o |
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
|
x |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended |
December 31, 2012
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from
|
to |
o
|
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
|
|
Commission file number
001-33283
|
EUROSEAS LTD.
|
(Exact name of Registrant as specified in its charter)
|
(Translation of Registrant's name into English)
|
Marshall Islands
|
(Jurisdiction of incorporation or organization)
|
4 Messogiou & Evropis Street, 151 25 Maroussi Greece
|
(Address of principal executive offices)
|
Tasos Aslidis, Tel: (908) 301-9091,
euroseas@euroseas.gr
, Euroseas Ltd. c/o Tasos Aslidis,
11 Canterbury Lane, Watchung, NJ 07069
|
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
|
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one)
|
|||||
Large accelerated filer
o
|
Accelerated filer
o
|
Non-accelerated filer
x
|
|||
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
x
U.S. GAAP
o
International Financial Reporting Standards as issued by the International Accounting Standards Board.
o
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
|
|||||
o
Item 17
o
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).
|
|||||
o
Yes
x
No
|
|||||
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
|
|||||
Indicate by check mark whether the registrant has filed all documents and reports to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
|
|||||
o
Yes
o
No
|
|||||
Part I
|
Item 1.
|
Identity of Directors, Senior Management and Advisers
|
2
|
|
Item 2.
|
Offer Statistics and Expected Timetable
|
2
|
|
Item 3.
|
Key Information
|
2
|
|
Item 4.
|
Information on the Company
|
34
|
|
Item 4A.
|
Unresolved Staff Comments
|
51
|
|
Item 5.
|
Operating and Financial Review and Prospects
|
51
|
|
Item 6.
|
Directors, Senior Management and Employees
|
63
|
|
Item 7.
|
Major Shareholders and Related Party Transactions
|
68
|
|
Item 8.
|
Financial Information
|
71
|
|
Item 9.
|
The Offer and Listing
|
72
|
|
Item 10.
|
Additional Information
|
73
|
|
Item 11.
|
Quantitative and Qualitative Disclosures About Market Risk
|
85
|
|
Item 12.
|
Description of Securities Other than Equity Securities
|
86
|
Part II
|
Item 13.
|
Defaults, Dividend Arrearages and Delinquencies
|
87
|
|
Item 14.
|
Material Modifications to the Rights of Security Holders and Use of Proceeds
|
87
|
|
Item 15.
|
Controls and Procedures
|
87
|
|
Item 16A.
|
Audit Committee Financial Expert
|
89
|
|
Item 16B.
|
Code of Ethics
|
89
|
|
Item 16C.
|
Principal Accountant Fees and Services
|
90
|
|
Item 16D.
|
Exemptions from the Listing Standards for Audit Committees
|
90
|
|
Item 16E.
|
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
|
90
|
|
Item 16F.
|
Change in Registrant's Certifying Accountant
|
90
|
|
Item 16G.
|
Corporate Governance
|
90
|
|
Item 16H.
|
Mine Safety Disclosure
|
91
|
Part III
|
Item 17.
|
Financial Statements
|
92
|
|
Item 18.
|
Financial Statements
|
92
|
|
Item 19.
|
Exhibits
|
92
|
|
·
|
our future operating or financial results;
|
|
·
|
future, pending or recent acquisitions, joint ventures, business strategy, areas of possible expansion, and expected capital spending or operating expenses;
|
|
·
|
drybulk and container shipping industry trends, including charter rates and factors affecting vessel supply and demand;
|
|
·
|
our financial condition and liquidity, including our ability to obtain additional financing in the future to fund capital expenditures, acquisitions and other general corporate activities;
|
|
·
|
availability of crew, number of off-hire days, drydocking requirements and insurance costs;
|
|
·
|
our expectations about the availability of vessels to purchase or the useful lives of our vessels;
|
|
·
|
our expectations relating to dividend payments and our ability to make such payments;
|
|
·
|
our ability to leverage to our advantage our manager's relationships and reputations in the drybulk and container shipping industry;
|
|
·
|
changes in seaborne and other transportation patterns;
|
|
·
|
changes in governmental rules and regulations or actions taken by regulatory authorities;
|
|
·
|
potential liability from future litigation;
|
|
·
|
global and regional political conditions;
|
|
·
|
acts of terrorism and other hostilities, including piracy; and
|
|
·
|
other factors discussed in the section titled "Risk Factors."
|
Item 1.
|
Identity of Directors, Senior Management and Advisers
|
Item 2.
|
Offer Statistics and Expected Timetable
|
Item 3.
|
Key Information
|
A.
|
Selected Financial Data
|
Euroseas Ltd. – Summary of Selected Historical Financials
|
||||||||||||||||||||
Year Ended December 31,
|
||||||||||||||||||||
2008
|
2009
|
2010
|
2011
|
2012
|
||||||||||||||||
Income Statement Data
|
||||||||||||||||||||
Voyage revenues
|
132,243,918 | 66,215,669 | 54,422,489 | 64,129,511 | 54,921,697 | |||||||||||||||
Related party revenue
|
- | - | - | 240,000 | 240,000 | |||||||||||||||
Commissions
|
(5,940,460 | ) | (2.433.776 | ) | (1,944,473 | ) | (2,972,967 | ) | (2,673,703 | ) | ||||||||||
Net revenue
|
126,303,458 | 63,781,893 | 52,478,016 | 61,396,544 | 52,487,994 | |||||||||||||||
Voyage expenses
|
(3,092,323 | ) | (1,510,551 | ) | (1,596,569 | ) | (777,902 | ) | (1,329,668 | ) | ||||||||||
Vessel operating expenses
|
(27,521,194 | ) | (23,763,480 | ) | (21,507,192 | ) | (26,249,339 | ) | (25,075,139 | ) | ||||||||||
Drydocking expenses
|
(6,129,257 | ) | (1,912,474 | ) | (6,537,733 | ) | (3,148,111 | ) | (1,616,425 | ) | ||||||||||
Vessel depreciation
(1)
|
(28,284,752 | ) | (19,092,384 | ) | (17,979,750 | ) | (18,348,556 | ) | (17,385,608 | ) | ||||||||||
Management fees
|
(5,387,415 | ) | (5,074,297 | ) | (4,892,006 | ) | (5,810,095 | ) | (4,984,098 | ) | ||||||||||
Other general and administration expenses
|
(4,057,736 | ) | (3,640,534 | ) | (3,026,941 | ) | (2,986,507 | ) | (3,661,426 | ) | ||||||||||
Impairment loss
|
(25,113,364 | ) | - | - | - | - | ||||||||||||||
Net loss on sale of vessels
|
- | (8,959,321 | ) | - | - | (8,568,234 | ) | |||||||||||||
Other operating income
|
- | - | 2,352,946 | 735,707 | 254,604 | |||||||||||||||
Operating income / (loss)
|
26,717,417 | 22,429 | (709,229 | ) | 4,811,741 | (9,878,000 | ) | |||||||||||||
Interest and other financing costs
|
(2,930,737 | ) | (1,437,637 | ) | (1,498,216 | ) | (2,191,235 | ) | (1,977,226 | ) | ||||||||||
Interest income
|
3,168,501 | 1,123,317 | 538,820 | 248,892 | 484,886 | |||||||||||||||
Equity loss in joint venture
|
- | - | (538,833 | ) | (2,415 | ) | (1,219,692 | ) | ||||||||||||
Other loss
|
(5,464,271 | ) | (15,335,613 | ) | (4,398,392 | ) | (1,750,994 | ) | (608,709 | ) | ||||||||||
Net income / (loss)
|
21,490,910 | (15,627,504 | ) | (6,605,850 | ) | 1,115,989 | (13,198,741 | ) | ||||||||||||
Balance Sheet Data
|
||||||||||||||||||||
Current assets
|
92,538,220 | 58,933,240 | 46,404,826 | 38,877,587 | 45,070,412 | |||||||||||||||
Vessels, net
|
231,963,606 | 257,270,824 | 255,412,434 | 237,063,878 | 206,934,746 | |||||||||||||||
Deferred assets and other long term assets
|
8,716,960 | 7,214,230 | 5,399,374 | 5,747,951 | 9,318,578 | |||||||||||||||
Investment in joint venture
|
- | - | 14,461,167 | 14,458,752 | 16,989,061 | |||||||||||||||
Total assets
|
333.218,786 | 323,418,294 | 321,677,801 | 296,148,168 | 278,312,797 | |||||||||||||||
Current liabilities including current portion of long term debt
|
21,417,515 | 30,443,552 | 25,214,542 | 21,101,011 | 22,367,521 | |||||||||||||||
Long term debt, including current portion
|
56,015,000 | 71,515,000 | 88,385,000 | 74,913,000 | 61,581,000 | |||||||||||||||
Total liabilities
|
76,387,354 | 91,965,031 | 102,982,809 | 84,226,420 | 68,686,651 | |||||||||||||||
Common shares outstanding
|
30,575,611 | 30,849,711 | 31,002,211 | 31,167,211 | 45,319,605 | |||||||||||||||
Share capital
|
917,269 | 925,492 | 930,067 | 935,017 | 1,359,586 | |||||||||||||||
Total shareholders' equity
|
256,831,432 | 231,453,263 | 218,694,992 | 211,921,748 | 209,626,146 | |||||||||||||||
Other Financial Data
|
||||||||||||||||||||
Net cash provided by operating activities
|
74,283,741 | 7,837,660 | 12,748,989 | 17,317,673 | 8,513,106 | |||||||||||||||
Net cash provided by / (used in) investing activities
|
(46,145,503 | ) | (45,598,765 | ) | (29,206,844 | ) | 1,896,435 | (3,505,057 | ) | |||||||||||
Net cash (used in) / provided by financing activities
|
(58,422,367 | ) | 4,894,463 | 9,746,824 | (22,282,763 | ) | (2,837,952 | ) | ||||||||||||
Euroseas Ltd. – Summary of Selected Historical Financials (continued)
|
||||||||||||||||||||
Earnings / (loss) per share, basic and diluted
|
0.69 | ( 0.50 | ) | (0.21 | ) | 0.04 | (0.34 | ) | ||||||||||||
Dividends declared
|
34,664,699 | 10,779,609 | 6,848,536 | 8,457,722 | 4,437,984 | |||||||||||||||
Cash dividends / return of capital, declared per common share
|
1.13 | 0.35 | 0.22 | 0.27 | 0.125 | |||||||||||||||
Weighted average number of shares outstanding during period, basic
(4)
|
30,162,583 | 31,379,516 | 31,636,633 | 31,794,381 | 38,950,100 | |||||||||||||||
Weighted average number of shares outstanding during period, diluted
(4)
|
31,232,581 | 31,379,516 | 31,636,633 | 31,846,080 | 38,950,100 | |||||||||||||||
2008
|
2009
|
2010
|
2011
|
2012
|
||||||||||||||||
Other Fleet Data
(2)
|
||||||||||||||||||||
Number of vessels
|
15.61 | 16.30 | 15.53 | 16.00 | 15.21 | |||||||||||||||
Calendar days
|
5,714 | 5,949 | 5,669 | 5,840 | 5,566 | |||||||||||||||
Available days
|
5,563 | 4,983 | 4,953 | 5,700 | 5,521 | |||||||||||||||
Voyage days
|
5,451 | 4,724 | 4,914 | 5,497 | 5,280 | |||||||||||||||
Utilization Rate (percent)
|
98.0 | % | 94.8 | % | 99.2 | % | 96.4 | % | 95.6 | % | ||||||||||
(In U.S. dollars per day per vessel)
|
||||||||||||||||||||
Average TCE rate
(3)
|
23,695 | 13,698 | 11,201 | 11,525 | 10,155 | |||||||||||||||
Vessel Operating Expenses
|
4,816 | 3,979 | 3,794 | 4,495 | 4,507 | |||||||||||||||
Management Fees
|
943 | 853 | 863 | 995 | 895 | |||||||||||||||
G&A Expenses
|
710 | 612 | 534 | 511 | 657 | |||||||||||||||
Total Operating Expenses excluding drydocking expenses
|
6,469 | 5,444 | 5,191 | 6,001 | 6,058 | |||||||||||||||
Drydocking expenses
|
1,073 | 321 | 1,153 | 539 | 290 |
2008
|
2009
|
2010
|
2011
|
2012
|
||||||||||||||||
(In U.S. dollars, except for voyage days and TCE rates which are expressed in U.S. dollars per day)
|
||||||||||||||||||||
Voyage revenues
|
132,243,918 | 66,215,669 | 54,422,489 | 64,129,511 | 54,921,697 | |||||||||||||||
Loss of hire insurance income
(*)
|
- | - | 2,214,179 | - | - | |||||||||||||||
Voyage expenses
|
(3,092,323 | ) | (1,510,551 | ) | (1,596,569 | ) | (777,902 | ) | (1,329,668 | ) | ||||||||||
Time Charter Equivalent or TCE Revenues
|
129,151,595 | 64,705,118 | 55,040,099 | 63,351,609 | 53,592,029 | |||||||||||||||
Voyage days
(1)
|
5,451 | 4,724 | 4,914 | 5,497 | 5,280 | |||||||||||||||
Average TCE rate
(*)
|
23,695 | 13,698 | 11,201 | 11,525 | 10,155 |
C.
|
Reasons for the Offer and Use of Proceeds
|
D.
|
Risk Factors
|
·
|
supply of, and demand for, drybulk commodities and containerized cargo;
|
|
·
|
changes in the exploration or production of energy resources, commodities, semi-finished and finished consumer and industrial products, and the resulting changes in the international pattern of trade;
|
·
|
global and regional economic and political conditions, including armed conflicts and terrorist activities;
|
|
·
|
embargoes and strikes;
|
|
the location of regional and global exploration, production and manufacturing facilities;
|
||
·
|
availability of credit to finance international trade;
|
|
·
|
the location of consuming regions for energy resources, commodities, semi-finished and finished consumer and industrial products;
|
|
·
|
the distance drybulk and containerized commodities are to be moved by sea;
|
|
·
|
environmental and other regulatory developments;
|
|
·
|
currency exchange rates;
|
|
·
|
changes in global production and manufacturing distribution patterns of finished goods that utilize drybulk and other containerized commodities;
|
|
·
|
changes in seaborne and other transportation patterns; and
|
|
·
|
weather and other natural phenomena.
|
·
|
the number of newbuilding deliveries;
|
|
·
|
the scrapping rate of older vessels;
|
|
·
|
the price of steel and other materials;
|
|
·
|
port and canal congestion;
|
|
·
|
changes in environmental and other regulations that may limit the useful life of vessels;
|
|
·
|
vessel casualties;
|
|
·
|
the number of vessels that are out of service; and
|
|
·
|
changes in global commodity production.
|
·
|
general economic and market conditions affecting the shipping industry in general;
|
|
|
·
|
supply of drybulk, container and multipurpose vessels, including newbuildings;
|
|
·
|
demand for drybulk, container and multipurpose vessels;
|
|
·
|
types and sizes of vessels;
|
|
·
|
scrap values;
|
·
|
other modes of transportation;
|
|
·
|
cost of newbuildings;
|
|
|
·
|
technological advances;
|
·
|
new regulatory requirements from governments or self-regulated organizations;
|
|
|
·
|
competition from other shipping companies; and
|
·
|
prevailing level of charter rates.
|
·
|
locating and acquiring suitable vessels;
|
|
·
|
identifying and consummating acquisitions or joint ventures;
|
|
·
|
integrating any acquired business successfully with our existing operations;
|
|
·
|
enhancing our customer base;
|
|
·
|
managing our expansion; and
|
|
·
|
obtaining required financing on acceptable terms.
|
|
·
|
incur additional indebtedness;
|
|
·
|
create liens on our assets;
|
|
·
|
sell capital stock of our subsidiaries;
|
|
·
|
make investments;
|
|
·
|
engage in mergers or acquisitions;
|
|
·
|
pay dividends;
|
|
·
|
make capital expenditures;
|
|
·
|
change the management of our vessels or terminate or materially amend the management agreement relating to each vessel; and
|
|
·
|
sell our vessels.
|
|
·
|
marine disaster;
|
|
·
|
piracy;
|
|
·
|
environmental accidents;
|
|
·
|
grounding, fire, explosions and collisions;
|
|
·
|
cargo and property losses or damage;
|
|
·
|
business interruptions caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather conditions; and
|
|
·
|
work stoppages or other labor problems with crew members serving on our vessels including crew strikes and/or boycotts.
|
|
·
|
actual or anticipated fluctuations in quarterly and annual variations in our results of operations;
|
|
·
|
changes in market valuations or sales or earnings estimates or publication of research reports by analysts;
|
|
·
|
changes in earnings estimates or shortfalls in our operating results from levels forecasted by securities analysts;
|
|
·
|
speculation in the press or investment community about our business or the shipping industry;
|
|
·
|
changes in market valuations of similar companies and stock market price and volume fluctuations generally;
|
|
·
|
payment of dividends;
|
|
·
|
strategic actions by us or our competitors such as mergers, acquisitions, joint ventures, strategic alliances or restructurings;
|
|
·
|
changes in government and other regulatory developments;
|
|
·
|
additions or departures of key personnel;
|
|
·
|
general market conditions and the state of the securities markets; and
|
|
·
|
domestic and international economic, market and currency factors unrelated to our performance.
|
Item 4.
|
Information on the Company
|
A.
|
History and Development of the Company
|
B.
|
Business Overview
|
Name
|
Type
|
Dwt
|
TEU
|
Year Built
|
Employment (*)
|
TCE Rate ($/day)
|
Dry Bulk Vessels
|
||||||
PANTELIS
|
Panamax
|
74,020
|
2000
|
TC 'til Jan-14 +
1 Year in Charterers Option
|
$11,200 +50/50 Profit Share
$14,200
|
|
ELENI P
|
Panamax
|
72,119
|
1997
|
Baumarine Pool
|
Spot Earnings since February 2013
|
|
IRINI
|
Panamax
|
69,734
|
1988
|
TC 'til Apr-13
|
$14,000
|
|
ARISTIDES N.P.
|
Panamax
|
69,268
|
1993
|
TC 'til Feb-14
|
$7,500
|
|
MONICA P
|
Handymax
|
46,667
|
1998
|
TC 'til Sep-13
|
$12,375
|
|
Total Dry Bulk Vessels
|
5
|
331,808
|
||||
Multipurpose Dry Cargo Vessels
|
||||||
ANKING (ex-TASMAN TRADER)
|
1
|
22,568
|
950
|
1990
|
Available
|
Available
|
Container Carriers
|
||||||
MAERSK NOUMEA
|
Intermediate
|
34,677
|
2,556
|
2001
|
TC 'til Jun-13
|
$15,750
|
TIGER BRIDGE
|
Intermediate
|
31,627
|
2,228
|
1990
|
TC till Nov-13
+12 months in Charterers Option
|
$6,000
$8,000
|
AGGELIKI P
|
Intermediate
|
30,360
|
2,008
|
1998
|
TC 'til Feb-14
|
$6,000
|
DESPINA P
|
Handy size
|
33,667
|
1,932
|
1990
|
TC 'til Aug-13
|
$6,000
|
CAPTAIN COSTAS
(ex-OEL TRANSWORLD)
|
Handy size
|
30,007
|
1,742
|
1992
|
TC 'til Mar-14
+12 months in Charterers Option
|
$6,500
$11,500
|
MARINOS (ex-YM PORT KELANG, ex-MASTRO NICOS, ex- YM XINGANG I)
|
Handy size
|
23,596
|
1,599
|
1993
|
TC 'till May -13
|
$6,000
|
MANOLIS P
|
Handy size
|
20,346
|
1,452
|
1995
|
TC 'til May-13
|
$6,000
|
OEL BENGAL
(ex-NINOS, ex-YM QINGDAO I)
|
Feeder
|
18,253
|
1,169
|
1990
|
TC 'til May-13
|
$6,950
|
KUO HSIUNG
|
Feeder
|
18,154
|
1,169
|
1993
|
TC till May-13 +
6 months in
Charterers Option
|
$6,725
$13,500
|
Total Container Carriers
|
9
|
240,687
|
15,855
|
|||
Fleet Grand Total
|
15
|
595,063
|
16,805
|
|
(*) TC denotes time charter. All dates listed are the earliest redelivery dates under each TC.
|
·
|
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;
|
|
·
|
news and industry reports of sales of vessels that are not similar to our vessels where we have made certain adjustments in an attempt to derive information that can be used as part of our estimates;
|
|
·
|
approximate market values for our vessels or similar vessels that we have received from shipbrokers, whether solicited or unsolicited, or that shipbrokers have generally disseminated;
|
|
·
|
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.
|
Name
|
Capacity
|
Purchase Date
|
Carrying Value as of December 31, 2011
|
Carrying Value as of December 31, 2012
|
Dry Bulk Vessels
|
(dwt)
|
(million USD)
|
(million USD)
|
|
PANTELIS
|
74,020
|
Jul-2009
|
$23.59
(1)
|
$21.97
(2)
|
ELENI P
|
72,119
|
Mar-2009
|
$14.91
(1)
|
$13.66
(2)
|
IRINI
|
69,734
|
Oct-2002
|
$3.33
|
$2.74
|
ARISTIDES N.P.
|
69,268
|
Sep-2006
|
$14.18
(1)
|
$12.31
(2)
|
MONICA P
|
46,667
|
Jan-2009
|
$14.74
(1)
|
$13.61
(2)
|
Total Dry Bulk Vessels
|
331,808
|
$70.75
|
$64.29
|
|
Multipurpose Dry Cargo Vessels
|
(dwt/teu)
|
|||
ANKING
|
22,568 / 950
|
Apr-2006
|
$7.67
(1)
|
$7.06
(2)
|
Container Carriers
|
(teu)
|
|||
MAERSK NOUMEA
|
2,556
|
May-2008
|
$45.06
(1)
|
$42.88
(2)
|
TIGER BRIDGE
|
2,228
|
Oct-2007
|
$17.61
(1)
|
$15.86
(2)
|
AGGELIKI P
|
2,008
|
Jun-2010
|
$14.93
(1)
|
$14.15
(2)
|
DESPINA P
|
1,932
|
Aug-2007
|
$13.11
(1)
|
$11.90
(2)
|
JONATHAN P
|
1,932
|
Aug-2007
|
$13.00
(1, 3)
|
-
|
CAPTAIN COSTAS
|
1,742
|
Jun-2007
|
$17.81
(1)
|
$16.31
(2)
|
MARINOS
|
1,599
|
Nov-2006
|
$13.12
(1)
|
$12.10
(2)
|
MANOLIS P
|
1,452
|
Apr-2007
|
$14.17
(1)
|
$13.23
(2)
|
NINOS
|
1,169
|
Feb-2001
|
$4.78
(1)
|
$4.40
(2)
|
KUO HSIUNG
|
1,169
|
May-2002
|
$5.05
|
$4.75
(2)
|
Total Container Carriers
|
15,855
|
$158.64
|
$142.64
|
|
Fleet Total
|
$237.06
|
$206.93
|
|
Our Competitive Strengths
|
|
·
|
Experienced Management Team
. Our management team has significant experience in all aspects of commercial, technical, operational and financial areas of our business. Aristides J. Pittas, our Chairman and Chief Executive Officer, holds a dual graduate degree in Naval Architecture and Marine Engineering and Ocean Systems Management from the Massachusetts Institute of Technology. He has worked in various technical, shipyard and ship management capacities and since 1991 has focused on the ownership and operation of vessels carrying dry cargoes. Dr. Anastasios Aslidis, our Chief Financial Officer, holds a Ph.D. in Ocean Systems Management also from Massachusetts Institute of Technology and has over 20 years of experience, primarily as a partner at a Boston based international consulting firm focusing on investment and risk management in the maritime industry.
|
|
·
|
Cost Effective Vessel Operations
. We believe that because of the efficiencies afforded to us through Eurobulk, the strength of our management team and the quality of our fleet, we are, and will continue to be, a reliable, low cost vessel operator, without compromising our high standards of performance, reliability and safety. Despite the average age of our fleet being approximately 19 years during 2012, our total vessel operating expenses, including management fees and general and administrative expenses but excluding drydocking expenses were $6,058 per day for the year ended December 31, 2012. We consider this amount to be among the lowest of the publicly listed drybulk shipping companies in the U.S. Our technical and operating expertise allows us to efficiently manage and transport a wide range of cargoes with a flexible trade route profile, which helps reduce ballast time between voyages and minimize off-hire days. Our professional, well-trained masters, officers and on board crews further help us to control costs and ensure consistent vessel operating performance. We actively manage our fleet and strive to maximize utilization and minimize maintenance expenditures for operational and commercial utilization. For the year ended December 31, 2012, our operational fleet utilization was 99.4% up from 99.7% in 2011 while our commercial utilization rate decreased to 96.2% in 2012 from 96.8% in 2011. Our total fleet utilization rate in 2012 was 95.6%.
|
|
·
|
Strong Relationships with Customers and Financial Institutions
. We believe Eurobulk and the Pittas family have developed strong industry relationships and have gained acceptance with charterers, lenders and insurers because of their long-standing reputation for safe and reliable service and financial responsibility through various shipping cycles. Through Eurobulk, we offer reliable service and cargo carrying flexibility that enables us to attract customers and obtain repeat business. We also believe that the established customer base and reputation of Eurobulk and the Pittas family helps us to secure favorable employment for our vessels with well-known charterers.
|
|
Our Business Strategy
|
|
·
|
Renew and Expand our Fleet
. We expect to grow our fleet in a disciplined manner through timely and selective acquisitions of quality vessels. We perform in-depth technical review and financial analysis of each potential acquisition and only purchase vessels as market conditions and developments present themselves. We continue to be focused on purchasing well-maintained secondhand vessels, which should provide a significant value proposition given the depressed price levels that exist currently. However, we will also consider purchasing newbuildings or newbuilding resales if the value proposition exists at the time.
|
|
·
|
Maintain Balanced Employment
. We intend to strategically employ our fleet between between longer term time charters, i.e. charters with duration of more than a year, and shorter term time or spot charters, if possible. We actively pursue longer term time charters to obtain adequate cash flow to cover as much as possible of our fleet's fixed costs, consisting of vessel operating expenses, management fees, general and administrative expenses, interest expense and drydocking costs for the upcoming 12-month period. We also may use FFA contracts – as a substitute for time charter employment - to partly provide coverage for our drybulk vessels in order to increase the predictability of our revenues. We look to deploy the remainder of our fleet through spot charters, shipping pools or contracts of affreightment depending on our view of the direction of the markets and other tactical or strategic considerations. We believe this balanced employment strategy will provide us with more predictable operating cash flows and sufficient downside protection, while allowing us to participate in the potential upside of the spot market during periods of rising charter rates. As of April 25, 2013, on the basis of our existing time charters and pooling arrangements based on the minimum duration of such contracts, approximately 60% of our vessel capacity in 2013 and approximately 3% in 2014 are fixed, which will help protect us from market fluctuations, enable us to make principal and interest payments on our debt and pay dividends to our shareholders.
|
|
·
|
Operate a Fleet in Two Sectors
. While remaining focused on the dry cargo segment of the shipping industry, we intend to continue to develop a diversified fleet of drybulk carriers and containerships of up to Panamax size. A diversified drybulk fleet profile will allow us to better serve our customers in both major and minor drybulk trades, as well as to reduce any dependency on any one cargo, trade route or customer. We will remain focused on the smaller size ship segment of the container market, which has not experienced the same level of expansion in vessel supply that has occurred with larger containerships. A diversified fleet, in addition to enhancing the stability of our cash flows, will also help us to reduce our exposure to unfavorable developments in any one shipping sector and to benefit from upswings in any one shipping sector experiencing rising charter rates.
|
|
·
|
Optimize Use of Financial Leverage
. We will use bank debt to partly fund our vessel acquisitions and increase financial returns for our shareholders. We actively assess the level of debt we incur in light of our ability to repay that debt based on the level of cash flow generated from our balanced chartering strategy and efficient operating cost structure. Our debt repayment schedule as of December 31, 2012 calls for a reduction of more than 50% of our debt by the end of 2014. We expect this will increase our ability to borrow funds to make additional vessel acquisitions in order to grow our fleet and continue pay dividends to our shareholders.
|
|
(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)
|
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;
|
|
(iv)
|
loss of subsistence use of natural resources that are injured, destroyed or lost;
|
|
(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.
|
·
|
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.
|
Vessel
|
Next
|
Type
|
||
ANKING
|
|
June 2013
|
|
Drydocking
|
NINOS
|
August 2015
|
Special Survey
|
||
MARINOS
|
February 2013
|
Special Survey
|
||
ARISTIDES N.P.
|
February 2013
|
Special Survey
|
||
KUO HSIUNG
|
April 2013
|
Drydocking
|
||
IRINI
|
July 2013
|
Special Survey
|
||
MANOLIS P
|
May 2013
|
Drydocking
|
||
CAPTAIN COSTAS
|
January 2015
|
Drydocking
|
||
DESPINA P
|
January 2014
|
Drydocking
|
||
TIGER BRIDGE
|
December 2013
|
Drydocking
|
||
MAERSK NOUMEA
|
June 2014
|
Drydocking
|
||
MONICA P
|
March 2013
|
Special Survey
|
||
ELENI P
|
February 2014
|
Drydocking
|
||
PANTELIS
|
January 2015
|
Special Survey
|
||
AGGELIKI P
|
October 2015
|
Drydocking
|
D.
|
Property, plants and equipment
|
Item 5.
|
Operating and Financial Review and Prospects
|
A.
|
Operating results
|
Vessel
|
Charter Rate as of 12/31/2012
|
Remaining
Months Chartered
|
Remaining Life
(years)
|
Rate Year 1 (2013)
|
Rate Year 2 (2014)
|
Rate Year
3+ (2015+)
|
Breakeven Rate (USD/day)
|
Irini
|
14,000
|
3
|
Fully depreciated
|
7,395
|
7,395
|
20,601
|
Not meaningful
|
OELBengal
|
6,950
|
4
|
6.5
|
5,391
|
5,396
|
10,850
|
8,558
|
Kuo Hsiung
|
6,725
|
3
|
9.5
|
5,391
|
5,396
|
10,850
|
8,140
|
Anking
|
8,600
|
3
|
6.5
|
5,288
|
5,288
|
12,257
|
10,056
|
Aristides NP
|
10,300
|
2
|
4.5
|
7,633
|
7,633
|
22,038
|
14,665
|
Marinos
|
6,000
|
2
|
9.5
|
5,341
|
5,341
|
13,031
|
10,764
|
Manolis P
|
6,000
|
2
|
11.5
|
5,476
|
5,476
|
13,361
|
10,811
|
Cpt. Costas
|
7,000
|
3
|
8.5
|
5,854
|
5,854
|
14,283
|
11,687
|
Despina P
|
7,000
|
2
|
6.5
|
5,680
|
5,680
|
15,250
|
11,635
|
Tiger Bridge
|
5,500
|
3
|
6.5
|
6,707
|
6,707
|
16,808
|
13,389
|
Pantelis
|
11,200
|
13
|
12.5
|
8,356
|
8,356
|
24,848
|
12,575
|
Aggeliki
|
0
|
0
|
14.5
|
5,682
|
5,682
|
15,254
|
11,295
|
Eleni P
|
16,500
|
1
|
8.5
|
8,135
|
8,135
|
23,486
|
11,806
|
Monica P
|
12,375
|
9
|
11.5
|
9,035
|
9,035
|
21,731
|
10,752
|
Maersk Noumea
|
15,750
|
5
|
14.5
|
8,693
|
8,693
|
20,655
|
16,256
|
B.
|
Liquidity and Capital Resources
|
In U.S. dollars
|
Total |
Less Than
One Year
|
One to
Three Years
|
Three to
Five Years
|
More Than
Five Years
|
|||||||||||||||
Bank debt
|
$ | 61,581,000 | $ | 15,937,000 | $ | 29,474,000 | $ | 16,170,000 | $ | 0 | ||||||||||
Interest Payments (1)
|
$ | 6,941,640 | $ | 3,165,384 | $ | 3,179,209 | $ | 597,047 | $ | 0 | ||||||||||
Vessel Management fees (2)
|
$ | 26,535,721 | $ | 4,956,536 | $ | 10,411,058 | $ | 11,168,126 | $ | 0 | ||||||||||
Other Management fees (3)
|
$ | 10,188,686 | $ | 1,900,000 | $ | 4,001,828 | $ | 4,286,858 | $ | 0 |
A.
|
Directors and Senior Management
|
Name
|
Age
|
Position
|
Aristides J. Pittas
|
53
|
Chairman, President and CEO; Class A Director
|
Dr. Anastasios Aslidis
|
53
|
CFO and Treasurer; Class A Director
|
Aristides P. Pittas
|
61
|
Vice Chairman; Class A Director
|
Stephania Karmiri
|
45
|
Secretary
|
Panagiotis Kyriakopoulos
|
52
|
Class B Director
|
George Skarvelis
|
52
|
Class B Director
|
George Taniskidis
|
52
|
Class C Director
|
Gerald Turner
|
65
|
Class C Director
|
B.
|
Compensation
|
C.
|
Board Practices
|
|
·
|
We are not required under Marshall Islands law to maintain a Board of Directors with a majority of independent directors, and we may not be able to maintain a Board of Directors with a majority of independent directors in the future.
|
|
·
|
In lieu of a compensation committee comprised of independent directors, our Board of Directors will be responsible for establishing the executive officers' compensation and benefits. Under Marshall Islands law, compensation of the executive officers is not required to be determined by an independent committee.
|
|
·
|
In lieu of a nomination committee comprised of independent directors, our Board of Directors will be responsible for identifying and recommending potential candidates to become board members and recommending directors for appointment to board committees. Shareholders may also identify and recommend potential candidates to become candidates to become board members in writing. No formal written charter has been prepared or adopted because this process is outlined in our bylaws.
|
|
·
|
In lieu of obtaining an independent review of related party transactions for conflicts of interests, consistent with Marshall Islands law requirements, a related party transaction will be permitted if: (i) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors and the Board of Directors in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, or, if the votes of the disinterested directors are insufficient to constitute an act of the Board of Directors as defined in Section 55 of the Marshall Islands Business Corporations Act, by unanimous vote of the disinterested directors; or (ii) the material facts as to his relationship or interest are disclosed and the shareholders are entitled to vote thereon, and the contract or transaction is specifically approved in good faith by a simple majority vote of the shareholders; or (iii) the contract or transaction is fair as to the Company as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof or the shareholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.
|
|
·
|
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, 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. In addition, our bylaws provide that shareholders must give us advance notice to properly introduce any business at a meeting of the shareholders. Our bylaws also provide that shareholders may designate in writing a proxy to act on their behalf.
|
|
·
|
In lieu of holding regular meetings at which only independent directors are present, our entire Board of Directors, a majority of whom are independent, will hold regular meetings as is consistent with the laws of the Republic of the Marshall Islands.
|
|
·
|
The Board of Directors adopted a new equity incentive plan in May 2010. Shareholder approval was not necessary since Marshall Islands law permits the Board of Directors to take these actions. The Company has filed the appropriate documentation with the NASDAQ Global Select Market reflecting this event.
|
|
·
|
As a foreign private issuer, we are not required to obtain shareholder approval if any of our directors, officers or 5% or greater shareholders has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the company or assets to be acquired or in the consideration to be paid in the transaction(s) and the present or potential issuance of common stock, or securities convertible into or exercisable for common stock, could result in an increase in outstanding common stock or voting power of 5% or more.
|
|
·
|
In lieu of obtaining shareholder approval prior to the issuance of designated securities, the Company will comply with provisions of the Marshall Islands Business Corporations Act, providing that the Board of Directors approves share issuances.
|
D.
|
Employees
|
E.
|
Share Ownership
|
A.
|
Major Stockholders
|
Name of Beneficial Owner(1)
|
Number of Shares
of Voting Stock
Beneficially
Owned
|
Percent of
Voting Stock (13)
|
||||||
Friends Investment Company Inc.(2)
|
19,830,956 | 43.8 | % | |||||
New Generation Advisors, LLC(3)
|
3,225,895 | 7.1 | % | |||||
Aristides J. Pittas(4)
|
488,076 | 1.1 | % | |||||
George Skarvelis(5)
|
42,540 | * | ||||||
George Taniskidis(6)
|
75,540 | * | ||||||
Gerald Turner(7)
|
63,028 | * | ||||||
Panagiotis Kyriakopoulos(8)
|
71,540 | * | ||||||
Aristides P. Pittas(9)
|
100,693 | * | ||||||
Anastasios Aslidis(10)
|
340,000 | * | ||||||
Stephania Karmiri(11)
|
— | * | ||||||
Symeon Pariaros(12)
|
18,420 | * | ||||||
All directors and officers and 5% owners as a group
|
24,256,688 | 52.7 | % |
*
|
Indicates less than 1.0%.
|
(1)
|
Beneficial ownership is determined in accordance with the Rule 13d-3(a) of the Securities Exchange Act of 1934, as amended, and generally includes voting or investment power with respect to securities. Except as subject to community property laws, where applicable, the person named above has sole voting and investment power with respect to all shares of common stock shown as beneficially owned by him/her.
|
(2)
|
Includes 19,830,956 shares of common stock held of record by Friends. A majority of the shareholders of Friends are members of the Pittas family. Investment power and voting control by Friends resides in its Board of Directors which consists of five directors, a majority of whom are members of the Pittas family. Actions by Friends may be taken by a majority of the members on its Board of Directors.
|
(3)
|
As disclosed on Schedule 13G filed on February 12, 2013.
|
(4)
|
Does not include 3,547,611 shares of common stock held of record by Friends, by virtue of ownership interest in Friends by Mr. Pittas and members of his family. Mr. Pittas disclaims beneficial ownership except to the extent of his pecuniary interest. Includes 43,560 shares vesting on July 1, 2013, 49,500 shares vesting on November 16, 2013 and 49,500 shares vesting on November 16, 2014.
|
(5)
|
Does not include 891,276 shares of common stock held of record by Friends, by virtue of Mr. Skarvelis' ownership interest in Friends. Mr. Skarvelis disclaims beneficial ownership except to the extent of his pecuniary interest. Includes 4,620 shares vesting on July 1, 2013, 5,250 shares vesting on November 16, 2013 and 5,250 shares vesting on November 16, 2014.
|
(6)
|
Does not include 79,153 shares of common stock held of record by Friends, by virtue of Mr. Taniskidis' ownership in Friends. Mr. Taniskidis disclaims beneficial ownership except to the extent of his pecuniary interest. Includes 4,620 shares vesting on July 1, 2013, 5,250 shares vesting on November 16, 2013 and 5,250 shares vesting on November 16, 2014.
|
(7)
|
Does not include 294,222 shares of common stock held of record by Friends, by virtue of Mr. Turner's ownership interest in Friends. Mr. Turner disclaims beneficial ownership except to the extent of his pecuniary interest. Includes 4,620 shares vesting on July 1, 2013, 5,250 shares vesting on November 16, 2013 and 5,250 shares vesting on November 16, 2014.
|
(8)
|
Does not include 154,950 shares of common stock held of record by Friends, by virtue of Mr. Kyriakopoulos' ownership in Friends. Mr. Kyriakopoulos disclaims beneficial ownership except to the extent of his pecuniary interest. Includes 4,620 shares vesting on July 1, 2013, 5,250 shares vesting on November 16, 2013 and 5,250 shares vesting on November 16, 2014.
|
(9)
|
Does not include 3,250,026 shares of common stock held of record by Friends, by virtue of ownership interest in Friends Mr. Pittas and members of his family. Mr. Pittas disclaims beneficial ownership except to the extent of his pecuniary interest. Includes 11,880 shares vesting on July 1, 2013, 13,500 shares vesting on November 16, 2013 and 13,500 shares vesting on November 16, 2014.
|
(10)
|
Includes 29,700 shares vesting on July 1, 2013, 33,750 shares vesting on November 16, 2013 and 33,750 shares vesting on November 16, 2014.
|
(11)
|
Does not include 3,463 shares of common stock held of records by Friends, by virtue of Mrs. Karmiri's ownership in Friends. Mrs. Karmiri disclaims beneficial ownership except to the extent of her pecuniary interest.
|
(12)
|
Includes 4,620 shares vesting on July 1, 2013, 5,250 shares vesting on November 16, 2013 and 5,250 shares vesting on November 16, 2014.
|
(13)
|
Voting stock includes 626,400 unvested shares in addition to the 45,319,605 issued and outstanding shares of the Company as of April 25, 2013. Percentages of Friends Investment Company, Inc. and New Generation Advisors, LLC are shown on the basis of issued and outstanding shares.
|
C.
|
Interests of Experts and Counsel
|
Item 8.
|
Financial Information
|
A.
|
Consolidated Statements and Other Financial Information
|
B.
|
Significant Changes
|
Item 9.
|
The Offer and Listing
|
A.
|
Offer and Listing Details
|
Period
|
Low
|
High
|
Year Ended Dec. 31, 2008
|
12.00
|
16.80
|
Year Ended Dec. 31, 2009
|
3.51
|
6.05
|
Year Ended Dec. 31, 2010
|
3.31
|
4.50
|
Year Ended Dec. 31, 2011
|
2.26
|
4.85
|
1
st
quarter 2011
|
3.56
|
4.83
|
2
nd
quarter 2011
|
4.26
|
4.85
|
3
rd
quarter 2011
|
2.86
|
4.40
|
4
th
quarter 2011
|
2.26
|
3.48
|
Year Ended Dec. 31, 2012
|
0.86
|
3.05
|
1
st
quarter 2012
|
2.28
|
3.05
|
2
nd
quarter 2012
|
1.06
|
2.04
|
3
rd
quarter 2012
|
1.06
|
1.26
|
4
th
quarter 2012
|
0.86
|
1.31
|
October 2012
|
1.10
|
1.31
|
November 2012
|
1.03
|
1.16
|
December 2012
|
0.86
|
1.03
|
Year Ended Dec. 31, 2013(*)
|
0.93
|
1.16
|
1
st
quarter 2013
|
0.95
|
1.16
|
January 2013
|
0.93
|
1.11
|
February 2013
|
0.99
|
1.04
|
March 2013
|
0.95
|
1.16
|
April 2013 (*)
|
1.02
|
1.13
|
B.
|
Plan of Distribution
|
C.
|
Markets
|
D.
|
Selling Shareholders
|
E.
|
Dilution
|
F.
|
Expenses of the Issue
|
Item 10.
|
Additional Information
|
A.
|
Share Capital
|
B.
|
Memorandum and Articles of Association
|
D.
|
Exchange Controls
|
E.
|
Taxation
|
|
·
|
we are organized in a foreign country, or our country of organization, that grants an "equivalent exemption" to corporations organized in the United States; and
|
|
·
|
more than 50% of the value of our stock is owned, directly or indirectly, by "qualified shareholders," individuals 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, which we refer to as the "50% Ownership Test," or
|
|
·
|
our stock is "primarily and regularly traded on an established securities market" 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."
|
|
·
|
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 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.
|
|
·
|
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 our assets during such taxable year produce, or are held for the production of, passive income, which we refer to as "passive assets".
|
|
·
|
such gain is effectively connected with the Non-U.S. Holder's conduct of a trade or business in the United States, if the Non-U.S. Holder is entitled to the benefits of a United States income tax treaty with respect to that gain, that gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder 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 during the taxable year of disposition and other conditions are met.
|
|
·
|
fails to provide an accurate taxpayer identification number;
|
|
·
|
is notified by the IRS that he failed to report all interest or dividends required to be shown on your United States federal income tax returns; or
|
|
·
|
in certain circumstances, fails to comply with applicable certification requirements.
|
G.
|
Statement by experts
|
H.
|
Documents on display
|
I.
|
Subsidiary Information
|
Item 11.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Year Ended December 31,
|
Amount in $ (loans)
|
Amount in $ (swap)
|
||||||
2013
|
511,000 | (482,000 | ) | |||||
2014
|
346,000 | (228,000 | ) | |||||
2015
|
224,000 | (100,000 | ) | |||||
2016
|
101,000 | (5,500 | ) | |||||
2017 and thereafter
|
20,000 | (0 | ) |
Year Ended December 31,
|
Amount in $ (revenues)
|
|||
2013
|
2,450,000 | |||
2014
|
5,100,000 | |||
2015 and thereafter
|
5,250,000 |
Item 12.
|
Description of Securities Other than Equity Securities
|
Item 13.
|
Defaults, Dividend Arrearages and Delinquencies
|
Item 14.
|
Material Modifications to the Rights of Security Holders and Use of Proceeds
|
Item 15.
|
Controls and Procedures
|
2011
(dollars in thousands)
|
2012
(dollars in thousands)
|
|||||||
Audit Fees
|
$ | 472 | $ | 345 | ||||
Audit related fees
|
-
|
-
|
||||||
Tax fees
|
-
|
-
|
||||||
All other fees / expenses
|
- | - | ||||||
Total
|
$ | 472 | $ | 345 |
Item 17.
|
Financial Statements
|
Item 18.
|
Financial Statements
|
1.1 |
Amended and Restated Articles of Incorporation of Euroseas Ltd.(12)
|
||
1.2 |
Bylaws of Euroseas Ltd.(11)
|
||
1.3 |
Amendment to Bylaws of Euroseas Ltd.(11)
|
||
2.1 |
Specimen Common Stock Certificate(7)
|
||
2.2 |
Form of Securities Purchase Agreement(1)
|
||
2.3 |
Form of Registration Rights Agreement(1)
|
||
2.4 |
Form of Warrant(1)
|
||
2.5 |
Registration Rights Agreement between Euroseas Ltd. and Friends Investment Company Inc., dated November 2, 2005(2)
|
||
2.6
|
Registration Rights Agreement among Euroseas Ltd., Paros Ltd., All Seas Investors I Ltd., All Seas Investors II Ltd. and
All Seas Investors III LP
dated March 25, 2010(11)
|
||
2.7 |
Form of Subscription Rights Certificate(13)
|
||
3.1
|
Shareholder Voting Agreement among Euroseas Ltd., Paros Ltd., All Seas Investors I Ltd., All Seas Investors II Ltd.,
Seas Investors III LP, Friends Investment Company Inc. and Aristides J. Pittas dated March 25, 2010(11)
|
||
4.1 |
Form of Lock-up Agreement(1)
|
||
4.2 |
Form of Standard Ship Management Agreement(1)
|
||
4.3 |
Agreement between Eurobulk Ltd. and Eurochart S.A., for the provision of exclusive brokerage services, dated December 20, 2004(1)
|
||
4.4 |
Form of Current Time Charter(1)
|
||
4.5
|
|
Amended and Restated Master Management Agreement between Euroseas Ltd. and Eurobulk Ltd. dated as of July 17, 2007,
as amended February 7, 2008 (6)
|
|
4.6
|
Addendum No. 1 to Amendment to Amended and Restated Master Management Agreement between Euroseas Ltd. and Eurobulk Ltd.
dated as of February 7, 2009 (9)
|
||
4.7
|
Loan Agreement between Xenia International Corp., as borrower, and Fortis Bank N.V./S.A., Athens Branch and others, as lenders,
for the amount of
US$8,250,000 dated June 30, 2006(3)
|
||
4.8
|
Loan Agreement between Prospero Maritime Inc., as borrower, and Calyon, as lender, for the amount of US$15,500,000 dated
August 30, 2006(3)
|
||
4.9 |
Euroseas 2007 Equity Incentive Plan(8)
|
||
4.10
|
Loan Agreement between Xingang Shipping Ltd., as borrower, and HSBC Bank plc, as lender, for the amount of US$20,000,000 dated
November 14, 2006(4)
|
||
4.11
|
Amendment to Loan Agreement among Xingang Shipping Ltd., as borrower, HSBC Bank plc, as lender, and Diana Trading Ltd.
and Euroseas Ltd., as corporate guarantors, dated April 14, 2010(11)
|
||
4.12 |
Form of Right of First Refusal(5)
|
||
4.13 |
Form of Advisory Agreement(5)
|
||
4.14
|
Loan Agreement between Manolis Shipping Limited, as borrower, and EFG Eurobank Ergasias S.A., as lender, for the amount of
US$10,000,000 dated June 7, 2007(6)
|
||
4.15
|
Supplemental Agreement to Loan Agreement between Manolis Shipping Limited, as borrower, and EFG Eurobank Ergasias S.A.,
as lender, dated August 5, 2009(11)
|
||
4.16
|
Loan Agreement between Trust Navigation Corp., as borrower and EFG Eurobank Ergasias S.A., as lender, for the amount of
US$15,000,000 dated October 29, 2007 (6)
|
||
4.17
|
Amendment to Loan Agreement between Trust Navigation Corp., as borrower and EFG Eurobank Ergasias S.A., as lender,
dated December 29, 2008(9)
|
4.18
|
Amendment to Loan Agreement between Trust Navigation Corp., as borrower, and EFG Eurobank Ergasias S.A, as lender,
dated October 26, 2010(12)
|
||
4.19 |
Form of Senior Security Debt Indenture(7)
|
||
4.20 |
Form of Subordinated Debt Security Indenture(7)
|
||
4.21
|
Loan Agreement between Saf-Concord Shipping Ltd., as borrower and EFG Eurobank Ergasias S.A., as lender, for the amount of
US$10,000,000 dated January 9, 2009(9)
|
||
4.22 |
Loan Agreement between Eleni Shipping Ltd., as borrower and Calyon, as lender, for the amount of US$10,000,000 dated April 30, 2009(9)
|
||
4.23 |
Shareholders Rights Agreement between Euroseas Ltd. and American Stock Transfer and Trust Company, LLC dated May 18, 2009(10)
|
||
4.24
|
Amendment to Shareholders Rights Agreement between Euroseas Ltd. and American Stock Transfer and Trust Company, LLC
dated March 25, 2010(11)
|
||
4.25
|
Loan Agreement between Pantelis Shipping Corp., as borrower, and HSBC Bank plc, as lender, for the amount of US$13,000,000
dated December 14, 2009(11)
|
||
4.26 |
Amendment to Loan Agreement between Pantelis Shipping Corp., as borrower, and HSBC Bank plc, as lender, dated April 14, 2010 (11)
|
||
4.27
|
Limited Liability Company Agreement for Euromar LLC, among Euroseas Ltd., Paros Ltd., All Seas Investors I Ltd.,
All Seas Investors II Ltd. and All Seas Investors III LP dated March 25, 2010(11)
|
||
4.28
|
First Amendment to Limited Liability Company Agreement for Euromar LLC, among Euroseas Ltd., Paros Ltd., All Seas Investors I Ltd.,
All Seas Investors II Ltd. and All Seas Investors III LP dated April 26, 2012(14)
|
||
4.29
|
Management Agreement among Euromar LLC, the vessel owning subsidiaries of Euromar LLC, Euroseas Ltd., Eurobulk Ltd.
and Eurochart S.A.
dated March 25, 2010(11)
|
||
4.30
|
Agreement Regarding Vessel Opportunities among Euroseas Ltd., Eurobulk Ltd., Eurochart S.A., Aristides J. Pittas and Euromar LLC dated
March 25, 2010(11)
|
||
4.31
|
First Amendment to Agreement Regarding Vessel Opportunities among Euroseas Ltd., Eurobulk Ltd., Eurochart S.A., Aristides J. Pittas
and Euromar LLC dated April 26, 2012(14)
|
||
4.32 |
Euroseas 2010 Equity Incentive Plan(11)
|
||
4.33
|
Loan Agreement between Noumea Shipping Ltd, as borrower, and Crédit Agricole Corporate and Investment Bank, as lender, for the
amount of US$20,000,000 dated December 28, 2010(12)
|
||
4.34
|
Loan Agreement between Aggeliki Shipping Ltd., as borrower, and DVB Bank SE, as lender, for the amount of US$8,500,000
dated November 5, 2010(12)
|
||
4.35
|
Amendment to Loan Agreement between SAF Concord Shipping Ltd., as borrower, and EFG Eurobank Ergasias S.A.,
as lender, dated October 29, 2012 (15)
|
||
4.36
|
Amendment to Loan Agreement between Manolis Shipping Ltd., SAF Concord Shipping Ltd, Tiger Navigation Corp. and
Alterwall Business Inc., as borrowers, and EFG Eurobank Ergasias S.A., as lender, dated October 29, 2012 (15)
|
||
4.37
|
Amendment to Loan Agreement between Xingang Shipping Ltd. and Diana Shipping Ltd., as borrowers, and HSBC Bank plc, as lender,
dated April 5, 2013(15)
|
||
4.38
|
Second Amendment to Limited Liability Company Agreement for Euromar LLC, among Euroseas Ltd., Paros Ltd., All Seas Investors I Ltd.,
All Seas Investors II Ltd. and All Seas Investors III LP dated March 18, 2013 (15)
|
||
8.1 |
Subsidiaries of the Registrant (14)
|
||
12.1 |
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer(15)
|
||
12.2 |
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer(15)
|
||
13.1 |
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(15)
|
||
13.2 |
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(15)
|
||
15.1 |
Consent of Deloitte, Hadjipavlou, Sofianos & Cambanis S.A.(15)
|
(1)
|
Filed as an Exhibit to the Company's Registration Statement (File No. 333-129145) on October 20, 2005.
|
(2)
|
Filed as an Exhibit to the Company's Amendment No.1 to Registration Statement (File No. 333-129145) on December 5, 2005.
|
(3)
|
Filed as an Exhibit to the Company's Post-Effective Amendment No. 1 to Registration Statement (File No. 333-12945) on September 12, 2006.
|
(4)
|
Filed as an Exhibit to the Company's Registration Statement (File No. 333-138780) on November 17, 2006.
|
(5)
|
Filed as an Exhibit to the Company's Amendment No. 4 to Registration Statement (File No. 333-138780) on January 29, 2007.
|
(6)
|
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 13, 2008.
|
(7)
|
Filed as an Exhibit to the Company's Registration Statement (File No. 333-152089) on July 2, 2008.
|
(8)
|
Filed as an Exhibit to the Company's Post-Effective Amendment No. 1 to Registration Statement (File No. 333-148124) on July 17, 2008.
|
(9)
|
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 18, 2009.
|
(10)
|
Filed as an Exhibit to the Company's Form 6-K (File No. 001-33283) on May 18, 2009.
|
(11)
|
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 28, 2010.
|
(12)
|
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 27, 2011.
|
(13)
|
Filed as an Exhibit to the Company's Form 6-K (File No. 001-33283) on May 25, 2012.
|
(14)
|
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on April 27, 2012.
|
(15)
|
Filed herewith.
|
Pages
|
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets as of December 31, 2011 and 2012
|
F-3
|
Consolidated Statements of Operations for the Years Ended
|
|
December 31, 2010, 2011 and 2012
|
F-5
|
Consolidated Statements of Shareholders’ Equity for the Years Ended
|
|
December 31, 2010, 2011 and 2012
|
F-6
|
Consolidated Statements of Cash Flows for the Years Ended
|
|
December 31, 2010, 2011 and 2012
|
F-7
|
Notes to the Consolidated Financial Statements
|
F-9
|
Notes
|
December 31, 2011
|
December 31, 2012
|
||||||||||
Assets
|
||||||||||||
Current assets
|
||||||||||||
Cash and cash equivalents
|
31,204,863 | 33,374,960 | ||||||||||
Trade accounts receivable, net
|
1,370,886 | 1,425,171 | ||||||||||
Other receivables
|
2,324,131 | 2,310,111 | ||||||||||
Inventories
|
3 | 2,606,535 | 1,812,636 | |||||||||
Due from related companies
|
8 | 208,704 | 4,948,443 | |||||||||
Restricted cash
|
9 | 870,111 | 926,011 | |||||||||
Trading securities
|
15 | 27,473 | - | |||||||||
Prepaid expenses
|
264,884 | 273,080 | ||||||||||
Total current assets
|
38,877,587 | 45,070,412 | ||||||||||
Fixed assets
|
||||||||||||
Vessels, net
|
4 | 237,063,878 | 206,934,746 | |||||||||
Long-term assets
|
||||||||||||
Restricted cash
|
9 | 5,050,000 | 9,000,000 | |||||||||
Deferred charges, net
|
5 | 697,951 | 318,578 | |||||||||
Investment in joint venture
|
17 | 14,458,752 | 16,989,061 | |||||||||
Total long-term assets
|
257,270,581 | 233,242,385 | ||||||||||
Total assets
|
296,148,168 | 278,312,797 | ||||||||||
Liabilities and shareholders’ equity
|
||||||||||||
Current liabilities
|
||||||||||||
Long-term debt, current portion
|
9 | 13,332,000 | 15,937,000 | |||||||||
Trade accounts payable
|
1,886,766 | 2,438,716 | ||||||||||
Accrued expenses
|
6 | 1,659,594 | 1,143,626 | |||||||||
Accrued dividends
|
12 | 47,525 | 36,424 | |||||||||
Deferred revenues
|
2,268,038 | 1,093,317 | ||||||||||
Derivatives
|
15, 16 | 1,907,088 | 1,718,438 | |||||||||
Total current liabilities
|
21,101,011 | 22,367,521 |
Notes
|
December 31, 2011
|
December 31, 2012
|
||||||||||
Long-term liabilities
|
||||||||||||
Long-term debt, net of current portion
|
9 | 61,581,000 | 45,644,000 | |||||||||
Derivatives
|
15, 16 | 1,544,409 | 675,130 | |||||||||
Total long-term liabilities
|
63,125,409 | 46,319,130 | ||||||||||
Total liabilities
|
84,226,420 | 68,686,651 | ||||||||||
Shareholders’ equity
|
||||||||||||
Common stock (par value $0.03, 200,000,000 shares authorized, 31,167,211 and 45,319,605 issued and outstanding)
|
935,017 | 1,359,588 | ||||||||||
Preferred shares (par value $0.01, 20,000,000 shares authorized, no shares issued and outstanding)
|
- | - | ||||||||||
Additional paid-in capital
|
236,843,470 | 251,758,459 | ||||||||||
Accumulated deficit
|
(25,856,739 | ) | (43,491,901 | ) | ||||||||
Total shareholders’ equity
|
211,921,748 | 209,626,146 | ||||||||||
Total liabilities and shareholders’ equity
|
296,148,168 | 278,312,797 |
Notes
|
2010
|
2011
|
2012
|
|||||||||||||
Revenues
|
||||||||||||||||
Voyage revenue
|
7 | 54,422,489 | 64,129,511 | 54,921,697 | ||||||||||||
Related party revenue
|
17 | - | 240,000 | 240,000 | ||||||||||||
Commissions
(including $612,998,$766,304 and $641,104, respectively, to related party)
|
8, 14 | (1,944,473 | ) | (2,972,967 | ) | (2,673,703 | ) | |||||||||
Net revenue
|
52,478,016 | 61,396,544 | 52,487,994 | |||||||||||||
Operating expenses
|
||||||||||||||||
Voyage expenses
|
14 | 1,596,569 | 777,902 | 1,329,668 | ||||||||||||
Vessel operating expenses
(including $417,523, $392,731 and $347,840, respectively, to related party)
|
8, 14 | 21,507,192 | 26,249,339 | 25,075,139 | ||||||||||||
Dry-docking expenses
|
6,537,733 | 3,148,111 | 1,616,425 | |||||||||||||
Vessel depreciation
|
4 | 17,979,750 | 18,348,556 | 17,385,608 | ||||||||||||
Related party management fees
|
8 | 4,892,006 | 5,810,095 | 4,984,098 | ||||||||||||
Other general and administrative expenses
(including $1,165,000, $1,225,000 and $1,850,000, respectively, to related party)
|
8, 12 | 3,026,941 | 2,986,507 | 3,661,426 | ||||||||||||
Net loss on sale of vessels
(including $43,823 to related party)
|
4 | - | - | 8,568,234 | ||||||||||||
Other income
|
18 | (2,352,946 | ) | (735,707 | ) | (254,604 | ) | |||||||||
Total operating expenses
|
53,187,245 | 56,584,803 | 62,365,994 | |||||||||||||
Operating (loss)/income
|
(709,229 | ) | 4,811,741 | (9,878,000 | ) | |||||||||||
Other income/(expenses)
|
||||||||||||||||
Interest and other financing costs
|
(1,498,216 | ) | (2,191,235 | ) | (1,977,226 | ) | ||||||||||
Loss on derivatives, net
|
16 | (4,221,817 | ) | (1,498,122 | ) | (637,403 | ) | |||||||||
Foreign exchange gain/(loss)
|
(3,200 | ) | (17,122 | ) | 8,321 | |||||||||||
(Loss)/gain on trading securities
|
(173,375 | ) | (235,750 | ) | 20,373 | |||||||||||
Interest income
|
538,820 | 248,892 | 484,886 | |||||||||||||
Other expenses, net
|
(5,357,788 | ) | (3,693,337 | ) | (2,101,049 | ) | ||||||||||
Equity loss in joint venture
|
17 | (538,833 | ) | (2,415 | ) | (1,219,692 | ) | |||||||||
Net (loss)/income
|
(6,605,850 | ) | 1,115,989 | (13,198,741 | ) | |||||||||||
(Loss)/Earnings per share - basic
|
13 | (0.21 | ) | 0.04 | (0.34 | ) | ||||||||||
Weighted average number of shares outstanding during the year, basic
|
13 | 31,636,633 | 31,794,381 | 38,950,100 | ||||||||||||
(Loss)/Earnings per share - diluted
|
13 | (0.21 | ) | 0.04 | (0.34 | ) | ||||||||||
Weighted average number of shares outstanding during the year,
diluted
|
13 | 31,636,633 | 31,846,080 | 38,950,100 |
Number
of
Shares
|
Common
Stock
Amount
|
Preferred
Shares
Amount
|
Additional Paid - in
Capital
|
Accumulated Deficit
|
Total
|
|||||||||||||||||||
Balance,
January 1, 2010
|
30,849,711 | 925,492 | - | 235,588,391 | (5,060,620 | ) | 231,453,263 | |||||||||||||||||
Net loss
|
(6,605,850 | ) | (6,605,850 | ) | ||||||||||||||||||||
Issuance of restricted shares for stock incentive award and share-based compensation
|
152,500 | 4,575 | - | 691,540 | - | 696,115 | ||||||||||||||||||
Dividends declared ($0.22 per share)
|
- | - | (6,848,536 | ) | (6,848,536 | ) | ||||||||||||||||||
Balance,
December 31, 2010
|
31,002,211 | 930,067 | - | 236,279,931 | (18,515,006 | ) | 218,694,992 | |||||||||||||||||
Net income
|
1,115,989 | 1,115,989 | ||||||||||||||||||||||
Issuance of restricted shares for stock incentive award and share-based compensation
|
165,000 | 4,950 | - | 563,539 | - | 568,489 | ||||||||||||||||||
Dividends declared ($0.27 per share)
|
- | - | (8,457,722 | ) | (8,457,722 | ) | ||||||||||||||||||
Balance,
December 31, 2011
|
31,167,211 | 935,017 | - | 236,843,470 | (25,856,739 | ) | 211,921,748 | |||||||||||||||||
Net loss
|
(13,198,741 | ) | (13,198,741 | ) | ||||||||||||||||||||
Issuance of shares in “Rights Offering Program, net of issuance costs”
|
13,852,094 | 415,562 | - | 14,252,617 | - | 14,668,179 | ||||||||||||||||||
Issuance of restricted shares for stock incentive award and share-based compensation
|
300,300 | 9,009 | - | 662,372 | - | 671,381 | ||||||||||||||||||
Dividends declared ($0.125 per share)
|
- | - | (4,436,421 | ) | (4,436,421 | ) | ||||||||||||||||||
Balance,
December 31, 2012
|
45,319,605 | 1,359,588 | - | 251,758,459 | (43,491,901 | ) | 209,626,146 |
2010
|
2011
|
2012
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net (loss) / income
|
(6,605,850 | ) | 1,115,989 | (13,198,741 | ) | |||||||
Adjustments to reconcile net income / (loss) to net cash provided by operating activities:
|
||||||||||||
Depreciation of vessels
|
17,979,750 | 18,348,556 | 17,385,608 | |||||||||
Amortization of deferred charges
|
108,569 | 144,815 | 135,981 | |||||||||
Amortization of fair value of time charters
|
(2,106,416 | ) | (1,318,211 | ) | - | |||||||
Loss on sale of vessel
|
- | - | 8,568,234 | |||||||||
Share-based compensation
|
696,117 | 568,488 | 671,381 | |||||||||
Loss / (gain) on trading securities
|
173,375 | 235,750 | (20,373 | ) | ||||||||
Proceeds from the sale of trading securities
|
- | - | 47,846 | |||||||||
Unrealized loss / (gain) on derivatives
|
(8,223,804 | ) | 650,853 | (1,057,929 | ) | |||||||
Loss in investment in joint venture
|
538,833 | 2,415 | 1,219,692 | |||||||||
Changes in operating assets and liabilities:
|
||||||||||||
(Increase)/decrease in:
|
||||||||||||
Trade accounts receivable
|
86,952 | 192,875 | (54,285 | ) | ||||||||
Prepaid expenses
|
(85,896 | ) | 6,149 | (8,196 | ) | |||||||
Other receivables
|
(6,454,329 | ) | 2,576,022 | 14,020 | ||||||||
Inventories
|
80,982 | (818,279 | ) | 793,899 | ||||||||
Other deposits
|
12,376,119 | (246,000 | ) | - | ||||||||
Due from related companies
|
- | (208,704 | ) | (4,739,739 | ) | |||||||
Increase/(decrease) in:
|
||||||||||||
Due to related companies
|
178,393 | (1,594,773 | ) | - | ||||||||
Trade accounts payable
|
2,207,566 | (2,064,168 | ) | 476,397 | ||||||||
Accrued expenses
|
932,075 | (427,807 | ) | (545,968 | ) | |||||||
Deferred revenue
|
866,553 | 153,703 | (1,174,721 | ) | ||||||||
Net cash provided by operating activities
|
12,748,989 | 17,317,673 | 8,513,106 | |||||||||
Cash flows from investing activities:
|
||||||||||||
Purchase of vessels including improvements
|
(16,121,360 | ) | - | - | ||||||||
Contributions to joint venture
|
(15,000,000 | ) | - | (3,750,000 | ) | |||||||
Insurance proceeds
|
- | 1,793,832 | - | |||||||||
Change in restricted cash
|
1,914,516 | 102,603 | (4,005,900 | ) | ||||||||
Proceeds from sale of vessel
|
- | - | 4,250,843 | |||||||||
Net cash (used in)/provided by investing activities
|
(29,206,844 | ) | 1,896,435 | (3,505,057 | ) | |||||||
2010
|
2011
|
2012
|
||||||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from shares issued
|
- | - | 15,237,303 | |||||||||
Offering expenses paid
|
(99,814 | ) | (148,392 | ) | (295,733 | ) | ||||||
Dividends paid
|
(6,863,112 | ) | (8,442,371 | ) | (4,447,522 | ) | ||||||
Loan arrangement fees paid
|
(160,250 | ) | (220,000 | ) | - | |||||||
Proceeds from long-term debt
|
28,500,000 | - | - | |||||||||
Repayment of long-term debt
|
(11,630,000 | ) | (13,472,000 | ) | (13,332,000 | ) | ||||||
Net cash provided by/(used in) financing activities
|
9,746,824 | (22,282,763 | ) | (2,837,952 | ) | |||||||
Net (decrease)/increase in cash and cash equivalents
|
(6,711,031 | ) | (3,068,655 | ) | 2,170,097 | |||||||
Cash and cash equivalents at beginning of year
|
40,984,549 | 34,273,518 | 31,204,863 | |||||||||
Cash and cash equivalents at end of year
|
34,273,518 | 31,204,863 | 33,374,960 | |||||||||
Supplemental cash flow information
Cash paid for interest
|
1,328,563 | 2,080,479 | 1,839,322 | |||||||||
Non cash financing and investing activities :
|
||||||||||||
Loan arrangement fees and offering costs charges
|
220,000 | 243,392 | 30,000 | |||||||||
Change in accrued dividends
|
(14,575 | ) | 15,350 | 11,101 |
·
|
Oceanopera Shipping Ltd. incorporated in Cyprus on June 26, 1995, owner of the Cyprus flag 34,750 DWT bulk carrier M/V “Nikolaos P”, which was built in 1984 and acquired on July 22, 1996. M/V “Nikolaos P” was sold in February 2009.
|
·
|
Alcinoe Shipping Ltd. incorporated in Cyprus on March 20, 1997, owner of the Cyprus flag 26,354 DWT bulk carrier M/V “Pantelis P”, which was built in 1981 and acquired on June 4, 1997. M/V “Pantelis P” was sold on May 31, 2006. On February 22, 2007, Alcinoe Shipping Ltd. acquired the 38,691 DWT Cyprus flag drybulk carrier M/V “Gregos”, which was built in 1984. On June 13, 2007, M/V Gregos was transferred to Gregos Shipping Limited incorporated in the Marshall Islands and its flag was changed to the flag of the Marshall Islands. M/V “Gregos” was sold in December 2009.
|
·
|
Allendale Investment S.A. incorporated in Panama on January 22, 2002, owner of the Panama flag 18,154 DWT / 1,169 twenty-foot equivalent (“TEU” – a measure of carrying capacity in containers) container carrier M/V “Kuo Hsiung”, which was built in 1993 and acquired on May 13, 2002.
|
·
|
Alterwall Business Inc. incorporated in Panama on January 15, 2001, owner of the Panama flag 18,253 DWT / 1,169 TEU container carrier M/V “Ninos” (previously named M/V “Quingdao I”) which was built in 1990 and acquired on February 16, 2001.
|
·
|
Diana Trading Ltd. incorporated in the Marshall Islands on September 25, 2002, owner of the Marshall Islands flag 69,734 DWT bulk carrier M/V “Irini”, which was built in 1988 and acquired on October 15, 2002.
|
·
|
Salina Shipholding Corp., incorporated in the Marshall Islands on October 20, 2005, owner of the Marshall Islands flag 29,693 DWT / 2,098 TEU container carrier M/V “Artemis”, which was built in 1987 and acquired on November 25, 2005. M/V “Artemis” was sold in December 2009.
|
·
|
Xenia International Corp., incorporated in the Marshall Islands on April 6, 2006, owner of the Marshall Islands flag 22,568 DWT / 950 TEU multipurpose M/V “Tasman Trader”, which was built in 1990 and acquired on April 27, 2006. On March 7, 2012, the vessel was renamed M/V “Anking”.
|
·
|
Prospero Maritime Inc., incorporated in the Marshall Islands on July 21, 2006, owner of the Marshall Islands flag 69,268 DWT dry bulk M/V “Aristides N.P.”, which was built in 1993 and acquired on September 4, 2006.
|
·
|
Xingang Shipping Ltd., incorporated in Liberia on October 16, 2006, owner of the Liberian flag 23,596 DWT / 1,599 TEU container carrier M/V “YM Xingang I” , which was built in February 1993 and acquired on November 15, 2006. On July 11, 2009, the vessel was renamed M/V “Mastro Nicos” and on November 5, 2009, it was renamed M/V “YM Port Kelang”. On October 25, 2011 the vessel was renamed M/V “Marinos”.
|
·
|
Manolis Shipping Ltd., incorporated in the Marshall Islands on March 16, 2007, owner of the Marshall Islands flag 20,346 DWT / 1,452 TEU container carrier M/V “Manolis P”, which was built in 1995 and acquired on April 12, 2007.
|
·
|
Eternity Shipping Company, incorporated in the Marshall Islands on May 17, 2007, owner of the Marshall Islands flag 30,007 DWT / 1,742 TEU container carrier M/V “Clan Gladiator”, which was built in 1992 and acquired on June 13, 2007. On May 9, 2008, M/V “Clan Gladiator” was renamed M/V “OEL Transworld” and on August 31, 2009 the vessel was renamed M/V “Captain Costas”.
|
·
|
Emmentaly Business Inc., incorporated in Panama on July 4, 2007, owner of the Panamanian flag 33,667 DWT / 1,932 TEU container carrier M/V “Jonathan P”, which was built in 1990 and acquired on August 7, 2007. On April 16, 2008, M/V “Jonathan P” was renamed M/V “OEL Integrity”; on March 5, 2009, the vessel was renamed again M/V “Jonathan P” upon the expiration of its charter with Orient Express Lines. M/V “Jonathan P” was sold on March 16, 2012.
|
·
|
Pilory Associates Corp., incorporated in Panama on July 4, 2007, owner of the Panamanian flag 33,667 DWT / 1,932 TEU container carrier M/V “Despina P”, which was built in 1990 and acquired on August 13, 2007.
|
·
|
Tiger Navigation Corp., incorporated in Marshall Islands on August 29, 2007, owner of the Marshall Islands flag 31,627 DWT / 2,228 TEU container carrier M/V “Tiger Bridge”, which was built in 1990 and acquired on October 4, 2007.
|
·
|
Trust Navigation Corp., incorporated in Liberia on October 1, 2007, owner of the Liberian flag 64,873 DWT bulk carrier M/V “Ioanna P”, which was built in 1984 and acquired on November 1, 2007. M/V “Ioanna P” was sold in January 2009.
|
·
|
Noumea Shipping Ltd, incorporated in Marshall Islands on May 14, 2008, owner of the Marshall Islands flag 34,677 DWT / 2,556 TEU container carrier M/V “Maersk Noumea”, which was built in 2001 and acquired on May 22, 2008.
|
·
|
Saf-Concord Shipping Ltd., incorporated in Liberia on June 8, 2008, owner of the Liberian flag 46,667 DWT bulk carrier M/V “Monica P”, which was built in 1998 and acquired on January 19, 2009.
|
·
|
Eleni Shipping Ltd., incorporated in Liberia on February 11, 2009, owner of the Liberian flag 72,119 DWT bulk carrier M/V “Eleni P”, which was built in 1997 and acquired on March 6, 2009.
|
·
|
Pantelis Shipping Ltd., incorporated in the Republic of Malta on July 2, 2009, owner of the Maltese flag 74,020 DWT bulk carrier M/V “Pantelis” which was built in 2000 and acquired on July 23, 2009. On December 15, 2009, ownership of the vessel was transferred to Pantelis Shipping Corp., incorporated in Liberia, and the vessel changed its flag to the Liberian flag.
|
·
|
Aggeliki Shipping Ltd., incorporated in the Republic of Liberia on May 21, 2010, owner of the Liberian flag 30,306 DWT / 2008 TEU container carrier M/V “Aggeliki P” which was built in 1998 and acquired on June 21, 2010.
|
Year ended December 31,
|
|||
Charterer
|
2010
|
2011
|
2012
|
Maersk Lines
|
14.95%
|
15.73%
|
11.75%
|
Klaveness
|
30.29%
|
13.59%
|
10.71%
|
Sun Express
|
10.10%
|
-
|
-
|
2.
|
Significant Accounting Policies - Continued
|
2.
|
Significant Accounting Policies - Continued
|
2.
|
Significant Accounting Policies - Continued
|
3.
|
Inventories
|
2011
|
2012
|
|||||||
Lubricants
|
1,522,603 | 1,433,129 | ||||||
Victualling
|
218,141 | 173,883 | ||||||
Bunkers
|
865,791 | 205,624 | ||||||
Total
|
2,606,535 | 1,812,636 |
4.
|
Vessels, net
|
5.
|
Deferred Charges, net
|
2011
|
2012
|
|||||||
Balance, beginning of year
|
599,374 | 697,951 | ||||||
Additions, deferred offering expenses
|
243,392 | - | ||||||
Amortization of loan arrangement fees
|
(144,815 | ) | (135,981 | ) | ||||
Deferred offering expenses reclassified to paid-in capital
|
- | (243,392 | ) | |||||
Balance, end of year
|
697,951 | 318,578 |
As of December 31, 2011
|
As of December 31, 2012
|
|||||||
Accrued payroll expenses
|
308,380 | 144,286 | ||||||
Accrued interest
|
115,682 | 117,605 | ||||||
Accrued general and administrative expenses
|
441,876 | 359,050 | ||||||
Accrued commissions
|
84,724 | 98,199 | ||||||
Other accrued expenses
|
708,932 | 424,486 | ||||||
Total
|
1,659,594 | 1,143,626 |
7.
|
Fair Value of Time Charters Acquired
|
8.
|
Related Party Transactions
|
8.
|
Related Party Transactions - Continued
|
9.
|
Long-Term Debt
|
Borrower
|
December 31,
2011
|
December 31,
2012
|
|||||||
Alterwall Business Inc./
Allendale Investments S.A
|
(a)
|
- | - | ||||||
Xenia International Corp
|
(b)
|
2,420,000 | - | ||||||
Prospero Maritime Inc.
|
(c)
|
6,325,000 | 4,675,000 | ||||||
Xingang Shipping Ltd. / Alcinoe Shipping Ltd
|
(d)
|
7,000,000 | 6,000,000 | ||||||
Manolis Shipping Ltd.
|
(e)
|
7,120,000 | 6,480,000 | ||||||
Trust Navigation Corp. / Tiger Navigation Co.
|
(f)
|
2,200,000 | 2,000,000 | ||||||
Saf-Concord Shipping Ltd.
|
(g)
|
7,250,000 | 6,250,000 | ||||||
Eleni Shipping Ltd.
|
(h)
|
8,400,000 | 7,000,000 | ||||||
Pantelis Shipping Corp.
|
(i)
|
9,600,000 | 8,480,000 | ||||||
Aggeliki Shipping Ltd.
|
(j)
|
7,288,000 | 6,076,000 | ||||||
Noumea Shipping Ltd.
|
(k)
|
17,310,000 | 14,620,000 | ||||||
74,913,000 | 61,581,000 | ||||||||
Less: Current portion
|
(13,332,000 | ) | (15,937,000 | ) | |||||
Long-term portion
|
$ | 61,581,000 | $ | 45,644,000 |
To December 31:
|
||||
2013
|
15,937,000 | |||
2014
|
12,862,000 | |||
2015
|
16,612,000 | |||
2016
|
12,170,000 | |||
2017
|
4,000,000 | |||
Thereafter
|
- | |||
Total
|
$ | 61,581,000 |
(a)
|
Allendale Investments S.A. and Alterwall Business Inc. drew $20,000,000 on May 26, 2005 against a loan facility for which they were jointly and severally liable. The loan was payable in twenty-four consecutive quarterly instalments of $1,500,000 each in the first year, $1,125,000 each in the second year, $775,000 each in the third year, $450,000 each in the fourth through sixth years and a balloon payment of $1,000,000 payable with the final instalment due in May 2011. The interest was based on LIBOR plus 1.25% per annum as long as the outstanding loan amount remains below 60% of the fair market value (FMV) of M/V “Ninos” and M/V “Kuo Hsiung” and 1.375% if the outstanding loan amount was above 60% of the FMV of such vessels.
Other covenants and guarantees are similar to the rest of the loans of the Company.
This loan was paid in full as of May 2011.
|
(b)
|
This is an $8,250,000 loan drawn by Xenia International Corp. on June 30, 2006. The loan is payable in twenty three consecutive quarterly installments consisting of $265,000 each and a balloon payment of $2,155,000 payable with the final quarterly installment due in March 2012. The interest is based on LIBOR plus a margin of 0.95%. The loan is secured with the following: (i) first priority mortgage over M/V “Anking”, (ii) first assignment of earnings and insurance of M/V “Anking”, (iii) a corporate guarantee of Euroseas Ltd., and (iv) overall liquidity (cash and cash equivalents) of $300,000 for each of the Company’s vessels throughout the life of the facility. Other covenants and guarantees are similar to the rest of the loans of the Company.
This loan was paid in full as of March 2012.
|
(c)
|
This is a $15,500,000 loan drawn by Prospero Maritime Inc. on September 4, 2006. The loan is payable in fourteen consecutive semi-annual installments consisting of two installments of $1,200,000 each, one installment of $1,000,000 each and eleven installments of $825,000 each and a balloon payment of $3,025,000 payable with the final semi-annual installment due in September 2013. The interest is based on LIBOR plus a margin that ranges between 0.9%-0.95%, depending on the asset cover ratio. The loan is secured with the following: (i) first priority mortgage over M/V “Aristides N.P.”, (ii) first assignment of earnings and insurance of M/V “Aristides N.P.”, (iii) a corporate guarantee of Euroseas Ltd., (iv) a minimum cash balance equal to an amount of no less than $300,000 in an account Prospero Maritime Inc. maintains with the bank, and (v) overall liquidity (cash and cash equivalents) of $300,000 for each of the Company’s vessels throughout the life of the facility. Other covenants and guarantees are similar to the rest of the loans of the Company.
|
(d)
|
This is a $20,000,000 loan drawn by Xingang Shipping Ltd. on November 15, 2006; Alcinoe Shipping Ltd., owner of the M/V “Gregos”, became a guarantor to the loan in March 2007. Diana Shipping Ltd, owner of M/V “Irini” is a guarantor to this loan after M/V Gregos was sold in December 2009, cash collateral of $2,000,000 has been maintained with the bank in lieu of any repayment because of the sale. The loan is payable in eight consecutive quarterly installments of $1.0 million each, the first of which was due in February 2007, followed by four consecutive quarterly installments of $750,000 each, followed by sixteen consecutive installments of $250,000 each and a balloon payment of $5.0 million payable with the final quarterly installment due in November 2013. The interest was based on LIBOR plus a margin of 0.935% initially; after Alcinoe Shipping Ltd. became a guarantor the rate became 0.90%.
|
|
On April 5, 2013, an Addendum was signed by which the balloon payment of $5.0 million will be repaid by eight consecutive quarterly instalments of $200,000 each starting in February 2014 plus a balloon payment of $3,400,000 payable with the final quarterly instalment in November 15, 2015. The interest is based on LIBOR plus a margin of 5.30%. As of the November 1, 2013 and thereafter at any time throughout the repayment of the loan a minimum deposit of $400,000 is to be maintained with the bank. The loan is secured with the following: (i) first priority mortgage over M/V “Marinos” owned by Xingang Shipping Ltd, (ii) first assignment of earnings and insurance, (iii) a corporate guarantee of Euroseas Ltd. and (iv) a mortgage on M/V “Irini” owned by Diana Shipping Ltd. Other covenants and guarantees are similar to the rest of the loans of the Company.
|
(e)
|
This is a $10,000,000 loan drawn by Manolis Shipping Ltd. on June 11, 2007 The loan is payable in thirty-two consecutive quarterly instalments of $160,000 each, the first of which was due in September 2007, plus a balloon payment of $4,880,000 payable with the final quarterly instalment in June 2015. The interest is based on LIBOR plus a margin of 0.80% if the ratio of the outstanding loan to the vessel value is below 55%, otherwise the margin is 0.90%. The loan is secured with the following: (i) first priority mortgage over M/V “Manolis P”, (ii) first assignment of earnings and insurance, (iii) a corporate guarantee of Euroseas Ltd. and (iv) a minimum cash balance equal to an amount of no less than $300,000 in an account Manolis Shipping Ltd. maintains with the bank. Other covenants and guarantees are similar to the rest of the loans of the Company.
|
(f)
|
This loan is a $15,000,000 loan originally drawn by Trust Navigation Corp. on November 1, 2007.
The M/V “Ioanna P” secured the loan until the vessel was sold on January 12, 2009. In anticipation of such sale, on December 29, 2008, a replacement guarantee for the loan was put in place by Tiger Navigation Corp., one of the Company’s subsidiaries and the owner of M/V “Tiger Bridge”. On such date, Tiger Navigation Corp. also granted the lender a first priority mortgage over M/V “Tiger Bridge” to secure the loan and its guarantee.
The loan is payable in four consecutive quarterly instalments of $1,850,000 each, the first of which was due in February 2008, followed by four consecutive quarterly instalments of $750,000 each, followed by four consecutive quarterly instalments of $550,000 each, plus a balloon payment of $2,400,000 payable with the final quarterly instalment in November 2010. The interest is based on LIBOR plus a margin of 0.90%. On October 29, 2010, Tiger Navigation Corp. agreed to re-finance the balloon payment of $2,400,000 to be paid in ten consecutive quarterly instalments of $50,000 each plus a balloon payment of $1,900,000 payable with the final instalment in April 2013. The interest rate is based on LIBOR plus 3.75%. The loan is secured with the following: (i) first priority mortgage over M/V “Tiger Bridge”, (ii) first assignment of earnings and insurance, (iii) a corporate guarantee of Euroseas Ltd. and (iv) a minimum cash balance equal to an amount of no less than $300,000 in an account Trust Navigation Corp. maintains with the bank. Other covenants and guarantees are similar to the rest of the loans of the Company.
|
(g)
|
This loan is a $10,000,000 loan drawn by SAF-Concord Shipping Ltd. on January 19, 2009. The loan was payable in twenty consecutive quarterly instalments of $250,000 each, the first of which was due in April 2009, plus a balloon payment of $5,000,000 payable with the final quarterly instalment in January 2014. The interest was based on LIBOR plus a margin of 2.50%. The loan was secured with the following: (i) first priority mortgage over M/V “Monica P”, (ii) first assignment of earnings and insurance, (iii) a corporate guarantee of Euroseas Ltd. and (iv) a minimum cash balance equal to an amount of no less than $300,000 in an account SAF-Concord Shipping Ltd. Shipping Ltd. maintains with the bank. Other covenants and guarantees are similar to the rest of the loans of the Company.
|
(h)
|
This loan is a $10,000,000 loan drawn by Eleni Shipping Ltd. on April 30, 2009.
The loan is payable in 10 consecutive semi-annual instalments, two in the amount of $100,000, two in the amount of $400,000, two in the amount of $600,000 and four in the amount of $800,000, with a $4.6 million balloon payment to be paid together with the last instalment in April 2014. The margin of the loan is 2.50% above LIBOR for the $5.4 million repaid throughout the 5 years and 2.70% above LIBOR for the amount of the balloon payment.
The loan is secured with the following: (i) first priority mortgage over M/V “Eleni P”, (ii) first assignment of earnings and insurance, (iii) a corporate guarantee of Euroseas Ltd. and (iv) a minimum cash balance equal to an amount of no less than $300,000 in an account Eleni Shipping Ltd. maintains with the bank. Other covenants and guarantees are similar to the rest of the loans of the Company.
|
(i)
|
This loan is a $13,000,000 loan drawn by Pantelis Shipping Corp. on December 15, 2009.
The loan is payable in 32 consecutive quarterly instalments, four in the amount of $500,000 and twenty-eight in the amount of $280,000, with a $3.16 million balloon payment to be paid together with the last instalment in December 2017. The margin of the loan is 2.70% above LIBOR.
The loan is secured with the following: (i) first priority mortgage over M/V “Pantelis”, (ii) first assignment of earnings and insurance, (iii) a corporate guarantee of Euroseas Ltd. and (iv) a minimum cash balance equal to an amount of no less than $300,000 in an account Pantelis Shipping Corp. maintains with the bank. Other covenants and guarantees are similar to the rest of the loans of the Company.
|
(j)
|
This loan is a $8,500,000 loan drawn by Aggeliki Shipping Ltd. on November 5, 2010. The loan is payable in 20 equal consecutive quarterly instalments of $303,000 each, with a $2.44 million balloon payment to be paid together with the last instalment in November 2015. The margin of the loan is 2.85% above LIBOR. The loan is secured with the following: (i) first priority mortgage over M/V “Aggeliki P.”, (ii) first assignment of earnings and insurance, (iii) a corporate guarantee of Euroseas Ltd. Other covenants and guarantees are similar to the rest of the loans of the Company.
|
(k)
|
This loan is a $20,000,000 loan drawn by Noumea Shipping Ltd. on December 28, 2010. The loan consists of two tranches: Tranche A of $15,000,000 payable in 12 equal consecutive six-monthly instalments of $720,000 each with a $6.36 million balloon payment to be paid together with the last instalment in December 2016; and, Tranche B of $5,000,000 payable in 8 equal consecutive six-monthly instalments of $625,000 each running in parallel with Tranche A. The margin of both tranches is 2.65% above LIBOR, however, if the collateral vessel, M/V “Maersk Noumea”, does not have a charter, the margin of Tranche B becomes 4% above LIBOR and any balance remaining thereof, to be repaid not later that the original Tranche B Maturity, as an Interim Balloon. The loan is secured with the following: (i) first priority mortgage over M/V “Maersk Noumea”, (ii) second priority mortgage over M/V “Aristides N.P.”, (iii) first assignment of earnings and insurance, (iv) a corporate guarantee of Euroseas Ltd. Other covenants and guarantees are similar to the rest of the loans of the Company.
|
·
|
first priority mortgage over the respective vessels on a joint and several basis.
|
·
|
first assignment of earnings and insurance.
|
·
|
a personal guarantee of one shareholder.
|
·
|
a corporate guarantee of Euroseas Ltd.
|
·
|
a pledge of all the issued shares of each borrower.
|
11.
|
Commitments and Contingencies
|
(a)
|
There are no material legal proceedings to which the Company is a party or to which any of its properties are subject, other than routine litigation incidental to the Company’s business. In the opinion of the management, the disposition of these lawsuits should not have a material impact on the consolidated results of operations, financial position and cash flows.
|
(b)
|
Future minimum long-term time charter revenue net of commissions, based on non-cancelable time charter contracts as of December 31, 2012 will be $3.8 million for 2013 and $0.6 million for 2014 assuming the scheduled drydockings and special surveys (20-25 days every two and a half years) and one additional offhire day per quarter to account for any unscheduled off-hire time.
|
12.
|
Stock Incentive Plan
|
a)
|
On November 4, 2010, an award of 165,000 non-vested restricted shares, 15,000 shares under the 2007 Plan and 150,000 shares under the 2010 Plan, was made to 14 key persons of which 50% vested on November 16, 2011 and 50% vested on November 16, 2012; awards to officers and directors amounted to 100,000 shares and the remaining 65,000 shares were awarded to employees of Eurobulk.
|
b)
|
On November 4, 2011 an award of 290,000 non-vested restricted shares under the 2010 Plan, was made to 17 key persons of which 50% vested on July 1, 2012 and 50% will vest on July 1, 2013; awards to officers and directors amounted to 164,000 shares and the remaining 126,000 shares were awarded to employees of Eurobulk.
|
c)
|
On November 3, 2012 an award of 435,000 non-vested restricted shares under the 2010 Plan, was made to 17 key persons of which 50% will vest on November 16, 2013 and 50% on November 16, 2014; awards to officers and directors amounted to 246,000 shares and the remaining 189,000 shares were awarded to employees of Eurobulk.
|
12.
|
Stock Incentive Plan - continued
|
Non-vested Shares
|
Shares
|
Weighted-Average Grant-Date Fair Value
|
||||||
Non-vested on January 1, 2012
|
372,500 | $ | 1,250,500 | |||||
Granted
|
554,200 | 629,822 | ||||||
Vested
|
(300,300 | ) | (879,648 | ) | ||||
Forfeited
|
- | - | ||||||
Non-vested on December 31, 2012
|
626,400 | 1,000,674 |
13.
|
Earnings / (Loss) Per Share
|
2010
|
2011
|
2012
|
||||||||||
Income:
|
||||||||||||
Net income/(loss)
|
(6,605,850 | ) | 1,115,989 | (13,198,741 | ) | |||||||
Basic earnings per share:
|
||||||||||||
Weighted average common shares –
Outstanding
|
31,636,633 | 31,794,381 | 38,950,100 | |||||||||
Basic earnings/(loss) per share
|
(0.21 | ) | 0.04 | (0.34 | ) | |||||||
Effect of dilutive securities
|
||||||||||||
Non-vested incentive stock awards
|
- | 51,699 | - | |||||||||
Weighted average common shares –
Outstanding
|
31,636,633 | 31,846,080 | 38,950,100 | |||||||||
Diluted earnings /(loss) per share
|
(0.21 | ) | 0.04 | (0.34 | ) |
Year ended December 31,
|
||||||||||||
2010
|
2011
|
2012
|
||||||||||
Voyage expense
|
||||||||||||
Port charges and canal dues
|
578,520 | 304,951 | 442,783 | |||||||||
Laid-up vessel re-activation costs
|
565,653 | - | - | |||||||||
Bunkers
|
452,396 | 472,951 | 886,885 | |||||||||
Total
|
1,596,569 | 777,902 | 1,329,668 | |||||||||
Vessel operating expenses
|
||||||||||||
Crew wages and related costs
|
12,144,125 | 14,137,227 | 13,864,535 | |||||||||
Insurance
|
2,521,256 | 2,691,918 | 2,435,144 | |||||||||
Repairs and maintenance
|
524,026 | 601,254 | 511,569 | |||||||||
Lubricants
|
2,187,351 | 2,712,901 | 2,846,087 | |||||||||
Spares and consumable stores
|
3,252,381 | 4,590,835 | 4,083,590 | |||||||||
Professional and legal fees
|
113,202 | 111,043 | 137,047 | |||||||||
Other
|
764,851 | 1,404,161 | 1,197,167 | |||||||||
Total
|
21,507,192 | 26,249,339 | 25,075,139 |
Year ended December 31,
|
||||||||||||
2010
|
2011
|
2012
|
||||||||||
Third parties
|
1,331,475 | 2,206,663 | 2,032,599 | |||||||||
Related parties (see Note 8)
|
612,998 | 766,304 | 641,104 | |||||||||
1,944,473 | 2,972,967 | 2,673,703 |
Fair Value Measurement as of December 31, 2012
|
||||||||||||||||
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Liabilities
|
||||||||||||||||
Interest rate swap contracts, current and long-term portion
|
$ | 2,393,568 | - | $ | 2,393,568 | - |
Fair Value Measurement as of December 31, 2011
|
||||||||||||||||
Total,
|
l (Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Assets
|
||||||||||||||||
Trading securities
|
$ | 27,473 | $ | 27,473 | - | - | ||||||||||
Liabilities
|
||||||||||||||||
Interest rate swap contracts, current and long-term portion
|
$ | 3,451,497 | - | $ | 3,451,497 | - | ||||||||||
Total
|
$ | 27,473 | $ | 3,451,497 |
Derivatives not designated as hedging instruments
|
Balance Sheet Location
|
December 31, 2011
|
December 31, 2012
|
||||||
Interest rate swap contracts
|
Current liabilities – Derivatives
|
1,907,088 | 1,718,438 | ||||||
Interest rate contracts
|
Long-term liabilities – Derivatives
|
1,544,409 | 675,130 | ||||||
Total derivative liabilities
|
3,451,497 | 2,393,568 |
Derivatives not designated as hedging instruments
|
Location of gain (loss) recognized
|
Year Ended December 31, 2010
|
Year Ended December 31, 2011
|
Year Ended December 31, 2012
|
|||||||||
FFA contracts – Fair value
|
Change in fair value of derivatives
|
9,692,455 | (574,336 | ) | - | ||||||||
FFA contracts - Realized loss
|
Change in fair value of derivatives
|
(10,875,776 | ) | 910,088 | (2,247 | ) | |||||||
Interest rate – Fair value
|
Change in fair value of derivatives
|
(1,468,650 | ) | (76,516 | ) | 1,057,928 | |||||||
Interest rate contracts - Realized loss
|
Change in fair value of derivatives
|
(1,569,846 | ) | (1,758,158 | ) | (1,693,084 | ) | ||||||
Total loss on derivatives
|
(4,221,817 | ) | (1,498,122 | ) | (637,403 | ) |
17.
|
Investment in Joint Venture
|
2010
|
2011
|
2012
|
||||||||||
Current assets
|
7,432,566 | 7,732,697 | 10,912,327 | |||||||||
Long-term assets
|
167,386,946 | 217,878,004 | 242,007,329 | |||||||||
Current liabilities
|
8,002,899 | 16,908,232 | 6,051,142 | |||||||||
Long-term liabilities
|
65,834,481 | 107,737,239 | 127,316,330 | |||||||||
Members’ contributions
|
105,750,000 | 105,750,000 | 132,000,000 | |||||||||
Voyage revenue
|
4,479,908 | 29,233,585 | 27,428,223 | |||||||||
Net revenue
|
4,367,197 | 28,107,669 | 26,216,805 | |||||||||
Operating income / (loss)
|
(3,388,490 | ) | 6,357,218 | (2,018,854 | ) | |||||||
Net loss
|
(4,017,868 | ) | (16,902 | ) | (8,413,047 | ) |
18.
|
Other Income
|
a)
|
On February 14, 2012, the Board of Directors declared a cash dividend of $0.015 per Euroseas Ltd. common share. Such cash dividend was paid on March 9, 2012 to the holders of record of Euroseas Ltd. common shares as of March 2, 2012.
|
A.
|
The Owner is the sole owner of the whole of the Liberian flag motor vessel "
MONICA P.
", of gross registered tons 27011 and 16011 net registered tons, or thereabouts, built in 1998, and duly documented in the name of the Owner under the laws of the Republic of Liberia with her home port at Monrovia, Liberia and with official number 10909.
|
B.
|
The Owner granted the Mortgage to the Existing Mortgagee as security for its obligations arising from (a) a Loan Agreement dated 9
th
January 2009 (the "
Loan Agreement
") made between the Owner, as borrower and the Existing Mortgagee, as lender for a loan facility in the principal amount of US$10,000,000 made available to the Owner by the Existing Mortgagee and (b) a master agreement (on the 1992 ISDA Master Agreement (Multicurrency-Crossborder) form and including the Schedule thereto), both dated 9
th
January 2009 (the "
Master Swap Agreement
") made between the Owner and the Existing Mortgagee which includes all Designated Transactions from time to time entered into and Confirmations of Designation Transactions from time to time exchanged under the Master Swap Agreement (as these terms are defined therein).
|
C.
|
Pursuant to an assignment agreement dated 29
th
July 2011 as same was amended by an amendment agreement dated 29
th
November 2011 (together, "
Assignment Agreement
"), made between the Existing Mortgagee as assignor and the Mortgagee as assignee, the Existing Mortgagee assigned to the Mortgagee and the Mortgagee accepted, as of originally named as an original bank/lender/mortgagee, all the rights and benefits, liabilities and obligations of the Existing Mortgagee under or in respect of, inter alia, the Loan Agreement and the
|
D.
|
The Loan Agreement has been amended by a first supplemental agreement dated the …….. day of October 2012 (the "
First
Supplemental Agreement
" and together with the Loan Agreement hereinafter called the "
Amended Loan Agreement
") made among the Owner, the Mortgagee, the Agent and Existing Mortgagee in its capacity as party to the Master Swap Agreement (the "
Party A to the Master Swap Agreement
"), pursuant to which, the parties thereto, have agreed to, among other things, the termination of the Master Swap Agreement and the release of the parties thereto from their rights and obligations thereunder (including the obligation for the payment of the Swap Exposure) and to the consequent reduction of the amount secured by the Mortgage from United States Dollars thirteen million three hundred thousand (USD 13,300,000), of which the principal sum of United States Dollars ten million (USD 10,000,000) represented the Loan, and of which United States Dollars three million three hundred thousand (USD 3,300,000) represented the maximum aggregate amount of the Owner's Swap Exposure, to United States Dollars six million two hundred fifty thousand (USD 6,250,000) representing the Loan plus interest on the Loan and costs and other sums payable in respect thereof, and performance of mortgage covenants, the rescheduling of the repayment of the principal outstanding of the Loan, the extension of its final maturity date, and to the amendment of the date of Maturity secured by the Mortgage from 15
th
January 2014 to 15
th
January 2016, on condition, among other things that the calculation of the Interest Rate and certain other provisions of the Loan Agreement be varied and/or amended and on the further condition that the Owner enters into this Amendment and Assignment to the Mortgage. A copy of the form of the First Supplemental Agreement is attached hereto as Exhibit 1 and shall be read together herewith.
|
"
4.01.
|
The Owner hereby absolutely and unconditionally covenants and undertakes with the Mortgagee as follows:
|
1.9
|
The words "EFG EUROBANK ERGASIAS S.A. of Greece" in the Notice of Mortgage are being substituted by the words "EUROBANK PRIVATE BANK LUXEMBOURG SA of Luxembourg".
|
Saf-Concord Shipping Ltd
|
Eurobank Ergasias S.A.
(formerly known as EFG Eurobank Ergasias S.A.)
|
|||
By:
|
By:
|
|||
Name:
|
Name:
|
|||
Title:
|
Title:
|
By:
|
||||
Name:
|
||||
Title:
|
CITY OF PIRAEUS
|
)
|
|
:
|
ss.:
|
|
PREFECTURE OF ATTICA
|
)
|
|
HELLENIC REPUBLIC
|
Liberian Special Agent
|
CITY OF PIRAEUS
|
)
|
|
:
|
ss.:
|
|
PREFECTURE OF ATTICA
|
)
|
|
HELLENIC REPUBLIC
|
Liberian Special Agent
|
CITY OF PIRAEUS
|
)
|
|
:
|
ss.:
|
|
PREFECTURE OF ATTICA
|
)
|
|
HELLENIC REPUBLIC
|
(1)
|
MANOLIS SHIPPING LIMITED
being a company incorporated in accordance with the laws of the Republic of the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960, Republic of Marshall Islands (referred to below as "the
Borrower
");
|
(2)
|
SAF-CONCORD SHIPPING LTD
, being a company incorporated in accordance with the laws of the Republic of Liberia whose registered office is situated at 80, Broad Street, Monrovia, Liberia (referred to below as the "
Additional Corporate Guarantor A
");
|
(3)
|
TIGER NAVIGATION CORP.
, being a company incorporated in accordance with the laws of the Republic of the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960, Republic of Marshall Islands (referred to below as the
"Additional Corporate Guarantor B");
|
(4)
|
ALTERWALL BUSINESS INC.
being a company incorporated in accordance with the laws of the Republic of Panama,
whose registered office is at c/o Quijano y Asociates, Salbuda Building, top floor, East 53
rd
Street, Urbanizacion Obarrio, P.O. BOX 7284, Panama 5, Panama (referred to below as the
"Additional Corporate Guarantor C");
|
(5)
|
Eurobank Private Bank Luxembourg SA
(formerly known as Eurobank EFG Private Bank Luxembourg SA), a banking societe anonyme duly incorporated under the laws of Luxembourg, having its registered office at 5, rue, Jean Monnet, L-2180 Luxembourg (referred to below as
the "
Bank
");
|
(6)
|
Eurobank Ergasias S.A.
(formerly known as EFG Eurobank Ergasias S.A.), a banking societe anonyme duly incorporated under the laws of Greece, having its registered office at 8, Othonos Street, Athens, Greece, acting for the purposes of this Agreement through its office at 83, Akti Miaouli, 185 38 Piraeus, Greece, in its capacity as agent for the Bank (referred to below as the "
Agent
"); and
|
(7)
|
Eurobank Ergasias S.A.
(formerly known as EFG Eurobank Ergasias S.A.), a banking societe anonyme duly incorporated under the laws of Greece, having its registered office at 8, Othonos Street, Athens, Greece, acting for the purposes of this Agreement through its office at 83, Akti Miaouli, 185 38 Piraeus, Greece (referred to below as the "
Party A to the Master Swap Agreement
").
|
(A)
|
The Borrower hereby acknowledges receipt of the whole amount of the Original Loan and further acknowledges that, the total amount of principal of the Original Loan remaining currently outstanding under the Loan Agreement amounts to United States Dollars Six Million Six Hundred Forty Thousand (US$6,640,000) ("
the Loan
").
|
(B)
|
The Borrower has also entered with the Party A to the Master Swap Agreement into a master swap agreement (on the 1992 ISDA (Multicurrency-Crossborder) form) and the schedule thereto dated 7
th
June 2007 including all Designated Transactions from time to time entered into and Confirmations of Designation Transactions from time to time exchanged under the said master swap agreement (the "
Master Swap
Agreement
").
|
(C)
|
Pursuant to the Loan Agreement and as security for the prompt performance by the Borrower of all its obligations under the Loan Agreement and the other documents referred therein as "Security Documents", there were executed and are currently in full of force and effect
inter alia
: (a) a security deed dated 7
th
June, 2007 executed by the Borrower in favour of the Original Bank (the "
Master Agreement Security Deed
"), (b) a corporate guarantee and indemnity dated 7
th
June, 2007 executed by Euroseas Ltd. of the Marshall Islands (the "
Corporate Guarantor
") in favour of the Original Bank (the "
Corporate Guarantee
"), (c) a pledge agreement on the Operating Account No 0026.0029.20.1200284659 dated 7
th
June, 2007 entered into between the Original Bank and the Borrower and duly served through a Court Bailiff with the Original Bank), (d) a pledge agreement on the Operating Account No 0026.0029.21.1200236674
dated 7
th
June, 2007 entered into between the Original Bank and the Corporate Guarantor and duly served through a Court Bailiff with the Original Bank, (e) a pledge agreement on the Retention Account No 0026.0029.28.1200284747 dated 7
th
January, 2007 entered into between the Original Bank and the Borrower and duly served through a Court Bailiff with the Original Bank (documents referred under (c) to (e), the "
Account Pledges
"), (f) a first preferred ship mortgage on the m.v Manolis P (the "
Vesse
l") made between the Borrower and the Original Bank dated the 7
th
June 2007, duly registered with the Maritime Office in Piraeus of the Republic of the Marshall Islands on June 7
th
, 2007 at 12:50 P.M., E.E.S.T. (the "
Mortgage
"), (g) a deed of assignment in respect of the Vessel dated 7
th
June 2007,
made between the Borrower and the Original Bank together with the relevant notices of assignment and loss payable clause in respect of the Vessel's insurances earnings, charter rights and requisition compensation (the "
General Assignment
"), (h) a manager's undertaking dated 7 June 2007 in relation to the Vessel (the "
Original
Manager's Undertaking
"), (i) a corporate guarantee and indemnity
|
(D)
|
Pursuant to an assignment agreement dated 29
th
July 2011 as same was amended by an amendment agreement dated 29
th
November 2011 (together, "
Assignment Agreement
"), made between the Original Bank and the Bank, (a) the Original Bank assigned to the Bank and the Bank accepted, as if originally named as an original bank/lender, all the rights and benefits liabilities and obligations of the Original Bank under or in respect of (inter alia) the Loan Agreement, the Master Agreement Security Deed, the Corporate Guarantee, the Account Pledges, the Mortgage, the General Assignment, the Original Manager's Undertaking, the Existing Additional Corporate Guarantee and the Manager's Undertaking 2009 (as all these terms are defined in Recital (C) above and any other agreement or instrument relating to the same (save from the Master Swap Agreement) ("
Manolis Facility Assigned Assets
") and (b) the Bank appointed the Original Bank to act as the Bank's agent and authorized the Agent to perform the duties and exercise the rights, powers and discretions that are specifically given to it under the Loan Agreement and the Manolis Facility Assigned Assets, all on the terms and subject to the conditions contained therein and the Borrower hereby acknowledges that it has received notice of the assignment effected by virtue of the Assignment Agreement.
|
(E)
|
The parties have further agreed to terminate the Master Swap Agreement and the Master Agreement Security Deed and the parties thereto to be released from any rights and/or obligations thereunder.
|
(F)
|
In view of the decline observed in the value of the Vessel (as this term is defined in the Original Loan Agreement) and in order for the Bank to continue to make the Loan available to the Borrower, the Bank has requested, that the Borrower provides to the Bank in accordance with the provisions of Clause 13.5 of the Original Loan Agreement with additional security (acceptable to the Bank) for so long as the Security Value is less than the Minimum Value (as these terms are defined in the Original Loan Agreement), which the Borrower has agreed to do on the terms and subject to the conditions of this Second Supplemental Agreement.
|
(G)
|
As a condition precedent to the Bank's agreement to continue to make the Loan available to the Borrower, the Borrower has agreed, inter alia, to procure that additional security (acceptable to the Bank) be provided and more particularly to procure Additional Corporate Guarantor A to execute and deliver a confirmation to the Existing Additional Corporate Guarantee and each of the Additional Corporate Guarantor B and the Additional Corporate Guarantor C (as hereinafter defined), each being a company affiliated to the Borrower to execute and deliver the respective Additional Corporate Guarantee (as hereinafter defined) of the Borrower's obligations under the Loan Agreement each Additional Corporate Guarantee to be secured by the relevant Collateral Mortgage, the relevant Collateral Assignment, (where applicable) the relevant Collateral Pledge, and the New Manager's Undertaking (as these terms are hereinafter defined) and to accept certain amendments to be made to the Loan Agreement as described hereinafter.
|
(H)
|
The Bank has agreed to give its consent to the above on the terms and subject to the conditions of this Second Supplemental Agreement which shall be read as one with the Original Loan Agreement and the definitions contained in the Original Loan Agreement shall apply to the provisions of this Second Supplemental Agreement, save to the extent that such definitions are amended hereunder and in consequence thereof the parties hereto enter into this Second Supplemental Agreement.
|
1.1
|
Words and expressions defined in the Loan Agreement (as hereby supplemented and amended) and not otherwise defined herein shall have the same meanings when used in this Second Supplemental Agreement.
|
1.2
|
In this Second Supplemental Agreement the words and expressions specified below shall have the meaning attributed to them below:
|
|
(a)
|
the Existing Additional Corporate Guarantee (the "
Additional Corporate Guarantee A
");
|
|
(b)
|
the guarantee and indemnity given or, as the context may require, to be given by the Additional Corporate Guarantor B in form and substance satisfactory to the Bank, as security for the Indebtedness and any and all obligations of the Borrower under the Loan Agreement, such guarantee to be released by the Bank at the request of the Additional Corporate Guarantor B and in its expense provided that the Security Value is in excess of the Minimum Value (as these terms are defined in the Original Loan Agreement) (the "
Additional Corporate Guarantee B
"); and
|
|
(c)
|
the guarantee and indemnity given or, as the context may require, to be given by the Additional Corporate Guarantor C in form and substance satisfactory to the Bank, as security for the Indebtedness and any and all obligations of the Borrower under the Loan Agreement, such guarantee to be released by the Bank at the request of the Additional Corporate Guarantor C and in its expense provided that the Security Value is in excess of the Minimum Value (as these terms are defined in the Original Loan Agreement) (the "
Additional Corporate Guarantee C
");
|
|
(a)
|
SAF-CONCORD SHIPPING LTD, being a company incorporated in accordance with the laws of the Republic of Liberia whose registered office is situated at 80, Broad Street, Monrovia, Liberia (the "
Additional Corporate Guarantor A
");
|
|
(b)
|
TIGER NAVIGATION CORP., being a company incorporated in accordance with the laws of the Republic of the Marshall Islands, whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960, Republic of Marshall Islands (the "
Additional Corporate Guarantor B
"); and
|
|
(c)
|
ALTERWALL BUSINESS INC. being a company incorporated in accordance with the laws of the Republic of Panama (the "
Additional Corporate Guarantor C
");
|
|
(a)
|
the second preferred ship mortgage on the Collateral Vessel A executed or, as the context may require, to be executed by the Additional Corporate Guarantor A in favour of the Bank, as security of the obligations of the Additional Corporate Guarantor A under the Additional Corporate Guarantee A, such mortgage to be released by the Bank at the request of the Additional Corporate Guarantor A and in its expense provided that the
|
|
(b)
|
the second preferred ship mortgage on the Collateral Vessel B executed or, as the context may require, to be executed by the Additional Corporate Guarantor B in favour of the Bank, as security of the obligations of the Additional Corporate Guarantor B under the Additional Corporate Guarantee B, such mortgage to be released by the Bank at the request of the Additional Corporate Guarantor B and in its expense provided that the Security Value is in excess of the Minimum Value (as these terms are defined in the Original Loan Agreement ("
Collateral Mortgage B
"); and
|
|
(c)
|
the first preferred ship mortgage on the Collateral Vessel C executed or, as the context may require, to be executed by the Additional Corporate Guarantor C in favour of the Bank, as security of the obligations of the Additional Corporate Guarantor C under the Additional Corporate Guarantee C, such mortgage to be released by the Bank at the request of the Additional Corporate Guarantor C and in its expense provided that the Security Value is in excess of the Minimum Value (as these terms are defined in the Original Loan Agreement ("
Collateral Mortgage C
");
|
|
(a)
|
the m.v. MONICA P. built in 1998, being of 27011 gross tons and of 16011 net tons currently registered under the Liberian flag with Official Number 10909 in the ownership of the Additional Corporate Guarantor A ("
Collateral Vessel A
"), and
|
|
(b)
|
the m.v. "TIGER BRIDGE" built in 1990, being of 24495 gross tons and of 10403 net tons currently registered under the Marshall Islands flag in the ownership of the Additional Corporate Guarantor B ("
Collateral Vessel B
")
;
and
|
|
(c)
|
the m.v. NINOS, built in 1990, being of 15122 gross tons and of 6244 net tons currently registered under the Panama flag with IMO N 8909082 in the ownership of the Additional Corporate Guarantor C ("
Collateral Vessel C
");
|
|
(a)
|
the Existing General Assignment; and
|
|
(b)
|
the Collateral General Assignments;
|
|
(a)
|
the first preferred Marshall Islands Ship Mortgage dated 7
th
June 2007 made between the Borrower and the Original Bank, duly registered with the Maritime Office in Piraeus of the Republic of the Marshall Islands on June 7
th
, 2007 at 12:50 P.M., E.E.S.T. which has been assigned (or as the case may be) will be assigned to the Bank pursuant to the Assignment Agreement and the Mortgage Amendment and Assignment (the "
Vessel's Mortgage
"); and
|
|
(b)
|
the Collateral Mortgages; and
|
1.3
|
Where the context so admits words importing the singular number only shall include the plural and vice versa and words importing persons shall include firms and corporations. Clause headings are inserted for convenience of reference only and shall be ignored in construing this Second Supplemental Agreement. References to Clauses are to clauses of this Second Supplemental Agreement save as may be otherwise expressly provided in this Second Supplemental Agreement.
|
2
|
REPRESENTATIONS AND WARRANTIES
|
2.1
|
Each of the Borrower and the Additional Corporate Guarantors hereby represents and warrants to the Bank and/or the Agent, as of the date of this Second Supplemental Agreement, each of the representations and warranties contained in Clause 4 of the Original Loan Agreement are true and correct, including to the extent that they may have been or shall be amended by this Second Supplemental Agreement and shall be deemed repeated herein as if contained in extenso and as if made with reference to the facts and circumstances existing on the date hereof, as if references to the Security Documents included this Second Supplemental Agreement and the Additional Security Documents and excluded the Released Documents and as if references to the Security Parties included the Additional Corporate Guarantors.
|
2.2
|
Each of the Borrower and the Additional Corporate Guarantors hereby expressly agrees and acknowledges and represents and warrants to the Bank that the Loan Agreement as amended hereby shall remain in full force and effect and the security constituted by the Security Documents, including the Additional Security Documents, executed by the Borrower, the Corporate Guarantor and the Additional Corporate Guarantors and/or the Manager (as the case may be) shall continue to remain valid and enforceable and in full force and effect.
|
2.3
|
Each of the Borrower and the Additional Corporate Guarantors hereby further represents and warrants to the Bank that, as of the date of this Second Supplemental Agreement:
|
3.
|
AGREEMENT OF THE BANK
|
4.
|
CONDITIONS PRECEDENT AND CONDITIONS SUBSEQUENT
|
4.1
|
Conditions precedent
|
(a)
|
In the case of the Borrower, the Corporate Guarantor, the Additional Corporate Guarantors, and/or the Manager:
|
|
(i)
|
a recent certificate of good standing in relation to the Borrower, the Corporate Guarantor, each Additional Corporate Guarantor, and/or the Manager issued by the relevant authorities of the country of its incorporation together with certified copies of the Articles of Incorporation (or equivalent documents) and all amendments thereto and any other documents required to be filed or registered or issued under the laws of the country of its respective incorporation to establish the incorporation and/or good standing (as the case may be) of each of the Borrower, the Corporate Guarantor, the Additional Corporate Guarantors, and/or the Manager under the laws of such country;
|
|
(ii)
|
certified and duly legalised copies of resolutions passed at a meeting of the Board of Directors of, and of the resolutions passed at a meeting of the Shareholders of the Borrower, the Corporate Guarantor, each Additional Corporate Guarantor, and/or the Manager evidencing approval to the variation of the Loan Agreement pursuant to Clause 5 and the execution of all documents contemplated hereby to which each of the Borrower, the Corporate Guarantor, the Additional Corporate Guarantors, and/or the Manager is a party and authorising appropriate officers or attorneys to execute the same and to sign any other documents, notices, letters or other communications required to be given by it pursuant hereto and thereto or other evidence of such approvals and authorisations as shall be acceptable to the Bank and/or the Agent;
|
|
(iii)
|
the original of a duly legalised power(s) of attorney issued by each of the Borrower, the Corporate Guarantor, the Additional Corporate Guarantors, and/or the Manager, pursuant to the resolutions referred to in Clause 4.1 (a)(ii) under which any documents (including this Second Supplemental Agreement) are to be executed or transactions to be undertaken by the Security Parties under or pursuant to this Second Supplemental Agreement including for the avoidance of doubt the Additional Security Documents;
|
|
(iv)
|
a list (certified by the Secretary or a Director or other appropriate officer of the the Borrower, the Corporate
|
|
(v)
|
copies of all governmental and other consents, licenses, approvals and authorisations as may be necessary to authorise the performance by the Borrower, the Corporate Guarantor, the Additional Corporate Guarantors, and/or the Manager of their respective obligations under those of this Second Supplemental Agreement and the Additional Security Documents to which each of the above entities is a party and the execution, validity and enforceability of this Second Supplemental Agreement and the Additional Security Documents;
|
(b)
|
this Second Supplemental Agreement and the Additional Security Documents in favour of the Bank, duly executed by the relevant Security Party and in the case of the Collateral Mortgages registered with second priority in the case of Collateral Mortgage A and Collateral Mortgage B and with first priority in the case of Collateral Mortgage C at the competent port of registry together with all items and documents to be delivered pursuant thereto;
|
(c)
|
evidence that the Vessel continues to be:
|
|
(i)
|
duly and permanently registered under the Marshall Islands flag in the absolute and unencumbered ownership of the Borrower save for the Mortgage and save as contemplated by this Second Supplemental Agreement and continues to trade in full compliance with all applicable laws;
|
|
(ii)
|
managed by the Manager pursuant to the terms of the relevant management agreement, a copy of which will have been delivered to and approved by the Bank and/or the Agent; and
|
|
(iii)
|
insured in the name of the Borrower and/or of the Corporate Guarantor and/or the Manager as co-assured in accordance with the terms and conditions of the Mortgage;
|
(d)
|
updated class maintenance certificate issued by the classification society of the Vessel which will be at all terms satisfactory to the Bank and/or the Agent;
|
(e)
|
evidence that each Collateral Vessel is:
|
|
(i)
|
duly and permanently registered under the relevant flag in the absolute and unencumbered ownership of the relevant Additional Corporate Guarantor save for the first priority mortgage in favour of the Bank in the case of Collateral Vessel A and Collateral Vessel B and save as contemplated by this Second Supplemental Agreement and continues to trade in full compliance with all applicable laws;
|
|
(ii)
|
managed by the Manager pursuant to the terms of the relevant management agreement, copy of which will have been delivered to and approved by the Bank and/or the Agent; and
|
|
(iii)
|
insured in the name of the relevant Additional Corporate Guarantee and of the Corporate Guarantor and the Manager as co-assured in accordance with the terms and conditions of the relevant Collateral Mortgage and that appropriate letters of undertaking will be issued in the manner specified by the relevant Collateral Mortgage;
|
(f)
|
photocopies, certified as true, accurate and complete, by a director of each Additional Corporate Guarantor in relation to each Collateral Vessel of
Safety Construction, Safety Equipment, Safety Radio and Load Line Certificates (including SMC, ISSC and DOC) in relation to each Collateral Vessel;
|
|
(g)
|
photocopies of any charterparty or other contract of employment in relation to each Collateral Vessel which will be in force at the Effective Date;
|
|
(h)
|
copy
of the Confirmation of Class for Hull and Machinery confirming that each Collateral Vessel is classed with the highest class of Lloyd's or equivalent
|
|
(i)
|
evidence that each Additional Corporate Guarantor and the Manager are in current compliance with the requirements of the International Management Code for the Safe Operation of Ships and for Pollution Prevention (as adopted by the International Maritime Organisation as Resolution A.741 (18) (the "ISM Code");
|
(i)
|
evidence that each Additional Corporate Guarantor and the Manager are in current compliance with the provisions of the International Ship and Port Facilities Security (ISPS) Code and the other respective amendments of SOLAS and will maintain at all times throughout the Facility Period a valid International Ship Security Certificate (ISSC) in respect of its vessel and all other valid certificates evidencing compliance with this Clause;
|
4.2
|
Conditions subsequent
The Borrower undertakes to deliver or to cause to be delivered to the Bank on, or as soon as practicable after the Effective Date:
|
|
(a)
|
Certificate issued by the competent ships register or other evidence satisfactory to the Bank confirming that each Collateral Vessel is owned by the relevant Additional Corporate Guarantor and that the respective Collateral Mortgage is duly registered with second priority in the case of Collateral Vessel A and Collateral Vessel B and with first priority in the case of Collateral Vessel C and otherwise free of registered encumbrances;
|
|
(b)
|
confirmation from the relevant insurance brokers that the interest of the Bank as Mortgagee and Assignee of the Vessel has been duly endorsed and letters of
|
(c)
|
evidence that the person(s) referred to in Clause 25 of the Loan Agreement has accepted his/their appointment as Process Agent (
antiklitos
);
|
(d)
|
such favourable legal opinions from lawyers acceptable to the Bank and/or the Agent and its legal advisors on such matters concerning the laws of the Republic of the Marshall Islands, the Republic of Liberia and such other relevant jurisdiction as the Bank and/or the Agent shall require;
|
(e)
|
evidence that the Bank and/or the Agent has received the amount required for settlement of the fees and costs relating to the execution of this Second Supplemental Agreement and all other documents contemplated hereby including those relating to all necessary filings, registrations and legalisations thereof.
|
4.3
|
Without prejudice to the provisions of Clause 4.1, each of the Borrower and each of the Additional Corporate Guarantors hereby jointly and severally undertakes with the Bank and/or the Agent to make or procure to be made such amendments and/or additions to any of the documents delivered to the Bank and/or the Agent in accordance with Clause 4.1 and to execute and/or deliver to the Bank and/or the Agent or procure to be executed and/or delivered to the Bank and/or the Agent such further documents as the Bank and/or the Agent and its legal advisors may reasonably require to satisfy themselves that all the terms and requirements of this Second Supplemental Agreement have been complied with.
|
4.4
|
Without prejudice to the provisions of Clause 4.1, 4.2 and 4.3, in the event of any of the conditions referred to in this Clause 4 not being satisfied (whether with the express or implied agreement of the Bank and/or the Agent or otherwise), the Borrower will comply or procure compliance with all such conditions by no later than fourteen (14) days from the Effective Date or within such longer period as the Bank and/or the Agent shall agree to.
|
5
|
VARIATIONS TO THE LOAN AGREEMENT
|
5.1
|
In consideration of the agreement of the Bank contained in Clause 3 hereof each of the Borrower, the Additional Corporate Guarantors jointly and severally agree with the Bank that (subject to the satisfaction of the conditions contained in Clause 4) the provisions of the Loan Agreement will be and are hereby agreed to be varied and/or amended and/or supplemented as follows:
|
(a)
|
the definitions set out in Clause 1.2 of this Second Supplemental Agreement shall be included mutatis mutandis, in Clause 1. of the Original Loan Agreement replacing the relevant definitions of Clause 1. of the Original Loan Agreement and Clause 1. of the First Supplemental Agreement where the context permits and for the avoidance of any doubt:
|
|
(i)
|
the definitions "Bank" "Corporate Guarantee, "Guarantor", "Manager's Undertaking", "Operating Accounts", "Operating Account Pledges" shall be deleted from Clause 1 of the Original Loan Agreement and be replaced by the relevant definitions set out in Clause 1.2 of this Second Supplemental Agreement;
|
|
(ii)
|
the definitions of "Additional Corporate Guarantee", "Additional Corporate Guarantor", "Additional Security Documents", "Collateral Assignment", "Collateral Mortgage", "Collateral Security Documents", "Collateral Vessel", "General Assignments", "Loan Agreement", "New Manager's Undertaking", "Mortgages" and "Vessels" shall be deleted from Clause 1 of the First Supplemental Agreement and be replaced by the relevant definitions set out in Clause 1.2 of this Second Supplemental Agreement;
|
(b)
|
by adding in the definition of "Banking Day", the word "Luxembourg";
|
(c)
|
by deleting the definition of "Confirmation", "Credit Support Document", "Credit Support Provider", "Designated Transactions" "Master Agreement Security Deed", "Master Swap Agreement", "Swap Exposure". "Transaction" and Clause 9, Clause 13.3.9, Clause 14.4.3, Clause 16.2.2 and Schedule V in their entirety and all references thereto in the Loan Agreement and in the Security Documents and construing the Master Swap Agreement as having been terminated/released;
|
(d)
|
by deleting the words "any Swap Exposure" from the definition of "Indebtedness" and the words "and the Swap Exposure" from the definition of "Minimum Value" and from Clause 4.3. (f) (iv), Clause 13.5.2 (i) and from Schedule II C. 4.;
|
(e)
|
by replacing the words "of the aggregate amount of the Loan and the Swap Exposure" by the words "of the amount of the Loan" in sub-clauses 4.3 (f) (i) and 4.3.(f) (v);
|
(f)
|
by deleting the following words "to enter into Designated Transactions under the Master Swap Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents to which the Borrower is a party and the Master Swap Agreement" from Clause 4.1. (b) of the Loan Agreement;
|
(g)
|
by deleting sub-clauses 12.1. (a) and (b) from the Loan Agreement;
|
(h)
|
by deleting:
|
(i)
|
by adding in the definitions of "Operating Account" "Pledges" and "Retention Account", in Clause 16. or, wherever the context requires, after the words "with the Bank" or "the Bank", the words "or the Agent";
|
(j)
|
construing all references in the Original Loan Agreement to "the Guarantor", or "such Guarantor" as references to the Corporate Guarantor and the Additional Corporate Guarantors and by construing all references in the Loan Agreement to the "Security Parties", "each Security Party", "a Security Party" so as to include the Additional Corporate Guarantors;
|
(k)
|
by reading and construing hereafter the definition of "Security Documents" in Clause 1. of the Loan Agreement so as to include each of the Additional Security Documents and exclude the Released Documents and by construing all references to each of the Security Documents as being references to each such document as it is from time to time supplemented and/or amended;
|
(l)
|
by interpreting all references in the Security Documents to the Security Documents as if they included the Additional Security Documents and excluded the Released Documents;
|
(m)
|
by construing all security documents as securing the Indebtedness as herein defined;
|
(n)
|
by interpreting all references in the Security Documents to the Loan Agreement (however described) as references to the Loan Agreement as amended and supplemented by this Second Supplemental Agreement;
|
(o)
|
by replacing the words "or the Additional Corporate Guarantor" by the words "or the relevant Additional Corporate Guarantor" and by replacing in clauses 4.1 (g) and 25 (a) the words "Additional Corporate Guarantee" by the words "an Additional Corporate Guarantee;
|
(p)
|
by construing all references in the Original Loan Agreement to "the Vessel" or "Vessel" as if they included the Collateral Vessels as well;
|
(q)
|
by replacing references to "Additional Corporate Guarantee", "Additional Corporate Guarantor", "Additional Security Documents", "Collateral Assignment", "Collateral Mortgage", "Collateral Security Documents", "Collateral Vessel", "Corporate Guarantee", "General Assignments", "Loan Agreement", "Mortgages", "Manager's Undertaking", "New Manager's Undertaking", "Operating Accounts", "Operating Account Pledges", and "Vessels" by references to "Additional Corporate Guarantees", "Additional Corporate Guarantor", "Additional Security Documents", "Collateral General Assignments", "Collateral Mortgages", "Collateral Security
|
(r)
|
by replacing sub-clauses (j) to (m) in Clause 12.1 by the followings new sub-clauses reading as follows:
|
(s)
|
by replacing in Clause 16 of the Original Loan Agreement (a) references to "the Borrower", by references to "the Borrower and the Additional Corporate Guarantors" and (b) references to the Operating Account by references to the Operating Accounts as herein defined;
|
(t)
|
by construing all references in the Loan Agreement to "EFG Eurobank Ergasias S.A." or to the Bank as references to the Bank, or, where the context requires, as the case may be to the Bank and/or the Agent or to the Agent as both terms are herein defined;
|
(u)
|
by replacing the words and numbers "8, Othonos Street, Athens, Greece" and "83, Akti Miaouli, 185 38 Piraeus, Greece" by the following words and numbers "5, rue, Jean Monnet, L-2180 Luxembourg" (exception being made in connection with clause 24.1 of the Loan Agreement and all notices to the Bank and/or communications with the Bank of whatsoever nature which will be effected through the Agent);
|
(v)
|
by replacing (i) in the definition of Manager the words "40, Agiou Konstantinou Str., Aethrion Maroussi, Greece" and (ii) clause 24.1. the words "40, Agiou Konstantinou Str. 151 24 Maroussi, Greece" by the words "4, Messogiou & Evropis Street, 151 24 Maroussi, Greece";
|
(w)
|
by replacing in Clause 24.2 the words and numbers "three (3)" by the words and numbers "five (5)".
|
6.
|
CONTINUANCE OF LOAN AGREEMENT AND SECURITY DOCUMENTS
|
7.
|
FEES AND EXPENSES
|
8.
|
NOTICES
|
9.
|
APPLICABLE LAW AND JURISDICTION
|
SIGNED
by
|
)
|
|||
duly authorised
|
)
|
|||
attorney for and on behalf of
|
)
|
|||
MANOLIS SHIPPING LIMITED
|
)
|
|||
in its capacity as borrower
|
)
|
|||
SIGNED
by
|
)
|
|||
duly authorised
|
)
|
|||
attorney for and on behalf of
|
)
|
|||
SAF-CONCORD SHIPPING LTD
|
)
|
|||
in its capacity as additional corporate guarantor
|
)
|
|||
SIGNED
by
|
)
|
|||
duly authorised
|
)
|
|||
attorney for and on behalf of
|
)
|
|||
TIGER NAVIGATION CORP.
|
)
|
|||
in its capacity as additional corporate guarantor
|
)
|
|||
SIGNED
by
|
)
|
|||
duly authorised
|
)
|
|||
attorney for and on behalf of
|
)
|
|||
ALTERWALL BUSINESS INC.
|
)
|
|||
in its capacity as additional corporate guarantor
|
)
|
SIGNED
by
|
)
|
|||
the duly authorised
|
)
|
|||
attorneys for and on behalf of
|
)
|
|||
Eurobank Private Bank Luxembourg SA
|
)
|
|||
(formerly known as Eurobank EFG Private Bank Luxembourg SA)
|
)
|
|||
in its capacity as bank/lender
|
||||
)
|
||||
SIGNED
by
|
)
|
|||
and
|
)
|
|||
the duly authorised
|
)
|
|||
attorneys for and on behalf of
|
)
|
|||
Eurobank Ergasias S.A.
|
)
|
|||
(formerly known as EFG Eurobank Ergasias S.A.)
|
)
|
|||
in its capacity as agent for the bank/lender
|
)
|
|||
SIGNED
by
|
)
|
|||
and
|
)
|
|||
the duly authorised
|
)
|
|||
attorneys for and on behalf of
|
)
|
|||
Eurobank Ergasias S.A.
|
)
|
|||
(formerly known as EFG Eurobank Ergasias S.A.)
|
)
|
|||
in its capacity as Party A to the Master Swap Agreement
|
)
|
)
|
1
|
Definitions
|
6
|
2
|
Amendments to the Principal Agreement
|
6
|
3
|
Construction of the Principal Agreement and the other Security Documents
|
10
|
4
|
Supplemental Security Documents
|
10
|
5
|
Conditions Precedent
|
11
|
6
|
Representations, Warranties and Covenants
|
12
|
7
|
Agreement of the Bank
|
14
|
8
|
Fees Costs and Expenses
|
14
|
9
|
Headings and Counterparts
|
15
|
10
|
Continuation of the Principal Agreement and other Security Documents
|
15
|
11
|
Further Assurance
|
15
|
12
|
Joint and Several Liability
|
15
|
13
|
Notices
|
16
|
14
|
Applicable Law-Jurisdiction
|
16
|
EXECUTION PAGE
|
18
|
|
1.
|
XINGANG SHIPPING LTD,
a corporation organised and existing under the laws of the Republic of Liberia, having its registered office at 80 Broad Street, Monrovia, Liberia (the "
Borrower
"); as borrower and
|
2.
|
DIANA TRADING LTD.,
a company organised and existing under the laws of the Marshall Islands, having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (the "
First Corporate Guarantor
"); as corporate guarantor and
|
3.
|
EUROSEAS LTD.,
a company organised and existing under the laws of the Marshall Islands, having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (the "
Second Corporate Guarantor
") (and together with the First Corporate Guarantor the "
Corporate Guarantors
"); as corporate guarantor and
|
4.
|
ALCINOE SHIPPING LIMITED
a corporation duly formed and existing under the laws of the Republic of Cyprus, whose registered office is at Tribune House, 10 Skopa street, Nicosia, Cyprus, ("
Alcinoe
"), as corporate guarantor and
|
5.
|
GREGOS SHIPPING LIMITED,
a company organised and existing under the laws of the Marshall Islands, having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 ("
Gregos
" and together with Alcinoe the "
Released Guarantors
"), as corporate guarantor and
|
6.
|
HSBC BANK PLC
, a banking company duly incorporated under the laws of England whose registered office is at 8 Canada Square, London E14 5HQ England, acting for the purposes hereof through its branch at European Corporate & Structured Banking Centre, L28, 8 Canada Square, London E14 5HQ, United Kingdom (the "
Bank
" which includes its successors and assigns) as lender.
|
A.
|
Pursuant to a loan agreement dated 14 November 2006 (hereinafter called as it has been amended by an addendum Nr. 1 thereto dated 14 April 2010 the "
Principal
Agreement
" and as the same is hereby amended and as it may, from time to time, be further amended, supplemented or varied, the "
Loan Agreement
") made by and among the Bank as lender and the Borrower as borrower and the Corporate Guarantors as joint and several guarantors, the Bank has advanced to the Borrower a certain term loan facility in the amount of United States Dollars Twenty million (US$20,000,000) (the "
Loan
" which expression includes the amount thereof from time to time outstanding and owing to the Bank thereunder) for the purposes and upon the terms and conditions referred to therein.
|
B.
|
The Borrower and the Bank have entered into a master swap agreement (on the 1992 ISDA Master Agreement Multicurrency-Cross-border form) dated 14 November 2006 (hereinafter called, together with its schedule, the "
Principal ISDA Master Agreement
" and as amended by the ISDA Amendment Agreement, hereinbelow defined, and as it may from time to time be further amended, supplemented or varied hereinafter referred to as the "
ISDA Master Agreement
").
|
C.
|
Pursuant to the Principal Agreement, and as security for,
inter alia
, the due and punctual repayment of the Loan and payment of interest and fees accrued thereon and of all other sums of money whatsoever from time to time due and owing from the Borrower to the Bank and the performance of all the obligations of the Borrower under the Principal Agreement, the Principal ISDA Master Agreement and the other Security Documents, the Bank has been provided, inter alia, with:
|
|
(i)
|
a first preferred Liberian mortgage dated 15 November 2006 executed by the Borrower in favour of the Bank over the m/v "YM XINGANG I", registered in the ownership of the Borrower under the Liberian flag, with Official Number 13124 which was renamed to "
MARINOS
" on 25 October 2011 (hereinafter called "
MARINOS
"), which mortgage was recorded with the Office of the Deputy Commissioner of Maritime Affairs of the Republic of Liberia at 06:01 A.M. E.S.T. on 15 November 2006 in Book PM 58, at Page 759 (hereinafter called the "
Marinos Mortgage
");
|
|
(ii)
|
a third preferred Marshall Islands mortgage dated 15 November 2006 executed by the First Corporate Guarantor in favour of the Bank over the m/v "IRINI", registered in the ownership of the First Corporate Guarantor under the Marshall Islands flag, with Official Number 1773 ("
IRINI
"), which mortgage was recorded in the indexes maintained by the Maritime Administrator of the Marshall Islands on 15 November 2006 at 11:00 AM E.E.T at Piraeus, Greece, in Book PM-17 at Page 754; (hereinafter the "
Irini Mortgage
");
|
|
(iii)
|
a certain corporate guarantee dated 2 April 2006 granted by Alcinoe, whereby Alcinoe has irrevocably and unconditionally guaranteed by way of indemnity, as primary obligor and debtor (and not as surety only), the full, prompt and punctual payment of the Loan and interest thereon and of all other moneys and liabilities whether actual or contingent which may be owed to the Bank by the Borrower, under the Loan Agreement and the other Security Documents and the performance and observance of all terms and conditions to be performed and observed by the Borrower under the Loan Agreement and the other Security Documents (the "
Alcinoe Guarantee
").
|
|
(iv)
|
a first priority statutory Cypriot mortgage dated 2 April 2007 over the m/v "
GREGOS
", registered in the ownership of Alcinoe under the laws and flag of Cyprus with IMO nr. 8307210 (the "
Collateral Vessel
"), and a deed of covenants collateral thereto wherein a first priority assignment of all the
|
|
(v)
|
a certain corporate guarantee dated 14 June 2007 granted by Gregos, whereby Gregos has irrevocably and unconditionally guaranteed by way of indemnity, as primary obligor and debtor (and not as surety only), the full, prompt and punctual payment of the Loan and interest thereon and of all other moneys and liabilities whether actual or contingent which may be owed to the Bank by the Borrower, under the Loan Agreement and the other Security Documents and the performance and observance of all terms and conditions to be performed and observed by the Borrower under the Loan Agreement and the other Security Documents (the "
Gregos Guarantee
" and together with the Alcinoe Guarantee the "
Released Guarantees
").
|
|
(vi)
|
(a) a first preferred Marshall Islands mortgage dated 14 June 2007 executed by Gregos in favour of the Bank over the Collateral Vessel, which mortgage was discharged on 11 December 2009 following the sale of the Collateral Vessel; and (b) a first priority assignment of all the Earnings and Insurances and any Requisition Compensation of the Collateral Vessel in favour of the Bank (the "
Gregos Assignment
" and together with the Alcinoe Guarantee, and the Gregos Guarantee, the "
Released Documents
").
|
D.
|
By a letter dated 28th May 2012 the Bank has notified to the Borrower and the other Obligors that pursuant to Clause 14 of the Loan Agreement the lending office of the Bank has changed as from 1 June 2012 and the Bank for the purposes of the Loan Agreement and the other Security Documents is acting through its office at European Corporate & Structured Banking Centre, L28, 8 Canada Square, London E14 5HQ, United Kingdom.
|
E.
|
The Obligors have made certain repayments of the Loan and on the date hereof the outstanding principal amount of the Loan is United States Dollars Five million Seven hundred Fifty thousand (US$ 5,750,000).
|
F.
|
The Obligors have requested the Bank to (i) release the Released Guarantors from their respective obligations, as against the Bank, under the Released Documents and (ii) consent to the amendment of the repayment schedule of the Loan in the manner hereinafter set forth.
|
G.
|
The Bank has agreed to consent to the requests referred to in Recital F above on the condition (inter alia) that:
|
|
(i)
|
the Borrower and the Corporate Guarantors enter into this Addendum Nr. 2 with
|
|
the Bank; and
|
|
(ii)
|
the Borrower enters into an amendment to the Principal ISDA Master Agreement with the Bank incorporating certain amendments thereto (the "
ISDA Amendment
Agreement
"); and
|
|
(iii)
|
the Borrower enters into an amendment to the Marinos Mortgage (the "
Marinos Mortgage Amendment
"); and
|
|
(iv)
|
the First Corporate Guarantor enters into an amendment to the Irini Mortgage (the "
Irini Mortgage Amendment
")
|
H.
|
In connection with the foregoing, the parties hereto have agreed to partially amend the Principal Agreement by entering into this Addendum Nr. 2, keeping all the other provisions of the Principal Agreement in full force and effect.
|
1
|
DEFINITIONS
|
1.01
|
In this Addendum Nr. 2 (which term shall include any addenda, amendments or supplements hereto) and in the Recitals hereof capitalised terms not otherwise defined herein shall have the meanings ascribed to them in the Principal Agreement and furthermore:
|
2
|
AMENDMENTS TO THE PRINCIPAL AGREEMENT
|
2.01
|
With effect from the date hereof the following definitions of Clause 1.02 of the Principal Agreement are amended to read as follows:
|
2.02
|
With effect from the date hereof the following definitions are inserted in Clause 1.02 of the Principal Agreement, in their proper alphabetical order, to read follows:
|
2.03
|
With effect from the date hereof Clause 4.01 shall be amended in its entirety so as to read as follows:
|
2.04
|
With effect from the date hereof Clause 4.04 shall be amended in its entirety so as to read as follows:
|
2.05
|
With effect from the date hereof the new Clauses 4.05, 4.06 and 4.07 shall be inserted after clause 4.04 reading as follows:
|
2.06
|
With effect from the date hereof a new Clause 8.12 shall be inserted after Clause 8.11 reading as follows:
|
2.07
|
With effect from the date hereof Clause 16.02 shall be amended in its entirety so as to read as follows:
|
"16.02. Every notice, request, demand or other communication shall be sent:
|
||
(1)
|
to the Obligors at:
|
|
c/o EUROBULK LTD
|
||
4, Messogiou & Evropis Street,
|
||
151 24 Marousi,
|
||
Athens,
|
||
Greece.
|
||
Tel: +30 211 180 4066
|
||
Fax: +30 211 180 4097
|
||
(2)
|
to the Bank at:
|
|
European Corporate & Structured Banking Centre,
|
||
L28, 8 Canada Square,
|
||
London E14 5HQ,
|
||
United Kingdom.
|
||
Tel: +44 (0)207 992 1188
|
Fax: +44 (0)207 991 4619
|
||
Attn. Nr. Alastair Muir.
|
3
|
CONSTRUCTION OF THE PRINCIPAL AGREEMENT AND THE OTHER SECURITY DOCUMENTS
|
3.01
|
With effect from the date hereof all references in the Principal Agreement to "this Agreement" shall be construed as references to the Principal Agreement as amended and/or supplemented by this Addendum Nr. 2 and the words "hereby", "hereof", "herein", "hereunder" and the like shall be construed accordingly; and
|
3.02
|
With effect from the date hereof all references in the Principal Agreement to "the ISDA Master Agreement" shall be construed as references to the Principal ISDA Master Agreement as amended and/or supplemented by the ISDA Amendment Agreement and the words "thereby", "thereof", therein", "thereunder" and the like shall be construed accordingly; and
|
3.03
|
With effect from the date hereof all references in any of the Security Documents to the "Agreement" or to the "Loan Agreement" or to the "ISDA Master Agreement" shall be construed respectively as references to the Principal Agreement as amended and/or supplemented by this Addendum Nr. 2 and to the Principal ISDA Master Agreement as amended and/or supplemented by the ISDA Amendment Agreement and the words "thereby", "thereof", therein", "thereunder" and the like shall be construed accordingly; and
|
3.04
|
With effect from the date hereof all references in the Loan Agreement or in the ISDA Master Agreement or in any other of the Security Documents to the Security Documents (including references in the Security Document in question to itself) shall be construed as to include the Supplemental Security Documents referred to in Clause
4
hereof and the words "herein", "hereof", "hereunder", "therein", "thereof" and the like shall be construed accordingly.
|
4
|
SUPPLEMENTAL SECURITY DOCUMENTS
|
4.01
|
On or prior to the date hereof the Borrower and the Corporate Guarantors shall ensure and procure that the Bank is provided in form and substance satisfactory to the Bank and its legal advisors with:
|
4.01.01
|
the Marinos Mortgage Amendment duly executed by the Borrower and registered with the Liberian Registry; and
|
4.01.02
|
the Irini Mortgage Amendment duly executed by the First Corporate Guarantor and registered with the Marshall Islands Registry; and
|
4.01.03
|
the ISDA Amendment Agreement duly executed by the Borrower.
|
5
|
CONDITIONS PRECEDENT
|
5.01
|
The Bank shall have no obligation to consent to the requests of the Obligors referred to in Recital
F
hereof unless the Bank has received the following in form and substance satisfactory to the Bank, in all respects, on or prior to the date hereof:
|
5.01.01
|
this Addendum Nr. 2 duly executed;
|
5.01.02
|
certificate of incumbency of each Obligor signed by its respective secretary or a director thereof, stating, inter alia, the officers and/or directors of same as well as details as to the share capital, as well as to the due authority of any person signing this Addendum Nr. 2, the Supplemental Security Documents and any other documents executed pursuant hereto or thereto;
|
5.01.03
|
minutes of meeting of the directors and shareholders of each of the Borrower and the First Corporate Guarantor (and any corporate shareholder thereof) at which there was approved the entry into, execution delivery and performance of this Addendum Nr. 2, the Supplemental Security Documents and any other documents executed pursuant hereto or thereto to which each Corporate Obligor is a party;
|
5.01.04
|
evidence of the due authority of any person signing this Addendum Nr. 2, the Supplemental Security Documents and any other documents executed pursuant hereto or thereto on behalf of each Corporate Obligor;
|
5.01.05
|
certificate or other evidence satisfactory to the Bank, in respect of the existence and good standing of the Corporate Obligors;
|
5.01.06
|
the Supplemental Security Documents referred to in Clause 4 hereof, all duly executed, delivered to the Bank and where appropriate duly registered with the relevant authorities;
|
5.01.07
|
confirmation from any agents for service of process nominated in this Addendum Nr. 2 and elsewhere in the Supplemental Security Documents for the acceptance of any notice of service of process that they consent to such nomination;
|
5.01.08
|
(if required by the Bank) opinions from lawyers appointed by the Bank at the Obligors' expense as to all such aspects of law as the Bank shall deem relevant for this Addendum Nr. 2 and the Supplemental Security Documents and any other documents executed pursuant thereto or hereto;
|
5.01.09
|
payment to the Bank of an amount of Two thousand Five hundred Euros (€2,500) plus disbursements and VAT thereon in respect of legal fees of the Greek legal advisors of the Bank in respect of this Addendum Nr. 2 and the Supplemental Security Documents;
|
5.01.10
|
payment to the Bank of an amount of Nine hundred US Dollars ($900) plus disbursements and VAT thereon (if applicable) in respect of legal fees of the
|
5.01.11
|
payment to the Liberian Registry of all fees and expenses for the registration of the Marinos Mortgage Amendment;
|
5.01.12
|
payment to the Marshall Islands Registry of all fees and expenses for the registration of the Irini Mortgage Amendment; and
|
5.01.13
|
any other document as the Bank may reasonably request.
|
5.02
|
Notwithstanding the foregoing, the Bank shall have no obligation to consent to the requests referred to in Recital
F
hereof if an Event of Default or an event which with the giving of notice, or lapse of time or otherwise, might constitute an Event of Default, has occurred and is continuing.
|
6
|
REPRESENTATIONS, WARRANTIES AND COVENANTS
|
6.01
|
As at the date hereof the Borrower and the Corporate Guarantors make, repeat and restate, as the case may be, all the representations, warranties and covenants set forth in the Principal Agreement, mutatis mutandis, as of the date hereof.
|
6.02
|
In addition to the above the Borrower and the Corporate Guarantors hereby represent and warrant to the Bank as at the date of this Addendum Nr. 2 that:
|
6.02.01
|
each Corporate Obligor is a legal entity duly formed and validly existing under the laws of the country of its incorporation and has the power and authority to own its assets and carry on its business in each jurisdiction in which it owns assets or carries on business;
|
6.02.02
|
each Obligor has power to enter into this Addendum Nr. 2 and the Supplemental Security Documents to which each it is a party and to perform and discharge its duties and liabilities hereunder and thereunder and that all necessary action (whether corporate or otherwise) required to authorise the execution, delivery and performance of this Addendum Nr. 2 and the Supplemental Security Documents has been duly taken;
|
6.02.03
|
the execution, delivery and performance of this Addendum Nr. 2 and the Supplemental Security Documents will not contravene or exceed the powers granted to each Corporate Obligor by, or any provision of, any law or regulation in any jurisdiction to which such Corporate Obligor is subject, any order or decree of any governmental agency or court of or in any jurisdiction to which each Corporate Obligor is subject, the certificates of incorporation, memoranda and articles of association of each Corporate
|
6.02.04
|
all consents, licences, approvals, registrations, authorisations or declarations in any jurisdiction to which each Corporate Obligor is subject as required to enable each Corporate Obligor to lawfully enter into and perform and discharge its duties and liabilities under this Addendum Nr. 2 and the Supplemental Security Documents to which it is a party and to ensure that the duties and liabilities of each Corporate Obligor hereunder and thereunder are legal, valid and enforceable in accordance with the terms of this Addendum Nr. 2 and the Supplemental Security Documents to which it is a party and to make this Addendum Nr. 2 and the Supplemental Security Documents admissible in evidence in such aforesaid jurisdictions have been obtained or made and are in full force and effect;
|
6.02.05
|
this Addendum Nr. 2 and the Supplemental Security Documents constitute legal, valid, binding and unconditional duties and liabilities of the Obligors, enforceable against the Obligors in accordance with the terms hereof;
|
6.02.06
|
the information provided to the Bank in relation to this transaction is true and correct in all material respects and does not omit any material detail;
|
6.02.07
|
save for the recordation of the Marinos Mortgage Amendment with the competent Liberian authority and of the Irini Mortgage Amendment with the competent Marshall Islands authority, it is not necessary or advisable to ensure the legality, validity, enforceability or admissibility in evidence of this Addendum Nr. 2 and the Supplemental Security Documents, that any of them be filed, recorded or enrolled with any governmental authority or agency or that they be stamped with any stamp, registration or similar transaction tax in the Republic of Greece, or the Republic of Liberia, or the Republic of the Marshall Islands, or in any other country where any Corporate Obligor carries on business;
|
6.02.08
|
no Obligor is in default under any agreement to which it is a party or by which it may be bound and no litigation, arbitration, tax claim or administrative proceeding for an amount exceeding US Dollars Two hundred Fifty thousand (US$250,000) is current or pending or (to the knowledge of the Obligors) threatened;
|
6.02.09
|
the financial condition of the Obligors has not suffered any material deterioration since that condition was last disclosed to the Bank;
|
6.02.10
|
the choice of law agreed to govern this Addendum Nr. 2 and the Supplemental Security Documents and the submission to the jurisdiction of the courts agreed in each of this Addendum Nr. 2 and the Supplemental Security Documents are or will be
|
6.02.11
|
the authority of the representatives of each Corporate Obligor executing this Addendum Nr. 2 and the Supplemental Security Documents or any one of them has not been revoked or otherwise ceased and remains in full force and effect.
|
7
|
AGREEMENT OF THE BANK
|
7.01
|
The Bank relying upon each of the representations and warranties set out in Clause
6
and subject to and upon the terms and conditions of this Addendum Nr. 2 and in particular but without limitation subject to the fulfilment of the conditions precedent set out in Clause
5.01
on or before the date hereof and to the condition that no Event of Default or an event which with the giving of notice, or lapse of time or otherwise, might constitute an Event of Default, has occurred and continues, hereby:
|
7.01.01
|
agrees to the amendments of the Principal Agreement on the terms set out in Clause
2
of this Addendum Nr. 2 and
|
7.01.02
|
releases the Released Guarantors from their respective obligations against the Bank arising under the Released Documents;
|
8
|
FEES COSTS AND EXPENSES
|
8.01
|
Whether or not the transactions contemplated by this Addendum Nr. 2 and the Supplemental Security Documents or any of them take effect, the Borrower covenants and agrees to pay to the Bank on demand, on a full indemnity basis, all costs and expenses (including without limitation the fees and disbursements of the Bank's legal advisors) incurred by the Bank (i) in connection with the negotiation, preparation, execution and delivery of this Addendum Nr. 2 and of the Supplemental Security Documents and/or any other document executed pursuant hereto or thereto, (ii) in enforcing or attempting to enforce the provisions of this Addendum Nr. 2, and of the Supplemental Security Documents and/or any other document executed pursuant hereto or thereto and (iii) in preserving or protecting or attempting to preserve or protect the security created hereunder and/or under any other document executed pursuant hereto or thereto.
|
8.02
|
The Borrower covenants and agrees to pay and discharge all stamp duties, registration and recording fees and charges (if any) and any other charges whatsoever and wherever payable or due in respect of, and all losses, costs, expenses, damages, claims, demands, rights of set-off and/or any counterclaim directly or indirectly incurred by the Bank as a result of or in connection with this Addendum Nr. 2 and of the Supplemental Security Documents and/or any other document executed pursuant hereto or thereto.
|
9
|
HEADINGS AND COUNTERPARTS
|
9.01
|
The headings in this Addendum Nr. 2 are for the purpose of reference only, and shall not limit or otherwise affect any of the terms hereof. This Addendum Nr. 2 may be executed in any number of counterparts. Any single counterpart or set of counterparts signed, in either case, by all the parties hereto shall constitute a full and original agreement for all purposes.
|
10
|
CONTINUATION OF THE PRINCIPAL AGREEMENT AND OTHER SECURITY DOCUMENTS
|
10.01
|
Subject to the amendments to the Principal Agreement set out in or to be made pursuant to this Addendum Nr. 2 and such further modifications (if any) thereof as may be necessary to make same consistent with the terms of this Addendum Nr. 2 or the documents supplementing and amending same (as the case may be) the Loan Agreement and the other Security Documents shall remain in full force and effect and, without prejudice to the generality of the foregoing, the Security Documents shall continue to secure the obligations of the Obligors under the Principal Agreement as supplemented and amended by this Addendum Nr. 2.
|
10.02
|
Without prejudice to the generality of the foregoing, the Corporate Guarantors hereby confirm and acknowledge that each of them fully agrees to the terms of this Addendum Nr. 2 (including the release of the Released Guarantors contained in Clause 7.01.02 hereof), and the provision of the Supplemental Security Documents referred to herein and that the Corporate Guarantees of the Corporate Guarantors are and remain in full force and effect securing all the obligations of the Borrower to the Bank under the Principal Agreement as amended and supplemented by this Addendum Nr. 2 and as it may be further amended, varied or supplemented.
|
11
|
FURTHER ASSURANCE
|
11.01
|
The Borrowers and the Corporate Guarantors agree with the Bank to execute, deliver and, if appropriate, register at their own expense any and all such further assurances or documents as the Bank may require for the purpose of more fully carrying into effect the purposes of this Addendum Nr. 2 and/or ensuring that the Bank's security is maintained.
|
12
|
JOINT AND SEVERAL LIABILITY
|
12.01
|
Each of the obligations of the Borrower and the Corporate Guarantors hereunder are joint and several. Neither the Borrower's obligations nor the Corporate Guarantors' obligations shall in any way be avoided, discharged or released or otherwise adversely affected if for any reason whatsoever (i) any one of the Corporate Obligors does not become a party to this Addendum Nr. 2 or any of the Supplemental Security Document or is at any time not effectively bound by the terms hereof or thereof or (ii) this Addendum Nr. 2 or any of the Supplemental Security Document or the liabilities of any
|
13
|
NOTICES
|
13.01
|
Clause 16 (Notices) of the Principal Agreement as amended by virtue of this Addendum Nr. 2 shall apply to this Addendum Nr. 2 as if the same was set out in full herein.
|
14
|
APPLICABLE LAW-JURISDICTION
|
14.01
|
This Addendum Nr. 2 shall be governed by, and construed in accordance with English Law.
|
14.02
|
Subject to Clause 14.03, the High Court of Justice in England shall have non-exclusive jurisdiction to settle any disputes, which may arise out of or in connection with this Addendum Nr. 2.
|
14.03
|
Clause 14.02 is for the exclusive benefit of the Bank, which reserves the right:
|
14.03.01
|
to commence proceedings in relation to any matter which arises out of or in connection with this Addendum Nr. 2 in the courts of Piraeus, of the Republic of Greece and/or any country other than England or Greece and which have or claim jurisdiction to that matter; and
|
14.03.02
|
to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or Greece or without commencing proceedings in England or Greece.
|
14.04
|
The Obligors hereby irrevocably designate and appoint Mr. Patrick Hawkins of Messrs Hill Taylor Dickinson, of 2, Defteras Merarchias Street 185 35 Piraeus, Greece, as agent for the service of process ("antiklitos") upon whom any judicial process may be served and agrees to consider any legal process or any demand or notice made served by or on behalf of the Bank on the said agent as being made to the Obligors. The designation of such an authorized agent ("antiklitos") shall remain irrevocable throughout the whole Security Period.
|
14.05
|
The Obligors hereby irrevocably designate and appoint Messrs Hill Taylor Dickinson, presently located at Irongate House, Duke's Place, London EC3A 7LP, London, England, to act as its agent to receive and accept on their behalf any process or other document relating to any proceedings in the English courts which are connected with this Addendum Nr. 2 and the Supplemental Security Documents
|
14.06
|
Nothing in this Clause 14 shall exclude or limit any right, which the Bank may have (whether under the law of any country, an international convention or otherwise) with
|
14.07
|
In this Clause 14, "proceedings" means proceedings of any kind, including an application for a provisional or protective measure or enforcement court order (diatagi pliromis).
|
SIGNED
and
DELIVERED
|
)
|
|
as a
DEED
|
)
|
|
by
XINGANG SHIPPING LTD
|
)
|
|
acting by
|
)
|
|
Mrs. Sterania Karmiri
|
)
|
|
its duly authorised
|
)
|
|
Attorney in Fact
|
)
|
|
in the presence of:
|
)
|
SIGNED
and
DELIVERED
|
)
|
|
as a
DEED
|
)
|
|
by
DIANA TRADING LTD.
|
)
|
|
acting by
|
)
|
|
Mrs. Sterania Karmiri
|
)
|
|
its duly authorised
|
)
|
|
Attorney in Fact
|
)
|
|
in the presence of:
|
)
|
|
SIGNED
and
DELIVERED
|
)
|
|
as a
DEED
|
)
|
|
by
EUROSEAS LTD.
|
)
|
|
acting by
|
)
|
|
Mrs. Sterania Karmiri
|
)
|
|
its duly authorised
|
)
|
|
Attorney in Fact
|
)
|
|
in the presence of:
|
)
|
SIGNED
and
DELIVERED
|
)
|
|
as a
DEED
|
)
|
|
by
ALCINOE SHIPPING LIMITED
|
)
|
|
acting by
|
)
|
|
Mrs. Sterania Karmiri
|
)
|
|
its duly authorised
|
)
|
|
Attorney in Fact
|
)
|
|
in the presence of:
|
)
|
SIGNED
and
DELIVERED
|
)
|
|
as a
DEED
|
)
|
|
by
GREGOS SHIPPING LIMITED
|
)
|
|
acting by
|
)
|
|
Mrs. Sterania Karmiri
|
)
|
|
its duly authorised
|
)
|
|
Attorney in Fact
|
)
|
|
in the presence of:
|
)
|
SIGNED
and
DELIVERED
|
)
|
|
as a
DEED
|
)
|
|
by
HSBC BANK PLC
|
)
|
|
acting by
|
)
|
|
Mr. Antonis Lamnides
|
)
|
|
its duly authorised
|
)
|
|
Attorney in Fact
|
)
|
|
in the presence of:
|
)
|
Second Amendment to Euromar LLC Agreement, March 2013
|
Page 1 of 3
|
Second Amendment to Euromar LLC Agreement, March 2013
|
Page 2 of 3
|
EUROMAR LLC
|
||
By:
|
||
Name:
|
||
Title:
|
||
EUROSEAS LTD.
|
||
By:
|
||
Name:
|
||
Title:
|
||
PAROS LTD.
|
||
By:
|
||
Name:
|
||
Title:
|
||
ALL SEAS INVESTORS I LTD.
|
||
By:
|
||
Name:
|
||
Title:
|
||
ALL SEAS INVESTORS II LTD.
|
||
By:
|
||
Name:
|
||
Title:
|
||
ALL SEAS INVESTORS III LP
|
||
By:
|
||
Name:
|
||
Title:
|
||
Second Amendment to Euromar LLC Agreement, March 2013
|
Page 3 of 3
|
|
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
|
|
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.
|
|
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
|
|
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.
|
|
(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.
|
|
(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.
|