 Banking Days.
78
  
79
6. Trading Restrictions
80
The Vessel shall be employed in lawful trades for the carriage of suitable lawful merchandise within the
81
trading limits indicated in Box 20. The Charterers undertake not to employ the Vessel or suffer the Vessel
82
to be employed otherwise than in conformity with the terms of the contracts of insurance (including any
83
warranties expressed or implied therein) without first complying with such requirements as to extra
84
premium or otherwise as the insurers may prescribe. The Charterers also undertake not to employ the
85
Vessel or suffer her employment in any trade or business which is forbidden by the law of any country to
86
which the Vessel may sail or is otherwise illicit or in carrying illicit or prohibited goods or in any manner
87
whatsoever which may render her liable to condemnation, destruction, seizure or confiscation.
88
Notwithstanding any other provisions contained in this Charter it is agreed that nuclear fuels or radioactive
89
products or waste are specifically excluded from the cargo permitted to be loaded or carried under this
90
Charter. This exclusion does not apply to radio-isotopes used or intended to be used for any industrial,
91
commercial, agricultural, medical or scientific purposes to loading thereof. See also Clause [38].
92
  
93
7. Surveys on Delivery and Redelivery
94
95
96
97
98
99
100
101
  
102
8. Inspection
103
The Owners shall have the right once in the BB period after giving a notice not earlier than 30 days prior
104
to the intended inspection or survey to the Charterers and provided that it does not interfere with the
105
operation and trading of the Vessel to inspect or survey the Vessel or instruct a duly authorized surveyor
106
to carry out such inspection or survey on their behalf:-
107
(a) to ascertain the condition of the Vessel and satisfy themselves that the Vessel is being properly repaired
108
and maintained. The costs and fees for such inspection or survey shall be paid by the Owners unless the


109
Vessel is found to require repairs or maintenance to meet a condition required by the Vessel’s class or
110
flag state in order to achieve the condition so provided; and
111
(b) for any other commercial reason they consider necessary (provided it does not unduly interfere with
112
the commercial operation of the Vessel). The costs and fees for such inspection and survey shall be paid
113
by the Owners.
114
All time used in respect of inspection, survey or repairs shall form part of the Charter Period with any
115
inspection, survey or repair not interfering with the Vessel’s normal operation and trading.
116
The Charterers shall, upon request provide the Owners with ongoing Class records, when reasonably
117
requested, and shall also permit the Owners to inspect and take copies of same whenever requested and
118
shall whenever reasonably required by the Owners furnish them with full information regarding any major
119
casualties or other major accidents or significant damage to the Vessel.
120
  
121
9. Inventories, Oil and Stores
122
A complete inventory of the Vessel’s entire equipment shall be made by the Charterers in conjunction with
123
the Owners on delivery of the Vessel. The Owners shall deliver the Vessel to the Charterers with everything
124
belonging to her on board except for the exclusion items to be agreed in an addendum to this Charter.
125
Provision, bonded store and slop chest at the time of delivery shall be purchased and taken over by the
126
Charterers basis an inventory prepared by the Charterers in conjunction with the Owners and to be settled
127
with the second (2nd) hire payment. The Charterers shall at the time of delivery, take over and pay for all
128
remaining bunkers (i.e. VLSFO/LSMDO/LSMGO) including in settling tanks and unused
129
lubricating/hydraulic/grease oils in storage tanks unbroached drums and cans remaining as onboard at the
130
time of delivery at the Owners' last net purchased prices excluding barging expenses supported by
131
vouchers or the copy of relevant clause of the charter party (including detailed information on the applicable
132
prices) or documents such as sub-charterers’ re-delivery invoices, statement of account and/or agreement
133
including the clause in the recap or in the fixture note by and between the sub-charterers and the end
134
charterers. The exact quantities of remaining Bunkers and Lubricating Oils at the time of delivery shall be
135
sounded and fixed beforehand by and between the Owners' and the Charterers' representatives on an
136
estimation basis, latest by two (2) calendar days prior to the expected date of delivery of the Vessel (with
137
an estimation up to the delivery date) which shall be mutually agreed by the Owners and the Charterers
138
beforehand in order to avoid unnecessary dispute by and between the Owners and the Charterers at the
139
time of delivery and closing. The Charterers shall pay for Bunkers and Lubricating Oils together with the
140
1st hire payment based on the estimations provided by the Owners. The surplus or shortage, if any, shall
141
be set-off at the 2nd hire payment.
142
143
144
  
145
10. Maintenance and Operation


146
(a)(i) Maintenance and Repairs - During the Charter Period the Vessel shall be in the full possession and
147
at the absolute disposal for all purposes of the Charterers and under their complete control in every respect.
148
The Charterers shall maintain the Vessel, her machinery, boilers, appurtenances and spare parts in a good
149
state of repair, in efficient operating condition and in accordance with good commercial maintenance
150
practice, at their own expense, and they shall at all times keep the Vessel’s Class fully up to date with the
151
Classification Society indicated in Box 10 and maintain all other necessary certificates in force at all times.
152
  
153
(ii) New Class and Other Safety Requirements - In the event of any improvement, structural changes or
154
new equipment becoming necessary for the continued operation of the Vessel by reason of new class
155
requirements or by compulsory legislation, the Charterers shall bear all such expenses, costs and time for
156
effecting such improvement or structural change.
157
  
158
(iii) Financial Security - The Charterers shall maintain financial security or responsibility in respect of third
159
party liabilities as required by any government, including federal, state or municipal or other division or
160
authority thereof, to enable the Vessel, without penalty or charge, lawfully to enter, remain at, or leave any
161
port, place, territorial or contiguous waters of any country, state or municipality in performance of this
162
Charter without any delay. This obligation shall apply whether or not such requirements have been lawfully
163
imposed by such government or division or authority thereof. The Charterers shall make and maintain all
164
arrangements by bond or otherwise as may be necessary to satisfy such requirements at the Charterer’s
165
sole expense and the Charterers shall indemnify the Owners against all consequences whatsoever
166
(including loss of time) for any failure or inability to do so.
167
  
168
(b) Operation of the Vessel - The Charterers shall at their own expense and by their own procurement
169
man, victual, navigate, operate, supply, fuel and, whenever required, repair the Vessel during the Charter
170
Period and they shall pay all charges and expenses of every kind and nature whatsoever incidental to their
171
use and operation of the Vessel under this Charter, including annual flag State fees and any foreign general
172
municipality and/or state taxes. The Master, officers and crew of the Vessel shall be the servants of the
173
Charterers for all purposes whatsoever, even if for any reason appointed by the Owners. Charterers shall
174
comply with the regulations regarding officers and crew in force in the country of the Vessel’s flag or any
175
other applicable law.
176
  
177
(c) The Charterers shall keep the Owners advised of any intended employment, planned dry-docking and
178
major repairs of the Vessel, as reasonably required.
179
  
180
(d) Flag and Name of Vessel (see also Clause 40) - During the Charter Period, the Charterers shall have
181
the liberty to paint the Vessel in their own colours, install and display their funnel insignia and fly their own
182
house flag. Subject to the provisions of Clause 40, the Charterers shall also have the liberty, with the


183
Owners’ consent, which shall not be unreasonably withheld or delayed, to change the flag and/or name of
184
the Vessel and/or Class of the Vessel (to be a member of IACS) during the Charter Period and such cost
185
and expenses to be for Charterers’ account. Painting and re-painting, instalment and re-instalment,
186
registration and re-registration, if required by the Owners, shall be at the Charterer’s expense and time.
187
  
188
(e) Changes to the Vessel - Subject to Clause 10(a)(ii), the Charterers shall make no structural changes
189
in the Vessel or changes in the machinery, boilers, appurtenances or spare parts thereof if such change
190
will reduce materially the market value of the Vessel at the time and otherwise without securing the Owners’
191
approval thereof. Charterers are allowed to make improvements to the Vessel provided that the cost shall
192
be for Charterers’ account.
193
  
194
(f) Use of the Vessel’s Outfit, Equipment and Appliances - The Charterers shall have the use of all outfit,
195
equipment, and appliances on board the Vessel at the time of delivery
196
197
. The Charterers shall from time to time during the
198
Charter Period replace such items of equipment as shall be so damaged or worn as to be unfit for use.
199
The Charterers are to procure that all repairs to or replacement of any damaged, worn or lost parts or
200
equipment be effected in such manner (both as regards workmanship and quality of materials) as not to
201
diminish the value of the Vessel. The Charterers have the right to fit additional equipment at their expense
202
and risk. Any equipment including radio equipment on hire on the Vessel at time of delivery shall be kept
203
and maintained by the Charterers and the Charterers shall assume the obligations and liabilities of the
204
Owners under any lease contracts in connection therewith and shall reimburse the Owners for all expenses
205
incurred in connection therewith, also for any new equipment required in order to comply with radio
206
regulations.
207
  
208
(g) Periodical Dry-Docking - The Charterers shall dry- dock the Vessel and clean and paint her underwater
209
parts whenever the same may be required by the Classification Society.
210
  
211
11. Hire
212
(a) The Charterers shall pay hire (referred to also as “Charter Hire”) due to the Owners punctually in
213
accordance with the terms of this Charter in respect of which time shall be of the essence.
214
(b) The Charterers shall pay to the Owners for the hire of the Vessel a lump sum in the amount indicated
215
in Box 22 which shall be payable monthly in advance, the first lump sum being payable on the date and
216
hour of the Vessel’s delivery to the Charterers. Subject to as otherwise provided in this Charter, hire shall
217
be paid continuously throughout the Charter Period. If hire payment date is not a Banking Day, hire to be
218
paid on the next Banking Day.
219
(c) Subject to as otherwise expressly provided in this Charter, payment of hire shall be made in cash and


220
in full free of bank charges without discount, deduction and set-off (except for any set-off in relation to the
221
calculation of Bunkers/Lubs on the delivery date as described above) in the currency and in the manner
222
indicated in Box 25 and at the place mentioned in Box 26.
223
(d) Final payment of hire, if for a period of less than one month, shall be calculated proportionally according
224
to the number of days and hours remaining before redelivery or purchase and advance payment to be
225
effected accordingly.
226
227
228
229
230
(f) Any delay in payment of hire or other amount payable and due by the Charterers under this Charter
231
shall entitle the Owners to interest at the rate per annum as agreed in Box 24.
232
233
234
235
(g) Payment of interest due under sub-clause 11(f) shall be made within seven (7) banking days of the
236
date or, in the absence of an invoice, at the time of the next hire payment date.
237
  
238
12. Mortgage
239
240
241
242
243
244
245
246
247
248
249
250
251
252
253
254
  
255
13. Insurance and Repairs (See also Clause 34)
256
(a) During the Charter Period the Vessel shall be kept insured by the Charterers at their expense against


257
hull and machinery, war and Protection and Indemnity risks (and any risks against which it is compulsory
258
to insure for the operation of the Vessel, including maintaining financial security in accordance with sub-
259
clause 10(a)(iii)) in such form as the Owners shall in writing approve, which approval shall not be
260
unreasonably withheld. Such insurances shall be arranged by the Charterers to protect the interests of
261
both the Owners and the Charterers and the mortgagee(s) (if any), and the Charterers shall be at liberty
262
to protect under such insurances the interests of any managers they may appoint. Insurance policies shall
263
cover the Owners and the Charterers according to their respective interests.
264
Subject to the approval of the Owners and the insurers, the Charterers shall effect all insured repairs and
265
shall undertake settlement and reimbursement from the insurers of all costs in connection with such repairs
266
as well as insured charges, expenses and liabilities to the extent of coverage under the insurances herein
267
provided for.
268
The Charterers also to remain responsible for and to effect repairs and settlement of costs and expenses
269
covered by the insurances and/or not exceeding any possible franchise(s) or deductibles provided for in
270
the insurances. All time used for repairs under the provisions of sub- clause 13(a) and for repairs of latent
271
defects according to Clause 3(c) above, including any deviation, shall be for the Charterers’ account.
272
  
273
(b) If the conditions of the above insurances permit additional insurance to be placed by the parties, such
274
cover shall be limited to the amount for each party set out in Box 30 and Box 31, respectively. The Owners
275
or the Charterers as the case may be shall immediately furnish the other party with particulars of any
276
additional insurance effected, including copies of any cover notes or policies and the written consent of
277
the insurers of any such required insurance in any case where the consent of such insurers is necessary.
278
  
279
(c) Should the Vessel become an actual, constructive, compromised or agreed total loss under the
280
insurances required under sub-clause 13(a), all insurance payments for such loss shall be paid to the
281
Owners who shall distribute the moneys between the Owners and the Charterers according to their
282
respective interests. The Charterers undertake to notify the Owners and the mortgagee(s), if any, of any
283
occurrences in consequence of which the Vessel is likely to become a total loss as defined in this Clause
284
and Clause 34.
285
  
286
(e) The Owners shall upon the request of the Charterers, promptly execute such documents as may be
287
required to enable the Charterers to abandon the Vessel to insurers and claim a constructive total loss.
288
  
289
(f) For the purpose of insurance coverage against hull and machinery and war risks under the provisions
290
of sub-clause 13(a), the value of the Vessel is the sum indicated in Box 29 and Clause 34.
291
  
292
14. Insurance, Repairs and Classification
293


294
295
296
297
298
299
300
301
302
303
304
305
306
307
308
309
310
311
312
313
314
315
316
317
318
319
320
321
322
323
324
325
326
327
328
329
330


331
332
333
334
335
336
337
338
339
  
340
15. Redelivery (See also Clause 36)
341
342
343
344
345
346
347
348
349
350
351
352
353
354
355
356
357
358
  
359
16. Non-Lien
360
The Charterers will not suffer, nor permit to be continued, any lien or encumbrance incurred by them or
361
their agents, which might have priority over the title and interest of the Owners in the Vessel. The
362
Charterers further agree to fasten to the Vessel in a conspicuous place and to keep so fastened during the
363
Charter Period a notice reading as follows:
364
‘This Vessel is the property of Bluejay Maritime S.A.. It is under charter to (name of Charterers) and by the
365
terms of the Charter neither the Charterers nor the Master have any right, power or authority to create,
366
incur or permit to be imposed on the Vessel any lien.’
367
  


368
17. Indemnity
369
(a) The Charterers shall indemnify the Owners, in each case as properly documented and evidenced,
370
against any loss, damage or reasonable expense incurred by the Owners arising out of or in relation to the
371
operation of the Vessel by the Charterers, and against any lien of whatsoever nature arising out of an
372
event occurring during the Charter Period. If the Vessel be arrested or otherwise detained by reason of
373
claims or liens arising out of her operation hereunder by the Charterers, the Charterers shall at their own
374
expense take all reasonable steps to secure that within a reasonable time the Vessel is released, including
375
the provision of bail. Without prejudice to the generality of the foregoing, the Charterers agree to indemnify
376
the Owners against all consequences or liabilities arising from the Master, officers or agents signing Bills
377
of Lading or other cargo related documents.
378
(b) If the Vessel be arrested or otherwise detained by reason of a claim or claims against the Owners, the
379
Owners shall at their own expense take all reasonable steps to secure that within a reasonable time the
380
Vessel is released, including the provision of bail. In such circumstances, the Owners shall indemnify the
381
Charterers against any loss, damage or reasonable expense incurred by the Charterers (including hire
382
paid under this Charter) as a direct consequence of such arrest or detention.
383
The Charterers shall not be obliged to indemnify the Owners under this Charter to the extent any losses
384
are caused by the gross negligence or willful misconduct of the Owners.
385
  
386
18. Lien
387
The Owners to have a lien upon all cargoes, sub-hires and sub-freights belonging or due to the Charterers
388
or any sub-charterers and any Bill of Lading freight for all claims under this Charter, and the Charterers to
389
have a lien on the Vessel for all moneys paid in advance and not earned.
390
  
391
19. Salvage
392
All salvage and towage performed by the Vessel shall be for the Charterers’ benefit and the cost of
393
repairing damage occasioned thereby shall be borne by the Charterers.
394
  
395
20. Wreck Removal
396
In the event of the Vessel becoming a wreck or obstruction to navigation the Charterers shall indemnify
397
the Owners against any sums whatsoever which the Owners shall become liable to pay and shall pay in
398
consequence of the Vessel becoming a wreck or obstruction to navigation.
399
  
400
21. General Average
401
The Owners shall not contribute to General Average.
402
  
403
22. Assignment, Sub-Charter and Sale
404
(a) The Charterers shall not assign this Charter nor sub-charter the Vessel on a bareboat basis (internal


405
bareboat charters excluded) except with the prior consent in writing of the Owners, which shall not be
406
unreasonably withheld, and subject to such terms and conditions as the Owners shall approve.
407
(b) The Owners shall not sell the Vessel during the currency of this Charter except with the prior written
408
consent of the Charterers, which shall always be subject to the buyer accepting an assignment of this
409
Charter. See also Clause 39.
410
  
411
23. Contracts of Carriage
412
*) (a) The Charterers are to procure that all documents issued during the Charter Period evidencing the
413
terms and conditions agreed in respect of carriage of goods shall contain a paramount clause incorporating
414
any compulsorily applicable in the trade; if no such legislation exists, the documents shall incorporate the
415
Hague or Hague-Visby Rules. The documents shall also contain the New Jason Clause and the Both-to-
416
Blame Collision Clause.
417
418
419
420
421
422
  
423
24.Bank Guarantee
424
425
426
427
  
428
25. Requisition/Acquisition
429
(a) In the event of the Requisition for Hire of the Vessel by any governmental or other competent authority
430
 (hereinafter referred to as “Requisition for Hire”) irrespective of the date during the Charter Period when
431
“Requisition for Hire” may occur and irrespective of the length thereof and whether or not it be for an
432
indefinite or a limited period of time, and irrespective of whether it may or will remain in force for the
433
remainder of the Charter Period, this Charter shall not be deemed thereby or thereupon to be frustrated or
434
otherwise terminated and the Charterers shall continue to pay the stipulated hire in the manner provided
435
by this Charter until the time when the Charter would have terminated pursuant to any of the provisions
436
hereof always provided however that in the event of “Requisition for Hire” any Requisition Hire or
437
compensation received or receivable by the Owners shall be payable to the Charterers during the
438
remainder of the Charter Period or the period of the “Requisition for Hire” whichever be the shorter.
439
  
440
(b) In the event of the Owners being deprived of their ownership in the Vessel by any Compulsory
441
Acquisition of the Vessel or requisition for title by any governmental or other competent authority


442
(hereinafter referred to as “Compulsory Acquisition”), then, irrespective of the date during the Charter
443
Period when “Compulsory Acquisition” may occur, this Charter shall be deemed terminated as of the date
444
such “Compulsory Acquisition”. In such event Charter Hire to be considered as earned and to be paid up
445
to the date and time of such “Compulsory Acquisition”.
446
  
447
26. War
448
(a) For the purpose of this Clause, the words “War Risks” shall include any war (whether actual or
449
threatened), act of war, civil war, hostilities, revolution, rebellion, civil commotion, warlike operations, the
450
laying of mines (whether actual or reported), acts of piracy, acts of terrorists, acts of hostility or malicious
451
damage, blockades (whether imposed against all vessels or imposed selectively against vessels of certain
452
flags or ownership, or against certain cargoes or crews or otherwise howsoever), by any person, body,
453
terrorist or political group, or the Government of any state whatsoever, which may be dangerous or are
454
likely to be or to become dangerous to the Vessel, her cargo, crew or other persons on board the Vessel.
455
(b) The Vessel shall not load contraband cargo, or to pass through any blockade, whether such blockade
456
be imposed on all vessels, or is imposed selectively in any way whatsoever against vessels of certain flags
457
or ownership, or against certain cargoes or crews or otherwise howsoever, or to proceed to an area where
458
she shall be subject, or is likely to be subject to a belligerent’s right of search and/or confiscation.
459
460
461
462
463
464
(d) The Charterers shall have the liberty:
465
(i) to comply with all orders, directions, recommendations or advice as to departure, arrival, routes, sailing
466
in convoy, ports of call, stoppages, destinations, discharge of cargo, delivery, or in any other way
467
whatsoever, which are given by the Government of the Nation under whose flag the Vessel sails, or any
468
other Government, body or group whatsoever acting with the power to compel compliance with their orders
469
or directions;
470
(ii) to comply with the orders, directions or recommendations of any war risks underwriters who have the
471
authority to give the same under the terms of the war risks insurance;
472
(iii) to comply with the terms of any resolution of the Security Council of the United Nations, any directives
473
of the European Union, the effective orders of any other Supranational body which has the right to issue
474
and give the same, and with national laws aimed at enforcing the same to which the Owners are subject,
475
and to obey the orders and directions of those who are charged with their enforcement.
476
  
477
478


479
480
481
482
483
484
485
486
487
488
489
  
490
27. Commission – See Box 33
491
492
493
494
495
496
497
498
  
499
28. Termination
500
(a) Charterers’ Default
501
The Owners shall be entitled to withdraw the Vessel from the service of the Charterers and terminate this
502
Charter with immediate effect by written notice to the Charterers if:
503
(i) the Charterers fail to pay hire in accordance with Clause 11. However, where there is a failure to make
504
punctual payment of hire due to oversight, negligence, errors or omissions on the part of the Charterers or
505
their bankers, the Owners shall give the Charterers written notice of the number of clear Banking Days
506
stated in Box 34 (as recognized at the agreed place of payment) in which to rectify the failure, and when
507
so rectified within such number of days following the Owners’ notice, the payment shall stand as regular
508
and punctual. Failure by the Charterers to pay hire within the number of days stated in Box 34 of their
509
receiving the Owners notice as provided herein, shall entitle the Owners to withdraw the Vessel from the
510
service of the Charterers and terminate the Charter without further notice;
511
(ii) the Charterers fail to comply with the requirements of:
512
(1) Clause 6 (Trading Restrictions); or
513
(2) Clause 13(a) (Insurance and Repairs) provided that the Owners shall have the option, by written notice
514
to the Charterers, to give the Charterers 21 banking days grace within which to rectify the failure without
515
prejudice to the Owners’ right to withdraw and terminate under this Clause if the Charterers fail to comply


516
with such notice;
517
(iii) the Charterers fail to rectify any failure to comply with the requirements of sub-clause 10(a)(i)
518
(Maintenance and Repairs) within 21 banking days after the Owners have requested them to do so and
519
any in any event so that the Vessel’s insurance cover is not prejudiced;
520
  
521
(b) Owners’ Default
522
If the Owners shall by any act or omission be in breach of their obligations under this Charter to the extent
523
that the Charterers are deprived of the use of the Vessel and such breach continues for a period of fourteen
524
(14) running days after written notice thereof has been given by the Charterers to the Owners or if the
525
provisions of Clause 42 apply, the Charterers shall be entitled to terminate this Charter with immediate
526
effect or to acquire the Vessel in accordance with Clause 36, in each case, by written notice to the Owners.
527
In the event this Charter is terminated for the grounds set out herein, the provisions of Clause 32(a) in
528
respect of the refund of the Advance Hire to the Charterers shall apply.
529
  
530
(c) Loss of Vessel - (See Clause 34)
531
532
533
534
535
536
537
  
538
(d) The termination of this Charter or the acquisition of the Vessel by the Charterers shall be without
539
prejudice to all rights accrued due between the parties prior to the date of termination and to any claim
540
that either party might have.
541
  
542
(e) Either party shall be entitled to terminate this Charter with immediate effect by written notice to the
543
other party in the event of an order being made or resolution passed for the winding up, dissolution,
544
liquidation or bankruptcy of the other party (otherwise than for the purpose of reconstruction or
545
amalgamation) or if a receiver is appointed, or if it suspends payment, ceases to carry on business or
546
makes any special arrangement or composition with its creditors.
547
  
548
29. Repossession
549
In the event of the termination of this Charter in accordance with the applicable provisions of Clause 28,
550
the Owners shall have the right to repossess the Vessel from the Charterers at her current or next port of
551
call, or at a port or place convenient to them without hindrance or interference by the Charterers, courts or
552
local authorities. Pending physical repossession of the Vessel in accordance with this Clause 29, the


553
Charterers shall hold the Vessel as gratuitous bailee only to the Owners. The Owners shall arrange for an
554
authorised representative to board the Vessel as soon as reasonably practicable following the termination
555
of this Charter. The Vessel shall be deemed to be repossessed by the Owners from the Charterers upon
556
the boarding of the Vessel by the Owners’ representative. All arrangements and expenses relating to the
557
settling of wages of the Charterers’ Master, officers and crew shall be the sole responsibility of the
558
Charterers.
559
For the avoidance of any doubt, this Clause shall not apply in case the Charterers exercise their right to
560
purchase the Vessel under Clause 36 hereof.
561
  
562
30. Dispute Resolution
563
This Charter and any other non-contractual obligations connected with it shall be governed by and
564
construed in accordance with English law and any dispute arising out of or in connection with this Charter
565
shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory
566
modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this
567
Clause. The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association
568
(LMAA) Terms current at the time when the arbitration proceedings are commenced. The reference shall
569
be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send
570
notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator
571
within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless
572
the other party appoints its own arbitrator and gives notice that it has done so within the 14 days specified.
573
If the other party does not appoint its own arbitrator and give notice that it has done so within the 14 days
574
specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice
575
to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The
576
award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement. If a
577
second arbitrator is appointed in accordance with the Arbitration Act, the two arbitrators shall appoint a
578
third arbitrator. If the two arbitrators are unable to agree upon a third arbitrator within twenty one (21) days
579
after appointment of the second arbitrator, either of the said two arbitrators may apply to the President for
580
the time being of LMAA to appoint the third arbitrator. Nothing herein shall prevent the parties agreeing in
581
writing to vary these provisions to provide for the appointment of a sole arbitrator. In cases where neither
582
the claim nor any counterclaim exceeds the sum of US$100,000 (or such other sum as the parties may
583
agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at
584
the time when the arbitration proceedings are commenced.
585
 
586
587
588
589


590
591
592
593
594
595
596
597
598
599
600
601
602
603
604
605
606
607
608
609
610
611
612
613
614
615
616
617
618
619
620
621
622
623
624
625
626
  


627
31. Notices (See Clause 43)
628
629
630
631


PART III
PROVISIONS TO APPLY FOR NEWBUILDING VESSELS ONLY
(Optional, only to apply if expressly agreed and stated in Box 37)

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
  
30
31
32


33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
  
65
66
67
68
69


70
  
71
72
73
74
75
  
76
77
78
79
80
81


PART IV
HIRE/PURCHASE AGREEMENT
(Optional, only to apply if expressly agreed and stated in Box 42)










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)

1
2
3
“The Bareboat Charter Registry”
4
5
“The Underlying Registry”
6
7
8
  
9
10
11
12
  
13
14
15
16
17
18
19
20
21


Additional Clauses to the Bareboat Charterparty
dated 23rd January, 2025 in respect of mv "Zampa Blue"

32.
Delivery
 
(a)
As advance payment of the Charter Hire, the Charterers shall pay to the Owners USD4,000,000 within three (3) Banking Days after signing and exchanging the Bareboat Charterparty (hereinafter the “1st Advanced Hire”) and USD4,000,000 on the Delivery Date (hereinafter the “2nd Advanced Hire” and jointly with the 1st Advanced Hire the “Advanced Hire”). The Advanced Hire shall be non-refundable except in the case that this Charter is terminated due to the Owner’s default or cancelled by the Charterers (in the case of the 1st Advanced Hire) (as set out in Clause 5 or Clause 28(b) or Clause 42 or otherwise).
1st Advanced Hire shall be paid by one telegraphic transfer free of bank charges and interest directly to the Owners’ nominated account.
2nd Advanced Hire shall be paid by one telegraphic transfer free of bank charges and interest to the Owners’ nominated account three (3) Banking Days prior to the expected date of delivery of the Vessel.

(b)
At any time after the date of this Charter, the Charterers shall be entitled to place two (2) representatives on board the Vessel until the Delivery Date strictly as observers only for the purpose of familiarization without interference with the Vessel's operation / schedule / manning, etc. The Owners agree to provide their utmost co-operation to the Charterers so that their representatives board the Vessel for maximum forty-five (45) calendar days or the last laden voyage whichever is longer.
The Charterers shall pay to the Owners at the time of delivery US$30/day/person as victualling/accommodation fee.

(c)
On the Delivery Date, the Owners shall deliver to the Charterers an inspection certificate issued at or after last AGM high risk port that the Vessel is free from Asian Gypsy Moth.

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(d)
The Charterers have the option to carry out, at the Charterers' risk and account, an inspection of the underwater parts of the Vessel at the port of delivery and prior to the delivery of the Vessel, always without interference with the Vessel's operation and/or schedule, by divers approved by the present Class in the presence of the Class surveyor arranged by the Owners at Charterer’s cost, provided that the Charterers declare their option to have an underwater inspection in writing to the Owners with divers’ company's full style, no later than seven (7) days prior to the expected date of readiness for delivery. If the Charterers fail to give such written notice, they shall lose their right to have an underwater inspection. In the event that the Class requires any 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 Owners shall at their cost and expense make the Vessel available for such inspection at the port of delivery. The Charterers’ representative(s) shall have the right to be present at such inspection as an observer only without interfering with the work or decisions of the Class surveyor or with the Vessel’s operation and delivery schedule.

If the conditions and/or water visibility at the port of delivery are deemed unsuitable by the Class surveyor for such inspection, the Owners shall make the Vessel available for the inspection at a suitable alternative place near to the original delivery place with the shifting costs, including bunkers and port related charges, to be shared 50:50 between Charterers and Owners. In such case, the Owners have the right to deliver the Vessel at such alternative place and retender NOR, regardless of notices given as per Clause 32. (e) but under consideration of Box 13.

The Charterers shall nominate a Class-approved diving company not later than seven (7) days before the expected date of the Vessel's readiness for delivery and shall arrange for the said divers to carry out the inspection at the earliest convenient timing under normal practice unless the conditions and/or water visibility are deemed unsuitable by the Class surveyor, and promptly after the Vessel’s arrival at the place of delivery or at the alternative place if above applies, without undue delay.

Notwithstanding anything to the contrary in this agreement, if any damage affecting present Class is found on underwater parts of the Vessel but the Class approves postponement of repair of such damage up to the Class next periodical drydock, then the Owners shall have the option to repair the same to the Class satisfaction before delivery or to make monetary settlement, including all costs and expenses prior to the purchase obligation, based on the average of two quotations issued by reputable shipyards in the delivery range (one for the Owners and one for the Charterers) which shall be mutually agreed between the Owners and the Charterers and deliver the Vessel with such recommendation. It is understood by the Owners and the Charterers that the amount of monetary settlement is confined to direct repair cost only and excludes indirect costs such as drydocking fee, general expenses, deviation and off-hire, etc., and that such amount of the monetary settlement is deducted from the Charterers’ payment at the time of delivery.

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If the present Class requires repair of such damage prior to the Class next periodical drydock, the Owners shall repair it up to the Class satisfaction at the Owners' account before delivery.

In the event that the Vessel is drydocked, the Owners shall have the right to designate the drydock place as the new delivery place if such drydock place is within the delivery range stated in Box 13, and the Charterers shall have the right to clean and paint the underwater parts at the Charterers' risk and account, subject to the Owners’ consent that shall not be unreasonably withheld, without interference with the Owners' and/or the Class surveyors' works whilst the Vessel is in drydock.

If the Charterers' work has not been completed by the time the Owners have completed their work, then the Owners shall have the right to tender the NOR and deliver the Vessel to the Charterers while the Vessel is still in the drydock. Any extra time incurred in the drydock by reason of the Charterers' works shall be for the Charterers' account. If the Vessel is delivered in the drydock, the cost for docking out shall be for the Charterers’ account.

Cancelling Date shall be extended by the corresponding days/time lost for repositioning of the Vessel, reaching agreement of monetary settlement, or for repairing the damages as per above including drydocking, waiting time for drydocking and deviation, if any.

The Charterers have the right to carry out divers' inspection as above for one time only and the decision of the Class surveyor shall bind both parties. Damage affecting Class or Class affecting damage shall mean the damage which the Class places condition/recommendation on the Vessel’s Class records, and any notes on the Class records are not taken into consideration.

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(e)
When the Vessel is ready for delivery in line with this Agreement after her arrival at the place of delivery and during delivery period as per Box 14, the Owners shall tender to the Charterers a Notice of Readiness for Delivery (the “NOR”). The NOR can be tendered anytime, day and night, including Saturdays, Sundays and holidays.

Owners may not tender NOR prior to the completion of the underwater inspection of the Vessel under Clause 32(d).

The Charterers shall take over the Vessel within three (3) Banking Days from the date of receipt of the Owners’ NOR, date of tendering the NOR inclusive. 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 delay US$20,000/day as liquidated damages, which shall be paid by the Charterers daily irrespective of the reason of the delay. If the delay exceeds seven (7) days, then the Owners shall have the right to cancel this Agreement and claim proven and reasonable damages for their losses flowing therefrom but Owners shall immediately return any part of the Advance Hire already paid by Charterers, minus the incurred liquidated damages as per above.

If, as a result of Charterers' not taking delivery of the Vessel within three (3) Banking Days including the date of tendering the NOR, any delivery documents, certificates and/or surveys become over the validity required under this Agreement or overdue, the Owners shall have the right to deliver the Vessel with such delivery documents already issued without reissue, and with certificates and/or surveys as they are without reissue or renewal.

(f)
The Charterers have accepted the Vessel after they voluntarily purchased and reviewed the superficial independent inspection report of the Vessel carried out by Idwal Marine Services Ltd at Nouadhibou, Mauritania on 26 – 27 of December 2024 (“Idwal Inspection report”) and examined the Vessel’s Class records, both of which are always under the Charterers’ sole discretion and responsibility for accepting same, therefore, this bareboat charter is outright and definite without further inspection by the Charterers and/or any other parties on or before delivery of the Vessel, except for the underwater inspection as provided in Clause 32. (d) hereof. For the avoidance of doubt, any clerical errors that may be contained in the Idwal Inspection report shall not affect the terms and conditions of the Vessel's sale stated in this Agreement or delay the Vessel’s delivery to the Charterers. In the event of a conflict between the provisions of this paragraph and any other implied or expressed provision of this Agreement and any addenda thereto, this paragraph shall always prevail to the extent of such conflict.

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The Vessel shall be delivered to the Charterers with her physical condition strictly as is / where is but substantially in the same condition as at the time of Inspection, fair wear and tear excepted, free of charter, cargo, AGM and stowaways, as per her Class requirements with Class maintained and free of conditions/recommendations at the time of delivery without any further inspection or survey by the Charterers, except for the underwater inspection as per Clause 32. (d) hereof. The burden of proof of any difference in the condition of the Vessel at the time of the Owners’ superficial inspection and the condition of the Vessel at the time of delivery, if any, shall always rest with the Charterers.

Upon the Vessel’s being delivered to and accepted by the Charterers in accordance with this Agreement, the Owners shall have no liability whatsoever for any fault or deficiency in their description of the Vessel or for any defects in the Vessel regardless of whether such defect was apparent or latent at the time of delivery.

The Vessel shall be delivered to the Charterers without hold cleaning as left by stevedore after completion of discharge but against the Owner’s compensation USD5,000.

33.
Charter Period

Subject always to the provisions hereto, as stated in Box 21 and Clause 2, the period of the chartering of the Vessel hereunder (herein referred to as the “Charter Period”) shall be six (6) months commencing on the Delivery Date, provided always that the chartering of the Vessel hereunder may be terminated pursuant to Clauses 25, 28, 34, 35 or otherwise.

34.
Insurance, Total Loss and Compulsory Acquisition

(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.

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(b)
The Charterers undertake with the Owners that throughout the Charter Period:


(i)
without prejudice to their obligations under Clause 13 hereof, they (the Charterers) shall keep the Vessel insured on the basis of the London Underwriters “Institute Time Clause-Hull” and “Institute War and Strikes Clauses” as amended, or on such similar terms with such top rated insurers as the Charterers shall choose (including Hull &Machinery, War Risk and P&I associations), and as shall be reasonably acceptable to the Owners, provided that any P&I association shall be a member of the International Group of P&I Clubs and current H&M 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). The Charterers agree that the Owners shall be assured as the co-assured in such insurances;


(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 shall be made to the Owners (who shall upon the receipt thereof apply the same in the manner described in Clause 34(e) hereof);


(iii)
the Charterers shall procure that duplicates of all cover notes, policies and certificates of entry shall be furnished electronically 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 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

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 (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 Clause 13 and any other provisions hereof, the Vessel shall be kept insured during the Charter Period in respect of marine and war risks on hull and machinery basis (including increased value) for not less than the amounts specified below during the Charter Period (hereinafter referred to as the "Minimum Insured Value"):

Minimum Insured Value

The Minimum Insured Value shall, at all time in the Charter Period, not be less than USD 35,000,000.-

(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") together with interest thereon as set out in Clause 11(f), if applicable, and shall cease to be under any liability to pay any hire or any other amounts, thereafter becoming due and payable under this Charter. 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:

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  (A)
an actual total loss of the Vessel shall be deemed to have occurred at noon (London time) 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 at noon (London time) 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 at noon (London time) 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 34, 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, if any, as assignees thereof) and applied by the Owners (or, as the case may be, the Mortgagees, if any):

FIRSTLY, in payment of all the Owners’ and the Charterers’ reasonable, properly incurred and documented costs incidental to the collection thereof, SECONDLY, in or towards reimbursement to the Charterers (to the extent that the Charterers have not already received the same in full) of a sum equal to the Advance Hire,

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THIRDLY, 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 any hires and interest due owed by the Charterers to the Owners, as well as the remaining hires under this Charter at such time together with the Purchase Obligation Price,

FOURTHLY, 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 USD1,500,000 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 USD1,500,000 payable under such insurance other than Total Loss shall be paid to the Charterers subject to the prior written consent of the Owners 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 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 34 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.

35.
Force Majeure
Should the Vessel not be able to be delivered before the Cancelling Date through the outbreak of war, the restraint of Governments, Princes or People, political reasons or any other cause over which the Owners have no control, then this Agreement shall be null and void and neither party shall be liable to the other. In such event the Advanced Hire (together with interest accrued thereon, if any) shall be immediately released in full to the Charterers.

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36.
Charterers’ obligation to purchase the Vessel

36.1
The Charterers are obliged to purchase the Vessel at the end of the Charter Period, at USD 22,500,000.- (hereinafter the “Purchase Obligation Price“):

36.2
The full amount of the Purchase Obligation Price shall be paid to the Owners’ nominated bank account upon delivery of the Vessel by the Owners to the Charterers. Payment of the Purchase Obligation Price shall be made by the Charterers or Charterers’ financiers by conditional payment with SWIFT message (MT 103/199 – wording of MT199 to be agreed between Owners, Owners’ bank, Charterers and Charterers’ financiers) or if the Owners’ nominated bank or the Charterers’ or Charterers’ financiers’ bank cannot make or accept payment by way of an MT 199, the Purchase Obligation Price shall be remmitted to the escrow account of a reputable law firm in Japan to act as escrow agent, mutually acceptable to the Owners, the Charterers and the Charterers’ financiers, if any. The cost for the escrow agent to be shared 50:50 between Owners and Charterers. The Owners in accordance with this Clause shall receive the Purchase Obligation Price in full free of bank charges and without any set-off or counterclaim, and free and clear of and without deduction or withholding of any kind.

36.3
The Charterers confirm that (a) as the Vessel will at all relevant times be in their physical possession and use pursuant to this Charter they do not require any inspection of the Vessel, (b) that they will accept unconditionally the Vessel and its classification records for the purpose of any sale under this Clause 36 and (c) such sale shall be on a strict “as she is where she is” basis and outright and definite.

36.4
The Owners, at the time of the delivery of the Vessel under Clause 35 hereof, shall be deemed to deliver the Vessel to the Charterers or their nominee with everything belonging to her on board and on shore (including spares) and the Charterers shall take over remaining bunkers, lubricating and hydraulic oils and greases and other consumables without additional payment.

36.5
The place of documentary closing shall be in Tokyo or such other place or it may be held virtually, as may be agreed by the parties in writing.

36.6
In exchange for payment by the Charterers of the Purchase Obligation Price to the Owners’ bank account, the Owners shall provide to the Charterers or their nominee the following delivery documents:

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  (i)
original Legal Bill(s) of Sale in a form recordable in the flag state which the Charterers may nominate, transferring title of the Vessel and stating that the Vessel is free from all mortgages, encumbrances, taxes and maritime liens or any other debts and liabilities whatsoever and is not subject to Port State or other administrative detentions, duly notarial attested and legalised by Apostille;


(ii)
evidence that all necessary corporate, shareholder and other action has been taken by the Owners to authorise the sale and delivery of the Vessel to the Charterers and the execution, delivery and performance of all documentation and actions in relation thereto, duly notarial attested and legalised by Apostille;


(iii)
a Power of Attorney of the Owners appointing one or more representatives to act on their behalf in the sale and delivery of the Vessel to the Charterers, duly notarial attested and legalised by Apostille (as appropriate);


(iv)
an electronic (PDF) original Certificate of Good Standing of the Owners issued by the Panamanian Consulate in Tokyo, Japan confirming the Owners to be duly registered and in good legal standing under the laws of the Republic of Panama and identifying the name, directors, registered agent, capital and address of the Sellers, dated not more than fifteen (15) Japanese Banking Days before the date of delivery; such directors and officers being the same directors and officers as at the date of the resolutions/minutes referred to under item (ii) above;


(v)
Certificate or Transcript of Registry issued by the competent authorities of the relevant flag State (as stated in Box 5) on the date of delivery evidencing the Owners’ ownership of the Vessel and that the Vessel is free from registered encumbrances and mortgages, to be faxed or e-mailed by such authority to the place of documentary closing with the original to be sent to the Charterers as soon as possible after delivery of the Vessel;


(vi)
if the Charterers wish to register the Vessel other than on the flag of the applicable flag State at the time, a Certificate of Deletion of the Vessel from the Vessel's flag registry (as stated in Box 5) or other official evidence of deletion appropriate to the Vessel's registry at the time of delivery, as well as the closed CSR for the Vessels, or, in the event that the registry does not as a matter of practice issue such documentation immediately, a written undertaking by the Owners to effect deletion from the Vessel's registry forthwith and provide a certificate or other official evidence of deletion to the Charterers, including also the closed CSR, promptly and latest within four (4) weeks after the proposed transfer date;

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 (vii)
electronic (PDF) of the Certification of the Permission to transfer/sell the Vessel from the Owners to the Charterers, issued by the Panama Maritime Authority of the Republic of Panama and dated not more than thirty (30) running days prior to the delivery of the Vessel to the Charterers;


(viii)
a commercial invoice for the Vessel; and


(ix)
any such additional documents as may reasonably be required by the competent authorities of the flag state nominated by the Charterers for the purpose of registering the Vessel, provided the Charterers notify the Owners promptly;


(x)
all classification, technical and other documents/certificates (including drawings) in the possession of the Owners in relation to the Vessel.

36.7
At the time of delivery the Charterers shall provide the Owners with:

  (i)
evidence that all necessary corporate, shareholder and other action has been taken by the Charterers or their nominee to authorise the acquisition of the Vessel by the Charterers or their nominee and the execution, delivery and performance of all documentation and actions in relation thereto, duly legalized by Apostille by the Special Agent of the Marshall Islands in Piraeus, Greece; and


(ii)
Power of Attorney of the relevant purchaser appointing one or more representatives to act on its behalf in the acquisition of the Vessel, be duly legalized by Apostille by the Special Agent of the Marshall Islands in Piraeus, Greece.

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36.8
(a) If any of the documents listed in Clauses 36.6 and 36.7 are not in the English language they shall be accompanied by an English translation by an authorised translator or certified by a lawyer qualified to practice in the country of the translated language;

(b) the Parties shall to the extent possible exchange copies, drafts or samples of the documents listed in Clauses 36.6 and 36.7 for review and comment by the other party prior to the proposed transfer date;

(c) the Charterers shall retain the classification certificate(s) and the Vessel’s log books, all plans, drawings and manuals and other certificates which are on board the Vessel or in their or their manager’s possession;

(d) the Charterers and the Owners shall sign and deliver to each other a Protocol of Redelivery and Acceptance under this Charter (PORDA) confirming the date, place and time of re-delivery of the Vessel by the Charterers to the Owners under this Charter; and

(e) upon the sale and delivery of the Vessel by the Owners to the Charterers, they shall sign and deliver to each other a Protocol of Delivery and Acceptance (PODA) confirming the date, place and time of the sale/delivery of the Vessel from the Owners to the Charterers and the Charterers’ acceptance of the Vessel.

36.9
The Owners shall warrant that the Vessel, at the time of sale and delivery under this Clause 36, shall be free from all registered encumbrances, mortgages or other security interests, debts or maritime lines whatsoever created by the Owners and that the Owners have not committed any act or omissions which would impair title to the Vessel. The Owners hereby agree to indemnify and hold harmless the Charterers in respect of any and all damages, costs and expenses whatsoever resulting from any breach of such warranty.

36.10
Any taxes, fees and expenses in connection with the purchase and registration of the Vessel in the flag state nominated by the Charterers shall be for the Charterers’ account and, if required, similar charges in connection with the closing of the applicable flag State register and permission to transfer to another flag at the time shall be for the Owners’ account.

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36.11
The Vessel with everything belonging to her shall be at the Owners’ risk and expense until she is delivered to the Charterers. Without prejudice to Clause 36.9, the Vessel shall be delivered strictly as she is and where she is at the time of delivery without any recourse to or representation or warranty from the Owners for matters which the Charterers had undertaken to maintain/perform in accordance with this Charter. Without prejudice to Clause 36.10, each party hereto shall bear its own registration, legal or other expenses whatsoever incurred in transferring the title from the Owners to the Charterers.

36.12
Should the Purchase Obligation Price not be paid in full to the Owners on the proposed transfer date, the Owners have the right to cancel the sale and delivery of the Vessel under this Clause 36.

36.13
Should the Owners fail to validly complete a legal transfer on or before the proposed transfer date, the Charterers shall have the option of cancelling their option to acquire the Vessel and claim compensation for any loss and damages, or as the case may be, no longer be obliged to acquire the Vessel. Should the Owners fail to be ready to validly complete a legal transfer as aforesaid the provisions of Clause 42 shall apply.

36.14
Upon completion of such purchase of the Vessel as set out in this Clause, the Charter and all further rights and obligations of the parties hereunder shall terminate.

36.15
For the avoidance of doubt, the Purchace Option Price includes the value of any belongings to the Vessel at the time of delivery under this Clause.

37.
Charterers’ disclosure
 
37.1
Upon Owners request (acting reasonably), the Charterers, during the Charter Period, shall (i) inform the position and voyage details of the Vessel and other relevant information (including but not limited to the name of the immediate sub-charterers and the managers of the Vessel) in a manner satisfactory to the Owners and (ii) provide a copy of relevant documents of compliance (DOC) and safety management certificate (SMC) of ISM code to the Owners which shall be procured and complied with by the Charterers and the “Company” (as defined by the ISM code and so defined in this Charter) at expense, cost and time of the Charterers during the Charter Period.

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37.2
The Owners are entitled to inspect copies of the Vessel's logs and records at any reasonable time.

37.3
Upon Owners’ request, but not more than once per year, the Charterers and/or Charterer’s Guarantor, throughout the Charter Period, shall provide their most recent available audit reports.

38.
Trade and Compliance

38.1
The Charterers and the Owners hereby respectively undertake to each other that no person/s or entity/ies worked for or engaged by the Charterers or, as the case may be, the Owners regarding this Charter will be designated under any applicable national or international law, regulations or treaties imposing trade and economic sanctions.

38.2
The Charterers and the Owners further undertake to each other that any performance under this Charter will not infringe any sanctions or restrictions under any applicable national law, regulation, treaties or trade or economic sanctions.

38.3
The Owners hereby guarantee that on the Delivery Date the Vessel and/or the Owners are not blacklisted, or under any kind of sanctions, by any state or organization, such as, but not limited to ITF, OFAC, EU, UK, any marine insurance providers, including P&I clubs, or the Arab Boycott League and that the Vessel has not trade in the last 24 months in any of the following countries/area, Cuba, Iran, North Korea, Crimea and Syria.

39.
Assignment, Transfer of Vessel and Performance Guarantee
 
39.1
This Charter shall be binding upon and ensure for the benefit of the Owners and the Charterers and their respective successors and permitted assigns.

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39.2
The Owners shall not be entitled to assign or transfer any of their rights or obligations under this Charter, unless with the prior written consent of the Charterers. Any assignment or transfer by the Owners under this Clause shall be effected at no cost to the Charterers and without varying any of the rights of the Charterers under this Charter. The Owners agree that in case of assignment by the Owners of this Charter in accordance with this Clause 39, the Charterers shall not be obliged to make any payments or incur any additional costs which they would not have made if such assignment, transfer or change had not occurred. For the avoidance of doubt, the provisions of Clause 36.2 shall always apply.

39.3
During the Charter Period, the Owners shall not sell the Vessel except with the prior written consent of the Charterers, provided always that, notwithstanding such change, this Charter will continue on identical terms (save for logical, necessary and consequential amendments satisfactory to the Charterers) and that such change will not cause any adverse effect on the operation of the Vessel or the quiet enjoyment of the Vessel by the Charterers. All costs or expenses whatsoever arising in relation to any such transfer shall be borne by the Owners.

39.4
The Owners shall procure that there shall be no change to its shareholding during the Charter Period without the prior written consent of the Charterers.

39.5
Any and all performances of the Charterers hereunder shall be guaranteed by Seanergy Maritime Holdings Corp. (the “Charterers’ Guarantor”) in the form of a performance guarante saticfactory to the Owners and the Charterers’ Guarantor.

39.6
Any and all performaces of the Owners hereunder shall be guaranteed by ITOCHU Corporation (the “Owners’ Guarantor”) in a form of a performance guarantee satisfactory to the Charterers and the Owners’ Guarantor.

40.
Flag and Name of Vessel

40.1
The Vessel shall be registered in the ownership of the Owners under the Panama flag for the Charter Period on Owners’ account. The Owners shall arrange for the termination of Vessel’s registration in their name under the Panama Flag at the end of the Charter Period and upon payment of the Purchase Option Price.

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40.2
Notwithstanding Clause 40.1 above and Clause 10(d), the Charterers shall be entitled to register the Vessel in their name as bareboat charters under the Marshall Islands flag as Bareboat Charter Registry on the condition that any expenses and costs of such registration in the Bareboat Charter Registry shall be for the Charterers’ account. The Owners hereby undertake to take all such steps to obtain and furnish such documents (including but not limited to any consent letter of the Owners and/or the mortgagee (if any)) and take such other actions as the Charterers may reasonably request in order to facilitate the bareboat charter registration of the Vessel under the Bareboat Charter Registry. In addition, the Charterers shall arrange (at their risk, time and cost) for the termination of the Bareboat Charter Registry at the end of the Charter Period or termination of this Charter, if earlier. The Owners hereby undertake to take all 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 registration of the Vessel in the name of the Charterers under Bareboat Charter Registry the Charterers may designate and the termination of the Bareboat Charter Registry.

40.3
Subject only to prior notification to the relevant authorities of the flag State of the Vessel at the time, the Charterers shall be entitled from time to time to change the name of the Vessel provided however that any costs incurred by the Owners, shall be for the account of the Charterers. The Owners shall have no right to change the name and/or flag of the Vessel during the Charter Period.

41.
Owners’ covenants

41.1
The Owners hereby covenant and undertake, that the Charterers shall not be disturbed or interfered with their quiet use, possession and enjoyment of the Vessel and their operation of the Vessel (except as expressly provided for herein).  The Owners and Charterers acknowledge that this provision is not contradictory with any other rights of the Owners under this Charter.

41.2
If the Vessel is under arrest, detention, seizure or confiscation as a result of the Owners’ default, omission, negligence or misconduct, the Owners shall arrange immediately for the release of the Vessel from such arrest, detention, seizure or confiscation, provided that there is not any contributory negligence from the Charterers prohibiting the Owners from effecting such a release.

17
41.3
During the Charter Period the Owners shall do all that may be necessary to maintain such documentation and registration in force and so that the Owners shall be held to be the sole and absolute owners of the whole of the Vessel, provided that any annual tonnage taxes and reasonable expenses and fees and other expenses whatsoever for maintenance and operation of such documentation and registration (including fees payable to lawyers) shall be borne and paid by the Charterers in accordance with this Charter.

42
Owners’ defaults

42.1
It is hereby agreed between the Owners and the Charterers that upon occurrence of any of the following events or any other act or omission in breach of the Owners’ obligations under this Charter (a “Default”) which is proven by the Charterers:

  (a)
title of the Vessel is or has become invalid due to any misconduct or negligence of the Owners which has the effect of causing registration of the Vessel to be cancelled or annulled;


(b)
ownership of the Vessel is transferred by the Owners in violation of this Charter;


(c)
the Owners fail to maintain their corporate existence or any required authorisation which may at any time be required for the continued performance of all of the Owners’ obligations under or with respect to this Charter;


(d)
the Vessel is under arrest, detention, seizure or confiscation as a result of the Owners’ default, negligence, omission or misconduct and the Owners fail to procure the release of the Vessel within forty-five (45) days of the arrest, detention, seizure, confiscation;

18

 (e)
there is a change in the legal and/or beneficial owner of the shares in the Owners without the Charterers’ prior written approval;


(f)
the Owners fail to transfer to the Charterers or their nominee legal title to the Vessel when required under this Charter;


(g)
the Owners are clearly in breach of the quiet enjoyment covenants provided under Clause 41.1; or


(h)
the Owners are in breach of Clause 36.2,

     the Charterers shall be entitled to:


 (i)
stop paying charterhire from the date of such Default until such Default is rectified to the satisfaction of the Owners (whereupon the Charterers must again pay Charterhire in full) without any interest being accruing in respect of such unpaid Charterhire under Clause 11 or otherwise; and

  (ii)
if such Default is not remedied within fourteen (14) running days after its occurrence, terminate this Charter and to acquire the Vessel in accordance with the term of Clause 36. Upon receiving the relevant payment the Owners shall transfer to the Charterers or their nominee title to the Vessel on substantially the terms set out in Clause 36. Any losses or damages sustained by the Charterers and caused by the Owners’ default will be set-off against the Purchase Option Price.

42.2
Upon termination of this Charter by the Charterers in accordance with Clause 42.1 and provided that the Charterers do not seek to acquire the Vessel, the Owners shall also bear the additional reasonable cost to take redelivery of the Vessel incurred by the Charterers due to such Default, refund the Advanced Hire (as per Clause 32(b)) and bear all costs and expenses for the termination of the Bareboat charter registration with the Bareboat Charter Registry (but the Charterers shall remain liable to redeliver the Vessel to the Owners in accordance with the relevant provisions hereof relating to the redelivery of the Vessel).

19
43.
Communication

43.1
Except as otherwise provided for in this Charter, all notices or other communications under or in respect of this Charter to either party hereto shall be in writing and shall be made or given to such party at the address, facsimile number or e-mail address appearing below (or at such other address, facsimile number or e-mail address as such party may hereafter specify for such purposes to the other by notice in writing):

  (a)
if to the Owners at:

Bluejay Maritime S.A.
c/o ITOCHU Corporation
Address: 53rd Street, Urbanizacion Obarrio, Torre Swiss Bank, 16th Floor, Panama, Republic of Panama
Tel: (81)-3-3497-2959
Fax: (81)-3-3497-7111
E-mail: tokbm-2@itochu.co.jp

 
(ii)
if to the Charterers at:

Attention: Legal department and Finance department
c/o Seanergy Maritime Holdings Corp.
Address: 154 Vouliagmenis Avenue, 16674 Glyfada, Greece
Tel: +30213 0181507
 E-mail: legal@seanergy.gr and finance@seanergy.gr

A letter shall be deemed to be received upon receipt by the addressee of such communication and any communication by facsimile shall be deemed to be received upon receipt of the transmission by the addressee in fully legible form. Email shall be deemed to be delivered if no failure notice or non-delivery notice is received by the sender of such email within twenty-four (24) hours of sending the relevant email or a delivery receipt message is received by the sender in respect of the relevant email.

20
43.2
A written notice includes a notice by facsimile or e-mail. A notice or other communication received on a non-working day or after business hours in the place of receipt shall be deemed to be served on the next following working day in such place. Subject always to the foregoing sentence, any communication by personal delivery or letter shall be deemed to be received on delivery to the addressee of such communication, any communication by e-mail shall be deemed to be received upon receipt of the transmission by the addressee in fully legible form and any communication by facsimile shall be deemed to be received upon appropriate acknowledgment by the addressee’s receiving equipment.

43.3
All communications and documents delivered pursuant to or otherwise relating to this Charter shall either be in English or accompanied by a certified English translation.

44.
Confidentiality
 
This Charter including all negotiations, fixtures and written correspondence shall remain strictly private and confidential between the Owners, the Charterers, financiers/banks, legal counsels, auditors and insurance companies.

The provisions of this Charter, and all related documents and negotiations, fixtures and written correspondence are strictly private and confidential between the parties, the Charterers, the Owners, the Owners’ financiers/banks, legal counsels and auditors and each party will use all reasonable efforts to ensure that no disclosure relating to any of the foregoing will be made or issued by or on behalf of any party to this agreement provided that:

(a)
each Party may make disclosures with respect to this Agreement with the express prior written consent of the other Party; and

(b)
each Party may make appropriate disclosures on a need to know basis and subject to similar disclosure restrictions to their respective shareholders or prospective shareholders, bankers or other financiers, auditors or professional advisors, or as necessary to rating agencies, or as required by the rules or regulations of any applicable stock exchange or similar body (whether or not having the force of law), or as required by any court order or applicable law, rule or regulation.

21
45.
Using Owner’s name

The Owners acknowledge that whilst the Vessel is subject to this Charter the Charterers may at their own cost and in their own name or in the name of the Owners, or jointly with the Owners, with the Owners' prior reasonable written consent, and subject always to the Owners first being indemnified and secured to their satisfaction by the Charterers against all potential losses, cost, damages and expenses, including cost of the Owners' management time, make such demands and take such action as they may think fit against any repairer or the third party heretofore or hereafter fitting, installing or carrying out work, repairs or modifications on in or to the Vessel, (or any vendor of any part of the Vessel or supplier of equipment or parts fitted or to be fitted to or installed in or on the Vessel or suppliers of services in connection with the Vessel).

46.
Miscellaneous

46.1
No failure or delay on the part of either party hereto to exercise any power, right or remedy under this Charter shall operate or be interpreted as a waiver hereof or thereof, nor shall any single or partial exercise by a party hereto of any power, right or remedy preclude any other or further exercise hereof or thereof or the exercise of any other power, right or remedy by such party.  No waiver by either party of any of the terms and conditions of this Charter shall be binding unless it is made in writing and delivered to the other party. Any such waiver shall relate only to such matter, non-compliance or breach as it expressly relates to and shall not apply to any subsequent or other matter, non-compliance or breach. In addition, any such waiver may be given subject to any conditions thought fit by the relevant party granting the same.

46.2
Any amendment of any provision of this Charter shall only be effective if the Owners and the Charterers so agree in writing. Any consent by the Owners under this Charter must be made in writing.  In addition, any such waiver or consent may be given subject to any conditions thought fit by the relevant party granting the same.

22
46.3
The remedies provided in this Charter are cumulative and are not exclusive of any remedies provided by law.

46.4
If any provision of this Charter is prohibited or unenforceable in any jurisdiction such prohibition or unenforceability shall not invalidate the remaining provisions hereof or affect the validity or enforceability of such provision in any other jurisdiction.

46.5
This Charter may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any party hereto may execute this Charter by signing any such counterpart.

46.6
Any person who is not a party to this Charter shall have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms.

46.7
In the event of any inconsistency in the terms set out in Part I and Part II of this Charter and the Additional Clauses (i.e. Clauses 32 to 48) of this Charter, then the terms of the Additional Clauses shall prevail.

46.8
The Owners shall, in agreement with the Charterers, take all reasonable steps to mitigate any circumstances which arise and which would result in any gross up or other increased amounts becoming payable under or pursuant to any Clause of this Charter including (but not limited to) transferring its rights and obligations under this Charter to an Affiliate.

47.
Designated Entities

47.1
The provisions of this clause shall apply in relation to any sanction, prohibition or restriction imposed on any specified persons, entities or bodies including the designation of specified vessels or fleets under United Nations Resolutions or trade or economic sanctions, laws or regulations of the European Union or the United States of America.

47.2
The Owners and the Charterers respectively warrant for themselves that at the date of this fixture and throughout the duration of this Charter they are not subject to any of the sanctions, prohibitions, restrictions or designation referred to in Clause 47.1 which prohibit or render unlawful any performance under this Charter or any sublet or any Bills of Lading.

23
47.3
If at any time during the performance of this Charter either party becomes aware that the other party is in breach of warranty as aforesaid, the party not in breach shall comply with the laws and regulations of any Government to which that party or the Vessel is subject, and follow any orders or directions which may be given by anybody acting with powers to compel compliance, including where applicable the Owners’ flag State. In the absence of any such orders, directions, laws or regulations, the party not in breach may, in its option, terminate the Charter forthwith or, if cargo is on board, direct the Vessel to any safe port of that party’s choice and there discharge the cargo or part thereof.

47.4
If, in compliance with the provisions of this Clause, anything is done or is not done, such shall not be deemed a deviation but shall be considered due fulfilment of this Charter.

47.5
Notwithstanding anything in this Clause to the contrary, the Owners or the Charterers shall not be required to do anything which constitutes a violation of the laws and regulations of any State to which either of them is subject.

47.6
The Owners or the Charterers shall be liable to indemnify the other party against any and all documented claims, losses, damage, costs and fines whatsoever suffered by the other party directly resulting from any breach of warranty as aforesaid.

48.
Expenses

Any reasonable and documented legal fees for this Charter shall be borne by the Charterer up to the maximum amount of USD20,000.

24
49.
ETS – Emission Trading Scheme

Notwithstanding any other provision in this Charter, the Owners and the Charterers agree as follows:

"Emission Allowances" means an allowance, credit, quota, permit or equivalent, representing a right of a vessel to emit a specified quantity of greenhouse gas emissions recognised by the Emission Scheme, or generally in connection with emissions, carbon reduction or other environmental or sustainability national or international laws or regulations applicable to the Vessel and her operation.

"Emission Scheme" means a greenhouse gas emissions trading scheme and any emissions, carbon reduction or other environmental or sustainability national or international laws or regulations applicable to the Vessel and her operation, which for the purposes of this Clause 48 shall include (without limitation) the European Union Emissions Trading System and any other similar systems imposed by any similar or equivalent international, regional, national or local scheme implemented by the IMO or any other lawful national or other authority that regulate the issuance, allocation, trading or surrendering of Emission Allowances.

(i)          Subject to any mandatory provisions of any applicable Emissions Scheme and the corresponding national or international laws and regulations, the Charterers shall exercise their best endeavours to take all necessary actions to be the sole responsible party for compliance with all Emission Scheme obligations in relation to the Vessel, provided this is feasible and legally permissible, pursuant to any domestic or international law or regulation, directed to the Owners as registered or beneficial owners of the Vessel.

(ii)         Notwithstanding sub-paragraph (i) above, the Charterers shall be permitted to sub-delegate such Emission Scheme responsibility on to any entity, including without limitation to the relevant holder of Document of Compliance/ISM Company under the ISM Code in respect of the Vessel, as it may be lawfully allowed by the applicable Emission Scheme and subject to the consent of the holder of the Document of Compliance/ISM Company of the Vessel. Such sub-delegation shall be documented in accordance with the requirements imposed by the relevant Emissions Scheme and a signed copy of such documentation shall be provided by or made available to the Owners, including but not limited to any written mandate requested by the competent authorities.

(iii)       The Charterers and the Owners shall co-operate and assist each other to deliver all such forms as are required to be filed to any relevant authorities in relation to the delegation and assumption of any Emission Scheme responsibilities within reasonable time and always in accordance with any deadlines set by the competent authority and the applicable laws or regulations.

25
(iv)        Without limiting the foregoing, throughout the Charter Period, the Charterers or any mandated entity, shall arrange for providing and paying for or otherwise surrendering the Emission Allowances corresponding to the Vessel’s emissions under the scope of the applicable Emission Scheme without any delay whatsoever.

(v)         Emission Allowances, taxes, charges, levies, fees, fines, costs or expenses incurred or imposed in connection with any Emissions Scheme, shall be for the Charterers' account and are to be settled directly by them or their mandated entity (subject always to any mandatory provisions of the applicable Emissions Scheme or relevant laws or regulations).

(vi)         The Charterers shall use their best endeavours to ensure that the Charterers or any mandated, as above, entity shall comply, sign, acknowledge in writing in any form that may be reasonably required, and provide all such information and documents to the Owners as necessary to enable the Owners and any Emission Scheme obligor to document and evidence to any authority their delegation/mandating of all Emission Scheme obligations in relation to the Vessel (and the assumption of same by the relevant mandated entity), as may be required from time to time during the Charter Period by the Owners, any manager or other mandated entity, and any relevant Emission Scheme authority, in conformity with the provisions of this Clause. The Owners shall also ensure to provide the Charterers with all necessary information, documents or details as above and as same may be required by any authorities in connection any applicable Emissions Scheme, including but not limited to opening any accounts and/or surrendering any Emissions Allowances, in order to ensure that the Vessel will comply with any applicable Emissions Scheme laws and regulations.

(vii)       The Owners undertake to relay to the Charterers, without delay, any information that might be received by the Owners for any reason whatsoever, including by error of any authority, and which might relate to compliance with any Emission Scheme.

(viii)     The Charterers undertake to indemnify and hold harmless the Owners against any and all losses suffered or incurred by the Owners arising in relation to this Charter in any manner (except if caused by the Owners) out of or otherwise in connection with the ETS responsibilities.

(ix)      In the event of expiry, cancellation, rescission or termination of this Charter, the Charterers and/or their sub-delegate notify the relevant administrating authority of the cancellation of the mandate issued pursuant to this clause, within seven (7) days of such cancellation.


26
EX-4.44 17 ef20039029_ex4-44.htm EXHIBIT 4.44
Exhibit 4.44

Date: 23rd January, 2025
To:            Bluejay Maritime S.A.
53rd Street, Urbanizacion Obarrio, Torre Swiss Bank, 16th Floor, Panama, Republic of Panama (the “Owners”)

Dear Sirs,
GUARANTEE

In consideration of the entry into by you of a Bareboat Charter Party (hereinafter called the “BBCP”) dated January 23rd, 2025, with Blue Shipping Co., of the Republic of the Marshall Islands (hereinafter called “Blue Shipping”) as charterers for the bareboat chartering of the motor vessel "Zampa Blue" (tbr Blueship) with IMO number 9454163 (hereinafter called the “Vessel”), we, the undersigned, as the primary obligor, guarantee to you and your successors and assignees the due and punctual performance by Blue Shipping of all its liabilities, obligations and responsibilities under the BBCP, and any supplements, amendments, changes or modifications hereafter made thereto.

If, at any time, default is made by Blue Shipping in the performance and/or observance of any term, provision, condition, obligation or agreement, or in any other matter or thing pertaining to 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 Blue Shipping, its assignees or successors then we will perform, or cause to be so performed, all terms, provisions, conditions, obligations and agreements contained in the BBCP, and any supplements, amendments, changes or modifications hereafter made thereto, and will pay, as our own debt and within seven (7) Banking Days (as defined in the BBCP) on demand, any sum that is due and payable in consequence of the non-performance by Blue Shipping, its assignees or successors of any of the said terms, provisions, conditions, obligations and agreements.

Any demand made by you under this guarantee shall be made in writing signed by your authorized signatory and shall specify the default of Blue Shipping and shall be accompanied by a copy of the notice of such default served on Blue Shipping by you together with a statement (if any) that Blue Shipping have failed to remedy such default within any applicable grace period.


We hereby agree to indemnify you on demand and keep you indemnified against all costs, charges, expenses, claims, liabilities, losses, duties, taxes and fees (including, but not limited to, reasonable and documented legal fees and expenses on a full indemnity basis) thereon suffered or incurred by you, directly as a result of any breach or non-performance of, or non-compliance by Blue Shipping with, any of its obligations under or pursuant to 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.

We hereby affirm and consent to any and all amendments, changes or modifications to be hereafter made to the 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 Blue Shipping under 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 Blue Shipping or any other person in respect of our obligations under this guarantee;

e)
We will 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 BBCP and shall only become null and void upon the fulfillment of all obligations of Blue Shipping under the BBCP whereafter this guarantee shall be immediately returned to us;

b)
shall be in addition to, and shall not be prejudiced or affected by, any other security for the obligations of Blue Shipping 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 Blue Shipping or the appointment of a receiver or administrative receiver or administrator or trustee or similar officer of any of the assets of Blue Shipping or any term or concessions given by you to Blue Shipping 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 43 (Communication) 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 fourteen (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 fourteen (14) calendar days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) calendar 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. If a second arbitrator is appointed in accordance with this clause, the two arbitrators shall appoint a third arbitrator. If the two arbitrators are unable to agree upon a third arbitrator within twenty one (21) calendar days after appointment of the second arbitrator, either of the said two arbitrators may apply to the President for the time being of LMAA to appoint the third arbitrator. 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$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.

Please sign and return a copy of this letter agreement if you agree to its terms.

For and on behalf of
Seanergy Maritime Holdings Corp. (as the “Guarantor”)

/s/ Stavros Gyftakis
   
   
Name: Stavros Gyftakis
Title: Chief Financial Officer

We acknowledge receipt and agree to the terms of this letter agreement:

/s/ Kyosuke Sato
   
   
Signed by Kyosuke Sato for and on behalf of Bluejay Maritime S.A.


EX-4.45 18 ef20039029_ex4-45.htm EXHIBIT 4.45
Exhibit 4.45
 
Dated  24 February 2025
 
US$53,560,000
 
SUSTAINABILITY-LINKED TERM LOAN FACILITY
 
WORLD SHIPPING CO.
HONOR SHIPPING CO. and
MEI SHIPPING CO.
as joint and several Borrowers
and Hedge Guarantors
 
and
 
SEANERGY MARITIME HOLDINGS CORP.
as Guarantor
 
and
 
PIRAEUS BANK S.A.
as Original Lender
 
FACILITY AGREEMENT
 
relating to the refinancing of the existing indebtedness
secured on m.vs. "WORLDSHIP" and "HONORSHIP" and financing part
of the acquisition cost of m.v. "BERGE KITA" (tbr. "MEISHIP")




Index
 
Clause
  
Page
     
Section 1 Interpretation
2
1
Definitions and Interpretation
2
Section 2 The Facility
28
2
The Facility
28
3
Purpose
28
4
Conditions of Utilisation
28
Section 3 Utilisation
30
5
Utilisation
30
Section 4 Repayment, Prepayment and Cancellation
33
6
Repayment
33
7
Prepayment and Cancellation
33
Section 5 Costs of Utilisation
37
8
Interest
37
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 - Guarantor
53
18
Joint and several liability of the Borrowers
56
19
Guarantee and Indemnity – Hedge Guarantors
57
Section 8 Representations, Undertakings and Events of Default
61
20
Representations
61
21
Information Undertakings
68
22
Financial Covenants
71
23
General Undertakings
73
24
Insurance Undertakings
80
25
MOA Undertakings
86
26
General Ship Undertakings
86
27
Accounts and application of Earnings
93
28
Security Cover
94
29
Events of Default
96
Section 9 Changes to the Parties
101
30
Changes to the Lender
101
31
Changes to the Transaction Obligors
102
Section 10 Administration
104
32
Payment Mechanics
104
33
Set-Off
106
34
Conduct of Business by the Lender
106
35
Bail-In
106
36
Notices
106
37
Calculations and Certificates
108


38
Partial Invalidity
109
39
Remedies and Waivers
109
40
Entire Agreement
109
41
Settlement or Discharge Conditional
109
42
Irrevocable Payment
109
43
Confidential Information
110
44
Confidentiality of Funding Rates
112
45
Amendments
113
46
Counterparts
113
Section 11 Governing Law and Enforcement
114
47
Governing Law
114
48
Enforcement
114
     
Schedules
    
     
Schedule 1 The Parties
115
 
Part A The Obligors
115
 
Part B The Original Lender
118
Schedule 2 Conditions Precedent
119
 
Part A Conditions Precedent to Utilisation Request
119
 
Part B Conditions Precedent to Prepositioning of Funds
122
 
Part C Conditions precedent to the Release of Prepositioned Funds
124
Schedule 3 Requests
126
 
Part A Utilisation Request
126
 
Part B Selection Notice
128
Schedule 4 Timetables
130
Schedule 5 Form of Compliance Certificate
131
     
Execution
  
     
Execution Pages
132


THIS AGREEMENT is made on 24 February 2025
 
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)
MEI SHIPPING CO., a corporation incorporated in the Republic of the Marshall Islands with registration number 129759, whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 as a borrower ("Borrower C")
 
(4)
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")
 
(5)
THE COMPANIES listed in Part A of Schedule 1 (The Parties) as hedge guarantors (the "Hedge Guarantors")
 
(6)
PIRAEUS BANK S.A., with corporate registration number (GCR NO) 157660660000, having its registered address at 4 Amerikis Street, 105 64 Athens, Greece acting through its office at 170 Alexandras Avenue, 11521 Athens 105 64, Greece as lender (the "Original Lender")
 
BACKGROUND
 
(A)
The Lender has agreed to make available to the Borrowers a facility in aggregate of up to $53,560,000 in two Tranches as follows:
 

 (i)
Tranche A in an amount equal to the lesser of (a) US$24,000,000 and (b) the Existing Indebtedness as at the Utilisation Date, for the purpose of refinancing the Existing Indebtedness; and
 

 (ii)
Tranche B in an amount equal to the lesser of (a) US$29,560,000, (b) 80 per cent. of the Purchase Price of Ship C, (c) 76 per cent. of the Initial Market Value of Ship C, (d) such amount which when added to Tranche A results in a Loan amount which does not exceed 52 per cent. of the aggregate Initial Market Value of the Ships and (e) such amount which when added to Tranche A results in a Loan amount which does not exceed 53.1 per cent. of the aggregate of the Initial Market Value of Ship A and Ship B plus the Purchase Price of Ship C, for the purpose of part financing the Purchase Price payable for Ship C under the MOA.
 
(B)
The Lender may enter into interest rate swap transactions with the Borrowers from time to time to hedge the Borrowers' exposure under this Agreement to interest rate fluctuations.

OPERATIVE PROVISIONS


SECTION 1

INTERPRETATION
 
1
DEFINITIONS AND INTERPRETATION
 
1.1
Definitions
 
In this Agreement:
 
"Account" means an Operating Account or the Pledged Deposit Account.
 
"Account Bank" means Piraeus Bank S.A. acting through its office at 4 Amerikis Street, 105 64 Athens, Greece or acting through its branch at 170 Alexandras Avenue, 115 21 Athens, Greece or any replacement bank or other financial institution as may be approved by the Lender in its discretion.
 
"Account Security" means a document creating Security over an Account, in agreed form.
 
"AER" means, in relation to a Ship, the energy efficiency ratio of that Ship using the parameters of fuel consumption, distance travelled and deadweight at maximum summer draught, reported in unit grams of CO2 per tonne per mile and calculated as follows:


where:
 

 (a)
Ci is based on fuel consumption multiplied by the relevant CO2 factor per departure voyage i;
 

 (b)
dwt is the deadweight at maximum summer draught of that Ship;
 

 (c)
Di is the distance travelled on the voyage; and
 

 (d)
such calculation is based on all voyages performed by that Ship over a Sustainability Period.
 
"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.
 
"Applicable Margin" means, at any time at which it falls to be determined, the Initial Margin as the same may be reduced by the Sustainability Pricing Adjustment in accordance with Clause 8.6 (Sustainability Pricing Adjustment).
 
"Approved Brokers" means any firm or firms of insurance brokers approved in writing by the Lender.
 
2
"Approved Classification" means:
 

 (a)
in relation to a Ship A, A1 Bulk carrier BC-A (Holds 2, 4, 6 & 8 may be empty), ESP, AMS, ACCU, CPS, CSR;
 

 (b)
in relation to Ship B, I HULL MACH Bulk carrier ESP -heavy cargo -nonhomload (holds 2, 4, 6, 8 may be empty) Unrestricted navigation AUT-UMS, MON-SHAFT, INWATERSURVEY; or
 

 (c)
in relation to Ship C, NS*(CSR,BC-XII, GRAB 20, PSPC-WBT, 1C)(ESP)(IWS)(PSCM) NMS*,
 
with the relevant Approved Classification Society or the equivalent classification with another Approved Classification Society.
 
"Approved Classification Society" means:
 

 (a)
in relation to Ship A, ABS;
 

 (b)
in relation to Ship B, Bureau Veritas; or
 

 (c)
in relation to Ship C, NKK,
 
or any other classification society being a member of the International Association of Classification Societies which is approved in writing by the Lender.
 
"Approved Commercial Manager" means:
 

 (a)
Seanergy Management Corp., a corporation incorporated in the Republic of the Marshall Islands with registration 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 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.
 
"Approved Crew Manager" means:
 

 (a)
V. Group Manpower Services of England & Wales whose registered address is at 63 Queen Victoria Street, London;
 

 (b)
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 HM 08, Bermuda;
 

 (c)
Global Seaways S.A. of the Republic of the Marshall Islands, with registered address at Ajeltake Road, Ajeltake Island, Majuro, MH 96960; or
 

 (d)
any other person approved in writing by the Lender as the crew manager of a Ship.
 
3
"Approved Flag" means the flag of the Republic of the Marshall Islands or such other flag and, if applicable, port of registry approved in writing by the Lender.
 
"Approved Manager" means the Approved Commercial Manager, the Approved Technical Manager or the Approved Crew Manager.
 
"Approved Technical 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 HM 08, 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)
Seanergy Shipmanagement Corp., a corporation incorporated in the Republic of the Marshall Islands with registration number 71736, whose registered address is at the Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, MH 96960, Marshall Islands; or
 

 (d)
any other person approved in writing by the Lender as the technical manager of a Ship.
 
"Approved Valuer" means any reputable firm or firms of independent sale and purchase shipbrokers approved in writing by the Lender in its discretion.
 
"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:
 

 (a)
each Existing Charter; or
 

 (b)
in relation to a Ship, and any other 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 and 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 the period from and including the date of this Agreement to and including 30 April 2025 or such later date as may be approved in writing by the Lender in its discretion.
 
"Bail-In Action" means the exercise of any Write-down and Conversion Powers.
 
"Bail-In Legislation" means:
 

 (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;
 
4

 (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 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 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.
 
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in London and Athens and, in respect of a day on which a payment is required to be made under a Finance Document, also in New York in relation to the fixing of an interest rate, which is a US Government Securities Business Day and in respect of a day on which a payment is required to be made under the MOA, also in Japan.
 
"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) each Existing Charter and 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 the assignment creating Security over the rights of the relevant Borrower under any Assignable Charter and any Charter Guarantee relative thereto in agreed form.
 
"CME 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).
 
"Code" means the US Internal Revenue Code of 1986.
 
"Commitment" means the amount of $53,560,000 to the extent not cancelled or reduced under this Agreement.
 
5
"Compliance Certificate" means a certificate in the form set out in Schedule 5 (Form of Compliance Certificate) or in any other form agreed between the Guarantor 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 Transaction Obligor, 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 information that:
 

 (a)
is or becomes public information other than as a direct or indirect result of any breach by the Lender of Clause 43 (Confidential Information); or
 

 (b)
is identified in writing at the time of delivery as non-confidential by any Transaction Obligor, any member of the Group or any of its advisers; or
 

 (c)
is known by the Lender before the date the information is disclosed to it by any Transaction Obligor, 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 any Transaction Obligor or 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
 
"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.
 
"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.
 
"Delivery Date" means the date on which Ship C is delivered by the Seller to, and accepted by, Borrower C under the MOA.
 
"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 to which it is a party; or
 
6

 (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.
 
"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.
 
"EEA Member Country" means any member state of the European Union, Iceland, Liechtenstein and Norway.
 
"Environmental Approval" means any present or future permit, ruling, variance or other Authorisation required under Environmental Law.
 
7
"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 any 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.
 
"EU Bail-In Legislation Schedule" means the document described as such and published by the LMA from time to time.
 
"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 29 (Events of Default).
 
8
"Existing Charter" means:
 

 (a)
in relation to Ship A, the time charter dated 21 December 2023 made between Borrower A and the Existing Charterer for a period of minimum 21 (twenty-one) to about 24 (twenty-four) months; and
 

 (b)
in relation to Ship B, the time charter dated 23 June 2022 made between Borrower B and the Existing Charterer for a period of minimum 20 (twenty) to about 24 (twenty-four) months,
 
in each case, as from time to time amended, varied, extended, novated or supplemented in accordance with the terms of the Finance Documents
 
"Existing Charterer" means Nippon Yusen Kabushiki Kaisha, a company incorporated under the laws of Japan and having its registered office at 3-2 Marunouchi 2-Chome, Chiyoda-Ku, Tokyo, 100-0005, Japan.
 
"Existing Facility Agreement" means the facility agreement dated 22 June 2022 (as amended and supplemented by a side letter dated 24 June 2022, a first supplemental agreement dated 3 July 2023, an overriding agreement dated 3 July 2023 and a second supplemental agreement dated 29 November 2024) and entered into between Borrower A and Borrower B as joint and several borrowers and hedge guarantors and the Original Lender as lender, to refinance the then existing indebtedness secured on Ship A and finance part of the acquisition cost of Ship B.
 
"Existing Indebtedness" means, at any date, the outstanding Financial Indebtedness of Borrower A and Borrower B on that date under the Existing Facility Agreement.
 
"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.
 
9
"Fleet Vessels" means the vessels from time to time owned by the members of the Group and "Fleet Vessel" means any of them.
 
"Finance Document" means:
 

 (a)
this Agreement;
 

 (b)
any Hedging Agreement;
 

 (c)
the Utilisation Request;
 

 (d)
any Security Document;
 

 (e)
any Subordination Deed;
 

 (f)
any other document which is executed for the purpose of establishing any priority or subordination arrangement in relation to the Secured Liabilities; or
 

 (g)
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.
 
10
"Funding Rate" means any individual rate notified by the Lender to an Obligor pursuant to any Finance Document.
 
"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 Guarantor and its Subsidiaries (including, for the avoidance of doubt, the Borrowers) at any given time (which are consolidated for the purposes of its Financial Statements) and "member of the Group" shall be construed accordingly.
 
"Hedge Receipts" means all moneys whatsoever which are now, or later become, payable (actually or contingently) to a Borrower under a Hedging Agreement.
 
"Hedging Agreement" means any master agreement, confirmation, transaction, schedule or other agreement in agreed form entered into or to be entered into by the Borrowers and the Lender in accordance with Clause 8.5 (Hedging) for the purpose of hedging interest payable under this Agreement.
 
"Hedging Agreement Security" means, in relation to a Borrower, a hedging agreement security creating Security over that Borrower's rights and interests in any Hedging Agreement, in agreed form.
 
"Hedging Close-Out Liabilities" means, as at any relevant date, the amount certified by the Lender as the net aggregate amount in dollars which would be payable by a Borrower under any Hedging Agreement to which that Borrower is a party at the relevant determination date as a result of termination of closing out under such Hedging Agreements.
 
"Hedging Prepayment Proceeds" means any Hedge Receipts arising as a result of termination or closing out under a Hedging Agreement.
 
"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 in accordance with the valuation referred to in paragraph 6.1 of Part A of Schedule 2 (Conditions Precedent).
 
11
"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 the date of this Agreement; 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 before the date of this Agreement.
 
"Initial Margin" means 2.05 per cent. per annum.
 
"Interest Payment Date" has the meaning given to it in paragraph (a) of 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 9.1 (Selection of Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 (Default interest).
 
"Interpolated CME 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 CME Term SOFR) which results from interpolating on a linear basis between:
 

 (a)
either:
 

 (i)
the applicable CME Term SOFR (as of the Quotation Day) for the longest period (for which CME 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 CME 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 the day which is two US Government Securities Business Days before the Quotation Day; and
 

 (b)
the applicable CME Term SOFR (as of the Quotation Day) for the shortest period (for which CME Term SOFR is available) which exceeds the Interest Period of the Loan or that part of the Loan.
 
"ISDA Master Agreement" means the 2002 Master Agreement as published by the International Swaps and Derivatives Association, Inc.
 
"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.
 
12
"Inventory of Hazardous Materials" means 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, any Ship, pursuant to the requirements of the EU Ship Recycling Regulation.
 
"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 30 (Changes to the Lender),
 
which in each case has not ceased to be a Party in accordance with this Agreement.
 
"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 a Tranche, a part of a Tranche or any other part of the Loan as the context may require.
 
"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 $750,000 or the equivalent in any other currency.
 
"Management Agreement" means, in relation to a Ship, any agreement entered into between the Borrower as the owner of that Ship and an Approved Manager regarding the commercial and/or (as applicable) the technical management and/or (as applicable) the crew management of that Ship.
 
"Manager's Undertaking" means, in relation to a Ship, the letter of undertaking from each of its Approved Managers, subordinating the rights of that Approved 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 rights, title and interest in the Insurances of that Ship in agreed form.
 
"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 14 days previously (and in respect of an Initial Market Value, 30 days previously);
 

 (b)
by an Approved Valuer (appointed by, and reporting to, the Lender);
 

 (c)
with or without physical inspection of that Ship or such other vessel (as the Lender may require); and
 

 (d)
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, free of any Charter.
 
13
"Material Adverse Effect" means in the opinion of the Lender a material adverse effect on:
 

 (a)
the business, operations, property, condition (financial or otherwise) or prospects of any Transaction Obligor, any member of the Group or the Group as a whole; 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.
 
"MOA" means the memorandum of agreement dated 12 December 2024 and made between (originally) (i) the Guarantor as buyer for a company to be nominated and (ii) the Seller, as amended by an addendum no.1 dated 11 February 2025 pursuant to which the Guarantor nominated Borrower C as buyer, and addendum no. 2 dated      23   February 2025, and as from time to time further amended or supplemented in accordance with the terms of this Agreement, for the purchase of Ship C.
 
"Month" means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:
 

 (a)
(subject to paragraph (c) 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;
 

 (b)
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
 

 (c)
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.
 
The above rules will only apply to the last Month of any period.
 
"Mortgage" means, in relation to a Ship, the first priority or, as the case may be, preferred Approved Flag ship mortgage on that Ship (together with, if applicable, the deed of covenants collateral thereto) in agreed form.
 
"Obligor" means a Borrower, the Guarantor or a Hedge Guarantor.
 
"Operating Account" means, in relation to a Borrower:
 

 (a)
an account in the name of that Borrower with the Account Bank designated "[Name of Borrower] - Operating 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.
 
14
"Original Financial Statements" means the audited financial statements of the Guarantor for its financial year ended 31 December 2023.
 
"Original Jurisdiction" means, in relation to a Transaction Obligor, the jurisdiction under whose laws that Transaction Obligor is incorporated as at the date of this Agreement.
 
"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.
 
"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 plus a redelivery allowance of not more than 30 days;
 

 (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 (including, for the avoidance of doubt, each Existing Charter) which is approved in writing by the Lender.
 
"Permitted Financial Indebtedness" means:
 

 (a)
any Financial Indebtedness incurred under the Finance Documents;
 

 (b)
in relation to Borrower A and Borrower B, until the Delivery Date, the Existing Indebtedness;
 

 (c)
any Financial Indebtedness incurred in a Borrower's or each Approved Manager's course of ordinary business; and
 

 (d)
any Financial Indebtedness that is subordinated to all Financial Indebtedness incurred under the Finance Documents pursuant to a Subordination Deed or otherwise and which is, in the case of any such Financial Indebtedness of a Borrower, the subject of Subordinated Debt Security.
 
"Permitted Security" means:
 

 (a)
Security created by the Finance Documents;
 

 (b)
in relation to Borrower A, Borrower B, Ship A and Ship B, until the Delivery Date, the Existing Security;
 

 (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;
 
15

 (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 26.16 (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).
 
"Pledged Deposit" means the amount maintained in the Pledged Deposit Account pursuant to Clause 23.23 (Pledged deposit).
 
"Pledged Deposit Account" means:
 

 (a)
an account in the name of Borrower A with the Account Bank designated "World Shipping Co. - Pledged Deposit Account";
 

 (b)
any other account in the name of either the Borrowers or the Corporate Guarantor 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.
 
"Potential Event of Default" means any event or circumstance specified in Clause 29 (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.
 
"Prohibited Person" means any person who is the subject of Sanctions (whether designated by name or by reason of being included in a class of persons to whom the applicable Sanctions apply in accordance with their terms) provided that, in the case of a person:
 

 (a)
who is not themselves a Transaction Obligor, a Subsidiary of a Transaction Obligor, one of their respective directors, officers or employees or an agent of any of them; and
 

 (b)
who is targeted only by "sectoral sanctions," or other Sanctions that do not generally prohibit transactions with such person,
 
such person shall be a Prohibited Person with respect to a transaction only to the extent that:
 
16

 (i)
a Transaction Obligor, the Lender or any other person organised or resident in the US, UK or EU would be prohibited by the law of such jurisdiction from entering into, directly or indirectly, such transaction with such person; or
 

 (ii)
the transaction involving such person would require a specific Authorisation by an applicable Sanctions authority (unless such specific Authorisation has been granted).
 
"Purchase Price" means, in relation to Ship C, the total price of US$37,000,000 payable for it under clause 1 of the MOA.
 
"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 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).
 
"Receiver" means a receiver or receiver and manager or administrative receiver of the whole or any part of the Security Assets.
 
"Reference Rate" means, in relation to the Loan or any part of the Loan:
 

 (a)
the applicable CME 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 10.1 (Unavailability of CME Term SOFR),
 
and if, in either case, that rate is less than zero, the Reference Rate shall be deemed to be zero.
 
"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 for overnight cash borrowing collateralised by US Government Securities.
 
"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).
 
17
"Repeating Representation" means each of the representations set out in Clause 20 (Representations) except Clause 20.10 (Insolvency), Clause 20.11 (No filing or stamp taxes) and Clause 20.12 (Deduction of Tax), 20.13(c) (No Default) 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.
 
"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.
 
"Safekeeping Securities Account" means the account opened or to be opened by the Lender with the Shipping Branch located at 137-139 Filonos Street, Piraeus, Greece Lending Office for the safekeeping of the shares held by the Lender in the issued shares of each Borrower and which shall be pledged in favour of the Lender pursuant to each Shares Security.
 
"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.
 
"Sanctioned Country" means a country or territory whose government is the target of Sanctions or that is subject to comprehensive country-wide or territory-wide Sanctions (including, without limitation, as regards United States Sanctions, Crimea, Donetsk oblast, Luhansk oblast, Zaporizjzja oblast, Kherson oblast, Cuba, Syria, Iran, North Korea and Venezuela).
 
"Sanctioned Ship" means a ship which is the subject of Sanctions.
 
"Sanctions" means any sanctions (including US "secondary 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 or the United States of America; or
 
18

 (b)
otherwise imposed by any law or regulation binding on a Transaction Obligor or a Third Party Manager or a member of the Group or to which a Transaction Obligor or a Third Party Manager or a member of the Group is subject.
 
"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.
 
"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.
 
"Security Assets" means all of the assets of the Transaction Obligors and any Third Party Manager which from time to time are, or are expressed to be, the subject of the Transaction Security.
 
"Security Cover Ratio" means the ratio of the aggregate Market Value of the Ships plus the Pledged Deposit and the net realisable value of any additional Security previously provided under Clause 27 (Security Cover) expressed as a percentage of the aggregate of (a) the Loan and (b) the Hedging Close-Out Liabilities.
 
"Security Document" means:
 

 (a)
any Shares Security;
 

 (b)
any Account Security;
 

 (c)
any Hedging Agreement Security;
 

 (d)
any Mortgage;
 

 (e)
any General Assignment;
 

 (f)
any Charterparty Assignment;
 

 (g)
any Manager's Undertaking;
 

 (h)
any Subordinated Debt Security;
 

 (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.
 
19
"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.
 
"Selection Notice" means a notice substantially in the form set out in Part B of Schedule 3 (Requests) given in accordance with Clause 9.1 (Selection of Interest Periods).
 
"Seller" means Catalina Shipping S.A., a company incorporated in the Republic of Panama with registered address at 53rd E Street, Urbanizacion Marbella, MMG Tower, 16th Floor, Panama, Republic of Panama.
 
"Shares Security" means, in relation to a Borrower, a document creating Security over (inter alia) the shares in that Borrower held in the Safekeeping Securities Account, in agreed form.
 
"Ship" means Ship A, Ship B or Ship C.
 
"Ship A" means the 2012-built bulker vessel "WORLDSHIP" having a gross tonnage of 93,074 tones and a net tonnage of 60,504 tones with IMO no. 9624457 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 2010-built bulker vessel "HONORSHIP" having a gross tonnage of 90,423 tonnes and a net tonnage of 59,281 tonnes with IMO no. 9489845 registered in the name of Borrower B 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 C" means the 2013-built bulker vessel "BERGE KITA" having a gross tonnage of 107,229 tonnes and a net tonnage of 69,478 tonnes with IMO no. 9667411 which is to be purchased by Borrower C under the MOA and on and from delivery is to be renamed "MEISHIP" and registered in the name of Borrower C under an Approved Flag and everything now or in the future belonging to her on board and ashore.
 
"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).
 
"Specified Time" means a day or time determined in accordance with Schedule 4 (Timetables).
 
20
"Subordinated Creditor" means:
 

 (a)
any Transaction Obligor; or
 

 (b)
any other person subject to the consent of the Lender who becomes a Subordinated Creditor in accordance with this Agreement.
 
"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 a Borrower to a Subordinated Creditor whether under the Subordinated Finance Documents or otherwise.
 
"Subordinated Loan Agreement" means any loan agreement made between (i) a Borrower and (ii) a Subordinated Creditor.
 
"Subordination Deed" means a subordination deed entered into or to be entered into by, inter alia, a Subordinated Creditor, a Borrower and the Lender, in agreed form.
 
"Subsidiary" means a subsidiary within the meaning of section 1159 of the Companies Act 2006.
 
"Sustainability Pricing Adjustment" has the meaning given to it in Clause 8.6 (Sustainability Pricing Adjustment).
 
"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).
 
"Termination Date" means the date falling five years after the Utilisation Date.
 
"Third Parties Act" has the meaning given to it in Clause 1.5 (Third party rights).
 
"Third Party Manager" means an Approved Manager if such Approved Manager is not a member of the Group.
 
"Total Loss" means, in relation to a Ship:
 

 (a)
actual, constructive, compromised, agreed or arranged total loss of that Ship; or
 
21

 (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;
 

 (c)
in the case of a Requisition, the date on which that Requisition occurs; and
 

 (d)
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 or Tranche B.
 
"Tranche A" means that part of the Loan made or to be made available to the Borrowers to refinance the Existing Indebtedness in a principal amount not exceeding that specified in sub-paragraph (i) of paragraph (b) of Clause 5.3 (Currency and amount).
 
"Tranche B" means that part of the Loan made or to be made available to the Borrowers to assist Borrower C to part finance the acquisition of Ship C in a principal amount not exceeding that specified in sub-paragraph (ii) of paragraph (b) of Clause 5.3 (Currency and amount).
 
"Transaction Document" means:
 

 (a)
a Finance Document;
 

 (b)
a Subordinated Finance Document;
 

 (c)
any Management Agreement;
 

 (d)
any Charter;
 

 (e)
the MOA;
 

 (f)
any related Charter Guarantee; or
 

 (g)
any other document designated as such by the Lender and the Borrowers.
 
"Transaction Obligor" means an Obligor, each Approved Manager (other than any Third Party Manager) 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.
 
22
"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 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 Finance Documents are from sources within the US for US federal income tax purposes.
 
"Utilisation" means the utilisation of the Facility.
 
"Utilisation Date" means the date on which the Loan is to be made.
 
"Utilisation Request" means a notice substantially in the form set out in Part A of Schedule 3 (Requests).
 
"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:
 

 (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:
 
23

 (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", any "Borrower", 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)
"assets" includes present and future properties, revenues and rights of every description;
 

 (iii)
a liability which is "contingent" means a liability which is not certain to arise and/or the amount of which remains unascertained;
 

 (iv)
"document" includes a deed and also a letter, fax, email or telex;
 

 (v)
"expense" means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable Tax including VAT;
 

 (vi)
the Lender's "cost of funds" in relation to 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 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;
 

 (vii)
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;
 
24

 (viii)
"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;
 

 (ix)
"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;
 

 (x)
"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;
 

 (xi)
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);
 

 (xii)
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;
 

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

 (xiv)
a time of day is a reference to Athens time;
 

 (xv)
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;
 

 (xvi)
words denoting the singular number shall include the plural and vice versa;
 

 (xvii)
"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; and
 

 (xviii)
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.
 
(b)
The determination of the extent to which a rate is "for a period equal in length" to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.
 
(c)
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.
 
(d)
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.
 
(e)
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.

25
1.3
Construction of insurance terms
 
In this Agreement:
 
"approved" means, for the purposes of Clause 24 (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.
 
"obligatory insurances" means all insurances effected, or which any Borrower is obliged to effect, under Clause 24  (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)
Subject to paragraph (c) below but otherwise 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.

26

(c)
Any Affiliate or 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.

27
SECTION 2

THE FACILITY

2
THE FACILITY
 
Subject to the terms of this Agreement, the Lender makes available to the Borrowers a dollar term loan facility comprised of two Tranches in a single advance in an aggregate amount not exceeding the Commitment.
 
3
 PURPOSE
 
3.1
Purpose
 
Each Borrower shall apply all amounts borrowed by it under the Facility only for the purposes 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.
 
4
CONDITIONS OF UTILISATION
 
4.1
Initial conditions precedent
 
The Borrowers may not deliver the 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 (Loan) if:
 
(a)
on the date of the Utilisation Request and on the proposed Utilisation Date and before the Loan is made available:
 

 (i)
no Default has occurred and is continuing or would result from the proposed Loan;
 

 (ii)
the Repeating Representations to be made by each Transaction Obligor are true;
 

 (iii)
no event described in paragraph (a) of Clause 7.5 (Change of control) has occurred;
 

 (iv)
no Ship has been sold nor become a Total Loss;
 

 (v)
no event or series of events has occurred which is likely to have a Material Adverse Effect; and
 

 (vi)
no event has occurred which would give rise to the provisions of Clause 10.3 (Cost of funds); and
 
(b)
the Lender has received on or before the Utilisation Date, or is satisfied it will receive when the Loan 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.
 
28
4.3
Conditions precedent to release of the Loan or part thereof to the Seller
 
The Lender shall only be obliged to comply with Clauses 5.4 (Loan) and 5.9 (Release of prepositioned funds) and release the Loan or part thereof to the Seller as designated by the Borrowers in the Utilisation Request on the Delivery Date if:
 
(a)
on the Delivery Date and before the Loan or part thereof is released:
 

 (i)
no Default has occurred and is continuing or would result from the proposed Loan;
 

 (ii)
the Repeating Representations to be made by each Transaction Obligor are true;
 

 (iii)
no Ship has been sold or become a Total Loss;
 

 (iv)
no event or series of events has occurred which is likely to have a Material Adverse Effect;
 

 (v)
no event has occurred which would give rise to the provisions of Clause 10.3 (Cost of funds); and
 
(b)
on or before the Delivery Date, the Lender has received or is satisfied that it will receive when the Loan or part thereof is released, all of the documents and other evidence listed in Part C of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Lender.
 
4.4
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), Clause 4.2 (Further Conditions precedent) and, as the case may be, Clause 4.3 (Conditions precedent to release of the Loan or part thereof to the Seller).
 
4.5
Waiver of conditions precedent
 
If the Lender, at its discretion, permits any part of the Loan 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) or Clause 4.3 (Conditions precedent to release of the Loan or part thereof to the Seller) has been satisfied, the Borrowers shall ensure that that condition is satisfied within five Business Days after the Utilisation Date or such later date as the Lender may agree in writing with the Borrowers.
 
29
SECTION 3
 
UTILISATION
 
5
UTILISATION
 
5.1
Delivery of the Utilisation Request
 
The Borrowers may make one Utilisation only under the Facility by delivery to the Lender of a duly completed Utilisation Request not later than the Specified Time.
 
5.2
Completion of the Utilisation Request
 
(a)
The 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 Availability Period;
 

 (ii)
the currency and amount of the Loan, and each Tranche, 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 9.1 (Selection of Interest Periods).
 
(b)
Only one Utilisation may be requested in the Utilisation Request.
 
(c)
Both Tranches shall be requested and utilised simultaneously.
 
5.3
Currency and amount
 
(a)
The currency specified in the Utilisation Request must be dollars.
 
(b)
The amount of the proposed Loan must be an aggregate amount which:
 

 (i)
in relation to Tranche A, is equal to the lesser of (a) US$24,000,000 and (b) the Existing Indebtedness as at the Utilisation Date; and
 

 (ii)
in relation to Tranche B, is equal to the lesser of (a) US$29,560,000, (b) 80 per cent. of the Purchase Price of Ship C, (c) 76 per cent. of the Initial Market Value of Ship C, (d) such amount which when added to Tranche A results in a Loan amount which does not exceed 52 per cent. of the aggregate Initial Market Value of the Ships and (e) such amount which when added to Tranche A results in a Loan amount which does not exceed 53.1 per cent. of the aggregate of the Initial Market Value of Ship A and Ship B plus the Purchase Price of Ship C.
 
5.4
Loan
 
If the conditions set out in this Agreement have been met, the Lender shall make the Loan or part thereof available by the Utilisation Date through its Facility Office.
 
30
5.5
Cancellation of Commitment
 
On the earlier of the date on which the Loan has been made and the end of the Availability Period any Commitment which is then unutilised shall be cancelled.
 
5.6
Retentions and Payments to Borrowers
 
The Borrower irrevocably authorises the Lender:
 
(a)
to deduct from the proceeds of the Loan any fees then payable to the Lender in accordance with Clause 11 (Fees) and any other items listed as deductible items in the Utilisation Request and to apply them in payment of the items to which they relate; and
 
(b)
on the Utilisation Date, to pay to, or for the account of, the Borrowers the balance (after any deduction made in accordance with paragraph (a) above) of the Loan. That payment shall be made:
 

 (i)
in relation to Tranche A, by making payment of such amount which the Borrowers specify in the Utilisation Request to the Operating Account of Borrower A into which such amount shall remain pledged and restricted and shall not be withdrawn until the Lender has received all of the documents and other evidence listed in Part B of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Lender, whereupon the part of the Loan under Tranche A shall be onwards transmitted to an account of the Lender and be applied against repayment in full to the Lender of the Existing Indebtedness; and
 

 (ii)
in relation to Tranche B, the payment shall be made to the account which the Borrowers specify in the Utilisation Request,
 
in each case subject to the provisions of Clause 4.2 (Further conditions precedent), Clause 4.3 (Conditions precedent to release of the Loan or part thereof to the Seller) and Clause 4.4 (Notification of satisfaction of conditions precedent).
 
5.7
Disbursement of Loan to third party
 
Payment by the Lender under Clause 5.6 (Retentions and Payments to Borrowers) to a person other than a Borrower shall constitute the making of the Loan and the Borrowers shall at that time become indebted, as principal and direct obligors, to the Lender in an amount equal to that part of the Loan.
 
5.8
Prepositioning of funds
 
If, in respect of Tranche B, the Lender, at the request of the Borrowers and on terms acceptable to the Lender and in its absolute discretion, prepositions funds with the Seller's bank or the bank of a law firm, approved in writing by the Lender to act as escrow agent (the "Prepositioning Agent"):
 
(a)
each Borrower and the Guarantor:
 

 (i)
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 the Loan after the Utilisation Date or, if such Utilisation Date does not occur, within three Business Days of demand by the Lender; and
 
31

 (ii)
shall, without duplication, indemnify the Lender against any costs, loss or liability it may incur in connection with such arrangement; and
 
(b)
such funds shall be held to the order of the Lender until such time as the Lender confirms in writing to the Seller's bank or the Prepositioning Agent or the holder of any other account as specified in the Utilisation Request that the Loan or any part thereof may be released to the Seller or other party respectively in accordance with Clause 5.9 (Release of prepositioned funds).
 
5.9
Release of prepositioned funds
 
The Lender shall, on the Delivery Date, instruct the Seller's bank or the Prepositioning Agent to release the Loan or part thereof to the Seller or to such other account subject to the provisions of Clause 4.3 (Conditions precedent to release of the Loan to the Seller) and Clause 4.4 (Notification of satisfaction of conditions precedent).
 
32
SECTION 4
 
REPAYMENT, PREPAYMENT AND CANCELLATION
 
6
REPAYMENT
 
6.1
Repayment of Loan
 
The Borrowers shall repay the Loan by 20 equal consecutive quarterly principal instalments, each in an amount of $1,450,000, the first of which shall be repaid on the date falling 3 Months after the Utilisation Date, each subsequent instalment at three monthly intervals thereafter and the last, payable together with a balloon instalment in an amount of $24,560,000 (the "Balloon Instalment"), shall be repaid on the Termination Date, and each such instalment (including the Balloon Instalment) shall be a "Repayment Instalment".
 
6.2
Reduction of Repayment Instalments
 
If any part of the Facility is cancelled, the Repayment Instalments falling after that cancellation shall be reduced pro rata by the amount cancelled.
 
6.3
Termination Date
 
On the 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 and Sanctions affecting the Lender
 
If it becomes unlawful or contrary to Sanctions 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 if it becomes unlawful for the Lender to determine or charge interest rates based upon CME Term SOFR 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 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.

33
7.2
Automatic cancellation
 
The unutilised Commitment (if any) shall be automatically cancelled at close of business on the Utilisation Date.
 
7.3
Voluntary prepayment of Loan
 
(a)
The Borrowers may, if they give the Lender not less than 15 days (or such shorter period as the Lender may agree to) prior written 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 $100,000 or an integral multiple of that amount (or such other amount as the Lender may agree to)).
 
(b)
Any partial prepayment under this Clause 7.3 (Voluntary prepayment of Loan) shall be applied in inverse order of maturity or pro rata (at the Borrowers' discretion) against the Balloon Instalment and the remaining Repayment Instalments falling due after the day of such repayment.
 
7.4
Mandatory prepayment on sale or Total Loss
 
(a)
If a Ship is sold (without prejudice to paragraph (a) of Clause 23.12 (Disposals)) or becomes a Total Loss, the Borrowers shall on the Relevant Date prepay the Loan in an amount which is the higher of:
 

 (i)
the Relevant Amount; and
 

 (ii)
such part of the Loan to ensure that the Loan does not exceed 72.5 per cent of the aggregate Market Value of the remaining Ships then subject to a Mortgage determined in accordance with valuations for such remaining Ships, on charter-free basis, at the Borrowers' cost, addressed to the Lender, from an Approved Valuer and on dates to be selected by the Lender, to enable the Lender to determine the Market Value of such remaining Ships for the purposes of this paragraph (a) of Clause 7.4 (Mandatory prepayment on sale or Total Loss),
 
Provided that if the Ship being sold or which has become a Total Loss is the only remaining Ship, the Relevant Amount shall be equal to the full amount of the Loan and the full amount of all other Secured Liabilities.
 
(b)
In this Clause 7.4 (Mandatory prepayment on sale or Total Loss):
 
"Relevant Amount" means an amount equal to the Loan multiplied by a fraction whose:
 

 (a)
numerator is the Market Value of the Ship being sold or which has become a Total Loss determined on the date on which such sale is completed by delivery to its buyer or, as the case may be, the date immediately prior to the date on which the Total Loss occurred; and
 

 (b)
denominator is the aggregate Market Value of all Ships on the date on which that Ship is sold or becomes a Total Loss.
 
"Relevant Date" means:
 

 (c)
in the case of a sale of a Ship, on or before the date on which the sale is completed by delivery of that Ship to the buyer; or
 
34

 (d)
in the case of a Total Loss, on the earlier of (i) the date falling 120 days after the Total Loss Date and (ii) the date of receipt by the Lender of the proceeds of insurance relating to such Total Loss.
 
7.5
Change of control
 
(a)
If any person or group of persons acting in concert gains directly or indirectly control of the Guarantor:
 

 (i)
the Guarantor shall promptly notify the Lender upon becoming aware of that event; and
 

 (ii)
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 immediately due and payable.
 
(b)
For the purpose of paragraph (a) 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, more than 50 per cent. of the maximum number of votes that might be cast at a general meeting of the Guarantor; or
 

 (B)
appoint or remove all, or the majority, of the directors or other equivalent officers of the Guarantor; or
 

 (C)
give directions with respect to the operating and financial policies of the Guarantor with which the directors or other equivalent officers of the Guarantor are obliged to comply; and/or
 

 (ii)
the holding beneficially of more than 50 per cent. of the issued shares of the Guarantor (excluding any part of that issued shares that carries no right to participate beyond a specified amount in a distribution of either profits or capital) (and, for this purpose, any Security over the issued shares shall be disregarded in determining the beneficial ownership of such issued shares).
 
(c)
For the purpose of paragraph (a) above "acting in concert" means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition directly or indirectly of shares in the Guarantor by any of them, either directly or indirectly, to obtain or consolidate control of the Guarantor.
 
7.6
Mandatory prepayment of Hedging Prepayment Proceeds
 
(a)
If at the relevant time an Event of Default has occurred and is continuing or the Security Cover Ratio required pursuant to Clause 28.1 (Minimum required security cover) is not maintained, any Hedging Prepayment Proceeds arising as a result of any cancellation or prepayment under this Agreement shall be applied on the last day of the Interest Period which ends on or after such payment in prepayment of the Loan and shall reduce the Repayment Instalments falling after that prepayment and the Balloon Instalment by the amount prepaid pro rata.
 
35
(b)
If, at any time, the aggregate notional amount of the transactions in respect of the Hedging Agreements exceeds or, as a result of any repayment or prepayment under this Agreement, will the Loan at that time, the Borrowers must, at the request of the Lender, reduce the aggregate notional amount of those transactions by an amount and in a manner satisfactory to the Lender so that it no longer exceeds or will not exceed the Loan then or that will be outstanding.
 
(c)
Any Hedging Prepayment Proceeds pursuant to paragraph (b) above, following the occurrence of an Event of Default which is continuing, shall be paid to the Lender on the last day of the Interest Period which ends on or after such payment in prepayment of the Loan and shall reduce the Repayment Instalments falling after that prepayment and the Balloon Instalment by the amount prepaid pro rata.
 
7.7
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, the amount of that cancellation or prepayment and the order of application.
 
(b)
Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to the payment of the fee provided for in Clause 11.2 (Prepayment fee) and 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.
 
36
SECTION 5
 
COSTS OF UTILISATION
 
8
INTEREST
 
8.1
Calculation of interest
 
The rate of interest on the Loan or any part of the Loan for each Interest Period is the percentage rate per annum which is the aggregate of:
 
(a)
the Applicable Margin; and
 
(b)
the Reference Rate.
 
8.2
Payment of interest
 
(a)
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").
 
(b)
If an Interest Period is longer than three Months, the Borrowers shall also pay interest then accrued on the Loan or the relevant part of the Loan on the dates falling at three Monthly intervals after the first day of the Interest Period.
 
8.3
Default interest
 
(a)
If a Transaction Obligor fails to pay any amount payable by it under a Finance Document (other than a Hedging Agreement) 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, subject to paragraph (b) below, is 2.00 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 an Obligor on demand by the Lender.
 
(b)
If an Unpaid Sum consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan or that part of the Loan:
 

 (i)
the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan or that part of the Loan; and
 

 (ii)
the rate of interest applying to that Unpaid Sum during that first Interest Period shall be 2.00 per cent. per annum higher than the rate which would have applied if that Unpaid Sum had not become due.
 
(c)
Default interest (if unpaid) arising on an Unpaid Sum may be compounded with the Unpaid Sum on a six month basis commencing on the date that such Unpaid Sum becomes due and payable but such default interest will remain immediately due and payable.
 
37
8.4
Notification of rates of interest
 
The Lender shall promptly notify the Borrowers of the determination of a rate of interest under this Agreement.
 
8.5
Hedging
 
(a)
A Borrower and the Lender may enter into a Hedging Agreement on the date of this Agreement or at any time thereafter and shall after that date maintain such Hedging Agreement in accordance with this Clause 8.5 (Hedging).
 
(b)
The aggregate notional amount of the transactions in respect of the Hedging Agreements shall not exceed the aggregate amount of the Loan.
 
(c)
Each Hedging Agreement shall:
 

 (i)
be with the Lender or (subject to the Lender's right of first refusal and with the Lender's prior consent), with another bank or financial institution;
 

 (ii)
be for a term ending on no later than the Termination Date;
 

 (iii)
have settlement dates coinciding with the last day of each Interest Period;
 

 (iv)
be based on an ISDA Master Agreement and otherwise be in agreed form;
 

 (v)
provide for two-way payments in the event of a termination of a transaction in respect of that Hedging Agreement, whether on a Termination Event (as defined each the Hedging Agreement) or on an Event of Default (as defined in each Hedging Agreement); and
 

 (vi)
provide that the Termination Currency (as defined in that Hedging Agreement) shall be dollars.
 
(d)
The rights of a Borrower under any Hedging Agreement shall be charged by way of security under a Hedging Agreement Security.
 
(e)
If, at any time, the aggregate notional amount of the transactions in respect of the Hedging Agreements exceeds or, as a result of any repayment or prepayment under this Agreement, will the Loan at that time, the Borrowers must, at the request of the Lender, reduce the aggregate notional amount of those transactions by an amount and in a manner satisfactory to the Lender so that it no longer exceeds or will not exceed the Loan then or that will be outstanding.
 
(f)
Any reductions in the aggregate notional amount of the transactions in respect of the Hedging Agreements in accordance with paragraph (e) above will be apportioned as between those transactions pro rata.
 
(g)
Paragraph (e) above shall not apply to any transactions in respect of any Hedging Agreement under which no Borrower has any actual or contingent indebtedness.
 
38
8.6
 Sustainability Pricing Adjustment
 
(a)
Subject to paragraph (e) below, the Borrowers or the Guarantor shall provide the Lender with a Sustainability Certificate within 90 (ninety) days of the end of each Sustainability Period.
 
(b)
If the AER (rounded to two decimal places) for a Ship in respect of that Sustainability Period is lower than the Base AER by at least the Applicable Percentage, the Applicable Margin shall be reduced (or shall remain reduced, if it has already been reduced during the previous Pricing Adjustment Period) by 0.05 per cent. per annum per compliant Ship (the "Sustainability Pricing Adjustment"). Such reduction shall apply on the first day of the new Pricing Adjustment Period and shall remain reduced for the whole such Pricing Adjustment Period.
 
(c)
The Sustainability Pricing Adjustment shall at no time exceed 0.15 per cent. per annum during the term of the Facility and shall not be reduced further during a later Pricing Adjustment Period.
 
(d)
If (i) the AER (rounded to two decimal places) in a given Sustainability Period for a Ship is not lower than the Base AER for that Ship by at least the Applicable Percentage or (ii) the Borrowers or the Guarantor fail to furnish a Sustainability Certificate in respect of one or all three Ships, the Sustainability Pricing Adjustment shall reset to 0.00 per cent. in respect of the non-compliant Ship and the Initial Margin shall be charged from the first day after the expiry of the then current Pricing Adjustment Period (and, in the event that one of the three Ships is compliant, the Initial Margin shall remain reduced by 0.05 per cent. after the expiry of the current Pricing Adjustment Period).
 
(e)
Either the Borrowers or the Guarantor may elect not to provide a Sustainability Certificate and such election will not constitute a Default or an Event of Default.
 
(f)
If an Event of Default occurs and is continuing, the Sustainability Pricing Adjustment shall reset to 0.00 per cent. and the Initial Margin shall be charged.
 
(g)
In this Clause 8.6 (Sustainability Pricing Adjustment):
 

 (i)
"Applicable Percentage" means, in respect of the Sustainability Period ending on:
 

 (A)
31 December 2026, 2 per cent.;
 

 (B)
31 December 2027, 4 per cent.;
 

 (C)
31 December 2028, 6 per cent.; and
 

 (D)
31 December 2029, 8 per cent.
 

 (ii)
"Base AER" means the AER in respect of the first Sustainability Period (ending on 31 December 2025).
 

 (iii)
"Pricing Adjustment Period" means the 12-month period commencing on the first day of the Interest Period after a Sustainability Certificate (other than Sustainability Certificate in respect of the Base AER) has been delivered to the Lender in accordance with paragraph (a) above and ending on the first anniversary thereof Provided that the last such period may be shorter than 12 months if it ends on the Termination Date.
 
39

 (iv)
"Sustainability Certificate" means a certificate signed by an officer of each Borrower or the Chief Executive Officer or Chief Financial Officer of the Guarantor, in a form and substance satisfactory to the Lender which shows the calculation of each Ship's AER and sets forth the Sustainability Pricing Adjustment, certified by the approved classification society in respect of that Ship.
 

 (v)
"Sustainability Period" means the period commencing on the date of acquisition of Ship C by Borrower C and ending on 31 December 2025 and each subsequent 12-month period thereafter.
 
9
INTEREST PERIODS
 
9.1
Selection of Interest Periods
 
(a)
The Borrowers may select the first Interest Period for the Loan in the Utilisation Request. Subject to paragraph (f) below and Clause 9.2 (Changes to Interest Periods), the Borrowers may select each subsequent Interest Period in respect of the Loan in a Selection Notice.
 
(b)
Each Selection Notice is irrevocable and must be delivered to the Lender by the Borrowers not later than the Specified Time.
 
(c)
If the Borrowers fail to select an Interest Period in the Utilisation Request or fail to deliver a Selection Notice to the Lender in accordance with paragraphs (a) and (b) above, the relevant Interest Period will, subject to paragraph (f) below and Clause 9.2 (Changes to Interest Periods), be three Months.
 
(d)
Subject to this Clause 9.1 (Selection of Interest Periods), the Borrowers may select an Interest Period of 1, 3 or 6 Months or any other period requested by the Borrowers and acceptable to the Lender.
 
(e)
An Interest Period in respect of the Loan shall not extend beyond the Termination Date.
 
(f)
In respect of a Repayment Instalment, the Borrowers may request in the relevant Selection Notice that an Interest Period for a part of the Loan equal to such Repayment Instalment shall end on the Repayment Date relating to it and, subject to paragraph (d) above, select a longer Interest Period for the remaining part of the Loan.
 
(g)
The first Interest Period for the Loan shall start on the Utilisation Date and, subject to paragraph (h) below, each subsequent Interest Period shall start on the last day of the preceding Interest Period.
 
(h)
Except for the purposes of paragraph (f) above and Clause 9.2 (Changes to Interest Periods), the Loan shall have one Interest Period only at any time.
 
9.2
Changes to Interest Periods
 
(a)
In respect of a Repayment Instalment, prior to determining the interest rate for the Loan, the Lender may establish an Interest Period for a part of the Loan equal to such Repayment Instalment to end on the Repayment Date relating to it and the remaining part of the Loan shall have the Interest Period selected in the relevant Selection Notice, subject to paragraph (d) of Clause 9.1 (Selection of Interest Periods).
 
40
(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.
 
9.3
Non-Business Days
 
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).
 
10
CHANGES TO THE CALCULATION OF INTEREST
 
10.1
Unavailability of CME Term SOFR
 
(a)
Interpolated CME Term SOFR:  If no CME 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 CME Term SOFR for a period equal in length to the Interest Period of the Loan or that part of the Loan.
 
(b)
Cost of funds:  If paragraph (a) above applies but it is not possible to calculate the Interpolated CME Term SOFR, there shall be no Reference Rate for the Loan or that part of the Loan (as applicable) and Clause 10.3 (Cost of funds) shall apply to the Loan or that part of the Loan for that Interest Period.
 
10.2
Market disruption
 
If before close of business in Athens on the Quotation Day for the relevant Interest Period, the Lender notifies the Borrowers that the cost to the Lender of funding the Loan would be in excess of the Reference 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, the rate of interest on the Loan or the relevant part of the Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:
 

 (i)
the Applicable Margin; and
 

 (ii)
the rate notified by the Lender to the Borrowers as soon as practicable and in any event before the date on which 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 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 15 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)
Any substitute or alternative basis agreed pursuant to paragraph (b) above shall be binding on all Parties.
 
(d)
If no substitute or alternative basis is agreed between the Lender and the Borrowers at the end of the negotiation period pursuant to paragraph (b) above, the Borrowers shall prepay the Loan at the end of the current Interest Period.
 
41
(e)
If paragraph (f) below does not apply and any rate notified by the Lender pursuant to 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 Reference Rate, the Lender's cost of funds in relation to the Loan or any part of the Loan for that Interest Period shall be deemed to be the Reference Rate.
 
10.4
Break Costs
 
The Borrowers shall, on demand by the Lender, pay to the Lender its Break Costs attributable to all or any part of the Loan or an Unpaid Sum being paid by a Borrower on a day other than the last day of an Interest Period for the Loan, the relevant part of the Loan or that Unpaid Sum.
 
11
FEES
 
11.1
Transaction fee
 
The Borrowers shall, on the Utilisation Date, pay to the Lender a non-refundable transaction fee equal to the aggregate of (a) 0.20 per cent. of the amount of Tranche A actually drawn and (b) 0.70 per cent. of the amount of Tranche B actually drawn.
 
11.2
Prepayment fee
 
(a)
If, on or before the second anniversary of the Utilisation Date, all or any part of the Loan is refinanced by an entity (including any fund) other than the Lender, the Borrowers must, on the date of the prepayment or refinancing, pay to the Lender a prepayment fee in the amount of zero point five per cent. (0.50%) of the amount prepaid.
 
(b)
For the avoidance of doubt, any prepayment/refinancing arising as a result of (i) an assignment of the Lender pursuant to Clause 30.1 (Assignment by the Lender), (ii) an illegality pursuant to Clause 7.1 (Illegality and Sanctions affecting the Lender), (iii) failure to agree on a substitute basis or alternative basis for funding pursuant to Clause 10.3 (Cost of funds), (iv) a change of control pursuant to Clause 7.5 (Change of control), (v) a total loss or a sale of a Ship pursuant to Clause 7.4 (Mandatory prepayment on sale or Total Loss), shall be excluded from paragraph (a) above and the Borrowers shall not be liable for any prepayment fee if the Loan or any part thereof is refinanced as a result of such event or circumstance.

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.
 
(c)
This Clause 12 (Tax Gross Up and Indemnities) shall not apply to any Hedging Agreement.
 
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.
 
43
(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 that 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 that 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;
 

 (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:
 
45

 (i)
any law or regulation;
 

 (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;
 
46

 (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 notify the Borrowers of the event giving rise to the claim.
 
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);
 
47
(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.
 
(c)
This Clause 14.1 (Currency indemnity) does not apply to any sum due to the Lender under any Hedging Agreement.
 
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;
 

 (B)
a failure by a Transaction Obligor to pay any amount due under a Finance Document on its due date;
 

 (C)
funding, or making arrangements to fund, the Loan requested by the Borrowers in the 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);
 

 (D)
the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrowers;
 

 (E)
investigating any event which it reasonably believes is a Default;
 

 (F)
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or
 
48

 (G)
instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents; and
 

 (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 32.8 (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 their 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;
 
49

 (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;
 

 (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.
 
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 and Sanctions affecting the Lender), Clause 12 (Tax Gross Up and Indemnities) or Clause 13 (Increased Costs) or paragraph (a) of Clause 14.3 (Mandatory Cost) including (but not limited to) assigning its rights under the Finance Documents to another Affiliate or Facility Office.
 
50
(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, without limitation, fees, costs and expenses of legal advisors and insurance and other consultants and other advisors) reasonably incurred by the Lender 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; or
 
(b)
an amendment is required pursuant to Clause 32.6 (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, without limitation, fees, costs and expenses of legal advisors and insurance and other consultants and other advisors) 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, without limitation, fees, costs and expenses of legal advisors and insurance and other consultants and other advisors) 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, including (without limitation) any losses, costs and expenses which the Lender may from time to time sustain, incur or become liable for by reason of the Lender being mortgagee of a Ship and/or a lender to a Borrower, or by reason of the Lender being deemed by any court or authority to be an operator or controller, or in any way concerned in the operation or control, of a Ship.
 
51
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) incurred by the Lender in connection with any change required to address the fact that CME Term SOFR is not or is likely not to be available.
 
52
SECTION 7
 
GUARANTEES AND JOINT AND SEVERAL LIABILITY OF BORROWERS
 
17
GUARANTEE AND INDEMNITY - GUARANTOR
 
17.1
Guarantee and indemnity
 
The Guarantor irrevocably and unconditionally:
 
(a)
guarantees to the Lender punctual performance by each Transaction Obligor (other than the 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 Guarantor) does not pay any amount when due under or in connection with any Finance Document, the 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 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 Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 17 (Guarantee and Indemnity - Guarantor) if the amount claimed had been recoverable on the basis of the 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 Guarantor under this Clause 17 (Guarantee and Indemnity - 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 Guarantor under this Clause 17 (Guarantee and Indemnity - 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 - Guarantor) or in respect of any Transaction Security (without limitation and whether or not known to it or the Lender) including:
 
53
(a)
this Agreement being or later becoming void, unenforceable or illegal as regards a Borrower or the Guarantor;
 
(b)
the Lender entering into any rescheduling, refinancing or other arrangement of any kind with a Borrower or the Guarantor;
 
(c)
the Lender releasing a Borrower or the Guarantor or any Security created by a Finance Document;
 
(d)
any time, waiver or consent granted to, or composition with, any Transaction Obligor or other person;
 
(e)
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;
 
(f)
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;
 
(g)
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;
 
(h)
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;
 
(i)
any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or
 
(j)
any insolvency or similar proceedings.
 
17.5
Immediate recourse
 
The 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 - 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 Guarantor shall not be entitled to the benefit of the same; and
 
54
(b)
hold in an interest-bearing suspense account any moneys received from the Guarantor or on account of the Guarantor's liability under this Clause 17 (Guarantee and Indemnity - Guarantor).
 
17.7
Deferral of Guarantor's rights
 
All rights which the Guarantor at any time has (whether in respect of this guarantee, a mortgage or any other transaction) against a Borrower (including, without limitation, any right which the Guarantor may have against that Borrower in relation to any documented or undocumented intercompany loan or transfer of funds from the Guarantor in order to assist that Borrower with financing the acquisition cost of a Ship), 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 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- 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 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 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 32 (Payment Mechanics).
 
17.8
Additional security
 
This guarantee and any other Security given by the 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.
 
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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 Resource), 17.6 (Appropriations), 17.7 (Deferral of Guarantor's Rights) and 17.8 (Additional Security) shall apply, with any necessary modifications, to any Security which the 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.
 
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.
 
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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:
 

 (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.
 
19
GUARANTEE AND INDEMNITY – HEDGE GUARANTORS
 
19.1
Guarantee and indemnity
 
Each Hedge Guarantor irrevocably and unconditionally jointly and severally:
 
(a)
guarantees to the Lender punctual performance by each Borrower of all that Borrower's obligations under the Hedging Agreements;
 
(b)
undertakes with the Lender that whenever a Borrower does not pay any amount when due under or in connection with any Hedging Agreement, that Hedge Guarantor shall immediately on demand pay that amount as if it were the principal obligor; and
 
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(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 Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Hedging Agreement on the date when it would have been due. The amount payable by a Hedge Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 19 (Guarantee and Indemnity – Hedge Guarantors) if the amount claimed had been recoverable on the basis of a guarantee.
 
19.2
Continuing guarantee
 
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Borrower under the Hedging Agreements, regardless of any intermediate payment or discharge in whole or in part.
 
19.3
Reinstatement
 
If any discharge, release or arrangement (whether in respect of the obligations of any Borrower 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 each Hedge Guarantor under this Clause 19 (Guarantee and Indemnity – Hedge Guarantors) will continue or be reinstated as if the discharge, release or arrangement had not occurred.
 
19.4
Waiver of defences
 
The obligations of each Hedge Guarantor under this Clause 19 (Guarantee and Indemnity – Hedge Guarantors) 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 19.4 (Waiver of defences), would reduce, release or prejudice any of its obligations under this Clause 19 (Guarantee and Indemnity – Hedge Guarantors) or in respect of any Transaction Security (without limitation and whether or not known to it or the Lender) including:
 
(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;
 
58
(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.
 
19.5
Immediate recourse
 
Each Hedge 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 19 (Guarantee and Indemnity – Hedge Guarantors). This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
 
19.6
Appropriations
 
Until all amounts which may be or become payable by the Borrowers under or in connection with the Hedging Agreements 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 no Hedge Guarantor shall be entitled to the benefit of the same; and
 
(b)
hold in an interest-bearing suspense account any moneys received from any Hedge Guarantor or on account of any Hedge Guarantor's liability under this Clause 19 (Guarantee and Indemnity – Hedge Guarantors).
 
19.7
Deferral of Hedge Guarantors' rights
 
All rights which each Hedge 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, no Hedge Guarantor will 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 19 (Guarantee and Indemnity – Hedge Guarantors):
 
(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 any Hedge Guarantor has given a guarantee, undertaking or indemnity under Clause 19 (Guarantee and Indemnity – Hedge Guarantors);
 
59
(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 a Hedge 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 32 (Payment Mechanics).
 
19.8
Additional security
 
This guarantee and any other Security given by a Hedge 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.
 
19.9
Applicability of provisions of Guarantee to other Security
 
Clauses 19.2 (Continuing guarantee), 19.3 (Reinstatement), 19.4 (Waiver of defences), 19.5 (Immediate recourse), 19.6 (Appropriations), 19.7 (Deferral of Hedge Guarantors' rights) and 19.8 (Additional security) shall apply, with any necessary modifications, to any Security which a Hedge 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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SECTION 8
 
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
 
20
REPRESENTATIONS
 
20.1
General
 
Each Obligor makes and procures that each other Transaction Obligor makes the representations and warranties set out in this Clause 20 (Representations) to the Lender on the date of this Agreement.
 
20.2
Status
 
(a)
Each Transaction Obligor is a corporation, duly incorporated and validly existing in good standing under the law of its Original Jurisdiction.
 
(b)
Each Transaction Obligor and, in the case of the Guarantor, each of its Subsidiaries has the power to own its assets and carry on its business as it is being conducted.
 
20.3
Shares 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. The legal title to and beneficial interest in the shares in each Borrower is held by the Guarantor free of any Security (except for Permitted Security) or any other claim.
 
(b)
None of the shares in any Borrower is subject to any option to purchase, pre-emption rights or similar rights.
 
20.4
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.
 
20.5
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 and, where applicable, registration as provided for in that Finance Document create 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.
 
(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)
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.
 
61
20.6
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)
the constitutional documents of any Transaction Obligor; or
 
(c)
any agreement or instrument binding upon it or any such Transaction Obligor or any such Transaction Obligor's assets or constitute a default or termination event (however described) under any such agreement or instrument.
 
20.7
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 Borrower C, the registration of Ship C under the 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.
 
20.8
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.
 
20.9
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.
 
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20.10
Insolvency
 
No:
 
(a)
corporate action, legal proceeding or other procedure or step described in paragraph (a) of Clause 29.8 (Insolvency proceedings); or
 
(b)
creditors' process described in Clause 29.9 (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 29.7 (Insolvency) applies to a member of the Group.
 
20.11
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 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 promptly after the date of the relevant Finance Document.
 
20.12
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.
 
20.13
No default
 
(a)
No Event of Default and, on the date of this Agreement and on the Utilisation Date, no Default is continuing or might be expected to result from the making of the 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 s or to which its assets are subject, which in each case would be expected to have a Material Adverse Effect.
 
(c)
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 its Subsidiaries or to which any of its Subsidiaries' assets are subject, which in each case would be expected to have a Material Adverse Effect.
 
20.14
No misleading information
 
(a)
Any factual information provided by any Transaction Obligor 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.
 
63
(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.
 
20.15
Financial Statements
 
(a)
The Original Financial Statements were prepared in accordance with GAAP consistently applied.
 
(b)
The Original Financial Statements give a true and fair view of the Obligors' financial condition as at the end of the relevant financial year and results of operations during the relevant financial year (consolidated in the case of the Guarantor).
 
(c)
There has been no material adverse change in the assets, business or financial condition of each Obligor (and of the assets, business or consolidated financial condition of the Group, in the case of the Guarantor) since the date of the Original Financial Statements.
 
(d)
Each Obligor's most recent financial statements delivered pursuant to Clause 21.2 (Financial statements):
 

 (i)
have been prepared in accordance with Clause 21.3 (Requirements as to financial statements); and
 

 (ii)
give a true and fair view (if audited) and fairly represent (if unaudited) of its financial condition as at the end of the relevant financial year and operations during the relevant financial year.
 
(e)
Since the date of the most recent financial statements delivered pursuant to Clause 21.2 (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 Guarantor).
 
20.16
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.
 
20.17
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.
 
(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 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 other Transaction Obligor.
 
64
20.18
Validity and completeness of the Transaction Documents
 
(a)
Each of the Transaction Documents to which each Transaction Obligor is a party constitutes legal, valid, binding and enforceable obligations of that Transaction Obligor.
 
(b)
The copies of the Transaction Documents delivered to the Lender before the date of this Agreement are true and complete copies.
 
(c)
No amendments or additions (except, in relation to the MOA, for the entering with the Seller into any addendum in relation to the necessary delivery documentation or any other delivery operational aspect of Ship C, if so required) to the Transaction Documents have been agreed nor have any rights under the Transaction Documents been waived.
 
20.19
No rebates etc.
 
There is no agreement or understanding to allow or pay any rebate, premium, inducement, commission, discount or other benefit or payment (however described) to any Borrower, the Guarantor, the Seller or a third party in connection with the purchase by Borrower C of Ship C, other than as disclosed to the Lender in writing on or before the date of this Agreement.
 
20.20
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.
 
20.21
No breach of laws
 
It has not (and no other Transaction Obligor nor a member of the Group has) breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.
 
20.22
No Charter
 
No Ship is subject to any Charter other than a Permitted Charter.
 
20.23
Validity and completeness of Existing Charters
 
(a)
Each Existing Charter constitutes legal, valid, binding and enforceable obligations of the relevant Borrower and the Existing Charterer respectively.
 
(b)
The copy of each Existing Charter delivered to the Lender before the date of this Agreement is a true and complete copy.
 
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(c)
No amendments or additions to an Existing Charter have been agreed nor has Borrower A, Borrower B or the Existing Charterer waived any of their respective rights under the relevant Existing Charter.
 
20.24
Compliance with Environmental Laws
 
All Environmental Laws relating to the ownership, operation and management of each Ship and the business of each Transaction Obligor and each member of the Group (as now conducted and as anticipated to be conducted in the future) and the terms of all Environmental Approvals have been complied with.
 
20.25
No Environmental Claim
 
No Environmental Claim has been made or threatened against any Transaction Obligor and any member of the Group or any Ship which might be expected to have a Material Adverse Effect.
 
20.26
No Environmental Incident
 
No Environmental Incident has occurred and no person has claimed that an Environmental Incident has occurred.
 
20.27
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.
 
20.28
Taxes paid
 
(a)
It is not 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 likely to be, made or conducted against it with respect to Taxes.
 
20.29
Financial Indebtedness
 
No Borrower has any Financial Indebtedness outstanding other than Permitted Financial Indebtedness.
 
20.30
Overseas companies
 
No Transaction 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.
 
20.31
Good title to assets
 
Each Transaction Obligor 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.
 
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20.32
Ownership
 
(a)
Each Borrower (other than Borrower C) is the sole legal and beneficial owner of the Ship owned by it, its Earnings and its Insurances and of all rights and interests under any Charter to which such Borrower is a party.
 
(b)
With effect on and from the Delivery Date, Borrower C will be the sole legal and beneficial owner of Ship C, its Earnings and its Insurances and of all rights and interests under any Charter to which Borrower C is a party.
 
(c)
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.
 
(d)
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.
 
20.33
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"), each Transaction Obligor's 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, 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.
 
20.34
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, Part A (The Obligors).
 
20.35
No employee or pension arrangements
 
No Obligor has any employees or any liabilities under any pension scheme.
 
20.36
Sanctions
 
(a)
None of the Transaction Obligors, any of their Subsidiaries, any director or officer or any employee, or Affiliate of a Transaction Obligor or any of its Subsidiaries, nor any member of the Group or, to the best of each Transaction Obligor's knowledge, a Third Party Manager or other agent:
 

 (i)
is a Prohibited Person or is otherwise owned or controlled by or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person;
 

 (ii)
owns or controls a Prohibited Person;
 

 (iii)
has received notice of or is aware of any claim, action, suit, proceedings or investigation against it with respect to Sanctions; or
 

 (iv)
has, to the best of its knowledge, a Prohibited Person serving as a director, officer or  employee.
 
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(b)
Each Transaction Obligor, its Subsidiaries and their respective directors, officers and employees and, to the best of the knowledge of each such Transaction Obligor its agents, are in compliance with Sanctions in all material respects and are not knowingly engaged in any activity that would reasonably be expected to result in such Transaction Obligor being designated as a Prohibited Person.
 
(c)
None of the Ships is a Sanctioned Ship.
 
20.37
US Tax Obligor
 
No Obligor is a US Tax Obligor.
 
20.38
Funding of acquisition of Ships
 
(a)
The acquisition cost Ship A was paid by Borrower A to the seller of Ship A exclusively by means of intercompany loans, documented or undocumented or transfer of funds from the Guarantor (which, for the avoidance of doubt, will be subordinated in accordance with Clause 23.25 (Funding of acquisition of Ship)) and from the proceeds of the loan under the Existing Facility Agreement. Any funding structure for the acquisition cost of Ship A is fully evident in the financial statements of Borrower A for the financial year ending on 31 December 2021 provided pursuant to Clause 21.2 (Financial statements).
 
(b)
The Purchase Price of Ship C is to be paid by Borrower C to the Seller exclusively by means of intercompany loans, documented or undocumented or transfer of funds from the Guarantor (which, for the avoidance of doubt, will be subordinated in accordance with Clause 23.25 (Funding of acquisition of Ship)) and from the proceeds of Tranche B. Any funding structure for the acquisition cost of Ship C will be fully evident in the financial statements of Borrower C for the financial year ending on 31 December 2025 to be provided pursuant to Clause 21.2 (Financial statements).
 
20.39
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 the Utilisation Request and the first day of each Interest Period.
 
21
INFORMATION UNDERTAKINGS
 
21.1
General
 
The undertakings in this Clause 21 (Information Undertakings) remain in force throughout the Security Period unless the Lender otherwise permits.
 
21.2
Financial statements
 
As soon as they become available, but in any event within 180 days after the end of each of its financial years to which they relate:
 
(a)
each Borrower shall supply to the Lender its annual unaudited financial statements for that financial year; and
 
(b)
the Guarantor shall supply to the Lender its annual audited and semi-annual unaudited consolidated financial statements for that financial year.
 
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21.3
Requirements as to financial statements
 
(a)
Each set of financial statements delivered by each Obligor pursuant to Clause 21.2 (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) of its financial condition and operations as at the date as at which those financial statements were drawn up.
 
(b)
Each set of financial statements of each Obligor delivered pursuant to Clause 21.2 (Financial Statements) shall be prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the relevant Original Financial Statements 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 the Guarantor's auditors 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 the relevant 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 make an accurate comparison between the financial position indicated in those financial statements and the relevant Original Financial Statements.
 
(c)
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.
 
21.4
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 or in connection with any breach of any Sanctions) which are current, threatened or pending against any Transaction Obligor or 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 or other tribunal or any order or sanction of any governmental or other regulatory body which is made against any Transaction Obligor or 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;
 
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 (ii)
the Security Assets;
 

 (iii)
compliance of the Transaction Obligors with the terms of the Finance Documents;
 

 (iv)
the financial condition, business, affairs, commitments and operations of any Transaction Obligor and any member of the Group irrespective of their shareholding structure,
 
as the Lender may reasonably request; and
 
(f)
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.
 
21.5
Notification of Default
 
(a)
Each Obligor shall, and shall procure that each other Transaction 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 two of its officers 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).
 
21.6
DAC6
 
(a)
In this Clause 21.6 (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 Obligors 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).
 
21.7
"Know your customer" checks
 
If:
 
(a)
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;

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(b)
any change in the status of a Transaction Obligor (or the Holding Company of a Transaction Obligor) (including, without limitation, a change of ownership of a Transaction Obligor or the Holding Company of a Transaction Obligor) after the date of this Agreement; or
 
(c)
a proposed assignment by the Lender of any of its rights under this Agreement,
 
obliges the Lender (or, in the case of paragraph (c) 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 requested by the Lender at its absolute satisfaction (for itself or, in the case of the event described in paragraph (c) above, on behalf of any prospective assignee) in order for the Lender or, in the case of the event described in paragraph (c) 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.
 
22
FINANCIAL COVENANTS
 
22.1
Financial Covenants of the Guarantor
 
(a)
Except as the Lenders may otherwise permit in writing (such permission not to be unreasonably delayed), the Guarantor shall ensure that at all times:
 

 (i)
it shall maintain Cash (which, without limitation, shall include the Pledged Deposit and any contractually committed but undrawn parts of the Notes) in an amount not less than the product of (i) the number of Fleet Vessels and (ii) $500,000; and
 

 (ii)
the Leverage Ratio shall not exceed 70 per cent.
 
(b)
For the purposes of this Clause 22.1 (Financial covenants of the Guarantor):
 
"Accounting Period" means each consecutive 6-month period, during the Security Period ending on 31 December and 30 June of each financial year.
 
"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).
 
"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.
 
"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) semi-annual unaudited (in respect of the Accounting Period of each financial year) consolidated financial statements the Guarantor is obliged to deliver to the Lender pursuant to Clause 21.2 (Financial statements).
 
"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.
 
"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.
 
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"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.
 
"Net Debt" means, as at the date of calculation, the Total Debt less any drawn amounts of the Notes 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 issued or to be issued by the Guarantor to certain of its shareholders and held or to be held by those shareholders in exchange for loan made by those shareholders to the Guarantor which have been or are to be, on-lent to the Borrower and other members of the Group to assist them with their working capital requirements.
 
"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 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 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.
 
22.2
Testing
 
The financial covenants set out in this Clause 22 (Financial Covenants) shall be tested semi-annually by reference to the relevant Compliance Certificate and (in respect of the second semester of each calendar year) to the annual financial statements of the Guarantor delivered pursuant to Clause 21.2 (Financial statements).
 
22.3
Compliance Certificate
 
The Guarantor shall supply to the Lender semi-annually together with its annual audited and semi-annual unaudited financial statements delivered pursuant to Clause 21.2 (Financial statements) a Compliance Certificate signed by an officer of the Guarantor setting out (in reasonable detail) computations as to compliance with Clause 22.1 (Financial Covenants of the Guarantor)  as at the date as at which those financial statements were drawn up.
 
22.4
Most favoured nation
 
The Guarantor undertakes to procure that the Lender shall receive equal treatment with creditors under any other financing which the Guarantor or any of its Subsidiaries have entered or will enter into in relation to any financial or other covenant which the Guarantor provides. Accordingly, should the 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 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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23
GENERAL UNDERTAKINGS
 
23.1
General
 
The undertakings in this Clause 22 (General Undertakings) remain in force throughout the Security Period except as the Lender may otherwise permit.
 
23.2
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; and
 
(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 and in the state of the Approved Flag at any time of each Ship or any Transaction Document to which it is a party; and
 

 (iii)
in the case of a Borrower, own and operate its Ship.
 
(c)
without prejudice to the generality of the above, ensure that if, but for the obtaining of an Authorisation, that Transaction Obligor would be in breach of any of the provisions of this Agreement which relate to Sanctions or, by reason of Sanctions, would be prohibited from performing any provision of this Agreement, such an Authorisation is obtained so as to avoid such breach or to enable such performance.
 
23.3
Compliance with laws
 
Each Obligor shall, and shall procure that each other Transaction Obligor and each Third Party Manager will, comply in all respects with all laws and regulations to which it may be subject, if failure so to comply has or is reasonably likely to have a Material Adverse Effect.
 
23.4
Environmental compliance
 
Each Obligor shall, and shall procure that each other Transaction Obligor and each Third Party Manager will, and the Guarantor shall procure that each other 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.
 
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23.5
Environmental Claims
 
Each Obligor shall, and shall procure that each other Transaction Obligor and any member of the Group will (through the Guarantor), promptly upon becoming aware of the same, inform the Lender in writing of:
 
(a)
any Environmental Claim against any Transaction Obligor and 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 Transaction Obligor and any member of the Group,
 
where the claim, if determined against that Transaction Obligor or that member of the Group, has or is reasonably likely to have a Material Adverse Effect.
 
23.6
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 21.2 (Financial statements); and
 

 (iii)
such payment can be lawfully withheld.
 
(b)
No Obligor shall (and the Obligors shall procure that no other Transaction Obligor will), change its residence for Tax purposes.
 
23.7
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.
 
23.8
No change to centre of main interests
 
No Obligor shall, and the Obligors shall procure that no other Transaction Obligor will, 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 20.33 (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.
 
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23.9
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.
 
23.10
Title
 
(a)
Each Borrower (other than Borrower C) shall hold the legal title to, and owns the entire beneficial interest in the Ship owned by it, its Earnings and its Insurances.
 
(b)
From the Delivery Date, Borrower C shall hold the legal title to, and own the entire beneficial interest in Ship C, its Earnings and its Insurances.
 
(c)
With effect on and from its creation or intended creation, each Transaction 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 that Transaction Obligor.
 
23.11
Negative pledge
 
(a)
No Obligor shall, and the Obligors shall procure that no other Transaction Obligor will, create or permit to subsist any Security over any of its assets which are, in the case of the Transaction Obligors (other than the Borrowers), the subject of the Security created or intended to be created by the Finance Documents.
 
(b)
No Borrower shall:
 

 (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 a Transaction Obligor or any other member of the Group;
 

 (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.
 
23.12
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).
 
75
(b)
The 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 of all or substantially all (in the reasonable opinion of the Lenders) of its assets.
 
(c)
Paragraph (a) above does not apply to any Charter as all Charters are subject to Clause 26.16 (Restrictions on chartering, appointment of managers etc.).
 
23.13
Merger
 
No Obligor shall, and the Obligors shall procure that no other Transaction Obligor will, enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction unless, in the case of the Guarantor, the Guarantor is the surviving entity and no breach of Clauses 7.5 (Change of control), 23.14 (Change of business) and 23.27 (NASDAQ listing) occurs or will occur as a result of such action and the process of any such amalgamation, demerger, merger, consolidation or corporate reconstruction will not have a Material Adverse Effect.
 
23.14
Change of business
 
(a)
No Obligor shall, and the Obligors shall procure that no other Transaction Obligor will, make any substantial change to the general nature of its business from that carried on at the date of this Agreement.
 
(b)
No Obligor shall, and the Obligors shall procure that no other Transaction Obligor will, engage in any business other than the ownership, operation, chartering and management of a Ship or a Fleet Vessel.
 
23.15
Financial Indebtedness
 
No Borrower shall incur or permit to be outstanding any Financial Indebtedness except Permitted Financial Indebtedness.
 
23.16
Expenditure
 
No Borrower shall incur any expenditure, except for expenditure reasonably incurred in the ordinary course of owning, operating, insuring, maintaining and repairing its Ship.
 
23.17
Share capital
 
No Borrower shall:
 
(a)
purchase, cancel, redeem or retire any of its issued shares;
 
(b)
increase or reduce the number of shares that it is authorised to issue or change the par value of such shares or create any new class of shares;
 
(c)
issue any further shares except to the 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; or
 
(d)
appoint any further director or officer of the Borrower (unless the provisions of the Shares Security applicable to that Borrower are complied with).
 
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23.18
Dividends
 
No Borrower shall:
 
(a)
declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (in cash or in kind) on or in respect of its shares; or
 
(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;
 
(d)
redeem repurchase, defease, retire or repay any of its shares or resolve to do so;
 
(e)
repay part of any Subordinated Liabilities,
 
at any time during the Security Period if a Default has occurred and is continuing or where the making or payment of such dividend or distribution, or as the case may be, any such other action or occurrence set out in paragraphs (a) through (e) above would result in the occurrence of an Event of Default.
 
23.19
Other transactions
 
No Obligor shall, and the Obligors shall procure that no other Transaction Obligor will:
 
(a)
be the creditor in respect of any loan or any form of credit to any person other than another Transaction Obligor or to a member of the Group which is a shipowning company 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 Transaction Obligor assumes any liability of any other person, other than (i) any guarantee or indemnity given under the Finance Documents, (ii) any guarantee or indemnity given by the Guarantor in respect of the Financial Indebtedness of a member of the Group which is a shipowning company, or (iii) any guarantee or indemnity given by any Approved Manager in the ordinary course of its business;
 
(c)
enter into any material agreement other than:
 

 (i)
the Transaction Documents; or
 

 (ii)
any other agreement expressly allowed under any other term of this Agreement,
 
other than, in respect of any Approved Manager, any agreements entered into in the ordinary course of its business;
 
(d)
enter into any transaction on terms which are, in any respect, less favourable to that Transaction Obligor than those which it could obtain in a bargain made at arms' length; or
 
(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.
 
77
23.20
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 or contrary to Sanctions 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.
 
23.21
Sanctions undertakings
 
(a)
No proceeds of the Loan or any part of the Loan shall be made available, directly or indirectly, to or for the benefit of a Prohibited Person nor shall they be otherwise, directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions, or to fund any activity in a Sanctioned Country or in any manner which would cause the Lender to be in breach of or made subject to Sanctions, or at risk of being in breach of or made subject to Sanctions.
 
(b)
No Transaction Obligor shall fund all or any part of any payment or repayment under the Loan out of proceeds directly or indirectly derived from any activity in a Sanctioned Country or any transaction with a Prohibited Person, or out of proceeds directly or indirectly derived from any other transactions which are prohibited by Sanctions or in any other manner which could cause the Lender to be in breach of or made subject to Sanctions, or at risk of being in breach of or made subject to Sanctions and no such proceeds shall be paid into any Account.
 
(c)
Each of the Transaction Obligors, by using its best endeavours, has implemented and shall maintain in effect a Sanctions compliance policy which, in accordance with the recommendations of the Sanctions Advisory, is designed to ensure compliance by each such Transaction Obligor, its Subsidiaries with Sanctions. Without limitation on the foregoing, such Sanctions compliance policy shall reasonably procure that each Transaction Obligor, its Subsidiaries shall, where applicable:
 

 (i)
conduct their activities in a manner consistent with Sanctions;
 

 (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 comply with the relevant policies, as applicable;
 

 (iv)
have relevant and as per standard practice 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
 
78

 (vii)
have controls in place consistent with the Sanctions Advisory.
 
23.22
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;
 

 (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 23.22 (Further assurance), that Obligor shall deliver, or shall procure that such other Transaction Obligor will deliver, evidence acceptable to the Lender that the Obligor's or Transaction Obligor's execution of such document has been duly authorised by it.
 
23.23
Pledged deposit
 
The Obligors shall ensure that, on and from the Utilisation Date and throughout the remainder of the Security Period, an amount of $1,000,000 in relation to each Ship which is subject to a Mortgage, shall be maintained in the credit of the Pledged Deposit Account.
 
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23.24
Ownership and control
 
The Guarantor shall:
 
(a)
remain the direct owner of the shares of each Borrower and of the voting rights attaching to such shares; and
 
(b)
be the direct owner of shipping companies and of entities engaged in shipping related activities, all acceptable to the Lender.
 
23.25
Funding of acquisition of Ship
 
In the event that the acquisition cost of a Ship was funded by means of lending (or by any other means and whether documented or undocumented) that survive after the Utilisation Date to a Borrower from any person or entity acceptable to the Lender, that Borrower shall ensure that the rights of such person or entity which funded the acquisition cost of that Ship shall be fully subordinated to all Financial Indebtedness incurred under the Finance Documents pursuant to a Subordination Deed and the Subordinated Liabilities under that Subordination Deed are assigned in favour of the Lender pursuant to a Subordinated Debt Security.
 
23.26
Use of proceeds
 
Each Borrower shall ensure that no part of the proceeds of the Loan shall be used for the purposes of acquiring shares in the Lender or other banks and/or financial institutions or acquiring hybrid capital debentures of the Lender or other banks and/or financial institutions.
 
23.27
NASDAQ listing
 
The Guarantor shall maintain its listing on the NASDAQ Stock Exchange or any other stock exchange acceptable to the Lender.
 
23.28
No variation, release etc. of Existing Charter
 
Neither Borrower A nor Borrower B shall, whether by a document, by conduct, by acquiescence or in any other way:
 
(a)
vary the Existing Charter to which it is a party in a material manner (and for the avoidance of doubt, but without limitation, any amendment in relation to the term, the hire rate, the termination events, the parties and the governing law of that Existing Charter is considered material);
 
(b)
release, waive, suspend, subordinate or permit to be lost or impaired any interest or right of any kind which such Borrower has at any time to, in or in connection with, that Existing Charter or in relation to any matter arising out of or in connection with that Existing Charter; or
 
(c)
waive any person's breach of that Existing Charter.
 
23.29
No change of CEO
 
The chief executive officer (the "CEO") of the Guarantor as at the date of this Agreement will remain the CEO of the Guarantor throughout the Security Period.
 
24
INSURANCE UNDERTAKINGS
 
24.1
General
 
The undertakings in this Clause 24 (Insurance Undertakings) remain in force, in relation to Ship A and Ship B, on and from the date of this Agreement and, in relation to Ship C, on and from the Delivery Date) and, in each case, throughout the rest of the Security Period except as the Lender may otherwise permit.
 
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24.2
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;
 
(c)
protection and indemnity risks; and
 
(d)
any other risks against which the Lender considers, having regard to ship insurance or ship finance 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 notice to that Borrower.
 
24.3
Terms of obligatory insurances
 
The Borrowers shall effect such insurances:
 
(a)
in dollars;
 
(b)
in the case of fire and usual marine risks (including hull and machinery and excess risks) and war risks, in an amount on an aggregate agreed value basis at least the greater of:
 

 (i)
125 per cent. of the aggregate of (A) the Loan and (B) the Hedging Close-Out Liabilities applicable to the Borrowers; and
 

 (ii)
the aggregate Market Value of the Ships;
 
(c)
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 but such amount shall not be less than $1,000,000,000;
 
(d)
in the case of protection and indemnity risks, in respect of the full tonnage of the relevant Ship;
 
(e)
on approved terms; and
 
(f)
through Approved Brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations (which are members of the International Group of Protection and Indemnity Associations).
 
24.4
Further protections for the Lender
 
In addition to the terms set out in Clause 24.3 (Terms of obligatory insurances), each Borrower shall procure that the obligatory insurances effected by it shall:
 
(a)
subject always to paragraph (b), name that Borrower as the sole named insured unless the interest of every other named insured is limited:
 

 (i)
in respect of any obligatory insurances for hull and machinery and war risks;
 
81

 (A)
to any provable out-of-pocket expenses that it has 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 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;
 
(b)
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;
 
(c)
name the Lender as loss payee with such directions for payment as the Lender may specify;
 
(d)
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;
 
(e)
provide that the obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Lender; and
 
(f)
provide that the Lender may make proof of loss if that Borrower fails to do so.
 
24.5
Renewal of obligatory insurances
 
Each Borrower shall:
 
(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 14 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.
 
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24.6
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)
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 24.4 (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 14 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
 

 (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.
 
24.7
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)
a letter or letters of undertaking in such form as may be required by the Lender; and
 
(c)
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.
 
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24.8
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.
 
24.9
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.
 
24.10
Guarantee
 
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.
 
24.11
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 (b) of Clause 24.6 (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
 

 (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.
 
24.12
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.
 
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24.13
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.
 
24.14
Provision of copies of communications
 
Each Borrower shall provide the Lender, at the time of each such communication (other than communications of an entirely routine nature), with copies of all written communications 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.
 
24.15
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
 
(b)
effecting, maintaining or renewing any such insurances as are referred to in Clause 24.16 (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.
 
24.16
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 each in an amount of not less than 110 per cent. of the aggregate of (i) Loan and (ii) the Hedging Close-Out Liabilities and otherwise on such terms, through such insurers and generally in such manner as the Lender may from time to time consider appropriate.

85
(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.
 
25
MOA UNDERTAKINGS
 
25.1
General
 
The undertakings in this Clause 25 (MOA Undertakings) remain in force on and from the Utilisation Date and throughout the rest of the Security Period except as the Lender may otherwise permit (such permission not to be unreasonably withheld).
 
25.2
No variation, release etc. of MOA
 
Borrower C shall not, whether by a document, by conduct, by acquiescence or in any other way:
 
(a)
vary the MOA (except for the entering with the Seller into an addendum no. 2 to the MOA in relation to the payment mechanism of the balance payment); or
 
(b)
release, waive, suspend, subordinate or permit to be lost or impaired any interest or right of any kind which Borrower C has at any time to, in or in connection with, the MOA or in relation to any matter arising out of or in connection with the MOA.
 
25.3
Provision of information relating to MOA
 
Without prejudice to Clause 21.4 (Information: miscellaneous) Borrower C shall:
 
(a)
immediately inform the Lender if any breach of the MOA occurs or a serious risk of such a breach arises and of any other event or matter affecting the MOA which has or is reasonably likely to have a Material Adverse Effect; and
 
(b)
upon the reasonable request of the Lender, keep the Lender informed as to any notice of readiness of delivery of Ship C.
 
25.4
No assignment etc. of MOA
 
Borrower C shall not assign, novate, transfer or dispose of any of its rights or obligations under the MOA.
 
26
GENERAL SHIP UNDERTAKINGS
 
26.1
General
 
The undertakings in this Clause 26 (General Ship Undertakings) remain in force, in relation to Ship A and Ship B, on and from the date of this Agreement and, in relation to Ship C, on and from the Delivery Date) and, in each case, throughout the rest of the Security Period except as the Lender may otherwise permit (such permission not to be unreasonably withheld in the case of paragraphs (c) and (d) of Clause 26.16 (Restrictions on chartering, appointment of managers etc.)).
 
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26.2
Ship's name 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 change of 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.
 
26.3
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; and
 
(b)
so as to maintain the relevant Approved Classification with an Approved Classification Society free of overdue recommendations and conditions.
 
26.4
Classification society undertaking
 
If required by the Lender in writing, each Borrower shall, in respect of the Ship owned by it, instruct the relevant Approved Classification Society (and procure that the relevant Approved Classification Society undertakes with the Lender):
 
(a)
to send to the Lender, following receipt of a request from the Lender, certified true copies of all original class records held by that 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 that Approved Classification Society and to take copies of them;
 
(c)
to notify the Lender immediately in writing if that Approved Classification Society:
 

 (i)
receives notification from that Borrower or any person that that Ship's Approved Classification Society is to be changed; or

87

 (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 that Approved Classification Society;
 
(d)
following receipt of a written request from the Lender:
 

 (i)
to confirm that such Borrower is not in default of any of its contractual obligations or liabilities to that Approved Classification Society, including confirmation that it has paid in full all fees or other charges due and payable to that Approved Classification Society; or
 

 (ii)
to confirm that that Borrower is in default of any of its contractual obligations or liabilities to that Approved Classification Society, to specify to the Lender in detail the facts and circumstances of such default, the consequences of such default, and any remedy period agreed or allowed by that Approved Classification Society.
 
26.5
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 without the prior consent of the Lender which shall not be unreasonably withheld in regards to modifications that will ensure compliance with existing or upcoming Environmental Laws and regulations.
 
26.6
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.
 
26.7
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.
 
26.8
Inspection
 
Each Borrower shall permit the Lender (acting through surveyors or other persons appointed by and reporting to the Lender for that purpose and at the Borrowers' expense) to board the Ship owned by it, upon reasonable notice and without interfering with the Ship's normal course of trading (such notice and non-interference obligation not to apply following the occurrence of an Event of Default which is continuing), to inspect its condition or to satisfy themselves about proposed or executed repairs and the Borrowers shall afford all proper facilities for such inspections.
 
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26.9
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.
 
26.10
Compliance with laws etc.
 
Each Obligor shall (and shall procure that each other Transaction Obligor and each Third Party Manager shall):
 
(a)
comply, or procure compliance with all laws or regulations:
 

 (i)
relating to its business generally; and
 

 (ii)
relating to a Ship, its ownership, employment, operation, management and registration,
 
including, but not limited to, the ISM Code, the ISPS Code, all Environmental Laws, all Sanctions and the laws of the Approved Flag;
 
(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 a Ship 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.
 
26.11
ISPS Code
 
Without limiting paragraph (a) of Clause 26.10 (Compliance with laws etc.), each Borrower shall (and shall procure that each Approved Manager will):
 
(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
 
89
(c)
notify the Lender immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.
 
26.12
Sanctions and Ship trading
 
Without limiting Clause 26.10 (Compliance with laws etc.), each Borrower shall procure, in respect of the Ship owned by it:
 
(a)
it shall not be used by or for the benefit of a Prohibited Person or in trading to or from a Sanctioned Country;
 
(b)
it shall not otherwise be used in any manner contrary to Sanctions (or which could be contrary to Sanctions if Sanctions were binding on each Transaction Obligor and each Third Party Manager), or in a manner that creates a risk that a Transaction Obligor or Third Party Manager will become a Prohibited Person;
 
(c)
it shall not be used in trading in any manner that creates a risk that such Ship will become a Sanctioned Ship;
 
(d)
it shall not be traded in any manner which would be reasonably likely to trigger the operation of any sanctions limitation or exclusion clause (or similar) in the Insurances; and
 
(e)
without prejudice to that above provisions of this Clause 26.12 (Sanctions and Ship trading), that each charterparty in respect of that Ship shall contain, for the benefit of that Borrower, language which gives effect to the provisions of paragraph (a) of Clause 26.10 (Compliance with laws etc.) as regards Sanctions and paragraph (b) and (c) of this Clause 26.12 (Sanctions and Ship trading) and which permits refusal of employment or voyage orders if non-compliance with such provisions would breach Sanctions (or which would result in a breach of Sanctions if Sanctions were binding on each Transaction Obligor and/or each Third Party Manager).
 
26.13
Trading in war zones or excluded areas
 
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:
 
(a)
the prior written consent of the Lender has been given; and
 
(b)
that Borrower has (at its expense) effected any special, additional or modified insurance cover which the insurers and the Lender may require.
 
26.14
Provision of information
 
Without prejudice to Clause 21.4 (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;
 
90
(d)
any towages and salvages; and
 
(e)
its compliance, each Approved Manager's compliance and the compliance of that Ship with the ISM Code and the ISPS Code and any Sanctions,
 
and, upon the Lender's request, promptly provide copies of any current Charter or sub-charter relating to that Ship, of any current guarantee of any such Charter, that Ship's Safety Management Certificate and any relevant Document of Compliance.
 
26.15
Notification of certain events
 
Each Borrower shall, in respect of the Ship owned by it, immediately notify the Lender by 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, any 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, each Approved Manager's or any other person's response to any of those events or matters.
 
26.16
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;
 
91
(b)
enter into any time, voyage or consecutive voyage charter in respect of that Ship other than a Permitted Charter;
 
(c)
materially amend, supplement or terminate any Management Agreement or any Assignable Charter (and for the avoidance of doubt, but without limitation, any amendment on the duration, the management fees, the termination provisions, the parties and the governing law of any Management Agreement is considered material) unless, in the case of termination, such Management Agreement is immediately replaced by another Management Agreement acceptable to the Lender with an Approved Manager and such Approved Manager provides a Manager's Undertaking;
 
(d)
appoint a manager of that Ship other than an Approved Manager or agree to any material alteration to the terms of an Approved Manager's appointment (and for the avoidance of doubt, but without limitation, 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 $750,000 (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.
 
26.17
Notice of Mortgage
 
Each Borrower shall keep the relevant Mortgage registered against the Ship owned by it as a valid first priority or, as the case may be, preferred mortgage, carry on board the 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.
 
26.18
Sharing of Earnings
 
No Borrower shall enter into any agreement or arrangement for the sharing of any Earnings.
 
26.19
Charterparty Assignment
 
If a Borrower enters into any Assignable Charter subject to obtaining the prior consent of the Lender in accordance with paragraph (b) of Clause 26.16 (Restrictions on chartering, appointment of managers etc.), that Borrower shall, at the request of the Lender, execute in favour of the Lender a Charterparty Assignment in respect of such Assignable Charter and shall deliver to the Lender any other documents as the Lender may require.
 
26.20
Inventory of Hazardous Materials
 
Each Borrower shall maintain an Inventory of Hazardous Materials in relation to the Ship owned by it.
 
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26.21
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 26 (General Ship Undertakings).
 
27
ACCOUNTS AND APPLICATION OF EARNINGS
 
27.1
Accounts
 
No Borrower may, without the prior consent of the Lender, maintain any bank account other than the Accounts.
 
27.2
Payment of Earnings
 
Each Borrower shall ensure that:
 
(a)
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 into its Operating Account; and
 
(b)
all Hedge Receipts in relation to that Borrower are paid into its Operating Account.
 
27.3
Application of Earnings
 
(a)
The Borrowers shall procure that there is transferred from the Operating Accounts to the Lender:
 

 (i)
on each Repayment Date, the amount of the Repayment Instalment then due on that Repayment Date;
 

 (ii)
on the last day of each Interest Period, the amount of interest then due on that date; and
 

 (iii)
on any day on which an amount is otherwise due from the Borrower under a Finance Document, an amount necessary to meet that due amount,
 
and each Borrower irrevocably authorises and instructs:
 

 (A)
the Account Bank to make those transfers;
 

 (B)
the Lender to apply the transferred amounts in payment of the relevant Repayment Instalment, interest amount or other amount due.
 
(b)
The Earnings standing to the credit of any Operating Account shall, subject to the terms of the Account Security in respect of that Operating Account, be available to, and may be withdrawn by, the relevant Borrower throughout the Security Period, unless there is an Event of Default which is continuing or unless an Event of Default would result from the withdrawal of any such balance (or any part thereof) from that Operating Account.
 
93
27.4
Location of Accounts
 
Each Borrower shall promptly:
 
(a)
comply with any requirement of the Lender as to the location or relocation of any Account; 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) any Account.
 
28
SECURITY COVER
 
28.1
Minimum required security cover
 
Clause 28.2 (Provision of additional security; prepayment) applies if the Lender notifies the Borrower that the Security Cover Ratio is below:
 
(a)
for the period commencing on the Utilisation Date and ending on the date falling on the second anniversary of the Utilisation Date, 125 per cent.; and
 
(b)
at all times thereafter, 130 per cent.
 
28.2
Provision of additional security; prepayment
 
(a)
If the Lender serves a notice on the Borrowers under Clause 28.1 (Minimum required security cover), the Borrowers shall, on or before the date falling 30 Business Days 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.
 
(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.
 
28.3
Value of additional vessel security
 
The net realisable value of any additional security which is provided under Clause 28.2 (Provision of additional security; prepayment) and which consists of Security over a vessel shall be the Market Value of the vessel concerned.
 
28.4
Valuations binding
 
Any valuation under this Clause 27 (Security Cover) shall be binding and conclusive as regards each Borrower.
 
94
28.5
Provision of information
 
(a)
Each Borrower shall promptly provide the Lender and any Approved Valuer acting under this Clause 27 (Security Cover) with any information which the Lender or that Approved Valuer may request for the purposes of the valuation.
 
(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 Approved Valuer or the Lender considers prudent.
 
28.6
Prepayment mechanism
 
Any prepayment pursuant to Clause 28.2 (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 7.3 (Voluntary prepayment of Loan); however, the application of such prepayment should be on a pro rata basis against the outstanding Repayment Instalments (including the Balloon Instalment).
 
28.7
Provision of valuations
 
(a)
The Lender shall at such times as the Lender shall deem necessary and, in any event, at least once during each calendar year, following the date of this Agreement, be provided with a valuation of each Ship and any other vessel over which additional Security has been created in accordance with Clause 28.2 (Provision of additional security; prepayment) to determine its Market Value, by an Approved Valuer and on dates to be selected by the Lender, to enable the Lender to determine the Market Value of that Ship or any other vessel and for the purposes of determining the relevant percentage referred to in Clause 27 (Security Cover).
 
(b)
The cost of the valuations referred to in paragraph (a) above, shall be borne by the Borrowers but no more than four times in each calendar year unless an Event of Default has occurred which is continuing in which case the cost of all valuations shall be borne by the Borrowers.
 
28.8
Release of additional security
 
If the Security Cover Ratio set out in Clause 28.1 (Minimum required security cover) shall at the relevant time exceed the percentage required pursuant to Clause 28.1 (Minimum required security cover) and the Borrowers shall have previously provided further security pursuant to this Clause 27 (Security Cover), the Lender, after receiving a notice from the Borrowers to do so (such notice to include evidence, at the cost of the Borrowers, satisfactory to the Lender that the ratio specified in Clause 28.1 (Minimum required security cover) has been maintained (without taking into account the additional security which the Borrowers request to be released) for a period of 60 consecutive days (or a shorter period as the Lender may accept) prior to such notice) will, subject to being indemnified to its satisfaction against the cost of doing so, irrevocably and unconditionally release any such further security specified by the Borrowers to the extent that the relevant ratio shall continue to be at least the percentage required pursuant to Clause 28.1 (Minimum required security cover) at the relevant time following such release provided that at the relevant time no Event of Default has occurred and is continuing or will result from such release.
 
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29
EVENTS OF DEFAULT
 
29.1
General
 
Each of the events or circumstances set out in this Clause 29 (Events of Default) is an Event of Default except for Clause 29.22 (Acceleration) and Clause 29.23 (Enforcement of security).
 
29.2
Non-payment
 
A Transaction Obligor or a Third Party Manager does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless:
 
(a)
its failure to pay is caused by:
 

 (i)
administrative or technical error; or
 

 (ii)
a Disruption Event; and
 
(b)
payment is made within 3 Business Days of its due date or the date of demand.
 
29.3
Specific obligations
 
A breach occurs of Clause 4.5 (Waiver of conditions precedent), 22 (Financial Covenants), Clause 23.10 (Title), Clause 23.11 (Negative pledge), Clause 23.20 (Unlawfulness, invalidity and ranking; Security imperilled), 23.23 (Pledged deposit), 23.29 (No change of CEO), Clause 24.2 (Maintenance of obligatory insurances), Clause 24.3 (Terms of obligatory insurances), Clause 24.5 (Renewal of obligatory insurances) or save to the extent such breach is a failure to pay and therefore subject to Clause 29.2 (Non-payment) and Clause 27 (Security Cover).
 
29.4
Other obligations
 
(a)
A Transaction Obligor or a Third Party Manager does not comply with any provision of the Finance Documents (other than those referred to in Clause 29.2 (Non-payment) and Clause 29.3 (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 10 Business Days of the Lender giving notice to the Borrowers or (if earlier) any Transaction Obligor or any Third Party Manager becoming aware of the failure to comply.
 
29.5
Misrepresentation
 
Any representation or statement made or deemed to be made by a Transaction Obligor or a Third Party Manager 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.
 
29.6
Cross default
 
(a)
Any Financial Indebtedness of any Transaction Obligor is not paid when due nor within any originally applicable grace period.
 
96
(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 Transaction Obligor 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 29.6 (Cross default) in respect of the Guarantor if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs (a) to (d) above is less than in relation to the Guarantor $5,000,000 (or its equivalent in any other currency).
 
29.7
Insolvency
 
(a)
A Transaction Obligor or a Third Party Manager:
 

 (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.
 
29.8
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, seeking bankruptcy protection, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Transaction Obligor or any Third Party Manager;
 

 (ii)
a composition, compromise, assignment or arrangement with any creditor of any Transaction Obligor or any Third Party Manager;
 

 (iii)
the appointment of a liquidator, receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of any Transaction Obligor or any Third Party Manager or any of its assets; or
 
97

 (iv)
enforcement of any Security over any assets of any Transaction Obligor or any Third Party Manager,
 
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.
 
29.9
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 the Ship referred to in Clause 29.14 (Arrest)) and is not discharged within 10 days.
 
29.10
Ownership
 
A Borrower ceases to be 100% directly owned by the Guarantor.
 
29.11
Unlawfulness, invalidity and ranking
 
(a)
It is or becomes unlawful for a Transaction Obligor or a Third Party Manager to perform any of its obligations under the Finance Documents.
 
(b)
Any obligation of a Transaction Obligor a Third Party Manager 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.
 
29.12
Security imperilled
 
Any Security created or intended to be created by a Finance Document is in any way imperilled or in jeopardy.
 
29.13
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.
 
29.14
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 14 days of such arrest or detention.
 
29.15
Expropriation
 
(a)
The authority or ability of any Transaction Obligor or any Third Party Manager 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:
 
98
(b)
an arrest or detention of a Ship referred to in Clause 29.14 (Arrest); or
 
(c)
any Requisition.
 
29.16
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.
 
29.17
Litigation
 
Any litigation, arbitration or administrative, governmental, regulatory or other investigations, proceedings or any investigations of, or before, any court, arbitral body or agency are commenced or threatened, or any judgment or order of a court, arbitral body, agency or tribunal or other tribunal or any order or sanction of any governmental or other regulatory body 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 their assets which if adversely determined:
 
(a)
has a Material Adverse Effect; or
 
(b)
is reasonably likely to have a Material Adverse Effect,
 
unless (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 14 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.
 
29.18
Sanctions
 
(a)
Any Transaction Obligor or any of their respective Subsidiaries, directors, officers or employees or any Third Party Manager or any other member of the Group is designated a Prohibited Person or a Ship is designated a Sanctioned Ship.
 
(b)
This Clause 29.18 (Sanctions) is without prejudice to any other Event of Default which may occur by reason of breach of, or non-compliance with, any of the other provisions of this Agreement which relate to Sanctions.
 
29.19
Material adverse change
 
Any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect.
 
29.20
Termination of Existing Charter
 
An Existing Charter is terminated or rescinded or for any reason ceases to remain in full force and effect prior to its contractual termination date without the prior consent of the Lender.
 
99
29.21
Replacement of Third Party Manager
 
No Event of Default will occur under this Clause 29 (Events of Default) in respect of a Third Party Manager if the Borrowers replace such Third Party Manager by another Approved Manager and deliver to the Lender the documents referred to at paragraph 2.3 of Part B of Schedule 2 (Conditions precedent) within 10 Business Days from the date of such occurrence.
 
29.22
Acceleration
 
On and at any time after the occurrence of an Event of Default which is continuing 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 29.23 (Enforcement of security) if no such notice is served or simultaneously with or at any time after the service of any of such notice.
 
29.23
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 29.22 (Acceleration), the Lender is entitled to take under any Finance Document or any applicable law or regulation.
 
100
SECTION 9
 
CHANGES TO THE PARTIES
 
30
CHANGES TO THE LENDER
 
30.1
Assignment by the Lender
 
Subject to this Clause 30 (Changes to the Lender), the Lender (the "Existing Lender") may assign all (but not part) of its rights under the Finance Documents to another person other than an individual (the "New Lender").
 
30.2
Conditions of assignment
 
(a)
The consent of the Borrowers is required for an assignment by the Existing Lender, unless the assignment is:
 

 (i)
to financial institution or bank which:
 

 (A)
has a dedicated ship finance lending desk and business; and
 

 (B)
is not a trust or fund or pension fund or insurance company or another entity engaged in or established for the purposes of making, purchasing or investing in loans, securities or other financial assets;
 

 (ii)
to an Affiliate of the Existing Lender;
 

 (iii)
if the Existing Lender is a fund, to a fund which is a Related Fund; or
 

 (iv)
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 ten Business Days after the Existing Lender has requested it unless consent is expressly refused by the Borrower within that time.
 
(c)
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.
 
(d)
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 Borrower or any other Transaction Obligor had against the Existing Lender.
 
101
(e)
No costs or expenses in relation to such an assignment or transfer shall be borne by any Transaction Obligor.
 
30.3
Security over Lender's rights
 
In addition to the other rights provided to the Lender under this Clause 30 (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.
 
31
CHANGES TO THE TRANSACTION OBLIGORS
 
31.1
Assignment or transfer by Transaction Obligors
 
No Transaction Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.
 
31.2
Additional Subordinated Creditors
 
(a)
The Borrowers may request that any person becomes a Subordinated Creditor, with the prior approval of the Lender, by delivering to the Lender:
 

 (i)
a duly executed Subordination Deed;
 

 (ii)
a duly executed Subordinated Debt Security; and
 

 (iii)
such constitutional documents, corporate authorisations and other documents and matters as the Lender may reasonably require, in form and substance satisfactory to the Lender, to verify that the person's obligations are legally binding, valid and enforceable and to satisfy any applicable legal and regulatory requirements.
 
102

(b)
A person referred to in paragraph (a) above will become a Subordinated Creditor on the date the Lender enters into the Subordination Deed and the Subordinated Debt Security is delivered under paragraph (a) above.

103
SECTION 10
 
ADMINISTRATION
 
32
PAYMENT MECHANICS
 
32.1
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.
 
32.2
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.
 
32.3
No set-off by Transaction Obligors
 
(a)
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.
 
(b)
Paragraph (a) above shall not affect the operation of any payment or close-out netting in respect of any amounts owing under any Hedging Agreement.
 
32.4
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.
 
32.5
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.
 
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(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.
 
(c)
Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.
 
32.6
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.
 
32.7
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.
 
32.8
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 the Borrowers, 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 32.8 (Disruption to Payment Systems etc.).
 
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33
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.
 
34
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.
 
35
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.
 
36
NOTICES
 
36.1
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 email or letter.

106
36.2
Addresses
 
The address (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 Transaction 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 or department or officer as that Transaction 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.
 
36.3
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, 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 36.2 (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.
 
36.4
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
 

 (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 form of communication or delivery.
 
107
(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 36.4 (Electronic communication).
 
36.5
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.
 
36.6
Hedging Agreement
 
Notwithstanding anything in Clause 1.1 (Definitions), references to the Finance Documents or a Finance Document in this Clause do not include any Hedging Agreement entered into by a Borrower in connection with the Facility.
 
37
CALCULATIONS AND CERTIFICATES
 
37.1
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.
 
37.2
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.

108
37.3
Day count convention and interest calculation
 
Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Market differs, in accordance with that market practice.
 
38
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.
 
39
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.
 
40
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.
 
41
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.
 
42
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.
 
109
43
CONFIDENTIAL INFORMATION
 
43.1
Confidentiality
 
The Lender agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 43.2 (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.
 
43.2
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;
 
(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 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;
 
110

 (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 30.3 (Security over Lender's rights);
 

 (viii)
who is a Party, a member of the Group or any related entity of a Transaction Obligor;
 

 (ix)
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
 

 (x)
with the consent of the Borrowers,
 
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;
 

 (B)
in relation to sub-paragraph (iv) 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.
 
111
43.3
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.
 
43.4
Entire agreement
 
This Clause 43 (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.
 
43.5
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.
 
43.6
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 43.2 (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 43 (Confidential Information).
 
43.7
Continuing obligations
 
The obligations in this Clause 43 (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.
 
44
CONFIDENTIALITY OF FUNDING RATES
 
44.1
Confidentiality and disclosure
 
Each Obligor agrees to keep each Funding Rate confidential and not to disclose it to anyone.
 
112
44.2
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)
Each Obligor agrees (to the extent permitted by law and regulation) to inform the Lender:
 

 (i)
of the circumstances of any disclosure made pursuant to Clause 44.1 (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 44 (Confidentiality of Funding Rates).
 
44.3
No Event of Default
 
No Event of Default will occur under Clause 29.4 (Other obligations) by reason only of an Obligor's failure to comply with this Clause 44 (Confidentiality of Funding Rates).
 
45
AMENDMENTS
 
45.1
Obligor intent
 
Without prejudice to the generality of Clauses 1.2 (Construction), 17.4 (Waiver of defences), 18.2 (Waiver of defences) and 19.4 (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.
 
46
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.
 
113
SECTION 11
 
GOVERNING LAW AND ENFORCEMENT
 
47
GOVERNING LAW
 
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
 
48
ENFORCEMENT
 
48.1
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 48.1 (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.
 
48.2
Service of process
 
(a)
Without prejudice to any other mode of service allowed under any relevant law, each Obligor (and the Obligors shall procure that each other Transaction Obligor, other than a Transaction 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 Transaction 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 Transaction Obligors) must immediately (and in any event within 5 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.

114
SCHEDULE 1
 
THE PARTIES
 
PART A
 
THE OBLIGORS
 
Name of Borrower
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
       
Mei Shipping Co.
 
 
 
 
 
 
Republic of the Marshall Islands
129759
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

115
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
 
Email sgyftakis@seanergy.gr
finance@seanergy.gr
 
Tel.: +30 213 0181507
       
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

116

Name of Guarantor
Place of Incorporation
Registration number
(or equivalent, if any)
 Address for Communication
       
Mei Shipping Co.
 
 
 
 
 
 
Republic of the Marshall Islands
129759
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

117
PART B
 
THE ORIGINAL LENDER
 
Name of Original Lender
  
Address for Communication
     
PIRAEUS BANK S.A.
  
170, Alexandras Avenue
11521 Athens
Greece

For the attention of the manager

Email: shipping@piraeusbank.gr

118
SCHEDULE 2
 
CONDITIONS PRECEDENT
 
PART A
 
CONDITIONS PRECEDENT TO UTILISATION REQUEST
 

1
Obligors
 
1.1
A copy of the constitutional documents of each Obligor.
 
1.2
A copy of a resolution of the board of directors of each Obligor (in the case of the Guarantor a certified copy of such resolutions) (original to follow within 30 days from the Utilisation Date):
 
(a)
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;
 
(b)
authorising a specified person or persons to execute the Finance 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 despatch all documents and notices (including, if relevant, the Utilisation Request and each Selection Notice) to be signed and/or despatched by it under, or in connection with, the Finance Documents to which it is a party.
 
1.3
A copy 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 (original to follow within 30 days from the Utilisation Date).
 
1.4
A specimen of the signature or copy of the passport of the person(s) authorised by the resolution referred to in paragraph 1.2 above and who will sign the Finance Documents.
 
1.5
A copy of a resolution signed by the holder(s) of the issued shares in each Obligor, approving the terms of, and the transactions contemplated by, the Finance Documents to which that Transaction Obligor is a party.
 
1.6
Copies of up-to-date certificates of goodstanding in respect of each Obligor.
 
1.7
A copy of a 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 (original to follow within 30 days from the Utilisation Date).
 
1.8
A copy of a certificate of each Obligor 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 (original to follow within 30 days from the Utilisation Date).
 
119
1.9
A copy of a certificate of an authorised signatory of the relevant Obligor confirming the names and offices of all the directors of that Obligor and 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 and as at the Utilisation Date (as applicable) (original to follow within 30 days from the Utilisation Date).
 
1.10
Copies of up-to-date certificates of goodstanding and certificate of establishment in Greece (if applicable) in respect of any Approved Manager which is not a Third Party Manager.
 
2
MOA and other documents
 
2.1
Copies of the MOA and of all documents signed or issued by the Guarantor, Borrower C or the Seller (or both of them) under or in connection with it.
 
2.2
Such documentary evidence as the Lender and its legal advisers may require in relation to the due authorisation and execution of the MOA by the Guarantor, Borrower C and the Seller.
 
3
Finance Documents
 
3.1
If applicable, duly executed original of the Subordination Deed and copies of each Subordinated Finance Document.
 
3.2
A duly executed original of any Finance Document not otherwise referred to in this Schedule 2 (Conditions Precedent).
 
3.3
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).
 
4
Security Documents
 
4.1
A duly executed original of each Account Security and each Shares Security (and of each document to be delivered under each of them).
 
4.2
A duly executed original of the Subordinated Debt Security.
 
5
Legal opinions
 
5.1
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.
 
5.2
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, substantially in the form obtained by the Lender before signing this Agreement.
 
5.3
A legal opinion of the legal advisers to the Lender in the jurisdiction of the Approved Flag in which a Ship is registered, the jurisdiction of each Account and such other relevant jurisdictions as the Lender may require, substantially in the form obtained before signing this Agreement.
 
6
Other documents and evidence
 
6.1
A valuation of each Ship, at the Borrowers' cost, addressed to the Lender, stated to be for the purposes of this Agreement and dated not earlier than 30 days before the Utilisation Date from an Approved Valuer which shows that the amount of the Loan to be advanced complies with Clause 5.3 (Currency and amount).
 
120
6.2
A copy of each Existing Charter (and any Assignable Charter in relation to Ship C, if applicable) duly executed by the parties thereto and of each document delivered pursuant to it, together with such documentary evidence as the Lender and its legal advisers may require in relation to the due authorisation and execution of each Existing Charter (or, as the case may be, Assignable Charter, in the case of Ship C) by each of the parties thereto.
 
6.3
Evidence that any process agent referred to in Clause 48.2 (Service of process), if not a Transaction Obligor, has accepted its appointment.
 
6.4
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.
 
6.5
The original of any mandates or other documents required in connection with the opening or operation of each Account and Safekeeping Securities Account(s).
 
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 Utilisation Date.
 
6.7
Such evidence as the Lender may require, prior to the execution of this Agreement, for it to be able to satisfy its "know your customer" or similar identification procedures in relation to the transactions contemplated by the Finance Documents.
 
6.8
Copies of the Original Financial Statements.

121
PART B
 
CONDITIONS PRECEDENT TO PREPOSITIONING OF FUNDS
 
1
Obligors
 
A copy of certificate of an authorised signatory of the relevant Obligor 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 (original certificate to follow within 30 days from the Utilisation Date).
 
2
Ship and other security
 
2.1
A duly executed original of each General Assignment, each Charterparty Assignment in respect of the relevant Existing Charter, each Manager's Undertaking and of each document to be delivered under or pursuant to each of them in respect of each Ship (other than Ship C).
 
2.2
Documentary evidence that each Ship (other than Ship C):
 
(a)
is permanently registered in the name of the relevant Borrower under an Approved Flag;
 
(b)
is in the absolute and unencumbered ownership of the Borrower owning that Ship, save as contemplated by the existing mortgage(s) over that Ship registered in favour of the Lender pursuant to the Existing Facility Agreement as security for the Existing Indebtedness;
 
(c)
maintains the relevant Approved Classification with the relevant Approved Classification Society free of all overdue recommendations and conditions of the Approved Classification Society.
 
(d)
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 each Ship (other than Ship C) is managed commercially and technically by the Approved Manager on terms acceptable to the Lender, together with copies of:
 
(a)
the Approved Technical Manager's Document of Compliance;
 
(b)
that 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 each Ship including without limitation an ISSC; and
 
(c)
any other trading certificates and evidence in respect of the lightweight of each Ship.
 
3
Other documents and evidence
 
3.1
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.
 
122

3.2
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 any Transaction Document or for the validity and enforceability of any Transaction Document not previously supplied.

123
PART C
 
CONDITIONS PRECEDENT TO THE RELEASE OF PREPOSITIONED FUNDS
 
1
Obligors
 
A copy of certificate of an authorised signatory of the relevant Obligor certifying that each copy document which it is required to provide under this Part C of Schedule 2 (Conditions Precedent) is correct, complete and in full force and effect as at the Delivery Date (original certificate to follow within 30 days from the Utilisation Date).
 
2
Ship and other security
 
2.1
A duly executed original of each Mortgage in relation each Ship together with documentary evidence that such Mortgage has been duly registered or recorded (as the case may be) as a valid first preferred or priority (as the case may be) ship mortgage in accordance with the laws of the jurisdiction of its Approved Flag.
 
2.2
Documentary evidence that:
 
(a)
Ship C has been unconditionally delivered by the Seller to, and accepted by, Borrower C under the MOA and that the full purchase price payable and all other sums due to the Seller under the MOA, other than the sums to be financed pursuant to Tranche B, have been paid to the Seller;
 
(b)
Ship C is provisionally registered in the name of Borrower C under its Approved Flag;
 
(c)
each Ship is in the absolute and unencumbered ownership of the Borrower owning that Ship save as contemplated by the Finance Documents;
 
(d)
Ship C maintains the Approved Classification with the Approved Classification Society free of all overdue recommendations and conditions of the Approved Classification Society; and
 
(e)
Ship C 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 Ship C is managed commercially by its Approved Commercial Manager and technically by its Approved Technical Manager respectively on terms acceptable to the Lender, together with copies of:
 
(a)
the Approved Technical Manager's Document of Compliance;
 
(b)
Ship C'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 Ship C including without limitation an ISSC; and
 
(c)
any other trading certificates and evidence in respect of the lightweight of Ship C.
 
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.
 
124
3
Legal opinions
 
Legal opinions of the legal advisers to the Lender in the jurisdiction of the Approved Flag of each Ship and such other relevant jurisdictions as the Lender may require.
 
4
Other documents and evidence
 
4.1
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.
 
4.2
Evidence satisfactory to the Lender that the Pledged Deposit is standing to the credit of the Pledged Deposit Account in accordance with Clause 23.23 (Pledged deposit).
 
4.3
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 not previously supplied.
 
4.4
A copy of the relevant invoice from the Seller to be provided by the Seller to Borrower C pursuant to the MOA.
 
4.5
Evidence that any part of the Purchase Price which is not being financed under the Loan has been paid by Borrower C to the Seller pursuant to the MOA or will be paid together with the Loan.
 
4.6
Evidence that upon the Delivery Date, all sums then due (if any) to the Lender in respect of the Existing Indebtedness, other than the sums financed pursuant to Tranche A, have been paid in full to the Lender.

125
SCHEDULE 3
 
REQUESTS
 
PART A
 
UTILISATION REQUEST
 
From:
WORLD SHIPPING CO.
Trust Company Complex, Ajeltake Road
Ajeltake Island, Majuro
Marshall Islands MH 96960

HONOR SHIPPING CO.
Trust Company Complex, Ajeltake Road
Ajeltake Island, Majuro
Marshall Islands MH 96960

and

MEI SHIPPING CO.
Trust Company Complex, Ajeltake Road
Ajeltake Island, Majuro
Marshall Islands MH 96960
as Borrowers
 
To:
PIRAEUS BANK S.A.
170, Alexandras Avenue
11521 Athens
Greece
 
as Lender
 
Attention: Loans Administration

Dated: [●] 2025
 
Dear Sirs
 
World Shipping Co., Honor Shipping Co. and Mei Shipping Co. - $53,560,000 Facility Agreement dated [●] 2025 (the "Agreement")
 
1
We refer to the Agreement. This is the 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 Loan on the following terms:
 
 
Proposed Utilisation Date:
[●] 2025 (or, if that is not a Business Day, the next Business Day)
 
Amount
  
 
Tranche A:
$[●]
 
Tranche B:
$[●]
 
Interest Period:
[1][3][6] Months
   

 

126
3
We confirm that each condition specified in Clause 4.1 (Initial conditions precedent) and Clause 4.2 (Further conditions precedent) of the Agreement is satisfied on the date of this Utilisation Request.
 
4
The proceeds of the Loan should be applied as follows:
 
(a)
[the amount of $[●] shall be credited in the Pledged Deposit Account in satisfaction of our obligation under Clause 23.23 (Pledged deposit) of the Agreement;]
 
(b)
[the amount of $[●] corresponding to the transaction fee shall be paid to the Lender in satisfaction of the Borrowers' obligation under Clause 11.1 (Transaction fee) of the Agreement;]
 
(c)
the balance of Tranche A being $[●] shall be credited to [insert relevant account details]; and
 
(d)
the balance of Tranche B being $$[●] shall be credited to [insert account details of the Seller].
 
5
We further confirm no part of the proceeds of the Loan shall be used for the purpose of acquiring shares in the share capital of the Lender or other banks and/or financial institutions or acquiring hybrid capital debentures of the Lender or other banks and/or financial institutions.
 
6
This Utilisation Request is irrevocable.

Yours faithfully

 
authorised signatory for
WORLD SHIPPING CO.

 
authorised signatory for
HONOR SHIPPING CO.
   
authorised signatory for
MEI SHIPPING CO.

127
PART B
 
SELECTION NOTICE
 
From:
WORLD SHIPPING CO.
Trust Company Complex, Ajeltake Road
Ajeltake Island, Majuro
Marshall Islands MH 96960
 
HONOR SHIPPING CO.
Trust Company Complex, Ajeltake Road
Ajeltake Island, Majuro
Marshall Islands MH 96960
 
and
 
MEI SHIPPING CO.
Trust Company Complex, Ajeltake Road
Ajeltake Island, Majuro
Marshall Islands MH 96960
 
as Borrowers
 
To:
PIRAEUS BANK S.A.
170, Alexandras Avenue
11521 Athens
Greece
 
as Lender
 
Dated: [●]
 
Dear Sirs

World Shipping Co., Honor Shipping Co. and Mei Shipping Co. - $53,560,000 Facility Agreement dated [●] 2025 (the "Agreement")
 
1
We refer to the Agreement. This is a Selection Notice. Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice.
 
2
We request that, subject to paragraph (f) of Clause 9.1 (Selection of Interest Periods) of the Agreement, the next Interest Period for the Loan be [1][3][6] Months.
 
3
This Selection Notice is irrevocable.

Yours faithfully
  

 
authorised signatory for
WORLD SHIPPING CO.

128

  
authorised signatory for
HONOR SHIPPING CO.

 
authorised signatory for
MEI SHIPPING CO.

129
SCHEDULE 4
 
TIMETABLES
 
Delivery of a duly completed Utilisation Request (Clause 5.1 (Delivery of the Utilisation Request)) or a Selection Notice (Clause 9.1 (Selection of Interest Periods))
Two Business Days before the intended Utilisation Date (Clause 5.1 (Delivery of the Utilisation Request)) or the expiry of the preceding Interest Period (Clause 9.1 (Selection of Interest Periods))



Reference Rate is fixed
Quotation Day

130
SCHEDULE 5
 
FORM OF COMPLIANCE CERTIFICATE
 
To:         PIRAEUS BANK S.A.
170, Alexandras Avenue
11521 Athens
Greece
 
as Lender
 
From:    Seanergy Maritime Holdings Corp.

Dated: [●]
 
Dear Sirs
 
World Shipping Co., Honor Shipping Co. and Mei Shipping Co. - $53,560,000 Facility Agreement dated [●] 2025 (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:
 
(a)
the Cash is $[●]; and
 
(b)
the Leverage Ratio is [●] per cent.
 
3
We confirm that no Default is continuing.
 
Signed:
 
  

Officer of
SEANERGY MARITIME HOLDINGS CORP.

131
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: )
Witness' name:     Ilias Theocharis
) /s/ Ilias Theocharis
Witness' address: ATTORNEY-AT-LAW )
WATSON FARLEY & WILLIAMS GREECE
348 SYNGROU AVENUE
KALLITHEA 176 74
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/ Ilias Theocharis
Witness' name:     Ilias Theocharis )
Witness' address: ATTORNEY-AT-LAW
)
WATSON FARLEY & WILLIAMS GREECE
348 SYNGROU AVENUE
KALLITHEA 176 74
ATHENS – GREECE

SIGNED by Stavros Gyftakis )
as attorney-in-fact
) /s/ Stavros Gyftakis
for and on behalf of )
MEI SHIPPING CO. )
in the presence of:
)

Witness' signature:
) /s/ Ilias Theocharis
Witness' name:     Ilias Theocharis )
Witness' address: ATTORNEY-AT-LAW )
WATSON FARLEY & WILLIAMS GREECE
348 SYNGROU AVENUE
KALLITHEA 176 74
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:
)

132

Witness' signature: )
Witness' name:     Ilias Theocharis
) /s/ Ilias Theocharis
Witness' address: ATTORNEY-AT-LAW )
WATSON FARLEY & WILLIAMS GREECE
348 SYNGROU AVENUE
KALLITHEA 176 74
ATHENS – GREECE

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/ Ilias Theocharis
Witness' name:     Ilias Theocharis )
Witness' address: ATTORNEY-AT-LAW
)
WATSON FARLEY & WILLIAMS GREECE
348 SYNGROU AVENUE
KALLITHEA 176 74
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/ Ilias Theocharis
Witness' name:     Ilias Theocharis )
Witness' address: ATTORNEY-AT-LAW )
WATSON FARLEY & WILLIAMS GREECE
348 SYNGROU AVENUE
KALLITHEA 176 74
ATHENS – GREECE

SIGNED by Stavros Gyftakis )
as attorney-in-fact
) /s/ Stavros Gyftakis
for and on behalf of )
MEI SHIPPING CO.
 )
in the presence of:
)
 
Witness' signature:
) /s/ Ilias Theocharis
Witness' name:     Ilias Theocharis )
Witness' address: ATTORNEY-AT-LAW )
WATSON FARLEY & WILLIAMS GREECE
348 SYNGROU AVENUE
KALLITHEA 176 74
ATHENS – GREECE

133
ORIGINAL LENDER

SIGNED by Konstantinos Petropoulos
 )
/s/ Konstantinos Petropoulos
and by Maria Stamatiou
 )
/s/ Maria Stamatiou
duly authorised
 )
for and on behalf of
 )
PIRAEUS BANK S.A.
 )
in the presence of: )

Witness' signature:
) /s/ Ilias Theocharis
Witness' name:     Ilias Theocharis )
Witness' address: ATTORNEY-AT-LAW )
WATSON FARLEY & WILLIAMS GREECE
348 SYNGROU AVENUE
KALLITHEA 176 74
ATHENS – GREECE


134
EX-4.46 19 ef20039029_ex4-46.htm EXHIBIT 4.46
Exhibit 4.46

1.        Shipbroker
2.        Place and date
 
  13 March 2025
3.        Owners/Place of business (Cl. 1)

INSIGHT 22 HOLDING LIMITED

a company incorporated under the laws of Hong Kong with business registration number 76450657 whose registered office is at 6/F., Manulife Place, 348 Kwun Tong Road, Kowloon, Hong Kong, registered as Foreign Maritime Entity in the Republic of Liberia with registration number F-918983 (The “Owners” which expression includes its successors and assigns)
4.        Bareboat Charterers/Place of business (Cl. 1)

SQUIRE OCEAN NAVIGATION CO.

a corporation incorporated and validly existing under the laws of the Republic of Liberia with registration number C-118162 whose registered address is at 80 Broad Street, Monrovia, Republic of Liberia
5.        Vessel’s name, call sign and flag (Cl. 1 and 3)

Vessel's name: Squireship

Call sign: D5JW7

Flag: The Republic of Liberia
6.        Type of Vessel

Bulk Carrier (Capesize)
7.        GT/NT

GT: 88479

 T: 56828
8         When/Where built

2010

Sungdong Shipbuilding & Marine Eng. Co Ltd/Sungdong
9.        Total DWT (abt.) in metric tons on summer freeboard

170,018
10.      Classificaton Society (Cl. 3)

BV
11.      Date of last special survey by the Vessel’s classificaton society

N/A
12.      Further partculars of Vessel (also indicate minimum number of months’ validity of class certficates agreed acc. to Cl. 3)

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.
13.      Port or Place of delivery (Cl. 3)

Back to back delivery under the MOA
14.    Time for delivery (Cl. 4)

SEE CLAUSE 34
(Delivery of Vessel)
15.     Cancelling date (Cl. 5)

SEE CLAUSE 33
(Cancellation)
16.      Port or Place of redelivery (Cl. 15)

SEE CLAUSE 40.5
17.      No. of months' validity of trading and class certficates upon redelivery (Cl. 15)

SEE CLAUSE 40.5
18.      Running days’ notce if other than stated in Cl. 4

N/A
19.      Frequency of dry-docking (Cl. 10(g))

SEE CLAUSE 10(g)
20.      Trading limits (Cl. 6)

Worldwide within International Navigating Limits, please also see clauses 46.1(r), 46.1(s), 46.1 (ee), 46.1(ff) (Charterers' Undertakings)
21.      Charter period (Cl. 2)

SEE CLAUSE 32 (Charter Period)
22.     Charter hire (Cl. 11)

SEE CLAUSE 36 (Charterhire)
23.      New class and other safety requirements (state percentage of Vessel's insurance value acc. to Box 29)(Cl. 10(a)(ii))

SEE CLAUSE 38 (Insurance)
24.      Rate of interest payable acc. to Cl. 11 (f) and, if applicable, acc. to PART IV

SEE CLAUSE 36 (Charterhire)
25.     Currency and method of payment (Cl. 11)

USD/BANK TRANSFER
26.      Place of payment; also state beneficiary and bank account (Cl. 11)

Such account as the Owners may notify the Charterers from time to time
27.      Corporate guarantee (Cl. 24) (optonal)

SEE CLAUSE 24 (Corporate Guarantee)
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 CLAUSES 12(b) and 58 (Changes to the Parties)
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 38 (Insurance)- CLAUSE 14 DOES NOT APPLY
30.      Additonal insurance cover, if any, for Owners’ account limited to (Cl. 13(b) or, if applicable, Cl. 14(g))

SEE CLAUSE 38 (Insurance)
31.      Additonal insurance cover, if any, for Charterers’ account limited to (Cl. 13(b) or, if applicable, Cl. 14(g))

SEE CLAUSE 38 (Insurance)
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

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 Resoluton (state 30(a), 30(b) or 30(c); if 30(c) agreed Place of Arbitraton must be stated (Cl. 30)

SEE CLAUSE 30 (Dispute Resolution)
36.      War cancellaton (indicate countries agreed) (Cl. 26(f))

N/A
37.      Newbuilding Vessel (indicate with “yes” or “no” whether PART III applies) (optonal)

No, Part III does not apply
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)

(c)
42.      Hire/Purchase agreement (indicate with “yes” or “no” whether PART IV applies) (optonal)

NO, PART IV DOES NOT APPLY
43.     Bareboat Charter Registry (indicate with “yes” or “no” whether PART V applies) (optonal)

NO, PART V DOES NOT APPLY
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 additonal clauses covering special provisions, if agreed

CLAUSE 32 (Charter Period) TO CLAUSE 61 (Definitions) AND SCHEDULE 1 TO SCHEDULE 2
 
PREAMBLE - It is mutually agreed that this Contract shall be performed subject to the conditons contained in this Charter which shall include PART I and PART II and the Additonal Clauses. In the event of a conflict of conditons, the provisions of the Additonal Clauses shall prevail over the provisions of PART I and 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 conditons, 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)
  
Signature (Charterers)

/s/ Mao Yufei
MAO Yufei
Director
  
/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.
PART II
1 1. Definitions
 
2
In this Charter capitalised terms not otherwise defined herein have the meaning given to them in the Additional Clauses and, the following terms shall have the meanings hereby assigned to them:
 
"Additional Clauses" means Clause 32 (Charter Period) to Clause 61 (Definitions) appended to this Charter;
 
3
“The Owners” shall mean the party identified in Box 3;
 
4
“The Charterers” shall mean the party identified in Box 4;
 
5
“The Vessel” shall mean the vessel named in Box 5 and with particulars as stated in Boxes 6 to 12.
 
 
8
2. Charter Period
 
9
In consideration of the hire detailed in Box 22, the Owners have agreed to let and the Charterers have agreed to
10
hire the Vessel for the period stated in Box 21 (“The Charter Period”). See also Clause 32 (Charter Period).
 
11 3. Delivery
 
12
(not applicable when Part III applies, as indicated in Box 37)
 
 
15
The Vessel shall be delivered by the Owners and taken over by the Charterers at the port or place indicated in
16
Box 13.
 
17  
(b)
The Vessel shall be properly documented on delivery in accordance with the laws of the flag state indicated in
18
Box 5 and the requirements of the classification society stated in Box 10.
 
21
(c)
The delivery of the Vessel by the Owners and the taking over of the Vessel by the Charterers shall constitute a
22
full performance by the Owners of all the Owners’ obligations under this Clause 3, and thereafter the Charterers
23
shall not be entitled to make or assert any claim against the Owners on account of any conditions,
 
24
representations or warranties expressed or implied with respect to the Vessel
.
 
28
4. Time for Delivery  (See Clause 34 (Delivery of Vessel))
 
 
 
 
36
5. Cancelling (See Clause 33 (Cancellation))
 

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
 
 
 
50
6. Trading Restrictions
 
51
The Vessel shall be employed in lawful trades for the carriage of suitable lawful merchandise operation within the trading
52
limits indicated in Box 20.
 
53
The Charterers undertake not to employ the Vessel or suffer the Vessel to be employed otherwise than in
54
conformity with the terms of the contracts of insurance (including any warranties expressed or implied therein)
55
without first obtaining the consent of the insurers to such employment and complying with such requirements
56
as to extra premium or otherwise as the insurers may prescribe.
 
57
The Charterers also undertake not to employ the Vessel or suffer her employment in any trade or business which
58
is forbidden by the law of any country to which the Vessel may sail or is otherwise illicit or in carrying illicit or
59
prohibited goods or in any manner whatsoever which may render her liable to condemnation, destruction,
60
seizure or confiscation.
 
61
Notwithstanding any other provisions contained in this Charter it is agreed that nuclear fuels or radioactive
62
products or waste are specifically excluded from the cargo permitted to be loaded or carried under this Charter.
63
This exclusion does not apply to radio-isotopes used or intended to be used for any industrial, commercial,
64
agricultural, medical or scientific purposes provided the Owners’ prior approval has been obtained to loading
65
thereof.
 
66 7. Surveys  Redelivery
 
67
 
68
The Owners  shall be entitled to  appoint surveyors or the Charterers shall be entitled to appoint surveyors (subject to such appointment being accepted in writing by the Owners) for the purpose of determining and agreeing in writing
69
the condition of the Vessel at the time of  redelivery pursuant to Clause 40 (with the relevant costs paid by the Charterers).
 
72
8. Inspection (See Clause 46(A) (Inspection of Vessel))
 
74
 
 

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
 
 
 
 
88 9. Inventories, Oil and Stores
 
89
A complete inventory of the Vessel’s entire equipment, outfit including spare parts, appliances and of all
90
consumable stores on board the Vessel shall be made by the Charterers in conjunction with the Owners on
91
delivery and again on redelivery  (if applicable) of the Vessel. The Charterers ti shall at the time of
92
delivery take over  all bunkers, lubricating oil, unbroached provisions, paints, ropes
93
and other consumable stores (excluding spare parts) in the said Vessel at the then current market prices at the
94
ports of delivery. The Charterers shall ensure that all spare parts listed in the
95
inventory and used during the Charter Period are replaced at their expense prior to redelivery  (if applicable) of the Vessel.
 
96
10.  Maintenance and Operation
 
97 (a) (i) Maintenance and Repairs - During the Charter Period the Vessel shall be in the full possession and at the
98
absolute disposal for all purposes of the Charterers and under their complete control in every respect. The
99
Charterers shall maintain the Vessel, her machinery, boilers, appurtenances and spare parts in a good state of
100
repair, in efficient operating condition and in accordance with good commercial maintenance practice and,
101
 if applicable, at their own expense they shall at all times keep the Vessel’s
102
 classification fully up to date with the Classification Society indicated in Box 10 and maintain all other necessary
103
certificates in force at all times.
 
104
(ii) New Class and Other Safety Requirements - In the event of any improvement, structural changes or new
105
equipment becoming necessary for the continued operation of the Vessel by reason of new class requirements or by compulsory legislation, the Charterers shall ensure that the same are complied with and the time and cost of compliance shall be on the Charterers' account. 
 
 
112
(iii) Financial Security - The Charterers shall maintain financial security or responsibility in respect of third party
113
liabilities as required by any government, including federal, state or municipal or other division or authority
114
thereof, to enable the Vessel, without penalty or charge, lawfully to enter, remain at, or leave any port, place,
115
territorial or contiguous waters of any country, state or municipality in performance of this Charter without any
116
delay. This obligation shall apply whether or not such requirements have been lawfully imposed by such
117
government or division or authority thereof.
 
118
The Charterers shall make and maintain all arrangements by bond or otherwise as may be necessary to satisfy
119
such requirements at the Charterers’ sole expense and the Charterers shall indemnify the Owners against all

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
120
consequences whatsoever (including loss of time) for any failure or inability to do so.
 
121 (b) Operation of the Vessel - The Charterers shall at their own expense and by their own procurement man, victual,
122
navigate, operate, supply, fuel and, whenever required, repair the Vessel during the Charter Period and they
123
shall pay all charges and expenses of every kind and nature whatsoever incidental to their use and operation of
124
the Vessel under this Charter, including annual flag state fees and any foreign general municipality and/or state
125
taxes. The Master, officers and crew of the Vessel shall be the servants of the Charterers for all purposes
126
whatsoever, even if for any reason appointed by the Owners.
 
127
Charterers shall comply with the regulations regarding officers and crew in force in the country of the Vessel’s
128
flag or any other applicable law.
 
129 (c) The Charterers shall keep the Owners and  any mortgagee(s) advised of the intended employment, planned dry-
130
docking and major repairs of the Vessel, as reasonably required.
 
131 (d)
Flag and Name of Vessel – During the Charter Period, the Charterers shall have the liberty to paint the Vessel in
132
their own colours, install and display their funnel insignia and fly their own house flag. The Charterers shall also
133
have the liberty, with the Owners’ consent, and which, subject to Clause 41.4, shall be granted in the case of a Flag State, to change the flag and/or
134
the name of the Vessel during the Charter Period. Painting and re-painting, instalment and re-instalment,
 
135
registration and re-registration,  shall be at the Charterers’ expense and time. The Charterers shall also have the liberty, with the Owners' consent, which shall not be unreasonably withheld, to change the classification society (to be a member of International Association of Classification Societies) during the Charter Period and such expense shall be for Charterers' account.
 
136
(e)
Changes to the Vessel – Subject to Clause 10(a)(ii), the Charterers shall make no structural changes in the Vessel
137
or changes in the machinery, boilers, appurtenances or spare parts thereof without in each instance first securing
138
the Owners’ approval thereof. The Charterers shall, if the Owners so require, restore the
139
Vessel to its former condition
 
140 (f) Use of the Vessel’s Outfit, Equipment and Appliances - The Charterers shall have the use of all outfit, equipment,
141
and appliances on board the Vessel at the time of delivery, provided the same or their substantial equivalent
142
shall be returned to the Owners on redelivery in the same good order and condition as when received, ordinary
143
wear and tear excepted. The Charterers shall from time to time during the Charter Period replace such items of
144
equipment as shall be so damaged or worn as to be unfit for use. The Charterers are to procure that all repairs
145
to or replacement of any damaged, worn or lost parts or equipment be effected in such manner (both as regards
146
workmanship and quality of materials) as not to diminish the value of the Vessel. Title of any equipment so replaced shall, unless agreed between the Owners and the Charterers, remain with the Owners. The Charterers have the right
147
to fit additional equipment at their expense and risk (provided that no permanent structural damage is caused to the Vessel by reason of such installation) and the Charterers shall at their expenses remove such equipment and make good any damage caused by the fitting or removal of such additional equipment
148
 if requested by the Owners at the time of redelivery of the Vessel. Any equipment including radio equipment on hire on the Vessel at
149
time of delivery shall be kept and maintained by the Charterers and the Charterers shall assume the obligations
150
and liabilities of the Owners under any lease contracts in connection therewith and shall reimburse the Owners
151
for all expenses incurred in connection therewith, also for any new equipment required in order to comply with
152
radio regulations.
 
153 (g)
Periodical Dry-Docking - The Charterers shall dry-dock the Vessel and clean and paint her underwater parts
154
whenever the same may be necessary in accordance with Classification Society of Flag State requirements. 

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
157
11.  Hire (See Clause 36 (Charterhire))
 
 
 
 
 
 
 
 
 
180
12.  Mortgage
 
 
 
 
184
(b)* The Vessel chartered under this Charter may be financed by a mortgage(s) according to the Financial Instruments.
 
185
The Charterers undertake to comply, and provide such information and documents to enable the Owners to
186
comply, with all such instructions or directions in regard to the employment, insurances, operation, repairs and
187
maintenance of the Vessel as laid down in the Financial Instruments or as may be directed from time to time
188
during the currency of the Charter by the mortgagee(s) in conformity with each Financial Instrument (if any) as long as the requested information and documents are reasonably required. The
189
Charterers
 agree to acknowledge each Financial Instrument (if any)  in writing in any form that may be reasonably
191
required by the mortgagee(s). 
 
 
195
13.  Insurance and Repairs(See also Clause 38)

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PART II
196
(a)
Without prejudice to Clause 38 (Insurance), during the Charter Period the Vessel shall be kept insured by the Charterers at their expense against hull and
197
machinery, war and Protection and Indemnity risks (and any risks against which it is compulsory to insure for the
198
operation of the Vessel, including but not limited to maintaining financial security in accordance with sub-clause 10(a)(iii)) in such
199
form as the Owners shall in writing approve, which approval shall not be unreasonably withheld. Such insurances
200
shall be arranged by the Charterers to protect the interests of both the Owners and the Charterers and the
201
 Owners’ Financier (if any), and the Charterers shall be at liberty to protect under such insurances the interests of any
202
managers they may appoint. Insurance policies shall cover the Owners and the Charterers according to their
203
respective interests.
 
204
Subject to the provisions of the agreed loss payable clauses,  and the approval of the Owners and the insurers,
205
the Charterers shall effect all insured repairs and shall undertake settlement and reimbursement from the
206
insurers of all costs in connection with such repairs as well as insured charges, expenses and liabilities to the
207
extent of coverage under the insurances herein provided for.
 
208
The Charterers also to remain responsible for and to effect repairs and settlement of costs and expenses incurred
209
thereby in respect of all other repairs not covered by the insurances and/or not exceeding any possible
210
franchise(s) or deductibles provided for in the insurances.
 
211
All time used for repairs under the provisions of sub-clause 13(a) and for repairs of latent defects according to
212
Clause 3(c) above, including any deviation, shall be for the Charterers’ account.
 
213
(b)
 
 
 The  Charterers
215
 shall timely  furnish the Owners with particulars of any additional insurance effected,
 
216
including copies of any cover notes or policies and the written consent of the insurers of any such required
217
insurance in any case where the consent of such insurers is necessary.
 
218
(c)
The Charterers shall upon the request of the Owners, provide information and promptly execute such documents
219
as may be required to enable the Owners to comply with the insurance provisions of each Financial Instrument (if any).
 
220
(d)
Should the Vessel become
 a tTotal Lloss under the insurances required under sub-clause 13(a), all insurance payments
222
for such loss shall be paid to the Owners  (or if applicable, Owners’ Financier) in accordance with the agreed loss payable clauses, who shall distribute the moneys between the Owners and the Charterers
223
according to this Charter. The Charterers undertake to notify the Owners and the Owners’ Financier 
, of any occurrences in consequence of which the Vessel is likely to become a Ttotal Lloss
.


 
228
(f)
For the purpose of insurance coverage against hull and machinery and war risks under the provisions of sub-
229
clause 13(a), the value of the Vessel is the sum indicated in Clause 38 (Insurance).
 
 
 

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PART II
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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
 
277
15.    Redelivery - See Clause 40 (Termination, Redelivery, and Total Loss)
 
 
 
 
 
 
 
295
16.    Non-Lien
 
296
The Charterers will not suffer, nor permit to be continued, any lien or encumbrance incurred by them or their
297
agents, which might have priority over the title and interest of the Owners in the Vessel (except for Permitted Security Interests). The Charterers further
298
agree to fasten to the Vessel in a conspicuous place and to keep so fastened during the Charter Period a notice
299
reading as follows:
300
“This Vessel is the property of (name of Owners). It is under charter to (name of Charterers) and by the terms of
301
the Charter Party neither the Charterers nor the Master have any right, power or authority to create, incur or
302
permit to be imposed on the Vessel any lien.”
 
303
17.    Indemnity (See Clause 50 (Indemnities))
 
308

 
 
 

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PART II
317
18.  Lien
 
318
The Owners to have a lien upon all cargoes, sub-hires and sub-freights belonging or due to the Charterers or any
319
sub-charterers and any Bill of Lading freight for all claims under this Charter
.
 
321
19.  Salvage
 
322
All salvage and towage performed by the Vessel shall be for the Charterers’ benefit and the cost of repairing
323
damage occasioned thereby shall be borne by the Charterers.
 
324
20.  Wreck Removal
 
325
In the event of the Vessel becoming a wreck or obstruction to navigation the Charterers shall indemnify the
326
Owners against any sums whatsoever which the Owners shall become liable to pay and shall pay in consequence
327
of the Vessel becoming a wreck or obstruction to navigation.
 
328
21.  General Average
 
329
The Owners shall not contribute to General Average.
 
330
22.  Assignment, Sub-Charter and Sale (See Clause 58 (Changes to the Parties))
 
 
 
 
337
23.  Contracts of Carriage
 
338
(a)* The Charterers are to procure that all documents issued during the Charter Period evidencing the terms and
339
conditions agreed in respect of carriage of goods shall contain a paramount clause incorporating any legislation
340
relating to carrier’s liability for cargo compulsorily applicable in the trade; if no such legislation exists, the
341
documents shall incorporate the Hague-Visby Rules. The documents shall also contain the New Jason Clause and
342
the Both-to-Blame Collision Clause.
 
 
344
 
348
*Delete as applicable.
 
349
24.  Corporate Guarantee
 
350
 
351
The Charterers undertake to furnish, on or about the date of this Charter    corporate guarantees from the Guarantor 
 as guarantee and the other Security Documents at Delivery for full performance of their obligations under this
353
Charter.
 
354
25.  Requisition/Acquisition
 
355 
(a)
Subject to the provisions of the Financial Instruments (if any), Iin the event of the Requisition for Hire of the Vessel by any governmental or other competent authority

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PART II
356
(hereinafter referred to as “Requisition for Hire”) irrespective of the date during the Charter Period when
357
“Requisition for Hire” may occur and irrespective of the length thereof and whether or not it be for an indefinite
358
or a limited period of time, and irrespective of whether it may or will remain in force for the remainder of the
359
Charter Period, this Charter shall not be deemed thereby or thereupon to be frustrated or otherwise terminated
360
and the Charterers shall continue to pay the stipulated hire in the manner provided by this Charter until the time
361
when the Charter would have terminated pursuant to any of the provisions hereof always provided however that if all hire has been paid by the Charterers hereunder then
362
in the event of “Requisition for Hire” any Requisition Hire or compensation is received or receivable by the Owners, the same
363
shall be payable to the Charterers during the remainder of the Charter Period or the period of the “Requisition
364
for Hire” whichever be the shorter.
 
 
 
370
 
371
26.  War
 
372 (a) Subject to the provisions of the Financial Instruments (if any), for the purpose of this clause, the words “War Risks” shall include any war (whether actual or threatened), act
373
of war, civil war, hostilities, revolution, rebellion, civil commotion, warlike operations, the laying of mines
374
(whether actual or reported), acts of piracy, acts of terrorists, acts of hostility or malicious damage, blockades
375
(whether imposed against all vessels or imposed selectively against vessels of certain flags or ownership, or
376
against certain cargoes or crews or otherwise howsoever), by any person, body, terrorist or political group, or
377
the Government of any state whatsoever, which may be dangerous or are likely to be or to become dangerous
378
to the Vessel, her cargo, crew or other persons on board the Vessel.
 
379
(b) 
The Vessel, unless the written consent of the Owners be first obtained and adequate insurances are obtained
 (such adequacy to be determined by the Owners (acting reasonably)), shall not continue to or go through any
380
port, place, area or zone (whether of land or sea), or any waterway or canal, where it reasonably appears that
381
the Vessel, her cargo, crew or other persons on board the Vessel, in the reasonable judgement of the Owners,
382
may be, or are likely to be, exposed to War Risks. Should the Vessel be within any such place as aforesaid, which
383
only becomes dangerous, or is likely to be or to become dangerous, after her entry into it, the Owners shall have
384
the right to require the Vessel to leave such area.
 
385 (c)
The Vessel shall not load contraband cargo, or to pass through any blockade, whether such blockade be imposed
386
on all vessels, or is imposed selectively in any way whatsoever against vessels of certain flags or ownership, or
387
against certain cargoes or crews or otherwise howsoever, or to proceed to an area where she shall be subject,
388
or is likely to be subject to a belligerent’s right of search and/or confiscation.
 
 
 
394 (e)
 The Charterers shall have the liberty:
 
395
(i) to comply with all orders, directions, recommendations or advice as to departure, arrival, routes, sailing in
396
convoy, ports of call, stoppages, destinations, discharge of cargo, delivery, or in any other way whatsoever, which

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
397
are given by the Government of the Nation under whose flag the Vessel sails, or any other Government, body or
398
group whatsoever acting with the power to compel compliance with their orders or directions;
 
399
(ii) to comply with the orders, directions or recommendations of any war risks underwriters who have the
400
authority to give the same under the terms of the war risks insurance;
 
401
(iii) to comply with the terms of any resolution of the Security Council of the United Nations, any directives of
402
the European Community, the effective orders of any other Supranational body which has the right to issue and
403
give the same, and with national laws aimed at enforcing the same to which the Owners are subject, and to obey
404
the orders and directions of those who are charged with their enforcement.
 
405 (f)
In the event of outbreak of war
 
 
 
 hire shall continue to be paid in accordance with Clause 11  (Hire) and except as aforesaid all
 
414
other provisions of this Charter shall apply until redelivery.
 
 
 
 
 
421
 
423
28. Termination (See Clauses 40 (Termination, Redelivery and Total Loss) and 44 (Termination Events))
 
 
 
 
 
 
 
 

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PART II
 
 
 
 
 
 
 
 
 
 
 
462
29.  Repossession
 
463
Subject to Clause 40.4, Iin the event of the termination of this Charter in accordance with the applicable provisions of Clause 44 (Termination Events), the
 
464
Owners shall have the right to repossess the Vessel from the Charterers at her current or next port of call, or at
465
a port or place convenient to them without hindrance or interference by the Charterers, courts or local
466
authorities. Pending physical repossession of the Vessel in accordance with this Clause 29 (Repossession), the Charterers shall
 
467
hold the Vessel as gratuitous bailee only to the Owners and the Charterers shall procure that the master and crew follow the orders and directions of the Owners. The Owners shall arrange for an authorised
 
468
representative to board the Vessel as soon as reasonably practicable following the termination of the Charter.
469
The Vessel shall be deemed to be repossessed by the Owners from the Charterers upon the boarding of the
470
Vessel by the Owners’ representative. All arrangements and expenses relating to the settling of wages,
471
disembarkation and repatriation of the Charterers’ Master, officers and crew shall be the sole responsibility of
472
the Charterers.
 
473
30.  Dispute Resolution
 
474
(a)* This Contract and any non-contractual obligations arising under or in connection with it, shall be governed by and construed in accordance with English law.
 
(b) Any dispute arising out of

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PART II
475
or in connection with this Contract shall be referred to and finally resolved by arbitration in London in accordance with the Arbitration
476
Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the
477
provisions of this Clause.

478
(c) The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA)
479
Terms current at the time when the arbitration proceedings are commenced.

480
(d) The reference shall be to three  (3) arbitrators. A party wishing to refer a dispute to arbitration shall appoint its
481
arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint
482
 
its own arbitrator within fourteen (14) calendar days of the date that the notice is delivered to the other party and stating that it will appoint its arbitrator as sole
483
arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the

484
fourteen (14)
days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within
485
the fourteen (14) days specified, the party referring a dispute to arbitration may, without the requirement of any further
486
prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party

accordingly.
487
The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement.

488
(e)Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the
489
appointment of a sole arbitrator.

 
(f) Where the reference is to three (3) arbitrators the procedure for making appointments shall be in accordance with the procedure for full arbitration stated above.

490
(g) In cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 (or such other sum as the
491
parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure
492
current at the time when the arbitration proceedings are commenced.
h) The language of the arbitration shall be English.

 
 
 
 
 

 
 
 

 
 

 

 
 

 
 

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PART II
 
 
 
 
 
 
 
 
 
 

31.      Notices(see Clause 43 (Notices))
 


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PART III

 
 
 
 
 
The Vessel shall be built in accordance with the Building Contract and shall be of the description set out therein.
 
 

 

 

 
Subject to the Vessel having completed her acceptance trials including trials of cargo equipment in accordance

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
 
 
 
 
 
 
 
 
 
 
 
 

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
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
 
 
 
 
 
 
 
 
delivered and taken over as she is at the time of delivery, after which the Sellers shall have no responsibility for
 
 

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PART V
     


   
   
   
     
   
   
     
   



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
 
ADDITIONAL CLAUSES TO STANDARD BAREBOAT CHARTER
 
CLAUSE 32 – CHARTER PERIOD
 
32.1
For the avoidance of doubt, 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).
 
32.2
The Charter Period shall, subject to the terms of this Charter, continue for a period of sixty (60) months from the Commencement Date.
 
CLAUSE 33 – CANCELLATION
 
If the MOA expires, is cancelled, terminated, rescinded or suspended or otherwise ceases to remain in full force and effect for any reason, then this Charter shall immediately terminate and be cancelled (with the exception of Clause 50 (Indemnities) and other provisions hereof expressed to survive such termination or cancellation) without the need for either of the Owners or the Charterers to take any action whatsoever provided however that, in consideration of the Owners entering into the MOA and this Charter as at the date hereof, the Owners shall be entitled to retain all indemnified expenses and/or fees paid by the Charterers under the MOA, this Charter and the other Leasing Documents, and such payment shall not be construed as a penalty but shall represent an agreed estimate of the loss and damage suffered by the Owners in entering into this Charter upon the terms and conditions contained herein and shall therefore be paid as compensation by the Charterers.
 
CLAUSE 34 – DELIVERY 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.
 
34.2
The obligation of the Owners to charter the Vessel to the Charterers hereunder is subject to and conditional upon:
 
(a)
the delivery of the Vessel to the Owners (as buyers under the MOA) by the Charterers (as sellers under the MOA) pursuant to the MOA;
 
(b)
no Potential Termination Event or Termination Event having occurred from the date of this Charter to the last day of the Charter Period;
 
(c)
the representations and warranties contained in Clause 45 (Representations and Warranties) being true and correct on the date hereof and each day thereafter until and including the last day of the Charter Period;
 
(d)
Delivery occurring on or before the Cancelling Date;
 
 
 1
Huarong Seanergy
 
 
BBC additional clauses – m.v. "Squireship"
 
 
SINGAPORE/91706047v1
(e)
the Initial Sub-charter remains in full force and effect on Delivery and evidence satisfactory to the Owners that the Vessel shall continue to be subject to the Initial Sub-charter, and it is delivered to and employed by the Initial Sub-charterer thereunder, on the Commencement Date;
 
(f)
the Owners (by themselves or by their legal counsels) having received from the Charterers:
 

 (i)
on or before the date falling five (5) Business Days (or such other period as the Owners may agree in their sole discretion or as otherwise specified in Part A of Schedule 2) prior to the Prepositioning Date, the documents or evidence set out in Part A of Schedule 2 in form and substance satisfactory to them;
 

 (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, the documents or evidence set out in Part B of Schedule 2 in form and substance satisfactory to them; and
 

 (iii)
after Delivery, the documents and evidence set out in Part C of Schedule 2 in form and substance satisfactory to them within the time periods set out thereunder.
 
and if any of the documents listed in sub-clauses (i) and (ii) above are not in the English language then they shall be accompanied by an English translation.
 
34.3
The conditions precedent and conditions subsequent specified in Clause 34.2(e) (Delivery of Vessel) are inserted for the sole benefit of the Owners and may be waived or deferred in whole or in part and with or without conditions by the Owners. Upon the requirements of Clause 34.2 (Delivery of Vessel) being fulfilled or waived to the satisfaction of the Owners, the Owners shall give notice thereof in writing to the Charterers.
 
34.4
On delivery to and acceptance by the Owners (as buyers under the MOA) of the Vessel under the MOA from the Charterers (as sellers under the MOA) and subject to the provisions of this Clause, the Vessel shall be deemed to have been delivered to, and accepted without reservation by, the Charterers under this Charter on an "as is where is" basis and in such condition as the Vessel was delivered to the Owners (as buyers under the MOA) under the MOA with, for the avoidance of doubt, any faults, deficiencies, defect and errors of description 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.
 
34.5
On Delivery, as evidence of the commencement of the Charter Period, the Charterers shall sign and deliver to the Owners, the Acceptance Certificate. Without prejudice to this Clause, 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.
 
34.6
Without prejudice to and notwithstanding the provisions of this Clause, 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 (as buyers under the MOA) under the MOA from the Charterers (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:
 
 
 2
Huarong Seanergy
 
 
BBC additional clauses – m.v. "Squireship"
 
 
SINGAPORE/91706047v1
(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.
 
34.7
Without prejudice to Clause 9 (Inventories, Oil and Stores), the Owners shall not be obliged to deliver the Vessel to the Charterers with any bunkers and unused lubricating 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 the Owners in respect of the same.
 
CLAUSE 35 – QUIET ENJOYMENT
 
Provided that the Charterers do not breach the terms of any Assignable Sub-charter and that no Termination Event or Total Loss has occurred at any relevant time, the Owners hereby irrevocably agree not to disturb or interfere with the Charterers' lawful use, possession and quiet enjoyment of the Vessel during the Charter Period in any way whatsoever. The Owners shall, on or prior to any assignment, transfer or sale of the Vessel and/or the Leasing Documents by the Owners as permitted under Clause 58.2 (Assignment or transfer by the Owners), use reasonable endeavours to procure that the Owners' Financier (if any) enters into a quiet enjoyment agreement with the Charterers on such terms as may be acceptable to the Charterers.
 
CLAUSE 36 – 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 and the Advance Charterhire in respect of the chartering of the Vessel.
 
36.2
The Charterers shall pay to the Owners an amount equivalent to the Advance Charterhire (on a non-refundable basis) on the Commencement Date, which payment shall be deemed to have been effected on the Commencement Date by setting off the Charterers' obligation to pay the Advance Charterhire against the Owners' obligation as buyers to pay that part of the Purchase Price in an amount equal to the Advance Charterhire, to the Charterers (as sellers under the MOA) on the Commencement Date pursuant to clause 18(b)(i) of the MOA.
 
36.3
Following Delivery, the Charterers shall pay, on each Payment Date, a quarterly instalment of Charterhire to the Owners in arrears and each instalment of Charterhire shall consist of:
 
(a)
a fixed component of the Charterhrie (the "Fixed Charterhire"), such amount in respect of the first (1st) to the nineteenth (19th) instalments of Charterhire to be US$475,002; and in respect of the twentieth (20th) instalment of Charterhire to be US$474,962; and
 
(b)
the Variable Charterhire in respect of the relevant Term.
 
36.4
The Vessel shall not at any time be deemed off-hire and the Charterers' obligation to pay all Charterhire and any other amounts payable under this Charter shall be paid in Dollars and shall be absolutely and unconditionally payable under any and all circumstances and shall not be affected by any circumstances of any nature whatsoever including but not limited to:
 
 
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(a)
(except in the case of the Advance Charterhire and/or the Upfront Fee, as the case may require) 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;
 
(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 unavailability of the Vessel, including, 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, or for registration or documentation under the laws of any relevant jurisdiction;
 
(e)
the Total Loss or any damage to or forfeiture or court marshal's or other sale of the Vessel;
 
(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 or 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 or any Assignable Sub-charter 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 or any Assignable Sub-charter 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 or any other highly infectious or contagious diseases (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;
 
 
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(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 virus or disease.
 
36.5
All payments of the Charterhire, the Advance Charterhire, the Upfront Fee and any other moneys payable hereunder shall be made in Dollars.
 
36.6
Time of payment of the Charterhire, the Advance Charterhire, the Upfront Fee and any other payments by the Charterers shall be of the essence of this Charter and shall be received by the Owners in same day available funds and not later than 5.00 pm (Shanghai time) on the due date of such payment.
 
36.7
All Charterhire, Advance Charterhire, Upfront Fee and any moneys payable hereunder shall be payable by the Charterers to the Owners to such account as the Owners may notify the Charterers in writing from time to time.
 
36.8
Payment of the Charterhire, the Advance Charterhire, the Upfront Fee and any other amounts payable by the Charterers to the Owners under the Leasing Documents shall be at the Charterers' risk until receipt by the Owners.
 
36.9
All stamp duty, value added 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, Advance Charterhire, and Upfront Fee and other payments payable under this Charter by addition to, and at the time of payment of, such amounts.
 
36.10
If the Charterers fail to make any payment due under this Charter on the due date, they shall pay interest on such late payment at the default rate of ten per cent. (10%) per annum and accruing from the date on which such payment became due until the date of receipt of payment thereof.
 
 
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36.11
All Variable Charterhire, 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 360-day year.
 
36.12
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 in the same calendar month.
 
36.13
For the purposes of determining the Variable Charterhire:
 
(a)
if no Term SOFR is available for any relevant Term the applicable Reference Rate shall be the Interpolated Term SOFR for a period equal in length to for that Term;
 
(b)
If no Term SOFR is available for any relevant Term 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) above applies but no Historic Term SOFR is available for any relevant Term, the applicable Reference Rate shall be the Interpolated Historic Term SOFR for a period equal in length to that Term; 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 36.17 shall apply.
 
36.14
The Owners shall notify the Charterers of the rate of interest in respect of a Term as soon as reasonably practicable after such rate of interest is determined by the Owners on the Quotation Day.
 
36.15
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 Outstanding Finance Amount or any part thereof would be in excess of the Reference Rate, the Owners shall promptly notify the Charterers accordingly and Clause 36.17 below shall apply to the prevailing Outstanding Finance Amount or any part thereof for that Term.
 
36.16
Immediately following the notification referred to in Clause 36.15 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 basis for determining an applicable Interest Rate for that Term. Subject to Clause 36.18, any substitute or alternative basis agreed pursuant to this Clause shall, with the prior written consent of the Parties, be binding on the Parties.
 
36.17
If:
 
(a)
this Clause 36.17 applies pursuant to Clause 36.13 or 36.15 above;
 
(b)
a substitute basis is not so requested and/or agreed pursuant to Clause 36.16 above; or
 
(c)
the amendment or waiver to the terms of the Leasing Documents is not so agreed pursuant to Clause 36.18,
 
the applicable Interest Rate shall be the percentage rate per annum which is the sum of:
 

 (i)
the Margin, and
 
 
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(ii)
the cost notified by the Owners (expressed as an annual rate of interest) of funding the Outstanding Finance Amount during such Term as reasonably determined by the Owners,
 
provided that if the rate pursuant to (ii) above is less than zero, the relevant rate shall be deemed to be zero.
 
If this Clause 36.17 applies pursuant to Clause 36.16 above 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 Outstanding Finance Amount for that Term shall be deemed, for the purposes of sub-clause(ii) above, to be the Reference Rate.
 
36.18
If a Published Rate Replacement Event has occurred in relation to any Published Rate for Dollars, the Owners, after consultation with the Charterer, are entitled to request any amendment or waiver (and such costs incurred in relation to such amendment or waiver shall be borne by the Charterers), which relates to:
 
(a)
providing for the use of a Replacement Reference Rate in the 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 interest 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 36.17 shall apply to the calculation of the Interest Rate.
 
CLAUSE 37 – POSSESSION OF VESSEL
 
37.1
The Charterers shall not, without the prior written consent of the Owners, assign, mortgage or pledge the Vessel, its Earnings, Insurances, Requisition Compensation or any other interest therein and/or any of its rights and interest under any Sub-charter or any other 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) other than Permitted Security Interests.
 
 
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37.2
The Charterers shall promptly notify in writing any party (as the Owners may request), including any Sub-charterer, that the Vessel is the property of the Owners and the Charterers shall provide the Owners with a copy of such written notification and satisfactory evidence that such party has received such written notification.
 
37.3
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.
 
37.4
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 and take (and shall procure that any such Sub-charterer shall take) all steps to prevent an arrest (threatened or otherwise) of the Vessel.
 
37.5
Without prejudice to Clause 10(a)(ii) (New Class and Other Safety Requirements), any time and costs associated with the re-designing, installation, inspection or docking of the Vessel for the purposes of complying with the requirements of any applicable regulations or conventions which come into force after the date of this Charter, including without limitation to, the International Convention for the Control and Management of Ships' Ballast Water and Sediments, shall be for the account of the Charterers.
 
CLAUSE 38 – INSURANCE
 
38.1
The Charterers shall procure that insurances are effected in form and substance satisfactory to the Owners and the Owners' Financier (if any) at all times during the Charter Period and that such insurances are:
 
(a)
in Dollars;
 
(b)
in the case of fire and usual marine risks (including hull and machinery) 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 the then applicable Market Value of the Vessel or (ii) one hundred and twenty per cent (120%) of the then prevailing Outstanding Finance Amount at the relevant time;
 
(c)
in the case of oil pollution liability risks for the Vessel, for an aggregate amount equal to the highest level of cover from time to time available under protection and indemnity club entry and in the international marine insurance market and for an amount of not less than $1,000,000,000;
 
(d)
in relation to protection and indemnity risks (including freight, demurrage and defence cover), in respect of the full tonnage of the Vessel and with a member of the International Group of P&I Clubs, and reputable protection and indemnity club member (in each case, which is acceptable to the Owners and the Owners' Financier (if any));
 
(e)
on terms acceptable to the Owners and the Owners' Financier (if any);
 
 
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(f)
through approved brokers and with first class international insurers and/or underwriters notified to the Owners (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 and protection and indemnity risks, in a war risks and protection and indemnity risks associations as notified to the Owners and the Owners' Financier (if any) (including being a member of the International Group of P&I Clubs); and
 
(g)
on no less favourable terms as may be required under the terms of any Sub-charter.
 
38.2
In addition to the terms set out in Clause 13(a), the Charterers shall procure that the obligatory insurances shall:
 
(a)
subject always to paragraph (b), name the Owners, the Approved Manager(s) 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;
 

 (1)
to any provable out-of-pocket expenses that they have 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 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' Financier if any (in such form as they require) that any deductible shall be apportioned between the Charterers and every other named assured or co-assured (other than the Owners and the Owners’ Financier if any) in proportion to the gross claims made by or paid to each of them and that they shall do all things necessary and provide all documents, evidence and information to enable the Owners and the Owners' Financier (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 or the Owners' Financier (if any) requires:
 

 (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 financiers, 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
 
 
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(iii)
name the Owners' Financier (as applicable) and the Owners (as applicable) as respectively the first ranking loss payee and the second ranking loss payee (and in the absence of any financiers, name the Owners as the first ranking loss payee) in accordance with the terms of the relevant loss payable clauses approved by the Owners' Financier 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' Financier (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' Financier (as applicable) shall be made without set-off, counterclaim or deductions or condition whatsoever;
 
(d)
provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Owners and/or the Owners' Financier (if any);
 
(e)
provide that the Owners and/or the Owners' Financier (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 change is made in the coverage which adversely affects the interest of the Owners and/or the Owners' Financier (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' Financier (if any) for thirty (30) days after receipt by the Owners and/or the Owners' Financier (if any) of prior written notice from the insurers of such cancellation, change or lapse.
 
38.3
The Charterers shall:
 
(a)
at least fourteen (14) days prior to Delivery (or such lesser period agreed by the parties), notify in writing the Owners (copied to the Owners' Financier (if any)) of the terms and conditions of all Insurances;
 
(b)
at least seven (7) days (or such lesser period agreed by the parties) before the expiry of any obligatory insurance or otherwise before the appointment of any new 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 Clause 38 (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 that obligatory insurance and of the proposed terms of renewal and obtain the Owners' approval to such matters;
 
(c)
at least seven (7) days (or such lesser period agreed by the parties) 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, 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 38.3(c) 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' Financier (if any).
 
 
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38.4
The Charterers shall ensure that all insurance companies and/or underwriters, and/or (if any) insurance brokers provide the Owners with copies of all policies, cover notes and certificates of entry relating to the obligatory insurances which they are to effect or renew and of a letter or letters or undertaking in a form required by the Owners and/or the Owners' Financier (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;
 
(b)
they will hold the benefit of such policies and such insurances, to the order of the Owners and/or the Owners' Financier (if any) and/or such other party in accordance with the said loss payable clause;
 
(c)
they will advise the Owners and the Owners' Financier (if any) promptly of any material change to the terms of the obligatory insurances of which they are aware;
 
(d)
following a written application from the Owners and/or the Owners' Financier (if any) not later than one (1) month before the expiry of the obligatory insurances, they will notify the Owners and the Owners' Financier (if any) not less than seven (7) days (or such lesser period agreed by the parties) 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' Financier (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' Financier (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 and/or the Owners' Financier (if any) and where practicable.
 
38.5
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' Financier (if any) with:
 
(a)
a copy of the certificate of entry for the Vessel as soon as such certificate of entry is issued;
 
(b)
a letter or letters of undertaking in such form as may be required by the Owners and/or the Owners' Financier (if any) or in such association's standard form; and
 
(c)
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 the Vessel.
 
38.6
The Charterers shall ensure that all policies relating to the obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.

 
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38.7
The Charterers shall procure that all premiums or other sums payable in respect of the obligatory insurances are punctually paid and produce all relevant receipts when so required by the Owners.
 
38.8
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.
 
38.9
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 associations);
 
(b)
the Charterers shall not make or permit any changes relating to the classification or classification society or manager or operator of the Vessel unless such changes have, if required, first been approved by the underwriters of the obligatory insurances or the Owners; and
 
(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 the 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.
 
38.10
The Charterers shall not make or agree to any 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 and/or the Owners' Financier (if any), not to be unreasonably withheld.
 
38.11
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.
 
38.12
The Charterers shall provide the Owners upon written request, copies of:
 
(a)
all communications between the Charterers and:
 

 (i)
the approved brokers; and
 
 
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(ii)
the approved protection and indemnity and/or war risks associations; and
 

 (iii)
the first-class international insurers and/or underwriters, which relate directly or indirectly to:
 

 (1)
the Charterers' obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
 

 (2)
any credit arrangements made between the Charterers and any of the persons referred to in paragraphs (i) or (ii) relating wholly or partly to the effecting or maintenance of the obligatory insurances; and
 
(b)
any communication with all parties involved in case of a claim under any of the Vessel's insurances.
 
38.13
The Charterers shall promptly provide the Owners (or any persons which they may designate) with:
 
(a)
any information which the Owners or the Owners' Financier (or any such designated person) request for the purpose of:
 

 (i)
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
 

 (ii)
effecting, maintaining or renewing any such insurances as are referred to in Clause 13(a) or dealing with or considering any matters relating to any such insurances; and
 
(b)
after the occurrence of a Termination Event which is continuing, copies of all communications between all parties in case of a claim under any of the Vessel's insurances.
 
38.14
If one or more of the obligatory insurances are not effected and maintained with first class international insurers or are effected with an insurance or captive subsidiary of the Owners or the Charterers, then the Charterers shall procure, at their own expense, that the relevant insurers maintain in full force and effect facultative reinsurances with reinsurers and through brokers, in each case, of recognised standing and acceptable in all respects to the Owners. Any reinsurance policy shall include, if and when permitted by law, a cut-through clause in a form acceptable to the Owners. The Charterers shall procure that underwriters of the primary insurances assign each reinsurance to the relevant financiers in full, if required.
 
38.15
The Charterers shall be solely responsible for all premiums and other documented costs or expenses which are reasonably incurred by (i) the Owners in connection with or with a view to effecting, maintaining or renewing a lessors' or innocent owners' interest insurance and a lessors' or innocent owners' additional perils insurance or any similar protective shipowner insurance that is taken out in respect of the Vessel, and/or (ii) the Owners or the Owners' Financier (if any) in connection with or with a view to effecting, maintaining or renewing a mortgagee's interest insurance and a mortgagee's additional perils insurance that is taken out in respect of the Vessel. In each case, the amount of the insurances referred to in this Clause 38.15 shall be equal to at least one hundred and twenty per cent. (120%) of the higher of (i) the prevailing Market Value of the Vessel at the relevant time and (ii) the Outstanding Finance Amount at the relevant time on such terms and conditions as the Owners may from time to time impose.
 
 
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38.16
The Charterers shall be solely responsible for 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, reasonable wear and tear to the Vessel only excepted.
 
38.17
The Charterers shall:
 
(a)
at the expense of the Charterers, furnish the Owners once a year (or, after a Termination Event has occurred and is continuing, as many times per year as the Owners may require) with a detailed report signed by an independent firm of marine insurance brokers or consultants appointed by the Owners dealing with the Insurances and stating the opinion of such firm as to the adequacy of the Insurances;
 
(b)
reimburse the Owners any documented expenses reasonably incurred by the Owners in obtaining the reports described in Clause 38.17(a); and
 
(c)
procure that there is delivered to the insurance brokers or consultants described in 38.17(a) such information in relation to the Insurances as such brokers or consultants may reasonably require.
 
38.18
The Charterers shall keep the Vessel insured at their time, costs and expenses against such other risks and/or insurances which the Owners or the Owners' Financier consider reasonable for a prudent shipowner or operator to insure against at the relevant time (as notified by the Owners) and which are, at that time, generally insured against by owners or operators of vessels similar to the Vessel (including but not limited to kidnap and ransom insurances, which the Charterers acknowledge shall fall within the scope of this clause).
 
38.19
The Charterers shall, in the event that any Approved Manager or any co-assured makes a claim under any obligatory insurances taken out in connection with Clause 38 but is unable to or otherwise fails to pay in full any deductible in connection with such claim (in an amount as apportioned between the Charterers and every other assured in proportion to the gross claims made by or paid to each of them), pay such shortfall in deductible payable on behalf of such Approved Manager or co-assured.
 
CLAUSE 39 – WARRANTIES RELATING TO VESSEL
 
39.1
It is expressly agreed and acknowledged that the Owners are not the manufacturer or original supplier of the Vessel which has been purchased by the Owners (as buyers under the MOA) from the Charterers (as sellers under the MOA) pursuant to the MOA 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).
 
39.2
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.
 
 
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39.3
The Charterers agree and acknowledge that the Owners shall not be liable for any claim, loss, damage, expense, injury, death, delay or other liability of any kind or nature caused directly or indirectly by the Vessel, whether onboard the Vessel or elsewhere, or by any inadequacy thereof or the use or performance thereof or any repairs thereto or servicing thereof and irrespective of whether such claim, loss, damage, expense, injury, death, delay or other liability shall arise from the unseaworthiness of the Vessel, and the Charterers shall not by reason thereof be released from any liability to pay any Charterhire or Advance Charterhire or other payment due under this Charter or any of the other Leasing Documents.
 
CLAUSE 40 – TERMINATION, REDELIVERY AND TOTAL LOSS
 
40.1
If the Termination Sum becomes payable in accordance with Clause 44.2, it is agreed by the Parties that payment of the Termination Sum is deemed to be proportionate as to amount, having regard to the legitimate interests of the Owners, in protecting against the Owners' risk of the Charterers failing to perform its obligations under this Charter.
 
40.2
Upon the Termination Notice Date, the Charterers' right to possess and operate the Vessel shall immediately cease (without in any way affecting the Charterers' obligation to pay the Termination Sum).
 
40.3
Upon irrevocable receipt of the Termination Sum pursuant to Clause 44.2 or the Special Termination Sum pursuant to Clause 44(A).1 or 44(A).3 (as the case may be) by the Owners in full:
 
(a)
this Charter shall terminate (provided that any provision hereof expressed to survive such termination shall do so in accordance with its terms); and
 
(b)
the Owners shall, 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 approved by the Owners) free from all mortgages, encumbrances, liens, debts or any claims whatsoever or any Port State or other administrative detentions, incurred or permitted by the Owners (save for those mortgages, liens, encumbrances and debts created under the Leasing Documents or 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, with such transfer otherwise made in accordance with Clauses 49.1(a) and 49.1(b).
 
40.4
If the Charterers fail to make any payment of the Termination Sum on the due date thereof:
 
(a)
interest on such outstanding amount shall accrue in accordance with Clauses 36.10 and 36.11; and
 
(b)
the Charterers shall:
 

 (i)
upon the Owners' prior written request (at the Owners' sole discretion), be obliged to (and at the Charterers' own cost) redeliver the Vessel to the Owners at such ready and nearest safe port as the Owners may require; further and for the avoidance of doubt, the Owners shall be entitled (at the 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. The Earnings of the Vessel during such period less its operational expenses (including, without limitation, any maintenance costs of, and costs for fuel, bunkering, lubricants or oils for the Vessel) (the "Net Trading Proceeds") shall be applied against the Termination Sum and any other amounts payable under the Leasing Documents pursuant to Clause 54 (General Application of Proceeds) and if such use of the Vessel results in the Owners suffering a loss then such losses shall, for the avoidance of doubt, be included in the indemnities contained in Clause 50 (Indemnities) and be added to the Termination Sum. Upon redelivery of the Vessel this Charter shall terminate save for the provisions set out in Clause 30 (Dispute Resolution), Clause 36.10, this Clause 40 (Termination, Redelivery and Total Loss) and Clause 50 (Indemnities) and any other provisions expressed to survive termination or that are cross referred to in the survived clauses or are required to survive to enable proper construction of the survived terms; and/or
 
 
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(ii)
the Owners shall at any point following such redelivery be entitled (at the Owners' sole discretion) to sell the Vessel on terms they deem fit (an "Owners' Sale") in which case the sale proceeds (after deducting all fees, taxes, disbursements, any maintenance costs of, and costs for fuel, bunkering or oils for, the Vessel and any other costs and expenses incurred by the Owners in connection with such sale) (the "Net Sales Proceeds") derived from such sale shall be applied against the Termination Sum pursuant to Clause 54 (General Application of Proceeds) and any other amounts payable under Clause 50 (Indemnities) in any manner the Owners deem fit and any excess of such amount after such application shall be paid to the Charterers. If the Net Sales Proceeds are not in an amount sufficient to discharge in full the Termination Sum and any other amounts payable under Clause 50 (Indemnities), the Charterers shall continue to be liable for the shortfall and interest shall continue to accrue on such shortfall in accordance with Clause 36.11. Upon completion of such Owners' Sale this Charter shall terminate save for Clause 30 (Dispute Resolution), Clause 36.10, this Clause 40 (Termination, Redelivery and Total Loss), Clause 50 (Indemnities) and any other provisions expressed to survive termination or that are cross referred to in the survived clauses or are required to survive to enable proper construction of the survived terms; or
 
(c)
the Charterers shall, upon the Owners' prior written request (at the Owners' sole discretion) be obliged to (and at the Charterers' own cost) redeliver the Vessel to the Owners at such ready and nearest safe port as the Owners may require; and as from such redelivery the Owners shall maintain ownership of such Vessel and own, operate or sell or otherwise use it in any manner they deem fit and apply the then current Market Value of the Vessel (less an amount determined by the Owners as being an amount equal to the amount of the usual and reasonable expenses which would be reasonably likely to be incurred in connection with a sale of the Vessel or other vessel) (the "Adjusted Market Value"), against the Termination Sum and all other amounts payable to the Owners under this Charter in which case if:
 

 (i)
the amount of the relevant Adjusted Market Value is in excess of the aggregate amounts due to the Owners under this Charter, such excess will be paid to the Charterers subject to no other actual or contingent liabilities existing at the relevant time; or
 

 (ii)
in case the amount of the relevant Adjusted Market Value is not sufficient to discharge in full the aggregate amounts due to the Owners under this Charter following such application the Charterers shall continue to be liable for the shortfall and interest shall continue to accrue on such shortfall in accordance with Clauses 36.10 and 36.11.
 
Any terms expressly provided to survive post-termination of this Charter shall continue to be in full force and effect at all times thereafter.
 
 
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40.5
If the Charterers are required to redeliver the Vessel to the Owners pursuant to Clause 40.4, the Charterers shall (i) keep the Owners informed of the Vessel's itinerary for the voyage and expected geographical range of redelivery, leading up to redelivery and shall serve the Owners with notices of the approximate/definite number of days the Vessel's redelivery. 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 in accordance with the notices given; and (ii) ensure that the Vessel shall, at the time of redelivery to the Owners (at the Charterers' cost and expense):
 
(a)
be in compliance with its Insurances;
 
(b)
be in an equivalent class as she was as at the Commencement Date without any overdue recommendation or condition, 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;
 
(c)
have passed her 5-year and if applicable, 10-year special surveys, and any subsequent second intermediate surveys and drydock at the Charterers' time and expense without any overdue condition and to the satisfaction of the Classification Society;
 
(d)
if the Classification Society or the Flag State require or will require the Vessel to undergo dry-docking within three (3) months of the date of redelivery, be redelivered after the satisfactory completion of such dry-docking at the cost and time of the Charterers;
 
(e)
with all the Vessel's classification, trading, national and international certificates that the Vessel had when she was delivered under this Charter and the log book and other certificates and documents necessary for the operation of the Vessel, valid and without overdue conditions or recommendation falling due;
 
(f)
have her survey cycles up to date and trading and class certificate valid for at least the number of months agreed in Box 17;
 
(g)
be redelivered to the Owners together with all spare parts and spare equipment or replacement items as were on board at the time of Delivery (but only to the extent they have not already been used in the operation of the Vessel), 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;
 
(h)
be free of any cargo (unless otherwise agreed by the Owners) and Security Interest (save for Permitted Security Interests);
 
(i)
be free of any charter and other employment unless the Owners wish to retain the continuance of any then existing charter or as otherwise agreed by the Owners in their absolute discretion;
 
(j)
be free of officers and crew (unless otherwise agreed by the Owners);
 
(k)
have had her underwater parts treated with anti-fouling to last for the ensuing period up to the next scheduled dry docking of the Vessel;
 
 
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(l)
be redelivered to the Owners together with all material information generated during the Charter Period in respect of the use, possession, operation, navigation, utilization of lubricating oil and the physical condition of the Vessel, whether or not such information is contained in the Charterers' equipment, computer or property; and
 
(m)
having such volume of bunkers on board the Vessel as would be sufficient to enable the Vessel to sail to the nearest bunkering port.
 
40.6
The Owners shall have the right to appoint (at the Charterers' cost and expense) surveyor(s) for the purpose of determining the condition of the Vessel at redelivery. The findings of the surveyor appointed by the Owners (the "Owners' Surveyor") shall be conclusive. The Charterers shall provide the Owners' Surveyor with all such facilities and access to the Vessel as may be required to enable such Owners' Surveyor to conduct its survey of the Vessel and shall take all such actions as may be recommended by the Owners' Surveyor to ensure that the Vessel shall be redelivered to the Owners in accordance with Clause 41.6.
 
40.7
The Owners have no obligation to accept redelivery of the Vessel until they are satisfied that the Vessel has been put into the redelivery conditions as set out in Clause 40.5 and other relevant conditions of this Charter. Moreover, the Owners reserve all rights to recover from the Charterers any costs, expenses and/or liabilities incurred or suffered by them (including, without limitation, the costs of any docking and/or repairs which may be required to restore the Vessel to the structure, state, condition and class as that in which the Vessel was delivered (fair wear and tear not affecting class excepted, but without any recommendations or conditions as to class)) as a result of the Vessel not being redelivered in accordance with the terms of this Charter.
 
40.8
The Owners shall, at the time of the redelivery of the Vessel, take over all bunkers, lubricating oil, unbroached provisions, paints, ropes and other consumable stores (excluding spare parts) in the Vessel at no cost to the Owners.
 
40.9
Throughout the Charter Period, the Charterers shall bear the full risk of any Total Loss of or any other damage to the Vessel however arising. If the Vessel, for any reason, becomes a Total Loss after Delivery, the Charterers shall pay the Special Termination Sum to the Owners on the earlier of (the "Total Loss Payment Date"):
 
(a)
the date falling sixty (60) days after such Total Loss has occurred; and
 
(b)
the date of receipt by the Owners and/or the Owners' Financier (if any) of the Total Loss Proceeds.
 
40.10
Upon such receipt by the Owners of the Special 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.
 
40.11
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 Clause 54 (General Application of Proceeds) and shall satisfy the obligation of the Charterers to pay the Special Termination Sum to the extent received by the Owners and/or the Owners' Financiers in accordance with the terms of the relevant loss payable clause. The obligation of the Charterers to pay the Special 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.
 
 
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40.12
If the Total Loss Proceeds unconditionally received by the Owners and/or the Owners' Financiers in accordance with the terms of the relevant loss payable clause are less than the Special Termination Sum, the Charterers shall pay such shortfall to the Owner on the Total Loss Payment Date.
 
40.13
The Owners shall have no obligation to supply to the Charterers with a replacement vessel following the occurrence of a Total Loss.
 
CLAUSE 41 – FEES AND EXPENSES
 
41.1
In consideration of the Owners entering into this Charter, the Charterers shall pay to the Owners or their nominee a non-refundable upfront fee (the "Upfront Fee") at such time and in such amount to be set out in the Fee Letter.
 
41.2
Each Party shall be responsible for their own costs and expenses to review and negotiate the term sheet relating to this Charter. All documented costs and expenses incidental to and incurred by the Owners in the preparation, negotiation, execution and delivery of the Charter and other Leasing Documents including, but not limited to, all documented costs and expenses reasonably incurred by the Owners and all documented legal costs, expenses and other disbursements reasonably incurred by the Owners' legal counsels in connection with the same, shall be for the account of the Charterers.
 
41.3
If:
 

 (a)
the Charterers request an amendment, waiver or consent (including an amendment or a waiver to the terms of the Leasing Documents is required pursuant to Clause 36.18 to address the fact that a Published Rate Replacement Event has occurred); or
 

 (b)
the Charterers make a request to re-register the Vessel in another Flag State,
 
the Charterers shall, on demand, reimburse the Owners for the amount of all documented costs and expenses (including, without limitation, any legal fees) reasonably 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).
 
41.4
All documented costs and expenses reasonably incurred by the Owners in relation to the acquisition, financing (including, without limitation, any Breakfunding Costs payable by the Owners to the Owners' Financiers (if any)) and registration of the Vessel and this Charter by the Owners 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 annual 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 such Flag State to 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/tonnage tax amounts payable to the Flag State or any other aforesaid costs, expenses and/or taxes when the same fall due.
 
 
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41.5
All documented costs and expenses (including, without limitation, any legal fees) reasonably 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 Clause 40 (Termination, Redelivery and Total Loss) shall be for the account of the Charterers.
 
41.6
The Charterers shall on demand pay or reimburse the Owners for the amount of all documented 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, any Assignable Sub-charter or any Security Interest created thereunder and with any proceedings instituted by or against the Owners as a consequence of entering into any Leasing Document or any Assignable Sub-charter, taking or holding any Security Interests created thereunder or enforcing those rights, including, without limitation, any documented losses, costs and expenses which the Owners may from time to time sustain, incur or become liable by reason of the Owners being the registered owner of the Vessel and/or being deemed by any court or authority to be an operator or controller, or in any way concerned in the operation or control, of a Vessel.
 
CLAUSE 42 - NO WAIVER OF RIGHTS
 
42.1
No neglect, omission, delay or indulgence on the part of either Party in enforcing the terms and conditions of this Charter 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.
 
42.2
No right or remedy conferred upon either party by this Charter 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 43 – NOTICES
 
43.1
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 addresses:
 
 
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(A)
to the Owners:
China Huarong Shipping Financial Leasing Company Limited
Room 6006, 6th Floor, No. 15 Second East Zhongshan Road, Shanghai, China, 200002
Attention: Jones Cao/Annie Tao/ Sun Linzi
Tel: +86(0)21 63268756
Email:
caojiong@hrflc.com
taobeijuan@hrflc.com/ sunlinzi@hrflc.com
 
 
(B)
to the Charterers:
Squire Ocean Navigation Co. c/o Seanergy Maritime Holdings Corp.

154 Vouliagmenis Avenue, 166 74 Glyfada, Athens, Greece
Attention: Legal Department
Tel: +30 210 8913520
Email: legal@seanergy.gr and finance@seanergy.gr
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.
 
43.2
Any such communication shall be deemed to have reached the party to whom it was addressed (a) when delivered (in case of a registered letter), or (b) when actually received in readable form (in case of an email). A notice or other such communication received on a non-working day or after 5.00 p.m. in the place of receipt shall be deemed to be served on the next following working day in such place.
 
CLAUSE 44 – TERMINATION EVENTS
 
44.1
The Owners and the Charterers hereby agree that any of the following events shall constitute a Termination Event:
 
(a)
any Obligor (other than a Third Party Approved Manager) fails to make any payment on the due date or on demand in accordance with the terms of any Leasing Document to which it is a party unless such failure to pay is caused by a force majeure or technical error and payment is made within ten (10) Business Days of its due date;
 
(b)
the Charterers breach or omit to observe or perform any of their undertakings in Clause 46.1(j), (l), (n), (p), (r), (s), (t), (u), (v), (y), (dd), (ee) or (ff) or the Guarantor breaches or omits to observe or perform any of its undertakings contained in the Guarantee, provided that no Termination Event under this Clause 44.1(b) will be triggered if the breach or omission to observe or perform relates solely and directly to any Sanctions imposed by the law or regulation of the People's Republic of China which deviates from those imposed by the United Nations, in which case the Charterers shall be entitled to terminate this Charter pursuant to Clause 44(A).3;
 
(c)
the Charterers fail to obtain and/or maintain the Insurances required under Clause 38 (Insurance) in accordance with the provisions thereof or any insurer in respect of such Insurances cancels the Insurances or disclaims liability with respect thereto;
 
 
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(d)
any Obligor (other than a Third Party Approved Manager) commits any other breach of, or omits to observe or perform, any of their other obligations or undertakings in this Charter or any other Leasing Document (other than a breach referred to in paragraphs (a), (b(b) or (c) above) unless such breach or omission is in the reasonable opinion of the Owners, remediable and such Obligor remedies such breach or omission to the reasonable satisfaction of the Owners within ten (10) Business Days of the occurrence thereof;
 
(e)
any representation or warranty made or deemed to be made by any Obligor (other than a Third Party Approved Manager) in or pursuant to any Leasing Document to which it is a party or if applicable, in the case of the Charterers only, the Acceptance Certificate, proves to be untrue or misleading in a material way when it is made;
 
(f)
any of the following occurs in relation to any Financial Indebtedness of an Obligor (other than a Third Party Approved Manager):
 

 (i)
any Financial Indebtedness of such entity is not paid when due or, if so payable, on demand after any applicable grace period has expired;
 

 (ii)
any Financial Indebtedness of such entity becomes due and payable, prior to its stated maturity date as a consequence of any event of default and not as a consequence of the exercise of any voluntary right of prepayment;
 

 (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);
 

 (iv)
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 entity 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);
 
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 (iv) 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 (other than a Third Party Approved Manager):
 

 (i)
such entity becomes unable to pay its debts as they fall due; or
 

 (ii)
the value of the assets of such entity is less than its liabilities (taking into account contingent and prospective liabilities); or
 

 (iii)
any of the assets of such entity (with a value amounting in aggregate to $500,000) are subject to any form of expropriation, execution, attachment, arrest, sequestration or distress (or any analogous process in any jurisdiction) which is not discharged within thirty (30) days; or
 

 (iv)
any administrative or other receiver is appointed over all or a part of the assets of such entity unless as part of a solvent reorganisation which has been approved by the Owners; or
 
 
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(v)
such entity 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 shareholders or directors pass a resolution to the effect that it should be wound up, placed in administration or cease to carry on business; or
 

 (vi)
a petition is presented in any Relevant Jurisdiction for the winding up or administration, or the appointment of a provisional liquidator of such entity unless the relevant petition is frivolous or vexatious and is being contested in good faith and on substantial grounds and is dismissed or withdrawn within twenty-one (21) days of the presentation of the petition; or
 

 (vii)
such entity 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 any of its 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; or
 

 (viii)
any meeting of the shareholders or directors of such entity is summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraph (iii) to (vii) above; or
 

 (ix)
in any jurisdiction, any event occurs or any procedure is commenced which, in the opinion of the Owners, is similar to any of the foregoing referred to in paragraphs (iii) to (vii) above inclusive; or
 
(h)
there is a Change of Control, without the prior written consent of the Owners;
 
(i)
an Obligor (other than a Third Party Approved Manager) suspends or ceases or threatens to suspend or cease carrying on all or a material part of its business;
 
(j)
any consent, approval, authorisation, license or permit necessary to enable the Charterers to operate or charter the Vessel or to enable any of them to comply with any provision of this Charter, or the other Leasing Documents to which it is a party or to ensure that the obligations of the Charterers are legal, valid, binding or enforceable is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent, approval, authorisation, license or permit is not fulfilled;
 
(k)
any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect;
 
(l)
the Vessel is subject to any form of expropriation, execution, attachment, arrest, sequestration or distress (or any analogous process in any jurisdiction) which is not discharged within forty-five (45) days (or such longer period as the Owners may agree in writing);
 
(m)
this Charter or any other Leasing Document and/or any Security Interest created by a Leasing Document:
 
 
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(i)
in the case of any such Security Interest, proves to have ranked after, or loses its priority to, another Security Interest or any other third-party claim or interest;
 

 (ii)
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;
 

 (iii)
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 Leasing Document; or
 

 (iv)
is in any way imperilled or in jeopardy;
 
(n)
an Obligor (other than a Third Party Approved Manager) rescinds, repudiates or terminates a Leasing Document, or an Approved Management Agreement;
 
(o)
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
 

 (ii)
contrary to, or inconsistent with, any regulation,
 
for any Obligor (other than a Third Party Approved Manager) to maintain or give effect to any of its obligations under this Charter or any of the other Leasing Documents to which it is a party in the manner it is contemplated under such Leasing Document or any of the obligations of any Obligor under any Leasing Document to which it is a party or the Initial Sub-charter are not or cease to be legal, valid, binding and enforceable;
 
(p)
the Security Interest constituted by any Leasing Document is in any way imperilled or in jeopardy;
 
(q)
the occurrence of any Termination Event (as defined in the Other Charter);
 
(r)
there is a merger, amalgamation, demerger or corporation reconstruction of an Obligor (other than a Third Party Approved Manager) without the Owners' prior written consent;
 
(s)
the Guarantor is de-listed from the Nasdaq Capital Market (or any other stock exchange acceptable to the Owners); or
 
(t)
the occurrence of any termination event or event of default (howsoever defined therein) under any lease, hire purchase agreement, charter or any other financing arrangement in respect of any Associated Vessel (other than the Vessel and the Other Vessel).
 
44.2
Notwithstanding and without prejudice to Clause 33 (Cancellation), upon the occurrence of a Termination Event which is continuing, 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, 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 such notice (the "Termination Notice Date" but which shall be no earlier than the date falling ten (10) Business Days after the date of such notice).
 
 
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44.3
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.
 
44.4
Without limiting the generality of the foregoing or any other rights of the Owners, upon the occurrence of a Termination Event which is continuing, the Owners shall have the sole and exclusive right and power to (i) settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to or pertaining to the Vessel and this Charter and (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 (iii) change or appoint a new manager for the Vessel other than an Approved Manager and the appointment of any Approved Manager may be terminated immediately without any recourse to the Owners.
 
44.5
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 Charter, and in each case which is not remedied within the applicable grace period (if any).
 
CLAUSE 44(A) – MANDATORY SALE
 
44(A).1
Subject to Clause44(A).2, if it becomes unlawful in any applicable jurisdiction for the Owners to perform any of their obligations as contemplated by this Charter or the MOA or any other Leasing Documents or for the Owners' Financiers (if any) to perform their obligations under the Financial Instruments, the Owners shall notify the Charterers of this event and the Charterers shall be required to pay the Special Termination Sum to the Owners on the next Payment Date following such notice by the Owners or, if earlier, the date specified by the Owners in the notice delivered to the Charterers (being no earlier than the last day of any applicable grace period permitted by law), and this Charter shall terminate in accordance with the procedures set out in Clause 40 (Termination, Redelivery and Total Loss).
 
44(A).2
If the Special Termination Sum becomes payable under or pursuant to Clause 44(A).1, the Owners shall, in consultation with the Charterers for a period not less sixty (60) days from the occurrence of the circumstances resulting in the Special Termination Sum becoming payable under or pursuant to Clause 44(A).1, take all reasonable steps to mitigate any such circumstances, provided that (i) this Clause 44(A).2 does not in any way limit the obligations of any Obligor under any Leasing Documents; and (ii) the Owners are not obliged to take any steps under this Clause44(A).2 if, in the opinion of the Owners, to do so might be prejudicial to the Owners.
 
44(A).3
If any Sanctions imposed by the law or regulation of the People's Republic of China deviates from those imposed by the United Nations and the compliance with such Sanctions is or has become:
 

 (i)
Illegal / unlawful; or
 
 
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(ii)
unduly onerous (including, without limitation, a scenario where Charterers are not able to perform their global operation and trading, directly because of such Sanctions) or wholly impractical,
 
for the Charterers or the Guarantor to maintain or give effect to any of its obligations under this Charter or any of the other Leasing Documents to which each is a party in the manner it is contemplated under such Leasing Document or any of the obligations of the Charterers or the Guarantor under any Leasing Document to which it is a party are not or cease to be legal, valid, binding and enforceable, the Charterers shall be entitled to pay the Special Termination Sum to the Owners on the next Payment Date following such occurrence or, if earlier, a date specified by the Owners (being no earlier than the last day of any applicable grace period permitted by law), and this Charter shall terminate in accordance with the procedures set out in Clause 40 (Termination, Redelivery and Total Loss).
 
CLAUSE 45 – REPRESENTATIONS AND WARRANTIES
 
45.1
The Charterers represent and warrant to the Owners as of the date hereof, and on each day henceforth until the last day of the Charter Period, as follows:
 
(a)
there has been no Change of Control;
 
(b)
each Obligor is duly incorporated and validly existing under the laws of its jurisdiction of its incorporation;
 
(c)
each Obligor has the capacity, and has taken all actions and obtained all consents, approvals, authorisations, licenses or permits necessary for it:
 

 (i)
to execute each of the Leasing Documents, any Sub-charter and any Approved Management Agreement to which it is a party; and
 

 (ii)
to comply with and perform its obligations under each of the Leasing Documents, any Sub-charter and any Approved Management Agreement to which it is a party;
 
(d)
the entry into and performance by any Obligor by it of, and the transactions contemplated by, each Leasing Document, any Sub-charter and any Approved Management Agreement to which it is a party do not and will not conflict with:
 

 (i)
any law or regulation applicable to it;
 

 (ii)
its constitutional documents; or
 

 (iii)
any agreement or instrument binding upon it or constitute a default or termination event (however described) under any such agreement or instrument.
 
(e)
all the consents, approvals, authorisations, licenses or permits referred to in Clause 45.1(c) (Representations and Warranties) remain in force and nothing has occurred which makes any of them liable to revocation;
 
(f)
each of the Leasing Documents or any Assignable Sub-charter to which an Obligor is a party constitutes such Obligor's legal, valid and binding obligations enforceable against such party in accordance with its respective terms and any relevant insolvency laws affecting creditors' rights generally;
 
 
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(g)
no third 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 or any moneys payable hereunder and/or any of the other Leasing Documents or any Assignable Sub-charter;
 
(h)
all payments which an Obligor is liable to make under any Leasing Document or any Assignable Sub-charter 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 the jurisdiction of incorporation;
 
(i)
no legal or administrative action involving an Obligor involving claim(s) amounting to more than US$5,000,000 has been commenced or taken;
 
(j)
each Obligor has paid all taxes applicable to, or imposed on or in relation to it, its business or if applicable, the Vessel, except for those being contested in good faith with adequate reserves;
 
(k)
the choice of governing law as stated in each Leasing Document or any Assignable Sub-charter to which an Obligor is party to and the agreement by such party to refer disputes to the relevant courts or tribunals as stated in such Leasing Document or any Assignable Sub-charter are valid and binding against such Obligor;
 
(l)
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 such Obligor save for any obligation which is mandatorily preferred by law and not by virtue of any contract;
 
(m)
each Security Document creates (or once entered into, will create) the Security Interest which it is expressed to create with the ranking and priority it is expressed to have;
 
(n)
no Obligor is a US Tax Obligor, and none of them have established a place of business in the United States of America;
 
(o)
no Obligor, nor any of their respective Affiliates, members, (other than in the case of the Guarantor) shareholders, directors, officers, employees or agents, nor (to the best of its knowledge) any Sub-charterer:
 

 (i)
is a Restricted Person;
 

 (ii)
is owned or controlled by or acting directly or indirectly on behalf of or for the benefit of, a Restricted Person;
 

 (iii)
owns or controls a Restricted Person; or
 

 (iv)
has a Restricted Person serving as a director, officer or, to the best of its knowledge, employee;
 
(p)
each Obligor, and their respective directors, officers, (other than in the case of the Guarantor) shareholders, employees and agents and (to the best of its knowledge) any Sub-charterer is in compliance with all Sanctions laws, and none of them have been or are currently being investigated on compliance with Sanctions, they have not received notice or are aware of any claim, action, suit or proceeding against any of them with respect to Sanctions and they have not taken any action to evade the application of Sanctions;
 
 
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(q)
the Vessel is not employed, operated or managed in any manner which (i) is contrary to any Sanctions and in particular, the Vessel is not used by or to benefit any party which is a target of Sanctions or trade to any area or country where trading the Vessel to such area or country would constitute a breach of any Sanctions or published boycotts imposed by any of the United Nations, the European Union, the United States of America, the United Kingdom or the People's Republic of China; or (ii) would trigger the operation of any sanctions limitation or exclusion clause in any insurance documentation;
 
(r)
each Obligor and (to the best of its knowledge) any Sub-charterer is not in breach of any laws or regulations relating to the Vessel and its ownership, employment, operation, management and registration, including, without limitation, the ISM Code, the ISPS Code, all Environmental Laws, the laws of the Vessel's registry and in particular, all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws and each of the Obligors and (to the best of its knowledge) Sub-charterer has instituted and maintained systems, controls, policies and procedures designed to:
 

 (i)
prevent and detect incidences of bribery and corruption, money laundering and terrorism financing; and
 

 (ii)
promote and achieve compliance with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws;
 
(s)
that in relation to the Initial Sub-charter or any other Sub-charter:
 

 (i)
as at the date of this Charter or otherwise as at the date of such Sub-charter and/or at the time of delivery of such Sub-charter to the Owner (as the case may be), the copy of the Initial Sub-charter or such Sub-charter provided to the Owners is a true and complete copy and there have been no amendments, supplements or variations thereto; and
 

 (ii)
the Initial Sub-charterer or any other Sub-charterer is fully aware of the transactions contemplated under this Charter;
 
(t)
none of the Obligors nor any of their assets, in each case, has any right to immunity from set off, legal proceedings, attachment prior to judgment or other attachment or execution of judgement on the grounds of sovereign immunity or otherwise;
 
(u)
none of the Obligors is insolvent or in liquidation or administration or subject to any other formal or informal insolvency procedure, and no receiver, administrative receiver, administrator, liquidator, trustee or analogous officer has been appointed in respect of any Obligor or all or material part of their assets;
 
(v)
no Termination Event or Potential Termination Event is continuing or might reasonably be expected to result from the entry into and performance of this Charter or any other Leasing Document or any Assignable Sub-charter;
 
(w)
as at the date of this Charter, the Vessel is commercially, technically or otherwise managed under each Approved Management Agreement which remains in full force and effect;
 
(x)
as at the date of this Charter, the Charterers have not entered into any other investments, any sale or leaseback agreements, any off-balance sheet transaction or incurred any other liability or obligation (including, without limitation, any Financial Indebtedness of any obligations under a guarantee) except:
 
 
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(i)
liabilities and obligations under the Leasing Documents to which they are or, as the case may be, will be a party; or
 

 (ii)
liabilities or obligations incurred in the normal course of its business of trading, operating and chartering, maintaining and repairing the Vessel;
 
(y)
in relation to any information provided by any Obligor (or on its behalf) to the Owners for the purposes of this Charter and the other Leasing Documents:
 

 (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
 
(z)
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; and
 
(aa)
the entry by each Obligor into any Leasing Document or any Assignable Sub-charter does not in any way cause any breach, and is in all respects permitted, under the terms of any document which it is entered into.
 
CLAUSE 46 – CHARTERERS' UNDERTAKINGS
 
46.1
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)
there shall be sent to the Owners:
 

 (i)
as soon as possible, but in no event later than one hundred and eighty (180) days after the end of each financial year of the Charterers, the unaudited annual financial reports of the Charterers in each case certified as to their correctness by a director of the Charterers;
 

 (ii)
as soon as possible, but in no event later than ninety (90) days after the end of each half-year, the unaudited half-yearly accounts of the Charterers in each case certified as to their correctness by a director of the Charterers;
 

 (iii)
as soon as possible, but in no event later than one hundred and eighty (180) days after the end of each financial year of the Guarantor, the audited consolidated annual financial reports of the Guarantor; and
 

 (iv)
as soon as possible, but in no event later than ninety (90) days after the end of each half-year, the unaudited consolidated half-yearly accounts the Guarantor certified as to their correctness by a director or officer of the Guarantor,
 
in each case, the Charterers shall procure that each set of financial statements and reports delivered pursuant to Clause 46.1(a) gives, and shall procure a director of the relevant company to certify the same 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 and reports were drawn up;
 
 
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(b)
following the occurrence of a Termination Event which is continuing, they will provide or procure the provision to the Owners, at the same time as they are dispatched, copies of all notices and minutes relating to any of their extraordinary shareholders' meeting which are dispatched to their shareholders or creditors or any class of them;
 
(c)
they will provide or will procure that each Obligor provides the Owners with details of any legal or administrative action involving such Obligor or the Vessel as soon as such action is instituted or it becomes apparent to such Obligor that it is likely to be instituted and is likely to have a Material Adverse Effect;
 
(d)
they will, and will procure that each other Obligor will, obtain and promptly renew or procure the obtainment 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 or any Assignable Sub-charter to which it is a party (including, without limitation, to sell, charter and operate the Vessel);
 
(e)
they will not, and will procure that each other Obligor will not, create, assume or permit to exist any Security Interest of any kind upon any Leasing Document or any Assignable Sub-charter to which such Obligor is a party, and if applicable, the Vessel, in each case other than the Permitted Security Interests;
 
(f)
they will, and will procure that each other Obligor, will ensure that the Vessel shall be free of encumbrances except for any encumbrances permitted in writing by the Owners;
 
(g)
they will at their own cost, and will procure that each other Obligor will:
 

 (i)
do all that such Obligor to ensures that any Leasing Document or any Assignable Sub-charter to which such Obligor is a party validly creates the obligations and the Security Interests which such Obligor purports to create; and
 

 (ii)
without limiting the generality of paragraph (i), promptly register, file, record or enrol any Leasing Document or any Assignable Sub-charter to which such Obligor is 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 or any Assignable Sub-charter to which such Obligor is a party, give any notice or take any other step which, is or has become necessary or desirable for any such Leasing Document or any Assignable Sub-charter to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which such Obligor creates;
 
(h)
they will, and will procure that each other Obligors will, notify the Owners promptly upon becoming aware of:
 

 (i)
any default by any Sub-charterer or the Charterers of the terms of any Assignable Sub-charter;
 

 (ii)
an event of default or termination event howsoever called under the terms of any Assignable Sub-charter entitling either (x) the Charterers to terminate such Assignable Sub-charter or (y) the relevant Sub-charterer to terminate such Assignable Sub-charter which has not been unconditionally waived by such Sub-charterer;
 
 
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(iii)
any pollution accident, major accident and/or incident to the Vessel by any reason whatsoever;
 

 (iv)
any damage caused to or alteration of the Vessel by any reason whatsoever which exceed US$1,000,000;
 

 (v)
any alteration or modification made to the Vessel of whatever nature;
 

 (vi)
any safety incidents taking place on board the Vessel;
 

 (vii)
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 or a Total Loss;
 

 (viii)
any requirement or recommendation made in relation to the Vessel by any insurer or Classification Society or by any competent authority which is not immediately complied with;
 

 (ix)
any intended dry docking of the Vessel;
 

 (x)
any Environmental Claim which is made against the Charterers, any Sub-charterer or any Approved Manager in connection with the Vessel or any Environmental Incident involving claim(s) exceeding US$1,000,000;
 

 (xi)
any claim for breach of the ISM Code or the ISPS Code being made against the Charterers, any Approved Manager or otherwise in connection with the Vessel;
 

 (xii)
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;
 

 (xiii)
any requisition of the Vessel for hire;
 

 (xiv)
any arrest or detention of the Vessel, any exercise of any lien on that Vessel or its Earnings; and
 

 (xv)
any notice, or the Charterers becoming aware, of any claim, action, suit, proceeding or investigation against any Obligor, any of its subsidiaries or any of their respective directors, officers, employees or agents with respect to Sanctions;
 

 (xvi)
any circumstances which could give rise to a breach of any representation or undertaking in this Charter, or any Termination Event, relating to Sanctions;
 
  (xvii)
any Termination Event,
 
and will keep the Owners fully up-to-date with all developments and the Charterers will, if so requested by the Owners, provide any such certificate signed by its director(s), confirming in which that there exists no Potential Termination Event or Termination Event;
 
(i)
they will, and will procure that each other Obligor will, as soon as practicable after receiving the request, provide the Owners with any additional financial or other information relating:
 
 
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(i)
to themselves and/or the Vessel (including, but not limited to the condition and location of the Vessel);
 

 (ii)
details of the Vessel's employment status including the Vessel's employment status, operating accounts, projected employment (if the Vessel is not employed at such time) every twelve (12) months throughout the Charter Period or as soon as practicable after receiving the Owner's request; or
 

 (iii)
to any other matter relevant to, or to any provision of any Leasing Document or any Assignable Sub-charter to which it is a party,
 
which may be requested by the Owners (or the Owners' Financier (if any)) at any time;
 
(j)
they will comply, or procure compliance, and will procure that each other Obligor will comply or procure compliance, with all laws or regulations relating to its business, the Vessel and its ownership, employment, operation, management and registration, including, without limitation, the ISM Code, the ISPS Code, all Environmental Laws and the laws of the Vessel's registry provided that any non-compliance shall not materially adversely affect the obligations of a Obligor under each Leasing Document or any Assignable Sub-charter to which it is a party;
 
(k)
the Vessel shall be registered under the Flag State at all times;
 
(l)
the Vessel shall be maintained with the highest class required for the purpose of the trade of the Vessel with the Classification Society at all times and shall be free of all overdue recommendations and requirements;
 
(m)
upon request, they will provide or they will procure to be provided to the Owners the report(s) of the survey(s) conducted pursuant to Clause 7 (Surveys on Redelivery) of this Charter in form and substance satisfactory to the Owners;
 
(n)
they shall not permit the sub-chartering of the Vessel (1) on a bareboat basis (irrespective of duration) or (2) on a time charter basis exceeding thirteen (13) months (including any optional extensions thereto), other than under an Assignable Sub-charter and provided that the Charterers shall:
 

 (i)
assign all their rights and interests under such Assignable Sub-charter and shall use reasonable commercial efforts to procure that the Sub-charterer of such Assignable Sub-charter gives a written acknowledgment of such assignment in form and substance acceptable to the Owners and provide such documents as the Owners may require regarding the due execution of such Assignable Sub-charter; and
 

 (ii)
in case Assignable Sub-charter being a bareboat charter (irrespective of duration), procure the Sub-charterer of such Assignable Sub-charter to execute a general assignment to assign their rights under the Insurances, Earnings and Requisition Compensation in respect of the Vessel, in favour of the Owners, in each case, in a manner and in a form acceptable to the Owners;
 
(o)
intentionally deleted;
 
(p)
except with the Owners' prior written consent, they shall not deactivate or lay up the Vessel;
 
 
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(q)
they shall not make or pay any dividend or other distribution (in cash or in kind) in respect of its share capital following the occurrence of a Termination Event which is continuing or which would result in a Termination Event;
 
(r)
they shall comply and shall procure that each of the other Obligors (including, in each case, procuring or as the case may be, using all reasonable endeavours to procure the respective officers, directors, employees, consultants, agents and/or intermediaries of the relevant entity to do the same) or (on a best effort basis) any Sub-charterer complies with all laws and regulations in respect of Sanctions.
 
(s)
without limiting Clause 46.1(r), they will procure that:
 

 (i)
the Vessel shall not be operated, employed, managed, used by or for the benefit of a Restricted Person;
 

 (ii)
the Vessel shall not be employed in trading with any Restricted Person or in any manner contrary to Sanctions or published boycotts imposed by any of the United Nations, the European Union, the United States of America, the United Kingdom;
 

 (iii)
notwithstanding any other provision of this Charter, the Vessel shall not be permitted to call at any port in any Restricted 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 in any Obligor, any Sub-charterer or the Owners becoming a Restricted Person; and
 

 (v)
that each charterparty in respect of the Vessel shall contain, for the benefit of the Owners, language which permits refusal of employment or voyage orders if compliance would result in a breach of Sanctions and which prohibits trading to any Restricted Country;
 
(t)
they shall, and shall procure that each other Obligor shall (including procuring or as the case may be, using all reasonable endeavours to procure the respective officers, directors, employees, consultants, agents and/or intermediaries of the relevant entity to do the same) or (on a best efforts basis) any Sub-charterer shall:
 

 (i)
comply with all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws;
 

 (ii)
maintain systems, controls, policies and procedures designed to promote and achieve ongoing compliance with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws; and
 

 (iii)
in respect of the Charterers, not use, or permit or authorize any person to directly or indirectly use, the Purchase Price for any purpose that would breach any Anti-Money Laundering Laws, Anti-Terrorism Financing Laws or Business Ethics Laws;
 
 
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(u)
in respect of the Charterers, not lend, invest, contribute or otherwise make available the Purchase Price to or for any other person in a manner which would result in a violation of Anti-Money Laundering Laws, Anti-Terrorism Financing Laws or Business Ethics Laws;
 
(v)
they shall, and shall procure that each other Obligor shall promptly notify the Owners of any non-compliance, by any Obligor or their respective officers, directors, employees, consultants, agents or intermediaries or (on a best efforts basis) any Sub-charterer with all laws and regulations relating to Sanctions, Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws (including, but not limited, to notifying the Owners in writing immediately upon being aware that any Obligor or its shareholders, directors, officers or employees, or any Sub-charterer is a Restricted Person or has otherwise become a target of Sanctions) as well as provide all information (once available) in relation to its business and operations which may be relevant for the purposes of ascertaining whether any of the aforesaid parties are in compliance with such laws;
 
(w)
in respect of the management of the Vessel:
 

 (i)
they shall ensure that the Vessel be commercially and/or technically managed under an Approved Management Agreement;
 

 (ii)
they shall not appoint or permit to be appointed any commercial and/or technical manager of the Vessel unless it is an Approved Manager and such new manager enters into a Manager's Undertaking;
 

 (iii)
save with the prior written consent of the Owners (such consent not to be unreasonably withheld or delayed), they shall not agree or enter into any transaction, arrangement, document or do or omit to do anything which will have the effect of materially varying, amending or supplementing the terms of an Approved Management Agreement; and
 

 (iv)
they shall ensure that, upon the occurrence of a Termination Event, the Owners shall have the right to change any of the managers of the Vessel following a fifteen (15) days' notice to the Charterers;
 
(x)
save with the prior written consent of the Owners, they shall not agree or enter into any transaction, arrangement, document or do or omit to do anything which will have the effect of varying, amending or supplement either the material terms of any Assignable Sub-charter (and for the purpose of this paragraph, a material term means, without limitation, any term which would adversely affect the interest of the Owners and/or the Owners' Financier (if any));
 
(y)
they shall ensure that all Earnings and any other amounts received by them in connection with the Vessel are paid into the Earnings Account;
 
(z)
they will not:
 

 (i)
enter into any borrowing except for loans or advances from other members of the Group or affiliates which are unsecured and fully subordinated to the rights of the Owners under the Leasing Documents (in a manner acceptable to the Owners);
 

 (ii)
incur any liabilities or obligations to any party except for those incurred in the ordinary course of operating, chartering, repairing and maintaining the Vessel;
 
 
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(iii)
be the creditor or guarantor in respect of any loan or any form of credit to any person;
 

 (iv)
give or allow any 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 any investments, any sale or leaseback agreements, any off-balance sheet transaction, other agreement or incur any other liability or obligation (including, without limitation, any Financial Indebtedness of any obligations under a guarantee) other than the Leasing Documents or any other agreement expressly allowed under the terms of the Leasing Documents;
 

 (vi)
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, the Vessel, its Earnings or its Insurances); and
 
without prejudice to the above sub-paragraphs (z) to(vi), 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 in a bargain made at arms' length;
 
(aa)
any transaction entered into with their Affiliates shall be on arm's length basis and in good faith;
 
(bb)
they will ensure and procure that:
 

 (i)
the Market Value of the Vessel shall be ascertained from time to time in the following circumstances:
 

 (1)
upon the occurrence of a Termination Event which is continuing, at any time at the request of the Owners; and
 

 (2)
in the absence of a Termination Event which is continuing:
 

 (i)
from the first anniversary of the Commencement Date, at least once every calendar year during the Charter Period, with such report to be dated no more than thirty (30) calendar days prior to every anniversary of the Commencement Date occurring within the Charter Period or on such other date as the Owners may request; and
 

 (ii)
the amount of the fees and expenses incurred by the Owners in connection with any matter arising out of this paragraph (bb) shall be reimbursed to the Owners;
 
(cc)
intentionally deleted; and
 
(dd)
they shall not make, nor permit to be made, any modification or repairs to, or replacement, renewal or installation of, the Vessel or equipment installed on it or alter the structure, type or performance characteristics of the Vessel unless such modifications, repairs, replacement, renewal, installation or alteration:
 
 
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(i)
is required by the Classification Society for the purposes of maintaining the Vessel's classification or is required by any applicable laws and regulations relating to the Vessel;
 

 (ii)
relates to the installation of exhaust gas cleaning systems (scrubbers);
 

 (iii)
would not:
 

 (1)
have an adverse effect on the Vessel's fitness for purpose;
 

 (2)
alter the structure, type or performance characteristics of the Vessel; and/or
 

 (3)
diminish the value of the Vessel or have an adverse effect on the safety or performance of the Vessel,
 
and if such modification, repair, replacement, renewal installation or alternation is approved or satisfies the requirements of this clause, once effected, shall form part of the Vessel and the title of any equipment or parts replaced due to such modification, repair, replacement, renewal, installation or alternation shall vest in and remain with the Owners;
 
(ee)
the Vessel will not be permitted to trade in any zone which is declared a war zone by any government or the Vessel's war risks insurers, unless the Charterers have (i) obtained the written consent of the Owners (such consent not to be unreasonably withheld or delayed) prior to engaging in any such trading and (ii) (at the Charterers' expense) effected all necessary special, additional or modified insurance cover for trading in such war zone and have complied with the terms of Clause 38 (Insurances) any requirement as may be prescribed by the insurers;
 
(ff)
the Charterers shall comply, and will procure that each other Obligor, each other member of the Group and (on best effort basis) any Sub-charterer will comply, with all Sanctions and all laws and regulations relating to such person, the Vessel and its construction, ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code (including, but not limited to, the maintenance of an ISSC), all Environmental Laws, all Anti-Money Laundering Laws, Business Ethics 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 Obligor:
 

 (i)
conduct their activities in a manner consistent with Sanctions;
 

 (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 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;
 
 
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(vi)
have controls to assess authenticity of bills of lading, as necessary; and
 

 (vii)
have controls in place consistent with the Sanctions Advisory; and
 
(gg)
the Charterers:
 

 (i)
shall or shall procure that any other organisation or person whom the Charterers have contractually agreed to take over all duties and responsibilities imposed by the ISM Code (including the relevant Approved Manager as an ISM Company or any Sub-charterer) will:
 

 (1)
surrender any Emission Allowances in respect of the Vessel under any applicable Emission Scheme; and
 

 (2)
promptly upon the Owners' reasonable request, provide and submit such signed mandate letter in the form required by the Owners and the relevant administering authority and provide any other information and documents as required by the Owners and/or the relevant administering authority in relation to any applicable Emission Scheme, and, in such case, the Owners shall promptly, to the extent reasonably practicable, provide any necessary information and sign any requested mandate or other instrument as may be requested by the relevant administering authority; and
 

 (ii)
shall fulfil all obligations which may be imposed on the Owners as registered owner of the Vessel by the MARPOL Carbon Intensity Regulations;
 
(hh)
without prejudice to paragraph (gg) above, in relation to EU ETS:
 

 (i)
the Charterers acknowledge that if the Vessel stops at ports in the European Union, they will incur liabilities under EU ETS and Fuel EU Maritime;
 

 (ii)
the Charterers acknowledge and agree that if they intend to sail the Vessel into ports in the European Union, the Charterers shall register the Vessel as part of a shipping company as required under the EU ETS and shall comply in all respects with the EU ETS and Fuel EU Maritime;
 

 (iii)
if required by the competent administering authority or as reasonably required by the Owners (due to the requirements of the competent administering authority), the Charterers shall provide a letter in a format to be agreed between the Owners, the Charterers and the relevant Approved Manager (and which is in a format acceptable to the competent Emission Scheme Authority) confirming that they or the competent ISM Company have assumed responsibility for the operation of the Vessel from the Owners (the "EU ETS Maritime Letter"); and
 

 (iv)
the Charterers shall, or procure that the relevant Approved Manager as ISM Company shall, submit the EU ETS Maritime Letter to the relevant Emission Scheme Authority upon registration of the Vessel pursuant to the EU ETS and shall provide the Owners with evidence of such registration (if available by the said authority) promptly and, in such case, the Owners shall promptly, to the extent reasonably practicable, provide any necessary information and sign the aforesaid EU ETS Maritime Letter in order to allow the Charterers to proceed promptly with the submission to the relevant administering authority; and
 
 
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(ii)
the Charterers shall (and shall procure that each of the Approved Manager and where/if applicable, on a best efforts basis the Sub-charterer shall):
 

 (i)
co-operate and exchange all relevant data and information with each other in a timely manner to:
 

 (1)
facilitate compliance by the Charterers and any other Emission Scheme Participant with any applicable Emission Scheme; and
 

 (2)
enable the Charterers and any other Emission Scheme Participant to calculate the amount of Emission Allowances in respect of the Vessel which are required to be surrendered to the relevant Emission Scheme Authority for that Emission Scheme during the Charter Period; and
 

 (ii)
promptly supply to the relevant Emission Scheme Authority relating to any applicable Emission Scheme with all relevant documents (including without limitation, any relevant mandating documents required in connection with surrendering the relevant Emission Allowances to the relevant Emission Scheme Authority relating to the relevant Emission Scheme) required to be provided to such Emission Scheme Authority relating to such Emission Scheme,
 
and to do all such things necessary or advisable to ensure that the Owners, the Charterers, each Emission Scheme Participant and the Vessel will be in compliance with all Environmental Laws and the Owners shall in all such cases promptly, to the extent reasonably practicable, provide any necessary information and sign such documents, as may be reasonably requested by the Charterers in relation to the above.

CLAUSE 46(A) – INSPECTION OF VESSEL
 
46(A).1
The Owners shall be entitled to inspect or survey the Vessel, its logs and records or instruct a duly authorised 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);
 
(c)
for any purpose that the Owners deem appropriate in their absolute discretion (acting reasonably),
 
(d)
and the Charterers shall (at the Charterers' cost and expense) arrange for all transport, accommodation and on-site support required for such inspections or surveys.
 
46(A).2
The Owners shall be entitled to exercise its rights of inspection or survey as described under Clause 46(A):
 
(a)
if no Termination Event or Potential Termination Event has occurred and is continuing, once a year without interference or delay to the operation and trading of the Vessel with thirty (30) days prior notice to the Charterers and the Charterers shall bear the costs and expenses incurred in connection with such inspections and/or surveys (including, but not limited to, the fees, costs and expenses of any surveyor appointed by the Owners); or
 
 
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(b)
if a Termination Event or Potential Termination Event has occurred and is continuing, at any time with prior written notice and for as many times as the Owners deem necessary, and the Charterers shall bear the costs incurred in connection with such inspections and/or surveys (including, but not limited to, the fees, costs and expenses of any surveyor appointed by the Owners).
 
CLAUSE 47 – PURCHASE OPTION
 
47.1
Provided no Termination Event has occurred and is continuing, the Charterers shall have the option to purchase the Vessel on any date falling twelve (12) months after the Commencement Date (the "Purchase Option Date"), subject always to giving the Owners no less than sixty (60) days' (or such lesser period as agreed by the Owners) prior written notice (the "Purchase Option Notice").
 
47.2
A Purchase Option Notice shall be signed by a duly authorised officer or attorney of the Charterers and, once delivered to the Owners, is irrevocable and the Charterers shall be bound to pay to the Owners the Purchase Option Price on the Purchase Option Date.
 
47.3
Only one Purchase Option Notice may be served throughout the duration of the Charter Period.
 
47.4
Upon the Owners' receipt in full of the Purchase Option Price, the Owners shall transfer the legal and beneficial ownership of the Vessel on an "as is where is" basis (and otherwise in accordance with the terms and conditions set out at Clauses 49.1(a) and 49.1(b)) to the Charterers or their nominees and shall 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 to the Charterers (and to the extent required for such purposes the Vessel shall be deemed first to have been redelivered to the Owners).
 
CLAUSE 48 – PURCHASE OBLIGATION
 
Provided all moneys owing and payable under this Charter have been fully and irrevocably paid to the Owners, the Charterers shall be obliged to purchase from the Owners all of the Owners' beneficial and legal right, title and interest in the Vessel and all belonging to her and the Owners and the Charterers shall perform their obligations referred to in Clause 49 (Sale of the Vessel) and the Charterer shall pay the Purchase Obligation Price on the Maturity Date in relation thereto (unless the Owners agree otherwise in writing and upon such terms and conditions as the Owners may deem fit in their absolute discretion).
 
CLAUSE 49 – SALE OF THE VESSEL
 
49.1
All legal and beneficial interest and title in the Vessel shall be transferred to the Charterers by the Owners upon receipt by the Owners of the Purchase Option Price or the Purchase Obligation Price or the Termination Sum or the Special Termination Sum (as the case may be) on an "as is where is" basis and on the following terms and conditions:
 
 
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(a)
the Charterers expressly agree and acknowledge that 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 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, the Charterers hereby also waive any rights which they may have in tort in respect of any of the matters referred to under this clause and irrevocably agree that (i) 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; (ii) 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 and (iii) 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 acceptable to the Owners) or the Owners may have against the manufacturer or supplier of the Vessel or any third party;
 
(b)
the Vessel shall be free from all mortgages or any other liens, encumbrances, claims or debts whatsoever, created or permitted to exist by the Owners (save for those mortgages, liens, encumbrances or debts created under the Leasing Documents or incurred by the Charterers or arising out of or in connection with this Charter);
 
(c)
the Purchase Option Price or the Purchase Obligation Price (as the case may be) shall be paid by (or on behalf of) the Charterers to the Owners on respectively the Purchase Option Date or the Maturity Date, together with unpaid amounts of Charterhire and other moneys owing by or accrued or due from the Charterers under this Charter on or prior to the Purchase Option Date or Maturity Date (as the case may be) which remain unpaid; and
 
(d)
upon the Purchase Option Price or the Purchase Obligation Price (as the case may be) and all other moneys payable under this Charter being fully and irrevocably paid to the Owners on, and in accordance with, the terms set forth in this Charter (except in the case of Total Loss) the Owners agree (at the cost of the Charterers) to enter into (i) a bill of sale and (ii) a protocol of delivery and acceptance, and the Vessel shall accordingly be deemed delivered to the Charterers on the date and time set out in such protocol of delivery and acceptance (and to the extent required for such purposes the Vessel shall be deemed first to have been redelivered to the Owners).
 
(e)
The Owners shall not be obliged to do anything pursuant to this Clause 49 (Sale of the Vessel) or other terms of this Charter which would (in the Owners' opinion (acting reasonably)) constitute a breach of any quiet enjoyment agreement to which they are a party.
 
CLAUSE 50 – INDEMNITIES
 
50.1
The Charterers shall upon the Owners' demand, fully indemnify the Owners against, and keep the Owners harmless from, all documented claims, expenses, liabilities, losses, taxes, fees (including, but not limited to, any tax applied to any such amounts, any interest or penalties applied to such amounts and any vessel registration and tonnage fees) suffered or incurred by or imposed on the Owners arising from this Charter and any Leasing Document or Assignable Sub-charter, whether prior to, during or after termination of this Charter and whether or not the Vessel is in the possession or the control of the Charterers, including, without limitation:
 
(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;
 
 
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(b)
in connection with delivery, possession, performance, control, registration, repair, survey, insurance, maintenance, manufacture, purchase, financing, re-financing, ownership and operation of the Vessel by the Owners;
 
(c)
in connection with the prevention or release of liens or detention of or requisition, use, operation or redelivery, sale or disposal of the Vessel or any part of it;
 
(d)
in connection with putting the Vessel in a re-deliverable condition in accordance with this Charter;
 
(e)
as a consequence of any non-compliance or breach by any Obligor of any applicable tax laws or regulations or any losses caused to the Owners by any failure of the Charterers to comply with their obligations under Clause 51 (No Set-off or Tax Deduction) of this Charter (including where any such failure is occasioned by the applicable law preventing the Charterers from paying without deduction and/or from grossing up);
 
(f)
all premia and other documented expenses which are reasonably incurred by (i) the Owners in connection with or with a view to effecting, maintaining or renewing lessors' or innocent owners' interest insurance and lessors' or innocent owners' additional perils (pollution) insurance or any similar protective shipowner insurance that is taken out in respect of the Vessel on such terms and conditions as the Owners may from time to time impose, and/or (ii) the Owners or the Owners' Financier (if any) in connection with or with a view to effecting, maintaining or renewing a mortgagee's interest insurance and a mortgagee's additional perils (pollution) insurance that is taken out in respect of the Vessel on such terms and conditions as the Owners or the Owners' Financier (if any) may from time to time impose. In each case, the amount of the insurances referred to in this clause shall be equal to at least one hundred and twenty per cent. (120%) of the higher of (i) the prevailing Market Value of the Vessel at the relevant time, or (ii) the Outstanding Finance Amount at the relevant time;
 
(g)
all premia and documented expenses reasonably incurred by the Owners and/or the Owners' Financier (if any) in respect of any other insurances which the Owners and/or the Owners' Financier (if any) deem necessary and take out in respect of the Vessel, including, but without limitation to, any freight, demurrage and defence cover on such terms and conditions as the Owners may from time to time effect pursuant to Clause 38 (Insurance);
 
(h)
all other premia and documented expenses reasonably incurred by the Owners and/or the Owners' Financier (if any) in respect of the Insurances of the Vessel pursuant to Clause 38 (Insurance);
 
(i)
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, reasonable wear and tear to the Vessel only excepted;
 
(j)
all losses, documented costs or charges reasonably incurred by the Owners by reason thereof in re-taking possession or otherwise in re-acquiring the Vessel pursuant to Clause 37 (Possession of Vessel);
 
(k)
all documented losses, costs, charges and expenses incurred by the Owners in collecting any Charterhire, Advance Charterhire or other payments not paid on the due date under this Charter and in remedying any other failure of the Charterers to observe the terms and conditions of this Charter;
 
 
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(l)
any claims made by any person arising after the date of the letter of indemnity as referred to in the above Clause 49.1(d) in connection with the Vessel;
 
(m)
all losses, documented costs and expenses reasonably incurred by the Owners as a result of steps taken by the Owners under Clause 44(A).2;
 
(n)
all losses, documented costs and expenses reasonably incurred by the Owners in connection with any proposed modifications, repairs, replacement, installation or alteration of the Vessel pursuant to Clause 46.1(dd);
 
(o)
any such losses, liabilities, documented costs or expenses the Owners determine (acting reasonably) will be or has been suffered for or on account of any tax by them in respect of any Leasing Document, together with any interest, penalties, costs and expenses payable or incurred;
 
(p)
in connection with or following the occurrence of a Termination Event or any breach of any terms of any Leasing Document; and
 
(q)
all documented 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 or any Security Interest created thereunder and with any proceedings instituted by or against the Owners as a consequence of entering into any Leasing Document, taking or holding any Security Interests created thereunder or enforcing those rights, including, without limitation, any losses, costs and expenses which the Owners may from time to time sustain, incur or become liable by reason of the Owners being the registered owner of the Vessel and/or being deemed by any court or authority to be an operator or controller, or in any way concerned in the operation or control, of a Vessel.
 
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 or in connection with any Environmental Claim.
 
50.2
Without prejudice to the above Clause 50.1, if any sum (a "Sum") due from an Obligor under the Leasing Documents, 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:
 
(a)
making or filing a claim or proof against that Obligor; or
 
(b)
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
 
the Charterers shall, as an independent obligation, on demand, indemnify the Owners 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.
 
 
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50.3
The obligations of the Charterers under Clause 50 (Indemnities) and in respect of any Security Interest created pursuant to the Security Documents will not be affected or discharged by an act, omission, matter or thing which would reduce, release or prejudice any of its obligations under Clause 50 (Indemnities) or in respect of any Security Interest created pursuant to the Security Documents (without limitation and whether or not known to it or any Obligor) including:
 
(a)
any time, waiver or consent granted to, or composition with, any Obligor or other person;
 
(b)
the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of the Obligor or any of its Affiliates;
 
(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 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 an Obligor or any other person;
 
(e)
any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Leasing Document or any other document or security;
 
(f)
any unenforceability, illegality or invalidity of any obligation of any person under any Security Document or any other document or security; or
 
(g)
any insolvency or similar proceedings.
 
50.4
In consideration of the Charterers requesting the Other Owner to charter the Other Vessel to the Other Charterer under the Other Charter, the Charterers hereby irrevocably and unconditionally undertake to pay immediately on demand, and on full indemnity basis, from the Other Owner such amounts in respect of all claims, expenses, liabilities, losses, fees of every kind and nature and all other moneys due, owing and/or payable to the Other Owner under or in connection with the Other Charter, and to indemnify and hold the Other Owner harmless against all such moneys, costs, fees and expenses.
 
50.5
Notwithstanding anything to the contrary herein (but subject and without prejudice to Clause 33 (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.
 
50.6
All rights which the Charterers have at any time (whether in respect of this Charter or any other transaction) against the other Obligors or any of them shall be fully subordinated to the rights of the Owners under the Leasing Documents and the Leasing Documents (as defined in the Other Charter) (collectively, for the purposes of this Clause 50.6, "Project 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 the Project Leasing Documents or by reason of any amount becoming payable, or liability arising, under this clause:
 
 
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(a)
to be indemnified by the Other Charterer or the Guarantor or any of them;
 
(b)
to claim any contribution from any third-party providing security for, or any other guarantor of, the Other Charterer's or the Guarantor's obligations under the Project Leasing Documents;
 
(c)
to take any benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Other Charterer or the Guarantor or any of them under the Project Leasing Documents or of any other guarantee or security taken pursuant to, or in connection with, the Project Leasing Documents by any of the aforesaid parties;
 
(d)
to bring legal or other proceedings for an order requiring any of the Other Charterer or the Guarantor or any of them to make any payment, or perform any obligation, in respect of any Project Leasing Document;
 
(e)
to exercise any right of set-off against any of the Other Charterer or the Guarantor or any of them; and/or
 
(f)
to claim or prove as a creditor of the Other Charterer or the Guarantor or any of them,
 
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 or the Other Owner by the Other Charterer or the Guarantor or any of them under or in connection with the relevant Project Leasing Documents to be repaid in full on trust for the Owners or the Other Owner and shall promptly pay or transfer the same to the Owners or the Other Owner as may be directed by the Owners.
 
50.7
The Charterers hereby irrevocably agree to indemnify and hold harmless the Owners against any claim, expense, liability or loss incurred by the Owners (and which is notified to the Charterers) in liquidating or employing deposits from the Owners' Financier or third parties to fund the acquisition of the Vessel pursuant to the MOA, on or prior to the Commencement Date.
 
50.8
Notwithstanding anything to the contrary herein (but subject and without prejudice to Clause 33 (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.
 
CLAUSE 51 – NO SET-OFF OR TAX DEDUCTION
 
51.1
All payments of the Charterhire, the Advance Charterhire, the Purchase Obligation Price, the Purchase Option Price, the Upfront Fee or and any other payment made from the Charterers to enable the Owners to pay all amounts under a Leasing Document shall be paid punctually:
 
(a)
without any form of set-off (other than as agreed under the MOA and this Charter), cross-claim or condition and in the case of the Charterhire, the Advance Charterhire or the Upfront Fee, without previous demand unless otherwise agreed with the Owners;
 
 
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(b)
free and clear of all present and future taxes, levies, duties or deduction of any nature whatsoever, whether levied now or in the future; and
 
(c)
free and clear of any tax deduction or withholding unless required by law.
 
51.2
Without prejudice to Clause 51.1, 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.
 
51.3
In this Clause "tax deduction" means any deduction or withholding for or on account of any present or future tax, other than a FATCA Deduction.
 
CLAUSE 52 – INCREASED COSTS
 
52.1
This Clause 52 (Increased Costs) 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) or the Owners' Financier has incurred or will incur an "increased cost".
 
52.2
In this Clause 52, "increased cost" means, in relation to the Owners or the Owners' Financier:
 
(a)
An additional or increased cost incurred as a result of, or in connection with, as the case may be, (i) the Owners having entered into, or being a party to, this Charter, of funding the acquisition of the Vessel pursuant to the MOA or performing their obligations under this Charter or (ii) the Owner's Financier entering into the funding arrangements described under Clause 58.2(a);
 
(b)
a reduction in the amount of any payment to the Owners under this Charter or in the effective return which such a payment represents to the Owners on their capital;
 
(c)
an additional or increased cost of funding the acquisition of the Vessel pursuant to the MOA; or
 
(d)
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Owners under this Charter,
 
 
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and for the purposes of this Clause 52.2 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.
 
52.3
Subject to the terms of Clause 52.1, the Charterers shall pay to the Owners, on the Owners' demand, the amounts which the Owners from time to time notify the Charterers to be necessary to compensate the Owners for the increased cost.
 
CLAUSE 53 – FATCA
 
53.1
Defined terms
 
For the purposes of this Clause 53 (FATCA), 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.
 
"Relevant Party" means any of the parties to this Charter and the Leasing Documents.
 
"IRS" means the United States Internal Revenue Service or any successor taxing authority or agency of the United States government.
 
53.2
FATCA Information
 
(a)
Subject to paragraph (c) below, each Relevant Party shall within ten (10) Business Days of a reasonable request by another Relevant Party:
 

 (i)
confirm to that other party whether it is a FATCA Exempt Party or is not a FATCA Exempt Party; and
 
 
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(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 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, that party shall so notify all other Relevant Parties 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, the other Leasing Documents as if it is a FATCA Non-Exempt Party; and
 

 (ii)
if that party failed to confirm its applicable passthrough percentage then such party shall be treated for the purposes of this Charter, the other Leasing Documents (and payments made thereunder) as if its applicable passthrough 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.
 
53.3
FATCA Deduction and gross-up by Relevant Party
 
(a)
If the representation made by the Charterers under Clause 45.1(n) (Representations and Warranties) 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 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.
 
53.4
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.
 
53.5
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 53.3 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 54 – GENERAL APPLICATION OF PROCEEDS
 
54.1
Any Net Trading Proceeds, Net Sales Proceeds, Total Loss Proceeds, any proceeds realized or received by the Owners in connection with the enforcement of the Security Documents (unless otherwise specified in the Security Documents), any amounts received by the Owners from the Other Charterer pursuant to Clause 50.4 of the Other Charter 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 or the Special Termination Sum (as the case may be) (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 or the Special Termination Sum (as the case may be));
 
(b)
secondly, in or towards satisfaction of the Charterers' obligation to pay the Termination Sum or the Special Termination Sum (as the case may be) (or such portion of it that then remains unpaid) in any order of application in the amounts comprising the Termination Sum or the Special Termination Sum (as the case may be) 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 and subject to no actual or contingent liabilities existing at the relevant time.
 
 
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CLAUSE 55 – CONFIDENTIALITY
 
55.1
The Parties agree to keep the terms and conditions of this Charter and any other Leasing Documents (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, by a governmental order, decree, regulation or rule, by an order of a court, tribunal or listing exchange of the Relevant Jurisdiction, provided that the disclosing Party shall give written notice of such required disclosure to the other Party prior to the disclosure;
 
(c)
it is required to be disclosed by any stock exchange and/or securities and exchange commission rules (including, but not limited to, the US Securities and Exchange Commission Rule or the Nasdaq Rules);
 
(d)
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;
 
(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), provided that such person receiving Confidential Information shall undertake that it would not 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;
 
(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 either paragraph (e) or (f) (including the employees, officers and directors thereof);
 

 (ii)
professional advisers retained by a disclosing party; or
 

 (iii)
persons advising on, providing or considering the provision of financing to the disclosing party or an Affiliate,
 
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; or
 
(g)
with the prior written consent of all Parties.
 
CLAUSE 56 – PARTIAL INVALIDITY
 
If, at any time, any provision of a 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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CLAUSE 57 – SETTLEMENT OR DISCHARGE CONDITIONAL
 
57.1
Any settlement or discharge under any Leasing Document between the Owners and any Obligor or any other person shall be conditional upon no security or payment to the Owners by any Obligor or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.
 
57.2
If the Owners consider (acting reasonably) that an amount paid or discharged by, or on behalf of, an Obligor in purported payment or discharge of an obligation of that Obligor to the Owners under the Leasing Documents is capable of being avoided or otherwise set aside on the liquidation or administration of that Obligor or otherwise, then that amount shall not be considered to have been unconditionally and irrevocably paid or discharged for the purposes of the Leasing Documents.
 
CLAUSE 58 – CHANGES TO THE PARTIES
 
58.1
Assignment or transfer by the Charterers
 
The Charterers shall not assign their rights or transfer by novation any of their rights and obligations under the Leasing Documents except with the prior consent in writing of the Owners.
 
58.2
Assignment or transfer by the Owners
 
Subject to Clause 35 (Quiet Enjoyment) above, the Charterers acknowledge that, at any time during the Charter Period:
 
(a)
the Owners are entitled to enter into certain funding arrangements with their financier(s), (the "Owners' Financier"), in order to finance in part or in full of the Purchase Price, 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 the prior consent of the Charterers:
 

 (i)
execute a ship mortgage over the Vessel or any other Financial Instrument in favour of an Owners' Financier;
 

 (ii)
assign their rights and interests to, in or in connection with this Charter and any other Leasing Document in favour of that Owners' Financier;
 

 (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 that Owners' Financier;
 

 (iv)
any other Financial Instrument in favour of the Owners' Financier; and
 

 (v)
enter into any other document or arrangement which is necessary to give effect to such financing arrangements; and
 
 
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(c)
the Charterers undertake to comply and shall procure that the other Obligors shall 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' Financier in conformity with any Financial Instrument. The Charterers further agree and acknowledge all relevant terms, conditions and provisions of each Financial Instrument (if any) and agree that they and any other Obligor shall acknowledge any such assignments and other security in writing in any form that may be required by the Owners' Financier.
 
(d)
the Owners may assign or transfer by novation (or otherwise) any of its rights and obligations under the Leasing Documents and/or sell the Vessel at any time:
 

 (i)
to an Affiliate of the Owners or an Owners' Financier without any consent of the Charterers;
 

 (ii)
to another lessor or financial institution or trust, fund, leasing company 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 (for the avoidance of doubt, expressly excluding any hedge fund, private equity fund or any equity owned or controlled by a competitor of the Charterers),
 

 (A)
with the prior written consent of the Charterers (such consent not to be unreasonably withheld or delayed) if there is no Termination Event on the date when the consent is sought; or
 

 (B)
without any consent of the Charterers following the occurrence of a Termination Event which is continuing; and
 

 (iii)
in accordance with the Charterers' exercise of the Purchase Option under Clause 47 or of the Purchase Obligation under Clause 48.
 
(e)
Following any change in the registered ownership of the Vessel permitted pursuant to Clause 58.2, this Charter would continue on identical terms (save for logical, consequential or mutually agreed amendments), and the Charterers hereby agree that they shall be liable to the aforesaid new owner of the Vessel for its performance of all obligations pursuant to this Charter after change of the registered ownership of the Vessel from the Owners to such new owner and shall procure that:
 

 (i)
any other Obligor which is a party to a Leasing Document:
 

 (A)
remains liable to the new owner of the Vessel for its performance of all obligations pursuant to such Leasing Document; and
 

 (B)
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 as from the completion of the relevant sale; and
 

 (ii)
the Guarantor shall each execute a guarantee in favour of the new owners for the inter alia, obligations of the Charterers under this Charter, in substantially in the same form as the Guarantee (or such other form as the Guarantor and the new owners may agree).
 
 
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58.3
The Charterers agree and undertake to (and will procure the other Obligor to) enter into any such usual documents as the Owners shall require to complete or perfect the assignment or transfer of the Vessel (with the benefit and burden of this Charter and other Leasing Documents) and the Owner's rights and obligations under the Leasing Documents pursuant to Clause 58.2.
 
58.4
Unless otherwise expressly stated in this Charter, each of the Owners and the Charterers shall bear their own costs arising from any assignment, transfer or sale of the Vessel by the Owners as permitted under this Clause 58.2.
 
CLAUSE 59 – MISCELLANEOUS
 
59.1
The Charterers waive any rights of sovereign immunity which they or any of their assets may enjoy in any jurisdiction and subjects itself to civil and commercial law with respect to their obligations under this Charter.
 
59.2
No term of this Charter is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not party to this Charter, save that the Other Owner may rely on the rights conferred on them under Clause 50.2.
 
59.3
This Charter and each 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.
 
59.4
These additional clauses shall be read together with the Standard Bareboat Charter, and shall constitute a single instrument. In the case of any conflict between the provisions of these additional terms and the Standard Bareboat Charter, these additional terms shall prevail.
 
59.5
This Charter contains all the understandings and agreements of whatsoever kind and nature existing between the parties in respect of this Charter, the rights, interests, undertakings agreements and obligations of the parties to this Charter and shall supersede all previous and contemporaneous negotiations and agreements.
 
59.6
The termination of this Charter for any cause whatsoever shall not affect the right of the Owners to recover from the Charterers any money due to the Owners on or before the termination in consequence thereof and all other rights of the Owners (including, but not limited to, any rights, benefits or indemnities which are expressly provided to continue after the termination of this Charter) are reserved hereunder.
 
59.7
Nothing in this Charter creates, constitutes or evidences any partnership, joint venture, agency, trust or employer/employee relationship between the parties, and neither party may make, or allow to be made any representation that any such relationship exists between the parties. Neither party shall have the authority to act for, or incur any obligation on behalf of, the other party, except as expressly provided in this Charter.
 
59.8
The rights, powers and remedies provided in this Charter are cumulative and not exclusive of any rights, powers or remedies at law or in equity unless specifically otherwise stated.
 
59.9
The Owners may set off any matured and/or contingent obligation due from any Obligor under the Leasing Documents (to the extent beneficially owned by the Owners) against any obligation (whether matured or not) owed by the Owners to that or any other Obligor, regardless of the place of payment or currency of either obligation. If the obligations are in different currencies, the Owners may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. Other than as explicitly set out in the Leasing Documents, no member of the Group may set off any matured and/or contingent obligation due from the Owners under the Leasing Documents (to the extent beneficially owned by any Obligor) against any obligation (whether matured or not) owed by any member of the Group to the Owners, regardless of the place of payment or currency of either obligation.
 
 
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CLAUSE 60 - RECORDATION OF FINANCING CHARTER
 
60.1
Without prejudice and in addition to the Owners' rights under this Charter:
 
(a)
for all purposes under Section 100A of the Liberian Maritime Law (the "Maritime Law"), the Owners and the Charterers acknowledge and agree that (i) this Charter shall be construed as a "financing charter", as such term is defined in Section 29(4) of the Maritime Law, and (ii) this Charter is intended to be deemed under the Maritime Law as a preferred mortgage over the Vessel granted by the Charterers, as owner, in favour of the Owners, as mortgagee;
 
(b)
in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Charterers hereby grant, convey, mortgage, pledge, confirm, assign, transfer and set over the whole of the Vessel to the Owners, as mortgagee, as security for the performance and observance of and compliance with all their obligations as Charterers under, and the covenants, terms and conditions contained in, this Charter and the other Leasing Documents to which the Charterers are or may become a party; and
 
(c)
At their sole cost and expense, the Charterers shall cause this Charter to be recorded as a financing charter in accordance with the Maritime Act and will perform all such acts as may be reasonably requested by the Owners to accomplish the said recordation. For the purposes of recording this Charter under Section 100A of the Maritime Law as a financing charter:
 

 (i)
the name of the Vessel is m.v. "Squireship";
 

 (ii)
the official number of the Vessel is 17230;
 

 (iii)
the date of this Charter is ___________________ 2025;
 

 (iv)
the name and address of the Owners are:
 
INSIGHT 22 HOLDING LIMITED
 
6/F., Manulife Place, 348 Kwun Tong Road, Kowloon, Hong Kong;
 

 (v)
the name and address of the Charterers are:
 
SQUIRE OCEAN NAVIGATION CO.
 
80 Broad Street, Monrovia, Liberia


 (vi)
the maximum aggregate of the nominal amount of all charterhire payments, termination payments, purchase obligation, and purchase or put option amounts which could under any circumstances be due and payable under this Standard Bareboat Charter and the other Leasing Documents, exclusive of any interest, indemnities, expenses or fees, is US$34,500,000 which is the total amount secured hereby.
 
 
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(d)
The Charterers will place and at all times retain, a properly certified copy of this Charter on board the Vessel with the Vessel's papers and will cause such certified copy of this Charter and the Vessel's registration document to be exhibited to any and all persons having business therewith which might give rise to any lien thereon, other than liens for crew's wages, general average and salvage. In addition, the Charterers will place and keep prominently displayed in the chart room and in the master's cabin of the Vessel in a conspicuous place, a notice, framed under glass, printed in plain type of such size that the paragraph of reading material shall cover a reasonable space acceptable to the Owners reading as follows:
 
"THIS VESSEL IS OWNED BY INSIGHT 22 HOLDING LIMITED AND IS UNDER CHARTER TO SQUIRE OCEAN NAVIGATION CO. PURSUANT TO THE TERMS OF THE STANDARD BAREBOAT CHARTER DATED AS OF ____________________ (THE "CHARTER"). UNDER THE TERMS OF THE CHARTER, WHICH IS A FINANCING CHARTER UNDER THE MARITIME LAWS OF THE REPUBLIC OF LIBERIA, NEITHER THE CHARTERERS, NOR ANY SUB-CHARTERER, NOR THE MASTER NOR ANY OTHER PERSON HAS THE RIGHT, POWER OR AUTHORITY TO CREATE, INCUR OR PERMIT TO BE PLACED OR IMPOSED UPON THIS VESSEL ANY LIEN WHATSOEVER OTHER THAN PERMITTED SECURITY INTERESTS AS DEFINED IN THE CHARTER."
 
(e)
The Charterers hereby consent and agree, at their sole cost and expense, to the recordation of the Charter under 100A of the Maritime Law and will perform all such acts as may be reasonably requested by the Owners to accomplish said recordation.
 
(f)
Without prejudice to Clauses 60.1(a) to 60.1(e) above, to the extent law other than English law or Liberian law is deemed to apply to this Charter and the Charterers are deemed owners of the Vessel, the Charterers and Owners hereby further agree as follows:
 

 (i)
For the purpose of securing the obligations of the Charterers under this Charter and the other Leasing Documents to which the Charterers are or may become a party, the Owners and Charterers intend and agree that (i) this Charter shall be deemed to be a security agreement within the meaning of Article 9 of the Uniform Commercial Code (the "UCC") of the State of New York or of any other state of the United States of America is found to be applicable to the Charter, and (ii) pursuant to sub-paragraph (ii) of this paragraph (f) below, this Charter also creates a "security interest" under Section 1-203 of the UCC in all of the Charterers' right, title and interest in, to and under the Vessel and the Leasing Documents to which the Charterers are or may become a party (collectively, the "Collateral").
 

 (ii)
To secure the obligations of the Charterers under this Charter and the other Leasing Documents to which the Charterers are or may become a party, the Charterers hereby grant to the Owners a lien on and security interest in and mortgage lien on all of the Collateral. The Charterers promptly shall take such action as may be necessary or advisable in the Owners' opinion to ensure that the lien, security interest and mortgage on the Collateral will be a perfected lien, security interest and mortgage of first priority under applicable law and will be maintained as such until payment and performance in full of all the obligations of the Charterers under the Leasing Documents to which the Charterers are or may become a party. Upon the occurrence and during the continuance of a Termination Event, the Owners shall have all rights and remedies under Clause 44 (Termination Events) of this Charter or otherwise provided to a secured creditor upon a default under the UCC or provided to a mortgagee of a ship under applicable law.
 
 
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(b)
The Charterers hereby consent and agree, at their sole cost and expense, to the filing of such UCC financing statements as the Owners may deem reasonably necessary to perfect the security interest intended to be created hereby and will perform all such acts as may be reasonably requested by the Owners to accomplish said perfection.
 
CLAUSE 61 - DEFINITIONS
 
61.1
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 to be signed by the Charterers at Delivery.
 
"Account Bank" means ALPHA BANK S.A. or such other bank approved by the Owners.
 
"Account Security" means the account security executed or to be executed by the Charterers in favour of the Owners over the Earnings Account in agreed form.
 
"Advance Charterhire" means the difference between the Purchase Price and the Finance Amount.
 
"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.
 
"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 European Union, the United Kingdom 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 any Obligor or any Sub-charterer or the Owners; (b) of any jurisdiction in which any Obligor or any Sub-charterer or the Owners conduct business; or (c) to which any Obligor or any Sub-charterer or the Owners is subjected or subject to.
 
"Anti-Terrorism Financing Laws" means all applicable anti-terrorism laws, rules, regulations or guidelines of any jurisdiction, including and not limited to the United States of America or the People's Republic of China which are: (a) issued, administered or enforced by any governmental agency, having jurisdiction over any Obligor or any Sub-charterer or the Owners; (b) of any jurisdiction in which any Obligor or the Owners conduct business; or (c) to which any Obligor or any Sub-charterer or the Owners are subjected or subject to.
 
"Approved Commercial Manager" means:
 

 (a)
Seanergy Management Corp., a corporation incorporated and validly existing under the laws of the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960; or
 

 (b)
Fidelity Marine Inc., a corporation incorporated and validly existing under the laws of the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960,
 
 
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SINGAPORE/91706047v1
or any other Affiliates of the Charterers or other international and reputable manager which may, with the prior written approval of the Owners (such approval not to be unreasonably withheld or delayed) be appointed as a commercial manager of the Vessel, collectively, the "Approved Commercial Managers".
 
"Approved Managers" means collectively the Approved Commercial Manager and the Approved Technical Manager, each of any of them, as the context may require, an "Approved Manager".
 
"Approved Management Agreement" means:
 

 (a)
the service agreement in respect of the Vessel dated 11 September 2015 and entered into between Seanergy Management Corp. and the Charterers, as amended from time to time;
 

 (b)
the commercial management agreement in respect of the Vessel dated 2 March 2015 and entered into between Seanergy Management Corp. and Fidelity Marine Inc., as amended and supplemented from time to time, including, but not limited to, by a deed of accession dated 10 November 2015 made by the Charterers in favour of Fidelity Marine Inc;
 

 (c)
the ship technical agreement in respect of the Vessel dated 14 February 2023 and entered into between Seanergy Shipmanagement Corp. and the Charterers, as amended and supplemented from time to time,
 
or any such other commercial, technical and/or crew management agreement in respect of the Vessel as may be approved by the Owners in writing, collectively, the "Approved Management Agreements".
 
"Approved Technical Manager" means V. Ships Greece Ltd., a company incorporated and validly existing under the laws of Bermuda whose registered address is at 3rd Floor, Par-La-Ville Place, 14 Par-La-Ville Road, Hamilton HM 08, Bermuda; Seanergy Shipmanagement Corp., a corporation incorporated and validly existing under the laws of the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 or any other Affiliates of the Charterers or other international and reputable manager which may, with the prior written approval of the Owners be appointed as a technical manager of the Vessel, collectively, the "Approved Technical Managers".
 
"Approved Valuer" means Arrow, Fearnleys, Clarksons, Maersk, Barry Rogliano Salles, Howe Robinson, Weselmann, Braemar, Lorentzen & Stemoco, BRS, Grieg Shipbrokers, Galbraiths, Simpson Spence Young (SSY), Seaborne Valuation or such other independent and reputable shipbroker nominated by the Charterers and approved by the Owners.
 
"Assignable Sub-charter" means, the Initial Sub-charter or any charter or any other form of employment contract relating to the Vessel, whether or not already in existence (i) on a bareboat basis (irrespective of duration) or (ii) on a time charter basis with a duration exceeding or capable of exceeding thirteen (13) months (inclusive of options to renew).
 
"Associated Vessel" means any ship or 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 Affiliates of the Guarantor.
 
 
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"Breakfunding Costs" means all breakfunding costs and expenses 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 do not fall on a Payment Date.
 
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for business in Shanghai, Hong Kong, New York, Athens and:
 

 (a)
in respect of a day on which a payment is required to be made or other dealing is due to take place under a Leasing Document or an Assignable Sub-charter in Dollars, also a day on which commercial banks are open in New York City; and
 

 (b)
in relation to the fixing of an interest rate, also a day (other than a Saturday or Sunday) which is a US Government Securities Business Day.
 
"Business Ethics Laws" means any laws, regulations and/or other legally binding requirements or determinations in relation to corruption, fraud, collusion, bid-rigging or anti-trust, human rights violations (including forced labour and human trafficking) which are applicable to any Obligor or any Sub-charterer or the Owners or to any jurisdiction where activities are performed and which shall include but not be limited to (i) the United Kingdom Bribery Act 2010 and (ii) the United States Foreign Corrupt Practices Act 1977 and all rules and regulations under each of (i) and (ii).
 
"Buyers" means the Owners acting in their capacity as buyer of the Vessel under the MOA.
 
"Cancelling Date" has the meaning given to such term in the MOA.
 
"Change of Control" occurs, if, at any time:
 

 (a)
the Charterers cease to be wholly legally and beneficially owned or controlled by the Guarantor;
 

 (b)
any group of the existing members of the board of directors of the Guarantor, as at the date of this Charter, which ordinarily comprises a majority of the board of directors of the Guarantor, does not ordinarily comprise a majority of the board of directors of the Guarantor;
 

 (c)
the Disclosed Person ceases to own legal and ultimately beneficially at least 49.99% of the voting power of the issues and outstanding share capital, of the Guarantor;
 

 (d)
a person or persons acting in concert (other than the Disclosed Person):
 

 (i)
have the right of the ability to control, either directly or indirectly, the affairs, or composition of the majority of the board of directors (or equivalent of it), of the Guarantor; or
 

 (ii)
own legally and ultimately beneficially more than the voting power of the issued and outstanding share capital of the Guarantor which is owned by the Disclosed Person; or
 
 
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(e)
the Disclosed Person ceases to be the Chief Executive Officer of the Guarantor.
 
"Charter Period" means the period commencing on the Commencement Date and described in Clause 32.2 unless it is either terminated earlier or extended in accordance with the provisions of this Charter.
 
"Charterhire" means each of, or as the context may require, all of the quarterly instalments of hire payable under this Charter comprising of a Fixed Charterhire element and a Variable Charterhire element.
 
"CISADA" means the United States Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 as it applies to non-US persons.
 
"Classification Society" means BV or such other classification society as may be approved in writing by the Owners.
 
"Commencement Date" means the date on which Delivery takes place.
 
"Delivery" means the delivery of the legal and beneficial interest in the Vessel from the Owners to the Charterers hereunder.
 
"Disclosed Person" means the holder of the Series B preferred shares of the Guarantor as communicated by the Charterers to the Owners prior to the signing of this Charter.
 
"Dollars", "US$" and "$" 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) and which arise out of the use or operation of the Vessel, including (but not limited to):
 

 (a)
all freight, hire and passage moneys, compensation payable in the event of requisition of the Vessel for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Vessel; and
 

 (b)
if and whenever the Vessel is employed on terms whereby any moneys falling within paragraph (a) 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.
 
"Earnings Account" means, an account designated as an "Earnings Account" in the name of the Charterers with the Account Bank or any other replacement earnings account in the name of the Charterers with any other bank which may, with the prior written consent of the Owners, be opened.
 
"Emission Allowances" means an allowance, credit, quota, permit or equivalent, representing a right of a vessel to emit a specified quantity of greenhouse gas emissions recognised by the Emission Scheme.

"Emission Scheme" means a greenhouse gas emissions trading scheme which for the purposes of this Charter shall include the EU ETS and any other similar systems imposed by applicable lawful authorities that regulate the issuance, allocation, trading or surrendering of Emission Allowances.

 
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"Emission Scheme Authority" means in relation to an Emission Scheme, the relevant authority administering or otherwise implementing such Emissions Scheme.

"Emission Scheme Participant" means in relation to an Emission Scheme, any person which is responsible for complying with the requirements of such Emissions Scheme.

"Environmental Claim" means:
 

 (a)
any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or which relates to any Environmental Law; or
 

 (b)
any claim by any other person which relates to an Environmental Incident,
 
and "claim" means a claim for damages, compensation, fines, penalties or any other payment; 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 of Environmentally Sensitive Material from the Vessel; or
 

 (b)
any incident in which Environmentally Sensitive Material is released 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 liable to be arrested, attached, detained or injuncted and/or the Vessel and/or the Owners and/or the Charterers and/or any Sub-charterer and/or any other operator or manager of the Vessel is at fault or otherwise liable to any legal or administrative action; or
 

 (c)
any other incident involving the Vessel in which Environmentally Sensitive Material is released otherwise than from the Vessel and in connection with which the Vessel is actually arrested and/or where the Owners and/or the Charterers and/or any Sub-charterer and/or any other operator or manager of the Vessel is at fault or otherwise liable to any legal or administrative action.
 
"Environmental Law" means any law relating to pollution or protection of the environment, to the carriage or releases of Environmentally Sensitive Material.
 
"Environmentally Sensitive Material" means oil, oil products and any other substances (including any chemical, gas or other hazardous or noxious substance) which are (or are capable of being or becoming) polluting, toxic or hazardous.
 
"Escrow Agent" means Watson Farley & Williams LLP acting through its office at Suites 4610-4619, Jardine House, 1 Connaught Place, Hong Kong.
 
"Escrow Agreement" means the escrow agreement made or to be made between, inter alia, the Charterers, the Owners, the Existing Financier and the Escrow Agent setting out the terms of appointment of the Escrow Agent and the manner in which the Escrow Agent will hold and release the Net Purchase Price (as defined in the MOA).
 
 
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"EU ETS" means the European Union Emissions Trading System specifically applicable to shipping pursuant to the Directive (EU) 2023/959 of the European Parliament and of the Council of 10 May 2023 amending European Directive 2003/87/EC and the Commission Implementing Regulation (EU) 2023/2599 of 22 November 2023 laying down rules for the application of Directive 2003/87/EC of the European Parliament and of the Council as regards the administration of shipping companies by administering authorities in respect of a shipping company.
 
"EU ETS Maritime Letter" shall have the meaning as defined under Clause 46.1(hh)(iii).
 
"Existing Facility Agreement" means the loan agreement dated 9 August 2021 entered into between, inter alia, the Existing Financier as lender and the Sellers as borrower, as amended and supplemented by a first supplemental letter dated 1 December 2021, a first supplemental agreement dated 30 June 2022 and a second supplemental agreement dated 10 November 2023.
 
"Existing Financier" has the meaning given to that term in the MOA.
 
"Existing Mortgages" means collectively, the first preferred ship mortgage in respect of the Vessel dated 11 August 2021 as amended by amendment no.1 to first preferred ship mortgage dated 10 November 2023 and the second preferred ship mortgage in respect of the Vessel dated 21 June 2022.
 
"Existing Mortgage Security Documents" means collectively:
 

 (a)
the Existing Mortgages;
 

 (b)
the account security executed by the Charterers in favour of the Existing Financier in respect of the Earnings Account; and
 

 (c)
any other security documents relating to the Vessel created in favour of the Existing Financier.
 
"Fee Letter" means any fee letter dated on or around the date hereof setting out the upfront fee or other fee payable by the Charterers to the Owners pursuant to Clause 41.1.
 
"Finance Amount" means US$18,000,000.
 
"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;
 
 
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(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 any mortgage, deed of covenant, the general assignment or such other financial security instruments as may be granted to the Owners' Financier as security for the obligations of the Owners in relation to the financing or refinancing of the acquisition of the Vessel.
 
"Fixed Charterhire" has the meaning given to such term in Clause 36.3.
 
"Flag State" means the flag state as stated in Box 5 of this Charter or such other flag state as may be approved in writing by the Owners (such approval not to be unreasonably withheld or delayed).
 
"Fuel EU Maritime" means Fuel EU Maritime Regulation 2023/1805 dated 13 September 2023 on the use of renewable and low-carbon fuels in maritime transport, and amending Directive 2009/16/EC.
 
"Funding Rate" means any individual rate notified by the Owners to the Charterers pursuant to Clause 36.17(ii).
 
"General Assignment" means the general assignment, in agreed form, executed or to be executed by the Charterers in favour of the Owners in respect of the Vessel, pursuant to which the Charterers shall, inter alia, assign its rights in relation to (i) Insurances, Earnings and Requisition Compensation and (ii) any Assignable Sub-charter, in favour of the Owners.
 
"Group" means the Guarantor and its subsidiaries (whether directly or indirectly owned) from time to time.
 
"Guarantee" means a guarantee executed by the Guarantor in favour of the Owners on or about the date of this Charter.
 
"Guarantor" mean Seanergy Maritime Holdings Corp., a corporation incorporated under the laws of the Republic of the Marshall Islands with its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 acting in its capacity as guarantor in connection with, amongst others, the Charterers' obligations in connection with this Charter.
 
"Historic Term SOFR" means, in relation to a Term, the most recent applicable Term SOFR for three (3) months 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 it is a subsidiary.
 
 
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"IAPPC" means a valid international air pollution prevention certificate for the Vessel issued pursuant to the MARPOL Protocol.

"Initial Sub-charter" means the time charter party of the Vessel dated 17 October 2018 and made between the Charterers as owners and the Initial Sub-charterer as charterers, as amended and supplemented from time to time.
 
"Initial Sub-charterer" means ST Shipping and Transport Pte. Ltd., a company incorporated and existing under the laws of Singapore with its registered address at 1 Temasek Avenue, #34-01 Millenia Tower, Singapore 039192.
 
"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.
 
"Interest Rate" means, in relation to each Term and subject to Clause 36.17, the percentage rate of interest per annum which is the aggregate of (i) the applicable Reference Rate for such Term and (ii) Margin.
 
"Interpolated Historic Term SOFR" means, in relation to any Term, 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 three (3) months; or
 

 (ii)
if no such Term SOFR is available for a period which is less than three (3) months, 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) the shortest period (for which Term SOFR is available) which exceeds three (3) months.
 
"Interpolated Term SOFR" means, in relation to any Term, the rate (rounded to the same number of decimal places as Term SOFR) which results from interpolating on a linear basis between:
 

 (a)
either:
 
 
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(i)
the applicable Term SOFR (as of the Quotation Day in respect of that Term) for the longest period (for which Term SOFR is available) which is less than three (3) months; or
 

 (ii)
if no such Term SOFR is available for a period which is less than three (3) months, 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 Term) for the shortest period (for which Term SOFR is available) which exceeds three (3) months.
 
"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.
 
"ISSC" means an International Ship Security Certificate issued under the ISPS Code.
 
"Leasing Documents" means this Charter, the MOA, the Fee Letter and the Security Documents.
 
"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$750,000 or the equivalent in any other currency.
 
"Manager's Undertakings" means, collectively, the letter of undertaking, in agreed form, to be executed by each Approved Manager, each of any of them, as the context may require, the "Manager's Undertaking".
 
"Margin" means two point one five per cent. (2.15%) per annum.
 
"Market Value" means, in relation to the Vessel, the valuation shown by a valuation report or certificate addressed to the Owners and prepared:
 

 (a)
at the cost of the Charterers;
 

 (b)
on a date no earlier than thirty (30) days prior to the relevant date of determination;
 

 (c)
by Approved Valuers;
 

 (d)
without physical inspection of the Vessel or other vessel; and
 

 (e)
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, free of any existing charter or other contract of employment or such other basis as may be agreed by the Owners.
 
 
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"MARPOL Carbon Intensity Regulations" means the regulations contained in Chapters 1, 2 and 4 of Revised MARPOL Annex VI which relate to "Regulations on the Carbon Intensity of International Shipping" and Resolution MEPC.328(76) implementing the CII and any associated guidelines and/or subsequent amendments, including the Ship Energy Efficiency Management Plan (SEEMP).
 
"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) or prospects of any Obligor; or
 

 (b)
the ability of any Obligor to perform its obligations under any Leasing Document or any Assignable Sub-charter 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 any Assignable Sub-charter or the rights or remedies of the Owners under any of the Leasing Documents or any Assignable Sub-charter;
 
"Maturity Date" means the date falling sixty (60) months from the Commencement Date.
 
"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 such term in Clause 40.4(b)(ii).
 
"Net Trading Proceeds" has the meaning given to such term in Clause 40.4(b)(i).
 
"Obligor" means any of the Charterers, the Other Charterer, the Guarantor and the Approved Managers (other than a Third Party Approved Manager) and each other person that may be a party to a Leasing Document from time to time (other than the Owners or their Affiliates) and any other party that provides security for the Leasing Documents.
 
"Original Financial Statements" means, with respect to the Guarantor, its audited consolidated annual financial reports for the financial year ended 31 December 2023, in form and substance satisfactory to the Owners.
 
"Original Jurisdiction" means, in relation to each 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, a bareboat charter entered into or to be entered into on or about the date of this Charter between the Other Owner, as owner, and the Other Charterer, as demise owner.
 
"Other Charterer" means Friend Ocean Navigation Co..
 
 
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"Other Leasing Documents" means, collectively, the "Leasing Documents" as defined in the Other Charter.
 
"Other Owner" means the Insight 23 Holding Limited.
 
"Other Vessel" means the 176K dwt bulk carrier (Capesize) named m.v. "Friendship" registered under the Flag State with IMO number 9410454.
 
"Outstanding Finance Amount" means, on any relevant date, (i) the Finance Amount minus (ii) the aggregate Fixed Charterhire which have been paid by the Charterers and received by the Owners as at such date.
 
"Owners' Financier" shall have the meaning as defined under Clause 58.2(a).
 
"Owners' Sale" shall have the meaning as defined under Clause 40.4(b)(ii).
 
"Party" means any party to this Charter.
 
"Payment Date" means each of, or as the context may require, any of:
 

 (a)
in respect of the first Charterhire instalment, the date falling three(3) months after the Commencement Date;
 

 (b)
each date falling at three (3) months' intervals during the Charter Period after the date described in paragraph (a) above; and
 

 (c)
the Maturity Date,
 
such that there are a total of twenty (20) Payment Dates during the Charter Period.
 
"Payment Notice" has the meaning given to that term in the MOA.
 
"Permitted Security Interests" means:
 

 (a)
prior to the completion of the Delivery, any Security Interest created by an Existing Mortgage Security Document;
 

 (b)
Security Interests created by a Leasing Document or a Financial Instrument;
 

 (c)
liens 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, ownership and management practice;
 

 (d)
liens for salvage provided such liens do not secure amounts more than thirty (30) days overdue;
 

 (e)
liens for master's disbursements incurred in the ordinary course of trading provided such liens do not secure amounts more than thirty (30) days overdue;
 

 (f)
any other liens 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;
 
 
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(g)
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 Charterers are prosecuting or defending such action in good faith by appropriate steps; and
 

 (h)
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.
 
"Potential Termination Event" means, an event or circumstance which, with the giving of any notice, the lapse of time, a determination of the Owners and/or the satisfaction of any other condition, would constitute a Termination Event.
 
"Prepositioning Date" shall have the same meaning as defined under the MOA.
 
"Purchase Obligation" means the purchase obligation referred to in Clause 48 (Purchase Obligation).
 
"Purchase Obligation Price" means US$8,500,000.
 
"Purchase Option" means the early purchase option which the Charterers are entitled to exercise pursuant to Clause 47 (Purchase Option).
 
"Purchase Option Date" has the meaning given to that term in Clause 47.1.
 
"Purchase Option Notice" has the meaning given to that term in Clause 47.1 (Purchase Option).
 
"Purchase Option Price" means the aggregate of:
 

 (a)
the Outstanding Finance Amount as at the Purchase Option Date together with a fee calculated at the rate of (i) one point five per cent. (1.5)% of such Outstanding Finance Amount if the Purchase Option is exercised after the first (1st) anniversary of the Commencement Date and until (including) the second (2nd) anniversary of the Commencement Date, (ii) one per cent. (1)% of such Outstanding Finance Amount if the Purchase Option is exercised after the second (2nd) anniversary of the Commencement Date and until (including) the third (3rd) anniversary of the Commencement Date, (iii) zero point five per cent. (0.5%) of such Outstanding Finance Amount if the Purchase Option is exercised after the third (3rd) anniversary of the Commencement Date and until (including) the fourth (4th) anniversary of the Commencement Date and (iv) zero per cent. (0%) of such Outstanding Finance Amount if the Purchase Option is exercised after the fourth (4th) anniversary of the Commencement Date;
 

 (b)
any amounts of interest accrued from the last Payment Date up to an including the Purchase Option Date;
 

 (c)
any accrued but unpaid Variable Charterhire as at the Purchase Option Date;
 
 
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(d)
any Breakfunding Costs and any other costs, expenses and fees payable by the Owners to the Owner's Financier under the relevant Financial Instruments but excluding any Swap Costs;
 

 (e)
any documented legal costs, expenses reasonably incurred by the Owners and in connection with the exercise of the Purchase Option under Clause 47 (Purchase Option);
 

 (f)
any other reasonable and documented costs, expenses, losses and liabilities and by the Owners under the Leasing Documents as a result of the exercise of the Purchase Option under Clause 47 (Purchase Option) (including, but not limited to, the release of securities and the cost of redelivery); and
 

 (g)
all other amounts due and outstanding under this Charter and the other Leasing Documents together with any applicable interest thereon.
 
"Published Rate" means Term SOFR for three (3) months.
 
"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 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
 
 
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(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 Owners) temporary;
 

 (ii)
that Published Rate is calculated in accordance with any such policy or arrangement for a period no less than a reasonable time period as determined by the Owners; or
 

 (d)
in the opinion of the Charterers and the Owners (each acting reasonably), that Published Rate is otherwise no longer appropriate for the purposes of calculating interest under this Charter.
 
"Purchase Price" means the aggregate amount which has been paid by the Owners (in their capacity as Buyers) to the Charterers (in their capacity as Sellers) for the purchase of the Vessel pursuant to clause 18 (payment of purchase price) of the MOA.

"Quotation Day" means in relation to a Term for which an Interest Rate is to be determined, two (2) US Government Securities Business Days before the first day of that Term 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).
 
"Reference Rate" means, in relation to a Term:
 

 (a)
the applicable Term SOFR for three (3) months as of the relevant Quotation Day; or
 

 (b)
as otherwise determined pursuant to Clause 36.13,
 
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 each Obligor:
 

 (a)
its Original Jurisdiction;
 

 (b)
any jurisdiction where any property owned by it and charged under a Leasing Document or an Assignable Sub-charter is situated;
 

 (c)
any jurisdiction where it conducts its business; and
 

 (d)
any jurisdiction whose laws govern the perfection of any of the Leasing Documents the Assignable Sub-charter 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.
 
 
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"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);
 

 (ii)
any Relevant Nominating Body; or
 
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 and the Charterer, 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 and the Charterer, an appropriate successor or alternative to a Published Rate.
 
"Reporting Time" means close of business in Shanghai on the date falling two (2) Business Days after the Quotation Day for the relevant Term.
 
"Requisition Compensation" includes all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (c) of the definition of "Total Loss".
 
"Restricted Country" means any country or territory whose government is the target of Sanctions or that is or whose government is, subject to comprehensive country-wide or territory-wide Sanctions (including, without limitation, as regards United States Sanctions, Cuba, Syria, Iran, North Korea, Crimea and Venezuela).
 
"Restricted Person" means any person who is the subject of Sanctions (whether designated by name or by reason of being included in a class of persons to whom any applicable Sanctions apply in accordance with their terms) or against whom Sanctions are directed, including, without limitation, as a result of being (a) owned or controlled directly or indirectly by any person which is a designated target of Sanctions, or (b) organized under the laws of, or a citizen or resident of, any Restricted Country, or otherwise a target of Sanctions.
 
"Sanctions" means any sanctions (including US "secondary 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, administered, enacted or enforced by law or regulation of the United Kingdom, the Council of the European Union, the People's Republic of China, the United Nations or its Security Council or the US (including, but not limited to, "secondary sanctions" imposed by the US), the Hong Kong SAR, the Flag State or any government, official institution or agency of any of the foregoing, whether or not any Obligor or any Sub-charterer is legally bound to comply with the foregoing; or
 
 
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(b)
otherwise imposed by any law or regulation binding on any Obligor or any Sub-charterer or to which an Obligor or a Sub-charterer is subject.
 
"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 the Account Security, the Guarantee, the General Assignment, the Shares Security Deed, the Manager's Undertakings and any other security documents granting a Security Interest in respect of the obligations of the Charterers under or in connection with this Charter.
 
"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.
 
"Sellers" means the Charterers acting in their capacity as seller of the Vessel under the MOA.
 
"Shares Security Deed" means the shares security deed executed or to be executed by the Guarantor in favour of the Owners over the shares in the Charterers in agreed form.
 
"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).
 
"Special Termination Notice Date" means the date on which the Special Termination Sum is payable by the Charterers to the Owner in accordance with Clause 44(A).1 or 44(A).3.
 
"Special Termination Sum" means, in respect of any date (for the purposes of this definition only, the "Relevant Date"), the aggregate of:
 

 (a)
the Outstanding Finance Amount as at the Relevant Date;
 

 (b)
any accrued but unpaid Variable Charterhire and/or any default interest as at the Relevant Date;
 

 (c)
any Breakfunding Costs and any other costs, expenses and fees payable by the Owners to the Owner's Financier under the relevant Financial Instruments but excluding any Swap Costs;
 
 
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(d)
any reasonable and documented costs, expenses, losses and liabilities incurred by the Owners in connection with the termination of this Charter under Clause 44(A); and
 

 (e)
all other outstanding amounts payable under this Charter and other Leasing Documents together with any applicable interest thereon.
 
"Sub-charter" means, as the context requires, any sub-charter or other form of contract for employment in respect of the Vessel (including, but not limited to, any Assignable Sub-charter) entered or to be entered into by the Charterers (as disponent owners) and any other Sub-charterer, whether or not already in existence.
 
"Sub-charterer" means any charterer under a Sub-charter (including, but not limited to, any Assignable Sub-charter).
 
"Swap Costs" means any amount payable by the Owners or costs incurred by the Owners (after netting out any gains) as a result of the termination or close-out of any Treasury Transaction entered into in connection with the Leasing Documents.
 
"Term" means each consecutive three (3) months' period falling during the Charter Period, provided that:
 

 (a)
the first Term shall commence on (and include) the Commencement Date and end on (and include) the first Payment Date;
 

 (b)
each subsequent Term (apart from the final Term) shall commence on (and include) the date falling immediately after the last day of the previous Term;
 

 (c)
any Term which would otherwise overrun a Payment Date shall instead end on (and include) that Payment Date; and
 

 (d)
the final Term shall end on (and include) the Maturity Date.
 
"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 Event" means any event described in Clause 44 (Termination Events).
 
"Termination Notice Date" shall have the meaning as defined under Clause 44.2.
 
"Termination Sum" means, in respect of any date (for the purposes of this definition only, the "Relevant Date"), the aggregate of (without double counting amounts that may be included in more than one sub-paragraph below):
 

 (a)
the Outstanding Finance Amount as at the Relevant Date together with a fee calculated at the rate of two point five per cent. (2.5%) of such Outstanding Finance Amount;
 

 (b)
any accrued but unpaid Variable Charterhire as at the Relevant Date;
 
 
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(c)
any Breakfunding Costs and any other costs, expenses and fees payable by the Owners to the Owner's Financier under the relevant Financial Instruments but excluding any Swap Costs;
 

 (d)
any and all costs, expenses, losses and liabilities incurred by the Owners in connection with the termination of this Charter under Clause 44 (Termination Events); and
 

 (e)
any and all costs, expenses, losses and liabilities incurred by the Owners (and the Owners' Financier (if any)), and 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;
 

 (f)
all other outstanding amounts payable under this Charter and other Leasing Documents together with any applicable interest thereon (including, but not limited to, any default interest on any amount owing under paragraphs (a) to (e) above), and for the avoidance of doubt, this shall not include any then applicable purchase option fee under paragraph (a) of the definition of "Purchase Option Price".
 
"Third Party Approved Manager" means any Approved Manager which is not owned or controlled by the Guarantor.
 
"Total Loss" means:
 

 (a)
in the case of an actual loss of the Vessel, the date on which it occurred or, if that is unknown, the date when the Vessel was last heard of;
 

 (b)
in the case of a constructive, compromised, agreed or arranged total loss of the Vessel, the earlier of:
 

 (i)
the date on which a notice of abandonment is given to the insurers; and
 

 (ii)
the date of any compromise, arrangement or agreement made by or on behalf of the Owners with the insurers in which the insurers agree to treat the Vessel as a Total Loss;
 

 (c)
in the case of any expropriation, confiscation, requisition 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 (excluding a requisition for hire for a fixed period not exceeding one (1) year without any right to an extension), 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, unless it is redelivered within forty-five (45) days to the full control of the Owners or the Charterers; and
 

 (d)
in the case of any arrest, condemnation, capture, seizure or detention of the Vessel (including any hijacking or theft), unless it is redelivered within forty-five (45) days to the full control of the Owners or the Charterers, the date falling on the expiration of such days.
 
 
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"Total Loss Payment Date" shall have the meaning given to that term in Clause 40.9.
 
"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.
 
"Treasury Transaction" means any derivative transaction entered into in connection with protection against or benefit from any fluctuation in price or rate.
 
"Upfront Fee" has the meaning given to that term in Clause 41.1.
 
"US" means 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 United States of America or (b) a person some or all of whose payments under the Leasing Documents are from sources within the United States for United States federal income tax purposes.
 
"Variable Charterhire" means, in relation to a Payment Date, a variable element of charterhire which shall be an amount calculated by applying the applicable Interest Rate for the relevant Term to the Outstanding Finance Amount prevailing on the first day of the relevant Term (which for the avoidance of doubt, shall be the Finance Amount in respect of the first Charterhire instalment), for the actual number of days elapsed within the relevant Term.
 
"Vessel" means the 170K dwt bulk carrier (Capesize) named m.v. "Squireship" registered under the Flag State with IMO number 9391646.
 
61.2
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 and, if required by the Owners in their sole discretion, the Owners' Financier;
 
"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;
 
"contingent liability" means a liability which is not certain to arise and/or the amount of which remains unascertained;
 
 
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"continuing" means, in relation to any Termination Event, a Termination Event which has not been waived by the Owners and in relation to any Potential Termination Event, a Potential Termination Event which has not been waived by the Owners or remedied to the satisfaction of the Owners;
 
"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, more than fifty one percent (51%) per cent, 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;
 
"document" includes a deed; also a letter, fax or telex;
 
"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 61.3;
 
the Owners' "cost of funds" in relation to the Outstanding Finance Amount 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 Outstanding Finance Amount or any part thereof for a period equal in length to the Term of the Outstanding Finance Amount or any part thereof;
 
"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;
 
 
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"protection and indemnity risks" means the usual risks covered by a protection and indemnity association which is a member of the International Group of P&I 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;
 
"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;
 
"subsidiary" has the meaning given in Clause 61.4; 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.
 
61.3
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 preceding the numerically corresponding day if the numerically corresponding day is not a Business 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.
 
61.4
Meaning of "subsidiary". A company (S) is a subsidiary of another company (P) if:
 
(a)
a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or
 
(b)
P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or
 
(c)
P has the direct or indirect power to appoint or remove a majority of the directors of S; or
 
(d)
P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P,
 
(e)
and any company of which S is a subsidiary is a parent company of S.
 
61.5
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;
 
 
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(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; and
 
(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.
 
61.6
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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SCHEDULE 1
 
ACCEPTANCE CERTIFICATE

Squire Ocean Navigation Co. (the "Charterers") hereby acknowledges that at           hours on          , there was delivered to, and accepted by, the Charterers the Vessel known as m.v. " Squireship ", registered in the name of Insight 22 Holding Limited (the "Owners") under the flag of the Republic of Liberia with IMO number 9391646 under a bareboat charter dated _______________________(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 Clause 45 (Representations and Warranties) of the Charter remain correct and that no Termination Event (as defined in the Charter) has occurred and is continuing at the date of this Acceptance Certificate.
 

Name:
Title:
for and on behalf of
Squire Ocean Navigation Co.
Date:
 
 
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SCHEDULE 2
 
Part A
 
The following are the documents referred to in Clause 34.2(f)(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)
authorizing 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, an copy of the power of attorney of any party to a Leasing Document authorising a specified person or persons to execute the Leasing Documents to which it is a party.
 
1.4
If required, a copy of the specimen of the signature of each person authorised 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 the Charterers, approving the terms of, and the transactions contemplated by such Leasing Documents.
 
1.6
A copy of the certificate of an officer or authorised signatory of each of the Charterers and the Guarantor certifying that each copy document relating to it specified in this Part A of Schedule 2 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
Duly executed copies of each Leasing Document (other than the Account Security, the General Assignment and the Manager's Undertakings) and of each document to be delivered under each of them.
 
2.2
Agreed forms of the Account Security, the General Assignment and the Manager's Undertakings and of each document to be delivered under each of them.
 
3
Vessel Documents
 
3.1
A copy of each executed Approved Management Agreement establishing that the Vessel will, as from the Commencement Date, be managed by the relevant Approved Manager and approved by the Owners.
 
 
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3.2
A copy of the Document of Compliance of the relevant Approved Technical Manager.
 
3.3
A copy of the Vessel's class certificate evidencing that the Vessel maintains such classification (free of any overdue recommendations and conditions) as is acceptable to the Owners.
 
3.4
Copies of the Vessel's Safety Management Certificate (together with any other details of the applicable safety management system which the Owners may require) and of any other documents required under the ISM Code and the ISPS Code (including, without limitation, an ISSC and IAPPC).
 
4
Legal opinions
 
4.1
An agreed form legal opinion by English law legal advisers to the Owners on such matters on the laws of England in relation to the 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 documents listed in paragraphs 2.1 and 2.2 of Part A of this Schedule, concerning the laws of the Republic of the Marshall Islands, the Republic of Libera and Greece and such other relevant jurisdictions as the Owners may require, in form and substance acceptable to the Owners.
 
5
Initial Sub-charter
 
5.1
A copy of the Initial Sub-charter (and any addendums thereto).
 
5.2
Evidence to the satisfaction of the Owners that the Initial Sub-charterer consents to the sale and leaseback of the Vessel contemplated by the Leasing Documents.
 
6
Escrow Agreement
 
A copy of the executed Escrow Agreement.
 
7
Vessel Insurances
 
7.1
Agreed form of letters of undertaking and certificates of entry (as the case may be) relating to insurances as set out in Clause 38 (Insurance) acknowledged by the relevant insurer, insurance broker, protection and indemnity association or war risks association (as the case may be).
 
7.2
An insurance report or certificate by an insurance broker or consultant appointed by the Owners (but at the cost of the Charterers) in an agreed form acceptable to the Owners.
 
8
Payment Notice
 
A duly completed copy of the Payment Notice to be received by the Owners not later than three (3) Business Days prior to the Prepositioning Date.
 
9
Deed of Release
 
A copy of the agreed form deed of release discharging (i) all of the Charterers' obligations under the Existing Facility Agreement and the Existing Mortgage Security Documents and (ii) all Security Interests encumbering the Vessel or any part thereof (if any), in such form as is satisfactory to the Owners.

 
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10
Others
 
10.1
A copy of the duly executed commercial invoice of the Vessel.
 
10.2
Copies of the Original Financial Statements.
 
10.3
Evidence that the Earnings Account has been or will be opened.
 
10.4
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.
 
10.5
Such evidence relating to the Charterers or the Guarantor 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.
 
10.6
A copy of any other consents, approvals, authorization or other document, opinion or assurance which the Owners consider to be reasonably necessary or desirable in connection with the entry into and performance of the transactions contemplated by any of the documents listed in paragraph 2 of Schedule 2, Part A or for the validity and enforceability of such documents.
 
10.7
Such other information and documents as the Owners may reasonably require by giving notice to the Charterers.
 
10.8
If the Owners so require, in relation to any of the documents referred to in this Schedule 2 Part A, an English translation of that document (with such cost to be borne by the Charterers).
 
 
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Part B
 
The following are the documents referred to in Clause 34.2(f)(ii):
 
1
Bringdown Certificate
 
If required, a copy of the certificate of an authorised signatory of the Charterers and the Guarantor certifying that each document which they are required to provide under Part A of Schedule 2 of this Charter, is correct, complete and in full force and effect as at the Commencement Date.
 
2
Deed of Release
 
Duly executed copy of the deed of release referred to in paragraph 9 of Schedule 2, Part A of this Charter.
 
3
Security Documents
 
Duly executed copies of each of the Account Security, the General Assignment and the Manager's Undertakings and of each document to be delivered under each of them.
 
4
Vessel Documents
 
Documentary evidence that the Vessel:
 
(a)
is or will be definitively and permanently registered in the name of the Owners under the Flag State;
 
(b)
is or will be in the absolute and unencumbered ownership of the Owners; and
 
(c)
has been or will be 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 certificate or transcript issued by the competent authorities of the Flag State on the date of Delivery evidencing the Charterers' (as sellers under the MOA) ownership of the Vessel and that the Vessel is free from registered encumbrances and mortgages;
 

 (ii)
the original (if required by the Flag State) or a copy of the bill of sale in a form recordable in the Flag State, transferring title of the Vessel by the Charterers (as sellers under the MOA) to the Owners (as buyers under the MOA) and stating that the Vessel is free from all mortgages, encumbrances and maritime liens (whether maritime or otherwise) or any other debts whatsoever, duly notarially attested and legalised or apostilled as may be required by the Flag State; and
 

 (iii)
a copy of the protocol of delivery and acceptance duly executed by the Charterers and Owners.
 
(d)
Any additional documents as may be required by the competent authorities of the Flag State for the purpose of registering the Vessel in the name of the Owners as registered owner.
 
5
Others
 
 
 81
Huarong Seanergy
 
 
BBC additional clauses – m.v. "Squireship"
 
 
SINGAPORE/91706047v1
5.1
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.
 
5.2
If the Owners so require, in relation to any of the documents referred to in this Schedule 2 Part B, an English translation of that document (with such cost to be borne by the Charterers).
 
5.3
Such other information or documents as the Owners may reasonably require by giving notice to the Charterers.
 
 
 82
Huarong Seanergy
 
 
BBC additional clauses – m.v. "Squireship"
 
 
SINGAPORE/91706047v1
Part C
 
The following are the documents referred to in Clause 34.2(f)(iii):
 
1
Registration of security
 
Documentary evidence that, if applicable, the Security Interests intended to be created by the Security Documents have been duly perfected within the time periods as set out under applicable law.
 
2
Legal opinions
 
Not later than five (5) Business Days after the date that (i) the Delivery under this Charter and (ii) the "Delivery" as defined under the Other Charter have all taken place, issued signed copies of the legal opinions referred to in paragraphs 4.1 and 4.2 of Schedule 2, Part A of this Charter.
 
3
Insurances
 
(a)
Not later than fifteen (15) 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 38 (Insurance) 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 Schedule 2, Part A of this Charter.
 
(b)
Not later than twenty (20) Business Days after the Commencement Date, the issued insurance report in the form agreed under paragraph 5 of Schedule 2, Part A of this Charter.
 
 
 83
Huarong Seanergy
 
 
BBC additional clauses – m.v. "Squireship"
 
 
SINGAPORE/91706047v1
EXECUTION PAGE
 
OWNERS
  
   
SIGNED
)
for and on behalf of
)
INSIGHT 22 HOLDING LIMITED
)
acting by MAO Yufei
) /s/ Mao Yufei
its attorney-in-fact
)
in the presence of:
)

/s/ Sun Linzi
  
Witness
  
Name: Sun Linzi
  
Address: Room 6006, 6th Floor, No.15,
 Second East Zhongshan Road,
 Shanghai, P.R.China 200002
  

CHARTERERS

EXECUTED
)
for and on behalf of
)
SQUIRE OCEAN NAVIGATION CO.
)   /s/ Stavros Gyftakis
acting by Stavros Gyftakis
)
being its attorney-in-fact
)
witnessed by:
)

/s/ Maria Moschopoulou
  

 
Witness
  
Name: Maria Moschopoulou
  
  Address: 154 Vouliagmenis Avenue,
  
                 16674 Glyfada, Athens Greece
  


 
Huarong Seanergy
 
 
BBC additional clauses – m.v. "Squireship"
 
 
SINGAPORE/91706047v1
EX-4.47 20 ef20039029_ex4-47.htm EXHIBIT 4.47
Exhibit 4.47

1.            Shipbroker
2.           Place and date

13 March 2025
3.            Owners/Place of business (Cl. 1)

INSIGHT 23 HOLDING LIMITED

a company incorporated under the laws of Hong Kong with business registration number 76450738 whose registered office is at 6/F., Manulife Place, 348 Kwun Tong Road, Kowloon, Hong Kong, registered as Foreign Maritime Entity in the Republic of Liberia with registration number F-918984 (The “Owners” which expression includes its successors and assigns)
4.           Bareboat Charterers/Place of business (Cl. 1)

FRIEND OCEAN NAVIGATION CO.

a corporation incorporated and validly existing under the laws of the Republic of Liberia with registration number C-122897 whose registered address is at 80 Broad Street, Monrovia, Republic of Liberia
5.           Vessel’s name, call sign and flag (Cl. 1 and 3)

Vessel's name: Friendship Call sign: 5LBT4

Flag: The Republic of Liberia
6.            Type of Vessel

Bulk Carrier (Capesize)
7.           GT/NT

GT: 89603

NT: 58437
8            When/Where built

2009

Namura Shipping Co., Ltd. Imari Works
9.           Total DWT (abt.) in metric tons on summer freeboard

176,948
10.         Classificaton Society (Cl. 3)

BV
11.          Date of last special survey by the Vessel’s classificaton society

N/A
12.         Further partculars of Vessel (also indicate minimum number of months’ validity of class certficates agreed acc. to Cl. 3)

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.
13.         Port or Place of delivery (Cl. 3)

Back to back delivery under the MOA
14.         Time for delivery (Cl. 4)

SEE CLAUSE 34
(Delivery of Vessel)
15.         Cancelling date (Cl. 5)

SEE CLAUSE 33
(Cancellation)
16.         Port or Place of redelivery (Cl. 15)

SEE CLAUSE 40.5
17.         No. of months' validity of trading and class certficates upon redelivery (Cl. 15)

SEE CLAUSE 40.5
18       .  Running days’ notce if other than stated in Cl. 4

N/A
19.         Frequency of dry-docking (Cl. 10(g))

SEE CLAUSE 10(g)
20.          Trading limits (Cl. 6)

Worldwide within International Navigating Limits, please also see clauses 46.1(r), 46.1(s), 46.1 (ee), 46.1(ff) (Charterers' Undertakings)
21.         Charter period (Cl. 2)

SEE CLAUSE 32 (Charter Period)
22.         Charter hire (Cl. 11)


SEE CLAUSE 36 (Charterhire)
23.         New class and other safety requirements (state percentage of Vessel's insurance value acc. to Box 29)(Cl. 10(a)(ii))

SEE CLAUSE 38 (Insurance)
24.         Rate of interest payable acc. to Cl. 11 (f) and, if applicable, acc. to PART IV

SEE CLAUSE 36 (Charterhire)
25.         Currency and method of payment (Cl. 11)

USD/BANK TRANSFER
26.         Place of payment; also state beneficiary and bank account (Cl. 11)

Such account as the Owners may notify the Charterers from time to time
27.          Corporate guarantee (Cl. 24) (optonal)

SEE CLAUSE 24 (Corporate Guarantee)
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 CLAUSES 12(b) and 58 (Changes to the Parties)
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 38 (Insurance)- CLAUSE 14 DOES NOT APPLY
30.         Additonal insurance cover, if any, for Owners’ account limited to (Cl. 13(b) or, if applicable, Cl. 14(g))

SEE CLAUSE 38 (Insurance)
31.         Additonal insurance cover, if any, for Charterers’ account limited to (Cl. 13(b) or, if applicable, Cl. 14(g))

SEE CLAUSE 38 (Insurance)
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

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 Resoluton (state 30(a), 30(b) or 30(c); if 30(c) agreed Place of Arbitraton must be stated (Cl. 30)

SEE CLAUSE 30 (Dispute Resolution)
36.         War cancellaton (indicate countries agreed) (Cl. 26(f))

N/A
37.         Newbuilding Vessel (indicate with “yes” or “no” whether PART III applies) (optonal)

No, Part III does not apply
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)

(c)
42.          Hire/Purchase agreement (indicate with “yes” or “no” whether PART IV applies) (optonal)

NO, PART IV DOES NOT APPLY
43.         Bareboat Charter Registry (indicate with “yes” or “no” whether PART V applies) (optonal)

NO, PART V DOES NOT APPLY
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 additonal clauses covering special provisions, if agreed

CLAUSE 32 (Charter Period) TO CLAUSE 61 (Definitions) AND SCHEDULE 1 TO SCHEDULE 2

PREAMBLE - It is mutually agreed that this Contract shall be performed subject to the conditons contained in this Charter which shall include PART I and PART II and the Additonal Clauses. In the event of a conflict of conditons, the provisions of the Additonal Clauses shall prevail over the provisions of PART I and PART II 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 conditons, 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/ Mao Yufei
MAO Yufei
Director
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.
PART II
1
1. Definitions
 
2
In this Charter capitalised terms not otherwise defined herein have the meaning given to them in the Additional Clauses and, the following terms shall have the meanings hereby assigned to them:

"Additional Clauses" means Clause 32 (Charter Period) to Clause 61 (Definitions) appended to this Charter;
 
3
“The Owners” shall mean the party identified in Box 3;
 
4
“The Charterers” shall mean the party identified in Box 4;
 
5
“The Vessel” shall mean the vessel named in Box 5 and with particulars as stated in Boxes 6 to 12.
 
 
8
 2. Charter Period
 
9
In consideration of the hire detailed in Box 22, the Owners have agreed to let and the Charterers have agreed to
10
hire the Vessel for the period stated in Box 21 (“The Charter Period”). See also Clause 32 (Charter Period).
 
11
3. Delivery
 
12
(not applicable when Part III applies, as indicated in Box 37)
 
 
15
The Vessel shall be delivered by the Owners and taken over by the Charterers at the port or place indicated in
16
Box 13.
 
17
(b)
The Vessel shall be properly documented on delivery in accordance with the laws of the flag state indicated in
18
Box 5 and the requirements of the classification society stated in Box 10.

21
(c)
The delivery of the Vessel by the Owners and the taking over of the Vessel by the Charterers shall constitute a
22
full performance by the Owners of all the Owners’ obligations under this Clause 3, and thereafter the Charterers
23
shall not be entitled to make or assert any claim against the Owners on account of any conditions,
24
representations or warranties expressed or implied with respect to the Vessel
.
 
28
4. Time for Delivery  (See Clause 34 (Delivery of Vessel))
 
 
 
36
5. Cancelling (See Clause 33 (Cancellation))
 

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
 
 
 
50
6. Trading Restrictions
 
51
The Vessel shall be employed in lawful trades for the carriage of suitable lawful merchandise operation within the trading
 
52
limits indicated in Box 20.
 
53
The Charterers undertake not to employ the Vessel or suffer the Vessel to be employed otherwise than in
54
conformity with the terms of the contracts of insurance (including any warranties expressed or implied therein)
55
without first obtaining the consent of the insurers to such employment and complying with such requirements
56
as to extra premium or otherwise as the insurers may prescribe.
 
57
The Charterers also undertake not to employ the Vessel or suffer her employment in any trade or business which
58
is forbidden by the law of any country to which the Vessel may sail or is otherwise illicit or in carrying illicit or
59
prohibited goods or in any manner whatsoever which may render her liable to condemnation, destruction,
60
seizure or confiscation.
 
61
Notwithstanding any other provisions contained in this Charter it is agreed that nuclear fuels or radioactive
62
products or waste are specifically excluded from the cargo permitted to be loaded or carried under this Charter.
63
This exclusion does not apply to radio-isotopes used or intended to be used for any industrial, commercial,
64
agricultural, medical or scientific purposes provided the Owners’ prior approval has been obtained to loading
65
thereof.
 
66 
7. Surveys  Redelivery
 
67
 
68
The Owners  shall be entitled to  appoint surveyors or the Charterers shall be entitled to appoint surveyors (subject to such appointment being accepted in writing by the Owners) for the purpose of determining and agreeing in writing
69
the condition of the Vessel at the time of  redelivery pursuant to Clause 40 (with the relevant costs paid by the Charterers).
 
 
72
8. Inspection (See Clause 46(A) (Inspection of 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
 
 
 
 
88
9.
 Inventories, Oil and Stores
 
89
A complete inventory of the Vessel’s entire equipment, outfit including spare parts, appliances and of all
90
consumable stores on board the Vessel shall be made by the Charterers in conjunction with the Owners on
91
delivery and again on redelivery  (if applicable) of the Vessel. The Charterers ti shall at the time of
92
delivery take over  all bunkers, lubricating oil, unbroached provisions, paints, ropes
93
and other consumable stores (excluding spare parts) in the said Vessel at the then current market prices at the
94
ports of delivery. The Charterers shall ensure that all spare parts listed in the
95
inventory and used during the Charter Period are replaced at their expense prior to redelivery  (if applicable) of the Vessel.
 
96
 10.
Maintenance and Operation

 
97
(a)
 (i) Maintenance and Repairs - During the Charter Period the Vessel shall be in the full possession and at the
98
absolute disposal for all purposes of the Charterers and under their complete control in every respect. The
99
Charterers shall maintain the Vessel, her machinery, boilers, appurtenances and spare parts in a good state of
100
repair, in efficient operating condition and in accordance with good commercial maintenance practice and,
101
 if applicable, at their own expense they shall at all times keep the Vessel’s
102
 classification fully up to date with the Classification Society indicated in Box 10 and maintain all other necessary
103
certificates in force at all times.
 
104
(ii) New Class and Other Safety Requirements - In the event of any improvement, structural changes or new
105
equipment becoming necessary for the continued operation of the Vessel by reason of new class requirements or by compulsory legislation, the Charterers shall ensure that the same are complied with and the time and cost of compliance shall be on the Charterers' account. 
 
 
112
(iii) Financial Security - The Charterers shall maintain financial security or responsibility in respect of third party
113
liabilities as required by any government, including federal, state or municipal or other division or authority
114
thereof, to enable the Vessel, without penalty or charge, lawfully to enter, remain at, or leave any port, place,
115
territorial or contiguous waters of any country, state or municipality in performance of this Charter without any
116
delay. This obligation shall apply whether or not such requirements have been lawfully imposed by such
117
government or division or authority thereof.
 
118
The Charterers shall make and maintain all arrangements by bond or otherwise as may be necessary to satisfy
119
such requirements at the Charterers’ sole expense and the Charterers shall indemnify the Owners against all

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PART II
120
consequences whatsoever (including loss of time) for any failure or inability to do so.
 
121 
(b)
 Operation of the Vessel - The Charterers shall at their own expense and by their own procurement man, victual,
122
navigate, operate, supply, fuel and, whenever required, repair the Vessel during the Charter Period and they
123
shall pay all charges and expenses of every kind and nature whatsoever incidental to their use and operation of
124
the Vessel under this Charter, including annual flag state fees and any foreign general municipality and/or state
125
taxes. The Master, officers and crew of the Vessel shall be the servants of the Charterers for all purposes
126
whatsoever, even if for any reason appointed by the Owners.
 
127
Charterers shall comply with the regulations regarding officers and crew in force in the country of the Vessel’s
128
flag or any other applicable law.
 
129 
(c)
The Charterers shall keep the Owners and  any mortgagee(s) advised of the intended employment, planned dry-
130
docking and major repairs of the Vessel, as reasonably required.
 
131
(d)
Flag and Name of Vessel – During the Charter Period, the Charterers shall have the liberty to paint the Vessel in
132
their own colours, install and display their funnel insignia and fly their own house flag. The Charterers shall also
133
have the liberty, with the Owners’ consent, and which, subject to Clause 41.4, shall be granted in the case of a Flag State, to change the flag and/or
134
the name of the Vessel during the Charter Period. Painting and re-painting, instalment and re-instalment,
135
registration and re-registration,  shall be at the Charterers’ expense and time. The Charterers shall also have the liberty, with the Owners' consent, which shall not be unreasonably withheld, to change the classification society (to be a member of International Association of Classification Societies) during the Charter Period and such expense shall be for Charterers' account.
 
136
(e)
Changes to the Vessel – Subject to Clause 10(a)(ii), the Charterers shall make no structural changes in the Vessel
137
or changes in the machinery, boilers, appurtenances or spare parts thereof without in each instance first securing
138
the Owners’ approval thereof. The Charterers shall, if the Owners so require, restore the
139
Vessel to its former condition
 
140
 (f)
Use of the Vessel’s Outfit, Equipment and Appliances - The Charterers shall have the use of all outfit, equipment,
141
and appliances on board the Vessel at the time of delivery, provided the same or their substantial equivalent
142
shall be returned to the Owners on redelivery in the same good order and condition as when received, ordinary
143
wear and tear excepted. The Charterers shall from time to time during the Charter Period replace such items of
144
equipment as shall be so damaged or worn as to be unfit for use. The Charterers are to procure that all repairs
145
to or replacement of any damaged, worn or lost parts or equipment be effected in such manner (both as regards
146
workmanship and quality of materials) as not to diminish the value of the Vessel. Title of any equipment so replaced shall, unless agreed between the Owners and the Charterers, remain with the Owners. The Charterers have the right
147
to fit additional equipment at their expense and risk (provided that no permanent structural damage is caused to the Vessel by reason of such installation) and the Charterers shall at their expenses remove such equipment and make good any damage caused by the fitting or removal of such additional equipment
148
 if requested by the Owners at the time of redelivery of the Vessel. Any equipment including radio equipment on hire on the Vessel at
149
time of delivery shall be kept and maintained by the Charterers and the Charterers shall assume the obligations
150
and liabilities of the Owners under any lease contracts in connection therewith and shall reimburse the Owners
151
for all expenses incurred in connection therewith, also for any new equipment required in order to comply with
152
radio regulations.
 
153
(g) 
Periodical Dry-Docking - The Charterers shall dry-dock the Vessel and clean and paint her underwater parts
154
whenever the same may be necessary in accordance with Classification Society of Flag State requirements. 

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
157 11.
Hire (See Clause 36 (Charterhire))


 
 
163
 
 
166
168
 
 
 
177
 
180
 12.
Mortgage

 
 
 
184
(b)* The Vessel chartered under this Charter may be financed by a mortgage(s) according to the Financial Instruments.
 
185
The Charterers undertake to comply, and provide such information and documents to enable the Owners to
186
comply, with all such instructions or directions in regard to the employment, insurances, operation, repairs and
187
maintenance of the Vessel as laid down in the Financial Instruments or as may be directed from time to time
188
during the currency of the Charter by the mortgagee(s) in conformity with each Financial Instrument (if any) as long as the requested information and documents are reasonably required. The
189
Charterers
 agree to acknowledge each Financial Instrument (if any)  in writing in any form that may be reasonably
191
required by the mortgagee(s). 
 
195
 13.
Insurance and Repairs(See also Clause 38)

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
196
(a)
 Without prejudice to Clause 38 (Insurance), during the Charter Period the Vessel shall be kept insured by the Charterers at their expense against hull and
197
machinery, war and Protection and Indemnity risks (and any risks against which it is compulsory to insure for the
198
operation of the Vessel, including but not limited to maintaining financial security in accordance with sub-clause 10(a)(iii)) in such
199
form as the Owners shall in writing approve, which approval shall not be unreasonably withheld. Such insurances
200
shall be arranged by the Charterers to protect the interests of both the Owners and the Charterers and the
201
 Owners’ Financier (if any), and the Charterers shall be at liberty to protect under such insurances the interests of any
202
managers they may appoint. Insurance policies shall cover the Owners and the Charterers according to their
203
respective interests.
 
204
Subject to the provisions of the agreed loss payable clauses,  and the approval of the Owners and the insurers,
205
the Charterers shall effect all insured repairs and shall undertake settlement and reimbursement from the
206
insurers of all costs in connection with such repairs as well as insured charges, expenses and liabilities to the
207
extent of coverage under the insurances herein provided for.
 
208
The Charterers also to remain responsible for and to effect repairs and settlement of costs and expenses incurred
209
thereby in respect of all other repairs not covered by the insurances and/or not exceeding any possible
210
franchise(s) or deductibles provided for in the insurances.
 
211
All time used for repairs under the provisions of sub-clause 13(a) and for repairs of latent defects according to
212
Clause 3(c) above, including any deviation, shall be for the Charterers’ account.
 
213 
(b)
  
 The  Charterers
215
 shall timely  furnish the Owners with particulars of any additional insurance effected,
216
including copies of any cover notes or policies and the written consent of the insurers of any such required
217
insurance in any case where the consent of such insurers is necessary.
 
218
 (c)
The Charterers shall upon the request of the Owners, provide information and promptly execute such documents
 
219
as may be required to enable the Owners to comply with the insurance provisions of each Financial Instrument (if any).
 
220
 (d)
 Should the Vessel become
 a tTotal Lloss under the insurances required under sub-clause 13(a), all insurance payments
 
222
for such loss shall be paid to the Owners  (or if applicable, Owners’ Financier) in accordance with the agreed loss payable clauses, who shall distribute the moneys between the Owners and the Charterers
223
according to this Charter. The Charterers undertake to notify the Owners and the Owners’ Financier 
 
, of any occurrences in consequence of which the Vessel is likely to become a Ttotal Lloss
.
 
 
228
(f)
 For the purpose of insurance coverage against hull and machinery and war risks under the provisions of sub-
229
clause 13(a), the value of the Vessel is the sum indicated in Clause 38 (Insurance).
 



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
 
238
 
 
 
 
 
 
 
The Owners shall not be responsible for any expenses as are incident to the use and operation of the Vessel for
 
260
 
 
 
 
268
 
270
 
272
 
274

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PART II
 
277
 15.
Redelivery - See Clause 40 (Termination, Redelivery, and Total Loss)

 
 
 
 
 
 
295
 16.
Non-Lien

296
The Charterers will not suffer, nor permit to be continued, any lien or encumbrance incurred by them or their
297
agents, which might have priority over the title and interest of the Owners in the Vessel (except for Permitted Security Interests). The Charterers further
298
agree to fasten to the Vessel in a conspicuous place and to keep so fastened during the Charter Period a notice
299
reading as follows:
 
300
“This Vessel is the property of (name of Owners). It is under charter to (name of Charterers) and by the terms of
301
the Charter Party neither the Charterers nor the Master have any right, power or authority to create, incur or
 
302
permit to be imposed on the Vessel any lien.”
 
303
 17.
Indemnity (See Clause 50 (Indemnities))

 
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
 
 
 
 
 

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
317
 18.
Lien

318
The Owners to have a lien upon all cargoes, sub-hires and sub-freights belonging or due to the Charterers or any
319
sub-charterers and any Bill of Lading freight for all claims under this Charter
.
 
321
 19.
Salvage

322
All salvage and towage performed by the Vessel shall be for the Charterers’ benefit and the cost of repairing
323
damage occasioned thereby shall be borne by the Charterers.
 
 
324
 20.
Wreck Removal

325
In the event of the Vessel becoming a wreck or obstruction to navigation the Charterers shall indemnify the
326
Owners against any sums whatsoever which the Owners shall become liable to pay and shall pay in consequence
327
of the Vessel becoming a wreck or obstruction to navigation.
 
 
328
 21.
General Average

329
The Owners shall not contribute to General Average.
 
330
 22.
Assignment, Sub-Charter and Sale (See Clause 58 (Changes to the Parties))

 
 
337
 23.
Contracts of Carriage

338
(a)*  The Charterers are to procure that all documents issued during the Charter Period evidencing the terms and
339
conditions agreed in respect of carriage of goods shall contain a paramount clause incorporating any legislation
340
relating to carrier’s liability for cargo compulsorily applicable in the trade; if no such legislation exists, the
341
documents shall incorporate the Hague-Visby Rules. The documents shall also contain the New Jason Clause and
342
the Both-to-Blame Collision Clause.
 
 
 
348
*Delete as applicable.
 
349
 24.
Corporate Guarantee

350
 
351
The Charterers undertake to furnish, on or about the date of this Charter    corporate guarantees from the Guarantor 
 as guarantee and the other Security Documents at Delivery for full performance of their obligations under this
353
Charter.
 
354
 25.
 Requisition/Acquisition

355
(a)
 Subject to the provisions of the Financial Instruments (if any), Iin the event of the Requisition for Hire of the Vessel by any governmental or other competent authority

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PART II
356
(hereinafter referred to as “Requisition for Hire”) irrespective of the date during the Charter Period when
357
“Requisition for Hire” may occur and irrespective of the length thereof and whether or not it be for an indefinite
358
or a limited period of time, and irrespective of whether it may or will remain in force for the remainder of the
359
Charter Period, this Charter shall not be deemed thereby or thereupon to be frustrated or otherwise terminated
360
and the Charterers shall continue to pay the stipulated hire in the manner provided by this Charter until the time
361
when the Charter would have terminated pursuant to any of the provisions hereof always provided however that if all hire has been paid by the Charterers hereunder then
362
in the event of “Requisition for Hire” any Requisition Hire or compensation is received or receivable by the Owners, the same
363
shall be payable to the Charterers during the remainder of the Charter Period or the period of the “Requisition
364
for Hire” whichever be the shorter.
 
 
 
 
371
 26.
War

372
(a)
Subject to the provisions of the Financial Instruments (if any), for the purpose of this clause, the words “War Risks” shall include any war (whether actual or threatened), act
373
of war, civil war, hostilities, revolution, rebellion, civil commotion, warlike operations, the laying of mines
374
(whether actual or reported), acts of piracy, acts of terrorists, acts of hostility or malicious damage, blockades
375
(whether imposed against all vessels or imposed selectively against vessels of certain flags or ownership, or
376
against certain cargoes or crews or otherwise howsoever), by any person, body, terrorist or political group, or
377
the Government of any state whatsoever, which may be dangerous or are likely to be or to become dangerous
378
to the Vessel, her cargo, crew or other persons on board the Vessel.
 
379
(b)
The Vessel, unless the written consent of the Owners be first obtained and adequate insurances are obtained
 (such adequacy to be determined by the Owners (acting reasonably)), shall not continue to or go through any
380
port, place, area or zone (whether of land or sea), or any waterway or canal, where it reasonably appears that
381
the Vessel, her cargo, crew or other persons on board the Vessel, in the reasonable judgement of the Owners,
382
may be, or are likely to be, exposed to War Risks. Should the Vessel be within any such place as aforesaid, which
383
only becomes dangerous, or is likely to be or to become dangerous, after her entry into it, the Owners shall have
384
the right to require the Vessel to leave such area.
 
385
 (c)
The Vessel shall not load contraband cargo, or to pass through any blockade, whether such blockade be imposed
386
on all vessels, or is imposed selectively in any way whatsoever against vessels of certain flags or ownership, or
387
against certain cargoes or crews or otherwise howsoever, or to proceed to an area where she shall be subject,
388
or is likely to be subject to a belligerent’s right of search and/or confiscation.
 
 
 
394 
(e)
The Charterers shall have the liberty:
 
395
(i) to comply with all orders, directions, recommendations or advice as to departure, arrival, routes, sailing in
396
convoy, ports of call, stoppages, destinations, discharge of cargo, delivery, or in any other way whatsoever, which

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
397
are given by the Government of the Nation under whose flag the Vessel sails, or any other Government, body or
398
group whatsoever acting with the power to compel compliance with their orders or directions;
 
399
(ii) to comply with the orders, directions or recommendations of any war risks underwriters who have the
400
authority to give the same under the terms of the war risks insurance;
 
401
(iii) to comply with the terms of any resolution of the Security Council of the United Nations, any directives of
402
the European Community, the effective orders of any other Supranational body which has the right to issue and
403
give the same, and with national laws aimed at enforcing the same to which the Owners are subject, and to obey
404
the orders and directions of those who are charged with their enforcement.
 
405
 (f)
 In the event of outbreak of war
 
 
 
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
 hire shall continue to be paid in accordance with Clause 11  (Hire) and except as aforesaid all
414
other provisions of this Charter shall apply until redelivery.
 
  

 
 
421
 
423
 28.
Termination (See Clauses 40 (Termination, Redelivery and Total Loss) and 44 (Termination Events))

424 
 
 
 
 
 
 
 

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PART II
 
 
 
 
 
 
 
 
 
 
462
 29.
Repossession

463
Subject to Clause 40.4, Iin the event of the termination of this Charter in accordance with the applicable provisions of Clause 44 (Termination Events), the
464
Owners shall have the right to repossess the Vessel from the Charterers at her current or next port of call, or at
465
a port or place convenient to them without hindrance or interference by the Charterers, courts or local
466
authorities. Pending physical repossession of the Vessel in accordance with this Clause 29 (Repossession), the Charterers shall
467
hold the Vessel as gratuitous bailee only to the Owners and the Charterers shall procure that the master and crew follow the orders and directions of the Owners. The Owners shall arrange for an authorised
468
representative to board the Vessel as soon as reasonably practicable following the termination of the Charter.
469
The Vessel shall be deemed to be repossessed by the Owners from the Charterers upon the boarding of the
470
Vessel by the Owners’ representative. All arrangements and expenses relating to the settling of wages,
471
disembarkation and repatriation of the Charterers’ Master, officers and crew shall be the sole responsibility of
472
the Charterers.
 
473
 30.
Dispute Resolution

474
(a)* This Contract and any non-contractual obligations arising under or in connection with it, shall be governed by and construed in accordance with English law.

(b) Any dispute arising out 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
475
or in connection with this Contract shall be referred to and finally resolved by arbitration in London in accordance
with the Arbitration
476
Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the
477
provisions of this Clause.

478
(c) The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA)
479
Terms current at the time when the arbitration proceedings are commenced.

480
(d) The reference shall be to three  (3) arbitrators. A party wishing to refer a dispute to arbitration shall appoint its

481
arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint
482
its own arbitrator within fourteen (14) calendar days of the date that the notice is delivered to the other party and stating that it will appoint its arbitrator as sole
483
arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the
 
484
fourteen (14)
days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within
485
 
486
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
 
487
accordingly.
The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement.

488
(e)Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the
489
appointment of a sole arbitrator.

 
(f) Where the reference is to three (3) arbitrators the procedure for making appointments shall be in accordance with the procedure for full arbitration stated above.

490
 
491
(g) 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
492
current at the time when the arbitration proceedings are commenced.
h) The language of the arbitration shall be English.

 
 
 
 
 

 
 
 

 
 

 
 
 

 
 

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PART II
 
 
 
 
 
 
 
 
 
 
 
 
534 31.  
Notices (see Clause 43 (Notices))

 
 

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PART III
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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PART III
 
 
 
 
 
 
 
 
 
 
 
 
 

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
 
 
 
or any debts whatsoever other than those arising from anything done or not done by the Buyers or any existing
 
 
 
 
 
delivered and taken over as she is at the time of delivery, after which the Sellers shall have no responsibility for
 
 

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PART V
    





   


   



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
 
ADDITIONAL CLAUSES TO STANDARD BAREBOAT CHARTER
 
CLAUSE 32 – CHARTER PERIOD
 
32.1
For the avoidance of doubt, 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).
 
32.2
The Charter Period shall, subject to the terms of this Charter, continue for a period of sixty (60) months from the Commencement Date.
 
CLAUSE 33 – CANCELLATION
 
If the MOA expires, is cancelled, terminated, rescinded or suspended or otherwise ceases to remain in full force and effect for any reason, then this Charter shall immediately terminate and be cancelled (with the exception of Clause 50 (Indemnities) and other provisions hereof expressed to survive such termination or cancellation) without the need for either of the Owners or the Charterers to take any action whatsoever provided however that, in consideration of the Owners entering into the MOA and this Charter as at the date hereof, the Owners shall be entitled to retain all indemnified expenses and/or fees paid by the Charterers under the MOA, this Charter and the other Leasing Documents, and such payment shall not be construed as a penalty but shall represent an agreed estimate of the loss and damage suffered by the Owners in entering into this Charter upon the terms and conditions contained herein and shall therefore be paid as compensation by the Charterers.
 
CLAUSE 34 – DELIVERY 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.
 
34.2
The obligation of the Owners to charter the Vessel to the Charterers hereunder is subject to and conditional upon:
 
(a)
the delivery of the Vessel to the Owners (as buyers under the MOA) by the Charterers (as sellers under the MOA) pursuant to the MOA;
 
(b)
no Potential Termination Event or Termination Event having occurred from the date of this Charter to the last day of the Charter Period;
 
(c)
the representations and warranties contained in Clause 45 (Representations and Warranties) being true and correct on the date hereof and each day thereafter until and including the last day of the Charter Period;
 
(d)
Delivery occurring on or before the Cancelling Date;
 

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(e)
the Initial Sub-charter remains in full force and effect on Delivery and evidence satisfactory to the Owners that the Vessel shall continue to be subject to the Initial Sub-charter, and it is delivered to and employed by the Initial Sub-charterer thereunder, on the Commencement Date;
 
(f)
the Owners (by themselves or by their legal counsels) having received from the Charterers:
 

 (i)
on or before the date falling five (5) Business Days (or such other period as the Owners may agree in their sole discretion or as otherwise specified in Part A of Schedule 2) prior to the Prepositioning Date, the documents or evidence set out in Part A of Schedule 2 in form and substance satisfactory to them;
 

 (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, the documents or evidence set out in Part B of Schedule 2 in form and substance satisfactory to them; and
 

 (iii)
after Delivery, the documents and evidence set out in Part C of Schedule 2 in form and substance satisfactory to them within the time periods set out thereunder.
 
and if any of the documents listed in sub-clauses (i) and (ii) above are not in the English language then they shall be accompanied by an English translation.
 
34.3
The conditions precedent and conditions subsequent specified in Clause 34.2(e) (Delivery of Vessel) are inserted for the sole benefit of the Owners and may be waived or deferred in whole or in part and with or without conditions by the Owners. Upon the requirements of Clause 34.2 (Delivery of Vessel) being fulfilled or waived to the satisfaction of the Owners, the Owners shall give notice thereof in writing to the Charterers.
 
34.4
On delivery to and acceptance by the Owners (as buyers under the MOA) of the Vessel under the MOA from the Charterers (as sellers under the MOA) and subject to the provisions of this Clause, the Vessel shall be deemed to have been delivered to, and accepted without reservation by, the Charterers under this Charter on an "as is where is" basis and in such condition as the Vessel was delivered to the Owners (as buyers under the MOA) under the MOA with, for the avoidance of doubt, any faults, deficiencies, defect and errors of description 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.
 
34.5
On Delivery, as evidence of the commencement of the Charter Period, the Charterers shall sign and deliver to the Owners, the Acceptance Certificate. Without prejudice to this Clause, 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.
 
34.6
Without prejudice to and notwithstanding the provisions of this Clause, 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 (as buyers under the MOA) under the MOA from the Charterers (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:
 

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(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.
 
34.7
Without prejudice to Clause 9 (Inventories, Oil and Stores), the Owners shall not be obliged to deliver the Vessel to the Charterers with any bunkers and unused lubricating 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 the Owners in respect of the same.
 
CLAUSE 35 – QUIET ENJOYMENT
 
Provided that the Charterers do not breach the terms of any Assignable Sub-charter and that no Termination Event or Total Loss has occurred at any relevant time, the Owners hereby irrevocably agree not to disturb or interfere with the Charterers' lawful use, possession and quiet enjoyment of the Vessel during the Charter Period in any way whatsoever. The Owners shall, on or prior to any assignment, transfer or sale of the Vessel and/or the Leasing Documents by the Owners as permitted under Clause 58.2 (Assignment or transfer by the Owners), use reasonable endeavours to procure that the Owners' Financier (if any) enters into a quiet enjoyment agreement with the Charterers on such terms as may be acceptable to the Charterers.
 
CLAUSE 36 – 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 and the Advance Charterhire in respect of the chartering of the Vessel.
 
36.2
The Charterers shall pay to the Owners an amount equivalent to the Advance Charterhire (on a non-refundable basis) on the Commencement Date, which payment shall be deemed to have been effected on the Commencement Date by setting off the Charterers' obligation to pay the Advance Charterhire against the Owners' obligation as buyers to pay that part of the Purchase Price in an amount equal to the Advance Charterhire, to the Charterers (as sellers under the MOA) on the Commencement Date pursuant to clause 18(b)(i) of the MOA.
 
36.3
Following Delivery, the Charterers shall pay, on each Payment Date, a quarterly instalment of Charterhire to the Owners in arrears and each instalment of Charterhire shall consist of:
 
(a)
a fixed component of the Charterhrie (the "Fixed Charterhire"), being an amount equal to US$442,500; and
 
(b)
the Variable Charterhire in respect of the relevant Term.
 
36.4
The Vessel shall not at any time be deemed off-hire and the Charterers' obligation to pay all Charterhire and any other amounts payable under this Charter shall be paid in Dollars and shall be absolutely and unconditionally payable under any and all circumstances and shall not be affected by any circumstances of any nature whatsoever including but not limited to:
 

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(a)
(except in the case of the Advance Charterhire and/or the Upfront Fee, as the case may require) 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;
 
(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 unavailability of the Vessel, including, 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, or for registration or documentation under the laws of any relevant jurisdiction;
 
(e)
the Total Loss or any damage to or forfeiture or court marshal's or other sale of the Vessel;
 
(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 or 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 or any Assignable Sub-charter 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 or any Assignable Sub-charter 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 or any other highly infectious or contagious diseases (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;
 

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(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 virus or disease.
 
36.5
All payments of the Charterhire, the Advance Charterhire, the Upfront Fee and any other moneys payable hereunder shall be made in Dollars.
 
36.6
Time of payment of the Charterhire, the Advance Charterhire, the Upfront Fee and any other payments by the Charterers shall be of the essence of this Charter and shall be received by the Owners in same day available funds and not later than 5.00 pm (Shanghai time) on the due date of such payment.
 
36.7
All Charterhire, Advance Charterhire, Upfront Fee and any moneys payable hereunder shall be payable by the Charterers to the Owners to such account as the Owners may notify the Charterers in writing from time to time.
 
36.8
Payment of the Charterhire, the Advance Charterhire, the Upfront Fee and any other amounts payable by the Charterers to the Owners under the Leasing Documents shall be at the Charterers' risk until receipt by the Owners.
 
36.9
All stamp duty, value added 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, Advance Charterhire, and Upfront Fee and other payments payable under this Charter by addition to, and at the time of payment of, such amounts.
 
36.10
If the Charterers fail to make any payment due under this Charter on the due date, they shall pay interest on such late payment at the default rate of ten per cent. (10%) per annum and accruing from the date on which such payment became due until the date of receipt of payment thereof.
 

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36.11
All Variable Charterhire, 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 360-day year.
 
36.12
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 in the same calendar month.
 
36.13
For the purposes of determining the Variable Charterhire:
 
(a)
if no Term SOFR is available for any relevant Term the applicable Reference Rate shall be the Interpolated Term SOFR for a period equal in length to for that Term;
 
(b)
If no Term SOFR is available for any relevant Term 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) above applies but no Historic Term SOFR is available for any relevant Term, the applicable Reference Rate shall be the Interpolated Historic Term SOFR for a period equal in length to that Term; 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 36.17 shall apply.
 
36.14
The Owners shall notify the Charterers of the rate of interest in respect of a Term as soon as reasonably practicable after such rate of interest is determined by the Owners on the Quotation Day.
 
36.15
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 Outstanding Finance Amount or any part thereof would be in excess of the Reference Rate, the Owners shall promptly notify the Charterers accordingly and Clause 36.17 below shall apply to the prevailing Outstanding Finance Amount or any part thereof for that Term.
 
36.16
Immediately following the notification referred to in Clause 36.15 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 basis for determining an applicable Interest Rate for that Term. Subject to Clause 36.18, any substitute or alternative basis agreed pursuant to this Clause shall, with the prior written consent of the Parties, be binding on the Parties.
 
36.17
If:
 
(a)
this Clause 36.17 applies pursuant to Clause 36.13 or 36.15 above;
 
(b)
a substitute basis is not so requested and/or agreed pursuant to Clause 36.16 above; or
 
(c)
the amendment or waiver to the terms of the Leasing Documents is not so agreed pursuant to Clause 36.18,
 
the applicable Interest Rate shall be the percentage rate per annum which is the sum of:
 

 (i)
the Margin, and
 

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(ii)
the cost notified by the Owners (expressed as an annual rate of interest) of funding the Outstanding Finance Amount during such Term as reasonably determined by the Owners,
 
provided that if the rate pursuant to (ii) above is less than zero, the relevant rate shall be deemed to be zero.
 
If this Clause 36.17 applies pursuant to Clause 36.16 above 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 Outstanding Finance Amount for that Term shall be deemed, for the purposes of sub-clause(ii) above, to be the Reference Rate.
 
36.18
If a Published Rate Replacement Event has occurred in relation to any Published Rate for Dollars, the Owners, after consultation with the Charterer, are entitled to request any amendment or waiver (and such costs incurred in relation to such amendment or waiver shall be borne by the Charterers), which relates to:
 
(a)
providing for the use of a Replacement Reference Rate in the 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 interest 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 36.17 shall apply to the calculation of the Interest Rate.
 
CLAUSE 37 – POSSESSION OF VESSEL
 
37.1
The Charterers shall not, without the prior written consent of the Owners, assign, mortgage or pledge the Vessel, its Earnings, Insurances, Requisition Compensation or any other interest therein and/or any of its rights and interest under any Sub-charter or any other 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) other than Permitted Security Interests.
 

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37.2
The Charterers shall promptly notify in writing any party (as the Owners may request), including any Sub-charterer, that the Vessel is the property of the Owners and the Charterers shall provide the Owners with a copy of such written notification and satisfactory evidence that such party has received such written notification.
 
37.3
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.
 
37.4
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 and take (and shall procure that any such Sub-charterer shall take) all steps to prevent an arrest (threatened or otherwise) of the Vessel.
 
37.5
Without prejudice to Clause 10(a)(ii) (New Class and Other Safety Requirements), any time and costs associated with the re-designing, installation, inspection or docking of the Vessel for the purposes of complying with the requirements of any applicable regulations or conventions which come into force after the date of this Charter, including without limitation to, the International Convention for the Control and Management of Ships' Ballast Water and Sediments, shall be for the account of the Charterers.
 
CLAUSE 38 – INSURANCE
 
38.1
The Charterers shall procure that insurances are effected in form and substance satisfactory to the Owners and the Owners' Financier (if any) at all times during the Charter Period and that such insurances are:
 
(a)
in Dollars;
 
(b)
in the case of fire and usual marine risks (including hull and machinery) 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 the then applicable Market Value of the Vessel or (ii) one hundred and twenty per cent (120%) of the then prevailing Outstanding Finance Amount at the relevant time;
 
(c)
in the case of oil pollution liability risks for the Vessel, for an aggregate amount equal to the highest level of cover from time to time available under protection and indemnity club entry and in the international marine insurance market and for an amount of not less than $1,000,000,000;
 
(d)
in relation to protection and indemnity risks (including freight, demurrage and defence cover), in respect of the full tonnage of the Vessel and with a member of the International Group of P&I Clubs, and reputable protection and indemnity club member (in each case, which is acceptable to the Owners and the Owners' Financier (if any));
 
(e)
on terms acceptable to the Owners and the Owners' Financier (if any);
 

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(f)
through approved brokers and with first class international insurers and/or underwriters notified to the Owners (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 and protection and indemnity risks, in a war risks and protection and indemnity risks associations as notified to the Owners and the Owners' Financier (if any) (including being a member of the International Group of P&I Clubs); and
 
(g)
on no less favourable terms as may be required under the terms of any Sub-charter.
 
38.2
In addition to the terms set out in Clause 13(a), the Charterers shall procure that the obligatory insurances shall:
 
(a)
subject always to paragraph (b), name the Owners, the Approved Manager(s) 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;
 

 (1)
to any provable out-of-pocket expenses that they have 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 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' Financier if any (in such form as they require) that any deductible shall be apportioned between the Charterers and every other named assured or co-assured (other than the Owners and the Owners’ Financier if any) in proportion to the gross claims made by or paid to each of them and that they shall do all things necessary and provide all documents, evidence and information to enable the Owners and the Owners' Financier (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 or the Owners' Financier (if any) requires:
 

 (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 financiers, 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


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(iii)
name the Owners' Financier (as applicable) and the Owners (as applicable) as respectively the first ranking loss payee and the second ranking loss payee (and in the absence of any financiers, name the Owners as the first ranking loss payee) in accordance with the terms of the relevant loss payable clauses approved by the Owners' Financier 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' Financier (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' Financier (as applicable) shall be made without set-off, counterclaim or deductions or condition whatsoever;
 
(d)
provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Owners and/or the Owners' Financier (if any);
 
(e)
provide that the Owners and/or the Owners' Financier (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 change is made in the coverage which adversely affects the interest of the Owners and/or the Owners' Financier (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' Financier (if any) for thirty (30) days after receipt by the Owners and/or the Owners' Financier (if any) of prior written notice from the insurers of such cancellation, change or lapse.
 
38.3
The Charterers shall:
 
(a)
at least fourteen (14) days prior to Delivery (or such lesser period agreed by the parties), notify in writing the Owners (copied to the Owners' Financier (if any)) of the terms and conditions of all Insurances;
 
(b)
at least seven (7) days (or such lesser period agreed by the parties) before the expiry of any obligatory insurance or otherwise before the appointment of any new 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 Clause 38 (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 that obligatory insurance and of the proposed terms of renewal and obtain the Owners' approval to such matters;
 
(c)
at least seven (7) days (or such lesser period agreed by the parties) 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, 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 38.3(c) 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' Financier (if any).
 

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38.4
The Charterers shall ensure that all insurance companies and/or underwriters, and/or (if any) insurance brokers provide the Owners with copies of all policies, cover notes and certificates of entry relating to the obligatory insurances which they are to effect or renew and of a letter or letters or undertaking in a form required by the Owners and/or the Owners' Financier (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;
 
(b)
they will hold the benefit of such policies and such insurances, to the order of the Owners and/or the Owners' Financier (if any) and/or such other party in accordance with the said loss payable clause;
 
(c)
they will advise the Owners and the Owners' Financier (if any) promptly of any material change to the terms of the obligatory insurances of which they are aware;
 
(d)
following a written application from the Owners and/or the Owners' Financier (if any) not later than one (1) month before the expiry of the obligatory insurances, they will notify the Owners and the Owners' Financier (if any) not less than seven (7) days (or such lesser period agreed by the parties) 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' Financier (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' Financier (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 and/or the Owners' Financier (if any) and where practicable.
 
38.5
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' Financier (if any) with:
 
(a)
a copy of the certificate of entry for the Vessel as soon as such certificate of entry is issued;
 
(b)
a letter or letters of undertaking in such form as may be required by the Owners and/or the Owners' Financier (if any) or in such association's standard form; and
 
(c)
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 the Vessel.
 
38.6
The Charterers shall ensure that all policies relating to the obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.
 

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38.7
The Charterers shall procure that all premiums or other sums payable in respect of the obligatory insurances are punctually paid and produce all relevant receipts when so required by the Owners.
 
38.8
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.
 
38.9
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 associations);
 
(b)
the Charterers shall not make or permit any changes relating to the classification or classification society or manager or operator of the Vessel unless such changes have, if required, first been approved by the underwriters of the obligatory insurances or the Owners; and
 
(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 the 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.
 
38.10
The Charterers shall not make or agree to any 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 and/or the Owners' Financier (if any), not to be unreasonably withheld.
 
38.11
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.
 
38.12
The Charterers shall provide the Owners upon written request, copies of:
 
(a)
all communications between the Charterers and:
 

 (i)
the approved brokers; and
 

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(ii)
the approved protection and indemnity and/or war risks associations; and
 

 (iii)
the first-class international insurers and/or underwriters, which relate directly or indirectly to:
 

 (1)
the Charterers' obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
 

 (2)
any credit arrangements made between the Charterers and any of the persons referred to in paragraphs (i) or (ii) relating wholly or partly to the effecting or maintenance of the obligatory insurances; and
 
(b)
any communication with all parties involved in case of a claim under any of the Vessel's insurances.
 
38.13
The Charterers shall promptly provide the Owners (or any persons which they may designate) with:
 
(a)
any information which the Owners or the Owners' Financier (or any such designated person) request for the purpose of:
 

 (i)
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
 

 (ii)
effecting, maintaining or renewing any such insurances as are referred to in Clause 13(a) or dealing with or considering any matters relating to any such insurances; and
 
(b)
after the occurrence of a Termination Event which is continuing, copies of all communications between all parties in case of a claim under any of the Vessel's insurances.
 
38.14
If one or more of the obligatory insurances are not effected and maintained with first class international insurers or are effected with an insurance or captive subsidiary of the Owners or the Charterers, then the Charterers shall procure, at their own expense, that the relevant insurers maintain in full force and effect facultative reinsurances with reinsurers and through brokers, in each case, of recognised standing and acceptable in all respects to the Owners. Any reinsurance policy shall include, if and when permitted by law, a cut-through clause in a form acceptable to the Owners. The Charterers shall procure that underwriters of the primary insurances assign each reinsurance to the relevant financiers in full, if required.
 
38.15
The Charterers shall be solely responsible for all premiums and other documented costs or expenses which are reasonably incurred by (i) the Owners in connection with or with a view to effecting, maintaining or renewing a lessors' or innocent owners' interest insurance and a lessors' or innocent owners' additional perils insurance or any similar protective shipowner insurance that is taken out in respect of the Vessel, and/or (ii) the Owners or the Owners' Financier (if any) in connection with or with a view to effecting, maintaining or renewing a mortgagee's interest insurance and a mortgagee's additional perils insurance that is taken out in respect of the Vessel. In each case, the amount of the insurances referred to in this Clause 38.15 shall be equal to at least one hundred and twenty per cent. (120%) of the higher of (i) the prevailing Market Value of the Vessel at the relevant time and (ii) the Outstanding Finance Amount at the relevant time on such terms and conditions as the Owners may from time to time impose.
 

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38.16
The Charterers shall be solely responsible for 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, reasonable wear and tear to the Vessel only excepted.
 
38.17
The Charterers shall:
 
(a)
at the expense of the Charterers, furnish the Owners once a year (or, after a Termination Event has occurred and is continuing, as many times per year as the Owners may require) with a detailed report signed by an independent firm of marine insurance brokers or consultants appointed by the Owners dealing with the Insurances and stating the opinion of such firm as to the adequacy of the Insurances;
 
(b)
reimburse the Owners any documented expenses reasonably incurred by the Owners in obtaining the reports described in Clause 38.17(a); and
 
(c)
procure that there is delivered to the insurance brokers or consultants described in 38.17(a) such information in relation to the Insurances as such brokers or consultants may reasonably require.
 
38.18
The Charterers shall keep the Vessel insured at their time, costs and expenses against such other risks and/or insurances which the Owners or the Owners' Financier consider reasonable for a prudent shipowner or operator to insure against at the relevant time (as notified by the Owners) and which are, at that time, generally insured against by owners or operators of vessels similar to the Vessel (including but not limited to kidnap and ransom insurances, which the Charterers acknowledge shall fall within the scope of this clause).
 
38.19
The Charterers shall, in the event that any Approved Manager or any co-assured makes a claim under any obligatory insurances taken out in connection with Clause 38 but is unable to or otherwise fails to pay in full any deductible in connection with such claim (in an amount as apportioned between the Charterers and every other assured in proportion to the gross claims made by or paid to each of them), pay such shortfall in deductible payable on behalf of such Approved Manager or co-assured.
 
CLAUSE 39 – WARRANTIES RELATING TO VESSEL
 
39.1
It is expressly agreed and acknowledged that the Owners are not the manufacturer or original supplier of the Vessel which has been purchased by the Owners (as buyers under the MOA) from the Charterers (as sellers under the MOA) pursuant to the MOA 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).
 
39.2
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.
 

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39.3
The Charterers agree and acknowledge that the Owners shall not be liable for any claim, loss, damage, expense, injury, death, delay or other liability of any kind or nature caused directly or indirectly by the Vessel, whether onboard the Vessel or elsewhere, or by any inadequacy thereof or the use or performance thereof or any repairs thereto or servicing thereof and irrespective of whether such claim, loss, damage, expense, injury, death, delay or other liability shall arise from the unseaworthiness of the Vessel, and the Charterers shall not by reason thereof be released from any liability to pay any Charterhire or Advance Charterhire or other payment due under this Charter or any of the other Leasing Documents.
 
CLAUSE 40 – TERMINATION, REDELIVERY AND TOTAL LOSS
 
40.1
If the Termination Sum becomes payable in accordance with Clause 44.2, it is agreed by the Parties that payment of the Termination Sum is deemed to be proportionate as to amount, having regard to the legitimate interests of the Owners, in protecting against the Owners' risk of the Charterers failing to perform its obligations under this Charter.
 
40.2
Upon the Termination Notice Date, the Charterers' right to possess and operate the Vessel shall immediately cease (without in any way affecting the Charterers' obligation to pay the Termination Sum).
 
40.3
Upon irrevocable receipt of the Termination Sum pursuant to Clause 44.2 or the Special Termination Sum pursuant to Clause 44(A).1 or 44(A).3 (as the case may be) by the Owners in full:
 
(a)
this Charter shall terminate (provided that any provision hereof expressed to survive such termination shall do so in accordance with its terms); and
 
(b)
the Owners shall, 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 approved by the Owners) free from all mortgages, encumbrances, liens, debts or any claims whatsoever or any Port State or other administrative detentions, incurred or permitted by the Owners (save for those mortgages, liens, encumbrances and debts created under the Leasing Documents or 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, with such transfer otherwise made in accordance with Clauses 49.1(a) and 49.1(b).
 
40.4
If the Charterers fail to make any payment of the Termination Sum on the due date thereof:
 
(a)
interest on such outstanding amount shall accrue in accordance with Clauses 36.10 and 36.11; and
 
(b)
the Charterers shall:
 

 (i)
upon the Owners' prior written request (at the Owners' sole discretion), be obliged to (and at the Charterers' own cost) redeliver the Vessel to the Owners at such ready and nearest safe port as the Owners may require; further and for the avoidance of doubt, the Owners shall be entitled (at the 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. The Earnings of the Vessel during such period less its operational expenses (including, without limitation, any maintenance costs of, and costs for fuel, bunkering, lubricants or oils for the Vessel) (the "Net Trading Proceeds") shall be applied against the Termination Sum and any other amounts payable under the Leasing Documents pursuant to Clause 54 (General Application of Proceeds) and if such use of the Vessel results in the Owners suffering a loss then such losses shall, for the avoidance of doubt, be included in the indemnities contained in Clause 50 (Indemnities) and be added to the Termination Sum. Upon redelivery of the Vessel this Charter shall terminate save for the provisions set out in Clause 30 (Dispute Resolution), Clause 36.10, this Clause 40 (Termination, Redelivery and Total Loss) and Clause 50 (Indemnities) and any other provisions expressed to survive termination or that are cross referred to in the survived clauses or are required to survive to enable proper construction of the survived terms; and/or
 

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(ii)
the Owners shall at any point following such redelivery be entitled (at the Owners' sole discretion) to sell the Vessel on terms they deem fit (an "Owners' Sale") in which case the sale proceeds (after deducting all fees, taxes, disbursements, any maintenance costs of, and costs for fuel, bunkering or oils for, the Vessel and any other costs and expenses incurred by the Owners in connection with such sale) (the "Net Sales Proceeds") derived from such sale shall be applied against the Termination Sum pursuant to Clause 54 (General Application of Proceeds) and any other amounts payable under Clause 50 (Indemnities) in any manner the Owners deem fit and any excess of such amount after such application shall be paid to the Charterers. If the Net Sales Proceeds are not in an amount sufficient to discharge in full the Termination Sum and any other amounts payable under Clause 50 (Indemnities), the Charterers shall continue to be liable for the shortfall and interest shall continue to accrue on such shortfall in accordance with Clause 36.11. Upon completion of such Owners' Sale this Charter shall terminate save for Clause 30 (Dispute Resolution), Clause 36.10, this Clause 40 (Termination, Redelivery and Total Loss), Clause 50 (Indemnities) and any other provisions expressed to survive termination or that are cross referred to in the survived clauses or are required to survive to enable proper construction of the survived terms; or
 
(c)
the Charterers shall, upon the Owners' prior written request (at the Owners' sole discretion) be obliged to (and at the Charterers' own cost) redeliver the Vessel to the Owners at such ready and nearest safe port as the Owners may require; and as from such redelivery the Owners shall maintain ownership of such Vessel and own, operate or sell or otherwise use it in any manner they deem fit and apply the then current Market Value of the Vessel (less an amount determined by the Owners as being an amount equal to the amount of the usual and reasonable expenses which would be reasonably likely to be incurred in connection with a sale of the Vessel or other vessel) (the "Adjusted Market Value"), against the Termination Sum and all other amounts payable to the Owners under this Charter in which case if:
 

 (i)
the amount of the relevant Adjusted Market Value is in excess of the aggregate amounts due to the Owners under this Charter, such excess will be paid to the Charterers subject to no other actual or contingent liabilities existing at the relevant time; or
 

 (ii)
in case the amount of the relevant Adjusted Market Value is not sufficient to discharge in full the aggregate amounts due to the Owners under this Charter following such application the Charterers shall continue to be liable for the shortfall and interest shall continue to accrue on such shortfall in accordance with Clauses 36.10 and 36.11.
 
Any terms expressly provided to survive post-termination of this Charter shall continue to be in full force and effect at all times thereafter.


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40.5
If the Charterers are required to redeliver the Vessel to the Owners pursuant to Clause 40.4, the Charterers shall (i) keep the Owners informed of the Vessel's itinerary for the voyage and expected geographical range of redelivery, leading up to redelivery and shall serve the Owners with notices of the approximate/definite number of days the Vessel's redelivery. 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 in accordance with the notices given; and (ii) ensure that the Vessel shall, at the time of redelivery to the Owners (at the Charterers' cost and expense):
 
(a)
be in compliance with its Insurances;
 
(b)
be in an equivalent class as she was as at the Commencement Date without any overdue recommendation or condition, 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;
 
(c)
have passed her 5-year and if applicable, 10-year special surveys, and any subsequent second intermediate surveys and drydock at the Charterers' time and expense without any overdue condition and to the satisfaction of the Classification Society;
 
(d)
if the Classification Society or the Flag State require or will require the Vessel to undergo dry-docking within three (3) months of the date of redelivery, be redelivered after the satisfactory completion of such dry-docking at the cost and time of the Charterers;
 
(e)
with all the Vessel's classification, trading, national and international certificates that the Vessel had when she was delivered under this Charter and the log book and other certificates and documents necessary for the operation of the Vessel, valid and without overdue conditions or recommendation falling due;
 
(f)
have her survey cycles up to date and trading and class certificate valid for at least the number of months agreed in Box 17;
 
(g)
be redelivered to the Owners together with all spare parts and spare equipment or replacement items as were on board at the time of Delivery (but only to the extent they have not already been used in the operation of the Vessel), 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;
 
(h)
be free of any cargo (unless otherwise agreed by the Owners) and Security Interest (save for Permitted Security Interests);
 
(i)
be free of any charter and other employment unless the Owners wish to retain the continuance of any then existing charter or as otherwise agreed by the Owners in their absolute discretion;
 
(j)
be free of officers and crew (unless otherwise agreed by the Owners);
 
(k)
have had her underwater parts treated with anti-fouling to last for the ensuing period up to the next scheduled dry docking of the Vessel;
 

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(l)
be redelivered to the Owners together with all material information generated during the Charter Period in respect of the use, possession, operation, navigation, utilization of lubricating oil and the physical condition of the Vessel, whether or not such information is contained in the Charterers' equipment, computer or property; and
 
(m)
having such volume of bunkers on board the Vessel as would be sufficient to enable the Vessel to sail to the nearest bunkering port.
 
40.6
The Owners shall have the right to appoint (at the Charterers' cost and expense) surveyor(s) for the purpose of determining the condition of the Vessel at redelivery. The findings of the surveyor appointed by the Owners (the "Owners' Surveyor") shall be conclusive. The Charterers shall provide the Owners' Surveyor with all such facilities and access to the Vessel as may be required to enable such Owners' Surveyor to conduct its survey of the Vessel and shall take all such actions as may be recommended by the Owners' Surveyor to ensure that the Vessel shall be redelivered to the Owners in accordance with Clause 41.6.
 
40.7
The Owners have no obligation to accept redelivery of the Vessel until they are satisfied that the Vessel has been put into the redelivery conditions as set out in Clause 40.5 and other relevant conditions of this Charter. Moreover, the Owners reserve all rights to recover from the Charterers any costs, expenses and/or liabilities incurred or suffered by them (including, without limitation, the costs of any docking and/or repairs which may be required to restore the Vessel to the structure, state, condition and class as that in which the Vessel was delivered (fair wear and tear not affecting class excepted, but without any recommendations or conditions as to class)) as a result of the Vessel not being redelivered in accordance with the terms of this Charter.
 
40.8
The Owners shall, at the time of the redelivery of the Vessel, take over all bunkers, lubricating oil, unbroached provisions, paints, ropes and other consumable stores (excluding spare parts) in the Vessel at no cost to the Owners.
 
40.9
Throughout the Charter Period, the Charterers shall bear the full risk of any Total Loss of or any other damage to the Vessel however arising. If the Vessel, for any reason, becomes a Total Loss after Delivery, the Charterers shall pay the Special Termination Sum to the Owners on the earlier of (the "Total Loss Payment Date"):
 
(a)
the date falling sixty (60) days after such Total Loss has occurred; and
 
(b)
the date of receipt by the Owners and/or the Owners' Financier (if any) of the Total Loss Proceeds.
 
40.10
Upon such receipt by the Owners of the Special 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.
 
40.11
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 Clause 54 (General Application of Proceeds) and shall satisfy the obligation of the Charterers to pay the Special Termination Sum to the extent received by the Owners and/or the Owners' Financiers in accordance with the terms of the relevant loss payable clause. The obligation of the Charterers to pay the Special 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.
 

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40.12
If the Total Loss Proceeds unconditionally received by the Owners and/or the Owners' Financiers in accordance with the terms of the relevant loss payable clause are less than the Special Termination Sum, the Charterers shall pay such shortfall to the Owner on the Total Loss Payment Date.
 
40.13
The Owners shall have no obligation to supply to the Charterers with a replacement vessel following the occurrence of a Total Loss.
 
CLAUSE 41 – FEES AND EXPENSES
 
41.1
In consideration of the Owners entering into this Charter, the Charterers shall pay to the Owners or their nominee a non-refundable upfront fee (the "Upfront Fee") at such time and in such amount to be set out in the Fee Letter.
 
41.2
Each Party shall be responsible for their own costs and expenses to review and negotiate the term sheet relating to this Charter. All documented costs and expenses incidental to and incurred by the Owners in the preparation, negotiation, execution and delivery of the Charter and other Leasing Documents including, but not limited to, all documented costs and expenses reasonably incurred by the Owners and all documented legal costs, expenses and other disbursements reasonably incurred by the Owners' legal counsels in connection with the same, shall be for the account of the Charterers.
 
41.3
If:
 

 (a)
the Charterers request an amendment, waiver or consent (including an amendment or a waiver to the terms of the Leasing Documents is required pursuant to Clause 36.18 to address the fact that a Published Rate Replacement Event has occurred); or
 

 (b)
the Charterers make a request to re-register the Vessel in another Flag State,
 
the Charterers shall, on demand, reimburse the Owners for the amount of all documented costs and expenses (including, without limitation, any legal fees) reasonably 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).
 
41.4
All documented costs and expenses reasonably incurred by the Owners in relation to the acquisition, financing (including, without limitation, any Breakfunding Costs payable by the Owners to the Owners' Financiers (if any)) and registration of the Vessel and this Charter by the Owners 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 annual 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 such Flag State to 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/tonnage tax amounts payable to the Flag State or any other aforesaid costs, expenses and/or taxes when the same fall due.
 

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41.5
All documented costs and expenses (including, without limitation, any legal fees) reasonably 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 Clause 40 (Termination, Redelivery and Total Loss) shall be for the account of the Charterers.
 
41.6
The Charterers shall on demand pay or reimburse the Owners for the amount of all documented 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, any Assignable Sub-charter or any Security Interest created thereunder and with any proceedings instituted by or against the Owners as a consequence of entering into any Leasing Document or any Assignable Sub-charter, taking or holding any Security Interests created thereunder or enforcing those rights, including, without limitation, any documented losses, costs and expenses which the Owners may from time to time sustain, incur or become liable by reason of the Owners being the registered owner of the Vessel and/or being deemed by any court or authority to be an operator or controller, or in any way concerned in the operation or control, of a Vessel.
 
CLAUSE 42 - NO WAIVER OF RIGHTS
 
42.1
No neglect, omission, delay or indulgence on the part of either Party in enforcing the terms and conditions of this Charter 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.
 
42.2
No right or remedy conferred upon either party by this Charter 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 43 – NOTICES
 
43.1
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 addresses:
 

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(A)
to the Owners:
China Huarong Shipping Financial Leasing Company Limited
Room 6006, 6th Floor, No. 15 Second East Zhongshan Road, Shanghai, China, 200002
Attention: Jones Cao/Annie Tao/ Sun Linzi
Tel: +86(0)21 63268756
Email:
caojiong@hrflc.com
taobeijuan@hrflc.com/ sunlinzi@hrflc.com
     
(B)
to the Charterers:
Friend Ocean Navigation Co. c/o Seanergy Maritime Holdings Corp.
154 Vouliagmenis Avenue, 166 74 Glyfada, Athens, Greece
Attention: Legal Department
Tel: +30 210 8913520
Email: legal@seanergy.gr and finance@seanergy.gr
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.
 
43.2
Any such communication shall be deemed to have reached the party to whom it was addressed (a) when delivered (in case of a registered letter), or (b) when actually received in readable form (in case of an email). A notice or other such communication received on a non-working day or after 5.00 p.m. in the place of receipt shall be deemed to be served on the next following working day in such place.
 
CLAUSE 44 – TERMINATION EVENTS
 
44.1
The Owners and the Charterers hereby agree that any of the following events shall constitute a Termination Event:
 
(a)
any Obligor (other than a Third Party Approved Manager) fails to make any payment on the due date or on demand in accordance with the terms of any Leasing Document to which it is a party unless such failure to pay is caused by a force majeure or technical error and payment is made within ten (10) Business Days of its due date;
 
(b)
the Charterers breach or omit to observe or perform any of their undertakings in Clause 46.1(j), (l), (n), (p), (r), (s), (t), (u), (v), (y), (dd), (ee) or (ff) or the Guarantor breaches or omits to observe or perform any of its undertakings contained in the Guarantee, provided that no Termination Event under this Clause 44.1(b) will be triggered if the breach or omission to observe or perform relates solely and directly to any Sanctions imposed by the law or regulation of the People's Republic of China which deviates from those imposed by the United Nations, in which case the Charterers shall be entitled to terminate this Charter pursuant to Clause 44(A).3;
 
(c)
the Charterers fail to obtain and/or maintain the Insurances required under Clause 38 (Insurance) in accordance with the provisions thereof or any insurer in respect of such Insurances cancels the Insurances or disclaims liability with respect thereto;
 

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(d)
any Obligor (other than a Third Party Approved Manager) commits any other breach of, or omits to observe or perform, any of their other obligations or undertakings in this Charter or any other Leasing Document (other than a breach referred to in paragraphs (a), (b(b) or (c) above) unless such breach or omission is in the reasonable opinion of the Owners, remediable and such Obligor remedies such breach or omission to the reasonable satisfaction of the Owners within ten (10) Business Days of the occurrence thereof;
 
(e)
any representation or warranty made or deemed to be made by any Obligor (other than a Third Party Approved Manager) in or pursuant to any Leasing Document to which it is a party or if applicable, in the case of the Charterers only, the Acceptance Certificate, proves to be untrue or misleading in a material way when it is made;
 
(f)
any of the following occurs in relation to any Financial Indebtedness of an Obligor (other than a Third Party Approved Manager):
 

 (i)
any Financial Indebtedness of such entity is not paid when due or, if so payable, on demand after any applicable grace period has expired;
 

 (ii)
any Financial Indebtedness of such entity becomes due and payable, prior to its stated maturity date as a consequence of any event of default and not as a consequence of the exercise of any voluntary right of prepayment;
 

 (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);
 

 (iv)
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 entity 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);
 
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 (iv) 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 (other than a Third Party Approved Manager):
 

 (i)
such entity becomes unable to pay its debts as they fall due; or
 

 (ii)
the value of the assets of such entity is less than its liabilities (taking into account contingent and prospective liabilities); or
 

 (iii)
any of the assets of such entity (with a value amounting in aggregate to $500,000) are subject to any form of expropriation, execution, attachment, arrest, sequestration or distress (or any analogous process in any jurisdiction) which is not discharged within thirty (30) days; or
 

 (iv)
any administrative or other receiver is appointed over all or a part of the assets of such entity unless as part of a solvent reorganisation which has been approved by the Owners; or
 

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(v)
such entity 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 shareholders or directors pass a resolution to the effect that it should be wound up, placed in administration or cease to carry on business; or
 

 (vi)
a petition is presented in any Relevant Jurisdiction for the winding up or administration, or the appointment of a provisional liquidator of such entity unless the relevant petition is frivolous or vexatious and is being contested in good faith and on substantial grounds and is dismissed or withdrawn within twenty-one (21) days of the presentation of the petition; or
 

 (vii)
such entity 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 any of its 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; or
 

 (viii)
any meeting of the shareholders or directors of such entity is summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraph (iii) to (vii) above; or
 

 (ix)
in any jurisdiction, any event occurs or any procedure is commenced which, in the opinion of the Owners, is similar to any of the foregoing referred to in paragraphs (iii) to (vii) above inclusive; or
 
(h)
there is a Change of Control, without the prior written consent of the Owners;
 
(i)
an Obligor (other than a Third Party Approved Manager) suspends or ceases or threatens to suspend or cease carrying on all or a material part of its business;
 
(j)
any consent, approval, authorisation, license or permit necessary to enable the Charterers to operate or charter the Vessel or to enable any of them to comply with any provision of this Charter, or the other Leasing Documents to which it is a party or to ensure that the obligations of the Charterers are legal, valid, binding or enforceable is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent, approval, authorisation, license or permit is not fulfilled;
 
(k)
any event or circumstance occurs which has or is reasonably likely to have a Material Adverse Effect;
 
(l)
the Vessel is subject to any form of expropriation, execution, attachment, arrest, sequestration or distress (or any analogous process in any jurisdiction) which is not discharged within forty-five (45) days (or such longer period as the Owners may agree in writing);
 
(m)
this Charter or any other Leasing Document and/or any Security Interest created by a Leasing Document:
 

 (i)
in the case of any such Security Interest, proves to have ranked after, or loses its priority to, another Security Interest or any other third-party claim or interest;
 

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(ii)
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;
 

 (iii)
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 Leasing Document; or
 

 (iv)
is in any way imperilled or in jeopardy;
 
(n)
an Obligor (other than a Third Party Approved Manager) rescinds, repudiates or terminates a Leasing Document, or an Approved Management Agreement;
 
(o)
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
 

 (ii)
contrary to, or inconsistent with, any regulation,
 
for any Obligor (other than a Third Party Approved Manager) to maintain or give effect to any of its obligations under this Charter or any of the other Leasing Documents to which it is a party in the manner it is contemplated under such Leasing Document or any of the obligations of any Obligor under any Leasing Document to which it is a party or the Initial Sub-charter are not or cease to be legal, valid, binding and enforceable;
 
(p)
the Security Interest constituted by any Leasing Document is in any way imperilled or in jeopardy;
 
(q)
the occurrence of any Termination Event (as defined in the Other Charter);
 
(r)
there is a merger, amalgamation, demerger or corporation reconstruction of an Obligor (other than a Third Party Approved Manager) without the Owners' prior written consent;
 
(s)
the Guarantor is de-listed from the Nasdaq Capital Market (or any other stock exchange acceptable to the Owners); or
 
(t)
the occurrence of any termination event or event of default (howsoever defined therein) under any lease, hire purchase agreement, charter or any other financing arrangement in respect of any Associated Vessel (other than the Vessel and the Other Vessel).
 
44.2
Notwithstanding and without prejudice to Clause 33 (Cancellation), upon the occurrence of a Termination Event which is continuing, 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, 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 such notice (the "Termination Notice Date" but which shall be no earlier than the date falling ten (10) Business Days after the date of such notice).
 

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44.3
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.
 
44.4
Without limiting the generality of the foregoing or any other rights of the Owners, upon the occurrence of a Termination Event which is continuing, the Owners shall have the sole and exclusive right and power to (i) settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to or pertaining to the Vessel and this Charter and (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 (iii) change or appoint a new manager for the Vessel other than an Approved Manager and the appointment of any Approved Manager may be terminated immediately without any recourse to the Owners.
 
44.5
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 Charter, and in each case which is not remedied within the applicable grace period (if any).
 
CLAUSE 44(A) – MANDATORY SALE
 
44(A).1
Subject to Clause44(A).2, if it becomes unlawful in any applicable jurisdiction for the Owners to perform any of their obligations as contemplated by this Charter or the MOA or any other Leasing Documents or for the Owners' Financiers (if any) to perform their obligations under the Financial Instruments, the Owners shall notify the Charterers of this event and the Charterers shall be required to pay the Special Termination Sum to the Owners on the next Payment Date following such notice by the Owners or, if earlier, the date specified by the Owners in the notice delivered to the Charterers (being no earlier than the last day of any applicable grace period permitted by law), and this Charter shall terminate in accordance with the procedures set out in Clause 40 (Termination, Redelivery and Total Loss).
 
44(A).2
If the Special Termination Sum becomes payable under or pursuant to Clause 44(A).1, the Owners shall, in consultation with the Charterers for a period not less sixty (60) days from the occurrence of the circumstances resulting in the Special Termination Sum becoming payable under or pursuant to Clause 44(A).1, take all reasonable steps to mitigate any such circumstances, provided that (i) this Clause 44(A).2 does not in any way limit the obligations of any Obligor under any Leasing Documents; and (ii) the Owners are not obliged to take any steps under this Clause44(A).2 if, in the opinion of the Owners, to do so might be prejudicial to the Owners.
 
44(A).3
If any Sanctions imposed by the law or regulation of the People's Republic of China deviates from those imposed by the United Nations and the compliance with such Sanctions is or has become:
 

 (i)
Illegal / unlawful; or
 

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(ii)
unduly onerous (including, without limitation, a scenario where Charterers are not able to perform their global operation and trading, directly because of such Sanctions) or wholly impractical,
 
for the Charterers or the Guarantor to maintain or give effect to any of its obligations under this Charter or any of the other Leasing Documents to which each is a party in the manner it is contemplated under such Leasing Document or any of the obligations of the Charterers or the Guarantor under any Leasing Document to which it is a party are not or cease to be legal, valid, binding and enforceable, the Charterers shall be entitled to pay the Special Termination Sum to the Owners on the next Payment Date following such occurrence or, if earlier, a date specified by the Owners (being no earlier than the last day of any applicable grace period permitted by law), and this Charter shall terminate in accordance with the procedures set out in Clause 40 (Termination, Redelivery and Total Loss).
 
CLAUSE 45 – REPRESENTATIONS AND WARRANTIES
 
45.1
The Charterers represent and warrant to the Owners as of the date hereof, and on each day henceforth until the last day of the Charter Period, as follows:
 
(a)
there has been no Change of Control;
 
(b)
each Obligor is duly incorporated and validly existing under the laws of its jurisdiction of its incorporation;
 
(c)
each Obligor has the capacity, and has taken all actions and obtained all consents, approvals, authorisations, licenses or permits necessary for it:
 

 (i)
to execute each of the Leasing Documents, any Sub-charter and any Approved Management Agreement to which it is a party; and
 

 (ii)
to comply with and perform its obligations under each of the Leasing Documents, any Sub-charter and any Approved Management Agreement to which it is a party;
 
(d)
the entry into and performance by any Obligor by it of, and the transactions contemplated by, each Leasing Document, any Sub-charter and any Approved Management Agreement to which it is a party do not and will not conflict with:
 

 (i)
any law or regulation applicable to it;
 

 (ii)
its constitutional documents; or
 

 (iii)
any agreement or instrument binding upon it or constitute a default or termination event (however described) under any such agreement or instrument.
 
(e)
all the consents, approvals, authorisations, licenses or permits referred to in Clause 45.1(c) (Representations and Warranties) remain in force and nothing has occurred which makes any of them liable to revocation;
 
(f)
each of the Leasing Documents or any Assignable Sub-charter to which an Obligor is a party constitutes such Obligor's legal, valid and binding obligations enforceable against such party in accordance with its respective terms and any relevant insolvency laws affecting creditors' rights generally;
 

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(g)
no third 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 or any moneys payable hereunder and/or any of the other Leasing Documents or any Assignable Sub-charter;
 
(h)
all payments which an Obligor is liable to make under any Leasing Document or any Assignable Sub-charter 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 the jurisdiction of incorporation;
 
(i)
no legal or administrative action involving an Obligor involving claim(s) amounting to more than US$5,000,000 has been commenced or taken;
 
(j)
each Obligor has paid all taxes applicable to, or imposed on or in relation to it, its business or if applicable, the Vessel, except for those being contested in good faith with adequate reserves;
 
(k)
the choice of governing law as stated in each Leasing Document or any Assignable Sub-charter to which an Obligor is party to and the agreement by such party to refer disputes to the relevant courts or tribunals as stated in such Leasing Document or any Assignable Sub-charter are valid and binding against such Obligor;
 
(l)
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 such Obligor save for any obligation which is mandatorily preferred by law and not by virtue of any contract;
 
(m)
each Security Document creates (or once entered into, will create) the Security Interest which it is expressed to create with the ranking and priority it is expressed to have;
 
(n)
no Obligor is a US Tax Obligor, and none of them have established a place of business in the United States of America;
 
(o)
no Obligor, nor any of their respective Affiliates, members, (other than in the case of the Guarantor) shareholders, directors, officers, employees or agents, nor (to the best of its knowledge) any Sub-charterer:
 

 (i)
is a Restricted Person;
 

 (ii)
is owned or controlled by or acting directly or indirectly on behalf of or for the benefit of, a Restricted Person;
 

 (iii)
owns or controls a Restricted Person; or
 

 (iv)
has a Restricted Person serving as a director, officer or, to the best of its knowledge, employee;
 
(p)
each Obligor, and their respective directors, officers, (other than in the case of the Guarantor) shareholders, employees and agents and (to the best of its knowledge) any Sub-charterer is in compliance with all Sanctions laws, and none of them have been or are currently being investigated on compliance with Sanctions, they have not received notice or are aware of any claim, action, suit or proceeding against any of them with respect to Sanctions and they have not taken any action to evade the application of Sanctions;
 

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(q)
the Vessel is not employed, operated or managed in any manner which (i) is contrary to any Sanctions and in particular, the Vessel is not used by or to benefit any party which is a target of Sanctions or trade to any area or country where trading the Vessel to such area or country would constitute a breach of any Sanctions or published boycotts imposed by any of the United Nations, the European Union, the United States of America, the United Kingdom or the People's Republic of China; or (ii) would trigger the operation of any sanctions limitation or exclusion clause in any insurance documentation;
 
(r)
each Obligor and (to the best of its knowledge) any Sub-charterer is not in breach of any laws or regulations relating to the Vessel and its ownership, employment, operation, management and registration, including, without limitation, the ISM Code, the ISPS Code, all Environmental Laws, the laws of the Vessel's registry and in particular, all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws and each of the Obligors and (to the best of its knowledge) Sub-charterer has instituted and maintained systems, controls, policies and procedures designed to:
 

 (i)
prevent and detect incidences of bribery and corruption, money laundering and terrorism financing; and
 

 (ii)
promote and achieve compliance with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws;
 
(s)
that in relation to the Initial Sub-charter or any other Sub-charter:
 

 (i)
as at the date of this Charter or otherwise as at the date of such Sub-charter and/or at the time of delivery of such Sub-charter to the Owner (as the case may be), the copy of the Initial Sub-charter or such Sub-charter provided to the Owners is a true and complete copy and there have been no amendments, supplements or variations thereto; and
 

 (ii)
the Initial Sub-charterer or any other Sub-charterer is fully aware of the transactions contemplated under this Charter;
 
(t)
none of the Obligors nor any of their assets, in each case, has any right to immunity from set off, legal proceedings, attachment prior to judgment or other attachment or execution of judgement on the grounds of sovereign immunity or otherwise;
 
(u)
none of the Obligors is insolvent or in liquidation or administration or subject to any other formal or informal insolvency procedure, and no receiver, administrative receiver, administrator, liquidator, trustee or analogous officer has been appointed in respect of any Obligor or all or material part of their assets;
 
(v)
no Termination Event or Potential Termination Event is continuing or might reasonably be expected to result from the entry into and performance of this Charter or any other Leasing Document or any Assignable Sub-charter;
 
(w)
as at the date of this Charter, the Vessel is commercially, technically or otherwise managed under each Approved Management Agreement which remains in full force and effect;
 
(x)
as at the date of this Charter, the Charterers have not entered into any other investments, any sale or leaseback agreements, any off-balance sheet transaction or incurred any other liability or obligation (including, without limitation, any Financial Indebtedness of any obligations under a guarantee) except:
 

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(i)
liabilities and obligations under the Leasing Documents to which they are or, as the case may be, will be a party; or
 

 (ii)
liabilities or obligations incurred in the normal course of its business of trading, operating and chartering, maintaining and repairing the Vessel;
 
(y)
in relation to any information provided by any Obligor (or on its behalf) to the Owners for the purposes of this Charter and the other Leasing Documents:
 

 (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
 
(z)
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; and
 
(aa)
the entry by each Obligor into any Leasing Document or any Assignable Sub-charter does not in any way cause any breach, and is in all respects permitted, under the terms of any document which it is entered into.
 
CLAUSE 46 – CHARTERERS' UNDERTAKINGS
 
46.1
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)
there shall be sent to the Owners:
 

 (i)
as soon as possible, but in no event later than one hundred and eighty (180) days after the end of each financial year of the Charterers, the unaudited annual financial reports of the Charterers in each case certified as to their correctness by a director of the Charterers;
 

 (ii)
as soon as possible, but in no event later than ninety (90) days after the end of each half-year, the unaudited half-yearly accounts of the Charterers in each case certified as to their correctness by a director of the Charterers;
 

 (iii)
as soon as possible, but in no event later than one hundred and eighty (180) days after the end of each financial year of the Guarantor, the audited consolidated annual financial reports of the Guarantor; and
 

 (iv)
as soon as possible, but in no event later than ninety (90) days after the end of each half-year, the unaudited consolidated half-yearly accounts the Guarantor certified as to their correctness by a director or officer of the Guarantor,
 
in each case, the Charterers shall procure that each set of financial statements and reports delivered pursuant to Clause 46.1(a) gives, and shall procure a director of the relevant company to certify the same 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 and reports were drawn up;
 

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(b)
following the occurrence of a Termination Event which is continuing, they will provide or procure the provision to the Owners, at the same time as they are dispatched, copies of all notices and minutes relating to any of their extraordinary shareholders' meeting which are dispatched to their shareholders or creditors or any class of them;
 
(c)
they will provide or will procure that each Obligor provides the Owners with details of any legal or administrative action involving such Obligor or the Vessel as soon as such action is instituted or it becomes apparent to such Obligor that it is likely to be instituted and is likely to have a Material Adverse Effect;
 
(d)
they will, and will procure that each other Obligor will, obtain and promptly renew or procure the obtainment 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 or any Assignable Sub-charter to which it is a party (including, without limitation, to sell, charter and operate the Vessel);
 
(e)
they will not, and will procure that each other Obligor will not, create, assume or permit to exist any Security Interest of any kind upon any Leasing Document or any Assignable Sub-charter to which such Obligor is a party, and if applicable, the Vessel, in each case other than the Permitted Security Interests;
 
(f)
they will, and will procure that each other Obligor, will ensure that the Vessel shall be free of encumbrances except for any encumbrances permitted in writing by the Owners;
 
(g)
they will at their own cost, and will procure that each other Obligor will:
 

 (i)
do all that such Obligor to ensures that any Leasing Document or any Assignable Sub-charter to which such Obligor is a party validly creates the obligations and the Security Interests which such Obligor purports to create; and
 

 (ii)
without limiting the generality of paragraph (i), promptly register, file, record or enrol any Leasing Document or any Assignable Sub-charter to which such Obligor is 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 or any Assignable Sub-charter to which such Obligor is a party, give any notice or take any other step which, is or has become necessary or desirable for any such Leasing Document or any Assignable Sub-charter to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which such Obligor creates;
 
(h)
they will, and will procure that each other Obligors will, notify the Owners promptly upon becoming aware of:
 

 (i)
any default by any Sub-charterer or the Charterers of the terms of any Assignable Sub-charter;
 

 (ii)
an event of default or termination event howsoever called under the terms of any Assignable Sub-charter entitling either (x) the Charterers to terminate such Assignable Sub-charter or (y) the relevant Sub-charterer to terminate such Assignable Sub-charter which has not been unconditionally waived by such Sub-charterer;
 

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(iii)
any pollution accident, major accident and/or incident to the Vessel by any reason whatsoever;
 

 (iv)
any damage caused to or alteration of the Vessel by any reason whatsoever which exceed US$1,000,000;
 

 (v)
any alteration or modification made to the Vessel of whatever nature;
 

 (vi)
any safety incidents taking place on board the Vessel;
 

 (vii)
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 or a Total Loss;
 

 (viii)
any requirement or recommendation made in relation to the Vessel by any insurer or Classification Society or by any competent authority which is not immediately complied with;
 

 (ix)
any intended dry docking of the Vessel;
 

 (x)
any Environmental Claim which is made against the Charterers, any Sub-charterer or any Approved Manager in connection with the Vessel or any Environmental Incident involving claim(s) exceeding US$1,000,000;
 

 (xi)
any claim for breach of the ISM Code or the ISPS Code being made against the Charterers, any Approved Manager or otherwise in connection with the Vessel;
 

 (xii)
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;
 

 (xiii)
any requisition of the Vessel for hire;
 

 (xiv)
any arrest or detention of the Vessel, any exercise of any lien on that Vessel or its Earnings; and
 

 (xv)
any notice, or the Charterers becoming aware, of any claim, action, suit, proceeding or investigation against any Obligor, any of its subsidiaries or any of their respective directors, officers, employees or agents with respect to Sanctions;
 

 (xvi)
any circumstances which could give rise to a breach of any representation or undertaking in this Charter, or any Termination Event, relating to Sanctions;
 

 (xvii)
any Termination Event,
 
and will keep the Owners fully up-to-date with all developments and the Charterers will, if so requested by the Owners, provide any such certificate signed by its director(s), confirming in which that there exists no Potential Termination Event or Termination Event;
 
(i)
they will, and will procure that each other Obligor will, as soon as practicable after receiving the request, provide the Owners with any additional financial or other information relating:
 

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(i)
to themselves and/or the Vessel (including, but not limited to the condition and location of the Vessel);
 

 (ii)
details of the Vessel's employment status including the Vessel's employment status, operating accounts, projected employment (if the Vessel is not employed at such time) every twelve (12) months throughout the Charter Period or as soon as practicable after receiving the Owner's request; or
 

 (iii)
to any other matter relevant to, or to any provision of any Leasing Document or any Assignable Sub-charter to which it is a party,
 
which may be requested by the Owners (or the Owners' Financier (if any)) at any time;
 
(j)
they will comply, or procure compliance, and will procure that each other Obligor will comply or procure compliance, with all laws or regulations relating to its business, the Vessel and its ownership, employment, operation, management and registration, including, without limitation, the ISM Code, the ISPS Code, all Environmental Laws and the laws of the Vessel's registry provided that any non-compliance shall not materially adversely affect the obligations of a Obligor under each Leasing Document or any Assignable Sub-charter to which it is a party;
 
(k)
the Vessel shall be registered under the Flag State at all times;
 
(l)
the Vessel shall be maintained with the highest class required for the purpose of the trade of the Vessel with the Classification Society at all times and shall be free of all overdue recommendations and requirements;
 
(m)
upon request, they will provide or they will procure to be provided to the Owners the report(s) of the survey(s) conducted pursuant to Clause 7 (Surveys on Redelivery) of this Charter in form and substance satisfactory to the Owners;
 
(n)
they shall not permit the sub-chartering of the Vessel (1) on a bareboat basis (irrespective of duration) or (2) on a time charter basis exceeding thirteen (13) months (including any optional extensions thereto), other than under an Assignable Sub-charter and provided that the Charterers shall:
 

 (i)
assign all their rights and interests under such Assignable Sub-charter and shall use reasonable commercial efforts to procure that the Sub-charterer of such Assignable Sub-charter gives a written acknowledgment of such assignment in form and substance acceptable to the Owners and provide such documents as the Owners may require regarding the due execution of such Assignable Sub-charter; and
 

 (ii)
in case Assignable Sub-charter being a bareboat charter (irrespective of duration), procure the Sub-charterer of such Assignable Sub-charter to execute a general assignment to assign their rights under the Insurances, Earnings and Requisition Compensation in respect of the Vessel, in favour of the Owners, in each case, in a manner and in a form acceptable to the Owners;
 
(o)
intentionally deleted;
 
(p)
except with the Owners' prior written consent, they shall not deactivate or lay up the Vessel;
 

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(q)
they shall not make or pay any dividend or other distribution (in cash or in kind) in respect of its share capital following the occurrence of a Termination Event which is continuing or which would result in a Termination Event;
 
(r)
they shall comply and shall procure that each of the other Obligors (including, in each case, procuring or as the case may be, using all reasonable endeavours to procure the respective officers, directors, employees, consultants, agents and/or intermediaries of the relevant entity to do the same) or (on a best effort basis) any Sub-charterer complies with all laws and regulations in respect of Sanctions.
 
(s)
without limiting Clause 46.1(r), they will procure that:
 

 (i)
the Vessel shall not be operated, employed, managed, used by or for the benefit of a Restricted Person;
 

 (ii)
the Vessel shall not be employed in trading with any Restricted Person or in any manner contrary to Sanctions or published boycotts imposed by any of the United Nations, the European Union, the United States of America, the United Kingdom;
 

 (iii)
notwithstanding any other provision of this Charter, the Vessel shall not be permitted to call at any port in any Restricted 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 in any Obligor, any Sub-charterer or the Owners becoming a Restricted Person; and
 

 (v)
that each charterparty in respect of the Vessel shall contain, for the benefit of the Owners, language which permits refusal of employment or voyage orders if compliance would result in a breach of Sanctions and which prohibits trading to any Restricted Country;
 
(t)
they shall, and shall procure that each other Obligor shall (including procuring or as the case may be, using all reasonable endeavours to procure the respective officers, directors, employees, consultants, agents and/or intermediaries of the relevant entity to do the same) or (on a best efforts basis) any Sub-charterer shall:
 

 (i)
comply with all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws;
 

 (ii)
maintain systems, controls, policies and procedures designed to promote and achieve ongoing compliance with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws; and
 

 (iii)
in respect of the Charterers, not use, or permit or authorize any person to directly or indirectly use, the Purchase Price for any purpose that would breach any Anti-Money Laundering Laws, Anti-Terrorism Financing Laws or Business Ethics Laws;
 

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(u)
in respect of the Charterers, not lend, invest, contribute or otherwise make available the Purchase Price to or for any other person in a manner which would result in a violation of Anti-Money Laundering Laws, Anti-Terrorism Financing Laws or Business Ethics Laws;
 
(v)
they shall, and shall procure that each other Obligor shall promptly notify the Owners of any non-compliance, by any Obligor or their respective officers, directors, employees, consultants, agents or intermediaries or (on a best efforts basis) any Sub-charterer with all laws and regulations relating to Sanctions, Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws (including, but not limited, to notifying the Owners in writing immediately upon being aware that any Obligor or its shareholders, directors, officers or employees, or any Sub-charterer is a Restricted Person or has otherwise become a target of Sanctions) as well as provide all information (once available) in relation to its business and operations which may be relevant for the purposes of ascertaining whether any of the aforesaid parties are in compliance with such laws;
 
(w)
in respect of the management of the Vessel:
 

 (i)
they shall ensure that the Vessel be commercially and/or technically managed under an Approved Management Agreement;
 

 (ii)
they shall not appoint or permit to be appointed any commercial and/or technical manager of the Vessel unless it is an Approved Manager and such new manager enters into a Manager's Undertaking;
 

 (iii)
save with the prior written consent of the Owners (such consent not to be unreasonably withheld or delayed), they shall not agree or enter into any transaction, arrangement, document or do or omit to do anything which will have the effect of materially varying, amending or supplementing the terms of an Approved Management Agreement; and
 

 (iv)
they shall ensure that, upon the occurrence of a Termination Event, the Owners shall have the right to change any of the managers of the Vessel following a fifteen (15) days' notice to the Charterers;
 
(x)
save with the prior written consent of the Owners, they shall not agree or enter into any transaction, arrangement, document or do or omit to do anything which will have the effect of varying, amending or supplement either the material terms of any Assignable Sub-charter (and for the purpose of this paragraph, a material term means, without limitation, any term which would adversely affect the interest of the Owners and/or the Owners' Financier (if any));
 
(y)
they shall ensure that all Earnings and any other amounts received by them in connection with the Vessel are paid into the Earnings Account;
 
(z)
they will not:
 

 (i)
enter into any borrowing except for loans or advances from other members of the Group or affiliates which are unsecured and fully subordinated to the rights of the Owners under the Leasing Documents (in a manner acceptable to the Owners);
 

 (ii)
incur any liabilities or obligations to any party except for those incurred in the ordinary course of operating, chartering, repairing and maintaining the Vessel;
 

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(iii)
be the creditor or guarantor in respect of any loan or any form of credit to any person;
 

 (iv)
give or allow any 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 any investments, any sale or leaseback agreements, any off-balance sheet transaction, other agreement or incur any other liability or obligation (including, without limitation, any Financial Indebtedness of any obligations under a guarantee) other than the Leasing Documents or any other agreement expressly allowed under the terms of the Leasing Documents;
 

 (vi)
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, the Vessel, its Earnings or its Insurances); and
 
without prejudice to the above sub-paragraphs (z) to(vi), 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 in a bargain made at arms' length;
 
(aa)
any transaction entered into with their Affiliates shall be on arm's length basis and in good faith;
 
(bb)
they will ensure and procure that:
 

 (i)
the Market Value of the Vessel shall be ascertained from time to time in the following circumstances:
 

 (1)
upon the occurrence of a Termination Event which is continuing, at any time at the request of the Owners; and
 

 (2)
in the absence of a Termination Event which is continuing:
 

 (i)
from the first anniversary of the Commencement Date, at least once every calendar year during the Charter Period, with such report to be dated no more than thirty (30) calendar days prior to every anniversary of the Commencement Date occurring within the Charter Period or on such other date as the Owners may request; and
 

 (ii)
the amount of the fees and expenses incurred by the Owners in connection with any matter arising out of this paragraph (bb) shall be reimbursed to the Owners;
 
(cc)
intentionally deleted; and
 
(dd)
they shall not make, nor permit to be made, any modification or repairs to, or replacement, renewal or installation of, the Vessel or equipment installed on it or alter the structure, type or performance characteristics of the Vessel unless such modifications, repairs, replacement, renewal, installation or alteration:
 

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(i)
is required by the Classification Society for the purposes of maintaining the Vessel's classification or is required by any applicable laws and regulations relating to the Vessel;
 

 (ii)
relates to the installation of exhaust gas cleaning systems (scrubbers);
 

 (iii)
would not:
 

 (1)
have an adverse effect on the Vessel's fitness for purpose;
 

 (2)
alter the structure, type or performance characteristics of the Vessel; and/or
 

 (3)
diminish the value of the Vessel or have an adverse effect on the safety or performance of the Vessel,
 
and if such modification, repair, replacement, renewal installation or alternation is approved or satisfies the requirements of this clause, once effected, shall form part of the Vessel and the title of any equipment or parts replaced due to such modification, repair, replacement, renewal, installation or alternation shall vest in and remain with the Owners;
 
(ee)
the Vessel will not be permitted to trade in any zone which is declared a war zone by any government or the Vessel's war risks insurers, unless the Charterers have (i) obtained the written consent of the Owners (such consent not to be unreasonably withheld or delayed) prior to engaging in any such trading and (ii) (at the Charterers' expense) effected all necessary special, additional or modified insurance cover for trading in such war zone and have complied with the terms of Clause 38 (Insurances) any requirement as may be prescribed by the insurers;
 
(ff)
the Charterers shall comply, and will procure that each other Obligor, each other member of the Group and (on best effort basis) any Sub-charterer will comply, with all Sanctions and all laws and regulations relating to such person, the Vessel and its construction, ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code (including, but not limited to, the maintenance of an ISSC), all Environmental Laws, all Anti-Money Laundering Laws, Business Ethics 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 Obligor:
 

 (i)
conduct their activities in a manner consistent with Sanctions;
 

 (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 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;
 

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(vi)
have controls to assess authenticity of bills of lading, as necessary; and
 

 (vii)
have controls in place consistent with the Sanctions Advisory; and
 
(gg)
the Charterers:
 

 (i)
shall or shall procure that any other organisation or person whom the Charterers have contractually agreed to take over all duties and responsibilities imposed by the ISM Code (including the relevant Approved Manager as an ISM Company or any Sub-charterer) will:
 

 (1)
surrender any Emission Allowances in respect of the Vessel under any applicable Emission Scheme; and
 

 (2)
promptly upon the Owners' reasonable request, provide and submit such signed mandate letter in the form required by the Owners and the relevant administering authority and provide any other information and documents as required by the Owners and/or the relevant administering authority in relation to any applicable Emission Scheme, and, in such case, the Owners shall promptly, to the extent reasonably practicable, provide any necessary information and sign any requested mandate or other instrument as may be requested by the relevant administering authority; and
 

 (ii)
shall fulfil all obligations which may be imposed on the Owners as registered owner of the Vessel by the MARPOL Carbon Intensity Regulations;
 
(hh)
without prejudice to paragraph (gg) above, in relation to EU ETS:
 

 (i)
the Charterers acknowledge that if the Vessel stops at ports in the European Union, they will incur liabilities under EU ETS and Fuel EU Maritime;
 

 (ii)
the Charterers acknowledge and agree that if they intend to sail the Vessel into ports in the European Union, the Charterers shall register the Vessel as part of a shipping company as required under the EU ETS and shall comply in all respects with the EU ETS and Fuel EU Maritime;
 

 (iii)
if required by the competent administering authority or as reasonably required by the Owners (due to the requirements of the competent administering authority), the Charterers shall provide a letter in a format to be agreed between the Owners, the Charterers and the relevant Approved Manager (and which is in a format acceptable to the competent Emission Scheme Authority) confirming that they or the competent ISM Company have assumed responsibility for the operation of the Vessel from the Owners (the "EU ETS Maritime Letter"); and
 

 (iv)
the Charterers shall, or procure that the relevant Approved Manager as ISM Company shall, submit the EU ETS Maritime Letter to the relevant Emission Scheme Authority upon registration of the Vessel pursuant to the EU ETS and shall provide the Owners with evidence of such registration (if available by the said authority) promptly and, in such case, the Owners shall promptly, to the extent reasonably practicable, provide any necessary information and sign the aforesaid EU ETS Maritime Letter in order to allow the Charterers to proceed promptly with the submission to the relevant administering authority; and
 

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(ii)
the Charterers shall (and shall procure that each of the Approved Manager and where/if applicable, on a best efforts basis the Sub-charterer shall):
 

 (i)
co-operate and exchange all relevant data and information with each other in a timely manner to:
 

 (1)
facilitate compliance by the Charterers and any other Emission Scheme Participant with any applicable Emission Scheme; and
 

 (2)
enable the Charterers and any other Emission Scheme Participant to calculate the amount of Emission Allowances in respect of the Vessel which are required to be surrendered to the relevant Emission Scheme Authority for that Emission Scheme during the Charter Period; and
 

 (ii)
promptly supply to the relevant Emission Scheme Authority relating to any applicable Emission Scheme with all relevant documents (including without limitation, any relevant mandating documents required in connection with surrendering the relevant Emission Allowances to the relevant Emission Scheme Authority relating to the relevant Emission Scheme) required to be provided to such Emission Scheme Authority relating to such Emission Scheme,
 
and to do all such things necessary or advisable to ensure that the Owners, the Charterers, each Emission Scheme Participant and the Vessel will be in compliance with all Environmental Laws and the Owners shall in all such cases promptly, to the extent reasonably practicable, provide any necessary information and sign such documents, as may be reasonably requested by the Charterers in relation to the above.

CLAUSE 46(A) – INSPECTION OF VESSEL
 
46(A).1
The Owners shall be entitled to inspect or survey the Vessel, its logs and records or instruct a duly authorised 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);
 
(c)
for any purpose that the Owners deem appropriate in their absolute discretion (acting reasonably),
 
(d)
and the Charterers shall (at the Charterers' cost and expense) arrange for all transport, accommodation and on-site support required for such inspections or surveys.
 
46(A).2
The Owners shall be entitled to exercise its rights of inspection or survey as described under Clause 46(A):
 
(a)
if no Termination Event or Potential Termination Event has occurred and is continuing, once a year without interference or delay to the operation and trading of the Vessel with thirty (30) days prior notice to the Charterers and the Charterers shall bear the costs and expenses incurred in connection with such inspections and/or surveys (including, but not limited to, the fees, costs and expenses of any surveyor appointed by the Owners); or
 

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(b)
if a Termination Event or Potential Termination Event has occurred and is continuing, at any time with prior written notice and for as many times as the Owners deem necessary, and the Charterers shall bear the costs incurred in connection with such inspections and/or surveys (including, but not limited to, the fees, costs and expenses of any surveyor appointed by the Owners).
 
CLAUSE 47 – PURCHASE OPTION
 
47.1
Provided no Termination Event has occurred and is continuing, the Charterers shall have the option to purchase the Vessel on any date falling twelve (12) months after the Commencement Date (the "Purchase Option Date"), subject always to giving the Owners no less than sixty (60) days' (or such lesser period as agreed by the Owners) prior written notice (the "Purchase Option Notice").
 
47.2
A Purchase Option Notice shall be signed by a duly authorised officer or attorney of the Charterers and, once delivered to the Owners, is irrevocable and the Charterers shall be bound to pay to the Owners the Purchase Option Price on the Purchase Option Date.
 
47.3
Only one Purchase Option Notice may be served throughout the duration of the Charter Period.
 
47.4
Upon the Owners' receipt in full of the Purchase Option Price, the Owners shall transfer the legal and beneficial ownership of the Vessel on an "as is where is" basis (and otherwise in accordance with the terms and conditions set out at Clauses 49.1(a) and 49.1(b)) to the Charterers or their nominees and shall 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 to the Charterers (and to the extent required for such purposes the Vessel shall be deemed first to have been redelivered to the Owners).
 
CLAUSE 48 – PURCHASE OBLIGATION
 
Provided all moneys owing and payable under this Charter have been fully and irrevocably paid to the Owners, the Charterers shall be obliged to purchase from the Owners all of the Owners' beneficial and legal right, title and interest in the Vessel and all belonging to her and the Owners and the Charterers shall perform their obligations referred to in Clause 49 (Sale of the Vessel) and the Charterer shall pay the Purchase Obligation Price on the Maturity Date in relation thereto (unless the Owners agree otherwise in writing and upon such terms and conditions as the Owners may deem fit in their absolute discretion).
 
CLAUSE 49 – SALE OF THE VESSEL
 
49.1
All legal and beneficial interest and title in the Vessel shall be transferred to the Charterers by the Owners upon receipt by the Owners of the Purchase Option Price or the Purchase Obligation Price or the Termination Sum or the Special Termination Sum (as the case may be) on an "as is where is" basis and on the following terms and conditions:
 

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(a)
the Charterers expressly agree and acknowledge that 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 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, the Charterers hereby also waive any rights which they may have in tort in respect of any of the matters referred to under this clause and irrevocably agree that (i) 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; (ii) 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 and (iii) 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 acceptable to the Owners) or the Owners may have against the manufacturer or supplier of the Vessel or any third party;
 
(b)
the Vessel shall be free from all mortgages or any other liens, encumbrances, claims or debts whatsoever, created or permitted to exist by the Owners (save for those mortgages, liens, encumbrances or debts created under the Leasing Documents or incurred by the Charterers or arising out of or in connection with this Charter);
 
(c)
the Purchase Option Price or the Purchase Obligation Price (as the case may be) shall be paid by (or on behalf of) the Charterers to the Owners on respectively the Purchase Option Date or the Maturity Date, together with unpaid amounts of Charterhire and other moneys owing by or accrued or due from the Charterers under this Charter on or prior to the Purchase Option Date or Maturity Date (as the case may be) which remain unpaid; and
 
(d)
upon the Purchase Option Price or the Purchase Obligation Price (as the case may be) and all other moneys payable under this Charter being fully and irrevocably paid to the Owners on, and in accordance with, the terms set forth in this Charter (except in the case of Total Loss) the Owners agree (at the cost of the Charterers) to enter into (i) a bill of sale and (ii) a protocol of delivery and acceptance, and the Vessel shall accordingly be deemed delivered to the Charterers on the date and time set out in such protocol of delivery and acceptance (and to the extent required for such purposes the Vessel shall be deemed first to have been redelivered to the Owners).
 
(e)
The Owners shall not be obliged to do anything pursuant to this Clause 49 (Sale of the Vessel) or other terms of this Charter which would (in the Owners' opinion (acting reasonably)) constitute a breach of any quiet enjoyment agreement to which they are a party.
 
CLAUSE 50 – INDEMNITIES
 
50.1
The Charterers shall upon the Owners' demand, fully indemnify the Owners against, and keep the Owners harmless from, all documented claims, expenses, liabilities, losses, taxes, fees (including, but not limited to, any tax applied to any such amounts, any interest or penalties applied to such amounts and any vessel registration and tonnage fees) suffered or incurred by or imposed on the Owners arising from this Charter and any Leasing Document or Assignable Sub-charter, whether prior to, during or after termination of this Charter and whether or not the Vessel is in the possession or the control of the Charterers, including, without limitation:
 
(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;
 

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(b)
in connection with delivery, possession, performance, control, registration, repair, survey, insurance, maintenance, manufacture, purchase, financing, re-financing, ownership and operation of the Vessel by the Owners;
 
(c)
in connection with the prevention or release of liens or detention of or requisition, use, operation or redelivery, sale or disposal of the Vessel or any part of it;
 
(d)
in connection with putting the Vessel in a re-deliverable condition in accordance with this Charter;
 
(e)
as a consequence of any non-compliance or breach by any Obligor of any applicable tax laws or regulations or any losses caused to the Owners by any failure of the Charterers to comply with their obligations under Clause 51 (No Set-off or Tax Deduction) of this Charter (including where any such failure is occasioned by the applicable law preventing the Charterers from paying without deduction and/or from grossing up);
 
(f)
all premia and other documented expenses which are reasonably incurred by (i) the Owners in connection with or with a view to effecting, maintaining or renewing lessors' or innocent owners' interest insurance and lessors' or innocent owners' additional perils (pollution) insurance or any similar protective shipowner insurance that is taken out in respect of the Vessel on such terms and conditions as the Owners may from time to time impose, and/or (ii) the Owners or the Owners' Financier (if any) in connection with or with a view to effecting, maintaining or renewing a mortgagee's interest insurance and a mortgagee's additional perils (pollution) insurance that is taken out in respect of the Vessel on such terms and conditions as the Owners or the Owners' Financier (if any) may from time to time impose. In each case, the amount of the insurances referred to in this clause shall be equal to at least one hundred and twenty per cent. (120%) of the higher of (i) the prevailing Market Value of the Vessel at the relevant time, or (ii) the Outstanding Finance Amount at the relevant time;
 
(g)
all premia and documented expenses reasonably incurred by the Owners and/or the Owners' Financier (if any) in respect of any other insurances which the Owners and/or the Owners' Financier (if any) deem necessary and take out in respect of the Vessel, including, but without limitation to, any freight, demurrage and defence cover on such terms and conditions as the Owners may from time to time effect pursuant to Clause 38 (Insurance);
 
(h)
all other premia and documented expenses reasonably incurred by the Owners and/or the Owners' Financier (if any) in respect of the Insurances of the Vessel pursuant to Clause 38 (Insurance);
 
(i)
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, reasonable wear and tear to the Vessel only excepted;
 
(j)
all losses, documented costs or charges reasonably incurred by the Owners by reason thereof in re-taking possession or otherwise in re-acquiring the Vessel pursuant to Clause 37 (Possession of Vessel);
 
(k)
all documented losses, costs, charges and expenses incurred by the Owners in collecting any Charterhire, Advance Charterhire or other payments not paid on the due date under this Charter and in remedying any other failure of the Charterers to observe the terms and conditions of this Charter;
 

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(l)
any claims made by any person arising after the date of the letter of indemnity as referred to in the above Clause 49.1(d) in connection with the Vessel;
 
(m)
all losses, documented costs and expenses reasonably incurred by the Owners as a result of steps taken by the Owners under Clause 44(A).2;
 
(n)
all losses, documented costs and expenses reasonably incurred by the Owners in connection with any proposed modifications, repairs, replacement, installation or alteration of the Vessel pursuant to Clause 46.1(dd);
 
(o)
any such losses, liabilities, documented costs or expenses the Owners determine (acting reasonably) will be or has been suffered for or on account of any tax by them in respect of any Leasing Document, together with any interest, penalties, costs and expenses payable or incurred;
 
(p)
in connection with or following the occurrence of a Termination Event or any breach of any terms of any Leasing Document; and
 
(q)
all documented 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 or any Security Interest created thereunder and with any proceedings instituted by or against the Owners as a consequence of entering into any Leasing Document, taking or holding any Security Interests created thereunder or enforcing those rights, including, without limitation, any losses, costs and expenses which the Owners may from time to time sustain, incur or become liable by reason of the Owners being the registered owner of the Vessel and/or being deemed by any court or authority to be an operator or controller, or in any way concerned in the operation or control, of a Vessel.
 
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 or in connection with any Environmental Claim.
 
50.2
Without prejudice to the above Clause 50.1, if any sum (a "Sum") due from an Obligor under the Leasing Documents, 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:
 
(a)
making or filing a claim or proof against that Obligor; or
 
(b)
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
 
the Charterers shall, as an independent obligation, on demand, indemnify the Owners 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.
 

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50.3
The obligations of the Charterers under Clause 50 (Indemnities) and in respect of any Security Interest created pursuant to the Security Documents will not be affected or discharged by an act, omission, matter or thing which would reduce, release or prejudice any of its obligations under Clause 50 (Indemnities) or in respect of any Security Interest created pursuant to the Security Documents (without limitation and whether or not known to it or any Obligor) including:
 
(a)
any time, waiver or consent granted to, or composition with, any Obligor or other person;
 
(b)
the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of the Obligor or any of its Affiliates;
 
(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 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 an Obligor or any other person;
 
(e)
any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Leasing Document or any other document or security;
 
(f)
any unenforceability, illegality or invalidity of any obligation of any person under any Security Document or any other document or security; or
 
(g)
any insolvency or similar proceedings.
 
50.4
In consideration of the Charterers requesting the Other Owner to charter the Other Vessel to the Other Charterer under the Other Charter, the Charterers hereby irrevocably and unconditionally undertake to pay immediately on demand, and on full indemnity basis, from the Other Owner such amounts in respect of all claims, expenses, liabilities, losses, fees of every kind and nature and all other moneys due, owing and/or payable to the Other Owner under or in connection with the Other Charter, and to indemnify and hold the Other Owner harmless against all such moneys, costs, fees and expenses.
 
50.5
Notwithstanding anything to the contrary herein (but subject and without prejudice to Clause 33 (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.
 
50.6
All rights which the Charterers have at any time (whether in respect of this Charter or any other transaction) against the other Obligors or any of them shall be fully subordinated to the rights of the Owners under the Leasing Documents and the Leasing Documents (as defined in the Other Charter) (collectively, for the purposes of this Clause 50.6, "Project 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 the Project Leasing Documents or by reason of any amount becoming payable, or liability arising, under this clause:
 

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(a)
to be indemnified by the Other Charterer or the Guarantor or any of them;
 
(b)
to claim any contribution from any third-party providing security for, or any other guarantor of, the Other Charterer's or the Guarantor's obligations under the Project Leasing Documents;
 
(c)
to take any benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Other Charterer or the Guarantor or any of them under the Project Leasing Documents or of any other guarantee or security taken pursuant to, or in connection with, the Project Leasing Documents by any of the aforesaid parties;
 
(d)
to bring legal or other proceedings for an order requiring any of the Other Charterer or the Guarantor or any of them to make any payment, or perform any obligation, in respect of any Project Leasing Document;
 
(e)
to exercise any right of set-off against any of the Other Charterer or the Guarantor or any of them; and/or
 
(f)
to claim or prove as a creditor of the Other Charterer or the Guarantor or any of them,
 
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 or the Other Owner by the Other Charterer or the Guarantor or any of them under or in connection with the relevant Project Leasing Documents to be repaid in full on trust for the Owners or the Other Owner and shall promptly pay or transfer the same to the Owners or the Other Owner as may be directed by the Owners.
 
50.7
The Charterers hereby irrevocably agree to indemnify and hold harmless the Owners against any claim, expense, liability or loss incurred by the Owners (and which is notified to the Charterers) in liquidating or employing deposits from the Owners' Financier or third parties to fund the acquisition of the Vessel pursuant to the MOA, on or prior to the Commencement Date.
 
50.8
Notwithstanding anything to the contrary herein (but subject and without prejudice to Clause 33 (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.
 
CLAUSE 51 – NO SET-OFF OR TAX DEDUCTION
 
51.1
All payments of the Charterhire, the Advance Charterhire, the Purchase Obligation Price, the Purchase Option Price, the Upfront Fee or and any other payment made from the Charterers to enable the Owners to pay all amounts under a Leasing Document shall be paid punctually:
 
(a)
without any form of set-off (other than as agreed under the MOA and this Charter), cross-claim or condition and in the case of the Charterhire, the Advance Charterhire or the Upfront Fee, without previous demand unless otherwise agreed with the Owners;
 

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(b)
free and clear of all present and future taxes, levies, duties or deduction of any nature whatsoever, whether levied now or in the future; and
 
(c)
free and clear of any tax deduction or withholding unless required by law.
 
51.2
Without prejudice to Clause 51.1, 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.
 
51.3
In this Clause "tax deduction" means any deduction or withholding for or on account of any present or future tax, other than a FATCA Deduction.
 
CLAUSE 52 – INCREASED COSTS
 
52.1
This Clause 52 (Increased Costs) 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) or the Owners' Financier has incurred or will incur an "increased cost".
 
52.2
In this Clause 52, "increased cost" means, in relation to the Owners or the Owners' Financier:
 
(a)
An additional or increased cost incurred as a result of, or in connection with, as the case may be, (i) the Owners having entered into, or being a party to, this Charter, of funding the acquisition of the Vessel pursuant to the MOA or performing their obligations under this Charter or (ii) the Owner's Financier entering into the funding arrangements described under Clause 58.2(a);
 
(b)
a reduction in the amount of any payment to the Owners under this Charter or in the effective return which such a payment represents to the Owners on their capital;
 
(c)
an additional or increased cost of funding the acquisition of the Vessel pursuant to the MOA; or
 
(d)
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Owners under this Charter,
 

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and for the purposes of this Clause 52.2 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.
 
52.3
Subject to the terms of Clause 52.1, the Charterers shall pay to the Owners, on the Owners' demand, the amounts which the Owners from time to time notify the Charterers to be necessary to compensate the Owners for the increased cost.
 
CLAUSE 53 – FATCA
 
53.1
Defined terms
 
For the purposes of this Clause 53 (FATCA), 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.
 
"Relevant Party" means any of the parties to this Charter and the Leasing Documents.
 
"IRS" means the United States Internal Revenue Service or any successor taxing authority or agency of the United States government.
 
53.2
FATCA Information
 
(a)
Subject to paragraph (c) below, each Relevant Party shall within ten (10) Business Days of a reasonable request by another Relevant Party:
 

 (i)
confirm to that other party whether it is a FATCA Exempt Party or is not a FATCA Exempt Party; and
 

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(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 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, that party shall so notify all other Relevant Parties 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, the other Leasing Documents as if it is a FATCA Non-Exempt Party; and
 

 (ii)
if that party failed to confirm its applicable passthrough percentage then such party shall be treated for the purposes of this Charter, the other Leasing Documents (and payments made thereunder) as if its applicable passthrough 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.
 
53.3
FATCA Deduction and gross-up by Relevant Party
 
(a)
If the representation made by the Charterers under Clause 45.1(n) (Representations and Warranties) 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 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.
 
53.4
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.
 
53.5
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 53.3 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 54 – GENERAL APPLICATION OF PROCEEDS
 
54.1
Any Net Trading Proceeds, Net Sales Proceeds, Total Loss Proceeds, any proceeds realized or received by the Owners in connection with the enforcement of the Security Documents (unless otherwise specified in the Security Documents), any amounts received by the Owners from the Other Charterer pursuant to Clause 50.4 of the Other Charter 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 or the Special Termination Sum (as the case may be) (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 or the Special Termination Sum (as the case may be));
 
(b)
secondly, in or towards satisfaction of the Charterers' obligation to pay the Termination Sum or the Special Termination Sum (as the case may be) (or such portion of it that then remains unpaid) in any order of application in the amounts comprising the Termination Sum or the Special Termination Sum (as the case may be) 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 and subject to no actual or contingent liabilities existing at the relevant time.
 

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CLAUSE 55 – CONFIDENTIALITY
 
55.1
The Parties agree to keep the terms and conditions of this Charter and any other Leasing Documents (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, by a governmental order, decree, regulation or rule, by an order of a court, tribunal or listing exchange of the Relevant Jurisdiction, provided that the disclosing Party shall give written notice of such required disclosure to the other Party prior to the disclosure;
 
(c)
it is required to be disclosed by any stock exchange and/or securities and exchange commission rules (including, but not limited to, the US Securities and Exchange Commission Rule or the Nasdaq Rules);
 
(d)
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;
 
(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), provided that such person receiving Confidential Information shall undertake that it would not 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;
 
(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 either paragraph (e) or (f) (including the employees, officers and directors thereof);
 

 (ii)
professional advisers retained by a disclosing party; or
 

 (iii)
persons advising on, providing or considering the provision of financing to the disclosing party or an Affiliate,
 
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; or
 
(g)
with the prior written consent of all Parties.
 
CLAUSE 56 – PARTIAL INVALIDITY
 
If, at any time, any provision of a 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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CLAUSE 57 – SETTLEMENT OR DISCHARGE CONDITIONAL
 
57.1
Any settlement or discharge under any Leasing Document between the Owners and any Obligor or any other person shall be conditional upon no security or payment to the Owners by any Obligor or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.
 
57.2
If the Owners consider (acting reasonably) that an amount paid or discharged by, or on behalf of, an Obligor in purported payment or discharge of an obligation of that Obligor to the Owners under the Leasing Documents is capable of being avoided or otherwise set aside on the liquidation or administration of that Obligor or otherwise, then that amount shall not be considered to have been unconditionally and irrevocably paid or discharged for the purposes of the Leasing Documents.
 
CLAUSE 58 – CHANGES TO THE PARTIES
 
58.1
Assignment or transfer by the Charterers
 
The Charterers shall not assign their rights or transfer by novation any of their rights and obligations under the Leasing Documents except with the prior consent in writing of the Owners.
 
58.2
Assignment or transfer by the Owners
 
Subject to Clause 35 (Quiet Enjoyment) above, the Charterers acknowledge that, at any time during the Charter Period:
 
(a)
the Owners are entitled to enter into certain funding arrangements with their financier(s), (the "Owners' Financier"), in order to finance in part or in full of the Purchase Price, 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 the prior consent of the Charterers:
 

 (i)
execute a ship mortgage over the Vessel or any other Financial Instrument in favour of an Owners' Financier;
 

 (ii)
assign their rights and interests to, in or in connection with this Charter and any other Leasing Document in favour of that Owners' Financier;
 

 (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 that Owners' Financier;
 

 (iv)
any other Financial Instrument in favour of the Owners' Financier; and
 

 (v)
enter into any other document or arrangement which is necessary to give effect to such financing arrangements; and
 

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(c)
the Charterers undertake to comply and shall procure that the other Obligors shall 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' Financier in conformity with any Financial Instrument. The Charterers further agree and acknowledge all relevant terms, conditions and provisions of each Financial Instrument (if any) and agree that they and any other Obligor shall acknowledge any such assignments and other security in writing in any form that may be required by the Owners' Financier.
 
(d)
the Owners may assign or transfer by novation (or otherwise) any of its rights and obligations under the Leasing Documents and/or sell the Vessel at any time:
 

 (i)
to an Affiliate of the Owners or an Owners' Financier without any consent of the Charterers;
 

 (ii)
to another lessor or financial institution or trust, fund, leasing company 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 (for the avoidance of doubt, expressly excluding any hedge fund, private equity fund or any equity owned or controlled by a competitor of the Charterers),
 

 (A)
with the prior written consent of the Charterers (such consent not to be unreasonably withheld or delayed) if there is no Termination Event on the date when the consent is sought; or
 

 (B)
without any consent of the Charterers following the occurrence of a Termination Event which is continuing; and
 

 (iii)
in accordance with the Charterers' exercise of the Purchase Option under Clause 47 or of the Purchase Obligation under Clause 48.
 
(e)
Following any change in the registered ownership of the Vessel permitted pursuant to Clause 58.2, this Charter would continue on identical terms (save for logical, consequential or mutually agreed amendments), and the Charterers hereby agree that they shall be liable to the aforesaid new owner of the Vessel for its performance of all obligations pursuant to this Charter after change of the registered ownership of the Vessel from the Owners to such new owner and shall procure that:
 

 (i)
any other Obligor which is a party to a Leasing Document:
 

 (A)
remains liable to the new owner of the Vessel for its performance of all obligations pursuant to such Leasing Document; and
 

 (B)
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 as from the completion of the relevant sale; and
 

 (ii)
the Guarantor shall each execute a guarantee in favour of the new owners for the inter alia, obligations of the Charterers under this Charter, in substantially in the same form as the Guarantee (or such other form as the Guarantor and the new owners may agree).
 

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58.3
The Charterers agree and undertake to (and will procure the other Obligor to) enter into any such usual documents as the Owners shall require to complete or perfect the assignment or transfer of the Vessel (with the benefit and burden of this Charter and other Leasing Documents) and the Owner's rights and obligations under the Leasing Documents pursuant to Clause 58.2.
 
58.4
Unless otherwise expressly stated in this Charter, each of the Owners and the Charterers shall bear their own costs arising from any assignment, transfer or sale of the Vessel by the Owners as permitted under this Clause 58.2.
 
CLAUSE 59 – MISCELLANEOUS
 
59.1
The Charterers waive any rights of sovereign immunity which they or any of their assets may enjoy in any jurisdiction and subjects itself to civil and commercial law with respect to their obligations under this Charter.
 
59.2
No term of this Charter is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not party to this Charter, save that the Other Owner may rely on the rights conferred on them under Clause 50.2.
 
59.3
This Charter and each 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.
 
59.4
These additional clauses shall be read together with the Standard Bareboat Charter, and shall constitute a single instrument. In the case of any conflict between the provisions of these additional terms and the Standard Bareboat Charter, these additional terms shall prevail.
 
59.5
This Charter contains all the understandings and agreements of whatsoever kind and nature existing between the parties in respect of this Charter, the rights, interests, undertakings agreements and obligations of the parties to this Charter and shall supersede all previous and contemporaneous negotiations and agreements.
 
59.6
The termination of this Charter for any cause whatsoever shall not affect the right of the Owners to recover from the Charterers any money due to the Owners on or before the termination in consequence thereof and all other rights of the Owners (including, but not limited to, any rights, benefits or indemnities which are expressly provided to continue after the termination of this Charter) are reserved hereunder.
 
59.7
Nothing in this Charter creates, constitutes or evidences any partnership, joint venture, agency, trust or employer/employee relationship between the parties, and neither party may make, or allow to be made any representation that any such relationship exists between the parties. Neither party shall have the authority to act for, or incur any obligation on behalf of, the other party, except as expressly provided in this Charter.
 
59.8
The rights, powers and remedies provided in this Charter are cumulative and not exclusive of any rights, powers or remedies at law or in equity unless specifically otherwise stated.
 
59.9
The Owners may set off any matured and/or contingent obligation due from any Obligor under the Leasing Documents (to the extent beneficially owned by the Owners) against any obligation (whether matured or not) owed by the Owners to that or any other Obligor, regardless of the place of payment or currency of either obligation. If the obligations are in different currencies, the Owners may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. Other than as explicitly set out in the Leasing Documents, no member of the Group may set off any matured and/or contingent obligation due from the Owners under the Leasing Documents (to the extent beneficially owned by any Obligor) against any obligation (whether matured or not) owed by any member of the Group to the Owners, regardless of the place of payment or currency of either obligation.
 

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CLAUSE 60 - RECORDATION OF FINANCING CHARTER
 
60.1
Without prejudice and in addition to the Owners' rights under this Charter:
 
(a)
for all purposes under Section 100A of the Liberian Maritime Law (the "Maritime Law"), the Owners and the Charterers acknowledge and agree that (i) this Charter shall be construed as a "financing charter", as such term is defined in Section 29(4) of the Maritime Law, and (ii) this Charter is intended to be deemed under the Maritime Law as a preferred mortgage over the Vessel granted by the Charterers, as owner, in favour of the Owners, as mortgagee;
 
(b)
in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Charterers hereby grant, convey, mortgage, pledge, confirm, assign, transfer and set over the whole of the Vessel to the Owners, as mortgagee, as security for the performance and observance of and compliance with all their obligations as Charterers under, and the covenants, terms and conditions contained in, this Charter and the other Leasing Documents to which the Charterers are or may become a party; and
 
(c)
At their sole cost and expense, the Charterers shall cause this Charter to be recorded as a financing charter in accordance with the Maritime Act and will perform all such acts as may be reasonably requested by the Owners to accomplish the said recordation. For the purposes of recording this Charter under Section 100A of the Maritime Law as a financing charter:
 

 (i)
the name of the Vessel is m.v. "Friendship";
 

 (ii)
the official number of the Vessel is 21000;
 

 (iii)
the date of this Charter is ___________________ 2025;
 

 (iv)
the name and address of the Owners are:
 
INSIGHT 23 HOLDING LIMITED
 
6/F., Manulife Place, 348 Kwun Tong Road, Kowloon, Hong Kong;
 

 (v)
the name and address of the Charterers are:
 
FRIEND OCEAN NAVIGATION CO.
 
80 Broad Street, Monrovia, Liberia


 (vi)
the maximum aggregate of the nominal amount of all charterhire payments, termination payments, purchase obligation, and purchase or put option amounts which could under any circumstances be due and payable under this Standard Bareboat Charter and the other Leasing Documents, exclusive of any interest, indemnities, expenses or fees, is US$34,500,000 which is the total amount secured hereby.
 

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(d)
The Charterers will place and at all times retain, a properly certified copy of this Charter on board the Vessel with the Vessel's papers and will cause such certified copy of this Charter and the Vessel's registration document to be exhibited to any and all persons having business therewith which might give rise to any lien thereon, other than liens for crew's wages, general average and salvage. In addition, the Charterers will place and keep prominently displayed in the chart room and in the master's cabin of the Vessel in a conspicuous place, a notice, framed under glass, printed in plain type of such size that the paragraph of reading material shall cover a reasonable space acceptable to the Owners reading as follows:
 
"THIS VESSEL IS OWNED BY INSIGHT 23 HOLDING LIMITED AND IS UNDER CHARTER TO FRIEND OCEAN NAVIGATION CO. PURSUANT TO THE TERMS OF THE STANDARD BAREBOAT CHARTER DATED AS OF ____________________ (THE "CHARTER"). UNDER THE TERMS OF THE CHARTER, WHICH IS A FINANCING CHARTER UNDER THE MARITIME LAWS OF THE REPUBLIC OF LIBERIA, NEITHER THE CHARTERERS, NOR ANY SUB-CHARTERER, NOR THE MASTER NOR ANY OTHER PERSON HAS THE RIGHT, POWER OR AUTHORITY TO CREATE, INCUR OR PERMIT TO BE PLACED OR IMPOSED UPON THIS VESSEL ANY LIEN WHATSOEVER OTHER THAN PERMITTED SECURITY INTERESTS AS DEFINED IN THE CHARTER."
 
(e)
The Charterers hereby consent and agree, at their sole cost and expense, to the recordation of the Charter under 100A of the Maritime Law and will perform all such acts as may be reasonably requested by the Owners to accomplish said recordation.
 
(f)
Without prejudice to Clauses 60.1(a) to 60.1(e) above, to the extent law other than English law or Liberian law is deemed to apply to this Charter and the Charterers are deemed owners of the Vessel, the Charterers and Owners hereby further agree as follows:
 

 (i)
For the purpose of securing the obligations of the Charterers under this Charter and the other Leasing Documents to which the Charterers are or may become a party, the Owners and Charterers intend and agree that (i) this Charter shall be deemed to be a security agreement within the meaning of Article 9 of the Uniform Commercial Code (the "UCC") of the State of New York or of any other state of the United States of America is found to be applicable to the Charter, and (ii) pursuant to sub-paragraph (ii) of this paragraph (f) below, this Charter also creates a "security interest" under Section 1-203 of the UCC in all of the Charterers' right, title and interest in, to and under the Vessel and the Leasing Documents to which the Charterers are or may become a party (collectively, the "Collateral").
 

 (ii)
To secure the obligations of the Charterers under this Charter and the other Leasing Documents to which the Charterers are or may become a party, the Charterers hereby grant to the Owners a lien on and security interest in and mortgage lien on all of the Collateral. The Charterers promptly shall take such action as may be necessary or advisable in the Owners' opinion to ensure that the lien, security interest and mortgage on the Collateral will be a perfected lien, security interest and mortgage of first priority under applicable law and will be maintained as such until payment and performance in full of all the obligations of the Charterers under the Leasing Documents to which the Charterers are or may become a party. Upon the occurrence and during the continuance of a Termination Event, the Owners shall have all rights and remedies under Clause 44 (Termination Events) of this Charter or otherwise provided to a secured creditor upon a default under the UCC or provided to a mortgagee of a ship under applicable law.
 

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(b)
The Charterers hereby consent and agree, at their sole cost and expense, to the filing of such UCC financing statements as the Owners may deem reasonably necessary to perfect the security interest intended to be created hereby and will perform all such acts as may be reasonably requested by the Owners to accomplish said perfection.
 
CLAUSE 61 - DEFINITIONS
 
61.1
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 to be signed by the Charterers at Delivery.
 
"Account Bank" means ALPHA BANK S.A. or such other bank approved by the Owners.
 
"Account Security" means the account security executed or to be executed by the Charterers in favour of the Owners over the Earnings Account in agreed form.
 
"Advance Charterhire" means the difference between the Purchase Price and the Finance Amount.
 
"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.
 
"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 European Union, the United Kingdom 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 any Obligor or any Sub-charterer or the Owners; (b) of any jurisdiction in which any Obligor or any Sub-charterer or the Owners conduct business; or (c) to which any Obligor or any Sub-charterer or the Owners is subjected or subject to.
 
"Anti-Terrorism Financing Laws" means all applicable anti-terrorism laws, rules, regulations or guidelines of any jurisdiction, including and not limited to the United States of America or the People's Republic of China which are: (a) issued, administered or enforced by any governmental agency, having jurisdiction over any Obligor or any Sub-charterer or the Owners; (b) of any jurisdiction in which any Obligor or the Owners conduct business; or (c) to which any Obligor or any Sub-charterer or the Owners are subjected or subject to.
 
"Approved Commercial Manager" means:
 

 (a)
Seanergy Management Corp., a corporation incorporated and validly existing under the laws of the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960; or
 

 (b)
Fidelity Marine Inc., a corporation incorporated and validly existing under the laws of the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960,
 

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or any other Affiliates of the Charterers or other international and reputable manager which may, with the prior written approval of the Owners (such approval not to be unreasonably withheld or delayed) be appointed as a commercial manager of the Vessel, collectively, the "Approved Commercial Managers".
 
"Approved Managers" means collectively the Approved Commercial Manager and the Approved Technical Manager, each of any of them, as the context may require, an "Approved Manager".
 
"Approved Management Agreement" means:
 

 (a)
the service agreement in respect of the Vessel dated 16 July 2021 and entered into between Seanergy Management Corp. and the Charterers, as amended from time to time;
 

 (b)
the commercial management agreement in respect of the Vessel dated 2 March 2015 and entered into between Seanergy Management Corp. and Fidelity Marine Inc., as amended and supplemented from time to time, including, but not limited to, by a deed of accession dated 16 July 2021 made by the Charterers in favour of Fidelity Marine Inc;
 

 (c)
the ship technical agreement in respect of the Vessel dated 16 July 2021 and entered between Seanergy Shipmanagement Corp. and the Charterers, as amended and supplemented from time to time; the ship technical agreement in respect of the Vessel dated 26 July 2021 and entered between V.Ships Greece Ltd. and the Charterers, as amended and supplemented from time to time,
 
or any such other commercial, technical and/or crew management agreement in respect of the Vessel as may be approved by the Owners in writing, collectively, the "Approved Management Agreements".
 
"Approved Technical Manager" means V. Ships Greece Ltd., a company incorporated and validly existing under the laws of Bermuda whose registered address is at 3rd Floor, Par-La-Ville Place, 14 Par-La-Ville Road, Hamilton HM 08, Bermuda; Seanergy Shipmanagement Corp., a corporation incorporated and validly existing under the laws of the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960 or any other Affiliates of the Charterers or other international and reputable manager which may, with the prior written approval of the Owners be appointed as a technical manager of the Vessel, collectively, the "Approved Technical Managers".
 
"Approved Valuer" means Arrow, Fearnleys, Clarksons, Maersk, Barry Rogliano Salles, Howe Robinson, Weselmann, Braemar, Lorentzen & Stemoco, BRS, Grieg Shipbrokers, Galbraiths, Simpson Spence Young (SSY), Seaborne Valuation or such other independent and reputable shipbroker nominated by the Charterers and approved by the Owners.
 
"Assignable Sub-charter" means, the Initial Sub-charter or any charter or any other form of employment contract relating to the Vessel, whether or not already in existence (i) on a bareboat basis (irrespective of duration) or (ii) on a time charter basis with a duration exceeding or capable of exceeding thirteen (13) months (inclusive of options to renew).
 

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"Associated Vessel" means any ship or 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 Affiliates of the Guarantor.
 
"Breakfunding Costs" means all breakfunding costs and expenses 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 do not fall on a Payment Date.
 
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for business in Shanghai, Hong Kong, New York, Athens and:
 

 (a)
in respect of a day on which a payment is required to be made or other dealing is due to take place under a Leasing Document or an Assignable Sub-charter in Dollars, also a day on which commercial banks are open in New York City; and
 

 (b)
in relation to the fixing of an interest rate, also a day (other than a Saturday or Sunday) which is a US Government Securities Business Day.
 
"Business Ethics Laws" means any laws, regulations and/or other legally binding requirements or determinations in relation to corruption, fraud, collusion, bid-rigging or anti-trust, human rights violations (including forced labour and human trafficking) which are applicable to any Obligor or any Sub-charterer or the Owners or to any jurisdiction where activities are performed and which shall include but not be limited to (i) the United Kingdom Bribery Act 2010 and (ii) the United States Foreign Corrupt Practices Act 1977 and all rules and regulations under each of (i) and (ii).
 
"Buyers" means the Owners acting in their capacity as buyer of the Vessel under the MOA.
 
"Cancelling Date" has the meaning given to such term in the MOA.
 
"Change of Control" occurs, if, at any time:
 

 (a)
the Charterers cease to be wholly legally and beneficially owned or controlled by the Guarantor;
 

 (b)
any group of the existing members of the board of directors of the Guarantor, as at the date of this Charter, which ordinarily comprises a majority of the board of directors of the Guarantor, does not ordinarily comprise a majority of the board of directors of the Guarantor;
 

 (c)
the Disclosed Person ceases to own legal and ultimately beneficially at least 49.99% of the voting power of the issues and outstanding share capital, of the Guarantor;
 

 (d)
a person or persons acting in concert (other than the Disclosed Person):
 

 (i)
have the right of the ability to control, either directly or indirectly, the affairs, or composition of the majority of the board of directors (or equivalent of it), of the Guarantor; or
 

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(ii)
own legally and ultimately beneficially more than the voting power of the issued and outstanding share capital of the Guarantor which is owned by the Disclosed Person; or
 

 (e)
the Disclosed Person ceases to be the Chief Executive Officer of the Guarantor.
 
"Charter Period" means the period commencing on the Commencement Date and described in Clause 32.2 unless it is either terminated earlier or extended in accordance with the provisions of this Charter.
 
"Charterhire" means each of, or as the context may require, all of the quarterly instalments of hire payable under this Charter comprising of a Fixed Charterhire element and a Variable Charterhire element.
 
"CISADA" means the United States Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 as it applies to non-US persons.
 
"Classification Society" means BV or such other classification society as may be approved in writing by the Owners.
 
"Commencement Date" means the date on which Delivery takes place.
 
"Delivery" means the delivery of the legal and beneficial interest in the Vessel from the Owners to the Charterers hereunder.
 
"Disclosed Person" means the holder of the Series B preferred shares of the Guarantor as communicated by the Charterers to the Owners prior to the signing of this Charter.
 
"Dollars", "US$" and "$" 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) and which arise out of the use or operation of the Vessel, including (but not limited to):
 

 (a)
all freight, hire and passage moneys, compensation payable in the event of requisition of the Vessel for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Vessel; and
 

 (b)
if and whenever the Vessel is employed on terms whereby any moneys falling within paragraph (a) 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.
 
"Earnings Account" means, an account designated as an "Earnings Account" in the name of the Charterers with the Account Bank or any other replacement earnings account in the name of the Charterers with any other bank which may, with the prior written consent of the Owners, be opened.
 

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"Emission Allowances" means an allowance, credit, quota, permit or equivalent, representing a right of a vessel to emit a specified quantity of greenhouse gas emissions recognised by the Emission Scheme.
 
"Emission Scheme" means a greenhouse gas emissions trading scheme which for the purposes of this Charter shall include the EU ETS and any other similar systems imposed by applicable lawful authorities that regulate the issuance, allocation, trading or surrendering of Emission Allowances.

"Emission Scheme Authority" means in relation to an Emission Scheme, the relevant authority administering or otherwise implementing such Emissions Scheme.

"Emission Scheme Participant" means in relation to an Emission Scheme, any person which is responsible for complying with the requirements of such Emissions Scheme.

"Environmental Claim" means:
 

 (a)
any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or which relates to any Environmental Law; or
 

 (b)
any claim by any other person which relates to an Environmental Incident,
 
and "claim" means a claim for damages, compensation, fines, penalties or any other payment; 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 of Environmentally Sensitive Material from the Vessel; or
 

 (b)
any incident in which Environmentally Sensitive Material is released 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 liable to be arrested, attached, detained or injuncted and/or the Vessel and/or the Owners and/or the Charterers and/or any Sub-charterer and/or any other operator or manager of the Vessel is at fault or otherwise liable to any legal or administrative action; or
 

 (c)
any other incident involving the Vessel in which Environmentally Sensitive Material is released otherwise than from the Vessel and in connection with which the Vessel is actually arrested and/or where the Owners and/or the Charterers and/or any Sub-charterer and/or any other operator or manager of the Vessel is at fault or otherwise liable to any legal or administrative action.
 
"Environmental Law" means any law relating to pollution or protection of the environment, to the carriage or releases of Environmentally Sensitive Material.
 
"Environmentally Sensitive Material" means oil, oil products and any other substances (including any chemical, gas or other hazardous or noxious substance) which are (or are capable of being or becoming) polluting, toxic or hazardous.
 

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"Escrow Agent" means Watson Farley & Williams LLP acting through its office at Suites 4610-4619, Jardine House, 1 Connaught Place, Hong Kong.
 
"Escrow Agreement" means the escrow agreement made or to be made between, inter alia, the Charterers, the Owners, the Existing Financier and the Escrow Agent setting out the terms of appointment of the Escrow Agent and the manner in which the Escrow Agent will hold and release the Net Purchase Price (as defined in the MOA).
 
"EU ETS" means the European Union Emissions Trading System specifically applicable to shipping pursuant to the Directive (EU) 2023/959 of the European Parliament and of the Council of 10 May 2023 amending European Directive 2003/87/EC and the Commission Implementing Regulation (EU) 2023/2599 of 22 November 2023 laying down rules for the application of Directive 2003/87/EC of the European Parliament and of the Council as regards the administration of shipping companies by administering authorities in respect of a shipping company.
 
"EU ETS Maritime Letter" shall have the meaning as defined under Clause 46.1(hh)(iii).
 
"Existing Facility Agreement" means the loan agreement dated 9 August 2021 entered into between, inter alia, the Existing Financier as lender and the Sellers as borrower, as amended and supplemented by a first supplemental letter dated 1 December 2021, a first supplemental agreement dated 30 June 2022 and a second supplemental agreement dated 10 November 2023.
 
"Existing Financier" has the meaning given to that term in the MOA.
 
"Existing Mortgages" means collectively, the first preferred ship mortgage in respect of the Vessel dated 11 August 2021 as amended by amendment no.1 to first preferred ship mortgage dated 10 November 2023 and the second preferred ship mortgage in respect of the Vessel dated 21 June 2022.
 
"Existing Mortgage Security Documents" means collectively:
 

 (a)
the Existing Mortgages;
 

 (b)
the account security executed by the Charterers in favour of the Existing Financier in respect of the Earnings Account; and
 

 (c)
any other security documents relating to the Vessel created in favour of the Existing Financier;
 
"Fee Letter" means any fee letter dated on or around the date hereof setting out the upfront fee or other fee payable by the Charterers to the Owners pursuant to Clause 41.1.
 
"Finance Amount" means US$16,500,000.
 
"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;
 

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(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 any mortgage, deed of covenant, the general assignment or such other financial security instruments as may be granted to the Owners' Financier as security for the obligations of the Owners in relation to the financing or refinancing of the acquisition of the Vessel.
 
"Fixed Charterhire" has the meaning given to such term in Clause 36.3.
 
"Flag State" means the flag state as stated in Box 5 of this Charter or such other flag state as may be approved in writing by the Owners (such approval not to be unreasonably withheld or delayed).
 
"Fuel EU Maritime" means Fuel EU Maritime Regulation 2023/1805 dated 13 September 2023 on the use of renewable and low-carbon fuels in maritime transport, and amending Directive 2009/16/EC.
 
"Funding Rate" means any individual rate notified by the Owners to the Charterers pursuant to Clause 36.17(ii).
 
"General Assignment" means the general assignment, in agreed form, executed or to be executed by the Charterers in favour of the Owners in respect of the Vessel, pursuant to which the Charterers shall, inter alia, assign its rights in relation to (i) Insurances, Earnings and Requisition Compensation and (ii) any Assignable Sub-charter, in favour of the Owners.
 
"Group" means the Guarantor and its subsidiaries (whether directly or indirectly owned) from time to time.
 
"Guarantee" means a guarantee executed by the Guarantor in favour of the Owners on or about the date of this Charter.
 
"Guarantor" mean Seanergy Maritime Holdings Corp., a corporation incorporated under the laws of the Republic of the Marshall Islands with its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 acting in its capacity as guarantor in connection with, amongst others, the Charterers' obligations in connection with this Charter.
 

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"Historic Term SOFR" means, in relation to a Term, the most recent applicable Term SOFR for three (3) months 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 it is a subsidiary.
 
"IAPPC" means a valid international air pollution prevention certificate for the Vessel issued pursuant to the MARPOL Protocol.

"Initial Sub-charter" means the time charter party of the Vessel dated 15 July 2021 and made between the Charterers as owners and the Initial Sub-charterer as charterers, as amended and supplemented from time to time.
 
"Initial Sub-charterer" means Nippon Yusen Kabushiki Kaisha, a company incorporated and existing under the laws of Japan with its registered address at 3-2 Marunouchi 2-Chome, Chiyoda-ku Tokyo, 100-0005, Japan.
 
"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.
 
"Interest Rate" means, in relation to each Term and subject to Clause 36.17, the percentage rate of interest per annum which is the aggregate of (i) the applicable Reference Rate for such Term and (ii) Margin.
 
"Interpolated Historic Term SOFR" means, in relation to any Term, 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 three (3) months; or
 

 (ii)
if no such Term SOFR is available for a period which is less than three (3) months, 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) the shortest period (for which Term SOFR is available) which exceeds three (3) months.
 

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"Interpolated Term SOFR" means, in relation to any Term, 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 Term) for the longest period (for which Term SOFR is available) which is less than three (3) months; or
 

 (ii)
if no such Term SOFR is available for a period which is less than three (3) months, 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 Term) for the shortest period (for which Term SOFR is available) which exceeds three (3) months.
 
"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.
 
"ISSC" means an International Ship Security Certificate issued under the ISPS Code.
 
"Leasing Documents" means this Charter, the MOA, the Fee Letter and the Security Documents.
 
"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$750,000 or the equivalent in any other currency.
 
"Manager's Undertakings" means, collectively, the letter of undertaking, in agreed form, to be executed by each Approved Manager, each of any of them, as the context may require, the "Manager's Undertaking".
 
"Margin" means two point one five per cent. (2.15%) per annum.
 
"Market Value" means, in relation to the Vessel, the valuation shown by a valuation report or certificate addressed to the Owners and prepared:
 

 (a)
at the cost of the Charterers;
 

 (b)
on a date no earlier than thirty (30) days prior to the relevant date of determination;
 

 (c)
by Approved Valuers;
 

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(d)
without physical inspection of the Vessel or other vessel; and
 

 (e)
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, free of any existing charter or other contract of employment or such other basis as may be agreed by the Owners.
 
"MARPOL Carbon Intensity Regulations" means the regulations contained in Chapters 1, 2 and 4 of Revised MARPOL Annex VI which relate to "Regulations on the Carbon Intensity of International Shipping" and Resolution MEPC.328(76) implementing the CII and any associated guidelines and/or subsequent amendments, including the Ship Energy Efficiency Management Plan (SEEMP).
 
"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) or prospects of any Obligor; or
 

 (b)
the ability of any Obligor to perform its obligations under any Leasing Document or any Assignable Sub-charter 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 any Assignable Sub-charter or the rights or remedies of the Owners under any of the Leasing Documents or any Assignable Sub-charter;
 
"Maturity Date" means the date falling sixty (60) months from the Commencement Date.
 
"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 such term in Clause 40.4(b)(ii).
 
"Net Trading Proceeds" has the meaning given to such term in Clause 40.4(b)(i).
 
"Obligor" means any of the Charterers, the Other Charterer, the Guarantor and the Approved Managers (other than a Third Party Approved Manager) and each other person that may be a party to a Leasing Document from time to time (other than the Owners or their Affiliates) and any other party that provides security for the Leasing Documents.
 
"Original Financial Statements" means, with respect to the Guarantor, its audited consolidated annual financial reports for the financial year ended 31 December 2023, in form and substance satisfactory to the Owners.
 
"Original Jurisdiction" means, in relation to each Obligor, the jurisdiction under whose laws they are incorporated as at the date of this Charter.
 

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"Other Charter" means, in relation to the Other Vessel, a bareboat charter entered into or to be entered into on or about the date of this Charter between the Other Owner, as owner, and the Other Charterer, as demise owner.
 
"Other Charterer" means Squire Ocean Navigation Co..
 
"Other Leasing Documents" means, collectively, the "Leasing Documents" as defined in the Other Charter.
 
"Other Owner" means the Insight 22 Holding Limited.
 
"Other Vessel" means the 170K dwt bulk carrier (Capesize) named m.v. "Squireship" registered under the Flag State with IMO number 9391646.
 
"Outstanding Finance Amount" means, on any relevant date, (i) the Finance Amount minus (ii) the aggregate Fixed Charterhire which have been paid by the Charterers and received by the Owners as at such date.
 
"Owners' Financier" shall have the meaning as defined under Clause 58.2(a).
 
"Owners' Sale" shall have the meaning as defined under Clause 40.4(b)(ii).
 
"Party" means any party to this Charter.
 
"Payment Date" means each of, or as the context may require, any of:
 

 (a)
in respect of the first Charterhire instalment, the date falling three(3) months after the Commencement Date;
 

 (b)
each date falling at three (3) months' intervals during the Charter Period after the date described in paragraph (a) above; and
 

 (c)
the Maturity Date,
 
such that there are a total of twenty (20) Payment Dates during the Charter Period.
 
"Payment Notice" has the meaning given to that term in the MOA.
 
"Permitted Security Interests" means:
 

 (a)
prior to the completion of the Delivery, any Security Interest created by an Existing Mortgage Security Document;
 

 (b)
Security Interests created by a Leasing Document or a Financial Instrument;
 

 (c)
liens 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, ownership and management practice;
 

 (d)
liens for salvage provided such liens do not secure amounts more than thirty (30) days overdue;
 

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(e)
liens for master's disbursements incurred in the ordinary course of trading provided such liens do not secure amounts more than thirty (30) days overdue;
 

 (f)
any other liens 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;
 

 (g)
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 Charterers are prosecuting or defending such action in good faith by appropriate steps; and
 

 (h)
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.
 
"Potential Termination Event" means, an event or circumstance which, with the giving of any notice, the lapse of time, a determination of the Owners and/or the satisfaction of any other condition, would constitute a Termination Event.
 
"Prepositioning Date" shall have the same meaning as defined under the MOA.
 
"Purchase Obligation" means the purchase obligation referred to in Clause 48 (Purchase Obligation).
 
"Purchase Obligation Price" means US$7,650,000.
 
"Purchase Option" means the early purchase option which the Charterers are entitled to exercise pursuant to Clause 47 (Purchase Option).
 
"Purchase Option Date" has the meaning given to that term in Clause 47.1.
 
"Purchase Option Notice" has the meaning given to that term in Clause 47.1 (Purchase Option).
 
"Purchase Option Price" means the aggregate of:
 

 (a)
the Outstanding Finance Amount as at the Purchase Option Date together with a fee calculated at the rate of (i) one point five per cent. (1.5)% of such Outstanding Finance Amount if the Purchase Option is exercised after the first (1st) anniversary of the Commencement Date and until (including) the second (2nd) anniversary of the Commencement Date, (ii) one per cent. (1)% of such Outstanding Finance Amount if the Purchase Option is exercised after the second (2nd) anniversary of the Commencement Date and until (including) the third (3rd) anniversary of the Commencement Date, (iii) zero point five per cent. (0.5%) of such Outstanding Finance Amount if the Purchase Option is exercised after the third (3rd) anniversary of the Commencement Date and until (including) the fourth (4th) anniversary of the Commencement Date and (iv) zero per cent. (0%) of such Outstanding Finance Amount if the Purchase Option is exercised after the fourth (4th) anniversary of the Commencement Date;
 

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(b)
any amounts of interest accrued from the last Payment Date up to an including the Purchase Option Date;
 

 (c)
any accrued but unpaid Variable Charterhire as at the Purchase Option Date;
 

 (d)
any Breakfunding Costs and any other costs, expenses and fees payable by the Owners to the Owner's Financier under the relevant Financial Instruments but excluding any Swap Costs;
 

 (e)
any documented legal costs, expenses reasonably incurred by the Owners and in connection with the exercise of the Purchase Option under Clause 47 (Purchase Option);
 

 (f)
any other reasonable and documented costs, expenses, losses and liabilities and by the Owners under the Leasing Documents as a result of the exercise of the Purchase Option under Clause 47 (Purchase Option) (including, but not limited to, the release of securities and the cost of redelivery); and
 

 (g)
all other amounts due and outstanding under this Charter and the other Leasing Documents together with any applicable interest thereon.
 
"Published Rate" means Term SOFR for three (3) months.
 
"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 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
 

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(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 Owners) temporary;
 

 (ii)
that Published Rate is calculated in accordance with any such policy or arrangement for a period no less than a reasonable time period as determined by the Owners; or
 

 (d)
in the opinion of the Charterers and the Owners (each acting reasonably), that Published Rate is otherwise no longer appropriate for the purposes of calculating interest under this Charter.
 
"Purchase Price" means the aggregate amount which has been paid by the Owners (in their capacity as Buyers) to the Charterers (in their capacity as Sellers) for the purchase of the Vessel pursuant to clause 18 (payment of purchase price) of the MOA.


"Quotation Day" means in relation to a Term for which an Interest Rate is to be determined, two (2) US Government Securities Business Days before the first day of that Term 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).
 
"Reference Rate" means, in relation to a Term:
 

 (a)
the applicable Term SOFR for three (3) months as of the relevant Quotation Day; or
 

 (b)
as otherwise determined pursuant to Clause 36.13,
 
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 each Obligor:
 

 (a)
its Original Jurisdiction;
 

 (b)
any jurisdiction where any property owned by it and charged under a Leasing Document or an Assignable Sub-charter is situated;
 

 (c)
any jurisdiction where it conducts its business; and
 

 (d)
any jurisdiction whose laws govern the perfection of any of the Leasing Documents the Assignable Sub-charter entered into by it creating a Security Interest.
 

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"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);
 

 (ii)
any Relevant Nominating Body; or
 
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 and the Charterer, 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 and the Charterer, an appropriate successor or alternative to a Published Rate.
 
"Reporting Time" means close of business in Shanghai on the date falling two (2) Business Days after the Quotation Day for the relevant Term.
 
"Requisition Compensation" includes all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (c) of the definition of "Total Loss".
 
"Restricted Country" means any country or territory whose government is the target of Sanctions or that is or whose government is, subject to comprehensive country-wide or territory-wide Sanctions (including, without limitation, as regards United States Sanctions, Cuba, Syria, Iran, North Korea, Crimea and Venezuela).
 
"Restricted Person" means any person who is the subject of Sanctions (whether designated by name or by reason of being included in a class of persons to whom any applicable Sanctions apply in accordance with their terms) or against whom Sanctions are directed, including, without limitation, as a result of being (a) owned or controlled directly or indirectly by any person which is a designated target of Sanctions, or (b) organized under the laws of, or a citizen or resident of, any Restricted Country, or otherwise a target of Sanctions.
 
"Sanctions" means any sanctions (including US "secondary 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):
 

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(a)
imposed, administered, enacted or enforced by law or regulation of the United Kingdom, the Council of the European Union, the People's Republic of China, the United Nations or its Security Council or the US (including, but not limited to, "secondary sanctions" imposed by the US), the Hong Kong SAR, the Flag State or any government, official institution or agency of any of the foregoing, whether or not any Obligor or any Sub-charterer is legally bound to comply with the foregoing; or
 

 (b)
otherwise imposed by any law or regulation binding on any Obligor or any Sub-charterer or to which an Obligor or a Sub-charterer is subject.
 
"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 the Account Security, the Guarantee, the General Assignment, the Shares Security Deed, the Manager's Undertakings and any other security documents granting a Security Interest in respect of the obligations of the Charterers under or in connection with this Charter.
 
"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.
 
"Sellers" means the Charterers acting in their capacity as seller of the Vessel under the MOA.
 
"Shares Security Deed" means the shares security deed executed or to be executed by the Guarantor in favour of the Owners over the shares in the Charterers in agreed form.
 
"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).
 
"Special Termination Notice Date" means the date on which the Special Termination Sum is payable by the Charterers to the Owner in accordance with Clause 44(A).1 or 44(A).3.
 
"Special Termination Sum" means, in respect of any date (for the purposes of this definition only, the "Relevant Date"), the aggregate of:
 

 (a)
the Outstanding Finance Amount as at the Relevant Date;
 

 (b)
any accrued but unpaid Variable Charterhire and/or any default interest as at the Relevant Date;
 

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(c)
any Breakfunding Costs and any other costs, expenses and fees payable by the Owners to the Owner's Financier under the relevant Financial Instruments but excluding any Swap Costs;
 

 (d)
any reasonable and documented costs, expenses, losses and liabilities incurred by the Owners in connection with the termination of this Charter under Clause 44(A); and
 

 (e)
all other outstanding amounts payable under this Charter and other Leasing Documents together with any applicable interest thereon.
 
"Sub-charter" means, as the context requires, any sub-charter or other form of contract for employment in respect of the Vessel (including, but not limited to, any Assignable Sub-charter) entered or to be entered into by the Charterers (as disponent owners) and any other Sub-charterer, whether or not already in existence.
 
"Sub-charterer" means any charterer under a Sub-charter (including, but not limited to, any Assignable Sub-charter).
 
"Swap Costs" means any amount payable by the Owners or costs incurred by the Owners (after netting out any gains) as a result of the termination or close-out of any Treasury Transaction entered into in connection with the Leasing Documents.
 
"Term" means each consecutive three (3) months' period falling during the Charter Period, provided that:
 

 (a)
the first Term shall commence on (and include) the Commencement Date and end on (and include) the first Payment Date;
 

 (b)
each subsequent Term (apart from the final Term) shall commence on (and include) the date falling immediately after the last day of the previous Term;
 

 (c)
any Term which would otherwise overrun a Payment Date shall instead end on (and include) that Payment Date; and
 

 (d)
the final Term shall end on (and include) the Maturity Date.
 
"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 Event" means any event described in Clause 44 (Termination Events).
 
"Termination Notice Date" shall have the meaning as defined under Clause 44.2.
 
"Termination Sum" means, in respect of any date (for the purposes of this definition only, the "Relevant Date"), the aggregate of (without double counting amounts that may be included in more than one sub-paragraph below):
 

 (a)
the Outstanding Finance Amount as at the Relevant Date together with a fee calculated at the rate of two point five per cent. (2.5%) of such Outstanding Finance Amount;
 

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(b)
any accrued but unpaid Variable Charterhire as at the Relevant Date;
 

 (c)
any Breakfunding Costs and any other costs, expenses and fees payable by the Owners to the Owner's Financier under the relevant Financial Instruments but excluding any Swap Costs;
 

 (d)
any and all costs, expenses, losses and liabilities incurred by the Owners in connection with the termination of this Charter under Clause 44 (Termination Events); and
 

 (e)
any and all costs, expenses, losses and liabilities incurred by the Owners (and the Owners' Financier (if any)), and 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;
 

 (f)
all other outstanding amounts payable under this Charter and other Leasing Documents together with any applicable interest thereon (including, but not limited to, any default interest on any amount owing under paragraphs (a) to (e) above), and for the avoidance of doubt, this shall not include any then applicable purchase option fee under paragraph (a) of the definition of "Purchase Option Price".
 
"Third Party Approved Manager" means any Approved Manager which is not owned or controlled by the Guarantor.
 
"Total Loss" means:
 

 (a)
in the case of an actual loss of the Vessel, the date on which it occurred or, if that is unknown, the date when the Vessel was last heard of;
 

 (b)
in the case of a constructive, compromised, agreed or arranged total loss of the Vessel, the earlier of:
 

 (i)
the date on which a notice of abandonment is given to the insurers; and
 

 (ii)
the date of any compromise, arrangement or agreement made by or on behalf of the Owners with the insurers in which the insurers agree to treat the Vessel as a Total Loss;
 

 (c)
in the case of any expropriation, confiscation, requisition 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 (excluding a requisition for hire for a fixed period not exceeding one (1) year without any right to an extension), 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, unless it is redelivered within forty-five (45) days to the full control of the Owners or the Charterers; and
 

 (d)
in the case of any arrest, condemnation, capture, seizure or detention of the Vessel (including any hijacking or theft), unless it is redelivered within forty-five (45) days to the full control of the Owners or the Charterers, the date falling on the expiration of such days.


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"Total Loss Payment Date" shall have the meaning given to that term in Clause 40.9.
 
"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.
 
"Treasury Transaction" means any derivative transaction entered into in connection with protection against or benefit from any fluctuation in price or rate.
 
"Upfront Fee" has the meaning given to that term in Clause 41.1.
 
"US" means 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 United States of America or (b) a person some or all of whose payments under the Leasing Documents are from sources within the United States for United States federal income tax purposes.
 
"Variable Charterhire" means, in relation to a Payment Date, a variable element of charterhire which shall be an amount calculated by applying the applicable Interest Rate for the relevant Term to the Outstanding Finance Amount prevailing on the first day of the relevant Term (which for the avoidance of doubt, shall be the Finance Amount in respect of the first Charterhire instalment), for the actual number of days elapsed within the relevant Term.
 
"Vessel" means the 176K dwt bulk carrier (Capesize) named m.v. "Friendship" registered under the Flag State with IMO number 9410454.
 
61.2
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 and, if required by the Owners in their sole discretion, the Owners' Financier;
 
"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;
 
"continuing" means, in relation to any Termination Event, a Termination Event which has not been waived by the Owners and in relation to any Potential Termination Event, a Potential Termination Event which has not been waived by the Owners or remedied to the satisfaction of the Owners;
 
"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, more than fifty one percent (51%) per cent, 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;
 
"document" includes a deed; also a letter, fax or telex;
 
"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 61.3;
 
the Owners' "cost of funds" in relation to the Outstanding Finance Amount 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 Outstanding Finance Amount or any part thereof for a period equal in length to the Term of the Outstanding Finance Amount or any part thereof;
 
"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;
 

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"protection and indemnity risks" means the usual risks covered by a protection and indemnity association which is a member of the International Group of P&I 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;
 
"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;
 
"subsidiary" has the meaning given in Clause 61.4; 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.
 
61.3
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 preceding the numerically corresponding day if the numerically corresponding day is not a Business 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.
 
61.4
Meaning of "subsidiary". A company (S) is a subsidiary of another company (P) if:
 
(a)
a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or
 
(b)
P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or
 
(c)
P has the direct or indirect power to appoint or remove a majority of the directors of S; or
 
(d)
P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P,
 
(e)
and any company of which S is a subsidiary is a parent company of S.
 
61.5
In this Charter:
 

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(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; and
 
(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.
 
61.6
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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SCHEDULE 1

ACCEPTANCE CERTIFICATE
 
Friend Ocean Navigation Co. (the "Charterers") hereby acknowledges that at           hours on          , there was delivered to, and accepted by, the Charterers the Vessel known as m.v. " Friendship", registered in the name of Insight 23 Holding Limited (the "Owners") under the flag of the Republic of Liberia with IMO number 9410454 under a bareboat charter dated _______________________(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 Clause 45 (Representations and Warranties) of the Charter remain correct and that no Termination Event (as defined in the Charter) has occurred and is continuing at the date of this Acceptance Certificate.
 

  
Name:
  
Title:
  
for and on behalf of
  
Friend Ocean Navigation Co.
  
Date:
  
 

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SCHEDULE 2
 
Part A
 
The following are the documents referred to in Clause 34.2(f)(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)
authorizing 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, an copy of the power of attorney of any party to a Leasing Document authorising a specified person or persons to execute the Leasing Documents to which it is a party.
 
1.4
If required, a copy of the specimen of the signature of each person authorised 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 the Charterers, approving the terms of, and the transactions contemplated by such Leasing Documents.
 
1.6
A copy of the certificate of an officer or authorised signatory of each of the Charterers and the Guarantor certifying that each copy document relating to it specified in this Part A of Schedule 2 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
Duly executed copies of each Leasing Document (other than the Account Security, the General Assignment and the Manager's Undertakings) and of each document to be delivered under each of them.
 
2.2
Agreed forms of the Account Security, the General Assignment and the Manager's Undertakings and of each document to be delivered under each of them.
 
3
Vessel Documents
 
3.1
A copy of each executed Approved Management Agreement establishing that the Vessel will, as from the Commencement Date, be managed by the relevant Approved Manager and approved by the Owners.
 

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3.2
A copy of the Document of Compliance of the relevant Approved Technical Manager.
 
3.3
A copy of the Vessel's class certificate evidencing that the Vessel maintains such classification (free of any overdue recommendations and conditions) as is acceptable to the Owners.
 
3.4
Copies of the Vessel's Safety Management Certificate (together with any other details of the applicable safety management system which the Owners may require) and of any other documents required under the ISM Code and the ISPS Code (including, without limitation, an ISSC and IAPPC).
 
4
Legal opinions
 
4.1
An agreed form legal opinion by English law legal advisers to the Owners on such matters on the laws of England in relation to the 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 documents listed in paragraphs 2.1 and 2.2 of Part A of this Schedule, concerning the laws of the Republic of the Marshall Islands, the Republic of Libera and Greece and such other relevant jurisdictions as the Owners may require, in form and substance acceptable to the Owners.
 
5
Initial Sub-charter
 
5.1
A copy of the Initial Sub-charter (and any addendums thereto).
 
5.2
Evidence to the satisfaction of the Owners that the Initial Sub-charterer consents to the sale and leaseback of the Vessel contemplated by the Leasing Documents.
 
6
Escrow Agreement
 
A copy of the executed Escrow Agreement.
 
7
Vessel Insurances
 
7.1
Agreed form of letters of undertaking and certificates of entry (as the case may be) relating to insurances as set out in Clause 38 (Insurance) acknowledged by the relevant insurer, insurance broker, protection and indemnity association or war risks association (as the case may be).
 
7.2
An insurance report or certificate by an insurance broker or consultant appointed by the Owners (but at the cost of the Charterers) in an agreed form acceptable to the Owners.
 
8
Payment Notice
 
A duly completed copy of the Payment Notice to be received by the Owners not later than three (3) Business Days prior to the Prepositioning Date.
 
9
Deed of Release
 
A copy of the agreed form deed of release discharging (i) all of the Charterers' obligations under the Existing Facility Agreement and the Existing Mortgage Security Documents and (ii) all Security Interests encumbering the Vessel or any part thereof (if any), in such form as is satisfactory to the Owners.


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10
Others
 
10.1
A copy of the duly executed commercial invoice of the Vessel.
 
10.2
Copies of the Original Financial Statements.
 
10.3
Evidence that the Earnings Account has been or will be opened.
 
10.4
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.
 
10.5
Such evidence relating to the Charterers or the Guarantor 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.
 
10.6
A copy of any other consents, approvals, authorization or other document, opinion or assurance which the Owners consider to be reasonably necessary or desirable in connection with the entry into and performance of the transactions contemplated by any of the documents listed in paragraph 2 of Schedule 2, Part A or for the validity and enforceability of such documents.
 
10.7
Such other information and documents as the Owners may reasonably require by giving notice to the Charterers.
 
10.8
If the Owners so require, in relation to any of the documents referred to in this Schedule 2 Part A, an English translation of that document (with such cost to be borne by the Charterers).
 

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Part B
 
The following are the documents referred to in Clause 34.2(f)(ii):
 
1
Bringdown Certificate
 
If required, a copy of the certificate of an authorised signatory of the Charterers and the Guarantor certifying that each document which they are required to provide under Part A of Schedule 2 of this Charter, is correct, complete and in full force and effect as at the Commencement Date.
 
2
Deed of Release
 
Duly executed copy of the deed of release referred to in paragraph 9 of Schedule 2, Part A of this Charter.
 
3
Security Documents
 
Duly executed copies of each of the Account Security, the General Assignment and the Manager's Undertakings and of each document to be delivered under each of them.
 
4
Vessel Documents
 
Documentary evidence that the Vessel:
 
(a)
is or will be definitively and permanently registered in the name of the Owners under the Flag State;
 
(b)
is or will be in the absolute and unencumbered ownership of the Owners; and
 
(c)
has been or will be 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 certificate or transcript issued by the competent authorities of the Flag State on the date of Delivery evidencing the Charterers' (as sellers under the MOA) ownership of the Vessel and that the Vessel is free from registered encumbrances and mortgages;
 

 (ii)
the original (if required by the Flag State) or a copy of the bill of sale in a form recordable in the Flag State, transferring title of the Vessel by the Charterers (as sellers under the MOA) to the Owners (as buyers under the MOA) and stating that the Vessel is free from all mortgages, encumbrances and maritime liens (whether maritime or otherwise) or any other debts whatsoever, duly notarially attested and legalised or apostilled as may be required by the Flag State; and
 

 (iii)
a copy of the protocol of delivery and acceptance duly executed by the Charterers and Owners.
 
(d)
Any additional documents as may be required by the competent authorities of the Flag State for the purpose of registering the Vessel in the name of the Owners as registered owner.
 
5
Others
 

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5.1
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.
 
5.2
If the Owners so require, in relation to any of the documents referred to in this Schedule 2 Part B, an English translation of that document (with such cost to be borne by the Charterers).
 
5.3
Such other information or 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 34.2(f)(iii):
 
1
Registration of security
 
Documentary evidence that, if applicable, the Security Interests intended to be created by the Security Documents have been duly perfected within the time periods as set out under applicable law.
 
2
Legal opinions
 
Not later than five (5) Business Days after the date that (i) the Delivery under this Charter and (ii) the "Delivery" as defined under the Other Charter have all taken place, issued signed copies of the legal opinions referred to in paragraphs 4.1 and 4.2 of Schedule 2, Part A of this Charter.
 
3
Insurances
 
(a)
Not later than fifteen (15) 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 38 (Insurance) 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 Schedule 2, Part A of this Charter.
 
(b)
Not later than twenty (20) Business Days after the Commencement Date, the issued insurance report in the form agreed under paragraph 5 of Schedule 2, Part A of this Charter.
 

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SINGAPORE/91706046v1
EXECUTION PAGE
 
OWNERS
  

 
SIGNED
)
for and on behalf of
)
INSIGHT 23 HOLDING LIMITED
) /s/ Mao Yufei
acting by MAO Yufei
)
its attorney-in-fact
)
in the presence of:
)

/s/ Sun Linzi
Witness
Name: Sun Linzi
Address: Room 6006, 6th Floor, No.15,
 Second East Zhongshan Road,
 Shanghai, P.R.China 200002

CHARTERERS
  
   
EXECUTED
)
for and on behalf of
)
FRIEND OCEAN NAVIGATION CO.
) /s/ Stavros Gyftakis
acting by Stavros Gyftakis
)
being its attorney-in-fact
)
witnessed by:
)

/s/ Maria Moschopoulou


Witness
Name: Maria Moschopoulou
Address: 154 Vouliagmenis Avenue,
16674 Glyfada, Athens Greece




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SINGAPORE/91706046v1
EX-4.48 21 ef20039029_ex4-48.htm EXHIBIT 4.48
Exhibit 4.48

EXECUTION VERSION
 
Dated _____________________
 

SEANERGY MARITIME HOLDINGS CORP.
as Guarantor
 
and
 
[_________]
 
as Owner
 
GUARANTEE
 
relating to
 
a bareboat charter in respect of m.v. [___________]

 


Index
 
Clause
Page
     
1
Interpretation
1
2
Guarantee
2
3
Liability as Principal and Independent Debtor
3
4
Expenses
4
5
Adjustment of Transactions
4
6
Payments
4
7
Interest
5
8
Subordination
5
9
Enforcement
5
10
Representations and Warranties
6
11
Undertakings
9
12
Judgments and Currency Indemnity
13
13
Set‑Off
13
14
Supplemental
14
15
Assignment
15
16
Notices
16
17
Invalidity of Leasing Documents
17
18
Incorporation of Bareboat Charter Provisions
17
19
Governing Law and Arbitration
17


THIS GUARANTEE is made on ____________________ 2025
 
BETWEEN
 
(1)
SEANERGY MARITIME HOLDINGS CORP., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands with registration number 27721 whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands, MH 96960 (the "Guarantor")
 
(2)
[_________], a company incorporated and existing under the laws of Hong Kong with business registration number [____________] and having its registered office at 6/F, Manulife Place, 348 Kwun Tong Road, Kowloon, Hong Kong (the "Owner", which expression includes its successors and assigns)
 
BACKGROUND
 
(A)
By a memorandum of agreement dated _________________ 2025 (as amended and supplemented from time to time, the "MOA") and made between (i) [_______] (the "Bareboat Charterer") as seller and (ii) the Owner as buyer, the Bareboat Charterer has agreed to sell and deliver and the Owner has agreed to purchase and accept the legal and beneficial title of the Vessel pursuant to the terms and conditions contained therein.
 
(B)
By a bareboat charterparty dated _________________ 2025 (as amended and supplemented from time to time, the "Bareboat Charter") and made between (i) the Bareboat Charterer as bareboat charterer and (ii) the Owner as owner, the Owner has agreed to bareboat charter the Vessel to the Bareboat Charterer pursuant to the terms and conditions contained therein.
 
(C)
The Guarantor directly holds 100 per cent. of the issued shares in the Bareboat Charterer.
 
(D)
It is one of the conditions precedent to the purchase of the Vessel by the Owner from the Bareboat Charterer under the MOA and the subsequent chartering of the Vessel by the Owner to the Bareboat Charterer under the Bareboat Charter that the Guarantor enters into this Guarantee.
 
(E)
This Guarantee is the "Guarantee" referred to in the Bareboat Charter.
 
IT IS AGREED as follows:
 
1
INTERPRETATION
 
1.1
Defined expressions
 
Words and expressions defined in the Bareboat Charter shall have the same meanings when used in this Guarantee unless the context otherwise requires.
 
1.2
Construction of certain terms
 
In this Guarantee:
 
"bankruptcy" includes a liquidation, receivership or administration and any form of suspension of payments, arrangement with creditors or reorganisation under any corporate or insolvency law of any country.
 

"Code" means the US Internal Revenue Code of 1986.
 
"FATCA FFI" means a foreign financial institution as defined in section 1471(d)(4) of the Code which, if the Owner is not a FATCA Exempt Party, could be required to make a FATCA Deduction.
 
"Party" means a party to this Guarantee.
 
"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 the Bareboat Charterer to the Owner under or in connection with any Leasing Documents or any judgment or any arbitral award relating to any Leasing Documents and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country.
 
"Security Period" means the period commencing on the date hereof and ending on the date on which the Owner is satisfied that the Secured Liabilities have been irrevocably and unconditionally paid and discharged in full.
 
1.3
References to "Bareboat Charterer"
 
References to the Bareboat Charterer under this Guarantee shall, for the avoidance of doubt, include reference to the Bareboat Charterer in its various capacities under the Leasing Documents.
 
1.4
Application of construction and interpretation provisions of Bareboat Charter
 
Clauses 61.2 to 61.6 of the Bareboat Charter apply, with any necessary modifications, to this Guarantee.
 
2
GUARANTEE
 
2.1
Guarantee and indemnity
 
The Guarantor unconditionally and irrevocably:
 
(a)
guarantees the due payment of all amounts payable by the Bareboat Charterer under or in connection with the Leasing Documents (or any of them) to which the Bareboat Charterer is a party;
 
(b)
guarantees the punctual performance by the Bareboat Charterer of all the Bareboat Charterer's obligations under or in connection with the Leasing Documents (or any of them) to which the Bareboat Charterer is a party;
 
(c)
undertakes to pay to the Owner, within three (3) Business Days from the Owner's demand as if it was the principal obligor, any such amount which is not paid by the Bareboat Charterer when due and payable under or in connection with the Leasing Documents (or any of them), taking into account any grace period for such payment as may be applicable under the terms of the Leasing Documents; and
 
2
(d)
undertakes to fully indemnify, as an independent and primary obligation, the Owner within three (3) Business Days from its demand in respect of all documented claims, expenses, liabilities, costs and losses which are made or brought against or incurred by the Owner as a result of or in connection with any obligation or liability of the Bareboat Charterer under the Leasing Documents to which the Bareboat Charterer is a party and/or any obligation or liability guaranteed by the Guarantor being or becoming unenforceable, invalid, void or illegal; and the amount recoverable under this indemnity shall be equal to the amount which the Owner would otherwise have been entitled to recover under the Leasing Documents to which the Bareboat Charterer is a party.
 
2.2
No limit on number of demands
 
The Owner may serve more than one demand under Clause 2.1 (Guarantee and indemnity).
 
2.3
Guarantee of whole amount
 
This Guarantee shall be construed and take effect as a guarantee of all amounts due to the Owner under the Leasing Documents (or any of them) to which the Bareboat Charterer is a party.
 
3
LIABILITY AS PRINCIPAL AND INDEPENDENT DEBTOR
 
3.1
Principal and independent debtor
 
The Guarantor shall be liable under this Guarantee as a principal and independent debtor and accordingly it shall not have, as regards this Guarantee, any of the rights or defences of a surety.
 
3.2
Waiver of rights and defences
 
Without limiting the generality of Clause 3.1 (Principal and independent debtor), the Guarantor shall neither be discharged by, nor have any claim against the Owner in respect of:
 
(a)
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;
 
(b)
any amendment or supplement being made to any Leasing Document;
 
(c)
any arrangement or concession (including a rescheduling or acceptance of partial payments) relating to, or affecting, any Leasing Document;
 
(d)
any release or loss (even though negligent) of any right or Security Interest created by any Leasing Document;
 
(e)
any failure (even though negligent) promptly or properly to exercise or enforce any such right or Security Interest, including a failure to realise for its full market value an asset covered by such a Security Interest;
 
(f)
any Leasing Document being or later becoming void, unenforceable, illegal or invalid or otherwise defective in whole or in part for any reason, including a neglect to register it; or
 
(g)
any insolvency or similar proceedings.
 
3
4
EXPENSES
 
4.1
Costs of preservation of rights, enforcement etc.

The Guarantor shall pay to the Owner on its demand the amount of all documented expenses (including, without limitation, out of pocket expenses and legal fees) incurred by the Owner in connection with the enforcement of, or the preservation of any rights under this Guarantee or any other Leasing Document, including any advice, claim or proceedings relating to this Guarantee or any other Leasing Document.
 
4.2
Fees and expenses payable under Bareboat Charter
 
Clause 4.1 (Costs of preservation of rights, enforcement etc.) is without prejudice to the Guarantor's liabilities in respect of the Bareboat Charterer's obligations under clause 41 (fees and expenses) of the Bareboat Charter.
 
5
ADJUSTMENT OF TRANSACTIONS
 
The Guarantor shall pay to the Owner within three (3) Business Days from its demand any amount which the Owner is required, or agrees, to pay pursuant to any claim by, or settlement with, a trustee in bankruptcy of the Bareboat Charterer on the ground that the Bareboat Charter (as the case may be), or a payment by the Bareboat Charterer or other Obligor, was invalid or on any similar ground.
 
6
PAYMENTS
 
6.1
Method of payments
 
Any amount due under this Guarantee shall be paid:
 
(a)
in immediately available funds;
 
(b)
to such account as the Owner may from time to time notify to the Guarantor;
 
(c)
without any form of set‑off, cross‑claim or condition; and
 
(d)
free and clear of any tax deduction or withholding for or on account of any tax payable under the laws of its Relevant Jurisdictions except a tax deduction or withholding which the Guarantor is required by law to make.
 
6.2
Grossing-up for taxes
 
If the Guarantor is required by law to make a tax deduction, the amount due to the Owner shall be increased by the amount necessary to ensure that the Owner receives and retains a net amount which, after the tax deduction, is equal to the full amount that it would otherwise have received.
 
6.3
Indemnity and evidence of payment of taxes
 
(a)
The Guarantor shall fully indemnify the Owner on the Owner's demand in respect of all documented claims, expenses, liabilities and losses incurred by the Owner by reason of any failure of the Guarantor to make any tax deduction or by reason of any increased payment not being made on the due date for such payment in accordance with Clause 6.2 (Grossing-up for taxes).
 
4
(b)
Within thirty (30) days after making tax deduction, the Guarantor shall deliver to the Owner any receipts, certificates or other documentary evidence satisfactory to the Owner that the tax had been paid to the appropriate taxation authority.
 
7
INTEREST
 
7.1
Accrual of interest
 
Any amount due under this Guarantee shall carry interest following the date on which the Owner demands payment of it from the Guarantor until it is actually paid, unless interest on that same amount also accrues under the relevant Leasing Document.
 
7.2
Calculation of interest
 
Interest under this Guarantee shall be calculated and accrue at the rate described in clauses 36.10 and 36.11 of the Bareboat Charter and otherwise in accordance with the terms thereof.
 
7.3
Guarantee extends to interest payable under Leasing Documents
 
For the avoidance of doubt, it is confirmed that this Guarantee covers all interest payable under the Leasing Documents.
 
8
SUBORDINATION
 
8.1
Subordination of rights of Guarantor
 
Until the end of the Security Period, all rights which the Guarantor at anytime has (whether in respect of this Guarantee or any other transaction) against the Bareboat Charterer or any other Obligor or their respective assets shall be fully subordinated to the rights of the Owner under the Leasing Documents (or any of them), and in particular, the Guarantor shall not:
 
(a)
claim, or in a bankruptcy of the Bareboat Charterer or any other Obligor prove for, any amount payable to the Guarantor by the Bareboat Charterer or any other Obligor, whether in respect of this Guarantee or any other transaction;
 
(b)
take or enforce any Security Interest for any such amount;
 
(c)
claim to set-off any such amount against any amount payable by the Guarantor to the Bareboat Charterer or any other Obligor; or
 
(d)
claim any subrogation or other right in respect of any Leasing Document or any sum received or recovered by the Owner under the Leasing Documents.
 
9
ENFORCEMENT
 
9.1
No requirement to commence proceedings against Bareboat Charterer
 
The Owner will not need to commence any proceedings under, or enforce any Security Interest created by any Leasing Document before claiming or commencing proceedings under this Guarantee.
 
5
9.2
Conclusive evidence of certain matters
 
However, as against the Guarantor:
 
(a)
any judgment or order of a court in England or any other Relevant Jurisdiction or award of an arbitration in London in connection with any other Leasing Document; and
 
(b)
any statement or admission of any other Obligors in connection with any Leasing Document,
 
shall be binding and conclusive as to all matters of fact and law to which it relates.
 
9.3
Suspense account
 
The Owner may, for the purpose of claiming or proving in an insolvency of any Obligor, place any sum received or recovered under or by virtue of this Guarantee on a separate interest bearing suspense or other nominal account without applying it in satisfaction of the Bareboat Charterer's or Guarantor's obligations under any Leasing Document.
 
10
REPRESENTATIONS AND WARRANTIES
 
10.1
General
 
The Guarantor represents and warrants to the Owner, as at the date of this Guarantee, and on each day henceforth until the last day of the Security Period, as follows.
 
10.2
Status
 
(a)
The Guarantor is duly incorporated and validly existing and in good standing under the laws of the Republic of the Marshall Islands.
 
(b)
The Guarantor is not a FATCA FFI or a US Tax Obligor.
 
(c)
The Bareboat Charterer is wholly legally and beneficially owned and controlled by the Guarantor.
 
(d)
There has been no Change of Control.
 
(e)
The shares of the Guarantor are trading on the Nasdaq Capital Market.
 
(f)
The Guarantor is an entity reporting with the Nasdaq Capital Market.
 
10.3
Corporate power
 
The Guarantor has the corporate capacity, and has taken all corporate action and obtained all consents, approvals, authorisations, licenses or permits necessary for it:
 
(a)
to execute this Guarantee or any other Leasing Document to which it is a party; and
 
(b)
to make all the payments contemplated by, and to comply with and perform its obligations under, this Guarantee or any other Leasing Document to which it is a party.
 
6
10.4
No conflicts
 
The entry into and the performance by the Guarantor of, and the transactions contemplated by, this Guarantee and the other Leasing Documents to which it is a party do not and will not conflict with:
 
(a)
any law or regulation applicable to it; or
 
(b)
its constitutional documents; or
 
(c)
any agreement or instrument binding upon it or constitute a default or termination event (however described) under any such agreement or instrument.
 
10.5
Consents in force
 
All the consents, approvals, authorisations, licenses or permits referred to in Clause 10.3 (Corporate power) remain in force and nothing has occurred which makes any of them liable to revocation.
 
10.6
Legal validity
 
This Guarantee and the other Leasing Documents to which the Guarantor is a party constitute the Guarantor's legal, valid and binding obligations enforceable against the Guarantor in accordance with its respective terms and any relevant insolvency laws affecting creditors' rights generally.
 
10.7
No third party Security Interests
 
Without limiting the generality of Clause 10.6 (Legal validity), at the time of the execution and delivery of this Guarantee and any other Security Document to which the Guarantor is a party:
 
(a)
the Guarantor will have the right to create all the Security Interests which such Security Documents purport to create; and
 
(b)
no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates.
 
10.8
No withholding taxes
 
All payments which the Guarantor is liable to make under this Guarantee and the other Leasing Documents to which it is a party may be made by it without deduction or withholding for or on account of any tax payable under the laws of the Relevant Jurisdiction of the Guarantor.
 
10.9
No default
 
No Termination Event or Potential Termination Event has occurred, or is continuing or might reasonably be expected to result from the entry into and performance of this Guarantee or any other Leasing Document.
 
7
10.10
Information
 
All information which has been provided in writing by or on behalf of the Guarantor to the Owner in connection with any Leasing Document satisfies the requirements of Clause 11.2 (Information provided to be accurate); all audited and unaudited accounts which have been so provided satisfies the requirements of Clause 11.4 (Form of financial statements); and there has been no material adverse effect in the financial position or state of affairs of the Guarantor from that disclosed in the latest of those accounts.
 
10.11
No litigation
 
No legal or administrative action involving the Guarantor involving claim(s) amounting to more than US$ 5,000,000 has been commenced or taken.
 
10.12
Pari passu
 
The obligations of the Guarantor under this Guarantee and each other Leasing Document to which the Guarantor is a party, are the direct, general and unconditional obligations of the Guarantor and rank at least pari passu with all other present and future unsecured and unsubordinated creditors of it save for any obligation which is mandatorily preferred by law and not by virtue of any contract.
 
10.13
Sanction
 
(a)
Neither the Guarantor, nor any of its respective Affiliates, members, directors, officers, employees or agents, nor (to be best of is knowledge) any Sub-charterer:
 

 (i)
is a Restricted Person;
 

 (ii)
is owned or controlled by or acting directly or indirectly on behalf of or for the benefit of, a Restricted Person;
 

 (iii)
owns or controls a Restricted Person; or
 

 (iv)
has a Restricted Person serving as a director, officer or, to the best of its knowledge, employee.
 
(b)
The Guarantor and its respective directors, officers, employees and agents and (to the best of its knowledge) any Sub-charterer is in compliance with all Sanctions laws, and none of them have been or are currently being investigated on compliance with Sanctions, they have not received notice or are aware of any claim, action, suit or proceeding against any of them with respect to Sanctions and they have not taken any action to evade the application of Sanctions.
 
10.14
Anti-Money Laundering and other Laws
 
The Guarantor, each other Obligor and (to the best of its knowledge) any Sub-charterer is not in breach of any laws or regulations relating to the Vessel and its ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code, all Environmental Laws, the laws of the Vessel's registry and in particular, all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws and each of the Guarantor, other Obligor and (to the best of its knowledge) Sub-charterer has instituted and maintained systems, controls, policies and procedures designed to:
 
(a)
prevent and detect incidences of bribery and corruption, money laundering and terrorism financing; and
 
(b)
promote and achieve compliance with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws.
 
8
10.15
No immunity
 
Neither the Guarantor nor any of its assets, in each case, has any right to immunity from set off, legal proceedings, attachment prior to judgement or other attachment or execution of judgement on the grounds of sovereign immunity or otherwise.
 
10.16
No insolvency
 
The Guarantor is not insolvent or in liquidation or administration or subject to any other formal or informal insolvency procedure, and no receiver, administrative receiver, administrator, liquidator, trustee or analogous officer has been appointed in respect of it or all or material part of its assets.
 
10.17
Provisions of Leasing Documents
 
The Guarantor is fully familiar with and agrees with all provisions of the Leasing Documents to which the Bareboat Charterer is a party.
 
10.18
No waiver
 
No oral or written statement has been made to the Guarantor by or on behalf of the Owner or any other person which could be construed as a waiver of any provisions of this Guarantee or a statement of intention not to enforce this Guarantee in accordance with its terms.
 
11
UNDERTAKINGS
 
11.1
General
 
The Guarantor undertakes with the Owner to comply with the following provisions of this Clause 11 (Undertakings) commencing from the date hereof and up to the last day of the Security Period, except as the Owner may otherwise permit.
 
11.2
Information provided to be accurate
 
All financial and other information which is provided in writing by or on behalf of the Guarantor under or in connection with this Guarantee will be true and not misleading and will not omit any material fact or consideration.
 
11.3
Provision of financial statements
 
The Guarantor will send to the Owner:
 
(a)
as soon as possible, but in no event later than one hundred and eighty (180) days after the end of each financial year of the Guarantor (beginning with the financial year ending 31 December 2024), the audited consolidated annual financial reports of the Guarantor for that financial year; and
 
(b)
as soon as possible, but in no event later than ninety (90) days after the end of each half-year of the Guarantor, the unaudited consolidated half-yearly accounts of the Guarantor certified as to their correctness by a director of the Guarantor.
 
9
11.4
Form of financial statements
 
All accounts (audited and unaudited) delivered under Clause 11.3 (Provision of financial statements) will:
 
(a)
be prepared in accordance with all applicable laws and generally accepted accounting principles consistently applied;
 
(b)
give a true and fair view of (in respect of the audited and unaudited accounts) or fairly representing (in the case of the management accounts) the state of affairs of the Guarantor at the date of those accounts and of their profit for the period to which those accounts relate;
 
(c)
fully disclose or provide for all significant liabilities of the Guarantor and its subsidiaries; and
 
(d)
if not in the English language, be accompanied by an English translation duly certified as to its correctness.
 
11.5
Consents
 
The Guarantor will maintain in force and promptly obtain or renew, and will, upon the request of the Owner, promptly send certified copies to the Owner of, any necessary consents, approvals, authorisations, licenses or permits of any regulatory body or authority required:
 
(a)
for the Guarantor to perform its obligations under this Guarantee and any other Leasing Document to which it is a party; and
 
(b)
for the validity or enforceability of this Guarantee and any other Leasing Document to which it is a party,
 
and the Guarantor will comply with the terms of all such consents, approvals, authorisations, licenses or permits.
 
11.6
Maintenance of Security Interests
 
The Guarantor will at their own cost:
 
(a)
ensure that any Leasing Document to which it is a party validly creates the obligations and the Security Interests which it purports to create; and
 
(b)
without limiting the generality of paragraph (a), promptly register, file, record or enrol any Leasing Document to which it is 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 it is 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 it creates.
 
11.7
Notification of default
 
The Guarantor will promptly notify the Owner:
 
(a)
any circumstances which could give rise to a breach of any representation or undertaking in the Bareboat Charter, or any Termination Event, relating to Sanctions;
 
10
(b)
any Termination Event; or
 
(c)
any matter which indicates that a Termination Event may have occurred,
 
and will thereafter keep the Owner fully up-to-date with all developments.
 
11.8
Maintenance of status
 
The Guarantor will maintain its separate corporate existence as a corporation and remain in good standing under the laws of the Republic of the Marshall Islands.
 
11.9
Negative Pledge
 
The Guarantor shall not, and shall procure none of its subsidiaries will create or permit to arise any Security Interest over any asset which is subject to the Security Interest created under any Leasing Documents present or future except the Permitted Security Interests.
 
11.10
Pari passu
 
The Guarantor shall procure that its liabilities under this Guarantee will rank at least pari passu with all its other present and future unsecured liabilities, except for liabilities which are mandatorily preferred by law.
 
11.11
No disposal of assets, change of business
 
The Guarantor:
 
(a)
shall not make any substantial change to the nature of its business or its corporate structure from that existing at the date of this Guarantee; and
 
(b)
shall procure that the Bareboat Charterer will not transfer, lease (other than in relation to the chartering of the Vessel pursuant to the terms of the Bareboat Charter) or otherwise 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.
 
11.12
No payment of dividend
 
The Guarantor shall not declare, make or pay any dividend or other distribution (or interest on any unpaid dividend or other distribution) (whether in cash or in kind) on or in respect of its share capital (including any class of its share capital) unless:
 
(a)
at the relevant time no Termination Event has occurred and is continuing; and
 
(b)
a Termination Event would not occur as a direct result of such payment or distribution.
 
11.13
No merger etc.
 
The Guarantor shall not, and shall procure that no other Obligor (other than a Third Party Approved Manager) will, enter into any form of merger, amalgamation, demerger or corporate reconstruction without the Owner's prior written consent.
 
11
11.14
Maintenance of ownership of Bareboat Charterer
 
The Guarantor shall remain the ultimate corporate beneficial owner of all the issued and allotted share capital of the Bareboat Charterer.
 
11.15
Sanctions
 
The Guarantor shall comply, and shall procure that each other Obligor (including, in each case, procuring or as the case may be, using all reasonable endeavours to procure the respective officers, directors, employees, consultants, agents and/or intermediaries of the relevant entity or (on a best effort basis) any Sub-charterer to do the same) complies, with all applicable laws and regulations in respect of Sanctions.
 
11.16
Trading not contrary to Sanctions
 
Without limiting Clause 11.15 (Sanctions), the Guarantor will procure that:
 
(a)
the Vessel shall not be operated, employed, managed, used by or for the benefit of a Restricted Person;
 
(b)
the Vessel shall not be employed in trading with any Restricted Person or in any manner contrary to Sanctions or published boycotts imposed by any of the United Nations, the European Union, the United States of America, the United Kingdom;
 
(c)
notwithstanding any provision of the Bareboat Charter, the Vessel shall not be permitted to call at any port in any Restricted 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;
 
(d)
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 in any Obligor, any Sub-charterer or the Owner becoming a Restricted Person; and
 
(e)
that each charterparty in respect of the Vessel shall contain, for the benefit of the Owners, language which permits refusal of employment or voyage orders if compliance would result in a breach of Sanctions and which prohibits trading to any Restricted Country.
 
11.17
Compliance with Anti-Money Laundering Laws and other Laws.
 
The Guarantor:
 
(a)
shall, and shall procure that each other Obligor shall, promptly notify the Owner of any non-compliance, by any Obligor or their respective officers, directors, employees, consultants, agents or intermediaries or (on a best efforts basis) any Sub-charterer, with all laws and regulations relating to Sanctions, Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and/or Business Ethics Laws as well as provide all information (once available) in relation to its business and operations which may be relevant for the purposes of ascertaining whether any of the aforesaid parties are in compliance with such laws;
 
(b)
shall, and shall procure that each other Obligor shall (including procuring or as the case may be, using all reasonable endeavours to procure the respective officers, directors, employees, consultants, agents and/or intermediaries of the relevant entity to do the same) or (on a best effort basis) any Sub-charterer shall:
 
12

 (i)
comply with all Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws;
 

 (ii)
maintain systems, controls, policies and procedures designed to promote and achieve ongoing compliance with Anti-Money Laundering Laws, Anti-Terrorism Financing Laws and Business Ethics Laws; and
 

 (iii)
procure the Bareboat Charterer, not to use, or permit or authorize any person to directly or indirectly use, the Purchase Price for any purpose that would breach any Anti-Money Laundering Laws, Anti-Terrorism Financing Laws or Business Ethics Laws;
 
(c)
procure that the Bareboat Charterer do not lend, invest, contribute or otherwise make available the Purchase Price to or for any other person in a manner which would result in a violation of Anti-Money Laundering Laws, Anti-Terrorism Financing Laws or Business Ethics Laws.
 
12
JUDGMENTS AND CURRENCY INDEMNITY
 
12.1
Judgments relating to Leasing Documents
 
This Guarantee shall cover any amount payable by the Bareboat Charterer under or in connection with any judgment relating to any Leasing Document.
 
12.2
Currency indemnity
 
If any sum (a "Sum") due from the Guarantor to the Owner under this Guarantee or under any order, judgment or aware given or made relating 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:
 
(a)
making or filing a claim or proof against the Guarantor; or
 
(b)
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings; or
 
the Guarantor shall, as an independent obligation, on demand, indemnify the Owner 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.
 
In this Clause 12.2 (Currency indemnity), the "available rate of exchange" means the rate at which the Owner is able at the opening of business (Shanghai time) on the Business Day after it receives the Sum concerned to purchase the First Currency with the Second Currency.
 
13
SET‑OFF
 
13.1
Application of credit balances
 
The Owner may, following the occurrence of a Termination Event which is continuing, without prior notice, but notifying the Guarantor afterwards:
 
13

(a)
apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Guarantor at any office in any country of either an affiliate of the Owner or the Owner's financiers in or towards satisfaction of any sum then due from the Guarantor to the Owner under this Guarantee and any other Security Document; and
 
(b)
for that purpose:
 

 (i)
break, or alter the maturity of, all or any part of a deposit of the Guarantor;
 

 (ii)
convert or translate all or any part of a deposit or other credit balance into Dollars; and
 

 (iii)
enter into any other transaction or make any entry with regard to the credit balance which the Owner considers appropriate.
 
13.2
Existing rights unaffected
 
The Owner shall not be obliged to exercise any of its rights under Clause 13.1 (Application of credit balances); and those rights shall be without prejudice and in addition to any right of set‑off, combination of accounts, charge, lien or other right or remedy to which the Owner is entitled (whether under the general law or any document).
 
14
SUPPLEMENTAL
 
14.1
Continuing guarantee
 
This Guarantee shall remain in force as a continuing security at all times from the date of this Guarantee up to the last day of the Security Period.
 
14.2
Rights cumulative, non-exclusive
 
The Owner's rights under and in connection with this Guarantee are cumulative, may be exercised as often as appears expedient and shall not be taken to exclude or limit any right or remedy conferred by law.
 
14.3
No impairment of rights under Guarantee
 
If the Owner omits to exercise, delays in exercising or invalidly exercises any of its rights under this Guarantee, that shall not impair that or any other right of the Owner under this Guarantee.
 
14.4
Severability of provisions
 
If any provision of this Guarantee is or subsequently becomes void, illegal, unenforceable or otherwise invalid, that shall not affect the validity, legality or enforceability of its other provisions.
 
14.5
Guarantee not affected by other security
 
This Guarantee shall not impair, nor be impaired by, any other guarantee, any Security Interest or any right of set-off or netting or to combine accounts which the Owner may now or later hold in connection with the Leasing Documents.
 
14
14.6
Applicability of provisions of Guarantee to other Security Interests
 
Any Security Interest which the Guarantor creates (whether at the time at which it signs this Guarantee or at any later time) to secure any liability under this Guarantee shall be a principal and independent security, and Clauses 3 (Liability as principal and independent debtor) and 17 (Invalidity of Leasing Documents) shall, with any necessary modifications, apply to it, notwithstanding that the document creating the Security Interest neither describes it as a principal or independent security nor includes provisions similar to Clauses 3 (Liability as principal and independent debtor) and 17 (Invalidity of Leasing Documents).
 
14.7
Applicability of provisions of Guarantee to other rights
 
Clauses  3 (Liability as principal and independent debtor) and 17 (Invalidity of Leasing Documents) shall also apply to any right of set-off or netting or to combine accounts which the Guarantor creates by an agreement entered into at the time of this Guarantee or at any later time (notwithstanding that the agreement does not include provisions similar to Clauses 3 (Liability as principal and independent debtor) and 17 (Invalidity of Leasing Documents)), being an agreement referring to this Guarantee.
 
14.8
Third party rights
 
Other than the Other Owner, a person who is not a party to this Guarantee has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Guarantee.
 
14.9
Counterpart
 
This Guarantee 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 Guarantee.
 
14.10
Immunity
 
The Guarantor waives any rights of sovereign immunity which it or any of its assets may enjoy in any jurisdiction and subjects itself to civil and commercial law with respect to their obligations under this Guarantee.
 
15
ASSIGNMENT
 
15.1
Assignment or transfer by Guarantor
 
The Guarantor shall not assign any of its rights or transfer by novation of its rights and obligations under this Guarantee except with the Owner's prior consent in writing.
 
15.2
Assignment by Owner
 
The Owner may assign or transfer its rights under and in connection with this Guarantee to the same extent as it may do so under the Bareboat Charter.
 
15
16
NOTICES
 
16.1
Notices
 
Any notice, certificate, demand or other communication to be served, given made or sent under or in relation to this Guarantee 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 addresses:
 
(a)
to the Owner:
China Huarong Shipping Financial Leasing Company Limited Room 6006, 6th Floor, No. 15 Second East Zhongshan Road, Shanghai, China, 200002

 
Attention:
Jones Cao/Annie Tao/Sun Linzi
 
 
Tel:
+86(0)21 63268756
 
 
Email:
caojiong@hrflc.com/taobeijuan@hrflc.com/sunlinzi@hrflc.com

(b) to the Guarantor:
c/o Seanergy Maritime Holdings Corp.



154 Vouliagmenis Avenue, 16674 Glyfada, Athens, Greece

 
Attention:
Legal Department
 
 
Email:
legal@seanergy.gr & finance@seanergy.gr
 
 
Tel:
+30 213 0181507
 
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.
 
16.2
Service of notices
 
Any such communication shall be deemed to have reached the Party to whom it was addressed (a) when delivered (in case of a registered letter), or (b) when actually received in readable form (in case of an email). A notice or other such communication received on a non-working day or after 5.00 p.m. in the place of receipt shall be deemed to be served on the next following working day in such place.
 
16.3
Validity of demands
 
A demand under this Guarantee shall be valid notwithstanding that it is served:
 
(a)
on the date on which the amount to which it relates is payable by the Bareboat Charterer under a Leasing Document; and
 
(b)
at the same time as the service of a notice under clause 43.2 of the Bareboat Charter;
 
and a demand under this Guarantee may refer to all amounts payable under or in connection with a Leasing Document without specifying a particular sum or aggregate sum.
 
16
17
INVALIDITY OF LEASING DOCUMENTS
 
17.1
Invalidity of Leasing Documents
 
In the event of:
 
(a)
any Leasing Document now being or later becoming, with immediate or retrospective effect, void, illegal, unenforceable or otherwise invalid for any other reason whatsoever, whether of a similar kind or not; or
 
(b)
without limiting the scope of paragraph (a), a bankruptcy or insolvency of any Obligor, the introduction of any law or any other matter resulting in any Obligor being discharged from liability under any Leasing Document, or any Leasing Document ceasing to operate (for example, by interest ceasing to accrue),
 
this Guarantee shall cover any amount which would have been or become payable under or in connection with a Leasing Document if such Leasing Document had been and remained entirely valid, legal and enforceable, or the Bareboat Charterer had not suffered bankruptcy or insolvency, or any combination of such events or circumstances, as the case may be, and the Bareboat Charterer had remained fully liable under it for liabilities whether invalidly incurred or validly incurred but subsequently retrospectively invalidated; and references in this Guarantee to amounts payable by the Bareboat Charterer under or in connection with a Leasing Document shall include references to any amount which would have so been or become payable as aforesaid.
 
18
INCORPORATION OF BAREBOAT CHARTER PROVISIONS
 
18.1
The following provisions of the Bareboat Charter apply to this Guarantee as if they were expressly incorporated therein with any necessary modifications:
 
clause 42 (No waiver of rights);
 
clause 51 (no set-off or tax deduction);
 
clause 53 (FATCA);
 
clause 55 (Confidentiality); and
 
clause 56 (Partial Invalidity).
 
18.2
Clause 18.1 (Incorporation of Bareboat Charter provisions) is without prejudice to the application to this Guarantee of any provision of the Bareboat Charter which, by its terms, applies or relates to this Guarantee.
 
19
GOVERNING LAW AND ARBITRATION
 
19.1
This Guarantee and any non-contractual obligations arising under or in connection with it, shall be governed by and construed in accordance with English law.
 
19.2
Any dispute arising out of or in connection with this Guarantee, 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") shall be referred to and finally resolved by 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.
 
17
19.3
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.
 
19.4
The seat of the arbitration shall be London, England, even where any hearing takes place outside England.
 
19.5
The reference shall be to three (3) 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 fourteen (14) calendar days of the date that the notice is delivered to the other party 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 fourteen (14) days specified. If the other party does not appoint its own arbitrator and gives 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.
 
19.6
Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.
 
19.7
Where the reference is to three (3) arbitrators the procedure for making appointments shall be in accordance with the procedure for full arbitration stated above.
 
19.8
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.
 
19.9
The language of the arbitration shall be English.
 
THIS GUARANTEE has been executed and delivered as a deed on the date stated at the beginning of this Guarantee.
 
18
EXECUTION PAGE
 
GUARANTOR
    
     
EXECUTED AS A DEED
)
  
By
)
  
for and on behalf of
)
  
SEANERGY MARITIME HOLDINGS CORP.
)
 
as attorney-in-fact
)
  
in the presence of:
)
  


 
Witness' signature
Witness' name:
Witness' address:

OWNER

SIGNED, SEALED and DELIVERED as a DEED
)
 
by )  
as attorney-in-fact
 )  
for [________]
 )  
  )
 
under a power of attorney dated ____________________ 2025
)
Name:

in the presence of

 
Witness's signature
Witness's name:
Witness's address:


EX-8.1 22 ef20039029_ex8-1.htm EXHIBIT 8.1
Exhibit 8.1

SUBSIDIARIES OF SEANERGY MARITIME HOLDINGS CORP.
 
 
Subsisiary
  
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
 
Kaizen Shipping Co.
  
Republic of the Marshall Islands
 
Blue Shipping Co.
  
Republic of the Marshall Islands

Mei Shipping Co.
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-12.1 23 ef20039029_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: March 21, 2025

/s/ Stamatios Tsantanis
Stamatios Tsantanis
Chairman, Chief Executive Officer and Director (Principal Executive Officer)
EX-12.2 24 ef20039029_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: March 21, 2025

/s/ Stavros Gyftakis
Stavros Gyftakis
Chief Financial Officer (Principal Financial Officer)
EX-13.1 25 ef20039029_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, 2024 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: March 21, 2025

/s/ Stamatios Tsantanis
Stamatios Tsantanis
Chairman, Chief Executive Officer and Director (Principal Executive Officer)
EX-13.2 26 ef20039029_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, 2024 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: March 21, 2025

/s/ Stavros Gyftakis
Stavros Gyftakis
Chief Financial Officer (Principal Financial Officer)
EX-15.1 27 ef20039029_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 Statements Nos. 333-166697, 333-169813, 333-237500, 333-238136, 333-253332 and 333-280792 on Form F-3 of our reports dated March 21, 2025, 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, 2024.

/s/ Deloitte Certified Public Accountants S.A.

Athens, Greece
March 21, 2025
EX-15.2 28 ef20039029_ex15-2.htm EXHIBIT 15.2
Exhibit 15.2

CONSENT OF WATSON FARLEY & WILLIAMS LLP

Reference is made to the annual report on Form 20-F of Seanergy Maritime Holdings Corp. (the “Company”) for the year ended December 31, 2024 (the “Annual Report”) and the Registration Statements on Form F-3 (File Nos. 333-280792, 333-253332, 333-238136, 333-237500, 333-166697 and 333-169813) of the Company including the prospectuses contained therein (together, the “Registration Statements”). We hereby consent to (i) the filing of this letter as an exhibit to the Annual Report, which is incorporated by reference into the Registration Statements and (ii) each reference to us and the discussions of advice provided by us in the Annual Report under the section “Item 10. Additional Information—E. Taxation” and to the incorporation by reference of the same in the Registration Statements, in each case, without admitting we are “experts” within the meaning of the Securities Act of 1933, as amended, or the rules and regulations of the U.S. Securities and Exchange Commission promulgated thereunder with respect to any part of the Registration Statements.

/s/ Watson Farley & Williams LLP
  
Watson Farley & Williams LLP
  
New York, New York
  
March 21, 2025